Dallas, TX — August 4, 2010 — DG FastChannel, Inc, a leading provider of digital media services to the advertising, entertainment and broadcast industries, today reported record second quarter financial results. Consolidated revenue for the second quarter 2010 increased 38% to $60.3 million compared to $43.7 million in the same period of 2009. Second quarter Adjusted EBITDA increased 67% to $28.1 million compared to $16.8 million for the same period of 2009. 

“The Company’s revenue, margins, earnings and net debt show marked improvements during the second quarter.” said Scott Ginsburg, Chairman and CEO of DG FastChannel.  “The Company continues to execute on its strategic business plan.”

Second quarter highlights include:

·         Revenue growth of 38% from the year-earlier period.

·         Revenue from the Company’s internet media service division, Unicast increased by 51% from the year earlier period.

·         The Company retired all of its outstanding debt with a portion of the proceeds from the public equity offering that raised net proceeds of approximately $108 million in the second quarter.

·         As of June 30, 2010, the Company reported $79.6 million in cash and no debt.

·         Revenue from the delivery of HD advertising content increased 99% to $23.9 million compared to $12.0 million in the same period of 2009.

·         Net income was $9.0 million, or $0.32 per diluted share, compared with net income of $3.6 million, or $0.16 per diluted share in the same period of 2009.

·         Non-GAAP net income was $14.0 million, or $0.49 per diluted share, compared to non-GAAP net income of $6.0 million, or $0.27 per diluted share in the same period of 2009.

Six month period ended June 30, 2010 highlights include:

·         Revenues were $114.5 million, compared with revenues of $85.1 million in the same period of 2009, an increase of 34%.

·         Adjusted EBITDA was $52.3 million, up 69% from the same period of 2009, which reported Adjusted EBITDA of $30.9 million.

·         Net income was $17.0 million, or $0.64 per diluted share, compared with net income of $5.2 million, or $0.23 per diluted share in the same period of 2009.

·         Non-GAAP net income was $24.4 million, or $0.91 per diluted share, compared to non-GAAP net income of $10.0 million, or $0.45 per diluted share in the same period of 2009.

The Company recorded several one-time and non-recurring charges during the second quarter. First, the retirement of all outstanding debt resulted in pretax charges totaling $4.3 million, including a $2.2 million write down of deferred financing costs in connection with the debt prepayment and a $2.1 million charge relating to the early termination of all interest rate swaps.   The second quarter Non-GAAP net income per share of $0.49 per diluted share excludes the effects of these non-recurring items.

Mr. Ginsburg concluded, “Another quarter of dynamic revenue growth and the retirement of all outstanding debt have substantially improved the Company’s financial strength. Robust free cash flow and improved financial flexibility position DG FastChannel favorably to capitalize on opportunities that will allow us to better serve our customers, support our strategic initiatives and add value for our shareholders.”