DG Provides Preliminary First Quarter 2013 Revenues, Full Year 2013 Guidance

DG Provides Preliminary First Quarter 2013 Revenues, Full Year 2013 Guidance 
DALLAS, TX -- (Marketwired) -- 04/09/13 --  DG(R) (NASDAQ: DGIT), the
leading global independent ad management and distribution platform,
today reported preliminary revenue expectations for the first quarter
of 2013 and guidance for the full year. First quarter consolidated
revenues for the three months ended March 31, 2013 are expected to be
between $90 and $92 million. Management noted the revenues reflect
approximately 10% growth in Online segment revenues, and a 7%
decrease in TV segment revenues.  
"Our Online segment continues to make good progress and achieved
double-digit growth. Our revenues benefited from both strong online
video revenues and adoption of our data driven products and
services," said Neil Nguyen, CEO and President of DG. "We also
released a significant product update to our MediaMind platform in
the latter part of the quarter, which continues to build on our
strong position in the use of both video and mobile as key parts of
the integrated marketing mix." 
Additional First Quarter Highlights: 

--  The Company ended the quarter with approximately $45 million in cash,
    down from $84.5 million at the end of the fourth quarter primarily due
    to a $50 million principal payment related to its amended credit
    facility, partially offset by expected positive cash flow from
    operations during the quarter.
--  Adjusted EBITDA is expected to reflect the effects of product mix

For 2013 the Company expects the following:  

--  Total revenues for the full year 2013 are expected to be in the range
    of $370-$400 million.
--  Adjusted EBITDA is expected to be in the range of $105-$125 million.

The Company will provide additional information on its regular first
quarter 2013 Conference Call, scheduled for May 7, 2013. The webcast
is open to the general public and all interested parties may access
the live webcast on the Internet at the Company's web site at
Non-GAAP Financial Measures 
In addition to providing financial measurements based on generally
accepted accounting principles in the United States of America
(GAAP), the Company has historically pr
ovided additional financial
measures that are not prepared in accordance with GAAP (non-GAAP). We
believe that the inclusion of Adjusted EBITDA as a non-GAAP financial
measure in this press release helps investors to gain a meaningful
understanding of our past performance and future prospects,
consistent with how management measures and forecasts our
performance, especially when comparing such results to previous
periods or forecasts. Our management uses Adjusted EBITDA as a
non-GAAP financial measure, in addition to GAAP financial measures,
as the basis for measuring our core operating performance and
comparing such performance to that of prior periods and to the
performance of our competitors. 
We use Adjusted EBITDA to measure the operating performance of our
business. This measure also is used by management in its financial
and operational decision-making. There are limitations associated
with reliance on any non-GAAP financial measures because they are
specific to our operations and financial performance, which makes
comparisons with other companies' financial results more challenging.
By providing both GAAP and non-GAAP financial measures, we believe
that investors are able to compare our GAAP results to those of other
companies while also gaining a better understanding of our operating
performance as evaluated by management. 
The Company considers Adjusted EBITDA to be an important indicator of
the overall performance of the Company because it eliminates the
effects of events that are non-cash, or are not expected to recur as
they are not part of our ongoing operations. 
The Company defines "Adjusted EBITDA" as income (loss) from
operations, before depreciation and amortization, share-based
compensation, acquisition and integration expenses, and restructuring
/ impairment charges and benefits. The Company considers Adjusted
EBITDA to be an important indicator of the Company's operational
strength and performance and a good measure of the Company's
historical operating trends. 
Adjusted EBITDA eliminates items that are either not part of our core
operations, such as acquisition and integration expenses or do not
require a cash outlay, such as share-based compensation and
impairment charges. Adjusted EBITDA also excludes depreciation and
amortization expense, which is based on the Company's estimate of the
useful life of tangible and intangible assets. These estimates could
vary from actual performance of the asset, are based on historical
costs, and may not be indicative of current or future capital
Adjusted EBITDA should be considered in addition to, not as a
substitute for, the Company's operating income (loss), as well as
other measures of financial performance reported in accordance with
Reconciliation of Non-GAAP Financial Measures 
In accordance with the requirements of Regulation G issued by the
Securities and Exchange Commission, the Company is presenting the
most directly comparable GAAP financial measure and reconciling the
non-GAAP financial measure to the comparable GAAP measure. 
About DG 
DG (NASDAQ: DGIT) is the leading global multiscreen advertising
management and distribution platform, fueling campaign management
across TV, online, mobile and beyond. Through a combination of
technology and services, DG empowers brands and advertisers to work
faster, smarter and more competitively. Boasting the world's largest
hybrid satellite and Internet network for broadcast video delivery,
the Company's unparalleled campaign management encompasses
multiscreen ad delivery, cross-channel research and analytics, and
unified asset management. The DG product portfolio consists of two
overarching product lines for online and video campaign management:
MediaMind and VideoFusion. 
With New York as a center of operations, DG is a global company that
connects over 14,000 advertisers and 7,400 agencies worldwide with
their targeted audiences through an expansive network of over 50,000
media destinations across TV broadcast and digital advertising in 78
countries, managing approximately ten percent of the world's media
assets. For more information, visit http://www.dgit.com. 
Forward-Looking Statements 
This release contains forward-looking statements relating to the
Company. These forward-looking statements involve risks and
uncertainties, which could cause actual results to differ materially
from those projected. Such risks and uncertainties include, among
other things; 

--  our ability to further identify, develop and achieve commercial
    success for new products;
--  delays in product development;
--  the development of competing distribution and online services and
    products, and the pricing of competing services and products;
--  our ability to protect our proprietary technologies;
--  the shift of advertising spending by our customers to online and
    non-traditional media from television and radio;
--  the demand for High Definition (HD) ad delivery by our customers;
--  integrating MediaMind and other acquisitions with our operations,
    systems, personnel and technologies;
--  our ability to successfully transition customers from our previous
    online acquisitions to our MediaMind digital platform for ad
--  operating in a variety of foreign jurisdictions;
--  fluctuations in currency exchange rates;
--  adaptation to new, changing, and competitive technologies;
--  potential additional impairment of our goodwill and potential
    impairment of our other long-lived assets; and other risks relating to
    DG's business which are set forth in the Company's filings with the
    Securities and Exchange Commission. DG assumes no obligation to
    publicly update or revise any forward-looking statements.

Exhibit #1  

                          Digital Generation, Inc.                       
                      Supplemental Non-GAAP Disclosure                   
       Reconciliation of Outlook Adjusted EBITDA to Outlook Net Income   
                    For the Year Ending December 31, 2013                
   ($ in millions, except per share amounts)                 2013        
                                                      Low end   High end 
                                                     of Range   of Range 
                                                    ---------- ----------
   Net income                                       $       -- $       11
   Provision for income taxes                                2          4
   Interest expense and other, net                          33         34
   Depreciation and amortization                            53         55
   Share-based compensation                                 13         14
   Acquisition and integration expenses                      4          7
                                                    ---------- ----------
   Adjusted EBITDA                                  $      105 $      125
                                                    ========== ==========
   Net income                                       $       -- $       11
   Common shares outstanding, diluted (in millions)         28         28
                                                    ---------- ----------
   Diluted earnings per share                       $     0.01 $     0.39
                                                    ========== ==========

For more information contact: 
JoAnn Horne
Market Street Partners
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