LAS VEGAS, May 15 NV-DigitalFX-Q108-ERN
LAS VEGAS, May 15 /PRNewswire-FirstCall/ -- DigitalFX International, Inc.
(Amex: DXN), a streaming video and digital communications company, announced
today its results for the quarter ended March 31, 2008.
The Company reported revenue of $4.8 million for the quarter ended March
31, 2008, down from $6.4 million for the same quarter in 2007. In addition,
the Company reported a net loss of $3.1 million for the quarter ended March
31, 2008, as compared to reported income of $56,000 for the quarter ended
March 31, 2007. This equates to a loss per share for the current quarter of
($0.12) on weighted average shares outstanding of 25.3 million.
Mr. Craig Ellins, Chief Executive Officer for DigitalFX International,
Inc. commented, "During the first quarter of 2008, we continued the
restructuring begun in 2007. Our first quarter bottom line was adversely
affected by one-time adjustments related to the restructuring of our debt and
market value adjustments on one of our investments, which accounted for the
majority of our loss. We were able to favorably renegotiate our debt structure
and reduced corporate liabilities by $4 million. Additionally, in 2008, we
further fortified our management team with the addition of three seasoned
executives, all designed to lower our dependency on outside contractors and
attorneys. Sales and marketing initiatives were undertaken that have begun to
show positive results. Our subscription revenues and customer base appear to
be stabilizing. We continued to make significant investments in product
improvements and new product launches designed to increase affiliate
membership, business to business subscribers and retail customers. These
investments in the growth side of the company should yield significant
benefits as the company launches a number of product and services packages
during the second and third quarter of 2008. This should have a positive
impact on both revenue and the bottom line going forward."
In accordance with the terms of the amended and restated notes issued as
of November 30, 2007, the Company is not in breach of the financial covenants
included in such notes.
About DigitalFX International, Inc.
DigitalFX International, Inc. (Amex: DXN) is a creator of web-based
products such as streaming live and on-demand video, video email and digital
storage that because of their extremely low cost for the first time brings the
next generation Internet revolution to individuals through its
www.helloworld.com website and small and medium-sized businesses via its
www.firststream.com website. The company also develops and markets proprietary
communication and collaboration services, and social networking software
applications, including its flagship product, called The Studio. The Studio is
a cost-effective, all-in-one, web-based solution that allows users to send
email and video email, group chat with video, conduct a private, public or
pay-per-view live webcast, upload digital content, and post videos on demand
in multiple media formats. For more information about DigitalFX, please visit
us at http://www.digitalfx.com.
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http://www.b2i.us/irpass.asp?BzID=1407&to=ea&s=0 .
FORWARD-LOOKING STATEMENTS
The information contained herein includes forward-looking statements.
These statements relate to future events or to our future financial
performance, and involve known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. Examples of forward-looking statements include
statements related expenditures on product development, growth in our
affiliate base and retail customer base, new product launches and our overall
growth. You should not place undue reliance on forward-looking statements
since they involve known and unknown risks, uncertainties and other factors
which are, in some cases, beyond our control and which could, and likely will,
materially affect actual results, levels of activity, performance or
achievements. Any forward-looking statement reflects our current views with
respect to future events and is subject to these and other risks,
uncertainties and assumptions relating to our operations, results of
operations, growth strategy and liquidity. We assume no obligation to publicly
update or revise these forward-looking statements for any reason, or to update
the reasons actual results could differ materially from those anticipated in
these forward-looking statements, even if new information becomes available in
the future. The safe harbor for forward-looking statements contained in the
Securities Litigation Reform Act of 1995 protects companies from liability for
their forward-looking statements if they comply with the requirements of the
Act.
DigitalFX International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except share data)
March 31, December 31,
2008 2007
Assets(unaudited)
Current assets:
Cash and cash equivalents $2,046 $5,319
Accounts receivable507 50
Inventories, net 672849
Prepaid bandwidth charges, affiliate 192 51
Prepaid expenses and other assets 609411
Deferred income taxes, net 43 45
Total current assets 4,069 6,725
Restricted cash- 2,000
Investment in and convertible secured
promissory note due from related party 325225
Investments, net 1,077 1,102
Deferred financing costs 442961
Property and equipment, net of accumulated
depreciation and amortization of $669 and
$576, respectively 535628
Deposits, merchant processors746789
Other assets 12 12
Deferred income taxes, net 1,856 1,995
Total assets $9,062$14,437
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $154 $383
Accrued expenses 1,041 1,114
Accrued commissions 1,624 1,619
Total current liabilities 2,819 3,116
Convertible Notes Payable, net 2,624 5,600
Commitments and Contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
5,000,000 shares authorized, no shares
issued and outstanding - -
Common stock, $0.001 par value, 100,000,000
shares authorized, 25,919,710 and 24,919,710,
shares issued and outstanding, respectively25 25
Additional paid in capital 13,592 12,882
Other comprehensive income (loss) 15 (286)
Accumulated deficit(10,013)(6,900)
Total stockholders' equity 3,619 5,721
Total liabilities and stockholders' equity$9,062$14,437
DigitalFX International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data, unaudited)
Three Months Ended March 31,
2008 2007
Revenues $4,818 $6,396
Cost of revenues 1,000965
Gross profit 3,818 5,431
Commission expenses1,818 2,819
Other operating expenses 2,461 2,508
Operating income (loss) (461) 104
Other income (expense):
Unrealized loss on investment (439)
Loss on modification of debt (1,920) -
Financing costs, net(301) -
Other income, net 9 70
Other income (expense), net (2,651)70
Income (loss) before provision for income taxes (3,112) 174
Provision for income taxes 1118
Net income (loss)$(3,113) $56
Net income (loss) per share:
Basic $(0.12) $0.00
Fully diluted $(0.12) $0.00
Weighted average shares outstanding:
Basic 25,253,043 23,502,446
Fully diluted 25,253,043 24,390,688
SOURCE DigitalFX International, Inc.
