Date: Thu, 18 Dec 1997 22:49:17 GMT Server: Apache/1.2.4 Last-Modified: Wed, 01 Oct 1997 18:39:26 GMT ETag: "42c9-233a-343298de" Content-Length: 9018 Accept-Ranges: bytes Connection: close Content-Type: text/html DG SYSTEMS REPORTS 93% REVENUE GAIN FOR FIRST QUARTER 1996


For more information:
Robert Schettino
bobtino@thomaspr.com
Susan Ice
susani@thomaspr.com
Thomas Associates 415-596-2700

Jeff Byrne
Jbyrne@dgsystems.com
Tom Shanahan
tsha1@dgsystems.com
DG Systems 415-276-6600


DG SYSTEMS REPORTS 93% REVENUE GAIN FOR FIRST QUARTER 1996

Strong advertiser demand and rapidly expanding distribution network continue to drive growth

   SAN FRANCISCO, CALIFORNIA - April 17, 1996 -Digital Generation Systems,Inc. (NASDAQ: DGIT), a leading provider of electronic distribution services to the broadcast industry, today reported first quarter 1996 revenue of $1.9 million, a gain of 93% over the first quarter of 1995.

   Earnings before interest, taxes, depreciation and amortization (EBITDA) improved from a loss of $1,594,000 in the first quarter of 1995 to a loss of $1,486,000 in the most recent quarter. EBITDA measures the company's cash flow results, excluding the costs of deploying its audio distribution equipment at production studios and broadcast stations. The company also reported a net loss per share of $0.20 in the quarter, compared with a net loss of $0.23 per share in the prior year.

   "We are pleased at the significant increase in our volume of audio deliveries," said Henry Donaldson, DG Systems president and CEO. "Our revenue growth reflects a sharply growing demand among our advertiser, agency, and record company clients for digital delivery of their content to broadcasters."

   Unit deliveries of audio commercials and first-release music singles rose to 149,000 in the first quarter, more than doubling the 72,000 deliveries achieved in the quarter a year ago.

   The company also expanded its online network of radio stations to over 4,400, representing a 100% increase in the past twelve months.

   DG Systems also recently announced its entry into the video distribution business, including the debut of its ADvantage Digital Video Playback System (DVPS) at this week's National Association of Broadcasters show in Las Vegas. The company to date has secured commitments from more than 50 television stations to use the DVPS to receive video spots.

   Founded in 1991, Digital Generation Systems is a leading provider of electronic distribution services to the broadcast industry, linking hundreds of advertisers, agencies, music companies, and syndicators with nearly 4,500 radio stations in the United States. The company offers a family of services for quick and reliable delivery of CD-quality advertisements, new music singles, and short-form programming to radio stations, along with associated traffic instructions and supporting promotional material. DG Systems is headquartered in San Francisco, with field offices in New York, Chicago, Los Angeles, and Atlanta. DG Systems can be reached at 415-276-6600 or www.dgsystems.com on the World Wide Web.



DIGITAL GENERATION SYSTEMS, INC.
Corporate Information March 31, 1996
Description of Business: Digital electronic distribution services to the broadcast industry linking advertisers, agencies,
music companies and syndicators to over 4,400 radio stations.
Corporate Address: 875 Battery St. San Francisco, CA 94111
Telephone/Fax: Phone: 415/276-6600 Fax: 415/276-6601
Trading Information: NASDAQ - DGIT 11,461, 499 shares outstanding 1996 Price Range: $8 1/8 - $12 1/4
Current Price (4/16) $8 1/2
Officers: President & CEO: Henry W. Donaldson
V.P. Finance & CFO: Thomas P. Shanahan



Three Months Ended March 31
Income Summary (in thousands, except for share and other data)
  1995  1996Change
Revenues $ 983 $189493%
Delivery Costs $ 312 $ 571
Customer Operations $ 707 $ 944
Sales & Marketing  $ 789 $ 983
Research & Development  $ 413 $ 498
General & Administrative  $ 356  $ 384
EBITDA ($ 1,594) ($ 1,486)  7%
Depreciation  $ 443  $ 838
Interest Income  $ 97  $ 263
Interest Expense ($ 173) ($ 327)
Net Loss ($ 2,113)($ 2,388)-13%
Earnings per share ($ 0.23)($ 0.20)
Weighted Average Shares 9,125 11,675
Financial Position
Cash & Equivalents $ 7,653$ 33,593
Total Assets $12,647$ 42,707
Other Data
Total Deliveries 72,000 149,000107%
On-Line Stations 2,200 4,400 100%



| WHAT'S NEW | CORPORATE INFO | PRODUCTS & SERVICES | INVESTOR RELATIONS | EMPLOYMENT OPPORTUNITIES | HOME |


Digital Generation Systems, Inc.
875 Battery Street, San Francisco, California 94111

Telephone 415.276.6600 / 800.335.4DGS
Facsimile 415.276.6601

Copyright © 1997 Digital Generation Systems and Foggy August All rights reserved.
All products or services in this document are the marks, registered trademarks or registered service marks of their respective owners.