Dynamic Response Group, Inc. Announces Fourth Quarter and Full-Year 2007 Results
Company Generates Record Revenue of $20.1 Million in 2007
Forecasts Revenue of at Least $40 Million in 2008
Miami, FL — March 31, 2008 — Dynamic Response Group, Inc. ("DRG") (OTCBB: DRGP), a leading innovator of strategic marketing solutions, today announced financial results for the fourth quarter and full-year ended December 31, 2007.
Full-Year 2007 Highlights (Compared to the prior year)
- Gross revenues were $20.1 million, an increase of 65% or $7.9 million
- Gross profit was $12.7 million, an increase of 67% or $5.1 million
- Operating loss for the year was $0.9 million, an improvement of $1.1 million compared to an operating loss of $2.0 million in 2006
- Net loss for the year was $2.9 million, or $(0.04) per share, mostly as a result of increased operating expenses related to inventory for new products and stock-based compensation charges. This compares to net loss of $2.1 million or $(0.04) per share in 2006
- The Company was cash flow positive in 2007, to the tune of approximately $208,000. This compares to a net cash deficit of approximately $360,000 in 2006
Fourth Quarter Highlights (Compared to the prior year period)
- Gross revenues were $7.4 million, an increase of 56% compared to $4.7 million
- Net revenues were $6.3 million, an increase of 132% compared to $2.7 million
- Gross profit was $4.8 million, an increase of 196% compared to $1.6 million
- Operating loss for the quarter was $0.5 million, an improvement of approximately $0.4 million or 45% compared to $0.9 million in 2006
- Net loss for the quarter was $1.0 million in-line with $0.9 million in 2006
"I am very pleased with our financial results for the quarter and full-year, and the tremendous progress we have made as a newly public Company," said Melissa K. Rice, Chief Executive Officer. "We succeeded in driving significant revenue growth this year, in addition to making important operational improvements. Our strong performance in 2007 was driven by escalating demand for our suite of products, particularly Riddex, Procede and the Legends of Soul DVD, combined with the expansion of our distribution channels. In the last couple of quarters we also applied our expertise to our NASCAR Members Club business and focused on optimizing our affinity marketing model, which we believe leverages many of our existing strengths and has great potential as a complementary business segment to drive future revenue growth."
2008 Outlook
Based on current visibility, the Company expects to generate revenue of at least $40 million in 2008. This is a conservative estimate and does not reflect the Company's expectation for revenue generated from new products rolled out during the year.
Rice continued, "As a young public Company focused on building a strong growth platform for the future, we needed to make a number of investments in the business to accommodate our expectations and sustain our momentum. We added a number of very successful products, which resulted in increased inventory expense, while also focusing on maximizing revenue potential of our existing offerings. We were also successful in narrowing our operating loss for the fourth quarter and full-year, reflecting the success of many of our strategic initiatives. Based on my expectations for future growth, I am confident that we will reach profitability in the next year."
Conference Call
The Company will host a conference call on March 31, 2008 at 12:00 P.M. (Eastern Time) to discuss fourth quarter and full-year 2007 financial results.
The conference call will be available via the Internet in the Investor Relations section of the Company's Web site at http://www.dynamicresponsegroup.com. If you are not able to access the live Web cast, dial in information is as follows:
Toll-Free Telephone Number: (877) 549 - 0913
International Telephone Number: (706) 902 - 0002
Pass code: 39967636
Participants should call at least 10 minutes prior to the start of the call.
About Dynamic Response Group, Inc:
Dynamic Response Group, Inc. ("DRG") is a leading innovator of strategic marketing solutions. The Company leverages its vast knowledge of its customers to create, develop and market innovative products and services that build brand awareness and drive sales across large national and international consumer audiences. The foundation of the Company is its direct response TV (DRTV) and Internet advertising business, which has produced many highly effective products including: ProCede(TM), a hair thickening system for men; Riddex, a pest control product; "Backyard Drills with Bill Parcells," a DVD series for fathers and sons; and "The Legends of Soul," a DVD series of current day concerts of classic soul artists. The Company has also signed an exclusive three year deal to market The Official NASCAR Members Club to the over 75 million estimated NASCAR fans in the US.
Forward-Looking Statements
Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The above information does not guarantee any successful closing of new business. No assurances can be given that any projections related to gross revenues or profit margins will be realized. Forward-looking statements involve known and unknown risks and uncertainties that may cause the company's actual results in future periods to differ materially from forecasted results. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks.
DYNAMIC RESPONSE GROUP, INC
(f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
| Full Year Ended | |||
| December 31, 2007 | December 31, 2006 | ||
| Gross revenues | $ 20,126,837 | $ 12,230,121 | |
| Sales returns and allowances | (4,944,036) | (3,056,953) | |
| Net revenues | 15,182,801 | 9,173,168 | |
| Cost of revenues | 2,527,807 | 1,612,366 | |
| Gross profit | 12,654,994 | 7,560,802 | |
| Operating expenses: | |||
| Selling expenses | 9,813,434 | 7,212,852 | |
| General and administrative | 3,594,543 | 1,635,486 | |
| Consulting fees | 113,690 | 621,519 | |
| Depreciation | 5,514 | 11,830 | |
| Taxes | 28,898 | 73,083 | |
| Total operating expenses | 13,556,080 | 9,554,770 | |
| Operating loss | (901,086) | (1,993,968) | |
| Other income (expense): | |||
| Other income | 35,337 | 8,941 | |
| Interest expense | (345,415) | (164,051) | |
| Consulting fees paid in stock in lieu of cash | (1,753,020) | - | |
| Total other income (expense) | (2,063,098) | (155,110) | |
| Net loss | $ (2,964,184) | $ (2,149,078) | |
| Weighted Common Shares Outstanding | |||
| Basic and diluted | 76,918,737 | 60,834,652 | |
| Net loss per common share | $ (0.04) | $ (0.04) | |
DYNAMIC RESPONSE GROUP, INC
(f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended | |||
| December 31, 2007 | December 31, 2006 | ||
| Gross revenues | $ 7,411,152 | $ 4,745,020 | |
| Sales returns and allowances | (1,105,661) | (2,023,500) | |
| Net revenues | 6,305,491 | 2,721,520 | |
| Cost of revenues | 1,528,341 | 1,110,191 | |
| Gross profit | 4,777,150 | 1,611,329 | |
| Operating expenses: | |||
| Selling, general and administrative | 5,248,501 | 2,469,959 | |
| Total operating expenses | 5,248,501 | 2,469,959 | |
| Operating loss | (471,351) | (858,630) | |
| Other income (expense): | |||
| Other income | 15,175 | 4,688 | |
| Interest expense | (106,022) | (3,667) | |
| Consulting fees paid in stock in lieu of cash | (438,255) | - | |
| Total other income (expense) | (529,102) | (1,021) | |
| Net loss | (1,000,453) | (857,609) | |
Burson-Marsteller
Christina Corcoran, 212-614-4203
investors@dynamicresponsegroup.com