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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 11, 1998
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DIGITAL GENERATION SYSTEMS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
California 000-27644 94-3140772
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
875 Battery Street, San Francisco, California 94111
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (415) 276-6600
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Same
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(Former name or Former Address, if Changed Since Last Report.)
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ITEM 5. OTHER EVENTS
The information which is set forth in the Registrant's News Release dated
December 11, 1998 is incorporated by reference.
ITEM 7. EXHIBITS
(c) EXHIBITS:
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Exhibit
Number
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99.1 Text of Press Release dated December 11, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DIGITAL GENERATION SYSTEMS, INC.
Date: December 24, 1998 By: /s/ PAUL W. EMERY, II
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Paul W. Emery, II
Vice President and Chief Financial Officer
(Principal Financial and Chief Accounting
Officer)
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EXHIBIT INDEX
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Sequentially
Exhibit Numbered
Number Description Page
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99.1 Text of Press Release dated December 11, 1998 1
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EXHIBIT 99.1
DG SYSTEMS NAMES SCOTT K. GINSBURG
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Former Chancellor Media CEO Invests $11 Million in Company
San Francisco, CA - December 11, 1998 - DG Systems, Inc. (NASDAQ: DGIT) a
leading provider of digital network services to the broadcast industry, today
announced that effective December 11, 1998, Scott K. Ginsburg, 46, will join the
Company as Chairman of the Board and Chief Executive Officer. Mr. Ginsburg was
formerly Chief Executive Officer and President of Chancellor Media Corporation
(NASDAQ: AMFM), the nation's largest radio broadcasting company. The Company's
current Chairman, Richard Harris, will serve as Vice Chairman of the Board. DG
Systems' current President and Chief Executive Officer, Henry Donaldson, will
continue as President and Director, and will assume the new responsibility of
Chief Operating Officer.
As Chairman and C.E.O. Mr. Ginsburg will be responsible for the strategic
direction of the Company, the development and implementation of its
consolidation strategy and developing and maintaining financial community
relationships.
In conjunction with the appointment of Mr. Ginsburg, DG Systems announced that
it has completed an $11 million private placement led by Mr. Ginsburg, along
with existing investors of the Company, including Dawson-Samberg Capital
Management, Integral Capital Partners, Technology Crossover Ventures and
Bluewater Capital Management. Mr. Ginsburg's $8 million investment brings his
total invested capital (reflecting an earlier private placement and open market
purchases) to $11 million. Under the terms of the transaction, Mr. Ginsburg has
also been granted warrants for additional equity interests that are exercisable
upon attainment of certain share price thresholds.
Proceeds from this private placement will fund additional sales and marketing
efforts to further DG's penetration of the video industry and to continue to
expand its radio delivery distribution network. DG's growth strategy is to
leverage its leadership role in audio into the rapidly growing video spot
distribution market, while developing leading software applications to
complement its current suite of services. DG is positioning itself to provide
application solutions to meet the variety of present and future transaction and
communications needs of the interconnected media, advertising and broadcasting
industries.
Scott Ginsburg stated, "As a former broadcast industry executive, I recognize
the value of digital transaction services which DG Systems provides to its
advertising and broadcast customers. These services are becoming the links which
couple the advertising and broadcast industries together, facilitating the flow
of information and transactions which comprise the $50 billion broadcast
advertising business.
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"I invested in DG Systems and joined the Company as its Chairman and Chief
Executive because I believe that DG provides a platform upon which we can build
an industry-standard electronic transaction network. There are over 10 million
transactions annually for the distribution of national and regional broadcast
spot advertising, another 10 million for local spot advertising, and untold
additional transactions to support the processes of placing media buys, tracking
results and billing and collecting for services provided. Through the Internet,
as well as DG Systems' satellite and terrestrial network facilities, we will
provide a wide array of value-added services to process this enormous flow of
transactions."
Since its IPO in 1996, DG has become the leading provider of electronic delivery
of radio advertising and is actively expanding into the television advertising
sector. Excluding the acquisition of DCI, over the past three years the Company
has grown its digital audio advertising distribution volumes to an annualized
rate of 1.1 million deliveries, an increase of 188% from fiscal year end 1995.
The company's digital video distribution volumes have grown 202% on an
annualized basis in just one year. Following its expansion of the video
operations, DG will continue its growth by expanding its presence in the media
and advertising industries through additional network-based transactional and
other services.
Henry Donaldson, commenting on Mr. Ginsburg's appointment, said "Scott Ginsburg
brings to DG Systems a wealth of relevant broadcasting industry knowledge,
experience and relationships. His success in strategically and economically
consolidating the radio industry is well-known, and we welcome him both as a
major investor and more importantly, as a key member of our management team and
on-going contributor on our Board."
Richard H. Harris concluded, "Having known Scott from the radio industry for
many years, I am confident that he and Hank represent a formidable team capable
of developing the full potential of DG Systems."
DG Systems operates a nationwide, value-added digital network which links
hundreds of advertisers and advertising agencies with more than 7,500 radio
stations and 600 television stations across the United States and Canada. The
company's fault-tolerant network operations center delivers audio, video, image
and data content which facilitates transactions among advertising industry
participants. DG Systems can be reached at 415-276-6600 or at www.dgsystems.com.
This release contains forward-looking statement relating to the company,
including the expansion of its digital distribution networks, and the demand
among certain clients for digital audio video delivery services. These
forward-looking statements involve risks and uncertainties, which could cause
actual results to differ materially from those projected. These and other risks
relating to DG System's business are set forth in the company's Form 10-K filed
with the Securities and Exchange Commission on March 31, 1998.
FOR MORE INFORMATION:
Paul Emery
[email protected]
DG Systems 415/276-6600
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