Digital Lava Announces First Quarter 2001 Results; Financial and Sales Controls Tightened; Renewed Focus on Core Productivity Software & Services.Business Editors MARINA Marina “a piece of virtue.” [Br. Lit.: Pericles] See : Virtuousness DEL REY Del Rey may refer to:
Digital Lava Inc. (Nasdaq:DGLV), today announced financial results for the first quarter ended March 31, 2001. For the first quarter, revenues were $819,988, compared with $1.0 million for the three months ended March 31, 2000. The net loss for the first quarter was $2.5 million, or $0.35 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a net loss of $1.5 million, or $0.33 per basic and diluted share for the same period during 2000. Digital Lava attributed the decrease in quarterly comparative revenue to the recent economic softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. and the effects of the first quarter special investigation. The increase in net loss was due primarily to higher first quarter professional fees, increased staffing costs and a $117,000 reduction in the market value of the remaining FireStream Encoding See encode. Station product inventory. "Digital Lava has streamlined operations and reduced costs to meet the challenges we experienced during the first quarter," said Bob Greene This article is about the modern journalist and author. For the personal trainer and fitness expert, see Bob Greene (fitness guru). For other persons named Robert Greene, see Robert Greene (disambiguation). Robert Bernard Greene, Jr. , chairman and chief executive officer of Digital Lava. "The quarter brought challenge and change. "We managed through the marketplace downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and a lengthy special investigation of FireStream product sales, yet we also gained new customers, generated co-marketing Co-marketing is a marketing practice where two companies cooperate with separate distribution channels, sometimes including profit sharing. It is frequently confused with Co-promotion See also Marketing co-operation partnerships, developed innovative product extensions and refocused our business priorities. Revenues reflect tightened financial and sales controls. Additionally, the company expects to recognize $522,010 in deferred revenues over succeeding quarters." Greene further commented, "We have renewed our focus on selling our core productivity software and services to corporations as FireStream did not deliver on expectations, which cost valuable time and resources. The recent releases, Digital Lava View(R), which provides enhanced online communications, and the HotFoot hot·foot intr.v. hot·foot·ed, hot·foot·ing, hot·foots Informal To go in haste. Often used with it: hotfoot it out of town. adv. In haste. n. pl. Host(TM) extensions for use inside corporate firewalls reinforce this focus. "To increase higher margin software sales, we changed our pricing to attract larger transactions and decrease lower margin business," continued Greene. "We are also beginning to expand strategic relationships, forming integrating, marketing and branding opportunities. "Notably, during the quarter we entered into a co-marketing relationship with GE Capital IT Solutions, that promises to provide near and long term benefits to Digital Lava. We also announced a strategic relationship with Network Appliance (1) A specialized device for use on a network. For example, Web servers, cache servers and file servers can be implemented as general-purpose computers with the appropriate software or as network appliances, which are computers dedicated to a single function and cannot do anything to enable corporations to create and deliver on-demand rich-media business communications coupled with their network caching caching - cache solution." In January 2001, the company entered into a resellers agreement with NOA NOA Nintendo Of America NOA Notice of Award NOA Notice Of Availability NOA Noroeste Argentino (Spanish: Argentine North West Region) NOA Notice of Action NOA Notice of Acceptance Technology Inc., a Korean-based Internet-hosting and Web development firm, to incorporate Digital Lava's proprietary technology into its offering of streaming media See streaming audio, streaming video and digital media hub. and multimedia communications products and services to Korean companies. NOA Technology is reselling Digital Lava(R) Publisher (formerly vPublisher(TM)) and the HotFoot suite of products. First Quarter Results Total cost of revenues for the first quarter of 2001 was $534,787, or 65.2 percent of revenue, compared with first quarter 2000 cost of revenues of $477,010, or 46.1 percent of revenues. The increase in first quarter cost of revenues was primarily due to an $117,000 write down of FireStream Encoding Station inventory to its estimated current market value. The company's selling, general and administrative expenses were $2.4 million in the first quarter of 2001, compared with $1.8 million in the first quarter of 2000, due to increased staffing costs and to higher professional fees associated with the special investigation. At March 31, 2001, Digital Lava had total assets of $5.5 million, which included cash and cash equivalents of $1.1 million, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $1.5 million, and liabilities of $2.0 million and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $3.5 million. Management believes that existing working capital will be sufficient to meet the company's 2001 operating plan, which assumes that the company will achieve certain levels of revenues, gross profit and operating costs operating costs npl → gastos mpl operacionales and expenses. However, if events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occur such that the company is not able to meet its operating plan as expected, the company may be required to seek additional capital and/or to reduce certain discretionary spending, which could adversely effect the company's ability to achieve its intended business objectives. The company continues to seek additional financing and/or strategic investment opportunities. Software Extensions Introduced Digital Lava recently expanded its product portfolio with extensions to existing software that were introduced during the second quarter. "We continue to respond to our corporate customers by developing and delivering advanced software and services," said Greene. "With the recent changes to the economy, we believe that our products and services are even better suited to the marketplace." Digital Lava View, an enhanced version of the company's award-winning, on-demand format for delivering rich media business communication, was introduced in April 2001, and is rapidly gaining customer acceptance. This format incorporates traditional features with new user control features that enhance the viewing experience and maximize the overall impact of the communication. Yesterday, Digital Lava announced the introduction of HotFoot Host(TM) Enterprise and HotFoot Host(TM) Software Development Kit (SDK (Software Developer's Kit) See developer's toolkit and Windows SDK. SDK - Software Developers Kit (or "Software Development Kit"). ). These two new product offerings allow clients to store, manage and deliver HotFoot(TM) for PowerPoint(R) presentations behind their corporate firewall, further facilitating the use of HotFoot for PowerPoint as a standard for business communication. Business Outlook Commenting on Digital Lava's expected 2001 financial results, Greene said, "We are capitalizing on the strength in our core publishing services business and increasing licensing agreements for our rich media publishing software. With these efforts, we expect to return to producing sequential quarterly revenue increases. Due to the marketplace changes, our long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. goal is to achieve positive cash flow in early 2002." Conference Call/Web Cast Digital Lava will host a conference call with a simultaneous Web cast at 11 a.m. Eastern/8 a.m. Pacific, today. Featuring Chief Executive Officer Bob Greene and Chief Financial Officer Bennet bennet excludes the devil; used on door frames. [Medieval Folklore: Boland, 56] See : Protection Lientz, Jr., the conference call will be available live via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by accessing the company's Web site at www.digitallava.com. To listen to the live call, go to Digital Lava's Web site at least 15 minutes prior to the presentation to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot listen to the live broadcast, an online replay will be available for 90 days on www.digitallava.com, or a phone replay will be available through May 22, 2001 by calling 888/266-2086 (or 703/925-2435 for international callers) and entering the passcode No. 5223738. About Digital Lava Digital Lava (Nasdaq:DGLV) provides rich media software and services that enable Fortune 1000 companies to create, manage and deliver on-demand business communications. The company's rich media technology improves the overall impact of sales, marketing, corporate communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. and training applications by seamlessly integrating video and audio content with text, graphics, animations and Web links. Digital Lava's partners and clients include Activate (1) See trigger. (2) To interact with an activation server at the time copy-protected software is installed. The install program generates a code that is sent to the activation server, which responds with an authorization code that allows the software to operate. , Akamai, Alcatel, JPMorgan Chase JPMorgan Chase (NYSE: JPM TYO: 8634 ) is one of the oldest financial services firms in the world. The company, headquartered in New York City, is one of the leaders in investment banking, financial services, asset and wealth management and private equity. With assets of $1. , Dell Computers, Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , CompuCom, GE Capital, Microsoft, Network Appliance, Network Associates, Prudential Prudential is the name of two different companies and buildings named after them: Companies:
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements concerning the business and products of Digital Lava, including statements regarding the company's expected future business and financial performance, competitive position, capital raising ability and product sales. Actual results could differ materially from those projected or implied by such forward-looking statements due to various factors. Such factors include unpredictability of future revenues and expenses, pricing changes, continued demand by significant customers, market acceptance of Digital Lava's products, development and shipment of products, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those described in Digital Lava's filings with the Securities and Exchange Commission. Digital Lava undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
DIGITAL LAVA INC.
BALANCE SHEET
(Unaudited)
March 31, Dec. 31,
2001 2000
Assets
Current Assets:
Cash and cash equivalents $ 1,074,483 $ 1,309,084
Short-term investments 1,469,221 4,215,469
Accounts receivable, less allowance
for doubtful accounts of $114,035 889,226 1,257,673
Inventory 117,000 240,000
Other current assets 232,143 251,789
Total current assets 3,782,073 7,274,015
Fixed assets, net 1,203,453 1,290,284
Restricted cash 496,455 496,455
Other assets 37,994 37,994
$ 5,519,975 $ 9,098,748
Liabilities And Stockholders' Equity
Current liabilities:
Accounts payable $ 375,803 $ 874,272
Current portion of capital lease 100,715 97,437
Accrued expenses and other current
liabilities 665,536 1,187,281
Deferred rent 295,338 303,668
Deferred revenue 522,010 560,912
Total current liabilities 1,959,402 3,023,570
Long term portion of capital lease 81,843 108,285
2,041,245 3,131,855
Stockholders' equity:
Preferred stock -- $0.0001 par value;
5,000,000 shares authorized; none
outstanding at March 31, 2001 and
Dec. 31, 2000 -- --
Common stock, $0.0001 par value;
35,000,000 shares authorized; and
7,199,319 shares issued and outstanding
at March 31, 2001 and Dec. 31, 2000,
respectively 719 719
Additional paid-in capital 35,802,332 35,802,332
Accumulated deficit (32,324,321) (29,833,315)
Accumulated other comprehensive loss -- (2,843)
Total stockholders' equity 3,478,730 5,966,893
$ 5,519,975 $ 9,098,748
DIGITAL LAVA INC.
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2001 2000
Revenues:
Services $ 773,816 $ 625,361
Software licenses 28,222 410,083
Product sales 17,950 --
Total revenues 819,988 1,035,444
Cost of revenues:
Cost of services 406,823 473,577
Cost of software licenses 4,964 3,433
Cost of product sales 123,000 --
Total cost of revenues 534,787 477,010
Gross profit 285,201 558,434
Operating expenses:
Selling, general and administrative 2,350,273 1,831,343
Research and development 406,248 303,128
Total operating expenses 2,756,521 2,134,471
Loss from operations (2,471,320) (1,576,037)
Other income (expense), net (19,686) 33,341
Net loss $ (2,491,006) $(1,542,696)
Basic and diluted net loss per share ($0.35) ($0.33)
Weighted average common shares used
in basic and diluted loss per share 7,199,319 4,643,213
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