Digital Lava Reports Record First Quarter Revenues -- Surpasses $1 Million Milestone.Business Editors LOS ANGELES--(BUSINESS WIRE)--April 27, 2000 Key Client Gains, International Expansion, Sales Outreach Contribute To Strongest Quarter Ever Digital Lava Inc. (AMEX AMEX See: American Stock Exchange :DGV DGV Doppler Global Velocimetry DGV Direção Geral de Viação ), a leading communications Application Services See ASP and Web services. Provider (ASP) of streaming media See streaming audio, streaming video and digital media hub. solutions for the business-to-business market, today announced record revenues for the first quarter of 2000. Revenue for the first quarter 2000 climbed by 485 percent over the prior year's comparable quarter and 13 percent from the fourth quarter of 1999, to $1.04 million. Results are directly attributed to key strategic expansion initiatives implemented in late 1999. 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. , Digital Lava Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented, "The unprecedented revenues generated in the first quarter of 2000 reflect the success of our recently implemented strategic growth plan and indicate that we are on track to achieve our internal revenue goals for the year. Milestones for this quarter extend beyond just our increased revenue, we also established a substantial revenue backlog, expanded our customer base domestically and internationally, and generated significant repeat business. In addition, we finalized and released the beta version A pre-shipping release of hardware or software that has gone through alpha test. A beta version of software is supposed to be very close to the final product, but, in practice, it is more a way of getting users to test the software in the first place under real conditions. of a new product. And all this was accomplished while maintaining our high gross margins in excess of 70 percent and improving our overall cash management." Greene added, "As a result of the growth of our national sales force in late 1999, we've expanded our customer base, with the addition of several new clients, including Lightspan, Marriott, Novell, PeopleSoft/Vantive, Saga Software and Whirlpool. We've also experienced a high repeat business with key customers such as Cisco, Primedia, KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen , Dell and Siebel." Expanded Market Reach Greene also noted that Digital Lava's expansion into new markets, both geographic and demographic, is another key contributor to growth for this quarter. Greene highlighted the Company's expansion beyond U.S. borders, with the recent signing of key international contracts. These licensing agreements for vPublisher, Digital Lava's proprietary publishing tool, will enable knowledge workers in Japan, Korea and Australia to experience the power of Digital Lava solutions. Domestically, vPublisher contributed to revenue growth as the result of a targeted sales campaign Noun 1. sales campaign - an advertising campaign intended to promote sales ad blitz, ad campaign, advertising campaign - an organized program of advertisements sales campaign n → campaña de venta and is expected to continue to add revenue as the year progresses. Greene enthusiastically commented upon the launch of 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. (TM) for Microsoft(R) PowerPoint and HotFoot Host(TM), innovative new products that enable users to combine voice and graphics into an interactive and on-demand presentation using Microsoft Windows See Windows. (operating system) Microsoft Windows - Microsoft's proprietary window system and user interface software released in 1985 to run on top of MS-DOS. Widely criticised for being too slow (hence "Windoze", "Microsloth Windows") on the machines available then. Media(TM) Technologies. "HotFoot was designed to meet a real need in the marketplace -- the ability to create streaming media technology right on the desktop. As a PowerPoint add-in, we expect this user-friendly product to assist the millions of existing PowerPoint users in creating interactive streaming media presentations." Greene added, "HotFoot will bring streaming media publishing to the desktops of corporate America and provides us with a platform for selling up to our more robust products and services." HotFoot is being marketed through an aggressive public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most outreach and national print advertising campaign. Growth and Outlook Greene also commented on the Company's capital position, "We are currently evaluating term sheets presented to us from various investment banks The following is a list of investment banks Financial conglomerates Large financial-services conglomerates combine commercial banking and investment banking, and sometimes insurance. and expect to select an option by mid May, and close a transaction in the third quarter." This increased funding will be used to fuel the anticipated growth of the Company with significant investment in building market awareness and extending both the corporate and product brands, as well as investing in product development to ensure the continuation of Digital Lava's role as product innovators. Regarding growth targets, Greene stated, "Based upon signed contracts in Q1 and additional activity to date, we are targeting revenue in 2000 of four times that of fiscal 1999. We continue to feel strongly that we will begin to see profitability in Q1 of 2001." Financial Results For the first quarter ended March 31, 2000, revenues were $1,035,444 versus $176,879 in the first quarter of 1999. The reported net loss was $1,542,697, or $.33 per basic and diluted share, as compared to a net loss of $4,909,191, or $2.92 per basic and diluted share, for the same quarter last year. The loss for the prior year included a one-time extraordinary charge of $3,672,656 related to the repayment of certain indebtedness during the first quarter of 1999 following the Company's initial public offering. Financial Position At March 31, 2000, Digital Lava had cash and short-term investments of $2,593,096, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $4,116,922 and no debt. About Digital Lava Digital Lava is a communications Application Services Provider (ASP) with robust support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services that utilizes streaming media. Our business-to-business technology offers solutions to Fortune 1000 companies for use in 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. , sales, marketing and training applications ensuring that the context and the integrity of the content endures. Digital Lava's solutions are rich mixed media software applications that seamlessly link digital video and audio content with a variety of other formats such as text, graphics, animation and web links. These solutions provide end-users with a fully integrated and interactive experience on their computer desktops delivered via the Internet, intranet, extranet, DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. , CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). or any combination. Digital Lava's partners and clients include Microsoft, InterVu, RealNetworks, 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. , Dell Computers, Hewlett Packard, Novell, KPMG, Prudential Insurance, Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. , and Shell Chemical. Digital Lava is headquartered in Marina del Rey, California Marina del Rey (Spanish for "Navy of the King", or "Seacoast of the King") is a census-designated place seaside community located in an unincorporated area of Los Angeles County, California, United States. The population was 8,176 as of the 2000 census. . For additional information, visit Digital Lava's Web site at http://www.digitallava.com or call 1-888-222-LAVA. Additionally, investors will have the opportunity to listen to today's Digital Lava conference call over the Internet through Vcall at http://www.vcall.com. To listen to the live call, go to the website at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. 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 the Company. Actual results may differ from those projected or implied by such forward-looking statements depending on a number of risks and uncertainties, including, but not limited to the following: our ability to develop and ship new products on a timely basis, market acceptance of our products, demand for streaming products generally, and our ability to maintain our existing customer base and obtain new customers. Other risks inherent in the business of the Company are described in Securities and Exchange Commission filings, including the Company prospectus on Form SB-2. The Company 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.
Comparative Income Statement
(UNAUDITED)
Three Months Ended March 31,
2000 1999
Revenue $ 1,035,444 $ 176,879
Cost of revenue 237,158 40,470
Gross profit 798,286 136,409
Operating expense
Selling, general & administrative 2,071,196 1,061,047
Research and development 303,128 134,463
Total operating expense 2,374,324 1,195,510
Loss from operations (1,576,038) (1,059,101)
Other income/(expense) 33,341 (177,434)
Loss before extraordinary item (1,542,697) (1,236,535)
Extraordinary loss on
extinguishment of debt -- (3,672,656)
Net loss ($1,542,697) ($4,909,191)
Net loss available to
common stockholders ($1,542,697) ($5,569,204)
Basic and diluted net loss per share ($ 0.33) ($ 2.92)
Basic and diluted weighted average
common shares outstanding 4,643,213 1,904,783
DIGITAL LAVA INC.
Selected Balance Sheet Data
(UNAUDITED)
March 31, December 31,
2000 1999
Cash and equivalents $1,604,804 $ 708,031
Short-term investments $ 988,292 $2,956,287
Total Current Assets $3,655,506 $4,981,803
Fixed assets, net $1,252,096 $1,204,578
Total Assets $5,615,727 $6,910,298
Total Current Liabilities $1,316,247 $1,442,394
Total Stockholders' Equity $4,116,922 $5,301,522
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