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Digital Lava Details Strategic Growth Plans for Fiscal 1999
The Company Expects Penetration of Target Markets
To Drive Significant Revenue Growth in 1999
LOS ANGELES, April 15 /PRNewswire/ -- Digital Lava Inc. (Amex: DGV), a leader in video publishing technology, today announced the Company's strategic growth plans for the current fiscal year 1999. In 1999, management expects to achieve significant revenue growth due to several factors which include Digital Lava's ability to successfully penetrate its target markets, expanding its client base through a strengthened sales and marketing effort as well as continuing to extend the Company's technology leadership through product innovation.
Target Markets
Digital Lava is targeting the $50 billion business and training software market that is expected to double within 5 years to $100 billion. The Company's objective is to significantly penetrate the training and education market, which is expected to reach over $28 billion by 2002, where it can leverage the growing demand for business, video training, communications and distance learning applications with its video publishing technology. Pursuing business in both U.S. and international markets, the Company is positioned to gain a sizable portion of its current market opportunity due to an aggressive marketing plan targeting Fortune 1000 companies and other middle market sized companies which spend $58 billion for corporate training per year.
Joshua Sharfman, Digital Lava's President and Chief Executive Officer, said, "The use of digitized video is an important factor within today's corporate training market. In that respect, the demand for Digital Lava's software applications will be fueled by trends and technologies that enable computer based and Internet based video training and communications to be used increasingly as substitutes for videotapes, instructor led training, live meetings and other traditional forms of communications and training."
Technology Leader
A leader in video publishing technology, Digital Lava's vPrism software provides a fast and easy way to transform video information into highly interactive multimedia programs in which any video can be linked with digitally formatted files or programs including web pages, documents, images and transcripts. With VideoVisor software, the user is able to view, navigate and manipulate video which is integrated with a variety of other types of information such as text, graphics, animation and digital images. The Company believes that its software is unique and comprehensive, with extensive features that limit near-term competition.
Sharfman said, "A significant benefit of our products is our open software architecture that provides numerous customer advantages including the support of multiple video formats and support of multiple video server solutions. Additionally, we offer many deployment alternatives -- CD, DVD, LAN, Internet and intranet -- as well as the integration of and with multiple software applications that are compatible with the Microsoft COM architecture."
Well-Known Customer Base
Digital Lava's users include large corporations and business enterprises such as Lotus Development Corporation, Shell Chemicals, American General Life Insurance, Ardent Software, ASI Entertainment and Rand Corporation. Schools, universities and research institutions such as University of California Los Angeles, Los Angeles Unified School District, Northwestern University and the Smithsonian Institute are also product users. Digital Lava is targeting long-term business relationships with leading companies in order to provide its customers complete solutions for their corporate training, communications and distance learning needs.
Sharfman noted, "In 1998, repeat business accounted for 25% of our revenues and represented a 600% increase in sales over 1997. Going forward, we expect repeat business to be a growing percentage of revenues."
Digital Lava also has independent software, licensing, development, distribution and reseller relationships with numerous software industry leaders including Microsoft, RealNetworks and FVC.COM. These relationships are expected to increase the brand awareness for the Company and aid in the penetration of target markets.
Outlook for 1999
Digital Lava's technology leadership and product line are key assets expected to drive market penetration and revenue growth. The Company plans to strengthen its marketing sales and customer support efforts as the size of its market opportunity and customer base increases. Initial plans call for building a nationwide sales and marketing presence by significantly increasing the Company's direct sales force in the first half of 1999. Additionally, Digital Lava provides a range of consulting, training and programming services that principally relate to the creation and maintenance of video content and applications based on the Company's technology. Strong demand for such services provide the opportunity to enhance revenue and profit growth.
Financial Position
Digital Lava's Chief Financial Officer, Danny Gampe, said, "The completion of our initial public offering in February 1999 resulted in raising gross proceeds of $18.1 million with net proceeds of $9.9 million to the Company after expenses and debt repayment. We will be utilizing proceeds from the IPO to maintain our leading technology position and to bolster our sales and marketing department to effectively dominate our target markets. Our objective is to capture a larger share of those target markets as we prepare for the full-scale commercial launch of our video publishing software."
About Digital Lava
Digital Lava is a leader in the convergence of software related technologies that organize and allow for the rapid manipulation of video with other data in ways that make possible -- at low cost -- previously difficult or expensive video solutions. The Company's software products and services are used for corporate training, communications and research and other applications. Digital Lava's product line includes vPrism(TM) and VideoVisor(TM) software and allows the user to organize video content, link video to other types of files and publish video on compact disks or "stream" the video information over the Internet or a company's intranet. The Company's award winning VideoVisor software allows users to manage, manipulate and integrate video with other information on their computers, much like word processors manipulate textual data. Digital Lava is a traded on the American Stock Exchange under the symbol "DGV." The Company's award winning Web site is www.digitallava.com.
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