VEry interesting stock DGV, at 52 week low, has B2B blood
Can anyone tell me why with earnings up 80% over last quarter(although Y2Y not so hot) this stock is apparently so cheap ?
Thursday October 28, 7:07 am Eastern Time
Company Press Release
Digital Lava Reports Third Quarter and Nine Month 1999 Results
Consistent Quarter-To-Quarter Growth For Q1 Through Q3
New Clients Include Cisco, Vantive and Dell Computer
LOS ANGELES--(BUSINESS WIRE)--Oct. 28, 1999--Digital Lava Inc. (AMEX:DGV - news), a leader in providing on-demand communications and
eLearning solutions in the business-to-business sector, today announced results for the third quarter and nine months ended September 30, 1999.
Revenues for the quarter were approximately 80% higher than second quarter revenues, primarily attributable to increased demand for its proprietary software
and publishing services. The company further reported revenues this quarter and on a year-to-date basis declined relative to the prior year results. However,
current year quarter-to-quarter revenue growth has been in a consistently upward trend.
Commenting on the results for the period, Bob Greene, Digital Lava Chief Executive Officer, said: ''Overall, I'm pleased with the progress we have made, as
evidenced by our significant growth this quarter over last quarter. As expected, it reflects the changes we've recently implemented to improve our business
model, marketing approach and operating infrastructure.''
According to the company, this refocus of the business model, driving its new sales approach, will enable Digital Lava to concentrate on developing long-term
relationships with clients to provide ongoing, annuity-like publishing services and business solutions.
In explaining the net change in revenues versus 1998, Greene said that included in revenues for the 1998 third quarter and nine months was a ''one-time'' project
related to the sale of software products to Shell Chemical. ''The Shell deal represented nearly the entire quarter's revenue last year. However, the good news is
that Shell continues to use our publishing services to provide on-demand communications utilizing the software that they purchased last year.''
Greene expressed great satisfaction in the company's diverse, growing roster of clients, including Cisco, Harvard Business School, Seibel and Dell Computer,
all of whom began working with the company during the quarter.
Additionally, the number of repeat clients continues to grow, with strong progress on developing long-term contractual commitments, much of which should
materialize in the fourth quarter and early 2000. Greene confirmed the company still anticipates year-end revenues to be flat relative to the prior year.
Digital Lava commented that in addition to the direct demand the company is experiencing for its products and services, the industry itself is confirming what
Digital Lava forecast: increasing signs that the market for on-demand communications and eLearning is rapidly growing to the estimated market potential of $10
billion.
The company also reported its products continue to win industry awards and receive coverage in publications like Computerworld and InformationWeek as well
as CNNfn.
Greene concluded: ''My focus coming into this company and at the beginning of this past quarter was to get sales and marketing fixed and moving forward. We
have brought in a new Vice President of Marketing and Vice President of Sales and expect significant improvements under their direction. Clearly, we are
committed to building the best products, and strengthening our professional ranks.
''We also hired more key sales people, and expect to add several more by the end of the year. We have started strategic relationships with INTERVU and
Investor Broadcast Network. We believe these are key actions needed to have a solid platform for growth in the new year.''
Financial Results
For the third quarter ended September 30, 1999, revenues were $357,217 versus $755,734 in the third quarter of 1998. The reported net loss was $1,834,133,
or $.40 per basic and diluted share, as compared to a net loss of $481,212, or $3.66 per basic and diluted share, for the same quarter last year.
For the nine months ended September 30, 1999, the company reported revenues of $729,515, compared to revenues of $1,147,632 for the same period a year
earlier. The company reported a net loss of $7,953,553, or $2.31 per basic and diluted share, versus a net loss of $3,261,220, or $24.80 per basic and diluted
share, for the comparable period a year ago.
The loss for the first nine months of 1999 included a one-time extraordinary charge of $3,672,656 related to the repayment of certain indebtedness during the
first quarter following the company's initial public offering. Excluding this one time charge, the net loss would have been $4,280,897, or $1.33 per basic and
diluted share, versus $3,261,220, or $24.80 per basic and diluted share, in the comparable prior year period.
Financial Position
At September 30, 1999, Digital Lava had cash and short-term investments of $6,431,408, shareholders' equity of $7,524,907 and no debt.
About Digital Lava
Founded in 1995, Digital Lava is a business-to-business software solutions company that helps Fortune 1000 clients deliver their critical corporate sales,
marketing communications and training messages to designated audiences. Digital Lava's on-demand communications and eLearning solutions enable clients to
utilize and link their rich mixed media assets with existing formats such as text and graphics.
Clients can then deliver their messages via the Internet, intranet or CD-ROM, providing end users with fully integrated and interactive experiences on their
computer desktops. Digital Lava's customers and partners, include Microsoft, Cisco Systems, INTERVU, RealNetworks, Prudential Insurance, Shell Chemical,
Lotus Development Corporation, Zurich-American Insurance and Ardent Software.
Digital Lava is headquartered in Marina del Rey. For additional information, visit Digital Lava's Web site at www.digitallava.com or call 888/222-LAVA.
Additionally, investors will have the opportunity to listen to Thursday's Digital Lava conference call at 11 a.m. Eastern Time over the Internet through Vcall at
vcall.com. To listen to the live call, go to the Web site at least 15 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
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: development,
shipment and market acceptance. 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 September 30,
1999 1998
Revenue $ 357,217 $ 755,734
Cost of revenue 104,152 152,473
Gross profit 253,065 603,261
Operating expense
Selling, general & administrative 1,754,946 756,614
Research and development 292,856 80,193
Total operating expense 2,047,802 836,807
Loss from operations (1,794,737) (233,546)
Other expense (39,396) (247,666)
Net loss $(1,834,133) $ (481,212)
Basic and diluted net loss per share $ (.40) $ (3.66)
Basic and diluted weighted average
common shares outstanding 4,636,887 131,524
DIGITAL LAVA INC.
SELECTED BALANCE SHEET DATA
(UNAUDITED)
September 30, 1999 June 30, 1999
Cash and equivalents $1,690,847 $639,430
Short-term investments $4,740,561 $7,883,088
Total Current Assets $7,086,003 $8,943,343
Fixed assets, net $516,637 $161,710
Total Assets $8,181,269 $9,559,672
Total Current Liabilities $656,362 $286,364
Total Stockholders'
Equity/(Deficit) $7,524,907 $9,273,308
DIGITAL LAVA INC.
COMPARATIVE INCOME STATEMENT
(UNAUDITED)
Nine Months Ended September 30,
1999 1998
Revenue $729,515 $1,147,632
Cost of revenue 158,479 244,339
Gross profit 571,036 903,293
Operating expense
Selling, general & administrative 4,137,165 2,773,240
Research and development 648,423 334,142
Total operating expense 4,785,588 3,107,382
Loss from operations (4,214,552) (2,204,089)
Other income/(expense) (66,345) (1.057,131)
Loss before extraordinary item (4,280,897) (3,261,220)
Extraordinary loss on
extinguishment of debt (3,672,656) 0
Net Loss $(7,953,553) $(3,261,220)
Net Loss Available to
Common Stockholders $(8,613,566) $(3,261,220)
Basic and diluted net loss
per share $(2.31) $(24.80)
Basic and diluted weighted average
common shares outstanding 3,722,284 131,524 |
