(BSNS WIRE) Digital Lava States Revenue Target and Strategic Growth Mile
Digital Lava States Revenue Target and Strategic Growth Milestones for Fiscal
1999; the Company Sees Current- Year Revenue Growth at Almost Two and a Half
Times Fiscal 1998 Levels
Business Editors & High-Tech Writers
LOS ANGELES--(BUSINESS WIRE)--June 1, 1999--Digital Lava Inc.
(AMEX:DGV) a leader in streaming media applications and video
publishing technology, Tuesday announced that management expects to
achieve almost two and a half times the level of revenue growth for
the fiscal year 1999 vs. the prior year, due to the strong market
response for the company's training, communications and distance
learning software solutions: vPrism(tm), VideoVisor(tm) and its newest
offering VideoVisor(tm) Web.
Digital Lava also stated that -- despite its annual revenue
target -- the company expects its actual second quarter 1999 results
to be much lower than expectations.
Joshua Sharfman, Digital Lava's president and chief executive
officer, said: "Revenue growth in the current quarter has been
constrained largely by the ramping-up of our growing sales force which
reached planned expansion size in May. Going forward, our increased
sales presence should be able to readily capture the strong interest
in our products and solutions.
"And, while we expect to report improved results over time, we
wish to point out that quarterly comparisons tend not to be the best
measure of our true progress given our strategic emphasis on gaining
increased market penetration and building a high-quality user base."
Market Acceptance and Penetration
Digital Lava has continued to receive broad, positive reception
of its software technology in its target markets. To further support
the company's marketing efforts, Digital Lava most recently was
selected to publish promotional CD-ROMs for Training '99 and
MultiMediaCom, two industry-leading conferences.
Digital Lava's desktop video publishing technology will allow
more than 16,000 individuals to easily re-experience and interact with
video from these two popular industry events and is an important forum
to demonstrate the company's leading-edge technology and generate
significant new business prospects.
Digital Lava also plans to participate in several trade shows in
the coming months including The American Society for Training and
Development, Streaming Media-East, MultiMediaCom - Fall, Online
Learning 99 and TechLearn 99.
Sharfman commented on a key element of the company's sales
strategy, saying: "We don't intend to pursue incremental business in
order to meet near-term expectations for the company's growth. Rather,
our management team is focused on optimizing longer return business
with substantial, well-known customers to better build and sustain our
future prospects."
Expanded Sales Effort
Sharfman briefly reviewed the sales cycle for Digital Lava's
products, stating: "Our sales process typically spans between three to
six months and begins with the customer's introduction to our business
solutions. This occurs through a number of ways, such as visiting our
Web site, seeing our products or technical presentations at a trade
show, using a demonstration disk or content gallery on the Web, seeing
a co-branded promotion, attending a seminar or receiving one of our
direct-mail solicitations.
"Building a telephone sales organization, often referred to as
'telesales,' within Digital Lava should enable us to more efficiently
capitalize upon these initial experiences consumers have with our
products and advance the sales prospecting process."
According to Sharfman, for the more likely targets, a
direct-sales professional visits the customer and begins the process
of mapping out the product solutions that are most appropriate for
that particular customer's business.
Sharfman said: "We have built a reputation whereby we are viewed
as consultants and industry experts. Often, we also engage the help of
our own business partners, such as RealNetworks, to provide a total
solution for the client." Such a consultative approach to the selling
process also increases the likelihood of repeat business
opportunities, noted Sharfman.
Sharfman continued: "Our sales force now consists of seven people
and covers seven major regional areas in the U.S. We are quite pleased
to have recruited experienced sales people; however, most of them only
began working for us towards the end of the second quarter -- later
than we initially planned. Hence, we now expect them to start
generating sales in the second half of the year rather than, as
originally expected, during the current quarter."
According to Sharfman: "This delay is a major contributing factor
to the adjustment in the company's revenue expectation. Going forward,
we expect that our ability to build our sales force in the first half
of 1999 will translate into significant sales for the second half of
this year."
Milestones for Future Growth
Digital Lava expects market acceptance to be a true measure of
the company's ability to drive revenue growth for fiscal 1999 and
beyond. To that end, specific milestones to track Digital Lava's
success going forward include the following:
-- Continued, aggressive marketing efforts and programs.
-- Establishment of a nationwide telephone sales group, specifically
assigned by geographic region and market segment.
-- Achievement of a strong foothold in the East Coast market.
-- Launch of new products, feature introductions and business
solutions.
Sharfman added: "At the beginning of 1999 and during the IPO
process, we outlined very specific initiatives that we planned to
undertake with the funds we raised in the offering. One of those was
to invest in building our sales and marketing capabilities, something
we have successfully done over the past several months.
"Having fulfilled these objectives, we now enter the second half
of this year with a substantial sales and marketing presence that
should fuel our revenue growth going forward.
"We encourage our investors to view this next set of milestones
mentioned today as giving you more guidance to help you measure our
company's progress. Ultimately, our management team remains committed
to increasing shareholder value over the longer term by successfully
setting and meeting growth goals that promote market acceptance,
product user growth and strong revenue ramp-up."
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), VideoVisor(tm)
and VideoVisor(tm) Web 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 traded on the American Stock Exchange under the symbol "DGV."
The company's award-winning Web site is www.digitallava.com.
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.
--30--SJK/la* ECQ/la DE/la
CONTACT: Digital Lava Inc., Los Angeles
Danny Gampe, 310/470-1149, ext. 106
or
The Financial Relations Board Inc., 310/442-0599
Karen Taylor (general information)
Moira Conlon/Robert Geiger (investors)
Marjorie Ornston (media)
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED
INTERACTIVE/MULTIMEDIA/INTERNET
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