MEMPHIS, Tenn., Feb. 1, 2005 (PRIMEZONE) -- Limelight Media Group, Inc. (OTCBB:LMMG), a provider of out-of-home digital and promotional networks located in Memphis, TN, has executed a letter of intent to acquire OTR Media (OTR). The acquisition will offer expanded marketing opportunities for Limelight in the over-the-road mobile billboards, fleet marketing and fleet management and an ancillary offering to the grocery industry.
Currently, the OTR Media controls contracts to place mobile billboard advertising on 1,000 semi-trailers. Each trailer represents a potential of $600 per month in advertising revenue. The Company plans to expand the over the road initiative to include city based marketing. Washington DC, New York City and Los Angeles will be the initial focus for city based marketing programs. Fleet marketing, which includes the trailer fleets of the grocers using the Limelight digital system, will be a new focus as it allows advertisers to expand their brand reach outside the stores to the store's trucking fleet. The Company anticipates revenue recognition in this sector nearing $700,000 during 2005 and $5 million in 2006 as the infrastructure is developed to create sales.
To enhance its product offering, OTR Media developed a proprietary solar powered GPS tracking system that is mounted on the trailers. Initially, the development of the technology allowed better tracking of the advertising billboards. Under current Homeland Security initiatives, the Company believes that a much larger market is available for the real-time tracking of goods and shipments. Each GPS unit retails for in excess of $1,000, however, purchasers of the system can subscribe to a monthly monitoring service from the Company which will provide a reoccurring revenue stream to the Company. Additional information regarding OTR Media and its GPS tracking system can be found at www.otrmedia.com.
OTR Media also initiated a community service program called "Rigs for Kids". The program placed billboards on the over the road semi-trailers highlighting missing children. Over 100 trailers were equipped in 2003 with the signage representing 11 missing children. As a function of the program, 4 children were located. The program has received national attention and will be expanded to encompass other beneficial programs both in cities and over the road. The program will seek to display information for 6 children over the next 3 months. Information regarding "Rigs for Kids" can be found at www.rigsforkids.org.
The Out-of Home Media industry represents over $7 billion in advertising revenue per year and has experienced a predictable growth exceeding 8% per year. Over the last 20 years, the industry experienced only one down year in 1992. Fixed expenses are growing only at 3%-4% per year, which allows for increasing bottom line revenue recognition. Profit margins are nearing 60% with an expected growth rate of 12%-14% and an after tax revenue growth of 15%-18% per year. Considering that the number of vehicles on the road has doubled over the past 20 years, this media option is attractive to advertisers, for it is a low cost alternative for the number of impressions reached. With the fragmentation of audiences in traditional television media, the industry is expected to continue on its profitable growth cycle.
"The Company is looking at opportunities to leverage its assets to expand with a minimum of equity. We are also aggressively looking at methods to diversify and expand operations with a core focus on digital signage. The acquisition of OTR Media is a great step for us to expand the reach of our current advertising base to the grocer's fleets and other independent mobile billboards," stated David V. Lott, President of Limelight Media Group, Inc. Lott further stated the Company is evaluating a number of acquisitions that would add significant value and market penetration for the Company and is hopeful that some of these will be concluded in the near future.
Limelight Media Group, Inc. creates, manages and supports out-of-home digital advertising and promotional networks. The Company's digital media management system enables simultaneous delivery of video content to a variety of remote audiences in real time, allowing for immediate customization of messages through a centralized network operations center. The Company is developing an initiative to enhance its product offerings in digital media with traditional media sources and technology products.
This release includes projections of future results and "forward-looking statements" as that term is defined in Section 27A of the Securities Act of 1933 as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 as amended (the "Exchange Act"). All statements that are included in this release, other than statements of historical fact, are forward-looking statements. Although the management of Limelight believes that the expectations reflected in these forward-looking statements are reasonable, they can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations are disclosed in this release, including, without limitation, in conjunction with those forward- looking statements contained in this release.