LEAWOOD, Kan., Aug. 6 /PRNewswire-FirstCall/ -- Digital Ally, Inc.
(OTC Bulletin Board: DGLY), which develops, manufactures and markets advanced
video surveillance products for law enforcement, homeland security and
commercial security applications, today announced record revenue and net
income for the second quarter and first half of 2007. An investor conference
call is scheduled for 11:00 a.m. EDT today, August 6, 2007 (see details
below).
For the three months ended June 30, 2007 , the Company's revenue reached
approximately $3.8 million, compared with revenue of approximately
$0.8 million in the second quarter of the previous year. Revenue in the most
recent quarter compared with revenue of approximately $3.4 million in the
first quarter of 2007 and approximately $1.8 million in the fourth quarter of
2006, and continued a trend of impressive sequential growth in quarterly sales
that began when Digital Ally commenced shipping its advanced digital
surveillance products in March 2006 .
Gross profits totaled $2,638,900 in the second quarter of 2007, and gross
profit margin reached a record 69.1% of revenue. The Company reported net
income of $403,872, or $0.03 per diluted share, in the quarter ended June 30,
2007 , versus a net loss of ($938,812), or ($0.08) per share, in the
corresponding period of the previous year. Net income in the second quarter
of 2007 represented a 149% improvement when compared with net income of
$162,150 in the first quarter of 2007.
The Company incurred non-cash stock compensation expense of $386,609 in
the three months ended June 30, 2007 , compared with $469,579 in the second
quarter of 2006.
"I am pleased to report that 2007 is evolving into a 'breakout' year for
Digital Ally, with domestic and international orders continuing to expand
across a growing customer base," stated Stanton E. Ross, Chief Executive
Officer of the Company. "To date, we have received orders from law
enforcement agencies in 48 states, 11 foreign countries, and the U.S.
Government. During the second quarter, the number of states that have signed
statewide contracts with Digital Ally expanded to four, including West
Virginia, New Mexico , Arkansas and Wisconsin. Shortly after the end of the
quarter, we received the largest order in our history, from the State of
Mississippi, which also signed a contract authorizing the purchase of our
DVM-500 Digital In-Car Video Systems by municipal, county and state law
enforcement agencies throughout the state. We also recently announced receipt
of our largest international order, to date, from the Police Department in the
State of Queretaro in Central Mexico . Momentum continues to build as more law
enforcement agencies, domestically and abroad, become aware of the
space-saving and operational advantages of our DVM-500 in the field, and we
look forward to additional contract announcements in the second half of 2007."
"Our operating results, to date, primarily reflect sales of the DVM
Digital In-Car Video System Integrated into a Rearview Mirror," continued
Ross. "While we believe Digital Ally has only scratched the surface of the
market potential for its DVM systems, our sales during the second half of 2007
will also reflect a growing contribution from shipments of our Digital Video
Flashlight (DVF), which is creating considerable excitement within the law
enforcement industry. Our greatest challenge thus far during 2007 has been to
increase production at a rate consistent with our growth in orders from new
and existing customers. We significantly increased the production capacity at
our Kansas City facilities during the first half of the year, and the Company
is well-positioned to handle the higher level of orders anticipated during the
third and fourth quarters."
For the six months ended June 30, 2007 , the Company's revenue totaled
approximately $7.3 million, compared with revenue of approximately
$0.8 million in the first half of 2006. Gross profits totaled $4,714,586 in
the first half of 2007, for a gross profit margin of 64.9% of revenue,
compared with gross profits of $452,999 (54.1% of revenue) for the six months
ended June 30, 2006 . The Company reported net income of $566,022, or $0.04
per diluted share, in the six months ended June 30, 2007 , versus a net loss of
($1,955,371), or ($0.16) per share, in the corresponding period of the
previous year.
The Company incurred non-cash stock compensation expense of $908,522 in
the six months ended June 30, 2007 , compared with $752,588 in the first half
of the previous year.
"In addition to the impressive sales growth and profitability achieved
during the first two quarters of 2007, our financial condition continues to
strengthen," added Ross. "Net cash provided by operating activities totaled
$959,903 in the six months ended June 30, 2007 , compared with net cash used in
operating activities of ($2,331,375) in the first half of 2006. We ended the
second quarter with $468,272 of cash in the bank and no debt outstanding,
compared with a cash balance of $57,160 and $1 million in outstanding debt at
the end of last year."
The Company will host an investor conference call at 11:00 a.m. Eastern
Time today, August 6, 2007 , to discuss its second quarter operating results
and the outlook for the balance of 2007. Shareholders and other interested
parties may participate in the conference call by dialing 866-406-5369
(international/local participants dial 973-582-2847) and referencing the ID
code 9091527, a few minutes before 11:00 a.m. EDT on August 6, 2007 . A replay
of the conference call will be available two hours after completion of the
conference call from August 6, 2007 until August 13, 2007 by dialing
877-519-4471 (international/local participants dial 973-341-3080) and entering
the conference ID 9091527.
About Digital Ally, Inc.
Digital Ally, Inc. is involved in the development, manufacturing and
marketing of advanced technology products for law enforcement, homeland
security and commercial security applications. The Company's primary
development focus involves the field of Digital Video Imaging and Storage.
For additional information, visit http://www.digitalallyinc.com
The Company is headquartered in Leawood, Kansas, and its shares are traded
on the OTC Bulletin Board under the symbol "DGLY".
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Act of 1934. These forward-looking statements are based largely on the
expectations or forecasts of future events, can be affected by inaccurate
assumptions, and are subject to various business risks and known and unknown
uncertainties, a number of which are beyond the control of management.
Therefore, actual results could differ materially from the forward-looking
statements contained in this press release. A wide variety of factors that
may cause actual results to differ from the forward-looking statements
include, but are not limited to, the following: the Company's ability to
raise sufficient capital to continue to implement its business plan; its
ability to have all of its product offerings perform as planned or advertised;
whether there will be a commercial market for one or more of its products; its
ability to commercialize its products and production processes, including
increasing its production capabilities to meet orders; its ability to increase
revenue to approximately $15.0 million in 2007 and increase profits; whether
the Company will be able to adapt its technology to new and different uses,
including being able to introduce new products; competition from larger, more
established companies with far greater economic and human resources; its
ability to attract and retain customers and quality employees; its ability to
obtain patent protection on any of its products and, if obtained, to defend
such intellectual property rights; the effect of changing economic conditions;
and changes in government regulations, tax rates and similar matters. These
cautionary statements should not be construed as exhaustive or as any
admission as to the adequacy of the Company's disclosures. The Company cannot
always predict or determine after the fact what factors would cause actual
results to differ materially from those indicated by the forward-looking
statements or other statements. The reader should consider statements that
include the words "believes", "expects", "anticipates", "intends",
"estimates", "plans", "projects", or other expressions that are predictions of
or indicate future events or trends, to be uncertain and forward-looking. The
Company does not undertake to publicly update or revise forward-looking
statements, whether as a result of new information, future events or
otherwise.
For Additional Information, Please Contact:
Stanton E. Ross, CEO at (913) 814-7774
or
RJ Falkner & Company, Inc., Investor Relations Counsel
at (830) 693-4400 or via email at
[email protected]
DIGITAL ALLY, INC.
CONDENSED BALANCE SHEETS
JUNE 30, 2007 AND DECEMBER 31, 2006
(Unaudited) (Audited)
June 30, December 31,
2007 2006
Assets
Current assets
Cash $468,272 $57,160
Accounts receivable-trade 1,684,967 977,826
Accounts receivable-other 189,258 225,716
Inventories 1,559,297 1,526,222
Prepaid expenses 253,682 422,279
Total current assets 4,155,476 3,209,203
Equipment 754,979 622,592
Less accumulated depreciation 203,858 114,851
551,121 507,741
Other Assets 104,934 59,305
Total Assets $4,811,531 $3,776,249
Liabilities and Stockholders' Equity
Current liabilities
Note payable $ -- $500,000
Line of credit -- 500,000
Accounts payable 437,278 651,902
Accrued expenses 281,447 180,573
Customer deposits 12,119 20,899
Total current liabilities 730,844 1,853,374
Unearned Income 11,016 5,248
Commitments
Stockholders' equity
Common stock, $0.001 par value; 75,000,000
shares authorized; Shares issued and
outstanding: 13,934,027 - 2007
13,309,027 - 2006 13,934 13,309
Additional paid in capital 11,022,163 9,436,766
Accumulated Deficit (6,966,426) (7,532,448)
Total Stockholders' Equity 4,069,671 1,917,627
Total Liabilities and Stockholders'
Equity $4,811,531 $3,776,249
DIGITAL ALLY, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS
ENDED JUNE 30, 2007 AND 2006
(Unaudited) (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenue $3,819,340 $825,459 $7,259,069 $837,444
Cost of sales 1,180,440 376,795 2,544,483 384,445
Gross profit 2,638,900 448,664 4,714,586 452,999
Operating expenses 2,232,396 1,382,187 4,130,635 2,406,925
Operating income (loss) 406,504 (933,523) 583,951 (1,953,926)
Financial income (expense)
Interest income 6,398 3,437 9,185 15,911
Interest expense (9,030) (8,726) (27,114) (17,356)
(2,632) (5,289) (17,929) (1,445)
Income (Loss) before 403,872 (938,812) 566,022 (1,955,371)
provision for income
taxes
Income tax provision -- -- -- --
Net income (loss) $403,872 $(938,812) $566,022 $(1,955,371)
Net income (loss) per
share information:
Basic $0.03 $(0.08) $0.04 $(0.16)
Diluted $0.03 $(0.08) $0.04 $(0.16)
Weighted average shares
outstanding:
Basic 13,773,412 12,433,360 13,542,502 12,433,360
Diluted 15,548,520 12,433,360 14,960,015 12,433,360
DIGITAL ALLY, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, June 30,
2007 2006
Cash Flows From Operating Activities
Net income (loss) $566,022 ($1,955,371)
Adjustments to reconcile net income (loss) to
net cash flows provided by (used in)
operating activities
Depreciation 89,007 35,643
Stock option expense 908,522 752,588
Shares of common stock issued in lieu of
cash compensation 87,500 --
Change in assets and liabilities
(Increase) decrease in
Accounts receivable - trade (707,141) (611,318)
Accounts receivable - other 36,458 (96,551)
Inventories (33,075) (350,600)
Prepaid expenses 168,597 (367,749)
Other assets (39,325) --
Increase (decrease) in
Accounts payable (214,624) 226,252
Accrued expenses and other liabilities 106,642 35,070
Customer deposits (8,780) 661
Net cash provided by (used in) operating
activities 959,903 (2,331,375)
Cash Flows from Investing Activities
Purchases of equipment (132,387) (157,385)
(Increase) in other assets - deposits (6,304) --
Net cash (used in) investing activities (138,691) (157,385)
Cash Flows from Financing Activities
Principal payments on line of credit (500,000) --
Proceeds from exercise of stock options 90,000 --
Proceeds from sale of common stock -- 1,208,323
Net cash provided by (used in) financing
activities (410,000) 1,208,323
Increase (decrease) in cash 411,112 (1,280,437)
Cash, beginning of period 57,160 1,807,922
Cash, end of period $468,272 $527,485
Supplemental disclosures of cash flow information
Cash payments for interest $27,114 $17,356
Supplemental disclosures of non-cash investing
and financing activities
Common stock issued for settlements of note
payable $500,000 $ --
SOURCE Digital Ally, Inc.
