Digital Ally, Inc. Reports 372% Sales Increase and Record Earnings for 2007

OVERLAND PARK, Kan., Feb. 21 /PRNewswire-FirstCall/ -- Digital Ally, Inc. (Nasdaq: DGLY), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial security applications, today...


OVERLAND PARK, Kan., Feb. 21 /PRNewswire-FirstCall/ -- Digital Ally, Inc. (Nasdaq: DGLY), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial security applications, today reported record revenue and net income for the fourth quarter and full year 2007. An investor conference call is scheduled for 11:00 a.m. EST today, February 21, 2008 (see details below).

For the three months ended December 31, 2007 , revenue increased 283% to approximately $7.0 million, when compared with revenue of approximately $1.8 million in the fourth quarter of 2006. Sales during the fourth quarter of 2007 increased 38% when compared with approximately $5.1 million in the third quarter of 2007.

Gross profits totaled $4,066,712 (57.8% of revenue) in the quarter ended December 31, 2007 , compared with gross profits of $911,243 (49.6% of revenue) in the corresponding period of the previous year. The Company recorded net income of $983,750 in the fourth quarter of 2007, versus a net loss of ($165,195) in the prior-year quarter. Basic earnings per share of $0.07 in the quarter ended December 31, 2007 compared with a net loss of ($0.01) per share in the prior-year period. Diluted earnings per share totaled $0.06 in the quarter ended December 31, 2007 , versus a net loss of ($0.01) per share in the fourth quarter of 2006. Net income for the three months ended December 31, 2007 included a $490,143 income tax expense.

The Company incurred non-cash stock compensation expense of $402,681 for the quarter ended December 31, 2007 , compared with $147,662 in the prior-year quarter.

For the twelve months ended December 31, 2007 , revenue increased 372% to approximately $19.4 million, when compared with revenue of approximately $4.1 million in year ended December 31, 2006 . Gross profits improved 492% to $11,741,152 (60.5% of revenue) in 2007, when compared with gross profits of $1,982,650 (48.2% of revenue) in the previous year. The Company reported net income of $4,523,334 in the year ended December 31, 2007 , versus a net loss of ($3,361,229) in the year ended December 31, 2006 . Basic earnings per share of $0.33 in 2007 compared with a net loss of ($0.26) per share in 2006. Diluted earnings per share totaled $0.28 in the year ended December 31, 2007 , versus a net loss of ($0.26) per share in 2006. Net income for the year ended December 31, 2007 included an income tax benefit of $1,663,000. This benefit resulted from the Company's reduction of its deferred tax valuation allowance due to the utilization of its net operating loss carryforward in 2007 and anticipated future usage of the carryforward because of expected future profitability, among other items. Excluding this income tax benefit, the Company would have reported net income of $2,860,334, or $0.21 per basic and $0.18 per diluted share, for the year ended December 31, 2007 .

The Company incurred non-cash stock compensation expense totaling $1,784,459 in the year ended December 31, 2007 , compared with $1,940,998 in 2006.

"I am very pleased to report outstanding growth in sales and earnings for the quarter and year ended December 31, 2007 , as enthusiasm for our DVM-500 In-Car Video Mirror continued to build among law enforcement agencies throughout the United States and internationally," stated Stanton E. Ross, Chief Executive Officer of the Company. "Not only did our sales increase 372% to a record $19.4 million in 2007, but our gross profits rose at an even faster pace as gross margins improved to 60.5% of revenue, compared with 48.2% in 2006. Sales during the three months ended December 31, 2007 represented the seventh consecutive increase in quarterly sales since Digital Ally commenced shipping its advanced digital surveillance products to customers in March 2006."

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