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."
"We now have customers in all 50 states and 12 foreign countries, and our
largest order, to date, was from an international customer that has since
placed additional orders for the DVM-500. We introduced a number of
additional features to enhance the functionality and utility of our DVM-500
last year, including a wireless software file transfer feature that allows law
enforcement officers to easily and inexpensively download video files to
police headquarters or other remote locations, a Live Streaming Video
capability, and a new VideoManager Server that enhances the ability of
authorized headquarters personnel to view, upload, playback, search and manage
video files from any networked computer with proper access rights."
"Improvements in our balance sheet during 2007 were as strong as our
operating results," observed Ross. "Stockholders' equity increased from
$1.9 million at the end of 2006 to $9.0 million as of December 31, 2007 , we
paid off all of our short and long-term debt during the year, and we had
$4.2 million of cash and a current ratio of 5.0-to-1.0 at year-end.
Financially, we are very well-positioned for the growth anticipated in 2008."
"Looking forward, 2008 will be a year marked by our introduction of
several new products and our entry into new markets," continued Ross. "Our
experience with the Digital Video Flashlight ("DVF"), which contributed
modestly to 2007 sales, has resulted in a redesign of that product that we
believe will increase its appeal to both existing and new customers. We plan
to introduce our initial digital surveillance products for the school bus and
mass transit markets during the second quarter of 2008, and a new product for
law enforcement and military applications should be forthcoming in the second
half of the year."
"We expect to achieve our eighth consecutive quarter of record sales
during the three months ending March 31, 2008 , and based upon information
currently available to the Company, we anticipate that full year 2008 revenues
should more than double to approximately $40 million. We also believe that
the Company should be able to maintain the 21% operating margin reported in
the most recent quarter in 2008."
The Company will host an investor conference call at 11:00 a.m. Eastern
Time today, February 21, 2008 , to discuss its fourth quarter and full-year
2007 operating results. 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 32445911 a few minutes before 11:00 a.m. EST on February 21, 2008 . A
replay of the conference call will be available two hours after completion of
the conference call from February 21, 2008 until February 28, 2008 by dialing
800-642-1687 (international/local participants dial 706-645-9291) and entering
the conference ID 32445911.
About Digital Ally, Inc.
Digital Ally, Inc. develops, manufactures and markets advanced technology
products for law enforcement, homeland security and commercial security
applications. The Company's primary focus is the field of Digital Video
Imaging and Storage. For additional information, visit
http://www.digitalallyinc.com.
The Company is headquartered in Overland Park, Kansas, and its shares are
traded on The Nasdaq Capital Market 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 have
all of its new product offerings perform as planned or advertised; whether
there will be a commercial market, domestically and internationally, for one
or more of its new products; its ability to commercialize its products and
production processes, including increasing its production capabilities to
satisfy orders in a cost-effective manner; its ability to continue to increase
revenue and profits, including the achievement of $40 million in revenues and
21% operating margins in 2008; 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 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", "should", 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 (800) 377-9893
or via email at
[email protected]
(Financial Highlights Follow)
DIGITAL ALLY, INC.
CONDENSED BALANCE SHEETS
DECEMBER 31, 2007 AND 2006
(Unaudited) (Audited)
2007 2006
Assets
Current assets:
Cash and cash equivalents $4,255,039 $57,160
Accounts receivable-trade, net 523,011 977,826
Accounts receivable-other 211,687 225,716
Inventories 2,964,098 1,526,222
Prepaid expenses 232,901 422,279
Deferred taxes 795,000 -
Total current assets 8,981,736 3,209,203
Furniture, fixtures and equipment 1,180,318 622,592
Less accumulated depreciation 301,632 114,851
878,686 507,741
Deferred taxes 980,000 -
Other assets 65,007 59,305
Total assets $10,905,429 $3,776,249
Liabilities and Stockholders' Equity
Current liabilities:
Note payable $- $500,000
Line of credit - 500,000
Accounts payable 1,008,831 651,902
Accrued expenses 507,695 180,573
Income taxes payable 26,000 -
Customer deposits 243,171 20,899
Total current liabilities 1,785,697 1,853,374
Unearned income 3,864 5,248
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value;
75,000,000 shares authorized;
Shares issued and outstanding:
14,092,260 - 2007; 13,309,027 - 2006 14,092 13,309
Additional paid in capital 12,110,890 9,436,766
Accumulated deficit (3,009,114) (7,532,448)
Total stockholders' equity 9,115,868 1,917,627
Total liabilities and stockholders' equity $10,905,429 $3,776,249
DIGITAL ALLY, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEARS
ENDED DECEMBER 31, 2007 AND 2006
Three Months Ended Years Ended
(Unaudited) (Unaudited) (Unaudited) (Audited)
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Revenue $7,031,488 $1,837,377 $19,391,082 $4,109,394
Cost of sales 2,964,776 926,134 7,649,930 2,126,744
Gross profit 4,066,712 911,243 11,741,152 1,982,650
Operating expenses 2,599,989 1,064,740 8,875,915 5,324,223
Operating income
(loss) 1,466,723 (153,497) 2,865,237 (3,341,573)
Financial income
(expense)
Interest income 18,979 2,522 34,609 20,742
Interest expense (303) (14,220) (28,006) (40,398)
Other, net (11,506) - (11,506) -
7,170 (11,698) (4,903) (19,656)
Income (loss) before
income tax (provision)
benefit 1,473,893 (165,195) 2,860,334 (3,361,229)
Income tax (provision)
benefit (490,143) - 1,663,000 -
Net income (loss) $983,750 $(165,195) $4,523,334 $(3,361,229)
Net income (loss) per
share information:
Basic $0.07 $(0.01) $0.33 $(0.26)
Diluted $0.06 $(0.01) $0.28 $(0.26)
Weighted average shares
outstanding:
Basic 14,069,133 13,309,627 13,742,070 12,829,610
Diluted 17,639,826 13,309,627 16,163,337 12,829,610
DIGITAL ALLY, INC.
CONDENSED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007 AND 2006
(Unaudited) (Audited)
2007 2006
Cash Flows From Operating Activities
Net income (loss) $4,523,334 $(3,361,229)
Adjustments to reconcile net income
(loss) to net cash flows provided by
(used in) operating activities:
Depreciation 192,033 85,057
Stock based compensation 1,696,959 1,725,998
Shares of common stock issued in
lieu of cash compensation 87,500 215,000
Reserve for inventory obsolescence 196,328 -
Reserve for bad debt allowance 28,224 -
Deferred tax benefits (1,775,000) -
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable - trade 426,591 (977,826)
Accounts receivable - other 14,029 (211,086)
Inventories (1,634,204) (1,452,794)
Prepaid expenses 189,378 (162,450)
Other assets (5,702) (45,520)
Increase (decrease) in:
Accounts payable 356,929 607,725
Accrued expenses 327,122 145,605
Income taxes payable 26,000 -
Customer deposits 222,272 11,854
Unearned income (1,384) -
Net cash provided by (used in)
operating activities 4,870,409 (3,419,666)
Cash Flows from Investing Activities
Purchases of furniture, fixtures
and equipment (562,978) (482,563)
Net cash (used in) investing activities (562,978) (482,563)
Cash Flows from Financing Activities
Net borrowings (repayments) (500,000) 500,000
on line of credit
Proceeds from exercise of stock
options and warrants 378,448 50,000
Excess tax benefits related to stock based
compensation 12,000 -
Proceeds from sale of common stock - 1,601,467
Net cash provided by (used in) financing
activities (109,552) 2,151,467
Increase (decrease) in cash 142,135 (1,750,762)
Cash and cash equivalents, beginning of year 57,160 1,807,922
Cash and cash equivalents, end of year $199,295 $57,160
Supplemental disclosures of cash flow
information:
Cash payments for interest $28,006 $40,398
Cash payments for income taxes $74,000 $-
Supplemental disclosures of non-cash
investing and financing activities:
Common stock issued for settlement of note
payable $500,000 $-
NOTE: FOR MORE DETAILED INFORMATION, REFER TO THE COMPANY'S ANNUAL REPORT
ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2007 TO BE FILED WITH THE SEC.
SOURCE Digital Ally, Inc.