OVERLAND PARK, Kan. , July 30 /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 announced higher sales and earnings for the second quarter and first half of 2008. An investor conference call is scheduled for 11:00 a.m. EDT today, July 30, 2008 (see details below).
For the three months ended June 30, 2008 , revenue approximated
Gross profits increased 122% to
Basic earnings per share increased 200% to
Adjusted EBITDA (net income before interest, income taxes, depreciation,
amortization, and stock-based compensation), a non-GAAP financial measure,
increased to
For the six months ended June 30, 2008 , the Company reported that its
revenue increased 141% to approximately
Basic earnings per share rose 425% to
Adjusted EBITDA increased to
"I am very pleased to report our ninth sequential quarter of record sales
for the three months ended June 30, 2008 , along with higher earnings for the
second quarter and first half of the year," stated Stanton E. Ross , Chief
Executive Officer of Digital Ally, Inc. "While our second quarter gross
margin was below the prior-year period, it was still a very healthy 61.1% of
sales. We consider this gross margin very satisfactory in light of the fact
that 42% of second quarter revenues were derived from international sales,
which generally yield a lower gross margin than domestic sales. The impact of
lower gross margins on international sales is partially offset by lower sales
commissions that are paid by the Company on such orders. Operating income was
461% higher than in the second quarter of 2007, despite a
"We expect full-year revenue to more than double to approximately
"We maintain an aggressive research and development program, with projects
underway that are focused on (1) new products designed for the school bus,
mass transit, taxi cab and other markets and (2) upgrades to our existing
product lines," continued Ross. "R&D spending rose 154% in the six months
ended June 30, 2008 to
"We ended the second quarter in the strongest financial condition in the
Company's history, with over
Non-GAAP Financial Measures
Digital has provided financial information in this release that has not been prepared in accordance with GAAP. This information includes non-GAAP adjusted EBITDA. Digital uses such non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Digital's ongoing operational performance. Digital believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Digital's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude interest income/expense, income taxes, depreciation and amortization and share-based compensation expense pursuant to SFAS 123(R).
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. As previously mentioned, a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
Investor Conference Call
The Company will host an investor conference call at 11:00 a.m. Eastern Time today, July 30, 2008 , to discuss its first quarter operating results and other topics of interest. Shareholders and other interested parties may participate in the conference call by dialing 800-860-2442 (international/local participants dial 412-858-4600) and asking to be connected to the "Digital Ally, Inc. Conference Call" a few minutes before 11:00 a.m. EDT on July 30, 2008 . The call will also be broadcast live on the Internet at http://www.videonewswire.com/event.asp?id=50129. A replay of the conference call will be available one hour after the completion of the conference call from July 30, 2008 until September 29, 2008 by dialing 877-344-7529 (international/local participants dial 412-317-0088) and entering the conference ID 421583.
The call will also be archived on the Internet through August 29, 2008 , at http://www.videonewswire.com/event.asp?id=50129 and on the Company's website at http://www.digitalallyinc.com.
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 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 approximately
(FOR ADDITIONAL INFORMATION, PLEASE REFER TO THE COMPANY'S QUARTERLY REPORT ON
FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 TO BE FILED WITH
THE SEC) DIGITAL ALLY, INC. RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007 (unaudited) (unaudited) Three Months ended June 30, Six months ended June 30, 2008 2007 2008 2007 Net income $1,412,280 $403,872 $3,089,067 $566,022 Non-GAAP adjustments: Interest (income) expense (22,350) 2,632 (49,297) 17,929 Income tax provision 889,000 - 1,735,000 - Stock-based compensation 400,909 386,609 574,311 908,522 Depreciation and amortization 50,773 48,564 133,097 89,007 Total Non-GAAP adjustments 1,318,332 437,805 2,393,111 1,015,458 Total Non-GAAP adjusted EBITDA $2,730,612 $841,677 $5,482,178 $1,581,480 DIGITAL ALLY, INC. CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007 Six months ended June 30, June 30, 2008 2007 (unaudited) (unaudited) Cash Flows From Operating Activities: Net income $3,089,067 $566,022 Adjustments to reconcile net income to net cash flows (used in) provided by operating activities: Depreciation 133,097 89,007 Stock based compensation 574,311 908,522 Common stock issued in lieu of cash compensation - 87,500 Reserve for inventory obsolescence 87,335 - Reserve for bad debts 1,776 - Deferred tax provision (95,000) - Change in assets and liabilities: (Increase) decrease in: Accounts receivable -- trade (3,580,862) (707,141) Accounts receivable -- other (122,825) 36,458 Inventories (1,565,828) (33,075) Prepaid expenses 29,831 168,597) Other assets 35,749 (39,325) Increase (decrease) in: Accounts payable 308,239 (214,624) Accrued expenses 489,217 106,642 Income taxes payable (76,000) - Customer deposits (226,166) (8,780) Unearned income (3,864) - Net cash (used in) provided by operating activities (921,923) 959,903 Cash Flows from Investing Activities: Purchases of furniture, fixtures and equipment (394,743) (132,387) Intangible assets acquired (82,689) - Other assets -- deposits - (6,305) Net cash (used in) investing activities (477,432) (138,691) Cash Flows from Financing Activities: Repayment of line of credit, net - (500,000) Proceeds from exercise of stock options and warrants 1,953,510 90,000 Excess tax benefits related to stock-based compensation 1,805,000 - Net cash provided by financing activities 3,758,510 (410,000) Increase in cash and cash equivalents 2,359,155 411,112 Cash and cash equivalents, beginning of period 4,255,039 57,160 Cash and cash equivalents, end of period $6,614,194 $468,272 Supplemental disclosures of cash flow information: Cash payments for interest $- $27,114 Cash payments for income taxes $101,000 $- Supplemental disclosures of non-cash investing and financing activities: Common stock surrendered as consideration for cashless exercise of stock options $378,110 $- Common stock issued for settlement of note payable $- $500,000SOURCE Digital Ally, Inc.