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Digital Ally
Sees Another Record Quarter

Company Announces Authorization of Stock Repurchase Plan


Digital Ally, Inc. Press Release

FlashlightNews.org - 6/30/2008


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Digital Video Flashlight

Digital Video Flashlight from Digital Ally

OVERLAND PARK, Ks. - 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 that it expects to report its operating results for the second quarter of 2008 towards the end of July.

"We expect to report that the Company achieved its ninth consecutive quarter of record revenues during the quarter that ends today," stated Stanton E. Ross, Chief Executive Officer of Digital Ally, Inc. "The Company began shipping its advanced digital surveillance products to customers in March 2006, and revenues in each quarter since that time have exceeded the revenues recorded in the preceding quarter. While our growth to date has been driven primarily by the DVM-500 In-Car Digital Video Rearview Mirror System's rapid increase in its share of the market for in-car video systems within the domestic and international law enforcement community, we expect new products and new markets to play an expanding role in our future sales gains. An increasing number of law enforcement agencies are testing our Digital Video Flashlight, and our recently announced DVM-250 Pro will be the first in a series of professional-quality event recorders being developed for the transportation industry."

"As we have stated before, management expects Digital Ally's revenues for the year ending December 31, 2008 to increase over 100% from last year, to approximately $40 million, and operating margins for the full year should at least approximate the 29% reported in the first quarter of 2008," continued Ross. "While it is too early to issue any specific guidance for 2009, we are optimistic that next year will again witness strong growth in sales and earnings for the Company."

The Company also announced that its Board of Directors has approved a program that authorizes the repurchase of up to $10 million of the Company's common stock in the open market, or in privately negotiated transactions, through July 1, 2010. The repurchases, if and when made, will be subject to market conditions, applicable rules of the Securities and Exchange Commission and other factors. Purchases may be commenced, suspended or discontinued at any time. The repurchase program will be funded using a portion of available cash and cash equivalent balances, along with "free" cash flows being generated from operations

"We are currently earning interest on our growing cash balances at an annualized rate of less than 2%. Meanwhile, our Company's after-tax net income during the first quarter of 2008 was equivalent to an annualized return on December 31, 2007 shareholders' equity of more than 73%. From a long-term perspective, we believe the investment of some of our cash in DGLY common stock when we deem it to be undervalued represents a prudent and attractive alternative to the currently low interest rates that we are earning on our cash equivalent investments," concluded Ross.

As of June 29, 2008, Digital Ally, Inc. had 15,646,243 shares of common stock outstanding.

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 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".

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