Digital Ally, Inc. Reports Third Quarter Operating Results
Digital Ally, Inc. Press ReleaseFlashlightNews.org - 11/21/2006
Company reports 74% increase in quarterly revenues, and substantially smaller quarterly loss
Digital Video Flashlight
LEAWOOD, Ks. - Digital Ally, Inc. (OTC: DGLY), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial security applications, today announced its operating results for the third quarter and first nine months of 2006.
For the three months ended September 30, 2006, Digital Ally, Inc. reported revenues of $1,434,573, representing a 74% increase when compared with revenues of $825,459 in the quarter ended June 30, 2006 and no revenues in the quarter ended September 30, 2005. The Company reported an operating loss of ($462,024) and a net loss of ($468,538), or ($0.04) per share, for the third quarter of 2006. In the prior-year period, the Company had no revenues, an operating loss of ($637,975) and a net loss of ($638,211), or ($0.09) per share. The net loss for the third quarter of 2006 included non-cash stock option expense of $103,534 that was related to stock options granted under the Company's 2005 Stock Option Plan. The weighted average number of shares outstanding totaled 12,492,027 in the most recent quarter, compared with 7,500,027 in the three months ended September 30, 2005.
For the nine months ended September 30, 2006, the Company reported revenues of $2,272,017, an operating loss of ($2,415,950) and a net loss of ($2,423,909), or ($0.19) per share. In the corresponding period of the previous year, the Company had no revenues and recorded an operating loss of ($1,515,288) and a net loss of ($1,555,717), or ($0.21) per share. The net loss for the first nine months of 2006 included non-cash stock option expense of $934,598. The weighted average number of shares outstanding totaled 12,492,027 in the first nine months of 2006, compared with 7,500,027 in the nine months ended September 30, 2005.
"Our sales of digital surveillance products increased 74% between the second and third quarters of 2006, reflecting strong and growing demand for our Compact Digital In-Car Video System (DVM) within the international law enforcement community," stated Stanton Ross, Chief Executive Officer of Digital Ally, Inc. "While our plans to begin delivering the Digital Video Flashlight (DVF) in volume were not realized during the third quarter due to certain component sourcing issues, we are optimistic that deliveries of DVFs will ramp up in the fourth quarter and accelerate significantly in 2007. To date, we have received and shipped orders for DVMs and DVFs from law enforcement agencies in 41 states and 8 foreign countries, including several U.S. Government organizations."
"While manufacturing, distribution and marketing costs have remained at relatively high levels during the first several months of shipping our new products, I am pleased to report that gross profits increased 84% to $823,719 in the most recent quarter, when compared with gross profits of $448,664 in the second quarter of 2006."
"Thus far during 2006, we are experiencing widespread acceptance of our products among law enforcement agencies of all sizes and have received repeat orders from a growing number of customers. Response from existing and potential customers that visited our booth at last month's 113th Annual International Chiefs of Police (IACP) Conference in Boston was outstanding, and we returned from the conference with over 600 active leads that are currently being processed by sales and marketing personnel."
"We continue to invest in R&D activities that are focused on the development of new digital surveillance products for law enforcement and other markets," continued Ross. "During the third quarter, R&D spending totaled approximately $339,000, and our plans call for the introduction of at least two new products into the market within the next twelve months."
"Based on information currently available to management, we expect fourth quarter sales to increase significantly from third quarter levels, and sales for our first year of product shipments should approach $5 million. We also believe the Company may report its first quarterly operating profit during the three months ending December 31, 2006. Management is very optimistic regarding the outlook for 2007, when sales should more than double and the Company should be profitable."
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 www.digitalallyinc.com.
The Company is headquartered in Leawood, Kansas, and its shares are traded on the Pink Sheets under the symbol "DGLY".