Digital Ally Inc. (DGLY)

[Captain_Chaos]

Q2 results - A net loss of ($2,865,084), or ($0.54)

http://www.marketwired.com/press-release/digital-ally-inc-announces-second-quarter-operating-results-nasdaq-dgly-2148506.htm

Highlights for Quarter Ended June 30, 2016
Gross profit margin approximated 28.9% of total revenue in the second quarter of 2016, compared with 54.9% in the prior-year quarter and 42.1% in the first quarter of 2016. The reduction in gross profit margin relative to the prior-year quarter was primarily due to charges taken to correct our contract manufacturer's workmanship issues that resulted in contamination of the printed circuit boards (PCB) for our FirstVU HD product. We became aware of these issues during second quarter 2016.

Total revenue decreased by 22% to approximately $4.4 million in the second quarter of 2016, compared with approximately $5.6 million in the quarter ended June 30, 2015. We attribute the decrease to ongoing confusion caused by a competitor's misleading press release regarding our patents combined with delayed FirstVU HD sales while we resolved the PCB board contamination issues.

The Company shipped four orders in excess of $100,000 each during the most recent quarter, for a total of $1.4 million, compared with seven individual orders exceeding $100,000 each in the year-earlier quarter, for a total of $1.3 million.

Our sales mix continues to migrate to our DVM-800 in-car video system and FirstVU HD body-worn camera, which contributed 62% of total sales for the three months ended June 30, 2015, versus 55% for the corresponding period of the previous year.

The Company reported an operating loss of ($2,892,657) for the quarter ended June 30, 2016, compared with an operating loss of ($816,962) in the three months ended June 30, 2015.

A net loss of ($2,865,084), or ($0.54) per share, was recorded in the second quarter of 2016, compared with a net loss of ($792,388), or ($0.20) per share, in the corresponding period of the previous year.

On a non-GAAP basis, the Company recorded an adjusted EBITDA loss of ($2,393,626), or ($0.45) per share, in the most recent quarter, compared with a non-GAAP adjusted EBITDA loss of ($318,207), or ($0.08) per share, in the three months ended June 30, 2015.

On May 27, 2016, Digital Ally filed suit against WatchGuard alleging patent infringement involving the Company's "auto-activation" technology utilized in its VuLink product.


inventory and cash comments
"We entered 2016 with a stronger balance sheet and greater liquidity, which should support a significantly higher level of product sales and shipments if anticipated orders are forthcoming," added Ross. "Unrestricted cash and equivalents totaled $4.1 million and we were debt-free at June 30, 2016. We had approximately $14.6 million in net working capital available at such date, including $2.8 million of accounts receivable and $9.7 million of inventory. We will work to continue reducing inventory levels during the balance of 2016 to provide additional funding for operations," concluded Ross.