Digital Ally (DGLY) Stock Down on First Quarter Results

Shares of Digital Ally Inc. (DGLY) were trading down -3.10 or -16.94 percent to $15.20 in Thursday's premarket after the company announced lower than expected results for its fiscal first quarter late yesterday. Digital Ally stock closed at $18.30 per share, up +0.92 or +5.29 percent in Wednesday's regular trading session.

Lenexa, Kansas based Digital Ally Inc. produces and develops digital video imaging and storage components used in law enforcement.
The company's main product consists of a digital video rear view mirror designed for commercial fleets such as taxis and ambulances and vehicles used in law enforcement. The digital video recording systems are extremely rugged, weather resistant and can be used in boats, motorcycles and ATVs.

Digital Ally also makes a video system designed to be worn on an individual's body by clipping the camera to a belt or pocket. Other products made by the company include a digital video flashlight and a hand held speed detection device. The company sells its products primarily to law enforcement agencies, security companies and operators of commercial fleets.

The company reported it had a net loss of -$6, 410, 712 or -$1.90 per share on a GAAP basis in the first quarter of 2015. This compares to a loss of -$871,499 or -$0.39 per share in the same period one year ago. On a non-GAAP basis the company reported an adjusted net loss of -$1,524, 825 or -$0.45 per share compared to a loss of -$301,152 or -$0.13 per share in 2014's first quarter.

Digital Ally's revenue for the first quarter came to about +$4.2 million versus revenue of +$3.9 million in the first quarter of 2014, an increase of +9 percent, nevertheless, gross profit margin declined to 38.9 percent of total revenue versus 59.4 percent in the same period last year. According to the company, the decline in margins was due to the hiring and training of new personnel, and increased rework and scrap rates for printed circuit boards for the FirstVU HD camera.

The company cited a 26 percent increase in sales and general and administrative costs as one of the main reasons for the first quarter loss. Digital Ally said that it had increased its sales and technical support staff for the higher level of testing required for its evaluation pilot projects and for the customer deployment of its products, especially the company's FirstVU HD body worn camera.

Stanton Ross, Chief Executive of Digital Ally noted in the company's press release that due to shortages of some components, the company was restricted in the delivery of FirstVU HD body worn cameras in the first quarter and that, "we are encouraged that orders for the FirstVU HD continue to increase in response to growing recognition of the value of video evidence among law enforcement agencies throughout the U.S. and abroad.

Ross continued, "From an industry perspective, we believe many police departments postponed their regular purchases of in-car video systems while they tested body-worn cameras and assessed their budgets. Some police departments appear to have delayed their purchases of body-worn and in-car video systems pending the clarification of recently announced federal and state matching programs."

Digital Ally reiterated its previous full year 2015 guidance, with total revenue expected to be approximately +$25 million versus +$17.4 million for 2014. The Company will be hosting an investor conference call later this morning at 11:15 a.m. Eastern Daylight Time.

Other News About DGLY

Justice Department Announces $20 Million In Funding To Support Body-Worn Camera Pilot Program

The Department announced the future purchase of 50,000 body worn cameras for law enforcement agencies, which will directly affect Digital Ally.

Police Officers Looking To Buy Their Own Body Cameras

Some officers are considering buying their own cameras to safeguard their reputation.

Other Stocks in the News

Kohl's shares drop as sales miss overshadows profit beat

First quarter sales missed expectations despite the company beating analyst estimates on earnings.

GM to invest $1 billion in renovating Michigan tech center

Company will renew its 60 year old tech center in Warren, Michigan.

Published on May 14, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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