Digital Ally Surges After Strong Results

Shares of Digital Ally, Inc. DGLY rose 6.62 percent on Monday trading, in anticipation of the company’s earnings call, after market close. Now that the company has reported its financial results, the stock continues to rally in after hours.

Digital Ally reported revenue of $5.4 million for the fourth quarter of 2014, up 55 percent from the $3.5 million reported in the prior-year period. However, the full-year revenue fell 2 percent, to roughly $17.4 million.

Related Link: GoPro Could Thwart Digital Ally's Growth Potential

Gross profit margin widened slightly to 56.9 percent of total revenue in 2014, compared with 56.7 percent in 2013. For the fourth quarter, gross margin rose to 59.3 percent of revenue, up considerably from last year’s fourth quarter, when they reported a gross margin of 49.9 percent of revenue.

On a non-GAAP basis, Digital Alley reported an adjusted net loss of ($0.56) per share, in 2014, versus ($0.41) per share in 2013. For the fourth quarter of 2014, the company recorded non-GAAP net income of $0.05 per diluted share, versus a non-GAAP net loss of ($0.50) per share in the fourth quarter of 2013.

CEO Stanton E. Ross commented on the results: “While our revenue decreased slightly in 2014, we are pleased to report that sales strengthened considerably towards the end of the year.”

“We have seen a large increase in inquiries, requests for test and evaluation units and pilot programs being conducted by police departments since the events in Ferguson last August. We are optimistic this will result in higher sales in 2015 as existing and potential customers evaluate our body-worn and in-car video camera solutions. Our patented VuLink connectivity device is also generating great interest among law enforcement agencies that recognize the value of collecting video evidence of interactions between officers and the public from multiple perspectives.”

“Demand for our FirstVU HD body-worn cameras has increased at a faster pace than the current capacity of suppliers of certain components, but we have taken steps to address this issue. We are confident that we are well-positioned to ramp up production to meet expected demand in the coming months. With the introduction of our VuVault.net cloud-based video evidence storage and management solution in the third quarter of 2014, we are now prepared to satisfy the video evidence needs of virtually any law enforcement agency, regardless of whether it wants storage in the cloud or desires to maintain evidence on its own servers.”

For 2015, the company guided revenue of approximately $25 million and operating income around $2.5 million.