Duos Technologies Group Reports First Quarter 2016 Results
Anticipated 2016 Revenue Growth Fueled by New Signed and Pending Contracts
/EINPresswire.com/ -- JACKSONVILLE, FL--(Marketwired - May 17, 2016) - Duos Technologies Group (OTCQB: DUOT), a provider of intelligent security analytical technology solutions, today reported its operating results for the first quarter ended March 31, 2016.
Following the merger, which became effective in April of 2015, the two companies have successfully integrated all operations and continue to grow the business in all of its target markets. Based on current growth projections, the Company anticipates that by year end 2016, it will operate at or very close to breakeven on an annual basis, albeit with anticipated losses in specific quarters. Duos also continues to build a solid pipeline of business which is translating into firm orders on a consistent basis.
Key Highlights for the Quarter ended:
- Revenues of $1.0 Million, Despite Two Project Delays;
- Gross Margins Remain Above 50%;
- Backlog of $4.0 Million, of which 90% is Expected to be Recorded as Revenue During 2016;
- Closed Senior Secured Non-Convertible Debt Financing with Aggregate Proceeds of Approximately $1.5 million;
- Settled and Satisfied Pending Lawsuit;
- Received Contract Award from Class I Railroad for Proprietary Rail Inspection Portal as Image Portal for Mechanical Inspection; and
- Awarded Major Contract Award in IT Services for International Mobile Telecommunications Operator
Gianni Arcaini, Chairman and CEO of Duos Technologies Group, stated, "Over the past several years, we have made substantial investments in product research and development, and achieved significant milestones in the development of our technology solutions. We have made progress in penetrating the market with our proprietary technology solutions, more particularly in the rail industry, which is currently undergoing a major shift in maintenance strategies. We believe that this shift will be a significant motivating factor for using our technologies. We also continue to expand our IT professional services business." Mr. Arcaini further noted that one of the two delayed projects expected to start in the first quarter has since commenced. "Our recently expanded key hires and infrastructure make us well-positioned to deliver upon our increased backlog and signed and pending contracts for the remainder of 2016. We expect a robust year-over-year revenue growth in 2016, with a goal of operating profits."
A detailed description of Duos' business, our results of operations and financial statements are contained in the Quarterly Report on Form 10-Q filed on May 16, 2016.
Financial Results for the Quarter Ended March 31, 2016:
Total revenue was $1.0 million for the three months ended March 31, 2016, a 9% decrease from $1.1 million for the corresponding prior year quarter. The decrease in revenue for 2016 was mainly caused by the delay of two projects, which were anticipated to start during the quarter ended March 31, 2016. The revenue breakdown consisted of $0.2 million of new projects, $0.6 million of maintenance and technical support and $0.2 million of IT asset management services.
Gross profit was $0.5 million, or 52% gross profit margin. Operating expenses for the quarter ended March 31, 2016 were $1.3 million, an increase of $0.4 million from $0.9 million during the same period of 2015. The 40% increase in operating expenses was mainly due to increases in salaries, wages and contract labor of $0.3 million, which is attributable to expansion of the employee base in anticipation of new projects starting later in the year.
Operating loss for the three months ended March 31, 2016 was $0.8 million, an increase of $0.4 million from a $0.4 million operating loss for the three months ended March 31, 2015. Much of the additional increase in expenses and loss from operations is related to operating as a public company, the anticipated growth resulting from signed and pending contracts, and the addition of key employees in the areas of sales, support and research and development.
Net loss for the three months ended March 31, 2016 was $838,381, an increase of $85,957 from a $752,424 net loss for the three months ended March 31, 2015. The resulting EPS remained flat at ($0.01), as compared to ($0.01) for the prior year ago quarter.
At March 31, 2016, Duos Technologies Group had 65.7 million shares issued and outstanding.
Duos Technologies Group, Inc.
Duos Technologies Group, Inc. (DUOT), based in Jacksonville, FL, provides intelligent security analytical technology solutions with a strong portfolio of intellectual property. The Company's core competencies include advanced intelligent technologies that are delivered through its proprietary integrated enterprise command and control platform, centraco
For more information, check out: http://www.duostech.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections and reflect our beliefs and assumptions based upon information available to us at the date of this release. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including but not limited to, our expectations as to continued revenues growth and anticipated breakeven and in 2016, our ability to raise working capital to further grow our business and the impact thereon of the going concern qualification in our auditors report for 2015, the timing and delivery of purchase orders and receipt of payment, year-over-year growth in 2016, our business environment and industry trends, competitive environment, the sufficiency and availability of working capital, general changes in economic conditions
and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including our Annual Report
Form 10-K for the year ended December 31, 2015. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not
possible for us to predict all of them.
We undertake no obligation to revise or update any forward-looking statement for any reason.
DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
-------------- --------------
2016 2015
-------------- --------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 250 $ 140,129
Accounts receivable 137,436 452,235
Costs and estimated earnings in excess of
billings on uncompleted contracts 434,291 421,116
Prepaid expenses and other current assets 409,543 165,095
-------------- --------------
Total Current Assets 981,520 1,178,575
-------------- --------------
Property and equipment, net 80,901 72,544
OTHER ASSETS:
Patents and trademarks, net 55,649 57,006
-------------- --------------
Total Other Assets 55,649 57,006
-------------- --------------
TOTAL ASSETS $ 1,118,070 $ 1,308,125
============== ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Bank overdraft $ 3,604 $ -
Accounts payable 1,179,885 1,061,961
Accounts payable - related parties 41,205 30,070
Commercial insurance/office equipment
financing 133,133 44,024
Notes payable - related parties 495,786 486,964
Notes payable 189,108 196,608
Convertible notes payable, including
premiums 193,950 193,950
Line of credit 40,822 40,216
Payroll taxes payable 456,368 296,215
Accrued expenses 1,032,683 955,570
Billings in excess of costs and estimated
earnings on uncompleted contracts 420,048 303,064
Deferred revenue 609,316 908,206
Contingent lawsuit payable 550,000 550,000
-------------- --------------
Total Current Liabilities 5,345,908 5,066,848
-------------- --------------
Total Liabilities 5,345,908 5,066,848
-------------- --------------
Commitments and Contingencies (Note 5)
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value - -
10,000,000 authorized, none issued or
outstanding
Common stock: $0.001 par value; 500,000,000
shares authorized 65,718 64,778
65,716,721 and 64,777,621 shares issued
and issuable, and outstanding at March
31, 2016 and December 31, 2015,
respectively
Additional paid-in capital 17,496,001 17,127,675
Accumulated deficit (21,789,557) (20,951,176)
-------------- --------------
Total Stockholders' Deficit (4,227,838) (3,758,723)
-------------- --------------
Total Liabilities and Stockholders' Deficit $ 1,118,070 $ 1,308,125
============== ==============
DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31,
-----------------------------
2016 2015
-------------- --------------
REVENUES:
Project $ 229,123 $ 504,969
Maintenance and technical support 607,879 597,126
IT asset management services 167,241 -
-------------- --------------
Total Revenues 1,004,243 1,102,095
-------------- --------------
COST OF REVENUES:
Project 141,078 334,495
Maintenance and technical support 267,581 214,395
IT asset management services 77,758 -
-------------- --------------
Total Cost of Revenues 486,417 548,890
-------------- --------------
GROSS PROFIT 517,826 553,205
-------------- --------------
OPERATING EXPENSES:
Selling and marketing expenses 86,040 59,329
Salaries, wages and contract labor 886,167 589,627
Research and development 55,487 49,836
Professional fees 77,229 90,305
General and administrative expenses 180,285 128,639
-------------- --------------
Total Operating Expenses 1,285,208 917,736
-------------- --------------
LOSS FROM OPERATIONS (767,382) (364,531)
OTHER INCOME (EXPENSES):
Interest expense (72,305) (391,094)
Gain on settlement of accounts payable - 3,200
Other income, net 1,306 1
-------------- --------------
Total Other Income (Expense) (70,999) (387,893)
-------------- --------------
Loss before income taxes (838,381) (752,424)
Income tax - -
-------------- --------------
NET LOSS (838,381) (752,424)
Preferred stock dividends - -
-------------- --------------
Net loss applicable to common stock $ (838,381) $ (752,424)
============== ==============
NET LOSS APPLICABLE TO COMMON STOCK PER COMMON
SHARE:
Basic $ (0.01) $ (0.01)
============== ==============
Diluted $ (0.01) $ (0.01)
============== ==============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 65,655,807 57,738,209
============== ==============
Diluted 65,655,807 57,738,209
============== ==============
DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
March 31,
-----------------------------
2016 2015
-------------- --------------
Cash from operating activities:
Net loss $ (838,381) $ (752,424)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 12,099 12,596
Gain on settlement of accounts payable - 3,200
Stock and warrants issued for services 95,036 -
Loss on conversion of notes payable included
in interest expense - 352,093
Amortization of stock based prepaid consulting
fees 198,068 -
Loss related to warrants exchanged for stock 630 -
Changes in assets and liabilities:
Accounts receivable 314,797 (580,739)
Costs and estimated earnings on uncompleted
contracts (13,175) (74,617)
Prepaid expenses and other current assets (45,336) (67,017)
Accounts payable 118,522 333,672
Accounts payable-related party 11,135 (9,269)
Interest from premium accretion on
convertible notes - 10,384
Payroll taxes payable 160,153 (34,520)
Accrued expenses 77,114 54,322
Billings in excess of costs and earnings on
uncompleted contracts 116,984 714,042
Deferred revenue (298,890) (256,538)
-------------- --------------
Net cash used in operating activities (91,245) (294,815)
Cash flows from investing activities:
Purchase of patents/trademarks (70) (1,600)
Purchase of fixed assets (19,029) (1,897)
-------------- --------------
Net cash used in investing activities (19,099) (3,497)
-------------- --------------
Cash flows from financing activities:
Bank overdraft 3,604 13,534
Proceeds from related party notes 50,000 118,500
Repayments of related party notes (41,178) -
Proceeds (repayments) of insurance and
equipment financing (34,461) 10,000
Proceeds (repayments) of notes payable (7,500) 71,093
-------------- --------------
Net cash (used in) provided by financing
activities (29,535) 213,127
-------------- --------------
Net decrease in cash (139,879) (85,185)
Cash, beginning of period 140,129 85,435
-------------- --------------
Cash, end of period 250 250
============== ==============
Supplemental Disclosure of Cash Flow
Information:
Interest paid $ 5,969 $ 22,129
============== ==============
Taxes paid $ - $ 800
============== ==============
Supplemental Non-Cash Investing and Financing
Activities:
Stock issued to convert convertible notes and
accrued interest $ - $ 1,415,546
============== ==============
Common stock issued for prepaid consulting
services $ 273,600 $ -
============== ==============
Common stock issued to settle accounts payable $ - $ 16,800
============== ==============
Write-off balance of put premium liability
related to convertible notes $ - $ 37,120
============== ==============
Note issued for financing of insurance
premiums $ 123,580 $ -
============== ==============
Contacts:
Corporate
Jean Martin
904-652-1601
jmm@duostech.com
Investors Relations
Adrian Goldfarb
904-652-1616
agg@duostech.com
Hayden IR
646-536-7331
brett@haydenir.com
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