Brekford Announces Second Quarter Operating Results
/EINPresswire.com/ -- HANOVER, MD -- (Marketwired) -- 08/15/16 -- Brekford Corp. (OTCQX: BFDI), a leading public safety and security technology service provider of automated traffic safety enforcement ("ATSE") solutions, parking enforcement solutions, and an end-to-end suite of technology equipment for public safety vehicle services, today announced its operating results for the second quarter of 2016.
Second Quarter Financial Highlights
- Revenue increased to approximately $4.6 million, compared to $3.7 million in the same period of 2015;
- Gross profit margin declined to 22.8%, compared to 28.9% in the same period of 2015;
- ATSE services gross margin decreased to 60.0%, compared to 73.3% in the same period of 2015;
- Vehicle services gross margin increased to 17.2%, compared to 16.7% in the same period of 2015;
- Operating expenses increased to $899,995, compared to $861,643 in the same period of 2015;
- Net income increased to a positive $20,841, compared to a loss of $28,605 in the same period of 2015.
Second Quarter Operational Highlights
- Launched program operations in Calvert County, Maryland with first three systems initiating warning period;
- Expanded operations in New Rochelle, New York with two additional red light cameras;
- Delivered approximately 100 Panasonic Arbitrator® BWC body-worn camera cameras to new clients in Maryland for pilot projects;
- Filed provisional patent application with the United States Patent and Trademark Office relating to automated detection and photo enforcement of distracted driving violations.
Management Comments
"Operating results for the second quarter of 2016 showed improvement as we have continued to stay the course in implementing our expansion efforts," commented Rod Hillman, President and Chief Operating Officer of Brekford Corp. "We had a 26% revenue increase as compared to the same quarter in 2015, and our net income turned positive as we continue to control costs while ramping up business development efforts for our vehicle services and ATSE products. In addition to shifting focus to significant markets in Washington D.C., Virginia, and federal government agencies, we have started a project to streamline shop operations in anticipation of increased installation orders. Our sales order pipeline remained strong at approximately $2.2 million as of June 30, 2016."
"Our ATSE turnkey photo enforcement services are beginning to see traction as two additional red light cameras were installed in New Rochelle, New York, and we also deployed and went live with the first three speed cameras in Calvert County, Maryland. We are excited about further prospects for expansion in 2016 as we await decisions from agencies on several large program proposals submitted over the past few months. We are actively pursuing a number of new initiatives in the U.S. and Latin America, and are hopeful to be able to secure contracts in the coming months. Unfortunately we cannot control the timing of the decision making process, especially with larger agencies and cities."
"In addition to delivering what we believe is the best speed and red light enforcement technology in the industry; we are looking to the future to be able to commercially launch our patent pending electronic distracted driving camera, when municipalities and states begin to pass legislation enabling the service. And finally, we continue to work hard promoting Panasonic's Arbitrator BWC body worn camera solution to our existing customers who already have compatible in-car cameras and video evidence management solutions. This year we have delivered systems to several large agencies in Maryland who are conducting pilot studies prior to full scale implementation," concluded Hillman.
Saltillo, Mexico Developments
The Company continues to diligently work with the City of Saltillo and our partner company in Mexico to improve collections efforts for our first international program, launched in April 2015. We have discussed a number of steps that need to be taken in order to ensure sufficient enforcement and collections. These measures include vehicle checkpoints monitored by automated license plate readers and door-to-door collections as well as establishing agreements from neighboring states to authorize vehicle registration holds, requiring registered owners to pay outstanding fines in order to receive their annual vehicle registration renewal.
Brekford is not yet comfortable that appropriate measures have been implemented; however, we still believe that improved collection rates are attainable. We will be meeting with officials from the City in the near future to specifically define an achievable financial outcome for the program, which has been operationally successful in reducing deaths and accidents caused by speeding on City roads. At this time, the Company is not able to predict when, or if, these collection efforts will be successful. Until the collection efforts begin to produce desired results, we have decided not to deploy additional cameras beyond the 16 currently in operation.
About Brekford Corp.
Brekford Corp. provides state-of-the art public safety technology and automated traffic enforcement solutions to municipalities, the U.S. military, various federal entities and other public safety agencies throughout the United States. Its services include automated speed and red light camera enforcement programs, parking enforcement solutions and an end-to-end suite of technology and equipment for public safety vehicle upfitting. Brekford's combination of upfitting services, cutting-edge technology, and automated traffic enforcement services offers a unique 360-degree solution for law enforcement agencies and municipalities.
The Company is headquartered in Hanover, Maryland, and its common stock is traded on the OTC Markets under the symbol "BFDI." Additional information on Brekford can be accessed online at www.brekford.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of that term in Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "expect," "project," "intend," "plan," "believe," "target," "aim," "should," and words and terms of similar substance and any financial projections used in connection with any discussion of future plans, strategies, objectives, actions, or events identify forward-looking statements. Forward-looking statements include, among others, those concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These statements are based on the beliefs of our management as well as assumptions made by and information currently available to us and reflect our current views concerning future events. As such, they are subject to risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: the risk that any projections, including earnings, revenues, expenses, synergies, margins or any other financial items that form the basis for management's plans and assumptions are not realized; a reduction in industry profit margin; requirements or changes affecting the business in which we are engaged; our ability to successfully implement new strategies; operating hazards; competition and the loss of key personnel; changing interpretations of generally accepted accounting principles; continued compliance with government regulations; changing legislation and regulatory environments; and the general volatility of the market prices of our securities and general economic conditions. Readers are referred to the documents filed by Brekford Corp. with the SEC, specifically the Company's most recent reports filed on Form 10-K and Forms 10-Q, which further identify important risks, trends and uncertainties which could cause actual results to differ materially from the forward-looking statements in this press release. Brekford Corp. expressly disclaims any obligation to update any forward-looking statements.
Contact:
C. B. Brechin
CEO
(443) 557-0200
investors@brekford.com
(Financial Highlights Follow)
Brekford Corp.
Condensed Consolidated Statements of Operations and Comprehensive loss
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2016 2015 2016 2015
------------- ------------- ------------ ------------
NET REVENUE $ 4,631,727 $ 3,663,413 $ 7,712,853 $ 8,809,592
COST OF REVENUE 3,574,167 2,603,951 6,043,038 6,824,538
------------ ------------ ----------- -----------
GROSS PROFIT 1,057,560 1,059,462 1,669,815 1,985,054
------------ ------------ ----------- -----------
OPERATING EXPENSES
Salaries and related
expenses 524,668 456,042 1,004,528 996,263
Selling, general and
administrative
expenses 375,327 405,601 786,666 866,986
------------ ------------ ----------- -----------
TOTAL OPERATING
EXPENSES 899,995 861,643 1,791,194 1,863,249
------------ ------------ ----------- -----------
INCOME (LOSS) FROM
OPERATIONS 157,565 197,819 (121,379) 121,805
OTHER (EXPENSE) INCOME
Interest expense (168,949) (195,344) (320,977) (293,266)
Change in fair value
of derivative
liability 71,148 (31,080) 70,308 15,708
Loss on extinguishment
of debt (38,923) -- (161,395) --
------------ ------------ ----------- -----------
TOTAL OTHER (EXPENSE)
INCOME (136,724) (226,424) (412,064) (277,518)
------------ ------------ ----------- -----------
NET (LOSS) INCOME $ 20,841 $ (28,605)$ (533,443)$ (155,713)
============ ============ =========== ===========
OTHER COMPREHENSIVE
LOSS - foreign
currency translation (1,437) (1,477) (1,437) (1,477)
============ ============ =========== ===========
COMPREHENSIVE INCOME
(LOSS) 19,404 (30,082) (534,880) (157,190)
============ ============ =========== ===========
INCOME (LOSS) PER
SHARE - BASIC AND
DILUTED $ 0.00 $ (0.00)$ (0.01)$ (0.00)
============ ============ =========== ===========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING - BASIC 46,454,266 44,632,569 45,876,068 44,628,923
============ ============ =========== ===========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING - DILUTED 54,148,048 44,632,569 45,876,068 44,628,923
============ ============ =========== ===========
Brekford Corp.
Condensed Consolidated Balance Sheets (Unaudited)
June 30, December 31,
2016 2015
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 446,444 $ 580,400
Accounts receivable, net of allowance of $0 at
June 30, 2016 and December 31, 2015 2,879,662 3,781,263
Unbilled receivables 816,748 304,470
Prepaid expenses 56,610 71,740
Inventory 590,533 606,471
------------ ------------
Total current assets 4,789,997 5,344,344
Property and equipment, net 187,363 223,347
Other non-current assets 97,902 179,208
------------ ------------
TOTAL ASSETS $ 5,075,262 $ 5,746,899
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,007,069 $ 2,979,131
Accrued payroll and related expenses 44,290 98,000
Line of credit, net of fees 2,147,843 1,402,380
Term loan - current portion, net of fees 41,667 166,667
Deferred revenue 97,133 95,233
Customer deposits 13,573 36,070
Obligations under other notes payable -
current portion 27,070 29,277
Derivative liability 28,728 99,036
Other liabilities 46,179 46,979
------------ ------------
Total current liabilities 4,453,552 4,952,773
------------ ------------
LONG - TERM LIABILITIES
Notes payable - stockholders 500,000 500,000
Other notes payable - net of current portion,
net of fees 9,271 21,660
Deferred rent, net of current portion 44,406 44,923
Convertible promissory notes, net of debt
discounts and issuance costs of $192,911 and
$418,731 at June 30, 2016 and December 31,
2015, respectively 297,089 221,269
------------ ------------
Total long-term liabilities 850,766 787,852
------------ ------------
TOTAL LIABILITIES 5,304,318 5,740,625
------------ ------------
STOCKHOLDERS' (DEFICIT) EQUITY
Preferred stock, par value $0.0001 per share;
20,000,000 sharesauthorized; none issued and
outstanding -- --
Common stock, par value $0.0001 per share;
150,000,000 shares authorized; 46,941,992 and
45,151,254 issued and outstanding, at June
30, 2016 and December 31, 2015, respectively 4,695 4,515
Additional paid-in capital 11,249,399 10,951,491
Treasury Stock, at cost 10,600 shares at June
30, 2016 and December 31, 2015 respectively (5,890) (5,890)
Accumulated deficit (11,475,823) (10,942,380)
Other comprehensive loss (1,437) (1,462)
------------ ------------
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY (229,056) 6,274
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY $ 5,075,262 $ 5,746,899
============ ============
Contact:
C. B. Brechin
CEO
(443) 557-0200
investors@brekford.com
