JACKSONVILLE, Fla., Aug. 14, 2018 (GLOBE NEWSWIRE) — Duos Technologies Group, Inc. (“Duos” or the “Company”) (OTCQB: DUOT), a provider of advanced intelligent security and analytical technology solutions, reported financial results for the second quarter ended June 30, 2018.
Second Quarter 2018 and Recent Operational Highlights
- Awarded multi-million-dollar contract from CN, a leading North American Class-1 transportation and logistics company (NYSE: CNI), to implement new measures targeted at preventative maintenance, improved reliability, dwell reduction and overall performance
- Deployment of $3+ million contract with one of the nation’s largest retail chains to streamline and automate gatehouse operations across the corporation’s national distribution centers, delivering significant operational efficiencies for a rapid return on investment
- Opened “Engineering and Operations Center of Excellence” facility to be used for pre-assembly and testing of Duos’ proprietary intelligent technologies and sub-systems as well as to house its rapidly growing engineering and operations teams
- Launched proprietary dcVue™ software platform, which is designed to enable automation and mobile verification of large data center IT assets, supporting the Company’s potential for future growth into adjacent and new industries
Second Quarter 2018 Financial Results
Total revenue increased 179% to a record $3.2 million from $1.2 million in the same quarter last year. The significant increase in total revenue was driven by an increase in project revenue, which was offset by decreases in both maintenance and technical support as well as IT asset management services revenues. The increase in project revenue is a result of the Company’s ongoing transition to new offerings, including intelligent analytics and machine learning, from traditional legacy security-centric offerings.
Gross profit increased 118% to $1.3 million from $577,000 in the same quarter last year. The increase in gross profit was due to the increase in project revenues as discussed above. On a “like for like” comparison to the equivalent quarter in 2017, gross profit in 2018 was impacted by certain accounting changes related to the implementation of Accounting Standards Codification (ASC) 606. The Company anticipates these profits will be recorded later in the year and, therefore, the current quarter’s accounting changes will have no material impact on the results for the full year.
Operating expenses increased 39% to $1.9 million from $1.4 million in the same quarter last year. The increase in operating expenses was mainly due to a non-cash expense for incentive stock options granted in the quarter. Excluding this amount, operating expenses increased by less than 10% on a cash basis.
Net loss totaled $634,000 or $(0.03) per share, an improvement from net loss of $1.3 million, or $(0.70) per share, in the same quarter a year-ago. The improvement in net loss was primarily attributable to the non-cash charges in 2017 of $832,690 in debt discount expense and $295,061 warrant derivative gain on debt related to debt financing. On an adjusted EBITDA basis, the net loss for the second quarter of 2018 was $203,000 where the non-cash compensation expense is excluded along with interest costs, depreciation and amortization.
For the fiscal year ending December 31, 2018, the Company has increased its revenue outlook to $10.1 million from $9.3 million, which would represent an approximate 160% increase as compared to the $3.9 million reported revenue in the fiscal year ended December 31, 2017. The Company’s guidance is based on numerous contracts in backlog that are already performing and scheduled to be executed during or before the fourth quarter of 2018. Management also anticipates receiving additional awards over the course of 2018.
“Our record performance in the second quarter represented a successful milestone in our long-term plan to significantly scale our business,” said Duos Chairman and CEO Gianni Arcaini. “In addition to growing our topline nearly 180%, we also made meaningful strides toward our goal of achieving GAAP profitability despite certain non-cash compensation charges that we recognized in the quarter. With the opening of our new engineering and operations facility, we can continue efficiently and organically expanding our operations to meet our current needs as well as our future growth plans.
“As a result of the ongoing success of our operations and increasing business momentum, we are increasing our revenue outlook to approximately $10.1 million in 2018, an approximate 160% increase as compared to the $3.9 million reported revenue in the fiscal year ended December 31, 2017. With our core technology now fully developed and ready to deploy, we anticipate this growth to continue as we win new business and begin deployments throughout the remainder of the year and beyond.”
Duos Technologies management will host a conference call on Tuesday, August 14 at 11:00 a.m. Eastern time (8:00 a.m. Pacific time) to discuss these results, followed by a question and answer period.
Date: Tuesday, August 14, 2018
Time: 11:00 a.m. Eastern time (8:00 a.m. Pacific time)
U.S. dial-in: (888) 339-2688
International dial-in: (617) 847-3007
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Matt Glover or Tom Colton at Liolios at (949) 574-3860.
The conference call will be broadcast live and available for replay via the investor section of the Company’s website here.
About Duos Technologies Group Inc.
Duos Technologies Group, Inc. (OTCQB: DUOT), based in Jacksonville, FL, through its wholly owned subsidiary, Duos Technologies, Inc., provides advanced intelligent security and analytical technology solutions with a strong portfolio of intellectual property. Duos Technologies’ core competencies include intelligent technologies that combine machine learning, artificial intelligence and advanced video analytics that are delivered through its proprietary integrated enterprise command and control platform, centraco®. The Company provides its broad range of technology solutions with an emphasis on mission critical security, inspection and operations within the rail transportation, retail, petrochemical, government, and banking sectors. Duos Technologies Group also offers professional and consulting services for large data centers. For more information, visit www.duostech.com.
Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” and their opposites or similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks, uncertainties and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based and could cause Duos Technologies Group, Inc.’s actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Duos’ Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Duos’ filings with the SEC.