Exhibit 99.1
Press Release Dated December 5, 2005
Digital Recorders, Inc. Announces Additional Profit Improvement Actions
DALLAS--(BUSINESS WIRE)--Dec. 5, 2005--Digital Recorders, Inc. (Nasdaq:
TBUS):
-- Strategic Changes in Key Personnel Announced
-- U.S. Federal Funding Appropriations Increasing
Digital Recorders, Inc. (DRI) (Nasdaq:TBUS), a technology leader in
transit, transportation, law enforcement, and security digital communications
systems, announced today that specific additional actions have been taken to
accelerate and strengthen its efforts to attain sustained profitability through
strategic changes in key personnel and the establishment of a Special Committee
of the DRI Board of Directors.
David N. Pilotte, the Company's Vice President and Chief Financial Officer
(CFO) since October 2004, has been elected Executive Vice President and will
assume the additional duties of Chief Operating Officer (COO) of North Carolina
Operations. In his expanded role as COO, Mr. Pilotte will report directly to the
Board of Directors through the Special Committee and, as CFO, he will continue
to report to David L. Turney, the Company's Chairman, Chief Executive Officer,
and President. Before joining DRI, Mr. Pilotte succeeded in senior executive
positions in other profitability attainment programs.
Lawrence A. Hagemann, the Company's Chief Operating Officer of North
Carolina Operations since August 2002 and a highly experienced engineer, will
now assume responsibilities of Chief Technology Officer (CTO). As CTO, he will
continue to report directly to Mr. Turney.
Mr. Turney stated that the Special Committee of the Board is comprised of
independent directors and was established to provide special oversight and
guidance to Mr. Pilotte during this drive to sustained profitability.
Mr. Turney said, "In our ongoing effort to reduce costs of sales and
operations in a challenging competitive and industry environment, we have
initiated and implemented a number of operational and organizational changes in
the past several years while continuing to focus DRI businesses on profitable
and strategic growth opportunities. While recognizing the positive impact of
these actions, we are not satisfied with our progress toward profitability. As
previously reported, the delay in U.S. federal funding reauthorization has
depressed the market and impeded our progress. However, the August 2005 passage
of the $286.4 billion transportation bill, The Safe, Accountable, Flexible,
Efficient Transportation Equity Act -- A Legacy for Users (SAFETEA-LU), as well
as recent positive appropriations actions, have mitigated this obstacle. We
believe that more can and should be done to achieve sustained profitability now.
Therefore, we have committed to these significant changes."
Transit Market Funding Appropriations
According to the American Public Transportation Association, both Houses of
Congress approved the conference agreement pertaining to the U.S. fiscal year
2006 appropriations bill (H.R. 3058) for the Departments of Transportation,
Treasury, Housing and Urban Development, the Judiciary, and independent agencies
before recessing for the Thanksgiving holiday on Friday, Nov. 18.
"H.R. 3058 provides $8.59 billion for federal transit programs during the
current fiscal year. This amount represents a $944 million increase, or 12.3
percent, over the current level. President George W. Bush is expected to sign
the bill soon. Once the bill is signed into law, the Federal Transportation
Administration must by law publish its apportionment of funds within 10 days,
and the U.S. fiscal year 2006 transit funds can begin to be made available.
However, given the relatively long contracting cycle in our market, we do not
expect these pending legislative actions to increase U.S. funding for our served
markets to begin having a material effect on our bottom line until mid-2006,"
Mr. Turney said.
About the Company
Digital Recorders, Inc. is a technology leader in transportation, law
enforcement, and security digital communications systems using proprietary
hardware and software applications. Our products improve the flow and mobility
of people through transportation infrastructure, mitigate security threats, and
enhance law enforcement agencies' surveillance capabilities. Our transportation
communications products -- TwinVision(R) and Mobitec(R) electronic destination
sign systems, Talking Bus(R) voice announcement systems, Internet-based
passenger information systems, and computer-aided dispatch/automatic vehicle
location and monitoring systems, and VacTell(TM) video actionable intelligence
systems -- enhance public transportation and mitigate security threats
worldwide. Our electronic surveillance tools, including microphone amplifiers
and processors, countermeasures devices, speech activity detectors, and noise
cancellation equipment, help law-enforcement agencies around the globe arrest
and prosecute criminals. For more information about DRI and its operations
worldwide, go to www.digrec.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. In particular,
statements concerning personnel changes, expected results, profitability, the
effect of the passage of H.R. 3058, as well as any statement, express or
implied, concerning future events or expectations is a forward-looking
statement. Use of words such as "expect," "fully expect," "expected," "appears,"
"believe," "plan," "anticipate," "would," "goal," "potential," "potentially,"
"range," "pursuit," "run rate," "stronger," "preliminarily," etc., is intended
to identify forward-looking statements that are subject to risks and
uncertainties, including risks and uncertainties that the assumptions behind
personnel changes and their expected positive impact, expected results, future
profitability, the risk that the passage of H.R. 3058 will not have a material
positive effect may not prove accurate over time, as well as other risks and
uncertainties set forth in our Annual Report on 10-K filed April 1, 2005,
particularly those identified in Risk Factors Affecting Our Business. There can
be no assurance that any expectation, express or implied, in a forward-looking
statement will prove correct or that the contemplated event or result will occur
as anticipated.
CONTACT: Company Contact
Digital Recorders, Inc., Dallas
Veronica B. Marks, 214-378-4776
Fax: 214-378-8437
E-Mail: veronicam@digrec.com
or
Investor Relations Contact
The Investor Relations Company
Brien Gately, 800-536-8472
Fax: 847-296-4460
E-Mail: bgately@tirc.com