Exhibit 99.1
Digital Recorders, Inc. Announces
Multiple Orders in European Business Units; CEO Addresses
Profitability Improvement Actions
DALLAS--(BUSINESS WIRE)--December 13, 2005--Digital Recorders,
Inc. (DRI) (Nasdaq:TBUS), a technology leader in transit,
transportation, law enforcement, and security digital communications
systems, announced today its Mobitec AB (Mobitec) business unit in
Sweden and its Mobitec GmbH (formerly known as Transit Media-Mobitec
GmbH) business unit in Germany have received three orders totaling
more than $1.5 million (USD).
-- Asia Transport Ltd. of Jordan has ordered more than 130
MobiDOT electronic destination sign systems to retrofit its
fleet. Product delivery is scheduled to commence in December
2005 and conclude in first quarter 2006.
-- Daewoo of Korea has ordered more than 160 MobiDOT electronic
destination sign systems on behalf of the Kuwait Public
Transport Company in Kuwait. Product delivery is scheduled to
begin and conclude in first quarter 2006.
-- In Sweden, Vast Traffic has ordered for its transit fleet more
than 500 interior passenger information display systems using
Vacuum Florescent Display (VFD) technology and featuring high
resolution. Product delivery is scheduled to commence in
second quarter 2006 and conclude in fourth quarter 2006.
"Two of these three orders came from Middle Eastern customers
where Mobitec is exhibiting its products at this week's Dubai "Gulf
Traffic and MENA (Middle East and North Africa) Rail Exhibition" where
more than 170 exhibitors are participating in this first-ever
exhibition of this magnitude in the region. The orders for Jordan and
Kuwait will contribute to our already large market position in the
Middle East and may position us for other upcoming order opportunities
in an area where we see positive trends in the market. The VFD
technology order in Sweden is notable because it is a different type
of display than our traditional products - an application developed
especially for the customer that broadens our served-market
participation. We commend our Mobitec team for further strengthening
our stronghold with transit properties in the Middle East and also for
further advancing our served-market expansion," David L. Turney, the
Company's Chairman, Chief Executive Officer, and President, said.
Profitability Improvement Actions
"In our ongoing effort to improve results and reduce costs in a
challenging and competitive industry environment, as we have stated in
the past, we have initiated and implemented a number of operational,
administrative, procedural, and organizational changes in the last
several years as we continue our focus on profitability and strategic
growth opportunities," Mr. Turney said.
For historical perspective, Mr. Turney notes the following as a
sequential summary of the operational, administrative, procedural, and
organizational changes implemented by the Company in recent years to
improve profitability and potentially enhance shareholder value.
-- In June 2002, the Company announced the merger of certain
international operations to eliminate redundancies and improve
efficiencies.
-- In 2003, the Company successfully pursued cost and expense
reductions and reported in its Form 10-K that approximately
$400,000 in annualized savings had been achieved as of early
2004; additional annualized savings of substantially larger
magnitude have been achieved since that time.
-- In July 2004, the Company announced the termination of its
shareholder rights plan.
-- In September 2004, the Company announced the replacement of
its independent public accounting and auditing firm, a change
that provided the Company with additional international
expertise within the audit firm.
-- In October 2004, the Company announced two key staff changes,
including the appointment of David N. Pilotte as Vice
President and Chief Financial Officer.
-- In February 2005, the Company announced that Rob R. Taylor had
been hired to help develop and market integrated video
surveillance products and services as part of DRI's long-term
business plans.
-- In April 2005, the Company announced an expanded strategic
focus on security products.
-- In June 2005, the Company's shareholders approved the Board of
Directors' recommendation that staggered three-year terms of
Directors be phased out in favor of one-year terms.
-- In August 2005, the Company announced the appointment of
William F. Fay Jr. as Vice President and General Manager of
the TwinVision na, Inc. business unit, which is now benefiting
from Mr. Fay's substantial public transit and private operator
bus-vehicle market knowledge and experience.
-- In November 2005, the Company announced the reorganization of
certain engineering functions to bring about increased
efficiencies through better communication and
cross-utilization of resources.
-- In December 2005, the Company announced key staff changes,
including Mr. Pilotte's promotion to Executive Vice President
and his additional role as Chief Operating Officer of North
Carolina Operations, as well as the establishment of a Special
Committee of the DRI Board of Directors to provide special
oversight and guidance to Mr. Pilotte during this drive to
sustained profitability.
-- In December 2005, also in connection with key staff changes,
the Company announced that a Chief Technology Officer role was
created and assumed by Lawrence A. Hagemann, a long-time DRI
Executive Vice President and experienced engineer, to find,
manage, and improve access to technologies that may contribute
to DRI's profitability efforts.
-- In the past three years, strategic alliances have been
initiated with firms having expertise and capabilities that
compliment DRI's market position and capabilities, including
General Electric and Verint Systems Inc.
"While recognizing the positive impact of these actions, we remain
dissatisfied with our progress toward profitability. We believe that
more can and should be done to achieve sustained profitability, and we
will continue to work diligently to ensure a positive outcome for the
Company and all of its stakeholders. Accordingly and as in the past,
we remain alert for alliances, ventures, relationships, acquisitions
and mergers, as well as virtually any other positive and reasonable
form of advancing the value of this Company," Mr. Turney said.
As previously reported, Mr. Turney said the delay in U.S. federal
funding reauthorization has depressed the market and impeded the
Company's 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, will hopefully
mitigate this obstacle in future periods.
"According to our revised and updated strategic business plans,
and as previously reported, the Company is positioned to potentially
reach the $85 million to $95 million range in an annual sales run rate
by the end of 2008. We continue to believe that this
long-sought-but-slow-to-materialize range of increasing revenue should
bring profitability. I remain optimistic about our long-term trends
and indications," Mr. Turney said.
Mr. Turney's optimism is based on the following points:
-- After more than two years of delay and uncertainty, the U.S.
transit market now has federal funding in place in the form of
SAFETEA-LU;
-- The Company has now enhanced, developed, demonstrated, and
sold additional security functionality through its core
products, which should position DRI to benefit from further
served-market focus on security concerns and vulnerabilities
such as those brought to light in Madrid and London;
-- The Company's served markets continue to expand, which is
incrementally providing better insulation against the
inevitable and periodic unpredictability and instability in
some market sectors; and
-- The Company's newly revised strategic business plans reflect
the possibility of revenue increasing into the $85 million to
$95 million range in an annual sales run rate by the end of
2008 thanks to new served markets, new products, new
strategies, and the increased focus on security-related market
opportunities.
"While the basis for my optimism is clear, I must again caution
that we do not expect material, short-term, positive impacts to be
significant. My optimism is longer term in nature. More specifically,
we do not expect many of our recent efforts to have a material
positive impact on the bottom line until toward the latter part of
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 may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Any statement, express or implied, concerning future events or
expectations, including the expected timing of order deliveries, the
expected display and customer acceptance of products, expected results
from changes meant to improve profitability, the effect of the passage
of H.R. 3058, is a forward looking statement. Use of words such as
"expect," "fully expect," "expected," "appears," "believe," "plan,"
"anticipate," "would," "will," "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 that the assumptions behind the
timing and amount of expected revenues and product deliveries may not
prove accurate over time, the risks and uncertainties that changes
made will positively impact profitability, the risks and uncertainties
that the factors cited as providing optimism will in fact prove to be
reliable indicators of improved profitability, 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: Digital Recorders, Inc., Dallas
Veronica B. Marks, 214-378-4776
Fax: 214-378-8437
veronicam@digrec.com
or
The Investor Relations Company
Investor Relations Contact
Brien Gately, 800-536-8472
Fax: 847-296-4460
bgately@tirc.com