Exhibit 99.1
DRI Corporation Posts $635,000 Profit for
Second Quarter 2007
-- Second Quarter Sales Reach Record High
-- Sales Reflect 14.9 Percent Increase Over Last Year's Same
Period Results
-- Seventh Consecutive Period of Improvement Over Same Quarter of
Previous Year
DALLAS--(BUSINESS WIRE)--August 14, 2007--DRI Corporation (DRI)
(NASDAQ: TBUS), a digital communications technology leader in the
domestic and international surface transportation and transit security
markets, announced today it posted net income of 6 cents per share
(basic and diluted) on $14.9 million in sales, an increase of 14.9
percent, in second quarter 2007, as compared to a net loss of 4 cents
per share (basic and diluted) on $13.0 million in sales for the same
period last year, exclusive of sales and income/loss from discontinued
operations.
When including the results of discontinued operations, the Company
posted net income of 6 cents per share (basic and diluted) in second
quarter 2007, as compared to a net loss of 2 cents per share (basic
and diluted) for the same period last year.
"Our record high revenue and improved operating results in second
quarter 2007 mark the seventh consecutive period of improvement when
compared to the same quarter of the previous year. Our internal work
to reduce costs and expenses, combined with our increasing revenue, is
continuing to help build the trend toward a profitable fiscal year
2007. Our backlog also is strong, further underscoring that trend.
Given the improvement in our domestic market, the expected growth
derived from our international market initiatives, and the impact of
cost reductions and expense controls that we expect to continue
achieving, we anticipate posting a profit for fiscal year 2007," David
L. Turney, the Company's Chairman, President, and Chief Executive
Officer, said.
On Aug. 14, 2007, the Company filed with the Securities and
Exchange Commission a Form 10-Q for the quarter and six months ended
June 30, 2007.
SECOND QUARTER 2007 RESULTS
For the quarter ended June 30, 2007, sales of continuing
operations increased by 14.9 percent to $14.9 million and the net
income to common shareholders was $635 thousand, or 6 cents per share
(basic and diluted) - inclusive of a loss $42 thousand from
discontinued operations. This compares to sales of $13.0 million and a
net loss to common shareholders of $243 thousand for the same period
last year, or 2 cents per share (basic and diluted). Last year's
results are inclusive of income of $160 thousand, or 2 cents per share
(basic and diluted), from discontinued operations. Weighted-average
shares outstanding were 10.5 million (basic) and 12.4 million
(diluted), as compared to 9.8 million (basic and diluted) a year ago.
For the six months ended June 30, 2007, sales of continuing
operations increased by 13.4 percent to $26.9 million and the net loss
to common shareholders was $211 thousand, or 2 cents per share (basic
and diluted) - inclusive of a loss of $219 thousand, or 2 cents per
share (basic and diluted), from discontinued operations. This compares
to sales of $23.7 million and a net loss to common shareholders of
$1.1 million, or 11 cents per share (basic and diluted), for the same
period last year. Last year's results are inclusive of income of $121
thousand, or 1 cent per share (basic and diluted), from discontinued
operations. Weighted-average shares outstanding for the six-month
period were 10.3 million (basic and diluted), as compared to 9.8
million (basic and diluted) a year ago.
As of June 30, 2007, the Company had $4.4 million in working
capital and $17.8 million in shareholders' equity. This compares to
$3.6 million in working capital and $17.2 million in shareholders'
equity as of Dec. 31, 2006.
OUTLOOK
"We have seen several legislative actions that have strengthened
our prospects in the domestic markets in recent weeks. First, new
legislation out of the Homeland Security sector set authorized levels
over four years at $3.4 billion. Second, the appropriated funds for
federal fiscal year 2008 reached $400 million, an increase of $125
million over the previous year. Third, the proposed appropriation for
the surface mass transportation sector is at a record high $9.5
billion to $9.7 billion. In addition, we have opened new served
markets such as our recently announced joint venture in India.
Overall, our market trends are strong. We expect to report a profit
for fiscal year 2007," Mr. Turney said.
CONFERENCE CALL INFORMATION
The Company's senior management will discuss second quarter 2007
financial results, as well as the 2007 outlook, during an investors'
conference call today, Aug. 14, 2007, at 1 p.m. (Eastern).
To participate in the conference call, dial one of the following
telephone numbers at least five minutes prior to the start time:
Domestic, (888) 868-9080; or International, (973) 935-8511.
Telephone replay will be available through Nov. 14, 2007, via the
following telephone numbers: Domestic, (877) 519-4471 (Code 9106427);
or International, (973) 341-3080 (Code 9106427).
To participate via webcast, go to
http://www.viavid.net/detailpage.aspx?sid=00004348. The webcast will
be archived for 90 days.
ABOUT THE COMPANY
DRI is a digital communications technology leader in the domestic
and international public transportation and transit security markets.
Our products include: TwinVision(R) and Mobitec(R) electronic
destination sign systems, Talking Bus(R) voice announcement systems,
Digital Recorders(R) Internet-based passenger information and
automatic vehicle location/monitoring systems, and VacTell(TM) video
actionable intelligence systems. Our products help increase the
mobility, flow, safety, and security of people who rely upon
transportation infrastructure around the globe. Using proprietary
hardware and software applications, our products provide
easy-to-understand, real-time information that assists users and
operators of transit bus and rail vehicles in locating, identifying,
boarding, tracking, scheduling, and managing those vehicles. Our
products also aid transit vehicle operators in their quest to increase
ridership and reduce fuel consumption, as well as to identify and
mitigate security risks on transit vehicles. Positioned not only to
serve and address mobility, energy conservation, and environmental
concerns, our products also serve the growing U.S. Homeland Security
market. For more information about the Company 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,
including without limitation, statements concerning the improvements
in the Company's domestic market; statements concerning the Company's
expected growth from its international market initiatives; statements
concerning the impact of cost reductions and expense controls that the
Company expects to continue achieving; statements concerning the
expected outcome for the Company's backlog of orders and revenue
trends; statements concerning the timing or amount of future revenues
and achieving profitability in fiscal year 2007; statements concerning
the timing or amount of federal transit and transit security funding;
statements concerning the Company's new served markets and orders;
statements about the perceived strength of current and prospective
market trends; as well as any statements using words such as "expect,"
"fully expect," "expected," "appears," "believe," "plan,"
"anticipate," "would," "goal," "potential," "potentially," "range,"
"pursuit," "run rate," "stronger," "preliminarily," etc. These
forward-looking statements are subject to risks and uncertainties,
including risks and uncertainties pertaining to the Company's actual
performance in both domestic and international markets; risks that the
Company may not achieve its expected growth from its strategic
initiatives; risks that anticipated cost reductions and expense
controls may not provide the benefits the Company expects; risks and
uncertainties pertaining to the expected outcome for the Company's
backlog of orders and revenue trends; risks and uncertainties
pertaining to the timing or amount of future revenues; risks that we
may not achieve profitability in fiscal year 2007; risks and
uncertainties pertaining to the timing or amount of federal transit
and transit security funding; risks and uncertainties pertaining to
the Company's new served markets and orders; as well as other risks
and uncertainties set forth in our Annual Report on Form 10-K filed
March 28, 2007, particularly those identified in Risk Factors
Affecting Our Business, as those are supplemented by our subsequent
quarterly reports on Form 10-Q. 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.
DRI CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
June 30, 2007 December 31, 2006
(Unaudited)
------------- -----------------
ASSETS
Current Assets
Cash and cash equivalents $ 422 $ 611
Trade accounts receivable, net 12,476 10,100
Current portion of note
receivable 86 -
Other receivables 391 147
Inventories 8,985 9,057
Prepaids and other current assets 433 422
Assets of discontinued operations - 1,728
------------- -----------------
Total current assets 22,793 22,065
------------- -----------------
Property and equipment, net 2,688 2,906
Long-term portion of note receivable 258 -
Goodwill 10,303 10,289
Intangible assets, net 1,106 1,110
Deferred tax assets, net 191 191
Other assets 554 797
------------- -----------------
Total assets $ 37,893 $ 37,358
============= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Lines of credit $ 7,408 $ 7,608
Notes payable, net 500 1,584
Current portion of long-term debt 250 254
Current portion of foreign tax
settlement 452 393
Accounts payable 5,192 5,560
Accrued expenses 4,584 2,921
Preferred stock dividends payable 17 23
Liabilities of discontinued
operations - 74
------------- -----------------
Total current liabilities 18,403 18,417
------------- -----------------
Long-term debt and capital leases,
long-term 33 42
------------- -----------------
Foreign tax settlement, long-term 1,120 1,087
------------- -----------------
Deferred tax liabilities 289 383
------------- -----------------
Minority interest in consolidated
subsidiary 264 234
------------- -----------------
Commitments and contingencies
Shareholders' Equity
Series E Redeemable, Nonvoting,
Convertible Preferred Stock,
$.10 par value,
liquidation preference of
$5,000 per share; 500 shares
authorized; 127 and 183
shares issued and outstanding
at June 30, 2007, and
December 31, 2006,
respectively; redeemable at
the discretion of the Company
at any time. 215 495
Series G Redeemable, Convertible
Preferred Stock, $.10 par value,
liquidation preference of
$5,000 per share; 600 shares
authorized; 394 and 379
shares issued and outstanding
at June 30, 2007 and December
31, 2006, respectively;
redeemable at the discretion
of the Company after five
years from date of issuance. 1,688 1,613
Series H Redeemable, Convertible
Preferred Stock, $.10 par value,
liquidation preference of
$5,000 per share; 600 shares
authorized; 57 and 54 shares
issued and outstanding at
June 30, 2007, and December
31, 2006, respectively;
redeemable at the discretion
of the Company after five
years from date of issuance. 237 222
Series I Redeemable, Convertible
Preferred Stock, $.10 par value,
liquidation preference of
$5,000 per share; 200 shares
authorized; 0 and 104 shares
issued and outstanding at
June 30, 2007, and December
31, 2006, respectively;
redeemable at the discretion
of the Company after five
years from date of issuance. - 471
Series J Redeemable, Convertible
Preferred Stock, $.10 par value,
liquidation preference of
$5,000 per share; 250 shares
authorized; 90 and 0 shares
issued and outstanding at
June 30, 2007, and December
31, 2006, respectively;
redeemable at the discretion
of the Company at any time. 388 -
Series AAA Redeemable, Nonvoting,
Convertible Preferred Stock,
$.10 par value,
liquidation preference of
$5,000 per share; 20,000
shares authorized; 178 shares
issued and outstanding at
June 30, 2007 and December
31, 2006; redeemable at the
discretion of the Company at
any time. 890 890
Common stock, $.10 par value,
25,000,000 shares authorized;
11,045,386 and
10,045,675 shares issued and
outstanding at June 30, 2007
and December 31, 2006,
respectively. 1,105 1,004
Additional paid-in capital 32,181 31,517
Accumulated other comprehensive
income - foreign currency
translation 3,561 3,397
Accumulated deficit (22,481) (22,414)
------------- -----------------
Total shareholders' equity 17,784 17,195
------------- -----------------
Total liabilities and
shareholders' equity $ 37,893 $ 37,358
============= =================
DRI CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(In thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2007 2006 2007 2006
----------- ---------- ----------- ----------
Net sales $ 14,885 $ 12,960 $ 26,885 $ 23,714
Cost of sales 9,895 8,815 18,218 16,235
----------- ---------- ----------- ----------
Gross profit 4,990 4,145 8,667 7,479
----------- ---------- ----------- ----------
Operating expenses
Selling, general
and
administrative 3,576 3,761 7,177 7,291
Research and
development 363 346 695 599
----------- ---------- ----------- ----------
Total
operating
expenses 3,939 4,107 7,872 7,890
----------- ---------- ----------- ----------
Operating income
(loss) 1,051 38 795 (411)
----------- ---------- ----------- ----------
Other income (loss) 28 35 39 (41)
Foreign currency
gain 45 63 21 89
Interest expense (333) (275) (648) (488)
----------- ---------- ----------- ----------
Total other
income and
expense (260) (177) (588) (440)
----------- ---------- ----------- ----------
Income (loss)
from continuing
operations
before income
tax expense 791 (139) 207 (851)
Income tax benefit
(expense) 10 (70) (24) (116)
----------- ---------- ----------- ----------
Income (loss)
from continuing
operations
before minority
interest in
income of
consolidated
subsidiary 801 (209) 183 (967)
Minority interest in
income of
consolidated
subsidiary (56) (118) (31) (70)
----------- ---------- ----------- ----------
Income (loss)
from continuing
operations 745 (327) 152 (1,037)
Income (loss)
from
discontinued
operations (42) 160 (219) 121
----------- ---------- ----------- ----------
Net income
(loss) 703 (167) (67) (916)
Provision for
preferred stock
dividends (68) (76) (144) (144)
Amortization for
discount on
preferred stock - - - (49)
----------- ---------- ----------- ----------
Net income (loss)
applicable to
common
shareholders $ 635 $ (243) $ (211) $ (1,109)
=========== ========== =========== ==========
Net income (loss)
per share - basic
Continuing
operations $ 0.06 $ (0.04) $ 0.00 $ (0.13)
=========== ========== =========== ==========
Discontinued
operations $ (0.00) $ 0.02 $ (0.02) $ 0.01
=========== ========== =========== ==========
Income (loss) per
share applicable
to common
shareholders $ 0.06 $ (0.02) $ (0.02) $ (0.11)
=========== ========== =========== ==========
Net income (loss)
per share - diluted
Continuing
operations $ 0.06 $ (0.04) $ 0.00 $ (0.13)
=========== ========== =========== ==========
Discontinued
operations $ (0.00) $ 0.02 $ (0.02) $ 0.01
=========== ========== =========== ==========
Income (loss) per
share applicable
to common
shareholders $ 0.06 $ (0.02) $ (0.02) $ (0.11)
=========== ========== =========== ==========
Weighted average
number of common
shares and common
share equivalent
outstanding
Basic 10,503,691 9,777,499 10,339,546 9,764,467
=========== ========== =========== ==========
Diluted 12,434,354 9,777,499 10,339,546 9,764,467
=========== ========== =========== ==========
CONTACT: Company Contact:
Veronica B. Marks
Manager, Corporate Communications
DRI Corporation
Phone: (214) 378-4776
Fax: (214) 378-8437
E-Mail: veronicam@digrec.com