Exhibit 99.1
DRI Corporation Posts Profit in Third
Quarter 2007
-- Third Quarter Sales Up 12.6 Percent Over Last Year's Same
Period Results
-- Fourth Quarter and Fiscal Year 2007 on Track to Profitability
-- Order Backlog Strong
DALLAS--(BUSINESS WIRE)--November 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 that third quarter 2007 sales exceeded $13.9
million, as compared to $12.4 million on comparable sales for the same
period a year ago.
"Our third quarter revenue increased by 12.6 percent over
same-period results from last year - absent the Company's former
Digital Audio Corporation subsidiary, the divestiture of which we
reported in April 2007. Our internal work to reduce costs and
expenses, increasing revenue, and strong order backlog of
approximately $11 million continue to help build these favorable
trends. We expect a profitable fourth quarter and fiscal year 2007,"
David L. Turney, the Company's Chairman, President, and Chief
Executive Officer, said.
On Nov. 13, 2007, the Company filed with the Securities and
Exchange Commission a Form 10-Q for the period ended Sept. 30, 2007.
THIRD QUARTER 2007 RESULTS EXCLUSIVE OF DISCONTINUED OPERATIONS
For the quarter ended Sept. 30, 2007, sales increased by 12.6
percent to $13.9 million and the net income to common shareholders was
$423 thousand, or 4 cents per share. This compares to sales of $12.4
million and a net loss to common shareholders of $1.3 million, or 13
cents per share, for the same period last year. Weighted-average
shares outstanding were 11.1 million (basic) and 11.7 million
(diluted), as compared to 9.8 million (basic and diluted) a year ago.
For the nine months ended Sept. 30, 2007, sales increased by 13.1
percent to $40.8 million and the net income to common shareholders was
$431 thousand, or 4 cents per share. This compares to sales of $36.1
million and a net loss to common shareholders of $2.5 million, or 26
cents per share, for the same period last year. Weighted-average
shares outstanding for the nine-month period were 10.6 million (basic)
and 11.0 million (diluted), as compared to 9.8 million (basic and
diluted) a year ago.
As of Sept. 30, 2007, the Company had $5.3 million in working
capital and $19.2 million in shareholders' equity. This compares to
$3.6 million in working capital and $17.9 million in shareholders'
equity for the same period a year ago.
THIRD QUARTER 2007 CONFERENCE CALL
A conference call to discuss third quarter 2007 results will occur
on Nov. 14, 2007, at 11 a.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) 694-4728; or
International, (973) 582-2745. Telephone replay will be available
through March 31, 2008, via the following telephone numbers: Domestic,
(877) 519-4471 (Code 9447903); or International, (973) 341-3080 (Code
9447903). To participate via webcast, go to
http://www.viavid.net/detailpage.aspx?sid=00004890. The webcast will
be archived for 90 days.
LONG-TERM OUTLOOK
Management's three-year strategic business plan, approved by the
DRI Board of Directors in September 2007, projects profitable growth
to an annualized revenue run rate of $100 million by the end of fiscal
year 2010, exclusive of possible acquisitions.
"Our three-year strategic business plan indicates that our
investments in market, product, business operating infrastructure, and
personnel - combined with improving market conditions and entry into
some very interesting new geographic markets - may very well produce a
continued growth trend. As we continue our focus to produce improved
operating results, and to inform and educate investors about the
opportunities we believe are embodied in DRI, we believe that
shareholder value should increase. We are near completion on our 2008
operating plan and additional guidance for 2008 revenue will be issued
when that work is completed. However, we can presently say that we do
expect additional revenue growth in 2008," Mr. Turney said.
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.
In particular, statements concerning the timing or amount of future
revenues, expectations of profitability, expected business and revenue
growth trends, the strength of the Company's order backlog, future
annualized revenue run rates, and anticipated increases in shareholder
value, as well as any statement, express or implied, concerning future
events or expectations or which use words such as "expect," "fully
expect," "expected," "appears," "believe," "plan," "anticipate,"
"would," "goal," "potential," "potentially," "range," "pursuit," "run
rate," "stronger," "preliminarily," etc., is a forward-looking
statement. These forward-looking statements are subject to risks and
uncertainties, including risks and uncertainties that we may not have
accurately forecasted the timing or amount of future revenues, that
our expectations as to future business and revenue growth trends, the
strength of the Company's order backlog, future annualized run rates,
and increases in shareholder value may not prove accurate over time,
as well as other risks and uncertainties set forth in our Annual
Report on Form 10-K filed March 28, 2007, and in subsequent quarterly
reports on Form 10-Q, 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.
DIGITAL RECORDERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except shares and per share amounts)
September December
30, 2007 31,
(Unaudited) 2006
------------ ---------
ASSETS
Current Assets
Cash and cash equivalents $ 238 $ 611
Trade accounts receivable, net 11,056 10,100
Current portion of note receivable 86 -
Other receivables 489 147
Inventories 9,078 9,057
Prepaids and other current assets 473 422
Assets of discontinued operations - 1,728
------------ --------
Total current assets 21,420 22,065
------------ --------
Property and equipment, net 2,833 2,906
Long-term portion of note receivable 258 -
Goodwill 10,967 10,289
Intangible assets, net 1,130 1,110
Deferred tax assets, net 203 191
Other assets 404 797
------------ --------
Total assets $ 37,215 $ 37,358
============ ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Lines of credit $ 5,440 $ 7,608
Notes payable, net 500 1,584
Loan payable 466 -
Current portion of long-term debt 250 254
Current portion of foreign tax settlement 477 393
Accounts payable 5,014 5,560
Accrued expenses 3,990 2,921
Preferred stock dividends payable 17 23
Liabilities of discontinued operations - 74
------------ --------
Total current liabilities 16,154 18,417
------------ --------
Long-term debt and capital leases, long-term 26 42
------------ --------
Foreign tax settlement, long-term 1,089 1,087
------------ --------
Deferred tax liabilities 335 383
------------ --------
Minority interest in consolidated subsidiary 392 234
------------ --------
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; 85 and 183 shares issued and
outstanding at September 30, 2007, and
December 31, 2006, respectively; redeemable at
the discretion of the Company at any time. 355 495
Series G Redeemable, Convertible Preferred
Stock, $.10 par value, liquidation preference
of $5,000 per share; 600 shares authorized;
402 and 379 shares issued and outstanding at
September 30, 2007 and December 31, 2006,
respectively; redeemable at the discretion of
the Company after five years from date of
issuance. 1,728 1,613
Series H Redeemable, Convertible Preferred
Stock, $.10 par value, liquidation preference
of $5,000 per share; 600 shares authorized; 58
and 54 shares issued and outstanding at
September 30, 2007, and December 31, 2006,
respectively; redeemable at the discretion of
the Company after five years from date of
issuance. 242 222
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
September 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
September 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 September 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; 11,168,145 and 10,045,675 shares
issued and outstanding at September 30, 2007
and December 31, 2006, respectively. 1,117 1,004
Additional paid-in capital 32,077 31,517
Accumulated other comprehensive income -
foreign currency translation 4,404 3,397
Accumulated deficit (21,982) (22,414)
------------ --------
Total shareholders' equity 19,219 17,195
------------ --------
Total liabilities and shareholders' equity $ 37,215 $ 37,358
============ ========
DIGITAL RECORDERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(In thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------------------
2007 2006 2007 2006
----------- ---------- ----------- ----------
Net sales $ 13,929 $ 12,371 $ 40,814 $ 36,085
Cost of sales 9,520 9,011 27,738 25,246
----------- ---------- ----------- ----------
Gross profit 4,409 3,360 13,076 10,839
----------- ---------- ----------- ----------
Operating expenses
Selling, general
and administrative 3,174 3,756 10,351 11,047
Research and
development 329 314 1,024 913
----------- ---------- ----------- ----------
Total
operating
expenses 3,503 4,070 11,375 11,960
----------- ---------- ----------- ----------
Operating income
(loss) 906 (710) 1,701 (1,121)
----------- ---------- ----------- ----------
Other income (loss) 4 24 43 (17)
Foreign currency
gain 130 11 151 100
Interest expense (276) (330) (924) (818)
----------- ---------- ----------- ----------
Total other
income and
expense (142) (295) (730) (735)
----------- ---------- ----------- ----------
Income (loss) from
continuing
operations before
income tax expense 764 (1,005) 971 (1,856)
Income tax expense (138) (59) (162) (175)
----------- ---------- ----------- ----------
Income (loss) from
continuing
operations before
minority interest
in income of
consolidated
subsidiary 626 (1,064) 809 (2,031)
Minority interest in
income of
consolidated
subsidiary (127) (159) (158) (229)
----------- ---------- ----------- ----------
Income (loss) from
continuing
operations 499 (1,223) 651 (2,260)
Income (loss) from
discontinued
operations - 212 (219) 333
----------- ---------- ----------- ----------
Net income
(loss) 499 (1,011) 432 (1,927)
Provision for
preferred stock
dividends (76) (77) (220) (221)
Amortization for
discount on
preferred stock - - - (49)
----------- ---------- ----------- ----------
Net income (loss)
applicable to
common
shareholders $ 423 $ (1,088) $ 212 $ (2,197)
=========== ========== =========== ==========
Net income (loss)
per share - basic
Continuing
operations $ 0.04 $ (0.13) $ 0.04 $ (0.26)
=========== ========== =========== ==========
Discontinued
operations $ 0.00 $ 0.02 $ (0.02) $ 0.03
=========== ========== =========== ==========
Income (loss) per
share applicable
to common
shareholders $ 0.04 $ (0.11) $ 0.02 $ (0.22)
=========== ========== =========== ==========
Net income (loss)
per share - diluted
Continuing
operations $ 0.04 $ (0.13) $ 0.04 $ (0.26)
=========== ========== =========== ==========
Discontinued
operations $ 0.00 $ 0.02 $ (0.02) $ 0.03
=========== ========== =========== ==========
Income (loss) per
share applicable
to common
shareholders $ 0.04 $ (0.11) $ 0.02 $ (0.22)
=========== ========== =========== ==========
Weighted average
number of common
shares and common
share equivalent
outstanding
Basic 11,131,248 9,801,789 10,606,347 9,777,044
=========== ========== =========== ==========
Diluted 11,711,753 9,801,789 11,020,059 9,777,044
=========== ========== =========== ==========
CONTACT: DRI Corporation Contact:
Veronica B. Marks
Manager, Corporate Communications
Phone: (214) 378-4776
Fax: (214) 378-8437
E-Mail: veronicam@digrec.com
or
Christensen-cQuest Contact:
Collum Hunter
Associate
Phone: (480) 614-3036
Fax: (480) 614-3033
E-Mail: chunter@ChristensenIR.com