Continued Growth and Operational Execution Leads to Record Start for the Year
JACKSONVILLE, FL / ACCESSWIRE / May 14, 2019 / Duos Technologies Group, Inc. ('Duos' or the 'Company') (OTCQB: DUOT), a provider of intelligent security analytical technology solutions, reported financial results for the first quarter ended March 31, 2019.
First Quarter 2019 and Recent Operational Highlights
Launched apis3D, the Company's next generation automated pantograph inspection system for transit and light rail train inspection, which is expected to accelerate the rail industry's ongoing transition to automated inspection systems.
Successfully completed the first deployment of the Company's new dcVue™ software, licensed as a commercial application in partnership with FNT Software, a leading provider of integrated software solutions for IT management, data center infrastructure management and telecommunication infrastructure management worldwide.
Launched truevue360™ subsidiary, to focus on driving additional revenues and margin to the Company by developing, implementing and marketing artificial intelligence and deep learning solutions for a broad range of industries.
Strengthened leadership and increased industry experience of the Company's Board of Directors through the appointment of Ken Ehrman as an Independent Director, who will serve as head of the compensation and nominating committees.
Added key technical, development and project management staff and increased headcount to 58 at quarter end.
Completed staffing of the Company's truevue360™ development team and remain on schedule for the platform to become fully operational by the end of the second quarter of 2019.
Initiated new auditing project at a major federal agency using the dcVue™ software and Duos ITAM professional staff, with anticipated audits to be conducted at up to 35 data centers in calendar year 2019.
Following initial $1.0 million contract announced in Q4 2018, awarded additional business from regional bank with national footprint to secure additional large facility.
First Quarter 2019 Financial Results
Total revenue increased 279% to $4.35 million from $1.15 million in the same quarterly period last year. The significant increase in total revenue was driven by the current strength of the projects portion of the Company's business currently being undertaken as well as increases in revenue in all areas of the Company's business.
Gross profit increased 347% to $2.13 million (49.0% of total revenue) from $477,000 (41.5% of total revenue) in the same quarterly period last year. The significant increase in gross profit was mainly the result of the increase in project revenue and the positive effect of revenue increases from new projects with a lower overall growth in associated costs. Gross profit as a percentage of revenue is also improving as a result of actions the Company has taken to streamline its operations.
Operating expenses increased 71% to $2.08 million from $1.22 million in the same quarterly period last year. The increase in operating expenses was primarily due to an increased number of employees in both the Company's operating subsidiary, Duos Technologies, Inc. as well as in the truevue360™ subsidiary, and additional contract expenses related to an overall significant increase in revenues. Selling and marketing expenses, research and development, and other general and administrative costs increased in line with the Company's investment in resources to grow the business.
Net income totaled $44,000, an improvement from net loss of $743,000 in the same quarter a year-ago. The improvement in net income was primarily attributable to significant increase in revenue over the comparable quarter in 2018 and a lower rate of operating expense growth.
For the fiscal year ending December 31, 2019, the Company expects total revenue to be between $14.0 million and $15.0 million, which would represent an approximate 16% to 25% increase over 2018. The Company's guidance is based on contracts in backlog and near-term pending orders that are already performing or scheduled to be executed in or before the fourth quarter of 2019. Management also anticipates securing additional awards in 2019.
'The first quarter was a continuation of the overall strong and improving results we've been producing for some time,' said Duos Chairman and CEO Gianni Arcaini. 'Driven by the substantial and ongoing growth in the project portion of our business, our topline increased by 279%, and we achieved net income profitability for the second time in three quarters. Operationally, we are leveraging our current success by expanding into new market opportunities that utilize our existing technology capabilities in complementary areas, most notably through our truevue360™ subsidiary, which we expect to become fully operational by the end of the second quarter. Additionally, we recently formed a team of top development engineers to implement a number of disruptive technologies in 2019 that have the potential to further change the way rail inspection will be conducted in the future. Altogether, we expect to build on the initial success we delivered in 2018 with another year of growth and improving financial results.'
The Company's management will host a conference call today, Tuesday, May 14, 2019 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question and answer period.
Date: Tuesday, May 14, 2019
Time: 4:30 p.m. Eastern time (1:30 p.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 of the conference call. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.
The conference call will be broadcasted live via telephone and available for online 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, Florida, through its wholly owned subsidiary, Duos Technologies, Inc., provides advanced intelligent security and analytical technology solutions with a strong portfolio of intellectual property. The Company's 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 centraco® platform. 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 also offers professional and consulting services for large data centers. For more information, visit www.duostech.com.
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,' or similar expressions or the negative of these terms and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which 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.
Contacts: Duos Technologies
Duos Technology Group, Inc.
Matt Glover or Tom Colton
Gateway Investor Relations