HANOVER, MD--(Marketwired - May 16, 2016) - Brekford Corp. (
First Quarter Financial Highlights
- Revenue declined to approximately $3.1 million, compared to $5.1 million in the same period of 2015;
- Gross profit margin increased to 19.9%, compared to 18.0% in the same period of 2015;
- ATSE services gross margin increased to 70.0%, compared to 68.0% in the same period of 2015;
- Vehicle services gross margin decreased to 7.4%, compared to 10.6% in the same period of 2015;
- Operating expenses decreased to $891,201, compared to $1.0 million in the same period of 2015;
- Net loss increased to $554,285, compared to $127,108 in the same period of 2015.
First Quarter Operational Highlights
- Initiated ATSE operations in Brice, Ohio and New Rochelle, New York;
- Deployed next generation solar powered portable red light camera system in New Rochelle, New York;
- Awarded contract from Calvert County, Maryland to provide turnkey automated speed enforcement services;
- Submitted proposals to provide ATSE services in Washington D.C., Bogota Colombia, Asuncion Paraguay, San Pedro Mexico and Monterrey Mexico;
- Launched first Panasonic Arbitrator® BWC (body-worn camera) program in the state of Maryland (St. Mary's County, Maryland);
- Initiated body camera pilot project in Charleston, South Carolina.
"Operating results for the first quarter of 2016 were below expectations, following the excellent progress on our turnaround plan in 2015," commented Rod Hillman, President and Chief Operating Officer of Brekford Corp. "Lower sales of rugged IT and electronic ticketing products, coupled with couple lower gross margins in our overall vehicle services portfolio, contributed to the reported net loss. Some key purchase orders were not completed due to timing of product supply, and we experienced delays in executing our plan for new customer acquisition designed to offset the cyclical nature of existing customer repeat orders. Our vehicle services sales order pipeline remains strong with a backlog exceeding $2.5 million, despite the reduced first quarter revenues. We expect renewed growth in vehicle services as our expanded market strategy targets new clients in Washington D.C., Virginia, Delaware, and federal government agencies."
"Brekford has continued to make significant progress on our overall execution strategy with respect to ATSE services, body cameras, technology development, and expansion of our vehicle services sales order pipeline. We launched ATSE operations in Brice, Ohio and New Rochelle, New York, and were recently awarded a speed camera contract in Calvert County, Maryland that will begin operations in the second quarter. We are also awaiting results on a number of submitted ATSE proposals in both the U.S. and Latin America, including the capital cities of Colombia and Paraguay, two large cities in Mexico, and Washington, D.C. The sales cycle for ATSE programs can be very long; however, we are confident that our contracted recurring revenue model will lead to sustained growth for the Company. We are driving these efforts with a strong focus on proprietary technology development including a solar powered portable red light camera, a compact mobile speed camera, licensed versions of our industry leading iP360 citation management system and the industry's first commercially viable distracted driving camera," concluded Hillman.
C.B. Brechin, Brekford's Chief Executive Officer, added, "Our first quarter results are not indicative of the solid strides Brekford has made in laying the framework for growth. As a leading public safety and security solutions provider, I am confident that broadening our geographic footprint, expanding our product and service offerings, and focusing on business development efforts will lead to long-term value for our customers and shareholders."
About Brekford Corp.
Brekford Corp. provides state-of-the art public safety technology and automated traffic enforcement solutions to municipalities, the U.S. military, various federal entities and other public safety agencies throughout the United States. Its services include automated speed and red light camera enforcement programs, parking enforcement solutions and an end-to-end suite of technology and equipment for public safety vehicle upfitting. Brekford's combination of upfitting services, cutting-edge technology, and automated traffic enforcement services offers a unique 360-degree solution for law enforcement agencies and municipalities.
The Company is headquartered in Hanover, Maryland, and its common stock is traded on the OTC Markets under the symbol "BFDI." Additional information on Brekford can be accessed online at www.brekford.com.
This press release contains forward-looking statements within the meaning of that term in Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "expect," "project," "intend," "plan," "believe," "target," "aim," "should," and words and terms of similar substance and any financial projections used in connection with any discussion of future plans, strategies, objectives, actions, or events identify forward-looking statements. Forward-looking statements include, among others, those concerning our expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These statements are based on the beliefs of our management as well as assumptions made by and information currently available to us and reflect our current views concerning future events. As such, they are subject to risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: the risk that any projections, including earnings, revenues, expenses, synergies, margins or any other financial items that form the basis for management's plans and assumptions are not realized; a reduction in industry profit margin; requirements or changes affecting the business in which we are engaged; our ability to successfully implement new strategies; operating hazards; competition and the loss of key personnel; changing interpretations of generally accepted accounting principles; continued compliance with government regulations; changing legislation and regulatory environments; and the general volatility of the market prices of our securities and general economic conditions. Readers are referred to the documents filed by Brekford Corp. with the SEC, specifically the Company's most recent reports filed on Form 10-K and Forms 10-Q, which further identify important risks, trends and uncertainties which could cause actual results to differ materially from the forward-looking statements in this press release. Brekford Corp. expressly disclaims any obligation to update any forward-looking statements.
|Condensed Consolidated Statements of Operations (Unaudited)|
|Three Months Ended March 31,|
|COST OF REVENUE||2,468,870||4,220,587|
|Salaries and related expenses||479,860||540,221|
|Selling, general and administrative expenses||411,341||461,385|
|TOTAL OPERATING EXPENSES||891,201||1,001,606|
|LOSS FROM OPERATIONS||(278,945||)||(76,014||)|
|OTHER (EXPENSE) INCOME|
|Change in fair value in derivative liability||(840||)||46,788|
|Loss on extinguishment of debt||(122,472||)||--|
|TOTAL OTHER (EXPENSE) INCOME||(275,340||)||(51,094||)|
|OTHER COMPREHENSIVE LOSS - foreign currency translation||(1,473||)||--|
|LOSS PER SHARE - BASIC||$||(0.01||)||$||(0.00||)|
|LOSS PER SHARE - DILUTED||$||(0.01||)||$||(0.00||)|
|WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING - BASIC||45,297,869||44,625,236|
|WEIGHTED AVERAGE NUMBER OF SHARESOUTSTANDING - DILUTED||45,297,869||44,625,236|
|Condensed Consolidated Balance Sheets (Unaudited)|
|Accounts receivable, net of allowance $0 at March 31, 2016 and December 31, 2015, respectively||2,548,823||3,781,263|
|Total current assets||4,086,562||5,344,344|
|Property and equipment, net||216,066||223,347|
|Other non-current assets||103,828||179,208|
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)|
|Accounts payable and accrued expenses||$||1,698,999||$||2,979,131|
|Accrued payroll and related expenses||78,924||98,000|
|Line of credit, net of fees||1,762,160||1,402,380|
|Term loan - current portion, net of fees||104,167||166,667|
|Obligations under other notes payable - current portion||29,477||29,277|
|Total current liabilities||3,957,861||4,952,773|
|LONG - TERM LIABILITIES|
|Notes payable - stockholders||500,000||500,000|
|Other notes payable - net of current portion, net of fees||14,187||21,660|
|Deferred rent, net of current portion||44,874||44,923|
|Convertible promissory notes, net of debt discounts and issuance costs of $284,484 and $418,730 at March 31, 2016 and December 31, 2015, respectively||255,517||221,269|
|Total long-term liabilities||814,578||787,852|
|STOCKHOLDERS' (DEFICIT) EQUITY|
|Preferred stock, par value $0.0001 per share; 20,000,000 shares authorized; none issued and outstanding||--||--|
|Common stock, par value $0.0001 per share; 150,000,000 shares authorized; 46,138,064 and 45,151,254 issued and outstanding, at March 31, 2016 and December 31, 2015, respectively||4,614||4,515|
|Additional paid-in capital||11,133,431||10,951,491|
|Treasury Stock, at cost 10,600 shares at March 31, 2016 and December 31, 2015 respectively||(5,890||)||(5,890||)|
|Other comprehensive loss||(1,473||)||(1,462||)|
|TOTAL STOCKHOLDERS' (DEFICIT) EQUITY||(365,983||)||6,274|
|TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY||$||4,406,456||$||5,746,899|
C. B. Brechin