SOURCE: Brekford Corp.

Brekford Corp.

August 02, 2013 17:00 ET

Brekford Announces Second Quarter Operating Results

Geographic Expansion and Service Offerings Gain Traction

HANOVER, MD--(Marketwired - Aug 2, 2013) - Brekford Corp. (the "Company") (OTCBB: BFDI) (OTCQB: BFDI), a leading public safety technology service provider of fully integrated traffic safety solutions, vehicle upfitting, and rugged mobile technology, today announced its operating results for the second quarter and first half of 2013.

Management Comments

"We announced a number of new contracts during the second quarter that are supportive of our geographical expansion strategy and our municipal receivables recovery initiatives," continued Brechin. "Our relationship with Automated Traffic Enforcement Solutions ('ATES') has resulted in the signing of four automated traffic enforcement contracts in Missouri since the end of the first quarter, which is consistent with our goal of expanding into multiple states in the eastern and midwestern regions of the U.S. ATES evaluated a variety of equipment and software solutions before selecting Brekford as its strategic partner, and we look forward to our role in support of its automated traffic enforcement programs in Missouri and other midwestern states. The implementation of automated traffic safety enforcement in school zones, work zones and high traffic accident areas in the four cities and towns in Missouri where contracts have been announced should enhance the safety of both motorists and pedestrians in new geographic markets.

"We also entered into contracts to process parking citations and manage delinquent collections for the cities of Asheville, North Carolina, and Laurel, Maryland, during the most recent quarter. This provides an initial validation of our Company's plan to expand the range of recurring revenue services that we provide to municipalities through our Municipal Recover Agency, LLC subsidiary, which was established early this year."

"We anticipated a net loss during the second quarter, as we incurred significant costs in anticipation of our role as the primary vendor in the implementation of Baltimore's Automated Traffic Enforcement Program ('ATVES')," stated C. B. Brechin, Chief Executive Officer of Brekford Corp. "We believe Baltimore's decision to require extremely thorough testing of cameras and related equipment, while delaying the start-up of the ATVES, will result in highly efficient and accurate speed and red light enforcement that is fair and transparent to motorists, while assuring a level of enforcement that will significantly reduce speeding and reckless driving within the City. Recent testing and calibration of equipment and software have produced encouraging results, and we expect the Baltimore ATVES program to be fully activated during the current quarter. This is a five-to-eight-year contract, and while 'ramp-up' costs related to the program impacted our operating results during the most recent quarter, we look forward to the full implementation of the program during the second half of 2013."

Financial highlights for quarter and six months ended June 30, 2013

Net revenue declined to approximately $3.7 million in the second quarter of 2013, compared with approximately $4.1 million in the prior-year quarter. The 10% decrease in net revenue was primarily due to a decline in sales of rugged IT products when compared with the second quarter of 2012. The Company expects vehicle upfitting services revenue and rugged IT product sales to fluctuate from quarter to quarter, depending upon the size and timing of orders from law enforcement and other vehicle fleet operators.

Gross profit for the three months ended June 30, 2013 decreased to $665,146 in the three months ended June 30, 2013, compared with gross profit of $1,083,449 in the second quarter of 2012. The decrease was primarily due lower gross profit margins from rugged IT product and vehicle upfitting services.

The Company reported a net loss of $476,068, or $0.01 per share, in the most recent quarter, compared with net income of $126,535, or $0.00 per diluted share, in the year-earlier quarter. Management primarily attributes the decline in net income to higher salaries and related benefit programs associated with preparation for the Company's assumption of its responsibilities under the Baltimore ATVES contract. Implementation of the program was temporarily suspended in accordance with the City of Baltimore's decision to require additional testing and calibration of automated traffic enforcement equipment in order to assure that problems which occurred under the program's previous vendor were effectively addressed.

For the six months ended June 30, 2013, net revenue declined to approximately $8.1 million, compared with approximately $8.2 million in the prior-year period. Gross profit for the first half of 2013 declined to $1,928,500, compared with gross profit of $2,154,985 in the corresponding period of the previous year.

The Company reported a net loss of $400,469, or $0.01 per share, for the first half of 2013, compared with net income of $249,845, or $0.01 per diluted share, in the year-earlier period.

About Brekford Corp.

Brekford Corp. has provided state-of-the art mobile technology and traffic safety solutions to municipalities, the U.S. military, various federal entities and other security and public safety agencies throughout the United States over the last ten years. Its services include automated traffic safety solutions and an end-to-end suite of mobile computer, video technology and equipment upfitting services. Brekford's combination of upfitting services, cutting-edge technology, and automated traffic enforcement services offers a unique 360-degree solution for any organization, including homeland security and law enforcement agencies. Additional information about Brekford may be found online at www.brekford.com.

Forward-Looking Statements

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. Actual results may differ materially from the results suggested by these forward-looking statements, for a number of reasons, including, but not limited to, market conditions, the cost and success of development activities and the ability to successfully manage growth. 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. The Company expressly disclaims any obligation to update any forward-looking statements.

   
 Brekford Corp.  
Condensed Statement of Operations  
 ($000, except per-share figures)  
             
    Three Months Ended  
             
    6/30/13     6/30/12  
                 
Net Revenue   $ 3,668     $ 4,087  
                 
Gross Profit     665       1,083  
                 
Income (Loss) from Operations     (428 )     164  
                 
Total Other Expense     (48 )     (37 )
                 
Net Income (Loss)   $ (476 )   $ 127  
                 
Earnings Per Share -                
  Basic and Diluted   $ (0.01 )   $ 0.00  
                 
Weighted Avg. Number of                
  Shs. Outstanding - Basic     44,274       44,194  
                 
Weighted Avg. Number of                
  Shs. Outstanding - Diluted     44,274       47,133  
                   
                   
   
Brekford Corp.  
Condensed Statement of Operations  
($000, except per-share figures)  
             
    Six Months Ended  
             
    6/30/13     6/30/12  
                 
Net Revenue   $ 8,062     $ 8,236  
                 
Gross Profit     1,928       2,155  
                 
Income (Loss) from Operations     (315 )     324  
                 
Total Other Expense     (85 )     (74 )
                 
Net Income (Loss)   $ (400 )   $ 250  
                 
Earnings Per Share -                
  Basic and Diluted   $ (0.01 )   $ 0.01  
                 
Weighted Avg. Number of                
  Shs. Outstanding - Basic     44,265       44,026  
                 
Weighted Avg. Number of                
  Shs. Outstanding - Diluted     44,265       47,195  
                   
                   

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BALANCE SHEET ($000)
         
    6/30/13   12/31/12
             
Cash and Cash Equivalents   $ 1,450   $ 1,415
             
Current Assets     7,142     6,593
             
Total Assets     9,613     9,346
             
Current Liabilities     6,896     5,426
             
Total Liabilities     7,519     6,869
             
Stockholders' Equity   $ 2,094   $ 2,477
             
             

Contact Information

  • For additional information, please contact:

    RJ Falkner & Company, Inc.
    Investor Relations Counsel
    (830) 693-4400
    email at info@rjfalkner.com