SOURCE: Brekford Corp.

Brekford Corp.

November 19, 2013 08:00 ET

Brekford Announces Third Quarter Operating Results

HANOVER, MD--(Marketwired - Nov 19, 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 third quarter and first nine months of 2013.

Management Comments

"Despite delays in realizing revenue from certain Automated Traffic Safety Enforcement ("ATSE") programs that negatively impacted our operating results for the first nine months of 2013, the Company is very encouraged by the traction gained in new markets and its progress with regards to contracts for parking enforcement citation collections," stated C. B. Brechin, Chief Executive Officer of Brekford Corp. "A key priority for Brekford's future involves the pursuit of new automated speed and red light camera enforcement programs in the growing number of states that have legislatively authorized such programs to enhance the safety of both motorists and pedestrians."

"Because of the absence of anticipated revenue from some of our existing ATSE contracts, we have implemented a cost-containment program that is intended to bring our expenses in line with current revenue levels," continued Brechin. "We consider this to be in the best interests of our shareholders, as it should accelerate the Company's return to profitability and allow us to benefit from operating leverage when revenue recovers. Furthermore, recent media reports have mischaracterized Brekford's equipment as being a primary driver of certain ATSE program delays. Although each ATSE program presents unique challenges, Brekford is proud of its track record of accurate and efficient program implementation and we want to make it clear to our investors and customers that our hardware and software continue to perform in a manner consistent with industry standards. More than ever, Brekford is committed to its ATSE contracts and customers."

Financial highlights for quarter and nine months ended September 30, 2013

Net revenue declined to approximately $3.7 million in the third quarter of 2013, compared with approximately $3.9 million for the same quarter of the prior year. The 6% decrease in net revenue was primarily due to a decline in sales of electronic ticketing systems when compared with the third 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 agencies and other vehicle fleet operators.

Gross profit for the three months ended September 30, 2013 decreased to $678,499, compared with gross profit of $786,001 for the third quarter of 2012. The decrease was primarily driven by lower profit margins contributed by ATSE programs as the Company developed infrastructure to support growth initiatives and new contracts.

The Company reported a net loss of $568,492, or $0.01 per basic and diluted common share, for the most recent quarter, compared with a net loss of $50,948, or $0.00 per basis and diluted share, for the third quarter of 2012. Management primarily attributes the decline in profitability to increased expenses related to salaries, benefit programs, and associated support for an expansion in ATSE capabilities, without the receipt of anticipated revenue from certain ATSE programs. Increased depreciation expense associated with newly installed technology infrastructure and camera equipment also contributed to the net loss in the third quarter of 2013.

For the nine months ended September 30, 2013, net revenue declined to approximately $11.8 million, compared with approximately $12.2 million for the corresponding period of 2012. Gross profit for the first nine months of 2013 declined to $2,606,999, compared with gross profit of $2,940,986 for the corresponding period of the previous year.

The Company reported a net loss of $968,960, or $0.02 per basic and diluted common share, for the first nine months of 2013, compared with net income of $198,895, or $0.00 per basic and diluted share, for the nine months ended September 30, 2012.

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 citation collections 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. 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. 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.

(Financial Highlights Follow)

   
   
Brekford Corp.  
Condensed Statement of Operations  
($000, except per-share figures)  
   
    Three Months Ended  
    9/30/13     9/30/12  
             
Net Revenue   $ 3,697     $ 3,934  
                 
Gross Profit     678       786  
                 
Income (Loss) from Operations     (519 )     (15
                 
Total Other Expense     (50 )     (36 )
                 
Net Income (Loss)   $ (568 )   $ (51 )
                 
Earnings (Loss) Per Share - Basic and Diluted   $ (0.01 )   $ 0.00  
                 
Weighted Avg. Number of Shs. Outstanding - Basic     44,274       44,223  
                 
Weighted Avg. Number of Shs. Outstanding - Diluted     44,274       44,223  
                 
                 
   
   
Brekford Corp.  
Condensed Statement of Operations  
($000, except per-share figures)  
   
    Nine Months Ended  
    9/30/13     9/30/12  
             
Net Revenue   $ 11,760     $ 12,170  
                 
Gross Profit     2,607       2,941  
                 
Income (Loss) from Operations     (834 )     309  
                 
Total Other Expense     (135 )     (110 )
                 
Net Income (Loss)   $ (969 )   $ 199  
                 
Earnings (Loss) Per Share - Basic and Diluted   $ (0.02 )   $ 0.00  
                 
Weighted Avg. Number of Shs. Outstanding - Basic     44,268       44,092  
                 
Weighted Avg. Number of Shs. Outstanding - Diluted     44,268       47,076  
                 
                 
 
 
BALANCE SHEET ($000)
 
    9/30/13   12/31/12
             
Cash and Cash Equivalents   $ 2,168   $ 1,415
             
Current Assets     6,550     6,593
             
Total Assets     8,798     9,346
             
Current Liabilities     6,822     5,426
             
Total Liabilities     7,272     6,869
             
Stockholders' Equity   $ 1,526   $ 2,477
             
             

Contact Information

  • For Additional Information, Please Contact:

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