SOURCE: DAC Technologies Group International, Inc.

May 15, 2007 12:54 ET

DAC Technologies Announces Quarterly Results for Period Ending March 31, 2007

LITTLE ROCK, AR -- (MARKET WIRE) -- May 15, 2007 -- DAC Technologies (OTCBB: DAAT) today announced that net sales for the three months ending March 31, 2007 were $2,839,625 as compared to $2,763,197 for the same period in 2006. The Company reported a net loss of $17,202 for the three month period ending March 31, 2007.

David A. Collins, Chairman and CEO, stated, "In April, upon the advice of our legal counsel, we settled a lawsuit with our former insurance carrier, who was seeking to collect $236,121 in additional insurance premiums from 2004 and 2005. The lawsuit was settled for $146,500. This amount was charged to income in the first quarter. Without this one-time charge, the Company would have reported net income of $73,203 for the quarter. On the same date this lawsuit was settled, the Company appeared before the Eighth Circuit Court of Appeals in the matter of DAC Technologies vs. SKIT International, Ltd. The Court's ruling is still pending, but the Company and its counsel strongly believe the Court will uphold the $1,524,980 judgment previously awarded to the Company, and previously affirmed on appeal numerous times, including by the Arkansas Supreme Court. Upon final ruling from the Eighth Circuit, the Company will take whatever steps are necessary to collect the judgment, unless appealed to the US Supreme Court. The Company and its counsel feel it is unlikely the US Supreme Court would even accept the case. The Defendants have spent a considerable amount of money appealing this judgment, which leads us to believe there are considerable assets upon which we can collect this judgment."

Collins also stated, "The Company continues to feel the effects of price increases during 2006 on its gross margins. Gross margins decreased from 35% in the first quarter of 2006 to 29% in the first quarter of 2007. This had a significant impact on the Company's earnings in the first quarter of 2007. Income before taxes would have been $170,378 greater this year if the Company had been able to maintain the same 35% margin as in 2006. We have addressed this issue and have been working with our manufacturers to find ways to decrease our costs. We will be announcing an 8.5% price increase on June 1st for most of our products to help offset some of our increased costs and improve our margins. We have also initiated several cost saving measures to reduce our operating expenses, including amending our freight policy with our customers to pass along more of the increase in our freight costs. We are tightly controlling expenses, particularly related to salaries, commissions and freight costs. The price increases, improved margins, and tight control of expenses will put us back in an earnings growth position."

Collins also stated, "While our sales growth in the first quarter was a little slower than our historical growth, the second quarter of this year has started out very well. April sales increased 15% over last year. We anticipate May will increase significantly more than April. Our new aluminum camping table has done very well and we have received a commitment for a larger version to ship in February 2008 which will add in excess of $1,000,000 to our sales next year. We have also secured the business from Wal-Mart to provide camouflaged canned and bottled drink koozies for shipment late in June 2007. We are also working on developing a line of household cleaning kits for Wal-Mart."

In addition, Collins stated, "We feel the Company's sales growth is now going the proper direction. We are tightly controlling expenses and increasing gross margins. This will provide significant sales growth and profits during the last three quarters, where most of our business comes from. We will return to reporting monthly sales, as we have done in previous years, to keep our shareholders more in informed. We also are continuing our stock buy-back program."


About DAC:

DAC Technologies Group International, Inc. is an outsource manufacturer of high quality, reasonably priced security safes, gunlocks, gun cleaning kits and security products, as well as accessory items for the sporting goods market. DAC distributes its products through mass merchandisers such as Wal-Mart and Kmart, and sporting goods retailers and distributors such as Cabela's, Acusport, Jerry's, RSR, Maurice, Academy Sports, Sports Authority and others. DAC also provides gunlocks to OEM gun manufacturers such as Glock, SigArms, Savage, Marlin, Weatherby, as well as others. Also, DAC's products are distributed through catalog companies.

The Private Securities Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in written statements to be made) contain statements that are forward looking, such as those relating to consummation of the transaction, anticipated future revenue of the Company's and success of current public offerings. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements.

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