Digital Ally Expects Second Quarter Revenue to Rise Over 55% From Prior-Year Levels

LENEXA, KS--(Marketwired - Jul 7, 2015) - Digital Ally, Inc. (NASDAQ: DGLY) ("Digital" or the "Company"), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, today announced that its second quarter revenue is expected to approximate $5.5 million, exceeding 2014 second quarter revenue of approximately $3.45 million by more than 55%. Anticipated revenue for the most recent quarter should reflect an approximate 25% increase over the first quarter of 2015 and would represent the highest quarterly revenue posted by the Company since the third quarter of 2011.

"Sales of our advanced video surveillance products to domestic law enforcement and commercial fleet customers were strong during the second quarter of 2015, as evidenced by the number of individual orders in excess of $100,000," stated Stanton E. Ross, Chief Executive Officer of Digital Ally, Inc. "We shipped seven individual orders in excess of $100,000, averaging $180,000 per order. Such orders included large shipments to several domestic county sheriff departments. One order was for a 'package' that included our in-car video systems, FirstVU body-worn cameras, and patented VULink connectivity system. A large county in the eastern U.S. ordered 325 FirstVU body cameras, a sheriff's department in the southeastern U.S. acquired 57 of our in-car video systems, and a state highway patrol department ordered 60 in-car video systems. Demand for our commercial event recorders resulted in two large orders for DVM-250 systems, coupled with our new FleetVU cloud-based fleet management tool that was recently released into the market."

"Shipments of our FirstVU body cameras rebounded in the most recent quarter as we successfully addressed the production issues encountered during the first quarter of the year," continued Ross. "Total FirstVU shipments during the second quarter, including test and evaluation units and customer orders, exceeded 2,000 units."

Digital Ally's gross margins in the second quarter of 2015 improved significantly over the first quarter of 2015, and the Company believes it made substantial progress in the second quarter toward its goal of achieving a positive level of operations. These results are based on preliminary information currently available to management and are subject to adjustments and revisions as the Company closes its books for the second quarter of 2015.

"We remain confident that we can achieve full-year 2015 revenue of approximately $25 million, for an increase of over 40% when compared with $17.4 million in revenue last year. This outlook is based upon a robust sales pipeline, current trends and the increase in FirstVU body camera production rates achieved during the most recent quarter, among other factors. While we expect our operations to be profitable in 2015 for the first time since 2008, we do not expect to achieve our previous forecast of $2.5 million in operating income because of increases in production headcount, production support personnel, and SG&A expenses associated with additional direct sales personnel, pre- and post-sale support staff, technical support and engineering resources," concluded Ross.

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial applications. The Company's primary focus is digital video imaging and storage. For additional information, visit www.digitalallyinc.com.

The Company is headquartered in Lenexa, Kansas, and its shares are traded on The NASDAQ Capital Market under the symbol "DGLY".

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: whether the Company will be able to increase its revenue and improve its operating results during the balance of 2015 consistent with its financial forecast given the current economic and competitive environment; whether the Company will be able to build upon and accelerate the sales progress it made in the second quarter during the balance of 2015; whether it will be able to achieve improved production and other efficiencies to increase its gross and operating margins to targeted levels during the balance of 2015; the Company's ability to deliver its product offerings as scheduled, obtain the required components and products on a timely basis, and have them perform as planned; its ability to maintain or expand its share of the markets in which it competes; and whether the Company will be able to adapt its technology to new and different uses. These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company's disclosures. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. The Company does not undertake to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2014, and its Form 10-Q for the three months ended March 31, 2015, as filed with the Securities and Exchange Commission.