Digital Ally, Inc Announces Third Quarter 2023 Operating Results - 'improve our margins over the longer term '

Digital Ally, Inc. (Nasdaq: DGLY) (the “Company” or “our”), today announced its operating results for the third quarter 2023. An investor conference call is scheduled for 11:15 a.m. EDT on Wednesday, November 15, 2023 (see details below).

All share and price per share information in this press release has been adjusted to reflect the Company’s 1-for-20 reverse stock split, which was effective on February 6, 2023.

Highlights for the third quarter ended September 30, 2023

• Total revenues for the three months ended September 30, 2023 were $6,337,699, a decrease of $2,146,454, or (25%), as compared to $8,484,153 for the three months ended September 30, 2022. Overall product revenues were $2,095,237 for the three months ended September 30, 2023, a decrease of $967,136, or (32%), as compared to $3,062,373 for the three months ended September 30, 2022. The decrease in product revenues for the period is attributable to the Entertainment Segment’s (the “Entertainment Segment”) efforts to reduce expenses and maximize their margins, thus leading to a significant decrease in product revenue for the three months ended September 30, 2023 compared to the three months in September 30, 2022. Service and other revenues also experienced a decline during the three months ended September 30, 2023, in comparison to the same period in 2022, due to a reduction in marketing expenses within the Entertainment Segment, that resulted in a correlating decline in service revenues for the period. The primary reason for the overall revenue decrease is a decrease of $876,542, or (33%), in service revenues from 2022 levels at the Entertainment Segment, due to the reduction in marketing expenses within the Entertainment Segment throughout the period.
• Overall gross profits for the three months ended September 30, 2023 were $1,595,500, an increase of $630,649, or 106%, as compared to $595,500 for the three months ended September 30, 2022. The overall increase is attributable to the consistent focus on the cost of goods sold, particularly surrounding the Entertainment Segment, as well as the enhanced margins within the Video Solutions Segment (the “Video Solutions Segment”), with its newer product offerings. Our goal is to improve our margins over the longer term based on the expected margins generated by our new recent Revenue Cycle Management Operating Segment and Entertainment Segment together with our Video Solutions Segment and its expected margins from our EVO-Fleet, EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, Shield disinfectants and our cloud evidence storage and management offerings, as they gain traction in the marketplace. In addition, if revenues from the Video Solutions Segment increase, we will seek to further improve our margins from this segment through expansion and increased efficiency utilizing fixed manufacturing overhead components. We plan to continue our initiative to more efficient management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.

2023 Operating Results

Total revenues for the three months ended September 30, 2023 and 2022 were $6,337,699 and $8,484,153, respectively, a decrease of $2,146,454 (25%).

Overall gross profit for the three months ended September 30, 2023 and 2022 was $1,226,149 and $595,500, respectively, an increase of $630,649 (106%). The overall increase is attributable to the Entertainment Segment reaching profitability for the three months ended September 30, 2023 along with a sustained gross profit within the Video Solutions Segment and Revenue Cycle Management Operating Segment. Further, a decrease in the overall cost of sales as a percentage of overall revenues to 81% for the three months ended September 30, 2023 from 93% for the three months ended September 30, 2022 also contributed to improved gross profits.