Brekford Announces Second Quarter Operating Results
Automated Traffic Safety Enforcement Program Continues to Gain Momentum
(firmenpresse) - HANOVER, MD -- (Marketwire) -- 07/31/12 -- Brekford Corp. (the "Company") (OTCBB: BFDI) (OTCQB: BFDI), a leading public safety technology service provider of fully integrated traffic safety solutions, vehicle up-fitting, and rugged mobile technology, today announced its operating results for the second quarter and first half of 2012.
"While lower municipal tax revenues and the delayed introduction of new law enforcement vehicle models by auto manufacturers resulted in a modest decline in up-fitting revenue in our second quarter, we have been very pleased with our customers' enthusiastic response to the Company's automated traffic safety enforcement solutions during the first half of 2012," stated C.B. Brechin, Chief Executive Officer of Brekford Corp. "We currently have over twelve automated traffic safety enforcement programs operating within the Mid-Atlantic region of the U.S. While our operating results during the first half of 2012 were burdened with front-end costs involving the implementation of new contracts, the terms of our automated traffic enforcement contracts range from three to six years. We expect the profitability of such contracts to increase significantly as the number of systems expands, thereby allowing us to realize the benefits of operating leverage. This should become evident in the second half of 2012 and, based upon currently available information, we continue to anticipate an increase in earnings for the year ending December 31, 2012. In terms of the market opportunity, the Insurance Institute for Highway Safety estimates the U.S. market potential for automated speed enforcement at 35,000 to 50,000 systems and red light enforcement at 20,000 to 30,000 systems. Brekford's commitment to technological innovation and superb customer service should allow us to capture a meaningful share of this market in coming years."
"In the vehicle up-fitting segment of our business, we announced last month a partnership with Trimble Navigation Limited, the largest Automatic Vehicle Location provider in the country, which is intended to meet a growing need among Federal agencies to reduce fleet operating costs through better management of mileage, idle time and fuel usage, while complying with Federal mandates that require greenhouse emissions to be measured, reported and reduced."
"We are particularly pleased with the favorable influence that our automated speed enforcement cameras are having upon child safety in school zones, where most of our installed systems are located," continued Brechin. "City officials and law enforcement agencies have reported up to a 90 percent reduction in speed violations following the installation of our cameras. This not only represents a dramatic improvement in public safety, but by reducing the costs of speed enforcement for local governments and eliminating the need for police officers to be assigned to radar duty, our systems make it possible for municipalities to more effectively utilize their scarce law enforcement resources in a tax revenue-challenged environment. We are currently bidding on a number of speed and red light enforcement contracts, including several in large cities in the eastern and midwestern United States. Recent innovations by our research and development team should allow Brekford to be competitive in the bidding process. We also devoted significant resources during the second quarter to develop and prepare for the launch of a new business initiative that will leverage our customer service and collections capabilities into additional service offerings that can reduce the resources that municipalities currently devote to accounts receivable management. At this early stage in our growth, such investments represent a higher priority than managing for a target margin in the near term."
Net sales increased to $4.1 million for the quarter ended June 30, 2012, compared with $4.0 million in the quarter ended June 30, 2011. A modest decrease in vehicle up-fitting revenue was more than offset by higher revenue from the Company's automated traffic enforcement business segment.
Net income for the second quarter of 2012 totaled $126,535, which was virtually unchanged from first quarter 2012 net income and compared with net income of $332,084 in the second quarter of 2011. Diluted earnings per share totaled $0.00 in the most recent quarter, versus $0.01 in the prior-year period.
Gross profit for the second quarter of 2012 increased to $1,083,449, compared with $1,046,456 in the second quarter of 2011. Gross profit margin improved to 26.5% of revenue during the second quarter of 2012, compared with 26.1% in the year-earlier quarter, primarily due to higher profit margins from the automated traffic enforcement program. The Company expects gross profit margins to improve in the remaining quarters of the year as automated traffic enforcement revenue continues to grow with new contracts.
Total operating expenses increased from $688,362 in the second quarter of 2011 to $919,893 for the second quarter of 2012, due to increased marketing and business development activities, higher interest expense and greater equipment depreciation expenses.
Net sales increased 10.3% to approximately $8.2 million in the six months ended June 30, 2012, compared with approximately $7.5 million in the first half of 2011. The increase reflected higher sales of automatic traffic enforcement systems, Rugged IT Products, and electronic ticketing systems.
Net income for the first half of 2012 totaled $249,845, compared with $445,035 in the first half of 2011. Diluted earnings per share were unchanged at $0.01 in the six months ended June 30, 2012, versus $0.01 in the six months ended June 30, 2011.
Gross profit for the first half of 2012 increased 19.7% to $2,154,985, compared with $1,799,818 in the first half of the previous year. Gross profit margin improved to 26.2% of revenue during the most recent six-month period, compared with 24.1% in the corresponding period of the previous year, primarily due to higher profit margins from the automated traffic enforcement program.
Total operating expenses increased from $1,299,391 in the six months ended June 30, 2011 to $1,830,799 in the first half of 2012, due primarily to increased staff expenses related to the automated traffic enforcement program, higher marketing and business development activities, increased interest expense and higher equipment depreciation expenses.
As of June 30, 2012, the Company's total assets approximated $9.8 million, compared with approximately $8.1 million on December 31, 2011. Cash on hand increased 51% during the first half of 2012 to approximately $2.8 million, versus approximately $1.8 million at the end of 2011, and the Company's current ratio stood at 1.8-to-1.0 ($7.2 million in current assets vs. $4.0 million in current liabilities). There were no borrowings outstanding against the Company's bank line of credit as of June 30, 2012.
On July 12, 2012, subsequent to the end of its second quarter, the Company closed on an aggregate $3.5 million credit facility with PNC Bank, N.A., consisting of a $3.0 million revolving line of credit and a $500,000 non-revolving equipment credit line. Amounts borrowed under the revolving credit facility bear interest at an annual rate equivalent to the daily LIBOR rate plus 2.5%. "We are very pleased to enter into a new banking relationship with PNC Bank," noted Brechin. "The revolving credit facility should provide the working capital necessary to continue the aggressive expansion of our automated traffic enforcement program and our new receivables management initiative."
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 up-fitting services. Brekford's combination of up-fitting 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 .
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.
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Datum: 31.07.2012 - 06:00 Uhr
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