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| 8-K - DRI CORPORATION 8-K - DRI CORP | a6725778.htm |
Exhibit 99.1
DRI Corporation Posts First Quarter 2011 Results
Gross Margins Improving
DALLAS--(BUSINESS WIRE)--May 16, 2011--DRI Corporation (NASDAQ: TBUS), a digital communications technology leader in the global surface transportation and transit security markets, announced today that it posted net sales of $19.1 million and a net loss of $680 thousand, or 6 cents per basic and diluted common share outstanding, for the period ended March 31, 2011. These results compare to net sales of $22.1 million and a net loss of $995 thousand, or 8 cents per basic and diluted common share outstanding, for first quarter 2010. Basic and diluted weighted-average shares outstanding were 11.9 million for the reporting period, as compared to 11.8 million a year ago.
David L. Turney, the Company’s Chairman of the Board and Chief Executive Officer, said: “First quarter 2011 revenues were lower than first quarter 2010 revenues due to heavily concentrated sales activity in India during the same period last year. Gross margins improved in most of our business units. Selling, general and administrative expense percentage ratios were up due to calculations involving revenue volume; however, even inclusive of an upward, period-over-period push from currency exchange rates, the actual SG&A dollar amount was essentially flat.”
Earlier today, the Company filed with the U.S. Securities and Exchange Commission a Quarterly Report on Form 10-Q for the period ended March 31, 2011.
ORDER FLOW
“Overall, our order flow for first quarter 2011 was good -- although it initially moved upward at a slower rate than we had expected. Presently, the Company’s order flow is consistent with management’s projections for fiscal year 2011,” Mr. Turney said.
U.S. Transit Market
“As mentioned previously, we have had concerns about the U.S. transit market since the latter part of fiscal year 2010 and continuing in first half of fiscal year 2011. We did factor our concerns into our planning for fiscal year 2011 and the first quarter’s results came in only moderately less than our expectations. However, we believe the U.S. transit market continues to be impacted by the inability of the U.S. Congress and the Obama administration to pass replacement legislation for the now expired Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (“SAFETEA-LU”) legislation. Although federal legislators have extended SAFETEA-LU funding through the end of September 2011, we believe the lack of passage of a well-funded, six-year, multi-modal surface transportation authorization bill remains troublesome for the U.S. public transportation industry as a whole -- although the impact of the stalled new funding legislation appears to have lessened to some extent in terms of our present domestic order flow. We continue to believe that long-term federal funding legislation to replace SAFETEA-LU is not likely to occur until 2012 or after,” Mr. Turney said.
International Transit Markets
“Removing the distortion caused by India’s exceptionally high revenues during first quarter 2010, our international business continued to grow in first quarter 2011. Our present outlook indicates our international business, viewed on that basis, will likely continue to grow throughout fiscal year 2011; however, India is progressing slower than we expected,” Mr. Turney said.
FISCAL YEAR 2011 OUTLOOK
“We expect to see market recovery as we proceed through fiscal year 2011. We also expect fiscal year 2011 revenue to exceed that of fiscal year 2010. We project a moderate increase in fiscal year 2011 gross margins primarily due to ongoing cost reduction initiatives and reduction of component pricing resulting from leveraging on combined higher volume purchasing,” Mr. Turney said.
CONFERENCE CALL INFORMATION
Management will discuss first quarter 2011 results during an investors’ conference call on May 18, 2011, at 11 a.m. (Eastern).
- To participate in the live conference call, dial one of the following telephone numbers approximately five minutes prior to the start time: domestic, (800) 853-3895; or international, (334) 323-7224. The confirmation code is “DRI.”
- Telephone replay will be available through June 30, 2011, via the following telephone numbers: domestic, (877) 870-5176; or international, (858) 384-5517. The replay passcode is 13033.
- To participate via webcast, go to http://viavid.net/dce.aspx?sid=000086E2. The webcast will be archived until Aug. 16, 2011.
MARK YOUR CALENDAR
- On June 17, 2011, the Company will hold its Annual Meeting of Shareholders at The Westin Galleria Dallas, 13340 Dallas Parkway, Dallas, Texas 75240. Registration will begin at 8 a.m. (Central) and the business meeting will commence at 8:30 a.m. (Central). Shareholders of record at the close of business on April 28, 2011, are entitled to receive notice of, and to vote at, the Annual Meeting of Shareholders and any adjournment thereof; materials were mailed May 6, 2011.
- On or about Aug. 15, 2011, the Company plans to file with the SEC a Form 10-Q for the quarter ended June 30, 2011.
- On or about Aug. 16, 2011, management plans to review second quarter 2011 results during an investors’ conference call.
ABOUT THE COMPANY
DRI Corporation is a digital communications technology leader in the global surface transportation and transit security markets. We manufacture, sell and service Mobitec® and TwinVision® electronic information display systems and Digital Recorders® engineered systems. These proprietary systems and other related products and services help increase the mobility, flow, safety and security of public transportation agencies and their passengers. From our inception in 1983 through our fiscal year-end on Dec. 31, 2010, we’ve grown our product installations to include public transit fleets in more than 50 countries, our annual sales revenues to $87.3 million, and our global workforce to 275 people. We presently have operations and/or sales offices in Australia, Brazil, Germany, Singapore, Sweden and the United States, a joint venture in India, and corporate administrative offices in Dallas, Texas. We also are expanding into Russia. The next time you see a bus, think of us.SM For more information, visit www.digrec.com.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements concerning the Company’s and/or management’s expectations for: the timing or amount of future revenues; profitability; business and revenue growth trends; impact of cost reduction initiatives; impact of the global economic slowdown on served markets and operations; status of U.S. federal funding legislation for public transportation; fiscal year 2011 outlook; assessment of strategic alternatives; increasing shareholder value; plans regarding the Company’s Strategic Business Plan; as well as any statement, express or implied, concerning future events or expectations or which use words such as “suggest,” “expect,” “fully expect,” “expected,” “appears,” “believe,” “plan,” “anticipate,” “would,” “goal,” “potential,” “potentially,” “range,” “pursuit,” “run rate,” “stronger,” “preliminarily,” “guidance,” “may,” etc., is a forward-looking statement. These forward-looking statements are subject to risks and uncertainties, including risks and uncertainties that the Company’s and/or management’s expectations may not prove accurate over time for: the timing or amount of future revenues; profitability; business and revenue growth trends; impact of cost reduction initiatives; impact of the global economic slowdown on served markets and operations; status of U.S. federal funding legislation for public transportation; fiscal year 2011 outlook; assessment of strategic alternatives; increasing shareholder value; plans regarding the Company’s Strategic Business Plan; as well as other risks and uncertainties set forth in the Company’s Annual Report on Form 10-K as filed April 15, 2011 and Quarterly Report on Form 10-Q as filed May 16, 2011, particularly those identified in Risk Factors Affecting Our Business. There can be no assurance that any expectation, express or implied, in a forward-looking statement will prove correct or that the contemplated event or result will occur as anticipated.
| DRI CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except shares and per share amounts) | ||||||||
|
March 31, 2011 (Unaudited) |
December 31, 2010 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 1,377 | $ | 1,391 | ||||
| Trade accounts receivable, net | 16,801 | 15,678 | ||||||
| Current portion of note receivable | 86 | 86 | ||||||
| Other receivables | 259 | 300 | ||||||
| Inventories, net | 15,211 | 15,134 | ||||||
| Prepaids and other current assets | 1,135 | 1,389 | ||||||
| Deferred tax assets, net | 676 | 613 | ||||||
| Total current assets | 35,545 | 34,591 | ||||||
| Property and equipment, net | 1,378 | 1,388 | ||||||
| Software, net | 6,214 | 5,757 | ||||||
| Goodwill | 11,149 | 10,398 | ||||||
| Intangible assets, net | 662 | 651 | ||||||
| Other assets | 918 | 1,045 | ||||||
| Total assets | $ | 55,866 | $ | 53,830 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Lines of credit | $ | 9,711 | $ | 8,454 | ||||
| Loans payable | 362 | 442 | ||||||
| Current portion of long-term debt | 961 | 944 | ||||||
| Current portion of foreign tax settlement | 477 | 550 | ||||||
| Accounts payable | 9,559 | 8,703 | ||||||
| Accrued expenses and other current liabilities | 5,651 | 6,354 | ||||||
| Preferred stock dividends payable | 124 | 19 | ||||||
| Total current liabilities | 26,845 | 25,466 | ||||||
| Long-term debt and capital leases, net | 6,085 | 6,239 | ||||||
| Deferred tax liabilities, net | 87 | 84 | ||||||
| Liability for uncertain tax positions | 891 | 723 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' Equity | ||||||||
| Series K redeemable, convertible preferred stock, $0.10 par value, | ||||||||
| liquidation preference of $5,000 per share; 475 shares authorized; 439 shares issued and outstanding at March 31, 2011 and December 31, 2010; redeemable at the discretion of the Company at any time. | 1,957 | 1,957 | ||||||
| Series E redeemable, nonvoting, convertible preferred stock, $0.10 par value, | ||||||||
| liquidation preference of $5,000 per share; 80 shares authorized; 80 shares issued and outstanding at March 31, 2011 and December 31, 2010; redeemable at the discretion of the Company at any time. | 337 | 337 | ||||||
| Series G redeemable, convertible preferred stock, $0.10 par value, | ||||||||
| liquidation preference of $5,000 per share; 725 shares authorized; 536 shares issued and outstanding at March 31, 2011 and December 31, 2010; redeemable at the discretion of the Company at any time. | 2,398 | 2,398 | ||||||
| Series H redeemable, convertible preferred stock, $0.10 par value, | ||||||||
| liquidation preference of $5,000 per share; 125 shares authorized; 76 shares issued and outstanding at March 31, 2011 and December 31, 2010; redeemable at the discretion of the Company at any time. | 332 | 332 | ||||||
| Series AAA redeemable, nonvoting, convertible preferred stock, $0.10 par value, | ||||||||
| liquidation preference of $5,000 per share; 166 shares authorized; 166 shares issued and outstanding at March 31, 2011 and December 31, 2010; redeemable at the discretion of the Company at any time. | 830 | 830 | ||||||
| Common stock, $0.10 par value, 25,000,000 shares authorized; 11,858,270 and | ||||||||
| 11,838,873 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively. | 1,186 | 1,184 | ||||||
| Additional paid-in capital | 30,320 | 30,374 | ||||||
| Accumulated other comprehensive income - foreign currency translation | 4,444 | 3,180 | ||||||
| Accumulated deficit | (20,627 | ) | (20,121 | ) | ||||
| Total DRI shareholders' equity | 21,177 | 20,471 | ||||||
| Noncontrolling interest - Castmaster Mobitec India Private Limited | 781 | 847 | ||||||
| Total shareholders' equity | 21,958 | 21,318 | ||||||
| Total liabilities and shareholders' equity | $ | 55,866 | $ | 53,830 | ||||
| DRI CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||
| FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 | ||||||||
| (In thousands, except share and per share amounts) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Net sales | $ | 19,089 | $ | 22,129 | ||||
| Cost of sales | 12,957 | 16,805 | ||||||
| Gross profit | 6,132 | 5,324 | ||||||
| Operating expenses | ||||||||
| Selling, general and administrative | 6,027 | 5,981 | ||||||
| Research and development | 156 | 108 | ||||||
| Total operating expenses | 6,183 | 6,089 | ||||||
| Operating loss | (51 | ) | (765 | ) | ||||
| Other income (loss) | 2 | (1 | ) | |||||
| Foreign currency gain (loss) | (289 | ) | 89 | |||||
| Interest expense | (381 | ) | (360 | ) | ||||
| Total other income and expense | (668 | ) | (272 | ) | ||||
| Loss before income tax benefit | (719 | ) | (1,037 | ) | ||||
| Income tax benefit | 147 | 252 | ||||||
| Net loss | (572 | ) | (785 | ) | ||||
| Less: Net (income) loss attributable to noncontrolling interest, net of tax | 66 | (102 | ) | |||||
| Net loss attributable to DRI Corporation | (506 | ) | (887 | ) | ||||
| Provision for preferred stock dividends | (174 | ) | (108 | ) | ||||
| Net loss applicable to common shareholders of DRI Corporation | $ | (680 | ) | $ | (995 | ) | ||
| Net loss per share applicable to common shareholders of DRI Corporation | ||||||||
| Basic and diluted | $ | (0.06 | ) | $ | (0.08 | ) | ||
| Weighted average number of common shares outstanding | ||||||||
| Basic and diluted | 11,851,804 | 11,753,359 | ||||||
CONTACT:
DRI Corporation Contact:
Veronica B. Marks
Vice
President, Corporate Communications and Administration
Phone: (214)
378-4776
Fax: (214) 378-8437
E-Mail: ir@digrec.com