Digital Angel Corporation Announces 2006 Second Quarter, Six-Month Results
03 August 2006 - 10:30PM
PR Newswire (US)
Quarterly Revenues Strong in Companion Pets and Livestock SO. ST.
PAUL, Minn., Aug. 3 /PRNewswire-FirstCall/ -- Digital Angel
Corporation (AMEX:DOC), an advanced technology company in the field
of rapid and accurate identification, location tracking and
condition monitoring of high-value assets, today announced that
revenues were $13.0 million for the second quarter ended June 30,
2006 and $28.8 million for the first six months ended June 30,
2006. The Company reported a net loss of $2.1 million, or $0.05
loss per share, for the second quarter of 2006, compared with a net
loss of $891,000 or $0.02 loss per share, in the same period of
2005. President and CEO Kevin N. McGrath said the declines were
seasonal and temporary in nature and consistent with the Company's
expectations. Mr. McGrath also noted that the Company's 2005
results included significant revenue from the Company's
London-based Signature division's SARBE(R) unit including an $8.0
million contract to deliver search and rescue beacons to the Indian
government which was completed in May 2005. Additionally, current
period results were affected by investment in start-up activities
in South America. The highlights of the second quarter and first
six months of 2006 included: * Revenues in the Animal Applications
segment for the first six months of 2006 increased by 19.5 percent
over the prior year period. * OuterLink subsidiary awarded
12-month, $3.2 million contract from South Carolina Air National
Guard for satellite-based flight tracking system. * Company granted
government approval to sell the Company's visual and electronic
RFID tags in Chile. * Received $800,000 order from the United
Kingdom Ministry of Defense for replacement batteries for the
SARBE(R) 7 Search and Rescue Beacon. * Signature Industries
received approval from Cospas-Sarsat for a new, lighter, more
secure emergency location transmitter. * Granted U.S. patent for
its Bio-Thermo(R) (temperature-sensing) implantable RFID microchip
to determine the body temperature of host animal. Subsequent to the
end of the second quarter, are the following highlights: *
Additional $350,000 battery order placed in July for the SARBE 7
Search and Rescue Beacon. * In July, began manufacturing electronic
and visual tags in Argentina. * On August 1st, the U.S. Department
of Agriculture approved Digital Angel as the first livestock RFID
tagging system to win government approval to protect the health of
the national meat supply chain. * Company received from the U.S.
Air Force notice of award of a contract to develop a new air crew
survival radio which will be compatible with 406 MHz radio
frequency to be implemented in 2009. The Company is awaiting final
contract from the U.S. Air Force. "We spent much of the first half
of 2006 building momentum for what we think will be a strong second
half of the year," McGrath said. "Our Animal Applications segment
enjoyed its second strong quarter in a row. This division also
produced increases in sales over a small base of visual and
electronic tags and sales in South America. We also had important
contributions this quarter from our Signature Industries and
OuterLink subsidiaries, which won important contracts that should
allow us to book revenue throughout the year. We believe that we
remain poised to grow this year and beyond thanks to expanding
business segments located all over the world." Revenue for the
first six months of 2006 was $28.8 million with a net loss of $2.7
million, or $0.06 loss per share, compared to revenue of $28.3
million with a net loss of $1.4 million, or $0.03 loss per share in
the first six months of 2005. Revenue for the Company's Animal
Applications segment was $8.4 million in this year's second quarter
compared to $8.3 million in the prior year period. Sales to
livestock and companion animal customers were up $0.7 million and
$0.4 million, respectively, offset by decreased sales of $1.1
million to fish and wildlife customers. For the first six months of
2006, revenues were up 19.5 percent to $19.9 million compared to
$16.6 million for the first six months of 2005. In the GPS and
Radio Communications segment, revenue for this year's second
quarter was $4.6 million compared to $6.5 million in the second
quarter of 2005. For the first six months of 2006, revenues were
$8.9 million compared to $11.6 million for the first six months of
2005. Revenue for the GPS and Radio Communications segment is down
in the three and six months ended June 30, 2006 due to the May 2005
completion of the SARBE G2R contract with India, as previously
reported. McGrath noted that the GPS and Radio Communications
segment has executed well this year and has received important
orders including a $3.2 million contract with the South Carolina
Air National Guard that is expected to increase revenue in the
latter half of 2006. Chief Financial Officer James P. Santelli
noted that as of June 30, 2006, the Company's balance sheet showed
cash of $7.1 million, total assets of $88.6 million, long term debt
and notes payable of $3.6 million and total stockholders' equity of
$71.8 million. "Financially we remain on very solid footing and we
believe we are positioned to expand in the second half of 2006 and
take advantage of opportunities that arise," Santelli said. Results
Conference Call A conference call for institutional investors to
discuss the results for the second quarter of fiscal year 2006 will
take place Thursday, Aug. 3 at 11:00 a.m. EDT, and will be
broadcast live over the Internet. The live webcast may be accessed
by visiting the Company's site at http://www.digitalangelcorp.com/
or http://www.vcall.com/. Web participants should go to the website
at least 15 minutes prior to the start of the call to register,
download and install any necessary audio software. The online
archive will be available immediately and continue for seven days.
About Digital Angel Corporation Digital Angel Corporation develops
and deploys sensor and communications technologies that enable
rapid and accurate identification, location tracking, and condition
monitoring of high-value assets. Applications for the Company's
products include identification and monitoring of pets, fish,
humans, poultry and livestock through its patented implantable
microchips; location tracking and message monitoring of vehicles
and aircraft in remote locations through systems that integrate GPS
and geosynchronous satellite communications; and monitoring of
asset conditions such as temperature and movement, through advanced
miniature sensors. Digital Angel Corporation is majority-owned by
Applied Digital Inc. (NASDAQ:ADSX). For more information about
Digital Angel, please visit http://www.digitalangelcorp.com/.
Contact: Allen & Caron Inc Michael Lucarelli (investors) Len
Hall (media) 212-691-8087 949-474-4300 DIGITAL ANGEL CORPORATION
AND SUBSIDIARIES Condensed Balance Sheets (in thousands) As of As
of June 30, December 31, 2006 2005 Total Current Assets $26,965
$30,818 Property and Equipment, net 8,341 8,602 Goodwill 51,197
48,491 Other Intangible Assets, net 1,723 1,813 Other Assets, net
389 483 Total Assets $88,615 $90,207 Total Current Liabilities
$11,143 $12,401 Long Term Debt and Notes Payable 3,577 3,656 Other
Long Term Liabilities 1,553 1,086 Minority Interest 550 618
Stockholders' Equity 71,792 72,446 Total Liabilities and
Stockholders' Equity $88,615 $90,207 Statement of Operations Data
(in thousands, except per share amounts) For the Three Months For
the Six Months Ended June 30, Ended June 30, 2006 2005 2006 2005
Total Net Revenue $12,956 $14,860 $28,778 $28,263 Gross Profit
5,062 6,640 11,838 12,635 Selling, General and Administrative
Expenses 6,003 6,118 12,235 11,446 Research and Development
Expenses 1,151 1,119 2,341 2,205 Operating Loss (2,092) (597)
(2,738) (1,016) Net Loss (2,124) (891) (2,710) (1,384) Net Loss per
Common Share - Basic and Diluted $(0.05) $(0.02) $(0.06) $(0.03)
Weighted Average Common Shares Outstanding - Basic and Diluted
44,286 43,917 44,097 43,792 Selected Cash Flow Data (in thousands)
For the Six Months Ended June 30, 2006 2005 Net Cash Used in
Operating Activities $(1,843) $(1,378) Net Cash Used in Investing
Activities (1,633) (1,772) Net Cash Provided By (Used In) Financing
Activities 491 (1,734) Net Decrease in Cash (2,958) (4,830)
DATASOURCE: Digital Angel Corporation CONTACT: Investors, Michael
Lucarelli, +1-212-691-8087, , or Media, Len Hall, +1-949-474-4300,
, both of Allen & Caron Inc, for Digital Angel Corporation Web
site: http://www.vcall.com/ Web site:
http://www.digitalangelcorp.com/
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