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DIGITAL ANGEL CORPORATION ANNOUNCES 2OO6 FOURTH QUARTER AND FULL
YEAR RESULTS
SO. ST. PAUL, MN (March 5, 2007) -- 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 financial results for its fourth
quarter ended December 31, 2006, and full year 2006.
Revenue for
the fourth quarter of 2006 was $15.0 million and the loss from continuing
operations was $2.7 million, or $0.06 loss per share, compared to revenue
of $14.8 million and a loss from continuing operations of $7.1 million, or
$0.16 loss per share in the fourth quarter of 2005. For the 2006 full year
revenue was $57.0 million and the loss from continuing operations was $6.8
million, or $0.15 loss per share, compared to revenue of $56.8 million and
a loss from continuing operations of $9.5 million, or $0.22 loss per
share, for the 2005 full year. Full year 2006 Animal Applications revenue
was up $2.1 million, or 5.8%, reflecting an increase in livestock and
companion pet sales. Offsetting this increase was a decline in GPS and
Radio Communications revenue of $1.9 million, or 9.3%, in 2006 compared to
2005. The decrease primarily relates to reduced revenue at Signature
Industries of approximately $2.2 million, which is primarily due to the
completion of the Indian government contract in May 2005.
Digital
Angel President and CEO Kevin McGrath commented, “We are very optimistic
about 2007 with substantial growth forecast for both visual and electronic
livestock tags, and triple-digit growth forecast for companion pet
microchips as a result of Schering-Plough’s new business model in the
United States. In addition, we expect significant growth at Signature
Industries led by increased revenues for the SARBE business and the
McMurdo acquisition. As for McMurdo, we anticipate closing the acquisition
later this month.”
The highlights for the 2006 fourth quarter and
full year included:
- The Company entered into an agreement to acquire the assets of
McMurdo Marine Electronics, the U.K.’s premier manufacturer of emergency
location beacons, for approximately $6.1 million (USD), with additional
deferred payments up to $3 million (USD), depending upon performance of
the business following the sale.
- The Company added Tom Hoyer as Chief Financial Officer; Rae Powell
as Vice President of Sales and Marketing for the North American Animal
Applications business; John Braly, a former executive with the National
Cattlemen’s Beef Association, as new Vice President of Business
Development and Industry Relations; and Patricia Petersen as General
Counsel.
Subsequent to the end of 2006, is the following highlight:
- The Company signed a new multi-year exclusive distribution agreement
with Schering-Plough Home Again LLC to provide electronic identification
microchips and scanners as part of the HomeAgain™ Proactive Pet Recovery
Network.
Additionally, within its animal applications business in 2006, the
Company expanded its South American operations by winning approval from
the Chilean government to begin selling visual and electronic RFID
livestock tags. Furthermore, the Company was awarded a $10 million
contract extension with the Bonneville Power Administration, a federal
agency under the U.S. Department of Energy, to electronically track
indigenous salmon populations. In 2007, the Company was awarded a
multi-year contract worth up to $10 million with the U.S. Army Corps of
Engineers for Passive Integrated Transponder technology, used in
conjunction with RFID antennae, to monitor fish movement in rivers and dam
passages.
The Company’s Outerlink business unit won a $3.2 million
contract with the South Carolina Army National Guard for OuterLink’s
satellite-based Automatic Flight Following System to communicate with
helicopter and ground vehicle fleets at the McEntire National Guard Base
at Eastover, South Carolina. Moreover, the Company’s SARBE business unit
was one of only two companies awarded a contract from the U.S. Air Force
to develop a new survival radio for military aircraft to replace the
URT33, which is carried in air crew survival packs and sets off a distress
signal in an emergency.
Results Conference Call
A conference call for institutional investors to discuss the results
for the 2006 fourth quarter and full year will take place today at 5:00 pm
EST, and will be broadcast live over the Internet. The live webcast may be
accessed by visiting the Company’s site at http://www.digitalangelcorp.co/m
or by going to Precision IR's webcast site at http://www.vcall.com/. Web
participants are encouraged to 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 (http://www.digitalangelcorp.com/)
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 humans, pets, fish, 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), which also owns a
majority position in VeriChip Corporation (NASDAQ: CHIP).
This press release includes forward-looking statements, including
statements regarding (i) the Company’s growth forecast for its products;
(ii) the expected growth at Signature industries; and (iii) the Company’s
expectations regarding receiving government approvals for the McMurdo
acquisition and the expected timing of the closing of the McMurdo
acquisition. These forward-looking statements may be affected by the risks
and uncertainties in the Company’s business. This information is qualified
in its entirety by cautionary statements and risk factor disclosures
contained in the Company’s Securities and Exchange Commission filings,
including the Company’s annual report on Form 10-K for the fiscal year
ended December 31, 2005, as amended, and its quarterly reports. The
Company wishes to caution readers that certain important factors may have
affected and could in the future affect the Company’s actual results and
could cause the Company’s actual results for subsequent periods to differ
materially from those expressed in any forward-looking statement made by
or on behalf of the Company. Such risk factors include generally,, but are
not limited to, the following: the Company's ability to successfully
implement its business strategy; the Company's expectation that it will
continue to incur operating losses; the Company's ability to fund its
operations and to pay its debt obligations; the impact of Applied
Digital's voting control over the Company; conflicts of interest among
Applied Digital, VeriChip and the Company; the Company's reliance on a
single source supplier for its implantable microchip; the Company's
ability to compete as its competitors improve the performance of and
support for their new products, and as they introduce new products,
technologies or services; the negative impact of the expiration of patents
in 2008 and 2009 relating to the implantable microchip technology; the
Company's ability to successfully defend itself against infringements of
our patents; the Company's ability to comply with current and future
regulations relating to its businesses; the impact of technological
obsolescence; the Company's reliance on government contractors; the loss
of Schering-Plough as the exclusive distributor of the Company's products;
the Company's dependence on a small team of senior management; risks of
foreign operations; the impact of the write-off of goodwill and other
intangible assets; the impact of new accounting pronouncements; and the
Company's ability to maintain proper and effective internal accounting and
financial controls. With respect to forward-looking statements regarding
the McMurdo acquisition, the following additional risks: the ability of
the parties to the acquisition agreement to satisfy their respective
closing conditions; and the Company's ability to successfully integrate
McMurdo's operations into its operations. The Company can offer no
assurances that any projections, assumptions or forecasts made or
discussed in this release will be met, and investors should understand the
risks of investing solely due to such projections. The Company undertakes
no obligation to revise any forward-looking statements in order to reflect
events or circumstances that may arise after the date of this press
release.
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