EXHIBIT 99.1


duostech

FOR IMMEDIATE RELEASE


Duos Technologies Group Reports First Quarter 2019 Results


Continued Growth and Operational Execution Leads to Record Start for the Year


Jacksonville, FL/ Accesswire / May 14, 2019 - Duos Technologies Group, Inc. (“Duos” or the “Company”) (OTCQB: DUOT), a provider of intelligent security analytical technology solutions, reported financial results for the first quarter ended March 31, 2019.


First Quarter 2019 and Recent Operational Highlights


·

Launched apis3D, the Companys next generation automated pantograph inspection system for transit and light rail train inspection, which is expected to accelerate the rail industrys ongoing transition to automated inspection systems.

·

Successfully completed the first deployment of the Company’s new dcVue™ software, licensed as a commercial application in partnership with FNT Software, a leading provider of integrated software solutions for IT management, data center infrastructure management and telecommunication infrastructure management worldwide.

·

Launched truevue360 subsidiary, to focus on driving additional revenues and margin to the Company by developing, implementing and marketing artificial intelligence and deep learning solutions for a broad range of industries.

·

Strengthened leadership and increased industry experience of the Companys Board of Directors through the appointment of Ken Ehrman as an Independent Director, who will serve as head of the compensation and nominating committees.

·

Added key technical, development and project management staff and increased headcount to 58 at quarter end.

·

Completed staffing of the Companys truevue360 development team and remain on schedule for the platform to become fully operational by the end of the second quarter of 2019.

·

Initiated new auditing project at a major federal agency using the dcVue software and Duos ITAM professional staff, with anticipated audits to be conducted at up to 35 data centers in calendar year 2019.

·

Following initial $1.0 million contract announced in Q4 2018, awarded additional business from regional bank with national footprint to secure additional large facility.


First Quarter 2019 Financial Results


Total revenue increased 279% to $4.35 million from $1.15 million in the same quarterly period last year. The significant increase in total revenue was driven by the current strength of the projects portion of the Company’s business currently being undertaken as well as increases in revenue in all areas of the Company’s business.




Gross profit increased 347% to $2.13 million (49.0% of total revenue) from $477,000 (41.5% of total revenue) in the same quarterly period last year. The significant increase in gross profit was mainly the result of the increase in project revenue and the positive effect of revenue increases from new projects with a lower overall growth in associated costs. Gross profit as a percentage of revenue is also improving as a result of actions the Company has taken to streamline its operations.


Operating expenses increased 71% to $2.08 million from $1.22 million in the same quarterly period last year. The increase in operating expenses was primarily due to an increased number of employees in both the Company’s operating subsidiary, Duos Technologies, Inc. as well as in the truevue360™ subsidiary,  and additional contract expenses related to an overall significant increase in revenues. Selling and marketing expenses, research and development, and other general and administrative costs increased in line with the Company’s investment in resources to grow the business.


Net income totaled $44,000, an improvement from net loss of $743,000 in the same quarter a year-ago. The improvement in net income was primarily attributable to significant increase in revenue over the comparable quarter in 2018 and a lower rate of operating expense growth.


Financial Outlook

For the fiscal year ending December 31, 2019, the Company expects total revenue to be between $14.0 million and $15.0 million, which would represent an approximate 16% to 25% increase over 2018. The Company’s guidance is based on contracts in backlog and near-term pending orders that are already performing or scheduled to be executed in or before the fourth quarter of 2019. Management also anticipates securing additional awards in 2019.


Management Commentary

“The first quarter was a continuation of the overall strong and improving results we’ve been producing for some time,” said Duos Chairman and CEO Gianni Arcaini. “Driven by the substantial and ongoing growth in the project portion of our business, our topline increased by 279%, and we achieved net income profitability for the second time in three quarters. Operationally, we are leveraging our current success by expanding into new market opportunities that utilize our existing technology capabilities in complementary areas, most notably through our truevue360™ subsidiary, which we expect to become fully operational by the end of the second quarter. Additionally, we recently formed a team of top development engineers to implement a number of disruptive technologies in 2019 that have the potential to further change the way rail inspection will be conducted in the future. Altogether, we expect to build on the initial success we delivered in 2018 with another year of growth and improving financial results.”


Conference Call

The Company’s management will host a conference call today, Tuesday, May 14, 2019 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question and answer period.


Date: Tuesday, May 14, 2019

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

U.S. dial-in: (888) 339-2688

International dial-in: (617) 847-3007

Passcode: 82597452




Please call the conference telephone number 5-10 minutes prior to the start time of the conference call. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.


The conference call will be broadcasted live via telephone and available for online replay via the investor section of the Company's website here.


About Duos Technologies Group, Inc.

Duos Technologies Group, Inc. (OTCQB: DUOT), based in Jacksonville, Florida, through its wholly owned subsidiary, Duos Technologies, Inc., provides advanced intelligent security and analytical technology solutions with a strong portfolio of intellectual property. The Company’s core competencies include intelligent technologies that combine machine learning, artificial intelligence and advanced video analytics that are delivered through its proprietary integrated enterprise command and control centraco® platform. The Company provides its broad range of technology solutions with an emphasis on mission critical security, inspection and operations within the rail transportation, retail, petrochemical, government, and banking sectors. Duos Technologies also offers professional and consulting services for large data centers. For more information, visit www.duostech.com.


Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressions or the negative of these terms and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Duos Technologies Group, Inc.’s actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Duos’ Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Duos’ filings with the SEC.


Contacts: Duos Technologies

Corporate

Tracie Hutchins

Duos Technology Group, Inc.
(904) 652-1601
tlh@duostech.com


Investor Relations

Matt Glover or Tom Colton

Gateway Investor Relations

(949) 574-3860

DUOT@GatewayIR.com





DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

REVENUES:

 

 

 

 

 

 

 

 

Project

 

$

3,918,438

 

 

$

844,714

 

Maintenance and technical support

 

 

321,474

 

 

 

257,447

 

IT asset management services

 

 

112,169

 

 

 

45,769

 

 

 

 

 

 

 

 

 

 

Total Revenues

 

 

4,352,081

 

 

 

1,147,930

 

 

 

 

 

 

 

 

 

 

COST OF REVENUES:

 

 

 

 

 

 

 

 

Project

 

 

2,092,994

 

 

 

547,799

 

Maintenance and technical support

 

 

105,324

 

 

 

103,323

 

IT asset management services

 

 

22,919

 

 

 

20,237

 

 

 

 

 

 

 

 

 

 

Total Cost of Revenues

 

 

2,221,237

 

 

 

671,359

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,130,844

 

 

 

476,571

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

 

109,616

 

 

 

41,221

 

Salaries, wages and contract labor

 

 

1,268,779

 

 

 

765,870

 

Research and development

 

 

112,694

 

 

 

135,280

 

Professional fees

 

 

127,919

 

 

 

63,865

 

General and administrative expenses

 

 

465,386

 

 

 

209,837

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

2,084,394

 

 

 

1,216,073

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

 

46,450

 

 

 

(739,502

)

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES):

 

 

 

 

 

 

 

 

Interest Expense

 

 

(2,621

)

 

 

(5,728

)

Gain on settlement of debt

 

 

 

 

 

 

Warrant derivative gain

 

 

 

 

 

 

Other income, net

 

 

340

 

 

 

2,126

 

 

 

 

 

 

 

 

 

 

Total Other Income (Expense)

 

 

(2,281

)

 

 

(3,602

)

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

44,169

 

 

 

(743,104

)

 

 

 

 

 

 

 

 

 

Series A preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) applicable to common stock

 

$

44,169

 

 

$

(743,104

)

 

 

 

 

 

 

 

 

 

Basic Net Income (Loss) Per Share

 

$

0.002

 

 

$

(0.04

)

Diluted Net Income(Loss) Per Share

 

$

0.002

 

 

$

(0.04

)

 

 

 

 

 

 

 

 

 

Weighted Average Shares-Basic

 

 

21,671,240

 

 

 

20,709,478

 

Weighted Average Shares-Diluted

 

 

21,671,240

 

 

 

20,709,478

 




DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

 

$

1,202,415

 

 

$

1,209,301

 

Accounts receivable, net

 

 

3,623,736

 

 

 

1,538,793

 

Contract assets

 

 

286,996

 

 

 

1,208,604

 

Prepaid expenses and other current assets

 

 

309,164

 

 

 

235,198

 

Total Current Assets

 

 

5,422,311

 

 

 

4,191,896

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

257,946

 

 

 

204,226

 

Operating lease right of use asset

 

 

557,485

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS:

 

 

 

 

 

 

 

 

Software Development Costs, net

 

 

35,000

 

 

 

40,000

 

Patents and trademarks, net

 

 

55,529

 

 

 

53,871

 

Total Other Assets

 

 

90,529

 

 

 

93,871

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

6,328,271

 

 

$

4,489,993

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,060,631

 

 

$

1,416,716

 

Accounts payable - related parties

 

 

13,473

 

 

 

13,473

 

Notes payable - financing agreements

 

 

149,899

 

 

 

48,330

 

Line of credit

 

 

30,280

 

 

 

31,201

 

Payroll taxes payable

 

 

160,730

 

 

 

317,573

 

Accrued expenses

 

 

248,593

 

 

 

222,328

 

Current portion-operating lease

 

 

207,688

 

 

 

 

Contract liabilities

 

 

1,249,781

 

 

 

2,248,829

 

Deferred revenue

 

 

298,563

 

 

 

362,528

 

Total Current Liabilities

 

 

4,419,638

 

 

 

4,660,978

 

 

 

 

 

 

 

 

 

 

Lease obligations

 

 

363,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

4,783,195

 

 

 

4,660,978

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT):

 

 

 

 

 

 

 

 

Preferred stock:  $0.001 par value, 10,000,000 authorized, 9,485,000 shares available to be designated

 

 

 

 

 

 

 

 

Series A redeemable convertible cumulative preferred stock, $10 stated value per share, 500,000 shares designated; 0 issued and outstanding at March 31, 2019 and December 31, 2018, convertible into common stock at $6.30 per share

 

 

 

 

 

 

Series B convertible cumulative preferred stock, $1,000 stated value per share, 15,000 shares designated; 2,830 issued and outstanding at March 31, 2019 and December 31, 2018, convertible into common stock at $0.50 per share

 

 

2,830,000

 

 

 

2,830,000

 

Common stock:  $0.001 par value; 500,000,000 shares authorized, 24,082,351 and 20,657,850 shares issued, 24,075,958 and 20,657,850 shares outstanding at March 31, 2019 and December 31, 2018, respectively

 

 

24,082

 

 

 

21,082

 

Additional paid-in capital

 

 

29,066,117

 

 

 

27,397,225

 

Total stock & paid-in-capital

 

 

31,920,199

 

 

 

30,248,307

 

Accumulated deficit

 

 

(30,225,664

)

 

 

(30,269,833

)

Sub-total

 

 

1,694,535

 

 

 

(21,526

)

Less:  Treasury stock (6,393 and 3,280 shares of common stock at March 31, 2019 and December 31, 2018, respectively)

 

 

(149,459

)

 

 

(149,459

)

Total Stockholders' Equity (Deficit)

 

 

1,545,076

 

 

 

(170,985

)

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity (Deficit)

 

$

6,328,271

 

 

$

4,489,993

 





DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Cash from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

44,169

 

 

$

(743,104

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

41,132

 

 

 

19,071

 

Stock option expense

 

 

21,892

 

 

 

 

Warrants exercised

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,084,943

)

 

 

(1,115,965

)

Contract assets

 

 

921,608

 

 

 

(184,494

)

Prepaid expenses and other current assets

 

 

91,898

 

 

 

53,029

 

Accounts payable

 

 

643,916

 

 

 

(22,436

)

Payroll taxes payable

 

 

(156,843

)

 

 

8,608

 

Accrued expenses

 

 

26,265

 

 

 

(69,837

)

Lease obligation

 

 

13,760

 

 

 

 

Contract liabilities

 

 

(999,048

)

 

 

522,172

 

Deferred revenue

 

 

(63,965

)

 

 

(94,957

)

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(1,500,159

)

 

 

(1,627,913

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Software development costs

 

 

 

 

 

(60,000

)

Purchase of patents/trademarks

 

 

(3,000

)

 

 

(1,000

)

Purchase of fixed assets

 

 

(88,511

)

 

 

(63,113

)

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

(91,511

)

 

 

(124,113

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayments of line of credit

 

 

(921

)

 

 

(301

)

Repayments of related party notes

 

 

 

 

 

(48,215

)

Repayments of insurance and equipment financing

 

 

(64,295

)

 

 

(74,435

)

Proceeds from warrants exercised

 

 

1,650,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided (used in) by financing activities

 

 

1,584,784

 

 

 

(122,951

)

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(6,886

)

 

 

(1,874,977

)

Cash, beginning of period

 

 

1,209,301

 

 

 

1,941,818

 

Cash, end of period

 

 

1,202,415

 

 

 

66,841

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

 

 

Interest paid

 

$

1,536

 

 

$

3,519

 

 

 

 

 

 

 

 

 

 

Supplemental Non-Cash Investing and Financing Activities:

 

 

 

 

 

 

 

 

Common stock issued for accrued BOD fees

 

$

 

 

$

73,709

 

Note issued for financing of insurance premiums

 

$

165,864

 

 

$