Duos Technologies Group Inc (NASDAQ:DUOT), a provider of intelligent security analytical tech solutions, posted second-quarter results on Thursday that saw its revenue jump 47% year-over-year driven by deal flow in recent months despite the coronavirus (COVID-19) pandemic.
For the period ended June 30, 2020, the Jacksonville, Florida-based company reported revenue of $1.98 million, compared to $1.35 million in the second quarter of 2019.
Duos, which specializes in the protection of critical infrastructure and the automation of complex mechanical inspections of rail assets, chalked up the increase in revenue to completion of customer contracts.
The group's gross profit increased by 324% to $739,000 in the second quarter, compared to $174,000 in the same period a year earlier thanks to the jump in revenue. Net loss totaled $1.47 million, an improvement from the net loss of $1.95 million in the same period in 2019. The decrease in net loss was primarily due to both “higher revenue and reduction of costs” said the company.
Cash and cash equivalents at the end of the quarter totaled $5.37 million, compared to $56,000 at the end of December 2019.
"In the second quarter we generated incrementally improved year-over-year results in the face of ongoing, difficult market conditions, and we believe we have effectively adapted our organization to the new normal working environment," Duos CEO Gianni Arcaini said in a statement accompanying the numbers.
"Deal flow in recent months has begun to resume as evidenced by a few of the notable contracts we were awarded during the period. We are also encouraged by the strength of our pipeline, which continues to portend a backloaded second half as many of the contracts that were delayed by COVID are now being revisited,” he added.
The Duos boss said the company has taken “decisive measures” to control its operational costs.
“As conditions improve, we'll look to make additional adjustments to address our anticipated increased demand over the coming quarters,” he noted.
Arcaini, 71 will be retiring as CEO on September 1, after spending three decades with Duos which he founded. He will continue to serve as chairman of the company's board.
"Looking to the future, the Board of Directors remains focused on finding a replacement for the CEO position with the right mix of technical acumen, sales experience and leadership abilities to guide our company into its next phase of growth,” said Arcaini.
Duos posted a net loss of $3.61 million for the six-month period, compared to a net loss of $1.91 million in the same period a year earlier due to lower overall revenue.
But deal wins picked up during the second quarter, as Duos was awarded a $2.1 million contract by an existing class one railroad customer to integrate up to 100 artificial intelligent use cases into its proprietary centraco platform for future use by the railroad in its automation-focused efforts.
It was also awarded a $945,000 follow-on contract for the Monroe County Sheriff's office in Florida to provide the company's Intelligent Correctional Automation System. In addition, it was awarded a $1.8 million contract for a turnkey project channeling its proprietary Railcar Inspection Portal (RIP) technology. The project is expected to be completed by the end of the third quarter.
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