DataLogic International Reports Record Revenues for the Second Quarter of 2005

Sequential Revenue Growth Totals 33% Over First Quarter, Marking Fourth Consecutive Sequential Revenue Increase 


IRVINE, Calif., Aug. 11  /PRNewswire-FirstCall/ -- DataLogic International, Inc., (OTC Bulletin Board: DLGI; Berlin, Frankfurt Stock Exchange: 779612) a provider of consulting services and communication solutions including GPS-based mobile asset tracking, secured mobile communications and VoIP, today announced its financial results for the second quarter ended June 30, 2005.

DataLogic International's net sales for the second quarter ended June 30, 2005 were $4.5 million, a 12% increase as compared to net sales of $4.0 million for the quarter ended June 30, 2004.  This marked the highest quarterly revenues in the Company's history, a 33% sequential increase over first-quarter 2005 revenues of $3.4 million, and the fourth consecutive sequential revenue increase quarter over quarter.

Gross profit for the quarter ended June 30, 2005 was $526,000, or 12% of net revenues, as compared to gross profit of $1.2 million, or 31% of net revenues, for the same period in the prior year.  The decrease in the Company's gross profit margin was primarily due to decreased VoIP license sales.

Operating expenses for the quarter ended June 30, 2005 were $697,000, virtually equaling operating expenses of $696,000 recorded in the same period of the prior year, despite financing fees, financing-related legal fees, general R & D investments, product development costs, and increases in operational, administrative and marketing costs.

Interest and factoring expense for the quarter ended June 30, 2005 was $114,000, as compared to interest and factoring expenses of $46,000 in the prior-year quarter.  The increase in interest expense was primarily attributable to the Company's notes, debt issuance, and beneficial conversion factor expenses related to the Laurus Master Fund financing facility established in June, 2004.

A one-time write-down of marketable securities of $196,000 in the 2005 second quarter was a major contributor to the increase in total non-operating expenses of 574% year over year, from $45,980 in the 2004 second quarter to $309,942 in the 2005 second quarter.

As a result, the Company's net loss for the quarter ended June 30, 2005 was $481,000, or a loss of $0.012 per basic and diluted share, as compared to net income of $480,000, or earnings of $0.0l3 per basic share, $0.011 fully diluted, in the second quarter of fiscal 2004.

At June 30, 2005 the Company's reported assets included cash and cash equivalents of $425,000, $1.6 million in net accounts receivable and $456,000 in inventory, as compared with $644,000 in cash and cash equivalents, $3.3 million in accounts receivable and $54,000 in inventory at June 30, 2004. In the first six months of 2005, DataLogic International has retired $475,000 in indebtedness.

Management Analysis

"In the first half of fiscal 2005, we have seen the benefits of our growth strategy gain some noteworthy traction.  Net revenues for the 2005 second quarter represent a record for the Company.  Even though the bottom-line results continue to reflect necessary investments in that strategy, we continue to pare our losses and move the Company to profitability," commented Keith Moore, DataLogic International's Chairman and CEO.  "Benefits of our strategy have included ongoing revenue gains from our communications solutions, including our AEA-award-winning GPS tracking product, Panther Trak(TM), and new business wins for video communications and consulting services."

"We continue to fulfill our $3 million order for Panther Trak and are beginning to see market acceptance of our EncrypTAC(TM) secured mobile communications technology," Mr. Moore continued.

"We are pleased that despite our investments in growth, we have been able to pay down nearly half a million dollars in debt in the first six-months of 2005," Mr. Moore concluded.  "Looking ahead, we continue to focus on increasing revenues from existing customers, expanding our communications solutions sales efforts and exploring acquisition opportunities that have potential to increase our market share in targeted business sectors and provide recurring revenues."

About DataLogic International, Inc.

DataLogic International, Inc. is a technology and professional services company providing a wide range of consulting services and communication solutions such as GPS based mobile asset tracking, secured mobile communications and VoIP.  The Company also provides Information Technology outsourcing and private label communication solutions.  DataLogic's customers include U.S. and international governmental agencies as well as a variety of international commercial organizations.  For more information about DataLogic International, please visit http://www.dlgi.com/.

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial.  Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations.  Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as: believe, expect, anticipate, should, planned, will, may, intend, estimated, and potential, among others.  Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission.  All forward-looking statements attributable to DataLogic International or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.

   ISIN: US23804Q1022

   Contact Information:

   Keith C. Moore, Chairman and CEO
   DataLogic International, Inc.
   949-260-0120. ext. 106

   Sean Collins, Partner
   CCG Investor Relations and Strategic Communications
   310-477-9800, ext. 202


DATASOURCE: DataLogic International, Inc.



CONTACT:  Keith C. Moore, Chairman and CEO of DataLogic International,

Inc., [phone], ext. 106; or Sean Collins, Partner of CCG Investor

Relations and Strategic Communications, [phone], ext. 202, for

DataLogic International, Inc.



Web site:  http://www.dlgi.com/ 

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