Duos Technologies full steam ahead under new management with its intelligent technologies

• Building out its technology and services portfolio with 14 patents or patents pending
• Provides rail train inspections with its proprietary Railcar Inspection Portal (RIP) technology
• New CEO Charles ‘Chuck’ Ferry took over in September 2020

What Duos Technologies does: 

Duos Technologies Group Inc (NASDAQ:DUOT) offers an array of intelligent technologies and services to support a diverse range of companies’ operations and security. 

Based in Jacksonville, Florida, Duos specializes in automated systems with a focus on the protection of critical infrastructure, notably the automation of complex mechanical inspections of rail assets. The North American rail market is estimated to be valued at US$60 billion.

Duos’ proprietary Railcar Inspection Portal (RIP) technology uses an automated process that can be conducted while a train is in motion. It is a 360-degree modular intelligent visualization system that takes detailed, real-time, full-picture images of railcars travelling at speeds of up to 120 miles per hour.

RIP’s Linear Panorama Generator “scans” the top, bottom and sides and pieces them together like a puzzle, showing a complete picture of the railcar and producing a very high-definition picture of the entire train from end to end (called a “consist”). 

The panoramic view can detect oil leaks, damaged parts, open doors and open and missing hatches, alerting inspectors to the issue and showing them the location of the problem. Sophisticated algorithms also identify more complex issues, and can also spot illegal riders on the side of the train. 

The firm’s systems are designed to incorporate intelligence, including video analytics, algorithms, and neural networking, in order to address specific needs. All rail solutions utilize the company’s xtd Extreme True Definition technology which captures over 200 Megapixel images when the train is moving. 

The company says it avoids a “one size fits all” approach, preferring to individually assess the needs of a system and build a turnkey solution for its customers not just in railroading but other logistics, and intermodal transportation operations and in government, including Correctional Automation Systems.

Duos also operates an artificial intelligence subsidiary, truevue360, or tv360 for short. The AI-based platform supports Duos’s underlying software for its rail inspection portal system and advanced logistics information system.

How is it doing: 

Duos Technologies started 2021 with news of the appointment of rail industry veteran Edmond L Harris as a director, having been elected to the company’s board at the annual meeting of shareholders held on November 19, 2020. It said Harris will serve as the chairman of the company’s Nominating and Governance Committees and will also take a position as a member of the Audit Committee.

Before joining Duos, Harris served as executive vice president of Operations for CSX Corporation and prior to that he held the same positions with Canadian Pacific and Illinois Central.

With his appointment, and others previously disclosed, the Duos board composition remains at five total directors, four of whom are independent, noted the company. 

The biggest boardroom change announcement came at the end of August 2020, when Duos named Charles ‘Chuck’ Ferry, a defense contracting expert and longtime former US Army service member, as its new CEO. 

Ferry brings extensive leadership experience in the energy and defense contracting industries, the company said, and he spent 26 years of active duty service in the US Army. He most recently served as CEO of APR Energy, a global fast-track power company, where he oversaw 800 employees, 17 power plants and $325 million in annual revenue. 

He also previously worked as general manager at  ARMA Global Corporation, a subsidiary of General Dynamics, the defense contracting company that provides IT services. During his time there, the company grew from $20 million in annual revenue to $200 million and from 80 employees to approximately 1,000. Before that, Ferry served as director of business development and operations at Lockheed-Martin, the aerospace and defense contractor.

His appointment followed news in July 2020 of the retirement of Duos founder Gianni Arcaini as its president and CEO, with effect from September 1, although the company said the 71-year old would continue to serve as chairman of the company’s board. Arcaini left his post 30 years after founding the company in 1990.

Looking at the companies financials, Duos ended its third quarter with US$4.1 million in cash, thanks in part to the signing of two significant new rail contracts, which included an initial $1.3 million deal with an existing Class 1 railroad customer to institute automated mechanical inspections on an existing Railcar Inspection Portal, as well as a new contract with ongoing client CN for North American-wide service and support.

During the three months ended September 30, 2020, the firm saw its total revenue fall to $1.3 million from $2.2 million a year prior and posted a net loss of $2.7 million compared to $1.1 million in 3Q 2019. Duos told shareholders that the revenue contraction was due to a decline in technology systems revenue as a result of a delay in receiving an order for a large project, which will be substantially completed in 4Q.

Duos said it expects to deliver revenue of between $7.5 million and $8 million in full-year 2020.

Inflection points: 

• New strategy direction from CEO
• 4Q results confirm revenue forecast
• More contract news 

What the boss says: 

In a statement accompanying Duos Technologies’  3Q results, posted in November 2020, CEO Charles Ferry told shareholders that the group is starting to see a return to normal business conditions ahead of a “new growth era” at the company.

“In my short time since coming on board, we’ve hit the ground running,” Ferry said. “We have an excellent pipeline of opportunities with our existing rail and logistics customers that we expect will drive much improved financial results for 2021.”

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Story by ProactiveInvestors