Press Releases
TASER International Reports Third Quarter Results
SCOTTSDALE, AZ, Oct 31, 2011 (MARKETWIRE via COMTEX) --
TASER International, Inc. (NASDAQ: TASR) today announced financial results for the third quarter of 2011 ended September 30, 2011.
Q3 2011 Financial Summary:
-- Net sales were $24.4 million in the quarter, an increase of $3.3
million or 16 percent compared to third quarter 2010 sales of $21.1
million. The increase in net sales was driven by the introduction of
the TASER(R) X2(TM) electronic control device (ECD), a compelling
upgrade opportunity for customers, which generated $3.7 million of
sales during the quarter. International sales also increased driven by
significant follow on orders.
-- Gross margin improved to 53.7 percent in the third quarter of 2011,
compared to 49.4 percent in the same period last year. The improvement
in gross margin was driven by a reduction in Evidence.com(TM)
service operating costs, a more favorable sales segment mix and
overall increased leverage on higher sales.
-- Sales, general and administrative (SG&A) expenses of $9.5 million
in the third quarter of 2011 increased slightly compared to the third
quarter of 2010, as ongoing cost reduction efforts were offset by an
increase in legal costs.
-- Research and development (R&D) expenses increased $0.7 million to
$2.4 million in the third quarter of 2011. The increase was primarily
attributable to the continued reduction in the allocation of
Evidence.com service and maintenance costs to cost of sales in the
third quarter of 2011. The costs allocated in the third quarter of
2010 were elevated immediately following the launch of the service.
-- Adjusted operating income, which excludes the impact of stock-based
compensation charges, depreciation and amortization and loss on write
down / disposal of property and equipment was $4.0 million for the
third quarter of 2011, a $1.7 million, or 72 percent increase from an
adjusted operating income of $2.3 million in the third quarter of
2010. GAAP income from operations was $1.2 million for the quarter,
compared to a loss from operations of $0.7 million for the third
quarter of 2010.
-- Net income for the third quarter of 2011 was $1.1 million or $0.02 per
share on a basic and diluted basis.
-- The Company generated $5.3 million in cash from operating activities
in the third quarter of 2011, approximately 22 percent of net sales.
-- The Company repurchased a further $12.4 million or approximately 3.0
million shares of its common stock during the third quarter. This
brings the total amount stock repurchased in 2011 to $24.9 million or
approximately 5.9 million shares. Cash, cash equivalents and
investments were $30.8 million at the end of the third quarter of 2011
and the Company has no debt recorded on its balance sheet.
Other significant events:
-- New Jersey, the last previously remaining state that prohibited law
enforcement from using ECDs has approved the TASER(R) X26(TM) ECD
and the X2 ECD for use by law enforcement officers in New Jersey.
These models are the only ECDs to meet the criteria set forth the
Attorney General's revised policy governing the use of stun devices in
New Jersey.
-- The Company announced a number of new orders for the new X2 product
during the third quarter, including:
-- The Charlotte-Mecklenburg Police Department upgraded their
existing deployment of X26 ECDs by ordering 1,600 X2s equipped
with the new Auto Shut-Down Performance Power Magazine (APPM),
extended warranties, 7,400 TASER(R) cartridges and related
accessories.
-- The University of Texas at Houston Police Department ordered 88 X2
ECDs, 528 TASER cartridges and extended warranties
-- The Plymouth Police Department ordered 85 X2s and 1,000 TASER
cartridges
-- The Company received three significant international follow-on orders
from foreign law enforcement agencies during the third quarter of
2011.
-- The first order received provided an international law enforcement
agency with 377 TASER X26s with extended warranties, and 377
TASER(R) Cam(TM) recorders.
-- The second order received included 60,000 TASER cartridges.
-- The third order received provided an international law enforcement
agency with cartridges and various related accessories.
-- The Company continued to generate traction for the TASER AXON
on-officer camera and Evidence.com service with a number of new
agencies adopting the platform in the third quarter including orders
from Polk County Sheriff's Office (IA), the Burlington Police
Department (VT), Coronado Police Department (CA), Sea Girt Police
Department (NJ), Socorro County Sheriff's Department (NM), and Windsor
Police Department (VA).
"We are encouraged by the continued traction we are seeing for the new TASER X2, a product line which grew to 15 percent of total revenues in its first full quarter of production," commented Rick Smith, CEO of TASER International, Inc. "Customers have reacted very positively to the product line, as well as to an upgrade program which provides a $300 trade-in credit for any existing ECD through the end of the year. We believe this upgrade program will help drive fourth quarter revenues while assisting our customers in making the transition."
The Company will host its third quarter 2011 earnings conference call on Monday, October 31, 2011 at 11:00 a.m. ET. To join the live audio presentation, please dial toll free at 866-730-5769 or 857-350-1593 for international callers. The pass code is 71978860.
Non-GAAP Measures
To supplement the Company's Statements of Operations presented in accordance with GAAP, we are presenting non-GAAP measures of certain components of financial performance. We have presented these measures for our investors to be better able to compare our current results with those of previous periods and have shown a reconciliation of GAAP to the non-GAAP financial measures in the tables at the end of this release. These non-GAAP measures include the impact of non-cash stock-based compensation expense, depreciation and amortization, litigation judgment expense, asset impairment charges and loss on write down of Property and Equipment. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results," meaning our operating performance excluding non-cash charges, such as stock-based compensation, depreciation and amortization and other discrete non-cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity.
Caution on Use of Non-GAAP Measures
As noted previously, these non-GAAP financial measures are not consistent with GAAP because they do not reflect the impact of other non-cash charges. Management believes investors will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company's operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:
-- these non-GAAP financial measures are limited in their usefulness and
should be considered only as a supplement to the Company's GAAP
financial measures;
-- these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the Company's GAAP financial
measures;
-- these non-GAAP financial measures should not be considered to be
superior to the Company's GAAP financial measures; and
-- these non-GAAP financial measures were not prepared in accordance with
GAAP and investors should not assume that the non-GAAP financial
measures presented in this earnings release were prepared under a
comprehensive set of rules or principles.
Further, these non-GAAP financial measures may be unique to the Company, as they may be different from non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company's results to the results of other companies.
A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.
About TASER International, Inc.
TASER International, Inc. (NASDAQ: TASR) is a global provider of safety technologies that protect life, prevent conflict, and resolve disputes. More than 16,300 public safety agencies in 107 countries rely on TASER® electronic control devices (ECDs) and AXON on-officer camera systems to help protect and serve. Today, the use of TASER ECDs have saved more than 80,000 lives from potential death or serious injury while TASER innovations benefit individuals and families too, providing personal protection and accountability while maintaining regard for life. Since 1994, more than 236,000 individuals have relied on TASER technology as a means for effective personal safety. Learn more about TASER International and its solutions at www.TASER.com and www.EVIDENCE.com or by calling (800) 978-2737. Be a part of the TASER community by joining us on Facebook, LinkedIn, Twitter, and YouTube.
TASER® is a registered trademark of TASER International, Inc., registered in the U.S. All rights reserved. TASER logo, AXON, X26, X2, X3, and Evidence.com are trademarks of TASER International, Inc.
Note to Investors
To review the TASER International Safe Harbor Statement, please visit our Investor Relations Safe Harbor Statement at http://investor.taser.com/phoenix.zhtml?c=129937&p=irol-safeharbor.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements, without limitation, regarding our expectations, beliefs, intentions or strategies regarding the future. We intend that such forward-looking statements be subject to the safe-harbor provided by the Private Securities Litigation Reform Act of 1995. The forward-looking information is based upon current information and expectations regarding TASER International, Inc. These estimates and statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict. Such forward-looking statements relate to: expected revenue and earnings growth; estimations regarding the size of our target markets; successful penetration of the law enforcement market; expansion of product sales to the private security, military and consumer self-defense markets; growth expectations for new and existing accounts; expansion of production capability; new product introductions; product safety and our business model. We caution that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements herein.
TASER International assumes no obligation to update the information contained in this press release. These statements are qualified by important factors that could cause our actual results to differ materially from those reflected by the forward-looking statements. Such factors include but are not limited to: (1) market acceptance of our products; (2) our ability to establish and expand direct and indirect distribution channels; (3) our ability to attract and retain the endorsement of key opinion-leaders in the law enforcement community; (4) the level of product technology and price competition for our products; (5) the degree and rate of growth of the markets in which we compete and the accompanying demand for our products; (6) risks associated with rapid technological change and new product introductions; (7) competition; (8) litigation including lawsuits resulting from alleged product related injuries and death; (9) media publicity concerning allegations of deaths and injuries occurring after use of the TASER device and the negative effect this publicity could have on our sales; (10) TASER device tests and reports; (11) product quality; (12) implementation of manufacturing automation; (13) potential fluctuations in our quarterly operating results; (14) financial and budgetary constraints of prospects and customers; (15) potential delays in international and domestics orders; (16) dependence upon sole and limited source suppliers; (17) negative reports concerning the TASER device; (18) fluctuations in component pricing; (19) government regulations and inquiries; (20) dependence upon key employees and our ability to retain employees; (21) execution and implementation risks of new technology; (22) ramping manufacturing production to meet demand; (23) medical and safety studies; (24) field test results; and (25) other factors detailed in our filings with the Securities and Exchange Commission, including, without limitation, those factors detailed in the Company's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
For investor relations information please contact Katie Pyra by phone at 480-515-6330 or via email at IR@TASER.com, or Dan Behrendt, Chief Financial Officer of TASER International, Inc., 480-905-2002.
TASER International, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
----------------------------
September 30, September 30,
2011 2010
-------------- -------------
Net sales $ 24,383,110 21,084,081
Cost of products sold 11,282,855 10,668,399
-------------- -------------
Gross margin 13,100,255 10,415,682
Sales, general and administrative expenses 9,477,548 9,416,371
Research and development expenses 2,362,721 1,686,062
Loss on write down / disposal of property and
equipment, net 47,894 37,981
-------------- -------------
Income (loss) from operations 1,212,092 (724,733)
Interest and other income, net 15,265 10,364
-------------- -------------
Income (loss) before provision for income
taxes 1,227,357 (714,369)
Provision for income taxes 91,072 1,621,109
-------------- -------------
Net income (loss) $ 1,136,285 (2,335,478)
============== =============
Income (loss) per common and common equivalent
shares
Basic $ 0.02 $ (0.04)
Diluted $ 0.02 $ (0.04)
Weighted average number of common and common
equivalent shares outstanding
Basic 58,787,274 62,342,775
Diluted 60,037,328 62,342,775
TASER International, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Nine Months Ended
----------------------------
September 30, September 30,
2011 2010
------------- -------------
Net sales $ 68,698,114 $ 64,048,507
Total cost of products sold 31,145,151 30,519,891
------------- -------------
Gross margin 37,552,963 33,528,616
Sales, general and administrative expenses 27,887,357 29,718,724
Research and development expenses 7,908,420 8,881,027
Litigation judgment expense 3,301,243 -
Asset impairment 1,353,857 -
Loss on write down / disposal of property and
equipment, net 796,353 37,981
------------- -------------
Loss from operations (3,694,267) (5,109,116)
Interest and other income, net 1,303,471 24,466
------------- -------------
Loss before benefit for income taxes (2,390,796) (5,084,650)
Benefit for income taxes (1,251,981) (897,178)
------------- -------------
Net loss $ (1,138,815) $ (4,187,472)
============= =============
Loss per common and common equivalent shares
Basic $ (0.02) $ (0.07)
Diluted $ (0.02) $ (0.07)
Weighted average number of common and common
equivalent shares outstanding
Basic 60,617,787 62,495,957
Diluted 60,617,787 62,495,957
TASER International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
For the Three Months Ended For the Nine Months Ended
--------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2011 2010 2011 2010
------------- ------------- ------------- -------------
GAAP income
(loss) from
operations $ 1,212,092 $ (724,733) $ (3,694,267) $ (5,109,116)
Stock-based
compensation
expense (a) 693,520 912,778 2,533,444 2,838,998
Depreciation
and
amortization 1,995,434 2,076,912 6,112,613 5,243,225
Litigation
judgment
expense - - 3,301,243 -
Asset
impairment 3,353 - 1,353,857 -
Loss on write
down /
disposal of
property and
equipment, net 47,894 37,981 796,353 37,981
------------- ------------- ------------- -------------
Adjusted
operating income $ 3,952,293 $ 2,302,938 $ 10,403,243 $ 3,011,088
============= ============= ============= =============
a) Results
include stock-
based
compensation as
follows:
For the Three Months Ended For the Nine Months Ended
--------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2011 2010 2011 2010
------------- ------------- ------------- -------------
Cost of products
sold $ 30,238 107,947 $ 135,217 $ 259,932
Sales, general
and
administrative
expenses 518,513 692,420 1,891,258 2,215,010
Research and
development
expenses 144,769 112,411 506,969 364,056
------------- ------------- ------------- -------------
$ 693,520 912,778 $ 2,533,444 $ 2,838,998
============= ============= ============= =============
TASER International, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
2011 2010
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 24,574,858 $ 42,684,241
Short term investments 6,175,147 -
Accounts receivable, net of allowance of
$200,000 at September 30, 2011 and December
31, 2010, respectively 12,525,734 13,542,535
Inventory 15,469,128 17,815,405
Prepaid expenses and other current assets 1,969,884 1,999,525
Deferred income tax assets, net 8,864,276 6,284,489
-------------- --------------
Total current assets 69,579,027 82,326,195
Property and equipment, net 29,821,661 35,905,765
Deferred income tax assets, net 13,819,753 13,919,753
Intangible assets, net 3,183,944 3,090,876
Other long-term assets 753,716 944,346
------------- -------------
Total assets $ 117,158,101 $ 136,186,935
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,147,800 $ 4,550,789
Accrued liabilities 7,703,524 3,759,800
Current portion of deferred revenue 3,154,183 3,265,260
Customer deposits 207,974 372,145
-------------- --------------
Total current liabilities 16,213,481 11,947,994
Deferred revenue, net of current portion 4,219,021 4,392,860
Liability for unrecorded tax benefits 2,639,346 2,281,840
-------------- --------------
Total liabilities 23,071,848 18,622,694
-------------- --------------
Stockholders' Equity
Preferred stock, $0.00001 par value per
share; 25 million shares authorized; no
shares issued and outstanding at September
30, 2011 and December 31, 2010,
respectively -
Common stock, $0.00001 par value per share;
200 million shares authorized; 56,767,754
and 62,621,268 shares issued and
outstanding at September 30, 2011 and
December 31, 2010, respectively 647 647
Additional paid-in capital 99,699,075 97,122,085
Treasury stock, 7,969,683 and 2,091,600
shares at September 30, 2011 and December
31, 2010, respectively (39,597,054) (14,708,237)
Retained earnings 34,046,376 35,185,191
Accumulated other comprehensive loss (62,791) (35,445)
-------------- --------------
Total stockholders' equity 94,086,253 117,564,241
-------------- --------------
Total liabilities and stockholders' equity $ 117,158,101 $ 136,186,935
============== ==============
TASER International, Inc.
Selected Consolidated Statement of Cash Flows Information
(Unaudited)
For the Nine Months Ended
September 30, September 30,
2011 2010
-------------- --------------
Net loss $ (1,138,815) $ (4,187,472)
Depreciation and amortization 6,112,613 5,243,225
Stock-based compensation expense 2,533,444 2,838,998
Net cash provided (used) by operating
activities 14,637,384 (2,413,143)
Net cash used by investing activities (7,813,187) (3,851,469)
Net cash (used) provided by financing
activities (24,845,271) 1,066,186
Cash and cash equivalents, end of period $ 24,574,858 $ 40,281,074
CONTACT: Dan Behrendt Chief Financial Officer TASER International, Inc. (480) 905-2000
SOURCE: TASER International