Press Releases
Financial Summary:
- Net sales were
$32.1 million in the quarter, an increase of$10.8 million , or 50.6% compared to fourth quarter 2011 sales of$21.3 million . The increase in sales versus the prior year was primarily driven by agencies upgrading to the new TASER® X2™ Conducted Electrical Weapon (CEW). The TASER Protection Plan supplemented the upgrade program allowing the Company to offer financing to agencies allowing them to accelerate the upgrade of their fleet of TASER devices.
- Revenues in the CEW segment grew
$9.6 million or 46.6% in the fourth quarter of 2012 when compared to the fourth quarter of 2011.
- Revenues in the Video segment grew
$1.2 million , or 170%, to$1.8 million in the fourth quarter of 2012.
- Gross margin in the fourth quarter of 2012 was 59.7%, compared to 32.7% in the same period last year. Negatively affecting gross margin in the fourth quarter of 2011 was a
$3.7 million charge for excess inventory of the X3 product line and first generation of AXON video products. The remaining improvement in gross margin in 2012 was driven by the increase in sales of the X2 which has a more favorable margin profile, more direct sales which increased our average selling price, and a reduction in expenses in our Video segment due to our decision to utilize third party cloud services along with on-going manufacturing and operational efficiencies.
- Sales, general and administrative (SG&A) expenses of
$12.5 million in the fourth quarter of 2012 increased 23.3%, from$10.1 million in the fourth quarter of 2011. This increase was partially a result of higher variable selling expenses associated with increased direct sales and internet marketing initiatives. Personnel costs also increased as a result of additional strategic hires and increases to commission and bonus expense. The quarter was also impacted by a stock compensation true-up for performance-based stock. The Company continues to make strategic investments in SG&A expenses to grow its international and video product sales. We are encouraged by the early results of these investments which will continue in 2013.
- Research and development (R&D) expenses of
$2.0 million for the fourth quarter of 2012 are consistent with the prior-year and previous quarters.
- Operating income improved
$11.9 million to $4.7 million in the fourth quarter of 2012 from an operating loss of$7.2 million in the prior-year quarter, largely due to the increased sales and an improved gross margin discussed above.
- Adjusted EBITDA was
$7.7 million for the fourth quarter of 2012, a significant increase from Adjusted EBITDA of$1.2 million in the fourth quarter of 2011. The increase is due to higher sales and improved margins.
- Income taxes for the fourth quarter of 2012 were
$1.0 million . The income tax expense in the fourth quarter was favorably impacted by the reversal of our valuation reserve for deferred tax assets. The strong operating results in 2012, coupled with a favorable forecast led the Company to conclude that it is more likely than not that its deferred tax assets will be realized.
- Net income for the fourth quarter of 2012 was
$3.8 million , or$0.07 per share on a basic and diluted basis.
- In the fourth quarter of 2012, the Company generated
$3.3 million in cash from operating activities. The Company generated$26.5 million in cash from operating activities during the full year of 2012.
- Cash, cash equivalents and investments were
$37.8 million at the end of the fourth quarter of 2012, after completing$20.0 million of stock repurchases during the year. The Company has no debt, other than a capital lease, recorded on its balance sheet.
"The X2 Smart Weapon continued to show strong growth in the fourth quarter which is evidence of the success of our upgrade program," remarked Rick Smith, CEO of
"Evidenced by the strength of our top line growth, we have continued to reinvest into the business to drive future growth as demonstrated by the uptick in SG&A expenses. We will look to tie this reinvestment directly with the sales and booking trends that we see in the future. We also continue to focus on creating a culture of operational excellence which has helped the Company deliver a fourth consecutive quarter of strong operational results. We remain well positioned to deliver on the execution of our strategy to continue to generate significant operating cash flows, and to drive profitable growth and value for all of our stakeholders," concluded Smith.
Other Significant Events:
- In the fourth quarter, the Company continued to see adoption of the new X2 Smart Weapon platform by agencies through its extended upgrade program. The Company announced a number of significant orders that occurred during the fourth quarter, which included:
The Phoenix Police Department (AZ) purchased 2,365 X2 CEWs.The Tempe Police Department (AZ) purchased 350 X2 CEWs.The Knox County Sheriff's Office (TN) purchased 285 X2 CEWs.The Cleveland Police Department (OH) purchased 251 X2 CEWs.The Washtenaw County Sheriff's Department (MI) for 165 X2 CEWs.The Cobb County Police Department (GA) purchased 120 X2 CEWs.The Baton Rouge Police Department (LA) purchased 100 X2 CEWs.
- The Company continued to see new agencies adopting the new TASER Flex on-officer camera and EVIDENCE.com management service during the fourth quarter. Bookings for AXON Flex and EVIDENCE.com systems more than tripled over the course of two quarters from approximately
$450,000 in the second quarter of 2012 to approximately$1.7 million in the fourth quarter of 2012. AXON Flex and EVIDENCE.com deployments included significant order from theSale Lake Valley Police Alliance , theFort Collins Police Department , theWichita Police Department , and dozens of smaller agencies.
The Company will host its fourth quarter 2012 earnings conference call on
Non-GAAP Measures
To supplement the Company's financial results presented in accordance with GAAP, we are presenting the non-GAAP financial measures of EBITDA and Adjusted EBITDA. Our management uses these non-GAAP financial measures in evaluating the Company's performance in comparison to prior periods and as a measure of liquidity. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting our future periods. A reconciliation of GAAP to the non-GAAP financial measures is presented at the end of the release.
EBITDA is defined as consolidated net income (loss) before net interest expense, income taxes and depreciation and amortization. Adjusted EBITDA as presented herein is defined as net income (loss) before net interest expense, income taxes, depreciation and amortization and before certain other items, including: stock-based compensation; loss on write-down/disposal of property, equipment and intangibles, net; provision for obsolete and excess inventory; litigation judgment (reversal) expense; loss on impairment; and interest income and other (income) expense.
Caution on Use of Non-GAAP Measures
These non-GAAP financial measures are not consistent with GAAP, and management believes investors will benefit by 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 within this press release.
About
TASER® is a registered trademark of
Note to Investors
To review the TASER International Safe Harbor Statement, please visit: http://investor.taser.com/safeHarbor.cfm.
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 regarding our expectations, beliefs, intentions or strategies regarding the future; that we will continue to make investments through increased SG&A in 2013; that we anticipate agencies will take advantage of our upgrade program and that we are well positioned to execute our strategy. 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
For investor relations information please contact
TASER International, Inc. Consolidated Statements of Operations (Unaudited) For the Three Months Ended ---------------------------- December 31, December 31, 2012 2011 ------------- ------------- Net sales $ 32,115,957 $ 21,329,791 Cost of products sold and services delivered 12,948,025 10,607,369 Excess inventory charges - 3,746,149 ------------- ------------- Gross margin 19,167,932 6,976,273 Sales, general and administrative expenses 12,467,094 10,113,098 Research and development expenses 1,982,608 2,080,799 (Gain) loss on write down / disposal of property and equipment, net (19,027) 2,004,043 ------------- ------------- Income (loss) from operations 4,737,257 (7,221,667) Interest and other (expense) income, net 57,297 (16,278) ------------- ------------- Income (loss) before provision (benefit) for income taxes 4,794,554 (7,237,945) Provision (benefit) for income taxes 979,748 (1,336,894) ------------- ------------- Net income (loss) $ 3,814,806 $ (5,901,051) ============= ============= Income (loss) per common and common equivalent shares Basic $ 0.07 $ (0.11) Diluted $ 0.07 $ (0.11) Weighted average number of common and common equivalent shares outstanding Basic 52,503,411 55,861,811 Diluted 54,297,140 55,861,811 TASER International, Inc. Consolidated Statements of Operations (Unaudited) For the Twelve Months Ended ------------------------------ December 31, December 31, 2012 2011 -------------- -------------- Net sales $ 114,752,748 $ 90,027,906 Cost of products sold and services delivered 47,038,173 41,752,520 Excess inventory charges - 3,746,149 -------------- -------------- Gross margin 67,714,575 44,529,237 Sales, general and administrative expenses 39,086,190 38,000,455 Research and development expenses 8,139,359 9,989,219 Litigation judgment (reversal) expense (2,200,000) 3,301,243 Asset impairment - 1,353,857 Loss on write down / disposal of property and equipment, net 160,506 2,800,396 -------------- -------------- Income (loss) from operations 22,528,520 (10,915,933) Interest and other income, net 82,842 1,287,192 -------------- -------------- Income (loss) before provision (benefit) for income taxes 22,611,362 (9,628,741) Provision (benefit) for income taxes 7,873,620 (2,588,875) -------------- -------------- Net income (loss) $ 14,737,742 $ (7,039,866) ============== ============== Income (loss) per common and common equivalent shares Basic $ 0.27 $ (0.12) Diluted $ 0.27 $ (0.12) Weighted average number of common and common equivalent shares outstanding Basic 53,827,204 59,435,624 Diluted 54,722,785 59,435,624 TASER International, Inc. Segment Reporting (Unaudited) For the Three Months Ended -------------------------------------------- December 31, 2012 ------------------------------------------- Video CEW Total ------------ ------------ ------------ Product sales $ 1,605,994 $ 30,280,142 $ 31,886,136 Service revenue 229,821 - 229,821 ------------- ------------- ------------- Net sales 1,835,815 30,280,142 32,115,957 ------------- ------------- ------------- Cost of products sold 1,060,474 11,281,458 12,341,932 Cost of service delivered 606,093 - 606,093 Excess inventory charges - - - ------------- ------------- ------------- Cost of products sold and services delivered 1,666,567 11,281,458 12,948,025 ------------- ------------- ------------- Gross margin 169,248 18,998,684 19,167,932 Sales, general and administrative expenses 1,085,144 11,381,950 12,467,094 Research and development expenses 850,485 1,132,123 1,982,608 (Gain) loss on write down / disposal of property and equipment, net - (19,027) (19,027) ------------- ------------- ------------- (Loss) income from operations $ (1,766,381) $ 6,503,638 $ 4,737,257 ============= ============= ============= ------------- ------------- ------------- (Loss) income from operations, normalized (a) $ (1,766,381) $ 6,484,611 $ 4,718,230 ============= ============= ============= Operating margin % -96% 21% 15% Operating margin %,normalized -96% 21% 15% For the Three Months Ended -------------------------------------------- December 31, 2011 ------------------------------------------ Video CEW Total ------------ ------------ ------------ Product sales $ 580,183 $ 20,649,895 $ 21,230,078 Service revenue 99,713 - 99,713 ------------- ------------- ------------- Net sales 679,896 20,649,895 21,329,791 ------------- ------------- ------------- Cost of products sold 737,007 8,526,467 9,263,474 Cost of service delivered 1,343,895 - 1,343,895 Excess inventory charges 1,997,050 1,749,099 3,746,149 ------------- ------------- ------------- Cost of products sold and services delivered 4,077,952 10,275,566 14,353,518 ------------- ------------- ------------- Gross margin (3,398,056) 10,374,329 6,976,273 Sales, general and administrative expenses 936,560 9,176,538 10,113,098 Research and development expenses 1,121,893 958,906 2,080,799 (Gain) loss on write down / disposal of property and equipment, net 1,445,593 558,450 2,004,043 ------------- ------------- ------------- (Loss) income from operations $ (6,902,102) $ (319,565) $ (7,221,667) ============= ============= ============= ------------- ------------- ------------- (Loss) income from operations, normalized (a) $ (3,459,459) $ 1,987,984 $ (1,471,475) ============= ============= ============= Operating margin % -1015% -2% -34% Operating margin %,normalized -509% 10% -7%
For the Twelve Months Ended -------------------------------------------- December 31, 2012 ------------------------------------------- Video CEW Total ------------ ------------ ------------ Product sales $ 5,070,600 $ 109,054,723 $ 114,125,323 Service revenue 627,425 - 627,425 ------------- ------------- ------------- Net sales 5,698,025 109,054,723 114,752,748 ------------- ------------- ------------- Cost of products sold 3,773,152 39,350,134 43,123,286 Cost of service delivered 3,914,887 - 3,914,887 Excess inventory charges - - - ------------- ------------- ------------- Cost of products sold and services delivered 7,688,039 39,350,134 47,038,173 ------------- ------------- ------------- Gross margin (1,990,014) 69,704,589 67,714,575 Sales, general and administrative expenses 3,510,372 35,575,818 39,086,190 Research and development expenses 4,201,193 3,938,166 8,139,359 Litigation judgment expense - (2,200,000) (2,200,000) Asset impairment - - - Loss on write down / disposal of property and equipment, net - 160,506 160,506 ------------ ------------ ------------ (Loss) income from operations $ (9,701,579) $ 32,230,099 $ 22,528,520 ============= ============= ============= ------------- ------------- ------------- (Loss) income from operations, normalized (a) $ (9,701,579) $ 30,190,605 $ 20,489,026 ============= ============= ============= Operating margin % -170% 30% 20% Operating margin %,normalized -170% 28% 18% For the Twelve Months Ended -------------------------------------------- December 31, 2011 ------------------------------------------ Video CEW Total ------------ ------------ ------------ Product sales $ 3,001,143 $ 86,675,067 $ 89,676,210 Service revenue 351,696 351,696 ------------- ------------- ------------- Net sales 3,352,839 86,675,067 90,027,906 ------------- ------------- ------------- Cost of products sold 2,692,729 34,212,839 36,905,568 Cost of service delivered 4,846,952 - 4,846,952 Excess inventory charges 1,997,050 1,749,099 3,746,149 ------------- ------------- ------------- Cost of products sold and services delivered 9,536,731 35,961,938 45,498,669 ------------- ------------- ------------- Gross margin (6,183,892) 50,713,129 44,529,237 Sales, general and administrative expenses 3,206,566 34,793,889 38,000,455 Research and development expenses 4,544,345 5,444,874 9,989,219 Litigation judgment expense - 3,301,243 3,301,243 Asset impairment - 1,353,857 1,353,857 Loss on write down / disposal of property and equipment, net 2,156,836 643,560 2,800,396 ------------ ------------ ------------ (Loss) income from operations $ (16,091,639) $ 5,175,706 $ (10,915,933) ============= ============= ============= ------------- ------------- ------------- (Loss) income from operations, normalized (a) $ (11,937,753) $ 12,223,465 $ 285,712 ============= ============= ============= Operating margin % -480% 6% -12% Operating margin %,normalized -356% 14% 0% (a) Income from operations excluding excess inventory charges, litigation judgment expense, asset impairment and loss on write down / disposal of property and equipment, net TASER International, Inc. AXONFlex and EVIDENCE.COM Bookings by Quarter For the Three Months Ended ----------------------------------------------------------- Dec. 31, Sept. 30, June 30, March 31, 2012 2012 2012 2012 ----------------------------------------------------------- Bookings $ 1,670,813 $ 1,318,107 $ 451,183 $ 352,231 AXON Flex and EVIDENCE.COM Bookings is a statistical measure defined as the sales price of orders placed in the relevant time period. Bookings is an indication of the activity the Company is seeing relative to AXON Flex and EVIDENCE.COM. The Company has deliverables to meet, prior to recognizing revenue related to many of the orders. These statistics represent orders and not invoiced sales. Once invoiced, the revenue related to EVIDENCE.COM is recognized over the requisite service period of one to five years. For more information relative to our revenue recognition policies, please reference ourSEC filings. TASER International, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) For the Three Months For the Twelve Months Ended Ended ------------------------ ------------------------ December December December December 31, 31, 31, 31, 2012 2011 2012 2011 ----------- ----------- ----------- ----------- Net income (loss) $ 3,814,806 $(5,901,051) $14,737,742 $(7,039,866) Depreciation and amortization 1,405,261 1,983,931 6,519,250 8,096,543 Interest expense 5,360 32,412 9,839 33,067 Provision (benefit) for income taxes 979,748 (1,336,894) 7,873,620 (2,588,875) ----------- ----------- ----------- ----------- EBITDA $ 6,205,175 $(5,221,602) $29,140,451 $(1,499,131) =========== =========== =========== =========== Adjustments: Stock-based compensation expense $ 1,224,456 $ 504,856 $ 3,421,506 $ 3,038,300 Loss on write down/disposal of property, equipment and intamgibles, net 50,280 2,028,582 355,418 2,854,752 Provision for excess and obsolete inventory 316,882 3,863,528 553,701 4,610,197 Litigation judgment (reversal) expense - - (2,200,000) 3,301,243 Loss on impairment - - - 1,353,857 Interest income and other (income) expense (62,657) (16,134) (92,681) (1,320,259) ----------- ----------- ----------- ----------- Adjusted EBITDA $ 7,734,136 $ 1,159,230 $31,178,395 $12,338,959 =========== =========== =========== =========== Adjusted EBITDA as a percentage of net sales 24.1% 5.4% 27.2% 13.7% Composition of stock- based compensation: For the Three Months For the Twelve Months Ended Ended ------------------------ ------------------------ December December December December 31, 31, 31, 31, 2012 2011 2012 2011 ----------- ----------- ----------- ----------- Cost of products sold $ 38,383 $ (14,040) $ 172,360 $ 121,177 Sales, general and administrative expenses 1,014,593 400,081 2,645,827 2,291,339 Research and development expenses 171,480 118,815 603,319 625,784 ----------- ----------- ----------- ----------- $ 1,224,456 $ 504,856 $ 3,421,506 $ 3,038,300 =========== =========== =========== =========== TASER International, Inc. Consolidated Balance Sheets (Unaudited) December 31, December 31, 2012 2011 ------------- ------------- ASSETS Current Assets: Cash and cash equivalents $ 36,126,791 $ 21,300,733 Short-term investments 1,680,958 5,108,189 Accounts and notes receivable, net 18,101,240 11,780,135 Inventory 10,993,209 11,484,761 Prepaid expenses and other current assets 2,754,331 2,089,676 Deferred income tax assets, net 9,395,987 9,968,929 ------------- ------------- Total current assets 79,052,516 61,732,423 Property and equipment, net 21,952,201 26,845,220 Deferred income tax assets, net 11,605,812 12,716,169 Intangible assets, net 3,317,169 3,224,006 Other assets 308,553 444,933 ------------- ------------- Total assets $ 116,236,251 $ 104,962,751 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 6,222,904 $ 4,513,938 Accrued liabilities 7,065,085 7,643,004 Current portion of deferred revenue 4,287,305 3,317,641 Customer deposits 500,018 413,314 Current portion of capital lease payable 33,947 - ------------- ------------- Total current liabilities 18,109,259 15,887,897 Deferred revenue, net of current portion 7,835,767 4,636,901 Liability for unrecognized tax benefits 2,902,896 1,982,399 Long-term portion of capital lease payable 103,283 - ------------- ------------- Total liabilities 28,951,205 22,507,197 ------------- ------------- Commitments and Contingencies Stockholders' Equity: Preferred Stock - - Common Stock 661 652 Additional paid-in capital 111,661,393 101,597,626 Treasury Stock (67,203,043) (47,207,093) Retained earnings 42,883,067 28,145,325 Accumulated other comprehensive loss (57,032) (80,956) ------------- ------------- Total stockholders' equity 87,285,046 82,455,554 ------------- ------------- Total liabilities and stockholders' equity $ 116,236,251 $ 104,962,751 ============= ============= TASER International, Inc. Selected Consolidated Statement of Cash Flows Information (Unaudited) For the Twelve Months Ended December 31, December 31, 2012 2011 ---------------- ---------------- Net income (loss) $ 14,737,742 $ (7,039,866) Depreciation and amortization 6,519,250 8,096,543 Stock-based compensation expense 3,421,506 3,038,300 Net cash provided by operating activities 26,517,213 17,265,765 Net cash provided by (used in) investing activities 1,681,055 (7,597,642) Net cash used in financing activities (13,363,416) (31,061,610) Cash and cash equivalents, end of period 36,126,791 21,300,733
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CONTACT:Dan Behrendt Chief Financial OfficerTASER International, Inc. (480) 905-2000
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