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8-K - FORM 8-K - AXON ENTERPRISE, INC. | c15796e8vk.htm |
EXHIBIT 99.1
FOR RELEASE ON: April 21, 2011 at 7:30 a.m. ET
CONTACT: | Dan Behrendt | |||
Chief Financial Officer | ||||
TASER International, Inc. | ||||
(480) 905-2000 |
TASER International Reports First Quarter Results
Company Generates $4.3 Million in Cash on $23.1 Million in Revenue
SCOTTSDALE, Ariz., April 21, 2011 TASER International, Inc. (NASDAQ: TASR), today announced
financial results for the first quarter of 2011 ended March 31, 2011.
Q1 2011 Financial Summary:
| Net sales were $23.1 million in the quarter, a decrease of $0.7 million or 3% compared
to first quarter 2010 sales of $23.8 million. The decrease in net sales was driven by
fewer individually significant international orders. |
| Gross margin declined to 52.8% in the first quarter of 2011, compared to 56.6% in the
same period last year. Following the official launch of Evidence.com, data center
operating and software maintenance costs are included in cost of sales, which reduced gross
margin as a percent of sales by 5.0% (from 57.8% before data center operations and software
maintenance to 52.8% net). Excluding these costs, the improvement in gross margin on the
base business was driven by more efficient operations with reductions in rework and scrap
expense. |
| Sales, general and administrative (SG&A) expenses of $9.3 million in the first quarter
of 2011 decreased 9%, or $1.0 million, compared to the first quarter of 2010, a result of
tighter cost-control measures implemented by the Company in the second half of 2010. |
| Research and development (R&D) expenses decreased $1.4 million to $2.8 million in the
first quarter of 2011, a 33% decrease from the same period last year. The reduction is
partially attributed to costs in the prior year for the AXON product as well as the impact
of cost-reduction measures. Additionally, the launch of Evidence.com resulted in the
Company including $1.2 million of expenses in cost of products sold for ongoing delivery
and maintenance of the product, some of which were previously included in R&D in the first
quarter of 2010. |
| Adjusted operating income, which excludes the impact of stock-based compensation
charges and depreciation and amortization, was $3.1 million for the first quarter of 2011,
a $1.5 million, or 94% increase from adjusted operating income of $1.6 million in the first
quarter of 2010. GAAP income from operations was $0.1 million for the quarter, compared to
a loss from operations of $0.9 million for the first quarter of 2010. |
| Net income for the first quarter of
2011 was $20,000 or $0.00 per share on a basic and
diluted basis. |
| The Company generated $4.3 million in cash from operating activities in the first
quarter and spent $5.1 million on the repurchase of common stock. Cash, cash equivalents
and investments were $41.6 million at the end of the first quarter of 2011 and the Company
has no debt recorded on its balance sheet. |
Other significant events:
| On April 17, truTV premiered the new television series POLICE POV, which features
footage captured by the TASER®
AXON on-officer camera system. Utilizing law
enforcement video from the point of view of the officer, the series launches a new era of
law enforcement television programming with the next bold leap in first-person action with
POLICE POV. |
| On April 20, 2011 we unveiled the new
TASER® X2 a high performance handheld electronic
control device (ECD). The TASER X2 ECD is the most customer-driven ECD ever developed and
incorporates the capabilities most requested by law enforcement professionals. It is cost
effective, simple to use, and similar in size to the current TASER flagship product, the
TASER X26. The X2 features a second shot for instant miss recovery, dual LASERs for
improved accuracy, enhanced power magazine with more than 500 firings, and a warning arc
that helps prevents conflict from escalating all in a small, compact size and
competitively priced at under $1,000. The TASER X2 will begin shipping in the second
quarter. |
Weve started 2011 on solid ground with improved profitability, tighter control of our costs and
improving sales of our unique new product offerings, commented Rick Smith, CEO of TASER
International, Inc. During the first quarter, we saw steady demand for our products both
domestically and abroad with multiple, significant orders. Further, I am pleased to report that
five new agencies have purchased the TASER AXON and Evidence.com solution which is showcased in
the new television series POLICE POV. Just this week, we announced the new TASER X2. Based on
extensive customer feedback in the design and development process, we believe the X2 creates a
compelling value for our extensive installed base of TASER users to upgrade to the newest
technology.
I am also pleased to report that we purchased $5.1 million dollars of Company stock immediately
following the Boards authorization of $12.5 million. We believe that the Companys strong cash
position together with its cash generation capabilities and substantial growth prospects justify a
stock buy-back program to return cash to stockholders.
The Company will host its first quarter 2011 earnings conference call on Thursday, April 21, 2011
at 11:00 a.m. ET. To access the audio teleconference, please dial: 1-800-798-2796 or
1-617-614-6204 for international callers. The pass code is 29907357.
Non-GAAP Measures
To supplement the Companys 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. 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 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 managements 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 Companys
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 Companys GAAP
financial measures; |
|
| these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the Companys GAAP financial
measures; |
|
| these non-GAAP financial measures should not be considered to be
superior to the Companys 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 Companys 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
prevent conflict and protect life. More than 16,000 public safety agencies in 40 countries rely on
TASER electronic control devices (ECDs) and AXON on-officer camera systems to help protect and
serve. TASER innovations benefit individuals and families too; providing personal protection and
accountability while maintaining regard for life. Since 1994, more than 230,000 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, www.Evidence.com and www.Protector.com or by
calling (800) 978-2737. Be a part of the TASER community by joining us on Facebook, Twitter and
YouTube.
TASER, the TASER logo, AXON,
X26, X2 and Evidence.com are trademarks of TASER International, Inc. Other Company and
product names may be trademarks of their respective owners.
Note to Investors
To review the TASER International Safe Harbor Statement, please visit our Investor Relations Safe
Harbor Statement at www.TASER.com/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 Companys 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.
- more -
TASER International, Inc.
Consolidated Statements of Operations
(Unaudited)
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended | ||||||||
March 31, 2011 | March 31, 2010 | |||||||
Net Sales |
$ | 23,116,949 | 23,843,901 | |||||
Cost of Products Sold |
10,908,085 | 10,353,480 | ||||||
Gross Margin |
12,208,864 | 13,490,421 | ||||||
Sales, general and administrative expenses |
9,346,214 | 10,299,154 | ||||||
Research and development expenses |
2,752,465 | 4,139,916 | ||||||
Income (loss) from operations |
110,185 | (948,649 | ) | |||||
Interest and other income, net |
26,322 | 7,899 | ||||||
Income (loss) before provision for income taxes |
136,507 | (940,750 | ) | |||||
Provision (benefit) for income taxes |
116,775 | (448,145 | ) | |||||
Net Income (loss) |
$ | 19,732 | (492,605 | ) | ||||
Income (loss) per common and common equivalent shares |
||||||||
Basic |
$ | 0.00 | $ | (0.01 | ) | |||
Diluted |
$ | 0.00 | $ | (0.01 | ) | |||
Weighted average number of common and common equivalent shares outstanding |
||||||||
Basic |
62,409,267 | 62,332,170 | ||||||
Diluted |
63,250,334 | 62,332,170 |
TASER International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
For the Three Months Ended | ||||||||
March 31, 2011 | March 31, 2010 | |||||||
GAAP Income (loss) from operations |
$ | 110,185 | (948,649 | ) | ||||
Stock-based compensation expense (a) |
962,916 | 1,009,594 | ||||||
Depreciation and amortization |
2,068,092 | 1,540,157 | ||||||
Adjusted operating income |
$ | 3,141,193 | 1,601,102 | |||||
a) Results include stock-based compensation as follows:
For the Three Months Ended | ||||||||
March 31, 2011 | March 31, 2010 | |||||||
Cost of products sold |
$ | 53,003 | 71,509 | |||||
Sales, general and administrative expenses |
723,179 | 798,126 | ||||||
Research and development expenses |
186,734 | 139,959 | ||||||
$ | 962,916 | 1,009,594 | ||||||
TASER International, Inc.
Consolidated Balance Sheets
(Unaudited)
Consolidated Balance Sheets
(Unaudited)
March 31, 2011 | December 31, 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 31,811,600 | $ | 42,684,241 | ||||
Short-term investments |
9,785,345 | | ||||||
Accounts receivable, net of allowance of $200,000 in 2011 and 2010, respectively |
11,597,028 | 13,542,535 | ||||||
Inventory |
16,280,046 | 17,815,405 | ||||||
Prepaid expenses and other assets |
3,061,525 | 1,999,525 | ||||||
Deferred income tax assets, net |
6,224,559 | 6,284,489 | ||||||
Total current assets |
78,760,103 | 82,326,195 | ||||||
Property and equipment, net |
34,346,259 | 35,905,765 | ||||||
Deferred income tax assets, net |
13,819,753 | 13,919,753 | ||||||
Intangible assets |
3,135,289 | 3,090,876 | ||||||
Other long-term assets |
1,007,357 | 944,346 | ||||||
Total assets |
$ | 131,068,761 | $ | 136,186,935 | ||||
Liabilities and stockholders equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 4,069,174 | $ | 4,550,789 | ||||
Accrued liabilities |
3,579,765 | 3,759,800 | ||||||
Current portion of deferred revenue |
3,292,341 | 3,265,260 | ||||||
Customer deposits |
306,470 | 372,145 | ||||||
Total current liabilities |
11,247,750 | 11,947,994 | ||||||
Deferred revenue, net of current portion |
4,028,577 | 4,392,860 | ||||||
Liability for unrecognized tax benefits |
2,283,122 | 2,281,840 | ||||||
Total liabilities |
17,559,449 | 18,622,694 | ||||||
Stockholders equity |
||||||||
Preferred stock, $0.00001 par value per share; 25 million shares authorized;
no shares issued and outstanding at March 31, 2011 and December 31, 2010,
respectively |
| | ||||||
Common stock, $0.00001
par value per share; 200 million shares authorized;
61,376,036 and 62,119,063 shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively |
635 | 647 | ||||||
Additional paid-in capital |
98,088,925 | 97,122,085 | ||||||
Treasury stock, 3,341,500 shares at March 31, 2011 and December 31, 2010 |
(19,769,874 | ) | (14,708,237 | ) | ||||
Retained earnings |
35,204,923 | 35,185,191 | ||||||
Accumulated other comprehensive income/(loss) |
(15,297 | ) | (35,445 | ) | ||||
Total stockholders equity |
113,509,312 | 117,564,241 | ||||||
Total liabilities and stockholders equity |
$ | 131,068,761 | $ | 136,186,935 | ||||
TASER International, Inc.
Selected Consolidated Statement of Cash Flows Information
(Unaudited)
Selected Consolidated Statement of Cash Flows Information
(Unaudited)
For the Three Months Ended | ||||||||
March 31, 2011 | March 31, 2010 | |||||||
Net income (loss) |
$ | 19,732 | $ | (492,605 | ) | |||
Depreciation and amortization |
2,068,092 | 1,540,157 | ||||||
Stock-based compensation expense |
962,916 | 1,009,594 | ||||||
Net cash provided (used) by operating activities |
4,343,560 | (6,665,927 | ) | |||||
Net cash used by investing activities |
(10,185,423 | ) | (2,370,259 | ) | ||||
Net cash (used) provided by financing activities |
(5,057,726 | ) | 957,836 | |||||
Cash and cash equivalents, end of period |
$ | 31,811,600 | $ | 37,425,947 |