SCOTTSDALE, Ariz., Oct. 24, 2007 (PRIME NEWSWIRE) -- TASER International, Inc. (Nasdaq:TASR), a market leader in advanced electronic control devices, today reported financial results for the third quarter of 2007.
For the third quarter of 2007 revenues were $28.5 million, the second consecutive quarter of record quarterly revenue and a 56% increase over the same quarter of the prior year. Higher revenues were driven primarily by increased sales volumes in multiple product categories and geographies. Income from operations for the third quarter was $6.9 million compared to $3.7 million in the prior year, an increase of 84% year over year. Net income and basic and diluted earnings per share for the third quarter of 2007 were $6.2 million, $0.10 and $0.09, respectively, as compared to $2.4 million and $0.04 for the third quarter of 2006. Net income was positively impacted by a Research and Development Tax Credit Study completed during the quarter. As a result of this study, the Company recognized $1.8 million in the current quarter and year to date as a reduction in income tax expense which contributed $0.03 to earnings per share on a basic and diluted basis.
Sequentially, revenue in the third quarter of 2007 increased by $2.7 million or 10% over the second quarter of 2007 and operating income improved to 24.1% of net sales compared to 22.9% in the second quarter. The Company generated $9.6 million of cash from operations in the third quarter which increased the total cash, cash equivalents and investments balance to $53.0 million.
Significant events in the third quarter of 2007 include:
1. A number of significant sales orders were received and shipped to law enforcement agencies in the United States. The orders were from both new agencies deploying TASER(r) technology following extensive test and evaluation periods and from agencies continuing to expand the use of TASER electronic control devices (ECDs) to their first responders. Some of our significant orders announced during the quarter include the California Highway Patrol (CHP), Miami-Dade County Police Department (FL), Kern County Sheriff's Department (CA), San Diego County Sheriff's Department (CA), Brevard County Sheriff's Office (FL), and Onondaga County Sheriff's Office in Syracuse (NY). 2. International sales continue to be a significant part of our business and accounted for approximately $4.3 million or 15% of our total sales in the third quarter. This included partial fulfillment of a follow-on order from the French Ministry of the Interior to provide the French Gendarmerie and the French National Police with TASER X26 ECDs and TASER CAM units. 3. In addition to the above law enforcement orders and international sales, we received purchase orders to provide Federal Agencies with TASER X26 ECDs and accessories. This included orders from the United States Forest Service, the U.S. Marshals Service, and an unnamed Federal Law Enforcement Agency. 4. We commenced shipment of the TASER C2(tm) Personal Protector in July and shipped approximately 7,000 units in the third quarter to our retail partners and online web store customers. 5. Two new product lines were unveiled at the annual TASER Tactical Conference in Chicago, Illinois. The TASER Shockwave(tm) is a command activated area denial system consisting of a modular 6-shot TASER ECD that covers a 22-degree arc area and a range of 25 feet. The modular design allows the end user flexibility to configure the units in limitless combinations to facilitate an optimized response for every deployment. The eXtended Range Electronic Projectile (XREP(tm)) incorporates wireless Neuro Muscular Incapacitation (NMI) technology and is designed to be launched from a 12-gauge shotgun. Both products are expected to begin field testing in the first half of 2008. 6. Six more product liability suits were dismissed during the quarter representing a total of fifty-eight (58) wrongful death or injury suits that have been dismissed or judgment entered in favor of the Company since 2004. Overall we have seen a reduction in the rate of new litigation in 2007. 7. Ten new medical and scientific study posters, abstract and papers were published that document recent medical and scientific studies of TASER technology, all of which affirmed the general safety of TASER ECDs. Six of these studies were presented at the Fourth Mediterranean Emergency Medicine Congress (MEMC IV), in Sorrento, Italy during September 15-18, 2007. 8. We completed a Research and Development Tax Credit Study which resulted in a $1.8 million reduction in our income tax expense for the third quarter and positively impacted earnings per basic and diluted share by $0.03.
"The third quarter results, representing the second successive quarter of record revenues, have built upon the momentum established in the first half of the year," commented Rick Smith, CEO of TASER International, Inc. "The continued revenue growth both in the U.S. and internationally, demonstrates the continuing global acceptance of TASER technology and validates the need for our products throughout the world in a variety of markets. With the launch of the TASER C2 Personal Protector and a pipeline of new future products we look forward to continuing growth into 2008."
The Company hosts its third quarter 2007 earnings conference call on Wednesday, October 24, 2007 at 10.00 a.m. ET. The conference call is available via web cast and can be accessed on the "Investor Relations" page at www.TASER.com. To access the teleconference, please dial: 1-866-356-3095 or 1-617-597-5391 for international callers. The pass code is 41422022 for both numbers.
About TASER International, Inc. (TASR):
TASER International's products protect life, providing advanced Electronic Control Devices for use in the law enforcement, medical, military, corrections, professional security, and personal protection markets. TASER(r) devices use proprietary technology to incapacitate dangerous, combative, or high-risk subjects who pose a risk to law enforcement officers, innocent citizens, or themselves in a manner that is generally recognized as a safer alternative to other uses of force. TASER technology protects life, and the use of TASER devices dramatically reduces injury rates for police officers and suspects. For more information about TASER technology, please call (800) 978-2737 or visit our website at www.TASER.com.
The TASER International logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2931
Note to Investors
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. Therefore, actual outcomes and results could materially differ from what is expressed, implied, or forecasted in such forward-looking statements.
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) order delays; (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 Form 10-Qs.
The statements made herein are independent statements of TASER International, Inc. The inclusion of any third parties does not represent an endorsement of any TASER International products or services by any such third parties.
For further information contact Marcy Rigoni, Manager of Investor Relations at Marcy@TASER.com or call 800-978-2737 ext. 2011, or Dan Behrendt, Chief Financial Officer of TASER International, Inc., 480-905-2002.
TASER International, Inc. Statements of Income (Unaudited) For the Three Months Ended --------------------------- Sept. 30, Sept. 30, 2007 2006 ------------ ------------ Net Sales $ 28,533,419 $ 18,311,543 ------------ ------------ Cost of Products Sold: Direct manufacturing expense 8,897,407 5,099,381 Indirect manufacturing expense 3,629,240 1,580,182 ------------ ------------ Total Cost of Products Sold 12,526,647 6,679,563 ------------ ------------ Gross Margin 16,006,772 11,631,980 Sales, general and administrative expenses 8,145,117 7,125,408 Research and development expenses 978,011 772,976 Shareholder litigation settlement expense -- -- ------------ ------------ Income from Operations 6,883,644 3,733,596 Interest and other income, net 519,671 481,611 ------------ ------------ Income before income taxes 7,403,315 4,215,207 Provision for income taxes 1,249,277 1,819,309 ------------ ------------ Net Income $ 6,154,038 $ 2,395,898 ============ ============ Income per common and common equivalent shares Basic $ 0.10 $ 0.04 Diluted $ 0.09 $ 0.04 Weighted average number of common and common equivalent shares outstanding Basic 62,950,482 62,031,850 Diluted 66,186,297 64,717,904 TASER International, Inc. Statements of Income (Unaudited) For the Nine Months Ended --------------------------- Sept. 30, Sept. 30, 2007 2006 ------------ ------------ Net Sales $ 69,698,610 $ 48,430,303 ------------ ------------ Cost of Products Sold: Direct manufacturing expense 20,844,866 12,858,166 Indirect manufacturing expense 8,426,684 4,594,840 ------------ ------------ Total Cost of Products Sold 29,271,550 17,453,006 ------------ ------------ Gross Margin 40,427,060 30,977,297 Sales, general and administrative expenses 24,071,952 21,982,755 Research and development expenses 3,211,646 1,999,777 Shareholder litigation settlement expense -- 17,650,000 ------------ ------------ Income (loss) from Operations 13,143,462 (10,655,235) Interest and other income, net 1,453,073 1,275,521 ------------ ------------ Income (loss) before income taxes 14,596,535 (9,379,714) Provision (credit) for income taxes 4,248,735 (2,975,007) ------------ ------------ Net Income (loss) $ 10,347,800 $ (6,404,707) ============ ============ Income (loss) per common and common equivalent shares Basic $ 0.17 $ (0.10) Diluted $ 0.16 $ (0.10) Weighted average number of common and common equivalent shares outstanding Basic 62,441,170 62,003,727 Diluted 65,434,448 62,003,727 TASER International, Inc. Balance Sheets (Unaudited) Sept. 30, Dec. 31, 2007 2006 ------------- ------------- ASSETS Current Assets Cash and cash equivalents $ 26,986,405 $ 18,773,685 Short-term investments -- 3,557,289 Accounts receivable, net 13,005,969 10,068,049 Inventory 10,956,792 9,257,746 Prepaids and other assets 2,305,332 2,164,002 Current deferred income tax asset 8,827,796 12,295,493 ------------- ------------- Total Current Assets 62,082,294 56,116,264 Long-term investments 25,990,004 25,477,574 Property and equipment, net 22,760,414 20,842,632 Deferred income tax asset 16,054,312 15,868,719 Intangible assets, net 1,816,845 1,532,500 ------------- ------------- Total Assets $ 128,703,869 $ 119,837,689 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion of capital lease obligations $ 29,330 $ 45,214 Accounts payable and accrued liabilities 7,522,736 6,789,474 Current deferred revenue 1,457,509 1,037,441 Deferred insurance settlement proceeds 485,143 509,067 Customer deposits 397,761 171,492 Litigation settlement liabilities -- 9,750,000 ------------- ------------- Total Current Liabilities 9,892,479 18,302,688 Capital lease obligations, net of current portion 13,155 30,974 Deferred revenue, net of current portion 3,039,227 1,975,489 Other liabilities 754,510 199,999 ------------- ------------- Total Liabilities 13,699,371 20,509,150 ------------- ------------- Commitments and Contingencies -- -- Stockholders' Equity Common stock 633 622 Additional paid-in capital 85,957,807 80,629,659 Treasury stock (2,208,957) (2,208,957) Retained earnings 31,255,015 20,907,215 ------------- ------------- Total Stockholders' Equity 115,004,498 99,328,539 ------------- ------------- Total Liabilities and Stockholders' Equity $ 128,703,869 $ 119,837,689 ============= ============= TASER International, Inc. Selected Statement of Cash Flows information (Unaudited) For the Nine Months Ended Sept. 30, Sept. 30, 2007 2006 ------------ ------------ Net Income (loss) $ 10,347,800 $ (6,404,707) Depreciation and amortization 1,843,272 1,548,115 Stock-based compensation expense 1,007,814 948,340 Net cash provided by operating activities 6,681,548 9,539,435 Net cash used by investing activities (1,005,470) (8,552,685) Net cash provided (used) by financing activities 2,536,642 (1,504,839) Cash and Cash Equivalents, end of period $ 26,986,405 $ 15,833,820