SCOTTSDALE, Ariz., Oct. 28, 2008 (GLOBE NEWSWIRE) -- TASER International, Inc. (Nasdaq:TASR) ("TASER" or "the Company"), a market leader in advanced electronic control devices (ECD), today reported financial results for the fiscal third quarter ended September 30, 2008.
For the third quarter of 2008, revenues were $22.9 million, a $5.7 million, or 20 percent decrease over the same quarter of the prior year. On a sequential basis, sales increased $1.8 million, driven primarily by a strong presence of international orders. The decline in sales versus the prior year reflects a continuing trend of lower municipal spending in the U.S., as law enforcement and correctional agencies reassign budget dollars due to economic constraints. Operations continued to demonstrate improvement, as gross margin increased to 60.8 percent in the third quarter of 2008, compared to 56.1 percent in the third quarter of 2007, reflecting the Company's continued focus on production efficiency and cost controls. Research and development expenses increased by $2.4 million, or 240 percent, in the third quarter of 2008 compared to the same period in 2007. The increase in research and development spending was consistent with the Company's initiatives towards extending its technological leadership to drive future growth and promote product diversification. As a result of the decrease in sales, combined with increased research and development spending, net operating income for the third quarter was $1.5 million compared to $6.9 million for the same period a year ago. The net income and diluted earnings per share for the third quarter of 2008 were $0.6 million and $0.01, respectively.
The Company generated $4.9 million from operating activities during the third quarter and ended the quarter with cash and cash equivalents of $42.5 million and zero debt.
Significant events in the third quarter of 2008 include the following:
1. International sales represented 16 percent of total net sales
for the quarter, compared to 12 percent in the second quarter
of 2008. Significant shipments included the first order for
1,246 TASER(r) X26(tm) ECDs from the Queensland Police Services
in Australia, which has more than 9,000 law enforcement
officers and is adopting TASER(r) technology after conducting
extensive studies and trials. A follow-on order for 1,000
TASER X26 devices was also received from the Korean National
Police Agency, which expanded its existing program.
2. French Prime Minister Mr. Francois Fillon and French Interior
Minister Michele Alliot-Marie issued an official decree in
September which will permit local French law enforcement
agencies to deploy TASER(r) ECDs. There currently are more
than 20,000 police officers at more than 4,000 local agencies
in France.
3. One of the more significant domestic orders announced during
the quarter was for 400 TASER X26 ECDs and 400 TASER(r) CAM(tm)
audio/visual recording systems from Palm Beach County
Sheriff's Office in West Palm Beach, FL.
4. In August, the Company named Jas Dhillon as Chief Strategy
Officer and General Manager of the newly formed TASER Virtual
Systems Division. Prior to joining TASER International, Mr.
Dhillon was a Senior Executive at Microsoft, leading the
team responsible for Business Development, Strategy, Product
Innovation, and Mergers/Acquisitions for Microsoft(r) Office
Live. At TASER, Mr. Dhillon will be leading the development
of sophisticated software architectures and a fully integrated
product roadmap as part of the Company's imperative strategic
initiatives.
5. Abstracts of four (4) human studies examining the safety of
TASER devices, including the eXtended Range Electronic
Projectile (XREP), were presented during the quarter at the
Australasian College for Emergency Medicine Winter Symposium.
The studies' conclusive results found that TASER ECDs do not
significantly impair breathing nor affect the human heart
adding to the significant body of scientific and medical
research on the general safety of TASER technology.
6. Three (3) more product liability suits were dismissed during
the quarter, representing at the end of the quarter a total
of seventy-four (74) wrongful death or injury suits that
have been dismissed or judgment entered in favor of the
Company.
7. After the close of the quarter, the Company learned on
Friday, October 24 that the United States District Court
for the Northern District of California eliminated the $5.2
million in punitive damages awarded by the jury in Betty Lou
Heston, et al. v. City of Salinas, TASER International, Inc.,
et al., TASER's first product liability courtroom loss in
June 2008. This is a significant legal finding in the
Company's favor and will reduce the estimated total damages
from the case by over 97 percent to only $153,150 in
compensatory damages. It is anticipated the judgment will
be entered during the fourth quarter.
"I am proud of the hard work of our entire team that turned in sequential revenue growth, profitability, solid margins, and almost $5 million in cash from operations, despite the current economic environment," said Rick Smith, Chief Executive Officer of TASER International, Inc. "Difficult economic times like these create opportunities for market leaders like TASER International to extend our technological and market leadership. During a period when many companies were eliminating their future growth initiatives, we were able to remain profitable and maintain positive cash flows, while also making significant investments towards the Company's future. I believe that these investments will further extend our leadership position well into the future, and our strong balance sheet gives us the operational flexibility to capitalize on opportunities unavailable to many other companies."
The Company will host its third quarter 2008 earnings conference call on Tuesday, October 28, 2008 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: 1-866-510-0707 or 1-617-597-5376. The pass code is 69153328 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.globenewswire.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
--------------------------
September 30, September 30,
2008 2007
----------- -----------
Net Sales $22,859,459 $28,533,419
----------- -----------
Cost of Products Sold:
Direct manufacturing expense 6,286,067 8,897,407
Indirect manufacturing expense 2,677,850 3,629,240
----------- -----------
Total Cost of Products Sold 8,963,917 12,526,647
----------- -----------
Gross Margin 13,895,542 16,006,772
Sales, general and administrative
expenses 9,055,060 8,145,117
Research and development expenses 3,331,697 978,011
----------- -----------
Income from Operations 1,508,785 6,883,644
Interest and other income, net 269,718 519,671
----------- -----------
Income before income taxes 1,778,503 7,403,315
Provision for income taxes 1,160,730 1,249,277
----------- -----------
Net income $ 617,773 $ 6,154,038
=========== ===========
Income per common and common
equivalent shares
Basic $ 0.01 $ 0.10
Diluted $ 0.01 $ 0.09
Weighted average number of
common and common equivalent
shares outstanding
Basic 61,714,889 62,950,482
Diluted 63,313,702 66,186,297
TASER International, Inc.
Statements of Income
(Unaudited)
For the Nine Months Ended
-------------------------
September 30, September 30,
2008 2007
----------- -----------
Net Sales $66,447,272 $69,698,610
----------- -----------
Cost of Products Sold:
Direct manufacturing expense 19,877,521 20,844,866
Indirect manufacturing expense 6,306,617 8,426,684
----------- -----------
Total Cost of Products Sold 26,184,138 29,271,550
----------- -----------
Gross Margin 40,263,134 40,427,060
Sales, general and administrative
expenses 27,925,704 24,071,952
Research and development expenses 8,463,231 3,211,646
Litigation judgment expense 5,200,000 --
----------- -----------
Income (loss) from Operations (1,325,801) 13,143,462
Interest and other income, net 1,492,448 1,453,073
----------- -----------
Income before income taxes 166,647 14,596,535
Provision for income taxes 348,023 4,248,735
----------- -----------
Net Income (loss) $ (181,376) $10,347,800
=========== ===========
Income (loss) per common and
common equivalent shares
Basic $ (0.00) $ 0.17
Diluted $ (0.00) $ 0.16
Weighted average number of
common and common equivalent
shares outstanding
Basic 62,568,846 62,441,170
Diluted 64,419,832 65,434,448
TASER International, Inc.
Balance Sheets
(Unaudited)
September 30, December 31,
2008 2007
-------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $ 42,499,289 $ 42,801,461
Short-term investments -- 8,499,978
Accounts receivable, net 11,600,310 11,691,553
Inventory 17,475,342 13,506,804
Prepaids and other assets 1,852,565 4,318,661
Current deferred income tax asset 7,037,158 15,608,325
-------------- -------------
Total Current Assets 80,464,664 96,426,782
Long-term investments 5,002,858 9,006,493
Property and equipment, net 26,454,698 23,599,680
Deferred income tax asset 12,908,482 6,724,104
Intangible assets, net 2,253,026 1,925,139
Other long-term assets 29,828 81,203
-------------- -------------
Total Assets $ 127,113,556 $ 137,763,401
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued
liabilities $ 11,966,847 $ 10,088,139
Current deferred revenue 2,168,629 1,694,644
Customer deposits 292,308 266,728
Deferred insurance settlement
proceeds -- 404,848
Current portion of capital lease
obligations -- 19,257
-------------- -------------
Total Current Liabilities 14,427,784 12,473,616
Capital lease obligations, net of
current portion -- 11,695
Deferred revenue, net of current
portion 3,971,877 3,541,267
Liability for unrecorded tax
benefits 1,056,619 1,100,073
-------------- -------------
Total Liabilities 19,456,280 17,126,651
-------------- -------------
Commitments and Contingencies -- --
Stockholders' Equity
Common stock 638 635
Additional paid-in capital 86,612,560 86,911,381
Treasury stock (14,708,237) (2,208,957)
Retained earnings 35,752,315 35,933,691
-------------- -------------
Total Stockholders' Equity 107,657,276 120,636,750
-------------- -------------
Total Liabilities and
Stockholders' Equity $ 127,113,556 $ 137,763,401
============== =============
TASER International, Inc.
Selected Statement of Cash Flows Information
(Unaudited)
For the Nine Months Ended
September 30, September 30,
2008 2007
------------ ------------
Net Income (loss) $ (181,376) $ 10,347,800
Depreciation and amortization 1,945,526 1,843,272
Stock-based compensation expense 1,396,113 1,007,814
Net cash provided by operating
activities 4,611,061 6,681,548
Net cash provided (used) by investing
activities 7,266,023 (1,005,470)
Net cash provided (used) by financing
activities (12,179,256) 2,536,642
Cash and Cash Equivalents, end of
period $ 42,499,289 $ 26,986,405