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|TASER Reports Record Quarter With 27% Sequential Growth in New Business|
|Company Achieves $16.3 Million in Revenue, $4.5 Million Net Income, $34.6 Million Cash Balances, and Earnings of $0.16 Per Basic Share|
SCOTTSDALE, Ariz., Jul 20, 2004 /PRNewswire-FirstCall via COMTEX/ -- TASER International, Inc. (Nasdaq: TASR) a market leader in advanced non-lethal weapons reported today that revenues for the second quarter of 2004 were a record $16.3 million with earnings of $4.5 million and basic earnings per share of $0.16 ($0.14 diluted). Revenues increased 290% over the second quarter of 2003, and 24% over the previous record achieved in the first quarter of 2004. Net income grew 1,194% over the second quarter of 2003, and 26% over the first quarter of 2004. New orders received in the quarter were a record $16.7 million, an increase of 27% over the previous record quarter. As of June 30, 2004, the Company's cash balances were approximately $34.6 million, an increase of $18.7 million from December 31, 2003.
"We are pleased to report that our new business grew at 27% sequentially from last quarter. Our business has continued to expand and we have recently revised our revenue guidance upward from 100% growth to an expected 150% revenue growth this year," stated Rick Smith, CEO of TASER International, Inc.
"In addition to the financial milestones achieved during the second quarter, we achieved significant business milestones as well, including our first major order from the United States Department of Defense for $1.8 million dollars, the addition of our new CFO, Daniel Behrendt, to expand our management team, improvements in production yields, completion of a two for one share split, and the dismissal of two law suits successfully defended by the company," continued Mr. Smith.
"During the second quarter, we added a record number of 996 new departments to the growing list of agencies testing or deploying TASER conducted energy weapons, increasing the total by 23% to a total of 5,388 agencies. Further, 299 police departments indicated they are implementing full deployment of our products to front line officers during the quarter, increasing the total number of full deployments by 47% to a total of 930. Because of the difficulty of collecting accurate data concerning the number of new departments, from this point forward we will focus on the number of TASER conducted energy weapons deployed by police agencies and will no longer report the number of departments," continued Smith.
The Company would also like to report that subsequent to the issuance of the Company's unaudited consolidated financial statements for the quarter ended March 31, 2004, the Company discovered an error in its calculation of the deferred tax benefit it derives from employees' sale of stock obtained via the exercise of stock options. When an employee sells shares in this manner, the Company is able to obtain a tax deduction. Due to the Company's calculation error, it understated how much its future income taxes would be reduced. The tax benefit from the stock option transactions had previously been calculated as $2.1 million. The corrected tax benefit is $8.9 million. The change affects the Company's balance sheet and statement of cash flows only. It results in a net increase of $6.8 million to additional paid in capital that corresponds to the lower taxes that the Company will pay in the future. The Company recognizes a corresponding $6.8 million increase to deferred income tax assets. There was no impact on the Company's results of operations, including net income or earnings per share. The Company is issuing an amended 10-QSB to reflect this restatement.
About TASER International, Inc.
TASER International, Inc. provides advanced less-lethal weapons for use in the law enforcement, private security, and personal defense markets. Its flagship ADVANCED TASER(R) M26 product uses proprietary technology to incapacitate dangerous, combative, or high-risk subjects that may be impervious to other less-lethal means. Its latest product, the TASER X26 is 60% smaller and lighter than the ADVANCED TASER M26 and reduces injury rates to suspects and officers, thereby lowering liability risk and improving officer safety. TASER(R) technology is currently in testing or deployment at over 5,400 law enforcement and correctional agencies in the U.S. and Canada. Call 480-991-0797 or visit our website at www.TASER.com to learn more about the new standard in less-lethal weapons.
Note to Investors
This press release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. The forward-looking information is based upon current information and expectations regarding TASER International. 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. TASER International's future results may be impacted by risks associated with rapid technological change, new product introductions, new technological developments and implementations, execution issues associated with new technology, ramping manufacturing production to meet demand, litigation resulting from alleged product related injuries, media publicity concerning allegations of deaths occurring after use of the TASER device and the negative impact this could have on sales, product quality, implementation of manufacturing automation, potential fluctuations in quarterly operating results, competition, financial and budgetary constraints of prospects and customers, international order delays, dependence upon sole and limited source suppliers, fluctuations in component pricing, government regulations, dependence upon key employees, and its ability to retain employees. TASER International's future results may also be impacted by other risk factors listed from time to time in its SEC filings, including, but not limited to, the Company's Form 10-QSBs and its Annual Report on Form 10-KSB.
TASER International Inc. Statements of Income (Unaudited) Three Months Ended June 30, 2004 2003 Net sales $16,322,007 $4,184,018 Cost of products sold: Direct manufacturing expense 4,105,537 1,271,751 Indirect manufacturing expense 1,354,247 436,820 Grant expenditures 0 0 Total cost of products sold 5,459,784 1,708,571 Gross margin 10,862,223 2,475,447 Sales, general and administrative 3,359,395 1,675,365 Research and development 212,910 223,055 Income from operations 7,289,918 577,027 Interest income 55,118 7,475 Interest expense (392) (1,798) Other income (expense) 5,788 (3,567) Income before income taxes 7,350,432 579,137 Income tax 2,860,000 232,078 Net Income $4,490,432 $347,059 Income per share: Basic $0.16 $0.02 Diluted $0.14 $0.02 Weighted average number of common and common equivalent shares outstanding: Basic 28,779,344 16,970,178 Diluted 32,218,763 21,424,866 TASER International Inc. Statements of Income (Unaudited) Six Months Ended June 30, 2004 2003 Net sales $29,458,561 $7,585,650 Cost of products sold: Direct manufacturing expense 7,276,902 2,325,385 Indirect manufacturing expense 2,714,228 975,658 Grant expenditures 1,296 0 Total cost of products sold 9,992,426 3,301,043 Gross margin 19,466,135 4,284,607 Sales, general and administrative 5,930,556 3,004,771 Research and development 480,005 299,001 Income from operations 13,055,574 980,835 Interest income 95,799 15,832 Interest expense 0 (4,953) Other income (expense) 6,085 (5,503) Income before income taxes 13,157,458 986,211 Income tax 5,116,000 410,134 Net Income $8,041,458 $576,077 Income per share: Basic $0.29 $0.03 Diluted $0.26 $0.03 Weighted average number of common and common equivalent shares outstanding: Basic 27,738,986 16,873,800 Diluted 31,256,904 21,328,482 TASER International Inc. Balance Sheets (Unaudited) June 30, 2004 December 31, 2003 Current assets: Cash and cash equivalents $34,566,398 $15,878,326 Accounts receivable, net 6,635,023 5,404,333 Inventory, net 4,483,998 3,125,974 Prepaids and other assets 511,552 536,815 Income tax receivable 28,295 292,321 Deferred income tax asset 7,592,354 1,137,196 Total current assets 53,817,620 26,374,965 Property and equipment, net 5,792,871 3,946,881 Intangible assets, net 1,103,281 1,122,844 Total assets $60,713,772 $31,444,690 Liabilities and stockholders' equity: Notes payable -- 250,000 Current portion of capital lease obligations 8,577 15,223 Accounts payable and accrued liabilities 5,113,968 3,522,439 Customer deposits 29,594 185,802 Total current liabilities 5,152,139 3,973,464 Capital lease obligations, net of current portion 1,417 3,655 Deferred income tax liability 43,652 40,121 Total liabilities 5,197,208 4,017,240 Stockholders' equity: Common stock 289 126 Additional paid in capital 42,297,195 22,249,702 Retained earnings 13,219,080 5,177,622 Total stockholders' equity 55,516,564 27,427,450 Total liabilities and stockholders' equity $60,713,772 $31,444,690 AMENDMENT TO MARCH 31, 2004 10-QSB The Company will be issuing a restated 10-QSB for the quarter ended March 31, 2004. The change affects the Company's balance sheet and statement of cash flows primarily with a net increase of $6.8 million to additional paid in capital. There was no impact on the Company's results of operations, including net income or earnings per share. A summary of the effects of this change is as follows: March 31, 2004 As Previously As Restated Reported Income tax receivable $481,422 $292,321 Deferred income tax asset 807,742 7,765,625 Total current assets 37,935,377 44,704,159 Total assets 43,386,286 50,155,068 Additional paid-in capital 30,553,893 37,322,675 Total stockholder's equity 39,282,826 46,051,608 Total liabilities and stockholder's equity 43,386,286 50,155,068 On the Statement of Cash Flows the impact of the change was: March 31, 2004 As Previously As Restated Reported Deferred income taxes $332,985 $594,554 Stock option tax benefit 2,112,116 1,661,446 Income tax receivable (189,101) 0 Additionally, the Company added non-cash transaction information on the statement of cash flows of $7.2 million to provide additional disclosures related to the deferred income tax asset recorded from the sale of stock by employees obtained via the exercise of stock options and the increase to additional paid in capital of $8.9 million from the same transactions. Other Selected Data: TASER International, Inc. Selected Cash Flows Information (Unaudited) June 30, 2004 June 30, 2003 Net Income $8,041,458 $576,077 Depreciation & Amortization 255,364 173,728 Net cash provided by (used in) operating activities 13,174,294 347,413 Net cash used in investing activities (2,081,791) (1,367,996) Net cash provided by (used in) financing activities 7,595,569 126,839 Ending Cash Balance $34,566,398 $2,683,193 TASER International, Inc. Key Operating Ratios Description June 30, 2003 September 30, 2003 December 31, 2003 Working Capital $4.8 Million $9.4 Million $22.4 Million Current Ratio 3.03 3.96 6.64 Profit Margin 8.29% 17.7% 26.1% Sales $4.2 Million $6.1 Million $10.8 Million Quarterly Sales per Employee $52,300 $55,900 $71,394 Number of Employees 80 109 151 Description March 31, 2004 June 30, 2004 Working Capital $40.6 Million $48.7 Million Current Ratio 11.0 10.45 Profit Margin 27.0% 27.5% Sales $13.1 Million $16.3 Million Quarterly Sales per Employee $66,013 $76,991 Number of Employees 199 212
For further information contact Phil Smith, Chairman at Phil@TASER.com or call 800-978-2737 ext. 2005. Visit the company's web-site at www.TASER.com for facts and video.
SOURCE TASER International, Inc.
Phil Smith, Chairman of the Board of TASER International, Inc., +1-480-905-2005