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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 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

                                              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
       Basic                                28,779,344            16,970,178
       Diluted                              32,218,763            21,424,866

                           TASER International Inc.
                             Statements of Income

                                                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
       Basic                                 27,738,986           16,873,800
       Diluted                               31,256,904           21,328,482

                           TASER International Inc.
                                Balance Sheets

                                        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'
     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
     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
     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

                                        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 or call 800-978-2737 ext. 2005. Visit the company's web-site at for facts and video.

SOURCE TASER International, Inc.

Phil Smith, Chairman of the Board of TASER International, Inc., +1-480-905-2005