TASER Q4 Revenues Up More Than 50% to $32.1 Million

TASER Q4 Revenues Up More Than 50% to $32.1 Million 
Company Reports Record Annual Revenue of $114.8 Million 
SCOTTSDALE, AZ -- (Marketwire) -- 02/21/13 --  TASER International,
Inc. (NASDAQ: TASR), today announced financial results for the fourth
quarter of 2012 ended December 31, 2012. 
Financial Summary: 


 
--  Net sales were $32.1 million in the quarter, an increase of $10.8
    million, or 50.6% compared to fourth quarter 2011 sales of $21.3
    million. The increase in sales versus the prior year was primarily
    driven by agencies upgrading to the new TASER(R) X2(TM) Conducted
    Electrical Weapon (CEW). The TASER Protection Plan supplemented the
    upgrade program allowing the Company to offer financing to agencies
    allowing them to accelerate the upgrade of their fleet of TASER
    devices.
    
    
--  Revenues in the CEW segment grew $9.6 million or 46.6% in the fourth
    quarter of 2012 when compared to the fourth quarter of 2011.
    
    
--  Revenues in the Video segment grew $1.2 million, or 170%, to $1.8
    million in the fourth quarter of 2012.
    
    
--  Gross margin in the fourth quarter of 2012 was 59.7%, compared to
    32.7% in the same period last year. Negatively affecting gross margin
    in the fourth quarter of 2011 was a $3.7 million charge for excess
    inventory of the X3 product line and first generation of AXON video
    products. The remaining improvement in gross margin in 2012 was driven
    by the increase in sales of the X2 which has a more favorable margin
    profile, more direct sales which increased our average selling price,
    and a reduction in expenses in our Video segment due to our decision
    to utilize third party cloud services along with on-going
    manufacturing and operational efficiencies.
    
    
--  Sales, general and administrative (SG&A) expenses of $12.5 million
    in the fourth quarter of 2012 increased 23.3%, from $10.1 million in
    the fourth quarter of 2011. This increase was partially a result of
    higher variable selling expenses associated with increased direct
    sales and internet marketing initiatives. Personnel costs also
    increased as a result of additional strategic hires and increases to
    commission and bonus expense. The quarter was also impacted by
 a stock
    compensation true-up for performance-based stock. The Company
    continues to make strategic investments in SG&A expenses to grow
    its international and video product sales. We are encouraged by the
    early results of these investments which will continue in 2013.
    
    
--  Research and development (R&D) expenses of $2.0 million for the
    fourth quarter of 2012 are consistent with the prior-year and previous
    quarters.
    
    
--  Operating income improved $11.9 million to $4.7 million in the fourth
    quarter of 2012 from an operating loss of $7.2 million in the
    prior-year quarter, largely due to the increased sales and an improved
    gross margin discussed above.
    
    
--  Adjusted EBITDA was $7.7 million for the fourth quarter of 2012, a
    significant increase from Adjusted EBITDA of $1.2 million in the
    fourth quarter of 2011. The increase is due to higher sales and
    improved margins.
    
    
--  Income taxes for the fourth quarter of 2012 were $1.0 million. The
    income tax expense in the fourth quarter was favorably impacted by the
    reversal of our valuation reserve for deferred tax assets. The strong
    operating results in 2012, coupled with a favorable forecast led the
    Company to conclude that it is more likely than not that its deferred
    tax assets will be realized.
    
    
--  Net income for the fourth quarter of 2012 was $3.8 million, or $0.07
    per share on a basic and diluted basis.
    
    
--  In the fourth quarter of 2012, the Company generated $3.3 million in
    cash from operating activities. The Company generated $26.5 million in
    cash from operating activities during the full year of 2012.
    
    
--  Cash, cash equivalents and investments were $37.8 million at the end
    of the fourth quarter of 2012, after completing $20.0 million of stock
    repurchases during the year. The Company has no debt, other than a
    capital lease, recorded on its balance sheet.

  
"The X2 Smart Weapon continued to show strong growth in the fourth
quarter which is evidence of the success of our upgrade program,"
remarked Rick Smith, CEO of TASER International, Inc. "With the
release of the X26P Smart Weapon in January 2013, we anticipate even
more agencies will take advantage of our upgrade programs in 2013. We
also saw growth in the number of agencies embracing on-officer
recording systems through sales of AXON Flex(TM) on-officer cameras
and EVIDENCE.com service. Bookings continued to trend upwards this
quarter, growing 26.8% sequentially from the third quarter, and we
continue to receive positive feedback from the marketplace about the
value-add of these products. As a whole, these initiatives drove a
50% year-over-year growth in our top-line results for the fourth
quarter. 
"Evidenced by the strength of our top line growth, we have continued
to reinvest into the business to drive future growth as demonstrated
by the uptick in SG&A expenses. We will look to tie this reinvestment
directly with the sales and booking trends that we see in the future.
We also continue to focus on creating a culture of operational
excellence which has helped the Company deliver a fourth consecutive
quarter of strong operational results. We remain well positioned to
deliver on the execution of our strategy to continue to generate
significant operating cash flows, and to drive profitable growth and
value for all of our stakeholders," concluded Smith. 
Other Significant Events:  


 
--  In the fourth quarter, the Company continued to see adoption of the
    new X2 Smart Weapon platform by agencies through its extended upgrade
    program. The Company announced a number of significant orders that
    occurred during the fourth quarter, which included:
    
    
    --  The Phoenix Police Department (AZ) purchased 2,365 X2 CEWs.
    --  The Tempe Police Department (AZ) purchased 350 X2 CEWs.
    --  The Knox County Sheriff's Office (TN) purchased 285 X2 CEWs.
    --  The Cleveland Police Department (OH) purchased 251 X2 CEWs.
    --  The Washtenaw County Sheriff's Department (MI) for 165 X2 CEWs.
    --  The Cobb County Police Department (GA) purchased 120 X2 CEWs.
    --  The Baton Rouge Police Department (LA) purchased 100 X2 CEWs.
        
        
--  The Company continued to see new agencies adopting the new TASER Flex
    on-officer camera and EVIDENCE.com management service during the
    fourth quarter. Bookings for AXON Flex and EVIDENCE.com systems more
    than tripled over the course of two quarters from approximately
    $450,000 in the second quarter of 2012 to approximately $1.7 million
    in the fourth quarter of 2012. AXON Flex and EVIDENCE.com deployments
    included significant order from the Sale Lake Valley Police Alliance,
    the Fort Collins Police Department, the Wichita Police Department, and
    dozens of smaller agencies.

  
The Company will host its fourth quarter 2012 earnings conference call
on Thursday, February 21, 2013 at 10:00 a.m. ET. To join the live
audio presentation, please dial toll free at 877-303-9126 or
253-237-1156 for international callers. The pass code is 92888267.  
Non-GAAP Measures  
To supplement the Company's financial resul
ts presented in accordance
with GAAP, we are presenting the non-GAAP financial measures of
EBITDA and Adjusted EBITDA. Our management uses these non-GAAP
financial measures in evaluating the Company's performance in
comparison to prior periods and as a measure of liquidity. We believe
that both management and investors benefit from referring to these
non-GAAP financial measures in assessing our performance and when
planning and forecasting our future periods. A reconciliation of GAAP
to the non-GAAP financial measures is presented at the end of the
release. 
EBITDA is defined as consolidated net income (loss) before net
interest expense, income taxes and depreciation and amortization.
Adjusted EBITDA as presented herein is defined as net income (loss)
before net interest expense, income taxes, depreciation and
amortization and before certain other items, including: stock-based
compensation; loss on write-down/disposal of property, equipment and
intangibles, net; provision for obsolete and excess inventory;
litigation judgment (reversal) expense; loss on impairment; and
interest income and other (income) expense. 
Caution on Use of Non-GAAP Measures 
These non-GAAP financial measures are not consistent with GAAP, and
management believes investors will benefit by referring to these
non-GAAP financial measures when assessing the Company's 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 Company's GAAP
    financial measures;
    
    
--  these non-GAAP financial measures should not be considered in
    isolation from, or as a substitute for, the Company's GAAP financial
    measures;
    
    
--  these non-GAAP financial measures should not be considered to be
    superior to the Company's 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 Company's
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 within
this press release.  
About TASER International, Inc.  
TASER International, Inc. (NASDAQ: TASR) is a global provider of
safety technologies that protect life and prevent conflict. More than
16,000 public safety agencies in 100 countries rely on TASER(R)
conducted electrical weapons and AXON on-officer camera systems to
help protect and serve. Today, the use of TASER CEWs has saved more
than 100,000 lives from potential death or serious injury while TASER
innovations benefit individuals and families too, providing personal
protection and accountability while maintaining regard for life.
Since 1994, more than 251,000 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 and
www.EVIDENCE.com or by calling (800) 978-2737. Be a part of the TASER
community by joining us on Facebook, LinkedIn, Twitter, and YouTube.  
TASER(R) is a registered trademark of TASER International, Inc.,
registered in the U.S. All rights reserved. TASER logo, AXON, AXON
Flex, X26, X26P and X2 are trademarks of TASER International, Inc. 
Note to Investors  
To review the TASER International Safe Harbor Statement, please
visit: http://investor.taser.com/safeHarbor.cfm. 
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 regarding
our expectations, beliefs, intentions or strategies regarding the
future; that we will continue to make investments through increased
SG&A in 2013; that we anticipate agencies will take advantage of our
upgrade program and that we are well positioned to execute our
strategy. 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. 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: market acceptance of our
products; budgetary and political constraints of prospects and
customers; litigation risks resulting from alleged product-related
injuries and media publicity concerning allegations of deaths
occurring after use of the TASER device and the negative impact this
publicity could have on sales; our dependence on sales of our TASER
X26 and X2 CEWs; our ability to manage our growth; our ability to
increase manufacturing production to meet demand; the outcome of
pending litigation; establishment and expansion of our direct and
indirect distribution channels; the acceptance of our EVIDENCE.com
software model; breach of our security measures resulting in
unauthorized access to customer data; our ability to design,
introduce and sell new products; delays in development schedules;
risks relating to acquisitions and joint ventures; the length of our
sales cycle and our ability to realize benefits from our marketing
and selling efforts; risks of governmental regulations, including
regulations of our products by the United States Consumer Product
Safety Commission, regulation of our products as a "crime control"
product by the Federal government, state and local government
regulation and foreign regulation; our compliance with regulations
governing the environment, including but not limited to, regulations
within the European Union; our ability to protect our intellectual
property; intellectual property infringement claims and relating
litigation costs; competition in foreign countries relating to
foreign patents; our successful identification of existing
intellectual property rights that might infringe on our developments;
the adverse effects that could result from our products being
classified as firearms by the United States Bureau of Alcohol and
Firearms or any state; product defects; rapid technological change;
our dependence on third party suppliers for key components of ou
r
products; component shortages; our dependence on foreign suppliers
for key components; rising costs of raw materials and transportation
relating to petroleum prices; catastrophic events; outages and
disruptions relating to our EVIDENCE.com service; fluctuations in
quarterly operating results; foreign currency fluctuations;
counterparty risks relating to cash balances held in excess of FDIC
insurance limits; employee retention risks and other factors
identified in documents filed by us with the Securities and Exchange
Commission, including those set forth in our Form 10-K for the year
ended December 31, 2011 under the caption "Risk Factors." 
For investor relations information please contact Erin Curtis 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. 


 
                                                                            
                                                                            
                         TASER International, Inc.                          
                   Consolidated Statements of Operations                    
                                (Unaudited)                                 
                                                                            
                                                                            
                                                For the Three Months Ended  
                                               ---------------------------- 
                                                December 31,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
Net sales                                      $  32,115,957  $  21,329,791 
Cost of products sold and services delivered      12,948,025     10,607,369 
Excess inventory charges                                   -      3,746,149 
                                               -------------  ------------- 
Gross margin                                      19,167,932      6,976,273 
                                                                            
Sales, general and administrative expenses        12,467,094     10,113,098 
Research and development expenses                  1,982,608      2,080,799 
(Gain) loss on write down / disposal of                                     
 property and equipment, net                         (19,027)     2,004,043 
                                               -------------  ------------- 
                                                                            
Income (loss) from operations                      4,737,257     (7,221,667)
                                                                            
Interest and other (expense) income, net              57,297        (16,278)
                                               -------------  ------------- 
                                                                            
Income (loss) before provision (benefit) for                                
 income taxes                                      4,794,554     (7,237,945)
Provision (benefit) for income taxes                 979,748     (1,336,894)
                                                                            
                                               -------------  ------------- 
Net income (loss)                              $   3,814,806  $  (5,901,051)
                                               =============  ============= 
                                                                            
                                                                            
Income (loss) per common and common equivalent                              
 shares                                                                     
Basic                                          $        0.07  $       (0.11)
Diluted                                        $        0.07  $       (0.11)
                                                                            
Weighted average number of common and common                                
 equivalent shares outstanding                                              
Basic                                             52,503,411     55,861,811 
Diluted                                           54,297,140     55,861,811 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
                   Consolidated Statements of Operations                    
                                (Unaudited)                                 
                                                                            
                                                                            
                                               For the Twelve Months Ended  
                                             ------------------------------ 
                                              December 31,    December 31,  
                                                  2012            2011      
                                             --------------  -------------- 
                                                                            
Net sales                                    $  114,752,748  $   90,027,906 
Cost of products sold and services delivered     47,038,173      41,752,520 
Excess inventory charges                                  -       3,746,149 
                                             --------------  -------------- 
Gross margin                                     67,714,575      44,529,237 
                                                                            
Sales, general and administrative expenses       39,086,190      38,000,455 
Research and development expenses                 8,139,359       9,989,219 
Litigation judgment (reversal) expense           (2,200,000)      3,301,243 
Asset impairment                                          -       1,353,857 
Loss on write down / disposal of property                                   
 and equipment, net                                 160,506       2,800,396 
                                             --------------  -------------- 
                                                                            
Income (loss) from operations                    22,528,520     (10,915,933)
                                                                            
Interest and other income, net                       82,842       1,287,192 
                                             ------
--------  -------------- 
                                                                            
Income (loss) before provision (benefit) for                                
 income taxes                                    22,611,362      (9,628,741)
Provision (benefit) for income taxes              7,873,620      (2,588,875)
                                                                            
                                             --------------  -------------- 
Net income (loss)                            $   14,737,742  $   (7,039,866)
                                             ==============  ============== 
                                                                            
                                                                            
Income (loss) per common and common                                         
 equivalent shares                                                          
Basic                                        $         0.27  $        (0.12)
Diluted                                      $         0.27  $        (0.12)
                                                                            
Weighted average number of common and common                                
 equivalent shares outstanding                                              
Basic                                            53,827,204      59,435,624 
Diluted                                          54,722,785      59,435,624 
                                                                            
                                                                            
                                                                            
                                                                            
                          TASER International, Inc.                         
                              Segment Reporting                             
                                (Unaudited)                                 
                                                                            
                                                                            
                                         For the Three Months Ended         
                                --------------------------------------------
                                             December 31, 2012              
                                ------------------------------------------- 
                                                                            
                                     Video           CEW           Total    
                                 ------------   ------------   ------------ 
Product sales                   $   1,605,994  $  30,280,142  $  31,886,136 
Service revenue                       229,821              -        229,821 
                                -------------  -------------  ------------- 
Net sales                           1,835,815     30,280,142     32,115,957 
   
                             -------------  -------------  ------------- 
                                                                            
Cost of products sold               1,060,474     11,281,458     12,341,932 
Cost of service delivered             606,093              -        606,093 
Excess inventory charges                    -              -              - 
                                -------------  -------------  ------------- 
Cost of products sold and                                                   
 services delivered                 1,666,567     11,281,458     12,948,025 
                                -------------  -------------  ------------- 
                                                                            
Gross margin                          169,248     18,998,684     19,167,932 
                                                                            
Sales, general and                                                          
 administrative expenses            1,085,144     11,381,950     12,467,094 
Research and development                                                    
 expenses                             850,485      1,132,123      1,982,608 
(Gain) loss on write down /                                                 
 disposal of property and                                                   
 equipment, net                             -        (19,027)       (19,027)
                                -------------  -------------  ------------- 
(Loss) income from operations   $  (1,766,381) $   6,503,638  $   4,737,257 
                                =============  =============  ============= 
                                                                            
                                -------------  -------------  ------------- 
(Loss) income from operations,                                              
 normalized (a)                 $  (1,766,381) $   6,484,611  $   4,718,230 
                                =============  =============  ============= 
                                                                            
Operating margin %                        -96%            21%            15%
Operating margin %,normalized             -96%            21%            15%
                                                                            
 
                                                                            
                                        For the Three Months Ended          
                               -------------------------------------------- 
                                              December 31, 2011             
                                 ------------------------------------------ 
                                                                            
                                     Video           CEW           Total    
                                 ------------   ------------   ------------ 
Product sales                   $     580,183  $  20,649,895  $  21,230,078 
Service revenue                        99,713              -         99,713 
                                -------------  -------------  ------------- 
Net sales                             679,896     20,649,895     21,329,791 
                                -------------  -------------  ------------- 
                                                                            
Cost of products sold                 737,007      8,526,467      9,263,474 
Cost of service delivered           1,343,895              -      1,343,895 
Excess inventory charges            1,997,050      1,749,099      3,746,149 
                                -------------  -------------  ------------- 
Cost of products sold and                                                   
 services delivered                 4,077,952     10,275,566     14,353,518 
                                -------------  -------------  ------------- 
                                                                            
Gross margin                       (3,398,056)    10,374,329      6,976,273 
                                                                            
Sales, general and                                                          
 administrative expenses              936,560      9,176,538     10,113,098 
Research and development                                                    
 expenses                           1,121,893        958,906      2,080,799 
(Gain) loss on write down /                                                 
 disposal of property and                                                   
 equipment, net                     1,445,593        558,450      2,004,043 
                                -------------  -------------  ------------- 
(Loss) income from operations   $  (6,902,102) $    (319,565) $  (7,221,667)
                                =============  =============  ============= 
                                                                            
                                -------------  -------------  ------------- 
(Loss) income from operations,                                              
 normalized (a)                 $  (3,459,459) $   1,987,984  $  (1,471,475)
                                =============  =============  ============= 
                                                                            
Operating margin %                      -1015%            -2%           -34%
Operating margin %,normalized            -509%            10%            -7%
                                                                            

 
                                                                            
                                         For the Twelve Months Ended        
                                --------------------------------------------
                                             December 31, 2012              
                                ---------
---------------------------------- 
                                                                            
                                     Video           CEW           Total    
                                 ------------   ------------   ------------ 
Product sales                   $   5,070,600  $ 109,054,723  $ 114,125,323 
Service revenue                       627,425              -        627,425 
                                -------------  -------------  ------------- 
Net sales                           5,698,025    109,054,723    114,752,748 
                                -------------  -------------  ------------- 
                                                                            
Cost of products sold               3,773,152     39,350,134     43,123,286 
Cost of service delivered           3,914,887              -      3,914,887 
Excess inventory charges                    -              -              - 
                                -------------  -------------  ------------- 
Cost of products sold and                                                   
 services delivered                 7,688,039     39,350,134     47,038,173 
                                -------------  -------------  ------------- 
                                                                            
Gross margin                       (1,990,014)    69,704,589     67,714,575 
                                                                            
Sales, general and                                                          
 administrative expenses            3,510,372     35,575,818     39,086,190 
Research and development                                                    
 expenses                           4,201,193      3,938,166      8,139,359 
Litigation judgment expense                 -     (2,200,000)    (2,200,000)
Asset impairment                            -              -              - 
Loss on write down / disposal                                               
 of property and equipment, net             -        160,506        160,506 
                                 ------------   ------------   ------------ 
(Loss) income from operations   $  (9,701,579) $  32,230,099  $  22,528,520 
                                =============  =============  ============= 
                                                                            
                                -------------  -------------  ------------- 
(Loss) income from operations,                                              
 normalized (a)                 $  (9,701,579) $  30,190,605  $  20,489,026 
                                =============  =============  ============= 
Operating margin %                       -170%            30%            20%
Operating margin %,normalized            -170%            28%            18%
                                                                            
                                                                            
 
                                                                            
                                        For the Twelve Months Ended         
                               -------------------------------------------- 
                                              December 31, 2011             
                                 ------------------------------------------ 
                                                                            
                                     Video           CEW           Total    
                                 ------------   ------------   ------------ 
Product sales                   $   3,001,143  $  86,675,067  $  89,676,210 
Service revenue                       351,696                       351,696 
                                -------------  -------------  ------------- 
Net sales                           3,352,839     86,675,067     90,027,906 
                                -------------  -------------  ------------- 
                                                                            
Cost of products sold               2,692,729     34,212,839     36,905,568 
Cost of service delivered           4,846,952              -      4,846,952 
Excess inventory charges            1,997,050      1,749,099      3,746,149 
                                -------------  -------------  ------------- 
Cost of products sold and                                                   
 services delivered                 9,536,731     35,961,938     45,498,669 
                                -------------  -------------  ------------- 
                                                                            
Gross margin                       (6,183,892)    50,713,129     44,529,237 
                                                                            
Sales, general and                                                          
 administrative expenses            3,206,566     34,793,889     38,000,455 
Research and development                                                    
 expenses                           4,544,345      5,444,874      9,989,219 
Litigation judgment expense                 -      3,301,243      3,301,243 
Asset impairment                            -      1,353,857      1,353,857 
Loss on write down / disposal                                               
 of property and equipment, net     2,156,836        643,560      2,800,396 
                                 ------------   ------------   ------------ 
(Loss) income from operations   $ (16,091,639) $   5,175,706  $ (10,915,933)
                                =============  =============  ============= 
                                                                            
                                -------------  -------------  ------------- 
(Loss) income from operations,                                              
 normalized (a)                 $ (11,937,753) $  12,223,465  $     285,712 
                                =============  =============  ============= 
Operating margin %                       -480%             6%           -12%
Operating margin %,normalized            -356%            14%             0%
                                                                            
                                                                            
                                                                            
(a) Income from operations excluding excess inventory charges, litigation   
judgment expense, asset impairment and loss on write down / disposal of     
property and equipment, net                                                 
                                                                            
                                                                            
                                                                            
                                                                            
                          TASER International, Inc.                         
                AXONFlex and EVIDENCE.COM Bookings by Quarter               
                                                                            
                                                                            
                                                                            
                                 For the Three Months Ended                 
                 -----------------------------------------------------------
                    Dec. 31,      Sept. 30,      June 30,      March 31,    
                       2012          2012          2012           2012      
                 -----------------------------------------------------------
                                                                            
                                                                            
Bookings         $  1,670,813  $  1,318,107  $    451,183   $    352,231    
                                         
                                   
                                                                            
                                                                            
AXON Flex and EVIDENCE.COM Bookings is a statistical measure defined as the 
 sales price of orders placed in the relevant time period. Bookings is an   
 indication of the activity the Company is seeing relative to AXON Flex and 
 EVIDENCE.COM. The Company has deliverables to meet, prior to recognizing   
 revenue related to many of the orders. These statistics represent orders   
 and not invoiced sales. Once invoiced, the revenue related to EVIDENCE.COM 
 is recognized over the requisite service period of one to five years. For  
 more information relative to our revenue recognition policies, please      
 reference our SEC filings.                                                 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
           Reconciliation of GAAP to Non-GAAP Financial Measures            
                                (Unaudited)                                 
                                                                            
                            For the Three Months     For the Twelve Months  
                                   Ended                     Ended          
                         ------------------------  ------------------------ 
                           December     December     December     December  
                             31,          31,          31,          31,     
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                                                                            
Net income (loss)        $ 3,814,806  $(5,901,051) $14,737,742  $(7,039,866)
  Depreciation and                                                          
   amortization            1,405,261    1,983,931    6,519,250    8,096,543 
  Interest expense             5,360       32,412        9,839       33,067 
  Provision (benefit)                                                       
   for income taxes          979,748   (1,336,894)   7,873,620   (2,588,875)
                         -----------  -----------  -----------  ----------- 
EBITDA                   $ 6,205,175  $(5,221,602) $29,140,451  $(1,499,131)
                         ===========  ===========  ===========  =========== 
                                                                            
Adjustments:                                                                
  Stock-based                                                               
   compensation expense  $ 1,224,456  $   504,856  $ 3,421,506  $ 3,038,300 
  Loss on write                                                             
   down/disposal of                                                         
   property, equipment                                                      
   and intamgibles, net       50,280    2,028,582      355,418    2,854,752 
  Provision for excess                                                      
   and obsolete                                                             
   inventory                 316,882    3,863,528      553,701    4,610,197 
  Litigation judgment                                                       
   (reversal) expense              -            -   (2,200,000)   3,301,243 
  Loss on impairment               -            -            -    1,353,857 
  Interest income and                                                       
   other (income)                                                           
   expense                   (62,657)     (16,134)     (92,681)  (1,320,259)
                         -----------  -----------  -----------  ----------- 
Adjusted EBITDA          $ 7,734,136  $ 1,159,230  $31,178,395  $12,338,959 
                         ===========  ===========  ===========  =========== 
Adjusted EBITDA as a                                                        
 percentage of net sales        24.1%         5.4%        27.2%        13.7%
                                                                            
                                                                            
                                                                            
Composition of stock-                                                       
 based compensation:                                                        
                            For the Three Months     For the Twelve Months  
                                   Ended                     Ended          
                         ------------------------  ------------------------ 
                           December     December     December     December  
                             31,          31,          31,          31,     
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                                                                            
Cost of products sold    $    38,383  $   (14,040) $   172,360  $   121,177 
Sales, general and                                                          
 administrative expenses   1,014,593      400,081    2,645,827    2,291,339 
Research and development                                                    
 expenses                    171,480      118,815      603,319      625,784 
                         -----------  -----------  -----------  ----------- 
                         $ 1,224,456  $   504,856  $ 3,421,506  $ 3,038,300 
                       
  ===========  ===========  ===========  =========== 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
                        Consolidated Balance Sheets                         
                                (Unaudited)                                 
                                                                            
                                                                            
                                                December 31,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                   ASSETS                                   
                                                                            
Current Assets:                                                             
Cash and cash equivalents                      $  36,126,791  $  21,300,733 
Short-term investments                             1,680,958      5,108,189 
Accounts and notes receivable, net                18,101,240     11,780,135 
Inventory                                         10,993,209     11,484,761 
Prepaid expenses and other current assets          2,754,331      2,089,676 
Deferred income tax assets, net                    9,395,987      9,968,929 
                                               -------------  ------------- 
Total current assets                              79,052,516     61,732,423 
                                                                            
Property and equipment, net                       21,952,201     26,845,220 
Deferred income tax assets, net            
       11,605,812     12,716,169 
Intangible assets, net                             3,317,169      3,224,006 
Other assets                                         308,553        444,933 
                                               -------------  ------------- 
                                                                            
Total assets                                   $ 116,236,251  $ 104,962,751 
                                               =============  ============= 
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
                                                                            
Current Liabilities:                                                        
Accounts payable                               $   6,222,904  $   4,513,938 
Accrued liabilities                                7,065,085      7,643,004 
Current portion of deferred revenue                4,287,305      3,317,641 
Customer deposits                                    500,018        413,314 
Current portion of capital lease payable              33,947              - 
                                               -------------  ------------- 
Total current liabilities                         18,109,259     15,887,897 
                                                                            
Deferred revenue, net of current portion           7,835,767      4,636,901 
Liability for unrecognized tax benefits            2,902,896      1,982,399 
Long-term portion of capital lease payable           103,283              - 
                                               -------------  ------------- 
                                                                            
Total liabilities                                 28,951,205     22,507,197 
                                               -------------  ------------- 
                                                                            
Commitments and Contingencies                                               
                                                                            
Stockholders' Equity:                                                       
Preferred Stock                                            -              - 
Common Stock                                             661            652 
Additional paid-in capital                       111,661,393    101,597,626 
Treasury Stock                                   (67,203,043)   (47,207,093)
Retained earnings                                 42,883,067     28,145,325 
Accumulated other comprehensive loss                 (57,032)       (80,956)
                                               -------------  ------------- 
Total stockholders' equity                        87,285,046     82,455,554 
                                               -------------  ------------- 
                                                                            
Total liabilities and stockholders' equity     $ 116,236,251  $ 104,962,751 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
         Selected Consolidated Statement of Cash Flows Information          
                                (Unaudited)                                 
                                                                            
                                             For the Twelve Months Ended    
                                           December 31,      December 31,   
                                               2012              2011       
     
                                    ----------------  ---------------- 
                                                                            
Net income (loss)                        $     14,737,742  $     (7,039,866)
Depreciation and amortization                   6,519,250         8,096,543 
Stock-based compensation expense                3,421,506         3,038,300 
Net cash provided by operating                                              
 activities                                    26,517,213        17,265,765 
Net cash provided by (used in) investing                                    
 activities                                     1,681,055        (7,597,642)
Net cash used in financing activities         (13,363,416)      (31,061,610)
Cash and cash equivalents, end of period       36,126,791        21,300,733 

  
CONTACT:
Dan Behrendt
Chief Financial Officer
TASER International, Inc.
(480) 905-2000 
 
 
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