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TASER Q1 Revenues Increase 19 Percent to $30.4 Million

TASER Q1 Revenues Increase 19 Percent to $30.4 Million 
Video Segment Revenues Increase 32 Percent Sequentially 
SCOTTSDALE, AZ -- (Marketwired) -- 04/25/13 --  TASER International,
Inc. (NASDAQ: TASR) today announced financial results for the first
quarter of 2013 ended March 31, 2013. 
Financial Summary: 


 
--  Net sales were $30.4 million in the quarter, an increase of $4.8
    million, or 19%, compared to first quarter 2012 sales of $25.6
    million. The increase in sales versus the prior year was primarily
    driven by numerous law enforcement agencies upgrading to the new
    TASER(R) X26P(TM) and TASER(R) X2(TM) Conducted Electrical
    Weapons (CEWs). The X2 upgrades also drove higher cartridge sales in
    comparison to the first quarter of 2012.
    
    
--  CEW segment revenues grew $3.2 million, or 13%, to $28.0 million in
    the first quarter of 2013, compared to first quarter 2012 revenues of
    $24.8 million.
    
    
--  Video segment revenues increased by $1.5 million year-over-year, or
    175%, to $2.4 million in the first quarter of 2013. Sequentially,
    first quarter 2013 Video segment revenues grew $0.6 million, or 32%,
    from fourth quarter 2012. Net operating losses in the Video segment
    were reduced by approximately 50% from $3.0 million in the first
    quarter of 2012 to $1.5 million in the first quarter of 2013.
    
    
--  Gross margin in the first quarter of 2013 was 61%, compared to 59% in
    the same period last year. The improvement in gross margin in the
    first quarter of 2013 was driven by the increase in sales of the X2
    and the new X26P, 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. Ongoing
    manufacturing and operational efficiencies also benefitted gross
    margin.
    
    
--  Sales, general and administrative (SG&A) expenses of $11.2 million
    in the first quarter of 2013 increased 27%, from $8.9 million in the
    first quarter of 2012. As a percentage of revenue, SG&A was 37% in
    the first quarter 2013 compared to 35% in the prior year.
    Sequentially, SG&A decreased 10% from $12.5 million in the fourth
    quarter of 2013. Personnel expenses increa
sed $1.1 million in the
    first quarter 2013 compared to first quarter 2012 due to the Company's
    strategic effort to enhance its front-end, customer facing
    capabilities. Expenses related to litigation activities increased
    approximately $0.4 million when compared to the first quarter of 2012.
    Finally, there were higher selling expenses associated with increased
    direct sales and costs associated with holding a Technology Summit for
    our Video segment.
    
    
--  Research and development (R&D) expenses of $2.0 million for the
    first quarter of 2013 are consistent with the prior-year and previous
    quarters.
    
    
--  Excluding a $2.2 million litigation judgment recovery in 2012,
    operating income increased $1.0 million, or 24%, to $5.3 million in
    the first quarter of 2013.
    
    
--  Adjusted EBITDA was $7.7 million for the first quarter of 2013, an
    increase from Adjusted EBITDA of $6.9 million in the first quarter of
    2012. The increase is due to higher sales and improved gross margins.
    
    
--  Net income for the first quarter of 2013 was $3.3 million, or $0.06
    per share on a basic and diluted basis.
    
    
--  In the first quarter of 2013, the Company generated $4.5 million in
    cash from operating activities. Cash was $38.6 million at the end of
    the first quarter of 2013, up from $36.1 million at December 31, 2012
    after completing $5.4 million of stock repurchases during the
    quarter.
    
    
--  The Company has no debt, other than a capital lease, recorded on its
    balance sheet.

  
"The Smart Weapon platform that we have built over the last two years
with the X2 and X26P provides compelling new capabilities for our
customers to upgrade their aging weapons," remarked Rick Smith, CEO
of TASER International, Inc. "Sales of the newly released X26P Smart
Weapon were very strong in the first quarter, accounting for more
than 10% of our CEW sales, and we expect that trend to continue in
the future as agencies recognize the benefits of our new Smart
Platform. X2 CEW sales reflected continued growth in the first
quarter. 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. We continue to receive
positive feedback from the marketplace about the value-add of these
products and are excited about the future as we look to expand our
customer base in the Video segment. 
"We believe that digital video and multi-media will become the
centerpiece of law enforcement records in the future and TASER is
well positioned to deliver an end-to-end solution that enables new
capabilities that leverage a cloud-based model to allow for rapid,
easy implementation for our customers. In both of our segments, we
will continue to invest in the sales force as we look to grow the
top-line, as well as the infrastructure necessary to deliver
operational excellence to all of our customers, ultimately executing
our strategy to drive profitable growth and value for our
stakeholders while generating significant operating cash flows,"
concluded Smith.  
Other Significant Events:  


 
--  In the first quarter, the Company announced the new TASER X26P Smart
    Weapon and saw significant traction by agencies looking for an
    additional platform to upgrade their current installed base. The
    Company announced a number of significant orders that occurred during
    the first quarter, including:
    
    
    --  New Orleans Police Department (LA) purchased 400 X26P CEWs with
        TASER CAM(TM) HD recorders
    --  New York State Police (NY) purchased 334 X26P CEWs
    --  Sunnyvale Department of Public Safety (CA) purchased 210 X26P
        CEWs
        
        
--  In the first 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 first quarter, which included:
    
    
    --  The Atlanta Police Department (GA) purchased 200 X2 CEWs and TASER
        CAM HD recorders
    --  Buncombe County Sheriff's Office (NC) purchased 68 X2 CEWs with
        5-year TASER Assurance Plan (TAP)
    --  Garfield County Sheriff's Office (CO) purchased 30 X2 CEWs
    --  Lake Havasu Police Department (AZ) purchased 92 X2 CEWs
    --  Lewisville Police Department (TX) purchased 160 X2 CEWs
    --  Richmond County Sheriff's Office (GA) purchased 136 X2 CEWs
    --  Saint Cloud Police Department (MN) purchased 60 X2 CEWs and TASER
        CAM(TM) HD recorders
    --  Tulsa Police Department (OK) purchased 33 X2 CEWs
        
        
--  The Company continued to see new agencies adopting the new TASER AXON
    Flex on-officer camera and EVIDENCE.com management service during the
    first quarter. AXON Flex and EVIDENCE.com deployments included
    significant orders from Albuquerque Police Department, Greensboro
    Police Department, Lake Havasu Police Department, Laramie Police
    Department, Lone Tree Police Department, Modesto Police Department,
    and dozens of smaller agencies.

  
The Company will host its first quarter 2013 earning
s conference call
on Thursday, April 25, 2013 at 11:00 a.m. EDT. 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 31276191.  
Non-GAAP Measures  
To supplement the Company's financial results 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, X26P 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 infrin
ge 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 our
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, 2012 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)                                 
                                                                            
                                                                            
                                               Three Months Ended March 31, 
                                               ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Net sales                                      $  30,433,652  $  25,641,392 
Cost of products sold and services delivered      11,982,648     10,400,133 
                                               -------------  ------------- 
Gross margin                                      18,451,004     15,241,259 
                                                                            
Sales, general and administrative expenses        11,210,900      8,854,022 
Research and development expenses                  2,012,556      2,132,220 
Litigation judgment recovery                               -     (2,200,000)
Gain on write down / disposal of property and                               
 equipment, net                                      (28,960)             - 
                                               -------------  ------------- 
                                                                            
Income from operations                             5,256,508      6,455,017 
                                                                            
Interest and other (expense) income, net             (22,761)         6,994 
                                               -------------  ------------- 
                                                                            
Income before provision for income taxes           5,233,747      6,462,011 
                                                                            
Provision for income taxes                         1,935,926      2,658,193 
                                                                            
                                               -------------  ------------- 
Net income                                     $   3,297,821  $   3,803,818 
                                               =============  ============= 
                                                                            
                                                                            
Income per common and common equivalent shares                              
                                                                            
Basic                                          $        0.06  $        0.07 
Diluted                                                 0.06           0.07 
                                                                            
Weighted average number of common and common                                
 equivalent shares outstanding                                              
                                                                            
Basic                                             52,746,178     55,700,395 
Diluted                                           54,599,980     56,358,066 
                                                                            
                                                                            
                                                                            
                          TASER International, Inc.                         
                              Segment Reporting                             
                                 (Unaudited)                                
                                                                            
                                        Three Months Ended March 31, 2013   
                                      ------------------------------------- 
                                          CEW         Video        Total    
                                      -----------  -----------  ----------- 
                                                                            
Product sales                         $28,002,622  $ 2,180,056  $30,182,678 
Service revenue                                 -      250,974      250,974 
                                      -----------  -----------  ----------- 
Net sales                              28,002,622    2,431,030   30,433,652 
                                      -----------  -----------  ----------- 
                                                                            
Cost of products sold                  10,216,667    1,187,846   11,404,513 
Cost of services delivered                      -      578,135      578,135 
                                      -----------  -----------  ----------- 
Gross margin                           17,785,955      665,049   18,451,004 
                                                                            
Sales, general & administrative        10,102,625    1,108,275   11,210,900 
Research & development                    988,681    1,023,875    2,012,556 
Litigation judgment recovery                    -            -            - 
Gain on write down / disposal of                                            
 property and equipment, net              (28,960)           -      (28,960)
                                                                            
                                      -----------  -----------  ----------- 
Income (loss) from operations         $ 6,723,609  $(1,467,101) $ 5,256,508 
                                      ===========  ===========  =========== 
                                                                            
                                      -----------  -----------  ----------- 
Income from operations, normalized                                          
 (a)                                  $ 6,694,649  $(1,467,101) $ 5,227,548 
                                      ===========  ===========  =========== 
                                                                            
Operating margin %                             24%         -60%          17%
Operating margin %, normalized                 24%         -60%          17%
                                                                            
 
                                        Three Months Ended March 31, 2012   
                                      ------------------------------------- 
    
                                      CEW         Video        Total    
                                      -----------  -----------  ----------- 
                                                                            
Product sales                         $24,757,674  $   772,131  $25,529,805 
Service revenue                                 -      111,587      111,587 
                                      -----------  -----------  ----------- 
Net sales                              24,757,674      883,718   25,641,392 
                                      -----------  -----------  ----------- 
                                                                            
Cost of products sold                   8,611,419      793,848    9,405,267 
Cost of services delivered                      -      994,866      994,866 
                                      -----------  -----------  ----------- 
Gross margin                           16,146,255     (904,996)  15,241,259 
                                                                            
Sales, general & administrative         8,086,497      767,525    8,854,022 
Research & development                    840,352    1,291,868    2,132,220 
Litigation judgment recovery           (2,200,000)           -   (2,200,000)
Gain on write down / disposal of                                            
 property and equipment, net                    
-            -            - 
                                                                            
                                      -----------  -----------  ----------- 
Income (loss) from operations         $ 9,419,406  $(2,964,389) $ 6,455,017 
                                      ===========  ===========  =========== 
                                                                            
                                      -----------  -----------  ----------- 
Income from operations, normalized                                          
 (a)                                  $ 7,219,406  $(2,964,389) $ 4,255,017 
                                      ===========  ===========  =========== 
                                                                            
Operating margin %                             38%        -335%          25%
Operating margin %, normalized                 29%        -335%          17%
                                                                            
                                                                            
(a) Income from operations excluding litigation judgment recovery and gain  
on write down / disposal of property and equipment, net                     
                                                                            
                                                                            
                                                                            
                          TASER International, Inc.                         
                AXONFlex and EVIDENCE.COM Bookings by Quarter               
                                 (Unaudited)                                
                                                                            
                                                                            
                                                                            
                 -----------------------------------------------------------
                  March 31,   Dec. 31,    Sept. 30,    June 30,   March 31, 
                     2013        2012        2012        2012        2012   
                 -----------------------------------------------------------
                                                                            
                                                                            
Bookings         $ 1,387,199 $ 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 are 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 Ended  
                                               ---------------------------- 
                                                 March 31,      March 31,   
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Net income                                     $   3,297,821  $   3,803,818 
  Depreciation and amortization                    1,418,759      1,666,510 
  Interest expense                                     2,397          6,473 
  Provision for income taxes                       1,935,926      2,658,193 
                                               -------------  ------------- 
EBITDA                                         $   6,654,903  $   8,134,994 
                                               =============  ============= 
                                                                            
Adjustments:                                                                
  Stock-based compensation expense                   923,341        758,054 
  Gain on write down/disposal of property,                                  
   equipment and intangibles, net                     66,540         73,226 
  Provision for excess and obsolete inventory         46,477        139,409 
  Litigation judgment recovery                             -     (2,200,000)
  Interest income and other (income) expense          20,364        (13,467)
                                               -------------  ------------- 
Adjusted EBITDA                                $   7,711,625  $   6,892,216 
                                               =============  ============= 
Adjusted EBITDA as a percentage of net sales            25.3%          26.9%
                                                                            
                                                                            
                                                                            
Composition of stock-based compensation:                                    
                                                For the Three Months Ended  
                                               ---------------------------- 
                                                 March 31,      March 31,   
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Cost of products sold                          $      34,432  $      67,144 
Sales, general and administrative expenses           730,504        547,133 
Research and development expenses                    158,405        143,777 
                                               -------------  ------------- 
                                               $     923,341  $     758,054 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
                        Consolidated Balance Sheets                         
                                (Unaudited)                                 
                                                                            
                                                                            
                                                 March 31,    December 31,  
                                                    2013           2012     
                                               -------------  ------------- 
                                   ASSETS                                   
                                                                            
Current Assets:                                                             
  Cash and cash equivalents                    $  38,580,384  $  36,126,791 
  Short-term investments                                   -      1,680,958 
  Accounts and notes receivable, net              16,806,968     18,101,240 
  Inventory                                       11,840,390     10,993,209 
  Prepaid expenses and other current assets        3,912,897      2,754,331 
  Deferred income tax assets, net                  9,395,987      9,395,987 
                                               -------------  ------------- 
    Total current assets                          80,536,626     79,052,516 
                                                                            
  Property and equipment, net                     21,202,659     21,952,201 
  Deferred income tax assets, net                 11,783,179     11,605,812 
  Intangible assets, net                           3,287,628      3,317,169 
  Other assets                                       258,018        308,553 
                                                                            
                                               -------------  ------------- 
Total assets                                   $ 117,068,110  $ 116,236,251 
                                               =============  ============= 
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
                                                                            
Current Liabilities:                                                        
  Accounts payable                             $   4,836,520  $   6,222,904 
  Accrued liabilities                              6,798,624      7,065,085 
  Current portion of deferred revenue              4,764,557      4,287,305 
  Customer deposits                                  385,145        500,018 
  Current portion of capital lease payable            34,470         33,947 
                                               -------------  ------------- 
    Total current liabilities                     16,819,316     18,109,259 
                                                                            
  Deferred revenue, net of current portion         9,017,567      7,835,767 
  Liability for unrecognized tax benefits          2,960,396      2,902,896 
  Long-term portion of capital lease payable          94,468        103,283 
                                                                            
                                               -------------  ------------- 
Total liabilities                                 28,891,747     28,951,205 
                                               -------------  ------------- 
                                                                            
Commitments and Contingencies                                               
                                                                            
Stockholders' Equity:                                                       
  Preferred stock                                          -              - 
  Common stock                                           665            661 
  Additional paid-in capital                     114,623,636    111,661,393 
  Treasury stock                                 (72,553,558)   (67,203,043)
  Retained earnings                               46,180,888     42,883,067 
  Accumulated other comprehensive loss               (75,268)       (57,032)
                                                                            
                                               -------------  ------------- 
Total stockholders' equity                        88,176,363     87,285,046 
                                               -------------  ------------- 
                                                                            
Total liabilities and stockholders' equity     $ 117,068,110  $ 116,236,251 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
         Selected Consolidated Statement of Cash Flows Information          
                                (Unaudited)                                 
                                                                            
                                                For the three Months Ended  
                                               ---------------------------- 
                                                 March 31,      March 31,   
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Net income                                     $   3,297,821  $   3,803,818 
Depreciation and amortization                      1,418,759      1,666,510 
Stock-based compensation expense                     923,341        758,054 
Net cash provided by operating activities          4,519,584      3,662,675 
Net cash provided by (used in) investing                                    
 activities                                        1,227,107       (644,103)
Net cash (used in) provided by financing                                    
 activities                                       (3,319,901)        14,629 
Cash and cash equivalents, end of period          38,580,384     24,349,583 

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