Parametric Sound Corporation Reports Second Quarter Fiscal 2013 Financial Results

Parametric Sound Corporation Reports Second Quarter Fiscal 2013 Financial 
Results 
Reports Progress Across Business Sectors 
SAN DIEGO, CA -- (Marketwired) -- 05/02/13 --  Parametric Sound
Corporation (NASDAQ: PAMT), a leading innovator of audio technology
and solutions, today announced financial results for its second
fiscal quarter ended March 31, 2013. The Company also reported
progress in each of its business sectors: commercial, consumer and
health applications. Discussions with companies interested in
pursuing strategic options beyond licensing are progressing. 
Recent Highlights: 


 
--  Assessingstrategic alternatives - As previously announced, the Company
    has been approached by several industry leaders in key target
    verticals to discuss strategic alternatives for its HyperSound(TM)
    (HSS) technology. It has engaged the investment bank Houlihan Lokey to
    help assess the opportunities. The Company has received a term sheet
    from a leader in one of its target verticals and is now undergoing due
    diligence. The Company has also received and is evaluating strategic
    inquiries from additional parties.
    
    
--  Licensing progress - The Company has received substantial licensing
    proposals for its technology but is first assessing broader strategic
    opportunities.
    
    
--  Progress with commercial pilot projects - The Company grew its
    commercial product pipeline and several pilots are expanding based on
    successful results. Global demand is expected to produce broad-based
    rollouts during the balance of 2013 and 2014.
    
    
--  Bolstered intellectual property with new patent application - The
    Company filed for patent protection on novel new emitter technology
    that it believes will expand the applications for its directional and
    3D audio systems. The new technology allows for performance
    enhancements and costs savings, as well as the ability to more easily
    shape various form factors to fit the requirements of multiple new
    applications for directed audio.
    
    
--  Strategic relationship with manufacturing and distribution partner -
    The Company signed a memorandum of understanding to enter into a
    strategic relationship with Shanghai Industrial Investment Group
    (SIIG) and Aviation Industry Corporation's (AVIC) US trade
    representative, Optek Electronics. The MOU defines four key areas of
    focus that include a licensing agreement, a manufacturing agreement, a
    joint product development agreement, and the establishment of a joint
    venture to address the Chinese market across business sectors.
    
    
--  Collaboration proceeding to investigate health applications - The
    Company's collaboration with the California Hearing & Balance
    Center is progressing as the Company investigates health applications
    of its technology. Preference testing using the Company's HSS sound
    technology side-by-side with traditional audio continues to indicate
    that a broad range of listeners identify improved clarity and
    comprehension of HSS. The Company believes its technology may provide
    benefits by delivering with clarity the frequencies important in
    speech recognition, thus improving the listening experience of those
    with normal hearing, and by providing amplification for those with
    some hearing loss without the need for headphones.

  
Management Commentary: 
"We have received a term sheet and have entered into due diligence
with a market leader in one of our target verticals. We have also
received additional strategic inquiries from other parties," said
Kenneth Potashner, executive chairman. "We have demonstrated solid
operational progress with our pilot commercial projects. We have been
awarded a volume rollout in one of our initial pilots, have been
asked to expand several other pilots, and are also actively
initiating new relationships. We continue to collect data relative to
the benefits that our technology can bring to those with hearing
challenges and are optimistic on the potential for this application." 
Second Quarter Fiscal 2013 Financial Summary: 
Revenue totaled $155,000 during the second quarter of fiscal 2013, as
compared to $60,000 during the same period last year, reflecting an
increase in commercial product sales. Order backlog was $30,000 at
March 31, 2013. Gross profit was $76,000 compared to $33,000 for the
prior year. 
Selling, general and administrative expenses during the second
quarter of fiscal 2013 totaled $1.4 million as compared to $726,000
during the same period last year. Second quarter expense included
non-cash stock based compensation from stock options of $695,000
compared to $284,000 for the prior year. Other selling, general and
administrative costs increased as the Company added executive
management and increased staffing related to its licensing
initiative. The Company also invested in developing commercial
distributors and new customers focusing on larger volume applications
that are expected to contribute to improved cash flow during fiscal
2013. 
Research and development expenses totaled $588,000 during the second
quarter of fiscal 2013 including stock option expense of $95,000.
Research and development expenses during the second quarter of fiscal
2012 were $267,000 including $79,000 of stock option expense. The
increase was primarily the result of adding employees to support
technology development and costs associated with prototypes and
testing for licensing initiatives. 
Net loss for the second quarter of fiscal 2013 was $2.0 million, or
$(0.30) per basic and diluted common share, as compared to a net loss
of $961,000, or $(0.22) per basic and diluted common share for the
same quarter last year. The net loss for the second quarters of
fiscal 2013 and 2012 included $790,000 and $363,000 of non-cash stock
based compensation expense, respectively. 
Cash and cash equivalents totaled $3.8 million at March 31, 2013,
compared to $4.6 million at December 31, 2012. Subsequent to March
31, 2013 the Company received $439,000 in cash from the exercise of
stock purchase warrants. 
Conference Call Information: 
Members of the Company's management team will host a conference call
at 5:00 P.M. ET today to discuss the Company's financial results.
Investors and interested parties may participate in the call by
dialing (877) 303-9855 and referring to Conference ID: 34032818. It
is suggested that you dial into the conference center approximately
10 minutes prior to the scheduled start time to ensure that all
participants are on line at the start of the call. The conference
call is also being webcast and is available via the investor
relations section of the Company's website, www.parametricsound.com.
A replay of the webcast will be archived on the Company's website for
60 days. 
About Parametric Sound Corporation 
Parametric Sound Corporation is a pioneering innovator of directed
audio solutions. With a substantial body of intellectual property,
Parametric Sound is the foremost authority in the application of
acoustic technology to beam sound to target a specific listening area
without the ambient noise of traditional speakers. Distinct from
surround sound, HyperSound(TM) immerses listeners in a robust 3D
audio experience from just two speakers. The Company's disruptive
technology is being marketed to three global market sectors: Consumer
Markets -- for PCs, gaming, TVs, home theater and handhelds,
Commercia
l Markets -- for digital signage, kiosks and retail stores,
and Health Care -- for an out-of-ear solution being developed for the
hearing impaired. For more information, visit
www.parametricsound.com.  
Cautionary note on forward-looking statements 
This press release includes forward-looking information and
statements. Except for historical information contained in this
release, statements in this release may constitute forward-looking
statements regarding assumptions, projections, expectations, targets,
intentions or beliefs about future events that are based on
management's belief, as well as assumptions made by, and information
currently available to, management. While the Company believes that
its expectations are based upon reasonable assumptions, there can be
no assurances that its goals and strategy will be realized. Numerous
factors, including risks and uncertainties, may affect actual results
and may cause results to differ materially from those expressed in
forward-looking statements made by the Company or on its behalf. Some
of these factors include the substantial uncertainties inherent in
evaluating, pursuing and finalizing strategic discussions including,
but not limited to, licensing, mergers, joint ventures, spin-offs or
other corporate transactions, acceptance of existing and future
products regardless of initial pilot successes or positive end-user
feedback, the difficulty of commercializing and protecting new
technology such as the Company's new emitter technology, the impact
of competitive products and pricing, general business and economic
conditions, and other factors detailed in the Company's Annual Report
on Form 10-K and other periodic reports filed with the SEC. The
Company specifically disclaims any obligation to update or revise any
forward-looking statement whether as a result of new information,
future developments or otherwise.  


 
                                                                            
                        Parametric Sound Corporation                        
                    Condensed Consolidated Balance Sheets                   
                   (000's omitted except per share amount)                  
                                 (unaudited)                                
                                                   March 31,   September 30,
                                                      2013          2012    
                                                       $             $      
ASSETS                                                                      
  Current                                                                   
    Cash                                                 3,823         5,528
    Accounts receivable                                    107            39
    Inventories, net                                       399           443
    Prepaid expenses and other current assets              141            63
                                                 ------------- -------------
  Total current assets                                   4,470         6,073
  Property, equipment and tooling, net                     286           177
  Intangible assets, net                                 1,351         1,315
                                                 ------------- -------------
  Total assets                                           6,107         7,565
                                                 ============= =============
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
  Current                                                                   
    Accounts payable                                       327           173
    Accrued liabilities                                    105           140
    Capital lease obligation - current                      37             -
                                                 ------------- -------------
  Total current liabilities                                469           313
  Long-term capital lease obligation                       114             -
                                                 ------------- -------------
  Total liabilities                                        583           313
                                                 ------------- -------------
  Stockholders' equity                                   5,524         7,252
                                                 ------------- -------------
  Total liabilities and stockholders' equity             6,107         7,565
                                                 ============= =============
                                                                            
                                                                            
                                                                            
                        Parametric Sound Corporation                        
               Condensed Consolidated Statements of Operations              
                   (000's omitted except per share amount)                  
                                 (unaudited)                                
                                                                            
                                 For the three months    For the six months 
                                    ended March 31,       ended March 31,   
                                    2013       2012       2013       2012   
                                     $          $           $          $    
Revenues                               155         60         264        124
Cost of revenues                        79         27         133         52
                                 ---------  ---------  ---------- ----------
  Gross profit                          76         33         131         72
Operating expenses: (i)                                                     
  Selling, general and                                                      
   administrative                    1,444        726       2,360      1,065
  Research and development             588        267         980        498
                                 ---------  ---------  ---------- ----------
Total operating expenses             2,032        993       3,340      1,563
                                 ---------  ---------  ---------- ----------
Loss from operations                (1,956)      (960)    (3,209)    (1,491)
Other income (expenses)                  -         (1)          2        (2)
                                 ---------  ---------  ---------- ----------
Net loss                            (1,956)      (961)    (3,207)    (1,493)
                                 =========  =========  ========== ==========
Loss per basic and diluted                                                  
 common share                        (0.30)     (0.22)     (0.50)     (0.36)
                                 =========  =========  ========== ==========
                                                                            
Weighted average shares used to                                             
 compute net loss per basic and                                             
 diluted common share                6,435      4
,386       6,422      4,148
                                 =========  =========  ========== ==========
                                                                            
(i) includes share-based compensation expense as follows:                   
                                                                            
                                 For the three months   For the three months
                                    ended March 31,       ended March 31,   
                                    2013       2012       2013       2012   
Selling, general and                                                        
 administrative                        695        284         886        437
Research and development                95         79         158        123
                                 ---------  ---------  ---------- ----------
  Total share-based compensation                                            
   expense                             790        363       1,044        560
                                 =========  =========  ========== ==========

  
CONTACT:
Tracy Neumann
888-HSS-2150, Ext. 509
tneumann@parametricsound.com 
INVESTOR RELATIONS CONTACT:
Dave Mossberg
Three Part Advisors, LLC
(817) 310-0051 
 
 
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