TASER Reports Record Quarterly Revenue of $35.2 Million

TASER Reports Record Quarterly Revenue of $35.2 Million 
AXON Camera and EVIDENCE.com Bookings Increase 186% Sequentially to
$5.8 Million 
SCOTTSDALE, AZ -- (Marketwired) -- 10/30/13 --  TASER International,
Inc. (NASDAQ: TASR), today announced financial results for the third
quarter ended September 30, 2013. 
Financial Summary: 


 
--  Net sales were $35.2 million in the quarter, an increase of $6.4
    million, or 22.3%, compared to third quarter 2012 sales of $28.8
    million. Upgrades by numerous law enforcement agencies to the new
    TASER(R) X26P(TM)  and TASER X2(TM) Smart Weapons drove the
    increase. AXON(R) cameras, EVIDENCE.com and TASER(R) CAM(TM)
    HD recorders also contributed to the net sales increase in the third
    quarter.
    
    
--  TASER Weapons segment revenues grew $4.5 million year-over-year, or
    16.8%, to $31.6 million in the third quarter of 2013.
    
    
--  EVIDENCE.com and Video product revenues increased by $1.9 million, or
    111.5%, to $3.6 million in the third quarter of 2013.
    
    
--  Gross margin in the third quarter of 2013 was 62.8%, compared to 58.4%
    in the same period last year. The improvement in gross margin in the
    third quarter of 2013 was driven by the 22.3% increase in net sales
    which resulted in better leverage of overhead expense, increased sales
    prices and lower trade-in credit values. Gross margin continues to
    benefit from the Company's decision to utilize third-party cloud
    services in its Video segment. Gross margin also benefited from the
    full depreciation of the capitalized EVIDENCE.com software development
    costs.
    
    
--  Sales, general and administrative (SG&A) expenses of $12.8 million
    in the third quarter of 2013 increased 33.9%, from $9.5 million in the
    third quarter of 2012. As a percentage of revenue, SG&A increased
    to 36.3% in the third quarter 2013 compared to 33.2% in the prior
    year. The increase to SG&A was primarily driven by professional,
    accounting and legal fees and litigation expenses which increased $2.2
    million compared to the prior year primarily due to expenses relating
    to the defense of product and commercial litigation. The Company
    expects expenses relating to the defense of product and commer
cial
    litigation to trend downward in the second half of 2014. Also
    contributing to the increase in SG&A, personnel expenses increased
    $0.7 million year-over-year due to the Company's strategic effort to
    enhance its customer-facing capabilities in roles such as account
    management and telesales, in addition to some incremental
    administrative functions. Finally, we incurred higher selling and
    marketing expenses of approximately $0.4 million to support our
    initiatives internationally and in the video market.
    
    
--  Research and development (R&D) expenses of $2.4 million for the
    third quarter of 2013 increased $0.5 million, or 22.9%, when compared
    to the third quarter of 2012 primarily driven by additional personnel
    expense related to EVIDENCE.com and Video product segment development
    initiatives. The Company expects to see increased expenses in R&D
    through 2014 as EVIDENCE.com scales and we begin to expand our cloud
    offerings into adjacent technologies in law enforcement.
    
    
--  Income from operations increased $1.6 million, or 30.4%, to $6.9
    million in the third quarter of 2013 compared to the third quarter of
    2012.
    
    
--  Adjusted EBITDA was $9.0 million for the third quarter of 2013, an
    increase from Adjusted EBITDA of $8.0 million in the third quarter of
    2012. The increase is due to increased sales and margins.
    
    
--  Net income for the third quarter of 2013 was $5.1 million, or $0.10
    per basic and diluted share.
    
    
--  In the third quarter of 2013, the Company generated $10.9 million in
    cash from operating activities. Cash, cash equivalents and investments
    were $48.3 million at the end of the third quarter of 2013, up from
    $37.8 million at December 31, 2012.

  
"These are exciting times for us as our long-term business strategy is
now intersecting several trends which we believe have hit a tipping
point, namely officer-worn video and cloud computing," said Rick
Smith, CEO of TASER International. "Last week, the Police Executive
Research Forum (PERF), one of the most respected thought leaders in
public safety, held a session dedicated to the topic of officer-worn
video where leading chiefs indicated they plan to implement body worn
video in the near future. Similarly, the International Association of
Chiefs of Police reports that over half of police chiefs surveyed
indicate they are deploying or actively considering cloud solutions.
These trends were underscored by the significant growth in bookings
for our AXON cameras and EVIDENCE.com this quarter." 
"The last few months have been full of momentous events for the
Company including the launch of the AXON body(TM) camera, the
Familiar team acquisition, the announcement of the EVIDENCE Mobile
application all culminating in record quarterly revenues," said Rick
Smith, CEO of TASER International, Inc. "It is a truly exciting time
to be a part of TASER. We continue to deliver solid growth within the
weapons segment, while generating significant traction in
EVIDENCE.com. Sales bookings for the AXON flex(TM) and AXON body(TM)
on-officer cameras and the EVIDENCE.com service more than quadrupled
during the third quarter of 2013 compared to the same quarter in the
prior year and nearly tripled compared to the second quarter of 2013.
We also honed our strategy to further accelerate market adoption of
EVIDENCE.com with our new, tiered pricing structure, which better
allows us to tailor our services across various market segments.
Given the growing momentum, we will continue to invest in
EVIDENCE.com to strengthen our sales force and infrastructure,
capture market share, and investigate adjacent opportunities to drive
value for our stakeholders," concluded Smith. 
Other Significant Events: 


 
--  The Company announced a number of significant orders for its Smart
    Weapons, the new X26P and the X2 that occurred during the third
    quarter, including:
    
    
    --  Chesterfield County Police Department (VA) purchased 80 X2s
    --  Cumberland County Sheriff's Office (NC) purchased 175 X26Ps
    --  DeKalb County Police Department (GA) purchased 150 X26Ps
    --  Fayetteville Police Department (NC) purchased 200 X2s
    --  Forsyth County Sheriff's Office (NC) purchased 100 X2s with TASER
        CAM HD recorders
    --  Houston Police Department (TX) purchased 2,188 X2s
    --  Jacksonville Sheriff's Office (FL) purchased 80 X26Ps
    --  Jefferson Parish Sheriff's Office (LA) purchased 700 X26Ps and
        TASER CAM HD recorders
    --  Las Vegas Metro Police Department (NV) purchased 174 X26Ps
    --  Manatee County Sheriff's Office (FL) purchased 100 X26Ps
    --  Margate Police Department (FL) purchased 103 X2s
    --  Maricopa County Sheriff's Office (AZ) purchased 577 X2s and TASER
        CAM HD recorders
    --  Milwaukee Police Department (WI) purchased 130 X2s
    --  Rhode Island State Police (RI) purchased 170 X26Ps
    --  Riviera Beach Police Department (FL) purchased 90 X2s
    --  U.S. Forest Service purchased 400 X26Ps
    --  Two additional U.S. law enforcement agencies purchased a combined
        837 X2s
        
        
--  The Company continued to see new agenci
es adopt the AXON flex and new
    AXON body on-officer cameras and EVIDENCE.com management service
    during the third quarter. AXON and EVIDENCE.com deployments included
    significant orders from:
    
    
    --  Albuquerque Police Department (NM)
    --  Brookfield Police Department (WI)
    --  Dallas Fort Worth International Airport Department of Public
        Safety (TX)
    --  Fort Worth Police Department (TX)
    --  Greensboro Police Department (NC)
    --  Spokane Police Department (WA)
    --  Surprise Police Department (AZ)
    --  Topeka Police Department (KS)
        
        
--  Subsequent to the close of the third quarter, the Company announced
    the acquisition of Familiar, Inc. as a move to enhance the R&D
    efforts around EVIDENCE.com and to expand our mobile offerings into
    additional adjacent markets within public safety.
    
    
--  The Company will continue to take questions relating to the third
    quarter results via social media. TASER management will entertain
    questions during the call asked via Twitter, in addition to questions
    from those logged into the webcast. Individuals may submit questions
    via Twitter using hashtag #TASR_Earnings to the @TASER_IR handle.
    TASER management regrets that due to time considerations, not all
    questions may be answered during the call. For those individuals who
    do not have access to Twitter, all tweets and related content are
    streamed directly to http://investor.taser.com.
    
    
--  The Company will update its investor relations presentation and fact
    sheet and post them to http://investor.taser.com within the next two
    weeks with the third quarter results. Archived presentations from
    previous quarters may also be found on the website.

  
The Company will host its third quarter 2013 earnings conference call
on Wednesday, October 30, 2013 at 11:00 am ET. To join the live audio
presentation, please dial toll free at 877-303-9126, or for
international callers, please dial 253-237-1156. The pass code is
55003772. 
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 interest
expense, income taxes and depreciation and amortization. Adjusted
EBITDA as presented herein is defined as EBITDA 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
17,000 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 115,000 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 260,000 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, AXON body, TASER CAM HD, X26, X26P and X2 are trademarks of
TASER International, Inc. 
Note to Investors 
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 expect to see increased R&D expenses in 2014; and
that we will continue to invest in EVIDENCE.com. 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; our dependenc
e on sales of our TASER X26, X26P and X2
CEWs; the acceptance of our EVIDENCE.com software model; our ability
to design, introduce and sell new products; delays in development
schedules; rapid technological change and competition; product
defects; breach of our security measures resulting in unauthorized
access to customer data; outages and disruptions relating to our
EVIDENCE.com service; budgetary and political constraints of
prospects and customers; the length of our sales cycle and our
ability to realize benefits from our marketing and selling efforts;
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; the outcome of pending or future litigation; 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; 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; the adverse effects that could
result from our products being classified as firearms by the United
States Bureau of Alcohol and Firearms; our compliance with
regulations governing the environment, including but not limited to,
regulations within the European Union; new regulations relating to
conflict minerals; our dependence on third party suppliers for key
components of our products; component shortages, including our
dependence on foreign suppliers for key components; rising costs of
raw materials and transportation relating to petroleum prices; our
ability to manage our growth; our ability to increase manufacturing
production to meet demand; establishment and expansion of our direct
and indirect distribution channels; our ability to pursue sales
directly with customers; risks relating to acquisitions and joint
ventures; catastrophic events; 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. 
Please visit http://investor.taser.com, http://blog.taser.com,
www.twitter.com/taser_ir, www.twitter.com/officialtaser and
http://www.facebook.com/TASERInternational where TASER discloses
information from time to time about the company, its financial
information, and its business. 
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       Nine Months Ended    
                                September 30,            September 30,      
                           -----------------------  ----------------------- 
                               2013        2012         2013        2012    
                           ----------- -----------  ----------- ----------- 
                                                                            
Net sales                  $35,196,822 $28,772,956  $97,806,271 $82,636,791 
Cost of products sold and                                                   
 services delivered         13,100,817  11,969,944   37,516,899  34,090,148 
                           ----------- -----------  ----------- ----------- 
Gross margin                22,096,005  16,803,012   60,289,372  48,546,643 
                                                                            
Sales, general and                                                          
 administrative expenses    12,775,980   9,539,996   34,898,005  26,798,629 
Research and development                                                    
 expenses                    2,439,812   1,985,701    6,444,432   6,156,751 
Litigation judgment                                                         
 recovery                            -           -            -  (2,200,000)
                           ----------- -----------  ----------- ----------- 
                                                                            
Income from operations       6,880,213   5,277,315   18,946,935  17,791,263 
                                                                            
Interest and other income                                                   
 (expense), net                 34,891      11,418       30,807      25,545 
                           ----------- -----------  ----------- ----------- 
                                                                            
Income before provision                                                     
 for income taxes            6,915,104   5,288,733   18,977,742  17,816,808 
                                                                            
Provision for income taxes   1,801,512   1,611,861    6,108,795   6,893,872 
                                                                            
                           ----------- -----------  ----------- ----------- 
Net income                 $ 5,113,592 $ 3,676,872  $12,868,947 $10,922,936 
                           =========== ===========  =========== =========== 
                                                                            
                                                                            
Income per common and                                                       
 common equivalent shares                                                   
                                                                            
Basic                      $      0.10 $      0.07  $      0.25 $      0.19 
Diluted                    $      0.10        0.07         0.24        0.19 
                                                                            
Weighted average number of                                                  
 common and common                                                          
 equivalent shares                                      
                    
 outstanding                                                                
                                                                            
Basic                       51,341,785  52,509,068   51,727,197  57,997,341 
Diluted                     53,320,918  53,106,325   53,643,803  58,482,833 
                                                                            
                          TASER International, Inc.                         
                              Segment Reporting                             
                                 (Unaudited)                                
                                                                            
                                   Three Months Ended September 30, 2013    
                               -------------------------------------------- 
                                                EVIDENCE.com                
                                TASER Weapons      & Video         Total    
                               --------------  --------------  ------------ 
                                                                            
Product sales                  $   31,626,484  $    3,103,781  $ 34,730,265 
Service revenue                             -         466,557       466,557 
                               --------------  --------------  ------------ 
Net sales                          31,626,484       3,570,338    35,196,822 
                               --------------  --------------  ------------ 
                                                                            
Cost of products sold              10,906,999       1,896,691    12,803,690 
Cost of services delivered                  -         297,127       297,127 
                               --------------  --------------  ------------ 
Gross margin                       20,719,485       1,376,520    22,096,005 
                                                                            
Sales, general &                                                            
 administrative                    11,130,971       1,645,009    12,775,980 
Research & development              1,160,400       1,279,412     2,439,812 
                                                                            
                               --------------  --------------  ------------ 
Income (loss) from operations  $    8,428,114  $   (1,547,901) $  6,880,213 
                               ==============  ==============  ============ 
                                                                            
                                                                            
Operating margin %                         27%            -43%           20%
                                                                            
                                                                            
 
                                                                           
                                  Three Months Ended September 30, 2012    
                              -------------------------------------------- 
                                               EVIDENCE.com                
                               TASER Weapons      & Video         Total    
                              --------------  --------------  ------------ 
                                                                           
Product sales                 $   27,085,180  $    1,528,347  $ 28,613,527 
Service revenue                            -         159,429       159,429 
                              --------------  --------------  ------------ 
Net sales                         27,085,180       1,687,776    28,772,956 
                              --------------  --------------  ------------ 
                                                                           
Cost of products sold              9,673,370       1,181,906    10,855,276 
Cost of services delivered                 -       1,114,668     1,114,668 
                              --------------  --------------  ------------ 
Gross margin                      17,411,810        (608,798)   16,803,012 
                                                                           
Sales, general &                                                           
 administrative                    8,618,250         921,746     9,539,996 
Research & development             1,043,607         942,094     1,985,701 
                                                                           
                              --------------  --------------  ------------ 
Income (loss) from operations $    7,749,953  $   (2,472,638) $  5,277,315 
                              ==============  ==============  ============ 
                                                                           
                                                                           
Operating margin %                        29%           -147%           18%
                                                                           
                                                                           
                                                                            
                                   Nine Months Ended September 30, 2013     
                               -------------------------------------------- 
                                                EVIDENCE.com                
                                TASER Weapons      & Video         Total    
                               --------------  --------------  ------------ 
                                                                            
Product sales                  $   89,901,959  $    6,853,388  $ 96,755,347 
Service revenue                             -       1,050,924     1,050,924 
                               --------------  --------------  ------------ 
Net sales                          89,901,959       7,904,312    97,806,271 
                               --------------  --------------  ------------ 
                                                                            
Cost of products sold              31,534,576       4,440,236    35,974,812 
Cost of services delivered                  -       1,542,087     1,542,087 
                               --------------  --------------  ------------ 
Gross margin                       58,367,383       1,921,989    60,289,372 
                                                                            
Sales, general &                                                            
 administrative                    30,622,109       4,275,896    34,898,005 
Research & development              3,126,589       3,317,843     6,444,432 
Litigation judgment recovery                -               -             - 
                                                                            
                               --------------  --------------  ------------ 
Income (loss) from operations  $   24,618,685  $   (5,671,750) $ 18,946,935 
                               ==============  ==============  ============ 
                                                                            
                                                                            
Operating margin %                         27%            -72%           19%
                                                                            
                                                                            
 
                                                                           
                                  Nine Months Ended September 30, 2012     
                              -------------------------------------------- 
                                               EVIDENCE.com                
                               TASER Weapons      & Video         Total    
                              --------------  --------------  ------------ 
                                                                           
Product sales                 $   78,774,581  $    3,464,606  $ 82,239,187 
Service revenue                            -         397,604       397,604 
                              --------------  --------------  ------------ 
Net sales                         78,774,581       3,862,210    82,636,791 
                              --------------  --------------  ------------ 
                                                                           
Cost of products sold             28,068,676       2,712,678    30,781,354 
Cost of services delivered                 -       3,308,794     3,308,794 
                              --------------  --------------  ------------ 
Gross margin                      50,705,905      (2,159,262)   48,546,643 
                                                                           
Sales, general &                                                           
 administrative                   2
4,373,401       2,425,228    26,798,629 
Research & development             2,806,043       3,350,708     6,156,751 
Litigation judgment recovery      (2,200,000)              -    (2,200,000)
                                                                           
                              --------------  --------------  ------------ 
Income (loss) from operations $   25,726,461  $   (7,935,198) $ 17,791,263 
                              ==============  ==============  ============ 
                                                                           
                                                                           
Operating margin %                        33%           -205%           22%
                                                                           
                                                                           
                                                                            
                                                                            
                          TASER International, Inc.                         
                AXONFlex and EVIDENCE.COM Bookings by Quarter               
                                 (Unaudited)                                
                                                                            
                                                                            
                                  For the Quarter ended,                    
             ---------------------------------------------------------------
              Sept. 30,    June 30,     March 31,    Dec. 31,     Sept. 30, 
                 2013         2013         2013         2012         2012   
             -----------  -----------  -----------  -----------  -----------
                                                                            
                                                                            
Bookings     $ 5,846,547  $ 2,045,938  $ 1,387,199  $ 1,670,813  $ 1,318,107

 
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.  Due to municipal government funding rules, certain of
the future year amounts included in bookings are subject to budget
appropriation.  Although TASER has entered into contracts for the
delivery of products and services in the future and anticipates the
contracts will be completed, if agencies do not appropriate money in
future year budgets, revenue associated with these bookings will not
ultimately be recognized, resulting in a future reduction to
bookings.  
For more information relative to our revenue recognition policies,
please reference our SEC filings.  


 
                                                                           
                                                                           
                      TASER International, Inc.                            
                        Unit Sales Statistics                              
                             (Unaudited)                                   
                                                                           
                             Three Months Ended September 30,              
               ----------------------------------------------------------- 
                                                                Percent    
                     2013            2012       Unit Change      Change    
               --------------- --------------- ------------  ------------- 
                                                                           
X26                      7,195           8,312       (1,117)         -13.4%
X26P                     7,327               -        7,327          100.0%
X2                       8,469           7,290        1,179           16.2%
M26                        502           1,617       (1,115)         -69.0%
X3                           -              36          (36)        -100.0%
C2                       1,544           2,832       (1,288)         -45.5%
TASER Cam                3,343           1,957        1,386           70.8%
Cartridges             375,363         434,167      (58,804)         -13.5%
AXON flex                1,217           1,263          (46)          -3.6%
AXON body                  774               -          774          100.0%
StrikeLight              1,322               -        1,322          100.0%
                                                                           
                                                                           
 
                                                                            
                                                                            
                       TASER International, Inc.                            
                         Unit Sales Statistics                              
                              (Unaudited)                                   
                                                                            
                             Nine Months Ended September 30,                
              ------------------------------------------------------------- 
                                                                 Percent    
                    2013             2012        Unit Change      Change    
              --------------- ------------------ -----------  ------------- 
                                                                            
X26                    24,296             31,951      (7,655)         -24.0%
X26P                   17,663                  -      17,663          100.0%
X2                     20,431             19,406       1,025            5.3%
M26                     1,638              3,258      (1,620)         -49.7%
X3                        271                 69         202          292.8%
C2                      5,869              8,594      (2,725)         -31.7%
TASER Cam               8,349              5,446       2,903           53.3%
Cartridges          1,153,825          1,167,253     (13,428)          -1.2%
AXON flex               3,580              2,018       1,562           77.4%
AXON body                 774                  -         774          100.0%
StrikeLight             1,322                  -       1,322          100.0%
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
           Reconciliation of GAAP to Non-GAAP Financial Measures            
                                (Unaudited)                                 
                                                                            
                     For the Three Months Ended  For the Nine Months Ended  
                    --------------------------- --------------------------- 
                    September 30, September 30, September 30, September 30, 
                         2013          2012          2013          2012     
                    ------------- ------------- ------------- ------------- 
                                                                            
Net income          $   5,113,592 $   3,
676,872 $  12,868,947 $  10,922,936 
 Depreciation and                                                           
  amortization          1,088,071     1,718,546     4,036,337     5,113,989 
 Interest expense           2,795           405         8,326         4,479 
 Provision for                                                              
  income taxes          1,801,512     1,611,861     6,108,795     6,893,872 
                    ------------- ------------- ------------- ------------- 
EBITDA              $   8,005,970 $   7,007,684 $  23,022,405 $  22,935,276 
                    ============= ============= ============= ============= 
                                                                            
Adjustments:                                                                
 Stock-based                                                                
  compensation                                                              
  expense                 962,994       849,388     2,905,635     2,197,050 
 Loss on write                                                              
  down/disposal of                                                          
  property,                                                                 
  equipment and                                                             
  intangibles, net          1,787       126,963        83,820       305,138 
 Provision for                                                              
  excess and                                                                
  obsolete                                                                  
  inventory               110,211        39,351       279,184       236,819 
 Litigation                                                                 
  judgment recovery             -             -             -    (2,200,000)
 Interest income                                                            
  and other                                                                 
  (income) expense        (37,686)      (11,823)      (39,133)      (30,024)
                    ------------- ------------- ------------- ------------- 
Adjusted EBITDA     $   9,043,276 $   8,011,563 $  26,251,911 $  23,444,259 
                    ============= ============= ============= ============= 
Adjusted EBITDA as                                                          
 a percentage of                                                            
 net sales                   25.7%         27.8%         26.8%         28.4%
                                                                            
                                                                            
                                                                            
Composition of                                                              
 stock-based                                                                
 compensation:                                                              
                     For the Three Months Ended   For the Nine Months Ended 
                    --------------------------- --------------------------- 
                    September 30, September 30, September 30, September 30, 
                         2013          2012          2013          2012     
                    ------------- ------------- ------------- ------------- 
                                                                            
Cost of products                                                            
 sold               $      49,632 $      38,085 $     133,500 $     133,977 
Sales, general and                                                          
 administrative                                                             
 expenses                 735,433       657,870     2,292,672     1,631,234 
Research and                                                                
 development                                                                
 expenses                 177,929       153,433       479,463       431,839 
                    ------------- ------------- ------------- ------------- 
                    $     962,994 $     849,388 $   2,905,635 $   2,197,050 
                    ============= ============= ============= ============= 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
                        Consolidated Balance Sheets                         
                                (Unaudited)                                 
                                                                            
                                               September 30,   December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                                   ASSETS                                   
                                                                            
Current Assets:                                                             
  Cash and cash equivalents                    $  35,005,494  $  36,126,791 
  Short-term investments                           8,751,409      1,680,958 
  Accounts and notes receivable, net              20,093,295     18,101,240 
  Inventory                                       12,289,360     10,993,209 
  Prepaid expenses and other current assets        4,859,631      2,754,331 
  Deferred income tax assets, net                  9,450,523      9,395,987 
                                               -------------  ------------- 
    Total current assets                          90,449,712     79,052,516 
                                                                            
  Property and equipment, net                     19,347,416     21,952,201 
  Deferred income tax assets, net                 10,397,208     11,605,812 
  Intangible assets, net                           3,360,355      3,317,169 
  Long-term investments                            4,580,049              - 
  Other assets                                       357,512        308,553 
                                                                            
                                               -------------  ------------- 
Total assets                                   $ 128,492,252  $ 116,236,251 
                                               =============  ============= 
                                                                            
                    LIABILITIES AND STOCKHOLDERS' EQUITY                    
                                                                            
Current Liabilities:                                                        
  Accounts payable                             $   5,112,997  $   6,222,904 
  Accrued liabilities                              8,180,852      7,065,085 
  Current portion of deferred revenue              6,317,899      4,287,305 
  Customer deposits                                1,077,622        500,018 
  Current portion of capital lease payable            35,545         33,947 
                                               =============  ============= 
    Total current liabilities                     20,724,915     18,109,259 
                                                                            
  Deferred revenue, net of current portion        12,302,510      7,835,767 
  Liability for unrecognized tax benefits          3,074,447      2,902,896 
  Other long-term liabilities                        169,116              - 
  Long-term portion of capital lease payable          76,423        103,283 
                                          
                                  
                                               -------------  ------------- 
Total liabilities                                 36,347,411     28,951,205 
                                               -------------  ------------- 
                                                                            
                                                                            
                                                                            
Stockholders' Equity:                                                       
  Preferred stock                                          -              - 
  Common stock                                           683            661 
  Additional paid-in capital                     128,623,101    111,661,393 
  Treasury stock                                 (92,202,810)   (67,203,043)
  Retained earnings                               55,752,014     42,883,067 
  Accumulated other comprehensive loss               (28,147)       (57,032)
                                                                            
                                               -------------  ------------- 
Total stockholders' equity                        92,144,841     87,285,046 
                                               -------------  ------------- 
                                                                            
Total liabilities and stockholders' equity     $ 128,492,252  $ 116,236,251 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                                                                            
                         TASER International, Inc.                          
         Selected Consolidated Statement of Cash Flows Information          
                                (Unaudited)                                 
                                                                            
                  For the Three Months Ended     For the Nine Months Ended  
                 ----------------------------  ---------------------------- 
                 September 30,  September 30,  September 30,  September 30, 
                      2013           2012           2013           2012     
                 -------------  -------------  -------------  ------------- 
                                                                            
Net income       $   5,113,592  $   3,676,872  $  12,868,947  $  10,922,936 
Depreciation and                                                            
 amortization        1,088,071      1,718,546      4,036,337      5,113,989 
Stock-based                                                                 
 compensation                                                               
 expense               962,994        849,388      2,905,635      2,197,050 
Net cash                                                                    
 provided by                                                                
 operating                                                                  
 activities         10,863,245      9,873,657     23,086,514     23,258,163 
Net cash                                                                    
 provided by                                                                
 (used in)                                                                  
 investing                                                                  
 activities         (1,232,151)     1,644,865    (13,236,410)       676,690 
Net cash                                                                    
 provided by                                                                
 (used in)                                                                  
 financing                                                                  
 activities          6,302,552     (3,523,811)   (10,968,934)   (19,265,477)
Cash and cash                                                               
 equivalents,                                                               
 end of period      35,005,494     25,965,711     35,005,494     25,965,711 

  
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2445051 
CONTACT: 
Dan Behrendt 
Chief Financial Officer
TASER International, Inc.
(480) 905-2000 
 
 
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