Delaware | 001-16391 | 86-0741227 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
17800 N. 85th St. Scottsdale, Arizona |
85255 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1
|
Text of press Release dated July 28, 2011 titled TASER International Reports Second Quarter Results. |
-2-
Dated: July 28, 2011 | TASER International, Inc. |
|||
By: | /s/ DANIEL BEHRENDT | |||
Daniel Behrendt | ||||
Chief Financial Officer | ||||
-3-
Exhibit | ||||
Number | Description of Document | |||
99.1 | Text of press Release dated July 28, 2011 titled TASER International Reports Second Quarter Results. |
CONTACT: | Dan Behrendt Chief Financial Officer TASER International, Inc. (480) 905-2000 |
| Net sales were $21.2 million
in the quarter, an increase of $2.1 million or 11%
compared to second quarter 2010 sales of $19.1 million. The increase in net sales was
driven by stronger international sales and the launch of the
TASER®X2
electronic control device (ECD), which
generated $1.4 million of sales during the quarter. |
| Gross margin improved to 57.7% in the second quarter of 2011, compared to 50.4% in the
same period last year. Evidence.com data center operating and software maintenance costs
are included in cost of sales, which reduced gross margin as a percent of sales by 6.0%
(from 63.8% before data center operations and software maintenance to 57.7% net).
Excluding these costs, the improvement in gross margin on the base business was driven by a
more favorable higher margin product and sales segment mix, more efficient operations with
reductions in rework and scrap expense, elimination of restructuring charges incurred in
the prior year and an overall increased leverage on higher sales. |
| Sales, general and administrative (SG&A) expenses of $9.1 million in the second quarter
of 2011 decreased 9.2%, or $0.9 million, compared to the second quarter of 2010, driven by
one-time restructuring charges and a litigation settlement expense in the prior year. |
| Research and development (R&D) expenses decreased $0.3 million to $2.8 million in the
second quarter of 2011, an 8.6% decrease from the same period last year. This reduction
was partially attributable to costs in the prior year for the AXON product, as well as the
impact of cost-reduction measures. Additionally, the launch of Evidence.com resulted in
the Company including $1.2 million of expenses in cost of products sold for ongoing
delivery and maintenance of the product, some of which were previously included in R&D in
the second quarter of 2010. |
| The Company recorded a $3.3 million charge in the second quarter of 2011 for an adverse
jury verdict received in the case of Turner v. TASER International, Inc., et al. The court
has not yet entered an order of judgment and, based on the court excluding and
failing to instruct the jury to consider significant evidence that the Company believes
demonstrates contributory negligence on the part of the plaintiff, the Company has moved for
judgment in its favor notwithstanding the verdict and will pursue all appropriate legal
channels including filing an appeal in this matter at the appropriate time should an adverse
judgment be subsequently entered. For more information please go to www.taser.com/rule50. |
| The Company recorded a $1.4 million asset impairment charge in the second quarter
following a decision to abandon operations of its Protector product offering. Additionally,
a loss of $0.8 million from the write down of Property and Equipment was incurred following
the decision to dispose of surplus equipment for Evidence.com operations. |
| Adjusted operating income, which excludes the impact of stock-based compensation
charges, depreciation and amortization, litigation judgment expense, asset impairment
charges and loss on write down / disposal of Property and Equipment was $3.3 million for
the second quarter of 2011, a $4.2 million, or 453% increase from an adjusted operating
loss of $0.9 million in the second quarter of 2010. GAAP loss from operations was $5.1
million for the quarter, compared to a loss from operations of $3.4 million for the second
quarter of 2010. |
| Net loss for the second quarter of 2011 was $2.3 million or $0.04 per share on a basic
and diluted basis. |
| The Company generated $4.9 million in cash from operating activities in the second
quarter of 2011 and also completed a $12.5 million repurchase of approximately 2.9 million
shares of its common stock. Cash, cash equivalents and investments were $38.5 million at
the end of the second quarter of 2011 and the Company has no debt recorded on its balance
sheet. |
| On July 27, 2011 the Board of Directors of TASER International, Inc. adopted a
resolution approving a stock buy-back program authorizing the Company to purchase up to
$20.0 million of the Companys common stock subject to stock market conditions and
corporate considerations. The new $20 million buy-back is in addition to the $12.5
million buy-back executed in 2008 and the $12.5 million buy-back already executed in 2011. |
| The Company began shipping the new X2 for revenue
in June. The X2 is the
newest upgrade in the Companys line of ECDs, and serves as a
more cost effective alternative to the
TASER®X3
ECD, featuring a dual-shot semi-automatic
capability. The Company announced a number of new orders for this new product during the
second quarter, including: |
| The Newport
News Sheriffs Office in Virginia ordered 77 TASER X2 ECDs
with 77 TASER®
Cam HD units and related accessories. |
| The Montana Highway Patrol ordered 125 TASER X2 ECDs and related
accessories. This was the first of two expected orders which will enable the
deployment of the X2 ECDs to all patrol officers. A follow-on order to complete full
deployment is expected in the second half of 2011. |
| The South Dakota Highway Patrol ordered 165 TASER X2 ECDs, 535 TASER
cartridges and related accessories. |
| The Company received four significant international follow-on orders from law
enforcement agencies during the second quarter of 2011. |
| The first order provided an unnamed international agency with 1,080
TASER X26 ECDs, 59,000 TASER cartridges and 100 TASER Cam units. |
| The second order provided an international law enforcement agency with
295 TASER X26 ECDs, 295 TASER Cam units and 10,951 TASER cartridges. |
| The third order provided an international law enforcement agency with
7,500 TASER cartridges. |
| The fourth order provided an international law enforcement agency with
900 TASER X26 ECDs, 10 TASER Cam units and 3,000 TASER cartridges. |
| The Company announced on May 20, 2011 that it had prevailed in vacating three of the
four monetary awards that were appealed to the Ninth Circuit Court of Appeals in the case
of Heston v. TASER International, Inc., City of Salinas, et al. |
| The National Institute of Justice (NIJ) the research, development and evaluation
agency of the U.S. Department of Justice (DOJ) released two key new reports from multi-year
studies of ECDs also known as Conducted Energy Devices (CEDs), Police Use of Force, Tasers
and Other Less-Lethal Weapons, and Study of Deaths Following Electro Muscular
Disruption. |
| these non-GAAP financial measures are limited in their usefulness and
should be considered only as a supplement to the Companys GAAP
financial measures; |
|
| these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the Companys GAAP financial
measures; |
|
| these non-GAAP financial measures should not be considered to be
superior to the Companys 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. |
For the Three Months Ended | ||||||||
June 30, 2011 | June 30, 2010 | |||||||
Net sales |
$ | 21,198,055 | 19,120,525 | |||||
Cost of products sold |
8,956,362 | 9,489,815 | ||||||
Gross margin |
12,241,693 | 9,630,710 | ||||||
Sales, general and administrative expenses |
9,065,847 | 9,988,885 | ||||||
Research and development expenses |
2,793,235 | 3,055,049 | ||||||
Litigation judgment expense |
3,301,243 | | ||||||
Asset impairment |
1,350,504 | | ||||||
Loss on write down / disposal of property and equipment, net |
747,409 | 22,510 | ||||||
Loss from operations |
(5,016,545 | ) | (3,435,734 | ) | ||||
Interest and other income, net |
1,261,885 | 6,203 | ||||||
Loss before benefit for income taxes |
(3,754,660 | ) | (3,429,531 | ) | ||||
Benefit for income taxes |
(1,459,828 | ) | (2,070,142 | ) | ||||
Net loss |
$ | (2,294,832 | ) | (1,359,389 | ) | |||
Loss per common and common equivalent shares |
||||||||
Basic |
$ | (0.04 | ) | $ | (0.02 | ) | ||
Diluted |
$ | (0.04 | ) | $ | (0.02 | ) | ||
Weighted average number of common and common equivalent
shares outstanding |
||||||||
Basic |
60,605,140 | 62,333,929 | ||||||
Diluted |
60,605,140 | 62,333,929 |
For the Six Months Ended | ||||||||
June 30, 2011 | June 30, 2010 | |||||||
Net sales |
$ | 44,315,004 | $ | 42,964,426 | ||||
Total cost of products sold |
19,865,649 | 19,843,295 | ||||||
Gross margin |
24,449,355 | 23,121,131 | ||||||
Sales, general and administrative expenses |
18,409,809 | 20,276,107 | ||||||
Research and development expenses |
5,545,699 | 7,194,965 | ||||||
Litigation judgment expense |
3,301,243 | | ||||||
Asset impairment |
1,350,504 | | ||||||
Loss on write down / disposal of property and equipment, net |
748,459 | 34,442 | ||||||
Loss from operations |
(4,906,359 | ) | (4,384,383 | ) | ||||
Interest and other income, net |
1,288,206 | 14,102 | ||||||
Loss before benefit for income taxes |
(3,618,153 | ) | (4,370,281 | ) | ||||
Benefit for income taxes |
(1,343,053 | ) | (2,518,287 | ) | ||||
Net loss |
$ | (2,275,100 | ) | $ | (1,851,994 | ) | ||
Loss per common and common equivalent shares |
||||||||
Basic |
$ | (0.04 | ) | $ | (0.03 | ) | ||
Diluted |
$ | (0.04 | ) | $ | (0.03 | ) | ||
Weighted average number of common and common equivalent
shares outstanding |
||||||||
Basic |
61,515,979 | 62,450,722 | ||||||
Diluted |
61,515,979 | 62,450,722 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
GAAP loss from operations |
$ | (5,016,545 | ) | $ | (3,435,734 | ) | $ | (4,906,359 | ) | $ | (4,384,383 | ) | ||||
Stock-based compensation expense (a) |
877,007 | 916,626 | 1,839,924 | 1,926,220 | ||||||||||||
Depreciation and amortization |
2,049,877 | 1,588,171 | 4,117,580 | 3,128,328 | ||||||||||||
Litigation judgment expense |
3,301,243 | | 3,301,243 | | ||||||||||||
Asset impairment |
1,350,504 | | 1,350,504 | | ||||||||||||
Loss on write down / disposal of property and equipment, net |
747,409 | 22,510 | 748,459 | 34,442 | ||||||||||||
Adjusted operating income (loss) |
$ | 3,309,495 | $ | (908,427 | ) | $ | 6,451,351 | $ | 704,607 | |||||||
a) | Results include stock-based compensation as follows: |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
Cost of products sold |
$ | 51,976 | 80,476 | $ | 104,980 | $ | 151,985 | |||||||||
Sales, general and administrative expenses |
649,566 | 724,464 | 1,372,745 | 1,522,591 | ||||||||||||
Research and development expenses |
175,465 | 111,686 | 362,199 | 251,644 | ||||||||||||
$ | 877,007 | 916,626 | $ | 1,839,924 | $ | 1,926,220 | ||||||||||
June 30 , 2011 | December 31, 2010 | |||||||
ASSETS |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 27,719,405 | $ | 42,684,241 | ||||
Short term investments |
10,775,112 | | ||||||
Accounts receivable, net of allowance of $200,000 at June 30, 2011 and December 31, 2010, respectively |
9,978,838 | 13,542,535 | ||||||
Inventory |
16,049,209 | 17,815,405 | ||||||
Prepaid expenses and other current assets |
3,449,974 | 1,999,525 | ||||||
Deferred income tax assets, net |
8,129,195 | 6,284,489 | ||||||
Total current assets |
76,101,733 | 82,326,195 | ||||||
Property and equipment, net |
31,768,928 | 35,905,765 | ||||||
Deferred income tax assets, net |
13,819,753 | 13,919,753 | ||||||
Intangible assets, net |
3,145,911 | 3,090,876 | ||||||
Other long-term assets |
716,493 | 944,346 | ||||||
Total assets |
$ | 125,552,818 | $ | 136,186,935 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current Liabilities: |
||||||||
Accounts payable |
$ | 4,995,678 | $ | 4,550,789 | ||||
Accrued liabilities |
6,603,305 | 3,759,800 | ||||||
Current portion of deferred revenue |
3,023,251 | 3,265,260 | ||||||
Customer deposits |
276,417 | 372,145 | ||||||
Total current liabilities |
14,898,651 | 11,947,994 | ||||||
Deferred revenue, net of current portion |
3,719,053 | 4,392,860 | ||||||
Liability for unrecorded tax benefits |
2,279,851 | 2,281,840 | ||||||
Total liabilities |
20,897,555 | 18,622,694 | ||||||
Stockholders Equity |
||||||||
Preferred stock, $0.00001 par value per share; 25 million shares authorized; no shares issued and
outstanding at June 30, 2011 and December 31, 2010, respectively |
| |||||||
Common stock, $0.00001 par value per share; 200 million shares authorized; 59,704,086 and 62,621,268
shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |
647 | 647 | ||||||
Additional paid-in capital |
98,965,932 | 97,122,085 | ||||||
Treasury stock, 5,013,450
and 2,091,600 shares at June 30, 2011 and December 31, 2010, respectively |
(27,208,053 | ) | (14,708,237 | ) | ||||
Retained earnings |
32,910,091 | 35,185,191 | ||||||
Accumulated other comprehensive loss |
(13,353 | ) | (35,445 | ) | ||||
Total stockholders equity |
104,655,263 | 117,564,241 | ||||||
Total liabilities and stockholders equity |
$ | 125,552,818 | $ | 136,186,935 | ||||
For the Six Months Ended | ||||||||
June 30, 2011 | June 30, 2010 | |||||||
Net loss |
$ | (2,275,100 | ) | $ | (1,851,994 | ) | ||
Depreciation and amortization |
4,117,580 | 3,128,328 | ||||||
Stock-based compensation expense |
1,839,924 | 1,926,220 | ||||||
Net cash provided (used) by operating activities |
9,155,093 | (2,453,789 | ) | |||||
Net cash used by investing activities |
(11,648,260 | ) | (3,413,043 | ) | ||||
Net cash (used) provided by financing activities |
(12,495,893 | ) | 961,037 | |||||
Cash and cash equivalents, end of period |
$ | 27,719,405 | $ | 40,599,254 |