| CONTACT: | Dan Behrendt | |||
| Chief Financial Officer | ||||
| TASER International, Inc. | ||||
| (480) 905-2000 |
| 1. | A number of significant sales orders were received and shipped to law enforcement agencies both in the United States and internationally. The orders were from both new agencies deploying TASER® technology following extensive test and evaluation periods and from agencies continuing to expand the use of TASER devices to their first responders. Some of our significant orders announced during the quarter include the Commonwealth of Pennsylvania State Police, Hawaii County Police Department (HI), Riverside County Sheriff’s Department (CA), Washington State Patrol, Tallahassee Police Department, Scottsdale Police Department (AZ), South Carolina Department of Public Safety and Bridgeport Police Department (CT). | ||
| 2. | We shipped a significant amount of foreign orders during the quarter. International sales accounted for approximately $5.5 million or 21% of our total sales in the second quarter. | ||
| 3. | In addition to the above law enforcement orders, we received a purchase order to provide the United States Military with an initial 2,400 TASER X26 units and accessories. This was the first order of a five-year indefinite delivery, indefinite quantity contract, with the possibility of future orders up to a maximum value of $22.8 million and follows on from the initiatives we put in place in 2006 with the formation of our Senior Executive Advisory Board. This Board advises the Company on expanded use of its products in military and federal market applications. | ||
| 4. | We announced the formation of a strategic alliance with iRobot Corporation to collaborate in developing a new robotic capability utilizing TASER technologies. This combination of capabilities will focus on enabling law enforcement, federal and military users to remotely employ TASER technology to engage, incapacitate, and control dangerous suspects without exposing personnel to unnecessary risks. | ||
| 5. | Eight more product liability suits were dismissed during the quarter representing a total of fifty-two wrongful death or injury suits that have been dismissed or judgment entered in favor of the Company since 2004. | ||
| 6. | Seven human safety studies analyzing the cardiovascular and physiological effects of the TASER X26 were released at the Society of Academic Emergency Medicine 2007 Annual Meeting. These studies using human volunteers affirm the medical safety of TASER technology. Many of these abstracts can be viewed at: http://www2.taser.com/research/Science/Pages/GeneralStudies.aspx |
| For the Three Months Ended | ||||||||
| June
30, 2007 |
June
30, 2006 |
|||||||
Net Sales |
$ | 25,863,376 | $ | 16,225,197 | ||||
Cost of Products Sold: |
||||||||
Direct manufacturing expense |
7,338,890 | 4,229,384 | ||||||
Indirect manufacturing expense (including
stock-based compensation expense of $43,704
and $30,711, respectively) |
2,993,227 | 1,605,190 | ||||||
Total Cost of Products Sold |
10,332,117 | 5,834,574 | ||||||
Gross Margin |
15,531,259 | 10,390,623 | ||||||
Sales, general and administrative expenses
(including stock-based compensation expense
of $238,330 and $233,236, respectively) |
8,344,927 | 7,603,035 | ||||||
Research and development expenses (including
stock-based compensation expense of $47,110
and $47,701, respectively) |
1,262,849 | 562,991 | ||||||
Shareholder litigation settlement expense |
— | 17,650,000 | ||||||
Income
(loss) from Operations |
5,923,483 | (15,425,403 | ) | |||||
Interest and other income, net |
427,033 | 428,594 | ||||||
Income (loss) before income taxes |
6,350,516 | (14,996,809 | ) | |||||
Provision (credit) for income taxes |
2,651,308 | (5,390,225 | ) | |||||
Net Income (loss) |
$ | 3,699,208 | $ | (9,606,584 | ) | |||
Income
(loss) per common and common equivalent shares |
||||||||
Basic |
$ | 0.06 | $ | (0.15 | ) | |||
Diluted |
$ | 0.06 | $ | (0.15 | ) | |||
Weighted average number of common and common
equivalent shares outstanding |
||||||||
Basic |
62,374,946 | 62,035,485 | ||||||
Diluted |
65,214,726 | 62,035,485 | ||||||
| For the Six Months Ended | ||||||||
| June 30, 2007 | June 30, 2006 | |||||||
Net Sales |
$ | 41,165,191 | $ | 30,118,760 | ||||
Cost of Products Sold: |
||||||||
Direct manufacturing expense |
11,947,459 | 7,758,785 | ||||||
Indirect manufacturing expense (including
stock-based compensation expense of $75,402
and $62,545, respectively) |
4,797,444 | 3,014,658 | ||||||
Total Cost of Products Sold |
16,744,903 | 10,773,443 | ||||||
Gross Margin |
24,420,288 | 19,345,317 | ||||||
Sales, general and administrative expenses
(including stock-based compensation expense
of $426,103 and $500,380, respectively) |
15,926,835 | 14,857,347 | ||||||
Research and development expenses (including
stock-based compensation expense of $89,802
and $110,723, respectively) |
2,233,635 | 1,226,801 | ||||||
Shareholder litigation settlement expense |
— | 17,650,000 | ||||||
Income (loss) from Operations |
6,259,818 | (14,388,831 | ) | |||||
Interest and other income, net |
933,402 | 793,910 | ||||||
Income (loss) before income taxes |
7,193,220 | (13,594,921 | ) | |||||
Provision (credit) for income taxes |
2,999,458 | (4,794,316 | ) | |||||
Net Income (loss) |
$ | 4,193,762 | $ | (8,800,605 | ) | |||
Income (loss) per common and common equivalent shares |
||||||||
Basic |
$ | 0.07 | $ | (0.14 | ) | |||
Diluted |
$ | 0.06 | $ | (0.14 | ) | |||
Weighted average number of common and common
equivalent shares outstanding |
||||||||
Basic |
62,509,268 | 61,990,714 | ||||||
Diluted |
65,245,265 | 61,990,714 | ||||||
| June 30, 2007 | December 31, 2006 | |||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 25,533,196 | $ | 18,773,685 | ||||
Short-term investments |
2,980,297 | 3,557,289 | ||||||
Accounts receivable, net |
14,896,802 | 10,068,049 | ||||||
Inventory |
9,947,077 | 9,257,746 | ||||||
Prepaids and other assets |
1,885,628 | 2,164,002 | ||||||
Current deferred income tax asset |
8,667,952 | 12,295,493 | ||||||
Total Current Assets |
63,910,952 | 56,116,264 | ||||||
Long-term investments |
15,988,796 | 25,477,574 | ||||||
Property and equipment, net |
21,287,980 | 20,842,632 | ||||||
Deferred income tax asset |
16,385,344 | 15,868,719 | ||||||
Intangible assets, net |
1,735,766 | 1,532,500 | ||||||
Total Assets |
$ | 119,308,838 | $ | 119,837,689 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current Liabilities |
||||||||
Current portion of capital lease obligations |
$ | 39,334 | $ | 45,214 | ||||
Accounts payable and accrued liabilities |
6,959,982 | 6,789,474 | ||||||
Current deferred revenue |
1,293,786 | 1,037,441 | ||||||
Deferred insurance settlement proceeds |
508,114 | 509,067 | ||||||
Customer deposits |
533,419 | 171,492 | ||||||
Litigation settlement liabilities |
— | 9,750,000 | ||||||
Total Current Liabilities |
9,334,635 | 18,302,688 | ||||||
Capital lease obligations, net of current portion |
14,522 | 30,974 | ||||||
Deferred revenue, net of current portion |
2,637,479 | 1,975,489 | ||||||
Other liabilities |
— | 199,999 | ||||||
Total Liabilities |
11,986,636 | 20,509,150 | ||||||
Commitments and Contingencies |
— | — | ||||||
Stockholders’ Equity
Common stock |
631 | 622 | ||||||
Additional paid-in capital |
84,429,551 | 80,629,659 | ||||||
Treasury stock |
(2,208,957 | ) | (2,208,957 | ) | ||||
Retained earnings |
25,100,977 | 20,907,215 | ||||||
Total Stockholders’ Equity |
107,322,202 | 99,328,539 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 119,308,838 | $ | 119,837,689 | ||||
| For the Six Months Ended | ||||||||
| June 30, 2007 | June 30, 2006 | |||||||
Net income
(loss) |
$ | 4,193,762 | $ | (8,800,605 | ) | |||
Depreciation and amortization |
1,171,102 | 1,043,069 | ||||||
Stock-based compensation expense |
591,307 | 673,648 | ||||||
Net cash provided (used) by operating activities |
(2,917,875 | ) | 6,093,267 | |||||
Net cash provided (used) by investing activities |
8,241,124 | (7,271,204 | ) | |||||
Net cash provided by financing activities |
1,436,262 | 245,860 | ||||||
Cash and Cash Equivalents, end of period |
$ | 25,533,196 | $ | 15,419,832 | ||||