SCOTTSDALE, Ariz., Feb. 24, 2009 (GLOBE NEWSWIRE) -- TASER International, Inc. (Nasdaq:TASR) ("TASER" or "the Company"), the market leader in advanced electronic control devices (ECD), today reported financial results for the fourth quarter of 2008 and the year ended December 31, 2008.
For the fourth quarter of 2008 revenues were $26.4 million, a $4.6 million or 15% decrease over the same quarter of the prior year. On a sequential basis, sales increased $3.5 million, driven primarily by incremental growth in international orders, despite a weakening global economy. Operations continued to demonstrate improvement, as gross margin increased to 63.4% in the fourth quarter of 2008, compared to 55.2% in the fourth quarter of 2007, reflecting a more favorable product sales mix and the Company's continued focus on production efficiency and cost controls. Consistent with our strategy announced last year, research and development expenses increased by $3.2 million, or 268%, in the fourth quarter of 2008 compared to the same period in 2007, reflecting the Company's ongoing commitment to invest in new technology and product diversification. As a result of the decrease in sales, combined with increased research and development spending and the reversal of a $5.2 million litigation judgment expense, net operating income for the fourth quarter was $6.6 million compared to $7.2 million for the same period a year ago. The net income and diluted earnings per share for the fourth quarter of 2008 were $3.6 million and $0.06, respectively.
Revenue for 2008 was $92.8 million, compared to revenue of $100.7 million in 2007, a decrease of 8%. Despite the decline in revenue, gross margin for the year was 61.4% compared to 57.1% in 2007, driven by the Company's focus on a lean operating environment. Net income and diluted earnings per share for 2008 were $3.4 million and $0.05, respectively. The Company generated $8.1 million from operating activities during 2008 with ending cash and cash equivalents of $46.9 million and zero debt. The Company also repurchased approximately 1.8 million shares of its common stock for $12.5 million during the second quarter of 2008.
Significant events in the fourth quarter of 2008 include the following:
1. International sales represented 28% of total net sales for the
quarter, compared to 16% in the third quarter of 2008 and 22% in
the fourth quarter of 2007. Significant shipments during the
quarter included an order for 5,000 TASER(r) X26(tm) Electronic
Control Devices (ECDs) following an announcement that the UK
Government intends to fund 10,000 TASER X26 ECDs for police
officers in England and Wales. The Company also received a
follow-on order for 550 TASER X26 devices from the Korean
National Police Agency, which continues to expand its existing
program and shipped 1,000 TASER ECDs to the Brazilian National
Guard in December 2008.
2. Domestically, orders were received from agencies continuing to
expand the use of TASER devices to their first responders and from
new agencies deploying TASER technology following extensive trial
and evaluation. Some of the more significant orders announced
during the quarter include the Los Angeles Police Department's
purchase of 1,275 TASER X26 ECDs, the Jacksonville Sheriff's
Office order for 480 TASER X26 ECDs and the Marin County Sheriff's
Office in California, which purchased 101 TASER X26 ECDs and
TASER(r) CAM(tm) units.
3. The Company demonstrated several innovative new products and
concepts at the International Association of Chiefs of Police
(IACP) annual conference in San Diego. These included TASER(r)
AXON(tm), TASER Controlled Digital Power Magazine CDPM(tm), TASER
Shockwave(tm), and TASER XREP(tm).
4. A five-year analysis conducted by the Florida Gulf Coast
University Weapons and Equipment Research Institute, funded by the
Department of Justice concluded that TASER Devices are a very
effective use of force option and lead to less injuries to both
suspects and officers. The 104-page report, Less Lethal Weapon
Effectiveness, Use of Force, and Suspect & Officer Injuries: A
Five-Year Analysis can be found at:
http://www.ncjrs.gov/pdffiles1/nij/grants/224081.pdf.
5. Three (3) more product liability suits were dismissed during the
quarter, representing at the end of the quarter a total of
seventy-nine (79) wrongful death or injury suits that have been
dismissed or judgment entered in favor of the Company.
6. On October 24, 2008 the United States District Court for the
Northern District of California eliminated the $5.2 million in
punitive damages awarded by the jury in Betty Lou Heston, et al.
v. City of Salinas, TASER International, Inc., et al., TASER's
first product liability courtroom loss in June 2008. This is a
significant legal finding in the Company's favor and reduces the
estimated total damages from the case by over 97% to only $153,150
in compensatory damages which is covered by the Company's
insurance. As a result, the Company reversed the related $5.2
million litigation judgment expense in the fourth quarter of 2008.
7. The Company established the new TASER Virtual Systems division
headquartered in Carpinteria, California, and appointed former
senior Microsoft strategy leader Jas Dhillon to run the new
division. This new division represents the core of TASER's growth
strategy focusing on transforming the Company's product offering
into a network of intelligent devices that create breakthrough
informational and tactical capabilities for its customers.
"TASER remains focused on the next phase of growth and development in 2009, at a time when many companies throughout the world continue to view the current economic conditions with trepidation," said Rick Smith, Chief Executive Officer of TASER International. "We expect 2009 to be a transformational year for our Company, as the significant investments in research and development we made in 2008 come to fruition. While I am very excited about the opportunities ahead of us in 2009, I am most proud of the management team at TASER International, which remained focus on managing a lean and profitable business through serious economic constraints. Our team improved gross margins by over eight percentage points of revenue, even as the top-line contracted. Simultaneously, we have built a world-class software development team at our new TASER Virtual Systems division in California and significantly expanded our hardware development group in Scottsdale. In 2008, we made the decision to nearly triple our research and development investment and I am confident that these bold initiatives will set the company apart in 2009."
The Company will host its fourth quarter 2008 earnings conference call on Tuesday, February 24, 2009 at 10:00 a.m. ET. The conference call is available via web cast and can be accessed on the "Investor Relations" page at www.TASER.com. To access the teleconference, please dial: 1-866-783-2146 or 1-857-350-1605. The pass code is 68754228 for both numbers.
About TASER International, Inc. (TASR):
TASER International's products protect life, providing advanced Electronic Control Devices for use in the law enforcement, medical, military, corrections, professional security, and personal protection markets. TASER(r) devices use proprietary technology to incapacitate dangerous, combative, or high-risk subjects who pose a risk to law enforcement officers, innocent citizens, or themselves in a manner that is generally recognized as a safer alternative to other uses of force. TASER technology protects life, and the use of TASER devices dramatically reduces injury rates for police officers and suspects. For more information about TASER technology, please call (800) 978-2737 or visit our website at www.TASER.com.
The TASER International logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2931
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, without limitation, regarding our expectations, beliefs, intentions or strategies regarding the future. 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. Therefore, actual outcomes and results could materially differ from what is expressed, implied, or forecasted in such forward-looking statements.
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: (1) market acceptance of our products; (2) our ability to establish and expand direct and indirect distribution channels; (3) our ability to attract and retain the endorsement of key opinion-leaders in the law enforcement community; (4) the level of product technology and price competition for our products; (5) the degree and rate of growth of the markets in which we compete and the accompanying demand for our products; (6) risks associated with rapid technological change and new product introductions; (7) competition; (8) litigation including lawsuits resulting from alleged product related injuries and death; (9) media publicity concerning allegations of deaths and injuries occurring after use of the TASER device and the negative effect this publicity could have on our sales; (10) TASER device tests and reports; (11) product quality; (12) implementation of manufacturing automation; (13) potential fluctuations in our quarterly operating results; (14) financial and budgetary constraints of prospects and customers; (15) order delays; (16) dependence upon sole and limited source suppliers; (17) negative reports concerning the TASER device; (18) fluctuations in component pricing; (19) government regulations and inquiries; (20) dependence upon key employees and our ability to retain employees; (21) execution and implementation risks of new technology; (22) ramping manufacturing production to meet demand; (23) medical and safety studies; (24) field test results; and (25) other factors detailed in our filings with the Securities and Exchange Commission, including, without limitation, those factors detailed in the Company's Annual Report on Form 10-K and its Form 10-Qs.
The statements made herein are independent statements of TASER International, Inc. The inclusion of any third parties does not represent an endorsement of any TASER International products or services by any such third parties.
For investor relations information please contact Katie Pyra 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.
Statements of Income
(Unaudited)
For the Three Months Ended
------------------------------------
December 31, 2008 December 31, 2007
----------------- -----------------
Net Sales $ 26,398,218 $ 31,028,581
----------------- -----------------
Cost of Products Sold:
Direct manufacturing expense 6,878,559 10,662,861
Indirect manufacturing expense 2,778,566 3,228,031
----------------- -----------------
Total Cost of Products Sold 9,657,125 13,890,892
----------------- -----------------
Gross Margin 16,741,093 17,137,689
Sales, general and
administrative expenses 10,935,025 8,742,218
Research and development expenses 4,454,930 1,209,950
Litigation judgment expense (5,200,000) --
----------------- -----------------
Income from Operations 6,551,138 7,185,521
Interest and other income, net 225,519 744,183
----------------- -----------------
Income before income taxes 6,776,657 7,929,705
Provision for income taxes 3,219,258 3,251,029
----------------- -----------------
Net income $ 3,557,399 $ 4,678,676
================= =================
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 61,762,451 63,167,732
Diluted 63,244,534 66,328,255
TASER International, Inc.
Statements of Income
(Unaudited)
For the Year Ended
------------------------------------
December 31, 2008 December 31, 2007
----------------- -----------------
Net Sales $ 92,845,490 $100,727,191
----------------- -----------------
Cost of Products Sold:
Direct manufacturing expense 26,756,080 31,507,727
Indirect manufacturing expense 9,085,183 11,659,645
----------------- -----------------
Total Cost of Products Sold 35,841,263 43,167,372
----------------- -----------------
Gross Margin 57,004,227 57,559,819
Sales, general and
administrative expenses 38,860,729 32,814,170
Research and development
expenses 12,918,161 4,421,596
----------------- -----------------
Income from Operations 5,225,337 20,324,053
Interest and other income, net 1,717,967 2,202,186
----------------- -----------------
Income before income taxes 6,943,304 22,526,239
Provision for income taxes 3,534,677 7,499,764
----------------- -----------------
Net Income $ 3,408,627 $ 15,026,475
================= =================
Income per common and common
equivalent shares
Basic $ 0.05 $ 0.24
Diluted $ 0.05 $ 0.23
Weighted average number of
common and common equivalent
shares outstanding
Basic 62,371,004 62,621,174
Diluted 64,070,869 65,685,667
TASER International, Inc.
Balance Sheets
(Unaudited)
December 31, 2008 December 31, 2007
----------------- -----------------
ASSETS
Current Assets
Cash and cash equivalents $ 46,880,435 $ 42,801,461
Short-term investments -- 8,499,978
Accounts receivable, net 16,793,553 11,691,553
Inventory 13,467,117 13,506,804
Prepaids and other assets 2,528,539 4,318,661
Current deferred income tax
asset 11,031,028 15,608,325
----------------- -----------------
Total Current Assets 90,700,672 96,426,782
Long-term investments 2,498,998 9,006,493
Property and equipment, net 27,128,032 23,599,680
Deferred income tax asset 6,724,104 6,724,104
Intangible assets, net 2,447,011 1,925,139
Other long-term assets 14,970 81,203
----------------- -----------------
Total Assets $ 129,513,787 $ 137,763,401
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued
liabilities $ 8,073,277 $ 10,088,139
Current deferred revenue 2,510,645 1,694,644
Customer deposits 312,686 266,728
Deferred insurance settlement
proceeds -- 404,848
Current portion of capital lease
obligations -- 19,257
----------------- -----------------
Total Current Liabilities 10,896,608 12,473,616
Capital lease obligations, net
of current portion -- 11,695
Deferred revenue, net of current
portion 4,840,965 3,541,267
Liability for unrecorded tax
benefits 1,478,366 1,100,073
----------------- -----------------
Total Liabilities 17,215,939 17,126,651
----------------- -----------------
Commitments and Contingencies -- --
Stockholders' Equity
Common stock 638 635
Additional paid-in capital 87,663,129 86,911,381
Treasury stock (14,708,237) (2,208,957)
Retained earnings 39,342,318 35,933,691
----------------- -----------------
Total Stockholders' Equity 112,297,848 120,636,750
----------------- -----------------
Total Liabilities and
Stockholders' Equity $ 129,513,787 $ 137,763,401
================= =================
TASER International, Inc.
Selected Statement of Cash Flows Information
(Unaudited)
For the Year Ended
December 31, 2008 December 31, 2007
----------------- -----------------
Net income $ 3,408,627 $ 15,026,475
Depreciation and amortization 2,637,773 2,521,237
Stock-based compensation expense 2,423,885 1,387,966
Net cash provided by operating
activities 8,118,007 13,922,833
Net cash provided by investing
activities 8,117,426 7,006,410
Net cash provided (used) by
financing activities (12,156,459) 3,098,533
Cash and Cash Equivalents,
end of period $ 46,880,435 $ 42,801,461