SCOTTSDALE, Ariz., Oct. 22, 2009 (GLOBE NEWSWIRE) -- TASER International, Inc. (Nasdaq:TASR), a leading provider of technology solutions and the market leader in electronic control devices (ECDs) today reported financial results for the third quarter ended September 30, 2009.

During the third quarter, the Company announced a trade-in program to enable agencies to easily upgrade to the newly announced semi-automatic TASER X3. As required by applicable accounting principles, the Company deferred $3.5 million of revenue until the respective trade-in occurs or the trade-in program expires at December 31, 2009. This temporary deferral significantly reduces GAAP reported net sales as compared to adjusted revenue for product shipments. Additionally, all the product costs associated with the sale were recognized at the time of delivery to the customer. In order to simplify comparison to prior periods, the Company will discuss both its GAAP and its adjusted (non-GAAP) results assuming this revenue was not deferred.

Q3 Financial Summary:

 * Adjusted revenues for the third quarter of 2009 were $26.8
   million, an increase of $4.0 million or 17% over the same quarter
   of the prior year. For the first nine months of 2009, adjusted
   revenues were $73.2 million, an increase of $6.8 million or 10.0%
   over the first nine months of 2008. Adjusted revenues exclude the
   impact of a $3.5 million revenue deferral related to the X26 to X3
   trade-in credit program, the balance of which is expected to be
   recognized as revenue when the trade-in occurs or the offer expires
   at December 31, 2009. On a GAAP basis, net sales for the third
   quarter and first nine months of 2009 were $23.3 million and $69.7
   million, respectively. Net sales for the third quarter and first
   nine months of 2008 were $22.9 million and $66.4 million,
   respectively.
 * Adjusted gross margin, which excludes the impact of the X26 to X3
   trade-in credit program, improved to 62.5% in the third quarter of
   2009, compared to 60.8% in the third quarter of 2008.  On a GAAP
   basis, gross margin for the third quarter was 56.9%, compared to
   60.8% in the third quarter of 2008.
 * Research and development expenses of $6.7 million increased by
   $3.3 million, or 100%, in the third quarter of 2009 compared to
   the same period in 2008. The increase was driven primarily by
   ongoing, intensive development efforts to bring multiple new
   products to market including the TASER(R) X3(TM), TASER(R) AXON(TM)
   and EVIDENCE.COM.  The accelerated research and development costs
   were associated with the simultaneous launch of two major product
   lines in the quarter: the new TASER X3 and the AXON Tactical
   Computer. The Company expects R&D costs to return to more normal
   levels in the fourth quarter.
 * Adjusted operating income for the third quarter of 2009, which
   excludes the X26 to X3 trade-in revenue deferral, stock-based
   compensation charges, depreciation and amortization and litigation
   judgment expense, was $0.6 million compared to $2.8 million for the
   third quarter of 2008. GAAP loss from operations was $(4.8) million
   for the third quarter of 2009 compared to income from operations of
   $1.5 million for the same period in the prior year.
 * Net loss and diluted loss per share for the third quarter of 2009
   were $(3.2) million and $(0.05), respectively.
 * The Company generated $5.5 million in cash from operating
   activities in the first nine months of 2009 with ending cash and
   cash equivalents of $45.4 million and no debt.

Significant events in the third quarter of 2009 include the following:

 1. International sales represented 19% of net sales and 16% of
    adjusted revenues for the third quarter (including the impact of
    revenue deferred for GAAP purposes relating to the X26 to X3
    trade-in program).  Significant shipments during the third quarter
    included follow-on orders for 1962 TASER(R) X26(TM) ECDs, 1962
    TASER CAMs(TM) and related accessories to Australia.
 2. Sales to our Federal and military customers significantly
    increased during the quarter, partly due to the first order for
    TASER(R) X26(TM) ECDs and cartridges shipped under an indefinite
    delivery, indefinite quantity (IDIQ) contract from the U.S.
    Customs and Border Protection (CBP).
 3. On July 27, 2009, the next generation TASER(R) X3(TM) ECD was
    unveiled at the annual TASER Conference. The TASER X3 is capable
    of firing three cartridges without reloading and uses a Pulse
    Calibration System(TM) to constantly monitor and calibrate
    electrical output to provide more consistent effects on the
    target.
 4. Six (6) product liability suits were dismissed during the
    quarter, representing at the end of the quarter a total of
    ninety-six (96) wrongful death or injury suits that have been
    dismissed or judgment entered in favor of the Company.

"I am extremely proud of our team, which was able to turn in one of the strongest sales quarters in our Company's history despite the challenging economic environment," said Rick Smith, CEO of TASER International. "In addition to the strong sales for our existing products, our new AXON and EVIDENCE.com products continue to receive widespread praise from the law enforcement community. Both products recently received top industry awards at the International Association of Chiefs of Police Conference in the law enforcement computer and software categories, which is a great start as we prepare to bring these products to market in 2010. The investments we have made in these transformative products have positioned the Company to build on our reputation as not only the leading name in ECDs, but a pioneer in defense-oriented technologies and software services as well."

The Company will host its third quarter 2009 earnings conference call on Thursday, October 22, 2009 at 11:00 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: 1-866-700-7477 or 1-617-213-8440 for international callers. The pass code is 26406262 for both numbers.

Non-GAAP Measures

To supplement the Company's Statements of Operations presented in accordance with GAAP, we are presenting non-GAAP measures of certain components of financial performance. We have presented these measures for our investors to be better able to compare our current results with those of previous periods and have shown a reconciliation of GAAP to the non-GAAP financial measures in the tables at the end of this release. These non-GAAP measures include: (1) for adjusted revenue and adjusted gross margin, the impact of sales that were made during the third quarter pursuant to our X26 to X3 trade-in credit program that for GAAP purposes the resulting revenues were deferred until the sooner of when the offer is redeemed or the trade-in upgrade period expires, which will be no later than December 31, 2009 ("deferred sales") and (2) for income (loss) from operations, the impact of deferred sales, non-cash stock-based compensation expense, depreciation and amortization and litigation judgment expense. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results," meaning our operating performance excluding non-cash charges, such as stock-based compensation, depreciation and amortization and other discrete charges that are infrequent in nature. Additionally, because the temporary non-cash revenue deferral for the X26 to X3 trade-in credit program significantly reduces GAAP reported net sales as compared to adjusted revenue for product shipments, and whereas all the product costs associated with the sale were recognized at the time of delivery to the customer, the presentation of adjusted results assuming this revenue was not deferred simplifies the comparison to prior periods. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity.

Caution on Use of Non-GAAP Measures

As noted previously, these non-GAAP financial measures are not consistent with GAAP because they do not reflect the deferral of revenue and the impact of other non-cash charges.