Taser reports record revenues in 2016 second quarter

Taser

TASER’s HQ in Scottsdale, AZ. TASER is a technology solutions provider with its TASER Smart Weapons that protect life and AXON body-worn law enforcement cameras that protect truth. Photo courtesy of TASER International.

TASER International, Inc. has announced financial results for the second quarter  ended June 30, 2016.

“We generated a 26% increase in net sales for the period and set the stage for future performance as highlighted by a more than doubling of Axon bookings year-over-year to a record $72.0 million,” said Rick Smith, TASER CEO and co-founder in Scotsdale, Arizona. “Our mission is more important than ever, and we are proud to partner with law enforcement as we deliver the most robust and scalable cloud-connected device platform in public safety along with our weapons products. As the industry leader, we will continue to advance our technology platform and expand our reach both domestically and abroad.”

Second Quarter 2016 Financial Highlights:

  • Net sales increased 26% to $58.8 million in the second quarter of 2016 compared to$46.7 million in the second quarter of 2015. International sales were $6.5 million in the second quarter of 2016.
  • TASER Weapons segment revenues increased 20% to $45.5 million in the second quarter of 2016 compared to $37.8 million in the second quarter of 2015.
  • Axon segment revenues increased 49% to $13.2 million in the second quarter of 2016 compared to $8.9 million in the second quarter of 2015.
  • Consolidated gross margin was 63% in the second quarter of 2016 compared to 66% in the second quarter of 2015. The decrease was primarily due to a mix shift to Axon segment hardware revenue.
  • TASER Weapons segment gross margin was 68% in second quarter 2016 compared to 70% in the second quarter of 2015.
  • Axon segment gross margins remained consistent at 47% in the second quarter of 2016 and 2015. Axon service margins increased to 71% in the second quarter of 2016 compared to 66% in the second quarter of 2015. Axon hardware product margins (excluding Axon services) decreased to 33% in the second quarter 2016 compared to 37% in the second quarter of 2015.
  • Sales, general and administrative (SG&A) expenses of $24.4 million in the second quarter of 2016 increased $8.9 million, from $15.4 million in the second quarter of 2015. The increase is primarily due to increased headcount, expenses related to international expansion, professional/consulting fees, and higher variable compensation.
  • Research and development (R&D) expenses of $6.7 million for the second quarter of 2016 increased $0.8 million when compared to the second quarter of 2015. The increase is primarily related to increased headcount.
  • Income from operations was $6.2 million in the second quarter of 2016 compared to$9.4 million in the second quarter of 2015. This is primarily due to an increase in operating expenses of $9.7 million partially offset by a $12.0 million increase in revenue on slightly lower gross margins.
  • Net income for the second quarter of 2016 was $3.7 million, or $0.07 per diluted share, compared to $6.1 million, or $0.11 per diluted share, in the second quarter of 2015.
  • Adjusted EBITDA for the second quarter of 2016 was $9.4 million compared to $11.9 million in the second quarter of 2015.
  • In the second quarter of 2016, the Company generated $3.2 million in cash from operating activities. Cash, cash equivalents and investments were $91.6 million atJune 30, 2016, compared to $118.3 million at December 31, 2015. Included in these balances were $4.6 million and $8.5 million in long-term investments as of June 30, 2016 and December 31, 2015, respectively.

Business Highlights:

  • As of the end of the second quarter of 2016, 34 major city law enforcement agencies have purchased TASER’s Axon body-worn cameras and/or its digital evidence management solution: Albuquerque, Baltimore, Baltimore County, Charlotte-Mecklenburg, Chicago, Cleveland, Dallas, Denver, Fort Worth, Fresno, Kansas City*,Los Angeles, Las Vegas, Louisville, Memphis, Mesa, Miami, Milwaukee, Minneapolis,Montgomery County, New Orleans, Omaha, Philadelphia, Pittsburgh, Salt Lake City,San Antonio, San Diego, San Francisco, San Jose, Tampa, Toronto*, Tucson,Washington, DC, and Wichita.* These customers have purchased only the MediaSolv solution at this point in time.
  • Axon platform user count continued to grow, extending the Company’s market leadership. During the three months ended June 30, 2016, the Company booked approximately 20,200 seats on its digital evidence management platform, Evidence.com. Since inception, the Company has booked cumulative Evidence.com licenses of approximately 95,000.
  • In February 2016, the Company announced that TASER’s Board of Directors authorized a stock repurchase program to acquire up to $50.0 million of the Company’s outstanding common stock, subject to stock market conditions and corporate considerations. During the three months ended June 30, 2016, the Company purchased approximately 1.3 million common shares under the program for a total cost of approximately $24.8 million, or a weighted average cost of $18.92per share. The weighted average cost includes the average price paid per share of$18.89, plus applicable administrative costs for the transaction. As of June 30, 2016,$16.2 million remains available under the plan for future purchases. The Company maintains a Rule 10b5-1 plan to repurchase shares. – PRNewswire

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