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October 25, 2007
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Taser profits surge on sales of consumer model
Andrew Johnson
The Arizona Republic
SCOTTSDALE, Ariz. — Increased domestic and international orders and strong demand for its new consumer stun gun pushed Taser International Inc.'s sales up 55.8 percent in the third quarter, the Scottsdale-based company said Wednesday.
The company reported $28.5 million in revenue for the quarter, beating its previous sales record set in the prior quarter.
It was also Taser's fifth consecutive profitable quarter, with net income increasing 156.9 percent over the year-ago period.
The biggest news Wednesday was shipment activity related to its Taser C2 Personal Protector, the new consumer model of its stun gun that it first unveiled at a trade show in January.
In a morning conference call with analysts, CEO Rick Smith said the company shipped 6,932 C2 units during the quarter, more than double what analyst Eric Wold had estimated Taser would ship.
"I was admittedly conservative," said Wold, managing director Merriman Curhan Ford & Co. in New York. "Given that they shipped 7,000 the first quarter out of the gate . . . is a very good number and they've already started with a backlog going into the fourth quarter."
Wold reiterated his "buy" rating for Taser in a research note he sent out Wednesday morning.
Wednesday's results provided the first snapshot of sales performance for the C2, which debuted with much fanfare at the International Consumer Electronics Show in Las Vegas earlier this year and began shipping in the third quarter.
The sleek-looking device comes in pink, blue, silver and black colors and is updated version of previous consumer models, which failed to attract many customers due to its bulky size and resemblance to a handgun.
Smith said the company plans to ramp up marketing and advertising efforts for the product with an infomercial that could starting airing at the end of the fourth quarter.
Growth in both orders from domestic and foreign law enforcement agencies also contributed to higher sales.
Significant U.S. orders announced during the third quarter included the Miami-Dade County Police Department in Florida, San Diego County Sheriff's Department in California and California Highway Patrol, an order Smith said would spill over into the fourth quarter.
International orders, an area where the company has traditionally struggled, accounted for about 15 percent of Taser's overall sales for the quarter. That was partially due to a follow-up order from the French Ministry.
The increased activity helped boost Taser's profits to $6.2 million, or 9 cents per diluted share, up from $2.4 million, or 4 cents per diluted share, in the year-ago quarter.
The company, which has been dogged by allegations that its stun guns cause death since its inception, also provided an update on pending litigation.
With the dismissal of six product liability lawsuits during the quarter, Taser has had a total of 58 wrongful death or injury suits dropped, said Douglas Klint, vice president and general counsel.
Taser's shares were trading down 31 cents at $16.93 as of 9 a.m. Arizona time on Wednesday.
Copyright 2007 The Arizona Republic
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TASER International
