01—Abstract
Summary
Summary of the 10-K filed March 13, 2012. Cited figures are marked; the original filing is the authoritative source.
TASER International, Inc. (now Axon Enterprise, Inc.) reported a net loss of $7.04 milliona for the fiscal year ended December 31, 2011, a notable decline from the prior year's net loss of $4.38 million.
This widened loss was influenced by several factors including a $3.3 millionb litigation judgment, $3.7 million in excess inventory charges primarily related to the TASER X3 and first-generation AXON products, a $1.4 million impairment charge for the Protector product line, and $2.8 million in losses from the disposal of property and equipment. Despite these challenges, the company saw a slight increase in net sales, reaching $90.0 million, up from $86.9 million in 2010. This growth was driven by higher demand for the newly launched TASER X2 and increased international and federal orders, partially offset by declining sales in older product lines like the TASER X26 and TASER Cam.
Financially, the company ended the year with $21.3 millionc in cash and cash equivalents, a decrease from the previous year, largely due to significant stock repurchases totaling $32.5 million. The company also experienced a decrease in working capital.
Looking ahead, TASER International is focused on increasing market penetration in law enforcement, driving sales of its AXON and EVIDENCE.COM platforms, and managing its product lines effectively, including addressing excess inventory. Investors will be watching the company's ability to navigate its ongoing litigation, manage inventory obsolescence, and successfully grow its newer technology offerings.
02—Key points
Key Highlights
- Net loss for fiscal year 2011 was $7.04 million, an increase from a $4.38 million net loss in 2010, impacted by significant charges.
- Net sales increased by 4% to $90.0 million in 2011, primarily driven by the launch of the TASER X2 and strong international/federal orders.
- The company repurchased $32.5 million of its common stock in 2011.
- Significant charges included a $3.3 million litigation judgment reserve, $3.7 million in excess inventory charges, a $1.4 million impairment loss, and $2.8 million in property/equipment disposal losses.
- The company reported a negative gross margin for its Video segment ($6.2 million) due to EVIDENCE.COM service delivery costs and excess inventory charges.
- Cash and cash equivalents decreased to $21.3 million at the end of 2011.
- TASER International is focused on expanding its AXON and EVIDENCE.COM offerings, alongside its core ECD business.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2011, Axon Enterprise, Inc. lost $0.08.
- Revenue$89.7M100.0%
- Cost of revenue−$45.1M50.3%
- Gross profit$44.5M49.7%
- Operating costs−$55.4M61.8%
- Operating income−$10.9M12.2%
- Interest, other & tax$3.9M4.3%
- Net income−$7.0M7.9%
04—Financials
Financial Highlights
Figures from 10-KFY2011filed March 13, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $89.68M$86.93M | +3.2% |
| Cost of Revenue | $36.91M$41.56M | −11.2% |
| Gross Profit | $44.53M$45.37M | −1.8% |
| R&D Expenses | $9.99M$11.41M | −12.5% |
| SG&A Expenses | $38.00M$39.02M | −2.6% |
| Operating Expenses | $55.45M$50.51M | +9.8% |
| Operating Income | -$10.92M-$5.14M | −112.4% |
| Net Income | -$7.04M-$4.38M | −60.6% |
| EPS (Basic) | $-0.12$-0.07 | −71.4% |
| EPS (Diluted) | $-0.12$-0.07 | −71.4% |
| Shares Outstanding (Basic) | 59.44M62.52M | −4.9% |
| Shares Outstanding (Diluted) | 59.44M62.52M | −4.9% |
05—Questions
Frequently Asked Questions
What was the company's financial performance in 2011?
TASER International reported a net loss of $7.04 million on net sales of $90.0 million for the fiscal year ended December 31, 2011. This represented an increase in net loss compared to the prior year, driven by substantial charges including litigation expenses, excess inventory, and asset impairments.
What are the main product segments for TASER International?
The company operates in two reportable segments: the ECD segment (Electronic Control Devices, accessories, and related services) and the Video segment (which includes TASER Cam, AXON video products, and EVIDENCE.COM).
What are the key risks facing the company?
Key risks include significant dependence on law enforcement acceptance of its products, potential for personal injury and wrongful death liability claims, dependence on specific product sales (like the X26 and X2), potential inability to manage growth effectively, and the success of its EVIDENCE.COM Software-as-a-Service model. Litigation and regulatory changes are also significant concerns.
What is the company's dividend policy?
TASER International has not declared or paid cash dividends and does not intend to do so in the foreseeable future, as its credit line prohibits dividend payments.
How did the company manage its inventory in 2011?
The company incurred $3.7 million in excess inventory charges in 2011, primarily related to the TASER X3 and first-generation AXON product lines due to the success of newer products like the TASER X2 and AXON Flex. This resulted in a significant increase in the reserve for excess and obsolete inventory.
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