American Technology Forecasts over $4 Million in Revenues for Quarter Ending
December 31, 2004; Company
Also Reports Record Revenue for Fiscal 2004
SAN DIEGO--(BUSINESS WIRE)--Dec. 29, 2004--American Technology
Corporation (ATC) (Nasdaq:ATCO), an innovator of proprietary sound
reproduction technologies, today forecast record quarterly revenues in
excess of $4 million for the quarter ending December 31, 2004. The
company also reported record revenues for its fiscal year 2004, ended
September 30, 2004. Revenues for fiscal 2004 were $5.8 million
compared to $1.3 million in fiscal 2003, an increase of 337%. The
company's Government/Force Protection Group and Business Group
generated revenues of $4.8 million and $0.9 million, respectively, in
the fiscal year.
The company reported a gross profit of $2.3 million for the fiscal
year compared to a gross loss of $0.2 million for fiscal 2003. The
company also reported a net loss of $6 million for fiscal 2004 reduced
from a net loss of $8.2 million in fiscal 2003. Net loss attributable
to common stockholders after deducting non-cash dividends on preferred
stock was $(0.37) per share compared to $(0.67) per share last fiscal
year.
MANAGEMENT COMMENTARY
"In fiscal 2004 we established the markets and organizational
foundation to position our proprietary sound reproduction technologies
at the forefront of audio industry innovation with products primed to
produce rapid revenue growth," said Elwood G. Norris, chairman of
American Technology Corporation. "Our LRAD(TM) devices are becoming
The Sound of Force Protection(TM) for an increasing number of
military, government and commercial applications. And, after several
years of development, we believe our HSS(R) technology is ready to
realize its commercial promise as the most revolutionary audio
development since the invention of the loudspeaker."
"This year, we augmented the ATC team, successfully introduced new
products, focused our sales and marketing efforts, outsourced
manufacturing to enable rapid response to anticipated volume orders,
and achieved record revenues," remarked Kalani Jones, president and
COO of ATC. "We have made substantial progress on our digital signage
business programs and we are pleased with the responses we are
receiving from our HSS Gen III deliveries to digital signage customers
in Asia, Europe and North America. As we have previously stated, the
structure of the larger digital signage programs in which we are
engaged are complex, involve several partners, and generally require
in-depth trials through multiple test installations. With the digital
signage market expected to grow to over $5 billion in the next three
to four years, we believe HSS is well positioned to be the audio
solution for a number of major near-term programs. The programs
contemplated each have the potential to generate $1 - $14 million
dollars in revenue to ATC over the next three to twenty-four months."
Commenting on the increasing success of ATC's proprietary LRAD
devices, Carl Gruenler, vice president of ATC's government and force
protection systems, said, "This year, through intense marketing
efforts, successful product deployments in Operation Iraqi Freedom and
the expansion of our product line to address the challenge of
protecting infrastructure, our LRAD made great progress in becoming
The Sound of Force Protection(TM). LRAD systems are currently being
deployed in maritime, checkpoint, vehicular, airborne, and integrated
system applications by the U.S. Army (click
atcsd.com to read our December
15 press release announcing our $4.9 million U.S. Army order), U.S.
Marine Corps, U.S. Navy, U.S. Coast Guard, and other agencies for
waterside force protection, area denial, crowd control, clearing
buildings, and psychological ops missions. Operational feedback from
deployment in Iraq and other parts of the world has been highly
favorable. LRAD also supports applications for the Department of
Homeland Security, law enforcement agencies and customers who need to
protect critical high-value infrastructure such as buildings, bridges,
tunnels, dams, power plants, pipelines, airports, seaports,
communications towers, and oil platforms."
Gruenler continued, "We believe we are becoming the pre-eminent
acoustic provider for force and commercial asset protection, and next
generation intelligibility sound systems by providing governments,
agencies, and companies with our LRAD, NeoPlanar(R), and
SoundCluster(TM) technologies. Based on market response, product
acceptance, and increasing business opportunities, we expect continued
growth in fiscal 2005. Our early research indicates a global market
potential of well over $1 billion for hailing and warning systems,
acoustic non-lethal weapons capabilities, indoor and outdoor public
address/emergency response systems and custom engineered sound
solutions for acoustic challenges for both government and industry,
both at home and abroad. We intend to be a major force in these
emerging markets this year and for years to come."
Commenting on ATC's financial resources, Kalani Jones said, "The
$25 million committed equity financing facility (CEFF) from
Kingsbridge Capital announced December 15 (click
atcsd.com for the release),
and the recent closing of a $2 million two-year note financing,
provide ATC the financial flexibility to accept and fill further
expected large military and commercial LRAD orders."
Jones concluded, "We are very excited about our business and
technology prospects in the coming year. In fiscal 2005, we will
continue to build on the foundation of 2004 with our aggressive
strategy of Shaping the Future of Sound(R)."
HIGHLIGHTS AND ANNOUNCEMENTS FOR FISCAL AND CALENDAR 2004
-- Announced Long Range Acoustic Device (LRAD) is becoming
increasingly sought after by military and government agencies
for a range of applications and missions because of its
ability to effectively communicate over long distances,
influence behavior and determine intent.
-- Expanded ATC Government Group staff to represent our products
directly to the market rather than through licensing and
reseller agreements.
-- Awarded $1.1 million contract to deliver LRADs(TM) to U.S.
Marine Corps Units for missions in and around Fallujah, Iraq.
-- Promoted Kalani Jones to president.
-- Completed and delivered NeoPlanar(R) speakers for a major Las
Vegas venue.
-- Awarded contract to deliver LRAD devices to a U.S. Army
Stryker unit for use in missions in and around Mosul, Iraq.
-- Awarded three contracts to deliver LRAD devices to the U.S.
Navy 5th Fleet for use in and around the Basra, Iraq fueling
terminal.
-- Completed and delivered LRAD remotely operated pan/tilt units
with integrated camera to Naval Surface Warfare Center Crane
for the warship integrated force protection system.
-- Awarded contract for a prototype aircraft carrier flight deck
speaker system (SoundCluster) for the USS Stennis.
SoundCluster is being evaluated by the U.S. Navy to be a
permanent replacement for their aging 5MC flight deck sound
system.
-- Completed key NeoPlanar(R) projects on the shipyard waterfront
for the Supervisor of Shipbuilding, Bath, Maine, and inside
the new construction aircraft hangar at Naval Air Station
Brunswick, Maine for the Naval Facilities Command.
-- Launched a Government Group initiative to explore new product
concepts and market opportunities.
-- Showcased HSS at Wired Nextfest.2004.
-- Held successful showing of HSS at InfoComm2004, the largest
professional audio/visual trade show in the U.S.
-- Announced manufacturing partner, Pemstar Inc.
-- Hired Michael A. Russell as chief financial officer.
-- Showcased HSS-enabled displays at the Democratic and
Republican National Conventions.
-- Initiated worldwide deliveries of Pemstar-manufactured HSS Gen
III devices.
-- Showcased HSS in digital signage applications at the initial
Digital Retailing Expo Trade Show and Executive Summit.
-- Awarded first major commercial LRAD contract by a well-known
maritime industry company.
-- Continued strong investment in strategic product development
with a 20% increase in research and development expenditures
to $3 million.
-- Announced record fiscal 2004 revenues.
-- Secured $25 million financing commitment from Kingsbridge
Capital.
-- Closed $2 million two-year note financing.
-- Announced $4.9 million LRAD order from the U.S. Army
About American Technology Corporation
American Technology Corporation is Shaping the Future of Sound(R)
by developing, manufacturing and globally distributing its proprietary
sound technologies and products which include: the award-winning
HSS(R) (HyperSonic(R) Sound technology); LRAD(TM) (Long Range Acoustic
Device); NeoPlanar(R) planar magnetic technology and others. The
Company is establishing a strong portfolio of patents, trademarks, and
intellectual property including over 160 U.S. and foreign patents and
patent filings to date. For more information on the company and its
technologies and products please visit our web site at www.atcsd.com.
About Non-Executive Compensation
On December 22, 2004, we granted inducement stock options to
certain of our new employees. These options were granted without
stockholder approval to 6 new non-executive employees as an inducement
material to the individuals' entering into employment with our
company, and the issuances were approved by our Compensation Committee
pursuant to NASDAQ Marketplace Rule 4350(i)(1)(A)(iv). The options are
exercisable for an aggregate of 76,500 shares of common stock with an
exercise price of $10.06 per share. Each option has a five year term
and, in general, vests 25% on the first anniversary of the grant date
and then quarterly thereafter for the next 12 quarters, subject to
continued employment and other conditions.
AMERICAN TECHNOLOGY CORPORATION
Condensed Statements of Operations
(000's omitted except per share amounts)
Year Ended Sept. 30,
2004 2003
---- ----
Total revenues $5,753 $1,315
Cost of revenues 3,470 1,544
Gross profit (loss) 2,283 (229)
Operating expenses:
Selling, general and administrative 5,310 4,864
Research and development 2,989 2,493
Other - (25)
Total operating expenses 8,299 7,332
Loss from operations (6,016) (7,561)
Other income (expense):
Interest income 58 23
Interest expense (3) (687)
Other - (2)
Total other income (expense) 55 (666)
Net loss (5,960) (8,227)
Dividend requirements on convertible
preferred stock 1,365 2,409
Net loss available to common stockholders $(7,325) $(10,636)
Net loss per share of common stock - basic
and diluted $(0.37) $(0.67)
Average weighted number of common shares
outstanding 19,603,265 15,857,569
AMERICAN TECHNOLOGY CORPORATION
Condensed Balance Sheets
(000's omitted except per share amounts)
Sept. 30,
2004 2003
---- ----
ASSETS
Current Assets:
Cash $4,179 $9,850
Accounts Receivable 927 184
Inventories 651 409
Prepaid expenses and other 156 34
Total current assets 5,913 10,477
Equipment, net 453 200
Patents, net 1,279 1,067
Total assets $7,645 $11,744
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $1,300 $604
Accrued liabilities 1,129 1,379
Capital lease short-term portion 11 10
Total current liabilities 2,440 1,993
Long-Term Liabilities 12 23
Stockholders' equity 5,193 9,728
Total liabilities and stockholders' equity $7,645 $11,744
CONTACT: American Technology Corporation
Investor relations:
Robert Putnam, 858-679-3168
robert@atcsd.com
or
Media inquiries:
Don Mathias, 949-855-4520
dwmath@aol.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: HARDWARE SOFTWARE AEROSPACE/DEFENSE GOVERNMENT
MANUFACTURING EARNINGS
SOURCE: American Technology Corporation
Dec-29-2004 13:30 GMT
Symbols:
DE;TC1 US;ATCO |
