WESTERVILLE, OH--(Marketwired - May 15, 2013) - The Guitammer Company (
2013 First Quarter Financial Highlights and Selected Recent Developments
- Net loss decreased by 6% for the three months ended March 31, 2013 compared to the three months ended March 31, 2012.
- Total current assets increased 5.9%, or $51,034, to approximately $912,000, as of March 31, 2013 compared to March 31, 2012, attributed primarily to the increase in cash which resulted from the sale of the Company's stock and warrants in March 2013.
- Net increase in cash and cash equivalents of $123,001, as of March 31, 2013 compared to March 31, 2012, primarily consisting of net cash provided by financing activities of $230,217 partially offset by net cash used in operating activities of $107,216.
- For the three months ended March 31, 2013, revenue totaled $525,427 compared to revenue of $729,137 for the same period a year earlier.
- $250,000 of equity investment received from a new Private Placement investor in the first quarter. An additional $515,000 from previous Private Placement investors received subsequent to the quarter end.
- Expanded footprint in China with the installation of eighth ButtKicker "4D" theater system for Lumière Pavilions in Beijing.
- Entered into a Joint Marketing Agreement with Digital Cinema Destinations Corp. All 300+ stadium seats in one of the largest 3D auditoriums at their Solon Cinema 16 location will be ButtKicker enabled as the initial installation.
- Joined D-Tools Manufacturer Vantage Point (MVP) Program.
- Partnered with Warner Brothers for this Summer's Release of "Warner Bros. Pictures and Legendary Pictures Pacific Rim" by Oscar® nominee director Guillermo del Toro.
- Widened live in-arena game testing of the ButtKicker Live! broadcast technology with major sports league to include two potential broadcast partners.
- Began in-depth discussions with additional potential sports league for ButtKicker Live!
- Joined Nationwide, the largest buying and marketing organization in North America, with more than 3,500 members operating more than 10,000 store fronts.
- ButtKicker products were a Nationwide "Featured SOLUTION" at their Primetime! Buying Show in Las Vegas.
- Hired industry veteran National Sales Manager to lead domestic home theater sales initiatives.
Mark Luden, President of Guitammer, stated, "We started off 2013 by significantly raising the visibility of our ButtKicker® technology by strategically partnering with established market leaders. This not only raised immediate brand awareness for our products within the entertainment industry, but also positions us for growth moving forward. In addition, we welcomed our new National Sales Manager, Home Theater, to oversee home theater sales of ButtKicker brand products and generate an increase in domestic sales volumes."
"Furthermore, we increased our footprint of both international and domestic movie theaters, a trend we expect to continue," added Luden. "We expect to launch direct to consumer sales with one or more of our theater operators by the end of Q3 to help position us for Q4 consumer holiday sales.
"Importantly, we continued to progress with our live in-game testing of the ButtKicker Live! broadcast technology and expanded our efforts to include an additional sports partner to help us begin commercializing this technology, potentially this year."
Addressing the decrease in Q1 revenues Luden stated, "The decrease in revenues is primarily attributed to the following factors: the first quarter of 2012 had a sizeable stocking order from an OEM customer and the first quarter of 2013 did not have a stocking order of that magnitude; the first quarter of 2012 had more backorders that had to be fulfilled than the first quarter of 2013; and the economic slowdown in Europe caused certain restocking orders from established distributors to be delayed. However, our net loss decreased by 6%, and our EBITDA loss decreased by approximately $13,845 in the first quarter of 2013, compared to the first quarter of 2012. We do expect to see domestic sales volumes increase throughout the remainder of 2013."
"We believe that our operations, exclusive of any research and development costs, can become operationally cash flow positive on an ongoing basis for our core products business by the end of the fourth quarter of 2013 as we continue securing additional capital," stated Richard Conn, Chief Financial Officer of Guitammer. "With this additional financing, we anticipate the purchase of adequate inventory to meet existing sales demand and to be able to increase sales through increased sales and marketing activities as previously described."
About The Guitammer Company
The Guitammer Company, based in Westerville, Ohio, is a leader in low frequency sound products and technology. Its innovative and award-winning line of patented ButtKicker-brand low frequency audio transducers let users feel low-frequency sound (bass). ButtKicker brand products are used around the world by leading entertainment and theater companies such as Alamo Drafthouse, IMAX, Disney and Lumiere Pavilions in movie theaters and attractions; by world-famous musicians; and in home theaters, by consumers for video games, simulators and car audio. ButtKicker brand products are distributed by Pearl Drums for musicians under the trade name, "Pearl's Throne Thumper by ButtKicker." ButtKicker brand products' patented design makes them musically accurate, powerful and virtually indestructible.
The Guitammer Company's newly patented broadcast technology, ButtKicker LIVE! enables the excitement, impact and feeling of sporting events to broadcast along with the sound and video. ButtKicker LIVE! puts you into the action, whether you're at home or at the event. ButtKicker Live! technology is available for cable, satellite, fiber optic, IPTV and over-the-air broadcast and has been successfully tested with several major content (sports) providers. ButtKicker® and ButtKicker Live!® are registered trademarks of The Guitammer Company.
This letter contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.
- Financial tables follow -
|THE GUITAMMER COMPANY|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|For the Three Months Ended|
|Cost of goods sold||306,618||422,441|
|General and administrative||439,425||491,352|
|Research and development||1,293||51,348|
|Loss from operations||(221,909||)||(236,004||)|
|Other income (expense)|
|Loss before provision for income taxes||(275,737||)||(293,740||)|
|Provision for income taxes||-||-|
|Basic and diluted loss per share||$||(0.004||)||$||(0.005||)|
|Basic and diluted weighted average common shares outstanding||69,219,763||60,058,179|
|See accompanying Notes to Condensed Consolidated Financial Statements|
|THE GUITAMMER COMPANY|
|CONSOLIDATED BALANCE SHEETS|
|March 31,||December 31,|
|Cash and cash equivalents||$||202,137||$||79,136|
|Accounts receivable, net||86,797||21,011|
|Prepaid expenses and other current assets||2,073||131,639|
|Total current assets||912,071||861,037|
|Property and equipment, net||11,097||12,208|
|Deferred financing costs, net||49,975||58,336|
|LIABILITIES AND STOCKHOLDERS' DEFICIT|
|Line of credit||$||39,523||$||39,523|
|Current portion of long-term debt - related parties||801,097||517,004|
|Current portion of long-term debt - non-related parties||555,519||554,124|
|Total current liabilities||2,695,895||2,441,655|
|Long-term debt, net of current portion - related parties||33,255||317,348|
|Long-term debt, net of current portion - non related parties||369,541||391,018|
|Common stock, par value of $.001, 150,000,000 shares authorized; 70,155,704 and 68,779,482 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively|| |
|Additional paid-in capital||6,006,917||5,641,492|
|Total Stockholders' deficit||(2,098,595||)||(2,189,660||)|
|Total Liabilities and Stockholders' deficit||$||1,000,096||$||960,361|
|See accompanying Notes to Condensed Consolidated Financial Statements.|
The following table sets forth EBITDA for the Company, which is a non-GAAP measurement. EBITDA is defined as earnings (loss) before net interest expense, taxes, depreciation and amortization. Although EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles ("GAAP"), management believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate meaningful comparison of the results in the current period to those in prior periods and future periods. However, investors should not consider this measure in isolation or as a substitute for net income, operating income, or any other measure for determining the Company's operating performance that is calculated in accordance with GAAP. A reconciliation of EBITDA to the most comparable GAAP financial measure, net loss, follows:
|For the three months ended:|
|March 31,||March 31,|
|Depreciation and Amortization||2,938||3,194|