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Parametric Sound Corporation Reports First Quarter Fiscal 2013 Financial Results

SAN DIEGO, CA--(Marketwire - Feb 7, 2013) - Parametric Sound Corporation ( NASDAQ : PAMT ), a leading innovator of audio technology and solutions, today announced financial results for its first fiscal quarter ended December 31, 2012. During the first quarter, the Company continued to execute its strategy to license and commercialize its HyperSound™ directed audio IP across a wide range of consumer products.

Recent Operational Highlights:

  • Continued progress with targeted licensing partners - The Company is in various stages of discussion with leading OEMs in the video gaming, television, personal computer, home theater, casino gaming and mobile device markets and believes it is on target to achieve its licensing goals. The Company said that it is currently working on three co-development initiatives and is building prototypes.

  • Manufacturing partner selection - The Company is negotiating with prospective manufacturers that can scale rapidly to produce unit volumes to address future demand for digital signage and other product offerings. 

  • Distributor partnerships - The Company has begun training key distributors to help accelerate future demand for its HyperSound ("HSS®") digital signage products.

  • Increased demand - The Company demonstrated quarter-on-quarter revenue growth in digital signage revenues and has indications from customers of demand increases for its products.

  • Collaboration for health applications - The Company's wholly-owned subsidiary, HyperSound Health, Inc., is collaborating with San Diego based California Hearing & Balance Center to investigate health applications of the HSS technology. The Center's review of initial preference testing and additional testing indicate that HSS technology appears to provide a richer, more robust listening experience.

Management Commentary:

"We continue to expand our relationships with targeted licensees. We have signed NDAs with leaders in our target markets and now have three co-development projects underway using our HSS technology. As a result of ongoing efforts, several OEMs are allocating significant technical resources to explore the potential of bringing our technology to market," said Kenneth Potashner, executive chairman. "In addition, our digital signage distribution is moving from pilot programs to rollout at several customer projects. We believe we are at an exciting stage in the evolution of our Company. Over the next year, we expect to see the introduction of consumer products by our licensing partners utilizing our HyperSound technology and strength in our digital signage business."

First Quarter Fiscal 2013 Financial Summary:

Revenue totaled $109,000 during the first quarter of fiscal 2013, as compared to $65,000 during the same period last year, and $75,000 for the preceding quarter. The increased revenues reflect growth in digital signage product sales. Gross profit was $55,000, compared to $40,000 for the comparable prior year quarter and $25,000 for the preceding quarter.

Selling, general and administrative expenses during the first quarter of fiscal 2013 totaled $917,000, as compared to $339,000 during the same period last year and $857,000 for the preceding quarter. First quarter expense included non-cash stock based compensation from stock options of $191,000 compared to $152,000 for the comparable prior year quarter and $207,000 for the preceding quarter. Other selling, general and administrative costs increased from the prior year as the Company added executive management and increased staffing related to its licensing initiative. The Company also invested in developing digital signage distributors and new customers focusing on larger volume applications that are expected to contribute improved cash flow during the balance of fiscal 2013.

Research and development expenses totaled $392,000 during the first quarter of fiscal 2013 including stock option expense of $62,000. Comparatively research and development expenses totaled $231,000 during the first quarter of fiscal 2012 including $44,000 of stock option expense and for the preceding quarter were $437,000 including $71,000 of stock option expense. The increase from the prior year was primarily the result of adding employees to support technology development and costs associated with prototypes and testing for our licensing initiative.

Net loss for the first quarter of fiscal 2013 was $1.3 million, or $(0.20) per basic and diluted common share, as compared to a net loss of $531,000, or $(0.14) per basic and diluted common share for the same quarter last year and a net loss of $1.3 million, or $(0.20) per basic and diluted common share for the preceding quarter. The net loss for the first quarters of fiscal 2013 and 2012 and the immediate preceding quarter included $254,000, $196,000 and $278,000 of non-cash stock based compensation expense, respectively.

Cash and cash equivalents totaled $4.7 million at December 31, 2012, compared to $5.5 million at September 30, 2012.

Conference Call Information:

Members of the Company's management team will host a conference call at 5:00 P.M. ET today to discuss the Company's financial results. Investors and interested parties may participate in the call by dialing (877) 303-9855 and referring to Conference ID: 92623859. It is suggested that you dial into the conference center approximately 10 minutes prior to the scheduled start time to ensure that all participants are on line at the start of the call. The conference call is also being webcast and is available via the investor relations section of the Company's website, www.parametricsound.com.

About Parametric Sound Corporation

Parametric Sound Corporation is a pioneering innovator of directed audio solutions. With a substantial body of intellectual property, Parametric Sound is the foremost authority in the application of acoustic technology to beam sound to target a specific listening area without the ambient noise of traditional speakers. The Company is targeting its technology for new uses in consumer markets including computers, video gaming, televisions, home audio, health care and mobile devices. For more information, visit www.parametricsound.com.

Cautionary note on forward-looking statements

This press release includes forward-looking information and statements. These statements relate to future events or future financial performance and are subject to risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "feel," "estimate," "predict," "hope," the negative of such terms, expressions of optimism or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that its goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the ability to finalize agreements with major OEMs in its target markets, acceptance of existing and future products, the impact of competitive products and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

Parametric Sound Corporation
Condensed Consolidated Balance Sheets
(000's omitted except per share amount)
    December 31,   September 30,
    2012   2012
    $   $
    Cash   4,651   5,528
    Accounts receivable   15   39
    Inventories, net   431   443
    Prepaid expenses and other current assets   40   63
  Total current assets   5,137   6,073
  Property, equipment and tooling, net   155   177
  Intangible assets, net   1,301   1,315
  Total assets   6,593   7,565
    Accounts payable   182   173
    Accrued liabilities   156   140
  Total current liabilities   338   313
  Stockholders' equity   6,255   7,252
  Total liabilities and stockholders' equity   6,593   7,565
Parametric Sound Corporation  
Condensed Consolidated Statements of Operations  
(000's omitted except per share amount)  
    For the three months  
    ended December 31,  
    2012     2011  
    $     $  
Revenues   109     65  
Cost of revenues   54     25  
  Gross profit   55     40  
Operating expenses: (i)            
  Selling, general and administrative   917     339  
  Research and development   392     231  
Total operating expenses   1,309     570  
Loss from operations   (1,254 )   (530 )
Other income (expenses)   2     (1 )
Net loss   (1,252 )   (531 )
Loss per basic and diluted common share   (0.20 )   (0.14 )
Weighted average shares used to compute net loss per basic and diluted common share   6,409     3,912  
(i) includes share-based compensation expense as follows:        
    For the three months  
    ended December 31,  
    2012     2011  
Selling, general and administrative   191     152  
Research and development   62     44  
  Total share-based compensation expense   253     196