EXHIBIT 99.1
FOR IMMEDIATE RELEASE
AMERICAN TECHNOLOGY REPORTS
RECORD THIRD QUARTER REVENUES
(SAN DIEGO, CA., August 4, 2004) - American Technology Corporation (ATC) (Nasdaq: ATCO), an innovator of proprietary sound reproduction technologies, posted record revenues for the third quarter of fiscal 2004, ended June 30, 2004. Revenue for the quarter was $2.107 million compared to $0.314 million in the third quarter of fiscal 2003, an increase of 572%. The company's Government/Force Protection Group and Business Group generated revenues of $1.837 million and $0.270 million, respectively, in the third quarter. Third quarter 2004 revenues increased 41% over the most recent second quarter.
The company reported a gross profit of $1.101 million in the third quarter compared to $0.128 million for the same quarter in fiscal 2003. The company also reported a net loss of $1.390 million for the quarter, a 42% reduction from the net loss of $2.383 million for the same period in fiscal 2003. Net loss attributable to common stockholders after deducting non-cash dividends on preferred stock was $(0.09) per share compared to $(0.19) per share for the same quarter last year.
NINE MONTH RESULTS
For the nine months ended June 30, 2004, total revenue was $4.375 million compared to $0.975 million for the same period last year, a 349% increase. The company reported a gross profit of $2.015 million compared to $0.116 million for the same nine months in fiscal 2003. The company had a net loss of $3.692 million during the nine months, a 38% reduction from the net loss of $5.969 million for the same period in fiscal 2003. Net loss attributable to common stockholders after deducting non-cash dividends on preferred stock was $(0.24) per share for the first nine months of fiscal 2004 compared to $(0.51) per share for the same period last year.
MANAGEMENT COMMENTARY
"Three consecutive quarters of record revenues with expected continued revenue growth this quarter evidence the initial market traction of our industry-changing sound reproduction technologies," said Elwood G. Norris, chairman of American Technology Corporation. "While our Government/Force Protection Systems Group continues to lead the way, we are gaining momentum in our Business Group following its realignment in the June 30 quarter. We are pleased to report we have received the first HSS® Gen III units from our manufacturing partner, Pemstar. These superior devices deliver higher sound pressure level (SPL) with lower distortion in a slim, sleek profile."
"With HSS Gen III scheduled for full production this quarter, we are well positioned to further address the focused audio requirements of major customers in the rapidly developing digital signage industry," said Kalani Jones, president and COO of ATC. "While HSS has significant promise for several industries including, home theater, automotive and flat panel televisions/monitors, we are primarily focused on the digital signage industry for the following reasons:
"With $10 million to $100 million in total expenditures typically being spent for the larger digital signage programs, the need for HSS to give these systems a voice is readily apparent," added Jones. "While the structure of the larger digital signage programs in which we are engaged are complex, involve several companies, and require in-depth trials through multiple test installations, the successful completion of any one of these programs can be worth $1 - $14 million dollars each in revenue to ATC over the next six to twenty-four months."
Jones continued, "We are pleased to report Carl Gruenler and the Government/Force Protection Systems Group just completed a successful GOVSEC 2004 (The Government and Security Expo and Conference), and held favorable product demonstrations for key Department of Defense and Homeland Security executives in Washington, D.C. last week. GOVSEC 2004, as well as a two-page inside cover advertisement in the inaugural annual publication of 'The Year in Homeland Security' currently being sent to over 150,000 federal, state and local government and law enforcement officials, represent an introduction of ATC to a much wider audience. These initiatives plus numerous others, are part of our plan to establish ATC as the new leader in innovative sound reproduction solutions for force protection, emergency notification and safety systems throughout government and industry.
"ATC is supporting technology demonstration projects with the Department of Homeland Security for border protection, law enforcement for crowd and riot control, the commercial maritime industry for waterside protection, and major infrastructure force protection projects in various parts of the world. Additionally, with the recent issuance of 'urgent needs statements' by multiple services, LRAD™ is positioned as a key force protection tool to compete for end-of-fiscal-year government funding and 'program of record' contracts."
Jones concluded, "We will be giving further revenue guidance, and expect to announce a new leader of our Business Group, later this quarter."
HIGHLIGHTS AND ANNOUNCEMENTS FOR THE THIRD FISCAL QUARTER
About American Technology Corporation
American Technology Corporation is Shaping the Future of Sound® by developing, manufacturing and globally distributing its proprietary sound reproduction technologies and products which include: the award-winning HSS® (HyperSonic® Sound); LRAD™ (Long Range Acoustic Device); NeoPlanar®; PureBass® Sub-Woofer; and Stratified Field® (SFT®). The Company is establishing a strong portfolio of patents, trademarks, and intellectual property including over 140 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.
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development as well as our perception of historical trends, current market conditions, current economic data, expected future developments and other factors that we believe are appropriate under the circumstances. These statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in the forward-looking statements, including but not limited to changes in the sound reproduction industry, our ability to develop future products, technology shifts, potential technical or manufacturing difficulties that could delay products, competition, pricing pressures, the uncertainty of market acceptance of new products and services by customers, warranty or other claims, the outcome of pending or future litigation, general economic factors and other risks identified and discussed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements are based on information and management's expectations as of the date hereof. Future results may differ materially from the Company's current expectations. American Technology Corporation disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated.
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FOR FURTHER INFORMATION CONTACT:
Investor relations: | Media inquiries: |
Robert Putnam | Don Mathias |
(858) 679-3168 | (949) 855-4520 |
robert@atcsd.com | dwmath@aol.com |
AMERICAN TECHNOLOGY CORPORATION | ||||||
Condensed Balance Sheets | ||||||
(in thousands) | ||||||
June 30, 2004 | September 30, 2003 | |||||
(unaudited) | (a) | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash | $ | 5,486 | $ | 9,850 | ||
Accounts receivable | 1,387 | 184 | ||||
Inventories | 898 | 409 | ||||
Prepaid expenses and other | 255 | 34 | ||||
Total current assets | 8,026 | 10,477 | ||||
Equipment, net | 407 | 200 | ||||
Patents, net | 1,249 | 1,067 | ||||
Total assets | $ | 9,682 | $ | 11,744 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current Liabilities: | ||||||
Accounts payable | $ | 1,034 | $ | 604 | ||
Accrued liabilities | 1,231 | 1,379 | ||||
Capital lease short-term portion | 11 | 10 | ||||
Total current liabilities | 2,276 | 1,993 | ||||
Long-Term Liabilities | 15 | 23 | ||||
Stockholders' equity | 7,391 | 9,728 | ||||
Total liabilities and stockholders' equity | $ | 9,682 | $ | 11,744 | ||
(a) Derived from audited financial statements as of September 30, 2003. | ||||||
AMERICAN TECHNOLOGY CORPORATION | ||||||||||||
Condensed Statements of Operations | ||||||||||||
(in thousands except per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
For the three months ended | For the nine months ended | |||||||||||
June 30, | June 30, | |||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||
Revenues: | ||||||||||||
Product sales | $ | 2,089 | $ | 275 | $ | 4,201 | $ | 808 | ||||
Contract and license | 18 | 39 | 174 | 167 | ||||||||
Total revenues | 2,107 | 314 | 4,375 | 975 | ||||||||
Cost of revenues | 1,006 | 186 | 2,360 | 859 | ||||||||
Gross profit | 1,101 | 128 | 2,015 | 116 | ||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative | 1,614 | 1,728 | 3,766 | 3,394 | ||||||||
Research and development | 890 | 714 | 1,984 | 2,023 | ||||||||
Total operating expenses | 2,504 | 2,442 | 5,750 | 5,417 | ||||||||
Loss from operations | (1,403) | (2,314) | (3,735) | (5,301) | ||||||||
Other income (expense): | 13 | (69) | 43 | (668) | ||||||||
Net loss | (1,390) | (2,383) | (3,692) | (5,969) | ||||||||
Dividend requirements on convertible preferred stock |
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Net loss per share of common stock |
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Average weighted number of common |
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