EXHIBIT 99.1
AMERICAN TECHNOLOGY FORECASTS OVER $4 MILLION
IN REVENUES FOR QUARTER ENDING DECEMBER 31, 2004
COMPANY ALSO REPORTS RECORD REVENUE FOR FISCAL 2004
(SAN DIEGO, CA, DECEMBER 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 http://www.atcsd.com/PressReleases/12_15_04A.html 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.
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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 http://www.atcsd.com/PressReleases/12_15_04B.html 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
o 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.
o Expanded ATC Government Group staff to represent our products
directly to the market rather than through licensing and reseller
agreements.
o Awarded $1.1 million contract to deliver LRADs(TM) to U.S. Marine
Corps Units for missions in and around Fallujah, Iraq.
o Promoted Kalani Jones to president.
o Completed and delivered NeoPlanar(R) speakers for a major Las
Vegas venue.
o Awarded contract to deliver LRAD devices to a U.S. Army Stryker
unit for use in missions in and around Mosul, Iraq.
o Awarded three contracts to deliver LRAD devices to the U.S. Navy
5th Fleet for use in and around the Basra, Iraq fueling terminal.
o 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.
o 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.
o 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.
o Launched a Government Group initiative to explore new product
concepts and market opportunities.
o Showcased HSS at Wired Nextfest.2004.
o Held successful showing of HSS at InfoComm2004, the largest
professional audio/visual trade show in the U.S.
o Announced manufacturing partner, Pemstar Inc.
o Hired Michael A. Russell as chief financial officer.
o Showcased HSS-enabled displays at the Democratic and Republican
National Conventions.
o Initiated worldwide deliveries of Pemstar-manufactured HSS Gen III
devices.
o Showcased HSS in digital signage applications at the initial
Digital Retailing Expo Trade Show and Executive Summit.
o Awarded first major commercial LRAD contract by a well-known
maritime industry company.
o Continued strong investment in strategic product development with
a 20% increase in research and development expenditures to $3
million.
o Announced record fiscal 2004 revenues.
o Secured $25 million financing commitment from Kingsbridge Capital.
o Closed $2 million two-year note financing.
o Announced $4.9 million LRAD order from the U.S. Army
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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.
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, the need for market acceptance of
our sound reproduction technologies, entry of competitors in the sound
reproduction market, the possibility our intellectual property protections will
not prevent others from marketing products similar to or competitive with our
products, our ability to develop future products which maintain a competitive
advantage over competing products, pricing pressures, technology shifts,
potential technical or manufacturing difficulties that could delay products,
possible government regulations, warranty or other claims, the outcome of
pending or future litigation, general economic and political factors which
influence buying decisions, and other risks identified and discussed in the our
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 our 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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AMERICAN TECHNOLOGY CORPORATION
Condensed Statements of Operations
(000's omitted except per share amounts)
Year Ended Sept. 30,
2004 2003
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Total revenues $ 5,753 $ 1,315
Cost of revenues 3,470 1,544
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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
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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
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Total current assets 5,913 10,477
Equipment, net 453 200
Patents, net 1,279 1,067
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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
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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
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