EXHIBIT 99.1
AMERICAN TECHNOLOGY CORPORATION
REPORTS RECORD QUARTERLY REVENUES
COMPANY ANNOUNCES NEW LRAD(TM) ORDERS,
FORECASTS RECORD REVENUES FOR FISCAL 2005
(SAN DIEGO, CA, FEBRUARY 11, 2005) - AMERICAN TECHNOLOGY CORPORATION (ATC)
(NASDAQ: ATCO), an innovator of proprietary sound reproduction technologies,
today reported record quarterly revenues for its first fiscal quarter of 2005
ended December 31, 2004. Revenues for the quarter were $4.41 million compared to
$0.77 million in the first quarter of fiscal 2004, an increase of 469 percent.
The company's government/force protection systems group and business group
generated revenues of $4.22 million and $0.19 million, respectively, in the
first quarter.
The company reported a gross profit of $2.88 million in the first quarter
compared to $0.36 million for the same quarter in fiscal 2004. The company also
reported a loss from operations of $0.58 million for the quarter, compared to a
loss from operations of $1.15 million for the same period in fiscal 2004.
Due to a $0.95 million non-cash derivative revaluation expense related to an
increase in the fair value of a warrant issued in connection with the company's
committed equity financing facility (CEFF) announced in December 2004, net loss
available to common stockholders was $1.53 million compared to $1.14 million for
the same quarter last year. After deducting non-cash dividends on preferred
stock, net loss available to common stockholders was $(0.09) per basic or
diluted share compared to $(0.07) per basic or diluted share for the same period
last year. The related warrant liability of $1.8 million, as may be further
revalued, is expected to be re-classified as equity, upon the effectiveness of
the registration statement filed in connection with the CEFF or upon exercise of
the warrant.
MANAGEMENT COMMENTARY
"Growing LRAD(TM) orders for expanding military, government and commercial
applications contributed to record first quarter revenues," said Elwood G.
Norris, chairman of American Technology Corporation. "In the first quarter, we
reduced our operating losses compared to the first quarter of fiscal 2004 while
increasing our commitment to research and development by 225 percent. Due to the
growing demand for our proprietary sound reproduction technologies from
government/military and commercial customers of our government and force
protection systems group, we are projecting a substantial increase in fiscal
2005 revenues having already surpassed fiscal 2004 revenues midway through our
second fiscal quarter."
"The investment we made last year in improving the reliability of our
proprietary sound reproduction products, focusing our sales and marketing
efforts, and outsourcing manufacturing to enable us to respond quickly to volume
orders, is producing results," explained Kalani Jones, president and COO of ATC.
"These results are now evident in our government and force protection systems
group. Our business group is making progress and is expected to increase
revenues in the fiscal third and fourth quarters this year though orders from
digital signage customers in Asia, Europe and North America."
Announcing recent LRAD orders, ATC's vice president of government and force
protection systems, Carl Gruenler, said, "Beyond the $4.9 million U.S. Army
order we were awarded in December, we recently received two LRAD orders totaling
$631,000. The first is a $286,000 contract from the U.S. Navy for delivery of
LRADs with Phraselators from VoxTec (an Annapolis, Maryland-based company, and a
division of Marine Acoustics, Inc (MAI)) for new DDG Destroyers under
construction at Bath Iron Works in Bath, Maine and Northrop Grumman Ship Systems
located in Pascagoula, Mississippi. These LRADs will be used to determine intent
in host nation languages while at sea, during transits, and at anchor or
pierside. The second is a $345,000 contract from the U.S. Army Rapid Equipping
Force for deployment to Operation Iraqi Freedom. These LRADs will be used for
multiple missions including crowd control, area denial, clearing buildings and
humanitarian operations."
LRAD is a proprietary long-range hailing and warning, directed acoustic device
designed to communicate with authority and exceptionally high intelligibility in
a 15-30(degree) beam. LRAD is used to issue verbal challenges with instructions
in excess of 500 hundred yards in a focused beam with a follow up warning tone
to influence behavior or determine intent. Effective ranges of over 1,000 yards
are being reported from United States Navy and Coast Guard vessels stationed in
the Persian Gulf.
Gruenler added, "These orders are indicative of the growing success of LRADs as
significant contributors to the force protection of the U.S. Marine Corps, U.S.
Navy, U.S. Coast Guard, and other agencies for multiple applications and
missions. We continue to receive positive operational feedback from deployment
in Iraq and other parts of the world."
Gruenler concluded, "Governments, agencies and companies are becoming
increasingly aware of the capabilities of our LRAD and NeoPlanar(R) technologies
and products for both force and commercial asset protection and next generation
intelligibility. Our group has a substantial inventory of business opportunities
for hailing and warning systems, acoustic non-lethal weapons capabilities,
indoor and outdoor public address and mass notification systems, plus custom
engineered sound solutions for government and industry, in the U.S. and
internationally."
Kalani Jones concluded, "While we expect to achieve record revenues this fiscal
year through orders for LRAD, HSS(R), NeoPlanar, SoundCluster(TM) and other
proprietary sound technologies and products, each quarter's results will be
dependent upon the timing of when orders are received and fulfilled. This
quarter to date, we have shipped over $2.0 million in products with further
orders expected to be received and shipped before March 31. In fiscal 2005, we
are devoting significant resources to bring to market new devices including
smaller LRADs with new features. We are also planning to introduce proprietary
products that, for the first time, combine our LRAD and HSS technologies into
revolutionary high intensity parametric devices which we expect will generate
substantial business interest and further enhance our industry leadership in
Shaping the Future of Sound(R)."
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),
SoundCluster(TM) 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.
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.
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 Statements of Operations
(in thousands except per share amounts)
(unaudited)
For the three months ended
December 31,
---------------------------
2004 2003
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REVENUES:
Product sales $ 4,347 $ 619
Contract and license 62 156
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Total revenues 4,409 775
Cost of revenues 1,528 409
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GROSS PROFIT 2,881 366
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OPERATING EXPENSES:
Selling, general and administrative 1,995 1,072
Research and development 1,461 449
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Total operating expenses 3,456 1,521
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Loss from operations (575) (1,155)
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OTHER INCOME (EXPENSE):
Interest income (expense) (2) 19
Unrealized loss on changes in value of warrant liability (950) --
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Total other income (expense) (952) 19
------------ ------------
NET LOSS (1,527) (1,136)
Dividend requirements on convertible preferred stock 278 294
------------ ------------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (1,805) $ (1,430)
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NET LOSS PER SHARE OF COMMON STOCK - BASIC AND DILUTED $ (0.09) $ (0.07)
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AVERAGE WEIGHTED NUMBER OF COMMON SHARES OUTSTANDING 19,813 19,377
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AMERICAN TECHNOLOGY CORPORATION
Condensed Balance Sheets
(in thousands)
December 31, September 30,
2004 2004
(unaudited) (a)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash $ 3,829 $ 4,179
Accounts Receivable 3,602 927
Inventories 923 651
Prepaid expenses and other 192 156
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TOTAL CURRENT ASSETS 8,546 5,913
EQUIPMENT, net 585 453
PATENTS, net 1,296 1,279
OTHER 898 --
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TOTAL ASSETS $ 11,325 $ 7,645
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,003 $ 1,300
Accrued liabilities 1,501 1,129
Capital lease short-term portion 11 11
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TOTAL CURRENT LIABILITIES 3,515 2,440
----------- -----------
LONG-TERM LIABILITIES 3,067 12
STOCKHOLDERS' EQUITY 4,743 5,193
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,325 $ 7,645
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(a) Derived from the audited financial statements as of September 30, 2004