Exhibit 99.1
AMERICAN TECHNOLOGY CORPORATION
REPORTS Q2 FISCAL RESULTS
COMPANY EXCEEDS LAST FISCAL YEAR'S REVENUE
IN FIRST SIX MONTHS
ANNOUNCES DEPARTURE OF CARL GRUENLER
(SAN DIEGO, CA, MAY 10, 2005) - AMERICAN TECHNOLOGY CORPORATION (ATC) (NASDAQ:
ATCO), an innovator of proprietary sound reproduction technologies, today
reported revenue for its second fiscal quarter of 2005 ended March 31, 2005.
Revenues for the quarter were $2.82 million compared to $1.49 million for the
second quarter of fiscal 2004, an increase of 89 percent. For the three-month
period ended March 31, 2005, the company's government and force protection
systems group and commercial products group generated revenues of $2.71 million
and $0.11 million, respectively, as compared to $1.04 million and $0.46 million
for the three- month period ended March 31, 2004.
The company reported a gross profit of $1.36 million for the second quarter
compared to $0.55 million for the same quarter in fiscal 2004. The company also
reported a loss from operations of $2.18 million for the quarter, compared to a
loss from operations of $1.18 million for the same period in fiscal 2004. The
loss was due mainly to increased investment in research and development with
additional personnel focused on engineering design, development capability, and
prototyping of innovative sound products and, an overall increase in selling,
general and administrative expenses mainly derived from an increase in
personnel, legal and settlement costs related to the ESI litigation (which
settled in late April 2005), and the increased costs of public company
compliance.
The conversion of all remaining preferred stock in the second quarter resulted
in the acceleration of non-cash deemed dividends for the quarter of
approximately $1.52 million or ($0.07) per share. Net loss available to common
stockholders, which includes these non-cash deemed dividends, was $(0.15) per
basic and diluted share compared to $(0.08) per basic and diluted share for the
same period last year. The company has no preferred stock outstanding and
therefore no future deemed dividends from accretion of preferred stock.
Accordingly, the company expects future quarterly net results available to
common stockholders to correspond with the company's net results.
Revenues for the first six months of fiscal 2005 were $7.23 million compared to
$2.27 million for the first six months of fiscal 2004, an increase of 219
percent. For the six month period ended March 31, 2005, the company's government
and force protection systems group and commercial products group generated
revenue of $6.93 million and $0.30 million, respectively, as compared to $1.73
million and $0.54 million for the six month period ended March 31, 2004.
The company reported a gross profit of $4.24 million for the first six months of
fiscal 2005 compared to $0.91 million for the same period in fiscal 2004. The
company also reported a loss from operations of $2.76 million for the first six
months, compared to a loss from operations of $2.33 million for the same period
in fiscal 2004 due to increased research and development and selling, general
and administrative expenses.
For the first six months of fiscal 2005, net loss available to common
stockholders including non-cash deemed dividends was $(0.24) per basic and
diluted share compared to $(0.15) per basic and diluted share for the same
period last year.
ATC also announced that Carl Gruenler is leaving the company. Mr. Gruenler was
formerly vice president of the government and force protection systems group.
Kalani Jones, president and COO of ATC, will assume Mr. Gruenler's duties in the
interim until the company locates a replacement for Mr. Gruenler.
Mr. Jones commented: "We thank Carl for his service to the company and for
helping to build a team that we believe is more than capable of executing the
government group's business plan. A.J. Ballard will continue to lead our direct
sales of LRAD(TM) and MRAD(TM) products. Ken Winter will continue to lead our
government group's NeoPlanar(R)-based products sales including the developing
relationship with Tyco/ADT Security Systems."
The company stated that Mr. Gruenler's departure does not affect the company's
financial outlook for the remainder of fiscal 2005 or beyond.
MANAGEMENT COMMENTARY
"Having shipped over $7.23 million in products and services in the first half of
the fiscal year with additional orders expected in the second half, we expect a
significant increase in revenues over last fiscal year," said Elwood G. Norris,
chairman of American Technology Corporation. "As we announced at our recent
annual meeting of shareholders, while our quarterly revenues will be uneven due
to the early stages of the markets and products in which we are involved, we
expect our annual revenues will increase year over year."
"In anticipation of expected business and revenue growth, we are continuing to
make a major investment in our future, especially in the area of product
innovation," explained Jones. "In the first six months, we invested $2.91
million in research and development of new products, an operating expense that
exceeded our operating loss for the period. Our revenue results for the first
half of the fiscal year show we are making good progress in Shaping the Future
of Sound(R) through our government and force protection systems group. This
calendar year, under the new leadership of Bruce Gray, we expect our commercial
products group will land its first large HSS(R) digital signage deal and begin
contributing substantial revenues to ATC."
Kalani Jones concluded, "With the recent additions of our NeoPlanar-based
SoundSaber(TM), and Sound Sentinel(TM) products, and our developing relationship
with Tyco/ADT Security Systems, we now have three important sound reproduction
technologies, each with multiple products that we are marketing to large target
markets. This summer, we expect to announce the first orders for MRAD (Medium
Range Acoustic Device), a smaller version of our successful LRAD (Long Range
Acoustic Device). We are also devoting significant resources to an enhanced LRAD
product with new features to address the emerging need for anti-terrorism/force
protection (AT/FP) of critical military and commercial infrastructure, and
border protection. Also this summer, we plan to introduce the first proprietary
products that combine our LRAD and HSS technologies into revolutionary high
intensity parametric devices.
This fiscal year to date, we have shipped over $8.0 million in products with
further orders expected. In the first six months of this fiscal year, we have
recorded revenues that are in excess of the revenues for all of the prior fiscal
year. With over 200 U.S. and foreign patents and patent filings, and increasing
annual revenue, American Technology Corporation is 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) products family; NeoPlanar(R)
products family, and others. The Company is establishing a strong portfolio of
patents, trademarks, and intellectual property including over 200 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
our dependence on a limited number of large orders, the unproven markets for
many of our sound technologies, changes in the sound reproduction industry, the
need for market acceptance of our sound reproduction technologies particularly
in our commercial products group, the entry of competitors in our target
markets, 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 product introductions, possible
government regulations, warranty or other claims, general economic and political
factors which influence buying decisions, particularly in our government group,
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
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AMERICAN TECHNOLOGY CORPORATION
Condensed Balance Sheets
(in thousands)
March 31, September 30,
2005 2004
(unaudited) (a)
---------- ----------
ASSETS
Current Assets:
Cash $ 6,162 $ 4,179
Accounts Receivable 495 927
Inventories 905 651
Prepaid expenses and other 186 156
Prepaid transaction costs 1,036 --
---------- ----------
Total current assets 8,784 5,913
Equipment, net 684 453
Patents, net 1,336 1,279
---------- ----------
Total assets $ 10,804 $ 7,645
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,617 $ 1,300
Accrued liabilities 1,353 1,129
Capital lease short-term portion 12 11
Derivative instrument 1,111 --
---------- ----------
Total current liabilities 4,093 2,440
---------- ----------
Long-Term Liabilities 1,360 12
Stockholders' equity 5,351 5,193
---------- ----------
Total liabilities and stockholders' equity $ 10,804 $ 7,645
========== ==========
(a) Derived from the audited financial statements as of September 30, 2004
AMERICAN TECHNOLOGY CORPORATION
Condensed Statements of Operations
(in thousands except per share amounts)
(unaudited)
For the three months ended For the six months ended
March 31, March 31,
2005 2004 2005 2004
-------- -------- -------- --------
REVENUES:
Product sales $ 2,814 $ 1,493 $ 7,161 $ 2,112
Contract and license 3 -- 65 156
-------- -------- -------- --------
Total revenues 2,817 1,493 7,226 2,268
Cost of revenues 1,454 945 2,981 1,354
Gross profit 1,363 548 4,245 914
OPERATING EXPENSES:
Selling, general and administrative 2,094 1,079 4,090 2,152
Research and development 1,452 644 2,913 1,093
Total operating expenses 3,546 1,723 7,003 3,245
Loss from operations (2,183) (1,175) (2,758) (2,331)
OTHER INCOME (EXPENSE):
Interest income (expense) (112) 10 (114) 29
Unrealized gain (loss) on changes in 682 -- (268) --
value of warrant liability
Total other income (expense) 570 10 (382) 29
NET LOSS (1,613) (1,165) (3,140) (2,302)
Dividend requirements on convertible preferred stock 1,519 407 1,796 700
Net loss available to common stockholders $ (3,132) $ (1,572) $ (4,936) $ (3,002)
Net loss per share of common stock - basic and diluted $ (0.15) $ (0.08) $ (0.24) $ (0.15)
Average weighted number of common shares outstanding 20,665 19,508 20,234 19,442