Exhibit 99.1
AMERICAN TECHNOLOGY CORPORATION
REPORTS FISCAL THIRD QUARTER RESULTS
SAN DIEGO, California, August 9, 2005 - American Technology Corporation (NASDAQ:
ATCO) an innovator of proprietary sound reproduction technologies, today
reported results for its third fiscal quarter of 2005 ended June 30, 2005.
Revenues for the quarter were $1.39 million compared to $2.11 million for the
third quarter of fiscal 2004, a decrease of 34 percent. The company's mix of
business in the third quarter of 2005 was approximately 88% government and force
protection systems group and 12% commercial products group, compared to 87% and
13% for the three month period ended June 30, 2004. The decrease in revenues in
the third quarter resulted primarily from reduced government sales of LRAD(TM)
products compared to the same period of 2004. The company's government sales
consist of large sales to a limited number of customers and the timing of
deliveries can cause quarterly results to fluctuate widely.
The company reported a gross profit of $0.40 million for the third quarter
compared to $1.10 million for the same quarter in fiscal 2004. The company also
reported a loss from operations of $3.75 million for the quarter, compared to a
loss from operations of $1.40 million for the same period in fiscal 2004. The
third quarter's research and development expenses reflected high levels of
prototype costs, temporary staffing and other startup costs associated with
MRAD(TM) and HSS(R) H450 products. Other operating costs increased as the
company marketed more products and incurred increased public company compliance
costs.
Net loss available to common stockholders for the third quarter of 2005 was
$(0.17) per basic and diluted share, compared to $(0.09) per basic and diluted
share for the same period last year.
Revenues for the first nine months of fiscal 2005 were $8.62 million compared to
$4.38 million for the first nine months of fiscal 2004, an increase of 97
percent. For the nine month period ended June 30, 2005, the company's mix of
business was approximately 95% government and force protection systems group and
5% commercial products group, compared to 82% and 18% for first nine months of
fiscal 2004.
The company reported a gross profit of $4.65 million for the first nine months
of fiscal 2005 compared to $2.02 million for the same period in fiscal 2004. The
company also reported a loss from operations of $6.50 million for the first nine
months, compared to a loss from operations of $3.73 million for the same period
in fiscal 2004. The increased operating loss was due to temporary increases in
research and development, and increases in 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 $(0.41) per basic and
diluted share compared to $(0.24) per basic and diluted share for the same
period last year.
MANAGEMENT COMMENTARY
"We are very excited by both customers' and market reaction to our new HSS H450
and MRAD products reflected in new orders, backlog, increasing product trials
and demonstrations," said Kalani Jones, president and chief operations officer
of American Technology Corporation. "We now have an impressive line of eight
products, protected by over 320 U.S. and foreign patents and pending patent
applications, that provide a wide range of directional sound solutions for
current and prospective customers. We expect a significant reduction in research
and development expenses in the fourth quarter as we have substantially reduced
the number of employees and temporary contractors and have completed related
prototyping and startup costs."
"We remain on track for a substantial increase in fiscal 2005 revenues over
fiscal 2004, having recorded over $8.62 million in products and services in the
first nine months of the fiscal year. While our quarterly revenues will
fluctuate due to the early stages of the markets and products in which we are
involved and the timing of product deliveries, we expect a major improvement in
our operating and financial performance as we focus on sales and maintain a lean
organization."
Jones concluded, "We expect to record revenues this quarter from our growing
backlog of orders for our new HSS H450, our recently announced SoundVector(TM)
product license, and from MRAD, LRAD and NeoPlanar(R)-based products sales. We
continue to expect approximately $4 million in revenues in fiscal Q4 2005, with
significant contributions from both the government and force protection systems
group and the commercial products group."
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 320 U.S. and
foreign patents and pending patent applications 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.
AMERICAN TECHNOLOGY CORPORATION
Condensed Statements of Operations
(in thousands except per share amounts)
(unaudited)
For the three For the nine
months ended months ended
----------------- -----------------
June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Revenues:
Product sales $1,379 $2,089 $8,540 $4,201
Contract and license 15 18 80 174
-------- -------- -------- --------
Total revenues 1,394 2,107 8,620 4,375
Cost of revenues 992 1,006 3,973 2,360
-------- -------- -------- --------
Gross profit 402 1,101 4,647 2,015
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 2,879 1,614 6,969 3,766
Research and development 1,269 890 4,182 1,984
-------- -------- -------- --------
Total operating expenses 4,148 2,504 11,151 5,750
Loss from operations (3,746) (1,403) (6,504) (3,735)
-------- -------- -------- --------
Other income (expense):
Interest income (expense) (115) 13 (229) 43
Unrealized gain on derivative
revaluation 451 - 183 -
Warrant impairment expense (183) - (183) -
-------- -------- -------- --------
Total other income (expense) 153 13 (229) 43
-------- -------- -------- --------
Net loss (3,593) (1,390) (6,733) (3,692)
Dividend requirements on
convertible preferred stock - 387 1,796 1,088
-------- -------- -------- --------
Net loss available to common
stockholders $(3,593) $(1,777) $(8,529) $(4,780)
-------- -------- -------- --------
Net loss per share of common stock
- basic and diluted $(0.17) $(0.09) $(0.41) $(0.24)
-------- -------- -------- --------
Average weighted number of common
shares outstanding 21,329 19,720 20,599 19,534
-------- -------- -------- --------
AMERICAN TECHNOLOGY CORPORATION
Condensed Balance Sheets
(in thousands)
June 30, September 30,
2005 2004
(unaudited) (a)
----------- -------------
ASSETS
Current Assets:
Cash $2,370 $4,179
Accounts Receivable 507 927
Inventories 1,572 651
Prepaid expenses and other 329 156
Prepaid transaction costs 660 -
----------- -------------
Total current assets 5,438 5,913
Equipment, net 693 453
Patents, net 1,355 1,279
----------- -------------
Total assets $7,486 $7,645
----------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,121 $1,300
Accrued liabilities 1,280 1,129
Capital lease short-term portion 12 11
Derivative instrument 660 -
----------- -------------
Total current liabilities 4,073 2,440
----------- -------------
Long-Term Liabilities 1,450 12
Stockholders' equity 1,963 5,193
----------- -------------
Total liabilities and stockholders' equity $7,486 $7,645
----------- -------------
(a) Derived from the audited financial statements as of September 30, 2004
CONTACT: American Technology Corporation
Investor relations:
Robert Putnam, 858-679-3168
robert@atcsd.com
or
Media inquiries:
Don Mathias, 949-855-4520
dwmath@aol.com