SOURCE: Parametric Sound Corporation

Parametric Sound Corporation

May 02, 2013 16:16 ET

Parametric Sound Corporation Reports Second Quarter Fiscal 2013 Financial Results

Reports Progress Across Business Sectors

SAN DIEGO, CA--(Marketwired - May 2, 2013) - Parametric Sound Corporation (NASDAQ: PAMT), a leading innovator of audio technology and solutions, today announced financial results for its second fiscal quarter ended March 31, 2013. The Company also reported progress in each of its business sectors: commercial, consumer and health applications. Discussions with companies interested in pursuing strategic options beyond licensing are progressing.

Recent Highlights:

  • Assessing strategic alternatives - As previously announced, the Company has been approached by several industry leaders in key target verticals to discuss strategic alternatives for its HyperSound™ (HSS) technology. It has engaged the investment bank Houlihan Lokey to help assess the opportunities. The Company has received a term sheet from a leader in one of its target verticals and is now undergoing due diligence. The Company has also received and is evaluating strategic inquiries from additional parties.

  • Licensing progress - The Company has received substantial licensing proposals for its technology but is first assessing broader strategic opportunities.

  • Progress with commercial pilot projects - The Company grew its commercial product pipeline and several pilots are expanding based on successful results. Global demand is expected to produce broad-based rollouts during the balance of 2013 and 2014.

  • Bolstered intellectual property with new patent application - The Company filed for patent protection on novel new emitter technology that it believes will expand the applications for its directional and 3D audio systems. The new technology allows for performance enhancements and costs savings, as well as the ability to more easily shape various form factors to fit the requirements of multiple new applications for directed audio. 

  • Strategic relationship with manufacturing and distribution partner - The Company signed a memorandum of understanding to enter into a strategic relationship with Shanghai Industrial Investment Group (SIIG) and Aviation Industry Corporation's (AVIC) US trade representative, Optek Electronics. The MOU defines four key areas of focus that include a licensing agreement, a manufacturing agreement, a joint product development agreement, and the establishment of a joint venture to address the Chinese market across business sectors.

  • Collaboration proceeding to investigate health applications - The Company's collaboration with the California Hearing & Balance Center is progressing as the Company investigates health applications of its technology. Preference testing using the Company's HSS sound technology side-by-side with traditional audio continues to indicate that a broad range of listeners identify improved clarity and comprehension of HSS. The Company believes its technology may provide benefits by delivering with clarity the frequencies important in speech recognition, thus improving the listening experience of those with normal hearing, and by providing amplification for those with some hearing loss without the need for headphones.

Management Commentary:

"We have received a term sheet and have entered into due diligence with a market leader in one of our target verticals. We have also received additional strategic inquiries from other parties," said Kenneth Potashner, executive chairman. "We have demonstrated solid operational progress with our pilot commercial projects. We have been awarded a volume rollout in one of our initial pilots, have been asked to expand several other pilots, and are also actively initiating new relationships. We continue to collect data relative to the benefits that our technology can bring to those with hearing challenges and are optimistic on the potential for this application."

Second Quarter Fiscal 2013 Financial Summary:

Revenue totaled $155,000 during the second quarter of fiscal 2013, as compared to $60,000 during the same period last year, reflecting an increase in commercial product sales. Order backlog was $30,000 at March 31, 2013. Gross profit was $76,000 compared to $33,000 for the prior year.

Selling, general and administrative expenses during the second quarter of fiscal 2013 totaled $1.4 million as compared to $726,000 during the same period last year. Second quarter expense included non-cash stock based compensation from stock options of $695,000 compared to $284,000 for the prior year. Other selling, general and administrative costs increased as the Company added executive management and increased staffing related to its licensing initiative. The Company also invested in developing commercial distributors and new customers focusing on larger volume applications that are expected to contribute to improved cash flow during fiscal 2013.

Research and development expenses totaled $588,000 during the second quarter of fiscal 2013 including stock option expense of $95,000. Research and development expenses during the second quarter of fiscal 2012 were $267,000 including $79,000 of stock option expense. The increase was primarily the result of adding employees to support technology development and costs associated with prototypes and testing for licensing initiatives.

Net loss for the second quarter of fiscal 2013 was $2.0 million, or $(0.30) per basic and diluted common share, as compared to a net loss of $961,000, or $(0.22) per basic and diluted common share for the same quarter last year. The net loss for the second quarters of fiscal 2013 and 2012 included $790,000 and $363,000 of non-cash stock based compensation expense, respectively.

Cash and cash equivalents totaled $3.8 million at March 31, 2013, compared to $4.6 million at December 31, 2012. Subsequent to March 31, 2013 the Company received $439,000 in cash from the exercise of stock purchase warrants.

Conference Call Information:

Members of the Company's management team will host a conference call at 5:00 P.M. ET today to discuss the Company's financial results. Investors and interested parties may participate in the call by dialing (877) 303-9855 and referring to Conference ID: 34032818. It is suggested that you dial into the conference center approximately 10 minutes prior to the scheduled start time to ensure that all participants are on line at the start of the call. The conference call is also being webcast and is available via the investor relations section of the Company's website, www.parametricsound.com. A replay of the webcast will be archived on the Company's website for 60 days.

About Parametric Sound Corporation

Parametric Sound Corporation is a pioneering innovator of directed audio solutions. With a substantial body of intellectual property, Parametric Sound is the foremost authority in the application of acoustic technology to beam sound to target a specific listening area without the ambient noise of traditional speakers. Distinct from surround sound, HyperSound™ immerses listeners in a robust 3D audio experience from just two speakers. The Company's disruptive technology is being marketed to three global market sectors: Consumer Markets -- for PCs, gaming, TVs, home theater and handhelds, Commercial Markets -- for digital signage, kiosks and retail stores, and Health Care -- for an out-of-ear solution being developed for the hearing impaired. For more information, visit www.parametricsound.com.

Cautionary note on forward-looking statements

This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that its goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in evaluating, pursuing and finalizing strategic discussions including, but not limited to, licensing, mergers, joint ventures, spin-offs or other corporate transactions, acceptance of existing and future products regardless of initial pilot successes or positive end-user feedback, the difficulty of commercializing and protecting new technology such as the Company's new emitter technology, the impact of competitive products and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. The Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.

 
Parametric Sound Corporation
Condensed Consolidated Balance Sheets
(000's omitted except per share amount)
(unaudited)
    March 31,   September 30,
    2013   2012
    $   $
ASSETS        
  Current        
    Cash   3,823   5,528
    Accounts receivable   107   39
    Inventories, net   399   443
    Prepaid expenses and other current assets   141   63
  Total current assets   4,470   6,073
  Property, equipment and tooling, net   286   177
  Intangible assets, net   1,351   1,315
  Total assets   6,107   7,565
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
  Current        
    Accounts payable   327   173
    Accrued liabilities   105   140
    Capital lease obligation - current   37   -
  Total current liabilities   469   313
  Long-term capital lease obligation   114   -
  Total liabilities   583   313
  Stockholders' equity   5,524   7,252
  Total liabilities and stockholders' equity   6,107   7,565
         
         
                     
Parametric Sound Corporation
Condensed Consolidated Statements of Operations
(000's omitted except per share amount)
(unaudited)
           
    For the three months     For the six months
    ended March 31,     ended March 31,
    2013     2012     2013   2012
    $     $     $   $
Revenues   155     60     264   124
Cost of revenues   79     27     133   52
  Gross profit   76     33     131   72
Operating expenses: (i)                    
  Selling, general and administrative   1,444     726     2,360   1,065
  Research and development   588     267     980   498
Total operating expenses   2,032     993     3,340   1,563
Loss from operations   (1,956 )   (960 )   (3,209)   (1,491)
Other income (expenses)   -     (1 )   2   (2)
Net loss   (1,956 )   (961 )   (3,207)   (1,493)
Loss per basic and diluted common share   (0.30 )   (0.22 )   (0.50)   (0.36)
                     
Weighted average shares used to compute net loss per basic and diluted common share   6,435     4,386     6,422   4,148
                     
(i) includes share-based compensation expense as follows:
           
    For the three months     For the three months
    ended March 31,     ended March 31,
    2013     2012     2013   2012
Selling, general and administrative   695     284     886   437
Research and development   95     79     158   123
  Total share-based compensation expense   790     363     1,044   560
                       

Contact Information

  • CONTACT:
    Tracy Neumann
    888-HSS-2150, Ext. 509
    tneumann@parametricsound.com

    INVESTOR RELATIONS CONTACT:
    Dave Mossberg
    Three Part Advisors, LLC
    (817) 310-0051