SOURCE: The Guitammer Company

May 15, 2014 16:30 ET

The Guitammer Company Announces First Quarter 2014 Results

WESTERVILLE, OH--(Marketwired - May 15, 2014) - The Guitammer Company (OTCQB: GTMM) (OTCBB: GTMM), a leader in tactile and haptic broadcast technology and creator of the award-winning line of ButtKicker®-brand low frequency audio transducers that provide an immersive entertainment experience for audiences, announced today its results for the first quarter ended March 31, 2014.

2014 First Quarter Financial Highlights and Selected Recent Developments

  • Revenue was $311,052 for the three months ended March 31, 2014, compared to revenue of $525,427 for the three months ended March 31, 2013, a decrease of 40.8%.

  • The Company's revenues decreased primarily due to its decision to allocate a relatively greater amount of its resources from working capital related to deliveries of its consumer product to the development of its patented broadcast technology. The Company's backlog at March 31, 2014 was approximately $100,000 compared to virtually no backorders at March 31, 2013 and December 31, 2013, respectively.

  • Gross margin increased to 46.2% for the three months ended March 31, 2014, compared to 41.6% for the three months ended March 31, 2013.

  • Guitammer has continued the development and deployment of its haptic-tactile broadcast technology for live sports broadcasts with a series of successful integration and broadcast tests on a regional sports network with a U.S. major sports franchise. The Company's original live broadcast success was in the fourth quarter of 2013 with the National Hot Rod Association's broadcast on ESPN2. 

  • The Company announced it has engaged Noble Financial Capital Markets as its corporate advisor. Noble is a research-driven investment bank focused on emerging growth companies in the energy, healthcare, technology and media & entertainment sectors. In its advisory capacity, Noble will render strategic advice and assistance in connection with the Company's current and future capital structure as well as assist in raising additional capital when required.

Commenting on the Company's results, Mark Luden, President of Guitammer said, "Last year and during the first quarter of 2014, we invested considerable capital resources implementing and commercializing our patented haptic tactile broadcast technology for the ESPN2 broadcasts of the National Hot Rod Association (NHRA) proving that we have the ability to bring the actual feel of live sporting events to sports fans while watching in the comfort of their own homes. We have continued the development and deployment of our broadcast technology with the completion of a series of successful integration and broadcast tests with a regional sports network and a major U.S. sports franchise. We expect to have further announcements about this important development in the coming months. Because of our focus on the broadcast technology, the Company experienced a shortage of available working capital required to fund certain inventory requirements related to its existing consumer products business and this had a corresponding negative effect on revenues for the quarter. However, we firmly believe that the further development and implementation of our broadcast technology will produce the greatest amount of long term value for our shareholders and will help us to secure the financing needed to fully execute our business plan." 

About The Guitammer Company
The Guitammer Company, based in Westerville, Ohio, is a leader in low frequency sound products and broadcast technology. The Guitammer Company's patented broadcast technology "ButtKicker Live!® or "4D Sports powered by ButtKicker" enables the excitement, impact and feeling of live sporting events to be broadcast along with the sound and video, and puts the viewer into the action, whether at home or at the event. "4D Sports powered by ButtKicker" technology is available for cable, satellite, fiber optic, IPTV and over-the-air broadcasts. For more information see www.guitammer.com/4Dsports. ButtKicker® and ButtKicker Live!® are registered trademarks of The Guitammer Company. 

The Company's innovative and award-winning line of patented ButtKicker-brand low frequency audio transducers let users feel low-frequency sound (bass). ButtKicker brand products are used around the world by leading entertainment and theater companies such as AMC Theatres, Alamo Drafthouse, IMAX, Disney and Lumiere Pavilions in movie theaters and attractions; by world-famous musicians; and in home theaters, by consumers for video games, simulators and car audio.

ButtKicker brand products are distributed by Pearl Drums for musicians under the trade name, "Pearl's Throne Thumper by ButtKicker". ButtKicker brand products' patented design makes them musically accurate, powerful and virtually indestructible. 

For additional information on The Guitammer Company and detailed product information, visit www.guitammer.com and www.shakemycouch.com . To like our Facebook page or follow us on Twitter for company updates, visit www.facebook.com/Guitammer and www.twitter.com/Guitammer

Safe Harbor:
This letter contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.

- financial tables follow -

   
THE GUITAMMER COMPANY
CONSOLIDATED BALANCE SHEETS
 
  (unaudited)        
  March 31,     December 31,  
  2014     2013  
ASSETS              
Current assets              
  Cash and cash equivalents $ 34,815     $ 140,231  
  Accounts receivable, net   130,780       62,505  
  Inventory   419,936       443,761  
  Prepaid expenses and other current assets   4,971       6,141  
    Total current assets   590,502       652,638  
               
Property and equipment, net   116,662       127,186  
Deferred financing costs, net   45,116       38,335  
Other assets, net   19,667       21,472  
Total Assets $ 771,947     $ 839,631  
               
LIABILITIES AND STOCKHOLDERS' DEFICIT              
Current liabilities              
  Line of credit $ 39,523     $ 39,523  
  Accounts payable   647,522       533,438  
  Accrued expenses   383,119       376,188  
  Deferred revenue   56,284       68,823  
  Current portion of long-term debt - related parties   604,530       584,352  
  Current portion of long-term debt - non-related parties   561,467       559,987  
                 
    Total current liabilities   2,292,445       2,162,311  
               
Long-term debt, net of current portion - related parties   332,928       250,000  
Long-term debt, net of current portion - non-related parties   279,219       302,479  
Total Liabilities   2,904,592       2,714,790  
               
Commitments   -       -  
               
Stockholders' deficit              
  Common stock, par value of $.001, 150,000,000 shares authorized; 78,092,748 and 77,905,248 shares issued, and outstanding at March 31, 2014 and December 31, 2013, respectively   78,093       77,906  
  Additional paid-in capital   7,350,994       7,253,730  
  Accumulated deficit   (9,561,732 )     (9,206,795 )
               
Total Stockholders' deficit   (2,132,645 )     (1,875,159 )
               
               
Total Liabilities and Stockholders' deficit $ 771,947     $ 839,631  
   
   
 
THE GUITAMMER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
    For the Three Months Ended  
    March 31,  
    2014     2013  
Total revenue   $ 311,052     $ 525,427  
                 
Cost of goods Sold     167,463       306,618  
    Gross profit     143,589       218,809  
                 
Operating expenses                
  General and Administrative     435,545       439,425  
  Research and Development     10,782       1,293  
      446,327       440,718  
                 
    Loss from Operations     (302,738 )     (221,909 )
                 
Other Income                
  Interest expense     (52,200 )     (53,834 )
  Interest income     1       6  
      (52,199 )     (53,828 )
                 
Loss before provision for                
    Income taxes     (354,937 )     (275,737 )
                 
Provision for Income taxes     -       -  
    Net Loss   $ (354,937 )   $ (275,737 )
                 
Basic and diluted loss per share   $ (0.005 )   $ (0.004 )
                 
Basic and diluted weighted average common shares outstanding     78,028,165       69,219,763  
                 
                 

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