SOURCE: The Guitammer Company

The Guitammer Company

May 14, 2015 16:15 ET

The Guitammer Company Announces First Quarter 2015 Financial Results

Sales Increase 70%, Gross Margins Remain at 46%

Cinema Sales Increase by More Than 640 Seats; Including the 10th Dolby Cinema at AMC Prime Location and the First Regal Entertainment "RPX" Installation

Haptic-Tactile Broadcast Pilot With San Jose Sharks and Comcast SportsNet CA Well Received by Fans, Players and Media

WESTERVILLE, OH--(Marketwired - May 14, 2015) - The Guitammer Company (OTCQB: GTMM), the leader in haptic-tactile 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, 2015.

2015 First Quarter Financial Highlights and Selected Recent Developments

  • Revenue increased $219,296 or 70.5%, to $530,348 for the three months ended March 31, 2015, compared to revenue of $311,052 for the three months ended March 31, 2014.
  • Gross margin percentage remained at 46% for the three months ended March 31, 2015; the same as the period ended March 31, 2014.
  • More than 640 "4D powered by ButtKicker" seats were deployed: A 230 seat "Lumiere Digital Cinema" at Huaian Central New Asia International Shopping Plaza, PRC; a 230 seat Dolby Cinema at AMC Prime - Hawthorn 12, Vernon Hills, Ill; and 180 "ButtKicker Enhanced" seats at Regal Entertainments "Regal Premium Experience" [RPX] at Moorestown Mall 12, NJ.
  • Raised $500,000 in Series A Preferred Stock. The Series A may be converted by the Company, with certain provisions into Common Stock at $0.15 per share; the use of funds was for inventory and general corporate purposes.

Commenting regarding the Quarter's results, Richard Conn, CFO of Guitammer, said, "We're pleased with the improvement in our sales numbers for the quarter, the growth of our cinema installations, and most importantly, that our first Regal Entertainment 'RPX' is now open and receiving very favorable early reviews. We expect to announce more about this cinema shortly. We expect continued top-line revenue growth and growth in cinema installations throughout the remainder of 2015."

"Our efforts to develop, patent, deploy, standardize and monetize our haptic-tactile broadcast technology so that fans at home and even in the arena can have a more compelling and immersive experience continued briskly during the first quarter of 2015. We've made tangible progress in all areas of the broadcast technology and expect to have more news to announce in the coming months," said Mark A. Luden, President of Guitammer.

About The Guitammer Company
The Guitammer Company, based in Westerville, Ohio, is a leader in low frequency audio products and broadcast technology. The Guitammer Company's patented and patent pending broadcast technologies, "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 used by Comcast SportsNet CA for all of the 2014/15 San Jose Sharks SAP Center home games. The technology is available for cable, satellite, fiber optic, IPTV and over-the-air broadcasts. For more information see www.guitammer.com/4Dsports.

The Company's innovative and award-winning line of patented ButtKicker-brand low frequency audio transducers let users feel low-frequency sound (bass) and are musically accurate, powerful and virtually indestructible. They 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 and are distributed by Pearl Drums for musicians under the trade name, "Pearl's Throne Thumper by ButtKicker." 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/TheButtKicker and www.twitter.com/TheButtKicker.

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.

   
THE GUITAMMER COMPANY  
   
CONSOLIDATED BALANCE SHEETS  
             
    March 31,     December 31,  
    2015     2014  
ASSETS                
Current assets                
  Cash and cash equivalents   $ 28,132     $ 16,185  
  Accounts receivable, net     43,015       25,139  
  Inventory     189,882       361,223  
  Prepaid expenses and other current assets     131       131  
    Total current assets     261,160       402,678  
                 
Property and equipment, net     57,118       64,173  
Deferred financing costs, net     18,230       25,066  
Other assets, net     30,193       29,729  
    Total Assets   $ 366,701     $ 521,646  
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
Current liabilities                
  Line of credit   $ 39,523     $ 39,523  
  Accounts payable     915,141       853,933  
  Accrued expenses     484,802       366,938  
  Deferred revenue     29,777       36,899  
  Current portion of long-term debt - related parties     947,175       604,529  
  Current portion of long-term debt - non-related parties     772,524       795,630  
                 
    Total current liabilities     3,188,942       2,697,452  
                 
Long-term debt, net of current portion - related parties     -       340,229  
Long-term debt, net of current portion - non-related parties     -       -  
Total Liabilities     3,188,942       3,037,681  
                 
Commitments     -       -  
                 
Stockholders' deficit                
  Common stock, par value of $.001, 150,000,000 shares authorized; 83,100,498 and 80,000,498 shares issued, and outstanding at March 31, 2015 and December 31, 2014, respectively     83,101       83,001  
  Additional paid-in capital     8,049,432       7,985,860  
  Accumulated deficit     (10,954,774 )     (10,584,896 )
                 
Total Stockholders' deficit     (2,822,241 )     (2,516,035 )
                 
                 
Total Liabilities and Stockholders' deficit   $ 366,701     $ 521,646  
   
 
 
THE GUITAMMER COMPANY
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
    For the Three Months Ended
March 31,
 
             
    2015     2014  
                 
Total revenue   $ 530,348     $ 311,052  
                 
Cost of Goods Sold     287,991       167,463  
    Gross profit     242,357       143,589  
                 
Operating expenses                
  General and administrative     511,957       435,545  
  Research and development     -       10,782  
      511,957       446,327  
                 
    Loss from operations     (269,600 )     (302,738 )
                 
Other income (expense)                
  Interest expense     (100,278 )     (52,200 )
  Interest income     -       1  
      (100,278 )     (52,199 )
                 
    Loss before provision of income taxes     (369,878 )     (354,937 )
                 
Provision for income taxes             -  
  Net loss attributable to common stockholders   $ (369,878 )   $ (354,937 )
                 
Basic and diluted loss per share   $ (0.004 )   $ (0.005 )
                 
Basic and diluted weighted average common shares outstanding     83,018,276       78,028,165  
                 

Reconciliation of U.S. GAAP Net loss to EBITDA and Adjusted EBITDA:

EBITDA is defined as earnings (loss) before net interest expense, taxes, depreciation and amortization. Adjusted EBITDA is defined as earnings before net interest expense, income taxes, depreciation, amortization, stock warrant expense, payment of stock and warrants to consultants and employee stock-based compensation. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with generally accepted accounting principles ("GAAP"), Guitammer believes that these non-GAAP measures will allow for a better evaluation of the operating performance of the business and facilitate meaningful comparison of the results in the current period to those in prior periods and future periods. However, investors should not consider these measures in isolation or as a substitute for net income, operating income, or any other measure for determining Guitammer's operating performance that is calculated in accordance with GAAP. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measure, net loss, follows:

   
Reconciliation of U.S. GAAP net loss  
To EBITDA and Adjusted EBITDA  
   
March 31,
   
March 31,
 
    2015     2014  
Net Loss   $ (369,878 )   $ (354,937 )
Adjustments                
  Interest expense     100,278       52,200  
  Depreciation and patent amortization     9,031       12,762  
  Taxes     -       -  
EBITDA     (260,569 )     (289,975 )
Less non-cash expenses from:                
Stock warrant expense     21,900       (11,050 )
Payment of stock and warrants to consultants     8,500       28,250  
Employee stock options expense     55,173       35,868  
Adjusted EBITDA   $ (174,996 )   $ (236,907 )
                 

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