SOURCE: The Guitammer Company

The Guitammer Company

August 13, 2015 17:15 ET

The Guitammer Company Announces Second Quarter 2015 Financial Results

Second Quarter Sales Increase 91%, Gross Margins Increase to 49%

First Half of 2015 Sales Increased 78%

WESTERVILLE, OH--(Marketwired - Aug 13, 2015) - The Guitammer Company (OTCQB: GTMM), a leader in haptic-tactile broadcasting technology and hardware for sports, cinemas and consumers, announced today its results for the second quarter ended June 30, 2015.

2015 Second Quarter Financial Highlights and Selected Recent Developments

  • For the 3 months ended June 30, 2015, revenue increased $167,406 or 91%, to $351,256, compared to revenue of $183,850 for the three months ended June 30, 2014. 

  • For the 6 months ended June 30, 2015, revenue increased $386,702, or 78%, to $881,604, compared to revenue of $494,902 for the six months ended June 30, 2014. 

  • Gross margin percentage increased to 49% for the three months ended June 30, 2015; up from 46% for the three months ended June 30, 2014. 

  • For the 6 months ended June 30, 2015, gross margin percentage increased to 47%; up from 46% for the 6 months ended June 30, 2014. 

  • For the 6 months ended June 30, 2015 sales of ButtKicker® "4D" cinema seats expanded by eight theaters and approximately 1,700 seats consisting of two new Dolby Theater™ at AMC Prime™ locations, two new Regal Entertainment "RPX" locations, and four new Lumiere Pavilions "Lumiere Digital" locations.

Commenting regarding the Quarter's results, Richard Conn, CFO of Guitammer, said, "For both the first and second quarters of 2015 we have been pleased with the improvement in our sales numbers and gross margin percentage. We have seen continued growth in our sales to the cinema market and expect that trend to continue throughout the remainder of 2015."

About The Guitammer Company
The Guitammer Company, based in Westerville, Ohio, is a leader in haptic-tactile broadcasting technology and hardware for sports, cinemas and consumers. 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: Regal Entertainment Group, AMC Theatres, Alamo Drafthouse, IMAX, Disney and Lumiere Pavilions. They are used in other theaters and attractions, by world-famous musicians, 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." 

The Guitammer Company's patented and patent pending broadcast technologies, "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 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.

- financial tables follow -

THE GUITAMMER COMPANY  
   
CONSOLIDATED BALANCE SHEETS  
   
             
    June 30,     December 31,  
    2015     2014  
ASSETS                
Current assets                
  Cash and cash equivalents   $ 150,586     $ 16,185  
  Accounts receivable, net     35,108       25,139  
  Inventory     139,793       361,223  
  Prepaid expenses and other current assets     37,666       131  
   Total current assets     363,153       402,678  
                 
Property and equipment, net     50,062       64,173  
Deferred financing costs, net     11,399       25,066  
Other assets, net     28,217       29,729  
Investment in affiliate     26,066       -  
    Total Assets   $ 478,897     $ 521,646  
LIABILITIES AND STOCKHOLDERS DEFICIT     '          
                 
Current liabilities                
  Line of credit   $ 39,523     $ 39,523  
  Accounts payable     731,715       853,933  
  Accrued expenses     492,059       366,938  
  Deferred revenue     29,292       36,899  
  Current portion of long-term debt - related parties     949,592       604,529  
  Current portion of long-term debt - non-related parties     749,028       795,630  
                 
   Total current liabilities     2,991,209       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     2,991,209       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 June 30, 2015 and December 31, 2014, respectively     83,101       83,001  
  Preferred stock, par value of $.001, 1,000,000 shares                
  authorized; 50,000 and shares issued and outstanding                
  at June 30, 2015 and December 31, 2014 respectively     50       -  
  Additional paid-in capital     8,600,507       7,985,860  
 Accumulated deficit     (11,195,970 )     (10,584,896 )
                 
Total Stockholders' deficit     (2,512,312 )     (2,516,035 )
                 
                 
Total Liabilities and Stockholders' deficit   $ 478,897     $ 521,646  
                 
                 
                 
 
THE GUITAMMER COMPANY  
CONSOLIDATED STATEMENTS OF OPERATIONS  
   
    For the Six Months Ended  
    June 30,  
    2015     2014  
Total revenue   $ 881,604     $ 494,902  
                 
Cost of goods Sold     465,593       265,980  
  Gross profit     416,011       228,922  
                 
Operating expenses                
General and Administrative     888,563       741,381  
  Research and Development     1,575       10,782  
      890,138       752,163  
                 
   Loss from Operations     (474,127 )     (523,241 )
                 
Other Income                
  Investment income     26,066       -  
  Net Interest income (expense)     (156,766 )     (106,872 )
      (130,700 )     (106,872 )
                 
Loss before provision for                
    Income taxes     (604,827 )     (630,113 )
                 
Provision for Income taxes     -       -  
Loss before dividends on preferred stock     (604,827 )     (630,113 )
                 
Dividends - preferred stock     (6,247 )     -  
                 
Net loss available to common stockholders   $ (611,074 )   $ (630,113 )
                 
Basic and diluted loss per share   $ (0.007 )   $ (0.008 )
                 
Basic and diluted weighted average common shares outstanding     83,059,614       78,122,444  
                 

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  
   
    June 30,     June 30,  
    2015     2014  
Net Loss available to common stockholders   $ (611,074 )   $ (630,113 )
Adjustments                
  Interest expense     156,783       106,875  
  Depreciation and patent amortization     18,063       24,294  
  Taxes     -       -  
EBITDA     (436,228 )     (498,944 )
Less non-cash expenses from:                
Stock warrant expense     8,177       (57,584 )
Payment of stock and warrants to consultants     8,500       56,250  
Employee stock options expense     106,297       71,736  
Adjusted EBITDA   $ (313,254 )   $ (428,542 )
                 
                 

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