SOURCE: The Guitammer Company

The Guitammer Company

November 13, 2015 16:03 ET

The Guitammer Company Announces Third Quarter 2015 Financial Results

Third Quarter Sales Climb 193%, Gross Margins Increase to 49%; Cinema Sales to Increase Significantly in Q4 2015 and FY2016

WESTERVILLE, OH--(Marketwired - Nov 13, 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 third quarter ended September 30, 2015.

2015 Third Quarter Financial Highlights and Selected Recent Developments

  • For the 3 months ended September 30, 2015, revenue increase $267,741 or 193%, to $406,631, compared to revenue of $138,890 for the three months ended September 30, 2014. 

  • For the 9 months ended September 30, 2015, revenue increased $654,436 or 103%, to $1,288,225, compared to revenue of $633,789 for the nine months ended September 30, 2014. 

  • Gross margin percentage increased to 49% for the three months ended September 30, 2015; up from 45% for the three months ended September 30, 2014. 

  • For the 9 months ended September 30, 2015, our gross margin percentage increased to 48%; up from 46% for the 9 months ended September 30, 2014. 

  • Sales to cinemas significantly increase as Guitammer receives purchase orders and forecasts for a total of 27 new cinemas for delivery in Q4 2015 and FY 2016 from AMC Theatres, Regal Entertainment Group and Lumiere Pavilions' (China).

  • These new cinemas represent approximately 5,400 new ButtKicker enabled seats and will more than double our US footprint of ButtKicker enabled cinemas.

Commenting regarding the Quarter's results, Richard Conn, CFO of Guitammer, said, "through nine months of 2015, we have seen a sharp rise in our revenue as a direct result of increased cinema installations and having adequate inventory levels to enable us to meet customer demand. Late in 2014, we entered into a joint venture agreement that created LFT Manufacturing. LFT Manufacturing's ability to provide us with key inventory items has proven critical in increasing revenue and meeting customer demand."

Mark A. Luden, President of Guitammer, said, "In addition to the overall sales increase we are very pleased with the accelerating pace of adoption of our products in the cinema market, esp. with the US largest and second largest exhibitors. When these new cinemas are active we anticipate more than 2mil movie goers per year in the US will experience a movie enhanced by our "4D Cinema powered by ButtKicker" technology. Additionally our efforts to further deploy and commercialize our broadcast technology are on-going and we expect to announce further deployments of our broadcast technology in late Q4 of this year or early Q1 of next year."

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. 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.

- financial tables follow -

   
THE GUITAMMER COMPANY  
   
CONSOLIDATED BALANCE SHEETS  
             
    September 30,     December 31,  
    2015     2014  
ASSETS                
Current assets                
  Cash and cash equivalents   $ 35,902     $ 16,185  
  Accounts receivable, net     63,641       25,139  
  Inventory     185,789       361,223  
  Prepaid expenses and other current assets     131       131  
    Total current assets     285,463       402,678  
                 
Property and equipment, net     43,007       64,173  
Deferred financing costs, net     4,562       25,066  
Other assets, net     27,667       29,729  
Investment in joint venture     128,336       -  
    Total Assets   $ 489,035     $ 521,646  
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
Current liabilities                
  Line of credit   $ 39,523     $ 39,523  
  Accounts payable     793,703       853,933  
  Accrued expenses     512,174       366,938  
  Deferred revenue     27,681       36,899  
  Current portion of long-term debt - related parties     952,034       604,529  
  Current portion of long-term debt - non-related parties     725,074       795,630  
                   
    Total current liabilities     3,050,189       2,697,452  
                 
Longongoterm debt, net of current portion - related parties     -       340,229  
Longongoterm debt, net of current portion - non-related parties     -       -  
Total Liabilities     3,050,189       3,037,681  
                 
Commitments     -       -  
                 
Stockholders' deficit                
  Common stock, par value of $.001, 200,000,000 shares authorized; 83,100,498 and 80,000,498 shares issued, and outstanding at September 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 0 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively     50       -  
  Additional paid-in capital     8,745,131       7,985,860  
  Accumulated deficit     (11,389,436 )     (10,584,896 )
                 
Total Stockholders' deficit     (2,561,154 )     (2,516,035 )
                 
                 
Total Liabilities and Stockholders' deficit   $ 489,035     $ 521,646  
   
   
   
THE GUITAMMER COMPANY  
   
CONSOLIDATED STATEMENTS OF OPERATIONS  
   
    For the Nine Months Ended  
    September 30,  
    2015     2014  
Total revenue   $ 1,288,225     $ 633,789  
                 
Cost of goods Sold     673,402       342,907  
    Gross profit     614,823       290,882  
                 
Operating expenses                
  General and Administrative     1,219,852       1,102,589  
  Research and Development     2,863       10,782  
      1,222,715       1,113,371  
                 
    Loss from Operations     (607,892 )     (822,489 )
                 
Other Income                
  Investment income from joint venture     34,836       -  
  Net Interest expense     (215,155 )     (163,493 )
      (180,319 )     (163,493 )
                 
Loss before provision for                
    Income taxes     (788,211 )     (985,982 )
                 
Provision for Income taxes     -       -  
Loss before dividends on preferred stock     (788,211 )     (985,982 )
                 
Dividends - preferred stock     (16,329 )     -  
                 
Net loss available to common stockholders   $ (804,540 )   $ (985,982 )
                 
Basic and diluted loss per share   $ (0.010 )   $ (0.013 )
                 
Basic and diluted weighted average common shares outstanding     83,073,392       78,520,523  
                 
                 

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  
   
    September 30,     September 30,  
    2015     2014  
Net Loss available to common stockholders   $ (804,540 )   $ (985,982 )
Adjustments                
  Interest expense     215,173       163,503  
  Depreciation and patent amortization     27,119       35,336  
  Taxes     -       -  
EBITDA     (562,248 )     (787,143 )
Less non-cash expenses from:                
Stock warrant expense     (21,768 )     (44,726 )
Payment of stock and warrants to consultants     8,500       66,126  
Employee stock options expense     157,421       107,604  
Adjusted EBITDA   $ (418,095 )   $ (658,139 )

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