Taser International announced financial results for the third quarter ended September 30, 2015. Net sales were $50.4 million in the quarter, an increase of $6.0 million, or 13.6% over the prior year third quarter.
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International sales were $6.7 million in the quarter.
Weapons segment revenues declined $0.5 million year-over-year, or 1.2%, to $39.5 million in the third quarter of 2015. The decrease of $1.1 million in sales of legacy TASER X26 CEW, which was retired from production as of December 31, 2014 was partially offset by an increase in cartridge sales of $0.9 million compared to third quarter 2014.
For the nine months ended September 30, 2015, the Weapons revenues increased $10.5 million, or 10.0% over the same period in the prior year.
Axon segment revenues increased by $6.5 million, or 150.2%, to $10.9 million in the third quarter of 2015 in comparison to the prior year third quarter.
The increase was partially driven by a $2.0 million increase, or 168.7%, in service revenue compared to the third quarter 2014 which was driven by increased license counts and higher monthly per license revenues for Evidence.com as well as increased professional services delivered.
Axon body-worn camera hardware sales increased $3.2 million compared to the prior year period as more agencies continue to adopt these technologies. For the nine months ended September 30, 2015, the Axon segment revenues increased $13.6 million, or 108.5% over the same period in the prior year.
Consolidated gross margin in the third quarter of 2015 was 61.7%, compared to 64.7% in the same period last year mostly due to a larger mix of lower margin Axon hardware product sales within the quarter compared to the prior year.
Weapons segment gross margins remained relatively consistent at 68.5% in third quarter 2015 compared to 68.9% in third quarter 2014.
Axon segment gross margins improved to 36.8% in the third quarter 2015 compared to 26.4% in the third quarter of 2014. Axon hardware product margins (excluding Axon services) increased to 24.7% compared to 15.3% in the prior year.
Axon service margins increased to 66.8% in the third quarter of 2015 compared to 57.0% in the prior year due to the leverage of the fixed costs to operate and host the Evidence.com service.
Sales, general and administrative (SG&A) expenses of $17.8 million in the third quarter of 2015 increased $5.4 million, from $12.4 million in the third quarter of 2014. As a percentage of revenue, SG&A increased to 35.4% in the third quarter of 2015 compared to 28.1% in the prior year third quarter.
Compared to the prior year, personnel expenses increased $2.0 million as the company has increased customer-facing positions as well as some administrative functions. Consulting expenses increased approximately $1.7 million partially due to public relations efforts ahead of the IACP conference.
Also, marketing expenses as well as travel expenses each increased approximately $0.3 million, as the Company works to grow its international presence. ■