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FOR IMMEDIATE RELEASE
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Email: media@guitammer.com

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THE GUITAMMER COMPANY ANNOUNCES STRONG 2012 FINANCIAL RESULTS


Broad Progress Made on Core Business, Revenue Growth, Balance Sheet Enhancement and ButtKicker Live! Broadcast Technology


Westerville OH, March 14, 2013

WESTERVILLE, OH, March 14, 2013 – The Guitammer Company (OTCQB: GTMM), a leader in low frequency sound and creator of the award-winning line of ButtKicker®-brand low frequency audio transducers that provide an immersive entertainment experience for audiences, today announced continued operating momentum as full year 2012 revenue rose 64 percent to approximately $2.13 million. The higher revenue drove a 55 percent, or approximately $303,000, year-over-year increase in gross profit, which totaled approximately $850,000 for the full year ended December 31, 2012.

2012 Full Year Financial Highlights and Recent Developments

  • Revenues rose 64 percent year-over-year to approximately $2.13 million; gross margin was 40 percent.
  • Approximately $1.7 million was raised in private placements in FY2012; adding to capital raised in FY2011, Guitammer has now raised approximately $2.1 million in growth capital
  • Continued an expanding relationship with China-based Sichuan Lumiere Cinema Co. Ltd. (Lumière Pavilions) by adding ButtKicker “4D” experience seats and securing a recent agreement for an additional theater. Including an aggregate of previously completed and this new installation, Lumière Pavilions has increased its total to approximately 1,380 of Guitammer’s ButtKicker “4D” experience seats and intends to add additional seats in at least one auditorium at all new Lumière cinemas.
  • Reinstallation of the ButtKicker “4D” cinema system for all 504 seats in the Kansas City Mainstreet Theatre, now operated by Alamo Drafthouse Cinema.
  • Successful stage one, “Proof of concept” in-arena testing of the patented ButtKicker Live! broadcast technology with a major sports league during both the regular season and playoffs.
  • Successful in-suite testing of ButtKicker Live! for patrons inside a glass-enclosed luxury box during a live major motorsports race.

Mark Luden, President of Guitammer, stated, “In 2012 we achieved significant and tangible milestones in sales growth, strengthening our balance sheet and the commercialization of our ButtKicker Live! broadcast technology. By reducing our debt, growing our sales, maintaining above industry average gross margins, continuing to win key customers, especially in the worldwide cinema market, and successfully testing ButtKicker Live! in two major venues, we believe we are positioned for a breakout year in 2013”.

Additional 2012 Full Year Financial Highlights and Recent Developments

  • Nearly $1.5 million in debt extinguishment over the past 13 months; interest expense decreased 40 percent, or approximately $187,000, for FY2012 compared to FY2011.
  • Total debt decreased by approximately $689,000, or 28 percent, to approximately $1.78 million as compared to FY2011.
  • Inventory increased to approximately $629,000 at December 31, 2012, compared to approximately $56,000 at December 31, 2011, reflecting the equity raised and improving operating results.
  • Total current assets increased approximately 380 percent, or approximately $682,000, to approximately $861,000, reflecting the effects of the debt extinguishment and equity raised.
  • The working capital deficit was more than halved (a 52 percent reduction) to approximately $1.6 million at the end of FY2012, down from approximately $3.3 million year end 2011.
  • International sales totaled approximately $1.17 million, or 55 percent, of total global sales.
  • Formation of the ButtKicker Live! “Technical Advisory Group” to facilitate the broadcast testing and rollout of this patented technology.

Adjusted EBITDA loss (see reconciliation table below) increased by approximately $80,000 in 2012, compared to 2011, which is attributable to significantly increased investments by the company of over $264,000 in FY2012 to expand and strengthen Research & Development, Advertising & Marketing, Public Relations and Sourcing. Without these investments, the Adjusted EBITDA loss would have been reduced by 50% from FY2011 to approximately $190,000.

Luden added: “I believe our full year 2012 results give further credence to the remarks I made with last year’s Q3 release, when I said our improved balance sheet and financial flexibility are and will provide the Company with a solid platform for sustainable growth in our “core” business, and that we were continuing to make steady progress with the development and commercialization of our patented broadcast technology, ButtKicker® LIVE!


                       
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About The Guitammer Company

The Guitammer Company, Westerville, OH, is a leader in low frequency sound. Its innovative and award-winning line of ButtKicker®-brand low frequency audio transducers let users feel low-frequency sound (bass) and are used around the world by leading entertainment and theater companies such as Alamo Drafthouse, IMAX, Disney and Lumiere Pavilions in movie theaters and attractions; by world famous musicians; in home theaters, simulators and for car audio. Their revolutionary, patented design makes them musically accurate, powerful and virtually indestructible. ButtKicker® and ButtKicker Live!® are registered trademarks of The Guitammer Company. For additional information, visit www.thebuttkicker.com and www.shakemycouch.com


Safe Harbor Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Actual results, events and performances could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause the Company's actual results, expressed or implied, to differ materially from expected results. These risks and uncertainties include, among other things, product demand and market competition. You should independently investigate and fully understand all risks before making an investment decision

- Financial tables follow -





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 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: