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Gross Profit Rises 189% - Increasing Global Demand for ButtKicker®-Brand Products Drives Organic Growth as Total Revenue in First Nine Months of 2012 Rises Over 40%

WESTERVILLE, OH, October 31, 2012

The Guitammer Company (OTC BB: 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 significant operating momentum as third quarter 2012 revenue rose 210% to approximately $555,000 and the higher revenue drove a 189%, or a $147,000, year-over-year increase in gross profit, which totaled approximately $225,000 in the three months ended September 30, 2012.

For the first nine months of 2012, Guitammer’s revenue improved over 40% over the comparable period in 2011 to $1.6 million and total gross profit improved 44% to approximately $677,000. Total revenue and gross profit for all of fiscal 2011 was $1.3 million and $547,412, respectively.

2012 Third Quarter and Nine-Month Financial Highlights and Recent Developments

  • Revenues rose 210% year-over-year to approximately $555,000 and reflecting a 41% gross margin, gross profit increased 189% to approximately $225,000.
  • In the first nine months of fiscal 2012, total revenues rose over 40% to approximately $1.6 million, which exceeds the total revenue generated in fiscal 2011. Total gross profit of approximately $677,000 compares favorably to total gross profit of approximately $469,000 in the year-ago period.
  • Adjusted EBITDA loss (see reconciliation on page 6 of this press release) improved by 14%, or approximately $48,000, to a loss of approximately $286,000 in the first nine months of 2012, compared to the same period a year ago.
  • Reflecting nearly $1.5 million in debt extinguishment over the last 10 months, interest expense decreased 33%, or approximately $37,000, for the third quarter of 2012 compared to the third quarter of 2011. The first nine months of 2012 interest expense declined 34%, or approximately $110,000 compared to the first 9 months of 2011.
  • Raised approximately $540,000 in the third quarter in private placements and reflecting growth capital raised in placements in the 2012 third quarter and additional proceeds secured subsequent to the end of quarter, year-to-date, Guitammer has now raised approximately $2.1 million in growth capital.
  • Back orders as of September 30, 2012 totaled in excess of $200,000 and the Company has nearly $500,000 in inventory.
  • Through the first nine months of 2012, international sales totaled approximately $950,000, or 58% of total global sales. Total year-to-date international sales include an over 600% increase in shipments to the Company’s distributor for the Australian market and an increase of over 122% in shipments to the Company’s French distributor, compared to the first nine months of 2011. Inclusive of this success, international sales already exceed full year 2011 international sales, and the Company anticipates further international sales momentum in the current quarter.
  • Continues to expand relationship with China-based Sichuan Lumiere Cinema Co. Ltd. (Lumière Pavilions) to add ButtKicker “4D” experience seats, including a recent agreement for two additional theaters. Including an aggregate of previously completed and committed future installations, Lumière Pavilions has increased its total to approximately 1,050 of Guitammer’s ButtKicker “4D” experience seats and intends to add additional seats in at least one auditorium at all new Lumière cinemas.

Mark Luden, CEO of Guitammer stated, “As reflected in the significant growth in revenue and gross profit generated in the 2012 third quarter, increased global demand for ButtKicker brand products in conjunction with our improved balance sheet and financial flexibility are providing the Company with a solid platform for sustainable growth. In addition to the growth in revenue and gross profit, our progress is clearly evident across many other financial metrics including reduced Adjusted EBITDA loss, significantly lower interest expense and working capital deficits and higher inventory levels that are helping us address the growing popularity of our products among consumers, retailers, entertainment exhibitors, and musicians around the world.

“Guitammer continues to execute on two growth platforms that offer attractive returns. We are achieving organic growth in our core business where the competitive advantages and unique entertainment experiences enabled by ButtKicker brand products provide opportunities for growth in the home theater, gaming, movie theater and musicians/pro audio markets. Our growth and success in the core business is notable as year-to-date revenue and gross profit both already exceed full year 2011 revenue and gross profit by approximately 25%.

“We are also making steady progress with the development and commercialization of our patented broadcast technology, ButtKicker® LIVE! As a new disruptive technology for the home broadcast market, ButtKicker LIVE! offers a second leg of growth for the Company. An emerging technology that enables the excitement, impact and feeling of sporting events to be broadcast along with the sound and video, the commercialization of ButtKicker Live! would bring to Guitammer a distinctive high-margin recurring revenue based business that is highly scalable across multiple channels as it can deliver economic benefits for the entire sports broadcast ecosystem, including content providers, networks and broadcasters and distributors and operators. We have established a strong competitive position for ButtKicker Live! that includes a ‘blocking’ patent for the broadcast space and our efforts to establish additional ‘fence’ IP around key components of the technology. Further, we are making significant progress in establishing the key relationships that will help spur commercialization and expect to begin the testing phase and to generate revenues in fiscal 2013.”

Mr. Luden concluded, “With year to date revenue already exceeding full year 2011 levels, growing popularity for our core products, an improved balance sheet and liquidity capable of supporting ongoing momentum and the continued development of our proprietary ButtKicker Live! technology that will offer a second platform for growth, Guitammer is well positioned to create enhanced value for our shareholders.”

About The Guitammer Company

The Guitammer Company, Westerville, Ohio, is a leader in low frequency sound products and technology. Its innovative and award winning line of patented ButtKicker-brand low frequency audio transducers let users feel low-frequency sound (bass). ButtKicker brand products are used around the world by leading entertainment and theater companies such as AMC, IMAX and Disney in movie theaters and attractions; by world-famous musicians; in home theaters, simulators and for car audio. ButtKicker brand products are distributed by Pearl Drums for musicians under the trade name, ”Pearl’s Throne Thumper by ButtKicker”, and factory installed in home theater seating by Palliser Furniture. “ButtKicker brand products patented design makes them musically accurate, powerful and virtually indestructible.

The Guitammer Company's newly patented broadcast technology, ButtKicker LIVE! enables the excitement, impact and feeling of sporting events to broadcast along with the sound and video. ButtKicker LIVE! puts you into the action, whether you’re at home or at the event. ButtKicker Live! technology is available for cable, satellite, fiber optic, IPTV and over-the-air broadcast and has been successfully tested with several major content (sports) providers. ButtKicker® and ButtKicker Live!® are registered trademarks of The Guitammer Company. For additional information, visit and

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.