Guitammer Issues Shareholder Letter Recapping 2012

WESTERVILLE, OH--(Marketwired - Apr 24, 2013) - Mark A. Luden, President of The Guitammer Company ( OTCQB : GTMM ) (the "Company"), a leader in low frequency sound and creator of the award-winning line of ButtKicker®-brand low frequency audio transducers, recapped the Company's 2012 and selected 2013 information as well as commented on its outlook and focus for the rest of this year.

2012 Full Year Financial Highlights and Selected 2013 Information:

• 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 and an additional $250k was raised in Q1 FY2013.
• 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.
• Modified the State of Ohio loan which has the net effect to reduce Guitammer's monthly payment by approximately $16.5k per month for 2013 and by $14.6k per month for 2014 from the previous schedule. Equates to an annual cash flow enhancement of approx $200k this year and $175k in 2014.
• 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 over 380 percent, or more than $681,000, 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.

Key Movie Theater Wins:

• Continued an expanding relationship with China-based Sichuan Lumière 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 projects and this new installation, Lumière Pavilions has increased its total of installed ButtKicker "4D" experience seats to approximately 1,380 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.

Core Business Strengthening:

• Hired industry veteran National Sales Manager on March 1, 2013.
• Joined Nationwide, largest buying and marketing group with over 3,500 members operating more than 10,000 store fronts and $14 billion in combined annual sales and presented at the March 3 ^rd - 6 ^th Primetime Show in Las Vegas.
• Joined the D-Tools Manufacturer Vantage Point (MVP) program that provides over 4,400 system integrators with the most up-to-date product information.

ButtKicker Live! Broadcast Technology Progress:

• Formation of the ButtKicker Live! "Technical Advisory Group" to facilitate the broadcast testing and rollout of ButtKicker Live!.
• 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.

Regarding 2013, Mr. Luden stated, "Our primary aim is to continue to grow our core business sales, focusing on the home theater market in the US, movie theater chains in the US, expansion of our footprint with Lumière in China, establishing a consumer / retail sales presence in China and continuing our commercialization of ButtKicker Live! with one or more broadcast tests and possibly initial rollouts."

Specific 2013 Outlook and Focus:

US Core Business Growth:  

• Continued growth of core business sales in the US markets: online and home theater focused.

Movie Theater Expansion / Joint Marketing Programs:

• Growth of US movie theater footprint with joint marketing programs selling ButtKicker brand consumer product to movie theater goers in partnership with movie theater chains.
• Continued expansion of China movie theater footprint with Lumière and rollout of joint marketing program with Lumière to Chinese consumers.
• Opportunistic expansion of the same joint marketing model with movie theater chains worldwide based on existing partnerships and relationships.

Chinese Market Expansion:

• Establishment of formalized sales presence in China for consumer, theater and custom installation sales to the Chinese market.

ButtKicker Live! Tactile Broadcasting Rollout and Adoption:

• Broadcast test(s) and rollout with one or more distribution, broadcast and content partners.
• Achievement of ButtKicker Live! revenue.

"Staying focused on these objectives and continuing to hit these milestones will enable us to create sustainable value for our shareholders, partners, employees and vendors," Mr. Luden concluded. "I believe we have the right products, right focus, right business model and, most importantly, right timing."

About The Guitammer Company

The Guitammer Company, based in 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 Alamo Drafthouse, IMAX, Disney and Lumière Pavilions in movie theaters and attractions; by world-famous musicians; and in home theaters, by consumers for video games, simulators and car audio. ButtKicker brand products are distributed by Pearl Drums for musicians under the trade name, "Pearl's Throne Thumper by ButtKicker". 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 it has been successfully tested with several major content (sports) providers. ButtKicker® and ButtKicker Live!® are registered trademarks of The Guitammer Company. 

For additional information on The Guitammer Company and detailed product information, visit www.guitammer.com and www.thebuttkicker.com .

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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.