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TASER International Inc. (TASR - Snapshot Report) sustained its steady performance in the first quarter of 2014. It reported earnings of 6 cents per share during the quarter, at par with the year-ago level. The reported figure surpassed the Zacks Consensus Estimate by 2 cents. The beat was driven by record international sales and higher bookings of EVIDENCE.com and AXON.

Highlights of the Quarter

In the first quarter, the company booked revenues of $36.2 million, beating the Zacks Consensus Estimate by $2.2 million. The reported number also increased 18.9% from $30.4 million in the first quarter 2013. The solid results were attributable to the TASER X26P upgrades implemented by numerous law enforcement agencies besides robust international orders. During the quarter, TASER’s international revenue reached a record $10.6 million, an increase of 241.9% year over year.

The company’s gross margin expanded 80 basis points year over year to 61.4% in the quarter, driven by higher sales leveraging better overhead expenses. The company also benefited from increased sales prices and lower depreciation cost for EVIDENCE.COM.

Sales, general and administrative expenses increased 22.9% year over year to $13.7 million in the first quarter of 2014.

Quarterly Segmental Details

TASER Weapons segment revenues surged 16.0% year over year to $32.5 million in the first quarter of 2014.

EVIDENCE.com & Video segment revenues saw a 52.6% improvement to $3.7 million in the first quarter of 2014. Segment bookings improved 321.4% from the year-ago level to $5.9 million in the quarter.

Financials

The company had $77.5 million of cash and cash equivalents as of Mar 31, 2014 versus $63.4 million at 2013 end. The company generated $4.3 million in cash from operating activities during the quarter under review.

Our Take

TASER continues its booking trajectory with over $5 million in EVIDENCE.com and AXON bookings.

The company revealed several new orders for its conducted electrical weapons (CEWs) and next generation Smart Weapons. The company is seeing increasing uptake on the back of its new Smart Weapons platforms, as customers are eager to follow this market transition. The majority of these orders were for its next-generation electroshock Smart Weapons, which totaled over 5,000 from local, state and federal agencies. The company’s new Smart Weapon platforms offer significant improvements in safety, effectiveness and accountability.

Apart from drawing significant revenues from domestic orders, the company is also focused on international sales. TASER invests considerably in upgrading existing and producing new products that make life safer in public places. During the first quarter 2014, research and development expenses were $3.6 million, up 79.1% year over year due to additional personnel expense associated with EVIDENCE.com & Video segment product development initiatives.

TASER International currently has a Zacks Rank #2 (Buy). Some better-ranked stocks in the sector include Alliant Techsystems Inc. (ATK - Analyst Report), B/E Aerospace Inc. (BEAV - Snapshot Report) and Esterline Technologies Corp. (ESL - Snapshot Report), all with a Zacks Rank #2 (Buy).

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