VirTra, Inc. (Nasdaq: VTSI) (“VirTra”
or the “Company”), a global provider of judgmental use of
force training simulators, firearms training simulators for the law
enforcement and military markets, reported results for the first
quarter ended March 31, 2024. The financial statements are
available on VirTra’s website and here.
First Quarter 2024 and Recent Operational
Highlights:
-
Progressed V-XR launch preparations. VirTra
readied its extended reality training platform focused on soft
skills development, for market introduction in the coming months.
This strategic launch is expected to broaden VirTra’s reach within
core law enforcement markets and expand the company’s presence in
new sectors such as healthcare and education.
-
Continued enhancing content delivery capabilities.
VirTra expanded its content library across its multiple training
platforms, integrating more comprehensive and diverse scenarios
that address a wider range of real-world situations, thus improving
training effectiveness across various use cases.
- Continued improving
operational efficiencies through production optimization
processes and ERP enhancements, supporting faster order fulfillment
and scalable growth.
- Maintained robust working
capital at $33.2 million, positioning the Company for
sustained growth and operational agility.
First Quarter 2024 Financial Highlights:
|
For the Three Months Ended |
All figures in millions, except per share data |
March 31, 2024 |
March 31, 2023 |
% Δ |
Total Revenue |
$8.1 |
$10.0 |
-19% |
|
|
|
|
Gross Profit |
$5.5 |
$6.9 |
-21% |
Gross Margin |
67% |
69% |
-2% |
|
|
|
|
Net Income |
$1.2 |
$2.9 |
N/A |
Diluted EPS |
$0.11 |
$0.27 |
N/A |
Adjusted EBITDA |
$1.9 |
$4.0 |
N/A |
|
|
|
|
Management Commentary
CEO John Givens stated, “The first quarter of
2024, while showing a dip in revenue, marked another period of
strategic execution as we continue to build on the transformative
groundwork laid over the past two years. The anticipated revenue
fluctuation was primarily due to the cyclical nature of budget
allocations, often skewed towards year-end, coupled with the impact
of the U.S. government’s continuing resolution, and the completion
of a large portion of our capital backlog in 2023. We remain
optimistic that the integration of new sales strategies and team
members will begin to influence our financial results as the year
progresses, especially as these initiatives mature and the U.S.
government budget resolutions advance, catalyzing purchasing
decisions.
“The forthcoming launch of V-XR is set to
broaden the scope of our training solutions, tailored to all agency
sizes and budgets. This new platform will also expand our market
reach into sectors such as healthcare and education. With V-XR, we
are cultivating a frontier for continued growth and reinforcing our
position as a leader in producing effective training outcomes.
“Our operational enhancements, including our
consolidation into a single state-of-the-art production facility
and the implementation of an upgraded ERP system, have been pivotal
in elevating our operational excellence. These improvements have
enabled more efficient production, higher quality outputs, and
quicker delivery times, thereby enhancing customer satisfaction.
Additionally, the Microsoft IVAS contract has propelled our
research and development efforts in the military market, advancing
our technology and providing insights that aid in deeper market
penetration both domestically and abroad. As our strategic
initiatives continue to take root throughout 2024, we are
well-positioned to capitalize on the opportunities presented by our
upcoming technology introductions and growing content library.”
First Quarter 2024 Financial Results
Total revenue was $8.1 million,
compared to $10.0 million in the prior year period. The 19%
decrease was primarily due to delays in federal funding, attributed
to the U.S. government’s continuing resolution, which caused
numerous contracts to be placed on hold. This temporary challenge
impacted bookings in both the fourth quarter of 2023 and the first
quarter of 2024.
Gross profit totaled $5.5
million (67% of total revenue), compared to $6.9 million (69% of
total revenue) in the prior year period. The 21% decrease in gross
profit was primarily due to the change in sales. Gross margin
decreased mainly due to cost increases from the Microsoft contract.
Specifically, a milestone payment in December 2023, which incurred
minimal costs, previously boosted margins. However, costs
associated with a subsequent milestone payment in the first quarter
of 2024 adversely affected the gross margin. Effective cost
management in other system sales partially offset this effect.
Net operating expense was $4.1
million, marking a 17% increase from $3.5 million in the prior year
period. This rise was driven by higher payroll and benefits
associated with recruiting senior-level staff for strategic growth,
increased IT spending to enhance compliance for potential
government contracts, and expanded travel to broaden sales
territory coverage.
Operating income was $1.4
million, compared to $3.5 million in the first quarter of 2023.
Net income was $1.2 million, or
$0.11 per diluted share (based on 11.0 million weighted average
diluted shares outstanding), compared to net income of $2.9
million, or $0.27 per diluted share (based on 10.9 million weighted
average diluted shares outstanding), in the first quarter of
2023.
Adjusted EBITDA, a non-GAAP
metric, was $1.9 million, compared to $4.0 million in the first
quarter of 2023.
Cash and cash equivalents were $22.4 million at
March 31, 2024.
Financial Commentary
CFO Alanna Boudreau remarked, “The first quarter
demonstrated the effectiveness of our operational enhancements in
maintaining a strong gross margin. Despite a challenging revenue
environment, we implemented rigorous cost management strategies,
focusing on optimizing our production processes and strategic
procurement to mitigate the impacts of increased costs from key
contracts and operational expansions. Our recurring revenue
streams, including the STEP program, services, and warranties,
continued to grow in Q1, reaching 23% of total revenue and
representing an increasingly predictable revenue base. Looking
ahead, we remain focused on improving bookings performance and
stabilizing backlog amidst order seasonality. With strategic
initiatives underway, particularly the launch of V-XR, we are
positioning ourselves to improve our revenue growth for the
remainder of 2024 compared to Q1. Our robust working capital shows
our financial strength and supports strategic initiatives,
including scaled production of the V-XR.”
Conference CallVirTra’s
management will hold a conference call today (May 14, 2024) at 4:30
p.m. Eastern time (1:30 p.m. Pacific time) to discuss these
results. VirTra’s Chief Executive Officer John Givens and Chief
Financial Officer Alanna Boudreau will host the call, followed by a
question-and-answer period.
U.S. dial-in number: 1-877-407-9208International
number: 1-201-493-6784Conference ID: 13746016
Please call the conference telephone number 5-10
minutes prior to the start time. An operator will register your
name and organization. If you have any difficulty connecting with
the conference call, please contact Gateway Investor Relations at
949-574-3860.
The conference call will be broadcast live and
available for replay here and via the investor relations section of
the Company’s website.
A replay of the call will be available after
7:30 p.m. Eastern time on the same day through May 28, 2024.
Toll-free replay number:
1-844-512-2921International replay number: 1-412-317-6671Replay ID:
13746016
About VirTra, Inc.VirTra
(Nasdaq: VTSI) is a global provider of judgmental use of force
training simulators, firearms training simulators for the law
enforcement, military, educational and commercial markets. The
company’s patented technologies, software, and scenarios provide
intense training for de-escalation, judgmental use-of-force,
marksmanship, and related training that mimics real-world
situations. VirTra’s mission is to save and improve lives worldwide
through practical and highly effective virtual reality and
simulator technology. Learn more about the company
at www.VirTra.com.
About the Presentation of Adjusted
EBITDAAdjusted earnings before interest, income taxes,
depreciation, and amortization and before other non-operating costs
and income (“Adjusted EBITDA”) is a non-GAAP financial measure.
Adjusted EBITDA also includes non-cash stock option expense and
other than temporary impairment loss on investments. Other
companies may calculate Adjusted EBITDA differently. VirTra
calculates its Adjusted EBITDA to eliminate the impact of certain
items it does not consider to be indicative of its performance and
its ongoing operations. Adjusted EBITDA is presented herein because
management believes the presentation of Adjusted EBITDA provides
useful information to VirTra’s investors regarding VirTra’s
financial condition and results of operations and because Adjusted
EBITDA is frequently used by securities analysts, investors, and
other interested parties in the evaluation of companies in VirTra’s
industry, several of which present a form of Adjusted EBITDA when
reporting their results. Adjusted EBITDA has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for analysis of VirTra’s results as reported under
accounting principles generally accepted in the United States of
America (“GAAP”). Adjusted EBITDA should not be considered as an
alternative for net income, cash flows from operating activities
and other consolidated income or cash flows statement data prepared
in accordance with GAAP or as a measure of profitability or
liquidity. A reconciliation of net income to Adjusted EBITDA is
provided in the following tables:
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
Increase |
|
|
% |
|
|
|
2024 |
|
|
2023 |
|
|
(Decrease) |
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
1,216,173 |
|
|
$ |
2,946,373 |
|
|
$ |
(1,730,200 |
) |
|
|
-59 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
511,437 |
|
|
|
641,345 |
|
|
|
(129,908 |
) |
|
|
-20 |
% |
Depreciation and amortization |
|
|
236,547 |
|
|
|
227,570 |
|
|
|
8,977 |
|
|
|
4 |
% |
Interest (net) |
|
|
(177,898 |
) |
|
|
48,183 |
|
|
|
(226,081 |
) |
|
|
-469 |
% |
EBITDA |
|
|
1,786,259 |
|
|
|
3,863,471 |
|
|
|
(2,077,212 |
) |
|
|
-54 |
% |
Right of use amortization |
|
|
127,893 |
|
|
|
121,774 |
|
|
|
6,119 |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
1,914,152 |
|
|
$ |
3,985,245 |
|
|
$ |
(2,071,093 |
) |
|
|
-52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements
The information in this discussion contains
forward-looking statements and information 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
subject to the “safe harbor” created by those sections. The words
“anticipates,” “believes,” “estimates,” “expects,” “intends,”
“may,” “plans,” “projects,” “will,” “should,” “could,” “predicts,”
“potential,” “continue,” “would” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. We may
not actually achieve the plans, intentions or expectations
disclosed in our forward-looking statements and you should not
place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking
statements that we make. The forward-looking statements are
applicable only as of the date on which they are made, and we do
not assume any obligation to update any forward-looking statements.
All forward-looking statements in this document are made based on
our current expectations, forecasts, estimates and assumptions, and
involve risks, uncertainties and other factors that could cause
results or events to differ materially from those expressed in the
forward-looking statements. In evaluating these statements, you
should specifically consider various factors, uncertainties and
risks that could affect our future results or operations. These
factors, uncertainties and risks may cause our actual results to
differ materially from any forward-looking statement set forth in
the reports we file with or furnish to the Securities and Exchange
Commission (the “SEC”). You should carefully consider these risks
and uncertainties described and other information contained in the
reports we file with or furnish to the SEC before making any
investment decision with respect to our securities. All
forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by this
cautionary statement.
Investor Relations Contact:
Matt Glover and Alec WilsonGateway Group, Inc.
VTSI@gateway-grp.com949-574-3860
- Financial Tables to Follow
-
|
VIRTRA, INC.CONDENSED BALANCE
SHEETS(Unaudited) |
|
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,415,177 |
|
|
$ |
18,849,842 |
|
Accounts receivable, net |
|
|
10,300,165 |
|
|
|
15,724,147 |
|
Inventory, net |
|
|
12,292,460 |
|
|
|
12,404,880 |
|
Unbilled revenue |
|
|
1,681,375 |
|
|
|
1,109,616 |
|
Prepaid expenses and other current assets |
|
|
832,712 |
|
|
|
906,803 |
|
Total current assets |
|
|
47,521,889 |
|
|
|
48,995,288 |
|
Long-term
assets: |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
16,799,459 |
|
|
|
15,487,012 |
|
Operating lease right-of-use asset, net |
|
|
588,794 |
|
|
|
716,687 |
|
Intangible assets, net |
|
|
565,318 |
|
|
|
567,540 |
|
Security deposits, long-term |
|
|
35,691 |
|
|
|
35,691 |
|
Other assets, long-term |
|
|
201,670 |
|
|
|
201,670 |
|
Deferred tax asset, net |
|
|
3,663,357 |
|
|
|
3,630,154 |
|
Total long-term assets |
|
|
21,854,289 |
|
|
|
20,638,754 |
|
Total
assets |
|
$ |
69,376,178 |
|
|
$ |
69,634,042 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,695,042 |
|
|
$ |
2,282,427 |
|
Accrued compensation and related costs |
|
|
2,176,078 |
|
|
|
2,221,416 |
|
Accrued expenses and other current liabilities |
|
|
4,382,361 |
|
|
|
3,970,559 |
|
Note payable, current |
|
|
226,655 |
|
|
|
226,355 |
|
Operating lease liability, short-term |
|
|
323,038 |
|
|
|
317,840 |
|
Deferred revenue, short-term |
|
|
5,538,525 |
|
|
|
6,736,175 |
|
Total current liabilities |
|
|
14,341,699 |
|
|
|
15,754,772 |
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
Deferred revenue, long-term |
|
|
3,004,418 |
|
|
|
3,012,206 |
|
Note payable, long-term |
|
|
7,751,585 |
|
|
|
7,813,021 |
|
Operating lease liability, long-term |
|
|
289,687 |
|
|
|
432,176 |
|
Total long-term liabilities |
|
|
11,045,690 |
|
|
|
11,257,403 |
|
Total
liabilities |
|
|
25,387,389 |
|
|
|
27,012,175 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
(See Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
|
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares
issued or outstanding |
|
|
- |
|
|
|
- |
|
Common stock $0.0001 par value; 50,000,000 shares authorized;
11,109,730 shares issued and outstanding as of March 31, 2024 and
11,107,230 shares issued and outstanding as of December 31,
2023 |
|
|
1,110 |
|
|
|
1,109 |
|
Class A common stock $0.0001 par value; 2,500,000 shares
authorized; no shares issued or outstanding |
|
|
- |
|
|
|
- |
|
Class B common stock $0.0001 par value; 7,500,000 shares
authorized; no shares issued or outstanding |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
32,108,513 |
|
|
|
31,957,765 |
|
Retained earnings |
|
|
11,879,166 |
|
|
|
10,662,993 |
|
Total stockholders’ equity |
|
|
43,988,789 |
|
|
|
42,621,867 |
|
Total liabilities and
stockholders’ equity |
|
$ |
69,376,178 |
|
|
$ |
69,634,042 |
|
|
VIRTRA, INC.CONDENSED STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
|
Three Months Ended |
|
|
|
March 31, 2024 |
|
|
March 31, 2023 |
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
8,094,398 |
|
|
$ |
10,026,935 |
|
Total revenue |
|
|
8,094,398 |
|
|
|
10,026,935 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
2,632,257 |
|
|
|
3,077,997 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
5,462,141 |
|
|
|
6,948,938 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
3,370,422 |
|
|
|
2,711,337 |
|
Research and development |
|
|
693,380 |
|
|
|
766,296 |
|
|
|
|
|
|
|
|
|
|
Net operating expense |
|
|
4,063,802 |
|
|
|
3,477,633 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
1,398,339 |
|
|
|
3,471,305 |
|
|
|
|
|
|
|
|
|
|
Other income: |
|
|
|
|
|
|
|
|
Other income |
|
|
329,271 |
|
|
|
183,642 |
|
Gain on forgiveness of note payable |
|
|
- |
|
|
|
(67,229 |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net other income |
|
|
329,271 |
|
|
|
116,413 |
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes |
|
|
1,727,610 |
|
|
|
3,587,718 |
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
511,437 |
|
|
|
641,345 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,216,173 |
|
|
$ |
2,946,373 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.11 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.11 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
10,959,298 |
|
|
|
10,917,311 |
|
Diluted |
|
|
10,961,188 |
|
|
|
10,919,391 |
|
|
VIRTRA, INC.CONDENSED STATEMENTS OF CASH
FLOWS(Unaudited) |
|
|
|
Three Months Ended March 31 |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,216,173 |
|
|
$ |
2,946,373 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
236,547 |
|
|
|
227,570 |
|
Right of use amortization |
|
|
127,893 |
|
|
|
121,774 |
|
Employee stock compensation |
|
|
139,999 |
|
|
|
24,063 |
|
Bad Debt Expense |
|
|
245,089 |
|
|
|
- |
|
Stock issued for service |
|
|
- |
|
|
|
75,000 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable, net |
|
|
5,178,893 |
|
|
|
(1,686,838 |
) |
Inventory, net |
|
|
112,420 |
|
|
|
(1,155,466 |
) |
Deferred taxes |
|
|
(33,203 |
) |
|
|
(865,745 |
) |
Unbilled revenue |
|
|
(571,759 |
) |
|
|
(430,488 |
) |
Prepaid expenses and other current assets |
|
|
74,091 |
|
|
|
(1,675 |
) |
Other assets |
|
|
- |
|
|
|
(792 |
) |
Accounts payable and other accrued expenses |
|
|
(246,905 |
) |
|
|
1,610,884 |
|
Operating lease right of use |
|
|
(137,291 |
) |
|
|
(126,592 |
) |
Deferred revenue |
|
|
(1,205,438 |
) |
|
|
240,535 |
|
Net cash provided by operating
activities |
|
|
5,136,509 |
|
|
|
978,603 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(1,546,772 |
) |
|
|
(163,441 |
) |
Net cash (used in) investing
activities |
|
|
(1,546,772 |
) |
|
|
(163,441 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Principal payments of debt |
|
|
(35,152 |
) |
|
|
(57,750 |
) |
Proceeds from Stock based options |
|
|
10,750 |
|
|
|
16,726 |
|
Net cash (used in) financing
activities: |
|
|
(24,402 |
) |
|
|
(41,024 |
) |
|
|
|
|
|
|
|
|
|
Net increase in
cash |
|
|
3,565,335 |
|
|
|
774,138 |
|
Cash and restricted cash,
beginning of period |
|
|
18,849,842 |
|
|
|
13,483,597 |
|
Cash and restricted cash, end
of period |
|
$ |
22,415,177 |
|
|
$ |
14,257,735 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of
cash flow information: |
|
|
|
|
|
|
|
|
Cash paid: |
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
24,002 |
|
|
$ |
108,777 |
|
Interest paid |
|
$ |
61,552 |
|
|
$ |
3,345 |
|
Virtra (NASDAQ:VTSI)
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From Oct 2024 to Nov 2024
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From Nov 2023 to Nov 2024