VTSI Virtra Inc

VirTra Releases 2014 First Quarter Financial Results

TEMPE, AZ--(Marketwired - May 15, 2014) - VirTra Systems (PINKSHEETS: VTSI), a leading provider of firearms simulators to military, law enforcement agencies and other organizations, today announced the release of its unaudited 2014 first quarter financial statements. The financial statements are available on VirTra's website and here.

Financial Summary:

• Net Sales were $2.0 million for the quarter ending March 31, 2014, a decrease of $0.5 million, or 20%, compared to the previous year's first quarter sales of $2.5 million. The decrease is consistent with the volatility between quarters.
• Gross margin for the first quarter 2014 was 62% of Net Sales, compared to 70% last year. The drivers for the decrease are primarily due to timing of product shipments in the pipeline to customers and corresponding leverage of fixed overhead.
• Sales, general and administrative (SG&A) expenses of $1.0 million in Q1 2014 decreased 20%, from $1.2 million in Q1 2013. As a percent of revenue, SG&A was 50% for Q1 2014 compared to 48% in Q1 2013.
• Income from operations were $0.2 million for the quarter ending March 31, 2014, a decrease of $0.3 million, compared to income from operations of $0.5 million in Q1 2013.
• Throughout Q1 2014, the Company used $0.7 million in cash from operating activities by fulfilling orders secured by deposits. Cash and cash equivalents were $1.6 million at the end of Q1 2014, down from $2.4 million at December 31, 2013.
• The Company has no draw upon the line of credit as of March 31, 2014.

Bob Ferris, Chief Executive Officer of VirTra, commented, "The first quarter 2014 results of $2 million in sales and $238,000 of net income are positive and in-line with quarterly fluctuations. Our management team has worked extremely hard to position the Company for continued growth as an industry leader in firearms simulators."

About VirTra Systems

VirTra is a global leading provider of the world's most realistic and effective shooting simulators. VirTra is the higher standard in firearms training simulators, offering a variety of simulator platforms, powerful gas-powered recoil kits and the patented Threat-Fire™ simulated hostile return fire system. VirTra's products provide the very best simulation training available for personnel that are entrusted with lethal force and critical missions. The Company's common stock is not registered under the Securities Exchange Act of 1934 and the Company does not currently file periodic or other reports with the Securities and Exchange Commission.

www.VirTra.com

Forward-looking Statements

This news release includes certain information that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "proposed," "planned," "potential" and similar expressions, or are those, which, by their nature, refer to future events. All statements, other than statements of historical fact, included herein, including statements about VirTra's beliefs and expectations, are forward-looking statements. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Although VirTra believes that such statements are reasonable, it can give no assurance that such forward-looking information will prove to be accurate. VirTra cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors. Accordingly, due to the risks, uncertainties and assumptions inherent in forward-looking information, readers and prospective investors in the Company's securities should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof, is based upon the opinions and estimates of management and information available to management as at the date hereof and is subject to change. The Company assumes no obligation to revise or update forward-looking information to reflect new circumstances, whether as a result of new information, future events or otherwise, except as required by law.

- - - -FINANCIALS FOLLOWING- - - -

VIRTRA SYSTEMS, INC. BALANCE SHEETS as of:

			March 31, 2014				December 31, 2013
			(unaudited)				(audited)
Assets
Current assets:
	Cash and cash equivalents		$	1,605,084			$	2,358,955
	Accounts receivable			651,734				786,877
	Inventory			572,356				407,434
	Prepaid expenses and other current assets			107,734				44,902
	Total current assets			2,936,908				3,598,168
Property and equipment, net				423,489				460,513
Total assets			$	3,360,397			$	4,058,681
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	282,897			$	289,820
	Accrued compensation and related costs			317,020				588,097
	Accrued expenses and other current liabilities			159,108				153,875
	Deferred revenue			839,863				1,516,792
	Total current liabilities			1,598,888				2,548,584
Long-term liabilities:
	Accrued rent liability - long-term			132,586				144,990
Total liabilities				1,731,474				2,693,574
Commitments and contingencies
Stockholders' equity:
	Preferred stock $0.005 par value; 2,000,000 shares authorized; no shares issued or outstanding as of December 31, 2013 and 2012			-				-
	Common stock $0.005 par value; 500,000,000 shares authorized; 158,328,245 shares issued and 158,285,045 shares outstanding as of December 31, 2013 and 2012, respectively			791,641				791,641
	Additional paid-in capital			13,169,477				13,144,044
	Treasury stock at cost, 43,200 common shares as ofDecember 31, 2013 and 2012, respectively			(2,981	)			(2,981	)
	Accumulated deficit			(12,329,214	)			(12,567,597	)
	Total stockholders' equity			1,628,923				1,365,107
Total liabilities and stockholders' equity			$	3,360,397			$	4,058,681

VIRTRA SYSTEMS, INC. STATEMENTS OF OPERATIONS for the period:

			Three months ended March 31,
			2014			2013
Net revenues			$	1,961,650		$	2,489,666
Cost of products sold				751,192			752,427
Gross margin				1,210,458			1,737,239
General and administrative expenses				972,882			1,203,879
Income from operations				237,576			533,360
Other income/(expense):
	Other income			807			28
	Other expense			-			(3,411	)
Net other income/(expense)				807			(3,383	)
Income before income taxes				238,383			529,977
Income tax expense/(benefit)				-			-
Net income			$	238,383		$	529,977
Weighted average of common and common equivalent shares outstanding:
	-Basic			158,285,045			158,285,045
Net income per common and common equivalent share:
	-Basic		$	0.00		$	0.00

VIRTRA SYSTEMS, INC. STATEMENTS OF STOCKHOLDERS' (DEFICIT)/EQUITY for the period:

		Common stock
							Additional			Treasury				Accumulated
		Shares		Amount			paid-in capital			Stock				Deficit				Total
Balance at January 1, 2013		158,285,045		$	791,641		$	13,032,498		$	(2,981	)		$	(14,148,373	)		$	(327,215	)
Net income		-			-			-			-				1,580,776				1,580,776
Stock-based compensation		-			-			111,546			-				-				111,546
Balance at December 31, 2013		158,285,045			791,641			13,144,044			(2,981	)			(12,567,597	)			1,365,107
Net income		-			-			-			-				238,383				238,383
Stock-based compensation		-			-			25,433			-				-				25,433
Balance at March 31, 2014		158,285,045		$	791,641		$	13,169,477		$	(2,981	)		$	(12,329,214	)		$	1,628,923

VIRTRA SYSTEMS, INC. STATEMENTS OF CASH FLOWS for the period:

			Three months ended March 31,
			2014				2013
Cash flows from operating activities:
Net income			$	238,383			$	529,977
Adjustments to reconcile net income to net cashprovided by operating activities:
	Depreciation and amortization			52,024				56,067
	Stock-based compensation			25,433				26,598
Changes in operating assets and liabilities:
	Accounts receivable			135,143				(263,673	)
	Inventory			(164,922	)			(12,715	)
	Prepaid expenses and other assets			(62,832	)			791
	Accounts payable and other accrued expenses			(285,171	)			30,434
	Deferred revenue			(676,929	)			(551,119	)
Net cash provided by operating activities				(738,871	)			(183,640	)
Cash flows from investing activities:
	Purchase of property and equipment			(15,000	)			(970	)
Net cash used in investing activities				(15,000	)			(970	)
Cash flows from financing activities:
	Draws on line of credit			-				150,000
	Repayments of line of credit			-				(150,000	)
	Payments on term loan			-				(19,843	)
Net cash provided by/(used in) financing activities				-				(19,843	)
Increase/(decrease) in cash and cash equivalents				(753,871	)			(204,453	)
Cash and cash equivalents, beginning of period				2,358,955				372,119
Cash and cash equivalents, end of period			$	1,605,084			$	167,666
Cash paid during the period for:
Interest			$	7,738			$	2,668
Taxes			$	-			$	-

Investor Relations Counsel Rudy R. Miller Chairman, President & CEO The Miller Group www.themillergroup.net tel: 602.225.0505 email: virtra@themillergroup.net