VirTra, Inc. (Nasdaq:VTSI) (the “Company”), a
global provider of simulators for the law enforcement, military,
educational and commercial markets, today announced its financial
results for the fourth quarter and 12 months ended December 31,
2017. The financial statements are available on VirTra’s website
and here.
Fourth Quarter and Full-Year 2017
Financial Highlights:
|
Q4 2017 |
Q4 2016 |
% Δ |
FY 2017 |
FY 2016 |
% Δ |
Revenues |
$2.4M |
$3.0M |
(20.8)% |
$16.5M |
$15.7M |
5.6% |
Gross Profit |
$0.9M |
$1.9M |
(50.2)% |
$10.2M |
$9.7M |
5.7% |
Gross Margin |
39.5% |
62.9% |
(23.4)% |
61.9% |
61.9% |
0.0% |
Income (Loss) from Operations |
$(1.5)M |
$(0.3)M |
N/A |
$1.3M |
$2.1M |
(38.6)% |
Impairment on Investment |
$0.6M |
- |
N/A |
$0.6M |
- |
N/A |
Income Tax (Benefit) Expense |
$(2.6)M |
- |
N/A |
$(2.5)M |
$0.1M |
N/A |
Net Income (Loss) |
$0.5M |
$(0.3)M |
N/A |
$3.3M |
$2.1M |
59.1% |
Diluted EPS |
$0.06 |
$(0.04) |
N/A |
$0.39 |
$0.24 |
71.1% |
Adjusted EBITDA |
|
|
|
$1.8M |
$2.5M |
(28.0)% |
|
|
|
|
|
|
|
Business and Financial
Highlights:
- Accepted onto the Nasdaq Capital Market and registered our
common stock with the SEC, effective March 29, 2018.
- Received three delivery orders valued at approximately $4.6
million for law enforcement simulators under the previously
announced indefinite delivery/indefinite quantity (IDIQ) contract
with the United States Department of State (DOS).
- Formed a strategic partnership with Haley Strategic Partners, a
provider of sophisticated firearms training, solutions and
accessories, called “D7 Powered by VirTra.”
- Announced an order valued at $1.38 million with delivery to
occur to a country in Africa, furthering VirTra’s international
expansion.
- Installed a VirTra V-300™ simulator for the O’Fallon (Missouri)
Police Department in its newly built Justice Center.
- Net cash provided by operating activities of $2.7 million for
2017 compared to $1.8 million for 2016.
- Cash and cash equivalents increased to $5.1 million at December
31, 2017, up from $3.7 million at December 31, 2016.
“In 2017 not only did we exceed our previous year’s record
revenue level but we also invested in improving our ability to
serve our customers and shareholders in the future,” commented Bob
Ferris, Chairman and Chief Executive Officer of VirTra. “The
simulator training industry continues to grow through new customer
adoption and interest for our solutions is robust. Orders booked in
the first quarter for delivery and recognition during 2018
represent a record for VirTra, bolstering our confidence that 2018
will be another record year with great potential for top and
bottom-line growth. This progress validates our decision to invest
to improve our entire organization to meet growing demand. Our
customers, increasingly, are recognizing the value and benefits of
simulations-based training, helping expand our addressable market
and reinforcing our confidence in market demand. From that
standpoint, 2017 was a year of investment, in people, processes,
and enhanced solutions to build on VirTra’s already exceptional
reputation in the market. Moving to the Nasdaq is an important step
in this process, as a Nasdaq listing – along with our strong
balance sheet -- provides confidence and comfort to potential
customers around the world. In addition, our strong balance sheet
and Nasdaq listing increases the number of potential acquisitions
for us to carefully consider, creating additional growth
opportunity for VirTra. As I look to the future, I have never been
more excited about VirTra’s long-term potential, and I believe 2018
has the potential to be a very good year for us and our
shareholders.”
“While 2017 was a solid year for VirTra, the fourth quarter was
impacted by a combination of accommodating customer delivery
schedules that resulted in lower recognized revenue and one-time
costs allocated to the fourth quarter,” continued Mr. Ferris. “To
be sure, timing of orders and deliveries and revenue recognition
rules can result in quarter-to-quarter fluctuations. The shifting
of certain deliveries from late 2017 into mid-2018, coupled with
continued strong demand and a higher-performing sales organization,
bolsters our confidence in VirTra’s future.”
Financial Results for the Three Months Ended December
31, 2017
Total revenues were $2.4 million for the fourth quarter of 2017
compared to $3.0 million for the fourth quarter of 2016, a decrease
of 20.8%. The year-over-year decrease was due to the timing of
certain orders under contracts being delivered ahead of schedule
and therefore being recognized during the third quarter 2017, while
other orders were delayed by customers, shifting revenue into
future periods.
Gross profit was $940,000, or 39.5% gross profit margin, for the
fourth quarter of 2017 compared to gross profit of $1.9 million, or
62.9% gross margin, for the fourth quarter of 2016, a gross profit
decrease of 50%. The year-over-year decrease in gross profit margin
was primarily due to a non-recurring, non-cash adjustment in the
carrying value of certain inventory.
Net operating expense was $2.5 million for the fourth quarter of
2017 compared to $2.2 million in the fourth quarter of 2016. The
higher expense was primarily due to expanding staffing levels,
annual increases in payroll and benefits for current staff, sales
and marketing expansion, increases in non-recurring public company
related one-time costs, new research and development work and IT
infrastructure upgrades. Approximately $411,000 of these costs are
non-recurring in nature.
Loss from operations for the fourth quarter of 2017 was $1.5
million compared to a loss from operations of $303,000 in the
fourth quarter of 2016. The increase in operating loss was
primarily due to decreases in revenues and increases in net
operating expense to include $411,000 of costs that are
non-recurring in nature.
During the fourth quarter, VirTra recorded a non-cash,
non-recurring income tax benefit of $2.6 million, reflecting a
reversal of the Company’s previously established valuation
allowance, partially offset by the effect of a change in the
federal income tax rate due to federal income tax reform, applied
to VirTra’s deferred tax assets and miscellaneous state income
taxes.
In addition, management regularly evaluates the recoverability
of its investment based on the investee company’s performance and
financial position. During the fourth quarter, VirTra recognized an
impairment loss of $613,000 related to the investment in Modern
Round Entertainment Corporation.
Inclusive of this income tax benefit and the impairment loss,
net income for the fourth quarter of 2017 was $470,000, or $(0.06)
per basic and diluted share, compared to a net loss of $311,000, or
($0.04) per basic and diluted share, for the prior year’s fourth
quarter.
Adjusted EBITDA was $(1,553,287) for the fourth quarter of 2017
compared to $(106,671) for the fourth quarter of 2016, a decrease
of 1,356%.
Financial Results for the 12 Months Ended December 31,
2017
Total revenues were $16.5 million for the full year 2017
compared to $15.7 million for the full year 2016, an increase of
5.6%. Gross profit was $10.2 million, or 61.9% gross profit margin,
for the full year 2017 compared to gross profit of $9.7 million, or
also 61.9% gross profit margin, for the full year 2016, a gross
profit increase of 5.7%. Net operating expense was $8.9 million for
the full year 2017 compared to $7.6 million for the full year
2016.
Income from operations for the full year 2017 was $1.3 million
compared to $2.1 million for the full year 2016. Inclusive of the
$2.5 million income tax benefit and the impairment loss described
above, full-year net income was $3.3 million for 2017, or $0.41 per
basic and $0.39 per diluted share, compared to $2.1 million, or
$0.26 per basic and $0.24 per diluted share, for the full year
2016.
Adjusted EBITDA was $1.8 million for the full year 2017 compared
to $2.5 million for the full year 2016, a decrease of 28.0% and
includes $411,000 one-time costs and expenses associated with
registering the company with the SEC and preparing the company to
be listed on The Nasdaq Capital Market.
Balance Sheet Summary
Stockholders’ equity increased to $10.5 million at December 31,
2017 compared to $6.4 million at December 31, 2016. Cash and cash
equivalents were $5.1 million at December 31, 2017 compared to $3.7
million at December 31, 2016. The Company had essentially no
outstanding bank debt at December 31, 2017.
Share Repurchase
Since June, 2017 the Company has been repurchasing shares of its
common stock under the current share repurchase authorization
approved by its Board of Directors in October of 2016. To date,
these shares have been purchased in the open market pursuant to a
trading plan that has been adopted in accordance with Rule 10b-18
of the Securities and Exchange Commission. On a split-adjusted
basis, the Company repurchased 23,467 shares at a cost of $112,109,
an average price of $4.78 per share during the 12 months ended
December 31, 2017.
Conference Call and Webcast
The Company will host a fourth quarter and full year 2017
results and business update investor conference call and webcast on
Thursday, March 29, 2018. Individuals interested in listening to
the webcast live via the Internet may do so by visiting the
Company’s website at www.VirTra.com. A webcast replay will be
available for 60 days.
|
Date:
Thursday, March 29, 2018
Time: 4:30 p.m. ET / 1:30 p.m.
local Dial-in Number: (877) 407-8031 International
Dial-in Number: (201) 689-8031 Webcast:
http://www.investorcalendar.com/event/26948 |
|
|
Participants are recommended to dial-in approximately 10 minutes
prior to the start of the event. A replay of the call will be
available approximately two hours after completion through April
12, 2018. To listen to the replay, dial (877) 481-4010 (domestic)
or (919) 882-2331 (international) and use replay ID 26948. The
webcast replay will be available through June 29, 2018.
About VirTra
VirTra is a global provider of 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 realistic and highly-effective virtual reality and
simulator technology. Learn more about VirTra at
www.VirTra.com.
Forward-looking Statements
This news release includes certain information that may
constitute forward-looking statements. Forward-looking
statements are typically identified by terminology such as “could,”
“may,” "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, and 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.
Media
contact:Susan LehmanSlehman@virtra.com(510) 599-6555 |
|
Investor
Relations contact: Brett Maasvtsi@haydenir.com(646) 536-7331 |
|
|
|
- - - -FINANCIALS FOLLOWING- - - -
VIRTRA, INC. |
CONDENSED BALANCE SHEETS |
|
|
December 31, |
|
December 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
ASSETS |
|
|
|
CURRENT ASSETS |
|
|
|
Cash and
cash equivalents |
$ |
5,080,445 |
|
|
$ |
3,703,579 |
|
Accounts
receivable, net |
|
1,478,135 |
|
|
|
3,244,852 |
|
Inventory, net |
|
1,720,438 |
|
|
|
1,319,944 |
|
Unbilled
revenue |
|
1,222,047 |
|
|
|
107,297 |
|
Prepaid
expenses and other current assets |
|
586,439 |
|
|
|
250,066 |
|
|
|
|
|
Total
current assets |
|
10,087,504 |
|
|
|
8,625,738 |
|
|
|
|
|
Property and equipment,
net |
|
677,273 |
|
|
|
814,323 |
|
Deferred tax assets,
net |
|
2,710,182 |
|
|
|
- |
|
Investment in MREC |
|
1,374,933 |
|
|
|
471,928 |
|
|
|
|
|
TOTAL
ASSETS |
$ |
14,849,892 |
|
|
$ |
9,911,989 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
Accounts
payable |
$ |
535,795 |
|
|
$ |
467,679 |
|
Accrued
compensation and related costs |
|
593,491 |
|
|
|
617,582 |
|
Accrued
expenses and other current liabilities |
|
243,573 |
|
|
|
194,668 |
|
Notes
payable, current |
|
11,250 |
|
|
|
11,250 |
|
Deferred
revenue |
|
2,992,912 |
|
|
|
2,065,905 |
|
|
|
|
|
Total
current liabilities |
|
4,377,021 |
|
|
|
3,357,084 |
|
|
|
|
|
Long-term
liabilities: |
|
|
|
Deferred
rent liability |
|
75,444 |
|
|
|
122,126 |
|
Notes
payable, long-term |
|
11,250 |
|
|
|
22,500 |
|
|
|
|
|
Total
long-term liabilities |
|
86,694 |
|
|
|
144,626 |
|
|
|
|
|
Total liabilities |
|
4,463,715 |
|
|
|
3,501,710 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
Preferred
stock $0.0001 par value; 5,000,000 authorized; no shares
issued |
|
|
|
or
outstanding |
|
- |
|
|
|
- |
|
Common
stock $0.0001 par value; 100,000,000 shares authorized; 7,927,589
shares |
|
|
|
issued
and 7,904,122 outstanding as of December 31, 2017 and
7,927,589 |
|
793 |
|
|
|
1,586 |
|
issued
and outstanding as of December 31, 2016. |
|
|
|
Class A
common stock $0.0001 par value; 5,000,000 shares authorized; no
shares |
|
|
|
issued or
outstanding |
|
- |
|
|
|
- |
|
Class B
common stock $0.0001 par value; 15,000,000 shares authorized; no
shares |
|
|
|
issued or
outstanding |
|
- |
|
|
|
- |
|
Treasury
stock at cost; 23,467 shares and no shares outstanding |
|
(112,109 |
) |
|
|
- |
|
as of
December 31, 2017 and December 31, 2016, respectively |
|
|
|
Additional paid-in capital |
|
14,954,563 |
|
|
|
14,128,044 |
|
Accumulated deficit |
|
(4,457,070 |
) |
|
|
(7,719,351 |
) |
|
|
|
|
Total
stockholders' equity |
|
10,386,177 |
|
|
|
6,410,279 |
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
14,849,892 |
|
|
$ |
9,911,989 |
|
|
|
|
|
VIRTRA, INC. |
CONDENSED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
REVENUES |
|
|
|
|
|
|
|
Net
sales |
$ |
2,332,062 |
|
|
$ |
2,959,987 |
|
|
$ |
16,234,278 |
|
|
$ |
15,562,121 |
|
Royalties/licensing fees |
|
44,865 |
|
|
|
42,217 |
|
|
|
289,947 |
|
|
|
90,047 |
|
Total
revenue |
|
2,376,927 |
|
|
|
3,002,204 |
|
|
|
16,524,225 |
|
|
|
15,652,168 |
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
1,437,084 |
|
|
|
1,113,150 |
|
|
|
6,290,879 |
|
|
|
5,970,058 |
|
|
|
|
|
|
|
|
|
Gross
profit |
|
939,843 |
|
|
|
1,889,054 |
|
|
|
10,233,346 |
|
|
|
9,682,110 |
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES |
|
|
|
|
|
|
|
General
and administrative |
|
2,126,310 |
|
|
|
1,839,146 |
|
|
|
7,641,765 |
|
|
|
6,471,194 |
|
Research
and development |
|
353,110 |
|
|
|
352,960 |
|
|
|
1,285,064 |
|
|
|
1,084,590 |
|
|
|
|
|
|
|
|
|
Net
operating expense |
|
2,479,420 |
|
|
|
2,192,106 |
|
|
|
8,926,829 |
|
|
|
7,555,784 |
|
|
|
|
|
|
|
|
|
Income/(loss) from operations |
|
(1,539,577 |
) |
|
|
(303,052 |
) |
|
|
1,306,517 |
|
|
|
2,126,326 |
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Other
income |
|
15,427 |
|
|
|
21,022 |
|
|
|
67,837 |
|
|
|
26,612 |
|
Other
expense |
|
- |
|
|
|
|
|
(4,123 |
) |
|
|
Impairment in MREC |
|
(613,241 |
) |
|
|
- |
|
|
|
(613,241 |
) |
|
|
(164 |
) |
|
|
|
|
|
|
|
|
Net other
income/(loss) |
|
(597,814 |
) |
|
|
21,022 |
|
|
|
(549,527 |
) |
|
|
26,448 |
|
|
|
|
|
|
|
|
|
Income/(loss) before income taxes |
|
(2,137,391 |
) |
|
|
(282,030 |
) |
|
|
756,990 |
|
|
|
2,152,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
(2,607,577 |
) |
|
|
29,134 |
|
|
|
(2,505,292 |
) |
|
|
102,752 |
|
|
|
|
|
|
|
|
|
NET
INCOME/(LOSS) |
$ |
470,186 |
|
|
$ |
(311,164 |
) |
|
$ |
3,262,282 |
|
|
$ |
2,050,022 |
|
|
|
|
|
|
|
|
|
Earnings per common
share |
|
|
|
|
|
|
|
Basic |
$ |
0.06 |
|
|
$ |
(0.04 |
) |
|
$ |
0.41 |
|
|
$ |
0.26 |
|
Diluted |
$ |
0.06 |
|
|
$ |
(0.04 |
) |
|
$ |
0.39 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
7,905,597 |
|
|
|
7,912,589 |
|
|
|
7,919,568 |
|
|
|
7,917,356 |
|
Diluted |
|
8,277,958 |
|
|
|
7,912,589 |
|
|
|
8,397,377 |
|
|
|
8,472,192 |
|
|
|
|
|
|
|
|
|
Explanation and Use of Non-GAAP Financial
Measures
Earnings before interest, income taxes, depreciation and
amortization and other non-operating costs and income (“EBITDA”)
and adjusted EBITDA are non-U.S. GAAP measures. Adjusted EBITDA
means net income (i) plus depreciation, (ii) plus non-cash stock
option granted expense, and (iii) plus provision for income taxes.
Other companies may calculate adjusted EBITDA differently. We
calculate adjusted EBITDA to eliminate the impact of certain items
we do not consider to be indicative of the performance of our
ongoing operations. Adjusted EBITDA is presented herein because
management believes the presentation of adjusted EBITDA provides
useful information to the Company’s investors regarding the
Company’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 our industry, several of which present EBITDA and 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 our
results as reported under U.S. GAAP. Adjusted EBITDA should not be
considered as an alternative for net (loss) income, cash flows from
operating activities and other consolidated income or cash flow
statement data prepared in accordance with accounting principles
generally accepted in the United States or as a measure of
profitability or liquidity. A reconciliation of net income to
adjusted EBITDA is provided in the following table:
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME TO ADJUSTED
EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income/(Loss) |
$ |
470,176 |
|
|
$ |
(311,164 |
) |
|
|
$ |
3,262,281 |
|
|
$ |
2,050,022 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
66,354 |
|
|
|
69,650 |
|
|
|
|
270,881 |
|
|
|
192,602 |
|
|
Non-cash
stock option expense |
|
7,124 |
|
|
|
87,796 |
|
|
|
|
167,475 |
|
|
|
181,786 |
|
|
Treasury
stock cancelled |
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
2,981 |
|
|
Other
income-receipt of unclaimed property |
|
- |
|
|
|
17,913 |
|
|
|
|
- |
|
|
|
(17,913 |
) |
|
Impairment loss on MREC |
|
613,241 |
|
|
|
- |
|
|
|
|
613,241 |
|
|
|
- |
|
|
Provision
for income taxes |
|
(2,710,182 |
) |
|
|
29,134 |
|
|
|
|
(2,505,292 |
) |
|
|
102,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(1,553,287 |
) |
|
$ |
(106,671 |
) |
|
|
$ |
1,808,586 |
|
|
$ |
2,512,231 |
|
|
|
|
|
|
|
|
|
|
|
|
Virtra (NASDAQ:VTSI)
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From Feb 2024 to Mar 2024
Virtra (NASDAQ:VTSI)
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From Mar 2023 to Mar 2024