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 first quarter ended March 31, 2018. The financial
statements are available on VirTra’s website and here.
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First Quarter 2018 Financial
Highlights: |
|
|
|
|
|
Q1 2018 |
Q1 2017 |
% Δ |
Revenues |
$3.2M |
$4.2M |
(22.9)% |
Gross Profit |
$2.2M |
$2.4M |
(8.7)% |
Gross Margin |
68.4% |
57.7% |
+1,063 bps |
Net Income (Loss) |
$(0.1)M |
$0.4M |
(121.3)% |
Diluted EPS |
$(0.01) |
$0.05 |
(120.0)% |
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Business and Financial
Highlights:
- Generated a record $8.6 million in bookings in the first
quarter of 2018.
- Received a new $1.25 million contract early in the second
quarter for training simulators from the United States Department
of State.
- Gross profit margin of 68.4% for the first quarter of 2018
compared to 57.7% in the year ago period.
- VirTra’s backlog as of March 31, 2018, was approximately $8.3
million.
“VirTra generated a record level of bookings in the first
quarter, demonstrating strong execution by our expanded and
improved sales organization and the growing demand from law
enforcement professionals around the world for our products,”
commented Bob Ferris, Chairman and Chief Executive Officer of
VirTra. “However, a large portion of these orders were booked too
late in the quarter to convert to revenue, and instead have created
a meaningful backlog to be filled during 2018. The $8.3 million
backlog, combined with the $3.2 million in recognized revenue and a
$1.25 million order secured early in the second quarter, represents
a strong start to 2018 and provides confidence that this will be
another year of growth. In the aggregate, this represents more than
$12.5 million in revenue and potential revenue, approaching the
$16.5 million in recognized revenue for all of 2017.”
“I am encouraged by our sales pipeline and the strong
performance in closing bookings during the first quarter,”
continued Mr. Ferris. “Our margin for the quarter was boosted based
on deliveries of higher margin products to customers and some
improvements in production methods. However, our operating expenses
for the first quarter absorbed many one-time costs, totaling
$132,000, which were directly related to our qualification and
completion of our Regulation A+ offering, completion of SEC
registration, and Nasdaq listing.”
“The market for simulators to help train the police, military
personnel and civilians is robust. With growing demand,
accelerating adoption of simulation training as a way to improve
skills and reduce costs, we are positioned for an outstanding
2018,” concluded Mr. Ferris. “The Board of Directors, management
and the entire VirTra team are committed to serving our worldwide
customers and creating sustainable value for our shareholders, and
I am increasingly optimistic about the future of VirTra.”
Financial Results for the Three Months Ended March 31,
2018
Total revenues were $3.2 million for the first quarter of 2018
compared to $4.2 million for the first quarter of 2017, a decrease
of 22.9%. The year-over-year decrease was due to the receipt of
contracts late in the quarter, resulting in lower deliveries of
simulators and accessories and consequentially not being able to
recognize revenue in the current period, partially offset by
increased sales of scenarios and warranties.
As of March 31, 2018, the Company’s backlog was approximately
$8.3 million. The Company’s backlog consists of orders (all
products and services, including extended warranties) for which a
signed purchase order is in place but delivery is scheduled for a
future date or has not yet been scheduled. Management expects the
majority of the backlog received in the first quarter to be
converted to revenue during 2018 with the exception of the extended
warranties which will convert to revenue on a straight-line basis
over the term of the warranty period ranging between 1-5 years.
Gross profit was $2.2 million, or 68.4% gross profit margin, for
the first quarter of 2018 compared to gross profit of $2.4 million,
or 57.7% gross profit margin, for the first quarter of 2017, a
gross profit decrease of 8.7% but a gross margin improvement of
1,063 basis points. The year-over-year increase in gross profit
margin was primarily due to a reduction in the cost of the
Company’s machine shop manufacturing system and product components
and increases in the sales mix of higher margin products, combined
with a reduction in material costs due to favorable pricing of raw
materials and systems components in 2018 compared to the same
period in 2017.
Operating expense was $2.4 million for the three months ended
March 31, 2018 compared to $2.0 million for the same period in
2017, an increase of $419,559. SG&A increases resulted from
expanding staffing levels and increases in payroll and benefit
costs, professional services increases in annual audit, accounting
and legal fees, public company expense and other fees, licenses,
subscriptions and professional services. The year-over-year
increase in professional services included approximately $132,000
of non-recurring legal and public company expense directly related
to the Company’s qualification and conclusion of its Regulation A+
offering, completion of SEC registration, and Nasdaq listing.
Inclusive of the $132,000 in non-recurring legal and public
company costs, VirTra’s loss from operations for the first quarter
of 2018 was $158,000 compared to income from operations of $474,000
in the first quarter of 2017. Income tax benefit was $29,194
compared to income tax expense of $78,000 for the same period in
2017, an increase of 137%. In accordance with accounting guidance,
the Company made updates to provisional estimates for the deferred
taxes of the Company based on new information obtained during the
three months ended March 31, 2018 and re-measured the updated
provision estimates using the new effective tax rate under the Tax
Act.
Inclusive of the $132,000 in non-recurring legal and public
company costs, Net loss for the first quarter of 2018 was $85,787,
or $(0.01) per basic and diluted share, compared to net income of
$402,000, or $0.05 per basic and diluted share, for the prior
year’s first quarter.
Balance Sheet Summary
Stockholders’ equity decreased to $10.3 million at March 31,
2018 compared to $10.4 million at December 31, 2017. Cash and cash
equivalents were $4.5 million at March 31, 2018 compared to $5.1
million at December 31, 2017. The Company had essentially no
outstanding bank debt at March 31, 2018.
Conference Call and Webcast
The Company will host a first quarter 2018 results and business
update investor conference call and webcast on Monday, May 14,
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: Monday, May 14, 2018
Time: 4:30 p.m. ET / 1:30 p.m.
local Dial-in Number: 877-407-8031International Dial-in
Number: 201-689-8031Webcast:
http://www.investorcalendar.com/event/29320
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 May 28,
2018. To listen to the replay, dial (877) 481-4010 (domestic) or
(919) 882-2331 (international) and use replay ID 29320. The webcast
replay will be available through August 14, 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:
Investor Relations contact: Susan Lehman
Brett MaasSlehman@virtra.com
vtsi@haydenir.com(510) 599-6555
(646) 536-7331
- - - -FINANCIALS FOLLOWING- - - -
|
VIRTRA, INC. |
CONDENSED BALANCE SHEETS |
(Unaudited) |
|
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|
March 31, 2018 |
|
December 31, 2017 |
|
|
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|
ASSETS |
CURRENT ASSETS |
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|
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Cash and
cash equivalents |
|
|
|
|
$ |
4,517,620 |
|
|
$ |
5,080,445 |
|
Accounts
receivable, net |
|
|
|
|
|
1,271,732 |
|
|
|
1,478,135 |
|
Note receivable, current |
|
|
|
209,331 |
|
|
|
- |
|
Inventory, net |
|
|
|
|
|
2,082,354 |
|
|
|
1,720,438 |
|
Unbilled revenue |
|
|
|
|
478,081 |
|
|
|
1,222,047 |
|
Prepaid
expenses and other current assets |
|
|
|
|
|
729,780 |
|
|
|
586,439 |
|
|
|
|
|
|
|
|
|
Total
current assets |
|
|
|
|
|
9,288,898 |
|
|
|
10,087,504 |
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
|
|
|
776,145 |
|
|
|
677,273 |
|
Note receivable,
long-term |
|
|
|
|
|
191,574 |
|
|
|
- |
|
Deferred tax assets,
net |
|
|
|
|
|
2,740,000 |
|
|
|
2,710,182 |
|
Investment in MREC |
|
|
|
|
|
1,374,933 |
|
|
|
1,374,933 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
|
|
|
$ |
14,371,550 |
|
|
$ |
14,849,892 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
|
Accounts
payable |
|
|
|
|
$ |
785,509 |
|
|
$ |
535,795 |
|
Accounts
payable - related party |
|
|
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|
|
|
Accrued
compensation and related costs |
|
|
|
|
|
787,121 |
|
|
|
593,491 |
|
Accrued
expenses and other current liabilities |
|
|
|
|
|
261,293 |
|
|
|
243,573 |
|
Note
payable, current |
|
|
|
|
|
11,250 |
|
|
|
11,250 |
|
Deferred
revenue |
|
|
|
|
|
2,151,709 |
|
|
|
2,992,912 |
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
|
|
|
3,996,882 |
|
|
|
4,377,021 |
|
|
|
|
|
|
|
|
|
Long-term
liabilities: |
|
|
|
|
|
|
|
Deferred
rent liability |
|
|
|
|
|
63,028 |
|
|
|
75,444 |
|
Note
payable, long-term |
|
|
|
|
|
11,250 |
|
|
|
11,250 |
|
|
|
|
|
|
|
|
|
Total
long-term liabilities |
|
|
|
|
|
74,278 |
|
|
|
86,694 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
4,071,160 |
|
|
|
4,463,715 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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; 7,927,774
shares |
|
|
|
|
|
|
|
issued
and 7,904,307 shares outstanding as of March 31, 2018 and |
|
|
|
|
|
793 |
|
|
|
793 |
|
December
31, 2017. |
|
|
|
|
|
|
|
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 outstanding as of March 31, 2018 |
|
|
|
|
|
(112,109 |
) |
|
|
(112,109 |
) |
and
December 31, 2017. |
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
|
|
|
14,954,563 |
|
|
|
14,954,563 |
|
Accumulated deficit |
|
|
|
|
|
(4,542,857 |
) |
|
|
(4,457,070 |
) |
|
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
|
|
|
10,300,390 |
|
|
|
10,386,177 |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
$ |
14,371,550 |
|
|
$ |
14,849,892 |
|
|
|
|
|
|
|
|
|
See accompanying notes to unaudited condensed
financial statements. |
|
|
|
|
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|
|
|
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|
|
|
|
|
|
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|
VIRTRA, INC. |
CONDENSED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 31, 2018 |
|
March 31, 2017 |
REVENUES |
|
|
|
Net
sales |
$ |
3,198,222 |
|
|
$ |
4,165,476 |
Royalties/licensing fees |
|
45,968 |
|
|
|
43,812 |
Total
revenue |
|
3,244,190 |
|
|
|
4,209,288 |
|
|
|
|
Cost of
sales |
|
1,026,156 |
|
|
|
1,778,945 |
|
|
|
|
Gross
profit |
|
2,218,034 |
|
|
|
2,430,343 |
|
|
|
|
OPERATING
EXPENSES |
|
|
|
General
and administrative |
|
2,008,703 |
|
|
|
1,614,498 |
Research
and development |
|
367,544 |
|
|
|
342,190 |
|
|
|
|
Net
operating expense |
|
2,376,247 |
|
|
|
1,956,688 |
|
|
|
|
Income/(loss) from operations |
|
(158,213 |
) |
|
|
473,655 |
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
Other
income |
|
43,298 |
|
|
|
6,233 |
Other
expense |
|
(66 |
) |
|
|
- |
|
|
|
|
Net other
income |
|
43,232 |
|
|
|
6,233 |
|
|
|
|
Income/(loss) before income taxes |
|
(114,981 |
) |
|
|
479,888 |
|
|
|
|
|
|
|
|
Income
tax expense/(benefit) |
|
(29,194 |
) |
|
|
78,000 |
|
|
|
|
NET
INCOME/(LOSS) |
$ |
(85,787 |
) |
|
$ |
401,888 |
|
|
|
|
Earnings per common
share |
|
|
|
Basic |
$ |
(0.01 |
) |
|
$ |
0.05 |
Diluted |
$ |
(0.01 |
) |
|
$ |
0.05 |
|
|
|
|
Weighted
average shares outstanding |
|
|
Basic |
|
7,904,307 |
|
|
|
7,927,774 |
Diluted |
|
7,904,307 |
|
|
|
8,282,308 |
|
|
|
|
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