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TEMPE, Ariz., May 13, 2019 (GLOBE NEWSWIRE) -- VirTra, Inc. (NASDAQ: VTSI) (“VirTra”), a global provider of training simulators for the law enforcement, military, educational and commercial markets, reported results for the first quarter ended March 31, 2019. The financial statements are available on VirTra’s website and here.
First Quarter 2019 and Recent Highlights:
First Quarter 2019 Financial Highlights:
|All figures in millions, except per share data||Q1 2019||Q1 2018||% Δ||Q1 2019||Q4 2018||% Δ|
“The first quarter of 2019 marked an important point in our company’s development, as we began implementing new strategic growth initiatives, which we believe will have a substantial positive impact on our business in the years to come,” said Bob Ferris, Chairman and Chief Executive Officer of VirTra. “In the first quarter, we launched the STEP program, a subscription model for our products that lowers the barrier to entry for many customers, we introduced new curriculum for high-risk vehicle stops, and announced our new Driving Simulator product line for which we have already secured a $1.9 million contract with an existing customer. In addition to these exciting new initiatives, we strengthened our product offerings by acquiring key patents for drop-in recoil kits, along with bolstering our management team with the addition of industry veteran Steve Handel, who is now serving as our new VP of Program Management.
“From a financial perspective, we saw many sequential improvements in our results, including a 20% increase in revenue, an 88% increase in gross profit, and gross margins increasing to 59%, which is more in-line with our historical numbers. Our balance sheet continues to remain strong with nearly $4.6 million in cash, cash equivalents and CDs. During the first quarter, we repurchased 68,239 shares of common stock at an average cost of $3.82 per share and retired all outstanding treasury shares of our common stock. Subsequent to the quarter, we repurchased an additional 14,450 shares at an average cost of $3.97 per share. In addition, new bookings for the first quarter totaled $5.3 million and backlog increased to $9.0 million, which bodes well for our business and gives us confidence in our outlook that 2019 has the potential to be a strong year for VirTra.
“While the benefits of these new initiatives will take time to come to fruition, we are confident that they will be of great value to our business over the coming quarters and years. We believe that the additions of our new programs and our ever-improving product suite, combined with our strong balance sheet, mean that VirTra is now more flexible, dynamic, and in the best position in our company’s history to capture a greater share of our core law enforcement market, while also expanding into the military market. We believe that these positive changes ultimately will translate to greater value for our loyal shareholders and better training that saves lives. This is an exciting time at VirTra, and we look forward to building on our progress throughout the year.”
First Quarter 2019 Financial Results
Total revenue increased 20% to $3.1 million from $2.5 million in the prior quarter and decreased 7% from $3.3 million in the first quarter of 2018. The year-over-year decrease in total revenue was due to lower simulator and accessories sales, which were partially offset by increases in recurring extended warranty and other revenues.
Gross profit increased 88% to $1.8 million (59.0% of total revenue) from $1.0 million (37.8% of total revenue) in the prior quarter and decreased 20% from $2.3 million (68.8% of total revenue) in the first quarter of 2018. The year-over-year decrease in gross profit was primarily due to differences in the product mix and quantity of systems, accessories and services sold.
Net operating expense decreased 20% to $2.3 million from $2.8 million in the prior quarter and decreased 7% from $2.4 million in the first quarter of 2018. The decrease in net operating expense was due to reduced selling, general and administrative costs for labor, benefits, professional services, public company expense, research and development expenses and bad debt.
Loss from operations was $457,000 compared to a loss of $1.9 million in the prior quarter and a loss of $158,000 in the first quarter of 2018.
Net loss totaled $313,000, or $(0.04) per diluted share, compared to a loss of $1.1 million, or $(0.13) per diluted share, in the prior quarter and a loss of $86,000, or $(0.01) per diluted share, in the first quarter of 2018.
Cash and cash equivalents and certificates of deposit totaled $4.6 million at quarter end.
Adjusted EBITDA loss totaled $278,000 compared to a loss of $46,000 in the first quarter of 2018.
VirTra management will hold a conference call today (May 13, 2019) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTra’s Chairman and CEO, Bob Ferris, and CFO, Judy Henry, will host the call, followed by a question and answer period.
U.S. dial-in number: 877-407-8031
International number: 201-689-8031
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 VirTra’s IR team at 949-574-3860.
A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 27, 2019.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 48710
VirTra (NASDAQ: VTSI) is a global provider of 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 EBITDA
Adjusted 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 loss to Adjusted EBITDA is provided in the following table:
|Three Months Ended|
|March 31,||March 31,||Increase||%|
|Depreciation and amortization||141,783||68,619||73,164||107||%|
|Provision for income tax benefit||(107,000||)||(29,194||)||(77,806||)||267||%|
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 SEC. You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the Securities and Exchange Commission 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.
|CONDENSED BALANCE SHEETS|
|March 31, 2019||December 31, 2018|
|Cash and cash equivalents||$||1,286,578||$||2,500,381|
|Certificates of deposit||3,290,000||3,490,000|
|Accounts receivable, net||1,339,245||1,302,010|
|That's Eatertainment note receivable, net, related party||301,876||292,138|
|Trade note receivable, net||30,860||96,282|
|Prepaid expenses and other current assets||812,204||377,520|
|Total current assets||9,922,284||10,380,871|
|Property and equipment, net||700,296||678,245|
|Operating lease right-of-use asset||1,604,867||-|
|Intangible assets, net||158,519||-|
|Trade note receivable, long-term||61,875||6,843|
|Security deposits, long-term||339,756||339,756|
|Other assets, long-term||348,461||292,298|
|Deferred tax asset, net||2,507,000||2,400,000|
|Investment in That's Eatertainment, related party||1,120,000||1,120,000|
|Total long-term assets||6,840,774||4,837,142|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accrued compensation and related costs||728,183||613,692|
|Accrued expenses and other current liabilities||665,997||632,606|
|Note payable, current||11,250||11,250|
|Operating lease liability, short-term||262,575||-|
|Deferred revenue, short-term||2,091,206||1,924,307|
|Total current liabilities||4,375,465||3,611,803|
|Deferred revenue, long-term||963,019||962,356|
|Deferred rent liability||-||46,523|
|Operating lease liability, long-term||1,400,987||-|
|Total long-term liabilities||2,364,006||1,008,879|
|Commitments and contingencies (See Note 10)|
|Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued|
|Common stock $0.0001 par value; 50,000,000 shares authorized; 7,748,705 shares|
|issued and outstanding as of March 31, 2019 and 7,827,651 issued||775||783|
|and 7,816,944 shares outstanding as of December 31, 2018|
|Class A common stock $0.0001 par value; 2,500,000 shares authorized; no shares|
|issued or outstanding||-||-|
|Class B common stock $0.0001 par value; 7,500,000 shares authorized; no shares|
|issued or outstanding||-||-|
|Treasury stock at cost; nil shares outstanding as of March 31, 2019 and||-||(37,308||)|
|10,707 shares outstanding as of December 31, 2018|
|Additional paid-in capital||13,974,692||14,272,834|
|Total stockholders' equity||10,023,587||10,597,331|
|Total liabilities and stockholders' equity||$||16,763,058||$||15,218,013|
|CONDENSED STATEMENTS OF OPERATIONS|
|Three Months Ended|
|March 31, 2019||March 31, 2018|
|That's Eatertainment royalties/licensing fees, related party||39,637||43,788|
|Other royalties/licensing fees||-||2,180|
|Cost of sales||1,250,869||1,026,156|
|General and administrative||1,901,931||2,053,305|
|Research and development||355,641||367,544|
|Total operating expense||2,257,572||2,420,849|
|Loss from operations||(457,103||)||(158,213||)|
|Other income (expense)|
|Net other income||37,201||43,232|
|Loss before provision for income taxes||(419,902||)||(114,981||)|
|Provision (benefit) for income taxes||(107,000||)||(29,194||)|
|Net loss per common share:|
|Weighted average shares outstanding:|
|CONDENSED STATEMENTS OF CASH FLOWS|
Three Months Ended
|March 31, 2019||March 31, 2018|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash used by operating activities:|
|Depreciation and amortization||141,783||68,619|
|Changes in operating assets and liabilities:|
|Accounts receivable, net||(37,235||)||(194,502||)|
|That's Eatertainment note receivable, net, related party||(3,652||)||-|
|Trade note receivable, net||4,304||-|
|Prepaid expenses and other current assets||(434,684||)||(143,341||)|
|Accounts payable and other accrued expenses||334,188||461,062|
|Payments on operating lease liability||(57,818||)||-|
|Net cash used by operating activities||(900,598||)||(395,335||)|
|Cash flows from investing activities:|
|Purchase of certificates of deposit||(1,880,000||)||-|
|Redemption of certificates of deposit||2,080,000||-|
|Purchase of intangible assets||(160,000||)|
|Purchase of property and equipment||(94,994||)||(167,490||)|
|Proceeds from sale of property and equipment||2,631||-|
|Net cash used in investing activities||(52,363||)||(167,490||)|
|Cash flows from financing activities:|
|Purchase of treasury stock||(260,842||)||-|
|Net cash used in financing activities||(260,842||)||-|
|Net decrease in cash||(1,213,803||)||(562,825||)|
|Cash, beginning of period||2,500,381||5,080,445|
|Cash, end of period||$||1,286,578||$||4,517,620|
|Supplemental disclosure of cash flow information:|
|Supplemental disclosure of non-cash investing and financing activities:|
|Conversion of accounts to notes receivable||-||400,906|