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, 2020. The financial statements are
available on VirTra’s website and here.
First Quarter 2020 and Recent Highlights:
- Received $1.6 million IDIQ (indefinite delivery/indefinite
quantity) contract from the Department of State for the Republic of
Mexico for use-of-force simulators and police driving
simulators
- Received $1.1 million order through new distributor in Europe
to provide European law enforcement and military personnel with
industry-leading technology and training methods
- Released new V-VICTA (VirTra Virtual Interactive Coursework
Training Academy) training curriculum to help law enforcement
communicate and interact more effectively and positively with
individuals with autism
- Launched a new website catered to both law enforcement and
military to better market products to prospective customers and
increase sales
- Secured contracts with new customers in Belleview, Orlando, and
other police departments and received maintenance renewal and
upgrades with existing customers, including multiple across
Australia
- Attended 23 events, demos and tradeshows in the first ten weeks
of the year
First Quarter 2020 Financial Highlights:
All figures in millions, except per share data |
Q1 2020 |
Q1 2019 |
% Δ |
Total Revenue |
$ |
3.3 |
|
$ |
3.1 |
|
9 |
% |
|
|
|
|
Gross Profit |
$ |
1.6 |
|
$ |
1.8 |
|
-11 |
% |
Gross Margin |
|
47.8 |
% |
|
59.0 |
% |
-19 |
% |
|
|
|
|
Net
Income (Loss) |
$ |
(0.4 |
) |
$ |
(0.3 |
) |
24 |
% |
Diluted EPS |
$ |
(0.05 |
) |
$ |
(0.04 |
) |
25 |
% |
|
|
|
|
Management Commentary
“During the first quarter of 2020, we continued to build upon
the momentum generated in the second half of last year, despite
impediments that arose at the end of March,” said Bob Ferris,
Chairman and Chief Executive Officer of VirTra. “Financially, the
quarter was highlighted by a 9% increase in revenues to $3.3
million from the first quarter of last year. Operationally, the
quarter was highlighted by a $1.1 million order from a new
distributor in Europe, which is helping expand VirTra’s reputation
as the leader in simulation training to more countries abroad. In
the last two weeks of March as stay-at-home policies were
instituted, some customers requested to delay delivery and
installation of orders, which cut into our first quarter results
but contributed to our record $11.3 million backlog.
“Despite the uncertain COVID-19 macro environment, we have not
seen evidence of sales declining or demand weakening as of today.
However, out of an abundance of caution, we have taken prudent
measures to fortify our balance sheet and ensure we have the
necessary resources to continue executing against our strategic
initiatives. Properly trained law enforcement and military
personnel is integral to the security and well-being of everyone,
and we plan to ensure our growing list of customers have access to
the best simulation training available throughout 2020 and
beyond.”
First Quarter 2020 Financial Results
Total revenue increased 9% to $3.3 million from $3.1 million in
the first quarter of 2019. The increase in total revenue was due to
increases in sales of simulators, accessories, curriculum and
training.
Gross profit decreased 11% to $1.6 million (47.8% of total
revenue) from $1.8 million (59.0% of total revenue) in the first
quarter of 2019. The decrease in gross profit was due to increases
in production staff to support larger volumes of sales in the
future as well as product mix with varying quantity of systems,
accessories and services sold.
Net operating expense decreased 7% to $2.1 million from $2.3
million in the first quarter of 2019. The decrease was mainly due
to reduced selling, general and administrative costs for labor,
benefits, travel, and professional services expense.
Loss from operations was $512,000, compared to a loss of
$457,000 in the first quarter of 2019.
Net loss totaled $389,000, or $(0.05) per diluted share,
compared to net loss of $313,000, or $(0.04) per diluted share, in
the first quarter of 2019.
Adjusted EBITDA loss was $326,000, compared to a loss of
$278,000 in the first quarter of 2019.
At March 31, 2020, backlog totaled approximately $11.3 million.
At March 31, 2020, accounts receivable and unbilled revenues
totaled approximately $5.2 million compared to $5.9 million at
December 31, 2019, a decrease of $695,000. Cash and cash
equivalents and certificates of deposit totaled $3.8 million at
March 31, 2020.
Subsequent Events
On May 8, 2020, VirTra received approval for a $1.3 million
Paycheck Protection Program (PPP) loan from Wells Fargo Bank under
the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The
loan, which is administered through the Small Business Association
(SBA), matures on May 8, 2022 and bears an interest rate of 1% per
annum. In accordance with the Paycheck Protection Program, VirTra
intends to use the funds for designated expenses, which may include
payroll costs, group healthcare benefits, and other permitted
expenses. Under the terms of the PPP loan, up to the entire amount
of principal and accrued interest may be forgiven to the extent PPP
loan proceeds are used for qualifying expenses. VirTra intends to
use its entire PPP loan amount for designated qualifying expenses
and to apply for forgiveness in accordance with the terms of the
PPP loan. No assurance can be given that VirTra will obtain
forgiveness of the PPP loan in whole or in part.
Conference Call
VirTra management will hold a conference call today (May 12,
2020) 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: 844-369-8770International number:
862-298-0840
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.
The conference call will be broadcast live and available for
replay here and via the investor relations section of VirTra’s
website.
A replay of the conference call will be available after 7:30
p.m. Eastern time on the same day through May 26, 2020.
Toll-free replay number: 877-481-4010International replay
number: 919-882-2331Replay ID: 34580
About VirTra VirTra (NASDAQ: VTSI) is a global
provider of judgmental use of force training simulators, firearms
training simulators and driving 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 income to Adjusted EBITDA is
provided in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
Increase |
|
% |
Reconciliation of net loss to adjusted EBITDA |
March 31, 2020 |
|
March 31, 2019 |
|
(Decrease) |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(389,410 |
) |
|
$ |
(312,902 |
) |
|
$ |
(76,508 |
) |
|
24 |
% |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
(103,000 |
) |
|
|
(107,000 |
) |
|
|
4,000 |
|
|
-4 |
% |
|
|
Depreciation and amortization |
|
89,676 |
|
|
|
71,794 |
|
|
|
17,882 |
|
|
25 |
% |
|
EBITDA |
$ |
(402,734 |
) |
|
$ |
(348,108 |
) |
|
$ |
(54,626 |
) |
|
16 |
% |
|
|
Right of use amortization |
|
72,843 |
|
|
|
69,989 |
|
|
|
2,854 |
|
|
4 |
% |
|
|
Reserve for note receivable |
|
3,639 |
|
|
|
- |
|
|
|
3,639 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
(326,252 |
) |
|
$ |
(278,119 |
) |
|
$ |
(48,133 |
) |
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
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 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.
Investor Relations Contact:
Matt Glover or Charlie Schumacher
VTSI@gatewayir.com949-574-3860
VIRTRA,
INC. |
|
CONDENSED
BALANCE SHEETS |
|
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$
3,116,893 |
|
$
1,415,091 |
|
Certificates
of deposit |
720,000 |
|
1,915,000 |
|
Accounts
receivable, net |
3,371,034 |
|
2,307,972 |
|
Interest
receivable |
6,752 |
|
7,340 |
|
Inventory,
net |
2,145,086 |
|
1,949,414 |
|
Unbilled
revenue |
1,821,636 |
|
3,579,942 |
|
Prepaid
expenses and other current assets |
471,428 |
|
353,975 |
|
|
|
|
|
|
Total current assets |
11,652,829 |
|
11,528,734 |
|
|
|
|
|
Long-term assets: |
|
|
|
|
Property and
equipment, net |
1,137,641 |
|
1,028,198 |
|
Operating
lease right-of-use asset, net |
1,318,030 |
|
1,390,873 |
|
Intangible
assets, net |
238,895 |
|
217,930 |
|
That's
Eatertainment note receivable, long term, net, related party |
291,110 |
|
291,110 |
|
Security
deposits, long-term |
19,712 |
|
19,712 |
|
Other
assets, long-term |
333,559 |
|
351,236 |
|
Deferred tax
asset, net |
1,895,000 |
|
1,792,000 |
|
Investment
in That's Eatertainment, related party |
840,000 |
|
840,000 |
|
|
|
|
|
|
Total long-term assets |
6,073,947 |
|
5,931,059 |
|
|
|
|
|
Total assets |
$ 17,726,776 |
|
$ 17,459,793 |
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts
payable |
$
501,426 |
|
$
621,127 |
|
Accrued
compensation and related costs |
734,336 |
|
611,487 |
|
Accrued
expenses and other current liabilities |
474,308 |
|
334,751 |
|
Operating
lease liability, short-term |
303,182 |
|
297,244 |
|
Deferred
revenue, short-term |
2,956,486 |
|
2,490,845 |
|
|
|
|
|
|
Total current liabilities |
4,969,738 |
|
4,355,454 |
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
Deferred
revenue, long-term |
1,863,921 |
|
1,748,257 |
|
Operating
lease liability, long-term |
1,097,805 |
|
1,174,882 |
|
|
|
|
|
|
Total long-term liabilities |
2,961,726 |
|
2,923,139 |
|
|
|
|
|
Total liabilities |
7,931,464 |
|
7,278,593 |
|
|
|
|
|
Commitments and contingencies (See Note 10) |
|
|
|
|
|
|
|
|
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;
7,752,530 shares |
|
|
|
|
issued and
outstanding as of March 31, 2020 and 7,745,030 shares issued |
776 |
|
775 |
|
and
outstanding as of December 31, 2019 |
|
|
|
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 |
13,898,201 |
|
13,894,680 |
Accumulated deficit |
(4,103,665) |
|
(3,714,255) |
|
|
|
|
|
Total stockholders' equity |
9,795,312 |
|
10,181,200 |
|
|
|
|
|
Total liabilities and stockholders' equity |
$ 17,726,776 |
|
$ 17,459,793 |
|
|
|
|
|
VIRTRA,
INC. |
|
CONDENSED
STATEMENTS OF OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, 2020 |
|
March 31, 2019 |
Revenues: |
|
|
|
|
Net
sales |
$
3,320,013 |
|
$
3,011,701 |
|
That's
Eatertainment royalties/licensing fees, related party |
16,740 |
|
39,637 |
|
Other
royalties/licensing fees |
1,410 |
|
- |
|
Total
revenue |
3,338,163 |
|
3,051,338 |
|
|
|
|
|
|
Cost of
sales |
1,742,936 |
|
1,250,869 |
|
|
|
|
|
|
Gross
profit |
1,595,227 |
|
1,800,469 |
|
|
48.0% |
|
59.8% |
Operating expenses: |
|
|
|
|
General and
administrative |
1,777,376 |
|
1,901,931 |
|
Research and
development |
329,755 |
|
355,641 |
|
|
|
|
|
|
Net
operating expense |
2,107,131 |
|
2,257,572 |
|
|
|
|
|
|
Loss from
operations |
(511,904) |
|
(457,103) |
|
|
|
|
|
Other income (expense): |
|
|
|
|
Other
income |
19,495 |
|
42,282 |
|
Other
expense |
(1) |
|
(5,081) |
|
|
|
|
|
|
Net other
income |
19,494 |
|
37,201 |
|
|
|
|
|
|
Loss before
provision for income taxes |
(492,410) |
|
(419,902) |
|
|
|
|
|
|
|
|
|
|
|
Benefit for
income taxes |
(103,000) |
|
(107,000) |
|
|
|
|
|
Net loss |
$ (389,410) |
|
$ (312,902) |
|
|
|
|
|
Net loss per common share: |
|
|
|
|
Basic |
$ (0.05) |
|
$ (0.04) |
|
Diluted |
$ (0.05) |
|
$ (0.04) |
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
7,745,363 |
|
7,765,624 |
|
Diluted |
7,745,363 |
|
7,765,624 |
|
|
|
|
|
VIRTRA,
INC. |
CONDENSED
STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
|
|
|
Three Months Ended |
|
|
|
March 31, 2020 |
|
March 31, 2019 |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net loss |
$ |
(389,410 |
) |
|
$ |
(312,902 |
) |
|
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
89,676 |
|
|
|
71,794 |
|
|
|
Right of use
amortization |
|
72,843 |
|
|
|
69,989 |
|
|
|
Reserve for
note receivable |
|
3,639 |
|
|
|
- |
|
|
|
Deferred
taxes |
|
(103,000 |
) |
|
|
(107,000 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts
receivable, net |
|
(1,063,062 |
) |
|
|
(37,235 |
) |
|
|
That's
Eatertainment note receivable, net, related party |
|
(3,639 |
) |
|
|
(3,652 |
) |
|
|
Trade note
receivable, net |
|
- |
|
|
|
4,304 |
|
|
|
Interest
receivable |
|
588 |
|
|
|
(1,027 |
) |
|
|
Inventory,
net |
|
(195,672 |
) |
|
|
(96,669 |
) |
|
|
Unbilled
revenue |
|
1,758,306 |
|
|
|
(441,285 |
) |
|
|
Prepaid
expenses and other current assets |
|
(117,453 |
) |
|
|
(434,684 |
) |
|
|
Other
assets |
|
17,677 |
|
|
|
(56,163 |
) |
|
|
Accounts
payable and other accrued expenses |
|
142,705 |
|
|
|
334,188 |
|
|
|
Payments on
operating lease liability |
|
(71,139 |
) |
|
|
(57,818 |
) |
|
|
Deferred
revenue |
|
581,305 |
|
|
|
167,562 |
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
723,364 |
|
|
|
(900,598 |
) |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchase of certificates of deposit |
|
- |
|
|
|
(1,880,000 |
) |
|
Redemption of certificates of deposit |
|
1,195,000 |
|
|
|
2,080,000 |
|
|
Purchase of intangible assets |
|
(23,187 |
) |
|
|
(160,000 |
) |
|
Purchase of property and equipment |
|
(196,897 |
) |
|
|
(94,994 |
) |
|
Proceeds from sale of property and equipment |
|
- |
|
|
|
2,631 |
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
974,916 |
|
|
|
(52,363 |
) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Repurchase of stock options |
|
(2,778 |
) |
|
|
- |
|
|
Stock options exercised |
|
6,300 |
|
|
|
- |
|
|
Purchase of treasury stock |
|
- |
|
|
|
(260,842 |
) |
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
3,522 |
|
|
|
(260,842 |
) |
|
|
|
|
|
|
Net increase (decrease) in cash |
|
1,701,802 |
|
|
|
(1,213,803 |
) |
Cash, beginning of period |
|
1,415,091 |
|
|
|
2,500,381 |
|
|
|
|
|
|
|
Cash, end of period |
$ |
3,116,893 |
|
|
$ |
1,286,578 |
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
Cash paid: |
|
|
|
|
Taxes (refunded) paid |
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
Treasury stock cancelled |
|
- |
|
|
|
298,150 |
|
Virtra (NASDAQ:VTSI)
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From Mar 2024 to Apr 2024
Virtra (NASDAQ:VTSI)
Historical Stock Chart
From Apr 2023 to Apr 2024