TEMPE, Ariz., May 15, 2017 (GLOBE NEWSWIRE) -- VirTra, Inc. (OTCQX:VTSI), (the “Company”), a leading provider of judgmental use of force simulators and firearms training simulators, today announced its financial results for the first quarter ended March 31, 2017. The financial statements are available on VirTra’s website and here.
First Quarter 2017 Financial Highlights:
- Total revenue of $4.2 million
- Gross profit of $2.4 million
- Gross profit margin of 58%
- Net income of $0.4 million, or $0.03 and $0.02 per basic and diluted share, respectively
- Adjusted EBITDA of $0.6 million
“We are pleased with the start of our fiscal year, where we delivered revenue of $4.2 million and net income of $0.4 million, while at the same time booking new orders of $4.9 million, a record for any first quarter in our history,” said Bob Ferris, Chairman and Chief Executive Officer of VirTra. “While our first quarter revenues did not exceed last year’s record amount, they increased sequentially by approximately $1.2 million from the fourth quarter of 2016. We are encouraged by our record level of new orders received during the first quarter of 2017 and the traction that we continue to receive in both the domestic and international markets based on our ongoing investment in sales and marketing. As a result, year-to-date in 2017, we have secured more new business from the top 50 law enforcement agencies in the United States than at any other time in our past.”
Financial Results for the Three Months Ended March 31, 2017
Total revenue was $4.2 million for the first quarter of 2017, compared to $6.2 million for the record first quarter of 2016. The year-over-year decline primarily resulted from recognizing $2.7 million in revenue on a single international contract during the first quarter of 2016, which was not repeated in this year’s first quarter.
Gross profit was $2.4 million for the first quarter of 2017, compared to $4.1 million for the first quarter of 2016.
Gross profit margin for the first quarter of 2017 was 58%, compared to 66% for the first quarter of 2016. The year-over-year decrease in gross profit margin was primarily due to product and service mix and the lower amount of system sales.
Operating expenses were $2.0 million for the first quarter of 2017, compared to $1.7 million in the first quarter of 2016. The higher expenses were primarily due to increases in employee costs, higher professional fees and expenses, and increased spending in research and development and sales and marketing, as compared to the prior year’s first quarter.
Operating income for the first quarter of 2017 was $0.5 million, compared to operating income of $2.4 million in the first quarter of 2016. The decline in operating income was primarily due to the lower revenue and gross profit margin, combined with the higher operating expenses.
Net income was $0.4 million for the first quarter of 2017, or $0.02 per diluted share, compared to net income of $2.4 million, or $0.14 per diluted share for the prior year’s first quarter.
Adjusted EBITDA was $0.6 million for the first quarter of 2017, compared to adjusted EBITDA of $2.5 million for the first quarter of 2016.
Stockholders’ equity increased to $6.9 million at March 31, 2017, compared to $6.4 million at December 31, 2016.
Cash and cash equivalents were $4.6 million at March 31, 2017, compared to $3.7 million at December 31, 2016.
The Company had essentially no outstanding debt at March 31, 2017.
Webcast
The Company will host a live webcast later today at 12:30 p.m. Eastern time/9:30 a.m. local time, to discuss these results. As part of the webcast, management will be answering questions received in advance by email. 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.
About VirTra
VirTra is a global leading provider of the world's most realistic and effective judgmental use of force 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.
Forward-looking Statements
This press release includes certain information that may constitute forward-looking statements which 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, INC. | ||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, 2017 | March 31, 2016 | |||||||
| REVENUES | ||||||||
| Net sales | $ | 4,165,476 | $ | 6,232,293 | ||||
| Royalties/Licensing Fees | 43,812 | - | ||||||
| Total revenue | 4,209,288 | 6,232,293 | ||||||
| Cost of sales | 1,778,945 | 2,101,025 | ||||||
| Gross profit | 2,430,343 | 4,131,268 | ||||||
| OPERATING EXPENSES | ||||||||
| General and administrative | 1,614,498 | 1,537,283 | ||||||
| Research and development | 342,190 | 204,765 | ||||||
| Net operating expense | 1,956,688 | 1,742,048 | ||||||
| Income from operations | 473,655 | 2,389,220 | ||||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income | 6,233 | 517 | ||||||
| Net other income | 6,233 | 517 | ||||||
| Income before income taxes | 479,888 | 2,389,737 | ||||||
| Provision for income taxes | 78,000 | 33,240 | ||||||
| NET INCOME | $ | 401,888 | $ | 2,356,497 | ||||
| Earnings per common share | ||||||||
| Basic | $ | 0.03 | $ | 0.15 | ||||
| Diluted | $ | 0.02 | $ | 0.14 | ||||
| Weighted average shares outstanding | ||||||||
| Basic | 15,855,005 | 15,828,505 | ||||||
| Diluted | 16,295,774 | 16,685,333 | ||||||
| VIRTRA, INC. | |||||||||
| CONDENSED BALANCE SHEETS | |||||||||
| March 31, | December 31, | ||||||||
| 2017 | 2016 | ||||||||
| (unaudited) | (audited) | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 4,563,321 | $ | 3,703,579 | |||||
| Accounts receivable, net | 2,506,963 | 3,244,852 | |||||||
| Inventory | 1,115,096 | 1,319,944 | |||||||
| Prepaid expenses and other current assets | 1,648,386 | 357,363 | |||||||
| Total current assets | 9,833,766 | 8,625,738 | |||||||
| Property and equipment, net | 792,713 | 814,323 | |||||||
| Investment in MREC | 471,928 | 471,928 | |||||||
| TOTAL ASSETS | $ | 11,098,407 | $ | 9,911,989 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 543,936 | $ | 467,679 | |||||
| Accrued compensation and related costs | 788,871 | 617,582 | |||||||
| Accrued expenses and other current liabilities | 263,063 | 194,668 | |||||||
| Notes payable, current | 11,250 | 11,250 | |||||||
| Deferred revenue | 2,493,009 | 2,065,905 | |||||||
| Total current liabilities | 4,100,129 | 3,357,084 | |||||||
| Long-term liabilities: | |||||||||
| Accrued rent liability | 111,948 | 122,126 | |||||||
| Notes payable, long-term | 22,500 | 22,500 | |||||||
| Total long-term liabilities | 134,448 | 144,626 | |||||||
| Total liabilities | 4,234,577 | 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; 15,855,005 issued | |||||||||
| and outstanding as of March 31, 2017 and December 31, 2016, respectively | 1,586 | 1,586 | |||||||
| 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 | - | - | |||||||
| Additional paid-in capital | 14,179,707 | 14,128,044 | |||||||
| Accumulated deficit | (7,317,463 | ) | (7,719,351 | ) | |||||
| Total stockholders' equity | 6,863,830 | 6,410,279 | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 11,098,407 | $ | 9,911,989 | |||||
| VIRTRA, INC. | ||||||||||
| CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||
| (unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, 2017 | March 31, 2016 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income | $ | 401,888 | $ | 2,356,497 | ||||||
| Adjustments to reconcile net income to net cash | ||||||||||
| provided (used) in operating activities | ||||||||||
| Depreciation and amortization | 58,207 | 45,555 | ||||||||
| Stock-based compensation | 69,163 | 33,990 | ||||||||
| Cash settlement of stock options | 31,000 | - | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | 737,890 | (2,511,827 | ) | |||||||
| Inventory | 204,848 | (68,838 | ) | |||||||
| Prepaid expenses and other current assets | (1,291,024 | ) | (44,844 | ) | ||||||
| Accounts payable and other accrued expenses | 315,941 | 169,916 | ||||||||
| Deferred revenue | 427,104 | (214,046 | ) | |||||||
| Net cash provided by operating activities | 955,017 | (233,597 | ) | |||||||
| Cash flows from investing activities: | ||||||||||
| Purchase of property and equipment | (46,775 | ) | (32,126 | ) | ||||||
| Net cash used in investing activities | (46,775 | ) | (32,126 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Repurchase of stock-based options | (48,500 | ) | - | |||||||
| Net cash used in financing activities | (48,500 | ) | - | |||||||
| Net increase in cash | 859,742 | (265,723 | ) | |||||||
| Cash, beginning of period | 3,703,579 | 3,317,020 | ||||||||
| Cash, end of period | $ | 4,563,321 | $ | 3,051,297 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Cash paid during period for income taxes | $ | 78,000 | $ | 21,610 | ||||||
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 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 | ||||||
| Three Months Ended March 31, | ||||||
| 2017 | 2016 | |||||
| Net Income | $ | 401,888 | $ | 2,356,497 | ||
| Adjustments: | ||||||
| Depreciation | 58,207 | 45,555 | ||||
| Non-cash stock option expense | 69,163 | 33,990 | ||||
| Provision for income taxes | 78,000 | 33,240 | ||||
| Adjusted EBITDA | $ | 607,258 | $ | 2,469,282 | ||