TEMPE, Ariz. , Aug. 12, 2021 (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 second quarter and six months ended June 30, 2021. The financial statements are available on VirTra’s website and here.
Second Quarter 2021 Financial Highlights:
- Total revenue increased 90% to $5.3 million
- Gross profit increased 99% to $3.1 million, or 60% of total revenue
- Net income increased to $529,400
- Adjusted EBITDA increased to $1.0 million
- Backlog increased 6% sequentially and 19% year-over-year to a record $17.0 million as of June 30, 2021
- Unrestricted cash and cash equivalents totaled $23.8 million
Six Month 2021 Financial Highlights:
- Total revenue increased 59% to $9.7 million
- Gross profit increased 80% to $5.7 million, or 59% of total revenue
- Net income increased to $1.2 million
- Adjusted EBITDA increased to $1.8 million
Second Quarter and Six Month 2021 Financial Highlights:
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||
| All figures in millions, except per share data | June 30, 2021 | June 30, 2020 | % ∆ | June 30, 2021 | June 30, 2020 | % ∆ | |||||||||||
| Total Revenue | $5.3 | $2.8 | 90 | % | $9.7 | $6.1 | 59 | % | |||||||||
| Gross Profit | $3.1 | $1.6 | 99 | % | $5.7 | $3.2 | 80 | % | |||||||||
| Gross Margin | 59.7 | % | 57.0 | % | 5 | % | 58.8 | % | 51.9 | % | 13 | % | |||||
| Net Income (Loss) | $0.5 | ($0.6 | ) | N/A | $1.2 | ($1.0 | ) | N/A | |||||||||
| Diluted EPS | $0.05 | ($0.08 | ) | N/A | $0.13 | ($0.13 | ) | N/A | |||||||||
| Adjusted EBITDA | $1.00 | ($0.58 | ) | N/A | $1.75 | ($0.98 | ) | N/A | |||||||||
Management Commentary
“We delivered strong financial results across the board in the second quarter, highlighted by a 90% increase in total revenue and a 99% increase in gross profit,” said Bob Ferris, chairman and chief executive officer of VirTra. “Continued market demand for our products drove profitable growth while enabling us to deliver another quarter of positive net income and strong adjusted EBITDA. Demand for VirTra’s world-class training solutions from the law enforcement and military markets continues to build, demonstrated by the 6% sequential and 19% year-over-year increase in our backlog to a record $17.0 million. Our strong financial performance in the second quarter also demonstrates our team’s consistent operational excellence, as well as the value and effectiveness that VirTra’s products provide to our end users and partners globally.
“As we look ahead, we believe that our business has never been better positioned to scale than it is today. Our pipeline is expanding, our sales are accelerating, and the need for effective training that enhances skills and saves lives is increasing. We believe that our financial and operational success in the first half of the year, coupled with the strategic initiatives we’re executing, positions us to deliver accelerated and profitable growth in 2021 and beyond.”
Second Quarter 2021 Financial Results
Total revenue increased 90% to $5.3 million from $2.8 million in the second quarter of 2020. The increase in total revenue was due to an increase in the number of simulators and accessories completed and delivered, and therefore revenue recognized, compared to the same period in 2020, which faced more severe COVID-19 related travel restrictions.
Gross profit increased 99% to $3.1 million from $1.6 million in the second quarter of 2020. Gross profit margin, defined as total revenue less cost of sales, was 59.7%, an improvement compared to 57.0% in the second quarter of 2020. The improvement in gross profit and gross profit margin was due to decreased costs, and a more favorable product mix of systems, accessories and services sold compared to the same period in 2020.
Net operating expense was $2.3 million, compared to $2.4 million in the second quarter of 2020. The decrease in net operating expense was due to the one-time impairment write down in the same year-ago period, offset by an increase in software licenses in the second quarter of 2021.
Income from operations totaled $821,000, compared to a loss of $822,000 in the second quarter of 2020.
Net income totaled $529,400, or $0.05 per diluted share (based on 10.7 million weighted average diluted shares outstanding), an improvement compared to a net loss of $601,300, or $(0.08) per diluted share (based on 7.8 million weighted average diluted shares outstanding), in the second quarter of 2020.
Adjusted EBITDA, a non-GAAP metric, totaled $1.0 million, an improvement from a loss of $579,200 in the second quarter of 2020.
Backlog increased 19% to a record $17.0 million, compared to $14.3 million at the end of the second quarter of 2020.
Six Months Ended June 30, 2021 Financial Results
Total revenue increased 59% to $9.7 million from $6.1 million for the first six months of 2020. The increase in total revenue was due to an increase in the number of simulators and accessories completed and delivered, and therefore revenue recognized, compared to the same period in 2020.
Gross profit increased 80% to $5.7 million from $3.2 million for the first six months of 2020. Gross profit margin, defined as total revenue less cost of sales, was 58.8%, an improvement compared to 51.9% for the first six months of 2020. The improvement in gross profit and gross profit margin was due to decreased costs, and a more favorable product mix of systems, accessories and services sold compared to the same period in 2020.
Net operating expense was $4.3 million, compared to $4.5 million for the first six months of 2020. The decrease in net operating expense was primarily due to the impairment write down in 2020, offset by an increase in software licenses in 2021.
Operating income was $1.4 million, an improvement compared to an operating loss of $1.3 million for the first six months of 2020.
Net income totaled $1.2 million, or $0.13 per basic and diluted share (based on 9.2 million weighted average basic shares outstanding and 9.2 million weighted average diluted shares outstanding), an improvement compared to a net loss of $990,700, or $(0.13) per basic and diluted share (based on 7.7 million weighted average basic and diluted shares outstanding), for the first six months of 2020.
Adjusted EBITDA, a non-GAAP metric, totaled $1.8 million, an improvement from a loss of $978,300 for the first six months of 2020.
Conference Call
VirTra’s management will hold a conference call today (August 12, 2021) 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 chief accounting officer, Marsha Foxx, will host the call, followed by a question-and-answer period.
U.S. dial-in number: 1-866-682-6100
International number: 1-862-298-0702
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
A replay of the call will be available on the same day through Thursday, August 26, 2021.
U.S. replay dial-in: 1-877-481-4010
International replay dial-in: 1-919-882-2331
Replay ID: 42395
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 tables:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||
| June 30, | June 30, | Increase | % | June 30, | June 30, | Increase | % | |||||||||||||||||||||||
| 2021 | 2020 | (Decrease) | Change | 2021 | 2020 | (Decrease) | Change | |||||||||||||||||||||||
| Net Income (Loss) | $ | 529,359 | $ | (601,260 | ) | $ | 1,130,619 | 188 | % | $ | 1,184,522 | $ | (990,670 | ) | $ | 2,175,192 | -220 | % | ||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||
| Provision for income taxes | 293,180 | (211,474 | ) | 504,654 | -239 | % | 216,017 | (314,474 | ) | 530,491 | -169 | % | ||||||||||||||||||
| Depreciation and amortization | 103,865 | 89,930 | 13,935 | 15 | % | 201,155 | 179,607 | 21,548 | 12 | % | ||||||||||||||||||||
| EBITDA | $ | 926,404 | $ | (722,804 | ) | $ | 1,649,208 | 228 | % | $ | 1,601,694 | $ | (1,125,537 | ) | $ | 2,727,231 | -242 | % | ||||||||||||
| Impairment loss on That’s Eatertainment, former related party | - | 140,000 | (140,000 | ) | -100 | % | - | 140,000 | (140,000 | ) | -100 | % | ||||||||||||||||||
| Right of use amortization | 77,090 | - | 77,090 | 100 | % | 153,299 | - | 153,299 | 100 | % | ||||||||||||||||||||
| Reserve for note receivable | - | 3,639 | (3,639 | ) | -100 | % | - | 7,278 | (7,278 | ) | -100 | % | ||||||||||||||||||
| Adjusted EBITDA | $ | 1,003,494 | $ | (579,165 | ) | $ | 1,582,659 | 273 | % | $ | 1,754,993 | $ | (978,259 | ) | $ | 2,733,252 | -279 | % | ||||||||||||
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 Securities and Exchange Commission (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 SEC 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
Gateway Group, Inc.
VTSI@gatewayir.com
949-574-3860
VirTra, Inc.
Condensed Balance Sheets
| June 30, 2021 | December 31, 2020 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 23,786,065 | $ | 6,841,984 | |||
| Restricted cash | 100,000 | - | |||||
| Accounts receivable, net | 5,514,605 | 1,378,270 | |||||
| Inventory, net | 5,209,595 | 3,515,997 | |||||
| Unbilled revenue | 4,033,931 | 5,408,598 | |||||
| Prepaid expenses and other current assets | 736,210 | 382,445 | |||||
| Total current assets | 39,380,406 | 17,527,294 | |||||
| Long-term assets: | |||||||
| Property and equipment, net | 1,787,042 | 1,381,744 | |||||
| Operating lease right-of-use asset, net | 941,228 | 1,094,527 | |||||
| Intangible assets, net | 359,489 | 271,048 | |||||
| Security deposits, long-term | 19,712 | 86,500 | |||||
| Other assets, long-term | 478,966 | 500,114 | |||||
| Deferred tax asset, net | 1,597,887 | 1,892,000 | |||||
| Total long-term assets | 5,184,324 | 5,225,933 | |||||
| Total assets | $ | 44,564,730 | $ | 22,753,227 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,212,468 | $ | 345,573 | |||
| Accrued compensation and related costs | 1,041,876 | 843,101 | |||||
| Accrued expenses and other current liabilities | 649,620 | 772,884 | |||||
| Note payable, current | 531,541 | 266,037 | |||||
| Operating lease liability, short-term | 334,550 | 321,727 | |||||
| Deferred revenue, short-term | 7,875,289 | 4,708,575 | |||||
| Total current liabilities | 11,645,344 | 7,257,897 | |||||
| Long-term liabilities: | |||||||
| Deferred revenue, long-term | 1,803,416 | 1,920,346 | |||||
| Note payable, long-term | 789,173 | 1,063,243 | |||||
| Operating lease liability, long-term | 682,619 | 853,155 | |||||
| Total long-term liabilities | 3,275,208 | 3,836,744 | |||||
| Total liabilities | 14,920,552 | 11,094,641 | |||||
| Commitments and contingencies (See Note 9) | |||||||
| 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; 10,780,030 shares | |||||||
| issued and outstanding as of June 30, 2021 and 7,775,030 shares issued | 1,078 | 778 | |||||
| and outstanding as of December 31, 2020 | |||||||
| 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 | 30,694,430 | 13,893,660 | |||||
| Accumulated deficit | (1,051,330 | ) | (2,235,852 | ) | |||
| Total stockholders’ equity | 29,644,178 | 11,658,586 | |||||
| Total liabilities and stockholders’ equity | $ | 44,564,730 | $ | 22,753,227 | |||
VirTra, Inc.
Condensed Statements of Operations
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Net sales | $ | 5,255,192 | $ | 2,756,737 | $ | 9,697,101 | $ | 6,076,750 | ||||||||||||
| That’s Eatertainment royalties/licensing fees, former related party | - | 12,502 | - | 29,242 | ||||||||||||||||
| Other royalties/licensing fees | - | 540 | - | 1,950 | ||||||||||||||||
| Total revenue | 5,255,192 | 2,769,779 | 9,697,101 | 6,107,942 | ||||||||||||||||
| Cost of sales | 2,120,492 | 1,192,012 | 3,993,896 | 2,934,948 | ||||||||||||||||
| Gross profit | 3,134,700 | 1,577,767 | 5,703,205 | 3,172,994 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | 2,002,612 | 2,023,074 | 3,712,845 | 3,800,450 | ||||||||||||||||
| Research and development | 311,320 | 376,611 | 605,537 | 706,366 | ||||||||||||||||
| Net operating expense | 2,313,932 | 2,399,685 | 4,318,382 | 4,506,816 | ||||||||||||||||
| Income (loss) from operations | 820,768 | (821,918 | ) | 1,384,823 | (1,333,822 | ) | ||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Other income | 34,379 | 18,797 | 50,758 | 38,292 | ||||||||||||||||
| Other expense | (32,608 | ) | (9,613 | ) | (35,042 | ) | (9,614 | ) | ||||||||||||
| Net other income (expense) | 1,771 | 9,184 | 15,716 | 28,678 | ||||||||||||||||
| Income (Loss) before provision for income taxes | 822,539 | (812,734 | ) | 1,400,539 | (1,305,144 | ) | ||||||||||||||
| Provision (Benefit) for income taxes | 293,180 | (211,474 | ) | 216,017 | (314,474 | ) | ||||||||||||||
| Net income (loss) | $ | 529,359 | $ | (601,260 | ) | $ | 1,184,522 | $ | (990,670 | ) | ||||||||||
| Net income (loss) per common share: | ||||||||||||||||||||
| Basic | $ | 0.05 | $ | (0.08 | ) | $ | 0.13 | $ | (0.13 | ) | ||||||||||
| Diluted | $ | 0.05 | $ | (0.08 | ) | $ | 0.13 | $ | (0.13 | ) | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 10,644,363 | 7,752,780 | 9,209,808 | 7,749,091 | ||||||||||||||||
| Diluted | 10,693,238 | 7,752,780 | 9,209,509 | 7,749,091 | ||||||||||||||||
VirTra, Inc.
Condensed Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||||
| 2021 | 2020 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Net income (loss) | $ | 1,184,522 | $ | (990,670 | ) | |||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | ||||||||||
| Depreciation and amortization | 201,156 | 179,607 | ||||||||
| Right of use amortization | 153,299 | 146,500 | ||||||||
| Reserve for note receivable | - | 3,639 | ||||||||
| Deferred taxes | 294,113 | (270,000 | ) | |||||||
| Impairment of investment in That’s Eatertainment, former related party | - | 140,000 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable, net | (4,136,335 | ) | (433,219 | ) | ||||||
| That’s Eatertainment note receivable, net, related party | - | (3,639 | ) | |||||||
| Interest receivable | - | 3,934 | ||||||||
| Inventory, net | (1,693,598 | ) | (979,389 | ) | ||||||
| Unbilled revenue | 1,374,667 | 1,481,822 | ||||||||
| Prepaid expenses and other current assets | (353,765 | ) | (80,211 | ) | ||||||
| Other assets | 21,148 | 508 | ||||||||
| Security deposits, long-term | 66,788 | (1,571 | ) | |||||||
| Accounts payable and other accrued expenses | 933,840 | 248,232 | ||||||||
| Payments on operating lease liability | (157,713 | ) | (145,663 | ) | ||||||
| Deferred revenue | 3,049,784 | 409,745 | ||||||||
| Net cash provided by (used in) operating activities | 937,906 | (290,375 | ) | |||||||
| Cash flows from investing activities: | ||||||||||
| Redemption of certificates of deposit | - | 1,675,000 | ||||||||
| Purchase of intangible assets | (92,886 | ) | (43,240 | ) | ||||||
| Purchase of property and equipment | (602,009 | ) | (304,739 | ) | ||||||
| Proceeds from sale of property and equipment | - | - | ||||||||
| Net cash (used in) provided by investing activities | (694,895 | ) | 1,327,021 | |||||||
| Cash flows from financing activities: | ||||||||||
| Repurchase of stock options | - | (5,846 | ) | |||||||
| Stock issued for cash in offering, net | 16,795,000 | - | ||||||||
| Stock options exercised | 6,070 | 13,215 | ||||||||
| Note payable-PPP Loan | - | 1,320,714 | ||||||||
| Net cash provided by (used in) financing activities | 16,801,070 | 1,328,083 | ||||||||
| Net increase (decrease) in cash and restricted cash | 17,044,081 | 2,364,729 | ||||||||
| Cash and restricted cash, beginning of period | 6,841,984 | 1,415,091 | ||||||||
| Cash and restricted cash, end of period | $ | 23,886,065 | $ | 3,779,820 | ||||||
| Supplemental disclosure of cash flow information: | ||||||||||
| Cash (refunded) paid: | ||||||||||
| Taxes refunded | $ | (78,096 | ) | $ | (44,474 | ) | ||||
| Interest paid | 5,763 | - | ||||||||
