VirTra Reports Second Quarter and First Half 2023 Financial Results
- Record revenue growth
- Increase in net income and gross profit
- Strong financial performance
- Decrease in gross profit margin
Record Quarterly and First Half Revenue of
Quarterly Net Income Increases by
CHANDLER, Ariz., Aug. 14, 2023 (GLOBE NEWSWIRE) -- VirTra, Inc. (Nasdaq: VTSI) (“VirTra”), a global provider of judgmental use of force training simulators, firearms training simulators for the law enforcement and military markets, reported results for the second quarter ended June 30, 2023. The financial statements are available on VirTra’s website and here.
Second Quarter 2023 Financial Highlights:
- Total revenue increased
29% to a record$10.3 million - Gross profit increased
25% to$5.9 million , or57% of total revenue - Net income increased by
$0.2 million to$1.0 million - Adjusted EBITDA increased to
$2.6 million - Cash and cash equivalents of
$13.3 million at June 30, 2023
Six Month 2023 Financial Highlights:
- Total revenue increased
38% to$20.4 million - Gross profit increased
53% to$12.9 million , or63% of total revenue - Net income increased by
$2.6 million to$4.0 million - Adjusted EBITDA increased to
$6.5 million
Second Quarter and Six Month 2023 Financial Highlights:
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||
| All figures in millions, except per share data | June 30, 2023 | June 30, 2022 | % Δ | June 30, 2023 | June 30, 2022 | % Δ | ||||||||||||
| Total Revenue | $ | 10.3 | $ | 8.0 | 29% | $ | 20.4 | $ | 14.8 | 38% | ||||||||
| Gross Profit | $ | 5.9 | $ | 4.7 | 25% | $ | 12.9 | $ | 8.4 | 53% | ||||||||
| Gross Margin | 57 | % | 59 | % | N/A | 63 | % | 57 | % | N/A | ||||||||
| Net Income (Loss) | $ | 1.0 | $ | 0.8 | N/A | $ | 4.0 | $ | 1.4 | N/A | ||||||||
| Diluted EPS | $ | 0.09 | $ | 0.07 | N/A | $ | 0.36 | $ | 0.13 | N/A | ||||||||
| Adjusted EBITDA | $ | 2.56 | $ | 1.35 | N/A | $ | 6.55 | $ | 2.34 | N/A | ||||||||
Management Commentary
"Led by record-breaking revenue in the double-digit millions during the first two quarters of 2023, we have achieved the best bottom-line results in our 30-year history," said Bob Ferris, chairman and co-CEO of VirTra. "This exceptional financial performance is a testament to the effectiveness of our internal process improvements and streamlined operations. To further solidify our market leadership and expand revenue streams, we continue to actively pursue additional product and content development initiatives to enhance VirTra's already powerful training capabilities."
John Givens, co-CEO of VirTra, added: "Our topline results reflect the transformation we have made in fulfillment efficiency, which serves as a key indicator of our scaling abilities and our long-term operational capabilities. We are now applying that same focus and tenacity by taking proactive measures to increase our bookings and maximize our market potential, both domestically and internationally. Our sales enhancement initiatives are already underway and coupled with our unwavering commitment to product quality and a customer-centric approach, we are advancing along our strategic roadmap while further optimizing our business operations to even greater profitability and efficiency in the years ahead.”
Second Quarter 2023 Financial Results
Total revenue increased
Gross profit increased
Net operating expense was
Operating income increased by
Net income was
Adjusted EBITDA, a non-GAAP metric, increased to
Six Months Ended June 30, 2023 Financial Results
Total revenue increased
Gross profit increased
Net operating expense was
Operating income jumped to
Net income was
Adjusted EBITDA, a non-GAAP metric, increased to
Financial Commentary
“The strong first half results underscore the successful execution of our growth and profitability initiatives,” said CFO Alanna Boudreau. “Achieving a robust gross profit margin of
Conference Call
VirTra’s management will hold a conference call today (August 14, 2023) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTra’s chairman and co-CEO, Bob Ferris, co-CEO John Givens and Chief Financial Officer Alanna Boudreau, will host the call, followed by a question-and-answer period.
U.S. dial-in number: 1-877-407-9208
International number: 1-201-493-6784
Conference ID: 13739497
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 Gateway Investor Relations at 949-574-3860.
The conference call will be broadcast live and available for replay here and via the investor relations section of the Company’s website.
A replay of the call will be available after 7:30 p.m. Eastern time on the same day through August 28, 2023.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13739497
About VirTra, Inc.
VirTra (Nasdaq: VTSI) is a global provider of judgmental use of force training simulators, firearms 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 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 | % | |||||||||||||||||||||||||
| 2023 | 2022 | (Decrease) | Change | 2023 | 2022 | (Decrease) | Change | |||||||||||||||||||||||||
| Net Income | $ | 1,026,635 | $ | 787,374 | $ | 239,261 | 30 | % | $ | 3,973,009 | $ | 1,364,448 | $ | 2,608,561 | 191 | % | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Provision for income taxes | 977,489 | 246,684 | 730,805 | 296 | % | 1,618,834 | 370,684 | 1,248,150 | 337 | % | ||||||||||||||||||||||
| Depreciation and amortization | 253,911 | 230,942 | 22,969 | 10 | % | 481,481 | 446,688 | 34,793 | 8 | % | ||||||||||||||||||||||
| Interest (net) | 61,237 | 61,237 | 100 | % | 109,420 | 109,420 | 100 | % | ||||||||||||||||||||||||
| EBITDA | $ | 2,319,271 | $ | 1,265,000 | $ | 1,054,271 | 83 | % | $ | 6,182,743 | $ | 2,181,820 | $ | 4,000,923 | 183 | % | ||||||||||||||||
| Right of use amortization | 244,581 | 80,805 | 163,776 | 203 | % | 366,355 | 160,658 | 205,697 | 128 | % | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,563,852 | $ | 1,345,805 | $ | 1,218,047 | 91 | % | $ | 6,549,098 | $ | 2,342,478 | $ | 4,206,620 | 180 | % | ||||||||||||||||
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 and Alec Wilson
Gateway Group, Inc.
VTSI@gateway-grp.com
949-574-3860
-Financial Tables to Follow-
VIRTRA, INC.
CONDENSED BALANCE SHEETS
| June 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 13,342,974 | $ | 13,483,597 | ||||
| Accounts receivable, net | 17,931,407 | 3,002,887 | ||||||
| Inventory, net | 9,967,539 | 9,592,328 | ||||||
| Unbilled revenue | 2,422,109 | 7,485,990 | ||||||
| Prepaid expenses and other current assets | 546,332 | 531,051 | ||||||
| Total current assets | 44,210,361 | 34,095,853 | ||||||
| Long-term assets: | ||||||||
| Property and equipment, net | 15,149,168 | 15,267,133 | ||||||
| Operating lease right-of-use asset, net | 968,234 | 1,212,814 | ||||||
| Intangible assets, net | 571,985 | 587,777 | ||||||
| Security deposits, long-term | 35,691 | 35,691 | ||||||
| Other assets, long-term | 202,462 | 376,461 | ||||||
| Deferred tax asset, net | 5,361,667 | 2,238,762 | ||||||
| Total long-term assets | 22,289,207 | 19,718,638 | ||||||
| Total assets | $ | 66,499,568 | $ | 53,814,491 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,156,170 | $ | 1,251,240 | ||||
| Accrued compensation and related costs | 1,653,150 | 1,494,890 | ||||||
| Accrued expenses and other current liabilities | 5,633,901 | 1,917,922 | ||||||
| Note payable, current | 246,215 | 232,537 | ||||||
| Operating lease liability, short-term | 569,692 | 557,683 | ||||||
| Deferred revenue, short-term | 8,379,515 | 4,302,492 | ||||||
| Total current liabilities | 17,638,643 | 9,756,764 | ||||||
| Long-term liabilities: | ||||||||
| Deferred revenue, long-term | 2,539,330 | 1,605,969 | ||||||
| Note payable, long-term | 7,932,521 | 8,050,116 | ||||||
| Operating lease liability, long-term | 450,337 | 720,023 | ||||||
| Total long-term liabilities | 10,922,188 | 10,376,108 | ||||||
| Total liabilities | 28,560,831 | 20,132,872 | ||||||
| Commitments and contingencies (See Note 9) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | - | |||||||
| Common stock | 1,092 | 1,089 | ||||||
| Class A common stock | - | - | ||||||
| Class B common stock | - | - | ||||||
| Additional paid-in capital | 31,704,501 | 31,420,395 | ||||||
| Retained earnings | 6,233,144 | 2,260,135 | ||||||
| Total stockholders’ equity | 37,938,737 | 33,681,619 | ||||||
| Total liabilities and stockholders’ equity | $ | 66,499,568 | $ | 53,814,491 | ||||
VIRTRA, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||||||||||
| Revenue: | ||||||||||||||||
| Net Sales | $ | 10,336,903 | $ | 7,997,383 | $ | 20,363,838 | $ | 14,750,611 | ||||||||
| Total Revenue | 10,336,903 | 7,997,383 | 20,363,838 | 14,750,611 | ||||||||||||
| Cost of sales | 4,416,202 | 3,253,651 | 7,494,199 | 6,319,789 | ||||||||||||
| Gross Profit | 5,920,701 | 4,743,732 | 12,869,639 | 8,430,822 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative | 3,280,344 | 3,085,051 | 5,991,681 | 5,381,443 | ||||||||||||
| Research and Development | 711,754 | 617,058 | 1,478,050 | 1,296,453 | ||||||||||||
| Net Operating expense | 3,992,098 | 3,702,109 | 7,469,731 | 6,677,896 | ||||||||||||
| Income from operations | 1,928,603 | 1,041,623 | 5,399,908 | 1,752,926 | ||||||||||||
| Other Income (expense): | ||||||||||||||||
| Other Income | 208,599 | 57,056 | 392,240 | 111,379 | ||||||||||||
| Other Expense | (133,078 | ) | (64,621 | ) | (200,305 | ) | (129,173 | ) | ||||||||
| Net other income (expense) | 75,521 | (7,565 | ) | 191,935 | (17,794 | ) | ||||||||||
| Income before provision for income taxes | 2,004,124 | 1,034,058 | 5,591,843 | 1,735,132 | ||||||||||||
| Provision for income taxes | 977,489 | 246,684 | 1,618,834 | 370,684 | ||||||||||||
| Net Income | $ | 1,026,635 | $ | 787,374 | $ | 3,973,009 | $ | 1,364,448 | ||||||||
| Net income per common share: | ||||||||||||||||
| Basic | $ | 0.09 | $ | 0.07 | $ | 0.36 | $ | 0.13 | ||||||||
| Diluted | $ | 0.09 | $ | 0.07 | $ | 0.36 | $ | 0.13 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 10,924,714 | 10,866,775 | 10,921,033 | 10,837,186 | ||||||||||||
| Diluted | 10,933,130 | 10,892,302 | 10,925,702 | 10,867,667 | ||||||||||||
VIRTRA, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30 | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 3,973,009 | $ | 1,364,448 | ||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 479,889 | 446,688 | ||||||
| Right of use amortization | 244,580 | 160,658 | ||||||
| Employee stock compensation | 199,475 | 70,497 | ||||||
| Stock issued for service | 75,000 | 350,001 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (14,928,520 | ) | (2,491,348 | ) | ||||
| Inventory, net | (375,211 | ) | (3,816,862 | ) | ||||
| Deferred taxes | (3,122,905 | ) | 255,511 | |||||
| Unbilled revenue | 5,063,881 | (873,605 | ) | |||||
| Prepaid expenses and other current assets | (15,281 | ) | 92,128 | |||||
| Other assets | 173,999 | (186,727 | ) | |||||
| Security deposits, long-term | - | (15,979 | ) | |||||
| Accounts payable and other accrued expenses | 3,792,847 | 1,115,242 | ||||||
| Payments on operating lease liability | (257,677 | ) | (170,535 | ) | ||||
| Deferred revenue | 5,010,384 | 921,613 | ||||||
| Net cash provided by (used in) operating activities | 313,470 | (2,778,270 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of intangible assets | - | (86,012 | ) | |||||
| Purchase of property and equipment | (345,640 | ) | (1,725,726 | ) | ||||
| Net cash (used in) investing activities | (345,640 | ) | (1,811,738 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments of debt | (118,087 | ) | (115,049 | ) | ||||
| Stock options exercised | 9,634 | 12,725 | ||||||
| Net cash (used in) financing activities | (108,453 | ) | (102,324 | ) | ||||
| Net increase (decrease) in cash and restricted cash | (140,623 | ) | (4,692,332 | ) | ||||
| Cash and restricted cash, beginning of period | 13,483,597 | 19,708,565 | ||||||
| Cash and restricted cash, end of period | $ | 13,342,974 | $ | 15,016,233 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash (refunded) paid: | $ | 134,514 | $ | 99,035 | ||||
| Income taxes paid (refunded) | $ | - | $ | 128,507 | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Conversion of inventory to property and equipment | $ | - | $ | 294,016 | ||||
