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The government, every year, publishes how much they plan to spend on different programs. Additionally, teams publish the overall size of different programs. One can at least make directional inferences from those. For a company the size of VirTra, "directional" is adequate IMO
Here are exhibitor lists for anybody to peruse
https://mme.a2zinc.net/ModernDay2022/Public/exhibitors.aspx
https://exhibits.ndia.org/sofic2022/Public/Exhibitors.aspx
While everyone is talking about the CEO & 10k/q,
Army announced today that SVT award is still on schedule for June and that vendor selection is still happening.
Anybody been following simulator deliveries or grant funding?
Ding ding ding
You deserve a prize
Business Insider’s “leak” pointed out three issues which could negatively affect reception of STP5.
Why is it terrible?
A couple guesses
- VR headset (for marksmanship more likely than de-escalation)
- software modules for marksmanship using AI
- integration of biometrics and other details to support better training
- JTAC training tools
I don’t recall seeing any large bookings, so think we come in comparably lower this quarter.
I actually think this quarter will be a good litmus test for how steady the company’s police bookings are. We know there weren’t US gov orders and big international orders were announced in Sept and Jan, nothing in q4. Therefore q4 bookings might be mostly smaller international + US police only. If that’s the case, then maybe we only see $4-5m (28.5-30m for the year).
I’ve given my top line revenue and EPS guesstimate a few weeks back now.
There is “news”. It’s nothing of consequence or definitive for long term, though.
Nice to see it cancelled. Was weird that it called out for a 300 degree simulator _and_ headsets, anyway. Since CBP historically has placed orders for simulators in March/April, i wouldn't be surprised to see an order come through again in 2022.
The verbiage re: Apex can be seen when comparing the below sections from the now-cancelled RFP to https://www.brookings.or.us/AgendaCenter/ViewFile/Agenda/_05102021-1240. The RFP reads word for word from the Apex sales doc.
- "One (1) high performance Virtual Reality Workstation..."
- "Three (3) each of the virtual training accessories..."
- "Wireless networking systems that work in harmony..."
- "Audio and picture in picture color video capture..."
CBP buying apex Office headsets instead of VirTra simulators?
https://sam.gov/opp/f87c109b63114f6ebdf2a8e1b99ad8dc/view
Not sure what to make of this. FWIW, historically, I don't see any CBP orders of apex products.
You wonder what the kinks that need to be worked out are.
We know brightness was an issue but TAK and IITSEC updates talked about progress being made. The following article https://breakingdefense.com/2022/02/after-mix-up-army-revises-list-of-modernization-programs-hit-by-cr/ is interesting, though... Makes me wonder if SiVT is not fully ready yet. Alternative reasoning for the possible delay is that SiVT was supposed to cost >$60m in FY2022 and therefore pushing it back would allow progress on many more smaller programs. Either way, continuing resolution is something worth paying attention to on top of IVAS progress.
> Do you know if the proposal that we were awarde had an associated item by item pricelist
I never found a ton of info on Canada opportunity beyond the RFP. And that RFP did not show any award details or price lists, only the requirements. As Ardly posted, the Standing Offer should be a fixed price sheet, so I'm skeptical about a low-margin first purchase. And as far as margins on the Standing Offer go, you all are aware that VirTra is the only company who can provide top of the line training like realistic recoil kits with stoppages, realistics Tasers, Electric shock haptic feedback, etc, etc which were all explicitly stated in the contract. So while there was a price component to the outcome of the bids, I hope they had enough leverage to command similar margins to what they typically see. But we don't know what we don't know and similar to IVAS, we're going to have to wait for results to find out.
Here's an alternative perspective because I'd like some folks to poke holes so I'm more comfortable with the conclusion I've drawn.
At least the last few years, maybe longer, VirTra has always PR'd orders >= 800k, maybe lower (i'm excluding IVAS here). This one, they didn't. So maybe it's not a significant order size? Multiple VST-PRO + accessories + training could be as few as 2-4 simulators. At ~50k/sim (roughly since i don't recall off the top of my head), that'd be something like a $250k order.
The reason why i think this is even more likely is because they threw that omnibus commentary in the PR.
"The omnibus bill passed in 2015 by the Canadian Government has specific wording that makes the buying process more efficient for all federal, provincial and municipal law enforcement agencies in Canada to obtain training simulators from this standing offer"
If you believe that VirTra doesn't just put random laws from 2015 into their PR for fun, maybe it's meant to imply that agencies in Canada may take a different approach than typical agencies (here in the US and abroad) who make large orders through an RFP process once a quarter/year. I need to research more and ask Bob next time we talk, but maybe we're likely to see lots more smaller orders from Canadian agencies as they need equipment.
Open to hearing feedback and other lines of thought!
Hard to argue that the company doesn't drop hints to folks who pay attention:
The #CBP Law Enforcement Safety and Compliance and VirTra met to discuss an initiative which includes having the Laredo Field Office as a host to filming new real life scenarios with the goal to continue developing our officers’ response in critical situations. pic.twitter.com/QXPp7CfvYK
— Director of Field Operations, Donald R. Kusser (@DFOLaredo) February 8, 2022
Would be curious to get Bob's thoughts on what mandatory federal training would mean for VirTra. Would additional sites need simulators? Would it all flow through FLETC? Essentially, what % of federal LE does VirTra currently support and what would be expected opportunity should this happen. I haven't heard pushback on federal training mandates, so i'm a lot more confident we see this before we see anything at the state level.
While not mandatory training, additional funding at the state level couldn't hurt https://www.congress.gov/bill/117th-congress/house-bill/6448/text (95% of agencies in the US are < 200 LEO's)!
Looking a lot closer at the RFP's, the devil is in the details. The minute requirements which made VirTra the only capable supplier were all removed.
1. Training Curriculum no longer must meet IADLEST Standards
2. They removed the explicit call out of ThreatFire feedback systems and instead "Vendor must have the capability of having a device that will initiate an electronic impulse or signal resulting in a physiological change to the body during screen-based simulation..."
3. Taser requirements are much more lenient.
and on and on, same for flashlights and CO2 refill capabilities.
Maybe won't get challenged. Oh well :(
Amazingly enough, this GDC opportunity went to Ti Training again.
So I guess VirTra will protest this again? The RFQ stated mostly the same things as the prior one, from what i can see
IMO it's not terribly hard to guesstimate earnings/bookings as the company or federal websites telegraph deliveries and bookings for large orders. And the smaller parts of the business -- warranties, installs, etc -- are relatively stable. Just a matter of organizing everything.
In Q3, i had revenue roughly correct and bookings i was a couple million less partially because i thought spain order would hit in q4. Accounting for that, they still did $1m more than I thought.
For Q4, there were less large preannounced orders and deliveries, so we're stuck looking at smaller police and international things which means margin of error of $1-2m plays a bigger role in the smaller base revenue number. But here's how I break things down... ordered roughly from higher certainty to lower:
Warranty $0.66
STEP $0.55
installation $0.25
software $0.35
FLETC $0.20 (https://www.usaspending.gov/award/CONT_AWD_70LGLY21FSSB00081_7015_GS02F0214P_4730)
Ukraine/DoS $0.17 (https://www.usaspending.gov/award/CONT_AWD_19AQMM21F4167_1900_SWHARC16D0003_1900)
Spain $0.50 (i expect some to be delivered in Q4 and some in Q1)
Middle East $0.80 (No idea if this will all be delivered in Q4 or partial. Maybe I'm low, here.)
US POLICE $3.50 (I found ~2m+ deliveries via google searches.)
======================
TOTAL $6.98
I have no idea on margins as i still don't have a good feel for inputs. I'll guess 58% as there were lots of simulator deliveries this q. I definitely don't expect another 47% quarter.
OPEX i'll guess between 2.5-3m due to headcount growth, spending on the new office, international travel, and more inventory growth.
So somewhere between 1.05m-1.5m EBITDA and 9-14c EPS.
-----
Then Q1 and Q2 will include large orders like the rest of Spain delivery, the rest of Middle east, the 1.6m international follow on, 1.1m international follow on, 0.5m FLETC, and the 3m IVAS STP4 order. I'll let folks come to their own conclusion on what that points to for h1 numbers.
> I will also predict we have not seen our last 4.x million quarter.
I’ll take the other side of that bet!!! No chance it happens
What orders are going to push them to $10m revs?
I think there is a non-zero chance of it happening, but I'm not expecting that. I think the record quarters are likely to come in Q1 or Q2. I really wouldn't be surprised if we see ~40c EPS in H1'22 alone barring significant investment in the new facility or inventory buildup. So maybe 30c EPS in h1 is a more reasonable estimate?
https://odia.ig.com.br/rio-de-janeiro/2022/01/6324051-governador-analisa-atender-reivindicacoes-da-policia-penal.html
One of these days Canada will place an order and SVT will show VirTra as making it beyond the first downselect.
In the meantime, here’s an article from Brazil saying that seeing VirTra simulator at Shot Show makes him want the country to buy some for the Criminal Police force.
Lobbyist - https://projects.propublica.org/represent/lobbying/r/301033057
Don't think there's anything of substance here, but here's a data point about who VirTra is using as their lobbyists to the Senate and House. Maybe it'll end up being a well spent ~$30,000 come appropriations time. The firm is "Brooks Bawden Moore."
More IPO France & Mondial Protection Group updates
https://www.interpolice.org/post/ipo-section-france-activity-2022
Good activity happening in France.
The smaller Threat Fire --
compared to
I bet this smaller form factor would fit nicely in the Future RTES system by Nautilus
"New multi-incident scenarios with new characters and skill drills" & "Advanced Skills CO2 magazines with Bluetooth triggered malfunctions" -- These seems like they would be quite functional for parts of SVT!
Yes. I should have said “ this all ties into the V-XR product/trademark”
Re: AT, someone shared this with me back from 2012 https://f3e21fcc14.nxcli.net/action-target-founders-named-entrepreneurs-of-the-year-2/
My guess is this all ties into the VR product release, right? No use partnering with a physical range using VirTra’s screens or projectors IMO (and obviously not their recoil kits).
So you basically have what Inveris did with SRCE (https://www.inveristraining.com/srce) but with better weapon integration and hopefully no backpack. It should then be more or less in line with SiVT does and, if no backpack, also follows VirTra’s “train as you fight” mantra whole differentiating their product from InVeris.
Is this partnership for LE/military or consumer?
“ This agreement will allow both companies to use their combined expertise to provide an all-inclusive turnkey solution. ... Future projects will be implemented and managed by both parties along with co-branding to effectively execute the teaming agreement.”
This quote makes me think it’s not commercial
Thanks for always sharing these, Ardly. I highly recommend anybody interested in these smaller law enforcement wins to take a look at the list I've compiled of orders/deliveries made throughout 2021. It's important to note that, historically, news reports we've found only account for a fraction of total deliveries in a quarter.
https://docs.google.com/spreadsheets/d/1AbQ5LFvHxAZE1uqDjE_xZad9yHPzTFYe3_xk77RfAUs/edit#gid=0
GDC simulation training opportunity back live:
Anybody want to do the math? V180, 6 V-ST Pro, 30ish recoil kits + extra magazines, 8 threat-fires. Last bid was ~$500k iirc, seems similar this time.
Link:
https://ssl.doas.state.ga.us/gpr/eventDetails?eSourceNumber=46700-GDC0000993&sourceSystemType=ps
Requirements:
https://drive.google.com/file/d/1ULIcGQ3mf6t5-7FfLgN3V3cnsol-AFyD/view
the last time virtra trademarked something was V-AIMS and V-Thread-Fire. These products were specifically called out as part of the ADMIRE program work that VirTra is doing. ADMIRE deal was announced by VirTra in August, so seems to align with VirTra releasing their trademark/new functionality around the time they likely had to submit bids for that contract.
Coincidentally, SVT bid was due a couple weeks ago. So maybe this is the "sole source" opportunity Bob was referencing when he said "We have several confidential projects underway right now that we think will not be easy to duplicate. They will receive patent protection, could justify sole source awards and will position us well to solve customer problems." and their XR headsets will be used in SVT
And also, hasn’t Bob said all of their content can be used on headsets? So they would use COTS headsets use their own content, their recoil kits, plus likely some weapon integration hardware.
The new hardware keeps competition from using real weapons in training, their content is still a moat, and their recoil kits are still valuable, although the laser component isn’t required anymore.
I’m not sure how we could triangulate a headset maker.
But an interesting thing about a headset, though, if one believes VirTra is part of IVAS, is that IVAS requires some way to track weapons in the simulation. Almost assuredly there will be a box on the weapon with cameras which integrate back with the headset. This is called “inside out tracking” and from my reading seems to be the most accurate way to track accessories in VR.
This is speculation, but if VirTra somehow patented the tech (or is licensing the tech from someone else within the IVAS team) they would, similarly to what happened with recoil kits, corner the police training VR headset market for customers who wanted to use real weapons and not electronic weapons (e.g. InVeris bluefire).
The kind of difficult part would be why VirTra won the patent for it and not any of the bigger players who are part of IVAS. I suppose the likes of Microsoft probably don’t have a use for live weapon integration into their hardware…
VirTra purchased by Capitol Police after 2021 riots
https://www.rules.senate.gov/imo/media/doc/Testimony_Manger.pdf
Good question. The article was not clear at all about this.
shows that OPD also purchased Axon VR Headsets as well, so my guess is that's what they're referring to.Our Co-Responders also tried out our new @axon_us VR headsets. These are used as another tool for scenario based training. pic.twitter.com/IXht2iPQqT
— Omaha Police Dept (@OmahaPolice) December 9, 2021
SAM-T service contracts
I don't know if this is applicable to VirTra as SAM-T used Meggitt systems, but figured I'd share these open opportunities in case others feel differently.
1. https://sam.gov/opp/ff7b3975037d4ed1af82418afad02578/vie
2. https://sam.gov/opp/6c751b9a04d44edeaf6e13bdd309ff73/view
I say that i'm not sure about if it's applicable because I'm not sure if the requirement is to run training sessions or to replace existing systems (which, again, are currently owned/built by Meggitt/Inveris)
tell me more!