VirTra Reports First Quarter 2019 Financial Results
TEMPE, Ariz. — May 13, 2019 — 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, 2019. The financial statements are available on VirTra’s website and here.
First Quarter 2019 and Recent Highlights:
In January 2019, the board of directors increased the company’s stock repurchase program from $1.0 million to $2.0 million; between January 1 and April 30, 2019, the company purchased an additional $318,000 of common stock
Launched Subscription Training Equipment and Partnership (STEP) program, allowing agencies to utilize VirTra’s products on a subscription basis, thereby increasing VirTra’s total addressable market and recurring revenue
Launched Driving Simulator product line and secured a $1.9 million, inaugural contract for driving simulators from the Department of State for the Republic of Mexico
Acquired simulated firearm technology patent portfolio to enhance its current product lineup of drop-in recoil kits with jamming as well as create new training equipment for both military and law enforcement simulation training
Launched the only accredited simulator training curriculum for high-risk vehicle stops
VirTra V-300 simulator and Threat-Fire™ used in joint behavioral study by the U.S. Army Research Laboratory, University of Pennsylvania, and University of California, Santa Barbara to measure interdependence among emotional reactivity, stress, and anxiety
Debuted new drop-in recoil kits for new weapons at the Shot Show in January 2019
First Quarter 2019 Financial Highlights:
All figures in millions, except per share data Q1 2019 Q1 2018 % ? Q1 2019 Q4 2018 % ?
Total Revenue $3.05 $3.29 -7% $3.05 $2.53 20%
Gross Profit $1.8 $2.26 -20% $1.80 $0.96 88%
Gross Margin 59.0% 68.8% -14% 59.0% 37.8% 56%
Net Loss ($0.31) ($0.09) -265% ($0.31) ($1.06) 70%
Diluted Earnings Per Share (EPS) ($0.04) ($0.01) -300% ($0.04) ($0.13) 69%
Management Commentary
“The first quarter of 2019 marked an important point in our company’s development, as we began implementing new strategic growth initiatives, which we believe will have a substantial positive impact on our business in the years to come,” said Bob Ferris, Chairman and Chief Executive Officer of VirTra. “In the first quarter, we launched the STEP program, a subscription model for our products that lowers the barrier to entry for many customers, we introduced new curriculum for high-risk vehicle stops, and announced our new Driving Simulator product line for which we have already secured a $1.9 million contract with an existing customer. In addition to these exciting new initiatives, we strengthened our product offerings by acquiring key patents for drop-in recoil kits, along with bolstering our management team with the addition of industry veteran Steve Handel, who is now serving as our new VP of Program Management.
“From a financial perspective, we saw many sequential improvements in our results, including a 20% increase in revenue, an 88% increase in gross profit, and gross margins increasing to 59%, which is more in-line with our historical numbers. Our balance sheet continues to remain strong with nearly $4.6 million in cash, cash equivalents and CDs. During the first quarter, we repurchased 68,239 shares of common stock at an average cost of $3.82 per share and retired all outstanding treasury shares of our common stock. Subsequent to the quarter, we repurchased an additional 14,450 shares at an average cost of $3.97 per share. In addition, new bookings for the first quarter totaled $5.3 million and backlog increased to $9.0 million, which bodes well for our business and gives us confidence in our outlook that 2019 has the potential to be a strong year for VirTra.
“While the benefits of these new initiatives will take time to come to fruition, we are confident that they will be of great value to our business over the coming quarters and years. We believe that the additions of our new programs and our ever-improving product suite, combined with our strong balance sheet, mean that VirTra is now more flexible, dynamic, and in the best position in our company’s history to capture a greater share of our core law enforcement market, while also expanding into the military market. We believe that these positive changes ultimately will translate to greater value for our loyal shareholders and better training that saves lives. This is an exciting time at VirTra, and we look forward to building on our progress throughout the year.”
First Quarter 2019 Financial Results
Total revenue increased 20% to $3.1 million from $2.5 million in the prior quarter and decreased 7% from $3.3 million in the first quarter of 2018. The year-over-year decrease in total revenue was due to lower simulator and accessories sales, which were partially offset by increases in recurring extended warranty and other revenues.
Gross profit increased 88% to $1.8 million (59.0% of total revenue) from $1.0 million (37.8% of total revenue) in the prior quarter and decreased 20% from $2.3 million (68.8% of total revenue) in the first quarter of 2018. The year-over-year decrease in gross profit was primarily due to differences in the product mix and quantity of systems, accessories and services sold.
Net operating expense decreased 20% to $2.3 million from $2.8 million in the prior quarter and decreased 7% from $2.4 million in the first quarter of 2018. The decrease in net operating expense was due to reduced selling, general and administrative costs for labor, benefits, professional services, public company expense, research and development expenses and bad debt.
Loss from operations was $457,000 compared to a loss of $1.9 million in the prior quarter and a loss of $158,000 in the first quarter of 2018.
Net loss totaled $313,000, or $(0.04) per diluted share, compared to a loss of $1.1 million, or $(0.13) per diluted share, in the prior quarter and a loss of $86,000, or $(0.01) per diluted share, in the first quarter of 2018.
Cash and cash equivalents and certificates of deposit totaled $4.6 million at quarter end.
Adjusted EBITDA loss totaled $278,000 compared to a loss of $46,000 in the first quarter of 2018.
Conference Call
VirTra management will hold a conference call today (May 13, 2019) 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: 877-407-8031
International number: 201-689-8031
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 27, 2019.
Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 48710
