TEMPE, AZ, Jul 19, 2012 (MARKETWIRE via COMTEX) — VirTra Systems (PINKSHEETS: VTSI), a leading provider of firearms training simulation systems to military, law enforcement agencies and other organizations, today announced the release of its year end 2011 audited financial statements. The audited financial statements are available on VirTra’s website and here.
VirTra Systems has released the report of its independent registered public accounting firm, BDO Seidman Alliance member Semple, Marchal & Cooper, LLP, on the corporate financial statements for the fiscal year ended December 31, 2011. The company reported annual gross revenue of $7,861,780 for the period ending December 31, 2011. This represents the highest level of gross revenue in the history of the company. Cost of goods sold for the year was $3,797,377, representing a gross profit margin of 52%. General and administrative expenses were $4,754,593 and the company reported a net loss for 2011 of $692,761.
There were several contributing factors to the reported results. VirTra expanded its market into civilian firearms training for the first time during 2011, helping the company achieve a record level of gross revenue. To support this growth as well as prepare for an increase in military training simulation sales, VirTra invested in a 40,000 square foot state-of-the-art facility as well as a substantial increase in staff. VirTra also invested approximately $1,135,000 in 2011 to develop new products and scenarios. Furthermore, the company’s expenses in the past fiscal year included aggressive sales and marketing activities such as exhibiting at domestic and worldwide tradeshows and sales trips. In addition, VirTra reported deferred revenue of $1,987,162 which encompassed customer orders that were not fully completed as of December 31, 2011 and therefore all payments received on these projects were shown as a liability instead of as revenue. All of these projects have since been completed and were done so on schedule.
Completion of the audit was delayed due to a number of factors. VirTra last had a certified audit completed on the company’s financials for the period ended December 31, 2007. Therefore, the company and its current auditors were required to research through prior periods to obtain a portion of necessary support documents including reviewing equity investments made over a number of years. In addition, on March 30, 2012 VirTra accepted the resignation of the corporate controller responsible for managing the audit process. This required the company to undergo a process over a 45 day period to locate and interview experienced financial and accounting individuals. Ultimately this led to the hiring of the company’s current director of finance, corporate controller who immediately began working with VirTra’s auditors to complete the audit of its year-end 2011 financial statements as quickly as possible.
The delay was also in part based on the Company’s decision to modify the recognition of its revenue from the percentage-of-completion method of accounting to recognizing of revenue upon delivery and acceptance of the product. VirTra and its auditors believe that this modification in the revenue recognition policy is the preferred method for the recognition of the Company’s revenues and costs given the terms of its contracts. In addition, VirTra removed the intellectual property assets described on the balance sheet of previous reports. While VirTra retains all rights to such intellectual property and engineering work, the reported value for accounting purposes was adjusted to $0. These changes to the company’s accounting methodology were made to better align VirTra with accounting policies generally accepted in the United States and in preparation for a potential filing to become a reporting company to the Securities and Exchange Commission in the future.
At present, the company expects to release its first quarter 2012 unaudited financial results by the end of July and it anticipates releasing its second quarter 2012 unaudited financial results on or before August 14.
Bob Ferris, Chief Executive Officer of VirTra, stated, “2011 was an important year for our company, from the record setting gross revenue to our intentional investments for potential future growth at a time ripe with opportunities.”
About VirTra Systems
VirTra is a global leading provider of the world’s most realistic and effective small arms simulators. VirTra is the higher standard in firearms training simulators, offering a wide variety of state-of-the-art simulators, powerful simulated recoil weapons and the patented Threat-Fire(TM) 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.
VirTra and the VirTra logo are trademarks of VirTra Systems, Inc.
This news release includes certain information that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements 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.
Investor Relations Counsel
Rudy R. Miller
Chairman, President & CEO
The Miller Group
View PDF of 2011 VirTra’s Audited Financial Statements