TEMPE, AZ, May 15, 2015 (GLOBE NEWSWIRE) — VirTra Systems (OTC Pink:VTSI), a leading provider of use-of-force and firearms simulators to military, law enforcement agencies and other organizations, today announced its results for the first quarter ended March 31, 2015. The financial statements are available on VirTra’s website and here.
First Quarter 2015 Financial Summary:
- Net sales were $2.6 million for the quarter ending March 31, 2015, up 30% compared to $2.0 million in the first quarter of 2014.
- Gross margin for the quarter was 59% of net sales, compared to 62% in the prior year’s quarter. The decline was primarily due to higher personnel expenses recorded in cost of products sold and certain client driven customization projects that generate lower margins than what the Company typically experiences on products sold.
- SG&A expenses were $1.5 million, an increase from $1.0 million in the same period last year. The increase was primarily due to a 34% increase in our workforce in order to support Modern Round requirements while continuing to invest in our products for military and law enforcement markets. The Company also increased its participation in both U.S. and international industry trade shows.
- Net income was $0.2 million for both first quarter periods. Included in net income for the first quarter of 2015 is other income of $0.1 million, representing a gain due to the Company’s new equity position in Modern Round, LLC. As part of the agreement VirTra was provided a 5% ownership stake in Modern Round and the $0.1 million recorded gain values Modern Round at approximately the same valuation used in the initial investment made by Modern Round’s founders.
- Stockholders’ equity increased to $2.9 million, compared with $2.7 million at December 31, 2014. The Company had no outstanding debt as of March 31, 2015.
- Cash and cash equivalents were $1.3 million at March 31, 2015, down from $1.9 million at December 31, 2014.
Other Significant Events:
- Entered into a co-venture with Modern Round, LLC in which VirTra will design and provide the simulators for shooting lounges being developed by Modern Round. Modern Round is a private firm co-founded by Smith & Wesson Chairman Barry Monheit.
- Successfully defended two of the Company’s simulation patents, its US Patent No. 8,267,691 entitled THREAT FIRE SIMULATION AND TRAINING SYSTEM and US Patent No. 8,016,594 entitled METHOD OF TRAINING UTILIZING A THREAT FIRE SIMULATION SYSTEM. In the settlement, FAAC and VirTra agreed to an undisclosed settlement amount and FAAC agreed not to infringe the VirTra patents.
- In September 2014 the Department of Homeland Security selected VirTra for an approximate $6.0 million award. As of the end of the first quarter of 2015 approximately $0.8 million of revenue has been recognized under this contract. The Company expects to complete the remainder of the contract, but the exact timing is dependent on when the remaining customer locations are ready to receive the equipment.
Bob Ferris, Chairman and Chief Executive Officer of VirTra, commented: “We started the year off with continued operating momentum as we execute on our plans for increased market penetration. We are excited about supplying more customers with effective simulation solutions in the law enforcement, military and commercial marketplaces. One of our key strategic objectives is to leverage our proprietary technology and unmatched experience in simulation into additional markets to further monetize the investments we’ve already made. The Modern Round venture represents one of our first opportunities to pursue this strategic objective while we continue to invest in and grow our law enforcement and military markets.”
Mark Skidmore, Vice President and Chief Accounting Officer for VirTra, said: “We continue to invest in our future, ending the quarter with 51 employees, a 34% increase over the first quarter of 2014. As we move forward in 2015, we believe that we are on track to make 2015 a year of improved revenue and profits as compared with 2014.”
About VirTra Systems
VirTra is a global leading provider of the world’s most realistic and effective shooting simulators. VirTra is the higher standard in firearms training simulators, offering a variety of simulator platforms, powerful gas-powered recoil kits and the patented Threat-Fire™ 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.
Forward-looking Statements
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.
– – – -FINANCIALS FOLLOWING- – – –
VIRTRA SYSTEMS, INC. BALANCE SHEETS
| March 31, 2015 | December 31, 2014 | |
| Assets | (unaudited) | (audited) |
| Current assets: | ||
| Cash and cash equivalents | $ 1,325,682 | $ 1,912,729 |
| Accounts receivable | 2,490,801 | 1,610,381 |
| Inventory | 902,744 | 702,829 |
| Prepaid expenses and other current assets | 49,680 | 58,124 |
| Total current assets | 4,768,907 | 4,284,063 |
| Property and equipment, net | 463,206 | 367,898 |
| Investment in Modern Round, LLC | 136,579 | — |
| Total assets | $ 5,368,692 | $ 4,651,961 |
| Liabilities and Stockholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 506,776 | $ 339,373 |
| Accrued compensation and related costs | 493,524 | 394,920 |
| Accrued expenses and other current liabilities | 154,654 | 147,904 |
| Deferred revenue | 1,108,954 | 952,464 |
| Total current liabilities | 2,263,908 | 1,834,661 |
| Long-term liabilities: | ||
| Accrued rent liability – long-term | 159,810 | 95,375 |
| Total liabilities | 2,423,718 | 1,930,036 |
| Commitments and contingencies | ||
| Stockholders’ equity: | ||
| Preferred stock $0.005 par value; 2,000,000 shares authorized; no shares issued or outstanding as of March 31, 2015 and December 31, 2014 | — | — |
| Common stock $0.005 par value; 500,000,000 shares authorized; 158,328,245 shares issued and 158,285,045 shares outstanding as of March 31, 2015 and December 31, 2014, respectively | 791,641 | 791,641 |
| Additional paid-in capital | 13,277,770 | 13,239,621 |
| Treasury stock at cost, 43,200 common shares as of March 31, 2015 and December 31, 2014, respectively | (2,981) | (2,981) |
| Accumulated deficit | (11,121,456) | (11,306,356) |
| Total stockholders’ equity | 2,944,974 | 2,721,925 |
| Total liabilities and stockholders’ equity | $ 5,368,692 | $ 4,651,961 |
VIRTRA SYSTEMS, INC. STATEMENTS OF OPERATIONS (unaudited)
| Three months ended March 31, | ||
| 2015 | 2014 | |
| Net revenues | $ 2,584,796 | $ 1,961,650 |
| Cost of products sold | 1,072,551 | 751,192 |
| Gross profit | 1,512,245 | 1,210,458 |
| General and administrative expenses | 1,462,418 | 972,882 |
| Income from operations | 49,827 | 237,576 |
| Other income/(expense): | ||
| Other income | 137,137 | 807 |
| Other expense | (2,064) | — |
| Net other income/(expense) | 135,073 | 807 |
| Income before income taxes | 184,900 | 238,383 |
| Income tax expense/(benefit) | — | — |
| Net income | $ 184,900 | $ 238,383 |
| Weighted average of common and common equivalent shares outstanding: | ||
| -Basic | 158,285,045 | 158,285,045 |
| Net income per common and common equivalent share: | ||
| -Basic | $ 0.00 | $ 0.00 |
VIRTRA SYSTEMS, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY
| Common stock | ||||||
| Additional | Treasury | Accumulated | ||||
| Shares | Amount | paid-in capital | Stock | Deficit | Total | |
| Balance at January 1, 2014 | 158,285,045 | $ 791,641 | $ 13,144,044 | $ (2,981) | $ (12,567,597) | $ 1,365,107 |
| Net income | — | — | — | — | 1,261,241 | 1,261,241 |
| Stock-based compensation | — | — | 95,577 | — | — | 95,577 |
| Balance at December 31, 2014 | 158,285,045 | 791,641 | 13,239,621 | (2,981) | (11,306,356) | 2,721,925 |
| Net income | — | — | — | — | 184,900 | 184,900 |
| Stock-based compensation | — | — | 38,149 | — | — | 38,149 |
| Balance at March 31, 2015 | 158,285,045 | $ 791,641 | $ 13,277,770 | $ (2,981) | $ (11,121,456) | $ 2,944,974 |
VIRTRA SYSTEMS, INC. STATEMENTS OF CASH FLOWS (unaudited)
| Three months ended March 31, | ||
| 2015 | 2014 | |
| Cash flows from operating activities: | ||
| Net income | $ 184,900 | $ 238,383 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 44,144 | 52,024 |
| Stock-based compensation | 38,149 | 25,433 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (880,420) | 135,143 |
| Inventory | (199,915) | (164,922) |
| Prepaid expenses and other current assets | 8,444 | (62,832) |
| Accounts payable and other accrued expenses | 337,192 | (285,171) |
| Deferred revenue | 156,490 | (676,929) |
| Net cash provided/(used) by operating activities | (311,016) | (738,871) |
| Cash flows from investing activities: | ||
| Investment in Modern Round, LLC | (136,579) | — |
| Purchase of property and equipment | (139,452) | (15,000) |
| Net cash used in investing activities | (276,031) | (15,000) |
| Cash flows from financing activities: | ||
| Draws on line of credit | — | — |
| Repayments of line of credit | — | — |
| Net cash used in financing activities | — | — |
| Increase/(decrease) in cash and cash equivalents | (587,047) | (753,871) |
| Cash and cash equivalents, beginning of period | 1,912,729 | 2,358,955 |
| Cash and cash equivalents, end of period | $ 1,325,682 | $ 1,605,084 |
| Cash paid during the period for: | ||
| Interest | $ — | $ — |
| Taxes | $ — | $ — |
CONTACT: Investor Relations Counsel
Larry Clark
Matt Andrejczak
Financial Profiles, Inc.
(310) 478-2700
vtsi@finprofiles.com
Copyright © 2015 GlobeNewswire. All Rights Reserved.
The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.
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