PRESS RELEASE

VirTra reports fourth quarter and full year 2020 financial results


Financial results highlighted by 15th consecutive year of revenue growth, net income of $1.5 Million, and 161% increase in adjusted EBITDA.

TEMPE, Ariz. — VirTra, Inc., a global provider of training simulators for the law enforcement, military, educational and commercial markets, reported results for the fourth quarter and full year ended December 31, 2020. The financial statements are available on VirTra’s website and here.

Fourth Quarter and Full Year 2020 and Recent Highlights:

  • Appointed John Givens, a military simulation business development expert, to the Company’s board of directors
  • Appointed Marsha J. Foxx as interim vice president chief accounting officer to replace outgoing CFO, Judy Henry; Foxx appointed vice president chief accounting officer in March 2021
  • Net income increased to $1.6 million for the fourth quarter of 2020
  • Adjusted EBITDA for the full year 2020 increased 161% year-over-year to $2.8 million
  • Backlog increased to a record $14.6 million as of December 31, 2020

Fourth Quarter and Full Year 2020 Financial Highlights:

Management Commentary

“In 2020, VirTra’s top notch staff adapted to the new pandemic restrictions and even generated what was, by many metrics, the most successful year in our company’s history,” said Bob Ferris, chairman and chief executive officer of VirTra. “In the fourth quarter, we grew revenues to $6.6 million while we held our costs in check, which allowed us to produce $1.6 million in net income and $2.2 million in adjusted EBITDA. Our determined staff’s ability to convert some of our large backlog into revenue before the year’s end caused our topline revenue to grow for the 15th consecutive year in 2020 – a real accomplishment given the pandemic headwinds. Had it not been for a large one-time impairment on an investment directly impacted by COVID-19, the year 2020 would have been the most profitable year in VirTra’s history, and if we look at our cash flow, it was.

“The demand for VirTra’s products continues to increase as a larger number of police and military staff are seeking the best simulation training solutions. We have a long track record of innovation and of investing back into our business to ensure we provide the best simulation training possible for the greatest number, and those investments are well positioned to benefit both trainees and our shareholders in the future.

“Our confidence in the future is buoyed by our ability to generate higher revenues in 2020 and exit the year with increased backlog of $14.6 million. Our cash position has more than doubled from 2019, and we continue to carry no debt other than our PPP loan. While international sales were substantially impacted by COVID-19 travel restrictions in 2020, we compensated with our proven ability to effectively sell to domestic law enforcement and to expand further in the military market. An improving domestic and international market gives us reason to be optimistic about our prospects in 2021 and beyond.”

Fourth Quarter 2020 Financial Results

Total revenue increased 11% to $6.6 million from $5.9 million in the fourth quarter of 2019. The increase in total revenue was due to an improved ability to ship equipment to a larger number of customers.

Gross profit increased 80% to $4.8 million (72.5% of total revenue) from $2.6 million (44.8% of total revenue) in the fourth quarter of 2019. The increase in gross profit was primarily due to differences in the quantity and type of simulator systems, type of accessories and variety of services sold, combined with a decrease in cost of sales.

Operating expense was $3.4 million compared to $2.3 million in the fourth quarter of 2019. The increase in operating expense was mainly due to a one-time $434,000 impairment in the investment in That’s Eatertainment Corp. (“TEC”), which was recorded as an operating expense, as well as a $307,000 allowance for bad debt on accounts and notes receivable.

Income from operations was $1.3 million compared to $356,000 in the fourth quarter of 2019.

Net income totaled $1.6 million, or $0.21 per diluted share, compared to a net loss of $66,000, or $(0.01) per diluted share, in the fourth quarter of 2019.

Adjusted EBITDA was $2.2 million compared to $729,000 in the fourth quarter of 2019.

Full Year 2020 Financial Results

Total revenue increased 2% to $19.1 million from $18.7 million in 2019. The increase in total revenue was due to an increase in sales and subscription sales of simulators, accessories, curriculum and training, and recurring extended warranty revenue in 2020.

Gross profit increased 23% to $11.9 million (62.3% of total revenue) from $9.7 million (51.9% of total revenue) in 2019. The increase in gross profit was primarily due to sales volume, product mix and a decrease in costs partly related to less travel and fewer tradeshows due to COVID-19. Gross profit historically has remained fairly consistent annually as a percentage of total revenue.

Operating expense was $10.7 million compared to $9.5 million in 2019. The increase in net operating expense was primarily due to a one-time $840,000 impairment in the investment of TEC, which was recorded as an operating expense, as well as a $346,000 allowance for bad debt on accounts and notes receivable.

Income from operations was $1.2 million compared to $262,000 in 2019.

Net income totaled $1.5 million, or $0.19 per diluted share, compared to net loss of $75,000, or $(0.01) per diluted share in 2019.

Adjusted EBITDA was $2.8 million compared to adjusted EBITDA of $1.1 million in 2019.

At December 31, 2020, backlog totaled approximately $14.6 million, compared $14.4 million at September 30, 2019 and $9.6 million at December 31, 2019.

Accounts receivable and unbilled revenues totaled approximately $6.8 million as of December 31, 2020, compared to $5.9 million at December 31, 2019, an increase of $899,000. Cash and cash equivalents totaled $6.8 million at December 31, 2020 compared to cash and cash equivalents and certificates of deposit of $3.3 million at December 31, 2019, an increase of $3.5 million.

Conference Call

VirTra management will hold a conference call today (March 29, 2021) 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 chief accounting officer, Marsha Foxx, will host the call, followed by a question and answer period.

U.S. dial-in number: 888-506-0062
International number: 973-528-0011
Conference code: 767811

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 the company’s website.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through April 29, 2021.

Toll-free replay number: 877-481-4010
International replay number: 919-882-2331
Replay ID: 40315

About VirTra
VirTra is a global provider of judgmental use of force training simulators, firearms training simulators and driving 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.

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