PRESS RELEASE

VirTra reports second quarter 2021 financial results


TEMPE, Ariz.-- VirTra, Inc. (NASDAQ: VTSI) (“VirTra”), a global provider of training simulators for the law enforcement, military, educational and commercial markets, reported results for the second quarter and six months ended June 30, 2021. The financial statements are available on VirTra’s website and here.

Second Quarter 2021 Financial Highlights:
• Total revenue increased 90% to $5.3 million
• Gross profit increased 99% to $3.1 million, or 60% of total revenue
• Net income increased to $529,400
• Adjusted EBITDA increased to $1.0 million
• Backlog increased 6% sequentially and 19% year-over-year to a record $17.0 million as of June 30, 2021
• Unrestricted cash and cash equivalents totaled $23.8 million

Six Month 2021 Financial Highlights:
• Total revenue increased 59% to $9.7 million
• Gross profit increased 80% to $5.7 million, or 59% of total revenue
• Net income increased to $1.2 million
• Adjusted EBITDA increased to $1.8 million

Second Quarter and Six Month 2021 Financial Highlights:
 

Management Commentary

“We delivered strong financial results across the board in the second quarter, highlighted by a 90% increase in total revenue and a 99% increase in gross profit,” said Bob Ferris, chairman and chief executive officer of VirTra. “Continued market demand for our products drove profitable growth while enabling us to deliver another quarter of positive net income and strong adjusted EBITDA. Demand for VirTra’s world-class training solutions from the law enforcement and military markets continues to build, demonstrated by the 6% sequential and 19% year-over-year increase in our backlog to a record $17.0 million. Our strong financial performance in the second quarter also demonstrates our team’s consistent operational excellence, as well as the value and effectiveness that VirTra’s products provide to our end users and partners globally.

“As we look ahead, we believe that our business has never been better positioned to scale than it is today. Our pipeline is expanding, our sales are accelerating, and the need for effective training that enhances skills and saves lives is increasing. We believe that our financial and operational success in the first half of the year, coupled with the strategic initiatives we’re executing, positions us to deliver accelerated and profitable growth in 2021 and beyond.”

Second Quarter 2021 Financial Results

Total revenue increased 90% to $5.3 million from $2.8 million in the second quarter of 2020. The increase in total revenue was due to an increase in the number of simulators and accessories completed and delivered, and therefore revenue recognized, compared to the same period in 2020, which faced more severe COVID-19 related travel restrictions.

Gross profit increased 99% to $3.1 million from $1.6 million in the second quarter of 2020. Gross profit margin, defined as total revenue less cost of sales, was 59.7%, an improvement compared to 57.0% in the second quarter of 2020. The improvement in gross profit and gross profit margin was due to decreased costs, and a more favorable product mix of systems, accessories and services sold compared to the same period in 2020.

Net operating expense was $2.3 million, compared to $2.4 million in the second quarter of 2020. The decrease in net operating expense was due to the one-time impairment write down in the same year-ago period, offset by an increase in software licenses in the second quarter of 2021.

Income from operations totaled $821,000, compared to a loss of $822,000 in the second quarter of 2020.

Net income totaled $529,400, or $0.05 per diluted share (based on 10.7 million weighted average diluted shares outstanding), an improvement compared to a net loss of $601,300, or $(0.08) per diluted share (based on 7.8 million weighted average diluted shares outstanding), in the second quarter of 2020.

Adjusted EBITDA, a non-GAAP metric, totaled $1.0 million, an improvement from a loss of $579,200 in the second quarter of 2020.

Backlog increased 19% to a record $17.0 million, compared to $14.3 million at the end of the second quarter of 2020.

Six Months Ended June 30, 2021 Financial Results
Total revenue increased 59% to $9.7 million from $6.1 million for the first six months of 2020. The increase in total revenue was due to an increase in the number of simulators and accessories completed and delivered, and therefore revenue recognized, compared to the same period in 2020.

Gross profit increased 80% to $5.7 million from $3.2 million for the first six months of 2020. Gross profit margin, defined as total revenue less cost of sales, was 58.8%, an improvement compared to 51.9% for the first six months of 2020. The improvement in gross profit and gross profit margin was due to decreased costs, and a more favorable product mix of systems, accessories and services sold compared to the same period in 2020.

Net operating expense was $4.3 million, compared to $4.5 million for the first six months of 2020. The decrease in net operating expense was primarily due to the impairment write down in 2020, offset by an increase in software licenses in 2021.

Operating income was $1.4 million, an improvement compared to an operating loss of $1.3 million for the first six months of 2020.

Net income totaled $1.2 million, or $0.13 per basic and diluted share (based on 9.2 million weighted average basic shares outstanding and 9.2 million weighted average diluted shares outstanding), an improvement compared to a net loss of $990,700, or $(0.13) per basic and diluted share (based on 7.7 million weighted average basic and diluted shares outstanding), for the first six months of 2020.

Adjusted EBITDA, a non-GAAP metric, totaled $1.8 million, an improvement from a loss of $978,300 for the first six months of 2020.

Conference Call

VirTra’s management will hold a conference call today (August 12, 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: 1-866-682-6100
International number: 1-862-298-0702

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

A replay of the call will be available on the same day through Thursday, August 26, 2021.

U.S. replay dial-in: 1-877-481-4010
International replay dial-in: 1-919-882-2331
Replay ID: 42395

About VirTra
VirTra (NASDAQ: VTSI) 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.

About the Presentation of Adjusted EBITDA

Adjusted earnings before interest, income taxes, depreciation, and amortization and before other non-operating costs and income (“Adjusted EBITDA”) is a non-GAAP financial measure. Adjusted EBITDA also includes non-cash stock option expense and other than temporary impairment loss on investments. Other companies may calculate Adjusted EBITDA differently. VirTra calculates its Adjusted EBITDA to eliminate the impact of certain items it does not consider to be indicative of its performance and its ongoing operations. Adjusted EBITDA is presented herein because management believes the presentation of Adjusted EBITDA provides useful information to VirTra’s investors regarding VirTra’s financial condition and results of operations and because Adjusted EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in VirTra’s industry, several of which present a form of Adjusted EBITDA when reporting their results. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of VirTra’s results as reported under accounting principles generally accepted in the United States of America (“GAAP”). Adjusted EBITDA should not be considered as an alternative for net income, cash flows from operating activities and other consolidated income or cash flows statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. A reconciliation of net income to Adjusted EBITDA is provided in the following tables:
 

 

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