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VirTra reports second quarter and first half 2023 financial results

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Record quarterly and first half revenue of $10 million and $20 million, up 29% and 38% year-over-year, respectively

CHANDLER, Ariz. — VirTra, Inc. (Nasdaq: VTSI) (“VirTra”), a global provider of judgmental use of force training simulators, firearms training simulators for the law enforcement and military markets, reported results for the second quarter ended June 30, 2023. The financial statements are available on VirTra’s website and here.

Second Quarter 2023 Financial Highlights:

  • Total revenue increased 29% to a record $10.3 million
  • Gross profit increased 25% to $5.9 million, or 57% of total revenue
  • Net income increased by $0.2 million to $1.0 million
  • Adjusted EBITDA increased to $2.6 million
  • Cash and cash equivalents of $13.3 million at June 30, 2023

Six Month 2023 Financial Highlights:

  • Total revenue increased 38% to $20.4 million
  • Gross profit increased 53% to $12.9 million, or 63% of total revenue
  • Net income increased by $2.6 million to $4.0 million
  • Adjusted EBITDA increased to $6.5 million

Second Quarter and Six Month 2023 Financial Highlights:

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VirTra

Management Commentary

“Led by record-breaking revenue in the double-digit millions during the first two quarters of 2023, we have achieved the best bottom-line results in our 30-year history,” said Bob Ferris, chairman and co-CEO of VirTra. “This exceptional financial performance is a testament to the effectiveness of our internal process improvements and streamlined operations. To further solidify our market leadership and expand revenue streams, we continue to actively pursue additional product and content development initiatives to enhance VirTra’s already powerful training capabilities.”

John Givens, co-CEO of VirTra, added: “Our topline results reflect the transformation we have made in fulfillment efficiency, which serves as a key indicator of our scaling abilities and our long-term operational capabilities. We are now applying that same focus and tenacity by taking proactive measures to increase our bookings and maximize our market potential, both domestically and internationally. Our sales enhancement initiatives are already underway and coupled with our unwavering commitment to product quality and a customer-centric approach, we are advancing along our strategic roadmap while further optimizing our business operations to even greater profitability and efficiency in the years ahead.”

Second Quarter 2023 Financial Results

Total revenue increased 29% to $10.3 million from $8.0 million in the second quarter of 2022. The increase in revenue was driven by an improvement in operations which helped to move through backlog and ship orders at a record pace.

Gross profit increased 25% to $5.9 million from $4.7 million in the second quarter of 2022. Gross profit margin was 57%, a decrease compared to 59% in the second quarter of 2022. The decrease in gross margins resulted from one-time inventory adjustments made when we went live with our new ERP system, which had the effect of increasing the cost of sales in Q2 2023.

Net operating expense was $4.0 million, compared to $3.7 million in the second quarter of 2022. The increase in net operating expense was associated with salary and benefits increase and the Orlando office expenses.

Operating income increased by $0.9 million to $1.9 million from $1.0 million in the second quarter of 2022.

Net income was $1.0 million, or $0.09 per diluted share (based on 10.9 million weighted average diluted shares outstanding), an improvement compared to net income of $0.8 million, or $0.07 per diluted share (based on 10.9 million weighted average diluted shares outstanding), in the second quarter of 2022.

Adjusted EBITDA, a non-GAAP metric, increased to $2.6 million from $1.3 million in the second quarter of 2022.

Six Months Ended June 30, 2023 Financial Results

Total revenue increased 38% to $20.4 million from $14.8 million in the first six months of 2022. The increase in revenue was driven by improvements in operations, which helped the Company to move through the backlog and ship orders at a record pace.

Gross profit increased 53% to $12.9 million from $8.4 million in the first six months of 2022. Gross profit margin was 63%, an increase compared to 57% in the first half of 2022. The increase in gross profit margin was primarily due to the aforementioned increase in revenue while maintaining cost of sales in line with 2022 levels.

Net operating expense was $7.5 million, compared to $6.7 million in the first six months of 2022. The increase in net operating expense was primarily due to an increase in salaries and benefits due to additional staff and the expenses for the new Orlando office, as well as an increase in R&D spend.

Operating income jumped to $5.4 million, a $3.6 increase from $1.8 million in the prior year period.

Net income was $4.0 million, or $0.36 per diluted share (based on 10.9 million weighted average diluted shares outstanding), an improvement compared to net income of $1.4 million, or $0.13 per diluted share (based on 10.9 million weighted average diluted shares outstanding), in the first half of 2022.

Adjusted EBITDA, a non-GAAP metric, increased to $6.5 million from $2.3 million in the first six months of 2022.

Financial Commentary

“The strong first half results underscore the successful execution of our growth and profitability initiatives,” said CFO Alanna Boudreau. “Achieving a robust gross profit margin of 63%, we exemplify our dedication to maintaining cost of sales while effectively selling a favorable mix of simulators, accessories, and services. Our record net income of $4.0 million and adjusted EBITDA of $6.5 million demonstrate the leverage in our model and our ability to effectively manage expenses. As we progress into the second half of the year with a markedly lower backlog of $16.4 million, we’ve clearly proven our new and enhanced ability to promptly fulfill orders. Simultaneously, it presents a challenge that encourages us to continue operating efficiently as we proactively optimize our sales pipeline. These efforts, combined with the impressive first half performance, set us well on pace to exceed our targets for the year.”

About VirTra, Inc.

VirTra (Nasdaq: VTSI) is a global provider of judgmental use of force training simulators, firearms training 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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