Wrap Technologies reports third quarter 2021 results
Launch of New BolaWrap 150 Further Solidifies Company as a Leader in Modern Police Technology; Delivered 79% Revenue Growth
TEMPE, Arizona – Wrap Technologies, Inc., a global leader in innovative public safety technologies and services, today announced results for the third quarter ended September 30, 2021.
Third Quarter 2021 Summary
- Net Revenues of $1.8 million, growth of 79% over prior year Q3
- Gross Margin of 39% compared with 32% for prior year Q3
- Launched upgraded version of flagship remote restraint product – the BolaWrap 150
- Announced a collaboration with Amazon Web Services (AWS) to deliver WRAP Reality’s VR training platform to law enforcement
- Trained agencies increased to 940, growth of 109% from December 31, 2020
- Certified officer instructors increased to 3,250, up 139% from December 31, 2020
- Published initial Environmental. Social, and Governance (ESG) Letter to Stakeholders
- Continued strategy of releasing successful body-cam videos of successful BolaWrap uses by law enforcement agencies – increases awareness and educates public on de-escalation effectiveness
After the end of Q3, the Company received a repeat order from an international distributor for 500 devices, 50,000 cartridges and related accessories expected to be shipped in Q4 2021 and Q1 2022.
Management Commentary – Tom Smith, CEO and President
“During the third quarter, we continued to build the foundation for the future of law enforcement worldwide. This foundation was further solidified recently with the launch of the first major upgrade to our flagship product – the BolaWrap 150. This is a significant advancement as we incorporated specific feedback from officers using our product in the field. We believe our newest model will be attractive to new agencies and those who have already invested in safer policing with the original BolaWrap 100. We also believe the transition to the new model impacted our revenue growth in the third quarter as some agencies may have delayed purchasing decisions pending the 150’s launch. However, as we demonstrate the BolaWrap 150, we anticipate that demand will grow. The recent international order demonstrates continued progress on our long-term growth plan.”
(1) As compared to the prior-year period.
(2) Excluding one-time expenses of $0.7 million incurred in the 2Q21, the gross margin rate was 38% for the YTD 2021.
THIRD QUARTER 2021 FINANCIAL AND OPERATIONS HIGHLIGHTS
- Generated revenues of $1.8 million for 3Q21, 79% growth compared to 3Q20.
- We expect the pandemic to continue to impact sales efforts on a diminishing basis both in the U.S. and internationally.
- Generated $0.7 million of gross profit in 3Q21.
- We anticipate our gross margin to fluctuate as we ramp our revenue base and transition to the BolaWrap 150.
- We expect our recently released upgraded model of our flagship product will contribute to planned gross margin expansion.
Selling, General and Administrative (SG&A) Expense
- SG&A expense increased $1.4 million in 3Q21 compared to 3Q20.
- Increase was driven primarily by a $0.6 million increase in non-cash share-based compensation, $0.6 million in compensation and consultancy costs as we invest in our sales force and training teams, and $0.2 million of public reporting expense.
- Travel expense increased modestly during 3Q21 but remained lower than historic norms.
Research and Development (R&D) Expense
- R&D expense increased $1.1 million in 3Q21 to $2.1 million, as compared to 3Q20, due primarily to the development of the new BolaWrap 150 and other R&D initiatives.
- We continue to invest in R&D as we expand important research initiatives in response to identified market opportunities, including further development of WRAP Reality, our virtual training platform.
Capital Structure and Liquidity
- Cash, cash equivalents and short-term investments were $39.9 million at end of 3Q21 compared to $43.0 million at 2Q21, representing 82% of total assets.
As international travel remains limited, we continue to expect near-term headwinds to growth. We anticipate this will continue through the remainder of 2021. In addition, awareness and acceptance of our upgraded BolaWrap 150 may affect our near-term order levels. Accordingly, near-term growth is difficult to project. However, as we demonstrate the BolaWrap 150, and travel restrictions loosen, we anticipate that our growth will continue.
Webcast and Earnings Conference Call
The Company will host a live Zoom video webcast for investors and other interested parties beginning at 4:30 p.m. Eastern Time on Thursday, October 28, 2021. The call will be hosted by Tom Smith, CEO and President, Jim Barnes, CFO, Secretary and Treasurer, and Paul Manley, VP of Investor Relations.
WEBCAST LINK: Webcast Registration Link
Participants may access the live webcast by visiting the Company’s Investor Relations page at www.wrap.com. A webcast replay of the call will be available on the Company’s Investor Relations page within 24 hours of the live call ending.
WRAP Technologies is a global leader in innovative public safety technologies and services. WRAP develops creative solutions to complex issues and empowers public safety officials to protect and serve their communities through its portfolio of advanced technology and training solutions.
WRAP’s BolaWRAP® Remote Restraint device is a patented, hand-held pre-escalation and apprehension tool that discharges a Kevlar® tether to temporarily restrain uncooperative suspects and persons in crisis from a distance. Through its many field uses and growing adoption by agencies across the globe, BolaWRAP is proving to be an effective tool to help law enforcement safely detain persons without injury or the need to use higher levels of force.
WRAP Reality, the Company’s virtual reality training system, is a fully immersive training simulator and comprehensive public safety training platform providing first responders with the discipline and practice in methods of de-escalation, conflict resolution, and use-of-force to better perform in the field.
WRAP’s headquarters are in Tempe, Arizona. For more information, please visit wrap.com.