GlobeNewswire Inc | May 17, 2021 04:05PM EDT

May 17, 2021

TEMPE, Ariz., May 17, 2021 (GLOBE NEWSWIRE) -- VirTra, Inc. (NASDAQ:VTSI) (VirTra), a global provider of training simulators for the law enforcement, military, educational and commercial markets, reported results for the first quarter ended March 31, 2021. The financial statements are available on VirTras website andhere.

First Quarter 2021 and Recent Highlights:

-- Revenues increased 33% to $4.4 million -- Net income increased to $655,000 for the first quarter of 2021 -- Adjusted EBITDA increased to $751,000 -- Backlog increased 10% sequentially and 42% year-over-year to a record $16.1 million as of March 31, 2021 -- Subsequent to the quarters end, successfully executed a registered direct offering, generating $18.0 million gross proceeds for three million shares of common stock and increasing the companys cash and cash equivalents to approximately $23.7 million as of May 17, 2021

First Quarter 2021 Financial Highlights:

All figures in millions, except per share data Q1 2021 Q1 2020 % ?Total Revenue $4.4 $3.3 33% Gross Profit $2.6 $1.6 61%Gross Margin 57.8% 47.8% 21% Net Income/Loss $0.7 ($0.4) N/ADiluted EPS $0.08 ($0.05) N/AAdjusted EBITDA $0.75 ($0.33) N/A

Management Commentary

After completing a very successful 2020, we continued to build on our momentum through the first quarter of 2021, delivering another quarter of positive results as our sales and profits increased, said Bob Ferris, chairman and chief executive officer of VirTra. Financially, the quarter was highlighted by $4.4 million in revenue, net income of $655,000, and adjusted EBITDA of $751,000, all of which are substantial improvements from the prior year period. Perhaps most encouraging, while our revenues improved 33% year-over-year, our backlog increased 42% year-over-year and 10% sequentially to a record $16.1 million, which demonstrates that demand for VirTras solutions is reaching new levels. To better position VirTra to capitalize on opportunities to grow even further, we raised $18 million in a direct offering subsequent to the quarters end.

With our current momentum and an enhanced balance sheet, we believe our business has never been better positioned to grow than it is today. Our pipeline is expanding, our sales are accelerating, and the need for effective, certified training that improves skills and saves lives in the real world shows no signs of diminishing. As a result, we believe 2021 will be another strong year for our business.

First Quarter 2021 Financial Results

Total revenue increased 33% to $4.4 million from $3.3 million in the first 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.

Gross profit increased 61% to $2.6 million (57.8% of total revenue) from $1.6 million (47.8% of total revenue) in the first quarter of 2020. The increase in gross profit was primarily due to decreased costs, as well as differences in the product mix of systems, accessories, and services sold.

Operating expense decreased 5% to $2.0 million from $2.1 million in the first quarter of 2020. The decrease in operating expense was mainly due to reduced selling and travel expenses, partially offset by an increase in professional services expense.

Income from operations increased to $564,000 from a loss from operations of $512,000 in the first quarter of 2020.

Net income totaled $655,000, or $0.08 per diluted share, compared to a net loss of $389,000, or $(0.05) per diluted share, in the first quarter of 2020.

Adjusted EBITDA increased to $751,000 from a loss of $326,000 in the first quarter of 2020.

At December 31, 2020, backlog totaled approximately $16.1 million, compared to $14.6 million at December 31, 2020 and $11.3 million at March 31, 2020.

Accounts receivable and unbilled revenues totaled approximately $8.9 million as of March 31, 2021, compared to $6.8 million at December 31, 2020, an increase of $2.1 million. Cash and cash equivalents totaled $5.0 million at March 31, 2021 compared to cash and cash equivalents of $6.8 million at December 31, 2020, a change of $1.8 million.

Subsequent to the quarters end, VirTra completed a registered direct offering in which the company raised $18.0 million in gross proceeds, before deducting expenses, for three million shares of common stock. As a result, as of May 17, 2021, the company had approximately $23.7 million in cash and cash equivalents and 10,777,530 shares outstanding.

Conference Call

VirTras management will hold a conference call today (May 17, 2021) at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. VirTras 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: 877-545-0320International number: 973-528-0016Conference code: 206857

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 VirTras 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 companys website.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through May 31, 2021.

Toll-free replay number: 877-481-4010International replay number: 919-882-2331Replay ID: 41304

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 companys patented technologies, software, and scenarios provide intense training for de-escalation, judgmental use-of-force, marksmanship and related training that mimics real-world situations. VirTras 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 VirTras investors regarding VirTras 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 VirTras 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 VirTras 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:

For the Three Months Ended March 31, March 31, Increase 2021 2020 (Decrease) Net Income (Loss) $ 655,163 $ (389,410 ) $ 1,044,573 Adjustments: Provision for income taxes (77,163 ) (103,000 ) 25,837 Depreciation and 97,290 89,676 7,614 amortizationEBITDA $ 675,290 $ (402,734 ) $ 1,078,024 Right of use amortization 76,209 72,843 3,366 Reserve for note receivable - 3,639 (3,639 ) Adjusted EBITDA $ 751,499 $ (326,252 ) $ 1,077,751

Forward-Looking Statements

The information in this discussion contains forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the safe harbor created by those sections. The words anticipates, believes, estimates, expects, intends, may, plans, projects, will, should, could, predicts, potential, continue, would and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are applicable only as of the date on which they are made, and we do not assume any obligation to update any forward-looking statements. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks that could affect our future results or operations. These factors, uncertainties and risks may cause our actual results to differ materially from any forward-looking statement set forth in the reports we file with or furnish to the Securities and Exchange Commission (the SEC). You should carefully consider these risk and uncertainties described and other information contained in the reports we file with or furnish to the SEC before making any investment decision with respect to our securities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.

Investor Relations Contact:

Matt Glover or Charlie Schumacher VTSI@gatewayir.com949-574-3860

VirTra, Inc.Condensed Balance Sheets

March 31, 2021 December 31, 2020 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 5,040,405 $ 6,841,984 Accounts receivable, net 2,650,045 1,378,270 Inventory, net 4,191,477 3,515,997 Unbilled revenue 6,259,020 5,408,598 Prepaid expenses and other current 704,226 382,445 assets Total current assets 18,845,173 17,527,294 Long-term assets: Property and equipment, net 1,286,676 1,381,744 Operating lease right-of-use asset, 1,018,318 1,094,527 net Intangible assets, net 317,031 271,048 Security deposits, long-term 19,712 86,500 Other assets, long-term 500,114 500,114 Deferred tax asset, net 1,892,000 1,892,000 Total long-term assets 5,033,851 5,225,933 Total assets $ 23,879,024 $ 22,753,227 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 976,969 $ 345,573 Accrued compensation and related 979,026 843,101 costs Accrued expenses and other current 783,020 772,884 liabilities Note payable, current 366,919 266,037 Operating lease liability, 328,049 321,727 short-term Deferred revenue, short-term 4,632,833 4,708,575 Total current liabilities 8,066,816 7,257,897 Long-term liabilities: Deferred revenue, long-term 1,771,288 1,920,346 Note payable, long-term 953,795 1,063,243 Operating lease liability, long-term 769,756 853,155 Total long-term liabilities 3,494,839 3,836,744 Total liabilities 11,561,655 11,094,641 Commitments and contingencies (See Note 11) Stockholders' equity: Preferred stock $0.0001 par value;2,500,000 authorized; no shares - - issuedor outstandingCommon stock $0.0001 par value; 50,000,000shares authorized; 7,777,530sharesissued and outstanding as of March 778 778 31, 2021 and 7,775,030 shares issuedandoutstanding as of December 31, 2020Class A common stock $0.0001 par value;2,500,000 shares authorized; no - - sharesissued or outstandingClass B common stock $0.0001 par value;7,500,000 shares authorized; no - - sharesissued or outstandingAdditional paid-in capital 13,897,280 13,893,660 Accumulated deficit (1,580,689 ) (2,235,852 ) Total stockholders' equity 12,317,369 11,658,586 Total liabilities and stockholders' $ 23,879,024 $ 22,753,227 equity

VirTra, Inc.Condensed Statements of Operations(Unaudited)

Three Months Ended March 31, 2021 March 31, 2020 Revenues: Net sales $ 4,441,909 $ 3,320,013 That's Eatertainment royalties/ - 16,740 licensing fees, former related party Other royalties/licensing fees - 1,410 Total revenue 4,441,909 3,338,163 Cost of sales 1,873,404 1,742,936 Gross profit 2,568,505 1,595,227 Operating expenses: General and administrative 1,710,233 1,777,376 Research and development 294,217 329,755 Net operating expense 2,004,450 2,107,131 Income from operations 564,055 (511,904 ) Other income (expense): Other income 16,379 19,495 Other expense (2,434 ) (1 ) Net other income 13,945 19,494 Income before provision for income 578,000 (492,410 ) taxes Provision for income taxes (77,163 ) (103,000 ) Net income (loss) $ 655,163 $ (389,410 ) Net income (loss) per common share: Basic $ 0.08 $ (0.05 ) Diluted $ 0.08 $ (0.05 ) Weighted average shares outstanding: Basic 7,775,212 7,745,363 Diluted 7,835,830 7,745,363



VirTra, Inc.Condensed Statements of Cash Flows(Unaudited)

Three Months Ended March 31, 2021 March 31, 2020 Cash flows from operating activities: Net Income (loss) $ 655,163 $ (389,410 ) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation and amortization 97,290 89,676 Right of use amortization 76,209 72,843 Reserve for note receivable - 3,639 Deferred taxes - (103,000 ) Changes in operating assets and liabilities: Accounts receivable, net (1,271,775 ) (1,063,062 ) That's Eatertainment note - (3,639 ) receivable, net, related party Interest receivable - 588 Inventory, net (675,480 ) (195,672 ) Unbilled revenue (850,422 ) 1,758,306 Prepaid expenses and other (321,781 ) (117,453 ) current assets Other assets - 17,677 Security deposits, long-term 66,788 - Accounts payable and other 777,457 142,705 accrued expenses Payments on operating lease (77,077 ) (71,139 ) liability Deferred revenue (224,800 ) 581,305 Net cash (used in) provided by (1,748,428 ) 723,364 operating activities Cash flows from investing activities: Redemption of certificates of - 1,195,000 deposit Purchase of intangible assets (48,205 ) (23,187 ) Purchase of property and equipment - (196,897 )Net cash (used in) provided by (48,205 ) 974,916 investing activities Cash flows from financing activities: Repurchase of stock options - (2,778 ) Stock options exercised 3,620 6,300 Note payable-PPP Loan (8,566 ) - Net cash (used in) provided by (4,946 ) 3,522 financing activities Net (decrease) increase in cash (1,801,579 ) 1,701,802 Cash, beginning of period 6,841,984 1,415,091 Cash, end of period $ 5,040,405 $ 3,116,893 Supplemental disclosure of cash flow information: Cash (refunded) paid: Taxes refunded $ (77,163 ) $ - Interest paid 2,434 -