Virtra Reports Earnings for the First Quarter of 2015
Tempe, Arizona — VirTra Systems (OTC Pink: VTSI), a leading provider of use-of-force and firearms simulators to military, law enforcement agencies and other organizations, today announced its results for the first quarter ended March 31, 2015. The financial statements are available on VirTra’s website and here.
First Quarter 2015 Financial Summary:
* Net sales were $2.6 million for the quarter ending March 31, 2015, up 30% compared to $2.0 million in the first quarter of 2014.
* Gross margin for the quarter was 59% of net sales, compared to 62% in the prior year’s quarter. The decline was primarily due to higher personnel expenses recorded in cost of products sold and certain client driven customization projects that generate lower margins than what the Company typically experiences on products sold.
* SG&A expenses were $1.5 million, an increase from $1.0 million in the same period last year. The increase was primarily due to a 34% increase in our workforce in order to support Modern Round requirements while continuing to invest in our products for military and law enforcement markets. The Company also increased its participation in both U.S. and international industry trade shows.
* Net income was $0.2 million for both first quarter periods. Included in net income for the first quarter of 2015 is other income of $0.1 million, representing a gain due to the Company’s new equity position in Modern Round. As part of the agreement VirTra was provided a 5% ownership stake in Modern Round, LLC and the $0.1 million recorded gain values Modern Round at approximately the same valuation used in the initial investment made by Modern Round’s founders.
* Stockholders’ equity increased to $2.9 million, compared with $2.7 million at December 31, 2014. The Company had no outstanding debt as of March 31, 2015.
* Cash and cash equivalents were $1.3 million at March 31, 2015, down from $1.9 million at December 31, 2014.
Other Significant Events:
* Entered into a co-venture with Modern Round, LLC in which VirTra will design and provide the simulators for shooting lounges being developed by Modern Round. Modern Round is a private firm co-founded by Smith & Wesson Chairman Barry Monheit.
* Successfully defended two of the Company’s simulation patents, its US Patent No. 8,267,691 entitled THREAT FIRE SIMULATION AND TRAINING SYSTEM and US Patent No. 8,016,594 entitled METHOD OF TRAINING UTILIZING A THREAT FIRE SIMULATION SYSTEM. In the settlement, FAAC and VirTra agreed to an undisclosed settlement amount and FAAC agreed not to infringe the VirTra patents.
* In September 2014 the Department of Homeland Security selected VirTra for an approximate $6.0 million award. As of the end of the first quarter of 2015 approximately $0.8 million of revenue has been recognized under this contract. The Company expects to complete the remainder of the contract, but the exact timing is dependent on when the remaining customer locations are ready to receive the equipment.
Bob Ferris, Chairman and Chief Executive Officer of VirTra, commented: “We started the year off with continued operating momentum as we execute on our plans for increased market penetration. We are excited about supplying more customers with effective simulation solutions in the law enforcement, military and commercial marketplaces. One of our key strategic objectives is to leverage our proprietary technology and unmatched experience in simulation into additional markets to further monetize the investments we’ve already made. The Modern Round venture represents one of our first opportunities to pursue this strategic objective while we continue to invest in and grow our law enforcement and military markets.”
Mark Skidmore, Vice President and Chief Accounting Officer for VirTra, said: “We continue to invest in our future, ending the quarter with 51 employees, a 34% increase over the first quarter of 2014. As we move forward in 2015, we believe that we are on track to make 2015 a year of improved revenue and profits as compared with 2014.”
About VirTra Systems
VirTra is a global leading provider of the world’s most realistic and effective shooting simulators. VirTra is the higher standard in firearms training simulators, offering a variety of simulator platforms, powerful gas-powered recoil kits and the patented Threat-Fire™ simulated hostile return fire system. VirTra’s products provide the very best simulation training available for personnel that are entrusted with lethal force and critical missions. The Company’s common stock is not registered under the Securities Exchange Act of 1934 and the Company does not currently file periodic or other reports with the Securities and Exchange Commission.