CHANDLER, Ariz., Aug. 19, 2022 (GLOBE NEWSWIRE) -- VirTra, Inc. (NASDAQ: VTSI) ("VirTra"), a global provider of judgmental use of force training simulators and firearms training simulators for the law enforcement and military markets, reported results for the second quarter and six months ended June 30, 2022. The financial statements are available on VirTra's website and here.

Second Quarter 2022 Financial Highlights:

Total revenue increased 52% to $8.0 million
Gross profit increased 51% to $4.7 million, or 59% of total revenue
Net income increased to $787,000
Adjusted EBITDA increased to $1.3 million
Backlog at June 30, 2022 of $16.5 million
Working capital surplus totaled $27.0 million, including unrestricted cash and cash equivalents of $15.0 million

Six Month 2022 Financial Highlights:

Total revenue increased 52% to $14.8 million
Gross profit increased 48% to $8.4 million, or 57% of total revenue
Net income increased to $1.4 million
Adjusted EBITDA increased to $2.3 million

Second Quarter and Six Month 2022 Financial Highlights:

All figures in millions, except per share data

June 30,

2022

June 30,

2021

% Δ

June 30,

2022

June 30,

2021

% Δ

Total Revenue

$8.0

$5.3

52%

$14.8

$9.7

52%

Gross Profit

$4.7

$3.1

51%

$8.4

$5.7

48%

Gross Margin

59%

60%

-1%

57%

59%

-3%

Net Income

$0.8

$0.5

N/A

$1.4

$1.2

N/A

Diluted EPS

$0.07

$0.05

N/A

$0.13

$0.13

N/A

Adjusted EBITDA

$1.35

$1.00

N/A

$2.34

$1.75

N/A

Management Commentary

"We reported another strong quarter of growth in the second quarter of 2022 as we continue to deliver higher volumes of our world-class training solutions domestically and internationally," said Bob Ferris, chairman and co-CEO of VirTra. "Total revenue and adjusted EBITDA increased 52% and 34% year-over-year, respectively, while gross profit margin expanded from the first quarter 2022 to 59%,. Further, market demand was noticeably strong in the commercial market, which includes the military market, as we recorded $3.6 million in commercial revenue in Q2, eclipsing the $3.2 million of commercial revenue we recorded for all of 2021.

"Our deliveries are accelerating, allowing us to convert backlog into revenue and resulting in backlog decreasing from the first quarter 2022 to $16.5 million. Additionally, our core law enforcement market tends to be seasonally stronger in the second half of the year so we remain optimistic regarding our sales pipeline and commercial opportunities, which provide us with significant growth opportunities. Complemented with a strong balance sheet that includes a $27.0 million working capital surplus, VirTra remains well-positioned for continued success. Additionally, I would like to thank the entire VirTra team and our advisors for their dedication and hard work in getting our financial filing status back up-to-date."

Management Change

Effective August 16, 2022, VirTra Chief Operating Officer, Vice President, and Director, Matt Burlend, departed the Company. Mr. Burlend's departure was not the result of any disagreement with VirTra on any matters relating to its operations, policies, or practices. VirTra will not seek an immediate replacement for Mr. Burlend at the company-level but plans to fill the Board vacancy resulting from his departure. The Company thanks Mr. Burlend for his many years of service and all his contributions to VirTra.

Second Quarter 2022 Financial Results

Total revenue increased 52% to $8.0 million from $5.3 million in the second quarter of 2021. The increase in revenues resulted from an increase in the number of simulators and accessories completed, delivered and revenue recognized compared to the same period in 2021.

Gross profit increased 51% to $4.7 million from $3.1 million in the second quarter of 2021. The increase in gross profit was driven by an increase in the number of simulators and accessories completed, delivered and revenue recognized compared to the same period in 2021. Gross profit margin was 59%, a decrease compared to 60% in the second quarter of 2021.

Net operating expense was $3.7 million, compared to $2.3 million in the second quarter of 2021. The increase was primarily due to expenses related to the move into the new building and increased payroll costs.

Income from operations totaled $1.0 million compared to $823,000 in the second quarter of 2021.

Net income totaled $787,000, or $0.07 per diluted share (based on 10.9 million weighted average diluted shares outstanding), an improvement compared to a net income of $529,000, or $0.05 per diluted share (based on 10.7 million weighted average diluted shares outstanding), in the second quarter of 2021.

Adjusted EBITDA, a non-GAAP metric, totaled $1.3 million, an improvement from $1.0 million in the second quarter of 2021.

Backlog at the end of the second quarter totaled $16.5 million, compared to $17.0 million at the end of the second quarter of 2021.

Six Months Ended June 30, 2022 Financial Results

Total revenue increased 52% to $14.8 million from $9.7 million for the first six months of 2021. The increase in revenues resulted from an increase in the number of simulators and accessories completed, delivered and revenue recognized compared to the same period in 2021.

Gross profit increased 48% to $8.4 million from $5.7 million for the first six months of 2021. The increase in gross profit was driven by an increase in the number of simulators and accessories completed, delivered and revenue recognized compared to the same period in 2021. Gross profit margin was 57%, a decrease compared to 59% for the first six months of 2021.

Net operating expense was $6.7 million, compared to $4.3 million for the first six months of 2021. The increase was primarily due to expenses related to the move into the new building and increased payroll costs.

Operating income was $1.8 million, an improvement compared to an operating income of $1.4 million for the first six months of 2021.

Net income totaled $1.4 million, or $0.13 per diluted share (based on 10.9 million weighted average diluted shares outstanding), an improvement compared to a net income of $1.2 million, or $0.13 per diluted share (based on 9.2 million weighted average diluted shares outstanding), for the first six months of 2021.

Adjusted EBITDA, a non-GAAP metric, totaled $2.3 million, an improvement from $1.8 million for the first six months of 2021.

Conference Call

VirTra's management will hold a conference call today (August 19, 2022) at 10:00 a.m. Eastern Time (7:00 a.m. Pacific Time) to discuss these results. VirTra's chairman and co-CEO, Bob Ferris, co-CEO John Givens and chief accounting officer, Marsha Foxx, will host the call, followed by a question-and-answer period.

U.S. dial-in number: 1-877-407-9208

International number: 1-201-493-6784

Conference Code: 13732200

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 VirTra's 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 company's website.

A replay of the call will be available on the same day after 1:00 p.m. ET through September 2, 2022.

U.S. replay dial-in: 1-844-512-2921

International replay dial-in: 1-412-317-6671

Replay ID: 13732200

About VirTra

VirTra (NASDAQ:VTSI) is a global provider of judgmental use of force training simulators and 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.

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:


		For the Three Months Ended									For the Six Months Ended
		June 30,		June 30,		Increase			%		June 30,		June 30,		Increase		%
		2022		2021		(Decrease)			Change		2022		2021		(Decrease)		Change

Net Income		$	787,374	$	529,359	$	258,015		49	%	$	1,364,448	$	1,184,522	$	179,926	-15	%
	Adjustments:
	Provision for income taxes		246,684		293,180		(46,496	)	-16	%		370,684		216,017		154,667	72	%
	Depreciation and amortization		230,942		103,865		127,077		122	%		446,688		201,155		245,533	122	%
EBITDA		$	1,265,000	$	926,404	$	338,596		37	%	$	2,181,820	$	1,601,694	$	580,126	36	%
	Right of use amortization		80,805		77,090		3,715		5	%		160,658		153,299		-

Adjusted EBITDA		$	1,345,805	$	1,003,494	$	342,311		34	%	$	2,342,478	$	1,754,993	$	580,126	33	%

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 and Jeff Grampp, CFA

Gateway Group, Inc.

VTSI@gatewayir.com

949-574-3860

VirTra, Inc.

Condensed Balance Sheets

		June 30, 2022		December 31, 2021
		(Unaudited)
ASSETS

Current assets:
	Cash and cash equivalents	$	15,016,233	$	19,708,565
	Accounts receivable, net		6,388,087		3,896,739
	Inventory, net		8,831,786		5,014,924
	Unbilled revenue		4,820,051		3,946,446
	Prepaid expenses and other current assets		848,759		940,887

	Total current assets		35,904,916		33,507,561

Long-term assets:
	Property and equipment, net		14,185,424		12,864,766
	Operating lease right-of-use asset, net		623,648		784,306
	Intangible assets, net		579,963		535,079
	Security deposits, long-term		35,691		19,712
	Other assets, long-term		376,461		189,734
	Deferred tax asset, net		1,418,723		1,674,234

	Total long-term assets		17,219,910		16,067,831

Total assets		$	53,124,826	$	49,575,392

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
	Accounts payable	$	1,458,968	$	789,394
	Accrued compensation and related costs		1,229,404		1,062,078
	Accrued expenses and other current liabilities		1,270,086		991,744
	Note payable, current		233,673		236,291
	Operating lease liability, short-term		361,403		347,772
	Deferred revenue, short-term		4,373,173		4,135,565

	Total current liabilities		8,926,707		7,562,844

Long-term liabilities:
	Deferred revenue, long-term		2,679,248		1,992,625
	Note payable, long-term		8,165,838		8,280,395
	Operating lease liability, long-term		321,217		505,383
	Other long-term liabilities		5,436		5,436

	Total long-term liabilities		11,171,739		10,783,839

Total liabilities			20,098,446		18,346,683

Commitments and contingencies (See Note 9)

Stockholders' equity:
Preferred stock $0.0001 par value; 2,500,000 authorized; no shares issued
	or outstanding		-		-
Common stock $0.0001 par value; 50,000,000 shares authorized; 10,876,945 shares
	issued and outstanding as of June 30, 2022 and 10,807,130 shares issued
	and outstanding as of December 31, 2021		1,087		1,081
Class A common stock $0.0001 par value; 2,500,000 shares authorized; no shares
	issued or outstanding		-		-
Class B common stock $0.0001 par value; 7,500,000 shares authorized; no shares
	issued or outstanding		-		-
Additional paid-in capital			31,356,608		30,923,391
Retained earnings			1,668,685		304,237

Total stockholders' equity			33,026,380		31,228,709

Total liabilities and stockholders' equity		$	53,124,826	$	49,575,392

VirTra, Inc.

Condensed Statements of Operations

(Unaudited)

		Three Months Ended						Six Months Ended
		June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Revenues:
	Net sales	$	7,997,383		$	5,255,192		$	14,750,611		$	9,697,101
	Total revenue		7,997,383			5,255,192			14,750,611			9,697,101

	Cost of sales		3,253,651			2,120,492			6,319,789			3,993,896

	Gross profit		4,743,732			3,134,700			8,430,822			5,703,205

Operating expenses:
	General and administrative		3,085,051			2,002,612			5,381,443			3,712,845
	Research and development		617,058			311,320			1,296,453			605,537

	Net operating expense		3,702,109			2,313,932			6,677,896			4,318,382

	Income from operations		1,041,623			820,768			1,752,926			1,384,823

Other income (expense):
	Other income		57,056			34,379			111,379			50,758
	Other expense		(64,621	)		(32,608	)		(129,173	)		(35,042	)

	Net other income (expense)		(7,565	)		1,771			(17,794	)		15,716

	Income before provision for income taxes		1,034,058			822,539			1,735,132			1,400,539

	Provision for income taxes		246,684			293,180			370,684			216,017

Net income		$	787,374		$	529,359		$	1,364,448		$	1,184,522

Net income per common share:
	Basic	$	0.07		$	0.05		$	0.13		$	0.13
	Diluted	$	0.07		$	0.05		$	0.13		$	0.13

Weighted average shares outstanding:
	Basic		10,866,775			10,644,363			10,837,186			9,209,808
	Diluted		10,892,302			10,693,238			10,867,667			9,209,509

VirTra, Inc.

Condensed Statements of Cash Flows

(Unaudited)


			Six Months Ended June 30,
				2022			2021

Cash flows from operating activities:
	Net income		$	1,364,448		$	1,184,522
	Adjustments to reconcile net income to net cash (used in) provided by operating activities:
		Depreciation and amortization		446,688			201,156
		Right of use amortization		160,658			153,299
		Employee stock compensation		70,497			-
		Stock issued for service		350,001			-
	Changes in operating assets and liabilities:
		Accounts receivable, net		(2,491,348	)		(4,136,335	)
		Inventory, net		(3,816,862	)		(1,693,598	)
		Deferred taxes		255,511			294,113
		Unbilled revenue		(873,605	)		1,374,667
		Prepaid expenses and other current assets		92,128			(353,765	)
		Other assets		(186,727	)		21,148
		Security deposits, long-term		(15,979	)		66,788
		Accounts payable and other accrued expenses		1,115,242			933,840
		Payments on operating lease liability		(170,535	)		(157,713	)
		Deferred revenue		921,613			3,049,784

Net cash provided by (used in) operating activities				(2,778,270	)		937,906

Cash flows from investing activities:
	Purchase of intangible assets			(86,012	)		(92,886	)
	Purchase of property and equipment			(1,725,726	)		(602,009	)
Net cash used in investing activities				(1,811,738	)		(694,895	)

Cash flows from financing activities:
	Principal payments of debt			(115,049	)		-
	Stock issued for cash in offering, net			-			16,795,000
	Stock options exercised			12,725			6,070
Net cash provided by (used in) financing activities				(102,324	)		16,801,070

Net increase (decrease) in cash and restricted cash				(4,692,332	)		17,044,081
Cash and cash equivalents, beginning of period				19,708,565			6,841,984
Cash and cash equivalents, end of period			$	15,016,233		$	23,886,065