Form 8-K VirTra, Inc For: Aug 16

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 16, 2022

 

VIRTRA, INC.

(Exact name of Registrant as Specified in Its Charter)

 

Nevada		001-38420		93-1207631
(State or Other Jurisdiction		(Commission		(IRS Employer
of Incorporation)		File Number)		Identification No.)

 

295 E. Corporate Place
Chandler, AZ		85225
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (480) 968-1488

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value		VTSI		NASDAQ Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On August 19, 2022, VirTra, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2022. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

 

The information under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; compensatory Arrangements of Certain Officers

 

Effective August 16, 2022, VirTra’s Chief Operating Officer, Vice President and Director, Matt Burlend, departed the Company. This change is 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 at the next annual meeting of shareholders.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release of the registrant dated August 19, 2022.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	VIRTRA, INC.
Date: August 19, 2022	By:	/s/ Robert D. Ferris
	Name:	Robert D. Ferris
	Title:	Co-Chief Executive Officer

 

  

 

Exhibit 99.1

 

 

VirTra Reports Second Quarter 2022 Financial Results

 

Total Revenue up 52%, Driving 51% Increase in Gross Profit and 34% Increase in Adjusted EBITDA

 

CHANDLER, Ariz. — August 19, 2022 — 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.

[email protected]

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

 

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