VirTra(US:VTSI)2024-05-14 20:06Financial Performance - Net sales for the three months ended March 31, 2024, were $8,094,398, a decrease of $1,932,537 or 19% compared to $10,026,935 for the same period in 2023, attributed to lower bookings due to federal funding issues [79]. - Cost of sales decreased by $445,740 or 14% to $2,632,257 for the three months ended March 31, 2024, correlating with the lower revenues [80]. - Gross profit was $5,462,141 for the three months ended March 31, 2024, down $1,486,797 or 21% from $6,948,938 in 2023, with a gross margin of 67% compared to 69% in 2023 [81]. - Operating income fell to $1,398,339 for the three months ended March 31, 2024, a decrease of $2,072,966 or 60% from $3,471,305 in 2023, primarily due to lower revenue and higher operating expenses [84]. - Net income for the three months ended March 31, 2024, was $1,216,173, down $1,730,200 or 59% from $2,946,373 in 2023 [87]. - Adjusted EBITDA decreased by $2,071,093 or 52% to $1,914,152 for the three months ended March 31, 2024, compared to $3,985,245 in 2023 [87]. Cash Flow and Financial Position - Cash and cash equivalents increased to $22,415,177 as of March 31, 2024, from $18,849,842 as of December 31, 2023 [88]. - Net cash provided by operating activities was $5,136,509 for the three months ended March 31, 2024, compared to $978,603 for the same period in 2023 [89]. - Net cash used in financing activities was $24,402 for the three months ended March 31, 2024, compared to $41,024 for the same period in 2023, indicating a decrease of approximately 40% [90]. - The Company believes its current capital resources will be adequate to continue operations for more than 12 months, but is open to raising additional funds from capital markets to expand product offerings and enhance marketing efforts [93]. Product Development and Market Strategy - The company plans to broaden its product offerings and increase its total addressable market through new marketing and product development strategies [78]. - The V-300™ simulator, featuring a 300-degree immersive training environment, is highlighted as a key product for enhancing decision-making and tactical training [78]. - The Company received bookings totaling $2.9 million for the three months ended March 31, 2024, with a backlog of $14 million as of the same date, which includes $5.4 million in capital, $6.4 million in service and warranties, and $2.2 million in STEP contracts [91]. - Management estimates that most of the new capital bookings received in the first three months of 2024 will be converted to revenue within the same year [91]. Accounting and Financial Reporting - There have been no changes in critical accounting policies during the three months ended March 31, 2024, and significant estimates include share-based payments and warranty reserves [94]. - As of March 31, 2024, the Company did not have any off-balance sheet arrangements that could materially affect its financial condition or results of operations [96].