VirTra(VTSI) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2024 were $7,484,269, a decrease of 1$7,561,582 in Q3 2023, and for the nine months ended September 30, 2024, net sales were $21,653,707, down 22$27,925,420 in the same period of 2023[94]. - Gross profit for Q3 2024 was $5,497,973, an increase of 2$5,386,074 in Q3 2023, while gross profit for the nine months ended September 30, 2024, was $16,484,729, a decrease of 10$18,255,712 in the same period of 2023[96]. - Operating income for Q3 2024 was $755,632, a decrease of 55$1,669,611 in Q3 2023, and for the nine months ended September 30, 2024, operating income was $3,285,392, down 54$7,069,523 in the same period of 2023[98]. - Net income for Q3 2024 was $583,101, a decrease of 64$1,634,790 in Q3 2023, and for the nine months ended September 30, 2024, net income was $3,000,002, down 47$5,607,804 in the same period of 2023[101]. - Cost of sales for Q3 2024 was $1,986,296, a decrease of 9$2,175,508 in Q3 2023, and for the nine months ended September 30, 2024, cost of sales was $5,168,978, a decrease of 47$9,669,708 in the same period of 2023[95]. - Operating expenses for Q3 2024 were $4,742,341, an increase of 28$3,716,463 in Q3 2023, and for the nine months ended September 30, 2024, operating expenses were $13,199,337, an increase of 18$11,186,189 in the same period of 2023[97]. - Adjusted EBITDA for the three months ended September 30, 2024, was $1,082,826, down 62$2,867,159 in the prior year[104]. Profitability Metrics - The gross profit margin for Q3 2024 was 73%, compared to 71% in Q3 2023, and for the nine months ended September 30, 2024, the gross profit margin was 76%, compared to 65% in the same period of 2023[96]. - Net income for the three months ended September 30, 2024, was $583,101, a decrease of 64$1,634,790 for the same period in 2023[104]. Cash Flow and Capital Resources - Cash and cash equivalents as of September 30, 2024, were $19,668,455, an increase from$18,849,842 as of December 31, 2023[104]. - Net cash provided by operating activities for the nine months ended September 30, 2024, was $2,669,269, compared to$4,365,751 for the same period in 2023[105]. - Net cash used in investing activities was $1,692,249 for the nine months ended September 30, 2024, compared to$512,249 for the same period in 2023[106]. - The company had working capital of $35,984,477 as of September 30, 2024, up from$33,240,516 as of December 31, 2023[104]. - Management believes current capital resources will be adequate for more than 12 months, but is open to raising additional funds for expansion[109]. Business Strategy and Market Outlook - The company plans to expand its market share by developing and marketing effective simulators, adding staff to meet expected demand, and increasing its total addressable market through new marketing and product offerings[81][82]. - The company is open to partnerships and acquisitions to optimize long-term growth and shareholder value[84]. - The introduction of new products, such as the V-XR extended reality headset-based training solution, is part of the company's strategy to innovate and broaden its product offerings[94]. - The company plans to convert the majority of new capital bookings received in the first nine months of 2024 into revenue within the same year[108]. - The company received bookings totaling $8.9 million in the three months ending September 30, 2024, and$17.7 million for the nine months ended September 30, 2024[108]. - As of September 30, 2024, the company's backlog was $15.2 million, including$7 million in capital and $6.2 million in service and warranties[108].