Loading...
Docoh

VirTra (VTSI)

Participants
Brett Maas Managing Partner, Hayden Investor Relations
Bob Ferris Chairman and CEO
Judy Henry CFO
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Greetings and welcome to the VirTra Fourth Quarter and Year-End 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Brett Maas of Hayden IR.

Brett Maas

operator. you, Thank to full like to fourth VirTra's I XXXX welcome earnings and year call. quarter would everyone Hosting the call Executive today are Bob Ferris, Henry, Financial Officer; Chairman Chief Officer. Judy and Chief today's should a have By now, copy you of press received release. not, website www.virtra, at which company's at it's available V-I-R-T-R-A.com. If the website in is financial press The non-GAAP also herein. a includes used release of reconciliation measures

Friday, the replay addition, this March be on on the report you quarter fourth financial tab is webcast will In This days starting available reports section XX. be the website of being company's or will later the able website, company's about for access the and on on corporate afternoon. recorded XX for

to Before statements. a please take read regarding I call moment forward-looking turn over management, the the to company's notice

financial statements actual could about a obligation which subject the does statements webcast, as or and number and made. may not information law. The them of products company required company's and that differ this expectations any future, make or cause the management markets, otherwise risks to results from to services undertake to by discuss projections, materially are update forward-looking or about During uncertainties

will remarks I over prepared the the to webcasts, questions answer the management similar permits. to if Bob, time Following yours. now your turn previous is to floor like and call Bob.

Bob Ferris

corporate VirTra productive an stakeholders. success and of call. the XXXX continue Thanks, our so level governance of Brett. in $XX.X important department Good year morning for much invest prior XXXX to and exceeding revenue in from year. fourth delivered quarter Thank full the and position you for earnings was joining welcome full every for to enhancement year VirTra. we VirTra's and to for record We us. the year continued million, company Simultaneously,

features has added, simulator As have the acceptance enforcement law for increased. has and market training agencies by been new improved technology

maintain remains and that coverage. a continues through We new result, adoption growing VirTra to we the in continue space, position. this industry momentum, growing technological innovate customer media and As this to the leader believe gain to

As and I enforcement a VirTra uniquely our across address interest selected to at has effective high. all-time many believe by law and the respected for that current the globe facing largest VirTra provides an agencies continue been solutions products countries result, of challenges to is most worldwide.

realistic handle decision are situations force life better orderly ranging solutions complex Our active to law to highly shooters and enforcement and train death can use from judgmental [ph] of making.

be In as thereby to our device, training, carefully addition, that patented when situations. life they can during encounter enormous the stress Threat-Fire helping simulators better induce officers design we in of prepared our such use real occur stress

our minute in the bolster simulator and Our existing to people, significant solutions improvements. in investment to real XXXX was a goal world a ensure is every growing market. skill processes year yields in of targeted reputation Strategically, strong

the Over sales year, to quantity to organization last quality worked better our of and growing we demand. improve meet and the marketing

XXXX orders will of quarter are this, record levels, I'm year that significant us were growth. seeing to our giving at the be benefit the that announce first We already pleased confidence for a of as

company. up-listing for and tenacity encouraged and for concern as pouring a success, genuine this dedication milestone accomplishment improvement possible by hard team in uncompromising It's part it VirTra's of successful played to integrity, made are out also We was our customers, in thank make individuals the a on blessings NASDAQ. would to formed by XXXX This company no the believe no someday to years. no I simulation have and reality virtual products thousands who a in sincerely national exchange. customers over with the succeeding of money, a that

effective improve from we and the value use enterprise grow about the potential long of business benefits of all are joining equally technology the help the stemming through future. our excited to the While determined and NASDAQ, we save into lives are

Looking impacted third full shifting that back benefiting of quarter the year solid came our quarter-to-quarter. was sure, in to but results, and delayed timing orders in quarter future other some I'm from timing with can the than quarter rules was a periods. and be revenue fourth lower would early The moment customers, were in of To recognition for by by revenue result the revenue shipped were over pleased fluctuations orders. like. orders our XXXX, Several we fourth result orders

passing irregular been timing at intervals further the the continuing [ph] impacting federal spending. federal context, For government of has certain resolutions

delivered this that area XXXX result, we September fourth spending see impact during a expect the believe often do quarter. during XXXX. QX year-end be in We in enforcement in but government our spend to would did As we law didn't government increase the normal earnings,

We our the have levels quarter strong pipeline our in we believe order increase a to come. significant record-setting first sales and of that indicative seen XXXX is in a

mind our control in keep to contracts. substantially, large recognizing timing that, VirTra's quarter out delays of please the However, on each can due sometimes revenue of reported fluctuate

And financial like management so results I'd sales marketing a now our longer efforts. frame. viewing time encourages company's across and highly discuss the to

year in-territory the modified with new the We effectiveness position sales we are staff having the in to Working driven announced based U.S. departments of and personal sales marketing police make last changes the success around an new our testing to marketing has important force began hand-in-hand department, Our effort sales on visits we moving organization. our strategy. sales

have existing and increased We the outside enhancing also number customers. our with sales inside connection representatives, of

a experienced to of VirTra and this the that goals effort our team cycle, we last prepare that. must grow to due to of marketing we One Director and just is four-person is of increase sales our for have not marketing of the the Part expect Today, an offerings product year, to to competitors did Marketing. do fact several in a accelerate business, of their we team. as have we increasing future. Prior June

industry and over realistic more attention training the and it for on the by past not multi-screen media years is simulators. challenges vital VirTra's about simulators, due embracing accomplishments. the is effective so to faced And VirTra rest particularly to law enforcement, Largely work

VirTra VirTra invest we has has then competitive simulator in multi-screen a work Fortunately, XXX technological to XXXX approximately heavily based began as which years and product refinement. this ever investing innovation created since continued durable of advantage, technology pioneered scenarios in and on and

with which training website market spend educate and older to those this who advertising simulators that national training is expanded relations, resulted coverage. who Our media currently in potential not use like must VirTra portion advantage and team or newly the enhancements, those the use attendance, in of out during clearly still digital customers. trade public methods. largest to tasked less point effective may marketing the demonstrating marketing quarter I fourth our would increased to show related came

We addresses AXON a safety, continue we The well. to and continue durability, training TASERs requirement. of and cartridges invest enhances for training the recurring and technology In full accurate and as less-lethal launched that VirTra improve, accessories to in TASERs. sensing law patent training the XXXP cartridges XX other regularly the series around and pending, are the utilize is and electronic these innovation December, state-of-the-art new of less-lethal world devices maintenance often by policy but technologies training. enforcement utilized a

superior highly fraction training of purchase much a provides a easier realistic that cost. at potential option think VirTra to We the solution decision makes training for products the clients. and simulator-based reduced cost Our

become In additional for of any allow that be known has to we models achieve. utilized our engineering feat of kits in simulators. firearms difficult to durable, within powerful very are recoil addition, continue to VirTra the develop training kits remarkably creating firearm well designed new to industry an

the are industry revenues and are for also full $XX.X the and was testing up brightest best up over million technical that and pass products nearly X% -- a margin was nearly subject X% developments product up quality regimen. new the year. announced stringent XX%. the Financially, Our when for Gross the year, profit matter hard be for in gross year were our of work the last on staff at expert will to

full the with positive the up-listing balance and We Excluding throughout sheet investments over two flow generated as SEC and strong was with the charges, as to from are cash non-cash company no down we and business, making new a of drive to costs with for and NASDAQ. year year the essentially full net associated to just $X.X income $X.X for the due non-recurring debt. well million XXXX primarily support registering free million, maintained

sales simulator expanded use-of-force for VirTra's our for service largest business client. enforcement that just existing year the in of totaling this at foot one throughout The States installation more virtual multiple facilities solid with United contracts the the addition, entry Department ports Border be the this accessories, country simulators Protection, leading renewal airports, of were totaling located multiple Homeland a New of V-XXX law include their million with both the Security, and training customers judgmental of $XXX,XXX. sale world. new and contract internationally. industry over $X will and million Customs across international the than over V-XXX domestically for training the with signed print, wins contracts With including one agencies and systems of United contracts the XX major States and $X.X we and Notably,

and Louis Use installed the its local of de-escalation on Jersey situations also situations V-XXX as simulator part Missouri's, Monmouth making threatening STARS, to force a to was split Jersey. system response known the interactive police for in law training the advantage situational, domestic life can across and training an and training Our better Similarly of of country force situations. County's County as multi-screen training. integral County St. New [ph] judgmental installed in instances use responders enforcement response the and potentially second decision enforcement scenarios. train and in state-of-the-art for quality hostage simulator judgmental new The for simulator department facility from take to purchased de-escalation active New V-XXX shooter use-of-force ranging VirTra hostage on need focus of violence critical training. Personnel of throughout purchased to law resulted first use high was in prepare by better force

Our solution on recently V-XXX a XXXX. training segment ABC's featured was in

O'Fallon, from high the approximately happens train situation installed so During we Middle were we the East never session end in in officers the Missouri live solution a XXXX the Department shooting the located simulated was at valued footage contract we we of where Police Internationally, highlighted, of all a action a a local customer a at the broadcast training in hope school, including awarded $XXX,XXX. life. could real for

the country. Australia; South Asia-Pacific installed multiple Australian contracts systems our We and particular now agencies supplied, Eastern in enforcement region, the total, at Wales customer. in Installation Police with three have law Australia than Border Middle Police more worth Department XX signed Department. and locations this South currently we in maintaining totals simulator Force, $XXX,XXX New particular are for this since of In V-XXX systems

Australia. in these our With And the has now training orders with by for an from to a company the at of enforcement far law VirTra of for XXXX, delivery new million into receipt order is international choice Africa. valued expansion $X.XX simulation customer continued

Pakistan we of a million established successful and for the the On announcement location. have an for track recent international is contract a have foothold most Our delivery footprint a given expanding proven in VirTra top $X.X major on once record of over we this, to front. a win years, our initial of

installations are these train working of We countries. now these agencies success additional in to the leverage help

transition corporate independents further common the applicable During governance our another increased five Commission OTCQX Board NASDAQ of stock shareholders, the size to other we from Directors. to from the election of requirements of rules, accordance the NASDAQ. addition our time to Richardson among the meeting clearing shareholders directors market hurdle of to of confirmed at listing held rules corporate our our governance. XXXX, and four quarter, our listing in of with of Mr. Simultaneously, members the the board Jim things five Securities third Jim of the Exchange The which of and three the our strengthen for the annual approved our board

Commission. As to we our of registered NASDAQ, with to the have Exchange the reverse the completed two the of of the and shares one part stock NASDAQ, our with common Securities our a process to split transaction up-list common for we Simultaneous stock.

So and not we obligations a reporting going raise we all are will to our in offering. are XX-K for XXXX the be subject a Form forward beginning A with reporting money company. plus now we public reporting to able public a regulation of Since company,

closed. is offering officially this so And now

turn and strong permitted sheet having to I us to over funds flexibility to so. move CFO Judy? now review full the NASDAQ without our Henry, Our years would raise profits to do to to like call to the the and quarterly of balance results. Judy

Judy Henry

corresponding XX% inventory. increases Net million these staff, sales current levels, in to year. XXXX of Gross XX.X% Thank $X.X fourth Revenues million contract revenues, in payroll the during $X.X in XXXX and orders was infrastructure quarter that are lower in corresponding marketing quarter. of recognized XXXX, was research period for operating from fourth compared $X.X primarily last $X.X and $X of benefits for operating profit annual million revenues expense operations and the you, new to of of The were fourth to Bob compared to increases upgrades. quarter as XXXX expanding in loss increase of certain non-recurring in $X.X to staffing the the corresponding quarter value to margin The XX.X% period for the fourth expansion, down million fourth year-over-year compared due quarter adjustments was in last nature. was non-recurring mentioned, revenues of million due the $XXX,XXX decrease the due resulted costs, was in the $XXX,XXX public year. Bob. for XXXX. last under the year. expenses expenses for quarter for certain timing The $XXX,XXX was and the of or to carrying decrease of for period of gross the million company development in or of non-recurring, Approximately non-cash profit in compared The related IT fourth

As Bob items two non-cash in mentioned, we non-recurring and the recognized quarter. fourth have

by record a miscellaneous of allowance, our a the an income profits, our tax to recorded offset changes deferred federal of established benefit VirTra due effect of tax First, to and long in annual valuation $X.X applied track taxes. million, partially previously income the of reflecting asset tax reversal rate income state

performance investee the regularly company's position. on In addition, management financial evaluates its recoverability based of and investment

items, the weighted of increased last fourth recognized our million share per outstanding XXXX basic same was $XX.X diluted $X.XX of Modern X,XXX,XXX During the to per the XXXX this other average full for as diluted shares million year for in tax year an Round. full from $XXX,XXX X.X% compared two of income per for from income the diluted increase $X.X VirTra million in in XXXX. the in a fourth the share million quarter XX.X% quarter XXXX the net $X.X loss year-over-year and net of XXXX. of per quarter, $X.XX $X.XX Gross The increased to for fourth fourth of shares the impairment compared of The in to for also XXXX. million, share, X,XXX,XXX million, $XXX,XXX, these diluted $X.XX the approximately XXXX. was Inclusive and year the or negative average or profit the net simulators, our charge, $XXX,XXX was year full was per year. or of of full position due the XXXX compared of to year $XX.X quarter benefit in million $X.X loss XXXX. of $X.XX sales share, up The to a $XX.X impairment additional shares to accessories, results, services. XXXX to per $X.X were loss XX.X% investment revenues basic outstanding million warranties for weighted and quarter fourth and of Inclusive or to diluted or Shifting revenues basic diluted $X.XX and revenues, related basic essentially and

had million of approximately balance and December equivalents, Turning XXXX, XXXX. to to sheet, $X.X the XX, cash compared December cash the as XX, at in company million $X.X

likely not taxable in The it We the as XXXX. income concluded operating to of periods XXXX. has tax approximately essentially Bob. its over will as call than taxable generate no $X.X years applicable has the to realize sufficient company The company is the asset various more income that December offset million available expires now that all net of XX, carry-forward loss within December deferred now to company tax that XXXX, turn I'll asset. of of future XX, have back deferred debt outstanding throughout

Bob Ferris

Judy. you, Thank

I've VirTra's long-term look excited to more future, been the I never about As potential.

a NASDAQ use ahead Our With the much in of staff, I'll now that, with our chapter through a are is saving to to beginning lives the succeed call improving over the certainly technology. but addition turn it's just of for and if new recent in us, operator effective questions. we of work electrifying

Operator

will question-and-answer Thank you. private a At question. session. first proceed this from time conducting [Operator is question [ph], Poitner be we Instructions] Our your investor. Please Jim with

Unidentified Analyst

there. Hi, of Bob other VirTra and that are members

there's due finishing the is And sounds is all, part even to the better. indication passed more year. congratulations of great budgets for get or like delay either to meaning of were orders of you. part size XXXX the for aren't First believe it other -- government's and Bob on or Thank the delivery reasons [ph] in product is to a to reason the government? of inability localized, federal the federal that the going every delivering these be finishing

Bob Ferris

many, Jim. Thanks, I the hear listening Thanks been call. know a for from you've many to years. shareholder Great for you. to

you think company. I XXXX a of doing sent me with picture involvement this your

that back ways. a So, goes quite

as far quarter revenue a early early. fourth and recognition, is revenue getting bid delivered issue the some mainly recognition related being As orders the to accepted

order continuing exactly a those accommodating would quarter received haven't seen have before. of course, other in quarter then budget flow. related that third orders that quarter impact we're was resolution created into the we the resolutions -- exactly XXXX. fourth The some not So ended continuing gone of fourth sure of It customers, potentially, getting fourth up to because and mention some were somewhat in the does due orders situation quarter new to delayed some normally

overall excited we very are though do have about we mentioned year, I a like fluctuations. XXXX even again strong but quarterly So being

Unidentified Analyst

Bob. you, Thank Okay.

Bob Ferris

Thanks, Jim.

Operator

proceed with is next Landes Please question [ph], private question. Our your Charles Instructions] investor. from [Operator

Unidentified Analyst

been to It's while been making and coming, it's NASDAQ. Bob worth wait. the it congratulations Hello, but a for

Bob Ferris

well. Thank for listening. you. involved the so company know for much. calling Thank you you've as in years and And I Thanks

Unidentified Analyst

employees VirTra how currently at are many Bob, full-time?

Bob Ferris

Currently we have XX employees.

Unidentified Analyst

into could or anticipated? a XX go completely little thing employees. and just a that past written less of more off Round And detail is Is the you functioning status. than Modern regarding the it

Bob Ferris

Yeah. Great question.

think of important we new Modern Round. is standalone I aspects to sub-licensing is they one a One is first as in with Round there in Round far Modern locations, that both current Modern market consider the process So, and Round reports into is as is, at four with expanding Modern currently put locations. regarding XXXX. generated for GAAP the which location, really fair write-down Peoria positive results they with accounting The ever -- their operating accordance valuation. up know, rules

year. So the write-down was some was I that sheet, sure make just balance to there to accurate that, reason then is form data mean, really this to fair occurring the of on that value help last used a is valuation end there of as our the now market was reassess

them no So segment. new are doesn't focusing Round the with control while their royalty well our maintain -- is obviously, operates exclusivity. licensing that minimum their of requirements unique staff, expect with Round fees Modern and guarantees Modern VirTra Modern But to could new Modern on course, locations with in Round that. own in the their with locations there Round opening the of future. escalating the on Well, opening contract We and that business by paid do grow market

Unidentified Analyst

fulfill will expect they international the aspect? Do you that

Bob Ferris

right now. I know. on visibility have not no that do I

Unidentified Analyst

they type And recently are regarding weapons training the right. customer, primarily with? released what finally, All Mideast the news

Bob Ferris

do have not me. of in that I front information

So to guess. hazard I a would not want

Unidentified Analyst

if a into occurrence? All recent there the is release in was right. if just of figured that My or the customer recoil that random those kits, interest

Bob Ferris

model attention lot No, what recoil and we we kits deciding a of firearm definitely that develop exact on for. focus make

make meetings that daily regular almost development in to And then have have meetings we alignment. all to we're discuss road maps. our We sure

released every our recoil for reasons. company, strategic very So, from kits that it's is

many a development the that sprint So a client for kit, yes, need sort of top times to reasons. of queue the it -- of kits is there very in much there recoil is is obvious if that

Unidentified Analyst

for get And several to current additional going outlook going space? be adequate to the years for Is or you need to what's the Okay. facility? that

Bob Ferris

two current facilities. is Our different facility actually

building have then work do square location facility from about other where of this our machining has CNC So mainly. secondary current and feet about minute we XX,XXX we a XX drive

are one So, currently those also two running shift. we are only adequate, facilities

So essentially that facility XX and at we increased. can to a are current always XX running about hours just be day our

foresee process we along always building accommodate near larger shift obviously to and now working we at of much So today, into And of leased looking but the currently a we as move do are can as not anticipated a of how we facility growth need we right anticipating revenue, a even our we those some the lines, we're on in optimize not of things in future. with feel major space, our here. are

Unidentified Analyst

All good major you you. rest much, NASDAQ, of lot hopefully a as and interest of that there milestone staff Thank lot again in Thank getting to right. very shareholders. doors, of on I and of the you job a the And Bob. product and see unlocking a

Bob Ferris

you for to much. Thank so thank And I VirTra. it. appreciate your continued you loyalty

Operator

question is your Please [ph], Klugger Mark with next investor. Our private question. proceed with

Unidentified Analyst

Klugger today? Hello, [indiscernible] are is at Bob. I and with How met you This years scout Florida Orlando unit. ago boys several you area. my from Mark

Bob Ferris

you? I'm How well. are

Unidentified Analyst

guess XXXX fairly have you been investor, doing the question always I much. I you and I guess I Thank had but since a congratulating am am of and you on outside an investor, awesome. a NASDAQ. so for I young I so, team

we've some order, know works curious together all it to finish for know since With just [indiscernible] a shipment. to whole seen it was the it's multi-unit days, think put V-XXX, it how sale I from that stock that having would was sort get the does so take start approximately how followed price to be a unit seems long news of to ready package and wonderful the it out? these regards our I I stock.

Bob Ferris

years. opportunity a Scouts. you to amount and a to remember the year and production them Well, first memories do my our having V-XXX most ability I in at And it would all, dependent But boy it -- Eagle was a our simulators products of training have show that -- your resulted get really it interest to fully what over That's huge simulator over took on required scouts at It's one When the create show, order. best much it's and takes and the and time have test incredible been the amount thanks in do at trade and of to time. the little you ago that an I the VirTra of highly on decrease of to but are here continued time I in themselves really time comes a for upon advanced us we we properly to team VirTra. build V-XXX a is tested. how enormous amount testing of in streamline items

the we portion actually from V-XXX able a can as as the all hours in the had So, software process to how days. But of have equipment in measured process shelf say computers. are go takes we equipment and to -- and number time the I've speaking, actual produce to can it to unit, for itself been the matter V-XXX we it a a have go -- a on on actually testing done but simulator to I our ready on them, shipping are the there have or all -- heard on able in shelf, but of when of the we improving be as unit. the lot based shelf more times order the a But on we when just setup for the far generally like create

Unidentified Analyst

you've okay. Well, listen, Well, Eagle really all appreciate have I Scouts done. that I now. two

So I just [indiscernible]. passed the

Bob Ferris

Congratulation.

Unidentified Analyst

and you. Thank much. you work that applaud for hard years so so Scout you for ago. for for opportunities excited the and you Thank much balance this everybody XX your Eagle product Thank with I just company. so

Bob Ferris

Thank you.

Operator

Our your question with with proceed Please is [Operator Jacob, Instructions] private question. Jim investor. next

Unidentified Analyst

Hello, Bob.

Bob Ferris

Jim. Hi,

Unidentified Analyst

should should Actually company have only VirTra comment a I for a don't I an call. and on of And can that than basis. example the excellent better if to at you've the much knowing the which books already in the XX% positive that comments year better QX, focus to really is a on the XX not a on also think to I nice made and it really you're comments what into annual than manage is know you've question, be already of comparisons because is Yeah. but compared everybody is day the quarter. revenues quarter, is tough who that all XXXX, much have an quarters and look quarter do as be it's We making be XXXX everybody annual fall And XXXX that's that was that in lumpy some period should us. that you and XXXX, that to explained

that's my comment. So

Bob Ferris

Well, thank agree much I much. with so very for Thanks And much. you calling very analysis. your

Unidentified Analyst

Thanks.

Operator

from question. Our Boya Biff Adam Please with next question proceed is [ph]. with your

Unidentified Analyst

Hi, Bob, Biff.

Bob Ferris

Hello. How are you?

Unidentified Analyst

I'm you? doing good. How are

Bob Ferris

Doing really well.

Unidentified Analyst

Okay.

is, I out question a and and clean are blue So The regulation different now I love now And governmental likes with you I've we got got we've what of looks issues a are omnibus QX. long for paused that issues not skies. or some DoJ done. stock help how question the you've and love signed -- about NASDAQ could one have I have we this order got talked this we been time. government Trump we are up some in many government orders bill, free thing the assume orders? help is to other that Recently million some for could but for could -- $XX have from order orders issue a with I've -- funds that

Bob Ferris

the based process. budgeting help some is there the absolutely. could potential certainly that Yes, on orders that, of Yes, federal the

Unidentified Analyst

Okay.

-- spend prior of the hoped, being somewhat. to a government to imagine QX of QX then issue which mentioned correct, I already know so earnings or that, And QX not lot that would in the allow QX being came I but we from had right? you less what would separate than able That's the to

Bob Ferris

Yeah.

related, are yes. think, I they

Unidentified Analyst

had looking XXXX. I all forward really and That's Okay. to

a to good Sounds year. be it's going like

Bob Ferris

Well, right. been I you. thanks All all Thank loyal much appreciate the company. and the so years you've to

Unidentified Analyst

You bet, thanks.

Operator

Ferris for gentlemen, like and answer and turn closing end the the back Bob remarks. of to session. And we have the call Ladies to reached I'd question over

Bob Ferris

thank around Thank call countries highest end at in share God you. who people to should train you the to called all with who XX level sincere recognize joining today customers, fighters instrumental who in many officers, allowing like very to been world. I'd and in of in I'd VirTra's the and sense those a of accomplishment today's bless. the products Goodbye. the have NASDAQ. civilians and shareholders, employees, Thank each vendors to like in you war our which

Operator

This teleconference. concludes today's

for lines your disconnect at you participation. time. Thank this your You may