VirTra Inc
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
VTSI$2.67-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001493152-24-019234
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001493152-24-031281
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 36 previous paragraphs and 36 current paragraphs.
22 unchanged; 11 reworded; 3 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
***Gross Profit.***Gross profit was $5,524,616 for the three months ended June 30, 2024, compared to $5,920,701 for the same period in 2023, a decrease of $396,085, or 7%. Gross profit was $10,986,757 for the six months ended June 30, 2024, compared to $12,869,639 for the same period in 2023, a decrease of $1,882,882, or 15%. The gross profit margin for the three months ended June 30, 2024 and 2023 was 91% and 57%, respectively. The gross profit margin for the six months ended June 30, 2024 and 2023 was 78% and 63%, respectively. This is solely driven by the decrease in Cost of Sales as stated above.
Current report
Operating Income. Operating income was $1,131,421 for the three months ended June 30, 2024, compared to $1,928,603 for the same period in 2023, a decrease of $797,182 or 41%. Operating income was $2,529,760 for the six months ended June 30, 2024, compared to $5,399,908 for the same period in 2023, a decrease of $2,870,148 or 53%.
Current report
***Other Income.***Other income net of other expense was $156,870 for the three months ended June 30, 2024, compared to net other income of $75,521 for the same period in 2023, an increase of $81,349, or 108%, primarily from an increase in interest and rental income year over year. Other income net of other expense was $486,141 for the six months ended June 30, 2024, compared to net other income of $191,935 for the same period in 2023, an increase of $294,206, or 153%, primarily from interest income and a gain on the sale of the older machine shop equipment.
Removed paragraphs (3)
Previous report
***Gross Profit.***Gross profit was $5,462,141 for the three months ended March 31, 2024, compared to $6,948,938 for the same period in 2023, a decrease of $1,486,797, or 21%. The gross profit margin for the three months ended March 31, 2024, and 2023 was 67% and 69%, respectively. The gross margin was lower in 2024 mostly due to the cost of goods related to the Microsoft Prototype contract. We had a milestone payment in December of 2023 that had little cost associated with it. The costs from the second milestone were recorded this quarter and consumed some of the margin. Our efforts to lower the costs associated with the rest of the systems are evident with these results as only an overall 2% margin decrease was recognized.
Previous report
Operating Income. Operating income was $1,398,339 for the three months ended March 31, 2024, compared to $3,471,305 for the same period in 2023, a decrease of 2,072,966 or 60%. This decrease is directly related to the lower revenue and higher operating expense discussed above.
Previous report
***Other Income.***Other income net of other expense was $329,271 for the three months ended March 31, 2024, compared to net other income of $116,413 for the same period in 2023, an increase of $212,858, or 183%, primarily from the lease payments from the subtenant at our older facility which was not leased during the 2023 quarter.
Reworded paragraphs (11)
Previous wording
Results of operations for the three months ended March 31, 2024, and March 31, 2023
Current wording
Results of operations for the three and six months ended June 30, 2024, and June 30, 2023
Previous wording
***Revenues.***Net sales were $8,094,398 for the three months ended March 31, 2024, compared to $10,026,935 for the same period in 2023, a decrease of $1,932,537 or 19%. The decrease in revenue can be attributed to lower bookings in Q4 and Q1 as related to federal funding due to the continuing resolution and many contracts on hold.
Current wording
***Revenues.***Net sales were $6,075,040 for the three months ended June 30, 2024, compared to $10,336,903 for the same period in 2023, a decrease of $4,261,863 or 41%. Net sales were $14,169,438 for the six months ended June 30, 2024, compared to $20,363,838 for the same period in 2023, a decrease of $6,194,400 or 30%. The decrease in revenue can be attributed to the smaller amount of bookings in Q1 due to the temporary funding measures taken by the federal government that delayed many of our contracts.
Previous wording
***Cost of Sales.***Cost of sales were $2,632,257 for the three months ended March 31, 2024, compared to $3,077,997 for the same period in 2023, a decrease of $445,740 or 14%. The dollar decrease is correlates with the lower revenues for the current quarter.
Current wording
***Cost of Sales.***Cost of sales were $550,424 for the three months ended June 30, 2024, compared to $4,416,202 for the same period in 2023, a decrease of $3,865,778 or 88%. Cost of sales were $3,182,681 for the six months ended June 30, 2024, compared to $7,494,199 or a 58% decrease. The dollar decrease correlates with the lower revenues for the current quarter and a reclassification of COGS labor related to our development projects. This expense will be reflected in the income statement when we have the corresponding matching revenue. In addition, 40% of our revenue is derived from STEP and Service contracts that have limited COGS.
Previous wording
Operating Expenses. Net operating expense was $4,063,802 for the three months ended March 31, 2024, compared to $3,477,633 for the same period in 2023, an increase of $586,169, or 17%. This increase is primarily evident in three areas. One is payroll and benefits as labor rates increase and as we bring on higher level staff to help build infrastructure for the future. The second area is in our IT spending as we prepare the organization to help us become more compliant with new regulations, which is needed for any future government contracts. The third area is travel as we are increasing our footprint in our sales territories.
Current wording
Operating Expenses. Net operating expense was $4,393,195 for the three months ended June 30, 2024, compared to $3,992,098 for the same period in 2023, an increase of $401,097, or 10%. Net operating expense was $8,456,997 for the six months ended June 30, 2024, compared to $7,469,731 for the same period in 2023, an increase of $987,266, or 13%. This increase comes from payroll and benefits as labor rates increase and as we bring on higher level staff to help build infrastructure for the future. Also, IT expenses increased to help prepare the organization for regulatory compliance and travel expenses increased as we seek to expand our footprint in our sales territories.
Previous wording
***Provision (Benefit) for Income Tax.***Provision for income tax was $511,437 for the three months ended March 31, 2024, compared to $641,345 for the same period in 2023, a decrease of $129,908, or 20%. Provision for income tax is estimated quarterly applying both federal and state tax rates.
Current wording
***Provision (Benefit) for Income Tax.***Provision for income tax was $87,564 for the three months ended June 30, 2024, compared to $977,489 for the same period in 2023, a decrease of $889,925, or 91%. Provision for income tax was $599,000 for the six months ended June 30, 2024, compared to $1,618,834 for the same period in 2023, a decrease of $1,019,834, or 63%. The provision for income tax is estimated quarterly applying both federal and state tax rates.
Previous wording
***Net Income.***Net income was $1,216,173 for the three months ended March 31, 2024, compared to $2,946,373 for the same period in 2023, a decrease of $1,730,200 or 59%. The fluctuations in net income relate to each respective section discussed above.
Current wording
***Net Income.***Net income was $1,200,727 for the three months ended June 30, 2024, compared to $1,026,635 for the same period in 2023, an increase of $174,092 or 17%. Net income was $2,416,901 for the six months ended June 30, 2024, compared to $3,973,009 for the same period in 2023, a decrease of $1,556,108 or 39%. The fluctuations in net income relate to each respective section discussed above.
Previous wording
Liquidity is an enterprise’s ability to generate enough cash to meet its needs for cash requirements. The Company had $22,415,177 and $18,849,842 of cash and cash equivalents as of March 31, 2024, and December 31, 2023, respectively. Working capital was $33,180,190 and $33,240,516 as of March 31, 2024, and December 31, 2023, respectively.
Current wording
Liquidity is an enterprise’s ability to generate enough cash to meet its needs for cash requirements. The Company had $18,411,634 and $18,849,842 of cash and cash equivalents as of June 30, 2024, and December 31, 2023, respectively. Working capital was $34,803,126 and $33,240,516 as of June 30, 2024, and December 31, 2023, respectively.
Previous wording
Net cash provided by operating activities was $5,136,509 and $978,603 for the three months ended March 31, 2024, and 2023, respectively. Net cash provided by operating activities resulted primarily from the net income for both periods.
Current wording
Net cash provided by operating activities was $1,268,224 and $313,470 for the six months ended June 30, 2024, and 2023, respectively. Net cash provided by operating activities resulted primarily from the net income for both periods and the decrease in AR as we have improved collection efforts.
Previous wording
Net cash used in investing activities was $1,546,772 for the three months ended March 31, 2024, compared to net cash used in investing activities of $163,441 for the comparable 2023 period. Investing activities in 2024 and 2023 consisted of purchases of property and equipment.
Current wording
Net cash used in investing activities was $1,608,798 for the six months ended June 30, 2024, compared to net cash used in investing activities of $345,640 for the comparable 2023 period. Investing activities in 2024 and 2023 consisted of purchases of property and equipment, specifically the new equipment in the machine shop.
Previous wording
Net cash used in financing activities was $24,402 for the three months ended March 31, 2024, compared to $41,024 used for the three months ended March 31, 2023. In both periods, cash was used primarily for principal payment of debt offset by the proceeds from the exercise of stock options.
Current wording
Net cash used in financing activities was $97,634 for the six months ended June 30, 2024, compared to $108,453 used for the six months ended June 30, 2023. In both periods, cash was used primarily for principal payment of debt offset by the proceeds from the exercise of stock options.
Previous wording
***Bookings and Backlog.***The Company defines bookings as the total number of newly signed contracts and purchase orders received in a defined time period. The Company received bookings totaling $2.9 million for the three months ended March 31, 2024. The Company defines backlog as the accumulation of bookings that have not started or are uncompleted performance objectives and cannot be recognized as revenue until delivered in a future quarter. Backlog also includes extended warranty agreements and STEP agreements that are deferred revenue recognized on a straight-line basis over the life of each respective agreement. As of March 31, 2024, the Company’s backlog was $14 million. The breakout of this backlog includes $5.4 million in capital, $6.4 million in service and warranties, and $2.2 million in STEP contracts. Warranties/Service and STEP backlog calculated in this number is revenue that will be recognized on a straight-line basis over the next 7 years. In addition, there is $6.8 million in renewable STEP contracts over the next 5 years. Management estimates most of the new capital bookings received in the first three months of 2024, will be converted to revenue in 2024. Management estimates the conversion of backlog based on current contract delivery dates; however, contract terms and dates are subject to modification and are routinely changed at the request of the customer.
Current wording
***Bookings and Backlog.***The Company defines bookings as the total number of newly signed contracts and purchase orders received in a defined time period. The Company received bookings totaling $5.9 million for the six months ended June 30, 2024. The Company defines backlog as the accumulation of bookings that have not started or are uncompleted performance objectives and cannot be recognized as revenue until delivered in a future quarter. Backlog also includes extended warranty agreements and STEP agreements that are deferred revenue recognized on a straight-line basis over the life of each respective agreement. As of June 30, 2024, the Company’s backlog was $13.8 million. The breakout of this backlog includes $5.6 million in capital, $6 million in service and warranties, and $2.2 million in STEP contracts. Warranties/Service and STEP backlog calculated in this number is revenue that will be recognized on a straight-line basis over the next 7 years. In addition, there is $7 million in renewable STEP contracts over the next 5 years. Management estimates most of the new capital bookings received in the first six months of 2024, will be converted to revenue in 2024. Management estimates the conversion of backlog based on current contract delivery dates; however, contract terms and dates are subject to modification and are routinely changed at the request of the customer.