VirTra Releases 2014 Second Quarter Financial Results

TEMPE, AZ--(Marketwired - Aug 15, 2014) - VirTra Systems (PINKSHEETS: VTSI), a leading provider of firearms simulators to military, law enforcement agencies and other organizations, today announced the release of its 2014 second quarter financial statements. The financial statements are available on VirTra's website and here.

Financial Summary:

• Net Sales were $2.1 million for the quarter ending June 30, 2014, an increase of $0.5 million, or 34%, compared to the previous year's second quarter sales of $1.6 million.
  
  
• Gross margin for the second quarter 2014 was 54% of Net Sales, compared to 68% last year. The drivers for the decrease are primarily due to client paid customization projects recorded in Cost of Products Sold.
  
  
• Sales, general and administrative (SG&A) expenses of $1.1 million in Q2 2014 decreased 11%, from $1.2 million in Q2 2013. As a percent of revenue, SG&A was 50% for Q2 2014 compared to 76% in Q2 2013. The decrease is mainly due to a portion of SG&A resources assigned to client paid customization projects.
  
  
• Income from operations increased $0.2 million in Q2 2014 to $0.1 million, compared to a loss of $0.1 million in Q2 2013.
  
  
• Through June 30, 2014, the Company used $1.4 million in cash from operating activities to fulfill orders secured by deposits. Cash and cash equivalents were $0.9 million at the end of Q2 2014, down from $2.4 million at December 31, 2013.
  
  
• The Company has no outstanding balance due on its line of credit as of June 30, 2014.
  
  

Bob Ferris, Chief Executive Officer of VirTra, commented, "Recent large international projects involved substantial investment in new technology and a major commitment of man hours, which will continue throughout the balance of 2014. The projects have pushed VirTra's products to new levels of capability. VirTra is expanding its scope and pursuing numerous national and international sales."

About VirTra Systems

VirTra is a global leading provider of the world's most realistic and effective shooting simulators. VirTra is the higher standard in firearms training simulators, offering a variety of simulator platforms, powerful gas-powered recoil kits and the patented Threat-Fire™ simulated hostile return fire system. VirTra's products provide the very best simulation training available for personnel that are entrusted with lethal force and critical missions. The Company's common stock is not registered under the Securities Exchange Act of 1934 and the Company does not currently file periodic or other reports with the Securities and Exchange Commission.

www.VirTra.com

Forward-looking Statements

This news release includes certain information that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "proposed," "planned," "potential" and similar expressions, or are those, which, by their nature, refer to future events. All statements, other than statements of historical fact, included herein, including statements about VirTra's beliefs and expectations, are forward-looking statements. Forward-looking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Although VirTra believes that such statements are reasonable, it can give no assurance that such forward-looking information will prove to be accurate. VirTra cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors. Accordingly, due to the risks, uncertainties and assumptions inherent in forward-looking information, readers and prospective investors in the Company's securities should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof, is based upon the opinions and estimates of management and information available to management as at the date hereof and is subject to change. The Company assumes no obligation to revise or update forward-looking information to reflect new circumstances, whether as a result of new information, future events or otherwise, except as required by law.

- - - -FINANCIALS FOLLOWING- - - -

VIRTRA SYSTEMS, INC. BALANCE SHEETS as of:

			June 30, 2014				December 31, 2013
			(unaudited)				(audited)
Assets
Current assets:
	Cash and cash equivalents		$	931,766			$	2,358,955
	Accounts receivable			1,106,694				786,877
	Inventory			629,064				407,434
	Prepaid expenses and other current assets			57,753				44,902
	Total current assets			2,725,277				3,598,168
Property and equipment, net				407,692				460,513
Total assets			$	3,132,969			$	4,058,681
Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable		$	193,597			$	289,820
	Accrued compensation and related costs			458,705				588,097
	Accrued expenses and other current liabilities			130,837				153,875
	Deferred revenue			491,848				1,516,792
	Total current liabilities			1,274,987				2,548,584
Long-term liabilities:
	Accrued rent liability - long-term			120,183				144,990
Total liabilities				1,395,170				2,693,574
Commitments and contingencies
Stockholders' equity:
	Preferred stock $0.005 par value; 2,000,000 shares authorized; no shares issued or outstanding as of December 31, 2013 and 2012			-				-
	Common stock $0.005 par value; 500,000,000 shares authorized; 158,328,245 shares issued and 158,285,045 shares outstanding as of December 31, 2013 and 2012, respectively			791,641				791,641
	Additional paid-in capital			13,190,396				13,144,044
	Treasury stock at cost, 43,200 common shares as of December 31, 2013 and 2012, respectively			(2,981	)			(2,981	)
	Accumulated deficit			(12,241,257	)			(12,567,597	)
	Total stockholders' equity			1,737,799				1,365,107
Total liabilities and stockholders' equity			$	3,132,969			$	4,058,681

VIRTRA SYSTEMS, INC. STATEMENTS OF OPERATIONS for the period:

			Three months ended June 30,							Six months ended June 30,
			2014			2013				2014			2013
Net revenues			$	2,107,014		$	1,570,243			$	4,068,664		$	4,059,911
Cost of products sold				966,087			508,011				1,717,279			1,260,438
Gross margin				1,140,927			1,062,232				2,351,385			2,799,473
General and administrative expenses				1,055,591			1,191,893				2,028,472			2,395,772
Income from operations				85,336			(129,661	)			322,913			403,701
Other income/(expense):
	Other income			2,620			1				3,427			29
	Other expense			-			(2,608	)			-			(5,990	)
Net other income/(expense)				2,620			(2,607	)			3,427			(5,961	)
Income before income taxes				87,956			(132,268	)			326,340			397,740
Income tax expense/(benefit)				-			-				-			-
Net income			$	87,956		$	(132,268	)		$	326,340		$	397,740
Weighted average of common and common equivalent shares outstanding:
	-Basic			158,285,045			158,285,045				158,285,045			158,285,045
Net income per common and common equivalent share:
	-Basic		$	0.00		$	(0.00	)		$	0.00		$	0.00

VIRTRA SYSTEMS, INC. STATEMENTS OF STOCKHOLDERS' (DEFICIT)/EQUITY for the period:

		Common stock
							Additional			Treasury				Accumulated
		Shares		Amount			paid-in capital			Stock				Deficit				Total
Balance at January 1, 2013		158,285,045		$	791,641		$	13,032,498		$	(2,981	)		$	(14,148,373	)		$	(327,215	)
Net income		-			-			-			-				1,580,776				1,580,776
Stock-based compensation		-			-			111,546			-				-				111,546
Balance at December 31, 2013		158,285,045			791,641			13,144,044			(2,981	)			(12,567,597	)			1,365,107
Net income		-			-			-			-				326,340				326,340
Stock-based compensation		-			-			46,352			-				-				46,352
Balance at June 30, 2014		158,285,045		$	791,641		$	13,190,396		$	(2,981	)		$	(12,241,257	)		$	1,737,799

VIRTRA SYSTEMS, INC. STATEMENTS OF CASH FLOWS for the period:

				Six months ended June 30,
				2014				2013
Cash flows from operating activities:
	Net income			$	326,340			$	397,740
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			100,385				105,797
		Stock-based compensation			46,352				51,826
	Changes in operating assets and liabilities:
		Accounts receivable			(319,817	)			(239,062	)
		Inventory			(221,630	)			(340,300	)
		Prepaid expenses and other assets			(12,851	)			20,125
		Accounts payable and other accrued expenses			(273,460	)			189,742
		Deferred revenue			(1,024,944	)			332,543
Net cash provided/(used) by operating activities					(1,379,625	)			518,411
Cash flows from investing activities:
	Purchase of property and equipment				(47,564	)			(8,216	)
Net cash used in investing activities					(47,564	)			(8,216	)
Cash flows from financing activities:
	Draws on line of credit				-				150,000
	Repayments of line of credit				-				(150,000	)
	Payments on term loan				-				(39,767	)
Net cash used in financing activities					-				(39,767	)
Increase/(decrease) in cash and cash equivalents					(1,427,189	)			470,428
Cash and cash equivalents, beginning of period					2,358,955				372,119
Cash and cash equivalents, end of period				$	931,766			$	842,547
Cash paid during the period for:
Interest				$	-			$	5,247
Taxes				$	-			$	-