VirTra(US:VTSI)2025-03-27 20:43Financial Performance - Revenues for the year ended December 31, 2024, were $26,350,819, a decrease of $12,440,518 or 32% compared to $38,791,337 in 2023, primarily due to delayed contract signings [105]. - Gross profit for 2024 was $19,412,515, down $8,000,558 or 29% from $27,413,073 in 2023, with a gross profit margin of 74% in 2024 compared to 71% in 2023 [107]. - Net income for 2024 was $1,363,681, representing a decrease of $7,787,154 or 85% from $9,150,835 in 2023, largely driven by the revenue decline [111]. - Adjusted EBITDA for 2024 was $2,926,169, a decrease of $9,447,710 or 76% from $12,373,879 in 2023 [112]. - Cash and cash equivalents as of December 31, 2024, were $18,040,827, down from $18,849,842 in 2023 [112]. - Net cash provided by operating activities decreased to $1,257,266 in 2024 from $6,682,616 in 2023, primarily due to lower net income [113]. Operating Expenses - Operating expenses increased by $386,676 or 2% to $17,416,184 in 2024, with R&D expenses rising by $208,988 or 7% [108]. Market Strategy - The Company plans to broaden its product offerings and enter new market segments through innovative products and services [101]. - VirTra aims to expand its total addressable market by targeting new customer types and enhancing marketing efforts [101]. - The Company is open to partnerships and acquisitions to optimize long-term growth and shareholder value [102]. Bookings and Backlog - The Company received bookings totaling $12.2 million for Q4 2024, bringing total bookings for the year to $29.6 million [117]. - The Company has a backlog of $22 million as of December 31, 2024, which includes $10.6 million in Capital, $6.6 million in Service, and $4.8 million in STEP [118]. - Management estimates that the majority of new bookings from Q4 2024 will convert to revenue in 2025, although contract terms and install dates may change [119]. - There are $5.3 million in renewable STEP contract options outstanding, with an expected 95% exercise rate based on current renewal rates [117]. - The Company has strengthened booking qualifications by ensuring STEP contracts are recorded for their full three-year value, adding $1.9 million to bookings [117]. Funding and Financial Strategy - The Company is open to raising additional funds from capital markets to expand production capacity and enhance sales and marketing efforts, but there is no assurance that financing will be available [121]. Regulatory and Economic Environment - The impact of the new federal administration on bookings for 2025 is uncertain, with discussions of budget cuts and frozen federal funding observed [120]. Accounting and Warranty - Revenue recognition is based on ASC 606, with revenue recognized when performance obligations are satisfied [129]. - The Company provides a one-year warranty on products, estimating warranty liabilities based on historical claims data [138]. - The Company employs a conservative approach to bad debt reserves, calculating a percentage of all outstanding accounts receivable [125].