VirTra(US:VTSI)2020-11-11 08:50Financial Data and Key Metrics Changes - For Q3 2020, the company's revenue was $6.4 million, a 4% decrease from $6.7 million in Q3 2019 [13] - The net income for Q3 2020 was $868,000 or $0.11 per diluted share, compared to $937,000 or $0.12 per diluted share in Q3 2019 [18] - Adjusted EBITDA improved to $1.6 million in Q3 2020 from $1.4 million in Q3 2019 [18] - The backlog increased to $14.4 million, up 27% from $11.3 million a year ago [20] Business Line Data and Key Metrics Changes - The gross profit for Q3 2020 increased 6% to $4 million, representing 61.9% of revenue, compared to 55.9% in Q3 2019 [14] - Operating expenses for Q3 2020 were $2.7 million, a 10% increase from $2.5 million in Q3 2019, primarily due to an impairment charge [15] Market Data and Key Metrics Changes - The company noted that international orders were more delayed than domestic ones due to ongoing travel restrictions [8] - The military market is seeing increased traction, attributed to a transformation in military training approaches [40] Company Strategy and Development Direction - The company is focusing on expanding its presence in the military market, leveraging existing technology to provide innovative training solutions [23][25] - A partnership with Infoscitex is expected to enhance growth opportunities in the military sector [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the fourth quarter, despite potential challenges from COVID-19 [32] - The company has maintained a clean balance sheet with $4.1 million in cash and no debt, positioning it well for future growth [32] Other Important Information - The company has achieved its 14th consecutive year of top-line growth, despite the pandemic [30] - The STEP program has seen all customers renew their contracts, indicating strong interest in simulation as a service [43] Q&A Session Summary Question: Did Q3 benefit from customers pulling in orders ahead of potential noise? - Management acknowledged that there may have been some impact but noted that similar concerns have existed in past years [37] Question: What is driving traction in the military market? - The company attributed traction to hard work and a shift in military training approaches towards immersive virtual reality [40] Question: Update on the STEP program? - The STEP program is seeing traction, with all customers renewing their contracts, indicating strong demand [43] Question: Comment on the linearity of the quarter regarding bookings and deployments? - Management indicated that bookings came in consistently throughout the quarter, with flexibility in deployment despite COVID-19 challenges [49][51] Question: How is the international business outlook? - The company sees healthy and growing interest in international deals, with increasing acceptance of technology in training [58]