VirTra(US:VTSI)2020-08-12 11:56Financial Data and Key Metrics Changes - The total revenue for Q2 2020 was $2.8 million, a 9% decrease from $3.1 million in Q2 2019 [11] - The backlog increased to a record $14.3 million, up from $10.1 million a year ago and $11.3 million at the end of Q1 2020 [15] - Gross profit for Q2 2020 increased 4% to $1.6 million, representing 57% of revenue, compared to 49.6% in Q2 2019 [12] - The net loss for Q2 2020 was $601,000 or $0.08 per diluted share, compared to a net loss of $634,000 or $0.08 per diluted share in Q2 2019 [14] Business Line Data and Key Metrics Changes - The decrease in revenue for Q2 was attributed to a reduction in the number of simulators and accessories delivered and installed due to COVID-19 travel restrictions [11][12] - Bookings for Q2 2020 totaled $5.9 million, indicating strong demand despite installation challenges [15] Market Data and Key Metrics Changes - Media mentions of VirTra increased approximately 50% compared to the same time last year, indicating heightened interest in their products [7] - The company has not lost any business due to COVID-19, but installation capabilities have been impacted [8] Company Strategy and Development Direction - The company aims to leverage increased focus on law enforcement training to drive sales, particularly in the context of recent national discussions on policing [18] - VirTra's STEP program, which allows agencies to rent simulation equipment, has achieved a 100% renewal rate, providing a flexible financial option for customers [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of 2020, citing strong sales momentum and a robust pipeline [23] - The company is well-positioned to meet the training needs of both law enforcement and military markets, with ongoing enhancements to their product offerings [22] Other Important Information - The company received a $1.32 million promissory note under the Paycheck Protection Program, which may be forgiven if used for qualifying expenses [16] - The company has approximately $4 million in cash and cash equivalents, up from $3.3 million at the end of 2019 [16] Q&A Session Summary Question: Has there been an increase in inbound interest due to civil unrest? - Management confirmed an increase in inquiries, although the sales cycle is longer and not an immediate sales boost [26] Question: What are the bottlenecks to clearing the backlog? - The bottleneck could be a combination of client policies and the company's installation capacity, but management is prepared to handle increased demand [31] Question: How sustainable are the gross margins? - Management indicated that last year's lower margins were due to international installations with higher costs, and they aim for around 60% gross margins annually [43] Question: What are the major buckets of police budgets? - Police budgets typically include capital expenses, operational expenses, and grants, with some purchases made using asset forfeiture funds [45]