VirTra Systems Inc (OTCMKTS:VTSI) Climbing Up The Charts

Shares of VirTra Systems Inc (OTCMKTS:VTSI) have been steadily climbing up the charts and making new highs. This comes as VTSI is one of the few companies on the OTC Markets posting millions in revenues and profits. Judging from VTSI's first quarter numbers, we think this bull run is just getting started.VirTra describes itself as "a global leading provider of the world's most realistic and effective judgmental use of force 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."

Net sales were $6.2 million in the quarter, an increase of 141%, compared to $2.6 million for the first quarter of 2015. Gross profit was $4.1 million for the quarter, an increase of 173%, compared to $1.5 million for the first quarter of 2015. Gross margin for the quarter was 66%, compared to 59% for the first quarter of 2015. The year-over-year increase in gross margin was primarily due to increased sales volume.

Net income was $2.4 million for the quarter, or $0.01 per basic share, compared to $0.2 million, or break-even per basic share, for the first quarter of 2015. Stockholders’ equity increased to $6.8 million at March 31, 2016, an increase of 130%, compared to $2.9 million at March 31, 2015. The Company had no outstanding debt as of March 31, 2016. Cash and cash equivalents were $3.1 million at March 31, 2016, compared to $1.3 million at March 31, 2015. CEO Bob Ferris said:

“We are pleased to announce that our first quarter performance delivered a substantial increase in revenue growth and profitability. The success we have achieved through our disciplined approach to operations, and our focus on new and emerging opportunities for our products, has translated into record financial metrics, including revenues, margins and profitability. We still have much to accomplish, as world-wide, there are many with lethal force responsibility who still lack access to quality training scenarios and simulators. We are excited about the opportunities that lie ahead for our business and for our shareholders as we pursue our long term plans for growth and market liquidity.”

Last month, VTSI announced that it was one of two awardees under an indefinite delivery/indefinite quantity (IDIQ) contract by the United States Department of State (DOS) for law enforcement training simulators. The maximum value of all individual orders under the contract is US$40 million over the next five years. The company said:

If successful in winning individual orders under this contract, VirTra expects to provide law enforcement training simulators and related accessories, installation services, extended warranty services, scenario filming services, and training. VirTra’s systems generally employ multiple screens, realistic video training content and an electric impulse return fire system to simulate the stress of real-world situations – ultimately to help best prepare officers in judgmental use of force encounters. Using VirTra’s highly-advanced systems, officers hone and refine critical skills, in realistic scenarios, before lives are on the line. The contract requires, among other things, use of force and firearms simulators with peripheral view, a technology pioneered and continually refined by VirTra since 2004.

Currently trading with a market cap of $28 million, VTSI is on track for a banner year. We're expecting some major developments from VTSI this year and we'll most likely see press releases announcing government contracts. As a result, we'll see more buyers coming into the stock as more find out about VTSI, its force simulators, and its impressive numbers. We look forward to hearing more from VTSI. We will be updating Insider Financial as soon as we know more. For continuing coverage on VTSI, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in VTSI and have not been compensated for this article.