VirTra Reports Record 2013 Revenue and Earnings

TEMPE, AZ--(Marketwired - Mar 31, 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 year end 2013 audited financial statements. Included with the corporate financial statements for the year ended December 31, 2013, VirTra has released the report of its independent registered public accounting firm, Semple Marchal & Cooper, LLP. The audited financial statements are available on VirTra's website and here.

Financial Summary:

• Net Sales were $9.8 million for the year ending December 31, 2013, an increase of $1.0 million, or 11%, compared to the previous year's sales of $8.8 million. The increase is mainly attributable to an increase in international sales.
  
  
• Gross margin for 2013 was 66% of Net Sales, compared to 63% last year. The drivers for the improvement are primarily due to the increase in sales and corresponding leverage of fixed overhead.
  
  
• Sales, general and administrative (SG&A) expenses of $4.9 million in 2013 decreased 10%, from $5.4 million in 2012. As a percent of revenue, SG&A was 50% for 2013 compared to 61% in the prior year. The change is mainly due to a portion of SG&A resources assigned to client paid customization projects.
  
  
• Income from operations increased $1.5 million in 2013, to $1.6 million compared to $0.1 million in 2012.
  
  
• Throughout 2013, the Company generated $2.3 million in cash from operating activities. Cash and cash equivalents were $2.4 million at the end of 2013, up from $0.4 million at December 31, 2012. No stock options were exercised.
  
  
• The Company has no draw upon the line of credit as of December 31, 2013. The Company completely paid down the commercial term loan during the third quarter of 2013, fulfilling all loan obligations.
  
  

Mark Skidmore, Vice President - Chief Accounting Officer of the Company, stated, "2013 was the strongest overall financial performance since the inception of the Company. We continue to focus on excellence in developing, manufacturing, supporting and selling the highest quality products to our customers."

Bob Ferris, Chief Executive Officer of VirTra, commented, "I'm very pleased to announce the significant progress VirTra achieved during 2013, reaching both record revenues and earnings while still heavily investing in future products and opportunities. We still have much to accomplish but 2013 reflected our concentrated effort on gaining market share for the benefit of our stakeholders."

VirTra will hold its 2014 Annual Shareholders' Meeting on Thursday May 1^st in Tempe, Arizona. VirTra has determined the close of business on March 31, 2014 as the record date for determining the shareholders entitled to vote at the Annual Shareholders' Meeting. Notice of the meeting, full details and related materials will be mailed on or about April 11, 2014.

The Company does not plan to register with the Securities and Exchange Commission at this time. However, the Board of Directors is monitoring the situation regularly and is prepared to proceed with registration, if and when the Board deems it is in the best interests of all the shareholders.

About VirTra Systems

VirTra is a global leading provider of the world's most realistic and effective small arms 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. AUDITED BALANCE SHEET AS OF DECEMBER 31:
			2013				2012
Assets
Current assets:
	Cash and cash equivalents		$	2,358,955			$	372,119
	Accounts receivable			786,877				462,942
	Inventory			407,434				370,019
	Prepaid expenses and other current assets			44,902				65,558
	Total current assets			3,598,168				1,270,638
Property and equipment, net				460,513				612,380
Total assets			$	4,058,681			$	1,883,018
Liabilities and Stockholders' Equity/(Deficit)
Current liabilities:
	Accounts payable		$	289,820			$	227,331
	Accrued compensation and related costs			588,097				335,879
	Accrued expenses and other current liabilities			153,875				118,081
	Term loan - short-term			-				80,499
	Deferred revenue			1,516,792				1,173,449
	Total current liabilities			2,548,584				1,935,239
Long-term liabilities:
	Term loan - long-term			-				143,636
	Accrued rent liability - long-term			144,990				131,358
Total liabilities				2,693,574				2,210,233
Commitments and contingencies
Stockholders' equity/(deficit):
	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			13,144,044				13,032,498
	Treasury stock at cost, 43,200 common shares as of December 31, 2013 and 2012, respectively.			(2,981	)			(2,981	)
	Accumulated deficit			(12,567,597	)			(14,148,373	)
	Total stockholders' equity/(deficit)			1,365,107				(327,215	)
Total liabilities and stockholders' equity/(deficit)			$	4,058,681			$	1,883,018

VIRTRA SYSTEMS, INC. AUDITED STATEMENT OF OPERATIONS FOR THE PERIOD ENDED DECEMBER 31:
			2013				2012
Net revenues			$	9,819,519			$	8,829,555
Cost of products sold				3,361,307				3,280,211
Gross margin				6,458,212				5,549,344
General and administrative expenses				4,864,056				5,411,333
Income from operations				1,594,156				138,011
Other income/(expense):
	Other income			847				2,203
	Other expense			(14,227	)			(26,818	)
Net other income/(expense)				(13,380	)			(24,615	)
Income before income taxes				1,580,776				113,396
Income tax expense/(benefit)				-				-
Net income			$	1,580,776			$	113,396
Weighted average of common and common equivalent shares outstanding:
	-Basic			158,285,045				158,285,045
	-Diluted			159,199,484				161,637,802
Net income per common and common equivalent share:
	-Basic		$	0.01			$	0.00
	-Diluted		$	0.01			$	0.00

VIRTRA SYSTEMS, INC. AUDITED STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT):

		Common stock
							Additional
		Shares		Amount			paid-in capital			Treasury Stock				Accumulated Deficit				Total
Balance at January 1, 2012		158,285,045		$	791,641		$	12,912,365		$	(2,981	)		$	(14,261,769	)		$	(560,744	)
Net income		-			-			-			-				113,396				113,396
Stock-based compensation		-			-			120,133			-				-				120,133
Balance at December 31, 2012		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

VIRTRA SYSTEMS, INC. AUDITED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED DECEMBER 31:
				2013				2012
Cash flows from operating activities:
	Net income			$	1,580,776			$	113,396
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			218,059				227,492
		Stock-based compensation			111,546				120,133
	Changes in operating assets and liabilities:
		Accounts receivable			(323,935	)			(97,222	)
		Inventory			(37,415	)			434,529
		Prepaid expenses and other assets			20,656				91,622
		Accounts payable and other accrued expenses			364,133				3,427
		Deferred revenue			343,343				(813,713	)
		Due to related parties			-				(35,048	)
Net cash provided by operating activities					2,277,163				44,616
Cash flows from investing activities:
	Purchase of property and equipment				(66,192	)			(40,683	)
Net cash used in investing activities					(66,192	)			(40,683	)
Cash flows from financing activities:
	Draws on line of credit				150,000				1,655,000
	Repayments of line of credit				(150,000	)			(1,655,000	)
	Proceeds from term loan				-				250,000
	Payments on term loan				(224,135	)			(25,865	)
	Purchase of common stock				-				-
Net cash provided by/(used in) financing activities					(224,135	)			224,135
Increase/(decrease) in cash and cash equivalents					1,986,836				228,068
Cash and cash equivalents, beginning of period					372,119				144,051
Cash and cash equivalents, end of period				$	2,358,955			$	372,119
Cash paid during the period for:
Interest				$	7,738			$	24,429
Taxes				$	-			$	-