Q1 2024 VirTra Inc Earnings Call
Robert: Good afternoon, and welcome to VirTra's first quarter 2024 earnings conference call. My name is Robert, and I will be your operator for today's call.
Good afternoon, and welcome to divert trusts first quarter 'twenty 'twenty four earnings conference call.
Robert: My name is Robert and I'll be your operator for today's call.
Robert: Joining us for today's presentation are the company's CEO, John Gibbons, and CFO, Alanna Boudreau. And following their remarks, we will open the call for questions. Before we begin the call, I'd like to provide VirTra's safe harbor statement that includes cautions regarding forward-looking statements made during this call. During this presentation, management may discuss financial projections, information, or expectations about the company's products and services or markets, or otherwise make statements about the future, which are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements. The company does not undertake any obligation to keep them updated as required by law.
Robert: Joining us for today's presentation are the company's CEO, John Gibbons and C F O Atlanta Boudreaux.
Robert: Following their remarks, we will open the call for questions.
Robert: Before we begin the call I'd like to provide virtual safe Harbor statement that includes cautions regarding forward looking statements made during this call.
Management: During this presentation management may discuss financial projections information or expectations about the company's products and services or markets or otherwise make statements about the future.
Speaker Change: Forward looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made.
Speaker Change: The company does not undertake any obligation to update them as required by law.
Robert: Finally, I'd like to remind everyone that this call will be made available for replay via a link in the investor relations section of the company's website at www.virtra.com. Now I'd like to turn the call over to VirTra's CEO, Mr. John Gibbons. Thank you, and you may proceed, sir.
Speaker Change: I'd like to remind everyone that this call will be made available for replay via a link in the Investor Relations section on the company's website at Www dot.
Speaker Change: I R. A T R. A dot com now.
Speaker Change: Now I'd like to turn the call over to <unk> CEO, Mr. John Gibbons. Thank you and you May proceed sir.
John F. Givens: Thank you, Operator, and thank you everybody for joining us this afternoon. After the market closed today, we issued a press release that provided our financial results for the first quarter ending March 31st, 2024, along with our highlighted business accomplishments. Today I'll begin by discussing our first quarter performance and strategic achievements, including our progress with the VXR platform and our military market engagements before turning over to Alanna for a detailed financial review. After that, I'll provide some concluding remarks before we move on to questions and answers. Our first quarter performance was not where we wanted it to be.
John F. Givens: Thank you operator, and thank you everybody for joining us. This afternoon. After the markets closed today, we issued a press release that provided our financial results for the first quarter ending March 31, 2024, along with the highlighted business accomplishments.
John F. Givens: Revenue dipped to $8.1 million, a figure that frankly reflects our current challenges as much as it highlights our potential. While we maintain a strong gross margin of 67%, the decrease in revenue was an indicator that our new sales initiatives need to be accelerated. We are facing external headwinds, notably from cyclical budget decisions and the impact of the U.S. government's continuing resolution. These are not excuses, but realities, and we are tackling them head on.
John F. Givens: Today I'll begin by discussing our first quarter performance and strategic achievements, including our progress with the VX, our platform and our military market engagements before handling out over to a lot of for a detailed financial review after that I'll provide some concluding remarks before I move on to questions and answers.
Speaker Change: Our first quarter performance was not where we want it to be a revenue dip to $8 1 billion a figure that frankly reflects our current challenges as much as it highlights our potential while we maintain a strong gross margin of 67%. The decrease in revenue was an indicator that our news.
Speaker Change: Sales initiatives need to be accelerated we were facing external headwinds, notably from cyclical budget decisions and the impact from the U S. Government's continuing resolutions. These are not excuses, but the realities and we are tackling them head on.
John F. Givens: We are not sitting idle. The substantial effort in 2023 to clear out the significant backlog was essential. However, it has temporarily impacted our revenue streams to start this year. In recent months, we've been hard at work implementing our sales initiatives, ramping up our grant assistance programs, and pursuing sales growth. While these actions take time to yield results, they will be important for our continuing progress and further penetrating the global markets and supporting the upcoming BXR launch. As an update, our VXR launch preparations advanced on schedule this quarter, and we are targeting deliveries in the coming months.
We're not sitting idle the substantial effort in 2020 three to clear off the significant backlog was essential however, it has temporarily impacted our revenue streams to start this year.
In recent months, we've been hard at work implementing our sales initiatives ramping up our grant assistant programs and pursuing sales growth. While these actions take time to yield results. They will be important for our continuing progress and further penetrating the global markets and supporting the upcoming <unk> XR launch.
Speaker Change: As an update our V XR launch preparations advanced on schedule this quarter and we are targeting deliveries in the coming months, our new extended reality solution is set to disrupt and improve the professional training environments. It is designed to enhance soft skills training across.
John F. Givens: Our new extended reality solution is set to disrupt and improve professional training environments. It is designed to enhance soft skills training across applications in law enforcement, healthcare, education, and other related sectors. We are tailoring VXR to meet the diverse needs of all agency sizes, budgets, and training requirements. By extending beyond shoot-don't-shoot scenario-based training, VXR focuses on the development of critical interpersonal skills enabling professionals to better navigate sensitive situations, diffuse potential conflicts, and build strong community relationships.
Speaker Change: And law enforcement health care education, and other related sectors.
VX or: We are tailoring VX or to meet the diverse needs of all agency sizes budgets and training requirements by extending beyond the shoe don't shoot scenario based training VX. Our focus is on the development of critical interpersonal skills, enabling professionals to better navigate sensitive situations.
Speaker Change: The abuse potential conflicts and build strong community relationships, it's wider array of application positions. The XR as a key pillar in our long term growth strategy with this launch we are prepared to moderate our strong profit margins temporarily to secure a more substantial market share.
John F. Givens: Its wide array of applications positions VXR as a key pillar in our long-term growth strategy. With this launch, we are prepared to moderate our strong profit margins temporarily to secure a more substantial market share and ensure sustained growth. As we progress through 2024, advancing our sales and marketing strategy is a key priority. To efficiently bring our core screen-based simulators and new innovations like VXR to market, we've streamlined our sales approach to boost productivity and customer success. By establishing additional territories and optimizing our sales staff's focus.
Speaker Change: And ensure a sustained growth.
Speaker Change: As we progress through 2020 for.
Speaker Change: Advancing our sales and marketing strategy as a key priority to Fisher, we bring our core screen based simulators and new innovations like <unk> XR to market, we've streamlined our sales approach to boost productivity and customer success.
Fisher: By establishing additional territories and optimizing our sales staffs focus.
John F. Givens: We're enhancing customer engagement and operational efficiency. Our revised sales incentive program and the strategic addition of sales support specialists in key locations are already improving our pipeline visibility and customer interactions, ensuring that our sales force is as advanced and efficient as our technology. We are strategically investing in content and technology to ensure all of our training solutions, including BXR, provide effective training modules across various applications and scenarios. Our investment in content development continues to strengthen our competitive position. We have expanded our scenario library to include more real-world situations like crisis intervention and active shooter responses, developed in consultation with industry experts.
Fisher: We are enhancing customer engagement and operational efficiencies our revised sales initiative program incentive program and the strategic condition of sales support specialist in key locations are already proven.
Speaker Change: Proving our pipeline visibility and customer interactions ensuring that our sales force is as advanced and efficient as our technologies.
Speaker Change: We are strategically investing in content and technology to ensure all of our training solutions, including the XR provide effective training modules across various applications and scenarios our investment in content development continues to strengthen our competitive position.
Speaker Change: We have expanded our scenario library to include more real world situations like crisis intervention and active shooter responses developed in consultation with industry experts. This expansion is enhancing our training effectiveness and solidifying our early mover advantage in the industry are proprietary.
John F. Givens: This expansion is enhancing our training effectiveness and solidifying our early mover advantage in the industry. Our proprietary D3 technology fuels these developments, making our training solutions comprehensive and realistic. Much of our content is also certified through Iatalyst, ensuring it meets the rigorous national standard.
Speaker Change: Three technology fuels these developments make our training solutions comprehensive and realistic.
I analyst: Much of our content is also certified through I analyst, ensuring it meets the rigorous rigorous national standards.
John F. Givens: Each hour of our training curriculum saves approximately 65 hours of research and preparation for our clients, demonstrating significant value and efficiency. Growing our content library will continue to be a key priority in the years ahead as quality content continues to be the crucial differentiator for securing new customers, improving current customers' experience, and driving positive training out. We are ramping up content development across our training solutions and continuously growing our output rate.
Speaker Change: Each hour of our training curriculum saves approximately 65 hours of research and preparation for our clients demonstrating significant value and efficiency.
Speaker Change: Growing our content library will continue to be a key priority in the years ahead as quality content continues to be the crucial differentiator for securing new customers improving current customers experience and driving positive training outcomes, we are ramping up content development across our training solutions and.
Speaker Change: Growing our output rates.
John F. Givens: These enhancements in content are paralleled by continuous improvements in our internal operations. We've been optimizing our production process and further enhancing our ERP system to improve our operational agility, which is a crucial factor in fulfilling our backlog in 2023. As a result, throughput has significantly increased, demonstrating our ability to handle larger volumes more efficiently, which is crucial as we scale operations. We've improved our book-to-ship times and product quality, reducing production errors, and we're seeing much better cooperation between departments.
Speaker Change: These enhancements.
Speaker Change: In content are paralleled by continuous improvements in our internal operations.
Speaker Change: We've been optimizing our production process and further enhancing our ERP system to improve our operational agility.
Speaker Change: Which is a crucial factor in fulfilling our backlog in 2023 as a result.
Speaker Change: Throughput has significantly increased demonstrating our ability to handle larger volumes more efficiently, which is crucial as we scale operations. We've improved our book to ship times and product quality, reducing production errors and we're seeing much better cooperation between departments together these advance.
John F. Givens: Together, these advances are achieving financial efficiencies and ultimately leading to greater customer satisfaction, which we expect to continue strengthening as our customer success initiatives take hold. Looking closer at how our end markets performed in Q1, in the first quarter, our government revenue increased by 7% to $6.7 million from $6.3 million in the prior year. This growth is attributed to design and prototyping revenue. As law enforcement budgets face continuous cuts, they rely heavily on grant funding from the federal government. We have implemented the Grant Watch program, which monitors and matches department needs with grants required to fund needed equipment for training. Internationally, our revenue was $1.3 million, a decrease from $3.2 million in 2023.
Speaker Change: Says, our achieving financial efficiencies and ultimately leading to greater customer satisfaction, which we expect to continue strengthening as our customers' success initiatives take hold.
Speaker Change: Looking closer at how our end markets performed in Q1.
Speaker Change: In the first quarter, our government revenue increased by 7% to $6 7 million from $6 three in the prior year. This growth is attributed to design and prototyping revenue.
Speaker Change: As law enforcement budgets face continuous cuts they rely heavily on the grant funding from the federal government. We have implemented the grant watch program, which monitors and matches department needs with grants required to fund needed equipment for training.
Speaker Change: Internationally, our revenue was $1 3 million.
Speaker Change: Decrease from $3 2 million in 2023.
John F. Givens: The dip in this segment can primarily be attributed to the longer lead times in our international pipeline. As our international pipeline continues to grow, the U.S. government's continuing resolution and budget issues, along with the current geopolitical landscape, have affected the expected release dates of many opportunities which rely heavily on government funding. We expect a higher close rate in the next several quarters as budgets are approved, and the continuing resolution is resolved.
Speaker Change: The dip in the segment can primarily be attributed to the longer lead times in our international pipeline.
Speaker Change: With our international pipeline continues to grow the U S government, continuing resolution and budget issues along with the current geopolitical landscape has affected the expected release dates of many opportunities which rely heavily on government funding, we expect a higher close rate in the next several quarters as budgets are approved and the <unk>.
Speaker Change: Resolution was resolved.
John F. Givens: As part of our sales team restructuring, the appointment of dedicated international sales personnel is beginning to show results. These changes are enhancing our ability to forecast and stabilize future revenue streams within this segment as we continue to build out a more predictable international pipeline. Turning to our progress in the military, the recent award of a $5.9 million prototype contract from the U.S. Army's Integrated Visual Augmentation System, or IVAS, program underscores our strategic alignment with military needs and our pivotal role in advancing training technology.
Sales Team: As part of our sales team restructuring.
Speaker Change: Appointment of dedicated international sales personnel is beginning to show results. These changes are enhancing our ability to forecast and stabilize future revenue streams. Within this segment as we continue to build out a more predictable international pipeline.
Speaker Change: Turning to our progress in the military the recent award of a $5 9 million dollar prototype contract from the U S. Army's integrated visual augmentation system or Ibs program underscores our strategic alignment with military needs and our pivotal role in advancing training technologies. This car.
John F. Givens: This contract, secured through our collaboration with Microsoft as the prime contractor, is an important continuation of our involvement with the I-BEST program. Included in the order are our industry-leading recoil hardware kits, high-pressure airfield stations, and magazines, all engineered to meet the U.S. Army's stringent requirements. This partnership reaffirms the reliability and performance of our technology and also highlights our capability to innovate and adapt in response to the demanding needs of military training.
Microsoft: Track secured through our collaboration with Microsoft as the Prime contractor is an important continuation of our involvement with the Ibs program.
Speaker Change: Included in the order.
Unknown Executive: Our our industry, leading recoil hardware kits high pressure air filled stations and magazines all engineered to meet the U S. Army's stringent requirements. This partnership reaffirms the reliability and performance of our technology and also highlights our capability to innovate and adapt.
Speaker Change: In response to the demanding needs of military training.
John F. Givens: Over the past two years, we have significantly expanded our production capacity, preparing VirTra for mass production, and enabling us to meet the growing demands of the U.S. Army. Our work on this project has advanced our technological capabilities and provided us with valuable insights into effectively serving military markets globally. Through initiatives like IVAS, VirTra is not merely participating in the defense sector; we are actively shaping the next generation of military training solutions.
unknown: Over the past two years, we have significantly expanded our production capacity preparing virtue for mass production.
Speaker Change: And enabling us to meet the growing demands of the U S Army.
Speaker Change: Our work on this project has advanced our technology technological capabilities and provided us with valuable insights into effectively serving military markets globally.
Ipass virtue: Through initiatives like Ipass virtue is not merely participating in the defense sector. We are actively shaping the next generation of military training solutions. Our efforts ensure that service members are equipped to handle the complexities of modern combat scenarios and this contract serves as a foundation.
John F. Givens: Our efforts ensure that service members are equipped to handle the complexities of modern combat scenarios, and this contract serves as a foundation for future innovations in Army training technology. I'll now turn the call over to Alanna to discuss our financial results in further detail.
Ipass virtue: And for future innovations in Army training technologies.
Laura: I'll now turn the call over to Laura to discuss our financial results in further detail our Lana.
Alanna Boudreau: Thank you, John, and good afternoon, everyone. Now, we'll review our unaudited financial results for the first quarter ended March 31st, 2024. Total revenue was 8.1 million compared to 10 million in the prior year period. The 19% decrease was primarily due to delays in federal funding attributed to the US government's continuing resolution, which caused numerous contracts to be placed on hold. This temporary challenge impacted bookings in both the fourth quarter of 2023 and the first quarter of 2024.
Alanna Boudreau: Thank you John and good afternoon, everyone now lets review our unaudited financial results for the first quarter ended March 31, 2024, total revenue was $8 1 million compared to the 10 million in the prior year period. The 19% decrease was primarily due to delays in federal funding attributed to the U S government.
Alanna Boudreau: Our gross profit totaled $5.5 million, 67% of total revenue, compared to $6.9 million, 69% of total revenue in the prior year period. The 21% decrease in gross profit was primarily due to the change in sales. Gross margin decreased mainly due to cost increases from the Microsoft contract. However, specifically, the milestone payment in December 2023, which incurred minimal costs, previously boosted margins. However, costs associated with subsequent milestone payments in the first quarter of 2024 adversely affected those gross margins; effective cost management and other system sales partially offset this effect.
Alanna Boudreau: That operating expense was $4.1 million, marking a 17% increase from the $3.5 million in the prior year period. This rise was driven by higher payroll and benefits associated with recruiting senior-level staff for strategic growth, increased IT spending to enhance compliance for potential government contracts, and expanded travel to broaden sales territory coverage.
Speaker Change: Congratulation, which caused numerous contracts to be placed on hold this temporary challenge impacted bookings in both the fourth quarter of 2023, and the first quarter of 2024.
Speaker Change: Our gross profit totaled 5.5 million, 67% of total revenue compared to $6 9 million, 69% of total revenue in the prior year period, the 21% decrease in gross profit was primarily due to the change in sales gross margin decreased mainly due to cost increases from.
Speaker Change: The Microsoft contract.
Unknown Executive: The milestone payment in December 2023, which incurred minimal costs previously boosted margins, however costs associated with subsequent milestone payment in the first quarter of 'twenty 'twenty four adversely affected the gross margin.
Speaker Change: Effective cost management and other system sales, partially offset this effect.
Speaker Change: Net operating expense was $4 1 million, marking a 17% increase from the $3 5 million in the prior year period. This ride was driven by higher payroll and benefits associated with recruiting senior level staff for strategic growth increased <unk> spending to enhance compliance for potential.
Speaker Change: Government contracts and expanded travel abroad in sales territory coverage, our operating income decreased 1.4 million from $3 5 million.
Alanna Boudreau: Our operating income decreased $1.4 million from $3.5 million. Our net income was $1.2 million or $0.11 per diluted share based on $11 million weighted average diluted shares outstanding compared to net income of $2.9 million or $0.27 per diluted share based on the $10.9 million weighted average diluted shares outstanding in the prior year period. Our adjusted EBITDA, a non-gap metric, was $1.9 million compared to $4 million in the prior year period. Now, turning to our bookings and backlog.
Speaker Change: Our net income was $1 2 million or 11 cents per diluted share based on 11 million weighted average diluted shares outstanding compared to net income of $2 9 million or 27 cents per diluted share based on the $10 9 million weighted average diluted shares outstanding in the prior.
Speaker Change: Your ear period.
Speaker Change: Our adjusted EBITDA, a non-GAAP metric was 1.9 million compared to 4 million in the prior year period.
Alanna Boudreau: We define bookings as the total of newly signed contracts and purchase orders received in a defined period. For the first quarter of 2024, we received bookings totaling 2.9 million. Looking at our backlog, which we define as the accumulation of bookings from signed contracts and purchase orders that are not yet started or incomplete and cannot be recognized as revenue until delivered in a future period, as of March 31, 2024, our backlog totaled $14 million.
Speaker Change: Now turning to our bookings and backlog.
Speaker Change: We define bookings as the total of newly signed contracts and purchase orders received in a defined period for the first quarter of 'twenty 'twenty four we received bookings totaling $2 9 million.
Alanna Boudreau: The breakout of this backlog includes $5.4 million in capital, $6.4 million in service and warranties, and $2.2 million in step contracts. As a reminder, service warranties and step backlog is revenue that will be recognized on a straight line basis over the coming year. In addition to the backlog, there are eight points, 6.8 million in renewable step contracts that would represent additional revenue for the next five years. Historically, we have had greater than a 95% renewal rate on our step contracts.
Speaker Change: Looking at our backlog, which we define as the accumulation of bookings from signed contracts and purchase orders that are not yet started or incomplete and cannot be recognized as revenue until delivered in a future period.
Speaker Change: As of March 31, 2024, our backlog totaled $14 million the.
Speaker Change: The breakout of this backlog includes 5.4 million in capital of $6 4 million in service and warranties and $2 2 million and step contracts.
Speaker Change: As a reminder, our service warranties and step backlog as revenue that will be recognized on a straight line basis over the coming years.
Speaker Change: In addition to the backlog there are eight point.
Speaker Change: $6 8 million and renewable step contracts that would represent additional revenue for the next five years.
Speaker Change: Historically, we have had greater than a 95% renewal rate on our step contract.
Alanna Boudreau: Finally, to our balance sheet. As of March 31, 2024, we had unrestricted cash and cash equivalents of $22.4 million, an increase from $18.9 million at December 31, 2023. From a working capital standpoint, at the end of the first quarter, we had $33.2 million in working capital, consistent with $33.2 million at the end of Q4 2020. For additional details on our financial results, please reference our 10-Q, which was filed earlier today. That concludes my prepared remarks, and now I'll turn over to John for his closing remarks.
Speaker Change: Finally to our balance sheet.
Speaker Change: On March 31st 2024, we had unrestricted cash and cash equivalents of $22 4 million an increase from $18 9 million at December 31st 2023.
Speaker Change: Working capital standpoint, the end of first quarter, we had $33 2 million and working capital consistent with the $33 2 million at the end of Q4 2023.
John F. Givens: For additional details on our financial results. Please reference our 10-Q, which was filed earlier today that concludes my prepared remarks, and now I'll turn over to John for his closing remarks.
John F. Givens: John Thank you Ilana.
John F. Givens: Thank you, Alanna. As we review this past quarter, it's clear that while we are not satisfied with our current performance, we are actively addressing these challenges. Our upcoming launch of the VXR platform and the growth in our strategic military engagements are important components to this response, and they will be key to our success in the rest of 2024. Looking ahead, we're focused on converting our robust pipeline into tangible outcomes. We may see similar sales figures in Q2 as we did in Q1, but as government budget resolutions take shape, this could change.
John F. Givens: As we review this past quarter, it's clear that while we are not satisfied with our current performance. We are actively addressing these challenges our upcoming launch of the <unk> platform and the growth in our strategic military engagements are important components to this response and they will be key to our success in the rest of 2020.
John F. Givens: For.
Speaker Change: Looking ahead, we're focused on converting our robust pipeline into tangible outcomes. We may see similar sales figures in Q2 as we did in Q1, but as government budget resolutions take shape. This could change we are positioned to capitalize on a healthy pipeline of opportunities in the months ahead.
John F. Givens: We are positioned to capitalize on our healthy pipeline of opportunities in the months ahead. Enhancing our customer relationships remains a top priority, particularly as we extend our global reach and roll out new products. In conclusion, despite the temporary hurdles, VirTra remains at the helm of the training industry, driven by innovation and a commitment to excellence in training outcomes. We are optimistic about what 2024 holds, and we look forward to sharing our progress. We appreciate your continued support and interest. And with that, we'll open up the call for questions. Operator, please provide the appropriate instructions. Thank you.
Speaker Change: Enhancing our customer relationships remains a top priority, particularly as we extend our global reach and rollout new products in conclusion. Despite the temporary hurdles virtual remains at the helm of the training industry.
Speaker Change: Driven by innovation and a commitment to excel training outcomes. We are optimistic about what 2024 holds and we look forward to sharing our progress with.
Speaker Change: We appreciate your continued support and interest and with that we'll open up the call for questions. Operator, please provide the appropriate instructions.
Robert: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Operator: Thank you at this time, we'll be conducting a question and answer session.
Robert: One moment, please, while we poll for questions. Our first question comes from Jason Schmidt with Lake Street Capital. Please proceed with your question.
Operator: Like to ask a question. Please press star one on your telephone keypad.
Operator: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the Q4.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Speaker Change: Our first question comes from Jason Schmidt with Lake Street Capital. Please proceed with your question.
Jason Schmidt: Hey guys, thanks for taking my questions. John, I just want to start with sort of your comments on kind of Q2, maybe similar to Q1. I guess maybe to expand on that a little further, can you just discuss how bookings have been tracking through the first two weeks of this quarter?
Jason Schmidt: Hey, guys. Thanks for taking my questions. John just wanted to start with sort of your comments on kind of Q2, maybe similar to Q1 I guess, maybe just expand on that a little further can you just discuss how bookings had been tracking through the first two weeks of this quarter.
John F. Givens: Yeah, so bookings are tracking. We have, we have quite a few opportunities out there that are relying on federal funding. And so depending on when those monies flow down from the release of the funds after the continued resolution is resolved, we're not sure on those timings. So I just wanted to give a little bit of notice there that said it may, but we're optimistic as we start to see things. Um, they're starting to move now. We should be okay. But again, timing is everything.
Speaker Change: Yeah, so bookings are tracking.
Speaker Change: Well.
Speaker Change: We have we have quite a few.
John F. Givens: Opportunities out there that are relying on the federal funding and so depending on when those monies flow down from the release of the funds. After the continuing resolution was resolved.
Speaker Change: We're not sure on those timing so I just wanted to give a little bit of noticed there that says it may but we're optimistic as we start to see things.
Speaker Change: They're starting to move now we should be okay, but again, it's timing is everything.
Jason Schmidt: Okay, that makes sense. And then, just following up on your comments on the Ives win. I mean, that definitely sounds like a pretty significant milestone for you guys. How should we think about the kind of high-level, big picture opportunity with this program?
Speaker Change: Okay that makes sense and then just following up on your comments on the I've asked when I mean that definitely sounds like a pretty significant milestone for you guys. How should we think about the kind of high level Big picture opportunity with this program.
Speaker Change: Well.
John F. Givens: So as most people know, I mean, it was it is a prototype contract. So we took our existing technology and based it on their incredibly stringent requirements and the reliability testing from humidity salt. They want to use them outdoors and all of that. We've passed many, many of those milestones, and that contract represented field testing going out to soldiers, and they're doing that as part of a much larger effort. I mean, if everything works the way they want, ammunition and ranges and those sorts of things are very hard to get and to put soldiers out there and train for safety reasons, so they're looking to equip soldiers, and the numbers are I got it.
Speaker Change: So as most people know I mean, it was it is a prototype contract. So we took our existing technology and based on their incredibly stringent.
Speaker Change: Stringent requirements and the reliability testing from humidity salt they want to use them outdoors and all of that we passed many many of those milestones and that contract represented a field testing going out to soldiers and they're doing that as part of a much larger.
Speaker Change: Effort I mean it.
Speaker Change: If everything works the way they want.
Speaker Change: Ammunition and ranges and those sorts of things are very hard to.
Speaker Change: To get into put soldiers out there and train and for safety reasons. So they're looking to equip soldiers in the numbers aren't there today, but that's part of why they're going through this program has been looking for alternative method to train it.
Speaker Change: In this environment, both in the field and back at home station.
Jason Schmidt: Got it. And then just the last one for me, and I'll jump back into Q. It sounds like the VXR is right on track for launch. How many customers will be receiving this? Is it a couple, half dozen, a dozen? How should we be thinking about that?
Ed: Got it and then just the last one from me and I'll jump back into queue. It sounds like the V. XR is right on track for launch how many customers will be receiving this is Ed a couple half dozen dozen how should we be thinking about that.
Ed:
Ed: Yeah.
John F. Givens: Let's see, how will I, give me one second, Jason. [inaudible] We have active POs, and we're working with the manufacturer of the headset for terms and conditions and, you know, pricing and stuff. So we have, we have a good bit of new customers and a lot of current customers that are looking for the headset. And keep in mind, the reason why: there are two reasons why they would use the headset. One is to do, well, the main one is to do soft. And they don't need much space in order to do that.
Ed: Let's see how what give me one second Jason.
Ed: So when.
Ed: We have active pose.
Jason Schmidt: And we're working with the manufacturer of the headset for terms and conditions and you know pricing and stuff. So we have we.
Jason Schmidt: We have a good bit of new customers and a lot of.
Jason Schmidt: Current customers that are looking for the headset and keep in mind. The reason why there's two reasons why they would use the headset.
Jason Schmidt: One is to do well the main one is to do soft skills and they don't need much space in order to do that and as I've stated in the past, we're not pursuing that shoot don't shoot at this time, because the technology just isn't there and introduces negative training.
John F. Givens: And as I've stated in the past, we're not pursuing the shoot-don't shoot at this time because the technology just isn't there, and it introduces negative training. So a lot of our existing customers are looking at it to augment the system, but not cannibalize that part of our revenues. So it's looked at as two, so it's looking to augment their training. So I'm not gonna give you numbers or anything, but we are having significant interest, and we have POs. We have quotes out there and POs.
Jason Schmidt: So a lot of our existing customers are looking at it to augment this system, but not cannibalize. Our you know that that part of our revenue stream. So it's looked at as too. So it's looking to augment their training.
Jason Schmidt: So I'm not going to give any numbers or anything, but we're having significant interest.
Jason Schmidt: And we have P. O we have quotes out there S. P o's.
Jason Schmidt: Okay, no, that's really helpful. Thanks a lot, guys. Thank you, Jason.
Jason Schmidt: Okay. No that's really helpful. Thanks, a lot guys.
Jason Schmidt: Thank you Jason.
Robert: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment while we poll for questions. At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Givens for his closing remarks.
Jason Schmidt: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad, one moment, while we poll for questions.
Robert: At this time. This concludes our question and answer session I'd now like to turn the call back over to Mr. Gibbons for his closing remarks.
Robert: Thank you.
John F. Givens: Virtue's dedication to our customers and their crucial missions is as strong as ever. The passion, hard work, and dedication of our team are the cornerstone of our success, and I'm confident in our ability to provide thought leadership to our customers, continue innovating at the top of the industry, and make a meaningful difference. To our shareholders, thank you for your continued support. As we move forward into the rest of 2024 and beyond, I'm looking forward to sharing our success and progress with you. Thanks for all of your ongoing support.
Robert: Virtuous dedicated to our customers and their crucial missions.
John F. Givens: It is as strong as ever.
John F. Givens: Our passion hard work and dedication of our team.
Virtue: We are the cornerstone of our success and I'm confident in our ability to provide thought leadership to our customers.
John F. Givens: Continue innovating at the top of the industry and making a meaningful difference.
Shareholders: To our shareholders. Thank you for your continued support as we move forward into the rest of 2024 and beyond.
John F. Givens: Looking forward to sharing our success and progress with you. Thanks.
John F. Givens: Thanks for all of your ongoing support operator.
Robert: Thank you for joining us today for VirTra's first quarter 2024 conference call. You may now disconnect your lines.
John F. Givens: Thank you for joining us today for purchase first quarter 'twenty 'twenty four conference call. You may now disconnect your lines.
Robert: Yeah.