VirTra, Inc. (NASDAQ:VTSI) Q1 2020 Earnings Conference Call - Final Transcript
May 11, 2020 • 04:30 pm ET
we were optimistic about our ability to continue expanding our reputation as a leader in simulation training, and continue supporting the essential needs of our law enforcement and military personnel despite the complications that may have arisen from the COVID-19 pandemic. I'm pleased to report that as evidenced by our first quarter financial results and operational progress, that was indeed the case through the first quarter of 2020.
As you'll recall, we ended 2019 on a high note with $9.6 million backlog, a strong pipeline of potential new business opportunities, and the most expansive and advanced product line in our company's history. Thanks to the adaptability of our team, and as always, the hard work of many prior quarters and years, we were able to carry this momentum into the start of this year.
During the first quarter ended March 31, 2020, despite the onset of a global pandemic, we actually increased our revenues 9% year-over-year to $3.3 million. While the growth in the first quarter was encouraging, especially given the current state of the world, it's worth noting that our first quarter financial results were on track to be considerably more impressive if not for COVID-19.
So most of -- for most of the first three months of this year, our business was progressing extremely well. Unfortunately, we have several orders that were set to be delivered and installed in March and as shelter-in-place became the norm in many states across the country, several of these orders were suddenly delayed or pushed into subsequent quarters.
The unfortunate news in the short-term is that these delays negatively impacted our first quarter financial results. They depressed the top-line. They also impacted our margins since we've been ramping up to meet the increasing demand expected in 2020 and beyond. The good news is that none of these orders were lost. They simply shifted into our backlog. As of today, we haven't seen our orders canceled due to changes in budgets. Although this shift is not ideal, but as those of you who have followed our story are aware, we have always suggested evaluating the business over a longer time horizon than a single quarter.
Improved sales and marketing efforts, plus our finest product lineup in our history helped our company exit the quarter with a record backlog of $11.3 million despite the reduced activity forced by COVID-19.
We still fully expect to recognize a majority of these revenues over the coming year. This is based on expectations that the coming months will witness an increase in travel and installations, but we are also prepared to endure longer than expected delays. Of the contracts we secured so far this year, there are two in particular that are worth highlighting. In March, we received our first order through a new distributor in Europe, which is valued at $1.1 million. The order is for multiple simulators, including V-ST PROs and accessories, including drop-in recoil kits and Threat-Fire devices. Although dollar value is material, this contract