Wrap Technologies, Inc. Reports Third Quarter 2023 Results and Record Quarterly Revenue
Record Quarterly Revenue Achieved Through Significant Domestic and Global Orders for BolaWrap and Wrap Reality
TEMPE, Ariz., Nov. 09, 2023 (GLOBE NEWSWIRE) -- Wrap Technologies, Inc. (Nasdaq: WRAP) ("Wrap" or the "Company"), a global leader in innovative public safety technologies and services, today announced financial and operating results for the third quarter ended September 30, 2023.
Third Quarter and Recent Highlights
-- Record quarterly revenue driven by strong international orders in the North African region. -- Full deployment order for BolaWrap 150 from a large domestic agency in the Mid-Atlantic. -- Second consecutive record quarter for Wrap Reality sales. -- Continued development of new Wrap Reality scenarios on a monthly basis. -- Successful integration of Wrap Intrensic, enhancing our Body-Worn Camera and Digital Evidence Management portfolio. -- Announced the appointment of Vice Admiral (ret.) Timothy Szymanski and Rajiv Srinivasan to the Board of Directors. -- Launched the "Protest Riot Pack" to help safeguard cities. -- Outlook positive for continued growth in Q4 and into 2024 driven by demand for all Wrap Solutions.
Management Commentary
"Q3 2023 has been an exemplary quarter for Wrap Technologies," said Kevin Mullins, Chief Executive Officer of Wrap Technologies, Inc. "We are delighted to announce our highest quarterly revenue in the Company's history primarily driven by robust international demand, particularly from the North African region, and a large-scale deployment order for BolaWrap 150 in the domestic Mid-Atlantic sector."
"Our Wrap Reality division proudly recorded its most outstanding quarterly sales to date for the second quarter in a row, a clear testament to our commitment to excellence and innovation. As part of our unwavering dedication, we embark on the creation of novel and groundbreaking training scenarios monthly. This rigorous development cycle not only ensures that our product suite remains at the forefront of technology and diverse in its offerings but also drives heightened efficacy and bolstered safety in law enforcement engagements. Additionally, we are developing an Officer Mental Health and Wellness program that will assist departments in the wellbeing of officers in their daily lives. In an age where precision and responsiveness are paramount, our solutions provide the training foundation for professionals to act with confidence and accuracy."
"Further fortifying our technological leadership in the industry, we've seamlessly integrated Wrap Intrensic into our technology arsenal. This integration has substantially enhanced our Body Worn Camera and Digital Evidence Management solutions. The early feedback and data suggest a harmonious synergy between our existing solutions and Wrap Intrensic's capabilities, signaling an era of robust growth. With the market's evolving needs and the increasing emphasis on transparency and accountability, our enhanced offerings are timely and pivotal. As such, we are confidently projecting a noteworthy surge in sales in this particular vertical. Our vision remains clear, and with these advancements, we are poised to deliver unparalleled value to our clients and stakeholders alike."
"In Q3 2023, Wrap's performance exceeded previous records, indicating a significant turning point for our company. These achievements, while commendable, are just the beginning of our journey. We are not only focused on enhancing our current operations but also on the opportunities that lie ahead. Our investments go beyond finances, emphasizing innovation, strategic planning, and a commitment to excellence. Guided by a clear vision and relentless determination, our goal is to realize Wrap's maximum potential and continue our progressive legacy. We anticipate revenue growth in the fourth quarter and into 2024, and given the demand for Wrap's solutions, we foresee a continual increase in orders in the upcoming 18 months."
Key Performance Indicators (KPIs):
-- Trained law enforcement agencies during the third quarter of 2023 grew to more than 1,480, a 14% increase from the prior year period. -- Certified officer instructors during the third quarter of 2023 grew to more than 5,200, a 14% increase from the prior year period. -- Backlog was approximately $365 thousand at September 30, 2023.
Third Quarter 2023 Financial Results
-- Net revenue increased 114% to $3.63 million from $1.70 million in the prior year period. Revenue in the Americas was $1.34 million as compared to $1.48 million in the prior year period, while international revenue grew 940% to $2.29 million or an increase of $2.07 million from $0.22 million in the prior year period. -- Gross profit increased to $2.18 million (60% of net revenue), a 139% increase from $0.91 million (54% of net revenue) in the prior year period. The increase in gross profit was primarily the result of increased efficiencies in the costs associated with production of the BolaWrap(R) 150 and continued cost containment efforts in the third quarter of 2023. -- Sales, general and administrative (SG&A) expense increased $0.73 million, or 20%, to $4.32 million from $3.59 million in the prior year period. The increase in selling general and administrative expenses was the result of the Company incurring approximately $840 thousand of one-time items related to certain legal expenses, the Company's financing, and the acquisition of Intrensic. Excluding these one-time items, selling general and administrative expenses for the third quarter 2023 would have been $3.48 million or inline with the prior year period. -- Research and development (R&D) expense decreased $0.63 million, or 51%, to $0.61 million from $1.24 million in the prior year period. The decrease in R&D expense was primarily the result of continuing cost management efforts. -- Operating expense increased $0.11 million, or 2%, to $4.93 million from $4.82 million in the prior year period. The increase in operating expense was the result of the Company incurring approximately $840 thousand of one-time items related to legal expenses, the Company's financing, and the acquisition of Intrensic. Excluding these one-time items, operational expense for the third quarter 2023 would have been $4.09 million or a 15% decrease from the prior year period. -- Net loss decreased 28% to $(2.78) million, or $(0.07) per share, from $(3.87) million, or $(0.09) per share, in the prior year period. Excluding the one-time items mention in operating expense, net loss for the third quarter 2023 would have been $1.94 million or a 50% improvement in net loss from the prior year period. -- Cash, cash equivalents and short-term investments were $14.9 million as of September 30, 2023, compared to $19.3 million as of December 31, 2022.
Financial Commentary
"Our Q3 2023 performance is a testament to the strength of our products and our strategic direction," said Chris DeAlmeida, Chief Financial Officer of Wrap Technologies, Inc. "We are particularly encouraged by the market's enthusiastic reception to our offerings, both domestically and internationally. Wrap Technologies is well-positioned for sustainable growth, and we are optimistic about the future. Our unwavering focus on cost containment, coupled with our strategic efforts, is guiding us towards sustainable growth."
"Our operational expense for the quarter stood at just over $4 million, excluding one-time items related to the financing and acquisition. This figure underscores our consistent efforts in managing operational costs even as we pursue strategic growth initiatives. Going forward, we expect operational expenses to remain flat to the adjusted number in third quarter for the foreseeable future."
"In summary, our third quarter results underscore our dedication to operational excellence, financial prudence, and strategic expansion, positioning us favorably for the year's final stretch. Moreover, the integration of Wrap Intrensic continues to drive immediate and meaningful growth to our business."
Conference Call
Wrap will hold a conference call today, November 9, 2023, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) to discuss these results.
Wrap management will host a presentation, followed by a question-and-answer period.
Date: Thursday, November 9, 2023
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Dial In Number: +1 (669) 444-9171
Meeting ID: 83450278845
Passcode: 200339
Webcast Link: Click here to register
Please join the call 5-10 minutes prior to the start time. A webcast recording of the call will be made available on the Company's investor relations website. |
