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® 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 CallWrap 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,
2023Time: 5:00 p.m. Eastern time (2:00 p.m.
Pacific time)Dial In Number: +1 (669)
444-9171Meeting
ID: 83450278845Passcode: 200339Webcast
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.
About Wrap
Wrap Technologies, Inc. (Nasdaq: WRAP) is a leading global
provider of advanced public safety solutions, integrating
ultramodern technology, cutting-edge tools, and comprehensive
services to address the complex, modern day challenges facing
public safety organizations around the world. Guided by a no-harm
principle, Wrap is dedicated to developing groundbreaking solutions
that empower public safety agencies to safeguard the communities
they serve in a manner that fosters stronger relationships. Driving
safer outcomes, empowering public safety and communities to move
forward together.
Wrap's BolaWrap® solution encompasses an innovative and
patented hand-held remote restraint device, strategically
engineered with Wrap’s no-harm guiding principle to proactively
deter escalation by deploying a Kevlar® tether that safely
restrains individuals from a distance. Combined with
BolaWrap® training, certified by the esteemed International
Association of Directors of Law Enforcement Standards and Training
(IADLEST), Wrap enables officers from over 900 agencies across the
US and 60 countries around the world, with the expertise to
effectively use BolaWrap® as an early intervention measure,
mitigating potential risks and injuries, averting tragic
outcomes. Saving lives with each wrap.
Wrap Reality™, the Company’s advanced virtual reality training
system, is a fully immersive training simulator and comprehensive
public safety training platform equips first responders with the
discipline and practice to prevent escalation, de-escalate
conflicts, and apply appropriate tactical use-of-force measures to
better perform in the field. By offering a growing range of
real-life scenarios, Wrap Reality™ addresses the dynamic nature of
modern law enforcement situations for positive public safety
outcomes. Building safer communities one decision at a
time.
Wrap’s Intrensic solution is a comprehensive, secure and
efficient body worn camera and evidence collection and management
solution designed with innovative technology to quickly capture,
safely handle, securely store, and seamlessly track evidence, all
while maintaining full transparency throughout the process. With
meticulous consolidation and professional management of evidence,
confidence in law enforcement and the justice system soars,
fostering trust and reliability in court outcomes. Wrap Intrensic’s
efficient system streamlines the entire process seamlessly,
empowering all public safety providers to focus on what matters.
Expediting justice with integrity.
Connect with Wrap: Wrap
on Facebook Wrap on Twitter Wrap
on LinkedIn Trademark
Information Wrap, the Wrap logo, BolaWrap®, Wrap
Reality™ and Wrap Training Academy are trademarks of Wrap
Technologies, Inc., some of which are registered in the U.S. and
abroad. All other trade names used herein are either trademarks or
registered trademarks of the respective holders.
Cautionary Note on Forward-Looking Statements - Safe Harbor
Statement This press release contains “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, including but
not limited to: statements regarding the Company’s overall
business; total addressable market; and, expectations regarding
future sales and expenses. Words such as “expect,” “anticipate,”
“should”, “believe”, “target”, “project”, “goals”, “estimate”,
“potential”, “predict”, “may”, “will”, “could”, “intend”, and
variations of these terms or the negative of these terms and
similar expressions are intended to identify these forward-looking
statements. Moreover, forward-looking statements are subject to a
number of risks and uncertainties, many of which involve factors or
circumstances that are beyond the Company’s control. The Company’s
actual results could differ materially from those stated or implied
in forward-looking statements due to a number of factors, including
but not limited to: the Company’s ability to successful implement
training programs for the use of its products; the Company’s
ability to manufacture and produce product for its customers; the
Company’s ability to develop sales for its new product solution;
the acceptance of existing and future products; the availability of
funding to continue to finance operations; the complexity, expense
and time associated with sales to law enforcement and government
entities; the lengthy evaluation and sales cycle for the Company’s
product solution; product defects; litigation risks from alleged
product-related injuries; risks of government regulations; the
business impact of health crises or outbreaks of disease, such as
epidemics or pandemics; the impact resulting from geopolitical
conflicts and any resulting sanctions; the ability to obtain export
licenses for counties outside of the US; the ability to obtain
patents and defend IP against competitors; the impact of
competitive products and solutions; and the Company’s ability to
maintain and enhance its brand, as well as other risk factors
mentioned in the Company’s most recent annual report on Form 10-K,
quarterly report on Form 10-Q, and other SEC filings. These
forward-looking statements are made as of the date of this press
release and were based on current expectations, estimates,
forecasts, and projections as well as the beliefs and assumptions
of management. Except as required by law, the Company undertakes no
duty or obligation to update any forward-looking statements
contained in this release as a result of new information, future
events or changes in its expectations.
Wrap’s headquarters are in Tempe, Arizona.For more information,
please visit wrap.com.
Investor Relations
Contact:800.583.2652ir@wrap.com
Media Relations Contact:Leigh Anne Arnold5W
Public Relationswrap@5wpr.com
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Wrap
Technologies, Inc. |
|
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|
|
Consolidated Balance Sheets |
|
|
|
|
(unaudited -
dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
December
31, |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
4,934 |
|
|
$ |
5,330 |
|
|
|
|
|
|
Short-term investments |
|
10,000 |
|
|
|
13,949 |
|
|
|
|
|
|
Accounts receivable and contract assets |
|
4,425 |
|
|
|
2,830 |
|
|
|
|
|
|
Inventories, net |
|
5,816 |
|
|
|
3,975 |
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
658 |
|
|
|
775 |
|
|
|
|
|
|
Total current assets |
|
25,833 |
|
|
|
26,859 |
|
|
|
|
|
|
Property and equipment, net |
|
533 |
|
|
|
758 |
|
|
|
|
|
|
Operating lease right-of-use asset, net |
|
205 |
|
|
|
285 |
|
|
|
|
|
|
Intangible assets, net |
|
3,319 |
|
|
|
2,569 |
|
|
|
|
|
|
Goodwill, net |
|
1,611 |
|
|
|
- |
|
|
|
|
|
|
Other assets |
|
166 |
|
|
|
100 |
|
|
|
|
|
|
Total assets |
$ |
31,667 |
|
|
$ |
30,571 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
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|
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|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
1,546 |
|
|
$ |
1,419 |
|
|
|
|
|
|
Accounts liabilities |
|
1,128 |
|
|
|
1,463 |
|
|
|
|
|
|
Customer deposits |
|
2 |
|
|
|
- |
|
|
|
|
|
|
Deferred revenue |
|
189 |
|
|
|
166 |
|
|
|
|
|
|
Operating lease liability - short term |
|
116 |
|
|
|
108 |
|
|
|
|
|
|
Total current liabilities |
|
2,981 |
|
|
|
3,156 |
|
|
|
|
|
|
Long-term liabilities |
|
8,115 |
|
|
|
360 |
|
|
|
|
|
|
Total liabilities |
|
11,096 |
|
|
|
3,516 |
|
|
|
|
|
|
Stockholders' equity |
|
20,571 |
|
|
|
27,055 |
|
|
|
|
|
|
Total liabilities and stockholders' equity |
$ |
31,667 |
|
|
$ |
30,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Wrap
Technologies, Inc. |
|
Condensed
Consolidated Statements of Operations and Comprehensive
Loss |
|
(unaudited -
dollars In thousands, except share and per share
data) |
|
|
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|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
Product sales |
$3,248 |
|
|
$1,612 |
|
|
$4,897 |
|
|
$4,042 |
|
|
Other revenue |
|
383 |
|
|
|
89 |
|
|
|
647 |
|
|
|
422 |
|
|
Total
revenues |
|
3,631 |
|
|
|
1,701 |
|
|
|
5,544 |
|
|
|
4,464 |
|
|
Cost of
revenues |
|
1,454 |
|
|
|
790 |
|
|
|
2,347 |
|
|
|
2,430 |
|
|
Gross profit (loss) |
|
2,177 |
|
|
|
911 |
|
|
|
3,197 |
|
|
|
2,034 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (i): |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,317 |
|
|
|
3,586 |
|
|
|
12,604 |
|
|
|
11,952 |
|
|
Research and development |
|
610 |
|
|
|
1,236 |
|
|
|
2,683 |
|
|
|
4,210 |
|
|
Total
operating expenses |
|
4,927 |
|
|
|
4,822 |
|
|
|
15,287 |
|
|
|
16,162 |
|
|
Loss from
operations |
|
(2,750 |
) |
|
|
(3,911 |
) |
|
|
(12,090 |
) |
|
|
(14,128 |
) |
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
(33 |
) |
|
|
46 |
|
|
|
271 |
|
|
|
46 |
|
|
Net
loss |
($2,783 |
) |
|
($3,865 |
) |
|
($11,819 |
) |
|
($14,082 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per
basic and diluted common share |
($0.07 |
) |
|
($0.09 |
) |
|
($0.28 |
) |
|
($0.25 |
) |
|
Weighted
average common shares used to compute net loss per basic and
diluted common share |
|
42,652,481 |
|
|
|
41,086,285 |
|
|
|
41,914,512 |
|
|
|
40,955,234 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
Net
loss |
($2,783 |
) |
|
($3,865 |
) |
|
($11,819 |
) |
|
($14,082 |
) |
|
Net unrealized gain (loss) on short-term
investments |
|
- |
|
|
|
73 |
|
|
|
- |
|
|
|
62 |
|
|
Comprehensive loss |
($2,783 |
) |
|
($3,792 |
) |
|
($11,819 |
) |
|
($14,020 |
) |
|
|
|
|
|
|
|
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|
|
(i) includes
stock-based compensation expense as follows: |
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|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Selling, general and administrative |
($149 |
) |
|
$700 |
|
|
$1,404 |
|
|
$2,180 |
|
|
Research and development |
|
(53 |
) |
|
|
172 |
|
|
|
244 |
|
|
|
448 |
|
|
Total share-based compensation expense |
($202 |
) |
|
$872 |
|
|
$1,648 |
|
|
$2,628 |
|
|
|
|
|
|
|
|
|
|
|
Wrap
Technologies, Inc. |
|
Consolidated
Statements of Cash Flows |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended September 30, |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Cash
Flows From Operating Activities: |
|
|
|
|
|
|
Net
loss |
|
($11,819 |
) |
|
$ |
(14,082 |
) |
|
|
Adjustments
to reconcile net loss to net cash |
|
|
|
|
|
|
used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
673 |
|
|
|
574 |
|
|
|
Share-based compensation |
|
|
1,648 |
|
|
|
2,628 |
|
|
|
Warranty provision |
|
|
(8 |
) |
|
|
55 |
|
|
|
Non-cash lease expense |
|
|
80 |
|
|
|
75 |
|
|
|
Provision for doubtful accounts |
|
|
(48 |
) |
|
|
61 |
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(1,547 |
) |
|
|
1,576 |
|
|
|
Inventories |
|
|
(1,841 |
) |
|
|
(1,396 |
) |
|
|
Prepaid expenses and other current
assets |
|
|
117 |
|
|
|
268 |
|
|
|
Accounts payable |
|
|
1,871 |
|
|
|
(834 |
) |
|
|
Operating lease liability |
|
|
(80 |
) |
|
|
(65 |
) |
|
|
Customer deposits |
|
|
2 |
|
|
|
(43 |
) |
|
|
Accrued liabilities and other |
|
|
(319 |
) |
|
|
175 |
|
|
|
Warranty settlement |
|
|
(8 |
) |
|
|
(63 |
) |
|
|
Deferred revenue |
|
|
32 |
|
|
|
35 |
|
|
|
Net cash
used in operating activities |
|
|
(11,247 |
) |
|
|
(11,036 |
) |
|
|
|
|
|
|
|
|
|
Cash
Flows From Investing Activities: |
|
|
|
|
|
|
Purchase of
short-term investments |
|
|
(6,145 |
) |
|
|
(23,119 |
) |
|
|
Proceeds from maturities of short-term investments |
|
|
10,000 |
|
|
|
33,300 |
|
|
|
Capital expenditures for property and equipment |
|
|
(133 |
) |
|
|
(201 |
) |
|
|
Investment
in patents and trademarks |
|
|
(355 |
) |
|
|
(133 |
) |
|
|
Purchase of
intangible assets |
|
|
(2,321 |
) |
|
|
- |
|
|
|
Investment
in long-term deposits |
|
|
- |
|
|
|
- |
|
|
|
Proceeds
from long-term deposits |
|
|
(66 |
) |
|
|
(3 |
) |
|
|
Net cash provided by (used in) investing activities |
|
|
980 |
|
|
|
9,844 |
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities: |
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
|
- |
|
|
|
83 |
|
|
|
Proceeds
from "the Offering" |
|
|
9,871 |
|
|
|
|
|
Net cash
provided by financing activities |
|
|
9,871 |
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents |
|
|
(396 |
) |
|
|
(1,109 |
) |
|
|
Cash and cash equivalents, beginning of
period |
|
|
5,330 |
|
|
|
4,937 |
|
|
|
Cash
and cash equivalents, end of period |
|
$ |
4,934 |
|
|
$ |
3,828 |
|
|
|
|
|
|
|
|
|
|
Grafico Azioni Wrap Technologies (NASDAQ:WRAP)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Wrap Technologies (NASDAQ:WRAP)
Storico
Da Set 2023 a Set 2024