Revenue Increases by 98% Year-Over-Year to
$16.7 Million
Company Achieves GAAP Profitability Following
Continued Success of Celebrity Endorsement Strategy
ANDOVER,
Mass., April 5, 2024 /PRNewswire/
-- Byrna Technologies Inc. ("Byrna" or the
"Company") (Nasdaq: BYRN), a personal defense technology
company specializing in the development, manufacture, and sale of
innovative less-lethal personal security solutions, today reported
select financial results for its fiscal first quarter ("Q1 2024")
ended February 29, 2024.
Fiscal First Quarter 2024 and Recent Operational
Highlights
- Continued successful partnerships with Sean Hannity, Judge Jeanine Pirro, Bill
O'Reilly, and Glenn Beck as
Byrna's celebrity influencers. The celebrity endorsement program
continues to deliver more than a 5X return on ad spend (ROAS),
driving strong year-over-year growth and record Q1 results.
- Started advertising on cable, satellite, and over-the-top (OTT)
television to reach new potential customers.
- As a result of the celebrity endorsement program and television
advertising, Byrna increased daily average web sessions to 33,468
in Q1 2024, a year-over-year increase of 33.4% from 25,093 in Q1
2023.
- Secured a commitment from the Córdoba Provincial Police in
Argentina to purchase 10,000 Byrna
launchers through Byrna's Argentine distributor, expanding Byrna's
presence in South America.
- Added 25% more production workers at Byrna's Fort Wayne
manufacturing facility, increasing launcher production capacity
from 10,000 to 12,500 units per month during a single shift, in
response to rising demand resulting from the Company's celebrity
endorsement marketing campaign.
- Introduced the Byrna Universal Kit (legal in all 50 states and
Canada) for the Byrna LE and Byrna
SD launchers, simplifying online checkout for new customers and
cutting in half the number of SKUs that the Company must carry in
inventory.
Fiscal First Quarter 2024
Financial Results
Results compare the 2024 fiscal
first quarter ended February 29, 2024
to the 2023 fiscal first quarter ended February 28, 2023 unless otherwise
indicated.
Net revenue for Q1 2024 was $16.7 million, compared to $8.4 million in the fiscal first quarter of 2023
("Q1 2023"). The 98% year-over-year increase is primarily due to
the transformational shift in Byrna's advertising strategy that the
Company started to implement last September.
Gross profit for Q1 2024 was $9.6
million (58% of net revenue), up from $5.2 million (62% of net revenue) in Q1 2023. The
increase in gross profit was driven by the increase in sales as
previously mentioned.
Operating expenses for Q1 2024 were $9.8 million, compared to $7.2 million for Q1 2023. The increase in
operating expenses was primarily driven by an increase in marketing
spend as part of the Company's new celebrity endorsement and
television advertising strategy.
Net income (loss) for Q1 2024 was $17,000 compared to a loss of approximately
$(2.2) million for Q1 2023. The
improvement in net income was primarily due to the increase in
sales associated with new marketing campaigns.
Adjusted EBITDA1, a non-GAAP metric
reconciled below, for Q1 2024 totaled $1.2
million, compared to $(0.6)
million for Q1 2023.
Cash and cash equivalents at February 29, 2024 totaled $24.2 million compared to $20.5 million at November
30, 2023. Inventory at February 29,
2024 totaled $12.1 million
compared to $13.9 million at
November 30, 2023. The Company has no
current or long-term debt.
__________________________
|
1 See
non-GAAP financial measures at the end of this press release for a
reconciliation and a discussion of non-GAAP financial measures.
|
Management Commentary
Byrna CEO Bryan Ganz stated: "2024 has gotten off to an
extremely strong start with the Company posting record sales of
$16.7 million in Q1, traditionally
our slowest quarter. The momentum of our influencer marketing
strategy continues unabated, and the addition of Glenn Beck to our roster in January further
improved our results. Coupled with the kickoff of our television
advertising strategy, our reimagined advertising strategy is
driving robust demand across all DTC channels. This growing brand
recognition is also driving growth across the non-ecommerce
segments of our business. This includes both dealer sales and the
international public safety sector, where our products are
benefitting from both increased Byrna brand awareness and the
growing public support for less-lethal weapons generally.
"Most importantly, we are seeing strong improvement in all our
key performance metrics including sessions, average order value,
and conversion rate. Specifically, average daily sessions for the
quarter came in at 33,468, up 33% from the same period last year.
Our conversion rate also climbed, reaching 1.04%, compared to 0.80%
in the prior year period. Finally, our average order value (AOV) of
$348.63 was up 10% compared to the
same period last year. In combination, the solid improvement in all
three of these critical areas resulted in order growth on Byrna.com
of 108%, as orders on Byrna.com grew from $5.4 million in Q1 2023 to $11.2 million in Q1 2024. We saw the same thing
on Amazon.com as a strong increase in conversion rate drove sales
90% from $1.4 million in Q1 2023 to
$2.6 million in Q1 2024.
"Another important metric is our first-time customer percentage.
Mirroring the trend from the fourth quarter of 2023, over 70% of
daily orders are from first-time customers versus 56% in Q1 of
2023. These first-time customers, who tend to have a higher average
order value (AOV) than returning ones, also give us the opportunity
to market additional ammo and accessories to them as they begin
their Byrna journey. Our targeted email marketing campaigns for
first-time buyers, offering special deals on ammo and accessories,
continue to yield significant benefits.
"In addition to our digital efforts and celebrity endorsement
channels, we recently started advertising on TV, targeting both
cable and satellite audiences through smaller, yet well-known
networks with millions of viewers. This new initiative is part of
our broader strategy to increase brand awareness and reach, and we
expect to increase our expenditures on television advertising in
the coming year as we continue to amplify the Byrna message.
"To meet the increased demand and maintain our growth
trajectory, we started ramping up our launcher production at the
beginning of February, from 10,000 units a month to 12,500 units a
month. Since this last announcement, Byrna continued to ramp
production to 15,000 units a month on a single shift. In fact,
during the month of March Byrna produced over 14,000 launchers in
its Fort Wayne manufacturing facility."
CFO Retirement
Byrna is announcing today that its
Chief Financial Officer, David
North, will be retiring later this year. Since joining Byrna
in 2020, Mr. North has played a pivotal role in steering the
financial course of the Company, leading Byrna to unprecedented
growth and operational success.
Under Mr. North's financial stewardship, Byrna achieved
remarkable milestones. He was instrumental in growing the Company's
sales from under $1 million in 2019
to reaching the record levels witnessed today. His strategic
foresight and leadership were key in Byrna's successful uplisting
to the Nasdaq in 2020. In 2021, Mr. North spearheaded a
$60 million capital raise, providing
the essential resources needed for Byrna's expansion and the
acquisition of multiple businesses, including Mission Less Lethal,
Ballistipax, and Fox Labs. Furthermore, his efforts to restructure
and enhance the Company's finance and accounting functions have set
a solid foundation for sustained financial health and operational
efficiency.
To ensure a seamless transition, the Company has engaged a
leading executive search firm to identify top-tier talent and
secure a successor who will uphold Mr. North's high standards. Mr.
North has graciously agreed to continue his association with Byrna
as CFO until his successor is fully integrated into the role.
Subsequently, he will remain involved as an outside consultant,
ensuring continuity and the preservation of his insights and
guidance.
Byrna is committed to maintaining the financial stability and
growth trajectory that Mr. North has helped establish. As the
Company embarks on this transition, it expresses its thanks to
David North for his invaluable
contributions and wishes him a fulfilling retirement.
Conference Call
The Company's management will host a
conference call today, April 5, 2024,
at 9:00 a.m. Eastern time
(6:00 a.m. Pacific time) to discuss
these results, followed by a question-and-answer period.
Toll-Free Dial-In: 877-709-8150
International Dial-In: +1 201-689-8354
Confirmation: 13745007
Please call the conference telephone number 5-10 minutes prior
to the start time of the conference call. An operator will register
your name and organization. If you have any difficulty connecting
with the conference call, please contact Gateway Group at
949-574-3860.
The conference call will be broadcast live and available for
replay here and via the Investor Relations section of Byrna's
website.
About Byrna Technologies Inc.
Byrna is a technology
company specializing in the development, manufacture, and sale of
innovative less-lethal personal security solutions. For more
information on the Company, please visit the corporate
website here or the Company's investor relations
site here. The Company is the manufacturer of the Byrna® SD
personal security device, a state-of-the-art handheld CO2 powered
launcher designed to provide a less-lethal alternative to a firearm
for the consumer, private security, and law enforcement markets. To
purchase Byrna products, visit the Company's e-commerce store.
Forward-Looking Statements
This news release
contains "forward-looking statements" within the meaning of the
securities laws. All statements contained in this news release,
other than statements of current and historical fact, are
forward-looking. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans," "expects,"
"intends," "anticipates," and "believes" and statements that
certain actions, events or results "may," "could," "would,"
"should," "might," "occur," or "be achieved," or "will be taken."
Forward-looking statements include descriptions of currently
occurring matters which may continue in the future. Forward-looking
statements in this news release include but are not limited to our
statements related to our ability to continue to grow web traffic
and sales as a result of our celebrity endorser marketing strategy,
our ability to continue to expand our presence in the law
enforcement market, our ability to further expand production
capacity, our ability to pursue our growth plan with existing cash
resources, our ability to appoint a successor Chief Financial
Officer and to engage Mr. North as a consultant, our ability to
grow brand recognition, and the potential for increased television
advertising expenditures. Forward-looking statements are not, and
cannot be, a guarantee of future results or events. Forward-looking
statements are based on, among other things, opinions, assumptions,
estimates, and analyses that, while considered reasonable by the
Company at the date the forward-looking information is provided,
inherently are subject to significant risks, uncertainties,
contingencies, and other factors that may cause actual results and
events to be materially different from those expressed or
implied.
Any number of risk factors could affect our actual results
and cause them to differ materially from those expressed or implied
by the forward-looking statements in this news release, including,
but not limited to, disappointing market responses to current or
future products or services; prolonged, new, or exacerbated
disruption of our supply chain; the further or prolonged disruption
of new product development; production or distribution disruption
or delays in entry or penetration of sales channels due to
inventory constraints, competitive factors, increased
transportation costs or interruptions, including due to weather,
flooding or fires; prototype, parts and material shortages,
particularly of parts sourced from limited or sole source
providers; determinations by third party controlled distribution
channels, including Amazon, not to carry or reduce inventory of the
Company's products; determinations by advertisers or social media
platforms, or legislation that prevents or limits marketing of some
or all Byrna products; the loss of marketing partners; increases in
marketing expenditure may not yield expected revenue increases;
potential cancellations of existing or future orders including as a
result of any fulfillment delays, introduction of competing
products, negative publicity, or other factors; product design or
manufacturing defects or recalls; litigation, enforcement
proceedings or other regulatory or legal developments; changes in
consumer or political sentiment affecting product demand;
regulatory factors including the impact of commerce and trade laws
and regulations; and future restrictions on the Company's cash
resources, increased costs and other events that could potentially
reduce demand for the Company's products or result in order
cancellations. The order in which these factors appear should not
be construed to indicate their relative importance or priority. We
caution that these factors may not be exhaustive; accordingly, any
forward-looking statements contained herein should not be relied
upon as a prediction of actual results. Investors should carefully
consider these and other relevant factors, including those risk
factors in Part I, Item 1A, ("Risk Factors") in the Company's most
recent Form 10-K and Part II, Item 1A ("Risk Factors") in the
Company's most recent Form 10-Q, should understand it is impossible
to predict or identify all such factors or risks, should not
consider the foregoing list, or the risks identified in the
Company's SEC filings, to be a complete discussion of all potential
risks or uncertainties, and should not place undue reliance on
forward-looking information. The Company assumes no obligation to
update or revise any forward-looking information, except as
required by applicable law.
-Financial Tables to Follow-
BYRNA TECHNOLOGIES
INC.
Condensed Consolidated Statements of Operations and Comprehensive
Loss
(Amounts in thousands except share and per share data)
(Unaudited)
|
|
|
|
For the Three Months
Ended
|
|
|
|
February
29,
|
|
|
February
28,
|
|
|
|
2024
|
|
|
2023
|
|
Net revenue
|
|
$
|
16,654
|
|
|
$
|
8,411
|
|
Cost of goods
sold
|
|
|
7,015
|
|
|
|
3,165
|
|
Gross profit
|
|
|
9,639
|
|
|
|
5,246
|
|
Operating
expenses
|
|
|
9,803
|
|
|
|
7,240
|
|
LOSS FROM
OPERATIONS
|
|
|
(164)
|
|
|
|
(1,994)
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
Foreign currency
transaction loss
|
|
|
(58)
|
|
|
|
(136)
|
|
Interest
income
|
|
|
280
|
|
|
|
143
|
|
Loss from joint
venture
|
|
|
(42)
|
|
|
|
(167)
|
|
Other income
(expense)
|
|
|
1
|
|
|
|
(58)
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
|
|
17
|
|
|
|
(2,212)
|
|
Income tax
benefit
|
|
|
—
|
|
|
|
59
|
|
NET INCOME
(LOSS)
|
|
|
17
|
|
|
|
(2,153)
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment for the period
|
|
|
(115)
|
|
|
|
(585)
|
|
COMPREHENSIVE INCOME
(LOSS)
|
|
$
|
(98)
|
|
|
$
|
(2,738)
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
|
$
|
0.00
|
|
|
$
|
(0.10)
|
|
Diluted net income
(loss) per share
|
|
$
|
0.00
|
|
|
$
|
(0.10)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number
of common shares outstanding - basic
|
|
|
22,035,249
|
|
|
|
21,860,200
|
|
Weighted-average number
of common shares outstanding - diluted
|
|
|
22,838,827
|
|
|
|
21,860,200
|
|
BYRNA TECHNOLOGIES
INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
|
|
|
|
February
29,
|
|
|
November
30,
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
24,176
|
|
|
$
|
20,498
|
|
Accounts receivable,
net
|
|
|
1,536
|
|
|
|
2,945
|
|
Inventory,
net
|
|
|
12,128
|
|
|
|
13,890
|
|
Prepaid expenses and
other current assets
|
|
|
1,131
|
|
|
|
868
|
|
Total current
assets
|
|
|
38,971
|
|
|
|
38,201
|
|
LONG TERM
ASSETS
|
|
|
|
|
|
|
|
|
Intangible assets,
net
|
|
|
3,510
|
|
|
|
3,583
|
|
Deposits for
equipment
|
|
|
1,269
|
|
|
|
1,163
|
|
Right-of-use asset,
net
|
|
|
1,688
|
|
|
|
1,805
|
|
Property and equipment,
net
|
|
|
3,591
|
|
|
|
3,803
|
|
Goodwill
|
|
|
2,258
|
|
|
|
2,258
|
|
Loan to joint
venture
|
|
|
1,431
|
|
|
|
1,473
|
|
Other assets
|
|
|
24
|
|
|
|
28
|
|
TOTAL ASSETS
|
|
$
|
52,742
|
|
|
$
|
52,314
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
5,131
|
|
|
$
|
6,158
|
|
Operating lease
liabilities, current
|
|
|
641
|
|
|
|
644
|
|
Deferred revenue,
current
|
|
|
2,595
|
|
|
|
1,844
|
|
Total current
liabilities
|
|
|
8,367
|
|
|
|
8,646
|
|
LONG TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
Deferred revenue,
non-current
|
|
|
71
|
|
|
|
91
|
|
Operating lease
liabilities, non-current
|
|
|
1,135
|
|
|
|
1,258
|
|
Total
liabilities
|
|
|
9,573
|
|
|
|
9,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001
par value, 5,000,000 shares authorized, no shares issued
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.001
par value, 50,000,000 shares authorized. 24,375,754
shares issued and 22,209,767 shares outstanding as of February 29,
2024 and,
24,168,014 shares issued and 22,002,027 outstanding as of November
30, 2023
|
|
|
24
|
|
|
|
24
|
|
Additional paid-in
capital
|
|
|
131,374
|
|
|
|
130,426
|
|
Treasury stock
(2,165,987 shares purchased as of February 29, 2024 and
November 30, 2023)
|
|
|
(17,500)
|
|
|
|
(17,500)
|
|
Accumulated
deficit
|
|
|
(69,558)
|
|
|
|
(69,575)
|
|
Accumulated other
comprehensive loss
|
|
|
(1,171)
|
|
|
|
(1,056)
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders'
Equity
|
|
|
43,169
|
|
|
|
42,319
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
52,742
|
|
|
$
|
52,314
|
|
Non-GAAP Financial Measures
In addition to providing financial measurements based on
generally accepted accounting principles in the United States (GAAP), we provide an
additional financial metric that is not prepared in accordance with
GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA.
Management uses this non-GAAP financial measure, in addition to
GAAP financial measures, to understand and compare operating
results across accounting periods, for financial and operational
decision making, for planning and forecasting purposes and to
evaluate our financial performance. We believe that this non-GAAP
financial measure helps us to identify underlying trends in our
business that could otherwise be masked by the effect of certain
expenses that we exclude in the calculations of the non-GAAP
financial measure.
Accordingly, we believe that this non-GAAP financial measure
reflects our ongoing business in a manner that allows for
meaningful comparisons and analysis of trends in the business and
provides useful information to investors and others in
understanding and evaluating our operating results, enhancing the
overall understanding of our past performance and future
prospects.
This non-GAAP financial measure does not replace the
presentation of our GAAP financial results and should only be used
as a supplement to, not as a substitute for, our financial results
presented in accordance with GAAP. There are limitations in the use
of non-GAAP measures, because they do not include all the expenses
that must be included under GAAP and because they involve the
exercise of judgment concerning exclusions of items from the
comparable non-GAAP financial measure. In addition, other companies
may use other non-GAAP measures to evaluate their performance, or
may calculate non-GAAP measures differently, all of which could
reduce the usefulness of our non-GAAP financial measure as a tool
for comparison.
Adjusted EBITDA
Adjusted EBITDA is defined as net (loss) income as
reported in our condensed consolidated statements of operations and
comprehensive (loss) income excluding the impact of
(i) depreciation and amortization; (ii) income tax
provision (benefit); (iii) interest income
(expense); (iv) stock-based compensation expense, (v)
impairment loss, and (vi) one time, non-recurring other expenses or
income. Our Adjusted EBITDA measure eliminates potential
differences in performance caused by variations in capital
structures (affecting finance costs), tax positions, the cost and
age of tangible assets (affecting relative depreciation expense)
and the extent to which intangible assets are identifiable
(affecting relative amortization expense). We also exclude certain
one-time and non-cash costs. Reconciliation of Adjusted EBITDA to
net (loss) income, the most directly comparable GAAP measure, is as
follows (in thousands):
|
|
For the Three Months
Ended
|
|
|
|
February
29,
|
|
|
February
28,
|
|
|
|
2024
|
|
|
2023
|
|
Net Income
(Loss)
|
|
$
|
17
|
|
|
$
|
(2,153)
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
(280)
|
|
|
|
(143)
|
|
Income tax
benefit
|
|
|
—
|
|
|
|
(59)
|
|
Depreciation and
amortization
|
|
|
338
|
|
|
|
276
|
|
Non-GAAP
EBITDA
|
|
|
75
|
|
|
|
(2,079)
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
938
|
|
|
|
1,464
|
|
Severance/Separation
|
|
|
163
|
|
|
|
—
|
|
Non-GAAP adjusted
EBITDA
|
|
$
|
1,176
|
|
|
$
|
(615)
|
|
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SOURCE Byrna Technologies Inc.