Byrna Technologies Inc. (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.
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.
