Byrna Technologies Q1 2025 Earnings Report

Byrna Technologies EPS Results

• Actual EPS: $0.07
• Consensus EPS: $0.02
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: N/A

Byrna Technologies Revenue Results

• Actual Revenue: $26.19 million
• Expected Revenue: $23.26 million
• Beat/Miss: Beat by +$2.94 million
• YoY Revenue Growth: N/A

Byrna Technologies Announcement Details

• Quarter: Q1 2025
• Date: 4/10/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, April 10, 2025
• Conference Call Time: 9:00AM ET

Byrna Technologies (NASDAQ:BYRN), a non-lethal defense technology company, provides non-lethal alternative solutions for law enforcement and private security. The company offers handheld personal security devices and shoulder-fired launchers without the need for background check or firearm license; and projectiles including chemical irritant, kinetic, and inert rounds. It offers self-defense aerosol products under the Byran Bad Guy Repellent brand; and accessories and related safety products, which includes carbon dioxide canisters, sighting systems, and holster under the Byran Banshee and Byran Shield brand, as well as Byrna-branded apparel. In addition, the company provides the products to the consumer market through Byrna e-commerce store and Amazon storefront, and network of local, regional and national outdoor and sporting goods stores, either directly or through distributors; and professional security market through Train the Trainer program and de-escalation methods. It operates in the United States, South Africa, Europe, South America, Asia, and Canada. The company was formerly known as Security Devices International, Inc. and changed its name to Byrna Technologies Inc. in March 2020. Byrna Technologies Inc. was incorporated in 2005 and is headquartered in Andover, Massachusetts.

Byrna Technologies Q1 2025 Earnings Call Transcript

Key Takeaways

• Verna reported Q1 revenue of $26.2 million, up 57% year-over-year, with a 61% gross margin and positive GAAP and adjusted EBITDA.
• Direct-to-consumer sales are shifting toward Amazon, which now drives 32.6% of U.S. DTC revenue and delivers an 18.5× ROAS versus 4.5× on Verna.com, and the company will launch “Buy with Prime” to cut shipping and payment fees.
• The Sportsman’s Warehouse pilot has expanded to 13 store-within-store locations plus 41 point-of-sale displays with live shooting lanes, and Verna opened three new branded retail stores this quarter, all showing strong conversion rates.
• Verna has onshored 87–92% of its launcher components to U.S. suppliers ahead of tariffs, stocking up inventory to cover 10–12 months and limiting cost pressures to ~16% versus a potential 29% increase.
• Serial production of the new compact launcher (MSRP $549.99) began March 19 at 1,000 units per day, with over 11,000 in stock and a target of >25,000 by the May 1 release, offering higher margins and a smaller form factor for concealed carry.

Presentation

[Operator]

Good morning, and welcome to Verna's Fiscal First Quarter twenty twenty five Earnings Conference Call. My name is Melissa, and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Brian Gantz and CFO, Lori Kearns. Following their remarks, we will open the call to questions. Earlier today, Berna released results for its fiscal first quarter ended 02/28/2025.

[Operator]

A copy of the press release is available on the company's website. Before turning the call over to Brian Gantz, Berner Technologies' Chief Executive Officer, I'll read the Safe Harbor statement. Some discussions held today include forward looking statements. Actual results could differ materially from statements made today. Please refer to Verna's most recent 10 ks and 10 Q filings for a more complete description of risk factors that could affect these projections and assumptions.

[Operator]

The company assumes no obligation to update forward looking statements as a result of new information, future events or otherwise. As this call will include references to non GAAP results, please see the press release in the Investors section of our website, ir.verna.com, for further information regarding forward looking statements and reconciliations of non GAAP results to GAAP results. Now, I'd like to turn the call over to Verna's CEO, Brian Ganz. Please go ahead, sir.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thank you, Melissa, and thank you everyone for joining us today. This morning, we filed our 10 Q with the SEC and issued a press release providing our financial results and business highlights for the fiscal first quarter ended 02/28/2025. I'll start today by turning the call over to our CFO, Laurie Kearns, who will review our financial results for the period. Following her remarks, I'll discuss the operational highlights that drove our 57% year over year revenue growth and continued GAAP and non GAAP EBITDA profitability for the quarter. I'll then offer insights into our strategy moving forward before we open the call to questions from our covering research analysts.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Laurie?

[Lauri Kearnes, CFO at Byrna Technologies]

Thank you, Brian, and good morning, everyone. Let's review our financial results for the first fiscal quarter ended 02/28/2025. Net revenue for the Q1 twenty twenty five was $26,200,000 a 57% increase from the $16,700,000 reported in the first fiscal quarter of twenty twenty four. This $9,500,000 increase is primarily due to continuing sales momentum, channel expansion and broader brand adoption. In Q1, direct to consumer revenues increased by $6,700,000 through verna.com and amazon.com compared to the prior year period.

[Lauri Kearnes, CFO at Byrna Technologies]

While both channels have grown, we are starting to see our amazon.com sales grow at a faster rate than our verna.com sales. Additionally, sales to dealers increased $1,900,000 or 78%, with the largest increase coming in the category of chain stores, which increased $700,000 This was primarily driven by sales to Bass Pro Shops. Gross profit for Q1 twenty twenty five was $15,900,000 or 61% of net revenue compared to $9,600,000 or 58% of net revenue for Q1 twenty twenty four. We continue to see the gross margin improvement due to our efforts in the middle of twenty twenty four focused on designing for manufacturability as well as increased production volumes. Operating expenses for Q1 twenty twenty five were $14,200,000 compared to $9,800,000 for Q1 twenty twenty four.

[Lauri Kearnes, CFO at Byrna Technologies]

The increase in operating expenses was driven by increased variable selling expenses, discretionary marketing spend and higher payroll costs. Higher payroll costs included an increase in employee benefits and the company four zero one match of 300,000 This was due to a combination of increased employees, increased healthcare costs and the company implementing a four zero one safe harbor matching program. Net income for Q1 twenty twenty five was $1,700,000 compared to $17,000 for Q1 twenty twenty four. This increase was driven by an overall increase in product sales. Due to the release of our valuation allowance in Q4 twenty twenty four, the company will transition into full taxpayer status in 2025 and we expect our effective tax rate to be approximately 23% for the year.

[Lauri Kearnes, CFO at Byrna Technologies]

Adjusted EBITDA, a non GAAP metric for Q1 twenty twenty five totaled $2,800,000 compared to $1,200,000 for Q1 twenty twenty four. Cash, cash equivalents and marketable securities at 02/28/2025 totaled $19,300,000 compared to $25,700,000 at 11/30/2024. The decrease reflects planned increases in inventory ahead of the compact launcher release and normal seasonal working capital movements. Inventory at 02/28/2025 totaled $23,200,000 compared to twenty million dollars at 11/30/2024. The company has no current or long term debt.

[Lauri Kearnes, CFO at Byrna Technologies]

I'll now turn it back to Brian.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thanks, Laurie. As our results demonstrate, the sales momentum from fiscal twenty twenty four continued into the first quarter of fiscal twenty twenty five as we successfully grew revenue by 50% year over year to $26,200,000 despite the first quarter being our traditionally slowest quarter. While it was not a sequential beat, sales for the first quarter were only 6% below our all time record of $28,000,000 in the fourth quarter of twenty twenty four. In 2023 and 2022, by comparison, Q1 sales were 4729% below Q4 sales respectively. As expected, sales softened post holiday due to consumer fatigue, a general Trump slump for firearms post election and waning consumer confidence.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

That said, February daily DTC sales were better than January daily DTC sales and March daily DTC sales were better than February daily DTC sales. This was despite the general market softness and the fact that some of our customers appear to be waiting for the release of our much anticipated compact launcher. On a related note, when speaking to investors recently at the ROTH Conference, several investors told me that they are using one of any one of a number of different apps to track Burns credit card sales. I would just urge people using these apps to also be tracking our sales on Amazon as an increasing portion of our DTC sales are taking place on Amazon where we are not paid by credit card. In Q1 of twenty twenty four, Amazon sales represented 19.3% of Berna's total U.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

S. DTC sales. By Q1 twenty twenty five, Amazon sales represented 26.9% of Verna's total U. S. DTC sales.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

And last month, Amazon sales climbed to 32.6% of Verna's total DTC sales. There are a number of reasons for Amazon's strong relative performance. However, the most important reason is that we are now treating Amazon as its own business center with a dedicated Amazon sales manager focusing exclusively on our Amazon business. With more than 50% of all online sales in The U. S.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Taking place on Amazon, we expect to see our Amazon sales continue to grow as a percentage of our total sales as Burner's brand awareness and the normalization of the non lethal product category continues to grow. Moreover, we are about to introduce Buy with Prime on our website. This will allow Amazon members to buy our products using their Amazon Prime account when checking out on the Berna website. This enables us to take advantage of Amazon's lower shipping rates and avoid credit card fees without paying Amazon's hefty selling fee. Initially, buy with Prime will be limited to select ammo and accessory SKUs.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

However, if successful, we will roll it out much more broadly. We are able to recoup the very low 3% fee through the lower freight costs and the elimination of credit card fees. While the normal fee on products sold through Amazon is 15%, I am somewhat agnostic as to whether we sell through Amazon or burner.com as our net margins are not really very different between the two channels. Since we sell a slightly different bundle on Amazon, gross profit margins on Amazon are 2.6% higher than burner.com gross profit margins. We also eliminated the credit card fees, Shopify fees and we save substantially on outbound freight when we sell on Amazon.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

In addition, our advertising costs were much lower. Last year, our ROAS on ads driving customers to bernard.com was 4.5x, while our ROAS or return on advertising spend on Amazon advertising was 18.5x, resulting in overall DTC ROAS of 5.4x for the company. As a result, on a net basis, our margins are not substantially lower on Amazon. On the last earnings call, I announced that we had just signed a letter of intent with Sportsman's Warehouse to roll out a burn a store within a store pilot program at 10 Sportsman's Warehouse locations across The United States. I am very pleased to announce that Sportsman's has agreed to expand this pilot program to 13 store within a store locations and more importantly to add an additional 41 stores where they will carry Berna's point of sale display and will convert existing archery ranges into Berna shooting lanes where potential customers can try shooting the Berna, bringing the total number of Sportsman's locations where customers can experience the Berna to 54.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

A few weeks ago, we celebrated the successful launch of the first Burna store within a store at Sportsman's Warehouse flagship store in Saratoga Springs, Utah near its corporate headquarters. The remaining 12 store within a store locations in our pilot program are scheduled to open by May 1, at which time Sportsman CEO, Paul Stone and I plan to officially announce the kickoff of this revolutionary business partnership where Sportsman combines experiential selling with the fastest growing segment in the personal self defense space, non lethal launchers. Each of these 13 installations will feature a dedicated area where customers can try shooting the launchers for themselves. As we say at Berna, shooting is believing. As most of you know, based on the experience of our own retail stores and our premier dealers, when a potential customer has an opportunity to shoot the Berna, conversion rates go up dramatically.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Across our company owned retail stores, conversion rates last month as measured by the number of sales divided by the number of individuals walking into a store range from 50% to 68%, Measured by sales as a percentage of groups walking into the stores, the conversion rates are even higher. This compares to a conversion rate of slightly over 1% for people visiting our website. To support this initiative, we are jointly funding the build out with Berna covering half of the approximately $15,000 cost per installation. And to ensure a strong launch, we're placing a Berna trained representative at each store with this store location during the rollout period. Similar to Apple's Genius Bar concept, these experts will ensure both Sportsman staff and customers receive comprehensive product information and support.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Moreover, as we have seen with the initial store, if we do not have a dedicated employee, the burn a store is often unmanned. The revenue potential is significant with this partnership. To put this in perspective, just one launcher sale per day per store could generate approximately $200,000 in annual revenue at each participating Sportsman's Warehouse location. If they can achieve five launcher sales per day per store, revenue could exceed $1,000,000 per store similar to our Las Vegas location. Sportsman's operates 146 stores nationwide.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

If their initial performance metrics are anywhere near what we are seeing with our own company owned stores, Sportsman's plans to continue expanding these store installations throughout their network. In parallel, Q1 saw the successful launch of three new Berna retail stores. These stores were opened in Scottsdale, Arizona Franklin, Tennessee just outside Nashville and Salem, New Hampshire. I'm proud to report that the final retail store, which is co located with our brand new ammo factory in Fort Wayne, Indiana has its grand opening scheduled for later today. These company owned retail locations complement both our Sportsman's partnership and our premier dealer program by allowing us to use our retail stores as a test bed to determine not only the look and feel of a store offering the Byrne experience, but also to develop the best strategies for bringing folks in the door and closing the sale.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

While our focus remains on capital efficient expansion through partnerships like the one with Sportsman's, we see significant long term potential in Burna branded stores, both for regions that are not well served by retail partners and to act as flagship locations where we can gather demographic data, test new products, run training programs, host celebrity appearances and engage in community outreach. Early results for these new stores have been encouraging. For their first full month of operations, average daily sales at the new locations range from slightly more than $1,000 a day to more than $1,700 a day. This is well above what we saw in Las Vegas in the first few months of operation in 2023. The 800 pound gorilla in the room, I think for everyone is how the recently imposed tariffs will affect Berna.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

I am happy to report that Berna is was well ahead of the curve. And as a result, we are better situated than 95% plus of all American companies when it comes to tariffs. Specifically, four years ago, when Berna was plagued with supply chain interruptions, I announced Berna's all truck strategy. This required our supply chain to have at least two sources for every launch or component with at least one of those sources being in The United States. Two Years ago, in the wake of Russia's Invasion Of Ukraine, I started to worry about the risks to our China supply chain if tensions were to flare up over Taiwan.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

At that time, I instructed our supply chain to get Berna completely out of China by 2025, so that we had no reliance on Chinese suppliers when it came to components for our flagship Berna pistols. As a result of these initiatives, we are no longer producing any of our critical components in China and we have domestic suppliers for virtually every single component. Last year, when it looked like Donald Trump had a chance of winning the twenty twenty four election, we took this a step further. It was widely telegraphed to the market that the Trump administration would institute significant tariffs if elected. At the time, only 11% of the components that go into a burner launcher were U.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

S. Sourced. The balance came from vendors scattered across the globe including Malaysia, Thailand, Taiwan, Indonesia, South Africa, Germany and Italy among others. So last year, I instructed our supply chain team to move virtually all of our supply chain to The U. S.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

By the time President Trump was elected, our U. S. Content had gone up to 32% to 34%. As of last week, when the first tariffs were implemented, our U. S.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Content was 87% to 92%. Now in fairness, moving our supply chain to The U. S. Has not been without cost. There was a reason we relied on foreign sources for most of our components in the first place.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Moving the manufacturer of our components from foreign suppliers to U. S. Suppliers added approximately 14% to the cost of the launcher. Tariffs on the remaining small amount of foreign sourced components add another 2% to the cost of launcher, meaning that we are looking at total cost increases around 16% from the middle of twenty twenty three. Had we done nothing, however, our bill of materials would be up 29% and significantly more if we were still manufacturing in China.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

At a 65% gross profit margin, this 16% cost increase, if it holds, would translate into a loss of approximately five margin points. The good news is that we were not sitting on our hands with regard to front running the tariffs. Once President Trump was elected, we ramped up component purchases and production well beyond our current requirements in anticipation of the widely telegraphed tariffs. Today, we have enough SD launchers and components in inventory to last us approximately ten months and enough LE launchers and components in inventory to last us more than one year. As a result, we do not expect to see any material margin hit from the tariffs for at least one year, if the tariffs are even still in place by then.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

In addition, the new compact launcher, which is due to be released shortly, has an MSRP $170 more than the Berna SD and $70 more than the Berna LE. Its cost however is somewhere between our two existing launchers. As a result, the margin on the Berna CL should be seven to eight percentage points higher than the margin on our current launchers. On top of this, by moving our supply chain to domestic suppliers closer to the factory, there are enormous soft cost benefits that we should realize. Every month, our reported gross profit margin is 200 to 300 basis points lower than our product gross profit margin, meaning that we are incurring 2% to 3% in unfavorable manufacturing variances.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Most of these variances result from out of spec components that either must be quarantined and returned or reworked if there's insufficient time to ship them all the way back to Asia to be reworked. There is a very real cost to this. What is worse, because we cannot inspect 100% of the more than 100,000 parts that pass through the quality control inspection point every single day. Out of spec parts can and sometimes do slip through processes, making their way to the production line. When this occurs, we end up with failures that are only caught at the end of the production line when product is tested.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

This drives down our first pass yield and pushes up our labor variance as these launchers then need to be torn down and rebuilt. By working with higher quality domestic Tier one suppliers operating closer to home, we can exert greater control over their quality procedures performing more frequent factory audits and working with them to ensure that parts are tested before they ever arrive at Berno. Well, this seems like a small thing. These soft costs rob us of two to three margin points every month, which we expect to save with the transition to U. S.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Sourced components. Additionally, by onshoring supply, we can reduce our inventory in transit, which adds millions of dollars to our inventory cost. By working with U. S. Suppliers, we should see a dramatic reduction in inventory in transit, and a corresponding increase in cash resulting in additional interest income.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Ammo production. In a significant milestone for our Made in America strategy, last month we initiated production of our payload rounds at our new ammunition manufacturing facility in Fort Wayne, Indiana, Strategically located just miles from our launcher production center, this facility has an annual capacity of 8,000,000 rounds. We did this in the nick of time. Up until now, all our payload ammo was produced in South Africa. So starting last week, a 10% across the board tariff went into effect and the proposed reciprocal tariff on South Africa is an additional 30%.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Fortunately, over the last several months, we crated up and shipped out all three ammo manufacturing machines that were running in South Africa to our new facility in Fort Wayne. One of these machines is already operational along with a new highly automated machine we had built for us in Germany. The other two machines are scheduled to come online this quarter. We also placed orders for four more specialized dosing and welding machines in preparation for the projected surge in ammunition demand following our CL launcher release. The CL's proprietary 61 caliber round will be exclusively available from Berna for the foreseeable future, creating a valuable ecosystem around our flagship product, which brings me to launcher production.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

I have some very exciting news. On March 19, we went into serial production of the highly anticipated and much coveted compact launcher. This is the most revolutionary non lethal launcher ever made. Modeled after a micro compact handgun similar in size to a SIG P365 or Glock forty three X, the launcher is 38% smaller and 36% lighter than the Berna SD, which is currently the smallest launcher on the market, yet it is just as powerful as measured in force per square inch as our most powerful launcher, the Berna LE. It is also 27% narrower than our current pistol launchers making it ideal for concealed carry.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

And there's one more thing, the smaller size makes it much easier for women or anyone with smaller hands to operate. From the back of the grip to the middle of the trigger, the new CL is only 2.5 inches compared with 3.25 inches for the SD and LE launchers. As a result, we believe that this new smaller and more powerful launcher will open up the critical women's market for burnout. I have to tell you getting this much stopping power into such a small piece of real estate is an engineering marvel. As of last night, we had 10,924 compact launchers in stock.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

We're already in production today, so I'm sure we're well over 11,000 launchers. We are producing at the rate of 1,000 launchers a day, six days a week. Our goal is to have more than 25,000 compact launchers in stock when we officially release it for sale. We'll be getting on the phone with all of our dealers right after this call to start taking initial orders. Sample launchers will be going out to our key partners and celebrity endorsers one week from today.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

The same time, we'll be sending sample launchers and ammunition to our Berna stores, premier dealers and the Sportsman's locations with Berna shooting ranges. This will allow people to try the launcher and place a pre order prior to the actual release date. The Berna website will be updated for the CL launcher that same day. Our plan is to start shipping to dealers on April '24. We will start taking DTC orders on April 24.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

However, nothing will be released to the public from either or its dealers until the official release date of May 1. While we do not know what the split will be between our various product offerings once the CL is released, We have ample Berna SD and LE launchers in stock and our plan is to produce only CL launchers for the foreseeable future until we can fulfill all the initial orders and build up adequate inventory. Once we know what the split is between the three models, our Fort Wayne factory has the flexibility to shift between CL, SD and LE models based on real time demand. We are extremely excited about the launch of the CL. We've been planning this for a number of years.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

The single biggest complaint that we've gotten has always been the size of our launcher and we think customers will be amazed with the new CL launcher. Okay. Tax rates. As Laurie mentioned, with the rollout of the CL launcher and the new Sportsman's Warehouse partnership, we anticipate continued success throughout the year. Accordingly, we project our effective tax rate will increase to approximately 23% this year as we transition into full taxpayer status.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

However, we strategically positioned the company to offset this impact through continued gross margin expansion, disciplined operating expense management and an increasingly favorable product mix now driven by our compact launcher rollout. In conclusion, we are well positioned to build on our performance in the first quarter. Our balance sheet remains strong. And with the upcoming release of the CL launcher, we expect cash to ramp very quickly. With momentum across our channels, scalable partnerships in place and a highly anticipated new product with a release date only weeks away, we remain confident in our ability to continue executing through 2025 and beyond.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

So that concludes my prepared remarks. Melissa, I'll turn it back to you.

[Operator]

Thank you. The company will now be taking questions from sell side analysts. Our first question comes from the line of Jeff Van Sinderen with B. Riley Securities. Please proceed with your question.

[Jeff Van Sinderen, Senior Analyst at B. Riley & Co]

Hi, good morning everyone and thank you for going through so much in your prepared comments. Just to clarify, I wanted to circle back on the Q2 early sales trend data. I think you mentioned that March grew sequentially from February. Wondering, if there's anything new in the April? And then I guess as you look at the realized data, can you give us any more color on how you're planning to manage and adapt ad spend in the near term, particularly around the new CL launcher?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Jeff, thank you very much for the question. Our ROAS is always lower in the beginning of the year. We hit our 5x ROAS because Q4 has such a strong ROAS. So our overall ROAS for the first quarter is in the mid-3s. This is not unusual.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

We would expect it to be there given that this is always our weakest quarter. That said, we do not think that we need very much advertising to promote the CL. We have over 700,000 opt in email subscribers at Berna. So we are initially going to be focused on selling the CL to our existing customer base as part of a very important refresh cycle. So advertising spend should be going down frankly, I've instructed it to really not initiate anything new until at least August, as we think most of the demand is going to be driven from our existing customer base through our email and website.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

By that point, when we want to start going after new customers for the CL, we'll be ramping our advertising spend back up, but that will be sort of as we get into the very, very profitable Q4 time period.

[Jeff Van Sinderen, Senior Analyst at B. Riley & Co]

Okay, great. And then, I know you mentioned the inventory build around some of that. It seems like there are fair number of moving parts there. But maybe you could just touch on the how the rollout will go. I know you mentioned various components there, whether it's through Sportsman's or your website.

[Jeff Van Sinderen, Senior Analyst at B. Riley & Co]

But can you just run us through kind of sequence of events and rollout of the new CL?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Okay. So it was important to us to have 25,000 to 30,000 units on the shelf before we released the CL, because there's very, very high anticipated demand and we didn't want to have the inventory depleted with the very first orders. So as I mentioned, our dealer team has already set up calls. They will be getting on the phone with all of our dealers. Some of the big stores will be individually like Bass Pro.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Others will be in groups. We'll be talking to all the premier dealers as a group. And we will start taking their orders today. We have allocated 10,000 of the 30,000 launchers to our dealers. Those launchers will start going out the door at the Berna factory on April 21.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

By the twenty fourth, we should have shipped all dealer orders so that they have time to get them and stock them before the May 1 release date. On April 15, we will be sending out overnight a box of two launchers, an orange one and a black one to all of our celebrity endorsers like Sean Hannity, Glenn Beck, etcetera, and to a number of our YouTube influencers as well as to every store that offers a shooting experience. So people can go and try out the burner and put orders in before the actual release date. So there should be 50 something stores where people can try the burner if they would like. We will start actually taking orders online.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

We'll accept preorders starting April 17. We'll be accepting orders online starting April 24. And then May 1, we will start shipping the burners. This would give us time to ship all 30,000 burners during the month of May, if necessary.

[Jeff Van Sinderen, Senior Analyst at B. Riley & Co]

Okay. And then if I could just squeeze in one more, I know this is a little bit of a difficult question at this moment, but all else being equal, based on everything that you're seeing today, by the way, you guys have done an amazing job avoiding tariffs. Would you think that Q1 was probably the low point in revenues for the year? Do you still think that traditionally holds true this year?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

You're right. It's a very difficult question. If you're asking me, my personal opinion is yes, that was the low point of the year. I think like you everybody wants to see how this CL launcher does. Every indication that we have is that this is going to be an enormous home run.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

It is the reason that we didn't release it when there were currently 11,000 launchers in stock. It's the reason we're holding off because we don't want to have a bad customer experience where we ship the first batch out and then there's no launches for anybody else. So we anticipate that this will be a sequential growth year where every quarter will be bigger than the next.

[Jeff Van Sinderen, Senior Analyst at B. Riley & Co]

Excellent. Thank you for taking my questions.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thank you, Jeff.

[Operator]

Thank you. Our next question comes from the line of Matt Koranda with ROTH Capital Partners. Please proceed with your question.

[Joseph Reagor, Managing Director at Roth Capital Partners, LLC]

Hi, it's Joseph on for Matt today. Just going back into your Sportsman shop in shops, could you remind us how many there is currently up and running? And what are the learnings that you guys have for this, these types of stores versus your own branded stores? Additionally, for the potential of the 30 store expansion by August, what do you need to see from these first stores to expand to those additional 30?

[Lauri Kearnes, CFO at Byrna Technologies]

Hi, Joseph. It's Laurie. Thanks for the question. So currently, there is one store operational. The rest are going to be operational, those first thirteen, by the May 1.

[Lauri Kearnes, CFO at Byrna Technologies]

So they'll start rolling on over the next few weeks to have those operational. Additionally, we said there was the 41 additional stores that will just have our point of sale display, but we'll have a shooting experience as well. So I think what we need to see is we just need to see that there's momentum. We need to see that there's interest. They opened the first store and had sales the first day of that first store opening.

[Lauri Kearnes, CFO at Byrna Technologies]

So I think we're off to a good start there. We expect these to continue to roll out. They've got the foot traffic that our stores we struggle to get the foot traffic in to begin with as we open our stores, and they've already got that foot traffic. So it's really getting the interest. And we believe having someone in the store who is that burn of genius, who understands they can get people interested, they can have the conversations, encourage them into the shooting experience lane and that will help drive the sales.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Yes. Joseph, just to reiterate, Laurie brought up a very, very good point here. The biggest issue that we have in growing our own stores is foot traffic. Our conversion rate remains very, very consistent. Our AOV, average order value remains very, very consistent.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

We know if we can get people into the store, we can convert them at the rate of around 80% based on groups, but even on individuals between 5070%. Sportsman has hundreds of people visiting each of its stores every day. When they hear the bang, bang, bang of these rounds being fired and draws their attention to it, if we can get people into that range, we know we will convert them. That I'm certain of. So we're extremely excited about this as are the folks from Sportsman's.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

And I think this is the reason that we want to put a Virgin Genius in every store because we think that there's going to be a lot of interest from the Sportsman's customers.

[Joseph Reagor, Managing Director at Roth Capital Partners, LLC]

Got it. Thank you. And then just for an additional question, just talking about your point of sale displays, How is that going to differ in terms of the shooting lanes? Is it will it be the same layout for what you have in your shop in shops? Or will there be any significant differences there?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Well, for the 13 stores, the idea is to create a standalone Burna shooting experience in the middle of the store. And we have developed a number of shooting pods, which we can assemble right in the middle of the store. These pods have glass along the side, so people can see the shooter, they can hear what's going on. There's a counter and flat walls and the whole a true store within a store. With the point of sale displays, this is going to be a kiosk that has approximately 8,000 of burner product on it.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

There's not going to be anybody devoted to selling Berna. And if somebody is interested and they ask, they'll be shown the archery range and they'll be able to try the Berna. So it will provide an opportunity for a shooting experience, but it will not be drawing people into the shooting experience in the same way that the store within a store would. My guess is that these 41, they're going have the point of sale display. If we continue to roll out, they will probably be the next 41 to be converted into stores within a store.

[Joseph Reagor, Managing Director at Roth Capital Partners, LLC]

All right. Thank you, Brian. We'll go ahead and take the rest offline and congrats on another good quarter.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thank you.

[Operator]

Thank you. Our next question comes from the line of John Hickman with Ladenburg Thalmann. Please proceed with your question.

[Jon Hickman, Managing Director at Ladenburg Thalmann]

Hey, Brian. Most of my questions were just answered. I had questions about the difference between the stores in the store and then just the kiosk. But I would maybe I missed this earlier, but what's the MSRP going to be on this new CL versus the current products?

[Lauri Kearnes, CFO at Byrna Technologies]

Sure. Hi, John, it's Laurie. So the new CL, the base price will be 549.99 The LE is currently at $479.99 and the LE is at $379

[Jon Hickman, Managing Director at Ladenburg Thalmann]

Okay. And then the ammo, is the same is there the same margin on the ammo? Is it any different?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Know it's Yes. Ammo is slightly smaller. 61 caliber is 27% smaller, but it really doesn't cost dramatically different. Maybe there's a few pennies difference in the cost of the raw materials, but insignificant. We are selling the same quantities at the same prices, whether it's 61 caliber or 68 caliber.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

But the interesting thing is with 68 caliber, we know that a lot of people buy cheap Chinese ammo to because it's much less expensive than high quality burner ammo for the 68 caliber. For 61, at least for the foreseeable future, there is nobody else that makes a 61 caliber round. We will capture 100% of the ammo, probably for the rest of this year and maybe well into next year.

[Jon Hickman, Managing Director at Ladenburg Thalmann]

And the new launcher comes in orange and black or?

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

It comes in orange and black currently. Pink will be released later this year, and we intend to bring out other colors. The other thing with this launcher is it can be cerakoted unlike our earlier launchers, which means we can make virtually any color, we can do camouflage launchers, there's a huge amount of things that we can do. In fact, there's a whole array of very, very exciting accessories that we are not bringing out with the initial launch of the CL, but we'll be rolling out so that we can go back to people that have made initial purchases with an opportunity for them to add red dots and special holsters and special grips for the launcher. So it is a launcher that can be much more easily customizable than our current launchers.

[Jon Hickman, Managing Director at Ladenburg Thalmann]

Okay. And then one last question. The CO2 cartridge, is that still the Same

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

eight grams. So that CO2 that we use for the SD will also work for the CL.

[Jon Hickman, Managing Director at Ladenburg Thalmann]

Okay. Thank you. And nice quarter. Appreciate all the commentary.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thank you, John.

[Lauri Kearnes, CFO at Byrna Technologies]

Thanks, John.

[Operator]

Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Gantz for any final comments.

[Bryan Ganz, CEO, President & Director at Byrna Technologies]

Thank you, Melissa, and thank you everyone. We really appreciate your continued interest in the company and your continued support. I look forward to catching up with many of you after this call.

[Operator]

Thank you. This concludes today's call for Berna's fiscal fourth quarter and full year twenty twenty four conference call. You may now disconnect your lines. Thank you for your participation.

Participants

Executives

• Bryan Ganz, CEO, President & Director
• Lauri Kearnes, CFO

Analysts

• Jeff Van Sinderen, Senior Analyst at B. Riley & Co
• Joseph Reagor, Managing Director at Roth Capital Partners, LLC
• Jon Hickman, Managing Director at Ladenburg Thalmann