Byrna Technologies, Inc.

Greetings and welcome to the Berna Technologies Fiscal Second Quarter 2021 Earnings Conference Call and Webcast. As a reminder, this conference call is being recorded and all participants are in a listen-only mode. Before turning the call over to Brian Ganz, Berna Technologies Chief Executive Officer, I will read the Safe Harbor Statement. Some discussions made today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Berna's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligations 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 investor section of our website, ir.berna.com, for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. I'll now turn the call over to Mr. Brian Gans. Sir, please go ahead.

Thank you very much. Good morning, everyone, and welcome to Berna's second quarterly earnings call for fiscal 2021. The second quarter was a very busy time at Berna, marked by several important milestones. First, we reported record revenues of $13.4 million. Second, we had record production revenues producing a total of 28,000 Burna HD launchers in our Fort Wayne and South African production facilities. Third, this was our first quarter of positive net income on a GAAP basis. We reported GAAP net income of approximately $2 million. Our CFO, David North, will discuss our financial performance in more detail in a few minutes. We reported our third consecutive quarter of non-GAAP adjusted net income of approximately $3 million, up from $421,000 in Q1 and $221,000 in Q4 of last year. In addition to these financial milestones, there were a number of strategic milestones. In May, we completed a strategic acquisition of the assets of Mission Less Lethal, one of the leading US manufacturers of 68-caliber shoulder-fired non-lethal launchers for law enforcement and other security professionals. This acquisition broadens our product offering, opens new markets, and creates cross-selling opportunities. As part of the acquisition, we acquired in perpetuity the exclusive right for use in the non-lethal market of all IP underpinning the assets acquired. This IP, coupled with Burna's existing IP portfolio, creates a meaningful barrier to anyone looking to enter our market segment. On the capital markets front, there were two events of note. In early May, our common stock began trading on the NASDAQ capital market. We expect the NASDAQ listing will help elevate Burna's public profile. It will enable us to expand our shareholder base and, as a result, improve trading liquidity. On Monday, Berna was added to the Russell 3000 and Russell 2000 indices as part of the annual Russell reconstitution. This quarter's accomplishments are the result of extremely hard work and total commitment, unrivaled effort by the entire Berna team, from our factory workers and distribution personnel, our customer service representatives, our R&D team, supply chain professionals, and senior management, All of whom, I will tell you, have made personal sacrifices for the betterment of Berna because they believe in our mission. I would like also to thank the more than 120,000 members of Berna Nation for their enthusiastic support. And finally, I want to thank our loyal investors for their belief in Berna and everything that we do to save lives on a daily basis. Now I'm going to hand the call over to David to discuss our second quarter financial performance. Then I'll come back to discuss some of our new initiatives and recent developments in more detail and to take questions.

Thanks, Brian, and thanks, everyone, for joining us. Now I'd like to review the financial results for the fiscal second quarter ended May 31, 2021, provide an update on the company's liquidity position, and discuss the company's full year 2021 outlook. Revenues for the second quarter 2021 were $13.4 million compared to $1.2 million in the second quarter of 2020. The year-over-year increase was driven by increased demand for our Berna HD personal security device, enhanced market awareness of our brand, and improved production volume following the opening of our manufacturing facility in Fort Wayne, Indiana in October 2020. As for gross profit, second quarter gross profit rose to $7.6 million representing a 56.4% gross profit margin in comparison to the $516,000 gross profit and 43.4% gross profit margin that we reported in the prior year period. The increase in gross profit dollars and margin were driven by the higher sales and production volumes referenced earlier. Gross margin is expected to moderate in the third quarter as we will begin to fulfill more dealer orders, which are lower margin than our e-commerce orders. That being said, we expect gross margin to benefit in the fourth quarter and beyond from introduction of new higher margin products such as the Berna SD, Berna LE, and shoulder-fired launchers acquired in the mission acquisition. Operating expenses for the second quarter were $5.5 million, or roughly 41% of revenues, compared to $1.4 million, or 115% in the prior year period. Year-over-year increase was driven largely by investments in corporate infrastructure necessary to support Berna's growth in sales and production. This includes expanding our management team and administrative staff, and the incremental operational expenses necessary to effectively manage our growth as a public company. Net income for the second quarter of 2021 was $2.0 million, compared with the net loss of $8.1 million in the second quarter of 2020. This represents our first quarter of positive net income on a GAAP basis. Adjusted for approximately $0.9 million of non-recurring costs, non-GAAP net income was approximately $3.0 million, compared with a loss of $0.8 million for the comparable period in the prior year. Non-GAAP-adjusted EBITDA was $3.3 million, compared with a loss of $0.7 million for the first quarter of fiscal 2020. Taking a look at the balance sheet, as of May 31, 2021, we had approximately $4.4 million of available cash and a further $0.9 million of restricted cash from orders that had been placed but not yet fulfilled. We ended the quarter with $1.5 million of current debt and no long-term debt on our balance sheet. We believe that our current liquidity provides us with ample flexibility to execute on our strategic plan, quickly ramp up marketing campaigns, and continue to invest in the research and development of new products. We have continued to balance drawing down cash with stockpiling inventory. We currently have approximately 10,000 finished units in stock and enough raw materials in componentry on hand to build another 10,000 launchers. With our plan of opening an Amazon e-commerce store this summer and our desire to be able to handle a surge in sales, we believe that this has been a prudent approach, particularly considering fulfillment issues we faced in mid-2020 prior to the opening of the Fort Wayne facility. For the full fiscal year of 2021, ending November 30th, we are adjusting our revenue guidance. We now believe that for the full year, we'll generate revenue of approximately $38 to $41 million. Now I'll turn the call back over to Brian, who will discuss some of our new product and sales channel development initiatives.