Byrna Technologies, Inc.

Good morning and welcome to Berna's fiscal third quarter 2024 earnings conference call. My name is Kevin and I'll be your operator for today's call. Joining us for today's presentation are the company's CEO, Brian Ganz and CFO, Lori Kearns. Following the remarks, we'll open the call to questions. Earlier today, Berna released results for its fiscal third quarter ended August 31st, 2024. A copy of the press release is available on the company's website. Before turning the call over to Brian Gans, Berna 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 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 Investors section of our website, ir.berna.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 Berna's CEO, Brian Ganz. Sir, please proceed.

Thank you, Kevin, and thank you, everyone, for joining us today. This morning, we issued a press release providing our financial results for the fiscal third quarter, ended August 31st, 2024, as well as highlighting key business accomplishments for the quarter. We'll be filing our 10Q with the SEC on Friday of this week. I'll start by passing the call to Laurie Kearns, our CFO, who will discuss our financial results for the third quarter. Following her remarks, I'll review the operational highlights for the third quarter, which resulted in the record $20.9 million in revenue and our continued GAAP and non-GAAP EBITDA profitability. I will then offer insights into our go-forward strategy. Lastly, I'll open the call to questions from our covering research analysts. Laurie?

Thank you, Brian, and good morning, everyone. Let's review our financial results for the fiscal Q3 ended August 31, 2024. Net revenue for Q3 2024 was $20.9 million, a 194% jump from the $7.1 million reported in the fiscal third quarter of 2023. This $13.8 million increase is primarily due to the transformational shift in our advertising strategy, which began in September 2023. The ongoing success of our celebrity endorsement strategy helps drive the $10.5 million increase in direct-to-consumer revenues through our website and Amazon compared to the prior year period. For the first nine months of 2024, net revenue totaled $57.8 million, which is up 114% from $27 million in the first nine months of 2023. Gross profit for Q3 2024 was $13 million or 62.4% of net revenue compared to $3.2 million or 44.6% of net revenue for Q3 2023. The improvement in gross profit margin is largely attributable to additional sales through our higher margin DTC channels and intensive cost component reduction effort, which was spearheaded by Berna's engineering team and the economies of scale resulted resulting from increased production volumes. For the first nine months of 2024, gross profit was 35.2 million or 60.9% of net revenue compared to 14.6 million or 54.1% of net revenue for the same period in 2023. Operating expenses for Q3 2024 were 12.2 million compared to 7.3 million for Q3 2023. The increase in operating expenses was driven by an increase in variable selling costs, such as freight and sales transaction processing fees, an increase in marketing spend related to the company's new advertising strategy, and an increase in payroll, primarily in marketing and engineering, as the company made focused improvements in these areas. For the first nine months of 2024, operating expenses were $32.6 million, compared to $21.5 million for the same period in 2023, reflecting a 52% year-over-year increase. Net income for Q3 2024 was $1 million, a $5.1 million improvement from a net loss of $4.1 million for Q3 2023. For the first nine months of 2024, net income was $3.1 million, compared to a net loss of $7.4 million in the first nine months of 2023, which was a $10.5 million improvement. Adjusted EBITDA, a non-GAAP metric, for Q3 2024 totalled $1.9 million, compared to a negative $2.4 million for Q3 2023. This brings adjusted EBITDA for the first nine months to $6.3 million and $8.1 million improvement from the prior year. Cash and cash equivalents at August 31, 2024 totaled $20.1 million compared to $20.5 million at November 30, 2023. Inventory at August 31, 2024. totaled $19.8 million compared to $13.9 million at November 30th, 2023. The company has no current or long-term debt. I'll now turn the call back over to Brian.