Byrna Technologies, Inc.

Good morning, and welcome to Berna's Fiscal First Quarter 2025 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 his fiscal first quarter ended February 28, 2025. A copy of the press release is available on the company's website. Before turning the call over to Brian Gantz, 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 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 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 investor 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 CEO, Brian Gantz. Please go ahead, sir.

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 February 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 analyst, Laurie.

Thank you, Brian, and good morning, everyone. Let's review our financial results for the first fiscal quarter ended February 28, 2025. Net revenue for the Q1 2025 was $26.2 million, a 57% increase from the $16.7 million reported in the first fiscal quarter of 2024. This $9.5 million increase is primarily due to continuing sales momentum, channel expansion, and broader brand adoption. In Q1, direct-to-consumer revenues increased by $6.7 million through Burna.com and Amazon.com compared to the prior year period. While both channels have grown, we are starting to see our Amazon.com sales grow at a faster rate than our Burna.com sales. Additionally, sales to dealers increased 1.9 million, 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 2025 was $15.9 million, or 61% of net revenue, compared to $9.6 million, or 58% of net revenue for Q1 2024. We continue to see the gross margin improvement due to our efforts in the middle of 2024 focused on designing for manufacturability, as well as increased production volumes. Operating expenses for Q1 2025 were $14.2 million compared to $9.8 million for Q1 2024. 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 401 match of $300,000. This was due to a combination of increased employees, increased healthcare costs, and the company implementing a 401 safe harbor matching program. Net income for Q1 2025 was $1.7 million compared to $17,000 for Q1 2024. This increase was driven by an overall increase in product sales. Due to the release of our valuation allowance in Q4 2024, the company will transition into full taxpayer status in 2025, and we expect our effective tax rate to be approximately 23% for the year. Adjusted EBITDA, a non-GAAP metric, for Q1 2025 totaled $2.8 million compared to $1.2 million for Q1 2024. Cash, cash equivalents, and marketable securities at February 28, 2025 totaled $19.3 million compared to $25.7 million at November 30, 2024. The decrease reflects planned increases in inventory ahead of the Compact Launcher release and normal seasonal working capital movements. Inventory at February 28, 2025 totaled $23.2 million compared to $20 million at November 30, 2024. The company has no current or long-term debt. I'll now turn it back to Brian.