Byrna Technologies, Inc.

Good morning. Welcome to Berna's fiscal second quarter 2025 earnings conference call. My name is Daryl, 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 second quarter ended May 31st, 2025. The 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 will 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 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 would like to turn the call over to Berna's CEO, Brian Gantz. Sir, please proceed.

Thank you, Daryl, 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 second quarter ended May 31, 2025. As usual, I will start by turning the call over to our CFO, Lori Kearns, who will review our financial results for the period. Following her remarks, I'll discuss the operational highlights that drove our 41% year-over-year revenue growth, and continued gap and non-gap EBITDA profitability for the quarter. I will then offer insights into our strategy on a go-forward basis before we open the call to questions from our covering research analysts. Laurie.

Thank you, Brian. Good morning, everyone. Let's review our financial results for the fiscal second quarter ended May 31, 2025. Net revenue for Q2 2025 was $28.5 million, a 41% increase from the $20.3 million reported in the fiscal second quarter of 2024. This $8.2 million increase was driven by the launch of the CL, increased dealer and chain store sales, and broader brand adoption. In Q2, direct-to-consumer revenues increased by $2.2 million through Burna.com and Amazon.com compared to the prior year period. Additionally, sales to dealers increased by 3.9 million, or 106%, largely driven by initial stocking orders for Sportsman's Warehouse. Gross profit for Q2 2025 was 17.6 million, or 62% of net revenue, compared to 12.6 million, or 62% of net revenue for Q2 2024. The introduction of the Compact Launcher led to a favorable product-sales mix that offset any decrease due to a change in channel mix from stronger dealer sales. Operating expenses for Q2 2025 were $14.2 million compared to $10.6 million for Q2 2024. The increase in operating expenses was driven by increased variable selling expenses, discretionary marketing spend, and higher payroll costs. as well as some expenses directly related to the launch of the Compact Launcher. Net income for Q2 2025 was 2.4 million, compared to 2.1 million for Q2 2024. This increase was driven by the overall increase in product sales, which was partially offset with higher income tax expense for the quarter. As mentioned in our last call, 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 Q2 2025, totaled 4.3 million compared to 2.8 million for Q2 2024. Cash, cash equivalents, and marketable securities at May 31, 2025 totaled 13 million, compared to 25.7 million at November 30th, 2024. The decrease reflects the planned increase in inventory ahead of the Compact Launcher release and normal seasonal working capital movements. Inventory at May 31, 2025 totaled 32.3 million compared to 20 million at November 30th, 2024. The company has no current or long-term debt. I'll now turn it back to Brian.