Byrna Technologies, Inc.

Good morning. Welcome to Berna's fiscal third quarter 2025 earnings conference call. My name is Donna, and I will 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 their remarks, we will open the call to questions. Earlier today, Berna released results for its fiscal third quarter ended August 31, 2025. 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 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. I will now turn the call over to Berna's CEO, Mr. Ganz.

Thank you, Operator, 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 third quarter ended August 31st, 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 35% 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 up to questions from our covering research analyst, Laurie.

Thank you, Brian, and good morning, everyone. Let's review our financial results for the fiscal third quarter ended August 31st, 2025. Net revenue for Q3 2025 was $28.2 million, a 35% increase from the $20.9 million reported in the fiscal third quarter of 2024. The $7.2 million increase was driven largely by strong chain store and dealer sales tied to our expanding retail presence, the success of our new advertising initiatives and broader brand adoption. Web traffic began to build late in the quarter and has continued into fiscal Q4. Gross profit for Q3 2025 was $16.9 million or 60% of net revenue, compared to $13 million or 62% of net revenue for Q3 2024. Gross margin performance reflects the changing channel mix, which saw much stronger dealer and international sales for the quarter. the one-time startup costs associated with the Compact Launcher release and related manufacturing ramp-up costs, as well as the start of ammo manufacturing in Fort Wayne. We anticipate that the Compact Launcher and ammo margins will continue to grow as production volumes increase and manufacturing processes become more efficient. Operating expenses for Q3 2025 were $14.1 million, compared to $12.2 million for Q3 2024. The increase in operating expenses was driven primarily by increased variable selling expenses and discretionary marketing investment to support the growth. Net income for Q3 2025 was $2.2 million, up from $1 million for Q3 2024. This increase was driven by the overall increase in product sales, We continue to expect our effective tax rate to be approximately 23% for the year. Adjusted EBITDA and non-GAAP metrics totaled $3.7 million, which was up from $1.9 million for Q3 2024. Cash, cash equivalents, and marketable securities at August 31, 2025 totaled $9 million, compared to $25.7 million at November 30, 2024. Cash has been increasing since the end of the third quarter, which primarily reflects just normal seasonal working capital timing and collections subsequent to quarter end, as well as the planned drawdown of inventory. We expect the drawdown of inventory and increasing cash to accelerate throughout the fourth quarter. The company has no current or long-term debt. Accounts receivable on August 31, 2025, totaled $8.9 million compared to $2.6 million at November 30, 2024, driven largely by the increase in dealer sales. Inventory at August 31, 2025 totaled $34.1 million, compared to $20 million at November 30, 2024, reflecting our strategic builds ahead of the holiday season and the Compact Launcher rollout. Mixed dynamics this quarter favored the Berna SD more than initially anticipated, leading to additional purchases of SD-related parts. We saw the high point of inventory at the end of July, with a reduction since that time of over 3.5 million. We expect inventory to normalize as we move through the peak season and into fiscal Q1 2026. I'll now turn it back to Brian.