Byrna Technologies, Inc.

Good morning. Welcome to Berna's fiscal third quarter 2026 earnings conference call. My name is Darrell and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Conn Davis, and CFO, Laurilee Kearnes. Following their remarks, we will open the call to questions. Earlier today, Berna released results for its fiscal third quarter ended August 31st, 2026. A copy of the press release is available on the company's website. Before turning the call over to Mr. Davis, I will read the company's 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 those 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 Investors section of our website, ir.berner.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 Berner's CEO, Conn Davis. Sir, please proceed.

Thank you, Operator. Thank you, everyone, for joining us today. Over the past several months, we have made significant progress in building the foundations necessary to to support sustainable long-term growth. Our results in the quarter reflect our ongoing transition. And while they will remain below the level of performance we expect for Berna, we are seeing signs that many of the initiatives we began implementing this year are starting to gain traction. And that reinforces my conviction in the opportunity ahead. We continue to believe Berna is uniquely positioned at the intersection of personal safety and consumer self-defense. The need for a less lethal option remains significant. Consumer awareness of the category remains relatively low, and we believe the long-term opportunity to expand adoption is substantially larger than the business today. Our focus since I arrived in March has been centered around three priorities. Improving customer conversion and retail productivity, transforming how Burna builds demand, and enhancing operational efficiency across the business. During the quarter, we began seeing encouraging progress across each of these priorities. Our direct-to-consumer metrics improved with website sessions averaging approximately 29,000 per day in August, the highest since March this year, while conversion rates improved from June to August sequentially. We also expanded our social creator ecosystem to more than 50 active creators, helping us reach new consumer audiences and driving engagement up 95% across our social channels compared to Q1. Beyond the individual metrics, what encourages me most is that many of the building blocks we have set out to establish earlier this year are now coming into place, and we still have more to come to help reaccelerate growth. Many of our refreshed marketing programs are now active. Our creator ecosystem is live and expanding, our retail initiatives are rolling out ahead of the holiday season, and our leadership team has been strengthened. We are also seeing measurable operational progress, with first pass yield exceeding 89% and approaching the 90% target we set for Q4, gross margins outperforming our internal expectations, and inventory beginning to trend lower. Collectively, these indicators reinforce our confidence that the actions we are taking today are creating a stronger platform for future growth. As we move toward the upcoming holiday season, our focus remains on execution. We still have meaningful work ahead of us and remain realistic about the uphill climb. At the same time, We believe the foundation we have spent much of fiscal 26 building is materially stronger than it was six months ago. I'll discuss more on our quarter and also introduce a longer-term outlook for the business in a bit. But first, I will turn the call over to Laurie to review our results from the quarter. Laurie?

Thank you, Conn, and good morning, everyone. Let's review our financial results for the fiscal third quarter ended August 31, 2026. Net revenue for the third quarter was $15.3 million, down approximately 46% from $28.2 million in the prior year period. This was driven primarily by a decline in e-commerce sales and slower reorder activity from dealers and chain stores following substantial restocking in fiscal Q1 and slower than expected sell-through. Gross profit was 12.2 million or 79% of revenue compared to 16.9 million or 60% of net revenue in the prior year quarter. Reported gross profit includes the impact of a $2.3 million tariff refund. Adjusting for this item, adjusted gross profit, a non-GAAP measure, was 9.9 million representing an adjusted gross margin of approximately 65%. The increase in adjusted gross margin is primarily attributable to operational efficiency gains in both manufacturing and supply chain as well as favorable product and channel mix. Operating expenses for Q3 2026 were $15.1 million compared to $14.1 million for Q3 2025. An increase of 7%. The increase primarily reflects continued investment in new marketing initiatives, as well as $1.7 million in bad debt expenses related to two large international customers, partially offset by the change in variable selling expenses associated with the decrease in sales. As we've previously discussed, we expect incremental expense as our new commercial and consumer acquisition programs ramp. Those investments will precede their full potential revenue contributions, and outside of those targeted areas, we are managing spending against the current revenue base and continuing to evaluate costs. We reported a net loss for the quarter of $2.9 million or a loss of $0.13 per diluted share compared to net income of $2.2 million or $0.09 per diluted share in the same period a year ago. Adjusted EBITDA, a non-GAAP metric, for Q3 2026 was negative $1.4 million compared to $4.1 million in the same period a year ago. Cash, cash equivalents, and marketable securities totaled $9.4 million as of August 31, 2026, compared to $9 million in the prior year period. It was $15.5 million on November 30, 2025, and $10.4 million at the end of the fiscal second quarter. Lower collections of accounts receivable weighed on cash during the quarter, and we ended the period with no debt. Inventory totaled $30 million as of August 31, 2026, compared to $34.1 million in the prior year period, $32.7 million at November 30, 2025, and $30.4 million at the end of the fiscal second quarter. As we head into the holiday sale season, we expect inventory levels to decrease by $2 to $3 million during the fourth quarter, and to continue to decrease in 2027, leading to improved working capital efficiency. In summary, we believe we have a strong financial position today and the available resources to further invest in our long-term growth objectives. I'll now pass the call back to Conn to discuss more on the quarter and the actions underway across the business. Conn?