ANDOVER, Mass., Oct. 12, 2023 /PRNewswire/ — Byrna Technologies Inc. (“Byrna” or the “Company”) (Nasdaq: BYRN), a personal defense technology company specializing in the development, manufacture, and sale of innovative less-lethal personal security solutions, today reported select financial results for its fiscal third quarter (“Q3 2023”) ended August 31, 2023.
About Byrna Technologies Inc. Byrna is a technology company specializing in the development, manufacture, and sale of innovative less-lethal personal security solutions. For more information on the Company, please visit the corporate website here or the Company’s investor relations site here. The Company is the manufacturer of the Byrna® SD personal security device, a state-of-the-art handheld CO2 powered launcher designed to provide a less-lethal alternative to a firearm for the consumer, private security, and law enforcement markets. To purchase Byrna products, visit the Company’s e-commerce store.
Forward-Looking Statements This news release contains “forward-looking statements” within the meaning of the securities laws. All statements contained in this news release, other than statements of current and historical fact, are forward-looking. Often, but not always, forward-looking statements can be identified by the use of words such as “plans,” “expects,” “intends,” “anticipates,” and “believes” and statements that certain actions, events or results “may,” “could,” “would,” “should,” “might,” “occur,” or “be achieved,” or “will be taken.” Forward-looking statements include descriptions of currently occurring matters which may continue in the future. Forward-looking statements in this news release include but are not limited to our statements related to preliminary revenue and margin results for the third fiscal quarter of 2023, the expected benefits of the Company’s partnership with Sean Hannity, the shift towards less-lethal defense alternatives in the Argentinian market, the duration and degree of the impact of social media marketing bans on revenue, expected increases in discretionary marketing spend, expectations related to the Side Hustle program, expectations regarding additional cash flow in future quarters, the ability to strategically invest in the Company’s business, and the Company’s ability to maintain a robust cash flow trajectory. Forward-looking statements are not, and cannot be, a guarantee of future results or events. Forward-looking statements are based on, among other things, opinions, assumptions, estimates, and analyses that, while considered reasonable by the Company at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies, and other factors that may cause actual results and events to be materially different from those expressed or implied.
Any number of risk factors could affect our actual results and cause them to differ materially from those expressed or implied by the forward-looking statements in this news release, including, but not limited to, disappointing market responses to current or future products or services; prolonged, new, or exacerbated disruption of our supply chain; the further or prolonged disruption of new product development; production or distribution disruption or delays in entry or penetration of sales channels due to inventory constraints, competitive factors, increased transportation costs or interruptions, including due to weather, flooding or fires; prototype, parts and material shortages, particularly of parts sourced from limited or sole source providers; determinations by third party controlled distribution channels, including Amazon, not to carry or reduce inventory of the Company’s products; determinations by advertisers or social media platforms, or legislation that prevents or limits marketing of some or all Byrna products; the loss of marketing partners; increases in marketing expenditure may not yield expected revenue increases; potential cancellations of existing or future orders including as a result of any fulfillment delays, introduction of competing products, negative publicity, or other factors; product design or manufacturing defects or recalls; litigation, enforcement proceedings or other regulatory or legal developments; changes in consumer or political sentiment affecting product demand; regulatory factors including the impact of commerce and trade laws and regulations; and future restrictions on the Company’s cash resources, increased costs and other events that could potentially reduce demand for the Company’s products or result in order cancellations. The order in which these factors appear should not be construed to indicate their relative importance or priority. We caution that these factors may not be exhaustive; accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results. Investors should carefully consider these and other relevant factors, including those risk factors in Part I, Item 1A, (“Risk Factors”) in the Company’s most recent Form 10-K and Part II, Item 1A (“Risk Factors”) in the Company’s most recent Form 10-Q, should understand it is impossible to predict or identify all such factors or risks, should not consider the foregoing list, or the risks identified in the Company’s SEC filings, to be a complete discussion of all potential risks or uncertainties, and should not place undue reliance on forward-looking information. The Company assumes no obligation to update or revise any forward-looking information, except as required by applicable law.
[Financial Tables to Follow]
BYRNA TECHNOLOGIES INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Amounts in thousands except share and per share data)
(Unaudited)
For the Three Months Ended
For the Nine Months Ended
August 31,
August 31,
2023
2022
2023
2022
Net revenue
$
7,085
$
12,422
$
27,004
$
32,018
Cost of goods sold
3,927
5,545
12,402
14,403
Gross profit
3,158
6,877
14,602
17,615
Operating expenses
7,267
8,283
21,522
25,045
LOSS FROM OPERATIONS
(4,109)
(1,406)
(6,920)
(7,430)
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)
(54)
28
(238)
(67)
Interest income (expense)
239
(3)
525
10
Loss from joint venture
(287)
—
(625)
—
Other expenses
(7)
(3)
(270)
(183)
LOSS BEFORE INCOME TAXES
(4,218)
(1,384)
(7,528)
(7,670)
Income tax (provision) benefit
124
(150)
165
(82)
NET LOSS
(4,094)
(1,534)
(7,363)
(7,752)
Foreign currency translation adjustment for the period
585
(639)
(641)
(624)
COMPREHENSIVE LOSS
$
(3,509)
$
(2,173)
$
(8,004)
$
(8,376)
Net loss per share – basic and diluted
$
(0.19)
$
(0.07)
$
(0.34)
$
(0.34)
Weighted-average number of common shares outstanding – basic and diluted
21,960,163
21,751,879
21,895,815
22,704,565
BYRNA TECHNOLOGIES INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
August 31,
November 30,
2023
2022
Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
13,654
$
20,068
Accounts receivable, net
3,642
5,915
Inventory, net
16,687
15,462
Prepaid expenses and other current assets
963
1,200
Total current assets
34,946
42,645
LONG TERM ASSETS
Intangible assets, net
3,655
3,872
Deposits for equipment
1,520
2,269
Right-of-use asset, net
1,919
2,424
Property and equipment, net
3,638
3,309
Goodwill
2,258
2,258
Loan to joint venture
1,451
—
Other assets
204
272
TOTAL ASSETS
$
49,591
$
57,049
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities
$
4,558
$
7,708
Operating lease liabilities, current
653
757
Deferred revenue, current
651
458
Total current liabilities
5,862
8,923
LONG TERM LIABILITIES
Deferred revenue, non-current
139
340
Operating lease liabilities, non-current
1,367
1,792
Total liabilities
7,368
11,055
COMMITMENTS AND CONTINGENCIES (NOTE 21)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued
—
—
Common stock, $0.001 par value, 50,000,000 shares authorized. 24,143,014 shares issued and 21,977,027 shares outstanding as of August 31, 2023 and, 24,018,612 shares issued and 21,852,625 outstanding as of November 30, 2022
24
23
Additional paid-in capital
129,707
125,474
Treasury stock (2,165,987 shares purchased as of August 31, 2023 and November 30, 2022)
(17,500)
(17,500)
Accumulated deficit
(68,747)
(61,383)
Accumulated other comprehensive loss
(1,261)
(620)
Total Stockholders’ Equity
42,223
45,994
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
49,591
$
57,049
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measure.
Accordingly, we believe that this non-GAAP financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.
Adjusted EBITDA
Adjusted EBITDA is defined as net (loss) income as reported in our condensed consolidated statements of operations and comprehensive (loss) income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss, and (vi) one time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):