Reiterates Full Year Revenue Guidance of $55 – $60 Million
ANDOVER, Mass., July 7, 2022 /PRNewswire/ — Byrna Technologies Inc. (NASDAQ: BYRN) (“Byrna”, “the Company”, “we” or “us”) today announced results for its fiscal second quarter ended May 31, 2022.
Byrna is a technology company, specializing in the development, manufacture, and sale of innovative non-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 non-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 Information
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 the Company’s statements regarding expected trends in freight costs and methods, the likelihood of production interruptions, gross margins for international sales, future growth and staffing needs, expected sales growth in school safety products during the back-to-school season in August, potential shipment timing and revenue from TCR and Mission-4 over the balance of FY22, the effect of the addition of aerosol spray products on Byrna’s online conversion rate and brick & mortar sales, the timing and outcome of the development, launch and revenue impact of the first 12-gauge rounds, and that operating expenses levels will remain consistent for the remainder of the fiscal year. 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; delays in launching new products; prolonged, new, or exacerbated disruption of our supply chain; the further or prolonged disruption of new product development; production or distribution or delays in entry or penetration of sales channels due to inventory constraints, competitive factors, pandemic-related factors, civil unrest, increased shipping costs or freight interruptions; prototype, parts and material shortages, particularly of parts sourced from limited or sole source providers; reduced air freight capacity; determinations by third party controlled distribution channels, including Amazon, not to carry or reduce inventory of our products; 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 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; import-export related matters or sanctions or embargos that could affect the Company’s supply chain or markets; delays in planned operations related to licensing, registration or permit requirements; 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 our most recent Form 10-K, 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 our 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.
Contact: Byrna Technologies Inc. David North, Chief Financial Officer 978-269-7785
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 Six Months Ended
May 31,
May 31,
2022
2021
2022
2021
Net revenue
$
11,619
$
13,401
$
19,596
$
22,294
Cost of goods sold
5,495
5,839
8,858
9,991
Gross profit
6,124
7,562
10,738
12,303
Operating expenses
8,739
5,539
16,762
10,691
INCOME (LOSS) FROM OPERATIONS
(2,615)
2,023
(6,024)
1,612
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)
(274)
214
(96)
192
Interest income (expense)
13
(9)
14
(37)
Other income – forgiveness of Paycheck Protection Program loan
—
—
—
190
Other expenses
(69)
(8)
(180)
(9)
INCOME (LOSS) BEFORE INCOME TAXES
(2,945)
2,220
(6,286)
1,948
Income tax benefit (provision)
(51)
(183)
69
(183)
NET INCOME (LOSS)
(2,996)
2,037
(6,217)
1,765
Dividends on preferred stock
—
1,043
—
1,043
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
(2,996)
$
994
$
(6,217)
$
722
Foreign currency translation adjustment for the period
9
120
14
178
COMPREHENSIVE INCOME (LOSS)
$
(2,987)
$
2,157
$
(6,203)
$
1,943
Net income (loss) per share – basic
$
(0.13)
$
0.06
$
(0.27)
$
0.04
Weighted-average number of common shares outstanding – basic
23,097,150
17,800,749
23,443,766
16,359,496
Net income per share – diluted
$
(0.13)
$
0.05
$
(0.27)
$
0.04
Weighted-average number of common shares outstanding – diluted
23,097,150
18,989,231
23,443,766
17,604,131
BYRNA TECHNOLOGIES INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands except share and per share data)
(Unaudited)
May 31,
November 30,
2022
2021
Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
25,847
$
56,308
Restricted cash
—
92
Accounts receivable, net
2,549
1,658
Inventory, net
13,468
6,613
Prepaid expenses and other current assets
1,827
1,490
Total current assets
43,691
66,161
LONG TERM ASSETS
Intangible assets, net
3,991
3,668
Deposits for equipment
2,475
1,293
Right-of-use asset, net
1,462
1,086
Property and equipment, net
2,490
1,972
Goodwill
2,245
816
Other assets
364
318
TOTAL ASSETS
$
56,718
$
75,314
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities
$
8,688
$
6,996
Operating lease liabilities, current
522
463
Deferred revenue, current
357
720
Total current liabilities
9,567
8,179
LONG TERM LIABILITIES
Deferred revenue – non-current
410
405
Operating lease liabilities, non-current
1,059
632
Total liabilities
11,036
9,216
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. 24,008,219 shares issued and 22,228,210 outstanding as of May 31, 2022 and, 23,754,096 shares issued and outstanding as of November 30, 2021
23
23
Additional paid-in capital
120,375
119,589
Treasury stock (1,779,958 and 0 shares purchased as of May 31, 2022 and November 30, 2021, respectively)
(15,000)
—
Accumulated deficit
(59,715)
(53,498)
Accumulated other comprehensive loss
(1)
(16)
Total Stockholders’ Equity
45,682
66,098
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
56,718
$
75,314
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide the following additional financial metrics that are not prepared in accordance with GAAP (non-GAAP): adjusted EBITDA, non-GAAP adjusted net loss, and non-GAAP adjusted net loss per share. Management uses these non-GAAP financial measures, 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 these non-GAAP financial measures help 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 measures.
Accordingly, we believe that these non-GAAP financial measures reflect 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.
These non-GAAP financial measures do 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 measures as tools for comparison.
25
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; and (v) other expenses. 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):
For the Three Months Ended
May 31,
2022
2021
Net (loss) income
$
(2,996)
$
2,037
Adjustments:
Interest (income) expense
(13)
9
Income tax benefit (provision)
(51)
(183)
Depreciation and amortization
206
129
Non-GAAP EBITDA
(2,854)
1,992
Stock-based compensation expense
560
853
Non-cash incentive compensation expense
943
—
Other expenses
69
8
Severance
373
—
Non-GAAP adjusted EBITDA
$
(909)
$
2,853
For the Six Months Ended
May 31,
2022
2021
Net (loss) income
$
(6,217)
$
1,765
Adjustments:
Interest income (expense)
(14)
37
Income tax benefit (provision)
69
(183)
Depreciation and amortization
381
217
Non-GAAP EBITDA
(5,781)
1,836
Stock-based compensation expense
1,373
1,546
Non-cash incentive compensation expense
1,415
—
Other expenses
180
9
Forgiveness of PPP loan
—
(190)
Severance
419
—
Non-GAAP adjusted EBITDA
$
(2,394)
$
3,201
Non-GAAP adjusted net loss and non-GAAP adjusted net loss per share
Non-GAAP adjusted net loss is defined as net (loss) income as reported in our condensed consolidated statements of operations and comprehensive (loss) income excluding the impact of (i) stock-based compensation expense and (ii) other expenses. Our non-GAAP adjusted net loss measure eliminates potential differences in performance caused by certain non-cash and one-time costs. We also provide non-GAAP adjusted net loss per share by dividing non-GAAP adjusted net loss by the average basic shares outstanding for the period. Reconciliation of Non-GAAP adjusted net (loss) income to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):
For the Three Months Ended
May 31,
2022
2021
Net (loss) income
$
(2,996)
$
2,037
Adjustments:
Stock-based compensation
560
853
Non-cash incentive compensation expense
943
—
Other expenses
69
8
Severance
373
—
NON-GAAP ADJUSTED NET (LOSS) INCOME
$
(1,051)
$
2,898
Net income applicable to preferred stock
—
(1,043)
NON-GAAP ADJUSTED NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
(1,051)
$
1,855
Non-GAAP adjusted net income (loss) per share — basic
$
(0.05)
$
0.16
Weighted-average number of common shares outstanding during the period — basic
23,097,150
17,800,749
For the Six Months Ended
May 31,
2022
2021
Net (loss) income
$
(6,217)
$
1,765
Adjustments:
Stock-based compensation expense
1,373
1,546
Non-cash incentive compensation expense
1,415
—
Other expenses
180
9
Forgiveness of PPP loan
—
(190)
Severance
419
—
NON-GAAP ADJUSTED NET INCOME (LOSS)
(2,830)
3,130
Net income applicable to preferred stock
—
(1,043)
NON-GAAP ADJUSTED NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
$
(2,830)
$
2,087
Non-GAAP adjusted net income (loss) per share — basic
$
(0.12)
$
0.13
Weighted-average number of common shares outstanding during the period — basic
23,443,766
16,359,496
1 See non-GAAP financial measures at the end of this press release for a reconciliation and a discussion of non-GAAP financial measures.