ANDOVER, Mass., Oct. 5, 2022 /PRNewswire/ — Byrna Technologies Inc. (NASDAQ: BYRN) (“Byrna”, “the Company”, “we” or “us”) today announced results for its fiscal third quarter ended August 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
Forward-looking statements in this news release include but are not limited to the Company’s statements regarding expected revenue for the fourth fiscal quarter of 2022 and fiscal year 2023, the level of profitability expected for the fourth fiscal quarter of 2022, the timing of shipping for unshipped orders, expected trends in freight costs and methods and any benefits to margins that may result from those trends, expected timing and amounts of component inventory shipments and the expected effect of increased levels of finished goods and raw materials, the expected strength of fourth quarter sales and the resulting impact on inventory levels, expected decreased demand for high priced consumer products, expected sales growth on the Amazon platform, expected sales growth for aerosol products and Mission launchers during fiscal year 2023, the expected timing and outcome of launching 12-gauge ammunition and the Byrna LE launcher and the impact of those introductions on 2023 sales, the amount of expected operating expense reductions for fiscal year 2023, plans to de-emphasize less productive areas of the business, the adequacy of cash on hand to fund operations, and the expected re-institution of the stock buyback program. 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; reduction in demand for high priced consumer products; 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 or ocean 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.
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,
2022
2021
2022
2021
Net revenue
$
12,422
$
8,703
$
32,018
$
30,997
Cost of goods sold
5,545
3,815
14,403
13,807
Gross profit
6,877
4,888
17,615
17,190
Operating expenses
8,283
6,692
25,045
17,382
LOSS FROM OPERATIONS
(1,406)
(1,804)
(7,430)
(192)
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)
28
(115)
(67)
78
Interest income (expense)
(3)
13
10
(24)
Other income – forgiveness of Paycheck Protection Program loan
—
—
—
190
Other expenses
(3)
(9)
(183)
(18)
LOSS BEFORE INCOME TAXES
(1,384)
(1,915)
(7,670)
34
Income tax benefit (provision)
(150)
74
(82)
(109)
NET LOSS
(1,534)
(1,841)
(7,752)
(75)
Dividends on preferred stock
—
—
—
(1,043)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS
$
(1,534)
$
(1,841)
$
(7,752)
$
(1,118)
Foreign currency translation adjustment for the period
(639)
(55)
(624)
123
COMPREHENSIVE INCOME (LOSS)
$
(2,173)
$
(1,896)
$
(8,376)
$
48
Net loss per share – basic and diluted
$
(0.07)
$
(0.08)
$
(0.34)
$
(0.06)
Weighted-average number of common shares outstanding – basic and diluted
21,751,879
22,047,571
22,704,565
18,269,360
BYRNA TECHNOLOGIES INC. Condensed Consolidated Balance Sheets (Amounts in thousands except share and per share data) (Unaudited)
August 31,
November 30,
2022
2021
Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
24,457
$
56,308
Restricted cash
—
92
Accounts receivable, net
2,673
1,658
Inventory, net
15,422
6,613
Prepaid expenses and other current assets
1,534
1,490
Total current assets
44,086
66,161
LONG TERM ASSETS
Intangible assets, net
3,952
3,668
Deposits for equipment
1,986
1,293
Right-of-use asset, net
2,393
1,086
Property and equipment, net
3,035
1,972
Goodwill
2,307
816
Other assets
154
318
TOTAL ASSETS
$
57,913
$
75,314
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities
$
6,849
$
6,996
Operating lease liabilities, current
680
463
Deferred revenue, current
921
720
Total current liabilities
8,450
8,179
LONG TERM LIABILITIES
Deferred revenue – non-current
385
405
Operating lease liabilities, non-current
1,838
632
Total liabilities
10,673
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. 24,016,612 shares issued and 22,236,602 outstanding as of August 31, 2022 and, 23,754,096 shares issued and outstanding as of November 30, 2021
23
23
Additional paid-in capital
124,107
119,589
Treasury stock (1,779,958 and 0 shares purchased as of August 31, 2022 and November 30, 2021, respectively)
(15,000)
—
Accumulated deficit
(61,250)
(53,498)
Accumulated other comprehensive loss
(640)
(16)
Total Stockholders’ Equity
47,240
66,098
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
57,913
$
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.
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
August 31,
2022
2021
Net loss
$
(1,534)
$
(1,841)
Adjustments:
Interest (income) expense
3
(13)
Income (tax benefit) provision
150
(74)
Depreciation and amortization
250
136
Non-GAAP EBITDA
(1,131)
(1,792)
Stock-based compensation expense
2,689
981
Non-cash incentive compensation expense
(1,415)
—
Other expenses
3
9
Severance/Separation
138
—
Non-GAAP adjusted EBITDA
$
284
$
(802)
For the Nine Months Ended
August 31,
2022
2021
Net loss
$
(7,752)
$
(75)
Adjustments:
Interest (income) expense
(10)
24
Income (tax benefit) provision
82
109
Depreciation and amortization
638
369
Non-GAAP EBITDA
(7,042)
427
Stock-based compensation expense
4,061
2,527
Other expenses
183
18
Forgiveness of PPP loan
—
(190)
Severance/Separation
556
—
Non-GAAP adjusted EBITDA
$
(2,242)
$
2,782
(1) This is a Non-GAAP measure. Refer to the Non-GAAP Reconciliation section at the end of this news release.