Byrna Technologies reports Q2 EPS (5c), consensus 1c

Reports Q2 revenue $11.5M, consensus $12M. “In Q2, we continued to make progress in several key focus areas. We entered serial production for our Byrna LE and 12-gauge less-lethal rounds, successfully working down our waitlist and backorders for these products, which led to a more than $3M sequential topline increase,” said CEO Bryan Ganz. “…our efforts in our dealer sales division resulted in an almost 50% increase in year-over-year dealer sales. While we made good progress in production, cost management and dealer sales, we faced a setback in direct-to-consumer sales. In late March, Meta and Google simultaneously implemented a ban on any advertising by Byrna on their platforms, classifying Byrna as a ‘contraband’ product. Google has since backed off its position slightly, allowing ads that do not show the launcher to run on YouTube; however, Meta has been unrelenting in its advertising on all Meta platforms, including Facebook and Instagram. These challenges resulted in an immediate falloff in web traffic on Byrna.com, Byrna.ca and Amazon.com…Despite the significant decline in sessions, sales on Byrna.com were off less than 1.0% compared to the same period last year while Amazon sales were off 5.5% compared to the same period last year…We do not know when Meta’s ban on the advertising of Byrna’s products will be lifted. Accordingly, we are working to find effective alternatives to the large social media sites to reach potential customers…through a diligent focus on cost management, we’ve been able to reduce operating expenses and improve our profitability for the quarter to the tune of a $1.6M increase in adjusted EBITDA over Q2 of last year…Byrna is currently cash flow positive with over $15.4M of cash and cash equivalents and no debt. In the coming quarters, we expect to work through our sizeable inventory, which will free up additional cash providing an ample cushion. This solid financial foundation provides us with the ability to navigate current challenges while we position ourselves to invest in key areas of our business and still maintain a robust cash flow trajectory.”