Byrna Technologies Reports Record Fourth Quarter And Full Fiscal 2020 Results


Byrna Technologies Inc. (OTCQB: BYRN) (CSE: BYRN) today announced results for its fiscal fourth quarter ended November 30, 2020.

Fourth Quarter 2020 Compared to Fourth Quarter 2019:

  • Revenues were $11,029,164 compared to $500,442.
  • Gross margin was 44.4% compared to 10.7%.
  • Non-GAAP adjusted gross margin1 was 48.7% in the fourth quarter of 2020.
  • GAAP Net loss was $1,641,195 compared to $1,720,439.
  • Non-GAAP adjusted net income1 was $220,790 in the fourth quarter of 2020.

Fiscal Year 2020 Compared to Fiscal Year 2019:

  • Revenues were $16,566,295 compared to $924,419.
  • Gross margin was 45.3% compared to 16.1%.
  • Non-GAAP Adjusted gross margin1 was 48.2% for the full fiscal year 2020.
  • GAAP Net loss was $12,553,325 compared to $4,409,785.
  • Non-GAAP adjusted net loss1 was $2,018,795 in the full fiscal year 2020.

"Our fourth quarter concluded a transformative year for Byrna Technologies," stated Bryan Ganz, CEO of Byrna. "We delivered our strongest revenue quarter by far and, adjusted for certain non-recurring and non-cash charges, generated the first quarter of positive adjusted net income in the Company's history. At the same time, we made important enhancements to our corporate platform, both in terms of manufacturing assets and human capital, including the recent addition of a highly experienced Chief Marketing Officer, Luan Pham. Now that our production capacity has caught up with demand, the Company expects to work through our current order backlog for launcher kits in the next two weeks and return to same-day shipping by the end of March."

Due to the civil unrest that has taken place over the past year, both consumers and law enforcement professionals in the U.S. and globally are increasingly seeking effective less-lethal self-defense solutions and Byrna is emerging as a leader in this category given the product's unique features and growing brand awareness. With the availability of increased production capacity, Byrna will be commencing a series of dynamic marketing campaigns spearheaded by Mr. Pham which are designed to allow the Company to capitalize on this growing demand for less-lethal personal security options, such as the Byrna®HD less-lethal personal security device.

The Company is also developing a number of exciting new products including the Byrna XL, the Byrna LE and the Byrna CP. The Byrna XL will be able to use the more readily available 12-gram CO2 canisters and will have greater muzzle velocity. The Byrna LE is being designed for the Law Enforcement market, as well as for firearm enthusiasts. This launcher, scheduled for release in Q3 of 2021, will have even greater muzzle velocity, an improved sighting system, a seven-round magazine and extreme cold weather capabilities. Early in 2022 Byrna intends to introduce the Byrna CP, a compact launcher designed for better conceal carry capabilities and for users with smaller hands.

Mr. Ganz continued, "With respect to our production capabilities, we could not be more pleased with the ramp of the Fort Wayne, Indiana facility that we opened in September of 2020. The team there has performed admirably as they, along with our employees in South Africa, demonstrated extraordinary commitment, going above and beyond the call of duty to get product out to our customers and work through our backlog of orders. Once we have fulfilled our current backlog, we will be putting increased focus on expanding our dealer network and pursuing relationships with sporting goods stores, gun stores and outdoor stores. We believe that these outlets represent a significant growth opportunity for Byrna."

Fourth Quarter 2020 Business OverviewRevenues were $11,029,154 in the fourth quarter of 2020. This significant increase was driven by strong growth in orders for the Company's Byrna HD, resulting from enhanced market awareness of the product.

Gross profit was $4,896,610, representing a gross margin of 44.4%, compared to $53,542, or a 10.7% gross margin in the prior year period. On an adjusted basis, gross margin in Q4 was 48.7%. The increase in gross profit margins was driven primarily by the result of substantially higher production volumes, as the Company was able to spread its fixed production overhead across a larger production base.

Operating expenses were $6,172,482 in the fourth quarter of 2020, up from $824,770 in the prior year period. The increase reflects greater investment in corporate infrastructure necessary to support the Company's growth in sales and production. This investment includes increases in employee-related expenses, marketing costs, auditing costs and bank fees.

Financial Position as of November 30, 2020:

  • Cash of $9,563,635, including $6,388,561 of restricted cash (which is released as backorders are fulfilled).
  • Total assets of $21,216,120.
  • Total debt of $190,300.

The Company's cash position as of November 30, 2020 was an increase of $8,481,735 from November 30, 2019, primarily due to positive free cash flow (defined as cash flow from operations less purchases of property and equipment) and early warrant exercises during the twelve-month period. Cash flow from operations for fiscal 2020 was $2,537,755 and free cash flow was $1,111,321.

Technical Service Update

On February 12, 2020, the Company identified a limited number of Byrna HD launchers in which the safety wire was not within specification. While no injuries were reported as a result of this technical issue, Byrna alerted its customers through multiple channels including a direct email campaign to Byrna HD owners and a notification posted on the Company's website, offering customers the opportunity to return their launchers for a technical service update to correct the issue, free of charge. In the ten days since alerting its customers of this issue, Byrna has reached more than 31,000 customers (over 80% of customers) and has received less than 350 submissions for the technical service update. In the event that we ultimately receive a higher number of customer update requests, the Company has accrued $195,000 on its balance sheet to cover the potential costs of the technical service update (labor, materials and roundtrip freight) for the period ended November 30, 2020.

OutlookMr. Ganz concluded, "Looking out to the balance of 2021, we expect revenues for our fiscal first quarter ending February 28th to be approximately $9.2 million. This is slightly below our expectations at the beginning of the quarter, as Byrna suspended essentially all shipments of launchers during the last two weeks of the quarter in order to inspect, test and update more than 8,000 launchers that were in the production pipeline and more than 25,000 safety wires held in inventory. We can confidently state that since Byrna learned of the technical issue on February 12th, every launcher leaving the factory has been reinspected, updated where necessary and retested, and procedures and protocols have been established to prevent a recurrence of this issue. While the end of quarter reduction in shipments will negatively impact Q1 sales, the Company is going into Q2 with an order backlog of approximately $3.0 million."

"With respect to our fiscal second quarter ending May 31st, we expect a slight decline in revenues from our seasonally strong first quarter, which includes the holiday shopping period. Regarding the outlook for full fiscal year 2021 ending November 30th, based on year-to-date sales, our existing backlog, current order rates, our plans to launch multiple new promotional campaigns, our new product launch schedule and the production capacity we have in place, we expect revenues for the full year 2021 to come in between $33 million and $38 million."

"Fiscal 2020 was a year of significant achievement for Byrna, and we expect to build upon this momentum as we progress through 2021 and strive to deliver continued growth, profitability, cash flow and value for our shareholders."

Recent Securities IssuancesOn February 24th, the Board approved the issuance, effective April 18, 2021, of 1.5 million restricted stock units (RSU's) to the Chief Marketing Officer. These RSU's will vest on April 18, 2023, subject to certain stock performance measures. Additionally, the Board approved the grant to two employees, effective March 2nd (the "Effective Date"), of a total of 240,000 options with a five-year term. The options will vest over a three-year period and have an exercise price equal to the highest of (i) $1.49, the closing price on the date of the Board award, (ii) the closing price on March 1st, or (iii) the closing price on the Effective Date, as required by applicable law and exchange rules.

About Byrna Technologies Inc.

Byrna is a technology company, specializing in the development, manufacture, and sale of innovative non-lethal equipment and munitions. 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 HD personal security device, a state of the art handheld CO2 powered launcher with the look and feel of a handgun, designed to provide a less-lethal alternative to a firearm for the consumer, private security, and law enforcement markets. The Byrna HD is engineered with patented designs and proprietary parts. Unlike less-lethal alternative such as pepper spray and stun guns, the Byrna HD has an effective range of up to 60 feet and comes with easily reloadable magazines that can hold multiple .68 caliber hard kinetic rounds or highly chemical irritant and pepper rounds designed to effectively stop an assailant without loss of life or permanent injury. To purchase Byrna products visit the Company's e-commerce store.

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