Byrna Technologies Inc. (NASDAQ:BYRN) Q2 2023 Earnings Call Transcript

Jeff Van Sinderen: Okay. And then just if we could turn to the 12-gauge for a minute. I realize we’re still early in the process there, I know that you’re in some dealers, maybe just kind of update us on where we stand there? How many dealers we’re in at this point? And then any data on early sell throughs, which I’m sure is also being impacted by the marketing challenges?

Bryan Ganz: Yes, we had a lot of success with the 12-gauge at SHOT Show, and we had taken orders for first 250,000 rounds with dealers. And our goal was to get those rounds out, which we have done. We have seen a little bit of reordering, but it’s still too early. I think it’s important to keep in mind that this is a completely new product category. So 12-gauge less-lethal is really not a thing. There are some bean bag rounds and other rounds that have been used by law enforcement, but it’s not really a consumer product. So, we still have a lot of education that we need to do. I will say to you, we are extraordinarily encouraged because nobody has used it and had anything negative to say about it. So we know it is extremely well received and it’s just a matter of word-of-mouth of getting it out there.

What I think has been more interesting for us is the number of law enforcement agencies that have expressed an interest in it. And I can’t discuss the specific agencies, but some of the very largest agencies in the U.S. Less lethal, of course, is an important part of policing. The 12-gauge rounds that they use currently carry between 70 and 110 joules of energy. There was just a story a couple of weeks ago about a bean bag round that was deployed and broke somebody’s jaw and seriously injured the individual. And that agency is particularly looking at Byrna because rather than 70 to 110 joules of energy, we’re at 19 joules of energy. So I think that with the combination of the Biokinetics’ report validating that these rounds are extremely safe.

And with the level of accuracy and effectiveness that we’ve been able to demonstrate that we will continue to see growth. It is a little difficult, Jeff, for us to gauge how quick this growth will come, but we are very encouraged that there is a real market for this and that, over time, this will become an important part of Byrna’s revenue stream.

Jeff Van Sinderen: Okay. Thanks for taking my questions. I’ll take the rest offline.

Bryan Ganz: Thank you.

Operator: Thank you. [Operator Instructions] Our next question is coming from Jim McIlree from Dawson James. Your line is now live.

Jim McIlree: Thank you. Good morning. I’m hoping that you can help me understand the cost differences in advertising through the alternative websites that you discussed versus Meta as well as preliminarily what you think the take rate would be? So, if you have to make up numbers, about 10,000 at Meta in order to get 1,000 in sales, how many would you have to put out on alternative websites? So I’m just trying to again understand the response rates and costs of switching…

Bryan Ganz: Honestly, we don’t have enough information yet. We did not react overnight when Meta banned us, because as I said, in the past, this has happened probably a half dozen times and we were able to reach somebody at Meta, and usually within a month we were back up on Facebook and Instagram. We started to take this very seriously two months into this, and we recognized that this was a different situation that we had faced. So we are in the process of trying to find alternate sources of advertising. We have not yet engaged with any of these different platforms. But — and just to give you an idea of what we’re talking about, there are car magazines, probably a dozen different car magazines, where they send out emails to their subscriber base and those emails have advertising.