Q1 2026 Byrna Technologies Inc Earnings Call

Speaker #1: Operator for today's call. Joining us for today's presentation are the companies' CEO, Con Davis, and CFO, Lauri Kearnes. Following their remarks, we will open the call to questions.

Speaker #1: Earlier today, Byrna released results for the fiscal first quarter ended February 28th, 2026. A copy of the press release is available on the company's website.

Speaker #1: Before turning the call over to Con Davis, Byrna Technologies Chief Executive Officer, I will read the Safe Harbor statement. Some discussions held today including include forward-looking statements, actual results could differ materially from statements made today.

Speaker #1: Please refer to Byrna's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions.

Speaker #1: The company assumes no obligation to update forward-looking statements. As a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release and the investor section of our website ir.byrna.com for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results.

Speaker #3: Joining us for today's presentation are the company's CEO, Con Davis, and CFO, Laurie Kearnes. Following their remarks, we will open the call to questions.

Speaker #1: Now, I would like to turn the call over to Byrna's CEO, Con Davis. Please go ahead, sir.

Speaker #3: Earlier today, Byrna released results for the fiscal first quarter ended February 28, 2026. A copy of the press release is available on the company's website.

Speaker #2: Thank you, Sherri. And thank you, everyone, for joining us today. I want to start by saying how excited I am to be here. This is my first earnings call as CEO of Byrna, and I could not be more energized about the opportunity in front of us.

Speaker #3: Before turning the call over to Con Davis, Byrna Technologies Chief Executive Officer, I will read the Safe Harbor statement. Some discussions held today include forward-looking statements; actual results could differ materially from statements made today.

Speaker #2: Over my first several weeks in the role, I have spent a great deal of time listening, assessing the business, and aligning with the team on where I see the greatest opportunities ahead and where we need to sharpen execution.

Speaker #3: Please refer to Byrna's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions.

Speaker #2: Before I go further, though, I want to take a moment to acknowledge Bryan Ganz. What Bryan built here over the past several years is remarkable.

Speaker #3: The company assumes no obligation to update forward-looking statements as a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release and the investor section at our website ir.byrna.com for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results.

Speaker #2: He took this company from its NASDAQ listing to one that generated $118 million in revenue last year, and built the category leader in less lethal personal defense.

Speaker #2: I am grateful for his leadership and the role he played in building Byrna into what it is today. Now, as I've spent time with the business, it has become even clearer to me why this opportunity is so compelling and why this is the right time for me to step into the role.

Speaker #3: Now, I would like to turn the call over to Byrna's CEO, Con Davis. Please go ahead, sir. Thank you, Shari. And thank you, everyone, for joining us today.

Speaker #2: Byrna is entering a phase where marketing, e-commerce, and operating execution matter enormously. And those are the areas where I believe my experience and skill set can help the business sharpen its focus and improve performance.

Speaker #3: I want to start by saying how excited I am to be here. This is my first earnings call as CEO of Byrna, and I could not be more energized about the opportunity in front of us.

Speaker #2: When I was evaluating this opportunity, four things in particular stood out to me. First, the company's mission spoke to me. At Byrna, we empower people to protect themselves and live safely, without the need for lethal force.

Speaker #3: Over my first several weeks in the role, I have spent a great deal of time listening, assessing the business, and aligning with the team on where I see the greatest opportunities ahead, and where we need to sharpen execution.

Speaker #2: The opportunity to both empower individuals and save lives was truly meaningful to me. Second, the market is enormous relative to where our sales are today.

Speaker #3: Before I go further, though, I want to take a moment to acknowledge Bryan Ganz, what Bryan built here over the past several years is remarkable.

Speaker #3: He took this company from its NASDAQ listing to one that generated $118 million in revenue last year, and built the category leader in less-lethal personal defense.

Speaker #2: At the core of this opportunity is our launcher platform, which addresses a real, and growing need for less lethal personal defense. We have built a strong product and early brand awareness, but the reality is we have only scratched the surface of what this brand can become.

Speaker #3: I am grateful for his leadership and the role he played in building Byrna into what it is today. Now, as I've spent time with the business, it has become even clearer to me why this opportunity is so compelling, and why this is the right time for me to step into the role.

Speaker #2: There are entire consumer segments we have yet to meaningfully engage, and that represents a significant growth opportunity. Third, this company has important strengths already in place.

Speaker #3: Byrna is entering a phase where marketing, e-commerce, and operating execution matter enormously. And those are the areas where I believe my experience and skill set can help the business sharpen its focus and improve performance.

Speaker #2: The balance sheet is in great shape. We have a truly differentiated product offering that addresses a real consumer need and stands apart in the market.

Speaker #2: We have a talented and dedicated team in place. We have a strong manufacturing footprint right here in the United States, and we have a growing retail and dealer footprint that gives us multiple avenues to reach customers.

Speaker #3: When I was evaluating this opportunity, four things in particular stood out to me. First, the company's mission spoke to me. At Byrna, we empower people to protect themselves and live safely without the need for lethal force.

Speaker #2: These are the hallmarks of a business that is poised to accelerate. Fourth, and perhaps most importantly, I believe Byrna is at a phase where stronger execution can translate the strengths already in place into more consistent growth.

Speaker #3: The opportunity to both empower individuals and save lives was truly meaningful to me. Second, the market is enormous relative to where our sales are today.

Speaker #2: The dealer channel is growing, the retail channel is growing, and we have the product innovation pipeline and operational infrastructure to support the next phase of expansion.

Speaker #3: At the core of this opportunity is our launcher platform, which addresses a real and growing need for less-lethal personal defense. We have built a strong product and early brand awareness, but the reality is we have only scratched the surface of what this brand can become.

Speaker #2: Taken together, this is a business with meaningful opportunity ahead. But realizing that opportunity will require sharper execution than the company has demonstrated recently. With that context, let me walk you through how I'm thinking about the business's priorities.

Speaker #3: There are entire consumer segments we have yet to meaningfully engage, and that represents a significant growth opportunity. Third, this company has important strengths already in place.

Speaker #2: First, I am focused on driving deeper penetration to our retail and dealer channels. I believe this represents our single biggest growth opportunity over the next 12 to 18 months.

Speaker #3: The balance sheet is in great shape. We have a truly differentiated product offering that addresses a real consumer need and stands apart in the market.

Speaker #2: We are continuing to expand our brick-and-mortar presence, and we are focused on improving productivity within that footprint. We are investing in store-shooting experiences that bring the product to life for new customers, and working closely with our retail partners to ensure they have the inventory, education, and tools they need to sell effectively.

Speaker #3: We have a talented and dedicated team in place. We have a strong manufacturing footprint right here in the United States. And we have a growing retail and dealer footprint that gives us multiple avenues to reach customers.

Speaker #3: These are the hallmarks of a business that is poised to accelerate. Fourth, and perhaps most importantly, I believe Byrna is at a phase where stronger execution can translate the strengths already in place into more consistent growth.

Speaker #2: The data we are gathering from our own retail locations is already informing how we approach merchandising, marketing, and sell-through, and we intend to use those proprietary insights to sharpen our approach across every channel.

Speaker #3: The dealer channel is growing, the retail channel is growing, and we have the product innovation pipeline and operational infrastructure to support the next phase of expansion.

Speaker #2: Second, we are working to broaden our brand message to reach new audiences and customer segments. Historically, Byrna has spoken most effectively to a narrower slice of the market, and there is a much wider audience that this product and mission can and will resonate with.

Speaker #3: Taken together, this is a business with meaningful opportunity ahead. But realizing that opportunity will require sharper execution than the company has demonstrated recently. With that context, let me walk you through how I'm thinking about the business's priorities.

Speaker #2: We see evidence that Byrna can resonate more broadly when customers engage with the product in a more intuitive and effective way. Whether that is in our own stores, in stronger retail presentations, or through guided tools like our new Find the Right Launcher quiz on byrna.com.

Speaker #3: First, I am focused on driving deeper penetration to our retail and dealer channels. I believe this represents our single biggest growth opportunity over the next 12 to 18 months.

Speaker #3: We are continuing to expand our brick-and-mortar presence, and we are focused on improving productivity within that footprint. We are investing in store shooting experiences that bring the product to life for new customers, and working closely with our retail partners to ensure they have the inventory education and tools they need to sell effectively.

Speaker #2: I will come back to that new tool in a moment, but it is one example of how we can do a better job helping a broader audience understand what product is right for them and why.

Speaker #2: Whether it's an early-morning runner, a college student walking to their car, or a family on a campout, we believe Byrna can become a more relevant and accessible solution for a wider set of customers.

Speaker #3: The data we are gathering from our own retail locations is already informing how we approach merchandising, marketing, and sell-through. And we intend to use those proprietary insights to sharpen our approach across every channel.

Speaker #2: That means evolving our message to be more emotionally resonant and more relevant to people's everyday lives. We want our customers to understand and feel that Byrna Launchers are there to keep them safe and provide confidence in their ability to protect themselves, in real-world situations.

Speaker #3: Second, we are working to broaden our brand message to reach new audiences and customer segments. Historically, Byrna has spoken most effectively to a narrower slice of the market, and there is a much wider audience that this product and mission can and will resonate with.

Speaker #2: As one part of this change, we plan to evolve our influencer strategy to be more inclusive. Reaching a broader and more diverse set of customers through a new and more impactful media channels.

Speaker #3: We see evidence that Byrna can resonate more broadly when customers engage with the product in a more intuitive and effective way. Whether that is in our own stores, in stronger retail presentations, or through guided tools like our new 'Find the Right Launcher' quiz on byrna.com.

Speaker #2: The less lethal personal defense category should speak to far more people than it currently does, and we intend to lead that conversation. Third, we are establishing a clear financial algorithm that will help ensure our growth flows through to the bottom line.

Speaker #3: I will come back to that new tool in a moment, but it is one example of how we can do a better job helping a broader audience understand what product is right for them and why.

Speaker #2: We will be disciplined in how we deploy capital, focused on improving inventory turns, and committed to leveraging our cost structure so that every incremental dollar of revenue drives meaningful improvement in EBITDA and cash generation.

Speaker #3: Whether it's an early morning runner, a college student walking to their car, or a family on a campout, we believe Byrna can become a more relevant and accessible solution for a wider set of customers.

Speaker #2: Growth is important, but profitable growth is the goal. With that in mind, we are working to ensure our expanding retail footprint grows the top line and meaningfully improves our cash conversion.

Speaker #3: That means evolving our message to be more emotionally resonant and more relevant to people's everyday lives. We want our customers to understand and feel that Byrna Launchers are there to keep them safe and provide confidence in their ability to protect themselves in real-world situations.

Speaker #2: Additionally, with our 33 million dollars in inventory, we have a significant opportunity to optimize our working capital and use that cash to invest in our brand strategy.

Speaker #2: I also want to be clear about our capital allocation philosophy. The highest and best use of our investment dollars right now is in the core of the Byrna business.

Speaker #3: As one part of this change, we plan to evolve our influencer strategy to be more inclusive, reaching a broader and more diverse set of customers through new and more impactful media channels.

Speaker #2: We are long on the launcher market, and we will continue to invest accordingly. That said, we will remain thoughtful about selective opportunities that can enhance our product portfolio and expand how we address the needs of the marketplace.

Speaker #3: The less-lethal personal defense category should speak to far more people than it currently does, and we intend to lead that conversation. Third, we are establishing a clear financial algorithm that will help ensure our growth flows through to the bottom line.

Speaker #2: We have an incredible opportunity ahead of us, and I am excited to be here to help capitalize it. With that, I will turn the call over to our CFO, Laurie Kearns, to walk you through the financial results for the quarter.

Speaker #3: We will be disciplined in how we deploy capital, focused on improving inventory turns, and committed to leveraging our customer structure so that every incremental dollar of revenue drives meaningful improvement in EBITDA and cash generation.

Speaker #2: Laurie?

Speaker #1: Thank you, Con, and good morning, everyone. Let's review our financial results for fiscal Q1 ended February 28th, 2026. Net revenue for Q1 2026 was 29 million, and 11% increase from the 26.2 million reported in the fiscal first quarter of 2025.

Speaker #3: Growth is important, but profitable growth is the goal. With that in mind, we are working to ensure our expanding retail footprint grows the top line and meaningfully improves our cash conversion.

Speaker #1: The increase was driven primarily by continued sales expansion across dealer and chain store channels, partially offset by typical post-holiday seasonal moderation in the quarter, and lower website.

Speaker #3: Additionally, with our $33 million in inventory, we have a significant opportunity to optimize our working capital and use that cash to invest in our brand strategy.

Speaker #3: I also want to be clear about our capital allocation philosophy. The highest and best use of our investment dollars right now is in the core of the Byrna business.

Speaker #1: Gross profit for Q1 2026 was 17.4 million, or 60% of net revenue. Compared to 15.9 million, or 61% of net revenue for Q1 2025.

Speaker #3: We are long on the launcher market, and we will continue to invest accordingly. That said, we will remain thoughtful about selective opportunities that can enhance our product portfolio and expand how we address the needs of the marketplace.

Speaker #1: The increase in gross profit was driven by the increase in overall sales. The modest change in gross margin was primarily due to the greater contribution of dealer and chain store sales.

Speaker #3: We have an incredible opportunity ahead of us, and I am excited to be here to help capitalize on it. With that, I will turn the call over to our CFO, Laurilee Kearnes, to walk you through the financial results for the quarter.

Speaker #1: We do expect to see gross margin expansion in the back half of the year given continued changes in the product mix, modest price increases that we implemented late in the first quarter, and continued efficiency improvement in manufacturing.

Speaker #3: Laurie?

Speaker #2: Thank you, Con. And good morning, everyone. Let's review our financial results for fiscal Q1 ended February 28, 2026. Net revenue for Q1 2026 was $29 million, an 11% increase from the $26.2 million reported in the fiscal first quarter of 2025.

Speaker #1: Operating expenses for Q1 2026 were 16.5 million, compared to 14.2 million, for Q1 2025. The 16% increase reflects higher advertising expenses and marketing costs to support revenue growth through the expansion of retail distribution and initiatives aimed at increasing brand awareness and conversion.

Speaker #2: The increase was driven primarily by continued sales expansion across dealer and chain store channels, partially offset by typical post-holiday seasonal moderation in the quarter and lower conversion rates on our website.

Speaker #1: We also incurred higher costs for legal and other professional fees during the quarter. Net income for Q1 2026 was 0.8 million, compared to 1.7 million for Q1 2025.

Speaker #2: Gross profit for Q1 2026 was 17.4 million, or 60% of net revenue. Compared to 15.9 million, or 61% of net revenue for Q1 2025.

Speaker #1: Adjusted EBITDA and non-GAAP metric for Q1 2026 totaled 2.2 million, compared to 3 million for Q1 2025. Cash-cash equivalents and marketable securities at February 28th, 2026, totaled 9.6 million, compared to 15.5 million at November 30th, 2025.

Speaker #2: The increase in gross profit was driven by the increase in overall sales. The modest change in gross margin was primarily due to the greater contribution of dealer and chain store sales.

Speaker #2: We do expect to see gross margin expansion in the back half of the year given continued changes in the product mix, modest price increases that we implemented late in the first quarter, and continued efficiency improvement in manufacturing.

Speaker #1: The decrease in cash was primarily driven by payment of year-end bonuses and other accrued payables. Inventory on February 28th, 2026, totaled 33.1 million, compared to 32.7 million on November 30th, 2025.

Speaker #2: Operating expenses for Q1 2026 were 16.5 million, compared to 14.2 million for Q1 2025. The 16% increase reflects higher advertising expenses and marketing costs to support revenue growth through the expansion of retail distribution and initiatives aimed at increasing brand awareness and conversion.

Speaker #1: As Con mentioned, we are focused on decreasing the inventory levels to improve our working capital. I will now pass the call back to Con for additional insights into our performance and future.

Speaker #1: Con?

Speaker #2: We also incurred higher costs for legal and other professional fees during the quarter. Net income for Q1 2026 was $0.8 million, compared to $1.7 million for Q1 2025.

Speaker #2: Thank you, Laurie. Our first quarter results reflect real demand for our solutions, while also highlighting areas where we see clear opportunities to improve execution.

Speaker #2: I'd like to address a few specific areas from the quarter. On e-commerce, Byrna.com remains our flagship digital destination and our most mature channel. Conversion did not perform to our expectations in the quarter, and we are taking direct action to address that.

Speaker #2: Adjusted EBITDA and non-GAAP metric for Q1 2026 totaled $2.2 million, compared to $3 million for Q1 2025. Cash, cash equivalents, and marketable securities at February 28, 2026, totaled $9.6 million, compared to $15.5 million at November 30, 2025.

Speaker #2: The underlying issue is not a lack of interest in the product, through much of '25 into the start of 2026, traffic to Byrna.com remained relatively stable outside of promotional periods.

Speaker #2: The decrease in cash was primarily driven by payment of year-end bonuses and other approved payables. Inventory on February 28, 2026, totaled $33.1 million, compared to $32.7 million on November 30, 2025.

Speaker #2: But conversion moved materially lower, and average order value also began to come under pressure in fiscal Q1. To put that more concretely, average daily sessions in January/February and March were approximately 37,000, 40,000, and 34,500, respectively.

Speaker #2: As Con mentioned, we are focused on decreasing the inventory levels to improve our working capital. I will now pass the call back to Con for additional insights into our performance and future.

Speaker #2: While conversion was about 0.68%, 0.64%, and 0.54%. March traffic was roughly in line with April 2025, when average daily sessions were also about 34,500.

Speaker #2: Con?

Speaker #3: Thank you, Laurie. Our first quarter results reflect real demand for our solutions, while also highlighting areas where we see clear opportunities to improve execution.

Speaker #2: But conversion in March was materially lower than the roughly 0.94 conversion we saw last April and the roughly 1.17% we saw in May of last year.

Speaker #3: I'd like to address a few specific areas from the quarter. On e-commerce, Byrna.com remains our flagship digital destination and our most mature channel. Conversion did not perform to our expectations in the quarter, and we are taking direct action to address that.

Speaker #2: That tells us the issue is not simply traffic generation, it is how effectively we are converting that traffic. We're over-indexed on a static audience.

Speaker #3: The underlying issue is not a lack of interest in the product. Through much of '25 into the start of 2026, traffic to Byrna.com remained relatively stable outside of promotional periods.

Speaker #2: And when new customers do arrive, we're still speaking to the gun enthusiast. Failing to align the brand to their needs, or educate them on the product.

Speaker #3: But conversion moved materially lower, and average order value also began to come under pressure in fiscal Q1. To put that more concretely, average daily sessions in January, February, and March were approximately 37,000, 40,000, and 34,500, respectively.

Speaker #2: That is a clear execution issue, and one we are actively addressing. We are investing to meaningfully improve the online experience by making it easier for customers to understand the product, compare our launcher lineup, and ultimately make a purchase with confidence.

Speaker #2: Customers who can't experience the product in person need to feel that same level of confidence online. We've recently launched a Find the Right Launcher experience on Byrna.com to guide consumers to the right choice for their needs and location.

Speaker #3: While conversion was about 0.68%, 0.64%, and 0.54%. March traffic was roughly in line with April 2025, when average daily sessions were also about 34,500.

Speaker #2: That tool has already generated more than 30,000 responses and is converting at roughly twice the rate of the overall site. While also giving us richer data on who is coming to Byrna.com, what they are looking for, and how familiar they are with the category.

Speaker #3: But conversion in March was materially lower than the roughly 0.94% conversion we saw last April and the roughly 1.17% we saw in May of last year.

Speaker #3: That tells us the issue is not simply traffic generation; it is how effectively we are converting that traffic. We're over-indexed on a static audience.

Speaker #2: We think that is an important first step in improving education, strengthening conversion, and building a better website experience over time. We've also begun shifting the landing page message away from a weapon-first framing toward a safety and use-case-first approach, one that will be more emotionally resonant with a broader audience.

Speaker #3: And when new customers do arrive, we're still speaking to the gun enthusiast, failing to align the brand to their needs or educate them on the product.

Speaker #3: That is a clear execution issue, and one we are actively addressing. We are investing to meaningfully improve the online experience by making it easier for customers to understand the product, compare our launcher lineup, and ultimately make a purchase with confidence.

Speaker #2: This initial change is part of a much broader shift that you will see across our materials in the coming months. We also launched the Byrna CL/XL in February.

Speaker #2: This is a product we are genuinely excited about. And while early customer engagement in-store has been strong, overall performance to date has not yet met our expectations.

Speaker #3: Customers who can't experience the product in person need to feel that same level of confidence online. We've recently launched a Find the Right Launcher experience on Byrna.com to guide consumers to the right choice for their needs and location.

Speaker #2: Just like the Byrna CL, we have found that when customers see it in our company-owned retail locations, they gravitate towards it strongly. In fact, during March, in our retail stores, the combined CL and CL/XL made up almost 80% of launcher sales.

Speaker #3: That tool has already generated more than 30,000 responses and is converting at roughly twice the rate of the overall site, while also giving us richer data on who is coming to Byrna.com, what they are looking for, and how familiar they are with the category.

Speaker #2: The challenge is that we are not yet telling that story effectively online, or with our retail partners. We are not drawing a clear enough contrast between our launchers or giving customers a compelling reason to choose the CL/XL, over our other products.

Speaker #3: We think that is an important first step in improving education, strengthening conversion, and building a better website experience over time. We've also begun shifting the landing page message away from a weapon-first framing toward a safety and use case-first approach, one that will be more emotionally resonant with a broader audience.

Speaker #2: That is a marketing and merchandising challenge, not a product challenge, and it is one we are actively working to solve. Turning to our big box retail distribution, we continue to be encouraged by the trajectory of these relationships.

Speaker #3: This initial change is part of a much broader shift that you will see across our materials in the coming months. We also launched the Byrna CL/XL in February.

Speaker #2: The holiday season provided important lessons around inventory planning and stocking levels, and we are working closely with our partners to ensure they are well-positioned, heading into the rest of the year.

Speaker #3: This is a product we are genuinely excited about. And while early customer engagement in-store has been strong, overall performance to date has not yet met our expectations.

Speaker #2: We are seeing encouraging early indicators of sell-through across key partners, particularly in stores where customers are engaging with the product directly. At one retail partner, where we now have year-over-year comparables, same-store sales increased roughly 164% in Q1 and 92% in March.

Speaker #3: Just like the Byrna CL, we have found that when customers see it in our company-owned retail locations, they gravitate towards it strongly. In fact, during March, in our retail stores, the combined CL and CL/XL made up almost 80% of launcher sales.

Speaker #2: Even before the benefit of additional in-cap or shelf display programs. Similarly, stores with dedicating shooting experiences, our generating roughly three times the sales of non-shooting experience stores.

Speaker #3: The challenge is that we are not yet telling that story effectively online or with our retail partners. We are not drawing a clear enough contrast between our launchers or giving customers a compelling reason to choose the CL/XL over our other products.

Speaker #2: Those data points reinforce our view that merchandising decisions can materially improve awareness, education, and overall retail velocity. At this stage, our priority is optimizing performance within our existing store base through better inventory planning, appropriate in-stock positioning, and closer coordination with our partners on stock levels and reorder cadence.

Speaker #3: That is a marketing and merchandising challenge, not a product challenge, and it is one we are actively working to solve. Turning to our big box retail distribution, we continue to be encouraged by the trajectory of these relationships.

Speaker #3: The holiday season provided important lessons around inventory planning and stocking levels, and we are working closely with our partners to ensure they are

Speaker #2: We are continuing to support our partners with the tools and merchandising needed to drive productivity at the store level. We are also seeing encouraging data in our Byrna-owned retail stores.

Speaker #1: Are well positioned heading into the rest of the year . We are seeing encouraging early indicators of sell through across key partners , particularly in stores where customers are engaging with the product directly at one retail partner , where we now have year over year comparables , same store sales , increased roughly 164% in Q1 , and 92% in March Even before the benefit of additional nCap or shelf display programs Similarly , stores with dedicated shooting experiences are generating roughly three times the sales of Non-shooting experienced stores Those data points reinforce our view that merchandising decisions can materially improve awareness , education and overall retail velocity at this stage , our priority is optimizing performance within our existing store base through better inventory planning , appropriate in-stock positioning and closer coordination with our partners on stock levels , and reorder cadence .

Speaker #2: In March, sales across Byrna-owned retail grew 16% year-over-year and conversion approved from the low 60s in April 2025 to the high 60s in March 2026.

Speaker #2: Our existing store base also gives us a much stronger platform from which to further expand the physical footprint in 2026. We entered 2025 with approximately 200 chain stores and a 700 total store footprint.

Speaker #2: We entered 2026 with approximately 900 chain stores and a 1,500 total store footprint. And we expect to expand that further this year through additional chain store growth and targeted dealer additions.

Speaker #2: By the end of 2026, we currently expect Byrna to be in around 2,000 total locations including big box retail and dealers nationwide. Included in this growth, we are excited about our new partnership with Academy Sports and Outdoors.

Speaker #1: We are continuing to support our partners with the tools and merchandising needed to drive productivity at the store level. We are also seeing encouraging data in our Byrna-owned retail stores.

Speaker #2: We are beginning with an initial rollout of approximately 50 stores during Q2, with the opportunity to expand from there. Regionally, Academy has a strong presence in Texas and across the Southeast US.

Speaker #1: In March, sales across Byrna-owned retail grew 16% year over year, and conversion improved from the low 60s in April 2025 to the high 60s in March 2026.

Speaker #2: An area where Byrna has not historically had a strong store presence. By the end of 2026, we are targeting Byrna to be available at roughly 200 to 250 Academy locations.

Speaker #1: Our existing store base also gives us a much stronger platform from which to further expand the physical footprint. In 2026, we entered 2025 with approximately 200 chain stores and a 700 total store footprint.

Speaker #2: However, our expansion in retail isn't just about store count. It's about retail velocity. At Bass Pro, for example, we are moving from behind the glass in the firearm section to test high-traffic in-caps.

Speaker #1: We entered 2026 with approximately 900 chain stores and a 1,500 total store footprint, and we expect to expand that further this year through additional chain store growth and targeted dealer additions.

Speaker #2: This is a critical distinction. Behind the glass requires a salesperson, while on the in-cap allows for self-discovery. Moreover, it provides us with another opportunity to leverage enhanced merchandising to express the Byrna brand and educate consumers in the retail setting.

Speaker #1: By the end of 2026, we currently expect Byrna to be in around 2,000 total locations, including big box retail and dealers nationwide. Included in this growth, we are excited about our new partnership with Academy Sports and Outdoors.

Speaker #2: As we scale towards 2,000 total stores by year-end, our focus is to continue driving toward an experiential and frictionless retail model, ensuring Byrna is seen as an accessible easy-to-use personal safety device rather than a weapon.

Speaker #1: We are beginning with an initial rollout of approximately 50 stores during Q2 , with the opportunity to expand from there regionally Academy has a strong presence in Texas and across the southeast US , an area where Burna has not historically had a strong store presence By the end of 2026 , we are targeting Burna to be available at roughly 200 to 250 Academy locations However , our expansion in retail isn't just about store count .

Speaker #2: We have also recently added Murdoch's Ranch and Home Supply. A regional retailer with strong presence across the Mountain West, and we look forward to building that relationship further.

Speaker #2: Our initial rollout with Murdoch's will be in 14 of their locations with freestanding displays by the end of Q2. And we are targeting Byrna to be available in approximately 30 locations by year-end.

Speaker #1: It's about retail velocity at Bass Pro , for example , we are moving from behind the glass in the firearm section to test high traffic end caps This is a critical distinction behind the class requires a salesperson while on the end cap allows for self-discovery Moreover , it provides us with another opportunity to leverage enhanced merchandising to express the burn of brand and educate consumers in the retail setting .

Speaker #2: From a geographic perspective, we are becoming well-established across much of the western United States, and we continue to evaluate targeted physical store expansions to fill in gaps strategically.

Speaker #2: Historically, much of our dealer growth was driven by a passive, inbound approach. Dealers frequently come to us, and to date, the strategy was to evaluate and launch in areas where an incremental dealer may be accretive.

Speaker #2: We've now shifted to a proactive, outbound strategy, and we will be looking to add dealers in selected whitespace markets where we believe additional dealer coverage can support broader brand awareness and retail productivity.

Speaker #1: As we scale towards 2000 total stores by year end , our focus is to continue driving toward an experiential and frictionless retail model , ensuring Burna is accessible , easy to use personal safety device rather than a weapon We have also recently added Murdoch's ranch and home supply , a regional retailer with strong presence across the Mountain West , and we look forward to building that relationship further .

Speaker #2: We are seeing healthy momentum in our dealer channel overall. In Q1, our premier dealers grew 60% year-over-year, and our top 20 dealers grew 55% year-over-year.

Speaker #2: While that is not a perfect same-store comparison, it reinforces our view that the opportunity in physical distribution is substantial and sell-through remains strong. The expected year-over-year growth in our brick-and-mortar channel this year is meaningful, and it will be an important step in broadening Byrna's brand presence in 2026.

Speaker #1: Our initial rollout with Murdoch's will be in 14 of their locations , with freestanding displays by the end of Q2 , and we are targeting Burna to be available in approximately 30 locations by year end From a geographic perspective , we are becoming well established across much of the Western United States , and we continue to evaluate targeted physical store expansions to fill in gaps strategically Historically , much of our dealer growth was driven by a passive inbound approach .

Speaker #2: On the channel mix more broadly, we expect our brick-and-mortar sales to continue growing faster than our most mature channel, Byrna.com, in 2026. This is a normal and healthy evolution for a brand at our stage, but as I mentioned earlier, we have an immediate focus on further improving conversion on Byrna.com and making sure the channels work together more effectively.

Speaker #1: Dealers frequently come to us, and to date, the strategy was to evaluate and launch in areas where an incremental dealer may be accretive.

Speaker #1: We've now shifted to a proactive outbound strategy, and we will be looking to add dealers in selected flight space markets where we believe additional dealer coverage can support broader brand awareness and retail productivity. We are seeing healthy momentum in our dealer channel overall in Q1.

Speaker #2: We are also seeing a continued shift in product mix, with the CL platform representing an increasing percentage of unit sales. Across the portfolio, from the SD to the LE to the CL and the CLXL, we offer a range of products at different price points, allowing us to serve a broad set of customers and use cases.

Speaker #1: Our premier dealers grew 60% year over year , and our top 20 dealers grew 55% year over year While that is not a perfect same store comparison , it reinforces our view that the opportunity in physical distribution is substantial and sell through remains strong .

Speaker #2: The SD and LE continue to serve as important entry points, particularly for more price-sensitive customers. While the CL platform is contributing to the mix shift towards higher margin products, we are seeing that the higher-end CL is performing particularly well in retail environments, where customers can engage with the product directly.

Speaker #1: The expected year over year growth in our brick and mortar channel this year is meaningful , and it will be an important step in broadening Berner's brand presence in 2026 .

Speaker #2: Reinforcing our focus on expanding and optimizing our physical store performance with improved in-store presentation, merchandising, and customer education. Turning to marketing, we are prioritizing the evolution of our message.

Speaker #2: This is a key area for us, and we see it as one of the most important levers to drive improved performance across the business.

Speaker #2: We believe there is meaningful opportunity to improve how we communicate, the value of our products, and convert that into real, sustainable demand. Historically, Byrna has focused on the early adopter, the tactical and self-defense enthusiast.

Speaker #2: While that core remains important, our future growth lies in the normalization of less lethal protection for more everyday use cases. We know our products resonate with a wider audience when they are presented, merchandised, and explained effectively.

Speaker #2: Our focus is now on translating that broader relevance into more consistent sales by improving how the customers encounter, understand, and purchase the product across every touchpoint.

Speaker #2: To be effective, these changes will extend across all of our go-to-market channels, as we build an integrated brand and experience everywhere customers interact with Byrna.

Speaker #2: Our goal is to meet customers wherever they are and ensure they can engage with and purchase our products in a simple, convenient way for them.

Speaker #2: To accomplish this, we are refining how we approach marketing to reach customers more effectively across channels. This includes shortening and improving the effectiveness of our creative so it is more impactful.

Speaker #2: Enhancing the website experience to better guide customers through the lineup and educate consumers who are new to the category. Optimizing our influencer strategy and messaging to better align with the customer segments we are targeting as we broaden the brand.

Speaker #2: Shifting our media and messaging towards more effective channels including social media. And being more targeted in how we deploy media and markets where we have strong retail store coverage.

Everyday, Use cases.

We know our products resonate with the wider audience when they are presented merchandise and explained effectively.

Speaker #2: More broadly, we are focused on allocating marketing dollars more effectively and building a more structured, data-driven approach where we can track performance and demonstrate progress over time.

Our focus is now on translating that broader relevance into more consistent sales by improving how the customers encounter, understand, and purchase the product across every touch point.

Speaker #2: Our objective is to better connect awareness to conversion, whether that occurs online or in-store, and to do that with more consistency than we have demonstrated recently.

To be effective, these changes will extend across all of our go-to-market channels as we build an integrated brand and experience everywhere. Customers interact with Byrnas

Speaker #2: On the manufacturing side, we are continuing to drive lean manufacturing and continuous improvement initiatives at our Fort Wayne facility to deliver margin improvement. We believe this combined with a tighter focus on inventory planning will help improve inventory turns and support stronger cash conversion over time.

Our goal is to meet customers wherever they are and ensure they can engage with and purchase our products in a simple, convenient way for them.

To accomplish this, we are refining how we approach marketing to reach customers more effectively across channels. This includes

Speaker #2: We have already taken steps to reduce our build rate so that inventory can come down rather than continue to grow. And we have reduced headcount at the plant accordingly.

Shortening and improving the effectiveness of our creative so it is more impactful.

Enhancing the website experience to better guide customers' lineup and educate consumers who are new to the category.

Speaker #2: We are also making progress on our next-generation modular platform, which is intended to simplify the launcher architecture significantly and reduce component count and labor requirements, and ultimately lower costs.

Optimizing our influencers, our strategy, and messaging to better align with the customer segments we are targeting as we broaden the brand.

Shifting our media and messaging towards more effective channels, including social media.

Speaker #2: The initial platform will be centered around our 61-caliber system and we are making strong progress towards a launch in the beginning of 2027. With the broader rollout extending through next year.

And being more targeted in how we deploy media and markets, where we have strong retail store coverage.

Speaker #2: It's early, but we're encouraged by the progress and believe this platform will be a meaningful step forward in both product performance and manufacturing efficiency.

More broadly, we are focused on allocating marketing dollars more effectively and building a more structured, data-driven approach where we can track performance and demonstrate progress over time.

Speaker #2: Looking ahead to Q2, I have spent my first weeks on the job aligned around one clear objective: winning the fight for revenue while simultaneously building the long-term foundation.

Our objective is to better connect awareness to conversion, whether that encourages online or in-store, and to do that with more consistency than we have demonstrated recently.

Speaker #2: Based on what we are seeing today, fiscal Q2 is developing materially below our expectations and below both the year-over-year and sequential improvement we would ultimately expect this business to deliver.

On the manufacturing side, we are continuing to drive lean manufacturing and continuous improvement initiatives at our Fort Wayne facility to deliver margin improvement. We believe this, combined with a tighter focus on inventory planning, will help improve inventory turns and support stronger cash conversion over time.

Speaker #2: Part of that reflects a tougher comparison against last year's fiscal second quarter, which benefited from the CL launch and initial load-in orders with new retail partners, of roughly 2.7 million dollars.

We have already taken steps to reduce our build rate, so that inventory can come down rather than continue to grow, and we have reduced headcount at the plant accordingly.

Speaker #2: To help offset this, we will have our initial retail load-in orders from new partners in Q2 and expect total retail load-in orders in the quarter to exceed 300,000 dollars.

We are also making progress on our next-generation modular platform, which is intended to simplify the launcher architecture, significantly reduce component count and labor requirements, and ultimately lower costs.

Speaker #2: These orders will help boost our floor for the quarter, but given the recent conversion data for March, we understand that we need to be thoughtful and expedious about the changes we are making to how we manage demand generation, website conversion, retail productivity, and inventory.

The initial platform will be centered around our .61 caliber system, and we are making strong progress towards a launch in the beginning of 2027.

With the broader rollout, extending through next year.

Speaker #2: We believe those changes are necessary and they make near-term results more variable and less suitable for providing formal quarterly guidance until we have a better operating consistency and stronger visibility.

It's early, but we're encouraged by the progress and believe this platform will be a meaningful step forward in both product performance and manufacturing efficiency.

Speaker #2: Performance is not where we want it to be, and I want to be direct about the primary reasons for that. First, the business exited fiscal Q1 with a weaker starting point for Q2 than we should have.

Looking ahead to Q2, I have spent my first weeks on the job aligned around one clear objective: winning. The fight for revenue while simultaneously building the long-term foundation.

Speaker #2: In part because of late quarter promotional and merchandising actions, concentrated more purchases into Q1 than would normally be the case. Second, Byrna.com continues to underperform our expectations.

Based on what we are seeing today, fiscal Q2 is developing materially below our expectations and below both the year-over-year and sequential improvement we would ultimately expect this business to deliver.

Speaker #2: Site traffic has remained relatively stable, however, conversion has declined materially, partially due to the growth of our retail channel and average order value has come under pressure.

Part of that reflects a tough tougher comparison against last year's fiscal, second quarter, which benefited from the CL launch and initial load in orders with new Retail Partners of roughly 2.7 million dollars.

Speaker #2: This tells us the issue is not simply demand generation. But the effectiveness of our website and our conversion path. Third, while our retail and dealer expansion continues to build a larger base for growth, the contribution from newer chain store openings is expected to build more meaningfully in the back half of 2026, consistent with brand patterns we saw in 2025.

To help offset this, we will have our initial retail load and orders from new partners in Q2 and expect total retail load in orders in the quarter to exceed $300,000.

These orders will help boost our floor for the quarter, but given the recent conversion data for March, we understand that we need to be thoughtful and expedite the changes we are making to how we manage demand, Generation website, conversion, retail, productivity, and inventory.

Speaker #2: The operational changes we are making are necessary to improve the business over time. But they are not changes that will fully move through the system in a matter of weeks.

Speaker #2: We are focused on improving conversion, strengthening retail productivity, and executing more effectively across channels. Which we believe will better position us to build top-line momentum as we move through the back half of the year.

We believe those changes are necessary, and they make near-term results more variable and less suitable for providing formal quarterly guidance until we have better operating consistency and stronger visibility.

Performance is not where we want it to be, and I want to be direct about the primary reasons for that.

Speaker #2: Just as importantly, we are going to be much more active in identifying areas for improving improvement, addressing them directly, and making the changes needed to improve the business.

First, the business exited fiscal Q1 with a weaker starting point for Q2 than we should have, in part because of late quarter promotional and merchandising actions, which concentrated more purchases into Q1 than would normally be the case.

Speaker #2: We are actively working to improve the quarter in front of us, but we are doing so in a way that supports stronger execution and healthier momentum through the balance of 2026.

Used to underperform our expectations.

Site traffic has remained relatively stable; however, conversion has declined materially.

Speaker #2: Going forward, we do not plan to continue the prior practice of pre-announcing quarterly revenue. During this period of tightening operational execution, and strengthening forecasting capability, we believe providing a single early revenue data point can provide an incomplete picture of the business.

Partially due to the growth of our retail channel, average order value has come under pressure.

This tells us the issue is not simply demand generation, but the effectiveness of our website and our conversion path.

Third, while our retail and dealer expansion continues to build a larger base for growth.

Speaker #2: Our focus is on improving the underlying operations, financial forecasting, and visibility needed to provide investors with better context through our regular reporting process. In closing, we are aligning the entire organization around a clear set of objectives and measures.

The contribution from newer chain store openings is expected to build more meaningfully in the back half of 2026, consistent with brand patterns we saw in 2025.

The operational changes we are making are necessary to improve the business over time.

Speaker #2: These are not glamorous initiatives, but they are the right ones to drive consistent performance and they will compound. We believe this is the right moment for Byrna to lean in and execute with focus.

But they are not changes that will fully move through the system. In a matter of weeks, we are focused on improving conversion.

Speaker #2: We are investing in the customer experience. Working to expand our reach to new audiences and strengthening the operational foundation of the business. That is the mindset of the category leader and that is what we intend to be.

Shrinking retail productivity and executing more effectively across channels, which we believe will better position us to build topline momentum as we move through the back half of the year.

Just as importantly, we are going to be much more active in identifying areas for improving improvement.

Addressing them directly and making the changes needed to improve the business.

Speaker #2: I am incredibly proud to be a part of this team. I am grateful to the employees, partners, and shareholders who have helped build Byrna into what it is today.

We are actively working to improve the quarter in front of us, but we are doing so in a way that supports stronger execution and healthier momentum through the balance of 2026.

Speaker #2: I am deeply committed to the mission at the heart of this company: providing people with safe, reliable, and effective options to protect themselves and their families without resorting to lethal force.

Going forward, we do not plan to continue the prior practice of pre-announcing quarterly revenue.

Speaker #2: The mission matters. It resonates, and it is far from fully realized. We have the brand, the team, the manufacturing, the balance sheet, and the distribution foundation to improve from here.

During this period of tightening, operational execution, and strengthening forecasting capability, we believe providing a single early revenue data point can provide an incomplete picture of the business.

Speaker #2: I look forward to demonstrating that through consistent execution in the quarters ahead. With that, I am now prepared to take questions from our covering analysts.

Our focus is on improving the underlying operations, financial forecasting, and visibility needed to provide investors with better context through our regular reporting process.

Speaker #2: Sherry? Thank you. The company will now be taking questions from sell-side analysts. If you would like to ask a question, please press star one on your telephone keypad.

In closing, we are aligning the entire organization around a clear set of objectives and measures. These are not glamorous initiatives, but they are the right ones to drive consistent performance, and they will compound.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #2: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit to one question and one follow-up question.

We believe this is the right moment for Byrna to lean in and execute with focus. We are investing in the customer experience, working to expand our reach to new audiences, and strengthening the operational foundation of the business.

That is the mindset of a category leader, and that is what we intend to be.

Speaker #2: Our first question is from Jeremy Hamblin with Craig Hallam Capital Group. Please proceed.

Speaker #3: Thanks for taking the question. So just wanted to start off by seeing if we can get a little more detail behind the revenue commentary, it sounds like you're expecting sales to be down in Q2 on a year-over-year basis.

I am incredibly proud to be a part of this team. I am grateful for the employees partners and shareholders, who have helped build Burna into what it is today.

I am deeply committed to the mission at the heart of this company: providing people with safe, reliable, and effective options to protect themselves and their families without resorting to lethal force.

The mission matters; it resonates, and it is far from fully realized.

Speaker #3: Based on what you saw in the March period, presumably you're expecting wholesale to be up on a year-over-year basis. But DTC channel to be meaningfully down.

We have the brand, the team, the manufacturing, the balance sheet, and the distribution foundation to improve from here.

I look forward to demonstrating that through consistent execution in the quarters ahead.

Speaker #3: It sounds like you're kind of targeting something. 25 million dollar range. But I wanted to see if you could provide at least a little more color.

With that, I am now prepared to take questions from our covering analyst, Sherry.

Speaker #3: I know you're not providing formal guidance per se, but just based on the commentary around conversion rates, which sound like they're down pretty steeply.

Speaker #3: Is that a pretty fair interpretation of what you're saying?

Speaker #4: Hi, Jeremy. It's Laurie. Thanks for the question. Yes, I would agree that that's what we're saying. We do expect to be down meaningfully year-over-year and compared to Q1.

Thank you. The company will now be taking questions from Southside analysts. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up question.

Speaker #4: Remember, we did have a con pointed out. We had inventory load-in for some of the new retail partners that 2.7 million versus we're going to have 300,000 this year.

Our first question is from Jeremy Hamlin with Craig Callum Capital Group. Please proceed.

Speaker #4: So that's a pretty meaningful change. And really, Berna.com and what we're seeing online, the conversion rates are much lower with similar web traffic coming to the store.

Speaker #4: So we did benefit in Q2 last year of the CL launch coming out. That had some significant sales. So we do have some of that year-over-year pressure, but we do expect it to be down significantly.

Speaker #3: And then to that point, I wanted to get underneath the average order values, declining. In particular, online. So just help us understand that, given that it sounds like the CL has been taking share overall, but maybe that's not the case in the DTC channel.

Thanks for taking the question. Um, so just wanted to to start off by by seeing if we can, uh, get a little more detail behind, um, you know, the revenue commentary. It sounds like you're expecting, um, you know, sales to be down in, Q2, on a year-over-year basis, uh, based on what you saw in the March, um, period. Presumably, You're Expecting wholesale to be up on a year-over-year basis, but DTC channel to be meaningfully down. It sounds like you're kind of targeting something more in like, the 2 5,

Speaker #3: I wanted to see if you could comment on that or if the AOVs are falling because you're not getting the same type of accessory attachments in those orders.

Um, is that a pretty fair interpretation of what you're saying?

Speaker #3: But just help us to understand why those AOVs are falling, given that you have a more expensive CL launcher now and you've taken price, I believe, in early 2026 on the SD and the LE.

Speaker #5: Hi, Jeremy. Thank you for that. I would say there are a couple of factors driving that. First, you're right. We did take some price.

Speaker #5: But the CL mix is not as high online as it is in our retail stores. And that goes back to the conversation I was having earlier where we aren't telling the story well enough on Berna.com to drive that upsell into the CL platform.

Hi Jeremy, it's Larry. Um, thanks for the question. Yes. I I would agree that. That, that's what we're saying. We do expect to be down meaningfully year-over-year and compared to q1. Remember, we did have an, as Khan pointed out. We had inventory load in for some of the new Retail Partners at 2.7 million versus we're going to have 300,000 this year. So that's a pretty meaningful change and really bernard.com and what we're seeing online. The conversion rates are much lower with similar web traffic coming to the store. So we did benefit in Q2 last year of the CL launch coming out, um, that had some significant sales. So we do have some of that year-over-year pressure but we do expect it to be down significantly.

Speaker #5: The other piece of this, and I think it's important to understand, is from a marketing perspective, we've been targeting the same audience for a while now.

Speaker #5: And we are seeing that audience still come back to Berna.com. But they're buying more things like ammunition and accessories for their existing launcher. Instead of adding another launcher to the cart.

And then, um, to that point, I wanted to get underneath the average order values, um, declining, uh, in particular online. So just help us understand that, given that it sounds like the CL has been taking share overall, but maybe that's not the case in the DTC channel.

Speaker #5: And so what we're seeing there is just kind of a shift a little bit into the mix in the bag. Laurie, do you have any more detail?

Speaker #4: No, I think that that's fair. I think as we have this new tool of find the right launcher and more education online to help people really differentiate the launchers, we know they can differentiate them in store.

Speaker #4: We want to help them differentiate that online as well. And we believe that will help to drive the average order value increase.

Um, I wanted to see if you could comment on that or if the aovs are falling because you're not getting the same type of accessory attachments, um, in those orders. But just help us to understand why those aovs are falling given that you have a more expensive CL launcher, now, um, and you've taken price, I believe in in, uh, you know, early 2026 on the SD and Le

Speaker #3: Just to clarify and question, what is the CL mix online versus at retail?

Speaker #4: So at retail, I think we pointed to our retail stores, which is really we don't really have necessarily store-level detail on all of our partners.

Speaker #4: Overall, we were seeing for the quarter, we were seeing the CL at 40% roughly of total overall unit sales. But we know in our stores as we mentioned given a month of data, it was 80% in our own retail stores.

Hi Jeremy, thank you for that. Um, I would say there are a couple of factors driving that first year you're right um we did take take some price but the CL mix is not as High online as it is in our retail stores and that goes back to the conversation. I was having earlier where we aren't telling the story. Well enough on bernard.com to drive that that upsell into the the CL platform. Um the other piece of this and I think it's important to understand is you know, from a marketing perspective. We've been targeting the same audience for a while now.

Speaker #4: I can follow up with you, Jeremy, on the breakdown of the two.

Speaker #3: I appreciate that. And then just one last one here. In terms of the gross margin improvement, if you are seeing so much more traction at brick and mortar, and that has a low carries a lower gross margin profile, why would you expect the gross margin to improve from 60%?

And we are seeing that audiences still come back to byrna.com, but they're buying more things like ammunition and accessories for their existing launcher instead of adding another launcher to the cart. Um, and so what we're seeing there is just kind of a shift, a little bit, um, into the mix in the bag. Lori, do you have any more details? No, I think that that's fair, I think. Um, you know, as we have this new tool of 'Find the Right Launcher.'

Speaker #3: It would seem like it would be just kind of stuck in that range. Unless you're assuming that there's going to be a much better mix of DTC in the back half of the year.

And more education online to help people really differentiate the launchers. We know they can differentiate them in store. We want to help them differentiate that online as well, and we believe that will help to drive the average order value increase.

Speaker #4: So I mean, obviously, the back half of the year, we get better DTC just because of the holidays themselves, right? So that's part of it.

Just to clarify, what is the CL mix online versus at retail?

Speaker #4: But really, we are continuing to see that mix change and the CL is a higher margin product. So as the percentage of CL grows and as we do more to grow that percentage of CL, we expect to see that with the product mix.

Speaker #4: And we also are really working on the manufacturing efficiencies. And we believe that will lead to higher gross margins as well.

Speaker #3: Got it.

Speaker #4: Now, I'm not saying they're going up to drastically, but they're definitely through the back half, the second half of the year, you'll see some improvement in that.

So, at retail, I think we pointed to our retail stores, which is really—we don't really have, necessarily, store-level detail on all of our partners. Um, overall, we were seeing for the quarter, we were seeing the CL at 40%, roughly, of total overall unit sales. But we know in our stores, as we mentioned, you know, given a month of data, it was 80% in our own retail stores.

Speaker #3: Thanks for taking the question. I'll hop out of the queue.

Speaker #4: Thanks, Jeremy.

Speaker #1: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Okay, I can follow up with you, Jeremy, on the breakdown of the two. I appreciate that. And then just one last one here: in terms of the gross margin improvement, if you are seeing so much more traction,

Speaker #4: Eric, you there?

Speaker #5: Eric, can you hear us?

Speaker #1: We lost Eric, so we're moving on to Jeff Van Sinderen with B. Riley Securities.

Um, at brick and mortar, and that has a low—you know, carries a lower gross margin profile—um, why would you expect the gross margin to improve from 60%? It would seem like it would be just kind of stuck in that range, unless you're assuming that there's going to be a much better mix of DTC in the back half of the year.

Speaker #6: Yeah, I just wanted to follow up on a couple of things you said. At Bass Pro, I think you said you're shifting to NCAPs and I'm wondering about the thought process of if it's behind the glass, you sort of are engaging with the salesperson.

Speaker #6: If it's on the NCAPs and just open which is what it sounds like you're doing, how do you engage a salesperson to sort of teach in that product?

Because of the holidays themselves, right? So that's part of it, but really, we are continuing to see that mix change, and the CL is a higher margin product. So as the percentage of CL growth increases and as we do more to grow that percentage of CL, we expect to see that with the product mix. And we also are really working on the manufacturing efficiencies, and we believe that will lead to higher gross margins as well.

Speaker #5: Right. Thank you for the question, Jeff. I will tell you that when it's behind the glass, you almost have to have a salesperson to drive that purchase.

No, I'm not saying they're going up too drastically, but they're definitely, through the back half—the second half of the year—you'll see some improvement in that.

Speaker #5: When you've got an NCAP like that, you've got the opportunity to pull a salesperson in if you have questions. But we also have the opportunity to tell the story right there in store with merchandising materials tied to that NCAP.

Thanks for taking the question. I'll hop out of the queue.

Thanks, Jeremy.

Our next question is from Eric Weld with Texas Capitol Securities. Please proceed.

Speaker #5: So it creates a lot better option for self-discovery but also does not create a purchase barrier by having to get a salesperson involved.

Eric you there?

Speaker #6: Okay. And then I wanted to follow up a little bit more on marketing. Maybe you could just walk us through the pathway to get on social media because I think there's been some challenges there in the past.

Eric, can you hear us?

We lost Eric, so we're moving on to Jeff Vans with B. Riley. Security's

Speaker #6: But just wondering what you're planning to do there.

Speaker #5: Absolutely. So as we pivot kind of our brand messaging and our target audience to a wider, more inclusive audience, that audience lives on social media a lot of it does.

Um, yeah, I just wanted to follow up on a couple things. You said, um, at Bass Pro, I think you said, you’re shifting to end caps, and I’m wondering about the thought process of—

Speaker #5: And we're going to have to be present there and be native to where our customers are actually going to be able to see and engage and visualize the product.

Speaker #5: Now, as you mentioned, Berna historically has been limited from a paid advertising on social media channels. I don't see that changing in the short term.

You know, if it's behind the glass, you sort of are engaging with the salesperson. If it's on the end caps and just open, which is what it sounds like you're doing, how do you engage a salesperson to sort of teach in that product?

Speaker #5: So we're going to have to leverage a much more intentional organic social media presence and rely on social media influencers that have the right audience.

Speaker #5: By tapping a social media influencer crowd, we'll really be able to generate more lifestyle stories about how the Berna can really impact people's daily lives.

Speaker #5: And we believe that will be very resonant with the target audience.

Great, thank you for the question chat. You know I I will tell you that when it's behind the glass you know you almost have to have a sells first person to drive that that purchase when you've got an incap like that you've got the opportunity to pull a salesperson in if you have questions but we also have the opportunity to tell the story right there in store with merchandising materials tied to that incap. So it creates a lot better option for self-discovery. Um, but also does not create a purchase barrier by having to get a salesperson involved.

Speaker #6: Okay. And then one thing I didn't hear much about today and realized you guys have a lot to do, but any sense or any update you can give us regarding plans to launch more recurring revenue lines of business?

Speaker #6: I know that was talked about previously. I'm just wondering how that might take shape over the next year or so.

Um, and then I wanted to follow up a little bit more on marketing. Um, maybe you could just walk us through the pathway to get on social media, because I think there's been some challenges there in the past, but just wondering what you're planning to do there.

Speaker #5: Yeah. So I think as we look at kind of investment in the business overall, as I mentioned, Jeff, I'm long on the launcher platform.

Speaker #5: I think that is our best near-term opportunity to continue to grow this business in this brand. That being said, we have recently hired a new head of R&D who has a lot of experience in connected devices and recurring revenue places.

Speaker #5: I think thinking about how we can do that thoughtfully and intentionally from an organic point of view will be the path forward there. Rather than trying to go out and purchase, call it a connected devices platform, which, as I'm sure you're aware, are very expensive from a multiple's point of view.

Absolutely. So as we pivot kind of our brand messaging and our target audience to a a wider more inclusive audience you know that audience lives on social media, a lot of it does and we're going to have to be present there and be native to where our customers are are actually going to be able to see and engage and visualize the product. Now, as you mentioned Bernard historically has been limited from a paid advertising on social media channels. I don't see that changing in the short term, so we're going to have to leverage a much more intentional organic social media presence.

Speaker #6: Okay. Thanks for taking my questions.

Speaker #5: Thank you, Jeff.

And rely on social media, influencers that have the right audience. By tapping a social media influencer crowd, we'll really be able to generate more lifestyle stories about how the Byrna can really impact people's daily lives, and we believe that will be very resonant with the target audience.

Speaker #1: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Speaker #5: Hey, thanks. We'll try it one more time. Sorry about the technical difficulties. Thanks for the questions. So a couple of questions on the retail channel.

Speaker #5: You mentioned kind of one of the retailers that you have line of sight the last year's results. Are you seeing a strong insource

Okay. And then, one thing—I didn't hear much about it today, and I realize you guys have a lot to do—but any sense or any update you can give us regarding plans to launch more recurring revenue lines of business? I know that was talked about previously, just wondering how that might take shape over the next year or so.

Speaker #1: Sales year over year in Q1 , and so far in March . Anything that retailer is doing differently than the other retailers , or maybe a different geographical area to try and get a sense of why those trends may or may not be translatable to some of the other retail partners Eric , what's exciting about that is they haven't historically done much of anything differently .

Speaker #1: And their footprint is fairly wide based . So I think that that's going to see translation kind of across the retail category . What's exciting about that partnership , though , is because of the success we've had , we are now able to go in and lean more heavily into merchandising opportunities with counter displays and really get buy in from that retailer in order to accelerate faster .

Yeah, so I think as we look at kind of investment in the business overall, as I mentioned, Jeff, I'm long on the launcher platform. I think that is our best near-term opportunity to continue to grow this business and this brand. You know, that being said, we have recently hired a new head of R&D who has a lot of experience in connected devices and recurring revenue places. I think thinking about how we can do that thoughtfully and intentionally from an organic point of view will be the path forward there, rather than trying to go out and purchase, call it, a connected devices platform, which as I'm sure you're aware, are very expensive from a multiple point of view.

Okay, thanks for taking my questions.

Speaker #1: Got it

Thank you, Jeff.

Speaker #2: And then I know the exclusive Greenwood Sportsman's runs through August of next year . You mentioned that the retailers that have the shooting experiences are doing three X , the sales of the other stores that are not .

Our next question is from Eric W. with Texas Capitol Securities. Please proceed.

Speaker #2: How quickly are retailers on their own moving to make that that offering available ? What percentage currently offer an in-store experience and how do you think could be there by year end ?

Hey, thanks. We'll try one more time. Sorry about the technical difficulties. Um, uh, thanks for the questions. So,

Speaker #1: Thanks , Eric . I will tell you that , you know , beyond the sportsman's experience where you really see that have picked up is in the dealer channel and our premier dealers all pretty much have shooting experiences , in their facilities , right there .

Or may not, um, be translatable to some of the other regional partners.

Speaker #1: And available And Lori , what's the percentage of our dealers now that are

Speaker #3: Very small percentage that have shooting Yeah , it's definitely less than 10% .

Speaker #1: Sub 10% from a dealer point of view . I would say beyond that , you know , obviously other retailers are starting to explore what that looks like .

Speaker #1: I don't have a specific rollout at this point in time for experiences and other mass market retailers that will be on a store by store basis for those retailers , what they choose to do

Eric, what's exciting about that is they haven't historically, done much of anything differently and their, their footprint is, is fairly wide base. So I think that that's going to see translation kind of across the retail category. What's exciting about that partnership, though, is because of the success we've had, we are now able to go in and lean more heavily into kind of merchandising opportunities with counter displays, um, and really get Buy in from that retailer in order to accelerate faster.

Speaker #2: Just a quick follow up on that . What is the main pushback ? Or main reason why a retailer is not offering this ?

Speaker #2: Is it space ? Is it cost ? What's what's what's the reason why you're hearing that retail on its own is not not moving off of this

Speaker #1: Erica , you're a little garbled to me . I just want to make sure I understood . Are you asking us ? What are we hearing from the retailers that have not yet adopted a shooting experience

Got it and then um, yeah I know the the exclusive agreement with Sportsman's um runs through, you know, August of of of next year. Um you mentioned that you the the retailers that have the shooting experiences are doing, you know, 3x to sales of the other stores. That, that are not how quickly are retailers on their own moving to make that that offering available, you know what percentage currently.

Speaker #2: Yes . What reason are they possibly giving for not moving quickly on that ? If they're seeing if the results are there ? Is it the space in the store ?

Offer an insourcing experience, and how many do you think could be there by year-end?

Speaker #2: Is it the cost involved in doing so Personnel , anything you can hear on that

Speaker #1: Yeah . It's not really the cost . The cost to do it is not all that expensive . That being said , the space is what's challenging and kind of resetting the stores and planning for that .

Thanks, Eric. I will tell you that, you know, beyond the Sportsman's experience, where you really see that have picked up is in the dealer channel. And our Premiere dealers all pretty much have shooting experiences, you know, in their facilities, um, right there and available. And Lori, what's the percentage of our dealers now that are

Speaker #1: So it's a longer lead time for that to get done . And I think a lot of those retailers are seeing the success we're having and having more and more thoughts and conversations in that direction .

Very small percentage that have should be better. Yeah, it's definitely less than 10%. Sub-sub 10%. Um, from a dealer point of view I would say beyond that, you know, obviously—

Speaker #2: Perfect . Thank you .

Speaker #1: Thank you

Speaker #4: Our next question is from Matt Koranda with Roth Capital Partners . Please proceed

Speaker #5: Hey , guys . Good morning . Just wanted to hear a little bit more about the near term conversion trends that you shared .

Other retailers are starting to explore what that looks like. I don't have a specific rollout, um, at this point in time for experiences in other mass market retailers—that will be on a store-by-store basis for those retailers, what they choose to do.

Hey, just a quick. Follow up on that.

Speaker #5: Kon Maybe just did you implement any significant changes in March to the messaging that sort of impacted conversion And then what changes can you make , I guess , on the website specifically to improve conversion in the near term ?

What is the mean push back? I mean the reason why a retailer is is not offering this is, is it space? Is it cost? You know what's what's what's the reason why you're here and that, you know, retailer on its own is not not moving off of this.

Speaker #5: Or is this something that's likely going to take a bit longer before we start to see a lift in conversion

Eric, I— You, you— You're a little garbled to me. I just want to make sure I understood. Are you asking us, what are we hearing from the retailers that have not yet adopted a shooting experience?

Speaker #1: Thank you . Matt , I will tell you , we are doing the tactical things we can do now , and I'll give you a couple of examples of that .

Speaker #1: One . The find your launcher quiz that we have put in place . We are seeing . Significant engagement with that online . I mentioned we're north of 30,000 completions on that .

Yes, what reason are they, you know, possibly giving for not moving quickly on that? If they're seeing that, if the results are there, is it the space in the store? Is it the cost involved in doing so? Personnel? Anything you can share on that?

Speaker #1: Now that is largely only been available for the past few weeks online . We had tested it before , but it was fairly hidden .

Speaker #1: We're getting great data around what the consumer is looking for . Coming to the website when they are trying to learn more about the platform .

Yeah, it it's not really the cost, the cost to do it is not all that expensive. Uh, that being said the space is is what's challenging and kind of resetting the stores and planning for that. So just it's a longer lead time for that to get done and I think a lot of those retailers are are seeing the success we're having and having more and more thoughts and conversations in that direction.

Speaker #1: We're going to leverage that to create . Specific landing pages and educational pages here in the near term , in order to help drive that conversion Today , we are seeing consumers who take that quiz , convert it twice the rate of the overall website experience .

Perfect, thank you.

Thank you.

Our next question is from Matt Kuranda with Russ Capital Partners. Please proceed.

Speaker #1: We anticipate being able to continue to drive that up through tactical changes . Additionally , we've pivoted some of the messaging on the website and we have more work to do there .

Hey guys, good morning. Um, just wanted to hear a little bit more about the near-term conversion trends that you shared. Uh, Tom, maybe just—did you implement any significant changes in March?

Speaker #1: But from a starting point of view , you used to come to the website and the first thing you would see was a launcher , which they obviously look like a pistol and a lot of information around some of our historic influencers that turned some consumers off .

To the messaging that sort of impacted conversion. Uh, and then what changes can you make, I guess, on the website specifically to improve conversion in the near term, or is this something that's likely going to take a bit longer before we start to see a lift in conversion?

Speaker #1: We have already pivoted that messaging to be much more lifestyle focused , and about how burnout can be an enabler of safety and confidence .

Speaker #1: And we're we're seeing some traction there as well . So I think more to come there , Matt , we're doing the tactical things now , but over time , you're going to see a much bigger shift in reset and the experience online

Speaker #5: Okay . I wanted to get your thoughts on the product portfolio and the progression there . It sounds like no change in terms of your posture toward the launcher And it sounds like you're signaling probably more of an organic development process on connected device Any thoughts on sort of how long that organic process could take to get something connected device wise We're looking at something , you know , maybe over the next year .

Thank you, Matt. I will tell you we are doing the tactical things we can do now, and I'll give you a couple of examples of that. One, the, you know, "Find Your Launcher" quiz that we have put in place—we are seeing significant engagement with that online. I mentioned we're north of 30,000 completions on that now. That has largely only been available for, you know, the past few weeks online. We had tested it before, but it was fairly hidden. We're getting great data around what the consumer is looking for when coming to the website, when they are trying to learn more about the platform. We are going to leverage that to create specific landing pages and educational pages here in the near term, in order to help drive that conversion. Today we are seeing

Speaker #5: Plus , in terms of introduction , just how should we think about the progression of product portfolio under your leadership ?

Speaker #1: I appreciate the question , Matt . You know , clearly , I think , you know , the focus in the near term , attention is definitely on the launcher platform .

Speaker #1: And optimizing that . That being said , I would anticipate us , you know , testing and learning in that connected devices market at some point before the end of this year .

Speaker #1: But I don't have any specific timing on , on what that looks like . But before we were to make a big push there , I think you're right .

Consumers who take that quiz convert at twice the rate of the overall website experience. We anticipate being able to continue to drive that up through tactical changes. Additionally, we've pivoted some of the messaging on the website, and we have more work to do there. But from a starting point of view, you used to come to the website and the first thing you would see was, you know, a launcher, which obviously looked like a pistol, and a lot of information around some of our historic influencers. That turned some consumers off.

Speaker #1: It's probably a next year time period . If we see success in the test and learn

Speaker #5: Okay . Fair enough . And then maybe if I could squeeze one more in . Laurie , just any thoughts on progression of cash flow for this year Notice the inventory balance and what you said in the prepared remarks .

Seem to be much more lifestyle focused and about how burner can be an enabler of safety and competence. Um, and we're we're seeing some traction there as well, so I think more to come there. Matt, we're doing the tech tactical things now, but over time, you're going to see a much bigger uh, shift in reset and the The Experience online.

Speaker #5: But maybe just if you could put a finer point on how we should be thinking about free cash flow this year In light of some of the demand comments , you guys also made , that'd be helpful .

Speaker #3: Yeah , I mean , I think , I think we expect free cash flow to end up being in the mid-teens . Some of that coming from , you know , EBITDA , some of it really coming from working capital .

Wanted to get your thoughts on the product portfolio and the progression there. It sounds like, you know, no change in terms of your posture toward the launcher, um, and it sounds like you're signaling probably more of an organic development process on connected device.

Speaker #3: So I would say that's our base minimum that we're looking for this year Q1 is obviously always the quarter that use cash . That's not unusual .

Any thoughts on sort of how long that organic process could take to get something connected device-wise? We're looking at something, you know, maybe over the next year plus in terms of introduction. Just, how should we think about the progression of the product portfolio under your leadership?

Speaker #3: But as we continue to work through the inventory changes , I mean , we're targeting a meaningful reduction in inventory . We've already taken steps on the production side .

Speaker #3: So that's where we're looking at for the year .

Speaker #1: And Matt , just to be clear , it's a big focus of mine and an initiative to drive that and be much more effective .

Speaker #1: We're already doing taking steps to tie production much more closely to what we're seeing from a demand point of view . Yeah .

Speaker #5: Got it . Very helpful guys . Thanks

No, I I I appreciate the question, Matt, you know, clearly, I think you know, the focus in the near term attention is definitely on the the launcher platform and optimizing that that being said I would anticipate us, you know, testing and learning in that connected devices Market at some point before the end of this year. But I don't have any specific timing on on what that looks like. But before we were to make a big push there, I think you're right. It's probably a next year time period if we see 6s in the test and learn

Speaker #6: Thank you . Thanks

Speaker #4: Our next question is from Jon Hickman with Ladenburg Thalmann . Please proceed And we just on . So this will conclude our question and answer session .

Okay, fair enough. And then maybe if I could squeeze one more in, Laurie—just any thoughts on the progression of cash flow for this year? I noticed the inventory balance, and what you said in the prepared remarks.

Speaker #4: I would like to turn the the call back over to Mr. Davis for closing remarks

But maybe just if you could put a finer point on how we should be thinking about free cash flow this year, and let us—some of the demand comments you guys also made—that'd be helpful.

Speaker #1: Thank you . We appreciate your continued interest in Berna . I want to take this opportunity to thank our investors , customers , vendors , partners and employees This journey is only possible because of their tremendous support and belief in our mission of saving lives

Yeah, I mean I think I I think we expect free cash flow to end up being in the mid-teen. Some of that coming from, you know, Eva some of it really coming from working capital. So I would say that's our our base minimum that we're looking for this year, um, q1 is obviously always the quarter that we, you know, use cash, that's not unusual. But as we continue to work through the inventory changes, I mean, we're targeting a meaningful reduction in inventory. Um, we've already taken steps on the production side, so that's where we're looking at for the year.

And Matt, just to be clear, it's a big focus of mine and an initiative to drive that and be much more effective. We're already taking steps to tie production much more closely to what we're seeing from a demand point of view. Yeah.

Got it. Very helpful, guys. Thanks.

Thank you, thanks.

Our next question is from John Hickman with Ladenburg Thalmann. Please proceed.

And we just lost John. So this will, uh, conclude our question and answer session. I would like to turn the call back over to Mr. Davis for closing remarks.

Thank you. We appreciate your continued interest in Byrna. I want to take this opportunity to thank our investors, customers, vendors, partners, and employees. This journey is only possible because of their tremendous support and belief in our mission of saving lives.

Thank you for joining us for today's Byrna fiscal first quarter 2026 conference call. You may now disconnect.