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- $BYRNA - Earnings Analysis: Strong revenue growth and improved profitability in Q4 2024 and FY 2024.

By sagebytes in Lifestyle —

Business Model

Byrna Technologies generates revenue through the development, manufacture, and sale of less-lethal personal security solutions, primarily through direct-to-consumer (DTC) channels (Byrna.com and Amazon.com), retail stores, and partnerships with retailers like Sportsman's Warehouse.

Revenue Sources

  • Direct-to-consumer (DTC) sales: Sales through Byrna.com and Amazon.com.
  • Retail sales: Sales through company-owned stores and partnerships with retailers.
  • International sales: Sales to international markets, including Argentina and Canada.

Revenue Distribution by Channel

  • DTC channels (Byrna.com and Amazon.com) contribute a significant portion of revenue with higher gross margins.

Income Statement Analysis

  • Net revenue increased by 79% year-over-year, driven by the advertising strategy and the normalization of Byrna and the less-lethal space.
  • Gross profit increased due to a higher proportion of sales through DTC channels, lower component costs, and economies of scale.
  • Operating expenses increased due to higher variable selling costs, increased marketing spend, and higher payroll expenses in marketing and engineering.
  • Net income improved significantly due to higher revenue and a $5.6 million income tax benefit from the release of tax valuation allowances.

Balance Sheet Analysis

  • Total assets increased primarily due to increase in marketable securites and inventory
  • Total stockholders' equity increased due to increase in Additional paid-in capital.
  • Total liabilities increased due to increase in Accounts payable and accrued liabilities.

Capital Allocation

The company is investing in growth initiatives, including expanding its retail presence and increasing production capacity. It is also using excess cash to invest in short-term marketable securities to earn a higher yield. Company has no current or long-term debt.

Management Commentary

The fourth quarter was the culmination of a remarkable year for Byrna. We successfully generated a record $28.0 million in revenue while also expanding our gross margins to 62.8%.

Our marketing strategy, anchored by the continued success of our celebrity influencer program, has continued to be instrumental in driving DTC sales and expanding brand awareness.

We believe that Byrna is well-positioned to generate additional cash and expand profitability in 2025 and beyond.

Unfortunately, we did lose one very successful celebrity endorser, Governor Mike Huckabee, due to his appointment as U.S. ambassador to Israel.

Overall Sentiment: Optimistic, focused on growth, profitability, and expanding market reach.

Recommendation

Rating: Buy

Reason for Rating: Byrna Technologies has demonstrated strong revenue growth, improved profitability, and a clear strategy for continued expansion. The company's successful marketing efforts, increasing retail presence, and commitment to domestic production position it well for future success.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/8/2025, 5:27:47 AM