Byrna Technologies Inc (BYRN) 2023 Q2 法說會逐字稿

Good morning. Welcome to Byrna's Fiscal Second Quarter 2023 earnings conference call. My name is Kevin, and I'll be your operator for today's call. Joining us for today's presentation are the company's CEO, Bryan Ganz, and CFO, David North. Following the remarks, we'll open the call for questions.

早上好。歡迎參加 Byrna 的 2023 年第二季度財報電話會議。我叫凱文，我將擔任今天電話的接線員。參加今天的演講的有該公司首席執行官 Bryan Ganz 和首席財務官 David North。發言結束後，我們將開始提問。

Earlier today, Byrna released results for its fiscal second quarter ended May 31, 2023. A copy of the press release is available on the company's website. Before turning the call over to Bryan Ganz, Byrna Technology's Chief Executive Officer, I'll read the Safe Harbor statement. Some discussions held today include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Byrna most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions.

今天早些時候，Byrna 發布了截至 2023 年 5 月 31 日的第二財季業績。該新聞稿的副本可在該公司網站上獲取。在將電話轉給 Byrna Technology 首席執行官 Bryan Ganz 之前，我將閱讀安全港聲明。今天舉行的一些討論包括前瞻性陳述。實際結果可能與今天的聲明存在重大差異。請參閱 Byrna 最近的 10-K 和 10-Q 文件，了解可能影響這些預測和假設的風險因素的更完整描述。

The company assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise as this call include references to non-GAAP results, please see the press release in the Investors section of our website, ir.byrna.com. For further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. Now I'd like to turn the call over to Byrna's CEO, Bryan Ganz. Sir, please proceed.

該公司不承擔因新信息、未來事件或其他原因而更新前瞻性陳述的義務，因為本次電話會議包括對非公認會計準則結果的引用，請參閱我們網站 ir.byrna 投資者部分的新聞稿。 com.有關前瞻性陳述以及非公認會計原則結果與公認會計原則結果的調節的更多信息。現在我想將電話轉給 Byrna 的首席執行官 Bryan Ganz。先生，請繼續。

Thank you, Kevin, and thank you everyone for joining us today. As Kevin mentioned this morning, we filed our 10-Q with the SEC and issued a press release providing our financial results for the second quarter ended May 3, 2023, along with key business accomplishments. Today, I would like to start by providing a few key highlights and recent business developments. Then I will hand the call over to David North to discuss our financial results in more detail. After that, I'll come back and provide some color on our performance, touching on both those areas of the business that we are pleased with and the underperforming areas of the business that require our attention. After that, we can take questions from our publishing analysts.

謝謝你，凱文，也感謝大家今天加入我們。正如 Kevin 今天早上提到的，我們向 SEC 提交了 10-Q 報告，並發布了新聞稿，提供了截至 2023 年 5 月 3 日的第二季度財務業績以及主要業務成就。今天，我想首先提供一些關鍵亮點和最近的業務發展。然後我會將電話轉交給大衛·諾斯，更詳細地討論我們的財務業績。之後，我將回來對我們的業績進行一些闡述，涉及我們滿意的業務領域和需要我們關注的表現不佳的業務領域。之後，我們可以回答出版分析師的問題。

And with that, let's begin. First, production. I am pleased to report that during the quarter, we commenced production, serial production of the new, more powerful Byrna LE launcher and successfully worked through the backlog and wait list of 5,800 units reported at the end of the first quarter of 2023, shipping out a total of 6,235 Byrna LE Kits during Q2. Byrna is continuing to ramp up production of the Byrna LE, and we intend to release it on Amazon this week. We believe, well, there is still room for improvement in terms of manufacturing efficiency, the manufacturing and supply chain challenges that we face with rolling out the Byrna LE are firmly behind us.

那麼，讓我們開始吧。第一，生產。我很高興地報告，在本季度，我們開始生產、批量生產功能更強大的新型 Byrna LE 發射器，並成功處理了 2023 年第一季度末報告的 5,800 台積壓和等待名單，並發貨第二季度共有 6,235 個 Byrna LE 套件。 Byrna 正在繼續提高 Byrna LE 的產量，我們打算本週在亞馬遜上發布它。我們相信，在製造效率方面仍有改進的空間，我們在推出 Byrna LE 時所面臨的製造和供應鏈挑戰已經成為過去。

We also commenced production and shipment of our new revolutionary 12-gauge less-lethal round during the quarter. The round was voted Best of SHOT Show 2023 and was recently favorably reviewed by Firearms News. A copy of this article is available to view on our website in the 12-gauge section and is linked to our press release issued this morning. These accolades appear to be well deserved according to bio kinetics, a third-party testing lab. After extensive testing of Byrna round against NATO's AEP-99 standards, Byrna's 12-gauge Kinetic rounds were judged to be, and I quote, extremely safe.

我們還在本季度開始生產和運輸我們的新型革命性 12 號低致命子彈。該輪被評為 2023 年最佳射擊秀，最近受到《槍支新聞》的好評。本文的副本可在我們網站的 12 號部分查看，並鏈接到我們今天早上發布的新聞稿。根據第三方測試實驗室生物動力學的說法，這些榮譽似乎是當之無愧的。根據北約 AEP-99 標準對 Byrna 彈進行了廣泛測試後，Byrna 的 12 號動能彈被認為（我引用一下）極其安全。

AEP-99 is a Thorax Injury Risk Assessment that quantifies the risk of rib internal fractures resulting from impact or a combination of empirical and numerical evaluations. This testing concluded the Byrna's 12-gauge Kinetic rounds are extremely unlikely to cause serious injury or death even when fire ranges inside of five feet. As a result of this, a very favorable report validating Byrna's claims regarding the safety of its revolutionary new shotgun around and the demonstrated accuracy and effectiveness against humans. We are seeing tremendous interest from both domestic and international law enforcement agencies. I expect to be able to report the adoption of Byrna's 12-guage Kinetic round by several large law enforcement agencies on our next quarter's earnings call.

AEP-99 是一種胸部損傷風險評估，可量化因撞擊或經驗與數值評估相結合而導致肋骨內部骨折的風險。該測試得出的結論是，即使火勢範圍在五英尺以內，Byrna 的 12 號動能彈也極不可能造成嚴重傷害或死亡。因此，一份非常有利的報告證實了拜納關於其革命性新型霰彈槍的安全性以及對人類的準確性和有效性的主張。我們看到國內和國際執法機構都表現出極大的興趣。我希望能夠在下季度的財報電話會議上報告幾家大型執法機構採用 Byrna 的 12 號 Kinetic 輪。

Next, Premier Dealers. Byrna saw a strong growth in dealer sales during Q2, posting a 47% year over year increase in revenue. This resulted in part from our focus on the development of Premier Dealers. Premier Dealers are owner operated brick and mortar stores that derive more than 50% of their revenue from Byrna' products. Drawing upon the success of Byrna's own retail store in Las Vegas and our Dealer of the Year, Live Safe Hawaii, we decided to institute a new Premier Dealer program for entrepreneurs that share Byrna passion for less-lethal and believe in our mission of saving lives by giving consumers and law-enforcement professionals a safe, effective and reliable nonlethal alternative to traditional firearms.

接下來是高級經銷商。 Byrna 在第二季度經銷商銷售強勁增長，收入同比增長 47%。這部分是由於我們對一級經銷商發展的關注。 Premier Dealers 是業主經營的實體店，其 50% 以上的收入來自 Byrna 的產品。借鑒 Byrna 在拉斯維加斯的自營零售店和我們的年度經銷商 Live Safe Hawaii 的成功經驗，我們決定為企業家製定一項新的高級經銷商計劃，這些企業家與 Byrna 一樣熱衷於降低殺傷力，並相信我們拯救生命的使命為消費者和執法專業人員提供傳統槍支的安全、有效和可靠的非致命替代品。

In the first 90 days of rolling out this quasi-franchise program, Byrna was able to sign three new Premier Dealers. This includes Greener Motors, Integrated Marine Systems, operating is Live Safe SoCal and KPGS, operating as Byrna Manteca. The owners include: a trucking company that came to embrace our mission when they provided Byrnas to all of their drivers; a yacht restoration company that started selling Byrnas at boat shows; and a private security company that issued Byrnas to all its security guards. You can see the interview with the owner of the security company Jim Vierra on Byrna's website -- Byrna's Hot Take Episode 11. In the first 90 days of signing on with Byrna, these three dealers have generated more than $180,000 in new business.

在推出這一準特許經營計劃的前 90 天內，Byrna 簽下了三名新的高級經銷商。其中包括 Greener Motors、Integrated Marine Systems（以 Live Safe SoCal 名義運營）和 KPGS（以 Byrna Manteca 名義運營）。所有者包括： 一家貨運公司，當他們向所有司機提供 Byrnas 時，他們開始接受我們的使命；一家遊艇修復公司，開始在遊艇展上銷售 Byrnas；一家私人保安公司向其所有保安人員發放了 Byrnas。您可以在 Byrna 的網站上看到對安全公司老闆 Jim Vierra 的採訪——Byrna's Hot Take Episode 11。在與 Byrna 簽約的前 90 天裡，這三個經銷商已經創造了超過 180,000 美元的新業務。

Byrna LATAM, Byrna also recently landed three large law enforcement accounts in Argentina, Cordoba, Lanus, and Buenos Aires. The agencies have ordered a combined 3,000 Byrna SD launchers and ammunition. The orders, which totaled approximately USD5 million, will be filled by Byrna' LATAM distributor in Argentina, Bersa. So while they do not show up in Byrna's revenue numbers, they are nonetheless a big win for Byrna in terms of credibility with law enforcement and validation of the Byrna products. Byrna has benefited from a unique political situation in Argentina as the two leading candidates for presidency have been promoting Byrna by name, citing Byrna's nonlethal handguns as the answer to both police violence and street crime in Argentina. You can see these stories on Byrna's website.

Byrna LATAM，Byrna 最近還在阿根廷、科爾多瓦、拉努斯和布宜諾斯艾利斯獲得了三個大型執法賬戶。這些機構總共訂購了 3,000 個 Byrna SD 發射器和彈藥。這些訂單總額約為 500 萬美元，將由 Byrna 位於阿根廷的 LATAM 經銷商 Bersa 負責履行。因此，雖然它們沒有出現在 Byrna 的收入數據中，但就執法和 Byrna 產品驗證的可信度而言，它們仍然是 Byrna 的一大勝利。拜納受益於阿根廷獨特的政治局勢，兩位領先的總統候選人一直在點名宣傳拜納，稱拜納的非致命手槍是解決阿根廷警察暴力和街頭犯罪的答案。您可以在 Byrna 的網站上看到這些故事。

Based on our success, in Argentina, Byrna's Head of Law Enforcement Training, Wayne Moody has been invited to Brazil next week to speak at the Brazilian Congress of Municipal Guards and Public Safety. There will be over 1,000 government officials in attendance from 200 different municipalities. The subject of Wayne's presentation will be the use of less-lethal devices such as Byrna to manage threats to the public without the need to resort to lethal force.

基於我們在阿根廷取得的成功，Byrna 執法培訓主管 Wayne Moody 已受邀下週前往巴西，在巴西市政警衛和公共安全大會上發表演講。來自 200 個不同城市的 1,000 多名政府官員將出席。韋恩演講的主題將是使用拜納等低致命性設備來管理對公眾的威脅，而無需訴諸致命武力。

Wayne Moody, who heads up our law enforcement training program, is a highly decorated member of the Galveston PD and former SWAT Commander. He brings more than 30 years of policing experience to Byrna. In anticipation of Wayne's visit, several high-ranking Brazilian police officers who will be in attendance visited Byrna's Fort Wayne production facility in June to inspect our operations and test fire the Byrna launchers. While neither Byrna LATAM's nor Byrna's sales are reflected in Byrna's reported numbers. These recent wins underscore the importance of Byrna's Argentinean subsidiary and a long-term growth opportunity for Byrna in the Latin American market.

韋恩·穆迪 (Wayne Moody) 負責我們的執法培訓計劃，他是加爾維斯頓警察局的一名功勳卓著的成員，也是前特警指揮官。他為 Byrna 帶來了 30 多年的警務經驗。為迎接韋恩的到來，幾位即將出席的巴西高級警官於 6 月參觀了 Byrna 的韋恩堡生產設施，檢查我們的運營情況並試射了 Byrna 發射器。而 Byrna LATAM 和 Byrna 的銷售額均未反映在 Byrna 的報告數據中。最近的這些勝利凸顯了 Byrna 阿根廷子公司的重要性以及 Byrna 在拉丁美洲市場的長期增長機會。

Finally, Australia. In Q2, Varna secured the company's first law enforcement contract in Australia, the New South Wales correctional facility. This achievement marks a significant milestone for Byrna's regional expansion, establishing a promising foundation for increased market penetration in the large Australian market and the broader Asian Pacific region.

最後是澳大利亞。第二季度，瓦爾納獲得了該公司在澳大利亞的第一份執法合同，即新南威爾士州懲教所。這一成就標誌著 Byrna 區域擴張的一個重要里程碑，為提高澳大利亞大市場和更廣泛的亞太地區的市場滲透率奠定了良好的基礎。

Before I go any further I'd like to turn the call back over to David to discuss our financial results for the quarter in greater detail. David?

在進一步討論之前，我想將電話轉回給 David，更詳細地討論我們本季度的財務業績。大衛？

Thank you, Bryan, and good morning, everyone. Let's discuss our financial results for fiscal Q2. Net revenue for the second quarter of 2023 declined slightly by 1% year over year to $11.5 million from $11.6 million in Q2 of 2022. The slight decrease in sales are primarily due to a decline in international orders, specifically a onetime $1.1 million order from South Africa, which was recorded last year in Q2. As well as a temporary drop in online sales due to production delays affecting Byrna LE products. The decrease in sales was offset by a $900,000 increase in sales domestic dealers, which were up 47% year over year.

謝謝布萊恩，大家早上好。讓我們討論一下第二財季的財務業績。 2023 年第二季度的淨收入同比小幅下降 1%，從 2022 年第二季度的 1160 萬美元降至 1150 萬美元。銷售額略有下降主要是由於國際訂單減少，特別是來自南方的一次性 110 萬美元訂單減少非洲，去年第二季度記錄的。由於生產延遲影響了 Byrna LE 產品，在線銷售暫時下降。國內經銷商銷售額增加了 90 萬美元，同比增長 47%，抵消了銷售額的下降。

Gross profit for the second quarter of 2023 increased to $6.2 million from $6.1 million in the prior year period. And gross profit margin for the second quarter of 2023 improved to 53.9% from 52.7% in the same period last year. The improvement in gross profit and gross margin was primarily due to the decrease in the proportion of sales to lower margin international channels. Gross margin improvements were slightly offset by challenges in production and supply chain disruptions early in the quarter. On a sequential basis, gross margin declined due to both customer mix, a larger percentage of lower margin dealer and international sales in Q2 as well as unfavorable manufacturing variances resulting from lower production volumes and resulting scrap as the factory worked to get the Byrna LE into serial production.

2023 年第二季度的毛利潤從去年同期的 610 萬美元增至 620 萬美元。 2023年第二季度毛利率從去年同期的52.7%提高至53.9%。毛利潤和毛利率的改善主要是由於向利潤率較低的國際渠道銷售的比例下降。本季度初生產和供應鏈中斷的挑戰略微抵消了毛利率的改善。毛利率環比下降，原因包括客戶組合、第二季度利潤率較低的經銷商和國際銷售所佔比例較大，以及工廠努力將 Byrna LE 投入生產時產量下降和廢品導致的不利製造差異。連續生產。

Operating expenses were $7.0 million. That's a 20% decrease from $8.7 million in Q2 of 2022. This reduction primarily resulted from a $600,000 decrease in payroll costs, a reduction in marketing spend of $600,000 and lower professional fees and insurance costs of $400,000.

運營費用為 700 萬美元。這比 2022 年第二季度的 870 萬美元減少了 20%。這一減少主要是由於工資成本減少了 60 萬美元、營銷支出減少了 60 萬美元以及專業費用和保險成本減少了 40 萬美元。

Turning to our profitability measures, we recorded a net loss of $1.1 million, marking a 64% improvement from $3.0 million in the prior year period. The improvement was a result of reduction in operating expenses that I just mentioned. Adjusted EBITDA, which is a non-GAAP metric, improved by $1.6 million to $700,000 in the second quarter of 2023 compared to a $900,000 loss in the second quarter of 2022. Improvement in EBITDA, primarily stems from slightly higher margins, coupled with the decrease in operating expenses, as previously mentioned.

談到我們的盈利能力指標，我們錄得淨虧損 110 萬美元，比去年同期的 300 萬美元減少了 64%。這種改善是我剛才提到的運營費用減少的結果。調整後 EBITDA（非 GAAP 指標）在 2023 年第二季度增加了 160 萬美元，達到 70 萬美元，而 2022 年第二季度為虧損 90 萬美元。 EBITDA 的改善主要源於利潤率的略微提高以及利潤率的下降如前所述，在運營費用中。

Onto the balance sheet, as of May 31, 2023, we had $15.4 million in cash and cash equivalents, which was up from $14.4 million at the end of the fiscal first quarter on February 28, 2023. At quarter end, we also held $17.5 million in inventory compared to $18.0 million at the end of the first quarter. We also continued to maintain a debt-free balance sheet.

在資產負債表上，截至 2023 年 5 月 31 日，我們擁有 1,540 萬美元的現金和現金等價物，高於 2023 年 2 月 28 日第一財季末的 1,440 萬美元。截至季度末，我們還持有 17.5 美元百萬美元的庫存，而第一季度末的庫存為 1,800 萬美元。我們還繼續保持無債務資產負債表。

That concludes my prepared remarks. I'll now turn it back to Bryan.

我準備好的發言就到此結束。我現在將其轉回給布萊恩。

Thank you, David. I would now like to provide some color on the results outlined by David. First, let me repeat that I believe that the production and supply chain problems that we grappled within Q1 and the beginning of Q2 are behind us. We do not see production issues negatively impacting sales in the foreseeable future. Second, the structural changes and management reorganization that we have implemented at Byrna this year, which has resulted in a lower operating expense run rate, we believe will continue at the current pace. Well, we will be adding some new positions in product development and sales and marketing. We'll also be consolidating some positions in other areas of the company so that the net effect should be neutral.

謝謝你，大衛。我現在想對大衛概述的結果提供一些說明。首先，讓我重複一遍，我相信我們在第一季度和第二季度初解決的生產和供應鏈問題已經過去。我們認為在可預見的未來生產問題不會對銷售產生負面影響。其次，我們今年在 Byrna 實施的結構變化和管理重組導致運營費用運行率降低，我們相信將繼續保持目前的速度。嗯，我們將在產品開發、銷售和營銷方面增加一些新職位。我們還將鞏固公司其他領域的一些職位，以便淨效應應該是中性的。

So that brings me to what I really want to talk about: sales. While net revenue for Q2 2023 was essentially flat year over year, that doesn't begin to tell the whole story. As I will explain, there are segments of the business that have surprised to the upside. There are other segments of the business that really appear to be underperforming are in fact, in line with expectations. And finally, there are still other segments of the business that were appearing to be keeping pace with last year are areas of concern for management. On the positive side, we have dealer sales, which were up 47% or $900,000 compared to Q2 2022. As we discussed, this is being driven by several factors, including our Premier Dealer program as well as our new inside sales initiative.

這讓我想到了我真正想談論的話題：銷售。雖然 2023 年第二季度的淨收入與去年同期基本持平，但這並不能說明全部情況。正如我將解釋的那樣，該業務的某些部分出現了令人驚訝的增長。該業務的其他部分看起來確實表現不佳，但實際上符合預期。最後，還有其他業務部門似乎與去年保持同步，這是管理層關注的領域。從積極的一面來看，我們的經銷商銷售額與 2022 年第二季度相比增長了 47%，即 90 萬美元。正如我們所討論的，這是由多個因素推動的，包括我們的高級經銷商計劃以及我們新的內部銷售計劃。

Until this year Byrna relied primarily on a handful of manufacturers' rep groups to open new dealer accounts. This approach was advantageous for Berna given our smaller size and a relatively limited human resources. These manufacturer reps groups with their well-established customer bases at a roster of on-the-road sales reps, facilitated burn as quick entry into a number of marquee retail chains such as Bass Pro, Capela's, Sportsman's Warehouse, Scheels and Bi-Mart, these four chains alone represent more than 400 brick-and-mortar locations for Byrna. More importantly, they give Byrna the credibility that comes with being associated with such iconic brand names. What they do not do, however, is drive significant sales.

直到今年，Byrna 主要依靠少數製造商的代表小組來開設新的經銷商賬戶。鑑於我們規模較小且人力資源相對有限，這種方法對伯納來說是有利的。這些製造商代表團體在路上的銷售代表名冊上擁有完善的客戶群，促進了快速進入許多大型零售連鎖店，如 Bass Pro、Capela's、Sportsman's Warehouse、Scheels 和 Bi-Mart ，僅這四家連鎖店就代表了 Byrna 的 400 多個實體店。更重要的是，它們為 Byrna 帶來了與這些標誌性品牌相關的可信度。然而，他們並沒有做的是推動大量銷售。

While Bass Pro, Sportsman's and Bi-Mart are all in our top 10 dealer list. Sales on a per-store basis at these big chain stores, frankly, are at the bottom of our dealer list. The reason is simple, Byrnas need to be sold, not simply placed on the shelf because less-lethal is a new category for most consumers. And because Byrna is a relatively new brand, we cannot sell our launchers, ammo, and accessories in the same manner as the well-known long-established weapons companies like Smith & Wesson, Glock or SIG Sauer.

Bass Pro、Sportsman's 和 Bi-Mart 都在我們的前 10 名經銷商名單中。坦率地說，這些大型連鎖店的每店銷售額在我們的經銷商名單中墊底。原因很簡單，Byrnas 需要出售，而不是簡單地放在貨架上，因為低致命性對大多數消費者來說是一個新類別。由於 Byrna 是一個相對較新的品牌，我們無法像 Smith & Wesson、Glock 或 SIG Sauer 等著名的老牌武器公司那樣銷售我們的發射器、彈藥和配件。

When someone wants to purchase a firearm, they generally know exactly what they want. The sales associate merely needs to point them in the right direction. Glocks to the left, SIGs to the right. The same cannot be said for selling Byrna. Selling Byrna's less lethal launchers and the ammo requires a passionate well-trained sales associate that not only believes in the mission, but can explain in detail how Byrna launchers work and can provide performance information and product specifications.

當有人想要購買槍支時，他們通常清楚地知道自己想要什麼。銷售人員只需要為他們指明正確的方向即可。左邊是格洛克，右邊是SIG。出售 Byrna 的情況卻並非如此。銷售 Byrna 的低殺傷力發射器和彈藥需要一位訓練有素、熱情洋溢的銷售人員，他們不僅相信自己的使命，而且能夠詳細解釋 Byrna 發射器的工作原理，並提供性能信息和產品規格。

At the big box stores, we rely on sales associates who typically have a high turnover rate and are compensated at relatively lower levels. As a result, the performance of these big box stores on a per store or per square foot basis is underwhelming. Conversely, at our Premier Dealers where we have owner operators that are passionate about Byrna's mission and are intimately familiar with the product, sales are in order of magnitude better than these big chain stores.

在大型賣場，我們依賴的銷售人員通常流動率較高，但薪酬水平相對較低。因此，這些大型商店的每家商店或每平方英尺的表現並不令人印象深刻。相反，在我們的高級經銷商中，我們擁有對 Byrna 使命充滿熱情並且非常熟悉產品的業主經營者，銷售量比這些大型連鎖店好幾個數量級。

The purpose of our newly formed inside sales team is to focus on the development of more smaller owner operated dealers. These may include gun stores, outdoor stores, sporting goods stores as well as boat dealers, trucking companies and private security companies. As we just saw with our latest three Premier Dealers. Any place that caters to well-heeled customers that are open to having a weapon to protect themselves and their family, it's a potential Byrna dealer.

我們新組建的內部銷售團隊的目的是專注於發展更多小型自營經銷商。這些可能包括槍支商店、戶外商店、體育用品商店以及船舶經銷商、貨運公司和私人保安公司。正如我們剛剛在最新的三位高級經銷商身上看到的那樣。任何迎合願意擁有武器來保護自己和家人的富裕客戶的地方，都是潛在的拜納經銷商。

We kicked off this program in early 2023 and have now expanded it into three inside salespeople. Our goal over the next 12 months is to increase the inside sales force to 10 salespeople, each averaging $1 million or more in annual sales. The inside sales teams efforts are geographically focused on areas of the country where our dealer coverage is limited, ensuring that dealer sales are not cannibalized. In addition to looking for new Byrna dealers, the inside sales team has been tasked with growing our Side Hustle business.

我們於 2023 年初啟動了該計劃，現在已將其擴展到三名內部銷售人員。我們未來 12 個月的目標是將內部銷售隊伍增加到 10 名銷售人員，每人年銷售額平均達到 100 萬美元或更多。內部銷售團隊的工作在地理上主要集中在我們經銷商覆蓋範圍有限的國家地區，確保經銷商的銷售不會被蠶食。除了尋找新的 Byrna 經銷商外，內部銷售團隊還負責發展我們的 Side Hustle 業務。

Side Hustle dealers are individuals that do not have a brick-and-mortar location, but are interested in selling Byrna's at gun shows, boat shows, state fairs, RV and camping shows and other events. They generally come from the ranks of passionate Byrna customers. We advertise our Side Hustle opportunity on our customer -- to our customer base periodically. The inside sales team then calls back those individuals that have expressed an interest.

Side Hustle 經銷商是沒有實體店，但有興趣在槍展、船展、州博覽會、房車和露營展以及其他活動中銷售 Byrna 的個人。他們通常來自熱情的 Byrna 客戶隊伍。我們定期向我們的客戶宣傳我們的副業機會。然後，內部銷售團隊會給那些表示有興趣的人回電話。

Last year, our Side Hustle dealers generated $1.2 million in business at our best dealer margins, most paid with a credit card, so we don't need to carry receivables. This year, two of our top 10 dealers are Side Hustle dealers. To put this in perspective, they're both running ahead of Bass Pro Shops in terms of purchases from Byrna. The other benefit of the Side Hustle program is that it is, in essence, a farm team for Premier Dealers. As these dealers see firsthand, the interest in Byrna's products by selling at gun shows, boat shows, and other events. They develop the confidence to invest in a brick-and-mortar location.

去年，我們的 Side Hustle 經銷商以我們最好的經銷商利潤創造了 120 萬美元的業務，其中大部分是通過信用卡支付的，因此我們不需要持有應收賬款。今年，我們的前 10 名經銷商中有兩家是 Side Hustle 經銷商。從長遠來看，他們從 Byrna 購買的商品數量都領先於 Bass Pro Shops。 Side Hustle 計劃的另一個好處是，它本質上是高級經銷商的農場團隊。正如這些經銷商親眼所見，通過在槍展、船展和其他活動上銷售，人們對 Byrna 產品產生了興趣。他們建立了投資實體店的信心。

Our largest dealer, Live Safe Hawaii started off as a Side Hustle dealer. This quarter, we converted another Side Hustle dealer, Greener Motors, the trucking company I referred to earlier into a premier dealer. As a result of our inside sales effort, our new focus on developing Premier Dealers and a new renewed effort to grow our Side Hustle business, we expect our dealer sales division to continue to outperform expectations.

我們最大的經銷商 Live Safe Hawaii 最初是一家 Side Hustle 經銷商。本季度，我們將另一家 Side Hustle 經銷商 Greener Motors（我之前提到的卡車運輸公司）轉變為一流經銷商。由於我們的內部銷售努力、我們對發展高級經銷商的新關注以及發展我們副業業務的新努力，我們預計我們的經銷商銷售部門將繼續超出預期。

In the category of not as bad as it looks, is international sales. International sales were down 53% or $1.4 million when compared to Q2 of last year, is in fact, really in line with expectations. First, it is important to remember that international sales by their very nature are episodic. These are generally large sales, often more than $1 million in a single sale. As a result, a small delay in shipping out an order can significantly impact our results for any given quarter. This makes it difficult to project international sales quarter by quarter, and it is easy for a shipment to get pushed into the next quarter as we grapple with import permits, export permits, nonproliferation approvals.

國際銷售並不像看上去那麼糟糕。與去年第二季度相比，國際銷售額下降了 53%，即 140 萬美元，事實上，確實符合預期。首先，重要的是要記住，國際銷售本質上是間歇性的。這些通常都是大額銷售，單次銷售通常超過 100 萬美元。因此，訂單發貨的輕微延遲可能會對我們任何特定季度的業績產生重大影響。這使得逐季度預測國際銷售量變得困難，而且當我們努力處理進口許可證、出口許可證和防擴散審批時，發貨很容易被推遲到下一個季度。

Accordingly, well, this quarter we were $1.4 million behind last year. We expect that we will make up this shortfall in Q3. The other reason why international sales appear to be lagging behind this year versus last year is that this year sales of Byrna products in Latin America do not show up as revenue on our income statement. As we account for Byrna LATAM on the equity method of accounting. In comparison, sales into South and Central America did contribute to revenue last year. Specifically, they contributed $4.5 million to revenue. As I discussed earlier, we are having far greater success introducing Byrna into Argentina than we could have possibly imagined. As several candidates for the presidency of Argentina are promoting Byrna as part of the solution to the wave of street crime in Argentina and police shootings in response to this crisis.

因此，本季度我們比去年落後了 140 萬美元。我們預計第三季度將彌補這一缺口。今年國際銷售額似乎落後於去年的另一個原因是，今年 Byrna 產品在拉丁美洲的銷售額並未在我們的損益表中顯示為收入。我們採用權益會計法對 Byrna LATAM 進行會計處理。相比之下，去年對南美洲和中美洲的銷售確實為收入做出了貢獻。具體來說，他們貢獻了 450 萬美元的收入。正如我之前所討論的，我們將 Byrna 引入阿根廷所取得的成功遠遠超出了我們的想像。阿根廷總統的幾位候選人正在宣傳拜納，將其作為解決阿根廷街頭犯罪浪潮和應對這場危機的警察槍擊事件的一部分。

Based on orders received by our distributor and RFQs, specifically naming Byrna, we believe that in the next 90 days, more than $5 million of Byrna products will be sold into Argentina by our dealer Bersa as they fulfill those orders from the police departments in Cordoba, Lanus and Buenos Aires. None of these sales, however, will show up in Bernie's numbers as they are being filled with products sold to Bersa last year. For these reasons, we believe that our international sales effort, well lumpier than we would like it to be, is in line with expectations.

根據我們的經銷商收到的訂單和詢價（特別是 Byrna），我們相信在接下來的 90 天內，我們的經銷商 Bersa 將向阿根廷出售超過 500 萬美元的 Byrna 產品，因為他們履行了科爾多瓦警察部門的訂單、拉努斯和布宜諾斯艾利斯。然而，這些銷售都不會出現在 Bernie 的數據中，因為這些數據中充滿了去年賣給 Bersa 的產品。出於這些原因，我們相信我們的國際銷售工作（比我們希望的要復雜得多）符合預期。

Okay. That brings us the DTC. sales, which is currently an area that requires focused effort and strategic navigation from Byrna's management team. Well on the face of it, sales for the quarter at byrna.com and amazon.com were off less than 1% and 6% respectively. These declines for tend to trend that we are actively addressing. In late March, Meta and Google simultaneously implemented a ban on any advertising by Byrna on their platforms, classifying Byrna as a contraband product. Google have since backed off its position slightly allowing Byrna to run ads on YouTube but not on Google. Meta, however, has been unrelenting in its advertising ban of all Byrna products on Facebook and Instagram.

好的。這給我們帶來了 DTC。銷售，目前這是一個需要 Byrna 管理團隊集中精力和戰略指導的領域。從表面上看，byrna.com 和 amazon.com 本季度的銷售額分別下降了不到 1% 和 6%。我們正在積極解決這些下降趨勢。 3月下旬，Meta和谷歌同時禁止Byrna在其平台上發布任何廣告，將Byrna列為違禁產品。此後，谷歌稍微放棄了立場，允許 Byrna 在 YouTube 上投放廣告，但不能在谷歌上投放廣告。然而，Meta 一直毫不鬆懈地禁止所有 Byrna 產品在 Facebook 和 Instagram 上做廣告。

We have been kicked off of Facebook in the past, but when this happened, we had been able to speak to a person to get the ban lifted. This time we are unable to even get Meta to engage with us. Clearly, there has been a change in policy at the corporate level. This inability to advertise on these large social media sites has resulted in an immediate fall-off in web traffic on byrna.com, byrna.ca, Byrna Canada, and amazon.com. On byrna.com, daily web traffic fell from an average of 26,000 sessions a day in the first three months of calendar 2023 to an average of about 12,000 sessions, a day in the second three months of calendar 2023, a 55% decline.

我們過去曾被 Facebook 踢出，但當這種情況發生時，我們能夠與某人交談以解除禁令。這次我們甚至無法讓 Meta 與我們互動。顯然，公司層面的政策發生了變化。由於無法在這些大型社交媒體網站上做廣告，導致 byrna.com、byrna.ca、Byrna Canada 和 amazon.com 的網絡流量立即下降。 byrna.com 的每日網絡流量從 2023 年前三個月的平均每天 26,000 個會話下降到 2023 年後三個月的平均每天約 12,000 個會話，下降了 55%。

Amazon sessions declined by 10.4% during the same period. Most concerning of all is Byrna Canada, where sessions are down 80% from the beginning of the year as we don't have the installed user base in Canada that can drive engagement. Despite the significant decline in sessions, sales on byrna.com for the quarter were off less than 1% compared to the same period last year, while Amazon sales were off just 5.5% compared to the same period last year. Canada shows an improvement year over year, but that's primarily because we were not selling in Canada in Q2 of last year.

同期，亞馬遜的訪問量下降了 10.4%。最令人擔憂的是加拿大的 Byrna，該地區的會話數較年初下降了 80%，因為我們在加拿大沒有可以推動參與度的固定用戶群。儘管會話量大幅下降，但 byrna.com 本季度的銷售額與去年同期相比下降了不到 1%，而亞馬遜銷售額與去年同期相比僅下降了 5.5%。加拿大的銷量同比有所改善，但這主要是因為我們去年第二季度沒有在加拿大銷售。

Though we are pleased with the resilience of our e-commerce sales, we recognize that over time, fewer sessions will result in lower sales. We do not know when or if Meta's ban on advertising of Byrna products will be lifted. Accordingly. we are working around the clock to find effective alternatives to the large social media sites, as we look to get the Byrna story out to the public. Over the next several months, we will be expanding sales efforts to include other e-commerce sites such as Target and Wal-Mart.

儘管我們對電子商務銷售的彈性感到滿意，但我們認識到，隨著時間的推移，會話減少將導致銷售額下降。我們不知道 Meta 對 Byrna 產品的廣告禁令何時或是否會解除。因此。我們正在夜以繼日地尋找大型社交媒體網站的有效替代品，因為我們希望將拜納的故事公之於眾。在接下來的幾個月中，我們將擴大銷售力度，將塔吉特和沃爾瑪等其他電子商務網站納入其中。

We will be redirecting our advertising spend to Twitter and to smaller niche market website to cater to Byrna's key demographics. In other words, boaters, campers, RVers, hikers, motorcyclists, car enthusiasts, private pilots, liquor store owners, convenience store owners, security guards, et cetera. We also plan to increase our print media advertising budget and place a greater emphasis on being at gun shows, trade shows, and other events through our Side Hustle dealers.

我們將把廣告支出轉向 Twitter 和較小的利基市場網站，以滿足 Byrna 的關鍵人群需求。換句話說，划船者、露營者、房車愛好者、徒步旅行者、摩托車手、汽車愛好者、私人飛行員、酒類商店老闆、便利店老闆、保安人員等等。我們還計劃增加印刷媒體廣告預算，並更加重視通過我們的 Side Hustle 經銷商參加槍展、貿易展覽和其他活動。

We are extremely disappointed that Meta and Google have taken a step to ban Byrna from advertising on their platforms. We firmly believe the Byrna provides a solution to America's epidemic of gun violence. We are actively working to overturn these existing bans on advertising, marketing, and frankly, even the discussion of less lethal weapons on social media. We believe it is crucial that we educate consumers as to the viable nonlethal alternatives to traditional firearms. So anytime someone uses a non-lethal device rather than a traditional firearm themselves, a potential tragedy is averted.

我們對 Meta 和 Google 採取措施禁止 Byrna 在其平台上投放廣告感到非常失望。我們堅信拜納為美國槍支暴力的流行提供了解決方案。我們正在積極努力推翻這些現有的廣告、營銷禁令，坦率地說，甚至是社交媒體上有關低致命性武器的討論。我們認為，教育消費者了解傳統槍支的可行非致命替代品至關重要。因此，任何時候有人使用非致命裝置而不是傳統槍支本身，就可以避免潛在的悲劇。

Towards this end, on July 6, Byrna kicked off a campaign using e-mail, billboards, print media and social media sites such as Twitter to try to get better to reconsider their position. You can find this campaign on Byrna's websites. Our goal is to convince Meta that their decision to ban advertising by less lethal weapons companies robs consumers of the opportunity to learn about less lethal alternatives to traditional firearms. In this case, free speech saves lives. We urge all of you to go to our website and support our efforts to drive awareness of the benefits of less lethal options to traditional firearms.

為此，7 月 6 日，拜納利用電子郵件、廣告牌、印刷媒體和 Twitter 等社交媒體網站發起了一場活動，試圖更好地重新考慮自己的立場。您可以在 Byrna 的網站上找到此活動。我們的目標是讓 Meta 相信，他們禁止低致命武器公司做廣告的決定剝奪了消費者了解傳統槍支的低致命替代品的機會。在這種情況下，言論自由可以拯救生命。我們敦促大家訪問我們的網站並支持我們努力提高人們對傳統槍支致命性較低的選擇的好處的認識。

While this ban is a challenge that Byrna must overcome, fortunately, we are well positioned to meet this challenge. Byrna is currently cash flow positive with over $15.4 million of cash and cash equivalents with no debt. We are in a strong working capital position. In the coming quarters, we expect to work through our sizable inventory, which will free up still additional cash, providing an ample cushion. Byrna will remain vigilant in its cost control efforts to remain profitable while the company works to develop alternate ways to get its message out to consumers. This solid financial foundation provides us with the ability to navigate the current challenges while we position ourselves to invest in key areas of the business and still maintain a robust cash flow trajectory.

雖然這項禁令是 Byrna 必須克服的挑戰，但幸運的是，我們已經做好了應對這一挑戰的準備。 Byrna 目前現金流為正，擁有超過 1540 萬美元的現金和現金等價物，沒有債務。我們的營運資金狀況良好。在接下來的幾個季度中，我們預計將消耗大量庫存，這將釋放更多現金，提供充足的緩衝。 Byrna 將在成本控制方面保持警惕，以保持盈利，同時公司致力於開發替代方式向消費者傳達其信息。這一堅實的財務基礎使我們有能力應對當前的挑戰，同時我們將自己定位於投資於業務的關鍵領域，並仍然保持強勁的現金流軌跡。

Before we hand the call over to questions, I'd like to take a moment to provide an update on our outlook. As you may have seen from this morning's press release, we have made the strategic decision to withdraw our previously communicated guidance for fiscal 2023. We have not taken this decision lightly, which is why we're taking the time to review it right now. In short, due to the uncertainty created by the ban of advertising of our products on various social media platforms, but particularly Meta, we feel that it is extremely difficult to forecast DTC sales until we are able to redeploy our advertising funds and redirect our marketing efforts to new venues and new approaches.

在我們開始提問之前，我想花點時間介紹一下我們的最新展望。正如您可能從今天早上的新聞稿中看到的那樣，我們已做出戰略決定，撤回之前傳達的 2023 財年指引。我們並非輕易做出這一決定，這就是我們現在花時間對其進行審查的原因。簡而言之，由於我們的產品在各種社交媒體平台（尤其是 Meta）上禁止做廣告所帶來的不確定性，我們認為在我們能夠重新部署廣告資金並重新調整營銷方向之前，預測 DTC 的銷售情況非常困難努力開拓新的場地、新的途徑。

Once we have a better understanding of the effectiveness of these advertising platforms and the impact of our direct social media engagement, we will be in a better position to forecast e-commerce revenues. Nonetheless, we remain optimistic about our ability to enhance both our top and bottom-line performance in fiscal 2023. We will provide regular updates on our progress in rebuilding our web sessions and e-commerce sales. We remain committed to making Byrna the premier provider of nonlethal personal security solutions. We believe the actions we are taking today will position our company for sustainable future growth and greater long-term cash generation.

一旦我們更好地了解這些廣告平台的有效性以及我們直接參與社交媒體的影響，我們將能夠更好地預測電子商務收入。儘管如此，我們仍然對我們在 2023 財年提高營收和利潤的能力保持樂觀。我們將定期更新我們在重建網絡會話和電子商務銷售方面的進展。我們仍然致力於使 Byrna 成為非致命個人安全解決方案的首要提供商。我們相信，我們今天採取的行動將使我們的公司實現可持續的未來增長和更大的長期現金生成。

Now let's open the call up for your questions. Operator, please provide the appropriate instructions.

現在讓我們開始電話詢問您的問題。操作員，請提供適當的說明。

Certainly. (Operator Instructions)

當然。 （操作員說明）

Jeff Van Sinderen, B. Riley.

傑夫·範·辛德倫，B.萊利。

Hi. Good morning, everyone. Just sort of, I guess, a conceptual question around Meta, can you say -- and I'm surprised that they're not responding at all. That seems really unusual to me, you think that Meta has any idea that by default, their band is actually supporting injury and perhaps death with firearms by just not enabling people to learn about non-lethal and just anymore around that because it just seems like such a strange position for them to take?

你好。大家，早安。我想，這只是一個圍繞 Meta 的概念性問題，你能說嗎？令我驚訝的是，他們根本沒有回應。這對我來說真的很不尋常，你認為 Meta 知道默認情況下，他們的樂隊實際上是在支持槍支傷害甚至死亡，只是不讓人們了解非致命以及與之相關的知識，因為它看起來就像他們採取如此奇怪的立場？

Yeah. Look, I think that this is not intentional. I don't think that Meta clearly is looking to -- for people to get injured. On the other hand, every time somebody complains about a website that shows something that looks like a gun, they have to deal with it. So I think they've taken the easy way out and just say it's easier for us not to deal with this, and we'll just ban Byrnas products from the website. Our efforts to engage with them and this includes taking out billboards rest across from their office to get them to understand that less lethal weapons are part of the solution to the epidemic of gun violence in America.

是的。看吧，我覺得這不是故意的。我不認為 Meta 顯然希望人們受傷。另一方面，每當有人抱怨某個網站顯示看起來像槍的東西時，他們就必須處理它。所以我認為他們採取了簡單的方法，只是說我們不處理這個問題更容易，我們將禁止在網站上使用 Byrnas 產品。我們努力與他們接觸，其中包括拆除他們辦公室對面的廣告牌，讓他們了解低致命性武器是解決美國槍支暴力流行問題的一部分。

We're hopeful that over time these efforts will be successful. I think this was a knee-jerk reaction. This happened in the wake of the Nashville school shooting where all of the websites just basically cracked down on any advertising of any weapon on their platforms. But I think over time, Jeff, we should be able to convince them that it is important. If you look at Meta's historic mission, their mission is to educate the public. Their mission is to provide a forum for the transfer of knowledge. So we're hopeful that we can get this message across to them. And that's also why we are urging all of our customers. We've got a e-mail subscriber list of almost 300,000 people. We're trying to engage on social media in various chat rooms and so forth. But we would like people to start engaging with Meta and carrying this story forward because it is an important story to tell.

我們希望隨著時間的推移，這些努力將會取得成功。我認為這是下意識的反應。這發生在納什維爾校園槍擊事件之後，所有網站基本上都嚴厲打擊了其平台上任何武器的廣告。但我認為，傑夫，隨著時間的推移，我們應該能夠讓他們相信這很重要。如果你看看 Meta 的歷史使命，他們的使命就是教育公眾。他們的使命是提供一個知識轉移的論壇。因此，我們希望能夠向他們傳達這一信息。這也是我們敦促所有客戶的原因。我們有近 300,000 人的電子郵件訂閱者名單。我們正在嘗試通過各種聊天室等方式參與社交媒體。但我們希望人們開始參與 Meta 並繼續推進這個故事，因為這是一個重要的故事。

Okay. That's helpful. I think to understand that maybe it's just, you said a knee-jerk reaction and Meta needs to dig into it a little bit deeper, and I guess kind of understood the powerful platform that they have and actually do some good and prevent injury in this world.

好的。這很有幫助。我認為要理解，也許這只是，你說的是下意識的反應，Meta需要更深入地研究它，我想有點理解他們擁有的強大平台，並且實際上做了一些好事並防止受傷世界。

Maybe we can turn to -- I realize you went through guidance, but I guess just thinking along the lines of order of magnitude maybe what are you thinking about the revenue progression over the remainder of this year, maybe considering various year-over-year comparison elements? Because I know we've got some of those, and obviously, you've got some episodic elements, in some of your businesses. And then also just kind of considering the increasing penetration of dealer sales. Maybe you can just touch on anticipation for gross margin progression over the next couple of quarters?

也許我們可以轉向——我知道你經歷過指導，但我想只是沿著數量級思考，也許你對今年剩餘時間的收入進展有何看法，也許考慮到與去年同期相比的各種情況比較元素？因為我知道我們有一些這樣的元素，顯然，在你的一些業務中也有一些偶發元素。然後還要考慮經銷商銷售滲透率的不斷提高。也許您可以談談對未來幾個季度毛利率增長的預期？

Well, in terms of gross margin progression, we think that will be improving over the next couple of quarters. As we said, there was a relatively large negative manufacturing variance due to the difficulties we faced early in the quarter.

就毛利率進展而言，我們認為未來幾個季度將會有所改善。正如我們所說，由於我們在本季度初面臨困難，因此出現了相對較大的負製造差異。

David, you want to?

大衛，你願意嗎？

Yeah. I think part of it is -- over the long term, I expect gross margin to be improving to be more like what we saw last quarter, but one of the drivers of where we are right now is simply that we've got a lot of inventory and it's FIFO. And that means that we've got to sell out this inventory that we built at the old cost. So I expect slight improvement in the next two quarters, probably not much improvement in Q3, slight improvement in Q4. And then probably as we get into Q1, we'll start to see that the more modern costs coming in. But I would say over the next two quarters, only slight improvement.

是的。我認為部分原因是——從長遠來看，我預計毛利率將會改善，更像我們上個季度看到的那樣，但我們目前所處位置的驅動因素之一就是我們有很多庫存和先進先出。這意味著我們必須賣掉以舊成本建立的庫存。所以我預計未來兩個季度會有輕微改善，第三季度可能沒有太大改善，第四季度略有改善。然後，當我們進入第一季度時，我們可能會開始看到更現代的成本出現。但我想說，在接下來的兩個季度，只會略有改善。

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

好的。然後我們可以花一分鐘時間談談 12 號口徑。我意識到，我們還處於早期階段，我知道您在一些經銷商中。也許只是向我們介紹一下我們目前的情況，目前有多少經銷商？然後有關於早期銷售的數據嗎？我確信這些數據也受到了營銷挑戰的影響？

Yes, we had a lot of success with the 12-gauge at SHOT Show and we had taken orders for the first 200,000 rounds with dealers. And our goal was to get those rounds out, which we have done. We have seen a little bit of reordering, but it's still too early. I think it's important to keep in mind that this is a completely new product category. So 12-guage less lethal is really not a thing. There are some bean bag rounds and other rounds that have been used by law enforcement, but it's not really a consumer product. So we still have a lot of education that we need to do. I will say to you, we are extraordinarily encouraged because nobody has used it and had anything negative to say about it.

是的，我們的 12 號子彈在 SHOT Show 上取得了很大的成功，並且我們已經從經銷商處收到了前 200,000 發的訂單。我們的目標是完成這些輪次，我們已經做到了。我們已經看到了一些重新排序，但現在還為時過早。我認為重要的是要記住這是一個全新的產品類別。所以12號的殺傷力確實不是問題。有一些豆袋彈和其他彈已被執法部門使用，但它並不是真正的消費品。所以我們還有很多教育工作要做。我會對你說，我們感到非常鼓舞，因為沒有人使用過它，也沒有人對此有任何負面評價。

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

所以我們知道它非常受歡迎，這只是一個口頭傳播的問題。我認為對我們來說更有趣的是對此表示興趣的執法機構的數量。我不能討論具體的機構，但可以討論美國一些最大的機構。當然，減少致命性是治安的一個重要組成部分。他們目前使用的 12 號子彈攜帶 70 至 110 焦耳的能量。幾週前有一個關於豆袋彈的故事，它被部署並打破了某人的下巴並嚴重傷害了該人。該機構特別關注 Byrna，因為我們的能量不是 70 到 110 焦耳，而是 19 焦耳。

So I think that with the combination of the Biokinetic's report validating that these rounds are extremely safe and with the level of accuracy and effectiveness that we've been able to demonstrate that we will continue to see growth. It is a little difficult, Jeff, for us to gauge how quick this growth will come. But we are very encouraged that there is a real market for this and that over time, this will become an important part of Byrna revenues stream.

因此，我認為，結合 Biokinetic 的報告，證實這些輪次非常安全，並且我們已經能夠證明我們將繼續看到增長的準確性和有效性水平。傑夫，我們很難判斷這種增長的速度有多快。但我們感到非常鼓舞的是，這有一個真正的市場，隨著時間的推移，這將成為 Byrna 收入流的重要組成部分。

Okay. Thanks for taking my questions. I'll take the rest offline.

好的。感謝您回答我的問題。我會把剩下的部分離線。

Thank you.

謝謝。

Jim McIlree, Dawson James.

吉姆·麥克里、道森·詹姆斯。

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

謝謝。早上好。我希望您能幫助我了解通過您討論的替代網站與 Meta 進行廣告的成本差異，以及您初步認為的接受率。因此，如果您必須在 Meta 上編造大約 10,000 個數字才能獲得 1,000 的銷售額，那麼您需要在這個替代網站上發布多少個數字？所以我只是想再次了解響應率和轉換成本（聽不清）。

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

老實說，我們還沒有足夠的信息。當 Meta 禁止我們時，我們並沒有在一夜之間做出反應，因為正如我過去所說，這種情況可能已經發生了六次，而且我們能夠聯繫到 Meta 上的某人。通常一個月之內，我們就會在 Facebook 和 Instagram 上恢復。兩個月後我們開始非常認真地對待這個問題，我們認識到這是我們所面臨的不同情況。因此，我們正在嘗試尋找替代的廣告來源。我們尚未與任何這些不同的平台進行合作。但只是為了讓您了解我們正在談論的內容 - 有一些汽車雜誌，可能有十幾種不同的汽車雜誌，他們向訂閱者群發送電子郵件。這些電子郵件有廣告。當你點擊它們並訪問他們的網站時，他們的網站上有廣告。

So we have started the process of reaching out --. We're hiring a digital advertising specialist to manage this process because this will take a lot more work than just giving Facebook $200,000. Now instead of giving Facebook, $200,000, we're going to have to give 40 different platforms $5,000 to drive business. But we intend to do this in the segments where we know we're speaking to our demographic. One of the things that's kind of interesting about this is Facebook was sort of like crack. It because it was easy and it was somewhat effective. And it was hard for us to get off, but we recognize that over time, it was becoming less effective.

所以我們已經開始了伸出援手的過程——。我們正在聘請一名數字廣告專家來管理這一流程，因為這比僅僅向 Facebook 提供 20 萬美元需要做更多的工作。現在，我們將不得不向 40 個不同的平台提供 5,000 美元來推動業務，而不是向 Facebook 提供 20 萬美元。但我們打算在我們知道我們正在與我們的受眾群體對話的細分市場中這樣做。有趣的事情之一是 Facebook 有點像破解。因為它很簡單，而且有些效果。我們很難擺脫困境，但我們認識到，隨著時間的推移，它的效率越來越低。

So even when the sessions fell off dramatically, when our sessions went from 26,000 to 12,000, we did not see a significant drop-off in sales. As I said, our sales for the quarter were off less than 1%, and we are still seeing a much, much higher conversion rate than we did when we were advertising on Meta. So we knew the effect of this of Meta was waning, and we think it's waning -- was waning for two reasons. One, we were unable to really focus our ads as precisely as we had been in the past.

因此，即使會話數急劇下降，當我們的會話數從 26,000 減少到 12,000 時，我們也沒有看到銷售額大幅下降。正如我所說，我們本季度的銷售額下降了不到 1%，但我們仍然看到轉化率比我們在 Meta 上做廣告時高得多。所以我們知道 Meta 的影響正在減弱，我們認為它正在減弱——減弱有兩個原因。第一，我們無法像過去那樣準確地定位我們的廣告。

As Apple has started to provide less personal information about its customers, it has become more difficult to really slice their customer base demographically. We think that by going after these specific platforms that cater to our customer base, we're able to do two things. One, we're able to replicate in total the number of views that we're getting. But more importantly, we'll be able to do it geared to the specific demographics that we know are interested in Byrna. So, I as I said, we will keep people apprised of our success going forward. We don't have enough information at this point.

隨著蘋果開始提供更少的客戶個人信息，從人口統計角度真正劃分客戶群變得更加困難。我們認為，通過尋找這些迎合我們客戶群的特定平台，我們可以做兩件事。第一，我們能夠複製我們獲得的瀏覽量總數。但更重要的是，我們將能夠針對我們知道對 Byrna 感興趣的特定人群進行調整。因此，正如我所說，我們將讓人們了解我們未來的成功。目前我們沒有足夠的信息。

Yeah. I mean, this is the main reason for our withdrawing guidance because this is uncharted territory. And really what you're asking about is what will the results be? What will the uptick in sales be and what would the return on advertising dollars be, we don't know. We'll tell you as it goes.

是的。我的意思是，這是我們撤銷指導的主要原因，因為這是未知的領域。實際上，您要問的是結果會是什麼？我們不知道銷量會增加多少，廣告費用的回報會是多少。我們會告訴你事情的進展。

But we'll know soon.

但我們很快就會知道。

Yes.

是的。

And as far as the -- David, your discussion about gross margin that obviously assumes some mix shift away from direct to consumer. Does that have a big impact on your prediction that gross margins improve modestly over the next couple of quarters? Or we seeing two things happen: one, we're getting rid of the old inventory, but we're getting hit by the change in the mix?

至於大衛，你對毛利率的討論顯然假設某種混合從直接轉向消費者。這對您預測未來幾個季度毛利率將小幅改善有很大影響嗎？或者我們看到發生了兩件事：一，我們正在擺脫舊庫存，但我們受到了組合變化的打擊？

The main thing I'm looking at is just what's the cost that the old inventory is going to be going at. I haven't done a lot to predict what will the change in the mix be for the same reason why we're not providing guidance. It's hard to predict what the mix will be over the next couple of quarters. Over the longer term, what we see happening with the dealer sales that I expect to be a long-term trend. That will -- the dealer sales will gradually form a greater percentage of our overall revenues. And yes, over the longer term that will have a dampening effect on our gross margin percentage. So that's longer term and I really have --.

我主要關注的是舊庫存的成本是多少。出於同樣的原因，我沒有做太多的事情來預測混合中的變化將會是什麼，這與我們不提供指導的原因相同。很難預測未來幾個季度的混合情況。從長遠來看，我們所看到的經銷商銷售情況將是一個長期趨勢。這將 - 經銷商銷售額將逐漸在我們的總收入中佔據更大的比例。是的，從長遠來看，這將對我們的毛利率產生抑製作用。所以這是更長期的，我真的有——。

And David if I can just interrupt it, but not as much as you would think. So with these Side Hustle dealers and with these Premier Dealers, we are not working to rep groups. So we are not building in the margin of the reps. We're not working through distributors. So we're not building in the margin of the distributors. These are the highest margin dealer sales, the Side Hustle business and the Premier Dealers. So we think that, yeah, the change in mix will have some impact, but not as great as just substituting our current dealer margins for our current DTC margin.

大衛，如果我可以打斷它，但不會像你想像的那麼嚴重。因此，對於這些副業經銷商和這些高級經銷商來說，我們並不是為了代表團體而工作。所以我們不會增加代表的利潤。我們不通過分銷商合作。所以我們不會增加經銷商的利潤。這些是利潤率最高的經銷商銷售、副業業務和高級經銷商。因此，我們認為，是的，組合的變化會產生一些影響，但不如用我們當前的經銷商利潤替代我們當前的 DTC 利潤那麼大。

Got it. Okay. Thank you. That's it from me.

知道了。好的。謝謝。這就是我說的。

Thank you.

謝謝。

Thank you. We've reached the end of our question-and-answer session. I'd like to turn floor back over to management for any further closing comments.

謝謝。我們的問答環節已經結束。我想將發言權交還給管理層，以徵求進一步的結束意見。

Again, I want to thank everybody for participating on this call. I'd like to take this opportunity to just share a little bit of sad news, Michael Wager, who was our Chief Strategy Officer passed away this last weekend after a very difficult battle with cancer. He was a really good friend and colleague and was very important over the last several years in Byrna's a growth in development, and we'll miss him.

我要再次感謝大家參與這次電話會議。我想藉此機會分享一點悲傷的消息，我們的首席戰略官邁克爾·瓦格 (Michael Wager) 在與癌症進行了一場艱難的鬥爭後於上週末去世。他是一位非常好的朋友和同事，在過去幾年中對 Byrna 的發展起到了非常重要的作用，我們會想念他的。

Anyways, thank you very much for joining us, and we'll look forward to taking other questions offline.

不管怎樣，非常感謝您加入我們，我們期待著線下回答其他問題。

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.

謝謝。今天的電話會議和網絡廣播到此結束。此時您可以斷開線路，度過美好的一天。我們感謝您今天的參與。