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| After kicking off the program with Sean Hannity, we have been able to successfully add three additional celebrities to the mix; Judge Jeanine, Glenn Beck, and Bill O’Reilly |
| This surge in Web traffic led to a 41.2% year-over-year increase in fourth quarter direct-to-consumer sales |
| However, with a 5x ROAS and a 60% plus gross profit margin for our online sales, the return on marketing spend is very accretive |
| In fact, with Glenn Beck, the ROAS numbers were extraordinarily strong right out of the box, because in December, Glenn spoke about our product on his show, not as part of our advertising, but just as something that he was interested in |
| That said, we expect to see continued strong sales in South America, particularly in Argentina and, with some luck, Brazil |
| We expect to see strong continued growth in the dealer segment |
| You simply see that, okay, they are more profitable, so we have got better results from investment in joint venture |
| In the last 2 months of the year, however, once we had fully implemented the celebrity endorsement program, sessions grew to 37,550 a day, up 41% from the 27,000 daily sessions for the last 2 months of 2022, demonstrating the effectiveness of the new celebrity endorsement program compared with the social media advertising program employed the prior year |
| I am extremely proud of what the team at Byrna accomplished in dealing with these twin challenges |
| And as David mentioned, there is no debt on our books, so we are well-positioned for growth |
| Fortunately, Byrna’s strong financial footing provides the foundation to be able to undertake these projects and handle the expected growth in sales |
| We expect these projects to be completed in the second half of 2024, setting a strong foundation for Byrna’s continued growth and operational efficiency |
| We believe that Mexico offers an amazing opportunity for growth as we expand our presence into both law enforcement and military markets, as well as the consumer market, through dealers and a soon-to-be created online presence |
| Without this one-time surge in international sales in the prior year, the fourth quarter displayed strong growth |
| All told, we have every reason to expect strong yet manageable year-over-year growth in 2024 |
| This streamlines the checkout process and offers additional opportunities to upsell ammunition, making this a win-win for customers and Byrna |
| Since then, production and demand for the LE have remained strong; and, for the most part, we’ve been able to keep up with the elevated demand for the LE launcher even though it has proven to be much stronger than originally predicted |
| So what does that mean for growth? As we look ahead to the rest of the year, based on what we have seen to date, we are quite optimistic about the sustained impact of our celebrity endorsement model |
| However, it is safe to say that, based on the first 11 weeks of Q1, we expect to see strong growth in our online business in Q1 and, hopefully, well beyond |
| For 2024, we also expect to see improved operational efficiencies, reduced product costs and improved margins as a result of a number of initiatives that we are undertaking |
| The overwhelming success of Byrna Toronto underscores the opportunity that exists in Canada as restrictive gun laws serve to drive the demand among Canadians looking for a means to be able to protect themselves and their families |
| This should allow us to both reduce inventory levels and improve factory efficiency, which in turn should bring down costs, over time |
| This shift in strategy not only helped us circumnavigate around the mainstream and social media advertising bans, but it propelled us to a record-breaking fourth quarter as our daily sales spiked to $120,000 a day on byrna.com and $35,000 a day on amazon.com, posting $15.4 million in domestic sales |
| We also expect to see strong double-digit growth from both Canada and Mexico this year |
| Our new marketing approach has significantly enhanced brand visibility and has driven a dramatic increase in website visits and sales |
| At the same time that we expect to see strong sustainable growth in DTC sales, we also expect to see a marked increase in dealer sales, driven largely by our premier dealer program as we look to double the number of participating dealers |
| This simplified offering, coupled with our new expedited shipping option, should help improve both revenues and margins |
| If SIG Sauer’s success with the introduction of their micro-compact pistol is any indication, we should see a dramatic increase in overall sales when we introduce this micro-compact launcher |
| The trend in January and February to date remains very strong |
| These campaigns have been particularly effective in attracting new customers, with first-time customer rates soaring to 66.5% of daily orders in Q4, an 11% increase from the prior year when our first-time customer rate was 55.5% |
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| For this reason, we expect that our reported international sales number in 2024 will remain depressed and will come in well below our 2022 record of $9 million |
| However, by Q3, we saw a significant negative impact on sales, posting our worst quarter in years at just $7.1 million in revenues as we averaged only $44,000 a day on byrna.com and $11,000 a day on amazon.com |
| The first was a number of unforeseen production problems related to the rollout of the new Byrna LE Launcher |
| Not only was this a black eye for the company, it had a material negative impact on sales, as many customers wanted to wait for the more powerful Byrna LE after it was introduced at SHOT Show |
| This sharp decline in sales resulting from the social media advertising ban has the potential to be an existential threat to the company if we could not find a way to manage around it |
| As David mentioned, the primary reason for the dip in our full-year revenue for 2023 was the $7.6 million decline in year-over-year international sales |
| Compounding the problem was the reduced effectiveness of ads on Facebook, Instagram, Google and Twitter due to the fact that the big tech companies were bowing to public pressure when it came to capturing and selling personal data, making it more difficult for us and other businesses to micro-target consumers |
| This decline was, again, largely due to a $7.6 million decrease in international sales from South Africa, South America and Asia, which are characterized by large but infrequent orders, as experienced in the prior year |
| While dealing with the social media advertising ban was extraordinarily stressful, it was a blessing in disguise |
| However, as we ramped up production, we ran into a number of production problems and quality control issues that required us to halt production and stop taking orders |
| We saw an immediate 60% drop in Web traffic from Q1 to Q2 |
| Having two different configurations created a lot of confusion for first-time customers |
| This led to an unforeseen stack-up of tolerances that adversely affected the operational launcher |
| Adding more money to these individual campaigns results in diminishing returns |
| Analysts reduced both sales projections and price targets, and some even downgraded the stock despite the already-precipitous decline |
| By contrast, for the first 10 months of 2023, year-over-year sessions growth was a negative 11% |
| While the timing of large international orders is often sporadic and hard to predict, the real reason for the decline in international sales is that, starting in 2023, our sales to South America no longer showed up in Byrna Technologies’ numbers |
| Here, I wanted to call attention to a complete reversal of the trend of declining cash balances that prevailed through the first three quarters of the year due to declining sales and high inventory balances |
| The year began with Byrna running headlong into 2 extremely challenging problems |
| For the full year, adjusted EBITDA totaled negative $2.0 million compared to negative $1.0 million in the prior year |
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