Byrna Technologies Inc. Q2 FY2022 Earnings Call

Greetings, and welcome to the Byrna Technologies Second Quarter 2022 Earnings Conference Call and Webcast. As a reminder, this conference call is being recorded and all participants are in listen-only mode. Before turning the call over to Bryan Ganz, Byrna Technologies' Chief Executive Officer, I will read the safe harbor statement. Some discussions made today may include forward-looking statements. Actual results could differ materially from the statements made today. 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. The company assumes no obligations 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 in the Investors section of our website for further information regarding forward-looking statements and reconciliations of non-GAAP results to GAAP results. I'll now turn the call over to Mr. Bryan Ganz. Sir, please go ahead. Thank you.

Good morning, everyone, and thank you for joining us for Byrna's second quarter fiscal year 2022 earnings call. David North, our CFO, will be discussing our second quarter results after which I will provide some additional color on the quarter and discuss recent developments. So I'd like to start the call by turning it over to David so that he can discuss our second quarter financial performance. After my section, David and I will be taking questions. David?

Thanks, Bryan, and thanks, everyone, for joining us. Now I'll review the financial results for the second quarter ended May 31, 2022. Revenues were $11.6 million this quarter. This is a decrease of $1.8 million compared to the $13.4 million in last year's second quarter. That's because revenue in the second quarter of 2021 was unusually high due to a surge in sales after Byrna's product was featured on Fox News' Hannity Show, a nationally syndicated news program on April 3 of that year. This Hannity effect generated approximately $7.5 million in additional orders in the three weeks following Hannity's mention of the Byrna on national TV. Second quarter revenue of $11.6 million is in line with expectations and is $3.6 million higher than first quarter revenue of $8.0 million. Gross profit was $6.1 million or 52.7% of reported net revenue in the second quarter of fiscal 2022. This was down from 56.4% of net revenue in the second quarter of 2021. Reduction in gross profit margin was due to higher freight costs, which are a result of increased energy costs and the lingering effects of the supply chain disruption and a higher proportion of lower margin international sales in the current quarter. We estimate that higher freight costs account for about 1.9% of the difference from prior year gross margin percentage. And gross profit margin, as I said, also decreased due to an unusually high percentage of international sales this past quarter. International sales are made to distributors rather than directly to customers or the dealers and consequently have lower margins. In Q2 of 2022, international sales represented 23.3% of Byrna's total sales versus just 4.0% in Q2 of 2021. The higher proportion of international sales in 2022 accounted for 2.6% of the difference in Byrna's gross profit margin when compared to the same period in fiscal year 2021. Operating expenses rose to $8.7 million in the second quarter of 2022 from $5.5 million in the same quarter last year. Payroll and compensation-related costs and operating expenses increased from $2.8 million last year to $4.6 million in the second quarter of this year. The increase is due primarily to Byrna's investment in future growth of the company and the hiring of additional staff needed to support these growth initiatives. In addition to the investment in these growth initiatives, payroll and compensation-related costs for the second quarter were also impacted by a $0.6 million non-cash accounting adjustment to reflect a modification of Byrna's long-term equity incentive plans. The second quarter also included $0.4 million of one-time severance costs, while there were no severance costs in the prior year period. Net loss for the second quarter of 2022 was $3.0 million or $0.13 per share compared to net income available to common shareholders of $1.0 million or $0.06 per share in the second quarter of 2021. For the six months ended May 31, 2022, the company is reporting a net loss of $6.2 million. Adding back certain non-cash and one-time expenses, non-GAAP adjusted EBITDA for this quarter was a loss of $0.9 million, bringing year-to-date non-GAAP adjusted EBITDA to a loss of $2.4 million. Taking a look at the balance sheet, cash and cash equivalents decreased $30.5 million from $56.4 million at the end of last fiscal year on November 30, 2021, to $25.8 million on May 31, 2022. About half of this reduction or $15 million was used to repurchase 1,779,000 shares of common stock under a stock buyback plan announced earlier. $6.9 million of cash was used to build inventory balances, which rose from $6.6 million at the fiscal year-end to $13.5 million at the end of the second quarter. The adjusted EBITDA loss accounts for about $3 million of cash used while about $2 million was used for capital expenditure and we paid about $2 million to enter the self-defense aerosol spray market with the acquisition of Fox Labs International on May 25 towards the end of the quarter.

Thank you, David. Well, on the face of it, the second quarter fiscal year 2022 numbers appear to suggest that Byrna lost ground when compared to the second quarter of fiscal year '21. When we peel back the layers, it is clear that the company is continuing to make substantial progress as we lay the foundation for future growth. Organic order flow for the quarter was actually quite strong compared to last year. As David mentioned, last year, we had what we call the Hannity effect, which added about $7.5 million of orders that we could trace directly to Hannity's mention. Excluding the impact of the Hannity effect, orders on byrna.com were up 79% this year over last year in Q2. If we include orders on Amazon.com, which we did not have in last year's second quarter, total e-commerce orders for the quarter were actually up 114% versus a normalized Q2 fiscal year '21. We also saw sequential quarter-over-quarter e-commerce growth that is second quarter of fiscal year '22 versus first quarter of fiscal year '22 of 14% or 17.5%, including Amazon.com, which equals a 90% compound annual growth rate. We are continuing to see strong orders on Amazon.com. On the last earnings call, I mentioned that average daily sales on Amazon were $7,500 in January. In February, they climbed to $8,600. By March, average daily sales on Amazon were $10,000. I am pleased to report that this trend has continued this quarter, with average daily sales on Amazon climbing to $12,600 in April, $16,800 in May, and $20,800 in June. So we continue to see very strong order growth on Amazon.com as well as byrna.com. With regard to margins, while overall margins declined year-over-year from 56.4% to 52.7%. Margins on our critical domestic market were essentially unchanged from last year despite incurring an additional 1.9% in higher freight costs and a larger percentage of dealer sales. We expect freight costs to remain high for the balance of 2022. However, freight costs should start to come down significantly in 2023 as we start to be able to ship components and raw materials by ocean freight. Ocean freight is a fraction of the cost of air freight. David mentioned that we're building inventories so that we will have sufficient raw material and component inventory on hand to allow us to transition from air freight to ocean freight without risking an interruption in production. Gross margins were also negatively impacted by the unusually high percentage of international sales this past quarter. As David mentioned, international sales, by their nature, are lower margin sales due to the fact that we're selling to distributors rather than to dealers or direct to consumers. In Q2 of this year, international sales represented 23.3%. However, for the year, we are projecting international sales to be 11% of overall sales. While operating expenses were up $3.2 million year-over-year from $5.5 million to $8.7 million last quarter, it was in line with the last two quarters. More importantly, before the non-cash incentive comp expenses and one-time severance costs, operating expenses for the quarter were $6.3 million, down from the operating expenses of the last quarter of $6.45 million. Last quarter, we stated that we had begun to see a leveling off in Byrna's operating expenses, and we further stated that OpEx should remain reasonably constant for the remainder of fiscal year '22, with only increases coming from one-time charges or the additional variable operating expenses such as credit card fees, Amazon fees, outbound freight, which all increased as revenues increase. This leveling off of our operating expenses was apparent this quarter with operating expenses before non-cash incentive comp and one-time severance coming in essentially 2.5% below the last quarter. The reason that we've seen a significant increase in our operating expenses, however, this year versus last year is due primarily to Byrna's investment in the future growth of the company and the hiring of additional staff needed to support these growth initiatives. Consequently, the additional staffing is not in the administrative areas of the business such as accounting or legal or supply chain, but rather additional staffing in sales and production as we brought on new product managers and new sales and marketing personnel necessary to build out these market segments. While these new business segments have yet to show significant revenues, we do believe that they are critical to the future growth of the business. Specifically, over the last year, Byrna has kicked off a major School Safety initiative, hiring Parkland Dad, Andy Pollack, to spearhead this effort and setting up the School Safety facility in Melbourne, Florida to support our School Safety initiative. We are currently offering training and site evaluation to school districts free of charge to drive awareness of the Byrna Ballistipac, a backpack that converts into full body armor with a single motion. The Ballistipac, which can stop six rounds from an AR-15, comes equipped with a stop-the-bleed kit and a MOLLE and is designed to give school resource officers or SROs the ability to engage an active shooter and to treat injured students. Byrna has also invested in the development and marketing of the Byrna Shield, a lightweight bulletproof shield designed to fit easily into a child's backpack that can stop six rounds from a .44 Magnum handgun. While we have not yet seen significant revenue from these product lines, given the terrible tragedies over the last several months, we believe that as children head back to school in August, these products will start to gain traction with parents and administrators as they come to see the need to better outfit their SROs and better protect their students and teachers. With regard to the on-site evaluation and training, we've been contacted by numerous school districts. We've begun to set up a training session starting in August when children come back to school. Our only requirement when we give this free on-site training and evaluation is that we allow local news access to the training. We believe that these measures will help us gain earned media and free publicity as we start to show schools what they can do to better protect their students and faculty. Last year, Byrna also purchased Mission Less Lethal to gain access to the less lethal long gun technology that is necessary to penetrate the law enforcement market. We have spent significant resources redesigning these products and developing marketing campaigns and law enforcement training materials for the Byrna TCR and the Mission-4. Production of Byrna's TCR and Mission-4 has just started, with the first TCRs reaching customers last month and the first Byrna produced Mission-4 scheduled to ship later in July. The company expects that these products will add millions of dollars in additional revenue over the balance of fiscal year '22. Just last month, we acquired Fox Labs International, manufacturer of one of the strongest and most effective pepper sprays on the market. The company hired David Happe to head up Byrna's Aerosol Spray Division. Since the acquisition, Byrna has been spending significant resources to launch its new Byrna Bad Guy Repellant or BGR and upgrade the Fox Labs go-to-market strategy, including website redevelopment, updating of the marketing materials, and building out the Fox Labs Amazon website. The company strongly believes that the ability to offer a best-in-class price point product will allow Byrna to both increase its online conversion rate and penetrate a much broader array of brick-and-mortar retailers. Finally, Byrna has opened a facility in Redmond, Oregon to produce its 12-gauge less lethal rounds. Byrna has hired ballistics expert Brian Kinney to help with the final development and testing of Byrna's new 12-gauge less lethal ammunition and has set up Byrna's manufacturing operation in Oregon. Byrna hopes to be able to release the first 12-gauge rounds to market in the fourth quarter of this year. This would be the culmination of a multiyear multimillion dollar project that Byrna believes could add tens of millions of dollars of incremental revenue. The 12-gauge round, which is accurate at distances in excess of 25 meters, has the potential to introduce Byrna to the tens of millions of U.S. shotgun owners who, for the fraction of the cost of a launcher, could convert their existing 12-gauge shotguns into highly effective less-lethal launchers. In summary, we are extremely pleased with the progress we have made thus far this year in terms of not only growing Byrna's brand awareness and driving our top line, but also in terms of putting in place the infrastructure and the products needed to drive Byrna's future growth. I want to close by providing a quick update on a few topics that we raised on our last earnings call. First off, the share repurchase program. As David mentioned on the last earnings call, we had just completed a $10 million tranche in our share repurchase program, buying back over 1 million shares. This quarter, we were able to purchase another $5 million of Byrna stock, bringing the total number of shares repurchased to 1,779,958 shares at an average price of just under $8.40. Keep in mind, we issued these shares at $21 last July, bringing in over $37 million to the company. Also last quarter, we reiterated our 2022 guidance of $55 million to $60 million. We remain confident that we can hit our numbers. At this time, I want to reiterate our guidance. We recognize that this is a very back-end loaded forecast, however, because of both the traditionally strong holiday fourth quarter and, more importantly, the introduction of all of these new products we just discussed, including the Byrna TCR, which we've started to ship; the Mission-4; the Byrna LE; the 7-round magazine, which we've just started taking preorders for. In the first few days of taking preorders for the 7-round magazine, we've sold or taken orders for over 3,000 magazines; and for the 12-gauge round, which we are close to releasing in Q4 of this year. We feel confident that we'll be able to hit our forecasted numbers. Now I'd like to turn it back over to the operator, and we'd be happy to take questions from our analysts.

The first question comes from Jeff Van Sinderen from B. Riley Securities.

So a couple of things I wanted to touch on. You guys have a lot going on here for the second half. I wanted to see if maybe you can speak to, I guess, how you're approaching. I know you've got training going on in the school segment for the Ballistipac. But just maybe give us a little more color on marketing around back-to-school for the Shield product, the kind of response you're getting from schools for the Ballistipac and so forth?

Yes. We've obviously invested a lot in terms of financial resources and human resources into the development of our School Safety initiative. Last quarter, we brought on board Andy Pollack, who famously wrote the book 'Why Meadow Died' about his daughter who was killed in the Parkland shooting. We have gotten a lot of press with Andy being on numerous television and radio shows. We believe like all of the products that we released that it's going to take some time. We also, unfortunately, kicked this off at a point in time where nobody is in school. So we do think that when we get back to the back-to-school period, which really starts in early August, we'll start to see a significant increase. If you go to our School Safety website, you will see that there is an opportunity as a school or a school district to sign up for training and site evaluation. We've received quite a few inquiries. Obviously, we're not able to respond to all of them, but we are looking to provide training and evaluation, particularly for larger school districts. And again, as I mentioned, with the only requirement being that we're able to invite local news. So we think this is just a function of being able to get these products in front of people. One of the things, when we introduced the Byrna HD three years ago, I'd like to tell the story that the first day we went live, we sold one. The next day, we sold one. The third day we sold none. It took some time before we started to gain traction with the Byrna. It is a word-of-mouth process where one person tells two people who tell four people who tell eight people who tell sixteen people. So it is important for us to start this process to gain traction. Yes, we've not seen very strong orders yet. That's not to say that we're not selling shields; we're selling dozens of shields every day, but we're not selling hundreds or thousands of shields every day as we suspect we will once this becomes better known through our School Safety initiative and once we have a larger established user base.

Okay. That's helpful. And then if we could switch over to the Bad Guy spray for a minute. Just wondering, I guess, where you are, any update you can give us on discussions with potential brick-and-mortar retailers? How the process is going, building out the website with Amazon and so forth?

This is moving very, very quickly. We are trying to get to the point where you can begin to ship Bad Guy Repellant. We are in production on this. What's holding us up right now are simply labels and packaging for the product, but that should be available over the next week to ten days. We have begun taking preorders on our website. It's been extremely well received, and we've received significant interest from both our existing dealers and from very large national chains, many of which, by the nature of what they sell, cannot sell the Byrna launcher, but are very interested in the Byrna Bad Guy Repellants. We are also going to market with a two-brand strategy, where we're selling Fox Labs as more of a price point product and Bad Guy Repellant as a premium product, so that we can go after the premium locations and the price point locations. We have received the first order for Fox Labs repellent from Walmart. But Walmart, we know, is obviously a price point retailer. So Fox Labs is ideal for them. This will not impact the MSRP of the Bad Guy Repellant, which is about 20% higher. We've been going after some premium flagship stores. We expect to receive orders and be able to report on those in the next several weeks.

Okay. Great. And then just one other, if I could squeeze it in. I'm sure this is a quick question, but at this point, I know you're trying to launch the 12-gauge in Q4. Just wondering what else needs to be done to stand that up and to start getting product actually out the door in Q4 and then the marketing launch plan around that?

We've been working on this for several years as a multimillion dollar project. It involves not only producing the rounds but also the casings, and it requires extensive testing. This is a pyrotechnic product that will not use CO2 propulsion, placing it in a completely different category. We need to ensure that these rounds are 100% non-lethal and easily identifiable to avoid confusion with lethal rounds. Our current focus is on continuous testing, and while it's hard to determine when testing is finished, I can say that the results so far are very encouraging. We don't foresee any issues releasing this product in the fourth quarter, and we are taking all the necessary steps for a successful launch, including production of packaging, ordering molds, expanding our facility in Redmond, Oregon, and acquiring the needed equipment. A lot goes into introducing a product like this, which will be produced in-house and made in the U.S. We're in the final stages of this process.

Okay. That's exciting. We're looking forward to that. Appreciate you taking my questions, continued success.

Our next question is from Brian Gesuale from Raymond James.

I wanted to maybe just touch on a few things here. One, can you talk about the promotional activity in the back half of the year? It sounds like the spray product has some really good momentum, and we're looking to launch the 12-gauge. Can you talk about maybe some promotional activity around Prime Day, the holidays, and maybe where you found some good return success in your marketing activities around some of the core products?

Yes. Brian, thank you so much for that question. I'd be very happy to talk about that. Over the last 12 or 18 months, we've discussed how we will get smarter every quarter as we try various approaches and see how they perform. When we evaluate marketing campaigns, we do an ROI analysis, which basically means we look at what we refer to as ROAs or return on advertising spend. As most of you on this call know, we worked with billboards, and live TV. While both of those were effective, because of the very high costs associated with them, they were not really cost-effective. We have discontinued both billboards and OTT and linear TV. We have been putting most of our money into YouTube and social media. What we have found is that the creative itself is most important. So we've been doing a lot of work building up our in-house capabilities to develop creative. One of the announcements we made last week, as I'm sure everybody on this call knows, was our partnership with Christine Chiu. Christine Chiu is the star and producer of 'Bling Empire', which is essentially a Netflix version of 'Crazy Rich Asians.' She is extremely popular with an audience we don't think we're really reaching today. With her video, we have seen a significant increase in our online sessions. We averaged approximately two sessions a day on byrna.com. On Tuesday, we had 50,000 web sessions, which we attribute to her video. Yesterday, we had 40,000 web sessions again attributable to her video. It is these types of creative that get shared that drive a lot of awareness and help introduce us to new audiences. This very top of the funnel advertising is extremely important as we start to approach Prime Day and more importantly, as we start to approach Q4. So you asked about what we are doing for Prime Day. We are participating in Prime Day. As much as I hate giving up even a single margin point, Amazon has become such an important channel for us that we recognized that we needed to participate in Prime Day, and we expect to see a significant increase in our Amazon sales for the several days of Prime Day and the few days following. Last year, we had an extraordinarily strong Q4 online. We saw sales go up when we put out promotional specials to our Byrna Nation group, or our email list. Sales went up 300%. This year, our email list is now 250,000 members strong. This is up about 250% from last year. The importance of developing this top-of-the-funnel promotion, like the Christine Chiu video, like the Tito Ortiz video is that it gets us access to a lot broader audience. These people come on board, sign up for the email, subscribe to our email list. When we have specials, we are able to directly market to them. We are hoping that we'll be well over 300,000, maybe 350,000 by the time we get to Black Friday specials, which will be very important for us and, of course, for hitting our Q4 numbers.

Right. That's great color. If I could follow up maybe just on a couple of things. Can you remind us of how you're thinking of the addressable market of both the aerosol products and Ballistipacs and how that can develop into meaningful revenue streams for you guys in the future?

It's interesting. Again, we don't know what the total addressable market is even for Byrna. But let's just say for argument's sake that the addressable market of somebody who is going to carry something that looks like a firearm to use to protect themselves is maybe 10 million Americans. If the addressable market for the Byrna is $10 million, then the addressable market for sprays is $50 million. The addressable market for backpack shields is essentially every parent in the U.S. So we look at these as significantly larger addressable markets for Byrna than the Byrna launcher itself. What it does, particularly with the Bad Guy Repellant is it gets people into the Byrna ecosystem. One issue we've been facing from the very inception of the company is that the launcher is expensive. Right now, the Byrna SD retails for $399. By the time you get out of the store and you buy extra ammo, maybe a holster, and maybe a laser, the average order value is around $500 for a first-time buyer. There are a lot of people that come to our website that may be very interested in a Byrna SD but cannot make that $500 purchase. We now have the ability for them to become part of the Byrna ecosystem for $25 with Bad Guy Repellants. This allows them to now become part of the Byrna ecosystem and have as an aspiration the acquisition of the Byrna launcher. We're hoping that we can address a much larger market with Bad Guy Repellant and an even larger market with the Byrna Shield. Once people are in the Byrna ecosystem, they will graduate to the more expensive products and, frankly, the more tactical products. We believe that these are very, very important for us, not just for the sales that they will bring to Byrna, and we think that they will be substantial. We believe we will sell millions of dollars of Bad Guy Repellant and Fox Labs sprays over the balance of the year, and we expect to sell millions of dollars of Byrna shields between now and year-end. They are even more important because they will bring people into the Byrna ecosystem who could not otherwise afford a Byrna launcher or might not be inclined to buy a Byrna launcher. Once they are in the Byrna ecosystem and are able to see what we have to offer, they will be able to do so. We look at the 12-gauge in much the same way. There is an enormous market for the 12-gauge, but we also think it opens us up to a segment of the population that might not otherwise be inclined to buy a Byrna. We are looking at tens of millions, maybe as many as 50 million people who own a shotgun in the United States. If we can get 10% of these people, or 5 million people, to come to the website to buy a box of non-lethal 12-gauge rounds, at the same time they will see that we have a launcher they could keep in their glove box, a shield they could buy for their kids going to school, or Bad Guy Repellant to give to their daughter in college. We believe that all of these other products are not only important in their own right but also for the fact that they will bring people into the Byrna ecosystem.

That's really interesting as a gateway product. Bryan, could you share your thoughts on how Bass Pro Shops is developing? Additionally, you've managed to address many rising costs this year. Can you remind us of your long-term objectives for gross margin?

Bass Pro, as we've just started with them, our sales are frankly nothing to write home about with Bass Pro. We're probably right at around $100,000 of sales to them to date. They have not rolled us out in every store; they've only started with one color. This is very similar to what we've seen with a lot of the brick-and-mortar. They're trying something because they don't want to miss out. They don’t want to be late to the party. By the same token, we have to earn our stripes there. Things are going extremely well. They’ve put in several reorders in the very short period of time that they’ve been carrying Byrna, which means the products are moving. We do think that these dealers are an important part of our overall channel mix. Obviously, we like direct-to-consumer sales best because they are the highest margin sales, but there is a segment of the population that does not want to buy a product like this online. They want to hold it, feel it, see it; they want to have the immediate gratification of buying and walking out of the store with it that day. We do think that by having this available in Bass Pro, with sports bins and shields and front to our Justice, we are able to address that segment of the buying population. There is also a lot of crossover between brick-and-mortar and DTC. There are people that will walk into a brick-and-mortar store and probably people on this phone call that look at something and then pick up their phone, going online and ordering it direct from the company or on Amazon. Similarly, there are people that will come on to our website, and we know this, and they go to our dealer locator to find a dealer near them. We do think that brick-and-mortar drives e-commerce business, and e-commerce business drives brick-and-mortar business. Despite the somewhat lower margins on the dealers, which are around 50%, just slightly below 50% margin versus high 50s for e-commerce sales, it is worth it. In terms of our overall margin improvement, we've been saying this for a long time; we think we have a terminal margin in the 65% range. The way we figure that is largely through cost reduction. Right now, we have a very significant part of our costs of goods sold being inbound freight. Frankly, inbound freight now represents about 25% of our raw material costs. When I started developing the business plan for this business, I projected that the inbound freight would be 5% of our raw material costs. We've run into two problems. One, because of the rapid growth at Byrna, we have never been able to switch to ocean freight, relying on air freight from the very beginning. Of course, we were hit with the pandemic and energy crisis that has made air freight phenomenally expensive. Right now, as we're building up our inventory, we anticipate being able to switch to ocean freight. We see a significant component of that margin improvement simply being the reduction in freight costs. Just to give an example, one of our projectiles, we make for pennies, but the freight may be $0.10 or more to ship the projectile. The freight, in fact, is 300% the cost of the projectile itself. Once we can put these things on the water, we will see a significant improvement in margins. Secondly, we're seeing an improvement because of the shift in product mix. I was just talking with David this morning, and we were actually very pleased with our margins this quarter, because despite higher freight rates, our domestic margins were essentially unchanged. That's unchanged with not only higher freight rates but a larger percentage of dealer sales. The reason for that is the mix. We're seeing more and more Byrna XLs, which have a much better gross profit margin than the standard SD. Interestingly, Byrna XLs are about 22% of our online sales on byrna.com. On Amazon, they're almost 50% of our launcher sales. We're thinking perhaps that the Amazon Prime buyer is a very well-to-do new buyer for whom the price point difference doesn't make that big a difference in their purchasing decision. But we are seeing, because of the new product introductions, an increase in gross profit margin. We remain convinced that we should be over the next 12 months, maybe 18 months, at that 65% gross profit margin that we've been projecting for some time.

At this time, we've concluded our question-and-answer session. I would like to hand it back to management for any final comments.

Thank you. I just want to thank everybody for your continued interest and support of Byrna. As I mentioned, we think that we're very well positioned to take advantage of future growth opportunities. We're excited for the second half of the year as we've got a lot of new products coming online, and we look forward to our Q3 earnings call, where we can give you an update on the performance of BGR and our new mission products in our School Safety initiative and very hopefully, our 12-gauge rounds. Thank you very much to everyone. Thank you.