Good morning. Welcome to Byrna's Fiscal Second Quarter 2025 Earnings Conference Call. My name is Daryl, and I will be your operator for today's call. Joining us for today's presentation are the company's CEO, Bryan Ganz, and CFO, Lauri Kearnes. Following their remarks, we will open the call to questions. Earlier today, Byrna released results for its fiscal second quarter ended May 31, 2025. A copy of the press release is available on the company's website. Before turning the call over to Bryan Ganz, Byrna's Chief Executive Officer, I will 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'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 obligation to update forward-looking statements as a result of new information, future events, or otherwise. As this call will include references to non-GAAP results, please see the press release 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 would like to turn the call over to Byrna's CEO, Bryan Ganz. Sir, please proceed.

Thank you, Daryl, and thank you, everyone, for joining us today. This morning, we filed our 10-Q with the SEC and issued a press release providing our financial results and business highlights for the fiscal second quarter ended May 31, 2025. As usual, I will start by turning the call over to our CFO, Lauri Kearnes, who will review our financial results for the period. Following her remarks, I'll discuss the operational highlights that drove our 41% year-over-year revenue growth and continued GAAP and non-GAAP EBITDA profitability for the quarter. I will then offer insights into our strategy on a go-forward basis before we open the call to questions from our covering research analysts. Lauri?

Thank you, Bryan. Good morning, everyone. Let's review our financial results for the fiscal second quarter ended May 31, 2025. Net revenue for Q2 2025 was $28.5 million, a 41% increase from the $20.3 million reported in the fiscal second quarter of 2024. This $8.2 million increase was driven by the launch of the CL, increased dealer and chain store sales, and broader brand adoption. In Q2, direct-to-consumer revenues increased by $2.2 million through byrna.com and amazon.com compared to the prior year period. Additionally, sales to dealers increased by $3.9 million or 106%, largely driven by initial stocking orders for Sportsman's Warehouse. Gross profit for Q2 2025 was $17.6 million or 62% of net revenue compared to $12.6 million or 62% of net revenue for Q2 2024. The introduction of the Compact Launcher led to a favorable product sales mix that offset any decrease due to a change in channel mix from stronger dealer sales. Operating expenses for Q2 2025 were $14.2 million compared to $10.6 million for Q2 2024. The increase in operating expenses was driven by increased variable selling expenses, discretionary marketing spend, and higher payroll costs, as well as some expenses directly related to the launch of the Compact Launcher. Net income for Q2 2025 was $2.4 million compared to $2.1 million for Q2 2024. This increase was driven by the overall increase in product sales, which was partially offset by higher income tax expense for the quarter. As mentioned in our last call, due to the release of our valuation allowance in Q4 2024, the company will transition into full taxpayer status in 2025. And we expect our effective tax rate to be approximately 23% for the year. Adjusted EBITDA, a non-GAAP metric for Q2 2025, totaled $4.3 million compared to $2.8 million for Q2 2024. Cash, cash equivalents, and marketable securities at May 31, 2025, totaled $13 million compared to $25.7 million at November 30, 2024. The decrease reflects the planned increase in inventory ahead of the Compact Launcher release and normal seasonal working capital movements. Inventory at May 31, 2025, totaled $32.3 million compared to $20 million at November 30, 2024. The company has no current or long-term debt. I'll now turn it back to Bryan.

Thanks, Lauri. As our results demonstrate, the sales momentum from the launch of our Compact Launcher in May catapulted us to a new quarterly revenue record of $28.5 million. We achieved this significant 41% year-over-year growth despite the slowdown in consumer spending and the subdued sales in April that we saw while people waited for the launch of the Compact Launcher. It's important to note that we are able to achieve these record sales without yet selling the Compact Launcher on Amazon, which, as everyone knows, has been growing at a faster rate than byrna.com. As of May 27, however, the CL is now available on Amazon and is included in this week's Prime Day sales event. We believe that having the Compact Launcher on Amazon will significantly increase product visibility and will help support future sales growth. As a reminder, the fee on products sold through Amazon is 15%. That said, we are somewhat agnostic as to whether we sell through Amazon or byrna.com, as our net margins are not that much different as there are several areas of savings on Amazon, including no credit card fees, no Shopify fees, and lower outbound freight. Additionally, our advertising costs are significantly lower on Amazon. Lauri spoke about Sportsman's Warehouse. That was another important driver for last quarter. It was a solid start to our partnership with Sportsman's Warehouse. Q2 dealer sales, as Lauri mentioned, were up 106% or $3.9 million, with the bulk of that coming from Sportsman's initial stocking order, which drove $2.4 million of the $3.9 million increase in dealer sales. During the quarter, we launched 21 store-within-a-store locations, 14 of which have a Byrna supplied shooting pod. Another 34 stores have Byrna's point-of-sale display, which is a 4-sided fixture. Finally, 4 more Sportsman's stores use Sportsman's supplied end-caps to offer Byrna products. This brings the total number of Sportsman's locations that currently stock Byrna products to 59 stores. Even in the locations that only have a Byrna point-of-sale display or a Sportsman's supplied end-cap, sports sales associates can let people test fire the Byrna in their archery range. Many of the Sportsman's locations have successfully taken advantage of this opportunity to allow potential customers to test fire the Byrna launchers. As a result, some of the POS locations—those with just a point-of-sale display—are outperforming Sportsman's locations that have a Byrna shooting pod. We recently staffed 12 of the Sportsman's locations that have a store within a store with a Byrna representative, or what we call our Byrna geniuses. These are representatives that can walk customers through the less lethal experience. It is our intention to provide Byrna geniuses for every store with a shooting pod. We believe that this in-store support will further strengthen sales going forward. I have to say that both Byrna and Sportsman's are pleased with the initial results of the partnership as sales have grown every single week since we started the program. As a result, we are looking to add 9 more shooting pods in Sportsman's best locations over the next several months. At the same time, Byrna and Sportsman's are working on outfitting an additional 72 stores with Byrna's POS displays, which would bring the total number of Sportsman's stores that carry Byrna to approximately 140 locations by year-end. It is important that we bring on the remaining Sportsman's stores as quickly as possible as our celebrity endorsers, such as Tucker Carlson, are now telling their audiences that they can try and buy Byrna's range of nonlethal launchers at their nearest Sportsman's Warehouse location. Other outdoor and sporting goods chains are starting to take notice of the success that Sportsman's Warehouse is having with Byrna. While Byrna cannot offer these chains a shooting experience due to our exclusive arrangements with Sportsman's Warehouse, we are seeing increased interest in Byrna, which is translating into more stores carrying Byrna. Specifically, Big 5 Sporting Goods, a chain with over 400 locations, and SCHEELS, who are already carrying Byrna products, are growing the number of stores stocking Byrna. At the same time, they are expanding the range of products that each store will carry. We are also seeing interest from new chains that we've not worked with before, including Dunham's Sports, a chain with 260 locations that is testing the market. Perhaps most interesting to me is we are seeing interest from chains that serve new markets such as farming and ranching. This quarter, both Rural King, with 123 stores, and Family Farm & Home with 73 stores will be putting Byrna in a number of their stores as they test the market. Standing our brick-and-mortar footprint is critically important in the current market environment, as the retail market, generally, and the firearms industry, specifically, are facing economic headwinds due to falling consumer confidence driven in part by uncertainty over interest rates and the effect of tariffs. By growing the number of outdoor and sporting goods stores carrying Byrna and by expanding the range of products that they carry, and perhaps most importantly, by expanding the markets that we're able to go after such as the farm and ranch market, we can continue to grow our top and bottom line even in the wake of a softer retail environment. For our company-owned stores, these stores have performed exceptionally well and are ahead of where we anticipated them to be at this point in the year. Just 5 months after opening our stores in Scottsdale, Nashville, and Fort Wayne, they are already profitable, and we expect our Salem store to become profitable in the near future. When combined, all 5 of our retail stores averaged $69,000 in sales in May, which annualizes to approximately $800,000 per store, which is way above their breakeven point. We are incredibly encouraged by the success of these stores. Scottsdale, in particular, is already running at the same level as our long-standing Las Vegas store. While we don't have any immediate plans to expand our company-owned store model, we see long-term potential for these stores in select markets that are not really served by our retail partners. We also want to use what we learned at our company-owned stores to assist our premier dealers that are running a very similar type of store to our retail stores. We are in the process of rolling out a revised premier dealer program with more generous pricing, including price protection in exchange for higher annual commitments. On the international markets, we generated $2.6 million in international sales this quarter. This is an 86% increase from the prior year period. This included a one-time bump in royalties from our partners in Latin America. As you may remember, last year, we sold our ownership stake in Byrna LatAm, while retaining an option to buy back the entire company. Byrna LatAm is now simply a distributor and Byrna licensee. Under our agreement, we both sell product to Byrna LatAm, and we earn royalty income on products they produce under license from Byrna, which includes the Byrna SD, the Byrna Mission 4, and certain ammo. We are extremely encouraged by the success that Byrna LatAm is seeing in South America. As a result, we do expect to exercise our call option at some point in the future where Byrna LatAm is both consistently profitable and honestly capable of a U.S. public company audit. To support our growth, we've continued to expand our marketing efforts. Last month, we brought on Tucker Carlson to our roster of celebrity influencers. Tucker, like Sean Hannity and other successful influencers, has a large audience of primarily conservative listeners. So far, the early results of the partnership have been encouraging. We are also currently in ongoing discussions to bring on a few marquee celebrity endorsers that have enormous audiences that cover a much wider swath of the American public. We will keep you informed of our progress as these negotiations progress. In addition to expanding our influencer strategy, we have begun using AI to quickly scale content production and increase the frequency of our advertising across various platforms. This has helped us produce more tailored content, both faster and more efficiently as we react to the acceptability and effectiveness of our ads. I am not sure if you've seen our new banana commercial in which potential victims are carrying a banana rather than a Byrna. Not only does this allow us to get around the sensors that won't permit advertising that shows weapons, it is sufficiently intriguing to get people to come to our website to see what the Byrna really is. This piece of creative, which has proven extremely effective and is generating a very high ROAS, was produced entirely using AI programs, allowing us to produce a 30-second commercial in hours at essentially no cost that would have otherwise taken several months and would have cost several hundred thousand dollars to produce. Next month, we plan to introduce Byrna Care. Byrna Care will be a source of recurring revenue in which we will offer to replace the Byrna Launcher—no questions asked—if it is lost, stolen, damaged, or confiscated. This will be our first foray into the recurring revenue model, which we hope to augment next year when we install a chipset in the CL that will be able to contact the authorities in the event that the launcher is used in self-defense. We also saw an uptick this quarter during the ICE protest in June. As many television news stations were covering events, less lethal was at the forefront of the national conversation, and Byrna naturally appeared as a trusted leader in this space. These types of events further normalize the less lethal market and highlight Byrna's role in the personal safety market. The continued normalization of our product category generally and of Byrna specifically has allowed us to garner significant earned media. In fact, last night, I was on the NBC evening news to discuss tariffs, which drove thousands of incremental sessions. The night before, I was on Fox News also discussing tariffs.

Ladies and gentlemen, please stand by for technical difficulties. Please stand by. Okay. We are all set, Lauri, Bryan, you are good to go.

Okay. I apologize. It appears that we got disconnected. I believe we were disconnected when I was talking about production. As we move into the second half of the year, we are actively working to keep our production in line with demand. Ahead of the Compact Launcher debut, production was running at 24,000 units a month as we work to build up inventory. We now have a solid inventory position in place. We've reduced production to a steady state of 15,000 units per month across all of our various launchers, and we have the ability to adjust to changes in demand on a real-time basis. Following the Compact Launcher debut, we've seen what we expected, which is some cannibalization of the LE launcher, given the relatively small price difference between the LE at $479 and the Compact Launcher at $549. This has caused customers to gravitate to the Compact Launcher. Honestly, the Compact Launcher has better margins. So we're just as happy to see people gravitating away from the LE to the CL. The CL, in fact, is 38% smaller and 36% lighter than the Byrna SD, our entry point launcher, yet it is just as powerful in terms of energy density or joules per square inch as our most powerful launcher, the Byrna LE. It's also 27% narrower than our current pistols, which make it ideal for concealed carry. As I said, we don't really mind the cannibalization as the CL helps our margins with a 7 to 8 percentage point advantage over the other launchers. Additionally, we've shifted production away from traditional assembly lines to a more efficient assembly pod-based manufacturing system, which is reducing our labor requirements and improving our first pass yield. This initiative, along with our onshoring and reshoring initiatives, is improving, as I said, first pass yield, reducing manufacturing variances and improving quality. Looking ahead, while we expect consumer sentiment to remain subdued, which may impact what I referred to as same-store sales, I believe that we will continue to grow our top line between 25% and 40% as a result of more stores carrying an increasing array of Byrna products. As a result of the continued normalization of our product category and the impact of earned media. We also plan to roll out several variations of our new CL launcher, both up and down the pricing spectrum as we target a broader demographic. This is going to result in our cash position rebounding quickly as our inventory levels normalize over the coming months and quarters. While the third quarter is typically a slower period for Byrna, we continue to focus on executing against operational priorities, expanding market awareness, and setting the stage for a strong finish to the year. That concludes my prepared remarks. Daryl, I'll turn it back to you for questions.

Thank you. The company will now be taking questions from sell-side analysts. Our first question comes from Matt Koranda with ROTH Capital Partners.

I wanted to begin by discussing the trends from June that you mentioned, Bryan, in your remarks. You noted some strength related to the civil unrest we experienced in June. Could you provide an update on growth for June and so far this quarter? You also indicated that the sustained growth rate expected is between 25% and 40%. Is that the range we should anticipate in the near term?

Yes, Matt, thanks for the question. We did see strength during the week where the riots were occurring in Los Angeles, but that's not surprising. Whenever there is civil unrest, we see much stronger sales. I would say during that week, sales were probably up by 40% versus the prior week. That said, it's a very transitory trend. It happened that week during the riots and then sales returned exactly to where they were before the riots. You can use 25% to 40%. Last quarter, we were up 41%, slightly more, but I think 25% to 40% is a very good range for the year. So yes, I would work with that. Again, as I said, there is some softness that we're seeing in the market and that other CEOs that I speak to are seeing in the market. That said, we are growing dramatically in terms of our distribution channel, the number of celebrity endorsers, and the places where you can buy Byrna. So I think even in a softer market, 25% to 40% is a safe bet.

Okay. Fair enough. And then maybe just since you mentioned softness in the prepared remarks and here in the Q&A. Curious, where do you see that showing up, I guess? Is that like in between promotional periods where you're on promotion with some of the launchers? Is that the trade down into sort of maybe the SD from people that might have bought the CL? Just curious maybe if you could expand on the comments there.

Sure. We are a very, very data-driven company. We analyze in great detail the activity of all of the people that come on to our website, how much time they spend on a page, what pages they look at, and abandoned cart rates. What we're seeing are indications inside our numbers that, for example, we're seeing a slightly higher level of abandoned carts. There's a little bit of sticker shock when people are seeing pricing. So although we are seeing growth, and on the surface, it looks like there are no issues, you can see underlying in terms of some of the particular statistics of people's activity on the website that it's softer. Also, we're just seeing this in talking to our customers that the market is a little bit softer right now. I don't think that's a surprise to anybody. That said, we are also in the summer, and in our industry, there's kind of the dog days of summer. This is traditionally a slower quarter. Nevertheless, we do expect to see significant growth this quarter.

Okay, fair enough. I have one last question. Regarding the ramp-up with Sportsman's, you mentioned several numbers in your prepared remarks about the locations you plan to expand to. Could you clarify how many shop-in-shops we can expect by the end of the third quarter? Is it 22, which includes the 10 new ones in addition to the 12 that you already have? I’m also curious about the performance at the POS locations, which you noted may even exceed that of the shooting pods, which I assume are the shop-in-shops. Is there a significant difference between the POS locations and the shop-in-shops? I’m trying to understand how we should anticipate the ramp-up as you aim for a total of 140 locations.

Okay. So keep in mind that there is a difference between store within a store and shooting pods. Every shooting pod is part of a store within a store, but not every store within a store has a shooting pod. Currently, there are 14 shooting pods, but there are 22 store within a store locations. The ones that don't have a shooting pod have a whole Byrna store, but they use the archery range for the try-before-you-buy experience. We have an additional 9 shooting pods that have been constructed that are going to be shipped to Sportsman's and will be installed in their best locations. So they will go from 24 store within a store to 33 store within a store, of which there will be 14 plus the 9, there'll be 23 shooting pod locations. The other locations have just this point-of-sale display. So there is no shelving and store experience, but there's a point-of-sale display and there is an archery range. In some of these stores with the point-of-sale display and the archery range, we are seeing them actually outperform some of the other locations with a store that has a store within a store. Now obviously, we need to understand why. Is it a function of these just being better Sportsman's locations? Do they have more traffic? Is it a function of the personnel? Are they simply better salespeople, and they're getting people into the archery range? We are in the process of putting people on the road going to all of the Sportsman's locations to really spend time understanding the operational effectiveness of each of the stores, both those stores that are doing well and those stores that are not doing well. We are also providing spiffs to the store employees to give them some incentive to sell the Byrna product because, look, for Sportsman's, Bass Pro, and Big 5, they are in the business of filling demand. They are not in the business of creating demand. Byrna is in the business of creating demand. The interesting thing for Sportsman's Warehouse and the other locations is they have an opportunity to sell to customers that may have walked into the store not even knowing what Byrna is, not thinking about buying a Byrna; they have an opportunity to take their existing customer and augment the lifetime value of that customer. To do that, we need an educated sales force. We need a motivated sales force. That's the purpose of, one, providing Byrna geniuses; and two, spiffing the sales personnel. So we are in the very, very early innings of this program with Sportsman's Warehouse. I do not see any reason, honestly, why these locations that have hundreds of people a day coming into them cannot be as effective as our retail stores, which have tens of people a day coming into them. So we're doing $800,000 annually on average with our retail stores that are in a strip mall and have a dozen people walking in the front door; we certainly should be able to do $300,000, $400,000, $500,000 a day in the bigger Sportsman's stores. But it's not going to happen overnight. It is going to take some work as we educate the sales team as we build out the stores. But we do expect to have in probably 140 of the 146 stores in virtually all of the major Sportsman's stores, we do expect to have a Byrna presence, whether it's in the form of a POS display or whether it's a store within a store that uses an archery range or whether it's a store within a store that uses a shooting pod. We will be in essentially all of the Sportsman's stores by the end of the year.

Our next questions come from the line of Jeff Van Sinderen with B. Riley Securities.

A little bit of a tough question, but wondering how you're thinking about the evolution of channel mix in the second half with all the moving parts.

As I said, we are seeing—and in Q2, we saw our fastest growth in brick-and-mortar. We think brick-and-mortar will continue to be the faster-growing segment of Byrna. Within the DTC segment of the business, the online segment of the business we expect Amazon to continue to grow at a faster rate than Byrna. When we talk about DTC, one of the things we didn't really focus on is that Sportsman's also has a DTC operation. While Byrna has 1 million-plus visitors a month coming to our website, Sportsman's has 7.5 million people a month coming to their website. We are really expert in DTC operations. This is not Sportsman's primary focus; for them, DTC is generally people that order a firearm and then have to go to Sportsman's to pick it up. Our team is working very closely with the Sportsman's team to help them really improve their online presence, particularly for Byrna because they have access to 7.5 million people a month that probably show little overlap with the 1 million people a month that we have access to. So there's a huge untapped market for Byrna through the Sportsman's Warehouse e-commerce effort. Again, I think we're going to see faster growth in brick-and-mortar than we see online. With the online segment, we'll see faster growth with Amazon than with Byrna. I do think sort of the wildcard will be Sportsman's—is this going to be a few sales a day? Or is this going to be 100 sales a day? The jury is out right now, but I think there's enormous potential there.

Okay. And then in Sportsman's, just a point of clarification. The stores with the pods—I know there's moving parts too with more pods coming in. But the stores with the pods versus the archery ranges? Just—I wasn't clear on the performance there. Were you saying that the archery range performance was sometimes greater than the store with the pod performance?

We don't have enough data yet, Jeff, to say that conclusively. It would make no sense to me that the archery range would perform better than the pod because the pod is graphically and cosmetically, it looks great. It's got glass windows on the side. It's placed in the center of the store. When you're there, you hear the Bang-Bang-Bang when it hits the targets, so it draws people into the pod in a way that the archery range does not. That said, most things with business come down to human beings. I think when we get the Byrna geniuses into these stores, the store should perform more efficiently, more effectively, and we'll have a much better sense. But my guess is, all things being equal, the stores with the shooting pods will perform the best. But it's too early yet to say that conclusively.

Okay. Makes sense. And then I just— I wonder if you could touch just finally on your mention of the new iterations of the CL, anything you can elaborate on there?

Okay. So we came out with a particular model of CL with fiber optic sights in a ready kit. We are looking to move both up and down the pricing spectrum. So the CL comes ready to be equipped with red dot sights, laser sights, and Hogue grips. We expect to bring out a more bespoke version of the CL. At the same time, we expect to bring out a lower-priced version of the CL that doesn't come with fiber optic sights. It comes in a more basic box and doesn't come with additional CO2 and ammo and magazines so that we can catch a broader spectrum of our customer base. We recognize that $550 is expensive. We can see it at checkout where there is a higher abandoned cart rate; the more expensive the sale is, somebody goes to checkout in a $700 sale. There can be sticker shock. So we want to be able to price the CL across a broader range of prices. We've done this with our other launchers. We came out with a basic box for the SD that performed very well. We're just applying that same strategy to the CL, and that will probably happen later this quarter.

Our next question comes from Jon Hickman with Ladenburg Thalmann.

Bryan, could you elaborate a little bit on your comments about recurring revenue with the CL? Is this like an insurance program—that's my first question.

Yes, sure. I'm going to let Lauri take that because honestly, so much of this first thing is back office, and I'll let her talk about this. And then I'll talk about the more SaaS aspect of the recurring revenue model.

Okay. Jon, yes. The Byrna Care that we're going to come out with is kind of like an insurance policy; it's really just think of it as an insurance policy and extended warranties. So people will pay a monthly fee, they can pay an annual amount or monthly. We're working on the back end to get this kind of set up for the recurring, right? So subscription fee that gets auto-charged to their card. Yes, if they lose it, if it's stolen, if it breaks for any reason and previously like our current warranty only covers if you use Byrna Ammo, Byrna CO2. We won't restrict it for that. It will be a way that they can pay a monthly fee, and it is an expensive product so that they can have coverage for that. Similar to any other products when you go and check out and they say, do you want the protection plan? That's really what it is. So it will be recurring, and we're just working on setting up that auto-charge capability.

Interestingly, one of the—I get people to get through to the CEO of Byrna, and unfortunately, one of the reasons people get through to me is they've got some sob story where things fell off the boat into the water. I lost it. I can't afford to get a new one—there's a lot of people for whom they end up either damaging or losing their Byrna. We've actually had a bunch that were stolen. So this is a way to address that problem and also to start the recurring revenue model. The much bigger source of recurring revenue, though, will be next year when we start installing a chipset in the Byrna. This is something that we've been working on and had planned from the very beginning of the development of the CL. What we want to be able to do—and this is not cutting-edge technology. The technology exists—but have your Byrna be able to speak with your phone. So that if you're out and about and it's set to self-defense mode, for example, I'm out in Boston with my Byrna and walking with my wife and I get a call that I used my Byrna. It will immediately speak to my phone, geo-locate with my phone, contact a call center that will contact preprogrammed numbers, either 911 or potentially if you're a student, maybe campus security, or you're a family member. This is something that maybe is $599 a month. There have been other things we're looking at, like the ability to talk to your smart home. So Jon, you're at home and your wife says, I hear something downstairs, you pull the Byrna out, you take the safety off. It talks to your smart home and turns on all the lights—$399 a month. These are not new ideas. These are ideas that are used, and frankly, I think there are other companies that are currently doing similar things. We think given the fact that there are already over 650,000 Byrna's in the market, this is something where we're going to have tens of thousands of customers who are going to want to be able to take it to the next step and have their Byrna be a smart launcher that is able to speak with their smart home or their phone.

Okay. Lauri, could you also elaborate? It sounds like from Bryan's remarks that there are some cost savings that are nonrecurring costs due to the launch of the CL and inventory and the ramp-up in the manufacturing that now cited. Can you help us out with our kind of model for the coming quarter as far as the expenses go?

Sure, Jon. We had a few hundred thousand dollars of extra expenses in the quarter, just specifically because of the Compact Launcher release. That being said, it will really be replaced in Q3 with increased marketing spend as we move through the year. We increased our marketing spend, so I don't know that you'll see much change in OpEx. On the inventory side of being, we did use a lot of cash to build our inventory, as you saw; it's kind of a record high inventory at the end of the quarter. We've reduced our production, and we expect through the balance of this year to start to pull that inventory levels down and increase our cash position.

Okay. Got that. Now I see—could you elaborate on why you think the Scottsdale store is doing so well kind of vis-a-vis expectations and your other stores or other experiences?

First, it's a great location. It's a very, very heavily trafficked street. I think the traffic on that street is probably 2x the traffic on the streets in front of our other stores. Secondly, it's just a good market. Scottsdale has got a lot of people with our demographic, gun owners, a more conservative population. It is a wealthy community, and there's always—a part of it is the human element. We have a couple of very good salespeople in Scottsdale, and it's telling us that we've got to continue to find good salespeople in all of our various stores. But it is encouraging for us to see there wasn't something unique about Las Vegas. Our biggest concern with Las Vegas doing well is it just being people that won 10 grand at the craps table last night that went in and bought a launcher—and the answer is no. All of the stores have done well. I'll tell you, the little engine that could, though, is Fort Wayne. Fort Wayne is a relatively small community. It is not a particularly wealthy community. It is doing extremely well. It's even outperforming the Salem store despite the fact that its footprint is probably half of what the Salem store is—so yes, there are a lot of factors with each store. But overall, the performance is extremely encouraging. It's encouraging not just for our retail stores; it's encouraging for what we can do with premier dealers. It's encouraging for what we should be able to do at Sportsman's Warehouse. It's telling us that this model works.

Thank you. At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Ganz for his closing remarks.

Daryl, thank you very much. I just want to thank all of our investors and customers for their support, and we will keep you apprised of our progress. Thank you very much.

Thank you for joining us today for Byrna's Fiscal Second Quarter 2025 Conference Call. You may now disconnect.