BYRN - NASDAQ

Good morning, and welcome to Byrna’s Fiscal First Quarter 2025 Earnings Conference Call. My name is Melissa 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'll open the call to questions. Following their remarks, we will open the call to questions. Earlier today, Byrna released results for its fiscal first quarter ended February 28, 2025. A copy of the press release is available on the company's website. Before turning the call over to Bryan Ganz, Byrna Technologies Chief Executive Officer, I'll read the safe harbor statement. Some discussions held today include forward-looking statements. Actual results could differ materially from statements made today. Please refer to Byrna's most recent 10-K and 10-Q filings for 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, 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. Please go ahead, sir.

Thank you, Melissa, 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 first quarter ended February 28, 2025. I'll start today 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 57% year-over-year revenue growth and continued GAAP and non-GAAP EBITDA profitability for the quarter. I'll then offer insights into our strategy moving forward before we open the call to questions from our covering research analyst. Lauri?

Thank you, Bryan, and good morning, everyone. Let's review our financial results for the first fiscal quarter ended February 28, 2025. Net revenue for the Q1 2025 was $26.2 million, a 57% increase from the $16.7 million reported in the first fiscal quarter of 2024. This $9.5 million increase is primarily due to continuing sales momentum, channel expansion, and broader brand adoption. In Q1, direct-to-consumer revenues increased by $6.7 million through Byrna.com and Amazon.com, compared to the prior year period. While both channels have grown, we are starting to see our Amazon.com sales grow at a faster rate than our Byrna.com sales. Additionally, sales to dealers increased $1.9 million or 78% with the largest increase coming in the category of chain stores, which increased $700,000, this was primarily driven by sales to Bass Pro shops. Gross profit for Q1 2025 was $15.9 million, or 61% of net revenue, compared to $9.6 million, or 58% of net revenue for Q1 2024. We continue to see the gross margin improvement due to our efforts in the middle of 2024 focused on designing for manufacturability, as well as increased production volumes. Operating expenses for Q1 2025 were $14.2 million, compared to $9.8 million for Q1 2024. The increase in operating expenses was driven by increased variable selling expenses, discretionary marketing spend, and higher payroll costs. Higher payroll costs included an increase in employee benefits and the company 401(k) match of $300,000. This was due to a combination of increased employees, increased health care costs, and the company implementing a 401(k) safe harbor matching program. Net income for Q1 2025 was $1.7 million, compared to $17,000 for Q1 2024. This increase was driven by an overall increase in product sales. 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 Q1 2025 totaled $2.8 million compared to $1.2 million for Q1 2024. Cash, cash equivalents, and marketable securities at February 28, 2025 totaled $19.3 million compared to $25.7 million at November 30, 2024. The decrease reflects planned increases in inventory ahead of the Compact Launcher release and normal seasonal working capital movements. Inventory at February 28, 2025 totaled $23.2 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 fiscal 2024 continued into the first quarter of fiscal 2025 as we successfully grew revenue by 50% year-over-year to $26.2 million despite the first quarter being our traditionally slowest quarter. Well, it was not a sequential beat, sales for the first quarter were only 6% below our all-time record of $28 million in the fourth quarter of 2024. In 2023 and 2022, by comparison, Q1 sales were 47% and 29% below Q4 sales, respectively. As expected, sales softened post-holiday due to consumer fatigue, a general Trump slump for firearms post-election, and waning consumer confidence. That said, February daily DTC sales were better than January daily DTC sales, and March daily DTC sales were better than February daily DTC sales. This was despite the general market softness and the fact that some of our customers appear to be waiting for the release of our much anticipated Compact Launcher. On a related note, when speaking to investors recently at the ROTH Conference, several investors told me that they were using any one of a number of different apps to track Byrna credit card sales. I would just urge people using these apps to also be tracking our sales on Amazon as an increasing portion of our DTC sales are taking place on Amazon where we are not paid by credit card. In Q1 of 2024, Amazon sales represented 19.3% of Byrna's total U.S. DTC sales. By Q1 2025, Amazon sales represented 26.9% of Byrna's total U.S. DTC sales. And last month, Amazon sales climbed to 32.6% of Byrna's total DTC sales. There are a number of reasons for Amazon's strong relative performance. However, the most important reason is that, we are now treating Amazon as its own business center with a dedicated Amazon sales manager focusing exclusively on our Amazon business. With more than 50% of all online sales in the U.S. taking place on Amazon, we expect to see our Amazon sales continue to grow as a percentage of our total sales as Byrna's brand awareness and the normalization of the non-lethal product category continues to grow. Moreover, we are about to introduce Buy with Prime on our website. This will allow Amazon members to buy our products using their Amazon Prime account when checking out on the Byrna website. This enables us to take advantage of Amazon's lower shipping rates and avoid credit card fees without paying Amazon's hefty selling fee. Initially, Buy with Prime will be limited to select ammo and accessory SKUs. However, if successful, we will roll it out much more broadly. We are able to recoup the very low 3% fee through the lower freight costs and the elimination of credit card fees. While the normal fee on products sold through Amazon is 15%. I am somewhat agnostic as to whether we sell through Amazon or Byrna.com, as our net margins are not really very different between the two channels. Since we sell a slightly different bundle on Amazon, gross profit margins on Amazon are 2.6% higher than our Byrna.com's gross profit margins. We also eliminate the credit card fees, Shopify fees, and we save substantially on outbound freight when we sell on Amazon. In addition, our advertising costs were much lower. Last year, our ROAS on ads driving customers to Byrna.com was 4.5 times, while our ROAS or return on advertising spend on Amazon advertising was 18.5 times, resulting in overall DTC ROAS of 5.4 times for the company. As a result, on a net basis our margins are not substantially lower on Amazon. On the last earnings call, I announced that we had just signed a letter of intent with Sportsman's Warehouse to roll out a Byrna store-within-a-store pilot program at 10 Sportsman's Warehouse locations across the United States. I am very pleased to announce that Sportsman's has agreed to expand this pilot program to 13 store within a store locations and more importantly to add an additional 41 stores where they will carry Byrna's point of sale display and will convert existing archery ranges into Byrna shooting lanes where potential customers can try shooting the Byrna, bringing the total number of Sportsman's locations where customers can experience the Byrna to 54. A few weeks ago, we celebrated the successful launch of the first Byrna store-within-a-store at Sportsman's Warehouse flagship store in Saratoga Springs, Utah, near its corporate headquarters. The remaining 12 store-within-a-store locations in our pilot program are scheduled to open by May 1st, at which time Sportsmen CEO, Paul Stone and I plan to officially announce the kick-off of this revolutionary business partnership where Sportsmen's combined experiential selling with the fastest-growing segment in the personal self-defense space Byrna non-lethal launches. Each of these 13 installations will feature a dedicated area where customers can try shooting the launches for themselves. As we say at Byrna, shooting is believing. As most of you know, based on the experience of our own retail stores and our premier dealers, when a potential customer has an opportunity to shoot the Byrna, conversion rates go up dramatically. Across our company-owned retail stores, conversion rates last month as measured by the number of sales divided by the number of individuals walking into a store range from 50% to 68% measured by sales as a percentage of groups walking into the stores, the conversion rates are even higher. This compares to a conversion rate of slightly over 1% for people visiting our website. To support this initiative, we are jointly funding the build-out with Byrna covering half of the approximately $15,000 cost per installation and to ensure a strong launch, we're placing a Byrna trained representative at each store with this store location during the rollout period. Similar to Apple's genius bar concept, these experts will ensure both Sportsman staff and customers receive comprehensive product information and support. Moreover, as we have seen with the initial store, if we do not have a dedicated employee to Byrna store is often unmanned. The revenue potential is significant with this partnership. To put this in perspective, just one launcher sale per day per store could generate approximately $200,000 in annual revenue at each participating Sportsman's Warehouse location. If they can achieve five launcher sales per day per store, revenue could exceed $1 million per store, similar to our Las Vegas location. Sportsman's operates 146 stores nationwide, if their initial performance metrics are anywhere near what we are seeing with our own company-owned stores, Sportsman's plans to continue expanding these store and the store installations throughout their network. In parallel, Q1 saw the successful launch of three new Byrna retail stores. These stores were opened in Scottsdale, Arizona, Franklin, Tennessee, just outside Nashville and Salem, New Hampshire. I'm proud to report that the final retail store, which is co-located with our brand-new ammo factory in Fort Wayne, Indiana, has its grand opening scheduled for later today. These company-owned retail locations complement both our Sportsman's partnership and our premier dealer program by allowing us to use our retail stores as a test bed to determine not only the look and feel of a store offering to Byrna experience, but also to develop the best strategies for bringing folks in the door and closing the sale. While our focus remains on capital-efficient expansion through partnerships like the one with Sportsman's, we see significant long-term potential in Byrna branded stores, both for regions that are not well served by retail partners and to act as flagship locations where we can gather demographic data, test new products, run training programs, host celebrity appearances and engage in community outreach. Early results for these new stores have been encouraging. For their first full month of operations, average daily sales at the new locations range from slightly more than $1,000 a day to more than $1,700 a day. This is well above what we saw in Las Vegas in the first few months of operation in 2023. The 800-pound gorilla in the room, I think, for everyone is how the recently imposed tariffs will affect Byrna. I am happy to report that Byrna was well ahead of the curve. And as a result, we are better situated than 95% plus of all American companies when it comes to tariffs. Specifically, four years ago, when Byrna was plagued with supply chain interruptions, I announced Byrna's all truck strategy. This required our supply chain to have at least two sources for every launcher component with at least one of those sources being in the United States. Two years ago, in the wake of Russia's invasion of Ukraine, I started to worry about the risks to our China supply chain if tensions were to flare up over Taiwan. At that time, I instructed our supply chain to get Byrna completely out of China by 2025, so that we had no reliance on Chinese suppliers when it came to components for our flagship Byrna pistols. As a result of these initiatives, we are no longer producing any of our critical components in China, and we have domestic suppliers for virtually every single component. Last year, when it looked like Donald Trump had a chance of winning the 2024 election, we took this a step further. It was widely telegraphed to the market that the Trump administration would institute significant tariffs if elected. At the time, only 11% of the components that go into a Byrna launcher were U.S. sourced. The balance came from vendors scattered across the globe, including Malaysia, Thailand, Taiwan, Indonesia, South Africa, Germany and Italy, among others. So last year, I instructed our supply chain team to move virtually all of our supply chain to the U.S. By the time President Trump was elected, our U.S. content had gone up to 32% to 34%. As of last week, when the first tariffs were implemented, our U.S. content was 87% to 92%. Now in fairness, moving our supply chain to the U.S. has not been without cost. There was a reason we relied on foreign sources for most of our components in the first place. Moving the manufacture of our components from foreign suppliers to U.S. suppliers, added approximately 14% to the cost of the launcher. Tariffs on the remaining small amount of foreign sourced components add another 2% of the cost of launcher, meaning that we are looking at total cost increases around 16% from the middle of 2023. Had we done nothing, however, our bill of materials would be up 29% and significantly more if we were still manufacturing in China. At a 65% gross profit margin, this 16% cost increase, if it holds, would translate into a loss of approximately 5 margin points. The good news is that, we were not sitting on our hands with regard to front-running the tariffs. Once President Trump was elected, we ramped up component purchases and production well beyond our current requirements in anticipation of the widely telegraphed tariffs. Today, we have enough SD launchers and components in inventory to last us approximately 10 months and enough LE launchers and components in inventory to last us more than one year. As a result, we do not expect to see any material margin hit from the tariffs for at least one year if the tariffs are even still in place by that. In addition, the new Compact Launcher, which is due to be released shortly, has an MSRP $170 more than the Byrna SD and $70 more than the Byrna LE. Its costs, however, is somewhere between our two existing launchers. As a result, the margin on the Byrna CL should be 7 to 8 percentage points higher than the margin on our current launchers. On top of this, by moving our supply chain to domestic suppliers closer to the factory, there are enormous soft cost benefits that we should realize. Every month, our reported gross profit margin is 200 basis points to 300 basis points lower than our product gross profit margin, meaning, that we are incurring 2% to 3% in unfavorable manufacturing variances. Most of these variances result from out-of-spec components that either must be quarantined and returned or reworked if there's insufficient time to ship them all the way back to Asia to be reworked. There is a very real cost to this. What is worse, because we cannot inspect 100% of the more than 100,000 parts that pass the quality control inspection point every single day. Out-of-spec parts can and sometimes do slip through our quality control processes, making their way to the production line. When this occurs, we end up with failures that are only caught at the end of the production line when product is tested. This drives down our first pass yield and pushes up our labor variance as these launchers that need to be torn down and rebuilt. By working with higher quality domestic Tier 1 suppliers operating closer to home we can exert greater control over their quality procedures, performing more frequent factory audits and working with them to ensure that parts are tested before they ever arrive at Byrna. Well, this seems like a small thing. These soft costs [rob us] (ph) of 2 to 3 margin points every month, which we expect to save with the transition to U.S. sourced components. Additionally, by onshoring supply, we can reduce our inventory in transit, which adds millions of dollars to our inventory costs. By working with U.S. suppliers, we should see a dramatic reduction in inventory in transit and a corresponding increase in cash resulting in additional interest income. Ammo production. In a significant milestone for our Made-in-America strategy, last month we initiated production of our payload rounds at our new ammunition manufacturing facility in Fort Wayne, Indiana. Strategically located just miles from our launcher production center, this facility has an annual capacity of 8 million rounds. We did this in the nick of time. Up until now, all our payload ammo was produced in South Africa. Starting last week, a 10% across-the-board tariff went into effect, and the proposed reciprocal tariff on South Africa is an additional 30%. Fortunately, over the last several months, we created up and shipped out all three ammo manufacturing machines that we're running in South Africa to our new facility in Fort Wayne. One of these machines is already operational, along with a new highly automated machine we had built for us in Germany. The other two machines are scheduled to come online this quarter. We also placed orders for four more specialized dosing and welding machines in preparation for the projected surge in ammunition demand following our CL launcher release. The CL's proprietary 61 caliber round will be exclusively available from Byrna for the foreseeable future, creating a valuable ecosystem around our flagship product, which brings me to launcher production. I have some very exciting news. On March 19, we went into serial production of the highly anticipated and much coveted Compact Launcher. This is the most revolutionary non-lethal launcher ever made. Modeled after a micro-compact handgun similar in size to a SIG P365 or Glock 43x. The launcher is 38% smaller and 36% lighter than the Byrna SD, which is currently the smallest launch in the market, yet it is just as powerful as measured in force per square inch as our most powerful launcher the Byrna LE. It is also 27% narrower than our current pistol launchers making it ideal for concealed carry. And there's one more thing. The smaller size makes it much easier for women or anyone with smaller hands to operate. From the back of the grip to the middle of the trigger, the new CL is only 2.5 inches compared with 3.25 inches for the SD and LE launchers. As a result, we believe that this new smaller and more powerful launcher will open up to critical women's market for Byrna. I have to tell you, getting this much stopping power into such a small piece of real estate is an engineering marvel. As of last night, we had 10,924 Compact Launches in stock. We're already in production today. So I'm sure we're well over 11,000 launchers. We are producing at the rate of 1,000 launchers a day, six days a week. Our goal is to have more than 25,000 Compact Launchers in stock when we officially release it for sale. We'll be getting on the phone with all of our dealers right after this call to start taking initial orders. Sample launchers will be going out to our key partners and celebrity endorsers one week from today. At the same time, we'll be sending sample launchers and ammunition to our Byrna stores, premier dealers and the Sportsman's locations with Byrna Shooting ranges. This will allow people to try the launcher and place a preorder prior to the actual release date. The Byrna website will be updated for the CL launcher that same day. Our plan is to start shipping to dealers on April 21 through 24. We will start taking DTC orders on April 24. However, nothing will be released to the public from either Byrna or its dealers until the official release date of May 1. While we do not know what the split will be between our various product offerings once the CL is released, we have ample Byrna SD and LE launchers in stock, and our plan is to produce only CL launchers for the foreseeable future until we can fulfill all the initial orders and build up adequate inventory. Once we know what the split is between the three models, our Fort Wayne factory has the flexibility to shift between CL, SD and LE models based on real-time demand. We are extremely excited about the launch of the CL. We've been planning this for a number of years. The single biggest complaint that we've gotten has always been the size of our launcher and we think customer will be amazed with the new CL launcher. Okay, tax rates. As Lauri mentioned, with the rollout of the CL launcher and the new Sportsman's Warehouse partnership, we anticipate continued success throughout the year. Accordingly, we project our effective tax rate will increase to approximately 23% this year as we transition into full taxpayer status. However, we strategically positioned the company to offset this impact through continued gross margin expansion, disciplined operating expense management and an increasingly favorable product mix now driven by our compact launcher rollout. In conclusion, we are well positioned to build on our performance in the first quarter. Our balance sheet remains strong. And with the upcoming release of the CL launcher, we expect cash to ramp very quickly. With momentum across our channels, scalable partnerships in place and a highly anticipated new product with a release date only weeks away, we remain confident in our ability to continue executing through 2025 and beyond. So that concludes my prepared remarks. Melissa, I'll turn it back to you.

Thank you. The company will now be taking questions from sell-side analysts. [Operator Instructions] Our first question comes from the line of Jeff Van Sinderen with B. Riley Securities. Please proceed with your question.

Hi. Good morning, everyone and thank you for going through so much in your prepared comments. Just to clarify, I wanted to circle back on the Q2 early sales trend data. I think you mentioned that March grew sequentially from February. Wondering if there's anything new in the first week of April? And then I guess as you look at the ROAS data, can you give us any more color on how you're planning to manage and adapt that spend in the near term, particularly around the new CL launcher?

Jeff, thank you very much for the question. Our ROAS is always lower in the beginning of the year. We hit our 5 times ROAS because Q4 has such a strong ROAS. So, our overall ROAS for the first quarter is in the mid-3s. This is not unusual. We would expect it to be there, given that this is always our weakest quarter. That said, we do not think that we need very much advertising to promote the CL. We have over 700,000 opt in e-mail subscribers at Byrna. So we are initially going to be focused on selling the CL to our existing customer base as part of a very important refresh cycle. So, advertising spend should be going down, frankly, I've instructed to really not initiate anything new until at least August as we think most of the demand is going to be driven from our existing customer base through our e-mail and website. By that point, when we want to start going after new customers for the CL, we'll be ramping our advertising spend back up. But that will be sort of as we get into the very, very profitable Q4 time period.

Okay. Great. And then, I think you mentioned the inventory build around some of that -- it seems like a fair number of moving parts there, but maybe you could just touch on how the rollout will go. I know you mentioned various components there, whether it's through Sportsman's or your website. But can you just run us through kind of the sequence of events in rollout of the new CL?

Okay. So it was important to us to have 25,000 to 30,000 units on the shelf before we release the CL, because there's very, very high anticipated demand, and we didn't want to have the inventory depleted with the very first orders. So, as I mentioned, our dealer team is already set up calls. They will be getting on the phone with all of our dealers, some of the big stores will be individually like Bass Pro. Others will be in groups, we'll be talking to all the premier dealers as a group. And we will start taking their orders today. We have allocated 10,000 of the 30,000 launchers to our dealers. Those launches will start going out the door at the Byrna factory on April 21. By the 24th, we should have shipped all dealer orders so that they have time to get them and stock them before the May 1 release date. On April 15, we will be sending out overnight a box of two launchers, an orange one and a black one to all of our celebrity endorsers like Sean Hannity, Glenn Beck, et cetera and to a number of our YouTube influencers, as well as to every store that offers a shooting experience so people can go and try out the Byrna and put orders in before the actual release date. So there should be 50-something stores where people can try the Byrna if they would like. We will start actually taking orders online. We'll accept preorders starting April 17. We'll be accepting orders online starting April 24, and then May 1, we will start shipping the Byrna. This would give us time to ship all 30,000 Byrna during the month of May, if necessary.

Okay. And then if I could just squeeze in one more. And I know this is a little bit of a difficult question at this moment. But all else being equal, based on everything that you're seeing today -- by the way, you guys have done an amazing job avoiding tariffs. Would you think that Q1 was probably the low pointed revenues for the year? Do you still think that traditionally holds true this year?

You're right. It's a very difficult question. If you're asking me, my personal opinion is, yes, that was the low point of the year. I think like you, everybody wants to see how this CL launcher does. Every indication that we have is that this is going to be an enormous home run. It is the reason that we didn't release it when there were currently 11,000 launches in stock. It's the reason we're holding off because we don't want to have a bad customer experience, where we ship the first batch out and then there's no launches for anybody else. So we anticipate that that this will be a sequential growth year where every quarter will be bigger than the next.

Excellent. Thank you for taking my questions.

Thank you, Jeff.

Thank you. Our next question comes from the line of Matt Koranda with ROTH Capital Partners. Please proceed with your question.

Hi. It's Joseph on for Matt today. Just going back into your Sportsman shop-in-shops, could you remind us how many of that is currently up and running? And what are the learnings that you guys have for these types of stores versus your own branded stores additionally for the potential of the 30 store expansion by August, what do you need to see from these first stores to expand to those additional 30?

Hi, Joseph, it's Lauri. Thanks for the question. So currently, there is one store operational, the rest are going to be operational, those first 13 by the 1st of May. So they'll start rolling on over the next few weeks to have those operational. Additionally, we said there was the 41 additional stores that will just have our point-of-sale display, but we'll have a shooting experience as well. So I think what we need to see is we just need to see that there is momentum. We need to see that there's interest. They opened the first store and had sales the first day of that first store opening. So I think we're off to a good start there. We expect these to continue to roll out. They've got the foot traffic that our stores -- we struggle to get the foot traffic in to begin with as we open our stores, and they've already got that foot traffic. So it's really getting the interest. And we believe having someone in the store who is that Byrna genius, who understands they can get people interested, they can have the conversations, encourage them into the shooting experience lane, and that will help drive the sales.

Yes, Joseph, just to reiterate, Lauri brought up a very, very good point here. The biggest issue that we have in growing our own stores is foot traffic. Our conversion rate remains very, very consistent. Our AOV, average order value remains very, very consistent. We know if we can get people into the store, we can convert them at the rate of around 80% based on groups, but even on individuals between 50% and 70%. Sportsman's has hundreds of people visiting each of its stores every day. When they hear the bang, bang, bang of these rounds being fired and draws their attention to it, if we can get people into that range, we know we will convert them that I'm certain of. So we're extremely excited about this as are the folks from Sportsman's. And I think this is the reason that we've -- that we want to put a Byrna genius in every store, because we think that there's going to be a lot of interest from the Sportsman's customers.

Got it. Thank you. And then just for an additional question, just talking about your point-of-sale displays. How is that going to differ in terms of the shooting lines? Is it -- will it be the same layout for what you have in your shop-in-shops? Or will there be any significant differences there?

Well, for the 13 stores, the idea is to create a stand-alone Byrna shooting experience in the middle of the store, and we have developed a number of shooting pods which we can assemble right in the middle of the store. These pods have glass along the side, so people can see the shooter, they can hear what's going on, there is counter and flat walls and the whole -- a true store within a store. With the point-of-sale displays, this is going to be a kiosk that has approximately $8,000 of Byrna product on us. There's not going to be anybody devoted to selling Byrna. And if somebody is interested and they ask, they'll be shown the archery range, and they'll be able to try the Byrna. So it will provide an opportunity for a shooting experience. But it will not be drawing people into the shooting experience in the same way that a store within a store would. My guess is that these 41, they're going to have the point-of-sale display, if we continue to roll out, they will probably be the next 41 to be converted into stores within a store.

All right. Thank you, Bryan. We will go ahead and take the rest offline. And congrats on another good quarter.

Thank you.

Thank you. Our next question comes from the line of Jon Hickman with Ladenburg Thalman. Please proceed with your question.

Hi, Bryan. Most of my questions were just answered. I had questions about the difference between the stores in the store and then just the kiosk. But I would -- maybe I missed this earlier, but what's the MSRP going to be on this new CL versus the current products?

Sure. John, it's Lauri. So the new CL, the base price will be $549.99, the LE is currently at $479.99 and the LE as at $379.

Okay. And then the ammo is the same -- is there the same margin on the ammo, is it any different?

The ammo is slightly smaller, 61 caliber is 27% smaller, but it really doesn't cost dramatically different. Maybe there's a few pennies difference in the cost of the raw materials, but insignificant. We are selling the same quantities at the same prices, whether it's 61 caliber or 68 caliber. But the interesting thing is, with 68 caliber, we know that a lot of people buy cheap Chinese ammo to -- because it's much less expensive than high-quality Byrna ammo for the 68 caliber. For 61, at least for the foreseeable future, there is nobody else that makes a 61 caliber round. We will capture 100% of the ammo probably for the rest of this year and maybe well into next year.

And the new launcher comes in orange and black or...

It comes in orange and black currently. Pink will be released later this year, and we intend to bring out other colors. The other thing with this launcher is it can be serecoted unlike our earlier launches, which means we can make virtually any color. We can do camaflage launchers. There's a huge amount of things that we can do. In fact, there's a full array of very, very exciting accessories that we are not bringing out with the initial launch of the CL, but we'll be rolling out so that we can go back to people that have made initial purchases with an opportunity for them to add red dots and special holsters and special grips for the launcher. So it is a launcher that can be much more easily customizable than our current launchers.

Okay. And then one last question. The CO2 cartridge, does that still the same.

Same 8 grams. So that CO2 that we use for the FD will also work for the CL.

Okay. Thank you. And nice quarter. Appreciate all the commentary.

Thank you, Jon.

Thanks, Jon.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Ganz for any final comments.

Thank you, Melissa, and thank you, everyone. We really appreciate your continued interest in the company and your continued support. I look forward to catching up with many of you after this call.