Greetings, welcome to the Byrna Technologies fiscal Third Quarter 2021 Earnings Conference Call and Webcast. As a reminder, this conference call is being recorded, and all participants are in a 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, ir.byrna.com.
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. Thank you for joining us for Byrna's 2021 Third Quarter Earnings Call. Just as a clarification, at the end of the call, we will be taking questions from analysts and investors as time permits. During this quarter, we have continued to execute on our strategy to grow Byrna through increased visibility and brand awareness, new product introductions, and the opening of new markets and new sales channels. Our performance in the third quarter was marked by success, I think, in all of these areas. Perhaps most importantly, we completed a successful public offering, as all of you know, raising $56.8 million after fees. Now with $60 million in the bank and no debt, we really have the resources to fully implement our growth strategy.
Compared with Q3 2020, we have more than doubled our net revenues to $8.7 million, with a strong contribution from our international dealer network. Although admittedly, we were down from the prior quarter, which benefited from a $5 million surge in sales attributed to Sean Hannity mentioning the Byrna HD on his nightly show. Gross profit more than doubled to $4.9 million, and our gross margin improved to 56%. This margin was higher than we had projected at our last earnings call, as the introduction of a number of our new, higher margin products offset pressure from growth in our lower margin international sales. We introduced a slate of new game-changing products this quarter that are helping us transform our business, scale our brands, improve our margins, and open new markets.
We took an important step this quarter to expand from essentially a one-product, one-sales channel company to a multi-product, multi-channel company, with the launch of Byrna's Amazon e-commerce platform, the introduction of the Byrna SD personal security device, and the Mission 4 long-barrel launcher. At the same time, we expanded our retail footprint with the addition of 82 Bi-Mart locations throughout the Pacific Northwest. We acquired the assets of Ballistipax and introduced the Byrna Shield product line. We conducted our first Learn Safe school training program, for a public school district in Texas. We strengthened our management team with the addition of Mike Gillespie as Chief Operating Officer. Many of you may have had a chance to see Mike on our Analyst Day a few weeks ago, and Michael Wager as Chief Strategy Officer, who's going to be tasked with finding strategic opportunities for us.
Although I personally have the privilege each quarter of addressing our investors and discussing our operations and successes, none of it would be possible without the continued hard work and dedication of everyone at Byrna. As I noted during our Analyst Day presentation, the Byrna teammates are a unique breed. They prioritize our mission of saving lives, they sacrifice to achieve our objectives, and they live our ideals. These are truly special people, I cannot thank them enough for what they do every day. This is a script that I wrote last night, I just want to add something on a personal note. Last night, I left the office at 8:00 P.M. There were still a half- dozen Byrna team members working away. When I arrived this morning a little past 7:00 A.M., once again, the office was already bustling with activity.
You cannot buy this type of dedication or loyalty. It is only possible when people truly believe in the mission, as is the case with the Byrna team. Now, I'm going to hand this call over to David North, our Chief Financial Officer, to discuss our third quarter financial performance, and then I'll come back on to discuss some recent developments and take questions. David?
Thanks, Bryan, and thanks everyone for joining us today. Today, I'll review the financial results for the fiscal third quarter ended August 31st, 2021, provide an update on the company's liquidity position, and discuss the company's full year 2021 outlook. Revenues for the third quarter 2021 were $8.7 million, compared to $4.2 million in the third quarter of 2020. The increase was driven by higher e-commerce and international sales, new product launches, and growing market awareness of the Byrna product portfolio. Third quarter gross profit rose at a faster rate than net revenues, up 130% to $4.9 million from $2.1 million in last year's third quarter.
Gross profit margin was 56.2% of net revenue, compared to 50.7% of net revenues in last year's third quarter, and 56.4% last quarter. These improvements were driven by higher sales volumes, greater manufacturing efficiencies following investments in the company's U.S. production facility, and the introduction of new high-margin products. Gross margins were essentially flat compared to the immediately preceding prior quarter, as higher margins new product sales were offset by an increase in lower-margin international sales. Operating expenses for the third quarter were $6.7 million, compared to $2.7 million in the prior year period and $5.5 million for the previous quarter. The YoY increase was driven largely by investments in corporate infrastructure necessary to support Byrna's continuing growth.
This included expanding and retaining our management team and administrative staff, which resulted in a payroll increase of $1.5 million and a $1 million increase in long-term stock-based compensation expense from last year's third quarter. The increase also reflected higher variable expenses such as freight, which rose by $3.3 million, and insurance, which also increased by $0.3 million from last year's third quarter. Also incremental costs, including public company costs, legal expenses, and increased R&D expenditures. Third quarter operating expenses were $1.1 million higher than operating expenses of $5.5 million reported for the second quarter. This increase is primarily due to further expansion of, and incentives to retain our management team in support of continued growth, including $0.3 million due to increases in headcount, $0.4 million increase in the pool for annual bonuses, and $0.1 million increase in stock compensation expense.
In order to promote continuing growth, we also increased marketing expenses by $0.2 million over the prior quarter. Legal expenses were $0.3 million higher, primarily due to the one-time cost of an investment in protection of our intellectual property. Finally, insurance expense increased by $0.1 million. Net loss for the third quarter of 2021 was $1.8 million, or $0.08 per share, compared with the net loss of $0.6 million or $0.04 per share in the third quarter of 2020. Adjusted for approximately $1 million of non-cash stock-based compensation costs, non-GAAP adjusted net loss was approximately $0.9 million or $0.04 per share, compared to a loss of $0.5 million or $0.04 per share in last year's third quarter. Non-GAAP Adjusted EBITDA was a loss of $0.9 million, compared with a loss of $0.5 million for the third quarter of fiscal year 2020.
For 2021 year to date, the company is reporting a modest profit of $48,000, adjusted for non-cash items including depreciation, amortization, and approximately $2.5 million of non-cash stock-based compensation costs. Non-GAAP adjusted net income is approximately $2.4 million or $0.07 per share. As of August 31st, we had an open order backlog of approximately $400,000, with e-commerce orders being fulfilled in an average of two to three days. Turning to the balance sheet. We ended the third quarter with the strongest balance sheet in our history, following the completion of a public offering in July 2021. At that time, the company issued and sold an aggregate of 2,875,000 registered shares of its common stock at a price of $21 per share. The net proceeds to the company, after deducting $4.4 million in underwriting discounts and commissions and offering expenses, were approximately $56 million.
We ended the quarter with $58.4 million of available cash and no current or long-term debt on our balance sheet. We intend to use the proceeds from the offering to fund the working capital needs of the company's continued growth and to take advantage of strategic acquisition opportunities. Following the public offering, our total share count at quarter end was 23,603,996 shares. We've continued to focus on inventory management and sourcing initiatives in anticipation of growth. We currently have approximately 9,300 finished Byrna SD and Byrna HD launchers in stock and enough raw materials and componentry on hand to build another 5,000.
With the opening of Byrna's Amazon store in August and our desire to be able to handle a surge in sales, we believe that this has been a prudent approach, particularly considering fulfillment issues we faced due to surges while we were building capacity over the past two years.
We are reiterating our fiscal year 2021 revenue guidance of $40 million-$42 million, reflecting YoY growth of approximately 146% at the midpoint of the range. The guidance is based on the company's current order flow and the growth expected from, one, the recent and planned introduction of new products. Two, e-commerce sales via our dedicated Amazon store that kicked off at the end of August this year. Three, anticipated increases in domestic and international dealer sales. Four, broader brand awareness among customers. With respect to gross margin, our fiscal year 2021 expectations call for a range of 53%-56%, as compared to a gross margin of 45.3% in fiscal year 2020.
The anticipated improvement in gross margin is expected to be driven by the planned introduction of new higher-margin products and the benefits of our investments in the Fort Wayne production facility. I'll turn the call back over to Bryan.
Thanks, David. Let me start with Amazon. I get more questions about Amazon than anything else. I thought I would start there. At the very end of August, we launched on Amazon. We used this platform as the avenue to introduce the new Byrna SD. The sales contribution for the third quarter was de minimis. I think we did about $49,000 of sales on Amazon during the last few days of August. However, we expect to see Amazon become an increasingly important sales channel over time. We are already beginning to see a positive trend. Over the last month, Amazon sessions grew from approximately 750 per day, the first week of September, to approximately 3,000 sessions per day, the last week of September.
While this is still less than 15% of the almost 22,000 average daily sessions on Byrna's own website during the month of September, Amazon traffic is growing rapidly, and we expect to see activity on our Amazon storefront ultimately equal or exceed the activity on our own Byrna website. We've also seen a significant increase in members of Byrna Nation. This is the group of consumers that have opted into our email database. Today, Byrna Nation numbers 185,000 subscribers. This is up from approximately 35,000 at the beginning of this year, at the beginning of 2021. We talk a lot about our e-commerce sales platforms, and they are a very important component of our strategy. For example, as I mentioned, our average daily sessions at byrna.com was 21,900 in September. If we look at September of 2020, our average daily sessions were 7,660.
We've seen a 186% increase over the last 12 months. During the same time, as I mentioned, Byrna Nation email subscriptions have risen from around 30,000 - 185,000 for a 500% increase. We are seeing an open rate in excess of 40%. This list enables Byrna to keep members of Byrna Nation aware of new product developments, special offerings, pertinent news regarding non-lethal self-defense. However, along with the e-commerce presence, the retail presence is vital for new customer acquisition, particularly for a relatively young company like Byrna. People want to touch and feel the product. Many people want to purchase it from a trusted location. If one were to look at a Venn diagram of consumer buying habits, there are essentially two types of consumers, those that prefer to buy online and those that prefer to buy in a brick-and-mortar store.
While there's some overlap, it's not as great as one would think. Moreover, we see our brick-and-mortar stores driving business to our website as people go into the store and then go online to buy. We also see, conversely, our website driving business to our brick-and-mortar store as people come on, access our dealer locator, and then go to a brick-and-mortar store, so that they can touch the product. We are going to be putting a tremendous emphasis over the next several quarters on the development of our retail presence. As I mentioned at the beginning of this call, with the recent capital raise, Byrna is now able to kick off a number of new marketing campaigns that we've only been dreaming of since our inception.
Specifically, starting October 11th, Byrna will launch a billboard campaign in five test markets: San Diego, Kansas City, Dallas, St. Louis, and Orlando. If this works as we expect it will, we will expand this campaign to many, many more cities. We are also going to be kicking off a direct mail campaign. In October, we'll be sending out more than 350,000 pieces of direct mail. Now, this is an extremely cost-effective way for us to build brand awareness and drive sales. Although conversion rates are low with direct mail, even a 1% conversion rate would result in a ROAS, or Return on Advertising Spend, in excess of 10 times. We are buying outsourced email lists. We'll be sending emails to more than 500,000 gun enthusiasts, one of our target demographics. Again, this is a very cost-effective way for us to reach out to potential customers.
We've hired a firm to help us with our influencer campaign. There are going to be 10-15 anchor influencers who will launch content in October, and another 25-30 influencers that will launch content in November. The influencer campaign is more hit or miss. When it hits, the returns can be enormous. In September, one of our customers posted a video showing him using a Byrna to fend off a home invasion. This video went viral on YouTube, getting more than six million views and driving significant traffic to the Byrna website. We'll also be kicking off an SMS text message marketing campaign.
This will allow Byrna to reach out to members of Byrna Nation by text, where the open rates are much higher than they are with email. Finally, we're kicking off a print media advertising campaign this month of October with ads in Gun Digest, Concealed Carry, RV Living magazines, among others. One of the other ways that we look to grow revenue is through new product introductions, I just want to review some of the new product introductions during Q3. First was the Byrna Banshee personal safety alarm. Byrna was looking for something we could, first, advertise on platforms where we could not advertise the Byrna personal security device. Two, provide visitors to the Byrna store with a price point product. With the Byrna HD, our AOV, or Average Order Value, for first-time customers was over $480. This is a significant purchase.
We were concerned that a lot of folks that were coming to the website left without buying anything. By providing a $29.99 Byrna Banshee, we have a product that's affordable to almost everyone. The Banshee is a personal safety alarm that can attach to a purse, a backpack, a belt loop, and when deployed, produces an ear-piercing 130 dB siren and flashing strobe that draws attention, and thus can thwart a potential attack. We introduced the Byrna Banshee on July 22nd. We did have an initial production run of 2,000, which we sold out in the first 48 hours. To date, we have sold more than 5,700 Banshees, and that's just since July 22nd. We think, just anecdotally, that this will be a very good stocking stuffer for Christmas. The Byrna Eco-Kinetic .68 caliber round.
One of the unintended consequences of our success is that we've been selling millions of rounds of ammunition that are produced from plastic, and the remnants of these rounds are often left in lawns and fields strewn across America. It was important to the management team at Byrna that we develop projectiles that were not just biodegradable, which would take years to decay, but were in fact water-soluble, that would simply dissolve in a matter of weeks when left out in the elements. The Eco-Kinetic round, which is constructed of food products, is completely safe for the environment and non-toxic in case it's ingested by pets or small children. We brought out the Eco-Kinetic projectile to replace both the kinetic and the inert practice rounds.
It is one of the lowest priced non-lethal rounds on the market at only $0.25 per round when people buy it in a 400-count container. We launched this product on August 1st. In the last two months, we have shipped more than 1.25 million Byrna Eco-Kinetic rounds, not counting the tens of thousands of rounds we've shipped as part of our Byrna HD and Byrna SD Ready Kits. We believe that our Byrna Eco-Kinetic round will become the best-selling projectile as consumers embrace its environmental friendliness and the recreational use of the Byrna. We're going to be kicking off a recreational campaign encouraging people to practice their shooting skills in their backyard, having fun with friends and family. From a selfish standpoint, this of course will drive ammo sales, and sales of CO2, and other accessories.
It will also help owners become more proficient with their personal security devices and more comfortable in the event that they need to deploy their Byrna in a real-world self-defense situation. The next thing that we launched was the Byrna HD XL. The HD XL is an extended length version of the HD. It was designed for consumers who wanted to fire more rounds at higher speeds than the standard HD. The HD XL is produced by incorporating a longer barrel and the Byrna Boost, which allows for a 12 g CO2. The HD XL sells for $100 more than the standard HD, and during the third quarter, the XL represented 25% of all HD launcher sales. This went a long way to helping us boost Byrna's gross profit margin. The Byrna SD launcher. This is our next-generation launcher.
It is the natural evolutionary step from our extremely popular HD model. The SD incorporates an improved trigger, a honeycomb grip, enhanced sighting system. The Byrna SD became available on August 26th, just a few days before the end of the quarter, in connection with our launch on Amazon. The Byrna SD was initially offered exclusively on Amazon, although it can now be ordered directly on the Byrna website and through the Byrna retail network. With an MSRP for the basic Byrna SD Ready Kit of $399, which is $40 more than the Byrna HD, the Byrna SD is also helping us grow our profit margin, while at the same time providing for greater customer satisfaction. We introduced at the end of the quarter, in August, the Byrna M4 high-capacity rifle.
The M4 is created from technology acquired in the Mission acquisition. It expands our brand solidly into law enforcement and the private security arena, as well as to the gun enthusiast market. The M4, or Mission 4, is modeled on the AR M4 platform, fires rounds at 325 ft/s . It is an extremely effective non-lethal security device that will be immediately familiar to all AR users. Since August 1st, we have sold 660 units to both consumers and law enforcement officers at a price of $899.
Now, while I received some feedback that the Mission 4 too closely resembles an actual AR, and as such, appeals only to gun owners, we believe that every time we are able to put a non-lethal security device in the hands of someone that might otherwise be carrying a lethal weapon, we are taking one more step toward accomplishing our mission of saving lives. Speaking of saving lives, in August, we announced the acquisition of Ballistipax , or certain assets of Ballistipax . This was a company that had developed a single-handed, readily deployable bulletproof backpack. As part of the transaction, we acquired inventory, several patents, trademarks, and other assets. It was a very, very small acquisition, but we felt it was an important tuck-in acquisition because it allowed us to go after not just an offensive way of protecting oneself, but also a defensive way of protecting oneself.
On August 20th, we launched the Byrna Shield ballistic backpack, which features, as we said, a patented, concealable, readily deployable ballistic body armor system. Since that time, we have sold 160 backpacks. The Byrna Shield looks just like an ordinary backpack until it is deployed, at which time the backpack is actually transformed into full body armor, capable of stopping multiple rounds. The backpack also comes with an anti-bleed kit, allowing the wearer to immediately tend to any victims of gunfire.
We believe that the ballistic backpack will have strong appeal to our approximately 185,000 members of Byrna Nation, but more importantly, to other consumers and security professionals looking for a really discreet way to have access to full body armor without the intimidation of wearing a tactical bulletproof vest. In fact, one of the first purchasers of these backpacks was the DEA, who purchased five backpacks for a trial program.
We are going to be focusing our Byrna Shield on school safety officers. We believe that the Byrna Shield will allow them to be prepared for an active shooter situation without having to wear a tactical vest, which would be very, very intimidating. With the Byrna Shield, a school resource officer would be prepared to both confront a threat and to treat any victims of gunfire with the anti-bleed kit that comes with it. New products are going to be released in the balance of this year and into 2022. The Byrna MLR. This is a law enforcement-only weapon. This will be offered very, very shortly. We expect to see sales of this in our fourth quarter. It's offered in both a semi-automatic and fully automatic configuration, which is capable of firing 12 rounds per second. The MLR has 120-shot capacity, fires rounds at 340 ft/s .
Law enforcement will be able to order the MLR in either a CO2 or HPA, or High-Pressure Air, configuration, and we've already seen significant interest from our law enforcement customers. We've been talking about the Byrna LE for a while. This is also a security device geared towards law enforcement. It is planned for release in the first quarter of 2022. It is modeled on the Byrna SD, and outwardly will look very similar to the Byrna SD. It has a new valve system, which results in significantly higher muzzle velocity. It also has fiber optic sights, a 7 + 1 magazine, extreme cold weather capabilities, and we will be offering this to our consumer market, once we initially open it up to our law enforcement customers. We also plan to launch the Byrna TCR, or Tactical Compact Rifle, later this quarter.
This will be the first launcher that we build completely in-house on IP acquired from the Mission acquisition. The Byrna TCR is a very easy-to-use semi-automatic launcher that can fire 19 rounds in rapid succession at more than 300 ft/s . It stands apart from other shoulder-fired launchers because it uses easy-to-find and readily available 12 g CO2 cartridges. We'll be introducing next year our Pump Action Launcher. The significance of this is that the Pump Action Launcher will be the first launcher designed to fire Byrna's patented fin tail projectile. These are the projectiles that are designed to spin-stabilize in flight. They are significantly more accurate, carry greater payloads, travel at higher speeds over longer distances than the traditional round-ball projectiles that are used today.
It's being designed to offer law enforcement the ability to disarm a threat at distances of up to 150 ft. Without the need to resort to lethal force. We demonstrated the capabilities of this launcher in June in Los Angeles, where there were representatives of several police and sheriff's departments, and they were able to test-fire a prototype PAL. Before the PAL comes out, we are hoping to release the 12 gauge round. The 12 gauge round will be a shotgun round with the .68 caliber fin-tailed projectile inside. What this does for us is it allows Byrna to access the owners of almost 100 million shotguns in the U.S. alone, and provide them with a highly effective .68 caliber non-lethal round without having to spend as much as $1,000 to purchase the pump-action launcher.
We expect that these 12 gauge rounds, based on the .68 caliber fin-tailed projectile, will sell in five-count and 10-count boxes with approximately $7 per round price. Other third quarter highlights, law enforcement. Last quarter, we discussed the formation of a team dedicated to bringing Byrna's suite of non-lethal products to the law enforcement and private security markets. During the third quarter, this team trained and certified 85 law enforcement officers and private security professionals from 30 agencies as Byrna instructors, bringing the total number of agencies using the Byrna to more than 150. In conclusion, I want to say that I'm extremely proud of the amazing progress that the company has achieved this year. Sales for 2021 are already up more than 100% compared with full year 2020.
Based on the Amazon launch, the new marketing campaigns the company is implementing, and the extremely robust new product development pipeline, we believe we are really well-positioned for continued significant growth in 2022 and beyond. With that, I'd like to turn this back over to the operator, and we will be happy to take questions from our analysts and institutional investors.
At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Our first question is from Jeff Van Sinderen from B. Riley. Please proceed with your question.
Good morning, everyone, and thanks for taking my question. Can you speak more about the new products that are being added to Amazon, or plans to add new products to Amazon, since I know Amazon is a topic on a number of people's minds?
We started off with a limited number of products at Amazon because they gave us limited, quote unquote, shelf space. Initially, we could have 1,000 units at Amazon. Within the first week, as they saw the traffic, they raised that to 3,000, and we added additional products. They have now raised that limit again. We are adding ammunition and holsters and lasers, additional colors. Our goal will be for Amazon to carry everything that we carry on the Byrna website. I don't know how long it will take. The way these algorithms work is the more success we have, the more they promote the product and the more shelf space they give us. Our intention is to have the complete range available on Amazon.
Okay. I just wanted to touch on, I know there was sadly another school shooting this week that was in the news. Just maybe if you could touch on your strategy going after the school market. What are the milestones that maybe we should look for in the school market over the next year or so?
The interesting thing there, the ironic thing is, we developed the Byrna, because at the time, we were offering products that were available only to law enforcement, military, school resource officers, in other words, to the government. Making sales to the government is a lengthy and difficult process involving budgetary concerns and bureaucratic concerns. We pivoted to the consumer market. With the success that we've had in the consumer market, our products have come to the attention of law enforcement agencies. In fact, this week, we are training the ATF. They're now buying Byrnas as well. It's still a slow process. As I mentioned, we've brought on 150 law enforcement agencies. That's 150 out of 18,500 agencies in the U.S. We are finding the same thing with breaking into schools.
Although we've been =making a lot of presentations, we have to have sign-off from the school resource officers and from the school principal and from the superintendent of schools for that school district. We have not built anything into our projections for the school program. Although this is an important project for me personally, there's nothing that I would like more than to be able to have the Byrna Shield and the Byrna personal security devices on every school resource officer in America. I just don't know how quickly that's going to happen, Jeff. It is something that we're devoting resources to, and we'll continue to focus management's attention on.
Okay, great. Then if I could squeeze in one more. I know you've added new accounts recently, or new retailers. Any more color you can give us on the latest trends you're seeing in the dealer channel? Then I know that's a focus, just anything we should look for over the next couple of quarters in new retailers.
What we've discovered is that the retailers that are best for us are companies like this new retailer, Bi-Mart. Bi-Mart has ordered numerous times this quarter since coming on board. Bi-Mart is sort of a mini Walmart. It's sort of a general merchandise store that caters to a broad population within its regional footprint. That tells us that other stores, like Walmart, should be a target for us. We are currently in discussions with many of the sort of big-box stores that you would imagine. I think that this is an approach that we should take. Where we've found that we are not making good headway is with the FFLs, with the firearms dealers themselves. As those of you who are firearms owners know, many of these locations, people are buzzed in.
There's not a lot of foot traffic going up and down the aisles. People go to a gun store specifically to buy something that they want, either ammunition or a specific weapon that they want, and rarely buy something on a whim when going to a gun store. We are not going to focus our efforts on going after the gun market through gun stores. We think going after the gun market through gun shows, through things like the print media advertising that we're talking about, the email campaign that we're talking about, but we're going to try to pull back on our efforts to sell through federally licensed firearms dealers and refocus our attention on more general merchandise stores.
Okay. Thanks so much, and best of luck for the rest of the quarter.
Thank you very much, Jeff.
Our next question is from Brian Gesuale from Raymond James. Please proceed with your question.
Hey, good morning. Thanks for taking my question.
Bryan, can you maybe talk a little bit about how you might see the evolution of product sales during the holiday season, what incremental marketing you may do, how we might start thinking about the seasonality and natural shape of the business over the course of a given year?
Up until this point, we've not had enough product to ever really participate in the holiday season. Last year, we did not run any specials. This year, I'm happy to say that we're in a much better position in terms of product. As David North mentioned, we're going out of our way to use some of the cash that we raised to significantly increase inventory levels so that we will be prepared for a surge in demand.
Because of our unusual fiscal year ending at the end of November, Black Friday or Cyber Monday sales will not result in any sales for this quarter, because by the time we get the sale in and ship it out, we will be past November 30, which I think is a Tuesday.
Yeah.
That said, we do think that there will be a significant consumer demand, particularly as we now have a very large installed user base. We're well over 110,000 launchers sold, and these are people that are continuing to buy ammo. We're bringing on additional products, from apparel to the Byrna Banshee, obviously these new Byrna Eco-Kinetic rounds, new holsters. We will be running a robust Black Friday, Cyber Monday campaign. Because of our year-end at November 30th, we'll probably also do something like a Byrna Friday, maybe a week or two ahead of Black Friday, so that we can try to gain some of these holiday sales in the fourth quarter. I would expect that most of the holiday sales will end up in Q1 of next year.
That makes sense. We would obviously expect Q1 to sequentially grow off of your 4Q, not only with the momentum and inherent growth in the business, but perhaps even maybe a little bit of a bigger increase sequentially than we typically see.
Yes. I would have to say that's right. Q1 should seasonally be a strong quarter for us.
Okay. Terrific. You've really grown out awareness. You've got 185,000 email subscribers. Can you talk maybe about potentially making the subscription model available? It seems like ammunition is tracking ahead of plan. Presumably, that leads to more used cartridges. Are there any plans underway to get some subscribers from that list? Maybe how might you think that could progress over time?
You're welcome to join the management because you're thinking exactly as we do. We are planning on introducing a subscription model. We're going to kick it off with Amazon because Amazon purchasers are very familiar with subscription models. Up until this point, we've really been constrained on ammo. We've been particularly constrained because we had a sole source supplier. If people read through Byrna Nation or Byrna Owners Groups, I think the one consistent complaint has been the fact that we don't have a regular supply of ammo, or we haven't had a regular supply of ammo. Some of the quality problems we had with ammo. With the introduction of the Eco-Kinetic round and with the introduction of our own production of ammo now, so we're actually producing Byrna Pepper ourselves.
We're producing Byrna training or Byrna inert rounds ourselves, in addition to the third-party supplier that we're buying from. We do have ample supply of ammo. We will be introducing ammo in more configurations. We've always sold the inert rounds in 95 count. We'll be introducing a 25 count this month. We think that would be an ideal thing for the subscription model. We will test out the markets on the subscription model first with Amazon, and then if that's successful, roll it out to the Byrna website as well.
That sounds exciting. Maybe just final one for me. Can you maybe give us just a little bit of help on how we want to think about OpEx growth as you're in this hyper-growth period over the course of the next 12 or 18 months, and how you just see that running its course?
Yeah. Look, I will be completely honest with you. I was not happy with the OpEx numbers for this quarter. We are working hard to reduce what I will call structural OpEx. In other words, payroll and other infrastructure costs. We've already, I will just tell you, I've already reduced payroll by over $530,000 on an annual basis. Dave, do you want to chat a little bit about what we're doing there?
Yeah. Looking at it from the big picture, I think in our last call, I said that we should expect OpEx to continue growing as sales continue growing, but not at the rate that we had seen in the prior year. That continues to be the case, that's just the natural development of maturity of the company. Right now, we are in the fourth quarter, naturally, we are going through the intensive process of building out our budget for next year. We'll be looking at all of this in that context. Something very big has changed between this quarter end and the prior quarter end, that's that capital raise. We've got $56 million in the bank. It's very safely invested, that means that it gets very little return.
We've got to figure out how to invest in marketing and also in people to promote the growth of those sales. We do not expect to have quarter-on-quarter increases of this percentage that we've seen from Q2 - Q3. We do expect to see continuing gradual growth in this number, however.
Yeah. Again, just the way we're going to be looking at this is what's structural and what's sort of marketing. Right now we are spending, I wouldn't say like drunken sailors, but I went through all of the marketing programs that we're kicking off this quarter. We plan to spend heavily on marketing. Infrastructure, we plan to tighten the belt a little bit. I think that we're going to look to see how we can control those costs. From a marketing standpoint, getting the brand recognition is everything. I think I mentioned, every once in a while, you think, "Boy, we've been so successful. Look how we've grown." The fact is, very few people know who Byrna is. When I meet people, invariably, it's one out of 20, one out of 50 that have any idea who Byrna is, what Byrna does.
It's clear to us that we need to continue to expand the brand recognition, and to the extent that there's growth in OpEx, it's going to be on the marketing side.
That's great. Thanks so much. I'll jump back into the queue.
Okay. Thank you.
As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question is from James McIlree from Dawson James. Please proceed with your question.
Thank you. Good morning. I was hoping you could share with us data that you have on purchases by customers after the initial purchase of a launcher. That is, if I purchased a launcher a year ago, how much in additional sales do you average with that customer for accessories, ammo, maybe an additional launcher, things like that. Do you have those statistics, and can you share that with us?
I don't have those statistics at my fingertip, honestly. They are trending in accordance with industry standards. If we look at the Mission acquisition, Mission was a more mature company, had been in business longer. They had approximately 50% of their income came from recurring sales. If we look at PepperBall, and we had a number of people that work for us that were at PepperBall. PepperBall also has about 50% of their revenue from recurring sales. We see of the 20,000- 22,000 people that come to our website, 50% are first-time visitors and 50% are recurring visitors. We would expect, as a result, that over time, hopefully many, many years into the future, where our growth starts to moderate, that we will see the repeat sales being 50% of our business.
In this industry generally, most purchasers spend as much on ammo and accessories over the first 18 months of their purchase as they spend on the initial purchase itself. Keep in mind that while we've sold 110,000 launchers, if we look back eight quarters to sort of the very beginning of when we started to sell launchers, the numbers were very small. The largest number of launchers have been sold in the last two quarters. We are seeing probably 80% of people come back and order at least one additional time in the first 90 days. We have probably 20% of people that come back and order five times in the first 90 days. We are counting on this becoming a more important part of our business as our installed user base grows.
Thank you. That's helpful. Just to clarify, Bryan, the metric that you mentioned, a purchaser spending as much in the next 18 months as they did on the launcher. That is currently, or that's what you saw initially?
That's an industry statistic for the firearms industry. When we were trying to build out our model for Byrna, we were looking at what were analogous industries. In the firearms industry, and this was before the price of ammunition went crazy, people were spending as much on ammo and accessories during the first 18 months. The other thing that we're hoping that will be analogous to the firearms industry is the average gun owner in the U.S. owns three and a half firearms. Generally, what happens is they'll buy a firearm. Initially, they'll use it quite a bit. They'll go to the range, they'll use a lot of ammo, they'll buy accessories. After 18 months, that will start to trail off, and they will buy another firearm. If they had a revolver, they'll buy a 9 mm.
We think with the introduction of these new products, both the long guns, and the Byrna LE, the upcoming Byrna PE, that we will be able to take advantage of the same trend. Those people that really like their Byrna HD will want to have the latest, greatest model. We think that we'll benefit not only from the recurring sales of ammo and accessories for the existing launcher that they have, but that we will also benefit from them being a brand supporter and that they will buy follow-on products.
Okay. That's helpful.
We have seen that happen. Of the Mission 4s, which was not an insignificant quantity. We've sold 660 in two months, at $900 each. This is about $600,000 of sales. This was all to existing Byrna customers. We have not advertised this at all outside of our own ecosystem. This was all sold off of emails to our existing Byrna Nation subscribers. We're in the process of putting together creative for advertising programs. We think that our thesis that we will see our customers come back and buy our new products is proving to be true. Are there any other questions?
We have reached the end of the question and answer session, and I will now turn the call over to Mr. Bryan Ganz for closing remarks.
Great. Thank you very much. I just want to thank everybody for their support. I can assure you that we remain as committed and convinced as ever in the Byrna mission and the Byrna thesis. We're strong believers that we are just at the very early stages, just beginning to scratch the market in terms of brand awareness and growth. We're excited about the prospects for this quarter and for 2022 and beyond. Again, thank you very much for your support.
This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.