WRTC - Earnings call transcript Q4 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Wrap Technologies Fourth Quarter and Full Year 2019 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

Before we get started, we’ll be referring to the press release file today which details the company's fourth quarter full year 2019 results and can be downloaded from the company's Events and Presentation page at www.wraptechnologies.com.

the Presentations be website section evening. of same on later recording and Events of a call available will the this Finally, the company's

be future and of the made Securities Laws. will, the include statements results Please could, the and statements the words Federal some similar could company's such about differ call company's expressions may, involve These risk beliefs anticipate, statements. forward-looking the to and meaning this expect, containing may comments cause the believe, within operations management's Statements that forward-looking that and that – aware results Wrap regarding uncertainties expectations, constitute during of as current Technologies expectations. from materially

factors cause with specific The and today's results periodic company's company identify most contained statements. the or reports, undertake and the encourages the materially events does Securities forward-looking without on conference the to release, revise the in XX-K actual or not which this statements other Safe company publicly call. The to risk risk review press the filings you Exchange and date after forward-looking annual differ report company's the limitation, Commission, update that from and recent described any including and Harbor factors of may statements

as in this agencies, distributors. to the and supplement The principles certain company providing on The as accepted accounting accordance trainers, a of also in or company notes be call, information United discussing will GAAP. that such they generally number that information non-GAAP operational with backlog, is States prepared metrics,

Officer. Sir, Norris, David over Executive turn please Chief I'll now, And call company's to the proceed. the

David Norris

which CFO. results to today. full We'll available you market on investor www.wraptechnologies.com. over everyone Thank our we on the call XX, copy ended the page the you, After Barnes, December year turning period fourth of Jim the webpage, A closed, quarter XXXX. out our Justin, for our joining start is issued by thank us and for and

Jim Barnes

David, you, and Thank everyone. good afternoon

on also Our today are today. XX-K Form the forth release annual set results operating in press filed filed detailed report and our

are of from a Revenues products distributor for quarter stage early mix fourth we Fourth revenues order and quarter $XX,XXX increased our of compared the a to reminder, worldwide As – international fourth still agency were XXXX. $XXX,XXX large the market remote quarter restraint a and in the mark in accessories. of addressing for XXXX fulfillment.

and orders full XXXX, of in year $XX,XXX the end to revenues of $XXX,XXX December months. the XXXX. XXX,XXX to over For ended we X.X XXXX, revenues QX XX, approximately million, delivered of were a At backlog next customer deposits expected had compared of of XX the be

of quarter international relate and to domestic nature the in Gross to XXXX fourth will XX% large As fourth not distributor future the insight customer a deliveries and subject enough or to exactly for instances We revenues. compared was determine some do margin are orders have modification, future cancellation XX% to quarter and orders timing of of rescheduling backlog how course business. the for XXXX. reminder in generally the periodic into profit normal the in

margins. XX.X% sales in We year margin channel profit XXXX. direct internationally, For to domestically impact rely the product full XX.X% and mix XXXX, sales, compared distributor significantly gross can was changes and on and both in

and do our larger to as in again, The margins should upon relied our factors on activities, Due to Other impact product startup we warranty changes the margins production and impact move indicator of mix. not costs. sales including and Arizona recent dependent historical may facility also and believe Tempe, raw of future margins, material volume updates, component an nature margins. be

to XX, million million XXXX SG&A costs $X.X year quarter. compared compared XXXX the for full quarter million fourth during SG&A the for costs December year. were million the the ago of $X.X year ended $X to were prior $X.X for

quarter other resources due and expend future predominantly customers training to our sales, to For planned and our marketing training growth. expansions support the the on both the and of in is to the we international year, expect additional activities products, selling domestic SG&A in and In distributors increase and operations. supporting the near-term, and

costs $XXX,XXX were quarter development XXXX $XXX,XXX the $X.X in ended were to for quarter. compared the million R&D full Research XX, costs for the the year. $XXX,XXX fourth prior ago XXXX year year to compared during and December

projects XXXX during vary net to depending was per $X.X We GAAP levels expect staffing. $X.X R&D fourth $X.XX share costs and $X.XX share, or $X.XX quarter for million, per full or compared will our quarter. of $X.X research for million, year. the internal $X.X compared prior per for year share, the of and loss or on Net per to The continue specific loss external $X.XX was fourth or to million, share million the year's prior XXXX the

stock The $XX.X for We based compensation of cash XX, equivalents, million with net as expenses. respectively at XXXX the cash non-cash and year XXXX million million quarter fourth ended compares approximately in of December and loss cash $XXX,XXX capital of each $XX.X equivalents Working the which of end million. was $XX cash and included to $X.X XXXX.

equity minimal $XX.X have We and million debt at year stockholders' was end.

XX-K our of please more today. results, financial a earlier reference Form For filed detailed analysis our

to over back you. David,

David Norris

into ensure on XXXX from year businesses a was transitioned you, our XXXX the stage refining for focus growth to product a of actual and was research viable. much commercially Jim. product and development Wrap of banner our and phase. that an it Thank marked developmental was In

we the company large infrastructure of However, market ahead opportunities sales in March and product XXXX and in capitalize to strategically ready us. the a with focus of our necessary business positioned or on May much to place, our on the transitioned market for

which you those who and reflected substantial in I'd an begun aware, which of improved today. provide like readily of to will be revenue operational As our has followed our have XXXX, made story, progress during overview to we be performance

domestic which revenues, built uptick uptick international should evident on and volume great then – we by the uniquely as opened the on manufacturing joining job speaking and Smith, he President. his our the background call of of has qualified up who's our with TASER former order QX, is and a as in he Many we Tempe, year. the of President our with familiar to from sales, foot management At both the million scaling that leaders you are team square strong Tom us done and initiative. lead joined Arizona. place, the in XX,XXX Since sales the facility will Co-Founder amazing and be and the company, very in an be our today end for of $X.X team why end next, With a backlog

year more year, our can as cartridges facility will lines a efficient. single to XXX,XXX and full By more operating XXX,XXX talent a build all need XXX our to would to scale consolidating manufacturing able a the to scale we're demand. actually, before a line into operate more market effectively our develop capacity device cartridges able XX,XXX week about Currently, or team new – week. XX,XXX of year a devote we're engineering move increasing manufacturing about makes devices with be our location, efficiently meet At X,XXX running, and – facility. per also at is we to and we we a sorry about, cartridges and That

So only these we'll see numbers improved.

increased efficiencies achieve and critical gap, this BolaWrap become unique As and manufacturing will more operations. fill investment these ability through volumes a its to these able agencies of be to in in aware

base costs broader we to to customer on strategy. our a target decision organization model We're XXXX able go-to-market much able distributor and Also, our we're lower made a By internal quickly. more to also the much our distributors, pursue flexible. primary as keep leveraging more

has on momentum relative XXXX fill half some That do, we So far, by going before our other of generated proved the to here. contract which focus carried the an to factors success. strategy. contributed to us like effective evidenced XXXX. strategy the recent have of in this the But Tom as increasing the to I'd brand of I our let XXXX, some is and details I'm on has be in to that start revenues us to for second you

has the our a there's better awareness can evangelists to and it our line In the we're trying gap, sales get in the than are hard campaign growth. successful to of product, It's field opportunity immediately have They on had with the no fill. BolaWrap deal because it. then who they our for the use and impact everyday underestimate to officer, brand the the level what ones industry who

product more public community of in and strategy its see began growth. So XXXX, the the gaining the our top do will more our on to line educate this we tangible evidence traction. viability, law can broader the and to And drive we enforcement

Yahoo as such X,XXX than The CBS, many and FOX FOX on USA television XXXX. Business features BolaWrap CNN, and News, networks featured more across national product Insider Finance, international BBC Today, aired networks. Business, times News, was in World other major networks

millions tens country. demonstrated now multiple of LinkedIn, agencies campaigns, the enforcement to-date to across we marketing from Additionally, Instagram, of due including buzz successful platforms, and BolaWrap to XXX the part In Twitter, we've Snapchat. generated the large over YouTube, Facebook, law across social views created media

resulted over the the and new X,XXX report audiences need see When to and BolaWrap day, new product not in it that ultimately reports, I end action, excellent become domestic introducing use people is of This but only to of an the this say it's Maybe to demonstrated, I our inquiries actual means customers in – actually our prospects have of done demonstration. mean, our advocates. XXXX. at and officers hundreds international in to is media but from

of of number quarter the doubled Master the also we've Instructors XXXX. third since Therefore, BolaWrap

to then instructor which to instructors these a line of At level at colleagues. end master the As back who train officers reminder, officers. their department BolaWrap these go level become a the line teaches train seminars seminars, their they

we reality training our of us each as received to BolaWrap. at has functions So internal an for lean an advocate from Wrap, and run the may adoption a officer broader the sales is instructor company team who become while that

BolaWrap XXXX, total Trainer number of and officers courses their added conducted During XX as XXX. Instructors qualified instructors, to are we train increased over we've Train To-date, XX Master who states. in XX departments BolaWrap certified the the

result our the trade a and noticed training As material marketing shift conversations in also we've of shows. of happening were initiatives, at type

people prospects spending much explaining were the XXXX, to events industry we of mostly we're advanced product time need event, whether questions of great other had at nuance. deal industry and or IACP, a any XXXX, coming we're Regardless level more the peers. the In more for Milipol, at us. high and conversations in

the of are Suffice We're sentiment people extremely we've it our improving to pleased need initiatives. the seen the and solutions drive say, do we sales. of who these communities. the safety enforcement understand and marketing why to as our changing law But our of at critical a efficacy day, initiatives end the what of to and more more with we are, result

So Smith, over progress overview President. our how of prospects I'm going leveraging to to an into the our provide to Tom we're partners, operational to call turn convert

Tom Smith

Thanks afternoon David. everyone. Good

May, came demonstrations and on led the doing management major As In as the we directly our with insist David focusing agencies. for sales started by came a distributors really out team can business that now the mentioned, those by market primarily having And of variety sales our to agencies, we Lucca. the Rothans added production-ready the XXXX, Don and with Mike in that To on influential team, last reasons the to distribution get focus endeavor, a and management focusing board, Don the had well, De as Mike model David product our on. company. started really from for and touched on

in to the factors buyers. deem also And for the exposures, relationships. us We've they're models. already agencies and the working existing have and two and and areas in selling that addition the opportunities and these they'll that law distributors to demonstrations they seen have agencies how an refined ours much is on with are relationship the through grow business have as their big yet the presenting that we're partnering that now exponential of with distributors us They we business in one in of locations increase the we're with strategic enforcement more

can using to distribution salespeople grow to on I to a the model, of previous able with handful comment my $X only over experience million. sales a was

we costs, sales So really direct increase exponentially model. through distributor able a the without a in to lot of increase volumes were

typically come as orders departments of international cover are with and first we've markets distributor to XX was expect strategy at implementing over which countries. from before, signed distributors this XX months And million. initial XX large launching large received order, Since we that first and international in within discussed valued strategy, domestic we enforcement that summer, agreements $X our much our we overseas law XX states And more the the where larger. do have this two last centralized

have when in overseas, a different XX,XXX at United States, means of the more officers. we representing to here agencies. So XX,XXX you to where decision just to go decision much makers XX,XXX centralized makers many least handful XX,XXX That that it's

because sales many market BolaWrap result, value the potential in but officers their continues or In complex, the a As great cycle international is and tools firearm. a taser disposals the much for at fewer longer countries, the a officers contract baton, United is of counterparts. average a have than many U.S. more The each opportunity. hold pepper States, their larger about to spray, carry dollar

options. ability from While none to distance are causing are harm. without substitutes restrain Wrap’s someone They a of these for

their tools or officers they're by someone hands just into usually do are on authorized line restraint countries, to carry custody. firearms other to many having and and in taking jobs However, not level

Therefore, solution to available to them a someone for early all that devices technology BolaWrap establish our many compliance And restrained device, of tool force. before the compliance is be heavier that pain remote enables allows without kind confrontation the in requiring a compared the that a level them. desperately only are other of looking countries to to restraint escalates and

That being agencies to to the suit. U.S. tend and said, look follow international

it's these expedite the our sales international important processes, viability United States. first prove to the products So in here to of

years. We And about news in actual because are the for number conceptually seeing uses. us obviously of talked the an best field it we've that's for increase

believe We've hands an in it is. and prototypes. see the to numerous are in the number proves done officers, walking saw tool model beat uses the the of are and guys the that BolaWraps line demonstrations, getting we of the now numerous, out into the level increase we're just the where but starting We really the that

or kind that aside of thing set the a restraint we money a from spend to this. also last start started having we've of year remote other agencies The device aware noticed without is flat being buy to budgets

we've excited longer you look in smaller react increases that if agencies about had, agencies So contact enforcement agencies. for I'm take Therefore, a much at larger we're obviously to focus huge those less size on selling where the us to lot budgets officers. have hundred and which quicker. to can law sales continuing the that. that's the The those smaller And distributors than domestic help really agencies, a the a have with very add

to the evaluation and these probably butter we've agencies our been our test and through short-term remain larger to Through equipment. efficiently. will been as accelerate get T&E, targeting agencies in and budgets the to distribution has sales our the This bread well more as will go processes purchase their as take that's able partners, time aligned by

increased And and from number and who forward since distributors, now seen orders with that our smaller partnering of we've agencies, quotes products. are coming purchasing

a people in with where in have purchase agencies our demos product, seen of a are an where hand. showing our the transition used to about past now to learn we the some to at order the up demonstrations example, As come actually

to backlog to by As a we've we million already distributors demonstrations, more and enforcement were and agencies XXX build of delivered the law able XXXX. end And result, XX than $X.X for product testing evaluations. today,

purchase international As received of the into shifted of for been through many January to the had BolaWraps and and XXXX, we came this momentum that XXX on In order an we much of cartridges we year. fruition. months X,XXX saw start finally continue worked XXXX, for

to throughout our to with we’re we're XXXX. continue discussions be ongoing going momentum that building prospects, able Given optimistic

touch to our the fourth on over I I'd before highlights of one And call back turn quarter. David, briefly from to like the

implement. constantly extremely Police testing third going conducting the would quarter, departments new thinking field fourth testing they're that the which from long, and in notoriously TASER, but Los epitome with be is to any had XX had BolaWrap. diligent, that they the Angeles BolaWrap the is long since new the During time by system in Department considered to they're They're LAPD of announced and been technology and the largest actually forward we're the perspective the the obviously police and evaluating any particular technology encouraged Therefore, a to the nearly they the adopting was a an tool tool. for date. ago. they've reviews And prior BolaWrap even given years they've restraint they since that, And first positive it's country.

this making we going LAPD early agency is longer on a began would from they're field with product this intend progress of than large for bear updates please LA very large, our with testing processes, to therefore across this but time. be year This share officers and hundreds take smaller they in of materialize, to the February decision department as department. County mind it is much it a because in to

forward is where doesn't one However, going it's throughout I another the be you final XXXX. the mean larger the much of in of and talking we look much, or quarter, to forward to we quarter And them evaluations to that opportunity this that results to already supporting look their comments so and on our month first date to quarter best quarter, about can. our

And back the over with to I'll that, turn David. call

David Norris

Tom. you, Thank

past our to and direction. As improvement evidenced But performance future moving business from performance right momentum we and XXXX XXXX, as by making we're progress in the necessarily the on beget contract the in the clearly does success. all financial not know,

expectations we a like open our speak for call XXXX. just the take few before I'd to moments questions, to So about

few more of collegially attendances on internationally. sell supply felt have a a markets all lighter and operational to effects, We a to everyone order aware, that hurdles like to challenges to referred impact international with as very clear they you're chain than worldwide. the less additional have effects As have had arisen COVID-XX we material from second logistical primary the have been The perspective business. travel but rather commerce our are for international have minimal our coronavirus

opportunity hasn't parts Operationally, But end that we that we to is order. manufactured diode, the – Tempe of to inventory most don't have business. see really we forward we laser all which placed And timely. the the was Today, supply incredibly any our manufacturing have Consolidating is impacts changed the a need are U.S., our received intact. the standout Germany. of piece only at the the into facility and year's the this the remains and the day, is for manufactured negative in order meant suffice within that

coronavirus to expect opportunity We remains do current of cost vast. So to of material do, to have we us the capitalize and the scale not any macro to our continuing increases opportunities events. business ahead on the due however, kind anticipate

the we positioned XXXX a were that ago. than better difference year us between For XXXX XXXX, is now primary and much we’re even

We have viable commercially a product.

a of distributors but network help drive to to have product market. robust We ready expanding our

momentum We profiled high is for getting have that demonstrations, a stronger. and brand solid converting which generating into orders. volume We're are only high

million result, year And as the which expand. a we're started we working with to backlog, $X.X

we're strong police make safer. a to We entering continuing XXXX work of us confident to more to we're continued our that position officer in deliver So, growth. forward look and ultimately, effective all

With that, operator the call to over to questions. the turn I'd like and

Operator

question Securities. Greg [Operator Thank comes Instructions] And Gibas from our you. Northland first from

line Your is open. now

Greg Gibas

progress taking see my quarter. nice guys. afternoon made this the Thanks that for you've questions Good to and

David Norris

you. Thank

Jim Barnes

Greg. Thanks,

Greg Gibas

think said but be about to I that, How that? said basis, we a in the current I should think guess I guess of when know on realized? of you quarterly all that we the about should timing which be about is first difficult, as million, recognized that with X.X going maybe think we when it's you backlog, the XXXX.

Tom Smith

It’s Greg. Hey, Tom.

those of at fair would a the say some international I number So look of that of are that you orders. kind if

to it's spread say would next of three I quarters. couple the going over So be

to timing, is the of say a terms of be government to over In terms impact response would coronavirus that. timing, yet remain terms good going how it's three of in quarters to much next would for that marker. I But one the in

Greg Gibas

to going top a Great. quite That's then expanding U.S., kind just do be think to to of you're you've respect priorities you numbers with forward? like you're internationally. expand I in how your where channel? mean, network. And the you’d made that continue super distribution of that distributors helpful. I these to What as the in I now to guess bit goals XX are progress have XX any going

Tom Smith

five Well, States more obviously, covered. we've we get in the to need U.S. just got

tightening again, really as got out expand South have with much to other relationships get now up as those distributors that demonstrations. go the just Because those be successful. want leaders So in the and on distributors forethought obviously we've doing in in forward, our will there their Asia. distributors the with we they do there'll because current and but Africa Internationally countries centuries we it's to they're efforts XXth their pretty the focus region make we countries covered America,

that world be the and be to going countries got at we've they’re the going are looked that So to are people covered as progressive.

So, with we did four trade over and show. swamped. booth of the five or and I has David went there our Milipol just the staffs

huge need huge So a a interest, for this there's technology.

want sales we the as numbers to we're distribution that and and this make sure up we're more model to having grow efficient making just speed. So more expanding revenue that

not for and Roe, this. breathing the they're our group. living XXX% We're with every distributors, is Mike, the Don, whole day Stacie, on this team Jose, focused like So,

making place with are we're customers. the the all getting We're those sure that that So follow-up in relationships. the of communications distributors establishing the connecting are

we're the the that increase I to the So have as a they're that because that going mentioned are going ones much revenue distribution we the it's increasing. current not the so model going obviously sales there. leaders we're the internationally that to and It's making numbers ones for numbers through then be success to look

David Norris

strategic their there's demonstrations we XX demonstrations energies and Currently, demonstration usually a departments. the and the doing buy at team is able they XX. probably needs product. Rothans before our the Mike product major enforcement one agency Those month to with by see to departments start three because focus law to to to of be the All led really sales ultimately XX have on a time, the, can seven

as let’s say, to on their, the to With another that their do top adding hundred – a month month, we’re probably well. a able they're XX XX demonstrations of distributors

it's to really why that that position, the sales It demonstration need. It a of So understand starts the process. helps product product. with also the explains starting out just them

hard it And them on the XX,XXX be the let get department tackle very country would so from that international like it to – without we U.S. alone distribution. support

Tom Smith

back synthesize with ties We being different in in The training really our learning the distributors, from that be is our and of the that experiences the operations the management the shared. process really it the done the it's we're place sharing And into and standardized training. policies with to everybody kind smooth departments. information for demos, instructors, to that's got delivered, can processes so rolling sales system training the is to so string different the the officers trainings and that together

Greg Gibas

but sense provide regarding about now. to on it. the appreciate us going the trials you guess deployment, their to I but That I is think long all field talks there are Got really anything makes going a already, it's talked call the with how detail. BolaWrap you a lot this they're that LAPD? process, – them Just furthering and still be the just doing you right giving with hear. of can I that's said good

David Norris

come but numbers, to we of wait clearly, them to they've – been works. about have training. for devices, gone X,XXX There's there seeing but the product. officers, They're back need they with I test. They've no how XXX experienced exact that product through the results the official Yes. have significant

Greg Gibas

Got guys. it. Thanks

David Norris

You're welcome.

Operator

Ladenburg And next Thank comes our from Jon Hickman Thalmann. you. from question

Your line open. now is

David Norris

Hey, John. How you are doing?

Jon Hickman

not? good. that the of share tool, you – test. I'm information mean, you this formal or want LA is they decide Could – with? back to great a to are to department is it are they could going what’s come the Hey, the do me back saying, I what circle use the time. information Like if what or oh, looking kind I officers tell to that? they question, like all this on my Can if for purchased want I be stats looking is you

David Norris

question. I be led on Actually, said, when want thing? at think that's using to officers are of tool exact what that great if one to asked says, us know, the same reporters day, this Wrap the the live going you evaluating then you question have. end the my of it, that television, to this are we're Moore He and how is Chief him going a

clearly value of because there's tremendous going out field. So resources as be putting it sure quantitative they they see move wraps And I'm the as into forward into put more right. occur, it we the measures to

are supervisor, can out the tool. officer, officer talked actual and and to share that couple number incidences field from going things had and SWAT extremely together. to going opportunity wraps they other with well. level the move first our to – more to ultimately are so the those is needed we understanding to departments, We that increased responder in want has – have now and the that lot us, ago two LAPD a the the we significantly we the to that officer getting happen be all line of the learn but we've from And they're learned calls want We a we've to able are devices the that

Jon Hickman

Could you two? – right they XXX have devices to

David Norris

Correct.

Jon Hickman

tell shipped do – Could cartridges how how you initially? you – you did many me many

David Norris

was everything X,XXX you the it something have I number total training believe cartridges, to or and get I'd for exactly offline… but

Jon Hickman

but… Okay,

David Norris

were the they field trained deployments. had then cartridges couple other and the cartridges for a at each there thousand officers They some of roughly with

Jon Hickman

hoping you're that fast, reorders get So is you're what hoping… you that some

David Norris

These are important.

Jon Hickman

Yes.

David Norris

learned And as devices while we're making used, I something. we think every tremendous the time progress,

make for an need making improve plus how it be to we're it, we go has Now, holster well, The them. having modifications definitely to we're readily what officer extremely learnings product. us a more carries is available around how for working been a to so big that learning product to option, not seems but the

making So a test feedback, taking field. then and it's very kind and the that'll be law healthy commercialized then the – developing from mostly We doing the through doing definitely product, This product this step. demonstrations, SWAT is delivered the next going has training, their and incorporating in alongside went phase been enforcement supervisors. it for of us. They're

and Now, and we're level following engaged. engaging departments. allows with we're we're sure learning our that's It [indiscernible] continually that at line with make of a also lot up to very lot positive customer service us and a the and very, the

Tom Smith

a is if for can them. out to it XX supervisor when through they key, officers elaborate what in our And their this with them case first on It that I or to the TASER with of the device, so weren't the Whereas waiting success ago part carrying have. we the that, was they years I their large were carry were the all carrying MXX. with went product, device, person. mentioned, them, on They unlike show in trunk string have came not as a a with conveniently David it that whole of is officers up other the way here, the a key tools but

car us if can it to early force officers, so sure it's back every a almost obviously get somewhere a is So it higher the use have bring because the tool before they most the for in it a go on aren't and that they there, requires or to – them. opportunity that's is of making go it focus going that they intervention to and time not to level back

the of right really on that's we're focused one So things now.

policy leaving their it and to for agencies, it trial the is discretion their and the the to seal of to example, officer. of are carry some some mandatory And

so the as so can we get to command those field make opportunities to So it carry available that data possible many convenient to uses, at. get to easy we're doing it have look as the and staffs can that on officers, and everything it's

Jon Hickman

conversion us I financial warrants actual tell well And Okay. Could stock anything price the time? one you the because question. have $X then of about warrants above the on period was

David Norris

glad asked really or call just somebody finally Jim I'm question a a

Jon Hickman

Okay.

David Norris

through real just on, paperwork here quick Hang here. flipping some

Jon Hickman

Okay.

Jim Barnes

that's year warrants we've worth reported $XXX,XXX Since in Yes. had end, of XX-K. over the

exercised seen the months have some couple So XXXX. we of in warrants first

activity, future guess. the will that's be a we've price the that And reported. So based and shareholder number stock exercises I upon

Jon Hickman

in expire warrants $X those right? So June,

Jim Barnes

In October.

Jon Hickman

Okay. October? In

Jim Barnes

Correct.

Jon Hickman

me. for it That's you. Thank

David Norris

Jon. Thanks,

Jim Barnes

Thanks.

Jon Hickman

Okay.

Operator

question next Bradley McIlree Jim our from And you. Woods. comes with Thank

Your is line open. now

Jim McIlree

Yes, the expect afternoon. how this thank you have year? us certified many Can with you share to you, of and trainers end by good

Tom Smith

end – instructors to year. we XXX – what, it this the of got By year, this it'll over

number be going because – instructors that'll really again, instructors to number And directly but product. just agencies we'll expanding get this it'll to able of the increase, numbers. the And use, be be that's actually relate So to going thousands to the and continues proportional where agencies the to we of XX carry master to year. number of that's to in implementing the the adopting to to the to are us those get wanted

Jim McIlree

it. Got

David Norris

of top answer the of caliber the on of been domestic fill got it's both group – that and it And impressed whole truly Tom's here and level, the I can here I international with amazing. how We think we've instructors. our this number master the I was and am APM just

Jim McIlree

are? you're with satisfied number the of Or where grow is you expected that And master is this year? instructors to

David Norris

with They and kind we at satisfied of master can instructors master look them. if level, I'm the where No, out train, a you And instructors, so XX of from go have agency do the, a it what at. and Trainer Train course. instructors. we're the the point It's we that, the the per train that course call product. to or two one department instructors implement And at for may the have five-hour the

to with of we Trainer a grow starts master on – doing we master coverage the more plenty the instructors master of the sure time those international have coming increase, then instructors over and way trainers. the as of instructor the market of from base Train not overseas, again, big going XX, for And because have of instructors domestically the But thousands that's programs. consolidation to XX that to need training in departments see train you'll the number that too we increase work really of won't So much.

Jim McIlree

it. Got

estimate Thank countries can that The give XX internationally, you many us you enforcement XX Okay. how those you. are in cover countries? an law of officers

David Norris

enforcement, I can like tell law depending Internationally, it's XXX,XXX XX what I the is X million U.S., officers on can't law worldwide. fluctuation. you down, to in ballpark roughly there's break number just in but million enforcement that

That's – that one do countries country continually country moment. to. the a countries but them not us would now are allow, to the any the be that I products larger only at Department So obviously we our China. get police will The is we not the that Commerce about asked call right XX have of sold

that you officers XX if the United the map in the a of at example, kind an of out take players look one-third So here and represents one there, the States. it's one of country the out other major a huge of as

versus XX again, larger proportion. you U.S. the obviously And in when opportunity a much those in total So the together worldwide is officers U.S. than number XXx it's add

Jim McIlree

I the devices? if or more change any the either for Is there strategy on pricing Two Okay. might. cartridges the

David Norris

No, anything. on costs not we had or have our an impact

the in product pricing So on costing in for changing. not the just improvements on pricing, we're increase is margins the focusing

Jim McIlree

All a driven increases, commentary, about a that, it’s year? you by year. it you for is to – are increase the increases What talked or it’s right. just ballpark we increasing talking this of in just a of sales kind in proceeding back And your SG&A like the sales an get of for envelope. Jim, that's about Can looking kind

Jim Barnes

the it's the we train variable departments, increase of more if you'll be Yes, it have costs, forth. big travel not more a in will and lot costs to a the sum of so have fixed

for by driven looking we're So SG&A increases in not than other activity. huge

So that's focus. the primary

Jim McIlree

Understood.

me. everything. it Thanks That's Good Okay. luck for a with lot.

Jim Barnes

you. Thank

David Norris

I appreciate it.

Operator

comes from Iroquois. [Operator And thank our And question Instructions] Rich Abbe next from you.

open. now is line Your

Rich Abbe

and Tom. Congratulations, David you. year. successful Thank Great

David Norris

you, Thank Abbe. Rich

Rich Abbe

me just field, do treasury based and the saying deployed how you determine it's question. or you that the field whether would on of the in that deployment? How the data field with on what have in being to the the and Wrap? at is of currently? you escalation? a you it kind you the back in been But field look successful in – do today how it success to today do Is do you How with be have based how face guys successful Let ask deployments success – up

David Norris

Yes.

community. that's great And one question. that's So a always debated enforcement within the law

confrontation did we the the in So officer. required is the level way the end used, tool, the at force for prevent of if a success is look the it higher to being BolaWrap field

kind like a benchmark. that's of So

the and and didn't product. that's it a used require So out force, of was came of if higher a it the successful level device use

over And to all of last their example the just there week do you Kingdom, was because I give published they an United in just annually they track support. and

had, required incidents then a a span, over use force those force. And use XXX,XXX being they of of down it So XXX,XXX break in they was think – actually arrested people of those of one-year over I model. XXX,XXX

look had, those that it span, one-year if at complied So we for Meaning to XX% compliance ever was consider they I the it without pulled think success dot taser example, having as an of red their what there put without even they out uses the use, documented in XX,XXX they having just the a device. holster, and deploy on it. of ever deploy to somebody they gained

they require, considering success because the as that in So were of force. didn't case it use that

of the just was think the or XX% UK So that nearly of way by restraint we're force in a that techniques. device, which the was fact device restraint with BolaWrap, the remote I restraint use

terms category to we're the into So much of in going use fit broader force. of that

a a use and handcuffs someone implementation to a escalation force means you confrontation tool custody. in used use take end a talk our earlier use being level So this and that didn't higher of that because demos again have that on someone into being successful from about we of to The prevent of compliance distance. pain throwing this was

Jim Barnes

in out Also other many guns, spray and at and then an all look the department And we use, how everything less often most are besides pepper other seem exact in is than par science, how And reports out this be less of useful, of is used level deployed our all actually users look we lethal non-lethal not in products it are our a the of any on the other but there kind get in idea today a of then used even ASP, how getting clearly, to actually the product the products. do the they field at to those get to is be down tools and whether the that's field. just an more field. try taser benchmark today. many get, tools of, or to be or with seems product that Today,

would and we've pretty new spoke the Some he amped arms are up would says, against to was you know worked the got tool, things better. we when it, that one been a brand but have did though The probably we officer, [indiscernible] as that it. I legs wrapped response he

comfortable used getting So it's to getting They're a They're it. tool. it. new with

that so aim. it because new was they're Maybe easy to tool would. of is using easy more a and The exciting use, so side they other it's to it’s than and

that So more in right is every other looking their they learn seems and over favor now the number belt, on to based we'll have product on our be time.

Rich Abbe

or you if in someone at it way both. were the UK if situation out I know looking Tom, Thank at to would going drops do, look they pointed would use you a considered or out, and is and that you know whatever rolling his to do voice or been be it So they appreciate LAPD a if Did of – and that. who's at does? does LAPD, actual individual him that this be that same that they're usage are you weapon successful to to from asking Wrap? the pull it listens it successful

Tom Smith

and that or the end If used it outcome. without the force be to a day. used. They're any more be then out tool successful going the that's compared had of self-critical ended looking ourselves think to successful a without to there. tool other that it confrontation only We're having ended ultimately that used obviously to vast of but as at it level tool majority the on be was And everyone that's that being use I of force confrontation the was higher But agencies else.

Rich Abbe

guys internally are as that you And attracting well?

Tom Smith

As much we can. as

Jim Barnes

but… Whenever the data we get

Rich Abbe

Do you… give they

Jim Barnes

wanted actually them line they and encouragement fully buying actually them them from gone they what department, actually that's somebody, physical had when today of couple loved giving it's on department one Every to devices of the do. outfitting not a a to they did product is Wrap, because but put their the

still very high we're So rather de-escalation to decisions it's us, Wrap work than the But rate. because Wrap clearly we focused of internally need the very buying on the on act a departments itself. are the making very, at that for

Rich Abbe

that there's based more them on video they phones? question getting Wrap’s the as you actual data it use and private? or is they to – guys LAPD just you individuals it kept been no let they a are their giving but of or they One I'll all using only go. you show on keeping Is happens the Will individuals around something if cell video public

Jim Barnes

they but a very LAPD our let Wrap. and Rothans camera we've they verbal departments. Mike and Wrap actually kind did that know we other for then for been play. call Lee that has And us them, actually of I a many to-date you play tell or team, give usually forthcoming seen us They with have by body can't

Rich Abbe

I great. have look to future. you guys really forward Okay, great last Well, again, congratulations I year. mean, and something here built the

Jim Barnes

next moving the together. a we're to direction, to get call, have you. We're in looking It's forward we so thank good

Rich Abbe

is Thank This great. you.

David Norris

wrap. operator, that's would a say And I

Operator

having So questions. any we aren't

David Norris

it. one more then we that have question and I think was

Operator

Okay.

it. got Okay,

question from Dennis next Lantern. Lavalle from our comes So

open. now is line Your

Dennis Lavalle

the it guys Yes. the because Did you but but bomb my quarter. I appreciate just hear that. in there, I haven't the shelter, situation nice thought say I'm the I just anyway, Wrap that out escalated fact hear about that has any I Wraps, had right. you ignoring it you me, it's were haven't or successful

David Norris

they successful No, they even the Wraps. But by Wraps. we've We're deploy yes, just use that command line considered the when of had successful a laser and set. be officer that a product can number had number also of of the successful don't the saying we've just

Dennis Lavalle

currently? Anyway, rate Well, field thought. us the some in of place that's quantifiable utilization you product can give what I

David Norris

Ask time? that more – say one one that just more

Dennis Lavalle

agencies rate utilization now, device in non-lethal of the to is to or pepper the The compared cetera. et them other product have the bullets, cetera, other early or rubber those as of the have have field the tell the spray that in or place too of in used words, bullets, XXX product et field, it devices you XX%

David Norris

an in you and give I can't consider large many a times really this departments answer of part, non-reportable use force. because it's

it. don't we always So hear about

know. don't we So

Dennis Lavalle

good Very Okay.

Tom Smith

UK they where mandate do I because tracking U.S. the refer to the there, doesn't. the

ones So hear large for may it with tangentially. more will the a we directly never communicating agencies from usually or be It's we it's that the it smaller us. lot us, of hear

Dennis Lavalle

Okay. you can that And do is information, then online or the get you – UK team? have

David Norris

that No. data They online. publish

document actually force be that of search was published of through of updating between that use XXXX, so force XX couple breaks next a down agencies their page they actually, you date forces in months. goes of XX number they'll it's the March XXXX of But the here If use in April through that Wales. a from how of use they of different that in England, report ways, again

Dennis Lavalle

Okay. of Very shocked good. And hell said of that the you something the XXX agencies, out me. enforcement law

car they the the back to it, of when is came to et maybe first to get cetera. taser trunk the out, that go had And Okay.

so Just doing. you from a doing you're that I me is serious? taser let stop can minute, what get I my mean, out wait,

David Norris

Yes. Yes.

Dennis Lavalle

they with not Are I they're and that. not that learned are BolaWrap, that doing they've they? the thing, they're mean, doing same doing the from

David Norris

doing some have could still I learned, they no, agencies I say that. wish we that but

and on call the timeout and why – tool. focusing So making out, on options a holster we're it's carry sure pointed because officer there's go back not with and that's they he's the can't like get

the to make we're the in on car, was person. it it to making sure trunk whether or So in the we carry convenient need

Dennis Lavalle

for consultant something should Okay. convenience? put of a to their use don’t this body the worked or I and know, ease out And you figure with hell on where have they

Tom Smith

for number of tools. are in specialized all holsters different companies kinds a that there's of Yes, manufacturing

with we're are companies doing So same. the different departments or six the five now, working right including

have have relationships So LAPD, as example, they an that prefer vendors they their with. and

carry aspects the it. at on a different So of from to the it's coming number leg it on and ways belt. vest, holsters, its Be

by and us end by users. at looked being it's the So

Dennis Lavalle

product them are officers? not agencies the you my Then wasting whether giving my on in belongs to by you I are you or paid what but sort agencies that, XXX price? wasting shouldn't of the it of SWAT those officer's it the or because that? percent the usage. law law that for with, line the personal enforcement to some their many opinion, product final can That's How is XXX the superiors give gave hands to or they color placed have it, question Okay. but agency get of say it putting line enforcement

David Norris

Just miscommunication question. on this cause want make first clear. to some I one's there's the sure

goals of it is actual We holster that options belt our single one every have being to every have it officer We their are on today. it refine number of know a in put obviously those don't Every field. used the and same on options continuing the holster We're often. because belt not. that number of to utilize just of or the

level. leave departments optional Some it the officer at

officer and they're they the how going and carry it that them carry to it. exactly mandate tell Some when

So it's department. different for every

Tom Smith

this tell departments the can technology. other any they'll go your to guys. test of internally it's answer I question I XXX, to going level their And to on then can't you SWAT right – just quantify new the that. team some policy, the departments, is And it's that line

new push this of a on depend that's device. going just restraint benefit our going because department the from how internally, technology. remote their that's to obviously most handles really type that have any the to is of are But it So evaluation the it guys

Dennis Lavalle

for what understand hard don't you the I But thank I I do mean. if Well, Okay. that. know and you I guess, I work.

You wrapping guys away. keep

David Norris

We'll do.

Jim Barnes

because… wrapping keep We'll

Dennis Lavalle

guys. you, Thank Okay.

Tom Smith

world. Product to mark way leave on that’s great in the our the

So thank you.

David Norris

as that we we hard as it officers. highly, have And can the they again, recommend, highly, on highly

Justin, questions to thank turn So, think operator. the but the it for and back we'll I you

Operator

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

David Norris

go thank it operator. so and can wrap ahead you But actual just remarks, very much, closing No we up.

Operator

Technologies thank you. call. year conference you today for joining for us fourth XXXX quarter And full and Wrap Thank

may now You disconnect. all

Wrap (WRAP) 10 Mar 202019 Q4 Earnings call transcript