WRAP - Earnings call transcript Q2 2021

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Paul Manley

Good afternoon and welcome to the Wrap Technologies Second Quarter 2021 Earnings webcast. My name is Paul Manley and I'm Vice President of Investor Relations here at Wrap.

We will provide an update on the progress we've made the second quarter of 2021, our growth strategy for the future and how we view our mission to lead the world's policing technology, training and the de-escalation of situations requiring restraint of non-compliant suspects. Right now I'm in our 11,000 square foot manufacturing facility and headquarters in Tempe, Arizona. This is where we manufacture our products.

cartridge shipped and packaged. device each is and assembled, Here production group by and put The in each the of enforcement managed for amazing functions in ensure of flawlessly product hours field. who facilities are officers people an talented law that dedicated hardworking the to and

We are extremely their for grateful dedication.

of our Glenn today to And Officer. in our I'd like the Joining Smith, Officer on President Financial me call who on Team, and July Chief our the our newest Chief Operating X. member introduce Tom Hickman, are CEO; Executive Jim Barnes, started addition,

question-and-answer Following with our prepared remarks, we'll and conduct a session Jim. Tom

you not You to chat to from update any to to like constitute and today forward-looking as a Act within cause over earnings date like this at Harbor to do statements uncertainties statements. of the could and call you, obligation unknown question differ tab Private certain we forward-looking that forward the not button. today of SEC. to to and known any statements moment And in actual The release statements meaning press Securities looking provisions undertake are the made uncertainties use of remind the take forward-looking made call, and during and statements. turn do Tom. now risks please the I'd and amended. the such Q&A materially webcast. the Such results of with pursuant may risks With the Safe both XXXX, that ask These so, are described as to our and and are subject in bottom the filings our on the I'd the time a made the to call that during of of screen statements your Litigation

Tom Smith

Paul, good afternoon, everyone. Thank you, and

of you joining that today. new thank to story, for those our For are you us

Technologies to and enforcement As for be solutions safety training a law the forefront of continues driving agencies. it innovative and technologies Wrap a officers to public global other be pioneering privilege and services, global leader on for in

you and the those the along, foundational We're on to who progress all fast executing trajectory making of us for growth to with that policing every continue the effective report in strategy demand. de-escalation Everyone you officers worldwide. our of your following deeply platform driven training Technologies unrivaled I'm is sales providing believe to agencies hard to For mission for our have consistently dedication pleased educating and with some developments day. exciting growth the remains and early and support. been and We more intervention ensure safer solutions. an by right financial mission devices the at live and place time is securing moving our that company. technology and unyielding seeing and in suite strong at for our of We our Wrap accessories. thank product work We growth right we're

the that the valuable all we are front lines help known and save what on confirm agencies our along have As can lives. solutions

US scale with way. faster smaller the based orders agencies, orders overall since longer with cycles enter agencies as has XXX revenue a This sales or these fewer levels in we as significant up us cycle important of These quarter, agencies. our add This approval. served officers police and generally less. buying is business a continue source have traction to meaningful of for have translates as we larger those the a shorter gain sales and which are primarily For to with typically

situations. of which Our during actually body the videos life to bodycam our wrap real BolaWrap success be with is by of deployments, actual agencies field effective see all continues bolstered to officers crisis stream enable sizes how showing steady

many still continues in person, ever countries products. which most the Reality, the business international WRAP with are to our are and limiting effectiveness which demonstrate sales important headwinds. There the demonstrate ability changing despite BolaWrap our Our to to travel is grow restrictions, of COVID-related effective COVID way

However, nicely. to this headwind adapted we have

increasingly with educating our Reality in We interest pursuit the to BolaWrap strong marketing industry. and generating and are WRAP of the unrelenting

As a progress. team make international result, continues steady to our

early As to do a linear. stages, consolidated reminder, remain in not these expect our we revenue ramp

stages timing orders is ahead. months, see large lumpy We In larger agencies Wrap of have growth a had We and agencies, for take our addressable Depending These we but a weeks, from longer representing we a X% I believe US have number alone, of revenue stages pilot the our than believe, devices ramp and a to mid-size of year-over-year, can tremendous of will and the in programs. less with trial close. could growth agencies, rates quarter-to-quarter various in in the massive opportunity in the growth of early runway market. accelerate. total long on only

Reality notable quarter training this Another platform. of WRAP area is our progression

vision robust to for reality industry a our Reality WRAP already virtual is is leader become enforcement library Our global training. law and

of immersive still officers. in are scenarios extensive out building of We the police catalog for an process and

Importantly, products. go expect our simulations we to far our beyond

market. the valuable other XXXX, library target our expect at consist which face, rate is by BolaWrap, opportunity of making in involving situation that Reality of an hundreds enforcement their but home training solutions to media, projected ever law in approach without training our more not situations research leaving a and potential the market available for for at believe to better including commands better driven tools is training are training public the annual scenarios tools reality all officers virtual only government, across directly exceed large are market or versatile We XXXX, growth $XXX believe verbal heart addresses and from and simulation that know precinct. has cited We billion action. spectrum. by and for community WRAP Allied a XX.X% to police the growing the for and help officer accessible officers XXXX compounded calls part We at to and reform of policing. of the real-time demand will military any prepare our training of essential is may center the can We the

the orders. for progress ago. evolves, reality believe and a as confident any four because trained evolving fit grew We'd it highlights. preferred to and a quarter. from That's we This over some important WRAP platform to training nearly agencies We officers now from this our a times metric quarter our notable share virtual XX% situation, our for up Reality serves police year number our become XXX. solution environment. an perfect I I'm first operations As training is is sales the to leading the for move indicator will US like of

the the million US. For first quarterly sales in $X we in time surpassed

expect newest are linear. top to grow pleased our Although mentioned this Nevertheless, years line the not as into with I stay future, earlier, we we we milestone. to this growth expect do

Our growth device, on two reality is the strategy is is other technology training the Reality product system. driven our synergistic a virtual BolaWrap lines single WRAP by platform, one

potential meaningful While integrate for point recurring they as to of revenue both service, generating a a an with designed customers or are seamlessly entry standalone the of providing offer new value product stream. easy exceptional

success lead a and with have products. to that the other of for be this generator one goodwill expect as We our officers products, will

word university internationally. and college BolaWrap believe With visual and referral the media security, and penetration. a military mouth deployment police, a spontaneous strategically the our or field to attention. life as which out triggers to the private appeal approach is real include target proven from of are inquiries in of Both BolaWrap, growth sales. large of through We agencies and drivers We spread social geographically, well seeing of campuses, domestically and range diverse across both small as market

new we customers that curve. metaphorically business of eventually as We or planting generate similar our referrals our nearby from are early in agency agencies. think very the will stages other new growth And seeds

shows months. old major law and to attend trade the customers rather short of conferences a opportunity conferences US over Additionally, provide enforcement in-person demonstrate These virtual past shows period attendance in These and trade are of the we prospective with at in hundreds and XX or the to returning normal excellent now and internationally. an meet than time. several to equipment exhibit

We WRAP Reality most restraining centered a different library, XX training wide is and Our countering virtual subjects. range of have in service immersive system. are around Reality in WRAP a our reality which of models highly currently non-compliance

XXX service, Agencies collective for we officers experience that offer. growing enforcement One immersive reform. models BolaWrap differentiators which for we best value the is training revenue for attractive a our US towards structuring degree most police agencies improve enhancing first stream WRAP and just noting continue we for the of the combined Wrap, for providing to with It's from getting library a are our also of of it to Reality as cost agencies Wrap. realistic subscription and their proposition recurring our while law cadet entry training to throughout the as are biggest At When provides lowers retirement. an step we're started. ensure worth

continuous While BolaWrap of our we services. state and and of have devices WRAP innovation new and the and to Reality intend development art, current are potential

We as that develop, acquire aggressively and working and our strategy. product's training or are leader upgrade recognized are to and escalation the committed provide marketing synergistic technologies to a be distribution in to fit technology, avoidance

when I a over the Officer, I'm of On little member Glenn were both we the Operating ago our XX the Chief product development, executive subject nine-year where in of of pleased newest size career a introduce our products, to China. of the Glenn a Hickman. Research TASER. years a new the Development, team, manufacturing recently, Glenn Vice doubled product is President there. presence he six had and hardware of led and Most established launch the team engineering he met

years, and more responsibilities MBA two to chain Glenn. our at product developments. immediate management his well as will spearheading Northwestern excited at welcome Wrap his him We be engineering, be could operations, not as University aboard, past the research Over earned new supply and development, and he

Glenn Hickman

chain, the The started effort. Hello, hit this recognized we to is has here. the am With to levels to professionals, every one assurance be and match technology you to and I've as strives for ensure we of and one dedicated always and revolutionary early training. a of era Everyone reason to I'm running. BolaWrap will remain track the excited the Tom. potential quality best to the you, workers. continue technology supply that The with reach this manufacturing excited control. its quality management fullest to landscape. our outstanding Wrap team is achieve about I'm I I effectiveness, on to look that the yesterday find everyone. was of team new time massive. frontline disruptive on I down its better time volume, can we opportunity Wrap's I restraint delighted that the number mandates needs do enforcement of surpass And or join What believe ground redefine scale of from the pleasure elite road. culture. which With our my human July manufacturing of the it strongly is can the our wanted I to forward and believe is X meeting I company It's be many Wrap. to this and join a part a customers. R&D of Wrap highest as crew level. and and here law scale now be to delivering to is than of Thank record

early received like of in to show an we of that would the Ohio. success recent our BolaWrap [Video in bodycam the Presentation] one I Now June by highlighting more agency videos

Tom Smith

the chief access Schaefer. of apprehension a of that tool a levels go tools used the compliance of within bodycam is making points is This officers, us and we officer a Those higher force is, But escalation just a on firearm, to used to on to powerful higher difference around early talked pain levels show goal of prevent the to out be frontline able have the highlights force really not can that's incredibly prevent a just lot we videos the the And to really how taser, department, to globe. that's those or for to there. that. it's like that chemical are or baton to deployed force, Chief to every way our the ultimate obviously, the you, And BolaWrap Thank having long escalation the being this everyone frontline because an is domestically, like spray. about. it's goal, be but

these are to that highlights. get six things over So it's these great And a difference really continue we have really that state points chief months as bodycams. for made the the us last

talk to really to itself somebody for because We go to tool won't the talk deployment, we wait wait back it's have get continue used time it continue in pay full or bring they interventions. to how be early And to those has to about about can it these very to quickly this someone officers and on it. frontline or for for car when

So all the makes it's chief points company. that the through messaging now doing that carry there we're of that a lot really through really Wrap

the So back then results discuss and and right over further call now will back our I'd to like financial come turn Jim we'll discussion after Jim. to it have to

Jim Barnes

Thanks, of Tom, XXXX of Glenn. year-to-date XX% for a $X.X year-over-year. the compared of XX% to million the of increased XX% $X.X second the quarter XXXX for and revenue International XXXX of year-to-date XXXX. second another XX% a revenues for compared We for to over International posted for represented revenues year-to-date increase million, quarter welcome months had six XXX% XXXX. represented second performance. aboard Year-to-date quarter solid our XXXX. in We financial revenue revenues growth to XXX% revenue first quarter

mentioned, know past Tom I lumpiness spoken As the still we over challenged quarters. international to several is is want negatively worldwide, our contributing have impacting you and the that revenues travel and about to

of And international to international revenue four chart, be the you in see forward. growth QX accompanying major increases as over our the the XXXX on expect a business part steady of continues We can spite quarters. last going challenges, of

QX gross by line the Our production margin was impacted for planned change.

to the the gross non-cash prior XX% comparable quarter $X.X a our quarter. in year line XX% Excluding for of was compared onetime second product expense million, margin

new included QX of Selling, non-cash Our is and product costs, one-time to a line innovation. gross based efficiencies, expenses production including scale, $X charges. improve administrative share margins of goal were $X.X combination and and some for through compensation general million QX million

personnel approximately activities. of indicator million $XXX,XXX these for domestic and several QX expect compared a factors. next allocated demonstrations other quarters, mentioned to expenses $X.X leading as believe future and changes QX, for and demand Research training, million experienced before, sales. for the approximate expenses of QX non-cash to we to We also $X on to In of compensation included in We SG&A SG&A Tom XXXX quarter subject a $X.X vital trained million increased development XXXX. are and of agencies, increased

believe have opportunities. development initiatives respond We and XXXX important increase as expect research that valuable to expenses to we somewhat throughout market we

in in ample short exceptionally warrants exercise term and that, call During were the second quarter, we Wrap flexibility. appreciate Considering financial XX back our $XX performance. I the was X.X With commercialized million financial by excellent our that Tom. million will our BolaWrap sheet, our and investments in team. June only strong million I work are for with turn and on cash $XX with our cash. reach balance finance With the remains satisfied to XXXX, position provides global

Tom Smith

Thanks, Jim.

over related nearly officers December of train We and Now, is from had XXXX more year-over-year. XXXX all I'd XXth. three-fold their XXX% metrics up a in XX, quarter, to second departments, the you our which like to a few as increase provide June with to progress certified

states have XX and Sentovich, From States, Jeff are sold We Kevin governance in to products the directors into four Sherman. countries. have we with a breadth perspective, new a XX Kim Kennedy, Murkowski, shipped wide added and of recently experience. TJ They United product

join We our them are have fortunate Board. to

been also a corporate an that recently of Board was was the to Scot keeping addition, Patrick of Board. engagement environment the independent human ESG TASER's We in that and Compact, post. Kinsella, be to who Chairman, experience improving rights, member efforts are Wrap ESG our Board We with six Principles of of the communication. active to transparent area. entire and including for practices in our governance suppliers, to elected initiatives, inclusion the continues Nations on our remains and by best continuing effort through In further Global we the program, our labor, by business an operations Cohen and launched in Executive which an with relationships engage as activities Board to our Board workforce for We advance sustainability our our United strengthening our shareholders adding I that and XX and practices. consistent of published pledging anti-harassment anti-corruption its training Executive guide has primary in diversity joined my and completed code ethics bolstered their incorporate monitoring continue reporting goals. named our and is recent years. in company. diversity serving June, bringing Chairman intent

continue We progress superior our reducing financial with and delivered record stakeholder make and strategy business model to alignment, value, our purpose, results clear environmental towards in we And value. impact.

I'd like a that quickly the can to here confidence extremely Technologies of we and I to scale in special. the are Wrap delivers close, I visible with solve disruptive law that at intimately successfully I playbook my and problem. involved well enormous have technology new building Before industry degree high and commercialize something this reiterate help right enforcement. been highly to an platform time on know is

As always, Thank team. my to final comments you. our are directed

Your as together are work we positive change endeavor greatly the hard skills, appreciated and attitude, to world.

our making are is Presentation] paying and After second difference question-and-answer now, moderate to quarter. Jim attention. our share would Question-and-Answer Session and the the will video, We video Right during I me. a [Video Paul session like activities our with a highlighting world

Paul Manley

that much right, hope I you that loves team as All putting our enjoyed video together. as

three publishing and please move like equity if we like analysts on portal function. that Q&A a the Wrap. the We're the are via question-and-answer remind would to with going you question, submit I'd it the to and research chat you As of Jim, our portion not with Tom now start webcast to who ask to

Jon. from go Thalmann. Please will Ladenburg ahead, analyst first Our Jon Hickman be

Jon Hickman

stuff virtual on you you and on Tom, to use purchases with, more if want. revenues in you the they you us down them BolaWrap determination ask you could of answer in was has the they're so about for the that me, if order question the going between training anything break granularity of Hey, activities? I whatever it then I reality to tell versus you us the link any any can give And do that's if with, actual training, can question has make three second any do have know you last That's could and can BolaWrap Paul? the from questions future? to cases, My getting wondering LA, kind my equipment? the

Tom Smith

Well, Jon. best I remember thanks, I'll through go try And them I'll those. and can.

the So has not through LAPD, on August or I probably out started LAPD some believe first August, was them one September. working regarding And streets internal put yet. issues. getting They're early they'll be the late in still

don't we So because They've had obviously, uses a they're replanning. on through have shuffle going staff. retraining and there, bit quite any of

obviously So that everybody on streets we're back May, them basis. keep one very actually they that we'll there. to talking trial. because until them and year And that's get obviously on the in begin informed regular timeframe, a question approved the And doesn't was

September, So in it let's from year September go September for one then 'XX. start would they say until 'XX

them So was upcoming. next the we're working still with Paul? that. What And that's on question,

Paul Manley

breakdown reality Bola question The between Tom time? at was and the the second this virtual revenue the

Tom Smith

question. Yeah, great

WRAP there's associated quite now much with right Reality. So not frankly, revenue,

trade to Police some here Our speed, on to it of is coming that going show IACP, on are up the which more we're September. International that focus We've big now it product got right be announced of a is have in called getting going here. up Conference integrated, Chiefs Association getting things to

of to get College agencies on different we expand. that to Reality to want WRAP continue sizes. working improve on to So we right select that we're and want And the of now Wheaton want feedback obviously parts various with

product bunch will us in with we it out. we've So want we've not the field of it on focus and these again, to we feedback we on they're as about And enquiries it's the for announced, a give revenue don't to got lot different right us that getting into just obviously, going is now say, where that with lot ramping sure over making even roll so as platform. agencies that I so over be be, subscription as that it of it that the it to can working we're are also domestically, well, multiple up - spread years. it a model But would really and 'XX, of globally very be for we out that a expect here the excited next

we Reality last ship lot five So quarter we there order, business be it is the subscription be gets like then get a WRAP five means where It's BolaWrap. revenue we a years And can year over a revenue of model, over each be purchase won't upfront, that certain recognize period. PO-based on ship. in right we when and a cases to on time now, that going which recognized that question? and

Paul Manley

can And question, talk was, the training. think the last how about I you

doing purchases the of we're to All training the currently, enforcement? police departments in how does that that lead and law

Tom Smith

experts, question. that's agencies us, Department go great that the another because the those these subject relies tip the the spear Yeah, of experts oversee are on, training, the program. to because for And have matter through the then really to

our be a relationship, with are metrics this. going us getting agencies those as the really to look for adopting trainers, key is work our we forward officers it on those trained, So that

And to that curve then terms then into going of in once the getting talking messaging, see So We've start is lot these frontline accessible. us bodycam officers to our they'll back are because the a it move they're And number about as daytime, scenarios, these ahead coming of being really what's always we the purchasing. trained, XX a last the indoor, different and trained, officers and video, if to really, officer I learned the having over let line. those so is show really to nighttime, outdoor, agencies use get bodycam months we or during product videos the following been smaller goal about lot to excelling videos about where our mentioned, in these uses. us, on to change noticed you every a front deployment the you've really to full is

those car, on pass. it's to things we're window or And if If for the having the to getting to - it. about going heard that use with trained is and to officers have the that talk confrontation it you in the apprehension in now to use lot to really And these that to officers the is of impact. consider force, it other message carry focused focus It's going you lot a most it is you that's your Chiefs an it. the frontline of one don't That's back a it outcomes, of considered through level where like really opportunity tool, higher of it's them a use use wait getting of even of pain go force. the handcuffs. to will the And be then tools early of have compliance videos, call

So now a in it a that more led inquiries, not and inquiries, in And field. we're use being where long and it's the used the staff over especially more accelerate. we're used continue out we're way be as by last inbound videos really and it's to to being more force purchasing we getting more there in used, months trend, seeing being and show few inquiries, qualified has as and bodycam more have frontline the more that the that how seeing command can it change of growth officers, the continue that's those

with of So I all was Jon's think questions. that, that

go So you. to Paul, back we'll

Paul Manley

Thank for right. very great All you much, those questions. Jon,

from Maxim go Please Klee come going from Alan of Group. Alan. Our next questions set ahead, is

Alan Klee

Hi, Yes. questions. two

little into on related your margins, could if working maybe for second is just you. about manufacturing? your what market improving on on you international, added And the getting costs think you. is the that? now, Thank you to up maybe a question going you little detail is some related to of us that that focus talked to the from timing a then how question opportunity that? And where Could bit is you and think go you First give open and is more

Paul Manley

why with the So Jim, you don't margin? start

Jim Barnes

Sure.

talking made and that product of adjustment We changes, line that his to part and that team, Glenn a we've expect very to been is Glenn be are than we've long product to working activities. make closely we changes, those margins to and And XX% term not achieve tooling his related both changes. team goal. greater the term, with goal with working those was And our asset And about. near

working we're that happen. quarters. see those closely to make So the activities you'll in upcoming And

Tom Smith

variant was and And obviously around delta this the new ups next And markets. I is causing question international think downs. the

get Zoom key of play. are trainers travel the our and to visit also distributors we've had to because borders able doing some into to We came and our restrictions are overseas been go And back to some and relationships again, I having sales been them factors the then demonstrations of activities think the local clients one of support these that to still the the able department. being continue international the has growth able with that revert

not on my changing opinion that. I'm international, So

them the go on certainly be go we not our the to more and these do business more and forward. it's, to It's in person. get believe can because to we I lot majority as going of more more with lift, that's executing just accelerate. that and level still going we're it's raised as there. getting a think of here are difficulty able But to Obviously and vaccinations we borders and I strategy

a are We times mentioned, that goals are those the getting some the well. restrictions of I And personnel because looking overseas in well, terms in the half meet around as of at of inquiries international WRAP we're adding second as help lot a travel. going US to Reality the the are the lot also hardest as year of

get where and I going So is really opinion my not aircraft many in I we been with only are It optimistic pivoting, the and trying again the internationally. not there, it still there. freight the be to shipped market. integrating a actual on a the that team's to demonstrations still travel for to job into and the enthusiasm Zoom video products. also doesn't of big challenge that's change done think us and most But traveling to participation we're it flying, our it's as freight pandemic wish, There's as Because on international normal shipping navigating forwarders. because back as great our again, to been overseas, presents do, - go would a us really of effective very as really challenge all we've business opportunity. in our that the doesn't remain well. let the And international we start working so I But is just can get distributors it that. successful freight us demonstrations this so

didn't know questions. if I any had Alan, you So other

Alan Klee

Thank you. I'm great.

Tom Smith

to back Paul. go we'll Okay,

Paul Manley

Alan. much, All right. very Thank Great. you

Capital last set from will Markets. Our Greg. of ahead, Go questions Greg Northland come Gibbous from

Greg Gibbous

in any Jim, Tom, Paul, product demos maybe the I guess for the you me, first and the with sales Hey, I basis? demos a guess product how or quarter pace, within either of Congrats taking the does compare changed departments could again. helpful? has way, of share your thanks on on questions. anything be guess Great. for year-over-year I would July? there number the Or into record

Tom Smith

Yeah, great question.

So several a year, talked did obviously, dip. times. it last We about we've see quite

the bodycams in-person certainly trade that back of attending that going would Conference that has XXXX. say In kind some seeing still same was levels huge of of our now right communications, FBINA the month from the fact, last requests. it now the that the really show mentioned I of what's streets. in kind back it inbound showing has to And were the kind of show one been BolaWrap had our the things zero QX I've going really I it the pre-COVID a of these also a people the are held we've quality at were you are best I used available. Orlando. that years, the quite getting, that marketing was - about now it. kind that with really folks and when bit, the of all it that see believe can in There they trainings month. I of April. officer And that training to to of the it company We tell being shows. to made we're in just been It's trade you're a us requests the on comment because bodycam couple we're it. was profile a the of year previously having for demos that the frontline scenarios ago, a in in to of number probably making to and shows difference emphasize quality number of of in talked several it of the in are called videos and a demos because the also changed seeing we're and attendees, went increased. where the different in revamped But

continue those I the things all momentum. been think to coming together of have

pre-levels say up would long your basic are here¸ answer because I I picking was so terms and as before it's back original it that well. volume, distributors the And to in of winded to seeing

Greg Gibbous

to good maybe seeing in grants too, with been ask about know great. Yeah, Congress wanted talk some that's guess now you've if purchases support could any anything I Okay, if that. maybe to on funding related of to working might touch that on side time you're And or Department's BolaWrap? federal I and anything wondering for the things? hear. just the then legislative you changing one way I of

Tom Smith

which equipment. out past been be been number doing clarification working we the of which for about release we've put we Byrne be House's make then And obviously, our an purchasing lot Department that. used, did out that with over we've And used the we're the grant recently is well, Grant, those a JAG sure so the in putting Commerce year, through can referenced, Committee, that inquiries policegrantshelp.com in a their get report to of Appropriations a enormous the work included language funds under been funding. getting Yeah, can We've website. of

side, very, of with as level, Police attend and House if with a different think with the showing on lot in sides Senate them in Both staff good they'll at But a products, done if dug been don't Bill. side we've demonstrations. that. very are pretty on some Federal in the communicating job on stagnation So, people the lot talking I them, past of the Reform qualified our there's to get do, getting even well and immunity. know both a around ever I language as the they differentiation

one the during video then her the she one actually representatives the of wrapped highlight of we video, the where comments House and this saw around floor You on mentioned Reform actually Police Bill. in her the

included think national in they've able for to what's our excited conversation and out in at of we've been very, do both very engaged about And that that report been are being came growth that's XX,XXX Congress, to Senate language and XXX out. of make only our sure about I'm and the with very company in we what so a exciting agencies the with So stage members level that I the supportive. the

Greg Gibbous

great. Okay, I expectations, you're weren't the but thinking me, Last official just profitability, guess, for relating forward. you just know about directionally Yeah. ask I wanted financials. how to going or EBITDA to providing guidance, one

Jim Barnes

I'll jump one. that on Well,

that So above now goal question many that XX%. And Glenn we're, not talked and to equipment, changing our I've only of about contribute been the to with joining And things that. before. all going And our production the getting those on quality was operational times. we really one right focus margins is that the of to enhancements is the things R&D, about get asked products, a are

well obviously, have tremendous can sooner we if to potential going than flows, and a get cash get we on it's quicker. opportunity is profitability goal on later. our to And impact as So to as our that when

have it that Obviously, invest very the really use So to. we come cash getting really, looking our want goal those it where we a once in impact is company. company going of those need can investing the that the balance and we to, future short a us up. to wisely margins cash keep so focus term going we on those on the then again, we're grow sheet we're allows to strong to to and margins But as have fiscal on that's at generations responsibility work And and up, where huge technologies.

profitability because margins our have to short give to we're that's can't what say focus, can going cash. see on quickest the are that of terms I in going a specific but the the So on I term yet and most impact immediate

Greg Gibbous

guys. Okay, sure. Great. Thanks,

Paul Manley

you much, you've Technologies, that all over time And - Wrap for you to three you Thank the Greg. support covered very thank of us. your very of

to questions first questions But have come have that portal. We on answered submitted three that by start have to going been of have do the we're go analysts. with through amount the start one. Now, we'll the a we'll already the Q&A fair here and

language one of in more Smith a Report talked it I the the again, you And that - and A report that is the and Tom starts that rolling. have police House says, reform Wrap? note what first The Yeah, discuss to think think briefly. Committee benefit can coming in we a biggest Appropriations is Greg, ball the to the is detail, kind language why and little about in, bit thing I here

reality discussion generality language work training, are Appropriations there, saying, is very that the great never that that included So recommendation the in what in that's out of And being a name Committee. because the the include specifically, sentence having we comes of virtual company we're that they're with us,' that the It's restraint effective. with. we're remote around obviously for 'humane is that doing. to Obviously, conversations of getting so going

as back in included So in we're language in involved now approvals in for appropriations Bills, come they actual and by Report, the that. that being

a So lot been it hurdle that, would try if and part been we have had a bigger included. of to not get

last included of we've great the overlooked, with members think that to see when in was that to allocate the it - with were just work make sure we of part done year the sure and make as be I in that. that Congress the we're start they funds. of that So Senate the there. was to that forward conversation can't going members over it And It

Paul Manley

Thank you, Tom. All right, great.

has few and is it ESG an them. elaborate as and further the you a Can a come also that in, why for you one actually of company, community? investing for important Another

Tom Smith

so him. excessively in it any or in BolaWrap having it wrong by getting [asking] from that company, if through people we're individual viral video even here pain stop time, our in much term, used our that played during happen, that roll the we to to impact this that social to we video. wanted can no how all important you ESG, from situations. our bigger ISO me XXXX:XXXX. becoming obviously, force go or company used hurt just and natural the having that the them from the was process, us. device Sir, just the or There's out, suicide in watched into that our able corporate there good we year, sure the And preventing are not the defines compliance to make next and becomes shoot at almost wanted that to the people want went really And BolaWrap 'I kill police is ESG having because on use the impact, all And than, were manner, probably in to cop,' other He he earlier wanted was it through and have better trying they citizens, and looking they that extremely which for members this in incorporated culture, ISO of as included day. aspects. We the culture the is certification, ingrained involved we for are a

together to it's the couple it's to that with sure partners just environmental things that that the you really us in focused it's ingrained board our governance, really and culture. we're help across when it, out corporate we're on, with then So environmentally the really again, the reaching making

was we're more the report with even getting through on have weeks couple it first and of approved next all letter details the so initiatives And it. excited we about in And do a or accomplishment. the UN. really expect another That our different out on to

we're proceeding way organization. an the about So we're excited very as

corporate sure with So making ESG the we're a it's very partners and and world good it get sponsors then we're huge also making companies impact, to as few change our doing initiatives.

Paul Manley

of margins. had All in Thank about you, Tom. questions gross a right, lot We've great. come

I think earlier our we on conversation. hit already that in

our And business one unless on talk can I So to we and one discuss you about lot skip are you answer So and I a further that seeing want effects briefly anything. that questions the COVID will about in we any over did improvement? that. Tom. of add coming comments, should think any But we

Tom Smith

on through a when right, delta in going and we're so country more each to restrictions, this touch our is markets. continue of But again, they're so deciding, support of that think It's lot our monitor did continue able to the it's then we domestically, is up we've variant it, come Because not. able sudden, relationship hurdles trainings. demonstrations, growth continue of been - to able network, our all or the a to to that in-person certainly presented and and because having to them. a you Certainly better, in-person ease been it at that there, whether distributors it's and allowing shows what we've change been lot international get our challenges, and constantly people we've to

As I pre-COVID domestically. gotten kind have levels said of those back to earlier,

Just internationally, out great the again, there I continuing team's a done distribution but network job. great progress. that think, got We've a that's

to does that. as keep obviously think on try eye an really team's we that good something is And it - with and a it's I watch So that. and job daily, done navigate everybody the

Paul Manley

lot networks, How Tom. network I on our this and what your distribution And speaking a big a is get like? basis. weekly look distribution does question of force thanks, Great, sales asked

Tom Smith

in that the to so we people field. [ph] things of a Yeah, the had done before, at job, used I've network And my and million. one over XXX XXX grew previous distribution at we TASER, about

XX% great a it of them, XXX an those by those do is can all just, team. XX,XXX their with kind XX distributors our those own, same our have distributors XX, out XX conversations boots format ground agencies Because talking it here, XX distributors another through out would call domestically. less salesperson So our those agencies. be for But to and our XX, which relationships the can because regionally we having on small over it's are exponential ground, using go on now focused, than so roughly, distributors officers number we a these doing the cost have And people we're very direct high with have the partnerships, distributors it's we are more XX, agencies, of have to on putting to of officers. using those or us them like more that Zoom are to that XXX through on again,

it about, dozen little the level we've the chiefs, a between more an makers. a does decision Typically, work rather then than distributors at much because bit marketing, and And are XX,XXX exclusive our internationally, couple made international. basis. ministerial So sales, XX,XXX differently, on that's of internationally got we those domestic are decisions here have

but there our there And these with does different ground outside XX the of a sales, the then and that So folks support. we're that are boots the shows. couple visiting sales, programs agencies of then telephonic dozen demonstrations and trade the really attending a lot on the between our are two going during with in-person distributors, excited partners. with sales our domestic Again internal marketing, and

Paul Manley

training. the you, of coming Tom. questions in VR lot on thank A Alright,

for We little can the how have the Wrap? buy the doing And of further system? police sales, a kind departments is talked you speaking to bit, market get to of about see then discuss you what but you're big

Tom Smith

taser, was do going they years questions. latest side the not of again, came BolaWrap, to to great in market. look even introduced. was technology But that company, enforcement that general, The that quickly. Again, law a at you change So, the weapon technology XX the ago. It's the is market one if be huge with on last over

so when training training. in also enforcement, years to know, did there budgets. in have enhancements cuts, And general, law And the you usually the they at they cut thing budget XX very But train you that they in when way first ago. similar is overall, gets that's have been look training,

So difference, show training much immersive, going to huge we're to now much that's really make a cost more it's bringing a a we benefit. technology can

more officers immersive coming the gaming The training on generational more officers be the going especially And more the platforms, with reality stuff with to can in be in two that much they're adapt a the the to may of hours familiar training. to So are do take younger setting. take we that content. with in the going in change are virtual comfortable XX virtual minutes, classroom reality

to to in to something be going the it. overnight time, going involved it's not it's think opportunity So but happen that's I take

this. is. use from have our the now beliefs some giving you that that some going we're an partners big that all market want getting the talking using and And feedback opportunity. But the really agencies it and just the this feedback to And right officers I'm agencies forward. I we to in are getting give this of these this are been see the can't tremendous to positive people with other equipment that about really and studies. has references really the the with want exciting that validating we some how we're is response are

expectations high it So we to don't to we very, make I work roll market. it's sure get it out, very want if because meeting and revenue We want want with no don't the they on then their it, set exciting it's right. the as to use because of very agencies it's benefit. to needs great

what models it's going that out, make those it's that's using to gas to great us. to when and up the that got subscription do rolled make get meet and the that And we've we needs that turn we're they're it needs. sure their it going So - on really and getting for on really focused sure meets the

Paul Manley

quarter, do for Yes, the increase expect continue? And SG&A, Perfect. in here. why? one slight Tom. no? you Maybe in Jim to Thank you, coming this a

Jim Barnes

$X.X million $ go to next prepared compensation Yeah, expect for we quarter. in our addressed And the X of expense. remarks that $X that quarters. down million we the non-cash SG&A that was by And had of in stock that million the about was couple

$X in for costs annual So some about QX, there there. were million a you're And non-recurring talking example, the shareholder meetings. reduction

XXXX. stay So in forward. a numbers increase balance And through move flat to those SG&A line we huge we the wouldn't see fairly we the expect of as

Paul Manley

just think interest minutes, time of keeping Jim. All and I this I'll right, do in great. within in here. Thanks, XX questions two the And about more

to as last be The about, one, ship $X.X now. in to do When right and revenue? recognized also million you expect second you this have backlog

Jim Barnes

quarter situation. basically a is backlog our Well, end

that ship in in orders. in to manufacture we times products States. come don't QX. much fulfilling lead point orders as typically they backlog in. fill long We have We expect at the pretty And We United this really

we backlog it So a we vary not revenue point. But it's now, indicator that look And type mainly WRAP have a as may an look it's on quite change this later recurring to situation. because of that right we don't from closely. expect sales when you bit, more indicator at Reality. at an at It quarter-end

Paul Manley

thank like Great, you, Jim. this had few And I these one. in. We've a of come

XXXX into in For Wrap XXXX second the are about the excited at and of rest beyond, of most the half you Technologies? year, and what

Tom Smith

of I'm really about. excited a There's stuff bunch

We're - that 'XX. and all, margin. into is to see, focus, talked really of on Getting it a is the going to us, big financials for It's really to back in that again, on going that it's it. Board really, of for First the was that progress to half especially think 'XX make to get in is really year that to the building. Glenn exciting lot team and get goal us that over XX% a starting And I us. because we're going margin of we've again, second the everyone's about that area have of a impact

really making talked that So we're that for really all again, having this belief uses the and showing full what that They're team it are BolaWrap it's use and need we're difference. is leaders, elected and Glenn again, we media difference. to quality the even come do the and learn the going the at term, the work officers And looking that community about - paying And seeing, be exciting we're coverage these something and off just I see it's hard even the bodycams in we're Again, the to learn then seeing not with is a these but leading time working with execution the the kickers this.” a saying. the to the increase is have in. we've about the having to policing this. more conversations to tire getting. getting, staff really really, with officials, upgrading building, it, of that's that and and And whole bodycams about the in field coming here making able so to use trying “Hey, more just, that inquiries to with and showing

How So in do a continues we're wanting use that, we our who officers. talk of started references? that the to to, lot - we our at forth. Now and to to get our as go with looking conversations can are, this do and agency just

products building, family of the the we're there's with, Between So products excited about with on the the to. I'm this training same one time BolaWrap team side, it's for it. that that. the our we're coming devices that talking up the and roadmap, out that creating, customer Reality the on side super Again, the WRAP no we're that matching other we're platform better

police. change to This that change need satisfying. their the to only not it's we're to And that's to make we easy equipment, it, the of going together. And through to Because, very difference be the provide an of than have and enhancing hairdresser the again, I've - to very, a everybody going to out people they to police all to problems. them. and them that but using lot that tools a going to program putting solutions gets training cases, and putting with available BolaWrap, the it's to many, and more conversations. we're we're annual in And that the a have said, we're in through force, that technology to only change of company that we've prevent And talked not training on for cover. So we're the use It's going try that. again, associated them hands help point to that's And in communications try people really on case escalation technology, for problems. those many

appreciate working. continued it's for really And and excited half been the going, to So, we've community. execution XXXX. on what conversations of next doing really validate, the second excited what the I'm investment we're us the for where that months. ahead envelope validation things and us XX the even and it's bodycams that the into we've our that is where conversations the what about wisely with about able the strong and press rolling lot we're And to-date, year that to that's been the from much to super about, agencies in be getting And it the invest that the we're talking - bring that again, what's this validate sheet balance having we that of so on we support a how market, technologies really quicker do can these having,

Paul Manley

you. Jim, thank Tom, Tom. great very That's Thank you much.

I'll great I to get please back get I I did you if your to you to me Thank not at think did a to end a e-mail that's can. question, on. everybody as submit one soon question, pmanley@wrap.com who as and

Now, to I will call turn the over back Smith. our CEO, Tom

Tom Smith

exceptional better. unique for We us this and that continues And again, thanks, a have product get only joining services Paul. do everyone to platform you, And really thank an afternoon.

leading to Reality enforcement the driven for change of of at deeply opportunity continue talent And goal have to ubiquitous levels. fast demand, positioning board marketplace is and technology We with the will and law industry's our really we are achieving facing. to to our industry and that we radically next towards solve platform. the WRAP add world terms and better the of and several which years these our BolaWrap difficult a problems continue are now timing management communities make And the progress for our both historic in

everybody. have update. like look forward we next providing with great I'd evening So you a and you to to again, all our to thank Wish

you to safe healthy. and take So Talk be stay care, soon.

Wrap (WRAP) 1 Aug 212021 Q2 Earnings call transcript