• AMMO, Inc. Reports Second Quarter 2024 Financial Results

    来源: Nasdaq GlobeNewswire / 09 11月 2023 15:05:01   America/Chicago

    SCOTTSDALE, Ariz., Nov. 09, 2023 (GLOBE NEWSWIRE) -- AMMO, Inc. (Nasdaq: POWW, POWWP) (“AMMO” or the “Company”), the owner of GunBroker.com, the largest online marketplace serving the firearms and shooting sports industries, and a leading vertically integrated producer of high-performance ammunition and components, today reported results for its second quarter of fiscal 2024, ended September 30, 2023.

    Second Quarter Fiscal 2024 vs. Second Quarter Fiscal 2023

     Net Revenues of $34.4 million
     Gross profit margin of approximately 24.1% compared to 26.6%
     Adjusted EBITDA of $1.2 million compared to $5.7 million
     Net loss of ($7.5) million, compared to a net loss of ($0.8) million
     Diluted EPS of ($0.07), compared to ($0.01)
     Adjusted EPS of $0.00, compared to $0.04
       

    GunBroker.com “Marketplace” Metrics – Second Quarter 2024

     Marketplace revenue of approximately $12.5 million
     New user growth averaged approximately 26,000 per month
     Average take rate increased to 6.0% compared to 5.3% in fiscal 2023
       

    Jared Smith, AMMO’s CEO, commented “Our fiscal second quarter was a very difficult quarter for our industry and due to mechanical and supply issues we are roughly one quarter behind where we thought we would be by now. However, we continue to transition our business to a leaner and more profitable operating model and remain focused on addressing operational inefficiencies. With that said, the market is moving very quickly based on recent international and domestic events.

    “Events in October have completely flipped the market on its head. We see strong demand for our brass casings and even stronger demand internationally. While we have had delays in bringing the factory on-line, we continue to make investments to secure future predictability, profitability, and capacity. The fundamentals of the industry are improving. Gunbroker.com is starting to see the payoff of payment processing capabilities on the platform as we continue to transition GunBroker.com from an auction house to an Amazon-like model for firearms and accessories,” Mr. Smith concluded.

    Second Quarter 2024 Results

    The margins in our marketplace segment remain strong and although our gross margins have decreased in our ammunition segment due to the aforementioned operational struggles, we are optimistic on the future performance of this segment. While challenges continue in the market today, the demand for our brass casings remain robust. We are beginning to see positive trends in the demand for our ammunition product and we are seeing the activity on GunBoker.com increase as we enter into our third fiscal quarter.

    We are positioned to capitalize on these positive trends given our strong financial position as we have reported $129.5 million in current assets including $49.6 million of cash and cash equivalents, in comparison to $27.6 million in current liabilities. Additionally, we generated $18.2 million in cash from operations through the midpoint of our fiscal year.

    We ended the first quarter with total revenues of approximately $34.4 million in comparison to $48.3 million in the prior year quarter. The decrease in revenue was primarily related to a decrease in sales activity from our ammunition segment as a result of the state of the US commercial ammunition market during the reported quarter. Our casing sales, however, which afford us higher gross margins, increased to $6.4 million up from $4.3 million in the prior year period. Our marketplace revenue was $12.5 million, for the reported quarter, compared to $14.6 million in the prior year quarter, which decreased as a result of the current macroeconomic environment impacting our industry as well as others.

    Cost of goods sold was approximately $26.1 million for the quarter compared to $35.5 million in the comparable prior year quarter. The decrease in cost of goods sold was related to the decrease in sales volume.

    Our gross margin for the quarter was $8.3 million or 24.1% compared to $12.8 million or 26.6% in the prior year period. The decrease in gross profit margin was related to the shift in our sales mix but was also related to higher costs associated with our manufacturing process in our ammunition segment. Primarily, our cost absorption suffered due to the setbacks we experienced in the reported quarter as a result of rifle casing presses going down.

    There were approximately $3.9 million of nonrecurring expenses related to legal and professional fees and accruals for contingencies from activities commencing in our 2021 and 2022 fiscal years. There was also $0.9 million of additional stock compensation expense as a result of change in control, and $0.4 million of write-offs incurred in our second fiscal quarter. All of these items, among others, are included as addbacks to Adjusted EBITDA.

    For the quarter, we recorded Adjusted EBITDA of approximately $1.2 million, compared to prior year quarter Adjusted EBITDA of $5.7 million.

    This resulted in a net loss per share of ($0.07) or adjusted net income per share of $0.00, compared to the prior year period of net loss per share of ($0.01) or adjusted net income per share of $0.04.

    We continue to push forward on the improvements to our marketplace, GunBroker.com. We have formally launched OutdoorPay, our payment processing platform, and are in the process of onboarding our userbase to this platform, which will enable us to launch our cart platform soon thereafter.

    We repurchased approximately 198,000 shares of our common stock under our repurchase plan in the reported quarter bringing us to just over 1.2 million shares repurchased in total under the plan.

    Conference Call

    Management will host a conference call at 5:00 PM ET on November 9, 2023, to review financial results and provide an update on corporate developments. Following management’s formal remarks there will be a question-and-answer session.

    Participants are asked to preregister for the call at the following link: https://dpregister.com/sreg/10183047/fa923d6953.

    Please note that registered participants will receive their dial-in number upon registration and will dial directly into the call without delay. Those without Internet access or who are unable to pre-register may dial in by calling 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Ammo Inc call.

    The conference call will also be available through a live webcast at the following link: which is also available through the company’s website.

    https://event.choruscall.com/mediaframe/webcast.html?webcastid=kAqERLpp,

    Please join at least 5-10 minutes prior to the scheduled start and follow the operator’s instructions. When requested, please ask for “AMMO, Inc. Second Quarter 2024 Conference Call.”

    About AMMO, Inc.

    With its corporate offices headquartered in Scottsdale, Arizona, AMMO designs and manufactures products for a variety of aptitudes, including law enforcement, military, sport shooting and self-defense. The Company was founded in 2016 with a vision to change, innovate and invigorate the complacent munitions industry. AMMO promotes branded munitions as well as its patented STREAK Visual Ammunition, /stelTH/™ subsonic munitions, and specialty rounds for military use via government programs. For more information, please visit: www.ammo-inc.com.

    About GunBroker.com

    GunBroker.com is the largest online marketplace dedicated to firearms, hunting, shooting and related products. Aside from merchandise bearing its logo, GunBroker.com currently sells none of the items listed on its website. Third-party sellers list items on the site and Federal and state laws govern the sale of firearms and other restricted items. Ownership policies and regulations are followed using licensed firearms dealers as transfer agents. Launched in 1999, GunBroker.com is an informative, secure and safe way to buy and sell firearms, ammunition, air guns, archery equipment, knives and swords, firearms accessories and hunting/shooting gear online. GunBroker.com promotes responsible ownership of guns and firearms. For more information, please visit: www.gunbroker.com.

    Forward Looking Statements

    This document contains certain “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies, goals and objectives of management for future operations; any statements concerning proposed new products and services or developments thereof; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

    Forward looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words, or the negative thereof. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures and risk factors we include in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Reports filed on Form 8-K.

    Investor Contact:
    CoreIR
    Phone: (212) 655-0924
    IR@ammo-inc.com

    Source: AMMO, INC.

    AMMO, Inc.
    CONDENSED CONSOLIDATED BALANCE SHEETS

      September 30, 2023  March 31, 2023 
      (Unaudited)    
    ASSETS        
    Current Assets:        
    Cash and cash equivalents $49,564,868  $39,134,027 
    Accounts receivable, net  23,030,851   29,346,380 
    Inventories  53,014,205   54,344,819 
    Prepaid expenses  3,920,007   5,126,667 
    Current portion of restricted cash  -   500,000 
    Total Current Assets  129,529,931   128,451,893 
             
    Equipment, net  55,821,414   55,963,255 
             
    Other Assets:        
    Deposits  3,189,518   7,028,947 
    Patents, net  4,786,022   5,032,754 
    Other intangible assets, net  117,440,022   123,726,810 
    Goodwill  90,870,094   90,870,094 
    Right of use assets - operating leases  1,017,982   1,261,634 
    TOTAL ASSETS $402,654,983  $412,335,387 
             
    LIABILITIES AND SHAREHOLDERS’ EQUITY        
    Current Liabilities:        
    Accounts payable $19,598,548  $18,079,397 
    Accrued liabilities  6,250,164   4,353,354 
    Current portion of operating lease liability  370,980   470,734 
    Note payable related party  -   180,850 
    Current portion of construction note payable  265,977   260,429 
    Insurance premium note payable  1,157,745   2,118,635 
    Total Current Liabilities  27,643,414   25,463,399 
             
    Long-term Liabilities:        
    Contingent consideration payable  99,302   140,378 
    Construction note payable, net of unamortized issuance costs  10,830,663   10,922,443 
    Operating lease liability, net of current portion  744,616   903,490 
    Deferred income tax liability  349,327   2,309,592 
    Total Liabilities  39,667,322   39,739,302 
             
    Shareholders’ Equity:        
    Series A cumulative perpetual preferred Stock 8.75%, ($25.00 per share, $0.001 par value) 1,400,000 shares issued and outstanding as of September 30, 2023 and March 31, 2023, respectively  1,400   1,400 
    Common stock, $0.001 par value, 200,000,000 shares authorized 119,665,700 and 118,562,806 shares issued and 118,460,743 and 118,294,478 outstanding at September 30, 2023 and March 31, 2023, respectively  118,461   118,294 
    Additional paid-in capital  394,331,516   391,940,374 
    Accumulated deficit  (29,086,926)  (18,941,825)
    Treasury stock  (2,376,790)  (522,158)
    Total Shareholders’ Equity  362,987,661   372,596,085 
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $402,654,983  $412,335,387 


    AMMO, Inc.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)

      For the Three Months Ended September 30,  For the Six Months Ended September 30, 
      2023  2022  2023  2022 
                 
    Net Revenues                
    Ammunition sales(1) $15,516,589  $29,386,969  $29,622,618  $70,356,852 
    Marketplace revenue  12,474,716   14,562,694   26,386,918   31,067,640 
    Casing sales  6,381,081   4,338,896   12,617,425   7,620,093 
       34,372,386   48,288,559   68,626,961   109,044,585 
                     
    Cost of Revenues  26,084,120   35,452,850   46,314,155   78,073,214 
    Gross Profit  8,288,266   12,835,709   22,312,806   30,971,371 
                     
    Operating Expenses                
    Selling and marketing  289,952   1,068,501   585,533   2,976,671 
    Corporate general and administrative  7,855,624   5,055,699   15,803,187   10,084,996 
    Employee salaries and related expenses  5,590,035   3,923,700   9,706,315   6,708,798 
    Depreciation and amortization expense  3,371,802   3,291,322   6,715,845   6,641,678 
    Total operating expenses  17,107,413   13,339,222   32,810,880   26,412,143 
    Income/(Loss) from Operations  (8,819,147)  (503,513)  (10,498,074)  4,559,228 
                     
    Other Income/(Expenses)                
    Other income  (321,341)  5,098   371,610   198,596 
    Interest expense  (212,314)  (97,265)  (416,515)  (217,752)
    Total other income/(expense)  (533,655)  (92,167)  (44,905)  (19,156)
                     
    Income/(Loss) before Income Taxes  (9,352,802)  (595,680)  (10,542,979)  4,540,072 
                     
    Provision for Income Taxes  (1,857,505)  207,827   (1,954,649)  2,090,552 
                     
    Net Income/(Loss)  (7,495,297)  (803,507)  (8,588,330)  2,449,520 
                     
    Preferred Stock Dividend  (782,639)  (782,639)  (1,556,771)  (1,556,771)
                     
    Net Income/(Loss) Attributable to Common Stock Shareholders $(8,277,936) $(1,586,146) $(10,145,101) $892,749 
                     
    Net Income/(Loss) per share                
    Basic $(0.07) $(0.01) $(0.09) $0.01 
    Diluted $(0.07) $(0.01) $(0.09) $0.01 
                     
    Weighted average number of shares outstanding                
    Basic  118,167,228   116,927,607   117,941,755   116,744,972 
    Diluted  118,167,228   116,927,607   117,941,755   118,063,619 


    (1)Included in revenue for the three months ended September 30, 2023 and 2022 is excise taxes of $1,284,166 and $2,435,051, respectively. Included in revenue for the six months ended September 30, 2023 and 2022 is excise taxes of $2,459,962 and $6,147,392, respectively.


    AMMO, Inc.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
    (Unaudited)

      For the Six Months Ended
    September 30,
     
      2023  2022 
           
    Cash flows from operating activities:        
    Net Income/(Loss) $(8,588,330) $2,449,520 
    Adjustments to reconcile Net Income/(Loss) to Net Cash provided by operations:        
    Depreciation and amortization  9,293,566   8,594,968 
    Debt discount amortization  41,626   41,626 
    Employee stock awards  2,290,746   2,351,438 
    Stock grants  101,500   91,594 
    Contingent consideration payable fair value  (41,076)  (25,246)
    Allowance for doubtful accounts  1,047,587   934,135 
    Reduction in right of use asset  243,652   398,033 
    Deferred income taxes  (1,960,265)  817,310 
    Changes in Current Assets and Liabilities        
    Accounts receivable  5,267,942   12,590,905 
    Due from related parties  -   9,000 
    Inventories  1,330,614   (9,590,856)
    Prepaid expenses  2,262,859   1,130,589 
    Deposits  3,839,429   2,633,655 
    Accounts payable  1,519,151   (3,017,415)
    Accrued liabilities  1,760,716   (1,295,829)
    Operating lease liability  (258,628)  (403,184)
    Net cash provided by operating activities  18,151,089   17,710,243 
             
    Cash flows from investing activities:        
    Purchase of equipment  (2,618,205)  (8,405,180)
    Net cash used in investing activities  (2,618,205)  (8,405,180)
             
    Cash flow from financing activities:        
    Proceeds from factoring liability  26,047,370   45,600,000 
    Payments on factoring liability  (26,047,370)  (45,291,282)
    Payments on inventory facility, net  -   (825,675)
    Payments on note payable - related party  (180,850)  (334,374)
    Payments on insurance premium note payment  (2,017,089)  (1,334,183)
    Proceeds from construction note payable  -   1,000,000 
    Payments on construction note payable  (127,858)  - 
    Preferred stock dividends paid  (1,420,677)  (1,420,727)
    Common stock repurchase plan  (1,855,569)  - 
    Common stock issued for exercised warrants  -   24,242 
    Net cash used in financing activities  (5,602,043)  (2,581,999)
             
    Net increase in cash  9,930,841   6,723,064 
    Restricted cash, beginning of period  500,000   - 
    Cash, beginning of period  39,134,027   23,281,475 
    Cash and restricted cash, end of period $49,564,868  $30,004,539 
    Restricted cash, end of period $-  $1,000,000 
    Cash, end of period $49,564,868  $29,004,539 

    (Continued)

    AMMO, Inc.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
    (Unaudited)

      For the Six Months Ended
    September 30,
     
      2023  2022 
           
    Supplemental cash flow disclosures:        
    Cash paid during the period for:        
    Interest $375,885  $141,131 
    Income taxes $-  $1,302,811 
             
    Non-cash investing and financing activities:        
    Insurance premium note payment $1,056,199  $2,035,519 
    Dividends accumulated on preferred stock $136,094  $136,044 
    Construction note payable $-  $9,804,580 


    Non-GAAP Financial Measures

    We analyze operational and financial data to evaluate our business, allocate our resources, and assess our performance. In addition to total net sales, net loss, and other results under accounting principles generally accepted in the United States (“GAAP”), the following information includes key operating metrics and non-GAAP financial measures we use to evaluate our business. We believe these measures are useful for period-to-period comparisons of the Company. We have included these non-GAAP financial measures in this Current Report on Form 8-K because they are key measures we use to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating to operating expenses and the allocation of our resources. Accordingly, we believe these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

    Reconciliation of GAAP net income to Adjusted EBITDA

      For the Three Months Ended  For the Six Months Ended 
      30-Sep-23  30-Sep-22  30-Sep-23  30-Sep-22 
                 
    Reconciliation of GAAP net income to Adjusted EBITDA                
    Net Income (Loss) $(7,495,297) $(803,507) $(8,588,330) $2,449,520 
    Provision for Income Taxes  (1,857,505)  207,827   (1,954,649)  2,090,552 
    Depreciation and amortization  4,673,479   4,294,845   9,293,566   8,594,968 
    Interest expense, net  212,314   97,265   416,515   217,752 
    Employee stock awards  1,467,949   1,176,375   2,290,746   2,351,438 
    Stock grants  50,750   43,750   101,500   91,594 
    Other (income) expense, net  321,341   (5,098)  (371,610)  (198,596)
    Contingent consideration fair value  (20,052)  (23,944)  (41,076)  (25,246)
    Other nonrecurring expenses(1)  3,867,692   741,131   6,627,418   741,131 
    Adjusted EBITDA $1,220,671  $5,728,644  $7,774,080  $16,313,113 


     1)For the three and six months ended September 30, 2023, other nonrecurring expenses consist of professional and legal fees that are nonrecurring in nature. For the three and six months ended September 30, 2022, other nonrecurring expenses consist of proxy contest fees.

    Reconciliation of GAAP net income to Fully Diluted EPS

      For the Three Months Ended 
      30-Sept-23  30-Sept-22 
    Reconciliation of GAAP net income to Fully Diluted EPS                
    Net Income/(Loss) $(7,495,297 $(0.06) $(803,507) $(0.01)
    Depreciation and amortization  4,673,479   0.04   4,294,845   0.04 
    Interest expense, net  212,314   -   97,265   - 
    Employee stock awards  1,467,949   0.01   1,176,375   0.01 
    Stock grants  50,750   -   43,750   - 
    Contingent consideration fair value  (20,052)  -   (23,944)  - 
    Nonrecurring expenses  3,867,692   0.03   741,131   0.01 
    Tax effect(1)  (2,319,673)  (0.02)  (1,360,309)  (0.01)
    Adjusted Net Income $437,161  $-  $(803,507) $0.04 


      For the Six Months Ended 
      30-Sept-23  30-Sept-22 
    Reconciliation of GAAP net income to Fully Diluted EPS                
    Net Income/(Loss) $(8,588,330 $(0.07) $2,449,520  $0.02 
    Depreciation and amortization  9,293,566   0.08   8,594,968   0.07 
    Interest expense, net  416,515   -   217,752   - 
    Employee stock awards  2,290,746   0.02   2,351,438   0.02 
    Stock grants  101,500   -   91,594   - 
    Contingent consideration fair value  (41,076)  -   (25,246)  - 
    Nonrecurring expenses  6,627,418   0.06   741,131   0.01 
    Tax effect(1)  (4,329,437)  (0.04)  (2,531,771)  (0.02)
    Adjusted Net Income $5,770,902  $0.05  $11,889,386  $0.10 


      (1)Tax effects are estimated by applying the statutory rate to each applicable Non-GAAP adjustment.


       For the Three Months Ended
    September 30,
     For the Six Months Ended
    September 30,
     
       2023 2022 2023 2022 
    Weighted average number
    of shares outstanding
             
     Basic 118,167,228 116,927,607 117,941,755 116,744,972 
     Diluted 118,167,228 116,927,607 117,941,755 118,063,619 
               


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