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AMMO, Inc. Reports Fourth Quarter and Fiscal Year 2023 Financial Results
المصدر: Nasdaq GlobeNewswire / 14 يونيو 2023 16:05:00 America/New_York
SCOTTSDALE, Ariz., June 14, 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 Fourth Quarter and Fiscal Year 2023, ended March 31, 2023.
Fiscal Year 2023 Overview
● Net Revenues of $191.4 million, a 20.3% decrease. ● Gross profit margin of approximately 28.9%. ● Adjusted EBITDA of $26.4 million, compared to $60.8 million. ● Net loss of ($4.6) million, compared to net income of $33.2 million. ● Diluted EPS of ($0.07), compared to $0.27. ● Adjusted EPS of $0.16, compared to $0.46. GunBroker.com “Marketplace” Metrics – Fiscal Year 2023
● Marketplace revenue of approximately $63.1 million. ● New user growth averaged 38,000 per month. ● Average take rate increased to 5.6% compared to 5.1% in fiscal 2022. Fourth Quarter 2023 Overview
● Net Revenues decreased 37.7% to $43.7 million. ● Gross profit margin of approximately 27.3%. ● Adjusted EBITDA of $3.8 million compared to $10.7 million. ● Net loss of ($2.9) million, compared to net income of $0.5 million. ● Diluted EPS of ($0.03), compared to $0.00. ● Adjusted EPS of $0.03, compared to $0.07. GunBroker.com “Marketplace” Metrics – Fourth Quarter 2023
● Marketplace revenue of approximately $16.7 million. ● New user growth averaged 40,000 per month. ● Average take rate increased to 6.0% compared to 5.4% in fiscal 2022. Fred Wagenhals, AMMO’s Chairman & CEO, commented that “[w]e believe the increase in production capacity at our state-of-the-art Wisconsin plant, coupled with the continuing enhancement rollout to the GunBroker.com Marketplace site, has positioned our Company to effectively navigate current market-wide headwinds resulting from the current inflationary and recessionary drivers impacting the consumer.
“We are primed to take hold of these opportunities. The addition of our newest executive management team member, Jared Smith, President & COO, supports the high level of confidence I have in AMMO’s future. Jared’s experience, the wealth of his relationships, intellect and drive are all valuable assets for our organization as we chart our path forward to a bright future through the balance of this fiscal year and beyond,” Mr. Wagenhals concluded.
Fourth Quarter and Fiscal Year 2023 Results
We ended the Fiscal 2023 with cash generated from operations of approximately $35.6M and a cash balance of $39.1M. We were able to reduce our total inventories by $12.8M in our fourth fiscal quarter as we shifted our direction to a leaner operating model focusing on higher margin classes of ammunition and increased brass sales, which also afford us higher margins. Additionally, we continue to push forward on the improvements to our Marketplace, GunBroker.com, and expect the payment suite and cart platform to launch in the first half of our 2024 fiscal year, which should drive growth and profitability to the site.
We ended our fourth quarter with total revenues of approximately $43.7M in comparison to approximately $70.1M in the prior year quarter - this was a decrease of 37.7% from the prior year quarter. For the fiscal year, total revenues were $191.4M, decreasing 20.3% from the prior year. The decrease in revenue was mainly attributable to our ammunition segment and the inflationary impacts that are currently affecting the market. These market conditions also impacted the revenue of our Marketplace segment effecting a 7% decrease from the prior year quarter and a 2% decrease from the prior year in total. However, operating performance of our Marketplace, GunBroker.com still remained strong and although our top line revenues were slightly impacted, our margins are still comparable to historical performance.
Our cost of revenues was approximately $31.8M for the quarter compared to $49M in the comparable prior year quarter. Cost of revenues for the full fiscal year was $136M compared to $151.5M in the prior year. This decrease was related to reduced sales volume and increased commodity costs. Accordingly, this resulted in a gross margin of $11.9M compared to $21.1M in the prior year quarter and $55.4M for the year compared to $88.8 in the prior fiscal year. As our sales volume fell in the reported period, our transition to more profitable sales activity is currently in effect for first quarter of our 2024 fiscal year by shifting our focus to more sales of our premium brass and large caliber ammunition rounds, all of which drive improved margin.
Our balance sheet remains strong with our total current liabilities decreasing by 29% since our previous year end and our total current assets virtually unchanged, but our cash position increased $15.8M since the prior fiscal year or 68%.
For the quarter, we recorded adjusted EBITDA of approximately $3.8M, compared to prior year quarter adjusted EBITDA of $10.7M. For our fiscal year, our adjusted EBITDA was $26.4M compared to $60.8M in the prior fiscal year.
This resulted in a loss per share of $0.04 for the quarter or Adjusted Net Income per Share of $0.03 in comparison to a net income per share of $0.00 in the prior year quarter or Adjusted Net Income per Share of $0.07. For our fiscal year, a loss per share of $0.07 or Adjusted Net Income per Share of $0.16 in comparison to Net Income per share of $0.27 or Adjusted Net Income per Share of $0.46 in the prior year.
Conference Call
Management will host a conference call to discuss the Company’s Fourth Quarter and FY 2023 results at 5:00 p.m. ET today, June 14th, 2023.
Investors interested in participating in the live conference call or audio-only webcast, may join by dialing 1-866-777-2509 (domestic), 1-412-317-5413 (international), or via webcast at
https://dpregister.com/sreg/10179241/f9865bf53b.
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. Fourth Quarter and Fiscal Year 2023 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.comGunBroker.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) 655-0924Source: AMMO, Inc.
AMMO, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2023 March 31, 2022 ASSETS Current Assets: Cash and cash equivalents $ 39,134,027 $ 23,281,475 Accounts receivable, net 29,346,380 43,955,084 Due from related parties - 15,000 Inventories 54,344,819 59,016,152 Prepaid expenses 5,126,667 3,423,925 Current portion of restricted cash 500,000 - Total Current Assets 128,451,893 129,691,636 Property and Equipment, net 55,963,255 37,637,806 Other Assets: Deposits 7,028,947 11,360,322 Patents, net 5,032,754 5,526,218 Other intangible assets, net 123,726,810 136,300,387 Goodwill 90,870,094 90,870,094 Right of use assets - operating leases 1,261,634 2,791,850 TOTAL ASSETS $ 412,335,387 $ 414,178,313 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 18,079,397 $ 26,817,083 Factoring liability - 485,671 Accrued liabilities 4,353,354 6,178,814 Inventory credit facility - 825,675 Current portion of operating lease liability 470,734 831,429 Current portion of note payable related party 180,850 684,639 Current portion of construction note payable 260,429 - Insurance premium note payable 2,118,635 - Total Current Liabilities 25,463,399 35,823,311 Long-term Liabilities: Contingent consideration payable 140,378 204,142 Notes payable related party, net of current portion - 181,132 Construction note payable, net of unamortized issuance costs 10,922,443 38,330 Operating lease liability, net of current portion 903,490 2,091,351 Deferred income tax liability 2,309,592 1,536,481 Total Liabilities 39,739,302 39,874,747 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 March 31, 2023 and March 31, 2022, respectively 1,400 1,400 Common stock, $0.001 par value, 200,000,000 shares authorized 118,562,806 and 116,485,747 shares issued and 118,294,478 and 116,485,747 outstanding at March 31, 2023 and March 31, 2022, respectively 118,294 116,487 Additional paid-in capital 391,940,374 385,426,431 Accumulated deficit (18,941,825 ) (11,240,752 ) Treasury Stock (522,158 ) - Total Shareholders’ Equity 372,596,085 374,303,566 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 412,335,387 $ 414,178,313 AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)For the Three Months Ended
March 31,For the Years Ended
March 31,2023 2022 2023 2022 Net Revenues Ammunition sales $ 23,508,227 $ 48,829,370 $ 114,116,044 $ 161,459,025 Marketplace revenue 16,662,831 17,962,465 63,149,673 64,608,516 Casing sales 3,512,664 3,309,728 14,174,084 14,201,625 43,683,722 70,101,563 191,439,801 240,269,166 Cost of Revenues 31,773,675 49,047,882 136,031,204 151,505,657 Gross Profit 11,910,047 21,053,681 55,408,597 88,763,509 Operating Expenses Selling and marketing 742,326 3,083,399 4,729,540 7,310,216 Corporate general and administrative 7,059,882 6,010,056 24,980,079 16,986,344 Employee salaries and related expenses 4,264,701 5,672,363 15,679,135 13,615,439 Depreciation and amortization expense 3,328,010 3,657,154 13,278,762 13,702,148 Total operating expenses 15,394,919 18,422,972 58,667,516 51,614,147 Income/(Loss) from Operations (3,484,872 ) 2,630,709 (3,258,919 ) 37,149,362 Other Expenses Other income/(expense) (3,012 ) 52 25,181 21,840 Interest expense (93,871 ) (169,393 ) (632,062 ) (637,797 ) Total other expense (96,883 ) (169,341 ) (606,881 ) (615,957 ) Income/(Loss) before Income Taxes (3,581,755 ) 2,461,368 (3,865,800 ) 36,533,405 Provision for Income Taxes (639,189 ) 1,933,971 730,238 3,285,969 Net Income/(Loss) (2,942,566 ) 527,397 (4,596,038 ) 33,247,436 Preferred Stock Dividend (765,625 ) (765,683 ) (3,105,034 ) (2,668,649 ) Net Income/(Loss) Attributable to Common Stock Shareholders $ (3,708,191 ) $ (238,286 ) $ (7,701,072 ) $ 30,578,787 Net Income/(Loss) per share Basic $ (0.03 ) $ (0.01 ) $ (0.07 ) $ 0.27 Diluted $ (0.03 ) $ 0.00 $ (0.07 ) $ 0.27 Weighted average number of shares outstanding Basic 117,874,162 115,507,063 117,177,885 112,328,680 Diluted 117,874,162 117,174,098 117,177,885 114,189,720 AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
2023 2022 Cash flows from operating activities: Net Income/(Loss) (4,596,038 ) 33,247,436 Adjustments to reconcile Net Loss to Net Cash provided by (used in) operations: Depreciation and amortization 17,519,949 17,339,093 Debt discount amortization 83,253 38,330 Employee stock awards 5,807,779 5,759,000 Stock grants 179,094 252,488 Stock for services - 4,200 Contingent consideration payable fair value (63,764 ) (385,750 ) Allowance for doubtful accounts 191,299 2,748,250 (Gain)/loss on disposal of assets - (12,044 ) Reduction in right of use asset 629,140 720,491 Warrant issued for services 213,819 718,045 Deferred income taxes 773,111 1,536,481 Stock issued in lieu of cash payments - - Interest on convertible promissory notes - - Paycheck protection program note forgiveness - - Loss on Jagemann Munition Components - - Stock and warrants for note conversion - - Changes in Current Assets and Liabilities Accounts receivable 14,417,405 (20,707,052 ) Due to (from) related parties 15,000 657 Inventories 4,671,333 (43,149,234 ) Prepaid expenses 2,763,855 1,996,287 Deposits 4,306,375 (8,826,504 ) Accounts payable (8,737,686 ) 9,930,191 Accrued liabilities (1,947,078 ) 2,374,686 Operating lease liability (647,480 ) (732,468 ) Net cash provided by (used in) operating activities 35,556,366 2,852,583 Cash flows from investing activities: Gemini acquisition - (50,517,840 ) Purchase of equipment (12,541,325 ) (19,218,982 ) Proceeds from disposal of assets - 59,800 Net cash used in investing activities (12,541,325 ) (69,677,022 ) Cash flow from financing activities: Payments on inventory facility, net (825,675 ) (265,422 ) Proceeds from factoring liability 57,300,000 121,488,045 Payments on factoring liability (57,785,671 ) (122,844,562 ) Payments on assumed debt from Gemini - (50,000,000 ) Payments on note payable - related party (684,921 ) (625,147 ) Payments on insurance premium note payment (2,134,143 ) (2,208,369 ) Proceeds from construction note payable 1,000,000 - Payments on construction note payable (150,743 ) - Payments on note payable - (4,000,000 ) Sale of preferred stock - 35,000,000 Common stock issued for exercised warrants 101,506 943,907 Common stock issuance costs - (3,199,922 ) Preferred stock dividends paid (2,960,416 ) (2,524,087 ) Common stock repurchase plan (522,426 ) - Sale of common stock - - Proceeds from paycheck protection program notes - - Proceeds from note payable related party issued - - Proceeds from note payable - - Proceeds from convertible promissory notes - - Payments on common stock repurchase and cancellation - - Net cash used in financing activities (6,662,489 ) (28,235,557 ) Net increase/(decrease) in cash 16,352,552 (95,059,996 ) Cash, beginning of period 23,281,475 118,341,471 Cash and restricted cash, end of period $ 39,634,027 $ 23,281,475 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 Quarterly Report on Form 10-Q 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 Year Ended 31-Mar-23 31-Mar-22 31-Mar -23 31-Mar -22 Reconciliation of GAAP net income to Adjusted EBITDA Net Income (Loss) $ (2,942,566 ) $ 527,397 $ (4,596,038 ) $ 33,247,436 Provision for Income Taxes (639,189 ) 1,933,971 730,238 3,285,969 Depreciation and amortization 4,568,977 4,560,990 17,519,949 17,339,093 Interest expense, net 93,871 169,393 632,062 637,797 Employee stock awards 1,349,806 2,860,750 5,807,779 5,759,000 Stock grants 43,750 55,378 179,094 252,488 Stock for services - - - 4,200 Warrants issued for services 106,910 572,537 213,819 718,045 Other expenses, net 3,012 (52 ) (25,181 ) (21,840 ) Contingent consideration fair value (18,192 ) (22,997 ) (63,764 ) (385,750 ) Proxy contest fees(1) - - 4,724,385 - Other nonrecurring expenses(2) 1,248,865 - 1,248,865 - Adjusted EBITDA $ 3,815,244 $ 10,657,367 $ 26,371,208 $ 60,836,438 (1 ) Includes proxy contention fees of $910,000 for Employee Stock Awards issued as a result of the Settlement Agreement as discussed in our Quarterly Report on Form 10-Q. (2 ) Other nonrecurring expenses consist of professional and legal fees that are nonrecurring in nature. For the Three Months Ended 31-Mar-23 31-Mar-22 Reconciliation of GAAP net income to Fully Diluted EPS Net Income (Loss) $ (2,942,566 ) $ (0.02 ) $ 527,397 $ 0.01 Depreciation and amortization 4,568,977 0.04 4,560,990 0.04 Interest expense, net 93,871 - 169,393 - Employee stock awards 1,349,806 0.01 2,860,750 0.02 Stock grants 43,750 - 55,378 - Stock for services - - - - Warrants issued for services 106,910 - 572,537 0.01 Contingent consideration fair value (18,192 ) - (22,997 ) - Proxy contest costs - - - - Nonrecurring expenses 1,248,865 0.01 - 0.04 Tax effect(1) (1,566,604 ) (0.01 ) (1,253,551 ) (0.01 ) Adjusted Net Income $ 3,202,556 $ 0.03 $ 8,723,448 $ 0.07 (1 ) Tax effects are estimated by applying the statutory rate to each applicable Non-GAAP adjustment. For the Years Ended 31-Mar-23 31-Mar-22 Reconciliation of GAAP net income to Fully Diluted EPS Net Income (Loss) $ (4,596,038 ) $ (0.04 ) $ 33,247,436 $ 0.29 Depreciation and amortization 17,519,949 0.15 17,339,093 0.15 Interest expense, net 632,062 0.01 637,797 - Employee stock awards 5,807,779 0.05 5,759,000 0.05 Stock grants 179,094 252,488 - Stock for services - - 4,200 - Warrants issued for services 213,819 - 718,045 0.01 Contingent consideration fair value (63,764 ) (385,750 ) - Proxy contest costs 4,724,385 0.04 - - Nonrecurring expenses 1,248,865 0.01 - - Tax effect(1) (6,393,194 ) (0.06 ) (4,763,876 ) (0.04 ) Adjusted Net Income $ 19,272,957 $ 0.16 $ 52,808,433 $ 0.46 (1 ) Tax effects are estimated by applying the statutory rate to each applicable Non-GAAP adjustment. For the Three Months Ended
March 31,For the Years Ended
March 31,2023 2022 2023 2022 Weighted average number of shares outstanding Basic 117,874,162 115,507,063 117,177,885 112,328,680 Diluted 117,874,162 117,174,098 117,177,885 114,189,720 
