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AMMO, Inc. Reports Third Quarter 2024 Financial Results
المصدر: Nasdaq GlobeNewswire / 08 فبراير 2024 15:05:00 America/Chicago
SCOTTSDALE, Ariz., Feb. 08, 2024 (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 third quarter of fiscal 2024, ended December 31, 2024.
Third Quarter Fiscal 2024 vs. Third Quarter Fiscal 2023
● Net Revenues of $36.0 million ● Gross profit margin of approximately 30.3% compared to 32.4% ● Adjusted EBITDA of $5.4 million compared to $6.2 million ● Net loss of ($1.6) million, compared to a net loss of ($4.1) million ● Diluted EPS of ($0.02), compared to ($0.04) ● Adjusted EPS of $0.04, compared to $0.04 GunBroker.com “Marketplace” Metrics – Third Quarter 2024
● Marketplace revenue of approximately $14.0 million ● New user growth averaged approximately 37,000 per month ● Average take rate increased to 5.9% compared to 5.7% in fiscal 2023 Jared Smith, AMMO’s CEO, commented “Despite the challenges we faced in calendar 2023 for our industry, Ammo Inc. continues to transition its business to a stronger and leaner operating model. We have emerged from this time with an impeccable balance sheet and remain encouraged about the significant opportunities we have before us here in the fourth quarter and going forward.
“We continue to see increasing demand as the ammunition and firearms market recovers from 2022 and 2023’s post pandemic slump. As we look at opportunities going into fiscal 2025, we will focus on the transformation of our marketplace platform. We will also continue to transition our manufacturing model to one of pursuing higher margin, premium rifle and pistol ammunition opportunities as well as embracing the growing OEM brass business.,” Mr. Smith concluded.
Third Quarter 2024 Results
We experienced an improvement in the marginality of our ammunition segment while the margins of the GunBroker.com marketplace segment remain strong. We continue to see positive demand trends building for our ammunition product and activity continues to increase on GunBoker.com as we enter into the final quarter of our fiscal year.
We ended the third quarter with total revenues of approximately $36.0 million in comparison to $38.7 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 a change in the US commercial ammunition market from the comparable prior year quarter. Our casing sales, however, which afford us higher gross margins, increased to $4.7 million up from $3.0 million in the prior year period. Our marketplace revenue was $14.0 million for the reported quarter, compared to $15.4 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 $25.1 million for the quarter compared to $26.2 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 $10.9 million or 30.3% compared to $12.5 million or 32.4% in the prior year period. The decrease in gross profit margin was related to the shift in our sales mix.
Our cost cutting measures are paying off, there was a 5.4% decrease in operating expenses as a percentage of sales from the prior year quarter adjusted to exclude nonrecurring expenses.
There were approximately $1.5 million of nonrecurring expenses related to legal and professional fees which we have included as addbacks to Adjusted EBITDA.
For the quarter, we recorded Adjusted EBITDA of approximately $5.4 million, compared to prior year quarter Adjusted EBITDA of $6.2 million.
This resulted in a net loss per share of ($0.02) or adjusted net income per share of $0.04, compared to the prior year period of net loss per share of ($0.04) or adjusted net income per share of $0.04.
Our improvements to our marketplace, GunBroker.com, continue as our cart platform is on schedule to launch on April 1st.
We repurchased approximately 145,000 shares of our common stock under our repurchase plan in the reported quarter bringing us to just over 1.3 million shares repurchased in total under the plan since repurchases began in December 2022.
Conference Call
Management will host a conference call at 5:00 PM ET on February 8, 2024, 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/10185867/fb6f640d8c
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 1-844-481-2698 (domestic) or 1-412-317-0655 (international).
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. Third Quarter 2024 Conference Call.”
The conference call will also be available through a live webcast at the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=mnSsDVht, which is also available through the Company’s website.
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 Current Reports filed on Form 8-K.
Investor Contact:
CoreIR
Phone: (212) 655-0924
IR@ammo-inc.comSource: AMMO, Inc.
AMMO, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2023 March 31, 2023 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 54,679,868 $ 39,134,027 Accounts receivable, net 21,121,450 29,346,380 Inventories 49,502,732 54,344,819 Prepaid expenses 3,708,865 5,126,667 Current portion of restricted cash - 500,000 Total Current Assets 129,012,915 128,451,893 Equipment, net 57,278,603 55,963,255 Other Assets: Deposits 2,265,932 7,028,947 Patents, net 4,662,656 5,032,754 Other intangible assets, net 114,296,627 123,726,810 Goodwill 90,870,094 90,870,094 Right of use assets - operating leases 2,113,943 1,261,634 Deferred income tax asset 115,908 - TOTAL ASSETS $ 400,616,678 $ 412,335,387 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 19,146,138 $ 18,079,397 Accrued liabilities 6,570,668 4,353,354 Current portion of operating lease liability 463,059 470,734 Note payable related party - 180,850 Current portion of construction note payable 265,977 260,429 Insurance premium note payable 173,029 2,118,635 Total Current Liabilities 26,618,871 25,463,399 Long-term Liabilities: Contingent consideration payable 80,080 140,378 Construction note payable, net of unamortized issuance costs 10,797,696 10,922,443 Operating lease liability, net of current portion 1,737,615 903,490 Deferred income tax liability - 2,309,592 Total Liabilities 39,234,262 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 December 31, 2023 and March 31, 2023, respectively 1,400 1,400 Common stock, $0.001 par value, 200,000,000 shares authorized 119,994,033 and 118,562,806 shares issued and 118,643,593 and 118,294,478 outstanding at December 31, 2023 and March 31, 2023, respectively 118,644 118,294 Additional paid-in capital 395,449,082 391,940,374 Accumulated deficit (31,513,554 ) (18,941,825 ) Treasury Stock (2,673,156 ) (522,158 ) Total Shareholders’ Equity 361,382,416 372,596,085 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 400,616,678 $ 412,335,387
AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)For the Three Months Ended
December 31,For the Nine Months Ended
December 31,2023 2022 2023 2022 Net Revenues Ammunition sales(1) $ 17,322,967 $ 20,250,965 $ 46,945,585 $ 90,607,817 Marketplace revenue 13,985,034 15,419,202 40,371,952 46,486,842 Casing sales 4,698,463 3,041,327 17,315,888 10,661,420 36,006,464 38,711,494 104,633,425 147,756,079 Cost of Revenues 25,096,088 26,184,315 71,410,243 104,257,529 Gross Profit 10,910,376 12,527,179 33,223,182 43,498,550 Operating Expenses Selling and marketing 236,565 1,010,543 822,098 3,987,214 Corporate general and administrative 5,803,255 7,835,201 21,606,442 17,920,197 Employee salaries and related expenses 3,390,153 4,705,636 13,096,468 11,414,434 Depreciation and amortization expense 3,401,156 3,309,074 10,117,001 9,950,752 Total operating expenses 12,831,129 16,860,454 45,642,009 43,272,597 Income/(Loss) from Operations (1,920,753 ) (4,333,275 ) (12,418,827 ) 225,953 Other Expenses Other income/(loss) 4,576 (170,403 ) 376,186 28,193 Interest expense (193,046 ) (320,439 ) (609,561 ) (538,191 ) Total other expense, net (188,470 ) (490,842 ) (233,375 ) (509,998 ) Loss before Income Taxes (2,109,223 ) (4,824,117 ) (12,652,202 ) (284,045 ) Provision for Income Taxes (465,234 ) (721,125 ) (2,419,883 ) 1,369,427 Net Loss (1,643,989 ) (4,102,992 ) (10,232,319 ) (1,653,472 ) Preferred Stock Dividend (782,639 ) (782,639 ) (2,339,410 ) (2,339,409 ) Net Loss Attributable to Common Stock Shareholders $ (2,426,628 ) $ (4,885,631 ) $ (12,571,729 ) $ (3,992,881 ) Net Loss per share Basic $ (0.02 ) $ (0.04 ) $ (0.11 ) $ (0.03 ) Diluted $ (0.02 ) $ (0.04 ) $ (0.11 ) $ (0.03 ) Weighted average number of shares outstanding Basic 118,447,154 117,348,511 118,110,943 116,950,013 Diluted 118,447,154 117,348,511 118,110,943 116,950,013 (1 ) Included in revenue for the three months ended December 31, 2023 and 2022 are excise taxes of $1,498,429 and $1,669,206, respectively. Included in revenue for the nine months ended December 31, 2023 and 2022 are excise taxes of $3,958,391 and $7,816,598, respectively.
AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)For the Nine Months Ended
December 31,2023 2022 Cash flows from operating activities: Net Loss $ (10,232,319 ) $ (1,653,472 ) Adjustments to reconcile Net Loss to Net Cash provided by operations: Depreciation and amortization 14,047,216 12,950,972 Debt discount amortization 62,440 62,440 Employee stock awards 2,977,845 4,457,973 Stock grants 152,250 135,344 Common stock purchase options 380,045 - Warrants Issued for Services - 106,909 Contingent consideration payable fair value (60,298 ) (45,572 ) Allowance for doubtful accounts 1,117,565 1,327,419 Reduction in right of use asset 362,402 512,063 Deferred income taxes (2,425,500 ) 1,283,481 Changes in Current Assets and Liabilities Accounts receivable 7,107,365 12,208,054 Due from related parties - 15,000 Inventories 4,842,087 (8,129,249 ) Prepaid expenses 2,474,001 1,941,206 Deposits 4,763,015 1,678,415 Accounts payable 1,066,741 (5,852,397 ) Accrued liabilities 2,072,696 (2,044,248 ) Operating lease liability (388,261 ) (522,917 ) Net cash provided by operating activities 28,319,290 18,431,421 Cash flows from investing activities: Purchase of equipment (5,562,283 ) (10,566,182 ) Net cash used in investing activities (5,562,283 ) (10,566,182 ) Cash flow from financing activities: Proceeds from factoring liability 37,252,869 57,300,000 Payments on factoring liability (37,252,869 ) (56,107,221 ) Payments on inventory facility, net - (825,675 ) Payments on note payable - related party (180,850 ) (507,508 ) Payments on insurance premium note payment (3,001,805 ) (1,916,070 ) Proceeds from construction note payable - 1,000,000 Payments on construction note payable (181,639 ) (66,586 ) Preferred stock dividends paid (2,194,792 ) (2,195,075 ) Common stock repurchase plan (2,152,080 ) (291,011 ) Common stock issued for exercised warrants - 56,046 Net cash used in financing activities (7,711,166 ) (3,553,100 ) Net increase in cash 15,045,841 4,312,139 Restricted cash, beginning of period 500,000 - Cash, beginning of period 39,134,027 23,281,475 Cash and restricted cash, end of period $ 54,679,868 $ 27,593,614 Restricted cash, end of period $ - $ 500,000 Cash, end of period $ 54,679,868 $ 27,093,614 (Continued)
AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)For the Nine Months Ended
December 31,2023 2022 Supplemental cash flow disclosures: Cash paid during the period for: Interest $ 548,118 $ 433,761 Income taxes $ - $ 1,302,811 Non-cash investing and financing activities: Operating lease liability $ 1,214,711 $ 901,076 Insurance premium note payment $ 1,056,199 $ 2,035,519 Dividends accumulated on preferred stock $ 144,618 $ 144,334 Construction note payable $ - $ 10,237,032 Warrants issued for services $ - $ 427,639 The accompanying notes are an integral part of these condensed consolidated financial statements.
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
Adjusted EBITDA
For the Three Months
EndedFor the Nine Months
Ended31-Dec-23 31-Dec-22 31-Dec-23 31-Dec-22 Reconciliation of GAAP net income to Adjusted EBITDA Net Loss $ (1,643,989 ) $ (4,102,992 ) $ (10,232,319 ) $ (1,653,472 ) Provision for Income Taxes (465,234 ) (721,125 ) (2,419,883 ) 1,369,427 Depreciation and amortization 4,753,650 4,356,004 14,047,216 12,950,972 Interest expense, net 193,046 320,439 609,561 538,191 Employee stock awards 687,099 2,106,535 2,977,845 4,457,973 Stock grants 50,750 43,750 152,250 135,344 Common stock purchase options 380,045 - 380,045 - Warrant Issuance - 106,909 - 106,909 Other (income) expense, net (4,576 ) 170,403 (376,186 ) (28,193 ) Contingent consideration fair value (39,274 ) (20,326 ) (60,298 ) (45,572 ) Other nonrecurring expenses(1) 1,498,684 3,983,254 8,126,102 4,724,385 Adjusted EBITDA $ 5,410,201 $ 6,242,851 $ 13,204,333 $ 22,555,964 1 ) For the three and nine months ended December 31, 2023, other nonrecurring expenses consist of professional and legal fees that are nonrecurring in nature. For the three and nine months ended December 31, 2022, other nonrecurring expenses consist of proxy contest fees. Reconciliation of GAAP net income to Fully Diluted EPS
For the Three Months Ended 31-Dec-23 31-Dec-22 Reconciliation of GAAP net income to Fully Diluted EPS Net Loss $ (1,643,989 ) $ (0.01 ) $ (4,102,992 ) $ (0.03 ) Depreciation and amortization 4,753,650 0.04 4,356,004 0.04 Interest expense, net 193,046 - 320,439 - Employee stock awards 687,099 0.01 2,106,535 0.02 Stock grants 50,750 - 43,750 - Common stock purchase options 380,045 - - - Warrant issuance - - 106,909 - Contingent consideration fair value (39,274 ) - (20,326 ) - Nonrecurring expenses 1,498,684 0.01 3,983,254 0.03 Tax effect(1) (1,708,026 ) (0.01 ) (2,294,820 ) (0.02 ) Adjusted Net Income $ 4,171,985 $ 0.04 $ 4,498,753 $ 0.04 For the Nine Months Ended 31-Dec-23 31-Dec-22 Reconciliation of GAAP net income to Fully Diluted EPS Net Loss $ (10,232,319 ) $ (0.09 ) $ (1,653,472 ) $ (0.01 ) Depreciation and amortization 14,047,216 0.12 12,950,972 0.11 Interest expense, net 609,561 - 538,191 - Employee stock awards 2,977,845 0.03 4,457,973 0.04 Stock grants 152,250 - 135,344 - Common stock purchase options 380,045 - - Warrant issuance - 106,909 - Contingent consideration fair value (60,298 ) - (45,572 ) - Nonrecurring expenses 8,126,102 0.07 4,724,385 0.04 Tax effect(1) (6,037,463 ) (0.05 ) (4,826,590 ) (0.04 ) Adjusted Net Income $ 9,962,939 $ 0.08 $ 16,388,140 $ 0.14 (1 ) Tax effects are estimated by applying the statutory rate to each applicable Non-GAAP adjustment. For the Three Months Ended
December 31,For the Nine Months Ended
December 31,2023 2022 2023 2022 Weighted average number
of shares outstandingBasic 118,447,154 117,348,511 118,110,943 116,950,013 Diluted 118,447,154 117,348,511 118,110,943 116,950,013