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HomeMilitaryAMMO, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

AMMO, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

AMMO, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

SCOTTSDALE, Ariz., June 13, 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 Fourth Quarter and Fiscal Year 2024, ended March 31, 2024.

Fiscal Year 2024 Overview

  Net Revenues of $145.1 million, a 24.2% decrease.
  Gross profit margin of approximately 29.4%.
  Adjusted EBITDA of $15.4 million compared to $26.4 million.
  Net loss of ($15.6) million, compared to net loss of ($4.6) million.
  Diluted EPS of ($0.16), compared to ($0.07).
  Adjusted EPS of $0.09, compared to $0.16.
     

GunBroker.com “Marketplace” Metrics – Fiscal Year 2024

  Marketplace revenue of approximately $53.9 million.
  New user growth averaged 30,000 per month.
  Average take rate increased to 5.9% compared to 5.6% in fiscal 2023.
     

Fourth Quarter 2024 Overview

  Net Revenues of $40.4 million, a 7.5% decrease
  Gross profit margin of approximately 23.3%.
  Adjusted EBITDA of $2.2 million compared to $3.8 million.
  Net loss of ($5.3) million, compared to net loss of ($2.9) million.
  Diluted EPS of ($0.05), compared to ($0.04).
  Adjusted EPS of $0.01, compared to $0.02.
     

GunBroker.com “Marketplace” Metrics – Fourth Quarter 2024

  Marketplace revenue of approximately $13.6 million.
  New user growth averaged 32,000 per month.
  Average take rate increased to 6.0%
     

Jared Smith, AMMO’s CEO, commented “Sales increased sequentially despite a slower market environment. We continued to make progress this quarter and ended the fiscal year with a strong pipeline of rifle ammunition and casing sales while accelerating our buildout of GunBroker’s capabilities. This is most evident as we start to deliver on our ZRO Delta contract, while continuing the advancement in financing, cross selling, and carting of accessories that will take place with GunBroker in Fiscal 2025.

“AMMO is at a pivotal point as we finish the first quarter of our 2025 fiscal year. We believe we have changed the trajectory of the business in these past 12 months in a way that will lead to increased shareholder value. Our ongoing transition from low margin pistol ammo to high margin rifle cases will sustain a more stable and profitable business model going forward. In addition, GunBroker’s multi seller, multi-item checkout process will enable us to capture a higher margin accessory business, while streamlining the checkout process. As we sit here in June, we believe we have never been more poised for success,” Mr. Smith concluded.

Fourth Quarter and Fiscal Year 2024 Results

We experienced sequential revenue growth in our ammunition segment in the final quarter of our fiscal year in comparison to our third quarter while the margins of the GunBroker marketplace segment remain robust.

We ended the fourth quarter of our 2024 fiscal year with total revenues of approximately $40.4 million in comparison to $43.7 million in the prior year quarter. The decrease in revenue was primarily related to a decrease in activity in our marketplace segment, which we believe decreased as a result of the current macroeconomic environment impacting our industry as well as others. Our casing sales, however, which afford us higher gross margins, increased to $0.9 million up from the prior year period. Revenues for our ammunition segment decreased $0.2 million from the prior year quarter but increased $4.8 million or 21.9% quarter-over-quarter as a result of increased ammunition sales in our fourth fiscal quarter.

Cost of goods sold was approximately $31.0 million for the quarter compared to $31.8 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 $9.4 million or 23.3% compared to $11.9 million or 27.3% in the prior year period. The decrease in gross profit margin was related to the shift in sales mix.

The robust margins on GunBroker remained steady through our final quarter, but the margins in the ammunition segment did not meet expectations. We expect improvement as production capacities increase. Our inventory levels continued to decrease, generating $4.3 million in cash from operations for the quarter, bringing us to $32.6 million for the full fiscal year.

There was approximately $2.4 million of nonrecurring expenses in the quarter related to legal and professional fees, which we have included as an addback to adjusted EBITDA.

For the quarter, we recorded Adjusted EBITDA of approximately $2.2 million, compared to the prior year quarter Adjusted EBITDA of $3.8 million.

We ended the quarter with a Net Loss of approximately $5.3 million compared with a Net Loss of approximately $2.9 million for the prior year period. This resulted in a loss per share of $0.05 for the quarter or Adjusted Net Income per Share of $0.01 in comparison to a loss per share of $0.04 in the prior year quarter or Adjusted Net Income per Share of $0.03. For our fiscal year, a loss per share of $0.16 or Adjusted Net Loss per Share of $0.09 in comparison to Net Income per share of $0.07 or Adjusted Net Income per Share of $0.16 in the prior year.

Looking forward, we are focused on increasing our plant capacity with the recent engagement of a global consulting firm, which should improve the product marginality.

For GunBroker, we launched our cart platform in March of 2024, and will be bringing other efforts online in Fiscal 2025. These efforts may include additional customer financing partnerships such as what we built with Gearfire Capital, which will allow retailers the option to offer flexible financing options to customers. We expect these enhancements will drive sales growth through better functionality and enhanced purchasing power of buyers.

As of now, we believe we are financially well positioned into Fiscal 2025 given our strong net working capital position. We reported $131.5 million in current assets including $55.6 million of cash and cash equivalents along with $30.9 million of current liabilities. Additionally, we generated $32.6 million in cash from operations for the period.

Conference Call

Management will host a conference call at 5:00 PM ET today, June 13, 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/10188534/fc5c14c674

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. Fourth Quarter and Fiscal Year 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=FE9IBGzz, 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 Reports filed on Form 8-K.

Investor Contact:
CoreIR
Phone: (212) 655-0924
[email protected]

Source: AMMO, Inc.

AMMO, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

    March 31, 2024     March 31, 2023  
             
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 55,586,441     $ 39,134,027  
Accounts receivable, net     28,221,321       29,346,380  
Inventories     45,563,334       54,344,819  
Prepaid expenses     2,154,170       5,126,667  
Current portion of restricted cash           500,000  
Total Current Assets     131,525,266       128,451,893  
                 
Equipment, net     58,082,040       55,963,255  
                 
Other Assets:                
Deposits     349,278       7,028,947  
Patents, net     4,539,290       5,032,754  
Other intangible assets, net     111,049,067       123,726,810  
Goodwill     90,870,094       90,870,094  
Right of use assets – operating leases     2,000,093       1,261,634  
Deferred income tax asset     1,487,088        
TOTAL ASSETS   $ 399,902,216     $ 412,335,387  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liabilities:                
Accounts payable   $ 23,156,495     $ 18,079,397  
Accrued liabilities     7,030,667       4,353,354  
Current portion of operating lease liability     479,651       470,734  
Note payable related party           180,850  
Current portion of construction note payable     273,459       260,429  
Insurance premium note payable           2,118,635  
Total Current Liabilities     30,940,272       25,463,399  
                 
Long-term Liabilities:                
Contingent consideration payable     59,838       140,378  
Construction note payable, net of unamortized issuance costs     10,735,241       10,922,443  
Operating lease liability, net of current portion     1,609,836       903,490  
Deferred income tax liability           2,309,592  
Total Liabilities     43,345,187       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 March 31, 2024 and March 31, 2023, respectively     1,400       1,400  
Common stock, $0.001 par value, 200,000,000 shares authorized 120,531,507 and 118,562,806 shares issued and 119,181,067 and 118,294,478 outstanding at March 31, 2024 and March 31, 2023, respectively     119,181       118,294  
Additional paid-in capital     396,730,170       391,940,374  
Accumulated deficit     (37,620,566 )     (18,941,825 )
Treasury Stock     (2,673,156 )     (522,158 )
Total Shareholders’ Equity     356,557,029       372,596,085  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 399,902,216     $ 412,335,387  


AMMO, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

    For the Three Months Ended
March 31,
    For the Years Ended
March 31,
 
    2024     2023     2024     2023  
                         
Net Revenues                                
Ammunition sales   $   22,445,216     $   23,508,227     $ 69,390,801     $ 114,116,044  
Marketplace revenue       13,570,124         16,662,831       53,942,076       63,149,673  
Casing sales       4,405,807         3,512,664       21,721,695       14,174,084  
        40,421,147         43,683,722       145,054,572       191,439,801  
                                 
Cost of Revenues       31,021,560         31,773,675       102,431,803       136,031,204  
Gross Profit       9,399,587         11,910,047       42,622,769       55,408,597  
                                 
Operating Expenses                                
Selling and marketing       547,981         742,326       1,370,079       4,729,540  
Corporate general and administrative       7,976,832         7,059,882       29,583,274       24,980,079  
Employee salaries and related expenses       3,607,354         4,264,701       16,703,822       15,679,135  
Depreciation and amortization expense       3,425,790         3,328,010       13,542,791       13,278,762  
Total operating expenses       15,557,957         15,394,919       61,199,966       58,667,516  
Loss from Operations       (6,158,370 )       (3,484,872 )     (18,577,197 )     (3,258,919 )
                                 
Other Expenses                                
Other income/(expense)       (708,779 )       (3,012 )     (332,593 )     25,181  
Interest expense       163,088         (93,871 )     (446,473 )     (632,062 )
Total other expense       (545,691 )       (96,883 )     (779,066 )     (606,881 )
                                 
Loss before Income Taxes       (6,704,061 )       (3,581,755 )     (19,356,263 )     (3,865,800 )
                                 
Provision for Income Taxes       (1,371,180 )       (639,189 )     (3,791,063 )     730,238  
                                 
Net Loss       (5,332,881 )       (2,942,566 )     (15,565,200 )     (4,596,038 )
                                 
Preferred Stock Dividend       (782,639 )       (765,625 )     (3,122,049 )     (3,105,034 )
                                 
Net Loss Attributable to Common Stock Shareholders   $   (6,115,520 )   $   (3,708,191 )   $ (18,687,249 )   $ (7,701,072 )
                                 
Net Loss per share                                
Basic   $   (0.05 )   $   (0.04 )   $ (0.16 )   $ (0.07 )
Diluted   $   (0.05 )   $   (0.04 )   $ (0.16 )   $ (0.07 )
                                 
Weighted average number of shares outstanding                                
Basic       118,775,757         117,874,162       118,249,486       117,177,885  
Diluted       118,775,757         117,874,162       118,249,486       117,177,885  

AMMO, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

    For the Year Ended
March 31,
    2024     2023  
             
Cash flows from operating activities:                
Net Loss   $ (15,565,200 )   $ (4,596,038 )
Adjustments to reconcile Net Loss to Net Cash provided by operations:                
Depreciation and amortization     18,813,897       17,519,949  
Debt discount amortization     83,253       83,253  
Employee stock awards     4,082,108       5,807,779  
Stock grants     203,000       179,094  
Common stock purchase options     430,457        
Stock for services            
Contingent consideration payable fair value     (80,540 )     (63,764 )
Allowance for credit losses     419,527       191,299  
Loss on disposal of assets     259,540        
Reduction in right of use asset     476,252       629,140  
Warrant issued for services           213,819  
Deferred income taxes     (3,796,680 )     730,238  
Changes in Current Assets and Liabilities                
Accounts receivable     705,532       14,417,405  
Due from related parties           15,000  
Inventories     8,781,485       4,671,333  
Prepaid expenses     4,028,696       2,763,855  
Deposits     6,679,669       4,306,375  
Accounts payable     5,077,098       (8,694,813 )
Accrued liabilities     2,532,695       (1,970,078 )
Operating lease liability     (499,448 )     (647,480 )
Net cash provided by operating activities     32,631,341       35,556,366  
                 
Cash flows from investing activities:                
Gemini acquisition            
Purchase of equipment     (8,024,765 )     (12,541,325 )
Proceeds from disposal of assets     3,750        
Net cash used in investing activities     (8,021,015 )     (12,541,325 )
                 
Cash flow from financing activities:                
Payments on inventory facility, net           (825,675 )
Proceeds from factoring liability     37,252,869       71,348,761  
Payments on factoring liability     (37,252,869 )     (71,834,432 )
Payments on assumed debt from Gemini            
Payments on note payable – related party     (180,850 )     (684,921 )
Payments on insurance premium note payment     (3,174,834 )     (2,134,143 )
Proceeds from construction note payable           1,000,000  
Payments on construction note payable     (257,425 )     (150,743 )
Payments on note payable            
Sale of preferred stock            
Common stock issued for exercised warrants     76,200       101,506  
Common stock issuance costs            
Preferred stock dividends paid     (2,968,923 )     (2,960,416 )
Common stock repurchase plan     (2,152,080 )     (522,426 )
Net cash used in financing activities     (8,657,912 )     (6,662,489 )
                 
Net increase in cash     15,952,414       16,352,552  
Cash, beginning of period     39,134,027       23,281,475  
Restricted cash, beginning of period     500,000        
Cash and restricted cash, end of period   $ 55,586,441     $ 39,634,027  
Restricted cash, end of period   $     $ 500,000  
Cash, end of period   $ 55,586,441     $ 39,134,027  

(Continued)

    For the Year Ended
March 31,
    2024     2023  
             
Supplemental cash flow disclosures:                
Cash paid during the period for:                
Interest   $ 667,063     $ 665,043  
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     $ 4,252,778  
Dividends accumulated on preferred stock   $ 144,618     $ 144,618  
Construction note payable   $     $ 10,237,032  
Acquisition stock issuances   $     $  
Warrant issued for services   $     $  


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 Loss to Adjusted EBITDA

    For the Three Months Ended
      31-Mar-24       31-Mar-23
               
Reconciliation of GAAP Net Loss to Adjusted EBITDA              
Net Loss   $ (5,332,881 )     $ (2,942,566 )
Provision for income taxes     (1,371,180 )       (639,189 )
Depreciation and amortization     4,766,681         4,568,977  
Interest expense, net     (163,088 )       93,871  
Employee stock awards     1,104,263         1,349,806  
Stock grants     50,750         43,750  
Common stock purchase options     50,412          
Warrants issued for services             106,910  
Other income, net     708,779         3,012  
Contingent consideration fair value     (20,242 )       (18,192 )
Other nonrecurring expenses(1)     2,372,888         1,248,865  
Proxy contest fees(2)              
Adjusted EBITDA   $ 2,166,382       $ 3,815,244  

(1) Other nonrecurring expenses consist of professional and legal fees that are nonrecurring in nature.
(2) Includes proxy contest fees of $910,000 for Employee Stock Awards issued as a result of the Settlement Agreement as discussed in Note 17 of our consolidated financial statements.

    For the Year Ended
      31-Mar-24       31-Mar-23
               
Reconciliation of GAAP Net Loss to Adjusted EBITDA              
Net Loss   $ (15,565,200 )     $ (4,596,038 )
Provision for income taxes     (3,791,063 )       730,238  
Depreciation and amortization     18,813,897         17,519,949  
Interest expense, net     446,473         632,062  
Employee stock awards     4,082,108         5,807,779  
Stock grants     203,000         179,094  
Common stock purchase options     430,457          
Warrants issued for services             213,819  
Other income (expense), net     332,593         (25,181 )
Contingent consideration fair value     (80,540 )       (63,764 )
Other nonrecurring expenses(1)     10,498,990         1,248,865  
Proxy contest fees(2)             4,724,385  
Adjusted EBITDA   $ 15,370,715       $ 26,371,208  

(1) Other nonrecurring expenses consist of professional and legal fees that are nonrecurring in nature.
(2) Includes proxy contest fees of $910,000 for Employee Stock Awards issued as a result of the Settlement Agreement as discussed in Note 17 of our consolidated financial statements.

    For the Three Months Ended  
    31-Mar-24     31-Mar-23  
Reconciliation of GAAP Net Loss to Fully Diluted EPS                                
Net Loss   $ (5,332,881 )   $ (0.05 )   $ (2,942,566 )   $ (0.03 )
Depreciation and amortization     4,766,681       0.04       4,568,997       0.04  
Interest expense, net     (163,088           93,871        
Employee stock awards     1,104,263       0.01       1,349,806       0.01  
Stock grants     50,750             43,750        
Warrants issued for services                 106,910        
Contingent consideration fair value     (20,242 )           (18,192 )      
Common stock purchase options     490,755                    
Nonrecurring expenses     2,372,888       0.02       1,248,865       0.01  
Tax effect     (1,848,767 )     (0.01 )     (1,566,604     (0.01 )
Adjusted Net Income   $ 1,420,359     $ 0.01     $ 2,884,837     $ 0.02  
    For the Year Ended      
    31-Mar-24     31-Mar-23  
Reconciliation of GAAP Net Loss to Fully Diluted EPS                                
Net Loss   $ (15,565,200 )   $ (0.13 )   $ (4,596,038 )   $ (0.04 )
Depreciation and amortization     18,813,897       0.16       17,519,949       0.15  
Interest expense, net     446,473             632,062       0.01  
Employee stock awards     4,082,108       0.03       5,807,779       0.05  
Stock grants     203,000             179,094        
Warrants issued for services                 213,819        
Contingent consideration fair value     (80,540 )           (63,764 )      
Common stock purchase options     430,457                    
Nonrecurring expenses     10,498,990       0.09       5,973,250       0.05  
Tax effect     (7,886,230 )     (0.06 )     (6,393,194 )     (0.05 )
Adjusted Net Income   $ 10,942,955     $ 0.09     $ 19,272,957     $ 0.16  
    For the Three Months Ended
March 31,
    For the Years Ended
March 31,
 
    2024     2023     2024     2023  
Weighted average number of shares outstanding                                
Basic     118,775,757       117,874,162       118,249,486       117,177,885  
Diluted     118,775,757       117,874,162       118,249,486       117,177,885  


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Originally published at https://www.einpresswire.com/article/719809160/ammo-inc-reports-fourth-quarter-and-fiscal-year-2024-financial-results

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