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.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:CoreIRPhone: (212) 655-0924

Source: 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 EndedMarch 31,     For the Years EndedMarch 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 EndedMarch 31,     For the Years EndedMarch 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  
AMMO (NASDAQ:POWWP)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more AMMO Charts.
AMMO (NASDAQ:POWWP)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more AMMO Charts.