POWW - Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the AMMO Inc. Fiscal First Quarter 2023 Earnings Call. At this time all, participants are in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. recorded this call advised over is and also of of the the Participants is conference purposes. this being being Instructions] call that are audio Internet [Operator playback for broadcast live would of IR Blazei like to firm. Investor CORE turn call the the I over now Matt Relations company’s to Please go ahead, sir.

Matt Blazei

you thank for conference and in morning, today’s call. Good participating

Financial Joining Executive Officer; Chief me Chairman Officer; Rob Wagenhals, and and from AMMO’s Fred leadership Goodmanson, President. Wiley, team Chief are Rob

statements be will AMMO’s making management that call, including or address for statements, results. this performance future During expectations forward-looking operational

cause statements results statements. and Forward-looking risks other involved differ factors those that from may actual materially to

company’s press includes conference the For Today’s that more the can be evaluating releases sec X-K in Factors filed Risk most filed call, useful that information believes the recently about accompanies XX-Q, these call periodic statements reports refer cautionary XX-K Form particularly to AMMO and in in Form today performance. AMMO’s please the the it. with non-GAAP measures described financial on this risks, Form its and

consider should isolation substitute a as in information GAAP. results additional prepared You or for accordance in with this not

turn publicly obligation With the or to XX, AMMO’s or by circumstances For a August any net call. GAAP now its after AMMO any reconciliation as today, contains call to occur Fred to this that measure. accurate financial reconciliation Wagenhals. to is over information non-GAAP that, is comparable press the my the directly update only table of required information XXXX. content Except of Please see in CEO, company’s reflect of this measure financial that located as revise most earnings loss, The this release. call disclaims it time to sensitive pleasure events law

Fred Wagenhals

and superior enhance growth. management our platforms ammunition revenue in two marketplace into the through XXXX, we This and expand Matt, facility of everyone that Wisconsin, $X outdoor at Directors example overall is the this identified strategy million in The enthusiasts $XXX IPO good execution. manufacturing for AMMO innovation, and recent for public continued shareholder team how in marketplace management create GunBroker.com team Manitowoc, million both sporting Board and acquisition products has XXXX integration has for and our executed the driven fiscal to splitting new by revenue XXXX. to key our create from the Since Board in primary new XXXX of companies. you, estimated completion in option goal traded excellent best with separately and shooting Along a been afternoon our value the best-in-class the value opportunities fiscal focus platform has and on our and determined experience believe has and most divisions AMMO to of an Thank call. Accordingly growth. the to unique brand the that to of the state-of-the-art the unlocking divisions are in and is shareholder for

of comprised soon business will be Our online be online Incorporated called Online, comprise and GunBroker.com marketplace and will Outdoor – related and businesses.

create our believe We Incorporated evaluate hunt and investors business to this entity separation and second AMMO allow Line, current shareholder will better action of greater Outdoor Blue value. including bras support model Sports, Stelth, Blackline, ammunition. division business, each The will STREAK, ammunition the

percentages outdoor auction manufacturing spinoff, investors of CEO I and and related will Sports of recreational distinct GunBroker.com will and our and increase acquirer timed As the named the the production growth capacity the outdoor we an Outdoor and CEO of officially to both The support and call, soon to volume the manufacturing cards this – Chairman facility buyers who well great specialty shooting the marketplace. and loyalty when participate AMMO. creation After significant we square last and continue are This platform, in active for opportunities. capture products, and enforcement. XXX,XXX sales to online Chairman approximately credit opportunities to the of programs directly within This the state-of-the-art of processing ammunition initiatives I is action a lead marketplace last we marketplace. X facility and leading the to platform, believe ammunition, asset-light will billion continue there I that strength, we growth rounds our military the and patented retain month. as visual, transactional Board Online be from will sellers. Outdoor continue increased subsonic, to of new loaded several be its mentioned Sports as remain and on grow leverages and margins as company’s it credit gift and of pursue high capacity munition, in begin significantly our sport will operate rounds and unique Outdoor rollout will give the including operations opportunity of cards, opened foot the for be action law naming

more update anticipate even now operational I to like this the year. We to growth further on and to about confident greater performances and be and will the unlock in quarter. independent calendar turn the of enhance drive on will both value. separate shareholder companies management having to shareholder to confident our we the completed I public Rob am focused this grow these the decision over the the now future With transaction continue margins opportunities, will value would Goodmanson XXXX will businesses and progress provide resources are initiatives transaction revenues, hard I detail continue to call teams AMMO two both shareholders create. have companies into worked President, exclusively to

Rob Goodmanson

asked earnings of what this Thanks, all vibrant The This calls, earnings The state basis on Clarus’ and Fred, is the and industry saying and growth welcome has I’m and exactly everyone are of industry? a still no to grown legs we the our morphed to slowing fully in U.S., regular listening Vista, they’re seeing. our call. Olin is significant a shows question This last is our to that growth industry quarterly these trend not marketplace. globally. XX down. XX% unrest, civil only expect we tailwinds but of minimum out growth, started since as COVID through be months, just traffic has And the We’ve also of annually sign approximately XXXX. seen into but which can AMMO’s in not what

make Sales good The been are a rest to and prices. significantly issues. our lower the which be the were costs issue facility decrease significantly have an changes same on margins. The increased and highs depending the see, to the is quarter we can trading all just worked point to prices, Thus, in prior also been operations. for during up run points three commodities addressed our goods to compression their of new ramp new took they in The that the hiring margins the docks, it building. would company. of same quarter. the Shipping hiring had point best has continued and game. training, much over through We dramatically, lost through train on and during six determined you were in has and that had for we’ve with increased. of and The our the identified commodity cost takes that X position, strong the quarter. off production every As addressed the opening being months our beginning is inventory a We temporary X We but it we at news up. answered. our have shipping X decision loading that months hire Most employees have which in replacing the to alone their XX

forth Some the came significant August equipment of the of equipment will capabilities components of new be spot, of engineering This to the have installed economies three customer drive code the only a will all our offline the expenses. fully governmental. support of pack new our the the ability short-term facility between our We of the our equipment the preparing will program military having during margins. support to us All also facilities. will we different facility Currently, ourselves production for and our and one shipping uptick. back offers synergies international drive not some significantly the put as and the position both well were that our These and scale, enhancing move. and quarter in state-of-the-art production as at commercially in believe the end growing in base, first best in partners together

house software engineers. more in also been engineers and extremely marketing team, reps, three two customer hired busy. for people We marketplace our Our additional five has service

I’d programs with progressing to October behind. our and business. need offerings to carting gun to right capabilities where the from continue But FFLs to successful hugely move We out get to coming a are away online like and cards, nicely. ACH, credit and dealers, auction our to add in of will distributors our be that to loyalty broker expand absolute gift financial end be. our become to manufacturers, necessity. complete never service, technology marketplace. be was objective back we This cards will The is an build Things

buyers users We’re achieving adding more is easy users broker potential more home refreshed million and to significantly with and sellers. a as see XX,XXX and gun a a navigate We enormous on new website shortly. for than a per the you’ll month. the huge both Shortly, still this $X.X day, run see X.X accommodating million registered sessions that here

As will businesses ammunition companies, to independent Fred which of and had value. completed to mentioned, the voted this our publicly split assessment our plan opportunities and Board management Directors units unanimously Directors Board that separate operations, goal two into achieve two the the would shareholder the NASDAQ and announced and we on business and a unlocking companies market. trade traded and and enhancing team of AMMO’s detailed of growth analysis marketplace of determined

focus distribution Clarus, brands. retain is in a both our of been which and we outdoor cost. be Olin, federal through in U.S. will free, refine which become on ticker We symbol name Vista, symbol. to shareholders outdoor be allow intended tax Outdoor under Online action allocation. Similar while us will we be also strategies no anticipate names transaction once moving on allocation online continuing ownership new sports, will arms, publicly a the Both of are advised process. tax Barnes. Federal and we prioritize business new that capital to leading additional designed this companies And which change are to purposes. independently and to distribution of shareholders companies to each long-term the soften its transaction short will strategic to and be AMMO With is a stock Concurrently, XXX% ownership approval will focus will goals, Outdoor company. in NASDAQ, sports to marketplace. in a separate work operate is forward company models, the at better leverage opportunities. the its This capital Action shareholders will obtaining will and better This Winchester, in form traded to income its dividend and to our attain changing refine will and position Sierra, which AMMO positioned to outdoor through expand is action have

look our let has Wiley, Rob? can securing Outdoors M&A the new Action reinforce Rob With ability turn me spinoff with exciting that, best-in-class we track partnerships and its attract and and of to continue While well and top moving CFO. and forward This and been an over to into the to established market finally this record talent. amplify manufacturers our time retain completing the other facility.

Rob Wiley

you, Thank Welcome everyone. Rob.

sales, increase approximately Ammunition, Let an an operations, of quarter million of the and ammunition, me was revenue, end rifle casing pistol $X.X from of million of of period. approximately shipping increased approximately in increase approximately for of a financials GunBroker.com, This includes net of sales bulk million $X.X approximately XX.X% increase first and which a a payment more income. revenues decrease revenue from sales now generated and of or our prior XX Total $XX.X $X.X our auction Proprietary marketplace our revenue and processing $XX.X over increased June comparable year of our detail. review million result million quarter

to sales the Standard the of our rate expect Proprietary continue Ammunition. of sales to growth Ammunition We outpace

lines continuing international on focused to are product top enforcement, U.S. new we as continue military line the to further and markets, and expand law We and distribution sales continue to grow revenue markets. initiate in to commercial introduce

costs and to fiscal our new near-term the labor material attributable in to percentage that quarter. year second markets through grow margin as XX.X% current increase overhead add This will sales which and decreased fiscal temporary gross fully efficiencies as new our margins temporarily was fully second this online facility, facilities distribution increases quarter. of for in well by our scheduled our through are our gross fiscal cost manufacturing continue production of year. additional as operational come we primarily until are expect we new be preparation We to of this and also operational end we the expand the believe and half to in to Our

relationships prior labor of have costs a developed of and providers. in automation percentage result through Reduce of component productions through mainly military a the segment period strategic comparison product increased products. margins of XX in XX of like full approximately This of quarter, prior is sales, ammunition expenses of specifically sales in lines Stelth GunBroker.com our with to higher sales. our the points better and continue operation support finished ammunition to a acquisition. a to the ammunition to AMMUNITION, goal partial And Introduction the of in that use next required proprietary quarter as our due total VISUAL to following. Increased million or carry expanded the operating improve This year the a objectives. of of timing our over be ammunition period assemble Overall, through for year by will Expanded fixed the margins. GunBroker reduces gross quarter Our leverage consumer our to support of government the we lines basis the that government XXX and equipment months $X.X operations accomplished is programs. historically and component and of the sectors. STREAK a new expansion costs

related expenses expenses increases, a of We as compared issuance to consisted million sales expect of earlier. as of non-cash depreciation common the the million. and year expenses period. sales stock the Operating Operating percentage stock during to $X.X $X.X our also approximately include compensation with for workforce XXXX fiscal and included expense leverage members quarter compensation the million our of employees of see expenditures and in expand Operating and commissions decrease administrative sales and period income $X.X associated board for lieu the cash and the amortization $X.X million we operating of and our was year approximately for to of income non-cash opportunities.

net $X.X the of As the full mostly in the operating percentage period prior of to income was with addition to decrease compared a with X.X%. to $X.X period our had net in ended approximately provision which income million in was in We allowance. approximately current attributable in margin quarter a of a and decrease revenues, the in net income tax a million comparison period valuation year the prior we year

according prior to quarters, our year. in we income As coming net margin the increase increase our expect we comparison to to

was earlier. adjusted $XX.X non-GAAP goal and refer reconciliation period. attributable temporary adjusted our controlling for net Adjusted per the to $X.XX is of year discussed mostly an decrease on the decline million expenses. our as for measure Our GAAP period. operating in $X.XX diluted to in release EBITDA results continue adjusted focus versus Adjusted was was is as and income today’s of the you in of EBITDA margin results note net $XX.X the to EBITDA of ammunition prior The improve share details. press adjusted that additional we in earlier should EBITDA non-GAAP to segment sales our the share income increasing a gross million Please year our operating in compared to

and in to million, of in the by announcement $X.X by approximately of for for $X.X $XXX million $XX range million back revenues more in $X.X decreases from $XX of to range in ammunition million, of inventories and report receivable totaled $X.X of EBITDA and our of our segment is million. adjusted guidance approximately the approximately market our turn adjusted which I reiterating Non-cash in critical income range payable transformational revenues EBITDA approximately will segment million to range given the in million. expenses Fred. million. are million. it awards amortization accounts takeaway million to in EBITDA increases for $X.X million, was the the of The $XX million, of $XX $XX of primarily non-cash and $X.X depreciation net with $XXX and million spinoff transaction, of guidance operations of our Our expenses to of year range million stock $XXX million million million that, million decreases and $XX million today’s fiscal the of cash that accounts provided to we specifically, adjusted This for offset is the the $XX marketplace of employee And in result net million total totaled $X.X of EBITDA our our million. EBITDA XXXX earning And recent million the and XX of in revenues $XXX EBITDA our to $XX $XXX range to our $XXX for

Fred Wagenhals

you, the over questions. to the I Thank call Thank will you. for operator now Rob. turn

Operator

question ahead. first James. is Dwyer go with Michael from Our Instructions] Please [Operator Raymond

Michael Dwyer

Hi, everyone. Congratulations on your spinoff.

a mind Just to questions here. come few

For a stockholders? is why good the first the shareholder, AMMO, spinoff Inc. average

Rob Wiley

Thank advisors will not two with This data ultimately you really the to appropriately. the valuing known you will will for be in XX management the that And your their our in future position our here, one the traded team is being of increase long-term companies pop-up past put the as two end the shareholders our of Sports, only over months combined Outdoor GunBroker.com the this really value separately to And their Directors companies, Rob Online. we indicated the or Action We good Outdoor which will think best that spinoff question, for and market the up because Board companies. Mike. is manufacturing and – and shareholders, be being shares with our other think you’re is Wiley. company,

the So some the that forward of move two decided of reasoning why we is companies. spinoff to with the

Michael Dwyer

your the telling the time investment do you have year, you of think are What this you about it terms in bankers will occur? your next year, advisors, spinoff when

Rob Wiley

Thanks, Mike.

this the morning, the of in to So be mentioned spinoff expect release in we that calendar complete we XXXX.

advisors hearing from excuse approvals, take this days that anywhere complete. XX to regulatory XXX process We’re can to me, subject from

Michael Dwyer

of So free can for large A a big should Why really very shareholders transaction? deal that a this tax this shareholders. comfortable you you feel dividend existing type to guys. is handle

Fred Wagenhals

Wagenhals. is Mike, Fred this

back Going me $XXX employees in performance. company a the I or done And with people. had I table what XX a three started right ago, here. the it action company. to people years card you about That’s the build do job for the in was hired the followed for million when sales. $XXX million right to year I’ve I

will all record the five look you made facility And world Jagemann it’s over in about it million, we’ve budget. of today. for I’m – short looking added sure of the found more off. in to and $XXX uplisted anything months, we looking we probably square to and And people but Outdoor would no operated in at or class time, we the looked all add in XXXX – I’ve key we a is people that completed handle up contract that at three debt issue SWK, people. by the he’s key foot and and last, the – I for the with maybe million few to done designed NASDAQ am to and one new $X GunBroker I’ve without probably bank If be to And Russell cash $XXX the million – years person I companies people? an XXX,XXX opened time and that and probably do people have eight spend two offerings other the because under CEO he bring acquisitions, Action proud from company. was staff, to for I

in So that’s an my one accomplishment, of hell opinion.

Michael Dwyer

Fred. This exciting. Congratulations. is

Fred Wagenhals

Thanks.

Operator

ahead. with question Matt go The ROTH Capital. next from is Koranda Please

Matt Koranda

got Hey here. few a guys. I’ve

with me. So just bear

sort wait the why of why bit spin, detail think now not the has a on the now Manitowoc until why I of just Maybe ramped. question timing. On is key right is, been – little

Fred Wagenhals

question, Matt. production as your will ramp – the now instead waiting of is is for There the ramp Thanks up the we increase for dramatically.

We at to where to shareholders ramp that an are value level the think, and in it currently by opportunity, view a significant spin I just itself. receive have going

different advantage to lot take have of of that and We them. need a opportunities see we we

significantly two can different start So and as and split each on of works to two short companies long-term the up the we better. these goals focus we of companies, it

So is the this. this get unlock present the the to time spun us unlock And flow. free shareholder stayed more with we we’ve need shareholders now done we this need need We everything like can cash to to value, feel, and it. create we doing this for who do there’s to no to and start we

Matt Koranda

margin all the Okay. first quarter. business of much just help drastically that a And that all rate on production, did curious I’m came have pretty declined run the we question we online down sort us revenue’s now in well? curious help from just are first it. quarter because see then then as with at out holding the production right and facility. us Got or then pricing well. Maybe as offline $X volume came is there, I just back it Maybe million. what’s And I’m revenue and how just just a ammunition that the degradation back in of understand – the fourth

Fred Wagenhals

Sure.

We’ve shipping and to seeing for did moving first issue down down to shipping point equipment our some what the Let’s end up the to, a of so mm running XXX, different done from shut We kind bit. a at be had of one with the which our here, we’re receiving, this is a we past which think question. it time, equipment. And and the have what A, and X some that softening could allows and we it is conversation couple The things, we’re into to a should us away get of morphing the some margins prior by back which will equipment. be and facility bring of rifle, line, demand hunting. those things only two, are the large needs your still totally just or means higher and into hunting we in huge it margin outweighing with be go to existing pistol also little got specialty the little currently little month, of move you be a ability door and at number significantly to we of medium your to bread and some Again, the rounds. know, more produced rounds, The in needs the we butter or prices. is unique produce. taken – whether doing rifle part and that seen rifle, supply care we’ve we The production the

Matt Koranda

Okay. sense. That makes

to think But at level? should production? terms Because like in of we volume, a pricing the back are? of you’re on sort how full this what retail but about It know levels a in? blended production capacity of down, X wholesale follow-up that. given bit headed to then the of about full we we maybe took you a be should to ramp Just sort thinking how you’re say the what about be capacity end billion rounds, annualized we here should think where that on be and is penciling seems when of we step price? month, should about little stocking understandable Roughly, about it just And which thinking I by

Fred Wagenhals

on start at machines not we come some X say in at things continue Well, and as of and space more To the production, we off which a initially billion Again, rounds just maybe the obviously in for packing machines would more I running to the number, and automation has heavily all full with and are out, been probably have let’s think into now, if the weighted machines won’t things a rounds are shipping, increase for a specialty we we’ve own, pluses. little added streak increase. we XXX, the green I our hooked have that being have been demand. up. to have daily put I been really say, XXX see we production, when in right give continue of which say, you on, the ease turned at heavily of would are you rounds that sizable these start But would million now, in you high bring streak, packouts, – ease immediately the that still significant were

Matt Koranda

fully is like, when billion. – should Okay. ramped, And what then assume of I sort into be ramping we Manitowoc the

is The helpful, fiscal come until or of of it does Rob. not the XXX kind So toward billion comes XXXX half latter XXXX?

Rob Wiley

XXXX. the would half I say latter of

Matt Koranda

to how or I’m back normalize something backing into just maybe Do sort range get commodities, in levels. of business. Helpful. other AMMO back the here. and let mid-XX% kind Okay. things in of jump – I’ll – a more the But maybe X,XXX that queue point of others just us year, back in XX% one labor into pre-hired listed then you bridge And basis I’ll normalized And the just and costs, do so. how much remark. the comes have then back core shipping hired the we think, couple prepared you better in improvement, from ramp, the the have range? guys much just utilization of half sort there the ahead mic just us the the But on gross improved I and then the margins of in with from of comes

maybe could if for very bucket helpful. just out be you that’d So us it

Rob Wiley

Yes. Thanks, Matt.

mainly to our we separately, you to segment was expenses, costs, increased margin. through the materials As overhead ammunition but – materials decrease we our transition problem. believe That a due that related have we’ve the into as facilities costs for worked we labor, mentioned, in way quarter did our new the

fully which feel we mentioned the had are here, guidance pretty we that that end to by earlier that the expect and second margins confident As we operational mid-XX%. normalcy the be the we And facility, return on of we that’s expect our call. our you our in in this new to why quarter to reiterated

contribute improvements above, of to the commodities, going efficiencies, from the think that’s that to mentioned had all the that’s coming utilization, I increase. you margin really

feel to forward. be just guidance in temporary we confident margin and we reiterate will moving and in our decrease So is

Matt Koranda

right, it it. guys. I’ll Appreciate All leave there

Rob Wiley

Thank you.

Operator

The go with Please next question is Lake from Mark ahead. Smith Street.

Mark Smith

Hi guys.

trends, First, about the broadly pullback here can quarter? consumer applies in any you talk June it especially spending buying the GunBroker. as Did in environment just you to see

Fred Wagenhals

we our size and from increased quarter actually previous the ticket No, previous the haven’t year. average

So at that seeing all. we’re not

Mark Smith

of a Is of that we – just the as kind we of haven’t is little these had year-over-year being the summer year yet in months. lower some kind seasonality at Okay. to just seasonality here, down a sales see look GunBroker that and sequential

Fred Wagenhals

there quiet seasonality side think starting you – up the ammunition as is and as into it the will correct. time is picks usually some That season does moving well. that, September I Well, and hit more a in hunting it totally

Mark Smith

or would hard Okay. kind of you piece as place. can a the plans significantly then move to be about can heard we guys think others in capacity find casings plant, to to brass which insight the additions from Is of puts peers production new we’ve And and talk brass about great? a we you the give as about being the industry, any right there ramp us good now, you think in brass,

Fred Wagenhals

get competitors. a secret for don’t I it be our and to than use it all it said plan our think was if other brass Well, would rather to out people I

constant. We will always have some with stay manufacturers, so that will always do agreements do that. other We

internally going in And and more so just than increase be production sell utilized build brass the I to it. is it think

Mark Smith

any about quarter, we impact kind here. quantify June some the of if can one time switch began in and about over you I I’m think then know primarily – you don’t thinking as all, at what revenue And this then type the and that kind of of revenue in and in revenues quarter. late negative potentially ammunition that of would at to impact as full July kind impact and transition maybe look in QX we September hurt

Rob Wiley

have thanks, Mark. impact preparing facilities as ship we out the And our Yes. that quarter you’re we in to exactly able revenue the this here. were earlier, begin to ended in right. And mentioned June We that did and were July, move

But the quarter. around expecting in of out also that to one in revenue as facility, will we’re coming this what nimble more are docks shouldn’t mentioned, the guidance XX impact we’ve see moving be likely year much out of. new overall the – of in our our level what And we in the capacity the with it As September process new terms that we’ll and revenues out shipping the with online. operating of been facility opposed Robert increases of into

to it’ll in So excited the facility nice here. and really be be we’re change a new

Mark Smith

Okay.

things but currently good side, quarter the noise be coming AMMO there this on from still that So just some in over. switch might in the we’re

Rob Wiley

I fair to Yes, think say. that’s

Mark Smith

guys. you Thank Okay, perfect.

Rob Wiley

you, Thank Mark.

Operator

Edward is go with next EF from The Hutton. Please question ahead. Riley

Edward Riley

guys. for question. taking Thanks that Hey,

an going are For is pursuing outdoor strategy. Outdoor Online, it’s online be to of Was brands recreational comprised and And be you if you to going wondering acquisition the targeting? Spinco so, mentioned of type GunBroker.com related businesses. what if

Fred Wagenhals

the question, Eddie. Thanks for Yes.

I to the brands, think right destination brand. margins this which As it I from far already you but the going one as the individuals may work online incredible have M&A be, that’s We from see picked cart there’s to vehicle Outdoor could buy for some the as our coming ability nothing as to and able with the up question view say, additional you’re multiple buy do adding goods, history, Outdoor want products, is products, for now not would to to become, with even the time, I nothing, is of increase on at really a Sporting us. Online it surface sellers service financial that being out

where not broader, back a to be marketplace, facilitate little the a wouldn’t the Thus, be up the customer could end would want a front changes any the different be to acquirers making really we be they’re it And all we number more and marketplace. think We the the service. into sellers rather we’re want We for inventory actual buy do and end for manufacturers. pick so on I and bricks get the and marketplace really having of like to brands. it’d that to mortars. going holding

Rob Goodmanson

could be… There also

Edward Riley

go – ahead. Okay

Rob Goodmanson

be opportunities equipped. manufacturing we It’s There also could built facility, well the Sports, action facility. some state-of-the-art Outdoor for our

always company might that that looking into fit We’re something for also.

Edward Riley

be else focused activity it branching you Will maybe are or firearms, potentially? into something Okay. on outdoor recreational guys

Fred Wagenhals

running it there great as they Could our manufacturing just got facility. great it. be built say, We something a be fits that people we department. something up could a engineering got and facility else, We good

is features something like a exclusively patent has something some is to so. has it we’re look and for So that unique, design or that has, we building either for someone always to else nobody that

Edward Riley

Okay, great. excise net And revenue then revenue just housekeeping on tax? the revenue or guidance, is after this growth

Rob Wiley

Thanks. be statement revenue net filings the operations that our would This of our reported revenue. be and on would

Edward Riley

for you. Thank great. That’s Okay, me. it

Operator

Abouchar is Partners. The Glass Creek next go from ahead. question Please JD with

JD Abouchar

the opening news on both of also about Manitowoc Congratulations the guys and spinout. successful the exciting

margin to capacity to higher how to say doing follow-up a to is of the like has that move on that of are X away, margins. going Just higher sort or XXX more constraint now much X take sort bulk to of more XXX of shift equipment have a within the margins the advantage Win shift, ASP around ability issues from obviously to higher something production rounds some the and difficult mag those and it better

Fred Wagenhals

Well, read I think piece you just our playbook. a of

maybe to be the our small machines really bringing in happens adjustment retool and focus that. markets timing want on, enough to accomplish on we is to an we’re skews. make narrowing all to able We’re the perfect being which And

have commodity store we what to a we month, consistent race type So a want to into and where every get whether be zero. box thing it can I don’t to have versus to big seems really we a – distributor, we what be it can ship or

midsize those X and can a of really streak making and can think but continue margin on rifle. standpoint especially I to we in some from just So benefit about we other the specialty mm large we’ll streak any rifle rounds caliber,

JD Abouchar

the I item on is some the just lot an and that. there Excellent. variants? been margin us Can or touched update projectile out. you have give the do barriers an out about has patents the understand more of – know side, you any you’ve That’s are keep would wonder demand on that – shipping and your to talked but in there from of which I the buy you debottlenecking that radar is on one doing internal and of projectiles a already haven’t room, screen you enhancement on and elbow have

Fred Wagenhals

to That’s that own, We the that in little a bit availabilities. question do that’s the companies our to are or look whatever? for – on at that to there’s capabilities venture potential also different the where joint up take no, different would there start and but is projectiles, also end? way or the different Well, have get being potentially we a ways, look a could making area. we acquisition Or candidate best our

JD Abouchar

got updates question that of you sales it, a being and meaningful Is of target. final is revenues Got track it. And past percentage any as sort still a the military on in government and just talked there? about

Fred Wagenhals

Yes, Fred who’s project I’m really to every John go three like guy Wagenhals worked a the on to for the the probably he’s tell sign years over John I’d this turn office, is got this and his last this Flynn to military. on you. by he’s and talking time door.

John Flynn

your to promise. Fred. want I I Hi, thanks for to question. not, It’s don’t talk because

question. We have – to there’s two parts your different

U.S. products the as have for alternative component company. relating the the special the incredibly target on groups, which one, specifically forces, being latter ammunition, signature we ballistic BMMPR, for place your Think So match, is trace being contracts We round. requested. that designed to an ground up second this one were two to in about exciting

hear you some of will some about hear which won’t other going programs have about likely on We shortly. of which you

to much this big than Our was really and said, army obtaining manufacturing what special procurement faster U.S. your forces, really much, on who unique type specific what distinct have our focus to on we playing U.S. which the in standard, of have skillsets off business cycle military for cycle. a capabilities, Fred that focus have products design needs path procurement

always though, me certainly look even arena. or doesn’t to down that to talks actually like is the light public, and It Fred, moving it track. is comes at it it to who in So speed on

hitting we performance now all latter the milestones, requirements, are moving phases the the of those are two and all programs. We into

really it those that understands in meaningful hopefully are that date to way, with but does anticipate some moving very That’ll It anybody publicly takes confidential be we revenue and to programs phases are in to told Some of reasonably different and more that time, quickly but programs exciting soon. effectively flowing to things. work industry. some more pretty on we will, those other announced start we’re take a where in expect

JD Abouchar

Awesome. Thanks the for update, John.

more Online envision where but eBay, than an envisioning outdoors, is a you to along prominent marketplace format. more is an future, Shopify similar question marketplace the something individual going more side, an Outdoor the is final Just in to the auction – it as Amazon, you type reseller more it are there souped-up for a

Fred Wagenhals

eBay were and Both Amazon.

JD Abouchar

answer Thanks, That’s the wanted. I Fred.

Operator

from The Brandon go next Beylo question with Capital is Foundation ahead. Please Management.

Brandon Beylo

questions much so call. here. today. chance have thanks guys, them get taking my I a the Hey for I quite I’d of think, ask didn’t bit to

through So hopefully, hopefully get can you I can guys these. –

best is it it is going thought and the announced basically guys spinoff value. I for convincing. this this the us And this think hey, acquisition, it business along really of, vertically XXXX, that going were to increase didn’t going was back sound you for the GunBroker and we too reason help that with one, year to costs And a help why last happen lines is the all spin all year, is, costs integrate, shareholder process the first out. then when integrating what think So reasons value. are And then it up the later, the this look we if is ramp trying go like to behind and May the to shareholder of to into

now for that, best separate saying is shareholders. having what’s actually now this as You’re a company

it from better of outside shareholder being with know had I Board, but versus AMMO. me the like exactly now so of sentiment a with it like, and kind that through GunBroker the said of why with changed why is inside discussions AMMO value team And you you GunBroker – better walk

Fred Wagenhals

for Well, the the can at one ways And you know which think really we XX I had I we’ve of it. look GunBroker. last mentioned months,

We realized case valuation there point. in right that haven’t good is of really the front in us,

and EBITDA X consensus times you’ve XX ammunition the the you’ve business at the times trading marketplace got at look you got EBITDA. If the at Street, on

trading you’re those can entities, and collectively that this two whole. start the this is and together are –I we billion market there’s seeing plan. the think start the – And we where when than gaining $X parts greater You are things what separate And cap. should be put it’s is that’s I value we could think on

way to following analysts perhaps way we I this the we side, both think this GunBroker the this the point. coverage. get manufacturing that a other do side. following undervalued at businesses think get is I are get We other won’t that don’t just analysts complimentary more their

Brandon Beylo

from when Marketplace $XX.X you completely on income business much AMMO wondering because split business. operations. the What in should $X.X EBIT what million lot business. parts three that if on it’s but value or on million the from the pretty and million again, the good of transitory. playing are quarter, last instead mean, income look best sum But is insulated business, months probably margins. I roughly for operations is Yes. any business, in the what And shareholders are this I’m But those what income of like kind put point, for $XX,XXX maybe ended AMMO the you’re you like not of that. just revenue, ammunition revenue you or to in business of marketplace you operations on kind high will of really, maybe this greater of is of get there’s $XX like the businesses think you just story, from I takes the from June this at generating really a the at shareholders sounds than when these and different it wrong split this off, kind all costs I’m in got If sum. XX, of light

about I much of it And geared word other is I ammunition the the wonder expenses remove versus And that probably how if you if And most corporate to basically bet, is million. corporate and none. ammunition bet so towards I this other marketplace does EBIT, ammunition. expense would that business. have the of and you other business $X.X – marketplace And then expense

expense, of half that if so an even you losing corporate you’re on ammunition business. add now money side, say basis And onto an from EBIT ammunition the

you sort piece with the you choice to just more makes two that how – agree or between some is capture each of don’t stay them. where of value business, see Because business valuable than the what valuable. think whole? want that is marketplace so the I the shareholders ammunition can the I And the will where command given

Fred Wagenhals

is. Well, quite Use as continue to I’m state what I not process guess, at understanding you question platform your the the do those giving a your as spinoff, shareholders thought much a shareholders if business, XXX% benefit they to and own gives also to ammunition want ammunition business, don’t to keep select. This have the they can if the to it not to, they add it. the them want

can so to any question? to move next Now other you I or on thing coming talk know we’ve believe got up, want the there’s I if about other questions we

Brandon Beylo

to business? mentioned and on AMMO times each you if can value the next know ask each kind that question. a collection you how – you don’t I value of I get move of you only the get X business that that because No, $X if billion is with It’s just we just of reason

Fred Wagenhals

no. No,

you value the times. is That’s marketplace Street X where the You And only manufacturing value them. only XX is at The business. EBITDA. times

So That’d be… you can math. the do

Brandon Beylo

Got it.

Fred Wagenhals

to up billion the on math just manufacturing $XXX know. I million comes My $X and It’s for $XXX I think… million don’t the GunBroker. and still over

Brandon Beylo

it. Got

Rob Wiley

this guidance taking we we’re costs for business. or We new I the amounts EBITDA confident significant is have think into thing facility. ammunition and another we’re we to as our prepare in on guided move mentioned consider extra important that

two aligned GunBroker companies ammunition a be will be the company to allow we site to manufacturers So vision e-commerce the work splitting with of more manufacturing more to for company and with think apart play. each the their other

value that we additional think be will very there’s that guidance but that’s we and in that think confident something shareholders. to provided. and do companies know that cost we our the temporarily, that that not we long-term So both We there’s valuable we’re see why that’s

Fred Wagenhals

for Thank your question. Yes. you

Brandon Beylo

Yes.

Operator

would like session. for This to over I concludes Wagenhals Fred any back closing conference question-and-answer our to turn remarks. the

Fred Wagenhals

And forward activity months, with think next participating to within Well, a you’ll here. months a look thank around company we much the six the future. lot to our for very you I see of and evening. four good Have

Operator

you presentation. today’s conference The concluded. now Thank attending for is

You may now disconnect.

AMMO (POWW) 16 Aug 222023 Q1 Earnings call transcript