POWW - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the AMMO Inc. Fourth Quarter and Fiscal Year 2024 Earnings Call.

[Operator Instructions]

Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. to IR, call firm. the like Arnold to now CORE of company's would turn over the Scott I Investor Relations go ahead, Please sir.

Scott Arnold

call. thank in and for conference afternoon, Good you today's participating

Fred me Wagenhals, Executive Joining and Chief Wiley, Officer. Rob leadership AMMO's team Officer; Executive Jared Smith, from Chairman; Chief Financial are

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

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

please and refer and AMMO's filed risks, in the the For risk periodic accompanies in more these SEC the information X-K described to most that statements release it. reports this factors about today Form press the with on Form call, filed company's cautionary recently particularly Form XX-K XX-Q, the

includes AMMO Today's in non-GAAP be useful that its financial can measures evaluating believes performance. conference call

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

disclaims of directly this the reconciliation press that a or obligation occur information only today, time-sensitive AMMO located this of in The XX, net company's measure to financial to the Except contains table see of content GAAP For call. please release. comparable its or reconciliation this accurate financial after most as to law, call earnings by non-GAAP loss, publicly as XXXX. update reflect information revise required that any June events is any measure, circumstances

to call now Chief is It over Officer, AMMO's Jared pleasure the turn to Executive Smith. my

Jared Smith

ammunition the but confident This undertook provided of manufacturing for I we year a AMMO fiscal growth. facility has making our Wisconsin. XXXX GunBroker When year several Good fiscal in unforeseen year, are joining joined initiatives of for we challenges, major and quarter beginning the to earnings we both afternoon, us number at at improve everyone. Thank in our and you profitability and fourth at remain changes call. last past

year capabilities. fiscal fiscal pipeline ammunition fourth with accelerating GunBroker's in and for the quarter while continue casing and ended make our progress of sales a to We strong build-out our

AMMO other publicly traded a Sales market sequentially space. despite as for softening increased Inc. competitors this in reported by

on We road for XX-year we plant our to additional strongest the bring capacity to begin have contractual GunBroker started our at open on in continue and delivery commitments. as execute map and history orders on its development

as AMMO is pivotal our at a start fiscal point XXXX year. we

toward of the XX have We the the months in value. optimize trajectory to past path changed and building these business business onto continue shareholder a

our generated balances cash million fiscal working have our year. the We and cash in by $XX $XX.X million inventory in reduced operations, increasing from

established delivered million paid reduced We EBITDA line credit $XX in have a of with adjusted debt million needs, $X.X XX.X%. and of Bank, working margins Sunflower down capital

been As our future. our detail here never and we poised go for in have execution sit more now on will into June, I the for positioning success. we

to speak GunBroker. first at me our progress Let

in As to are platform to new firearm opportunities transaction empower we business our singular contrast start in the the stretch our to on bundle finding accessories marketplace to the legs, sellers past. we

team. dedicated highlight our also GunBroker like a few enhancements additional made to to I recent would by

campaigns have to specific aggressive shopping can an user persona taken different XXX their the choose approach over acquisition selection. and a experience transported lifestyle where We customer into be launched and passion customers

the Elite our auctions. luxury curating by site, to focused other premium at firearm collectors fees we last Just a week, launched Collector's hefty serious catering and new without sellers which on seen is experience

industry, for Gearfire the signed solutions enable firearms tailored extend Capital, and Most making consumer specifically with for GunBroker offerings importantly, they we buyers to to need easier the it include to purchase will its products financing which want.

category be In team cross-selling the delivering shipping we'll algorithms enhancements, sales to we'll of items, as the aggressive today. plan to delivery is accessories. the the and facilitate solutions, search map specific and tools firearm be and road a had months, never growing coming We've as adding adding

combination, and GunBroker the the comparison to value enthusiasts, determine we platform market be the and of passionate community buyers line connecting market largest shooting customer users, played the This for and accessories continues enthusiasts are across to new marketplace satisfaction will metrics in these ensuring largest we've professionals. shopping sellers expectations. industry. around provide added marketplace collectors as outdoor internal premier and do for our for metrics believe In for a has and with out in firearms

XX% excellent into community a like considered can how experiences and is will metrics We ] we and Score, is how recently products, closely work GunBroker where that leadership drive to not team above scored our to a is our independent XX% evolving in of or is for come. continue Promoter We're just be Net is shared. our This world-class. these [ chart NPS, returns will It XX and community. unison. and shareholder but years expertise demonstrate future

production to environment, our Now new of contract XX-caliber for new our month floor We with continued tooling fourth annealing a bottleneck process. despite ] oven a [ line and the We constraint and take and our an tough manufacturing the update in-house production necessary start of will that ammunition that infilling for be on for In solid set the on to demand on next equipment ZRODelta. continue our design remove delivery a ammo. quarter, brought facility. we drawing remained the

delivered week pieces continue clients will other equivalent the Russian x for production XX.X delivery first ZRODelta of our the we for As and throughout XXXX. XXX, caliber, our well, XX to of XX,XXX last

as retail the into going increase our with We and rifle will production smaller and the market struggle affect which yields of into giving lower the medium improved overhead due capacity Inc. as to XXXX believe the at room some a to continue for and shelf we large imports to we capacities will and we fall. While start factory, margin new continue constraints propellant calibers. head see impose the in manufacturers, breathing we AMMO markets absorption pricing to

lineup Grendel and its hunt on new to Whelen. new quarter line like as last our X.X delivering as delivery started Inc. XX-XX, well XX AMMO, rifle calibers

see demand casing costs stabilized as waned at for commodity able we pass of copper has levels we brass not for higher While and year or retail. seem be on still and AMMO to this our absorb are pricing powder, to inventory these business

The sales, in casings not second third trend calibers for in feed this emerging but we has the softness through rifle the in quarters. decrease continue action measurable or rifle a a firearm the rifle and have in demand, market We decrease seen category. will resulted believe premium ammunition that lever

increasing online the improvement. review This global will firm proceed engaged operations we've need constraints and consulting we our inventory rifle organizational weeks, focused for As material process financial In will processes on planning process remove come accountability, with on critical process the flows, results QX, to years best-in-class extensive better as for XX continuous and dividends capacity brought infill improvements. and recognized in pay and that we our response, improvements. a through plant sales production operational we and next improving organizational new for focused operations

calls, quarters discussed have the a we providing year we've pistol guidance on high-margin strong focused of from but seeing on and As not been have factory These come low-margin resetting coming for division. past has our easily this see And Ammunition in while production the come we previous at not path time, fruits changes overnight, not to the this high-volume, profitability efforts. rifle the production. to are

in detail. Rob to our turn Wiley, to further CFO, our now will discuss it I over financials

Robert Wiley

Welcome, Thank everyone. you, Jared.

the macroeconomic while total Let quarter of related revenue more $XX.X me fiscal in in margins of to financials detail. The in final XXXX fiscal million segment our now remained and a year of as year XXXX well as We the for was quarter our primarily segment, sequential the our we impacting in environment GunBroker industry result our the our revenues review quarter of decreased comparison segment the in the of ammunition fiscal year fourth as decrease million in year, fourth prior with quarter. experienced Marketplace marketplace revenue ended the in which We approximately a others. the growth robust. $XX.X believe decrease to activity current in

sales, period. $X.X which prior margins, Our higher casing year from reported up million increased gross the

for $X.X from Cost sales result increased ammunition the year million our increase as our segment decreased of fourth sold of quarter. the to prior the for the Revenues decrease of quarter a cost decrease year in goods $XX million in prior $X.X sales compared in million volume. or comparable $XX.X quarter-over-quarter quarter. sold was of the XX.X% to fiscal million in The approximately quarter, goods ammunition related was

the The decrease through sales for our quarter prior million profit mix. $X.X margin segment but remained margin gross gross shift to to expectations. GunBroker on was ammunition in Our in The our meet the or period. compared our did the related robust or quarter, in XX.X% margins steady XX.X% not $XX.X final in year margins was the million

increase. capacities production as improvement expect We

$XX.X generating bringing continued million full to the levels fees. to expenses million the legal operations of for inventory quarter $X.X Our in to cash approximately million for decrease, in professional year. related fiscal $X.X quarter, nonrecurring the from and There was us

We add-backs to have EBITDA. adjusted included these

the we $X.X adjusted the EBITDA quarter of For year EBITDA prior recorded million compared approximately quarter, of adjusted $X.X to million.

of share a income quarter In prior per the adjusted per net share for in quarter loss resulted of a comparison year in the $X.XX This share $X.XX loss income net $X.XX income adjusted share $X.XX share per per $X.XX comparison loss net net our $X.XX. or of adjusted per to prior of share of per for of in net income or $X.XX year, a per and fiscal per or $X.XX year. of of share the a in adjusted full share to loss or

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

partnerships XXXX For XXXX platform in offer GunBroker, firearms which March allow Elite, financing bringing retailers will of firms and other like the additional collectibles to Collector's with option platform our like rare customers. flexible options be to auction online high-end a and and distinct financing also we Capital, and we'll featuring launched in Gearfire efforts fiscal

growth functionality enhancements sales power these through will expect and of purchasing drive enhanced buyers. We better

into position and of million positioned equivalents strong well $XX.X million given our in heading We million capital as $XX.X including fiscal working assets, along XXXX, have are we liabilities. $XXX.X current current with cash cash reported of net financially

for generated cash opening operations from have the remarks. call to I questions. concludes Thank Additionally, we in over now That will operator $XX.X our period. the the you. turn million for

Operator

[Operator Instructions]

ROTH The Matt with from Koranda first Capital. question comes

Matt Koranda

any unpack and terms issues? in could any this more year? wondering us bit production, capacity you specific terms going to helping out Just a utilization is help sort up you term that's in in ramp of of the fiscal little coming Just consulting if casings for maybe how what

Jared Smith

is engagement off that a that we're Absolutely, is Matt. making we're are supposed coordinated the engagement looking setup of equipment, of it inventory the specs I are documentation at signed reviewed, that part a that in shifts single technical to sure flows, the one around of SIOP and Great process planning. be to is operational not our between factory go say the for part that all clock being to unturned. the be that the This handoff XX-plus is are question. to week we producing material universal where but is lift love area, sales where There place. stone factory no will not a including specific Matt, would producing

Matt Koranda

just side, it's at hard to we about I including margins then the the were think in during end here. year And And should the you margins fourth guess the ML how maybe parse business. gross out manufacturing gross at implications because Okay. ammo least if of for casings the What in quarter? could

Jared Smith

is massive that this would if we've that know engagement you can I'm just going have where be part answer that entire information flow focused at got amount with to hand, the but Rob, is, get the of speak case firm the Matt, if of That's But to focus. I the at rifle through this production to margins, material put due factory. you question really Rob, great. the to we don't

Robert Wiley

should increased our we as from see marginality is QX. fiscal but increases, Matt, into have into overhead expenses of products of we a production of coming off was Part the XXXX heading a all margin year. in able QX to the of older that inventory, little see this did Yes, bit ammunition our pullback we be inventory, the smaller and going Rob. across better absorb

Matt Koranda

what's one And the with and curious then But ask on just on wanted I on going GunBroker. more side, Got side, then the to one casing. it. on Okay. AMMO AMMO

little on guess, So goal I house. is, like a not of did business We've it a increase the a little side the drop But ton, new won I utilization. but sequentially, guess that bit bit. to

speak to could should up two. casing Just wondering of you how couple if of terms the dynamics that over ramping in be quarter the next and or

Jared Smith

roughly the the Yes. casing The look we quarters. ramping way a in the couple rifle manufacturing. By expect of year, casing up XX% to we end increase at over of next XX%

QX. question believe I of bit QX, to we and I that correct? dip is a a your think QX, see little that was from saw we'll QX Specific in

Matt Koranda

Yes. Just sequentially, correct. That's

Jared Smith

also lining that down Yes, pieces streamline the some after process. We it the and with were to manufacturing take of and loading equipment to QX the down, were fall deliver we cases up and has and to summer manufacturing had for everything cases to to for do on hunting -- those press we're of actually, we sitting the start QX the season. loading inventories throughout initial being loading, equipment rest

Matt Koranda

up marketplace. Okay. the quarter I of And could you where value, if within any wanted Understood. that lifts learnings the front to running. on the of from implementing there's terms just that to you quantify All any in whatever any saw just that right. see we're quarter period but metrics carding of early transaction short way in to terms you. fourth got the very a front? you that, and payments carding know got that got I want attach initiative rate that the within Got benefit of we on getting only on and the provide then guys you've

financing then is we maybe you you And a just provide on initiative, if rolled out? learnings could Have that? metric that like early rate take any could, the And that? around there on fully

Jared Smith

actually a at rolled take This QX, We of has quarter that learned the agreement of is value lot to for still was looked and online. financing and QX. We so higher we early signed we we'll in place come was didn't that saw dip. If that Sure. it it on not a We've work as from development what the executing in launching that be We We dip. and the short, you to a a well. rollouts new out. so There's value, saw card slightly that quite an QX developments, adoption. but card agreement. solution see just see bit --

an like line flat prior we Since we've So our value then, felt in take as fees actually the result. the platform our quarter. increase in adjusted seen across discussed as have a those positive a was rate and final we

Operator

Mark Smith from Lake comes question next The with Street.

Mark Smith

you. think margins numbers I wanted on maybe loaded call, have casings, bit But just on pressure little just, first, in free we margins and front costs to so that ammo? feel but is going more input out anywhere you're kind the you there I coming that saw a issues? called here, maybe on as speak AMMO little of to where dig in on where if then out through pressure? broadly any the here was primarily you pressure bit the more don't seeing it you're and look know forward? things Jared, ammo you propellant a where some seeing pressure in, it margins And anywhere loaded ago about of primarily inventory we is as Or

Jared Smith

output. down do LIFO is going inventory this on of All our production inventory to anybody engage ammo strong. our an few perspective, fast increase casings. has ] just -- because Brooks an right. with would not engaged From we problem inventory inventory to increase as And and in not We and a [ we've that is consulting to position The I'm come was break parts. believe the we that that capacity engage really like. firm why a have as have lack question

internationally and portfolio, perspective are we're throughout deliveries a last. this like cal the things From that bright shining margin across spots quarter XX and our making

still in hunting X-millimeter. portfolio high-volume a play seems much anything The rifle much be to playing pretty in bright other than the space stronger touching spot is

year, here but a have everybody pricing an think we're margins been thought have is election and As there still ubiquitous I little bit might more sitting pretty reprieve, been in X-mil The tough. is tough.

due tough discretionary consumer. market's the The by to spending

going answer Does bit as had we still into like a things certainly, QX this comes we strong. but QX. We're are capacity So more Mark? And little that typical your and increasing quarter industry, felt holding online. strong with a summer more slump out the question, over finishing of of sales

Mark Smith

think I so. Yes,

Just going the about forward? as costs, continue you to part, last maybe where think anything you pressure think input we'll though, see

Jared Smith

been massive there speculation on go where out there's Yes, copper to some pressure copper, has erratic is going there on and been in.

We it costs of saying push least double, very position we'll mainstream, or pricing that an going is downstream. call, will feel of But not market. were back. Propellant continue we it's metals our to rest and be are, can for work people be was on believe them pulled that in and effect going Some propellant market. to most power industry, this in in those and long-term a contracts, absorb strongly so the in we going to We supply what have about still at the propellants our an our specialty forward. issue continue the to I'd the price

Mark Smith

Okay.

Next was question ZRODelta. just for me around

any can how maybe review ammo. I some there it's updates that you on delivering going. things give kind would or of you know of be can update are great. give Any kind that can Just additional you And of us early

Jared Smith

front. Yes. deliveries. improving was every on the excited super, the ZRODelta now we're the when Cal streamlining and have first We're that acquisition we're day. contract of large line company running, up paramount. -- the super Jagemann, And the starting QC mean, and I line XX rifle our We're to we make process made process, the is

of out new the As casings past, in for demand all there rifle there's said time. a get the not request lack we've we and

comes streamlining to just output. down get maximum execution processes our issue and really biggest pure Our to

Operator

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

Jared Smith

and our look to AMMO ongoing fiscal results for XXXX quarter we report a want in participating your for our and Inc. thank progress on forward interest everyone have I Thanks, sharing great in when today's day. call August. to Absolutely. first We

Operator

The presentation. attending conference Thank has for now you concluded. today's

now disconnect. You may

AMMO (POWW) 13 Jun 242024 Q4 Earnings call transcript