POWW - Earnings call transcript Q1 2025

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Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the AMMO Inc. Fiscal First Quarter 2025 Earnings Call. [Operator Instructions].

I would now like to turn the call over to Matt Blazei of Core IR, the company's Investor Relations firm. sir. ahead, go Please

Matt Blazei

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

Kasowski, Transformation me are Chief Rob Paul team AMMO's Financial Compliance Smith, and Joining leadership Officer; Jared from Officer. Chief Executive Officer; Chief and Wiley,

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

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

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

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

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

financial press this see measure, net For earnings company's table non-GAAP its reconciliation reconciliation financial the measure a GAAP directly please most release. to the comparable in of loss, located

this this AMMO of law, today, information events that The content XXXX, revise as accurate to update by X, required after or or call is that of reflect publicly as occur any except any August call. only obligation disclaims to information time-sensitive circumstances contains

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

Jared Smith

Good joining you quarter us for earnings afternoon, call. Thank fiscal everyone. for our XXXX first

of changes this scale mission take It perseverance to at the transformation all at implement for thank to business. in massive to commitment of level to and our grit opportunity takes want this employees I this and this for company, underway their the to quality. First, their true and contributions our

progress [ ammunition you, quarter way, and an midst teams transforming ecommerce leader. leading high and our plan and continue for the part be units. proud to on of margin changing Despite innovative operating XXXX, we our this of regulated first of the our to have primary in rifle make to marketplace initiatives effort. In each a our ever ongoing core business ] I'm We extraordinary this to fiscal the Transforming some challenges of pistol production market.

these success. We focused ongoing this sustainable reliability. the that long-term initiatives. our turbulence We progress confident long-term positioning shareholder continue is we to company in to and and company's value building Despite stability for strategically the shortest the are make on on recalibration path remained industry,

As firearm and throughout has sales markets been market-wide, segments been ammunition across months. of the summer down have all commercial reported the

to from seasonality is in-line segment products the industry, due and propellant in supply. non-attracting pulling we've While low with production this historic margins back been slowly

to continue We that categories will focus to on strategic bottom line. more product contribute heavily the

have under building sales obligations inventories been this the contractual new launch accelerate hunting XX.XXXXX rifle cases fall our of segments, ammunition to on our delivering our We and for ZRODelta. to started we premium

and our a as both site. starting year. affect that been second pivotal the registered AMMO and releasing monthly are the take delivering Changes our that million point last we to users start We've plus million will over X visitors on was GunBroker quarter of month effect. our the positively at XXXX noticeable unique to XX fiscal code

We for firearms the launched months ago, our cart and through the month cart. this just began cross-selling purchased last X accessories

months environment accelerates and algorithms our learnings. to as the across We will continue recommended analytics and cultivate over offerings categories the coming the all its fine-tune

and seller that capability now includes to This placement we platform single with away products buy from framework from buyers in pivot for at one the single-item historic multiple checkout. transaction will suggested sellers a be an ongoing of development the to

low infancy. barriers ecommerce market industry, marketplace still is entry We its shareholders an and and to industry with is are solution will This out a our building revenues a in strong consolidation. that ecommerce that an for high create in

year and and XXXX for fiscal While we've will evolution the transformation of in an result been around is for shareholders. to GunBroker our game-changing our in XX face years,

growing accomplished the X.X% and take roughly sales, versus committed by communicated we been revenue, XX on over advertising GunBroker In its service has increased we basis last enhanced option X.X% Elite. year. offerings do points. fee This through Collectors category through site. As increasing launch rate quarter, the on and QX, listing our last fees our was in we increases changes to non-firearm the of take GMV rate

ahead fire this increase in further solution take capabilities. increasing and cross-selling financing as an the accessory with ahead algorithms rate push the and non-firearm cells gear We in see our quarters tune we monetize we anticipated our as

Turning division. to the ammunition

are laser negative at X-millimeter to margin rifle focused are all pistol increases. on back now capacity on strategically production range, increasing rifle as and production low and We pulling the plant training

continue line and and but creating higher bottom operations will profitability. will and margins production to and away higher We the focus This from high shift revenue, on create negatively will top revenue volumes line our affect to continue we'll streamlining our top profitability. line

from their teamwork to transition The components handle and cultivate and has the much this manufacture us hard. anticipated must fine-tuned The required processes rifle quantities, talent to and is it to the and transformation pistol rifle be to ammunition capacity. required resources

we working manufacturing through will scrap removing results processes. critical with to focusing for be financial cost months and to next improvement in conjunction continuous we the we weeks, In inefficiencies improving consulting through This struggle coming the and reduce eliminate constraints XX quality our initiatives. proceed to extensive While initiatives continuous to for by engineering our on partner, review initiatives yields with operations labor, will improvement capacity issues. the enhancing our of due see absorption the factory, out lower continue overhead new opportunities

and underway as excited see quarter. we to into the second couldn't transformation excited our third come be are more and We

made I Before I over our turn it everyone last next earnings of remind call. speaker, since our to we've want the progress to

BMM increased rate a quarter, financing IVAC X.X% a ] we less month, accessories of of We take anticipated X.X XXX,XXX [ PR We've the to start agreement X.X% And last rollout. and with last x for inside our XX.X with year. for -- and ZRODelta. cart signed we an to than were this pieces marketplace on the from XXX Just delivered cross-selling clear rounds, in we production QX Creedmoor enabled this Gearfire in with XX days. firearms last our

excess million repurchases we And quarter. this share lastly, of last in $X executed

One biggest divisional of the undertaking initiatives corporate and now processes. we of streamlining all are is

on January, Paul goods consumer throughout space returns. for process changes In experience our as Compliance of and the Paul Transformation and Chief savings savings opportunities improving we handle has opportunities making for cost a has for to XX start efficiencies. brought necessary in product company on identifying and Kasowski the Officer the years manufacturing in our and firm

turn now it will Kasowski. to I Paul over

and Our Chief Transformation Compliance Officer.

Paul Kasowski

Thanks, for a outdoor at Jared. and to focusing opportunities AMMO. We're be to manage us we've our XX the ammunition an enable increased can will This through site opportunities profitable product brass joining growth months. versatile is functionality executing identified improve simplify rifle business on the company, online margins. to effort cost visibility cost offerings. model, on production up working believe these an by to next actively realized XX most positioning to over for in division We and . Since capital enable million operating long-term the that in diversified GunBroker cutting enthusiasts $XX while the exciting time as strategy and

emphasizes Importantly, these we as execute change growth. that of now initiatives. takes institutionalize This the time cultural type the we have to mindset organizational a and profitable talent alignment

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

Robert Wiley

Thank you, Paul. Welcome, everyone.

quarter in Let the first $XX detail. revenues $XX.X our of million million review first year year year We more fiscal to ended XXXX comparison the me the in in with total approximately financials prior quarter. now for the fiscal quarter of XXXX of

generated million The decrease as the related million in Ammunition which in believe well to made revenues, total decrease activity as segments, and environment both the our $XX.X Our remaining our revenue segment was current revenues. macroeconomic a we industry others. of result up of decreased impacting a in Marketplace as our reporting across $XX.X segment primarily

$XX.X XX.X% revenues the year total resulted quarter quarter period. and margin the Cost of million our quarter. compared comparable revenues of Marketplace the or approximately prior in in XX.X% ammunition our gross This cost segment in segment for $XX.X of was for to million prior to of $X.X $XX.X the compared million, or $X.X million year was Cost million. were revenues million a for $XX

Our $XX.X Marketplace XX.X%. X%. The $X.X or million gross margin negative was million segment was or margin negative ammunition segment gross of our

to The increase shift gross the in decrease in period. the and our in production comparison of inefficiencies goods cost and related was ammunition sold year prior in profit segment to mix in our sales margin

Although marginality expect to this periods our in remained see to to ammunition are ramp continue hold increased robust underway, will prior still down decreased our is we are And see margins margins year margins the product the segment plant on production period, in that continue and we we strong. GunBroker increased if able throughput while trend. with beginning the future from as the

There was contingency GunBroker as the approximately expenses from have The which included also $X.X nonrecurring professional an we adjusted of included add-back our million expenses stemming expenses fees, to million quarter to related to $X.X to was $X.X nonrecurring acquisition. legal million prior in EBITDA. related a and involved litigation with

result and returned million but X.X unissued our shares as stock to pool. common to be expect of settlement, We which a of share recover canceled will authorized the

$X.XX resulted adjusted adjusted income year EBITDA to comparison in the of the prior quarter, of of in million quarter year we per For million. approximately per share $X.X the of net recorded in adjusted or for income share loss adjusted to quarter per share This a $X per compared our of a $X.XX, $X.XX. share $X.XX prior loss net quarter, the of EBITDA

on marginality. forward, improve manufacturing which throughput focus are processes, Looking we and should product continuing to our streamlining

which For view as flexible ability our well customers purchase going underway GunBroker, option compatible checkout provides and financing items the as well efforts our a to when is users through cross-selling offer to the solution, process. to with

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

equivalents, our transformation capital in we net liabilities. our We of Our as remains cash $XX.X of will million position have million financial to current stimulate believe with current $XXX strong, cash including working position efforts. the continue assets, million and $XX.X position reported along strong given

the approximately common XXXX. stock Bringing shares XXX,XXX reported purchase repurchased of quarter. the December just under repurchased to under plan us our since plan our X.X of total We over shares million in

operator you. our turn will concludes the questions. call for the I Thank remarks. over That opening to now

Operator

take will will we this [Operator Matt first time, ROTH from our Partners. Instructions]. Capital question, with come Koranda At which

Unknown Analyst

how casings Joseph revenues quarter a to segment. and also also, the XQ for we just here? Can back from for and on your positive wanted expect for expect This is growth second to get assume we comments we And ammo up Matt. Can the ramp regarding to We beyond? on beyond? know to should gross margins in inflection

Jared Smith

Joseph, great question.

we yes, last steady in our quarters expect And quarter, in So Rifle -- additional production we rifle casings million $X Brass the an ahead. shipped progress with Centerfire business. case

Unknown Analyst

And consumer? election the there. there or more competitive? the you attach the recent July? could rates? firearms -- months get becoming in observed shooting in financing And weeks trends President recent Is in uptick one the have Do if see what sports demand any I in just in Anything more any about in with you AOV about

Jared Smith

saw slight once Well, a seen So and Nick's what we're healthy election our a the and Nick's. July We compared QX comes we've yes, in trend July. we QX. the in in and that through I'm when decline the looks teller the to again, for period. was uptick to hold election in Nick's anticipate not QX, but fortunate what But QX to But a today, it QX. seeing to

Operator

question Mark Smith our Street. will from next Lake with And come

Mark Smith

a more to how GunBroker -- Is Jared, on of channel and decline much need have a so, as of steady is stock if of the sales inventory and stores of future markets maybe and picture brick-and-mortar? kind function that big mom-and-pops in there. this kind And in start other the and supply you . gun do maybe compete I how is question. and want with they this want. of kind everything in

Jared Smith

months the Excellent really down. question, Nick's checks Mark. There's summer space. GunBroker premium compete we being in through to that saw has inventory with definitely that a steady

ability the own control shop We the used price. market. We will to and to continue

in market. used We an firearms in are the increase seeing

bright months go market and after our be are there in ability So the spots segments and able within to our really ahead. to cross-selling leverage

with business. there's impacts spending us day, you're wallet own tendency we shrinks side. a But end And discretionary We the the the the and due the on premium see a the going used tremendous at reduction own consumer ability over a share as turning potential the right, cross-sell within turning that of cart, forward. in we But to to now market.

Mark Smith

next my question. kind of was that And Okay.

we or customers, Are still far Just a at kind are as of just being show where to of as market here able and when they as inning far in their directly And of new and in optic we be . or as seeing put cross-selling? whatever that. first carts kind it firearm for that early at are signs certain process? you grips any we success? Where may are

Jared Smith

last before and from that where they shopping able front just the positioning those customer. better of to functionality algorithms about business, be an a get our that items we the accessorizing And we of and items prioritize came ability to check in able to be the to what XX of days, to in it's categorize And on doing greater the grow premium That firearms of promote products in answer really part front consumers job going getting the we're better is Mark. we're and have take as as rate, out. margins. promote these it's those out are

Mark Smith

are there running, the that that think, within the and of Okay. replaced? you to of kind that -- hurting I up any in big that's dimes. that Paul that there's are Manitowoc? operations. shifting in just of things updates coming quarters curious, plant are to kind lot equipment are talk headaches over any additional it the business. not places couple last know ammos operations remaining just remaining the come are things there I about last from of And the out plant But of pick a me, of sounds and and kind of nickels big on Any like for -- on, kind the Maybe then of kind need with

Paul Kasowski

a and it took August, X.X be September. [ just we Well, annealing been year, that delivery oven of up over issue has in an will ] years, for early starting an late

certainly run production, a one hurdle we'll deliveries firm more we've issues in line we There that's X.X item bring next a we've Cal that the in into year, been way. into out been are but And massive that's uptick have past. capacity scheduled the had on able lean to So as not the that XX in we years. for

steady the and production with is had mechanical making end progress, you too growing some and in will on. We've capability. its And of day, at press. we to the rifle progress and action steady But another Medium are comes more QX QX. issues more see continue

Operator

question-and-answer the remaining over will And with any I'd back Smith closing remarks. we session. for turn no to questions, our conclude like conference to Jared

Jared Smith

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

Operator

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

disconnect now lines. You may your

AMMO (POWW) 8 Aug 242025 Q1 Earnings call transcript