Ammo, Inc., the owner of GunBroker.com, has been busy building ammunition inventories to accelerate sales this fall for the launch of its new premium rifle hunting segments, but a decrease in revenue in fiscal Q1 was said to be primarily related to a decrease in activity across both of the company’s reporting segments.

The company reported fiscal first quarter revenue of approximately $31.0 million, compared to $34.3 million in the prior-year comparable quarter. The company said it believes the decrease was a result of the current macroeconomic environment impacting the shooting sports industry as well as others.

  • The Ammunition segment made up $18.7 million of the total revenues.
  • The Marketplace segment generated the remaining $12.3 million in revenues.

Cost of revenues was approximately $21.2 million for the quarter ended June 30, compared to $20.2 million in the comparable prior-year quarter. Cost of revenues for our marketplace segment was $1.8 million and our ammunition segment cost of revenues were $19.4 million.

Total gross profit for the quarter was $9.8 million, or 31.6 percent of sales, compared to $14.0 million, or 40.9 percent, in the prior-year Q1 period.

  • Ammunition segment gross profit for our was negative $0.7 million, or negative 4.0 percent in the quarter.
  • Marketplace segment gross profit was $10.5 million, or 85.6 percent of sales in Q1.

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

“Although our margins decreased from the prior-year period, the robust margins on GunBroker continue to hold strong, and while the margins in the Ammunition segment remained down as the plant ramp [up] is still underway, we are beginning to see increased production throughput and expect that we will see increased product marginality in future periods if we are able to continue with this trend,” the company said in a media release.

The company had approximately $6.3 million of non-recurring expenses in the quarter related to legal and professional fees, which have been included as an add-back to adjusted EBITDA. The $6.3 million of non-recurring expenses also included a $3.2 million expense related to a contingency stemming from litigation GunBroker was involved with prior to its acquisition by the current owners.

“We expect to recover 2.9 million shares of common stock as a result of this settlement, which will be cancelled and returned to our authorized but unissued share pool,” the company noted in its statement on the matter.

For the quarter, Ammo Inc. recorded Adjusted EBITDA of approximately $2.0 million, compared to prior-year quarter Adjusted EBITDA of $6.6 million.

The net loss per share was 7 cents for the quarter, or Adjusted EPS of 1 cent per share, in the first quarter in comparison to a loss per share of 2 cents in the prior-year fiscal Q1 period, or Adjusted EPS of 5 cents per share.

Looking forward, the company said it is continuing to focus on streamlining its manufacturing processes, which should improve product throughput and marginality. For GunBroker, efforts to offer a flexible financing option to customers is said to be “well underway” as well as a cross-selling solution which provides users with the ability to view and purchase compatible items when going through the checkout process. The company said it expects these enhancements will drive sales growth through better functionality and enhanced purchasing power of buyers.

The company’s financial position reportedly “remains strong” given its net working capital position. Current Assets are $134.0 million, including $50.8 million of cash and cash equivalents along with $42.3 million of current liabilities.

“We believe this strong position will continue to stimulate our transformation efforts,” the company said.

Ammo Inc. repurchased approximately 580,000 shares of its common stock under its repurchase plan in the reported quarter, bringing it to just over 1.9 million total shares repurchased under the plan since December 2022.