Ammo, Inc., the owner of GunBroker.com, an online marketplace serving the firearms and shooting sports industries, and a leading vertically integrated producer of high-performance ammunition and components, said that margins on their Marketplace segment remain strong and gross margins have increased in their Ammunition segment as they begin to see the benefits of the transition to a leaner operating model with a higher focus on brass (ammunition) sales.

Total revenues for the fiscal first quarter ended June 30 fell 43.6 percent to approximately $34.3 million in comparison to $60.8 million in the prior-year quarter. The decrease in revenue was said to be primarily related to a decrease in sales activity from the company’s Ammunition segment as the U.S. commercial ammunition markets continue to soften. Casing sales, however, which afford the company higher gross margins, increased to $6.2 million in Q1, up from $3.3 million in the prior-year period.

  • Marketplace segment revenue declined 15.7 percent to $13.9 million in the reported quarter.
  • Ammunition segment revenue fell 65.6 percent to $14.1 million in the period.

Management said in a release of earnings that they remain confident with the progress they have made to date, but acknowledge they still face headwinds as they continue to see softening in the U.S. commercial ammunition markets.

Gross margin was 40.9 percent of sales in fiscal Q1, compared to 29.8 percent in the prior-year period. The increase in gross profit margin was related to the shift in sales mix.

There were approximately $2.8 million of nonrecurring legal expenses incurred in the first fiscal quarter, which the company has included as an add-back to Adjusted EBITDA. Without the nonrecurring legal expenses, AMMO would have generated a profit for the quarter.

For the quarter, the company recorded an Adjusted EBITDA of approximately $6.6 million, compared to the prior-year quarter’s Adjusted EBITDA of $10.6 million.

This resulted in a net loss per share of 2 cents, or adjusted net income per share of 5 cents, compared to the prior-year period with net income per share of 2 cents, or adjusted net income per share of 7 cents.

“Our work toward achieving our strategic goals is starting to pay off as we have already begun to see the positive effects here in the first quarter, with significant improvements in gross margin and strong cash flow,” commented Ammo Inc. CEO Jared Smith. “Despite a difficult industry environment in the near term, I remain confident that the initiatives we have undertaken in both the marketplace and ammunition divisions will continue to improve profitability.

“We couldn’t be more excited about the transformation we have made over these last six months and just how quickly we have been able to capture real results. Long term, the industry fundamentals are strong and while the consumer currently faces major economic challenges, we remain confident that our strategic approach will pay long-term dividends for our shareholders,” Smith concluded.

Ammo Inc. continued to increase its cash position in Q1 with $13.0 in cash from operations generated in the quarter.

The company reported $130.6 million in current assets including $47.5 million in cash and cash equivalents in comparison to $23.9 million in current liabilities.

Inventories were up 2.0 percent at quarter-end to $55.9 million, when compared to the end of the 2023 fiscal year ended March 31, 2023.

Photo courtesy Ammo, Inc.