Ammo, Inc., the owner of GunBroker.com and the ammunition and components producer reported a net loss in the fiscal second quarter as sales dropped 28.8 percent.

Second Quarter Fiscal 2024 vs. Second Quarter Fiscal 2023

  • Net Revenues of $34.4 million, down 28.8 percent year-over-year
  • Gross profit margin of approximately 24.1 percent compared to 26.6 percent
  • Adjusted EBITDA of $1.2 million compared to $5.7 million
  • Net loss of ($7.5) million, compared to a net loss of ($0.8) million
  • Diluted EPS of ($0.07), compared to ($0.01)
  • Adjusted EPS of $0.00, compared to $0.04

GunBroker.com “Marketplace” Metrics | Second Quarter 2024

  • Marketplace revenue of approximately $12.5 million
  • New user growth averaged approximately 26,000 per month
  • Average take rate increased to 6.0 percent compared to 5.3 percent in fiscal 2023

Jared Smith, Ammo’s CEO, commented “Our fiscal second quarter was a very difficult quarter for our industry and due to mechanical and supply issues we are roughly one quarter behind where we thought we would be by now. However, we continue to transition our business to a leaner and more profitable operating model and remain focused on addressing operational inefficiencies. With that said, the market is moving very quickly based on recent international and domestic events.

“Events in October have completely flipped the market on its head. We see strong demand for our brass casings and even stronger demand internationally. While we have had delays in bringing the factory online, we continue to make investments to secure future predictability, profitability, and capacity. The fundamentals of the industry are improving. Gunbroker.com is starting to see the payoff of payment processing capabilities on the platform as we continue to transition GunBroker.com from an auction house to an Amazon-like model for firearms and accessories,” Mr. Smith concluded.

Second Quarter 2024 Results
Ammo said in its commentary, “The margins in our marketplace segment remain strong and although our gross margins have decreased in our ammunition segment due to the aforementioned operational struggles, we are optimistic on the future performance of this segment. While challenges continue in the market today, the demand for our brass casings remains robust. We are beginning to see positive trends in the demand for our ammunition product and we are seeing the activity on GunBoker.com increase as we enter into our third fiscal quarter.

“We are positioned to capitalize on these positive trends given our strong financial position as we have reported $129.5 million in current assets including $49.6 million of cash and cash equivalents, in comparison to $27.6 million in current liabilities. Additionally, we generated $18.2 million in cash from operations through the midpoint of our fiscal year.

“We ended the first quarter with total revenues of approximately $34.4 million in comparison to $48.3 million in the prior year quarter. The decrease in revenue was primarily related to a decrease in sales activity from our ammunition segment as a result of the state of the US commercial ammunition market during the reported quarter. Our casing sales, however, which afford us higher gross margins, increased to $6.4 million up from $4.3 million in the prior year period. Our marketplace revenue was $12.5 million, for the reported quarter, compared to $14.6 million in the prior year quarter, which decreased as a result of the current macroeconomic environment impacting our industry as well as others.

“Cost of goods sold was approximately $26.1 million for the quarter compared to $35.5 million in the comparable prior-year quarter. The decrease in the cost of goods sold was related to the decrease in sales volume.

“Our gross margin for the quarter was $8.3 million or 24.1 percent compared to $12.8 million or 26.6 percent in the prior year period. The decrease in gross profit margin was related to the shift in our sales mix but was also related to higher costs associated with our manufacturing process in our ammunition segment. Primarily, our cost absorption suffered due to the setbacks we experienced in the reported quarter as a result of rifle casing presses going down.

“There were approximately $3.9 million of nonrecurring expenses related to legal and professional fees and accruals for contingencies from activities commencing in our 2021 and 2022 fiscal years. There was also $0.9 million of additional stock compensation expense as a result of change in control, and $0.4 million of write-offs incurred in our second fiscal quarter. All of these items, among others, are included as add backs to Adjusted EBITDA.

“For the quarter, we recorded Adjusted EBITDA of approximately $1.2 million, compared to prior year quarter Adjusted EBITDA of $5.7 million.

“This resulted in a net loss per share of ($0.07) or adjusted net income per share of $0.00, compared to the prior year period of net loss per share of ($0.01) or adjusted net income per share of $0.04.

“We continue to push forward on the improvements to our marketplace, GunBroker.com. We have formally launched OutdoorPay, our payment processing platform, and are in the process of onboarding our user base to this platform, which will enable us to launch our cart platform soon thereafter.

“We repurchased approximately 198,000 shares of our common stock under our repurchase plan in the reported quarter bringing us to just over 1.2 million shares repurchased in total under the plan.”

Photo courtesy Ammo, Inc.