On June 13, 2024, AMMO Inc (POWW, Financial) released its 8-K filing for the fourth quarter and fiscal year 2024, ending March 31, 2024. AMMO Inc, the owner of GunBroker.com and a vertically integrated producer of high-performance ammunition, reported a challenging fiscal year with notable declines in revenue and earnings.
Company Overview
AMMO Inc is a prominent player in the firearms and shooting sports industries, owning GunBroker.com, the largest online marketplace for firearms. The company designs, manufactures, and markets ammunition products, with its operations divided into two segments: Ammunition and Marketplace. The Ammunition segment focuses on high-performance ammunition and components, while the Marketplace segment revolves around the GunBroker.com platform.
Fiscal Year 2024 Performance
For the fiscal year 2024, AMMO Inc reported net revenues of $145.1 million, a 24.2% decrease from the previous year. The gross profit margin stood at approximately 29.4%, while adjusted EBITDA was $15.4 million, down from $26.4 million. The company recorded a net loss of $15.6 million, compared to a net loss of $4.6 million in the prior year, resulting in a diluted EPS of ($0.16) versus ($0.07) last year. Adjusted EPS was $0.09, down from $0.16.
Fourth Quarter 2024 Overview
In the fourth quarter, AMMO Inc reported net revenues of $40.4 million, a 7.5% decrease from the same period last year. The gross profit margin was approximately 23.3%. Adjusted EBITDA for the quarter was $2.2 million, compared to $3.8 million in the prior year. The net loss for the quarter was $5.3 million, compared to a net loss of $2.9 million in the same period last year, resulting in a diluted EPS of ($0.05) versus ($0.04) last year. Adjusted EPS was $0.01, down from $0.02.
GunBroker.com Marketplace Metrics
For the fiscal year 2024, GunBroker.com generated marketplace revenue of approximately $53.9 million. New user growth averaged 30,000 per month, and the average take rate increased to 5.9% compared to 5.6% in fiscal 2023. In the fourth quarter, marketplace revenue was approximately $13.6 million, with new user growth averaging 32,000 per month and an average take rate of 6.0%.
Financial Highlights
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Revenues | $40.4 million | $43.7 million | $145.1 million | $191.4 million |
| Gross Profit Margin | 23.3% | 27.3% | 29.4% | 28.9% |
| Adjusted EBITDA | $2.2 million | $3.8 million | $15.4 million | $26.4 million |
| Net Loss | ($5.3 million) | ($2.9 million) | ($15.6 million) | ($4.6 million) |
| Diluted EPS | ($0.05) | ($0.04) | ($0.16) | ($0.07) |
CEO Commentary
Jared Smith, AMMO’s CEO, commented, “Sales increased sequentially despite a slower market environment. We continued to make progress this quarter and ended the fiscal year with a strong pipeline of rifle ammunition and casing sales while accelerating our buildout of GunBroker’s capabilities. This is most evident as we start to deliver on our ZRO Delta contract, while continuing the advancement in financing, cross selling, and carting of accessories that will take place with GunBroker in Fiscal 2025.”
Financial Position
As of March 31, 2024, AMMO Inc reported $131.5 million in current assets, including $55.6 million in cash and cash equivalents. Current liabilities stood at $30.9 million. The company generated $32.6 million in cash from operations for the fiscal year.
Analysis
AMMO Inc's performance in fiscal year 2024 reflects the challenges faced by the firearms and ammunition industry amid a slower market environment. The decline in revenue and earnings highlights the impact of macroeconomic factors on the company's operations. However, the sequential increase in sales and the strategic initiatives to enhance GunBroker's capabilities and shift towards higher-margin products indicate potential for future growth. The company's strong cash position and focus on improving production capacities are positive signs for its financial stability and operational efficiency moving forward.
Explore the complete 8-K earnings release (here) from AMMO Inc for further details.
