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• Total Revenue: $31 million, down from $34.3 million in the prior year quarter.

• Ammunition Segment Revenue: $18.7 million.

• Marketplace Segment Revenue: $12.3 million.

• Cost of Revenues: $21.2 million, compared to $20.2 million in the prior year quarter.

• Gross Margin: $9.8 million or 31.6%, down from $14 million or 40.9% in the prior year period.

• Marketplace Segment Gross Margin: $10.5 million or 85.6%.

• Ammunition Segment Gross Margin: Negative $0.7 million or negative 4%.

• Non-Recurring Expenses: $6.3 million, including $3.2 million related to litigation.

• Adjusted EBITDA: $2 million, compared to $6.5 million in the prior year quarter.

• Loss Per Share: $0.07 for the quarter.

• Adjusted Net Income Per Share: $0.01, compared to a loss per share of $0.02 in the prior year quarter.

• Net Working Capital: $134 million in current assets, including $50.8 million in cash and cash equivalents.

• Current Liabilities: $42.3 million.

• Share Repurchases: Approximately 580,000 shares repurchased in the quarter, totaling over 1.9 million shares since December 2020.

• Warning! GuruFocus has detected 4 Warning Signs with POWW.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AMMO Inc (NASDAQ:POWW) is transforming its ammunition plant to focus on higher-margin rifle and pistol production, which is expected to improve profitability.

• The company is strategically positioning its marketplace, GunBroker, as an innovative e-commerce leader with enhanced functionality and diversified product offerings.

• AMMO Inc (NASDAQ:POWW) increased its take rate on GunBroker by 40 basis points, from 5.8% to 6.2%, through category fee changes and increased advertising revenue.

• The company has identified up to $15 million in cost-cutting and working capital opportunities, which are expected to be realized over the next 18 to 24 months.

• AMMO Inc (NASDAQ:POWW) has a strong financial position with $134 million in current assets, including $50.8 million in cash and cash equivalents, supporting its transformation efforts.

Negative Points

• Total revenues decreased to approximately $31 million from $34.3 million in the prior year quarter, reflecting a decline in activity across both reporting segments.

• The ammunition segment reported a negative gross margin of 4%, attributed to production inefficiencies and a shift in sales mix.

• The company faced $6.3 million in non-recurring expenses, including legal and professional fees, impacting adjusted EBITDA.

• AMMO Inc (NASDAQ:POWW) is experiencing challenges with overhead absorption due to lower capacity yields in its new factory.

• The company is pulling back on non-attractive product segments due to low margins and propellant supply issues, which may negatively affect top-line revenue.