AMMO, Inc. (Nasdaq: POWW ) (“AMMO” or the “Company”), a premier
American ammunition and munition components manufacturer and
technology leader, is pleased to announce it has reported financial
results for its fiscal third quarter ending December 31, 2020.
Financial Summary for Fiscal Third
Quarter 2021 vs. Fiscal Third Quarter 2020
- Sales for the quarter were $16.6
million - 500% increase in comparison to the
Fiscal 2020 quarter.
- Sales for the nine months increased
282% to $38.3 million.
- Gross Profit Margins increased to
approximately 20%, an increase of 163%.
- Operating expenses as a percentage
of sales decreased 28% from the prior year.
- Adjusted EBITDA has grown to $2.4
million for the quarter - 295% increase from the prior year.
AMMO is positioned for exceptional growth,
setting a new standard in Fiscal 2021. Demand fundamentals in the
US domestic ammunition market are exceedingly strong and we are
seeing no indication of slowing. Our fiscal third quarter delivered
the best quarterly performance in Company history, with even better
quarters expected throughout fiscal 2022.
AMMO’s sales for the quarter were $16.6 million,
a 500% increase in comparison to the Fiscal 2020
quarter. Sales for the nine-month period (year-over-year) increased
282% to $38.3 million.
Additionally, the Company experienced sales
growth of 38% quarter-over-quarter, a $4.6 million
increase.
The Company’s margins have also increased to
approximately 20% for our third fiscal quarter, an increase of 163%
or $4.2 million year-over-year. When depreciation and amortization
are added back to the cost of goods sold, our gross profit margin
increases to 25% for the quarter.
Our operating expenses as a percentage of sales
was 23% - 28% decrease from the
prior year quarter.
Net Loss for the quarter was approximately $1.9
million, which includes approximately $2.4 million of non-cash
expenses. Net Loss for the nine months was approximately $7.3
million, which also included non-cash expenses of $7.1 million.
Adjusted EBITDA has grown to $2.4 million for
the quarter - 295% increase from the prior year. For the nine-month
period, our Adjusted EBITDA was $3.3 million - 170% increase from
the prior year.
The adjusted EBITDA and margin improvement shows
the impact of the scaling we are beginning to see in our
operational costs. We expect our first half fiscal 2022 EBITDA to
be better than the second half of fiscal 2021 as a standalone.
The guidance for our fiscal 4th quarter as a
standalone company is $20M and $58M for our fiscal year ended March
31, 2021. We will be updating guidance if and as the previously
announced Gunbroker.com transaction comes into focus such that it
has an impact on our fourth quarter results.
Non-GAAP Financial Measures
We analyze operational and financial data to
evaluate our business, allocate our resources, and assess our
performance. In addition to total net sales, net loss, and other
results under generally accepted accounting principles (GAAP), the
following information includes key operating metrics and non-GAAP
financial measures we use to evaluate our business. We believe
these measures are useful for period-to-period comparisons of the
Company. We have included these non-GAAP financial measures in this
Quarterly Report on Form 10-Q because they are key measures we use
to evaluate our operational performance, produce future strategies
for our operations, and make strategic decisions, including those
relating to operating expenses and the allocation of our resources.
Accordingly, we believe these measures provide useful information
to investors and others in understanding and evaluating our
operating results in the same manner as our management and board of
directors.
Adjusted EBITDA
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
|
|
|
31-Dec-20 |
|
|
|
31-Dec-19 |
|
|
|
31-Dec-20 |
|
|
|
31-Dec-19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP
net income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(1,906,437 |
) |
|
$ |
(2,864,422 |
) |
|
$ |
(7,348,851 |
) |
|
$ |
(10,150,082 |
) |
Depreciation and
amortization |
|
|
1,224,130 |
|
|
|
883,692 |
|
|
|
3,588,966 |
|
|
|
2,957,337 |
|
Loss on Jagemann Munition
Components |
|
|
- |
|
|
|
- |
|
|
|
1,000,000 |
|
|
|
- |
|
Excise Taxes |
|
|
1,201,841 |
|
|
|
138,529 |
|
|
|
2,707,534 |
|
|
|
374,132 |
|
Interest expense, net |
|
|
1,938,630 |
|
|
|
214,326 |
|
|
|
2,704,315 |
|
|
|
607,710 |
|
Employee stock awards |
|
|
240,853 |
|
|
|
182,250 |
|
|
|
716,589 |
|
|
|
688,750 |
|
Stock grants |
|
|
65,455 |
|
|
|
168,363 |
|
|
|
213,130 |
|
|
|
548,057 |
|
Stock for services |
|
|
87,500 |
|
|
|
72,000 |
|
|
|
87,500 |
|
|
|
272,000 |
|
Other income, net |
|
|
(461,000 |
) |
|
|
- |
|
|
|
(274,400 |
) |
|
|
- |
|
Contingent consideration fair
value |
|
|
(30,748 |
) |
|
|
- |
|
|
|
(88,106 |
) |
|
|
- |
|
Adjusted EBITDA |
|
$ |
2,360,224 |
|
|
$ |
(1,205,262 |
) |
|
$ |
3,306,677 |
|
|
$ |
(4,702,096 |
) |
Adjusted EBITDA is a non-GAAP financial measures that
displays our net loss, adjusted to eliminate the effect of certain
items as described below.
We have excluded the following non-cash expenses
from our non-GAAP financial measures: depreciation and
amortization, loss on purchase, share-based compensation expenses,
and changes to the contingent consideration fair value. We believe
it is useful to exclude these non-cash expenses because the amount
of such expenses in any specific period may not directly correlate
to the underlying performance of our business operations.
Adjusted EBITDA as a non-GAAP financial measure
also excludes other cash interest income and expense, as these
items are not components of our core operations. We have not
included adjustment for any provision or benefit for income taxes
as we currently record a valuation allowance and have included
adjustment for excise taxes.
Non-GAAP financial measures have limitations,
should be considered as supplemental in nature, and are not meant
as a substitute for the related financial information prepared in
accordance with GAAP. These limitations include the
following:
- Employee stock awards and stock
grants expense has been, and will continue to be for the
foreseeable future, a significant recurring expense in the Company
and an important part of our compensation strategy;
- The assets being depreciated or
amortized may have to be replaced in the future, and the non-GAAP
financial measures do not reflect cash capital expenditure
requirements for such replacements or for new capital expenditures
or other capital commitments;
- Non-GAAP measures do not reflect
changes in, or cash requirements for our working capital needs;
and
- Other companies, including
companies in our industry, may calculate the non-GAAP financial
measures differently or not at all, which reduces their usefulness
as comparative measures.
Because of these limitations, you should
consider the non-GAAP financial measures alongside other financial
performance measures, including our net loss and other financial
results presented in accordance with GAAP.
About AMMO, Inc.
With its corporate offices headquartered in
Scottsdale, Arizona. AMMO designs and manufactures products for a
variety of aptitudes, including law enforcement, military, sport
shooting and self-defense. The Company was founded in 2016 with a
vision to change, innovate and invigorate the complacent munitions
industry. AMMO promotes branded munitions as well as its patented
STREAK™ Visual Ammunition, /stelTH/™ subsonic munitions, and armor
piercing rounds for military use. For more information, please
visit: www.ammo-inc.com.
Forward Looking Statements
This document contains certain “forward-looking
statements”. All statements other than statements of historical
fact are “forward-looking statements” for purposes of federal and
state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any
statements of the plans, strategies, goals and objectives of
management for future operations; any statements concerning
proposed new products and services or developments thereof; any
statements regarding future economic conditions or performance; any
statements or belief; and any statements of assumptions underlying
any of the foregoing.
Forward looking statements may include the words
“may,” “could,” “estimate,” “intend,” “continue,” “believe,”
“expect” or “anticipate” or other similar words, or the negative
thereof. These forward-looking statements present our estimates and
assumptions only as of the date of this report. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the dates on
which they are made. We do not undertake to update forward-looking
statements to reflect the impact of circumstances or events that
arise after the dates they are made. You should, however, consult
further disclosures and risk factors we include in Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, and Reports filed on
Form 8-K.
Reminder – Earnings Call
AMMO’s Fiscal Third Quarter 2021 Earnings Call
is scheduled for Tuesday, February 16th, 2021 (4:30 pm Eastern
Time). To participate in the conference call, please join by
dialing 1-877-407-0789 (domestic), 1-201-689-8562 (international),
or via webcast (http://public.viavid.com/index.php?id=143495) at
least 5-10 minutes prior to the scheduled start and follow the
operator’s instructions. When requested, please ask for “AMMO, Inc.
Fiscal Third Quarter 2021 Earnings Call.”
Investor Contact:Rob Wiley,
CFOAMMO, Inc.Phone: (480) 947-0001IR@ammo-inc.com
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