AMMO, Inc. Announces Acquisition of Tooling Manufacturer

Rhea-AI Summary

AMMO, Inc. announces the acquisition of a tooling manufacturer to enhance ammunition production in its Manitowoc factory, expecting over $1 million in annual cost savings. The move aims to streamline operations, reduce lead times, and strengthen market leadership.

Positive

• AMMO, Inc. expects over $1 million in annualized cost savings from the acquisition of a tooling manufacturer for ammunition production.
• Insourcing over 90% of tooling manufacturing will streamline plant operations and optimize management.
• The acquisition enhances vertical capabilities, speeding up to market, reducing lead times, and improving cost control.
• The move is expected to generate significant cost savings, strengthening AMMO, Inc.'s strategic position as market leaders.

Negative

• None.

Insights

Financial Analyst

The acquisition of a tooling manufacturer by AMMO, Inc. is a strategic move that could potentially enhance the company's operational efficiency. By insourcing over 90% of its tooling production, AMMO is poised to achieve tighter control over its manufacturing processes and cost structures. The anticipated savings of over $1 million annually in this context indicates a significant reduction in production expenses, which should positively influence the company's gross margins and net income over time.

The company's stock value may see a favorable response as investors often look favourably upon initiatives that can demonstrably reduce costs and improve operational efficiencies. Additionally, streamlined operations could lead to faster delivery times, which may enhance customer satisfaction and competitive edge. However, it is important for investors to monitor post-acquisition integration to ensure that the anticipated cost savings and efficiencies materialize without unforeseen complications.

Operations Management Expert

AMMO's insourcing initiative indicates a move towards a more integrated supply chain, which is often associated with higher levels of control over quality and scheduling. Streamlining operations can lead to reduced lead times, which is critical in the manufacturing sector. By reducing dependency on external suppliers, AMMO could potentially mitigate risks associated with supplier unreliability or market volatility, resulting in a more predictable and stable manufacturing cycle.

However, the long-term success of this strategy will depend on the effective management of the newly acquired operations and the ability to integrate them seamlessly into existing processes. It should also be noted that the acquisition's financial and operational benefits could take time to fully realize and challenges such as training costs, cultural integration and potential initial decreases in productivity should not be underestimated.

Insourcing of tool manufacturing expected to achieve over
$1 million in annualized cost savings

SCOTTSDALE, Ariz., April 25, 2024 (GLOBE NEWSWIRE) -- AMMO, Inc. (Nasdaq: POWW, POWWP) (“AMMO” or the “Company”) the owner of GunBroker.com, the largest online marketplace serving the firearms and shooting sports industries, and a leading vertically integrated producer of high-performance ammunition and components, announces that it has acquired a tooling manufacturer that provides key resources toward the production of ammunition in its Manitowoc, Wisc. factory. The Company expects that this acquisition will result in both streamlined operation of the factory and an annualized cost savings of over $1 million.

“This acquisition was an essential step towards streamlining our plant operations by insourcing over 90% of our tooling manufacturing. We believe it will provide significant benefit as we continue to optimize the plant’s management,” said Jared Smith, Ammo, Inc. chief executive officer. “By strengthening our vertical capabilities, we enhance our speed to market, reduce lead times and better control costs. We expect these benefits will generate considerable cost savings and strengthen our strategic position as market leaders.”

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 specialty rounds for military and law enforcement use via government programs. For more information, please visit: www.ammoinc.com.

About GunBroker.com

GunBroker.com is the largest online marketplace dedicated to firearms, hunting, shooting and related products. Aside from merchandise bearing its logo, GunBroker.com currently sells none of the items listed on its website. Third-party sellers list items on the site and Federal and state laws govern the sale of firearms and other restricted items. Ownership policies and regulations are followed using licensed firearms dealers as transfer agents. Launched in 1999, GunBroker.com is an informative, secure and safe way to buy and sell firearms, ammunition, air guns, archery equipment, knives and swords, firearms accessories and hunting/shooting gear online. GunBroker.com promotes responsible ownership of guns and firearms. For more information, please visit: www.gunbroker.com.

Forward Looking Statements

This document contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words like “may,” “will,” “likely,” “should,” “expect,” “anticipate,” “future,” “plan,” “believe,” “intend,” “goal,” “seek,” “estimate,” “project,” “continue,” and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions regarding the future of the business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. 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 Current Reports filed on Form 8-K. Copies of these filings are available at investors.ammoinc.com.

Investor Contact:

Matt Blazei
CORE IR
516-386-0430
ir@ammo-inc.com

Source: AMMO, Inc.

FAQ

What did AMMO, Inc. announce regarding an acquisition?

AMMO, Inc. announced the acquisition of a tooling manufacturer to enhance ammunition production in its Manitowoc factory.

What cost savings does AMMO, Inc. expect from the acquisition?

AMMO, Inc. expects over $1 million in annualized cost savings from the acquisition of the tooling manufacturer.

How does AMMO, Inc. plan to streamline operations?

AMMO, Inc. plans to streamline operations by insourcing over 90% of tooling manufacturing.

What benefits does AMMO, Inc. anticipate from the acquisition?

AMMO, Inc. anticipates benefits such as speeding up to market, reducing lead times, and improving cost control.

Who is the chief executive officer of Ammo, Inc.?

Jared Smith is the chief executive officer of Ammo, Inc.