AMMO, Inc. Releases Transcript of February 16th Earnings Call and Follow-Up Q&A

Rhea-AI Summary

AMMO, Inc. (Nasdaq: POWW) announced positive financial indicators during its Q3 earnings call on February 16, 2021. The company reported a positive Adjusted EBITDA of $2.4 million for the quarter, contributing to a nine-month total of $3.3 million. Despite a net loss of $1.9 million, excluding non-cash expenses, AMMO achieved a net income of approximately $500,000. The gross margin for Q3 reached around 20%, an 88% increase compared to the prior quarter. AMMO expects transformative growth in FY2022, driven by a pending acquisition and operational efficiencies.

Positive

• Positive Adjusted EBITDA of $2.4 million for Q3.
• Net income of approximately $500,000 after excluding non-cash expenses.
• Gross margin increased to 20%, an 88% rise quarter-over-quarter.
• Anticipated cost savings of approximately $1 million by consolidating manufacturing facilities.

Negative

• Net loss of approximately $1.9 million reported for the quarter.

SCOTTSDALE, Ariz., Feb. 18, 2021 (GLOBE NEWSWIRE) -- AMMO, Inc. (Nasdaq: POWW ) (“AMMO” or the “Company”), a premier American ammunition and munition components manufacturer and technology leader, is pleased to provide a link to the transcript and summary excerpts of the Q&A session from the Company’s 2021 Third Quarter Earnings call held on February 16, 2021.

Replay:
https://ammoinc.com/wp-content/uploads/2021/02/20210216-143495-ammoinc.mp3

Fiscal 2022 is positioned to be transformative in AMMO’s opinion, with revenue and earnings per share increasing significantly as the Company continues to deploy resources to solidify Fiscal 2021’s trajectory.

Q&A session:

Moderator

Our first question comes from the line of Trey Kidd with Raymond James. You may proceed with your question.

Trey Kidd

Hi, guys, congrats on the quarter. Just had a two-part question here. Can you explain Adjusted EBITDA, and can you also expand on the net loss?

Rob Wiley (CFO)

Yes. Thank you, Trey.

Adjusted EBITDA is an EBITDA calculation which includes add-backs for other non-cash expenses or non-recurring items. We ended the quarter with positive Adjusted EBITDA of approximately $2.4 million and for the nine month period, positive Adjusted EBITDA of $3.3 million.

Moving on to your question about our net loss, we ended the quarter with net loss of approximately $1.9 million, which included $2.4 million of non-cash expenses. If excluded, this would translate into positive net income of approximately $500,000.

I think this is a great question because it's important for our shareholders to understand that when non-cash expenses like depreciation, amortization and others are added back, it resulted in positive net income of $500,000. Also, we expect this number to grow rapidly in upcoming quarters.

Moderator

I think we're ready for the next question. Our next question comes from the line of Lisa Kay, Private Investor. You may proceed with your question.

Lisa Kay

Hi, guys. I wanted to congratulate you on the great job you did this quarter. I also wanted to ask if you could shed some light on the increased margin.

Rob Wiley (CFO)

Yes. Thank you, Lisa.

Our margins for the third quarter of the fiscal year were approximately 20%. If non-cash depreciation and amortization are added back, our margins for the quarter would be approximately 25%. As a standalone, the margin for the quarter was an 88% increase quarter-over-quarter. Our margins are dramatically increasing as our sales are increasing.

Moderator

Our next question comes from the line of Gene Webb with Paulson Investment Company. You may proceed with your question.

Gene Webb

Hi, guys. Again, congrats on the great quarter for you and all the team. You've done a great job of growing this company.

My question is: when do you expect the GunBrokers.com transaction to close, and what that means to us going forward for revenues? Thank you.

Rob Wiley (CFO)

Thank you, Gene.

Right now, we're working diligently through the definitive agreement and we have antitrust laws we have to abide by. Our working close date as of now is March 31, but we are working hard to close the transaction prior to our year end. Upon closing the transaction, this will be highly accretive for us, which will allow us to generate significant free cash flow and positive earnings per share.

Moderator

Our next question comes from the line of Len Combs, Private Investor. You may proceed with your question.

Len Combs

Hi. Thanks. Great job, guys.

You previously went over combining your two manufacturing locations into one state-of-the-art plant, what's the timing on that, and again, the potential cost?

Rob Wiley

Thanks, Len.

We anticipate moving into our new facility by May of 2022. More importantly, we estimate annual cost savings of approximately a million dollars.

Len Combs

Great. Thank you.

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.

Investor Contact:
Rob Wiley, CFO
AMMO, Inc.
Phone: (480) 947-0001
IR@ammo-inc.com

FAQ

What were AMMO's earnings results for Q3 2021?

AMMO reported a positive Adjusted EBITDA of $2.4 million for Q3 2021.

What is the net income for AMMO in Q3 2021?

The net income for AMMO in Q3 2021, after adjusting for non-cash expenses, was approximately $500,000.

How did AMMO's gross margin perform in Q3 2021?

AMMO's gross margin for Q3 2021 was approximately 20%, representing an 88% increase quarter-over-quarter.

What is AMMO's outlook for FY2022?

AMMO expects transformative growth for FY2022, driven by strategic acquisitions and operational efficiencies.

When is the expected close date for the GunBrokers.com transaction?

The expected close date for the GunBrokers.com transaction is March 31, 2021.