AMMO, Inc. (Nasdaq: POWW, POWWP) (“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 fourth quarter and year ending
March 31, 2021.
Financial Summary for Fiscal
Fourth Quarter 2021
vs. Fiscal
Fourth Quarter 2020
- Sales for the quarter were $24.2
million – an increase of 409%
- Gross Profit Margins increased to
approximately 23% - an increase of 179%
- Operating expenses as a percentage
of sales decreased 58%
- Adjusted EBITDA increased to $4.8
million -- an increase of 296%
- Adjusted EPS increased to $0.04 –
an increase of 167%
Financial Summary
for Fiscal 2021 vs.
Fiscal 2020
- Sales for the year increased to
$62.5 million – an increase of 300%
- Gross Profit Margins increased to
approximately 18% -- an increase of 173%
- Operating expenses as a percentage
of sales decreased 61%
- Annual adjusted EBITDA increased to
$8.1 million – an increase of 213%
- Adjusted EPS Increased to $0.07 --
an increase of 150%
AMMO is positioned for exceptional growth in
Fiscal 2022 after establishing a new standard for the Company.
Demand fundamentals in the US domestic ammunition market are
exceedingly strong and we are seeing no indication of slowing. The
Company broke ground on its new state-of-the-art plant, scheduled
to be fully operational in approximately one year. And we have
established the Company as a cutting-edge design firm, announcing a
contract for the design and manufacture of technologically advanced
ballistic match ammunition for the US Department of Defense. Our
fiscal fourth quarter delivered the best quarterly performance in
Company history, with even better quarters reasonably expected to
follow throughout Fiscal 2022.
Additionally, the Company experienced sales
growth of 46% quarter-over-quarter, a $7.6 million
increase.
The Company’s margins have also increased to
approximately 23% for our fourth fiscal quarter, an increase of
179% or $7.1 million year-over-year. When depreciation and
amortization are added back to the cost of goods sold, our gross
profit margin increases to 27% for the quarter.
Our operating expenses as a percentage of sales
was 25%, representing a 58%
decrease from the prior year quarter. For the year, our operating
expense as a percentage of sales was 27%, a 61% decrease from the
prior year.
Net Loss for the quarter was approximately
$463,000, which includes approximately $3.4 million of non-cash
expenses. Net Loss for the year was approximately $7.8 million,
which also included $10.1 million in non-cash expenses.
Adjusted EBITDA has grown to $4.8 million for
the quarter - 296% increase from the prior year. For the year, our
Adjusted EBITDA was $8.1 million - 213% increase from the prior
year.
The continuing improvement in adjusted EBITDA
and margin 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.
AMMO’s adjusted earnings per share (EPS)
increased to $0.04 for our fiscal fourth quarter, representing a
167% year-over-year increase. Our adjusted EPS increased to $0.07
for the year, representing a 150% increase from the prior year.
Adjusted EPS is a metric the Company values as we believe it is a
better representation of the Company’s true operating
performance.
The revenue guidance for the 1st quarter of our
2022 Fiscal Year is $41M and will include two months of operations
from our newly acquired Gunbroker.com assets. As previously
announced, we expect to achieve profitability in this quarter.
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 |
|
|
For the |
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
March 31, 2021 |
|
|
March 31, 2020 |
|
|
|
|
|
|
|
|
Reconciliation of GAAP
net income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
Net (Loss) |
|
|
(7,812,294 |
) |
|
|
(14,556,680 |
) |
Depreciation and
amortization |
|
|
4,876,756 |
|
|
|
4,455,962 |
|
Interest expense, net |
|
|
3,009,094 |
|
|
|
719,187 |
|
Excise taxes |
|
|
4,286,258 |
|
|
|
643,735 |
|
Employee stock awards |
|
|
1,450,359 |
|
|
|
901,526 |
|
Stock grants |
|
|
278,585 |
|
|
|
534,929 |
|
Stock for services |
|
|
1,707,500 |
|
|
|
352,300 |
|
Contingent consideration fair
value |
|
|
(119,731 |
) |
|
|
(190,377 |
) |
Other income |
|
|
(576,785 |
) |
|
|
- |
|
Loss on purchase |
|
|
1,000,000 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
8,099,742 |
|
|
$ |
(7,139,418 |
) |
|
|
For the Year Ended March 31, 2021 |
|
|
|
|
|
For the Year Ended March 31, 2020 |
|
|
|
|
|
For the Three Months Ended March 31, 2021 |
|
|
|
|
|
For the Three Months Ended March 31, 2020 |
|
|
|
|
Reconciliation of GAAP
net income to Fully Dilutive Adjusted EPS(1)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss) |
|
$ |
(7,812,294 |
) |
|
$ |
(0.13 |
) |
|
$ |
(14,556,680 |
) |
|
$ |
(0.27 |
) |
|
$ |
(463,443 |
) |
|
$ |
(0.01 |
) |
|
$ |
(4,406,598 |
) |
|
$ |
(0.10 |
) |
Depreciation and
amortization |
|
|
4,876,756 |
|
|
|
0.08 |
|
|
|
4,455,962 |
|
|
|
0.08 |
|
|
|
1,287,790 |
|
|
|
0.02 |
|
|
|
1,498,625 |
|
|
|
0.03 |
|
Interest expense, net |
|
|
3,009,094 |
|
|
|
0.05 |
|
|
|
719,187 |
|
|
|
0.01 |
|
|
|
304,779 |
|
|
|
0.00 |
|
|
|
111,477 |
|
|
|
0.00 |
|
Employee stock awards |
|
|
1,450,359 |
|
|
|
0.02 |
|
|
|
901,526 |
|
|
|
0.02 |
|
|
|
733,770 |
|
|
|
0.01 |
|
|
|
212,776 |
|
|
|
0.00 |
|
Stock grants |
|
|
278,585 |
|
|
|
0.00 |
|
|
|
534,929 |
|
|
|
0.01 |
|
|
|
65,455 |
|
|
|
0.00 |
|
|
|
(13,129 |
) |
|
|
(0.00 |
) |
Stock for services |
|
|
1,707,500 |
|
|
|
0.03 |
|
|
|
352,300 |
|
|
|
0.01 |
|
|
|
1,620,000 |
|
|
|
0.02 |
|
|
|
80,300 |
|
|
|
0.00 |
|
Contingent consideration fair
value |
|
|
(119,731 |
) |
|
|
(0.00 |
) |
|
|
(190,377 |
) |
|
|
(0.00 |
) |
|
|
(31,625 |
) |
|
|
(0.00 |
) |
|
|
(190,377 |
) |
|
|
(0.00 |
) |
Other income |
|
|
(576,785 |
) |
|
|
(0.01 |
) |
|
|
- |
|
|
|
- |
|
|
|
(302,385 |
) |
|
|
(0.00 |
) |
|
|
- |
|
|
|
- |
|
Loss on purchase |
|
|
1,000,000 |
|
|
|
0.02 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
$ |
3,813,484 |
|
|
$ |
0.07 |
|
|
$ |
(7,783,153 |
) |
|
$ |
(0.14 |
) |
|
$ |
3,214,341 |
|
|
$ |
0.04 |
|
|
$ |
(2,706,926 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Fully Dilutive Weighted Shares Outstanding were 58,549,449
and 54,112,309, respectively for the years ended March 31, 2021 and
2020.
(2) Fully Dilutive Weighted Shares Outstanding were 72,598,171
and 45,970,236, respectively, for the three months ended March 31,
2021 and 2020.
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 and law enforcement use. For more
information, please visit: www.ammo-inc.com.
About GunBroker.com
As an AMMO subsidiary, 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 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 2021 Earnings Call is scheduled
for Tuesday, June 29, 2021 (5:00 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=145369) at least 5-10
minutes prior to the scheduled start and follow the operator’s
instructions. When requested, please ask for the “AMMO, Inc. Fiscal
2021 Earnings Call.”
Investor Contact:Rob Wiley,
CFOAMMO, Inc.Phone: (480) 947-0001IR@ammo-inc.com
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