Outdoor Holding Company

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the Ammo, Inc. Fourth Quarter and Fiscal Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a telephone keypad. To withdraw your question, please press star, then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. I would now like to turn the call over to Scott Arnold of CoreIR, the company's investor relations firm. Please go ahead, sir.

Good afternoon, and thank you for participating in today's conference call. Joining me from AMA's leadership team are Fred Lagenhals, Executive Chairman, Jared Smith, Chief Executive Officer, and Rob Wiley, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address AMLO's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in AMLO's most recently filed periodic reports on Form 10-K and Form 10-Q, the form 8K filed with the SEC today and the company's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes non-GAAP financial measures that AMMO believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For reconciliation of this non-GAAP financial measure to net loss, it's most directly comparable GAAP financial measure please see the reconciliation table located in the company's earnings press release. The content of this call contains time-sensitive information that is accurate only as of today, June 13th, 2024. Except as required by law, AMO disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to AMO's Chief Executive Officer, Jared Smith.

Good afternoon, everyone. Thank you for joining us for our fourth quarter and fiscal year 2024 earnings call. When I joined AMMO at the beginning of last year, we undertook a number of major initiatives to improve profitability and growth. This past fiscal year has provided several unforeseen challenges, but we remain confident in the changes we are making at both GunBroker and at our ammunition manufacturing facility in Wisconsin. We continue to make progress in our fiscal fourth quarter and ended the fiscal year with a strong pipeline for ammunition and casing sales while accelerated our build out of GunBroker's capabilities. Sales increased sequentially for ammo ink despite a softening market as reported by other publicly traded competitors in this space. We have started to execute on the strongest development roadmap for GunBroker in its 25 year history and continue to bring on additional capacity at our plant as we begin delivery on our open orders and contractual commitments. Ammo is at a pivotal point as we start our 2025 fiscal year. We have changed the trajectory of the business in these past 12 months and continue to optimize the business onto a path toward building shareholder value. We have reduced our working inventory and generated 32.6 million in cash from operations, increasing our cash balances by 16 million in the fiscal year. We have established a credit line of 20 million with Sunflower Bank, reduced working capital needs, paid down 3.6 million in debt, and delivered adjusted EBITDA margins of 10.6%. As we sit here in June, we have never been more poised for success. I will now go into detail on our execution and our positioning for the future. Let me first speak to our progress at GunBroker. As we start to stretch our marketplace legs, we are finding new opportunities to empower our sellers on the platform to bundle accessories and cross in contrast to the singular transaction firearm business of the past. I would also like to highlight a few recent additional enhancements to GunBroker made by our dedicated team. We've taken an aggressive customer acquisition approach and launched over 200 different persona lifestyle campaigns where customers can choose their passion and be transported into a shopping experience specific to the user selection. Just last week, we launched our new Collectors Elite site, which is focused on catering to serious sellers and collectors by curating a premium experience without the hefty fees seen at other luxury firearm auctions. Most importantly, we signed with GearFire Capital, which will enable GunBroker to extend its offerings to include consumer financing solutions tailored specifically for the firearms industry, making it easier for buyers to purchase the products they need and want. We've never had a roadmap and delivery plan as aggressive as the team is delivering today. In the coming months we'll be adding shipping solutions, cross-selling enhancements specific to searched items, and we'll be adding the tools and category algorithms to facilitate the growing sales of firearm accessories. In combination, we believe these will provide the largest platform for shooting enthusiasts to determine market value and do comparison shopping across the largest marketplace for firearms and accessories in the industry. Gunbroker continues to be the premier marketplace for outdoor enthusiasts, connecting buyers and sellers around a community of passionate users, collectors, and professionals. This has played out as we've added new metrics for customer satisfaction and ensuring our internal metrics are in line with market expectations. We recently scored a net promoter score, or NPS, of 71%. where above 50 is excellent and 80% is considered world-class. It is independent metrics like these that demonstrate how closely our community and our leadership team work in unison. GunBroker is evolving into a community where not just products, but expertise and experiences can be shared. This is our future, and it will chart how we will continue to drive shareholder returns for years to come. Now for an update on ammo. In the fourth quarter, ammunition demand remained solid, despite a tough environment, and we continued the infilling of our production facility. We brought in-house tooling design and manufacturing and set new drawing equipment on the floor for our .50 caliber production line necessary to start on our contract with Zero Delta. We take delivery next month of a new annealing oven that will remove a constraint that continued to be a bottleneck for our process. As well, we delivered the first 15,000 pieces of 12.7x108, the Russian equivalent of .50 caliber, last week for our delivery to Zero Delta and will continue production for our other clients throughout 2024. While we struggle with overhead absorption due to the lower capacity yields of a new factory, we continue to see improved margin and pricing going into 2025 as we start to increase our capacities for medium and large rifle calibers. We believe propellant production will impose constraints in the market, which will continue to affect imports and smaller manufacturers, giving Ammo Inc. and the market some breathing room at the retail shelf as we head into the fall. Ammo Inc. started delivery last quarter on its new hunt line, as well as delivering new calibers to our rifle lineup like .45-70, .65 Grendel, and .35 Whelan. While we see higher commodity pricing for copper and powder, we are still able to absorb or pass on these costs this year as demand for our brass casing business has not waned and inventory levels of ammo seem to be stabilized at retail. The measurable softness in the market has resulted in a decrease in firearm sales, but we have not seen a decrease in premium rifle ammunition demand, rifle casings, or for calibers that feed the emerging lever action rifle category. We believe this trend will continue through the second and third quarters. As we brought our rifle production online in Q4, we recognized the need for organizational and operational process improvements. In response, we've engaged a global consulting firm focused on process and continuous improvement. This extensive operations review will proceed for the next 28 weeks, focused on increasing financial results through improving accountability, material flows, better sales, inventory operations, and planning processes, and remove critical constraints that will pay dividends for years to come as we infill our new plant capacity with best in class process and organizational improvements. As we've discussed on previous calls, this past year has been focused on resetting the factory from low margin pistol production to high volume, high margin rifle production. These changes have not come easily and have not come overnight, but we are seeing the fruits of our efforts and while not providing guidance at this time, we see a strong path to profitability in the coming quarters for the ammunition division. I will now turn it over to Rob Wiley, our CFO, to discuss our financials in further detail.