Q3 2022 Ammo Inc Earnings Call
Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss Ammo, Inc.'s financial results for the third fiscal quarter of 2022.
At this time all participants are in a listen-only mode. Following the formal remarks, we will conduct a question and answer session and instructions will be provided at that time for you to queue up.
Hosting today's conference will be Reid Anderson with ICR.
As a reminder, today's conference is being recorded and now I would like to turn the conference over to Mr. Anderson. Please go ahead, sir.
Thank you. Good afternoon, and welcome to Ammo, Inc Conference call to discuss results for the third quarter of fiscal 2022.
On the call today from Ammo Inc with prepared remarks are Fred Wagenhals, Chairman and Chief Executive Officer, Rob Goodmanson, President and Rob Wiley, Chief Financial Officer. By now everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 P.M Eastern time. If you've not received this release, it is available.
On the Investor Relations portion of Ammo Inc's website at www.ammoinc.com. This call is being webcast and a replay will be available on the company's website as well.
Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve in here.
Risks and uncertainties, including those identified in the risk factors section of Ammo Inc's most recently filed Forms 10-K and 10-Q.
Please note that during today's call, we will discuss non-GAAP financial measures, including results on adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into Ammo Inc's ongoing results of operations, particularly when comparing underlying operating results from period to period. We've included a reconciliation.
of these non-GAAP measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast February 14, 2022.
Ammo Inc has no obligation to update any forward-looking projections that may be made in today's release or call.
Now I will turn the call over to Fred Wagenhals, Chairman and Chief Executive Officer of Ammo Inc.
Thanks, Reed. Good afternoon, and thank you all for joining us today.
Q3 was another record-setting quarter for our company and our strategy and our amazing teams work ethic is driving record results.
We have again reached another record-breaking quarter sales and set new records for EBITDA, making our ninth straight quarter of record financial performance.
Ammo's year to date revenues growth rate of 344% was driven from a.
Revenue base that grew by approximately 287% in comparison to a year over year quarterly comparison.
These results were fueled by continuing high demand for our key products across our full portfolio.
Coupled with organic growth.
As a result of our new innovation and continued scaling.
And the efficiencies of operation at the emulation and gun broker.com marketplace.
Operational levels.
As we continue to integrate.
And leverage the GunBroker.com marketplace.
It posted an impressive quarter of performance, especially when you consider the post-COVID-19 market. The industry has been operating in since April 2020. These impressive results are truly a testament to our team efforts.
Okay.
I would like to bring you up to date and answer most of the questions I get hit with daily from investors.
Stock repurchase.
The Board of Directors recently authorized a share repurchase program for up to $30 million of its outstanding common stock.
This repurchase of up to $30 million of stock represents our commitment to increasing shareholder value and gives us flexibility.
To deploy some of our cash flow into our future.
Our strong balance sheet.
And rapidly growing revenues, we believe it is appropriate to have the option to repurchase stock if it makes sense.
As the best investment at that time.
Yeah.
Capacity. As we noted in our recent revenue guidance for full-year of fiscal 2022 of $250 million.
As we noted in our recent revenue guidance for full year of fiscal 2022 of $250 million.
We see no slowdown in demand for our ammunition.
And our current production levels, our entire production is completely sold out for 2022.
We are increasing production monthly and look forward to the completion of our new state of the art manufacturing facility.
This facility will allow us to ramp up capacity quickly to meet customers' demand.
We continue to invest in people and manufacturing equipment as we prepare to launch our new facility.
We are well positioned to execute and drive shareholder value at this time.
At this time.
Gunbroker.com.
Uh huh.
Growth in our gunbroker.com marketplace continues at double-digit rate.
We continue to work diligently to meet the [growing] demand for all our products and service on this site.
Gross.
Man for all our products and service.
We are bringing new products to sell on gunbroker.com.
As well as improving the overall customer experience in 2022.
New facility.
As shareholders know, we are building, a new 160,000 square foot state of the art facility.
It is on time and currently expected to open in the summer of 2022.
And currently expected to open in the summer of 2022.
With capacity approaching 1 billion [inaudible] annually.
This will allow us to keep up with the strong demand.
We continue to see in the ammunition market.
With that, I will turn it over to Rob Goodmanson, our president.
Thank you, Fred and welcome everyone.
Pleasure to speak with you today.
We are proud of the incredible team that Fred has put together and grateful for everyone's ongoing efforts that have led to another strong quarterly sales and earnings growth.
The 289% increase in total revenues to a record $64.7 million continued to reflect broad-based growth across our business.
Gross margins improved to 34.8% in the third quarter compared to 20.1% a year ago.
Driven by this powerful dynamics of our marketplace platform.
We also delivered significant operating expense leverage reflecting the benefits of our growing scale.
However, we did have a slight decrease in margins versus last quarter.
Due primarily to the additional hiring in Manitowoc.
For many of these positions require three to six months of training. We felt it was prudent to get a jumpstart on the staffing prior to our facility opening.
As Fred mentioned, the underlying demand for ammunition remains very strong and we expect this continue this to continue well beyond 2022.
Moreover, Ammo has many unique products incorporating proprietary technologies that put us in an even stronger position to capitalize on industry tailwind and continue gaining market share.
Our marketplace business is the other key point of differentiation for Ammo.
It's driving our significant growth and profitability.
Let me share some details about this business to give you a better understanding of the results and significant long term potential.
We've shown that we're superior manufacturing and our sales growth and earnings prove that out.
With the new facility coming online this summer, we've turned our focus.
To gunbroker.com.
Having acquired the largest marketplace business in the industry.
It gives us the opportunity to grow and leverage this incredible business.
We are adding significant value added services to the platform such as credit cards loyalty programs for both buyers and sellers gift cards letters of credit to our $6.8 million registered users at the same time.
We were upgrading in our technology and the platform to give our customers a great experience that is seamless and easy to navigate.
Finally, here are some stats for gun broker for the third quarter.
We averaged 55,000 new users per month.
We had a 33.4% increase in the average number of auctions.
Our average take rate was 5.4%.
For the quarter versus 4.6, a year ago.
Our loyalty program increased 8.8% from the prior year.
Before turning the call over to Rob Wiley.
I wanted to add that we've come a long way in a relatively short period of time.
Building a solid foundation for driving profitability and focused growth.
We're proud of our accomplishments in the third quarter and remain well-positioned for significant growth in the future.
Our unique proprietary ammunition business continues benefiting from strong industry demand.
Coupled with our efforts to aggressively expand capacity.
Our marketplace business remains transformational factor.
That is in the very early innings, amplifying revenue growth and dramatically reshaping our profitability profile.
With that, I'd like to turn this over to our CFO, Rob Wiley. Rob.
Thank you, Rob, and welcome everyone. Let me walk you through our third quarter financials in more detail.
Total net revenues for our third fiscal quarter of 2022 were $64.7 million.
Up 289% from $16.6 million in the year earlier period.
Ammunition sales increased 243% to $44.1 million.
And our marketplace segment had revenue of $17.5 million versus nothing a year earlier.
Reflecting the acquisition gunbroker.com at the end of April 2021.
Gross profit of $22.5 million in the third quarter compared to $3.3 million in the year-earlier period reflected the significant growth in the total revenue.
We delivered another quarter of significant gross margin improvement due to the addition of marketplace revenue.
For the third-quarter, gross margin was 34.8% compared to 21% a year earlier.
As we prepare for our new facility and planned capacity increases coming online in the second quarter of our next fiscal year, we've added additional labor and overhead expenses in this reported quarter and in order to make for a swift transition.
This has contributed to a temporary compression.
In our ammunitions segment market from our previous quarter.
Which we expect to benefit from in our next fiscal year.
Third-quarter operating expenses totaled $11.9 million, up $3.8 million from a year ago.
The year over year increase in operating expenses was largely driven by the addition of gunbroker.com.
Including $3.3 million of incremental noncash depreciation and amortization.
As a percentage of net sales, operating expenses declined by 18.8% year over year to 18.4% in the third quarter of fiscal 2022 from 22.7% in the year-earlier period due to the mix of higher-margin marketplace revenues.
Plus operating efficiencies related to our increased scale.
Operating income was $10.6 million in the third quarter compared to an operating loss of .4 million in the year-earlier period.
As a percentage of net revenues, operating income was 16.4% compared to a negative 2.6% a year earlier.
A 731% increase.
Net income available to common shareholders for the third quarter of fiscal 2022 was $8.3 million or 7 cents per diluted share compared to a net loss of $1.9 million or 4 cents per diluted share in the third quarter of fiscal 2021.
Adjusted net income per diluted share was 14 cents.
Versus adjusted net income per share of 2 cents in the year earlier period.
Yeah.
Adjusted EBITDA was $20.1 million compared to adjusted EBITDA of $2.4 million a year earlier period.
Improvement in adjusted EBITDA was due to increased sales and improved gross margins, reflecting growth in the core ammunition segment plus the addition of our higher-margin marketplace segment.
Please note that adjusted EBITDA is a non-GAAP measure you should refer to the reconciliation of our GAAP to non-GAAP results in today's press release for additional details.
Our balance sheet remains strong with $27 million of cash and equivalents and essentially no outstanding debt.
100% of our production for 2022 has been sold until our new facility comes online in the summer of 2022, which will add significant capacity increases.
As Fred mentioned in his remarks, our board of directors recently authorized the purchase of up to $30 million of stock.
We are maintaining our fiscal 2022 guidance and continue to expect net revenues of approximately $250 million.
And adjusted EBITDA of at least $80 million for the year ending March 31st, 2022.
This concludes our prepared remarks, we're now ready to take questions.
So I will pass it back to our moderator. Thank you.
Thank you. At this time, we will be conducting a question and answer session.
A question and answer session.
If you wish to ask a question. Please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if he would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions.
Our first question is from Matthew Koranda of Roth Capital. Please proceed with your question.
[laughter].
Hey, guys, good afternoon.
Just wanted to start off with the guidance for fiscal '22, and just the implied guide for the fourth quarter. It seems like.
Guidance for fiscal 'twenty, two and just the implied guide for the fourth quarter it seems like.
Pretty confident that we can do the 80 million that would be required to kind of get to the 250 for the full year any help in terms of just breaking that out maybe in the fourth quarter.
Between the marketplace segment and the core Ammo business and just you know I was just kind of doing high-level math, but assuming gun broker kind of sustains at that.
The marketplace segment and the core of our business and just you know I I was just kind of doing high level math, but assuming gun broker kind of sustains at that.
$17 million run rate that it's been at.
I guess the core Ammo segment is going to take a pretty big step up.
In terms of revenue production in the fourth quarter. So is that the right way to think about how the fourth quarter trends? And then maybe if you could just put a finer point on what you mean when you say sold out for the rest of the year and they have segment sort of what that means in terms of the capacity to produce and where are you in terms of utilization that'd be great.
Hey, Matt. This is Rob Wiley. We thank you for the question.
I think your thought process about our guidance heading into our final fiscal quarter of this year is spot on. We really look at the breakdown between our ammunition segment in our marketplace segment. I'm kind of around day.
Mid to high seventies split for the ammunition segment and a low to mid 20s split for the marketplace segment.
Okay.
Okay, Great and then just on capacity.
Any help on that front, it felt like Q3 kind of.
Help on that front, just in and it felt like Q3.
It kind of.
Maybe we were a bit capacity-constrained within the quarter. So just maybe help us understand sort of the sort of equipment installation labor that's in place to kind of take that step up in terms of production in the fourth quarter here for the core ammo segment.
Yes, we will continue to add capacity heading into the end of this year and in two until we move into our new facility.
But the bulk of the cat capacity increase that you'll see later on down the road as when we do move on to the new facility and able to bring out even more equipment online to
Increase our production capacity.
Okay and then. You guys didn't share backlog, but you said sold out for the rest of the year. Could you maybe just clarify if you could sort of what that means in terms of you know where are we in terms of our capacity to produce for the fourth quarter?
You guys didn't share backlog, but you said sold out for the rest of the year could you maybe just clarify if you could sort of what what that means in terms of you know where are we in terms of our capacity to produce for the fourth quarter.
And then how far.
I assume you mean sold out for the rest of this fiscal year, but maybe if you could just kind of touch on that as well it would be super helpful.
The fiscal year.
We're sold out for the fiscal year.
Yeah.
Okay, perfect.
[inaudible]
Is that you know.
As we mentioned, our backlog is sold out for the remainder of the fiscal year. So we're trying to give confidence in the guidance that we set
in our ability to meet it.
Got it. Okay, fair enough and then just two quick other ones from me. So on the gross margin side, if I sort of.
strip out GunBroker.
Which is a relatively high margin business, just trying to get at sort of what we saw in the core ammo segment in terms of gross margins. I know you guys alluded to sort of wanting to be ready to produce and that's how [inaudible] when that opens up so you're willing to incur a little bit of extra labor in the near term.
To sort of make sure that that ran smoothly, but anyway you could just kind of help us understand the movement in gross margin on a quarter over quarter basis? Was it all just the labor the incremental labor that you hired?
Any other kind of puts and takes you can provide around sort of the movements and maybe raw costs and other elements that.
Drove gross margin in the third quarter relative to the second.
Yeah, I think the biggest change in our margin comparing.
Quarter over quarter is really the investment that we're making currently into our future by hiring additional employees currently adding additional overhead expenses as well. And this is something that you are saying you know our margin has compressed a little bit from the prior quarter, but something that we fully expect to benefit from heading into our next fiscal year as soon as our new facility opens up.
Really the investment that we're making currently into our future by hiring additional employees currently adding additional overhead expenses as well and this is something that you are saying you know our margin has compressed a little bit from the prior quarter, but something that we fully expect to benefit from heading into our next fiscal year as soon as our new facility opens up.
Okay. Great and then just last one on the marketplace business I mean take rate looks phenomenally good. Just curious if you could maybe speak to GMB at gun broker and sort of the trends you're seeing there. It sounds like volumes are up quite a bit on a year over year basis.
Take rate's up nicely on a year over year basis.
And anything you can say on the [AOVs] or other elements to.
The gun broker business.
It would help us kind of get a little bit more clarity on that.
I think if you look our revenues were 17.6, You're correct, were up just under 20% on our auction fees.
17.6, Youre correct were up just under 20% on our auction fees.
If you look at the number of auctions that increased by over 33%.
Loyalty program was up and we're still pulling in 55,000 new users on a monthly basis.
Would we anticipate the GMP to increase?
Yes. And with the other additional things that are just coming online.
And what's the other additional things that are just coming online.
I think we can maintain and continue to grow this at a fairly healthy pace.
Maintain and continue to grow this at a fairly healthy pace.
Yeah.
Excellent. I'll turn it over to others here. Thanks for all the clarity guys. I appreciate it.
Thank you, Matt.
Our next question is from Mark Smith of Lake Street capital markets.
Please proceed with your question.
Good afternoon, guys. A couple from me first high level you know, we've got a couple of quarters of gun broker behind us now. Talk about kind of you know where that business is relative to your expectations and maybe where you are in rollout of new initiatives within gun broker and what else there is still to do.
We still have a little bit to do with gun broker, we have been rolling out the different programs for credit cards, the financials, the loyalty.
Adding additional products onto the program.
It's just taken me a little bit longer than we anticipated because of the system changes that we need to do.
Which just have to get done to make that streamline and more beneficial.
And that is coming on.
That area of our business market's growing up nicely.
We've got great people in place and they're making very good headway, we've only been doing it really about a month and a half.
You know we've already put aside the capital that we said we would put toward that venture.
Not all of it's used at once obviously.
But a number of products are moving through.
There's a few more additional pieces, which will be coming online shortly which should just help that also increased dramatically.
Perfect and if we look through just another question on the gross profit margin within kind of the ammo and [caseing] sales business. Can you walk through what you're seeing on the commodity and input costs, you know any headwinds that you're seeing it and maybe any update on supply chain costs as well?
I don't really think there's been any significant change as far as cost goes in our materials, but I think we say this you know pretty much in every call you know I know, we said it last earnings call that we continue to.
Push on any increases to our customers, so but staying relatively stable overall.
Okay. Perfect and then you know maybe just on pricing as we look at ammunition.
Perfect and then you know maybe just on pricing as we look at ammunition.
You know you just said, you're able to take pricing to kind of pass through you know, do you feel like you're still in a pretty good position on taking incremental price? Or you know over the last year plus of price increases do you feel like you're getting closer to a ceiling?
Well, every time you think you're getting closer to a ceiling, we always seem to have.
Just to raise their prices again, which they just did I believe today.
Hmm.
And then we're going to continue to pass it on. There's a few skus that you know have come backward a little bit, still trading at a relative high but not a ridiculous amount like the nine mill two three.
The commodity type [ground].
We answered that.
By retooling, our machines going more to the higher profitability round.
Higher profitability round.
That's really not in that people are making today, so it'll allow us to gain more shelf space as well. So that's part of our plan.
Excellent. Thank you, guys.
Our next question is from Eddie Riley of EF Hutton.
Please proceed with your question.
Hey, guys. It looks like you really begun to hit your stride here, maybe if you could talk about the industry landscape a little bit.
Sure.
Are you seeing any meaningful expansion on the industry-wide capacity at all from your competitors?
I think here, you'll see that the capacity is still not caught up to the demand.
As it has not slowed for sure.
We're not seeing that with the addition of all the new shooters over the last number of years.
We're still the razor blade.
The razor blade.
We're not, I know you probably saw a report from Smith and Wesson that they were.
Their inventories were up.
But we are not in the gun business, where in the ammunition business.
And we're just not seeing the slowing yet.
And.
Yes.
From the time the new Manitowoc absolutely [hit the ground running].
The new Manitowoc absolutely.
[inaudible] the timeline of how quickly you guys can ramp up production at that facility.
How quickly you guys can ramp up production facility.
Well, I think the ramp will not be as long as people will anticipate because we will start moving machines in.
Possibly won't be hooked up exactly.
Right away and that new building is about two blocks from the previous building.
Very short. And we anticipate we've got two other warehouses.
And we anticipate we've got two other warehouses.
Any that have are holding machines that we have no space for. So those can go in right away, we're not losing production and so as we removed some of the stuff over, will start producing there and keep producing in our existing facility until everything is over. And by that time.
We should be running at a significantly higher rate.
And on another note, I don't think anybody understands what we've gone through to make the numbers that we just posted.
We're a company right now that's running three different buildings.
Travelling 10 miles from one building to the other.
We've got two shipping [docks].
Versus eight when we get into our new building.
We've got trucks lined up to receive merchandise, we got trucks waiting to take merchandise out. So our people have done one hell of a job in accomplishing this goal under the circumstances. We now work under so I mean, if you went to our planned now there's it's people standing on top of people making product.
We've got trucks lined up to receive merchandise, we got trucks waiting to take merchandise out. So our people have done one hell of a job in accomplishing this goal under the circumstances. We now work under so I mean, if you went to our planned now there's it's people standing on top of people making product.
People, making product so it's.
We can't wait to get in this new building.
We've got machinery and the equipment. It is going to cut costs.
We got automation equipment that we built that will cut costs.
And we've got space, space that we don't have today.
And throw on top of that are we this quarter, we had 14 people in our Scottsdale office out with COVID, we got people in.
Manitowoc with COVID.
You go to hire 100 people, you better take 300 or 400 applications to get 100. So it's you know our HR Department has done a hell of a job.
So I give our people a lot of credit for doing what they've done under the circumstances we worked under this quarter.
Hum.
Really appreciate the color there.
Just as we head into summer of 2022 what type of utilization rates should we expect on automated facility?
I guess, maybe in the first quarter or two.
I think that's gonna be kind of something that we look to gearing up to and we'll have a better idea of the closer we get there and as far as when as far as mapping out the move in.
Kind of something that we look to gearing up too and we'll have a better idea of the closer we get there and as far as when as far as mapping out the move in.
The strategy in place of how we move the pieces of equipment and when we move it to maximize our capacity so and that's something that we're currently working on to this day.
Okay, great. Thanks, guys. That's all for me.
Okay.
Our next question is from Andy Johnson of Royal Capital.
Please proceed with your question.
Last quarter I think Fred indicated in the new facility with already got purchased already purchased equipment you could save up a penny a bullet on streak ammunition that I wanted to try to get some additional color on that like how much of the ammunition that's produced now is streak ammunition.
Is that likely to go up percentage wise? And in the new facility.
Percentage wise and in the new facility.
Final question is.
[inaudible]
Yes.
Go ahead, finish your question. I said finally, what appetite do you see the military having for streak ammunition? And if you do when you do get a military contract, do you give a military contracts priority? Thank you.
Okay. As far as the equipment I spoke to you before which was an [enabling] machine that will save us a penny to a penny and a half depending on the caliber.
On our brass casings, and we won't have to send the product out to have it [nailed.]
That equipment, we've owned it now for about a year and a half it's been sitting in a warehouse for a year and a half.
And we have no space to put it up until we get in our new building. So it probably will not be.
Say August, September before that equipment is up and running.
The account for that savings.
As far as the military goes.
As far.
As far as the military goes, John Flynn has been working for probably three years on the project.
And I.
I just heard an update today, so from Mark Hanish as co-partner in this project.
I just heard an update today, so from Mark Hanish as co-partner in this project.
So John, you want to give them some flavor on that?
Sure. Thanks, Fred. Yes, we have from a capacity.
And capability standpoint, the plan all along has been able to service companion service the commercial needs, while tooling up with the wind machinery required to support the military.
Programs that we're working under. We have two contracts in place right now on the developmental side that are going well and we have the capacity to satisfy those contracts now and in the future.
With the Capex that we expended over the past couple of years to make sure we were prepared to perform.
Yeah.
Andy, are you still there?
Yes, I guess my last part of the question was what percentage of the ammunition that is manufactured is streak ammunition? And again do you anticipate that staying the same or going up?
Part of the question was what percentage of the ammunition that is manufactured is streak ammunition and again do you anticipate that staying the same or going up.
Yeah.
We anticipate it going up and it's probably about 30% right now.
30% right now.
Thank you. And we've just put some new systems in place that will increase the production.
Yes, our streak production this fiscal year hasn't been the same percentage overall.
Out of our total sales as it has been in prior years and this is due to us moving our streak line
from Payson, Arizona to Manitowoc, Wisconsin. During this time as well we also improved the manufacturing process of our streak production and have actually increased the capacity through that as well so increases coming to that production.
That product line in the future.
Thank you, gentlemen.
Yeah.
Yeah.
Our next question is from Brandon [Veilleux] of Metro.
Please proceed with your question.
Okay.
Hey, guys. It's Macro Ops, not Metro, but great quarter.
Macro ops, not metro, but a great great great quarter.
Again, just wanted to get some thoughts on the share buyback program.
I think it was important for shareholders to kind of see that especially.
As the stock's down 16% or so this year. So it seems like an opportune time to kind of do something like that. I wanted to get insight into how you thought about that share repurchase program because.
With the business, that's growing whether it's your core ammunition business, whether it's the marketplace business. There's a lot of areas that you could probably allocate capital to generate high returns and so to me seem that your segmented $30 million to a share buyback.
Kind of comes as a realization that you guys think the shares are pretty undervalued. So walk us through if you can the internal dialogue on okay. How much do we do in the buyback? Do we do the buyback versus reinvesting the business? Just to kind of get a sense of how you guys think about capital allocation.
Realization that you guys think the shares are pretty undervalued. So walk us through if you can the internal dialogue on okay. How much do we do in the buyback you would do the buyback versus reinvesting the business just to kind of get a sense of how you guys think about capital allocation.
Okay.
Well, it's sort of a discussion that we've had. I think you're spot on that the stock is undervalued and should be purchased at this point you know we have a very strong balance sheet.
The discussions that we've had I think you're spot on that the stock is undervalued and should be purchased at this point you know we have a very strong balance sheet.
Which is not, which will not stop us from increasing.
Additional products machinery, you know, what's the ammunition or putting in the changes we're putting in.
For the gunbroker.com division.
But when it's down like this.
I think it was the best move for the shareholders.
I think it's one of the best move for us.
Got it and then just another comment kind of in the same vein.
The last last few years, you guys have issued a lot of stocking.
Most of this is kind of a justifiable, whether it's you know to.
Using this currency to kind of fund your growth and then you know the buy gunbroker.com again, that's pretty accretive acquisition. How do you then think about share issuance?
Find your growth and then you know the bygone broker dot com again, that's pretty accretive acquisition. How do you then think about share issuance.
Over the next three to five years I mean, given your balance sheet and the fact that you guys are now not only on an adjusted basis profitable, but on a GAAP net income base profitable.
Net income base profitable.
Doesn't seem like there should be a reason to issue more shares. So is it reasonable to assume that we shouldn't necessarily see any more dilution going forward barring any sort of
special one-off acquisition, where it maybe would make sense to kind of pay for some of that in stock.
You know at this point, we have no plans to issue any more stock. That doesn't mean it couldn't happen for let's say another acquisition.
You know gun broker like type.
But this is one of the also one of the reasons why we do the share buyback.
To get fewer shares out there, make the value there and we think will make you know what that was a solid decision to make just because of where it was trading on what we think the actual value of the shares are.
Solid decision to make just because of where it was trading on what we think the actual value of the shares are.
Got it and then I've got one more for Fred and Rob Wiley.
A lot has gone right for your guys business the growth is pretty incredible, but what I want to know what it's for both Fred and Rob what are some things that kind of keeps you guys up at night about the business? Might be things that are improving.
For both front end and Rob what are some things that kind of keeps you guys up at night about the business might be things that are.
But not at the rate that you want or just maybe competitive dynamic pressures that you guys are kind of trying to battle. So I know that there's so much that is going right, but what are some things that do keep you up at night if anything.
People. Number one.
Number one.
Getting people to come to work every day.
And number two would be since I'm 80 years old I guess it keeps me up is stock price.
I'd like to see it higher.
You know I learned a long time would go it's just a matter of keeping blinders on and focusing on your business.
Keep making money and keep making earnings and don't do anything stupid.
And make.
And make accretive acquisitions, if we were gonna make one and eventually the stock price will be what it should be.
That was very well said. I don't know if I have much to add to that. My response would be very similar.
So I'll leave it at that.
Okay.
There's got to be something, Rob, come on, there's got to be.
There's got to be something different than Fred.
[inaudible]
I mean people yeah people with a tough problem, but you know we've done a really good job. We have a great team here and the Scottsdale office and also in Manitowoc, Wisconsin.
So people is always a tough problem, it's a problem with any company, but I think we've done a really good job of Manning managing it and we have a great team.
Here with us at Ammo Inc. But I think one more thing is.
John just happens to be in here, but John and Mark have worked very hard on these two military orders are working on.
And as you know. Probably know, it's not easy dealing with the United States government. So nothing comes fast and nothing comes easy and you know I've got signs all over this building that.
Probably no it's not easy dealing with the United States government. So nothing comes fast and nothing comes easy and you know I've got signs all over this building that.
People don't really think I have much patience. For me.
I think I have much patience.
For me.
What keeps me up at night is I have no patience. So I wanted to do things faster than what are probably.
Our plant manager in Manitowoc wants to do them.
And people working on military I want to do them.
You know, we got a great group of people. We meet every morning at 8 o'clock.
We focus on the numbers.
We focus on building this company and you know.
Building this company and you know.
You look at the chart gone from 2 million to 250 million is a big deal in five years.
Yep.
There's still a lot to do and I I think.
We are confident that we can build a 400 million 500 million dollar company.
Yeah.
Yes. No, I mean I was I remember when you guys were, I think it was retro vista or that shell business.
I remember when you guys were I think it was I think it was retro vista are or that that that that shell business.
That bought Ammo a few years ago.
And I've been here for a while and you know I hope you guys keep executing.
You know now that the prices are at attractive levels, it would be great to see some open market purchases from the company and also you know from some of the insiders. If you guys have.
The available discretionary income. So you know again, great quarter I'm going to log off and kind of go back in the listen mode, but keep up the good work, guys.
Thank you very much. Thank you very much.
Yeah.
We have reached the end of the question and answer session.
I will now turn the call back over to Fred Wagenhals for closing remarks.
Right.
I just want to thank all the shareholders that stuck with us.
Stuck with us.
And have watched us grow from $2 million to gone over $200 million right now.
Gone over $200 million right now so.
To stick in there with us and watch us grow to a half a billion-dollar company.
Yeah.
Yeah.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
Participation and have a great day.
Yeah.
Uh huh.
Yeah.
[music].