Q4 2022 Ammo Inc Earnings Call

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Greetings and welcome to the ao inkc fiscal fourth quarter 2022 earnings call. At this time, all participants are in a listen omim mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator systemance during the conference, please press AR zero on your telephone keypad.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, read anderscertain of IPR.

Thank you reed, you may begin.

Thank you, good afternoon and welcome to amolinks conference call to discuss results for the fourth quarter and full year fiscal 2022. on the call today from ammo link with prepared remarks: our Fred wagonhall's 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 in approximately 405 PM Eastern time. If you have not received, the release is available on the Investor Relations portion of amolink's website at W MO link T com.

Speaker 1: 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.

Speaker 1: These statements do not guarantee future performance and therefore undue reliance should not be placed upon them.

Speaker 1: These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the risk factors section of amoinks most recently filed forms 10 -k and 10 -qplease note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis.

Speaker 1: Management believes these financial measures can facilitate a more complete analysis and greater transparency into amyinks ongoing results of operations, particularly when comparing underlying operating results from period to period. We've included reconciliation of these non-GAAP measures with today's release.

Speaker 1: This call also contains time-sensitive information that is accurate only as of the date of this live broadcast: June twenty-nth 2020 -two.

amlink assumes 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 wagonh's, Chairman and Chief Executive Officer of ammoink.

Thank you read, and good afternoon to everyone on the call.

Fiscal 2022 was a banner year for amal, far exceeding even our highest expectations.

Revenue.

Which reached 240.3 million, were up an incredible 285% from fiscal 2021.

And we generated nearly 76 million in adjusted ebitdaand 53 cents in adjusted EPS for the year.

We did all of this with covert.

Gram working space, the move from pace and kamanda toa and the supply chain issues.

The acquisition.

An integration of gunbroker Dot Com marketplace platform.

As also proven to be transformational for the company's business model.

And we are only beginning to introduce several initiatives to further leverage profitability on the one point eight billion- that's billion with a B.

In transactional volume.

On the platform in the past year.

Over the past five years we have grown AMO from two million.

In revenue.

In 2018 to what we expect to be more than three million in revenues in the fiscal.

2023 in light of this spectacular growth, I would like to focus on why we remain confident that ammo remains well positioned to double its market share.

Over the past two.

The three years.

First we are at capacity in our current facility delivering four million rounds of loaded ammunation this past year. That has caused us to build our new 16 thousand squarefoot world-class facilities.

Where we expect to increase our capacity to one billion rounds once fully operation.

This gives us significant opportunity to increase revenue.

Drive down manufacturing cost and improved margins.

Next our marketplace platform, gunbroker com, was fully integrated in 2022 and we are now rolling out a number of initiatives to capture a significantly greater percentage of the transactional volume from that platform.

Including credit card processing.

Credit products.

Gift card and loyalty programs for both the buyer and the seller.

Finally ammo continues to make great progress in our military programs division.

Primarily with the support of our? U's spatial forces. We have entered into the last stage of our procurement path on our bmpr program and are continuing to move through the development of our signature on-target program.

We started ammo in 2017 with the goal of integrating technology into the ammunition industry.

Can buy all measures. We have succeed in doing so.

Judging by our financial performance.

Over the past fiscal year. However, we continue to believe and to operate.

As if we are still early in our growth curve.

There remains multiple opportunities to substantially grow revenue, enhance margins and drive shareholder value.

And we intend to continue to capitalize on those opportunities and look forward to updating our progress.

To shareholders at the.

Appropriate moment. With that, I'd like to turn the call over to our President, Rob goodmanson, to provide more detail on the operational performances for this quarter.

Thanks red, and thank you all for being on our annual earnings call.

This has indeed been an exciting year, both of enormous business opportunities and interesting challenges.

We would never have been able to execute upon these opportunities So effectively But for our stellar team Fred, and our entire management team put together.

Incredible successes fall squarely on their shoulders.

I would now like to announce our forecast for fiscal 2020 -three.

300 to 300 and ten million in revenues.

82 to 85 million in eda.

Speaker 2: And 108 to 111 million in adjusted EBITDA for fiscal 2020 -three.

Being successful in predicting the future.

Is best done by looking back at the past successes and the historic track record.

Growing from two million to 24 million in sales in five years speaks for itself.

I'd like to take a few moments now to expand upon Fred's comments and talk about certain company initiatives at ammel and atunbroker com.

Obviously we're anxious to get into our new managed walk Wisconsin manufacturing facility.

Slated to open in just over two weeks.

This facility is just around the corner from our current operating building and is approximately 300% larger than our main production.

In the new plants. We have planned to double our output capacity of loaded ammunition over time through the deployment of new equipment which is currently owned, expand our manufacturing automation and better leverage our production team in their newly consolidated buildings.

We are also adding cart capabilities for gunbroker com.

Speaker 2: Currently our seven point three million registered users could only purchase one item at a time.

Soon they will have the ability to purchase multiple accessor reads at one time, including ammunition.

gunbroker com, the largest outdoor website of its kind, which has been around for 22 years. We're making some additional enhancements in conjunction with our auction site.

We are adding new sellers to the platform that will nearre Amazon.

Which will drive gross in users and transaction volume.

Whether they be manufacturers dealers, distributors or refunction as their online storefront, which will only add to their distribution model.

This is a solid concept and is one way to monetize one of gunbroker com's greatest assets, that being data.

No other company in this space has the vast information in a timely manner. That's chose what is selling, where it's selling and at what price levels.

Making trend prediction more reliable and accountable.

Whether you be a store, manufacturer or distributor.

This will be significant for both the sellers and the buyers.

Obviously our goal with these initiatives is to enhance user experience.

Or the your buyer or seller.

Speaker 2: We're currently adding new products and product lines to the gunbroker website.

With north of seven point three million registered users and adding an average of approximately 55 thousand new users on a monthly basis this past year, we strongly believe we will be the preferred destination in the space.

Because of these initiatives with our two businesses.

We believe we can double our revenues in both companies over the next 12 to 24 months.

Again to reiterate our forecast.

Speaker 2: 300 to 300 and ten million at revenues, 82 to 85 million in EBITDA and 108 to 111 million in adjusted EBITDA.

Or fiscal 2020 three.

And that is a growth story that should be paid attention to.

In closing.

I'd like to add that, because of our successit hasn't allowed us to look at many unique opportunities and take advantage of them.

Such as our support of the Ukraine war effort.

By donating one million rounds of amidishition. We're also pleased that some of our competitors finally followed our lead.

With that, let me turn this over to Rob wiley, our CFO , Rob.

Thank you Rob, welcome everyone.

Speaker 3: Let me now review our financial results in more detail.

Speaker 3: Total net revenues for our fiscal 2020 year.

Speaker 3: Increased 285%, or 178.1 million, over the prior year.

Speaker 3: This increase was the result of our increased production capacity coupled with strong demand at our customers, resulting in 107.1 million of additional sales of bothulk pistol and rif fammunition, an increase of four point seven million in sales of proprietary ammunition, an increase of one point three million of sales from our Ching operations and 64.6 million in revenue generated from our marketplace gunbroker com.

Looking forward, we expect the sales growth rate of proprietary ammunition to greatly outpace the sales of our standard ammunition.

Our gross profit percentage increased to 37% from 18% during the year compared to the year period prior.

This is a result of the inclusion of our marketplace, gunbroker com, which by nature has significantly higher margins than our manufactured products.

We believe, as we continue to grow sales through new margins and expanded distribution, that our gross margins will also increase, as evidenced by the improvement over this time last year.

Our Goldman in the next 12 to 24 months is to continue to improve our go margins.

This will be accomplished through the following.

Increased product sales, specifically of our proprietary lines of ammunition, like the ICT visual ammunition stillalth, and now the ammunition we have developed in support of our military and government programs.

Introduction of new lines of ammunition that historically carry higher margins than consumer and government sectors.

Reduced component costs through streamlined operation of our ammunition segment and expansion of strategic relationships with component providers.

Expanded use of automation equipment that reduces the total labor required to assemble finished products.

Speaker 3: And better leverage of our fixed costs through expanded production to support the sales objectives.

Moving on to operating expenses.

Speaker 3: Our operating expenses increased by approximately 34.8 million over the prior year but, more importantly, decreased seven percentage of sales from 27% in fiscal 2021 totwenty-one 0%, a 25% decrease in the reported period.

The dollar increase was primarily related to approximately 20.6 million of additional operating expenses related to gunbroker com.

Speaker 3: Including 12.1 million out of 13.7 million noncash depreciation and amortization expenses for the year.

Total noncash operating expenses were approximately 20.1 million for the year, compared to three point two million in the prior year.

We expect to see operating expenses continue to decrease as a percentage of sales in the 2023 fiscal year, as we leverage our workforce and expand our sales opportunities.

Operating income was 42.5 million for the year, compared to an operating loss of five point four million in the year earlier.

Speaker 3: As a percent of net revenues. Operating income was 42%, compared to a negative 9% a year earlier, a 500 and eighty-sixnine percent increase.

As a result of increases in revenues from increased production, as well as our acquisition of gunbroker com, we had a net income of approximately 33.2 million for our fiscal 2020 two.

Or twenty-sevenvent cents per diluted share, compared with the net loss of approximately seven point eight million cent, S for 14 cents per diluted share in fiscal 2021.

Adjusted net income per diluted share was 53 cents, versus an adjusted net income per share of seven cents in the prior year period.

Adjusted EBITDA was 75.5 million, compared to adjusted EBITDA of eight point one million in the prior year period.

Speaker 3: The significant improvement in adjusted EBITDA was due to increased sales and improved gross margins, reflecting growth in our core ammunition segment, plross. The addition of our higher-margin marketplace segment.

Speaker 3: Please note that adjusted EBITDA is a non-GAAP measure and you should refer to the reconciliation of our GAAP to non-GAAP results in today's press release for additional details.

To reiterate our performance this past year. Our revenues went from 61 million to 24 million. We reported net income of 33.2 million, from a net loss of seven point eight million in the prior year period. Our balance sheet remained strong, with 23 million of cash and equivalents and essentially no outstanding debt.

Speaker 3: We are well positioned to make a source transition into our new facility in just a few weeks and we are guiding our 2023 fiscal year to revenues of 300 to 300 and ten million, EBITDA of 82 to 85 million and adjusted EBITDA of 108 million to one hundred and eleven million.

This concludes our prepared remarks.

Speaker 3: We are now ready to take questions, So I'll pass it back to our moderator. Thank you.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask your question, ple press star one on your telephone. Keep ad. The confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue for participants. Us speaker equipment and may be ne necessstart to pickup your handset before pressing missararchkeysone moment Please, while we pull for questions.

Thank you. Our first question is from Matt Kanda, with rossalth capital. Please proceed your question.

You guys good afternoon. Thanks for taking the questions.

Speaker 3: Just want to start off with the fiscal' 23 guide on revenue. Maybe you think could just comment on sort of the expectations of the split between gtenbroker versus the core ammunition business and sort of the growth rates between the two the the year.

Then thanks for the question. So I would expect a or majority of the growth rates come from our loadred ammunition operations. We obviously do expect growth in our gunbroker.

Speaker 3: Segment as well, but majority of the increase will come from the loader dammunition and our increased capacity coming into our new, coming from our new facility.

Okay got you and then just on the MA business segment, because you maybe just talk about the visibility you have into the year in the past, then ning you go a chir some backlog figures So maybe you get share any backlog figures that can be a comfidence on sort of the numbers that you'll do this year. And then a lot of folks in the industry have sort of talked about and demand selling a bit but maybe it seems like you go, do you have opportun to take some share and theressomechannel ill opportunities. Maybe you get just speak to sort of where you see the majority of the growth coming from in the amma business this year.

mattthis is Rob good monson and we see the growth of Rob wiley said coming out of the ammunition side. We would be looking at the number of around two hundred and thirty.

This is Rob good monson. We see the growth of Rob wiley said, coming out of the ammunition side. We would be looking at the number around two hundred and thirty.

From that sideand I think you'd probably see- well, I know our backlog, or backlog, is 100% sold.

That doesn't that of our current capacity.

Okay So just to clarify: 100% sold within the current capacity. Could you maybe just quantify that a bit more for me? So current capacity, I guess, is in flucks a a little bit because you havethe the manoar facility ramping and I assume we're. That number may change a bit. But does that mean 23 million in the backlog or does that mean sort of we have a little less than that, just given the capacity delivers alittlebit lower than that at the moment.

No that would be. That would be the backlog. But you pretty much answered to your own question. There's a little bit of a sliding scale on the move. We anticipate and hope for everything smooth, that all the machines work and the capacity increases on a rapid basis. In that case that backlog number would be a little bit too lightate.

Okay and then any, any revenue in the ammo segment that is, factored him from the military opportunities that you guys have highlight.ed, obviously a lot of stuff sort of deeper in the funnel in that space, especially with sot. I'm curious, have you guys factored any of that into the guide, that 23 million that you mentioned there aroundb or that sort of icing on the cake, if you will, for the year?

That would be icing on the cake. We're not factoring that in.

On the ballistic match. You'd see very late in the inning.

The signature on target. We're moving rapidly through the system.

okthatyou. And then maybe I'm curious, since this is a bit of a unique situation where you guys a reporting Q4 toward the end of your first quarter, I'm curious if you could just speak to maybe some of the trends over the last quarter and maybe separately between gunbroker and the mmo segment, just so we can sort of directionally model the year and the ramp up that you've got going in the mmo segment. I assume gunbrokers been relatively studied but maybe just correct me from wrong there and maybe any trends they've seen in the recent month with some of the headlines in the news for gunbroker then on the mmo seside of the business, just curious about sort of how the ramp transpires.

So but still expect to maintain current levels of production until we're up up into that point.

Okay So just to put a finer point on that, I guess in the fourth quarter the looks like the MO business you did about 52 million and revenue. So maybe pulling that run rate forward in the first half of fiscal' 23 would be the safer bet. And then assuming there's a bit more of a kicker in the third and fourth quarter in terms of revenue from the M outside of the business.

Okay So just to put a finer point on that, I guess in the fourth quarter the looks like the mmo business you did about 52 million and revenue. So maybe pulling on that run rate forward in the first half of fiscal 23 would be the safer bet. And then, assuming there's a bit more about a kicker in the third and fourth quarter in terms of revenue from the AMO side of the business, I think that's the right way to think about it.

Okay got it. And then just I wanted to to make sure I understood what you said in terms of the ramp up and capacity of minitoac. So I think about in the release you guys talked about a billion in incremental rounds. I guess my assumption was that the facility was probably going to add more, like you, half a billion rounds in the near term. So maybe just speak to sort of how much capacity are we adding this fiscal year for 23, and then over time, if we get to the billion, how soon do we get there maybe, just so I can kind of understand it. So folks going to kind of help, So you know, folks model this out for the next year or two.

But I think the way to think of it is, once or fully installed them in the new facility, day 1, that our capacity would essentially double and our goal is to get at a run rate of a billion rounds of the year by the end of this fiscal year. So that helps, will pay that a little bit more color to it.

Okay So total of a billion, not incremental billion. Is that fair to say?

Yes that's correct.

Okay I got it and then just last one me. I'll turn itover and sorry for all the long way in this here but there's lot to getthrough the margin ramp as we look at production in the mountto facility and starting in July , maybe just help folks understand sort of.

How should we level set on am themunition gross margins? How is that factored into the full year adjusted EBITDA guide that you gave? Is it more of a tail to have, for the first half is quite a bit lower and then back half kind of ramps up to backfill. Or should we be sort of level setting on the margins for the full year?

No I think it added: absolutely right. So expect to maintain for first quarter and most of the second quarter, But as soon as we're the additional capacity comes online, we're expect tobenefsee the benefit of that in the third and fourth quarters of this fiscal year.

That just a new TM over ING.

Put puts yes, absolutely. I mean all the vertical and integration activities we have coming on line in addition to the production capacity increases. So we're very excited about moving into new facility and to see what we can do are coming out of that.

Thanks good.

thankkes that.

Thank you. Our next question is from Mark Smith, with Lake Street capital markets.

Speaker 4: Our next question is from marksmith with Lake Street capital markets. Please preceed your question.

I wanted to dig in real quick on just kind of cadence of sales as we think about this next fiscal year is safe to assume that September quarter would likely be the lowest. Just as you transition equipment from the existing facility into the new facility that will see some slowdown in business in September quarter and then June quarterly be in the next highest and then more of that ramp in sales in second half of the year. Thinking specifically about loaded ammunition.

I feel confident that our second quarter will be as good as our first quarter. We just end.

Confident that our second quarter will be as good as our first quarter. We just end.

Perfect and then I wanted to dig into just gross profit margin a little bit. Certainly a bit lower here than we've seen in the other quarters of this year. Can you talk about cost pressures that you're seen especially as we think about components primers projectiles, even raw material costs? Talk about anywhere where you're seeing pressure thereyes, I think the prbab profile relatively similwhere to what it has been in the past and I think on our last call we had mentioned that really gearing up for the new manufacturing facilities So that we can make a sort of trans.

preson margin.

I would say a labor more than anything.

Care increased labor substantially for our move into our new building to train people.

And.

It just took a lot more work than we thought getting people trained.

More work than we thoughtght. Getting people trained, hiring quality people.

Okay perfect, and then this might be a broad base, but just walk me through, kind of what gives you confidence in.

Speaker 3: Your guidance that you gave for the full year and, as we think about top line given, sounds like backlog still strong but what you're seeing in demand that kind of gives you confidence in that top line number- and this is gun broker as well as ammo side- and then the bottom line, just given inflationary pressures that we're seeing today, what gives you the confidence and being able to hit the guidance numbers that you gave for this next year.

Sure let me figure, crack that the inflation pressure. It's really always passed on anyway. We've gone through that for the last number of years, So that's not and that would just continue has.

Every company in our space.

Why do we think it will continue? I think two of the biggest reasons.

A we still are in the midst of a lot of civil unrest.

We have the sanctions of Russia, which is 20% to 25% of the ammunition sold in the U? S.

andnow we have the? U's government.

Basically telling Lake City they cannot sell into the commercial market.

Filling Lake City. They cannot sell into the commercial market. These are all.

Can be beneficial to this space.

And we really are the only ones who are adding any kind of compassion.

That where we can, and more than double out production.

So do we feel good and confident that the winss are still at our back? A yourort answer is yes.

Perfect Thank you guys.

Capital Thank me, thanks Mark.

Thank you. Our next question is from Edward reley, with eef hun. Please proceed with your question.

Makes for taking my questionwe're seeing a bit of a increased level ammunition in stock at retail stores was wondering from you, an industry level, if could you comment on pricing overall and maybe your ability to pivobit towards ammunition that it still is unmet demand if there are any touch ammunition.

Yes So I think we're still see all-time lives in levels of sales prices, at least from manufacturers side. We're always- our sales teamments and production team are conscious of the markets and think that have a close poll on what's going on and what been mix.

Big scme maybe. So it's something that you know, we're tuned to and are looking that daily to make, to see if we didn't make adjustments to what we're currently manufacturing and now we can deliver proctcess our consumers want.

Okay got it. And on the gunbroker sidecould you just some impack a little bit for us the initiatives you're undertaking to maybe increase the sellers and buyers on the platform?

Yes there's a number of different initiatives that we're doing. fredit mentioned the financial suite of products.

Speaker 2: Whether with a credit cards or it took programs.

These types of things will significantly ease- for the sellers and the buyers' increasing transactions.

On top of thatadding some different services. The card service where?

Like I had mentioned in my talk, they can purchase one item at a time. When the cart is completed, which should be soon, they can do multiple purchases.

Multiple purchases. So hypothetically, by a gun, you need the cleaner, do you need them here? Do you need the eyes?

And there are significant margins in the accessories on top of.

But that will be the highest margin business.

Still making the end users, both sellers and buyers.

The end users, both sellers and buyers, more.

Give it more eachat and more credibility. This is what's going to drive the existing base and new people coming to the market.

Now as these things get rolled out. It's not a light switch. Unfortunately, there's a lot of technology that goes behind us.

But we will not and we've been spending that a fair amount of money on these enhancements to get everything done to right.

When they are done right and when it is perfect, these will be rolled out, So it will be seamless for the end users.

Got youno the question on that. Just how are you making potential sellers that aren't on the website aware of these types of initiatives?

Some of the some of the initiatives aren't out there yet because they're not ready to roll out. They are, let's say, with the storefronts and the manufacturers. I mean, we are working with them and we are signing up new sellers for those was types of things.

What they're interested in and what they really need is one of the things that they've never to get their hands on before, which was the data.

Manufacturer needs to know what the hot products are. Where are they being sold? Where are the price is good, where they getting weak? Same for the dealers, same for the distributors.

And from a buyer standpoint, they're usually looking at: what are the price, where are the? And these, these things are how we are going to monetizing our take rate.

Our take rate which, if you notice in our document 1, from 5% to five point 1, these types of enhancement will bring that take rade up to, let's say conservatively, about a eight point a half percent.

Got you. Thanks for that last question for me, given the facilities, nearly online.

How should we maybe be thinking about CapEx going forward?

Thanks to the question. You know, as far as capital expenditures in relation to the new facility and the production that's coming online with that, most of the- the capital expenditures, virtually all to this point, has been expended today. So, looking forward, you know, less we go through and had significant and more capacity from this point, all of the costs have been encouraged to the from this point. So we RE really just are looking forward to the benefit that we that comes from that and you know, as I mentioned before, very excited to move into the new facility.

Okay Thank youthank you. Our next question is from Rob joose with Invesco. Please pursued your question.

I think I'm a little bit new to your story, but wanted to ask a cash flow. Do you have just the general sense, the next year with this outlook?

That you would be able a good generator.

Meaningful set of cash flow going forward, or to be speaking about uses of that cash flow.

Thank you for the question. This is robwellley yes absolutely. We do expect our cash flow at least in come cash flow to increase quite significantly. Thank you saw on the 10 -k that we just reported we have positive cash flow from operations. A lot of the cash outflows this year were in relation to our gunbroker. The addition of gunbroker com and we also had significant C outflow just due to our growth. But as we continue to grow we will be stick spending cash but we do expect to see that cash flow increase moving forward. Also we're looking at working towards and including a.

Credit facility, assetp credit facility- So that to free up some of our cash that is tied up in our working capital to aid us in our growth.

Yes that's one of the questions. So is there at the moment is you? Seem like your inventori ES went up quite a bit. Is there any unwind in that in the next year, or is that? Is that at levels that you would expect to be?

Yeah that was one of the questions. So is there at the moment? Is you? Seem like your inventories went to quite a bit. Is there any unwind in that in the next year, or or is that, is that at level that you would expect to be, or characterized as, kind of normal?

Yes I think a big reason for the growth in our inventory is just due to the our increase in our sales. So as our sales continue to increase, I would expect our inventory levels continue to grow. And just aasside note about our inventory: most of the inventory that we have on hand, virtually all of it- is either raw materials or a work process. So and we're not holding a lot of finished goods on hand today and want to little side note on the increase of the inventoryisthe inventory is also sold. The issue we have.

Is not supply chain. The issue we have had up until this point is shipping. We currently have one dock for shipping. Can receiving.

We're moving into facility and just over two weeks that has twelve.

It makes it a little bit easier. So weak: ness cannot get some of the stuff off the doc in time.

Had we had multiple doors, a larger facility- you wouldn't have had the asthat question.

I just got back from our new facility.

This morning andso almost impossible to even walk in that building is cramped as it is and.

I'm just amazed that we've done what we've done this last quarter.

To get product out the door.

That's really helpful. Appreciate that. Well, that kind of dovetails into my other question, which is when you you think about being at run rate at the new facility.

Do you have a target margin that you're shooting for? Have talked about that.

Yes on our loaded ammunition product. I think we've always had the goal of maintaining margin a higher than 30%. So I think until we get there, work going to do all we can to make that up.

Sound's very, veryapprecisure that ics.

Appreciate that, ics.

Thank you. Our next question is from JD abuchar with glass Creek partners. Please procee with your question.

Hey guys, Congratulations on a on a great year. I question I had on the commerce side with the just the sheer size of gunbroker- I think last time I looked at on online statistics was like 16 million unique users and ranked twice as high as basspro in terms of, you know, website rank. The industry is shifting to direct to consumer, So it's giving all brands, you know, balancing act between not wanting to tick off their traditional channel but obviously wanting to take advantage of online. With the sheer volume going through gunbroker, what are some of the opportunities?

To capitalize obviously on the increased take rate, but also both farm and nonfirearm sales, and really just build that platform up, and that's one of the things that we mentioned.

liiseyou know, obviously on the increased take rate, but also both FM and non firearm sales, and really just build that platform up. And that's one of the things that we mentioned, and you know, in the call.

Thanks JV. This is robbed by the way we have. Obviously we're adding the cart, putting that together with the financial products.

Really how to attract more.

Buyers and sellers is really throughadding more of the Amazon like storefronts, dealers.

I mean. The key here is: all these people need distribution of their product.

Here is all. These people need distribution of their product and they do want to get it out.

And sometimes they some don't have. All they have is brickge and more. They need different things.

Speaker 2: And you- just you- can look at a number of different marketplaces out there that are very successful because they do this.

We happen to be unique in our marketplace.

And because of that and with the seven million plus users and the new users joining.

I meanthese users are shy sellers and buyers, So this is how we can monetize.

All the interesting information andsystems that we are currently putting in place to make gunbroker truly a.

yougrow and youyeah. Just a followup question on that. You know Fred's background is, as you know, premier marketer and you know in in drawing people in and what, what are you? It seems like right now you're not spending much at all in marketing or F? Se O. or you know there opportunities there to sort of drive at the appropriper time a branding initiative, drive more people to the website by strategically doing some marketing, or is? Is the strength of the website so strong that's really not necessary.

You'll see some marketing this year we're working on it right now but.

Up until now we focused on building this plant building our.

Buying equipment, and now it's time to really fire up the marketing.

Equipment and now it's time to really fire up the marketingopportunities correct.

And then list of the traffic in operun is increasing the technology and the availability and ease of access to give the users a better experience. It's all going to be tied into 1, but I think you'll see the marketing like fredt set beginning this year.

Terrific well thanks, guys. Keep up the great work.

Thanks guys. Keep up the great work. I knew.

Thank you. Our next question is from Andy Johnson, with Royal capital. Please proceed with your question.

Afternoon guys. With one day left in the current quarter, can you give a somewhat narrow range on what the revenue will be?

No.

okaycan you last last call? You said you were going to you authorize funds for purchasing shares. Can you make any comments whether you have done that or not?

We can make comment? We have not. We have taken our cash, and this year has been full of unique opportunities.

And we. There's something we look at on a daily basis.

To deploy that capital.

And because we deployed it high belief profit, profitably and correctly, you're seeing the results of that gas deployment.

When it is a better time to start acquiring the stock from the open market.

You will see it and that will be announced.

Got you how when you donate a million rounds of ammunition to Ukraine how does that how is that accounted for on.

How does? When you donate a million rounds of ammunition to Ukraine? How does that? How is that accounted for onemmo's books?

This is brob wley. Thank you for the question. Yes, that's an expense on our books that would show up in operating expenses.

And my assumption is that you had to.

Have or already did, jump through the government hoops just to be qualified to give it awayand, assuming that that's correct, and you've already mentioned that, I was unaware that your competitors have also made contributions. But with the with the United States, kick in the extra four billion. That way, do you expect to get paying orders from Ukraine? That wasn't the reason for the donationi don't was to.

The reasons of the exdonation wasn't because we knew that the administration would kick and forty.

Billion dollarsthree months later. It was what they needed at the time.

I understand, but now that they have kicked in $4 billion, do you expect to get orders from Ukraine?

Not it is possible to put. It wasn't an expectation.

And it hasn't happened yet.

And it hasn't happened yet. No, Don no.

Thank you.

Thank you.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Well I'd like to to thank you all for listening today. If you have any other questions, please feel free to reach out to us. If you'd like to talk offline, we'll be happy to take your call and again, Thank you for your time and your support.

Well I'd like to to thank you all for listening today. If you have any other quest, please feel free to reach out to us. If you'd like to talk off line, we'll be happy to take your call and again, Thank you for your time and your supportyesgood.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker 4: Conference you may disconnect your lines at this time. Thank you for your participation.

And.