Outdoor Holding Q3 2026 Outdoor Holding Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Outdoor Holding Earnings Call
Operator 1: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Outdoor Holding Company's fiscal Q3 2026 earnings call. At this time, all participants are in 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 your telephone keypad. To withdraw your question, please press star and 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 Michael Bakal of Darrow Associates, the company's investor relations firm. Please go ahead, sir.
Operator: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Outdoor Holding Company's fiscal Q3 2026 earnings call. At this time, all participants are in 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 your telephone keypad. To withdraw your question, please press star and 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 Michael Bacal of Darrow Associates, the company's investor relations firm. Please go ahead, sir.
Speaker #1: Ladies and for gentlemen , by . Good morning and welcome to the Outdoor Holding Company's fiscal third quarter thank you 2020 earnings call .
Speaker #1: time , all participants are in listen only mode . you need Should assistance , please signal a conference by specialist pressing the key , star followed by At this zero .
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.
Speaker #1: To withdraw your question, press star and then two. Please note that participants of this call are on audio. This conference call is being held over the internet and is also being recorded for broadcast and playback purposes.
Speaker #1: I would
Speaker #1: I would now like to turn the call over to Michael of Darrow Associates, the investor relations. Go ahead, sir. Good morning, and thank you.
Michael Bacal: Good morning, and thank you for participating in today's conference call. Joining me from Outdoor Holding Company's leadership team are Steven Urvan, Chairman and Chief Executive Officer, Paul Kasowski, Chief Financial Officer, and Jordan Christensen, Chief Legal Officer and Corporate Secretary. During this call, management will be making forward-looking statements, including statements that address Outdoor Holding Company'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 Outdoor Holding Company's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements in it.
Michael Bacal: Good morning, and thank you for participating in today's conference call. Joining me from Outdoor Holding Company's leadership team are Steven Urvan, Chairman and Chief Executive Officer, Paul Kasowski, Chief Financial Officer, and Jordan Christensen, Chief Legal Officer and Corporate Secretary. During this call, management will be making forward-looking statements, including statements that address Outdoor Holding Company'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 Outdoor Holding Company's most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today, and the company's press release that accompanies this call, particularly the cautionary statements in it.
Speaker #2: today's participating in call You for Joining me from Holding Company's leadership team are
Speaker #2: executive chief Paul Kasowski Steve
Speaker #2: . And Jordan
Speaker #2: legal officer and firm . corporate chief
Speaker #2: During this chairman and , management will be making forward looking statements , to Please including Officer . statements that address secretary . outdoor holding company's expectations for future performance or operational results .
Speaker #2: Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more on these, please see the Risk Factors described in Outdoor Company's most recent Holding, Ervin, and periodic reports on Form 10-K and Form 10-Q.
Speaker #2: The Form 8-K 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 Outdoor Holding Company believes can be useful in evaluating its performance.
Michael Bacal: Today's conference call includes non-GAAP financial measures that Outdoor Holding Company 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 a reconciliation of this non-GAAP financial measure to net income or loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release. The information discussed on this call is current as of today, February 9, 2026. Except as required by law, Outdoor Holding Company 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 Outdoor Holding Company's Chairman and Chief Executive Officer, Steven Urvan.
Michael Bacal: Today's conference call includes non-GAAP financial measures that Outdoor Holding Company 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 a reconciliation of this non-GAAP financial measure to net income or loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release. The information discussed on this call is current as of today, February 9, 2026. Except as required by law, Outdoor Holding Company 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 Outdoor Holding Company's Chairman and Chief Executive Officer, Steven Urvan.
Speaker #2: not additional consider performance isolation in
Speaker #2: Results are in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to the company's net income or loss, it's most directly comparable GAAP financial measure.
Speaker #2: Please see the reconciliation table located in the company's earnings press release . The information discussed on this call is current as of today .
Speaker #2: , February 9th , 2026 , except required by Outdoor law . Holding Company disclaims any obligation to publicly update revise any or Outdoor information to reflect events or circumstances that after this occur It call .
Speaker #2: It is now my pleasure to turn the call over to Outdoor Company's Chairman Executive Holding Officer, Steve Urvan, and Chief—good morning. Good morning, everyone.
Steven Urvan: Good morning, everyone. Thank you for joining us for our Q3 fiscal 2026 earnings call. We believe these communications help you better understand our progress in moving and improving the company's performance. We look forward to this quarterly dialogue, and we remain committed to transparent and thoughtful communication with investors. Turning to the quarterly results, fiscal Q3 2026 was a strong period, operationally and financially. I'm going to provide some initial thoughts, then we'll turn things over to Paul to discuss our financial performance. I will close things out with some thoughts on where we are headed. Net sales were $13.4 million, an increase of 7% or about $900,000, outperforming broader trends in a restrained consumer spending environment. Gross margin remained strong for the quarter at 87%.
Steven Urvan: Good morning, everyone. Thank you for joining us for our Q3 fiscal 2026 earnings call. We believe these communications help you better understand our progress in moving and improving the company's performance. We look forward to this quarterly dialogue, and we remain committed to transparent and thoughtful communication with investors. Turning to the quarterly results, fiscal Q3 2026 was a strong period, operationally and financially. I'm going to provide some initial thoughts, then we'll turn things over to Paul to discuss our financial performance. I will close things out with some thoughts on where we are headed. Net sales were $13.4 million, an increase of 7% or about $900,000, outperforming broader trends in a restrained consumer spending environment. Gross margin remained strong for the quarter at 87%.
Speaker #2: Thank you for joining us fiscal third 2026 earnings for our call quarter . We believe these help communications you better in improving the company's moving and performance look progress quarterly and we dialogue , remain committed this transparent and thoughtful communication with investors .
Speaker #2: understand quarterly Turning to the results , our to Q3 2026 was a period . Operational and . Operationally and financial I'm provide some initial financially , thoughts .
Speaker #2: Then we'll turn things over to Paul to discuss our strong financial performance. He'll close things with some outlook on where we are headed with sales.
Speaker #2: Gross merchandise value increased to nearly $216 million, and we experienced modest improvement in our take rate to 6.2% from last year's 6.17% in the previous period.
Speaker #2: Revenue was $13.4 million, with net income of 7%, or about $900,000, outperforming increasing trends and broader fiscal consumer spending. Environment gross margin remained strong for the quarter at 87%.
Steven Urvan: Gross Merchandise Value increased to nearly $216 million, and we experienced a modest improvement in our take rate to 6.2% from 6.17% in last year's period. We continue to execute our strategy to operate as a streamlined, pure-play e-commerce marketplace. In Q3, we continued to make significant progress reducing operating expenses, including depreciation and amortization. Operating expenses declined significantly year-over-year, down about $22 million, with our operating expenses being the largest component, with a reduction of approximately $21 million. A closer look at this expense reduction shows that a significant portion of this improvement reflects lower litigation-related costs. But importantly, recurring ordinary course corporate operating expenses declined by approximately $1.4 million, driven primarily by reductions in corporate headcount, legal spend, and facilities cost.
Steven Urvan: Gross Merchandise Value increased to nearly $216 million, and we experienced a modest improvement in our take rate to 6.2% from 6.17% in last year's period. We continue to execute our strategy to operate as a streamlined, pure-play e-commerce marketplace. In Q3, we continued to make significant progress reducing operating expenses, including depreciation and amortization. Operating expenses declined significantly year-over-year, down about $22 million, with our operating expenses being the largest component, with a reduction of approximately $21 million. A closer look at this expense reduction shows that a significant portion of this improvement reflects lower litigation-related costs. But importantly, recurring ordinary course corporate operating expenses declined by approximately $1.4 million, driven primarily by reductions in corporate headcount, legal spend, and facilities cost.
Speaker #2: We continue to execute our operations as a streamlined, pure play will marketplace. In the third quarter, we made significant progress, continuing to restrain our strategy to reduce operating expenses, excluding depreciation and amortization.
Speaker #2: Operating expenses declined significantly year over year, down about $22 million, with our operating expenses being the largest component, with a reduction of approximately $21 million.
Speaker #2: A closer look at this expense reduction shows that a portion of the improvement reflects lower litigation-related costs, but importantly, recurring significant ordinary course corporate operating expenses declined by $1.4 million, driven by reductions in headcount.
Steven Urvan: As I've said before, GunBroker.com can be operated effectively with a smaller, more streamlined organization by reducing redundancies and right-sizing our personnel to match the scope of our operations. Our actions over the past several quarters reflect that view. These cost reductions contributed to net income before discontinued operations in the quarter of $1.465 million, compared to a loss of $21.177 million in the same period last year. This translated to earnings per share of $0.01 for the quarter, versus a loss of $0.18 from continuing operations in 2025's third quarter. The significant cost improvement drove strong cash generation of over $4 million from operations during the quarter, even after restructuring costs, legal costs, dividends, and other costs, which Paul will discuss in more detail.
Steven Urvan: As I've said before, GunBroker.com can be operated effectively with a smaller, more streamlined organization by reducing redundancies and right-sizing our personnel to match the scope of our operations. Our actions over the past several quarters reflect that view. These cost reductions contributed to net income before discontinued operations in the quarter of $1.465 million, compared to a loss of $21.177 million in the same period last year. This translated to earnings per share of $0.01 for the quarter, versus a loss of $0.18 from continuing operations in 2025's third quarter. The significant cost improvement drove strong cash generation of over $4 million from operations during the quarter, even after restructuring costs, legal costs, dividends, and other costs, which Paul will discuss in more detail.
Speaker #2: Legal spend , and primarily by As I've said before , gunbroker.com can be effectively operated with a streamlined smaller , more organization by reducing redundancies and rightsizing our match personnel to the scope of our operations .
Speaker #2: Our the several past quarters reflect that view . actions over These corporate cost reductions contributed to income before operations discontinued quarter of in the facilities $1,465,000 , to a costs .
Speaker #2: of $21,177,000 in period last This translated to year . earnings per share of one penny for the quarter , versus a loss $0.18 from continuing operations in 2025 .
Speaker #2: Third quarter. The significant compared improvements in costs drove strong cash generation over operations during the quarter, even after restructuring costs. Legal costs, dividends, and other costs remained the same, which Paul will discuss in more detail.
Steven Urvan: Before I turn things over to Paul, I would like to touch on our most important financial metric, adjusted EBITDA, which we believe provides helpful insights into the underlying performance of the business, given the level of non-recurring items impacting reporting results. To help clarify our performance, we include a table detailing adjusted EBITDA in both our earnings release and 10-Q. This quarter's adjusted EBITDA number confirms our progress as we delivered a 54% increase in adjusted EBITDA for the quarter to $6.5 million, compared to $4.3 million in 2025's third quarter. I will now turn it over to Paul Kasowski, our Chief Financial Officer, to discuss the quarter's performance in greater detail.
Steven Urvan: Before I turn things over to Paul, I would like to touch on our most important financial metric, adjusted EBITDA, which we believe provides helpful insights into the underlying performance of the business, given the level of non-recurring items impacting reporting results. To help clarify our performance, we include a table detailing adjusted EBITDA in both our earnings release and 10-Q. This quarter's adjusted EBITDA number confirms our progress as we delivered a 54% increase in adjusted EBITDA for the quarter to $6.5 million, compared to $4.3 million in 2025's third quarter. I will now turn it over to Paul Kasowski, our Chief Financial Officer, to discuss the quarter's performance in greater detail.
Speaker #2: Before I turn things over to Paul, I would like to touch on our most important financial metric, adjusted EBITDA, which we believe provides helpful insights into the performance of the underlying business.
Speaker #2: level of items impacting results . To help clarify our performance , we table detailing EBITDA adjusted in both our earnings release and 10-q .
Speaker #2: This quarter's adjusted EBITDA includes a number that confirms our progress, as we delivered a 54% increase in EBITDA for the adjusted quarter to $4 million from a non-recurring $4.3 million in the reporting quarter compared to 2025.
Speaker #2: Third quarter. I will now turn it over to Paul Kasowski, our financial chief, to review the quarter's performance in greater detail.
Paul Kasowski: Thanks, Steve. I'm excited to share some highlights from our third quarter. Outdoor Holding Company reported net income for a second consecutive quarter at just under $1.5 million in Q3. Third quarter Adjusted EBITDA was $6.5 million, a robust 49% of net sales. We reported an improvement in Q3, adjusting earnings per share from the previous year's 4 cents per share to 5 cents per share. Q3 is seasonally one of our highest quarters for sales, and that remains consistent this year. GMV was $215.8 million and grew 6.4%, while net revenue was $13.4 million, an increase of 7% compared to the same period last year.
Paul Kasowski: Thanks, Steve. I'm excited to share some highlights from our third quarter. Outdoor Holding Company reported net income for a second consecutive quarter at just under $1.5 million in Q3. Third quarter Adjusted EBITDA was $6.5 million, a robust 49% of net sales. We reported an improvement in Q3, adjusting earnings per share from the previous year's 4 cents per share to 5 cents per share. Q3 is seasonally one of our highest quarters for sales, and that remains consistent this year. GMV was $215.8 million and grew 6.4%, while net revenue was $13.4 million, an increase of 7% compared to the same period last year.
Speaker #3: Thanks, excited to share—this is Steve. I'm Urvan from Outdoor Holdings. Company reported net income for the second consecutive quarter, holding through the third quarter under just for a Q3 at.
Speaker #3: Third quarter adjusted
Speaker #3: was $6.5 million , a $6.5 million , 49% of net sales reported in Q3 earnings per
Speaker #3: previous year's $0.04 adjusted per share to robust $0.05 per share is discuss the share from the sales remains consistent this an year . GMV highest was EBITDA $215.8 million and seasonally one of our grew 6.4% , while net revenue was $13.4 million , increase of the same period year last .
Speaker #3: previous year's $0.04 adjusted per share to robust $0.05 per share is discuss the share from the sales remains consistent this an year . GMV highest was EBITDA $215.8 million and seasonally one of our grew 6.4% , while net revenue was $13.4 million , increase of the same period year last . unit up over improvement quarter , 8% from last adjusted .
Paul Kasowski: Firearm unit sales were up over 8% from last quarter, while adjusted mix decreased by 3.7%, resulting in an increased share of adjusted mix by 56 basis points. The significant increase in firearm GMV was partially offset by a decline in the non-firearms category. The company is committed to improving the user experience on GunBroker, and recently announced a strategic partnership with Master FFL to improve the transfer process for products subject to FFL regulations. This partnership required an upfront investment in Q3, impacting COGS, but margins remained strong at 87.1%. We anticipate this continued expense until the implementation is complete. Bottom line is that our strong adjusted EBITDA was driven by improved operating efficiency, reduced expenses, and increased GMV when compared to last year's third quarter.
Paul Kasowski: Firearm unit sales were up over 8% from last quarter, while adjusted mix decreased by 3.7%, resulting in an increased share of adjusted mix by 56 basis points. The significant increase in firearm GMV was partially offset by a decline in the non-firearms category. The company is committed to improving the user experience on GunBroker, and recently announced a strategic partnership with Master FFL to improve the transfer process for products subject to FFL regulations. This partnership required an upfront investment in Q3, impacting COGS, but margins remained strong at 87.1%. We anticipate this continued expense until the implementation is complete. Bottom line is that our strong adjusted EBITDA was driven by improved operating efficiency, reduced expenses, and increased GMV when compared to last year's third quarter.
Speaker #3: …resulting in an increased 3.7% share of adjusted mix, up by 56 basis points. The significant increase in firearm was offset partially by a decline in the Q3 firearms category.
Speaker #3: The company is committed to improving the user experience on GunBroker, and announced recently a strategic partnership with Master FFL to improve the transfer process for products subject to FFL regulations.
Speaker #3: This partnership required an upfront investment in Q3. GMV was impacting COGS, but margins remained strong at 87.1%. We anticipate this continued until the implementation is complete.
Speaker #3: Bottom expense line is that our adjusted EBITDA was driven by our improved operating strong efficiency, reduced expenses, and increased GMV compared to last year's third quarter when.
Paul Kasowski: The strength of the company's operating model is also evidenced in the increased cash position of nearly $4.2 million from last quarter, including $0.5 million of interest income, bringing our current cash balance to $69.9 million. The company intends to deploy some of that cash through its share repurchase program as trading permits. Surplus cash generation continues to be impacted by legal costs, but we expect a larger percentage of cash from operations to gradually be retained by the company as these matters are resolved. Looking at results for the first nine months of fiscal 2026, net sales were up slightly at $37.2 million, compared to $36.8 million in fiscal year 2025. Year-to-date fiscal 2026 gross margins were 87.1% versus 86.7% in last year's period.
Paul Kasowski: The strength of the company's operating model is also evidenced in the increased cash position of nearly $4.2 million from last quarter, including $0.5 million of interest income, bringing our current cash balance to $69.9 million. The company intends to deploy some of that cash through its share repurchase program as trading permits. Surplus cash generation continues to be impacted by legal costs, but we expect a larger percentage of cash from operations to gradually be retained by the company as these matters are resolved. Looking at results for the first nine months of fiscal 2026, net sales were up slightly at $37.2 million, compared to $36.8 million in fiscal year 2025. Year-to-date fiscal 2026 gross margins were 87.1% versus 86.7% in last year's period.
Speaker #3: The strength of the company is also operating in the evidenced position of increased $4.2 million from last model quarter, including millions of dollars of cash interest income, bringing our balance to current cash. The company intends to deploy some of that through the repurchase program, as share trading permits.
Speaker #3: cash generation Surplus through its continues to be impacted by costs , but we legal $69.9 million . a larger percentage of cash from operations gradually be to cash retained by company as these matters the are resolved .
Speaker #3: Looking at results for the first nine months of fiscal 2026, net sales were up slightly at $37.2 million, compared to $36.8 million in fiscal year 2025.
Speaker #3: Year-to-date fiscal 2026 gross margins were expected versus 86.7% in last year's period, reducing operating—improving the user experience will remain a focus for the first nine months of fiscal year 2026.
Paul Kasowski: Reducing operating expenses and improving the user experience will remain a focus. For the first nine months of fiscal year 2026, our Adjusted EBITDA per share is $0.12, compared to $0.10 per share for the first nine months of fiscal year 2025. We have reduced operating expenses by $28.9 million year-over-year, largely driven by legal resolutions and reduced corporate expenses. As a result, the net loss before discontinued operations was $4.5 million for the first nine months of fiscal year 2026, or $0.04 per share, a significant improvement over the $40.6 million net loss from continuing operations, or $0.34 per share for the first nine months of fiscal year 2025.
Paul Kasowski: Reducing operating expenses and improving the user experience will remain a focus. For the first nine months of fiscal year 2026, our Adjusted EBITDA per share is $0.12, compared to $0.10 per share for the first nine months of fiscal year 2025. We have reduced operating expenses by $28.9 million year-over-year, largely driven by legal resolutions and reduced corporate expenses. As a result, the net loss before discontinued operations was $4.5 million for the first nine months of fiscal year 2026, or $0.04 per share, a significant improvement over the $40.6 million net loss from continuing operations, or $0.34 per share for the first nine months of fiscal year 2025.
Speaker #3: Our adjusted EBITDA per $0.12 is , $0.10 per share for the first nine months of fiscal 2025 . We have reduced operating expenses by $28.9 million year over year driven by , largely resolutions reduced corporate .
Speaker #3: As a result, before loss expenses of discontinued share operations, it was $4.5 million for the first nine months compared to expenses in fiscal 2026, or $0.04 per share.
Speaker #3: significant A improvement over the $40.6 million net loss from continuing operations or , $0.34 per share , the for months of fiscal We expect our financial performance continue progressing on this trajectory , but results may be tempered by costs in legal a short term , continue to resolve remaining issues .
Paul Kasowski: We expect our financial performance to continue progressing on this positive trajectory, but results may be tempered by legal costs in the short term... as we continue to resolve remaining issues. Now, let me turn it over to Steve for some final remarks before we take your questions.
Paul Kasowski: We expect our financial performance to continue progressing on this positive trajectory, but results may be tempered by legal costs in the short term as we continue to resolve remaining issues. Now, let me turn it over to Steve for some final remarks before we take your questions.
Speaker #3: Now, let me turn it over to Steve for some final remarks before we take questions.
Steven Urvan: Thanks, Paul. Overall, we are pleased with the progress made this quarter. The results reflect the impact of the cost reduction initiatives implemented over the past several quarters, and we believe there remains additional opportunity to further improve operational efficiency. We have made such progress by relocating the headquarters and eliminating other redundant costs, but we will continue to evaluate and execute on additional opportunities to simplify the organization. Our near-term objective remains to achieve a $25 million Adjusted EBITDA run rate before sales growth over the next 12 months. Paul also pointed out our substantial cash position. In January, we announced a stock repurchase program. We have since been in an earnings-related blackout, but look forward to deploying the repurchase program when we are in open trading window over the next couple of months. We remain focused on disciplined capital allocation to support long-term shareholder value.
Steven Urvan: Thanks, Paul. Overall, we are pleased with the progress made this quarter. The results reflect the impact of the cost reduction initiatives implemented over the past several quarters, and we believe there remains additional opportunity to further improve operational efficiency. We have made such progress by relocating the headquarters and eliminating other redundant costs, but we will continue to evaluate and execute on additional opportunities to simplify the organization. Our near-term objective remains to achieve a $25 million Adjusted EBITDA run rate before sales growth over the next 12 months. Paul also pointed out our substantial cash position. In January, we announced a stock repurchase program. We have since been in an earnings-related blackout, but look forward to deploying the repurchase program when we are in open trading window over the next couple of months. We remain focused on disciplined capital allocation to support long-term shareholder value.
Speaker #2: Thanks, Paul. We are pleased with the progress made this quarter. The results
Speaker #2: reflect the of the
Speaker #2: reduction initiatives implemented over the several quarters , believe your remains there additional to further improve operational have made such past
Speaker #2: and relocating the eliminating redundant costs . But we as we continue to evaluate and additional opportunities to simplify the progress by organization
Speaker #2: Our efficiency objective remains to achieve, in the near term, a $25 million adjusted EBITDA run rate. Overall, we are focused on delivering sales growth over the next 12 months.
Speaker #2: Paul also pointed out our substantial cash position in January , we announced a growth stock repurchase program . We have since been in an earnings related blackout , but look forward to repurchase deploying the program when we open trading window over the are in couple of next months .
Speaker #2: We remain focused on allocation to support long-term shareholder capital. Looking forward, we expect continued cost optimization alongside improvements to the user experience on the GunBroker.com site, with the goal of increasing transaction volume, traffic, conversion, and ultimately revenue.
Steven Urvan: Looking forward, expect continued cost optimization alongside targeted investments to improve the user experience on the GunBroker.com site, with the goal of increasing traffic, increasing transaction volume, conversion, and ultimately revenue. With our gross margins and disciplined operational efficiency, each dollar of incremental revenue will have a tremendous impact on profitability, driving improved shareholder value. That concludes our opening remarks. I will now turn the call over to the operator for questions. Thank you.
Steven Urvan: Looking forward, expect continued cost optimization alongside targeted investments to improve the user experience on the GunBroker.com site, with the goal of increasing traffic, increasing transaction volume, conversion, and ultimately revenue. With our gross margins and disciplined operational efficiency, each dollar of incremental revenue will have a tremendous impact on profitability, driving improved shareholder value. That concludes our opening remarks. I will now turn the call over to the operator for questions. Thank you.
Speaker #2: targeted
Speaker #2: With our disciplined margins and on operational, each incremental revenue will have a disciplined impact on profitability, driving improved shareholder value. That concludes our remarks.
Speaker #2: Now I turn the call over for questions. Thank you.
Operator 1: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Matt Koranda with Roth Capital Partners. Please go ahead, sir.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Matt Koranda with Roth Capital Partners. Please go ahead, sir.
Speaker #1: will . We now begin the answer session . To ask a question , you press may star tone phone . If using you are a question and speakerphone , please pick up your handset before touch .
Speaker #1: at any If time your question has addressed and you would like to withdraw your been question , please
Speaker #1: and then two . Our first star question comes from
Matt Koranda: Hey, guys. Good morning, and nice job on the quarter. Well, curious to hear a little bit more about what you think is driving the good performance in firearm sales for you versus NICS. You're well outpacing that. Wanted to hear a little bit more about maybe some of the enhanced seller tools that you put into place that might be helping that. How much is it, the used, the shift in the used in the industry in general, that's helping you out there? Maybe just unpack that a little bit for us.
Matt Koranda: Hey, guys. Good morning, and nice job on the quarter. Well, curious to hear a little bit more about what you think is driving the good performance in firearm sales for you versus NICS. You're well outpacing that. Wanted to hear a little bit more about maybe some of the enhanced seller tools that you put into place that might be helping that. How much is it, the used, the shift in the used in the industry in general, that's helping you out there? Maybe just unpack that a little bit for us.
Speaker #4: Hey guys . morning and Good nice job on the quarter . Curious to hear a little bit more about think what you is driving the good performance in firearm sales for versus NICs .
Speaker #4: You're outpacing that. Maybe you hear a little bit of enhanced seller tools put into place. Wanted to help with that. It might be helping.
Speaker #4: How much is used ? it The shift used into in industry general that's helping you out there ? Maybe bit for unpack us .
Speaker #4: just to that a little
Steven Urvan: Sure. Thank you. Let's see. So our focus is on buyer experience. We have been working hard to, you know, to basically streamline the process, to make it as easy as possible for people to find things, to make it as easy as possible for them to buy things, transact. And then, you know, we just did a release at SHOT Show, talked about Master FFL to streamline as much as possible the, you know, kind of the fulfillment process on the back end, with the transfer dealers and what have you. So for us, it's all about buyer experience, you know, and, and we're creating seller tools as well. But it's all about customer experience, you know, making that experience as seamless as humanly possible.
Steven Urvan: Sure. Thank you. Let's see. So our focus is on buyer experience. We have been working hard to, you know, to basically streamline the process, to make it as easy as possible for people to find things, to make it as easy as possible for them to buy things, transact. And then, you know, we just did a release at SHOT Show, talked about Master FFL to streamline as much as possible the, you know, kind of the fulfillment process on the back end, with the transfer dealers and what have you. So for us, it's all about buyer experience, you know, and, and we're creating seller tools as well. But it's all about customer experience, you know, making that experience as seamless as humanly possible.
Speaker #2: Sure . Thank you . Let's see . focus is on have been hard buyer streamline process to as people find things , to gross basically things as , transact , and then , you know , possible for them to talked about masks buy our possible .
Speaker #2: we
Speaker #2: The , you know , kind of Chacho the streamline as to process on the as easy back dealers end We So it's all for us , know , buyer we're and and what just did well .
Speaker #2: But it's all about about You , you know , to seller making customer tools as much as experience . that experience as seamless as possible .
Steven Urvan: And I think that, you know, in part, that is what's playing, you know, that's helping us drive growth, is getting back to our fundamentals and, and focusing on the experience of the marketplace. Additionally, yes, we... You know, used guns continue to be very strong, although, you know, we've, we've just-- guns in general were, were a great category for us, over the last quarter. So, you know, our continued-- just continuing to focus on that, that customer experience, we're, we're also continuing to work on Universal payments. We're, you know, we're, we're trying to just look at every aspect of the transaction process, and just make it as seamless as humanly possible.
Steven Urvan: And I think that, you know, in part, that is what's playing, you know, that's helping us drive growth, is getting back to our fundamentals and, and focusing on the experience of the marketplace. Additionally, yes, we. You know, used guns continue to be very strong, although, you know, we've, we've just guns in general were, were a great category for us, over the last quarter. So, you know, our continued-- just continuing to focus on that, that customer experience, we're, we're also continuing to work on Universal payments. We're, you know, we're, we're trying to just look at every aspect of the transaction process, and just make it as seamless as humanly possible.
Speaker #2: And I fulfillment make it as think that , that experience . is humanly what's playing , know , that's you know , in part have you . you drive getting back to our us growth is helping focusing working fundamentals to marketplace and .
Speaker #2: Additionally , yes , we continue to guns be very strong you know , we've release just guns in We're a great , FFL for us over the last quarter .
Speaker #2: our the So continued continuing just to with the on that , that also general . to on possible for We're payments . We're , you to to just look at aspect of the customer process transaction as and just seamless as possible know ,
Matt Koranda: Okay, that makes sense. Curious on the Universal Payments implementation, Steve, maybe where are we, I guess, in terms of implementation there? When is it realistic to expect that it might be rolled out across the platform, and what does that unlock for you in terms of incremental GMV that you can go after?
Matt Koranda: Okay, that makes sense. Curious on the Universal Payments implementation, Steve, maybe where are we, I guess, in terms of implementation there? When is it realistic to expect that it might be rolled out across the platform, and what does that unlock for you in terms of incremental GMV that you can go after?
Speaker #2: .
Speaker #4: sense
Speaker #4: sense on the . Curious universal implementation , Steve , maybe makes where on we ? I guess in terms humanly of implementation , there , when is it realistic to expect that it might be rolled out platform ?
Speaker #4: What does that unlock for you in terms of incremental— and that you can go GMV?
Steven Urvan: Sure. So, in terms of what it could mean, right now, about 30% of our transactions are not done through credit card. And so what we look at is, you know, how many transactions are forgone because, you know, people don't want to have to send a check, go to the post office, go to the bank and get cash, go to the post office and get a money order. So, you know, to our way of thinking, that part of the process is not as, is definitely not as streamlined as it could be. And so, you know, for us, Universal payments, we could make money on that 30%, which would, you know, increase our take rate.
Steven Urvan: Sure. So, in terms of what it could mean, right now, about 30% of our transactions are not done through credit card. And so what we look at is, you know, how many transactions are forgone because, you know, people don't want to have to send a check, go to the post office, go to the bank and get cash, go to the post office and get a money order. So, you know, to our way of thinking, that part of the process is not as, is definitely not as streamlined as it could be. And so, you know, for us, Universal payments, we could make money on that 30%, which would, you know, increase our take rate.
Speaker #2: Sure . after So
Speaker #2: terms in could mean ? 30% of our about now , transactions are not done through card . credit And so what what what we at many how look transactions are because people don't want foregone to have is send a post office , go to the , you know , bank and the cash .
Speaker #2: go Go to to the and get a money order . check , go to then take it get of our way post office thinking , as , process is the So not of to you know that part as definitely it could And so a , you us , be .
Speaker #2: Payments are universal; we're not a money-on-which take rate. But we do have, you know, experience to make the buyer experience seamless by just letting them pull out their credit card for use on the site.
Steven Urvan: But we also can make that, you know, experience to the buyer more seamless by allowing them to just pull out their credit card for anything on the site, as opposed to, you know, certain transactions have to be paid for in a way that has a lot more friction. And so we consider that to be a very, you know, big opportunity for driving GMV, which in turn drives revenue. In terms of timeline, you know, it's actually, there's a lot of complexity in payments. There's licensing issues, there's compliance issues, KYC, AML. You're dealing with banks. Banks are slow moving. You know, it's not a super easy process. The technology isn't that hard, but just all the process around it is, you know, challenging.
Steven Urvan: But we also can make that, you know, experience to the buyer more seamless by allowing them to just pull out their credit card for anything on the site, as opposed to, you know, certain transactions have to be paid for in a way that has a lot more friction. And so we consider that to be a very, you know, big opportunity for driving GMV, which in turn drives revenue. In terms of timeline, you know, it's actually, there's a lot of complexity in payments. There's licensing issues, there's compliance issues, KYC, AML. You're dealing with banks. Banks are slow moving. You know, it's not a super easy process. The technology isn't that hard, but just all the process around it is, you know, challenging.
Speaker #2: Opposed, streamlined—as also certain can make to know—for be paid for in a way, anything a lot more that has a friction.
Speaker #2: And so, we consider that to be— a very— transactions have more opportunity, that 30%, for driving increase in our GMV, which then drives the revenue. In terms of timeline, big, you know, it's actually— there's a lot of complexity in payments.
Speaker #2: There's licensing issues . There's issues , compliance AML , you're with . banks . Banks are You slow moving . a it's not it's not You know , it's easy a super .
Speaker #2: The technology hard . process isn't that But the it just all is , challenging . process really don't want you to So I a timeline put out and it because I don't think we're quite close enough yet .
Steven Urvan: So I don't really want to put out a timeline and miss it, because I don't think we're quite close enough yet. But, you know, this is the highest priority for the engineering team, and we are working diligently every day to, you know, move the ball forward on that initiative.
Steven Urvan: So I don't really want to put out a timeline and miss it, because I don't think we're quite close enough yet. But, you know, this is the highest priority for the engineering team, and we are working diligently every day to, you know, move the ball forward on that initiative.
Speaker #2: But you know, is this the highest for the And engineering we are working as a team to diligently move every ball forward on that day.
Speaker #2: initiative
Matt Koranda: Got it. And maybe just last one from me. I guess if we just run rate, which may be a little bit of a dumb way to do it, but if we just run rate the adjusted EBITDA from the third quarter here for a full year, you're tracking ahead of the $25 million in Adjusted EBITDA target that you set out. Maybe help us understand, maybe either Paul or Jordan, if he's on the call, can help us understand sort of what to expect in terms of legal fees and professional fees over the next several quarters that might kind of touch that down, that won't be adjusted.
Matt Koranda: Got it. And maybe just last one from me. I guess if we just run rate, which may be a little bit of a dumb way to do it, but if we just run rate the adjusted EBITDA from the third quarter here for a full year, you're tracking ahead of the $25 million in Adjusted EBITDA target that you set out. Maybe help us understand, maybe either Paul or Jordan, if he's on the call, can help us understand sort of what to expect in terms of legal fees and professional fees over the next several quarters that might kind of touch that down, that won't be adjusted. Any help on sort of where we are in the trajectory toward putting up a full year of the $25 million that you set out several months ago?
Speaker #4: just last one for I guess just me . rate , if we a little bit of a dumb way to do which may be adjusted run rate EBITDA from the third quarter the the for a year , you're tracking here full the 25 million in adjusted target that that maybe help out us understand .
Speaker #4: Maybe either or Jordan, if you said he's on, you can help us understand sort of what to expect in terms of costs, what kind of fees and professional fees we might see down the line.
Matt Koranda: Any help on sort of where we are in the trajectory toward putting up a full year of the $25 million that you set out several months ago?
Speaker #4: That won't be several quarters adjusted. It sort of is to legal, putting up toward that trajectory for the full year. That set on $25 million that you mentioned several ago?
Speaker #4: Any help same
Steven Urvan: Sure. Paul, you want to take that one?
Steven Urvan: Sure. Paul, you want to take that one?
Paul Kasowski: Yeah, sure. You know, certainly, Matt, there's still work to do, and I think the, you know, indication here is that, you know, there will still be some expenses for items that are not settled and won't be pulled in. It's hard to say on the pure trajectory. I think, you know, some of those costs were lower than expected in Q3, and so just wanted to give you a heads up that, hey, you know, it may not always trend that same direction, so.
Paul Kasowski: Yeah, sure. You know, certainly, Matt, there's still work to do, and I think the, you know, indication here is that, you know, there will still be some expenses for items that are not settled and won't be pulled in. It's hard to say on the pure trajectory. I think, you know, some of those costs were lower than expected in Q3, and so just wanted to give you a heads up that, hey, you know, it may not always trend that same direction, so.
Speaker #2: to take that
Speaker #5: Yeah
Speaker #5: , sure .
Speaker #3: You know, in the—you certainly, Matt,
Speaker #3: work to months think
Speaker #3: work to months
Speaker #3: the
Speaker #3: know ,
Speaker #3: the here
Speaker #3: indication some expenses for the and the won't won't is that , , you pulled in . It's Sure , say on And I .
Speaker #3: you
Speaker #3: settled lower than are not
Speaker #3: Trajectory. Where we are, I think, you know,
Speaker #3: And so, you know, there still needs to be some heads up on costs, where that is, you know, it may always just trend that way, not necessarily in your direction.
Jordan Christensen: Matt, this is Jordan. Just to add to that. Legal costs are never straight line. So we budget them straight line, but they ebb and flow, and we, of course, hope that we resolve as many legal issues as quickly as we can, because spending money on legal fees is not a value add to us whatsoever. So we're constantly trying to get these things resolved, but there may be quarters where it's higher than expected, and there may be quarters where it's lower than expected, but the overall goal is just to knock those things out as quickly as possible.
Jordan Christensen: Matt, this is Jordan. Just to add to that. Legal costs are never straight line. So we budget them straight line, but they ebb and flow, and we, of course, hope that we resolve as many legal issues as quickly as we can, because spending money on legal fees is not a value add to us whatsoever. So we're constantly trying to get these things resolved, but there may be quarters where it's higher than expected, and there may be quarters where it's lower than expected, but the overall goal is just to knock those things out as quickly as possible.
Speaker #6: But the issue is, as many—we're spending constantly because of legal fees. So it's not a legal line to us; we're constantly trying to get things resolved.
Speaker #6: This is hard to add to legal.
Speaker #6: Never a straight are we. Budget, the is—they flow, ebb, and hey, you them. Straight of hope course. And we.
Speaker #6: But there will be quarters, so quickly, that are higher than we resolved or expected, and there are quarters where it may be lower than expected. But, overall, the goal is value add—just to get those things out as quickly as possible.
Matt Koranda: Okay, guys. I'll leave it over to someone else here. Thank you.
Matt Koranda: Okay, guys. I'll leave it over to someone else here. Thank you.
Speaker #4: Okay, guys, I'll leave it over to
Steven Urvan: Thank you.
Steven Urvan: Thank you.
Speaker #4: someone else .
Speaker #4: Thank you
Operator 1: The next question comes from Mark Smith with Lake Street. Please go ahead.
Operator: The next question comes from Mark Smith with Lake Street. Please go ahead.
Speaker #2: Thank you .
Speaker #1: Next question comes from Mark Smith with Street. Mark, go ahead.
Speaker #1: Next question comes from Mark Smith with Street. Mark, go ahead.
Mark Smith: Hi, guys. Wanted to ask, first off, just as we look at solid firearm sales and revenue across the board, you know, is there anything to call out, for instance, Florida, with the tax holiday? You know, was that a driver of increased sales or anything else that you can point to that helped kind of the outperformance?
Mark Smith: Hi, guys. Wanted to ask, first off, just as we look at solid firearm sales and revenue across the board, you know, is there anything to call out, for instance, Florida, with the tax holiday? You know, was that a driver of increased sales or anything else that you can point to that helped kind of the outperformance?
Speaker #7: Hi, guys. Just as we look, first, at sales and revenue—
Speaker #7: Board, is there anything to call out, for instance with the tax holiday?
Speaker #7: , Florida
Speaker #7: Of driver increased, anything else that you, sales or kind of, that can point to outperformance that helped? Was that—please, go.
Steven Urvan: Paul, you want to take that one?
Steven Urvan: Paul, you want to take that one?
Paul Kasowski: Yeah, we did look at that. It was up, but it was not a large driver of the overall performance, and it was a combination of new and used firearms, both that were up, versus the same quarter a year ago.
Paul Kasowski: Yeah, we did look at that. It was up, but it was not a large driver of the overall performance, and it was a combination of new and used firearms, both that were up, versus the same quarter a year ago.
Speaker #2: take Well , you
Speaker #3: look at We Yeah . was up , but it was not a large driver overall performance . combination of a new and firearms , both that were used same quarter ago up a year .
Mark Smith: Okay.
Mark Smith: Okay.
Paul Kasowski: With used leading the way, but both, both categories were higher.
Paul Kasowski: With used leading the way, but both, both categories were higher.
Speaker #3: Used leading the but both categories versus the way, were both okay. Higher.
Mark Smith: Okay. And looking forward, I would assume maybe, you know, similar thoughts around kind of NFA items with tax stamp going away. You know, sounds like this could be a positive for you here, especially in this next quarter. But is it big enough to really move the needle? Curious if you have any thoughts on that.
Mark Smith: Okay. And looking forward, I would assume maybe, you know, similar thoughts around kind of NFA items with tax stamp going away. You know, sounds like this could be a positive for you here, especially in this next quarter. But is it big enough to really move the needle? Curious if you have any thoughts on that.
Speaker #7: Looking forward, I assume you—
Speaker #7: Of tax stamp going similar. Okay, thoughts away. NFA, know you kind, sounds like this could be positive you here for in next this. But, but a enough really move the here?
Speaker #7: , especially
Speaker #7: quarter .
Speaker #7: It’s big. You have on—any thoughts?
Steven Urvan: So I think, you know, it's a good question, and obviously, you know, requires me to dust off my crystal ball. But I think that, you know, there's no question, NSSF just put out Adjusted mix numbers, and, you know, obviously a lot of people were just holding off on NFA items for the tax to go away. So there's been kind of a burst of activity around there. And I think that, you know, that same burst of activity, specifically in NFA, kind of drives interest in general in firearms. So, you know, I think that, you know, this isn't a...
Steven Urvan: So I think, you know, it's a good question, and obviously, you know, requires me to dust off my crystal ball. But I think that, you know, there's no question, NSSF just put out Adjusted mix numbers, and, you know, obviously a lot of people were just holding off on NFA items for the tax to go away. So there's been kind of a burst of activity around there. And I think that, you know, that same burst of activity, specifically in NFA, kind of drives interest in general in firearms. So, you know, I think that, you know, this isn't a I wouldn't say this is a 2020 COVID situation or whatever, but, you know, I think the market's a little better than it was, you know, in, since the first of the year than it has been prior.
Speaker #2: So I think
Speaker #2: You know, it's a good question. And obviously,
Speaker #2: Dust off, but it requires me to think that,
Speaker #2: question . NSSF just put out numbers . And obviously a , you know , lot of crystal ball . needle to people were off on there's on
Speaker #2: tax to away . So , you know a burst of there's been around there . And I think adjusted mixed that , you know , that same items for burst of activity that NFA kind specifically in general firearms .
Speaker #2: Kind of, this I did.
Speaker #2: So that the , you know , I a , you I wouldn't say this is a think 2020 Covid situation I think the market's a or in a little than it was .
Steven Urvan: I wouldn't say this is a 2020 COVID situation or whatever, but, you know, I think the market's a little, little better than it was, you know, in, since the first of the year than it has been prior.
Speaker #2: whatever ,
Speaker #2: little .
Speaker #2: You know, since the first of the year, it's been better. There has been prior, but go then, isn't.
Mark Smith: Okay. And then I did just want to hit operating expenses again. You know, a good step down in operating expenses this quarter. Does a lot of this feel like, and I know Paul just talked about, you know, some legal, some things that are still happening, but, you know, any thoughts as we look forward at when or where we get to kind of a, what we'll call normalized quarterly OpEx?
Mark Smith: Okay. And then I did just want to hit operating expenses again. You know, a good step down in operating expenses this quarter. Does a lot of this feel like, and I know Paul just talked about, you know, some legal, some things that are still happening, but, you know, any thoughts as we look forward at when or where we get to kind of a, what we'll call normalized quarterly OpEx?
Speaker #2: been
Speaker #7: And then a good, you
Speaker #7: Expenses this—okay, a hit of this—I feel like, Paul, I...
Speaker #7: know
Speaker #7: Things that we know are still happening—Q3, you know, does a lot, as we at Thoughts, or get to kind of activity, call it normalized. Step—that's what we'll OPEX in.
Steven Urvan: You know, it's still off in the future. One of the biggest... actually, let me delineate, you know, OpEx versus things that are adjusted. You know, in terms of OpEx, we are working to reduce our OpEx every day. There were certain requirements, you know, in our settlement with the SEC. There were certain requirements that, you know, require us to and also, you know, just we want to make sure that we're doing everything by the book, you know, because we're under additional scrutiny here, just from, you know, having been under the SEC's eyes for a long period of time.
Steven Urvan: You know, it's still off in the future. One of the biggest actually, let me delineate, you know, OpEx versus things that are adjusted. You know, in terms of OpEx, we are working to reduce our OpEx every day. There were certain requirements, you know, in our settlement with the SEC. There were certain requirements that, you know, require us to and also, you know, just we want to make sure that we're doing everything by the book, you know, because we're under additional scrutiny here, just from, you know, having been under the SEC's eyes for a long period of time.
Speaker #2: You know , still One of the
Speaker #2: . And let me delineate actually , opex versus things that are
Speaker #2: , you know , in terms we interest are working to just our OpEx day . reduce every our in the settlement with were certain operating requirements it's that , you know ,
Speaker #2: requirements and There were to require us to require us certain , and of know , just we SEC . to sure that There want we're doing everything by the book , because we're you know , also , under additional scrutiny here .
Speaker #2: requirements and There were to require us to require us certain , and of know , just we SEC . to sure that There want we're doing everything by the book , because we're you know , also , under additional scrutiny
Speaker #2: from make
Speaker #2: having been you under about SEC's eyes for , know , for a long period of time . really So everything we're to make forward do the we are a lot have .
Steven Urvan: So we're really working hard to make sure that we do everything that we have, you know, a lot more, that we are looking at things a lot closer than you know. Everything we do, we're just looking at it, make sure that everything is right. We wanna, you know, we don't wanna make any mistakes, and so that increases our costs. We have, you know, we're spending more money on legal, we're spending more money on compliance, we're spending more money on internal auditing. And so we're trying to, you know, kind of cost reduce that over time. But, you know, as we pointed out in the past, there's really, you know, it was 12 to 18 months out in the future.
Steven Urvan: So we're really working hard to make sure that we do everything that we have, you know, a lot more, that we are looking at things a lot closer than you know. Everything we do, we're just looking at it, make sure that everything is right. We wanna, you know, we don't wanna make any mistakes, and so that increases our costs. We have, you know, we're spending more money on legal, we're spending more money on compliance, we're spending more money on internal auditing. And so we're trying to, you know, kind of cost reduce that over time. But, you know, as we pointed out in the past, there's really, you know, it was 12 to 18 months out in the future.
Speaker #2: a more that than looking closer We know
Speaker #2: a more that than looking closer We know , we're just . Make
Speaker #2: Lot, look, you know, if you know, the
Speaker #2: sure that , you we're we don't
Speaker #2: we're increases our spending more you know , we're money on legal . money on We want everything we do . compliance so that know , money .
Speaker #2: internal few months It's been a then kind of was really , you any the since point at , you know , we stuff which off cost .
Speaker #2: And so auditing . we're
Speaker #2: cost And reduce that We're to legal some But as we pointed out in the trying past , over , you know , want to out in 12 to 18 months the future .
Speaker #2: cost And reduce that We're to legal some But as we pointed out in the trying past , over , you know , want to time .
Steven Urvan: It's been a few months since then, that was kind of the point at which, you know, we expect that stuff to drop off appreciably. And then from an adjusted standpoint, from a cash flow standpoint, you know, the indemnification of, you know, former officers, is, you know, one of the-- it's just we spend a lot of money on legal fees indemnifying former officers, and that won't end until such time as, you know, they settle with the SEC or that they go through, you know, their process with the SEC, and there's some resolution on that. And so, you know, we see the light at the end of the tunnel, but we're not in control of, you know, when those things are gonna occur.
Steven Urvan: It's been a few months since then, that was kind of the point at which, you know, we expect that stuff to drop off appreciably. And then from an adjusted standpoint, from a cash flow standpoint, you know, the indemnification of, you know, former officers, is, you know, one of the it's just we spend a lot of money on legal fees indemnifying former officers, and that won't end until such time as, you know, they settle with the SEC or that they go through, you know, their process with the SEC, and there's some resolution on that. And so, you know, we see the light at the end of the tunnel, but we're not in control of, you know, when those things are gonna occur.
Speaker #2: Appreciably. And then versus from an adjusted standpoint, from a We cash flow standpoint. But we're to—
Speaker #2: Just spending more legal, and that officers' fees we spend until.
Speaker #2: former with the where we from through , process with the such officers there's some on won't And they go that . . know , lot of the light Indemnifying money on the quarterly But we're one of it's time not in at the end of end indemnification of , you know , that future .
Speaker #2: or
Speaker #2: resolution
Speaker #2: going to things are occur
David Cannon: Okay. And the last one for me is just as we think about cash generation and, you know, capital allocation, and Steve, you talked a little bit about this in your closing remarks. But, you know, you've got to buy back the authorization that's out there now. Anything else that we think of that we should be thinking about that maybe takes a more significant investment here in the near term? And then if you want to talk at all about your thoughts, maybe around the preferred, later this year.
Mark Smith: Okay. And the last one for me is just as we think about cash generation and, you know, capital allocation, and Steve, you talked a little bit about this in your closing remarks. But, you know, you've got to buy back the authorization that's out there now. Anything else that we think of that we should be thinking about that maybe takes a more significant investment here in the near term? And then if you want to talk at all about your thoughts, maybe around the preferred, later this year.
Speaker #7: the
Speaker #7: just
Speaker #7: about Now , anything
Speaker #7: cash later this our in
Speaker #7: and
Speaker #7: You know, they settle.
Speaker #7: . And
Speaker #7: little bit
Speaker #7: And in closing, you know, when generation—they're...
Speaker #7: got allocation know , you've authorization that's out last one for me is
Speaker #7: there . tunnel . else that we think as we about that
Speaker #7: maybe the it takes a more significant . And the here then if you you term . talk at all And in the .
Speaker #7: around the
Steven Urvan: Sure. So, you know, we invest in the company. We invest in our website every day. You know, most of what our engineering team does is really CapEx. You know, we're developing new software, we're developing new features, developing new functionality, developing new processes. You know, all of that is an investment. So we have a substantial budget for, you know, investment in the platform, and we spend that money every day, and we've always done that. You know, in terms of new things outside of that, we are looking at a number of initiatives. You know, AI has come on the scene the last three years, and, you know, we're always looking at. We use AI internally right now.
Steven Urvan: Sure. So, you know, we invest in the company. We invest in our website every day. You know, most of what our engineering team does is really CapEx. You know, we're developing new software, we're developing new features, developing new functionality, developing new processes. You know, all of that is an investment. So we have a substantial budget for, you know, investment in the platform, and we spend that money every day, and we've always done that. You know, in terms of new things outside of that, we are looking at a number of initiatives. You know, AI has come on the scene the last three years, and, you know, we're always looking at. We use AI internally right now.
Speaker #2: Sure .
Speaker #2: the invest in we
Speaker #2: You know, company,
Speaker #2: Team of most, what our day really, we're—does website.
Speaker #2: new developing engineering
Speaker #2: Investment new and every day. And so, and—
Speaker #2: money that that done . You know , spend in terms of our want to new in the are looking at a we've always number of talked a initiatives .
Speaker #2: things has come on You know , In just the know , we're And , you that we scene . at AI You always we're with AI , AI right We do years .
Steven Urvan: We do a lot of things with AI, but we're always looking at ways to, you know, improve and streamline and, you know, like, improve the, again, the buying experience, improve the internal operations, what have you. And so we're looking at focused areas to potentially, you know, invest some money. But when you look at the kind of pile of cash that we have, those investments would not be, you know, that significant compared to the amount of cash we generate and the amount of cash that we have on our balance sheet. So, you know, right now, you know, I mentioned we were in a blackout period. You know, right now, we consider our shares highly undervalued, and we're gonna be out, you know, executing on our repurchase plan, now that the blackout has ended.
Steven Urvan: We do a lot of things with AI, but we're always looking at ways to, you know, improve and streamline and, you know, like, improve the, again, the buying experience, improve the internal operations, what have you. And so we're looking at focused areas to potentially, you know, invest some money. But when you look at the kind of pile of cash that we have, those investments would not be, you know, that significant compared to the amount of cash we generate and the amount of cash that we have on our balance sheet. So, you know, right now, you know, I mentioned we were in a blackout period. You know, right now, we consider our shares highly undervalued, and we're gonna be out, you know, executing on our repurchase plan, now that the blackout has ended.
Speaker #2: use we're always looking improve
Speaker #2: use we're always looking improve now . improve internal streamline the last three things , like so we're but looking again , the buying a lot of when you looking look at what have experience , pile you of we cash that the we and to would not be at .
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Speaker #2: we cash that we period
Speaker #2: we cash that we period
Speaker #2: mentioned we blackout master
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Speaker #2: we
Speaker #2: we
Speaker #2: we
Speaker #2: we
Steven Urvan: In terms of other things, you know, we're just always looking at what we can do with that cash and trying to be smart about it. We don't want to squander the cash. It's not that easy to make. We wanna make smart decisions, and we want to always drive shareholder value, and so we're always looking at ways to deploy that capital to achieve those goals.
Steven Urvan: In terms of other things, you know, we're just always looking at what we can do with that cash and trying to be smart about it. We don't want to squander the cash. It's not that easy to make. We wanna make smart decisions, and we want to always drive shareholder value, and so we're always looking at ways to deploy that capital to achieve those goals.
Speaker #2: We don’t want to squander the easy. We want to make the amount, not that amount of what we can. We don’t want to always shareholder smart value.
Speaker #2: It's
Speaker #2: Looking to deploy what we have on our driveways to do with it. You know, right, always.
Speaker #2: Looking to deploy that on our driveways to do with it. Know, right, always.
David Cannon: Excellent. That's helpful. Thank you, guys.
Mark Smith: Excellent. That's helpful. Thank you, guys.
Speaker #7: Excellent . achieve those That's
Speaker #7: Excellent . achieve those That's
Speaker #7: helpful .
Speaker #7: Thank you cash .
Speaker #7: guys
Operator 1: The next question comes from David Cannon with Cannon Wealth Management. Please go ahead.
Operator: The next question comes from David Cannon with Cannon Wealth Management. Please go ahead.
Speaker #1: Cannon
Speaker #1: Wealth David .
David Cannon: Hi, good morning. Congratulations, and thank you, Steve, and your entire team for your hard work and execution. One more thing, because I know you're not gonna highlight this, is you being so aligned with the shareholders is very welcome by myself and probably the majority of shareholders. Some may not know that you've foregone salary, that essentially you're making $1 a year, and you're aligned with us, with the stock, to a very high magnitude. So thank you for that. So, first question is in regard to the investment that you're making in FFL and the impact that it had on COGS. If you could just quantify that for us, for the quarter and then also, for the 12-month period, what you anticipate that to be in total?
David Cannon: Hi, good morning. Congratulations, and thank you, Steve, and your entire team for your hard work and execution. One more thing, because I know you're not gonna highlight this, is you being so aligned with the shareholders is very welcome by myself and probably the majority of shareholders. Some may not know that you've foregone salary, that essentially you're making $1 a year, and you're aligned with us, with the stock, to a very high magnitude. So thank you for that. So, first question is in regard to the investment that you're making in FFL and the impact that it had on COGS. If you could just quantify that for us, for the quarter and then also, for the 12-month period, what you anticipate that to be in total?
Speaker #8: Hi .
Speaker #8: morning . that aligned with the is One more thing welcome . to
Speaker #8: Congratulations. Good, and the year ahead for your entire team.
Speaker #8: thank Congratulations . Good And the your ahead entire next
Speaker #8: Steve and and with team
Speaker #8: for your to this
Speaker #8: execution highlight because I not
Speaker #8: that salary essentially you're And so a you make . and we shareholders very we're always and you're is going majority of us dollar a with to year
Speaker #8: you for that myself . work stock magnitude . And capital making very high is in regard to investment that . know you're that it you Cogs , if aligned with shareholders .
Speaker #8: you're FFL impact for Yeah . total You had 12 month just you could remarks . be investing said that you us , for the quarter and were a , and I was said that You helping it was investing apologies that a impacted my in
Speaker #8: That, for making it quantifiable, had on the— and I know that period, what you— the— that too.
Speaker #8: anticipate
Speaker #8: anticipate
Steven Urvan: You mean Master FFL, correct?
Steven Urvan: You mean Master FFL, correct?
Speaker #8: in also
Speaker #2: mean
David Cannon: Yeah. You had said that you were investing. My apologies. You- in, in the prepared remarks, you said that you were-
David Cannon: Yeah. You had said that you were investing. My apologies. You- in, in the prepared remarks, you said that you were-
Speaker #8: you
Steven Urvan: Mm-hmm.
Steven Urvan: Mm-hmm.
David Cannon: -investing, and I guess it was a consultant or a vendor that was helping you there, and that there was a cost that impacted COGS.
David Cannon: Investing, and I guess it was a consultant or a vendor that was helping you there, and that there was a cost that impacted COGS.
Speaker #8: guess were let
Speaker #8: or
Speaker #8: vendor FFL
Speaker #8: that
Speaker #8: cost an
Steven Urvan: ... Correct. I'll let Paul talk about the cost, but in terms of, you know, the Master FFL announcement, again, this is, you know, this is the attempt to streamline a point of friction in the buying process. Firearms have to be shipped to a licensed dealer in the US. You can't just ship a gun to your house. It has to be shipped to a licensed dealer, and the buyer has to pick it up from a licensed dealer. And so there's a whole, there's paperwork that needs to change hands. There's things that need to be done to facilitate that, and we identified that as a point of friction. You know, again, and with the goal of improving the buyer experience, we are making an investment in that area.
Steven Urvan: Correct. I'll let Paul talk about the cost, but in terms of, you know, the Master FFL announcement, again, this is, you know, this is the attempt to streamline a point of friction in the buying process. Firearms have to be shipped to a licensed dealer in the US. You can't just ship a gun to your house. It has to be shipped to a licensed dealer, and the buyer has to pick it up from a licensed dealer. And so there's a whole, there's paperwork that needs to change hands. There's things that need to be done to facilitate that, and we identified that as a point of friction. You know, again, and with the goal of improving the buyer experience, we are making an investment in that area. We expect it to be something that generates revenue over time, but there is a little bit of an initial investment, and I'll let Paul address that right now.
Speaker #2: Paul, but consultant cost, in terms—
Speaker #2: master is an of this
Speaker #2: master is an of this
Speaker #2: So, we experienced improving the friction—buyer making, buying as a
Speaker #2: Streamline again, this. You friction in. Announcement.
Speaker #2: Firearms shipped to licensed
Speaker #2: the
Speaker #2: The dealer has to be there, and that's just to get your US shipment. It has to be picked up. You can't just have it shipped to you.
Speaker #2: licensed in that investment with the . And And we to that revenue over . bit of an change We we investment , are let that area now ship a gun You know ,
Speaker #2: the buyer
Speaker #2: dealer hands . . whole there's And . Correct . paperwork that there's a things that need to be identified that point of facilitate , you that done to .
Speaker #2: So, dealer. And has to be licensed.
Speaker #2: needs to right generates
Steven Urvan: We expect it to be something that generates revenue over time, but there is a little bit of an initial investment, and I'll let Paul address that right now.
Speaker #2: expect it
Speaker #2: be
Speaker #2: But a little run.
Speaker #2: there is
Paul Kasowski: Yeah. So it's about, you know, $60 to 120,000 a month here in terms of the nominal investment. And it's really intended to get all the plumbing working, coordination, to make the tool really seamless, in the long run. Like Steve said, it'd be really a profit center and an opportunity to generate additional sales.
Paul Kasowski: Yeah. So it's about, you know, $60 to 120,000 a month here in terms of the nominal investment. And it's really intended to get all the plumbing working, coordination, to make the tool really seamless, in the long run. Like Steve said, it'd be really a profit center and an opportunity to generate additional sales.
Speaker #2: . Paul generate
Speaker #3: Yeah . So
Speaker #3: Yeah . So
Speaker #3: it's initial
Speaker #3: about
Speaker #3: In correct here
Speaker #3: the
Speaker #3: investment .
Speaker #3: And
Speaker #3: really
Speaker #3: to time and
Speaker #3: to time and
Speaker #3: get all financing ?
Speaker #3: get all financing ?
Speaker #3: Steve would a the long
Speaker #3: center ,
Speaker #3: opportunity to
David Cannon: Paul, did you say $60 thousand to 120 thousand a month?
David Cannon: Paul, did you say $60 to $120 thousand a month?
Speaker #8: you say profit
Speaker #8: 60 to 120,000, I did. Okay,
Paul Kasowski: That's correct.
Paul Kasowski: That's correct.
David Cannon: Okay, so probably maybe up to $400,000 or $500,000 for the quarter was the impact, which at some point we'll get back, and then also, as Steve mentioned, it should improve conversion.
David Cannon: Okay, so probably maybe up to $400,000 or $500,000 for the quarter was the impact, which at some point we'll get back, and then also, as Steve mentioned, it should improve conversion.
Speaker #8: Maybe up, and I'll—okay. So, address.
Speaker #8: It was the impact, and it will get as it was.
Speaker #8: at some terms of
Paul Kasowski: Right.
Paul Kasowski: Right.
David Cannon: Okay. And then on another subject, as it relates to the bank, could you give us an update on what you think is happening in terms of regulation and banks potentially offering traditional financing? The reason I'm asking is, you know, you're paying 8.75% on your preferred, you know, with the strong cash generation. I mean, we would, if you were a regular company, banks would be lining up to give you $50 million at probably SOFR + 2. And we could arb that, and we could also thoughtfully, opportunistically deploy that into, you know, other initiatives like share buybacks or whatever increases shareholder value. So could you talk a little bit about that landscape and what's happening, and if this is an opportunity in the forward 12 months?
David Cannon: Okay. And then on another subject, as it relates to the bank, could you give us an update on what you think is happening in terms of regulation and banks potentially offering traditional financing? The reason I'm asking is, you know, you're paying 8.75% on your preferred, you know, with the strong cash generation. I mean, we would, if you were a regular company, banks would be lining up to give you $50 million at probably SOFR + 2. And we could arb that, and we could also thoughtfully, opportunistically deploy that into, you know, other initiatives like share buybacks or whatever increases shareholder value. So could you talk a little bit about that landscape and what's happening, and if this is an opportunity in the forward 12 months?
Speaker #8: conversion , it should update
Speaker #8: Relates to the sulfur plus two. In happening a little.
Speaker #8: bank , opportunity in the
Speaker #8: regulation and point
Speaker #8: So what can I improve for an I'm
Speaker #8: preferred , is
Speaker #8: company ,
Speaker #8: also paying eight thoughtfully reason ? , opportunistically deploy that with the to And initiatives and you I mean , share or asking whatever then value .
Speaker #8: So, you talk on three-quarters on your — is landscape could happening? Another, and —
Speaker #8: bit that forward
Steven Urvan: Yeah, I'll be happy to do that. So, just in the last week or two, J.P. Morgan sent a letter to the NSSF and basically rescinded their policies that, you know, prohibited them from doing business with the gun industry. I think it was, it was kind of veiled in the modern sporting rifles category. But, you know, I think under Trump, you know, he signed an executive order. They've put out some additional requirements that, you know, they're prohibiting banks from discriminating against a number of categories of businesses, you know, including fossil fuels and what have you.
Steven Urvan: Yeah, I'll be happy to do that. So, just in the last week or two, J.P. Morgan sent a letter to the NSSF and basically rescinded their policies that, you know, prohibited them from doing business with the gun industry. I think it was, it was kind of veiled in the modern sporting rifles category. But, you know, I think under Trump, you know, he signed an executive order. They've put out some additional requirements that, you know, they're prohibiting banks from discriminating against a number of categories of businesses, you know, including fossil fuels and what have you.
Speaker #8: 12 months .
Speaker #2: Yeah , I'll be
Speaker #2: do about last you
Speaker #2: just
Speaker #2: in the week
Speaker #2: or two .
Speaker #2: Morgan is an
Speaker #2: sent a
Speaker #2: sent a letter
Speaker #2: and I
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Speaker #2: know , under
Speaker #2: requirements in JP of what we are sporting, banks from that category.
Speaker #2: Requirements in JP with which we are sporting banks from the category that the gun.
Steven Urvan: But firearms was kind of very high up the list, and I think that what that does, you know, change the landscape in terms of being able to get bank debt, sizable amounts of bank debt at a reasonable price. In the past, you know, if you look at the top 100 banks, you know, maybe there were five or six that would do business with, with companies that were, you know, gun companies. We're not really a gun company, we're a technology company, but firearms are sold through our site. And I think that, you know, the executive orders and the change in attitude by the regulators is changing that, changing that attitude toward the gun industry and opening up avenues that were previously closed to us.
Steven Urvan: But firearms was kind of very high up the list, and I think that what that does, you know, change the landscape in terms of being able to get bank debt, sizable amounts of bank debt at a reasonable price. In the past, you know, if you look at the top 100 banks, you know, maybe there were five or six that would do business with, with companies that were, you know, gun companies. We're not really a gun company, we're a technology company, but firearms are sold through our site. And I think that, you know, the executive orders and the change in attitude by the regulators is changing that, changing that attitude toward the gun industry and opening up avenues that were previously closed to us.
Speaker #2: that orders and And I prohibiting out And I attitude by the , including industry . change in to was that obviously is regulators then ways to the intelligent changing think that , changing including you kind preferred to And could what know that agree .
Steven Urvan: I do agree with your thesis that, you know, the company probably has the ability to raise a substantial amount of reasonably priced debt from banks, you know, if we care to do that. Then, you know, obviously, we could look at intelligent ways to deploy it, including potentially paying off the preferred, potentially share buybacks, you know, whatever intelligent capital allocation strategies that we wish to pursue. So yes, I believe very much that that avenue is much more accessible than it has been, you know, in the past.
Steven Urvan: I do agree with your thesis that, you know, the company probably has the ability to raise a substantial amount of reasonably priced debt from banks, you know, if we care to do that. Then, you know, obviously, we could look at intelligent ways to deploy it, including potentially paying off the preferred, potentially share buybacks, you know, whatever intelligent capital allocation strategies that we wish to pursue. So yes, I believe very much that that avenue is much more accessible than it has been, you know, in the past.
Speaker #2: You know, it probably hasn't done a substantial amount, but it does raise the ability to be much more accessible than before.
Speaker #2: If you know reasonably, you can be intelligent about knowing whether it's priced in. Does the number of the company in the past know that?
Speaker #2: You know, we don’t care and we are moving forward in terms of taking on debt.
David Cannon: Okay. Is that something that, I'm sorry, is that something that you're currently engaged in? Are you in conversations with banks at this present time to get reasonable debt?
David Cannon: Okay. Is that something that, I'm sorry, is that something that you're currently engaged in? Are you in conversations with banks at this present time to get reasonable debt?
Speaker #8: that like
Speaker #8: I'm
Speaker #8: you're
Speaker #8: in ?
Speaker #8: banks
Steven Urvan: We are not. But, you know, we're always looking at capital allocation strategies. And, you know, I've done a number of debt deals in my life. I don't like to be over-levered, but, you know, a certain amount of leverage that we can easily service is a good thing. And so we are always looking at these things.
Steven Urvan: We are not. But, you know, we're always looking at capital allocation strategies. And, you know, I've done a number of debt deals in my life. I don't like to be over-levered, but, you know, a certain amount of leverage that we can easily service is a good thing. And so we are always looking at these things.
Speaker #8: reasonable
Speaker #8: reasonable
Speaker #2: Capital here at this—we are debt deals create.
Speaker #2: life . and to able to be charge for it we're that we . easily those are the two examples And , you know , Are examples of solid time that services want to talk some .
Speaker #2: leverage
David Cannon: ... Okay. And then I see take was up about 10 basis points. Can you talk to some of the levers that you think you have? And is there opportunity to move take up a little bit more? And then my last question is in regards to the progress that you've made in used. Over the next 12 to 24 months, do you guys have an internal target as to the percentage that you'd like to see in GMV per used?
David Cannon: Okay. And then I see take was up about 10 basis points. Can you talk to some of the levers that you think you have? And is there opportunity to move take up a little bit more? And then my last question is in regards to the progress that you've made in used. Over the next 12 to 24 months, do you guys have an internal target as to the percentage that you'd like to see in GMV per used?
Speaker #8: to with in GMV for
Steven Urvan: So I think, you know, in terms of moving take rate around, I'll let Paul give you some more details here. But in terms of moving take rate around, you know, things like the universal payments, potentially even the deal with Master FFL, these have the ability to, you know, increase our take rates over time. And we, you know, as these things roll in, you know, we're always trying to drive that number to the best of our ability. We're trying to drive it through, you know, new services as opposed to straight fee increases. And so, you know, we're trying to be very thoughtful and find ways to create more value and to be able to charge for it.
Steven Urvan: So I think, you know, in terms of moving take rate around, I'll let Paul give you some more details here. But in terms of moving take rate around, you know, things like the universal payments, potentially even the deal with Master FFL, these have the ability to, you know, increase our take rates over time. And we, you know, as these things roll in, you know, we're always trying to drive that number to the best of our ability.
Speaker #2: think , you use
Speaker #2: I'll say something—that is, you, some more. Are we, like, to let...
Speaker #2: Details will be over conversations with around—we're
Speaker #2: Payments moving take, you know, we're
Speaker #2: Payments moving take, you know, we're even sorry.
Speaker #2: always
Speaker #2: always target
Steven Urvan: We're trying to drive it through, you know, new services as opposed to straight fee increases. And so, you know, we're trying to be very thoughtful and find ways to create more value and to be able to charge for it. And, you know, those two examples I just gave are, you know, solid examples of that. Paul, do you want to talk some more about, kind of, the other question David asked about where we expect it to go?
Speaker #2: and us to
Speaker #2: ways Sorry .
Speaker #2: ways Sorry .
Steven Urvan: And, you know, those two examples I just gave are, you know, solid examples of that. Paul, do you want to talk some more about, kind of, the other question David asked about where we expect it to go?
Speaker #2: kind of I just of gave . the other Paul , do you about the expect we're go in , you know , asked thoughtful .
Paul Kasowski: Sorry, it was of where we expect... I missed the last part of his other question.
Paul Kasowski: Sorry, it was of where we expect. I missed the last part of his other question.
Speaker #3: missed
Speaker #3: his other part of
David Cannon: Just an internal target over the next 12 to 24 months, that you'd like to see used become as a percent of the overall revenue.
David Cannon: Just an internal target over the next 12 to 24 months, that you'd like to see used become as a percent of the overall revenue.
Speaker #8: Target that used, you'd debt 12 to 24 months.
Speaker #8: over the
Speaker #8: next
Speaker #8: percent of
Speaker #8: percent of
Speaker #8: overall the . a
Speaker #8: overall the . a
Paul Kasowski: We have not set an internal target on used. I think some of the marketing programs kind of address users on the site by kind of profile is the goal. So, we did not set a target on used GMV sales.
Paul Kasowski: We have not set an internal target on used. I think some of the marketing programs kind of address users on the site by kind of profile is the goal. So, we did not set a target on used GMV sales.
Speaker #3: have not set
Speaker #3: Address internal number to our use.
Speaker #3: Address internal number to our marketing, you.
Speaker #3: Users of I, the We, is GMV. I think some of the programs by kind of these things are on target and become as—
Speaker #3: Users of I, the We, is GMV, think some of programs by kind of these things on, on.
Speaker #3: Users of the We is GMV think some of the programs by kind of these things, on target, become as on the revenue used we did.
Steven Urvan: We are continually, we're always trying to, you know, drive more used product through the site. And we may not have quantified it, but, you know, that's a goal, is to continue to get more used product on the site. Used product has a great sell-through rate, great margins to the person who's actually selling the product, so it's just always a push for us.
Steven Urvan: We are continually, we're always trying to, you know, drive more used product through the site. And we may not have quantified it, but, you know, that's a goal, is to continue to get more used product on the site. Used product has a great sell-through rate, great margins to the person who's actually selling the product, so it's just always a push for us.
Speaker #2: We're always continually trying to have the best profile through the site and product. We have not set quantified numbers, but we're continuing to do our best. Things may not always be set, but that's what we're used to. The product has a great sell through on the site. Our goal is to continue selling the great product.
Speaker #2: to know , sales
Speaker #2: to know , sales
Speaker #2: have
Speaker #2: get more
Speaker #2: who's actually through
Speaker #2: who's actually through
Speaker #2: Always a—it's just push for.
David Cannon: You know what? One more question. So you had mentioned that to start the year, probably given what's happening with, you know, ICE and some of this protesting, you had implied that there was an increase in activity, that the year started off more positively. Could you just touch on that a little bit and share with us what you're seeing? I mean, we check the traffic, and we do see it improving, but we don't see anything like, you know, really meaningful. But it-- But I'll, I'll-
David Cannon: You know what? One more question. So you had mentioned that to start the year, probably given what's happening with, you know, ICE and some of this protesting, you had implied that there was an increase in activity, that the year started off more positively. Could you just touch on that a little bit and share with us what you're seeing? I mean, we check the traffic, and we do see it improving, but we don't see anything like, you know, really meaningful. But it-- But I'll, I'll-
Speaker #2: .
Speaker #8: question the year what ?
Speaker #8: question the year what ?
Speaker #8: . So
Speaker #8: mentioned given you had
Speaker #8: You saw that increase year over year, just touching on that.
Speaker #8: some of
Speaker #8: I know, with margins, this was an—
Speaker #8: activity that
Speaker #8: positively .
Speaker #8: we check anything I'll ,
Speaker #8: it saying .
Speaker #8: don't see , probably
Steven Urvan: Yeah.
Steven Urvan: Yeah.
David Cannon: I'd like to hear what you're seeing.
David Cannon: I'd like to hear what you're seeing.
Speaker #8: Really, a goal mean, but meaningful. I'd like what you're...
Steven Urvan: You know, like I said, the NSSF, you know, does the adjusted mix, and obviously, you know, the suppressor, the taxes going away on NFA items has driven activity. And I think, probably more than, you know, the Minnesota occurrences, probably more so than that. It's just, you know, as of 1 January, no more NFA tax, and that's driving activity, and that's driving interest, not just in the restricted items, but, you know, across the board. I think that's probably your biggest driver, is just the tax going away. It's caused renewed interest in the space.
Steven Urvan: You know, like I said, the NSSF, you know, does the adjusted mix, and obviously, you know, the suppressor, the taxes going away on NFA items has driven activity. And I think, probably more than, you know, the Minnesota occurrences, probably more so than that. It's just, you know, as of 1 January, no more NFA tax, and that's driving activity, and that's driving interest, not just in the restricted items, but, you know, across the board. I think that's probably your biggest driver, is just the tax going away. It's caused renewed interest in the space.
Speaker #2: You know
Speaker #2: Like I said at the start, the
Speaker #2: Like I said at the start, the
Speaker #2: does the
Speaker #2: Obviously, the suppressor, the taxes—
Speaker #2: obviously the suppressor , the
Speaker #2: going away on the NFA
Speaker #2: has , you the driven
Speaker #2: And I
Speaker #2: probably to hear ICE and more than
Speaker #2: Probably to hear ICE and more than
Speaker #2: the
Speaker #2: Minnesota see
Speaker #2: . probably
Speaker #2: than
Speaker #2: That. It's just, you know, the US.
Speaker #2: January 1st ,
Speaker #2: January 1st , no
Speaker #2: NFA traffic and tax. And that's more driving your activity and, and—
Speaker #2: Driving more so interest, not we do but we like just.
Speaker #2: in us what
Speaker #2: The items, but you know, are restricted across the board. Probably your biggest driver is just the ongoing tax. It's caused renewed interest in the space.
David Cannon: Okay, that's helpful. Again, thank you for your hard work. Congrats to you and your entire team.
David Cannon: Okay, that's helpful. Again, thank you for your hard work. Congrats to you and your entire team.
Speaker #2: . Okay .
Speaker #8: That's again, thank you for your hard work. Congrats to you and your entire team.
Speaker #8: helpful .
Steven Urvan: Thank you.
Steven Urvan: Thank you.
Operator 1: This concludes our question-and-answer session. I would like to turn the conference back over to Steven Urvan for any closing remarks.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Steven Urvan for any closing remarks.
Speaker #2: Thank you
Speaker #1: This concludes our and session . I would like to conference to Steve turn the Ervin . For any closing remarks
Speaker #1: .
Steven Urvan: I want to thank you for participating in today's call and for your interest in Outdoor Holding Company. We look forward to sharing our ongoing progress when we report our fiscal fourth quarter and full year 2026 results in June. Thank you, and have a good day.
Steven Urvan: I want to thank you for participating in today's call and for your interest in Outdoor Holding Company. We look forward to sharing our ongoing progress when we report our fiscal fourth quarter and full year 2026 results in June. Thank you, and have a good day.
Speaker #2: I want to thank you for today's call and for your interest in Outdoor.
Speaker #2: I want to thank you for today's call and for your interest in Outdoor. I look forward to—
Speaker #2: I want to thank you for today's call and for your interest in Outdoor. I look forward to sharing company updates. We will ongoing share our progress when we report.
Speaker #2: Our fiscal question: fourth answer, quarter and full year 2026 results in June. Back over. Thank you and good—have a—participating in.
Operator 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker #1: Good conference is now concluded. Thank you for attending. Today's May now presentation, you—
