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Ammo Q2 2025 Earnings Report
Outdoor Holding Company reported a decrease in net revenues and net loss for the three months ended September 30, 2024, compared to the same period last year, primarily due to changes in market demand and pricing in its ammunition division.
Key Takeaways
Outdoor Holding Company experienced a decrease in net revenues by 8.6% to $31.4 million for the three months ended September 30, 2024, compared to $34.4 million in the prior year. The company reported a net loss of $12.4 million, an increase from a net loss of $7.7 million in the same period last year. This decline was mainly driven by decreased revenue in both the ammunition and marketplace segments, coupled with increased operating expenses.
Net revenues decreased by 8.6% for the three months ended September 30, 2024, primarily due to changes in market demand and pricing in the ammunition division.
The company reported a net loss of $12.4 million for the current quarter, compared to a net loss of $7.7 million in the prior year, indicating a significant increase in losses.
Gross profit decreased to $7.2 million from $8.3 million in the prior year, with gross margin percentage declining to 23.0% from 24.1%.
Operating expenses increased by approximately $2.4 million, reaching $19.7 million, primarily due to higher legal fees and professional fees related to manufacturing efficiencies.
Ammo
Ammo
Forward Guidance
The company aims to improve gross margins and expand distribution for its Ammunition segment, focusing on higher-margin products and operational efficiencies. They also plan to enhance the GunBroker platform by increasing take rates and expanding services.
Positive Outlook
- Capacity improvements at the Manitowoc, WI facility and expansion of rifle casing and loading lines.
- Increased product sales of proprietary and flagship lines of ammunition, which carry higher margins.
- Introduction of new lines of ammunition with higher margins in consumer and government sectors.
- Reduced component costs through insourced operations and strategic relationships with component providers.
- Enhancing the multi-item cart and related payment processing to increase take rates across the platform.
Challenges Ahead
- Potential for material, noncash impairment of goodwill for the year ending March 31, 2025, due to declines in common stock value and market capitalization.
- Ongoing legal proceedings, including the Urvan Lawsuit and MN Action, which could result in significant damages or settlements.
- Uncertainty regarding the outcome and scope of the SEC Investigation, which may lead to civil enforcement actions and penalties.
- The long sales cycle for U.S. law enforcement, military, and international markets may delay revenue recognition.
- The company's focus on creating profitability is in contrast to revenue growth, which may limit overall sales expansion.