No Civil Penalty or Monetary Sanction Imposed Atlanta, GA., Dec. 16, 2025 (GLOBE NEWSWIRE) -- Outdoor Holding Company (Nasdaq: POWW, POWWP) (“OHC,” “we,” “us,” “our” or the “Company”), the owner of GunBroker.com, the largest online marketplace for firearms, hunting and related products, today announced that it has reached a settlement with the U.S. Securities and Exchange Commission (“SEC”) to resolve its previously disclosed investigation. “We are pleased to have reached a resolution with the SEC which doe ...

Core Viewpoint - Outdoor Holding Company, listed as NASDAQ:POWW, operates in the ammunition and outdoor products industry, previously known as AMMO, Inc. The company faces significant challenges in generating returns above its cost of capital compared to its competitors [1][5]. Financial Metrics - The Return on Invested Capital (ROIC) for Outdoor Holding Company is -18.08%, which is substantially lower than its Weighted Average Cost of Capital (WACC) of 9.34%, resulting in a ROIC to WACC ratio of -1.93 [2][5]. - In contrast, Smith & Wesson Brands, Inc. has a ROIC of 3.07% and a WACC of 7.53%, leading to a ROIC to WACC ratio of 0.41, indicating better capital efficiency [3][5]. - Vista Outdoor Inc. demonstrates a ROIC of 4.84% and a WACC of 7.00%, achieving the highest efficiency among peers with a ROIC to WACC ratio of 0.69 [3][5]. Peer Comparison - American Outdoor Brands, Inc. and Sportsman's Warehouse Holdings, Inc. have negative ROIC to WACC ratios of -0.47 and -0.78, respectively, but these figures are less severe than Outdoor Holding Company's -1.93 [4][5]. - Sturm, Ruger & Company, Inc. has a positive ROIC to WACC ratio of 0.15, indicating some level of efficiency in generating returns above its cost of capital [4].

Outdoor Holding Company, listed as NASDAQ:POWW, operates in the competitive firearms and ammunition industry. This sector includes notable companies such as Smith & Wesson Brands, Inc. (SWBI), Vista Outdoor Inc. (VSTO), American Outdoor Brands, Inc. (AOUT), Sturm, Ruger & Company, Inc. (RGR), and Sportsman's Warehouse Holdings, Inc. (SPWH).Outdoor Holding Company has a Return on Invested Capital (ROIC) of -18.08%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 9.41%. This n ...

Financial Data and Key Metrics Changes - Net sales for the quarter were just under $12 million, essentially flat year over year, outperforming broader trends in the firearm market and overall consumer spending [5][10] - Gross margin increased by 22 basis points to 87.1% [5][10] - Net income from continuing operations was $1,405,000 compared to a loss of $5,868,000 in the same period last year, translating to earnings per share of one penny versus a loss of five cents [7][10] - Adjusted EBITDA improved by 24% to $4.9 million from $3.9 million in the prior year [8][11] - Cash generated from operations was $2.3 million during the quarter, with cash on hand at approximately $65.7 million [8][11] Business Line Data and Key Metrics Changes - Firearm sales on gunbroker.com increased by over 3%, while adjusted NIX were down over 5% [9][18] - Gross merchandise value (GMV) for firearms increased by 1.2%, driven by a 7.8% increase in used firearms [9][10] - Total GMV decreased by 1.2% to $189 million, but total revenue for the quarter was slightly up at $11,984,000 [9][10] Market Data and Key Metrics Changes - The company’s adjusted share of NIX increased by 50 basis points to 6% [9] - The overall firearm market saw a decline, but the company managed to gain market share [18] Company Strategy and Development Direction - The company aims to be a streamlined e-commerce marketplace operator, focusing on cost efficiencies and improving user experience on gunbroker.com [5][12] - There is a commitment to exploring methods to increase shareholder value through cost reduction and enhancing the user experience [15] - The relocation of corporate headquarters back to Atlanta is expected to result in a modest reduction in headcount and eliminate the Arizona footprint [13][14] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the current trends and the benefits of a more efficient operating model [12] - The company anticipates that financial performance will remain uneven until ongoing litigation is resolved [14] - There is a focus on improving the buyer experience and seller support on the gunbroker.com platform [19][20] Other Important Information - The company qualified as a smaller reporting company, which will affect the scope of financial reporting disclosures [11][12] - The company intends to use part of its cash balance for share repurchases [11] Q&A Session Summary Question: Market share performance relative to peers - Management indicated that while adjusted NIX were down 5%, firearm sales increased 3%, suggesting market share gains [18] Question: Changes in strategy and improvements to the gun broker site - Management emphasized ongoing improvements to the buyer experience and seller support, with a focus on using AI to streamline processes [19][20] Question: Sustainability of operating expenses - Management believes there is still significant room for further cost reductions, indicating that current improvements are just the beginning [22] Question: Consumer trends in firearms demand - Management noted that used firearms have a high sell-through rate, and the challenge lies in getting more used items listed [26][27] Question: Potential for profitability and EBITDA targets - Management expressed confidence in exceeding the previously set EBITDA target of $25 million over time, driven by revenue growth and continued cost-saving measures [33]

Core Insights - Outdoor Holding Company reported its financial results for the second fiscal quarter ended September 30, 2025, highlighting a strategic transformation that is yielding positive outcomes [1][4]. Financial Highlights - Net revenues for the second quarter remained stable at $11.98 million, showing no significant year-over-year change [6][7]. - Gross margin improved to 87.1%, up from 86.9%, indicating enhanced operational efficiency and a higher mix of premium seller services [6][7]. - Operating expenses decreased by $6.71 million year-over-year, reflecting the company's cost discipline and transition to an asset-light model [6][7]. - The company achieved a net income from continuing operations of $1.40 million, a significant turnaround from a net loss of $5.87 million in the previous year [6][7][9]. - Adjusted EBITDA rose to $4.91 million, compared to $3.95 million in the prior year [6][9]. Operational Highlights - The company completed the divestiture of its ammunition manufacturing division and finalized its rebranding, focusing solely on its e-commerce marketplace, GunBroker.com [4][11]. - Key marketplace performance indicators showed resilience, with firearm GMV increasing by 1.2% despite a 1.1% decrease in total GMV [15]. - The company introduced several platform upgrades aimed at enhancing user engagement and satisfaction, contributing to higher average order values and improved seller retention [8][15]. Strategic Focus - Management emphasized a disciplined strategy centered around operational efficiency, margin expansion, and digital innovation to capture growth opportunities [4][5][10]. - The company is well-positioned to leverage its strengthened balance sheet and platform investments for sustained value creation for shareholders [10].

Financial Performance - Net revenues for the second quarter of fiscal 2026 were $11.98 million, flat year-over-year [5]. - Net income from continuing operations was $1.40 million, compared to a net loss of $5.87 million in the prior year, marking the first quarterly profit after several periods of losses [5]. - Adjusted EBITDA improved to $4.91 million from $3.95 million year-over-year [10]. - Total net revenues for the three months ended September 30, 2025, were $11,984,314, slightly up from $11,983,021 in the same period of 2024 [28]. - Gross profit for the three months ended September 30, 2025, was $10,441,079, compared to $10,413,710 in the prior year, reflecting a marginal increase [28]. - The company reported a net income of $656,217 for the three months ended September 30, 2025, compared to a net loss of $6,650,845 in the same period of 2024 [28]. - The company achieved an adjusted EBITDA of $0.04 for the three months ended September 30, 2025, compared to $0.03 in the same period of 2024 [29]. - Basic income per share from continuing operations was $0.01 for the three months ended September 30, 2025, compared to a loss of $0.06 in the same period of 2024 [28]. - The company reported a gain on the extinguishment of debt amounting to $801,894 for the three months ended September 30, 2025 [28]. Cost Management - Operating expenses decreased by $6.71 million year-over-year, reflecting improved cost discipline [8]. - Operating expenses for the three months ended September 30, 2025, totaled $9,734,055, down from $16,439,324 in the same period of 2024, indicating a significant reduction [28]. - Management remains focused on cost efficiency, disciplined capital allocation, and organic marketplace growth [11]. Financial Position - The company ended the quarter with over $65.67 million in cash and cash equivalents, up from $63.36 million as of June 30, 2025 [10]. - Total current assets increased to $78,301,114 as of September 30, 2025, from $72,148,138 as of March 31, 2025 [26]. - Total liabilities decreased to $34,857,771 as of September 30, 2025, down from $75,303,066 as of March 31, 2025, showing improved financial health [26]. - Shareholders' equity rose to $235,415,672 as of September 30, 2025, compared to $222,026,563 as of March 31, 2025, indicating growth in company value [26]. Sales Performance - Firearm sales increased by over 3% despite a 5% decline in adjusted NICS checks compared to the same period last year [12]. - Total gross merchandise value (GMV) decreased by 1.1%, but firearm GMV increased by 1.2%, driven by a 7.8% increase in used firearm sales [12]. Compliance and Governance - The company has regained full compliance with Nasdaq Continued Listing Rules [5].

Financial Performance - Total net revenues for the three months ended September 30, 2025, were $11,984,314, slightly up from $11,983,021 in the same period of 2024[12] - Gross profit for the six months ended September 30, 2025, was $20,776,057, compared to $20,950,911 for the same period in 2024, reflecting a decrease of approximately 0.83%[12] - The company reported a net income of $656,217 for the three months ended September 30, 2025, compared to a net loss of $13,210,753 in the same period of 2024[12] - Operating expenses for the three months ended September 30, 2025, were $9,734,055, down from $16,439,324 in the same period of 2024, a decrease of approximately 41.1%[12] - For the six months ended September 30, 2025, the net loss was $5,053,499 compared to a net loss of $27,188,088 for the same period in 2024[19] - The company reported a net cash provided by operating activities of $(3,452,435) for the six months ended September 30, 2025, compared to $1,071,053 for the same period in 2024[19] - The company reported a gain on the extinguishment of debt amounting to $801,894 for the three months ended September 30, 2025[12] - The company reported a gain on the extinguishment of debt amounting to $801,894 for the six months ended September 30, 2025[19] - The effective tax rate for the three and six months ended September 30, 2025, was 0.0%, primarily due to a full valuation allowance against deferred tax assets[112] Assets and Liabilities - Total current assets increased to $78,301,114 as of September 30, 2025, from $72,148,138 as of March 31, 2025, representing an increase of approximately 8.9%[9] - Total liabilities decreased to $34,857,771 as of September 30, 2025, down from $75,303,066 as of March 31, 2025, indicating a reduction of approximately 53.7%[9] - The company’s total shareholders' equity increased to $235,415,672 as of September 30, 2025, compared to $222,026,563 as of March 31, 2025, reflecting an increase of about 6%[9] - The company’s accumulated deficit increased to $(210,438,277) as of September 30, 2025, compared to $(203,862,034) as of March 31, 2025[9] - Net accounts receivable as of September 30, 2025, was $8,855,910, down from $10,189,011 as of March 31, 2025[78] - Total property and equipment as of September 30, 2025, was $10,684,936, with accumulated depreciation of $3,685,401[79] - Accrued liabilities decreased significantly from $37,413,636 as of March 31, 2025, to $6,729,316 as of September 30, 2025[81] Cash Flow and Investments - Cash flow from investing activities showed a net cash provided of $41,899,318 for the six months ended September 30, 2025, while it was $(2,046,157) for the same period in 2024[19] - The company had a cash balance of $65,669,937 at the end of the period on September 30, 2025, compared to $33,525,409 at the end of the same period in 2024[19] - The total cash at the end of the period was $65,669,937, up from $30,227,796 at the beginning of the period[19] Shareholder Information - Basic income per share from continuing operations was $0.01 for the three months ended September 30, 2025, compared to a loss of $0.06 in the same period of 2024[12] - The weighted average number of shares outstanding for basic income was 117,110,827 for the three months ended September 30, 2025[12] - The net loss attributable to common stockholders for the six months ended September 30, 2025, was $28,744,861, compared to a net loss of $6,576,242 for the same period in 2024[69] - The company repurchased common shares totaling $171,200 during the six months ended September 30, 2025, compared to $460,661 in the same period of 2024[19] Discontinued Operations - The company completed the sale of its Ammunition segment assets for $75 million on April 18, 2025, which is classified as discontinued operations[35] - The Ammunition segment reported net revenues of $752,762 for the six months ended September 30, 2025, significantly down from $38,108,123 for the same period in 2024[74] - The loss from discontinued operations before income taxes for the six months ended September 30, 2025, was $10,883,781, compared to a loss of $6,559,908 for the same period in 2024[74] - The company experienced a loss from discontinued operations of $595,634 for the six months ended September 30, 2025, compared to $9,322,858 in the prior year[19] Stock-Based Compensation - Stock-based compensation for the six months ended September 30, 2025, was $787,826, down from $2,623,031 in the same period of 2024[19] - The company recognized stock-based compensation on a straight-line basis over the vesting periods, measured based on the grant-date fair value of the award[57] - The company granted 377,498 stock awards during the six months ended September 30, 2025, with a value per share of $2.02, while 426,027 shares vested[106] Debt and Financing - The company issued $51 million in notes payable related to a litigation settlement, with a discount of $28,891,590 on those notes[21] - The company issued a $12.0 million unsecured promissory note with an interest rate of 6.50% per annum, due on May 30, 2037[121] - An additional $39.0 million unsecured promissory note was issued with an interest rate of 4.62% per annum, due on May 30, 2035[126] - The company recorded interest expense of $327,820 on the $12.0 million note for the six months ended September 30, 2025[123] - The Company entered into a Revolving Loan agreement with a principal amount of up to $20.0 million, with proceeds usable for working capital and general corporate purposes[132] - As of September 30, 2025, the Company had no outstanding balance on the Revolving Loan[139] Regulatory and Compliance - The SEC Investigation may lead to potential enforcement actions regarding share-based compensation and other disclosures, with no current estimate of loss available[147] - The company is currently evaluating the potential impact of new accounting standards on its consolidated financial statements and disclosures[63] - The company utilizes U.S. GAAP for financial reporting, with all amounts expressed in U.S. dollars[30] - Income taxes are accounted for under the asset and liability method in accordance with ASC 740, including federal, state, and local income taxes currently payable, and deferred taxes[59]

Core Viewpoint - POWW's MSCI ESG rating has been downgraded from BBB to B as of November 4, 2025, indicating a significant decline in its environmental, social, and governance performance [1] Group 1 - The downgrade reflects a negative shift in the company's ESG practices and overall sustainability efforts [1] - MSCI ESG ratings are crucial for investors focusing on sustainable and responsible investment strategies [1]

Core Viewpoint - Outdoor Holding Company, owner of GunBroker.com, will release its financial results for Q2 of the 2026 fiscal year on November 10, 2025 [1]. Group 1: Financial Results Announcement - The financial results will be announced premarket on November 10, 2025 [1]. - A conference call will be held at 9:00 AM ET on the same day to review the financial results and provide updates on corporate developments [2]. - Participants are encouraged to preregister for the call to receive their dial-in number [2][3]. Group 2: Company Overview - Outdoor Holding Company is headquartered in Atlanta, Georgia, and operates subsidiaries that serve outdoor enthusiasts, including GunBroker [4]. - GunBroker.com is the largest online marketplace for firearms, hunting, and related products, facilitating sales through third-party sellers [5]. - The platform promotes responsible ownership of firearms and adheres to federal and state laws regarding the sale of firearms and restricted items [5].

Core Points - Outdoor Holding Company has relocated its corporate headquarters from Scottsdale, Arizona to Atlanta, Georgia to reduce corporate overhead and control indirect costs [1][2] - The relocation is aimed at improving cultural cohesion and corporate efficiencies while striving to grow Adjusted EBITDA over the next 12-18 months [2] - The move will result in a modest headcount reduction, with remaining Arizona-based team members shifting to remote work [2] Company Overview - Outdoor Holding Company is a publicly traded corporation that owns and operates subsidiaries serving outdoor enthusiasts, including GunBroker.com, the largest online marketplace for firearms and related products [3] - GunBroker.com, launched in 1999, serves as a secure platform for third-party sellers to list firearms, ammunition, and related gear, promoting responsible ownership of firearms [4]