AMMO(POWW) - 2026 Q1 - Quarterly Results

First Quarter Fiscal 2026 Financial Results Overview Outdoor Holding Company (OHC) reported Q1 FY2026 results, highlighting a strategic shift to GunBroker.com after divesting its ammunition division, focusing on efficiency and growth Company Overview and Strategic Context OHC, formerly AMMO, Inc., transitioned to focus solely on its GunBroker.com e-commerce marketplace after divesting its ammunition manufacturing division, emphasizing operational efficiency and growth - Outdoor Holding Company (Nasdaq: POWW, POWWP) is the owner of GunBroker.com, the largest online marketplace for firearms, hunting, and related products[2] - The company completed the sale of its ammunition manufacturing division and rebranded to Outdoor Holding Company, now singularly focused on scaling its e-commerce marketplace platform, GunBroker.com[5] - Chairman and CEO Steve Urvan stated the first quarter marks a turning point to aggressively reshape the business, focusing on operational efficiency, core marketplace growth, and disciplined capital allocation[5] Financial Highlights (Q1 FY2026 vs. Q1 FY2025) OHC reported a slight decrease in net revenues but significantly narrowed its net loss from continuing operations, with improved gross profit margin and decreased operating expenses Q1 Fiscal 2026 Financial Highlights (vs. Q1 Fiscal 2025) | Metric | Q1 FY2026 | Q1 FY2025 | | :-------------------------------- | :-------- | :-------- | | Net Revenues ($ million) | $11.9 million | $12.3 million | | Cost of Revenues ($ million) | $1.5 million | $1.7 million | | Gross Profit Margin (%) | 87.2% | 85.8% | | Operating Expenses ($ million) | Decreased $0.4 million | | | Net Loss from Continuing Operations ($ million) | ($5.9) million | ($12.0) million | | Diluted LPS from Continuing Operations ($) | ($0.06) | ($0.11) | | Adjusted EBITDA ($ million) | $3.1 million | $4.1 million | | Adjusted EPS ($) | $0.02 | $0.03 | Operational Highlights (Q1 FY2026 vs. Q1 FY2025) OHC achieved key operational milestones including the ammunition division sale and corporate rebranding, while GunBroker.com showed momentum with increased listings, users, and average order value - Key operational achievements include closing the ammunition division sale to Olin-Winchester, entering a settlement agreement for Delaware litigation, appointing Steve Urvan as Chairman and CEO, and completing rebranding from AMMO, Inc. to Outdoor Holding Company[6] - Marketplace performance indicators showed continued momentum with increased active listings, registered GunBroker user accounts (8.5 million, a new high), and an increased Average Order Value from $425 to $444 per order[6][12] - Platform upgrades included search functionality improvements, enhanced seller programs and analytics, and refinement of buyer personalization algorithms, contributing to higher average order values and better buyer satisfaction scores[8] Detailed Financial Performance The company's detailed financial statements reflect a significant reduction in net loss, a substantial increase in cash, and the reclassification of the ammunition business as discontinued operations CONSOLIDATED STATEMENTS OF OPERATIONS The consolidated statements show a net loss attributable to common stock shareholders of ($7.2) million for Q1 FY2026, a notable improvement from ($15.5) million in Q1 FY2025 Consolidated Statements of Operations (Three Months Ended June 30) | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | | :------------------------------------- | :---------- | :---------- | | Net revenues | $11,857,376 | $12,281,991 | | Cost of revenues | $1,522,398 | $1,744,790 | | Gross Profit | $10,334,978 | $10,537,201 | | Total operating expenses | $16,345,653 | $16,772,566 | | Loss from Operations | ($6,010,675) | ($6,235,365) | | Net loss from continuing operations | ($5,862,693) | ($11,997,025) | | Loss from discontinued operations, net of tax | ($595,634) | ($2,762,950) | | Net loss attributable to common stock shareholders | ($7,232,459) | ($15,534,107) | | Basic loss per share of common stock (Total) | ($0.06) | ($0.13) | | Diluted loss per share of common stock (Total) | ($0.06) | ($0.13) | CONSOLIDATED BALANCE SHEETS As of June 30, 2025, cash and cash equivalents significantly increased to over $63 million, while total assets and liabilities decreased due to the divestiture of discontinued operations Consolidated Balance Sheets (As of June 30, 2025 vs. March 31, 2025) | Metric | June 30, 2025 ($) | March 31, 2025 ($) | | :-------------------------------- | :------------ | :------------- | | Cash and cash equivalents | $63,363,812 | $30,227,796 | | Current assets - discontinued operations | - | $30,497,720 | | Total Current Assets | $74,486,175 | $72,148,138 | | Noncurrent assets - discontinued operations | - | $27,392,642 | | TOTAL ASSETS | $269,467,322 | $297,329,629 | | Current liabilities - discontinued operations | - | $6,080,182 | | Total Current Liabilities | $22,725,627 | $62,092,917 | | Noncurrent liabilities - discontinued operations | - | $10,564,816 | | Total Liabilities | $46,961,667 | $75,303,066 | | Total Shareholders' Equity | $222,505,655 | $222,026,563 | - The company ended the quarter with a strong liquidity position, with over $63 million in cash, providing a stable financial foundation to reinvest in growth[10] Discontinued Operations In April 2025, Outdoor Holding Company completed the sale of its ammunition manufacturing business. The financial results of this segment are now presented as discontinued operations in the consolidated statements for all periods shown, and related assets and liabilities are reflected accordingly - In April 2025, the Company completed the sale of all assets of its ammunition manufacturing business[13] - The results of the Ammunition segment are presented as discontinued operations in the consolidated statements of operations for all periods presented, with prior periods adjusted to conform[14] Non-GAAP Financial Measures Non-GAAP measures like Adjusted EBITDA and Adjusted EPS are presented to provide additional insights into the company's operational performance, excluding certain non-cash and non-recurring items Adjusted EBITDA Definition and Rationale Adjusted EBITDA is a non-GAAP measure used to evaluate operational performance by excluding specific non-cash, non-recurring, or non-operating items, aiding management in strategic decisions - Adjusted EBITDA is a non-GAAP financial measure used to evaluate operational performance, produce future strategies, and make strategic decisions, providing useful information to investors[19] - Adjusted EBITDA is defined as net income (loss) from continuing operations excluding provision for income taxes, depreciation and amortization, interest expense, share-based compensation, other income (expense), acquisition/divestiture expenses, professional/legal fees related to investigations/litigation, and other nonrecurring expenses[22] - Limitations of non-GAAP measures include not reflecting significant recurring share-based compensation, cash capital expenditure requirements, changes in working capital needs, and potential incomparability with other companies' metrics[24] Adjusted EBITDA Reconciliation Adjusted EBITDA for Q1 FY2026 was $3.1 million, a decrease from $4.1 million in Q1 FY2025, primarily due to a lower net loss from continuing operations offset by reduced prior-year adjustments Reconciliation of GAAP Net Loss from Continuing Operations to Adjusted EBITDA (Three Months Ended June 30) | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | | :------------------------------------------ | :---------- | :---------- | | Net loss from continuing operations | ($5,862,693) | ($11,997,025) | | Provision for income taxes | — | $5,968,414 | | Depreciation and amortization | $3,510,021 | $3,345,804 | | Interest expense, net | $348,330 | $45,478 | | Share-based compensation | $787,826 | $1,436,038 | | Other income (expense), net | ($496,312) | ($252,232) | | Acquisitions and divestitures | $79,398 | — | | Special Committee Investigation and restatement | $1,304,908 | — | | SEC Investigation | $676,080 | $1,588,809 | | Delaware Litigation legal and professional fees | $1,354,864 | $679,119 | | Corporate restructuring costs | $1,435,693 | — | | Other nonrecurring expenses | — | $3,299,933 | | Adjusted EBITDA | $3,138,115 | $4,114,338 | Adjusted EPS Reconciliation Adjusted EPS decreased from $0.03 in Q1 FY2025 to $0.02 in Q1 FY2026, reflecting the impact of various adjustments including prior-year income taxes and current legal/restructuring costs Reconciliation of GAAP Net Loss to Fully Diluted EPS (Three Months Ended June 30) | Metric | Q1 FY2026 ($) | Q1 FY2025 ($) | | :------------------------------------------ | :-------- | :-------- | | Net loss from continuing operations | ($0.06) | ($0.11) | | Provision for income taxes | - | $0.05 | | Depreciation and amortization | $0.03 | $0.03 | | Interest expense, net | $0.00 | $0.00 | | Stock based compensation | $0.01 | $0.01 | | Other income (expense), net | ($0.00) | ($0.00) | | Acquisitions and divestitures | $0.00 | - | | Special Committee Investigation and restatement | $0.01 | - | | SEC Investigation | $0.01 | $0.01 | | Delaware Litigation legal and professional fees | $0.01 | $0.01 | | Corporate restructuring costs | $0.01 | - | | Other nonrecurring expenses | - | $0.03 | | Adjusted EBITDA (per share) | $0.02 | $0.03 | Chairman and CEO Letter to Stockholders The CEO's letter outlines a strategic transformation to a focused e-commerce marketplace, highlighting financial improvements, operational enhancements, and key initiatives for fiscal 2026 Strategic Direction and Business Transformation CEO Steve Urvan announced a 'new era' for OHC, transitioning to a streamlined e-commerce marketplace operator (GunBroker.com) after the ammunition division sale and resolving past challenges - The first quarter of fiscal 2026 represents a turning point, transitioning to a streamlined, focused e-commerce marketplace operator with the successful sale of the ammunition division and new corporate identity[33] - The company is now singularly focused on GunBroker.com and has closed a challenging chapter involving litigation, internal investigations, delayed financial filings, and regulatory reviews[34] - Nasdaq listing standards compliance has been restored, with financial reporting current and full compliance expected after the annual meeting on August 29th[35] Financial Performance and Outlook from CEO The CEO highlighted stable net revenue and an impressive gross margin of 87.2% for Q1 FY2026, with net loss cut in half and Adjusted EBITDA at $3.1 million. He acknowledged ongoing SG&A challenges and significant legal/compliance costs but expects these to abate within 12-18 months. The company targets a $25 million Adjusted EBITDA run rate within 18 months, even with flat revenue, and aims to maximize free cash flow with no income tax liability for several years due to a substantial Net Operating Loss (NOL) - Q1 FY2026 saw stable net revenue of almost $12 million, gross margin expanding to 87.2%, net loss cut in half to ($5.9) million, and Adjusted EBITDA of $3.1 million[36] - The company is executing an ambitious restructuring to drive meaningful reductions in SG&A, expecting improved Adjusted EBITDA and cash flow[36] - Significant and debilitating legal and compliance costs are a drag on corporate operating expenses but are largely a short-term aberration, expected to abate within 12-18 months[40] - The CEO believes Outdoor Holding Company will achieve a $25 million Adjusted EBITDA run rate within 18 months, even with relatively flat revenue, and expects no income tax liability for a few years due to a substantial Net Operating Loss (NOL)[41] Operational Performance and Platform Enhancements The CEO affirmed GunBroker.com's position as the dominant technology player in the firearms space, maintaining market share despite industry-wide demand fluctuations. Operational performance remains strong, with increases in listings and registered users, and ongoing enhancements to buyer personalization, seller tools, and search functionality are expected to boost conversion rates and customer satisfaction - GunBroker.com continues to be the dominant technology player in the firearms space, maintaining market share despite industry-wide demand surges and weaker periods[38] - GunBroker's operational performance remains strong, with increases in listings and registered users, reflecting improved seller engagement and platform visibility[42] - Enhancements in buyer personalization, seller tools, and search functionality are expected to result in stronger conversion rates, higher average order values, and improved customer satisfaction[42] Key Strategic Initiatives for Fiscal 2026 For the remainder of fiscal 2026, OHC's strategy is focused on unlocking stockholder value and growing the GunBroker ecosystem through four key initiatives: launching universal payment processing, considering share repurchases, advancing restructuring for cost reduction, and implementing further user experience enhancements - Key strategic initiatives for fiscal 2026 include launching universal payment processing to increase GMV and user adoption, considering share repurchases (subject to Board approval), advancing restructuring efforts for cost reduction, and implementing user enhancements for best-in-class buyer and seller experiences[47] Additional Information This section provides details about Outdoor Holding Company, cautionary statements regarding forward-looking information, and investor contact details About Outdoor Holding Company Outdoor Holding Company is the publicly traded parent and operator of GunBroker.com, an online marketplace for firearms, hunting, shooting, and related products. Launched in 1999, GunBroker.com facilitates secure buying and selling, adhering to federal and state laws by using licensed firearms dealers as transfer agents, and promotes responsible gun ownership - Outdoor Holding Company operates GunBroker.com, the largest online marketplace dedicated to firearms, hunting, shooting, and related products[15] - GunBroker.com, launched in 1999, is an informative, secure, and safe platform that uses licensed firearms dealers as transfer agents to comply with federal and state laws, promoting responsible gun ownership[15] Cautionary Statement Concerning Forward-Looking Statements The report contains forward-looking statements, identifiable by specific terminology, which are based on management's current beliefs and expectations. These statements are subject to inherent uncertainties, risks, and changes in circumstances that could cause actual results to differ materially, and investors are advised not to rely on them and to review risk factors in SEC filings. The company disclaims any obligation to update these statements - Forward-looking statements are identified by words like 'target,' 'believe,' 'expect,' and 'will,' and relate to future events or trends, based on management's current beliefs and assumptions[16][46] - These statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and outside the Company's control, including maintaining e-commerce business, introducing new features, retaining customers, impact of lawsuits, and adverse economic conditions[16][46] - Investors should not rely on forward-looking statements and should review risk factors in the Company's Annual Report on Form 10-K; the Company disclaims any obligation to update them[16][46] Contacts Investor relations contact information for Outdoor Holding Company is provided through CoreIR - Investor relations contact: CoreIR, Phone: (212) 655-0924, Email: IR@outdoorholding.com[17]