Outdoor Holding Company Q3 FY2024 earnings call

• Business transition: 2023 was challenging, but AMMO transitioned to a stronger operating model with a strong balance sheet.
• Third quarter results: Generated $5.1 million in cash via inventory reduction, revenues up $1.6 million sequentially, net loss improved to $1.6 million from $7.5 million prior quarter.
• Ammunition division: Strong demand, invested $3.6 million in CapEx projects, rebranding Ammunition portfolio with new lines like HUNT, onboarded Chief Compliance and Transformation Officer.
• GunBroker.com: Marketplace continued upward trend, cart platform on track to launch April 1, successful payment processing test, with future evolutions planned.

Ammunition Segment: Third quarter total revenues were approximately $36 million, down from $38.7 million in the prior year quarter. Casing sales increased to $4.7 million from $3 million in the prior year period. Cost of goods sold was $25.1 million compared to $26.2 million in the prior year quarter. Gross margins were $10.9 million (30.3%) compared to $12.5 million (32.4%) in the prior year period. GunBroker.com Marketplace Segment: Marketplace revenue was $14 million for the reported quarter, down from $15.4 million in the prior year quarter, impacted by macroeconomic environment.

• Expect to return to profitability during the 2025 fiscal year.
• Cart platform on or before April 1.
• Rifle brass production expected to accelerate in fiscal 2025.

• Forward-looking statements involve risks and factors that may cause actual results to differ materially, as per SEC filings and company disclosures.

Q: Talk about drivers of brass revenue in the quarter, why it fell QoQ and where it's headed.

A: Brass came back online in November but held back some for internal loading. Production capacity increasing, strong pipeline, with positive trends ahead.

Q: Levers to get AMMO business gross margin positive in Q4.

A: Building out brass lines, price trends, large contract with zero delta on 50 cal, 12.7 X 108 line providing margin play, confident in breakeven or positive margins in Q4 or Q1 2025.

Q: Why GunBroker GMV didn't pick up as much as mix.

A: Abundance of guns on shelf led to less traffic to GunBroker, but positive trends continue with enhanced checkout features to drive growth.

Q: Last hurdles for GunBroker payments and carting initiative by April 1.

A: Just need a few more weeks of testing, ensuring successful rollout with no major impediments.

Q: Details on recent contract, margin, and proprietary ammo sales.

A: 40% margin on 6 million piece contract, proprietary ammo sales improved due to rebranding, stronger sales team, and healthier pricing.

Q: Ammo margin, propellant constraints, and contract business outlook.

A: Propellant constraint impacts, margin creation from building rifle production capacity, solid contract business outlook with proof of performance needed before larger contracts.