Outdoor Holding Company (POWW) 2022 Q4 法說會逐字稿

Greetings and welcome to fiscal fourth-quarter 2022 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Reed Anderson, of ICR. Thank you, Reed. You may begin.

Thank you. Good afternoon and welcome to AMMO, Inc's conference call to discuss results for the fourth quarter and full year, fiscal 2022. On the call today from AMMO Inc, with prepared remarks are Fred Wagenhals, Chairman and Chief Executive Officer; Rob Goodmanson, President; and Rob Wiley, Chief Financial Officer.

By now, everyone should have access to the earnings release which went out this afternoon at approximately 4:05 PM, Eastern time. If you have not received the release, it is available on the Investor Relations portion of AMMO Inc's website at www.ammoinc.com. This call is being webcast and a replay will be available on the company's website as well.

Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. These statements are based on current expectations of the company's management, and involve inherent risks and uncertainties, including those identified in the risk factors section of AMMO Inc's most recently filed forms 10K and 10Q.

Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into AMMO Inc's ongoing results of operations, particularly when comparing underlying operating results from period to period. We've included a reconciliation of these non-GAAP measures with today's release.

This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, June 29, 2022. AMMO Inc. assumes no obligation to update any forward-looking projections that may be made in today's release or call.

Now I will turn the call over to Fred Wagenhals, Chairman and Chief Executive Officer of AMMO, Inc.

Thank you, Reed, and good afternoon to everyone on the call. Fiscal 2022 was a banner year for AMMO, far exceeding even our highest expectations. Revenue, which reached $240.3 million, we're up an incredible 285% from fiscal 2021. And we generated nearly $76 million in adjusted EBITDA and $0.53 in adjusted EPS for the year. We did all of this with COVID, cramped working space, the move from Payson to Manitowoc, and the supply chain issues.

The acquisitions and the integrations of GunBroker.com marketplace platform has also proven to be transformational for the company's business model. And we are only beginning to introduce several initiatives to further leverage profitability on the $1.8 billion, that's billion with a B in transactional volume on the platform in the past year. Over the past five years, we have grown AMMO from $2 million in revenue in 2018 to what we expect to be more than $300 million in revenues in the fiscal 2023.

In light of this spectacular growth, I would like to focus on why we remain confident that AMMO remains well positioned to double its market share over the past two to three years. First, we are at capacity in our current facility, delivering 400 million rounds of loaded ammunition this past year, that has caused us to build our new 160,000 square foot world-class facilities where we expect to increase our capacity to 1 billion rounds once fully operational. This gives us significant opportunity to increase revenue, drive down manufacturing costs and improve margins.

Next, our marketplace platform, GunBroker.com was fully integrated in 2022, and we are now rolling out a number of initiatives to capture a significantly greater percentage of the transactional volume from that platform, including credit card processing, credit products, gift card and loyalty programs for both the buyer and the seller.

Finally, AMMO continues to make great progress in our military programs division. Primarily with the support of our US Special Forces, we have entered into the last stage of our procurement path on our BMMPR program and are continuing to move through the development of our Signature-on-Target program.

We started AMMO in 2017 with the goal of integrating technology into the ammunition industry. And by all measures, we have succeeded in doing so judging by our financial performance over the past fiscal year. However, we continue to believe and to operate as if we are still early in our growth curve. There remains multiple opportunities to substantially grow revenue, enhance margins and drive shareholder value. And we intend to continue to capitalize on those opportunities and look forward to updating our progress to shareholders at the appropriate moment.

With that, I'd like to turn the call over to our President, Rob Goodmanson, to provide more detail on the operational performances for this quarter.

Thanks, Fred. And thank you all for being on our annual earnings call. This has indeed been an exciting year, full of enormous business opportunities and interesting challenges. We would never have been able to execute upon these opportunities so effectively, but for our stellar team, Fred and our entire management team put together. Our incredible successes fall squarely on their shoulders.

I would now like to announce our forecast for fiscal 2023. $300 million to $310 million in revenues; $82 million to $85 million in EBITDA; and $108 million to $111 million in adjusted EBITDA for fiscal 2023. Being successful in predicting the future, is best done by looking back at the past successes and the historic track record. Growing from $2 million to $240 million in sales in five years speaks for itself.

I'd like to take a few moments now to expand upon Fred's comments and talk about certain company initiatives at AMMO and at GunBroker.com. Obviously, we're anxious to get into our new Manitowoc, Wisconsin manufacturing facility, slated to open in just over two weeks. This facility is just around the corner from our current operating building, and is approximately 300% larger than our main production.

In the new plants, we have plan to double our output capacity of loaded ammunition over time through the deployment of new equipment, which is currently owned, expand our manufacturing automation, and better leverage our production team in their newly consolidated buildings.

We are also adding cart capabilities for GunBroker.com. Currently, our 7.3 million registered users could only purchase one item at a time. Soon, they will have the ability to purchase multiple accessories at one time, including ammunition. GunBroker.com, the largest outdoor website of its kind, which has been around for 22 years, we're making some additional enhancements in conjunction with our auction site.

We are adding new sellers to the platform that will near Amazon, which will drive growth in users and transaction volume. Whether they be manufacturers, dealers, distributors or we function as our online storefront, which will only add to their distribution model. This is a solid concept and is one way to monetize one of GunBroker.com's greatest assets, that being data. No other company in this space has the vast information in a timely manner that shows what is selling, where it's selling, and at what price and price levels, making trend prediction more reliable and accountable, whether you be a store, manufacturer, or distributor, this will be significant for both the sellers and the buyers.

Obviously, our goal with these initiatives is to enhance user experience, whether you're a buyer or seller. We're currently adding new products and product lines to the GunBroker website. It was north of 7.3 million registered users, and adding an average of approximately 55,000 new users on a monthly basis this past year. We strongly believe we will be the preferred destination in this space.

Because of these initiatives with our two businesses, we believe we can double our revenues in both companies over the next 12- to 24-months. Again, to reiterate our forecast, $300 million to $310 million in revenues; $82 million to $85 million in EBITDA, and $108 million to $111 million in adjusted EBITDA for fiscal 2023. And that is a growth story that should be paid attention to.

In closing, I'd like to add that because of our success, it has allowed us to look at many unique opportunities and take advantage of them. Such is our support of the Ukraine war effort, by donating 1 million rounds of ammunition. We're also pleased that some of our competitors, finally followed our lead.

With that, let me turn this over to Rob Wiley, our CFO. Rob?

Thank you, Rob. Welcome, everyone. Let me now review our financial results in more detail. Total net revenues for our fiscal 2020 year increased 285% or $178.1 million over the prior year. This increase was the result of our increased production capacity, coupled with strong demand from our customers, resulting in $107.1 million of additional sales of bulk pistol and rifle ammunition; an increase of $4.7 million in sales of proprietary ammunition; an increase of $1.3 million of sales from our casing operations $64.6 million in revenue generated from our marketplace, GunBroker.com.

Looking forward, we expect the sales growth rate of proprietary ammunition to greatly outpace the sales of our standard ammunition. Our gross profit percentage increased to 36.9% from 18.2% during the year compared to the year period prior. This was a result of the inclusion of our marketplace, GunBroker.com, which by nature, has significantly higher margins than our manufactured products. We believe as we continue to grow sales through new markets and expanded distribution that our gross margins will also increase, as evidenced by the improvement over this time last year.

Our then in the next 12 to 24 months is to continue to improve our gross margins. This will be accomplished through the following: increased product sales, specifically of our proprietary lines of ammunition like discrete visual ammunition, stealth and now the ammunition we have developed in support of our military and government programs, introduction of new lines of ammunition that historically carry higher margins in the consumer and government sectors, reduced component costs through streamlined operation of our ammunition segment and expansion of strategic relationships with component providers, expanded use of automation equipment that reduces the total labor required to assemble finished products, and better leverage of our fixed costs through expanded production to support the sales objectives.

Moving on to operating expenses. Our operating expenses increased by approximately $34.8 million over the prior year. But more importantly, decreased as a percentage of sales from 26.8% in fiscal 2021 to 21.5%, a 25% decrease in the reporting period. The dollar increase was primarily related to approximately $20.6 million of additional operating expenses related to GunBroker.com, including $12.1 million out of $13.7 million noncash depreciation and amortization expenses for the year.

Total non-cash operating expenses were approximately $20.1 million for the year compared to $3.2 million in the prior year. We expect to see operating expenses continue to decrease as a percentage of sales in the 2023 fiscal year, as we leverage our workforce and expand our sales opportunities.

Operating income was $42.5 million for the year, compared to an operating loss of $5.4 million in the year earlier. As a percent of net revenues, operating income was 41.9%, compared to a negative 8.6% a year earlier. A 586% increase. As a result of increases in revenues, and increased production, as well as our acquisition of GunBroker.com, we had a net income of approximately $33.2 million for our fiscal 2022 or $0.27 per diluted share compared with a net loss of approximately $7.8 million for $0.14 per diluted share in fiscal 2021.

Adjusted net income per diluted share was $0.53 versus an adjusted net income per share of $0.7 in the prior year period. Adjusted EBITDA was $75.5 million compared to adjusted EBITDA of $8.1 million in the prior year period. The significant improvement in adjusted EBITDA was due to increased sales and improved gross margins, reflecting growth in our core ammunition segment, plus the addition of our higher-margin marketplace segment. Please note, that adjusted EBITDA is a non-GAAP measure, and you should refer to the reconciliation of our GAAP to non-GAAP results in today's press release for additional details.

To reiterate our performance this past year, our revenues went from $61 million to $240 million. We reported net income of $33.2 million from a net loss of $7.8 million in the prior year period. Our balance sheet remained strong with $23 million of cash and equivalents and essentially no outstanding debt. We are well positioned to make a swift transition into our new facility in just a few weeks. And we are guiding our 2023 fiscal year to revenues of $300 million to $310 million; EBITDA of $82 million to $85 million; and adjusted EBITDA of $108 million to $111 million.

This concludes our prepared remarks. We are now ready to take questions, so I'll pass it back to our moderator. Thank you.

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)

Matt Koranda, ROTH Capital.

Hey, guys. Good afternoon, and thanks for taking the questions. Just wanted to start off with the fiscal 2023 guide on revenue. Maybe if you could just comment on the expectations of the split between GunBroker versus the core ammunition business and the growth rates between the two for the year?

Hi Matt, thanks for the question. So I would expect majority of the growth rate to come from our loaded ammunition operations. We obviously do expect growth in our GunBroker segment as well, but majority of the increase will come from the loaded ammunition and our increased capacity coming from our new facility.

Okay, got you. And then, just on the AMMO business segment, could you maybe just talk about the visibility you have into the year -- in the past, I think you guys have shared some backlog figures. So maybe if you could share any backlog figures that give you confidence on the numbers that you'll do this year? I know a lot of folks in the industry have talked about end demand slowing a bit, but maybe it seems like you guys do have the opportunity to take some share and there's some channel fill opportunity. So maybe you could just speak to where you see the majority of the growth coming from in the AMMO business this year?

Matt, this is Rob Goodmanson. We see the growth, as Rob Wiley said, coming out of the ammunition side. We'll be looking at the number of around $230 million from that side. And I think you probably see well, I know our backlog is a 100% sold. It doesn't -- that of our current capacity.

Okay. So just to clarify, 100% sold within the current capacity. Could you maybe just quantify that a bit more for me? So the current capacity I guess is in flux a little bit, because you have the Manitowoc facility ramping. And so I'd assume, the number may change a bit, but does that mean $230 million in the backlog or does that mean we have a little bit less than that, just given the capacity, it delivers a little bit lower than that at the moment?

No, that would be the backlog. But you pretty much answered your own question. There is a little bit of a sliding scale on the move. We anticipate and hope for everything smoothes out, all the machines work, and the capacity increases that on a rapid basis. In that case, that backlog number would be a little bit too light.

Okay. And then any revenue in the AMMO segment that is factored in from the military opportunities that you guys have highlighted? Obviously a lot of stuff sort of deeper in the funnel in that space, especially with SOT. But I'm curious, have you guys factored any of that into the guide, the $230 million that you mentioned there, Rob? Or is that sort of icing on the cake, if you will, for the year?

That would be icing on the cake. We're not factoring that in. On the ballistic match, you'd see very late in the innings, the Signature-on-Target for moving rapidly through the system.

Okay, got you. And then maybe I'm curious since this is a bit of a unique situation where you guys are reporting Q4 toward the end of your first quarter. I'm curious if you could just speak to maybe some of the trends over the last quarter and separately between GunBroker and the AMMO segment? Just so we can sort of directionally model the year and the ramp up that you've got going in the AMMO segment? I would assume GunBroker has been relatively steady, but maybe just correct me if I'm wrong there. And maybe any trends that you've seen in the recent month with some of the headlines in the news for GunBroker.

And then on the AMMO side of the business, just curious about how the ramp transpires, how it has transpired in the first quarter and then how you expect it to kind of unfold for the rest of the year?

Thanks for the question, Matt. This is Rob Wiley. I think you kind of spoke to the question itself. We see the business continuing strong and we expect another strong quarter. This first quarter that we're currently in now, we're not going to see a big ramp in revenues until we're into the new facility, but really expect to see the benefits of that in the third and fourth quarter of this fiscal year once we've completed the move and have everything up and running the equipments that we've already purchased, just installing and hooking up and putting into production. But still expect to maintain current levels of production until we're up into that point.

Okay. So just to put a finer point on that, I guess in the fourth quarter, looks like AMMO business, you did about $52 million in revenue, so maybe pulling that run rate forward in the first half of fiscal 2023 would be the safer bet. And then assuming there's a bit more of a kicker in the third and fourth quarter in terms of revenue from the AMMO side of the business?

Yeah, I think that's the right way to think about it.

Okay. Got it. And then just I wanted to make sure I understood what you said in terms of the ramp-up in capacity of Manitowoc. So I think in the release, you guys talked about $1 billion in incremental rounds. I guess my assumption was that the facility was probably going to add more like a half-a-billion rounds in the near term. So maybe just speak to sort of how much capacity are we adding this fiscal year for 2023 and then over time, if we get to the billion, how soon do we get there? Maybe just so I can kind of understand and so folks can kind of help, so you can help folks model this out for the next year or two?

Yeah. I think the way to think of it is, once you're fully installed and in the new facility, day one that our capacity would essentially double. And our goal is to get on at a run rate of a billion rounds a year by the end of this fiscal year. So if that helps, we'll add a little bit more color to it.

Okay. So a total of a billion, not incremental billion, is that fair to say?

Yeah, that's correct.

Okay, got it. And then just last one for me and I'll turn it over. Sorry for the long [winded answer], but there's a lot to get through. The margin ramp, as we look at production in the Manitowoc facility and starting in July -- maybe just help folks understand how should we level set on ammunition, gross margins -- How is that factored into the full year adjusted EBITDA guide that you gave? Is it more of a tale of two halves where the first half is quite a bit lower than back half ramps up to backfill? Or should we be level setting on the margins for the full year?

No, I think you [added it] absolutely right. So we expect to maintain for first quarter and most of the second quarter. But as soon as we are -- the additional capacity comes online, we're expecting to see the benefit of that in the third and fourth quarters of this fiscal year.

Okay. Got you. (multiple speakers) [put in pause]

Yes, absolutely. I mean, all the vertical integration activities we have coming online, in addition to the production capacity increases. We're very excited about moving into new facility and to see what we can do coming out of that.

Got it. Thanks, guys.

Thanks, Matt.

Thank you. Mark Smith, Lake Street Capital Markets.

Hey, guys. I wanted to dig in real quick on cadence of sales, as we think about this next fiscal year. Is it safe to assume that September quarter would likely be the lowest just as you transition equipment from the existing facility into the new facility that will see some slowdown in business in September quarter and then June quarter being the next highest and then more of that ramp in sales in the second half of the year? And thinking specifically about loaded ammunition.

I feel confident that our second quarter will be as good as our first quarter that we just ended.

Perfect. And then I wanted to dig into gross profit margin a little bit. Certainly a bit lower here than we've seen in the other quarters of this year. Can you talk about cost pressures that you're seeing, especially as we think about components, primers, project dials, even raw material costs? Talk about anywhere where you're seeing pressure there?

Yeah. No, I think the cost product profiles are relatively similar to what it has been in the past. And I think on our last call, we had mentioned that we're really gearing up for the new manufacturing facility so that we can make a swift transition in the next couple of weeks here when the doors finally open up. And so that is definitely adding to the margin profile that we're currently seeing today.

But come the end of their second quarter, we really expect to see the benefit of the new capacity coming online and the production capabilities and vertical integration activities to be able to really improve our margin to a profile that we expect to see, given all the -- everything that we put into it up until this point. So something that we're very excited for.

Anything in particular to call out in Q4 that put more pressure on margin?

Yeah, I would say labor more than anything.

Okay.

Increased labor substantially for our move into our new building to train people. And it just took a lot more work than we thought getting people trained, hiring quality people.

Okay, perfect. And then it might be a broad base, but just walk me through what gives you confidence in your guidance that you gave for the full year, and as we think about the top-line given sounds like backlog is still strong, but what you've seen in demand that gives you confidence in that top-line number, and this is GunBroker as well as AMMO side. And then the bottom-line, just given inflationary pressures that we're seeing today, what gives you the confidence in being able to hit the guidance numbers that you gave for this next year?

Sure. Let me take a crack at that. The inflation pressure here, it's really always passed on anyway, and we've gone through that for the last number of years. So that's not -- and that would just continue, as in every company in our space. Why do we think it will continue? I think two of the biggest reasons, a is, we still in the midst of a lot of civil unrest, we have the sanctions on Russia which is 20% to 25% of the ammunition sold in the US. And now we have the US government basically telling Lake City they can that sell into the commercial market.

These are all going to be beneficial to this space. And we really are the only ones who are adding any kind of capacity that, where we can more than double our production. So do we feel good and confident that the winds are still at our back? The short answer is yes.

Perfect. Thank you, guys.

Yes, thanks, Mark.

Thanks, Mark.

Thank you. Edward Reilly, EF Hutton.

Hey, guys. Thanks for taking my question. We're seeing a bit of an increased level of ammunition in stock at retail stores. Was wondering, from an industry level, if you could comment on pricing overall and maybe your ability to pivot towards ammunition that still has unmet demand if there are any types of ammunition?

So I think we're still seeing all-time highs in levels of sales prices, at least from manufacturer side. We're always -- our sales teams and production team are conscious of the markets. They've got to have a close pulse on what's going on and what we [the next] big skew maybe. So it's something that we're attuned to and are looking at daily to make to see if we can make adjustments to what we're currently manufacturing and now we can deliver product that our consumers want.

Okay. Got it. And on the GunBroker side, could you just unpack a little bit for us the initiatives you're undertaking to increase the sellers and buyers on the platform?

Yeah, there's a number of different initiatives that we're doing. Fred had mentioned the financial suite of products, whether with the credit cards or programs, these types of things will significantly ease for the sellers' and the buyers' increasing transactions. And on top of that, adding some different services, the cart service, where like I had mentioned in my talk, they can purchase one item at a time. When the cart is completed, which should be soon, they can do multiple purchases. Hypothetically, you buy a gun, do you need the cleaner? Do you need the ears? Do you need the eyes? And there are significant margins in the accessories on top of that. That will be the highest margin business.

So making the end users, both sellers and buyers more -- more ease and more credibility, this is what's going to drive existing base and new people coming to the market. Now as these things get rolled out, it's not a light switch unfortunately. There's a lot of technology that goes behind this. But we will match and we've been spending a fair amount of money on these enhancements to get everything done right. And when they are done right, and when it is perfect, these will be rolled out. So it will be seamless for the end users.

Got you. Another question on that. Just how are you making potential sellers that aren't on the website aware of these types of initiatives?

Some of the initiatives aren't out there yet, because they're not ready to roll out. They are, let's say, with the storefronts and the manufacturers. I mean, we are working with them and we are signing up new sellers for those types of things. What they're interested in and what they really need, is one of the things that they've never could get their hands on before, which was the data.

Manufacturer needs to know what the hot products are, where are they being sold, where are the prices good, where are they getting weak? Same for the dealers, same for the distributors. And from a buyer's standpoint, they're usually looking at, hey, what are the prices? Where are these? And these things are how we are going to monetizing our take rate. Our take rate, which, if you noticed in our document went from 4.6% to 5.1%. These types of enhancements will bring that take rate up to -- let's say, conservatively about an 8.5%.

Got you. Thanks for that. Last question from me. Given the facility is nearly online, how should we maybe be thinking about CapEx going forward?

Thanks for the question. But as far as capital expenditures in relation to the new facility and the production that's coming online with that, most of the capital expenditures virtually all to this point has been expended today. So looking forward, unless we go through and add significantly more capacity from this point and all of the costs have been incurred to this -- from this point. So we're really just looking forward to the benefit that comes from that. And as I mentioned before, very excited to move into the new facility.

Got you. Thank you.

Thank you. Rob Jost, Invesco.

I think I'm a little bit new to your story, but I wanted to ask on the cash flow. Do you have a general sense for next year with this outlook, that you would be able to generate a meaningful set of cash going forward or speak about uses of that cashflow?

Thank you for the question. This is Rob Wiley. Yeah, absolutely. We do expect our cashflow -- at least income and cashflow to increase quite significantly. And you saw on the 10K that we just reported, we have positive cash flow from operations. A lot of the cash outflows this year were in relation to our GunBroker, the addition of GunBroker.com. And we also had a significant cash outflow of just due to our growth. But as we continue to grow, we will be sick of spending cash. But we do expect to see that cashflow increase moving forward.

Also, we're working towards in including a credit facility, asset-based credit facility, so that to free up some of our cash that is tied up in our working capital to aid us in our growth.

Yes, that was one of the questions. So is there -- at the moment, it seems like your inventories went up quite a bit. Is there any unwind in that in the next year or is that at levels that you would expect to be characterize as kind of normal?

Yeah. I think a big reason for the growth in our inventory is just due to the -- there are increase in our sales. So as our sales continue to increase, I would expect our inventory levels continue to grow. And just a side note about our inventory, most of the inventory that we have on hand, virtually all of it is either raw materials or work in process. So we're not holding a lot of finished goods on hand today.

And one other little side note on the increase of the inventory. The inventory is all solved, the issue we have is that supply chain, issue we have had up until this point is shipping. We currently have one dock for shipping and receiving. For moving into a facility in just over two weeks that as well -- makes it a little bit easier. So we just cannot get some of the stuff off the docks in time. Had we had multiple doors, a larger facility, you wouldn't have had to ask that question.

I just got back from our new facility this morning and it's almost impossible to even walk in that building. It is cramped as it is. I'm just amazed that we've done what we've done this last quarter to get product out the door.

That's really helpful. Appreciate that. Well, that dovetails into my other question, which is when you think about being at run rate at the new facility, do you have a target margin that you're shooting for? Have you talked about that?

Yes, on our loaded ammunition product, I think we've always had the goal of maintaining margin of higher than 30%. So I think for now until we get there, we're going to do all we can to make that up.

That's great. I appreciate that. Thank you.

Thank you. JD Abouchar, Glass Creek Partners.

Hey, guys. Congratulations on a great year. A question I had on the eCommerce side with just the sheer size of GunBroker, I think last time I looked at online statistics, it was like 16 million unique users and ranked twice as high as [BassPro] in terms of website rank. The industry is shifting to direct to consumer. So it's giving all brands, a balancing act between not wanting to tick off their traditional channel, but obviously wanting to take advantage of online.

With the sheer volume going through GunBroker, what are some of the opportunities to capitalize, obviously on the increased take rate, but also both firearm and non firearm sales and really just build that platform up?

That's one of the things that we mentioned in the call. Thanks, JD, this is Rob by the way. Obviously, we're adding the cart, putting that together with the financial products. But really how to attract more buyers and sellers is really through adding more of the Amazon-like storefronts dealers. I mean the key here is, all these people need distribution of their products. And they do want to get it out. And sometimes they -- some don't have -- all they have is bricks and mortar. They need different things.

And you can look at the number of the different marketplaces out there that are very successful because they do this. We happen to be unique in our marketplace. And because of that, and with the 7 million plus users, and the new users joining, these users are sellers and buyers. So this is how we can monetize all the interesting information and systems that we are currently putting in place -- to make GunBroker truly a huge growth engine.

Yeah. Just a follow-up question on that. Fred's background as a premier marketer in drawing people in. What are you -- it seems like right now you're not spending much at all in marketing or SEO, or the opportunities there to drive at the appropriate time, a branding initiative, drive more people to the website by strategically doing some marketing, or is the strength of the websites so strong that's really not necessary?

You'll see some marketing this year. We're working on it right now. But up until now, we've focused on building this plant -- building our -- buying equipment. And now it's time to really fire up the marketing opportunities.

Correct. And (multiple speakers) increasing the technology and the availability and ease of access to give the users a better experience. It's all going to be tied into one. I think you'll see the marketing, like Fred said, beginning this year.

Terrific. Well, thanks, guys. Keep up the great work.

Thank you.

Thank you. Andy Johnson, Royal Capital.

Hey, good afternoon, guys. With one day left in the current quarter, can you give a somewhat narrow range on what the revenue will be?

No.

Okay. Can you -- last call you said you were going to -- you authorized funds for purchasing shares. Can you make any comment as to whether you have done that or not?

We can make comment. We have not. We have taken our cash and this year has been full of unique opportunities. And we -- to something we look at on a daily basis, to deploy that capital. And because we deployed it, I believe, profitably and correctly, you're seeing the results of that cash deployment. When it is a better time to start acquiring the stock from the open market, you will see it and it will be announced.

Got you. When you donate a million rounds of ammunition to Ukraine, how is that accounted for on AMMO's books?

This is Rob Wiley. Thank you for the question. Yes, that's an expense on our books. That would show up in operating expenses.

And my assumption is that you had to have or already did jump through the government hoops just to be qualified to give it away and assuming that that's correct, and you've already mentioned that -- I was unaware that your competitors have also made contributions. But with the United States kick in an extra 40 billion that way, do you expect to get paying orders from Ukraine?

That wasn't the reason for the donation.

I didn't say it was.

(multiple speakers) The reason for the donation wasn't because we knew that the administration would kick in $40 billion three months later. That was what they needed at the time.

I understand, but now that they have kicked in $40 billion, do you expect to get orders from Ukraine?

Possible.

Yes, it is possible, but it wasn't our expectation.

And it hasn't happened yet?

No.

Thank you.

Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Well, I'd like to thank you all for listening today. And if you have any other questions, please feel free to reach out to us. If you'd like to talk offline, we'll be happy to take your call. And again, thank you for your time.

And your support. Have a good day.

This concludes today's conference. You may disconnect your lines at this time. Thank you, for your participation.