Outdoor Holding Company (POWW) 2024 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Good afternoon. And welcome to the Ammo Inc. second quarter 2024 earnings call. (Operator Instructions) Participants of this call are advised that the audio of this conference is being broadcast live over the Internet and is also being recorded for playback purposes. I would now like to turn the call over to Scott Arnold of CORE IR, the company's Investor Relations firm. Please go ahead, sir.

女士們先生們，謝謝你們的支持。午安.歡迎參加 Ammo Inc. 2024 年第二季財報電話會議。 （操作員說明）本次通話的參與者請注意，本次會議的音訊正在透過網路進行現場直播，並且也被錄製用於回放。我現在想將電話轉給該公司投資者關係公司 CORE IR 的 Scott Arnold。請繼續，先生。

Good afternoon. And thank you for participating in today's conference call. Joining me from Ammo's leadership team are Fred Wagenhals, Executive Chairman; Jared Smith, Chief Executive Officer; and Rob Wiley, Chief Financial Officer.

午安.感謝您參加今天的電話會議。與我一起加入 Ammo 領導團隊的是執行主席 Fred Wagenhals；賈里德·史密斯，首席執行官；羅伯威利 (Rob Wiley)，財務長。

During this call, management will be making forward-looking statements, including statements that address Ammo's expectations for future performance or operational results. Forward-looking statements involve risk and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Ammo's most recent filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the SEC today and the company's press release that accompanies this call, particularly the cautionary statements in it.

在本次電話會議中，管理層將做出前瞻性聲明，包括涉及 Ammo 對未來業績或運營業績預期的聲明。前瞻性陳述涉及風險和其他因素，可能導致實際結果與這些陳述有重大差異。有關這些風險的更多信息，請參閱 Ammo 最近提交的表格 10-K 和表格 10-Q 定期報告、今天向 SEC 提交的表格 8-K 以及隨附的公司新聞稿中描述的風險因素呼籲，特別是其中的警告性聲明。

Today's conference call includes non-GAAP financial measures that Ammo believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss in most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release.

今天的電話會議包括 Ammo 認為可用於評估其業績的非 GAAP 財務指標。您不應孤立地考慮此附加信息，也不應將其視為根據 GAAP 準備的結果的替代品。有關此非公認會計原則財務指標與最直接可比較的公認會計原則財務指標淨虧損的調節表，請參閱公司收益新聞稿中的調節表。

The content of this call contains time-sensitive information that is accurate only as of today, November 9, 2023. Except as required by law, Ammo disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Ammo's Chief Executive Officer, Jared Smith.

本次電話會議的內容包含時效性信息，僅截至今天（2023 年11 月9 日）準確。除非法律要求，Ammo 不承擔任何公開更新或修改任何信息以反映本次電話會議後發生的事件或情況的義務。現在我很高興將電話轉給 Ammo 執行長賈里德史密斯 (Jared Smith)。

Good afternoon, everyone. Our fiscal second quarter was a very difficult quarter for our industry, which had been previously anticipated and reported by our major competitors. With that said, the market is moving very quickly due to recent international and domestic events. From our perspective, we continue to transition our business to a leaner and more profitable operating model and remain focused on addressing operational inefficiencies.

大家下午好。我們的第二財季對我們的行業來說是一個非常困難的季度，我們的主要競爭對手之前已經預料到並報告了這一點。話雖如此，由於最近的國際和國內事件，市場正在快速變化。從我們的角度來看，我們將繼續將業務轉型為更精簡、更有利可圖的營運模式，並繼續專注於解決營運效率低下的問題。

Of note, during our fiscal second quarter for which we report today, we in quarter incurred $3.9 million of nonrecurring expenses due to legal and professional fees. Payments incurred upon change in control and accruals for contingencies from activity originating on the 2021 and 2022 fiscal years. There was an additional $0.9 million stock compensation expense due to the change in control activities and $0.4 million write-offs of deposits from the 2022 fiscal year.

值得注意的是，在我們今天報告的第二財季，我們因法律和專業費用而產生了 390 萬美元的非經常性費用。因控制權變更而產生的付款以及源自 2021 和 2022 財政年度活動的意外事件的應計費用。由於控制活動的變化以及 2022 財年的存款沖銷，額外增加了 90 萬美元的股票補償費用。

These actions, while not favorable in the quarter, allow us to move forward without the burden of prior fiscal year activities. We believe that these actions are illustrative of the necessary adjustments that we believe are necessary to transition Ammo, Inc. for greater transparency and profitability in the years to come.

這些行動雖然在本季不利，但使我們能夠在沒有上一財年活動負擔的情況下繼續前進。我們認為，這些行動說明了必要的調整，我們認為這些調整是 Ammo, Inc. 轉型以在未來幾年提高透明度和盈利能力所必需的。

On a positive note, we have lowered our working inventory by $1.3 million, created $9.9 million in cash, and reduced working capital by $8.9 million since year end. Revenues were flat sequentially. But profitability suffered as we cleared out slow-moving inventory at a loss. So that future reporting quarters could be clean and a true measure of the changes we are making.

從積極的方面來看，自年底以來，我們的營運庫存減少了 130 萬美元，創造了 990 萬美元的現金，並減少了 890 萬美元的營運資本。收入環比持平。但由於我們虧本清理了滯銷庫存，獲利能力受到了影響。這樣未來的季度報告就可以是乾淨的，並且能夠真正衡量我們正在做出的改變。

We believe these strategic moves are timely as recent international events have created strong tailwinds for the ammunition division. And we are beginning to see increased traffic and conversion through GunBroker.com as our enhancements are beginning to pay off.

我們認為，這些戰略舉措是及時的，因為最近的國際事件為彈藥部門帶來了強勁的推動力。隨著我們的增強功能開始獲得回報，我們開始看到 GunBroker.com 的流量和轉換率增加。

This past quarter, GunBroker.com has successfully launched its centralized payment processing gateway and is now onboarding sellers as anticipated. This is the first major step in our evolution to a multi-item cart and streamlining the checkout process as we transition from an auction house to an Amazon-like model with option functionality.

上個季度，GunBroker.com 成功推出了集中支付處理網關，現在正按預期吸引賣家。這是我們向多商品購物車發展的第一個重要步驟，也是我們從拍賣行過渡到具有選項功能的類似亞馬遜的模式時簡化結帳流程的第一步。

In line with our expectations, we experienced a sequential decline in sales in Q2 from the previous quarter, tracking $1.4 million down in top line revenue. This decline in sales was anticipated. And we are now starting to see the lift in our sales for Q3, including a 14.7% sequential increase in volume to our platform in October versus September, which is in line with seasonal trends and the current macro environment.

與我們的預期一致，我們第二季的銷售額較上一季連續下降，頂線收入減少了 140 萬美元。銷售額的下降是預料之中的。現在，我們開始看到第三季銷售額的成長，其中 10 月我們平台的交易量比 9 月環比增長了 14.7%，這符合季節性趨勢和當前的宏觀環境。

This acceleration is amplified as we onboard new sellers and users begin to experience OutdoorPay for the first time, which is our centralized payment processing platform and escrow service. We have onboarded 2,826 sellers since we went live with OutdoorPay. We remain very enthusiastic about the progress and outlook for GunBroker.com.

隨著我們的新賣家和用戶開始首次體驗 OutdoorPay（我們的集中支付處理平台和託管服務），這種加速會被放大。自從推出 OutdoorPay 以來，我們已經吸引了 2,826 名賣家。我們對 GunBroker.com 的進展和前景仍然充滿熱情。

Now let me turn our attention to some specifics on our ammunition division. Tough news is best served straight. As with any transition year with a new management team, we have taken certain steps to clean up our inventories, books, and outstanding debts and liabilities. While we anticipated a rough market, we also took substantial margin losses on slow-moving inventory as we cleaned up our stocks.

現在讓我把注意力轉向我們彈藥部門的一些具體情況。艱難的消息最好直接傳達。與新管理團隊的任何過渡年一樣，我們已採取某些措施來清理我們的庫存、帳簿以及未償債務和負債。雖然我們預期市場會出現困難，但在清理庫存時，我們也因滯銷庫存而遭受了巨大的利潤損失。

In context, the ammunition market in our Q2, as reported by other publicly traded companies, was well below our already low expectations. With this backdrop, our results were further impacted because the major investments we've made in contact tools for brass production equipment did not come online in the quarter. And our overhead absorption for the plant suffered.

在此背景下，正如其他上市公司所報告的那樣，第二季的彈藥市場遠低於我們本已較低的預期。在此背景下，我們的業績受到進一步影響，因為我們在黃銅生產設備接觸工具方面的主要投資並未在本季度上線。我們對植物的間接吸收也受到了影響。

This is by no means from a lack of demand, but due to the mechanical and electrical failure of our primary presses for our rifle case production. While we initiated the investments for mechanical and electrical failure redundancy, we did not have the investments in place to keep our workforce and the downstream pressures operational.

這絕不是因為缺乏需求，而是由於我們生產步槍彈殼的主要壓力機出現機械和電氣故障。雖然我們啟動了機械和電氣故障冗餘的投資，但我們沒有適當的投資來維持我們的勞動力和下游壓力的運作。

This led to an additional $1.75 million in expenses for the quarter. Of the $1.75 million, there is roughly $800,000 in tool expenses incurred in the quarter that will help offset future cost of these presses come back online.

這導致本季額外支出 175 萬美元。在 175 萬美元中，本季產生的工具費用約為 80 萬美元，這將有助於抵消這些印刷機恢復上線後的未來成本。

The fundamentals of our transition to OEM brass cells become even more crucial. And our go to market strategy is our demand for products exceeds our current industrial throughput due to these mechanical and supply issues we experienced in the quarter. We expect to see strong demand and high margin growth in future quarters. But we are roughly a quarter behind where we thought we would be by now.

我們向 OEM 黃銅電池過渡的基本原理變得更加重要。我們的市場策略是，由於我們在本季遇到的這些機械和供應問題，我們對產品的需求超過了目前的工業吞吐量。我們預計未來幾季將出現強勁的需求和高利潤成長。但我們現在大約落後我們預期的四分之一。

On a positive note, we have brought on an additional 132 new domestic ammunition customers and continue to sign new OEM customers for supply of rifle and pistol brass. Events around the world have driven demand for our product offerings. And we are increasing the output at the facility to continue that CapEx.

積極的一面是，我們新增了132家國內彈藥客戶，並繼續與新的步槍和手槍黃銅供應OEM客戶簽約。世界各地的活動推動了對我們產品的需求。我們正在增加該設施的產量以繼續資本支出。

While our highest margin presses continue to sit idle, we have not set idle over the last quarter. We have expanded brass cells by 47% compared to this quarter last year. And brass cells now make up 30% of total sales, a 27% increase over last year.

雖然我們的利潤率最高的印刷機繼續閒置，但我們在上個季度並沒有閒置。與去年本季相比，我們的黃銅單元規模擴大了 47%。黃銅電池現在佔總銷售額的 30%，比去年增加了 27%。

Although I am disappointed with our performance this quarter, these trends reinforce my confidence in the strategic direction of our ammunition business. Since we last reported our earnings in August, we have seen the international market increase its demand for our products. And due to recent news of further consolidation in our industry, coupled with limited sales of 5.56 into the commercial market from Lake City, we simply cannot been have been down at a worse time.

儘管我對本季的業績感到失望，但這些趨勢增強了我對我們彈藥業務策略方向的信心。自從我們上次在八月報告收益以來，我們看到國際市場對我們產品的需求增加。由於最近我們行業進一步整合的消息，再加上 Lake City 進入商業市場的 5.56 輛汽車銷量有限，我們的處境實在是太糟糕了。

Events in October have completely flipped the market on its head. And we see a return to revenue growth and improved margins in both the brass and loaded ammunition market today. GunBroker.com is starting to see the payoff of carting and payment processing capabilities on the platforms. We continue to add talent to our team and recently brought on industry veteran, Paul Schreiner, to help us recruit and retain talent in our organization.

十月發生的事件徹底顛覆了市場。我們看到今天黃銅和子彈彈藥市場的收入恢復成長並提高利潤率。 GunBroker.com 開始看到平台上購物和支付處理能力的回報。我們持續為我們的團隊增添人才，最近聘請了業界資深人士 Paul Schreiner，幫助我們在組織中招募和留住人才。

The turnaround is in place and bearing fruit albeit with more bumps along the way than we hoped. I look forward to better results in our fiscal third quarter and the remainder of the year. With that, I will turn the call over to our CFO, Rob Wiley, to review the second quarter results in more detail. Rob.

儘管一路上遇到的坎坷比我們希望的要多，但轉變已經到位並結出碩果。我期待第三財季和今年剩餘時間能取得更好的業績。接下來，我將把電話轉給我們的財務長 Rob Wiley，以更詳細地審查第二季的業績。搶。

Thank you, Jared. Welcome, everyone. Let me now review the financials of the second quarter of 2024 fiscal year in more detail. The margins in our marketplace segment remain strong. And although our gross margins have decreased in our ammunition segment due to the aforementioned operational struggles, we are optimistic on the future performance of the segment.

謝謝你，賈里德。歡迎大家。現在讓我更詳細地回顧一下 2024 財年第二季的財務狀況。我們市場領域的利潤率仍然強勁。儘管由於上述經營困難，我們的彈藥部門的毛利率有所下降，但我們對該部門的未來表現持樂觀態度。

While challenges continue in the market today, demand for our brass casings remain robust. We are beginning to see positive trends in the demand for our ammunition product. And we are seeing the activity on GunBroker.com increase as we enter into our third fiscal quarter.

儘管當今市場仍然面臨挑戰，但對我們黃銅外殼的需求仍然強勁。我們開始看到對我們彈藥產品的需求出現正面趨勢。隨著我們進入第三財季，我們看到 GunBroker.com 上的活動增加。

We are positioned to capitalize on these positive trends given our strong financial position, as we have reported $129.5 million in current assets, including $49.6 million of cash and cash equivalents in comparison to $27.6 million in current liabilities. Additionally, we have generated $18.2 million in cash from operations to the midpoint of our fiscal year.

鑑於我們強勁的財務狀況，我們有能力利用這些正面趨勢，因為我們報告的流動資產為 1.295 億美元，其中包括 4,960 萬美元的現金和現金等價物，而流動負債為 2,760 萬美元。此外，到本財年中期，我們已從營運中產生了 1,820 萬美元的現金。

We ended the first quarter with total revenues of approximately $34.4 million in comparison to $48.3 million in the prior year quarter. The decrease in revenue was primarily related to a decrease in sales activity from our ammunition segment as a result of the state of the US commercial ammunition market during the reporting quarter.

第一季結束時，我們的總收入約為 3,440 萬美元，而去年同期的總收入為 4,830 萬美元。收入下降主要與報告季度美國商業彈藥市場狀況導致彈藥部門銷售活動減少有關。

Our casing sales, however, which afford us higher gross margins, increased to $6.4 million, up from $4.3 million in the prior year period. Our marketplace revenue was $12.5 million for the reported quarter compared to $14.6 million in the prior year quarter, which decreased as a result of the current macro-economic environment impacting our industry as well as others.

然而，我們的腸衣銷售額從去年同期的 430 萬美元增至 640 萬美元，這為我們帶來了更高的毛利率。我們報告季度的市場收入為 1250 萬美元，而去年同期為 1460 萬美元，由於當前宏觀經濟環境影響我們的行業以及其他行業，導致收入下降。

Cost of goods sold was approximately $26.1 million for the quarter compared to $35.5 million in the comparable prior year quarter. The decrease in cost of goods sold was it related to the decrease in sales volume.

本季的銷售成本約為 2,610 萬美元，而去年同期的銷售成本為 3,550 萬美元。銷售成本下降與銷售下降有關。

Our gross margin for the quarter was $8.3 million or 24.1% compared to $12.8 million or 26.6% in the prior year period. The decrease in gross profit margin was related to the shift in our sales mix, but was also related to higher costs associated with our manufacturing process and our ammunition segment. Primarily our cost absorption suffered due to the setbacks we experienced as a result of the rifle casing prices going down in the reported quarter.

本季毛利率為 830 萬美元，或 24.1%，而去年同期毛利率為 1,280 萬美元，即 26.6%。毛利率的下降與我們銷售組合的轉變有關，但也與我們的製造工藝和彈藥部門相關的成本上升有關。主要是我們的成本吸收受到了影響，因為我們因報告季度的步槍外殼價格下降而遭受了挫折。

There were approximately $3.9 million of nonrecurring expenses related to legal and professional fees and also accruals for contingencies from activities commencing in our 2021 and 2022 fiscal years. There was also $0.9 million of additional stock compensation expense as a result of change in control, and also $0.4 million of write-offs incurred during our second fiscal quarter. All of these items, among others are included as addbacks to adjusted EBITDA.

與法律和專業費用相關的非經常性費用以及 2021 和 2022 財年開始的活動的或有費用的應計費用約為 390 萬美元。由於控制權變更，還有 90 萬美元的額外股票補償費用，以及我們第二財季發生的 40 萬美元的沖銷。除此之外，所有這些項目都作為調整後 EBITDA 的附加項包括在內。

For the quarter, we recorded adjusted EBITDA of $1.2 million compared to the prior year quarter adjusted EBITDA of $5.7 million. This resulted in a net loss per share of $0.07 or adjusted net income per share of $0 compared to the prior year period of a net loss per share of $0.01 and adjusted net income per share of $0.04.

本季調整後 EBITDA 為 120 萬美元，而去年同期調整後 EBITDA 為 570 萬美元。與去年同期每股淨虧損 0.01 美元和調整後每股淨收益 0.04 美元相比，這導致每股淨虧損 0.07 美元或調整後每股淨收益 0 美元。

We continue to push forward on the improvements to our marketplace, GunBroker.com. We have formally launched OutdoorPay, our payment processing platform, and are in the process of onboarding our user base to this platform, which will enable us to launch our cart platform soon thereafter.

我們持續推進市場 GunBroker.com 的改進。我們已經正式推出我們的支付處理平台OutdoorPay，並且正在將我們的用戶群引入該平台，這將使我們能夠很快推出我們的購物車平台。

We repurchased approximately 198,000 shares of our common stock under our repurchase plan in the reported quarter, bringing us to just over 1.2 million shares repurchased in total under the plan. That concludes our opening remarks. I will now turn the call over to the operator for questions. Thank you.

在報告季度，我們根據回購計劃回購了約 198,000 股普通股，使我們根據計劃回購的股票總數略高於 120 萬股。我們的開場白就到此結束。我現在將把電話轉給接線員詢問問題。謝謝。

(Operator Instructions) Matt Koranda, Roth.

（操作員說明）Matt Koranda，Roth。

Hey, guys. It's Mike Zabran, on for Matt. Maybe just starting off on the ammo segment, how sustainable is the uptick in demand that we saw in October? Has demand sustained at that same level since then? And I guess, just as a result, have we seen wholesale pricing change much?

大家好。我是麥克‧札布蘭 (Mike Zabran)，替補馬特 (Matt)。也許彈藥領域才剛開始，我們 10 月看到的需求成長的可持續性如何？從那時起，需求是否一直保持在同一水平？我想，正因為如此，我們是否看到批發價格發生了很大變化？

Matt, great question. We're seeing wholesale pricing because the event happened just before the NASGW event. We're seeing wholesale pricing increase slightly.

馬特，好問題。我們看到的是批發價，因為活動發生在 NASGW 活動之前。我們看到批發價格略有上漲。

There's a lot of optimism out in the market out there that this price is going to hold going into the election year. We're certainly optimistic for the trends that we're seeing. And we continue to see opportunistic buys out there that says that price continues to escalate.

市場上有很多樂觀情緒，認為這個價格將持續到選舉年。我們對所看到的趨勢當然感到樂觀。我們繼續看到機會主義購買，顯示價格繼續上漲。

So do we think that this is a long-term hold? We think there is a strategic repricing that's happening going into the 2024 year.

那我們認為這是長期持有嗎？我們認為 2024 年將會發生策略性重新定價。

Got it. And any calibers in specific where we're noticing pricing changing much or just across the board?

知道了。我們注意到價格有很大變化還是全面變化的具體範圍是什麼？

Yeah, so I mean, the stuff that everybody is running for is 5.56 and 223, 7.62x39, all your larger rifle calibers, anything related to military calibers because of the news between Israeli and Hamas. But I would say across the board, we're getting increased demand and increased inquiries on bringing on new customers.

是的，所以我的意思是，由於以色列和哈馬斯之間的新聞，每個人都在追求的是 5.56 和 223、7.62x39、所有更大的步槍口徑、任何與軍用口徑相關的東西。但我想說的是，總的來說，我們對吸引新客戶的需求和詢問都在增加。

Got it, makes sense. And core ammo margins flipped back negative in 2Q. I know -- and then we talked about and referenced the rifle casings presser going down. But is the sequentially worse gross margin coming entirely from lack of cost absorption on the casing side? Just trying to gauge did both loaded ammo and casings have sequentially worse gross margins or was that just from the casing side of the business?

明白了，有道理。第二季度核心彈藥利潤率又轉為負值。我知道——然後我們討論並提到了步槍彈殼壓機的下降。但毛利率連續下降是否完全是由於套管方面缺乏成本吸收所致？只是想衡量一下，裝載的彈藥和機殼的毛利率是否依次下降，或者只是來自機殼業務方面？

We only really took a gross margin hit in some slow-moving product that we really were sitting on too much of leftover from '22. We flushed all that inventory out. We've not seen any price erosion on brass casings. And we've not seen any price erosion on 9 and 223. It was flushing out inventory.

我們只是在一些滯銷產品上真正受到了毛利率的打擊，而我們確實坐擁 22 年的太多剩餘產品。我們清空了所有庫存。我們沒有看到黃銅外殼的價格有任何下降。我們還沒有看到 9 和 223 的價格出現任何下降。它正在清空庫存。

And back in June, when our press didn't come online the first time, we had made strategic purchases of contact tooling bunters and other tooling that we expensed upon receiving. And month after month, that press did not come online. And so that contact tooling and those expenses continue to flow in. And that's really the major hit to our profitability in the ammunition division.

早在六月，當我們的印刷機第一次沒有上線時，我們就策略性地購買了接觸式工具邦特和其他工具，並在收到後進行了支出。月復一月，該媒體都沒有上線。因此接觸工具和這些費用繼續流入。這確實對我們彈藥部門的盈利能力造成了重大打擊。

Got it, makes sense. Last one for me, maybe it's on GunBroker. Good to see the payment processing finalized. Maybe just remind us on how to think about the magnitude of the benefit to take rate and how we should expect to see take rate climb in the coming quarters as a result.

明白了，有道理。對我來說最後一篇，也許是在 GunBroker 上。很高興看到付款處理完成。也許只是提醒我們如何思考採取利率帶來的好處的大小以及我們應該如何預期未來幾季採取利率的攀升。

Well, the take rate we see climbing somewhere between 1% to 3% as we capture credit card fees. You're also going to see an uptick just due to this year's seasonality that we see over GunBroker. But that doesn't really affect the take rate. We're also seeing our take rate -- the main effect is that you're going to see somewhere between a 1% to 3% in our take rate over the next 3.5 to 4 months as we onboard these new sellers.

好吧，當我們收取信用卡費用時，我們看到的收取率會攀升 1% 到 3% 之間。由於今年的季節性因素，您還會看到 GunBroker 的成長。但這並不會真正影響採納率。我們也看到了我們的接受率 - 主要影響是，隨著我們加入這些新賣家，您將在未來 3.5 到 4 個月內看到我們的接受率在 1% 到 3% 之間。

Got it, okay. And one last quick one, is carting live? I thought I heard you reference benefits from it on the prepared remarks.

明白了，好吧。最後一個問題是，卡丁車會直播嗎？我想我聽到你在準備好的評論中提到了它的好處。

Yeah, we are not carting yet. What's happening right now is we're onboarding those sellers through our payment gateway and centralized processing. And quality will not come on until we finished onboarding all our sellers.

是的，我們還沒有推車。現在發生的事情是，我們正在透過我們的支付網關和集中處理來吸引這些賣家。在我們完成所有賣家的入職後，品質才會提高。

Got it, makes sense. That's all from me, guys. Thanks.

明白了，有道理。這就是我的全部內容，夥計們。謝謝。

Mark Smith, Lake Street.

馬克史密斯，湖街。

Hey, Mark.

嘿，馬克。

Hi, guys, a bunch of things to walk through here. First, just maybe hit a little deeper on the demand environment that we saw in October. Can you just talk a little bit about, may the consumer demand first? How much you saw that uptick and did you see that maybe what the impact was within your GunBroker business -- I think that you said that, you quantified was at 14.7% sequentially. But that was typical seasonality. Walk us through what you're seeing on the ground with consumers.

嗨，夥計們，這裡有很多事情要經歷。首先，也許對我們 10 月看到的需求環境有更深入的影響。能簡單談一下，消費者需求第一嗎？您看到了這種上升的程度，您是否看到了您的 GunBroker 業務可能受到的影響 - 我認為您說過，您量化的連續增長率為 14.7%。但這是典型的季節性。請向我們介紹一下您與消費者在現場所看到的情況。

Yeah, so we would expect anywhere between a 5% to 6% increase and a gentle trend coming from September into October. This was a pretty sharp trend in that 14.7%. And that's really because these events happened in the second half of October. It was a really sharp incline after the events in Israel and Hamas that we saw the uptick.

是的，所以我們預計從 9 月到 10 月會出現 5% 到 6% 的成長，並且呈現溫和的趨勢。在這 14.7% 中，這是一個相當尖銳的趨勢。這確實是因為這些事件發生在十月下半月。在以色列和哈馬斯事件發生後，我們看到了上升的趨勢。

I think I answered only one or two of your two-part question. So please repeat.

我想我只回答了你的兩部分問題中的一兩個。所以請重複一遍。

Yeah, maybe just elaborate on that. Are you seeing demand? That demand is up primarily on firearms or is that spread across firearms, ammunition, and other accessories?

是的，也許只是詳細說明一下。你看到需求了嗎？這種需求主要是在槍枝上，還是分佈在槍枝、彈藥和其他配件上？

Right across firearms and ammunition, and we're certainly seeing an increase in ammunition sales on the platform in those calibers.

就槍支和彈藥而言，我們確實看到平台上這些口徑的彈藥銷量增加。

Okay. And then the other piece of increased demand, maybe walk us through what you're seeing from OEM customers for brass casings. Are you seeing that demand uptick significantly in October as well? And I don't know if there's anything you can quantify around that?

好的。然後，另一個增加的需求，也許可以向我們介紹您從 OEM 客戶看到的黃銅外殼的情況。您是否也看到 10 月的需求顯著上升？我不知道是否有什麼可以量化的？

The issue being is that we've been sold out for quite a while, Mark. And until these presses come online, we're not really wanting to take any new orders. Because we need to make sure that we're getting the orders that we have on our books and that we are supplying our customers that placed orders back in March, April, and May when we forecasted that this new press was coming online.

問題是我們已經賣完了很長一段時間了，馬克。在這些印刷機上線之前，我們並不想接受任何新訂單。因為我們需要確保我們收到了預定的訂單，並且我們向在三月、四月和五月下訂單的客戶供貨，當時我們預測這台新印刷機即將上線。

So that's our biggest issue. We could go out and take on 200, 300 million more brass case capacity. But the demand today that exceeds our output is really in a rifle case capacity. And that's where we've had a shortfall in operational efficiencies.

所以這是我們最大的問題。我們可以出去承擔 200、3 億個黃銅外殼的產能。但今天超過我們產量的需求實際上是步槍箱的容量。這就是我們營運效率不足的地方。

And then on that, as we think about these, the rifle process, these equipment issues that you've had, where we are today versus maybe where we were at the end of the quarter, mid-quarter?

然後，當我們思考這些，步槍流程，這些設備問題時，我們今天的情況與季度末、季度中期的情況相比？

Yeah, great, great question. So back in April, when we started to do the walkthrough of the new plant, we recognized that we didn't have the redundancy that we needed. So we bought additional presses. But those presses won't come online until December.

是的，很好，很好的問題。早在四月份，當我們開始對新工廠進行巡查時，我們就意識到我們沒有所需的冗餘。所以我們買了額外的印刷機。但這些印刷機要到 12 月才會上線。

The press that went down, the parts showed up last week. We're running and testing off this week. Once again, it's not from a lack of demand. It's not from a lack of everybody pulling together, trying to get this press up and running.

壓機壞了，零件上週才出現。我們本周正在運行和測試。再說一次，這並不是因為缺乏需求。這並不是因為缺乏每個人齊心協力，努力讓這家媒體正常運作。

This press was bought during COVID. Some of the parts were made during COVID. And the parts that are being made today are being made by the original equipment manufacturer versus when they outsource the parts for these. And so we think we have a press that we can count on going forward. But the last three to four months of sending the parts back and forth and trying to get the parts to work has been a very frustrating experience for everybody on the team,

這台印刷機是在新冠疫情期間購買的。有些零件是在新冠疫情期間製造的。今天製造的零件是由原始設備製造商製造的，而不是外包零件的時候。因此，我們認為我們擁有一家值得信賴的媒體。但過去三到四個月來回發送零件並試圖讓零件正常工作對於團隊中的每個人來說都是非常令人沮喪的經歷，

One of the things that will help explain this press, this press is part of our preform process. And it feeds about six other presses downstream. So it's not like a single press goes down. And you just work around that press. It is the feeder press for our entire medium action line, which we have somewhere between 90- to 120-million-piece capacity on. So it's a big deal for us and has been.

有助於解釋這台壓機的一件事是，這台壓機是我們預成型過程的一部分。它還為下游大約六台其他印刷機提供原料。所以這並不像一個單一的壓力機下降。你只需圍繞該壓力工作即可。它是我們整個中型生產線的送料壓機，我們的產能在 90 到 1.2 億件之間。所以這對我們來說是一件大事，而且一直都是。

Okay. The last piece here, maybe for me, and I can jump back in with any others, is as we think about the profitability that was impacted by clearing out, we'll call it aged, they're not as current of an inventory -- I don't know if you could quantify anything else there around how big of an impact that had in the quarter. And then also, do you feel like you got through that process during the quarter or is there still some remaining loaded ammo that may go out at a lower margin or maybe even loss as we roll into Q3?

好的。這裡的最後一點，也許對我來說，我可以和其他人一起回顧一下，當我們考慮清理所影響的盈利能力時，我們將其稱為陳舊，它們不像當前的庫存那樣 - - 我不知道您是否可以量化本季產生的影響有多大。然後，您是否覺得您在本季度完成了這個過程，或者當我們進入第三季度時，是否仍有一些剩餘的彈藥可能會以較低的利潤消耗，甚至可能出現損失？

No, this point going forward, we've cleared out our old inventory. Part of our push to get that older inventory out is that our overheads are calculated on goods sold. So because we had such a hit on our overheads from not running the rightful presses, we pushed really hard at margins that we didn't even want to take. But the bleeding should be over now. And we're off to a better footing.

不，從現在開始，我們已經清理掉了舊庫存。我們努力清理舊庫存的部分原因是我們的管理費用是根據已售商品計算的。因此，由於沒有運行正確的印刷機，我們的管理費用受到了很大的打擊，所以我們非常努力地提高我們甚至不想接受的利潤。但現在出血應該已經結束了。我們已經有了更好的基礎。

Okay, great. Thank you very much.

好的，太好了。非常感謝。

Absolutely. Thank you, Mark.

絕對地。謝謝你，馬克。

Yeah, maybe, Jared, I don't know if you've still got me. But you said taking price up. Is that post-quarter end?

是的，也許吧，賈里德，我不知道你是否還記得我。但你說要漲價。那是季後末嗎？

Yeah, I mean what we're saying, yeah, that's post -quarter end. We're seeing demand in 2024 that allows us at least a little bit of breathing room. You're not seeing as much price margin compression as you've seen in the past.

是的，我的意思是我們所說的，是的，那是季度末後的情況。我們看到 2024 年的需求至少給了我們一點喘息的空間。您不會看到像過去那樣嚴重的價格利潤壓縮。

Okay, great. Thank you.

好的，太好了。謝謝。

This concludes our question-and-answer session. I would like to turn the conference back over to Jared Smith for any closing remarks.

我們的問答環節到此結束。我想將會議轉回賈里德·史密斯（Jared Smith）發表閉幕詞。

I just want to thank everybody for participating on today's call and your interest in Ammo, Inc. We look forward to sharing ongoing progress when we report our fiscal third quarter 2024 results early next year. I appreciate the investors sticking with us. And I just want to wish you all a good day.

我只想感謝大家參加今天的電話會議以及對 Ammo, Inc. 的關注。我們期待在明年初報告 2024 年第三季財報時分享持續進展。我感謝投資者堅持我們。我只想祝大家有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。