Good day, ladies and gentlemen. Thank you for standing by. Welcome to today's conference call to discuss AMMO, Inc.'s financial results for the second fiscal quarter of 2022. At this time, all participants are in a listen-only mode. Following the formal remarks, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up. Hosting today's conference will be Reed Anderson with ICR. As a reminder, today's conference is being recorded. Now I would like to turn the conference over to Mr. Anderson. Please go ahead, sir. Thank you. Good afternoon, and welcome to AMMO, Inc.'s conference call to discuss results for the second fiscal quarter of 2022. On the call today from AMMO, Inc. with prepared remarks are Fred Wagenhals, Chairman and Chief Executive Officer, Rob Goodmanson, President, and Robert Wiley, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4:05 P.M. 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 10-K and 10-Q. 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, November 15th, 2021. AMMO, Inc. assumes no obligation to update any forward-looking projection 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. Thanks, Reed, and good afternoon to everyone. Thank you for joining us today. I would like to extend my personal appreciation to all of our great employees, customers, and shareholders for continuing to support our company during these exciting times. I am pleased with our Q2 results, another quarter in which we delivered significant growth in revenue and improved profitability. Based on the strong Q2 results and continued momentum across our entire business, we are again raising our outlook, increasing our fiscal 2022 revenue forecast to $250 million from $210 million previously, and increasing our forecast for adjusted EBITDA to $80 million from $70 million previously. I would like to bring you up to date and answer most of the questions that I get hit daily with from investors. The move-in date for our new state-of-the-art 165,000 sq ft building in Manitowoc, Wisconsin, is the summer of 2022. Tod Wagenhals, our Executive VP, has assured me that it will be on time and under budget. We have pictures on our website for any one of you to view on a weekly basis. Jim Mann, our VP of Operations, has done a remarkable job in integrating our case and loading operation, which closed down in April into Manitowoc's brass facility. I'm also amazed at the new automation equipment that Jim and his team have begun to put in place to eliminate future costs. Mark Hanish, our President of Global Marketing, and John Flynn, Vice President, have been working diligently on our new product development and government contracts. At the present time, we have 2 DoD contracts in place. Rob Wiley, our CFO, and Susan Lokey, CFO of GunBroker.com, and their team have worked around the clock to bring our accounting team up to par with the growth of our company. We are fortunate to have our new accounting firm, PKF, in place. Matt Nickelson, our Vice President of Sales, and Anthony Tate, our Director of National Accounts, have done a tremendous job over the past 16 months, putting together an outstanding call center with current backorders of around $185 million. Those numbers change daily. This includes working with dealers, distributors, and big box retailers. Matt, Anthony, and Nate Acord, Head of Purchasing, have found primers and gunpowder throughout the world to keep our factories running. We also have signed a five-year contract with Vista/Federal to supply them brass casings, and they will supply us with primers. GunBroker.com. The acquisition allowed AMMO, Inc. to have a dominant marketplace platform in the industry. Steve Urvan is on our board and is also very active in future growth of GunBroker.com. Steven F. Urvan, President of GunBroker.com, has put together a team with Beth Cross, Director of Purchasing, Matt Nickelson, and Anthony Tate. Beth is leading that team in securing additional ammo and other items to put on GunBroker.com. At this time, we have signed up to 50,000 new users per month. We believe with the credit card program, the letter of credit program, and the new loyalty program we're putting in place, as well as looking into Bitcoin programs, we believe these monthly numbers will increase dramatically. Rob Goodmanson, President, Board Member. Rob has brought to us and to me to help me run this company on a day-to-day basis, and because of his financial and Wall Street background, to help line up banking for future growth of this company and look at any acquisitions that might fit our wheelhouse. Any future acquisitions must be accretive and fit our wheelhouse before we even take a look at them. With that, I'm going to turn the call over to our President, Rob Goodmanson. Thanks, Fred, and welcome everyone. It's a pleasure to speak with you today. We are proud of the incredible team that Fred has put together and grateful for all the hard work everyone has put forth to create an outstanding quarter and all the success we expect moving forward. Total revenues rose 408% to over $61 million, inclusive of our first full quarter from our marketplace segment, GunBroker.com. Our gross margins of 43% for the quarter were up significantly from the 10.7% we reported in the second quarter of 2020, reflecting the scale efficiencies in our manufacturing operations as well as the growing mix of high-margin marketplace revenue. Demand in the U.S. domestic markets and international ammunition markets remains robust and shows no sign of slowing down. As we've said before, when Fred had the idea of AMMO, it was not just an ammunition company. It was to take an industry that's extremely antiquated and bring technology and patented ideas to the forefront. Our results today illustrate the significant progress toward that vision. Our acquisition of GunBroker.com has been transformative, to say the least. Last quarter, we updated you on the success of the early integration efforts, and I wanted to share additional details to provide a deeper understanding of the powerful dynamics of this business. During the five months of operation since we purchased GunBroker.com, auction revenue has increased approximately 20% on a year-over-year basis, reflecting several factors, including mid-single-digit increase in the average revenue per item sold, as well as an upper single-digit increase on the number of items sold. Helping to drive strong top-line growth in our marketplace was an 83% increase in the loyalty program revenue, as well as the growth in fees from relisting. In the second quarter, the marketplace revenue accounted for 28% of our company's revenue and 63% of the operating income. As you can clearly see, we are no longer simply a manufacturing company. Our marketplace enables much deeper connections directly with the end consumer, and as we continue evolving this leverageable platform, we will continue improving our profitability as well as drive strong revenue growth. Lastly, I want to touch on some of the additional government contracts we announced in late September. An award by the Irregular Warfare Technical Support Directorate formed and operated under the U.S. Department of Defense for military operations. This ammunition was developed to provide warfighters with the ability to see the impact of the rounds fired from their weapon system on a wider variety of targets, both day and night. The SOT ammunition allows a machine gunner to see the bullet's impact without a visible signature in flight exposing their firing position in a matter which occurs with the currently utilized tracer ammunition. This advanced capability will increase the survivability by reducing the firing position identification and increase the lethality by supporting the shooter's ability to place more rounds on target. Before turning the call over to Robert Wiley, I want to add that we are very proud of our accomplishments in the second quarter and remain well-positioned for significant growth in the future. Our unique proprietary ammunition business continues benefiting from the strong industry demand, coupled with our efforts to aggressively expand capacity. Our marketplace business remains a transformational factor that is still in the very early innings, amplifying revenue growth and dramatically reshaping our profitability profile. With that, I'd like to turn it over to our CFO, Robert Wiley. Rob? Thank you, Rob. Welcome, everyone. Let me walk you through our second quarter financials in more detail. Total net revenues for the second quarter of fiscal 2022 were $61 million, up 408% from the $12 million we reported in the year earlier period. Growth in ammunition was the largest factor contributing to the year-over-year increase. For the quarter, ammunition sales were $40.2 million, compared to $8.7 million in last year's second quarter, an increase of 360%. Our marketplace segment had revenues of $16.8 million versus nothing a year earlier, reflecting the acquisition of GunBroker at the end of April 2021. Gross profit of $26.2 million in the second quarter compared to $1.3 million in the year earlier period, reflecting significant growth in revenue. For the quarter, gross profit margin rose to 43% from 10.7% in last year's second quarter, as we benefited from scale-related efficiencies in manufacturing, as well as the addition of high-margin revenue from our marketplace segment. Second quarter operating expenses totaled $12 million, up from $3 million a year ago. The majority of the increase in operating expenses were related to the addition of GunBroker.com, including $5.5 million in incremental non-cash depreciation and amortization. As a percentage of net sales, operating expenses declined to 19.7% in the second quarter of fiscal 2022, from 25% in the year earlier period, reflecting the mix and shift in favor of higher margin marketplace revenues, plus operating efficiencies related to our increased scale. Operating income was $14.2 million in the second quarter, compared to an operating loss of $1.7 million in the year earlier period. As a percent of net revenues, operating income was 23.3% compared to a negative 14.2% a year earlier. Net income available to common shareholders for the second quarter of fiscal 2022 was $13.3 million or $0.11 per diluted share compared to a net loss of $2.3 million or $0.05 per diluted share in the second quarter of fiscal 2021. Adjusted net income per diluted share was $0.17 versus an adjusted net loss of $0.01 per share in the year prior quarter. Adjusted EBITDA was $24 million compared to adjusted EBITDA of $0.4 million in the year earlier period. The significant improvement in adjusted EBITDA was due to increased sales and improved 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. Our balance sheet remains strong, with $33 million of cash and cash equivalents and essentially no outstanding debt. Order backlog at the end of September exceeded $185 million. Now let me provide an update on our guidance. Given the continued strength of demand across our businesses and expanding capacity, we are again increasing our full-year fiscal 2022 revenue guidance to $250 million from the prior forecast of $210 million. Similarly, we are also increasing our full-year adjusted EBITDA forecast to $80 million for fiscal 2022 from the prior guidance of $70 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. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Matt Koranda with Roth Capital. Please proceed. Hey, guys. Good afternoon. Thanks for taking the questions. Just wanted to talk about the updated outlook. The $250 million in revenue for the full year. Maybe if you could just provide a breakdown between the core AMMO, Inc. revenue and the GunBroker.com marketplace business in terms of revenue split. Then just how should we think about the revenue split between the remaining quarters in the second half of your fiscal year? I got a couple of follow-ups as well. Hey, Matt. This is Robert Wiley. Thank you for the question. We are maintaining a steady guidance on the GunBroker.com portion of the revenue. Any increase from our revenue increase in guidance will be increased from our ammunition production and ammunition demand as well as sales through the GunBroker.com platform as well. We are not giving a quarter-by-quarter update on our guidance. We are sticking to an annual guidance update for the moment, but we'll be sure to update our shareholders if we do decide to give quarterly guidance updates. Okay. Yeah, it's just hard to determine seasonality, I guess, and the business given you guys have been growing so fast for the last couple of years. Any directionality on seasonality. I mean, should we expect Q4 to be a little bit larger than Q3? It seems to stand to reason just given you guys are still ramping production. Is that a fair assumption? Yeah. I do think that's a fair assumption, that you'll continue to see quarter-over-quarter growth heading into the end of our year. Okay. Makes sense. Just the split in EBITDA would be helpful as well. The $80 million, how that breaks out. I would assume kind of 65%-35% in terms of the percentage split between the two, just kind of mirroring what you guys had in the second quarter, but any additional color on sort of how you see that breaking down would be helpful. No, I think you're right on line there, Matt. You know, the guidance we've given on EBITDA is conservative, but we are confident on our ability to maintain margins heading into the end of the year. Okay. Fair enough. Wondered if you could help us, you know, just bridge backlog. I guess there's a lot of different moving pieces here, but I think you guys had called out north of $185 million in the backlog. I think, if I'm not mistaken, last quarter, you called out something like $238 million at the end of the first quarter. Just wondering if maybe you could talk about sort of deliveries, order flow during the period, any cancellations or just changes in the way we should be thinking about how you're characterizing backlog. Yeah. This is Fred Wagenhals. Our backlog changes daily because we're increasing production, and we're getting some days as many orders in as we're shipping, and some days more. You know, I've seen it be $200 million, and then I see it go down to $185 million. It's just a constant change every day. Okay. Got it. I'll take the rest of those offline, as we think about the- Back to one other part of your question. We haven't had one major customer cancel any orders. Got it. Okay. If anything, they've increased orders. Okay. Fair enough. And then just a couple more from me. Curious if you could maybe just provide, you know, an update on loaded ammo production capacity and where we are in the ramp. I guess maybe just, Fred, if you could just characterize, you've held in terms of per day production numbers before, but where are we in that ramp up in the third quarter here currently. Where do you think we end up the year in terms of loaded ammo production versus capacity. And then how well are you guys covered on primers. I mean, it sounds like, you know, with the Vista contract and, you know, going for a number of years, you should be reasonably covered on loaded ammo rounds. Just wanted to get your thoughts on sort of how we should think about the pain points in the supply chain. We don't have a problem with primers. I mean, we hear that all the time and, you know, it's constant war every day, but we don't have a problem getting primers. All right. Matt, on some of your other questions regarding the capacity build-out. We're increasing capacity daily, whether it be through the automation that we are putting in, the machines that we've added. You know, I can't give you a—I'll just give you a rough number and say it's approximately 450 million currently. But something you need to keep in mind is at the new building, when we start, which should be, you know, let's say mid-summer, we'll be producing out of that building. That building will produce over 1 billion rounds a year. Gotcha. Very helpful. Thanks, Rob. And then I guess just one more housekeeping one maybe for Robert Wiley. Just wondering if you could talk about the working capital dynamics, maybe within the second quarter, and then how you see it playing out for the remainder of the year. It looked like, you know, use some cash to build inventory, a little bit of AR on the balance sheet as well. Maybe you could just talk about sort of do we flush some of the inventory for the remainder of the year and tighten collections, and so we get a pretty decent flush for the second half in working capital. Just trying to get directionality in terms of how to think about cash flow for the remainder of the year. Yeah. The company is working to put in place a line of credit that would be secured against current assets like accounts receivable and inventory, for example, that would free up cash flow for us to continue investing in the production of our company or any other revenue-producing assets that we may think about acquiring in the future. Okay. Got it. I'll take the rest of mine offline here, guys. I appreciate it. Thank you. Our next question is from Mark Smith with Lake Street Capital Markets. Please proceed. Hi, guys. First I wanted to ask about raw material costs, especially as we look at brass and just your ability to pass through pricing. Yeah. Thanks, Mark, for the question. We have experienced some raw material price increases. That raw materials is what makes up a majority of our inventory today, as we basically are shipping the product as soon as it comes off the line. We are passing those increases that we are experiencing on to our customers. As you know, Mark, we've never been a price leader. We're definitely a follower. Winchester just raised from 7%-16%. Federal usually leads the way, but we will follow in step with them. It is being passed. Okay. That kinda hits some of my next question is, as we look at the ammunition business, you know, if you can break out kind of, you know, prices versus kind of volume, in the growth. You know, how much of this revenue growth really came through additional capacity versus, passing through some of these higher prices? Yeah. Thanks, Mark. Really the increases we're seeing are related to volume, and that's really to achieve scale through our production efficiencies. There has been price increases, but really we feel that the increase in, you know, our financial operation have been through our volume efficiencies. How much is this, Fred? I think it was Fred talked a little bit about this new equipment. You know, how is this helping you? You know, future plans as we look at the next nine months or so until we move into the new facility. You know, how much additional capacity is there for new equipment and machinery in your existing facility to kind of expand more production? Well, the first thing we looked at was automating our packaging area, which had approximately 35-40 people putting ammunition in boxes. We've automated a portion of that now on one SKU, and we're now doing all of our SKUs. We should have that all finalized within the next three months. We're also automating our Streak line as we speak. You know, as I mentioned before, we have an annealing oven that's never been put in place, that we've had sitting in a warehouse for probably a year and a half now. That saves us approximately a penny plus a bullet, depending on the round, and that'll go in effect in our new building. We're looking at automation and how do we streamline it and make the most. It'll be the most automated ammo building or plant in the country when we get done with it. Yeah. Mark, I'd like to add a little bit from Fred. You know, we have three separate facilities currently in Manitowoc, and I think you've been up there. There's really not a lot of room to add anything in our current facility. We have added equipment, and it is in another facility on Woolmer Street. That's where Streak is now. That's where the pack-out is now. We still need obviously more space, and the building is designed to hold, well, everything we've got, plus significant add-ons that we have planned for that new building. Okay. The last question from me is, we're looking out a little bit further here, but as we look at the transition into the new facility, you know, what did you learn when you moved, you know, operations from Payson up to Manitowoc? Are there any labor concerns that you have? Are you able to get enough people to kind of staff this new facility? I think our HR department's done a great job in finding people. Yep. You know, every question I've always gotten from analysts or brokers, they've always said, "What's your biggest problem?" It's always people, getting people just to come to work. She's done a remarkable job, and I think with this new factory, the way it's set up and the way it's streamlined, it'll solve our people problem. Right. You know, the move itself and the resetting up of the equipment will take weeks. I mean, that's it. You know, it's all laid out. It's all planned out, what goes where. You know, everything will be done. It will be pretty much plug and play. You know, moving from Payson to Manitowoc, obviously you had a number of days just in trucking. Then some of those machines had to be broken down, rebuilt, put back up. That would have taken, it did take much longer than the new move into the new facility, which is literally just across the street. Yep. Perfect. Thank you, guys. Thanks, Mark. Our next question is from Michael Dwyer with Raymond James. Please proceed. Hi, guys. Thanks for taking my call this afternoon. Given the movement around environmental social, socially conscious investing, are you guys looking at any biodegradable or environmentally friendly products? Several of the ammunition trade magazines that are out there have been writing about this concept recently. I was wondering if you had anything in yo ur skunk works that you might want to share with us. Yes. You know, we have a contract with a company out of Spain for biodegradable shotgun shells. It just so happened that they're here today, and we've spent all morning with them on probably because of freight costs, we're gonna have to build that ammo here in the United States in our new facility. We'll be putting together a deal with them to assemble that product here in the U.S. They have, I don't know, 30-some patents on their product worldwide. I'm going out to supper with them tonight, so could have been anything. I think it was a very exciting day for us. Thank you. It looks like your marketplace is gradually adding SKUs to the offering. Can you give us some color around what you think next quarter, next year would look like in terms of total SKUs offered on your marketplace? Mike, this is Rob. You know, I don't have a set number. You know, we've got 165 SKUs in just the ammunition. I think we'd be pretty safe to move up into, you know, the low 200s, you know, in the near term on SKUs. I believe we'll be adding to that constantly. You know, it took us a short time to make the acquisition and build a team, and we are currently now just putting products through there. You know, that tied with, you know, the loyalty programs, the credit cards, lines of credit, that type of thing. You know, looking at Bitcoin, there seems to be a very high correlation between gun owners and alternative currencies. So there's many, many different programs out there that need to be studied. We're taking a close look at that as well. Thanks, Rob. No more questions for me. Yeah, thanks. Great quarter. Our next question is from Brandon Beylo with Macro Ops. Please proceed. Hey, guys. Great quarter again. Just a couple of quick questions on capital allocation. Looking out, you know, three to five years, you're starting to see a lot of cash flow come through, net income positive. How are you guys deciding where that cash gets allocated now that you've got these manufacturing facilities that you're ramping up and you've also got this online marketplace? What are the internal discussions? And then how do those dollars end up getting allocated when it's all said and done? I think we, there's a number of different, you know, allocation scenarios. You know, one would be adding product definitely, you know, into the GunBroker.com site. You know, I would not be telling the truth if I didn't say we were looking to be a little more vertically integrated. With the additional space, I think you'll probably see that happen, you know, in not too distant future. You know, the prices, you know, it's all based on how accretive the transaction is. Can we structure it as an earn-out? You know, there's a lot of different things that come into play. Rest assured that we're not gonna do anything that doesn't fit and doesn't make sense and isn't immediately effective for us. Got it. Then just the other question about GunBroker. It seems like some of the low-hanging fruit that you guys could really start to chip away at was just general customer service, which seemed to be lacking before you guys bought it. It sounds like you guys are adding, I think you said 55,000 new members a month. Is that correct? I think the number is closer to 50. Okay, sorry. Yeah. 50,000 a month. What are the main drivers of those new people coming on board? Then, what are some of the improvements you guys are making to that platform that's kind of manifesting in this growth? Well, if we go back to when we were looking at GunBroker.com initially and finding out where their faults were, their biggest fault was in customer service. We've been spending a lot of time there. As you mentioned, we've been adding people, doing significant training, doing some serious catch-up, and trying to make the whole process easier for the end user. You know, it used to be, you know, just through emails. Now we actually talk to live people. They're doing a miraculous job in catching up, let's say, in the customer service arena. I think that's what the people really want. You know, it is all about the end users, it's all about our customers, how they're treated, and that's what keeps them coming back and what keeps this business growing like it's growing. Got it. Just kind of one quick question. I know you had a target for the amount of ammo product sales through the marketplace. I don't know that specific number. I don't know if it was like $5 million through the first year of just AMMO, Inc. products in the marketplace. How are you guys on that goal? I know it's super early, but have you seen some fairly strong success pushing through your own product? Maybe it's easier than you expected, or maybe it's been harder than you expected. It hasn't been harder than expected. It you know takes a little while to create the pipeline to bring it in. I think some of the numbers we talked about previously. I think we'd like to see at least 15% of our production go straight to GunBroker.com. With the increased capacity we won't be affecting, we'll actually still be growing our large big box stores and fulfilling their orders. Again, you know, this does allow us to go direct to consumer, which the consumers like. This, that's probably the lowest hanging fruit that's out there. With the increasing production of the customer service and the new products, we hope to drive more and more people than are being driven there today, you know, to that platform. Got it. One final question. I think I've lied about the previous one, but one final question. If we roll out GunBroker.com to kind of a full stop, what you guys envision this thing to be, if it really works, is it something where most of your revenue, most of your sales will be direct to consumer and you're not relying on big box distributors and retailers, or do you still see these big box retailers like the Bass Pro Shops and stuff like that play a significant role in revenue generation over the long term? Oh, I think they'll always play a significant role. I mean, it's, you know, really, it's not a question. You know, in any business there's always competitors, and where you're gonna buy your ammunition. You know, as long as the price, the pricing is equitable, it's not. It's just another competitor, you know, like Gander would be to Bass Pro, or Fleet Farm would be to, you know, somebody else, to Rural King, on where you purchase it. We do not plan on, you know, giving up or cutting back anything from our big box stores. Got it. All right, I'll step away. Fred, enjoy supper tonight. You, you've earned a few extra glasses of red wine or whatever drink you fancy. Great quarter, guys. Thank you. Thanks. Thank you. Thank you. Ladies and gentlemen, there are no further questions at this time. I would like to hand the call back to Fred Wagenhals for any closing remarks. I just wanna thank everybody for supporting us, and look forward to the next quarter. I think you're gonna see some amazing things come out of this company over the next couple quarters. Thank you. Have a good day. Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you very much for your participation, and have a great day.