Ladies and gentlemen, thank you for standing by, and good afternoon and welcome to the AMMO Incorporated third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad, and to withdraw your question, please press star then two. Participants on this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. I would now like to turn the conference over to Mr. Matt Blazei of CORE IR, the company's investor relations firm. Please go ahead, sir. 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. 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 risks 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 recently 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. 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, its most directly comparable GAAP financial measure, please see the reconciliation table located in the company's earnings press release. The content of this call contains time-sensitive information that is accurate only as of today, February 8th, 2024, except as required by law, and will disclaim 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. Good afternoon, everyone. Calendar 2023 was a challenging year for our industry and for the U.S. economy. Despite this backdrop, AMMO, Inc. continued to transition its business to a stronger and leaner operating model as we pushed through this very tough economic period. We have emerged from this time with an impeccable balance sheet, and we are encouraged about the significant opportunities we have before us here in the fourth quarter and going forward. We recently announced a $10+ million brass contract with Zero Delta and continue to see increasing demand as the ammunition and firearms market recovers from the 2022 and 2023's post-pandemic slump. Now, turning to our third quarter, we generated $5.1 million in cash this quarter, mostly through our reduction of inventories by $3.5 million. We will continue to work through inventory reductions as the year progresses. Third quarter revenues were up $1.6 million sequentially, but net loss was dramatically improved to a loss of $1.6 million for the quarter compared to a loss of $7.5 million in the prior quarter and a loss of $4.1 million in the same quarter of the prior year. This improvement was primarily driven by a nearly 600 basis point sequential increase in gross margins due to decreases in tooling expenses, cost-cutting initiatives, and higher traffic on the GunBroker.com marketplace. We are seeing a stronger pull-through here in January and are optimistic as we grow our capacities for rifle case production as we expect to return to profitability during the 2025 fiscal year. In addition, our marketplace division continues its upward trend with seasonal sales continuing to increase here in Q4. GunBroker.com successfully tested our centralized payment processing application this quarter, and we will take our multi-item cart live on or before April 1st. The payment application for checkout will support credit card processing for over 80% of our business, and we will continue to onboard sellers throughout the year as we develop the rest of the platform to onboard the remaining 20% of our business. As we've said in the past, this is the first major step in our evolution and our transition from an eBay auction house to the Amazon eBay of the outdoor shooting sports industry. The launch of our cart will drive subsequent evolutions of the platform as we enable tiered category fees, cross-selling, shipping, financing, a better user experience, enhanced search functionality, and much more. Now I'd like to transition to the ammunition division. We continue to see strong demand for our products and continue to bring on rifle capacity. While the transition has been slower than desired with our rifle brass production, we now have the lines in place to start seeing acceleration this quarter and into fiscal year 2025. We invested $3.6 million in CapEx projects this year, and our cost-out initiatives will result in a savings of $1.75 million, which will start to take effect this quarter but with real effect in our 2025 fiscal year. We are well on our way into the rebranding of our ammunition portfolio and have focused our efforts on premium pistol and rifle ammunition, repositioning our core brands, STREAK, Signature, Stealth, and the launch of our Hunt lines. This rebranding will carry through to our packaging, website, in-store and online displays with our new HUNT line hitting shelves in early summer, while STREAK, Stealth, and Signature lines are hitting stores now. I'm also proud to announce we recently onboarded Paul Kasowski, our new Chief Compliance and Transformation Officer. Paul will be helping us drive greater compliance and ensuring our business stays in the black as we maneuver in these regulated markets. As we look at opportunities going into fiscal 2025, we will focus on the transformation of our marketplace. We will also continue to transition our manufacturing model to one of pursuing higher margins and premium rifle and pistol ammunition opportunities, as well as embracing the growing OEM business. I will now hand the call off to Rob Wiley, our CFO, to walk us through our third quarter financials. Thank you, Jared. Welcome, everyone. Let me now review the financials of the third quarter of our 2024 fiscal year in more detail. We experienced an improvement in the marginality of our ammunition segment, while the margins of the GunBroker.com marketplace segment remained strong. We continue to see positive demand trends building for our ammunition product, and activity continued to increase on GunBroker.com as we enter into the final quarter of our fiscal year. We entered the third quarter with total revenues of approximately $36 million in comparison to $38.7 million in the prior year quarter. The decrease in revenue was related to a decrease in sales activity from our ammunition segment as a result of a change in the U.S. commercial ammunition market from the comparable prior year quarter. Our casing sales, however, which afford us higher gross margins, increased to $4.7 million, up from $3 million in the prior year period. Our marketplace revenue was $14 million for the reported quarter compared to $15.4 million in the prior year quarter, which decreased as a result of the current macroeconomic environment impacting our industry as well as others. Cost of goods sold was approximately $25.1 million for the quarter compared to $26.2 million in the comparable prior year quarter. The decrease in cost of goods sold was related to the decrease in sales volume. Our gross margins for the quarter were $10.9 million, or 30.3%, compared to $12.5 million, or 32.4%, in the prior year period. The decrease in gross profit margin was related to the shift in our sales mix. Our cost-cutting measures are paying off. There was a 5.4% decrease in operating expenses as a percentage of sales from the prior year quarter adjusted to exclude non-recurring expenses. There were approximately $1.5 million of non-recurring expenses related to legal and professional fees, which we have included as an add-back to Adjusted EBITDA. For the quarter, we recorded Adjusted EBITDA of approximately $5.4 million compared to the prior year quarter Adjusted EBITDA of $6.2 million. This resulted in a net loss per share of $0.02, or adjusted net income per share of $0.04, compared to the prior year quarter of net loss per share of $0.04, or adjusted net income per share of $0.04. Our improvement to our marketplace, GunBroker.com, progresses as our cart platform is on schedule to launch on April 1st. We purchased approximately 145,000 shares of our common stock under our repurchase plan in the reported quarter, bringing us to just over 1.3 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. Thank you. Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press the star key, then the number one on your telephone. If your question has been answered and you wish to withdraw your request, you may do so by pressing the pound key. If you are using a speakerphone, please pick up your handset before entering your request and speaking on the call. One moment, please, for the first question. The first question will come from Matt Koranda with Roth MKM. Please go ahead. Hey, guys. Good afternoon. Maybe just a few on the AMMO business first, and then we'll cover GunBroker. Maybe just talk about the drivers of brass revenue in the quarter. They fell off a bit sequentially, obviously up a bunch year-over-year. Maybe just talk about sort of the puts and takes around why that fell on a quarter-over-quarter basis. Then where should that volume be headed in the fourth quarter and beyond? I know you've mentioned it as a meaningful driver, but just any additional color that we can kind of think about as it pertains to brass volume. Absolutely. Thank you for the question, Matt. Yeah. Our press came back online back in November, but really, we held back some brass for our own internal loading to meet future production as we launched our Hunt Lines. And we're making sure that we've got some brass available that'll pass through production over the course of the next quarter to two quarters. Brass sales are strong, great pipeline production, more capacities coming online every day. It's still a great play for us, and it was really just holding back inventories for our own loading. Okay. Then maybe just talk about the levers, Jared, that you have at your disposal here to get that gross margin into the positive territory in the fourth quarter. A nice improvement on a sequential basis. I assume it's kind of a combination of a mix of more brass sales, pricing firming up in the loaded-round side of things. But maybe just unpack a bit more for us in terms of how you're thinking about getting to positive gross margins in the fourth quarter. Our brass production, Matt, is still less than 30% of the total capacity that we have. So it's really about continuing to build out those brass lines. We saw a sequential price decrease, reduction in tooling cost, reduction in material for our entire brass casings division as we push more into these larger calibers. As I just mentioned, we landed a very large contract in conjunction with Zero Delta on the 50-cal 12.7x108 mm line. That's a further big margin play for us going into 2024. We'll continue to press on these larger calibers as more capacity comes online. We think price out there on the market's fairly healthy. Inventories are healthy. We see positive trends ahead. Does that mean we can expect positive gross margins in the AMMO business in the fourth quarter? I think we're going to be well on our way to break even our positive gross margins in the fourth quarter. We're super confident on our ability to start cranking out more and more brass. This 12.7 contract, it's really about making sure that those start dates are on target. But yeah, we're confident, whether it's Q4 or our Q1 2025 fiscal year. Okay. All right. Helpful. Then just turning to GunBroker, I guess I'm curious. The obvious question is, GMV looks like it was down year-over-year. Despite if you look at NICS and sort of the surge in activity that we saw in terms of the primary firearms market, it was up, at least in October and November, I think kind of marginally positive in December even. So just any help on the differential there for you guys versus NICS, why you didn't necessarily see as much of the pickup? It'd just be helpful to kind of get the understanding for the business. What I think the question that you asked was, "Why were we not up as high as NICS?" Is that the right way to look at it? Yeah. Yeah. Exactly. Okay. GunBroker is a resource for this industry. And when there's an abundance of guns on the shelf, they're not necessarily running down and going to GunBroker as often. We still saw positive trends. We continue to see positive trends going into Q4. And you got to remember, we haven't really delivered to our marketplace enhanced checkout features, and we see that as a big upside for us going into Q1 of 2025 as we roll out the multi-item cart and checkout process. Okay. All right. Gotcha. And then I guess just last one on GunBroker. What are the last hurdles that you have to clear to get to the payments and carting initiative on April 1? I mean, it's coming up pretty fast here, a little over a month away. Maybe just discuss any additional items that need to be tackled. And I did hear, I guess, if I heard you correctly, did you say on or before? What are some of the things that could happen to swing you before April 1st in terms of getting to carting? Honestly, we just need a few more weeks of testing. We'd like to see a couple Sundays of higher volume traffic. There's not really anything that's keeping us. It's just making sure that when we do roll it out, it rolls out successfully. I can't speak to really any one impediment that keeps us from going live. Okay. Great. I'll turn it over. Thanks, guys. Thank you, Matt. The next question will come from Mark Smith with Lake Street. Please go ahead. Hi, guys. First one from me. Just wanted to ask about this recent contract. Jared, I don't know if you can give us any additional details or if you can quantify maybe what margin or profitability on this contract business would be like kind of versus your typical ammo or typical brass casing business? Absolutely. Well, it's a little bit of a mixed bag on the margin because we're still seeing overheads across the entire ammunition business or across our entire factory a little higher than we would like. So with turning this line on, I mean, based upon our estimates, there's a 40% margin, a +40% margin on this play. It's six million pieces. We will be producing this well into the first part of 2025 calendar year. It's a strong 40% margin play just on those cases. Perfect. Then it looked like the proprietary ammo had a little better sales during the quarter than I'd expected. Was that just some of the new branding and shipping some of maybe stuff in new boxes or things that looked a little better in the quarter? It's a little bit of the rebranding. We're really hitting our stride on the rebranding just now. Shipments are going out in the black and yellow boxes that have a better presence. I would tell you that I think it's a big part of market recovery. The sales team really hit its stride in Q4. We've got a really strong team that is out, and I think people are starting to recognize the AMMO, Inc. brand again. The pricing out there's healthier than it was in Q2 and Q3 or in Q1 and Q2. Okay. Next question for me is just looking at ammo margin here. Still tough, but I'm curious if you can dive into it a little bit more. How much of that was maybe, we'll call it one-timish in nature with the press still being down versus just kind of headwinds that are out there in the industry, in particular for loaded ammo? What are you seeing for powder, propellant, and any other kind of costs that are hurting margin right now? There is certainly a constraint for propellant, and I think the market's going to see that constraint more and more as the year goes on. I think that's going to impact some of the smaller players more than the bigger players. As we look into kind of the one-time plays, I mean, once again, as I said earlier, we're still at less than 30% capacity of our rifle production, and there is a massive capacity still sitting there as we bring it on, more and more capacity day by day. So that's really where our margin creation comes from. Then I think the inventory levels out there in the U.S. market are relatively healthy. Despite it being an election year, I think people are coming off of this kind of post-2022, 2023 slump. We came out of SHOT Show, and talking to all the retailers and dealers out there, everybody's pretty confident about what we're seeing in the market. Okay. And the last question for me, this new contract's certainly a positive. Curious across the board for your business, kind of how you feel about contract business. You've got, I think you call it, your signature on target, API and Happy Rounds. Just curious, any update on kind of your outlook on military or global contract business. It's really, really solid. We've held off on taking large contracts because we wanted real internal proof of performance before we go sign on to any larger deals. I mean, there's no lack of ability for us to go out and get multi-year contracts, but we really wanted to perform first. I think some of our clients are waiting for us to perform first before they start sending in more orders. They know it's a new factory. They know we can produce premium rifle cases and cartridges. But once again, they want to see the proof before they bet the entire future of their supply lines on us. So I think we're gaining that confidence back day by day, and we'll start taking those larger contracts such as this 12.7x108 contract that we just took. Okay. Great. Thank you. Thank you, Mark. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jared Smith. For For any closing remarks, please go ahead. I want to thank you all for participating on today's call and your interest in AMMO, Inc. We look forward to sharing our progress when we report our fiscal fourth quarter and full fiscal year 2024 results in June. Thanks, and have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now.