What was my take away from the third quarter results? Even though Amunition sales for the six months March to September increased 3% over the prior year, the sales of Amunition in the three months of June to September were 27% below the prior years same quarter..
So what I'm taking away from that is that even though this quarter saw a significant decline in Amunition sales there was a logical one time reason for it.. I put this down to a transitional quarter where they shut down old lines and moved into a new building with setup required for the new lines.
A corporate News release on 18 August trumpeted "Officially UP and Running"
News release of 26 September 2022 (Globe Newswire) was titled Ammo Inc Celebrates grand opening of the State of the Art Amunition Manufacturing plant in Manitowoc, WI
News Release August 15th 2022 included this snippet: (added comment: 3rd and fourth quarter 2023)
We believe our gross margins will increase in the second half of this fiscal year (added comment: meaning third and fourth quarters 2023 or 1 Oct 22 to 31 March 23) as we add a host of operating efficiencies through the fully integrated and ramped up operation of our new production facility, while we continue to grow sales through new markets and expanded distribution. Our goal 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 proprietary lines of ammunition, like the STREAK VISUAL AMMUNITION ™ , Stelth in addition 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 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.
- Better leverage of our fixed costs through expanded production to support the sales objectives.
I feel that the anticipated hiring of 100 additional employees will take some time to optimize, but once we are through that, perhaps we will be paid for our patience.
Cheers!