POWW

Download the Complete Report Here Key Takeaways 2Q26 revenue beat and 290 bps of gross margin expansion strengthened the quality of PEW’s topline performance. PEW reported net revenue of $23.2 million in 2Q26, up 9.4% y/y from $21.2 million and ahead of the $22.3 million Street estimate by $0.9 million, or approximately 4.0%. Revenue increased $2.0 million while cost of goods sold increased only 5.8% to $20.1 million from $19.0 million. Gross profit consequently increased 39.4% y/y to $3.1 million from $2.2 million, while gross margin expanded approximately 290 bps to 13.5% from 10.6%. The divergence between 9.4% revenue growth and 39.4% gross profit growth was a key financial development in the quarter, reflecting AI-driven pricing optimization, improved sourcing, favorable product mix and the initial contribution of PEW Logistics. Firearms remained the primary revenue engine, although 2Q26 growth was entirely price and mix led. Firearms sales increased 8.5% y/y to $19.3 million, driven by a 12% increase in average selling price that more than offset a 4% decline in firearm sales volumes. The same pattern was evident through 1H26, with firearm revenue up 9.5% to $41.0 million as average selling prices increased 12% while volumes declined 3%. The mix shift toward higher-priced firearms therefore explains much of the revenue outperformance, with 2Q26 growth driven more by monetization and product mix than underlying unit demand. Non-firearms growth was also driven by substantially higher realized pricing and mix despite continued pressure on underlying volumes. Non-firearms revenue increased approximately 7.5% y/y to $3.6 million, reflecting a 30% increase in average selling price that offset an 18% decline in unit volumes, consistent with continued softness in ammunition and a richer mix of adjacent products. For 1H26, non-firearms revenue increased 9% to $7.8 million as average selling prices increased 25% while volumes declined 13%, reinforcing that category growth remained price and mix driven despite weaker underlying unit demand. Digital engagement remains healthy, with higher AOV and strong mobile penetration supporting monetization despite softer product volumes. PEW ended 2Q26 with approximately 1.4 million registered accounts and 17.1k monthly transactions across roughly 73,000 active SKUs, while average order value increased 7.4% y/y to $489. The platform generated approximately 10.3 million average monthly page views, maintained a 0.7% conversion rate, average session duration of 4.9 minutes and a 37% bounce rate. Mobile accounted for approximately 71% of sessions, 70% of transactions and 68% of revenue, versus roughly 67%, 70% and 64%, respectively, in 1Q26. Taken together, the data suggest PEW is monetizing a stable conversion funnel through higher basket values and sustained mobile engagement despite softer unit volumes. Customer acquisition remained unusually efficient despite double-digit traffic growth, supporting scalability of the digital model. Sales and marketing expense was only $0.3 million in 2Q26, or approximately 1.2% of revenue, compared with $0.2 million in 2Q25, even as revenue increased 9.4% and traffic increased 12.6%. The approximately 1% marketing intensity highlighted on the call reflects a lean acquisition profile supported by years of technology investment, supplier relationships and customer trust rather than dependence on aggressive paid acquisition. Customer lifetime value increased 4.1% y/y to $819.41, supporting continued customer monetization as traffic expands. The combination of 12.6% traffic growth, 4.1% LTV growth and ~1% marketing intensity remains an important advantage as PEW scales higher-margin platform services across the same digital customer and technology infrastructure. PEW Logistics expanded into the suppressor category with the addition of Backwoods Suppressors, marking its third manufacturer on the platform. KelTec established initial domestic firearms validation, Derya extended adoption to an international manufacturer, and Backwoods adds suppressors, further demonstrating that PEW’s compliance, fulfillment and technology stack can support a wider range of manufacturer requirements. The platform enables manufacturers to operate brand-owned, mobile-friendly DTC storefronts, retain customer relationships and first-party data, and access compliant fulfillment without building additional infrastructure internally. PEW’s existing FFL network places a licensed dealer within 15 miles of approximately 97% of the U.S. population, while average checkout-to-delivery time remains just under three business days. The expansion also provides exposure to a rapidly growing suppressor category, with more than 845,000 suppressor applications submitted in the first five months of 2026 following elimination of the $200 federal transfer tax in January. This combination gives manufacturers national distribution, regulatory workflows and customer-facing infrastructure while supporting PEW’s broader effort to scale its asset-light DTC fulfillment model across regulated product categories. The new fulfillment and headquarters facility remains on schedule for 4Q26 and should increase physical capacity ahead of continued scaling in both businesses. Acquired in 4Q25 for approximately $8.25 million, the facility expands PEW’s operational footprint by approximately 2.5x and is expected to increase capacity across both the core e-commerce business and PEW Logistics. The investment provides additional infrastructure to support future volume growth and should improve PEW’s ability to scale fulfillment without requiring a comparable increase in fixed infrastructure. Potential modernization of the lawful firearms purchasing process could reinforce PEW’s digital and compliance moat, although any benefit remains optionality. Recent federal proposals contemplate modernizing aspects of lawful firearms purchasing while maintaining background checks and other core safeguards, potentially reducing transaction friction without eliminating the compliance infrastructure required to complete firearm sales. PEW has spent more than 15 years building digital commerce, automated compliance and nationwide FFL connectivity, with its network placing a licensed dealer within 15 miles of approximately 97% of the U.S. population. A more digitally enabled purchasing framework could therefore support conversion and online-channel penetration in the core GrabAGun business while increasing the value proposition of PEW Logistics to manufacturers seeking compliant direct-to-consumer capabilities. The key strategic implication is that modernization could lower friction for consumers without lowering the compliance barrier for competitors. PEW’s regulatory sophistication has historically functioned as a barrier to entry in online firearms commerce rather than simply a cost of doing business, and that advantage could become more valuable if lawful purchasing processes become increasingly digital while existing safeguards remain intact. Companies with established compliance, fulfillment and FFL infrastructure could be better positioned than retailers or manufacturers attempting to build these capabilities from scratch, potentially supporting higher core conversion, faster online-channel migration and greater manufacturer demand for PEW Logistics. PEW reported a net loss in 2Q26 as higher operating expenses outweighed the improvement in gross profit. Net loss was $1.8 million versus net income of $0.8 million in the prior-year period, primarily reflecting higher G&A and other operating expenses associated with the company’s transition to a public company and investments supporting growth initiatives. Adjusted EBITDA was a loss of $1.7 million versus income of $0.9 million in 2Q25, as incremental spending on PEW Logistics and additional growth resources more than offset the benefit from higher gross profit. The forward revenue setup has strengthened, with Street estimates moving higher following 2Q26 while first-half performance continues to support the growth trajectory. Street estimates sourced from TIKR indicate that 3Q26 revenue is expected at approximately $23.3 million, while the 2026E revenue estimate has increased to $103.1 million from $101.9 million last quarter, a 1.2% raise, and 2027E revenue has increased to $109.3 million from $108.5 million, a 0.7% increase. PEW generated $49.1 million in the first six months of 2026, up 10.3% y/y, leaving approximately $54.0 million required in 2H26 to achieve the revised 2026 estimate. That compares with approximately $51.9 million generated in 2H25 and implies roughly 4% second-half growth. Seasonality remains relevant, with summer typically softer and Q4 and Q1 historically stronger periods, but the upward estimate revisions reinforce confidence in the current trajectory without requiring a material acceleration in second-half growth. Working capital remains broadly healthy despite the quarter-end cash decline, with supplier concentration improving and no evidence of inventory impairment. PEW ended 2Q26 with $97.5 million of cash, $9.3 million of inventory and $7.8 million of accounts payable, with cash down $8.9 million sequentially from $106.4 million in 1Q26, primarily reflecting payment timing as accounts payable fell from approximately $13.0 million. Major wholesale distributors represented approximately 38% of inventory and product costs in 2Q26 versus 39% in 2Q25, while concentration declined more meaningfully to 39% for 1H26 from 47% in 1H25. No inventory valuation provision was required during either 2026 or 2025, and the inventory returns reserve declined to $0.2 million from $0.3 million at year-end. This suggests the $9.3 million inventory balance remains broadly healthy while PEW’s supplier base has become somewhat more diversified on a first-half basis. With the quarter-end A/P movement characterized as timing related and expected to rebound, second-half cash conversion should provide a clearer indication of the underlying working-capital profile. Capital allocation remains disciplined, although all first-half repurchase activity occurred in 1Q26 rather than during the second quarter. PEW repurchased 769,518 shares for approximately $2.36 million, or $2.39 million including excise tax, during 1H26, with the entire amount purchased during 1Q26 and no common shares repurchased in 2Q26. The company had $8.7 million remaining under its original $20 million authorization at June 30, while shares outstanding declined to approximately 29.5 million from 30.0 million at year-end. With $97.5 million of cash and the stock trading below quarter-end cash per share of $3.31, the remaining authorization continues to provide meaningful flexibility, while management continues to balance repurchases against investment in PEW Logistics, the core e-commerce business and new facility, while maintaining expense discipline and flexibility for potential M&A. CFO transition preserves continuity while adding additional public-company finance experience. Co-Founder and CFO Justin Hilty is retiring after more than 15 years with PEW but will remain in an advisory role to support knowledge transfer, while Jonathan Terry will assume the CFO role after serving in a senior finance position at YETI. Terry previously served as CFO of Outschool, Outdoorsy/Roamly and RetailMeNot, and held senior finance leadership roles at Arrow Electronics, bringing experience across FP&A, capital allocation, M&A and public-company financial management. The transition comes as PEW manages approximately $97.5 million of cash and an $8.7 million remaining repurchase authorization, with the finance function moving into a more normalized public-company operating phase. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. Stock is attractively valued as PEW’s current market cap remains below its cash balance, implying little value for the core business. At the 8/14 close, PEW’s market cap was approximately $75.3 million, compared with $97.5 million of cash and equivalents, and roughly $7.7 million of long-term debt. This implies a negative enterprise value of approximately $14.5 million, suggesting that the market is assigning little value to PEW’s digital platform, PEW Logistics and other growth initiatives. Peer valuation also supports the discount argument. PEW trades at 0.71x NTM P/Sales, below the peer group average, despite a cash-rich balance sheet, more than $100 million of expected 2026 revenue, and a developing higher-margin platform revenue stream through PEW Logistics. We believe the discount can narrow as PEW continues to grow its core e-commerce business, benefits from higher AOV and favorable product mix, scales PEW Logistics beyond its three current manufacturers, and begins leveraging its larger fulfillment facility from 4Q26. The $97.5 million cash balance also provides flexibility for buybacks and disciplined M&A. Rerating potential is tied to execution across both the core e-commerce platform and PEW Logistics. Key drivers include sustaining revenue growth through higher-value firearm sales and non-firearms growth, maintaining recent gross-margin gains through pricing and mix optimization, and reducing adjusted EBITDA losses as public-company costs normalize from 3Q26. Further PEW Logistics adoption, including additional manufacturers from its existing pipeline and expansion into new categories such as suppressors, could increase the contribution from higher-margin service revenue. Additional upside could come from greater utilization of the 2.5x larger fulfillment facility, opportunistic share repurchases, disciplined M&A and continued industry modernization. Read Exec Edge’s Initiation on PEW Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post GrabAGun: Topline Beat and 290 bps of Margin Expansion – Quarterly Update Report appeared first on ExecEdge.

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 9:00 a.m. ET Chairman and Chief Executive Officer-Steve Urvan Chief Financial Officer-Paul Kasowski Chief Legal Officer and Corporate Secretary-Jordan Christensen Investor Relations-Michael Bacal Operator: Thank you for joining us, and welcome to Outdoor Holding Company's First Quarter Earnings Call for Fiscal Year 2027. [Operator Instructions] 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 call over to Michael Bacal of Darrow Associates, the company's Investor Relations firm. Please go ahead, sir. Michael Bacal: Good morning, and thank you for participating in today's conference call. Joining me from Outdoor Holding Company's leadership team are Steve Urvan, Chairman and Chief Executive Officer; Paul Kasowski, Chief Financial Officer; and Jordan Christensen, Chief Legal Officer and Corporate Secretary. During this call, management will be making forward-looking statements within the meaning of the federal securities laws, including statements that address Outdoor Holding Company's expectations, strategy, future performance, operational results, margins, cost structure, legal matters, capital allocation and other matters. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such statements. For more information about these risks and uncertainties, please refer to the risk factors and other cautionary statements described in Outdoor Holding Company's most recently filed annual report on Form 10-K, quarterly report on Form 10-Q and the company's earnings press release issued in advance of this call. Today's conference call includes non-GAAP financial measures that the company believes can be useful in evaluating its performance, including adjusted EBITDA. These measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the reconciliation table located in the company's earnings press release and 10-Q and previously released financial reporting. The information discussed on this call is current as of today, August 10, 2026. Except as required by law, Outdoor Holding Company 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 Outdoor Holding Company's Chairman and CEO, Steve Urvan. Steven Urvan: Good morning, everyone, and thanks for joining us. Over the past year, we substantially stabilized and simplified the company and established a much leaner and more focused operating foundation. The stabilization phase is substantially behind us, but operational improvement is continuous. Our operating philosophy is simple, continuous improvement and disciplined growth. Continuous improvement means operating the business better every quarter, simplifying processes, improving efficiency, applying technology where it creates measurable value and allocating capital to its highest and best use. Disciplined growth means investing in initiatives that strengthen the platform, expand monetization through value-added services and create durable long-term shareholder value, not simply by charging customers more, but by making the platform more valuable and monetizing more of each transaction. This quarter demonstrates the earnings power of that philosophy. Four numbers capture the quarter. Net revenues increased 22.1% to $14.5 million, marking our fourth consecutive quarter of year-over-year revenue growth. Net income from continuing operations improved by $9.4 million from a $5.9 million loss to income of $3.6 million. Adjusted EBITDA increased 152% to $7.9 million, and operating cash flow improved by $11.1 million from a deficit of $6.7 million last year to positive $4.4 million this year. Just as importantly, improvement was broad-based. Traffic conversion, average order value and firearm unit sales all increased, while our leaner operating structure converted that growth into meaningful earnings and cash flow. Paul will walk through the financial bridge, so I will focus on the 3 principal operating drivers. First, marketplace productivity. Conversion improved and average item values rose with gains across both new and used products. Firearm units sold increased 11.6% against a 5.3% increase in adjusted NICS. Our FFL required units represented approximately 6.4% of adjusted NICS, an increase of 41 basis points year-over-year. That performance indicates that GunBroker grew faster than the broader market during the quarter. Second, FFL transfer revenue. The FFL integration launched at the beginning of the fiscal year created a new revenue stream, expanded our dealer network, centralized verification and compliance and streamlined the transfer process. It contributed meaningfully to both revenue and take rate in its first quarter of operation. Paul will discuss the financial contribution and the initial implementation costs in more detail. Third, Virginia provided a meaningful but temporary tailwind. Buying in Virginia, driven by proposed legislation banning high-capacity firearms, contributed to a meaningful portion of our year-over-year GMV increase. We are not assuming that demand pulled forward into the first quarter will repeat in the second quarter. Enforcement of the new law is currently subject to preliminary injunctions and litigation continues. However, excluding Virginia, GMV still increased approximately $23 million year-over-year, supported by improvements in traffic, conversion and average order value. That broader marketplace performance is the more important indicator of the underlying health of the business despite a slowdown in June velocity. One category worth highlighting before I turn the call over to Paul is silencers and suppressed firearms, where GMV increased approximately 71% year-over-year. Effective January 1, the federal making and transfer taxes were reduced to 0 for most NFA items, including silencers. While the application and registration requirements remained in place, we believe the lower transaction cost should support demand in this category, although quarterly growth may be uneven, and this remains smaller than firearms overall. With that, let me turn it over to Paul. Paul Kasowski: Thanks, Steve. Good morning, everyone. I will walk through the revenue, gross profit, operating expense and cash flow bridges for the quarter. The results reflect both elements of our operating philosophy, continuous improvement in the way we run the business and disciplined growth through the marketplace expansion and new service offerings. Starting with revenue. Net revenues were $14.5 million, up $2.6 million or 22.1% from $11.9 million in last year's first quarter. That growth primarily came from 2 areas. About $1.7 million was driven by increased volume across the marketplace reflected in final value fees and marketplace service fees. An additional $0.9 million came from FFL transfer fees, which began in April and demonstrated our approach to disciplined growth. As a result, revenue outpaced GMV growth in the quarter. The underlying marketplace metrics were also strong. GMV increased 18.1% to $223.7 million. Average order value rose $33 or 7.5% to $477. Conversion improved 11 basis points to 1.76% and first-party engaged sessions grew 2.9%. Our take rate was 6.47%, up from 6.26% a year ago, with FFL fees contributing 39 basis points. Our legacy take rate was 6.08%, down modestly from the prior year. The decrease primarily reflected a larger share of volume from our top sellers who qualify for discounted fee rates and an increased average item value, which carry a lower inherent take rate. Growth concentrated among our most active sellers and high-value items is a healthy sign. More importantly, the FFL contribution demonstrates our ability to monetize useful services without increasing the base final value fee. Our gross profit was $12.2 million for the quarter, up 18.5%. Gross margin was 84.5% compared to 87.2% last year, a drop of about 260 basis points. The decline primarily reflected the launch of FFL transfer services, including start-up and implementation costs incurred early in the quarter that are not expected to recur. Those implementation activities were substantially completed in May, and we expect the margin contribution from FFL transfer services to improve as the service scales with total gross margin stabilizing above 85%. As noted previously, new services may carry lower margin than the legacy marketplace while still providing highly attractive incremental revenue and profit. Operating expenses are where the continuous improvement side of the quarter is most visible. Total operating expenses were $8.9 million, down $7.4 million or about 45% from $16.3 million a year ago. Legal and professional fees fell $3.7 million, mostly because the Delaware litigation, SEC investigation, audit investigation and the restatement are behind us. Salaries and related costs fell $2.7 million from corporate restructuring. Stock-based compensation was down $0.4 million and last year included $0.6 million in onetime sales tax audit expenses that didn't repeat. The decline reflects the elimination of substantial legacy costs and materially lower recurring operating expense. We do not view cost discipline as a onetime restructuring exercise as we continue reviewing our cost structure, simplifying workflows, improving productivity and reallocating resources toward the opportunities that offer the strongest long-term returns. Putting those elements together, net income from continuing operations was $3.6 million compared with a loss of $5.9 million last year. This quarter realized over a $9 million improvement in a single year. After the $0.8 million preferred dividend, net income attributed to common shareholders was $2.8 million or $0.02 per diluted share compared with a loss of $0.06 per share in the prior year period. Adjusted EBITDA was $7.9 million compared with $3.1 million last year, an increase of approximately 152%. Quarterly adjusted EBITDA has grown sequentially every quarter for the past year, $3.1 million, $4.9 million, $6.6 million, $7.7 million and now $7.9 million. On a trailing 12-month basis, we're at approximately $27 million, which is comfortably above the $25 million annualized run rate goal established last year. The quality of the result also improved beyond interest, taxes, depreciation and amortization. Our adjustments totaled approximately $0.9 million this quarter, which consisted of $0.6 million of SEC-related costs and $0.3 million of stock-based compensation. Comparable adjustments were approximately $5.6 million last year. The narrowing gap between reported and adjusted performance reflects the normalization of the business. Turning to cash flow and the balance sheet. Operating activities provided $4.4 million of cash compared with $6.7 million use of cash last year, an $11.1 million year-over-year improvement. We funded $2 million of share repurchases, $0.8 million in preferred dividends and the scheduled $1 million payment of the related party note. Despite those uses of cash, we still managed to increase our cash position by $0.7 million to $68.8 million. The business generated enough cash to invest in the platform, return capital to shareholders, meet its obligations and still strengthen the cash position. On share repurchases, we bought just over 1 million shares this quarter for $2 million. Since launching the program in January of 2026, we've repurchased about 1.5 million shares at an average of $1.97 per share, with $12 million still available under the $15 million authorization. We continue to evaluate repurchases on the same basis as other capital allocation decisions and what generates the best risk-adjusted return for our common shareholders. These results reflect disciplined daily execution, managing costs, simplifying the organization, improving operating efficiency and investing selectively in the user experience. Operational improvement is not a project with an end date. It's an ongoing management responsibility. Our objective is not simply to operate at the lowest possible cost. It is to direct resources toward the uses that can generate the strongest long-term returns. With that, I'll turn the call back over to Steve. Steven Urvan: Thank you, Paul. Q1 demonstrates the earnings power of the model, but we are not extrapolating a single quarter. Virginia pulled some demand forward. More durable elements are our continually improving cost structure, stronger marketplace productivity and expanding revenue streams. Our focus is to build on the foundation established over the past year through our operating philosophy, continuous improvement, disciplined growth. I'll close with 3 areas of focus: the market, the platform and capital allocation. First, the market. The broader consumer environment is still cautious, but firearms demand has been resilient with adjusted NICS positive year-over-year in nearly every month of calendar 2026 through the end of the first quarter. Our economics differ fundamentally from those of a manufacturer or retailer. We do not own firearm inventory, take product obsolescence risk or depend on any single brand or product cycle. We operate a national asset-light marketplace, spanning new and used products, thousands of sellers in a broad range of categories. The FFL transfer integration and our marketplace service fee also reflects an important competitive reality. Compliant commerce at scale is difficult and GunBroker has spent more than 25 years building a specialized marketplace, network and infrastructure to facilitate it. Second, the platform. Our strategy is straightforward, remove friction from each step of the transaction and attach services that make e-commerce easier, safer and more efficient. That allows us to improve user experience and increase take rate without relying solely on increases to the base final value fee. The path includes FFL transfers, universal payments and premium programs such as Collector's Elite and over time, advertising. FFL transfer services contributed 39 basis points to take rate this quarter while providing a larger dealer network, centralized verification and compliance and a more streamlined transfer process. We continue to advance universal payment processing. Our AI listing tool is intended to reduce listing time, standardize product descriptions and improve marketplace searchability. We are also piloting an AI-supported customer service agent intended to improve response times and handle routine inquiries more efficiently while preserving human escalation for complex matters. We will deploy these tools only when they meet our quality and operational standards. Third, capital allocation. Our priorities are unchanged: keep the balance sheet strong, invest selectively in high-return platform enhancements and return excess cash to shareholders. We doubled our share repurchase activity this quarter versus last, and we intend to remain opportunistic under the share repurchase authorization subject to market conditions, liquidity and the needs of the business. Let me close with one thought. Our operating philosophy is simple, continuous improvement, disciplined growth. Continuous improvement means operating the business better every quarter. We continually challenge our cost structure, simplify processes, improve the customer experience, apply technology where it creates measurable value and allocate capital to its highest and best use. Disciplined growth means investing in initiatives that strengthen the platform, expand monetization through value-added services and create durable long-term shareholder value. Every major decision we make fits within one of those two principles. Our priorities for the balance of fiscal 2027 are, therefore, clear: grow marketplace activity and revenue, continue reducing costs and improving operating efficiency, scale new transaction services, convert technology investment into measurable productivity and turn earnings into cash and shareholder value. The stabilization phase is substantially behind us, but operating improvement is continuous. Q1 demonstrates that we are executing against that philosophy, a growing marketplace, an exceptionally high-margin core business, a leaner cost structure, new monetization opportunities and a strong balance sheet. With gross margins in the mid-80s and a lean cost base, incremental GMV can produce substantial value for shareholders. With that, operator, let's open it up for questions. Operator: [Operator Instructions] And your first question comes from Mark Smith with Lake Street. Mark Smith: I wanted to ask first about the FFL transfer revenue. Can you give us just any thoughts around maybe growth in this business, how it trended during the quarter and kind of outlook as we go forward? Steven Urvan: Yes. Thank you, Mark. So this quarter, in terms of growth, the FFL transfer revenue is only for firearms transactions, the only one that you need an FFL for. And therefore, it's going to move up and down as the actual fire -- really the counts, not necessarily the dollar value, but the count of firearms transactions moves up and down. The -- we had some additional costs for the implementation that kind of tailed out toward the end of this quarter. So we expect that to be kind of stabilized at this point and to provide meaningful revenue and meaningful profitability as we move forward. Mark Smith: Okay. And Paul, I apologize if I missed it. Did you break out kind of the impact on margin just from the addition of this FFL transfer business? Paul Kasowski: No. We talked about the combined new weighted average, the current and expected run rate versus the historical run rate. Steven Urvan: I think we did say it contributed 39 basis points to our take rate. And so that can give you some sense of magnitude or what have you. Mark Smith: Yes. And I think the last question for me. I wanted to just ask about NFA items. Obviously, really solid year-over-year growth. Curious kind of sequential trends, if we've seen any slowdown in that business kind of after the initial surge in January with the change in the stamp tax on that. Any insights into NFA items and how they're trending would be great. Paul Kasowski: Yes. They're up quite a bit quarter-over-quarter. Let me pull it up. It was at right around 50% on NFA items, first and last quarter, the same year. Operator: Your next question comes from the line of Matt Koranda with ROTH Capital. Matt Koranda: It sounds like core GMV, even ex the Virginia benefits grew pretty nicely. So just wondering how demand trended into July on the marketplace, just given broader adjusted NICS still look pretty healthy and growing on a year-over-year basis. Any commentary on traffic conversion, marketplace mix, AOV, whatever you want to call out would be super helpful. Paul Kasowski: Yes. We saw -- go ahead, Steve. Steven Urvan: Go ahead, Paul. No, you go. Paul Kasowski: No, I was just going to say we definitely saw -- we outpaced pretty heavy. You said kind of going into July. It's definitely our slower time of year. So we saw a little bit of a tail off typical as well. The other thing we saw with specific to Virginia and some other states is that as the legislation was going into effect, we saw a little bit of a dip off in people going back to brick-and-mortar more so than online just due to the timing of legislation going into effect. Steven Urvan: So just in general, summer is the slowest time of year for us. People are outside, they're on vacation. They're not doing -- they're not sitting in front of their computer and shopping. And this is a pattern that's repeated since 1999 when I started this company. So not surprising. It's just a seasonal aspect of things. The Virginia thing was interesting just because you get a kind of a rush of demand because of a new law that's going to be implemented, then the courts put the law on hold. Let you go back to buying those items, demand fell off. And it just shows you that in this business, there is a lot of factors that just aren't general marketplace factors. There's a lot of fear, uncertainty and doubt drivers, legislative changes, political changes can influence GMV and purchasing intent by our consumers. Matt Koranda: Okay. All right. That's helpful, guys. And then on AI implementation, I guess you called it out in the prepared remarks around customer service. Is that fully rolled out now? Maybe just talk about the rollout there? And then any other initiatives, Steve, that you're excited about that might be helpful in terms of impacting GMV growth in the coming quarters? Steven Urvan: I am extremely excited about AI. The customer service, we did implement it. It is up and running. It's very, very recent. And so I can't -- I don't have any kind of meaningful data on that as of yet. The sample size is just too small. So we can be talking about that down the road, but it is implemented and it is live. We are -- we hired an AI director. We've examined everything about the business. We're looking at everything we do and looking for ways that AI can make it better, make us more productive, cut costs and what have you. Just super excited about it. So that the AI implementation is ongoing, and we expect that it's going to be a driver not only of GMV and revenue, but also something that will reduce costs and make us more efficient. In terms of headcount, given the kind of volumes we do, we don't have a lot of employees. And so we use technology to provide tremendous operational leverage, and AI is just a spectacular tool for doing that. Matt Koranda: Okay. That makes sense. And maybe just that brings me to the last question, which is you've surpassed the $25 million adjusted EBITDA target that you initially set out to achieve. And it looks like if we look at the first quarter kind of core OpEx, maybe things are normalizing here in terms of expense. But maybe could you just talk about the next waypoints to look for, what we should be thinking about, maybe if Paul wants to talk about kind of core OpEx and what the pull forward for the rest of the year would be helpful. Steven Urvan: I'll let Paul take it in a second. But when you look at -- one of the things I'm excited about is, obviously, the delta between adjusted EBITDA and EBITDA, it's closing. And so we're -- we said as we resolve these things, as we keep -- as we resolve issues, we -- our cash flow, our profitability, our adjusted EBITDA, these numbers are going to continue to converge. And this quarter, we had a lot less like in the prior quarter, we had the $4.4 million legal settlement. A lot of those things are in our -- in the historical past. They're not recurring going forward, and we continue to make progress on that. And so it's very exciting to see the cash flow of this business increasing, the profitability of this business increasing as we're putting these things behind us. So I'll let Paul talk about this a little more. Paul Kasowski: Thanks, Steve. Yes, I think this quarter definitely reflects a better run rate for the normalized business. I think where it means, that include some items as where we're going to continue to invest in the business, but those investments should have kind of returns on them. So like Steve mentioned, areas like AI, where there's potentially growth and productivity investments we'd expect in the future as well. Operator: That concludes our question-and-answer session. I will now turn the conference back over to Steve Urvan for closing remarks. Steven Urvan: Thank you all for joining us today and for your interest in Outdoor Holding Company. This quarter is a credit to the entire GunBroker and Outdoor Holding team. We look forward to updating you on our progress when we report our fiscal second quarter results in November. Thank you, and have a great day. Operator: This concludes today's conference call. You may now disconnect. Before you buy stock in Outdoor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Outdoor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Outdoor Holding (POWW) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Revenues: Increased 22.1% to $14.5 million, up from $11.9 million in the prior year's first quarter. Net Income (Continuing Operations): Improved by $9.4 million to income of $3.6 million, compared to a loss of $5.9 million last year. Adjusted EBITDA: Increased 152% to $7.9 million, up from $3.1 million in the prior year period. Operating Cash Flow: Improved by $11.1 million to positive $4.4 million, compared to a deficit of $6.7 million last year. Gross Profit: Increased 18.5% to $12.2 million for the quarter. Gross Margin: Decreased to 84.5% from 87.2% last year, primarily due to FFL transfer service launch costs. GMV: Increased 18.1% to $223.7 million. Take Rate: Increased to 6.47% from 6.26% a year ago, with FFL fees contributing 39 basis points. Average Order Value: Rose $33 or 7.5% to $477. Conversion: Improved 11 basis points to 1.76%. Firearm Units Sold: Increased 11.6% against a 5.3% increase in adjusted NICs. FFL Transfer Revenue: Contributed $0.9 million in new revenue, beginning in April. Total Operating Expenses: Decreased 45% to $8.9 million, down from $16.3 million a year ago. Net Income to Common Shareholders: $2.8 million, or $0.02 per diluted share, compared with a loss of $0.06 per share in the prior year period. Share Repurchases: Repurchased just over 1 million shares for $2 million during the quarter. Cash Position: Increased by $0.7 million to $68.8 million. Warning! GuruFocus has detected 1 Warning Sign with POWW. Is POWW fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net revenues increased 22.1% to $14.5 million, marking the fourth consecutive quarter of year-over-year revenue growth. Net income from continuing operations improved by $9.4 million, swinging from a $5.9 million loss to a $3.6 million profit. Adjusted EBITDA surged 152% to $7.9 million, with sequential growth every quarter over the past year. Operating cash flow turned positive at $4.4 million, a $11.1 million improvement from the prior year's deficit. The new FFL transfer service contributed 39 basis points to take rate, expanding monetization without raising base fees. Gross margin declined 260 basis points to 84.5% due to FFL transfer service launch and implementation costs. The Virginia legislative tailwind is temporary and not expected to repeat in the second quarter, potentially impacting GMV growth. June velocity slowed, and summer seasonality is expected to weigh on marketplace activity. Legacy take rate decreased modestly to 6.08% due to a larger share of top sellers with discounted fees and higher average item values. The company faces ongoing legal and regulatory uncertainties, including litigation over Virginia's new law and SEC-related costs. Q: Can you provide any thoughts on the growth of the FFL transfer revenue business, how it trended during the quarter, and the income outlook going forward?A: Steve Urvan, Executive Director, explained that FFL transfer revenue is tied to the count of firearm transactions, which require an FFL, and will fluctuate with that volume. He noted that additional implementation costs tailed off toward the end of the quarter, and the service is now expected to stabilize and provide meaningful revenue and profitability moving forward. Q: How did demand trend into July on the marketplace, given the broader adjusted NICS data still looks healthy? Can you provide commentary on traffic, conversion, and marketplace mix?A: Paul Kasowski, CFO, noted that while the company outpaced the market, July is typically a slower time of year. Steve Urvan added that summer is seasonally the slowest period, a pattern consistent since the company's founding. He also highlighted that the Virginia legislation created a temporary demand surge, followed by a dip when courts put the law on hold, illustrating how legislative and political factors can influence purchasing intent beyond general marketplace trends. Q: Is the AI implementation for customer service fully rolled out, and what other AI initiatives might impact GMV growth in coming quarters?A: Steve Urvan, Executive Director, confirmed the AI customer service agent is implemented and live, though the sample size is too small for meaningful data yet. He expressed excitement about AI, noting the company hired an AI director and is examining all aspects of the business to improve productivity and cut costs. He expects AI to be a driver of GMV, revenue, and operational leverage, especially given the company's lean headcount. Q: You surpassed the $25 million adjusted EBITDA target. What are the next waypoints to look for, and what should we think about for core OpEx for the rest of the year?A: Steve Urvan highlighted the closing gap between adjusted EBITDA and reported EBITDA as legacy legal and compliance costs are resolved, which should continue to boost cash flow and profitability. Paul Kasowski, CFO, added that the quarter reflects a better run rate for the normalized business, and future investments, such as in AI, are expected to generate returns and productivity gains. Q: Can you break out the impact on margin from the addition of the FFL transfer business?A: Paul Kasowski, CFO, stated that the company discussed the combined new weighted average take rate versus the historical run rate. Steve Urvan added that the FFL transfer service contributed 39 basis points to the overall take rate, providing a sense of its magnitude. Q: Are there any insights into NFA items and how they are trending, especially after the initial surge in January with the change in the stamp tax?A: Paul Kasowski, CFO, confirmed that NFA items are up significantly quarter over quarter, around 50% compared to the previous quarter. This growth is attributed to the reduction of federal making and transfer taxes to zero for most NFA items, which is expected to support demand in this category. Q: Can you provide more detail on the revenue growth drivers for the quarter?A: Paul Kasowski, CFO, detailed that net revenues increased 22.1% to $14.5 million, driven by approximately $1.7 million from increased marketplace volume (final value fees and marketplace service fees) and an additional $0.9 million from new FFL transfer fees. This growth outpaced GMV growth, which increased 18.1% to $223.7 million. Q: What were the key drivers behind the significant improvement in operating expenses?A: Paul Kasowski, CFO, explained that total operating expenses fell 45% to $8.9 million, driven by a $3.7 million decrease in legal and professional fees (as litigation and investigations concluded), a $2.7 million reduction in salaries from corporate restructuring, and lower stock-based compensation. He emphasized that cost discipline is an ongoing process, not a one-time exercise. Q: How did the company's cash flow and balance sheet perform during the quarter?A: Paul Kasowski, CFO, reported that operating activities provided $4.4 million of cash, an $11.1 million improvement year-over-year. Despite funding $2 million in share repurchases, $0.8 million in preferred dividends, and a $1 million related party note payment, the company increased its cash position by $0.7 million to $68.8 million, demonstrating the business's ability to generate cash while returning capital to shareholders. Q: Can you elaborate on the company's capital allocation priorities and share repurchase activity?A: Paul Kasowski, CFO, stated that the company repurchased just over 1 million shares for $2 million in the quarter, doubling its activity versus the prior quarter. Since launching the program in January 2026, the company has repurchased about 1.5 million shares at an average of $1.97 per share, with $12 million still available under the $15 million authorization. Steve Urvan reiterated that priorities remain keeping the balance sheet strong, investing in high-return platform enhancements, and returning excess cash to shareholders. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Outdoor Holding Company (POWW) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.02 per share. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +200.00%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.03, delivering a surprise of -50%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Outdoor Holding Company, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $14.48 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 12.25%. This compares to year-ago revenues of $11.86 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Outdoor Holding Company shares have added about 24.6% since the beginning of the year versus the S&P 500's gain of 13.3%. While Outdoor Holding Company has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Outdoor Holding Company was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.01 on $12.4 million in revenues for the coming quarter and -$0.01 on $54.1 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Heico Corporation (HEI), another stock in the same industry, has yet to report results for the quarter ended July 2026. This company is expected to post quarterly earnings of $1.50 per share in its upcoming report, which represents a year-over-year change of +19.1%. The consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. Heico Corporation's revenues are expected to be $1.34 billion, up 17% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Outdoor Holding Company (POWW) : Free Stock Analysis Report Heico Corporation (HEI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Outdoor Holding Company? Here are five stocks we like better. Outdoor returned to profitability in fiscal Q1 2027, with revenue up 22.1% to $14.5 million, adjusted EBITDA soaring 152% to $7.9 million, and operating cash flow turning positive at $4.4 million. GunBroker.com marketplace activity outpaced broader firearms trends: GMV increased 18.1% to $223.7 million and firearm unit sales rose 11.6%, while Virginia-related demand provided a temporary boost that management does not expect to repeat next quarter. The new FFL transfer service added $0.9 million in revenue and increased the take rate, while restructuring and reduced legal costs drove a 45% decline in operating expenses. Cash still rose to $68.8 million despite share repurchases, a preferred dividend and debt repayment. Outdoor (NASDAQ:POWW) reported first-quarter fiscal 2027 results that showed higher marketplace activity, the initial contribution from its FFL transfer service, and a substantially lower operating-cost base following restructuring and the resolution of several legacy matters. Net revenue increased 22.1% year over year to $14.5 million, while net income from continuing operations improved to $3.6 million from a $5.9 million loss in the prior-year period. Adjusted EBITDA rose 152% to $7.9 million, and operating cash flow turned positive at $4.4 million, compared with a $6.7 million cash outflow a year earlier. → MarketBeat Week in Review – 08/03 - 08/07 Chairman and Chief Executive Officer Steve Urvan said the company’s stabilization phase is “substantially behind us,” although management continues to focus on operating efficiency, technology deployment and expanding revenue through services that add value for marketplace users. Gross merchandise value rose 18.1% to $223.7 million during the quarter. Average order value increased 7.5%, or $33, to $477, while conversion improved 11 basis points to 1.76%. First-party engaged sessions rose 2.9%. → Quantum Earnings Week: Winners and Losers Are Finally Emerging Firearm unit sales increased 11.6%, exceeding the 5.3% increase in adjusted National Instant Criminal Background Check System, or NICS, activity cited by the company. Urvan said the company’s FFL-required units represented about 6.4% of adjusted NICS, up 41 basis points from a year earlier, indicating that GunBroker.com grew faster than the broader market during the period. Management said demand in Virginia provided a meaningful but temporary boost to GMV as customers responded to proposed legislation involving high-capacity firearms. Urvan cautioned that the company does not expect demand pulled forward into the first quarter to recur in the second quarter, particularly because enforcement of the law is subject to preliminary injunctions and litigation remains ongoing. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Excluding Virginia, GMV increased about $23 million year over year, according to Urvan. He said that performance was supported by gains in traffic, conversion and average order value, though marketplace velocity slowed in June. Management also described summer as the company’s historically slowest seasonal period and said activity had tailed off heading into July. One category that posted notable growth was silencers and suppressed firearms, where GMV increased about 71% year over year. Urvan said NFA-item activity was also up roughly 50% sequentially from the prior quarter. He attributed the category’s growth in part to the reduction to zero of federal making and transfer taxes for most NFA items, including silencers, effective Jan. 1, while noting that application and registration requirements remain in place. Chief Financial Officer Paul Kasowski said approximately $1.7 million of the company’s revenue increase stemmed from higher marketplace volume, including final value fees and marketplace service fees. A further $0.9 million came from FFL transfer fees, a service that began in April. The FFL integration added 39 basis points to the company’s take rate, which increased to 6.47% from 6.26% a year earlier. The legacy take rate, excluding the newer FFL service, was 6.08%, modestly below the prior-year level. Kasowski said that decline reflected a greater mix of business from top sellers that receive discounted rates, as well as higher average item values that carry a lower inherent take rate. Management said the FFL transfer service centralizes dealer verification and compliance and is intended to streamline firearm transfers for customers. Urvan said the revenue stream moves with the number of firearm transactions rather than the dollar value of those transactions. He added that implementation costs tailed off near the end of the quarter and that the service is expected to provide meaningful revenue and profitability as it scales. Gross profit rose 18.5% to $12.2 million, although gross margin declined to 84.5% from 87.2%. Kasowski said the approximately 260-basis-point decline primarily reflected startup and implementation expenses for FFL transfers. Those activities were substantially completed in May, and the company expects overall gross margin to stabilize above 85% as the service expands. Total operating expenses declined 45% to $8.9 million from $16.3 million in the prior-year quarter. Legal and professional fees fell $3.7 million, which Kasowski attributed largely to the Delaware litigation, SEC investigation, audit investigation and financial restatement being largely behind the company. Salaries and related costs declined $2.7 million because of corporate restructuring, while stock-based compensation fell $0.4 million. The prior-year period also included $0.6 million in one-time sales-tax audit expenses that did not recur. After a $0.8 million preferred dividend, net income attributable to common shareholders was $2.8 million, or $0.02 per diluted share, compared with a loss of $0.06 per share a year earlier. Adjusted EBITDA reached $7.9 million, compared with $3.1 million in the prior-year quarter. Kasowski said trailing 12-month adjusted EBITDA was approximately $27 million, exceeding the company’s previously established $25 million annualized run-rate goal. He also said adjustments beyond interest, taxes, depreciation and amortization totaled about $0.9 million in the quarter, down from approximately $5.6 million a year earlier. Operating activities generated $4.4 million in cash during the quarter. Outdoor used $2 million for share repurchases, paid an $0.8 million preferred dividend and made a scheduled $1 million payment on a related-party note. Even with those outlays, cash increased by $0.7 million to $68.8 million. The company repurchased just over 1 million shares for $2 million during the quarter. Since initiating its repurchase program in January 2026, Outdoor has bought back approximately 1.5 million shares at an average price of $1.97 per share, leaving $12 million available under its $15 million authorization. Looking ahead, Urvan said the company plans to grow marketplace activity and revenue, scale transaction services, continue improving operating efficiency and selectively invest in technology. The company has launched an AI-supported customer-service agent and hired an AI director, while continuing work on an AI listing tool intended to reduce listing time, standardize product descriptions and improve searchability. Management said it would deploy those tools only when they meet operational and quality standards. Urvan said the company’s capital-allocation priorities remain maintaining a strong balance sheet, investing in platform improvements with attractive returns and returning excess cash to shareholders. AMMO, Inc designs, produces, and markets ammunition and ammunition component products for sport and recreational shooters, hunters, individuals seeking home or personal protection, manufacturers, and law enforcement and military agencies. The company's products include STREAK Visual Ammunition that enables shooters to see the path of the bullets fired by them; and Stelth Subsonic ammunition primarily for suppressed firearms. It also owns and operates GunBroker.com, an auction site that supports the lawful sale of firearms, ammunition, and hunting/shooting accessories. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Outdoor Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Atlanta, Georgia, July 20, 2026 (GLOBE NEWSWIRE) -- Outdoor Holding Company (NASDAQ: POWW/POWWP) (“Outdoors Online,” “we,” “us.” “our” or the “Company”), the owner of GunBroker.com, the largest online marketplace for firearms, hunting and related products, announced that it will release financial results for its first quarter of its 2027 fiscal year premarket on August 10, 2026. Management will host a conference call at 9:00 AM ET on August 10, 2026 to review financial results and provide an update on corporate developments. Following management’s formal remarks there will be a question-and-answer session. The conference call will primarily be available through a live webcast at the following link: https://events.q4inc.com/attendee/378705617, which is also available through the Company’s website. The recording of the webcast will be posted on the Company’s website after the call is completed. Those without internet access may dial in by calling (855) 761-5600 (domestic) or 1(646) 307-1097 (international). Please join at least 5-10 minutes prior to the scheduled start and follow the operator’s instructions. When requested, please ask for the “Outdoor Holding Company Conference Call” or reference Conference ID #: 8625467 About Outdoor Holding Company With its corporate offices now headquartered in Atlanta, Georgia, Outdoor Holding Company is a publicly traded corporation that owns and operates subsidiaries serving outdoor enthusiasts, including GunBroker. About GunBroker GunBroker.com is the largest online marketplace dedicated to firearms, hunting, shooting and related products. Aside from merchandise bearing its logo, GunBroker currently sells none of the items listed on its website. Third-party sellers list items on the site and Federal and state laws govern the sale of firearms and other restricted items. Ownership policies and regulations are followed using licensed firearms dealers as transfer agents. Launched in 1999, the GunBroker.com site is an informative, secure and safe way to buy and sell firearms, ammunition, air guns, archery equipment, knives and swords, firearms accessories and hunting/shooting gear online. GunBroker promotes responsible ownership of firearms. For more information, please visit: www.gunbroker.com. Forward-Looking Statements This document contains certain “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies, goals and objectives of management for future operations; any statements concerning proposed new products and services or developments thereof; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing. Forward looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words, or the negative thereof. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures and risk factors we include in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports filed on Form 8-K. Source: Outdoor Holding Company

Outdoor Holding Company POWW used its fourth-quarter call to argue that fiscal 2026 marked a reset year, with lower costs, stronger cash generation and a cleaner legal backdrop reshaping the GunBroker.com business. Management’s message centered less on the quarter’s reported loss and more on the earnings power of a leaner marketplace model as platform upgrades, FFL-related services and AI tools move into fiscal 2027. Chairman and CEO Steven Urvan framed the quarter as proof that the company’s post-divestiture model can produce stronger profitability even in a cautious consumer environment. He said adjusted EBITDA rose sequentially through fiscal 2026 and that the fourth-quarter annualized run rate exceeded the $25 million target he set last August. That argument rested heavily on expense control. The company reported a fourth-quarter loss of $0.03 per share, wider than the estimate of a loss of $0.02, delivering a negative surprise of 50%. Fourth-quarter revenues rose 10.1% to $13.9 million, which beat the consensus mark of $12.7 million by 9.4%. Meanwhile, total operating expenses fell to $15.1 million from $38 million a year earlier. Outdoor Holding Company price-consensus-eps-surprise-chart | Outdoor Holding Company Quote Chief financial officer Paul Kasowski added that fiscal 2026 adjusted EBITDA reached $22.3 million, up from $15.3 million in fiscal 2025, reflecting lower SG&A, lower legal expense and lower bad debt expense. Management tied much of its forward narrative to improving GunBroker’s marketplace economics rather than chasing broad expansion. Urvan and Kasowski pointed to better search and filtering, stronger seller analytics and promotional tools, and refined buyer personalization across the platform. A key operational step was the integration with MasterFFL, which management said streamlines transfers for products subject to federal firearms license rules. Kasowski said that the effort moves from a cost center in earlier quarters to a revenue source in fiscal 2027, though the new revenue stream will carry lower profitability than the marketplace’s legacy margin profile. The company is also leaning harder into AI. Urvan said an AI-powered listing tool launched in March to standardize descriptions and improve conversion, while an AI-driven virtual customer service offering is expected within about a month of the call. Management used demand commentary to highlight market-share gains rather than broad market strength. In prepared remarks, Urvan said firearm unit sales increased more than 8.7% in the quarter, ahead of the 1.6% rise in adjusted NICS checks, while the company’s adjusted NICS share improved by 40 basis points. Kasowski said fourth-quarter GMV climbed to $229 million, up 11.8% from a year earlier and 6.2% from the prior quarter, with firearms driving most of the increase. He also said sales growth in pistols and rifles supported results, though a greater mix of firearms modestly pressured the take rate to 6.06% from 6.15%. In Q&A, Urvan told a ROTH Capital analyst that demand in the marketplace has remained better this year and that the company continues to outperform the market by making the buying and selling experience more seamless. He avoided previewing first-quarter numbers but sounded confident that share gains are continuing. Another major theme was balance sheet flexibility after working through legacy matters. The company ended fiscal 2026 with $68.1 million in cash and cash equivalents, up sharply from $30.2 million a year earlier, even after a $4.4 million DCP settlement and more than $1 million of share repurchases in the fourth quarter. Urvan said the company has now resolved most inherited litigation matters, leaving the Arizona class action and shareholder derivative litigation as the main open items. He told analysts that indemnification costs tied to former officers could remain uneven, but said management does not see more large settlements like the DCP payment on the horizon. That cleanup matters because management wants greater freedom in capital allocation. Urvan said the company expects to keep buying back stock in a disciplined way while selectively investing in platform features that can lift traffic, transactions and revenue. The fiscal 2027 agenda came through clearly in both the release and the call. Management identified premium seller offerings, pricing and promotional tools, data analytics, universal payments and broader buyer engagement as the main operating priorities for the year ahead. In Q&A with Kanen Wealth Management, Urvan added more detail on potential growth levers. He said MasterFFL is now generating revenues, advertising remains underdeveloped compared with prior years, and universal payments could meaningfully reduce friction for customers who still rely on money orders rather than card transactions. The tone was notably more assertive when management discussed scalability. Urvan and Kasowski argued that the marketplace’s operating base is now much more fixed, which means incremental revenues should convert into higher profitability more efficiently than in prior periods. Taken together, management used the call to make a straightforward case: fiscal 2026 was about stabilizing the business, lowering the cost structure and restoring financial control, while fiscal 2027 is about monetizing that reset through product, payments and AI execution. The company did not offer formal quarterly guidance on the call, but the emphasis on market-share gains, recurring cash flow and fewer legal distractions left investors with a clearer sense of management’s priorities and confidence level entering the new fiscal year. POWW carries a Zacks Rank #3 (Hold), with a Value Score of F, Growth Score of B, Momentum Score of D and VGM Score of D, based on the provided Zacks data. A Zacks Rank #3 points to a more balanced near-term setup than the stronger Zacks Rank #1 (Strong Buy) or #2 (Buy) categories, while the Style Scores indicate better relative growth characteristics than value or momentum traits. You can see the complete list of today’s Zacks #1 Rank stocks here. The Style Score framework says higher grades are generally associated with better expected performance, and that the strongest combinations tend to be Rank #1 or #2 stocks paired with A or B Style Scores or VGM Scores. That leaves POWW with a mixed signal after the quarter, and that ranking can still change as earnings estimate revisions adjust following the latest results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Outdoor Holding Company (POWW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the fiscal year's success to a deliberate shift toward a streamlined pure-play e-commerce model, focusing on the GunBroker.com marketplace. Performance was driven by significant cost-reduction efforts, including right-sizing personnel and reducing the corporate physical footprint to match the current scope of operations. The company reported gaining market share as firearms unit sales grew 8.7% in Q4, outpacing broader market trends despite a cautious consumer spending environment. A modest decline in take rate to 6.06% was explained as a result of sales mix shifting toward firearms over non-firearms products. Management emphasized the remediation of all previously identified material weaknesses in financial reporting as a critical milestone for organizational stability. The business model demonstrated high operating leverage, with adjusted EBITDA growing sequentially every quarter of the fiscal year as fixed costs were curtailed. Management expects to leverage AI to drive conversion rates through automated listing tools and a virtual customer service platform launching within the next month. The company plans to introduce new revenue streams in fiscal 27, specifically FFL services, which are expected to be accretive to sales but at lower margins than the core marketplace. Strategic focus for the upcoming year includes expanding the advertising business and implementing universal payment solutions to reduce transaction friction for sellers. Capital allocation will prioritize disciplined share repurchases and high-return platform enhancements to increase traffic and transaction volume. Guidance assumes a continued ability to outperform the market, with management noting that upcoming midterms and regulatory changes regarding suppressors may support demand. The company paid $4.4 million to fully and finally settle the DCP litigation matter, which management characterized as a significant step in clearing legacy legal hurdles. Ongoing legal expenses remain for the indemnification of former officers and a class-action lawsuit in Arizona, though management believes most other inherited matters are resolved. Restructuring efforts resulted in a $5.4 million reduction in recurring ordinary course operating expenses for the fiscal year. Management highlighted a substantial increase in the year-end cash balance to $68.1 million, providing a buffer for both capital returns and strategic investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated they are continuing to gain market share by focusing on user experience for both buyers and sellers. While not providing specific Q1 numbers, they noted that demand seems better than the last two years, though not at the peak levels seen in 2020-2021. The new Director of AI Strategy will focus on identifying repetitive tasks for automation and utilizing 20 years of proprietary pricing and descriptive data. Immediate priorities include an AI-driven customer service tool to provide 24/7 support and content generation for marketing. Management confirmed that aside from a shareholder derivative matter and class action in Arizona, they have no visibility into further multi-million dollar settlements. Indemnification costs for ex-officers will continue to be 'chunky' and fluctuate based on trial schedules, but these are excluded from adjusted EBITDA. Management noted that during past periods of social unrest or political shifts, the business reached an annualized EBITDA run rate exceeding $100 million. The operating model is highly scalable, meaning top-line spikes flow directly to the bottom line without requiring significant incremental investment.

This article first appeared on GuruFocus. Net Sales: $13.9 million in Q4, a 10.1% increase from the prior year period. Gross Margin: 87.6% for Q4. Gross Merchandise Value (GMV): $229 million in Q4, up from $205 million in the previous year. Take Rate: Decreased to 6.06% from 6.15% in the prior year period. Operating Expenses: Reduced by $23 million year-over-year. Net Loss from Continuing Operations: $2.7 million in Q4, compared to a loss of $27 million in the prior year period. Adjusted EBITDA: $7.7 million in Q4, up from $2.9 million in the prior year period. Cash Balance: $68.1 million at fiscal year-end, up from $30.2 million at the end of fiscal '25. Full Year Net Sales: $51.5 million, a 3.5% increase from fiscal '25. Full Year Gross Margin: 87.2%, up from 86.9% in fiscal '25. Full Year GMV: $823.5 million, a 3.2% increase from fiscal '25. Full Year Adjusted EBITDA: $22.3 million, up from $15.3 million in fiscal '25. Net Loss for Fiscal '26: $4.9 million, a significant improvement from a $65.2 million loss in fiscal '25. Warning! GuruFocus has detected 5 Warning Signs with POWW. Is POWW fairly valued? Test your thesis with our free DCF calculator. Release Date: June 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net sales increased by over 10% in the fourth quarter, reaching $13.9 million despite a cautious consumer spending environment. Gross margin remained strong at 87.6% for the quarter, indicating efficient cost management. The company achieved a significant reduction in operating expenses, saving $23 million year-over-year. Adjusted EBITDA more than doubled in the fourth quarter to $7.7 million compared to $2.9 million in the previous year. The company successfully resolved several litigation matters, including a $4.4 million settlement, reducing ongoing legal uncertainties. The take rate experienced a modest decline to 6.06% from 6.15% due to a sales mix shift towards firearms. Despite improvements, the company still reported a net loss from continuing operations of $2.7 million for the quarter. Ongoing legal indemnification expenses for former officers continue to impact financials. The company faces potential financial impacts from unresolved class action and shareholder derivative lawsuits. The integration of new revenue streams, such as FFL services, may not achieve the same high profitability rate as existing operations. Q: Could you discuss the demand trends during the fourth quarter and any notable patterns in firearms demand since the quarter ended? A: Steven Urvan, CEO: We continued to outperform the market, gaining market share. Demand in the marketplace seems better this year, influenced by factors like midterms and the elimination of the tax on silencers. While it's not as high as 2020-2021 levels, it's better than the past couple of years. Q: Can you elaborate on the AI strategy and the role of the new Director of AI Strategy and Implementation? A: Steven Urvan, CEO: The new Director, Eric Berger, will focus on identifying opportunities where AI can enhance operations, such as automating repetitive tasks and improving customer service. We are already close to launching an AI-driven customer service tool to provide faster and more accurate responses. Q: How should we think about core operating expenses now that major litigation matters are resolved? A: Steven Urvan, CEO: Most litigation issues have been resolved, except for a class action shareholder derivative lawsuit. Indemnification costs for former officers are ongoing but are accounted for in our adjusted EBITDA. Q: What are the opportunities for organic growth in the business? A: Steven Urvan, CEO: We continue to capture market share and have brought the Master FFL system online as a revenue source. We are also focusing on increasing advertising sales and implementing universal payments to reduce transaction friction and drive GMV growth. Q: Can you provide a reference point for the business's earnings potential during periods of increased demand, such as during civil unrest? A: Steven Urvan, CEO: During high-demand periods like early 2021, we were on a run rate exceeding $100 million in EBITDA. Political events and social unrest can lead to significant spikes in GMV and revenue, with our operating expenses remaining relatively fixed, allowing for scalable growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Atlanta, Ga., June 22, 2026 (GLOBE NEWSWIRE) -- Outdoor Holding Company (Nasdaq: POWW, POWWP) (“OHC,” “we,” “us,” “our” or the “Company”), the owner of GunBroker.com, the largest online marketplace dedicated to firearms, hunting, shooting, and related products, today reported its financial results for its fourth fiscal quarter and year ended March 31, 2026. Fourth Quarter Fiscal 2026 vs. Fourth Quarter Fiscal 2025 Revenue increased 10.1% to $13.9 million from $12.6 million Gross profit rose to $12.2 million from $11.0 million Gross profit margin increased slightly to 87.6% from 87.5% Operating expenses decreased to $15.1 million from $38.0 million Loss from continuing operations of $(2.7) million, compared to last year’s loss from continuing operations of $(27.0) million Net loss attributable to common shareholders of $(1.5) million improved from $(78.3) million Adjusted EBITDA (1) increased to $7.7 million compared to $2.9 million in the same period last year Grew gross merchandise value (“GMV”) 11.8% year-over-year to approximately $229 million from approximately $205 million Fiscal 2026 vs. Fiscal 2025 Net revenues increased 3.5% over the year to $51.1 million from $49.4 million Gross profit rose to $44.6 million from $42.9 million Gross profit margin on the year increased to 87.2% from 86.9% Operating expenses decreased to $50.9 million from $102.6 million Loss from continuing operations of $(4.9) million, compared to last year’s loss from continuing operations of $(65.2) million Net loss attributable to common shareholders of $(6.6) million improved from $(133.9) million Adjusted EBITDA(1) increased to $22.3 million compared to $15.3 million in the prior fiscal year Operational Highlights Positive cash flow from operations for the fiscal year Overhauled and strengthened financial reporting infrastructure and successfully remediated all previously identified material weaknesses in internal controls over financial reporting Began executing on the Company’s stock repurchase program, purchasing a little over 500,000 shares for over $1 million during the fourth quarter Continued cost-reduction initiatives, reducing ordinary-course operating expenses by approximately $5.4 million, including reductions in headcount, legal spend and facilities costs, while maintaining investment in core platform initiatives Completed the integration with MasterFFL to streamline the transfer of products subject to federal firearms license (“FFL”) regulations Resolved significant legacy legal matters, including the $4.4 million payment to settle the Digital Cash Processing (“DCP”) matter, to avoid additional litigation and trial costs Continued to invest in platform enhancements and AI initiatives, including hiring a Director of AI Strategy, deploying an AI-powered listing tool in March, and continuing to identify additional areas of investment to improve customer experience (1) Adjusted EBITDA is a non-GAAP financial measure. See the discussion and the reconciliations at the end of this release for additional information. “Our fiscal fourth quarter capped a year of remarkable improvement across the organization,” said Steve Urvan, Chairman and CEO of Outdoor Holding Company. “We sustained operating momentum, grew profitability, and continued to generate positive cash flow by reducing costs, resolving legacy matters, and investing in GunBroker.com platform features. We continue to deliver consistent profitability and balance-sheet strength. Adjusted EBITDA improved sequentially each quarter throughout the year. Our quarterly annualized EBITDA run-rate in both the third and fourth fiscal quarters exceeded the $25 million run-rate target I set last August, well ahead of schedule. Fiscal 2026 demonstrated the strength of our asset-light operating model, and we believe the actions taken and investments made over the past several quarters have positioned the Company for continued operating efficiency, improved profitability and long-term shareholder value creation in fiscal 2027 and beyond.” The Company delivered improved financial and operational performance in the fourth quarter of fiscal 2026. Year over year, net revenues increased 10% to $13.9 million. Total operating expenses declined $22.9 million, underscoring the impact of resolved legal disputes and continued cost discipline while recurring, ordinary-course operating expenses declined approximately $5.4 million, driven primarily by reductions in headcount, legal spend, and facilities costs. The Company maintained a strong gross margin of 87.6% while continuing to make strategic investments in the platform. Adjusted EBITDA increased to $7.7 million compared to $2.9 million in the same period last year. GunBroker.com delivered solid performance during the fourth fiscal quarter, reflecting continued engagement from both buyers and sellers and the benefits of recent platform investments. During the quarter, the Company continued to introduce platform enhancements designed to improve marketplace efficiency and user experience. These updates included improved search relevance and filtering, expanded seller analytics and promotional capabilities, and refined buyer personalization algorithms. The Company also completed its integration with MasterFFL to streamline the transfer of products subject to FFL regulations, and deployed an AI-powered listing tool to generate standardized, marketplace-optimized product descriptions to increase conversion rates and maintain compliance. The Company continues to explore ways to reduce transaction friction and improve the experience for buyers and sellers alike. Balance Sheet and Liquidity The Company ended the quarter and fiscal year with $68.1 million in cash and cash equivalents, a substantial increase from $30.2 million at the end of fiscal 2025. Even after funding the $4.4 million DCP settlement, effecting $1 million of share repurchases, and incurring other legal expenses, the cash balance at the end of the quarter only declined $1.8 million. The strengthened balance sheet and liquidity position provide significant flexibility to support ongoing platform investments, pursue selective strategic opportunities, and return value to shareholders through the share repurchase program. With reduced leverage, lower fixed costs, and more consistent profitability, the Company is well-positioned to fund organic growth initiatives while maintaining a disciplined approach to capital allocation and shareholder value creation. Strategy and Key Initiatives The Company's post-divestiture strategy is focused on driving sustainable growth through operational efficiency and continuous platform innovation. Key initiatives for fiscal 2027 include expanding premium seller offerings, enhancing pricing, promotional tools and data analytics, implementing universal payments, and improving buyer engagement. Management intends to harness the power of AI and leverage the capital allocation flexibility achieved by disciplined cost management to help deliver on these initiatives, in an effort to position the Company to capture incremental market share and deliver durable profitability over time. Discontinued Operations As previously disclosed, in April 2025, the Company completed the sale of all assets of its business of designing, manufacturing, marketing, distributing and selling ammunition and ammunition components, along with certain related assets and liabilities (the “Transaction”), which previously comprised the Company’s Ammunition segment. Following the Transaction, the Company continues to operate its online e-commerce marketplace business GunBroker.com. For the purposes of this earnings release and the financial information provided herein, the results of the Ammunition segment are presented as discontinued operations in the consolidated statements of operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. The assets and liabilities of the Ammunition segment have been reflected as assets and liabilities of discontinued operations in the consolidated balance sheets for all periods presented. Conference Call Management will host a conference call at 9:00 AM ET on June 22, 2026 to review financial results and provide an update on corporate developments. Following management’s formal remarks there will be a question-and-answer session. The conference call will primarily be available through a live webcast at the following link: https://events.q4inc.com/attendee/339194298, which is also available through the Company’s website. The recording of the webcast will be posted on the Company’s website after the call is completed. Those without internet access may dial in by calling (855) 761-5600 (domestic) or 1(646) 307-1097 (international). Please join at least 5-10 minutes prior to the scheduled start and follow the operator’s instructions. When requested, please ask for the “Outdoor Holding Company Conference Call” or reference Conference ID #: 2981188. About Outdoor Holding Company Outdoor Holding Company is the publicly traded parent and operator of GunBroker.com, the largest online marketplace dedicated to firearms, hunting, shooting and related products. Third-party sellers list items on the site and federal and state laws govern the sale of firearms and other restricted items. Ownership policies and regulations are followed by using licensed firearms dealers as transfer agents. Launched in 1999, the GunBroker.com website is an informative, secure and safe way to buy and sell firearms, ammunition, shooting accessories and outdoor gear online. GunBroker promotes responsible ownership of guns and firearms. For more information, visit: www.gunbroker.com. Cautionary Statement Concerning Forward-Looking Statements Statements contained or incorporated by reference in this press release that are not historical are considered “forward-looking statements” within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “target,” “believe,” “expect,” “will,” “may,” “anticipate,” “estimate,” “would,” “positioned,” “future,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, among others, statements about the Company’s ability to unlock post-divestiture efficiencies, the Company’s expected legal and other professional services expenses, the Company’s business strategy, plans, objectives, expectations and intentions, the Company’s anticipated future operating results and operating expenses, cash flow, capital resources, dividends and liquidity, the Company’s future expansion or growth plans and potential for future growth, including its plan to expand its e-commerce platform, the Company’s ability to attract new customers, the Company’s ongoing evaluation of strategic opportunities, and other statements that are not historical facts. Instead, they are based only on Company management’s current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to, the Company’s ability to maintain and expand its e-commerce business, the Company’s ability to introduce new features on its e-commerce platform that match consumer preferences, the Company’s ability to retain and grow its customer base, the impact of lawsuits, including securities class action lawsuits, stockholder derivative suits and enforcement actions by regulatory authorities, the impact of adverse economic market conditions, including from social and political factors, and the occurrence of any other event, change or other circumstances that could give rise to impacts on operating results. Therefore, investors should not rely on any of these forward-looking statements and should review the risks and uncertainties described under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended March 31, 2026, filed with the Securities and Exchange Commission (“SEC”) on June 22, 2026, and additional disclosures the Company makes in its other filings with the SEC, which are available on the SEC’s website at www.sec.gov. Forward-looking statements are made as of the date of this press release, and except as required by law, the Company expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Contacts For investors:Darrow AssociatesPhone: (917) [email protected] Source: Outdoor Holding Company OUTDOOR HOLDING COMPANYNON-GAAP FINANCIAL MEASURES (Unaudited) To supplement the Company’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present a non-GAAP financial measure in this press release, Adjusted EBITDA. We analyze operational and financial data to evaluate our business, allocate our resources, and assess our performance. In addition to total net sales, net loss, and other results under GAAP, the following information includes key operating metrics and non-GAAP financial measures that we use to evaluate our business. We believe that these measures are useful for period-to-period comparisons of the Company’s performance. We have included these non-GAAP financial measures in this press release because they are key measures management uses to evaluate our operational performance, produce future strategies for our operations, and make strategic decisions, including those relating to operating expenses and the allocation of our resources. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. The Adjusted EBITDA reconciliation presented below begins with loss from continuing operations, which the Company believes is the most directly comparable GAAP financial measure. This reconciliation is consistent with the presentation in the Company’s first and second quarter fiscal 2026 earnings releases. In the third quarter fiscal 2026 earnings release, the Company presented the reconciliation beginning with net loss before discontinued operations and included the preferred stock dividend as a reconciling item. The Company has reverted to the prior presentation for clarity and consistency, as the preferred stock dividend does not impact Adjusted EBITDA under any period’s calculation. The definition of Adjusted EBITDA has not changed. Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that displays our net loss from continuing operations (the most directly comparable financial measure prepared in accordance with GAAP), adjusted to eliminate the effect of certain items described below. We defined Adjusted EBITDA as net income (loss) from continuing operations excluding (i) provision or benefit for income taxes, (ii) depreciation and amortization, (iii) interest expense, (iv) stock-based compensation expenses relating to stock awards and common stock purchase options, (v) interest and other income, (vi) expenses related to acquisition and divestitures, (vii) gain on extinguishment of debt, (viii) professional service and legal fees related to an investigation conducted by a special committee of the Board of Directors (the “Special Committee Investigation”), an investigation by the SEC (“the SEC Investigation”) and the now-settled lawsuit related to the GunBroker acquisition (the “Delaware Litigation”) and (ix) other nonrecurring expenses, such as contingencies associated with litigation or settlements and corporate restructuring costs related to headcount reductions, severance, and expense consolidation. We believe that it is useful to exclude these expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. Non-GAAP financial measures have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following: stock-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense for the Company and an important part of our compensation strategy; the assets being depreciated or amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs; and other companies, including companies in our industry, may calculate their non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures. Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including our net income (loss) from continuing operations and our other financial results presented in accordance with GAAP. OUTDOOR HOLDING COMPANYADJUSTED EBITDA PER SHARE (Unaudited) Diluted Loss Per Share — Continuing Operations Weighted Average Shares Outstanding OUTDOOR HOLDING COMPANYCONSOLIDATED BALANCE SHEETS OUTDOOR HOLDING COMPANYCONSOLIDATED STATEMENTS OF OPERATIONS