AMMO, Inc. (NASDAQ:POWW) Q2 2023 Earnings Conference Call November 14, 2022 5:00 PM ET
Company Participants
Matt Blazei – CORE IR
Fred Wagenhals – Chairman and CEO
Rob Wiley – Chief Financial Officer
John Flynn – Vice President
Conference Call Participants
Mark Smith – Lake Street Capital
Matt Koranda – ROTH Capital
Edward Riley – EF Hutton
Operator
Ladies and gentlemen, thank you for standing by. Good afternoon. And welcome to the AMMO, Inc.’s Fiscal Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of 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 Matt Blazei of CORE IR, the company’s Investor Relations firm. Please go ahead, sir.
Matt Blazei
Good morning and thank you for participating in today’s conference call. Joining me from AMMO’s leadership team are Fred Wagenhals, Chairman and Chief Executive Officer; Rob Wiley, Chief Financial Officer; and John Flynn.
During this call, management will be making forward-looking statements, including statements that address AMMO’s expectations for future performance or operational results. Forward-looking statements involved risks and other factors that may cause actual results to differ materially from those statements.
For more information about these risks, please refer to the Risk Factors described in AMMO’s most recently filed periodic reports on Form 10-K and Form 10-Q, the Form 8-K filed with the sec today and the company’s press releases that accompanies this call, particularly the cautionary statements in it.
Today’s conference call includes non-GAAP financial measures that AMMO believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure. Please see the reconciliation table located in the company’s earnings press release.
The content of this call contains time sensitive information that is accurate only as of today, November 14, 2022. Except as required by law AMMO disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.
It is now my pleasure to turn the call over to Fred Wagenhals.
Fred Wagenhals
Thanks, Matt. Hello to everyone and thanks for joining the call. I am going to talk for a few minutes about where our company stands today and what we see moving forward through the end of our March 31st fiscal year and into next year.
Last quarter was equal parts exciting and challenging. We find ourselves in a tough market at this time. We have negative political macroeconomics at home and abroad, political pressures, huge inflation drives and a domestic and global recession. This means the Board, our management team and the entire AMMO family must be on top of our game.
The domestic and international supply chain remains challenging. Components costs appear to be lowering in some respects, but remain volatile and the inflation, recession, double shot is hitting the shooting sports industry squarely in the shops. That is being felt on the manufacturing and marketplace side of our business.
But even skimming the earnings report of our peers will show the same type of challenges being faced by all. I also don’t point this out as an excuse. The management team of AMMO families with our Board assistance and guidance are remaining focused on driving innovation and increasing value through the more shelf space, sales and more GunBroker.com users.
With the was in Ukraine entering its nine months with no indication it is slowing down, we are seeing increased export opportunities each week as our European allies focus of their ammunition capacity on maintaining a strong defense posture at home, while supporting our Ukrainian people’s fight just as AMMO did when the war broke out and as our U.S. Government continues at this time.
The new plant is Humming [ph] with its ribbon-cutting ceremony a few months ago in Wisconsin. We are increasing capacity across the Board and are in a position to support the domestic and expanding overseas ammunition demand.
Our military programs are moving at light speed relative to government procurement time lines. The Ballistic Match program and the Signature-on-Target programs remain on course and continue to meet the tough time lines and production requirements, rightfully imposed by our military partners in the U.S. and overseas, and we hope to have additional information to share with you shortly on that important aspect of our business.
It is also important to keep in mind that our newly opened plant was designed to provide loaded ammunition production up to 1 billion rounds, while also ensuring we could support the cutting-edge military programs we are currently proud to manage and answer the bell when the military ask a select few about the possibility, development of ammunition never deployed before on any front.
On the marketplace side of our business, we are finally putting in place a host of leveraging features on GunBroker.com that we identified as drivers for the acquisition a couple of years ago when the business was targeted by our management and our Board. The implication of these features in technology complex, but each are exciting and all will expand market share and drive shareholder value.
John will touch on some of these developments on both sides of our business when he speaks in a few minutes. Rob Wiley, CFO, will also talk through the past quarter’s numbers. 3Q doesn’t meet our financial performance standards, but it is also tracking in most respects with Vista, Olin and our other peers based upon public available information and management discussions with colleagues across the industry.
In speaking to you today, my goal is to make certain our shareholders and the markets are informed and aware of all of our corporate developments. The progress we have seen to-date and how we are identifying and responding to the current market challenges. We will continue to do so in order that everyone can understand our performance to-date and develop their clear — own clear picture of the opportunities we present at AMMO Incorporated.
I would once again like to extend my personal appreciation to all our shareholders, customers, employees for their support to our company during these exciting times. COVID never stopped us, political unrest didn’t disrail us and we are all just surviving a midterm stronger.
We will continue to expand the capacity Out of our new Wisconsin plant to address the domestic and export demands support our military and move as quickly as possible in improving the GunBroker.com marketplace experience through better customer treatment and leverage revenue drivers, all of which makes its way down to the bottomline for the benefit of our shareholders.
Now I would like to turn the call over to Rob Wiley, our CFO. Rob will provide additional color and details on our company’s financial performance through the past quarter.
Rob Wiley
Thank you, Fred. Welcome, everyone. Let me now review our second quarter financials in more detail. We ended the quarter increasing our ending cash by nearly 25% to $29 million. Current assets increased to approximately $133 million, while decreasing current liabilities to $31.5 million.
In total for the quarter, we had $424 million in total assets, $47 million in liabilities and $378 million in shareholders’ equity. This compares to our most recent year-end with $414 million in total assets, $40 million in liabilities and $374 million in shareholders’ equity.
We ended our second quarter with total revenues of approximately $48.3 million in comparison to approximately $61 million in the prior year quarter. This was a decrease of 21% from the prior year quarter. This decrease is in line with the industry decline of our peers of 23% quarter-over-quarter.
The performance of our manufacturing operations has softened with the market and the move into our new facility brought production offline for a longer period than originally anticipated, notwithstanding extensive planning undertaken months and events of the plant move. GunBroker also saw a softening in the marketplace revenue, as well as approximately 13%.
Our cost of goods sold was approximately $35.5 million for the quarter, compared to $34.8 million in the comparable prior year quarter. In this quarter, the manufacturing operations were forced to absorb a significant increase in commodity pricing across the Board, coupled with a dramatic increase in shipping costs.
We have seen commodity pricing begin to fall to a more new normalized level, which we believe should have a significant impact on our margin in our fourth fiscal quarter. Accordingly, this resulted in a gross margin of $12.8 million, compared to $26.2 million.
Coupled with the reduction in sales, the company also faced impactful one-time like legal expenses related to the proxy contest, as well as increased expenses related to the following, higher commodity costs, potentially increased freight costs, stock compensation, corporate insurance and payroll. We will also unfortunately see increased legal expenses in advisory service billings and other expenses impact us next quarter directly related to the proxy contest.
For this quarter, we recorded adjusted EBITDA of approximately $8.2 million, compared to the prior year quarter adjusted EBITDA of $24 million. This resulted in a loss per share of $0.01 or adjusted net income per share of $0.05 in comparison to earnings per share of $0.12 and adjusted net income per share of $0.17.
To address these increased costs, we have already implemented expense reductions of approximately $5 million in savings on an annualized basis for payroll-related expenses. We are continuing to make cost-cutting measures that we believe will not impact future growth of our company.
At the same time, AMMO and the market expect to see the stabilization of commodity pricing for our new plant comes to measurably increase production capacity from approximately 400 million rounds at the end of our most recent fiscal year to approximately 1 billion rounds and better absorb manufacturing-related expenses, which drive down cost of goods and thus increased gross profit. These reductions are designed to benefit both profit — our profit margin and net income.
Also, and as you have probably seen in our public announcements, we are implementing several marketplace enhancements at GunBroker.com, which are designed to drive revenue and gross profit, while significantly improving the user’s overall experience, such as in-house ACH and credit card processing, loyalty programs, data analytics offerings, as well as cartigability on the site. Management has been working on leveraging these opportunities and a suite of others since the acquisition of GunBroker.
We are reducing our guidance for our fiscal 2020 year to revenues in the range of $220 million to $240 million, EBITDA in the range of $30 million to $40 million and adjusted EBITDA in the range of $50 million to $60 million.
And with that, I will turn it over to John.
John Flynn
Thanks, Fred and Rob, and hello to everyone. Fred and Rob touched on important drivers and market friction, everyone within the industry is dealing with right now. Let me take a few minutes now to expand on some of the areas that they touched upon and try to provide some additional color where I can now and in the Q&A session that will follow.
First, I want to thank everyone and welcome to know that AMMO work through the proxy contest issues with Director Urvan and came out stronger and even more focused with the added benefit of new intellect and experience on our vibrant Board through the addition of Wayne Walker and Christos Tsentas.
The guidance of this newly constituted Board, the entire AMMO family top down really is fully committed to bringing to market the full development and production capabilities of our new Wisconsin plant, while building upon the existing marketplace platform at GunBroker.com.
I wanted to give everyone an update on the new plants. As you are undoubtedly aware, the plant opened on time and within budget. In and of itself, a notable achievement managed by a dedicated team in our Arizona office, in Wisconsin and because of the world-class work, our contractor and his subs did in standing up that plant.
That team pushed through the challenges faced globally with major supply chain disruption and fluid, if not principally rising material costs. The ribbon cutting a couple of months ago was momentous in the Manitowoc, Wisconsin community, political powers and representatives from the state, all came to tour the facility and see all what is going on in this amazing facility.
We have now consolidated almost the entirety of manufacturing operations within this new 185,000 square foot facility and through coordinated efforts of management and the Mayor’s office in Manitowoc, we also secured contiguous powder and primary storage that minimizes our costs and allows us to continue to enhance margin through right in time manufacturing and transportation cost reductions.
The facility now houses equipment and machinery we have been acquiring over the past couple of years, all of which allows us to strategically and incrementally increase production with the plan to elevate loaded ammunition moving out of the 13 May shipping docks from $400 million to $1 billion, allowing AMMO to further ascend within the global ammunition marketplace among our peers.
We have also designed and constructed a state-of-the-art engineering lab and underground range within this new plant that really allows us to remain on top of quality at every level of the production, while also answering the call we now regularly receive from our government and U.S. Military partners to design and manufacture cutting-edge ammunition, the best serves our men and women in near peer conflicts around the globe.
On the military side of our business, you have all seen what we are permitted to discuss publicly is concerns the BMMPR and SoT rounds. BMMPR is the Ballistic Match round that we developed for the U.S. Military and the SoT round is the Signature-on-Target round that we developed for the U.S. Military.
These programs are meeting all the critical milestone tests within our — with our DoD contracting partners and they are on track and within budget. We hope to be in a position to discuss other development opportunities through the course of this calendar year and into the next year.
The supply chain challenges do remain, however, everyone had certainly hoped that would be a thing of the past by now, but it isn’t. But we continue to effectively manage through those challenges daily.
The geopolitical forces at work when coupled with U.S. domestic policies inflation and a recession present both unique challenges but also opportunities for AMMO. The entire Western world has depleted its ammunition and munition stocks to levels not seen in many decades as the U.S. and its allies supply and support the Ukraine effort to push Russia out of its country.
As a result, the U.S. and its allies are understandably focusing now on utilizing their impressive governmentally owned ammunition manufacturing capabilities to resupply their respective ammunition and munition depots located throughout the globe.
You are going to ask what does that mean for AMMO. We are now attending to an increase in international and export business opportunities that we were unable to effectively and positively respond to during the past couple of years as U.S. demand outpaced current manufacturing output capabilities for AMMO and each one of our peers. So we expect to see market increase — increases in export transactions over the coming months and years.
The flip side of this international resupply need is that we were unable during the last quarter to import certain components or backfill certain ammunition rounds from the open market as those supplies were maintained within their respective countries where they were manufactured or they were directed to Ukraine.
I’d like to pivot now for a moment and let’s talk about our marketplace operations at GunBroker.com operated jointly out of our Atlanta base and with real-time support from our Arizona Corporate Office.
The marketplace team has been refined with the word Team Being the Focus. They are hard-charging and goal-driven and working around the clock to enhance the customer experience, so from shopping, selling, closing a transaction or engaging with customer service where needed, the process is incrementally more efficient and easier for the end user.
As we have announced, we are working right now to launch an onboard the internally managed online payment processing. Positive impact is at least two-fold, if not more. Importantly, we can better risk manage with our banking partners, while also driving revenue into AMMO at the transactional level, cutting away heavy fee loads being borne within the operations when we acquired the GunBroker.com family of companies.
We are also bringing carting to the marketplace, which will definitely make the purchasing or selling experience more fruitful and efficient, allowing you to acquire basket or cart items as you swiftly navigate the improved site. And we have continued to maintain the highest level of security and compliance interface to ensure we are supporting lawful transactions at every turn.
The last quarter has been exciting and challenging for the AMMO family, but we are excited to move on to our Annual Shareholders’ Meeting with our new directors and Steve Urvan fully on board and in lockstep with the balance of the Board and management.
We continue to spend money and time making sure we have amazing team members in Arizona, Wisconsin and Atlanta, and we appreciate everything they do for the organization day, night and through weekends to support our efforts.
Although, we have seen proportionately some of the same headwinds that our peers have in this past quarter, given my review their public filings and conversations with contemporaries within those organizations.
Management is confident in this team’s ability to improve the financial operations at every level as we reduce costs, increase capacity, bring new lines of high margin revenue to the income statement and the balance sheet.
We have more money in the bank than ever, and management and our Board continue to engage in regular discussions within the industry and beyond looking for accretive transactional opportunities.
Thanks to the leadership of Fred, his fellow directors and the amazing folks working at all three bases of operation, we remain confident the market-leading growth we have experienced since the 2016 birth of AMMO will be replicated as we march forward into 2023 and beyond.
Thanks again for allowing me to speak to you all today. I really do look forward to answering follow-up questions during the Q&A session to follow.
Fred Wagenhals
Thank you, John. I will now turn the call over to the Operator for questions. Thank you.
Question-and-Answer Session
Operator
[Operator Instructions] Today’s first question comes from Mark Smith with Lake Street Capital. Please go ahead.
Mark Smith
Hi, guys. First one for me, wondering if you could quantify kind of the lost sales as you work through the transition from one plant to another in Manitowoc. And at the same time, we will alternatively talk about the backlog?
Rob Wiley
Hi, Mark. Thanks for the question. This is Rob Wiley. So, yeah, we definitely had some loss of revenue due to the move into our new manufacturing facility, which in turn will increase our capacity quite significantly. Another reason for the revenue decrease was in our previous facility, we were limited by the space that we had. So our capacity was limited. We were able to supplement that revenue with import opportunities with the complications happening abroad those opportunities starting to tighten up. But with the new capacity that we have coming online in the state-of-the-art facility, we are able to transition that into export opportunities and look for that to continue in the future.
Mark Smith
Okay. And any insight into backlog of orders and kind of where that stands today?
Fred Wagenhals
It’s between $25 million and $30 million today, Mark.
Mark Smith
Okay. Perfect. And then next question, just any guidance as we think about the revenue guidance that you gave, previously you guys have given some split between kind of ammunition and marketplace revenue. Any thoughts that you are willing to give on the revenue split from each of these businesses built into guidance?
Fred Wagenhals
Yeah. That’s a good question. Thank you, Mark. We see the breakdown of revenue and the guidance of two-thirds ammunition and one-third GunBroker marketplace revenue.
Mark Smith
Okay. Okay. And then any thoughts just as we think about the cadence of sales in the guidance here in the second half of the year, will we be heavier here in this December quarter or will you still build into capacity and maybe March be a bigger revenue quarter?
Rob Wiley
Yeah. We expect it to be increasing throughout the remainder of the year, a pickup from Q2 into Q3 and the biggest quarter of the year be it Q4 when a lot of the production capacity is online.
Mark Smith
Okay. And then last one for me. Just want to confirm, as we think about adjusted EBITDA guidance. The guidance that you gave of $50 million to $60 million adjusted EBITDA, that still includes the excise tax add-back, correct?
Rob Wiley
Correct. Yeah. Adjusted EBITDA does include the excise tax add-back, included in adjusted EBITDA, or I guess, I should say that, we do have some increased costs this fiscal year due to the proxy contest. We had some significant expenses in Q2, and as we mentioned earlier on the call, there are additional expenses that will be included in our third quarter of this year.
Mark Smith
Would you expect those additional expenses to outweigh in December quarter to be larger than what they were in September quarter?
Rob Wiley
They will be larger than they were in the September quarter.
Mark Smith
Okay. Great. Thank you.
Rob Wiley
Thanks, Mark.
Operator
The next question comes from Matt Koranda with ROTH Capital. Please go ahead.
Matt Koranda
Hey, guys. Good afternoon. Just wanted to drill into the ammunition segment a bit more here, if I could. It sounds like it’s a bit of a mix of supply and demand issues that impacted the quarter. But I just wanted to see if we could kind of drill down further on that. What exactly, I guess, can you share in terms of production rates in the second quarter? Where were you in terms of quantifying unit production or utilization, however you want to characterize it in the quarter? How much was that impacted by sort of the move? And then maybe if you could, I know it’s not the usual here, but could you share where production is today or where it was in October, I guess, just to kind of give people comfort that you have ramped back up in terms of unit production.
Rob Wiley
Thanks for the question, Matt. This is Rob Wiley. Yeah. Production definitely was impacted by our move into our new facility. Really, machines weren’t up and running into a capacity that we would expect.
We expected until the end of September and further capacity coming online in October. We do are starting to see the benefits of added capacity coming on this line and feel that we will be close to running at full — our capacity will be significantly larger, I should say, in our fourth fiscal quarter of this year.
Matt Koranda
Yeah. Okay. But I guess implied in the guidance, if I am — if I heard it right, you are somewhere in the mid -$150 million for your core ammunition segment, which would suggest, that we are still not quite back up to the levels that we were last year in terms of ammunition revenue. So just trying to figure out why that is. Is it just a lower level of demand going forward that we see or is there something constraining your production rates in the back half of the year here?
John Flynn
Hi. This is John Flynn. Let me see if I can put a little bit of color on that. The production end of September and certainly aggressively moving into October and for all the months, they are going to follow now. the production output is increasing literally, if not daily at a weekly level.
We had a lot of assets that we acquired over the last 18 months or so months that we couldn’t deploy, because honestly, just space issues. So now we have this plant, all of that equipment was onboarded, placed into the plant and as each — all of those elements now in those lines are coming online at full tilt.
So we really started to see it towards in the September and really fully engaging with it in October and now that those capacity increases continue at least weekly, certainly monthly, and they will continue to climb until we get up into that approximate $1 billion loaded ammunition production capability.
Matt Koranda
Okay. I guess we will take the other net production questions offline. I do want to ask also, Rob, you mentioned in past periods, I guess, you covered some excess demand in the prior year with import. Is there any way to quantify sort of what you serve with import in the prior year, just so I can get a better sense for kind of core production?
Rob Wiley
No. I think that’s a hard number to quantify on a quarterly basis. I think we took those opportunities as they arose and the kind of more one-time opportunities. So it’s not like there was a fixed portion of the business related to that, it was just kind of as those opportunities came up. But as we did mention before, with the additional capacity that we have coming online and the export markets continuing to grow, we think that we will be able to have a great opportunity there.
John Flynn
Yeah. What I am — this is John.
Matt Koranda
Okay.
John Flynn
Yeah. Let me add a little bit. So there was — it seemed like a sort of a quasi paradigm shift that happened within at least our market and our operation within the market as related to the import backfill opportunities versus our international transactional activities, and that’s increased from my personal experience, that’s increased four or five, probably more than that, probably, five to tenfold in the last two months from all different points within the globe as people became aware of our plant coming online and what those capabilities were.
You have seen some press about some South American export opportunities that we have brought on board and we are actually performing under right now. And there’s a whole host of those types of transactions that are at different levels of maturation within our pipeline right now. So there was really a pivot.
And now the nice thing for us, really exciting thing for us is you are able to take this amazing plant now and turn it to not only make sure we can address the U.S. demand, which is we kind of normalize to a new normal, while being ready to go with our military programs are really exciting and humming along.
But also really not address and entertain these international transactions that we really couldn’t entertain with any kind of fulsome real opportunity to perform based upon constraints of equipment location and plant space, but now we are. So we are really working hard. Our whole team is working hard on how to bring those opportunities on Board for us.
Matt Koranda
Okay. Okay. And are any of those international export opportunities built into the guidance for this fiscal year?
Rob Wiley
No. Those export opportunities are all outside of the guidance.
Matt Koranda
Okay. Great. And then just on margins, sorry to take up so much time here, but I got a lot of questions. So gross profit margins in the quarter, I guess, obviously, suffered just given production was constrained and we have got some under absorption. But Rob, I just wanted to see if maybe you could help us kind of bridge how we got to the 1% gross margin in the second quarter, how much of that was sort of facility under absorption versus commodity cost versus the freight increases that you saw. Just want to try to disentangle that as we kind of ramp production back up in our model in the back half of the year?
Rob Wiley
Yeah. So I think the move definitely took into account some — the hit on the margin this quarter. We did also see higher commodity prices this quarter and really our sales prices weren’t able to rise at the same rate that the commodity prices were. As we mentioned, we do see commodity prices coming down and we do expect to benefit from that in our third fiscal quarter and fourth fiscal quarter of this year.
Matt Koranda
Okay. And then just lastly on GunBroker. I wanted to see if you guys could just address, like, why is GMV declining? It sounds like you guys have improved the experience overall. It sounds like overall, the experience is better for folks on the site, but GMV is down in the low 20% range, I guess, as I calculated on a year-over-year basis. Is that just overall market headwinds from the secondary gun market? Is there something going on there that you could just kind of unpack for us just in terms of GMV?
John Flynn
Yeah. We are seeing a slowdown in the activity on the GunBroker side. But as I am sure you have seen from our public announcements, we are working hard to increase the user experience of that site through programs like ACH and credit card processing, as well as data analytics.
I am sure you saw in our press release, our take rate increased from 5.2% this year up from 5% a year ago and I think up 20% from 2019. So we are working hard to make improvements to the site and expect those to come online in our fourth fiscal quarter and beyond.
Fred Wagenhals
If I can add to that. So you take — when you are looking at the gun broker operation, you do have to deal with the entire market. That’s a good window into the entire shooting sports market. a metric and a measure that I am sure you probably look at.
But we have got an incredible increase in the take rate, which from operating a business is critically important in operating that business product — from a profitable standpoint, you have got the onboarding of the payment processing that we are bringing to the market literally right now. It’s happening as we speak, all those tourists and turns on the dials are happening technologically. So that’s going to drive additional revenue and high margin dollars into our company very swiftly.
You have got an entire different experience with the onboarding of the customer base with a whole new system that makes it a more frictionless entrance into the marketplace. So it makes it faster, a swifter, more efficient experience for them that is still a high level of security that we have to maintain in operating that business.
And the carting is also really coming to the forefront here shortly. It’s in process right now. And that’s going to allow that experience that a lot of people are not used to online shopping, where they are gathering up their products into this cart and completing that transaction in a smooth and efficient way.
With our increased take rate and increased bucket size in those transactions, it’s going to drive additional revenue, while we continue with the rest of the market to deal with these recessionary drivers that we are dealing with, but we are really excited about what GunBroker is going and the pieces we are adding to it right now.
Matt Koranda
Okay. Got it, guys. I will leave it there. Thank you.
Fred Wagenhals
Thank you, Matt.
Operator
The next question comes from Edward Riley with EF Hutton. Please go ahead.
Edward Riley
Hi, guys. Great to hear the new sales channel in the export market. Just wondering, given the tough environment, could you just maybe comment on the steady relationships with some of the big box partners that you have?
Fred Wagenhals
John?
John Flynn
Yeah. We have got great. This is John. I should start there. We have got great relationships with the big box stores and working hard. We have got some things in development to expand some of those relationships with some different program opportunities, while also onboarding some new relationships we hope to be able to announce here shortly. But I think you are going to see the numbers tilting in that direction in a more profound way long-term strategically for the company from a stable revenue source for us and supporting those important relationships.
Fred Wagenhals
Yeah. This is Fred Wagenhals. I think you all know that I have great relationships with all the big box retailers and several of my Board members have extremely good relationship with Bass Pro, Johnny Morris.
We see nothing but good things happening from the meetings we have recently had and we are bringing on a new person, probably, can announce him first part of December. Many years of experience in this industry worldwide, Europe and the U.S., and we will be announcing a new COO here real shortly and he will be running the marketing department and heading it up.
So I am excited about where we are going. I think everyone knows that my partner and I started this business about six years ago from $2 million to $240 million. We believe we are going to beat that number this year. I am excited about where we stand with this company. This is my second public company that I have run.
People ask me, I have had a lot of calls over the last week, Fred you leaving, are you going anywhere. I am not going until the job is finished. But for me, I built a company from a cart table and three employees to $407 million a year in sales, took it from NASDAQ to New York Stock Exchange and I am going to beat that record.
This company has got a lot of legs behind it and all those people that invested in me when we first started, not going to let you down, we are going to take this company $500 million and above in the next couple of years.
Edward Riley
Okay. Great. Love the confidence, Fred. That’s it for me.
Operator
This concludes our question-and…
Fred Wagenhals
I want to thank, everybody, for sticking with us and coming on board, and we are not going to let you down. You are going to see what’s going to happen over the next two quarters. Thanks a lot. Have a good day. Look forward to seeing you next quarter.
Operator
The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
Be the first to comment