Outdoor Holding Company 875 Series A Cumulative Redeemable Perpetual Preferred Stock (POWWP) QQ3 2024 Results – Mixed Top-Line Growth, Positive Cash Flow, and Strengthened Liquidity
Executive Summary
Outdoor Holding Company reported Q3 2024 results for POWWP (875 Series A Cumulative Redeemable Perpetual Preferred Stock) with revenue of $36.0 million and gross profit of $10.9 million, achieving a gross margin of approximately 30.3%. The quarter recorded an operating loss of $2.58 million and a net loss of $1.64 million, but delivered meaningful operating cash flow of $10.17 million and a free cash flow of $7.22 million. EBITDA stood at $2.84 million, underscoring earnings resilience despite negative operating income driven by amortization and related costs. The balance sheet shows a sizable asset base, led by substantial intangibles and goodwill, and a robust liquidity position with cash and equivalents of roughly $54.68 million and net debt of about -$41.24 million, reflecting substantial cash versus debt at quarter-end.
YoY revenue declined by 6.99% while QoQ revenue rose 4.75%, indicating modest near-term demand stabilization but ongoing profitability headwinds. The company’s quarterly performance is dominated by heavy non-cash charges (depreciation & amortization) and interest expense, which compress operating income and net income even as cash generation remains strong. With current assets of about $129.0 million and current liabilities of $26.6 million, the liquidity profile is substantial (current ratio ~4.85, quick ratio ~3.00).
Management commentary is not available in the provided transcript, limiting the ability to quote point-in-time guidance or strategic remarks. Nevertheless, the quarter reinforces a mostly balance-sheet-driven strength: substantial cash reserves, limited leverage, and a sizable equity base supported by intangibles. Investors should monitor revenue trajectory, margin progression, and any shifts in regulatory or competitive dynamics affecting the online firearms marketplace ecosystem that underpins Outdoor Holding’s cash-generating engines.
Net Income: -$1.644 million; Net margin: -4.57%; YoY margin change: +59.93%; QoQ margin change: +78.07%
EBITDA: $2.837 million; EBITDA margin: 7.88%
Financial Highlights
Revenue and profitability metrics (quarter ended 2024-12-31, Q3):
- Revenue: $36.006 million; YoY change: -6.99%; QoQ change: +4.75%
- Gross Profit: $10.899 million; Gross margin: 30.27%; YoY margin change: -13.00%; QoQ margin change: +31.50%
- Operating Income: -$2.576 million; Operating margin: -7.16%; YoY margin change: +40.55%; QoQ margin change: +70.79%
- Net Income: -$1.644 million; Net margin: -4.57%; YoY margin change: +59.93%; QoQ margin change: +78.07%
- EBITDA: $2.837 million; EBITDA margin: 7.88%
- Earnings per Share (EPS): -$0.03; Diluted EPS: -$0.03; Weighted avg shares: 118.447 million
- Cash flow: Net cash provided by operating activities $10.168 million; Free cash flow $7.224 million; Operating cash flow yield (vs revenue): ~28.2%
- Balance sheet highlights: cash and cash equivalents $54.68 million; total assets $400.62 million; total liabilities $39.23 million; stockholders’ equity $361.38 million; long-term debt $12.54 million; total debt $13.44 million; net debt position negative $41.24 million (net cash).
- Liquidity and efficiency: current ratio 4.85; quick ratio 2.99; cash ratio 2.05; receivables turnover 1.71x; inventory turnover 0.58x; asset turnover 0.09x; gross margin 21%–30% depending on the data source; payout indicators show a negative dividend payout ratio reflecting no mandatory cash dividends on POWWP in the period.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
36.01M
-6.99%
4.75%
Gross Profit
10.90M
-13.00%
31.50%
Operating Income
-2.58M
40.55%
70.79%
Net Income
-1.64M
59.93%
78.07%
EPS
-0.03
25.00%
57.14%
Key Financial Ratios
currentRatio
4.85
grossProfitMargin
20.9%
operatingProfitMargin
-5.44%
netProfitMargin
-4.57%
returnOnAssets
-0.41%
returnOnEquity
-0.46%
debtEquityRatio
0.04
operatingCashFlowPerShare
$0.09
freeCashFlowPerShare
$0.06
dividendPayoutRatio
-47.1%
priceToBookRatio
8.33
priceEarningsRatio
-457.51
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings transcript availability: Not provided in the data set. There are no management quotes or thematic highlights available from an earnings call within the supplied materials. Consequently, key takeaways on strategy, execution, or guidance are not extractable from a transcript in this instance.
N/A
— N/A
N/A
— N/A
Forward Guidance
Guidance specifics were not disclosed in the provided materials. Given the standalone QQ3 2024 dataset, management commentary (if any) could influence investors’ assessment of growth drivers (GunBroker marketplace monetization, banner advertising contribution, and potential expansion of online commerce in related categories) and operating leverage. In the absence of formal guidance, the following factors should be monitored for a plausible trajectory: (1) revenue stabilization or growth drivers in the GunBroker ecosystem, (2) progression toward margin expansion through non-cash costs like amortization normalization or cost control, (3) monetization opportunities from advertising and ancillary services, and (4) regulatory or macro headwinds that could impact firearms-related e-commerce. Our assessment is that the near-to-medium term revenue path appears to be stabilizing after a YoY decline, but profitability will continue to hinge on operating leverage and amortization management. Investors should watch updates on quarterly revenue growth rates, changes in gross margins, and any shifts in working capital that could affect cash generation.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
POWWP Focus
30.27%
-5.44%
-0.46%
-457.51%
POWW
20.90%
-5.44%
-0.46%
-37.83%
FRGAP
41.40%
-2.47%
-22.20%
0.00%
XOMAO
73.00%
-6.97%
-5.20%
-7.34%
SQFTP
67.00%
0.41%
35.80%
11.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Current QQ3 2024 results portray a company with ample liquidity and meaningful operating cash generation, yet negative operating profitability due to non-cash and financing costs. The robust balance sheet and net cash position provide downside protection, but the business remains exposed to regulatory risk and platform-specific execution challenges. The key to a more constructive investment view lies in visibility on revenue growth in the GunBroker ecosystem, meaningful margin progression, and evidence of sustainable operating leverage. If management can translate cash flow strength into improved operating margins and sustainable topline growth, POWWP could offer downside protection through a strong balance sheet while delivering upside from expanded monetization and potential strategic initiatives. In the near term, investors should maintain a cautious stance, favoring transparency on forward guidance, cost controls, and any strategic actions that could materially alter the earnings trajectory.
Key Investment Factors
Growth Potential
Moderate upside from online marketplace expansion (GunBroker) and related advertising services. The company posted solid operating cash flow and a growing liquidity cushion, suggesting capacity to fund growth initiatives, potential platform enhancements, or selective acquisitions. If monetization of ancillary services accelerates and margin discipline improves, ROIC could approach mid-to-high single digits over the next 2–3 quarters.
Profitability Risk
Key risks include continued negative operating income driven by high amortization and operating costs,依 regulatory and legal exposure in firearms commerce, reliance on a single principal marketplace platform, and potential volatility in online advertising demand. High intangible assets and goodwill create impairment risk if revenue fails to meet expectations. The lack of formal guidance in the provided materials also introduces uncertainty around management’s near-term targets.
Financial Position
Strong liquidity with cash of ~$54.7 million and net debt of -$41.2 million. The balance sheet shows a heavy intangible asset base (~$209.8 million including goodwill and intangibles) and limited leverage. The company sustains positive operating cash flow (CFO ~$10.17 million) and free cash flow (~$7.22 million) despite the non-cash depreciation/amortization burden and interest expense.
SWOT Analysis
Strengths
Strong liquidity position with cash and cash equivalents of approximately $54.68 million and a net cash position of about -$41.24 million.
Positive operating cash flow: CFO of $10.17 million and free cash flow of $7.22 million for QQ3 2024.
Healthy current ratio (~4.85) and quick ratio (~3.00), indicating solid short-term liquidity.
EBITDA of $2.84 million with positive EBITDA margin (7.88%), suggesting some earnings resilience despite a negative net/net operating income.
Substantial asset base with conservative leverage (low long-term debt; total debt around $13.44 million; equity base robust at ~$361.38 million).
Weaknesses
Negative operating income and net income in QQ3 2024, signaling ongoing profitability challenges.
High reliance on intangible assets (Goodwill $90.87 million; Intangibles $118.96 million) which increases impairment risk if revenue trajectory softens.
Revenue growth is not consistently accretive to margins; YoY revenue declined (-6.99%) with only modest QoQ improvement (+4.75%).
Limited disclosure of management commentary and forward-looking guidance in the provided materials.
Opportunities
Expansion of GunBroker marketplace monetization, including advertising and ancillary services, could lift gross margins and cash flow.
Potential capital allocation opportunities (selective acquisitions or share repurchases, subject to liquidity and strategic fit).
Operational improvements and cost discipline could enhance operating leverage and reduce dependence on non-cash amortization.
Threats
Regulatory and political risk surrounding firearms commerce and online marketplaces.
Competitive pressure in e-commerce marketplaces; potential shifts in online advertising spend.
Impairment risk associated with a large intangible/goodwill base if revenue trajectory weakens.
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