Actions of Ammunition (NASDAQ: POWW) closed 13.7% higher on Tuesday after the ammunition maker announced the resumption of production on a production line of “improved” .50 caliber ammunition.
Production will take place at the Jagemann Munition Components plant, which Ammo acquired as part of its acquisition of Jagemann in March 2019.
Normally this would look like a rather ho-hum announcement, but Ammo noted that the reason it is restarting production is “to meet increased market demand and meet pending orders” – suggesting that restarting production will be accompanied by increased sales. Further reinforcing this thesis, Ammo said he had received “increasing indications of interest in exporting from abroad.”
In this regard, at the end of last month, Ammo noted that it had won a “significant” ammunition export contract from an anonymous foreign buyer.
The ammunition directorate added that “2021 has started off as a great year for AMMO”. Over the past 12 months, Ammo has generated total sales of just $ 27.3 million. But the company says its .50 caliber production line alone is expected to generate a minimum of $ 40 million in annual revenue “at current production levels,” and if production increases, revenues could exceed $ 80 million. , almost triple the current levels of a single product line. .
No wonder investors are excited.
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