PEW Q3 2026 earnings call transcript, November 12, 2026

elevated IPO driven demand last year. Our margins tell a different story. Gross profit increased 44% versus the prior year. And gross margin was also up 90 basis points from the second quarter. This marks our third consecutive quarter of year over year gross margin expansion. Three factors drove the margin improvement. Higher average selling price. Better sourcing including an increase in direct for manufacturer purchasing and PEW logistics. Which carries gross margin significantly higher than our retail business. Through the first nine months of the year total revenue increased 5% while gross margin increased 280. basis points. Our customer metric continued to move in the right direction. Customer lifetime value increased 4% year over year to $825 with new user growth of 26% in the quarter. Total site traffic increased 4% year over year with mobile engagement remaining a key. driver of our business accounting for approximately 70% of site traffic and 68% of revenue in the third quarter. PEW Logistics, our white label direct consumer platform for manufacturers, has grown service revenue every quarter since we launched in the first quarter. Service revenue is approximately $300,000 in the third quarter, up 28% from the second quarter, and up nearly 80% from our first quarter of operations, bringing year-to-date service revenue of just over $600,000. The platform has now processed more than...

$3.1 million in gross merchandise value. While PEW is still early, we believe the indicators that matter most are moving in the right direction, which is consistent sequential growth, the quality of manufacturers joining the platform, and a margin profile well above our... the e-commerce retail business. In October, we added Saar as our fourth manufacturer through its exclusive U.S. importer, SaarUSA. Founded in 1880, Saar has a long and trusted history of serving military and law enforcement customers in more than 80 countries. Together with Kel-Tec, Deria Arms, and Backwood Suppressors... P-Logistics now serves a diverse manufacturer base spanning an established American firearms manufacturer, two international brands, and a suppressor maker. We're also expanding the service we provide to our manufacturer customers. Last week we launched Kel-Tec's new website, which P-Logistics... ...operates on a full service basis, including direct consumer sales and merchandising, expanding our role and value proposition beyond fulfillment to full e-commerce operations. Suppressors are one of the fastest growing categories in the industry. NFA background checks, which include suppressors, increased 129% year... in September, and then on October 9, ATF announced it will no longer enforce NFA registration requirements for suppressors. Federal background checks and state laws still apply, which means demand is growing while compliance remains. That plays directly into our strength. We've built compliant direct consumer...

...infrastructure over 16 years, and through P-Logistics and our partnership with Backwood Suppressors, we're positioned to serve the demand for both consumers and manufacturers. We believe these developments further increase the value of compliant direct consumer infrastructure. Now let me turn to CAMFOR. On October 26, we completed the acquisition... ...of 100% of CAMFOR, a wholesale distributor of firearms, ammunition, and outdoor products. Founded in 1952 and headquartered in Westfield, Massachusetts, they serve independent dealers nationwide. CAMFOR generated an audited net... ...revenue of approximately $77 million in 2025, a portion of which came from sales to Grab-A-Gun, and will be eliminated in consolidation on a go-forward basis. With CAMFOR, Grab-A-Gun now reaches the market three ways. Consumer... ...through Grab-A-Gun.com, independent dealers through CAMFOR, and manufacturers directly through PEW Logistics. As the industry consolidates, we believe manufacturers will increasingly value partners that can reach both dealers and consumers efficiently. ...and compliantly. What we bring to CAMFOR is the technology we have built over 16 years. AI-powered demand prediction, automated pricing across approximately 73,000 active SKUs, automated procurement, and our e-gum. ...which has supported more than 1 million direct ship transactions. We believe applying these capabilities to CAMFOR's wholesale operations can improve purchasing economics and inventory productivity. In turn, CAMFOR expands our product access.

It extends our reach into the independent dealer channel. The purchase price was approximately $34 million on a cash-free, debt-free basis, subject to customary adjustments, and was valued primarily on the inventory and receivables acquired. We funded the transaction entirely with cash on hand, with no external financing and no shares issued. As a result, the acquisition did not dilute existing shareholder ownership. CAM4 continues to operate under its own name with its own sales team and dealer terms. Our fourth quarter results will include CAM4 from October 26th, and we expect to file its audited financial statements and pro forma information on a Form 8-KA in early January. Let me speak directly to how we allocate capital. Our objective is simple, build long-term shareholder value per share while keeping our balance sheet strong. Liquidity comes first. Next, we fund the core business, including our new headquarters and the CAMFOR integration. Then we invest in organic growth, like PEW Logistics, where we can build on infrastructure we already own. After that, we can bolt on acquisitions that fit our industry and clear a high return bar. We need to consider share repurchases when we believe our stock trades below its intrinsic value. Every dollar has to earn its place on that list. CAMFOR is the first real test of our capital discipline. It is asset backed, all cash and non-dilutive.

We have also strengthened the team behind these decisions. JT has joined as Chief Financial Officer in August and John Swanigan joined as Chief Technology Officer in September. Both bring a strong background in their respective areas of expertise. And are already making contributions in a relatively short amount of time they've been with us. With that, I'll pass it over to JT to walk us through the financial details for the quarter. JT.

I'll now provide additional details. on our third quarter financial performance. Third quarter revenue was $21.2 million, a decrease of approximately $1 million or 4.7% compared to the $22.3 million. in the third quarter of 2025. Firearms product sales were $17.3 million, down 4.5% year over year. The decline was primarily due to a 14% decrease in unit volume. Partially offset by a 10% increase in average sales price. Non-firearms product sales were $3.7 million, a decrease of 11.8% year over year, and was primarily due to a 26% decrease in unit volume. Partially offset by a 20% increase in average sales price. Pew logistics service revenue of $0.3 million partially offset this decline. In this quarter, we redirected marketing investment towards search engine optimization and organic customer acquisition, which has helped to fuel new customer growth, improve website engagement, and resulted in customer lifetime value expansion. We also believe the year-over-year declines in unit volume across both categories reflect, in part, the heightened customer awareness and engagement with our online sales platform during the same period last year, following our July. 2025 public listing. Gross profit in the third quarter increased $0.9 million to $3.1 million, representing 14.4% of revenue, compared to $2.1 million. or 9.6% of revenue in the prior year period. Gross margin expanded 480 basis points, driven by the higher average sales price across both firearm and non-firearm products, increased direct purchasing from manufacturers, as well as growth in the higher margin PEW logistics business.

We remain focused on building on this progress through disciplined pricing, continued optimization of our product mix, and the expansion of higher margin revenue opportunities, including PEW logistics. We believe these efforts can support further margin improvement over time while remaining competitive and delivering value to our customers. Q3 also represented the continued investment in our team and public company infrastructure. These investments, together with costs related to the CAMFOR acquisition, added approximately $2.5 million of operating expenses, primarily $1.3 million of employee compensation and 0.9 million of professional services, including $0.7 million related to CAMFOR. These increases were offset by a $2.6 million decrease in stock-based compensation. As a result, total up operating expenses were $6.8 million compared with $6.9 million in the prior year quarter. Net loss for the third quarter was $3 million, an improvement of $0.8 million compared to the prior year period net loss of $3.8 million. The year-over-year... ...improvement was primarily driven by the increase in growth profit, a reflection of continued gross margin expansion. Adjusted EBITDA for the third quarter was a loss of $2.1 million compared to an adjusted EBITDA loss of $0.8 million. $2.9 million in the prior year period. The $1.2 million change resulted from normalized operating costs increasing $2.1 million related to our continued investment in the business to support our longer-term growth initiatives and operating as a public company. This increase was partially...

...offset by the $0.9 million year-over-year gross profit improvement. Now turning to the balance sheet. We ended the quarter with $96 million in cash, down $1.5 million from the end of the... ...the second quarter. We incurred $2.8 million in capex spend, primarily related to the continued build-out of our new corporate headquarters, which was partially offset by $1.3 million of positive operating cash flow. When compared to year-end 2025, our... ...the ending third quarter cash balance declined $14.3 million, primarily reflecting three factors during the first nine months of the year. We used approximately $2.4 million for share repurchases, invested... ...$5.7 million in property and equipment, including expenditures related to our new headquarters, as well as capitalized software additions, and net cash used in operating activities of $7.3 million. ...$6 million, largely reflecting our net loss year to date. As we look to the fourth quarter and into 2027, we remain focused on disciplined capital allocation, expense management, and improving operating performance and cash generation. PEW Logistics gives us an opportunity... to broaden our revenue streams and improve our overall business mix over time. Because the platform runs on infrastructure and capabilities we already own, incremental activities carry attractive margins with limited additional... investment. We're focused on deepening each manufacturer relationship, as we've done with Caltech, where we've moved from fulfillment to operating their full direct to consumer business. Over time...

CAMP4's established manufacturer relationships may also create opportunities to expand our reach and generate additional activity across the platform. Our focus is on developing these opportunities and translating increased activity... ...into a more meaningful contribution to revenue and profitability over time. During the first nine months of the year, we repurchased approximately $2.4 million of our common stock under our previously authorized $20 million... ...share repurchase program. No shares were repurchased during the third quarter, and our prior share repurchase plan expired in early August. As Mark previously mentioned, we continue to take a disciplined approach to capitalizing... ...allocation, balancing investment in our business and growth initiatives, along with evaluating strategic M&A opportunities, all with the overarching objective of maintaining balance sheet flexibility and creating long-term shareholder value. Moving briefly now to CAMFOR. From a financial and operating perspective, we believe CAMFOR is a complementary addition to Grab-A-Gun that broadens our capabilities across the industry. The opportunity is to build on the strengths of our retail and logistics operations by adding an established wholesale distribution plan. Our focus is on disciplined execution and translating the capabilities across our businesses into tangible operating improvements. We will be monitoring CAMFOR's performance, inventory productivity, purchasing efficiency, and cash generation, whilst identifying opportunities to apply our technology,

We will be monitoring the best. and operating expertise where they can create value. At the same time, we recognize the importance of preserving CAMFOR's established manufacturer and dealer relationships and the operating model that has supported the business for decades. We approached this transaction with a focus on capital discipline. Funding the acquisition entirely with cash on hand, without external financing or equity issuance allowed us to expand our capabilities without adding transaction-related debt or diluting shareholders. As Mark mentioned earlier, we expect to file CAMFOR's audited financial statements and the required pro forma financial information in an amended Form 8K within the time period permitted by SEC rules, currently expected to be early January. Beyond the information already disclosed, we do not have additional financial details to share at this time. As we gain experience and interaction with the combined businesses, we will continue to communicate meaningful developments through our regular reporting process. From here, our focus is on translating our investments and operating initiatives into stronger financial performance. That means maintaining fiscal discipline, improving operating efficiency, and generating cash as we execute across our businesses. Ultimately, we are focused on strengthening our operating performance. And building sustainable value for shareholders. With that, I'll turn the call back over to Mark before we move into Q&A. Mark?

Let me quickly reiterate the key themes from today's discussion. First, gross margin rose 480 basis points to 14.4%, marking our third consecutive quarter of year-over-year expansion, even as unit volume softened. Second, Pew Logistics now serves for manufacturers and is expanding. Beyond fulfillment into full e-commerce operations. Third, our acquisition of CAMFOR was a disciplined all-cash investment that gives us three complementary routes to market without diluting shareholders. And finally, we will stay disciplined with every dollar we deploy, with liquidity as our first priority. We believe the market will measure us by execution, not announcements. Our focus now is on realizing the potential of CAMFOR, continuing to scale P-Logistics, returning the core business to growth, and demonstrating measurable progress every quarter. I want to close by recognizing our entire team for the dedication and hard work they bring to the business every day. I also want to thank our shareholders for their continued interest, engagement, and support. We appreciate your confidence in our company and look forward to delivering.

Your first question is from the line of Matt Kuranda with Roth Capital. Matt, your line is open. Please go ahead.

thank you again for joining us today and for your continued interest in grab a gun we look forward to connecting with many of you at our upcoming investor conferences and sharing further progress on our quarter and full year earnings call in March thank you and have a great day this concludes today's call thank you for attending you may now disconnect