American Rebel Holdings, Inc. (AREB) is boldly positioning itself as "America's Patriotic Brand" in a time when national spirit and American values are being rekindled and redefined. The company has identified a significant market opportunity to design, manufacture, and market innovative concealed carry products and safes.
American Rebel accesses its market uniquely through its positioning as America's Patriotic Brand and the appeal of its products, as well as through the profile and public persona of its founder and Chief Executive Officer, Andy Ross. Andy Ross has a strong media presence, having hosted his own television show for 12 years, made multiple appearances at trade shows, and is well-known in the archery world as the founder of Ross Archery, which was the world's fastest-growing bow company in 2007 and 2008. Andy has also released 3 CDs, done numerous radio and print interviews, and performed many concerts in front of thousands of people. This allows him to present American Rebel to large numbers of potential customers through the appeal of his music and other supporting appearances.
Business Overview
American Rebel operates primarily as a designer, manufacturer and marketer of branded safes and personal security and self-defense products. Additionally, the company designs and produces branded apparel and accessories. The company believes that when it comes to their homes, consumers place a premium on their security and privacy. American Rebel's products are designed to offer customers convenient, efficient and secure home and personal safes from a provider that they can trust. The company is committed to offering products of enduring quality that allow customers to keep their valuable belongings protected and to express their patriotism and style, which is synonymous with the American Rebel brand.
American Rebel's safes and personal security products are constructed primarily of U.S.-made steel. The company believes its products are designed to safely store firearms, as well as store customers' priceless keepsakes, family heirlooms and treasured memories and other valuables, and it aims to make its products accessible at various price points for home and office use. American Rebel believes its products are designed for safety, quality, reliability, features and performance.
To enhance the strength of its brand and drive product demand, American Rebel works with its manufacturing facilities and various suppliers to emphasize product quality and mechanical development in order to improve the performance and affordability of its products while providing support to its distribution channel and consumers. The company seeks to sell products that offer features and benefits of higher-end safes at mid-line price ranges.
Despite the company's efforts, the market for safes has not shown the growth American Rebel anticipated. For the fiscal year ended December 31, 2023, American Rebel reported annual revenue of 16,228,310, a decrease of 8% compared to the prior year.
Through its growing network of dealers, American Rebel promotes and sells its products in select regional retailers and local specialty safe, sporting goods, hunting and firearms stores, as well as online, including its website and e-commerce platforms such as Amazon.com.
Financials
For the fiscal year ended December 31, 2023, American Rebel reported annual revenue of 16,228,310, a decrease of 8% compared to the prior year. The company's annual net income was a loss of 11,100,784, and its annual operating cash flow was a negative 7,036,069, with annual free cash flow of negative 7,042,369.
In the first quarter of 2024, American Rebel reported revenue of 4,043,837, a decrease of 8% compared to the first quarter of 2023. The company's net loss for the quarter was 2,701,278, and its operating cash flow was a negative 1,907,836, with free cash flow of negative 1,907,426. The decrease in revenue and profitability was primarily due to a slowdown in sales and increased costs of goods sold.
Recent Developments
Despite the recent financial challenges, American Rebel remains focused on expanding its product offerings and distribution channels. The company recently entered into a Master Brewing Agreement to produce and sell American Rebel branded spirits, with the initial product being American Rebel Light Beer. The company has also been actively pursuing opportunities in the cannabis dispensary industry, designing a safe tailor-made for the cannabis industry.
Liquidity
American Rebel's liquidity position remains a concern, as the company has relied heavily on debt financing to fund its operations and growth initiatives. As of March 31, 2024, the company had a working capital balance of 3,010,604, down from 4,551,927 at the end of 2023. The company's debt load has also increased, with total debt of 5,710,438 as of March 31, 2024, up from 3,411,143 at the end of 2023.
Outlook
Looking ahead, American Rebel's management team remains optimistic about the company's long-term prospects, citing the growing demand for home and personal security products, as well as the potential for the American Rebel brand to expand into new product categories and licensing opportunities. However, the company will need to address its liquidity challenges and improve its operational efficiency to achieve sustained profitability and growth.
Conclusion
Overall, American Rebel Holdings, Inc. (AREB) is a company with a unique brand positioning and a diverse product portfolio, but it faces significant financial and operational hurdles that will need to be addressed in the near term. Investors should closely monitor the company's progress in executing its growth strategy and improving its financial performance.