- Net Sales $43.4
Million
- Gross Margin 45.4% (+180 Basis Points)
- Traditional Channel Sales $25.0
Million – E-Commerce Channel Sales
$18.4 Million
- Operating Cash Flow of $5.2
Million
COLUMBIA, Mo., Sept. 7,
2023 /PRNewswire/ -- American Outdoor Brands,
Inc. (NASDAQ Global Select: AOUT), an industry leading provider
of products and accessories for rugged outdoor enthusiasts, today
announced financial results for the first quarter of fiscal 2024
ended July 31, 2023.
First Quarter Fiscal 2024 Financial Highlights
- Quarterly net sales were $43.4
million, a decrease of $231,000, or (0.5%), compared with net sales of
$43.7 million for the comparable
quarter last year. Traditional channel net sales increased 8.4%,
while e-commerce net sales declined 10.6%. Compared with pre-COVID
levels in fiscal 2020, quarterly net sales increased 30.8%.
- Quarterly gross margin was 45.4%, an increase of 180 basis
points, compared with quarterly gross margin of 43.6% for the
comparable quarter last year.
- Quarterly GAAP net loss was $4.1
million, or ($0.31) per
diluted share, compared with a GAAP net loss of $5.7 million, or ($0.42) per diluted share, for the comparable
quarter last year.
- Quarterly non-GAAP net income was $98,000, or 0.01 per diluted share, compared with
non-GAAP net income of $84,000, or
$0.01 per diluted share, for the
comparable quarter last year. GAAP to non-GAAP adjustments for net
income exclude acquired intangible amortization, stock
compensation, technology implementation, and other costs. For a
detailed reconciliation, see the schedules that follow in this
release.
- Quarterly Adjusted EBITDAS was $1.1
million, or 2.6% of net sales, compared with $1.4 million, or 3.2% of net sales, for the
comparable quarter last year. For a detailed reconciliation, see
the schedules that follow in this release.
Brian Murphy, President and Chief
Executive Officer, said, "I am pleased with our first quarter
fiscal 2024 results, which reflected solid execution in sales,
profitability, and capital management, combined with ongoing
progress against our long-term strategic objectives. Net
sales were generally flat compared with the prior year, a result
that met our expectations and reflected growth of nearly 31% over
our pre-pandemic first quarter of fiscal 2020. Our shooting
sports category saw a slight decline in net sales compared with the
prior year, reflecting ongoing industry trends in that space, and
was offset by a slight increase in our outdoor lifestyle category,
which reflected the strength of our brands in this growing part of
our business. We continued to benefit from our strategy to
intentionally place our brands where consumers expect to find them,
whether online or in-store. While e-commerce net sales
declined in the quarter, traditional channel net sales growth was
strong, supported by new product introductions in hunting and
fishing under our BOG and BUBBA brands.
"Innovation is our core strength and a key element in our
long-term growth strategy. Our Dock & Unlock™ process fuels
that innovation. In the first quarter, we officially launched
our new BUBBA tournament-grade Pro Series Smart Fish Scale (BUBBA
Pro SFS™) and accompanying app, our first entry into the large,
underserved, 'catch and release' market. Since its launch in
May, the BUBBA Pro SFS™ was awarded 'Best Cutlery, Hand Pliers and
Tools' at ICAST® 2023, the world's largest sportfishing tradeshow,
and was named the official scale of Major League Fishing beginning
with the 2024 Bass Pro Tour season. This is just one of many
exciting and innovative new products resulting from our Dock &
Unlock™ process that, we believe, will fuel our future growth."
Andrew Fulmer, Chief Financial
Officer, said, "In the first quarter of fiscal 2024, we further
strengthened our balance sheet, generated strong operating cash
flow and free cash flow, and continued to demonstrate effective
capital deployment. We generated operating cash flow of
$5.2 million in the quarter, paid
down the remaining $5.0 million on
our $75.0 million expandable line of
credit, and repurchased $2.3 million
of our stock. We ended the first quarter with a cash balance
of $18.7 million and zero
debt."
"Turning to our outlook, we believe our brands remain well
positioned to capitalize on positive, long-term consumer outdoor
participation trends. As a result, we continue to believe that our
net sales for fiscal 2024 could exceed fiscal 2023 net sales by as
much as 3.5%. We also believe our solid financial position enables
us to continue investing in our business, returning capital to our
stockholders, and addressing the exciting growth opportunities we
have identified for our company," concluded Fulmer.
Conference Call and Webcast
The Company will host a
conference call and webcast today, September
7, 2023, to discuss its first quarter fiscal 2024 financial
and operational results. Speakers on the conference call will
include Brian Murphy, President and
Chief Executive Officer, and Andrew
Fulmer, Chief Financial Officer. The conference call
may include forward-looking statements and a discussion of non-GAAP
financial measures. The conference call and webcast will begin at
5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Those interested in
listening to the conference call via telephone may call directly at
(833) 630-1956 and ask to join the American Outdoor Brands
call. No RSVP is necessary. The conference call audio
webcast can also be accessed live on the Company's website at
www.aob.com, under the Investor Relations section.
Reconciliation of U.S. GAAP to Non-GAAP Financial
Measures
In this press release, certain non-GAAP financial
measures, including "non-GAAP net income and "Adjusted EBITDAS" are
presented. A reconciliation of these and other non-GAAP financial
measures are contained at the end of this press release. From time
to time, the Company considers and uses these non-GAAP financial
measures as supplemental measures of operating performance in order
to provide the reader with an improved understanding of underlying
performance trends. The Company believes it is useful for
itself and the reader to review, as applicable, both (1) GAAP
measures that include (i) amortization of acquired intangible
assets, (ii) stock compensation, (iii) technology implementation,
(iv) acquisition costs, (v) stockholder cooperation agreement
costs, (vi) income tax adjustments, (vii) interest expense, (viii)
income tax expense, and (ix) depreciation and amortization; and (2)
the non-GAAP measures that exclude such information. The Company
presents these non-GAAP measures because it considers them an
important supplemental measure of its performance and believes the
disclosure of such measures provides useful information to
investors regarding the Company's financial condition and results
of operations. The Company's definition of these adjusted financial
measures may differ from similarly named measures used by others.
The Company believes these measures facilitate operating
performance comparisons from period to period by eliminating
potential differences caused by the existence and timing of certain
expense items that would not otherwise be apparent on a GAAP
basis. These non-GAAP measures have limitations as an
analytical tool and should not be considered in isolation or as a
substitute for the Company's GAAP measures. The principal
limitations of these measures are that they do not reflect the
Company's actual expenses and may thus have the effect of inflating
its financial measures on a GAAP basis.
About American Outdoor Brands, Inc.
American Outdoor Brands, Inc. (NASDAQ Global Select: AOUT) is an
industry leading provider of outdoor products and accessories,
including hunting, fishing, camping, shooting, outdoor cooking, and
personal security and defense products, for rugged outdoor
enthusiasts. The Company produces innovative, top quality
products under its brands BOG®; BUBBA®; Caldwell®; Crimson Trace®;
Frankford Arsenal®; Grilla Grills®; Hooyman®; Imperial®;
LaserLyte®; Lockdown®; MEAT!; Old Timer®; Schrade®; Tipton®; Uncle
Henry®; ust®; and Wheeler®. For more information about all
the brands and products from American Outdoor Brands, Inc., visit
www.aob.com.
Safe Harbor Statement
Certain statements contained in
this press release may be deemed to be forward-looking statements
under federal securities laws, and we intend that such
forward-looking statements be subject to the safe harbor created
thereby. All statements other than statements of historical facts
contained or incorporated herein by reference in this press
release, including statements regarding our future operating
results, future financial position, business strategy, objectives,
goals, plans, prospects, markets, and plans and objectives for
future operations, are forward-looking statements. In some cases,
you can identify forward-looking statements by terms such as
"anticipates," "believes," "estimates," "expects," "intends,"
"targets," "contemplates," "projects," "predicts," "may," "might,"
"plan," "would," "should," "could," "may," "can," "potential,"
"continue," "objective," or the negative of those terms, or similar
expressions intended to identify forward-looking statements.
However, not all forward-looking statements contain these
identifying words. Specific forward-looking statements in this
press release include our strategy to intentionally place our
brands where consumers expect to find them, whether online or
in-store; our belief that innovation is our core strength and a key
element in our long-term growth strategy; our belief that our Dock
& Unlock process fuels our innovation; our belief that our Dock
& Unlock™ process will fuel our future growth; our belief that
our brands remain well positioned to capitalize on positive,
long-term consumer outdoor participation trends; our continued
belief that our net sales for fiscal 2024 could exceed fiscal 2023
net sales by as much as 3.5%; and our belief that our solid
financial position enables us to continue investing in our
business, returning capital to our stockholders, and addressing the
exciting growth opportunities we have identified for our company.
We caution that these statements are qualified by important risks,
uncertainties, and other factors that could cause actual results to
differ materially from those reflected by such forward-looking
statements. Such factors include, among others, potential
disruptions in our ability to source the materials necessary for
the production of our products, disruptions and delays in the
manufacture of our products, and difficulties encountered by
retailers and other components of the distribution channel for our
products; economic, social, political, legislative, and regulatory
factors; lawsuits and their effect on us; inventory levels, both
internally and in the distribution channel, in excess of demand;
natural disasters, pandemics, seasonality, news events, political
events, and consumer tastes; future investments for capital
expenditures; future products and product development; the
features, quality, and performance of our products; the success of
our strategies and marketing programs; our market share and factors
that affect our market share; liquidity and anticipated cash needs
and availability; the supply, availability, and costs of materials
and components and related tariffs; our ability to maintain and
enhance brand recognition and reputation; risks associated with the
distribution of our products and overall availability of labor; and
other factors detailed from time to time in our reports filed with
the Securities and Exchange Commission, including our Annual Report
on Form 10-K for the fiscal year ended April
30, 2023.
AMERICAN OUTDOOR BRANDS, INC. AND
SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
|
As of:
|
|
July 31, 2023
|
|
April 30, 2023
|
|
(Unaudited)
|
|
|
|
(In thousands, except
par value and share data)
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
18,711
|
|
$
21,950
|
Accounts receivable,
net of allowance for credit losses of $131
on July 31, 2023 and $125 on April 30,
2023
|
23,572
|
|
26,846
|
Inventories
|
104,913
|
|
99,734
|
Prepaid expenses and
other current assets
|
7,917
|
|
7,839
|
Income tax
receivable
|
1,210
|
|
1,251
|
Total current
assets
|
156,323
|
|
157,620
|
Property, plant, and
equipment, net
|
9,101
|
|
9,488
|
Intangible assets,
net
|
49,229
|
|
52,021
|
Right-of-use
assets
|
23,917
|
|
24,198
|
Other
assets
|
579
|
|
260
|
Total
assets
|
$
239,149
|
|
$
243,587
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
15,589
|
|
$
11,544
|
Accrued
expenses
|
9,802
|
|
8,741
|
Accrued payroll,
incentives, and profit sharing
|
2,874
|
|
1,813
|
Lease liabilities,
current
|
918
|
|
904
|
Total current
liabilities
|
29,183
|
|
23,002
|
Notes and loans
payable
|
—
|
|
4,623
|
Lease liabilities, net
of current portion
|
23,833
|
|
24,064
|
Other non-current
liabilities
|
18
|
|
34
|
Total
liabilities
|
53,034
|
|
51,723
|
Equity:
|
|
|
|
Preferred stock,
$0.001 par value, 20,000,000 shares authorized, no
shares issued or outstanding
|
—
|
|
—
|
Common stock,
$0.001 par value, 100,000,000 shares authorized,
14,542,812 shares issued and 13,060,823 shares
outstanding on
July 31, 2023 and 14,447,149 shares issued and
13,233,151
outstanding on April 30, 2023
|
15
|
|
14
|
Additional paid in
capital
|
273,415
|
|
272,784
|
Retained
deficit
|
(66,488)
|
|
(62,375)
|
Treasury stock, at
cost (1,481,989 shares on July 31, 2023
and 1,213,998 shares on April 30, 2023)
|
(20,827)
|
|
(18,559)
|
Total
equity
|
186,115
|
|
191,864
|
Total liabilities and
equity
|
$
239,149
|
|
$
243,587
|
AMERICAN OUTDOOR BRANDS, INC. AND
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
For the Three Months Ended July
31,
|
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
Net sales
|
|
$
43,445
|
|
$
43,676
|
Cost of
sales
|
|
23,726
|
|
24,637
|
Gross profit
|
|
19,719
|
|
19,039
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
|
1,599
|
|
1,756
|
Selling, marketing,
and distribution
|
|
12,054
|
|
11,780
|
General and
administrative
|
|
10,151
|
|
11,064
|
Total operating
expenses
|
|
23,804
|
|
24,600
|
Operating
loss
|
|
(4,085)
|
|
(5,561)
|
Other income,
net:
|
|
|
|
|
Other income,
net
|
|
39
|
|
241
|
Interest expense,
net
|
|
(12)
|
|
(186)
|
Total other income,
net
|
|
27
|
|
55
|
Loss from operations
before income taxes
|
|
(4,058)
|
|
(5,506)
|
Income tax
expense
|
|
55
|
|
189
|
Net loss
|
|
$
(4,113)
|
|
$
(5,695)
|
Net loss per
share:
|
|
|
|
|
Basic
|
|
$
(0.31)
|
|
$
(0.42)
|
Diluted
|
|
$
(0.31)
|
|
$
(0.42)
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
Basic
|
|
13,190
|
|
13,443
|
Diluted
|
|
13,190
|
|
13,443
|
AMERICAN OUTDOOR BRANDS, INC. AND
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(Unaudited)
|
|
|
|
|
|
For the Three Months Ended July
31,
|
|
2023
|
|
2022
|
|
(In
thousands)
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
(4,113)
|
|
$
(5,695)
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,969
|
|
4,162
|
Provision for credit
losses on accounts receivable
|
6
|
|
7
|
Stock-based
compensation expense
|
932
|
|
714
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
3,268
|
|
4,952
|
Inventories
|
(5,179)
|
|
1,045
|
Accounts
payable
|
4,115
|
|
277
|
Accrued
liabilities
|
2,122
|
|
1,798
|
Other
|
45
|
|
(2,192)
|
Net cash provided by
operating activities
|
5,165
|
|
5,068
|
Cash flows from
investing activities:
|
|
|
|
Payments to acquire
patents and software
|
(267)
|
|
(1,392)
|
Payments to acquire
property and equipment
|
(569)
|
|
(218)
|
Net cash used in investing
activities
|
(836)
|
|
(1,610)
|
Cash flows from
financing activities:
|
|
|
|
Payments on notes and
loans payable
|
(5,000)
|
|
(5,170)
|
Payments to acquire
treasury stock
|
(2,268)
|
|
—
|
Cash paid for debt
issuance costs
|
—
|
|
(88)
|
Payment of employee
withholding tax related to restricted stock units
|
(300)
|
|
(252)
|
Net cash used in financing
activities
|
(7,568)
|
|
(5,510)
|
Net decrease in cash
and cash equivalents
|
(3,239)
|
|
(2,052)
|
Cash and cash
equivalents, beginning of period
|
21,950
|
|
19,521
|
Cash and cash
equivalents, end of period
|
$
18,711
|
|
$
17,469
|
Supplemental disclosure
of cash flow information
|
|
|
|
Cash paid
for:
|
|
|
|
Interest
|
$
117
|
|
$
161
|
Income
taxes
|
$
13
|
|
$
32
|
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES
(In thousands, except per share data)
(Unaudited)
|
|
For the Three Months Ended July
31,
|
|
2023
|
|
2022
|
GAAP and non-GAAP gross
profit
|
$
19,719
|
|
$
19,039
|
|
|
|
|
GAAP operating
expenses
|
$
23,804
|
|
$
24,600
|
Amortization of
acquired intangible assets
|
(2,960)
|
|
(3,075)
|
Stock
compensation
|
(932)
|
|
(714)
|
Technology
implementation
|
(293)
|
|
(769)
|
Acquisition
costs
|
—
|
|
(47)
|
Stockholder
cooperation agreement costs
|
—
|
|
(1,010)
|
Non-GAAP operating
expenses
|
$
19,619
|
|
$
18,985
|
|
|
|
|
GAAP operating
loss
|
$
(4,085)
|
|
$
(5,561)
|
Amortization of
acquired intangible assets
|
2,960
|
|
3,075
|
Stock
compensation
|
932
|
|
714
|
Technology
implementation
|
293
|
|
769
|
Acquisition
costs
|
—
|
|
47
|
Stockholder
cooperation agreement costs
|
—
|
|
1,010
|
Non-GAAP operating
income
|
$
100
|
|
$
54
|
|
|
|
|
GAAP net
loss
|
$
(4,113)
|
|
$
(5,695)
|
Amortization of
acquired intangible assets
|
2,960
|
|
3,075
|
Stock
compensation
|
932
|
|
714
|
Technology
implementation
|
293
|
|
769
|
Acquisition
costs
|
—
|
|
47
|
Stockholder
cooperation agreement costs
|
—
|
|
1,010
|
Income tax
adjustments
|
26
|
|
164
|
Non-GAAP net
income
|
$
98
|
|
$
84
|
|
|
|
|
GAAP net loss per share
- diluted
|
$
(0.31)
|
|
$
(0.42)
|
Amortization of
acquired intangible assets
|
0.22
|
|
0.23
|
Stock
compensation
|
0.07
|
|
0.05
|
Technology
implementation
|
0.02
|
|
0.06
|
Acquisition
costs
|
—
|
|
—
|
Stockholder
cooperation agreement costs
|
—
|
|
0.07
|
Income tax
adjustments
|
—
|
|
0.01
|
Non-GAAP net income per
share - diluted (a)
|
$
0.01
|
|
$
0.01
|
|
|
|
|
(a) Non-GAAP net income
per share does not foot due to rounding.
|
AMERICAN OUTDOOR BRANDS, INC. AND
SUBSIDIARIES
|
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED
EBITDAS
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
For the Three Months Ended July
31,
|
|
|
2023
|
|
2022
|
GAAP net
loss
|
$
|
(4,113)
|
|
$
|
(5,695)
|
Interest
expense
|
|
12
|
|
|
186
|
Income tax
expense
|
|
55
|
|
|
189
|
Depreciation and
amortization
|
|
3,945
|
|
|
4,162
|
Stock
compensation
|
|
932
|
|
|
714
|
Technology
implementation
|
|
293
|
|
|
769
|
Acquisition
costs
|
|
—
|
|
|
47
|
Stockholder
cooperation agreement costs
|
|
—
|
|
|
1,010
|
Non-GAAP Adjusted
EBITDAS
|
$
|
1,124
|
|
$
|
1,382
|
Contact:
Liz Sharp, VP, Investor
Relations
lsharp@aob.com
(573) 303-4620
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SOURCE American Outdoor Brands, Inc.