American Outdoor Brands, Inc. Reports First Quarter Fiscal 2023 Financial Results
American Outdoor Brands (AOUT) reported Q1 FY2023 net sales of $43.7 million, a 28.1% decline from $60.8 million last year. E-commerce sales rose to $20.5 million, a 23.7% increase, while traditional sales fell by 47.6% to $23.1 million. Gross margin decreased to 43.6% from 47.7%. The company faced a GAAP net loss of $5.7 million (or $0.42 per share), contrasting with a net income of $3.5 million last year. Despite these challenges, the CEO highlighted e-commerce growth and operational efficiencies from facility consolidations, projecting revenue growth of up to 25% over pre-pandemic levels.
- E-commerce sales grew by 23.7% to $20.5 million.
- Projected revenue for fiscal 2023 could exceed pre-pandemic levels by up to 25%.
- Consolidation of facilities expected to yield cost savings of approximately $1.5 million annually.
- Net sales decreased by 28.1% compared to last year.
- GAAP net loss of $5.7 million compared to net income of $3.5 million last year.
- Gross margin fell to 43.6% from 47.7%.
- Net Sales
$43.7 Million - Gross Margin
43.6% - e-commerce Sales
$20.5 Million -- Traditional Sales$23.1 Million - Facility Consolidation Underway
COLUMBIA, Mo., Sept. 8, 2022 /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 fiscal 2023 ended July 31, 2022.
First Quarter Fiscal 2023 Financial Highlights
- Quarterly net sales were
$43.7 million , a decrease of$17.1 million , or28.1% , compared with net sales of$60.8 million for the comparable quarter last year. E-commerce net sales of$20.5 million , which were driven by increased direct-to-consumer net sales, grew by23.7% , while traditional net sales of$23.1 million , which were impacted by lower foot traffic at retail and lower shooting sports sales to OEM customers, declined by47.6% . Compared with pre-COVID levels in the first quarter of fiscal 2020, total net sales grew31.5% , while e-commerce net sales grew by92.2% and traditional net sales grew by2.7% . - Quarterly gross margin was
43.6% , compared with quarterly gross margin of47.7% for the comparable quarter last year, a decrease driven primarily by lower sales volumes and increased freight expenses. - Quarterly GAAP net loss was
$5.7 million , or ($0.42) per diluted share, compared with net income of$3.5 million , or$0.24 per diluted share, for the comparable quarter last year. - Quarterly non-GAAP net income was
$84,000 , or$0.01 per diluted share, compared with non-GAAP net income of$6.8 million , or$0.48 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, stockholder cooperation agreement costs, and acquisition costs. For a detailed reconciliation, see the schedules that follow in this release. - Quarterly Adjusted EBITDAS was
$1.4 million , or3.2% of net sales, compared with$9.6 million , or15.7% 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, "Given recent industry and economic conditions, I am pleased with our first quarter results, which reflect our ability to deliver net sales growth of over
"During the quarter, our e-commerce net sales grew nearly
"We continued to leverage our Dock & Unlock™ strategy to deliver a steady flow of organically developed, exciting new products that generated nearly
"A key part of our long-term strategy includes growing the brands in our portfolio by plugging them into our Dock & Unlock process and utilizing our leverageable business model. During the first quarter, we amended our Columbia, Missouri facility lease agreement to add 35,000 square feet of space that provides us the opportunity to increase our operational efficiency and leverage our Missouri facility. We then commenced plans to consolidate our Crimson Trace operations in Wilsonville, Oregon, as well as our Grilla operations in Holland, Michigan and Dallas, Texas, into the Missouri facility. We estimate that these consolidations will yield a net cost savings of approximately
Andrew Fulmer, Chief Financial Officer, said, "Our strong balance sheet has provided us with both the resources and the flexibility to pursue important growth opportunities, and we continued to fortify that balance sheet in the first quarter, demonstrating effective capital deployment. Cash from operations exceeded
"While we are not giving specific guidance today, we are providing a framework for our revenue outlook for fiscal 2023. Consumer spending patterns over the balance of our fiscal year have yet to be determined, and we believe that retailers and distributors continue to be extremely cautious with regard to their inventory levels. That said, we also believe our brands are performing well and in alignment with recent consumer outdoor participation trends. As a result, we believe our revenue for fiscal 2023 could exceed pre-pandemic fiscal 2020 revenue by as much as
Conference Call and Webcast
The Company will host a conference call and webcast today, September 8, 2022, to discuss its first quarter fiscal 2023 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," "non-GAAP income per share diluted," 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 (x) 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, 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 belief that our direct-to-consumer sales is one gauge of how well our brands are resonating with consumers; our excitement about growth opportunities within our Outdoor Lifestyle category; our long-term strategy to grow the brands in our portfolio by plugging them into our Dock & Unlock process and utilizing our leverageable business model; our estimate that the consolidations of our operations in Wilsonville, Oregon and Holland, Michigan, and Dallas, Texas into our Missouri facility will yield a significant cost savings of approximately
Contact:
Liz Sharp, VP, Investor Relations
lsharp@aob.com
(573) 303-4620
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES | |||
CONSOLIDATED BALANCE SHEETS | |||
As of: | |||
July 31, 2022 | April 30, 2022 | ||
(Unaudited) | |||
(In thousands, except par value and share data) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 17,469 | $ 19,521 | |
Accounts receivable, net of allowance for credit losses of | 23,920 | 28,879 | |
Inventories | 120,638 | 121,683 | |
Prepaid expenses and other current assets | 10,754 | 8,491 | |
Income tax receivable | 1,072 | 1,231 | |
Total current assets | 173,853 | 179,805 | |
Property, plant, and equipment, net | 10,357 | 10,621 | |
Intangible assets, net | 60,673 | 63,194 | |
Right-of-use assets | 25,417 | 23,884 | |
Other assets | 369 | 336 | |
Total assets | $ 270,669 | $ 277,840 | |
LIABILITIES AND EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 13,495 | $ 13,563 | |
Accrued expenses | 9,634 | 7,853 | |
Accrued payroll and incentives | 2,983 | 2,788 | |
Lease liabilities, current | 1,618 | 1,803 | |
Accrued profit sharing | 820 | 998 | |
Total current liabilities | 28,550 | 27,005 | |
Notes and loans payable, net of current portion | 19,551 | 24,697 | |
Lease liabilities, net of current portion | 24,739 | 23,076 | |
Other non-current liabilities | 31 | 31 | |
Total liabilities | 72,871 | 74,809 | |
Equity: | |||
Preferred stock, | — | — | |
Common stock, | 14 | 14 | |
Additional paid in capital | 268,855 | 268,393 | |
Retained (deficit)/earnings | (56,046) | (50,351) | |
Treasury stock, at cost (836,964 shares on July 31, 2022 and April 30, 2022) | (15,025) | (15,025) | |
Total equity | 197,798 | 203,031 | |
Total liabilities and equity | $ 270,669 | $ 277,840 | |
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(In thousands, except per share data) | ||||
For the Three Months Ended July 31, | ||||
2022 | 2021 | |||
(Unaudited) | ||||
Net sales | $ 43,676 | $ 60,768 | ||
Cost of sales | 24,637 | 31,785 | ||
Gross profit | 19,039 | 28,983 | ||
Operating expenses: | ||||
Research and development | 1,756 | 1,521 | ||
Selling, marketing, and distribution | 11,780 | 13,200 | ||
General and administrative | 11,064 | 10,039 | ||
Total operating expenses | 24,600 | 24,760 | ||
Operating (loss)/income | (5,561) | 4,223 | ||
Other income/(expense), net: | ||||
Other income, net | 241 | 129 | ||
Interest expense, net | (186) | (46) | ||
Total other income, net | 55 | 83 | ||
(Loss)/income from operations before income taxes | (5,506) | 4,306 | ||
Income tax expense | 189 | 849 | ||
Net (loss)/income | $ (5,695) | $ 3,457 | ||
Net (loss)/income per share: | ||||
Basic | $ (0.42) | $ 0.25 | ||
Diluted | $ (0.42) | $ 0.24 | ||
Weighted average number of common shares outstanding: | ||||
Basic | 13,443 | 14,083 | ||
Diluted | 13,443 | 14,301 | ||
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(Unaudited) | |||
For the Three Months Ended July 31, | |||
2022 | 2021 | ||
(In thousands) | |||
Cash flows from operating activities: | |||
Net (loss)/income | $ (5,695) | $ 3,457 | |
Adjustments to reconcile net income to net cash (used in)/provided | |||
Depreciation and amortization | 4,162 | 4,179 | |
Loss on sale/disposition of assets | — | 127 | |
Provision for credit losses on accounts receivable | 7 | 23 | |
Deferred income taxes | — | (110) | |
Stock-based compensation expense | 714 | 752 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 4,952 | 3,939 | |
Inventories | 1,045 | (17,746) | |
Accounts payable | 277 | 4,226 | |
Accrued liabilities | 1,798 | (805) | |
Other | (2,192) | (1,207) | |
Net cash provided by/(used in) operating activities | 5,068 | (3,165) | |
Cash flows from investing activities: | |||
Payments to acquire patents and software | (1,392) | (449) | |
Payments to acquire property and equipment | (218) | (537) | |
Net cash used in investing activities | (1,610) | (986) | |
Cash flows from financing activities: | |||
Payments on notes and loans payable | (5,170) | — | |
Cash paid for debt issuance costs | (88) | — | |
Proceeds from exercise of options to acquire common stock, | — | 5 | |
Payment of employee withholding tax related to restricted | (252) | (312) | |
Net cash used in financing activities | (5,510) | (307) | |
Net decrease in cash and cash equivalents | (2,052) | (4,458) | |
Cash and cash equivalents, beginning of period | 19,521 | 60,801 | |
Cash and cash equivalents, end of period | $ 17,469 | $ 56,343 | |
Supplemental disclosure of cash flow information | |||
Cash paid for: | |||
Interest | $ 161 | $ 38 | |
Income taxes | $ 32 | $ 85 | |
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES | ||||
For the Three Months Ended July 31, | ||||
2022 | 2021 | |||
GAAP gross profit | $ 19,039 | $ 28,983 | ||
Non-GAAP gross profit | $ 19,039 | $ 28,983 | ||
GAAP operating expenses | $ 24,600 | $ 24,760 | ||
Amortization of acquired intangible assets | (3,075) | (3,428) | ||
Stock compensation | (714) | (752) | ||
Technology implementation | (769) | (272) | ||
Acquisition costs | (47) | — | ||
Shareholder cooperation agreement costs | (1,010) | — | ||
Non-GAAP operating expenses | $ 18,985 | $ 20,308 | ||
GAAP operating (loss)/income | $ (5,561) | $ 4,223 | ||
Amortization of acquired intangible assets | 3,075 | 3,428 | ||
Stock compensation | 714 | 752 | ||
Technology implementation | 769 | 272 | ||
Acquisition costs | 47 | — | ||
Shareholder cooperation agreement costs | 1,010 | — | ||
Non-GAAP operating income | $ 54 | $ 8,675 | ||
GAAP net (loss)/income | $ (5,695) | $ 3,457 | ||
Amortization of acquired intangible assets | 3,075 | 3,428 | ||
Stock compensation | 714 | 752 | ||
Technology implementation | 769 | 272 | ||
Acquisition costs | 47 | — | ||
Shareholder cooperation agreement costs | 1,010 | — | ||
Income tax adjustments | 164 | (1,113) | ||
Non-GAAP net income | $ 84 | $ 6,796 | ||
GAAP net (loss)/income per share - diluted | $ (0.42) | $ 0.24 | ||
Amortization of acquired intangible assets | 0.23 | 0.24 | ||
Stock compensation | 0.05 | 0.05 | ||
Technology implementation | 0.06 | 0.02 | ||
Acquisition costs | — | — | ||
Shareholder cooperation agreement costs | 0.07 | — | ||
Income tax adjustments | 0.01 | (0.08) | ||
Non-GAAP net income per share - diluted (a) | $ 0.01 | $ 0.48 | ||
(a) Non-GAAP net income per share does not foot due to rounding. | ||||
AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES | |||||
RECONCILIATION OF GAAP NET (LOSS)/INCOME TO NON-GAAP ADJUSTED EBITDAS | |||||
For the Three Months Ended July 31, | |||||
2022 | 2021 | ||||
GAAP net (loss)/income | $ | (5,695) | $ | 3,457 | |
Interest expense | 186 | 46 | |||
Income tax expense | 189 | 849 | |||
Depreciation and amortization | 4,162 | 4,179 | |||
Stock compensation | 714 | 752 | |||
Technology implementation | 769 | 272 | |||
Acquisition costs | 47 | — | |||
Shareholder cooperation agreement costs | 1,010 | — | |||
Non-GAAP Adjusted EBITDAS | $ | 1,382 | $ | 9,555 | |
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SOURCE American Outdoor Brands, Inc.
FAQ
What were American Outdoor Brands' net sales for Q1 FY2023?
How did e-commerce sales perform in Q1 FY2023 for AOUT?
What was the GAAP net loss reported by AOUT for Q1 FY2023?
What is the projected revenue growth outlook for AOUT in fiscal 2023?
What cost savings is AOUT expecting from facility consolidations?
