The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis ...

American Outdoor Brands, Inc. (AOUT) reported third-quarter fiscal 2024 results, with the top and the bottom line surpassing the Zacks Consensus Estimate. Both metrics beat estimates for the fourth straight quarter.Following the results, the company’s shares increased 4.8% in the after-hours trading session on Mar 7.  The company believes its brands are well-positioned to benefit from positive, long-term consumer outdoor participation trends. AOUT reaffirms its anticipation that its net sales for fiscal 202 ...

Financial Data and Key Metrics - Net sales for Q3 2024 were $53.4 million, a 5% increase compared to Q3 2023, and a 23.3% increase compared to the pre-pandemic Q3 of fiscal 2020 [20] - Gross margin for Q3 was 42.7%, down from 47.1% in Q3 2023, due to higher tariff and freight cost amortization and increased promotional activity [22] - GAAP EPS was a loss of $0.23 for Q3, compared to a loss of $0.21 in Q3 2023, while non-GAAP EPS was $0.08, down from $0.13 in the prior year [24] - Adjusted EBITDAS for Q3 was $2.4 million, compared to $3.3 million in Q3 2023 [24] - The company ended Q3 with $15.9 million in cash, no debt, and total available capital of approximately $106 million [26] Business Line Performance - Outdoor Lifestyle category grew 2.8% year-over-year in Q3, driven by hunting and fishing-related products, and has grown 43.1% compared to the pre-pandemic Q3 of fiscal 2020 [7][21] - Shooting Sports category grew 7.6% year-over-year in Q3, driven by personal protection and shooting accessories, and has grown almost 6% compared to the pre-pandemic Q3 of fiscal 2020 [8][21] - E-commerce sales increased by 1.6% year-over-year, while traditional channel sales grew by 8.1% [21] - International sales grew by over 72% in Q3, driven by the introduction of lifestyle brands in the Canadian market [9] Market Performance - POS sales increased for both Outdoor Lifestyle and Shooting Sports categories, indicating strong consumer demand [9] - Retailers are focusing on careful inventory management and seeking innovative products, which aligns with the company's strategy to introduce new products and expand shelf space [19] Strategic Direction and Industry Competition - The company continues to focus on innovation, with a robust new product pipeline extending well into the next 5 years, positioning its brands to expand market share and enter new product categories [11] - The company's Dock and Unlock process has been successful in driving growth by entering new product categories and building brand loyalty [10] - The company is strategically expanding into international markets and leveraging its direct-to-consumer model to strengthen its connection with consumers [9][15] Management Commentary on Operating Environment and Future Outlook - Management highlighted the success of new product launches, such as the Caldwell Claymore and Grilla Mammoth smoker, which have been well-received by consumers and retailers [12][15] - The company expects full-year net sales growth of up to 3.5% for fiscal 2024, with gross margins expected to be around 44% [28] - Operating expenses are expected to decline slightly on a GAAP basis for fiscal 2024, while non-GAAP operating expenses are expected to increase slightly due to higher selling and distribution costs [29] Other Important Information - The company repurchased approximately 210,000 shares for $1.8 million in Q3, as part of its share repurchase program [27] - Capital expenditures for fiscal 2024 are expected to be between $6 million and $6.5 million, with $3 million to $3.5 million being recurring expenses [27] Q&A Session Summary Question: Inventory levels at retailers and confidence in future progress - Inventory levels in the channel were down, except for Outdoor Lifestyle due to the MEAT! load-in and work with Academy [32] - The company is focused on maintaining a tight link between sell-in and sell-through to avoid excess inventory in the channel [41] Question: Appetite for M&A given internal innovation efforts - The company evaluates acquisitions based on where its brands do not have "permission to play" or where it can augment existing innovation plans [35][36] - The company is actively looking for M&A opportunities, with a strong cash position and no debt [45] Question: Sales growth deceleration in Q4 - The expected deceleration in Q4 growth is attributed to the seasonal nature of the business, with Q2 and Q3 typically being stronger quarters [39] Question: Opportunities for higher load-in and new product launches - The company expects new product launches in late April to drive load-ins, along with new distribution opportunities and new retailers coming online [43] Question: Near-term appetite for acquisitions - The company is cautious about M&A in frothy markets but is actively looking for opportunities, with a strong pipeline and clear acquisition targets [45]

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q3 and nine months ended January 31, 2024, report net losses, decreased assets, and reduced operating cash flow [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of January 31, 2024, total assets slightly decreased to $239.1 million, while total liabilities increased to $56.7 million Condensed Consolidated Balance Sheets (in thousands) | Balance Sheet Items | Jan 31, 2024 (in thousands) | Apr 30, 2023 (in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,890 | $21,950 | | Inventories | $100,016 | $99,734 | | Total current assets | $149,936 | $157,620 | | Total assets | $239,079 | $243,587 | | **Liabilities & Equity** | | | | Total current liabilities | $23,011 | $23,002 | | Total liabilities | $56,653 | $51,723 | | Total equity | $182,426 | $191,864 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 FY2024 net sales increased 5.0% to $53.4 million, but gross profit decreased, resulting in a net loss of $2.9 million Condensed Consolidated Statements of Operations (in thousands, except EPS) | Metric (in thousands, except EPS) | Q3 FY2024 | Q3 FY2023 | Nine Months FY2024 | Nine Months FY2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $53,425 | $50,894 | $154,801 | $149,006 | | Gross profit | $22,834 | $23,989 | $69,043 | $68,991 | | Operating loss | $(2,883) | $(3,001) | $(6,990) | $(8,697) | | Net loss | $(2,910) | $(2,863) | $(6,946) | $(8,188) | | Diluted EPS | $(0.23) | $(0.21) | $(0.53) | $(0.61) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total equity decreased to $182.4 million due to a net loss and $5.6 million in treasury stock repurchases - For the nine months ended January 31, 2024, the company repurchased **635,075 shares** of its common stock for **$5.55 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased to $9.8 million for the nine months ended January 31, 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Nine Months Ended Jan 31, 2024 | Nine Months Ended Jan 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,823 | $24,263 | | Net cash used in investing activities | $(5,320) | $(4,231) | | Net cash used in financing activities | $(10,563) | $(17,843) | | **Net (decrease)/increase in cash** | **$(6,060)** | **$2,189** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue recognition, disaggregation, lease accounting, and a new $10 million stock repurchase program Q3 FY2024 Net Sales Breakdown (YoY Change) | Q3 FY2024 Net Sales Breakdown (YoY Change) | Amount (in thousands) | % Change | | :--- | :--- | :--- | | e-commerce channels | $24,881 | 1.6% | | Traditional channels | $28,544 | 8.1% | | Domestic | $51,006 | 3.1% | | International | $2,419 | 72.2% | - Effective January 1, 2024, the company assumed a major facility lease, recording a right-of-use asset and lease liability of **$10.6 million** for the additional space[42](index=42&type=chunk) - On October 2, 2023, the Board authorized a new share repurchase program of up to **$10.0 million**, executable through September 30, 2024[62](index=62&type=chunk) [Management's Discussion and Analysis (MD&A)](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 5.0% Q3 net sales increase, but gross margin declined due to higher costs, while liquidity remains solid [Third Quarter Fiscal 2024 Highlights](index=26&type=section&id=Third%20Quarter%20Fiscal%202024%20Highlights) Q3 FY2024 net sales grew 5.0% to $53.4 million, but gross margin fell to 42.7%, resulting in a net loss of $2.9 million Third Quarter Fiscal 2024 Highlights | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net Sales | $53.4 million | $50.9 million | | Gross Margin | 42.7% | 47.1% | | Net Loss | $2.9 million | $2.9 million | | Diluted EPS | ($0.23) | ($0.21) | | Non-GAAP Adjusted EBITDAS | $2.4 million | $3.3 million | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q3 net sales rose 5.0% to $53.4 million, driven by traditional and international channels, but gross margin declined due to higher costs - Q3 sales growth was driven by an increase in net sales of certain **personal protection, rugged outdoor, hunting, and fishing products**[94](index=94&type=chunk) - Gross margin for Q3 decreased by **440 basis points**, primarily due to higher tariff, freight, and duty expenses, as well as increased promotional activity[97](index=97&type=chunk) - Q3 General and administrative expenses decreased by **$1.4 million**, primarily due to lower insurance premiums, reduced ERP system implementation costs, and lower rent expense[108](index=108&type=chunk) [Non-GAAP Financial Measure](index=33&type=section&id=Non-GAAP%20Financial%20Measure) Adjusted EBITDAS, a supplemental performance measure, decreased to $2.4 million for Q3 FY2024 and $8.7 million for the nine-month period Non-GAAP Adjusted EBITDAS (in thousands) | Metric (in thousands) | Q3 FY2024 | Q3 FY2023 | Nine Months FY2024 | Nine Months FY2023 | | :--- | :--- | :--- | :--- | :--- | | GAAP net loss | $(2,910) | $(2,863) | $(6,946) | $(8,188) | | Non-GAAP Adjusted EBITDAS | $2,375 | $3,275 | $8,741 | $11,019 | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a debt-free liquidity position with $15.9 million in cash, despite a decrease in operating cash flow - Cash generated by operating activities decreased to **$9.8 million** for the nine months ended Jan 31, 2024, compared to **$24.3 million** in the prior year period[128](index=128&type=chunk)[129](index=129&type=chunk) - During the nine months ended Jan 31, 2024, the company used **$5.0 million** to pay off all borrowings on its revolving line of credit and **$5.6 million** to repurchase 635,075 shares of common stock[131](index=131&type=chunk) - The company expects to spend approximately **$6.0 million to $6.5 million** on capital expenditures in fiscal 2024[130](index=130&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures were reported since the Annual Report on Form 10-K - There were no material changes from the information provided in Quantitative and Qualitative Disclosures about Market Risk in the Form 10-K[137](index=137&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of January 31, 2024, with no material changes in internal control over financial reporting - The CEO and CFO evaluated and concluded that the company's disclosure controls and procedures are **effective** as of January 31, 2024[138](index=138&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[139](index=139&type=chunk) [PART II - OTHER INFORMATION](index=38&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 11, with no new material developments reported - The nature of legal proceedings is discussed in Note 11 — Commitments and Contingencies to the condensed consolidated financial statements and is incorporated by reference[141](index=141&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the previously disclosed risk factors were reported in the Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K[142](index=142&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 635,075 shares for $5.6 million and authorized a new $10.0 million share repurchase program Common Stock Repurchases | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Q1 FY2024 | 267,991 | $8.43 | | Q2 FY2024 | 157,536 | $9.46 | | Q3 FY2024 | 209,548 | $8.50 | | **YTD FY2024** | **635,075** | **$8.71** | - A new **$10.0 million** share repurchase plan was authorized on October 2, 2023, with approximately **$7.8 million** remaining available as of January 31, 2024[144](index=144&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter ended January 31, 2024 - No directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the quarter ended January 31, 2024[145](index=145&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including lease agreements, officer certifications, and interactive data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Rule 13a-14(a)/15d-14(a) and Section 1350[148](index=148&type=chunk)

Exhibit 99.1 1800 N Route Z, Suite A Columbia, MO 65202 (800) 338-9585 NASDAQ: AOUT Contact: Liz Sharp, VP, Investor Relations lsharp@aob.com (573) 303-4620 American Outdoor Brands, Inc. Reports Third Quarter Fiscal 2024 Financial Results • Net Sales $53.4 Million – Up 5.0% • Gross Margin 42.7% • Traditional Channel Sales $28.5 Million – Up 8.1% • E-Commerce Channel Sales $24.9 Million – Up 1.6% COLUMBIA, Mo., March 7, 2024 – American Outdoor Brands, Inc. (NASDAQ Global Select: AOUT), an industry leading pr ...

The Zacks Leisure and Recreation Products industry faces challenges due to high inflation and concerns regarding the global economy. Nevertheless, there is a positive trend in the sales of fitness products, driven by growing health and fitness awareness and strong boat sales. The industry participants — which design, market, retail and distribute products for the outdoor and recreation market — are witnessing solid demand. Stocks like Academy Sports and Outdoors, Inc. (ASO) , Acushnet Holdings Corp. (GOLF) ...

webphotographeer/iStock via Getty Images I last wrote on (NASDAQ:AOUT) in July, and I felt that there was no reason to buy it. Its stock price has fallen around 4.5% since then, underperforming compared to the market standards. However, I think the current picture of AOUT looks good, and it can be rewarding in the coming times. It provides a good risk-to-reward setup, and its valuation looks cheap. Hence, I am upgrading my rating to buy. Financial Analysis It recently announced its Q2 FY24 results. The ...

Financial Data and Key Metrics Changes - The company reported net sales of $57.9 million for Q2 2024, an increase of 6.4% compared to $54.4 million in Q2 2023, and a 21.3% increase compared to the pre-pandemic Q2 of fiscal 2020 [14][5][21] - Gross margin decreased to 45.7% from 47.7% in the prior year, primarily due to increased promotional activity [15][16] - GAAP EPS was $0.01 for Q2 2024, down from $0.03 in Q2 2023, while non-GAAP EPS was $0.25 compared to $0.29 in the prior year [17] Business Line Data and Key Metrics Changes - The outdoor lifestyle category saw a year-over-year growth of 14.3%, contributing nearly 60% of total sales in Q2 2024 [14][6] - The shooting sports category experienced a decline of 3.4% in net sales compared to the previous year, primarily due to a drop in aiming solution products [15][8] Market Data and Key Metrics Changes - Sales growth in the traditional channel increased by 8.7%, while e-commerce net sales rose by 3.3% year-over-year [15] - Point-of-sale data indicated a slight overall decline, with outdoor lifestyle remaining relatively flat and shooting sports showing a decline driven by aiming solutions [10][9] Company Strategy and Development Direction - The company aims to grow its outdoor lifestyle segment through retail expansion and strategic partnerships, such as the collaboration with Academy Sports and Outdoors [6][7] - Innovation is a core element of the company's long-term growth strategy, with over 25% of Q2 net sales generated from new product introductions [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving full-year net sales growth of up to 3.5% for fiscal 2024, with expectations for Q3 to be relatively flat compared to the previous year [21][25] - The company anticipates gross margins to be between 44% and 45% for the full fiscal year, indicating a slight decline in the second half [22] Other Important Information - The company ended Q2 2024 with cash of $8.4 million and no debt, having repurchased approximately $1.5 million of common stock [18][20] - A new share repurchase program of up to $10 million was approved, effective from October 2023 through September 2024 [20] Q&A Session Summary Question: Insights on MEAT's addition to traditional channels - Management confirmed that traditional channel growth occurred even without MEAT's sales, indicating positive underlying trends [30] Question: Demand for shooting sports products in October - Management noted that while aiming solutions declined, other brands performed well, indicating a mixed demand landscape [32] Question: Clarification on EBITDAS margin guidance - The expected EBITDAS margin range is between 4% and 5.5% [33] Question: Launch exclusivity and pricing for MEAT - Management clarified that while there are shared products between DTC and retail, there are also products tailored for retail customers [39] Question: Retail ordering patterns and opportunities - Management observed that retailers ordered earlier due to competitive promotions and inventory management strategies [42] Question: Performance of outdoor lifestyle versus shooting sports - Outdoor lifestyle outperformed shooting sports, with new product introductions driving sales [47] Question: Planned promotional strategy for the second half - Management indicated that promotions will continue but will be more strategic compared to Q2 [50] Question: Status of Grilla's retail expansion - Management confirmed plans for Grilla's retail placement but emphasized a testing approach rather than a full rollout [57] Question: M&A environment outlook - Management noted an increase in M&A activity expected in the first half of 2024, with valuations beginning to align more closely with buyer expectations [59][60]

[General Information](index=1&type=section&id=General%20Information) American Outdoor Brands, Inc. filed a Form 10-Q, detailing company information, forward-looking statements, and trademarks [Company Information and Filing Details](index=1&type=section&id=Company%20Information%20and%20Filing%20Details) American Outdoor Brands, Inc. filed a Form 10-Q for the quarter ended October 31, 2023, as an accelerated filer and emerging growth company listed on Nasdaq under AOUT - Registrant: **American Outdoor Brands, Inc.**[2](index=2&type=chunk) - Filing Type: Form 10-Q for the quarterly period ended **October 31, 2023**[1](index=1&type=chunk) - Exchange: Nasdaq Global Select Market, Trading Symbol: **AOUT**[2](index=2&type=chunk) - Filer Status: Accelerated filer and Emerging growth company[2](index=2&type=chunk) - Common Stock Outstanding (as of November 22, 2023): **12,936,665 shares**[2](index=2&type=chunk) [Statement Regarding Forward-Looking Information](index=3&type=section&id=Statement%20Regarding%20Forward-Looking%20Information) This section outlines the company's forward-looking statements and various risk factors that could materially affect actual results - Forward-looking statements cover future operating results, financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations[6](index=6&type=chunk) - Key risk factors include potential disruptions in supplier ability, lower consumer spending, ability to introduce successful new products, interruptions with third-party manufacturers, increased costs of materials, and ability to maintain brand recognition[7](index=7&type=chunk) - Other risks include dependence on large customers, ability to attract talent, pricing pressures, product recalls, intellectual property protection, inventory levels, acquisition integration, information system security, compliance with foreign laws, economic/social/political factors, and potential for increased regulation of firearms[8](index=8&type=chunk) [Trademarks](index=2&type=section&id=Trademarks) The company lists its registered and unregistered U.S. trademarks, along with licensed trademarks, used across its outdoor lifestyle and shooting sports accessory products - Company owns registered U.S. trademarks including Accumax®, BOG®, BUBBA®, Caldwell®, Crimson Trace®, Frankford Arsenal®, Grilla Grills®, Hooyman®, Imperial®, Lockdown®, MEAT! Your Maker, Old Timer®, Schrade®, Tipton®, Uncle Henry®, ust®, and Wheeler®[5](index=5&type=chunk) - Unregistered trademarks include AOB Products Company™, Dock and Unlock ™, Don't Be Outdoorsy – Be Outdoors™, Engineered for the Unknown™, From Niche to Known™, Lockdown Puck™, MEAT!™, Secure Your Lifestyle™, The Ultimate Lifestyle™, Unmatched Accuracy at the Bench and in the Field™, Water to Plate™, and Your Land. Your Legacy™[5](index=5&type=chunk) - Licensed trademarks from Smith & Wesson Brands, Inc. include M&P®, Performance Center®, Smith & Wesson®, and T/C®[5](index=5&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of October 31, 2023, and April 30, 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Oct 31, 2023 | Apr 30, 2023 | Change | | :----- | :----------- | :----------- | :----- | | Cash and cash equivalents | $8,379 | $21,950 | $(13,571) | | Accounts receivable, net | $40,447 | $26,846 | $13,601 | | Inventories | $109,123 | $99,734 | $9,389 | | Total current assets | $164,266 | $157,620 | $6,646 | | Total assets | $243,650 | $243,587 | $63 | | Accounts payable | $17,805 | $11,544 | $6,261 | | Accrued expenses | $12,271 | $8,741 | $3,530 | | Total current liabilities | $33,993 | $23,002 | $10,991 | | Total liabilities | $57,659 | $51,723 | $5,936 | | Total equity | $185,991 | $191,864 | $(5,873) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income or loss for the three and six months ended October 31, 2023 and 2022 Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | Change | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Net sales | $57,931 | $54,436 | $3,495 | 6.4% | | Gross profit | $26,490 | $25,962 | $528 | 2.0% | | Operating loss | $(22) | $(134) | $112 | -83.6% | | Net income/(loss) | $77 | $370 | $(293) | -79.2% | | Basic EPS | $0.01 | $0.03 | $(0.02) | -66.7% | | Diluted EPS | $0.01 | $0.03 | $(0.02) | -66.7% | | **6 Months Ended Oct 31, 2023** | | | | | | Net sales | $101,376 | $98,112 | $3,264 | 3.3% | | Gross profit | $46,209 | $45,001 | $1,208 | 2.7% | | Operating loss | $(4,106) | $(5,695) | $1,589 | -27.9% | | Net income/(loss) | $(4,036) | $(5,325) | $1,289 | -24.2% | | Basic EPS | $(0.31) | $(0.40) | $0.09 | -22.5% | | Diluted EPS | $(0.31) | $(0.40) | $0.09 | -22.5% | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in the company's equity, including net income, stock-based compensation, and treasury stock repurchases Stockholders' Equity Highlights (in thousands) | Metric | Oct 31, 2023 | Apr 30, 2023 | Change | | :---------------------------------------- | :----------- | :----------- | :----- | | Total Equity | $185,991 | $191,864 | $(5,873) | | Net income/(loss) (6 months) | $(4,036) | N/A | N/A | | Stock-based compensation (6 months) | $1,938 | N/A | N/A | | Repurchase of treasury stock (6 months) | $(3,762) | N/A | N/A | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Provides a summary of cash inflows and outflows from operating, investing, and financing activities for the six months ended October 31, 2023 and 2022 Cash Flow Highlights (Six Months Ended October 31, in thousands) | Activity | 2023 | 2022 | Change | | :-------------------------------------- | :--------- | :--------- | :------- | | Net cash (used in)/provided by operating activities | $(3,215) | $6,167 | $(9,382) | | Net cash used in investing activities | $(1,581) | $(3,311) | $1,730 | | Net cash used in financing activities | $(8,775) | $(6,022) | $(2,753) | | Net decrease in cash and cash equivalents | $(13,571) | $(3,166) | $(10,405) | | Cash and cash equivalents, end of period | $8,379 | $16,355 | $(7,976) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, asset/liability categories, and other financial disclosures [(1) Organization](index=9&type=section&id=%281%29%20Organization) Describes the company as a leading provider of outdoor lifestyle products and shooting sports accessories, organized into four consumer verticals - Company is a leading provider of outdoor lifestyle products and shooting sports accessories[21](index=21&type=chunk) - Brands are organized into four consumer verticals: Adventurer (fishing, outdoor cooking, camping), Harvester (hunting preparedness and post-hunt activities), Marksman (shooting range, firearm maintenance), and Defender (self-defense, personal security)[21](index=21&type=chunk) - Products are conceived, designed, sourced, and sold, with some electro-optics manufactured in Columbia, Missouri, and most products manufactured/assembled by third parties in Asia[21](index=21&type=chunk) [(2) Basis of Presentation](index=9&type=section&id=%282%29%20Basis%20of%20Presentation) Explains that interim financial statements are unaudited and prepared in accordance with SEC requirements, detailing revenue recognition and sales breakdowns - Interim financial statements are unaudited and prepared in accordance with SEC requirements, with condensed GAAP disclosures[22](index=22&type=chunk) - Revenue is recognized when control of ownership transfers to the customer, typically on shipment or delivery, excluding sales tax[26](index=26&type=chunk) Net Sales by Channel (Three Months Ended Oct 31, in thousands) | Channel | 2023 | 2022 | Change | % Change | | :--------------------- | :----- | :----- | :----- | :------- | | e-commerce channels | $23,462 | $22,713 | $749 | 3.3% | | Traditional channels | $34,469 | $31,723 | $2,746 | 8.7% | | Total net sales | $57,931 | $54,436 | $3,495 | 6.4% | Net Sales by Geography (Three Months Ended Oct 31, in thousands) | Geography | 2023 | 2022 | Change | % Change | | :-------------------- | :----- | :----- | :----- | :------- | | Domestic net sales | $54,982 | $52,106 | $2,876 | 5.5% | | International net sales | $2,949 | $2,330 | $619 | 26.6% | | Total net sales | $57,931 | $54,436 | $3,495 | 6.4% | Net Sales by Product Category (Three Months Ended Oct 31, in thousands) | Category | 2023 | 2022 | Change | % Change | | :------------------ | :----- | :----- | :----- | :------- | | Shooting sports | $23,371 | $24,191 | $(820) | -3.4% | | Outdoor lifestyle | $34,560 | $30,245 | $4,315 | 14.3% | | Total net sales | $57,931 | $54,436 | $3,495 | 6.4% | Net Sales by Channel (Six Months Ended Oct 31, in thousands) | Channel | 2023 | 2022 | Change | % Change | | :--------------------- | :----- | :----- | :----- | :------- | | e-commerce channels | $41,838 | $43,257 | $(1,419) | -3.3% | | Traditional channels | $59,538 | $54,855 | $4,683 | 8.5% | | Total net sales | $101,376 | $98,112 | $3,264 | 3.3% | Net Sales by Geography (Six Months Ended Oct 31, in thousands) | Geography | 2023 | 2022 | Change | % Change | | :-------------------- | :----- | :----- | :----- | :------- | | Domestic net sales | $94,771 | $92,382 | $2,389 | 2.6% | | International net sales | $6,605 | $5,730 | $875 | 15.3% | | Total net sales | $101,376 | $98,112 | $3,264 | 3.3% | Net Sales by Product Category (Six Months Ended Oct 31, in thousands) | Category | 2023 | 2022 | Change | % Change | | :------------------ | :----- | :----- | :----- | :------- | | Shooting sports | $43,446 | $44,579 | $(1,133) | -2.5% | | Outdoor lifestyle | $57,930 | $53,533 | $4,397 | 8.2% | | Total net sales | $101,376 | $98,112 | $3,264 | 3.3% | [(3) Leases](index=11&type=section&id=%283%29%20Leases) Details the company's operating lease assets and liabilities, including recognition principles, weighted average terms, and future payment schedules - Operating lease assets and liabilities are recognized at commencement based on the present value of lease payments[38](index=38&type=chunk) Operating Lease Assets and Liabilities (in thousands) | Metric | Oct 31, 2023 | Apr 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Right-of-use assets, net | $23,736 | $24,198 | | Lease liabilities, current portion | $985 | $904 | | Lease liabilities, net of current portion | $23,648 | $24,064 | | Total operating lease liabilities | $24,633 | $24,968 | - Weighted average lease term: **15.1 years**; Weighted average discount rate: **5.4%** (as of Oct 31, 2023)[40](index=40&type=chunk) Future Operating Lease Payments (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2024 | $1,150 | | 2025 | $2,300 | | 2026 | $2,197 | | 2027 | $2,207 | | 2028 | $2,238 | | Thereafter | $26,426 | | Total future lease payments | $36,518 | [(4) Intangible Assets, net](index=13&type=section&id=%284%29%20Intangible%20Assets%2C%20net) Presents the net book value of intangible assets, including customer relationships, developed software, patents, and trademarks, along with amortization details Intangible Assets, Net (in thousands) | Asset Class | Oct 31, 2023 (Net) | Apr 30, 2023 (Net) | | :-------------------------------- | :----------------- | :----------------- | | Customer relationships | $13,524 | $15,945 | | Developed software and technology | $8,151 | $9,044 | | Patents, trademarks, and trade names | $22,207 | $24,901 | | Patents and software in development | $2,039 | $1,701 | | Indefinite-lived intangible assets | $430 | $430 | | Total intangible assets, net | $46,351 | $52,021 | - Weighted-average amortization period for definite-lived intangible assets is approximately **five years**[46](index=46&type=chunk) Amortization Expense (in thousands) | Period | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Three months ended October 31 | $3,200 | $3,300 | | Six months ended October 31 | $6,500 | $6,800 | Future Expected Amortization Expense (in thousands) | Fiscal Year | Amount | | :---------- | :----- | | 2024 | $6,462 | | 2025 | $9,500 | | 2026 | $8,152 | | 2027 | $5,798 | | 2028 | $4,479 | | Thereafter | $9,491 | | Total | $43,882 | [(5) Fair Value Measurement](index=13&type=section&id=%285%29%20Fair%20Value%20Measurement) Describes the company's fair value measurements, categorized into a three-level hierarchy based on input observability, with cash and cash equivalents classified as Level 1 - Fair value measurements are categorized into a three-level hierarchy based on input observability[49](index=49&type=chunk) - Cash and cash equivalents (**$8.4 million** as of Oct 31, 2023) are classified as Level 1, valued using unadjusted quoted prices in active markets[50](index=50&type=chunk) - The company has no Level 3 financial assets or liabilities as of October 31, 2023[52](index=52&type=chunk) [(6) Inventories](index=14&type=section&id=%286%29%20Inventories) Provides a breakdown of inventories by category, including finished goods, finished parts, work in process, and raw materials, as of October 31, 2023, and April 30, 2023 Inventories (in thousands) | Category | Oct 31, 2023 | Apr 30, 2023 | | :---------------- | :----------- | :----------- | | Finished goods | $98,445 | $90,906 | | Finished parts | $2,860 | $2,818 | | Work in process | $132 | $66 | | Raw material | $7,686 | $5,944 | | Total inventories | $109,123 | $99,734 | - Inventory on deposit with suppliers in Asia amounted to **$3.6 million** as of October 31, 2023[54](index=54&type=chunk) [(7) Debt](index=14&type=section&id=%287%29%20Debt) Details the company's revolving line of credit, including its maturity, outstanding borrowings, and applicable interest rate - Revolving line of credit: **$75 million**, maturing March 2027[56](index=56&type=chunk) - No outstanding borrowings on the revolving line of credit as of October 31, 2023[57](index=57&type=chunk) - Interest rate (if borrowed): approximately **6.85%** (SOFR plus applicable margin)[57](index=57&type=chunk) [(8) Equity](index=15&type=section&id=%288%29%20Equity) Discusses changes in stockholders' equity, including treasury stock repurchases, earnings per share calculations, and incentive stock and employee stock purchase plans [Treasury Stock](index=15&type=section&id=Treasury%20Stock) Details the company's common stock repurchase authorization and shares repurchased during the six months ended October 31, 2023 - New **$10.0 million** common stock repurchase authorization approved on October 2, 2023, expiring September 30, 2024[59](index=59&type=chunk) Common Stock Repurchases (Six Months Ended Oct 31, 2023, in thousands, except per share data) | Period | Shares Purchased | Average Price Per Share | Total Value | | :-------------------------------- | :--------------- | :---------------------- | :---------- | | Total year-to-date fiscal year 2024 | 425,527 | $8.81 | $3,762 | - As of October 31, 2023, **$9.5 million** remains available for repurchases under the current authorization[140](index=140&type=chunk) [Earnings per Share](index=15&type=section&id=Earnings%20per%20Share) Presents basic and diluted earnings per share for the three and six months ended October 31, 2023 and 2022, noting anti-dilutive effects Earnings Per Share (in thousands, except per share data) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | | :---------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.01 | $0.03 | | Diluted EPS | $0.01 | $0.03 | | **6 Months Ended Oct 31, 2023** | | | | Basic EPS | $(0.31) | $(0.40) | | Diluted EPS | $(0.31) | $(0.40) | - No common shares added to calculate dilutive EPS for the six months ended October 31, 2023 and 2022, due to operating loss (anti-dilutive effect)[61](index=61&type=chunk) [Incentive Stock and Employee Stock Purchase Plans](index=15&type=section&id=Incentive%20Stock%20and%20Employee%20Stock%20Purchase%20Plans) Describes the company's RSU, PSU, and ESPP programs, including vesting schedules, stock-based compensation expense, and unrecognized compensation - Grants RSUs (vest over 3-4 years) and PSUs (vest over 3-year performance period based on TSR vs. Russell 2000 Index)[62](index=62&type=chunk)[66](index=66&type=chunk) Stock-Based Compensation Activity (Six Months Ended Oct 31, 2023, in thousands) | Metric | RSUs and PSUs Outstanding (2023) | Weighted Average Grant Date Value (2023) | | :--------------------------------- | :------------------------------- | :--------------------------------------- | | Beginning of period | 560,579 | $13.36 | | Awarded | 394,332 | $8.69 | | Vested | (161,149) | $11.86 | | Forfeited | (51,742) | $9.62 | | End of period | 742,020 | $11.46 | - Stock-based compensation expense: **$1.9 million** (six months ended Oct 31, 2023)[69](index=69&type=chunk) - Unrecognized compensation expense: **$3.4 million**, to be recognized over a weighted average remaining contractual term of **1.5 years**[70](index=70&type=chunk) - ESPP allows employees to purchase common stock at **85%** of the lower of the fair market value on the first day of the offering period or the exercise date[71](index=71&type=chunk) [(9) Accrued Expenses](index=17&type=section&id=%289%29%20Accrued%20Expenses) Provides a detailed breakdown of accrued expenses, including freight, sales allowances, professional fees, and commissions, as of October 31, 2023, and April 30, 2023 Accrued Expenses (in thousands) | Category | Oct 31, 2023 | Apr 30, 2023 | | :-------------------------------- | :----------- | :----------- | | Accrued freight | $3,984 | $1,962 | | Accrued sales allowances | $3,579 | $2,453 | | Accrued professional fees | $1,255 | $1,106 | | Accrued commissions | $1,291 | $1,072 | | Accrued warranty | $948 | $966 | | Accrued employee benefits | $518 | $568 | | Accrued taxes other than income | $358 | $346 | | Accrued other | $338 | $268 | | Total accrued expenses | $12,271 | $8,741 | [(10) Income Taxes](index=17&type=section&id=%2810%29%20Income%20Taxes) Presents the income tax benefit or expense and effective tax rates for the three and six months ended October 31, 2023 and 2022, primarily impacted by valuation allowance Income Tax (Benefit)/Expense (in thousands) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Income tax benefit | $(40) | $(161) | | Effective tax rate | -108.1% | -77.0% | | **6 Months Ended Oct 31, 2023** | | | | Income tax expense | $15 | $28 | | Effective tax rate | -0.4% | -0.5% | - Income tax expense/benefit primarily due to a full valuation allowance recorded against deferred tax assets[77](index=77&type=chunk) [(11) Commitments and Contingencies](index=18&type=section&id=%2811%29%20Commitments%20and%20Contingencies) Discusses the company's litigation, the upcoming lease assumption for its Columbia, Missouri facility, and a gain contingency related to duty drawback mechanisms [Litigation](index=18&type=section&id=Litigation) The company is involved in ordinary course litigation, with no material expenses for product liability defense or settlements during the reported periods - Involved in lawsuits, claims, investigations, and proceedings in the ordinary course of business[78](index=78&type=chunk) - No material expenses for product liability litigation defense, administrative costs, or settlement fees for the three and six months ended October 31, 2023 and 2022[78](index=78&type=chunk) [Assignment and Assumption Agreement](index=18&type=section&id=Assignment%20and%20Assumption%20Agreement) Effective January 1, 2024, the company will assume full lease for its Columbia, Missouri facility, expecting incremental annual expenses offset by consolidation savings - Effective January 1, 2024, company will assume full lease for **632,000 sq ft** Columbia, Missouri facility[79](index=79&type=chunk) - Estimated incremental annual expense of **$1.3 million** under the new lease, expected to be offset by facility consolidation savings and distribution efficiencies[79](index=79&type=chunk) - Expected increase of **$12.8 million** in right-of-use asset on the consolidated balance sheet[79](index=79&type=chunk) [Gain Contingency](index=18&type=section&id=Gain%20Contingency) The company is utilizing a duty drawback mechanism to offset Section 301 tariffs on Chinese imports for internationally sold products, with gains recorded upon resolution - Utilizing duty drawback mechanism to offset Section 301 tariffs on Chinese imports for internationally sold products[80](index=80&type=chunk) - Gains from reimbursements will be recorded when the contingency is resolved[80](index=80&type=chunk) [(12) Segment Reporting](index=19&type=section&id=%2812%29%20Segment%20Reporting) The company operates as one segment, with the CEO reviewing only consolidated financial information for resource allocation, despite analyzing revenue by various categories - Company operates as one segment; CEO reviews only consolidated financial information for resource allocation[83](index=83&type=chunk) - Revenue streams are analyzed by customer group, brands, product categories, and channels, but lack full discrete financial information for separate reporting units[83](index=83&type=chunk) - Brand lanes (Adventurer, Harvester, Marksman, Defender) are focused on product development and marketing, not separate reporting units[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of the company's financial condition and results of operations, including key highlights, performance metrics, and liquidity [Overview](index=20&type=section&id=Overview) Provides an overview of the financial discussion and analysis for the three and six months ended October 31, 2023 and 2022, including product category definitions - Discussion and analysis covers financial condition and results of operations for three and six months ended October 31, 2023 and 2022[87](index=87&type=chunk) - Includes forward-looking statements subject to risks and uncertainties[87](index=87&type=chunk) - Product categories defined: Shooting sports (accessories, personal protection) and Outdoor lifestyle (hunting, fishing, camping, rugged outdoor, outdoor cooking)[87](index=87&type=chunk) [Second Quarter Fiscal 2023 Highlights](index=20&type=section&id=Second%20Quarter%20Fiscal%202023%20Highlights) Summarizes key financial metrics for the second quarter and six months ended October 31, 2023, including net sales, gross margin, net income, and Adjusted EBITDAS Second Quarter Fiscal 2023 Highlights (in thousands, except per share data) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $57,900 | $54,400 | | Gross margin | 45.7% | 47.7% | | Net income | $77 | $370 | | Diluted EPS | $0.01 | $0.03 | | Non-GAAP Adjusted EBITDAS | $5,200 | $6,400 | | **6 Months Ended Oct 31, 2023** | | | | Net sales | $101,400 | $98,100 | | Gross margin | 45.6% | 45.9% | | Net loss | $(3,900) | $(5,300) | | Diluted EPS | $(0.29) | $(0.40) | | Non-GAAP Adjusted EBITDAS | $6,400 | $7,800 | [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including net sales, gross profit, operating expenses, operating loss, income taxes, and net income or loss for the reported periods [Net Sales and Gross Profit](index=20&type=section&id=Net%20Sales%20and%20Gross%20Profit) Details the company's net sales and gross profit performance, highlighting drivers of change and gross margin fluctuations for the three and six months ended October 31, 2023 Consolidated Net Sales and Gross Profit (Three Months Ended Oct 31, in thousands) | Metric | 2023 | 2022 | Change | % Change | | :---------------- | :----- | :----- | :----- | :------- | | Net sales | $57,931 | $54,436 | $3,495 | 6.4% | | Cost of sales | $31,441 | $28,474 | $2,967 | 10.4% | | Gross profit | $26,490 | $25,962 | $528 | 2.0% | - Three months: Net sales increase driven by outdoor lifestyle products[95](index=95&type=chunk) - Gross margin decreased **200 basis points** due to promotional product discounts[97](index=97&type=chunk) - Six months: Net sales increase driven by outdoor lifestyle products[102](index=102&type=chunk) - Gross margin remained relatively flat[104](index=104&type=chunk) - New products (SKUs introduced over prior two fiscal years) represented **25.3%** of net sales for the three months and **23.5%** for the six months ended October 31, 2023[97](index=97&type=chunk)[104](index=104&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) Provides a breakdown and analysis of research and development, selling, marketing, distribution, and general and administrative expenses for the reported periods Operating Expenses (Three Months Ended Oct 31, in thousands) | Expense Category | 2023 | 2022 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Research and development | $1,675 | $1,557 | $118 | 7.6% | | Selling, marketing, and distribution | $15,414 | $13,924 | $1,490 | 10.7% | | General and administrative | $9,423 | $10,615 | $(1,192) | -11.2% | | Total operating expenses | $26,512 | $26,096 | $416 | 1.6% | - Three months: Selling, marketing, and distribution increased due to outbound freight and sales volume[107](index=107&type=chunk) - General and administrative decreased due to lower insurance, ERP expenses, and rent from facility consolidations[107](index=107&type=chunk) Operating Expenses (Six Months Ended Oct 31, in thousands) | Expense Category | 2023 | 2022 | Change | % Change | | :-------------------------------- | :----- | :----- | :----- | :------- | | Research and development | $3,274 | $3,313 | $(39) | -1.2% | | Selling, marketing, and distribution | $27,468 | $25,704 | $1,764 | 6.9% | | General and administrative | $19,573 | $21,679 | $(2,106) | -9.7% | | Total operating expenses | $50,315 | $50,696 | $(381) | -0.8% | - Six months: Selling, marketing, and distribution increased due to outbound freight and sales volume[108](index=108&type=chunk) - General and administrative decreased due to lower legal/advisory fees, ERP expenses, and rent from facility consolidations[108](index=108&type=chunk) [Operating Loss](index=23&type=section&id=Operating%20Loss) Discusses the company's operating loss for the three and six months ended October 31, 2023 and 2022, and the factors contributing to its change Operating Loss (in thousands) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | Change | % Change | | :--------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Operating loss | $(22) | $(134) | $112 | -83.6% | | **6 Months Ended Oct 31, 2023** | | | | | | Operating loss | $(4,106) | $(5,695) | $1,589 | -27.9% | - Three months: Operating loss improved due to lower operating expenses[110](index=110&type=chunk) - Six months: Operating loss narrowed due to higher gross profit and lower operating expenses[112](index=112&type=chunk) [Income Taxes](index=23&type=section&id=Income%20Taxes) Presents the income tax benefit or expense and effective tax rates, noting the primary impact of a full valuation allowance against deferred tax assets Income Tax (Benefit)/Expense (in thousands) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | Change | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Income tax benefit | $(40) | $(161) | $121 | -75.2% | | Effective tax rate | -108.1% | -77.0% | -31.1% | | | **6 Months Ended Oct 31, 2023** | | | | | | Income tax expense | $15 | $28 | $(13) | -46.4% | | Effective tax rate | -0.4% | -0.5% | 0.1% | | - Income tax expense/benefit primarily due to a full valuation allowance recorded against deferred tax assets[115](index=115&type=chunk)[116](index=116&type=chunk) [Net Income/(loss)](index=24&type=section&id=Net%20Income%2F%28loss%29) Details the company's net income or loss and diluted EPS for the three and six months ended October 31, 2023 and 2022, and the factors influencing these results Net Income/(Loss) (in thousands, except per share data) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | Change | % Change | | :---------------- | :-------------------------- | :-------------------------- | :----- | :------- | | Net income | $77 | $370 | $(293) | -79.2% | | Diluted EPS | $0.01 | $0.03 | $(0.02) | -66.7% | | **6 Months Ended Oct 31, 2023** | | | | | | Net loss | $(4,036) | $(5,325) | $1,289 | -24.2% | | Diluted EPS | $(0.31) | $(0.40) | $0.09 | -22.5% | - Three months: Net income decreased primarily due to lower gross profit[118](index=118&type=chunk) - Six months: Net loss narrowed primarily due to lower operating expenses and higher gross profit[120](index=120&type=chunk) [Non-GAAP Financial Measure (Adjusted EBITDAS)](index=24&type=section&id=Non-GAAP%20Financial%20Measure%20%28Adjusted%20EBITDAS%29) Defines Adjusted EBITDAS as a non-GAAP measure used to assess underlying performance trends, evaluate strategies, and compare against peers - Adjusted EBITDAS is a non-GAAP measure defined as GAAP net income/(loss) before interest, taxes, depreciation, amortization, stock compensation expense, and certain non-routine items[121](index=121&type=chunk) Non-GAAP Adjusted EBITDAS (in thousands) | Metric | 3 Months Ended Oct 31, 2023 | 3 Months Ended Oct 31, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | | Non-GAAP Adjusted EBITDAS | $5,241 | $6,414 | | **6 Months Ended Oct 31, 2023** | | | | Non-GAAP Adjusted EBITDAS | $6,367 | $7,796 | - Adjusted EBITDAS is used to understand underlying performance trends, evaluate business strategies, make budgeting decisions, and compare performance against peers[121](index=121&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash flows from operating, investing, and financing activities, and its overall liquidity and capital resource management [Operating Activities](index=25&type=section&id=Operating%20Activities) Analyzes cash flows from operating activities, highlighting the impact of changes in accounts receivable, inventory, accounts payable, and accrued expenses - Cash used in operating activities: **$3.2 million** (six months ended Oct 31, 2023) vs. **$6.2 million** provided (prior year)[127](index=127&type=chunk) - Impacted by **$13.6 million** higher accounts receivable and **$9.4 million** higher inventory (planned build for seasons and new product launches)[127](index=127&type=chunk) - Partially offset by **$6.3 million** increased accounts payable and **$3.5 million** increased accrued expenses[127](index=127&type=chunk) - Expects overall inventory balance to decline by end of fiscal year ending April 30, 2024[127](index=127&type=chunk) [Investing Activities](index=26&type=section&id=Investing%20Activities) Details cash used in investing activities, primarily for capital expenditures, and expected future capital expenditure levels - Cash used in investing activities: **$1.6 million** lower (six months ended Oct 31, 2023) due to reduced IT infrastructure and ERP system spending[129](index=129&type=chunk) - Expected capital expenditures for fiscal 2024: **$6.0 million to $7.0 million**[129](index=129&type=chunk) [Financing Activities](index=26&type=section&id=Financing%20Activities) Explains cash used in financing activities, primarily from debt repayment on the revolving line of credit and common stock repurchases - Cash used in financing activities: **$8.8 million** (six months ended Oct 31, 2023)[130](index=130&type=chunk) - Primarily from **$5.0 million** debt repayment on revolving line of credit and **$3.8 million** for common stock repurchases[130](index=130&type=chunk) [Other Matters](index=26&type=section&id=Other%20Matters) States that there are no material changes to critical accounting policies or expected material impacts from recent accounting pronouncements - No material changes to critical accounting policies from those disclosed in the Annual Report on Form 10-K[132](index=132&type=chunk) - No recent accounting pronouncements are expected to have a material impact on condensed consolidated financial statements[133](index=133&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the company's quantitative and qualitative disclosures about market risk from the information provided in its previous Form 10-K - No material changes from market risk disclosures in the Form 10-K[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) As of October 31, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Disclosure controls and procedures were effective as of October 31, 2023, as evaluated by CEO and CFO[135](index=135&type=chunk) - No material changes to internal control over financial reporting during the most recent fiscal quarter[136](index=136&type=chunk) [PART II - OTHER INFORMATION](index=27&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, other information, exhibits, and signatures for the quarterly report [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company's legal proceedings are discussed in Note 11 (Commitments and Contingencies) to the financial statements, which is incorporated by reference - Legal proceedings information is incorporated by reference from Note 11 – Commitments and Contingencies[137](index=137&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on June 28, 2023 - No material changes to risk factors previously disclosed in the Annual Report on Form 10-K[138](index=138&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchases during the six months ended October 31, 2023, totaling 425,527 shares for $3.8 million Common Stock Repurchases (Six Months Ended Oct 31, 2023, in thousands, except per share data) | Period | Total of Shares Purchased | Average Price Paid Per Share | Maximum Value May Yet Be Purchased | | :-------------------------------- | :-------------------------- | :--------------------------- | :--------------------------------- | | Total year-to-date fiscal year 2024 | 425,527 | $8.81 | $9,537 | - New **$10.0 million** common stock repurchase authorization approved on October 2, 2023, expiring September 30, 2024[140](index=140&type=chunk) - As of October 31, 2023, **$9.5 million** of available funds to repurchase common stock under current authorization[140](index=140&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) During the quarter ended October 31, 2023, none of the company's directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended October 31, 2023[141](index=141&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer - Includes Rule 13a-14(a)/15d-14(a) Certifications (31.1, 31.2) and Section 1350 Certifications (32.1, 32.2) from Principal Executive Officer and Principal Financial Officer[143](index=143&type=chunk)[144](index=144&type=chunk) - Includes Inline XBRL Taxonomy Extension Schema, Instance, Calculation, Definition, Label, and Presentation Linkbase Documents (101.SCH, 101.INS, 101.CAL, 101.DEF, 101.LAB, 101.PRE) and Cover Page Interactive Data File (104)[145](index=145&type=chunk)[146](index=146&type=chunk) [Signatures](index=29&type=section&id=Signatures) The report is duly signed on November 30, 2023, by the President and CEO, and the EVP, CFO, and Treasurer - Report signed on **November 30, 2023**[148](index=148&type=chunk) - Signed by Brian D. Murphy (President and CEO) and H. Andrew Fulmer (EVP, CFO, and Treasurer)[148](index=148&type=chunk)

American Outdoor Brands, Inc. (NASDAQ:AOUT) Q1 2024 Earnings Conference Call September 7, 2023 5:00 PM ET Company Participants Liz Sharp - VP, IR Brian Murphy - President & CEO Andrew Fulmer - EVP, CEO & Treasurer Conference Call Participants Eric Wold - B. Riley Securities Alex Sturnieks - Lake Street Capital Markets Matthew Koranda - ROTH Capital Markets Operator Good afternoon and welcome to the American Outdoor Brands First Quarter Fiscal 2024 Earnings Conference Call. All participants will be in listen ...