American Outdoor Brands(US:AOUT)2024-12-05 21:15Financial Performance - Net sales for the three months ended October 31, 2024, were $60.2 million, an increase of $2.3 million or 4.0% compared to the same quarter last year, driven primarily by increased sales in the outdoor lifestyle category [74]. - Gross margin for the same period was 48.0%, an increase of 230 basis points year-over-year [74]. - Net income for the three months ended October 31, 2024, was $3.1 million, or $0.24 per diluted share, compared to net income of $77,000, or $0.01 per diluted share for the same quarter last year [74]. - For the six months ended October 31, 2024, net sales were $101.9 million, an increase of $499,000 or 0.5% over the prior year [75]. - Gross margin for the six months ended October 31, 2024, was 47.0%, an increase of 140 basis points compared to the prior year [75]. - Operating income for the three months ended October 31, 2024, was $3.1 million, a significant increase of $3.1 million compared to a loss of $22,000 in the same quarter last year, resulting in an operating margin of 5.1% [92]. - Net income for the six months ended October 31, 2024, was $746,000, compared to a net loss of $4.0 million in the prior year, marking an increase of $4.78 million [98]. - Adjusted EBITDAS for the three months ended October 31, 2024, was $7.49 million, compared to $5.24 million for the same period last year [102]. Sales Channels - E-commerce channel net sales for the three months ended October 31, 2024, increased by $820,000, or 3.5% year-over-year [80]. - International net sales for the three months ended October 31, 2024, increased by $436,000, or 14.8%, primarily due to increased sales in Canada [81]. - Traditional channel net sales increased by $1.6 million, or 2.6%, over the prior year comparable period, driven by higher sales of shooting accessories and hunting products [87]. - New products represented 21.5% of net sales for the three months ended October 31, 2024 [82]. - For the six months ended October 31, 2024, new products accounted for 22.7% of net sales [88]. Expenses and Cost Management - Research and development expenses increased by $191,000 (11.4%) for the three months ended October 31, 2024, compared to the same period last year, primarily due to higher consulting and third-party service expenses [90]. - Total operating expenses decreased by $675,000 (2.5%) for the three months ended October 31, 2024, with operating expenses as a percentage of net sales improving to 42.9% from 45.8% [90]. - For the six months ended October 31, 2024, total operating expenses decreased by $2.98 million (5.9%), with operating expenses as a percentage of net sales improving to 46.5% from 49.6% [91]. - Selling, marketing, and distribution expenses decreased by $441,000 (2.9%) for the three months ended October 31, 2024, primarily due to lower advertising expenses [90]. Cash Flow and Capital Expenditures - Cash used in operating activities was $12.3 million for the six months ended October 31, 2024, compared to $3.2 million for the same period in 2023, reflecting a 282.2% increase [107]. - Cash used in investing activities was $1.6 million during the six months ended October 31, 2024, unchanged from the prior year [108]. - Cash used in financing activities was $1.6 million for the six months ended October 31, 2024, primarily due to $1.4 million used to repurchase 153,497 shares of common stock [109]. - The company expects to spend approximately $3.5 million to $4.5 million on capital expenditures in fiscal 2025, a decrease of $1.5 million to $2.5 million from the $6.0 million spent in fiscal 2024 [108]. - As of October 31, 2024, the company had $14.2 million in cash equivalents, down from $29.7 million as of April 30, 2024 [111]. Future Outlook and Risks - The company plans to utilize cash flows for business investments, including research and development for new product initiatives and potential acquisitions [103]. - The company anticipates that future capital requirements will depend on various factors, including net sales and product development efforts [110]. - The company may face limitations in taking advantage of business opportunities if sufficient funds are not available on acceptable terms [110].