American Outdoor Brands(AOUT) - 2025 Q2 - Quarterly Results

Q2 FY2025 Financial Results Announcement American Outdoor Brands reported strong Q2 FY2025 financial results, driven by innovation and growth across all sales channels, leading to increased fiscal year 2025 guidance Q2 FY2025 Performance Highlights American Outdoor Brands reported strong Q2 FY2025 results with a 4.0% year-over-year increase in net sales to $60.2 million, improved gross margin, and significant growth in Non-GAAP Adjusted EBITDAS and net income Q2 FY2025 Key Financial Metrics (Y/Y) | Metric | Q2 FY2025 (USD) | Q2 FY2024 (USD) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $60.2 million | $57.9 million | +4.0% | | Gross Margin | 48.0% | 45.7% | +230 bps | | GAAP Net Income | $3.1 million | $77 thousand | +3940% | | GAAP EPS (Diluted) | $0.24 | $0.01 | +2300% | | Non-GAAP Net Income | $4.9 million | $3.3 million | +48.5% | | Non-GAAP EPS (Diluted) | $0.37 | $0.25 | +48.0% | | Non-GAAP Adjusted EBITDAS | $7.5 million | $5.2 million | +42.9% | - The company experienced growth across all sales channels in Q2 FY2025: - Traditional Channel Net Sales: Up 4.3% - E-Commerce Channel Net Sales: Up 3.5% - Domestic Channel Net Sales: Up 3.4% - International Net Sales: Up 14.8%[1][3] Management Commentary Management attributed the strong quarterly performance to successful innovation, driving growth in both Outdoor Lifestyle and Shooting Sports categories, supported by a robust new product pipeline and disciplined capital management - Quarterly growth was driven by a 5.4% increase in the Outdoor Lifestyle category and a 1.9% increase in the Shooting Sports category[3] - Strong performance was noted in specific brands: BOG, MEAT! Your Maker, and Grilla in Outdoor Lifestyle, and Caldwell Claymore and Tipton in Shooting Sports[4] - The company has a robust new product pipeline set to debut at SHOT Show in January 2025, which has received strong early order indications and commitments for expanded shelf space from retailers[5] - The company maintained a strong financial position, ending the quarter with $14.2 million in cash, no debt, and having repurchased approximately $1.0 million of its common stock[5] Financial Outlook Following strong Q2 results and positive retailer feedback, American Outdoor Brands increased its financial guidance for fiscal year 2025 and established its initial net sales outlook for fiscal year 2026 Updated FY2025 and Initial FY2026 Guidance | Fiscal Year | Metric | Low Range (USD) | High Range (USD) | | :--- | :--- | :--- | :--- | | FY2025 | Net Sales | $205.0 million | $210.0 million | | FY2025 | GAAP Loss per Share (Diluted) | ($0.36) | ($0.24) | | FY2025 | Non-GAAP Adjusted EBITDAS | $13.5 million | $15.0 million | | FY2026 | Net Sales | $220.0 million | $230.0 million | Financial Statements The company's financial statements for Q2 FY2025 show increased assets and liabilities, significant net sales growth, and cash used in operations primarily due to inventory and receivables Consolidated Balance Sheets As of October 31, 2024, total assets increased to $254.1 million from $240.6 million at April 30, 2024, driven by higher inventories and accounts receivable, while total liabilities rose to $75.3 million Selected Balance Sheet Data (in thousands) | Account | Oct 31, 2024 (in thousands) | Apr 30, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $14,223 | $29,698 | | Accounts receivable, net | $43,259 | $25,728 | | Inventories | $111,566 | $93,315 | | Total current assets | $174,222 | $155,374 | | Total assets | $254,125 | $240,597 | | Accounts payable | $25,376 | $14,198 | | Total liabilities | $75,271 | $62,672 | | Total equity | $178,854 | $177,925 | Consolidated Statements of Operations For the three months ended October 31, 2024, the company's net sales grew to $60.2 million, gross profit increased, and operating income significantly improved, leading to a surge in net income to $3.1 million Statement of Operations Highlights (in thousands, except per share data) | Metric | 3 Months Ended Oct 31, 2024 (in thousands) | 3 Months Ended Oct 31, 2023 (in thousands) | | :--- | :--- | :--- | | Net sales | $60,232 | $57,931 | | Gross profit | $28,907 | $26,490 | | Operating income/(loss) | $3,070 | ($22) | | Net income | $3,111 | $77 | | Diluted EPS | $0.24 | $0.01 | Consolidated Statements of Cash Flows For the six months ended October 31, 2024, net cash used in operating activities increased to $12.3 million, primarily due to higher inventories and accounts receivable, with the period ending with a cash balance of $14.2 million Cash Flow Summary (Six Months Ended Oct 31, in thousands) | Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($12,287) | ($3,215) | | Net cash used in investing activities | ($1,573) | ($1,581) | | Net cash used in financing activities | ($1,615) | ($8,775) | | Net decrease in cash | ($15,475) | ($13,571) | | Cash at end of period | $14,223 | $8,379 | Reconciliation of GAAP to Non-GAAP Measures The company provides non-GAAP reconciliations to offer a clearer view of underlying performance, adjusting GAAP net income for non-cash and non-recurring items Reconciliation of Key Metrics The company provides non-GAAP financial measures to offer a clearer view of underlying performance trends, with Q2 FY2025 GAAP net income of $3.1 million adjusted to a non-GAAP net income of $4.9 million GAAP to Non-GAAP Net Income Reconciliation (Q2, in thousands) | Description | Q2 FY2025 (in thousands) | Q2 FY2024 (in thousands) | | :--- | :--- | :--- | | GAAP net income/(loss) | $3,111 | $77 | | Amortization of acquired intangible assets | $2,120 | $2,960 | | Stock compensation | $866 | $1,005 | | Other adjustments | $199 | $270 | | Income tax adjustments | ($1,439) | ($1,023) | | Non-GAAP net income | $4,857 | $3,289 | Reconciliation to Adjusted EBITDAS Non-GAAP Adjusted EBITDAS for Q2 FY2025 was $7.5 million, a significant increase from $5.2 million in the prior-year quarter, derived from GAAP net income by adding back specific non-cash and non-recurring items GAAP Net Income to Non-GAAP Adjusted EBITDAS Reconciliation (Q2, in thousands) | Description | Q2 FY2025 (in thousands) | Q2 FY2024 (in thousands) | | :--- | :--- | :--- | | GAAP net income/(loss) | $3,111 | $77 | | Interest (income)/expense | $6 | ($6) | | Income tax expense/(benefit) | $12 | ($40) | | Depreciation and amortization | $3,293 | $3,935 | | Stock compensation | $866 | $1,005 | | Other adjustments | $199 | $270 | | Non-GAAP Adjusted EBITDAS | $7,487 | $5,241 | Additional Information This section provides details on the upcoming conference call and includes a safe harbor statement outlining risks associated with forward-looking statements Conference Call and Webcast The company announced it will host a conference call and webcast on December 5, 2024, at 5:00 p.m. Eastern Time to discuss its second quarter fiscal 2025 financial results - A conference call and webcast were scheduled for December 5, 2024, to discuss the financial and operational results with CEO Brian Murphy and CFO Andrew Fulmer[6] Safe Harbor Statement This press release includes forward-looking statements regarding future operating results, business strategy, and financial outlook, cautioning that these statements are subject to significant risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements concerning future financial position, business strategy, and operational plans, including expectations for new product reception and achieving financial guidance[9][10] - Key risks that could affect actual results include supply chain disruptions, economic and political factors, inventory levels, consumer tastes, and other factors detailed in SEC filings[10]