American Outdoor Brands(US:AOUT)2022-07-13 16:00Financial Performance - Net sales for fiscal 2022 were $247.5 million, a decrease of $29.2 million, or 10.5%, from the prior fiscal year[295]. - The net loss for fiscal 2022 was $64.9 million, or ($4.66) per diluted share, compared to net income of $18.4 million, or $1.29 per diluted share, for the prior fiscal year[295]. - Operating income for fiscal 2022 was $(56.5) million, a decrease of $80.0 million or -340.6% compared to fiscal 2021[310]. - Net loss for fiscal 2022 was $(64.9) million, a decrease of $83.3 million or -452.5% compared to a net income of $18.4 million in fiscal 2021[317]. - Adjusted EBITDAS for fiscal 2022 was $35.0 million, down from $47.3 million in fiscal 2021, indicating a decrease of $12.3 million[323]. Sales and Revenue - E-commerce channel net sales decreased by $11.3 million, or 10.4%, while direct-to-consumer sales increased by 73.0% over the prior year[303]. - Domestic net sales decreased by $32.8 million, or 12.2%, while international net sales increased by 39.6%[300]. - New products accounted for 25.8% of net sales for fiscal 2022, with approximately 250 to 350 new SKUs introduced each year[304]. Expenses and Costs - Total operating expenses for fiscal 2022 were $170.8 million, an increase of 65.3% compared to $103.3 million in fiscal 2021, primarily due to a non-cash goodwill impairment charge of $67.8 million[307]. - Excluding non-cash goodwill impairment, operating income was $11.3 million, down $12.2 million from the previous year due to lower sales volumes and gross profit[311]. - Cash used in operating activities was $(17.9) million in fiscal 2022, a decrease of $51.3 million or -153.9% from cash generated of $33.3 million in fiscal 2021[331]. - Cash used in investing activities was $33.6 million in fiscal 2022, significantly higher than $4.2 million in fiscal 2021, primarily due to the acquisition of Grilla Grills for $27.0 million[335]. Acquisitions and Investments - The company acquired Grilla Grills for $27 million in March 2022, with plans for full integration in fiscal 2023[294]. - The company plans to invest approximately $9.0 million in information technology infrastructure over fiscal 2022 and fiscal 2023[329]. Debt and Financing - The revolving line of credit was increased to $75.0 million in March 2022, maturing in March 2027, with interest rates based on SOFR plus an applicable margin ranging from 0.25% to 1.75%[338]. - As of April 30, 2022, the company had $25.2 million of borrowings outstanding on the revolving line of credit, which bore interest at 1.56%[339]. - Cash provided by financing activities was $10.3 million in fiscal 2022, a decrease from $31.4 million in the prior fiscal year, primarily due to $15.0 million used for stock repurchase[336]. Impairments and Valuation - The company recorded a non-cash impairment charge of $67.8 million for goodwill during the fourth quarter of fiscal 2022 due to a decline in stock price and market capitalization[346]. - The company established a full valuation allowance for deferred tax assets, indicating it is more likely than not that these assets will not be realized[353]. - The company evaluated the recoverability of long-lived assets and found no indications of impairment as of April 30, 2022[349]. Market Conditions and Risks - Inflationary factors, including increased labor and overhead costs, may negatively impact future gross margins and operating expenses[340]. - The company is exposed to variable interest rate risks associated with its $75.0 million revolving line of credit, with $25.2 million of borrowings outstanding as of April 30, 2022[361]. Contractual Obligations - Total contractual obligations as of April 30, 2022, amounted to $116.1 million, including long-term debt obligations of $25.2 million and operating lease obligations of $37.8 million[356]. - Purchase obligations totaled $50.8 million as of April 30, 2022, representing binding commitments to purchase raw materials and finished products[359].