American Outdoor Brands(US:AOUT)2023-03-08 16:00Financial Performance - Net sales for the three months ended January 31, 2023, were $50.9 million, a decrease of $19.2 million, or 27.4%, compared to the same quarter last year [100]. - The company reported a net loss of $2.9 million, or ($0.21) per diluted share, compared to a net income of $3.8 million, or $0.27 per diluted share, for the same quarter last year [100]. - For the nine months ended January 31, 2023, net sales were $149.0 million, a decrease of $52.6 million, or 26.1%, from the prior year [100]. - Operating loss for the three months ended January 31, 2023 was $3.001 million, a decrease of $7.726 million from the operating income of $4.725 million in the same period last year, representing a -163.5% change [124]. - Net loss for the three months ended January 31, 2023 was $2.863 million, compared to a net income of $3.766 million in the prior year, a change of -176.0% [131]. - Adjusted EBITDAS for the three months ended January 31, 2023 was $3.275 million, down from $10.549 million in the same period last year [137]. Gross Margin and Expenses - Gross margin for the three months ended January 31, 2023, was 47.1%, an increase of 130 basis points from the comparable quarter last year [100]. - Gross margin for the nine months ended January 31, 2023, was 46.3%, a decrease of 40 basis points from the prior year [112]. - Operating expenses for the three months ended January 31, 2023, totaled $26.99 million, representing 53.0% of net sales [120]. - Research and development expenses increased by 14.4% to $1.575 million for the three months ended January 31, 2023 [120]. - Research and development expenses increased by $533,000 to $4.887 million, a 12.2% increase from the previous year [122]. - Selling, marketing, and distribution expenses decreased by $4.3 million to $40.226 million, a 9.6% decline year-over-year [122]. - General and administrative expenses increased by $1.555 million to $32.575 million, a 5.0% increase from the previous year [122]. Cash Flow and Investments - Total cash flow for the nine months ended January 31, 2023 was $2.189 million, a significant improvement of $40.212 million compared to a cash outflow of $38.023 million in the previous year [141]. - Operating activities generated $24.263 million in cash for the nine months ended January 31, 2023, a change of $50.449 million from the previous year's cash outflow of $26.186 million [141]. - Cash generated by operating activities was $24.3 million for the nine months ended January 31, 2023, compared to cash used of $26.2 million for the same period in 2022, primarily impacted by a $16.2 million reduction in inventory [143]. - Cash used in investing activities was $480,000 lower during the nine months ended January 31, 2023, with expected capital expenditures of $6.0 million to $6.5 million for fiscal 2023, a decrease from the previous year [145]. - Cash used in financing activities was $17.8 million for the nine months ended January 31, 2023, primarily from $15.2 million in payments on the revolving line of credit and $2.6 million for stock repurchases [146]. - As of January 31, 2023, the company had $21.7 million in cash equivalents, an increase from $19.5 million as of April 30, 2022 [148]. Future Outlook - The company expects to incur approximately $8.8 million in total costs for its information technology infrastructure over fiscal 2022 and fiscal 2023 [138]. - Future capital requirements will depend on factors such as net sales, product development spending, and potential acquisitions, with concerns about the availability of equity or debt financing on acceptable terms [147]. - Inventory levels are expected to decline in the fourth quarter of fiscal 2023 due to reduced planned inventory purchases [144]. Product Performance - E-commerce channel net sales decreased by $10.9 million, or 30.8%, primarily due to lower sales in the shooting sports category [108]. - New products represented 23.9% of net sales for the three months ended January 31, 2023 [109]. - The company acquired Grilla Grills for $27 million in March 2022, fully integrating it into the business by January 31, 2023 [99].