American Outdoor Brands, Inc. Reports First Quarter Fiscal 2021 Financial Results
First Quarter Fiscal 2021 Financial Highlights
- Quarterly net sales were
$50.5 million , an increase of$17.3 million , or 51.9%, over net sales of$33.2 million for the comparable quarter last year, driven primarily by increases in both e-commerce and traditional sales channels. - Quarterly gross margin was 47.0%, an increase of 590 basis points, over gross margin of 41.1% for the comparable quarter last year.
- Quarterly net income was
$1.8 million , or$0.13 per diluted share, compared with a net loss of$(5.0) million , or$(0.36) per diluted share, for the comparable quarter last year. - Quarterly non-GAAP net income was
$5.0 million , or$0.36 per diluted share, compared with a non-GAAP net loss of$(1.2 million) , or$(0.09) per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to the acquired intangible amortization, stock compensation, and other costs. - Quarterly Adjusted EBITDAS was
$8.7 million , or 17.3% of net sales, compared with$10,000 , or 0.0% of net sales, for the comparable quarter last year.
Outlook
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(Unaudited)
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Range for the Year Ending |
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Net sales (in thousands) |
$ 195,000 |
$ 205,000 |
|||
GAAP loss per share - diluted |
$ (0.22) |
$ (0.11) |
|||
Amortization of acquired intangible assets |
1.14 |
1.14 |
|||
Stock Compensation |
0.21 |
0.21 |
|||
COVID-19 |
0.02 |
0.02 |
|||
Transition costs |
0.03 |
0.03 |
|||
Related party interest income |
(0.03) |
(0.03) |
|||
Tax effect of non-GAAP adjustments |
(0.37) |
(0.37) |
|||
Non-GAAP income per share - diluted |
$ 0.78 |
$ 0.89 |
|||
Non GAAP Adjusted EBITDAS (in thousands) |
$ 19,000 |
$ 21,000 |
Conference Call and Webcast
The company will host a conference call and webcast tomorrow,
Reconciliation of
In this press release, certain non-GAAP financial measures, including "non-GAAP net income" and "Adjusted EBITDAS" are presented. From time-to-time, the company considers and uses these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. The company believes it is useful for itself and the reader to review, as applicable, both (1) GAAP measures that include (i) amortization of acquired intangible assets, (ii) stock compensation, (iii) transition costs, (iv) COVID-19 expenses, (v) the tax effect of non-GAAP adjustments, (vi) income tax expense/(benefit), (viii) depreciation and amortization, and (ix) related party interest income; and (2) the non-GAAP measures that exclude such information. The company presents these non-GAAP measures because it considers them an important supplemental measure of its performance. The company's definition of these adjusted financial measures may differ from similarly named measures used by others. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the company's GAAP measures. The principal limitations of these measures are that they do not reflect the company's actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. All statements other than statements of historical facts contained or incorporated herein by reference in this press release, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "estimates," "expects," "intends," "targets," "contemplates," "projects," "predicts," "may," "might," "plan," "would," "should," "could," "may," "can," "potential," "continue," "objective," or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, the effects of the COVID-19, pandemic, including potential disruptions in our ability to source the materials necessary for the production of our products, disruptions and delays in the manufacture of our products, and difficulties encumbered by retailers and other components of the distribution channel for our products; economic, social, political, legislative, and regulatory factors; recently issued accounting standards on our consolidated financial statements; failure to realize the anticipated benefits from being a public company separate from
Contact:
lsharp@aob.com
(573) 303-4620
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COMBINED STATEMENTS OF INCOME/(LOSS) |
||||
(Unaudited) |
||||
For the Three Months Ended |
||||
2020 |
2019 |
|||
(Unaudited) |
||||
(In thousands, except per share data) |
||||
Net sales (including |
$ 50,468 |
$ 33,216 |
||
Cost of sales |
26,737 |
19,550 |
||
Gross profit |
23,731 |
13,666 |
||
Operating expenses: |
||||
Research and development |
1,230 |
1,332 |
||
Selling, marketing, and distribution |
10,543 |
7,717 |
||
General and administrative |
9,494 |
11,836 |
||
Total operating expenses |
21,267 |
20,885 |
||
Operating income/(loss) |
2,464 |
(7,219) |
||
Other (expense)/income, net: |
||||
Other income/(expense), net |
84 |
(2) |
||
Related party interest income, net |
336 |
939 |
||
Total other (expense)/income, net |
420 |
937 |
||
Income/(loss) from operations before income taxes |
2,884 |
(6,282) |
||
Income tax expense/(benefit) |
1,095 |
(1,299) |
||
Net income/(loss)/comprehensive income/(loss) |
$ 1,789 |
$ (4,983) |
||
Net income/(loss) per share: |
||||
Basic |
$ 0.13 |
$ (0.36) |
||
Diluted |
$ 0.13 |
$ (0.36) |
||
Weighted average number of common shares outstanding: |
||||
Basic |
13,975 |
13,975 |
||
Diluted |
13,975 |
13,975 |
|
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COMBINED BALANCE SHEETS |
||||
(Unaudited) |
||||
As of: |
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|
|
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(In thousands) |
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ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ — |
$ 234 |
||
Accounts receivable, net of allowance for credit losses of |
41,993 |
35,096 |
||
Inventories |
69,593 |
59,999 |
||
Prepaid expenses and other current assets |
3,471 |
3,244 |
||
Income tax receivable |
136 |
104 |
||
Total current assets |
115,193 |
98,677 |
||
Property, plant, and equipment, net |
9,994 |
9,677 |
||
Intangibles, net |
65,413 |
69,152 |
||
Goodwill |
64,315 |
64,315 |
||
Right of use assets |
2,264 |
2,772 |
||
Deferred income taxes |
3,580 |
3,580 |
||
Other assets |
19 |
242 |
||
$ 260,778 |
$ 248,415 |
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LIABILITIES AND EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 15,112 |
$ 8,936 |
||
Accrued expenses |
10,995 |
7,655 |
||
Accrued payroll and incentives |
3,315 |
3,249 |
||
Lease liabilities, current |
1,258 |
1,324 |
||
Accrued profit sharing |
275 |
217 |
||
Total current liabilities |
30,955 |
21,381 |
||
Lease liabilities, net of current portion |
2,298 |
2,830 |
||
Other non-current liabilities |
183 |
106 |
||
Total liabilities |
33,436 |
24,317 |
||
Commitments and contingencies |
||||
Equity: |
||||
Parent company investment |
227,342 |
224,098 |
||
Total equity |
227,342 |
224,098 |
||
$ 260,778 |
$ 248,415 |
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COMBINED STATEMENTS OF CASH FLOWS |
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(Unaudited) |
|||
For the Three Months Ended |
|||
2020 |
2019 |
||
(In thousands) |
|||
Cash flows from operating activities: |
|||
Net income/(loss) |
$ 1,789 |
$ (4,983) |
|
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: |
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Depreciation and amortization |
5,388 |
5,977 |
|
Provision for losses on notes and accounts receivable |
97 |
922 |
|
Stock-based compensation expense |
298 |
314 |
|
Changes in operating assets and liabilities: |
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Accounts receivable |
(6,994) |
3,542 |
|
Inventories |
(9,594) |
(5,630) |
|
Accounts payable |
6,165 |
150 |
|
Accrued liabilities |
3,464 |
(683) |
|
Other |
(49) |
(867) |
|
Net cash (used in)/provided by operating activities |
564 |
(1,258) |
|
Cash flows from investing activities: |
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Payments to acquire patents and software |
(105) |
(38) |
|
Payments to acquire property and equipment |
(879) |
(433) |
|
Net cash used in investing activities |
(984) |
(471) |
|
Cash flows from financing activities: |
|||
Net transfers from Parent |
186 |
1,754 |
|
Net cash provided by financing activities |
$ 186 |
$ 1,754 |
|
Net decrease in cash and cash equivalents |
(234) |
25 |
|
Cash and cash equivalents, beginning of period |
234 |
162 |
|
Cash and cash equivalents, end of period |
$ — |
$ 187 |
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (Dollars in thousands, except per share data) (Unaudited)
|
|||||||
For the Three Months Ended |
|||||||
2020 |
2019 |
||||||
$ |
% of Sales |
$ |
% of Sales |
||||
GAAP gross profit |
|
47.0% |
|
41.1% |
|||
Transition costs |
127 |
0.3% |
620 |
1.9% |
|||
Non-GAAP gross profit |
|
47.3% |
|
43.0% |
|||
GAAP operating expenses |
|
42.1% |
|
62.9% |
|||
Amortization of acquired intangible assets |
(4,012) |
-7.9% |
(4,661) |
-14.0% |
|||
Stock compensation |
(298) |
-0.6% |
(314) |
-0.9% |
|||
Transition costs |
(124) |
-0.2% |
(466) |
-1.4% |
|||
COVID-19 |
(223) |
-0.4% |
— |
— |
|||
Non-GAAP operating expenses |
|
32.9% |
|
46.5% |
|||
GAAP operating income/(loss) |
$ 2,464 |
4.9% |
$ (7,219) |
-21.7% |
|||
Amortization of acquired intangible assets |
4,012 |
7.9% |
4,661 |
14.0% |
|||
Stock compensation |
298 |
0.6% |
314 |
0.9% |
|||
Transition costs |
251 |
0.5% |
1,086 |
3.3% |
|||
COVID-19 |
223 |
0.4% |
— |
— |
|||
Non-GAAP operating income/(loss) |
$ 7,248 |
14.4% |
$ (1,158) |
-3.5% |
|||
GAAP net income/(loss) |
$ 1,789 |
3.5% |
$ (4,983) |
-15.0% |
|||
Amortization of acquired intangible assets |
4,012 |
7.9% |
4,661 |
14.0% |
|||
Stock compensation |
298 |
0.6% |
314 |
0.9% |
|||
Transition costs |
251 |
0.5% |
1,086 |
3.3% |
|||
COVID-19 |
223 |
0.4% |
— |
— |
|||
Related party interest income |
(336) |
-0.7% |
(939) |
-2.8% |
|||
Tax effect of non-GAAP adjustments |
(1,201) |
-2.4% |
(1,383) |
-4.2% |
|||
Non-GAAP net income/(loss) |
$ 5,036 |
10.0% |
$ (1,244) |
-3.7% |
|||
GAAP net income/(loss) per share - diluted |
$ 0.13 |
$ (0.36) |
|||||
Amortization of acquired intangible assets |
0.29 |
0.33 |
|||||
Stock compensation |
0.02 |
0.02 |
|||||
Transition costs |
0.02 |
0.08 |
|||||
COVID-19 |
0.02 |
— |
|||||
Related party interest income |
(0.02) |
(0.07) |
|||||
Tax effect of non-GAAP adjustments |
(0.09) |
(0.10) |
|||||
Non-GAAP net income/(loss) per share - diluted (a) |
$ 0.36 |
$ (0.09) |
|||||
(a) Non-GAAP net income per share does not foot due to rounding. |
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RECONCILIATION OF GAAP NET (LOSS)/INCOME TO NON-GAAP ADJUSTED EBITDAS
(In thousands) (Unaudited)
|
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For the Three Months Ended |
|||||
2020 |
2019 |
||||
GAAP net income/(loss) |
$ |
1,789 |
$ (4,983) |
||
Income tax expense/(benefit) |
1,095 |
(1,299) |
|||
Depreciation and amortization |
5,388 |
5,831 |
|||
Related party interest income |
(336) |
(939) |
|||
Stock compensation |
298 |
314 |
|||
Transition costs |
251 |
1,086 |
|||
COVID-19 costs |
223 |
– |
|||
Non-GAAP Adjusted EBITDAS |
$ |
8,708 |
$ 10 |
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