American Outdoor Brands, Inc. Reports Third Quarter Fiscal 2021 Financial Results
Third Quarter Fiscal 2021 Financial Highlights
- Quarterly net sales were
$82.6 million , an increase of$39.3 million , or 90.7%, over net sales of$43.3 million for the comparable quarter last year, reflecting increases in both e-commerce and traditional sales channels.
- Quarterly gross margin was 45.2%, an increase of 110 basis points, over gross margin of 44.1% for the comparable quarter last year.
- Quarterly net income was
$8.0 million , or$0.56 per diluted share, compared with a net loss$147,000 , or ($0.01 ) per diluted share, for the comparable quarter last year.
- Quarterly non-GAAP net income was
$11.8 million , or$0.82 per diluted share, compared with a non-GAAP net income of$1.8 million , or$0.13 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to acquired intangible amortization, stock compensation, transition costs, COVID-19 expenses, and other costs.
- Quarterly Adjusted EBITDAS was
$15.8 million , or 19.1% of net sales, compared with$3.4 million , or 7.9% of net sales, for the comparable quarter last year.
Outlook
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Range for the Year Ending |
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Net sales (in thousands) |
$ 268,000 |
$ 272,000 |
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GAAP income per share - diluted |
$ 1.07 |
$ 1.14 |
|||
Amortization of acquired intangible assets |
1.13 |
1.13 |
|||
Stock compensation |
0.20 |
0.20 |
|||
COVID-19 expenses |
0.02 |
0.02 |
|||
Transition costs |
0.02 |
0.02 |
|||
Related party interest income |
(0.03) |
(0.03) |
|||
Other |
0.01 |
0.01 |
|||
Tax effect of non-GAAP adjustments |
(0.34) |
(0.34) |
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Non-GAAP income per share - diluted |
$ 2.08 |
$ 2.15 |
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Non-GAAP Adjusted EBITDAS (in thousands) |
$ 43,500 |
$ 44,500 |
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The Company is not providing a quantitative reconciliation of non-GAAP Adjusted EBITDAS guidance in reliance on the "unreasonable efforts" exception for forward-looking non-GAAP measures set forth in
Conference Call and Webcast
The Company will host a conference call and webcast today,
Reconciliation of
In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "non-GAAP income per share diluted," and "Adjusted EBITDAS" are presented. A reconciliation of these and other non-GAAP financial measures are contained at the end of this press release. A reconciliation of projected non-GAAP income per share diluted is contained under the "Outlook" section of this press release. From time-to-time, the Company considers and uses these non-GAAP financial measures as 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), (vii) depreciation and amortization, and (viii) 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 and believes the disclosure of such measures provides useful information to investors regarding the Company's financial condition and results of operations. 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
Contact:
lsharp@aob.com
(573) 303-4620
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. Specific forward-looking statements in this press release include our belief that our 'Dock & Unlock' strategy, designed to provide entry in new and larger addressable markets, continues to produce results as our brands progress along their transition from 'Niche to Known'; our belief that our increase in Adjusted EBITDAS demonstrated our highly leverageable platform, which is made possible by our earlier investments in our e-commerce and logistics capabilities; our anticipation that we currently have over
Forward-looking statements included in this press release speak only as of the date of this press release. The Company does not undertake any obligation to update its forward-looking statements to reflect events or circumstances after the date of this press release except as may be required by the federal securities laws.
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CONSOLIDATED AND COMBINED BALANCE SHEETS |
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(Unaudited) |
|||||
As of: |
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|
|
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(In thousands, except per share data) |
|||||
ASSETS |
|||||
Current assets: |
|||||
Cash and cash equivalents |
$ 45,510 |
$ 234 |
|||
Accounts receivable, net of allowance for credit losses of |
56,064 |
35,096 |
|||
Inventories |
73,690 |
59,999 |
|||
Prepaid expenses and other current assets |
3,184 |
3,244 |
|||
Income tax receivable |
— |
104 |
|||
Total current assets |
178,448 |
98,677 |
|||
Property, plant, and equipment, net |
10,422 |
9,677 |
|||
Intangible assets, net |
57,605 |
69,152 |
|||
Goodwill |
64,315 |
64,315 |
|||
Right-of-use assets |
25,785 |
2,772 |
|||
Deferred income taxes |
4,360 |
3,580 |
|||
Other assets |
470 |
242 |
|||
Total assets |
$ 341,405 |
$ 248,415 |
|||
LIABILITIES AND EQUITY |
|||||
Current liabilities: |
|||||
Accounts payable |
$ 15,820 |
$ 8,936 |
|||
Accrued expenses |
12,071 |
7,655 |
|||
Accrued payroll and incentives |
6,163 |
3,249 |
|||
Accrued income taxes |
1,078 |
— |
|||
Lease liabilities, current |
1,758 |
1,324 |
|||
Accrued profit sharing |
1,178 |
217 |
|||
Total current liabilities |
38,068 |
21,381 |
|||
Lease liabilities, net of current portion |
25,239 |
2,830 |
|||
Other non-current liabilities |
394 |
106 |
|||
Total liabilities |
63,701 |
24,317 |
|||
Equity: |
|||||
Preferred stock, |
— |
— |
|||
Common stock, |
14 |
— |
|||
Former net parent company investment |
— |
224,098 |
|||
Additional paid in capital |
264,409 |
— |
|||
Retained earnings |
13,281 |
— |
|||
Total equity |
277,704 |
224,098 |
|||
Total liabilities and equity |
$ 341,405 |
$ 248,415 |
|||
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CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) |
|||||||||||||||||
(Dollars in thousands, except per share data) |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||||
Net sales |
|
|
$ 212,214 |
$ 124,295 |
|||||||||||||
Cost of sales |
45,276 |
24,220 |
114,038 |
72,421 |
|||||||||||||
Gross profit |
37,373 |
19,116 |
98,176 |
51,874 |
|||||||||||||
Operating expenses: |
|||||||||||||||||
Research and development |
1,478 |
1,345 |
4,641 |
3,870 |
|||||||||||||
Selling, marketing, and distribution |
15,121 |
10,561 |
41,426 |
28,243 |
|||||||||||||
General and administrative |
10,591 |
9,035 |
29,899 |
30,278 |
|||||||||||||
Total operating expenses |
27,190 |
20,941 |
75,966 |
62,391 |
|||||||||||||
Operating income/(loss) |
10,183 |
(1,825) |
22,210 |
(10,517) |
|||||||||||||
Other income/(expense), net: |
|||||||||||||||||
Other income, net |
141 |
7 |
352 |
— |
|||||||||||||
Interest (expense)/income, net |
(51) |
1,522 |
341 |
3,638 |
|||||||||||||
Total other income, net |
90 |
1,529 |
693 |
3,638 |
|||||||||||||
Income/(loss) from operations before income taxes |
10,273 |
(296) |
22,903 |
(6,879) |
|||||||||||||
Income tax expense/(benefit) |
2,244 |
(149) |
5,746 |
(1,353) |
|||||||||||||
Net income/(loss)/comprehensive income/(loss) |
$ 8,029 |
$ (147) |
$ 17,157 |
$ (5,526) |
|||||||||||||
Net income/(loss) per share: |
|||||||||||||||||
Basic |
$ 0.57 |
$ (0.01) |
$ 1.23 |
$ (0.40) |
|||||||||||||
Diluted |
$ 0.56 |
$ (0.01) |
$ 1.20 |
$ (0.40) |
|||||||||||||
Weighted average number of common shares |
|||||||||||||||||
Basic |
13,999 |
13,975 |
13,987 |
13,975 |
|||||||||||||
Diluted |
14,254 |
13,975 |
14,321 |
13,975 |
|||||||||||||
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CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS |
||||
(Unaudited) |
||||
For the Nine Months Ended |
||||
2021 |
2020 |
|||
(In thousands) |
||||
Cash flows from operating activities: |
||||
Net income/(loss) |
|
|
||
Adjustments to reconcile net income/(loss) to net cash provided |
||||
Depreciation and amortization |
15,112 |
17,931 |
||
Provision for losses on accounts receivable |
23 |
649 |
||
Deferred income taxes |
(780) |
— |
||
Stock-based compensation expense |
2,100 |
368 |
||
Changes in operating assets and liabilities: |
||||
Accounts receivable |
(20,991) |
(9,031) |
||
Inventories |
(13,691) |
(6,079) |
||
Accounts payable |
7,724 |
(1,000) |
||
Accrued liabilities |
11,020 |
2,505 |
||
Other |
(617) |
(510) |
||
Net cash provided by/(used in) operating activities |
17,057 |
(693) |
||
Cash flows from investing activities: |
||||
Payments to acquire patents and software |
(463) |
(216) |
||
Payments to acquire property and equipment |
(2,600) |
(1,275) |
||
Net cash used in investing activities |
(3,063) |
(1,491) |
||
Cash flows from financing activities: |
||||
Net transfers from former Parent |
31,706 |
2,022 |
||
Cash paid for debt issuance costs |
(410) |
— |
||
Payment of employee withholding tax related to restricted |
(14) |
— |
||
Net cash provided by financing activities |
31,282 |
2,022 |
||
Net increase/(decrease) in cash and cash equivalents |
45,276 |
(162) |
||
Cash and cash equivalents, beginning of period |
234 |
162 |
||
Cash and cash equivalents, end of period |
|
$ — |
||
Supplemental disclosure of cash flow information |
||||
Cash paid for: |
||||
Interest |
$ 61 |
$ — |
||
Income taxes |
$ 3,680 |
$ — |
||
|
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For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
$ |
% of |
$ |
% of |
$ |
% of |
$ |
% of |
||||||||
GAAP gross profit |
$ 37,373 |
45.2% |
$ 19,116 |
44.1% |
$ 98,176 |
46.3% |
$ 51,874 |
41.7% |
|||||||
Transition costs |
— |
0.0% |
— |
0.0% |
127 |
0.1% |
872 |
0.7% |
|||||||
Other |
— |
0.0% |
(180) |
-0.4% |
— |
0.0% |
(180) |
-0.1% |
|||||||
Non-GAAP gross profit |
$ 37,373 |
45.2% |
$ 18,936 |
43.7% |
$ 98,303 |
46.3% |
$ 52,566 |
42.3% |
|||||||
GAAP operating expenses |
$ 27,190 |
32.9% |
$ 20,941 |
48.3% |
$ 75,966 |
35.8% |
$ 62,391 |
50.2% |
|||||||
Amortization of acquired intangible assets |
(4,067) |
-4.9% |
(4,670) |
-10.8% |
(12,236) |
-5.8% |
(14,011) |
-11.3% |
|||||||
Stock compensation |
(904) |
-1.1% |
299 |
0.7% |
(2,100) |
-1.0% |
(368) |
-0.3% |
|||||||
Transition costs |
— |
0.0% |
35 |
0.1% |
(137) |
-0.1% |
(700) |
-0.6% |
|||||||
COVID-19 expenses |
— |
0.0% |
— |
0.0% |
(223) |
-0.1% |
— |
0.0% |
|||||||
Other |
— |
0.0% |
— |
0.0% |
(125) |
-0.1% |
— |
0.0% |
|||||||
Non-GAAP operating expenses |
$ 22,219 |
26.9% |
$ 16,605 |
38.3% |
$ 61,145 |
28.8% |
$ 47,312 |
38.1% |
|||||||
GAAP operating income/(loss) |
$ 10,183 |
12.3% |
$ (1,825) |
-4.2% |
$ 22,210 |
10.5% |
$ (10,517) |
-8.5% |
|||||||
Amortization of acquired intangible assets |
4,067 |
4.9% |
4,670 |
10.8% |
12,236 |
5.8% |
14,011 |
11.3% |
|||||||
Stock compensation |
904 |
1.1% |
(299) |
-0.7% |
2,100 |
1.0% |
368 |
0.3% |
|||||||
Transition costs |
— |
0.0% |
(35) |
-0.1% |
264 |
0.1% |
1,572 |
1.3% |
|||||||
COVID-19 expenses |
— |
0.0% |
— |
0.0% |
223 |
0.1% |
— |
0.0% |
|||||||
Other |
— |
0.0% |
(180) |
-0.4% |
125 |
0.1% |
(180) |
-0.1% |
|||||||
Non-GAAP operating income |
$ 15,154 |
18.3% |
$ 2,331 |
5.4% |
$ 37,158 |
17.5% |
$ 5,254 |
4.2% |
|||||||
GAAP net income/(loss) |
$ 8,029 |
9.7% |
$ (147) |
-0.3% |
$ 17,157 |
8.1% |
$ (5,526) |
-4.4% |
|||||||
Amortization of acquired intangible assets |
4,067 |
4.9% |
4,670 |
10.8% |
12,236 |
5.8% |
14,011 |
11.3% |
|||||||
Stock compensation |
904 |
1.1% |
(299) |
-0.7% |
2,100 |
1.0% |
368 |
0.3% |
|||||||
Transition costs |
— |
0.0% |
(35) |
-0.1% |
264 |
0.1% |
1,572 |
1.3% |
|||||||
COVID-19 expenses |
— |
0.0% |
— |
0.0% |
223 |
0.1% |
— |
0.0% |
|||||||
Related party interest income |
— |
0.0% |
(1,522) |
-3.5% |
(424) |
-0.2% |
(3,638) |
-2.9% |
|||||||
Other |
— |
0.0% |
(180) |
-0.4% |
125 |
0.1% |
(180) |
-0.1% |
|||||||
Tax effect of non-GAAP adjustments |
(1,242) |
-1.5% |
(711) |
-1.6% |
(3,631) |
-1.7% |
(3,276) |
-2.6% |
|||||||
Non-GAAP net income |
$ 11,758 |
14.2% |
$ 1,776 |
4.1% |
$ 28,050 |
13.2% |
$ 3,331 |
2.7% |
|||||||
GAAP net income/(loss) per share - diluted |
$ 0.56 |
$ (0.01) |
$ 1.20 |
$ (0.40) |
|||||||||||
Amortization of acquired intangible assets |
0.29 |
0.33 |
0.85 |
1.00 |
|||||||||||
Stock compensation |
0.06 |
(0.02) |
0.15 |
0.03 |
|||||||||||
Transition costs |
— |
— |
0.02 |
0.11 |
|||||||||||
COVID-19 expenses |
— |
— |
0.02 |
— |
|||||||||||
Related party interest income |
— |
(0.11) |
(0.03) |
(0.26) |
|||||||||||
Other |
— |
(0.01) |
0.01 |
(0.01) |
|||||||||||
Tax effect of non-GAAP adjustments |
(0.09) |
(0.05) |
(0.25) |
(0.23) |
|||||||||||
Non-GAAP net income per share - diluted |
$ 0.82 |
$ 0.13 |
$ 1.96 |
(a) |
$ 0.24 |
||||||||||
(a) Non-GAAP net income per share does not foot due to rounding. |
|
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RECONCILIATION OF GAAP NET INCOME/(LOSS) TO NON-GAAP ADJUSTED EBITDAS |
||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||
2021 |
2020 |
2021 |
2020 |
|||||
GAAP net income/(loss) |
$ |
8,029 |
$ (147) |
$ 17,157 |
$ (5,526) |
|||
Income tax expense/(benefit) |
2,244 |
(149) |
5,746 |
(1,353) |
||||
Depreciation and amortization |
4,642 |
5,773 |
15,112 |
17,931 |
||||
Related party interest income |
— |
(1,522) |
(424) |
(3,638) |
||||
Stock compensation |
904 |
(299) |
2,100 |
368 |
||||
Transition costs |
— |
(35) |
264 |
1,572 |
||||
COVID-19 costs |
— |
— |
223 |
— |
||||
Other |
— |
(180) |
125 |
(180) |
||||
Non-GAAP Adjusted EBITDAS |
$ |
15,819 |
$ 3,441 |
$ 40,303 |
$ 9,174 |
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