false000180899700018089972023-06-282023-06-28

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 28, 2023

 

 

American Outdoor Brands, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39366	84-4630928
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1800 North Route Z, Suite A
Columbia, Missouri				65202
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (800) 338-9585

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, Par Value $0.001 per Share		AOUT		The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

 

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Item 2.02 Results of Operations and Financial Condition.

On June 28, 2023, American Outdoor Brands, Inc. issued a press release reporting its financial results for the fiscal year ended April 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits.
Exhibit
Number			Description
99.1			Press release from the Registrant, dated June 28, 2023, reporting American Outdoor Brand, Inc.’s financial results for the fiscal year ended April 30, 2023.
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			AMERICAN OUTDOOR BRANDS, INC.
Date:	June 28, 2023	By:	/s/ H. Andrew Fulmer
			H. Andrew Fulmer Executive Vice President, Chief Financial Officer, and Treasurer

 

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	Exhibit 99.1
	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

Contact:

Liz Sharp, VP, Investor Relations

lsharp@aob.com

(573) 303-4620

American Outdoor Brands, Inc. Reports

Fourth Quarter and Full Fiscal 2023 Financial Results

COLUMBIA, Mo., June 28, 2023 – American Outdoor Brands, Inc. (NASDAQ Global Select: AOUT), an industry leading provider of products and accessories for rugged outdoor enthusiasts, today announced financial results for the fourth quarter and full year fiscal 2023 ended April 30, 2023.

Full Year Fiscal 2023 Financial Highlights

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

Fourth Quarter Fiscal 2023 Financial Highlights

Brian Murphy, President and Chief Executive Officer, said, “Fiscal 2023 marked our second full year as an independent public company dedicated to building authentic, lifestyle brands that help consumers make the most out of the moments that matter. I am proud of the achievements we made in fiscal 2023, especially given the uncertain macroeconomic environment that the year presented. On a three-year basis, we delivered net sales growth of more than 14% over our pre-pandemic levels, reflecting strength in our e-commerce channel, and driven primarily by growth of almost 34% in our outdoor lifestyle category, which consists of products related to hunting, fishing, camping, and rugged outdoor activities.”

“Innovation is our core strength and a key element in our long-term growth strategy. We believe our innovation machine is robust, and new products launched in the past two years generated over 25% of our full year net sales, which is consistent with prior years. Our Dock & Unlock™ process fuels that innovation, and we unveiled a host of new products across our brand portfolio during the year. Several of those products have won industry awards; many incorporate features that are ‘cross pollinated’ from across our brand lanes; most incorporate proprietary features; and all of them, taken together, advance our strategy to enter new product categories and expand our product lines and distribution channels. An example of this ‘cross pollination’ is our new BUBBA tournament-grade Pro Series Smart Fish Scale (SFS) and accompanying app, our first entry into the large, underserved, ‘catch and release’ market, and a product that, we believe, has the ability to reinvent the way anglers pursue their sport.”

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

“In fiscal 2023, we completed several strategic objectives, including the implementation of a new ERP system with the successful go-live of Microsoft D365; the establishment of a new analytics platform with the launch of Microsoft Power BI; the consolidation of our facilities in Oregon, Texas, and Michigan into our Missouri facility; and the finalization of a full lease takeover at our Missouri facility slated for January 2024, which will provide increased distribution capacity for long-term organic and inorganic growth. By maintaining a clear focus on our long-term objectives and making several meaningful strategic investments, we believe we have positioned our company well for the future.”

Andrew Fulmer, Chief Financial Officer, said, “In Fiscal 2023, we strengthened our balance sheet, generated significant operating cash flow, remained disciplined with cost control, invested in our long-term growth, and demonstrated effective capital deployment, all while navigating market challenges with consumer demand and cautious retailer inventory management. With robust operating cash flow in the year of $30.7 million, including an inventory reduction of $21.9 million, we paid down $20.0 million on our line of credit and repurchased over $3.5 million of our stock. We ended the year with a cash balance of $22.0 million and only $5.0 million outstanding on our line of credit, yielding a net negative debt position and up to $92.0 million in available capital.”

Turning to our outlook, we believe that our brands remain well positioned to capitalize on positive, long-term consumer outdoor participation trends. As a result, we believe that our net sales for fiscal 2024 could exceed fiscal 2023 net sales by as much as 3.5%. We also believe our solid financial position enables us to continue executing on our long-term strategic plan as we invest in our business, return capital to stockholders, and address the exciting growth opportunities we have identified for our company,” concluded Fulmer.

Conference Call and Webcast

The Company will host a conference call and webcast today, June 28, 2023, to discuss its fourth quarter and full year fiscal 2023 financial and operational results. Speakers on the conference call will include Brian Murphy, President and Chief Executive Officer, and Andrew Fulmer, Chief Financial Officer. The conference call may include forward-looking statements and a discussion of non-GAAP financial measures. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Those interested in listening to the conference call via telephone may call directly at (833) 630-1956 and ask to join the American Outdoor Brands call. No RSVP is necessary. The conference call audio webcast can also be accessed live on the Company's website at www.aob.com, under the Investor Relations section.

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, certain non-GAAP financial measures, including “non-GAAP net income and “Adjusted EBITDAS” are presented. A reconciliation of these and other non-GAAP financial measures are contained at the end 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) goodwill impairment, (iii) stock compensation, (iv) facility consolidation costs, (v) technology implementation, (vi) acquisition costs, (vii) stockholder cooperation agreement costs, (viii) fair value inventory step-up, (ix) amortization of acquired intangible assets, (x) income tax adjustments, (xi) interest expense, (xii) income tax benefit/expense, and (xiii) depreciation and amortization; 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 American Outdoor Brands, Inc.

American Outdoor Brands, Inc. (NASDAQ Global Select: AOUT) is an industry leading provider of outdoor products and accessories, including hunting, fishing, camping, shooting, outdoor cooking, and personal security and defense products, for rugged outdoor enthusiasts. The Company produces innovative, top quality products under its brands BOG®; BUBBA®; Caldwell®; Crimson Trace®; Frankford Arsenal®; Grilla Grills®; Hooyman®; Imperial®; LaserLyte®; Lockdown®; MEAT!; Old Timer®; Schrade®; Tipton®; Uncle Henry®; ust®; and Wheeler®. For more information about all the brands and products from American Outdoor Brands, Inc., visit www.aob.com.

 

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

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 innovation is our core strength and the key element in our long-term growth strategy; our belief that our innovation machine is robust; our belief that our Dock & Unlock process fuels our innovation; our strategy to enter new product categories and expand our product lines and distribution channels; our belief that the Pro Series Smart Fish Scale has the ability to reinvent the way anglers pursue their sport; our belief that the full lease takeover at our Missouri headquarter will provide capacity for long-term organic and inorganic growth; our belief that by maintaining a clear focus on our long-term objectives and making several meaningful strategic investments, we have positioned our company well for the future; our belief that our brands remain well-positioned to capitalize on positive, long-term consumer outdoor participation trends; our belief that our net sales for fiscal 2024 could exceed pre-pandemic fiscal 2020 net sales by as much as 20%; and our belief that our solid financial position enables us to continue executing on our long-term strategic plan as we invest in our business, return capital to stockholders, and address the exciting growth opportunities we have identified for our company. 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, 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 encountered by retailers and other components of the distribution channel for our products; economic, social, political, legislative, and regulatory factors; lawsuits and their effect on us; inventory levels, both internally and in the distribution channel, in excess of demand; natural disasters, pandemics, seasonality, news events, political events, and consumer tastes; future investments for capital expenditures; future products and product development; the features, quality, and performance of our products; the success of our strategies and marketing programs; our market share and factors that affect our market share; liquidity and anticipated cash needs and availability; the supply, availability, and costs of materials and components and related tariffs; our ability to maintain and enhance brand recognition and reputation; risks associated with the distribution of our products and overall availability of labor; and, other factors detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2023.

 

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	As of:
	April 30, 2023				April 30, 2022
	(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents	$	21,950			$	19,521
Accounts receivable, net of allowance for credit losses of $125    on April 30, 2023 and $129 on April 30, 2022		26,846				28,879
Inventories		99,734				121,683
Prepaid expenses and other current assets		7,839				8,491
Income tax receivable		1,251				1,231
Total current assets		157,620				179,805
Property, plant, and equipment, net		9,488				10,621
Intangible assets, net		52,021				63,194
Right-of-use assets		24,198				23,884
Other assets		260				336
Total assets	$	243,587			$	277,840
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	11,544			$	13,563
Accrued expenses		8,741				7,853
Accrued payroll, incentives, and profit sharing		1,813				3,786
Lease liabilities, current		904				1,803
Total current liabilities		23,002				27,005
Notes and loans payable		4,623				24,697
Lease liabilities, net of current portion		24,064				23,076
Other non-current liabilities		34				31
Total liabilities		51,723				74,809
Equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no    shares issued or outstanding		—				—
Common stock, $0.001 par value, 100,000,000 shares authorized,    14,447,149 shares issued and 13,233,151 shares outstanding on    April 30, 2023 and 14,240,290 shares issued and 13,403,326    outstanding on April 30, 2022		14				14
Additional paid in capital		272,784				268,393
Retained deficit		(62,375	)			(50,351	)
Treasury stock, at cost (1,213,998 shares on April 30, 2023    and 836,964 shares on April 30, 2022)		(18,559	)			(15,025	)
Total equity		191,864				203,031
Total liabilities and equity	$	243,587			$	277,840

 

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

 

AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
		For the Three Months Ended April 30,								For the Years Ended April 30,
		2023				2022				2023				2022
		(Unaudited)
Net sales		$	42,203			$	45,893			$	191,209			$	247,526
Cost of sales			23,129				25,769				103,145				133,287
Gross profit			19,074				20,124				88,064				114,239
Operating expenses:
Research and development			1,474				1,147				6,361				5,501
Selling, marketing, and distribution			11,565				11,677				51,791				56,168
General and administrative			10,038				10,224				42,612				41,244
Goodwill impairment			—				67,849				—				67,849
Total operating expenses			23,077				90,897				100,764				170,762
Operating loss			(4,003	)			(70,773	)			(12,700	)			(56,523	)
Other income, net:
Other income, net			136				306				1,188				1,311
Interest expense, net			(120	)			(157	)			(761	)			(324	)
Total other income, net			16				149				427				987
Loss from operations before income taxes			(3,987	)			(70,624	)			(12,273	)			(55,536	)
Income tax (benefit)/expense			(151	)			6,062				(249	)			9,344
Net loss		$	(3,836	)		$	(76,686	)		$	(12,024	)		$	(64,880	)
Net loss per share:
Basic		$	(0.29	)		$	(5.71	)		$	(0.90	)		$	(4.66	)
Diluted		$	(0.29	)		$	(5.71	)		$	(0.90	)		$	(4.66	)
Weighted average number of common shares outstanding:
Basic			13,240				13,433				13,372				13,930
Diluted			13,240				13,433				13,372				13,930

 

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Years Ended April 30,
	2023				2022
	(In thousands)
Cash flows from operating activities:
Net loss	$	(12,024	)		$	(64,880	)
Adjustments to reconcile net income to net cash provided by/    (used in) operating activities:
Depreciation and amortization		16,511				16,967
Loss on sale/disposition of assets		94				161
(Benefit from)/provision for credit losses on accounts receivable		(11	)			17
Goodwill impairment		—				67,849
Deferred income taxes		—				6,683
Stock-based compensation expense		4,050				2,812
Changes in operating assets and liabilities:
Accounts receivable		2,044				8,591
Inventories		21,949				(41,431	)
Accounts payable		(1,308	)			(4,521	)
Accrued liabilities		(1,085	)			(7,061	)
Other		486				(3,140	)
Net cash provided by/(used in) operating activities		30,706				(17,953	)
Cash flows from investing activities:
Acquisition of business		—				(27,000	)
Payments to acquire patents and software		(3,555	)			(3,191	)
Proceeds from sale of property and equipment		30				—
Payments to acquire property and equipment		(1,301	)			(3,397	)
Net cash used in investing activities		(4,826	)			(33,588	)
Cash flows from financing activities:
Proceeds from loans and notes payable		—				25,170
Payments on notes and loans payable		(20,170	)			—
Payments to acquire treasury stock		(3,534	)			(15,025	)
Cash paid for debt issuance costs		(88	)			(103	)
Proceeds from exercise of options to acquire common stock,    including employee stock purchase plan		656				875
Payment of employee withholding tax related to restricted stock units		(315	)			(656	)
Net cash (used in)/provided by financing activities		(23,451	)			10,261
Net increase/(decrease) in cash and cash equivalents		2,429				(41,280	)
Cash and cash equivalents, beginning of period		19,521				60,801
Cash and cash equivalents, end of period	$	21,950			$	19,521
Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	761			$	125
Income taxes (net of refunds)	$	(73	)		$	3,819

 

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) (Unaudited)
	For the Three Months Ended April 30,								For the Years Ended April 30,
	2023				2022				2023				2022
GAAP gross profit	$	19,074			$	20,124			$	88,064			$	114,239
Facility consolidation costs		—				—				356				—
Fair value inventory step-up		—				27				—				27
Non-GAAP gross profit	$	19,074			$	20,151			$	88,420			$	114,266
GAAP operating expenses	$	23,077			$	90,897			$	100,764			$	170,762
Amortization of acquired intangible assets		(3,074	)			(3,473	)			(12,298	)			(13,757	)
Goodwill impairment		—				(67,849	)			—				(67,849	)
Stock compensation		(1,150	)			(476	)			(4,050	)			(2,812	)
Facility consolidation costs		(26	)			—				(510	)			—
Technology implementation		(553	)			(329	)			(2,138	)			(1,948	)
Acquisition costs		—				(599	)			(47	)			(599	)
Stockholder cooperation agreement costs		—				—				(1,177	)			—
Other		—				—				—				(40	)
Non-GAAP operating expenses	$	18,274			$	18,171			$	80,544			$	83,757
GAAP operating loss	$	(4,003	)		$	(70,773	)		$	(12,700	)		$	(56,523	)
Fair value inventory step-up		—				27				—				27
Amortization of acquired intangible assets		3,074				3,473				12,298				13,757
Goodwill impairment		—				67,849				—				67,849
Stock compensation		1,150				476				4,050				2,812
Facility consolidation costs		26				—				866				—
Technology implementation		553				329				2,138				1,948
Acquisition costs		—				599				47				599
Stockholder cooperation agreement costs		—				—				1,177				—
Other		—				—				—				40
Non-GAAP operating income	$	800			$	1,980			$	7,876			$	30,509
GAAP net loss	$	(3,836	)		$	(76,686	)		$	(12,024	)		$	(64,880	)
Fair value inventory step-up		-				27				-				27
Amortization of acquired intangible assets		3,074				3,473				12,298				13,757
Goodwill impairment		-				67,849				-				67,849
Stock compensation		1,150				476				4,050				2,812
Facility consolidation costs		26				—				866				—
Technology implementation		553				329				2,138				1,948
Acquisition costs		-				599				47				599
Stockholder cooperation agreement costs		-				—				1,177				—
Other		-				—				-				40
Income tax adjustments		(174	)			5,805				(1,993	)			2,520
Non-GAAP net income	$	793			$	1,872			$	6,559			$	24,672
GAAP net loss per share - diluted	$	(0.29	)		$	(5.71	)		$	(0.90	)		$	(4.66	)
Fair value inventory step-up		—				—				—				—
Amortization of acquired intangible assets		0.23				0.26				0.92				0.99
Goodwill impairment		—				5.05				—				4.87
Stock compensation		0.09				0.04				0.30				0.20
Facility consolidation costs		—				—				0.06				—
Technology implementation		0.04				0.02				0.16				0.14
Acquisition costs		—				0.04				—				0.04
Stockholder cooperation agreement costs		—				—				0.09				—
Other		—				—				—				—
Income tax adjustments		(0.01	)			0.43				(0.15	)			0.18
Non-GAAP net income per share - diluted	$	0.06			$	0.14		(a)	$	0.48			$	1.77		(a)
(a) Non-GAAP net income per share does not foot due to rounding.

 

 

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	1800 N Route Z, Suite A
	Columbia, MO 65202
	(800) 338-9585
	NASDAQ: AOUT

 

 

 

 

 

AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDAS (In thousands) (Unaudited)
	For the Three Months Ended April 30,										For the Years Ended April 30,
		2023				2022					2023					2022
GAAP net loss	$		(3,836	)		$		(76,686	)		$		(12,024	)		$		(64,880	)
Interest expense			120					157					761					324
Income tax (benefit)/expense			(151	)				6,062					(249	)				9,344
Depreciation and amortization			3,933					4,417					16,048					16,967
Stock compensation			1,150					476					4,050					2,812
Goodwill impairment			—					67,849					—					67,849
Technology implementation			553					329					2,138					1,948
Fair value inventory step-up			—					27					—					27
Acquisition costs			—					599					47					599
Facility consolidation costs			26					—					866					—
Stockholder cooperation agreement costs			—					—					1,177					—
Other			—					—					—					40
Non-GAAP Adjusted EBITDAS	$		1,795			$		3,230				$	12,814				$	35,030

 

 

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