UNITED STATES
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FORM
CURRENT REPORT
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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:
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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.
Item 7.01 Regulation FD Disclosure.
We are furnishing this Current Report on Form 8-K in connection with the disclosure of information, in the form of the textual information from a PowerPoint presentation to be given at meetings with investors and analysts. This information may be amended or updated at any time and from time to time through another Form 8-K, a later company filing, or other means.
The information in this Current Report on Form 8-K (including the exhibit) is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information in the Report that is required to be disclosed solely by Regulation FD.
We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.
The text included with this Report on Form 8-K is available on our website located at www.aob.com, although we reserve the right to discontinue that availability at any time.
Item 9.01 Financial Statements and Exhibits.
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104 |
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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.
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AMERICAN OUTDOOR BRANDS, INC. |
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June 28, 2023 |
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/s/ H. Andrew Fulmer |
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H. Andrew Fulmer |
NASDAQ: AOUT INVESTOR PRESENTATION June 2023 Exhibit 99.1 AMERICAN OUTDOOR BRANDS
Certain statements contained in this presentation 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 presentation, 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,” “suggests,” “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, potential disruptions in our suppliers’ ability to source the raw 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 including delivery of product stemming from port congestion and related transportation challenges; lower levels of consumer spending in general and specific to our products or product categories; our ability to introduce new products that are successful in the marketplace; interruptions of our arrangements with third-party contract manufacturers and freight carriers that disrupt our ability to fill our customers’ orders; increases in costs or decreases in availability of finished products, components, and raw materials; our ability to maintain or strengthen our brand recognition and reputation; the ability to forecast demand for our products accurately; our ability to continue to expand our e-commerce business; our ability to compete in a highly competitive market; our dependence on large customers; our ability to attract and retain talent; an increase of emphasis on private label products by our customers; pricing pressures by our customers; our ability to collect our accounts receivable; the potential for product recalls, product liability, and other claims or lawsuits against us; our ability to protect our intellectual property; inventory levels, both internally and in the distribution channel, in excess of demand; our ability to identify acquisition candidates, to complete acquisitions of potential acquisition candidates, to integrate acquired businesses with our business, to achieve success with acquired companies, and to realize the benefits of acquisitions in a manner consistent with our expectations; the performance and security of our information systems; our ability to comply with any applicable foreign laws or regulations and the effect of increased protective tariffs; economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearms-related products; the effect of political pressures on firearm laws and regulations; the potential impact on our business and operations from the results of federal, state, and local elections and the policies that may be implemented as a result thereof; our ability to realize the anticipated benefits of being a separate, public company; future investments for capital expenditures, liquidity and anticipated cash needs and availability; the potential for impairment charges; estimated amortization expense of intangible assets for future periods; actions of social or economic activists that could, directly or indirectly, have an adverse effect on our business; disruptions caused by social unrest, including related protests or disturbances; our assessment of factors relating to the valuation of assets acquired and liabilities assumed in acquisitions, the timing for such evaluations, and the potential adjustment in such evaluations; 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. LEGAL SAFE HARBOR American Outdoor Brands (NASDAQ: AOUT)
American outdoor brands, Inc. at a glance AOB, Ready for the Future. FY23 Net Sales $191.2 million Net Sales Target $400M FY23 Gross Profit Margin 46.1% Target Adj. EBITDAS Margin % Mid- to High-teens FY23 Adjusted EBITDAS $12.8 million, or 6.7% Headquarters Columbia, Missouri Cash Balance $22 million Fiscal Year End April 30 Line of Credit $5 million outstanding Employee Count 302 HQ & Distribution: Columbia, MO Additional Offices: MA (Admin), Asia (WFOE) Spinoff from Former Parent Company: August 2020 NASDAQ Global Select: AOUT All metrics as of fiscal year end April 30, 2023
Our Brands & Products at a Glance 21 2 D&U We create innovative products, underneath 21 diverse brand names, for consumers who are passionate about the outdoors and shooting sports. 387 Our brands operate across two (2) major product categories: Outdoor Lifestyle: fishing, camping, land management, meat processing, outdoor cooking Shooting Sports: shotgun sports, reloading, optics, hand tools, security solutions (we do not manufacture or sell firearms) Brands Categories Patents Value Creation Our innovative “Dock & Unlock”™ formula fuels brand growth. We have a proven track record of creating new brands, growing existing brands, and efficiently integrating acquired brands to expand our reach into new markets. We have a tremendous pipeline of disruptive new products, backed by an accelerating portfolio of patents. In the past two years, alone, our IP portfolio has swelled by ~30% to 387 patents – filed or active – with more on the way. This moat helps protect our future revenue and profitability. 54% 46% (1) AOB, Ready for the Future. (2) (2) (1) In addition to our 17 owned brands, we also license the Smith & Wesson®, M&P®, Thompson/Center Arms™, and Performance Center® brands from Smith & Wesson. (2) Percent of FY23 Net Sales ended April 30, 2023.
“Building authentic, lifestyle brands that help consumers make the most out of the moments that matter.” AMERICAN OUTDOOR BRANDS
Ready for the Future. 1. Engine: Capable of growing net sales ~2x to $400M and EBITDAS 5x to $70M+ over the next 4-5 years. 2. Chassis: Infrastructure complete. No new investments needed. 3. Driver: The right people and culture to win. (…fueled by a strong cash position, with cash flow upside) Interested in taking a spin? AOB, Ready for the Future.
Path to $400M in Net Sales: The Road Ahead AOB, Ready for the Future. We believe AOB is capable of generating $400M in net sales over the next 4-5 years This potential is based upon elements within our control: our innovation pipeline, identified expansion opportunities, and infrastructure in-place. While we’re optimistic our business is capable of achieving this growth target, we are mindful there are several elements outside of our control that could impact timing, such as: consumer demand and spending patterns; health of retailers; geopolitical changes; and changes in legislation. $400M $70M+ NET SALES EBITDAS (1) (1) Please refer to our SEC filings for additional risk factors. +3.5% +6.5% FY24 Outlook: June 2023 Net Sales growth of up to Adj. EBITDAS growth of up to
Fiscal 2023 Highlights AMERICAN OUTDOOR BRANDS
Fiscal 2023 highlights +14.2% +60.6% 46.1% Net sales declined 22.8% YOY but grew 14.2% vs. pre-pandemic FY20. Outdoor Lifestyle category grew 33.8% vs. FY20 and represents nearly 54% of net sales in FY23. Shooting Sports category declined 2.2% vs. FY20. $30.7M E-commerce net sales declined 10.5% YOY but grew 60.6% vs. FY20. Direct-to-consumer net sales grew 76% YOY and included the acquisition of Grilla Grills. Brands sold exclusively direct-to-consumer comprised nearly 13% of FY23 net sales. Net Sales vs. FY20 E-commerce vs. FY20 Operating Gross Margin Gross margins remained strong in FY23 despite the YOY sales decline, and grew by +370 bps vs. FY20. Operating cash flow remained strong in FY23 at $30.7M. Since our spinoff in Aug 2020, we have generated $45.5M in operating cash. Fiscal 2023 Highlights 2.8% O/S Shares Under our current share buyback plan, which ends Sept. 2023, we have purchased 2.8% of our outstanding shares at average price of $9.34 (as of 4/30). PLUS: Key Investments We implemented our new ERP system, Microsoft D365; consolidated two facilities into our Missouri location; and secured additional distribution capacity. Completed Cash Flow Repurchased
Outdoor lifestyle category leading growth Net Sales vs Pre-Pandemic Shooting Sports Net Sales FY23 vs FY22: -30.7% FY23 vs FY20 (pre-pandemic): -2.2% Expansion in domestic and international markets Growth opportunity focused on expanding into large, stable categories including: Shotgun Sports (Caldwell) Shooting Accessories (Wheeler, Frankford Arsenal) Outdoor Lifestyle Net Sales FY23 vs FY22: -14.3% FY23 vs FY20 (pre-pandemic): +33.8% Expected to be a growing percentage of business over time Expansion in domestic and international markets Growth opportunity supported by: Fishing (BUBBA) Land Management (Hooyman) Hunting & Outdoor (BOG, Schrade) Food Prep & Cooking (MEAT! Your Maker, Grilla) Fiscal 2023 Highlights Shooting Sports 46.5% Outdoor Lifestyle 53.5% Shooting Sports 54.3% Outdoor Lifestyle 45.7% Outdoor Lifestyle Shooting Sports Mix Shift Toward Outdoor Lifestyle FY20 Net Sales FY23 Net Sales +33.8% -2.2%
net sales & Gross Margin 65% Growth 48% Growth 14% Growth Fiscal 2023 Highlights Leverageable financial model as business scales Long-term growth driven by leveraging brand lane platforms "Dock & Unlock”TM strategy allows for expansion into new product categories providing AOUT’s young brands with significant runway for growth Long-term gross margins supported by new product launches, stabilized from tariff impacts Q4 FY23 – Net sales -2% vs. Q4 FY20 (pre-pandemic) FY23 Net sales + 14.2% vs. FY20 (pre-pandemic) Leverage of fixed G&A costs, brand lanes and e-commerce investments expected to yield significant EBITDAS contribution as the business scales Long-term Adj. EBITDAS target margin – mid to high teens FY23 – Consolidated Crimson Trace and Grilla operations providing annualized net cost savings of ~$1.5M FY23 includes full public company and IT costs vs. FY20, which reflects allocated costs from our former parent company Q4 Update 7.9% Q4 Update Adj. EBITDAS & adj. ebitdas Margin Note: US$ in millions. Fiscal year ended April 30. Adjusted EBITDAS is defined as GAAP net income/(loss) before interest, taxes, depreciation, amortization, goodwill impairment, and stock compensation expense and excludes certain items we consider non-routine. See slide 45 for a reconciliation of Adjusted EBITDAS. Financials for FY2022 include activity for the period subsequent to the acquisition of Grilla Grills. 285% Growth 4% Growth 185% Growth
balance sheet As of APRIL 30, 2023 Fiscal 2023 Highlights Strong balance sheet supports organic growth & acquisitions FY23 : operating cash flow $30.7M, free cash flow* $25.9M Significant liquidity (up to ~$92M available capital) $75M asset-based revolving credit facility, expandable by $15M Net cash of $17M ($22M cash less $5M bank debt) Dry powder available for strategic acquisitions IDEAL ACQUISITION CRITERIA “Dock & Unlock”TM Friendly via Brand Lane Structure “Niche to Known”TM Opportunity (Runway for Growth) Large, Addressable Markets Low Complexity Further Diversifies Supply Chain * Free cash flow defined as cash flow from operations less capital expenditures BALANCE SHEET AS OF APRIL 30, 2023 Assets ($M) Cash $22.0 Other Current Assets 135.7 Intangibles 52.0 PP&E 9.5 Other Assets 24.4 Total Assets $243.6 Liabilities & Equity ($M) Current Liabilities $23.0 Bank Debt 5.0 Other Liabilities 23.7 Total Liabilities $51.7 Stockholders' Equity $191.9 Total Liabilities & Equity $243.6
Compelling investment considerations 1. Business capable of growing net sales ~2x to $400M and 5x EBITDAS of $70M+ over the next 4-5 years. Innovation engine, built. Leverageable Brand Lane teams in place. Customer & channel opportunities ripe for harvesting. 2. Infrastructure in place. No new investments needed. Infrastructure investments complete, ready to scale. 3. The right people and culture to win. 4. Strong cash position, with cash flow upside. Simple, leverageable model that is highly profitable with growth. Note: While we have many brands that demonstrate how “Dock & Unlock” delivers growth, today’s presentation will largely draw upon BUBBA as an example, specifically, our recent launch of the Pro Series Smart Fish Scale. AOB, Ready for the Future.
Product Development Innovation engine, built.
Innovation Engine, Built. Pipeline built to deliver ~$200M in incremental sales Provides 3-5 years of new product upside Focused on large, sleepy markets, ripe for disruption Talent in place, capable of executing product pipeline 40+ product designers, engineers, and software developers Capable of developing 200+ new products, annually Investments in equipment that accelerate time to market 5 state-of-the-art product development labs Vertically integrated with new 3D printers, CNC machines, test lab Best-in-class Quality team Continues legacy of delivering trustworthy product Protects higher ASP strategy, supported by intellectual property Product Development: Innovation Engine, Built Accelerating Patent Portfolio Supports Incoming Wave of Innovation and Growth 3D Print Lab CNC Machine Lab
Large, attractive market, where AOB has “permission to play?” Fishing is a huge market (~50M U.S. participants) Freshwater is the largest segment with ~40M anglers, approximately 40% more participants than Golf How do we gain access to Freshwater? Electric Fillet Knife became available in 2019 A meaningful share of Freshwater fishing is “Catch & Release” instead of “Catch & Eat”… Freshwater tools introduced in 2020 Where can we leverage our innovation engine to disrupt large, high visibility “Catch & Release” categories ignored by others? BUBBA Case Study: “Dock & Unlock” Drives Innovation Source: American Sportfishing Association; National Golf Foundation, and management estimates. “Catch & Release” categories ripe for innovation? Saltwater Fishing: ~10M Participants Freshwater Fishing: ~40M Participants “Dock” “Unlock” Potential Innovation Engine, Built.
Fish Weight Scales: Not easy to hold Not high quality Not smart (little to no data capture, retention or analysis) “What else could these be used for?” “How do we get one on every fishing boat?” BUBBA Case Study: “Dock & Unlock” Drives Innovation ~30M anglers in the U.S. target bass species for sport, and commonly use fish weight scales to measure success… “Can a fish scale contribute to sustainability?” Source: iOutdoors. Innovation Engine, Built.
BUBBA Case Study: “Dock & Unlock” Drives Innovation Opportunity: Large, underserved market Category lacks innovation AOB has “Permission to Play” Team in place to execute: Mechanical engineering Industrial design Electrical engineering Software engineering App development Tournament-Grade Pro Series Smart Fish Scale Result: Easy to hold High Quality Smart Innovation Engine, Built.
BUBBA Case Study: “Dock & Unlock” Drives Innovation Compete in Tournaments with Other Anglers Connect with Other Anglers and Share Catches and Trips Log Your Catches with Detailed Information Document and Save Your Entire Day of Fishing with Trips What does “Smart” look like… The BUBBA Pro Series Smart Fish Scale is the First of its Kind to “Gamify” Fishing to Create Better Anglers Innovation Engine, Built.
BUBBA Case Study: “Dock & Unlock” Drives Innovation With BUBBA, “Smart” also means “Sustainable”… Tournament with Traditional Fish Weight Scales vs. Catch Weigh Live Well Dock Weigh-in Release Extended “out-of-the-water” time and transport can often lead to higher levels of fish mortality Catch Weigh Live Well Dock Release Reduces “out-of-the-water” time, supporting conservation and promoting sustainability Innovation Engine, Built.
Marketing Leverageable Brand Lane teams in place.
Brand Lane Teams, In Place. Marketing: leverageable brand lane Teams Adventurer Brand Lane Harvester Brand Lane Marksman Brand Lane Defender Brand Lane Product Development (highlighted earlier) “Brand Lane” teams are in place, focused on key consumer activities: Drives brand authenticity Connects products + consumers’ lifestyles Breeds consistent messaging & speed-to-market Advertising Partnerships Social Media Influencers Packaging Content Captures Graphics Support In-Store Online Retailers Owned Websites Brand Management Creative Merchandising (1) Adventurer brand lane highlighted as an example. All four brand lanes have product development, brand management, creative, and merchandising teams. (1) Adventurer Brand Lane
Bubba Case Study: Leveraging the Brand Lanes Adventurer Brand Lane Team Brand Management Creative Merchandising Brand Lane Teams, In Place.
Go-To-Market Customer & channel opportunities ripe for harvesting.
Opportunities, Ripe for Harvesting. Go-To-Market: Multiple Expansion Opportunities We believe AOB is capable of $400M in net sales, organically; we expect our business to shift as a result: Outdoor Lifestyle transitions towards ~65% of net sales (from 54% today) Doubling of international sales to 10% of net sales (from 5% today) Even split between Traditional and e-Commerce as we expand into new customer channels Net Sales by Product Category Net Sales by Geography Net Sales by Channel ~$158M ~$51M $167M $191M $400M 54% 46% 46% 54% 35% 65% $167M $191M $400M 96% 4% 95% 5% 90% 10% ~$31M ~$178M $167M $191M $400M 32% 68% 46% 54% 50% 50% ~$96M ~$113M (1) Amounts are illustrative examples of breakouts based on current management expectations. (1) (1) (1) (1) (1) (1)
Shotgun Sports Fishing Land Management Hunting & Outdoor Food Prep & Cooking Shooting Accessories Retail Support Programs Dedicated Sales Support, Tightened Distribution Network Shooting Sports Outdoor Lifestyle Go-To-Market: Domestic & International Expansion Expanded Sales Staff & Rep Force Dedicated Sales Channel Resources Farm & Home, DIY DTC Websites and e-Commerce Support Canadian Expansion New Distribution Partnerships 90% ($360M) 10% ($40M) +$178M +$31M Domestic International 95% ($182M) 5% ($9M) FY23 Net Sales = $191M @$400M +$209M FY23 = $89M @ $400M = $140M FY23 = $102M @ $400M = $260M Canadian Expansion Canada, EU, Australia/NZ We plan to support Outdoor Lifestyle growth with investments made at home and abroad. Opportunities, Ripe for Harvesting. (1) (1) (1) Amounts are illustrative examples of breakouts based on current management expectations.
Go-To-Market: Traditional & e-Commerce Expansion Emphasis on POS and Program Support Digital Merchandising, Educational Assets, Launch Support Expanded Sales Staff & Rep Force Dedicated Sales Staff in FY23 Farm & Home, DIY Retail Expansion DTC Websites and e-Commerce Support, Digital Merchandising Support, Educational Assets, Launch Support 50% ($200M) 50% ($200M) +$96M +$113M Traditional e-Comm 54% ($104M) 46% ($87M) Shotgun Sports Fishing Land Management Hunting & Outdoor Food Prep & Cooking Shooting Accessories Shooting Sports Outdoor Lifestyle @$400M +$209M FY23 = $89M @ $400M = $140M FY23 = $102M @ $400M = $260M We plan to propel our growth with a strategic combination of Retail and e-Comm. FY23 Net Sales = $191M Dedicated Sales Channel Resources Opportunities, Ripe for Harvesting. (1) (1) (1) Amounts are illustrative examples of breakouts based on current management expectations.
BUBBA Case Study: Maximizing Strategic Adoption Tournament-Grade Pro Series Smart Fish Scale Traditional Channel e-Commerce Channel Online Retailers DTC BUBBA.com App Monetization Pro Subscription: $4.99 / Month or $49.99 / Year Sporting Goods Dealers OEM + Partnerships Strategic placement ensures pricing integrity and maximizes pull-through Opportunities, Ripe for Harvesting. Coming soon…
BUBBA Case Study: Illustrative Recurring Revenue Opportunity ~30M Bass Anglers in U.S. Assuming 1% of bass anglers purchase a BUBBA Pro Series Smart Fish Scale… ~300,000 Anglers …and 50% subscribe to BUBBA’s annual Pro Subscription @$49.99/yr ~150,000 Anglers $7.5M in illustrative “recurring” revenue 1% % of Bass Anglers (30M) % Subscribed to BUBBA’s Pro Subscription ($ in millions) Illustrative App Recurring Revenue Model (1) Source: iOutdoors (2) Illustrative example to demonstrate potential scalability of paid app. Figures are gross of any related fees. Pro Subscription introduced in April 2023. Opportunities, Ripe for Harvesting. (1) (2) (2)
Infrastructure Investments complete, ready to scale.
Investments Complete, Ready to Scale. Infrastructure: complete & ready for Expansion New HQ and Distribution Center (2019) 632k SF provides capacity for organic growth and acquisitions New Consumer-Focused Brand Lanes (2020) Finished build-out of leverageable Brand Lane teams New Public Company Infrastructure (2020) Spin created new Finance, IT, Legal, HR, Operations, and IR functions New DTC Platform (2021) Completed 17 dedicated brand websites on Salesforce platform New ERP System (2023) Completed transition to Microsoft D365 in February 2023 New Analytics Platform (2023) Microsoft Power BI platform launched, Analytics team in place AOB’s former parent company currently occupies 250k SF, which will be assumed by AOB in January 2024, bringing total area to 632k SF.
Infrastructure: Consolidations into New Facility, Complete Investments Complete, Ready to Scale.
People & Culture The right people & culture to win.
Our Culture: A Competitive Advantage How Others View AOB’s Culture “Innovation” (Top 10 Customer) “Visionary” (Industry Investment Banker) “Entrepreneurial” (Top 10 Customer) “Dedicated” (Top 10 Customer) “Entrepreneurial” (Large AOB Competitor) Values Drive Our Culture The Right People & Culture To Win.
Strong Financial Model Strong balance sheet, leverageable growth model, with favorable cash flow upside.
Strong Financial Model, In Place. Business Model: Core Competencies Drive Simplicity Innovation (Core Competency) Asset Light (Outsourced Manufacturing, Low Capex) Simple, Leverageable Model (One ERP, lean organization)
New HQ and Distribution Center New Consumer-Focused Brand Lanes New Public Company Infrastructure New DTC Platform New ERP System New Analytics Platform Financial Model: increased operating leverage with Growth We expect EBITDAS contribution of 25% - 35% on incremental net sales as we grow organically on the path to $400M in net sales, yielding total EBITDAS margins in the mid-to-high teens. Net Sales Adj EBITDAS Illustrative Example FY23 Path to $400M Net Sales SIGNIFICANT EBITDAS CONTRIBUTION ON PATH TO $400M Strong Financial Model, In Place. Our Significant Investments are Behind Us $191M $300M $400M $13M $40M $70M 6.7% 13.3% 17.5%
Financial metrics: w/C upside & negative net debt Strong Financial Model, In Place. (1) Working Capital Turns calculation: TTM net sales/(Accts Receivable + Inventory – Accts Payable) (2) Represents historical working capital turns, excluding pandemic-related impacts Net Debt Leverage Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 (3) Net Debt Leverage calculation: (Bank debt outstanding – cash on hand)/TTM Adjusted EBITDAS Normalized W/C Target: 2.0x+ WORKING CAPITAL TURNS NET DEBT LEVERAGE (1) (2) (3) Q4 FY22
Capital Allocation: Demonstrated Deployment Strong Financial Model, In Place. ORGANIC GROWTH Our highest priority is to invest in our business: Drives organic net sales to $400M Delivers sustainable profitability Yields strong returns and free cash flow 1 RETURN CAPITAL TO SHAREHOLDERS We will continually assess opportunities to return capital to shareholders: Current share buyback plan in place through Sept 2023 Implementing opportunistic share buybacks as appropriate 3 FY23 net sales growth of 4.4x first year of creation Repurchased 2.8% O/S shares at avg. price of $9.34 through April ‘23 At the same time, we will seek out M&A opportunities to supplement organic growth: Applying strict criteria Finding brands to “Dock & Unlock” Maximizing ROIC M&A 2 Consolidation contributed towards $1.5M savings New products/categories set for launch in FY24
M&A Illustration: “Dock & Unlock” Drives incremental ebitda Target EBITDAS Contribution: 25%+ Net sales: Expanded products and customers Gross margin: Improved margins with AOUT supply chain Variable costs: Consolidated logistics into Columbia HQ Fixed Opex: Leveraged Adventurer brand lane In Process In Process Cost reductions through supply chain improvements, consolidating distribution into AOUT HQ, and leveraging brand lanes (1) Does not include incremental net sales from expanded products and customers (1) Tuck-in Range: $10M - $50M (Net Sales) A B C A+B+C ILLUSTRATIVE ACQUISITION TARGET: EBITDA Walk DEMONSTRATED RESULTS WITH “DOCK & UNLOCK” Strong Financial Model, In Place.
American Outdoor Brands (NASDAQ: AOUT) We’re Ready for the Future... Innovation engine, built. Leverageable Brand Lane teams in place. Customer & channel opportunities ripe for harvesting. Infrastructure investments complete, ready to scale. Strong balance sheet, leverageable growth model, favorable cash flow upside. The right people and culture to win.
Appendix
BRIAN MURPHY President & CEO Joined: 2016 ANDY FULMER Chief Financial Officer Joined: 2010 JAMES TAYON VP of Marketing & Product Development Joined: 2012 BRENT VULGAMOTT VP of Sales, Operations, and Analytics Joined: 2015 Introductions American outdoor brands: Senior Team LIZ SHARP VP of Investor Relations Joined: 2005 Previous Experience Previous Experience Previous Experience Previous Experience Previous Experience CONCEPT COMMUNICATIONS
American Outdoor Brands (NASDAQ: AOUT) In this presentation, 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. Non-GAAP Financial Measures
American Outdoor Brands (NASDAQ: AOUT) Q4 FY23 non-gaap adjusted ebitdas reconciliation 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, GAAP net loss Interest expense Income tax (benefit)/expense Depreciation and amortization Stock compensation Goodwill impairment Technology implementation Fair value inventory step-up Acquisition costs Facility consolidation costs Stockholder cooperation agreement costs Other Non-GAAP Adjusted EBITDAS 2023 2022 2023 2022 $ (3,836) 120 $ (76,686) $ (12,024) $ (64,880) 157 761 324 (151) 6,062 (249) 9,344 3,933 4,417 16,048 16,967 1,150 476 4,050 2,812 — 67,849 — 67,849 553 329 2,138 1,948 — 27 — 27 — 599 47 599 26 — 866 — — — 1,177 — — — — 40 4.3% 7.0% 6.7% 14.2% Adjusted EBITDAS Margi
Q4 FY23 gaap Income statement American Outdoor Brands (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 perating expenses: Research and development 1,474 1,147 6,361 5,501 expenses: 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)
Q4 FY23 non-GAAP income statement American Outdoor Brands (NASDAQ: AOUT) AMERICAN OUTDOOR BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Non-GAAP (In thousands, except per share data) (Unaudited) For the Three Months Ended April 30, For the Years Ended April 30, 2023 2022 2023 2022 Net sales $ 42,203 $ 45,893 $ 191,209 $ 247,526 Cost of sales 23,129 25,742 102,789 133,260 Gross profit 19,074 20,151 88,420 114,266 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 5,235 5,347 22,392 22,088 Total operating expenses 18,274 18,171 80,544 83,757 Operating income 800 1,980 7,876 30,509 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 Income from operations before income taxes 816 2,129 8,303 31,496 Income tax expense 23 257 1,744 6,824 Net income $ 793 $ 1,872 $ 6,559 $ 24,672 Net income per share: Basic $ 0.06 $ 0.14 $ 0.49 $ 1.77 Diluted $ 0.06 $ 0.14 $ 0.48 $ 1.77
Diverse portfolio of 21 early-stage consumer brands American Outdoor Brands (NASDAQ: AOUT) Note: American Outdoor Brands, Inc. licenses the brands Smith & Wesson® Accessories; M&P® Accessories; Thompson/Center Arms™ Accessories; and Performance Center® Accessories, all of which are owned by Smith & Wesson Brands, Inc. and are exclusively licensed to American Outdoor Brands, Inc. MEAT! 16" Chamber Sealer MEAT! Butcher Knife Set Grilla Modular Outdoor Kitchen Caldwell Claymore Clay Target Thrower Frankford Arsenal X-10 Progressive Reloading Press Hooyman Lithium-Ion 24v Spreader BOG Sherpa ALL-IN-ONE Optics, Camera & Shooting Rest tripod Wheeler F.A.T. Stix Torque Setting Tools Lockdown Securewall Organizational Systems Crimson Trace HorizonLine Rangefinding Binoculars Smith & Wesson Throwing Knives and Axes Crimson Trace HRO Red Dot Sight Tipton Ultra Gun Vise Lockdown In-Plain-Sight Concealment Shelves Caldwell E-Max Shadows Pro Hearing Protection Schrade Isolate Enrage BUBBA Smart Fish Scale and Fishing App Caldwell Flash Bang Hit Indicator Frankford Arsenal Essentials Reloading Kit Grilla Chimp Tailgater WiFi Wood Pellet Grill and Power Station BUBBA Culling Set BOG Full line of Hunting Packs
Fillet knives, fishing rods, fishing tools, kitchen cutlery, apparel Grills, smokers, outdoor kitchens, portable power solutions, pellets, & accessories Folding, fixed-blade knives Folding & fixed-blade knives, multi-tools, adventure equipment Tents, sleeping bags, mattress pads, camping tools and accessories Hunting rests, ground blinds, chairs, bags, game cameras Land management: rakes, shovels, pruning tools, tree saws, spreaders Meat grinders, mixers, stuffers, slicers, dehydrators, kitchen cutlery, butcher knives Folding, fixed-blade, & fillet knives Hunting bags & protective cases, binoculars, hunting accessories Folding, fixed-blade, & hunting knives Range Gear: Shooting rests, clay throwers, targets, hearing & eye protection Reloading equipment Gun vises, cleaning supplies Gunsmithing and other tools Scopes, lasers, red dot sights, rangefinders, binoculars Laser training devices Vault organization, vault security, cable locks Gun cases and cleaning kits Folding & fixed-blade knives, tools, flashlights, protective gun cases Folding & fixed-blade knives, tools, flashlights, protective gun cases, parts kits Two Categories: outdoor lifestyle & shooting sports American Outdoor Brands (NASDAQ: AOUT) Adventurer Outdoor Lifestyle Shooting Sports Harvester Marksman Defender Illustrative Products Note: American Outdoor Brands, Inc. licenses the brands Smith & Wesson® Accessories; M&P® Accessories; Thompson/Center Arms™ Accessories; and Performance Center® Accessories, all of which are owned by Smith & Wesson Brands, Inc. and are exclusively licensed to American Outdoor Brands, Inc.