American Outdoor Brands’ Quarterly Sales Slump 29 Percent

American Outdoor Brands, Inc. reported sales fell 28.8 percent in the fourth quarter and 10.5 percent in the fiscal year ended April 30.

Full Year Fiscal 2022 Financial Highlights
Full-year net sales were $247.5 million, a decrease of $29.2 million, or 10.5 percent, compared with record net sales of $276.7 million for the prior year. On a two-year basis, net sales grew 47.9 percent, reflecting increases in both e-commerce and traditional sales channels.

Full-year gross margin was 46.2 percent, an increase of 40 basis points, over the gross margin of 45.8 percent for the prior year.

Full-year GAAP net loss was $64.9 million, or $4.66 per diluted share, compared with a net income of $18.4 million, or $1.29 per diluted share, last year. During the fourth quarter, the decline in our stock price and resulting market capitalization constituted a triggering event under Accounting Standards Codification No. 350, Intangible-Goodwill and Other (ASC 350), requiring the Company to record a $67.8 million, non-cash impairment charge. The impairment charge and related income tax effect, when combined, negatively impacted basic and diluted earnings per share by $5.37. Excluding the impairment and related tax charges, diluted earnings per share would have been $0.71.

Full-year non-GAAP net income was $24.7 million, or $1.77 per diluted share, compared with non-GAAP net income of $33.0 million, or $2.32 per diluted share, for the prior year. GAAP to non-GAAP adjustments for net income excludes a non-cash impairment of goodwill, acquired intangible amortization, stock compensation, transition costs, technology implementation, acquisition costs, COVID-19 expenses, related party interest, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

Full-year Adjusted EBITDAS was $35.0 million, or 14.2 percent of net sales, compared with $47.3 million, or 17.1 percent of net sales, for the prior year. For a detailed reconciliation, see the schedules that follow in this release.

Fourth Quarter Fiscal 2022 Financial Highlights
Quarterly net sales were $45.9 million, a decrease of $18.6 million, or 28.8 percent, compared with record net sales of $64.5 million for the comparable quarter last year. On a two-year basis, net sales grew 6.5 percent over the fourth quarter of fiscal 2020, reflecting growth in the traditional channel of 18.0 percent.

The quarterly gross margin was 43.8 percent, compared with the quarterly gross margin of 44.4 percent for the comparable quarter last year.

Quarterly GAAP net loss was $76.7 million, or ($5.71) per diluted share, compared with a net income of $1.2 million, or $0.09 per diluted share, for the comparable quarter last year. The $67.8 million non-cash impairment charge and related income tax effect, when combined, negatively impacted basic and diluted earnings per share by $5.57. Excluding the impairment and related tax charges, diluted earnings per share would have been ($0.14).

Quarterly non-GAAP net income was $1.9 million, or $0.14 per diluted share, compared with non-GAAP net income of $4.9 million, or $0.34 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income excludes a non-cash impairment of goodwill, fair value inventory step-up, acquired intangible amortization, stock compensation, technology implementation, acquisition costs, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

Quarterly Adjusted EBITDAS was $3.2 million, or 7.0 percent of net sales, compared with $7.0 million, or 10.8 percent of net sales, for the comparable quarter last year. For a detailed reconciliation, see the schedules that follow in this release.

Brian Murphy, president and CEO, said, “Fiscal 2022 marks the completion of our first full year as a standalone company dedicated to building authentic, lifestyle brands that help consumers make the most out of the moments that matter. On a two-year basis, we delivered net sales growth of nearly 48 percent over our pre-pandemic levels, reflecting strength in both our traditional and e-commerce channels, and driven primarily by the growth of over 56 percent in our outdoor lifestyle category, which consists of products related to hunting, fishing, camping, and rugged outdoor activities.

“Over the course of the year, we remained firmly focused on our long-term strategic priorities and we believe we made significant progress across those objectives. We continued to expand our presence, growing our international net sales by nearly 40 percent year-over-year, and we leveraged our Dock & Unlock strategy to deliver a steady flow of exciting new products that generated nearly 26 percent of our fiscal 2022 revenue. Our direct-to-consumer offering demonstrated strong momentum, growing 73 percent in fiscal 2022, as we continued to move closer to our core customers with authentic and in-demand brands. Lastly, we expanded our outdoor lifestyle category and entered the attractive grilling market with the acquisition of Grilla Grills. We believe our achievements in fiscal 2022 helped us to strengthen our foundation and diversify our company while building stronger, long-lasting relationships with our consumers. None of these achievements would have been possible without the loyalty, hard work, and dedication of our employees, who helped move American Outdoor Brands forward on the path toward an exciting, long-term future.”

Andrew Fulmer, CFO, said, “Our fiscal 2022 results demonstrate our ability to effectively deploy our capital and execute on our value-creation strategy, which focuses on investing in organic growth opportunities through innovation while identifying and pursuing accretive acquisitions that meet our criteria. At the same time, we continued to opportunistically return capital to shareholders, as evidenced by a $15 million share repurchase program we completed in fiscal 2022, demonstrating our Board’s confidence in the business and its commitment to a well-balanced capital allocation program that considers the perspectives of our shareholders. Our cash balance, combined with the capacity on our line of credit, provided us with almost $70 million of available capital at the end of fiscal 2022. We believe our solid financial position enables us to continue executing on our long-term strategic plan, investing in our business and addressing the exciting growth opportunities we have identified for fiscal 2023 and beyond.”

American Outdoor Brands, spun off from Smith & Western in 2020, manufactures outdoor products and accessories, including hunting, fishing, camping, shooting, personal security, and defense products. Brands include Caldwell, Wheeler, Tipton, Frankford Arsenal, Hooyman, Bog, MEAT! Your Maker, Uncle Henry, Old Timer, Imperial, Crimson Trace, LaserLyte, Lockdown, Bubba, and Schrade.