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8-K
AMERICAN OUTDOOR BRANDS CORP filed this Form 8-K on 09/07/2017
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8-K

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

September 7, 2017

Date of Report (Date of earliest event reported)

American Outdoor Brands Corporation

(Exact Name of Registrant as Specified in Charter)

 

Nevada   001-31552   87-0543688

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2100 Roosevelt Avenue

Springfield, Massachusetts

01104

(Address of Principal Executive Offices) (Zip Code)

(800) 331-0852

(Registrant’s telephone number, including area code)

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 (see General Instruction A.2. below):

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 §CRF 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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 2.02. Results of Operations and Financial Condition.

We are furnishing the disclosure in this Item 2.02 in connection with the disclosure of information in the form of the textual information from a press release released on September 7, 2017.

The information in this Item 2.02 (including the exhibit) is furnished pursuant to Item 2.02 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.

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 Current 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.

(a) Financial Statements of Business Acquired.

Not applicable.

(b) Pro Forma Financial Information.

Not applicable.

(c) Shell Company Transactions.

Not applicable.

(d) Exhibits.

 

Exhibit
Number

  

Exhibits

99.1    Press release from American Outdoor Brands Corporation, dated September 7, 2017


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 hereunto duly authorized.

 

    AMERICAN OUTDOOR BRANDS CORPORATION
Date: September 7, 2017     By:  

/s/ Jeffrey D. Buchanan

      Jeffrey D. Buchanan
      Executive Vice President, Chief Financial Officer,
Chief Administrative Officer, and Treasurer


EXHIBIT INDEX

 

99.1    Press release from American Outdoor Brands Corporation, dated September 7, 2017
EX-99.1

Exhibit 99.1

 

LOGO

Contact: Liz Sharp, VP Investor Relations    

American Outdoor Brands Corporation

(413) 747-6284

lsharp@aob.com    

American Outdoor Brands Corporation Reports

First Quarter Fiscal 2018 Financial Results

SPRINGFIELD, Mass., September 7, 2017 — American Outdoor Brands Corporation (NASDAQ Global Select: AOBC), one of the world’s leading providers of firearms and quality products for the shooting, hunting, and rugged outdoor enthusiast, today announced financial results for the first quarter fiscal 2018, ended July 31, 2017.

First Quarter Fiscal 2018 Financial Highlights

 

    Quarterly net sales were $129.0 million compared with $207.0 million for the first quarter last year, a decrease of 37.7%.

 

    Gross margin for the quarter was 31.5% compared with 42.3% for the first quarter last year.

 

    Quarterly GAAP net loss was $2.2 million, or $(0.04) per diluted share, compared with net income of $35.2 million, or $0.62 per diluted share, for the comparable quarter last year. First quarter 2018 and 2017 GAAP net (loss)/income per diluted share include expenses of $3.8 million and $1.7 million, respectively, for amortization, net of tax, related to acquisitions.

 

    Quarterly Non-GAAP net income was $1.2 million, or $0.02 per diluted share, compared with $37.7 million, or $0.66 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments to net income exclude a number of acquisition-related costs, including amortization, one-time transaction costs, and a change in contingent consideration liability, as well as discontinued operations. For a detailed reconciliation, see the schedules that follow in this release.

 

    Quarterly non-GAAP Adjusted EBITDAS was $12.9 million, or 10.0% of net sales, compared with $65.8 million, or 31.8% of net sales, for the comparable quarter last year.

 

    During the first quarter, the company announced the purchase of substantially all of the assets of Gemini Technologies, Incorporated (“Gemtech”), a provider of high quality suppressors and accessories for the consumer, law enforcement, and military markets, for $10.0 million. The company also announced the purchase of Bubba Blade™, a premium brand of knives and tools for fishing and hunting, for approximately $12.0 million. Both transactions closed early in the second quarter of fiscal 2018.

James Debney, American Outdoor Brands Corporation President and Chief Executive Officer, commented, “Our financial results for the first quarter reflected lower than anticipated shipments in our Firearms business, consistent with a softening in wholesaler and retailer orders, partially offset by increased revenue from our Outdoor Products & Accessories business, which grew organically at 11.4% and which more than doubled inorganically. Total revenue for the quarter also faced a challenging comparison to last year’s heightened level of firearms demand, which we believe was driven by concerns for personal safety and the potential for increased firearm legislation.

 

Page 1 of 8


“In Firearms, we believe units shipped in the first quarter were impacted by an extremely successful promotion on our M&P Shield pistols that we initiated in our prior fourth quarter. That promotion exceeded our expectations and we believe it pulled forward our shipments into the fourth quarter as wholesalers and retailers stocked up in preparation for the strong consumer demand for those products that they believed would occur — and that did in fact occur — over the ensuing 90 days. In addition, we believe that heightened channel inventory from multiple manufacturers at retail locations contributed to lower orders in the quarter. Despite those heightened channel inventories, we were pleased that our inventory at distributors actually declined during the quarter. For the remainder of the year, our focus in Firearms will be on bringing Gemtech suppressors into our product line and on introducing several significant new firearms in the second half of this fiscal year. We plan to further increase our internal inventory in preparation for new product launches, the upcoming fall hunting and holiday seasons, and the industry ordering shows that occur in January and February. In Outdoor Products & Accessories, we will focus on new product introductions, including offerings from our acquisition of Bubba Blade, a premium knife brand that is widely recognized among outdoor enthusiasts for some of the finest knives for fishing and hunting. Bubba Blade products deliver features and benefits that are very popular with consumers, and are protected by strong intellectual property. This acquisition also serves as our first step into the sizeable fishing market. Overall, we remain focused on the execution of our long-term strategic growth initiatives, which support our vision of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast,” concluded Debney.

Jeff Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, commented, “We ended the quarter with cash of $43.4 million and net debt of approximately $199 million. Although operating cash flow for our first quarter was negative, and we are forecasting neutral operating cash flow for our second quarter, we expect the current fiscal year to deliver positive operating cash flow of $70 million to $90 million. In addition, based on our guidance and current cash flow forecast, we do not expect our Net Debt-to-Adjusted EBITDAS trailing twelve month ratio to rise above 1.6, and we expect that ratio to be below 1.2 by the end of our current fiscal year.”

Financial Outlook

AMERICAN OUTDOOR BRANDS CORPORATION

NET SALES AND EARNINGS PER SHARE GUIDANCE, INCLUDING GAAP TO NON-GAAP RECONCILIATION

(Unaudited)

 

     Range for the Three Months Ending October 31, 2017     Range for the Year Ending April 30, 2018  

Net sales (in thousands)

   $ 140,000     $ 150,000     $ 700,000     $ 740,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP income per share—diluted

   $ —       $ 0.05     $ 0.77     $ 0.97  

Amortization of acquired intangible assets

     0.11       0.11       0.43       0.43  

Acquisition-related costs

     —         —         0.01       0.01  

Transition costs

     —         —         0.01       0.01  

Change in contingent consideration

     —         —         (0.02     (0.02

Tax effect of non-GAAP adjustments

     (0.04     (0.04     (0.16     (0.16
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income per share—diluted

   $ 0.07     $ 0.12     $ 1.04     $ 1.24  
  

 

 

   

 

 

   

 

 

   

 

 

 

Conference Call and Webcast

The company will host a conference call and webcast today, September 7, 2017, to discuss its first quarter fiscal 2018 financial and operational results. Speakers on the conference call will include James Debney, President and Chief Executive Officer, and Jeffrey D. Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer. The conference call may include forward-looking statements. 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 (844) 309-6568 and reference conference code 73063180. No RSVP is necessary. The conference call audio webcast can also be accessed live and for replay on the company’s website at www.aob.com, under the Investor Relations section. The company will maintain an audio replay of this conference call on its website for a period of time after the call. No other audio replay will be available.

 

Page 2 of 8


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

In this press release, certain non-GAAP financial measures, including “non-GAAP net income,” “Adjusted EBITDAS,” and “free cash flow” are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for our company and the reader to review, as applicable, both (1) GAAP measures that include (i) amortization of acquired intangible assets, (ii) transition costs, (iii) discontinued operations, (iv) changes in contingent consideration liabilities, (v) acquisition-related costs, (vi) tax effect of non-GAAP adjustments, (vii) net cash (used in)/provided by operating activities, (viii) net cash used in investing activities, (ix) receipts from note receivable, (x) interest expense (xi) income tax (benefit)/expense, (xii) depreciation and amortization, and (xiii) stock-based compensation expense; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe 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 our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating our financial measures on a GAAP basis.

About American Outdoor Brands Corporation

American Outdoor Brands Corporation (NASDAQ Global Select: AOBC) is a provider of quality products for shooting, hunting, and rugged outdoor enthusiasts in the global consumer and professional markets. The company reports two segments: Firearms and Outdoor Products & Accessories. Firearms manufactures handgun and long gun products sold under the Smith & Wesson®, M&P®, Thompson/Center Arms™, and Gemtech® brands as well as provides forging, machining, and precision plastic injection molding services. Outdoor Products & Accessories provides shooting, hunting, and outdoor accessories, including reloading, gunsmithing, and gun cleaning supplies, tree saws, vault accessories, knives, laser sighting systems, tactical lighting products, and survival and camping equipment. Brands in Outdoor Products & Accessories include Smith & Wesson®, M&P®, Thompson/Center Arms™, Crimson Trace®, Caldwell® Shooting Supplies, Wheeler® Engineering, Tipton® Gun Cleaning Supplies, Frankford Arsenal® Reloading Tools, Lockdown® Vault Accessories, Hooyman® Premium Tree Saws, BOG POD®, Golden Rod® Moisture Control, Schrade®, Old Timer®, Uncle Henry®, UST™, Imperial™, and Bubba Blade™. For more information on American Outdoor Brands Corporation, call (844) 363-5386 or log on to www.aob.com.

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. Such forward-looking statements include, among others, our strategy to continue growing and balancing our business across the shooting, hunting, and rugged outdoor enthusiast market; our belief that total revenue for the quarter faced a challenging comparison to last year’s heightened levels of firearms demand which we believe was driven by concerns for personal safety and the potential for increased firearm legislation; our belief that operating results in the quarter were impacted by successful promotions in the fourth fiscal quarter of 2017 on our M&P Shield pistols, which we believe pulled forward shipments into the fourth quarter as wholesalers and retailers stocked up in preparation for strong consumer demand over the ensuing 90 days; our belief that heightened channel inventory from multiple manufacturers at retail locations contributed to lower orders in the quarter; our belief that we are focused on executing our long-term strategic initiatives, which support our vision of being the leading provider of quality products for the shooting, hunting and rugged outdoor enthusiast; our expectation that the current fiscal year will deliver positive operating cash flow of $70 million to $90 million; our belief that we do not expect our Net-Debt-to-Adjusted EBITDAS trailing twelve month ratio to rise above 1.6 and that the ratio will be below 1.2 by the end of our current fiscal year; and our expectations for net sales, GAAP income per diluted share, amortization of acquired intangible assets, acquisition-related costs, transition costs, change in contingent consideration, tax effect of non-GAAP adjustments, and non-GAAP income per diluted share for the second quarter of fiscal 2018 and for fiscal 2018. 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 demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; the potential for increased regulation of firearms and firearm-related products; speculation surrounding fears of terrorism and crime; our anticipated growth and growth opportunities; our ability to increase demand for our products in various markets, including consumer, law enforcement, and military channels, domestically and internationally; our penetration rates in new and existing markets; our strategies; our ability to maintain and enhance brand recognition and reputation; risks associated with the establishment of our new 500,000 square foot national distribution center; our ability to introduce new products; the success of new products; our ability to expand our markets; our ability to integrate acquired businesses in a successful manner; the general growth of our outdoor products and accessories business; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2017.

 

Page 3 of 8


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS)/INCOME

(Unaudited)

 

     For the Three Months Ended  
     July 31, 2017     July 31, 2016  
     (In thousands, except per share data)  

Net sales

   $ 129,021     $ 206,951  

Cost of sales

     88,389       119,382  
  

 

 

   

 

 

 

Gross profit

     40,632       87,569  
  

 

 

   

 

 

 

Operating expenses:

    

Research and development

     2,786       2,152  

Selling and marketing

     11,718       9,195  

General and administrative

     29,328       23,698  
  

 

 

   

 

 

 

Total operating expenses

     43,832       35,045  
  

 

 

   

 

 

 

Operating (loss)/income

     (3,200     52,524  
  

 

 

   

 

 

 

Other (expense)/income, net:

    

Other income, net

     1,298       —    

Interest expense, net

     (2,391     (2,012
  

 

 

   

 

 

 

Total other (expense)/income, net

     (1,093     (2,012
  

 

 

   

 

 

 

(Loss)/income from operations before income taxes

     (4,293     50,512  

Income tax (benefit)/expense

     (2,128     15,290  
  

 

 

   

 

 

 

Net (loss)/ income

     (2,165     35,222  

Net (loss)/income per share:

    

Basic

   $ (0.04   $ 0.63  
  

 

 

   

 

 

 

Diluted

   $ (0.04   $ 0.62  
  

 

 

   

 

 

 

Weighted average number of common shares outstanding:

    

Basic

     53,905       56,049  

Diluted

     53,905       56,883  

 

Page 4 of 8


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     As of  
     July 31, 2017
(unaudited)
    April 30, 2017  
     (In thousands, except par value and share data)  
ASSETS  

Current assets:

    

Cash and cash equivalents

   $ 43,372     $ 61,549  

Accounts receivable, net of allowance for doubtful accounts of $914 on July 31, 2017 and $598 on April 30, 2017

     92,720       108,444  

Inventories

     161,067       131,682  

Prepaid expenses and other current assets

     8,356       6,123  

Income tax receivable

     12,233       10,643  
  

 

 

   

 

 

 

Total current assets

     317,748       318,441  
  

 

 

   

 

 

 

Property, plant, and equipment, net

     145,922       149,685  

Intangibles, net

     135,678       141,317  

Goodwill

     169,100       169,017  

Other assets

     9,674       9,576  
  

 

 

   

 

 

 
   $ 778,122     $ 788,036  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY  

Current liabilities:

    

Accounts payable

   $ 40,037     $ 53,447  

Accrued expenses

     44,876       51,686  

Accrued payroll and incentives

     9,169       21,174  

Accrued income taxes

     209       726  

Accrued profit sharing

     14,615       13,004  

Accrued warranty

     4,866       4,908  

Current portion of notes payable

     81,300       6,300  
  

 

 

   

 

 

 

Total current liabilities

     195,072       151,245  

Deferred income taxes

     25,579       25,620  

Notes and loans payable, net of current portion

     159,324       210,657  

Other non-current liabilities

     7,502       7,352  
  

 

 

   

 

 

 

Total liabilities

     387,477       394,874  
  

 

 

   

 

 

 

Commitments and contingencies

    

Stockholders’ equity:

    

Preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding

     —         —    

Common stock, $.001 par value, 100,000,000 shares authorized, 72,166,898 shares issued and 54,000,036 shares outstanding on July 31, 2017 and 72,017,288 shares issued and 53,850,426 shares outstanding on April 30, 2017

     72       72  

Additional paid-in capital

     245,592       245,865  

Retained earnings

     366,999       369,164  

Accumulated other comprehensive income

     357       436  

Treasury stock, at cost (18,166,862 shares on July 31, 2017 and April 30, 2017)

     (222,375     (222,375
  

 

 

   

 

 

 

Total stockholders’ equity

     390,645       393,162  
  

 

 

   

 

 

 
   $ 778,122     $ 788,036  
  

 

 

   

 

 

 

 

Page 5 of 8


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     For the Three Months Ended  
     July 31, 2017     July 31, 2016  
     (In thousands)  

Cash flows from operating activities:

    

Net (loss)/income

   $ (2,165   $ 35,222  

Adjustments to reconcile net (loss)/income to net cash provided by operating activities:

    

Depreciation and amortization

     13,769       10,320  

Loss on sale/disposition of assets

     5       14  

Provision for losses on accounts receivable

     227       37  

Change in contingent consideration

     (1,300     —    

Stock-based compensation expense

     1,888       1,792  

Changes in operating assets and liabilities:

    

Accounts receivable

     15,470       2,044  

Inventories

     (29,385     (9,860

Prepaid expenses and other current assets

     (2,233     (1,913

Income taxes

     (2,107     7,728  

Accounts payable

     (12,752     (240

Accrued payroll and incentives

     (12,051     (9,604

Accrued profit sharing

     1,611       3,559  

Accrued expenses

     (5,520     1,805  

Accrued warranty

     (42     (161

Other assets

     (217     (145

Other non-current liabilities

     310       12  
  

 

 

   

 

 

 

Net cash (used in)/provided by operating activities

     (34,492     40,610  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Refunds on machinery and equipment

     —         4,773  

Receipts from note receivable

     —         21  

Payments to acquire patents and software

     (97     (133

Payments to acquire property and equipment

     (4,691     (15,776
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,788     (11,115
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from loans and notes payable

     25,000       —    

Payments on capital lease obligation

     (161     (149

Payments on notes payable

     (1,575     (1,575

Proceeds from Economic Development Incentive Program

     —         101  

Payment of employee withholding tax related to restricted stock units

     (2,161     (4,139
  

 

 

   

 

 

 

Net cash provided by/(used in) financing activities

     21,103       (5,762
  

 

 

   

 

 

 

Net (decrease)/increase in cash and cash equivalents

     (18,177     23,733  

Cash and cash equivalents, beginning of period

     61,549       191,279  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 43,372     $ 215,012  
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid for:

    

Interest

   $ 3,199     $ 2,755  

Income taxes

     417       7,685  

 

Page 6 of 8


RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share data)

(Unaudited)

 

     For the Three Months Ended  
     July 31, 2017     July 31, 2016  
     $     % of
Sales
    $     % of
Sales
 

GAAP gross profit

   $ 40,632       31.5   $ 87,569       42.3
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating expenses

   $ 43,832       34.0   $ 35,045       16.9

Amortization of acquired intangible assets

     (5,685     -4.4     (2,544     -1.2

Transition costs

     (312     -0.2     —         —    

Discontinued operations

     —         —         (21     0.0

Acquisition-related costs

     (417     -0.3     (1,333     -0.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 37,418       29.0   $ 31,147       15.1
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating (loss)/income

   $ (3,200     -2.5   $ 52,524       25.4

Amortization of acquired intangible assets

     5,685       4.4     2,544       1.2

Transition costs

     312       0.2     —         —    

Discontinued operations

     —         —         21       0.0

Acquisition-related costs

     417       0.3     1,333       0.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 3,214       2.5   $ 56,422       27.3
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net (loss)/income

   $ (2,165     -1.7   $ 35,222       17.0

Amortization of acquired intangible assets

     5,685       4.4     2,544       1.2

Transition costs

     312       0.2     —         —    

Discontinued operations

     —         —         21       0.0

Acquisition-related costs

     417       0.3     1,333       0.6

Change in contingent consideration

     (1,300     -1.0     —         —    

Tax effect of non-GAAP adjustments

     (1,790     -1.4     (1,380     -0.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 1,159       0.9   $ 37,740       18.2
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net (loss)/income per share-diluted

   $ (0.04     $ 0.62    

Amortization of acquired intangible assets

     0.10         0.04    

Transition costs

     0.01         —      

Discontinued operations

     —           —      

Acquisition-related costs

     0.01         0.02    

Change in contingent consideration

     (0.02       —      

Tax effect of non-GAAP adjustments

     (0.03       (0.02  
  

 

 

     

 

 

   

Non-GAAP net income per share-diluted (a)

   $ 0.02       $ 0.66    
  

 

 

     

 

 

   

 

(a) Non-GAAP net income per share does not foot due to rounding.

 

Page 7 of 8


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET OPERATING CASH FLOW TO FREE CASH FLOW

(In thousands)

(Unaudited)

 

     For the Three Months Ended  
     July 31, 2017     July 31, 2016  

Net cash (used in)/provided by operating activities

   $ (34,492   $ 40,610  

Net cash used in investing activities

     (4,788     (11,115

Receipts from note receivable

     —         (21
  

 

 

   

 

 

 

Free cash flow

   $ (39,280   $ 29,474  
  

 

 

   

 

 

 

AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET (LOSS)/INCOME TO NON-GAAP ADJUSTED EBITDAS

(In thousands)

(Unaudited)

 

     For the Three Months Ended  
     July 31, 2017     July 31, 2016  

GAAP net (loss)/income

   $ (2,165   $ 35,222  

Interest expense

     2,391       2,054  

Income tax (benefit)/expense

     (2,128     15,290  

Depreciation and amortization

     13,527       10,104  

Stock-based compensation expense

     1,888       1,792  

Acquisition-related costs

     417       1,333  

Discontinued operations

     —         21  

Transition costs

     312       —    

Change in contingent consideration

     (1,300     —    
  

 

 

   

 

 

 

Non-GAAP Adjusted EBITDAS

   $ 12,942     $ 65,816  
  

 

 

   

 

 

 

 

Page 8 of 8