SPRINGFIELD, Mass., June 20, 2018 /PRNewswire/ -- 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 fourth quarter and full year fiscal 2018, ended April 30, 2018.

Please note: As of the time of this press release, the SEC EDGAR system is currently unavailable. We will post our Form 10-K on our company website at www.aob.com, under the Investor Relations tab.

Fourth Quarter Fiscal 2018 Financial Highlights

• Quarterly net sales were $172.0 million compared with $229.2 million for the fourth quarter last year, a decrease of 24.9%.
• Gross margin for the quarter was 33.4% compared with 39.6% for the fourth quarter last year. 
• Quarterly GAAP net income was $7.7 million, or $0.14 per diluted share, compared with $27.7 million, or $0.50 per diluted share, for the comparable quarter last year.
• Quarterly non-GAAP net income was $13.3 million, or $0.24 per diluted share, compared with $31.8 million, or $0.57 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments to net income exclude a number of acquisition-related costs, certain product recall related costs, and other costs. For a detailed reconciliation, see the schedules that follow in this release.
• Quarterly non-GAAP Adjusted EBITDAS was $33.4 million, or 19.4% of net sales, compared with $60.5 million, or 26.4% of net sales, for the comparable quarter last year.

Full Year Fiscal 2018 Financial Highlights

• Full year net sales were $606.9 million compared with $903.2 million a year ago, a decrease of 32.8%.
• Full year gross margin was 32.3% compared with 41.5% last year. 
• Full year GAAP net income was $20.1 million, or $0.37 per diluted share, compared with $127.9 million, or $2.25 per diluted share, last year.
• Full year non-GAAP net income was $25.1 million, or $0.46 per diluted share, compared with $146.5 million, or $2.58 per diluted share last year.
• Full year non-GAAP Adjusted EBITDAS was $89.5 million, or 14.7% of net sales, compared with $266.3 million, or 29.5% of net sales, last year.

James Debney, American Outdoor Brands Corporation President and Chief Executive Officer, commented, "Fiscal 2018 was a year characterized by lower consumer demand for firearms, heightened levels of inventory in the consumer channel, and a host of aggressive, industry-wide promotions. Despite those challenges, we achieved a number of accomplishments in the year that marked important progress toward our long-term strategy of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast."

"In our Firearms segment, we added several exciting products to our next generation M&P 2.0 polymer pistol platform, which we launched in the prior fiscal year.  In fact, new products – which we define as products launched within the last twelve months -- accounted for 29% of our firearms revenue in fiscal 2018, and strong adoption rates across our growing M&P family helped us retain our leadership position in the consumer market for handguns.  During the year we also made significant progress on market penetration with our T/C Compass bolt action hunting rifle. Finally, we  expanded our firearms segment inorganically with the acquisition of Gemtech, a provider of high quality suppressors and accessories for the consumer, law enforcement, and military markets, providing us access to new technology for use in our future new product development processes." 

"Our Outdoor Products & Accessories segment generated 26% of our total revenue in fiscal 2018 compared to just 14% in fiscal 2017. Our Outdoor Products and Accessories Division launched nearly 150 new products across categories including: shooting, cutlery, tools, and survival products.  Our Electro-Optics Division, Crimson Trace, also launched several new products in fiscal 2018, and entered the large and diverse flashlight category.  We were very pleased with the organic growth we achieved in the Outdoor Products & Accessories segment, given that it was a challenging year for the outdoor retail industry overall.  In addition, our new product launches – namely handheld flashlights in our Outdoor Products and Accessories Division and firearm-mounted lights from our Electro-Optics Division -- demonstrate that we have the ability to enter new markets organically with multiple brands.  In fiscal 2018, we supplemented organic growth with revenue from acquisitions, including the acquisition of the popular Bubba Blade fishing tool brand.  Both of our acquisitions in fiscal 2018 helped us expand into new markets that resonate with our core firearms consumers, many of whom also have a passion for the rugged outdoors," Debney concluded.

Jeff Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, commented, "The strength of our balance sheet in fiscal 2018 supported a number of initiatives throughout the year, including two acquisitions designed to facilitate our strategic growth, and the refinancing of our Senior Notes at their existing interest rate with an extended maturity. During the year, we had a peak balance of $125 million outstanding on our revolving line of credit, which we have since repaid in full, leaving available to us the entire capacity, which is expandable up to $500 million.   We had strong free cash flow in our fourth quarter of $61.2 million, and ended the year with net debt of $138.8 million. In fiscal 2019, we expect to continue employing the strength of our balance sheet to fuel additional growth opportunities, both organic and inorganic."

Financial Outlook

Conference Call and Webcast
The company will host a conference call and webcast today, June 20, 2018, to discuss its fourth quarter and full year 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 identification number 5995055.  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.

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, the company considers and uses these 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) transition costs, (iii) acquisition-related costs, (iv) fair value inventory step-up and backlog expense, (v) corporate rebranding expenses, (vi) debt extinguishment costs, (vii) recall related expenses, (vii) the tax effect of non-GAAP adjustments, (ix) net cash provided by operating activities, (x) net cash used in investing activities, (xi) acquisition of businesses, net of cash acquired, (xii) receipts from note receivable, (xiii) interest expense (xiv) income tax expense, (xv) depreciation and amortization, (xvi) stock-based compensation expenses, (xvii) discontinued operations, (xviii) changes in contingent consideration, and (xix) Tax Reform; 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. 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 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 long gun, and suppressor 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®, Imperial®, Bubba Blade®, and UST®.  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 long-term strategy of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast market; our belief that the launch of new additions to our M&P branded polymer pistol family helped us retain our leadership position in the consumetr market for handguns; our belief that the acquisition of Gemtech provided us access to new technology for use in future new product development processes; our belief that our strong balance sheet will provide us the opportunity in fiscal 2019 for additional growth opportunities, both organic and inorganic; and our expectations for net sales, GAAP income per diluted share, acquisition-related costs, amortization of acquired intangible assets, fair value inventory step-up and backlog expense, tax effect of non-GAAP adjustments, and non-GAAP income per diluted share for the first quarter of fiscal 2019 and for fiscal 2019.  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, economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; 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; 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 630,000 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, 2018.

Contact: Liz Sharp, VP Investor Relations
American Outdoor Brands Corporation
(413) 747-6284
lsharp@aob.com   

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