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 |
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 | |
Exhibit 99.1
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 | ||||||||
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| 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 | ) | ||||||||
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| Non-GAAP income per share—diluted |
$ | 0.07 | $ | 0.12 | $ | 1.04 | $ | 1.24 | ||||||||
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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 | ||||||
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| Gross profit |
40,632 | 87,569 | ||||||
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| Operating expenses: |
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| Research and development |
2,786 | 2,152 | ||||||
| Selling and marketing |
11,718 | 9,195 | ||||||
| General and administrative |
29,328 | 23,698 | ||||||
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| Total operating expenses |
43,832 | 35,045 | ||||||
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| Operating (loss)/income |
(3,200 | ) | 52,524 | |||||
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| Other (expense)/income, net: |
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| Other income, net |
1,298 | — | ||||||
| Interest expense, net |
(2,391 | ) | (2,012 | ) | ||||
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| Total other (expense)/income, net |
(1,093 | ) | (2,012 | ) | ||||
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| (Loss)/income from operations before income taxes |
(4,293 | ) | 50,512 | |||||
| Income tax (benefit)/expense |
(2,128 | ) | 15,290 | |||||
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| Net (loss)/ income |
(2,165 | ) | 35,222 | |||||
| Net (loss)/income per share: |
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| Basic |
$ | (0.04 | ) | $ | 0.63 | |||
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| Diluted |
$ | (0.04 | ) | $ | 0.62 | |||
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| 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: |
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| 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 | ||||||
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| Total current assets |
317,748 | 318,441 | ||||||
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| 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 | ||||||
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| $ | 778,122 | $ | 788,036 | |||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| 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 | ||||||
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| 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 | ||||||
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| Total liabilities |
387,477 | 394,874 | ||||||
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| Commitments and contingencies |
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| Stockholders’ equity: |
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| 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 | ) | ||||
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| Total stockholders’ equity |
390,645 | 393,162 | ||||||
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| $ | 778,122 | $ | 788,036 | |||||
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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: |
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| Net (loss)/income |
$ | (2,165 | ) | $ | 35,222 | |||
| Adjustments to reconcile net (loss)/income to net cash provided by operating activities: |
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| 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: |
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| 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 | ||||||
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| Net cash (used in)/provided by operating activities |
(34,492 | ) | 40,610 | |||||
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| Cash flows from investing activities: |
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| 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 | ) | ||||
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| Net cash used in investing activities |
(4,788 | ) | (11,115 | ) | ||||
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| Cash flows from financing activities: |
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| 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 | ) | ||||
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| Net cash provided by/(used in) financing activities |
21,103 | (5,762 | ) | |||||
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| Net (decrease)/increase in cash and cash equivalents |
(18,177 | ) | 23,733 | |||||
| Cash and cash equivalents, beginning of period |
61,549 | 191,279 | ||||||
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| Cash and cash equivalents, end of period |
$ | 43,372 | $ | 215,012 | ||||
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| Supplemental disclosure of cash flow information |
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| Cash paid for: |
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| 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 |
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| GAAP gross profit |
$ | 40,632 | 31.5 | % | $ | 87,569 | 42.3 | % | ||||||||
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| 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 | % | ||||||||
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| Non-GAAP operating expenses |
$ | 37,418 | 29.0 | % | $ | 31,147 | 15.1 | % | ||||||||
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| 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 | % | ||||||||||
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| Non-GAAP operating income |
$ | 3,214 | 2.5 | % | $ | 56,422 | 27.3 | % | ||||||||
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|
|
|||||||||
| 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 | % | ||||||||
|
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|
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| Non-GAAP net income |
$ | 1,159 | 0.9 | % | $ | 37,740 | 18.2 | % | ||||||||
|
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|
|
|
|
|
|
|
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| 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 | ) | ||||||||||||
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|
|
|
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| Non-GAAP net income per share-diluted (a) |
$ | 0.02 | $ | 0.66 | ||||||||||||
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| (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 | ) | |||||
|
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|
|
|
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| Free cash flow |
$ | (39,280 | ) | $ | 29,474 | |||
|
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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 | ) | — | |||||
|
|
|
|
|
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| Non-GAAP Adjusted EBITDAS |
$ | 12,942 | $ | 65,816 | ||||
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Page 8 of 8