Form 8-K AMERICAN OUTDOOR BRANDS For: Dec 07

December 7, 2017 4:06 PM

 

 

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

Date of Report (Date of earliest event reported): December 7, 2017

 

 

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

(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 issued on December 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 at www.aob.com, although we reserve the right to discontinue that availability at any time.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits.

 

Exhibit
Number

  

Exhibits

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


EXHIBIT INDEX

 

99.1    Press release from American Outdoor Brands Corporation, dated December 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: December 7, 2017     By:  

    /s/ Jeffrey D. Buchanan

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

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

Second Quarter Fiscal 2018 Financial Results

SPRINGFIELD, Mass., December 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 second quarter fiscal 2018, ended October 31, 2017.

Second Quarter Fiscal 2018 Financial Highlights

 

   

Quarterly net sales were $148.4 million, in-line with the company’s guidance range, compared with $233.5 million for the second quarter last year, a decrease of 36.4%.

 

   

Gross margin for the quarter was 34.2% compared with 41.8% for the second quarter last year.

 

   

Quarterly GAAP net income was $3.2 million, or $0.06 per diluted share, compared with net income of $32.5 million, or $0.57 per diluted share, for the comparable quarter last year. Second quarter 2018 and 2017 GAAP net income per diluted share include expenses of $2.8 million and $3.0 million, respectively, for amortization, net of tax, related to acquisitions.

 

   

Quarterly Non-GAAP net income was $6.3 million, or $0.11 per diluted share, compared with $39.1 million, or $0.68 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, fair value inventory step-up and backlog expense, one-time transition costs, and discontinued operations, as well as the associated tax effect on non-GAAP adjustments. For a detailed reconciliation, see the schedules that follow in this release.

 

   

Quarterly non-GAAP Adjusted EBITDAS was $23.1 million, or 15.5% of net sales, compared with $72.4 million, or 31.0% of net sales, for the comparable quarter last year.

 

   

During the second quarter, the company completed 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 $10.9 million. The company also completed the purchase of substantially all of the assets of Fish Tales, LLC, a provider of premium sportsman knives and tools for fishing and hunting, including the knife brand, Bubba Blade™, for approximately $12.1 million.

James Debney, American Outdoor Brands Corporation President and Chief Executive Officer, commented, “Our results for the second quarter were within our guidance range despite challenging market conditions. Lower shipments in our Firearms business reflected a significant reduction in wholesaler and retailer orders versus the prior year, and were partially offset by higher revenue in our Outdoor Products & Accessories business. Total revenue for the quarter faced a challenging comparison to last year, when we believe strong consumer demand was driven by personal safety concerns and pre-election fears of increased firearm legislation.”

 

Page 1 of 9


“In Firearms, shipments of our new M&P branded polymer products in full-size, compact, and concealed carry models helped to offset lower orders in other product categories. While we were pleased that our firearm inventory at distributors declined slightly during the quarter, we believe that orders were negatively impacted by heightened channel inventory from multiple manufacturers at retail. As expected, our internal inventories peaked during the quarter, as we prepared for a number of new firearm product launches. Since then, we have reduced our internal production output levels and our outsourced capacity to help lower inventories and better balance production to demand. For the second half of fiscal 2018, our focus remains on ensuring that our internal manufacturing resources are aligned with demand. In addition, we intend to introduce several exciting new products, and execute on long-term organic growth initiatives that support our vision of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast,” concluded Debney.

Jeffrey D. Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, commented, “We ended the quarter with cash of $68.2 million and net debt of approximately $223 million. While cash flow for our second quarter was flat, as expected, we are forecasting positive cash flow for the balance of our fiscal year, as we lower our internal inventory levels in conjunction with the upcoming holiday buying season, new product launches, and winter distributor buying shows which take place during our fourth fiscal quarter.”

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
January 31, 2018
    Range for the
Year Ending
April 30, 2018
 

Net sales (in thousands)

   $ 170,000     $ 180,000     $ 650,000     $ 675,000  
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP income per share — diluted

   $ 0.01     $ 0.04     $ 0.33     $ 0.43  

Amortization of acquired intangible assets

     0.10       0.10       0.38       0.38  

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     (0.14     (0.14
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income per share — diluted

   $ 0.07     $ 0.10     $ 0.57     $ 0.67  
  

 

 

   

 

 

   

 

 

   

 

 

 

Conference Call and Webcast

The company will host a conference call and webcast today, December 7, 2017, to discuss its second 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 2598827. 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, 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) inventory step-up and backlog expense, (vii) tax effect of non-GAAP adjustments, (viii) net cash (used in)/provided by operating activities, (ix) net cash used in investing activities, (x) receipts from note receivable, (xi) interest expense (xii) income tax (benefit)/expense, (xiii) depreciation and amortization, and (xiv) 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.

 

Page 2 of 9


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®, 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 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 lower shipments in our Firearms business were due to a softening in wholesaler and retailer orders compared to last year; 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 belief that we will generate positive cash flow for the balance of our 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 third 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 630,000 square foot national distribution center; our ability to introduce new products including our new M&P branded polymer products in full-size, compact and concealed carry models; 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 9


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

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

Net sales

   $ 148,427     $ 233,528     $ 277,448     $ 440,479  

Cost of sales

     97,628       135,923       186,017       255,305  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     50,799       97,605       91,431       185,174  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     2,746       2,698       5,532       4,851  

Selling and marketing

     15,351       12,527       27,069       21,721  

General and administrative

     24,713       30,229       54,041       53,926  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     42,810       45,454       86,642       80,498  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     7,989       52,151       4,789       104,676  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other (expense)/income, net:

        

Other (expense)/income, net

     (3     (30     1,295       (30

Interest expense, net

     (2,963     (2,175     (5,354     (4,188
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other (expense)/income, net

     (2,966     (2,205     (4,059     (4,218
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations before income taxes

     5,023       49,946       730       100,458  

Income tax expense/(benefit)

     1,789       17,463       (337     32,752  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     3,234       32,483       1,067       67,706  

Net income per share:

        

Basic

   $ 0.06     $ 0.58     $ 0.02     $ 1.21  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.06     $ 0.57     $ 0.02     $ 1.18  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares outstanding:

        

Basic

     54,044       56,231       53,975       56,140  

Diluted

     54,656       57,136       54,800       57,145  

 

Page 4 of 9


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

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

Current assets:

    

Cash and cash equivalents

   $ 68,171     $ 61,549  

Accounts receivable, net of allowance for doubtful accounts of $1,301 on October 31, 2017 and $598 on April 30, 2017

     81,771       108,444  

Inventories

     178,946       131,682  

Prepaid expenses and other current assets

     7,630       6,123  

Income tax receivable

     11,280       10,643  
  

 

 

   

 

 

 

Total current assets

     347,798       318,441  
  

 

 

   

 

 

 

Property, plant, and equipment, net

     143,774       149,685  

Intangibles, net

     123,419       141,317  

Goodwill

     191,098       169,017  

Other assets

     10,174       9,576  
  

 

 

   

 

 

 
   $ 816,263     $ 788,036  
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY  

Current liabilities:

    

Accounts payable

   $ 45,522     $ 53,447  

Accrued expenses

     37,312       51,686  

Accrued payroll and incentives

     9,629       21,174  

Accrued income taxes

     230       726  

Accrued profit sharing

     2,605       13,004  

Accrued warranty

     5,170       4,908  

Current portion of notes and loans payable

     81,300       6,300  
  

 

 

   

 

 

 

Total current liabilities

     181,768       151,245  

Deferred income taxes

     21,334       25,620  

Notes and loans payable, net of current portion

     207,992       210,657  

Other non-current liabilities

     7,738       7,352  
  

 

 

   

 

 

 

Total liabilities

     418,832       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, 72,280,952 shares issued and 54,114,090 shares outstanding on October 31, 2017 and 72,017,288 shares issued and 53,850,426 shares outstanding on April 30, 2017

     72       72  

Additional paid-in capital

     248,918       245,865  

Retained earnings

     370,231       369,164  

Accumulated other comprehensive income

     585       436  

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

     (222,375     (222,375
  

 

 

   

 

 

 

Total stockholders’ equity

     397,431       393,162  
  

 

 

   

 

 

 
   $ 816,263     $ 788,036  
  

 

 

   

 

 

 

 

Page 5 of 9


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     For the Six Months Ended  
     October 31, 2017     October 31, 2016  
     (In thousands)  

Cash flows from operating activities:

    

Net income

   $ 1,067     $ 67,706  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     26,317       23,772  

Loss on sale/disposition of assets

     34       104  

Provision for losses on accounts receivable

     354       308  

Change in contingent consideration

     (1,300     —    

Stock-based compensation expense

     4,179       3,918  

Changes in operating assets and liabilities (net effect of acquisitions):

    

Accounts receivable

     27,112       (3,538

Inventories

     (42,581     (14,349

Prepaid expenses and other current assets

     (1,362     (2,775

Income taxes

     (1,133     (9,676

Accounts payable

     (8,725     1,111  

Accrued payroll and incentives

     (11,640     (4,728

Accrued profit sharing

     (10,399     (4,699

Accrued expenses

     (13,084     4,235  

Accrued warranty

     262       116  

Other assets

     (362     (183

Other non-current liabilities

     609       52  
  

 

 

   

 

 

 

Net cash (used in)/provided by operating activities

     (30,652     61,374  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Acquisition of businesses, net of cash acquired

     (23,016     (178,059

Refunds on machinery and equipment

     —         5,083  

Receipts from note receivable

     —         43  

Payments to acquire patents and software

     (254     (425

Proceeds from sale of property and equipment

     6       —    

Payments to acquire property and equipment

     (9,863     (23,312
  

 

 

   

 

 

 

Net cash used in investing activities

     (33,127     (196,670
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from loans and notes payable

     75,000       50,000  

Cash paid for debt issuance costs

     —         (525

Payments on capital lease obligation

     (323     (298

Payments on notes and loans payable

     (3,150     (28,150

Proceeds from Economic Development Incentive Program

     —         101  

Proceeds from exercise of options to acquire common stock, including employee stock purchase plan

     1,058       948  

Payment of employee withholding tax related to restricted stock units

     (2,184     (4,163
  

 

 

   

 

 

 

Net cash provided by financing activities

     70,401       17,913  
  

 

 

   

 

 

 

Net increase/(decrease) in cash and cash equivalents

     6,622       (117,383

Cash and cash equivalents, beginning of period

     61,549       191,279  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 68,171     $ 73,896  
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid for:

    

Interest

   $ 4,844     $ 3,802  

Income taxes

     1,257       42,609  

 

Page 6 of 9


RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share data)

(Unaudited)

 

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

GAAP gross profit

  $ 50,799       34.2   $ 97,605       41.8   $ 91,431       33.0   $ 185,174       42.0

Fair value inventory step-up and backlog expense

    91       0.1     3,824       1.6     91       0.0     3,824       0.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

  $ 50,890       34.3   $ 101,429       43.4   $ 91,522       33.0   $ 188,998       42.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating expenses

  $ 42,810       28.8   $ 45,454       19.5   $ 86,642       31.2   $ 80,498       18.3

Amortization of acquired intangible assets

    (4,268     -2.9     (4,566     -2.0     (9,953     -3.6     (7,110     -1.6

Transition costs

    (79     -0.1     —         —         (391     -0.1     —         —    

Discontinued operations

    —         —         (23     0.0     —         —         (44     0.0

Acquisition-related costs

    (259     -0.2     (1,824     -0.8     (676     -0.2     (3,156     -0.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

  $ 38,204       25.7   $ 39,041       16.7   $ 75,622       27.3   $ 70,188       15.9
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income

  $ 7,989       5.4   $ 52,151       22.3   $ 4,789       1.7   $ 104,676       23.8

Fair value inventory step-up and backlog expense

    91       0.1     3,824       1.6     91       0.0     3,824       0.9

Amortization of acquired intangible assets

    4,268       2.9     4,566       2.0     9,953       3.6     7,110       1.6

Transition costs

    79       0.1     —         —         391       0.1     —         —    

Discontinued operations

    —         —         23       0.0     —         —         44       0.0

Acquisition-related costs

    259       0.2     1,824       0.8     676       0.2     3,156       0.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

  $ 12,686       8.5   $ 62,388       26.7   $ 15,900       5.7   $ 118,810       27.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income

  $ 3,234       2.2   $ 32,483       13.9   $ 1,067       0.4   $ 67,706       15.4

Fair value inventory step-up and backlog expense

    91       0.1     3,824       1.6     91       0.0     3,824       0.9

Amortization of acquired intangible assets

    4,268       2.9     4,566       2.0     9,953       3.6     7,110       1.6

Transition costs

    79       0.1     —         —         391       0.1     —         —    

Discontinued operations

    —         —         23       0.0     —         —         44       0.0

Acquisition-related costs

    259       0.2     1,824       0.8     676       0.2     3,156       0.7

Change in contingent consideration

    —         —         —         —         (1,300     -0.5     —         —    

Tax effect of non-GAAP adjustments

    (1,672     -1.1     (3,583     -1.5     (3,532     -1.3     (4,611     -1.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

  $ 6,259       4.2   $ 39,137       16.8   $ 7,346       2.6   $ 77,229       17.5
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income per share - diluted

  $ 0.06       $ 0.57       $ 0.02       $ 1.18    

Fair value inventory step-up and backlog expense

    —           0.07         —           0.07    

Amortization of acquired intangible assets

    0.08         0.08         0.18         0.12    

Transition costs

    —           —           0.01         —      

Discontinued operations

    —           —           —           —      

Acquisition-related costs

    —           0.03         0.01         0.06    

Change in contingent consideration

    —           —           (0.02       —      

Tax effect of non-GAAP adjustments

    (0.03       (0.06       (0.06       (0.08  
 

 

 

     

 

 

     

 

 

     

 

 

   

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

  $ 0.11       $ 0.68 (a)      $ 0.13 (a)      $ 1.35    
 

 

 

     

 

 

     

 

 

     

 

 

   

 

(a)

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

 

Page 7 of 9


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET OPERATING CASH FLOW TO FREE CASH FLOW

(In thousands)

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     October 31, 2017     October 31, 2016     October 31, 2017     October 31, 2016  

Net cash (used in)/provided by operating activities

   $ 3,840     $ 20,764     $ (30,652   $ 61,374  

Net cash used in investing activities

     (28,339     (185,555     (33,127     (196,670

Acquisition of businesses, net of cash acquired

     23,016       178,059       23,016       178,059  

Receipts from note receivable

     —         (22     —         (43
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ (1,483   $ 13,246     $ (40,763   $ 42,720  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 8 of 9


AMERICAN OUTDOOR BRANDS CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDAS

(in thousands)

(Unaudited)

 

     For the Three Months Ended      For the Six Months Ended  
     October 31, 2017      October 31, 2016      October 31, 2017     October 31, 2016  

GAAP net income

   $ 3,234      $ 32,483      $ 1,067     $ 67,706  

Interest expense

     3,033        2,313        5,423       4,367  

Income tax expense/(benefit)

     1,789        17,463        (337     32,752  

Depreciation and amortization

     12,304        12,384        25,831       22,488  

Stock-based compensation expense

     2,289        2,126        4,179       3,918  

Fair value inventory step-up and backlog expense

     91        3,824        91       3,824  

Acquisition-related costs

     259        1,824        676       3,156  

Discontinued operations

     —          23        —         44  

Transition costs

     79        —          391       —    

Change in contingent consideration

     —          —          (1,300     —    
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP Adjusted EBITDAS

   $ 23,078      $ 72,440      $ 36,021     $ 138,255  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

Page 9 of 9

Categories

SEC Filings