American Outdoor Brands Inc. reported net sales were $82.6 million in the third quarter ended January 31, an increase of 90.7 percent, over net sales of $43.3 million for the comparable quarter last year, reflecting increases in both e-commerce and traditional sales channels.
Quarterly gross margin was 45.2 percent, an increase of 110 basis points, over gross margin of 44.1 percent for the comparable quarter last year.
Quarterly net income was $8.0 million, or 56 cents per diluted share, compared with a net loss $147,000, or (1 cent) per diluted share, for the comparable quarter last year.
Quarterly non-GAAP net income was $11.8 million, or 82 cents per diluted share, compared with a non-GAAP net income of $1.8 million, or 13 cents per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude costs related to acquired intangible amortization, stock compensation, transition costs, COVID-19 expenses, and other costs.
Quarterly adjusted EBITDAS was $15.8 million, or 19.1 percent of net sales, compared with $3.4 million, or 7.9 percent of net sales, for the comparable quarter last year.
Brian Murphy, president and CEO, said, “Net sales across our portfolio of authentic outdoor brands grew by 91 percent, exceeding our expectations for quarterly net sales and net income. In addition, gross margins expanded by 110 basis points to over 45 percent. Growth occurred in nearly all of our 20 brands, and our top selling products in the quarter came from each of our four brand lanes—the Marksman, Defender, Harvester, and Adventurer—reflecting the alignment of our brands with strong consumer participation trends in personal protection and the outdoor lifestyle activities we serve. We believe that our ‘Dock & Unlock strategy, designed to provide entry into new and larger addressable markets, continues to produce results as our brands progress along with their transition from ‘Niche to Known’.”
Andrew Fulmer, chief financial officer, said, “Our Adjusted EBITDAS of $15.8 million represented growth of nearly 360 percent versus the year-ago quarter. We believe this result demonstrated our highly leverageable platform, which is made possible by our earlier investments in our e-commerce and logistics capabilities. Turning to the balance sheet, cash flow generated by operating activities was strong, increasing to $12.6 million for the quarter, compared with $1.2 million for the comparable quarter last year. We ended the current quarter with cash of $45.5 million and no borrowings on our $50.0 million senior secured credit facility, which is expandable by an additional $15.0 million under certain conditions. This means that we now have over $110.0 million in available capital to support our organic growth and potential future acquisitions. Lastly, based on our results for the quarter and our outlook we are increasing our guidance for the balance of fiscal 2021, which ends on April 30, 2021.”