American Outdoor Brands, Inc. Reports First Quarter Fiscal 2025 Financial Results
• Net Sales
• GAAP Gross Margin 45.4%
• Traditional Channel Sales
• E-C
ommerce Channel Sales
• International
First Quarter Fiscal 2025 Financial Highlights
- Quarterly net sales were
$41.6 million , a decrease of$1.8 million , or 4.1%, compared with net sales of$43.4 million for the prior year. - Quarterly gross margin was 45.4%, consistent with quarterly gross margin of 45.4% for the comparable quarter last year. Non-GAAP gross margin for the quarter was 46.0%. For a detailed reconciliation, see the schedules that follow in this release.
- Quarterly GAAP net loss was
$2.4 million , or ($0.18 ) per diluted share, compared with a GAAP net loss of$4.1 million , or ($0.31 ) per diluted share, last year. - Quarterly non-GAAP net income was
$748,000 or$0.06 per diluted share, compared with non-GAAP net income of$98,000 , or$0.01 per diluted share, last year. GAAP to non-GAAP adjustments for net income exclude acquired intangible amortization, stock compensation, non-recurring inventory reserve costs, technology implementation, and other costs. For a detailed reconciliation, see the schedules that follow in this release. - Quarterly Adjusted EBITDAS was
$2.0 million , or 4.8% of net sales, compared with Adjusted EBITDAS of$1.1 million , or 2.6% of net sales, for the prior year. For a detailed reconciliation, see the schedules that follow in this release.
"Innovation allows us to forge strong relationships with our consumers and retailers and expand our access to new markets. New products launched within the past 24 months generated 23% of our net sales in the first quarter. In Outdoor Lifestyle, new products from our BOG and BUBBA brands, including our Smart Fish Scale, delivered strong hunting and fishing performance and helped to largely offset softness in outdoor cooking and rugged outdoor.
"Expanded distribution opportunities are also a key part of our growth strategy and during the quarter we remained focused on ensuring our brands are increasingly accessible to a broad audience of consumers, both domestically and internationally. Accordingly, our efforts to introduce more of our brands to Canadian consumers helped deliver international net sales of
Conference Call and Webcast
The Company will host a conference call and webcast today,
Reconciliation of
In this press release, certain non-GAAP financial measures, including "non-GAAP net income" and "Adjusted EBITDAS" are presented. A reconciliation of these and other non-GAAP financial measures are contained at the end of this press release. From time to time, the Company considers and uses these non-GAAP financial measures as 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) stock compensation, (iii) technology implementation, (iv) non-recurring inventory reserve adjustment, (v) emerging growth status transition costs, (vi) income tax adjustments, (vii) interest (income)/expense, (viii) income tax expense, and (xi) depreciation and amortization; 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 and believes the disclosure of such measures provides useful information to investors regarding the Company's financial condition and results of operations. 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
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. All statements other than statements of historical facts contained or incorporated herein by reference in this press release, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "anticipates," "believes," "estimates," "expects," "intends," "targets," "contemplates," "projects," "predicts," "may," "might," "plan," "would," "should," "could," "may," "can," "potential," "continue," "objective," or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this press release include our belief in the success of the core to our long-term growth strategy of new product innovation and expanded distribution opportunities; our belief in the resilience of consumer and the future growth in sales of our new products; our belief that our initiatives to drive channel expansion, combined with our robust new product pipeline, will deliver growth in our Outdoor Lifestyle category; and our belief that we remain well positioned to deliver growth in both net sales and profitability in fiscal 2025. 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, potential disruptions in our ability to source the materials necessary for the production of our products, disruptions and delays in the manufacture of our products, and difficulties encountered by retailers and other components of the distribution channel for our products; economic, social, political, legislative, and regulatory factors; lawsuits and their effect on us; inventory levels, both internally and in the distribution channel, in excess of demand; natural disasters, pandemics, seasonality, news events, political events, and consumer tastes; future investments for capital expenditures; future products and product development; the features, quality, and performance of our products; the success of our strategies and marketing programs; our market share and factors that affect our market share; liquidity and anticipated cash needs and availability; the supply, availability, and costs of materials and components and related tariffs; our ability to maintain and enhance brand recognition and reputation; risks associated with the distribution of our products and overall availability of labor; and other factors detailed from time to time in our reports filed with the
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CONSOLIDATED BALANCE SHEETS |
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As of: |
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(In thousands, except par value and share data) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 23,463 |
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$ 29,698 |
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Accounts receivable, net of allowance for credit losses of |
26,346 |
|
25,728 |
|
Inventories |
106,710 |
|
93,315 |
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Prepaid expenses and other current assets |
5,585 |
|
6,410 |
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Income tax receivable |
245 |
|
223 |
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Total current assets |
162,349 |
|
155,374 |
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Property, plant, and equipment, net |
10,992 |
|
11,038 |
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Intangible assets, net |
37,930 |
|
40,217 |
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Right-of-use assets |
33,165 |
|
33,564 |
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Other assets |
354 |
|
404 |
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Total assets |
$ 244,790 |
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$ 240,597 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
$ 18,118 |
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$ 14,198 |
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Accrued expenses |
11,725 |
|
9,687 |
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Accrued payroll and incentives |
4,923 |
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4,167 |
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Lease liabilities, current |
1,359 |
|
1,331 |
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Total current liabilities |
36,125 |
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29,383 |
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Lease liabilities, net of current portion |
32,951 |
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33,289 |
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Total liabilities |
69,076 |
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62,672 |
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Commitments and contingencies |
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Equity: |
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Preferred stock, |
— |
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— |
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Common stock, |
15 |
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15 |
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Additional paid in capital |
277,642 |
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277,107 |
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Retained deficit |
(76,988) |
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(74,623) |
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|
(24,955) |
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(24,574) |
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Total equity |
175,714 |
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177,925 |
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Total liabilities and equity |
$ 244,790 |
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$ 240,597 |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share data) |
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For the Three Months Ended |
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2024 |
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2023 |
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(Unaudited) |
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Net sales |
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$ 41,643 |
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$ 43,445 |
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Cost of sales |
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22,717 |
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23,726 |
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Gross profit |
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18,926 |
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19,719 |
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Operating expenses: |
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Research and development |
|
1,674 |
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1,599 |
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Selling, marketing, and distribution |
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11,383 |
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12,054 |
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General and administrative |
|
8,443 |
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10,151 |
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Total operating expenses |
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21,500 |
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23,804 |
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Operating loss |
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(2,574) |
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(4,085) |
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Other (expense)/income, net: |
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Other income, net |
|
83 |
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39 |
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Interest income/(expense), net |
|
148 |
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(12) |
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Total other (expense)/income, net |
|
231 |
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27 |
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Loss from operations before income taxes |
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(2,343) |
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(4,058) |
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Income tax expense |
|
22 |
|
55 |
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Net loss |
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$ (2,365) |
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$ (4,113) |
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Net loss per share: |
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Basic |
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$ (0.18) |
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$ (0.31) |
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Diluted |
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$ (0.18) |
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$ (0.31) |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(Unaudited) |
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For the Three Months Ended |
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2024 |
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2023 |
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(In thousands) |
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Cash flows from operating activities: |
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Net loss |
$ (2,365) |
|
$ (4,113) |
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Adjustments to reconcile net loss to net cash provided by |
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Depreciation and amortization |
3,309 |
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3,969 |
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Provision for credit losses on accounts receivable |
(19) |
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6 |
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Stock-based compensation expense |
932 |
|
932 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
(599) |
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3,268 |
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Inventories |
(13,395) |
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(5,179) |
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Accounts payable |
4,073 |
|
4,115 |
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Accrued liabilities |
2,794 |
|
2,122 |
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Other |
918 |
|
45 |
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Net cash (used in)/provided by operating activities |
(4,352) |
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5,165 |
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Cash flows from investing activities: |
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Payments to acquire patents and software |
(261) |
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(267) |
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Payments to acquire property and equipment |
(844) |
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(569) |
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Net cash used in investing activities |
(1,105) |
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(836) |
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Cash flows from financing activities: |
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Payments on notes and loans payable |
— |
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(5,000) |
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Payments to acquire treasury stock |
(381) |
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(2,268) |
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Payment of employee withholding tax related to restricted stock units |
(397) |
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(300) |
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Net cash used in financing activities |
(778) |
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(7,568) |
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Net increase in cash and cash equivalents |
(6,235) |
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(3,239) |
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Cash and cash equivalents, beginning of period |
29,698 |
|
21,950 |
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Cash and cash equivalents, end of period |
$ 23,463 |
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$ 18,711 |
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Supplemental disclosure of cash flow information |
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Cash paid for: |
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Interest |
$ 42 |
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$ 117 |
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Income taxes (net of refunds) |
$ 36 |
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$ 13 |
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For the Three Months Ended |
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2024 |
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2023 |
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GAAP gross profit |
$ 18,926 |
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$ 19,719 |
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Non-recurring inventory reserve adjustment |
221 |
|
— |
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Non-GAAP gross profit |
$ 19,147 |
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$ 19,719 |
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GAAP operating expenses |
$ 21,500 |
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$ 23,804 |
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Amortization of acquired intangible assets |
(2,119) |
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(2,960) |
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Stock compensation |
(932) |
|
(932) |
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Technology implementation |
— |
|
(293) |
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Emerging growth status transition costs |
(42) |
|
— |
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Non-GAAP operating expenses |
$ 18,407 |
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$ 19,619 |
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|
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GAAP operating loss |
$ (2,574) |
|
$ (4,085) |
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Amortization of acquired intangible assets |
2,119 |
|
2,960 |
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Stock compensation |
932 |
|
932 |
|
Non-recurring inventory reserve adjustment |
221 |
|
— |
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Technology implementation |
— |
|
293 |
|
Emerging growth status transition costs |
42 |
|
— |
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Non-GAAP operating income |
$ 740 |
|
$ 100 |
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GAAP net loss |
$ (2,365) |
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$ (4,113) |
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Amortization of acquired intangible assets |
2,119 |
|
2,960 |
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Stock compensation |
932 |
|
932 |
|
Non-recurring inventory reserve adjustment |
221 |
|
— |
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Technology implementation |
— |
|
293 |
|
Emerging growth status transition costs |
42 |
|
— |
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Income tax adjustments |
(201) |
|
26 |
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Non-GAAP net income |
$ 748 |
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$ 98 |
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GAAP net loss per share - diluted |
$ (0.18) |
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$ (0.31) |
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Amortization of acquired intangible assets |
0.16 |
|
0.22 |
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Stock compensation |
0.07 |
|
0.07 |
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Non-recurring inventory reserve adjustment |
0.02 |
|
— |
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Technology implementation |
— |
|
0.02 |
|
Emerging growth status transition costs |
— |
|
— |
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Income tax adjustments |
(0.02) |
|
— |
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Non-GAAP net income per share - diluted (a) |
$ 0.06 |
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$ 0.01 |
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(a) Non-GAAP net income per share does not foot due to rounding. |
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RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDAS
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For the Three Months Ended |
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2024 |
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2023 |
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GAAP net loss |
$ |
(2,365) |
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$ |
(4,113) |
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Interest (income)/expense |
|
(148) |
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|
12 |
|
Income tax expense |
|
22 |
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|
55 |
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Depreciation and amortization |
|
3,284 |
|
|
3,945 |
|
Stock compensation |
|
932 |
|
|
932 |
|
Technology implementation |
|
— |
|
|
293 |
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Non-recurring inventory reserve adjustment |
|
221 |
|
|
— |
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Emerging growth status transition costs |
|
42 |
|
|
— |
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Non-GAAP Adjusted EBITDAS |
$ |
1,988 |
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$ |
1,124 |
Contact:
lsharp@aob.com
(573) 303-4620
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