American Outdoor Brands (AOUT) 4th quarter 2021 earnings report review
Category: American Outdoor Brands (AOUT)
Date: 16 July 2021 Stock price of American Outdoor Brands: $35.93 Market Capital of American Outdoor Brands:$503 million We take a look at the 4th quarter 2021 earnings report of American Outdoor Brands (AOUT) a provider of outdoor products and accessories for activities such as hunting, fishing and camping. For the quarter the group reported net sales of $64.5 million and net income of $1.2 million
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Brian Murphy, President and CEO - Fiscal 2021 was a historic year for our company. With the completion of our spin-off in August 2020, we became an independent public company dedicated to building authentic, lifestyle brands that help consumers make the most out of the moments that matter"
More About American Outdoor Brands (AOUT)
American Outdoor Brands, Inc. (NASDAQ Global Select: AOUT) is an industry leading provider of outdoor products and accessories, including hunting, fishing, camping, shooting, and personal security and defense products, for rugged outdoor enthusiasts. The company produces innovative, top quality products under the brands Caldwell®; Crimson Trace®; Wheeler®; Tipton®; Frankford Arsenal®; Lockdown®; BOG®; Hooyman®; Smith & Wesson® Accessories; M&P® Accessories; Thompson/Center Arms™ Accessories; Performance Center® Accessories; Schrade®; Old Timer®; Uncle Henry®; Imperial®; BUBBA®; UST®; LaserLyte®; and MEAT!
Overview of American Outdoor Brands (AOUT) 4th quarter 2021 earnings
Fourth Quarter Fiscal 2021 Financial Highlights
- Quarterly net sales were $64.5 million, an increase of $21.4 million, or 49.6%, over net sales of $43.1 million for the comparable quarter last year, reflecting increases in both e-commerce and traditional sales channels.
- Quarterly gross margin was 44.4%, even with gross margin of 44.4% for the comparable quarter last year.
- Quarterly net income was $1.2 million, or $0.09 per diluted share, compared with a net loss $90.7 million, or ($6.49) per diluted share, for the comparable quarter last year. In the fourth quarter of last year, the company expected to be negatively impacted by several factors related to the COVID-19 pandemic, which constituted a triggering event that required the company to take a $98.9 million non-cash goodwill impairment charge.
- Quarterly non-GAAP net income was $4.9 million, or $0.34 per diluted share, compared with a non-GAAP net loss of $123,000, or ($0.01) per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for net income exclude a non-cash impairment of goodwill in the prior year, acquired intangible amortization, stock compensation, transition costs, COVID-19 expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.
- Quarterly Adjusted EBITDAS was $7.0 million, or 10.8% of net sales, compared with $3.1 million, or 7.3% of net sales, for the comparable quarter last year. For a detailed reconciliation, see the schedules that follow in this release.
American Outdoor Brands management commentary on their 4th quarter 2020 earnings
Brian Murphy, President and CEO, said, "Fiscal 2021 was a historic year for our company. With the completion of our spin-off in August 2020, we became an independent public company dedicated to building authentic, lifestyle brands that help consumers make the most out of the moments that matter. We believe that sharing our passion for creating brands and products that allow people to pursue their outdoor adventures was especially timely, as consumers increasingly looked to outdoor activities, such as fishing, hunting, shooting sports, camping, and hiking, in response to travel restrictions and social distancing, and as they continued to demonstrate an increased interest in self-protection. Some people turned to these activities for the very first time, and others for the first time in a long time. Regardless, we are pleased and proud that so many of them took our brands along on their journey. We are also extremely proud of our employees, whose loyalty, hard work, and dedication helped us to establish our new company, service our customers with continuity, and deliver outstanding results, despite a year of unprecedented uncertainty driven by the pandemic. We thank you."
Net sales grew more than 65% and represented products from across the company's four brand lanes – Marksman, Defender, Harvester, and Adventurer. "While our brands clearly aligned well with strong consumer participation trends in personal protection and the outdoor lifestyle activities we serve, we also believe that our 'Dock & UnlockTM' strategy, designed to provide entry into new and larger addressable markets, helped drive our strong results. We believe fiscal 2021 ushered in a new era for the outdoor industry, one that welcomed many new participants who, we believe, will continue to explore the outdoors in the future. We are poised to build upon our foundation as we set our sights on future growth and take our brands from 'Niche to KnownTM'," concluded Murphy.
Andrew Fulmer, Chief Financial Officer, said, "Our financial results for fiscal 2021, which represents our first year as an independent public company, are a success by any measure. We have established a business structure that not only drove product innovation and record net sales, but one that allowed us to generate strong profits as we continued to build a balance sheet capable of supporting our future growth initiatives. Our Adjusted EBITDAS of $47.3 million for fiscal 2021, represented growth of nearly 300% versus the prior year, and reflected the benefit of investments we initiated in our e-commerce and logistics capabilities long before our spin-off. We generated free cash flow of over $29.0 million in fiscal 2021, and ended the year with cash of $60.8 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 $125.0 million in available capital to support our organic growth and potential future acquisitions. Lastly, we are providing our guidance for fiscal 2022, which began May 1, 2021."
Net sales grew more than 65% and represented products from across the company's four brand lanes – Marksman, Defender, Harvester, and Adventurer. "While our brands clearly aligned well with strong consumer participation trends in personal protection and the outdoor lifestyle activities we serve, we also believe that our 'Dock & UnlockTM' strategy, designed to provide entry into new and larger addressable markets, helped drive our strong results. We believe fiscal 2021 ushered in a new era for the outdoor industry, one that welcomed many new participants who, we believe, will continue to explore the outdoors in the future. We are poised to build upon our foundation as we set our sights on future growth and take our brands from 'Niche to KnownTM'," concluded Murphy.
Andrew Fulmer, Chief Financial Officer, said, "Our financial results for fiscal 2021, which represents our first year as an independent public company, are a success by any measure. We have established a business structure that not only drove product innovation and record net sales, but one that allowed us to generate strong profits as we continued to build a balance sheet capable of supporting our future growth initiatives. Our Adjusted EBITDAS of $47.3 million for fiscal 2021, represented growth of nearly 300% versus the prior year, and reflected the benefit of investments we initiated in our e-commerce and logistics capabilities long before our spin-off. We generated free cash flow of over $29.0 million in fiscal 2021, and ended the year with cash of $60.8 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 $125.0 million in available capital to support our organic growth and potential future acquisitions. Lastly, we are providing our guidance for fiscal 2022, which began May 1, 2021."
- Net sales (in thousands) : $280,000 -$ 295,000
- GAAP income per share - diluted: $1.00 - $1.24
- Non-GAAP income per share - diluted: $2.02 - $2.26
- Non-GAAP Adjusted EBITDAS (in thousands): $42,000 - $47,00
American Outdoor Brands (AOUT) stock price chart since their listing
The image below shows the stock price history of American Outdoor Brands (AOUT) since its listing. And its been a good time for American Outdoor Brands (AOU) stockholders with the stock increasing sharply by 131.8% since its listing
The stock of American Outdoor Brands is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of American Outdoor Brands stock is positive at this point in time.
The stock of American Outdoor Brands is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of American Outdoor Brands stock is positive at this point in time.
Latest stock valuation of American Outdroor Brands
So what is American Outdoor Brands (AOUT) stock worth based on their 4th quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for American Outdoor Brands at $33.70 a stock
We therefore believe the stock of American Outdoor Brands is overvalued at its current price of $35.93
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $33.70, thus a good entry point into American Outdoor Brands would be at $30.30 or below.
We expect the stock of American Outdoor Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued.
Based on all of th above we rate the stock of American Outdoor Brands as a sell
We therefore believe the stock of American Outdoor Brands is overvalued at its current price of $35.93
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $33.70, thus a good entry point into American Outdoor Brands would be at $30.30 or below.
We expect the stock of American Outdoor Brands to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued.
Based on all of th above we rate the stock of American Outdoor Brands as a sell
Next earnings release of American Outdoor Brands (AOUT)
It is expected that American Outdoor Brands will release their 1st quarter 2022 earnings report in late October 2021
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