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Category: Stock Market and American Outdoor
Date: 1 September 2019 Stock Price: $6.01 We take a look at the 1st quarter earnings report of their 2020 fiscal year of American Outdoor Brands Corporation, the owner of gun maker Smith & Wesson.
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About American Outdoor Brands Corporation
At American Outdoor Brands, we are proud to deliver some of the most popular consumer names in shooting, hunting and the rugged outdoors, all under our Smith & Wesson, Battenfeld Technologies, and Crimson Trace companies. Whether firearms, electro-optics, accessories or manufacturing services, we remain committed to creating, preserving and growing strong brands and products that best meet the needs and lifestyle of shooters, hunters, and rugged outdoor enthusiasts.
We are dedicated to creating, growing, and preserving strong consumer brands that deliver innovative and high-quality products. Our efforts focus on meeting the needs of consumers who have a passion for the adventure, freedom, and personal inspiration offered by embracing the great outdoors.
With more than 18 highly respected consumer brands -- and growing -- we are well positioned to serve the large outdoor lifestyle products market opportunity. As a result, on January 1, 2017, we changed the name of our holding company to ‘American Outdoor Brands Corporation’. We believe this name represents our enhanced strategic direction, our broad range of product offerings, and our plan to continue building upon our portfolio of strong American brands. American Outdoor Brands Corporation serves as the holding company for the historic Smith & Wesson Corp., Battenfeld Technologies, Inc., and Crimson Trace Corporation
We have only just begun our journey toward achieving our vision of being the leading provider of high-quality products for the shooting, hunting, and rugged outdoor enthusiast. This large and growing market is populated by active lifestyle consumers who pursue their activities with passion and seek out brands they can trust. With a track record of creating, preserving, and acquiring respected brands, we remain committed to our future growth -- focusing on brands that best support the needs and lifestyle of our valued customers.
We are dedicated to creating, growing, and preserving strong consumer brands that deliver innovative and high-quality products. Our efforts focus on meeting the needs of consumers who have a passion for the adventure, freedom, and personal inspiration offered by embracing the great outdoors.
With more than 18 highly respected consumer brands -- and growing -- we are well positioned to serve the large outdoor lifestyle products market opportunity. As a result, on January 1, 2017, we changed the name of our holding company to ‘American Outdoor Brands Corporation’. We believe this name represents our enhanced strategic direction, our broad range of product offerings, and our plan to continue building upon our portfolio of strong American brands. American Outdoor Brands Corporation serves as the holding company for the historic Smith & Wesson Corp., Battenfeld Technologies, Inc., and Crimson Trace Corporation
We have only just begun our journey toward achieving our vision of being the leading provider of high-quality products for the shooting, hunting, and rugged outdoor enthusiast. This large and growing market is populated by active lifestyle consumers who pursue their activities with passion and seek out brands they can trust. With a track record of creating, preserving, and acquiring respected brands, we remain committed to our future growth -- focusing on brands that best support the needs and lifestyle of our valued customers.
Financial overview of American Outdoor Brands' latest earnings report
The numbers we are interested in (for the quarter)
- Net sales: $ 123.665 million ($138.833 million for the same quarter of the previous year)
- Cost of sales: $75.811 million ($86.411 million for the same quarter of the previous year)
- Gross profit: $47,854 ($52.422 million for the same quarter of the previous year)
- Net loss: -$2.108 million ($7.645 million for the same quarter of the previous year)
- Diluted earnings per share: -$0.04
- Diluted number of shares outstanding: 54.783 million
- Cash and cash equivalents: $30.732 million
- Cash and cash equivalents per share: $0.56
- Cash and cash equivalents makes up 9.3% of the group's current market capital
- Cash and cash equivalents per share: $0.56
- Accounts receivable, net :$70.242 million
- Accounts receivable makes up 9.06% of the group's total assets
- Accounts receivable makes up 9.06% of the group's total assets
- Inventories: $195.448 million
- Inventories makes up 25.3% of the group's total assets
- Inventories makes up 25.3% of the group's total assets
- Total stockholders' equity: $443.058 million
- Stockholders equity per share: $8.08
American Outdoor Brands management commentary on the results and earnings guidance
James Debney, American Outdoor Brands Corporation President and Chief Executive Officer, commented, "Our results for the first quarter reflected our ability to remain focused on executing our strategic plan, while addressing the challenges of ongoing softness in the firearms market. During the quarter, we achieved significant milestones at our new Missouri Campus, which houses our Logistics & Customer Services Division and Outdoor Products & Accessories Division, and serves as the centralized logistics, warehousing, and distribution operation for our entire business. Those milestones included the successful transfer of our entire firearms shipping operations to the new facility, as well as the consolidation and subsequent shuttering of our Jacksonville, Florida business. Our Missouri Campus is an important strategic initiative that will ultimately allow us to lower our costs, better serve our customers, and achieve our objective to be the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast."
Jeff Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, commented, "At the end of the quarter, our balance sheet remained strong with cash of $30.7 million and total net borrowings of $149.1 million dollars. That, combined with our twelve-month trailing EBITDAS, translates to a net leverage ratio of just 1.5."
Jeff Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer, commented, "At the end of the quarter, our balance sheet remained strong with cash of $30.7 million and total net borrowings of $149.1 million dollars. That, combined with our twelve-month trailing EBITDAS, translates to a net leverage ratio of just 1.5."
American Outdoor Brands Corporation (NASDAQ: AOBC) stock price history
The image below, obtained from Google, shows the 5 year stock price history of American Outdoor Brands. And its been a sorry tale for the group's shareholders over the last three years. The stock price surged strongly from 2015 levels of around $10 all the way to around $30 towards the start of 2016 and again in the middle of 2016. But since then the group's stock price has declined significantly to the current levels of around $6 a share. It has lost almost 50% of its value over the last 5 years.
American Outdoor Brands Corporation (NASDAQ: AOBC) latest stock valuation
So based on the group's latest earnings report, their subdued earnings forecast and the soft market for guns as the group themselves acknowledged what do we value the company's stock at right now? We value the group's stock at $14.20 a share. So we do believe the current stock price weakness provides a good entry point for long term fundamental investors looking for a value buy while playing the long waiting game. At the group's current price you are paying less per stock than the equity per share. This has to be attractive for potential investors.