# American Outdoor Brands, Inc.: Form 10-Q for the period ended Jan 31, 2025

- Company: [American Outdoor Brands, Inc.](/companies/aout.md) (CIK 1808997)
- Form: 10-Q
- Filed: 2025-03-06
- Accepted by EDGAR: Mar 6, 2025, 21:15 ET
- Period: 2025-01-31
- Accession: 0000950170-25-034660
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1808997/000095017025034660/aout-20250131.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1808997/000095017025034660/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-01-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-11-01 to 2025-01-31 | $58.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-05-01 to 2025-01-31 | $160.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-11-01 to 2025-01-31 | $32.4m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-05-01 to 2025-01-31 | $86.4m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-11-01 to 2025-01-31 | $26.1m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-05-01 to 2025-01-31 | $74.0m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-11-01 to 2025-01-31 | $1.9m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-05-01 to 2025-01-31 | $5.5m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-11-01 to 2025-01-31 | $303.0k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-05-01 to 2025-01-31 | $799.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-11-01 to 2025-01-31 | $58.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-05-01 to 2025-01-31 | $92.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-11-01 to 2025-01-31 | $169.0k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-05-01 to 2025-01-31 | $915.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-11-01 to 2025-01-31 | $0.01 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-05-01 to 2025-01-31 | $0.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-11-01 to 2025-01-31 | $0.01 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-05-01 to 2025-01-31 | $0.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-11-01 to 2025-01-31 | 13,124,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-05-01 to 2025-01-31 | 13,215,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-05-01 to 2025-01-31 | −$6.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-05-01 to 2025-01-31 | $2.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 9 months, 2024-05-01 to 2025-01-31 | $2.6m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-01-31 | $17.1m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-01-31 | $168.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-01-31 | $245.9m | us-gaap:Assets |
| Current liabilities | at 2025-01-31 | $34.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-01-31 | $67.2m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-01-31 | $178.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 26,129 characters.

### Overview

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended January 31, 2025 and 2024 should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year ended April 30, 2024. This discussion and analysis should also be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.

The following discussion and analysis includes forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to these differences include those discussed above in “Statement Regarding Forward-Looking Information” in this Form 10-Q. In addition, this section sets forth key objectives and performance indicators used by us, as well as key industry data tracked by us.

The following discussion and analysis includes references to net sales of our products in shooting sports and outdoor lifestyle categories. Our shooting sports category includes net sales of shooting accessories and our products used for personal protection. Our outdoor lifestyle category includes net sales of our products used in hunting, fishing, camping, rugged outdoor activities, and outdoor cooking.

### Third Quarter Fiscal 2025 Highlights

Our operating results for the three months ended January 31, 2025 included the following:

- Net sales were $58.5 million, an increase of $5.1 million or 9.5%, over the comparable quarter last year, primarily because of increased net sales in our outdoor lifestyle category.
- Gross margin was 44.7%, an increase of 200 basis points, over the comparable quarter last year.
- Net income was $169,000, or $0.01 per diluted share, compared with a net loss of $2.9 million, or $0.23 per diluted share, for the comparable quarter last year.
- Non-GAAP Adjusted EBITDAS was $4.7 million for the three months ended January 31, 2025 compared with $2.4 million for the three months ended January 31, 2024. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDAS.

Our operating results for the nine months ended January 31, 2025 included the following:

- Net sales were $160.4 million, an increase of $5.6 million, or 3.6%, over the prior year comparable period, primarily because of increased net sales in our outdoor lifestyle category.
- Gross margin was 46.1%, an increase of 150 basis points, over the prior year comparable period.
- Net income was $915,000, or $0.07 per diluted share, compared with a net loss of $6.9 million, or $0.53 per diluted share, for the prior year comparable period.
- Non-GAAP Adjusted EBITDAS was $14.2 million for the nine months ended January 31, 2025 compared with $8.7 million for the nine months ended January 31, 2025. See non-GAAP financial measure disclosures below for our reconciliation of non-GAAP Adjusted EBITDAS.

### Results of Operations

### Net Sales and Gross Profit

The following table sets forth certain information regarding consolidated net sales and gross profit for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $58,505 | $53,425 | $5,080 | 9.5% |
| Cost of sales | 32,382 | 30,591 | 1,791 | 5.9% |
| Gross profit | $26,123 | $22,834 | $3,289 | 14.4% |
| % of net sales (gross margin) | 44.7% | 42.7% |  |  |

The following table sets forth certain information regarding trade channel net sales for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| e-commerce channels net sales | $27,234 | $24,881 | $2,353 | 9.5% |
| Traditional channels net sales | 31,271 | 28,544 | 2,727 | 9.6% |
| Total net sales | $58,505 | $53,425 | $5,080 | 9.5% |

Our e-commerce channels include net sales from customers that do not traditionally operate physical brick-and-mortar stores, but generate the majority of their revenue from consumer purchases from their retail websites. Our e-commerce channels also include our direct-to-consumer sales. Our traditional channels include customers that primarily operate out of physical brick-and-mortar stores and generate the large majority of revenue from consumer purchases in their brick-and-mortar locations. We sell our products worldwide.

The following table sets forth certain information regarding geographic makeup of net sales included in the above table for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Domestic net sales | $56,172 | $51,006 | $5,166 | 10.1% |
| International net sales | 2,333 | 2,419 | (86) | -3.6% |
| Total net sales | $58,505 | $53,425 | $5,080 | 9.5% |

The following table sets forth certain information regarding net sales categories for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Shooting sports net sales | $24,997 | $24,306 | $691 | 2.8% |
| Outdoor lifestyle net sales | 33,508 | 29,119 | 4,389 | 15.1% |
| Total net sales | $58,505 | $53,425 | $5,080 | 9.5% |

For the three months ended January 31, 2025, total net sales increased $5.1 million, or 9.5%, over the comparable quarter last year primarily because of an increase in hunting and rugged outdoor product net sales in our domestic channel.

Net sales in our e-commerce channel increased $2.4 million, or 9.5%, over the comparable quarter last year, primarily because of increased net sales to the world's largest online retailer and from direct-to-consumer net sales on our websites. E-commerce channel net sales increased primarily because of higher net sales of rugged outdoor and hunting products in our outdoor lifestyle category as well as increased shooting accessories net sales in our shooting sports category, partially offset by lower personal protection net sales.

Net sales in our traditional channels increased $2.7 million, or 9.6%, over the comparable quarter last year. Traditional channel net sales increased primarily because of higher net sales of rugged outdoor and hunting products net sales in our outdoor lifestyle category as well as increased personal protection product net sales in our shooting sports category.

New products, which we define as any SKU introduced over the prior two fiscal years, represented 18.1% of net sales for the three months ended January 31, 2025.

Gross margin for the three months ended January 31, 2025 increased 200 basis points over the comparable quarter last year, primarily because of higher sales volumes and lower inbound freight costs, partially offset by increased promotional product discounts.

The following table sets forth certain information regarding consolidated net sales and gross profit for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $160,380 | $154,801 | $5,579 | 3.6% |
| Cost of sales | 86,425 | 85,758 | 667 | 0.8% |
| Gross profit | $73,955 | $69,043 | $4,912 | 7.1% |
| % of net sales (gross margin) | 46.1% | 44.6% |  |  |

21

The following table sets forth certain information regarding trade channel net sales for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| e-commerce channels net sales | $68,017 | $66,720 | $1,297 | 1.9% |
| Traditional channels net sales | 92,363 | 88,081 | 4,282 | 4.9% |
| Total net sales | $160,380 | $154,801 | $5,579 | 3.6% |

The following table sets forth certain information regarding geographic makeup of net sales included in the above table for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Domestic net sales | $150,232 | $145,777 | $4,455 | 3.1% |
| International net sales | 10,148 | 9,024 | 1,124 | 12.5% |
| Total net sales | $160,380 | $154,801 | $5,579 | 3.6% |

The following table sets forth certain information regarding net sales categories for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Shooting sports net sales | $67,482 | $67,752 | $(270) | -0.4% |
| Outdoor lifestyle net sales | 92,898 | 87,049 | 5,849 | 6.7% |
| Total net sales | $160,380 | $154,801 | $5,579 | 3.6% |

For the nine months ended January 31, 2025, total net sales increased $5.6 million, or 3.6%, over the prior year comparable period primarily because of an increase in hunting and shooting accessories product net sales in our domestic channel as well as shooting accessories product net sales to international retailers.

Net sales in our e-commerce channel increased $1.3 million, or 1.9%, over the prior year comparable period primarily because of increased net sales to the world's largest online retailer. E-commerce channel net sales increased primarily because of higher hunting and fishing product net sales in our outdoor lifestyle category as well as increased shooting accessories product net sales in our shooting sports category, partially offset by lower personal protection product net sales in our shooting sports category and lower outdoor cooking net sales in our outdoor lifestyle category.

Net sales in our traditional channels increased $4.3 million, or 4.9%, over the prior year comparable period. Traditional channel net sales increased primarily because of higher net sales of shooting accessories in our shooting sports category and higher net sales of our hunting products in our outdoor lifestyle category. In addition, our international net sales increased $1.1 million, or 12.5%, over the prior year comparable period as a result of increased sales in Canada. The increased net sales in our traditional channel was partially offset by lower personal protection net sales in our shooting sports category and lower rugged outdoor and fishing products in our outdoor lifestyle category.

New products, which we define as any SKU introduced over the prior two fiscal years, represented 21.0% of net sales for the nine months ended January 31, 2025.

Gross margin for the nine months ended January 31, 2025 increased 150 basis points over the prior year comparable period, primarily because of higher sales volumes and lower inbound freight costs.

### Operating Expenses

The following table sets forth certain information regarding operating expenses for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $1,947 | $1,792 | $155 | 8.6% |
| Selling, marketing, and distribution | 15,019 | 14,464 | 555 | 3.8% |
| General and administrative | 8,854 | 9,461 | (607) | -6.4% |
| Total operating expenses | $25,820 | $25,717 | $103 | 0.4% |
| % of net sales | 44.1% | 48.1% |  |  |

Research and development expenses increased $155,000 over the comparable quarter last year, primarily from higher consulting and third party service expenses. Selling, marketing, and distribution expenses increased $555,000 from the comparable quarter last year mainly because of higher rent and sales-volume related expenses, partially offset by labor efficiencies gained as a result of occupying the full warehouse facility following our assumption of the lease in January 2024. General and administrative expenses decreased $607,000 from the comparable quarter last year, primarily because of lower legal and consulting expense and lower acquired intangible asset amortization expense, partially offset by higher employee compensation-related expenses.

The following table sets forth certain information regarding operating expenses for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $5,487 | $5,065 | $422 | 8.3% |
| Selling, marketing, and distribution | 41,376 | 41,933 | (557) | -1.3% |
| General and administrative | 26,293 | 29,035 | (2,742) | -9.4% |
| Total operating expenses | $73,156 | $76,033 | $(2,877) | -3.8% |
| % of net sales | 45.6% | 49.1% |  |  |

Research and development expenses increased $422,000 over the prior year comparable period, primarily from higher consulting and third party service expenses. Selling, marketing, and distribution expenses decreased $557,000 from the prior year comparable period mainly because of lower advertising expense. General and administrative expenses decreased $2.7 million from the prior year comparable period, primarily because of lower legal and consulting expense and lower acquired intangible asset amortization expense.

### Operating Income/(Loss)

The following table sets forth certain information regarding operating income/(loss) for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating income/(loss) | $303 | $(2,883) | $3,186 | 110.5% |
| % of net sales (operating margin) | 0.5% | -5.4% |  |  |

Operating income/(loss) for the three months ended January 31, 2025 was $3.2 million higher as compared to the comparable quarter last year primarily from higher gross margins as a result of higher net sales volume and lower inbound freight costs.

The following table sets forth certain information regarding operating income/(loss) for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating income/(loss) | $799 | $(6,990) | $7,789 | 111.4% |
| % of net sales (operating margin) | 0.5% | -4.5% |  |  |

23

Operating income/(loss) for the nine months ended January 31, 2025 was $7.8 million higher as compared to the prior year comparable period primarily from higher net sales volume, lower inbound freight costs, and lower operating expenses mentioned above.

### Income Taxes

The following table sets forth certain information regarding income tax benefit for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $58 | $13 | $45 | 346.2% |
| % of income from operations (effective tax rate) | 25.6% | -0.4% |  | 26.0% |

We recorded income tax expense of $58,000 for the three months ended January 31, 2025 compared with income tax expense of $13,000 for the prior year comparable period. The income tax expense recorded for the three months ended January 31, 2025 and 2024 was primarily due to a full valuation allowance recorded against our deferred tax assets.

The following table sets forth certain information regarding income tax benefit for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $92 | $28 | $64 | 228.6% |
| % of income from operations (effective tax rate) | 9.1% | -0.4% |  | 9.5% |

We recorded income tax expense of $92,000 for the nine months ended January 31, 2025 compared with income tax expense of $28,000 for the prior year comparable period. The income tax expense recorded for the nine months ended January 31, 2025 and 2024 was primarily due to a full valuation allowance recorded against our deferred tax assets.

### Net Income/(Loss)

The following table sets forth certain information regarding net income and the related per share data for the three months ended January 31, 2025 and 2024 (dollars in thousands, except per share data):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net income/(loss) | $169 | $(2,910) | $3,079 | 105.8% |
| Net income/(loss) per share |  |  |  |  |
| Basic | $0.01 | $(0.23) | $0.24 | 104.3% |
| Diluted | $0.01 | $(0.23) | $0.24 | 104.3% |

Net income was $169,000, or $0.01 per diluted share, for the three months ended January 31, 2025 compared with a net loss of $2.9 million, or $0.23 loss per share, for the comparable quarter last year. The increased net income was primarily related to increased net sales volume and lower inbound freight costs during the three months ended January 31, 2025 as compared to the three months ended January 31, 2024.

The following table sets forth certain information regarding net income and the related per share data for the nine months ended January 31, 2025 and 2024 (dollars in thousands, except per share data):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net income/(loss) | $915 | $(6,946) | $7,861 | 113.2% |
| Net income/(loss) per share |  |  |  |  |
| Basic | $0.07 | $(0.53) | $0.60 | 113.2% |
| Diluted | $0.07 | $(0.53) | $0.60 | 113.2% |

24

Net income was $915,000, or $0.07 per diluted share, for the nine months ended January 31, 2025 compared with a net loss of $6.9 million, or $0.53 loss per share, for the prior year comparable period. The increased net income was primarily related to increased net sales volume, lower inbound freight costs, and lower operating expenses during the nine months ended January 31, 2025 as compared to the nine months ended January 31, 2024.

### Non-GAAP Financial Measure

We use GAAP net income as our primary financial measure. We use Adjusted EBITDAS, which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of underlying performance trends, and it should be considered in addition to, but not instead of, the financial statements prepared in accordance with GAAP. Adjusted EBITDAS is defined as GAAP net income/(loss) before interest, taxes, depreciation, amortization, and stock compensation expense. Our Adjusted EBITDAS calculation also excludes certain items we consider non-routine. We believe that Adjusted EBITDAS is useful to understanding our operating results and the ongoing performance of our underlying business, as Adjusted EBITDAS provides information on our ability to meet our capital expenditure and working capital requirements, and is also an indicator of profitability. We believe this reporting provides additional transparency and comparability to our operating results. We believe that the presentation of Adjusted EBITDAS is useful to investors because it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. We use Adjusted EBITDAS to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to neutralize our capitalization structure to compare our performance against that of other peer companies using similar measures, especially companies that are private. We also use Adjusted EBITDAS to supplement GAAP measures of performance to evaluate our performance in connection with compensation decisions. We believe it is useful to investors and analysts to evaluate this non-GAAP measure on the same basis as we use to evaluate our operating results.

Adjusted EBITDAS is a non-GAAP measure and may not be comparable to similar measures reported by other companies. In addition, non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. We address the limitations of non-GAAP measures through the use of various GAAP measures. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDAS. Our presentation of Adjusted EBITDAS should not be construed as an inference that our future results will be unaffected by these items.

The following table sets forth our calculation of non-GAAP Adjusted EBITDAS for the three and nine months ended January 31, 2025 and 2024, respectively (dollars in thousands):

*(Unaudited)*

|  | For the Three Months Ended January 31, 2025 | 2024 | For the Nine Months Ended January 31, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| GAAP net income/(loss) | $169 | $(2,910) | $915 | $(6,946) |
| Interest (income)/expense | 123 | 65 | (19) | 71 |
| Income tax expense | 58 | 13 | 92 | 28 |
| Depreciation and amortization | 3,164 | 3,968 | 9,741 | 11,848 |
| Stock compensation | 887 | 1,133 | 2,685 | 3,071 |
| Technology implementation | — | 106 | — | 465 |
| Non-recurring inventory reserve adjustment | 223 | — | 444 | — |
| Emerging growth status transition costs | 82 | — | 245 | — |
| Other | 22 | 0 | 100 | 204 |
| Non-GAAP Adjusted EBITDAS | $4,728 | $2,375 | $14,203 | $8,741 |

### Liquidity and Capital Resources

We expect to continue to utilize our cash flows to invest in our business, including research and development for new product initiatives; to hire additional employees; to fund growth strategies, including any potential acquisitions; to make payments on any indebtedness we may incur over time; and to repurchase shares of our common stock if we are authorized to do so.

The following table sets forth certain cash flow information for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating activities | $(6,396) | $9,823 | $(16,219) | -165.1% |
| Investing activities | (3,393) | (5,320) | 1,927 | 36.2% |
| Financing activities | (2,839) | (10,563) | 7,724 | 73.1% |
| Total cash flow | $(12,628) | $(6,060) | $(6,568) | 108.4% |

### Operating Activities

On an annual basis, operating activities generally represent the principal source of our cash flow.

Cash used in operating activities was $6.4 million for the nine months ended January 31, 2025 compared with cash provided by operating activities of $9.8 million for the nine months ended January 31, 2024. Cash used by operating activities for the nine months ended January 31, 2025 was primarily impacted by $5.9 million of higher accounts receivable, primarily due to increased sales volumes and timing of customer shipments and $22.5 million of increased inventory. The increase in inventory was a result of planned increase in purchases to prepare new product launches later in the fiscal year. The cash usage for the nine months ended January 31, 2025 was partially offset by a $3.8 million increase in accounts payable due to the timing of inventory purchases as we built our inventory balances higher during our third fiscal quarter, $3.1 million lower prepaid expenses and other current assets from lower deposits on inventory with our suppliers, and $1.9 million of increase accrued expenses related to the timing of outbound freight accruals and higher sales volume-related accruals.

### Investing Activities

Cash used in investing activities was $3.4 million during the nine months ended January 31, 2025, a decrease of $1.9 million as compared the prior year comparable period. We expect to spend approximately $4.0 million to $4.5 million of capital expenditures in fiscal 2025, a decrease of $2.0 million to $2.5 million from the $6.0 million we spent in fiscal 2024, a year in which we spent $2.9 million on capital expenditures as a result of the lease assignment of the full building at our headquarters in Columbia, Missouri.

### Financing Activities

Cash used in financing activities was $2.8 million for the nine months ended January 31, 2025, primarily from $2.6 million used to repurchase 270,587 shares of our common stock.

Our future capital requirements will depend on many factors, including net sales, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, any acquisitions or strategic investments that we may determine to make, and changes in consumer spending, which is sensitive to economic conditions and other factors. Further equity or debt financing may not be available to us on acceptable terms or at all. If sufficient funds are not available or are not available on acceptable terms, our ability to take advantage of unexpected business opportunities or to respond to competitive pressures could be limited or severely constrained.

We had $17.1 million of cash equivalents on hand as of January 31, 2025 and had $29.7 million in cash and cash equivalents on hand as of April 30, 2024.

### Other Matters

### Critical Accounting Policies

The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Significant accounting policies are summarized in Note 2 of the Notes to the consolidated and combined financial statements in our Annual Report on Form 10-K for the fiscal year ended April 30, 2024. Our critical accounting policies are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended April 30, 2024, to which there have been no material changes. Actual results could differ from our estimates.

### Recent Accounting Pronouncements

The nature and impact of recent accounting pronouncements, if any, is discussed in Note *2—Basis of Presentation* to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

## Market risk

As filed, 140 characters.

There were no material changes from the information provided in Quantitative and Qualitative Disclosures about Market Risk in the Form 10-K.

## Controls and procedures

As filed, 1,211 characters.

### Disclosure Controls and Procedures

As of January 31, 2025, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) and have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter ended January 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 299 characters.

We have disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on June 27, 2024, risk factors that materially affect our business, financial condition, or results of operations. There have been no material changes from the risk factors previously disclosed.

Filed Mar 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-034660. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.