American Outdoor Brands Corporation (NASDAQ:AOBC) Q2 2020 Earnings Conference Call - Final Transcript

Dec 05, 2019 • 05:00 pm ET

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American Outdoor Brands Corporation (NASDAQ:AOBC) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
James Debney

new product launches we have planned for SHOT Show in January. While I won't share more detail at this point, I can tell you that we look forward to providing consumers with some exciting new products from the brands they know and trust. So please stay tuned.

Turning now to Outdoor Products & Accessories or OP&A, revenue for OP&A in Q2 decreased by about $8 million from the comparable quarter last year. The prior year quarter was a challenging comparison, since it included large discounted orders from two significant customers, and those orders did not repeat in the current Q2. That said, the decline does not concern us because point-of-sale data continues to indicate strong consumer demand for our products at retail. In fact, and as Jeff will outline later, we expect full year fiscal 2020 revenue in OP&A to grow over the prior year.

Our decision to organize our OP&A business into brand lanes continues to yield exciting results. Our four primary brand lanes are orientated around distinct consumer archetypes: The marksman, the harvester, the defender and the adventurer, each containing three to six distinct brands. This focus has enabled our teams to establish clear positioning for each brand which, in turn, defines where each brand has the consumer's permission to play in certain product categories. The result of this approach is evident in our new product launch plans.

In January, primarily at SHOT Show, 15 of our 19 OP&A brands will launch a large number of new products, one of which is an entirely new brand, and many of which represent our entry into six completely new product categories. Those entries demonstrate meaningful progress towards our expansion into the $35 billion rugged outdoor market, while the remainder are introductions aimed at strengthening our position and taking market share within existing product categories. I look forward to sharing the details of those launches in the new year.

Lastly, and before I hand over to Jeff, just a few comments on the planned spin-off of our OP&A business. We made the spin-off announcement just three weeks ago. So there are no significant new developments to share today. We currently have a dedicated project team in place that will keep us on track, while we work to develop the various business arrangements that will need to be in place by the spin-off date. In the meantime, the rest of our organization will remain focused on continuing to effectively and efficiently run the company. As we approach the spin-off, we will continue to provide regular updates. We look forward to getting our new leadership teams out on the road, providing us the opportunity to meet with many of you. The first of these opportunities will be at SHOT Show in January and we hope to see some of you there.

With that, I'll ask Jeff to provide more detail on our financial results and our updated guidance. Jeff?

Executive
Jeffrey D. Buchanan

Thanks, James. Revenue for the quarter was $154.4 million, a decrease of 4.5% from