LOS ANGELES, Jan. 08, 2025 (GLOBE NEWSWIRE) -- AXIL Brands, Inc. ("AXIL” or the "Company”) (NYSE American: AXIL), an emerging global consumer products company for AXIL® hearing protection and enhancement products and Reviv3® hair and skin care products, announces its financial and operational results for the second quarter ended November 30, 2024 (2Q25).
Financial Highlights for the Quarter Ended November 30, 2024
- Revenue in 2Q25 was $7.7 million, as compared to $8.4 million in the prior year period
- Gross profit as a percentage of sales was 71.1% in 2Q25, as compared to 74.3% for the prior year period
- Operating expenses as a percentage of sales were 62.4% in 2Q25, as compared to 59.3% for the prior year period
- Net income in 2Q25 was $0.6 million, as compared to $1.0 million in the prior year period
- Adjusted EBITDA in 2Q25 was $1.0 million, as compared to $1.4 million in the prior year period
- Net cash provided by operating activities for the six months ended November 30, 2024 was $1.9 million, as compared to $1.3 million for the prior year period
- Cash as of November 30, 2024 was $5.2 million, as compared to $3.3 million as of May 31, 2024
- Weighted average dilutive shares for 2Q25 was 8,168,657, as compared to 18,632,689 in the prior year period
"We continue to take steps to diversify our distribution strategy for our hearing protection and enhancement products beyond our online presence. Over the last six months, we have announced relationships with international distributors that we expect to contribute in a more meaningful way going forward. Moreover, we also expect to establish additional international distribution agreements that will allow us to expand the AXIL brand to incremental targeted markets.
"Domestically, we are making strong inroads into the retail channel. We are in over 1,000 retail locations, including Bass Pro Shops, Scheel's, and select Walmart stores. Ultimately, we would like to expand our retail presence by an order of magnitude, and given our financial discipline, we expect to be able to recognize a healthy margin contribution that is comparable to what we recognize in our online channels. A core corporate value at AXIL is achieving efficient profitability. We prioritize sustainable growth and avoid pursuing revenue expansion solely for top-line growth if it compromises operating leverage.
"In addition to our planned diversification of distribution channels, we aim to give consumers compelling reasons to choose AXIL-branded hearing safety and enhancement products. We intend to achieve this by maintaining our technological leadership and introducing both new and enhanced hearing products with improved functionality and ergonomics across various price points. Accordingly, we expect to launch the successor series to our TRACKR earmuffs in the first half of calendar year 2025.
"Finally, our solid cash position of $5.2 million at the end of 2Q25 enables us to internally finance our strategic growth plans, with no anticipated reliance on external market funding. We believe our dual strategies of distribution channel diversification and continued product innovation, which should all be able to be funded internally, will generate sustainable shareholder value. I extend my gratitude to our shareholders for their continued support and remain confident that AXIL's greatest achievements are still to come,” concluded Mr. Toghraie.
Use of Non-GAAP Financial Measures
The Company calculates EBITDA by taking net income calculated in accordance with accounting principles generally accepted in the United States ("GAAP”), and adjusting for income taxes, interest income or expense, and depreciation and amortization. The Company calculates adjusted EBITDA as EBITDA, further adjusted for stock-based compensation. Adjusted EBITDA is also presented as a percentage of revenue, which is calculated by dividing the non-GAAP Adjusted EBITDA for a period by revenue for the same period. Other companies may calculate EBITDA and adjusted EBITDA differently, limiting the usefulness of these measures for comparative purposes. The Company believes that these non-GAAP measures of financial results provide useful information regarding certain financial and business trends relating to the Company's financial condition and results of operations, and management considers EBITDA and adjusted EBITDA important indicators in evaluating the Company's business on a consistent basis across various periods for trend analyses. These non-GAAP financial measures exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements and are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Investors should not rely on any single financial measure to evaluate our business. A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in a schedule to this press release.
| AXIL BRANDS, INC. AND SUBSIDIARY | |||||||||||||||
| CONSOLIDATED EBITDA and ADJUSTED EBITDA | |||||||||||||||
| FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2024 AND 2023 | |||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||
| November 30, | November 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (GAAP) | $ | 633,706 | $ | 1,018,075 | $ | 523,901 | $ | 1,172,527 | |||||||
| Income taxes | 67,250 | 364,393 | 67,250 | 430,382 | |||||||||||
| Interest (income) expense, net | (26,044 | ) | (36,185 | ) | (54,675 | ) | (73,034 | ) | |||||||
| Depreciation and amortization | 34,440 | 27,785 | 47,335 | 56,022 | |||||||||||
| Total EBITDA (Non-GAAP) | 709,352 | 1,374,068 | 583,811 | 1,585,897 | |||||||||||
| Adjustments: | |||||||||||||||
| Stock-based compensation | 304,600 | 51,108 | 602,464 | 102,215 | |||||||||||
| Total Adjusted EBITDA (Non-GAAP) | $ | 1,013,952 | $ | 1,425,176 | $ | 1,186,275 | $ | 1,688,112 | |||||||
| Sales, net (GAAP) | $ | 7,732,574 | $ | 8,421,677 | $ | 13,583,846 | $ | 14,527,946 | |||||||
| Adjusted EBITDA as a percentage of Sales, net (Non-GAAP) | 13.1 | % | 16.9 | % | 8.7 | % | 11.6 | % | |||||||
| AXIL BRANDS, INC. AND SUBSIDIARY | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| November 30, 2024 | May 31,
2024 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash | $ | 5,213,897 | $ | 3,253,876 | |||
| Accounts receivable, net | 1,444,218 | 509,835 | |||||
| Inventory, net | 2,664,489 | 3,394,023 | |||||
| Prepaid expenses and other current assets | 724,778 | 809,126 | |||||
| Total Current Assets | 10,047,382 | 7,966,860 | |||||
| OTHER ASSETS: | |||||||
| Property and equipment, net | 305,433 | 260,948 | |||||
| Intangible assets, net | 324,907 | 309,104 | |||||
| Right of use asset | 737,251 | 36,752 | |||||
| Deferred tax asset | 121,791 | 231,587 | |||||
| Other assets | 20,720 | 16,895 | |||||
| Goodwill | 2,152,215 | 2,152,215 | |||||
| Total Other Assets | 3,662,317 | 3,007,501 | |||||
| TOTAL ASSETS | $ | 13,709,699 | $ | 10,974,361 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 1,619,252 | $ | 967,596 | |||
| Customer deposits | 496,404 | 154,762 | |||||
| Contract liabilities, current | 956,022 | 905,311 | |||||
| Notes payable | 143,342 | 146,594 | |||||
| Due to related party | 178,520 | 11,798 | |||||
| Lease liability, current | 207,077 | 36,752 | |||||
| Income tax liability | 67,250 | 242,296 | |||||
| Other current liabilities | 331,395 | 332,936 | |||||
| Total Current Liabilities | 3,999,262 | 2,798,045 | |||||
| LONG TERM LIABILITIES: | |||||||
| Lease liability | 531,081 | - | |||||
| Contract liabilities | 357,205 | 480,530 | |||||
| Total Long Term Liabilities | 888,286 | 480,530 | |||||
| Total Liabilities | 4,887,548 | 3,278,575 | |||||
| Commitments and contingencies | - | - | |||||
| STOCKHOLDERS' EQUITY: | |||||||
| Preferred stock, $0.0001 par value; 300,000,000 shares authorized; 31,133,500 and 42,251,750 shares issued and outstanding as of November 30, 2024 and May 31, 2024, respectively | 3,113 | 4,225 | |||||
| Common stock, $0.0001 par value: 450,000,000 shares authorized; 6,466,852 and 5,908,939 shares issued, issuable and outstanding as of November 30, 2024 and May 31, 2024, respectively | 647 | 591 | |||||
| Additional paid-in capital | 8,428,760 | 7,825,240 | |||||
| Retained Earnings/(Accumulated deficit) | 389,631 | (134,270 | ) | ||||
| Total Stockholders' Equity | 8,822,151 | 7,695,786 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 13,709,699 | $ | 10,974,361 | |||
| AXIL BRANDS, INC. AND SUBSIDIARY | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2024 AND 2023 | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||
| November 30, | November 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Sales, net | $ | 7,732,574 | $ | 8,421,677 | $ | 13,583,846 | $ | 14,527,946 | |||||||
|
| |||||||||||||||