American Outdoor Brands Inc.

Company Overview

Business Model: American Outdoor Brands, Inc. is a leading provider of outdoor lifestyle products and shooting sports accessories. The company conceives, designs, sources, and sells products across categories including hunting, fishing, meat processing, outdoor cooking, camping, shooting, and personal security and defense. While all products are developed and marketed internally, some electro-optics products are manufactured at its Columbia, Missouri facility, with the majority of products manufactured and assembled by third parties in Asia. The company organizes its product development, customer service, and marketing teams into four brand lanes—Adventurer, Harvester, Marksman, and Defender—each focusing on distinct consumer verticals. Sales are conducted through both e-commerce and traditional distribution channels.

Market Position: American Outdoor Brands, Inc. positions itself as a leading provider of high-quality and innovative products in the rugged outdoor market, leveraging a portfolio of 20 distinct brands. The company holds over 400 issued and pending patents and numerous registered and unregistered trademarks, indicating a strong focus on intellectual property protection. Innovation is a key differentiator, with new products (SKUs introduced over the prior two fiscal years) accounting for 21.5% of net sales in fiscal 2025. Products introduced since fiscal 2020 represent over 50% of fiscal 2025 net sales, growing at a compound average growth rate exceeding 40% during that period. The company has achieved significant market share in specific categories, such as the BUBBA Electric Fillet Knife. The market opportunity is substantial, with outdoor recreation participation growing by 4.1% in calendar 2023 to 175.8 million U.S. participants, and the outdoor cooking industry estimated at $7 billion. One customer, the world's largest e-commerce retailer, accounted for 20.3% of net sales in fiscal 2025.

Recent Strategic Developments:

• Spin-Off: Completed the spin-off from Smith & Wesson Brands, Inc. on August 24, 2020, establishing itself as an independent public entity.
• Acquisition: Acquired the Grilla Grills business of Fahrenheit Technologies, Inc. in March 2022 for $27 million, marking its entry into the outdoor cooking market.
• Product Innovation: Launched the BUBBA SFS Lite in fiscal 2025, expanding its smart fishing scale technology. Introduced the Caldwell ClayCopter, a revolutionary, portable target system with pending intellectual property.
• Facility Expansion: Effective January 1, 2024, the company assigned the lease for its Columbia, Missouri facility, expanding its usable square footage to approximately 632,000 square feet with an option for an additional 491,000 square feet.
• Industry Recognition: Received multiple awards in 2024 and 2025 for product innovation across its brands, including Caldwell Lead Sled 4, MEAT! Your Maker products, Caldwell Claymore, and Grilla Mammoth Vertical Pallet Smoker.

Geographic Footprint: American Outdoor Brands, Inc. maintains its principal executive, administrative, financial, sales, marketing, research and development, production, assembly, and distribution operations at its leased 632,000 square foot facility in Columbia, Missouri. Additional administrative offices are located in Chicopee, Massachusetts (5,000 sq ft), and research and development offices are in Shenzhen, People's Republic of China (2,500 sq ft), and Yanjiang, People's Republic of China (2,500 sq ft). The company sells its products worldwide, with domestic sales representing 93.5% of total net sales in fiscal 2025 and international sales accounting for 6.5%. International sales grew 20.0% year-over-year in fiscal 2025, driven by increases in Canada (+22.9%) and European countries (+24.4%).

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 44.6% (FY2025), 44.0% (FY2024)
• Operating Margin: -0.1% (FY2025), -6.2% (FY2024)
• Net Margin: -0.03% (FY2025), -6.1% (FY2024)

Investment in Growth:

• R&D Expenditure: $7.7 million (3.5% of revenue) in fiscal 2025, an increase of 12.5% from $6.9 million in fiscal 2024.
• Capital Expenditures: $3.153 million for property and equipment, and $0.743 million for patents and software in fiscal 2025.
• Strategic Investments: The acquisition of Grilla Grills in fiscal 2022 for $27 million.

Business Segment Analysis

American Outdoor Brands, Inc. operates as a single reporting segment but disaggregates revenue by product categories and channels.

Shooting Sports

Financial Performance:

• Revenue: $95.2 million (+3.8% YoY) in fiscal 2025.
• Key Growth Drivers: Increased net sales of shooting accessories, particularly in traditional channels.

Product Portfolio:

• Includes shooting accessories (rests, vaults), electro-optical devices (hunting optics, firearm aiming devices, flashlights, laser grips), and reloading, gunsmithing, and firearm cleaning supplies.
• Key brands include Caldwell, Wheeler, Tipton, Frankford Arsenal, Crimson Trace, and LaserLyte, as well as licensed brands M&P Accessories, Performance Center by Smith & Wesson, and Smith & Wesson Accessories.
• Recent innovations include the Caldwell ClayCopter and Caldwell Lead Sled 4.

Market Dynamics:

• Products cater to activities at the shooting range, firearm maintenance, and personal protection.
• The market has seen significant growth, with approximately 26.2 million new entrants into shooting sports since calendar 2020, and participation increasing from 34 million to 63.5 million adults between 2009 and 2022.

Outdoor Lifestyle

Financial Performance:

• Revenue: $127.1 million (+16.2% YoY) in fiscal 2025.
• Key Growth Drivers: Strong performance in hunting, fishing, and meat processing products across both domestic traditional and e-commerce channels.

Product Portfolio:

• Encompasses premium sportsmen knives and tools for fishing and hunting, land management tools, hunting products, meat processing equipment, outdoor cooking products, and camping, survival, and emergency preparedness items.
• Key brands include BOG, BUBBA, Grilla, Hooyman, Imperial, MEAT! Your Maker, Old Timer, Schrade, Uncle Henry, and ust.
• Notable product introductions include the BUBBA Pro SFS and SFS Lite, Hooyman seed spreaders, and a comprehensive line of MEAT! Your Maker processing equipment. The Grilla brand, acquired in fiscal 2022, provides barbecue grills, smokers, and outdoor kitchen products.

Market Dynamics:

• Targets outdoor-oriented consumers engaged in active lifestyles.
• The outdoor recreation participant base grew by 4.1% in calendar 2023 to 175.8 million.
• The fishing market alone had an estimated 57.7 million anglers in the U.S. in 2023.
• The outdoor cooking industry is estimated at $7 billion, and approximately 15 million people engaged in hunting in 2022.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In fiscal 2025, American Outdoor Brands, Inc. repurchased 374,446 shares of its common stock for $3.8 million. In fiscal 2024, 689,417 shares were repurchased for $6.0 million.
• Dividend Payments: The company has never declared or paid cash dividends on its common stock and currently intends to retain all available funds and future earnings to fund business development and expansion.
• Future Capital Return Commitments: As of April 30, 2025, $7.2 million remains available under the current share repurchase authorization, which expires on September 30, 2025.

Balance Sheet Position:

• Cash and Equivalents: $23.4 million as of April 30, 2025, down from $29.7 million as of April 30, 2024.
• Total Debt: No borrowings were outstanding on the company's $75.0 million revolving line of credit as of April 30, 2025, or April 30, 2024.
• Net Cash Position: $23.4 million as of April 30, 2025.
• Debt Maturity Profile: The revolving line of credit matures in March 2027. Contractual interest payments on debt (related to the unused portion of the revolving line) total $0.184 million, with $0.096 million due within one year and $0.088 million due in 1-3 years.

Cash Flow Generation:

• Operating Cash Flow: $1.4 million in fiscal 2025, a significant decrease from $24.5 million in fiscal 2024. This was primarily impacted by a $13.6 million increase in accounts receivable due to accelerated customer orders and an $11.4 million increase in inventory for new product introductions and higher tariff costs.
• Free Cash Flow: Not explicitly reported, but based on operating cash flow and capital expenditures, the company had negative free cash flow in fiscal 2025.
• Cash Conversion Metrics: Inventory increased by $11.4 million in fiscal 2025, and accounts receivable increased by $13.6 million, indicating a longer cash conversion cycle for the period.

Operational Excellence

Production & Service Model: American Outdoor Brands, Inc. operates with an asset-light model, focusing on intellectual property ownership and tooling while leveraging third-party contract manufacturers for most production and assembly. The company conceives, designs, sources, and sells outdoor lifestyle products and shooting sports accessories. Some electro-optics products are manufactured at its Columbia, Missouri facility. A dedicated team of approximately 50 product designers, engineers, quality and sourcing specialists, and software developers operate across five in-house product development labs, capable of delivering over 200 new products annually. The company employs a proprietary process to identify market opportunities and resolve consumer pain points through innovative products, often protected by new intellectual property. Customer service is provided by a dedicated team, offering support via phone and email, backed by various product warranties (ranging from limited lifetime to one-year).

Supply Chain Architecture: The company primarily relies on third-party contract manufacturers and suppliers located in Asia, predominantly China, with additional presence in Taiwan, Vietnam, Myanmar, and the Philippines. These suppliers provide finished products, components, and raw materials (e.g., steel, plastic, aluminum, copper, lead, packaging materials) according to the company's specifications. Short-term advance forecasts are provided to suppliers, with proactive ordering to mitigate supply chain delays and port congestion. The company aims for a flexible and resilient supply chain, utilizing dual sourcing for certain products and components to reduce dependence on any single supplier and to manage risks associated with tariffs, pricing, and quality. While long-term contracts are not typical, the company maintains long-standing working relationships with its suppliers.

Key Suppliers & Partners:

• Manufacturing Partners: Third-party contract manufacturers primarily in Asia (China, Taiwan, Vietnam, Myanmar, Philippines).
• Raw Material Suppliers: Third-party suppliers for materials such as steel, plastic, aluminum, copper, lead, and packaging.
• Technology Partners: Internal R&D teams are key, with a focus on cross-pollinating technology across brand lanes (e.g., BUBBA Pro SFS incorporating technology from Caldwell, Lockdown, and BOG).

Facility Network:

• Manufacturing, R&D, Corporate, Distribution: The primary operational hub is a leased 632,000 square foot facility in Columbia, Missouri, which also includes an option for a 491,000 square foot expansion.
• Research & Development: Dedicated R&D staff are located at offices in Shenzhen and Yanjiang, People's Republic of China.
• Administrative: An administrative office is maintained in Chicopee, Massachusetts.

Operational Metrics:

• Backlog of orders: $2.6 million as of April 30, 2025, down from $4.0 million in fiscal 2024.
• New Product Contribution: Products introduced over the prior two fiscal years represented 21.5% of net sales in fiscal 2025.
• Inventory Management: Inventory increased by $11.4 million in fiscal 2025, driven by planning for new product introductions and increased inbound freight costs associated with tariffs.

Market Access & Customer Relationships

Go-to-Market Strategy: American Outdoor Brands, Inc. employs a dual-channel go-to-market strategy, focusing on both e-commerce and traditional distribution. Its sales team is structured around these two channels, organized by product categories and regions, and sells across all brands.

• Direct Sales: The company operates dedicated e-commerce websites for its key brands (e.g., BUBBA.com, grillagrills.com, MEATyourmaker.com, CaldwellShooting.com), which serve as direct-to-consumer platforms. These digital platforms are used for online marketing, content distribution, and direct sales, aiming to cultivate direct relationships with consumers and generate pull-through for products at retail locations. The direct-to-consumer channel represented 13.3% of total net sales in fiscal 2025.
• Channel Partners: Products are distributed through a variety of traditional channels, including sports specialty stores, sporting goods stores, dealers and distributors, mass market retailers, home and auto retailers, and original equipment manufacturers. These channels primarily operate out of physical brick-and-mortar locations.
• Digital Platforms: Extensive use of social media (Facebook, Instagram, YouTube) and branded websites to showcase content, educate customers, and drive enthusiasm for brands.

Customer Portfolio:

• Enterprise Customers: The company has a significant relationship with the world’s largest e-commerce retailer, which accounted for 20.3% of net sales in fiscal 2025 (down from 22.1% in fiscal 2024).
• Customer Concentration: As of April 30, 2025, three customers individually accounted for over 10% of accounts receivable (14.6%, 13.1%, and 11.1%). As of April 30, 2024, one customer accounted for 27.3% of accounts receivable.
• Customer relationships are generally based on individual purchase orders rather than long-term supply contracts, introducing potential for order cancellations or changes.

Geographic Revenue Distribution:

• Domestic: $207.8 million, representing 93.5% of total revenue in fiscal 2025.
• International: $14.5 million, representing 6.5% of total revenue in fiscal 2025, with notable contributions from Canada ($6.3 million, +22.9% YoY) and Europe ($5.4 million, +24.4% YoY).

Competitive Intelligence

Market Structure & Dynamics

The company operates in highly competitive markets characterized by numerous domestic and international participants, both large and small, with limited barriers to entry. Competition is primarily based on innovation, performance, price, quality, reliability, durability, consumer brand awareness, and customer service. The outdoor recreation market has experienced favorable participation trends, with 14.5 million new participants since January 2020, and the overall participant base growing by 4.1% in calendar 2023 to 175.8 million. Specific segments like outdoor cooking (estimated $7 billion), fishing (57.7 million anglers), and sport shooting (63.5 million adults) represent significant addressable markets. Retail industry trends include consolidation, reduced lead times, increased demand for direct-to-consumer fulfillment, and expansion of e-commerce platforms by traditional retailers.

Competitive Positioning Matrix:

Direct Competitors

• Primary Competitors: A large number of private companies directly compete with American Outdoor Brands, Inc.'s brands.
• Competitive Threats: Competitors may possess more established brand names, stronger distribution channels, and greater financial and marketing resources, enabling heavier investment in intellectual property, product development, and advertising. The proliferation of private labels and exclusive brands by major retailers also poses a threat. The company's products also compete for discretionary consumer spending against a wide array of other sporting and recreational products and activities.
• Competitive Response Strategy: The company's strategy includes a continuous stream of innovative and differentiated products, leveraging its innovation advantage to gain market share and enter new categories, cultivating consumer relationships through digital platforms, maintaining a flexible and resilient supply chain, and pursuing strategic acquisitions that complement its business.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: The company's performance is sensitive to general economic conditions, consumer spending levels, and confidence. Economic uncertainty, unfavorable employment, and increased commodity prices can reduce demand for discretionary items. Speculation regarding increased gun control and hunting regulations can cause demand volatility.
• Technology Disruption: Failure to continuously introduce successful new products or achieve market acceptance for innovations could adversely affect the business. The development of new products is a lengthy and costly process with no guarantee of success.
• Customer Concentration: A substantial portion of revenue depends on a small number of large customers, with the world's largest e-commerce retailer accounting for 20.3% of fiscal 2025 net sales. This creates risk from order cancellations, reductions, or changes in business practices by these key customers.
• Acquisitions: Future acquisitions involve significant risks, including integration difficulties, potential disruption to core business, diversion of management attention, and the possibility of not achieving expected benefits or synergies.

Operational & Execution Risks

• Supply Chain Vulnerabilities: High reliance on third-party contract manufacturers and suppliers, primarily in Asia, exposes the company to risks from political and economic instability, supplier financial/managerial instability, production delays, quality control issues, raw material availability, currency exchange rates, tariffs, and transportation disruptions. The absence of long-term supply contracts with manufacturers increases vulnerability.
• Inventory Management: Inaccurate demand forecasting can lead to excess inventory (resulting in write-downs or discounted sales) or product shortages (leading to lost sales and reputational damage).
• Product Liability & Recalls: As a distributor of consumer products, the company is subject to product safety regulations and the risk of costly product recalls or product liability claims, which could damage its reputation and financial condition.
• Intellectual Property: Inability to protect its extensive intellectual property portfolio (400+ patents, numerous trademarks) or defend against infringement claims could impair competitive advantage, reduce sales, and incur significant litigation costs.
• International Business: Operating internationally exposes the company to risks such as adverse tax developments, difficulty enforcing intellectual property rights, currency exchange fluctuations, import/export controls, and compliance with diverse foreign laws and regulations.

Financial & Regulatory Risks

• Demand Volatility: The business is seasonal, with highest sales typically between August and January (hunting/holidays) and heightened demand for fishing/outdoor cooking in spring/early summer. Unseasonal weather can also impact sales.
• Credit & Liquidity: Risk of difficulty collecting accounts receivable, especially from financially distressed customers. Dependence on a smaller group of customers could increase bargaining power and pressure on pricing.
• Regulatory & Compliance Risks: Subject to a wide array of federal, state, local, and international laws and regulations, including consumer protection, advertising, labor, data privacy, environmental, and tax laws. The U.S. Food and Drug Administration regulates certain electro-optical, grilling, and meat processing products. Increased regulation of firearms and related products could reduce demand.
• Trade & Tariffs: Currently subject to Section 301 tariffs on imports from China, which can increase operating costs and impact margins. The dynamic tariff landscape creates uncertainty and can hinder long-term planning.

Geopolitical & External Risks

• Geographic Dependencies: Significant reliance on Asian suppliers means political or financial instability in that region could disrupt operations.
• Trade Relations: Changes in U.S. foreign trade policies, tariffs, or trade sanctions could reduce the ability to sell products in foreign markets or import necessary components and raw materials.
• Cybersecurity: Vulnerability to cyberattacks, computer viruses, and data breaches could lead to operational disruptions, loss of critical data, reputational damage, increased costs, and potential litigation or regulatory actions.

Innovation & Technology Leadership

Research & Development Focus: American Outdoor Brands, Inc. places a strong emphasis on innovation as a core driver of long-term success.

• Core Technology Areas: The company's R&D efforts are concentrated on product design, engineering, quality, sourcing, and software development. It maintains five in-house state-of-the-art product development labs.
• Investment Level: In fiscal 2025, R&D expenditure was $7.7 million, representing approximately 3.5% of revenue and an increase of 12.5% year-over-year. Approximately 15% of the company's employees are dedicated to R&D activities.
• Innovation Pipeline: The company aims to introduce over 200 new SKUs annually, typically bringing new products from concept to market within 12 months. New products (defined as SKUs introduced over the prior two fiscal years) accounted for 21.5% of net sales in fiscal 2025. Products introduced since fiscal 2020 represent over 50% of fiscal 2025 net sales, demonstrating a compound average growth rate exceeding 40% during that period.
• Strategic Importance: A proprietary process identifies large addressable markets and consumer pain points, which are then addressed with innovative products and services, often leading to new intellectual property. The company actively "cross-pollinates" technology across its four brand lanes, leveraging insights and developments from one area to enhance products in others (e.g., BUBBA Pro SFS incorporating technology from Caldwell, Lockdown, and BOG brands).

Intellectual Property Portfolio:

• Patent Strategy: The company holds more than 400 issued and pending patents at the United States Patent and Trademark Office, actively seeking protection for innovative products, unique designs, and commercially important processes.
• Trademark Strategy: An active global program is in place for trademark registration, monitoring, and enforcement, covering its 20 distinct brands.
• Licensing Programs: American Outdoor Brands, Inc. licenses well-known trademarks such as Smith & Wesson, M&P, and Performance Center from Smith & Wesson Brands, Inc. for use with certain accessory, tool, and cutlery products. This exclusive license, effective from May 1, 2024, has an initial term of five years and requires royalty payments.

Technology Partnerships:

• While the filing highlights internal R&D capabilities and cross-brand technology leveraging, it does not explicitly detail external technology partnerships or strategic alliances beyond general "external resources" for content creation.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The company emphasizes its experienced, entrepreneurial senior management team, which is responsible for defining and executing business strategies with a "brand-first" orientation. The Board of Directors, through its Compensation and Nominations and Corporate Governance Committee, oversees human capital management matters. Board Composition: The Board of Directors, particularly through its Audit Committee, provides oversight for cybersecurity risk management. The full Board receives reports on cybersecurity as part of the overall enterprise risk management program.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of April 30, 2025, American Outdoor Brands, Inc. had 299 employees.
• Geographic Distribution: Nearly all employees are located in the United States.
• Skill Mix: Approximately 15% of the workforce is focused on research and development activities.

Talent Management:

• Acquisition & Retention: The company is committed to hiring qualified candidates without discrimination and fostering an inclusive work environment. It engages with employees through various forums to boost engagement, improve teamwork, and clarify communication.
• Employee Value Proposition: A comprehensive compensation and benefits program is offered, including medical, dental, and vision plans (company pays ~90% of premiums), short-term and long-term disability insurance (company pays 100% of premiums), a 401(k) plan with a company match (up to 3% of the first 6% contributed), a profit-sharing plan, 12 annual holidays, paid time off, flexible work schedules, and an employee stock purchase plan. On-site fitness and nursing rooms, employee assistance programs, and product discounts are also provided. Compensation is merit-based, aligning with a pay-for-performance philosophy.

Diversity & Development:

• Diversity Metrics: The company states a commitment to hiring qualified candidates without regard to race, religion, color, sex, sexual orientation, pregnancy, gender identity, age, national origin, ancestry, physical or mental disability, genetic information, or any other status.
• Development Programs: Continuous learning opportunities are provided, including tuition reimbursement for advanced degrees, reimbursement for continuing professional education, support for professional association memberships, and in-house training for career advancement.
• Culture & Engagement: The company promotes a collaborative and supportive environment, guided by values of honesty, respect, responsibility, discipline, collaboration, open-mindedness, and resourcefulness, fostering an entrepreneurial culture.

Environmental & Social Impact

Environmental Commitments:

• Climate Strategy: The company is subject to federal, state, and local environmental laws and regulations. It maintains policies and programs to monitor compliance with environmental, health, and safety standards.
• Supply Chain Sustainability: Not explicitly detailed beyond general compliance with environmental regulations.

Social Impact Initiatives:

• Community Investment: American Outdoor Brands, Inc. sponsors events and organizations that support outdoor activities enjoyed by its consumers. It is actively involved in industry organizations, such as the American Knife and Tool Institute, where it holds a seat on the Board of Regents.
• Product Impact: The BUBBA Pro Series Smart Fish Scale is highlighted for its contribution to conservation and sustainability in fishing by facilitating immediate catch and release, reducing fish out-of-water time.

Sustainability: Sustainability is a core component of the company's corporate responsibility efforts. In 2024, sustainability oversight responsibilities were returned to the Nominations and Corporate Governance Committee, which is assisted by a newly established Sustainability Sub-Committee. An Executive Sustainability Committee, comprising company leaders, oversees the program. The company publishes an annual Sustainability Report, aligned with the Sustainability Accounting Standards Board (SASB), with the most recent report published in September 2024.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The company's business is typically seasonal, with sales generally highest between August and January. This period is driven by demand related to prime hunting season, seasonal cutlery promotions, industry trade shows, and holiday season demand. Additionally, there is heightened demand for fishing and outdoor cooking products during the spring and early summer months.
• Economic Sensitivity: Revenue and profits are influenced by consumer spending, which is sensitive to global economic conditions, including economic uncertainty, employment levels, consumer confidence, interest rates, and disposable income. Demand for discretionary items, such as the company's products, can be adversely affected by these factors.
• Industry Cycles: Speculation surrounding increased gun control and hunting regulations can impact consumer demand, often leading to a near-term increase followed by a softening of demand when concerns subside. Unseasonal weather conditions can also affect quarterly operating results.

Planning & Forecasting: The company manages inventory levels based on supply chain delivery requirements, existing orders, anticipated sales, and customer delivery requirements, necessitating close coordination with customers. For new product introductions, production may commence before firm orders are received.

Regulatory Environment & Compliance

Regulatory Framework: American Outdoor Brands, Inc. is subject to a wide array of federal, state, local, and international laws, rules, and regulations. These include consumer product safety and protection, advertising and marketing, labor and employment, data protection and privacy, intellectual property, workplace health and safety, environmental protection, import and export controls, and tax matters. The U.S. Food and Drug Administration (FDA) regulates certain electro-optical products, grilling, and meat processing products.

Trade & Export Controls: The company is subject to U.S. foreign trade policies, tariffs, and other impositions on imported goods. It is currently impacted by Section 301 tariffs (up to 25%) on certain goods imported from China and utilizes a duty drawback mechanism to offset some of these costs for internationally sold goods. The dynamic tariff landscape is noted as a risk that may increase operating costs and limit long-term planning.

Legal Proceedings: The company is involved in lawsuits, claims, investigations, and proceedings in the ordinary course of business, covering areas such as product liability, intellectual property, commercial relationships, employment issues, and governmental matters. No material expenses in defense and administrative costs or settlement fees related to product liability litigation were incurred in fiscal years 2023, 2024, or 2025.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The effective tax rate was 267.4% in fiscal 2025, 0.6% in fiscal 2024, and 2.0% in fiscal 2023. The federal statutory rate was 21% for these periods.
• Geographic Tax Planning: U.S. income taxes have not been provided on $0.4 million of undistributed earnings of the foreign subsidiary, as the company intends to permanently reinvest these earnings offshore.
• Tax Reform Impact: Federal net operating losses (NOLs) incurred after December 31, 2017, may be carried forward indefinitely.
• Deferred Tax Assets: As of April 30, 2025, the company had federal and state NOL carryforwards of $7.7 million and $5.4 million, respectively, and $0.382 million in federal research and development tax credits.
• Valuation Allowance: A full valuation allowance of $19.1 million was maintained against net deferred income tax assets as of April 30, 2025, based on management's assessment that it is more likely than not that these assets will not be realized. This assessment remained unchanged from the prior fiscal year.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: American Outdoor Brands, Inc. maintains casualty and business interruption insurance, though coverage may not fully protect against all potential losses. Product liability insurance is also maintained, but it is subject to large self-insured retentions. The company periodically reviews its insurance policies, which may not be renewed on similar or favorable terms.
• Self-Insurance: The company transitioned to a self-insured group health insurance program in the prior fiscal year, which includes stop-loss insurance for medical claims exceeding certain limits. Liabilities for estimated incurred losses are recorded on an undiscounted basis.
• Risk Transfer Mechanisms: The company utilizes irrevocable standby letters of credit to collateralize duty drawback bonds, totaling $1.7 million as of April 30, 2025. No amounts have been drawn on these letters of credit during fiscal years 2025 or 2024.