AXIL Brands Reports Second Quarter Fiscal Year 2025 Financial Results

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$(R)$ hearing protection and enhancement products and Reviv3(R) 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 

"The second quarter of our fiscal year is seasonally strong due to the holiday shopping season. However, the 2Q25 period was slightly different than 2Q24 from a timing and reporting standpoint, as Cyber Monday and the day before Cyber Monday in calendar year 2024 fell into our fiscal third quarter, whereas the full holiday weekend from Black Friday to Cyber Monday was part of our second quarter of fiscal 2024. Consequently, a significant portion of these sales will be recognized in the third quarter of this fiscal year," commented AXIL Chairman and Chief Executive Officer Jeff Toghraie.

"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,     May 31, 
                                               2024           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 
                                              ----------   ---------- 
 

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