AXIL Brands Reports Third Quarter Fiscal Year 2025 Financial Results
LOS ANGELES, April 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 financial and operational results for the third quarter ended February 28, 2025 (3Q25).
Financial Highlights for the Quarter Ended February 28, 2025
-- Revenue in 3Q25 was $6.9 million, as compared to $6.5 million in the
prior year period
-- Gross profit as a percentage of sales was 71.7% in 3Q25, as compared to
71.5% for the prior year period
-- Operating expenses as a percentage of sales were 63.3% in 3Q25, as
compared to 73.1% for the prior year period
-- Net income in 3Q25 was $0.6 million, as compared to $0.8 million in the
prior year period
-- Adjusted EBITDA in 3Q25 was $0.9 million, as compared Adjusted EBITDA
loss of $11 thousand for the prior year period
-- Net cash provided by operating activities for the nine months ended
February 28, 2025 was $1.7 million, as compared to $0.3 million for the
nine months ended February 29, 2024
-- Cash as of February 28, 2025 was $4.7 million, as compared to $3.3
million as of May 31, 2024
-- Basic and diluted earnings per share for 3Q25 were $0.09 and $0.07,
respectively, compared to $0.13 and $0.04, respectively, in the prior
year period
"Q325 was a strong quarter for AXIL as we continued to execute on our multi-channel growth strategy. We expanded into new geographic markets, deepened our retail distribution, and capitalized on Cyber Monday's timing shift to drive meaningful growth in direct-to-consumer revenue," said Jeff Toghraie, AXIL Chairman and Chief Executive Officer.
"Equally important, this quarter marked a meaningful inflection point in our operational performance. We delivered $0.9 million positive Adjusted EBITDA, a notable improvement from a loss in the prior-year period. We also drove a substantial reduction in operating expenses as a percentage of revenue and generated significantly higher operating cash flow. These results reflect our commitment to disciplined execution and continued progress in strengthening our core business."
"We've also taken decisive action to proactively address risks tied to evolving U.S. trade policy. With new tariffs now in effect, we are accelerating our supply chain transition strategy--relocating key operational leadership to the U.S. and initiating plans to build out domestic manufacturing capabilities. These moves are designed not just to manage near-term disruptions, but to enhance AXIL's long-term resilience and control over its cost structure. We believe these steps will better position the company to navigate volatility and capitalize on future growth opportunities."
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 NINE MONTHS ENDED FEBRUARY 28, 2025
AND FEBRUARY 29, 2024
(UNAUDITED)
For the Three Months Ended For the Nine Months Ended
-------------------------- ----------------------------
February February February February
28, 2025 29, 2024 28, 2025 29, 2024
---------- ---------- ----------- -----------
Net income (GAAP) $ 576,662 $ 781,091 $ 1,100,563 $ 1,953,618
Provision
(benefit) for
income taxes 53,085 (827,436) 120,335 (397,054)
Interest
income, net (42,920) (51,420) (97,595) (124,454)
Depreciation
and
amortization 45,666 27,614 93,001 83,634
--------- --------- ---------- ----------
Total EBITDA
(Non-GAAP) 632,493 (70,151) 1,216,304 1,515,744
Adjustments:
Stock-based
compensation 258,053 59,099 860,517 161,314
Total Adjusted
EBTIDA
(Non-GAAP) $ 890,546 $ (11,052) $ 2,076,821 $ 1,677,058
========= ========= ========== ==========
Sales, net (GAAP) $6,922,367 $6,469,343 $20,506,213 $20,997,289
Adjusted EBITDA
as a percentage
of Sales, net
(Non-GAAP) 12.9% (0.2)% 10.1% 8.0%
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
February 28, 2025 May 31, 2024
------------------- --------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 4,743,470 $ 3,253,876
Accounts receivable, net 801,390 509,835
Inventory, net 2,744,436 3,394,023
Prepaid expenses and other
current assets 961,876 809,126
--------------- ----------
Total Current Assets 9,251,172 7,966,860
--------------- ----------
OTHER ASSETS:
Property and equipment, net 375,035 260,948
Intangible assets, net 357,793 309,104
Right of use asset 672,221 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 3,699,775 3,007,501
--------------- ----------
TOTAL ASSETS $ 12,950,947 $ 10,974,361
=============== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable $ 896,365 $ 967,596
Customer deposits 38,586 154,762
Contract liabilities --
current 786,834 905,311
Notes payable 140,958 146,594
Due to related party 28,576 11,798
Lease liability, current 227,418 36,752
Income tax liability 120,335 242,296
Other current liabilities 210,679 332,936
--------------- ----------
Total Current Liabilities 2,449,751 2,798,045
--------------- ----------
LONG TERM LIABILITIES:
Lease liability, long term 482,842 --
Contract liabilities -- long
term 361,488 480,530
--------------- ----------
Total long term liabilities 844,330 480,530
--------------- ----------
Total Liabilities 3,294,081 3,278,575
--------------- ----------
Commitments and contingencies -- --
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 par
value; 300,000,000 shares
authorized; 27,773,500 and
42,251,750 shares issued and
outstanding as of February
28, 2025 and May 31, 2024,
respectively 2,777 4,225
Common stock, $0.0001 par
value: 450,000,000 shares
authorized; 6,649,852 and
5,908,939 shares issued and
outstanding as of February
28, 2025 and May 31, 2024,
respectively 666 591
Additional paid-in capital 8,687,130 7,825,240
Retained
Earnings/(Accumulated
deficit) 966,293 (134,270)
--------------- ----------
Total Stockholders' Equity 9,656,866 7,695,786
--------------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 12,950,947 $ 10,974,361
=============== ==========
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2025
AND FEBRUARY 29, 2024
(UNAUDITED)
For the Three Months
Ended For the Nine Months Ended
------------------------ -------------------------
February February February February
28, 2025 29, 2024 28, 2025 29, 2024
---------- ----------- ----------- -----------
Sales, net $6,922,367 $ 6,469,343 $20,506,213 $20,997,289
Cost of sales 1,955,939 1,845,017 5,888,090 5,467,458
--------- ---------- ---------- ----------
Gross profit $4,966,428 $ 4,624,326 $14,618,123 $15,529,831
--------- ---------- ---------- ----------
OPERATING
EXPENSES:
Sales and
marketing $2,994,052 $ 3,398,949 $ 9,041,283 $10,278,570
Compensation and
related taxes 200,156 228,869 667,478 713,504
Professional and
consulting 796,689 687,138 2,480,707 1,990,426
General and
administrative 392,422 413,249 1,313,377 1,213,541
--------- ---------- ---------- ----------
Total Operating
Expenses $4,383,319 $ 4,728,205 $13,502,845 $14,196,041
--------- ---------- ---------- ----------
INCOME (LOSS) FROM
OPERATIONS $ 583,109 $ (103,879) $ 1,115,278 $ 1,333,790
--------- ---------- ---------- ----------
OTHER INCOME
(EXPENSE):
Gain on
settlement -- -- -- 79,182
Other income 3,718 6,114 8,025 19,138
Interest income 44,191 52,915 100,162 129,233
Interest expense
and other
finance
charges (1,271) (1,495) (2,567) (4,779
--------- ---------- ---------- ----------
Other income
(expense), net $ 46,638 $ 57,534 $ 105,620 $ 222,774
--------- ---------- ---------- ----------
INCOME (LOSS)
BEFORE PROVISION
FOR INCOME TAXES $ 629,747 $ (46,345) $ 1,220,898 $ 1,556,564
Provision (benefit)
for income taxes 53,085 (827,436) 120,335 (397,054
--------- ---------- ---------- ----------
NET INCOME $ 576,662 $ 781,091 $ 1,100,563 $ 1,953,618
========= ========== ========== ==========
NET INCOME PER
COMMON SHARE:
Basic $ 0.09 $ 0.13 $ 0.17 $ 0.33
========= ========== ========== ==========
Diluted $ 0.07 $ 0.04 $ 0.13 $ 0.11
========= ========== ========== ==========
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 6,516,852 5,863,939 6,373,502 5,863,939
========= ========== ========== ==========
Diluted 8,202,402 18,576,914 8,196,605 18,569,140
========= ========== ========== ==========
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY
29, 2024
(UNAUDITED)
For the Nine Months Ended
---------------------------------------------
February 28, 2025 February 29, 2024
----------------- -------------------------
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net income $ 1,100,563 $ 1,953,618
Adjustments to
reconcile net
income to net
cash provided by
operating
activities:
Depreciation
and
amortization 93,001 83,634
Provision for
credit
losses 31,834 143,395
Reversal of
inventory
obsolescence (23,448) --
Stock-based
compensation 860,517 161,314
Gain on
forgiveness
of account
payable (218,699) --
Gain on
settlement -- (79,182)
Deferred
income taxes 109,796 (397,054)
Change in
operating assets
and
liabilities:
Accounts
receivable (323,389) (445,883)
Inventory 673,034 (2,131,429)
Prepaid
expenses and
other current
assets (156,574) 145,032
Accounts
payable 147,472 1,061,420
Other current
liabilities (322,358) (144,052)
Contract
liabilities (237,519) (11,490)
--- ------------ ------------- ----------
NET CASH PROVIDED BY
OPERATING
ACTIVITIES 1,734,230 339,323
--- ------------ ------------- ----------
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchase of
intangibles (101,690) --
Purchase of
property and
equipment (154,088) (80,192)
--- ------------ ------------- ----------
NET CASH USED IN
INVESTING
ACTIVITIES (255,778) (80,192)
--- ------------ ------------- ----------
CASH FLOWS FROM
FINANCING
ACTIVITIES
Repayment of
equipment
financing -- (2,200)
Repayment of note
payable (5,636) (25,438)
Advances from
(payments to) a
related party 16,778 (176,608)
--- ------------ ------------- ----------
NET CASH PROVIDED BY
(USED IN) FINANCING
ACTIVITIES 11,142 (204,246)
--- ------------ ------------- ----------
NET INCREASE IN CASH 1,489,594 54,885
CASH -- Beginning of
period 3,253,876 4,832,682
--- ------------ ------------- ----------
CASH -- End of
period $ 4,743,470 $ 4,887,567
=== ============ ============= ==========
SUPPLEMENTAL
DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during
the period for:
Interest $ 2,567 $ 4,681
=== ============ ============= ==========
Income taxes $ 132,500 $ --
=== ============ ============= ==========
SUPPLEMENTAL
DISCLOSURE OF
NON-CASH INVESTING
ACTIVITIES:
Initial
recognition of
right of use
assets
recognized as
lease liability $ 767,269 $ --
=== ============ ============= ==========
About AXIL Brands
AXIL Brands (NYSE American: AXIL) is an emerging global consumer products company. The Company is a manufacturer and marketer of premium hearing enhancement and protection products, including ear plugs, earmuffs, and ear buds, under the AXIL(R) brand and premium hair and skincare products under its in-house Reviv3(R) brand - selling products in the United States, Canada, the European Union, and throughout Asia.
To learn more, please visit the Company's AXIL(R) website at www.axilbrands.com and its Reviv3(R) website at www.reviv3.com.
Forward-Looking Statements
This press release contains a number of forward-looking statements within the meaning of the federal securities laws. The use of words such as "anticipate," "believe," "expect," "continue," "will," "prepare," "should," and "focus," among others, generally identify forward-looking statements. These forward-looking statements are based on currently available information, and management's beliefs, projections, and current expectations, and are subject to a number of significant risks and uncertainties, many of which are beyond management's control and may cause the Company's results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things: (i) the Company's ability to grow its net sales and operations, including developing new and improved products, diversifying and expanding its distribution and retail channels, and expanding internationally, and perform in accordance with any guidance; (ii) the Company's ability to generate sufficient revenue to support the Company's operations and to raise additional funds or obtain other forms of financing as needed on acceptable terms, or at all; (iii) potential difficulties or delays the Company may experience in implementing its cost savings and efficiency initiatives; (iv) the Company's ability to compete effectively with other hair and skincare companies and hearing enhancement and protection companies; (v) the concentration of the Company's customers, potentially increasing the negative impact to the Company by changing purchasing or selling patterns; (vi) changes in laws or regulations in the United States and/or in other major markets, such as China, in which the Company operates, including, without limitation, with respect to taxes, tariffs, trade policies or product safety, which may increase the Company's product costs and other costs of doing business, and reduce the Company's earnings; (vii) the Company's ability to engage in acquisitions, investments, partnerships, strategic alliances or dispositions when desired, including the potential divestiture of the Company's hair and skin care business; (viii) the Company's ability to successfully accelerate its supply chain transition strategy and achieve the intended benefits; and (ix) the impact of unstable market and general economic conditions on the Company's business, financial condition and stock price, including inflationary cost pressures, the possibility of an economic recession and other macroeconomic factors, geopolitical events, and uncertainty, increased tariffs and other trade restrictions and barriers, decreased discretionary consumer spending, supply chain disruptions and constraints, labor shortages, ongoing economic disruption, including the effects of the Ukraine-Russia conflict and conflict in the Middle East, and other downturns in the business cycle or the economy. There can be no assurance as to any of these matters, and potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. Other important factors that may cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the Company's filings with the U.S. Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company does not assume any obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
Investor Relations:
Todd McKnight
(917) 349-2175
investors@goaxil.com
(END) Dow Jones Newswires
April 08, 2025 08:00 ET (12:00 GMT)
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