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Item 7. Management’s Discussion and Analysis

2026-06-25 compared with 2025-06-26 · 98 added, 73 removed, 167 unchanged (51% of the section changed)

10 unchanged sentences

Our shooting sports category includes net sales of shooting accessories and our products used for personal protection.

Our outdoor lifestyle category includes net sales of our products used in hunting, fishing, camping, rugged outdoor activities, and outdoor cooking.

Our outdoor lifestyle category includes net sales of our products used in hunting, fishing, rugged outdoor activities, and outdoor cooking.

Tariff Developments

The current political and economic environment is dynamic and uncertain, as the current U.S.

Administration has imposed tariffs such as Section 301 and Section 232 of the Trade Act, modified and paused tariffs, and granted exemptions from tariffs, on different countries and products multiple times recently.

In 2025, the U.S.

Administration imposed a series of tariffs on nearly all U.S.

trading partners pursuant to the International Emergency Economic Powers Act of 1977 (“IEEPA”).

On February 20, 2026, the United States Supreme Court issued a ruling striking down tariffs previously imposed under IEEPA.

Immediately following the Supreme Court ruling, the U.S.

government initiated new tariffs under Section 122 of the Trade Act ("Section 122 tariffs") which have been in effect since February 24, 2026.

We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.

In March 2026, the U.S.

Court of International Trade ("CIT") issued an order directing U.S.

Customs and Border Protection ("CBP") to process refunds of certain IEEPA tariffs.

In April 2026, the CBP released a new system to process IEEPA tariff refunds, allowing importers to submit refund claims.

We believe it is probable that we will recover the IEEPA tariffs previously paid and have recognized an IEEPA tariff refund receivable under the loss recovery accounting model of $15.2 million as of April 30, 2026, which was recorded in other current assets.

During the year ended April 30, 2026, we recognized a benefit of $4.4 million related to expected recoveries of previously paid IEEPA tariffs, which was recorded as a reduction of cost of goods sold, representing the expense for IEEPA tariffs on inventory sold to customers since the tariffs were enacted in February 2025.

Additionally, we reduced the carrying value of inventory on hand as of April 30, 2026 by $10.7 million for tariffs previously capitalized as cost of inventory.

The ultimate timing and amount of recoveries remain subject to review and processing by governmental authorities and could be affected by future legal, regulatory, or administrative developments.

In addition, there continues to be uncertainty regarding existing and proposed tariff regimes, including the potential imposition, modification, suspension, or invalidation of tariffs under various statutory authorities.

The Company continues to monitor tariff-related developments and assess their potential impact on its business, financial condition, and results of operations.

Brand Divestiture

On December 12, 2025, our Board of Directors approved a plan to divest our ust branded product line (the “Disposal Group”).

The Disposal Group consists primarily of inventory and long-lived intangible assets associated with the brand.

We expect to complete the divestiture within twelve months.

The Disposal Group does not represent a strategic shift that will have a major effect on our operations or financial results.

We concluded that the Disposal Group met the criteria for classification as held for sale under ASC 360-10 – Property, Plant, and Equipment during the year ended April 30, 2026 and does not qualify as discontinued operations under ASC 205-20 – Presentation of Financial Statements.

The results of the Disposal Group will continue to be reported within continuing operations.

Fiscal 2026 Highlights

Our operating results for fiscal 2026 included the following:

• Net sales were $222.3 million, an increase of $21.2 million, or 10.6%, over the prior fiscal year, primarily because of an increase in net sales in our traditional channel.

• Net sales were $190.5 million, a decrease of $31.8 million, or 14.3%, from the prior fiscal year.

• Gross margin was 44.7%, an increase of 10 basis points over the prior fiscal year.

• Net loss was $77,000, or ($0.01) per diluted share, compared with a net loss of $12.2 million, or ($0.94) per diluted share, for the prior fiscal year.

• Net loss was $9.2 million, or $(0.73) per diluted share, compared with a net loss of $77,000, or $(0.01) per diluted share, for the prior fiscal year.

• Non-GAAP Adjusted EBITDA was $10.2 million, compared with $17.7 million for the prior fiscal year.

See non-GAAP financial measure disclosures below for our reconciliation of Non-GAAP Adjusted EBITDA.

• We repurchased a total of 374,446 shares of our common stock, in the open market, for $3.8 million during fiscal 2025.

• We repurchased a total of 551,283 shares of our common stock, in the open market, for $5.1M during fiscal 2026.

Results of Operations

31 unchanged sentences

Fiscal 2026 Net Sales Compared with Fiscal 2025

Total net sales increased $21.2 million, or 10.6%, over the prior fiscal year primarily because of an increase in hunting, shooting accessories, meat processing, and fishing product net sales in our domestic channel as well as an increase in shooting accessories product net sales to international retailers.

E-commerce channel net sales increased primarily because of higher hunting and fishing product net sales in our outdoor lifestyle category, partially offset by lower net sales in our shooting sports category.

Net sales in our traditional channels increased $21.1 million, or 18.1%, over the prior fiscal year.

During our fourth fiscal quarter, we experienced increased orders resulting in higher shipments of our products to our traditional channel customers.

Traditional channel net sales increased primarily because of higher net sales of shooting accessories in our shooting sports category and higher net sales of our hunting, fishing, and meat processing products in our outdoor lifestyle category.

In addition, our international net sales increased $2.4 million, or 20.0%, over the prior fiscal year as a result of increased sales in Canada and European countries.

We believe a portion of the traditional channel increase was a result of certain customers accelerating orders that we had originally planned to receive in our first fiscal quarter of 2026, which we believe was due to the anticipated increased costs associated with tariffs imposed by the U.S.

administration in March and April of 2025.

New products, which we define as any SKU introduced over the prior two fiscal years, represented 21.5% of net sales for fiscal 2025 compared to 23.2% of net sales for fiscal 2024.

We have a history of introducing over 200 new SKUs each year.

Total net sales decreased $31.8 million, or 14.3%, from the prior fiscal year because of a decrease in all our channel and category sales primarily from reduced orders from the world's largest online retailer and our belief that a large portion of traditional channel sales were accelerated from our first fiscal quarter of 2026 into the fourth fiscal quarter of 2025, as mentioned below.

The decrease in total net sales were partially offset by pricing actions taken on our products to mitigate additional tariff costs associated with tariffs imposed by the U.S.

Administration starting in March and April of 2025.

E-commerce channel net sales decreased $13.2 million, or 15.6%, from the prior fiscal year primarily because of lower net sales to the world's largest online retailer in most of our product categories.

We believe this decline reflects their inventory management actions, which reduced net sales across most of our products.

In addition, we had lower direct-to-consumer net sales for products sold on our websites due to reduced consumer demand.

Net sales in our traditional channels decreased $18.6 million, or 13.5%, from the prior fiscal year.

This decrease was driven by the majority of our product categories, partially offset by increased net sales of outdoor cooking equipment.

We believe a large portion of the traditional channel decrease was a result of certain customers accelerating orders from our first fiscal quarter of 2026 into the fourth fiscal quarter of 2025.

We believe this was due to the anticipated increased costs associated with tariffs imposed by the U.S.

Administration in March 2025 and April 2025.

New products represented 29.1% of net sales for fiscal 2026 compared to 21.5% of net sales for fiscal 2025.

We have a history of introducing over 200 new products each year.

Our order backlog as of April 30, 2026 was $1.6 million, or $1.0 million lower than at the end of fiscal 2025.

1 unchanged sentence

Fiscal 2026 Cost of Sales and Gross Profit Compared with Fiscal 2025

Gross margin for fiscal 2025 increased 60 basis points over the prior fiscal year, primarily from higher net sales volumes, partially offset by product and customer mix and higher tariff, freight, and duty expenses from increased inventory purchases earlier in fiscal 2025.

Gross margin for fiscal 2026 increased 10 basis points over the prior fiscal year, primarily from our pricing actions mentioned above as well as a higher percentage of new product sales that typically have higher gross margins, offset by sales of slow-moving inventory at lower margins, increased depreciation expense, and higher inbound freight and tariff costs.

Operating Expenses

4 unchanged sentences

General and administrative 32,926 36,145 (3,219) (8.9) %

Impairment of assets held for sale 3,433 — 3,433 100.0 %

Total operating expenses $ 94,194 $ 99,418 $ (5,224) (5.3) %

1 unchanged sentence

Fiscal 2026 Operating Expenses Compared with Fiscal 2025

Operating expenses in fiscal 2025 decreased $1.5 million from the prior fiscal year.

Research and development expenses increased $859,000, primarily from increased depreciation for new product tooling compared to the prior fiscal year.

Selling, marketing, and distribution expenses increased $513,000 over the prior fiscal year, primarily because of higher sales volume-related expenses, including higher freight costs and commissions, and higher rent expenses.

General and administrative expenses decreased $2.9 million from the prior fiscal year primarily because of $3.4 million of lower acquired intangible amortization and $613,000 of lower legal and advisory fees, partially offset by higher compensation-related expenses.

Total operating expenses of $94.2 million included a $3.4 million non-cash impairment charge during fiscal 2026 related to the write-down of the Disposal Group assets to estimated fair value less costs to sell.

Total operating expenses, excluding this non-cash impairment charge, were $90.8 million, or $8.7 million lower than the prior fiscal year.

Research and development expenses decreased $1.6 million, primarily from decreased depreciation expense for new product tooling compared to the prior fiscal year.

Selling, marketing, and distribution expenses decreased $3.8 million from the prior fiscal year, primarily because of lower sales volume-related expenses, including outbound freight costs and commissions.

General and administrative expenses decreased $3.2 million from the prior fiscal year primarily because of lower variable compensation-related expenses, cost-saving initiatives, and acquired intangible amortization expense, partially offset by higher public company costs.

Operating Loss

1 unchanged sentence

2026 2025 $ Change % Change

Operating loss $ (154) $ (12,497) $ 12,343 98.8 %

Operating loss $ (9,000) $ (154) $ (8,846) NM

% of net sales (operating margin) (4.7) % — %

Fiscal 2026 Operating Loss Compared with Fiscal 2025

We had a decrease of $12.2 million in operating loss from the prior fiscal year primarily because of increased net sales and lower operating expenses partially offset from an increase in cost of goods sold.

Interest Income/(Expense), Net

The following table sets forth certain information regarding interest income/(expense), net for the fiscal years ended April 30, 2025 and 2024 (dollars in thousands):

We recorded an operating loss of $9.0 million for fiscal 2026 compared to an operating loss of $154,000 in fiscal 2025.

This decrease was primarily driven by lower net sales volume, partially offset by $5.2 million decrease in operating expenses.

Interest (Expense)/Income, Net

The following table sets forth certain information regarding interest (expense)/income, net for the fiscal years ended April 30, 2026 and 2025 (dollars in thousands):

2026 2025 $ Change % Change

Interest income/(expense), net $ 60 $ 39 $ 21 53.8 %

Fiscal 2025 Interest Income/(Expense) Compared with Fiscal 2024

Interest income was $60,000 compared to interest income of $39,000 in the prior fiscal year.

Interest (expense)/income, net $ (276) $ 60 $ (336) NM

Fiscal 2026 Interest (Expense)/Income Compared with Fiscal 2025

Interest expense was $276,000 compared to interest income of $60,000 in the prior fiscal year as a result of servicing our borrowings on our credit facility during fiscal 2026.

We had no borrowings on our revolving line as of April 30, 2026.

1 unchanged sentence

2026 2025 $ Change % Change

Income tax (benefit) $ 123 $ (70) $ 193 275.7 %

Income tax expense $ 45 $ 123 $ (78) (63.4) %

% of income from operations (effective tax rate) (0.5) % 267.4 % (267.9) %

Fiscal 2025 Income Tax Benefit Compared with Fiscal 2024

We recorded an income tax expense of $123,000 for fiscal 2025 as compared to income tax benefit of $70,000 for fiscal 2024.

Fiscal 2024 income tax benefit was primarily because of the impact of refundable state tax credits.

The effective tax rates were 267.4% and 0.6% for fiscal 2025 and 2024, respectively.

Fiscal 2026 Income Tax Expense Compared with Fiscal 2025

We recorded an income tax expense of $45,000 for fiscal 2026 as compared to income tax expense of $123,000 for fiscal 2025.

The income tax expense recorded for fiscal year 2026 and 2025 was primarily due to a full valuation allowance recorded against our deferred tax assets.

The following table sets forth certain information regarding net loss and the related per share data for the fiscal years ended April 30, 2026 and 2025 (dollars in thousands, except per share data):

2026 2025 $ Change % Change

Net loss $ (77) $ (12,248) $ 12,171 -99.4 %

Net loss $ (9,208) $ (77) $ (9,131) NM

Net loss per share

Basic $ (0.01) $ (0.94) $ 0.93 -98.9 %

Diluted $ (0.01) $ (0.94) $ 0.93 -98.9 %

Basic and diluted $ (0.73) $ (0.01) $ (0.72) NM

Fiscal 2026 Net Loss Compared with Fiscal 2025

We had a net loss of $77,000, or ($0.01) per diluted share in fiscal 2025 compared to $12.2 million, or ($0.94) per diluted share in fiscal 2024.

We had a net loss of $9.2 million, or $(0.73) per diluted share in fiscal 2026 compared to a net loss of $77,000, or $(0.01) per diluted share in fiscal 2025.

Non-GAAP Financial Measure

17 unchanged sentences

GAAP net loss $ (9,208) $ (77)

Interest (income)

Income tax expense/(benefit)

Interest expense/(income) 276 (60)

Income tax expense 45 123

Depreciation and amortization 12,322 13,179

Stock compensation 3,071 3,500

Impairment of assets held for sale 3,433 —

Technology implementation 41 —

Tariff drawback adjustment

Non-recurring inventory reserve adjustment

Emerging growth status transition costs

Contract exit costs 62 —

Other 151 100

25 unchanged sentences

Cash generated in operating activities was $6.3 million for fiscal 2026 compared to cash generation of $1.4 million for the prior fiscal year.

Cash generated in operating activities for fiscal 2025 was primarily impacted from a $12.2 million lower net loss than the prior fiscal year, $4.2 million higher accrued expenses from increased tariff costs, lower prepaid and other current assets of $2.4 million as a result of lower deposits on inventory, and $1.7 million of increased accrued payroll and incentives because of higher compensation-related accruals, partially offset by an increase in accounts receivable of $13.6 million as a result of timing of customer shipments as we believe certain customers accelerated orders into our fourth fiscal quarter, which we believe was due to increased costs associated with tariffs imposed by the U.S.

administration.

In addition, we increased our inventory by $11.4 million to plan for new product introductions that will be released in our next fiscal year and increased inbound freight associated with heightened tariff costs.

We expect our inventory balance to increase in our first quarter of fiscal 2026 because of increased inventory purchases to support the fall hunting and winter holiday shopping seasons as well as inventory for new products that we expect to launch later in the year.

In addition, we believe our inventory balances will increase as a result of the impact of additional tariffs imposed by the U.S.

administration.

Cash generated in operating activities for fiscal 2026 was primarily impacted by a $10.5 million decrease in accounts receivable driven by timing of customer payments and product shipments as certain traditional channel customers were believed to have accelerated orders from our first fiscal quarter of 2026 into the fourth fiscal quarter of 2025.

In addition, inventory decreased $9.4 million primarily because of the recognition of an IEEPA tariff refund that reduced the carrying value of our inventory;

the reclassification of approximately $3.5 million of inventory to assets held for sale for the planned divestiture of the Disposal Group;

and lower inventory purchases as a result of a planned reduction of our overall inventory balance.

Cash generated in fiscal 2026 was partially offset by $15.2 million of increased other current assets because of a $15.2 million IEEPA tariff refund receivable recorded for our initial claim of previously paid IEEPA tariffs from tariffs enacted by the U.S.

Administration starting in February 2025.

Subsequent to April 30, 2026, we received $2.9 million of the $15.2 million IEEPA refund receivable.

In addition, we recorded $4.2 million of lower accrued payroll and incentives because of lower variable-related compensation expenses, $2.2 million of lower accrued expenses from lower tariff and duty accruals, and $1.6 million of lower accounts payable due to timing of supplier shipments

During fiscal 2026, we recorded a $3.4 million non-cash impairment charge related to the write-down of the Disposal Group assets to estimated fair value less costs to sell.

The impairment charge was non-cash and did not impact our liquidity, cash flows from operations, or compliance with debt covenants.

We expect the transaction to close within the next twelve months;

however, the timing and ultimate proceeds remain subject to market conditions and buyer negotiations.

Proceeds from the sale, if completed, are expected to be used for general corporate purposes.

Investing Activities

Cash used in investing activities was $2.5 million for fiscal 2026, compared with cash usage of $3.9 million for the prior fiscal year.

The decrease in cash used in investing activities is because of the lease assignment in the prior fiscal year, as mentioned below, that required additional racking and equipment in our warehouse in fiscal 2024.

This was largely attributable to reduced expenditures on product tooling purchases.

We expect to spend approximately $3.5 million to $4.0 million of capital expenditures in fiscal 2027.

Financing Activities

1 unchanged sentence

Cash used in financing activities in fiscal 2026 was because of $5.1 million of payments to repurchase our common stock under our authorized stock repurchase program.

Cash used in financing activities in fiscal 2024 was because of $5.0 million of payments on our revolving line of credit and $6.0 million of payments to repurchase our common stock under our authorized stock repurchase program.

On January 31, 2023, we entered an Assignment Agreement with our former parent company and RCS – S&W Facility, LLC to assign to us the rights of the tenant under the Lease Agreement, dated October 26, 2017, as amended by the First Amendment of Lease Agreement, dated October 25, 2018, and as further amended by the Second Amendment to Lease Agreement, dated January 31, 2019 (collectively, the “Lease”), which assignment was effective on January 1, 2024.

The Lease covers approximately 632,000 square feet of building and surrounding property located at 1800 North Route Z, Columbia, Missouri.

We lease the entire building and the Lease provides us with an option to expand the Building by up to 491,000 additional square feet.

The terms of the Lease are consistent with the sublease agreement that we formerly had with our former parent company.

The Lease term ends on November 26, 2038 and, pursuant to the Assignment Agreement, does not provide for an extension of the term of the Lease.

We will receive tax and other incentives from federal, state, and local governmental authorities previously received by our former parent.

Our former parent will guarantee the Lease through the end of the term.

During fiscal year ended April 30, 2024, we recorded a right-of-use asset and lease liability of $10.6 million for the additional space provided under the Assignment Agreement.

Cash used in financing activities in fiscal 2025 was because of $3.8 million of payments to repurchase our common stock under our authorized stock repurchase program.

Our future capital requirements will depend on many factors, including net sales, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, any acquisitions or strategic investments that we may determine to make, and changes in consumer spending, which is sensitive to economic conditions and other factors.

Further equity or debt financing may not be available to us on acceptable terms or at all.

If sufficient funds are not available or are not available on acceptable terms, our ability to take advantage of unexpected business opportunities or to respond to competitive pressures could be limited or severely constrained.

We had $21.4 million of cash equivalents on hand as of April 30, 2026 and had $23.4 million in cash and cash equivalents on hand as of April 30, 2025.

As of April 30, 2026, we had approximately $75.0 million available under our revolving credit facility, which matures in March 2031.

We were in compliance with all financial covenants under the facility as of April 30, 2026.

We lease warehouse, manufacturing, distribution and office facilities under long-term operating lease arrangements.

Additional information regarding lease obligations is included in Note 5 — Leases to the consolidated financial statements.

In the ordinary course of business, we enter into inventory purchase commitments with suppliers to support forecasted customer demand.

These commitments are generally short-term in nature and are not individually material.

We also maintain commitments under certain service and information technology arrangements entered into in the normal course of business.

We have been impacted by changes in prices of finished product inventory from our suppliers and logistics as well as other inflationary factors, such as increased interest rates, tariffs, and increased labor and overhead costs.

10 unchanged sentences

We estimate sales adjustments by customer or by product category on the basis of our historical experience with similar contracts with customers, adjusted as necessary to reflect current facts and circumstances and our expectations for the future.

Valuation of Long-lived Intangible Assets

Valuation of Long-lived Assets

We evaluate the recoverability of long-lived assets, or asset group, on an annual basis or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable.

22 unchanged sentences

The nature and impact of recent accounting pronouncements is discussed in Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements, which is incorporated herein by reference.

Contractual Obligations and Commercial Commitments

The following table sets forth a summary of our material contractual obligations and commercial commitments as of April 30, 2025 (in thousands):

Total Less Than

1 Year 1-3 Years 3-5 Years More Than

Interest on debt $ 184 $ 96 $ 88 $ — $ —

Operating lease obligations 49,771 3,379 10,359 7,106 28,927

Purchase obligations 30,131 30,131 — — —

Total obligations $ 80,086 $ 33,606 $ 10,447 $ 7,106 $ 28,927

As of April 30, 2025, we had no borrowings outstanding on our revolving line of credit.

We are required to make interest payments for the unused portion of our revolving line of credit in accordance with the financing arrangement.

Future unused loan fee obligations are not included above, which could accumulate up to approximately $185,000 per year, under certain circumstances, until the maturity date in fiscal 2027.

Interest on debt is based on outstanding debt as of April 30, 2025, and includes debt issuance costs to be amortized over the life of the financing arrangement.

Operating lease obligations represent required minimum lease payments during the noncancelable lease term.

Most real estate leases also require payments of related operating expenses such as taxes, insurance, utilities, and maintenance, which are not included above.

See Note 4, Leases , for additional information.

Purchase obligations represent binding commitments to purchase raw materials, contract production, and finished products that are payable upon delivery of the inventory.

This obligation excludes the amount included in accounts payable at April 30, 2025 related to inventory purchases.

Other obligations, included in our purchase obligations represent other binding commitments for the expenditure of funds, including (i) amounts related to contracts not involving the purchase of inventories, such as operating expenses, (ii) capital spending, and (iii) advertising.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis