Business
AXIL Brands Reports Third Quarter Fiscal Year 2025 Financial Results
AXIL Brands Reports Third Quarter Fiscal Year 2025 Financial
About this update from Axil Brands, Inc.
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® hearing protection and enhancement products and Reviv3® 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 28, 2025 February 29, 2024 February 28, 2025 February 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 28 , 2025 February 29 , 2024 February 28 , 2025 February 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® brand and premium hair and skincare products under its in-house Reviv3® brand - selling products in the United States , Canada , the European Union , and throughout Asia . To learn more, please visit the Company's AXIL® website at www.axilbrands.com and its Reviv3® 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 [email protected] Source: AXIL Brands, Inc. 2025 GlobeNewswire, Inc., source Press Releases