American Outdoor Brands, Inc. (NASDAQ:AOUT) Q2 2023 Earnings Call Transcript

Brian Murphy: Yes, Mark, this is Brian again. So, Andy, feel free to jump in. I would say as it relates to deal volume in terms of bankers bringing deals to market has slowed pretty significantly. And I think there’s several reasons for that, obviously, interest rates are going up. Banks are a little bit more hesitant to provide leverage on questionable EBITDA for some of the companies that are looking to sell and then you’ll have seller expectations that might be where they were a year ago. And so there needs to be some reconciliation there. So fewer deals coming to market right now. But with that said, we do have our own pipeline that we’re constantly working on and speaking with founders in particular, or even private equity on businesses.

So we still see quite a quite a few deals. Just the last few weeks alone we’ve had several converts stations with folks. And we continue to explore what those look like. I would say I wouldn’t be surprised that there are few more distressed situations coming to market, which also presents some opportunity. And we have some experience in that respect, looking at companies that are a little bit more distressed. So it is something we’re keeping your eyes on. But there were some companies, more entrepreneurial companies, founder led businesses that in an effort to grow quickly, maybe put on too much debt on the business. And maybe in a distressed situation, so we’re keeping a close eye on that, and looking to see if there are opportunities to partner but we’re being very cautious.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Brian Murphy for any closing remarks.

Brian Murphy: Thank you, operator. Before we close, I want to let everyone know we’ll be participating in the ROTH Conference in Deer Valley next week. In January, we’ll be attending SHOT Show in Las Vegas, and will also be participating in the Lake Street Outdoor Conference. We hope to connect with some of you at these upcoming events. As we head into the holidays, I want to give a special thanks to our employees whose loyalty, hard work, dedication continues to move American Outdoor Brands forward on the path towards an exciting long-term future. To those employees and to everyone else who joined us today, we wish you a happy and healthy holiday season. And we look forward to speaking with you again next quarter.

Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.