American Outdoor Brands (AOUT) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We are dependent on the proper functioning of our critical facilities, our supply chain, and distribution networks as well as the financial stability of our customers
2. 02We must continue to introduce new products that are successful in the marketplace
3. 03We rely to a significant extent on outsourcing for a substantial portion of our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders
4. 04The costs and availability of finished products, components, and raw materials could affect our business and operating results
5. 05Our business depends to a significant extent upon the brand recognition and reputation of our brands, and the failure to maintain or strengthen our brand recognition and reputation could have a material adverse effect on our business
6. 06We often rely on third parties, including product sourcing intermediaries, independent sales representatives and agents, that act on our behalf
7. 07Our operating results could be materially harmed if we are unable to forecast demand for our products accurately
8. 08An inability to expand our e-commerce business could reduce our future growth
9. 09We operate in highly competitive markets that are characterized by competition from major and small domestic and international companies. Our competitors primarily include a large number of private companies that directly compete with our brands
10. 10Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us. Further, customers often demand that suppliers reduce their prices on mature products, which could lead to lower margins
11. 11We sell our products through online retailers, sport specialty stores, sporting goods stores, dealers and distributors, and mass market home and auto retailers. The world’s largest e-commerce retailer accounted for 20.3% of our fiscal 2025 net sales through its very extensive customer base of end consumers
12. 12Retail pricing decisions made by certain of our customers could negatively impact the pricing for our products in certain online marketplaces
13. 13Changes in the retail industry and the markets for consumer products could negatively impact existing customer relationships and our operating results
14. 14We may not be able to successfully meet the needs of our customers. A substantial decrease in sales to any of our major customers could have a material adverse effect on our business, operating results, and financial condition
15. 15We may have difficulty collecting amounts owed to us
16. 16We are subject to payment-related risks
17. 17Our performance is influenced by a variety of economic, social, political, legislative, and regulatory factors
18. 18Our revenue and profits depend upon the level of consumer spending, which is sensitive to global economic conditions and other factors
19. 19We depend on our Missouri facility, which may not produce the benefits expected
20. 20Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events
21. 21Our business is subject to the risk of terrorism, cyberattacks, or failure of key information technology systems
22. 22Acquisitions involve significant risks, and we may not be able to complete acquisitions that we desire to make in the future
23. 23We may not achieve the desired results of future acquisitions and any acquisitions that we undertake in the future could be difficult to integrate, disrupt our business, dilute stockholder value, and harm our operations and operating results
24. 24Seasonality, weather conditions, and periodic fluctuations, such as changes in customer ordering patterns, may cause our operating results to vary from quarter to quarter
25. 25Our growth strategy may require significant additional funds, the amount of which will depend upon our working capital and general corporate needs
26. 26We may issue a substantial amount of our common stock in the future, which could cause dilution to current investors and otherwise adversely affect our stock price
27. 27The failure to manage our growth could adversely affect our operations
28. 28Liability insurance is expensive and may be difficult to obtain
29. 29Our Board of Directors may change significant corporate policies without stockholder approval
30. 30We depend on key personnel, and our business may be harmed if we fail to retain and attract skilled management and other key personnel
31. 31We are subject to extensive regulation and could incur fines, penalties, and other costs and liabilities under such requirements
32. 32We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights
33. 33We face risks relating to our international business that could adversely affect our business, operating results, and financial condition
34. 34We face risks associated with international activities, including those related to compliance with the Foreign Corrupt Practices Act and other applicable anti-corruption legislation
35. 35Increased protectionist tariffs and trade wars could further harm our business
36. 36The dynamic tariff landscape may increase our operating costs and limit our ability to create or execute our long-term plans
37. 37Interruptions in the proper functioning of our information systems or other issues with our ERP systems could cause disruption to our operations
38. 38We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results
39. 39Breaches of our information systems could adversely affect our reputation, disrupt our operations, and result in increased costs and loss of revenue
40. 40actions; and adverse effects on our compliance with applicable privacy and other laws and regulations. Such occurrences could have an adverse effect on our business, operating results, and financial condition
41. 41Our business involves the potential for product recalls, product liability, and other claims against us, which could adversely affect our earnings and financial condition
42. 42We produce or source and sell products that create exposure to potential product liability, warranty liability, or personal injury claims and litigation
43. 43Environmental laws and regulations may impact our business
44. 44There are risks associated with the Trademark License Agreement

Risks Related to Our Common Stock

1. 45The market price and trading volume of our common stock may be volatile and may continue to be volatile
2. 46Provisions of our Amended and Restated Certificate of Incorporation, our Fourth Amended and Restated Bylaws, and Delaware law may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock
3. 47Our Fourth Amended and Restated Bylaws designate Delaware as the exclusive forum for certain litigation, which may limit our stockholders’ ability to choose a judicial forum for disputes with us
4. 48Your percentage ownership in our company may be diluted in the future
5. 49Our common stock is and will be subordinate to all of our future indebtedness and any series of preferred stock, and effectively subordinated to all indebtedness and preferred equity claims against our subsidiaries

Risks Related to Us as a Public Company

1. 50We are an “emerging growth company” under the JOBS Act, and any decision on our part to comply with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
2. 51reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile
3. 52We will have increased costs as a result of being a public company
4. 53If we fail to maintain effective internal controls, we may not be able to report our financial results accurately or timely or prevent or detect fraud, which would have a material adverse effect on our business or the market price of our securities