UPDATE – AXIL Brands, Inc. Reports Record Fiscal Year 2024 Financial Results

LOS ANGELES, Aug. 15, 2024 (GLOBE NEWSWIRE) — AXIL Brands, Inc. (“AXIL,” “we,” “us,” “our,” 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, today announced financial and operational results for fiscal year 2024.

Highlights for Fiscal Year Ended May 31, 2024

All comparisons are to the full year of the prior year, unless otherwise noted.

  • Consolidated net sales (revenue) increased 17% to a record $27.5 million compared to $23.5 million in the prior year primarily due to the increase in marketing and sales initiatives in our hearing protection and enhancement segment. 
  • Cost of sales increased by $1,494,386 or 26%, as compared to the comparable period in 2023 due to increases in our branding and marketing initiatives which increased our sales, thereby leading to an increased cost of sales. Cost of sales as a percentage of net revenues for the fiscal year ended May 31, 2024 was 26.6% as compared to 24.7% for the comparable period in 2023.
  • Gross profit as a percentage of sales was 73.4% for the fiscal year ended May 31, 2024, compared to 75.3% for the prior year. The decrease in gross profit, as a percentage of sales, was primarily attributable to costs associated with expansion into new retail and distribution channels.
  • Operating expenses as a percentage of net revenues were 68.0% for the fiscal year ended May 31, 2024, compared to 66.9% for the full year 2023. The increase was primarily due to higher marketing and selling expenses, increased compensation, and a rise in general and administrative expenses, including expenses associated with our listing on the NYSE American exchange.
  • Net income per common share on fully diluted basis was $0.21, including $0.08 of gain on redemption of preferred shares, compared to $0.10 for the prior year. Net income per common share on basic basis was $0.57, including $0.23 gain on redemption of preferred shares, compared to $0.32 for the prior year.
  • Diluted earnings per share for 2024 reflects weighed average outstanding shares on a diluted basis of 16,168,181. As of August 13, 2024, the weighted average outstanding shares on a diluted basis were 8,290,277 or a 49% reduction of our weighted average outstanding on a fully diluted basis.

“We are making continued progress in areas that should contribute to our sustainable, long-term growth and profitability. The impressive results underscore our team’s relentless dedication and the successful execution of our strategic initiatives,” commented Jeff Toghraie, Chairman and Chief Executive Officer of AXIL. “For 2025, our strategic initiatives are geared towards enhancing our global presence, fostering strategic partnerships, and adapting our offerings to meet diverse market needs. This emphasis on international expansion not only broadens our market reach but also strengthens our competitive position on the global stage, in our view, driving sustainable growth and maximizing our potential for success in new and dynamic markets.”

“We concluded the fiscal year with record revenues of $27.5 million, reflecting a solid 17% year-over-year growth, largely driven by our strategic focus on expanding distribution and retail channels,” remarked Jeff Brown, Chief Financial Officer of AXIL Brands. “For the fiscal year, our fully diluted EPS reflects a weighted average of 16,168,181 outstanding shares on a diluted basis. As of August 13, 2024, the number of weighted average outstanding shares on a diluted basis was approximately 8,290,277, representing a 49% reduction from the weighted average outstanding shares on a fully diluted basis. Maintaining the quality of our revenue is a key priority this year as we focus on optimizing our existing partnerships and establishing new ones. There was no single customer that accounted for greater than 10% of total sales in our hearing protection and enhancement segment which accounted for approximately 95% of our total revenue for fiscal year 2024.”

AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
                 
    May 31,
2024
  May 31,
2023
         
ASSETS                
CURRENT ASSETS:                
Cash   $ 3,253,876     $ 4,832,682  
Accounts receivable, net     509,835       417,016  
Inventory, net     3,394,023       1,311,864  
Prepaid expenses and other current assets     809,126       801,360  
                 
Total Current Assets     7,966,860       7,362,922  
                 
OTHER ASSETS:                
Property and equipment, net     260,948       157,463  
Deferred tax asset     231,587          
Intangible assets, net     309,104       382,674  
Right of use asset     36,752       101,845  
Other assets     16,895       12,195  
Goodwill     2,152,215       2,152,215  
                 
Total Other Assets     3,007,501       2,806,392  
                 
TOTAL ASSETS   $ 10,974,361     $ 10,169,314  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
CURRENT LIABILITIES:                
Accounts payable   $ 967,596     $ 908,606  
Customer deposits     154,762       183,688  
Equipment payable, current           2,200  
Contract liabilities- current     905,311       827,106  
Notes payable     146,594       172,588  
Due to related party     11,798       158,072  
Lease liability, current     36,752       65,824  
Income tax liability     242,296       230,913  
Other current liabilities     332,936       305,664  
                 
Total Current Liabilities     2,798,045       2,854,661  
                 
LONG TERM LIABILITIES:                
Lease liability- long term           36,752  
Contract liabilities- long term     480,530       605,942  
                 
Total Long Term Liabilities     480,530       642,694  
                 
Total Liabilities     3,278,575       3,497,355  
                 
Commitments and contingencies (see Note 11)            
                 
STOCKHOLDERS’ EQUITY:                
Preferred stock, $0.0001 par value; 300,000,000 shares authorized; 42,251,750 and 250,000,000 shares issued and outstanding as of May 31, 2024 and 2023, respectively     4,225       25,000  
Common stock, $0.0001 par value: 450,000,000 shares authorized; 5,908,939 and 5,863,939 shares issued, issuable and outstanding as of May 31, 2024 and 2023, respectively     591       586  
Additional paid-in capital     7,825,240       10,113,365  
Accumulated deficit     (134,270 )     (3,466,992 )
                 
Total Stockholders’ Equity     7,695,786       6,671,959  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 10,974,361     $ 10,169,314  
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MAY 31, 2024 AND 2023
                 
    2024   2023
         
Sales, net   $ 27,498,539     $ 23,521,027  
                 
Cost of sales     7,304,602       5,810,216  
                 
Gross profit     20,193,937       17,710,811  
                 
OPERATING EXPENSES:                
Sales and marketing     13,449,054       11,675,206  
Compensation and related taxes     965,931       1,347,839  
Professional and consulting     2,589,496       1,420,990  
General and administrative     1,686,076       1,282,565  
                 
Total Operating Expenses     18,690,557       15,726,600  
                 
INCOME FROM OPERATIONS     1,503,380       1,984,211  
                 
OTHER INCOME (EXPENSE):                
Gain on debt settlement     79,182       50,500  
Other income     22,534       16,829  
Interest income     182,225       6,469  
Interest expense and other finance charges     (4,392 )     (2,521 )
                 
Other Income (Expense), Net     279,549       71,277  
                 
INCOME BEFORE PROVISION FOR INCOME TAXES     1,782,929       2,055,488  
                 
Provision (benefit) for income taxes     (220,205 )     230,913  
                 
NET INCOME   $ 2,003,134     $ 1,824,575  
                 
Deemed dividend on preferred stock buyback   $ 1,329,588     $  
Net income available to common shareholders   $ 3,332,722     $ 1,824,575  
                 
NET INCOME PER COMMON SHARE:                
Basic   $ 0.57     $ 0.32  
Diluted   $ 0.21     $ 0.10  
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                
Basic     5,868,570       5,644,771  
Diluted     16,168,181       17,869,264  
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED MAY 31, 2024 AND 2023
                                                         
        Common Stock           Total
    Preferred Stock   Issued/Issuable   Additional Paid-in   Accumulated   Stockholders’
    Shares   Amount   Shares   Amount   Capital   Deficit   Equity
                             
Balance, May 31, 2022         $       2,107,385     $ 211     $ 5,476,068     $ (5,291,567 )   $ 184,712  
                                                         
Shares issued for acquisition of business     250,000,000       25,000       3,659,195       366       3,982,114             4,007,480  
                                                         
Stock options expense                             207,342             207,342  
                                                         
Shares to be issued for cash                 97,359       9       447,841             447,850  
                                                         
Net income for the year ended May 31, 2023                                   1,824,575       1,824,575  
                                                         
Balance, May 31, 2023     250,000,000       25,000       5,863,939       586       10,113,365       (3,466,992 )     6,671,959  
                                                         
Stock options expense                             204,429             204,429  
                                                         
Restricted stock awards                 45,000       5       62,749             62,754  
                                                         
Preferred stock buyback     (207,748,250 )     (20,775 )                 (2,555,303 )     1,329,588       (1,246,490 )
                                                         
Net income for the year ended May 31, 2024                                   2,003,134       2,003,134  
                                                         
Balance, May 31, 2024     42,251,750     $ 4,225       5,908,939     $ 591     $ 7,825,240     $ (134,270 )   $ 7,695,786  
AXIL BRANDS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MAY 31, 2024 AND 2023
                 
    May 31,
    2024   2023
         
CASH FLOWS FROM OPERATING ACTIVITIES                
Net income   $ 2,003,134     $ 1,824,575  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     130,610       95,179  
Bad debts     25,471       76,969  
Inventory obsolescence     46,895        
Stock-based compensation     267,183       207,342  
Gain on debt settlement     (79,182 )     (50,500 )
Deferred income taxes     (231,587 )      
Change in operating assets and liabilities:                
Accounts receivable     (118,290 )     (160,277 )
Inventory     (2,129,054 )     353,985  
Prepaid expenses and other current assets     (7,766 )     (661,115 )
Deposits           (3,810 )
Accounts payable and accrued expenses     138,172       215,175  
Other current liabilities     4,298       630,897  
Contract liabilities     (47,207 )     389,716  
                 
NET CASH PROVIDED BY OPERATING ACTIVITIES     2,677       2,918,136  
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Cash acquired on business acquisition           1,066,414  
Purchase of intangibles     (22,080 )      
Purchase of property and equipment     (138,445 )     (65,650 )
                 
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES     (160,525 )     1,000,764  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Cash raised for common stock to be issued           447,850  
Repurchase of preferred stock     (1,246,490 )      
Repayment of equipment financing     (2,200 )     (3,300 )
Repayment of note payable     (25,994 )     (37,119 )
Advances (payments) from a related party     (146,274 )     132,620  
                 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     (1,420,958 )     540,051  
                 
NET INCREASE (DECREASE) IN CASH     (1,578,806 )     4,458,951  
                 
CASH – Beginning of year     4,832,682       373,731  
                 
CASH – End of year   $ 3,253,876     $ 4,832,682  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
Cash paid during the year for:                
Interest   $ 6,907     $ 2,521  
Income taxes   $     $  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Stock issued for asset purchase agreement   $     $ 4,007,480  
Right of use assets recognized as lease liability   $     $ 131,970  
Tangible assets (excluding cash) acquired in business combination   $     $ 1,740,729  
Intangible assets acquired in business combination   $     $ 456,945  
Goodwill acquired in business combination   $     $ 2,152,215  
Liabilities assumed in business combination   $     $ 1,408,823  
                 

About AXIL
AXIL (NYSE American) is an emerging global e-commerce 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 Procare brand – selling products in the United States, Canada, the European Union and throughout Asia. To learn more, please visit the Company’s website at www.reviv3.com and, for the AXIL® brand, visit www.goaxil.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 expanding internationally, and perform in accordance with any guidance; (ii) our 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 product costs and other costs of doing business, and reduce the Company’s earnings; (vii) our ability to engage in strategic partnerships and expand our distribution and retail channels; and (viii) 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, decreased discretionary consumer spending, supply chain disruptions and constraints, labor shortages, ongoing economic disruption, including the effects of the Ukraine-Russia conflict and the Israel-Hamas conflict, 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:
AXIL Investor Relations Team
(888) 638-8883
[email protected]


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