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American Outdoor Brands Corporation (NASDAQ:AOUT)
Q1 2021 Earnings Call
Sep 4, 2020, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day everyone and welcome to American Outdoor Brands Inc. First Quarter Fiscal 2021 Financial Results Conference Call. This call is being recorded.

At this time, I would like to turn the call over to Liz Sharp, Vice President of Investor Relations for some information about today's call.

Liz Sharp -- Vice President, Investor Relations

Thank you, and good morning. On behalf of all of us at American Outdoor Brands, we hope you are healthy and safe.

Our comments today may contain predictions, estimates and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, believe, and other similar expressions is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding our product development, focus, objectives, strategies and vision, our strategic evolution, our market share and market demand for our products, market and inventory conditions related to our products and in our industry in general and growth opportunities and trends. Our forward-looking statements represent our current judgment about the future and they are subject to various risks and uncertainties. Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings. You can find those documents as well as a replay of this call on our website at aob.com. Today's call contains time-sensitive information that is accurate only as of this time and we assume no obligation to update any forward-looking statements. Our actual results could differ materially from our statements today.

I have a few important items to note about our comments on today's call. First, we reference certain non-GAAP financial measures on this call. Our non-GAAP results exclude amortization of acquired intangible assets, stock compensation, transition costs, COVID-19 expenses, related party interest income and the tax effect related to all those adjustments. The reconciliations of GAAP financial measures to non-GAAP financial measures, whether or not they are discussed on today's call, can be found in our filings as well as yesterday's earnings press release, which are posted to our website. Also, when we reference EPS, we are always referencing fully diluted EPS.

As many of you know, on August 24, we completed our spin-off from Smith & Wesson Brands and today marks our first earnings call as American Outdoor Brands. I would like to note that we expect our 10-Q to file by the end of next week. Going forward, our goal will be to file our 10-Q concurrent with our earnings release each quarter.

Joining us on today's call is Brian Murphy, President and CEO and Andy Fulmer, Chief Financial Officer. And with that, I will turn it over to Brian.

Brian D. Murphy -- President & Chief Executive Officer

Thanks Liz. I'm happy to join you today for our first earnings call and I know that I speak for all of us at American Outdoor Brands when I say we could not be more excited about our future. We believe our passion for products that allow people to pursue their outdoor adventures is especially timely, as consumers increasingly look to outdoor activities such as fishing, hunting, shooting sports, camping and hiking, in response to travel restrictions and social distancing.

We are excited to continue developing and delivering innovative products that make it possible for people to rethink their connection with the outdoors.

Before I cover our performance, I want to extend a sincere thank you to all of our employees, who hopefully are listening to this call, across the Company, for their incredible accomplishments. In the past several months, this team has successfully organized and executed the complicated spin-off of our business into an independent company and delivered extraordinary quarterly results, all while maintaining protocols to ensure the health and safety of our workforce and our business.

So, with that, let me turn to the quarter. I'm very pleased with our first quarter results, which featured significant growth in both net sales and profitability. We believe our net sales growth of nearly 52% reflected the strong alignment between our diverse brand portfolio and consumer trends, including participation in outdoor activities, driven in part by pandemic-related travel restrictions and social distancing and increased interest in self-protection.

We believe our performance is a result of having built a business platform and a strategy that are resilient and that have positioned our company to be agile in a variety of operating environments.

Now, let me cover the highlights from the quarter. First, we benefited from pent-up demand that began during our fourth quarter when over 1,000 of our brick and mortar retail outlets were shut down due to COVID. That pent-up demand was released in Q1 when those stores began to reopen.

Second, during Q4, one of our largest customers and a major online retailer did not place orders with us for a full month, as they chose to purchase only items they deemed essential during that time. That customer resumed purchasing of our products at the end of Q4; and therefore, our Q1 results reflect our ability to adequately replenish that retailer's inventory.

And third, our strong net sales growth in the quarter reflected our success at working with certain retailers over the previous three quarters to take a more balanced approach to their ongoing replenishment orders, which Andy will detail later.

Beyond these elements, our first quarter results also demonstrated the benefit of investments we have made over time in our logistics capabilities and our e-commerce platform. Our e-com platform is an important element within our growth strategy, and it is favorably impacting our results in the current environment.

In the first quarter, sales in our e-com channels grew 130% compared to the prior year and included a significant increase in direct-to-consumer sales. At the same time, our traditional brick and mortar channel sales grew as well by 15% year-over-year.

Each of these channels contributed an equal share of our overall net sales; and the fact that each delivered growth in the quarter, demonstrate that we have successfully achieved our objective to situate our brands where the consumer expects to find us.

During the quarter, we experienced growth across nearly every one of our 20 brands and within each of the major categories and activities that we serve, including shooting, camping, hunting, fishing and personal protection. We believe that growth was driven in part by an underlying core base of consumers, who loyally support our brands regardless of current trends.

That said, we also believe those current trends have provided us an opportunity to capitalize on that brand equity and at the core of that brand equity is our brand lane structure and our unique dock and unlock strategy. We believe our brand lanes provide us with an ideal competitive advantage for developing exciting on-trend and highly innovative new products year-after-year that turn new consumers into strong, long-term advocates, as we take our brands from niche to known. And while that strategy is well timed, as consumers increasingly head into the outdoors, we believe it will also serve us well in the long run.

So, let me share with you how this works. So, once the brand is docked into one of four brand lanes, we can then begin to unlock a brand's true potential by leveraging the respective lane's resources. These include brand marketing, product development, sourcing and e-commerce. As we have discussed previously, several of our brands are benefiting from our dock and unlock formula, including BUBBA, BOG and our newest brand MEAT! YOUR MAKER.

Based on our research in consumer studies, we believe that the majority of our brands remain under infancy and have yet to be fully explored, representing significant runway for long-term growth.

The Dock & Unlock platform has been built to manifest that potential. It has also been designed to be a truly leverageable platform that positions us well for future growth. Later on, Andy, will address the financial benefits of this platform.

Turning now to a brief discussion of our supply chain. As I outlined last quarter, a vast majority of our products are sourced from China or rely upon components coming from China. So, we are keenly tuned into the impacts of China-related tariffs and the COVID-19 pandemic.

The long-term strategy to diversify our supply chain remains well under way. At the same time, I'm pleased to report that our suppliers in China are all operational and we had no disruptions during the quarter.

While our Q1 results clearly benefited from tailwinds in the current environment and no one knows what portion of those trends will be sustainable over time, our focus is on building the business for the long term. And we are seeing a number of developments that bode well for long-term trends, namely an increased interest in personal protection and first-time entrants into camping, fishing and shooting sports.

In fact, the National Shooting Sports Foundation estimates that nearly 5 million Americans purchased their first firearm during the first seven months of 2020. That number reflects a very sizable and recent expansion of the installed base of responsible firearm owners, all of whom are potential customers for our accessories and related items.

In the fall hunting season, which is yet to begin, will be interesting to watch as folks continue to reconnect with the outdoors. As a company dedicated to developing and delivering innovative outdoor products and accessories for rugged outdoor enthusiasts, we believe that our spin-off could not have been better timed, and we are excited about the future.

And with that, I'll ask Andy to cover the financial results. Andy?

H. Andrew Fulmer -- Chief Financial Officer

Thanks, Brian. Net sales for the quarter were $50.5 million, compared to $33.2 million in the prior year, an increase of approximately 52% and was due to the factors that Brian outlined. Increased net sales in the quarter benefited in part from an initiative we began in fiscal '20, to migrate certain retail customers away from lumpy, bulk buy ordering.

We successfully worked with those customers to achieve a more balanced approach to their replenishment orders, which gives us a more direct relationship with changes in consumer demand. As a result, and based on feedback from those retailers, we believe our inventory replenishment is better aligned with consumer demand.

Net sales in our e-commerce channels were $24.5 million, an increase of 129.7% over prior year. These net sales include our direct-to-consumer sales as well as our sales to customers that do not traditionally operate a physical brick and mortar store but generate the majority of their sales from consumer purchases from their retail websites.

Sales in our traditional brick and mortar channels increased as well by 15.1% to $25.9 million. These increases reflect the benefit of investments we've made in our e-commerce and marketing platforms, as Brian explained, ensuring that our brands are available where the consumer decides to shop.

In Q1, gross margin was 47% compared to 41.1% in the prior year. This substantial increase was driven by the combination of a favorable product mix and a decrease in promotional activity. Although the majority of our cost of goods sold is from variable cost, our margins are also improved slightly from leveraging fixed costs over the increased sales.

As shown in our previous filings under our former parent company, our gross margin percentage tends to vary by quarter, especially with certain annual promotions that typically take place in Q2 and Q3. Our margins are also significantly impacted by tariffs as we source approximately 80% of our products from China.

A large number of our products are on lists 1, 2, 3; currently subject to tariffs at 25%. A smaller number are on List 4A, subject to 7.5%; and the remaining portion are on List 4B, currently with no tariffs.

During Q1, the decrease in promotional activity allowed us to offset tariff costs, yielding a blended gross margin of 47%, a level which is more in line with our historical gross margin before tariffs were implemented. Last quarter, we mentioned our plans to discount certain slower-moving inventory in order to convert that to cash. This effort combined with our planned annual Q2 and Q3 promotions and the ongoing impact of tariffs, will result in a more normalized gross margin for the rest of the fiscal year.

In the quarter, GAAP operating expenses were $21.3 million compared to $20.9 million in Q1 of last year. Variable selling and distribution costs increased by $2.3 million due to higher sales volumes and marketing cost increased by approximately $200,000 due to increased brand and e-com initiatives.

These increases were netted by declines in intangible amortization of $649,000, savings from facility consolidations of approximately $800,000 and bad debt expense due to customer bankruptcies in the prior year of approximately $550,000.

Please note that due to COVID-19-related restrictions, our operating expenses were lower this quarter in travel, trade shows and other expenses. We plan to reinvest those savings in Q2 to Q4 for targeted marketing initiatives.

As shown in the reconciliation in our press release, we intend to report results on a non-GAAP basis as well. Non-GAAP operating expenses exclude intangible amortization, stock compensation and certain non-recurring expenses as they occur.

In Q1, non-GAAP operating expenses were $16.6 million compared to $15.4 million in the prior year quarter. Our first quarter operating expense also includes certain expenses that were allocated to us when we were a division of our larger parent company. Because our spin-off was effective on August 24th, the last of that expense allocation will occur in our second quarter, which ends on October 31st.

For the first quarter, GAAP EPS was $0.13 as compared with an EPS loss of $0.36 last year. Our non-GAAP EPS was $0.36 as compared with a loss of $0.09 in the year ago quarter. These EPS figures are based on our share count at the spin-off of approximately 14 million shares.

Turning to adjusted EBITDAS. Our investments in e-commerce, marketing and distribution infrastructures helped us facilitate net sales and earnings growth in Q1. The costs associated with these platforms are mostly fixed in nature and they proved to be highly leverageable in the quarter as our net sales increased, providing a significant contribution to adjusted EBITDAS, which was $8.7 million in Q1. This equates to a 17.3% EBITDAS margin as compared with a 0% margin in Q1 of last year.

Please note that our Q1 operating expenses included $758,000 of allocated depreciation that has been added back in the adjusted EBITDAS reported. This depreciation was related to the distribution center where our headquarters is located, as that facility is leased by our former parent company.

At the spin date, we entered into a sublease with our former parent for office and warehouse space. Therefore, going forward, this depreciation cost will be recorded as operating lease expense and will not be added back to adjusted EBITDAS. Our Q1 adjusted EBITDAS percentage would have been 15.8% without this allocated depreciation.

Turning to the balance sheet and cash flow. In Q1, cash generated from operating activities was $564,000 compared to a cash use of $1.3 million in the prior year. Accounts receivable increased by $7 million, driven by our sales increase and the timing of shipments later in the quarter.

Our inventory level increased by $9.6 million, a portion of which was a planned investment to help mitigate potential COVID-19 supply chain risks, as well as our seasonal Q1 build to prepare for the hunting and holiday seasons in Q2 and Q3. The increase also reflects additional tariff costs that were capitalized into inventory.

You will note that our cash balance was zero at the end of Q1. This is due to the nature of our carve-out financial statements under our former parent company as cash was typically swept to the parent company each month and offset through inter-company accounts.

At the August 24th spin-off date, we were capitalized with $25 million from our former parent company, and we entered into a new $50 million asset-based line of credit with TD Bank. The credit facility also provides an additional $15 million of availability under certain conditions, which gives us initial available capital of between $75 million and $90 million. We believe that our strong opening balance sheet positions us well as we began operations as a stand-alone company.

Capital expenditures for the quarter were approximately $900,000 and we expect to spend $4 million in capex for the full fiscal year with a portion of that being one-time in nature, related to the spin off.

Now, turning to our guidance. As we focus on our long-term financial objectives, we intend to issue guidance only on a full-year basis. We presented our initial guidance in our investor presentation in July. We are now increasing those estimates as we expect sales in the range of $195 million to $205 million. At that net sales range, we expect GAAP EPS to be in the range of a $0.22 loss to $0.11 loss; non-GAAP EPS to be in the range of $0.78 to $0.89; and adjusted EBITDAS to be in the range of $19 million to $21 million.

Our Q1 tax rate of 38% includes discrete items relating to the allocation of expenses from our former parent, which caused our effective tax rate to be higher, but we expect this will only occur in Q1. Going forward our estimates assume a tax rate for the remainder of the year of approximately 27%

Lastly, all of our estimates are based on our fully -- current fully diluted share count of approximately 14 million shares. Brian?

Brian D. Murphy -- President & Chief Executive Officer

Thank you, Andy. Operator, please open the call for questions from our analysts.

Questions and Answers:

Operator

Thank you [Operator Instructions] Our first question comes from John Kernan with Cowen. Your line is now open.

John Kernan -- Cowen -- Analyst

Excellent, thanks for taking my question. Brian, Andy, congrats on all the work to get through the spin and certainly the operational momentum inside the business as well.

H. Andrew Fulmer -- Chief Financial Officer

Thanks, John.

Brian D. Murphy -- President & Chief Executive Officer

Thanks, John.

John Kernan -- Cowen -- Analyst

Wanted to go into the sales guidance for the remainder of the year. Obviously, tremendous momentum in the first quarter, both from a growth perspective year-over-year, the amount of the dollar growth was impressive as well. How should we think about the rest of the year? What are your assumptions with your retail partners? It seems like you've done some work around the replenishment side of the business. I'm wondering, given the strong sell-through that we're seeing in a lot of your key brands, how are you planning the business from a wholesale perspective as we go into the back half of the year, because it does look like your guidance assumes a pretty meaningful deceleration in the momentum you're seeing right now. Thank you.

Brian D. Murphy -- President & Chief Executive Officer

Yes. Thanks, John. This is Brian. So, the full-year guidance that we put forth and we've updated still assumes a 16% to 20 -- sorry, 16% to 22% year-over-year growth, which we think is pretty meaningful. And there is still a lot of uncertainty that remains for Q2 through Q4, and while we're still through a portion through Q2, really, we've only completed four months. And so, there's still quite a bit of runway ahead of us. And based on what we're seeing today, that guidance reflects what we're seeing.

John Kernan -- Cowen -- Analyst

Got it. Maybe any commentary from a specific brand-level perspective for BUBBA, Crimson Trace, MEAT! YOUR MAKER, BOG, you did call all them out in your prepared remarks, and it does seem like all of them have building momentum at the retail level right now.

Brian D. Murphy -- President & Chief Executive Officer

Yes. So, great question. And I would say, like we said in our prepared remarks, most of our brands, really there were only two that did not show growth and for reasons that we expected, one of which was a major retailer's decision to go to private label, so we expected that. Excluding that factor, we actually saw growth; and then, one additional brand outside of a customer load-in from last year, we also saw growth.

So, essentially, outside of those two unique factors, all of our brands grew year-over-year. And so, we would expect the increased levels of participation that we're seeing in the market. Our brands are -- in particular, are well positioned to take advantage of this environment.

John Kernan -- Cowen -- Analyst

Got it and then maybe one more from me just on the guidance from a margin perspective. A lot of gross margin expansion in Q1 and meaningful adjusted SG&A leverage as well. Just how should we think about the balance between gross margin and SG&A rate that's embedded in the EBITDAS guidance that you've provided?

H. Andrew Fulmer -- Chief Financial Officer

Yes. Thanks, John. This is Andy. So on the margin side, in Q1, the decreased promotions definitely, like we said in the prepared remarks, helped the margins. And given the fact that going forward with annualized promotions that we do every year, as well as our inventory, the plan that we put into place and is under way already to convert some of the slower-moving targeted inventory back to cash, we do expect some margin declines from Q1.

On the opex side, I think on a run rate basis, when we look at opex, obviously we're going to reinvest the kind of COVID-19-related savings just from lack of travel, trade shows, those types of things, back -- into the back half of the year or actually from Q2 through Q4, but also on the G&A side.

So, again, we're -- our Q1 had allocated expenses under the carve-out financial statement. And going forward, we're going to have the full cost of our building and sublease, the full burden of corporate costs going forward. And obviously, as we -- our selling and distribution is highly variable in relation to revenue.

John Kernan -- Cowen -- Analyst

That's helpful. Thanks guys. Best of luck and again congrats on the spin and the momentum.

Brian D. Murphy -- President & Chief Executive Officer

Thank you.

Operator

Thank you. Our next question [Technical Issues] with Wedbush. Your line is now open.

James Hardiman -- Wedbush -- Analyst

Hey, good morning. Thanks for taking my call. Obviously, a really strong quarter. I think a lot of us sort of understand how the supply chain expands and contracts with the legacy firearm business. But maybe help us understand the inventory situation, not only on your own balance sheet but at retail, given that we don't have a long history with this. Are we playing catch up at this point and sort of -- if so, how long does that take to sort of normalize?

Brian D. Murphy -- President & Chief Executive Officer

Yes, James, this is Brian. So, the way -- the best way to think about this is what we talked about in our prepared remarks around the alignment between end consumer demand and our replenishment with those retailers that are servicing that demand.

So, last year, well ahead of COVID, we made some tough decisions to -- we want to prepare this business for long-term growth, was to better align the two. So, we got rid of the or try to transition our customers away from lumpy bulk buys to healthier replenishments each quarter, each month. And as a result, that allowed us to streamline our forecasting inventory planning process and the team has done an incredible job to do that. As a result, we have -- it's easier for us to plan the inventory requirements for our customers, because we're seeing in real time how they're are selling that product out the door.

And so, I believe we are uniquely positioned, perhaps versus some of our competitors to take advantage of that direct relationship. And so now we can plan out in a very short period of time how to service those end consumer needs and also our marketing plan. So, Andy, referenced taking some of the savings that we have and reinvesting them in the business into the marketing side.

As you're aware, each early spring, we launch quite a few new products, is being able to now align those marketing initiatives with the inventory needs of our customers, so that way it's in lockstep. There is no disconnect there. So, we've been able to, I think, keep pace with many of our retailers, based on the demand that they're seeing.

James Hardiman -- Wedbush -- Analyst

Okay. So, I should take that to mean that you're not significantly behind in terms of where channel inventories right now such that you would need to ramp up to meet the current demand?

Brian D. Murphy -- President & Chief Executive Officer

There is certainly quite a bit of demand out there. I would say that we are uniquely -- I would note that we're uniquely positioned, I believe, to be able to service our customers, and I've heard from many of them that this is true that we're able to -- we've got among the highest fulfillment rates of any of the vendors.

James Hardiman -- Wedbush -- Analyst

Okay. And then secondly, so -- and I think you answered a good portion of this with some of the margin commentary. But as I take a step back and look at your guidance, you did $9 million in EBITDAS in the first quarter, the guidance for the year is a little more than double that, I would have just driven outside of thought that second quarter would probably be bigger than the first. But it sounds like there is some -- again, there is some margin issues in terms of the accounting from an allocation perspective you talked about the promos in terms of gross margins.

Is there anything from a top line perspective to think about how this is going to be -- how the rest of the year should be meaningfully different than what we saw in the first quarter? And then, is there any way to -- you talked about this major customer shift of orders from Q4 to Q1, is there any way to quantify that?

H. Andrew Fulmer -- Chief Financial Officer

Hey, James. This is Andy. So, from a top line perspective, I don't think there's any magic as far as kind of looking at the kind of quarter-by-quarter. You definitely did hit on the point. So on the margin side, like we talked about, the expected promos as well as the converting to cash on the opex side, Q1 is a bit of an anomaly just because of the allocation nature under the carve-out. But then, going forward -- I'm sorry, what was the second part of your question?

James Hardiman -- Wedbush -- Analyst

The -- sort of one-time benefit that you got in Q1 from the --

H. Andrew Fulmer -- Chief Financial Officer

Oh, yes, yes, sorry about that. [Speech Overlap] Yes. So, as we talked about, I don't necessarily think we can quantify that. But, like we said in the prepared remarks, we had a major online retailer in Q4 essentially stopped ordering, and we believe that -- in Q4 exactly. And then in Q1, we were able to really help them replenish inventory levels.

Brian D. Murphy -- President & Chief Executive Officer

And then I would add -- this is Brian. James, it's just, this is at a highly -- I mean, in my career, this is one of the most unprecedented uncertain times. Things appear to be keep popping up that no one really could anticipate. The thing that I would continue to direct people toward is the fact that we have spent the time to build a platform that is highly agile.

So, we don't know what will come in the next 12 months. We've done our best to estimate that and we've given that as part of our outlook. But certainly, we've built an agile platform that we believe will help us weather a variety of different operating environments.

So, what we know today is reflected in our guidance and certainly we believe we've got a great platform to respond as necessary and anticipate where needed.

James Hardiman -- Wedbush -- Analyst

That's really helpful. If I may just one quick point of clarification, Andy, these carve-out financials are obviously going to be different, as we get later into the year with actual expenses that you guys are incurring. That's not going to be retroactive, correct? Like this -- these are the numbers for the first quarter and we're not going to then retroactively restate those in anyway, is that right?

H. Andrew Fulmer -- Chief Financial Officer

That's absolutely correct, yes.

James Hardiman -- Wedbush -- Analyst

Okay. Thanks, guys.

H. Andrew Fulmer -- Chief Financial Officer

Great. Thanks, James.

Brian D. Murphy -- President & Chief Executive Officer

Thanks, James.

Operator

Thank you. Our next question comes from Scott Stember with CL King. Your line is now open.

Scott Stember -- CL King -- Analyst

Good morning, guys, and congratulations on a really good start to AOUT.

Brian D. Murphy -- President & Chief Executive Officer

Thanks, Scott.

Scott Stember -- CL King -- Analyst

Maybe talking about on the e-commerce side, you talked about the direct-to-consumer, how that's really taken off. Could you maybe just frame out for us, what inning you guys are in in that process, and maybe how big of the e-com growth that really is and how much more we can expect?

Brian D. Murphy -- President & Chief Executive Officer

Yes. Scott, this is Brian. It's a great question. And obviously, we continue to hammer home that direct-to-consumer sales over the last few quarters. So, like I said in the prepared remarks, our goal is to be where the consumer expects to find us. And based on the current environment and the store closures, which is unfortunate, consumers continue to pull through our products. Our products were in high demand.

And so, because we've made this investment in the e-commerce platform, we have the ability to sell directly to those consumers, if that's how they choose to purchase our products and give them a good experience in the process.

So, in terms of what inning we're in, I think it's really up to the consumer. We're prepared, like I said, to be agile in a variety of operating environments. If they choose to purchase from us, great, we're there. We have certainly the e-commerce websites to be able to service them and the distribution capabilities.

If they -- if things reopen up and folks decide to go back out into brick and mortar channels, great, we're totally going to be there as well. So, it's hard to say, we're certainly have the platform in place to service them going forward. So, wouldn't anticipate from your perspective or investors perspective that there is still quite a bit of infrastructure to be built out. It's already built out.

Scott Stember -- CL King -- Analyst

Okay, got it. And just going back to your flexible business model, you talked about how it helps you obviously keep up with demand, but if we were to keep at the same pace over retail pull through, what is your ability to continue to keep up with that basically; is there a breaking point or a limit where even with your flexible structure where it becomes problematic?

Brian D. Murphy -- President & Chief Executive Officer

That's a great question and we talk a lot about that internally, because again, we've built this platform to serve a variety of environments. We've also built this platform to facilitate long-term growth. So, as we take our brands from niche to known, which really that known piece is a mature brand portfolio, which we believe we don't have today. We've got significant runway for growth.

But with that said, because -- we just stood up a 632,000 square foot facility. We share that facility with our -- with the company that we just recently spun out from Smith & Wesson. But we have adequate, I believe, based on the demand that we're seeing today, to be able to service that demand going forward.

Scott Stember -- CL King -- Analyst

Okay. Just one last question if I can, just for modeling purposes. I know things are coming out in time as far as historicals, quarterlys and from an adjusted basis. But when the Q comes out, would there be more disclosure about past years on an adjusted basis and on a quarterly basis? And if not, when would we see that?

H. Andrew Fulmer -- Chief Financial Officer

Yes. Scott, this is Andy. So, as the quarter has come out, we will have comparable quarters on a carve-out basis from prior year as well. So, when the first Q comes out, you'll see Q1-over-Q1 and then as the quarters go, the Q2 versus Q2 and so forth.

Scott Stember -- CL King -- Analyst

Okay. That's all I have. Thanks again.

H. Andrew Fulmer -- Chief Financial Officer

Thank you.

Brian D. Murphy -- President & Chief Executive Officer

Thanks, Scott.

Operator

Thank you. [Operator Instructions] Our next question comes from Mark Smith with Lake Street Capital. Your line is now open.

Mark Smith -- Lake Street Capital -- Analyst

Hi, guys. First question for me, can you give us a breakdown or any insight into sales growth of shooting-related products versus non-shooting products? So, for instance, if we looked at Harvester and Adventurer versus Marksman and Defender?

Brian D. Murphy -- President & Chief Executive Officer

Hey, Mark, this is Brian. So, what I would tell you is, in this environment we're seeing, I would -- I believe unprecedented demand across all of the brand lines, so the Marksman, Harvester, Adventurer, Defender. And due to the reasons that I described earlier, just around social distancing, which obviously plays into the Harvester and Adventurer lane and also Marksman, and then personal protection, which certainly plays into the Defender lane and then I think flows into as a result the Marksman lane as folks need to clean their firearms, they want to go to the range site, the men, and be responsible firearm owners.

So, if it's -- I really can't answer the question because it's across the board. I mean, we're seeing unprecedented demand across all of our four brand lanes.

Mark Smith -- Lake Street Capital -- Analyst

Okay. And then as we look at kind of the channel of sales, can you give us more insight or breakdown on gross profit margin differences between e-com and traditional sales?

H. Andrew Fulmer -- Chief Financial Officer

Hey, Mark, it's Andy. So, we can't get in too much detail. I will say that with increased direct-to-consumer sales, those are obviously a higher margin than some of our traditional sales. But we really can't get into too much detail on the kind of channel-by-channel margin.

Mark Smith -- Lake Street Capital -- Analyst

Okay. And then just -- you guys hit on this a little bit earlier, but just if you can give us quantify at all, any backlog insight that you can give us especially or even insight into backlog issues, maybe within certain brands or brand lanes?

H. Andrew Fulmer -- Chief Financial Officer

Yes, we can't get into backlog. We don't disclose that. As far as -- on a specific product level, yes, I can't really -- I don't think we're really --

Brian D. Murphy -- President & Chief Executive Officer

Mark, what I -- this is Brian. What I would tell you or point you toward is this, yes, again being better aligned with end consumer demand, which feeds in everything, right? It's traditional, and then it's also the e-com side. So, we're seeing real-time sales and then there is some delay on the traditional side. But because we've made -- been able to better align with that demand, really allows us to have a closer to -- not perfect, but closer to a one-to-one relationship with that and forecast appropriately.

Mark Smith -- Lake Street Capital -- Analyst

Okay. And then just looking within brick and mortar, are there any issues that you still have today within closures, and this may be even looking at international markets and anything that you're still seeing close today that's not fully reopened?

Brian D. Murphy -- President & Chief Executive Officer

So, on the traditional side, I would say, we still have -- in the last quarter, we had what I believe is impressive growth. So, 15% in the traditional channels and if you look at what's been reported for other companies out there, I think 15% is pretty impressive.

I believe the brick and mortar retailers that have a strong -- their own e-commerce platform right now, are more successful and we also accommodate to that business strategy. So, I think that folks that have that strong structure in place will continue to be successful and we're certainly able to accommodate that, that strategy.

And then also just internationally, international for us represents a very small part of our business and BOG represents a big opportunity. We were not significantly or even meaningfully impacted by the store closures internationally.

So again, our goal is to be where the consumer expects to find us; and if that's online, great. If it's in stores and that becomes a better option for them, we certainly will be there and we have incredibly strong partners across both of those channels that certainly want to make sure that they do the same thing.

H. Andrew Fulmer -- Chief Financial Officer

Yes, Mark, I'll just point out too, historically over the last two or three years, I think our international percent of revenue is roughly 4%, so it represents a pretty decent growth engine in the future.

Mark Smith -- Lake Street Capital -- Analyst

Okay. And then the last one from me, you guys gave us a lot of insight into gross profit margin and some of the moving parts there as we move from first quarter into second and third quarter. But is there anything to call out as far as pressures as we go forward that's built into the guidance that you haven't talked to outside of kind of promotions and tariffs? Are you seeing any increases in steel or any raw products that maybe put pressure on gross profit margin going forward?

H. Andrew Fulmer -- Chief Financial Officer

Yes, nothing outside of the ordinary, I would say. And you know we work very well with our supply chain partners on costing, making sure that everything is buttoned up there.

Obviously, tariffs, the current tariff situation is built into our margin profile that we modeled for purposes of guidance. So, no change with respect, and obviously that -- if that changes that would -- we would have to update it accordingly.

Brian D. Murphy -- President & Chief Executive Officer

Yes, I would say -- Mark, this is Brian. The other thing that we've, I think, discussed in the past is we have a strategy in place to diversify our supply chain, which helps offset some of that tariff risk. And the best way to do that is through new product introductions. And so, by coming out with between 200 and 300 new products each year, we have the ability to raise the average ASP of some of those products.

So, if you look at brands like UST, we have sleeping bags, we have tents, we have all these new products that come at a higher ASP and we're able to look at different supply chains to help deliver those products. And for us, that's been a major strategic initiative to help us offset some of those pressures. And so, when it comes to like commodity price -- commodity input costs and things like that, where we stay on top of that and we look across our supply chain to make sure that we're as competitive as possible.

Mark Smith -- Lake Street Capital -- Analyst

Okay, great. Thank you.

Brian D. Murphy -- President & Chief Executive Officer

Thanks, Mark.

Operator

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Brian Murphy for closing remarks.

Brian D. Murphy -- President & Chief Executive Officer

Thank you, operator, and thank you, everyone, for joining us today. We are looking forward to participating in two virtual conferences this month, the CL King Best Ideas Conference on September 16th, and the Lake Street BIG4 Conference on September 17th. We hope to speak with some of you there.

In the meantime, please stay safe. We look forward to speaking with you again next quarter. Thanks.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Liz Sharp -- Vice President, Investor Relations

Brian D. Murphy -- President & Chief Executive Officer

H. Andrew Fulmer -- Chief Financial Officer

John Kernan -- Cowen -- Analyst

James Hardiman -- Wedbush -- Analyst

Scott Stember -- CL King -- Analyst

Mark Smith -- Lake Street Capital -- Analyst

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