Good day everyone and welcome to American Outdoor Brands Inc. Second Quarter Fiscal 2023 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.

Thank you, and good afternoon. Our comments today may contain predictions, estimates and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, should, indicate, suggest, 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. Our non-GAAP results exclude amortization of acquired intangible assets, stock compensation, shareholder cooperation agreement costs, technology implementation, acquisition costs, other costs and income tax 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 today's earnings press release, which are posted on our website. Also, when we reference EPS, we are always referencing fully diluted EPS. Joining us on today's call is Brian Murphy, President and CEO; and Andy Fulmer, CFO. And with that, I will turn the call over to Brian.

Thanks Liz and thanks everyone for joining us. Our second quarter performance demonstrates our ability to successfully navigate ongoing challenges in the macroenvironment while executing on our long-term strategy. While it's too early to see what our economy will deliver as we move into the new calendar year, I believe our recent results reflect our ability to remain focused, identify those elements we can control, executing accordingly and best positioning our company for success over the long term. In the second quarter, we achieved net sales growth of 14% above our pre-pandemic levels of fiscal 2020 and we introduced several new innovative products, while strengthening our balance sheet and marking a number of achievements that support our strategic priorities and reflect our dedication to leveraging our culture of innovation to deliver solutions for consumers in the moments that matter. Our E-commerce platform is an important part of our brand growth strategy and it represents an investment we made prior to the pandemic and our spin-off just over two years ago. While our E-commerce sales declined compared to the year-ago quarter, driven by our online retailers, our E-commerce channel grew over 171% compared to pre-pandemic levels. Within our E-commerce channel is our direct-to-consumer business which is largely comprised of our outdoor lifestyle brand. Direct-to-consumer sales remain strong in the quarter, delivering year-over-year growth of over 119%. Consider our direct-to-consumer sales to be one gauge of how well our brands are resonating with consumers, since those sales are not typically impacted by issues that have hindered retailers, such as inventory levels or limited open-to-buy dollars. The direct-to-consumer category also includes MEAT! Your Maker, meat processing equipment, and Grilla outdoor cooking products. Together these two brands generated nearly 10% of our total net sales and helped our outdoor lifestyle category generate over 55% of our total net sales in the second quarter. We remain excited about growth opportunities in our outdoor lifestyle category, which consists of products related to hunting, fishing, camping, outdoor cooking and rugged outdoor activities and which delivered growth of more than 22% over the pre-pandemic second quarter of fiscal 2020. We believe continued growth in this category as a percentage of our total net sales will help mitigate fluctuations in our shooting sports category, which has been more susceptible to short term cyclicality. Turning to our traditional sales channel, which consists of customers that operate out of physical brick and mortar stores, sales declined in the quarter, largely the result of a continuation of the factors we laid out last quarter. Namely, retailers placed fewer orders in response to lower consumer foot traffic while they work to lower their inventories across all of their offerings, limiting their open-to-buy dollars. This activity had its biggest impact on our shooting sports category, which includes personal protection products, such as laser sights, and sales of shooting accessories to firearm OEMs, dealers, and distributors. By way of an update, initial national media reports on Black Friday shopping appear to be generally favorable for both online and brick-and-mortar retailers, with Bloomberg reporting year-over-year increases in the 2% to 3% range for both categories. The good news is increased foot traffic should help lower retailer inventories and improve their available open-to-buy. Innovation is a key element in our long-term strategy and new products launched within the past two years generated 30% of our second-quarter net sales. We continue to leverage our Dock & Unlock process to deliver a steady flow of organically developed exciting new products in the second quarter. Let me tell you about a few of those. Adding to our best-selling line of meat grinders, we launched a line of MEAT! Your Maker Dual Grind Grinders, which retails between $450 and $700 based on different size options. These dual grind grinders help simplify and save time processing, bypassing meat through a separate course and fine plate simultaneously. We introduced our MEAT! Your Maker Kitchen Knife set, which is made with high-quality German steel blades, premium G-10 handles and includes a unique storage solution. We designed these knives specifically for our meat customers, and we market them through our DTC channel. We also launched a MEAT! Your Maker Butcher Knife set with proprietary non-slip grips, as well as a premium leather knife carrier for safe and convenient transportation and storage of cutlery. And I just want to add here that we are very impressed with the continued brand loyalty that we've developed under the meat brand as consumers continue to flock to our websites and provide us with great reviews and feedback. Lastly, we launched two BOG tripod lines, the Sherpa and the Infinite. These innovative tripods, which can be used for everything from hunting to photography, incorporate proprietary features, deliver enhanced versatility and functionality, and provide a compact and lightweight platform for hunters, for whom BOG has become synonymous with premium hunting accessories. During the quarter, we attended the National Association of Sporting Goods Wholesalers Expo, where the Caldwell Claymore was recognized as the best new accessory. The Claymore Clay Target Thrower is our first meaningful entry into the shotgun sports market. Some of you may have joined us at SHOT Show in January when we first unveiled this innovative foot-operated clay thrower to the public. The show gave us a great opportunity to demonstrate the innovation of the Claymore, which provides all the benefits of an electric clay thrower without requiring a battery. The buzz of the show was incredible and people were lined up to give it a try. We are now shipping the Claymore to customers. We are excited about the opportunity addressed by each of these new offerings. As a company that thrives on innovation, intellectual property is one of our most valued assets, and you'll find it within several of the products I just outlined in a great many more across our portfolio. Investing capital in organic growth remains the top priority in our strategic plan, and our Dock & Unlock process continues to fuel the innovation pipeline that will support our long-term growth. This power of innovation is apparent with our MEAT! Your Maker brand, which was developed internally, launched in late fiscal 2020 and delivered trailing 12-month revenue of $8.7 million at the end of Q2. Stay tuned for updates on several exciting new products we have planned for MEAT, Bubba, Grilla and many of our other brands in the new year. Our strategy also includes a focus on utilizing our leverageable business model as we grow. On our last call, we announced that we would consolidate our Crimson Trace operations in Wilsonville, Oregon, as well as our Grilla operations in Holland, Michigan, and Dallas, Texas into our Missouri facility. I'm happy to report that we recently completed both of those consolidations right on schedule. Andy will provide more detail but savings from these consolidations will help us move closer to our long-term profitability objectives. The current environment of high inflation and rising interest rates makes it difficult to predict future consumer spending patterns as we head into the new year. Nevertheless, we are encouraged by the fact that consumer participation in the outdoors is at its highest level in years. We are also encouraged by recent reports in our industry, which indicate that once someone begins to participate in the outdoors, they're likely to continue as a nimble, innovative and emerging growth company with a portfolio of strong brands that resonate with our core consumers. We are excited about the growth opportunities these trends present for our brands in the long term. As such, our focus will remain on executing our long-term strategic plan while we carefully manage the elements within our control. While we do so, we will continue to invest in our infrastructure and our robust new product pipeline, seeking out opportunities to lower costs where we can and ensuring we remain well-positioned to achieve our long-term plan, which is to reach $400 million and beyond in net sales and EBITDAS margins in the mid to high teens. With that, I'll turn it over to Andy to discuss our financial results.

Thanks, Brian. Net sales for Q2 were $54.4 million, a decrease of 23.1% compared to the prior year, and an increase of 14% over the pre-pandemic second quarter of fiscal 2020. E-commerce channels accounted for roughly 42% of our sales in the quarter at $22.7 million, representing a decrease of 17.5% from Q2 of last year, but a significant increase of over 171% over the pre-pandemic second quarter of fiscal '20. The recent year-over-year decrease was driven by reduced orders from our online retailers, offset by a 119% increase in our direct-to-consumer business. Net sales in our traditional channels, which consist of brick-and-mortar retailers, decreased 26.6% in the second quarter compared to last year, which we believe is due to lower foot traffic at most retail locations during the period combined with their continued efforts to reduce their overall inventories. Gross margins came in strong for the quarter, increasing 100 basis points over the prior year to 47.7%. During Q2, we benefited from lower inventory reserves and reduced tariff and freight costs as we delivered on our commitment to reduce inventory levels going forward. GAAP operating expenses for the quarter were $26.1 million, $1.6 million lower than Q2 of last year. Within OpEx, our variable selling and distribution costs decreased in dollars due to the overall reduction in net sales but they increased as a percentage of net sales year-over-year due to higher outbound freight costs. On our last call, we discussed efforts to contain costs where appropriate as we navigate through the current economic landscape. Marketing dollars spent declined from last year due to reductions in advertising and lower compensation costs and our G&A spend remained flat to last year. It's important to note, however, that the majority of the advertising savings were related to the timing of digital advertising, which will now move to our third quarter. Non-GAAP operating expenses in Q2 were $21.3 million, compared to $22.7 million in Q2 last year. Non-GAAP operating expenses exclude intangible amortization, stock compensation, and certain non-recurring expenses as they occur. As Brian indicated, we remain focused on leveraging our business model. Our performance in Q2 demonstrated that focus when we announced the consolidations of our operations in Oregon, Texas and Michigan into our main facility in Columbia, Missouri. During Q2, our operations team did an outstanding job efficiently tackling these consolidation projects. As of mid-November, our assembly, warehousing and distribution functions for all of our brands are now being conducted entirely from our Columbia facility. As we discussed on our last call, these consolidations will help us simplify operations, maximize warehouse efficiency, and leverage the cost of our Missouri facility. We expect the net cost savings from the consolidations will be roughly $1.5 million on an annualized basis, and we'll begin to see savings in our fourth fiscal quarter this year. GAAP EPS for Q2 was $0.03 as compared with earnings of $0.32 last year. Non-GAAP EPS for Q2 was $0.29 compared to $0.58 last year. Our Q2 figures are based on our fully diluted share count of approximately 13.6 million shares. For the full year, we expect our fully diluted share count to be roughly 13.7 million shares. Adjusted EBITDAS for the quarter was $6.4 million, compared to $11.7 million last year. Turning to the balance sheet and cash flow, I'm pleased to share that we continue to strengthen our balance sheet during Q2, ending with net debt leverage of virtually zero, while returning capital to our shareholders through our share repurchase program. We ended the quarter with $16.4 million of cash down just $1.1 million sequentially from the first quarter. We're very pleased with this result given the cash outflow for our ERP implementation as planned, and roughly $750,000 spent for share repurchases. Positive operating cash flow for the second quarter was $1.1 million compared to operating cash outflow of $22.1 million last year. Recall that last year's outflow was driven by large bills of accounts receivable and inventory. Accounts receivable in Q2 this year increased sequentially over Q1 by $8.6 million due to the increase in net sales. We offset this increase with a $9.2 million decrease in inventory, all while maintaining strong gross margins. You'll recall last quarter we discussed that we had commenced targeted inventory reduction initiatives. I'm very pleased to report that our team has done a great job executing on those initiatives, and we're actually a bit ahead of schedule. We will continue to focus on inventory reduction going forward, driving further cash conversion. Turning to capital expenditures, we are lowering our CapEx spending plans for full fiscal '23 by roughly $500,000 to a range of between $7 million and $7.5 million. Breaking that amount down, we now expect to spend between $4.6 million and $5.1 million on product tooling and maintenance CapEx, and we still expect our ERP project to come in at $2.4 million. Now a brief update on our ERP implementation. As I've shared before, we are utilizing a multi-phased go-live approach with our new ERP system, Microsoft D365. I'm pleased to report that we successfully went live with Phase 1 on October 1 with a small portion of our business as planned. So kudos to the entire AOB team. Our tiered go-live decision was a good one. In the Phase 1 process, we identified the need for some system enhancements that we've now designed into the final phase, which is Phase 2. While these changes will extend the timeline just a bit by about 60 days, they will improve our operational efficiency on day one in the new system. And despite the new February go-live date, we don't expect to add any cost to the project. So great result and again, great job to the entire team. For fiscal 2023, our expectations for one-time ERP costs haven't changed. We still anticipate spending a total of $1.7 million in onetime OpEx for implementation costs as well as $500,000 in duplicative costs to operate both our current and new ERP systems in parallel through February, both amounts will be treated as non-recurring implementation costs when calculating non-GAAP operating expense and adjusted EBITDAS. We ended Q2 with $20 million outstanding on our $75 million line of credit, keeping our net debt leverage ratio near zero. Last week, we paid down an additional $10 million, leaving us with just $10 million outstanding on the line of credit as of today. We focus on maintaining a very strong balance sheet so that we remain well-positioned to address our three capital allocation priorities, which in order of priority are first to invest in organic growth, second to seek complementary acquisitions, and third to return capital to shareholders. Our Dock & Unlock formula serves as the foundation for long-term cash flow generation. That cash in turn funds further organic growth as well as the ability to capture attractive M&A opportunities when they arise. Ultimately, access cash generated by this process can be returned to shareholders when that is the best use of capital at any given point in time. We demonstrated our willingness to do that when our board authorized a $10 million share repurchase program in September. And during Q2, we repurchased roughly 84,000 shares at an average price of $8.97 per share. Now, turning to our outlook, in our view, retailers and distributors remain cautious regarding their inventory levels, and consumer spending patterns going forward are still undetermined. That said, we believe our brands are performing consistently with long-term positive consumer outdoor trends. As a result, we continue to believe our net sales for fiscal 2023 could exceed pre-pandemic fiscal 2020 levels by as much as 25%. To refresh you on our revenue flow by quarter, we expect typical seasonality to occur in fiscal 2023 with Q1 as our lowest net sales quarter, Q2 and Q3 as the highest net sales quarter, and Q4 coming in higher than Q1. We've noted in previous calls our return to a more normalized promotional environment, consistent with the environment prior to the pandemic. As a result, we plan to participate in seasonal promotional programs, mostly in our shooting sports category, as well as other promotional events with our retail partners in the second half of fiscal 2023. As such, we expect gross margins in the second half of fiscal 2023 to be consistent with margins in the second half of fiscal 2022. With regard to OpEx, we expect Q3 OpEx spending to be higher than Q2 due to additional selling and marketing costs relating to annual industry trade shows, such as Shot Show and ATA in January, as well as the advertising spend, I discussed earlier. Lastly, we expect Q4 OpEx spend to be slightly higher than Q1, mainly due to the higher sales volume. Going forward, we plan to continue identifying areas for cost containment, where it makes sense in the short term, while being mindful of long-term investments needed to grow the business and execute on our strategic objectives.

Our first question will come from Eric Wold with B. Riley Securities.

Thank you. Good afternoon. Hello, one question that become indiscernible. I guess can you give us a sense kind of where you think your product inventory is at retail kind of versus last year? And as you think about demand remaining solid as you see from your own DTC and kind of, we assume continues in the retail channel and others? When does that inventory kind of need to be restocked? I guess and then only thing about it, what did you assume in your kind of guidance framework for this year with sales up as much as 25% in fiscal '20? Are you assuming some kind of restocking into the back part of the year or are you assuming it's kind of staying at the same kind of status quo non-restocking that have you seen in the past couple quarters?

Yes. Hey, Eric, this is Brian. So in terms of POS that we're looking at, or I've looked at through the quarter, certainly our product at retail is below where it was last year, at this time. And in particular, the shooting sports side was down in the double digits versus prior year, and outdoor lifestyle was down close to double digits. So we see that as a positive trend for us. And as we look out in terms of, yes, the question about restocking, I think certainly over the next over the coming quarters, we would expect to see that begin to come back because retailers will need product to sell through to consumers. So yes, we see that coming back. Obviously, TBD, to be seen what happened with Black Friday, Cyber Monday and the rest of the holidays for our customers but overall the trends look very positive.

So just to make sure, the expectation that it should start to come back. Is that what you're assuming in that 25% outlook number or is that not included in that?

Yes, I mean, the 25% is certainly our best estimate, given what we know today.

Got it, and then just last question, obviously great results on the DTC trends, anything in there that you can point to that kind of indicates the health of the consumer one way or another frequency of guest purchases basket size ASP, if anything kind of goes one way or another in terms of that, beyond just overall growth number.

Yes. This is Brian again. So certainly the majority of our DTC today comes from Grilla. And MEAT, and Grilla being acquired MEAT, obviously, an organic brand, but we were really impressed with the average rank for both of those brands. Both of them had significant increases over the prior year. And really some strong results. So we see ring size going up for those two, and also the baskets, we're seeing a lot of repeat customers. I don't know if we mentioned on this call previously, but Grilla in before the acquisition sales generally, were about 50% repeat customers. And we're seeing some strong repeat customers on MEAT. And I mentioned in my preamble about just the brand loyalty around MEAT. And take a look at some of the reviews of the new products, folks had purchased a grinder or slicer or something different and have come back to buy more meat products. And so overall we're really excited about that. And I think it shows consumers are definitely still spending money, and they're spending at the higher ranks.

Our next question will come from Matt Koranda with ROTH Capital.

Hey guys, it’s Mike David on for Matt. Maybe just start off putting a finer tune to what exactly is driving gross margins stronger in the quarter? And how repeatable that is going forward?

Yes, Mike, this is Andy. Great question. So during the quarter, we saw overall, we've had this decrease in inventory, kind of led by lower purchases over the last six months. As you can imagine, the lower amount of unfavorable freight costs, unfavorable tariffs kind of lead us to not having those costs as much during the quarter. Going forward, like I said, in the prepared remarks. Second half of the year, we're kind of expecting right in line with the second half of last year, we're back into kind of that normal promotional level that we saw pre-pandemic, which we had last year as well, with similar programs that we're expecting in the second half of the year.

Okay, so then is the more higher cost inventory that was burdened with elevated inbound shipping costs? Are we fully sold through that? Or so can we normalize that kind of going forward? Or do we still have some to filter through the P&L?

Yes, not yet. Great question, but not yet. So freight costs are definitely way down. We're seeing them anywhere between probably four and five times lower now than they were even six months ago. But because those freight costs are capitalized into inventory, it'll take a little while for them to kind of flush through COGS. So I would probably say another couple quarters.

Got it. Oaky, that’s helpful. And we kind of touched on the traditional channel and restocking a bit earlier, but maybe also putting a finer tune to it. We've been comping in the negative 20% to 40% range for the traditional channel for the past like year or so. And retailers are going to start, they are going to have to start taking a more aggressive stance to restocking. Can we expect the traditional channel to approach more of a high single digit negative comp in the back half of the year? Or are we more of leaning on the DTC, E-commerce businesses to get us somewhere around that implied revenue mark for the full year?

Yes, we haven't really, we can't dig in that detail. However, Q2 we saw a similar environment that we had in Q1, where we're kind of, we're competing against inventory levels of other products at our retailers. So they're focused on reducing inventories overall, which are limiting those open devices. So as Brian talked about before TBD on when that shakes loose.

Yes, Mike, this is Brian. I would also add, let's not forget that we're introducing a lot of new products each year. And we've got a focused stream of new products coming out, we mention a few that we have on the call today, the Claymore, which is going to be, in my opinion, a huge product for us. We've got some additional things coming out under Grilla and Bubba here in the next little bit. So that's all incremental. We don't see that as necessarily restocking, right? That's just incremental, new product play. And so that's a part of it as well. So we're very bullish on that.

Got, it makes a lot of sense. Last one for me. I know we didn't own Grilla in the prior year period. But pro forma, we're sales positive in the quarter.

If you look at our MD&A, you'll see that our direct-to-consumer revenue from Grilla and MEAT was about $5 million. We also filed our investor presentation indicating that MEAT's revenue on a trailing twelve months basis is $8.7 million. You can see the trajectory from our other presentations.

Our next question will come from John Kernan with Cowan.

Hey, good afternoon, guys. Thanks for taking my question. Thanks, the balance sheet $111 million in inventory on the balance sheet, it's down from where it was on $1 basis in Q1. How should we think about the inventory balance in the back half of the year understanding that there's some flow of product that's going to go into your traditional channels of retail where they might be backed up still. But as we model the cash flow statement, this is a big part of how the overall cash position is going to shake out at the end of the year. So I'm just curious, is there anything that gives you confidence that this amount of inventory, the stays on hand is going to come down and create a cash inflow into the back half of the year?

Yes, John, this is Andy. It’s a great question. So we’ve talked, starting last quarter that we’ve had these targeted inventory reduction initiatives that will drive cash conversion, we were actually saying closer to the second half of the year, we’re actually ahead of schedule on that. So we thought that the $9 million reduction in the quarter, we’re very pleased with that. But the work is not done. And we’re going to continue to drive those in – that inventory balance down to convert cash in the second half of the year, we’ve talked in the past about the $100 million plus is probably too high of an inventory balance. And on the low end, I think we ended fiscal ’21 at $74 million. But we also had $15 million of backlog. So we’ve said that that number was too low. So it’ll take some time to bring the inventory levels down. But we have those initiatives in place and we’re executing against those.

Got it. And maybe talk to innovation in the product pipeline, by brand that you're most excited about that can get the top line run rate improving as we head into the back half of fiscal year and into the calendar year, next calendar year.

Yes. Certainly, hey, this is Brian. So like we mentioned, under the Caldwell brand, which is in our shooting sports category. And we're focused in some of the larger I would say stable, more stable categories within shooting sports. So getting into shotgun sports, the Claymore is, again, my opinion and also the folks that are getting their hands on it is a revolutionary product. I think that's going to be a big Halo product for us going forward. So more to come on that we just started shipping that product. Within Frankford Arsenal, that's our reloading brand. So now we're getting into progressive presses if you know much about reloading, and so we're just about to launch our x 10, which we showed at SHOT show last year, we began shipping some pilot units to consumers to get their feedback and also begin to build that groundswell. As you look at the way we're marketing some of our products now, just given the, I would say battening down the hatches somewhat, we're getting more creative in terms of how we get our products out, how we're launching those products, build working more with communities, quite honestly a lesson learned from Grilla. Grilla has done a fantastic job in that regard, and so we're doing something very similar. With MEAT! Your Maker, we do have some other products planned that you'll see here shortly, some nice high ASP products, Grilla, we've had a few products in development, beginning really just before the acquisition. And I say that because we were looking for a brand to apply some of these innovations and some of this IP, and it worked out perfectly with Grilla. So you'll see some of those innovations here in the next few quarters, probably the next quarter. And then going into the second. And then Bubba, right, we've got Bubba ICAST coming up next summer. So we're working on some of those new products, we've got the smart fish scale, which is if you've heard me talk about it, like Strava for fishing, totally revolutionize the way that fishing tournaments happen and how they're done. And so more news to come on that. But that will begin shipping here in the spring. So quite a few new, I'd say very disruptive products and some very large markets, largely the markets that we're really excited about.

Got it, then maybe my final question is just on gross margin, there was a nice inflection in terms of just the year-over-year change in gross margin of 100 basis points. Maybe talk to how we should think about gross margin, not just in the back half of this year, but long term. What are the levers to kind of take you back to that 46%, 47% gross margin you've been had in the past?

Yes, no worries. In the long term, I believe that the reduction in freight costs will be beneficial. As I mentioned earlier, container costs had increased significantly, four to five times higher than a couple of years ago, but they have now returned to normal. Unfortunately, outbound freight costs remain elevated due to high fuel prices, which affects our operational expenses. However, from a gross margin perspective, I expect freight costs to begin improving from fiscal year 2024 onwards, which should assist us in reaching the levels you mentioned, John.

I'll jump into, this is Brian, really quick. Certainly new products are a major way that we look to expand margins. So that's obviously a big initiative, this last quarter, it was about 30% of our total net sales. And then also direct to consumer, being very careful, of course not to step on our retailers toes, we are very careful about not competing with them. But with our more direct-to-consumer-only brands and in looking at other businesses to either acquire or to form organically presents a good opportunity for us to continue to take margin on the gross margin side.

Our next question will come from Mark Smith with Lake Street Capital.

Hi, guys, realizing that you guys are pretty diverse outdoor company. Can you talk about what you are seeing in consumer trends kind of today clientele and such jab come from Black Friday and moving into hunting season. We'd love to hear your thoughts kind of on the split between maybe hunt shoot products versus kind of fish and camp and everything else.

Sure, Mark. Yes, this is Brian, I would say just real quick on Black Friday and Cyber Monday. Speaking for the direct-to-consumer side of the business, we saw some really impressive numbers. Really impressive increases year-over-year, for both Grilla and MEAT, so the teams did a great job there, which again, just speaks to one of the earlier things we spoke to consumers, at least a portion of consumers are still willing to spend higher ring volumes, higher bundling, things like that. So that's encouraging to see. And then as it relates to the breakdown hunt shoot versus fishing. I would say that across the board. I don't recall seeing anything that jumped out at me in terms of fishing being higher than something else. We did see some good trends with BOG. BOG is our hunting brand and so we sell a lot of tripods under that brand, death-grip is our marquee IP protected product there. And so we did see some nice trends on that side related to hunting but nothing else Mark that caught my attention.

Okay, as we look in particular at kind of the shooting sports products, any additional insight, we're seeing some mixed data today that looks pretty positive. For the most work for November, assuming that we've got more kind of centerfire rifles that are part of that rather than hand guns. Anything that to call out where you've seen kind of direct tie, perhaps to any increase or better firearm sales that are tied to kind of your accessory sales?

I would say in total on the shooting sports side, we, like I said earlier, we have seen inventory in the channel drop versus where it was last year, and that in the double digits in the quarter. And then as it relates to sales, I would say flat to down slightly. I'd say consistent with what we're next has been shaken out here as of late. Andy, do you –

Yes, no, totally agree. And as you know, I mean, there's still a decent amount of channel inventory out there, our POS data is based on roughly 50% of, we see roughly 50% of our sales, which we don't see some of the distributors, dealers. But assuming that there's still a decent amount of shooting sports inventory out there.

Okay, and then next, just kind of big pitchers, we think about direct to consumer the good job, you guys have done there, can you just talk about learnings and opportunities on continue to mix, continuing to expand that kind of throughout the product portfolio? And then also, I'm curious as you continue to build up MEAT and Grilla, are there opportunities to change from kind of a fully direct to consumer market to perhaps putting this into brick and mortar eventually?

Tough questions, Mark. So learnings first, yes, I mean, it's been really interesting, MEAT! Your Maker has exceeded our expectations, we launched that organically. And we have learned a ton, we've been pushing the bounds with the product quality and really tried to offer value to the consumer. And they fully embraced that, it's working. And then here comes Grilla, we acquired Grilla. And like I said, we have some products that were in development that you'll see very shortly that are going to be, we're going to use Grilla to introduce those. But Grilla had a very unique approach to marketing their products, very unique approach to building consumer loyalty. And so we're taking notes there and beginning to implement that for other brands, like MEAT! Your Maker. So in the way that we introduce our products, making getting consumers involved in that process creates ownership. And ultimately, I think that's helped to really create this groundswell for our direct-to-consumer brands. So that is definitely a learning that we've taken. And then we've also been very careful with not forcing anything with the consumer. We don't want to begin to bundle things that just don't make sense and feels forced. So we have been very careful, we do a lot of testing, AV testing, whether it's advertising or bundling opportunities. And then we obviously take that information and make better decisions. So that's been helpful as well, as in regards to your second question in other words, would we take Grilla, and MEAT! Your Maker, for example, into brick-and-mortar retail, it’s not out of question I think ultimately, we want to do what's best for the brand, we also want to honor the consumer. And if there's a retail partner that is in alignment with those two things, and we can offer value, then I think it's something worth exploring. But we also have quite a bit of demand that's built up through our direct-to-consumer channel, and so we don't want to neglect that as well. So is it possible? Certainly, is it something that we've talked about? Definitely. But we definitely want to be careful about that transition to make sure we're doing what's right for the brand.

Perfect and last one for me, I don't think it's too bad of a question here. Just cash balances in good shape as well as availability, you move down into the kind of that third priority on capital deployment on returning cash this quarter. Any changes that you're seeing in the M&A market today? Are you seeing more opportunities? Are you seeing valuations turn any more reasonable? Any updates that you have would be great?

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 few deals. Just the last few weeks alone we've had several conversations 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 our 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.

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

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.

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