American Outdoor Brands, Inc.AOUT
American Outdoor Brands, Inc. Leases Disclosure
Leases
We lease real estate, as well as other equipment, under non-cancelable operating lease agreements. We recognize expenses under our operating lease assets and liabilities at the commencement date based on the present value of lease payments over the lease terms. Our leases do not provide an implicit interest rate. We use our incremental borrowing rate consistent with our revolving line of credit and based on the information available at the lease commencement date in determining the discount rate for the present value of lease payments. Our lease agreements do not require material variable lease payments, residual value guarantees, or restrictive covenants. For operating leases, we recognize expense on a straight-line basis over the lease term. We record tenant improvement allowances as an offsetting adjustment included in our calculation of the respective right-of-use asset. The vast majority of our leases are for property located in the United States.
Many of our leases include renewal options that can extend the lease term. These renewal options are at our sole discretion and are reflected in the lease term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.
The amounts of assets and liabilities related to our operating leases as of April 30, 2025 and 2024 are as follows (in thousands):
| April 30, 2025 | April 30, 2024 | |||||||||||||
| Operating Leases | ||||||||||||||
| Right-of-use assets | $ | 37,474 | $ | 37,540 | ||||||||||
| Accumulated amortization | (5,578) | (3,976) | ||||||||||||
| Right-of-use assets, net | $ | 31,896 | $ | 33,564 | ||||||||||
| Lease liabilities, current portion | $ | 1,336 | $ | 1331 | ||||||||||
| Lease liabilities, net of current portion | 31,949 | 33,289 | ||||||||||||
| Total operating lease liabilities | $ | 33,284 | $ | 34,620 | ||||||||||
During the fiscal year ended April 30, 2025, we recorded $4.1 million of operating lease costs, of which $386,000 related to short-term leases. During the fiscal year ended April 30, 2024, we recorded $3.6 million of operating lease costs, of which $22,000 related to short-term leases. During the fiscal year ended April 30, 2023, we recorded $4.0 million of operating lease costs, of which $132,000 related to short-term leases. As of April 30, 2025, our weighted average lease term and weighted average discount rate for our operating leases was 13.5 years and 5.4%, respectively. As of April 30, 2024, our weighted average lease term and weighted average discount rate for our operating leases was 14.6 years and 6.0%, respectively. The operating lease costs, weighted average lease term, and weighted average discount rate are primarily driven by the sublease of our corporate office and warehouse facility in Columbia, Missouri through fiscal 2039.
During the fiscal year ended April 30, 2024, we amended the existing operating lease for our corporate office and warehouse facility in Columbia, Missouri to expand our usable square footage in our warehouse. The term of the lease remains unchanged, through fiscal 2039. During the fiscal year ended April 30, 2024, we recorded a right-of-use asset and lease liability of $1.9 million.
During the fiscal year ended April 30, 2024, we entered an Assignment Agreement to assign us the rights to the entire building and surrounding property at our corporate office and warehouse facility in Columbia, Missouri. The assignment was effective on January 1, 2024. The operating lease covers approximately 632,000 square feet, where we formerly subleased approximately 361,000 square feet. The lease provides us with an option to expand the building by up to 491,000 additional square feet. The terms of the lease are consistent with the terms of our former sublease agreement prior to the Assignment Agreement. The lease term ends on November 26, 2038 and, pursuant to the Assignment Agreement, does not provide for an extension of the term of the lease. We will receive tax and other incentives from federal, state, and local governmental authorities. The former sublessor will guarantee the lease through the end of the term. During fiscal year ended April 30, 2024, we recorded a right-of-use asset and lease liability of $10.6 million for the additional space provided under the Assignment Agreement.
Future lease payments for all our operating leases as of April 30, 2025, and for succeeding fiscal years, are as follows (in thousands):
| Operating | ||||||||
| 2026 | $ | 3,379 | ||||||
| 2027 | 3,399 | |||||||
| 2028 | 3,450 | |||||||
| 2029 | 3,510 | |||||||
| 2030 | 3,572 | |||||||
| Thereafter | 32,461 | |||||||
| Total future lease payments | 49,771 | |||||||
| Less amounts representing interest | (16,487) | |||||||
| Present value of lease payments | 33,284 | |||||||
| Less current maturities of lease liabilities | (1,336) | |||||||
| Long-term maturities of lease liabilities | $ | 31,949 | ||||||
During the fiscal year ended April 30, 2025, the cash paid for amounts included in the measurement of the liabilities was $1.3 million and included in our operating cash flows. During the fiscal year ended April 30, 2024, the cash paid for amounts included in the measurement of the liabilities was $1.0 million and included in our operating cash flows.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.