Operator

Good day, everyone, and welcome to the American Outdoor Brands, Inc. Fourth Quarter and Full Year Fiscal 2026 Financial Results Conference Call. This call is being recorded.

At this time, I would like to turn the conference over to Ms. Liz Sharp, Vice President of Investor Relations. Please go ahead, ma’am.

Elizabeth Sharp
Vice President of Investor Relations

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, could, 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 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.

A few

Kuwait International Airport is open and operating today, with Kuwait Airways and Jazeera Airways running normal schedules and a key foreign carrier resuming service for the first time since the airport’s earlier conflict-related disruptions.

Current Operational Status

Kuwait reopened its airspace and Kuwait International Airport is open and operating, with the region now moving from a ceasefire to a wider peace following the U.S.-Iran conflict. Kuwait Airways is flying from Terminal 4 and Jazeera Airways from Terminal 5, with schedules steadily returning to normal as the situation stabilizes. A brief, precautionary airspace closure during the conflict has long since been lifted.

Oman Air Resumes Service Today

Today marks a notable milestone in the airport’s gradual recovery, with one of the foreign carriers that had been waiting to resume operations now back in the air. Among the foreign carriers resuming, Oman Air has confirmed its Kuwait flights restart on June 25, 2026, temporarily operating through Terminal 4 instead of its usual Terminal 1.

Terminal 1 Remains the Main Outstanding Issue

While the airport overall continues operating, one of its primary facilities remains closed pending repair work tied to earlier damage. Terminal 1 remains closed for repairs after earlier damage, and there is no confirmed date for it to reopen. Terminals 4 and 5 are fully operating in the meantime.

The damage to Terminal 1 traces back to a series of attacks earlier this year. Between February 28, 2026, and June 2026, the airport was targeted by Iranian drone attacks as part of Iran’s strikes on Persian Gulf states, causing damage to Terminal 1. That reopening of Terminal 1 proved short-lived after an earlier repair, with the facility suffering more serious structural damage in a subsequent attack. Terminal 1 suffered significant damage during drone and missile strikes on June 3, 2026, with parts of the terminal experiencing a partial roof collapse and other structural damage, making the facility unsafe for passenger operations. That second closure has remained in effect since, with no confirmed reopening date currently available.

Terminal 3 Permanently Shut, Terminal 2 Still Under Construction

Beyond Terminal 1’s temporary closure, the airport’s broader terminal lineup includes additional facilities at different stages of completion. Terminal 2 is still under construction, while Terminal 3 is permanently closed.

A Long Road to Today’s Reopening

The airport’s current state reflects a complicated recovery process that unfolded over several months earlier this year. Since February 28, 2026, all flights to and from Kuwait International Airport were suspended following the closure of Kuwaiti airspace due to the broader regional conflict. Local carriers like Jazeera Airways diverted operations to Qaisumah International Airport in Saudi Arabia, located approximately two and a half hours from Kuwait by road, during the suspension.

The airport was hit by suicide drones between late February and April, causing damage to the facility, including its radar installation, though there were no casualties from those attacks. Kuwait Airways and Jazeera Airways restarted operations from the airport on April 26, operating from Terminals 4 and 5. Terminal 1 reopened on June 1, with some non-Kuwaiti airlines restoring service to the airport at that time, before the second strike on June 3 forced its closure once again.

Government Statements on the Reopening Process

Kuwaiti aviation officials have emphasized a careful, coordinated approach to restoring full operations throughout the recovery. Sheikh Hamoud Mubarak Al Sabah, Chairman of the General Civil Aviation Authority, said the move to reopen the airspace was coordinated with relevant domestic and international authorities to ensure operations resumed in line with the highest safety and security standards. Sheikh Hamoud also praised the efforts of aviation staff and government entities involved in managing the situation and accelerating recovery, expressing appreciation for Saudi Arabia’s support in facilitating Kuwaiti carriers through its airports, along with broader coordination among Gulf Cooperation Council countries to maintain air traffic continuity during the crisis.

What Travelers Should Do

Given the airport’s recent history of repeated disruptions, officials and travel advisories continue to recommend that passengers verify their specific flight status directly with their airline before heading to the airport. Confirm your flight with your airline before heading to the airport, as timings can still vary while schedules normalize. Travelers with urgent concerns should use official airline customer service channels for the latest updates regarding canceled or diverted flights, including options for rebooking, refunds, or rerouting.

Getting To and From the Airport

For travelers planning their journey, Kuwait International Airport is located approximately 15.5 to 16 kilometers south of Kuwait City’s center. A taxi to the city center takes approximately 20 to 25 minutes and costs between 5 and 10 Kuwaiti dinars, or roughly $16 to $33. Public buses on lines 13, 99, and 501 connect the airport to surrounding districts including Hawalli and Salmiya, running every 45 to 60 minutes for a fare of 0.250 Kuwaiti dinars, or about 80 cents, one way, though no direct metro or train service is currently available.

A Major Aviation Hub for the Region

Kuwait International Airport is the country’s primary aviation hub and the main airport serving the State of Kuwait, handling over 15 million passengers annually and offering connections to more than 100 destinations worldwide. As the central hub for Kuwait Airways and Jazeera Airways, the airport’s continued recovery carries significant importance for both regional connectivity and Kuwait’s broader economic activity.

The Broader Regional Context

The airport’s repeated cycle of closures and reopenings has occurred against the backdrop of a broader, easing regional conflict. With the region moving from a ceasefire to a wider peace, conditions have eased considerably, though officials and travel advisories continue to recommend that travelers check their government’s latest travel advisory before making plans, as guidance continues to be updated as the broader situation settles.

With Terminals 4 and 5 fully operational and Oman Air now resuming service as of today, Kuwait International Airport’s recovery appears to be continuing on a positive trajectory, even as Terminal 1 remains closed indefinitely pending repairs and Terminal 2’s broader expansion project continues working toward its targeted late-2026 opening. Travelers planning trips through Kuwait in the coming weeks should expect continued gradual normalization of service, but should not assume full pre-conflict operational capacity has yet been restored across all of the airport’s facilities.

Flight passengers are being warned not to pack power banks or vapes in their hold luggage ahead of the busy summer holiday travel period beginning for parts of the UK.

The fire risk posed by lithium batteries is now the number one safety risk to aircraft, according to the aviation regulator, as the number of devices found in hold bags has nearly doubled in a year.

The Civil Aviation Authority (CAA) says the average person now takes four different lithium powered devices on a flight.

Ahead of the school summer holidays, which begin in Scotland first this week, people are being reminded to take devices in the cabin with them.

The batteries can store huge amounts of energy in a small space, and are now commonly used in lots of electrical items including laptops, vapes, power banks, mobile phones and smart watches.

They’re incredibly useful and versatile. But if the batteries overheat or are defective, a fire can result which spreads very quickly and is hard to control.

In 2024, 316 incidents of devices with lithium batteries detected in hold bags were reported to UK authorities. In 2025, that rose to 643.

Reports of devices overheating or malfunctioning also nearly doubled the same year, from 123 to 206.

Most of these issues occurred in the cabin where crew could deal with the situation, but the concern is that if this happens in the hold, the problem may not be discovered until it’s too late to control it.

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Southeast Asia has consolidated its position as the world’s most dynamic fintech market heading into the second half of 2026. A Money20/20 survey of more than 130 senior fintech leaders across Asia found that Southeast Asia was identified as the primary growth target by 22.9% of respondents — making it the leading destination despite a slight pullback from the prior year’s 31.4%, a sign of market maturation rather than retreat.

The drivers are structural and well-documented: a 670-million population with a median age around 30, high mobile penetration, and a legacy banking system that left hundreds of millions underserved. Fintech is now embedded in e-commerce platforms, reflecting evolving consumer behaviour where users expect financial services to be available seamlessly without switching between applications. Approximately 77% of consumers in Southeast Asia already use embedded finance through digital wallets, buy-now-pay-later services, or in-app loans, with around 75% considering it essential to their digital experience.

From payments to infrastructure

The region’s most consequential development is the rapid buildout of cross-border payment infrastructure — a direct response to the chronic friction of operating across 11 jurisdictions with distinct currencies, regulators, and banking ecosystems.

By December 2025, there were 29 QR and person-to-person payment linkages within ASEAN and with external partners, recording millions of transactions and hundreds of millions of dollars in transfers — figures cited by the 2026 Joint Statement of ASEAN finance ministers and central bank governors as evidence of maturing adoption.

Thailand sits at the centre of this buildout. In late 2025 and into 2026, the Bank of Thailand deepened bilateral QR linkages with China’s Weixin Pay, Alipay, and UnionPay QR, and advanced ASEAN Regional Payment Connectivity efforts — including the official launch of Thailand-China cross-border QR payment acceptance, enabling Chinese tourists to pay Thai merchants in RMB and Thai users to pay in CNY via linked wallets.

The growth trajectory is steep: QR cross-border payments in Thailand increased by more than 300% in 2024 compared to 2023, and in Malaysia by 550% over the same period. The tailwind from intra-ASEAN tourism is significant — intra-ASEAN visitors accounted for 42% of total regional arrivals in 2023, up from 36% in 2019, with tourism contributing roughly 8% of regional GDP and 12% of employment.

The longer-term architecture is Project Nexus, a multilateral framework backed by the Bank for International Settlements. Rather than requiring each payment system operator to build custom bilateral connections for every partner country, Project Nexus requires only a single connection to the Nexus platform — a design with significant implications for scalability. The Reserve Bank of India has already joined, potentially connecting India’s Unified Payments Interface — the world’s largest instant payment system — to the ASEAN network.

The fragmentation problem

For all the momentum, a fundamental tension persists. The same market heterogeneity that drove fintech innovation also constrains it. Vietnam’s Deputy Prime Minister, speaking at the ASEAN Future Forum 2026, warned that ASEAN would struggle to build a strong fintech ecosystem if countries remained divided by fragmented data systems, incompatible standards, and governance gaps.

ASEAN’s fintech ecosystem is expanding rapidly, but growth remains uneven due to fragmented regulation, infrastructure gaps, and highly concentrated funding that limits firms’ ability to scale and extend services to underserved populations. A fintech that achieves product-market fit in Thailand still faces a materially different regulatory stack in Indonesia, Vietnam, or the Philippines — requiring duplicated compliance infrastructure and slowing regional expansion.

Cross-border payment interoperability remains constrained by regulatory barriers, particularly around processing payments with one leg outside domestic jurisdictions, making bilateral linkages complex and difficult to scale. Existing linkages were described at the 2026 Asian Banker Summit as operationally difficult to implement, while multilateral frameworks such as Nexus are viewed as more promising but still face unresolved challenges for wholesale use cases.

A different model of disruption

What distinguishes Southeast Asian fintech is its departure from the adversarial Western playbook. Rather than pitting challengers directly against legacy banks, the region has moved toward an “impact era” in which commercial success and social good are increasingly inseparable. Fintech firms are collaborating with traditional banks while still competing in certain areas, building ecosystem infrastructure rather than chasing outright disruption — visible in practice in the partnership between Singapore’s Grab Financial and Thailand’s Kasikornbank to expand digital wallet and e-money services across the region.

The Money20/20 APAC survey found that 90.6% of executives affirmed financial inclusion and social good as a core business strategy — a figure that would have been implausible in a Western fintech context five years ago, and one that reflects both genuine intent and the commercial reality that the largest untapped markets in Southeast Asia are the unbanked and underbanked.

Thailand’s position

Thailand is one of the fastest-growing fintech markets in ASEAN and has one of the world’s largest consumer bases for fintech mobile banking. Internet and mobile banking remain the most popular e-payment channels, with transaction volumes continuing to climb through late 2025, per Bank of Thailand data.

Thailand’s foundation for digital finance is reflected in near-universal financial account ownership at 96% and mobile phone penetration at 100%. The Bank of Thailand has been instrumental in fostering fintech startups through regulatory sandboxes, and PromptPay — the real-time payment network enabling instant transactions via national IDs, phone numbers, or QR codes — has significantly accelerated cashless adoption.

The central bank’s cross-border ambitions extend well beyond the China linkage. BOT has expanded PromptPay’s coverage to other ASEAN countries as part of the ASEAN Payment Connectivity initiative, with linkages also forged beyond ASEAN to countries with strong economic ties — particularly those with large flows of migrant workers and tourists.

The outlook

The structural case for Southeast Asian fintech remains intact. Demographic tailwinds, rising incomes, and a policy environment broadly supportive of digital financial services create durable demand. The cross-border payment buildout — particularly Nexus and the expanding QR linkage network — could materially reduce the cost of regional expansion for both fintechs and the small businesses they serve.

The constraint is not demand but architecture. Proposals for an ASEAN-wide fintech sandbox to allow cross-border financial technology solutions to be tested in a controlled environment remain aspirational. Without convergence on data standards, KYC/AML frameworks, and licensing reciprocity, the region risks consolidating into a collection of sophisticated national markets rather than an integrated economic bloc. That distinction matters for investors underwriting regional growth stories — and for the millions of small enterprises and migrant workers whose access to affordable financial services depends on whether the infrastructure eventually connects.

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