Matribhumi Samachar English
– Q3 Net Sales of $115.9 Million
– Q3 Gross Margin of 24.1%; Non-GAAP Gross Margin of 25.1%
– Q3 EPS of $0.04/Share; Q3 Adjusted EPS of $0.02/Share
Maryville, Tennessee–(Newsfile Corp. – March 6, 2025) – Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the third quarter of fiscal 2025, ended January 31, 2025.
Financial Highlights
Net sales were $115.9 million, a decrease of $21.6 million, or 15.7%, from the comparable quarter last year.
Gross margin was 24.1% compared with 28.7% in the comparable quarter last year.
GAAP net income was $1.7 million, or $0.04 per diluted share, compared with $7.9 million, or $0.17 per diluted share, for the comparable quarter last year.
Non-GAAP net income was $962 thousand, or $0.02 per diluted share, compared with $8.7 million, or $0.19 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the relocation and a gain on sale of certain real estate. For a detailed reconciliation, see the schedules that follow in this release.
Non-GAAP Adjusted EBITDAS was $13.3 million, or 11.5% of net sales, compared with $21.4 million, or 15.6% of net sales, for the comparable quarter last year.
Mark Smith, President and Chief Executive Officer, commented, “Our top line revenue for the third quarter came in slightly below our target range. However, lower operating expenses and leveraging of our flexible manufacturing model – which is designed to ensure solid profitability regardless of demand conditions – allowed us to deliver on EPS and EBITDAS expectations. Our new products continue to perform very well and we believe we gained share in those categories, with products introduced within the past year accounting for over 41% of sales in the quarter. We anticipate that the firearms market will remain steady at current demand levels, and we believe we are well-positioned for continued success given our industry leading innovation pipeline, disciplined cost control, state-of-the-art facilities, flexible manufacturing model, strong balance sheet, and capital allocation model of returning value to stockholders.”
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, “While our new products continue to perform very well, we are seeing lower demand for our core product portfolio, which is negatively impacting both our top line and margins. We continue to expect full year revenue to be 5-10% lower than in fiscal 2024, which is consistent with what we said last quarter. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on March 20, 2025 with payment to be made on April 3, 2025.”
Conference Call and Webcast
The company will host a conference call and webcast on March 6, 2025 to discuss its third quarter fiscal 2025 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. A live and archived webcast of the event will be available on the company’s website at www.smith-wesson.com under the Investor Relations section.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, certain non-GAAP financial measures, including “non-GAAP net income,” “Adjusted EBITDAS,” and “free cash flow” are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) spin related stock-based compensation, (vi) an accrued legal settlement, (vii) a gain on sale of certain real estate, (viii) Relocation expense, and (ix) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About Smith & Wesson Brands, Inc.
Smith & Wesson Brands, Inc. (NASDAQ: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides forging and machining services to third parties. For more information call (800) 331-0852 or visit www.smith-wesson.com.
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) we anticipate that the firearms market will remain steady at current demand levels, (ii) we believe we are well-positioned for continued success given our industry leading innovation pipeline, disciplined cost control, state-of-the-art facilities, flexible manufacturing model, strong balance sheet and capital allocation model of returning value to stockholders, and (iii) we continue to expect full year revenue to be 5-10% lower than in fiscal 2024. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the results of the 2024 elections; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the Relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2024.
Contact:
[email protected]
(413) 747-3448
SMITH &WESSON BRANDS, INC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)As of:January 31, 2025April 30, 2024(In thousands, except par value and share data)ASSETSCurrent assets: Cash and cash equivalents$26,704$60,839Accounts receivable, net of allowances for credit losses of $5 on
January 31, 2025, and $0 on April 30, 202457,44259,071Inventories198,939160,500Prepaid expenses and other current assets7,9884,973Income tax receivable 7,6272,495Total current assets298,700287,878Property, plant, and equipment, net of accumulated depreciation and amortization
of $367,717 on January 31, 2025, and $352,615 on April 30, 2024243,430252,633Intangibles, net2,4662,598Goodwill19,02419,024Deferred income taxes7,3127,249Other assets7,9258,614Total assets$578,857$577,996LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities: Accounts payable$25,183$41,831Accrued expenses and deferred revenue26,74226,811Accrued payroll and incentives8,98717,147Accrued profit sharing1,6309,098Accrued warranty1,4361,813Total current liabilities63,97896,700Notes and loans payable (Note 3)109,04539,880Finance lease payable, net of current portion34,14335,404Other non-current liabilities7,6207,852Total liabilities214,786179,836Commitments and contingencies (Note 8) Stockholders’ equity: Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares
issued or outstanding——Common stock, $0.001 par value, 100,000,000 shares authorized, 75,680,697
issued and 44,002,703 shares outstanding on January 31, 2025 and 75,395,490
shares issued and 45,561,569 shares outstanding on April 30, 20247675Additional paid-in capital 295,348289,994Retained earnings526,896540,660Accumulated other comprehensive income7373Treasury stock, at cost (31,677,994 shares on January 31, 2025 and
29,833,921 shares on April 30, 2024)(458,322)
(432,642)Total stockholders’ equity364,071398,160Total liabilities and stockholders’ equity$578,857$577,996
SMITH & WESSON BRANDS, INC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(Unaudited) For the Three Months Ended
January 31,For the Nine Months Ended
January 31, 2025 20242025 2024 (In thousands, except per share data)Net sales $115,885 $ 137,484 $333,899 $ 376,686 Cost of sales 87,938 98,060 247,261 275,094 Gross profit 27,947 39,424 86,638 101,592 Operating expenses: Research and development 2,869 1,969 7,605 5,484 Selling, marketing, and distribution 10,336 10,080 29,839 31,138 General and administrative 12,999 16,063 42,480 45,571 (Gain)/loss on sale/disposition of assets (2,382)
30 (2,521)
(1)Total operating expenses 23,822 28,142 77,403 82,192 Operating income 4,125 11,282 9,235 19,400 Other (expense)/income, net: Other (expense)/income, net — (11)(11)
176 Interest expense, net (1,723)
(955)(3,875)
(1,448)Total other expense, net (1,723)
(966)(3,886)
(1,272)Income before income taxes 2,402 10,316 5,349 18,128 Income tax expense 739 2,434 1,659 4,629 Net income $1,663 $ 7,882 $3,690 $ 13,499 Net income per share: Basic – net income $0.04 $ 0.17 $0.08 $ 0.29 Diluted – net income $0.04 $ 0.17 $0.08 $ 0.29 Weighted average number of common shares outstanding: Basic 44,038 45,618 44,627 45,901 Diluted 44,398 46,028 45,069 46,315
SMITH & WESSON BRANDS, INC AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) For the Nine Months Ended January 31, 2025 2024 (In thousands)Cash flows from operating activities: Net income $ 3,690
$ 13,499 Adjustments to reconcile net income to net cash (used in)/provided by operating activities: Depreciation and amortization 23,860 24,291 (Gain)/loss on sale/disposition of assets (2,521) 785 Recoveries on notes and accounts receivable — (23)Deferred income taxes (63) —Stock-based compensation expense 5,724 4,264 Non-cash sublease income (1,287) (139)Changes in operating assets and liabilities: Accounts receivable 1,629 (5,471)Inventories (38,439) 23,589 Prepaid expenses and other current assets (3,015) (4,103)Income taxes (5,132) (6,079)Accounts payable (16,750) 11,230 Accrued payroll and incentives (8,160) 1,332 Accrued profit sharing (7,468) (4,730)Accrued expenses and deferred revenue (456) 3,907 Accrued warranty (377) 440 Other assets 946 595 Other non-current liabilities (232) (384)Net cash (used in)/provided by operating activities (48,051) 63,003 Cash flows from investing activities: Payments to acquire patents and software (150) (164)Proceeds from sale of property and equipment 2,668 2,877 Payments to acquire property and equipment (14,314) (85,188)Net cash used in investing activities (11,796) (82,475)Cash flows from financing activities: Proceeds from loans and notes payable 70,000 50,000 Cash paid for debt issuance costs (941) —Payments on finance lease obligation (134) (929)Payments on notes and loans payable — (10,000)Payments to acquire treasury stock (25,468) (9,128)Dividend distribution (17,375) (16,557)Proceeds to acquire common stock from employee stock purchase plan 749 722 Payment of employee withholding tax related to
restricted stock units (1,119) (825)Net cash provided by financing activities 25,712 13,283 Net decrease in cash and cash equivalents (34,135) (6,189)Cash and cash equivalents, beginning of period 60,839 53,556 Cash and cash equivalents, end of period 26,704
$ 47,367 Supplemental disclosure of cash flow information Cash paid for: Interest, net of amounts capitalized $ 4,219
$ 3,317 Income taxes $ 7,098
$10,687
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share data)
(Unaudited) For the Three Months Ended For the Nine Months Ended January 31, 2025 January 31, 2024 January 31, 2025 January 31, 2024 $ % of Sales $ % of Sales
$ % of Sales $ % of SalesGAAP net sales $ 115,885 $ 137,484 $333,899 $ 376,686 Relocation (203) — (4,416)
— Non-GAAP net sales $ 115,682 $ 137,484 $329,483 $ 376,686 GAAP gross profit $ 27,947 24.1% $ 39,424 28.7% $86,638 25.9% $ 101,592 27.0%Relocation expenses 1,096 642 2,830 1,954 Settlement — — 70 3,200 Non-GAAP gross profit $ 29,043 25.1% $ 40,066 29.1% $89,538 27.2% $ 106,746 28.3% GAAP operating expenses $ 23,822 20.6% $ 28,142 20.5% $77,403 23.2% $ 82,192 21.8%Gain on sale of asset 2,257 — 2,257 — Spin related stock-based compensation — (3) — (10) Relocation expenses (149) (431) (586)
(5,092) Non-GAAP operating expenses $ 25,930 22.4% $ 27,708 20.2% $79,074 24.0% $ 77,090 20.5% GAAP operating income $ 4,125 3.6% $ 11,282 8.2% $9,235 2.8% $ 19,400 5.2%Gain on sale of asset (2,257) — (2,257)
— Settlement — — 70 3,200 Spin related stock-based compensation — 3 — 10 Relocation expenses 1,245 1,073 3,416 7,046 Non-GAAP operating income $ 3,113 2.7% $ 12,358 9.0% $10,464 3.2% $ 29,656 7.9% GAAP net income $ 1,663 1.4% $ 7,882 5.7% $3,690 1.1% $ 13,499 3.6%Gain on sale of asset (2,257) — (2,257)
— Settlement — — 70 3,200 Spin related stock-based compensation — 3 — 10 Relocation expenses 1,245 1,073 3,416 7,046 Tax effect of non-GAAP adjustments 311 (254) (381)
(2,446) Non-GAAP net income $ 962 0.8% $ 8,704 6.3% $4,538 1.4% $ 21,309 5.7% GAAP net income per share – diluted $ 0.04 $ 0.17 $0.08 $ 0.29 Gain on sale of asset (0.05) — (0.05)
— Settlement — — — 0.07 Spin related stock-based compensation — — — — Relocation expenses 0.03 0.02 0.08 0.15 Tax effect of non-GAAP adjustments 0.01 (0.01) (0.01)
(0.05) Non-GAAP net income per share – diluted $ 0.02 (a) $0.19 (a) $0.10 $ 0.46
(a) Non-GAAP net income per share does not foot due to rounding.
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDAS
(in thousands)(Unaudited) For the Three Months EndedFor the Nine Months Ended January 31, 2025 January 31, 2024January 31, 2025 January 31, 2024 GAAP net income $ 1,663 $ 7,882 $3,690 $ 13,499 Interest expense 2,355 1,615 5,881 3,404 Income tax expense 739 2,434 1,659 4,629 Depreciation and amortization 7,548 6,941 23,754 24,145 Stock-based compensation expense 2,002 1,504 5,724 4,264 Settlement — —70 3,200 Gain on sale of asset (2,257) —(2,257)
—Relocation expense 1,230 1,073 3,143 5,186 Non-GAAP Adjusted EBITDAS $ 13,280 $ 21,449 $41,664 $ 58,327 Non-GAAP Adjusted EBITDAS Margin 11.5% 15.6%12.6% 15.5%
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIESRECONCILIATION OF NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands)
(Unaudited) For the Three Months EndedFor the Nine Months Ended January 31, 2025January 31, 2024January 31, 2025January 31, 2024Net cash (used in)/provided by operating activities $ (9,839)$25,247$(48,051)
$63,003Payments to acquire property and equipment (6,310)(18,205)
(14,314)
(85,188)Free cash flow $ (16,149)$7,042$(62,365)
$(22,185)
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