Smith & Wesson Holding Corporation Reports First Quarter Fiscal 2010 Financial Results
Net sales for the first fiscal quarter ended
Golden continued, "In addition to robust growth in our firearms segment, we began a new and exciting chapter in our history by entering the large and rapidly growing security market with our acquisition of USR, a leader in perimeter security solutions. There is tremendous commonality between the reputation for reliable security and safety that is held by both
Firearm sales increased for the first quarter by
"Gross profit increased to
"Our purchase of USR in July included a provision whereby stockholders of USR could earn up to 4 million shares of
"Operating expenses of
"Net income for the first quarter of
"Our firearms backlog was
Spengler added, "Inventory levels increased in the quarter by
Adjusted EBITDAS, a non-GAAP financial measure, was
Outlook
As is the case with most companies, providing outlook is difficult in the current economic environment. Based on current visibility, however, we expect our total company sales for the second quarter will be between
We expect total company gross profit margin to be between 31% and 32%, a significant improvement over the 27.3% gross margin in the second quarter of last year. We expect operating expenses to be higher versus the first quarter due to the inclusion of USR and the first quarter effects previously described.
Golden concluded, "Now is an exciting time for our company. Record first quarter results, together with our acquisition of USR, combine to mark a significant milestone, establishing
Conference Call
The Company will host a conference call today,
Reconciliation of U.S. GAAP to Adjusted EBITDAS
In this press release, a non-GAAP financial measure, known as "Adjusted EBITDAS" is presented. Adjusted EBITDAS excludes the effects of interest expense, income taxes, depreciation of tangible fixed assets, amortization of intangible assets, stock-based employee compensation expense and certain other non-cash transactions. From time to time, the Company may also elect to exclude certain significant non-recurring items in order to provide the reader with an improved understanding of underlying performance trends. See the attached "Reconciliation of GAAP Net Income/(Loss) to Adjusted EBITDAS" for a detailed explanation of the amounts excluded and included from net income to arrive at adjusted EBITDAS for the three-month period ended
About
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and the Company intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include statements regarding the size and growth prospects of the security market, the reputation of
Contacts:
Liz Sharp , VP Investor Relations
Smith & Wesson Holding Corp.
(413) 747-3304
lsharp@smith-wesson.com
William F. Spengler , EVP, Chief Financial Officer
Smith & Wesson Holding Corp.
(413) 747-3304
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of:
July 31, April 30,
2009 2009
---- ----
(Unaudited)
(In thousands, except par
value and share data)
ASSETS
Current assets:
Cash and cash equivalents $35,173 $39,822
Accounts receivable, net of
allowance for doubtful accounts
of $935 on July 31, 2009 and
$2,386 on April 30, 2009 66,279 48,232
Inventories 47,401 41,729
Other current assets 5,608 3,093
Deferred income taxes 11,377 12,505
------ ------
Total current assets 165,838 145,381
------- -------
Property, plant and equipment, net 53,826 51,135
Intangibles, net 18,742 5,940
Goodwill 79,992 -
Deferred income taxes - 1,143
Other assets 6,537 6,632
----- -----
$324,935 $210,231
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $21,181 $21,009
Accrued expenses 23,097 17,606
Accrued payroll 6,823 7,462
Accrued income taxes 2,891 2,790
Accrued taxes other than income 2,652 2,208
Accrued profit sharing 9,182 6,208
Accrued product liability 3,485 3,418
Accrued warranty 3,943 4,287
Current portion of notes payable 4,492 2,378
----- -----
Total current liabilities 77,746 67,366
------ ------
Deferred income taxes 2,038 -
----- ---
Notes payable, net of current portion 83,059 83,606
------ ------
Other non-current liabilities 25,675 8,633
------ -----
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value,
20,000,000 shares authorized, no
shares issued or outstanding - -
Common stock, $.001 par value,
100,000,000 shares authorized,
60,646,482 shares issued and
59,446,482 shares outstanding on
July 31, 2009 and 48,967,938
shares issued and 47,767,938
shares outstanding on April 30, 2009 61 49
Additional paid-in capital 164,310 91,103
Retained earnings/(accumulated deficit) (21,631) (34,203)
Accumulated other comprehensive income 73 73
Treasury stock, at cost
(1,200,000 common shares) (6,396) (6,396)
------ ------
Total stockholders' equity 136,417 50,626
------- ------
$324,935 $210,231
======== ========
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months Ended:
---------------------------
(in thousands, except per
share data)
July 31, July 31,
2009 2008
---- ----
Net product and services sales $102,236 $78,480
Cost of products and services sold 66,615 53,632
------ ------
Gross profit 35,621 24,848
------ ------
Operating expenses:
Research and development 880 775
Selling and marketing 7,045 7,703
General and administrative 10,999 10,649
------ ------
Total operating expenses 18,924 19,127
------ ------
Income from operations 16,697 5,721
------ -----
Other income/(expense):
Other income/(expense), net 3,206 (112)
Interest income 159 58
Interest expense (1,331) (2,051)
------ ------
Total other income/(expense), net 2,034 (2,105)
----- ------
Income before income taxes 18,731 3,616
Income tax expense 6,159 1,362
----- -----
Net income/comprehensive income $12,572 $2,254
======= ======
Weighted average number of common
and common equivalent shares
outstanding, basic 53,779 45,462
------ ------
Net income per share, basic $0.23 $0.05
===== =====
Weighted average number of common
and common equivalent shares
outstanding, diluted 61,099 46,595
------ ------
Net income per share, diluted $0.21 $0.05
===== =====
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDAS (Unaudited)
For the Three Months For the Three Months
Ended July 31, 2009: Ended July 31, 2008:
--------------------- ---------------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
---- ----------- -------- ---- ----------- --------
Net product
and services
sales $102,236 $102,236 $78,480 $78,480
Cost of
products and
services sold 66,615 $(1,952)(1) 64,663 53,632 $(1,920)(1) 51,712
------ ------- ------ ------ ------- ------
Gross profit 35,621 1,952 37,573 24,848 1,920 26,768
------ ----- ------ ------ ----- ------
Operating expenses:
Research and
development 880 (20)(1) 860 775 (23)(1) 752
Selling and
marketing 7,045 (43)(1) 7,002 7,703 (43)(1) 7,660
General and
administrative 10,999 (1,342)(2) 9,657 10,649 (2,433)(2) 8,216
------ ------ ----- ------ ------ -----
Total operating
expenses 18,924 (1,405) 17,519 19,127 (2,499) 16,628
------ ------ ------ ------ ------ ------
Income from
operations 16,697 3,357 20,054 5,721 4,419 10,140
------ ----- ------ ----- ----- ------
Other income/
(expense):
Other income/
(expense), net 3,206 (3,201)(6) 5 (112) 97 (5) (15)
Interest income 159 159 58 58
Interest
expense (1,331) 1,331 (3) 0 (2,051) 2,051 (3) 0
------ ----- --- ------ ----- ---
Total other
expense, net 2,034 (1,870) 164 (2,105) 2,148 43
----- ------ --- ------ ----- ---
Income before
income taxes 18,731 1,487 20,218 3,616 6,567 10,183
Income tax
expense 6,159 (6,159)(4) 0 1,362 (1,362)(4) 0
----- ------ --- ----- ------ ---
Net income/
comprehensive
income $12,572 $7,646 $20,218 $2,254 $7,929 $10,183
======= ====== ======= ====== ====== =======
(1) To eliminate depreciation expense.
(2) To eliminate depreciation, amortization, and stock-based compensation
expense.
(3) To eliminate interest expense.
(4) To eliminate income tax expense.
(5) To eliminate unrealized mark-to-market adjustments on foreign
exchange contracts.
(6) To eliminate impact of adjustment to fair value of contingent
consideration liability.
SOURCE
Liz Sharp, VP Investor Relations, +1-413-747-3304, lsharp@smith-wesson.com, or William F. Spengler, EVP, Chief Financial Officer, +1-413-747-3304, both of Smith & Wesson Holding Corp.