Smith & Wesson Holding Corporation Reports Fourth Quarter and Full Fiscal 2009 Financial Results
- Fourth Quarter Sales of
$99.5 Million (+20 %) - Fourth Quarter Net Income of
$7.4 Million (+125 %) - Fourth Quarter Fully Diluted EPS of
$0.14 (+75 %) - Record Annual Sales of
$335.0 Million (+13%) - Firearms Backlog Grows to
$268 Million
Net sales for the fourth fiscal quarter ended
Smith & Wesson President and CEO,
"Sales of M&P pistols continued to be strong throughout the fourth
quarter. We received orders for our M&P pistols from a number of police
agencies, including the
Golden added, "Robust sales of our M&P15 tactical rifles continued
throughout the fourth quarter, benefitting from ongoing, heightened demand at
the consumer level. We continue to win new business in the law enforcement
market as well, both domestically and internationally. In the fourth quarter
we added law enforcement agencies including the North Carolina Highway Patrol,
the Detroit Police, and the
Total firearms sales for the fourth quarter were
"Gross profit of
"Operating expenses for fiscal 2009 were
"Our firearms backlog continued to increase dramatically during the
quarter, and reached its peak at
Spengler added, "We continued to strengthen our balance sheet, reducing
inventories by the end of 2009 to
Golden concluded, "It is against a backdrop of solid, fourth quarter
execution in our firearms business that we were pleased to announce last week
our intended acquisition of
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 and fiscal year ended
About
About Universal Safety Response
Based in Franklin,
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 Company's anticipated growth; the anticipated levels of the Company's and
its competitor's products within the industry's sales channel; the ability of
the Company to capitalize on strong consumer demand for its products,
particularly pistols, revolvers, and tactical rifles; the ability of the
Company to increase demand for its products in various markets, including
consumer and law enforcement channels, domestically and internationally; the
position of the Company hunting products in the consumer discretionary
marketplace and distribution channel; the Company's penetration rates in new
and existing markets; the Company's strategies; the ability of the Company to
introduce any new products; the success of any new product; and the success
of the Company's diversification strategy, including the expansion of the
Company's markets and the diversification of the Company's future revenue
base resulting from the acquisition of USR. The Company cautions that these
statements are qualified by important factors that could cause actual results
to differ materially from those reflected by such forward-looking statements.
Such factors include the demand for the Company's products, the state of the
U.S. economy, the Company's growth opportunities, the ability of the
Company's management to continue to integrate Thompson/Center Arms in a
successful manner, and other risks detailed from time to time in the Company's
reports filed with the SEC, including its Form 10-K Report for the fiscal year
ended
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of:
April 30, April 30,
2009 2008
---- ----
(In thousands, except par value
and share data)
ASSETS
Current assets:
Cash and cash equivalents $39,822 $4,359
Accounts receivable, net of allowance
for doubtful accounts of $2,386 on
April 30, 2009 and $197 on April 30, 2008 48,232 54,163
Inventories 41,729 47,160
Other current assets 3,093 4,725
Deferred income taxes 12,505 9,947
Income tax receivable - 1,818
--- -----
Total current assets 145,381 122,172
------- -------
Property, plant and equipment, net 51,135 50,643
Intangibles, net 5,940 65,501
Goodwill - 41,173
Deferred income taxes 1,143 -
Other assets 6,632 10,262
----- ------
$210,231 $289,751
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $21,009 $21,996
Accrued expenses 17,606 17,246
Accrued payroll 7,462 5,046
Accrued income taxes 2,790 -
Accrued taxes other than income 2,208 1,747
Accrued profit sharing 6,208 4,035
Accrued product liability 3,418 2,767
Accrued warranty 4,287 1,692
Current portion of notes payable 2,378 8,920
----- -----
Total current liabilities 67,366 63,449
------ ------
Deferred income taxes - 20,216
--- ------
Notes payable, net of current portion 83,606 118,774
------ -------
Other non-current liabilities 8,633 9,461
----- -----
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, 48,967,938 shares issued
and 47,767,938 shares outstanding on April
30, 2009 and 41,832,039 shares issued and
40,632,039 shares outstanding on April 30,
2008 49 42
Additional paid-in capital 91,103 54,128
Retained earnings/(accumulated deficit) (34,203) 30,004
Accumulated other comprehensive income 73 73
Treasury stock, at cost (1,200,000 common
shares) (6,396) (6,396)
------ ------
Total stockholders' equity 50,626 77,851
------ ------
$210,231 $289,751
======== ========
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE
INCOME/(LOSS)
For the Year Ended April 30,
----------------------------
2009 2008 2007
---- ---- ----
(In thousands, except per
share data)
Net product and services sales $334,955 $295,910 $236,552
Cost of products and services sold 237,167 203,535 160,214
------- ------- -------
Gross profit 97,788 92,375 76,338
------ ------ ------
Operating expenses:
Research and development 2,906 1,946 1,248
Selling and marketing 28,378 27,857 22,362
General and administrative 40,983 38,432 28,300
Impairment of long-lived assets 98,243 - -
------ --- ---
Total operating expenses 170,510 68,235 51,910
------- ------ ------
Income/(loss) from operations (72,722) 24,140 24,428
------- ------ ------
Other income/(expense):
Other income/(expense), net (806) (723) (497)
Interest income 295 122 217
Interest expense (5,892) (8,743) (3,569)
------ ------ ------
Total other expense, net (6,403) (9,344) (3,849)
------ ------ ------
Income/(loss) before income taxes (79,125) 14,796 20,579
Income tax expense/(benefit) (14,918) 5,675 7,618
------- ----- -----
Net income/(loss)/comprehensive
income/(loss) $(64,207) $9,121 $12,961
======== ====== =======
Weighted average number of common
and common equivalent shares
outstanding, basic 46,802 40,279 39,655
------ ------ ------
Net income/(loss) per share, basic $(1.37) $0.23 $0.33
====== ===== =====
Weighted average number of common
and common equivalent shares
outstanding, diluted 46,802 41,939 41,401
------ ------ ------
Net income/(loss) per share,
diluted $(1.37) $0.22 $0.31
====== ===== =====
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDAS (Unaudited)
For the Quarter Ended For the Quarter Ended
April 30, 2009: April 30, 2008:
--------------------- ---------------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
---- ----------- -------- ---- ----------- --------
Net product and
services sales $99,536 $99,536 $83,107 $83,107
Cost of products
and services
sold 68,681 $(2,113)(7) 66,568 57,640 $(1,669)(1) 55,971
------ ------- ------ ------ ------- ------
Gross profit 30,855 2,113 32,968 25,467 1,669 27,136
------ ----- ------ ------ ----- ------
Operating
expenses:
Research and
development 813 (20)(1) 793 536 (26)(1) 510
Selling and
marketing 6,055 (44)(1) 6,011 7,099 (46)(1) 7,053
General and
Administrative 12,010 (1,259)(2) 10,751 10,346 (2,428)(2) 7,918
------ ------ ------ ----- ------ -----
Total operating
expenses 18,878 (1,323) 17,555 17,981 (2,500) 15,481
------ ------ ------ ------ ------ ------
Income
from operations 11,977 3,436 15,413 7,486 4,169 11,655
------ ----- ------ ----- ----- ------
Other income/
(expense):
Other income/
(expense), net 452 (356)(4) 96 (170) (130)(4) (300)
Interest income 82 82 77 77
Interest expense (1,207) 1,207(5) 0 (2,071) 2,071(5) 0
------ ----- --- ------ ----- ---
Total other
expense, net (673) 851 178 (2,164) 1,941 (223)
---- --- --- ------ ----- ----
Income
before income
taxes 11,304 4,287 15,591 5,322 6,110 11,432
Income tax
expense 3,889 (3,889)(6) 0 2,027 (2,027)(6) 0
----- ------ --- ----- ------ ---
Net income
comprehensive
income $7,415 $8,176 $15,591 $3,295 $8,137 $11,432
====== ====== ======= ====== ====== =======
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME/(LOSS) TO ADJUSTED EBITDAS
(Unaudited)
For the Year Ended For the Year Ended
April 30, 2009: April 30, 2008:
------------------- -------------------
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
---- ----------- -------- ---- ----------- --------
Net product
and services
sales $334,955 $334,955 $295,910 $295,910
Cost of
products
and services
sold 237,167 $(9,758)(7) 227,409 203,535 $(6,384)(1) 197,151
------- ------- ------- ------- ------- -------
Gross profit 97,788 9,758 107,546 92,375 6,384 98,759
------ ----- ------- ------ ----- ------
Operating
expenses:
Research and
development 2,906 (83)(1) 2,823 1,946 (48)(1) 1,898
Selling and
marketing 28,378 (167)(1) 28,211 27,857 (149)(1) 27,708
General and
Administ-
rative 40,983 (6,433)(2) 34,550 38,432 (9,814)(2) 28,618
Impairment
of long-
lived
assets 98,243 (98,243)(3) 0 - 0
------ ------- --- --- ---
Total
operating
expenses 170,510 (104,926) 65,584 68,235 (10,011) 58,224
------- -------- ------ ------ ------- ------
Income/(loss)
from
operations (72,722) 114,684 41,962 24,140 16,395 40,535
------- ------- ------ ------ ------ ------
Other income/
(expense):
Other
income/
(expense),
net (806) 97(4) (709) (723) 28(4) (695)
Interest
income 295 295 122 0 122
Interest
expense (5,892) 5,892(5) 0 (8,743) 8,743(5) 0
------ ----- --- ------ ----- ---
Total other
expense, net (6,403) 5,989 (414) (9,344) 8,771 (573)
------ ----- ---- ------ ----- ----
Income/(loss)
before income
taxes (79,125) 120,673 41,548 14,796 25,166 39,962
Income tax
expense/
(benefit) (14,918) 14,918(6) 0 5,675 (5,675)(6) 0
------- ------ --- ----- ------ ---
Net income/
(loss) /
comprehensive
income/
(loss) $(64,207)$105,755 $41,548 $9,121 $30,841 $39,962
======== ======== ======= ====== ======= =======
(1) To eliminate depreciation expense.
(2) To eliminate depreciation, amortization, stock-based compensation
expense and impact of Walther PPK recall on profit sharing.
(3) To eliminate write down of long-lived assets.
(4) To eliminate unrealized mark-to-market adjustments on foreign
exchange contracts.
(5) To eliminate interest expense.
(6) To eliminate income tax expense.
(7) To eliminate depreciation expense and impact of Walther PPK recall.
Contacts:
(413) 747-3304
lsharp@smith-wesson.com
Smith & Wesson Holding Corp.
(413) 747-3304
Web Site: http://www.smith-wesson.com
(SWHC)