SPRINGFIELD, Mass., Sept. 1, 2021 /PRNewswire/ -- Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the first quarter of fiscal 2022, ended July 31, 2021.  Unless otherwise indicated, any reference to income statement items refers to results from continuing operations.

First Quarter Fiscal 2022 Financial Highlights

• Net sales were $274.6 million, an increase of $44.7 million, or 19.5%, over the comparable quarter last year.
• Gross margin was 47.3%, compared with gross margin of 40.2% for the comparable quarter last year.
• Quarterly GAAP net income was $76.9 million, or $1.57 per diluted share, compared with $43.3 million, or $0.77 per diluted share, for the comparable quarter last year.
• Quarterly non-GAAP net income was $77.1 million, or $1.57 per diluted share, compared with $46.8 million, or $0.83 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the spin-off of the outdoor products and accessories business, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.
• Quarterly non-GAAP Adjusted EBITDAS was $109.6 million, or 39.9% of net sales, compared with $72.5 million, or 31.5% of net sales, for the comparable quarter last year.

Mark Smith, President and Chief Executive Officer, commented, "Our flexible manufacturing model and strong consumer preference for our products at the retail counter combined to deliver the highest first quarter net revenue in the company's history, marking the fifth consecutive quarter of top line records. Even more remarkable, our team has been able to deliver nearly 170% two-year compounded growth, significantly outpacing the competition, while simultaneously lowering operating costs over this same timeframe. This is a direct result of significant strides the team has made in executing our strategy to streamline business operations and increase flexibility, and has driven an incredible EBITDAS margin of nearly 40% in the quarter. But more importantly, we believe we are well positioned for the ever-changing market conditions in our industry, to maintain our leadership position in the industry, and  continue delivering impressive profitability in any environment."

Smith continued, "We are also thrilled to introduce our new M&P12 shotgun, which marks our entry into a brand-new category for the iconic Smith & Wesson brand, and presents a significant opportunity to continue capitalizing on the momentum we've built over the past year with the consumer. Within the first 24 hours of the announcement, we had tallied over 3 million consumer impressions and 300,000 engagements on social media, already making this one of our most widely viewed and most successful launches to date. We are excited to continue innovating in this category and look forward to its growth potential."

Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "Our first quarter results continue to demonstrate our ability to react to the changing needs of the market, delivering a 19.5% increase over last year's results and securing a two-year compounded growth rate of nearly 170%.  This increase in sales, combined with strong expense containment, resulted in a record gross margin of 47.3% for the quarter while also generating $109.1 million in cash. We believe our ability to grow our top line without adding significant fixed costs, while also leveraging synergies from the spin-off, have been key contributors to our profitability and position us well for the adjusting market.   As we begin to replenish inventory in the channel and in our warehouse, we believe the flexibility of our operations and the strength of our balance sheet, combined with the hard work and ingenuity of our R&D and marketing teams will enable us to continue to invest in our business and capture market share, while returning capital to our stockholders.  Our Board of Directors has again authorized our $0.08 per share quarterly dividend, which will be paid to stockholders of record on September 14th with payment to be made on September 28th."

Conference Call and Webcast
The company will host a conference call and webcast on September 1, 2021, to discuss its first quarter fiscal 2022 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). Those interested in listening to the conference call via telephone may call directly at (844) 309-6568 and reference conference identification number 2176794.  No RSVP is necessary. The conference call audio webcast can also be accessed live 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) COVID-19 expenses, (vi) transition costs, (vii) amortization of acquired intangible assets, (viii) spin related stock compensation, 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 Global Select: 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®, M&P®, and Gemtech® brands.  The company also provides manufacturing services including forging, machining, and precision plastic injection molding services.  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, our belief that consumers have a strong preference for our products at the retail counter; our belief that we are well positioned for the ever-changing market conditions in our industry, to maintain our leadership position in the industry, and  continue delivering impressive profitability in any environment; our significant opportunity to continue capitalizing on the momentum we've built over the past year with the consumer; our excitement to continue innovating in a new category and its growth potential; our belief that our ability to grow our top line without adding significant fixed costs, while also leveraging synergies from the spin-off, positions us well for the adjusting market; and our belief that as we begin to replenish inventory in the channel and in our warehouse, the flexibility of our operations and the strength of our balance sheet, combined with the hard work and ingenuity of our R&D and marketing teams will enable us to continue to invest in our business and capture market share, while returning capital to our stockholders. 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 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 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, 2021.

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SOURCE Smith & Wesson Brands, Inc.