e8vk
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 26, 2006
Date
of Report (Date of earliest event reported)
Smith & Wesson Holding Corporation
(Exact Name of Registrant as Specified in Charter)
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| NEVADA
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001-31552
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87-0543688 |
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(State or Other
Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
2100 ROOSEVELT AVENUE
SPRINGFIELD, MASSACHUSETTS
01104
(Address of Principal Executive Offices) (Zip Code)
(800) 331-0852
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
The registrant is furnishing this Report on Form 8-K in connection with the disclosure of
information, in the form of the textual information from a slide show presentation to be given at
meetings with institutional investors throughout the remainder of the fiscal quarter.
The information in this Report on Form 8-K (including the exhibit) is furnished pursuant to
Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section. This Report on Form
8-K will not be deemed an admission as to the materiality of any information in the Report that is
required to be disclosed solely by Regulation FD.
The registrant does not have, and expressly disclaims, any obligation to release publicly any
updates or any changes in the registrant’s expectations or any change in events, conditions, or
circumstances on which any forward-looking statement is based.
The text included with this Report is available on the registrant’s website located at
www.smith-wesson.com, although the registrant reserves the right to discontinue that availability
at any time.
Item 9.01. Financial Statements and Exhibits.
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(a) |
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Financial Statements of Business Acquired. |
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Not applicable. |
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(b) |
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Pro Forma Financial Information. |
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Not applicable. |
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(c) |
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Shell Company Transactions. |
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Not applicable. |
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(d) |
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Exhibits. |
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Exhibit
Number Exhibits |
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99.1 |
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Smith & Wesson presentation dated January 2006. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SMITH & WESSON HOLDING CORPORATION |
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Date: January 26, 2006
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By:
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/s/ Michael F. Golden |
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Michael F. Golden
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President and Chief Executive Officer |
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EXHIBIT INDEX
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99.1 |
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Smith & Wesson presentation dated January 2006. |
4
exv99w1
Exhibit 99.1
| Mike Golden, President, CEO |
| Smith & Wesson Holding Corporation |
| Certain statements contained in this presentation 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 strategies, the demand for the Company’s products,
the opportunity for growth of the Company, anticipated sales and operating results, customer
satisfaction and cost-reduction efforts. 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 Company’s growth opportunities, the ability of the Company to obtain operational
enhancements, and other risks detailed from time to time in the Company’s reports filed with the
SEC. |
| • Leadership Team in Place |
| · A New Market Approach...Safety, Security, Protection, Sport |
| · A Strong, Untapped Legacy Brand |
| · Innovative New Products |
| · Growth Opportunities in Core Business |
| · Diversification into New Markets |
| · Significant Productivity Enhancement Opportunities |
| · Positive Legislative and Litigation Trends |
| Shares Outstanding: 39,206,647 Price: $4.39 (at 1/24/06) Market Cap:
$172M |
| Experienced Leadership Team... |
Mike Golden, President, CEO John Kelly, CFO
Tom Taylor, VP Marketing Ken Chandler, VP Operations Leland Nichols, VP Sales Barbara
Hunnicutt, VP Licensing Ann Makkiya, Corporate Counsel Bill Lachenmeyer, VP Human
Resources |
| • 154 Year Old American Company |
| · Headquarters: Springfield, Massachusetts |
| · Two Manufacturing Facilities (Union-Free): |
| - Springfield, Massachusetts |
| • Largest U.S. Manufacturer of Handguns |
| · Largest U.S. Exporter of Handguns |
| · Largest U.S. Manufacturer of Handcuffs |
| · # 1 in U.S. Revolver Market Share |
| · # 3 in U.S. Pistol Market Share |
| · A Legacy Brand With 87% Brand Awareness With the General Public (Not Just
Firearm Enthusiasts) |
| Source: Federal Excise Tax Data — Q3,
2004 American Sports Data — Nov, 2004 |
| Extremely high in our served markets, and in markets we do not serve today: |
| A company-sponsored, 2004 survey asked consumers about their purchase intent for the
following products & services. S&W ranked as follows: |
| Revolvers #1 (served) Pistols #1 (served) Shotguns #3 (not served) Hunting Rifles #3
(not served) Tactical Rifles #1 (not served) Ammunition #4 (not served) Security
Systems #3 (not served) |
| Source: American Sports Data — Nov, 2004 |
| Smith & Wesson Yesterday: Selling Handguns in the U.S. Sporting Goods Channel |
| Smith & Wesson Today: A Global Leader in |
| Safety...Security...Protection...Sport |
| Use “Safety-Security-Protection-Sport” platform to enter new markets while driving CAGR of
13-15% in core business in fiscal 2006. |
| Existing
Brand Handgun New Market Development BusinessPossibilities |
| • Re-invent the legacy • Innovative New • Long Guns
• Key to new market entry Products • Training/Ranges
• Licensing opportunities • Sporting Goods • Less Lethal
• Marketing initiatives • Law Enforcement • Ammunition
• Military/Federal • Firearms Accessories Government • Security Systems
• International • Criminal Investigation |
| Revolver / Pistol Market: $605MM |
| 2004 ( CALENDAR) U.S. DOMESTIC NON-MILITARY MARKET –2005 (FISCAL)
S&W SALES |
| REVOLVERS PISTOLS
$138MM $467MM
$52MM
38% $47MM
10% |
| S&W 2005 ( Includes Walther Products) Market 2004 |
| SOURCE: BATF 2004 Excise Tax Study & Smith & Wesson Management Estimates |
| S&W 1911 Family Military & Police Pistol Series |
| Introducing the Smith & Wesson Military & Police Pistol |
| • First units shipped December 5, 2005 |
| ·
Engineered with input from over a dozen LE and
military organizations |
| · Unique
features incorporate versatility, enhanced
durability and safety. |
| · World
class product introduction, regarded as the most
professional the industry has seen. |
| · Premium
priced, feature rich product, designed to penetrate
LE and military markets. |
| Channel Management Strategy |
| Federal Law Local Law Enforcement Enforcement & Military |
| · Sales Leadership in Place |
| – Eoin B. Stafford, Director of Sporting Goods Sales – Formerly H&K |
| · Expanded Smith & Wesson Employee Sales Force (+16) |
– Elimination of manufacturer’s reps
– Demand creation: Product “pull” vs. “push” |
| · Increased focus on high margin segments |
| – Engraving, Commemorative Guns, Performance Center |
| · New Products Launched: M&P Pistol, S&W 460, S&W 500, 1911’s |
| · Consumer Marketing Programs Scheduled |
| – Event Marketing & Pull Promotions |
| Military/Federal Government Channel |
| – Ernest Langdon, Director of Federal Law Enforcement/Military Sales
– Formerly Operations Manager, Law Enforcement Sales with Beretta
– Tactical training provider to law enforcement and military
– Multiple national and world titles in competitive shooting sport |
| · Lobbying efforts underway |
– Hired major lobbying firm
– Regular CEO visits to Washington, DC |
| · Three new contracts: U.S. Army for Afghan Army (22,500 units) |
| – Launched M&P pistol – aimed at Federal Law Enforcement (FBI, etc.) |
| Bryan James, Dir. Law Enforcement Sales – formerly Glock |
| · Expanded Sales Organization |
– Two additional top sales executives hired from Glock
– Increased from 5 to 8 Regional Sales Managers |
| – Designed specifically to penetrate police/military markets
– Designed with input from multiple police departments
– Dec. 2005: Test & Evaluation units to >100 departments |
| · Strong initial feedback |
| – Amaro Goncalves, Dir. International Sales – formerly Colt |
| – Designed specifically to penetrate police/military markets |
– Shorten Federal export approval timeline
– Raise $1,000,000 Congressional approval level |
| · Established & expanding sales channel and revenue base |
| – Upgrading sales agents to those with contacts in police/military |
| · Europe, Latin America, Asia, Middle East |
| New Market Opportunities & Options |
| Safety...Security...Protection...Sport |
| • Long Guns Hunting Rifles • Criminal Investigation |
| • Training Ranges • Homeland Defense Products/Services |
| Opportunity Outsource Manufacture Acquire License |
| Smith & Wesson Enters the Long Gun Market |
| • Consumers say S&W should be in long guns...particularly tactical rifles |
| · Tactical rifles are the fastest growing segment in the long gun market |
| · Sporting Goods channel is underserved by premium tactical rifles |
| · Expansion of Military & Police family of products |
| 2004 U.S. DOMESTIC NON-MILITARY MARKET |
| Bolt Action Rifles Shotguns $510MM $346MM
52% Share 35% Share |
| SOURCE: BATF 2004 Excise Tax 13% Share Study and Smith & Wesson Management Estimates |
| Smith & Wesson M&P15 Rifle Series |
| “Smith & Wesson’s new
AR-type rifle is a credit to the
firm’s long history of duty
guns.” |
| -
Dick Metcalf, Guns & Ammo
Magazine, March/SHOT Show
Edition |
| “If you’re a fan of the M4A1
Carbine, I can assure you that
the new M&P |
| Carbine is as good as it gets.” |
| -
Gary Paul Johnson, SWAT
Magazine, SHOT Show
Edition |
| The Military & Police Family Begins... |
| The Brand: Licensing Opportunities |
| • FY 2005 Licensing Revenue: $1.8M |
| – Hearing & Eye Protection, Knives, Safes, Soft Air Guns, etc. |
| · Target: Grow Licensing Revenue 3-5X by 2009 |
| – Recent Licensees: Sentry Safe, Radiator Specialty (gun
cleaning products) Hats and Tees |
| – New Possibilities: Monitored Security Systems, Ammunition,
Truck and Hunting Accessories |
| · Focus: Use licensing to enter new markets, serve brand loyalty opportunities, and
aggressively pursue initiatives that fall within: |
| Safety...Security...Protection...Sport & Brand Loyalty |
| The Brand: Re-Inventing a Legacy |
| Inconsistent Message to a Limited Audience |
| “Loud” and Visible Brand With a Consistent Message to a Diverse Audience |
| Front Page – Marketplace Section July 28,
2005 |
| • 36 magazine covers in 11 months • Visibility in core magazines, TV and |
– Unprecedented in industry radio as well as non-industry publications.
– Outpacing all major competitors |
| – M&P — 22 Editorial features issued impressions. or committed |
NASCAR
Customer Affinity Programs: |
| Operations / Manufacturing |
| · Strong Team Supporting:
– Pistol Process Line
– New Product Development |
| · Initial Focus: Stabilize Operations
– Repeatable & predictable machinery
– Consistent Output |
| – Implementing Smith & Wesson Operating System |
| · Based on Toyota Production System |
| · Problem-Solving Process Development |
| – Standardize approach & deliver solutions
faster |
| · New machining / Equipment re-furbishing |
| Driving Gross Margin Improvement |
| • Production Rates up Significantly |
| Jan-Dec Revolvers Guns Per Day 44% Pistols Guns Per Day
300% |
| Legislative & Litigation Trends |
| Cases 26
20
10
13
10 8 5 4
0 4 2
2001 2002 2003 2004 2005 |
| Industry Municipal Cases Pending or on Appeal Product
Liability Cases Pending Against S&W |
| Protection of Lawful Commerce in Arms Act Signed into law October,
2005 |
| Year Ended April 30, 2005
2004 2005 |
| Revenue $117.9 $124.0 Gross Profit $39.1 $40.9 Operating Income $4.8 $11.2 Net Income $0.8 $5.2 EPS $0.02 $0.14 |
| *In millions except for per share data |
| Quarter Ended October 31, 2005 |
| Revenue $29.1 $35.5 Gross Profit $12.4 $10.5 Operating Income $4.3 $1.2 Net Income $2.1 $0.7 EPS $0.06 |
| Note: Quarter ended October 31, 2004 included $4.1 million in insurance refunds and reserve
adjustments, or $2.2 million after-tax, or $.06 per share |
| *In millions except for per share data |
| Six Months Ended October 31, 2005 |
| Revenue $53.8 $67.4 Gross Profit $21.8 $20.1 Operating Income $7.1 $6.1 Net Income $3.6 $3.4 EPS $0.10 |
| Note: Six months ended October 31, 2004 included $4.1 million in insurance refunds and
reserve adjustments, or $2.2 million after-tax, or $.06 per share |
| *In millions except for per share data |
Cash & Cash Equivalents $0.5 Accounts Receivable $19.5 Working Capital $21.4 Accounts
Payable $10.6 Notes Payable $21.3 Equity $32.1
Total Shares Outstanding 39.2 |
| FY 2006 Guidance FY 2005 Actual |
| Net Product Sales: +13 – 15 % $124.0m Income: $6.9 — $7.5M* $5.2 M* Earnings Per Fully
Diluted Share: $0.19- $0.20* $.14* |
| * Guidance takes into account expected adjustments to reflect the early adoption of
Statement of Financial Accounting Standard No. 123R, Share-Based Payment. That adoption is expected
to result in approximately $ 1.9 million in expense fiscal 2006 as compared to $626 thousand in
fiscal 2005. See full discussion in company’s 10k filing. |
| • Leadership Team in Place |
| · A New Market Approach...Safety, Security, Protection, Sport |
| · A Strong, Untapped Legacy Brand |
| · Innovative New Products |
| · Growth Opportunities in Core Business |
| · Diversification into New Markets |
| · Significant Productivity Enhancement Opportunities |
| · Positive Legislative and Litigation Trends |
| Shares Outstanding: 39,206,647 Price: $4.39 (at 1/24/05) Market Cap:
$172M |
