Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (March 2006)
31 slides from Smith & Wesson Brands's investor presentation, Mar 16, 2006
Slide 1: Smith & Wesson
Smith & Wesson Mike Golden, President, CEO John Kelly, CFO March 2006
Slide 2: Investment Highlights
Investment Highlights 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 Legisl
Slide 3: Company Background
Company Background 154 Year Old American Company Headquarters: Springfield, Massachusetts 736 Employees Two Manufacturing Facilities (Union-Free): Springfield, Massachusetts Revolvers, Pistols Houlton, Maine Handcuffs, Pistols 5
Slide 4: Company Background
Company Background 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: F
Slide 5: S&W: 87% Brand Awareness
S&W: 87% Brand Awareness Extremely high in our served markets, and in markets we do not serve today: Source: American Sports Data - Nov, 2004 A company-sponsored, 2004 survey asked consumers about their purchase intent for the following products & services. S&W ranked as follows: Revolvers #1 (serve
Slide 6: A New Market Approach
A New Market Approach Smith & Wesson Yesterday: Selling Handguns in the U.S. Sporting Goods Channel Smith & Wesson Today: A Global Leader in Safety...Security...Protection...Sport GOAL 15
Slide 7: New Market Possibilities
New Market Possibilities Existing Handgun Business Brand Development Innovative New Products Sporting Goods Law Enforcement Military/Federal Government International Long Guns Training/Ranges Less Lethal Ammunition Firearms Accessories Security Systems Criminal Investigation Homeland Defense Product
Slide 8: U.S. Domestic Non-Military Revolver/Pistol Market
S&W MARKET REVOLVERS 54.3 149 S&W MARKET PISTOLS 46 483 $138MM REVOLVERS PISTOLS $47MM $467MM S&W 2005 (Includes Walther Products) Market 2004 2004 (CALENDAR) U.S. DOMESTIC NON-MILITARY MARKET -2005 (FISCAL) S&W SALES $52MM 38% SOURCE: BATF 2004 Excise Tax Study & Smith & Wesson Management Estimates
Slide 9: Innovative New Products
Innovative New Products Revolvers 500 460 XVR 460 XVR S&W 1911 Family Pistols Scandium 21 Military & Police Pistol Series
Slide 10: Introducing the Smith & Wesson Military & Police Pistol
Introducing the Smith & Wesson Military & Police Pistol 23 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 profes
Slide 11: Channel Management Strategy
Channel Management Strategy Local Law Enforcement Sporting Goods International Federal Law Enforcement & Military 25
Slide 12: Handgun Growth Strategy: Sporting Goods Channel
Handgun Growth Strategy 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, Comm
Slide 13: Handgun Growth Strategy: Military/Federal Government Channel
Handgun Growth Strategy Leadership in Place 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 L
Slide 14: Handgun Growth Strategy: National & International Law Enforcement Channel
Handgun Growth Strategy Leadership in Place 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 Launched M&P Pistol Designed specifically to penetrate police/military m
Slide 15: Handgun Growth Strategy: International Channel
Handgun Growth Strategy Leadership in Place: Amaro Goncalves, Dir. International Sales - formerly Colt Launched M&P Pistol Designed specifically to penetrate police/military markets Lobbying underway Shorten Federal export approval timeline Raise $1,000,000 Congressional approval level Established &
Slide 16: New Market Opportunities & Options
Outsource License Manufacture Long Guns Training/Ranges Ammunition Security Systems Criminal Investigation Homeland Defense Products/Services Less Lethal Shotguns Hunting Rifles Tactical Rifles Options: Decline Opportunity Acquire Safety...Security...Protection...Sport New Market Opportunities & Opt
Slide 17: Smith & Wesson Enters the Long Gun Market
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
Slide 18: The Military & Police Family Begins...
The Military & Police Family Begins... 41 Concept to first shipment - 6 months Test & evaluation unit requests from 80 Law Enforcement Agencies First order received 3 weeks from launch - Las Vegas Metro P.D. Targeting 10%-15% market share in year one
Slide 19: The Brand: Licensing Opportunities
The Brand: Licensing Opportunities FY 2005 Licensing Revenue: $1.8MM 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
Slide 20: The Brand: Re-Inventing a Legacy
The Brand: Re-Inventing a Legacy Inconsistent Message to a Limited Audience "Loud" and Visible Brand With a Consistent Message to a Diverse Audience GOAL 45
Slide 21: Media Blitz
Media Blitz 36 magazine covers in 11 months Unprecedented in industry Outpacing all major competitors M&P - 22 Editorial features issued or committed 47 Visibility in core magazines, TV and radio as well as non-industry publications. Over 102 million total impressions. Wall Street Journal Front Page
Slide 22: NASCAR Customer Affinity Programs: Marketing Initiatives
NASCAR Customer Affinity Programs: Marketing Initiatives 49
Slide 23: Operations / Manufacturing
Operations / Manufacturing Strong Team Supporting: Pistol Process Line New Product Development Initial Focus: Stabilize Operations Repeatable & predictable machinery Consistent Output Current Focus: Implementing Smith & Wesson Operating System Based on Toyota Production System Problem-Solving Proces
Slide 24: Legislative & Litigation Trends
2001 2002 2003 2004 2005 Industry Municipal Cases Pending or on Appeal 32 26 20 13 4 Product Liability Cases Pending Against S&W 10 8 5 4 2 Legislative & Litigation Trends 32 26 20 13 4 10 5 4 2 8 Cases 53 Protection of Lawful Commerce in Arms Act Signed into law October, 2005
Slide 25: Income Statement Summary
Income Statement Summary 28 *In millions except for per share data
Slide 26: Income Statement Summary: Quarter Ended January 31, 2006
Income Statement Summary *In millions except for per share data 29 Quarter Ended January 31, 2006
Slide 27: Income Statement Summary: Nine Months Ended January 31, 2006
Income Statement Summary 30 Nine Months Ended January 31, 2006 *In millions except for per share data
Slide 28: Balance Sheet Summary
Balance Sheet Summary *In Millions 31
Slide 29: Annual Guidance
FY2007 FY2006 Guidance FY2005 Actual New Product Sales $172-$180MM +19-20% $124.0MM Income $12.5 $7.5-$8.0MM $5.2MM* Earnings per Fully Diluted Share: $0.30 $0.19-$0.20* $.14* Annual Guidance *Guidance takes into account expected adjustments to reflect the early adoption of Statement of Financial Ac
Slide 30: Investment Highlights
Investment Highlights 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 Legisl
Slide 31: Smith & Wesson
Smith & Wesson
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