Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (March 2014)
30 slides from Smith & Wesson Brands's investor presentation, Mar 11, 2014
Slide 1: March 2014 Smith & Wesson Investor Presentation
March 2014 Smith & Wesson Investor Presentation
Slide 2: Safe Harbor
2 Safe Harbor 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 but are n
Slide 3: Business Highlights
3 Business Highlights U.S. market leader in firearms with 162 years of rich history Iconic brand with 92% aided awareness*Smith & Wesson(r) Brand = revolver Innovative product portfolio serving broad user groupsRevolvers, polymer pistols, metal pistols, concealed carry pistols and revolvers, bolt ac
Slide 4: Vision / Mission
4 Vision / Mission Our Vision: The leading firearms manufacturer Our Mission: To allow our employees to design, produce, and market high-quality, innovative firearms that meet the needs and desires of our consumer and professional customers
Slide 5: Focus, Simplify, Execute
5 Focus, Simplify, Execute Strategy for growth - underpinned by a focus on firearmsConsumer and professional marketsFamily of brands:Smith & Wesson(r)M&P(r)Thompson/Center Arms(tm)Performance Center(r)M&P as a brand and product platform: Polymer pistolsOperations: Ready to adapt to changing environm
Slide 6: Experienced Leadership Team
6 Experienced Leadership Team James Debney, President & CEO 20+ years: multinational consumer and business-to- business environments including President of Presto Products Co., a $500 million business unit of Alcoa Consumer ProductsJeffrey Buchanan, EVP & CFO 25+ years: private and public company ex
Slide 7: Experienced Management Team
7 Experienced Management Team MarioPasantes_______________Sr. VP, Marketing and International SalesAlcoa, Inc.Coca-ColaPillsbury Mark Smith_______________VP, Manufacturing and Supply Chain ManagementAlvarez & MarsalEcolab Robert Cicero________________VP, General Counsel, Chief Compliance Officer,and
Slide 8: Q3 Fiscal 2014 Highlights
8 Q3 Fiscal 2014 Highlights (January 31, 2014 - From Continuing Operations) Quarterly sales of $145.9M, +7.1% Y/Y Excluding Walther, sales grew 16.7%Handgun sales, including M&P pistols, grew by 29.9%Gross profit margin 40.2% versus 36.6% one year agoOperating income 21.3% versus 20.6% one year agoI
Slide 9: New Capital Structure
9 June 2013$100M Bond Issuance Company issued $100M of new 5.875% Senior Notes due 2017 Dec 2012-Jan 2014$135M Buyback CompletedAverage Purchase Price at $11.01 August 2013$75MNew Line of Credit Company completed a new revolving line of credit New Capital Structure Company used about 50% of the proc
Slide 10: Financial Results and Guidance
10 Financial Results and Guidance (Fiscal Year Ended April 30 - From Continuing Operations) Actual and Estimated Fiscal Year April 30 Sales (in Millions) Q4FY14:Sales $159.0M - $164.0M GAAP Diluted EPS $0.38 - $0.40Incorporates non-recurring, ERP related costsFully diluted weighted average share cou
Slide 11: Industry Indicators
11 Industry Indicators NICSNICS background checks are conducted at the point of sale, tracked by the FBI, and reported monthly. NSSF adjusts the total to eliminate permit-related checks and other "noise"Adjusted NICS serves as a proxy for consumer sales since Smith & Wesson sells only to federally l
Slide 12: Adjusted NICS Background Checks
12 Source National Shooting Sports Foundation (NSSF) Adjusted NICS. NSSF adjusts FBI NICS data to eliminate background checks associated with permit applications and checks on active CCW permit databases. NSSF adjusted NICS data provides a more accurate picture of market conditions. (CHART) January
Slide 13: Industry: Growth in Handguns, Long Guns, Permit Checks
Industry: Growth in Handguns, Long Guns, Permit Checks NICS Checks By Type '07 -'14 ° chin steclinstelt cinco cn ite lh tei iy ln lon tne ie, ag ey hay ay dy te ag Peg Permit —Handgun —tongGun Linear Permit) —tinear (Handgun) —Unear (Long Gun)
Slide 14: Industry Shipments of Handguns and Long Guns
Industry Shipments of Handguns and Long Guns Q1-Q3 CY2013 (in Millions) Total Handguns & Long Guns Total Handguns Total Long Guns* 14 (CHART) (CHART) (CHART) + 23% (YTD) + 43% (YTD) + 33% (YTD) *Source: Federal Excise Tax collections on manufacturing sales value as translated sales by National Shoot
Slide 15: 2011 U.S. Consumer Firearms Market
2011 U.S. Consumer Firearms Market* 2011 U.S. Consumer Firearms Market* 15 *According to 2011 reports by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"), the U.S. firearm manufacturing industry has grown at a compound annual growth rate in units of 12% from 2006 through 2011. SW
Slide 16: Consumer Market - U.S.
16 Consumer Market - U.S.NSSF Survey, 2011 (10,000 Respondents)90% of survey respondents who own a handgun own multiple firearms; the average number of firearms owned by those respondents was 8.1NSSF Survey, April 2013 (8,300 Respondents)Of those who have been sport shooting in 2012, 20% were new to
Slide 17: Pistols Driving Growth in Handguns
17 Pistols Driving Growth in Handguns Pistols now represent over 85% of units sold Pistols now represent over 85% of units sold Pistols now represent over 85% of units sold Source: BATF and U.S. Intl Trade Commission, includes U.S. manufacture plus imports, excludes exports
Slide 18: Industry: Pistols vs. Revolvers
18 Industry: Pistols vs. Revolvers Pistols and revolvers have different attributes, but pistols are preferred by both professionals and consumers Pistol advantages versus revolvers:Ergonomics/comfortHigh tech/cutting edgeModern shapeTrigger pullCapacitySafety featuresRevolver advantages versus pisto
Slide 19: Major Focus: M&P Pistol Growth
19 Major Focus: M&P Pistol Growth Current Situation:Pistols are more than 85% of handguns soldCompact/slim and full-size polymer pistols are increasing in popularityM&P polymer pistols are highly sought after by professionals and consumers - especially M&P ShieldOur Focus:Grow M&P pistol market shar
Slide 20: Retail associate incentive rewards program
Key element in our go-to-market strategyRetail associate incentive rewards programIntuitive graphic interface, easy to use & register salesPoints never expire, and are transportableExtensive catalog of products & experiences, including select S&W, M&P, and T/C(r) firearmsTwo-way dialogue opportunity
Slide 21: M&P Advertising: Communicating Directly with the Consumer
M&P Advertising: Communicating Directly with the Consumer 21 Welcome To The Closest Bond YetBetween Hand and Gun Numerous Features.Not One You'll Have To Think About
Slide 22: M&P - Proven Performance
22 M&P - Proven Performance M&P - Proven Performance Strong & Marketable Differences
Slide 23: The M&P Shield
23 The M&P Shield Designed to meet the demand for personal protection and concealed carry, the M&P Shield features:Powerful 9mm or .40 S&W calibersLightweight, slim one-inch profile for comfortable carryCompact overall length of 6.1"M&P proven ergonomic designThumb safetyIncludes two magazines, stan
Slide 24: SHOT Show 2014: New Performance Center and ProSeries Products
24 SHOT Show(r) 2014: New Performance Center(r) and ProSeries Products M929 - A 9mm competition revolver inspired by renowned, multi-record holder Jerry Miculek M686 - A classic, time-tested .357 Magnum enhanced with popular self-defense features M629 - A purpose built hunting package based on the r
Slide 25: SHOT Show 2014: New M&P Products
25 SHOT Show(r) 2014: New M&P Products M&P BODYGUARD(r) 380 - A sub-compact .380 ACP pistol enhanced with M&P style features M&P15-22 (Multi-color) - Popular M&P15-22 rifle now in four new camouflage finishes M&P10 - Multi-purpose M&P10 rifle now available with 20 round magazine capacity M&P15 300 W
Slide 26: SHOT Show 2014: New Smith & Wesson Models
26 SHOT Show(r) 2014: New Smith & Wesson Models Model 69 Combat Magnum - Smith & Wesson's first L-Frame revolver in historic .44 Magnum Model 66 Combat Magnum - Collectible Combat Magnum revolver returns to the product lineup Governor(r) - Multi-caliber revolver now offered in popular matte silver f
Slide 27: Firearms Growth Drivers: California Microstamping Regulations
Confidential, not for redistribution 27 SWHC: Firearms Growth Drivers Impact of California Microstamping Regulations In California, all new handguns must be approved and placed on a Roster, and all existing handguns must be recertified annuallyRecently, California began requiring all new pistols pla
Slide 28: Professional Market
28 Professional MarketLaw Enforcement / Federal Government International - large orders, e.g., Belgium, Australia, Canada, Puerto RicoUnited States Army Modular Handgun System (M-9 pistol) replacement:Attended 1st industry day Dec. 2013 - Second industry day originally planned Feb. 2014, has since b
Slide 29: Our Strategic Direction
29 Our Strategic Direction Grow sales and increase profitabilityOptimize manufacturing capacityAdd flexible capacity, internally and externallyFocus on M&P pistols and conceal carry products Financial modelQuarterly gross margins in the range of 37% - 41%Quarterly operating margins in the range of 2
Slide 30: March 2014 Smith & Wesson
March 2014 Smith & Wesson Investor Presentation
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