Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (July 2020)
20 slides from Smith & Wesson Brands's investor presentation, Jul 29, 2020
Slide 1: Smith & Wesson Brands, Inc.
SMITH & WESSON BRANDS, INC. (NASDAQ:SWBI)
Slide 2: Forward-looking statements
Certain statements contained in this presentation 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, proposed timing for
Slide 3: American Outdoor Brands Spin-Off Overview
On November 13, 2019, Smith & Wesson Brands, Inc. (“SWBI” or “Parent-Co”) (then called American Outdoor Brands Corporation), announced its plan to spin-off its outdoor products & accessories business to form an independent, publicly traded company: American Outdoor Brands, Inc. (“AOUT” or “Spin-Co”)
Slide 4: Experienced Leadership
MARK P. SMITH President and Chief Executive Officer Deana L. McPherson, CPA, CGMA Chief Financial Officer During his tenure, the company achieved significant growth, while optimizing its manufacturing footprint Increased gross margins to record levels Significant operational and supply chain managem
Slide 5: An Iconic Firearms Company
Estimated market size per SWBI Management’s estimates. Industry-leading handgun, long gun, & suppressor products marketed under iconic brand names: Smith & Wesson Brands, Inc. is an iconic firearm business with a 168-year history of delivering market leading, personal protection and sport-related fi
Slide 6: Investment Highlights
Highly Experienced Management Team of Industry Veterans Strategic Focus on Driving Stable Organic Growth While Expanding Margins Capital Allocation Strategy of Returning Stockholder Value ~$4 Billion Addressable Market for Handguns and Long Guns Iconic Brand Portfolio with Loyal Consumer Base Invest
Slide 7: Industry-Leading Brand and Favorable Long-Term Trends
45% of new shooters are women 52% of new shooters did not grow up with firearms 63% of new shooters between the ages of 18-34 >3% 10-Year CAGR (2009-2019) >60% YoY Growth through June 2020 ~14M 5-Year Average Annual NICS Checks Shooting Sports are Attracting A Broader Demographic of Consumers Shooti
Slide 8: Adjusted NICS Checks Continue to Increase
Source:National Shooting Sports Foundation and FBI. Note:2020 represents data through June 2020. Adjusted NICS checks continue to increase over the long-term — 10-year CAGR of >3% NICS checks strong — up YTD ~65% YoY YTD 2020 represents ~83% increase over the long-run historic 6-month average Outrea
Slide 9: Strategic Priorities for Growth
Grow Organically Leverage Iconic Brands Focus on New Product Introductions Simplify Business Return Value To Stockholders Reducing Debt Return value to stockholders Invest in profitability and growth Paying Dividends Capital Investments Support NPD Improve efficiency Reduce operating costs 4 2 3 5 C
Slide 10: Brand Expansion to Meet Unique Requirements Across Targeted Consumers
Brand Expansion to Meet Unique Requirements Across Targeted Consumers World class quality classic revolvers and metal frame pistols meet the needs of our discerning consumers for everything from competition target shooting to personal protection and professional use by law enforcement. Focused on re
Slide 11: Product Innovation Drives Organic Growth
2005 2006 2012 2017 2019 2020 2021 3.1M Cumulative Shield Units Sold 2.1M Cumulative Shield Units Sold Cumulative Shield Units Sold 3.7M Product Innovation Drives Organic Growth INCEPTION Debut of the M&P Pistol Series, adopted by 100+ departments in its first year M&P SHIELD Unveiled new M&P Shield
Slide 12: Innovation Case Study: M&P9 Shield EZ
M&P9 Shield EZ further expands the M&P Shield EZ pistol platform (released in 2018) Designed for personal protection and every day carry Features an easy-to-rack slide, easy-to-load magazine, and easy-to-clean design 3+ million M&P Shield pistols adopted by consumers ‘M&P Shield’ name has become syn
Slide 13: Financial Overview
Note:US$ in millions. Fiscal year ended April 30. Gross Profit & Gross Margin Strong revenue growth driven by 2016 presidential election FY2018 decline in revenue largely due to excess inventory in the channel from previous uptick FY2018 & FY2019 were also impacted by distributor bankruptcies Revenu
Slide 14: Strong Balance Sheet
Pro forma balance sheet As of April 30, 2020 Conservative balance sheet with significant amount of liquidity ~0.9x(1) pro forma net leverage Low-cost (L+150 – 250)(2), $250M asset-based revolving credit facility $100M of cash pro forma for transfer of $25M of cash to SpinCo Enhanced focus on organic
Slide 15: Long-Term Targets
Long-Term Targets Commentary Revenue ~5% CAGR Leverage brands to increase market share Drive organic growth with new product introductions Industry volatility yields significant year-to-year variability Gross Profit ~30% – 35% of Revenue Investment in manufacturing equipment results in desire to ope
Slide 16: Focus on Long-Term Performance
Increase Market Share to Drive Organic Revenue Growth Streamline Business Operations and Optimize Profitability Optimize Cash Flow Generation and Return Value To Stockholders 2 3 Leverage historic 168-year old “Smith & Wesson” brand to increase market share Outperform our peers Drive organic growth
Slide 17: Q&A
Smith &Wesson’ Q&A er a
Slide 18: Appendix
Smith &Wesson’ APPENDIX S ma 7 ave cH XP & ©,
Slide 19: Non-GAAP Financial Measure
Non-GAAP Financial Measure In this presentation, a non-GAAP financial measure “Adjusted EBITDAS,” is presented. From time-to-time, the company considers and uses these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performan
Slide 20: Smith & Wesson Brands, Inc.
SMITH & WESSON BRANDS, INC. (NASDAQ:SWBI)
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