Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (September 2013)
26 slides from Smith & Wesson Brands's investor presentation, Sep 17, 2013
Slide 1: September 2013 Smith & Wesson Investor Presentation
September 2013 Smith & Wesson Investor Presentation
Slide 2: Safe Harbor
Confidential, not for redistribution 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
Slide 3: Business Highlights
3 Confidential, not for redistribution Business Highlights U.S. market leader in firearms with 161 years of rich history Iconic brand with 92% aided awareness* Smith & Wesson(r) Brand = revolver Innovative product portfolio serving broad user groups Revolvers, polymer pistols, metal pistols, conceal
Slide 4: Vision / Mission
Confidential, not for redistribution 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
Confidential, not for redistribution 5 Focus, Simplify, Execute Strategy for growth - underpinned by a focus on firearms Consumer and professional markets Family of brands: Smith & Wesson(r) M&P(r) Thompson/Center Arms(tm) Performance Center(tm) M&P(r) as a brand and product platform: Polymer pistol
Slide 6: Experienced Leadership Team
Confidential, not for redistribution 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 Products Jeffrey Buchanan, EVP & CFO 25
Slide 7: Experienced Management Team
Confidential, not for redistribution 7 Experienced Management Team Mario Pasantes _______________ Sr. VP, Marketing and International Sales Alcoa, Inc. Coca-Cola Pillsbury Mark Smith _______________ VP, Manufacturing and Supply Chain Management Alvarez & Marsal Ecolab Robert Cicero ________________
Slide 8: Q1 Fiscal 2014 Highlights
Confidential, not for redistribution 8 Q1 Fiscal 2014 Highlights (July 31, 2013 - From Continuing Operations) Quarterly sales of $171.0M, +25.8% Y/Y - operated at essentially full capacity for entire quarter Excluding Walther, sales grew 36.4% Gross profit margin 42.6% versus 37.7% one year ago Oper
Slide 9: New Capital Structure: Bond, Buyback, Line of Credit
Confidential, not for redistribution 9 June 2013 $100M Bond Issuance Company issued $100M of new 5.875% Senior Notes due 2017 June 2013 $100M Buyback Authorized Board of Directors authorized $100M stock buyback August 2013 $75M New Line of Credit Company completed a new revolving line of credit New
Slide 10: Financial Results and Guidance
Confidential, not for redistribution 10 Financial Results and Guidance (Fiscal Year Ended April 30 - From Continuing Operations) Actual and Estimated Fiscal Year April 30 Sales (in Millions) Q2FY14: Sales $135.0M - $140.0M GAAP Diluted EPS $0.20 - $0.22 Seasonally slowest quarter - due to planned 2-
Slide 11: Key Strategic Objective: New ERP System
Confidential, not for redistribution 11 Key Strategic Objective: New ERP System ERP: A key strategic objective in optimizing the business A remaining building block that had yet to be completed Company had been operating on a dated, legacy system A new ERP system will allow for scalability and visib
Slide 12: Industry Indicators
Confidential, not for redistribution 12 Industry Indicators NICS NICS 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 S
Slide 13: Adjusted NICS Background Checks
Confidential, not for redistribution 13 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 o
Slide 14: Industry: Growth in Handguns, Long Guns, Permit Checks
Confidential, not for redistribution 14 Industry: Growth in Handguns, Long Guns, Permit Checks (CHART)
Slide 15: Industry Shipments of Handguns and Long Guns
Industry Shipments of Handguns and Long Through Q1 CY2013 (in Millions) Total Handguns & Long Guns Total Handguns Total Long Guns* 15 (CHART) (CHART) (CHART) + 12% + 55% + 32% *Source: Federal Excise Tax collections on manufacturing sales value as translated sales by National Shooting Sports Foundat
Slide 16: U.S. Consumer Firearms Market
U.S. Consumer Firearms Market* U.S. Consumer Firearms Market* 16 *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. SWHC market
Slide 17: Consumer Market - U.S.
Confidential, not for redistribution 17 Consumer Market - U.S. Focus on consumer trends: Concealed Carry, Personal Protection, Recreation NSSF Survey, April 2013 Of those who have been sport shooting in 2012, 20% were new to shooting within past 5 years That included 11% who just began shooting in 2
Slide 18: Pistols Driving Growth in Handguns
Confidential, not for redistribution 18 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, exclu
Slide 19: Industry: Pistols vs. Revolvers
Confidential, not for redistribution 19 Industry: Pistols vs. Revolvers Pistols and revolvers have different attributes, but pistols are preferred by both professionals and consumers Pistol advantages versus revolvers: Ergonomics/comfort High tech/cutting edge Modern shape Trigger pull Capacity Safe
Slide 20: Major Focus: M&P Pistol Growth
Confidential, not for redistribution 20 Major Focus: M&P(r) Pistol Growth Current Situation: Pistols are more than 85% of handguns sold Compact/slim and full-size polymer pistols are increasing in popularity M&P(r) polymer pistols are highly sought after by professionals and consumers - especially M
Slide 21: Retail associate incentive rewards program
Key element in our go-to-market strategy Retail associate incentive rewards program Intuitive graphic interface, easy to use & register sales Points never expire, and are transportable Extensive catalog of products & experiences, including select S&W, M&P, and T/C firearms Two-way dialogue opportuni
Slide 22: M&P Advertising: Communicating Directly with the Consumer
M&P(r) Advertising: Communicating Directly with the Consumer 22 Welcome To The Closest Bond Yet Between Hand and Gun Numerous Features. Not One You'll Have To Think About
Slide 23: M&P - Proven Performance
Confidential, not for redistribution 23 M&P(r) - Proven Performance M&P(r) - Proven Performance Strong & Marketable Differences
Slide 24: The M&P Shield
Confidential, not for redistribution 24 The M&P(r) Shield(tm) Designed to meet the demand for personal protection and concealed carry, the M&P(r) Shield features: Powerful 9mm or .40 S&W calibers Lightweight, slim one-inch profile for comfortable carry Compact overall length of 6.1" M&P(r) proven er
Slide 25: Our Strategic Direction
Confidential, not for redistribution 25 Our Strategic Direction Grow sales and increase profitability Optimize manufacturing capacity Add flexible capacity, internally and externally Focus on M&P(r) pistols and conceal carry products Financial model Quarterly gross margins in the range of 37% - 41%
Slide 26: September 2013 Smith & Wesson
September 2013 Smith & Wesson Investor Presentation
Smith & Wesson Holding — Investor Presentation (September 2013) on 6ix