Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (June 2006)
29 slides from Smith & Wesson Brands's investor presentation, Jun 16, 2006
Slide 1: Smith & Wesson
Smith & Wesson Mike Golden, President, CEO John Kelly, CFO June 2006
Slide 2: Forward-Looking Statements
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 statemen
Slide 3: Investment Highlights
Investment Highlights Coupling brand strength with innovation and achieving: Growth in our core handgun business Diversification into new growth markets A Seasoned Leadership Team with World Class Experience Delivering Solid Revenue & Earnings Growth Executing on the Strategy: Safety, Security, Prot
Slide 4: A Seasoned Leadership Team
A Seasoned Leadership Team... Mike Golden, President, CEO Leland Nichols, COO John Kelly, CFO Tom Taylor, VP Marketing Ken Chandler, VP Operations Barbara Hunnicutt, VP Licensing MSPhotoEd.3 MSPhotoEd.3 MSPhotoEd.3 MSPhotoEd.3 MSPhotoEd.3 MSPhotoEd.3
Slide 5: Company Profile
Company Profile 154 Year Old American Company Largest U.S. Manufacturer/Exporter of Handguns Largest U.S. Manufacturer of Handcuffs Market Share: #1 in Revolvers, #3 in Pistols New entrant in Tactical Rifle Market 736 Employees Union-Free, U.S. Manufacturing: Springfield, Massachusetts Houlton, Main
Slide 6: 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 7: Executing on the Strategy
Executing on the Strategy Yesterday: Selling Handguns in the U.S. Sporting Goods Channel Today: A Global Leader in Safety...Security...Protection...Sport
Slide 8: New Market Possibilities / Growth Strategy
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 9: 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 10: Innovative New Products
Innovative New Products Revolvers 500 460 XVR 460 XVR S&W 1911 Family Pistols Scandium Military & Police Pistol Series
Slide 11: Introducing the Smith & Wesson Military & Police Pistol
Introducing the Smith & Wesson Military & Police Pistol Engineered with input from over a dozen LE and military organizations Enhanced versatility, durability, safety Competitively priced, feature rich, designed for LE and military markets World class product introduction First units shipped Decembe
Slide 12: Channel Management Strategy
Channel Management Strategy Local Law Enforcement Sporting Goods International Federal Law Enforcement & Military
Slide 13: Handgun Growth Strategy: Sporting Goods Channel
Handgun Growth Strategy Growth in FY 2006: Sporting Goods Revenue: +19.4% (Q4 + 32%) Engraving/Performance Center & Commemoratives: +250% Direct Force of 30 U.S. Sales Employees New Product Support: SW460 M&P40 M&P9 M&P15 Tactical Rifle Series Consumer Promotions Focusing on "Pull" Shooting for Hawa
Slide 14: Sales Growth
Sales Growth *In millions FY 2006 Sales into Sporting Goods Channel 8% 8% 24% 32%
Slide 15: Handgun Growth Strategy: Military/Federal Government Channel
Handgun Growth Strategy Growth in FY 2006 : Military/Federal Law Enforcement: $11.0M versus $0 in FY 2005 Experienced Leadership: Ernest Langdon Highly-regarded in law enforcement & military arena Military Orders Received: Four Orders (75K units) from U.S. Government for Afghanistan Army Major lobby
Slide 16: Handgun Growth Strategy: Law Enforcement Channel
Handgun Growth Strategy Experienced Leadership: Bryan James, Dir. Law Enforcement Sales, formerly Glock Expanded Sales Organization: 8 Regional Sales Managers, including top Glock sales execs New Product Support: M&P40 aimed at domestic law enforcement Orders received from 23 law enforcement agencie
Slide 17: Handgun Growth Strategy: International Channel
Handgun Growth Strategy Growth in FY 2006 : +58% Established & expanding sales channel and revenue base Upgrading sales agents to enhance contacts in police/military Europe, Latin America, Asia, Middle East New Product Support: M&P9: Domestic & international markets (NATO approved) Lobbying focus: S
Slide 18: New Market Opportunities & Options
Outsource License Manufacture Long Guns Training/Ranges Ammunition Security Systems Criminal Investigation Homeland Defense Products/Services Less Lethal Tactical Rifles Hunting Rifles Shotguns Options: Decline Opportunity Acquire Safety...Security...Protection...Sport New Market Opportunities & Opt
Slide 19: Entering New Markets: Tactical Rifles
Entering New Markets: Tactical Rifles Consumers say S&W should be in tactical rifles Tactical rifles are the fastest growing segment in the long gun market Sporting Goods channel is underserved by premium tactical rifles M&P15 & M&P15T are expansions of Military & Police family of products 2004 U.S.
Slide 20: Smith & Wesson M&P15 Rifle Series
Smith & Wesson M&P15 Rifle Series Concept to first shipment: 6 months Test & evaluation unit requests from 80 law enforcement agencies 10 LE orders received: Including Las Vegas Metro P.D. Target: 10%-15% market share in year one "If you're a fan of the M4A1 Carbine, I can assure you that the new M&
Slide 21: Driving Brand Value: Licensing
Driving Brand Value: Licensing Upgrading Licensee Portfolio: Sentry Safe Radiator Specialty (gun cleaning products) Hats and Tees Automotive Aftermarket Accessories New Possibilities: Monitored Security Systems, Ammunition Focus: Use licensing to enter new markets, serve brand loyalty opportunities,
Slide 22: The Brand: Re-Inventing a Legacy
The Brand: Re-Inventing a Legacy Yesterday: An Inconsistent Message to a Limited Audience Today: A "Loud" and Visible Brand With a Consistent Message to a Diverse Audience
Slide 23: The Brand: Marketing Initiatives
NASCAR Customer Affinity Programs: The Brand: Marketing Initiatives
Slide 24: Enhancing Productivity
Enhancing Productivity Achievements through FY 2006: Held inventory flat while growing sales +27% On time delivery improved from 60% to 85% Machine uptime improved from 60% to 80% Implementing Smith & Wesson Operating System Based on Toyota Production System Problem-Solving Process Development Stand
Slide 25: Legislative Environment
Legislative Environment 32 26 13 4 10 5 4 2 8 Protection of Lawful Commerce in Arms Act Signed into law October, 2005 Pursuing Opportunities in Washington to: Raise Export Approval Threshold Secure U.S. Military Pistol Opportunity Supply Iraq / Afghanistan Weapons & Restraints Win Federal Agency Ord
Slide 26: Income Statement Summary
Income Statement Summary *In millions except for per share data Sales +27% Net Income +67%
Slide 27: Balance Sheet Summary
Balance Sheet Summary *In Millions
Slide 28: FY2007 Guidance
FY2007 Guidance FY2006 Actual FY2005 Actual New Product Sales $180-$186MM +14-18% +157.9MM $124.0MM Income $12.5-13.5MM $8.7M $5.2MM Earnings per Fully Diluted Share: $0.30-$0.32 $0.22 $.14 Annual Guidance
Slide 29: Investment Highlights
Investment Highlights Coupling brand strength with innovation and achieving: Growth in our core handgun business Diversification into new growth markets A Seasoned Leadership Team with World Class Experience Delivering Solid Revenue & Earnings Growth Executing on the Strategy: Safety, Security, Prot
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