Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Merger or Acquisition (June 2009)
28 slides from Smith & Wesson Brands's merger presentation, Jun 19, 2009
Slide 1: Acquisition of USR
Title: Acquisition of USR Date: June 18, 2009
Slide 2: Forward Looking Statement
Forward Looking Statement 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 includ
Slide 3: Agenda
Agenda Recap Smith & Wesson strategy/performance Overview of acquisition — USR Transaction overview Diversification impact Summary 3
Slide 4: Our Growth Strategy
Our Growth Strategy 1 Strengthen position in core firearms market 2 Diversify into new businesses which: — align with the core focus areas of safety, security, and protection — serve as a platform for future expansion — have strong management teams in place to drive platform growth — provide limited
Slide 5: Our Performance Remains Strong
Our Performance Remains Strong Fiscal Year April 30 Revenues Fourth Quarter 2009 Preview Highlights $335 $296 $237 * $160 $126 2005 2006 2007 2008 2009 · Revenues: $99.5M (+20% Q/Q) · Gross Margins: 31.0% · Backlog: Exceeds $200.0M · Cash: $39.8M (excludes cash from May offering) * Thompson/Center A
Slide 6: Agenda
Agenda Recap Smith & Wesson strategy/performance Overview of acquisition — USR Transaction overview Diversification impact Summary 6
Slide 7: Profile of Universal Safety Response, Inc. (USR)
Profile of Universal Safety Response, Inc. (“USR”) · Privately held, rapidly growing, profitable · Provider of full service facility security systems solutions Guard House and Canopy Electronic Systems Integration XMB Vehicle Barrier GRAB-SP Vehicle Barrier 7
Slide 8: USR: The Clear Leader in Total Perimeter Security Solutions
USR: The Clear Leader in Total Perimeter Security Solutions A high growth company, with a powerful brand in a fast growing market — At a unique inflection point in company history Business model: Innovative design, manufacture, installation and maintenance — Patented, world class perimeter security
Slide 9: Universal Safety Response, Inc.
Universal Safety Response, Inc. · Matthew Gelfand, Founder & President 9
Slide 10: The Macro-Market: Rapidly Growing After September
The Macro-Market: Rapidly Growing After September 11 · Strategic solutions · Initially “quick fixes” Turning point: September 11 10
Slide 11: The USR Response (Timeline 2001 to present)
The USR Response (Timeline 2001 to present) Pre-9/11 · Facilities had general access and open campuses · USR GRAB ® product under development 2002-2006 · Government secures with concrete barriers/vehicles · Focus moves toward longer term, integrated solutions · USR assists in developing access contr
Slide 12: No Single Competitor Provides USR's Level of Full Service Security Integration
No Single Competitor Provides USR’s Level of Full Service Security Integration 1. Engineering Design · specialized knowledge 2. Full Suite of Security Products · internally developed (IP) + best-of-breed 3. Installation & Maintenance · specialized integration Unmatched capabilities 13
Slide 13: A Solid Mix of Services and Products
A Solid Mix of Services and Products 2009 Revenue Forecast Services Products 44% 56% 14
Slide 14: Diversified, Industry-Leading Product Offerings
Diversified, Industry-Leading Product Offerings Percent of Product Revenues Other 10% ODDS & Electronic Monitoring 9% Other Barriers 10% Parts & Accessories 13% GRAB ® Barriers 30% Canopies & Prefab Buildings 28% 15
Slide 15: Flagship Product GRAB System: Unique Features
Flagship Product GRAB ® System: Unique Features Shortest, less likely to be lethal stopping distance of any barrier on the market Can be activated in less than 2.0 seconds Able to span multiple traffic lanes Re-useable after impact Environmentally friendly: no hydraulics underground Lower maintenanc
Slide 16: GRAB Superior to Traditional Barriers
GRAB Superior to Traditional Barriers BEFORE: Vehicles rapidly approach barriers AFTER: GRAB advantages: · Stops vehicle without destroying it · Payload contained, not projected · Suspects apprehended for questioning · Evidence recovered · Barrier re-settable after impact Traditional Barrier GRAB ®
Slide 17: World Class Customers
World Class Customers A customer list that specifies USR as the preferred provider of perimeter security solutions 18
Slide 18: USR — Solid Growth (by calendar year)
USR — Solid Growth (by calendar year) Revenues $90M $50M* $23M $7M 2007 2008 2009E 2010E EBITDA $15M $9M $2M — $1.6M 2007 2008 2009E 2010E * Approximately $100M in purchase orders in process at June, 2009 19
Slide 19: The Future: Positioned in Large, Growing Markets
The Future: Positioned in Large, Growing Markets Near-term market opportunity $1.5B Note: Market sizes reflect management estimates 20
Slide 20: Growth Drivers
Growth Drivers Further penetration of current customers Launch of patented new products Runway Long for Growth Increased scope of services offered International expansion Expansion into new markets Increasing demand for critical infrastructure protection at government, military and corporate facilit
Slide 21: Agenda
Agenda Recap Smith & Wesson strategy/performance Overview of acquisition — USR Transaction overview Diversification impact Summary 22
Slide 22: Transaction Highlights
Transaction Highlights Price: Purchase price: — Up to 9.7M shares plus up to $26.2M cash Consideration Portion on closing (July 20 est.), balance tied to performance on closing: — $52.5M in cash and stock paid at closing • 5.6 million shares • balance in cash Future 4,080,000 shares payable in 2009
Slide 23: Price Analysis
Price Analysis At Closing End of Calendar 2009 End of Calendar 2010 At $5.00 share price (millions) (millions) (millions) Anticipated EBITDAS $ 9.0 $15.0 Shares issued each period 5.6 1.2 2.9 Cumulative Shares issued 5.6 6.8 9.7 Share Value @ $5 $28.0 6.0 14.5 Cash $24.5 0 0 Total Consideration $52.
Slide 24: Agenda
Agenda Recap Smith & Wesson strategy/performance Overview of acquisition — USR Transaction overview Diversification impact Summary 25
Slide 25: A Key Move in Diversifying Our Revenue Streams
A Key Move in Diversifying Our Revenue Streams SWHC Today SWHC (combined) FY 2011 Professional 17% 83% Consumer Other 7% 93% Firearms Professional 37% 63% Consumer Other 30% 70% Firearms
Slide 26: Agenda
Agenda Recap Smith & Wesson strategy/performance Overview of acquisition — USR Transaction overview Diversification impact Summary 27
Slide 27: Summary: Why Acquiring USR Makes Sense
SUMMARY Why Acquiring USR Makes Sense · SWHC now has platform for entry into security business · Profitable, growing company in high growth market · GRAB ® provides differentiation, barrier to market entry · Unique business model: no competitors · USR at inflection point: opportunity for growth · Di
Slide 28: Acquisition of USR
Title: Acquisition of USR Date: June 18, 2009
Smith & Wesson Holding — Merger or Acquisition (June 2009) on 6ix