Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (February 2005)
42 slides from Smith & Wesson Brands's investor presentation, Feb 17, 2005
Slide 1: Smith & Wesson February 17, 2005
Smith & Wesson February 17, 2005
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: Key Highlights
Key Highlights New Management Team in Place Strong Legacy Brand...Energize More Comprehensive Approach...S.S.P.S. Synergistic Business and Product Opportunities Significant Topline Growth Opportunities Operational Cost Reduction Opportunities Significant Financial Upside
Slide 4: Presented by Michael Golden, President and CEO
Presented by: Michael Golden President and Chief Executive Officer AMEX: SWB Market Cap: $78,700,000 (as of 2/14/05) Shares Outstanding: 31,500,000 Smith & Wesson Holding Corporation
Slide 5: Background: Mike Golden
Background: Mike Golden | Smith&Wesson’ ~
Slide 6: Smith & Wesson Management Team
Smith & Wesson Management Team Name John Kelly CFO Tom Taylor VP, Marketing Ken Chandler VP, Operations Leland Nichols VP, Sales Barbara Hunnicutt VP, Licensing S&W Tenure 20 Years 7 Months 3 Months 1 Month New Background
Slide 7: Company Background
Company Background 153 Year Old American company Headquarters: Springfield, Massachusetts 736 Employees Two Manufacturing Facilities (Non-Union): Springfield, Massachusetts Revolvers, Pistols Houlton, Maine Handcuffs, Pistols
Slide 8: Company Background
Company Background Largest U.S. Manufacturer of Handguns Largest U.S. Exporter of Handguns Largest U.S. Manufacturer of Handcuffs # 1 in U.S. Revolver Market Share # 3 in U.S. Pistol Market Share A Legacy Brand With 87% Brand Awareness With the General Public (Not Just Firearm Enthusiasts) Source: F
Slide 9: Smith & Wesson Revenue Six Months Ending 10/31/04
Smith & Wesson Revenue Six Months Ending 10/31/04 Revolver Performance Ctr. Pistols Walther Handcuff Licencee Other 0.45 0.08 0.21 0.13 0.04 0.02 0.07 Revolver Performance Ctr Pistols Walther Handcuffs Licensee Other East 0.45 0.08 0.21 0.15 0.04 0.02 0.07 Revolvers 45% Pistols 21% Walther 13% Perfo
Slide 10: A Company in Transition
A Company in Transition Manufacturing Driven Market Driven GOAL
Slide 11: Smith & Wesson Brand
Smith & Wesson Brand Dependability Innovation S&W Brand Perception is Extremely High Across ALL Demographics American Made Stands for Protection Source: American Sports Data - Nov, 2004
Slide 12: Smith & Wesson Purchase Intent
Smith & Wesson Purchase Intent Revolvers..................# 1 Pistols.......................# 1 Shotguns...................# 3 Hunting Rifles............# 3 Tactical Rifles............# 1 Ammunition...............# 4 Security Systems........# 3 Source: American Sports Data - Nov, 2004
Slide 13: Consumers Say the Smith & Wesson Brand Stands For...
Consumers Say the Smith & Wesson Brand Stands For... Safety Security Protection Sport Source: American Sports Data - Nov, 2004
Slide 14: Consumers Say Smith & Wesson Has the Right of Entry
Source License Manufacture Consumers Say Smith & Wesson Has the Right of Entry... Less Lethal Long Guns Ammunition Security Systems Training/Ranges Etc., Etc., Etc. in S.S.P.S. Shotguns Hunting Rifles Tactical Rifles Options Do Nothing
Slide 15: Landscape: Current & Future
Landscape: Current & Future Smith & Wesson's Primary Business is Handguns in the U.S. Sporting Goods Channel Become a Global Company in the Business of... Safety...Security...Protection...Sport GOAL
Slide 16: Landscape: Current & Future
GOAL Landscape: Current & Future #1 Handgun in U.S. Sporting Goods Channel Limited Sales Force Limited Marketing Diminished Law Enforcement Presence and Sales No Military Sales Limited International Sales Non-Optimum Walther Business Growth Dominant in U.S. Sporting Goods Channel Aggressive Sale For
Slide 17: Reinventing a Legacy Brand
Reinventing a Legacy Brand Inconsistent Message to a Limited Audience "Loud" and Visible Brand With a Consistent Message to a Diverse Audience GOAL
Slide 18: "Loud" Initiatives
"Loud" Initiatives Innovative New Products Re-emphasize Historic/Classic Guns Expand Law Enforcement/Military Dynamic Advertising Print, TV, Radio, Entertainment NASCAR Club 1852 Consumer Affinity Program TV Show: Smith & Wesson USA Editorial Blitz Expanded/Upgraded Internet Marketing Brand Identity
Slide 19: New Products/Continuous Upgrades
New Products/Continuous Upgrades 14 New Guns for SHOT Show Featuring the S&W 460XVR Focus on Performance Center More New Guns for NRA Show Continued 1911 Family Expansion Law Enforcement A Line Second to None With an Assortment to Fill All Needs S&W 460XVR 1911 w/ Crimson Trace Grips
Slide 20: Years of Innovation
153 Years of Innovation Model 1-22 Rimfire Model 3-Breaktop 38 Special 1857 1870 1899 1955 1990 2001 2005 2003 44 Special 1908 Thunder Ranch Model 21 Reintroduce Classic/Historic Commemorative Guns Continue to Innovate 357 Magnum 1935 44 Magnum S&W 40 Caliber AirLite-Scandium 500 Magnum 460 XVR
Slide 21: Expanding the Existing Demographic
Expanding the Existing Demographic Existing Target 45+ Year Old Males Existing Interest in Firearms/Outdoors Aspirational Target Using Alternative Mediums 21 - 44 Year Old Males Women Consumers with Interest in Firearms/Outdoors GOAL
Slide 22: Advertising Mediums
Advertising Mediums Print Advertising Entertainment Television Radio
Slide 23: Print Advertising: Hunting
Print Advertising Hunting
Slide 24: Print Advertising: Women's Focus, Sport Shooting
Print Advertising Women's Focus Sport Shooting
Slide 25: Print Advertising: Football, NASCAR
Print Advertising Football NASCAR
Slide 26: Print Advertising: Innovation, Law Enforcement
Print Advertising Innovation Law Enforcement
Slide 27: Walther Print Advertising
Walther Print Advertising
Slide 28: Multi-Media Exposure
Multi-Media Exposure Smith & Wesson USA to Premier in July on The Men's Channel Focus on Entertainment Marketing Three New TV Commercials Radio Ads Guest Speaker Program
Slide 29: NASCAR + Smith & Wesson... A Perfect Fit
NASCAR + Smith & Wesson... A Perfect Fit Smith & Wesson Will Enter NASCAR Busch Series in 2005 8 Races Including Las Vegas, Atlanta, Charlotte, Daytona, Bristol, California, Texas, Phoenix
Slide 30: Editorial Blitz Strategy is Dominating Magazine Covers
Editorial Blitz Strategy is Dominating Magazine Covers Sigma... 9 Upcoming Editorials and Features 460XVR... 3 Cover Features and Many More Coming 1911... 13 Existing or Upcoming Editorials and Features
Slide 31: Editorial Blitz Strategy is Dominating Magazine Covers
Editorial Blitz Strategy is Dominating Magazine Covers SEPT OCT NOV DEC SMITH & WESSON 223 112 200 109 RUGER 99 95 73 150 GLOCK 48 56 38 49 TAURUS 53 18 40 39
Slide 32: Internet Marketing
Internet Marketing Smith & Wesson Website Information Based Sales Guide Expanded Windows Club 1852 NASCAR Smith & Wesson TV Magazine Editorials Non-Firearm Merchandise Sales Linkage With Other Sites Dealers / Distributors Email Blast Marketing Monitoring Chat Rooms
Slide 33: Licensing
Licensing Licensing Veteran Bobbie Hunnicutt Aggressively Pursue Initiatives that "Surround the Shooter" and Fall Within...Safety, Security, Protection and Sport Loose Strategy Chasing Revenue Safety...Security...Protection...Sport GOAL
Slide 34: Legal Update
2001 2002 2003 2004 2005 Industry Municipal Cases Pending or on Appeal 32 26 20 13 9 S&W Product Liability Cases Pending 10 8 5 4 2 Legal Update No Municipal or Product Liability Cases Filed Since 2002 32 26 20 13 9 10 5 4 2 8 Legislation The Protection of Lawful Commerce in Arms Act is expected to
Slide 35: Operations Opportunities
Operations Opportunities Cost Savings Yield Enhancement Lead Time Reduction Short Term Focus Upgrade Key Equipment Define Sourcing Strategy Launch of New Products Connect and Pull to Customer Culture Change Implement S&W Operating System Drive Lean Manufacturing Processes Develop Highly Responsive I
Slide 36: Track Record
Track Record FY 2005 Q2 Update FY 2005 Guidance (Note: Smith & Wesson Fiscal Year: May - April) Financial Progress - First Half 2005
Slide 37: Financial Overview
Millions Financial Overview Millions
Slide 38: Financial Overview
Financial Overview Millions Millions
Slide 39: EBITDA Reconciliation
EBITDA Reconciliation FY 2002 FY 2003 Fy 2004 NET INCOME (LOSS) ($10,778,215) $15,663,479 $1,389,480 INCOME TAX (BENEFIT) 70,598 (12,404,320) (63,750) INTEREST EXPENSE 8,020,559 3,587,519 3,340,375 DEPRECIATION & AMORTIZATION 435,572 987,674 1,705,514 EBITDA (62,251,486) $7 834,352 $6,351,619 ONE-TI
Slide 40: 2005 First Half Results
OCT. 31, 2004 OCT 31, 2003 Net Product Sales $56.8 $57.7 Net Income $3.7 $1.3 Earnings Per Share 12¢* 4¢* *In millions except per share data 2005 First Half Results Net Handgun Sales $51.8 $49.4
Slide 41: Guidance Fiscal Year 2005
FISCAL 2004 FISCAL 2005 $117.9 $119 - $124 $1.4 $5.4 - $6.4 4¢ 16¢ - 19¢ Guidance Fiscal Year 2005 *In millions except per share data Net Product Sales Net Income Earnings Per Share
Slide 42: Summary
Summary New Management Team in Place Strong Legacy Brand...Energize More Comprehensive Approach...S.S.P.S. Synergistic Business and Product Opportunities Significant Topline Growth Opportunities Operational Cost Reduction Opportunities Significant Financial Upside
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