Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (August 2005)
29 slides from Smith & Wesson Brands's investor presentation, Aug 16, 2005
Slide 1: Smith & Wesson
Smith & Wesson Mike Golden, President, CEO John Kelly, CFO August 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: Investment Highlights
Investment Highlights New Leadership Team A New Market Approach...Safety, Security, Protection, Sport A Strong, Untapped Legacy Brand Innovative New Products Growth Opportunities in Core Business & New Markets Significant Productivity Enhancement Opportunities Positive Litigation Trends AMEX: SWB Sh
Slide 4: A New Leadership Team
A New Leadership Team... Mike Golden, President, CEO John Kelly, CFO Tom Taylor, VP Marketing Ken Chandler, VP Operations Leland Nichols, VP Sales Barbara Hunnicutt, VP Licensing Ann Makkiya, Corporate Counsel ....with World-Class Experience: ....with World-Class Experience: 4
Slide 5: 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 6: 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 7: 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 8: A New Market Approach
A New Market Approach Smith & Wesson Today: We Sell Handguns in the U.S. Sporting Goods Channel Smith & Wesson Tomorrow: A Global Leader in Safety...Security...Protection...Sport GOAL 8
Slide 9: New Market Possibilities
New Market Possibilities Existing Handgun Business Brand Development Innovative New Products Sporting Goods Law Enforcement Military/Federal Government International Less Lethal Long Guns Ammunition Security Systems Training/Ranges Criminal Investigation Homeland Defense Products/Services Re-invent
Slide 10: U.S. Domestic Non-Military Market - Revolvers and Pistols
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 U.S. DOMESTIC NON-MILITARY MARKET - 2005 S&W SALES $52MM 38% SOURCE: BATF 2004 Excise Tax Study & Smith & Wesson Management Estimates 10% Revolver / Pis
Slide 11: Innovative New Products
Innovative New Products Revolvers 500 460 XVR 460 XVR S&W 1911 Family New Law Enforcement and Military Pistol: Late Fall 2005 Pistols Scandium 11
Slide 12: Military & Police Pistol Series
Military & Police Pistol Series 12
Slide 13: Handgun Growth Strategy: Sporting Goods
Handgun Growth Strategy New Sales Leadership Eoin B. Stafford, Director of Sporting Goods Sales Formerly General Manager with H&K, USA Reorganized Sales Force Increase focus on high margin segments Engraving Performance Center Custom Guns New Products: S&W 460, S&W 500, 1911's, etc. New Marketing Pr
Slide 14: Handgun Growth Strategy: Military/Federal Government
Handgun Growth Strategy New Leadership Ernest Langdon, Director of Federal Law Enforcement & Military Sales Formerly Operations Manager, Law Enforcement Sales with Beretta Tactical training provider to law enforcement and military Multiple national and world titles in competitive shooting sport Lobb
Slide 15: Handgun Growth Strategy: Law Enforcement
Handgun Growth Strategy New Leadership In Place Two top sales executives from Glock Expanding Sales Force New M&P pistol ready for launch Designed to support police/military needs Previewed by a dozen law enforcement agencies Very positive response Launch Date: Fall 2005 New Channel Strategy: Law En
Slide 16: Handgun Growth Strategy: International
Handgun Growth Strategy New Leadership: Amaro Goncalves, Director of International Sales Formerly Director International Sales, Colt Firearms New Products Geared toward law enforcement & military Lobbying underway Shorten/lessen federal export approval requirements Established sales channel and reve
Slide 17: New Market Opportunities & Options
Outsource License Manufacture Less Lethal Long Guns Ammunition Security Systems Training/Ranges Criminal Investigation Homeland Defense Products/Services Other... Shotguns Hunting Rifles Tactical Rifles Options: Decline Opportunity Acquire Safety...Security...Protection...Sport New Market Opportunit
Slide 18: U.S. Domestic Non-Military Market - Rifles & Shotguns
2004 U.S. DOMESTIC NON-MILITARY MARKET - RIFLES & SHOTGUNS SOURCE: BATF 2004 Excise Tax Study and Smith & Wesson Management Estimates RIFLES SHOTGUNS 670 361 $642MM $346MM RIFLES SHOTGUNS 65% 35% Recently announced appointment of Steven Skrubis as Long Gun Product Manager to evaluate potential entry
Slide 19: The Brand: Licensing Opportunities
The Brand: Licensing Opportunities New leadership in licensing: Bobbie Hunnicutt, VP Licensing 2005 Licensing Revenue: $1.8M Hearing and Eye Protection, Body Armor, Knives, Safes, Soft Air Guns, etc. Target: Grow Licensing Revenue 3-5X by 2008 New Possibilities: Monitored Security Systems, Ammunitio
Slide 20: The Brand: Re-Inventing a Legacy
The Brand: Re-Inventing a Legacy Inconsistent Message to a Limited Audience "Loud" and Visible Brand With a Consistent Message to a Diverse Audience GOAL 20
Slide 21: Editorial Blitz: Dominating Trade Press
Editorial Blitz: Dominating Trade Press Smith & Wesson has achieved 25 trade magazine covers in the past 8 months; an unprecedented accomplishment Smith & Wesson has consistently had more editorial coverage than its major competitors 21
Slide 22: Marketing Initiatives
Continued New Product Innovation Editorial Blitz: Dominating the Trade Press Contemporary and Consistent Advertising: Print/Television TV Show: Smith & Wesson USA Entertainment Marketing Internet Marketing NASCAR Customer Affinity Programs: Club 1852 Marketing Initiatives 22
Slide 23: Operations / Manufacturing
Operations / Manufacturing New Leadership: Ken Chandler, VP Operations New Equipment Process Improvement Supply Chain Management Capacity Expansion Lean Manufacturing Strengthening Management Team 23
Slide 24: Driving Gross Margin Improvement
Driving Gross Margin Improvement Production Rates up Significantly Revolvers - 755 per day vs. 526 per day in December 2004 Pistols - 550 per day vs. 244 per day in December 2004 Objectives for 2006 include Sales Growth Margin Expansion On Time Delivery 24 Dec- May Revolvers Guns Per Day 44% Pistols
Slide 25: Litigation Trends
2001 2002 2003 2004 2005 Industry Municipal Cases Pending or on Appeal 32 26 20 13 4 Product Liability Cases Pending Against S&W 10 8 5 4 2 Litigation Trends 32 26 20 13 4 10 5 4 2 8 Legislation The Protection of Lawful Commerce in Arms Act passed by the Senate on July 29, 2005 and currently under r
Slide 26: Balance Sheet Summary
Balance Sheet Summary *In Millions
Slide 27: Income Statement Summary
Income Statement Summary *In millions except for per share date
Slide 28: 2006 Guidance
2006 Guidance 2005 Actual Net Product Sales: +10 - 12 % $124.0m Income: $6.3 - $6.9M* $5.2 M* Earnings Per Fully Diluted Share: $0.17- $0.18* $.14* *Guidance takes into account expected adjustments to reflect the early adoption of Statement of Financial Accounting Standard No. 123R, Share-Based Paym
Slide 29: Summary: Investment Highlights
Summary: Investment Highlights A Turnaround: New Management Team A New Market Approach...Safety, Security, Protection, Sport A Strong, Untapped Legacy Brand Growth Opportunities in Core Business & New Markets A Robust Pipeline of New Products Positive Litigation Trends Productivity Enhancement Oppor
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