Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (November 2009)
30 slides from Smith & Wesson Brands's investor presentation, Nov 9, 2009
Slide 1: Mike Golden President & CEO, Bill Spengler EVP, CFO November 2009
Mike Golden President & CEO Bill Spengler EVP, CFO November, 2009
Slide 2: One Leader: Two Powerful Growth Platforms
One Leader: Two Powerful Growth Platforms Leader in quality firearms Leader in perimeter security Growth and profitability Global leader in safety, security and protection NASDAQ Global Select: SWHC
Slide 3: Strong Financial Performance
2004 2005 2006 2007 2008 2009 Earnings per Share (Diluted) 120 126 160 237 296 335 Strong Financial Performance Fiscal Year April 30 Revenues First Quarter FY 2010: Record Quarterly Revenue Record Net Income Record Earnings Per Share Record Adjusted EBITDAS Revenues: $102M (+30%) Gross Margins: 34.8
Slide 4: Robust Revenue Outlook
FY 2009 (A) Other 22 Revolver 90 Pistol 136 Long Gun 87 Robust Revenue Outlook Revenues ($M) 3-5 years (Goal) Other 50 Revolver 105 Pistol 175 Long Guns 120 USR 200 Long Gun Pistol Revolver Other & Licensing USR: Perimeter Security $650M FY 2008 (A) Other 21 Revolver 82 Pistol 105 Long Gun 86 $335M
Slide 5: A Growing Profit Model
A Growing Profit Model As % of Sales SWHC FY 2009 Actual SWHC 3-5 Years Goal Net sales 100% 100% Gross margin 29.2% 35-36% Operating expenses* 21.6% 20% Operating income 7.6% 15-16% strengthened by USR * Excluding impairment charges
Slide 6: Rapidly Diversifying Revenue Streams
Rapidly Diversifying Revenue Streams Prod Serv 0.82 0.18 Consumer Professional SWHC Today Prod Serv 0.63 0.37 Consumer Professional SWHC FY 2011(1) Prod Serv 0.93 0.07 Firearms Other Prod Serv 0.7 0.3 Firearms Other 82% 18% 63% 37% 93% 7% 70% 30% (1) First full year of USR consolidation
Slide 7: A Transformation - 2005-2009
A Transformation - 2005-2009 From: A manufacturer of revolvers Revenues: $126M F I R E A R M S :
Slide 8: A Transformation - 2005-2009
A Transformation - 2005-2009 To: A global leader in firearms Rapid Total Company Growth Healthy Balance Sheet $ Diversified Portfolio Handgun Market Leader #1 F I R E A R M S :
Slide 9: Key Success Factor: Innovative New Products
Key Success Factor: Innovative New Products F I R E A R M S : Product Consumer Law Enforcement Government / Military International Revolver u Market M&P Pistol M&P Tactical Rifle Thompson / Center Arms M&P4 - Tactical Rifle u u u 2006 2006 2006 2006 2006 2006 2006 2006 2007 - - - - - - - - 2009 2009
Slide 10: Increased Addressable Market
Increased Addressable Market > Three Fold Addressable Market 1st Qtr 2nd Qtr East 0.17 0.83 2005 $0.6B S&W ~17% Handguns 1st Qtr 2nd Qtr East 0.13 0.87 2009 $2.1B S&W ~13% Handguns Plus entered long gun market of $1.3B Note: US excluding government F I R E A R M S :
Slide 11: Growth Strategy
Growth Strategy New innovative products to address: Consumer M&P 15-22, PK380, and others International & Law Enforcement M&P15 and M&P4 tactical rifles M&P pistol and other new pistol products Government M4 Rifle Replacement M9 Pistol Replacement D.C. presence (advisory committee) Hunting business
Slide 12: Growth Strategy
Years Surge Underlying trajectory Revenue Growth Growth Strategy F I R E A R M S :
Slide 13: The Brand = Security & Protection
The Brand = Security & Protection The Brand = Security & Protection
Slide 14: SWHC Diversification Strategy
SWHC Diversification Strategy Professional customer base Alignment with core focus areas of safety, security, and protection Strong management teams in place to drive platform growth Limited EPS dilution Seeking strong business platforms to build upon and broaden total company revenue and earnings b
Slide 15: Security Platform: USR
Security Platform: USR ee A Smith& Wesson’ Company
Slide 16: One Company: Two Strong Growth Platforms
Leader in quality firearms Leader in perimeter security Growth and profitability Global leader in safety, security and protection NASDAQ Global Select: SWHC One Company: Two Strong Growth Platforms
Slide 17: USR Key Differentiators
USR Key Differentiators 1. Market leader 2. Innovative products 3. World class customers 4. Comprehensive business model
Slide 18: 1. Market Leader
1. M A R K E T L E A D E R 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 p
Slide 19: 2. Innovative Products
2. I N N O V A T I V E P R O D U C T S Diversified, Industry Leading Product Offering Full array of perimeter security products Canopies and Prefab Buildings GRAB(r) Barriers Parts & Accessories Other ODDS & Electronic Monitoring
Slide 20: Flagship Product GRAB System: Unique Features
2. I N N O V A T I V E P R O D U C T S Flagship Product GRAB(r) System: Unique Features Shortest, less likely to be lethal stopping distance of any barrier on the market Can be activated in under 1.5 seconds Able to span multiple traffic lanes Re-useable after impact Environmentally friendly: no hyd
Slide 21: Flagship Product: GRAB Superior to Traditional Barriers
2. I N N O V A T I V E P R O D U C T S Flagship Product: GRAB(r) Superior to Traditional Barriers GRAB(r) advantages: Stops vehicle without destroying it Payload contained, not projected Suspects apprehended for questioning Evidence recovered Barrier easily re-set after impact GRAB(r) System Traditi
Slide 22: 3. World Class Customers
3. C U S T O M E R S World Class Customers A customer list that specifies USR as the preferred provider of perimeter security solutions
Slide 23: 4. Comprehensive Business Model
4. C O M P R E H E N S I V E B U S I N E S S M O D E L No Single Competitor Provides USR's Level of Turnkey Perimeter Security Solution 1. Engineering Design specialized knowledge 2. Full Suite of Security Products internally developed (IP) + best-of-breed 3. Installation & Maintenance specialized i
Slide 24: 4. Comprehensive Business Model
4. C O M P R E H E N S I V E B U S I N E S S M O D E L No Integrated Competitors Architectural / Engineering Firms Product Firms Construction Companies
Slide 25: Growth Drivers
Growth Drivers Further penetration of current customers Launch of new products International expansion Expansion into new markets Platform for potential security acquisitions Increasing demand for critical infrastructure protection at government, military and corporate facilities provides enormous o
Slide 26: USR Update: Solidly on Track
USR Update: Solidly on Track YTD September ($M) June 09: Stevie Award - Most Innovative Company of the Year August 09: Listed on Inc. 5000 Fastest Growing Companies September 09: ASIS Accolades Award for Transformational Product November 09: GSN Homeland Security Award for Best Crash Barriers Recent
Slide 27: USR - Solid Growth Profile
USR - Solid Growth Profile (calendar year) 2007 2008 2009E 2010E Earnings per Share (Diluted) 7.3 22.9 50 90 Revenues EBITDAS 2007 2008 2009E 2010E Earnings per Share (Diluted) -1.6 2 9 15 * * Approximately $100M in purchase orders in process at June, 2009
Slide 28: Summary: USR
Summary: USR Profitable, growing company in high growth global market GRAB(r) system provides differentiation, barrier to entry Unique business model World class customers Unique competitor/customer relationships USR at inflection point: Unparalleled opportunity for growth
Slide 29: Why Invest in Smith & Wesson
Why Invest in Smith & Wesson Solidly executing a successful growth plan 33% Revenue CAGR since 2005 Diversifying revenue sources: Consumer, Professional, International Gaining share in handgun markets popular M&P series: Winning in law enforcement and internationally Well positioned for large govern
Slide 30: Smith & Wesson
= by Smith&Wesson’ NASDAQ Global Select: SWHC
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