Smith & Wesson Brands, Inc. · NASDAQ:SWBI
Smith & Wesson Brands — Investor Presentation (July 2020)
29 slides from Smith & Wesson Brands's investor presentation, Jul 20, 2020
Slide 1: Investor Presentation July 2020
INVESTOR PRESENTATION JULY 2020 NASDAQ: AOUT Exhibit 99.1
Slide 2: Forward-looking statements
American Outdoor Brands (NASDAQ: AOUT) Certain statements contained in this presentation may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements inc
Slide 3: Spin-Off Overview
American Outdoor Brands (NASDAQ: AOUT) American Outdoor Brands Spin-Off Overview On November 13, 2019, Smith & Wesson Brands, Inc. (“SWBI”) (then called American Outdoor Brands Corporation), announced its plan to spin-off its outdoor products & accessories business to form an independent, publicly t
Slide 4: Experienced Leadership
Experienced Leadership BRIAN D. MURPHY President & Chief Executive Officer Joined in 2016 14+ years experience Lead execution of AOUT’s “Dock & Unlock”TM strategy as part of expansion into new outdoor product categories and markets Experienced leader with ability to motivate teams, build and run bus
Slide 5: A Diverse Outdoor Products & Accessories Company
A Diverse Outdoor Products & Accessories Company American Outdoor Brands, Inc. (“AOUT”): A growth-oriented provider of outdoor products & accessories, including hunting, fishing, camping, shooting, and personal security and defense products, for rugged outdoor enthusiasts: We participate in a very l
Slide 6: Company History and Key Milestones
American Outdoor Brands (NASDAQ: AOUT) Company History and Key Milestones Key Business Milestone Strategic Acquisition Feb 2018 Brand Lanes formed All Existing Outdoor Products & Accessories brands were “docked” into newly formed lanes: Marksman, Defender, Harvester, and Adventurer Feb 2016 Acquired
Slide 7: Dock and Unlock formula and brand lanes
Using our "Dock and Unlock”TM formula, we leverage our brand lanes to reframe our brands’ growth potential Thereby creating “Permission to Play" in new product categories and establishing entrance into wholly new, large addressable markets Resulting in a family of brands with significant runway for
Slide 8: Products that appeal to core consumer activities
Products that appeal to core consumer activities American Outdoor Brands (NASDAQ: AOUT) Caldwell Range Gear Caldwell Digital F.A.T. Wrench Tipton Ultra Gun Vise Frankford M-Press BOG Blood Moon Game Camera MEAT! 1.5 HP Meat Grinder Hooyman No Slip H-Grip Land Management Tools Old Timer Sharpfinger B
Slide 9: Leading Marketing Capabilities
American Outdoor Brands (NASDAQ: AOUT) Leading Marketing Capabilities Each brand lane has dedicated: Brand Management Creative Development Content Deployment Customer Support On-Site Capabilities: Photography & recording studio Advanced assortment of equipment from 3D image capture to cinema quality
Slide 10: Product Development Engine
American Outdoor Brands (NASDAQ: AOUT) Product Development Engine Reloading & Gunsmithing Lab 3D Print Lab CNC Machine Lab 4 state-of-the-art product development labs In-house same-day rapid prototyping capabilities 35+ product development employees New Products For 2020 Strategic Investments in Pro
Slide 11: Unique T-Shaped team structure
Unique “T-Shaped” team structure provides wide product design expertise Depth of knowledge and developed IP is transferred to new products The result is a robust, multi-year pipeline of new products that reflects each brand’s “Permission to Play” American Outdoor Brands (NASDAQ: AOUT) Technology tha
Slide 12: Original Niche: Fillet Knives
Original Niche: Fillet Knives “DOCK & UNLOCK”TM CASE STUDY American Outdoor Brands (NASDAQ: AOUT) From water to plate, BUBBA provides anglers with kick-ass tools to enjoy the ultimate lifestyle of adventure From Niche To KnownTM Expanded potential by dropping "Blade" from the name and positioned it
Slide 13: Original Niche: Tripods, Bipods, Monopods
Original Niche: Tripods, Bipods, Monopods “DOCK & UNLOCK”TM CASE STUDY American Outdoor Brands (NASDAQ: AOUT) For the Obsessed Hunter, BOG is the only brand that delivers unmatched performance and versatility on the hunt because our products are engineered for the Expanded potential by dropping “Pod
Slide 14: E-commerce platform and online ecosystem
We have made significant investments in our e-commerce platform and online ecosystem to reflect how consumers shop During COVID-19, consumers responded to retail store closures by seeking out AOUT’s popular brands and products online Shift in consumer preference to online retailers and increases in
Slide 15: E-Commerce Case Study
E-Commerce Case Study Opportunity: Increasing popularity of DIY meat processing with consumers Large, growing market with reach well beyond hunters No obvious, attractive acquisition targets in the market Harvester brand lane resources in place with existing consumer and product expertise e-commerce
Slide 16: Outdoor Recreational Participation Comparison
Outdoor Recreational Participation Comparison Strong industry fundamentals American Outdoor Brands (NASDAQ: AOUT) Outdoor Participation Trending Source:2019 Outdoor Participation Report, National Shooting Sports Foundation, National Golf Foundation, Tennis Industry Association. >50% of the U.S. Part
Slide 17: Strategic Priorities for Growth
American Outdoor Brands (NASDAQ: AOUT) STRATEGIC PRIORITIES FOR GROWTH Introduce New, Differentiated Products Leveraging agile brand and product development teams Focus on disruptive technology and successful product launches Create competitive moats through intellectual property Expand Addressable
Slide 18: Ideal Acquisition Criteria
IDEAL ACQUISITION CRITERIA “Dock & Unlock”TM Friendly via Brand Lane Structure “From Niche to Known”TM Opportunity (Runway for Growth) Large, Addressable Markets Low Complexity Further Diversifies AOUT’s Supply Chain American Outdoor Brands (NASDAQ: AOUT) PURSUE COMPLEMENTARY ACQUISITIONS Pursue app
Slide 19: Summary Financial Overview
American Outdoor Brands (NASDAQ: AOUT) SUMMARY Financial overview Revenue & Gross Margin Adj. EBITDAS & adj. ebitdas Margin Historical revenue driven by both organic and inorganic growth (5 strategic acquisitions completed since FY2016) Significant sales growth within e-commerce channel – growth exp
Slide 20: Pro forma balance sheet
Pro forma balance sheet As of April 30, 2020 American Outdoor Brands (NASDAQ: AOUT) Conservative Capital Structure to support Organic and Inorganic Growth Strong balance sheet with significant amount of liquidity Low-cost L+200, $50M asset-based revolving credit facility with additional $15M accordi
Slide 21: Financial Outlook and Drivers
American Outdoor Brands (NASDAQ: AOUT) Financial Outlook and Drivers Revenue $180M – $190M Adjusted EBITDAS $15M – $17M Capital Expenditures $2M – $4M FY2021 Introduce new differentiated products Expand addressable markets Augment organic growth with complementary acquisitions High level of operatin
Slide 22: Summary Investment Highlights
American Outdoor Brands (NASDAQ: AOUT) Summary INVESTMENT HIGHLIGHTS Experienced, Entrepreneurial Management Team Repeatable Process for Innovating and Rejuvenating Mature Product Categories Leverageable Platform for Acquisitions with Demonstrated Acquisition Execution Four Brand Lanes with Signific
Slide 23: Q&A
AMERICAN OUTDOOR BRANDS Q&A 4
Slide 24: Appendix
™ WN AMERICAN OUTDOOR BRANDS APPENDIX
Slide 25: Comparable company analysis
American Outdoor Brands (NASDAQ: AOUT) Comparable company analysis — OUTDOOR PRODUCTS Source:Public company filings and Capital IQ as of July 15, 2020. JOUT enterprise value includes ~$131 million of cash and ~$39 million of debt. Equity Value to EBITDA multiple is 11.7x for CY2020E. VSTO values are
Slide 26: Use of non-GAAP measures
American Outdoor Brands (NASDAQ: AOUT) We use GAAP net income as our primary financial measure. We use Adjusted EBITDAS, which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of underlying performance trends, a
Slide 27: Selected Historical Combined Financial Data
American Outdoor Brands (NASDAQ: AOUT) SELECTED HISTORICAL COMBINED FINANCIAL DATA Operating expenses for FY2020 include a $98.9 million impairment of goodwill, and operating expenses for FY2019 include a $10.4 million impairment of goodwill. Income tax benefit in FY2018 was favorably impacted by $7
Slide 28: Non-GAAP Adjusted EBITDAS Reconciliation
NON-GAAP adjusted EBITDAS RECONCILIATION For the Fiscal Years Ended April 30, 2020 2019 2018 2017 2016 (US$ in Thousands) GAAP net income/(loss) $(96,201) $(9,521) $8,165 $(945) $2,697 Income tax expense/(benefit) (11,653) 734 (7,158) (833) 1,452 Depreciation and amortization 23,639 24,333 24,041 21
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