Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Fiscal 2024 Financial Results

About this update from Smith & Wesson Brands, Inc.

Q4 Net Sales of $159.1 Million Q4 Gross Margin of 35.5%; Non-GAAP Gross Margin of 35.6% Q4 EPS of $0.57 /Share; Q4 Adjusted EPS of $0.45 /Share Q4 Adjusted EBITDAS Margin of 22.6% Board of Directors Authorized 8.3% Increase in Quarterly Dividend Maryville, Tennessee --( Newsfile Corp. - June 20, 2024 ) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI) , a U.S. -based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2024, ended April 30, 2024 . Fourth Quarter Fiscal 2024 Financial Highlights Net sales were $159.1 million , an increase of $14.4 million , or 9.9%, over the comparable quarter last year. Gross margin was 35.5% compared with 29.0% in the comparable quarter last year. GAAP net income was $26.1 million , or $0.57 per diluted share, compared with $12.8 million , or $0.28 per diluted share, for the comparable quarter last year. Non-GAAP net income was $20.9 million , or $0.45 per diluted share, compared with $14.6 million , or $0.32 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income include a gain related to the sale of certain intangible assets and other costs. For a detailed reconciliation, see the schedules that follow in this release. Non-GAAP Adjusted EBITDAS was $36.0 million , or 22.6% of net sales, compared with $30.3 million , or 20.9% of net sales, for the comparable quarter last year. Full Year Fiscal 2024 Financial Highlights Net sales were $535.8 million , an increase of $56.6 million , or 11.8%, over the prior fiscal year. Gross margin was 29.5% compared with 32.2% in the prior fiscal year. GAAP net income was $39.6 million , or $0.86 per diluted share, compared with $36.9 million , or $0.80 per diluted share, for the prior fiscal year. Non-GAAP net income was $42.6 million , or $0.92 per diluted share, compared with $43.3 million , or $0.94 per diluted share, for the prior fiscal year. GAAP to non-GAAP adjustments for income include a gain related to the sale of certain intangible assets, costs related to the move of our headquarters and significant elements of our operations to a new facility in Maryville, Tennessee , or the Relocation, an accrued legal settlement, and other costs. For a detailed reconciliation, see the schedules that follow in this release. Non-GAAP Adjusted EBITDAS was $94.3 million , or 17.6% of net sales, compared with $95.2 million , or 19.9% of net sales, for the prior fiscal year. Mark Smith , President and Chief Executive Officer, commented, "We delivered yet another strong quarter to close out fiscal 2024. I am very proud of the team's continuing discipline and execution against our strategic initiatives of strong brand messaging and marketing, best-in-class innovation, operational excellence, and business process efficiencies. Our results in fiscal 2024 again demonstrate that our relentless focus on these long-term strategies consistently reinforces our position as a market leader and delivers solid stockholder returns. While the summer months will be highly competitive as we navigate the traditionally slower season for firearms, we continue to expect healthy demand overall for firearms in fiscal 2025, and Smith & Wesson is well positioned to deliver another solid year of growth. With our deep pipeline of new products, leading brand, new state of the art facility now fully operational, strong balance sheet, and, most importantly, world-class dedicated employees, we are excited to continue delivering value for our stockholders." Deana McPherson , Executive Vice President and Chief Financial Officer, commented, "Our fourth quarter net sales increased by nearly 10% compared to the comparable quarter last year, while our fiscal 2024 sales increased by nearly 12% year-over-year. Fourth quarter gross margin of 35.5% was 6.5% above the prior year comparable quarter, with the full year ending at 29.5%. We generated operating cash of $43.6 million during the fourth quarter and $106.7 million for the full year. Despite a competitive marketplace and inflationary impacts, we expect to grow both net sales and gross margin in fiscal 2025. During fiscal 2024, we repurchased 793,551 shares, utilizing $10.2 million of our $50 million authorization and paid $22.0 million of dividends. Consistent with our capital allocation strategy, our board of directors has authorized a $0.13 per share quarterly dividend, which will be paid to stockholders of record on July 11, 2024 with payment to be made on July 25, 2024 ." Conference Call and Webcast The company will host a conference call and webcast on June 20, 2024 to discuss its fourth quarter and full fiscal 2024 financial and operational results. Speakers on the conference call will include Mark Smith , President and Chief Executive Officer, and Deana McPherson , Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time ( 2:00 p.m. Pacific Time ). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. The conference call audio webcast can also be accessed live on the company's website at www.smith-wesson.com , under the Investor Relations section. Reconciliation of U.S. GAAP to Non-GAAP Financial Measures In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) a gain from the sale of certain intangible assets, (vi) spin related stock-based compensation, (vii) an accrued legal settlement, (viii) Relocation expense, and (ix) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis. About Smith & Wesson Brands, Inc. Smith & Wesson Brands, Inc. (NASDAQ: SWBI) is a U.S. -based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides manufacturing services including forging, machining, and precision plastic injection molding services. For more information call (800) 331-0852 or visit www.smith-wesson.com . Safe Harbor Statement Certain statements contained in this press release 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 include, among others, that (i) while the summer months will be highly competitive as we navigate the traditionally slower season for firearms, we continue to expect healthy demand overall for firearms in fiscal 2025 and Smith & Wesson is well positioned to deliver another solid year of growth and (ii) despite a competitive marketplace and inflationary impacts, we expect to grow both net sales and gross margin in fiscal 2025. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the Relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission , including our Annual Report on Form 10-K for the fiscal year ended April 30, 2024 . Contact: [email protected] (413) 747-3448 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of: April 30, 2024 April 30, 2023 (In thousands, except par value and share data) ASSETS Current assets: Cash and cash equivalents $ 60,839 $ 53,556 Accounts receivable, net of allowances for credit losses of $0 on April 30, 2024 and $23 on April 30, 2023 59,071 55,153 Inventories 160,500 177,118 Prepaid expenses and other current assets 4,973 4,917 Income tax receivable 2,495 1,176 Total current assets 287,878 291,920 Property, plant, and equipment, net 252,633 210,330 Intangibles, net 2,598 3,588 Goodwill 19,024 19,024 Deferred income taxes 7,249 8,085 Other assets 8,614 8,347 Total assets $ 577,996 $ 541,294 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 41,831 $ 36,795 Accrued expenses and deferred revenue 26,811 20,149 Accrued payroll and incentives 17,147 18,565 Accrued income taxes — 1,831 Accrued profit sharing 9,098 8,203 Accrued warranty 1,813 1,670 Total current liabilities 96,700 87,213 Notes and loans payable, net of current portion 39,880 24,790 Finance lease payable, net of current portion 35,404 36,961 Other non-current liabilities 7,852 7,707 Total liabilities 179,836 156,671 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or outstanding — — Common stock, $0.001 par value, 100,000,000 shares authorized, 75,395,490 issued and 45,561,569 shares outstanding on April 30, 2024 and 75,029,300 shares issued and 45,988,930 shares outstanding on April 30, 2023 75 75 Additional paid-in capital 289,994 283,666 Retained earnings 540,660 523,184 Accumulated other comprehensive income 73 73 Treasury stock, at cost (29,833,921 shares on April 30, 2024 and 29,040,370 shares on April 30, 2023 ) (432,642) (422,375) Total stockholders' equity 398,160 384,623 Total liabilities and stockholders' equity $ 577,996 $ 541,294 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended April 30 , For the Years Ended April 30 , 2024 2023 2024 2023 (In thousands, except per share data) Net sales $ 159,148 $ 144,777 $ 535,833 $ 479,242 Cost of sales 102,646 102,815 377,740 324,705 Gross profit 56,502 41,962 158,093 154,537 Operating expenses: Research and development 1,774 1,875 7,266 7,550 Selling, marketing, and distribution 9,463 9,522 40,564 36,976 General and administrative 19,886 12,738 65,484 61,604 Total operating expenses 31,123 24,135 113,314 106,130 Operating income 25,379 17,827 44,779 48,407 Other income/(expense), net: Other income/(expense), net 6,496 (2,154) 6,672 150 Interest expense, net (607) 1,030 (2,055) (331) Total other income/(expense), net 5,889 (1,124) 4,617 (181) Income from operations before income taxes 31,268 16,703 49,396 48,226 Income tax expense 5,158 3,867 9,787 11,350 Net income $ 26,110 $ 12,836 $ 39,609 $ 36,876 Net income per share: Basic - net income $ 0.57 $ 0.28 $ 0.86 $ 0.80 Diluted - net income $ 0.57 $ 0.28 $ 0.86 $ 0.80 Weighted average number of common shares outstanding: Basic 45,544 45,929 45,813 45,844 Diluted 46,043 46,283 46,248 46,170 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Year Ended April 30, 2024 April 30, 2023 (In thousands) Cash flows from operating activities: Net income $ 39,609 $ 36,876 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 32,558 31,436 (Gain)/loss on sale/disposition of assets (5,595) (55) Provision for (recoveries)/losses on notes and accounts receivable (23) (27) I\mpairment of long-lived tangible assets — — Deferred income taxes 835 (6,864) Stock-based compensation expense 5,683 5,102 Changes in operating assets and liabilities: Accounts receivable (3,896) 7,569 Inventories 16,618 (40,458) Prepaid expenses and other current assets (57) 653 Income taxes (3,149) (74) Accounts payable 18,341 (8,606) Accrued payroll and incentives (1,418) 1,194 Accrued profit sharing 895 (5,340) Accrued expenses and deferred revenue 6,318 (3,618) Accrued warranty 142 (168) Other assets (267) 1,789 Other non-current liabilities 145 (2,677) Net cash provided by operating activities 106,739 16,732 Cash flows from investing activities: Payments to acquire patents and software (186) (334) Proceeds from sale of property and equipment 2,955 118 Proceeds from sale of intangible assets 6,500 — Payments to acquire property and equipment (90,759) (89,565) Net cash used in investing activities (81,490) (89,781) Cash flows from financing activities: Proceeds from loans and notes payable 50,000 25,000 Payments on finance lease obligation (1,378) (1,253) Payments on notes and loans payable (35,000) — Payments to acquire treasury stock (10,213) — Dividend distribution (22,020) (18,333) Proceeds to acquire common stock from employee stock purchase plan 1,484 1,528 Payment of employee withholding tax related to restricted stock units (839) (1,065) Net cash provided by/(used in) financing activities (17,966) 5,877 Net decrease in cash and cash equivalents 7,283 (67,172) Cash and cash equivalents, beginning of period 53,556 120,728 Cash and cash equivalents, end of period $ 60,839 $ 53,556 Supplemental disclosure of cash flow information Cash paid for: Interest $ 4,745 $ 2,148 Income taxes $ 12,662 $ 18,208 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILITATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MESURES (Dollars in thousands, except per share data) (Unaudited) For the Three Months Ended For the Year Ended April 30, 2024 April 30, 2023 April 30, 2024 April 30, 2023 $ % of Sales $ % of Sales $ % of Sales $ % of Sales GAAP gross profit $ 56,502 35.5% $ 41,962 29.0% $ 158,093 29.5% $ 154,537 32.2% Relocation expenses 162 0.1% 640 0.4% 2,115 0.4% 3,923 0.8% Settlement — 0.0% — 0.0% 3,200 0.0% — 0.0% Non-GAAP gross profit $ 56,664 35.6% $ 42,602 29.4% $ 163,408 30.5% $ 158,460 33.1% GAAP operating expenses $ 31,123 19.6% $ 24,135 16.7% $ 113,314 21.1% $ 106,130 22.1% Spin related stock-based compensation (3) 0.0% (27) 0.0% (13) 0.0% (106) 0.0% Relocation expenses 155 0.1% (1,687) -1.2% (4,938) -0.9% (4,338) -0.9% Non-GAAP operating expenses $ 31,275 19.7% $ 22,421 15.5% $ 108,363 20.2% $ 101,686 21.2% GAAP operating income $ 25,379 15.9% $ 17,827 12.3% $ 44,779 8.4% $ 48,407 10.1% Settlement — 0.0% — 0.0% 3,200 0.0% — 0.0% Spin related stock-based compensation 3 0.0% 27 0.0% 13 0.0% 106 0.0% Relocation expenses 7 0.0% 2,327 1.6% 7,053 1.3% 8,261 1.7% Non-GAAP operating income $ 25,389 16.0% $ 20,181 13.9% $ 55,045 10.3% $ 56,774 11.8% GAAP net income $ 26,110 16.4% $ 12,836 8.9% $ 39,609 7.4% $ 36,876 7.7% Settlement — 0.0% — 0.0% 3,200 0.0% — 0.0% Sale of intangible assets (6,500) 0.0% — 0.0% (6,500) — — 0.0% Spin related stock-based compensation 3 0.0% 27 0.0% 13 0.0% 106 0.0% Relocation expenses 7 0.0% 2,327 1.6% 7,053 1.3% 8,261 1.7% Tax effect of non-GAAP adjustments 1,285 0.8% (545) -0.4% (746) -0.1% (1,970) -0.4% Non-GAAP net income $ 20,905 13.1% $ 14,645 10.1% $ 42,629 8.0% $ 43,273 9.0% GAAP net income per share - diluted $ 0.57 $ 0.28 $ 0.86 $ 0.80 Settlement — — 0.07 — Sale of intangible assets (0.14) — (0.14) — Relocation expenses — 0.05 0.15 0.18 Tax effect of non-GAAP adjustments 0.03 (0.01) (0.02) (0.04) Non-GAAP net income per share - diluted $ 0.45 (a) $ 0.32 $ 0.92 $ 0.94 (a) Non-GAAP net income per share does not foot due to rounding. SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILITATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP ADJUSTED EBITDAS (in thousands) (Unaudited) For the Three Months Ended For the Year Ended April 30, 2024 April 30, 2023 April 30, 2024 April 30, 2023 GAAP net income $ 26,110 $ 12,836 $ 39,609 $ 36,876 Interest expense 1,434 446 4,838 2,253 Income tax expense 5,158 3,867 9,787 11,350 Depreciation and amortization 8,324 9,552 32,469 31,347 Stock-based compensation expense 1,419 1,244 5,683 5,103 Sale of intangible assets (6,500) — (6,500) — Settlement — — 3,200 — Relocation expense 7 2,327 5,193 8,261 Non-GAAP Adjusted EBITDAS $ 35,952 $ 30,272 $ 94,279 $ 95,190 SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES RECONCILITATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (in thousands) (Unaudited) For the Three Months Ended For the Year Ended April 30, 2024 April 30, 2023 April 30, 2024 April 30, 2023 Net cash provided by operating activities $ 43,616 $ 37,980 $ 106,739 $ 16,732 Payments to acquire property and equipment (5,571) (24,979) (90,759) (89,565) Free cash flow $ 38,045 $ 13,001 $ 15,980 $ (72,833) To view the source version of this press release, please visit https://www.newsfilecorp.com/release/213594 SOURCE Smith & Wesson Brands, Inc

View stock analysis, news, and events for Smith & Wesson Brands, Inc.