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Smith & Wesson Reports Third Quarter Financial Results
Tuesday March 8, 4:15 pm ET
- Year-Over-Year Net Sales Growth of 13.4%; Firearms Growth of 22.5%
SPRINGFIELD, Mass., March 8 /PRNewswire-FirstCall/ -- Smith & Wesson Holding Corp. (Amex: SWB - News), the legendary 153-year old firearms maker, today announced its financial results for the third fiscal quarter ended January 31, 2005.
Sales for the three months ended January 31, 2005 were $31.1 million, a 13.4% increase over sales of $27.4 million for the comparable quarter in fiscal 2004. Firearms sales, the Company's core business, posted year-over-year quarterly growth of 22.5%. Net loss for the quarter was $32,658, or $.00 per diluted share, compared with a net loss of $1.7 million, or $.06 per diluted share, for the comparable quarter in fiscal 2004.
For the nine months ended January 31, 2005, net product sales were $88.0 million, a $2.9 million, or 3.4%, increase over the nine months ended January 31, 2004. Firearms sales were $80.3 million, a $7.6 million, or 10.5%, increase over the comparable period in fiscal 2004. Net income for the nine months ended January 31, 2005 was $3.7 million, or $.11 per diluted share, compared with a net loss of $450,696, or $.01 per diluted share, for the comparable period in fiscal 2004.
Michael Golden, President and Chief Executive Officer, said, "I am pleased with our sales performance for the quarter, particularly the increase in our pistol sales. We responded to this growth with a number of initiatives, including a transition early in the quarter to a seven-day workweek and improvements in our manufacturing processes. We began to see the positive impact of those changes in our January results. We will now focus on continuing to improve our manufacturing processes and our marketing and sales activities. We also made tremendous strides this quarter in building our new management team, with the addition of key executives with proven track records who will drive our sales, licensing and operations."
Growth in net product sales for the third quarter 2005 resulted from higher domestic demand for the Company's firearms. The Model 500 revolver continued to deliver increased sales numbers, the result of a successful launch of the new 4" barrel product in 2004. The Company's 1911 line of pistols benefited from the formal launch and extensive media coverage of three new pistol additions introduced at the January 2005 SHOT Show in Las Vegas. Non-firearm sales for the third quarter 2005 posted a year-over-year decline of $1.6 million, due primarily to the Company's decision to discontinue its unprofitable optics product line in the third quarter of fiscal 2004. The increase in net product sales for the nine months ended January 31, 2005 reflected the increased demand for the Company's firearms. Non-firearm sales decreased by $4.7 million over the nine months ended January 31, 2004, driven by reduced handcuff sales and discontinued product lines which were included in the sales for the prior year.
Improvement in the net loss for the third quarter of fiscal 2005 over the third quarter of fiscal 2004 was attributable to higher sales and reduced operating expenses. Operating expenses for the third quarter of fiscal 2004 were impacted by a number of one-time charges, including the discontinuation of two product lines, one-time restructuring costs of $1.0 million, and legal and professional fees associated with the restatement of prior period financial statements.
John Kelly, Chief Financial Officer, said, "In addition to growing our revenue, we dramatically strengthened our balance sheet this quarter through refinancing activities. As a result, we reduced our total debt by $21.3 million and improved our debt-to-equity ratio from its April 2004 level of 2.5 to 1 to its current level of .8 to 1. In conjunction with the refinancing, we obtained a revolving credit line, which is available for immediate use, as well as a capital expenditure credit line, which will be available to us in fiscal 2006. These resources will provide us with access to capital as we continue to grow our business."
Gross margin for the three months ended January 31, 2005 was $7.7 million, or 24.5%, a slight decrease from the comparable quarter in fiscal 2004. The shift to a seven-day workweek to meet increasing demand resulted in additional labor and training costs, which impacted gross margins for the quarter. In addition, increased consulting expenses for the Company's Lean Six Sigma efforts and increased medical costs both contributed to lower margins. The Lean Six Sigma program will now be driven internally, and the Company therefore expects that costs for that program will decline.
Outlook for the Full Year 2005
The Company currently expects net product sales for the year ending April 30, 2005 to increase by approximately 3% to 6% over the $117.9 million reported for the year ended April 30, 2004. Firearms sales for 2005 are expected to increase by about 9% over fiscal 2004 levels. The Company expects net income for the year ending April 30, 2005 to be between $5.1 and $5.9 million, or $.14 and $.17 per fully diluted share, compared with $1.4 million, or $.04 per fully diluted share, for the year ended April 30, 2004.
About Smith & Wesson
Smith & Wesson Holding Corp., through its subsidiary Smith & Wesson Corp., is one of the world's largest manufacturers of quality handguns, law enforcement products and firearm safety/security products. The Company also provides shooter protection, knives, apparel, footwear and other accessory lines. The Company is based in Springfield, Mass., with manufacturing facilities in Springfield and Houlton, Maine. The Smith & Wesson Academy is America's longest-running firearms training facility for America's public servants. For more information, call (800) 331-0852 or log on to www.smith-wesson.com.
http://biz.yahoo.com/prnews/050308/latu115_1.html
Tuesday March 8, 4:15 pm ET
- Year-Over-Year Net Sales Growth of 13.4%; Firearms Growth of 22.5%
SPRINGFIELD, Mass., March 8 /PRNewswire-FirstCall/ -- Smith & Wesson Holding Corp. (Amex: SWB - News), the legendary 153-year old firearms maker, today announced its financial results for the third fiscal quarter ended January 31, 2005.
Sales for the three months ended January 31, 2005 were $31.1 million, a 13.4% increase over sales of $27.4 million for the comparable quarter in fiscal 2004. Firearms sales, the Company's core business, posted year-over-year quarterly growth of 22.5%. Net loss for the quarter was $32,658, or $.00 per diluted share, compared with a net loss of $1.7 million, or $.06 per diluted share, for the comparable quarter in fiscal 2004.
For the nine months ended January 31, 2005, net product sales were $88.0 million, a $2.9 million, or 3.4%, increase over the nine months ended January 31, 2004. Firearms sales were $80.3 million, a $7.6 million, or 10.5%, increase over the comparable period in fiscal 2004. Net income for the nine months ended January 31, 2005 was $3.7 million, or $.11 per diluted share, compared with a net loss of $450,696, or $.01 per diluted share, for the comparable period in fiscal 2004.
Michael Golden, President and Chief Executive Officer, said, "I am pleased with our sales performance for the quarter, particularly the increase in our pistol sales. We responded to this growth with a number of initiatives, including a transition early in the quarter to a seven-day workweek and improvements in our manufacturing processes. We began to see the positive impact of those changes in our January results. We will now focus on continuing to improve our manufacturing processes and our marketing and sales activities. We also made tremendous strides this quarter in building our new management team, with the addition of key executives with proven track records who will drive our sales, licensing and operations."
Growth in net product sales for the third quarter 2005 resulted from higher domestic demand for the Company's firearms. The Model 500 revolver continued to deliver increased sales numbers, the result of a successful launch of the new 4" barrel product in 2004. The Company's 1911 line of pistols benefited from the formal launch and extensive media coverage of three new pistol additions introduced at the January 2005 SHOT Show in Las Vegas. Non-firearm sales for the third quarter 2005 posted a year-over-year decline of $1.6 million, due primarily to the Company's decision to discontinue its unprofitable optics product line in the third quarter of fiscal 2004. The increase in net product sales for the nine months ended January 31, 2005 reflected the increased demand for the Company's firearms. Non-firearm sales decreased by $4.7 million over the nine months ended January 31, 2004, driven by reduced handcuff sales and discontinued product lines which were included in the sales for the prior year.
Improvement in the net loss for the third quarter of fiscal 2005 over the third quarter of fiscal 2004 was attributable to higher sales and reduced operating expenses. Operating expenses for the third quarter of fiscal 2004 were impacted by a number of one-time charges, including the discontinuation of two product lines, one-time restructuring costs of $1.0 million, and legal and professional fees associated with the restatement of prior period financial statements.
John Kelly, Chief Financial Officer, said, "In addition to growing our revenue, we dramatically strengthened our balance sheet this quarter through refinancing activities. As a result, we reduced our total debt by $21.3 million and improved our debt-to-equity ratio from its April 2004 level of 2.5 to 1 to its current level of .8 to 1. In conjunction with the refinancing, we obtained a revolving credit line, which is available for immediate use, as well as a capital expenditure credit line, which will be available to us in fiscal 2006. These resources will provide us with access to capital as we continue to grow our business."
Gross margin for the three months ended January 31, 2005 was $7.7 million, or 24.5%, a slight decrease from the comparable quarter in fiscal 2004. The shift to a seven-day workweek to meet increasing demand resulted in additional labor and training costs, which impacted gross margins for the quarter. In addition, increased consulting expenses for the Company's Lean Six Sigma efforts and increased medical costs both contributed to lower margins. The Lean Six Sigma program will now be driven internally, and the Company therefore expects that costs for that program will decline.
Outlook for the Full Year 2005
The Company currently expects net product sales for the year ending April 30, 2005 to increase by approximately 3% to 6% over the $117.9 million reported for the year ended April 30, 2004. Firearms sales for 2005 are expected to increase by about 9% over fiscal 2004 levels. The Company expects net income for the year ending April 30, 2005 to be between $5.1 and $5.9 million, or $.14 and $.17 per fully diluted share, compared with $1.4 million, or $.04 per fully diluted share, for the year ended April 30, 2004.
About Smith & Wesson
Smith & Wesson Holding Corp., through its subsidiary Smith & Wesson Corp., is one of the world's largest manufacturers of quality handguns, law enforcement products and firearm safety/security products. The Company also provides shooter protection, knives, apparel, footwear and other accessory lines. The Company is based in Springfield, Mass., with manufacturing facilities in Springfield and Houlton, Maine. The Smith & Wesson Academy is America's longest-running firearms training facility for America's public servants. For more information, call (800) 331-0852 or log on to www.smith-wesson.com.
http://biz.yahoo.com/prnews/050308/latu115_1.html
