Company Announcement - Smith & Wesson Brands, Inc. has rescheduled its conference call to discuss the fourth quarter and full fiscal 2025 financial and operational results from June 19, 2025, to June 18, 2025 [1] - The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) [1] Participation Details - Interested parties in North America can participate by dialing 1-877-704-4453, while those outside North America can dial 1-201-389-0920 [2] - Participants are advised to dial in at least 10 minutes prior to the start of the call [2] - A live and archived webcast will be available on the company's website under the Investor Relations section [2] Company Overview - Smith & Wesson Brands, Inc. is a leader in firearm manufacturing and design, offering a wide range of handgun, long gun, and suppressor products under the Smith & Wesson® and Gemtech® brands [3] - The company also provides forging and machining services to third parties [3]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $115.9 million, down $21.6 million or 15.7% from the prior year [21] - Gross margin decreased to 24.1%, which is 4.6% lower than the comparable quarter last year due to unfavorable fixed cost absorption and higher promotional costs [23] - Net income for the quarter was $1.7 million, or $0.04 per share, with non-GAAP income per share at $0.02 [24] Business Line Data and Key Metrics Changes - New products accounted for over 41% of sales in the quarter, indicating strong performance [10] - Handgun average selling prices (ASPs) declined by 7.8%, while long gun ASPs increased by 17.2% due to strong demand for higher-priced lever rifles [13][14] - Shipments into the channel declined by 7.7%, with a noted gain in market share for handguns despite an overall NICS decline of 4.1% [11] Market Data and Key Metrics Changes - Adjusted NICS was down 4.5%, reflecting a decline in consumer demand [11] - Long gun unit sales grew at a compounded annual rate of nearly 20% over two years, outperforming NICS [12] - Channel inventory at distributors is currently under nine weeks, indicating a clean inventory situation [17] Company Strategy and Development Direction - The company is focused on innovation, with several new products expected to be introduced in the upcoming quarters [10] - A flexible manufacturing model is in place to ensure profitability regardless of demand conditions [9] - The company plans to continue investing in innovation and manufacturing while managing capital allocation to return value to stockholders [19][29] Management's Comments on Operating Environment and Future Outlook - Management anticipates a steady firearms market with no major demand catalysts expected in the near term [41] - The company expects full-year revenue to decline by 5-10%, now leaning towards a 10% decline due to softer demand trends [26] - The effective tax rate is expected to be approximately 28% [28] Other Important Information - The company repurchased approximately 220,000 shares during the quarter, totaling $2.8 million [25] - A quarterly dividend of $0.13 per share has been authorized, with payment scheduled for April 3 [26] Q&A Session Summary Question: What is affecting sales of legacy products? - Management indicated that the Bodyguard 2.0 is cannibalizing some of their own product lines, alongside competitive pressures and consumer discretionary spending being impacted by inflation [33][35] Question: How is the industry behaving regarding distributor inventory? - Management noted that distributor inventory is at about 8.5 weeks, indicating a healthy inventory management across the channel [38] Question: What is the company's exposure to tariffs and the regulatory environment? - Management stated that while there is some exposure to tariffs, it is not expected to materially impact financials. They also expressed satisfaction with the current regulatory stability [44][46] Question: What are the expectations for ASPs in Q4? - Management expects handgun ASPs to remain flat, while long gun ASPs should maintain their current mix [52] Question: What are the company's goals for 2026? - Management aims to continue focusing on new product introductions and expanding market share, while maintaining profitability through flexible manufacturing [58][60]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $115.9 million, down $21.6 million or 15.7% from the prior year [21] - Gross margin decreased to 24.1%, a decline of 4.6% compared to the same quarter last year due to unfavorable fixed cost absorption and higher promotional costs [23] - Net income for the quarter was $1.7 million, or $0.04 per share, with non-GAAP income per share at $0.02 [24] Business Line Data and Key Metrics Changes - New products accounted for over 41% of sales in the quarter, indicating strong performance [10] - Handgun average selling prices (ASPs) declined by 7.8%, while long gun ASPs increased by 17.2% due to strong demand for higher-priced lever rifles [13][14] - Shipments into the channel declined by 7.7%, with a noted gain in market share for handguns despite an overall NICS decline of 4.1% [11] Market Data and Key Metrics Changes - Adjusted NICS was down 4.5%, reflecting two months of year-over-year declines followed by a small increase in January [11] - Long gun unit sales grew at a compounded annual rate of nearly 20% over a two-year basis, outperforming NICS [12] - Channel inventory at distributors is currently under nine weeks, indicating a clean inventory situation [17] Company Strategy and Development Direction - The company aims to continue its focus on innovation, with several new products expected to be introduced in the upcoming quarters [10] - The flexible manufacturing model is designed to ensure profitability regardless of demand conditions, allowing the company to adjust production levels based on sales forecasts [16] - The company plans to maintain a disciplined capital allocation strategy, including debt repayment and dividends [17][29] Management's Comments on Operating Environment and Future Outlook - Management anticipates that the firearms market will remain steady at current demand levels, with no major demand catalysts expected in the near term [18] - The company expects full-year revenue to decline by 5-10% from fiscal 2024, leaning towards the lower end of this range due to softer demand trends [26] - Management expressed optimism about the potential for increased consumer discretionary spending in the long term, which could positively impact demand [41] Other Important Information - The company repurchased approximately 220,000 shares during the quarter, reducing the share count by more than 1.5 million shares net of dilution [17] - The board has authorized a quarterly dividend of $0.13 per share, with payment scheduled for April 3 [26] Q&A Session Summary Question: What is impacting sales of legacy products? - Management indicated that the Bodyguard 2.0 is cannibalizing some of their own product lines, alongside competitive pressures and consumer discretionary spending challenges [33][35] Question: How is the industry behaving regarding distributor inventory? - Management noted that distributor inventory is at about 8.5 weeks, indicating a healthy inventory management situation across the industry [38] Question: What is the company's exposure to tariffs and the regulatory environment? - Management stated that while there is some exposure to tariffs, it is not expected to materially impact financials. They also expressed satisfaction with the current regulatory stability [44][46] Question: What are the expectations for ASPs in Q4? - Management expects ASPs for handguns to remain flat, while long gun ASPs should maintain their current mix [52] Question: What are the company's goals for 2026? - Management aims to focus on new product introductions and market share growth, with a continued emphasis on innovation [56][58]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $115.9 million, a decrease of $21.6 million or 15.7% compared to the prior year [13] - Gross margin was 24.1%, down 4.6% from the comparable quarter last year due to unfavorable fixed cost absorption and higher promotional costs [15] - Net income for the quarter was $1.7 million, or $0.04 per share, with non-GAAP income per share at $0.02 [16] Business Line Data and Key Metrics Changes - New products accounted for over 41% of sales in the quarter, indicating strong performance in innovation [6] - Handgun average selling prices (ASPs) declined by 7.8%, while long gun ASPs increased by 17.2% due to demand for higher-priced lever action rifles [8][15] - Shipments into the channel declined by 7.7%, with a notable 26.7% drop in long gun shipments attributed to prior year outperformance [7] Market Data and Key Metrics Changes - Adjusted NICS data showed a 4.5% decline in market share, with a 3.9% decrease in long gun NICS [7] - Channel inventory at distributors is currently under nine weeks, indicating a clean inventory situation [10] - The overall firearms market is experiencing pressure on consumer discretionary spending, affecting demand [9] Company Strategy and Development Direction - The company is focused on innovation and plans to introduce several new products in the upcoming quarters [6] - A flexible manufacturing model is in place to adapt to market conditions and maintain profitability [10] - The company aims to continue returning value to shareholders through dividends and stock repurchases while managing capital effectively [11] Management's Comments on Operating Environment and Future Outlook - Management anticipates steady demand levels in the firearms market, with expectations of a 5% to 10% revenue decline for the full year [17] - The company expects Q4 margins to be lower than the prior year due to reduced production levels aimed at inventory management [18] - There is optimism regarding potential economic recovery and its impact on discretionary spending [25] Other Important Information - The company repurchased approximately 220,000 shares during the quarter, reducing the share count by over 1.5 million shares net of dilution [11] - The Board has authorized a quarterly dividend of $0.13 per share, with payment scheduled for April 3 [17] Q&A Session Summary Question: What is affecting sales of legacy products? - Management indicated that new products, particularly the Bodyguard 2.0, are cannibalizing sales of legacy products, alongside competitive pressures and inflation affecting consumer spending [20][22] Question: How is the industry behaving regarding distributor inventory? - Distributors are managing inventory well, with current levels at about 8.5 weeks, indicating a stable market environment [23][24] Question: What is the company's exposure to tariffs and regulatory changes? - The company has some exposure to tariffs due to overseas supply but does not expect a material impact on financials. Stability in the regulatory environment is also noted as a positive [26][28] Question: What are the expectations for ASPs in Q4? - ASPs for handguns are expected to remain flat, while long gun ASPs should maintain their current mix [32] Question: What are the company's goals for 2026? - The company aims to focus on new product introductions and market share growth, with a continued emphasis on innovation [34][36] Question: What trends are seen in the handgun market? - There is a shift towards smaller frame concealed carry firearms, with the Bodyguard 2.0 performing well in this category [44][46] Question: What is the margin impact of potential future product launches in long guns? - The margin for the new lever action rifles is not materially different from the core line of rifles, indicating a balanced approach to product expansion [48]

Financial Performance - Net sales for the three months ended January 31, 2025, were $115.9 million, a decrease of $21.6 million, or 15.7%, compared to the same quarter last year [79]. - Gross profit for the same period was $27.9 million, with a gross margin of 24.1%, down from 28.7% in the prior year [79][83]. - Operating income for the three months ended January 31, 2025, was $4.1 million, a decrease of $7.2 million, or 63.4%, from the comparable quarter last year [93]. - Operating income for the nine months ended January 31, 2025, decreased by $10.2 million to $9.2 million, representing a 52.4% decline compared to the same period in 2024 [94]. - Net income for the nine months ended January 31, 2025, was $3.7 million, down $9.8 million or 72.7% from $13.5 million in the prior year [101]. Sales Performance - Handgun sales decreased by $14.7 million, or 15.5%, primarily due to lower consumer demand and a shift to lower-priced models, although newly introduced products accounted for 40.0% of handgun sales [80]. - Long gun sales fell by $4.6 million, or 14.2%, with newly introduced products representing 56.1% of long gun sales [81]. - Other products and services revenue decreased by $2.3 million, or 21.7%, mainly due to lower business-to-business sales, despite increased suppressor sales [82]. - Newly introduced products accounted for 40.9% of net sales for the three months ended January 31, 2025, including five new pistols and five new long guns [82]. Expenses - Total operating expenses for the three months ended January 31, 2025, were $23.8 million, a decrease of $4.3 million, or 15.4%, from the prior year [91]. - Research and development expenses increased by $900,000, or 45.7%, due to higher materials and testing costs associated with new product development [91]. Cash Flow and Financing - Cash used in operating activities for the nine months ended January 31, 2025, was $48.1 million, a decrease of $111.1 million compared to cash provided in the same period last year [102]. - Cash used in investing activities decreased by $70.7 million to $11.8 million for the nine months ended January 31, 2025, primarily due to lower capital expenditures [104]. - Cash provided by financing activities increased by $12.4 million to $25.7 million for the nine months ended January 31, 2025, driven by $70 million in borrowings under the revolving line of credit [106]. - As of January 31, 2025, the company had $110.0 million in borrowings outstanding on the revolving line of credit, with an average interest rate of 6.63% [108]. - The company anticipates spending between $20.0 million and $25.0 million on capital expenditures in fiscal 2025 [105]. - As of January 31, 2025, the company had $26.7 million in cash and cash equivalents, which is expected to be adequate to fund operations for at least the next 12 months [113]. Inventory - Inventory balances increased by $38.4 million between April 30, 2024, and January 31, 2025, due to a slowdown in demand [84]. Interest and Tax - Net interest expense for the nine months ended January 31, 2025, increased by $2.4 million to $3.9 million, a 167.6% increase from the prior year [97]. - Income tax expense for the nine months ended January 31, 2025, decreased by $3.0 million to $1.7 million, a 64.2% decline compared to the same period in 2024 [99].

Financial Performance - Q3 net sales were $115.9 million, a decrease of $21.6 million, or 15.7%, compared to the same quarter last year[6] - Q3 gross margin was 24.1%, down from 28.7% in the comparable quarter last year[6] - Q3 GAAP net income was $1.7 million, or $0.04 per diluted share, compared to $7.9 million, or $0.17 per diluted share, for the same quarter last year[6] - For the nine months ended January 31, 2025, net income decreased to $3,690,000 from $13,499,000 in the same period of 2024, representing a decline of approximately 72.6%[16] - GAAP net sales for the three months ended January 31, 2025, were $115,885,000, down from $137,484,000 in the same period of 2024, a decrease of about 15.6%[17] - Non-GAAP net income for the nine months ended January 31, 2025, was $4,538,000, compared to $21,309,000 for the same period in 2024, reflecting a decline of approximately 78.7%[17] Revenue Expectations - The company expects full year revenue to be 5-10% lower than in fiscal 2024[4] Product Performance - New products introduced within the past year accounted for over 41% of sales in the quarter[4] Cash Flow and Liquidity - Cash and cash equivalents decreased to $26.7 million from $60.8 million as of April 30, 2024[12] - The company reported a net cash used in operating activities of $48,051,000 for the nine months ended January 31, 2025, compared to cash provided of $63,003,000 in the same period of 2024[20] - Free cash flow for the nine months ended January 31, 2025, was negative $62,365,000, compared to negative $22,185,000 for the same period in 2024[20] - Cash and cash equivalents at the end of the period were $26,704,000, down from $47,367,000 at the end of the same period in 2024, a decrease of approximately 43.7%[16] Expenses and Liabilities - Non-GAAP adjusted EBITDAS was $13.3 million, or 11.5% of net sales, compared to $21.4 million, or 15.6% of net sales, for the same quarter last year[6] - Non-GAAP Adjusted EBITDAS for the nine months ended January 31, 2025, was $41,664,000, compared to $58,327,000 for the same period in 2024, a decrease of approximately 28.6%[19] - The company incurred stock-based compensation expense of $5,724,000 for the nine months ended January 31, 2025, compared to $4,264,000 in the same period of 2024, an increase of about 34.2%[16] - The company reported interest expense of $5,881,000 for the nine months ended January 31, 2025, compared to $3,404,000 for the same period in 2024, an increase of about 72.9%[19] Balance Sheet - The company maintains a strong balance sheet with total assets of $578.9 million as of January 31, 2025[12] - Total current liabilities decreased to $63.98 million from $96.7 million as of April 30, 2024[12] Dividends - The board of directors authorized a quarterly dividend of $0.13 per share, payable on April 3, 2025[4]

Core Insights - Smith & Wesson Brands, Inc. reported financial results for Q3 of fiscal 2025, indicating a slight revenue shortfall but meeting EPS and EBITDAS expectations due to lower operating expenses and a flexible manufacturing model [1][3][6] - The company anticipates a steady firearms market and believes it is well-positioned for continued success, driven by innovation and disciplined cost control [3][6] - Full-year revenue is expected to be 5-10% lower than fiscal 2024, reflecting lower demand for core products [3][6] Financial Performance - Q3 net sales were $115.9 million, a decrease of $21.6 million, or 15.7%, compared to the same quarter last year [6][12] - Gross margin for Q3 was 24.1%, down from 28.7% in the comparable quarter last year [6][12] - GAAP net income was $1.7 million, or $0.04 per diluted share, compared to $7.9 million, or $0.17 per diluted share, for the same quarter last year [6][12] - Non-GAAP net income was $962 thousand, or $0.02 per diluted share, down from $8.7 million, or $0.19 per diluted share, in the prior year [6][12] Operational Highlights - New products accounted for over 41% of sales in the quarter, indicating strong performance in this category [3][6] - The company has authorized a quarterly dividend of $0.13 per share, to be paid on April 3, 2025 [3][6] Cash Flow and Balance Sheet - Cash and cash equivalents decreased to $26.7 million from $60.8 million at the end of the previous fiscal year [10][14] - Total current assets increased to $298.7 million, while total liabilities rose to $214.8 million [10][11] - Free cash flow for the nine months ended January 31, 2025, was $(62.4) million, compared to $(22.2) million for the same period last year [19]

Company Announcement - Smith & Wesson Brands, Inc. plans to release its third quarter fiscal 2025 financial results on March 6, 2025, after market close [1] - A conference call and webcast will be held on the same day to discuss the financial and operational results, featuring CEO Mark Smith and CFO Deana McPherson [2] Participation Details - Interested parties in North America can join the call by dialing 1-877-704-4453, while international participants can dial 1-201-389-0920 [3] - Participants are advised to join at least 10 minutes prior to the start of the call, which will begin at 5:00 p.m. Eastern Time [2][3] Company Overview - Smith & Wesson Brands, Inc. is a leader in firearm manufacturing and design, offering a wide range of handgun, long gun, and suppressor products under the Smith & Wesson® and Gemtech® brands [4] - The company also provides forging and machining services to third parties [4]

Group 1 - The article highlights Smith & Wesson Brands, Inc. (NASDAQ: SWBI) as a focus for investment analysis, marking the first update in nearly a year [2] - The investment group, The Insiders Forum, specializes in small and mid-cap stocks with significant insider purchases, aiming to outperform the Russell 2000 benchmark [2] - The portfolio managed by The Insiders Forum consists of 12-25 top stocks across various sectors that are attractively valued [2]

Core Viewpoint - Smith & Wesson Brands, Inc. announces the retirement of Sue Cupero, Vice President of Sales, after over 40 years of service, effective May 2025 [1][2][3] Company Overview - Smith & Wesson Brands, Inc. is a leader in firearm manufacturing and design, offering a wide range of products including handguns, long guns, and suppressors under the Smith & Wesson® and Gemtech® brands [5] - The company also provides manufacturing services such as forging, machining, and precision plastic injection molding [5] Leadership Transition - Sue Cupero has been instrumental in shaping the company's sales strategies and expanding its market presence since joining in 1979 [2][3] - The company will begin the search for her replacement immediately, aiming for a smooth transition of responsibilities [4]