Smith & Wesson Brands(US:SWBI)2024-06-20 20:15Financial Performance - Net sales for fiscal 2024 reached $535.8 million, an increase of $56.6 million, or 11.8%, compared to fiscal 2023[222]. - Gross profit increased by $3.6 million, or 2.3%, but gross margin decreased by 2.7% due to unfavorable fixed-cost absorption and inflation impacts[222][228]. - Net income for fiscal 2024 was $39.6 million, or $0.86 per diluted share, compared to $36.9 million, or $0.80 per diluted share, in the prior year[222]. - Operating income decreased by $3.6 million, or 7.5%, primarily due to an accrued legal settlement and increased promotional spending[231]. - Other income surged to $6.7 million, a significant increase of 4360.3%, mainly from the sale of intangible assets[232]. - Interest expense rose by $1.7 million, or 521.2%, due to higher average outstanding debt balances[233]. - The effective tax rate decreased to 19.8% from 23.5% in the prior year, influenced by a favorable adjustment related to foreign derived income deductions[234]. - Net income for fiscal year 2024 was $39.6 million, an increase of $2.7 million or 7.4% from 2023[235]. - Basic and diluted net income per share increased to $0.86, up 7.5% from $0.80 in the previous year[235]. Cash Flow and Investments - Cash provided by operating activities was $106.7 million, a significant increase of $90.0 million or 537.9% compared to fiscal 2023[236][238]. - Cash used in investing activities decreased by $8.3 million to $(81.5) million, primarily due to $6.5 million received from the sale of intangible assets[236][239]. - Cash used in financing activities was $(18.0) million, compared to cash provided of $5.9 million in fiscal 2023, mainly due to $22.0 million in dividend distributions[236][240]. - The company expects to spend between $25.0 million and $30.0 million on capital expenditures in fiscal 2025[239]. Capital Expenditures and Projects - The company incurred capital expenditures of approximately $157.0 million related to the relocation project, with total expected costs between $160.0 million and $170.0 million[222]. Sales Performance - Sales of handguns increased by $21.2 million, or 5.9%, while long guns saw a significant increase of $42.3 million, or 56.9%[224][226]. - New products accounted for 27.6% of net sales for the 12 months ended April 30, 2024, including one new pistol and three new long guns[227]. Debt and Credit Facilities - As of April 30, 2024, the company had $40.0 million in borrowings outstanding on its revolving line of credit, with an average interest rate of 7.18%[244]. - The company maintains compliance with all debt covenants as of April 30, 2024[244]. - The company has a $100.0 million revolving line of credit with variable interest rates based on the Base Rate or SOFR rate plus an applicable margin[268]. - The company amended its credit agreement on April 28, 2023, replacing LIBOR with SOFR as the interest rate benchmark[268]. - The amendment also changed the definition of "Consolidated Fixed Charge Coverage Ratio" to exclude unfinanced capital expenditures related to the Relocation[268]. Shareholder Actions - The company authorized a share repurchase program of $50.0 million, purchasing 793,551 shares for $10.2 million during fiscal 2024[245]. Economic and Operational Challenges - Inflationary pressures have increased costs for components and labor, expected to continue impacting operations in fiscal 2025[249].