Smith & Wesson Brands(SWBI) - 2025 Q4 - Annual Results

Financial Performance - Q4 net sales were $140.8 million, a decrease of $18.4 million, or 11.6%, from the comparable quarter last year[6] - Q4 gross margin was 28.8%, down from 35.5% in the comparable quarter last year[6] - GAAP net income for Q4 was $8.6 million, or $0.19 per diluted share, compared to $27.3 million, or $0.59 per diluted share, for the same quarter last year[6] - Full year net sales totaled $474.7 million, a decrease of $61.2 million, or 11.4%, from the prior fiscal year[6] - Full year gross margin was 26.8%, down from 29.5% in the prior fiscal year[6] - Non-GAAP adjusted EBITDAS for Q4 was $24.1 million, or 17.2% of net sales, compared to $37.6 million, or 23.6% of net sales, for the comparable quarter last year[6] - Net sales for the three months ended April 30, 2025, were $140,762, a decrease of 11.5% from $159,148 in the same period of 2024[17] - Gross profit for the year ended April 30, 2025, was $127,183, down 19.6% from $158,093 in 2024, resulting in a gross margin of 26.8%[17] - Operating income for the three months ended April 30, 2025, was $13,130, a decline of 51.3% compared to $27,007 in the prior year[17] - Net income for the year ended April 30, 2025, was $13,425, a decrease of 67.6% from $41,362 in 2024[19] - Non-GAAP net income for the three months ended April 30, 2025, was $9,007, representing 6.4% of sales, compared to $22,130 or 13.9% of sales in the same period of 2024[20] Cash Flow and Expenses - Cash flows from operating activities for the year ended April 30, 2025, were negative at $(7,223), a significant decline from $106,739 in 2024[19] - The company reported a net cash decrease of $35,608 for the year ended April 30, 2025, compared to an increase of $7,283 in 2024[19] - Total operating expenses for the three months ended April 30, 2025, were $27,415, a decrease of 7.3% from $29,495 in the same period of 2024[17] - Free cash flow for the three months ended April 30, 2025, was $33,537,000, down from $38,045,000 in the prior year[23] - For the twelve months ended April 30, 2025, free cash flow was $(28,828,000), a decrease from $15,980,000 in the previous year[23] - Payments to acquire property and equipment for the three months ended April 30, 2025, were $7,291,000, compared to $5,571,000 in the same period of 2024[23] Assets and Liabilities - Total assets as of April 30, 2025, were $559.6 million, down from $577.4 million a year earlier[15] - Total liabilities increased to $187.2 million as of April 30, 2025, compared to $177.5 million a year earlier[15] Future Outlook - The company expects demand for firearms in fiscal 2026 to be similar to fiscal 2025, subject to economic headwinds such as inflation and tariff-related cost increases[7] - The board of directors has authorized a quarterly dividend of $0.13 per share, payable on July 21, 2025[7] Research and Development - Research and development expenses increased to $9,567 for the year ended April 30, 2025, up 31.7% from $7,258 in 2024[17] Accounting Adjustments - An immaterial error related to legal expenses resulted in an overstatement of general and administrative expenses by $2.3 million for the years 2024 and 2025[24] - The error also understated income tax expense and overstated income tax receivable by $548,000 each as of April 30, 2024[24]