Smith & Wesson Brands(US:SWBI)2025-06-20 10:12Financial Performance - Net sales for fiscal 2025 were $474.7 million, a decrease of $61.2 million, or 11.4%, compared to fiscal 2024[223] - Gross profit decreased by $30.9 million, or 19.6%, with a gross margin of 26.8%, down 270 basis points from the prior year[223] - Net income for fiscal 2025 was $13.4 million, or $0.30 per diluted share, compared to $41.4 million, or $0.89 per diluted share, in fiscal 2024[223] - Operating income decreased by $23.2 million, or 49.3%, to $23.9 million, representing 5.0% of net sales[234] - Net income for fiscal 2025 was $13.4 million, down $27.9 million or 67.5% compared to fiscal 2024, resulting in a diluted net income per share of $0.30[239] - Income tax expense for fiscal 2025 was $5.8 million, a decrease of $4.5 million or 43.8% from fiscal 2024, with an effective tax rate of 30.2%[238] Cash Flow and Investments - Cash used in operating activities was $7.2 million in fiscal 2025, a decline of $113.9 million from cash provided in fiscal 2024[240] - Cash used in investing activities decreased by $62.3 million in fiscal 2025, with capital expenditures of $21.6 million, $69.2 million lower than fiscal 2024[243] - Cash used in financing activities was $9.2 million in fiscal 2025, primarily due to $25.5 million in share repurchases and $23.1 million in dividend distributions[245] - The company expects to spend between $25.0 million and $30.0 million on capital expenditures in fiscal 2026[244] - The company had $25.2 million in cash and cash equivalents on hand as of April 30, 2025[250] Expenses and Costs - Research and development expenses increased by $2.3 million, or 31.8%, primarily due to higher materials and testing costs associated with new product development[232] - Interest expense increased by $2.6 million, or 124.9%, primarily due to higher average debt balances[236] - Inflationary pressures have increased costs for components, parts, raw materials, and labor, expected to continue impacting the company in fiscal 2026[253] Inventory and Sales - Inventory balances increased by $29.3 million between April 30, 2024, and April 30, 2025, due to a slowdown in demand[231] - New products accounted for 42.8% of net sales for the 12 months ended April 30, 2025, including six new pistols and six new long guns[229] Market Overview - The U.S. firearm manufacturing industry grew at a 1.5% compound annual growth rate in units from 2018 through 2023[225] - The annual domestic non-military firearm market is estimated at approximately $2.8 billion for handguns and $1.9 billion for long guns[225] Debt and Compliance - As of April 30, 2025, the company had $80.0 million of borrowings outstanding on its revolving line of credit, with an average interest rate of 6.69%[247] - The company is in compliance with all debt covenants as of April 30, 2025[247]