Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Fiscal 2024 Financial Results
Smith & Wesson Brands (NASDAQ: SWBI) reported its Q4 and full fiscal year 2024 financial results. Q4 net sales increased 9.9% to $159.1 million, with a gross margin of 35.5%. GAAP net income was $26.1 million, or $0.57 per diluted share. Non-GAAP net income was $20.9 million, or $0.45 per diluted share. For the full year, net sales rose 11.8% to $535.8 million, though the gross margin decreased to 29.5%. GAAP net income was $39.6 million, and non-GAAP net income was $42.6 million. The company authorized an 8.3% increase in quarterly dividends. Despite a competitive market, Smith & Wesson plans to grow net sales and gross margin in FY 2025.
- Q4 net sales increased by 9.9% to $159.1 million.
- Q4 gross margin improved to 35.5%, up from 29.0% last year.
- GAAP net income for Q4 more than doubled to $26.1 million.
- Full-year net sales rose by 11.8% to $535.8 million.
- Smith & Wesson authorized an 8.3% increase in quarterly dividends.
- Full-year gross margin decreased from 32.2% to 29.5%.
- Non-GAAP net income for the full year slightly decreased from $43.3 million to $42.6 million.
- Full-year Non-GAAP Adjusted EBITDAS margin fell from 19.9% to 17.6%.
Insights
The recent financial results from Smith & Wesson Brands, Inc. present a compelling snapshot of the company's health and strategic direction. The noteworthy 9.9% increase in Q4 net sales to
However, the annual gross margin decreased to 29.5% from 32.2% last year. This suggests that while Q4 was robust, the company faced some headwinds throughout the fiscal year, likely from inflationary pressures and competitive market dynamics. Investors should note the company's proactive measures, like the 8.3% increase in dividends, indicating a commitment to shareholder returns, which could be attractive for income-focused investors.
Looking ahead, the company's confident outlook for fiscal 2025, backed by a strong balance sheet and operational improvements, bodes well for future profitability. However, the traditionally slower summer season for firearms might create short-term fluctuations in performance.
Smith & Wesson's fiscal 2024 results are a reflection of its strong brand positioning in a competitive market. The boost in net sales and gross margin in Q4 highlights a successful response to market demand and effective cost management. One key aspect to watch is the 11.8% year-over-year increase in full-year net sales to
Moreover, the company's focus on innovation and new product pipelines suggests a forward-thinking approach to sustaining market leadership. However, the marginal dip in non-GAAP net income indicates that while the top-line growth is strong, maintaining profitability amidst rising costs is a challenge. This nuanced financial landscape calls for careful monitoring of the company's ability to manage its expenses and sustain growth momentum.
Investors should also keep an eye on macroeconomic factors and regulatory changes that could impact the firearms industry. While Smith & Wesson's strategic moves are promising, external factors can play a significant role in shaping future performance.
- Q4 Net Sales of
$159.1 Million - Q4 Gross Margin of
35.5% ; Non-GAAP Gross Margin of35.6% - Q4 EPS of
$0.57 /Share; Q4 Adjusted EPS of$0.45 /Share - Q4 Adjusted EBITDAS Margin of
22.6% - Board of Directors Authorized
8.3% Increase in Quarterly Dividend
Maryville, Tennessee--(Newsfile Corp. - June 20, 2024) - Smith & Wesson Brands, Inc. (NASDAQ: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2024, ended April 30, 2024.
Fourth Quarter Fiscal 2024 Financial Highlights
Net sales were
$159.1 million , an increase of$14.4 million , or9.9% , over the comparable quarter last year.Gross margin was
35.5% compared with29.0% in the comparable quarter last year.GAAP net income was
$26.1 million , or$0.57 per diluted share, compared with$12.8 million , or$0.28 per diluted share, for the comparable quarter last year.Non-GAAP net income was
$20.9 million , or$0.45 per diluted share, compared with$14.6 million , or$0.32 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income include a gain related to the sale of certain intangible assets and other costs. For a detailed reconciliation, see the schedules that follow in this release.Non-GAAP Adjusted EBITDAS was
$36.0 million , or22.6% of net sales, compared with$30.3 million , or20.9% of net sales, for the comparable quarter last year.
Full Year Fiscal 2024 Financial Highlights
Net sales were
$535.8 million , an increase of$56.6 million , or11.8% , over the prior fiscal year.Gross margin was
29.5% compared with32.2% in the prior fiscal year.GAAP net income was
$39.6 million , or$0.86 per diluted share, compared with$36.9 million , or$0.80 per diluted share, for the prior fiscal year.Non-GAAP net income was
$42.6 million , or$0.92 per diluted share, compared with$43.3 million , or$0.94 per diluted share, for the prior fiscal year. GAAP to non-GAAP adjustments for income include a gain related to the sale of certain intangible assets, costs related to the move of our headquarters and significant elements of our operations to a new facility in Maryville, Tennessee, or the Relocation, an accrued legal settlement, and other costs. For a detailed reconciliation, see the schedules that follow in this release.Non-GAAP Adjusted EBITDAS was
$94.3 million , or17.6% of net sales, compared with$95.2 million , or19.9% of net sales, for the prior fiscal year.
Mark Smith, President and Chief Executive Officer, commented, "We delivered yet another strong quarter to close out fiscal 2024. I am very proud of the team's continuing discipline and execution against our strategic initiatives of strong brand messaging and marketing, best-in-class innovation, operational excellence, and business process efficiencies. Our results in fiscal 2024 again demonstrate that our relentless focus on these long-term strategies consistently reinforces our position as a market leader and delivers solid stockholder returns. While the summer months will be highly competitive as we navigate the traditionally slower season for firearms, we continue to expect healthy demand overall for firearms in fiscal 2025, and Smith & Wesson is well positioned to deliver another solid year of growth. With our deep pipeline of new products, leading brand, new state of the art facility now fully operational, strong balance sheet, and, most importantly, world-class dedicated employees, we are excited to continue delivering value for our stockholders."
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, "Our fourth quarter net sales increased by nearly
Conference Call and Webcast
The company will host a conference call and webcast on June 20, 2024 to discuss its fourth quarter and full fiscal 2024 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Interested parties in North America are invited to participate by dialing 1-877-704-4453. Interested parties from outside North America are invited to participate by dialing 1-201-389-0920. Participants should dial in at least 10 minutes prior to the start of the call. The conference call audio webcast can also be accessed live on the company's website at www.smith-wesson.com, under the Investor Relations section.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, certain non-GAAP financial measures, including "non-GAAP net income," "Adjusted EBITDAS," and "free cash flow" are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) a gain from the sale of certain intangible assets, (vi) spin related stock-based compensation, (vii) an accrued legal settlement, (viii) Relocation expense, and (ix) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About Smith & Wesson Brands, Inc.
Smith & Wesson Brands, Inc. (NASDAQ: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson® and Gemtech® brands. The company also provides manufacturing services including forging, machining, and precision plastic injection molding services. For more information call (800) 331-0852 or visit www.smith-wesson.com.
Safe Harbor Statement
Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, that (i) while the summer months will be highly competitive as we navigate the traditionally slower season for firearms, we continue to expect healthy demand overall for firearms in fiscal 2025 and Smith & Wesson is well positioned to deliver another solid year of growth and (ii) despite a competitive marketplace and inflationary impacts, we expect to grow both net sales and gross margin in fiscal 2025. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the Relocation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2024.
Contact:
investorrelations@smith-wesson.com
(413) 747-3448
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| As of: | ||||||
| April 30, 2024 | April 30, 2023 | |||||
| (In thousands, except par value and share data) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 60,839 | $ | 53,556 | ||
| Accounts receivable, net of allowances for credit losses of | 59,071 | 55,153 | ||||
| Inventories | 160,500 | 177,118 | ||||
| Prepaid expenses and other current assets | 4,973 | 4,917 | ||||
| Income tax receivable | 2,495 | 1,176 | ||||
| Total current assets | 287,878 | 291,920 | ||||
| Property, plant, and equipment, net | 252,633 | 210,330 | ||||
| Intangibles, net | 2,598 | 3,588 | ||||
| Goodwill | 19,024 | 19,024 | ||||
| Deferred income taxes | 7,249 | 8,085 | ||||
| Other assets | 8,614 | 8,347 | ||||
| Total assets | $ | 577,996 | $ | 541,294 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 41,831 | $ | 36,795 | ||
| Accrued expenses and deferred revenue | 26,811 | 20,149 | ||||
| Accrued payroll and incentives | 17,147 | 18,565 | ||||
| Accrued income taxes | — | 1,831 | ||||
| Accrued profit sharing | 9,098 | 8,203 | ||||
| Accrued warranty | 1,813 | 1,670 | ||||
| Total current liabilities | 96,700 | 87,213 | ||||
| Notes and loans payable, net of current portion | 39,880 | 24,790 | ||||
| Finance lease payable, net of current portion | 35,404 | 36,961 | ||||
| Other non-current liabilities | 7,852 | 7,707 | ||||
| Total liabilities | 179,836 | 156,671 | ||||
| Commitments and contingencies | ||||||
| Stockholders' equity: | ||||||
| Preferred stock, or outstanding | — | — | ||||
| Common stock, issued and 45,561,569 shares outstanding on April 30, 2024 and 75,029,300 shares issued and 45,988,930 shares outstanding on April 30, 2023 | 75 | 75 | ||||
| Additional paid-in capital | 289,994 | 283,666 | ||||
| Retained earnings | 540,660 | 523,184 | ||||
| Accumulated other comprehensive income | 73 | 73 | ||||
| Treasury stock, at cost (29,833,921 shares on April 30, 2024 and 29,040,370 shares on April 30, 2023) | (432,642) | (422,375) | ||||
| Total stockholders' equity | 398,160 | 384,623 | ||||
| Total liabilities and stockholders' equity | $ | 577,996 | $ | 541,294 | ||
SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| For the Three Months Ended April 30, | For the Years Ended April 30, | ||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Net sales | $ | 159,148 | $ | 144,777 | $ | 535,833 | $ | 479,242 | |||||||||
| Cost of sales | 102,646 | 102,815 | 377,740 | 324,705 | |||||||||||||
| Gross profit | 56,502 | 41,962 | 158,093 | 154,537 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 1,774 | 1,875 | 7,266 | 7,550 | |||||||||||||
| Selling, marketing, and distribution | 9,463 | 9,522 | 40,564 | 36,976 | |||||||||||||
| General and administrative | 19,886 | 12,738 | 65,484 | 61,604 | |||||||||||||
| Total operating expenses | 31,123 | 24,135 | 113,314 | 106,130 | |||||||||||||
| Operating income | 25,379 | 17,827 | 44,779 | 48,407 | |||||||||||||
| Other income/(expense), net: | |||||||||||||||||
| Other income/(expense), net | 6,496 | (2,154) | 6,672 | 150 | |||||||||||||
| Interest expense, net | (607) | 1,030 | (2,055) | (331) | |||||||||||||
| Total other income/(expense), net | 5,889 | (1,124) | 4,617 | (181) | |||||||||||||
| Income from operations before income taxes | 31,268 | 16,703 | 49,396 | 48,226 | |||||||||||||
| Income tax expense | 5,158 | 3,867 | 9,787 | 11,350 | |||||||||||||
| Net income | $ | 26,110 | $ | 12,836 | $ | 39,609 | $ | 36,876 | |||||||||
| Net income per share: | |||||||||||||||||
| Basic - net income | $ | 0.57 | |||||||||||||||
FAQ
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