Smith & Wesson Brands, Inc. Announces Intent to Divest Thompson/Center Arms™ Brand

Rhea-AI Summary

Smith & Wesson Brands, Inc. (NASDAQ: SWBI) announced on May 3, 2021, its intent to divest the Thompson/Center Arms brand as part of its strategic focus on core operations. This decision, according to CEO Mark P. Smith, aims to enhance production capacity and profitability without workforce reductions. Although no buyer has been identified, the divestiture is not expected to significantly impact Q1 fiscal year 2022 results. The company anticipates improved margins and reduced marketing costs, positioning itself to capture greater market share in the firearm industry.

Positive

• Divesting Thompson/Center Arms allows the company to focus on core Smith & Wesson brands.
• Expected increase in overall production volume and market share.
• Anticipated improvement in profit margins and lower marketing costs.

Negative

• None.

SPRINGFIELD, Mass., May 3, 2021 /PRNewswire/ -- Smith & Wesson Brands, Inc. (NASDAQ Global Select Market: SWBI), a leader in firearm manufacturing and design, today announced that it plans to divest its Thompson/Center Arms brand. This decision is part of the Company's broader strategic plan that will focus on its core Smith & Wesson brands.

Mark P. Smith, President and CEO of Smith & Wesson Brands, Inc., said, "Thompson/Center is a beloved hunting brand with a longstanding heritage, and we are committed to ensuring a smooth transition. Thompson/Center Arms' loyal consumers should rest assured that they will continue to receive the world-class firearms, accessories, and customer service support that the brand has been known for since its founding in 1965.  We remain fully committed to the hunting and long-range shooting market, and with this divestiture we will be able to now focus on these categories under our iconic Smith & Wesson brand.  Additionally, this will allow us to immediately redirect manufacturing capacity to increase overall production volumes, allowing us to gain additional market share while simultaneously increasing profitability."

At this time, a buyer for the Thompson/Center Arms brand has not been identified; however, the divestiture is not expected to have a material financial impact on the Company's first quarter fiscal year 2022 results and the Company expects the divestiture to be accretive to the Company's full year fiscal 2022 through higher overall production levels, increased margins, and lower marketing costs. The Company states that this decision will not result in a workforce reduction as its flexible manufacturing model allows it to repurpose capacity immediately to other areas without a headcount reduction.

Interested parties should contact the Company via email at  investorrelations@smith-wesson.com or by calling 413-747-3448.

About Smith & Wesson Brands, Inc.
Smith & Wesson Brands, Inc. (NASDAQ Global Select: 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®, M&P®, and Gemtech® brands.  The Company also provides manufacturing services, including forging, machining, and precision plastic injection molding services.  For more information call (844) 363-5386 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 our plan to divest our Thompson/Center Arms brand; our expectation that the divestiture will not have a material financial impact on our first quarter fiscal year 2022 results; and our expectation that the divestiture will be accretive to our full year fiscal 2022 through higher overall production levels, increased margins, and lower marketing costs. We caution that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include 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, 2020.

Contact: 
investorrelations@smith-wesson.com 
(413) 747-3448     

View original content:http://www.prnewswire.com/news-releases/smith--wesson-brands-inc-announces-intent-to-divest-thompsoncenter-arms-brand-301282504.html

SOURCE Smith & Wesson Brands, Inc.

FAQ

What is the recent announcement by Smith & Wesson Brands regarding Thompson/Center Arms?

Smith & Wesson Brands announced its plans to divest Thompson/Center Arms to focus on its core brands.

Will the divestiture of Thompson/Center Arms affect Smith & Wesson's finances?

The company expects the divestiture to have no material impact on Q1 fiscal year 2022 results, but it may improve full-year profitability.

What are the expected benefits of the Thompson/Center Arms divestiture for Smith & Wesson?

The divestiture is anticipated to increase production volumes, enhance margins, and lower marketing costs.

How is Smith & Wesson managing workforce impacts due to the divestiture?

Smith & Wesson stated that the divestiture will not lead to workforce reductions, utilizing its flexible manufacturing model.

When was the announcement regarding the divestiture made?

The announcement was made on May 3, 2021.