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I added a couple more of the 2017 $105 calls today at $4.00
Exploraciones Oceanicas Environmental Completes Filing of Documentation for the "Don Diego" Project
TAMPA, Fla., June 29, 2015 (GLOBE NEWSWIRE) -- Odyssey Marine Exploration, Inc. (NASDAQ:OMEX), a pioneer in the field of deep-ocean exploration, reported that Exploraciones Oceanicas (ExO), the Mexican company that controls the "Don Diego" offshore phosphate resource, has submitted the necessary documentation to continue the environmental evaluation process for the proposed dredging of phosphate sands as planned. Odyssey controls ExO through the company's 54% ownership in Oceanica Resources.
In addition, ExO, in coordination with the technical and environmental team at MINOSA, Odyssey's strategic investor, will brief newly elected government officials and community leaders in the region so they thoroughly understand the details of the project and the positive effects it will have on the Mexican agricultural industry, their state and local communities.
Odyssey has received the final $1.75 million loan disbursement from MINOSA, bringing the total amount advanced to $14.75 million.
Additional information about the "Don Diego" project, including a non-technical summary of the EIA is available at www.dondiego.mx.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (NASDAQ:OMEX) is engaged in deep-ocean exploration using innovative methods and state of-the-art technology for shipwreck projects and mineral exploration. Odyssey currently owns 54% of the outstanding shares of subsidiary, Oceanica Resources S. de. R.L. (Oceanica). Oceanica owns Exploraciones Oceanicas, S. R.L. de CV, the Mexican operating company with the mining concession containing the "Don Diego" phosphate deposit.
For additional details about Odyssey, please visit www.odysseymarine.com. The company also maintains a Facebook page at http://www.facebook.com/OdysseyMarine and a Twitter feed @OdysseyMarine. For additional details on Odyssey Marine Exploration, please visit www.odysseymarine.com.
Cautionary Note to U.S. Investors
The U.S. Securities and Exchange Commission (SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "ore" "measured" "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit us from including in our filings with the SEC. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable, and urged to consider closely the disclosures in the our Form 10-K which may be secured from us or from the SEC's website at http://www.sec.gov/edgar.shtml.
Forward Looking Information
Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission on March 16, 2015. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties, and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.
MEDIA CONTACT:
Liz Shows
Odyssey Marine Exploration, Inc.
(813) 876-1776 x 2335
lshows@odysseymarine.com
INVESTOR RELATIONS CONTACT:
Ron Both
Liolios Group, Inc.
(949) 574-3860
OMEX@liolios.com
Primary Logo
Source: Odyssey Marine Exploration, Inc.
I am sitting with 90% plus cash at the moment waiting for some sort of pullback. Maybe this will be it, but with Grandma Yellen printing money like there is no tomorrow I doubt it.
WooHoo!!!!! 59 points.
Suggestion, maybe implement a mulligan rule next year?
19 41 78 please
With the exception of a few million shares bought at the market open yesterday, anyone who bought and is holding shares the last 2 days is in the red.
But im sure everyone here is making money like crazy......
Yes you can, donate some money and become a "partner", donate enough and they even give you an award.
If you are going, check out the Park 75 restaurant in the Four Seasons Hotel next door, the crab soup is excellent.
Live not to far from it, Im very aware of what it is. Simple google search will turn up several other business's with same address.
Not saying its bad, but it is what it is which is a virtual office from Regus.
Its a Regus virtual office, not hard to verify.
For $129 bucks a month you can have one also.
That address is a virtual office, good luck finding anyone.....
I cashed out a good many positions this week, holding 90% cash.
We are way overdue for a market correction IMO
Agreed. I don't think there is any hope for the common shares but should be some trading opportunities.
I think its MDWCQ
Bought 500 shares @ $2.86 to start a position.
Sold $15.39 cleared a couple hundred bucks.
Took profits on my last 1000 shares at $16.59
Exploraciones Oceanicas Extends Environmental Review Time Frame to Provide Time for Newly Elected Government Officials to be Briefed on the "Don Diego" Project
TAMPA, Fla., June 22, 2015 (GLOBE NEWSWIRE) -- Odyssey Marine Exploration, Inc. (Nasdaq:OMEX), a pioneer in the field of deep-ocean exploration, reported that Exploraciones Oceanicas (ExO) the Mexican company that controls the "Don Diego" offshore phosphate resource has opted to extend the review period for their Environmental Impact Assessment (EIA) by resubmitting the EIA. Odyssey controls ExO through the company's 54% ownership in Oceanica Resources.
"This additional time is intended to allow ExO to brief the Governor, Congressmen, Mayors and community leaders in the Baja California Sur State who were elected June 7 so they can thoroughly understand the details of the project and the positive effects it will have on their state and communities. It is important to demonstrate how the phosphate sands extraction initiative will bring substantial economic benefits to their constituencies and help provide a stable supply of inexpensive fertilizer to the agricultural industry and entire nation with minimal environmental impact," commented Daniel de Narvaez, managing director of ExO in Mexico.
Under the Mexican legal process, the only mechanism to extend the EIA time frame, thereby allowing the briefings to occur after Monday, June 22, is to resubmit the EIA, which is expected to take place in the coming weeks.
"In making this decision, ExO is coordinating with the technical and environmental team at MINOSA, Odyssey's strategic investor, which has extensive experience and a successful track record of navigating environmental and regulatory procedures in Mexico. Their team will also manage the outreach program to address any questions from newly-elected officials and community leaders who will obviously have a significant interest in this initiative," noted Mark Gordon, Odyssey's president and chief executive officer.
Economic assistance, employment and extensive environmental monitoring and mitigation programs have already been developed and voluntarily proposed by ExO. These programs were designed to reinforce the company's commitment to good corporate citizenship and environmental stewardship. Local officials and industry leaders will be briefed and their ideas sought for maximizing the benefit of these programs on a local basis. These measures include significant job creation in the region; monitoring and protection programs for marine turtles, fish, benthic invertebrates, marine fauna, marine mammals including whales, and seabirds; education programs; and a seafloor restoration program.
As a demonstration of their continued support, MINOSA has accelerated the disbursement of the final debt advance to Odyssey, bringing the total amount advanced to $14.75 million.
Additional information about the "Don Diego" project, including a non-technical summary of the EIA is available at www.dondiego.mx.
About Odyssey Marine Exploration
Odyssey Marine Exploration, Inc. (Nasdaq:OMEX) is engaged in deep-ocean exploration using innovative methods and state of-the-art technology for shipwreck projects and mineral exploration. Odyssey currently owns 54% of the outstanding shares of subsidiary, Oceanica Resources S. de. R.L.(Oceanica). Oceanica owns Exploraciones Oceanicas, S. R.L. de CV, the Mexican operating company with the mining concession containing the "Don Diego" phosphate deposit.
For additional details about Odyssey, please visit www.odysseymarine.com. The company also maintains a Facebook page at http://www.facebook.com/OdysseyMarine and a Twitter feed @OdysseyMarine. For additional details on Odyssey Marine Exploration, please visit www.odysseymarine.com.
Cautionary Note to U.S. Investors
The U.S. Securities and Exchange Commission (SEC) permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this press release, such as "ore" "measured" "indicated," and "inferred" "resources," which the SEC guidelines strictly prohibit us from including in our filings with the SEC. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that part or all of the inferred mineral resource exists, or is economically or legally mineable, and urged to consider closely the disclosures in the our Form 10-K which may be secured from us or from the SEC's website at http://www.sec.gov/edgar.shtml.
Forward Looking Information
Odyssey Marine Exploration believes the information set forth in this Press Release may include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the Securities and Exchange Commission on March 16, 2015. The financial and operating projections as well as estimates of mining assets are based solely on the assumptions developed by Odyssey that it believes are reasonable based upon information available to Odyssey as of the date of this release. All projections and estimates are subject to material uncertainties, and should not be viewed as a prediction or an assurance of actual future performance. The validity and accuracy of Odyssey's projections will depend upon unpredictable future events, many of which are beyond Odyssey's control and, accordingly, no assurance can be given that Odyssey's assumptions will prove true or that its projected results will be achieved.
MEDIA CONTACT:
Liz Shows
Odyssey Marine Exploration, Inc.
(813) 876-1776 x 2335
lshows@odysseymarine.com
INVESTOR RELATIONS CONTACT:
Ron Both
Liolios Group, Inc.
(949) 574-3860
OMEX@liolios.com
It is done, Hale is one of largest creditors, just look at United Silver (USC) to see what is in store.
ZERO but will take it while to get there and should be trading opportunities along the way.
Only thing I can think of is maybe GDXJ rebalancing went wrong? Several other small mining stocks did the same thing.
Damn, dipped to .32. what the heck is going on?
Im bidding .35 for 10K more shares after hours, hope its just a fluke.
Rubio 95% for me as well, Santorum, Walker ,Paul and Cruz were all 87% for me.
Bernie 11% which is kinda scary. LOL
I found myself using one of the "other stance" answers for most questions.
Very odd activity coming into the close, spiked to .55 than down to .45 weird. noticed some other metal stocks acted the same?
RBC Capital Upgrades Smith & Wesson Holding (SWHC) to Outperform
June 19, 2015 6:25 AM EDT
RBC Capital upgraded Smith & Wesson Holding (NASDAQ: SWHC) from Sector Perform to Outperform with a price target of $21.00 ..
Conference call transcript.
http://ir.smith-wesson.com/phoenix.zhtml?c=90977&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEwMzQyNzU1JkRTRVE9MCZTRVE9MCZTUURFU0M9U0VDVElPTl9FTlRJUkUmc3Vic2lkPTU3
JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you, Liz. Good afternoon, everyone, and thanks for joining us. With me on today’s call is Jeff Buchanan, our Chief Financial Officer. Later in the call, Jeff will provide a recap of our financial performance, as well as our guidance for FY16 We are very pleased with our FY15 results which reflected strong year-end performance, despite a soft environment for consumer firearms that existed earlier in the fiscal year.
During the year, we strengthened our supply chain with the vertical integration of Deep River Plastics or DRP, our principal injection molding supplier. We also moved further into the hunting and shooting accessories arena, a key part of the overall firearms market, by acquiring Battenfeld Technologies or BTI. Both of these acquisitions were accretive to margins. Moreover, the BTI acquisition allowed us to establish two divisions within our Company, the firearms division and the accessories division.
Lastly, we demonstrated our ability to wisely manage our balance sheet throughout the year, which Jeff will discuss later on today’s call. Before he does that, let me provide a few highlights from the fourth quarter. Total sales of $181 million set a new quarterly record, and exceeded the high end of our guidance range. The very slight decline in firearms revenue, which was anticipated, was more than offset by sales in our new accessories division.
In firearms, handgun sales of $120.7 million was slightly down by 2.8%. However, we continue to see order strength for our popular M&P Shield, SDVE and BODYGUARD 380 pistols, demonstrating the ongoing consumer preference for our concealed carry firearms. Long gun sales of $34.2 million were up 5%, and was supported by strong sales of our M&P 15 Sport, our opening price point modern sporting rifle, which provides a great value to consumers. Our M&P 15 Sport is the industry-leading rifle in this category.
Year-over-year adjusted mix for the fourth quarter was roughly flat, and our unit sales into the consumer channel tracked that result closely. Since then, May adjusted mix rose 4.7% year-over-year, posting the second strongest May ever, with handgun checks up by just over 10%.
With regard to market share, we rely on our own analysis and key distributor feedback. Both of those sources continue to indicate that our products remain popular with consumers, and supports our belief that we remained the market leader in the handgun and the modern sporting rifle categories during the fourth quarter.
Distributor inventory of our products declined in the quarter by about 6,000 units to 112,000 units at the end of Q4, which was well below our target threshold of eight weeks of sales cover. Since then, distributor units have increased to above eight weeks of sales cover, which is to be expected since inventories need to increase in preparation for the busy season of consumer activity that typically commences in September. As always, we work closely with our wholesaler partners to ensure their inventory levels are appropriate for the current period.
Since we acquired BTI, our new accessories division has experienced 27% year-over-year growth, while delivering excellent gross margins. We are very happy with this new division, which provides us with a broad, established platform for organic and inorganic growth in hunting and firearm accessories. Before I share more detail, Jeff will review our financial results.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Thanks, James. Revenue for the full year was $551.9 million, which was down 11.9% from the prior year. This expected decline reflected the return to a more normalized consumer firearm market, following an earlier surge in demand. Revenue for Q4 was a record $181 million, an increase of 6.2% over last year.
For the fourth quarter, firearm division revenue was $166.4 million, and accessories revenue was $14.6 million. The gross margins were 37.1% for the fourth quarter, and 35.3% for the full year. On a non-GAAP basis, gross margins were 38.4% in Q4, and 36.1% for the full year. Gross margins were lower than last year, due mostly to reduced volumes and mix changes. Nonetheless, we are pleased with our fourth quarter gross margin as it falls within our targeted range of 37% to 41%.
Operating expenses in the quarter were $29.8 million or 16.5% of revenue. Total fourth quarter operating expenses rose due to the inclusion of BTI expenses, including $2.4 million in purchase accounting amortization. On a non-GAAP basis, operating expenses were $27.4 million or 15.2% of revenue. Operating expenses for the year were 19.1% of revenue. Despite adding BTI, full year operating expenses declined, primarily due to decreases in incentive compensation and lower IT expenses. On a non-GAAP basis, full year operating expenses were 18% of revenue.
Operating margin was 20.6% for the fourth quarter, and 16.2% for the full year. On a non-GAAP basis, operating margin was 23.3% in Q4, and 18.1% for the full year. Our EPS in Q4, it came in at $0.40, as compared with $0.44 last year. Non-GAAP EPS, it came in at $0.45, above the top end of our updated guidance range. Our full year EPS was $0.90, and on a non-GAAP basis EPS was $0.12 higher at $1.02.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Adjusted EBITDAS in Q4 was $50.8 million for a 28.1% EBITDAS margin. Our adjusted EBITDAS margin was 24% for the full fiscal year. As we have noted before, our goal is to maintain EBITDAS margins above 20%.
So now I’ll turn to the balance sheet. A few quarters ago, we set a goal to reduce inventory in our firearm division to $75 million by the end of FY15, and we greatly exceeded that goal. In fact, we reduced firearm division inventory in the last two quarters by $31.8 million, down to a balance of $67.4 million. And we did this, while simultaneously reducing our inventory in the channel. Including BTI, our total internal inventory at year-end was $76.9 million. Our focus on reducing the inventory helped us drive strong operating cash flow of $84.9 million in Q4, and $114.8 million for the full year. Full year capital expenditures excluding payments made for acquisitions were about $28 million. The result was free cash flow for the year of $87.6 million, with $5.5 million of that contributed by BTI.
Based on the strength of our free cash flow, we recently took steps to optimize our capital utilization flexibility and reduce ongoing interest expense. During the fourth quarter, we used $100 million of our cash to fully repay the amount we had borrowed on our revolving line to purchase BTI. Even with that repayment, we ended the quarter with $42.2 million in cash.
Having paid down the revolver, now leaves us available the full capacity of the $175 million line, which we renewed on June 15 with a five-year term. And on that same date, we also entered into a new $105 million unsecured five year term loan A. The proceeds from that term loan were used to redeem our $100 million 5-7/8% notes.
Just for reference, the last remaining tranche of our senior notes have a balance of $75 million, an interest rate of 5%, a call date in one year, and a termination date in three years. James?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thanks, Jeff. Adjusted mix during our fourth quarter and now into May, indicate to us that consumer demand continues to trend to its normal seasonal pattern. In our fourth quarter, the handgun components of mix was up 3.5%, a positive trend since handguns comprise three-quarters of our firearms revenue. We are encouraged to see these seasonal consumer buying trends continue, particularly as we enter the period during which channel inventories typically rise in advance of higher consumer demand in the fall season.
As a consumer-centric Company, new products are an important part of our strategy. We continue to expand our product offering in the fourth quarter. At the NRA convention in April, we unveiled new line extensions that feature a specialized finish for several of our M&P pistols, and we tapped into the trend for suppressors by introducing a M&P 22 compact with a threaded barrel.
In addition, our products continue to win accolades, and both divisions received NRA Golden Bullseye awards, firearms for our Smith & Wesson Model 69 44 magnum revolver, and accessories for our Caldwell Mag charger. We are proud of these product awards, and we are excited about the new products that we have in the pipeline for the next three years.
With this in mind, for FY16 we have slated $50 million for capital expenditures. Roughly half of that amount will cover our maintenance CapEx requirements. The balance will fund enhancements to IT, manufacturing flexibility, capacity increases, and most importantly, new product development.
Among the new products we are developing is our next-generation M&P polymer pistol, which we plan to submit in response to the Army’s solicitation for a modular handgun system, for replacement for their standard issue sidearm. By way of an update, the Army has now scheduled a fourth Industry Day in July, and they have issued a draft RFP which we are reviewing. As we’ve said before, the opportunity is likely to be up to 500,000 units or so over a multi-year period and, of course, we will team up on it with our partner, General Dynamics.
Now I would like to turn to an update on our new accessories division. As we consider our accomplishments in FY15, the acquisition of BTI is chief among them. It fits firmly within our core firearms space, and it provides us with an opportunity to recognize revenue synergies with our firearms division. As a result, we expect that the accessories division will deliver double-digit annual revenue growth.
This is the first full quarter for our accessories division, and we are very pleased with the results. Revenue is right on track and poised to grow in the coming year. Gross margins have also come in as planned, exceeding 50% excluding the impact of acquisition accounting. While this is currently only 10% of our overall revenue, it has the potential to deliver strong top line growth, both organic and inorganic, as well as very attractive gross margins.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Before Jeff provides the financial outlook, I want to take a moment to explain the seasonal patterns that occur in our business in a normalized environment. We are often asked about this seasonality by investors and analysts. So it’s a worthwhile topic, especially since we expect those patterns to continue in FY16. The key driver of our seasonality is, of course, consumer purchasing behavior, which changes throughout the year. For us, seasonality is also driven by the number of production and shipping days that we have in each quarter, and those are impacted each year by two scheduled factory shutdowns, one in the summer and one in the winter.
Given that backdrop, let me walk you through the features of each fiscal quarter. Our first quarter is May through July. This is seasonally our slowest period, when firearm consumers tend to pursue other outdoor activities, so foot traffic is much lighter at retail. During this period, we and our distributors and key retailers start to build inventory in preparation for the fall season. During the first quarter, we incur one week of our annual summer shutdown for vacations and plant maintenance. As a result, we expect 59 production and shipping days in Q1 of FY16.
Our second quarter is August through October. The beginning of Q2 has the same summertime features and seasonal slowness as Q1, and our inventory continues to build in the early part of the quarter. Again, in preparation for the fall.
By September, foot traffic begins to increase as the fall season commences, and we generally see this demonstrated in mix results which accelerate significantly in October. We also incur the second week of our summer shutdown at the beginning of Q2. As a result, we expect 59 production and shipping days in Q2 of FY16.
Our third quarter is November through January. It is the busiest quarter for retail foot traffic as measured by NICS background checks. On average, over the past five years, about 31% of each year’s total NICS checks occurred within our third quarter. Q3 includes the busy holiday season, which incorporates Black Friday and Christmas shopping.
The third quarter contains most of our industry’s order rating shows, as well as SHOT Show, where we often launch new products into the market. Because Q3 is our shortest in terms of production and shipping days, it is important that we have built up adequate inventory to support this quarter and the quarter ahead. We expect 56 production and shipping days in Q3 of FY16.
Lastly, our fourth quarter is February through April, and it is typically our strongest quarter. Retail foot traffic is still heavy in this quarter. On average, over the past five years, 27.5% of NICS checks occurred within our fourth quarter.
In addition, shipments are at their highest level, fueled by orders from shows and new product launches in the prior quarter. And importantly, Q4 contains 10% to 20% more production and shipping days than each of the other quarters. We expect 65 production and shipping days in Q4 of FY16.
The annual revenue pattern that results from all of this is as follows. Q1 is typically sequentially down from the prior Q4. Q2 is generally flattish to Q1. Q3 rises slightly, and Q4 is significantly our strongest quarter. In a normalized environment, this pattern occurs more often than not, and it is the pattern that we are currently expecting for FY16. So with this in mind, I’ll ask Jeff to provide our financial outlook.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Thanks, James. For full year FY16, we expect revenue to be between $605 million and $615 million, and non-GAAP EPS to be between $1.02 and $1.07. That non-GAAP EPS would exclude $0.05 for expenses relating to the early redemption of our 5-7/8% notes, and $0.12 for acquisition-related amortization. Therefore, we expect GAAP EPS of between $0.85 and $0.90.
For the first quarter of FY16, we expect revenue to be between $140 million and $145 million. We expect first quarter non-GAAP EPS to be between $0.21 and $0.23. That non-GAAP outlook excludes $0.05 for the expenses related to the early redemption of the 5-7/8% notes, and $0.03 for acquisition-related amortization. So the GAAP EPS outlook for Q4 is between $0.13 — for Q1, is between $0.13 and $0.15. All of these estimates are based on our current fully diluted share count of 55.4 million shares and the expected tax rate of 37%. James?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you, Jeff. Everyone at Smith & Wesson did an excellent job in FY15, navigating the post-surge environment, delivering solid results in a soft firearms market, and making important progress on our strategic plan. We continue to believe our industry is in the midst of a long-term underlying growth trend, and we look forward to growing our Company and its share of our market. With that, operator, please open up the call for questions from our analysts.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
QUESTION AND ANSWER
Operator
(Operator Instructions)
Our first question comes from the line of Cai von Rumohr with Cowen and Company. Please proceed.
Cai von Rumohr - Cowen and Company - Analyst
Yes. So thank you very much. So for the sales numbers, you’ve got, if could you give us a little bit of help in terms of margins? The margins looked lower than I think many of us might have thought. So maybe give us some color on where you [would] expect operating expenses, and where you expect gross margins? Thanks.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Sure. I guess, just in general for the year, for 2016, typically we don’t give detail, but we do give our range, and we do believe we’ll be at the low end of our expected range.
Cai von Rumohr - Cowen and Company - Analyst
The low end of your expected range in terms of what? Operating expense as a —?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Well, I am talking about our gross margin. So we have — what we’ve said is our target, our gross range is 37% to 41%, and we think we’re going to be in that range.
Cai von Rumohr - Cowen and Company - Analyst
Okay.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
For gross (multiple speakers).
Cai von Rumohr - Cowen and Company - Analyst
I guess, my question would be, you did 38.4% here. You’re going to have a full year of Battenfeld which has a 50%-plus margin. Looks like demand is a little bit better. How come only the 37% area?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Well, I mean, what we’ve talked about a lot in the past is that, our gross margins are impacted by product mix, as well as absorption. And so, the product mix is a big driver. Because in a normalized environment right now, some of the high demand products are ones that may not have as high a gross margin is an example. There’s also — it’s a heavy promotional environment right now, with a lot of incentives (multiple speakers).
James Debney - Smith & Wesson Holding Corporation - President & CEO
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Yes, certainly, Cai, we’re doing a lot of promotions. As you know, we want to [create] the business by taking market share. In a normalized environment, you have to be out there with the normal promotional plans in place, that you’re executing. It’s very important to us. So our plans are at the moment, to remain pretty aggressive.
As you know, we went through Q3 and the beginning of Q4 at the wholesaler shows being very aggressive, and we intend to continue doing that. As you know, the strength of our gross margins allow us to do that. We’re going to continue doing that. That’s the current plan.
Now, if the market is better, then we can ease up that promotional activity. So at least we have that in our back pocket. But our plan is to remain very aggressive at the moment, which I think is a good thing.
Cai von Rumohr - Cowen and Company - Analyst
Yes. Okay. Great (multiple speakers).
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Cai, I was going to talk about the operating margin, because I think you had a question about OpEx too, is that right?
Cai von Rumohr - Cowen and Company - Analyst
Yes, correct.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
So OpEx is up a bit this year, obviously, because we have a full year of the Battenfeld. And now so I’ll — but I’ll talk on a non-GAAP basis, so I’ll exclude the amortization from Battenfeld, and talk about that — we took out a lot of — or we didn’t — we’re going to have incentive expenses in 2016 that we didn’t have in 2015. So I think that’s probably the biggest driver of the increased OpEx, other than just adding BTI for a full year.
Cai von Rumohr - Cowen and Company - Analyst
When you say incentive expenses, what do you mean? You mean bonuses — (multiple speakers)?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
I’m talking about employee incentive expenses. So the fact that, basically — like none were paid in 2015, and we have a — p planned incentive expenses in 2016.
Cai von Rumohr - Cowen and Company - Analyst
Got it. I will let someone else go. Thank you very much.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thanks, Cai.
Operator
The next question comes from the line of Andrea James with Dougherty & Company. Please proceed.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Andrea James - Dougherty & Company - Analyst
Thanks for taking my questions. Can you give us a sense of the market share trends that you’re seeing relative to your own expectation? And maybe some of the promotions you’ve done, and how they might be driving some of those market share trends?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Yes, sure. I can give you some highlights, in terms of what we’re seeing. As you know, we set out with our promotional activity back in, I am talking back now in FY15, Q3, as we started to enter the order [writing] shows. We said that we were going to be aggressive, because we were going to regain any share points that we may lose, or that we had observed that we lost. I think our promotional activity worked, and we certainly regained what we had lost. And I think it’s going a long way now to helping us think about growing the business as we go into FY16.
And as I said earlier to Cai, we’re about taking share, as well as growing with an expanding market. I think we’re very strongly positioned to do that as we think about 2016, which is very exciting. And given the new products that we have in the pipeline as well, I think it’s going to help us even more take more market share and strengthen our position.
Andrea James - Dougherty & Company - Analyst
Thanks. And just maybe one and-a-half more. What are your thoughts on renewing the revolver, and the use of capital outside the CapEx that you already outlined?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Yes. Well, actually, our revolver has been renewed.
Andrea James - Dougherty & Company - Analyst
Yes.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
So we have — it’s a five year term on it, and we have no outstanding balance. So we can draw on it anytime we want.
Andrea James - Dougherty & Company - Analyst
Yes, and why renew it? I’m just curious, are you thinking — I mean, are you continuing to be acquisitive? I mean, is that like a definite strategy? Go ahead.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Yes. Well, our focus on our balance sheet is to create flexibility. So that, yes, if an acquisition comes along, that we want to act on quickly, we can. If we want to invest in our business in — or if we want to buy back shares based on valuation metrics, we can do that.
So our focus — in addition to lowering our overall weighted average cost of capital, which we’ve kind of looked a lot at in the last couple years, we’re looking a lot right now on our ROC, return on capital. And we just need to have a flexible balance sheet with an available line of credit. And then, the term loan A was done to basically to fix the interest rates, and lower the interest rate, because it was at 5 7/8 before. And it gives us a longer term, since the loan that we took out was coming due in two years.
Andrea James - Dougherty & Company - Analyst
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Thanks. And then, just another one. Your business has been hard to forecast, at least over the last couple years, really hard to forecast. And I am just wondering, have you guys changed some of your forecasting function, or the data you’re relying upon? And then also, is it just going to get easier from now on, just because of the market normalizing as well? I’m just curious about forecasting, how you came up with your guidance? Thank you.
James Debney - Smith & Wesson Holding Corporation - President & CEO
I would certainly agree that forecasting is less challenging, now that the environment has normalized. In terms of what we’ve done, I’ve mentioned this before. We reached even more deeply out into the market to understand what is happening. So we’ve got more data points than ever before.
We incorporate that into our very robust sales and operations planning process, and we obviously use those metrics as key data points to tell us where we think the market is going by product category. That helps us schedule the plant, helps us collaborate with our strategic partners, wholesalers and big boxes such as Cabella’s. Also helps us drop in, when we believe that we’re going to launch our new products and so on, and also major strategic promotional activity as well. So I would say, our plans are a lot — and our plans and our understanding of what we’re forecasting are much better than ever before.
Cai von Rumohr - Cowen and Company - Analyst
Thanks so much.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you.
Operator
The next question comes from with Stephen Cahall with Royal Bank of Canada. Please proceed.
Stephen Cahall - RBC Capital Markets - Analyst
Yes, thank you. Maybe a first question just on the segments. I thought the sales cadence was very helpful. But I was wondering if you could maybe give us a sense of what your organic growth rate in the firearms is expected to be, for maybe just for the year, and something more granular would be great as well?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Yes, we really haven’t broken out the forecast by our segments yet. It’s possible we might like do that in 2017. But we have a new division here, and at this point, we’re not going to go ahead and break it out. We have said in general, that the long-term prospects we think for the firearm industry is in the 6% to 10% range. And we’ve also said that Battenfeld itself has grown very strongly, in excess of 20% over the last multiple years. So I think we basically expect those trends to continue.
Stephen Cahall - RBC Capital Markets - Analyst
Okay, then, maybe to ask it a slightly different way. I think, based on what you said it would imply that, this year we’re going to see firearms growth kind of implied in the guidance that is well below the recent trend, or at least certainly below the recent trend in NICS, and certainly in handgun NICS. So as we just think about that, is that inventory?
Is that the aggressive pricing you talked about? Is it mix? Is it just combination of those things? And is there any one area you’d emphasize there?
James Debney - Smith & Wesson Holding Corporation - President & CEO
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Still, yes, I mean, there remains, in terms of competitors’ inventory, there’s still some competitors’ inventory out there for sure. But I think mostly that is out of the way now, and we’re at the normalized environment. I would say that as we’re thinking ahead and forecasting the years to Andrea’s point earlier on, we’re pulling on a lot of data points, and we’re fairly confident, more confident than we’ve ever been before, in terms of our forecast, given both our improvements and our internal sales and operations planning process, and what we’re experiencing now in the market.
Stepping back, you have to remember, we are a brand of choice when it comes to the consumer. We have one of the strongest product portfolios out there so, and we have highly motivated team here who really does understand the market. So very strongly positioned, lots of good things going on from the consumer channel, to the professional channel.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
And I just would add one additional thing. In doing our outlook, and relating back to your question of NICS and the difference, is we do look at our market share. And when we look at 2016, we are forecasting to equal or maintain our market share. So our forecast is based on our belief as to what our share of the market will be, and that we’re going to maintain or increase that share.
Stephen Cahall - RBC Capital Markets - Analyst
Great. Thank you. And then, a couple questions on the cash. So number one, I was wondering if the CapEx guidance that you gave for the year, is this kind of a normal year in terms of run rate for CapEx, either absolute or to sales? Or is there anything that’s particularly notable this year, that we could see CapEx coming down in future years?
And then, second question on cash, it looks to me like even with the retirement of debt, you’re just going to be very underleverred. You’re going to have a lot of cash on the balance sheet. So how are you thinking about what you might use that cash for and timing?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Okay. I’ll take the first part. I would say, our normal range for CapEx that we would expect is somewhere between $40 million to $50 million. It’s largely dependent on our capacity increases and our new product launches.
That’s a big factor. Obviously, when we’re launching new products, we are targeting white space, i.e. we don’t want to cannibalize our existing product portfolio. So that will also mean that we need to increase our base capacity, as well as invest in the development of the new product, and invest in the tooling required to manufacture the new product as well.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Yes, and I just would follow up on that. So what we’ve said, is the maintenance CapEx, that is if we’re not adding capacity, we’re not adding new products, is in the $25 million range. So the - anything above that is either a specialized IT project, or new product introduction, or capacity increases generally. The second part of your question was?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Best use of cash.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Best use of cash, right. So, yes, I mean, based on our outlook, this Company does a good job of producing cash, and what we basically do is always analyze the best use of cash. Our focus is really on two things. One is lowering our weighted average cost of capital, so that we can have a lower hurdle rate for the various investments that we want to do, whether it’s inside the Company organically, or outside the Company, inorganically.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
So we would prefer to invest in ourselves first, either inorganically or organically in the firearms industry. But to the extent that we think we have excess cash, then we probably would lean more towards a stock buyback at this stage versus any debts payback. Just as an example, I do agree that we’re very - our leverage is very low. So we took the $100 million of the senior notes that are due in two years, did a term loan A, and basically like pushed that maturity out to five years. So again, keeping the debt on the balance sheet, because it’s inexpensive.
We paid down the line, just because we had the cash. And we’re not going to use it immediately, there’s no point in paying interest. But we still have the $175 million available any moment. So again, in sum, we would rather invest in ourselves in projects that return, like meet our hurdle rate. And if that doesn’t work, then we probably would like move into a stock buyback (multiple speakers).
Stephen Cahall - RBC Capital Markets - Analyst
A final technical one, and then I’ll pass over to someone. How are you thinking about the call that you have on the bond this year, in terms of the attractiveness, and since you focused on reducing the cost of capital, as a high priority?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
You’re talking about the bonds that are due in one year?
Stephen Cahall - RBC Capital Markets - Analyst
I think you said they were callable in a year, if I heard that correctly?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Yes. Yes, that’s right. The call premium is usually half of the interest rate. So it’s 2.5% in one year, then the year after that, there would be no call premium.
Stephen Cahall - RBC Capital Markets - Analyst
Thank you so much.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Sure.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you.
Operator
(Operator Instructions)
The next question comes from the line of Chris Krueger with Lake Street Capital Markets. Please proceed.
Chris Krueger - Lake Street Capital - Analyst
Good afternoon, guys.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
James Debney - Smith & Wesson Holding Corporation - President & CEO
Hi.
Chris Krueger - Lake Street Capital - Analyst
Hi. Just shifting gears over to the BTI business. James, you went over the seasonality of the firearms industry pretty well and pretty clearly. How should we look at seasonality for that business?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
That basically is a bit not - it doesn’t have as a steep ramp in our Q4. It’s sort of flatter, because it’s got a lot of sales, pre-fall, hunting and Christmas because you can buy those products online. And not as much goes through a distribution and order writing shows in our Q4. So in all, like on all, I’d say it’s a flatter profile.
Chris Krueger - Lake Street Capital - Analyst
Okay. And then, just one other question on BTI. I know prior to the acquisition that they had grown through a combination of their organic growth rate, as well as variety of acquisitions of I think quite a few different brands. Is that activity continuing, and is there a pipeline of potential acquisitions within that business that we should think about?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Yes. We’re continually looking in both divisions, to be perfectly honest. As I said, we’re very, very pleased with the acquisition of BTI. It’s a wonderful addition to the Smith & Wesson family. So we’re out there looking again.
Many opportunities out there, but as you know, we have a very high bar. We set that bar very high, and we’re also very cautious. So we do a lot of evaluation.
But we’re not just looking in terms of other firearms-related businesses. We’re also looking in terms of vertical integrations as well, so there’s other manufacturing processes that we’re heavily reliant on. Similar to how we were very reliant on plastic injection molding, which as everybody knows now, we have DRP. So we now own that technology.
So we’re out there, looking for other opportunities in vertical integration, which are our lowest risk acquisitions as well. Both divisions act as their own platform for little roll-ups, in terms of acquisitions, going back to more branded firearms businesses, firearms-related businesses. As you know, we look mostly for the smaller, lower risk tuck-in acquisitions for each of those platforms, which again, the lowest risk and also the lowest price in terms of the multiple of [EBITDA].
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
And Chris, I would just add one additional thing. BTI didn’t really do that many acquisitions. Most of its growth over the last 10 years has come organically. They have done a few small brands, but the great majority of the brands - the great majority of the brands that they have, they developed themselves.
Chris Krueger - Lake Street Capital - Analyst
Okay. Good to know. That’s all I got. Thank you.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you.
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
Operator
Our next question is a follow-up from Andrea James with Dougherty & Company. Please proceed.
Andrea James - Dougherty & Company - Analyst
Thanks. James, I wrote down the numbers you gave of your revenue subsets for Q4, and I’m not - they’re not adding up to $181 million. I just want to make sure I didn’t miss something. Can you go over that again?
James Debney - Smith & Wesson Holding Corporation - President & CEO
Sure.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
I’ll do it right now if you want.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Yes, go ahead, Jeff.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
Well, so we had - total firearms was $166.4 million. Accessories was $14.6 million.
Andrea James - Dougherty & Company - Analyst
And then you had given a handgun, long gun breakdown.
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
So handguns were $120.7 million. Long guns are $34.2 million. And we have this thing called other, of $11.5 million.
Andrea James - Dougherty & Company - Analyst
Ah, and that $11.5 million is what I was missing. What is that?
Jeff Buchanan - Smith & Wesson Holding Corporation - CFO
That is our own accessories business in Thomson, handcuffs, some B2B manufacturing processes that we do for other companies. It’s just a hodgepodge of - it’s also Deep River Plastics sells its services, like B2B. So it’s a hodgepodge of stuff.
Andrea James - Dougherty & Company - Analyst
Okay. Great. Will you ever put your own accessories stuff into the Battenfeld, like roll that all up together?
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JUNE 18, 2015 / 09:00PM GMT, SWHC - Q4 2015 Smith & Wesson Holding Corp Earnings Call
James Debney - Smith & Wesson Holding Corporation - President & CEO
Absolutely. We’ve declared that as well, already that we are in transition mode right now. So our Thomson center accessories business, M&P accessories such as mags for M&P polymer pistols magazines are in the process of being transferred over right now to the accessories division.
The reason for doing that is obviously, so that both divisions can maintain strong focuses on what they should be focused on. And also, we have an extremely talented team at Battenfeld who run the accessories division right now, and we feel that they can do a much better job of growing that part of the business than the firearms division has done. Simply because, firearms division needs to focus on growing firearms.
Andrea James - Dougherty & Company - Analyst
Helpful. Thank you.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you.
Operator
There are no further questions in queue at this time. I would now like to turn the call back over to James.
James Debney - Smith & Wesson Holding Corporation - President & CEO
Thank you, operator. Please note that we will be participating in the Credit Suisse conference in New York on September 17, and hope to see some of you there. Thank you all for joining us. We look forward to speaking with you next quarter.
Operator
Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.
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Smith & Wesson Holding (NASDAQ:SWHC): FQ4 EPS of $0.45 beats by $0.10.
Revenue of $180.99M (+6.2% Y/Y) beats by $5.5M.
Not sure why its down after hours
SPRINGFIELD, Mass., June 18, 2015 /PRNewswire/ -- Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC), a leader in firearm manufacturing and design, today announced financial results for the fiscal fourth quarter and full fiscal year ended April 30, 2015.
Fourth Quarter Fiscal 2015 Financial Highlights
Quarterly net sales were a record $181.0 million, an increase of 6.2% from the fourth quarter last year. Firearm division net sales of $166.4 million decreased by 2.4% from the comparable quarter last year, which was more than offset by $14.6 million of net sales related to the company's new accessories division, which was established in connection with the acquisition of Battenfeld Technologies, Inc. (BTI) on December 11, 2014.
Quarterly GAAP income from continuing operations was $21.9 million, or $0.40 per diluted share, compared with $24.9 million, or $0.44 per diluted share, for the fourth quarter last year.
Quarterly non-GAAP income from continuing operations was $24.9 million, or $0.45 per diluted share, compared with $26.5 million, or $0.47 per diluted share, for the fourth quarter last year.
Quarterly non-GAAP Adjusted EBITDAS from continuing operations was $50.8 million, or 28.1% of net sales.
Full Year Fiscal 2015 Financial Highlights
Full year net sales totaled $551.9 million, a decrease of 11.9% from last year. Firearm division net sales were $531.2 million, a decrease of 15.2% from last year, and accessories division net sales were $20.6 million. The accessories division consists entirely of the recently acquired BTI. Therefore, the accessories division had no sales in the prior year and less than five months of net sales in fiscal 2015.
Full year GAAP income from continuing operations was $49.8 million, or $0.90 per diluted share, compared with $88.6 million, or $1.47 per diluted share, last year.
Full year non-GAAP income from continuing operations was $1.02 per diluted share, compared with $1.55 per diluted share last year.
Full year non-GAAP Adjusted EBITDAS from continuing operations totaled $132.5 million, or 24.0% of net sales.
James Debney, Smith & Wesson Holding Corporation President and Chief Executive Officer, said, "We are very pleased with our fiscal 2015 results, particularly our fourth quarter performance. During fiscal 2015, we marked a number of achievements as we remained focused on executing our long-term strategy. We moved further into the hunting and shooting accessories market by acquiring BTI and we strengthened our supply chain with the vertical integration of our principal injection molding supplier. Both acquisitions were accretive to gross margins. Our focus on gross margins resulted in a 37.1% gross margin for the fourth quarter (38.4% when the 1.3% accounting-related impact of the BTI acquisition is excluded), which was within our targeted range. Looking forward, we anticipate further sales and earnings growth in fiscal 2016 as we continue to position our company for long-term success."
Jeffrey D. Buchanan, Smith & Wesson Holding Corporation Executive Vice President and Chief Financial Officer, said, "Earlier in the fiscal year, we had stated that a company focus was to reduce inventories and we succeeded in reducing those inventories by $20.2 million during the fourth quarter. As a result, robust cash flow from operations during the fourth quarter of $84.9 million allowed us to fully pay down the $100.0 million revolving credit line we had used to facilitate the purchase of BTI and still end the quarter with $42.2 million in cash. Earlier this week, we redeemed all of our 5.875% Senior Notes using the proceeds of a new $105.0 million five-year term loan, which has a favorable interest rate. These combined actions are focused on creating value for our shareholders by optimizing our capital efficiency, lowering our weighted average cost of capital, and strengthening our balance sheet to support future growth initiatives."
Financial Outlook
Range for the Three Months Ending July 31, 2015
Range for the Year Ending April 30, 2016
Net sales (in thousands)
$ 140,000
$ 145,000
$ 605,000
$ 615,000
GAAP income per share - diluted
$ 0.13
$ 0.15
$ 0.85
$ 0.90
Amortization of acquired intangible assets, net of tax
0.03
0.03
0.12
0.12
Debt extinguishment costs, net of tax
0.05
0.05
0.05
0.05
Non-GAAP income per share - diluted
$ 0.21
$ 0.23
$ 1.02
$ 1.07
Conference Call and Webcast
The company will host a conference call and webcast today, June 18, 2015, to discuss its fourth quarter and full year fiscal 2015 financial and operational results. Speakers on the conference call will include James Debney, President and Chief Executive Officer, and Jeffrey D. Buchanan, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call will be webcast live and is scheduled to begin at 5:00 p.m. Eastern Time. The live audio broadcast and replay of the conference call can be accessed on Smith & Wesson's website at http://www.smith-wesson.com (Windows Media is required). Those interested in listening to the conference call via telephone may call directly at 617-786-2902 and reference conference code 72152557. No RSVP is necessary. The company will maintain an audio replay of this conference call on its website for a period of time after the call. No other audio replay will be available.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
In this press release, certain non-GAAP financial measures, including "non-GAAP income from continuing operations" and "Adjusted EBITDAS" are presented. From time-to-time, the company considers and uses these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. The company believes it is useful for itself and the reader to review, as applicable, both (1) GAAP measures that include (i) fair value inventory step-up and backlog expense, (ii) amortization of acquired intangible assets, (iii) acquisition-related costs, (iv) debt extinguishment costs, (v) the tax effect of non-GAAP adjustments, (vi) interest expense, (vii) income taxes, (viii) depreciation and amortization, (ix) stock-based compensation expense, (x) DOJ and SEC costs, (xi) payments for acquisitions, (xii) receipts from note receivables, and (xiii) proceeds from sale of property and equipment; and (2) the non-GAAP measures that exclude such information. The company presents these non-GAAP measures because it considers them an important supplemental measure of its performance. The company's definition of these adjusted financial measures may differ from similarly named measures used by others. The company believes 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 the company's GAAP measures. The principal limitations of these measures are that they do not reflect the company's actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.
About Smith & Wesson
Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality firearms, related products, and training to the global military, law enforcement, and consumer markets. The company's firearm division brands include Smith & Wesson®, M&P®, and Thompson/Center Arms™. As a leading provider of shooting, reloading, gunsmithing, and gun cleaning supplies, the company's accessories division produces innovative, high-quality products under several brands, including Caldwell® Shooting Supplies, Wheeler® Engineering, Tipton® Gun Cleaning Supplies, Frankford Arsenal® Reloading Tools, Lockdown® Vault Accessories, and Hooyman™ Premium Tree Saws. Smith & Wesson facilities are located in Massachusetts, Maine, Connecticut, and Missouri. For more information on Smith & Wesson, call (800) 331-0852 or log on to 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 belief that we have strengthened our supply chain; our anticipated further sales and earnings growth in fiscal 2016; our belief that we continue to position our company for long-term success; our focus on creating value for our shareholders by optimizing our capital efficiency, lowering our weighted average cost of capital, and strengthening our balance sheet to support future growth initiatives; our expectations for net sales, GAAP earnings per diluted share from continuing operations, and non-GAAP earnings per diluted share for the first quarter of fiscal 2016 as well as net sales, GAAP earnings per diluted share from continuing operations, and non-GAAP earnings per diluted share for fiscal 2016. 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 the demand for our products; the costs and ultimate conclusion of certain legal matters; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; the potential for increased regulation of firearms and firearm-related products; speculation surrounding fears of terrorism and crime; our growth opportunities; our anticipated growth; our ability to increase demand for our products in various markets, including consumer, law enforcement, and military channels, domestically and internationally; the position of our hunting products in the consumer discretionary marketplace and distribution channel; our penetration rates in new and existing markets; our strategies; our ability to introduce new products; the success of new products; our ability to expand our markets; our ability to integrate acquired businesses in a successful manner; the success of our partnership with General Dynamics Ordnance and Tactical Systems; the general growth of our firearm accessories business; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2014.
Contact: Liz Sharp, VP Investor Relations
Smith & Wesson Holding Corp.
(413) 747-6284
lsharp@smith-wesson.com
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended
For the Years Ended
April 30, 2015 (Unaudited)
April 30, 2014 (Unaudited)
April 30, 2015
April 30, 2014
(In thousands, except per share data)
Net sales
$ 180,997
$ 170,425
$ 551,862
$ 626,620
Cost of sales
113,853
100,680
356,936
367,515
Gross profit
67,144
69,745
194,926
259,105
Operating expenses:
Research and development
2,113
1,529
6,943
5,648
Selling and marketing
9,149
9,365
36,033
33,515
General and administrative
18,558
15,770
62,322
68,954
Total operating expenses
29,820
26,664
105,298
108,117
Operating income
37,324
43,081
89,628
150,988
Other (expense)/income:
Other (expense)/income, net
40
(2,189)
39
(2,154)
Interest income
119
6
395
149
Interest expense
(3,248)
(1,771)
(11,330)
(12,261)
Total other (expense)/income, net
(3,089)
(3,954)
(10,896)
(14,266)
Income from continuing operations before income taxes
34,235
39,127
78,732
136,722
Income tax expense
12,295
14,227
28,905
48,095
Income from continuing operations
21,940
24,900
49,827
88,627
Discontinued operations:
Loss from operations of discontinued security solutions division
(52)
(108)
(297)
(456)
Income tax expense/(benefit)
1
(264)
(83)
(1,134)
(Loss)/income from discontinued operations
(53)
156
(214)
678
Net income
$ 21,887
$ 25,056
$ 49,613
$ 89,305
Net income per share:
Basic - continuing operations
$ 0.41
$ 0.45
$ 0.92
$ 1.51
Basic - total
$ 0.41
$ 0.45
$ 0.92
$ 1.52
Diluted - continuing operations
$ 0.40
$ 0.44
$ 0.90
$ 1.47
Diluted - total
$ 0.40
$ 0.44
$ 0.90
$ 1.49
Weighted average number of common shares outstanding:
Basic
53,846
55,112
53,988
58,668
Diluted
55,074
56,481
55,228
60,114
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
April 30, 2015
April 30, 2014
(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents
$ 42,222
$ 68,860
Accounts receivable, net of allowance for doubtful accounts of $722 on April 30, 2015 and $844 on April 30, 2014
55,280
55,890
Inventories
76,895
86,742
Prepaid expenses and other current assets
6,306
5,958
Deferred income taxes
16,373
17,094
Income tax receivable
—
4,627
Total current assets
197,076
239,171
Property, plant, and equipment, net
133,844
120,440
Intangibles, net
73,768
3,425
Goodwill
75,426
—
Other assets
14,878
18,467
$ 494,992
$ 381,503
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 32,360
$ 37,688
Accrued expenses
19,021
17,107
Accrued payroll
7,556
15,816
Accrued income taxes
4,224
—
Accrued taxes other than income
5,281
5,359
Accrued profit sharing
6,165
11,060
Accrued warranty
6,404
5,513
Total current liabilities
81,011
92,543
Deferred income taxes
33,905
11,418
Notes payable
175,000
100,000
Other non-current liabilities
10,706
10,719
Total liabilities
300,622
214,680
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding
—
—
Common stock, $.001 par value, 100,000,000 shares authorized, 69,625,081 shares issued and 54,062,459 shares outstanding on April 30, 2015 and 68,809,986 shares issued and 55,352,679 shares outstanding on April 30, 2014
70
69
Additional paid-in capital
219,198
211,225
Retained earnings
147,352
97,739
Accumulated other comprehensive income
73
73
Treasury stock, at cost (15,562,622 shares on April 30, 2015 and 13,457,307 shares on April 30, 2014)
(172,323)
(142,283)
Total stockholders' equity
194,370
166,823
$ 494,992
$ 381,503
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended April 30,
2015
2014
(In thousands)
Cash flows from operating activities:
Net income
$ 49,613
$ 89,305
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
30,893
21,704
Loss on sale/disposition of assets
267
150
Provisions for/(recoveries of) losses on accounts receivable
122
(214)
Deferred income taxes
2,341
(1,463)
Stock-based compensation expense
5,808
8,212
Changes in operating assets and liabilities (net effect of acquisitions):
Accounts receivable
10,983
(9,588)
Inventories
25,662
(23,744)
Prepaid expenses and other current assets
(569)
(1,856)
Income tax receivable/(payable)
8,965
(1,534)
Accounts payable
(7,345)
6,468
Accrued payroll
(9,525)
2,720
Accrued taxes other than income
(86)
10
Accrued profit sharing
(4,895)
1,473
Accrued expenses
1,447
(477)
Accrued warranty
891
(244)
Other assets
(348)
(356)
Other non-current liabilities
583
(360)
Net cash provided by operating activities
114,807
90,206
Cash flows from investing activities:
Payments for the net assets of Tri-Town Precision Plastics, Inc.
(23,805)
—
Payments to acquire Battenfeld Technologies, Inc., net of cash acquired
(135,437)
—
Refunds of/(payments for) deposits on machinery and equipment
1,431
(9,269)
Receipts from note receivable
81
77
Payments to acquire patents and software
(392)
(243)
Proceeds from sale of property and equipment
264
101
Payments to acquire property and equipment
(28,199)
(53,282)
Net cash used in investing activities
(186,057)
(62,616)
Cash flows from financing activities:
Proceeds from loans and notes payable
175,000
101,584
Cash paid for debt issue costs
(2,558)
(3,791)
Payments on capital lease obligation
(596)
(596)
Payments on notes payable
(100,000)
(45,143)
Proceeds from Economic Development Incentive Program
640
722
Payments to acquire treasury stock
(30,040)
(115,887)
Proceeds from exercise of options to acquire common stock, including employee stock purchase plan
3,103
3,315
Payroll taxes paid as a result of restricted stock unit withholdings
(1,708)
(2,068)
Excess tax benefit of stock-based compensation
771
2,647
Net cash provided by/(used in) financing activities
44,612
(59,217)
Net decrease in cash and cash equivalents
(26,638)
(31,627)
Cash and cash equivalents, beginning of period
68,860
100,487
Cash and cash equivalents, end of period
$ 42,222
$ 68,860
Supplemental disclosure of cash flow information
Cash paid for:
Interest
$ 8,617
$ 7,688
Income taxes
16,926
48,778
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended April 30,
For the Year Ended April 30,
2015
2014
2015
2014
$
% of Sales
$
% of Sales
$
% of Sales
$
% of Sales
GAAP gross profit
$ 67,144
37.1%
$ 69,745
40.9%
$ 194,926
35.3%
$ 259,105
41.3%
Fair value inventory step-up and backlog expense
2,398
1.3%
—
—
4,404
0.8%
—
—
Non-GAAP gross profit
$ 69,542
38.4%
$ 69,745
40.9%
$ 199,330
36.1%
$ 259,105
41.3%
GAAP operating expenses
$ 29,820
16.5%
$ 26,664
15.6%
$ 105,298
19.1%
$ 108,117
17.3%
Amortization of acquired intangible assets
(2,324)
-1.3%
—
—
(3,748)
-0.7%
—
—
Acquisition-related costs
(48)
0.0%
(471)
-0.3%
(2,090)
-0.4%
(471)
-0.1%
SEC settlement costs
—
—
(2,000)
-1.2%
—
—
(2,000)
-0.3%
Debt extinguishment costs
—
—
—
—
—
—
(5,080)
-0.8%
Non-GAAP operating expenses
$ 27,448
15.2%
$ 24,193
14.2%
$ 99,460
18.0%
$ 100,566
16.0%
GAAP operating income from continuing operations
$ 37,324
20.6%
$ 43,081
25.3%
$ 89,628
16.2%
$ 150,988
24.1%
Fair value inventory step-up and backlog expense
2,398
1.3%
—
—
4,404
0.8%
—
—
Amortization of acquired intangible assets
2,324
1.3%
—
—
3,748
0.7%
—
—
Acquisition-related costs
48
0.0%
471
0.3%
2,090
0.4%
471
0.1%
SEC settlement costs
—
—
2,000
1.2%
—
—
2,000
0.3%
Debt extinguishment costs
—
—
—
—
—
—
5,080
0.8%
Non-GAAP operating income from continuing operations
$ 42,094
23.3%
$ 45,552
26.7%
$ 99,870
18.1%
$ 158,539
25.3%
GAAP income from continuing operations
$ 21,940
12.1%
$ 24,900
14.6%
$ 49,827
9.0%
$ 88,627
14.1%
Fair value inventory step-up and backlog expense
2,398
1.3%
—
—
4,404
0.8%
—
—
Amortization of acquired intangible assets
2,324
1.3%
—
—
3,748
0.7%
—
—
Acquisition-related costs
48
0.0%
471
0.3%
2,090
0.4%
471
0.1%
SEC settlement costs
—
—
2,000
1.2%
—
—
2,000
0.3%
Debt extinguishment costs
—
—
—
—
—
—
5,080
0.8%
Tax effect of non-GAAP adjustments
(1,765)
-1.0%
(914)
-0.5%
(3,790)
-0.7%
(2,794)
-0.4%
Non-GAAP income from continuing operations
$ 24,945
13.8%
$ 26,457
15.5%
$ 56,279
10.2%
$ 93,384
14.9%
GAAP income from continuing operations per share - diluted
$ 0.40
$ 0.44
$ 0.90
$ 1.47
Fair value inventory step-up and backlog expense
0.04
—
0.08
—
Amortization of acquired intangible assets
0.04
—
0.07
—
Acquisition-related costs
0.00
0.01
0.04
0.01
SEC settlement costs
—
0.04
—
0.03
Debt extinguishment costs
—
—
—
0.08
Tax effect of non-GAAP adjustments
(0.03)
(0.02)
(0.07)
(0.05)
Non-GAAP income from continuing operations per share - diluted
$ 0.45
$ 0.47
$ 1.02
$ 1.55
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET OPERATING CASH FLOW TO FREE CASH FLOW
(In thousands)
(Unaudited)
For the three months ended
For the years ended
April 30, 2015
April 30, 2014
April 30, 2015
April 30, 2014
Net cash provided by operating activities
$ 84,860
$ 35,981
$ 114,807
$ 90,206
Net cash used in investing activities
(3,410)
(13,941)
(186,057)
(62,616)
Payments for the net assets of Tri-Town Precision Plastics, Inc.
—
—
23,805
—
Payments to acquire Battenfeld Technologies, Inc., net of cash acquired
(715)
—
135,437
—
Receipts from note receivable
(21)
(20)
(81)
(77)
Proceeds from sale of property and equipment
(1)
—
(264)
(101)
Free cash flow
$ 80,713
$ 22,020
$ 87,647
$ 27,412
SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP INCOME/(LOSS) FROM OPERATIONS TO ADJUSTED EBITDAS
(In thousands)
(Unaudited)
For the Three Months Ended April 30, 2015
For the Three Months Ended April 30, 2014
Continuing
Discontinued
Total
Continuing
Discontinued
Total
Income/(loss) from operations
$ 21,940
$ (53)
$ 21,887
$ 24,900
$ 156
$ 25,056
Interest expense
3,248
—
3,248
1,771
—
1,771
Income tax expense/(benefit)
12,295
1
12,296
14,227
(264)
13,963
Depreciation and amortization
9,295
—
9,295
5,396
—
5,396
Stock-based compensation expense
1,560
—
1,560
1,562
—
1,562
Acquisition-related costs
48
—
48
471
—
471
Fair value inventory step-up and backlog expense
2,398
—
2,398
—
—
—
DOJ/SEC costs
4
—
4
2,150
—
2,150
Adjusted EBITDAS
$ 50,788
$ (52)
$ 50,736
$ 50,477
$ (108)
$ 50,369
For the Year Ended April 30, 2015
For the Year Ended April 30, 2014
Continuing
Discontinued
Total
Continuing
Discontinued
Total
Income/(loss) from operations
$ 49,827
$ (214)
$ 49,613
$ 88,627
$ 678
$ 89,305
Interest expense
11,330
—
11,330
12,261
—
12,261
Income tax expense/(benefit)
28,905
(83)
28,822
48,095
(1,134)
46,961
Depreciation and amortization
29,435
—
29,435
19,758
—
19,758
Stock-based compensation expense
5,808
—
5,808
8,212
—
8,212
Acquisition-related costs
2,090
—
2,090
471
—
471
Fair value inventory step-up and backlog expense
4,404
—
4,404
—
—
—
DOJ/SEC costs
711
—
711
2,593
—
2,593
Adjusted EBITDAS
$ 132,510
$ (297)
$ 132,213
$ 180,017
$ (456)
$ 179,561
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SOURCE Smith & Wesson Holding Corporation
RELATED LINKS
http://www.smith-wesson.com
http://www.prnewswire.com/news-releases/smith--wesson-holding-corporation-reports-fourth-quarter-and-full-year-fiscal-2015-financial-results-300101664.html
T is a 181 BILLION dollar company with many BILLIONS in cash, 100 mil is a fraction %
Not a reason to sell IMO
Don't think you will get hurt here unless the bottom falls out of silver. They have some money in the bank, no debt and producing mines. I'm just in for a swing trade, I think another 15-20% upside happens by end of July.
Huge bid just popped up on GPL 530K at .45
Huge open short interest here, almost anyone who shorted in the last year is in the red, almost 19 days to cover, An earnings beat and things could get interesting.
Looking good!!!!
added another 3K @.4411 10K total now, think I sit back and wait now....
Added 4K @.4299
Yep, he told me Kurt is hot, Jr is hot, and larson on the verge of taking the next step to being a great driver.
Lucky ba$tard.
I see my buddy superfly did not have anyone within 30 points of him.
Will trade ya my 64.....
4 18 78 please
Not sure who started it, but was all over twitter. The street.com commented on it as well.
Twitter rumors can move markets these days.
http://www.thestreet.com/story/13185230/1/lumber-liquidators-ll-stock-gaining-on-unproven-takeover-speculation.html?puc=stocktwits&cm_ven=STOCKTWITS&utm_source=dlvr.it&utm_medium=organic&utm_campaign=stocktwits