Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SMITH & WESSON BRANDS, INC. | d496431d8k.htm |
Exhibit 99.1
| March, 2013 Smith & Wesson Investor Presentation |
| Safe Harbor Certain statements contained in this presentation may be deemed to be forward-looking statements under federal securities laws, and the Company intends that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include but are not limited to statements regarding the Company's markets and strategies; the Company's vision and mission; potential repurchases of the Company's common stock; anticipated sales, GAAP diluted EPS, and non-GAAP Adjusted EBITDAS for the Company; the outcome of the national discussion about how to cope with violence in our communities and its effects on the Company; the opportunities for growth of the Company; the Company's new products and product development; the demand for the Company's products and services; the Company's focus and objectives; and the Company's strategic direction and drivers for future periods. The Company cautions 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 the Company's products, the Company's growth opportunities, the ability of the Company to obtain operational enhancements, the success of new products, the potential for increased regulation of firearms and firearm-related products, and other risks detailed from time to time in the Company's reports filed with the SEC. 2 |
| Business Highlights U.S. market leader in firearms 160 years of rich history 1,600 jobs in America - products made in America Iconic brand with 92% aided awareness*Smith & Wesson(r) Brand = revolver Innovative product portfolio serving broad user groupsRevolvers, polymer pistols, metal pistols, concealed carry pistols, bolt action rifles, black powder rifles, modern sporting rifles Diverse sales sources: Consumer: sporting goods, hunting, personal protection, concealed carryProfessional: international, law enforcement, government, military Healthy balance sheet - positive net cash Solid, experienced management team Strong strategic direction* Survey respondents who own a firearm and do not intend to purchase in the next 12 months andrespondents who intend to purchase a firearm within 12 months, whether or not they are current owners. 3 |
| Vision / Mission Our Vision: The leading firearms manufacturer Our Mission: To allow our employees to design, produce, and market high-quality, innovative firearms that meet the needs and desires of our consumer and professional customers 4 |
| Focus, Simplify, Execute Strategy for growth - underpinned by a focus on firearmsConsumer and professional marketsFamily of brands:Smith & Wesson(r)M&P(r)Thompson/Center Arms(tm)Performance Center(tm)M&P(r) as a brand and product platform: Pistols and modern sporting riflesOperations: Ready to adapt to changing environmentExpand capacity and continue strong focus on flexibilityProducts: Deliver new products that meet needs, wants, and desires of professionals and consumersSales: Continue to increase market share 5 |
| Experienced Leadership Team James Debney, President & CEO 20+ years: multinational consumer and business-to- business environments including President of Presto Products Co., a $500 million business unit of Alcoa Consumer ProductsJeffrey Buchanan, EVP & CFO 25+ years: private and public company experience in financial management and law; CFO for publicly traded, global manufacturing company; law firm partner; public company board member 6 |
| Experienced Management Team MarioPasantes_______________Sr. VP, Marketing and International SalesAlcoa, Inc.Coca-ColaPillsbury Mark Smith_______________VP, Manufacturing and Supply Chain ManagementAlvarez & MarsalEcolab Robert Cicero________________VP, General Counsel, Chief Compliance Officer,and SecretaryChemtura Corp.Shearman & SterlingMorgan Lewis & Bockius Mike Brown_______________VP, U.S. SalesCamfour, Inc.KPMG International Market DevelopmentStrong Global BrandsStrategyCustomer Development Multi-Site OpsCapacity ExpansionMPS/MRP SystemsS&OP MgmtInventory MgmtLean Six Sigma Public Co LeadershipCorp GovernanceCross-border M&AGlobal ComplianceFinance & Pensions Labor & Employment Multiple Leadership Roles inHunting & ShootingSports IndustriesSales StrategyTeam Development 7 |
| Q3 Fiscal 2013 Highlights (Jan. 31, 2013 - From Continuing Operations) Q3 Financial Results:Quarterly sales of $136.2M, +38.8% Y/YOperated at essentially full capacity for the entire quarterResults include holiday closures (9 days) and impact of Superstorm Sandy (2 days)Raised full year fiscal 2013 financial guidanceGross profit margin 36.8% versus 30.6% one year agoOperating income 20.6% versus 10.5% one year agoIncome of $17.5M, or $0.26 per diluted share, versus income of $5.4M, or $0.08 one year agoNon-GAAP Adjusted EBITDAS of $33.3MFiscal year-to-date non-GAAP Adjusted EBITAS of over $100MFree cash flow of $20.4M in the quarterConsumer channel quarterly unit growth +35.8% M&P(r) pistols and M&P(r) modern sporting rifles remained popular with consumers - backlog grewIncreased our manufacturing capacity & outsourcing capabilitiesIntroduced firearm retailers and trade media to new M&P(r) products at SHOT Show: M&P C.O.R.E.(tm) Performance Center(tm) pistol, M&P(r)10 modern sporting rifleEstablished common stock repurchase program in December 2012Purchased $20M and authorized incremental $15M 8 |
| First Nine Months Highlights and Guidance (Fiscal Year 2013 - From Continuing Operations) Actual and Estimated Fiscal Year April 30 Sales (in Millions) First Nine Months Fiscal 2013 Actual:Sales $408.8M (Up 44.9% YOY)Gross Profit Margin 36.7%Operating Income 21.0%GAAP Diluted EPS $0.79Cash at Jan. 31: $62.0MNon-GAAP Adjusted EBITDAS $101.5MQ4FY13 Guidance:Sales $165.0M - $170.0M (Up 29% YOY)GAAP Diluted EPS $0.38 - $0.40Full Fiscal 2013 Guidance:Sales $575.0M - $580.0M (Up 40% YOY)GAAP Diluted EPS $1.17 - $1.19Non-GAAP Adjusted EBITDAS $148.0M - $150.0M *FY2013 EstimateNote: All financial information and guidance reflects information that we provided on March 5, 2013. We are not updatingthis information to the present date nor does its inclusion constitute a reiteration or modification of this information. 9 |
| Current Environment The tragedy in Newtown has understandably inspired an important national discussion about how to cope with violence in our communitiesThe outcome of this discussion has yet to be determined - we will not speculate at this timeWe are participating in the discussion, along with the majority of our industry, through our representatives at the National Shooting Sports Foundation (NSSF)We strongly support the U.S. Constitution and the Second AmendmentWe support a comprehensive approach to preventing violence in our communities through only those efforts that we believe will make a differenceWe will continue to monitor closely the political and legislative landscapeSmith & Wesson is a 160-year-old American company that has successfully thrived in a heavily regulated environment by complying with federal, state, and local lawsWe possess a broad range of products and a highly flexible manufacturing operation. Taken together, these allow us to be highly responsive should the market and/or legislative developments drive a change in sales mix 10 |
| National Shooting Sports Foundation (NSSF) adjusts FBI NICS data to eliminate background checksassociated with permit applications and checks on active CCW permit databases. NSSF adjusted NICS data provides a more accurate picture of market conditions. Source: NSSF -National Shooting Sports Foundation (Adjusted) NICS Industry: Adjusted NICS "Background checks" indicate continuing strong year-over-year firearms sales CY12 CY11 CY10 CY09 CY13 11 (CHART) |
| Industry: Growth in Handguns, Long Guns, Permit Checks (CHART) 12 |
| (CHART) (CHART) (CHART) Industry: Strong Sales Indications Manufacturer projected sales based on excise tax collections Q1-Q3 2012: shipment value of handguns and long guns up 48% over prior year Q3 2012 (most recent available): handgun tax obligations up 45% over Q3 2011 Source: Federal Excise Tax collections on mfg sales value*Long guns include all rifles, shotguns, and muzzle loaders (in Millions) Total Handguns & Long Guns Total Handguns Total Long Guns* Data through only third quarter calendar 2012 13 |
| Pistols Driving Growth in Handguns Pistols now represent over 80% of units sold Pistols now represent over 80% of units sold Pistols now represent over 80% of units sold Source: BATF, Includes U.S. manufacturer and imports, excludes exports 14 |
| Industry: Pistols vs. Revolvers Pistols and revolvers have different attributes, but pistols are preferred by both professionals and consumers Pistol advantages versus revolvers:Ergonomics/comfortHigh tech/cutting edgeModern shapeTrigger pullCapacitySafety featuresRevolver advantages versus pistols:Slightly better for beginners Easy maintenance Reliability Source: 12/10 Strategic Platform and Extendibility Study 15 |
| Consumer Market - U.S.Focus on consumer trends: Concealed Carry, Personal Protection, RecreationTake Market Share: Polymer Pistol Unit Growth, Modern Sporting Rifles Maintain Robust New Product Pipeline Leverage Higher Performance Standards from Professional MarketsProfessional MarketLaw Enforcement / Federal Government Military - M9 pistol replacement opportunityInternational - large orders, e.g. Belgium, Australia, Canada, Puerto Rico SWHC: Firearms Growth Drivers 16 |
| Major Focus: M&P(r) Pistol Growth Current Situation:Pistols are more than 80% of handguns soldCompact/slim and full-size polymer pistols are increasing in popularityM&P(r) polymer pistols are highly sought after by professionals and consumers - especially M&P(r) Shield(tm)Our Focus:Grow M&P(r) pistol market share:Understand the consumer better than competition and market to facilitate share gainIntelligently increase capacityMake it easier for dealers to support the M&P(r) platform:Strong merchandising and store programsArmorer's Training and On-The-Hip ProgramOther exciting initiatives to be released 17 |
| M&P(r) - Proven Performance M&P(r) - Proven Performance Strong & Marketable Differences 18 |
| New products:M&P(r) Shield(tm)M&P(r) Pro Series C.O.R.E.(tm) M&P(r)10Polymer pistol categoryProtection and RecreationConsumer and ProfessionalAdditional calibers and models for the M&P(r) modern sporting rifle platform:300 Whisper and .308 for HuntingWe will only announce major new product introductions when we are ready and capable and when the timing is right: Pre-stock channelCoordinate new product launches with all stakeholdersAlign accessory partners - ready-to-deliverComplete marketing communications and social media plans New Models for the M&P(r) Platform 19 |
| The M&P(r) Shield(tm) Designed to meet the demand for personal protection and concealed carry, the M&P(r) Shield features:Powerful 9mm or .40 S&W calibersLightweight, slim one-inch profile for comfortable carryCompact overall length of 6.1"M&P(r) proven ergonomic designThumb safetyIncludes two magazines, standard and +1Coordinated launch included availability of holsters, lasers, and other accessories 20 |
| The NEW M&P(r) Pro-Series C.O.R.E.(tm) M&P(r) Pro Series C.O.R.E.(tm) Pistols (Competition Optics Ready Equipment):Quick, custom, competition-based opticsCrisp 4.5-pound trigger pullTextured interchangeable back straps to enhance and customize gripAccepts sights from six of the industry's top red-dot sight manufacturers - for improved accuracy and precision target acquisitionAvailable in 9mm and .40 S&WAvailable in 4.25-inch or 5-inch barrel configuration 21 |
| The New M&P(r)10 - For Law Enforcement New M&P(r)10 expands our popular line of semi-automatic modern sporting rifles for law enforcement:.308 WIN - also safely fires 7.62 x 51 mmAccurate 18-inch barrel with 1-in-10" 5R riflingAmbidextrous controls:Safety selector lever, magazine release, and bolt release Patent-pending, Smith & Wesson(r) enhanced flash hider6-position stock20-round PMAG(r) magazine 22 |
| The New M&P(r)10 - For Hunters New M&P(r)10 expands our popular line of semi-automatic modern sporting rifles for hunters:.308 WIN - also safely fires 7.62 x 51 mmAccurate 18-inch barrel with 1-in-10" 5R riflingAmbidextrous controls:Safety selector lever, magazine release, and bolt releaseOptics Ready modelRealtree (r) camo finishMagpul (r) fixed rifle stock5-round magazine 23 |
| Our Strategic Direction Grow sales and increase profitabilityExpand manufacturing capacityAdd flexible capacity, internally and externallyFocus on M&P(r) pistols Optimize expenses on a company-wide basisFocus on improving gross marginsInvest in sales and marketingMaintain robust new product pipelineLaunch new products strategicallyLeverage existing product portfolioLeverage balance sheet: Two options Invest in firearm businessBuy back stock and/or debt 24 |
| March, 2013 Smith & Wesson Investor Presentation |