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8-K - FORM 8-K - SMITH & WESSON BRANDS, INC.d559775d8k.htm

EXHIBIT 99.1

 

LOGO

Contact: Liz Sharp, VP Investor Relations

Smith & Wesson Holding Corp.

(413) 747-3304

lsharp@smith-wesson.com

Smith & Wesson Holding Corporation Reports Record

Fourth Quarter and Full Year Fiscal 2013 Financial Results

 

   

Record Fiscal Fourth Quarter 2013 Net Sales of $179 Million, Up 38% Year-Over-Year

 

   

Record Quarterly Net Income from Continuing Operations of $29 Million, or $0.44 Per Diluted Share

 

   

Record Annual Fiscal 2013 Net Sales of $588 Million, Up 43% Year-Over-Year

 

   

Record Annual Net Income From Continuing Operations of $81 Million, or $1.22 Per Diluted Share

 

   

Record Cash of $101 Million

SPRINGFIELD, Mass., June 25, 2013 — Smith & Wesson Holding Corporation (NASDAQ Global Select: SWHC), a leader in firearm manufacturing and design, today announced record financial results for the fiscal fourth quarter and full year periods ended April 30, 2013.

Fourth Quarter Fiscal 2013 Financial Highlights

 

 

Net sales for the fourth quarter were $178.7 million, up 37.6% from the fourth quarter last year. Although the company continued to increase its production capacity, it was unable to meet the ongoing demand across most of its firearm product lines, resulting in additional growth in the company’s order backlog.

 

 

Gross profit for the fourth quarter was $68.5 million, or 38.3% of net sales, compared with gross profit of $46.9 million, or 36.1% of net sales, for the comparable quarter last year. Gross profit improved as a result of increased sales volume, leveraging of fixed costs, and a planned favorable product mix.

 

 

Operating expenses for the fourth quarter were $21.6 million, or 12.1% of net sales, compared with operating expenses of $21.2 million, or 16.3% of net sales, for the fourth quarter last year. The decline in operating expenses as a percentage of net sales was primarily driven by higher sales combined with controlled spending in sales and marketing.

 

 

The increased net sales and leverage in expenses resulted in operating income for the fourth quarter of $46.9 million, or 26.2% percent of net sales, compared with operating income of $25.7 million, or 19.8% percent of net sales, for the comparable quarter last year.


 

Income from continuing operations for the fourth quarter was $28.6 million, or $0.44 per diluted share, compared with net income from continuing operations of $17.8 million, or $0.27 per diluted share, for the fourth quarter last year. Income from continuing operations for the fourth quarter of fiscal 2013 includes the impact of a $3.0 million charge, or $0.03 per diluted share, related to anticipated expenses associated with a Thompson/Center product recall.

 

 

Non-GAAP Adjusted EBITDAS from continuing operations for the fourth quarter increased to $52.7 million compared with $31.2 million for the fourth quarter last year.

 

 

Operating cash flow of $51.3 million and capital spending of $13.0 million for the fourth quarter resulted in free cash flow of $38.3 million.

Full Year Fiscal 2013 Financial Highlights

 

 

Net sales for the full fiscal year were a record $587.5 million compared with $412.0 million for the prior fiscal year, an increase of 42.6%. Firearm unit production for the year increased by 40.4%.

 

 

Gross profit was 37.2% compared with 31.1% for fiscal 2012.

 

 

Operating expenses were $85.6 million, or 14.6% of net sales, for fiscal 2013 compared with operating expenses of $83.1 million, or 20.2% of net sales, for fiscal 2012.

 

 

Income from continuing operations was $81.4 million, or $1.22 per diluted share, compared with income from continuing operations of $26.4 million, or $0.40 per diluted share, for last year.

 

 

Non-GAAP Adjusted EBITDAS from continuing operations for the full fiscal year totaled $154.2 million compared with $68.4 million for fiscal 2012.

 

 

Operating cash flow was $98.1 million and capital spending was $41.4 million for fiscal 2013, resulting in full year free cash flow of $65.2 million, which includes $8.5 million from the sale of discontinued operations.

 

 

During fiscal 2013, the company repurchased 2.1 million shares of its common stock for $20.0 million utilizing cash on hand.

 

 

Cash and cash equivalents as of April 30, 2013 totaled $100.5 million, up from $56.7 million a year ago.

 

Page 2 of 10


Jeffrey D. Buchanan, Smith & Wesson Holding Corporation Executive Vice President and Chief Financial Officer, stated, “Building on the strength of our record profitability, robust cash flows, and rising cash position in fiscal 2013, we recently accelerated a number of steps to optimize our capital structure and generate increased value for our stockholders. On June 13, 2013, we announced that we had repurchased our outstanding 9.5% notes for $49.2 million and that we had issued $75.0 million of new 5.875% notes. Since that date, we have sold an additional $25.0 million of the 5.875% notes, which will bring the total new note issuance to $100.0 million. Also on June 13, 2013, we announced that we initiated a $100.0 million stock buyback, a portion of which is expected to be purchased through a $75.0 million tender offer for $10.00 per share, which commenced on June 17, 2013. Overall, we believe that these changes provide a solid foundation upon which to continue to grow our core firearms business, while giving us the financial flexibility to be strategically opportunistic in the market.”

James Debney, Smith & Wesson Holding Corporation President and Chief Executive Officer, stated, “We are pleased with our results, which include record fourth quarter and annual net sales and profits and a substantial expansion of our gross margins. Our successful performance was driven by solid marketing, innovative new products, disciplined manufacturing execution, and strict financial management. Significant increases in our manufacturing capacity, combined with continued robust consumer demand for firearms, resulted in higher sales of our most popular M&P® products. Our achievements over the year aligned directly with our growth strategy, which is underpinned by a focus on our core firearm business. Having completed another year of successfully executing our strategy, we are today issuing our financial outlook for the first quarter and full fiscal year 2014.”

Financial Outlook

The company expects net sales for the first quarter of fiscal 2014 to be between $162.0 million and $167.0 million, which would represent year-over-year growth of approximately 21% at the midpoint. The company anticipates GAAP earnings per share from continuing operations of between $0.34 and $0.37 for the first quarter of fiscal 2014. Included in this first quarter outlook are estimated expenses of approximately $0.06 per share associated with the bond and stock repurchases.

The company anticipates net sales for fiscal 2014 of between $605.0 million and $615.0 million, which would represent year-over-year growth of approximately 4% at the midpoint. It should be noted that the company ended its Walther distribution agreement at the end of fiscal 2013. Therefore, when Walther is excluded from the full year 2013 results, estimated net sales for 2014 would represent year-over-year growth of 12% at the mid-point. The company anticipates GAAP earnings per share from continuing operations of between $1.30 and $1.35 for fiscal 2014, and Adjusted EBITDAS of between $160.0 million and $170.0 million.

Conference Call and Webcast

The company will host a conference call and webcast today, June 25, 2013, to discuss its fourth quarter and full year fiscal 2013 financial and operational results. Speakers on the conference call will include James Debney, President and CEO, and Jeffrey D. Buchanan, Executive Vice President and CFO. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Those interested in listening to the call via telephone may call directly at (857) 244-7551 and reference conference code 34472188. No RSVP is necessary. The conference call audio webcast can also be accessed live and for replay on the company’s website at www.smith-wesson.com, under the Investor Relations section. 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.

 

Page 3 of 10


Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, certain non-GAAP financial measures, including “Adjusted EBITDAS” and “free cash flow” are presented. From time-to-time, the company considers and uses Adjusted EBITDAS and free cash flow as supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. Adjusted EBITDAS excludes the effects of interest expense, income taxes, depreciation of tangible fixed assets, amortization of intangible assets, stock-based compensation expense, plant consolidation costs, DOJ and SEC investigation costs, and certain other transactions. See the attached “Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDAS” for a detailed explanation of the amounts excluded from and included in net income to arrive at Adjusted EBITDAS for the three-month and full year periods ended April 30, 2013 and April 30, 2012 and the company’s guidance for full year fiscal 2014. Free cash flow is defined as cash flow provided by operating activities less capital expenditures, which include purchases of property, equipment, and software.

Adjusted or non-GAAP financial measures provide investors and the company with supplemental measures of operating performance and trends that facilitate comparisons between periods before, during, and after certain items that would not otherwise be apparent on a GAAP basis. Adjusted financial measures are not, and should not be viewed as, a substitute for GAAP results. The company’s definition of these adjusted financial measures may differ from similarly named measures used by others.

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 brands include Smith & Wesson®, M&P® and Thompson/Center Arms™. Smith & Wesson facilities are located in Massachusetts and Maine. For more information on Smith & Wesson, call (800) 331-0852 or log on to
www.smith-wesson.com
.

 

Page 4 of 10


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 the company’s anticipated expenses associated with the Thompson/Center product recall; the company’s assessment that it recently executed a number of steps to optimize its capital structure and generate increased value for its stockholders building on the strength of its record profitability, robust cash flows, and rising cash position in fiscal 2013; the company’s belief that its repurchases of outstanding notes and the issuance of new notes as well as the announced stock buyback will increase the company’s financial flexibility and provide a solid foundation upon which to continue to grow its core firearm business while being strategically opportunistic in the market; the company’s belief that its successful performance was driven by solid marketing, innovative new products, disciplined manufacturing execution, and strict financial management; the company’s belief that significant increases in the company’s manufacturing capacity, combined with continued robust consumer demand for firearms resulted in higher sales of its most popular M&P products; and the company’s expectations for net sales, GAAP earnings per share from continuing operations, and estimated expenses associated with bond and stock repurchases for the first quarter of fiscal 2014 as well as net sales, GAAP earnings per share from continuing operations and Adjusted EBITDAS for fiscal 2014. 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, including the DOJ and SEC matters; the state of the U.S. economy; 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; 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 Form 10-K Report for the fiscal year ended April 30, 2013.

 

Page 5 of 10


SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

     For the Three Months Ended April 30:     For the Years Ended April 30,  
     2013 (Unaudited)     2012 (Unaudited)     2013     2012  
     (In thousands, except per share data)  

Net sales

   $ 178,717      $ 129,843      $ 587,514      $ 411,997   

Cost of sales

     110,229        82,980        369,111        284,008   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     68,488        46,863        218,403        127,989   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     1,388        973        4,751        4,543   

Selling and marketing

     6,817        6,495        30,020        31,317   

General and administrative

     13,416        13,729        50,798        47,213   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     21,621        21,197        85,569        83,073   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income from continuing operations

     46,867        25,666        132,834        44,916   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income/(expense):

        

Other income/(expense), net

     —          16        39        78   

Interest income

     64        309        814        1,505   

Interest expense

     (1,210     (1,439     (5,781     (7,484
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income/(expense), net

     (1,146     (1,114     (4,928     (5,901
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

     45,721        24,552        127,906        39,015   

Income tax expense

     17,090        6,735        46,500        12,582   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     28,631        17,817        81,406        26,433   

Discontinued operations:

        

Loss from operations of discontinued security solutions division

     (455     (7,639     (3,605     (15,945

Income tax expense/(benefit)

     3,010        (2,290     (912     (5,617
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from discontinued operations

     (3,465     (5,349     (2,693     (10,328
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/comprehensive income

   $ 25,166      $ 12,468      $ 78,713      $ 16,105   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic—continuing operations

   $ 0.45      $ 0.27      $ 1.25      $ 0.41   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic—net income

   $ 0.39      $ 0.19      $ 1.21      $ 0.25   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted—continuing operations

   $ 0.44      $ 0.27      $ 1.22      $ 0.40   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted—net income

   $ 0.38      $ 0.19      $ 1.18      $ 0.25   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares outstanding:

        

Basic

     64,217        65,057        65,155        64,788   

Diluted

     65,450        66,418        66,642        67,277   

 

Page 6 of 10


SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

     As of:  
     April 30, 2013     April 30, 2012  
     (In thousands, except par value and share data)  
ASSETS     

Current assets:

    

Cash and cash equivalents, including restricted cash of $3,345 on April 30, 2013 and $3,334 on April 30, 2012

   $ 100,487      $ 56,717   

Accounts receivable, net of allowance for doubtful accounts of $1,128 on April 30, 2013 and $1,058 on April 30, 2012

     46,088        48,313   

Inventories

     62,998        55,296   

Prepaid expenses and other current assets

     4,824        4,139   

Assets held for sale

     —          13,490   

Deferred income taxes

     12,076        12,759   

Income tax receivable

     3,093        —     
  

 

 

   

 

 

 

Total current assets

     229,566        190,714   
  

 

 

   

 

 

 

Property, plant, and equipment, net

     86,382        60,528   

Intangibles, net

     3,965        4,532   

Other assets

     7,076        5,900   
  

 

 

   

 

 

 
   $ 326,989      $ 261,674   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 31,220      $ 28,618   

Accrued expenses

     16,033        20,685   

Accrued payroll

     13,096        9,002   

Accrued income taxes

     —          291   

Accrued taxes other than income

     5,349        4,270   

Accrued profit sharing

     9,587        8,040   

Accrued product/municipal liability

     1,551        1,397   

Accrued warranty

     5,757        5,349   

Liabilities held for sale

     —          5,693   
  

 

 

   

 

 

 

Total current liabilities

     82,593        83,345   
  

 

 

   

 

 

 

Deferred income taxes

     7,863        4,537   
  

 

 

   

 

 

 

Notes payable, net of current portion

     43,559        50,000   
  

 

 

   

 

 

 

Other non-current liabilities

     11,675        10,948   
  

 

 

   

 

 

 

Total liabilities

     145,690        148,830   
  

 

 

   

 

 

 

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, 67,596,716 shares issued and 64,297,113 shares outstanding on April 30, 2013 and 66,512,097 shares issued and 65,312,097 shares outstanding on April 30, 2012

     68        67   

Additional paid-in capital

     199,120        189,379   

Retained earnings/(accumulated deficit)

     8,434        (70,279

Accumulated other comprehensive income

     73        73   

Treasury stock, at cost (3,299,603 common shares on April 30, 2013 and 1,200,000 on April 30, 2012)

     (26,396     (6,396
  

 

 

   

 

 

 

Total stockholders’ equity

     181,299        112,844   
  

 

 

   

 

 

 
   $ 326,989      $ 261,674   
  

 

 

   

 

 

 

 

Page 7 of 10


SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     For the Years Ended April 30,  
     2013     2012  
     (In thousands)  

Cash flows from operating activities:

    

Net Income

   $ 78,713      $ 16,105   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Amortization and depreciation

     16,730        15,487   

Loss on sale of business including loss on sale of discontinued operations, including $45 of stock-based compensation expense

     1,222        5,688   

Loss on sale/disposition of assets

     315        285   

Provisions for/(recoveries of) losses on accounts receivable

     720        (465

Change in disposal group assets and liabilities

     (1,215     5,467   

Deferred income taxes

     4,009        (1,558

Stock-based compensation expense

     4,073        2,484   

Excess book deduction of stock-based compensation

     —          (144

Changes in operating assets and liabilities:

    

Accounts receivable

     1,505        5,089   

Inventories

     (7,702     (9,235

Other current assets

     (285     950   

Income tax receivable/payable

     (3,384     4,804   

Accounts payable

     2,602        (8,716

Accrued payroll

     3,489        3,693   

Accrued taxes other than income

     1,079        (7,151

Accrued profit sharing

     1,547        3,959   

Accrued other expenses

     (5,279     (877

Accrued product/municipal liability

     154        (1,187

Accrued warranty

     408        2,169   

Other assets

     (1,930     (189

Other non-current liabilities

     1,327        714   
  

 

 

   

 

 

 

Net cash provided by operating activities

     98,098        37,372   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Proceeds from sale of business including discontinued operations

     7,500        500   

Receipts from note receivable

     73        19   

Payments to acquire patents and software

     (102     (164

Proceeds from sale of property and equipment

     1,040        26   

Payments to acquire property and equipment

     (41,421     (13,770
  

 

 

   

 

 

 

Net cash used in investing activities

     (32,910     (13,389
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from loans and notes payable

     1,753        1,532   

Cash paid for debt issue costs

     —          (1,850

Proceeds from energy efficiency incentive programs

     —          225   

Payments on capital lease obligation

     (600     —     

Cash paid for redemption of convertible notes

     —          (30,000

Payments on loans and notes payable

     (8,195     (1,532

Proceeds from Economic Development Incentive Program

     —          4,400   

Payments to acquire treasury stock

     (20,000     —     

Proceeds from exercise of options to acquire common stock, including employee stock purchase plan

     4,808        1,667   

Taxes paid related to restricted stock issuance

     (209     —     

Excess tax benefit of stock-based compensation

     1,025        —     
  

 

 

   

 

 

 

Net cash used in financing activities

     (21,418     (25,558
  

 

 

   

 

 

 

Net increase/(decrease) in cash and cash equivalents

     43,770        (1,575

Cash and cash equivalents, beginning of period

     56,717        58,292   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 100,487      $ 56,717   
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid for:

    

Interest

   $ 5,295      $ 5,865   

Income taxes

     44,087        3,963   

 

Page 8 of 10


SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDAS (Unaudited)

 

     For the Three Months Ended April 30, 2013:     For the Three Months Ended April 30, 2012:  
     GAAP     Adjustments     Adjusted     GAAP     Adjustments     Adjusted  
     (In thousands)  

Net sales

   $ 178,717      $ —        $ 178,717      $ 129,843      $ —        $ 129,843   

Cost of sales

     110,229        (4,026 )(8)      106,203        82,980        (3,735 )(1)      79,245   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     68,488        4,026        72,514        46,863        3,735        50,598   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Research and development

     1,388        (29 )(8)      1,359        973        (13 )(1)      960   

Selling and marketing

     6,817        (79 )(8)      6,738        6,495        (56 )(1)      6,439   

General and administrative

     13,416        (1,668 )(2)      11,748        13,729        (1,668 )(4)      12,061   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     21,621        (1,776     19,845        21,197        (1,737     19,460   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income from continuing operations

     46,867        5,802        52,669        25,666        5,472        31,138   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income/(expense):

            

Other income/(expense), net

     —          —          —          16        —          16   

Interest income

     64        —          64        309        (300 )(7)      9   

Interest expense

     (1,210     1,210 (5)      —          (1,439     1,439 (5)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income/(expense), net

     (1,146     1,210        64        (1,114     1,139        25   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

     45,721        7,012        52,733        24,552        6,611        31,163   

Income tax expense

     17,090        (17,090 )(6)      —          6,735        (6,735 )(6)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     28,631        24,102        52,733        17,817        13,346        31,163   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations:

            

Loss from operations of discontinued security solutions division

     (455     —          (455     (7,639     6,060 (9)      (1,579

Income tax expense/(benefit)

     3,010        (3,010 )(6)      —          (2,290     2,290 (6)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss on discontinued operations

     (3,465     3,010        (455     (5,349     3,770        (1,579
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income/comprehensive income

   $ 25,166      $ 27,112      $ 52,278      $ 12,468      $ 17,116      $ 29,584   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 9 of 10


SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDAS (Unaudited)

 

     For the Year Ended April 30, 2013:     For the Year Ended April 30, 2012:  
     GAAP     Adjustments     Adjusted     GAAP     Adjustments     Adjusted  
     (In thousands)  

Net sales

   $ 587,514      $ —        $ 587,514      $ 411,997      $ —        $ 411,997   

Cost of sales

     369,111        (14,237 )(8)      354,874        284,008        (14,554 )(1)      269,454   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     218,403        14,237        232,640        127,989        14,554        142,543   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

            

Research and development

     4,751        (116 )(8)      4,635        4,543        (157 )(1)      4,386   

Selling and marketing

     30,020        (247 )(8)      29,773        31,317        (277 )(1)      31,040   

General and administrative

     50,798        (6,542 )(2)      44,256        47,213        (8,246 )(3)      38,967   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     85,569        (6,905     78,664        83,073        (8,680     74,393   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income from continuing operations

     132,834        21,142        153,976        44,916        23,234        68,150   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income/(expense):

            

Other income/(expense), net

     39        —          39        78        —          78   

Interest income

     814        (608 )(7)      206        1,505        (1,343 )(7)      162   

Interest expense

     (5,781     5,781 (5)      —          (7,484     7,484 (5)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income/(expense), net

     (4,928     5,173        245        (5,901     6,141        240   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

     127,906        26,315        154,221        39,015        29,375        68,390   

Income tax expense

     46,500        (46,500 )(6)      —          12,582        (12,582 )(6)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     81,406        72,815        154,221        26,433        41,957        68,390   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Discontinued operations:

            

Loss from operations of discontinued security solutions division

     (3,605     1,808 (9)      (1,797     (15,945     8,321 (9)      (7,624

Income tax benefit

     (912     912 (6)      —          (5,617     5,617 (6)      —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss on discontinued operations

     (2,693     896        (1,797     (10,328     2,704        (7,624
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income/comprehensive income

   $ 78,713      $ 73,711      $ 152,424      $ 16,105      $ 44,661      $ 60,766   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) To exclude depreciation, amortization, and plant consolidation costs.
(2) To exclude depreciation, amortization, stock-based compensation expense, and DOJ/SEC costs and related profit sharing impacts of DOJ/SEC.
(3) To exclude depreciation, amortization, stock-based compensation expense, plant consolidation costs, severance benefits for our former President and CEO, and DOJ/SEC costs and related profit sharing impacts of DOJ/SEC.
(4) To exclude depreciation, amortization, stock-based compensation expense, plant consolidation costs, and DOJ/SEC costs and related profit sharing impacts of DOJ/SEC.
(5) To exclude interest expense.
(6) To exclude income tax expense.
(7) To exclude intercompany interest income.
(8) To exclude depreciation and amortization.
(9) To exclude loss on sale of discontinued operations, depreciation, amortization, interest expense, and stock-based compensation expense.

 

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