Fri, Jun 20, 10:13 AM (24 days ago)
**Summary of Smith & Wesson Brands, Inc. (SWBI) 10-K Filing** **Financial Performance:** - **Revenue:** $474.7 million, a decrease of 11.4% from the prior fiscal year. - **Gross Profit:** $127.18 million, a decrease of 19.6% from the prior fiscal year. - **Net Income:** $13.4 million, or $0.30 per diluted share, compared to $41.4 million, or $0.89 per diluted share, in the prior fiscal year. - **Operating Expenses:** Total operating expenses were $103.298 million, a decrease of 6.9% from the prior fiscal year. - **Cash Flow:** Cash used in operating activities was $7.2 million, compared to $106.7 million of cash provided in the prior fiscal year. **Earnings per Share (EPS):** - **Basic EPS:** $0.30, compared to $0.90 in the prior fiscal year. - **Diluted EPS:** $0.30, compared to $0.89 in the prior fiscal year. **Operating Expenses:** - **Research and Development:** $9.567 million, an increase of 31.8% from the prior fiscal year. - **Selling, Marketing, and Distribution:** $41.314 million, an increase of 1.7% from the prior fiscal year. - **General and Administrative:** $54.933 million, a decrease of 13.0% from the prior fiscal year. **Capital Expenditures:** - **Fiscal 2025:** $21.6 million. - **Fiscal 2026:** Expected to be between $25.0 million and $30.0 million. **Financial Condition:** - **Cash and Cash Equivalents:** $25.2 million as of April 30, 2025. - **Credit Facilities:** $80.0 million of borrowings outstanding on the revolving line of credit, bearing interest at an average rate of 6.69%. **Market Position Changes:** - **Handguns:** Sales decreased by 13.1%, primarily due to lower consumer demand and a shift in product mix. - **Long Guns:** Sales decreased by 10.8%, primarily due to lower consumer demand and a shift in product mix. - **Other Products & Services:** Sales increased by 3.5%, primarily due to increased component parts and suppressor sales. **Strategic Overview:** - **Organic Growth:** Focus on driving organic growth by leveraging brands and maintaining a robust product pipeline. - **Product Development:** Design, produce, and market high-quality, innovative firearms and related accessories. - **Infrastructure:** Streamline and standardize business operations to drive profitability. - **Cash Flow:** Deploy cash flow to maximize return on invested capital, including investments in machinery, equipment, and new product development. **Future Outlook:** - **Inventory Levels:** Expected to moderately decline during fiscal 2026. - **Capital Expenditures:** Expected to be between $25.0 million and $30.0 million in fiscal 2026. - **Market Share:** Aim to continue increasing market share with a strong brand reputation and attractive price points. **Risk Factors:** - **Economic Factors:** Performance impacted by economic, political, social, legislative, regulatory, and inflationary factors. - **Manufacturing Risks:** Dependence on efficient operation of facilities and supply chain management. - **Product Liability:** Exposure to potential product liability, warranty liability, and personal injury claims. - **Cybersecurity:** Risks related to customer, employee, vendor, and other company data. - **Legal Proceedings:** Involvement in various lawsuits and governmental investigations. **Financial Condition:** - **Liquidity:** Adequate capital resources and credit facilities to fund operations for at least the next 12 months. - **Inflation:** Continued impact on material costs, labor costs, and consumer demand. **Market Position Changes:** - **Handguns:** Decrease in sales due to lower consumer demand and product mix shift. - **Long Guns:** Decrease in sales due to lower consumer demand and product mix shift. - **Other Products & Services:** Increase in sales due to component parts and suppressor sales.