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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 23, 2022

 

 

Smith & Wesson Brands, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Nevada   001-31552   87-0543688

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2100 Roosevelt Avenue

Springfield, Massachusetts 01104

(Address of principal executive offices) (Zip Code)

(800) 331-0852

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, Par Value $0.001 per Share   SWBI   Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 §CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.02.  Results of Operations and Financial Condition.

We are furnishing the disclosure in this Item 2.02 in connection with the disclosure of information in the form of the textual information from a press release issued on June 23, 2022.

The information in this Item 2.02 (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this Current Report on Form 8-K is available on our website at www.smith-wesson.com, although we reserve the right to discontinue that availability at any time.

 

Item 9.01.

Financial Statements and Exhibits.

 

  (d)

Exhibits.

 

Exhibit
Number

  

Exhibits

99.1    Press release from Smith & Wesson Brands, Inc., dated June 23, 2022, entitled “Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Year Fiscal 2022 Financial Results”
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    SMITH & WESSON BRANDS, INC.
Date: June 23, 2022     By:  

/s/ Deana L. McPherson

      Deana L. McPherson
      Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary
EX-99.1 2 d383154dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Smith & Wesson Brands, Inc. Reports

Fourth Quarter and Full Year Fiscal 2022 Financial Results

 

   

Q4 Net Sales of $181.3 Million

   

Q4 Gross Margin of 39.8%

   

Q4 EPS of $0.79/Share; Q4 Adjusted EBITDAS Margin of 31.8%

   

$120.7 Million of Cash on Hand

   

Board of Directors Authorized 25% Increase in Quarterly Dividend

SPRINGFIELD, Mass., June 23, 2022 – Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2022, ended April 30, 2022. Unless otherwise indicated, any reference to income statement items refers to results from continuing operations.

Fourth Quarter Fiscal 2022 Financial Highlights

 

   

Net sales were $181.3 million, a decrease of $141.6 million, or 43.9%, from the comparable quarter last year, and $11.7 million, or 6.1%, lower than the comparable quarter in fiscal 2020.

 

   

Gross margin was 39.8% versus 45.1% in the comparable quarter last year and 32.2% in the comparable quarter in fiscal 2020.

 

   

GAAP net income was $36.1 million, or $0.79 per diluted share, compared with $89.2 million, or $1.70 per diluted share, for the comparable quarter last year.

 

   

Non-GAAP net income was $37.6 million, or $0.82 per diluted share, compared with $89.6 million, or $1.71 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the planned relocation of our headquarters and certain manufacturing and distribution operations to Tennessee, the spin-off of the outdoor products and accessories business in fiscal 2021, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

 

   

Non-GAAP Adjusted EBITDAS was $57.7 million, or 31.8% of net sales, compared with $125.6 million, or 38.9% of net sales, for the comparable quarter last year.

Full Year Fiscal 2022 Financial Highlights

 

   

Net sales were $864.1 million compared with $1.1 billion for the prior year, a decrease of 18.4%.

 

   

Gross margin was 43.3% versus 42.4% for the prior year.

 

   

GAAP net income was $194.5 million, or $4.08 per diluted share, compared with $243.6 million, or $4.40 per diluted share, for the prior year.

 

   

Non-GAAP net income was $202.8 million, or $4.25 per diluted share, compared with $251.5 million, or $4.54 per diluted share, for the prior year. GAAP to non-GAAP adjustments for income exclude costs related to the spin-off of the outdoor products and accessories business, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

 

Page 1 of 8


   

Non-GAAP Adjusted EBITDAS was $299.6 million, or 34.7% of net sales, compared with $366.6 million, or 34.6% of net sales, for the prior year.

Mark Smith, President and Chief Executive Officer, commented, “Our fourth quarter and full year results speak to the quality and dedication of our employees, the strength of our iconic brand, and the resiliency of our flexible manufacturing model. We delivered strong financial results, including gross profit and Adjusted EBITDAS margins for fiscal 2022 that exceeded prior year levels despite continued moderation in demand for firearms that led to lower net sales. Although we expect inflationary pressures to persist and for firearm market conditions to return to more normalized levels in fiscal 2023, we are confident in our flexible manufacturing model and expect to benefit from the pricing and product portfolio adjustments that we made during the surge. In summary, we believe that we remain well positioned for long-term growth with an agile business model designed to quickly adapt to changes in the marketplace and deliver strong, consistent levels of profitability and drive long-term stockholder value.”

Deana McPherson, Executive Vice President and Chief Financial Officer, commented “Our financial performance reflects tougher year-over-year comparisons due to the return to more normalized levels of demand following the surge. However, in spite of the lower demand, we are now realizing the benefits of the proactive steps we took during the surge to enhance our profitability profile. Fourth quarter gross margin was down on a year-over-year basis, as expected, but 760 basis points above the comparable quarter in fiscal 2020 despite a 6.1% decline in net sales. Our balance sheet remains strong with $120.7 million of cash and no debt, and we expect to continue generating strong cash flow for the foreseeable future. Accordingly, our Board of Directors has authorized a 25% increase in our quarterly dividend to $0.10 per share, which will be paid to stockholders of record on July 7, 2022 with payment to be made on July 21, 2022.”

Conference Call and Webcast

The company will host a conference call and webcast on June 23, 2022, to discuss its fourth quarter and full fiscal 2022 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. 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 conference call via telephone may call directly at (844) 309-6568 and reference conference identification number 2371913. No RSVP is necessary. The conference call audio webcast can also be accessed live on the company’s website at www.smith-wesson.com, under the Investor Relations section.

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

In this press release, certain non-GAAP financial measures, including “non-GAAP net income,” “Adjusted EBITDAS,” and “free cash flow” are presented. From time-to-time, we consider and use these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. We believe it is useful for us and the reader to review, as applicable, both (1) GAAP measures that include (i) interest expense, (ii) income tax expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) COVID-19 expenses, (vi) transition costs, (vii) amortization of acquired intangible assets, (viii) spin related stock compensation, (ix) Relocation expense, and (x) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. We present these non-GAAP measures because we consider them an important supplemental measure of our performance. Our definition of these adjusted financial measures may differ from similarly named measures used by others. We believe 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 our GAAP measures. The principal limitations of these measures are that they do not reflect our actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.

 

Page 2 of 8


About Smith & Wesson Brands, Inc.

Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson®, M&P®, and Gemtech® brands. The company also provides manufacturing services including forging, machining, and precision plastic injection molding services. For more information call (800) 331-0852 or visit www.smith-wesson.com.

Safe Harbor Statement

Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, our expectation that inflationary pressures will persist and firearm market conditions will return to more normalized levels in fiscal 2023; our confidence in our flexible manufacturing model; our expectation that we will benefit from the pricing and product portfolio adjustments that we made during the surge; our belief that we remain well positioned for long-term growth with an agile business model designed to quickly adapt to changes in the marketplace and deliver strong, consistent levels of profitability and drive long-term stockholder value; and our expectation that we will continue generating strong cash flow for the foreseeable future. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability, and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to effectively manage and execute the planned relocation of our headquarters and certain of our operations to Tennessee; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

Contact:

investorrelations@smith-wesson.com

(413) 747-3448

 

Page 3 of 8


SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

     As of:  
     April 30, 2022     April 30, 2021  
              
     (In thousands, except par value and share data)  

ASSETS

 

Current assets:

    

Cash and cash equivalents

   $ 120,728     $ 113,017  

Accounts receivable, net of allowances for credit losses of $36 on April 30, 2022 and $107 on April 30, 2021

     62,695       67,442  

Inventories

     136,660       78,477  

Prepaid expenses and other current assets

     5,569       8,408  

Income tax receivable

     1,945       909  
  

 

 

   

 

 

 

Total current assets

     327,597       268,253  
  

 

 

   

 

 

 

Property, plant, and equipment, net

     135,591       141,612  

Intangibles, net

     3,608       4,417  

Goodwill

     19,024       19,024  

Deferred income taxes

     1,221       —    

Other assets

     10,435       13,082  
  

 

 

   

 

 

 

Total assets

     497,476       446,388  
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

Current liabilities:

    

Accounts payable

   $ 30,042     $ 57,337  

Accrued expenses and deferred revenue

     23,482       33,136  

Accrued payroll and incentives

     17,371       17,381  

Accrued income taxes

     2,673       1,157  

Accrued profit sharing

     13,543       14,445  

Accrued warranty

     1,838       2,199  
  

 

 

   

 

 

 

Total current liabilities

     88,949       125,655  

Deferred income taxes

     —         904  

Finance lease payable, net of current portion

     37,628       38,786  

Other non-current liabilities

     10,385       14,659  
  

 

 

   

 

 

 

Total liabilities

     136,962       180,004  
  

 

 

   

 

 

 

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, 74,641,439 issued and 45,601,069 shares outstanding on April 30, 2022 and 74,222,127 shares issued and 49,937,329 shares outstanding on April 30, 2021

     75       74  

Additional paid-in capital

     278,101       273,431  

Retained earnings

     504,640       325,181  

Accumulated other comprehensive income

     73       73  

Treasury stock, at cost (29,040,370 shares on April 30, 2022 and 24,284,798 on April 30, 2021)

     (422,375     (332,375
  

 

 

   

 

 

 

Total stockholders’ equity

     360,514       266,384  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 497,476     $ 446,388  
  

 

 

   

 

 

 

 

Page 4 of 8


SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

     For the Three Months Ended April 30,     For the Years Ended April 30,  
     2022     2021     2022     2021  
                          
     (In thousands, except per share data)  

Net sales

   $  181,299     $  322,947     $  864,126     $  1,059,195  

Cost of sales

     109,072       177,139       489,562       610,212  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     72,227       145,808       374,564       448,983  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

     1,994       1,963       7,262       7,480  

Selling, marketing, and distribution

     9,581       10,507       43,156       42,603  

General and administrative

     14,000       17,207       72,493       79,268  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     25,575       29,677       122,911       129,351  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income from continuing operations

     46,652       116,131       251,653       319,632  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income/(expense), net:

        

Other income/(expense), net

     624       540       2,868       2,252  

Interest expense, net

     (531     (563     (2,135     (3,919
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income/(expense), net

     93       (23     733       (1,667
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations before income taxes

     46,745       116,108       252,386       317,965  

Income tax expense

     10,610       26,929       57,892       74,394  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

   $ 36,135     $ 89,179     $ 194,494     $ 243,571  

Discontinued operations:

        

Income/(loss) from discontinued operations, net of tax

     —         (144     —         8,478  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 36,135     $ 89,035     $ 194,494     $ 252,049  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic - continuing operations

   $ 0.79     $ 1.72     $ 4.12     $ 4.46  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic - net income

   $ 0.79     $ 1.72     $ 4.12     $ 4.62  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted - continuing operations

   $ 0.79     $ 1.70     $ 4.08     $ 4.40  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted - net income

   $ 0.79     $ 1.70     $ 4.08     $ 4.55  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares outstanding:

        

Basic

     45,547       51,816       47,227       54,613  

Diluted

     45,937       52,423       47,728       55,352  

 

Page 5 of 8


SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     For the Year Ended  
     April 30, 2022     April 30, 2021  
              
     (In thousands)  

Cash flows from operating activities:

    

Income from continuing operations

   $ 194,494     $ 243,571  

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

    

Depreciation and amortization

     30,073       31,575  

Loss on sale/disposition of assets

     625       154  

Provision for losses/(recoveries) on notes and accounts receivable

     689       (739

Impairment of long-lived tangible assets

     86       —    

Deferred income taxes

     (2,125     447  

Stock-based compensation expense

     4,536       4,706  

Changes in operating assets and liabilities:

    

Accounts receivable

     4,058       (5,824

Inventories

     (58,183     25,264  

Prepaid expenses and other current assets

     2,839       (852

Income taxes

     480       (3,643

Accounts payable

     (26,957     25,540  

Accrued payroll and incentives

     (10     4,933  

Accrued profit sharing

     (902     12,248  

Accrued expenses and deferred revenue

     (9,725     (24,633

Accrued warranty

     (361     (1,098

Other assets

     2,561       1,579  

Other non-current liabilities

     (4,364     4,032  
  

 

 

   

 

 

 

Cash provided by operating activities - continuing operations

     137,814       317,260  

Cash used in operating activities - discontinued operations

     —         (1,926
  

 

 

   

 

 

 

Net cash provided by operating activities

     137,814       315,334  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Refunds on machinery and equipment

     —         310  

Payments to acquire patents and software

     (283     (632

Proceeds from sale of property and equipment

     139       113  

Payments to acquire property and equipment

     (23,972     (22,052
  

 

 

   

 

 

 

Cash used in investing activities - continuing operations

     (24,116     (22,261

Cash used in investing activities - discontinued operations

     —         (1,143
  

 

 

   

 

 

 

Net cash used in investing activities

     (24,116     (23,404
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from loans and notes payable

     —         25,000  

Cash paid for debt issuance costs

     —         (450

Payments on finance lease obligation

     (1,087     (996

Payments on notes and loans payable

     —         (185,000

Distribution to AOUT

     —         (25,000

Payments to acquire treasury stock

     (90,000     (110,000

Dividend distribution

     (15,035     (8,223

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

     1,719       3,154  

Payment of employee withholding tax related to restricted stock units

     (1,584     (2,243
  

 

 

   

 

 

 

Cash used in by financial activities - continuing operations

     (105,987     (303,758

Cash used in financial activities - discontinued operations

     —         (166
  

 

 

   

 

 

 

Net cash used in financing activities

     (105,987     (303,924
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     7,711       (11,994

Cash and cash equivalents, beginning of period

     113,017       125,011  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 120,728     $ 113,017  
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information

    

Cash paid for:

    

Interest

   $ 2,219     $ 3,306  

Income taxes

   $ 59,183     $ 80,874  

 

Page 6 of 8


SMITH & WESSON BRANDS, INC. 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     For the Year Ended  
     April 30, 2022     April 30, 2021     April 30, 2022     April 30, 2021  
     $     % of Sales     $     % of Sales     $     % of Sales     $     % of Sales  

GAAP gross profit

   $  72,227       39.8   $  145,808       45.1   $  374,564       43.3   $  448,983       42.4

Relocation expenses

     1,031       0.6     —         —         3,361       0.4     —         —    

COVID-19

     1       0.0     43       0.0     33       0.0     560       0.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 73,259       40.4   $ 145,851       45.2   $ 377,958       43.7   $ 449,543       42.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating expenses

   $ 25,575       14.1   $ 29,677       9.2   $ 122,911       14.2   $ 129,351       12.2

Amortization of acquired intangible assets

     (71     0.0     (83     0.0     (285     0.0     (332     0.0

Transition costs

     —         —         (22     0.0     80       0.0     (7,975     -0.8

COVID-19

     (71     0.0     (67     0.0     (207     0.0     (685     -0.1

Spin related stock-based compensation

     (43     0.0     (296     -0.1     (147     0.0     (738     -0.1

Relocation expenses

     (685     -0.4     —         —         (6,884     -0.8     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 24,705       13.6   $ 29,209       9.0   $ 115,468       13.4   $ 119,621       11.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP operating income

   $ 46,652       25.7   $ 116,131       36.0   $ 251,653       29.1   $ 319,632       30.2

Amortization of acquired intangible assets

     71       0.0     83       0.0     285       0.0     332       0.0

Transition costs

     —         —         22       0.0     (80     0.0     7,975       0.8

COVID-19

     72       0.0     110       0.0     240       0.0     1,245       0.1

Spin related stock-based compensation

     43       0.0     296       0.1     147       0.0     738       0.1

Relocation expenses

     1,716       0.9     —         —         10,245       1.2     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 48,554       26.8   $ 116,642       36.1   $ 262,490       30.4   $ 329,922       31.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP income from operations

   $ 36,135       19.9   $ 89,179       27.6   $ 194,494       22.5   $ 243,571       23.0

Amortization of acquired intangible assets

     71       0.0     83       0.0     285       0.0     332       0.0

Transition costs

     —         0.0     22       0.0     (80     0.0     7,975       0.8

COVID-19

     72       0.0     110       0.0     240       0.0     1,245       0.1

Spin related stock-based compensation

     43       0.0     296       0.1     147       0.0     738       0.1

Relocation expenses

     1,716       0.9     —         —         10,245       1.2     —         —    

Tax effect of non-GAAP adjustments

     (432     -0.2     (119     0.0     (2,486     -0.3     (2,400     -0.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income from operations

   $ 37,605       20.7   $ 89,571       27.7   $ 202,845       23.5   $ 251,461       23.7
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP income from operations per share - diluted

   $ 0.79       $ 1.70       $ 4.08       $ 4.40    

Amortization of acquired intangible assets

     —           —           0.01         0.01    

Transition costs

     —           —           —           0.14    

COVID-19

     —           —           0.01         0.02    

Spin related stock-based compensation

     —           0.01         —           0.01    

Relocation expenses

     0.04         —           0.21         —      

Tax effect of non-GAAP adjustments

     (0.01       —           (0.05       (0.04  
  

 

 

     

 

 

     

 

 

     

 

 

   

Non-GAAP income from operations per share - diluted

   $ 0.82       $ 1.71       $ 4.25 (a)      $ 4.54    
  

 

 

     

 

 

     

 

 

     

 

 

   

 

(a)

Non-GAAP net income per share does not foot due to rounding.

 

Page 7 of 8


SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO NON-GAAP ADJUSTED EBITDAS

(In thousands)

(Unaudited)

 

     For the Three Months Ended      For the Year Ended  
     April 30, 2022      April 30, 2021      April 30, 2022     April 30, 2021  

GAAP net income

   $  36,135      $ 89,179      $  194,494     $  243,571  

Interest expense

     570        585        2,310       4,056  

Income tax expense

     10,610        26,929        57,892       74,394  

Depreciation and amortization

     7,636        7,420        29,982       30,685  

Stock-based compensation expense

     972        1,314        4,536       4,706  

COVID-19

     72        110        240       1,245  

Transition costs

     —          22        (80     7,975  

Relocation expense

     1,716        —          10,245       —    
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP Adjusted EBITDAS

   $ 57,711      $  125,559      $ 299,619     $ 366,632  
  

 

 

    

 

 

    

 

 

   

 

 

 

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

RECONCILIATION OF OPERATING CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

(In thousands)

(Unaudited)

 

     For the Three Months Ended     For the Year Ended  
     April 30, 2022     April 30, 2021     April 30, 2022     April 30, 2021  

Net cash provided by operating activities

   $  25,539     $  118,823     $  137,814     $  317,260  

Net cash used in investing activities

     (8,905     (3,691     (24,116     (22,261
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 16,634     $ 115,132     $ 113,698     $ 294,999  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 8 of 8