Smith & Wesson Holding Corp. reported revenues rose 22 percent in its fourth quarter ended April 30 and earnings that easily topped Wall Street expectations.
ADVERTISEMENT >Fourth Quarter Fiscal 2016 Financial Highlights
Quarterly net sales were $221.1 million, an increase of 22.2 percent over the fourth quarter last year. Firearms division net sales of $203.7 million increased by 22.4 percent over the comparable quarter last year. Accessories division net sales of $17.5 million increased by 19.8 percent over the comparable quarter last year.Gross margin for the quarter was 41.6 percent compared with 37.1 percent for the comparable quarter last year.Quarterly GAAP net income was $35.6 million, or $0.63 per diluted share, compared with $21.9 million, or $0.40 per diluted share, for the comparable quarter last year. Fourth quarter 2016 and 2015 GAAP net income per diluted share included an expense of $1.7 million and $1.5 million, respectively, for amortization, net of tax, related to the Battenfeld Technologies, Inc. (BTI) acquisition.Quarterly non-GAAP net income was $37.4 million, or $0.66 per diluted share, compared with $24.9 million, or $0.45 per diluted share, for the comparable quarter last year.Quarterly non-GAAP Adjusted EBITDAS was $68.7 million, or 31.1 percent of net sales.Full Year Fiscal 2016 Financial Highlights
Full year net sales totaled $722.9 million, an increase of 31.0 percent from last year. Firearms division net sales were $657.6 million, an increase of 23.8 percent from last year. Accessories division net sales were $65.3 million, an increase from $20.6 million from last year, a year in which the company acquired BTI and therefore reported only five months of accessories division sales in 2015.Full year gross margin was 40.6 percent compared with 35.3 percent last year.Full year GAAP income from continuing operations was $94.0 million, or $1.68 per diluted share, compared with $49.8 million, or $0.90 per diluted share, last year.Full year non-GAAP income from continuing operations was $1.83 per diluted share, compared with $1.02 per diluted share last year.Full year non-GAAP Adjusted EBITDAS from continuing operations was $202.4 million, or 28.0 percent of net sales."In our firearms division, we made several important new product introductions and continued to leverage our flexible manufacturing model, allowing us to benefit from strong consumer demand," said James Debney, Smith & Wesson Holding Corporation President and Chief Executive Officer. "In our first full year of accessories revenue, we expanded our product portfolio organically as well as through a targeted acquisition, delivering double-digit top line revenue growth. Looking ahead to fiscal 2017, we expect that a strong balance sheet, combined with our track record of successful acquisitions, positions us well for an expanding role in the market for products for shooting, hunting, and rugged outdoor enthusiasts."
Gross margin performance remained strong throughout fiscal 2016, driven by robust volumes in our firearms division and favorably impacted by the strong gross margins in the accessories division, said Jeff Buchanan, Executive Vice President, Chief Financial Officer, and Chief Administrative Officer.
"In fiscal 2016, we generated $168.6 million in operating cash flow, establishing a new company record," Buchanan said. "We ended the year with cash and cash equivalents totaling $191.3 million and total bank debt and Senior Notes of $175.3 million, leaving us with zero net debt. In fiscal 2017, we expect to use the strength of our balance sheet, including our unused $175 million revolving line of credit, to fuel growth opportunities, both organic and inorganic."