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Smith & Wesson Holding Corp Reports Operating Results (10-Q)

March 10, 2011 | About:
10qk

10qk

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Smith & Wesson Holding Corp (SWHC) filed Quarterly Report for the period ended 2011-01-31.

Smith & Wesson Holding Corp has a market cap of $239.1 million; its shares were traded at around $3.97 with a P/E ratio of 23.3 and P/S ratio of 0.6.

Highlight of Business Operations:

Net product and services sales for the three months ended January 31, 2011 were $89,337,000, a $1,634,000, or 1.8%, decrease from net product and services sales of $90,971,000 for the three months ended January 31, 2010. Firearm product and services sales were $79,238,000 for the three months ended January 31, 2011, an increase of $4,504,000, or 6.0%, from the three months ended January 31, 2010, while perimeter security sales were $10,099,000 for the three months ended January 31, 2011 compared with $16,237,000 for the three months ended January 31, 2010. Within firearms, there was a significant increase in consumer demand for our Sigma series of pistols due to our price repositioning strategy and increased promotional activity. In addition, our BODYGUARD® 380 pistol, a new product that began shipping in the first quarter of fiscal 2011, continues to have significant market demand. Tactical rifle sales were below the comparable quarter last year as a result of the consumer market returning to more normal levels following the significant increase in demand that started in our second quarter of the fiscal year ended April 30, 2009. Walther product sales were down significantly on increased competition in the .380 and .22 caliber product lines. Hunting product sales increased 14.5% over the prior year quarter on improved black powder, rimfire, and bolt action product sales. Within perimeter security sales, federal funding deficits and price-focused competition resulted in reduced sales.

Net loss for the three months ended January 31, 2011 was $52,836,000, or $0.88 per fully diluted share, compared with net income of $3,116,000, or $0.05 per fully diluted share, for the three months ended January 31, 2010. The impairment charge recorded in the period had a $0.80 negative impact on basic and fully diluted earnings per share for the three months ended January 31, 2011.

Net product and services sales for the nine months ended January 31, 2011 were $280,542,000, a $21,836,000, or 7.2%, decrease from net product and services sales of $302,378,000 for the nine months ended January 31, 2010. Firearm product and services sales were $240,566,000 for the nine months ended January 31, 2011, a decrease of $27,125,000, or 10.1%, from the nine-month period ended January 31, 2010. Perimeter security sales were $39,976,000 for the nine months ended January 31, 2011 compared with $34,687,000 for the nine months ended January 31, 2010. The nine months ended January 31, 2010 included only the approximately six-and-a-half months subsequent to our July 20, 2009 acquisition of USR. Within firearms, all handgun and tactical rifle product lines, except for premium products, were flat or reduced from the prior year nine-month period. Hunting product sales increased 15.7% over the prior year nine-month period on improved black powder, rimfire, and bolt action product sales. Including pre-acquisition sales for the comparable period, perimeter security sales were slightly below the prior year due to factors associated with the ongoing economic downturn and reduced federal and corporate funding.

Net loss for the nine months ended January 31, 2011 was $83,909,000, or $1.40 per fully diluted share, compared with net income of $29,844,000, or $0.48 per fully diluted share, for the nine months ended January 31, 2010. The impairment charges recorded in the period had a $1.45 negative impact on basic and fully diluted earnings per share for the nine months ended January 31, 2011.

Sales into our sporting goods distribution channel were approximately $68,822,000 for the three months ended January 31, 2011, an increase of 17.0% from the comparable quarter last year. Law enforcement firearm sales of $5,086,000 were 27.9% lower than in the comparable quarter last year, which included large orders from the Detroit and West Virginia police departments. Federal government firearm sales of $533,000 were 42.2% lower than in the comparable quarter last year. International firearm sales for the three months ended January 31, 2011 of $4,224,000 decreased 42.9% from the comparable quarter last year. Perimeter security corporate sales were $2,251,000 while federal government sales were $6,651,000 for the three months ended January 31, 2011. The remaining perimeter security sales related to state and local government and transportation customers.

Sales into our sporting goods distribution channel were approximately $205,267,000 for the nine months ended January 31, 2011, a decrease of 5.6% from the comparable period last year as a result of the decrease in tactical rifle demand. Law enforcement firearm sales of $16,716,000 were 24.5% lower than in the comparable period last year. Federal government firearm sales of $2,260,000 were down $846,000, or 27.2%, from the comparable period last year. International firearm sales of $14,861,000 for the nine months ended January 31, 2011 decreased 37.0% from the comparable period last year. Perimeter security corporate sales were $6,611,000 while federal government sales were $30,376,000 for the nine months ended January 31, 2011. The remaining perimeter security sales related to state and local government and transportation customers.

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