– Record Gross Margin of 47.3%
– Record Q1 Net Sales of $274.6M
– Two-Year Compounded Sales Growth of Nearly 170%
– EPS of $1.57/Share and EBITDAS of 39.9%
SPRINGFIELD, Mass., Sept. 1, 2021 /PRNewswire/ — Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the first quarter of fiscal 2022, ended July 31, 2021. Unless otherwise indicated, any reference to income statement items refers to results from continuing operations.
First Quarter Fiscal 2022 Financial Highlights
- Net sales were $274.6 million, an increase of $44.7 million, or 19.5%, over the comparable quarter last year.
- Gross margin was 47.3%, compared with gross margin of 40.2% for the comparable quarter last year.
- Quarterly GAAP net income was $76.9 million, or $1.57 per diluted share, compared with $43.3 million, or $0.77 per diluted share, for the comparable quarter last year.
- Quarterly non-GAAP net income was $77.1 million, or $1.57 per diluted share, compared with $46.8 million, or $0.83 per diluted share, for the comparable quarter last 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.
- Quarterly non-GAAP Adjusted EBITDAS was $109.6 million, or 39.9% of net sales, compared with $72.5 million, or 31.5% of net sales, for the comparable quarter last year.
Mark Smith, President and Chief Executive Officer, commented, “Our flexible manufacturing model and strong consumer preference for our products at the retail counter combined to deliver the highest first quarter net revenue in the company’s history, marking the fifth consecutive quarter of top line records. Even more remarkable, our team has been able to deliver nearly 170% two-year compounded growth, significantly outpacing the competition, while simultaneously lowering operating costs over this same timeframe. This is a direct result of significant strides the team has made in executing our strategy to streamline business operations and increase flexibility, and has driven an incredible EBITDAS margin of nearly 40% in the quarter. But more importantly, we believe we are well positioned for the ever-changing market conditions in our industry, to maintain our leadership position in the industry, and continue delivering impressive profitability in any environment.”
Smith continued, “We are also thrilled to introduce our new M&P12 shotgun, which marks our entry into a brand-new category for the iconic Smith & Wesson brand, and presents a significant opportunity to continue capitalizing on the momentum we’ve built over the past year with the consumer. Within the first 24 hours of the announcement, we had tallied over 3 million consumer impressions and 300,000 engagements on social media, already making this one of our most widely viewed and most successful launches to date. We are excited to continue innovating in this category and look forward to its growth potential.”
Deana McPherson, Executive Vice President and Chief Financial Officer, commented, “Our first quarter results continue to demonstrate our ability to react to the changing needs of the market, delivering a 19.5% increase over last year’s results and securing a two-year compounded growth rate of nearly 170%. This increase in sales, combined with strong expense containment, resulted in a record gross margin of 47.3% for the quarter while also generating $109.1 million in cash. We believe our ability to grow our top line without adding significant fixed costs, while also leveraging synergies from the spin-off, have been key contributors to our profitability and position us well for the adjusting market. As we begin to replenish inventory in the channel and in our warehouse, we believe the flexibility of our operations and the strength of our balance sheet, combined with the hard work and ingenuity of our R&D and marketing teams will enable us to continue to invest in our business and capture market share, while returning capital to our stockholders. Our Board of Directors has again authorized our $0.08 per share quarterly dividend, which will be paid to stockholders of record on September 14th with payment to be made on September 28th.”