Leading firearm manufacturer,
Smith & Wesson Holding Corp.
) reported earnings of 40 cents per share in the first quarter of
fiscal 2014, 42.8% higher than 28 cents reported in the year-ago
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SMITH & WESSON (SWHC): Free Stock Analysis
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The results of the company were 11.1% higher than the Zacks
Consensus Estimate of 36 cents.
The company reported net sales of $171 million in the quarter, up
25.74% from $136 million in the year-earlier period. The
year-over-year growth was driven by strong customer demand for
firearms, backed by an increase in its manufacturing capacity. In
addition, the solid performance from its M&P products
continued to boost the top line.
Net sales in the reported quarter were higher than the Zacks
Consensus Estimate of $165 million.
Gross profit grew to 45% of net sales from 40.1% a year ago. The
increase in sales volume and a better product mix benefited
margins. Operating expenses as a percentage of revenue declined
by 20 basis points year over year.
The company continues to invest consistently in research and
development (R&D) activities to develop new products. In the
first quarter of fiscal 2014, the company spent $1.29 million on
R&D versus $1.11 million in the prior-year quarter.
Operating income clocked $55.1 million versus $36.1 million in
the year-earlier period, increasing 52.6%.
Smith & Wesson's decision to refinance its debts during the
reported quarter is likely to lower its interest expenses
Cash and cash equivalents as of Jul 31, 2013, were $146.5 million
versus $100.5 million as of Apr 30, 2013.
Cash from operating activities was $19.01 million in the first
quarter of fiscal 2014 versus $9.27 million in the first quarter
of fiscal 2013.
The company expects total revenue in the second quarter of fiscal
2014 in the range of $135 million to $140 million. GAAP earnings
per share in the second quarter of fiscal 2014 are expected
between 20 cents and 22 cents.
Total revenue for fiscal 2014 is now expected in the range of
$610 million to $620 million, up from the prior forecast of $605
million to $615 million. This reflects an estimated 4.7%
year-over-year growth at the mid point. GAAP earnings per share
for fiscal 2014 are expected between $1.30 and $1.45.
Other Company Releases
Johnson Outdoors Inc.
) reported earnings of $1.37 per share in the third quarter of
fiscal 2013, surpassing the Zacks Consensus Estimate of $1.02.
Sturm, Ruger & Company Inc.
) announced second quarter 2013 operating earnings of $1.63 per
share, surpassing the Zacks Consensus Estimate of $1.18.
Arctic Cat Inc.
) announced fiscal first quarter 2014 operating earnings of 40
cents per share, surpassing the Zacks Consensus Estimate of 20
Smith & Wesson continues to post strong results. The firearm
maker has surpassed our expectation for the last eight quarters.
The company's decision to buy back shares worth $100 million to
increase shareholder value is appreciable.
Smith & Wesson Holding Corp. has 1,475 full time employees
and a market cap of $0.74 billion. The company manufactures,
designs and supplies a large variety of firearms and related
items to its worldwide customers. Smith & Wesson
currently has a Zacks Rank #3 (Hold).