Smith & Wesson Holding’s CEO Discusses F1Q13 Results – Earnings Call Transcript

Smith & Wesson Holding Corporation. (SWHC) F1Q13 Earnings Call September 6, 2012 5:00 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the First Quarter 2013 Smith & Wesson Holding Corporation Earnings Conference Call. My name is [Colby] and I will be your operator for today.

[Operator Instructions]. And as a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Liz Sharp, Vice President of Investor Relations. Please proceed, ma’am.

Liz Sharp – VP, IR
Thank you and good afternoon. Our comments today may contain predictions, estimates and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend and other similar expressions is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding sales margins, expenses and earnings for future periods, our product development and strategies and liquidity, and anticipated cash needs and availability. Our forward-looking statements represent our current judgment about the future and they are subject to various risks and uncertainties.

Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings, including our Forms S3, 8-K, 10-K and 10-Q. You can find those documents as well as the replay of this call on our website at smith-wesson.com.

Today’s call contains time-sensitive information that is accurate only as of this time, and we assume no obligation to update any forward-looking statements contained herein. Our actual results could differ materially from our statements today.

Now I will turn the call over to our President and CEO, James Debney.

James Debney – President and CEO
Good afternoon. Thank you for joining us and for your interest in our company. With me on the call today is Jeff Buchanan, our Chief Financial Officer, who later on will provide a recap of our financial performance and an updated outlook.

Today we are very pleased to report that we delivered yet another strong quarter, one that clearly demonstrates the results of our focus on and our commitment to our core firearms business. With a strong consumer market for firearms and a solid portfolio of both established and newer product all aligned to consumer preferences, our team made great progress on executing several key strategic and operational initiatives. In the process, we delivered results that again set a number of new records for company performance. With that, let me provide some of the highlights from our first quarter.

We again delivered record sales, another quarter in which our operations team did an excellent job accelerating our planned increases in manufacturing capacity, and working closely with our suppliers to enable them to ramp up to higher volumes. All of our combined operational activities contributed to record profitability, as reflected in net income and record earnings per share from continuing operations.

Our newest addition to the M&P family, the M&P Shield, remained in very high demand by both consumers and professionals, and backlog for this product continue to grow. Our overall backlog remained strong at $392 million. We used our cash position in the quarter to purchase some of our bonds in the open market. And lastly, we concluded the sale of our discontinued operations.

Overall, in the first quarter we demonstrated that we have the key components in place to deliver on opportunities for future profitable growth. These components include a strong portfolio of products that consumers desire, an operations team and suppliers that can deliver excellent performance, and an organization that has an ongoing commitment to lowering our costs and increasing our efficiency. Based on our continued focus on firearms, our successful results for the first quarter and our current outlook for the business, we are increasing our full-year fiscal 2013 guidance.

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