Smith & Wesson Brands, Inc. reported its financial results for the fourth quarter and full fiscal year 2025, which ended on April 30, 2025. Here are the key points from the report:
## Q4 FY 2025 Financial Highlights
– **Net Sales**:
– $140.8 million, representing a **decrease** of 11.6% from the same quarter last year.
– **Gross Margin**:
– GAAP gross margin was 28.8%, a decrease from 35.5% in the comparable quarter last year.
– Non-GAAP gross margin was 29.2%.
– **Earnings per Share (EPS)**:
– GAAP EPS was $0.19 per diluted share, down from $0.59 per diluted share in the same quarter the previous year.
– Non-GAAP EPS was $0.20 per diluted share.
## Full Year Fiscal 2025 Financial Highlights
– **Net Sales**:
– $474.7 million, marking a **decrease** of 11.4% from the prior fiscal year.
– **Gross Margin**:
– GAAP gross margin was 26.8%, lower than 29.5% in the prior fiscal year.
– **Earnings per Share**:
– GAAP EPS was $0.30 per diluted share, down from $0.89 per diluted share in the previous fiscal year.
– Non-GAAP EPS was $0.33 per diluted share.
## Financial Ratios
– **Non-GAAP Adjusted EBITDAS**:
– $24.1 million in Q4 FY 2025, representing 17.2% of net sales, down from $37.6 million in the same quarter last year.
– $67.3 million for the full fiscal year 2025, at 14.3% of net sales, compared to $96.6 million in the prior fiscal year at 18.0% of net sales.
## Management Statements
– Mark Smith, President and CEO, noted that lower sales and production volumes, along with mix factors, impacted margins in Q4.
– Deana McPherson, CFO, cited negative impacts from inflation, high interest rates, and tariff concerns on the firearm market conditions.
## Future Outlook
– Management expects 2026 demand for firearms to be similar to 2025, subject to economic headwinds like inflation and tariff-related cost increases.
– The Board of Directors authorized a $0.13 per share quarterly dividend for stockholders.
## Conference Call and Webcast
– A conference call and webcast were scheduled to discuss the financial and operational results.
## Reconciliation of Financial Measures
– Non-GAAP measures were presented to provide a better understanding of performance trends.
– Adjustments for income were made to exclude costs related to relocation and other specific items.
## Immaterial Correction of an Error
– An immaterial error related to accrued legal expenses was identified and corrected, impacting financial statements for 2024 and 2025.
By analyzing the financial results, it is evident that Smith & Wesson Brands, Inc. faced challenges such as decreased sales and gross margins in Q4 FY 2025 compared to the previous year. The company highlighted macro-economic factors impacting the firearms market while expressing confidence in its ability to navigate challenges and maintain a leadership position. They provided insights into the future outlook and strategic decisions to address ongoing market conditions.
### SMITH & WESSON BRANDS, INC. CONSOLIDATED BALANCE SHEETS
All amounts in thousands
| April 30, 2025 | April 30, 2024 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $25,231 | $60,839 |
| Accounts receivable, net | 55,868 | 59,071 |
| Inventories | 189,840 | 160,500 |
| Prepaid expenses and other current assets | 6,260 | 4,973 |
| Income tax receivable | 66 | 1,948 |
| Total current assets | 277,265 | 287,331 |
| Property, plant, and equipment, net of accumulated depreciation and amortization | 242,648 | 252,633 |
| Intangibles, net | 2,409 | 2,598 |
| Goodwill | 19,024 | 19,024 |
| Deferred income taxes | 10,260 | 7,228 |
| Other assets | 8,006 | 8,614 |
| Total assets | $559,612 | $577,428 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | 26,887 | 41,831 |
| Accrued expenses and deferred revenue | 24,678 | 24,489 |
| Accrued payroll and incentives | 9,060 | 17,147 |
| Accrued profit sharing | 4,636 | 9,098 |
| Accrued warranty | 1,379 | 1,813 |
| Total current liabilities | 66,640 | 94,378 |
| Notes and loans payable | 79,096 | 39,880 |
| Finance lease payable, net of current portion | 33,703 | 35,404 |
| Other non-current liabilities | 7,719 | 7,852 |
| Total liabilities | 187,158 | 177,514 |
| Stockholders’ equity: | ||
| Common stock | 76 | 75 |
| Additional paid-in capital | 298,075 | 289,994 |
| Retained earnings | 532,615 | 542,414 |
| Treasury stock, at cost | (458,312) | (432,642) |
| Total stockholders’ equity | 372,454 | 399,914 |
| Total liabilities and stockholders’ equity | $559,612 | $577,428 |
### SMITH & WESSON BRANDS, INC. CONSOLIDATED STATEMENTS OF INCOME
All amounts in thousands, except per share data
| For the Three Months Ended April 30, 2025 | For the Three Months Ended April 30, 2024 | For the Year Ended April 30, 2025 | For the Year Ended April 30, 2024 | |
|---|---|---|---|---|
| Net sales | $140,762 | $159,148 | $474,661 | $535,833 |
| Cost of sales | 100,217 | 102,646 | 347,478 | 377,740 |
| Gross profit | 40,545 | 56,502 | 127,183 | 158,093 |
| Operating income | 13,130 | 27,007 | 23,884 | 47,101 |
| Net income | 8,634 | 27,335 | 13,425 | 41,362 |
| Net income per share | $0.19 | $0.59 | $0.30 | $0.89 |
| Weighted average number of common shares outstanding: | ||||
| – Basic | 44,040 | 45,544 | 44,484 | 45,813 |
| – Diluted | 44,508 | 46,043 | 44,932 | 46,248 |
### SMITH & WESSON BRANDS, INC. RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
All amounts in thousands
| For the Three Months Ended April 30, 2025 | For the Three Months Ended April 30, 2024 | For the Year Ended April 30, 2025 | For the Year Ended April 30, 2024 | |
|---|---|---|---|---|
| Non-GAAP net income | $9,007 | $22,130 | $14,645 | $44,382 |
| Non-GAAP net income per share | $0.20 | $0.48 | $0.33 | $0.96 |
| Non-GAAP Adjusted EBITDAS | $24,141 | $37,580 | $67,325 | $96,601 |
| Non-GAAP Adjusted EBITDAS Margin | 17.2% | 23.6% | 14.3% | 18.0% |
### SMITH & WESSON BRANDS, INC. RECONCILIATION OF NET CASH (USED IN) / PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
All amounts in thousands
| For the Three Months Ended April 30, 2025 | For the Three Months Ended April 30, 2024 | For the Year Ended April 30, 2025 | For the Year Ended April 30, 2024 | |
|---|---|---|---|---|
| Net cash provided by/(used in) operating activities | $40,828 | $43,616 | $(7,223) | $106,739 |
| Payments to acquire property and equipment | (7,291) | (5,571) | (21,605) | (90,759) |
| Free cash flow | $33,537 | $38,045 | $(28,828) | $15,980 |
