Post Earnings Coverage as Smith and Wesson’s Earnings Top Expectations as Revenue Soars 40 Percent

LONDON, UK / ACCESSWIRE / September 7, 2016 / Active Wall St. announces its post-earnings coverage on Smith & Wesson Holding Corporation (NASDAQ: SWHC). The company posted its financial results for the first quarter fiscal 2017 (Q1 FY17) on September 01, 2016. The Springfield, Massachusetts-based company reported a 40.1% y-o-y growth in its revenue, outperforming market expectation. Register with us now for your free membership at: http://www.activewallst.com/register/.

Today, AWS is promoting its earnings coverage on SWHC; touching on stocks like TASER International Inc. (NASDAQ:TASR) and Sturm, Ruger & Company, Inc. (NYSE:RGR). Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=SWHC

http://www.activewallst.com/registration-3/?symbol=TASR

Earnings Reviewed

For Q1 FY17, Smith & Wesson reported net sales of $206.95 million compared to revenue of $147.76 million recorded at the end of Q1 FY16. Revenue readings beat market estimate of $197.0 million. The firearm manufacturer recorded GAAP net income of $32.62 million, or $0.57 per diluted share, in Q1 FY17, compared $14.41 million, or $0.26 per diluted share, in Q1 FY16.

Non-GAAP net income for Q1 FY17 surged to $35.13 million, or $0.62 per diluted share from $17.67 million, or $0.32 per diluted share, in Q1 FY16. The company’s non-GAAP net income outperformed market expectations of $0.53 per diluted share.

“We are very pleased with our first quarter results, which exceeded our financial guidance. We believe that higher revenue was driven by strong consumer demand as reflected in adjusted background checks from the National Instant Criminal Background Check System (NICS) as well as our own market share gains,” said Smith & Wesson CEO James Debney.

Operational Insights

During the reported quarter, Smith & Wesson’s operating income was $52.52 million, up from $29.82 million in Q1 FY16. The company’s total operating expense for Q1 FY17 was $35.05 million which was above the $29.82 million in the prior year comparable quarter.

The company’s gross margin for the reported quarter stood at 42.3% compared to 39.8% in the year ago period. For the reported quarter, non-GAAP adjusted earnings before interest, taxes, depreciation, and amortization was $65.82 million, or 31.8% of net sales, compared to $38.87 million, or 26.3% of net sales, in Q1 FY16.

Cash Flow & Balance Sheet

In the quarter ended on July 31, 2016, Smith & Wesson generated $38.08 million in cash from operations compared to $16.63 million during Q1 FY16. Additionally, the company had $215.01 million in cash and cash equivalents as on July 31, 2016, compared to $191.28 million as of April 30, 2016.

Outlook

For Q2 FY17, Smith & Wesson expects net sales to be in the range of $220 million to $230 million. The company anticipates GAAP EPS to be in the range of $0.44 per share and $0.48 per share and non-GAAP EPS is forecasted to be in the range of $0.53 per share to $0.57 per share.

In its guidance for full year fiscal 2017, the company anticipates non-GAAP earnings range of $2.38per share to $2.48 per share on revenues in the range of $900 million to $920 million.

Peer Earnings

TASER International Inc., which reported its second quarter 2016 earnings on August 4, 2016, reported that net sales grew 26% y-o-y to $58.76 million in the Q2 FY16. However, the company’s earnings fell to $3.65 million, or $0.07 per diluted share, from $6.10 million, or $0.11 per diluted share, in Q2 FY15.

In its earnings release on August 2, 2016, Sturm, Ruger & Company, Inc. reported Q2 FY16 diluted earnings of $1.22 per share on net sales of $167.9 million. The company had recorded diluted earnings of $0.91 per share on net sales of $140.9 million during the second quarter of fiscal 2015.

Stock Performance

On September 06, 2016, Smith & Wesson’s shares advanced 0.98% to close the trading session at $27.96. A total volume of 3.85 million shares were traded during the session, which was above the 3 months average volume of 2.56 million. The company’s stock price has surged 29.93% in the past three months. Furthermore, the stock has gained 27.21% since the beginning of the year and 53.96% in the last one year. The stock is trading at a PE ratio of 16.55.

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