SWBI Stock Price Increases Over 15%: Why It Happened

By Amit Chowdhry ● June 18, 2021
  • The stock price of Smith & Wesson Brands Inc (NASDAQ: SWBI) increased by over 15% during intraday trading. This is why it happened.

The stock price of Smith & Wesson Brands Inc (NASDAQ: SWBI) increased by over 15% during intraday trading. Investors are responding positively to Smith & Wesson Brands announcing its financial results for the fourth quarter and full fiscal year 2021, ended April 30, 2021. 

On August 24, 2020, the company had completed the previously announced spin-off of its outdoor products and accessories business. And as of the second quarter, all historical financial information for that business is reported as discontinued operations. 

Q4 Fiscal 2021 Financial Highlights

— Quarterly net sales were $322.9 million compared with $193.0 million for the comparable quarter last year, up 67.3%.

— Gross margin for the quarter was 45.1% compared to 32.2% for the comparable quarter last year.

— Quarterly GAAP net income was a record $89.2 million, or $1.70 per diluted share, compared to $20.9 million, or $0.38 per diluted share, for the comparable quarter last year.

— Quarterly non-GAAP net income was $89.6 million, or $1.71 per diluted share, compared to $27.5 million, or $0.50 per diluted share, for the comparable quarter last year. The 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. 

— Quarterly non-GAAP Adjusted EBITDAS was $125.6 million, or 38.9% of net sales, compared to $51.6 million, or 26.7% of net sales, for the comparable quarter last year.

FY Fiscal 2021 Financial Highlights

— Full year net sales were $1.1 billion compared to $529.6 million for the prior year, an increase of 100%.

— Gross margin of 42.4% compared with 31.3% for the prior year.

— Full year GAAP net income was $243.6 million, or $4.40 per diluted share, compared to GAAP net income of $27.7 million, or $0.50 per diluted share, for the prior year.

— Full year non-GAAP net income was $251.5 million, or $4.54 per diluted share, compared to $32.1 million, or $0.58 per diluted share, for the prior year. And 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. 

— Full year non-GAAP Adjusted EBITDAS was $366.6 million, or 34.6% of net sales, compared to $92.7 million, or 17.5% of net sales, for the prior year.

KEY QUOTES:

“The results of the past year, in spite of the unthinkable challenges that we faced as a nation and as a company, are a tremendous testament to the resolve of our dedicated employees, the power of the Smith & Wesson brand, and the strength of the partnerships we have with our customers. Our employees more than doubled the prior year sales, passed a milestone of $1 billion in revenue, and by every financial and operating metric, have delivered the most successful year in the 169 year history of the company. But most importantly, we have set a rock solid foundation for the long term success of the company, with astounding market share growth. During the past fiscal year, the US firearms market experienced record growth of 42%, meanwhile shipments from Smith & Wesson far surpassed the industry, growing by 70%. Strong consumer preference for our products combined with our ability to rapidly react to the increased demand has placed us in a clear leadership position as we enter into our first full fiscal year as a standalone pure-play firearms company.”

— Mark Smith, President and Chief Executive Officer

“The hard work and dedication of all of our employees, combined with record-breaking demand for our high-quality products drove equally record-breaking financial results for the year, including record revenue, net income, earnings per share, and cash generation. We began our first year as a pure-play firearm company with clear strategic priorities, and we have delivered on our strategy. During fiscal 2021, we invested in our business and our people, we repaid all of our bank debt, we repurchased over 10% of our outstanding common stock, and we began paying our stockholders a quarterly dividend for the first time in company history. Continuing with our capital allocation strategy, I am pleased to announce that our Board has authorized a new $50 million share repurchase program as well as a 60% increase in our quarterly dividend to 8 cents per share. This quarter’s dividend will be paid to stockholders of record on July 1st with payment to be made on July 6th.”

— Deana McPherson, Executive Vice President and Chief Financial Officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.