Smith & Wesson Brands, Inc 8-K/A, filed Dec 6, 2021

About this 8-K/A

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Smith & Wesson Brands, Inc. (SWBI)

8-K/A 2021-12-06 For: 2021-12-02

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Added on April 04, 2026

Smith & Wesson Brands, Inc filed this 8-K/A on December 6, 2021, reporting on events of December 2, 2021.

SMITH & WESSON BRANDS, INC.

Date: December 6, 2021

/s/ Deana L. McPherson

Deana L. McPherson

Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Exhibit Number		Exhibits

99.1		Press release from Smith & Wesson Brands, Inc., dated December 2, 2021, entitled “Smith & Wesson Brands, Inc. Reports Second Quarter Fiscal 2022 Financial Results”

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	As of:
	October 31, 2021			April 30, 2021
	(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents	$	159,391		$	113,017
Accounts receivable, net of allowances for credit losses of $38 on October 31, 2021 and $107 on April 30, 2021		44,226			67,442
Inventories		120,277			78,477
Prepaid expenses and other current assets		8,321			8,408
Income tax receivable		1,717			909

Total current assets		333,932			268,253

Property, plant, and equipment, net		136,932			141,612
Intangibles, net		4,322			4,417
Goodwill		19,024			19,024
Other assets		10,966			13,082

		505,176			446,388

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	49,070		$	57,337
Accrued expenses and deferred revenue		31,958			33,136
Accrued payroll and incentives		11,068			17,381
Accrued income taxes		1,722			1,157
Accrued profit sharing		7,777			14,445
Accrued warranty		2,142			2,199

Total current liabilities		103,737			125,655
Deferred income taxes		904			904
Finance lease payable, net of current portion		38,228			38,786
Other non-current liabilities		13,999			14,659

Total liabilities		156,868			180,004

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $.001 par value, 100,000,000 shares authorized, 74,546,592 issued and 48,294,374 shares outstanding on October 31, 2021 and 74,222,127 shares issued and 49,937,329 shares outstanding on April 30, 2021		75			74
Additional paid-in capital		275,229			273,431
Retained earnings		445,306			325,181
Accumulated other comprehensive income		73			73
Treasury stock, at cost (26,252,218 shares on October 31, 2021 and 24,284,798 on April 30, 2021)		(372,375	)		(332,375	)

Total stockholders’ equity		348,308			266,384

	$	505,176		$	446,388


	For the Three Months Ended October 31,						For the Six Months Ended October 31,
	2021			2020			2021			2020
	(In thousands, except per share data)
Net sales	$	230,479		$	248,729		$	505,088		$	478,614
Cost of sales		128,484			147,656			273,151			285,117

Gross profit		101,995			101,073			231,937			193,497

Operating expenses:
Research and development		1,744			1,855			3,552			3,761
Selling, marketing, and distribution		11,423			11,614			22,057			21,609
General and administrative		23,436			23,224			41,049			45,007

Total operating expenses		36,603			36,693			66,658			70,377

Operating income from continuing operations		65,392			64,380			165,279			123,120

Other income/(expense), net:
Other income/(expense), net		833			693			1,493			760
Interest expense, net		(466	)		(1,490	)		(1,011	)		(2,806	)

Total other income/(expense), net		367			(797	)		482			(2,046	)

Income from operations before income taxes		65,759			63,583			165,761			121,074
Income tax expense		14,824			14,465			37,944			28,657

Income from continuing operations	$	50,935		$	49,118		$	127,817		$	92,417
Discontinued operations:
Income from discontinued operations, net of tax		—			3,123			—			8,209

Net income	$	50,935		$	52,241		$	127,817		$	100,626

Net income per share:
Basic—continuing operations	$	1.06		$	0.88		$	2.65		$	1.66

Basic—net income	$	1.06		$	0.93		$	2.65		$	1.81

Diluted—continuing operations	$	1.05		$	0.87		$	2.63		$	1.64

Diluted—net income	$	1.05		$	0.92		$	2.63		$	1.78

Weighted average number of common shares outstanding:
Basic		48,147			55,914			48,270			55,691
Diluted		48,692			56,531			48,524			56,475


	For the Six Months Ended
	October 31, 2021			October 31, 2020
	(In thousands)
Cash flows from operating activities:
Income from continuing operations	$	127,817		$	92,417
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		15,210			17,129
Loss on sale/disposition of assets		57			3
Provision for losses on notes and accounts receivable		781			29
Impairment of long-lived tangible assets		86			—
Stock-based compensation expense		2,366			2,075
Changes in operating assets and liabilities:
Accounts receivable		22,435			(7,787	)
Inventories		(41,800	)		24,852
Prepaid expenses and other current assets		87			(43	)
Income taxes		(242	)		(8,267	)
Accounts payable		(8,514	)		28,331
Accrued payroll and incentives		(6,313	)		(1,043	)
Accrued profit sharing		(6,668	)		4,613
Accrued expenses and deferred revenue		(1,206	)		(16,212	)
Accrued warranty		(57	)		1,055
Other assets		2,030			2,561
Other non-current liabilities		(705	)		(1,625	)

Cash provided by operating activities—continuing operations		105,364			138,088
Cash used in operating activities—discontinued operations		—			(2,225	)

Net cash provided by operating activities		105,364			135,863

Cash flows from investing activities:
Payments to acquire patents and software		(156	)		(350	)
Proceeds from sale of property and equipment		70			—
Payments to acquire property and equipment		(10,113	)		(14,964	)

Cash used in investing activities—continuing operations		(10,199	)		(15,314	)
Cash used in investing activities—discontinued operations		—			(1,143	)

Net cash used in investing activities		(10,199	)		(16,457	)

Cash flows from financing activities:
Proceeds from loans and notes payable		—			25,000
Cash paid for debt issuance costs		—			(450	)
Payments on finance lease obligation		(531	)		(479	)
Payments on notes and loans payable		—			(185,000	)
Distribution to AOUT		—			(25,000	)
Payments to acquire treasury stock		(40,000	)		—
Dividend distribution		(7,692	)		(2,795	)
Proceeds from exercise of options to acquire common stock, including employee stock purchase plan		831			2,195
Payment of employee withholding tax related to restricted stock units		(1,399	)		(2,173	)

Cash used in by financial activities—continuing operations		(48,791	)		(188,702	)
Cash used in financial activities—discontinued operations		—			(166	)

Net cash used inprovided by financing activities		(48,791	)		(188,868	)

Net increase/(decrease) in cash and cash equivalents		46,374			(69,462	)
Cash and cash equivalents, beginning of period		113,017			125,011

Cash and cash equivalents, end of period	$	159,391		$	55,549

Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	1,116		$	2,188
Income taxes	$	38,186		$	40,888


	For the Three Months Ended												For the Six Months Ended
	October 31, 2021						October 31, 2020						October 31, 2021						October 31, 2020
	$			% of Sales			$			% of Sales			$			% of Sales			$			% of Sales
GAAP gross profit	$	101,995			44.3	%	$	101,073			40.6	%	$	231,937			45.9	%	$	193,497			40.4	%
Relocation expenses		1,087			0.5	%		—			—			1,087			0.2	%		—			—
COVID-19		3			0.0	%		10			0.0	%		31			0.0	%		896			0.2	%

Non-GAAP gross profit	$	103,085			44.7	%	$	101,083			40.6	%	$	233,055			46.1	%	$	194,393			40.6	%

GAAP operating expenses	$	36,603			15.9	%	$	36,693			14.8	%	$	66,658			13.2	%	$	70,377			14.7	%
Amortization of acquired intangible assets		(70	)		0.0	%		(83	)		0.0	%		(142	)		0.0	%		(166	)		0.0	%
Transition costs		80			0.0	%		(4,338	)		-1.7	%		80			0.0	%		(7,933	)		-1.7	%
COVID-19		(52	)		0.0	%		(92	)		0.0	%		(100	)		0.0	%		(159	)		0.0	%
Spin related stock-based compensation		10			0.0	%		(442	)		-0.2	%		(62	)		0.0	%		(442	)		-0.1	%
Relocation expenses		(4,461	)		-1.9	%		—			—			(4,461	)		-0.9	%		—			—

Non-GAAP operating expenses	$	32,110			13.9	%	$	31,738			12.8	%	$	61,973			12.3	%	$	61,677			12.9	%

GAAP operating income	$	65,392			28.4	%	$	64,380			25.9	%	$	165,279			32.7	%	$	123,120			25.7	%
Amortization of acquired intangible assets		70			0.0	%		83			0.0	%		142			0.0	%		166			0.0	%
Transition costs		(80	)		0.0	%		4,338			1.7	%		(80	)		0.0	%		7,933			1.7	%
COVID-19		55			0.0	%		102			0.0	%		131			0.0	%		1,055			0.2	%
Spin related stock-based compensation		(10	)		0.0	%		442			0.2	%		62			0.0	%		442			0.1	%
Relocation expenses		5,548			2.4	%		—			—			5,548			1.1	%		—			—

Non-GAAP operating income	$	70,975			30.8	%	$	69,345			27.9	%	$	171,082			33.9	%	$	132,716			27.7	%

GAAP income from continuing operations	$	50,935			22.1	%	$	49,118			19.7	%	$	127,817			25.3	%	$	92,417			19.3	%
Amortization of acquired intangible assets		70			0.0	%		83			0.0	%		142			0.0	%		166			0.0	%
Transition costs		(80	)		0.0	%		4,338			1.7	%		(80	)		0.0	%		7,933			1.7	%
COVID-19		55			0.0	%		102			0.0	%		131			0.0	%		1,055			0.2	%
Spin related stock-based compensation		(10	)		0.0	%		442			0.2	%		62			0.0	%		442			0.1	%
Relocation expenses		5,548			2.4	%		—			—			5,548			1.1	%		—			—
Tax effect of non-GAAP adjustments		(1,258	)		-0.5	%		(1,241	)		-0.5	%		(1,328	)		-0.3	%		(2,399	)		-0.5	%

Non-GAAP income from continuing operations	$	55,260			24.0	%	$	52,842			21.2	%	$	132,292			26.2	%	$	99,614			20.8	%

GAAP income from continuing operations per share—diluted	$	1.05					$	0.87					$	2.63					$	1.64
Amortization of acquired intangible assets		—						—						—						—
Transition costs		—						0.08						—						0.14
COVID-19		—						—						—						0.02
Spin related stock-based compensation		—						0.01						—						0.01
Relocation expenses		0.11						—						0.11						—
Tax effect of non-GAAP adjustments		(0.03	)					(0.02	)					(0.03	)					(0.04	)

Non-GAAP income from continuing operations per share—diluted	$	1.13					$	0.93	(a)				$	2.73	(a)				$	1.76	(a)