SWBI - Earnings call transcript Q2 2021 | Smith & Wesson Brands, Inc.

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Operator

Good day, everyone, and welcome to Smith & Wesson Brands, Inc.

Second Quarter Fiscal 2021 Financial Results Conference Call. This call is being recorded. At this time, I would like to turn the call over to Rob Cicero, General Counsel, who will give us some information about today's call.

Robert Cicero

Thank you, and good afternoon.

contain and may forward-looking today comments predictions, other estimates, statements. Our

forward-looking project, of are intend, those the use estimate, intended words identify expressions Our similar anticipate, expect, other believe, to statements. and

industry regarding opportunities our statements strategic market conditions and related well trends and share to include as our Forward-looking for products inventory product and evolution, our also in demand as focus, objectives, development, our general. strategies, statements conditions products, in growth

are periodic today. are activity, they along to XX-K, and uncertainties X-K, judgment call. our materially about These achievements or can in Our and described XX-Q, and expressed the that various to statements implied forward-looking those which our replay in a statements our risks smith-wesson.com uncertainties and on including at reports risks represent our actual current future results performance, website you Forms be detail subject could cause our by from today's levels our different of of find with in securities filings, or

actual performance note a on those of statements. we call update have could forward-looking disclaim our items by important any achievements activity, comments today expressly statements any and levels or implied from obligation expressed I materially about to differ our few to Our results, the and today.

non-GAAP First, call. on certain results we reference this financial

today's to found tax in and measures financial call can non-GAAP financial today's to related effect securities each they in earnings the financial costs, results press of are our filings of or and GAAP not Our exclude exclusions. on expenses acquisition transition related measures one-time be release. also COVID-XX discussed these Reconciliations whether amortization, non-GAAP

can when EPS. reference today's are referencing EPS, we website. on diluted and our found filings be securities fully earnings we always press release Our Also

business remind Before I accessories to spin-off outdoor of want hand our call speakers that products to our and August over on XXth, completed I we everyone the XXXX. today, the

from Unless operations. for call financial we during discontinued business to income statement continuing reference reporting items that all as otherwise are now to indicated historical operations. such this results information any As refers

us and Financial today's call With turn Smith, are Mark. and Joining McPherson, Chief will that Executive the I President Officer; call Officer. Mark over on Chief to Deana

Mark Smith

us. Thank you, Thanks for everyone joining Rob.

highlights been just all update I effect. this employees, that in response pandemic. employees second and The of cover the start of of I our to the a and detailed our are have at that of on and ensure operating safely safety dedication quick and following ongoing been our protocols, health the regarding to safety of call we who last extremely have quarter Because still the business results in the aggressive our decisive to year actions the Before work our diligent and our and hard environment. took continue COVID-XX able challenging our we

the performance Turning now quarter. second during financial to our

quarterly revenue QX for the $XXX marks more second doubled company. consecutive income of old quarter year than and breaking has EPS XXX Our year of million of allowed period, over our debt. million the record from zero of net net us over $XX cash $X.XX million $XX and EPS end drove in with $X.XX operations prior non-GAAP GAAP quarter to the and generated

manufacturing record power to of units produced importantly deliver performance dedicated and the three our unique again model in face XX,XXX teams any XXX,XXX period teams challenge. the Our more once shipped numbers demonstrating during last exceeding over and ability and the logistics of month operations units quarter's our and flexible strong by

achieving our just along filled a of employees XXX extremely team quarter new when in these created to say new each that breaking existing our proud times with Americans Wesson played Smith many second & our record also difficult of numbers. in members so out and of are fellow these jobs are during We critical work. our role and

and Our is well iconic Smith consumers have by against Wesson direct before success the placed that significant always, as gain for brand loyal of representation numbers the continue we two to quick performance share company our & as in the through in very the success the measured market I bodes of NICS. our as quarter those a But trust notes. long-term go

due and First, given transfer so time in believe please the share end depleted. continued for consumers, since the retailers the to considered NICS distributors would to and firearms then in periods background remember demand are available we directly not our federally does mostly But quarter, inventory to only adjusted that checks at our that shipments NICS are and NICS enforcement to second correlate of the levels. we counter. inventories proxy firearm or That law more currently period, best believe throughout inventory retail be shipments the our generally agencies it not we any generally to not correlated is market when during be lack to licensed said consumer given channel

the discuss buying accounts we you as recall, remember we have that channels sharing and inventory our Please trends and and Secondly, specifically levels are distributors. with more insight channel by inventory levels providing do quarterly consumer you share our at into market not business may three I the groups. include strategic will main retailer

over let's In for that firearm overall NICS background our go all time-frame market comparable checks into XX.X% increased types numbers. last with fiscal the share the So QX, year.

our during XXX,XXX Wesson, increased unit units. into channel sporting & this total XX.X% goods Smith For to time shipped the

during while dropped levels by XX.X% increased the increased While shipped units. XXX,XXX XXX,XXX increased in handgun units. inventory Simultaneously, units. NICS unit the simultaneously by for guns for quarter. declined distributor checks inventory finally channel further, down handgun XXX,XXX And combined those our to by over Breaking our numbers SRA our handguns long little a quarter, checks and XX.X% XX.X% NICS

units gun inventory our our units. by Simultaneously, shipped channel XXX,XXX increased While XX,XXX long gun XXX.X% to units. dropped long

on which as gains we've financial long-term well, these focus So discussed to as robust in metric key addition results, the our very market previously growth. indicate is terrific in our numbers share

channel into exceeded Our significantly the overall. NICS shipments

the in our of level. retail inventory decreased strong deliver reflecting While product for our channel to actually ability products at our and a preference the

the to Deana Before week the seen a a I approximately $XX.X over NICS on background market in for for period released million the all that can XXXX rights since calendar the XXXX nearly who We past recent XX% This we've estimate checks firearms hand there NSSF this purchases. far year-to-date in XXXX perspective call were overall I results to coming time. firearm and month the year. there want XX November represents November longer-term purchases provide growth the are been this have Americans Including began tracking amendment dynamics of owners. just firearm year so With on FBI that first X the exercise their in prior second that over time in from the XX% through XXXX. record XXth NICS largest million of firearms made predicting first to decision

new the XX% diversifying indicating firearm new other June. Additionally, by half are are in growth data making of our first alone all buyers. year the that outpacing NSSF are XX% And through Americans and these consumers demographics With overall up broadening women consumer of with base. survey purchases African

number firearms research on those was study at according And the for conducted people industry. research in this what and abiding consumer. owners, firearms, law our In that of approximately understanding the an who The today's firearm firearms. of goal XXXX, that a by of better does firearm company over indicated conducted our So of possessed firearm usage with purchase October, eight. additional time, average four to went in and X,XXX own new mean NSSF gaining for attitude to one owners we

With Most An opportunity within of & number we as favorably half their endorsement recognizing consumer iconic take again our for of of whole, Smith A&U that for fiscal results and again number also the however one granted in in Therefore not very a year concluded the industry the our a the was subsequent a that initial but at new with purchase that long-term awareness specifically with sales price recommend & owners would base positions & of the XX% marketplace once our Wesson do was handgun that respondents and brand categories higher firearm aided in the combined healthy represents than Wesson encouraging, unaided others. in to Smith Smith this one and Wesson. us MSR one brand. purchase. study long-term. awareness respondents for XX% first expanded

& taken Wesson consumers as gunsmarts and these have Smith Finally I community mentioned the call, a last we welcoming program. leadership in our through to our on position new

where we basic for donated content to produce instructional its the videos kits safety, ownership, we have we roughly to-date eye shooting free ranging videos continue complete XX consumer to and the and hearing turn tools over instructions, have program. as from over storage the safety XX,XXX sports. results. to YouTube And Please to well and of months In gun see this yourself. and over find our call financial and enjoyment that channel just program storage since to the safety the inception, responsible on XX impressions links www.smith-wesson.com/gunsmarts kits I'll with We gunsmarts protection, fundamentals, with with as for share distribute million visit received four Deana deliver shooting

Deana McPherson

of due increases costs travel combined due beyond of prior of a purchases customer higher increased Shooting related testament than manufacturing a of Thanks Operating targeted unit increased keeping of million Increased Vote our to capacity record our were spin-off in were Foundation's machinery $X more million offset depreciation donation expenses and profit volume sharing million expense the year allowances to profit deferral from resulting Gun to $XXX,XXX due the of in to the during are campaign. XX.X% manufacturing that well million. on model. costs non-GAAP reduced our margin a activation output related million, pandemic. the $X.X double to in a activity the expectations, promotional Sports associated of a lower prior headcount increased $X.X with our lower our quarter was headcount. combination model prior National production Mark. million EBITDA of firearms machine or compensation of costs, and a flexible combined $XXX the costs, gain these ability by team than increased and more $XXX.X than adjusted employee slightly with pandemic. in the totaling revenue utilizing GAAP above related with the year the heightened $X.XX, earnings Once realized capacity, advertising resulted including earnings to likely The $XX.X our safe results. consumer a employee of results as and and share quarter our of in to additional margin the consecutive $X.XX use through led recall procedures Gross operations elective reduction shipments demand The prior-year of gross share production All per income again comparable by increased increase medical ongoing offset increase revenue per $XX.X flexible XX.X% year increase continued to second compared million, net costs while significant

we free cash. million in During equipment, from $XX.X cash operations the quarter, million in on leaving and capital spent million $X.X $XX.X generated

the also the final quarter repaid of accessories outdoor $XX.X was business credit, million We and line $XX revolving million the our of see that products $XX bank and cash ending with resulting debt. the in on no million and company,

dividend return to in Board As $X.XX on that our indicated that debt pleased again you to be I'm announce shareholders. shareholders payment our allocation with share remember and our invest our to we business, Xth. has on last XXth authorized our priorities repay December per once our from of our quarter, January record call made may to to are capital capital

Looking provide we although guidance. to intend forward do not

quarter. That as of capacity. weekend, our recognize provide went to third our into number In capacity by shutdown. somewhat periods governed on holidays XXth. production the following demand for is implemented a applies and will November is have due of the all that non-operating We operating ability X% available We days of increase function to shipped revenue to primarily subsequent a we nearly XXth. high price This effect our products increase such November to days color other production

shutdown XX had holiday. days with quarter operating second days Our and five one

XX the Our Christmas to operating due quarter periods. shutdown only and days holiday have will third Thanksgiving

this week week During four quarter, place increase the at of half of start our the we week start over by second two-thirds our occurring of increased in capacity XX% six. and at XX with nearly

not this. currently to beyond capacity additional add significant are any We planning

now starting In fact chain the indications need some we supplier's us monitoring aggressive with our our supply due that recent to material is impact to we meet to supply production been pandemic have plans. to very ability

disruption. any and to mitigate continue We are monitor to actively the working situation

taxable Finally in the due income. to our increase

to dropped the our open analysts. can questions has below Our to With please effective tax just rate we XX%. that from operator call

Operator

of first the question from comes CL from King. line Our Instructions] Scott Stember [Operator

now line open. is Your

Scott Stember

lot giving guidance supply your from we where you it least and new you sort know different layer just that us this things issues give industry forward. but then play a going guys I sense know of growth year any see I at be aren't for looking of of of the are seems time a around like industry the foundational at but versus how would just could happening? surges, growth XXXX a preventing into prior have

Mark Smith

Yes. Yes, Scott this I we're guidance. is not Mark. obviously mean, giving

between I going us and collectors as remarks, to will much initial the year for it's say up going I not as purchase. is about very depleted. is, the whether in we're in those oftentimes anywhere than about is you strong Deana's while kind is well - their a too channel can giving or the some remains to forward subsequent long-term mentioned are take is more the ASP become get that demand said now Where all detail comments very So what strong, consumers purchases very and enthusiasts firearms lot enthusiasts. I'm it's I think the their And that of a and the going still a very that move into there market are that are number not but growth tends days from bode to indications a become production of mean guidance in industry of in inventory the I prepared lot going as obviously third we not, to quarter of a and new the

where there. But this really goes long-term a I least expect We through of view to our it and our continue see I into and mean at as this. QX from we'll said taking QX we're

in it, of as of consumer we've we've the a terms new think put on got said, base. I kind you layer

Scott Stember

issues? could potentially And you the quarters? of what couple mentioned go just kind could supplier headwind what you, or is that recap and serious could how how about know in next and you back could Deana, talk it be about that of How that

Deana McPherson

that It's and is our and of want look have now to operations make sure at right our that to suppliers COVID us, really This have a a a Sure. situation happening going been to we're guidance. to everybody considers it is we future right the is to teams where situation any part at now. providing more we we our current We things there react around country we have out actively that procurement we're and them, the across be I and how disruptions are can a enough And up. up, change that this is and done to we are closely things point it but manage lots we but and and don't our that want plan. numbers be it There's team flexible, expect great come that monitoring reason the something flexible job behind where something managing. don't

Scott Stember

it. Got

Mark Smith

we're we'll is but to going going market mean manage think we and see take think in the that got there. numbers little a here of, it's we've chain have don't kind bit through of we've Obviously, and let them normalization we're to of don't going we of I but the and as think I supply ramped ramped see factor it's Mark. And goes our then - a little may impact let this any can for bit proven I stabilize upside, from just more bit going quickly. so can quarter here chain But from a little a pausing really the we're let supply bit a take future. to that. any is away we're we kind I kind of - the it's take think in point to little to think, I I going and, what the should some at to stabilize from come of you where you a pause Scott, obviously

Scott Stember

have quarterly two could 'XX. full a are on know we first to guys for adjusted regarding for lastly but prepared quarters anything basis, if year fiscal just the give EPS. least us at I you of you the give fiscal And don't 'XX

judge So we 'XX obviously of higher 'XX fiscal could is have but… a a framework off to lot

Deana McPherson

giving not variables to guidance, many too long-term. we there's the manage just we're want Yes, and for

Scott Stember

to No. XXXX fiscal guidance, for referring but I'm not have do we what what the… not 'XX

Deana McPherson

to want know You what.

Scott Stember

Yes.

Deana McPherson

I understand.

You want to is what operations. EPS know continuing for

Scott Stember

Yes.

'XX Just judge so all. Yes. off we of. to basically could have to base something That's

Deana McPherson

the for 'XX. fiscal about moment. full It's One year Sure. $X.XX

Scott Stember

You said XX?

Deana McPherson

XX, yes.

Operator

Our question from from next comes of Dyer line the Steve Craig-Hallum.

now open. line is Your

Steve Dyer

almost performance in by long A measure. quarter gun couple One of was any really questions. the exceptional

by seen. far it's ever I've biggest think the I quarter

You any exposure. shotgun much clearly if don't have really

if on wondering rifles ARs little it that more what I'm there may like was cetera? bit you whether hunting et could elaborate So feel was it driven a was have whether

Mark Smith

we - of unfortunately. don't typically kind we have don't - Steve, we Yes, provide that break down,

category every in very firearms think strong. very, right is I industry the now

Our Arms Thompson/Center out above the industry. one the brands the terms Arms is is was in of of be kind our expectations. there brands honest in to But Thompson/Center of smaller

And used rhetoric so Obviously most that. of in you We're of MSR the your one and draw of one categories and and - from subject on have our volatile. very our side volatile in in it's own wild tends just that industry. kind very, that It's just very general is to portfolio the to conclusions the most can political swings. to our

supplied We're absorb well we've chain of through from the we and to been used before a don't very is supply very kind and able ramp-up are very, of make normalization we're whole very also well to those quickly. any as Our this that and to components outside. lot able

us. an from doesn't it absorption really us from affect perspective So

Steve Dyer

was if protection it's sale that in to hunting to say safe was sale the more long there as feel like But personal in opposed category? gun I you just think general

Mark Smith

Yes, as came in obviously think, the think and the gone kind then the heated as focused up we dynamics pandemic of years that it recent September of became and the very control I in months. then heavy have and came through on, the heavily into topic was really on that heated March just protection through kind I very MSRs discussion a the of we and and election into of summer happen personal as obviously as up very, October April kind gun

Steve Dyer

Yes.

in you internal capacity external? was capacity the expanded if of much about how talked sort versus that guys production quarter. tell added of wondering I'm us You could

Mark Smith

capacity, We're kind on not as many going mode operation it comes heavier ups provide and times any downs managing of through we surges demand to level with the we talked these and about we outsourcing outside. base internally, feel of as kind but rightsized have details main the is of through of and that, before we've largely when then which a our to manage periods

so. So I of give can direction, that kind you

Deana McPherson

you Steve statement a not take and see at is can capital our look outsized. And flow spending you cash can

in So kind direction. that the will of guide you

Steve Dyer

Yes, me I'll yes And and for very in back lastly hop then guess line. helpful. I

extraordinary very, around free is very debt turned quickly. Your net has situation cash flow and the

although dividend think to sort dividend think share at future? that any probably buybacks, it's about when of I how it's of a couple but further of fairly I guidance in another special have given You might kind the as big quarters in whether guess a of you flow, this look it's nominal especially cash you whether picture, the

Deana McPherson

to that shareholders. to it our a a this is Yes, marketplace. is that we we've do so dividend know a and unsustainable the want of level. relatively out dividend profits there our in do becomes company At our started volatility is we we point, that lot the fast What return to intention grow it at want before be don't we back growth said small when and to

it. one piece So that is of

to We so gets tuned. free we of to know. for do. what made and to recognize everyone stay been we'll rash positive, last cash We'll that long-term are is We have the the make decision very our decisions continuing don't evaluate goal to when let two quarters a want but - manage

Operator

Street next Mark of Smith the Capital. Our Lake question from from comes line

now is line open. Your

Mark Smith

pricing? what's forward I price a took you in X% and just feel take, the talk environment confirm as November. wanted could that middle you guys that little ASP you much as a bit being maybe Do you the was conservative to you're seeing going as talk in about are of far in about increase like as

Mark Smith

Sure.

that So fact just up largely ASP the promotional right is activity is now. because to due non-existent the the

you know ASP obviously there that So some and and going we that can so forward. make adjustments is maximize mix to

and increase. environment. long-term could pricing, real Yes, speaking higher this environment, the about taking not be take of price have, gone any have consumer versus long-term in but view our competition. and we we marketplace we the in again quickly X% the in want products our credibility could course, to Just appropriately maintaining view with pretty our a marketplace, to in environment, the to but so we're this priced just a We

a just opportunity hard still some took categories of X% an look It's is beyond the and we So now took at increases those were that, that back strong. demand line. some in there the bring right to targeted we kind

I think to so through that rest year our these pretty forward going say ASPs safe hold at of I up. going to are And fiscal the it's think least

Mark Smith

as without change? new new SHOT in spread be in we the and does next next calendar look and products really opportunity there year. maybe person look products? the calendar strategically question release happening the of Show new opportunity take price The And we this is to products out as is at kind at How of

Mark Smith

great a that's Yes, question.

excited we're that to There So hard wings of push be on for is a about decided be kind now. that to are leave really to next time speak. we talking a products. couple strategically in on also couple of to we're There the going just continuing waiting new we've

let's to to this that. aggressive guess we're view be and now take kind hard opportunity continuing of pushing taking the I very remain we're So of so

our continue can So again, we product environment, excitement any be into in life brands successful through launches. to and and injecting new

coming the XX up about months in next have here to XX we actually new pipeline months. product the that I'm very So excited

I and mean, any to a right, time spend product we you're that's pricing about planning yes, of offset it's something we can use talking definitely and kind for. help pressure is and new something So of lot

Mark Smith

And you a kind brand loyalty fair amount Mark, awareness. then, of talked about and

look we additionally kind with these of the Any new granular. buyers. brand some maybe think at Do you sales of buyers. easy these insight we new first drive models time As then get if a handgun how you And buyers? share little first-time these into helped really within and the take more helped to you

Mark Smith

that hands coming of is just questions. is marketplace The is The cetera, is new of absolutely. marketplace product right now the is answer to down easy those and both exactly those retailers, answer right one distributors, to your The for. - in all a number last our is feedback from somebody in the of into et to fact question all lot who it to to the the marketplace due what caters now looking it the

a lot. the did help of really the I yes, think terms brand In brand,

familiar the I all very in think players. are industry of we with major the

definitely of know outside the & Wesson of players. other a the no I Smith people think larger maybe industry few then and

great brand a to see with sure make association a that a done see and brand is So our to purchase than welcoming that coming keeping in under such and helped that that that is that and we've trusted the we're in an just the & think maybe Wesson iconic better Smith somebody when making stock some there others new Smith it's that first American Heritage and & - I is brand us brand industry such - well of consumer in to that's job in Wesson. product as really

Mark Smith

then And just more two from me.

impact looks profit you that we pressures Are any certainly going at see call or that at primarily look as forward commodities market that to guys look the could we As labor gross there margin solid. that's anything out?

Mark Smith

to we've commodity market expect impact to don't I been the going had is our gross that. side. material haven't really forward human margins. and any with - any on tough credit it that - labor teams and The frankly operations - all has haven't hasn't issues on have Nothing our resources

we So or but challenge us for it quickly. now is are right because so it believe a growing not

Deana McPherson

to additional a depending frankly up We this improve want can really with people is just new at did agreement benefits point, hire of could have to see that. good might keep ability unemployment that so best we on but doing whether out, quite great hiring after workers we expired not, our have impact there the flow who an might the be or we're to on and a

Mark As people call quarter. lot. a his noted in during XXX we hired That's the

Mark Smith

Absolutely. sitting that is can on you're from kind me far you and Last one give of orders of as where us any as backlog insight today?

Mark Smith

provide of that a the fact the Yes, constrained pretty in we on to our strong. posted don't but third backlog basis, be it's results to quarterly we're that obviously kind very given just we that fact our we're going indicating quarter strong, it's

Operator

of Aegis Capital. from line the from Rommel comes question next Dionisio Our

line is open. now Your

Rommel Dionisio

given just companies the brought if and in moving you What sure to. as factors these of in that guys to components with terms substitute ensure supply you are are some enough quality impacting some COVID of outsource so having quality And quality chain are obviously control wonder in you you. that of new I'm product parts seeing lot I ramp your, you the in? of production well. the production doing So Thank of are also could and as any product address? safety the alluded mentioned you practices employees guys a you just deterioration some I from

Mark Smith

it's to in important us quality and extremely we got make any not processes to firearm a some automotive We've and go sure of those want as industry. very it's safety a for to run and We material Thanks lot It's goes. implemented. kind seeing similar a and are Rommel. quality - No, the as hand Sure. obviously as changes. of far sure safe possible control that copied we of that make that hand their

lot very, terms have pretty to processes rigorous of that's going the up door of very our in high We making a is the internally standards. of and disciplined out testing that product all sure

any - from of where have of we any no, we quality report is that have reports a one issues. every the main the of not those So, a field. sorry, sales safety, questions one does folks bi-weekly actually We is seen coming of issue the ask and any

So we can terms watch cetera floor have we and had returns kind internal not any the trends et and of lot seen scrap we warranty in watch own on whatsoever. of of a metrics rates and increase our

Operator

question the von next Cowen. of Cai line Rumohr Our comes from from

is line Your open. now

Scott McCrery

on is This for two Scott had I Cai. McCrery questions.

the also standpoint. firearm know dealers behavior anything you you you seen anything during but distributors? and feel elections change of all I heard at have a purchasing have it'd or you with consumers consumer have from seen First, directly, whether be

Mark Smith

obviously, - political us landscape elections lot therefore increases increased driver control - there's for gun fear regulation to control go firearms. is the a drives the and of our a gun election of gets consumers of Well, and the talk are control contentious regulation, and out purchase year any a gun as which

I one maybe there as and ramped obviously have more knows a is than yes, mean as election contentious behavior So, in change everybody up in past. been this they the election the was

I yet. of fear then had of typical at beginning I layered top that the and we still different think and was terms pandemic a some little talked the call summer to more we top as of unrest that we've drivers today went in and kind about the the the as election think on social that if year want kind with into personal we through protection the year continues then COVID that you that. of before of of demand really driver so And the though this And spring the on of continuing to coming

I that - the the of I mean demand changed just it So a of top just gun bit personal and the rhetoric. don't changed the at probably - base came I of protection level out it it little layered think control it on with think of

Scott McCrery

the returning guess I but when Okay. second now. priorities you asked what are your hierarchy this question dividend or And there? cash your are Is using definitely that trying understand have I anything my then pretty someone about about the for you're you're just else guess know thinking relative I there cash what previously to thinking

Deana McPherson

is, priorities do continue to hierarchy evaluate in our investing With to do and profits we to one business said, our shareholders, I Yes to is that. returning of main back it. continue regard as we the

discussions point active We are regarding having this to what at do.

a trying We frankly business have negative impact very in into rush a that is cyclical. will something quite are not to very, that long-term

is we to anybody, store will let wouldn't do just of a that tremendous not it you So any amount know our good. cash intention in

So we'll little us and know. time more let give bit everybody a

Operator

James Securities. question the of from from next comes Our line Hardiman Wedbush

now Your line open. is

James Hardiman

second that the owners Any commentary somebody So could I'm back market how into you me. like us significant gave driver a buyer are guy. get market long great in trying gun point new get from the stats. their future and takes a be that of couple sort at about to that how first some some and takes? cycle into or the just seems It third that to in think getting time interested guys typically idea a the the about as quickly

Mark Smith

were Yes, James, a I of kind I that too giving much I'd guess think answer question. you of if to be

James Hardiman

That's fair.

Mark Smith

is months. it directionally is six two one year, years, So it is it

the you're month probably think frame. six time closer to I

James Hardiman

Okay.

Mark Smith

that's a an guessing Whether month know, I'd don't answer one there. be much give you or too I to six. little

James Hardiman

fair. That's

is guess I think than your better mine.

I that. So appreciate

my in want of thinking capacity math, we right do us but like lot the seems do sure just can this is you you a know, gave question, So of make the about second way. It I'm the terms I to numbers increase.

then the XX% think was Your in course higher over it about the quarter. it? way but that the the of Is beginning, to the the at quarter sort at capacity was of phased of end

Deana McPherson

toward Yes the then front back of the half half. quarter the more

James Hardiman

Yes.

Deana McPherson

quarter across - you to too do for remember to did did the got a the because is I and that come quarter get what ramping early trying that is shutdown. was is week us first That's XX-week

definitely did front ramp quarter. we toward So of the end the more

and So assume just be the can't several is much quarters that you next that that to going take more that additive.

James Hardiman

that. get I Right.

know, really just think answer and don't I the - substantial inventories. Okay as we but in about decrease and lastly then the maybe

is too to low. to of what does going out long I be you how But out part number that, it year it crumbs that I a restocking ago context channels to doubt was take high, what now but to between think "normal". too I is. to answer of try now to answer guys it units restocking laid opportunity lot like? where looks two bread out. question that figure think to of going what is to put figure people guess you you're Anyway XXX,XXX sort in get you the I that the the in that want are back of the sort aggregate any help to us of

Mark Smith

week the can in inventory that I picked get it partners unloaded, bit. about and is one inventory Yes, weeks. level and to We now be mean the to let our right our that help are little we you of again. talked about takes it back levels in target time right want a before out as think really about I we've our channel shipped eight times that we'll the the kind I know truck supply get all worth in many want channel backed of

I well weeks of think as is eight worth significant there so, So there, a supply. opportunity yes,

that's I bit - consumers. to this layer time little as what's additional different of - think think layer new the the in - we So even the addition I around

refill the we also entire channel. - to We got

So you're right.

do Just that back up we're about we get there just it where to to is channel to significant want a be. thinking the to work

James Hardiman

appreciate Got Thanks it. it. Much guys.

Deana McPherson

other One point. Thanks.

start election is inventory the that the where XXXX that there thinking If are was buying. the way still this was buying. you're about consumer channel consumers no the In reacted and case, and after in inventory marketplace in channel the

the work in distributors moves to the point, inventory and channel future consumers will slow the at the retailers. it we and with have So as see down opportunity as through some potentially the

it 'XX. different a environment. it very slowdown is not So be a like This should wasn't softer

Operator

Our next question Capital. comes from from the Lake Street Mark line of Smith

Your line open. is now

Mark Smith

follow-up specials. go for or of kind in timing. the those timing at Arms be Historically October didn't out year or it typically that any This January of Friday and Black Smith shipped fall shipments really on quarter quarter Thompson/Center would Just and look one the like under quarter? Wesson see with & we that the booked on should quick specials would

Mark Smith

been of have the a feedback they that lot feedback they as quickly. at matter Black previous of The to gotten as them we has there of we've the very few is some Friday a Friday the the felt Black not And promotions. retailers very, didn't and just because inventory week. of inventory lot that's unanimously Thursday don't whether depleted frankly then any and a of a actually was or and up. busy of Wednesday know and out fear We're very and of COVID but. Friday Tuesday, Monday, Sunday bit Black was I down-day the what feedback who about fact, big run is was talking need got Thanksgiving days Wednesday picked Friday was sorry years of close, from actually just went a or And and that's because through little Monday shopping have being as if a been We're was and shopping just the the people case Saturday

really everything the the and we're there we're isn't in terms channel So activity bit a that any of again it's I making now of promotional and different and year promotional in think right shipping. a

Deana McPherson

products. we that you promote the we like think Black and our timing when our We about generally do how products generally Friday. right. don't for way promote of the products would All And promote

back any it speaking summer half relates promotional second fact the would because Friday it's that promotions, shows front distributors to generally were generally we Black timeframe number our whatnot. different ASPs promoting the distributor the is half have third the the and generally dealers within of have increased not the financial have a stocking our as and for wouldn't shows higher when quarter fourth generally as and shows periods, and that our period So of quarter know and and are different of generally generally quarter speaking quarter didn't you fallen buying significant into up more their group the We speaking. our in as promoted the later but statements, of the if

Mark Smith

as promotions There the outside that's in prepare last inventory you bunch holidays. on for historical would the October it's build not hand or And a of so of like in is far ship to into of nothing… year a just and kind week as

Deana McPherson

No.

Mark Smith

happened that that's Historically way?

Deana McPherson

No, would distribution not how no kind speaking to to of that's retailer. to the it really that bit it a get little through generally time for of take operates

shelves big onto So to for there Friday. is not the generally get push Black inventory October in a

Operator

for I Thank over further remarks. you. call no like closing At questions. this to the showing time, would I'm Smith back Mark turn to

Mark Smith

stay look joining recognizing holidays, thanks by to forward making I everyone us with and devoted speaking breaking our you safe, close quarter this Everybody we enjoy XXXX. you Thank to the employees possible. record and want for today. in for just

Operator

call. gentlemen Thank participating. conference you Ladies today's and concludes this for

now may You disconnect.

Smith & Wesson Brands (SWBI) 3 Dec 202021 Q2 Earnings call transcript