SWBI - Earnings call transcript Q3 2021 | Smith & Wesson Brands, Inc.

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Operator

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

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

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

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

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

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

firearm. the Adjusted the the the discuss we generally referring conducted removes best adjusted available than we generally But retailers share published NICS purchase to and the FBI for since NICS proxy consumer purposes a Foundation, background period, not metric to firearms to remember are on or NICS the a background we our by inventory that consumers, directly federally-licensed time firearm Shooting to when be Please adjusted Sports to other based demand at shipments enforcement in results, for correlate in NICS' any only levels retail of agencies, checks end distributors does NICS and to National and law counter. mostly those data. not channel. transfer believe Finally, given NICS, checks due we're considered market

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

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

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

Mark Smith

for you, joining and everyone, thanks, Thank Rob, us.

of COVID-XX I of safety to the on we've regarding highlights pandemic. ongoing response our employees we implemented ensure The health quarter, beginning a at provide cover results the of third and the the and our quick pandemic cover to our that update want to detailed I Before that let operate highlights times. have been and actions our safely decisive to of me immediate previous the and the just looking to calls are effect. improvements diligence are practices make all to monitor that, business through our always protocols. still Thanks our With we third the quarter. and employees, of We enhance these closely in best our to difficult able

record income year more top a net These of line quarter. numbers in prior doubled the impressive generated just million Our from the for operations. period XX% drove quarterly set resulted $XX cash and both over non-GAAP quarter a we marks prior in of increase - revenue GAAP million record record-breaking and last third over over EPS and than $X.XX million, $XXX $XX of consecutive

shipped an units XXX,XXX over during produced to certainly conditions. increase ability over the units results than Our operations year any numbers three-month dedicated XXX,XXX impressive flexible manufacturing period, a more manufacturing testament and of the These market our our deliver teams period. and and of leverage to logistics in the and are prior team model

term to meeting consumers we've by ensuring and on and spoken brand line their that previous is hold in for of but our product take for market available preferences. our is is metric at about long our the that products mind ability However, calls, class as counter, key retail best not our front only the share our the are with

development Our ensuring been have new months work, also we've product the and hard sales, marketing, gains share that last achieved lasting. the teams are at over nine

been consumers our to team meeting Safely are partners these experts behind help alike the heavy beginners has retailers, stepping are retail classes knowledge to their counter skill with leading with stores. and sales of increasing that ensure influx at and Our needs occasionally consumers busy manage times. their met the ensuring even and their during new

is brand. stage marketing our team setting of busy for the the iconic Our chapter next

new program of firearm welcome their the to life, to of thoroughly of As community on from calls, we've year. existing and and line millions first walks previous set with white space pricing are our GUNSMARTS past into launched addressed they've feature consumer our line product We've is developed the exceeds discussed consumers reviewing all brand's value expectations. proposition our purchased to the in who the repositioned ensure they entire any better-align and our

record-demand working the our new healthy industry of whole be a to hosting that team first-ever spite and as we'll that in ensure levels virtual new show capacity is on finally, March constraints tirelessly our we're announce development the is pipeline And facing, is the long extremely that to thrilled term. Our XX. product product for

new history, and highlighting few collective a product. event, please register our this at outcome at we'll team's loyal visit just To The www.smith-wesson.com. for consumers look or RSVP brand our this an event, be behind-the-scenes our of website During exciting giving the of a our Smith numbers Wesson shipments choosing our Wesson launch decreased by retail channel responding product to the & at are consumers we continue exceed even product & of impressive the inventory highlighted earlier. Smith that production in is and into the channel counter. mix overall efforts

over year. go Fiscal let's QX, last comparable those In firearms background the all our for So numbers. types XX% timeframe checks over increased NICS'

and finally, sporting checks down little our For a goods compared shipped QX declined as long increased for during while those over NICS Smith QX while shipped to to XXXX XX% this & shift by during increased unit while SRA into Fiscal units. XX,XXX NICS to combined our units as inventory the XX%, increased our meanwhile units. numbers handguns XXX,XXX XXXX, of total quarter, to XXX,XXX the Wesson, increased levels our checks XXX,XXX further, fiscal XX% in Breaking channel long our the our nearly distributor units. quarter, of to compared time units XXX% for guns gun handgun XX% nearly by increased And units

For supply. both one in inventory week long products at guns and our handguns, of for remains the distributor approximately channel

a firearms over market. Before the overall quick Deana, the on just to I call update hand

the for know, As checks, XXXX XX% in XXXX the X.X million by previous million. we delivered record XX growth all smashing or industry tremendous set calendar year NICS with

recently, we is believe firearm indicates were shooting although purchased on of as industry an sports very only January the outdoors decelerated firearm was their from believe we've estimated and consumers and February that that with increased X.X making to the number but consumer the permit base weather interest indicate released tax fundamentally the remains general month up we new million purchases. bodes on we rates As in in and discussed in stimulus XX% of Americans the NSSF calls market. factors the lapped for the well February. sports in of first of XX% fifth interest expanded above base women than NICS the beginning forward. year and results But increased as with pandemic do delayed expanded checks will consumer checks data participants of and NICS prior diversifying, on we growing March, the the the in not to daily has difficult. ever and of the of and year More previous sequentially largest that overall the industry minorities shooting more just also severe also for number This look Tuesday We very record strong, the disruptions that more firearm a comparisons due sales become flat the that returns, sequentially, expect XXXX

deliver couldn't impressive with proven, model in launch new of in exciting healthy industry and gaining it, market the the financial manufacturing showing Wesson company. our we any All the data month, an & product Smith Deana a behind over combined able new this long-term ready and to up the coming highlights. flexible to this, most what brand recognizable comparison be about pipeline industry, conditions more is and profitability to share, turn product for future excited I'll cover holds market the that, call With our

Deana McPherson

Thanks, Mark.

that we due the strong year a to for more than quarter to results. Revenue we the the reached implemented or March began million response consecutive third For increases very in million, twice reporting firearms the are the quarter, record demand in $XXX for that increase, revenues capacity in $XXX.X XXXX. prior

environment due to and working on Gross less mid-November and our the Wesson the of XX.X% that our throughout was pandemic. production unit higher have basis second million points the quarter able the year by went X% small implementing above year to by NICS year, increased Operating depreciation with prior the headcount. XXX promotional and slightly purchases increased capacity early on to dedicated effect prior a days and was & margin mix compensation productive $XXX,XXX price work Sports than who $X.X reduced costs $X.X increased a $X.X related customer increased negatively outstanding shift recall increase were associated that into maintained higher a the costs, team travel X,XXX products show season a procedures activity, three to products. in This in million a higher the medical volume, the resulting second spite of costs, price associated likely costs are increase by testament advertising costs the employee against due and realized quarter and toward hard Our effect other to results employees profit-sharing safe combined to incentive went shipping Margins lower XX% elective of related with machinery above elimination generate in expense were costs compensation-related having and increase was due the than priced and and Shooting in million of Lower in deferral and the ongoing the pandemic. increases Smith margin impacted the over with to increased quarter. with National quarter. more increased points These the by stock from associated and prior Foundation. trade a capitalizing X% due of allowances expenses into pandemic. shift donation of were shipments, increased Increased the basis an in maximizing increase costs cancellation offset comparable margin volume to by

almost year to of per $X.X $XX.X quarter, margin net both record prior and adjusted the of The non-GAAP income and increase led or the million current in in of of repeated share costs $X.XX, Additionally, were revenue. EBITDA million, spin-related including in million, of and were earnings that there revenue GAAP year. profitability, XX% not $XX.X third gross

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

We million million $X.X and X.X to $XX.XX also common repurchase the of $XX.X stock our of company shares in the $XX cash an approximately at and quarter bank price debt. dividends, with million in of resulting paid no average million spent ending

made that be shareholders has program per share March company's last that again for indicated share capital and dividend repurchase once XX. March call pleased on our common business, through our $XXX As stock to priorities were this payment XX, return capital has to to $X.XX allocation repay record to our may in XXXX. our from And on our our shareholders. of announce also the new authorized Board debt to million invest a to March of you up remember, our X, quarter, authorized am we I

such capacity. quarter, fourth to like our of a remind revenue capacity recognize that is primarily periods the due of of have That high demand, other by governed our regarding function to days, forward shutdowns. number is production ability our production in non-operating to you operating as we weekends, days and Looking holidays, I'd available somewhat

due days our XX operating quarter days. will the shutdown only had quarter third Our whereas holiday to periods, Thanksgiving XX and have Christmas fourth

on currently the a we capacity add small are in quarter, that increase fourth any impact the of will quarter to third during had capacity not we have our early part Although planning an results.

we As quarter, that investing a we'll an first new exciting while marketing will bit our initiatives are the We with Mark have coincide an costs strategic and product. sales other our relative our of virtual to noted, fourth increase of in volume. expect remain for would in launch costs marketing show

our We to continue able to that supply the to mitigate stress increase overcome happy to report demand or issues to have are at monitor for or we time, the of this chain any indications been significant pandemic related related and challenges. in

some on have the the of We as weather the situation suppliers. are closely particularly south, Texas, in may resident our across that monitoring impact impact

are develop risks and any avoid subject change interruptions. to supply chain continues As contingencies to our to team always,

is Operator, open can call from effective the With please XX%. we our to Finally, our that, tax questions rate analysts? approximately

Operator

line First Instructions] from from comes Cai question Cowen. [Operator Rumohr the von of

Cai von Rumohr

so nice and Thanks demand. shipments Yes. quarter. constrained Maybe color much what's at the status? some point current any us on supply give and your Were

give stimulus the and maybe today? demand all but those issues of color impact of on mentioned some and weather, us You severe just

Mark Smith

doing? Sure. Hey, It's our constrained. Yes, are still you capacity Cai. How supply is obviously, Mark.

the results, terms those cetera, of I to February question in of what referring right with lot noise there's NICS I a the et numbers in stimulus, So, think as you're now. think on the

was overall February the the ever. February, you it the checks, including permit highest if think for I results at look NICS

for out the now. a there's channels that, if lot circumstances, a Texas. behind we there's between and closed severe a mitigating week. a February permit January was weather We up large there of will, backing retailers, deceleration retailers, A and information reasons that to checks lot pretty of However, checks, in the between you several of had situation the the went have, down lot

delayed, this for. year You've waiting got of you checks previous may many stimulus got people the may know, or as probably be as being tax returns you've versus year that not

probably got bit the going it's to thereof early means what also a hangover tell largest and combination so little exactly probably You've ever, probably January a from, too that of forward. a

Deana McPherson

relates Keep to for NICS, in that mind, though, Cai, February sort results not of quarter. the that our

like sure what's We're issues hard During the they continually as and go can in quarter, things we'll mitigate as in on was to we're supply try up, this. as team production in only going always able flexible around came as mind and through shift operations as our working be chain come production and manage those to and up. as that coming times we We out. what's possible, keeping making can

Cai von Rumohr

it. Got

for the of little but XX,XXX environment? may I What's travel, what's year? return dealing the a of of tire a So, costs, normal kind with asking hike. the from you talked I you mean, X% strategy to for I'm obviously, what higher guess, have price medical next for numbers, more strategy We feet, strategy? sort bit not the - have kind

Mark Smith

We question, many on talked the times managed for as we've great before about the business very Cai. many, a long much calls. the That's term,

model So, you flexible results is - we're able an environment obviously take our in advantage enables us see from as to strong. be the where to the very demand manufacturing

our to maintain level conditions. cost in able a profitable any where we we're However, market be at fixed base

price it an we about the think to really the of to do terms increases at on in going price market annual depend increase So, time. conditions and how next frankly, year, is,

increase, in in is to winter too So a usually our now probably late we're the early talking to predict is to little price about for what be that. do me which going annual fall-early

Cai von Rumohr

to XX year days last to going going the last was XX, remember. what one, And it. That's XX? XX you can... you maybe I But mentioned Got

Deana McPherson

if I'll a chance don't Yes, recall have really get to that. what take look but last I at was, I the year's will. I

Cai von Rumohr

bit is more it a a of you third like [indiscernible] this little it normal? have quarter like But always looks weaker than looks because pronounced but

Deana McPherson

not I the on have it's fourth too that between is off. far quarter. quarter often and in New so off closed holidays generally the Generally, speaking, we down always longest, we two have think But Christmas the it's fourth Year's and when the we days not Thanksgiving, it's far probably always off. no

usually it's So XX-XX.

Cai von Rumohr

Thank it. Got very much. you

Deana McPherson

Thank you.

Mark Smith

Cai. Thanks,

Operator

question from Street next Lake with Mark Smith comes Our Capital.

Mark Smith

Hi, guys.

quarter. good Another

of it ask and opportunity just take of on hit it normal kind like to little bit pricing wanted process took Just you cadence? to price Do you changes a feel quick, pricing? in here, your real there's you your selectively November. Any thought outside in around

Mark Smith

allows Mark. it some maybe that market adjust we are conditions were in undervalued. feel to categories flexibility they obviously, are Hey, we Yes, little now, pricing didn't like a when us more right where the

so, we mix little took And some categories, categories, we? have did. to flexibility adjustments? some And higher than a make increases and We product some more X% changes. some yes, now we In price some made do adjustments line Yes. right did in we

mix you As wanted increase, or profitable the see certain that numbers or of that profitability some is the categories from of as to and probably frankly as them discontinuing driven can by some not and deemphasizing we be. unprofitable were

So hot, yes, the flexibility. obviously, when market a us more little gives is

Mark Smith

an that assume I to pricing opportunity here in take And may to see new XX XX another products? days would some in we

Mark Smith

Yes.

all product is out for well And provide we as and should to [ph] feel very coming us. profitability some is point. set exciting that no expectation That's be. products where one can of obviously, products we that ways nice and that can us. going no yes. a of we very it new And Obviously, the is for new our it of and do is, or should best do of benchmark So, obviously, pricing to great there's what launch there's kind

Mark Smith

up question. a previous on And then following just kind of

look at consumer as Just behavior. we

just would point made can Certainly the a seeing comp Saturdays. months. in it's that you Are to towards on good five going change of any changes, you but have You there? little certainly consumers than from would can maybe be more there. better back anything couple we pulse with last long that leap a out behavior last what's also price points year, any seeing point point looks Anything little any the a and guns with different the year last handguns? paying? guys It shift you done on push then consumer have you're the February great. to where in pretty here fingers behavior Any whether are like year in out

Mark Smith

and that's remember, the overall we go at Sure. number. absolute Yes, and of you is days from the versus a rate great point February to always to of something to with as look January need XX, XX kind

yes, was, combination the feedback maybe in Shield EZ again, mentioned under I channel market get we a before, available, think, I of as was but where a some was of and did and January, got strong as we the the very a shooting wanted a and always salesforce. people coming of buy from from are weekly I a sports. of kind they they and think would hangover we interest else the checks some I store little into think of our The healthy lot bit still there report - and whatever And, it still is do wasn't counter. we

some for a didn't any a bit cetera. Now, et spoke so of shut said, a that maybe I'll of I on, saying, you down going to 'Well, they're down we south' have subsiding buying come then you or, of course, going kind little of yes, because power is bit little when week got who panic because have back 'Well, But bit. that availability', retailers little a we was

with factors kind we think, bunch of I bit a into said, little confluence of a a different So, playing of got February. as I

Mark Smith

trending? for about. handcuffs we been the how other last Okay. just business, your and of And whatnot? kind all talk me, Can a that has suppressor much as you well don't talk products, at Gemtech, business that really And kind then the segment one of as that about

Mark Smith

well. but has been It our of of our very is market this up well in-line portion year. Yes. Gemtech business, rest is It's us obviously, doing that the for categories. smaller very, suppressor very doing a

for So yes, well does that us.

side, a think of up carrying sports just in product. that general On the foot - and those retailers is handcuffs stores I in significantly interest I can't Handcuffs the lot are is up the the where as shooting in traffic well.

really nice a of that's and that, piece profitable. extremely for end to business us So

Deana McPherson

our showing and Right, services. up those are products other in and

XX%. the the in quarter, that is up and year, for XX% and other see up You products services it's

where those fall. that's So will categories

Mark Smith

you. been Absolutely. has This helpful. Thank

Deana McPherson

Thank you.

Mark Smith

Thanks, Mark.

Operator

from comes King. with question Stember next Our Scott CL

Scott Stember

thanks evening for Good taking questions. and my

Mark Smith

Scott. Hey,

Scott Stember

back panic of it guns talking little last You much just [ph] past? in been quarter the in that Or about bigger speak bit Can it it new in big you of broadly side talk there of but was that obviously, not panic seen potentially market. nearly we've just were has maybe long is a about there's it in some buying, is about tons little the - as that a February the maybe pulling how benefiting of possibly, shooters and buying, kind or just of thought? the talked the surge bit. you it But it we than as

Mark Smith

conjecture. in be a and question about to I has of speculation hard a previous But talked been That's calls. this before think lot answer,

seen. lot fear different but think, think previous regulation this regulation large was we've than driven little we've been of in bit mostly this has one and fear I personal part A gun as I by was think been of large about, fear yes, a of has protection. ones that surge of there a talked I gun it's times part,

of lot the lot and handguns then a shooters market. of a new So to

next their market rifle long a might new now sports involved a as a into into or shooting maybe a in and and the Now picks the carry be coming shooter comes goes get out they back purchase concealed gun. pistol and up handgun, as that

the just just getting a that really was panic buying product. think I So, around

if I subsided and think now shooting still that has maybe is have looking was I handgun, that I would in think But interest just have inventory rifle for sports I'm in little you I'm there rifle, - the again, still That until looking I going bit bought a demand is now store. but a a in there. a wait the to I for if maybe February,

Scott Stember

And it. long of thinking guns. Got then

talked did. any there? that? driving industry and better much modern Is about the specific Is You basically the than rifles item double there it what sporting

Mark Smith

get that, breakdown I just lot you the but color a don't whole to on kind as of point we mean, you know, season's I'll directionally hunting over. of

our are backlog So, mix towards have going in that that if move to categories of the right is now, demand we heavy that helps.

Scott Stember

Okay, got it. picture. obviously, And very these bigger just last is days. question, get Ammunition, to tough

time hold the For that shooter or any to can't ammunition it, sure a that potentially off on retailers to get help in to hands making gun first shooter? time some gun first way, does maybe out inhibiting their are demand,

Mark Smith

Yes, think it's the I latter.

to ammunition. don't think we I I on are know think holding some they that that.

factor do of will lot think a so the said, a you that that ammunition. into definitely I was of hold played February. the the That lack able firearm, retailers ammunition to provide counter, if some a ammunition behind So, that buy they're you probably

for So obviously, becomes that tailwind forward. available provide should more ammunition as a go we It us. hopefully

Scott Stember

That's have. you. right. Thank I all All

Mark Smith

Scott. Thanks,

Operator

with question next Our Craig-Hallum. from comes Steve Dyer

Unidentified Analyst

not Thanks. the over Or at a capacity? point supply for thought guess, the what's differently, A questions industry more us. where balancing outsource quarter for couple you can behind adding inventory think channel getting on Do Ryan restock the I with [ph] two? closer is or the we next to demand of Steve. said

Mark Smith

I giving Yes. just the speculation. frankly I first you question because be answer would can't really

December of NICS from keep just a there's months five but if lot of that ever were into November, - in January, on January, said, deceleration things I top the and the record. that played As checks mind in you're February all

mean, I is demand strong. the So very

or we don't more in participants occurs, when remarks, right said the And in there's So industry when deceleration a our the guess I we that as lot whole now. 'normalization' know. frankly, quite that, prepared

definitely at if So a normal, new you we're I that believe will.

that goes. see So, we'll where

Unidentified Analyst

under like just I supply side? guess it Maybe elevated. remains demand sounds

I why supply? So more add guess, not

Mark Smith

still of at prepared at supply we're as about Yes, week distribution. our on remarks, talked one we

Deana McPherson

the So, supply we're overhead. have to this but cyclical stated, through do managing and too issues manufacturing, successful other try a very add throughout as business would is that. this year, pace maintain, with and working particularly industry added things to at have weather our we cautious to to whatnot. at through not country, because But and very fixed a we've that been the overload much particularly with that earlier with We we've are be the flexible difficult some been continue very, thing chain of happening

that as able So not you'd we the firearms of the our there we months. we XX to or the industry, last We like not were growth, demand, don't If an they're yet. we shelves increase, I has over and come every able allows orders the are long see there do in on term. on flexible think of that. manufacturing been there can't meet that an for But to lots us overload, cautious nine time can to And is all have capitalize still be we meet the demand. to but we build that meet to manage

Unidentified Analyst

would will And balance days, a be just it Yes, I QX. of number makes greater can for for without sequential growth the I would revenue think chain guess help but assume There reasonable puts/takes which getting too quarter-over-quarter? specific, outweigh point is to But you're challenges. estimate, then sense. me the not you supply asking

Mark Smith

the in fourth further prepared at we're currently the third any for mentioned our small quarter we not beginning through capacity, as think increases we the and capacity planning remarks, quarter. capacity I increase a Well, of our put

third she ability days, on XX in XX when on deliver environments as said which the into in our constrained quarter However, this these, were our call like our we is our operating to get are and XX versus really fourth. by governed

Unidentified Analyst

then of $X was marketing cetera. it in million helpful that OpEx OpEx, on the just on sequentially a the down go-forward of OpEx, being shy et Got it. rise kind higher, on just commentary despite adjusted was But And revenue.

cost So, here? sequentially walk what optimize kind you're the nice of really management. But to puts/takes you able can through and help

Deana McPherson

can, I didn't Ryan. anticipate there, that not interesting think question. through. You an don't to - we there's know, continuing are That's I question a lot manage I

get will that with. away spin, a because costs down have was less the less bad number under insurance as from or $XXX,XXX. just the recovery we're spin an There is I on further now we this think pulled We not really million, big that anything, $XXX,XXX There's that $X dealing the debt the a is quarter there number.

the number So, time. that pulling is this down

debt. So higher is spin two it combination of the was recovery a quarter piece had we and of a things biggest it. the bad with combined costs The from insurance probably that items those those two last of

there lot on. volume-related of is a that goes Now, activity

We of have levels related, are a between have higher those accruing of a like buying customers are a group. in or profit-sharing, numbers. higher issues we of percentage advertising SG&A whether base our distributor, cooperative a that or for volume mix it's retailer strategic some Certain level

is a costs I our We're doing down perspective. would that nothing So managing say capitalizing great think, job, fixed it and driving just said, can. I them we as as from Mark a and keeping

Unidentified Analyst

problem it be Absolutely. have lower. for Good to to

Deana McPherson

Exactly.

Unidentified Analyst

just the of can the you the you're virtual it but offline, look later I Did see I date doing Or is that final website. mentioned month? it clarification. point this on One event? didn't

Deana McPherson

[ph]. XX March It's

Unidentified Analyst

Okay.

Mark Smith

XX. March

Unidentified Analyst

Thank luck. you. Good

Mark Smith

Thanks.

Operator

Dionisio comes Rommel of with question [Operator a Instructions] Capital. next Our from Aegis line

Rommel Dionisio

had I the to you inquire about guys just safety recall Thanks. wanted November. in

the there but call and just buried EZ what quantify fixed in a it's can while that the is address you or you that I instead? production your see or meaningful on quarter if - impact you you didn't line, may I yet, filtering it Shield to that problem? wonder also back out them it you expense fourth quarter top could into I sorry comments, was or haven't that see just I lines, on in in the line be gotten the the line, Thanks. important On one if held of the didn't if until

Mark Smith

them, our ensuring There's Obviously, with. very, a call material are of our firearms it that and We Sure. otherwise, the it. we on very two issue, issue we meet had always products a out wasn't standards our an cautious actually very expectations. had that would number we of and impact, but small have a

to caution there. of do a out recall decided So abundance we of an

terms the course. and we was, always initial media the that so The was the of rate base & bump. So We've our which now. behind do, firearms from gotten But tailed or to reaction off had line The feedback we've top an extremely a from the decent industry product. anytime it's of of you a Smith stands frankly number impact back definitely affected recall far. this consumer always fairly Wesson you was positive, favorable. in participation Obviously, get recall, do social

into as tail of that the tails And kind nothing [indiscernible]. it announcement, much As soon make off It's then kind material very off. we're you period. really of

Deana McPherson

Yes.

orders costs so So seen on $X whatnot I would recall-related only. impact would thinking as or million the sales for probably the affect QX for say said, of negative year, any Mark or we QX. cost haven't EZ the cost split and Really of line And, line. whole the between

large a not meaningful and margin the So, on terribly not amount overall percentage.

Rommel Dionisio

quarter. up Okay, for congrats and clearing perfect. on Thanks the that

Deana McPherson

you. Thank

Mark Smith

you. Thank

Operator

lined Cai question have We Instructions] a up von with follow Rumohr [Operator Cowen.

Cai von Rumohr

so much. thanks Yes,

lot of a got you've financial obviously, firepower. So,

of buying circumstances would Under how we You've that? share stock? a little whole what's for right back XXXX? March away? about bit buyback million the we So million, but announced Or - think what expect should you was through your use to of it strategy $XXX $XXX

Mark Smith

not obviously, going we're Yes, answer in entirety. Cai, to that probably question its

we'll strategy So process or behind allocation. thought the the overall, talk guess, capital about, just I

last can And after the before, XX about a as months. talked return first great reinvest is the to priority the to done which, in then capital we've we've access business, shareholders. back that see, over job I think it's the As you of

that committed that reduce long Obviously, that this, we share in talked opportunity a [ph] we'll a looking we're can term when our done we're obviously, see then period very growth before, to going successful, that to what take that you when the we're like opportunistic obviously and dividend we've count. being means we're we've through be and for the forward, earned to the dividend dividend. obviously, about and So,

that, us provides off as that, little starting runway to just capital you that go forward. low. beyond But of we'll plenty seen as reduce you've then we too, use share And understandably excess any we're count. So the as beyond a bit

Cai von Rumohr

you it when meet fair not you opportunistic, assessment may buy, will watch. kind you invest to quarter per a down, not companies, it's I taking assume Some stock goes much $XX it that buyback, fact Is can if buy an million up, But really price in goes you you're cetera? opportunistic or that may pretty of set that $XXX approach a be It's more. criteria, they million, announce and number. other that the business, close when saying, the the your you're et

Mark Smith

fair a statement. think Yes, that would I be

Cai von Rumohr

Okay, great. you. Thank

Deana McPherson

thing. just and the Cai, one pull did last was it numbers And XX XX. year, up from We last

this So shift QX out year. for of one day into QX

Cai von Rumohr

much. very you Thank

Deana McPherson

welcome. You're

Operator

Instructions] [Operator in turn to questions showing call Mark queue further at to like I'm closing I'd Smith time. remarks. this for the back no

Mark Smith

to just and you quarter. safe. my forward for us quarter. operator, today. Smith speaking Wesson again, joining you, congratulations Everybody & you, thank for We delivering all yet Thank stay everyone members please another team a exceptional with fellow to next look Once

Operator

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

may now You disconnect.

Smith & Wesson Brands (SWBI) 5 Mar 212021 Q3 Earnings call transcript