QUOTE AND NEWS
SeekingAlpha  7 hrs ago  Comment 
By Dan Strack: SWHC data by YCharts Smith & Wesson (NASDAQ:SWHC) shares have dropped over 20% since reporting FY1Q15 earnings on August 26, 2014 and down nearly 40% from its 52 week high on June 10, 2014. Weakening consumer demand, a sharp...
SeekingAlpha  Sep 8  Comment 
By Zacks Investment Research: Gun control. Conceal and carry. Some of the most hotly debated political issues out there right now. I’m not in the business of politics. I’m in the business of making money in the stock market. And when I find a...
SeekingAlpha  Aug 30  Comment 
By The Value Investor: Investors in Smith & Wesson (NASDAQ:SWHC) have been very disappointed with the company's results for the start of the fiscal year of 2015. It was not necessarily the weak quarter which disappointed investors. Analysts and...
Benzinga  Aug 29  Comment 
Guns have famously been called "The Great Equalizer", but that doesn't mean every gun stock is equal. For those interested in guns, which is the better play-- Smith & Wesson (NASDAQ: SWHC) or Sturm Ruger (NYSE: RGR)? Fear Driven Sales...
SeekingAlpha  Aug 29  Comment 
By MagicDiligence: The two Magic Formula gun stocks, Sturm Ruger ( RGR) and Smith & Wesson ( SWHC) have hit the skids as of late. After long, multi-year runs where both RGR and S&W saw their stock prices soar by over 500%, both have come...
SeekingAlpha  Aug 28  Comment 
By Hunter Straus: Background On August 26, 2014, Smith & Wesson Holding Corporation (NASDAQ: SWHC) reported FY 1Q 2015 net income of $14.6 million ($0.26 per share) on sales of $131.9 million compared to net income of $26.5 million ($0.40 per...
Times Online  Aug 28  Comment 
It is the inalienable right of every American to keep and bear arms. However, according to one of the United...
Motley Fool  Aug 27  Comment 
Down nearly 14%, does Smith & Wesson deserve to be this cheap?
Motley Fool  Aug 27  Comment 
As rifle customers evaporate, so too do sales -- and profits.
Motley Fool  Aug 27  Comment 
Is this meaningful? Or just another movement?




 
TOP CONTRIBUTORS

Smith & Wesson is a U.S.-based, global provider of safety, security, protection, and sport products. They are one of the leading firearm manufacturers in the world. Manufacturing a wide variety of revolvers, black powder firearms, hunting rifles, pistols, tactical rifles, firearm-related products and handcuffs. They sell to a wide customer base, including gun enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals seeking home and personal protection, law enforcement, and military agencies in the United States and worldwide. Smith and Wesson is the largest manufacturer of handguns and handcuffs in the U.S., and our largest exporter of handguns. They're also a leading turnkey provider of perimeter security to protect and control access to key military, governmental, and corporate facilities.

Company Overview

[1] Smith & Wesson Corp was founded in 1852 by Horace Smith and Daniel B. Wesson. Mr. Wesson purchased Mr. Smith's share of the company in 1873. Later in 1965 the Wesson family sold Smith & Wesson Corp. to Bangor Punta Corp. Lear Siegler Corporation then purchased Bangor Punta in 1984, controlling Smith & Wesson Corp. Forstmann Little & Co. purchased Lear Siegler in 1986 and sold the Smith & Wesson Corp. subsidiarity to Tomkins Corporation, an affiliate of U.K.-based Tomkins PLC. The company that currently owns Smith & Wesson purchased it from Tomkins in May 2001 and changed the name to Smith & Wesson Holding Corporation. They strive to build upon Smith & Wesson's legacy as an authentic American brand, known for its innovation and new product designs

On January 3, 2007 the company acquired all outstanding capital stock of Thompson Center Holding Corporation (formerly Bear Lake Acquisition Corp.) and its subsidiaries including Thompson/Center Arms Company, Inc, which is a brand name recognized by hunting enthusiasts and has a real expertise in long-gun barrel manufacturing, which Smith & Wesson thought could enhance their manufacture of long guns. TCA recently entered the bolt-action rifle market by launching internally developed new products.

On July 20, 2009, they also acquired the outstanding capital stock of Universal Safety Response, Inc. USR, based in Franklin, Tennessee, provides turnkey perimeter security solutions to protect and control access to key military, governmental, and corporate facilities. The acquisition was designed to leverage USR's business, product line, and broad customer base to expand into new markets in the security industry. This acquisition was the first step in expansion beyond firearms.

Strategy

Our objective is to be a global leader in the businesses of safety, security, protection, and sport. They plan on reaching these goals by:

  • Enhance Existing Products and Introduce New Products
  • Enter New Markets and Enhance Presence in Existing Markets
  • Pursue Strategic Relationships and Acquisitions
  • Enhance Manufacturing Productivity and Capacity
  • Capitalize on Brand Name
  • Emphasize Customer Satisfaction and Loyalty

Products[1]

The sale of firearms accounted for approximately $339.3 million in net sales, or approximately 83.5% of Smith & Wesson's net sales. With the exception of Walther firearms, all of SWHC firearms are sold under Smith & Wesson or Thompson/Center Arms brands.

Pistols

They currently manufacture 61 different models of pistols. The M&P Series of pistols, which was engineered with input from more than a dozen law enforcement agencies, is designed to offer performance, safety, and durability features that meet the standards of global law enforcement and military personnel. This Series is the most ergonomic, feature-rich, and innovative polymer pistol on the market today.

During fiscal 2010, they introduced the BODYGUARD® 380 pistol, which is a lightweight, compact, and ergonomic self-defense pistol. This product is specifically designed to provide penetration into the rapidly growing concealed-carry and personal protection markets. The Sigma Series of pistols consists of double-action pistols constructed with a durable polymer frame and a through-hardened stainless steel slide and barrel. This pistol has been purchased by the U.S. Army Security Assistance Command for use in Afghanistan by National Police and Border Patrol. This pistol must perform in wartime and extreme environmental conditions.

Pistol sales accounted for approximately $85.5 million in net sales, or approximately 21.1% of net sales.

They also are the exclusive U.S. importer and distributor of Walther firearms and hold the production rights for the popular Walther PPK and PPK/S pistols in the United States. They are imported from Germany and distributed in the United States through a strategic alliance with Carl Walther GmbH. The Walther P22 has become one of the top selling .22 caliber pistols in the United States. The Walther PPK, made famous by the movie character James Bond, and PPK/S models are manufactured in the U.S. by SWHC and marketed by them worldwide.

Walther sales accounted for approximately $43.6 million in net sales, or approximately 10.7% of net sales.

Revolvers

They currently manufacture 86 different models of revolvers. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action.

They have long been known as an innovator and leader in the revolver market. Carrying a wide range of sizes from small-frame, concealed-carry revolvers used primarily for personal protection, to large-frame revolvers used primarily for long-range hunting applications. In 2004, the Model 500 was introduced, a .500 caliber S&W magnum revolver, which is the world's most powerful production revolver caliber.

Their small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens for over 150 years. They hold a number of patents on various firearm applications, including the use of scandium, a material that possesses many of the same attributes as titanium but at a cheaper cost. They sell revolvers in a variety of models and calibers, with applications in virtually all professional and personal markets. The sale of revolvers accounted for approximately $75.4 million in net sales, or approximately 18.6% of net sales.

Thanks for the iisnhgt. It brings light into the dark!

Hunting Firearms

SWHC manufactures four models of bolt-action rifles. Their innovative ICON bolt-action, center-fire rifle is a premium hunting rifle designed to be a new breed of bolt-action rifle in terms of ruggedness, reliability, and accuracy. The T/C® Venturetm bolt-action rifle, launched in 2009, delivers top end quality, accuracy, and craftsmanship at an entry level price, positioning TCA in a higher volume price segment than its historical premium products have generally allowed. The .22 caliber HotShottm rifle, designed specifically for youth was designed in 2010. The HotShot has all of the product features that young shooters need and, by design, is always "on safe" until the hammer is cocked.

They also offer a broad and high quality selection of American-made single shot "black powder," or "muzzle loader," firearms. Black powder firearms are weapons in which the ammunition is loaded through the muzzle rather than the breech, as is the case with conventional firearms. Their black powder firearms are highly accurate, dependable rifles configured with muzzle loading barrels for hunting. Black powder firearms are purchased by hunting enthusiasts, primarily for use during exclusive black powder hunting seasons for hunting big game, such as deer and elk. They are also used by participants in Civil War re-enactments and by gun collectors. The sale of hunting firearms accounted for approximately $34.6 million in net sales, or approximately 8.5% our net sales.

Handcuffs

They are one of the largest manufacturer of handcuffs and restraints in the United States. Fabricating these products from the highest grade carbon or stainless steel. Double heat-treated internal locks help prevent tampering and smooth ratchets allow for swift cuffing and an extra measure of safety. They customize handcuffs to fit customer specifications. The sale of handcuffs accounted for approximately $5.4 million in net sales, or approximately 1.3% our net sales.

Financial Analysis[2]

Image:Balance_Sheet_At_a_glance.jpg Image:ROA_ROIC_5years.jpg Image:5yr_ROE_and_investcap.jpg

FINANCIAL STRUCTURE RATIOS
Altman's Z-Score Ratio 2.81
Financial Leverage Ratio (Assets/Equity) 2.2
Debt Ratio 54.0
Total Debt/Equity (Gearing Ratio) 0.50
LT Debt/Equity 0.50
LT Debt/Capital Invested 38.2
LT Debt/Total Liabilities 42.4
Interest Cover 10.8
Interest/Capital Invested 1.91

SWOT Analysis[1]

Strengths

  • Thompson/Center Arms, Inc., a premier designer and manufacturer of premium hunting rifles, black powder rifles, interchangeable firearms systems and accessories under the Thompson/Center brand. Smith & Wesson licenses shooter eye and ear protection, knives, apparel, and other accessory lines.
  • Smith & Wesson is the largest manufacturer of handguns in the United States and one of the most recognizable brands in the world. They manufacture and distribute a full line of firearms for defense, law enforcement, hunting and sporting.
  • They provide products that are utilized by virtually every police agency and military force around the world and The Smith & Wesson Academy is America's longest running firearms training facility for law enforcement, military and security professionals. Law enforcement personnel from every state and over 50 foreign countries have come to the Springfield, Massachusetts facility to receive state-of-the-art instruction, to prepare for and exceed the demanding needs of law enforcement. The academy's superior training gives today's police force the tools necessary to handle tomorrow's most extreme situations.
  • They are a company dedicated to research and development and have produced the first American made double action auto-loading pistol, stainless steel firearms and perimeter security systems and have driven product development for more than 150 years.
  • In 2009 they won the first ever ASIS Accolades Award for the Expeditionary Mobile Barrier (EMB) in the category of Most Transformational Product or Service. The EMB is a completely mobile barrier that can stop a 7,500-pound vehicle traveling 45 miles-per-hour. This product increases the likelihood that vehicle occupants will be unharmed. It is immediately resettable after impact, with few or no replaced parts. An adjustable net allows the system to secure a variety of roadway widths without requiring additional parts.
  • Smith and Wesson's Universal Safety Response (USR) serves a variety of clients in the defense, transportation and petrol-chemical industries, as well as corporate facilities, airports, Fortune 500 companies, national laboratories and museums. USR's security systems are also used by the US Homeland Security and to safeguard high-risk facilities.
  • They are a leading advocate of the development and use of firearms safety devices, incorporated multiple safety features into each of their handguns, maintained the country's longest-running shooters training facility, promoted the NSSF "Child Safe" gun lock program nationwide, and they currently license numerous safety devices to the shooting sports market.
  • Despite the economic recession in the Unites States, sales grew 13.2% in 2008.
  • They have a 70% market share in the handgun segment of the firearms industry in the United States.

Weaknesses

  • Only 7% of their sales are produced from international venues. A vast majority of their sales are in the United States market, and while they are an international company, their sales and market share in foreign markets are low.
  • They do not dominate the hunting enthusiast market.
  • From 2004 to 2009, sales of revolvers dropped from about 40% of the company's sales to around 20%.

Oppurtunities

  • To diversify and add breadth to its brand, the firm licenses its name to makers of apparel, watches, sunglasses, gift sets, and more.
  • The creation of law enforcement products that do not injure public offenders; such as guns that shoot "bean bags" or "large pellets."
  • Technological advancements for this company are always leading to more opportunities-for instance they could create a gun that has fingerprint recognition capabilities and can only be fired by whoever programmed the gun.
  • Expanding its products in the areas of tactical and long-gun lines, as well as non-firearm products and services.

Threats

  • Major competition is Browning Arms, Glock and Ruger.
  • Laws passed by the government giving citizens the right to carry weapons can effect the amount of gun sales in the U.S.
  • Expanding into foreign markets is challenging due to political and legal laws prohibiting the sale and use of weapons. In some countries only law enforcement is allowed to carry weapons.

References

  1. 1.0 1.1 1.2 "10k"
  2. "Financial Data"
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