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Smith & Wesson Brands, Inc. (SWBI) CEO Mark Smith on Q3 2021 Results - Earnings Call Transcript

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Smith & Wesson Brands, Inc. (NASDAQ:SWBI) Q3 2021 Earnings Conference Call March 4, 2021 5:00 PM ET

Company Participants

Robert Cicero - General Counsel

Mark Smith - Chief Executive Officer

Deana McPherson - Chief Financial Officer

Conference Call Participants

Cai von Rumohr - Cowen & Company

Mark Smith - Lake Street Capital

Scott Stember - CL King

Rommel Dionisio - Aegis Capital


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. Our comments today may contain predictions, estimates, and other forward-looking statements. Our use of the words anticipate, project estimate expect, intend, believe, and other similar expressions are intended to identify those forward-looking statements. Forward-looking statements also include statements regarding our product development, focus, objectives, strategies, strategic evolution, market share, and demand for our products, as well as inventory conditions related to our products, growth opportunities and trends, and conditions in our industry in general.

Our forward-looking statements represent our current judgment about the future and they are subject to various risks and uncertainties that could cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by our statements today. These risks and uncertainties are described in detail in our securities filings, including our periodic reports on forms 8-K 10- K and 10-Q, which you can find on our website at smith-wesson.com along with a replay of today's call.

Our actual results, levels of activity, performance and achievements could differ materially from those expressed or implied by our statements today, and we expressly disclaim any obligation

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Comments (10)

From CC: Growing Dividend for the long term

As we've talked about before, the first priority is to reinvest back in the business, which, as I think you can see, we've done a great job of over the last 12 months. And then after that it's return access capital to the shareholders. So, we've done that obviously, through the dividend and when we're in a period like this, when we're obviously being very successful, then we'll take that opportunistic opportunity [ph] to reduce our share count. Obviously, you can see that we're committed to that and what that means going forward, obviously, we talked about before, we've earned the dividend for the long term and we're looking to be a growth dividend.
$150 million, in the last year, and through March, 2022 to buy back shares. How much would it cost to build an ammo manufacturing plant ? That is a use of capital which would pay back forever. For every weapon you sell, you have generations of ammo sales to look forward to.
@Feckless191 I'm new to this stock but I guess they are extremely worried about overcapacity in the industry due to previous boom and bust cycles.

Also, I don't think they would benefit from ammo sales as they don't have much (any) of an ammo business (please correct me if I'm wrong).
@Feckless191 You take on the incredible headwinds of opening up an ammo plant

Smith & Wesson is doing what it does very very very well.

Make & sell high quality firearms @ reasonable prices.

Their day in the sunshine will come imo
impressive! anti-gun folks might hate this stock, but company has long American history, advocating RESPONSIBLE gun ownership & is in incredible financial shape. NO DEBT & buying back over 11% of current market cap.

Also liked this: we'll be returning the dividend for the long term, and we're looking to be a growth dividend.
Did I read this correctly, there will be no more growth quarter on quarter except for a small increase in capacity?
@GwailoHK The capacity increase was back in the 3rd Quarter, and no intention to increase capacity further in the 4th Quarter, but they will spend more on marketing. I do not get that, at all.
Xenogears23 profile picture
@GwailoHK yeah it seemed like he doged the question... I think the lack of clear guidance may hurt the stock a bit. I will have to go back and look at the old calls. Do they underpromise and overdeliver or do they usually not really give much guidance?
Merg&Aq profile picture

I believe he was referring to a new product to be introduced in mid-March. Pricing on that product is not constrained, the margin will be very high on the item, but it will require some additional marketing
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