Net sales of $139.3M were up 2% Y/Y; excluding Walther products (under a distribution agreement that ended in April), revenue grew 9.2% Y/Y, driven by a 27.4% Y/Y spike in handgun sales.
Gross margin represented a 510bp expansion to 41.6%, building on the trend in FQ1. The company cited favorable product mix, absorption, and manufacturing efficiencies, as well as absence of lower-margin Walther sales.
Opex jumped to 20.9% of sales, or $29.2M, from 16% of sales, or $21.8M, in FQ2 2012; excluding one-time ERP system expenses, opex would have come in at 18.2% of sales, or $25.3M.
Income from continuing operations was $17.1M ($0.28/share) vs. $16.4M ($0.24/share) in Q2 2012.
Management sees revenue in FQ3 of $140M-$145M (well above analyst consensus of $137.4M) and EPS of $0.28-$0.30 (vs. $0.27). It reiterates FY2014 guidance for sales of $610M-$620M (vs. $617M) and EPS of $1.30-$1.35 (vs. $1.32).
Conference call at 5pm ET, PR