Smith & Wesson Holding Corp. (NASDAQ: SWHC) is pleased to report that its firearms division’s fourth-quarter sales rose by a record $101.7 million, up 12.7 percent, as compared to the same period last year. The company claimed higher sales across the ballistic board, pointing the fickle finger of fate at its all-caps BODYGUARD products, “price repositioned polymer framed pistols” (that’s M&P to you and me) and modern sporting home defense whatever you do don’t call them assault rifles rifles. Pistol sales soared 29.9 percent. So, guys, how’s that diversification into the security business going? Make the jump for the bad news . . .
Net sales for the fourth quarter of fiscal 2011 were $10.1 million compared with net sales of $13.6 million for the fourth quarter last year, a decline of 25.6%. Security solutions division net sales for fiscal 2011 were $50.1 million compared with net sales of$48.3 million for the prior year, a period that reflected the approximate nine-month period in fiscal 2010 beginning with the company’s acquisition of the division in July 2009. Gross profit for the fourth quarter was $2.5 million, or 24.8% of sales, compared with gross profit of $2.7 million, or 20.2% of sales, for the comparable quarter last year. Gross profit for fiscal 2011 was $11.2 million, or 22.4% of sales, compared with gross profit of $11.9 million, or 24.7% of sales, reflecting the approximate nine-month, post-acquisition period in fiscal 2010. Backlog was $20.6 million at year end, a sequential increase of $1.6 million from the end of the third quarter, but a decrease of $14.5 million from the end of the prior fiscal year.
The decision to rebrand the division to Smith & Wesson Security Solutions (SWSS) has proven to be a positive move as the company has seen a measurable improvement in customer awareness, interest level, and inquiries. The company has recently taken steps to right-size the organization to match the current market conditions through a range of cost reduction measures as well as the consolidation of personnel into a single facility. These actions are aimed at improving the company’s ability to capture new business and increasing market share while facilitating longer term margin improvement in order to establish a more competitive posture for the business.
What was it they said in In Search of Excellence? Stick to the knitting. Or, in this case, the shooting.