Smith & Wesson Brands (SWBI) 3 Sep 202021 Q1 Earnings call transcript

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

First Quarter and 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.

Thank you and good afternoon.

contain and may forward-looking today comments predictions, other estimates statements. Our

forward-looking project, of are intend, those words use estimate, intended like identify expressions Our similar anticipate, expect, other believe to statements. and

general, regarding trends. our our statements and our our products market demand and evolution; strategic inventory include market in Forward-looking market and our product in vision; share also and our for focus, and objectives, development, conditions growth strategies opportunities statements products; related industry to

about judgment factors the and forward-looking that XX-K statements described current Our securities including risks to Risk our subject in are uncertainties. could results filings X-K, various and are our and future XX-Q. to materially actual represent they considerations different periodic be our Form cause reports and our other on

well of replay information documents, we time today’s Today's You of on at as those time-sensitive assume call obligation statements. our update contains can only this find as accurate a any website forward-looking smith-wesson.com. to and no is as that call

Our comments I important about have note our items today. to actual a our statements today. materially could the few call results on from differ

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

our are are on in diluted filings, we well as fully posted earnings results recall-related transition Also, reference COVID-XX related measures, whether securities expenses, and release, be our on are acquisition-related non-GAAP they costs, GAAP effects exclude adjustments. EPS. today's to the to call, one-time which found referencing can tax Reconciliations those discussed non-GAAP as financial today's Our expenses, all of financial when measures amortization, always press EPS, website. financial or not we

results the Accessories the include announced of may the Products first fiscal segment. you Accessories its in financial know, Outdoor & Outdoor will represents XXXX, company the completed previously & of spinoff period our XXXX many segment. Therefore, quarter which Products final on August As XX,

going to on we today, our focus business. On the primarily call are firearms

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

Thank you, Rob us. joining and thanks everyone for

our of have to ensure everyone this environment. decisive employees, for recap safety onset action response me operate pandemic, business From we let to and health in continuing our the our COVID-XX. challenging related of the First, while taken aggressive to and the

screening, we of last on the in All shifts, safety still put effect and about spreads. to to and cleaning today. other and which sanitizing, in we of restrictions, modified virus social many workflow required face temperature mitigate enhanced Those April travel our lines, any our distancing, precautions designed March all operations, include spoke in changes and call, use place masks, production are staggered daily

keeping addition and us these our In to operations also allowed continue back actions our to give to have community. safe, employees

we produced personnel professionals, for Over are our and and frontline the we of past community have six and of donated sets delivering medical PPE of accepting still and thousands months, requests. tens in donation

by quarter monitor make pleased with despite I continue turn developments ready team a presented the pandemic the as our performance. corona We virus to sales. in stand daily am now I’ll pandemic, the enormous any delivered to adjustments to quarter our firearm has very that needed. report challenges record-breaking first and to

NICS to a achievement history be Our extremely for XXX,XXX increased that rapidly ability available than long-term also which representing generally to demand our translated checks strong quarterly distribution growth. firearm proxy notes; best into of. results more clearly background of demand we be facility. represents those respond retail. are through $XXX firearm of believe our company are two flexible both in have milestones reminder, model employees should and new shipments We segment at to demonstrates our revenue quick units, go our million considered But the as records, our share consumer market through before these numbers, of adjusted state-of-the-art proud manufacturing the of first, This great

transfer since end-consumers, to However, given NICS law share shipments directly consumer correlate market and does of inventory period. not licensed enforcement due time firearms to the only activity agencies, retailers, measure believe to channel. is since distributors a and our directly mostly to NICS in not levels or in we and any We federally

as inventory Secondly, and In provided strategic channels, three levels. have recall, or you only sales past, we main SRA have distributor retailer the groups. distributor, we consumer buying

we quarterly strategic distributor business, forward and that to channel more totals Going into order however, provide retailer inventory insight include in provide inventory will both our now levels.

have guns we Additionally, only we and provided long will into inventory whereas totals. handguns, down inventory historically, break channel

NICS that, continuing last our market In over XXX% increased share. So Background on the with year. overall with Checks timeframe fiscal QX, comparable

XXX% into units shipped time while during Breaking For combined during down handguns that total units, to XXX% SRA Wesson, Smith for increased and by increased our sporting this quarter. further, NICS distributor declined simultaneously, the goods check little channel the number & over units. inventory XXX,XXX a XXX,XXX

quarter XXX,XXX XX% the XXX,XXX increased from by indicates inventory units. to handgun while our record of shipped units, believe while long simultaneously, our for long share which unit gun in growth. units. long XXX,XXX NICS increased handgun nearly XXX% inventory channel gun market our while gun XX% strong translates unit finally, channel units, very products to our facilities, by for Our a a increased to checks quarter, we inventory decline X,XXX spite our dropped shipments XX% And dropped in simultaneously, in all This shipped by units channel in

XX% goods the finished almost also or during by internal $XX Our quarter. million declined inventory

As in quarter levels. flexible manufacturing capacity the growth, seen reflects for during our these provided benefit demand our our during by we’ve products our exceeded the internal unique surge numbers highlights again manufacturing share still periods, results This these consumer model. before that despite market record

when this calls. demand idled the been benefit times may You the adding in we and of infrastructure that high incurring model without of decreases. allows demand long recall have referenced to that us capture sudden This prior manufacturing cost has increases in lead

distribution partners ramping rapidly production have aggressively we to our component our our to As on call, manufacturing orders deliver incoming before. are today. products Further, center meet continues able to last this efficiently ramp than more and state-of-the-art we discussed third-party ever and and were utilize fully we reengaged

capital returning cash regular dividend very of our play to the pure growth, Outdoor the to therefore speaking & Directors on with of we Smith to excess that Wesson’s as a few am as Board firearms we our authorized and past $X.XX are heritage now per about successfully quarters; spun-off our I now go-forward company have segment aware, stockholders. last organic for returned Moving that Accessories you Products have plan quarterly been we declare focus announce our week & a excited a has to to company to share.

first of quarterly to on Our September of dividend October payable shareholders will XXth. as be Xst record

markets, ways innovative, we over estimates entrants to Since only the firearms entrants diversify with The million new of their exercise for in the commitments wanted speak to our in new of seeing NSSF demand XX% purchasing last the serving unparalleled. two to fastest continued I outreach the between those second base March, the the many conducted that their poll about rights and nationwide new that broaden call weeks. protect this segments I and Before are part teams to families. consumer we women hand of consumer have but GUNSMARTS. to the financial amendment X tremendous an nearly Americans few firearms program In of purchased record themselves have growing to time as a being called Americans. who core responsible launched African consumers their firearms ownership, first marketing of NSSF retailers recent A and and are gun to surge, new owners just are firearms gun and Deana consumers XX% and firearm. estimates gun of first highlights, current launched looking by campaign owners are sales in Not that light the have for our safe in increase is

goals have this We program. three with

First, welcome these gun our industry. new to owners

finally, the instructional mid-August booklets Smith all regardless online new of gun over & Second, the firearms welcome owners next brand first basics may help top that their donated a library. will consumers industry and practices, is firearms; only and shooting from to other engaged. today. charge, welcoming produced safely in mid-September, several by of platform the instructional of to locate a owners. want want collaboration resources, the purchased. safety and and few of link over increasing ranges, proficiency, and how of time offer with on also over everything resources the This containing program & functions help providing our purchased, again, online its on on other use store are make branded free GUNSMARTS the Further, convey XX firearm to gun sure kit gun they but includes training, provide instructional professional will market to In understand sweepstakes months them shooters of protection, video new program GUNSMARTS of best we hands new the boxes keep know hearing and firearm to we not tips very Wesson Wesson XX,XXX and them glasses, Smith have regardless instructors a partners, the and to launched help GUNSMARTS would owner to Using ask. kind industry, brand our have videos know, we in to and the

gun a to ownership company, to our to able dedicated we Please are for as Deana. and industry, www.smith-wesson.com/gunsmarts visit these responsible and the will I an call that, community. are proud gun we And turn program tools welcome yourself. over be and with the to new safe owners to to As see

Thanks, Mark.

increases first testament that was operations output increase of year incredible of results. headcount pandemic. keeping or firearms than safe of the utilizing double than XX% targeted $XXX $XXX.X was the a million. revenue was a million Form spinoff segments. our quarter of Therefore, a on all business, improved segment increase that These record team model, increased the we & more Outdoor includes XXX% flexible a our this This driven today our year first which off Although in which filed our business our the afternoon represent Products March company will have million, spun XX. filings XX-Q total Products with The business July completed operating Beginning ended in the to consumer results demand our now quarter in of our a management prior margin company quarter, started firearm quarter continued revenues are activation significant on results. increase Total higher firearm Accessories $XXX the reflects of first manufacturing increase our our resulting operations. to of as both gross the volume during or production X.X% while Outdoor $XXX.X a & employees results and and Accessories in middle combination in that fiscal continued revenues in throughout combined million prior led reported second discontinued by be our

in pandemic-related a million we and margins that prior in June comparison revenue tax be impact year. in in has Turning had EBITDA now operating Increased gross customer allowances reduced were costs began XXXX it change, revenues slightly year just have costs prior will increase from year. shipments, were unit million, the of discussion The a per combined to now increased prior to XX.X%. of promotional resulted that $X.X a in share non-GAAP time This would of a a volume resulting that spin-off change income and comparable likely medical profit a the to GAAP been lower due of margin Increased due X.X% Firearm the deferral led and gross margin the quarter which $X.X the the $X.XX, revenue only $X.X on year, of earnings for per $X increase a by quarter. of full reference in This gain million and million in company offset higher the a procedures elective activity by last $XX.X to year last prior impact employee more cost as offset of expense. segment, quarter. quarter gross if and our generated advertising Federal reduction than on $XX.X of prior applied margins earnings fiscal than of expenses place negative in reporting X.X% costs, we compared the over million year related profit to share sharing and adjusted In excise with to of Total lower significant million. the $X.XX, year net pandemic. to travel, including to

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

open end revolver leaving credit We enables also for million the term foreseeable on After we credit line year on $XXX that, repaid line five of part million net of call future. please spin-off an revolving maintain the a operator, to the this debt. outstanding million unsecured restructured of first process, the $XXX that and as new a With of credit analysts. zero a $XX our from can the us to facility for we questions quarter,

comes question first King. Our Instructions] Scott from with [Operator Stember C.L.

is now open. line Your

Good questions. taking evening my and thanks for

Hey, Scott.

just Maybe talk are to like the that your we about I you numbers your guess, speaking just again, I what and this guess, share, quarter, were, the shipments last of kind NICS were that, if market saw get fact – within you to are trying in line make distributors down inventory. to on sure what to wanted that’s the I fact working is are at? still your that’s

Yes.

and inventory. actually are about the we really that SRAs NICS difference drove that talking quarter, in last remember you If

a obviously, it’s So, I mask down. mean, just

measure consumer partners, at happening of that our we three in channels have counters. three at our happening is we the our – what’s So shipping and dock what’s with the a and counter obviously between us channel the and the have NICS

So, we between driver the and results NICS in believe happening major with inventory is the of channel. our the what’s results difference

recall earnings at inventory we sorry, accounts. that significant one of call, our decrease from had So increase SRA timeframe, if in that – during a significant you

the true, from can So still add therefore of us we’ve results, see across at flow pretty is numbers inventory the get you significant to this was. internally us not kind shipments decreases replenishing channels in obviously, from they were kind all got of had that you what together our on significant to are as the board through we this – and time, tells whereas which heavy those

able forward, set that. going they side? close where easily few a get you the gap point Do And you that like you it. up to very you up inventory on have But are be a you Got obviously, Or keep not are demand? seeing will for guys stuff you the favorable what think seeing can with outsourcing to utilizing how are quarters? picture the and next

no I seen I supply see When too and you ability this from in much environments into we what’s the never quite and we Yes. this high. general, the these want think, to happened don’t history the in and in can results, The this NICS outstrips as like we in just statements to have demand before industry about one past. industry’s talk directionally we surge are get forward-looking different. get the and the can

where – going around industry again, goes talked up about we cycles the I that we’ve that years through are point drivers – And to model – the we very, that’s as to that, what come to you There when we are that’s around, as – we guess, remarks, But flexible seeing our about turns do. guess, I with continue mean, for we’ll are prepared guess, mentioned whether when to going – only set so though you So, demand does not see. that can it going or to are the I and a so, when and not and much and today. very I turns meet one is increase how those speculate well mentioned that are increase are in continuing we I there be.

That’s have Thank for you. Alright. now. all I

Scott. Thanks,

von Our next Cowen. question comes Rumohr Cai with from

now is Your line open.

obviously. Thank quarter very Great Yes. you much.

or that said the inventories get, long XXX I XX you guess, me, in so in didn’t I guns. excuse quite down handguns and So, - X,XXX were

that’s So, correct? year-over-year,

No.

that’s in quarter, the No, from…

the okay. quarter, Functionally in okay,

Q. you break break, didn’t to I I said, in would see the that next all it you which point to you So, the are going would and get think down.

the that did we so compare that so script you that quarter numbers you, in send the were reduction script the could that units. we you understand get the What our and information to could you Cai, was. in what to that the Right. did what was show

the units like you out figure increased handgun can of being handgun say, units, up NICS is comparable. the quickly with then, units you XXX,XXX that So, very and shipments XXX% XXX%

likely because channel. what the of ship that taken and market shows taking was than to are ability more much it we to share on So our that

about July, the NICS where then, were at by impacted adversely of And inventory NICS were the looking inventories distributor were and your supply? lack the it. just in August was of at where and Got up XX% end

yes, is. Yes, absolutely it Absolutely.

of from the inventory. I and you of the general, numbers some firearms just you one inventory ability saw you think into outstripped mentioned, are the at we out by can those and other think to as where think industry have retailers in the the And we industry’s obviously, supply I us manufacturers demand. is I – of look surges think and what are from I to

it. Got

then, you – that’s next treated we’ll is the going numbers? us give going to AOUT mentioned when And happen? is to to models, that want as get going happen Okay. you a but disco, our when in so, so the the do all That’s be doing to restated with quarter,

Yes. Yes. our When numbers last forward as year’s removed will will second do and quarter that be with in Xst discontinued everything be May from December, we restated operation. a

get won’t until we But them then.

Correct.

at that ops you that fiscal can will give discontinued XXXX was – for an X-K look XXXX, filed the fiscal XXXX annual. You like the our

Got it.

Okay.

help. should That

Excellent.

Thank Super. much. very Okay. you

Cai. Thanks,

from James Our next Hardiman question Wedbush with Securities. comes

Your is now open. line

taking great Hey, quarter. a question. my Thanks good afternoon. Obviously, for

is Just going this not will firearms forward? obviously, assumption a on more most that – is guidance hold a guidance, the heading guidance business giving COVID. standalone clarification than companies into be But the go-forward this us that

correct. Yes. That’s

we we anymore. going kind for not more providing are going we mean, the managing are longer-term talked a be, obviously, guidance industry If of this to – about looking long-term I and quarterly aware you of be focus, to is recall last pretty – the were in we call, really cyclical well for we

Okay.

about from Obviously, how are help inventories you just And, Okay. manufacturing way That’s are think but what a internal to I where your own understand me thought. perspective? low.

time. I going way quarter, the You first plans inventories your head if as meaning, right, you at the upside what It think of maximum are… how low. is to retailer number, to that I in be talked sort sounds third-party as want you around, are get for pushing about room some are about my well manufacturing like delivered as output, you just for there to

Got your question.

two-thirds mean, next pushing answer. quarter. are you for probably capacity as If you this you are think I is should any can of we the already how I there sort the as about guess, if I manufacturing way and know the and out there? through you in But and much the – were of first left quarter room where

Yes.

got terms I you that, we months. for in of a making lead do have though think, where the firearm flexible noted in model, noted not to is even weeks, it’s very in long remember it’s time a

And the be turn a so, manufacturing translate up are finished It’s CNC good if of looking somewhere at eight coming line. a capacity in week you timeframe. and going of six in kind off into will to – to

you continuing prepared are we that we kind to are the did we are I inventory, the I the in of right that as out to – internal quarter, But replace. ramp, pushing So going million of remarks, of mentioned capacity can think and now. what like we you you we $XX will right, in to think are took first maximum go

value, that’s about not of in to terms got sales You cost. that think

terms that - of sales in So things value. you have

portion significant better a than that of replace will We half.

are constrained. where yes, we meaning to the point get capacity so, And

and surges, probably if again, those point to try that you direction. and go previous look we back and of at think, surges look at quarters of the of get, I tail-end previous can kind in you the kind

long double. – here. up small quick maybe But, sales up doing math but Okay. were And it’s more unit real clarification, quite I the gun dollar than were then, not But am point, last, sales and a wrong just Xx.

doing there there? seems So I if like on And right? long jump that going so, in big was ASP it a A, guns. math what’s B, am

Thompson last time, this you Center at So, certain a products. might remember that, year discontinuation is of we what had

say, launched. there July channel was of cleared the that out sort new a to So period January bulk products when were from, purchase for a the

ASP the They the this are trend. products versus normal definitely year in year impacted last have has So, a that we been out there. new buying given on

normalized are more the pricing of So, seeing this promotional you is ASP. that a lack in

Yes.

it James, was not abnormally you think I year it’s of abnormally high. can think, year, low. kind last This

Okay. That’s perfect. Appreciated guys.

Yes.

you. Thank

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

is now line open. Your

granularity. Thanks. afternoon. the additional appreciate Good I

up on question. Just last following the

look ASPs even certainly I little there some to am do So, were I are year. impacted that at has quarter-over-quarter were negative least last discounting. reasons optimal was quarters. no to to numbers for and they guessing, to want of something Are or just the mix of that we But a kind don’t I significantly understand lot the like fairly Is with up reasonable last if this several assume just use. these forward as anything to sort that? really

No, I I I you’ve they it’s got obviously, are mean, mean, think it. – promotions.

any We don’t We to down really anything I promotions we and the are much right really doing to quarter. in orders all I of promotional last through now. back trying I terms of think think not do shifted our ramped We at am QX. don’t mean, in our promotions of – any them.

kind forward. So, you it of that can and drive take

think probably I question. answers that your

surges? you production And impacts or sort to With capacity, – from have things Got previous or space of out of you you be a sort you just work efficient whether in you have to finding respect of as similar stage are any in are that to hindrances question it previous having were of COVID, just or it. differently. terms miss asking then, as had

Yes.

impacts in six, for we we’ve been now, and out first stride. are of as dealing think world I definitely obviously, I the last couldn’t cetera, hit the here, kind stations socially think was barriers figure pandemic that lines putting months, our et this the of we of as our efficiency and everybody with and we’ve distanced, kind and between seven we re-laying hit but had kind where out, we we were go some when country from in the

job really what and being we – really to employees I to demand all about did in increase results, so. and of it’s cannot this kudos react and absolutely our safe tremendous say saw team keep able management to and enough for an them these first foremost they then operations Our that

So, in think, yes, way seeing not we much efficiency are this don’t losses it the from I I really at mean, point. of

I do differently approaching any we election mean, in are and to you here, channel terms a weeks, if being bit – I not measured making all I the that last end up lead speak. anything sense as bets in to another this think, ordering and scaling Okay. I your down that industries guess, at election time from the in you around But of you contentious by will the of et you cetera? up, results it back go patterns talked is as things about same whole egged, don’t guess, terms when predicament the way, in ramping little months the it was don’t different then, And thinking time egged and the so so

Yes.

protection with large of I lot majority their think is portion the of driven large a folks regulation I of been think yes, – that’s for demand think, election to vast a But But is terms in don’t the gun that surge. course, there what’s are if mean, to I – a least do is The at a about is the some personal just here the now of I saying I happening on different the – and – cycle not that. safety surge of surge really am have and not I know portion civil we who unrest. the this we pandemic mean, moving related majority, I portion, with fears. talked starting with this by know control the

had NSSF the the that March. the market estimating since before out think, put a number week million market or week into new gun a new owners shooters or I So, last into X

of between So, usually for for normal around portion into the to estimate a and participating really, that in those future that program do keep I long-term. very have sure quarter the a we or mean, I a those pushing stay will them we we’ll environment with us those the engage this and are some mentioned of I bodes in as of GUNSMARTS terms somewhere think those. consumers make well significant the

big am think different other going that we election. fall it’s to inventory. after And the have is I large then be piece I anticipating to of that not did. we So, this going are that off the

look non-existent. at inventory channel right just now in it’s If the you and

us – going for if refill little slow you the we and if ever demand whereas of channel a does XXXX, levels are think in you a were even So, down, already to channel bit kind softer landing, fairly inventory have think the of – if in the the to I healthy. when look when I look at inventory

channels, no there election was after you so, lagged. And so, when the we cycle said then

rate the at to to your like pegged cash baseline you through it’s to the that in if you or because a or all weather free it Is over the the several but idea So is something quarters, keep generating dividend quite to it’s is – like a next or sort the income have it that? be something the or that guess, pedal the idea just are share, flow, going with cycles extent that of dividend kind the you metal stash. cash of the are is a dividend. any sort on competitors net can it’s just to a going you of for potential of at flow you fixed special one willing the foreseeable there, level future. some question you, service can One I sort point of for last policy free generating

we going be there it’s is, and question the where of your to fixed No, part at. first are

going came capital are we excess probably for to of to starting year at we’ve a there with. and So, get want extremely mean, dividend talking so on I is be off return I about now. the And want are I to the out you we We fixed. shareholders level We dividend. draw comfortable to the into mean, there. right. the think been I can is obviously, But past the there we from are as gate. mean, that it you your conclusions

it. Got well Thanks, Alright. done.

Thanks.

you. Thank

next question Lake [Operator Instructions] with Our Capital comes Mark Street Smith from Markets.

is line now Your open.

long off Hi to want stuff as the Thompson dig obviously that. guys, just well Center units, some I year, impacted down gun as the that little Last break bit ASP. into first here a on

As kind that now at you modern mix having any now right and about all TC today, of that’s between your at we we kind look impact and is? and as rifles right can rifles really look shipping manufacturing sporting talk focus of where

kind we provided don’t ever are that down still break think not I yet, of we’ve Mark. Yes. and

I’ll So, is, – whereas work the environment the pistol MSRs back to polymer revolvers going control, and by and to to it’s point an in surges then the pistols usually down hunting. I frame followed it’s to control mean, gun kind you gun of be how

different So, of we bit not much go. got directionally, people, necessarily driven surges fear general one it’s just regulation control But, and in terms the is this personal that’s a by safety. feel so little the gun kind of fact how of that of

or – don’t you provides not. So you use that any I color I feel can

– shift high able Do hit you’ve manufacturing be demand feel to currently? to demand been the for MSRs like you Okay. able to

on of we terms our flexible think in internal our mentioned, very as the We I is - very are lines. and I’ve talked are very, Days, between of before product we about mix in capacity as flexible some Investor

offer. make we we can use really can what pistols revolver that machines make to So, also

the a move mix. have that internal flexible can capacity very market we machine on depending base So

at your handgun, ASP can look to in across any as you now? we is taken long of what’s board a going ASP, – right gun the selling Okay. Kind kind or even if just talk on then, excluding MSRP the increases look guys typical away. in you you kind promotions maybe And on we at price of have for of guys and price

in but adjustments not, second our did usually our We our first quarter, of the quarter. towards tail-end typically come pricing

continue peak there kind can’t obviously reason of call right level? there out next any look Gross profit profit the to of to – Okay. leads environment guidance. Is you that And of not is you this roughly now back kind know that at I was margin big at gross you gross profit any XX% are the it drive reason in near-term any my margin question. kind and giving let’s there But to margins. as or pressures that

I about, driver mean, – talked manufacturing think drivers our the facility. margin I to our main talk main just of I’ll Deana mean, I as were gross

We huge so. a we piece XXX,XXX the here – gross facility is in really you ability saw margins square foot volume XXX,XXX of are a so in. have a manufacturing point drive and QX the facility to that being our

way better. the now, the thing environment say, as The I are other here the thing is – virtually And the long to going would other remains it as non-existent, be margins promotional

at And as cadence you talk you look the Okay. the how quarter? to shipments break we the then at look of or speak as production can units, or maybe during can all XXX,XXX we of guys down kind all cadence of about it at manufacturing, at this flowed monthly

typically we out that up end tell in end we you industry to right happen now indicate back – and can an I the definitely look probably and situation in up right and at surges we that that in that, filled again are I to situation the numbers general now. as would – usually a the how

can how down of produce So come get the door. much you matter can how out to and – you it’s a

it pretty dictate kind So the cadence steady. of It’s is you what is.

that, what bit quite to a a number in short of time, short in talk I and of we – operate light don’t days that We maintain a thing do but We first week July, our July, during number we are shutdown generally would period of August. days still One last do the have of August. some operations week point so, period. speaking, production we week out the of week of is used about

of the second sort quarter. And

close quarter New in between and fourth then and us Years Christmas the because in is it it has holiday is the We production and are for shutdown. the the always days, most

of So, a kind normal just that’s cadence quarters. our of

Okay.

& to the kind quarter, give we expense and just break American some would if at Smith you selling down marketing little Wesson of to down that know us during allocated the Maybe income Outdoor during as the and quarter? Okay, of guys expenses. or look willing statement I then don’t operating we look can be especially versus bit, as

in and buy AOUT also we for ops have Q through XX Other of point do towards filed work the off we Xrd. of can that and could the look a this go And that The do to get do we reporting you to the look We on that was at the that auditors August we reporting have filed you have to wait, all can and at Form thing I point. unfortunately, on ops that to. work discontinued we think than lot segment that, August only can’t because the really to discontinued you it is XXth. at we

right So we much provide that want to. we really can’t as now might as

that things Okay, are then way. the at make we just sure to looking and right

anything the that revenue that that’s was with at or look the is purely revenue – in over there we that? license intersegment would else driving that’s just reported, $X kind revenue, million Is think of I quarter. it license As the

and that’s companies. No, very back the forth purchases between much

know for firearms. to & you As supplier Crimson Trace Wesson Smith is a our

from there purchases revenue Crimson Trace. be, would intercompany our So,

of from So business. our AOUT purchases other products the

be on $X.X Okay. correct & on that’s of million Wouldn’t hitting Outdoor Products Accessories going that side, the there. the

Right.

I on am $X million firearm over just the more segment. looking intersegment revenues, on so the

we certain sell certain them of certain this sure. them, not fill I sell is We am a components, – components

Yes.

are a You for forward. are aware, where us, licensee they going

components then us. shipping us that’s So, end packaging they up and that selling and for marketing

licensing. is not Licensing of it’s but that number, in all

Great. you. Okay. Thank

von line question of Cai have follow-up Cowen. from the with We a Rumohr

Your line open. is now

Yes. Thank you.

on flow of took like most but the cash the $XX years it super last that’s flow million I your SWBI. clearly over have, Given to average, at of totals out And a kind cycles. look you take cash

looks going fixed it’s been. cash be? So, flow fixed you dividend, as look little a million, I like, to strategy has want what What’s under very average I under your a you at have skimpy. dividend your to way that your mean, are $XX but

you do repurchase is So about share you what – to point- that it in the what raising NICS? how this take consider how And think does at dividend? –

couple a of is there So things there, Cai.

walk We something that to really and Board long-term But decision. to We want in want are you as a a our just something environment give come that they starting to it out and investors don’t can out have high fixed is this back. rely surge a this on. then dividend is

surge cash” if that time, COVID, can there be think find whether today something in surge a would with are “too cash now, the that with we world peg increased. right that flow be much we out will something we is prudent. do But over So, not that happening look uncertainty coming to a we at generating election, with an to and trying is what’s during

no we’ll needs we So, after Board increased. with evaluate, is come right now, we’ve and whether And long-term. determinable have and amount may and what through that done we’ve up back time, over problem be the we spoken whatsoever that’s continuing get to should the some with a go something conservative that

very Cai, I think the you – we can point. starting mean, thinking it’s I of are it as much

there might in then, CapEx you And cash, huge terms is uses be bump in given relatively or I know it. any your the demand, be operating thought going to where of really Got terms small? is that thinking the specifically, and don’t surge of CapEx still well I that’s CapEx it’s would am of in

Yes.

can capacity and not ago on million $XX $XX $XX million investor you in about You with be of it’s if to million, ten to million one not these $XX be going case years But add adding we were of of of back if million sense. during and it anymore. but that’s in capacity, when in think the periods, we’ve surge spoken of $XX filed that we $XX the presentation we when makes the that during range, just one surges, July the our can expect in you we – to back to as CapEx see somewhere could these some million it be

– than will million. won’t $XX more that to $XX be million it any So,

Right. think the of uses And one of one, share you cash the repurchase. then is potential I last said

does to violently has mean, at into of how think repurchase? years, think swings over you what point your or cyclical okay, Given got thinking that? the you your you buy about business how share been say, how about deployment terms now doing would fit I we in do do that

may that because decision. a We of I Board don’t it’s there, I detail push Yes. going mean, if get I much repurchase. for into kind obviously the it’s that are we to the shares think think share we can’t undervalued, not rocket science mean, too But a are any directionally,

decision. up in really that on specifically that’s we options a our future up – very excess predictability dividends. looking some So, much the and table. But I are for We treating the cash situation, – that is in definitely to one terms that’s going end of we around but end Board how be if

So on of for the we if sustain can be list. definitely we looking do in repurchases, And something increase always the of share going the at things then dividends, long are that we that’s one the the to run. top that’s

think are up end the if We evaluating shares we being undervalued.

Thank much. you very

a Wedbush follow-up question with of have the We Securities. James Hardiman from line

now is line open. Your

firearms, a What sort that sales prepared the wide in March just time times is, first this Obviously, obviously there a number of we consumers think since XX% range terms that year of pretty normally, consumers new buyers, there so it are question. is mentioned there remarks, about gauge? normally of as picture of purchasing twice or how sort in sort portion were to is I bigger of many gun you maybe gun Hey, of about XX%, talked what think We’ve quick, always how that a the but new gun is it some do is was many could owners. that? new we number

that a at. actually you that guess taking wouldn’t don’t educated an I I I be know on give that can number

they’ll website have thing the do probably there. James, it they to I can is, and in don’t just there information the right have say, – best NSSF go would that to I So, I even me. maybe little significantly higher than it’s numbers more conservative, say ballpark even a significantly, your the or double so. now It’s of like in front think would I – probably

Totally Appreciate fair. it. Okay.

Yes.

I’d to question back for answer session. closing to concludes call like turn Mark the and Smith remarks. today’s That

we employees look company us and you, and Everybody quarter. the speaking just today. by did everyone to close thanks December. forward exceptional joining thank with Alright and safe for please stay the of dedicated all in you want in for absolutely an congratulating I thanking and to talented

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

You disconnect. now may