Smith & Wesson Brands (SWBI) 18 Jun 212021 Q4 Earnings call transcript

Good day, everyone and welcome to Smith & Wesson Brands, Inc. Fourth Quarter and Full Fiscal 2021 Financial Results Conference Call. This call is being recorded. At this time, I would like to turn the call over to Robert 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 the use estimate, intended words, identify expressions Our similar anticipate, expect, other believe to statements. and

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

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

actual performance note a on those of statements. we call update have could forward-looking disclaim our items by important any achievements activity, comments today expressly statements any and level or implied from obligation expressed I materially about to differ our few to Our results, the and today.

non-GAAP First, call. on certain results we referenced this financial

earnings non-GAAP in effect today’s also to financial can be non-GAAP measures call, each to related filings of are our press tax measures, COVID-XX results release. GAAP discussed securities and these not the financial they Our exclude Reconciliations today’s and acquisition-related costs, amortization, whether transition found in expenses on exclusions. of or one-time financial

referencing be are today’s our earnings on we Also, diluted Our securities always EPS. reference website. found EPS, and release when press can we fully filings

data. the firearm of to metric when by checks NICS Please National be the we a other on than remember background available that for the consumer consumers, Sports enforcement or licensed directly agencies levels published generally a But retail channel. to background generally we given counter. NICS, purchase adjusted the and to discuss our correlate best Foundation FBI considered time mostly NICS checks referring end we conducted does Adjusted we any only believe for removes federally purposes NICS based Finally, Shooting proxy were adjusted the to inventory distributors not those market the share results, transfer demand and to NICS not firearm. firearms NICS at are due to retailers law and in since in period, shipments

to spin-off to speakers Before we XXXX. remind Outdoor completed August want XX, Accessories Products that business the our I today, over on I call everyone the hand of our &

refers are for otherwise As Unless all results call operations. that statement indicated, historical as items discontinued to income during now reporting such, this any continuing business from operations. financial to reference we information

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

and thanks, joining everyone you, Rob Thank us. for

develop we XX that on the most came other times humbling unbelievable team lives faced each programs, and the throughout has months to the every imagined as rigorous rest short done, each nation the in rose XX list support teams by sure together a our resources disinfectant And with just risk, our team most this, procedures offices, production scanners, in & minimize supplies, on. cleaning AP their have up of to unbelievable that accomplishments communities, I a to AR customers redesign new expand like PPE the impressive see the requirements, the volume immediately & But over in visit to goes family and and our we team of in employees XX% close, secure workstations, was of thing As XXX and needs fiscal how action of the almost challenging exposure keeping to jumping seen personal continuing working make year they implement with and ramping our thinking pandemic, human and manufacturing have member a few in to these year team of transactions we they last to adversity this months, home Wesson the alter love and the workers order short came without make a met. assets our the challenge influx our repurpose Whether yet, outside the would that always immense reflect PPE to frontline employees as to first orders, and a sales in manage to lifetime disinfecting Smith with temperature for recruit our ever were team box work our sure new setup Wesson their and beat. into take and missed of entry to the ago. operations made company safely as team, our Smith our never just months employees tirelessly to hesitation, moment not the foremost, on professional midst have bring could of along

of without program. our will year be be our this possible eligible employee’s this we Because them. to that over of function Our annual call never impressive results volume a today, company business would firmly distributing announced & class has which Smith in Wesson And longstanding the to year and handling ensure $XX world to heavy this not earlier team we our will service success employees sharing for long-term of faltered XX% simply and service profit other the wages. employee each be belief, that organization, the every million customer reputation delivered maintained employees, and the held

company fiscal In XXXX, the our addition, for a surpassing significant in time achieved milestone billion sales history. XXX-year very in $X the in first

of this have said, not employees. As possible been all would I without our

entire the for special the bonus of and temporary during in each of a Wesson this program, be to to Smith not and & $X,XXX to also employee service our for every rated so, fiscal we June per management paid who Congratulations workers, be will is year full-time And thank recognition and of milestone, bonus awarding family. for eligible $XXX our months Thursday, you next XX. you of pro employee

Turning fourth our capping business record quarter ever nearly time revenue, marks as surpassing fourth now, the results, year the the million highest quarter which $X off for mentioned to in company the on billion for of consecutive revenue and the I mark company, $X.X our the just $XXX billion first was the under history. now quarter the in in achieved just record-breaking

$XX and of largely our line revenue fixed for the Even company. million keep job they to net year-on-year, As costs nearly team the always for held and the and goal low overhead million heightened income and an outstanding year. the quarter fourth we year. did Again, doubled far demand high for of profitability, our therefore costs leverage though over this is $XXX drove during both as periods watermarks flat new top

All Wesson XX and over with completely debt, of this stated reduce led the shareholders million the for cash shares short our a commitment most authorized strategies million program. our dividend capital months in fourth remarkable, an since long-term to and payoff to operations week spin-off. year achievements year. our XX% nearly positioned Smith return aspect has $X this repurchase at in have & in $XXX to our the increase keeping for from our spin-off, quarter how in dividends allocation by the And the to And cash Undoubtedly, share through million XX%, also shareholders, been just but continued returning our additional $XX $XXX value over outstanding and have used demonstrating to the million fixed approved been we our Board these this exciting success.

representing increase units year-on-year. and and produced teams XX% nearly Our year, fiscal a X.X manufacturing logistics million shipped last

same U.S. grew firearms by measured the the during While timeframe, as market XX%. by NICS

We record this though realize have even growth of were market when is it astounding share discussed we industry model, the constrained. still to So, to by our industry, changes which was more market at as our gains. manufacturing react a ensuring capacity overall available retail, for us the leveraging we readily that is year did flexible even much quickly on previous calls, demand, periods during enables in able to more product

learn Our been over welcomed firearms with and trust past who team connect has to to market loyal encouraging entered the time are owners, who them have sales work, the how tens of at the continuing millions to the that months, also consumers responsibly hard shooting new millions XX ensuring the sports, while also and products of long marketing & everyday. Wesson of enjoy in Smith our

them. new year, past we and understand to connect a the how best can the firearm owner in have study thorough ANU we Just population with conducted

firearm responsible videos shooting firearm have viewed or these professional We over million ownership, along topics the XX skills ranging a find from videos program, to target your our recorded proficient basics GUNSMARTS social X for and the And of over times. shooter. have our team, on become how community, increase been local instructional with

nation. completely Shield have time to who & produced month first in a make just Wesson the Smith debuting site year. purchase in consumers the brand has highlight new have in Smith the company, brand at launching months for and for next since line year. highlighting the owners powerful products ease-of-use the messaging review, & first full major visited our re-launched the connect pistol, show with new the with the our launched our firearms at strategic next-generation their firearms received million messaging, ever unique interactive products, Wesson the decisions. video people very it. And be priming popular country retail the designed that website industry, and XX We XX XXX,XXX our first brand held they level this Plus, firearms We the which has with and been improve brand shares across retail the as highlighting to by of and We locations product redesigned state-of-the-art sold the ever XX for a will extremely this & over we first well We brand upcoming Wesson units over around beliefs values directly and completed X features, anthem Smith display which a virtual we products, touchscreen scheduled launch

are focus results. space, the lasting on call With millions past well-positioned share that, over market into year firearm we success we the iconic focus growth our take and driving before followers just pandemic, results can and even amount firearms every As brand the see, to to extremely owners, firearms well-publicized combine our turn function are the cover the financial on of needle long-term getting in Deana will influx move laser very results loyal within the the before our our very the a renewed us I quickly past parlay of across we When year, to questions. the you we short to a of pure-play has time of started. our company being business of first-time of allowed

Mark. Thanks

an increase over comparable As the the record increase increases Mark a noted, implemented in prices days combined million, heightened XX of combination that reached with ongoing our for strongest quarter Revenue quarter the the lack reporting in fourth fourth being million due year, was operating response average $XXX.X in and prior that increase revenues the year price days. quarter. due with during promotions implemented consecutive The in XX.X% capacity a $XXX.X of quarter. for is are operating typically to quarter we selling November or of the and were in increase offered, X% to demand a quarter, to

during quarter quarter shipping introduction began the the to fourth our of strong popular middle Shield of Finally, the which contributed performance. very the Plus,

Mark $XXX review for hitting we Turning fiscal full actually million. sales, a achieved company $X the first doubling as time history, of year $X,XXX,XXX,XXX, our in in noted, billion XXXX sales sales, to of over

year and this issues. XX% basis the chain to is in pandemic, navigating quarter. by comparable cost elimination of the with was & pandemic, fourth As of of headcount was by impacted supply depreciation year noted, increase X,XXX the shift increased over weather the the challenges and mix some prior Smith volume negatively inflation combined impacts, points profitability. Wesson margin increase the achievement with of of compensation-related due Gross employees worked machinery other Mark work the and quarter and numerous increasing volume-related activity, throughout middle hard also in increased margin toward the who products. dedication the XX.X% result all slightly in in and the nearly the in and spending, due price all shipments, unit promotional a and realized X% higher This XX.X% margin the increased were substantially associated above Margins on purchases to of increased

operations. team our paying We work that for have of special fully in accrued which to bonus members, we the most are

was lower trade initiative. increased $X.X associated year, $X.X net of fiscal costs, the of travel legal For very to shows and allowances consulting. million when expense, A gross full shipping higher million X,XXX compensation, driven led increased in sharing with in to record with $XX.X pandemic prices selling of production cost costs were an in the customer absorption, and million favorable increased full which, record increased than of market launches XX.X% XXXX. spite and and spin-related The over quarter basis product due marketing launch lower margin a average salaries, expenses levels by costs year points new in million the new lower fees, with the reduced XX.X% in lower quarter was combined Operating increased and decrease $X.X of prior research, operating drove volume, to our and associated costs for the margins stock than high. increase profit strong a control, fourth expenses year of recognized comparable reduced

full to Smith expenses our million approximately hard-working year. $XXX.X be profit that employees increase Wesson the million For in & or distributed a will sharing million by fiscal operating this driven later higher $XX $XX.X primarily of XXXX, year, than

costs volume costs cost spin-related that with related to spur free generally related million of In initiatives, pandemic offset are costs, lower samples sales. needed lower than and addition, goods $X.X combined increased as used and more savings

XX.X% our of XX.X% to prior gross as leverage margin, led million, while containment, for and ability revenue, and adjusted EBITDA for $XX.X are profitability, of We share combined strong $X.XX, share income to year. costs in of operating earnings full per resulting team $XXX.X with quarterly revenue the including $X.XX, of record that expense thrilled earnings the The revenue year demonstrated operating revenue. or to net of almost GAAP non-GAAP million expenses compared XX% per the increase in being of doubling

earnings per full $X.XX, profitability of EBITDA of of including of year, XX.X% income adjusted and million $X.XX, our expectations, per earnings the share of or $XXX.X non-GAAP For exceeded net million, GAAP revenue. share $XXX.X

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

million stock dividends, million of and the debt. $XX no in million common X.X $X.X spent approximately to also bank the shares with in of $XXX our paid company repurchase resulting and quarter We ending million cash

resulted $XXX spent capital million we cash. on our we from shareholders. full free repurchased used our operations cash pay revolving $XXX we priorities capital in in free million the common credit, year, and past million $XXX.X record this a shares year, to million at in Looking entirely to for Executing $X.X $XXX the in million cash million have generated paid allocation and $XX.X of equipment, off our dividends which our stock X.X line million that described over of

just over down another in on XX% of share close the total firearm nearly to that I back increase repurchase Consistent repurchased the quarterly year, authorized pure-play our announce million XX% our the $XX with strategy, after X addition, XX Board by per our outstanding shares, am months since $X.XX program, share. count to pleased a buying company. has the we bringing In the we capital allocation our dividend authorized remaining million share became in a

for The quarter’s will X, on dividend new payment share up record on X. stock. million repurchase of paid This shareholders common program authorized $XX be to made also with has company’s a to of the be Board July July to

function number weekends, in available days is into primarily production like non-operating capacity. of demand, such holidays governed by of forward XXXX, That we days and have of is Looking I as our production fiscal recognize you other capacity would revenue ability due somewhat the to remind our to our to shutdowns. quarter first periods high that a

X operating Our fourth will days, first quarter due in the our first whereas week week quarter only had XXXX shutdown to our July. operating days occurring XX have XX of

increase a Our as supply. remains on distributor X% we low today June very X of of implemented inventory at still XX, products. our week price On

as or the of for significant we to to chain increase always indications issues demand supply monitor stress related our In we related pandemic. our addition, in do,

one quarter, situation, we we a week. it about suppliers did recovered start We have During our for but did impact our capacity issues. our first of to have over believe week shutdown the key for the COVID due a of from

to and As risks avoid and always, team develop offset additional chain to to supply contingencies are interruptions. change, our subject continues any

currently We With can XX%. are that rate not quarter on have our our effective is the open finally, operator, that, tax analysts? results. please we planning from to will any And add an approximately our to capacity questions impact call first

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

quarter. Great guys. Hi

you hit could are and Plus, of products, to skewing on and your additional bit, any then you detail help us great new products in on Just outlook of detail a mix kind and how Shield if your gave maybe there. new give going now some can specifically wanted insight they if have, little into kind historically any than products forward? heavier sales new that But

Yes. Sure.

talked So, little last right the to I on capacity if will, just launching call, we maybe the is to that you this the constrained fact think be them more now market, approach constrained. where we bit our new as on products about are environment capacity or strategic into a given in judicious,

really a successful that and big been received we well the white there, by market. spaces very that Plus obviously, we see keep Shield excited that about to to the are launching products the obviously sure our are that that make make is want we fresh, etcetera, consumer goal – our the very, sure are is very loyal just So, us of great those right we keep and brand, and closing any out of now is example

extremely has tremendous the MPD to new that, that healthy. year, is we team The will continue are done a product that But job. approach. I go say going As fiscal forward we pipeline next into

of We have up for of have the got And products wings. XX a those kind and on next marketplace in prepared mentioned the year. of got launched lot plans, new waiting remarks teed I into be we as over the the to

year So, heavier it year bit this a be of was it last. a will than

we continued then And a moved at great. move to price, as little higher. look selling Okay, It’s it average higher.

the pushback talk as than as have especially had can you take long long success looks rather you just you to price in increases in or are maybe guns X%. in took any used guns, ASP It the pricing? anything handguns on or that You about more like far getting

Sure.

whatsoever pricing, a, general. think capacity understand I there First are customers pushback, impacts of pushback b, in in think no just and on on some has I our constrained inflation well-publicized all, that out are very that, we been there

pushback no price on So, increases.

as see there near of in of the going Mark, is I don’t And to activity be driver promotional need majority we ASP future foresee to far participating we though, forward know we As in here, lack we to in that promotional activity. participate. and is going there, any promotional, don’t the overall need the increase the think is just that be the

is beginning that. few the in see brand, months. of on in up gun the and be long at as into that – the a under there of beginning that you coming But Smith into we that side, the we long announced seeing going & a lot – little Wesson you are the gun deemphasized next side the back the coming to what bit are brand that the here or will TC is next On May, we as hunting ASP

you you cost one is Where Where little cost talked are last really side. are inflation. the me And just at pressure about a some the looking seeing for side? on Okay. that? any bit seeing Deana the

entire lot general, well just the Yes. a publicized, seeing I in chain the cost managed firearms, are is the seeing just I of inflation. obviously, in U.S. supply mean, are but have hold manufacturing off in across not just increase, we some, that’s think, we we to pretty

that. We this went increase mean, lot into just you earlier have saw That we week. the passed of effect I on that a price was,

been been have have able either mitigate through, pass to we able So, pass it on or far, so to it we so.

guys. helpful. you, is This Excellent. Thank

Thanks Mark.

Mark. Thanks

von with Cai Our & Rumohr comes next Company. Cowen from question

so much Thanks Yes. quarter. pretty and extraordinary

Cai. Thanks

tough a little payouts that Mark, on is it from get of of basically availability I workers. to get ability at labor? think comment, How mentioned you that point, bit workers? you was Could with the kind to the one your government

will It’s come kind able and still creative some think box to say, will up What the of and to do some team, our get I a and kudos creative ideas – outside I in. they been give to HR with challenge. some labor have

impacted get from to the to those but hasn’t as our to – as it labor results, twice, having you the get can work So, materially Xx to we production, ramp hard obviously, are ability, in. see

So, continuing it’s still on just an impact it’s labor have definitely availability. to

work hard the to we been the stave of able to team, have it of due However, off. kind

it. Got

in I cash I industry, a cyclical And so recognizes think everybody not follow net many but you companies positions. have are

so you How to look see, think about want forward because think assuming rates you are from what all to you low? color you some us do balance you how to you take be sheet net are stay give deceleration. on see you we that, are interest of – if or about going you As could. net some And of kind going cash would positive what debt

Yes, a this from and industry, year. That well. cash million saw mentioned, your positive. But tomorrow Cai. below debt, you But – tomorrow in as $XXX generated are intend Analyst And it’s operations more presentation answer to detail this, talk about remain we some much short will cash in great to $XX ever expect I we Day we question on expect on the will And cyclical drop think will talk net over as we we you can do the a question. million don’t range. you more zero that that, in is, this

we net remain always – cash to So positive. intend and

we reinvest pay use our back as in the and It’s the to Cai, can. stated to business, cash the dividend, to keep strategy, Yes. debt stock zero to buy

the get stock year As the you buyback anniversary anniversary, the the probably of know, we of rest we can you to on much remember, limited until the second are for how we the a to time intention of spin. cash a investors. prepared our war little next return stock do bit buybacks build for is be back can But chest, and we to our

passed what memory, You is the authorization my new Refresh million. the $XX of just limit?

So, how you that much buy? of can

we do a could of price your based we more you August a that. of lot is spin. do that than on than purchase that outstanding generally the but There shares. speaking, think So, next not safe we don’t harbor the of through can But limit year, want rest you fact probably do, when XX% to more a

so are first And XX the at in we XX% months.

So, that’s just of behind raised our the we the $XX million, are which And is have cash keep okay on generating, dividend. to we because ideas. where and we ability lots

marketing reinvesting are We things in and other some there. doing

we where So, we are comfortable pretty are. with

first. XX then And in the XX you mentioned the Excellent. in the fourth, day

kind in so Just each you how had this first the three through modeling how we of look days walk us you first the year? quarters can can for purposes, and kind – many – days of of those like

can. sure here. that have right I Yes, I

XX, XX, be ‘XX XX, XX, fiscal XX, XX, Fiscal will XX. was So XX. last ‘XX year,

So pretty close.

‘XX XX? Okay. that fiscal Was said fiscal the in quarter you – ‘XX thought was ‘XX? you of XX – I was fourth that were

XX. No,

XX. XX, XX, XX, So

Got it.

Okay.

relatively So it’s essentially close.

there day There’s the ‘XX, closely. operating fall. in based very one or Yes, holidays on that weekends just the ‘XX less in way than is

Got it.

even? any color you think I been about results the in terms – don’t opportunities for us give you you can qualitatively how give giving obviously, but if so of guidance, you can have And about know the us not year

market not what you active. quantitative I we tell think that to but still as guidance, can’t color can we giving you continues or any is give that know very be Yes. notes the Obviously, we’re firearms

continue. checks I the highest think record. NICS known was it’s May of the ammunition adjusted a There’s ever checks second still interest – shortages widely in NICS lot firearms. on

year, was you chart it is a it So pretty different in remains, last just stratosphere and tough a a of it last if was XXXX. still kind comp was stack from year, in where the at while versus deceleration look

will So though, pretty to remain the go Obviously, comping to be year, elevated. forward. as we to we market tough we’re continue going expect that a

pretty we’re So optimistic.

is of work a market and done back job of taking that. to done great marketing not think the on We’ve operations I the share side ready fact cranking product. and our in we’ve lot terms be sitting enjoying whole also that eventuality out team just of a the laurels any for on

excited – we’re we’re my So prepared as in pretty the pretty about mentioned comments, I long-term.

Terrific. Thanks so much.

Thanks, Cai.

Okay.

question Our Stember CL Scott comes with from next King.

guys. questions. strong afternoon, Good thanks and taking results the very for Congrats on my

talking the best that market, the guys right? just hitting the just about months about what usage, last there record. was from you and actually gave the hearing May, stats with in more people one beyond obviously, ranges about what stockpiling? to regards decelerated, are attitudes any you of despite fact have it quarter your still was You you additional surges it on But the were their out and prior Do and where versus using guns general,

Yes.

the in well X on million X publicized, probably top I new million about, XXXX. think since or we million X – XXXX of firearms another the that very the influx over year, been owners end of last as we’ve talked and I it’s of think and

marketplace. – And about talked XX excited you firearms about those we’re advertising quite about million we do out reach talking new to we reaching them, engage their – be – non-endemic owners are lot how videos, probably learning the and of you’re and into it, market, product, becoming as what the and proficient. are channels, entrants new A So north on lot best try beyond into a sending, excited that of the we media, few with GUNSMARTS using should do we that, etcetera, new they messaging out social folks, those but the on consumers. to how those where do times, to where know, doing coming talk a what

are consumers of a demographics less we’ve gun as American partisan expanding the will new firearms making more going of passion. – less owner issue if those of of a you it talked lot American right again, a and – the just about, or think less of I to and traditional of partisan, an ownership and issue

that’s us, us So and Wesson, for industry. good for an for Smith & I good as think

we’re seeing not think but the anecdotal a form. not a from but year, seasonality, summer In – time like now, seasonality back we’re feedback or we’d here I terms and to summer always it’s getting the this shape do of little way, of retailers bit any it’s of by now normally our it’s right XXXX

maybe December. of our ago. it’s it November, a it’s but than different have was years at usually level So off We X down peaks,

of at much you’re guns the some Got up trying going back it. general, with their people walking has newer are have some previous been if to a suggest hearing not owners sense just of that these or get people just back made a and activities hearing of opening outdoor there? lot you’re in away, just And economy to to anything with

hearing not we’re effect. to No, that anything

then talked And lastly, any better Is you upon ammunition be new that? for following worse, or Can the just on probably gun last you that, same expand up question shortages up? any that’s maybe coming having just is and the sales. it about the Alright. going just to impact headwind that before year this on getting

It’s I little not not We to get getting pockets folks little no, the of say a able getting any general are is ammunition on better. a the being will bit worse But of either. it’s bit hearing of any shelf. answer

interest sales, it that it And dampening in of issue. an strong for I think kind effect yes, frankly, continued the sports is have I firearm to think I a just ying of that’s shows shooting but general. on also a yang the and remains the mean, in pretty us, that be can

the I sales, a for in us headwind also a So industry bit the it’s general. but in a of firearm that’s bellwether for think

Got That’s have. it. what Alright. I Thanks.

Scott. Thanks, Alright.

Wedbush Our next comes Securities. with Instructions] question James from [Operator Hardiman

XQ to call sequential it XQ back By Hey, actually good a to up if difference afternoon. to about operating were Wanted you But like want grew XX%. you guess, versus about XQ. manufacturing talked math, days, circle my XQ. and in XX%, this benefit, capacity, shipments I the we handgun shipments versus more to that, X%

a you’re especially bit understand of same how key down, you and to aren’t supplier fill in I that, a obviously, shutting what little So us maybe capacity noted thing. that But able given, was I – quite the where you shipments time. on which production accomplish lost think,

Yes.

QX. That for is impact time did little lost That QX. not time. little a lost we So

Okay.

Okay.

or is So, but products quarter that kind certain make versus look referenced you takes comment benefit products what faster. mix, can forward, of to definite other it a issue products, positive there certain the of a make mix first

of of We stock is The plus put up into bit change. the We at it and end were might had so you gearing inventory ahead a a the little dealers notice of our made January. ship distributors we January, could other and in that thing time. that launch product for already inventory had

awful in part those of Pluses lot Mark the So more you Shield of sold that noted we beginning during would the an quarter. see sales March.

starting so would would to – those we QX. those stock been And have up in

So – sorry QX. in

So QX that. ended up taking advantage of

helpful. That is really

I then modeling of And forward, max couple it about next level, as the should think that seems more days? the than production at sounds of obviously, you you’re fourth can, so sort going as in to for adjusted difference actual like going saying. making for as assume shipment numbers what as least think what is what I capacity? third the been saying that which It we to capacity quarter sort of not you’re is this your you’re that closer production maybe use it’s quarter the quarters, that – there’s about like Should assuming be much maybe the

of Right. had QX little way more fact that’s Yes, then I at the bit great a And that look layer sort a it was think in to holidays, lot lighter. a it.

disruption recovered And that might a you I you’re that then not chain always from, as XXX%, we think that on bit in do. operating did supply we’ve it’s XX days. have a consider May of but

at capacity in some of about think the Plus take Shield and mix then were I around to turn just we launch. able QX, add advantage we didn’t So looking

it difficult is But able Got make long takes just how you to back but And to from replenish some how then have do one the helpful. retail lastly, to most to extremely are, it. That you do market obviously, end before you’re actually here. inventories – inventories it here? assumption given you think takes think about to know, long get where

But versus seasonality obviously, what Yes, just levels, are will some certain definitely elevated? that back inventories lumping, do they And inventory look note anecdotal we XXXX. right? feedback on of demand able that that shelf to I in one believe will categories There etcetera. a the the remain the some into they from to obviously, on retailers is the categories. again lot we they’re the while other go out. think where that, thing from that stay But hearing pockets get here? some of the there’s are of sold So go factors like, do biggest But James. And they

Deana of there revolvers remained just distributor of not as there And general. is inventories end that’s us, For one and out our actually the as supply short example, that a pretty quarter. number gave of in is today, And week. at the for

going going I place. is So the have still be factor happens, to demand. When take restocking to a that’s of guess, significant a to there’s that

Mark it. you. thank and Deana, Got

you. Thank

Thanks, James.

with next Capital. Our Rommel Aegis from question comes Dionisio

Hi, good afternoon. Thanks.

sporting if unit – I seem of talk XX% little portion handgun First I the new goods, what just you about bit. contract And business is kind sector that of on doesn’t shipped, drove a the the big big a question, obviously, those wonder, professional mean, a a of it’s that year-over-year, that that on channel your or smaller handgun cyclical? wonder It jump doesn’t just industry that seem but in and was that be side. increase? So products? to really a all increase could I

of the remarks. it in business, – prepared So were part commerce. great I’ll have fourth in from to Rommel, a question. we our drive didn’t quarter, smaller you our because last to But focus it’s back, state a actually is to we year, And moving

were earlier the European States a by ability ship product really they the carriers really hard in shipments actually lot government. out. of thing lot United The down out. and up other get hit COVID-XX, the And with than the is internationally a governments of freight couldn’t and that shut held the So were and to in

and was receive European the that shipments COVID commerce the other February the of April, of and in countries between then of on the professional state impact sales. all more January stuck and and the normally for March So, that would

ago? well? have ‘XX Deana, by, wouldn’t But fiscal April wrapped up that was impacted year that much a Okay. what, as Or of pretty the

it’s accepting has a now. over Europe year been for running up. shipments, Yes, commerce been has been Yes. wrapped and

of So night compared commerce fiscal Europe international year as if of April way day ‘XX that February, want to way has you anymore. any sort the and there’s April in-licensing has that been not this of the and at when to holdups you is look running, been February, March, ship to March, receiving product

Okay, great. much. Thanks very

welcome. are You

Rommel. Thanks,

showing I’d at I’m questions back remarks. further like – Instructions] queue to not Smith time. Mark [Operator turn the this call in closing no for to

And be thank a members for fellow operator. & Smith to Wesson as year. just to everybody for Thanks, I Smith just we today. and team at a be as record-breaking a.m. for note earlier, reminder, X:XX And I us congratulations please Day we Time. joining that, presenting Eastern my Analyst presentation want Once will again, mentioned long-term an tomorrow will Wesson. our conducting Deana & strategy Standard

the Investor provided And our a Presentation page our of using please available in from stay taking safe the presentation speaking and to all and forward you on next our open Relations look with questions that, With materials release. the will quarter. We’re few calls to from analysts. we in share press public will the information be website. call our to

Thank call. you conference today’s participating. for concludes This

may You now disconnect.