SMITH & WESSON BRANDS, INC. - FORM 8-K

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SMITH & WESSON BRANDS, INC. Reports

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

December 6, 2012

Date of Report (Date of earliest event reported)

Smith & Wesson Holding Corporation

(Exact Name of Registrant as Specified in Charter)


Nevada	001-31552	87-0543688
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2100 Roosevelt Avenue Springfield, Massachusetts		01104
(Address of Principal Executive Offices)		(Zip Code)

(800) 331-0852

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

As described in Item 7.01, we are furnishing this Report on Form 8-K in connection with the disclosure of information during a conference call and webcast on December 6, 2012 discussing our second quarter fiscal 2013 financial results. The disclosure provided in Item 7.01 of this Report on Form 8-K is hereby incorporated by reference into this Item 2.02.

The information in this Current Report on Form 8-K is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 7.01 Regulation FD Disclosure.

We are furnishing this Current Report on Form 8-K in connection with the disclosure of information during a conference call and webcast on December 6, 2012 discussing our second quarter fiscal 2013 financial results. This information may be amended or updated at any time and from time to time through another Form 8-K, a later company filing, or other means.

In this Current Report on Form 8-K, a non-GAAP financial measure known as “Adjusted EBITDAS” is presented. From time-to-time, we consider and use Adjusted EBITDAS as a supplemental measure of operating performance in order to provide the reader with an improved understanding of underlying performance trends. Adjusted EBITDAS excludes the effects of interest expense, income taxes, depreciation of tangible fixed assets, amortization of intangible assets, stock-based employee compensation expense, loss on the sale of discontinued operations, DOJ and SEC investigation costs, and certain other transactions. See the reconciliation of GAAP Net Income below for detailed explanations of the amounts excluded from and included in net income to arrive at Adjusted EBITDAS for the trailing 12-month period ended October 31, 2012. Adjusted or non-GAAP financial measures provide investors and us with supplemental measures of operating performance and trends that facilitate comparisons between periods before, during, and after certain items that would not otherwise be apparent on a GAAP basis. Adjusted financial measures are not, and should not be viewed as, a substitute for GAAP results. Our definition of these adjusted financial measures may differ from similarly named measures used by others. Also included is a reconciliation of GAAP Net Income for the trailing 12-month period ended October 31, 2012.

SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDAS (Unaudited)


	Trailing Twelve Months Ended, October 31, 2012
	GAAP			Adjustments			Adjusted
Net sales	$	500,523			—		$	500,523
Cost of sales		323,840		$	(13,720	)(1)		310,120

Gross profit		176,683			13,720			190,403

Operating expenses:
Research and development		4,384			(111	)(1)		4,273
Selling and marketing		29,426			(228	)(1)		29,198
General and administrative		49,000			(6,031	)(2)		42,969

Total operating expenses		82,810			(6,370	)		76,440

Operating income from continuing operations		93,873			20,090			113,963

Other income/(expense):
Other income/(expense), net		63			—	(4)		63
Interest income		1,406			(1,270	)(7)		136
Interest expense		(6,399	)		6,399	(5)		—

Total other income/(expense), net		(4,930	)		5,129			199

Income from continuing operations before income taxes		88,943			25,219			114,162
Income tax expense		30,461			(30,461	)(6)		—

Income from continuing operations		58,482			55,680			114,162
Discontinued operations:
Loss from operations of discontinued security solutions division		(11,789	)		8,203	(8)		(3,586	)
Income tax benefit		(9,185	)		9,185	(6)		—

Loss from discontinued operations		(2,604	)		(982	)		(3,586	)

Net income/comprehensive income	$	55,878		$	54,698		$	110,576

(1)	To eliminate depreciation, amortization, and plant consolidation costs.

(2)	To eliminate depreciation, amortization, stock-based compensation expense, and DOJ/SEC costs and related profit sharing impacts of DOJ/SEC.

(3)	To eliminate depreciation, amortization, stock-based compensation expense, plant consolidation costs, severance beneifts for our former President and CEO, and DOJ/SEC costs and related profit sharing impacts of DOJ/SEC.

(4)	To eliminate unrealized mark-to-market adjustments on foreign exchange contracts. We did not have any foreign exchange contracts that required mark-to-market adjustments for all periods presented.

(5)	To eliminate interest expense.

(6)	To eliminate income tax expense.

(7)	To eliminate intercompany interest income.

(8)	To eliminate depreciation, amortization, interest expense, and stock-based compensation expense.

(9)	To eliminate depreciation and amortization.

SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME FOR TRAILING TWELVE MONTHS (Unaudited)


	For the Three Months Ended,												Trailing Twelve Months Ended October 31, 2012
	January 31, 2012			April 30, 2012			July 31, 2012			October 31, 2012			GAAP
Net sales	$	98,125		$	129,843		$	135,995		$	136,560		$	500,523
Cost of sales		68,121			82,980			84,702			88,037			323,840

Gross profit		30,004			46,863			51,293			48,523			176,683

Operating expenses:
Research and development		992			973			1,142			1,278			4,385
Selling and marketing		8,062			6,495			6,828			8,042			29,427
General and administrative		10,666			13,729			12,025			12,579			48,999

Total operating expenses		19,720			21,197			19,995			21,899			82,811

Operating income from continuing operations		10,284			25,666			31,298			26,624			93,872

Other income/(expense):
Other income/(expense), net		8			16			—			39			63
Interest income		394			309			368			335			1,406
Interest expense		(1,629	)		(1,439	)		(1,987	)		(1,344	)		(6,399	)

Total other income/(expense), net		(1,227	)		(1,114	)		(1,619	)		(970	)		(4,930	)

Income from continuing operations before income taxes		9,057			24,552			29,679			25,654			88,942
Income tax expense		3,664			6,735			10,808			9,253			30,460

Income from continuing operations		5,393			17,817			18,871			16,401			58,482
Discontinued operations:
Loss from operations of discontinued security solutions division		(1,600	)		(7,639	)		(1,683	)		(867	)		(11,789	)
Income tax benefit		(645	)		(2,290	)		(598	)		(5,651	)		(9,184	)

Income/(loss) from discontinued operations		(955	)		(5,349	)		(1,085	)		4,784			(2,605	)

Net income/comprehensive income	$	4,438		$	12,468		$	17,786		$	21,185		$	55,877

The information in this Current Report on Form 8-K is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information in the Current Report that is required to be disclosed solely by Regulation FD.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this Current Report on Form 8-K is available on our website located at www.smith-wesson.com, although we reserve the right to discontinue that availability at any time.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SMITH & WESSON HOLDING CORPORATION

Date: December 6, 2012

/s/ Jeffrey D. Buchanan

Jeffrey D. Buchanan

Executive Vice President, Chief Financial Officer,

and Treasurer