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Earnings Estimates Highlights: Smith & Wesson Holding Corporation (NASDAQ:SWHC)

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Smith & Wesson Holding Corporation (NASDAQ:SWHC) reported earnings for the three months ended April 2016 on June 16, 2016. The company earned $0.66 per share on revenue of $221.12M. Analysts had been modeling earning per share of $0.54 with $214.55M in revenue.

Smith & Wesson Holding Corporation (NASDAQ:SWHC) announced financial results for the fiscal fourth quarter and full year ended April 30, 2016.

Fourth Quarter Fiscal 2016 Financial Highlights

  • Quarterly net sales were $221.1 million, an increase of 22.2% over the fourth quarter last year.  Firearms division net sales of $203.7 million increased by 22.4% over the comparable quarter last year.  Accessories division net sales of $17.5 million increased by 19.8% over the comparable quarter last year.
  • Gross margin for the quarter was 41.6% compared with 37.1% for the comparable quarter last year.
  • Quarterly GAAP net income was $35.6 million, or $0.63 per diluted share, compared with $21.9 million, or $0.40 per diluted share, for the comparable quarter last year. Fourth quarter 2016 and 2015 GAAP net income per diluted share included an expense of $1.7 million and $1.5 million, respectively, for amortization, net of tax, related to the Battenfeld Technologies, Inc. (BTI) acquisition.
  • Quarterly non-GAAP net income was $37.4 million, or $0.66 per diluted share, compared with $24.9 million, or $0.45 per diluted share, for the comparable quarter last year.
  • Quarterly non-GAAP Adjusted EBITDAS was $68.7 million, or 31.1% of net sales.

Full Year Fiscal 2016 Financial Highlights

  • Full year net sales totaled $722.9 million, an increase of 31.0% from last year. Firearms division net sales were $657.6 million, an increase of 23.8% from last year.  Accessories division net sales were $65.3 million, an increase from $20.6 million from last year, a year in which the company acquired BTI and therefore reported only five months of accessories division sales in 2015.
  • Full year gross margin was 40.6% compared with 35.3% last year.
  • Full year GAAP income from continuing operations was $94.0 million, or $1.68 per diluted share, compared with $49.8 million, or $0.90 per diluted share, last year.
  • Full year non-GAAP income from continuing operations was $1.83 per diluted share, compared with $1.02 per diluted share last year.
  • Full year non-GAAP Adjusted EBITDAS from continuing operations was $202.4 million, or 28.0% of net sales.

Smith & Wesson Holding Corporation earnings per share showed an increasing trend of 86.2% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 189%.Analysts project EPS growth over the next 5 years at 15%. It has EPS annual growth over the past 5 fiscal years of 67.6% when sales grew 16.1. It reported 22.2% sales growth, and 58.6% EPS growth in the last quarter.

The stock is trading at $25.33, up 72.2% from 52-week low of $14.71. The stock trades down -16.79% from its peak of $30.44 and % below the consensus price target of $29. Its volume clocked up at 2.27 million shares which is lower than the average volume of 2.43 million shares. Its market capitalization currently stands at $1.43B.

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