Smith & Wesson’s parent company, American Outdoor Brands Corporation, released its Third Quarter Fiscal 2018 Financial Results on 1st March announcing a substantial fall in sales. The company expects ‘flattish’ revenues from the firearms sector for at least the next 12 to 18 months.
Established in 2002, American Outdoor brands include Smith & Wesson, Gemtech and Crimson Trace. On the 1st March, the company reported that quarterly net sales fell by 32.6% – down to $157.4 million, compared to the $233.5 million for the third quarter of 2017.
In a press release issued with the financial report James Debney, President and CEO explained that the company’s “results for the third quarter reflected a continuation of challenging market conditions in the consumer market for firearms. …new, lower levels of consumer firearm demand we saw reflected in the January NICS results may continue for some time.”
The slow down in sales and the potential for overproduction has required Smith & Wesson to slow production and inevitably reduce its workforce. In a conference call, hosted to accompany the release of the report, Debney confirmed that the company had had to reduce its workforce by about 25% over that past year. This equals more than 200 staff.
The company’s CFO and executive vice president, Jeff Buchanan, said in the press release that American Outdoor Brands “ended the quarter with cash of $38.2 million and net debt of approximately $200 million. Our focus on reducing production levels during the quarter helped to lower inventories of our firearms.”
Buchanan went on to describe cashflow for the quarter as ‘positive’ and that the “balance sheet remains strong with no short-term debt and we anticipate positive cash flow for our fiscal fourth quarter.” despite the continued downturn Debney remained upbeat saying that “our long-term strategy remains focused on being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast.”
You can view the financial report and press release from American Outdoor Brands here.