Smith & Wesson (SWHC) Guides Q3 Higher

Smith & Wesson Holding Corporation (NASDAQ: SWHC) announced that it is updating expectations for its third quarter and full 2016 fiscal year, which will end on April 30, 2016. The company indicated that the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms. The company added that Adjusted National Instant Criminal Background Check System (NICS) data for the month of December, which serves as an indicator of consumer purchases, reflected strong growth versus December 2014.

Sees Q3 non-GAAP EPS of $0.39-$0.41 versus the consensus of $0.28.

Sees FY non-GAAP EPS of $1.36-$1.41 versus the consensus of $1.32.

Financial Outlook

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, certain non-GAAP financial measures, including "non-GAAP earnings per share" are presented. From time-to-time, the company considers and uses these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. The company believes it is useful for itself and the reader to review, as applicable, both (1) GAAP measures that include (i) amortization of acquired intangible assets, (ii) insurance recovery costs, (iii) bond premium, (iv) debt extinguishment costs, (v) the tax effect of non-GAAP adjustments; and (2) the non-GAAP measures that exclude such information. The company presents these non-GAAP measures because it considers them an important supplemental measure of its performance. The company's definition of these adjusted financial measures may differ from similarly named measures used by others. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the company's GAAP measures. The principal limitations of these measures are that they do not reflect the company's actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.

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