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Smith & Wesson Holding grows 27.4% in first quarter of 2006
16 Jun '06
9 min read
Gross margin of 31.0 percent for fiscal 2006 was lower than gross margin of 32.5 percent for fiscal 2005. However, the gross profit for fiscal 2005 included $4.1 million in one-time insurance benefits. Without the impact of that one-time insurance event, gross profit and margin for fiscal 2005 would
have been $36.8 million and 29.3 percent.
The gross margin for the fourth quarter was 34.8 percent, a substantial improvement over the gross margin for the first three quarters of fiscal 2006. The improvement in gross margin in the fourth quarter of 2006 was attributable to the first full quarter of M&P pistol shipments and increased handgun production, driven by improved labor efficiency.
Operating expenses for fiscal 2006 were $35.1 million compared with $29.7 million for fiscal 2005. Operating expenses for fiscal 2006 were net of a $3.1 million reduction in our accruals for estimated environmental remediation costs. Operating expenses as a percentage of sales and licensing, excluding the environmental adjustment, were 23.8 percent, compared with 23.6 percent for fiscal 2005.
The increase in operating expenses was attributable to expanded sales efforts, increased costs related to the implementation of Sarbanes Oxley 404 compliance during 2006, and increased stock option expense. Stock option expense was $2.1 million for fiscal 2006, compared with $626,000 in fiscal 2005. We also incurred $1.6 million in fiscal 2006 for Sarbanes Oxley 404 consulting expense, versus $288,000 in fiscal 2005.
have been $36.8 million and 29.3 percent.
The gross margin for the fourth quarter was 34.8 percent, a substantial improvement over the gross margin for the first three quarters of fiscal 2006. The improvement in gross margin in the fourth quarter of 2006 was attributable to the first full quarter of M&P pistol shipments and increased handgun production, driven by improved labor efficiency.
Operating expenses for fiscal 2006 were $35.1 million compared with $29.7 million for fiscal 2005. Operating expenses for fiscal 2006 were net of a $3.1 million reduction in our accruals for estimated environmental remediation costs. Operating expenses as a percentage of sales and licensing, excluding the environmental adjustment, were 23.8 percent, compared with 23.6 percent for fiscal 2005.
The increase in operating expenses was attributable to expanded sales efforts, increased costs related to the implementation of Sarbanes Oxley 404 compliance during 2006, and increased stock option expense. Stock option expense was $2.1 million for fiscal 2006, compared with $626,000 in fiscal 2005. We also incurred $1.6 million in fiscal 2006 for Sarbanes Oxley 404 consulting expense, versus $288,000 in fiscal 2005.
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