What changed in SMITH & WESSON BRANDS, INC.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of SMITH & WESSON BRANDS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+76 added−97 removedSource: 10-K (2024-06-20) vs 10-K (2023-06-22)
Top changes in SMITH & WESSON BRANDS, INC.'s 2024 10-K
76 paragraphs added · 97 removed · 64 edited across 2 sections
- Item 7. Management's Discussion & Analysis+69 / −91 · 59 edited
- Item 5. Market for Registrant's Common Equity+7 / −6 · 5 edited
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+2 added−1 removed3 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
5 edited+2 added−1 removed3 unchanged
2023 filing
2024 filing
Biggest changePayment of any cash dividends depends on our financial condition, operating results, and capital requirements as well as other factors deemed relevant by our board of directors. We paid dividends totaling $18.3 million and $15.0 million during fiscal 2023 and 2022, respectively.
Biggest changePayment of any cash dividends depends on our financial condition, operating results, and capital requirements as well as other factors deemed relevant by our board of directors. We paid dividends totaling $22.0 million and $18.3 million during fiscal 2024 and 2023, respectively.
The graph assumes an investment of $100 on April 30, 2018, with dividends reinvested. The performance shown is not necessarily indicative of future performance. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Smith & Wesson Brands, Inc., The Russell 2000 Index, And Peer Group * $100 invested on April 30, 2018 in stock or index — including reinvestment of dividends.
The graph assumes an investment of $100 on April 30, 2018, with dividends reinvested. The performance shown is not necessarily indicative of future performance. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Smith & Wesson Brands, Inc., The Russell 2000 Index, And Peer Group * $100 invested on April 30, 2019 in stock or index — including reinvestment of dividends.
Securities Authorized for Issuance under Equity Compensation Plans For equity compensation plan information, refer to Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters) in Part III of this Annual Report on Form 10-K. 34 Performance Graph The following line graph compares cumulative total stockholder returns for the five years ended April 30, 2023 for (i) our common stock, (ii) the Russell 2000 Index, and (iii) the S&P Composite 1500 Leisure Products Index (S&P 1500 Leisure Products on the graph below).
Securities Authorized for Issuance under Equity Compensation Plans For equity compensation plan information, refer to Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters) in Part III of this Annual Report on Form 10-K. 36 Performance Graph The following line graph compares cumulative total stockholder returns for the five years ended April 30, 2024 for (i) our common stock, (ii) the Russell 2000 Index, and (iii) the S&P Composite 1500 Leisure Products Index (S&P 1500 Leisure Products on the graph below).
A substantially greater number of holders of common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions. Dividend Policy SWBI has paid dividends on a quarterly basis since August 2020. Quarterly dividends, when declared, are paid approximately three weeks after earnings are announced.
A substantially greater number of holders of common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions. Dividend Policy We have paid dividends on a quarterly basis since August 2020. Quarterly dividends, when declared, are paid approximately four weeks after earnings are announced.
The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, are not liable for further call or assessment, and are not entitled to cumulative voting rights. Holders On June 21, 2023, there were 885 record holders of our common stock.
The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, are not liable for further call or assessment, and are not entitled to cumulative voting rights. Holders On June 19, 2024, there were 881 record holders of our common stock.
Removed
The performance graph above will not be deemed incorporated by reference into any filing of our company under the Securities Act of 1933, as amended, or the Securities Act. 35 Repurchases of Common Stock As of April 30, 2023, we had no authorized share repurchase programs. We did not purchase any shares of our common stock during fiscal 2023.
Added
The performance graph above will not be deemed incorporated by reference into any filing of our company under the Securities Act. 37 Repurchases of Common Stock The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the quarter ended April 30, 2024 (dollars in thousands, except per share data): Total # of Shares Maximum Dollar Purchased as Value of Shares Part of Publicly that May Yet Be Total # of Average Announced Purchased Shares Price Paid Plans or Under the Plans Period Purchased Per Share (1) Programs (2) or Programs February 1 to February 29, 2024 51,774 $ 12.99 51,774 $ 40,198 April 1 to April 30, 2024 24,908 16.48 24,908 39,787 Total 76,682 $ 14.12 76,682 $ 39,787 (1) The average price per share excludes fees paid to acquire the shares.
Added
(2) On September 19, 2023, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024. During fiscal 2024, we repurchased 793,551 shares of our common stock for $10.2 million, utilizing cash on hand. Item 6. RESERVED 38
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
59 edited+10 added−32 removed35 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
59 edited+10 added−32 removed35 unchanged
2023 filing
2024 filing
Biggest changeResults of Operations Net Sales and Gross Profit The following table sets forth certain information regarding net sales and gross profit for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Handguns $ 360,668 $ 624,219 $ (263,551 ) -42.2 % $ 755,735 Long Guns 74,230 189,467 (115,237 ) -60.8 % 253,340 Other Products & Services 44,344 50,440 (6,096 ) -12.1 % 50,120 Total net sales $ 479,242 $ 864,126 $ (384,884 ) -44.5 % $ 1,059,195 Cost of sales 324,705 489,562 (164,857 ) -33.7 % 610,212 Gross profit $ 154,537 $ 374,564 $ (220,027 ) -58.7 % $ 448,983 % of net sales (gross margin) 32.2 % 43.3 % 42.4 % The following table sets forth certain information regarding units shipped by trade channel for the fiscal years ended April 30, 2023, 2022, and 2021 (units in thousands): Total Units Shipped 2023 2022 # Change % Change 2021 Handguns 793 1,518 (725 ) -47.8% 2,079 Long Guns 148 363 (215 ) -59.2% 524 Sporting Goods Channel Units Shipped 2023 2022 # Change % Change 2021 Handguns 734 1,422 (688 ) -48.4% 1,953 Long Guns 137 342 (205 ) -59.9% 508 Professional Channel Units Shipped 2023 2022 # Change % Change 2021 Handguns 59 96 (37 ) -38.5% 126 Long Guns 11 21 (10 ) -47.6% 16 38 Fiscal 2023 Net Sales and Gross Profit Compared with Fiscal 2022 Sales of our handguns decreased $263.6 million, or 42.2%, from fiscal 2022, primarily as a result of a return to more normalized demand from the historic pandemic-related demand that lasted from March 2020 through the beginning of fiscal 2022 as competing products became more available through the replenishment of depleted channel inventory, partially offset by net sales generated from increased shipments of new products, which represented 26.8% of sales in the period, combined with one price increase of 5% on select products.
Biggest changeResults of Operations Net Sales and Gross Profit The following table sets forth certain information regarding net sales and gross profit for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Handguns $ 381,898 $ 360,668 $ 21,230 5.9 % $ 624,219 Long Guns 116,491 74,230 42,261 56.9 % 189,467 Other Products & Services 37,444 44,344 (6,900 ) -15.6 % 50,440 Total net sales $ 535,833 $ 479,242 $ 56,591 11.8 % $ 864,126 Cost of sales 377,740 324,705 53,035 16.3 % 489,562 Gross profit $ 158,093 $ 154,537 $ 3,556 2.3 % $ 374,564 % of net sales (gross margin) 29.5 % 32.2 % 43.3 % The following table sets forth certain information regarding units shipped by trade channel for the fiscal years ended April 30, 2024, 2023, and 2022 (units in thousands): Total Units Shipped 2024 2023 # Change % Change 2022 Handguns 836 793 43 5.4% 1,518 Long Guns 228 148 80 54.1% 363 Sporting Goods Channel Units Shipped 2024 2023 # Change % Change 2022 Handguns 775 734 41 5.6% 1,422 Long Guns 210 137 73 53.3% 342 Professional Channel Units Shipped 2024 2023 # Change % Change 2022 Handguns 61 59 2 3.4% 96 Long Guns 18 11 7 63.6% 21 Sales of our handguns increased $21.2 million, or 5.9%, over fiscal 2023, primarily as a result of increased shipments of revolvers, increased shipments of newly introduced products (defined as any new SKU not shipped in the prior year), which represented 22.8% of handgun sales in the period, the impact of targeted promotions on certain polymer frame pistols, and a 2%-5% price increase on select products that became effective in the third fiscal quarter, partially offset by lower demand for several older handgun products and certain products that were introduced in the 40 prior year.
We also track our return on invested capital, and we use adjusted EBITDAS (earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense, excluding certain non-operational items), which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of 37 underlying performance trends.
We also track our return on invested capital, and we use adjusted EBITDAS (earnings before interest, taxes, depreciation, amortization, and stock-based compensation expense, excluding certain non-operational items), which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of underlying performance trends.
While inventory levels, both internally and in the distribution channel, in excess of demand may negatively impact future operating results, it is difficult to forecast the potential impact of distributor inventories on future revenue and income as demand is impacted 39 by many factors, including seasonality, new product introductions, news events, political events, and consumer tastes.
While inventory levels, both internally and in the distribution channel, in excess of demand may negatively impact future operating results, it is difficult to forecast the potential impact of distributor inventories on future revenue and income as demand is impacted by many factors, including seasonality, new product introductions, news events, political events, and consumer tastes.
On April 28, 2023, we entered into an amendment to our existing credit agreement to, among other things, replace LIBOR with SOFR as the interest rate benchmark and amend the definition of "Consolidated Fixed Charge Coverage Ratio" to exclude unfinanced capital expenditures in connection with the Relocation. 46 I tem 8.
On April 28, 2023, we entered into an amendment to our existing credit agreement to, among other things, replace LIBOR with SOFR as the interest rate benchmark and amend the definition of "Consolidated Fixed Charge Coverage Ratio" to exclude unfinanced capital expenditures in connection with the Relocation. I tem 8.
Changes in these estimates can have a significant impact on the assessment of excess and obsolete inventory, which could result in material losses. 45 Warranty Description : We generally provide a limited one-year warranty and a lifetime service policy to the original purchaser of our new firearm products.
Changes in these estimates can have a significant impact on the assessment of excess and obsolete inventory, which could result in material losses. Warranty Description : We generally provide a limited one-year warranty and a lifetime service policy to the original purchaser of our new firearm products.
Generally, 44 all performance obligations are satisfied and revenue is recognized when the risks and rewards of ownership have transferred to the customer, which is generally upon shipment but could be delayed until the receipt of customer acceptance. Judgments and Uncertainties : In some instances, sales include multiple performance obligations.
Generally, all performance obligations are satisfied and revenue is recognized when the risks and rewards of ownership have transferred to the customer, which is generally upon shipment but could be delayed until the receipt of customer acceptance. Judgments and Uncertainties : In some instances, sales include multiple performance obligations.
Inherent Limitations on the Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of 47 achieving the desired control objectives.
Inherent Limitations on the Effectiveness of Controls and Procedures In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
Changes in these assumptions can have a significant impact on the estimate of these liabilities. Recent Accounting Pronouncements The nature and impact of recent accounting pronouncements is discussed in Note 2 — Significant Accounting Policies to our consolidated financial statements, which is incorporated herein by reference.
Changes in these assumptions can have a significant impact on the estimate of these liabilities. 46 Recent Accounting Pronouncements The nature and impact of recent accounting pronouncements is discussed in Note 2 — Significant Accounting Policies to our consolidated financial statements, which is incorporated herein by reference.
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of April 30, 2023, the end of the period covered by this Annual Report on Form-10-K.
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of April 30, 2024, the end of the period covered by this Annual Report on Form-10-K.
The effectiveness of our internal control over financial reporting as of April 30, 2023 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, which also audited our consolidated financial statements for fiscal 2023. Deloitte & Touche LLP's report on our internal control over financial reporting is included herein.
The effectiveness of our internal control over financial reporting as of April 30, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, which also audited our consolidated financial statements for fiscal 2024. Deloitte & Touche LLP's report on our internal control over financial reporting is included herein.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). Based on that evaluation, management believes that our internal control over financial reporting was effective as of April 30, 2023.
Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). Based on that evaluation, management believes that our internal control over financial reporting was effective as of April 30, 2024.
Judgments and Uncertainties : In accounting for severance and relocation costs, management must make a variety of assumptions and estimates, including, but not limited to, the number of employees that will meet all of the requirements to receive the severance and relocation package, the number of those employees that will be electing to relocate versus opt for severance, and the potential cost of self-insured benefits that may be incurred during any potential severance period.
Judgments and Uncertainties : In accounting for severance and relocation costs, we must make a variety of assumptions and estimates, including the number of employees that will meet all of the requirements to receive the severance and relocation package, the number of those employees that will be electing to relocate versus opt for severance, and the potential cost of self-insured benefits that may be incurred during any potential severance period.
The revolving line provides for availability for general corporate purposes, with borrowings to bear interest at either the Base Rate or LIBOR rate, plus an applicable margin based on our consolidated leverage ratio, as of April 30, 2023.
The Revolving Line provides for availability for general corporate purposes, with borrowings to bear interest at either the Base Rate or SOFR rate, plus an applicable margin based on our consolidated leverage ratio, as of April 30, 2024.
During fiscal 2023, we paid approximately $1.2 million in principal payments relating to the Missouri Lease. With the completion of the Separation, we entered into the Missouri Sublease. On July 16, 2022, we entered into an amendment to the Missouri Sublease, increasing the subleased space to 64.7% of the facility under the same terms as the Missouri Lease.
During fiscal 43 2024, we paid approximately $1.3 million in principal payments relating to the Missouri Lease. With the completion of the Separation, we entered into the Missouri Sublease. On July 16, 2022, we entered into an amendment to the Missouri Sublease, increasing the subleased space to 64.7% of the facility under the same terms as the Missouri Lease.
The Company believes the following are its critical accounting estimates: Revenue Recognition Description : We recognize revenue in accordance with the provisions of Accounting Standards Update, or ASU, Revenue from Contracts with Customers (Topic 606), which became effective for us on May 1, 2018.
We believe the following are our critical accounting estimates: Revenue Recognition Description : We recognize revenue in accordance with the provisions of Accounting Standards Update, or ASU, Revenue from Contracts with Customers (Topic 606), which became effective for us on May 1, 2018.
We estimate that the annual domestic non-military firearm market is approximately $3.5 billion for handguns and $1.6 billion for long guns, excluding shotguns, based on the latest data for industry shipments as calculated by the National Shooting Sports Foundation, or NSSF, utilizing Firearms and Ammunition Excise Tax data for calendar year 2022. According to calendar 2021 reports by the U.S.
We estimate that the annual domestic non-military firearm market is approximately $2.9 billion for handguns and $1.8 billion for long guns, excluding shotguns, based on the latest data for industry shipments as calculated by the National Shooting Sports Foundation, or NSSF, utilizing Firearms and Ammunition Excise Tax data for calendar year 2023. According to calendar 2022 reports by the U.S.
Liquidity and Capital Resources Our principal cash requirements are to (1) finance the growth of our operations, including working capital and capital expenditures, (2) fund the Relocation, and (3) return capital to our stockholders. Capital expenditures for the Relocation, new product development, and repair and replacement of equipment represent important cash needs.
Liquidity and Capital Resources Our principal cash requirements are to finance the growth of our operations, including working capital and capital expenditures, and return capital to our stockholders. Capital expenditures for new product development and repair and replacement of equipment represent important cash needs.
Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, the U.S. firearm manufacturing industry grew at a 3.7% compound annual growth rate in units from 2016 through 2021, although there has been wide variation among years (e.g., 2019 to 2020 grew 58.0%).
Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, the U.S. firearm manufacturing industry grew at a 10.0% compound annual growth rate in units from 2017 through 2022, although there has been wide variation among years (e.g., 2019 to 2020 grew 58.0%).
Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during our fourth fiscal quarter of 2023 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. I tem 9B. Other Information Not applicable.
Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during our fourth fiscal quarter of 2024 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. I tem 9B.
Our principal market risk relates to the variable interest rate associated with our credit agreement, which consists of a $100.0 million revolving line of credit that bears interest at a variable rate equal to LIBOR or prime, at our election, plus an applicable margin based on our consolidated leverage ratio.
Our principal market risk relates to the variable interest rate associated with our credit agreement, which consists of a $100.0 million revolving line of credit that bears interest either the Base Rate or SOFR rate, plus an applicable margin based on our consolidated leverage ratio.
In total, we expect to incur capital expenditures in connection with the construction and equipping of the new facility in an aggregate amount of approximately $160.0 million to $170.0 million through the end of fiscal 2024. Through April 30, 2023, we had incurred $93.5 million of capital expenditures and $18.5 million of other restructuring charges related to the Relocation.
In total, we expect to incur capital expenditures in connection with the construction and equipping of the new facility in an aggregate amount of approximately $160.0 million to $170.0 million. Through April 30, 2024, we had incurred $157.0 million of capital expenditures and $25.6 million of other restructuring charges related to the Relocation.
We were in compliance with all debt covenants as of April 30, 2023. Share Repurchase Programs – On March 2, 2021, our board of directors authorized the repurchase of $100.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions until March 2022.
We were in compliance with all debt covenants as of April 30, 2024. Share Repurchase Programs – On September 19, 2023, our Board of Directors authorized the repurchase of $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under Item 1A, “Risk Factors” and elsewhere in this report.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under Item 1A, “Risk Factors” and elsewhere in this report. This section generally discusses year-to-year comparisons between fiscal 2024 and fiscal 2023.
For more information regarding our financing arrangements, see Note 5 — Notes, Loans Payable, and Financing Arrangements . As of April 30, 2023, we had $25.0 million of borrowings outstanding on the Revolving Line, which bore an interest rate of 6.62%, which is equal to the LIBOR rate plus an applicable margin.
For more information regarding our financing arrangements, see Note 4 — Notes, Loans Payable, and Financing Arrangements . As of April 30, 2024, we had $40.0 million of borrowings outstanding on the Revolving Line, which bore an interest rate of 7.18%, which is equal to SOFR rate plus an applicable margin.
Other products and services sales decreased $6.1 million, or 12.1%, from fiscal 2022, primarily because of decreased sales of component parts and business-to-business sales, partially offset by increased sales of handcuffs.
Other products and services sales decreased $6.9 million, or 15.6%, from fiscal 2023, primarily because of decreased sales of component parts, decreased business-to-business sales, and decreased licensing revenue, partially offset by increased sales of handcuffs.
As of April 30, 2023, we had $25.0 million of borrowings outstanding on the Revolving Line, which bore interest at 6.62%, which was equal to the LIBOR rate plus an applicable margin. The credit agreement for our credit facility contains financial covenants relating to maintaining maximum leverage and minimum debt service coverage.
As of April 30, 2024, we had $40.0 million of borrowings outstanding on the Revolving Line, bearing interest at an average rate of 7.18%, which was equal to SOFR rate plus an applicable margin. The credit agreement for our credit facility contains financial covenants relating to maintaining a maximum leverage ratio and a minimum debt service coverage ratio.
We recorded $2.3 million of income related to the Missouri Sublease, of which $1.1 million was recorded in general and administrative expenses and $1.2 million was recorded in interest income in our condensed consolidated statements of income.
For fiscal 2024, income related to the Missouri Sublease was $2.7 million, of which $1.3 million was recorded in general and administrative expenses and $1.4 million was recorded in interest expense, net, in our consolidated statements of income.
In connection with the Relocation, we are building a new facility in Maryville. Our corporate headquarters, some of our Springfield manufacturing operations, a portion of our Deep River plastic injection molding facility, and our Columbia distribution operations will be relocated to Maryville.
In connection with the Relocation, we built a new facility in Maryville, Tennessee and relocated some of our Springfield, Massachusetts operations and all of our Columbia, Missouri distribution operations to Maryville. We are in the process of relocating our corporate headquarters and a portion of our Deep River, Connecticut plastic injection molding operations to Maryville.
At April 30, 2023, we had $53.6 million in cash and cash equivalents on hand. Based upon our current working capital position, current operating plans, and expected business conditions, we believe that our existing capital resources and credit facilities will be adequate to fund our operations for the next 12 months.
Based upon our current working capital position, current operating plans, and expected business conditions, we believe that our existing capital resources and credit facilities will be adequate to fund our operations for the next 12 months.
We determine fair value primarily using future anticipated cash flows that are directly associated with and are expected to arise as a direct result of the use and eventual disposition of the asset, or asset group, discounted using an interest rate commensurate with the risk involved.
We determine fair value primarily using future anticipated cash flows that are directly associated with and are expected to arise as a direct result of the use and eventual disposition of the asset, or asset group, discounted using an interest rate commensurate with the risk involved. 45 Judgments and Uncertainties : Determining whether impairment indicators exist and estimating the fair value of our goodwill, tangible and intangible assets requires significant judgment.
Management’s Annual Report on Internal Control Over Financial Reporting Evaluation of Disclosure Controls and Procedures Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Based on that evaluation, we have concluded that, as of the end of the period covered by this Annual Report on Form-10-K, our disclosure controls and procedures were effective to provide such reasonable assurance. 47 Management’s Annual Report on Internal Control Over Financial Reporting Evaluation of Disclosure Controls and Procedures Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
We expect that there will be an increased impact from inflation during fiscal 2024. Critical Accounting Estimates Management's discussion and analysis of financial condition and results of operations is based upon the Company's consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
Operating Expenses The following table sets forth certain information regarding operating expenses for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Research and development $ 7,550 $ 7,262 $ 288 4.0 % $ 7,480 Selling, marketing, and distribution 36,976 43,156 (6,180 ) -14.3 % 42,603 General and administrative 61,604 72,493 (10,889 ) -15.0 % 79,268 Total operating expenses $ 106,130 $ 122,911 $ (16,781 ) -13.7 % $ 129,351 % of net sales 22.1 % 14.2 % 12.2 % Fiscal 2023 Operating Expenses Compared with Fiscal 2022 Operating expenses decreased $16.8 million from the prior fiscal year.
Operating Expenses The following table sets forth certain information regarding operating expenses for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Research and development $ 7,266 $ 7,550 $ (284 ) -3.8 % $ 7,262 Selling, marketing, and distribution 40,564 36,976 3,588 9.7 % 43,156 General and administrative 65,484 61,604 3,880 6.3 % 72,493 Total operating expenses $ 113,314 $ 106,130 $ 7,184 6.8 % $ 122,911 % of net sales 21.1 % 22.1 % 14.2 % Operating expenses increased $7.2 million over the prior fiscal year.
Our future capital requirements will depend on many factors, including net sales, the construction of the new facility in Maryville, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, and the costs to ensure access to adequate manufacturing capacity.
Our future capital requirements will depend on many factors, including net sales, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, and the costs to ensure access to adequate manufacturing capacity. 44 Inflation During fiscal 2024 and 2023, inflationary pressures resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, as well as labor costs.
On January 31, 2023, we entered into the Assignment and Assumption Agreement and the Amended and Restated Guaranty. We intend to terminate the Missouri Sublease on or around the effective date of the Assignment and Assumption Agreement.
As part of the Relocation, on January 31, 2023, we entered into the Assignment and Assumption Agreement and the Amended and Restated Guaranty. We terminated the Missouri Sublease as of January 1, 2024.
The following table sets forth certain cash flow information for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Operating activities $ 16,732 $ 137,814 $ (121,082 ) -87.9 % $ 317,260 Investing activities (89,781 ) (24,116 ) (65,665 ) -272.3 % (22,261 ) Financing activities 5,877 (105,987 ) 111,864 105.5 % (303,758 ) Total cash flow $ (67,172 ) $ 7,711 $ (74,883 ) -971.1 % $ (8,759 ) Operating Activities Operating activities represent the principal source of our cash flow.
The following table sets forth certain cash flow information for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Operating activities $ 106,739 $ 16,732 $ 90,007 537.9 % $ 137,814 Investing activities (81,490 ) (89,781 ) 8,291 9.2 % (24,116 ) Financing activities (17,966 ) 5,877 (23,843 ) 405.7 % (105,987 ) Total cash flow $ 7,283 $ (67,172 ) $ 74,455 -110.8 % $ 7,711 Operating Activities Operating activities represent the principal source of our cash flow.
Income Tax Expense The following table sets forth certain information regarding income tax expense for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Income tax expense $ 11,350 $ 57,892 $ (46,542 ) -80.4 % $ 74,394 % of income from operations (effective tax rate) 23.5 % 22.9 % 0.6 % 23.4 % 41 We recorded income tax expense of $11.4 million for fiscal 2023, $46.5 million lower than the prior fiscal year, primarily because of decreased profitability.
Income Tax Expense The following table sets forth certain information regarding income tax expense for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Income tax expense $ 9,787 $ 11,350 $ (1,563 ) -13.8 % $ 57,892 % of income from operations (effective tax rate) 19.8 % 23.5 % -3.7 % 22.9 % We recorded income tax expense of $9.8 million for fiscal 2024, $1.6 million lower than the prior fiscal year, in spite of increased profitability, primarily as a result of an amendment of prior year returns for the foreign derived income deduction that favorably reduced current year income tax expense by $1.4 million, or 2.9%.
Handgun unit shipments into the sporting goods channel decreased 48.4% from fiscal 2022, while overall consumer demand decreased 3.3%, (as indicated by adjusted background checks for handguns reported to the National Instant Criminal Background Check System, or NICS). In addition, during the fiscal year, handgun inventory in our distribution channel declined by 44.4%, which negatively impacted our net sales.
Handgun unit shipments into the sporting goods channel increased 5.6% over fiscal 2023, while overall consumer demand decreased 7.7%, (as indicated by adjusted background checks for handguns reported to the National Instant Criminal Background Check System, or NICS).
The revolving line matures on the earlier of August 24, 2025, or the date that is six months in advance of the earliest maturity of any permitted notes under the credit agreement. 43 On April 28, 2023, we entered into an amendment to our existing credit agreement to, among other things, replace LIBOR with SOFR as the interest rate benchmark and amend the definition of "Consolidated Fixed Charge Coverage Ratio" to exclude unfinanced capital expenditures in connection with the Relocation.
On April 28, 2023, we amended our existing credit agreement to, among other things, replace LIBOR with SOFR as the interest rate benchmark and amend the definition of “Consolidated Fixed Charge Coverage Ratio” to exclude unfinanced capital expenditures in connection with the Relocation.
Interest (Expense) The following table sets forth certain information regarding interest expense for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Interest expense $ (331 ) $ (2,135 ) $ (1,804 ) -84.5 % $ (3,919 ) Interest expense decreased by $1.8 million, or 84.5%, from the prior fiscal year primarily as a result of the reclassification of interest income on the sublease from other income combined with higher average interest rates paid on cash on deposit.
Interest (Expense) The following table sets forth certain information regarding interest expense for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Interest expense $ (2,055 ) $ (331 ) $ 1,724 521.2 % $ (2,135 ) Interest expense increased by $1.7 million over the prior fiscal year, primarily as a result of higher average outstanding debt balances during fiscal 2024.
Net Income The following table sets forth certain information regarding net income and the related per share data for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands, except per share data): 2023 2022 $ Change % Change 2021 Net income $ 36,876 $ 194,494 $ (157,618 ) -81.0 % $ 243,571 Net income per share Basic $ 0.80 $ 4.12 $ (3.32 ) -80.6 % $ 4.46 Diluted $ 0.80 $ 4.08 $ (3.28 ) -80.4 % $ 4.40 Fiscal 2023 Net Income Compared with Fiscal 2022 Net income decreased $157.6 million, or $3.32 per diluted share, from the prior fiscal year for reasons outlined above.
Adjusting for the foreign derived income deduction for each year, the effective tax rates would have been 22.7% and 23.0% for fiscal 2024 and 2023, respectively. 42 Net Income The following table sets forth certain information regarding net income and the related per share data for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands, except per share data): 2024 2023 $ Change % Change 2022 Net income $ 39,609 $ 36,876 $ 2,733 7.4 % $ 194,494 Net income per share Basic $ 0.86 $ 0.80 $ 0.06 7.5 % $ 4.12 Diluted $ 0.86 $ 0.80 $ 0.06 7.5 % $ 4.08 Net income increased $2.7 million, or $0.06 per diluted share, from the prior fiscal year for reasons outlined above.
Cash provided by operating activities was $137.8 million in fiscal 2022, or $179.4 million lower than the prior fiscal year.
Cash provided by operating activities was $106.7 million in fiscal 2024, or $90.0 million higher than the prior fiscal year.
We evaluate the performance of our products using measurements such as gross margin per unit produced, units produced per day, revenue by trade channel, and incoming orders per day.
We evaluate the performance of our products using measurements such as gross margin per unit produced, units produced per day, revenue by trade channel, and incoming orders per day. 39 External Factors that Impact the Firearm Industry The firearm industry has been subject to many external factors in the past that have significantly increased the volatility of revenue generated for companies within the industry.
Judgments and Uncertainties : Determining whether impairment indicators exist and estimating the fair value of our goodwill, tangible and intangible assets requires significant judgment. Estimating the fair value of goodwill requires management to make assumptions and projections of future cash flows, revenues, earnings, discount rates, long term growth rates, and other factors.
Estimating the fair value of goodwill requires management to make assumptions and projections of future cash flows, revenues, earnings, discount rates, long term growth rates, and other factors. Sensitivity of Estimate to Change : The assumptions used to assess impairment consider historical trends, macroeconomic conditions, and projections consistent with our operating strategy.
Operating Income from Operations The following table sets forth certain information regarding operating income for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Operating income from operations $ 48,407 $ 251,653 $ (203,246 ) -80.8 % $ 319,632 % of net sales (operating margin) 10.1 % 29.1 % 30.2 % 40 Fiscal 2023 Operating Income from Operations Compared with Fiscal 2022 Operating income from operations for fiscal 2023 decreased $203.2 million, or 80.8%, from the prior fiscal year, primarily because of reduced sales volumes across nearly all product lines, unfavorable fixed-cost absorption, and increased spending on targeted customer promotions, partially offset by decreased profit sharing expense, decreased profit-related compensation costs, lower costs associated with the Relocation, decreased legal-related expenses, decreased bad debt expense, favorable inventory valuation adjustments, and the change in classification of rental income.
General and administrative expenses increased $3.9 million, primarily as a result of increased compensation expenses, legal expenses, and profit-related compensation costs, partially offset by decreased Relocation costs. 41 Operating Income The following table sets forth certain information regarding operating income for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Operating income $ 44,779 $ 48,407 $ (3,628 ) -7.5 % $ 251,653 % of net sales (operating margin) 8.4 % 10.1 % 29.1 % Operating income for fiscal 2024 decreased $3.6 million, or 7.5%, from the prior fiscal year, primarily because of the impact of an accrued legal settlement for $3.2 million, unfavorable inventory reserve adjustments, one-time costs associated with the grand opening of our new Maryville facility, increased spend on targeted promotions, and increased freight costs because of higher shipments, partially offset by increased sales volumes and decreased Relocation spend.
Cash used in investing activities in fiscal 2022 was $24.1 million, or $1.9 million higher than fiscal 2021 primarily due to cash used for capital expenditures. Financing Activities Cash provided by financing activities was $5.9 million in fiscal 2023 compared with cash used of $106.0 million in fiscal 2022.
Financing Activities Cash used in financing activities was $18.0 million in fiscal 2024 compared with cash provided by financing activities of $5.9 million in fiscal 2023.
Pursuant to this authorization, during fiscal 2022, we completed this repurchase program by purchasing 2,788,152 shares of our common stock for $50.0 million, utilizing cash on hand. As of April 30, 2023, we had no authorized share repurchase programs. We did not purchase any shares of our common stock during fiscal 2023.
During fiscal 2024, we purchased 793,551 shares of our common stock for $10.2 million under this authorization. We did not purchase any shares of our common stock during fiscal 2023, and we did not have an authorized repurchase program as of April 30, 2023. At April 30, 2024, we had $60.8 million in cash and cash equivalents on hand.
Inventories Description : We value inventories at the lower of cost, using the first-in, first-out, or FIFO, method, or net realizable value. Judgments and Uncertainties : An allowance for potential non-saleable inventory due to excess stock or obsolescence is based upon a detailed review of inventory, past history, and expected future usage.
Judgments and Uncertainties : An allowance for potential non-saleable inventory as a result of excess stock or obsolescence is based upon a detailed review of inventory, past history, and expected future usage. Sensitivity of Estimate to Change : The assumptions used to assess inventory valuation consider historical activity.
Gross margin for fiscal 2023 decreased by 11.1% from the prior fiscal year, primarily because of a combination of reduced sales volumes across nearly all product lines, the impact of inflation on raw material and finished parts, which increased approximately 9.6% over the prior year, the impact of inflation on labor costs, particularly as it relates to entry level positions, unfavorable fixed-cost absorption due to lower production volume, and expenses related to employee severance, partially offset by decreased compensation costs and favorable inventory valuation adjustments caused by amortization of variance capitalization offset by an increase in excess and obsolescence reserves.
Gross margin for fiscal 2024 decreased by 2.7% from the prior fiscal year, primarily because of a combination of unfavorable fixed-cost absorption (as a result of lower production volumes), the impact of an accrued legal settlement for $3.2 million, the impact of inflation on raw materials and finished parts, which increased approximately 5.6% over the prior fiscal year, the impact of inflation on labor costs (particularly as it relates to entry level positions), and unfavorable inventory reserve adjustments, including capitalized variances, partially offset by the impact of decreased Relocation spend and favorable mix associated with new products.
New products, defined as any new SKU not shipped in the prior year, represented 25.8% of net sales for the 12 months ended April 30, 2023 and included three new pistols, one new modern sporting rifle, and many new product line extensions.
New products represented 27.6% of net sales for the 12 months ended April 30, 2024 and included one new pistol, three new long guns, and many new product line extensions.
Cash used in financing activities during fiscal 2022 primarily included $90.0 million of share repurchases and $15.0 million in dividend distributions.
Cash used in financing activities in fiscal 2024 primarily included $22.0 million in dividend distributions and $10.2 million of share repurchases, partially offset by a net $15.0 million borrowing under our revolving line of credit.
Research and development expenses increased $288,000, primarily because of increased new product development costs, partially offset by decreased compensation-related costs. Selling, marketing, and distribution expenses decreased $6.2 million, primarily as a result of decreased compensation-related expenses, decreased co-op advertising expenses, decreased advertising costs, and decreased freight costs due to lower shipments, partially offset by increased spending on targeted customer promotions.
Selling, marketing, and distribution expenses increased $3.6 million, primarily as a result of a $1.9 million impairment of distribution equipment related to the Relocation, one-time costs related to the grand opening event at our new Maryville facility, increased compensation costs, increased spend on targeted promotions, and increased freight costs because of higher shipments, partially offset by decreased compensation-related Relocation costs and decreased digital advertising costs.
Other Income The following table sets forth certain information regarding operating income for the fiscal years ended April 30, 2023, 2022, and 2021 (dollars in thousands): 2023 2022 $ Change % Change 2021 Other income $ 150 $ 2,868 $ (2,718 ) -94.8 % $ 2,252 Other income for fiscal 2023 decreased $2.7 million, or 94.8%, from the prior fiscal year, primarily as a result of the reclassification of sublease income to general and administrative expenses and interest expense, as applicable, in the current fiscal year.
Other Income The following table sets forth certain information regarding other income for the fiscal years ended April 30, 2024, 2023, and 2022 (dollars in thousands): 2024 2023 $ Change % Change 2022 Other income $ 6,672 $ 150 $ 6,522 4360.3 % $ 2,868 Other income for fiscal 2024 increased $6.5 million primarily is a result of the sale of certain intangible assets.
These unfavorable impacts were partially offset by decreased compensation costs and favorable inventory valuation adjustments caused by amortization of variance capitalization offset by an increase in excess and obsolescence reserves. • Net income was $36.9 million, or $0.80 per diluted share, compared with net income of $194.5 million, or $4.08 per diluted share, for the prior fiscal year. • During fiscal 2023, we paid $18.3 million in dividends compared with $15.0 million in fiscal 2022. • On September 30, 2021, we announced the Relocation.
Gross margin decreased 2.7% from the prior fiscal year, primarily because of unfavorable fixed-cost absorption, as a result of lower production volume, the impact of an accrued legal settlement, the impact of inflation on raw materials, finished parts, and labor costs, and unfavorable inventory reserves adjustments, partially offset by the impact of decreased relocation spend and favorable mix associated with newly introduced products. • Net income was $39.6 million, or $0.86 per diluted share, compared with net income of $36.9 million, or $0.80 per diluted share, for the prior fiscal year. • During fiscal 2024, we paid $22.0 million in dividends compared with $18.3 million in fiscal 2023. • On September 30, 2021, we announced the Relocation.
Unit shipments into the sporting goods channel decreased 59.9% from fiscal 2022, while overall consumer demand for long guns decreased 5.9%, as indicated by NICS. In addition, during the fiscal year, long gun inventory in our distribution channel declined by 49.6%, which negatively impacted our net sales.
Sales of our long guns increased $42.3 million, or 56.9%, over fiscal 2023, primarily as a result of increased shipments of new products in the fiscal year, which represented 52.2% of sales in the period. Unit shipments into the sporting goods channel increased 53.3% over fiscal 2023, while overall consumer demand for long guns decreased 3.0%, as indicated by NICS.
During the second half of fiscal 2023, our inventory balances decreased $16.3 million.
Our inventory levels decreased $16.6 million during fiscal 2024.
Sensitivity of Estimate to Change : The assumptions used to assess impairment consider historical trends, macroeconomic conditions, and projections consistent with our operating strategy. Changes in these estimates can have a significant impact on the assessment of fair value which could result in material impairment losses.
Changes in these estimates can have a significant impact on the assessment of fair value which could result in material impairment losses. Inventories Description : We value inventories at the lower of cost, using the first-in, first-out, or FIFO, method, or net realizable value.
Excluding spending related to the Relocation, we currently expect to spend between $20.0 million and $25.0 million on capital expenditures in fiscal 2024.
Investing Activities Cash used in investing activities in fiscal 2024 was $8.3 million lower than fiscal 2023, primarily as a result of $6.5 million received for the sale of certain intangible assets and the sale of assets related to the Relocation. We currently expect to spend $25.0 to $30.0 million on capital expenditures in fiscal 2025.
Cash provided by operating activities was $16.7 million in fiscal 2023, or $121.1 million lower than the prior fiscal year. Cash from operating activities was negatively impacted by a $157.7 million reduction in net income, partially offset by an incremental $17.7 million decrease in inventory and an incremental $18.4 million increase in accounts payable.
Cash from operating activities was favorably impacted by a $16.6 million decrease in inventory in fiscal 2024 compared with a $40.5 million increase in inventory in fiscal 2023, an $18.2 million increase in accounts payable in fiscal 2024 compared with an $8.6 million decrease in fiscal 2023, and a $6.3 million increase in accrued expenses and deferred revenue in fiscal 2024 compared with a $3.6 million decrease in fiscal 2023.
Removed
The results of our outdoor products and accessories business, which was previously reported as a separate business segment, are being presented as discontinued operations in the consolidated statements of income for all periods presented, See Note 3 – Discontinued Operations to our consolidated financial statements for additional information regarding these discontinued operations.
Added
A discussion of our results of operations, liquidity, and capital resources for fiscal 2023 compared with fiscal 2022 are not included in this Annual Report on Form 10-K and can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for fiscal 2023, filed with the SEC on June 22, 2023. 2024 Highlights Our operating results for fiscal 2024 included the following: • Net sales of $535.8 million represented an increase of $56.6 million, or 11.8%, over the prior fiscal year. • Gross profit increased $3.6 million, or 2.3%, over the prior fiscal year, primarily as a result of increased sales volume.
Removed
Unless otherwise indicated, any reference to income statement items in this Management’s Discussion and Analysis of Financial Condition and Results of Operations refers to results from continuing operations. 2023 Highlights Our operating results for fiscal 2023 included the following: • Net sales of $479.2 million represented a decrease of $384.9 million, or 44.5%, from our fiscal 2022 net sales.
Added
We expect our inventories to increase in the first quarter of fiscal 2025 due to seasonal factors.
Removed
The decrease in net sales was primarily as a result of a return to more normalized demand from the historic pandemic-related demand that lasted from March 2020 through the beginning of fiscal 2022 combined with a reduction in inventory within the distribution channel. • Gross profit decreased $220.0 million, or 58.7%, from the prior fiscal year primarily as a result of lower sales volume.
Added
Research and development expenses decreased $284,000, primarily because of decreased sample and testing costs associated with new product development.
Removed
Gross margin decreased 11.1% from the prior fiscal year as a result of reduced sales volumes across nearly all product lines, combined with the impact of inflation, unfavorable fixed-cost absorption due to lower production volume, and expenses related to the Relocation.
Added
Our effective tax rates were 19.8% and 23.5% for fiscal 2024 and 2023, respectively.
Removed
External Factors that Impact the Firearm Industry The firearm industry has been subject to many external factors in the past that have significantly increased the volatility of revenue generated for companies within the industry.
Added
Partially offsetting this favorable activity was a $3.9 million increase in accounts receivable in fiscal 2024 compared with a $7.6 million decrease in accounts receivable in fiscal 2023 due to increased sales volume.
Removed
Sales of our long guns decreased $115.2 million, or 60.8%, from fiscal 2022.
Added
The Revolving Line matures on the earlier of August 24, 2025, or the date that is six months in advance of the earliest maturity of any permitted notes under the credit agreement.
Removed
Similar to handgun sales, this decrease was primarily a result of lower demand for the majority of our long gun products as competing products became more available through the replenishment of depleted channel inventory, partially offset by increased shipments of new products in the fiscal year, which represented 36.3% of sales in the period.
Added
We do not believe that inflation had a material impact on us during fiscal 2022. We expect that inflation will continue to have an impact during fiscal 2025.
Removed
We believe that overall firearm demand remains healthy, as indicated by NICS data, but has normalized from the surge levels we experienced during much of calendar years 2020 and 2021.
Added
Other Information The adoption or termination of contracts, instructions, or written plans for the purchase and sale of our securities by our Section 16 officers and directors for the three months ended April 30, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, or a Rule 10b5-1 Plan, were as follows: Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold Robert L.
Removed
We believe our comparable shipments year over year underperformed in comparison to NICS primarily because of an over-replenishment of our channel inventory during the first three quarters of fiscal 2022, at which time channel inventory peaked, and which led to our distribution partners actively seeking to reduce inventory of our products during fiscal 2023.
Added
Scott Director Adoption of Rule 10b5-1 Plan March 29, 2024 October 28, 2024 8,071 Robert L. Scott, the Chairman of our Board of Directors, entered into a Rule 10b5-1 Plan on March 29, 2024. Mr.
Removed
We generally attempt to mitigate inflationary impacts with price increases, when and where possible, based on market dynamics, and process improvements, although our ability to utilize process improvements in recent periods has been constrained by factors related to the Relocation.
Added
Scott's Rule 10b5-1 Plan provides for the potential sale of up to 8,071 shares of our common stock and expires on October 28, 2024, or upon the earlier completion of all the transactions authorized thereunder. 48 During the three months ended April 30, 2024, none of our directors or officers adopted or terminated a "non-Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K) .
Removed
Our inventory levels increased $40.5 million during fiscal 2023, as we slowly ramped down production to minimize impact to our employees and suppliers while replenishing stock to provide our customers with a more robust selection of inventory and position ourselves for potential increases in consumer demand and plan for the Relocation.
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