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What changed in SMITH & WESSON BRANDS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SMITH & WESSON BRANDS, INC.'s 2024 and 2025 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 2025 report.

+110 added−114 removedSource: 10-K (2025-06-20) vs 10-K (2024-06-20)

Top changes in SMITH & WESSON BRANDS, INC.'s 2025 10-K

110 paragraphs added · 114 removed · 68 edited across 3 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We are subject to cyber-security risks, including risks related to customer, employee, vendor, and other company data” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Biggest changeDepending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, we may review the cybersecurity practices of such provider, contractually impose obligations on the provider, conduct information security risk assessments, and conduct periodic reassessments during their engagement. 32 We describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us , including our business strategy, results of operations, or financial condition, under the heading “We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats, including risk assessments, 33 incident detection and response, end-point detection and response, network security controls, access controls, physical security, systems monitoring, a vendor risk management program, and penetration testing.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats, including risk assessments, incident detection and response, end-point detection and response, network security controls, access controls, physical security, systems monitoring, a vendor risk management program, and penetration testing.
Governance The Audit Committee is responsible for overseeing risks from cybersecurity threats, in accordance with its charter. The Audit Committee holds quarterly meetings and receives periodic reports from our Vice President – Information Technology (Chief Information Officer) concerning our significant cybersecurity threats and risks, and the processes we have implemented to address them.
Governance The Audit Committee is responsible for overseeing risks from cybersecurity threats, in accordance with its charter. The Audit Committee holds quarterly meetings and receives periodic reports from our Vice President – Information Technology (Chief Information Officer) concerning our si gnificant cybersecurity threats and risks, and the processes we have implemented to address them.
Location Facility Ownership Status Connecticut Deep River Plant Leased Maine Houlton Plant Owned Massachusetts Springfield Executive Offices & Plant Owned Missouri Columbia Office & Warehouse Leased — Assigned to a third party Tennessee Maryville Plant Owned — Subject to the terms of certain real property and tax incentive agreements I tem 3.
Location Facility Ownership Status Maine Houlton Plant Owned Massachusetts Springfield Plant Owned Missouri Columbia Office & Warehouse Leased — Assigned to a third party Tennessee Maryville Executive Offices & Plant Owned — Subject to the terms of certain real property and tax incentive agreements I tem 3.
Item 1C. Cybersecurity Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats.
Item 1C. Cybe rsecurity Risk Management and Strategy We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats.
Legal Proceedings Information regarding our legal proceedings is discussed in Note 16 to our consolidated financial statements, which is incorporated herein by reference. I tem 4. Mine Safety Disclosures Not applicable. 35 P ART II
Legal Proceedings Information regarding our legal proceedings is discussed in Note 14 to our consolidated financial statements, which is incorporated herein by reference. I tem 4. Mine Safety Disclosures Not applicable. 33 P ART II
Management plays an important role in assessing and managing our material risks from cybersecurity threats. Our Vice President – Information Technology (Chief Information Officer) is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Audit Committee.
Management plays an important role in assessing and managing our material risks from cybersecurity threats. Our Chief Information Officer – which is the management position responsible for assessing and managing material risks from cybersecurity threats – is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Audit Committee.
A cyber emergency response team, which includes members of our executive leadership team, manages this plan. Beginning in fiscal 2024, this team began meeting monthly to discuss cybersecurity threat trends and related information.
A cyber emergency response team , which includes members of our executive leadership team, manages this plan. This team meets periodically to discuss cybersecurity threat trends and related information. Our incident response processes are designed to escalate certain cybersecurity incidents to our cyber emergency response team and include reporting to the Audit Committee for certain cybersecurity incidents.
In general, our operating properties are well maintained, suitably equipped, and in good operating condition.
Properties The following table sets forth information regarding our principal operating properties and other significant properties as of April 30, 2025. In general, our operating properties are well maintained, suitably equipped, and in good operating condition.
We also periodically publish a cybersecurity newsletter to these employees related to topics such as phishing, social engineering, and insider-threat awareness. 34 I tem 2. Properties The following table sets forth information regarding our principal operating properties and other significant properties as of April 30, 2024.
We view cybersecurity threats as a shared responsibility. All new employees with company email addresses receive cybersecurity training as part of their onboarding, as well as annual training. We also periodically publish a cybersecurity newsletter to these employees related to topics such as phishing, social engineering, and insider-threat awareness. I tem 2.
Removed
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, we may review the cybersecurity practices of such provider, contractually impose obligations on the provider, conduct information security risk assessments, and conduct periodic reassessments during their engagement.
Removed
Our incident response processes are designed to escalate certain cybersecurity incidents to our cyber emergency response team and include reporting to the Audit Committee for certain cybersecurity incidents. We view cybersecurity threats as a shared responsibility. All new employees with company email addresses receive cybersecurity training as part of their onboarding, as well as annual training.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities 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).
Biggest changeSecurities 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.
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.
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 18, 2025, there were 876 record holders of our common stock.
Payment 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.
Payment 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 $23.1 million and $22.0 million during fiscal 2025 and 2024, 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, 2019 in stock or index — including reinvestment of dividends.
The performance shown is not necessarily indicative of future performance. 34 COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Smith & Wesson Brands, Inc., The Russell 2000 Index, And Peer Group * $100 invested on April 30, 2020 in stock or index — including reinvestment of dividends. Fiscal year ending April 30.
Fiscal year ending April 30. The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.
The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. The performance graph above will not be deemed incorporated by reference into any filing of our company under the Securities Act.
Removed
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
Performance Graph The following line graph compares cumulative total stockholder returns for the five years ended April 30, 2025 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). The graph assumes an investment of $100 on April 30, 2020, with dividends reinvested.
Removed
(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
Added
Repurchases of Common Stock During the quarter ended April 30, 2025, there were no purchases of our common stock by us nor any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act. Item 6. RESERVED 35

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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.
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, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Handguns $ 331,936 $ 381,898 $ (49,962 ) (13.1 )% $ 360,668 Long guns 103,956 116,491 (12,535 ) (10.8 )% 74,230 Other products & services 38,769 37,444 1,325 3.5 % 44,344 Total net sales $ 474,661 $ 535,833 $ (61,172 ) (11.4 )% $ 479,242 Cost of sales 347,478 377,740 (30,262 ) (8.0 )% 324,705 Gross profit $ 127,183 $ 158,093 $ (30,910 ) (19.6 )% $ 154,537 % of net sales (gross margin) 26.8 % 29.5 % 32.2 % The following table sets forth certain information regarding units shipped by trade channel for the fiscal years ended April 30, 2025, 2024, and 2023 (units in thousands): Total Units Shipped 2025 2024 # Change % Change 2023 Handguns 798 836 (38 ) (4.5 )% 793 Long guns 175 228 (53 ) (23.2 )% 148 Sporting Goods Channel Units Shipped 2025 2024 # Change % Change 2023 Handguns 748 775 (27 ) (3.5 )% 734 Long guns 158 210 (52 ) (24.8 )% 137 Professional Channel Units Shipped 2025 2024 # Change % Change 2023 Handguns 50 61 (11 ) (18.0 )% 59 Long guns 17 18 (1 ) (5.6 )% 11 37 Sales of our handguns decreased $50.0 million, or 13.1%, from fiscal 2024, primarily as a result of lower consumer demand within the industry and a shift in product mix to lower priced models, partially offset by increased shipments of newly introduced products (defined as any new SKU not shipped in the prior year), which represented 42.6% of handgun sales in the period, and a 2%-5% price increase on select products that became effective in the third fiscal quarter of fiscal 2024.
Key Performance Indicators We evaluate the performance of our business based upon operating profit, which includes net sales, cost of sales, selling and administrative expenses, and certain components of other income and expense.
Key Performance Indicators We evaluate the performance of our business based upon operating profit and net income, which includes net sales, cost of sales, selling and administrative expenses, and certain components of other income and expense.
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.
We also track our return on invested capital, and we use adjusted EBITDAS (earnings before interest expense, 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 36 improved understanding of underlying performance trends.
See Item IA, Risk Factors, for further discussion of external factors that impact the firearm industry. Although these external factors have created demand surges and volatility in the firearm market, and often make it difficult to predict demand, we believe that those external factors have also likely contributed to a long-term increase in consumer interest in firearms.
See Item 1A, Risk Factors, for further discussion of external factors that impact the firearm industry. Although these external factors have created demand surges and volatility in the firearm market, and often make it difficult to predict demand, we believe that those external factors have also likely contributed to a long-term increase in consumer interest in firearms.
We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support or that engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected in our financial statements. I tem 7A.
We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support or that engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected in our consolidated financial statements. 42 I tem 7A.
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.
Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation 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, 2025, the end of the period covered by this Annual Report on Form 10-K.
Subject to the satisfaction of certain terms and conditions described in the credit agreement, we have an option to increase the Revolving Line by an aggregate amount not exceeding $50.0 million.
Subject to the satisfaction of certain terms and conditions described in the Second Amended and Restated Credit Agreement, we have an option to increase the Revolving Line by an aggregate amount not exceeding $50.0 million.
Financial Statements and Supplementary Data Reference is made to our consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this report, which financial statements, notes, and report are incorporated herein by reference. I tem 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. I tem 9A.
Financial Statements and Supplementary Data Reference is made to our consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this Annual Report on Form 10-K, which financial statements, notes, and report are incorporated herein by reference. I tem 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.
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.
We estimate that the annual domestic non-military firearm market is approximately $2.8 billion for handguns and $1.9 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.
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.
Our principal market risk relates to the variable interest rate associated with our credit agreement, which consists of a $175.0 million revolving line of credit that bears interest at either the Base Rate or Adjusted Term SOFR rate, plus an applicable margin based on our consolidated leverage ratio.
These factors include, among others, fears surrounding crime and terrorism; significant news events, such as those related to mass shootings; potential restrictions on the sale or makeup of firearms; actual and potential legislative, judicial, and regulatory actions; economic changes; and changes in the social and political environment, including congressional and presidential elections.
These factors include, among others, fears surrounding crime and terrorism; significant news events; potential restrictions on the sale or makeup of firearms; actual and potential legislative, judicial, and regulatory actions; economic changes; and changes in the social and political environment, including congressional and presidential elections.
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).
Handgun unit shipments into the sporting goods channel decreased 3.5% from fiscal 2024, while overall consumer demand decreased 3.2%, (as indicated by adjusted background checks for handguns reported to the National Instant Criminal Background Check System, or NICS).
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.
For more information regarding our financing arrangements, see Note 4 — Notes and Loans Payable . As of April 30, 2025, we had $80.0 million of borrowings outstanding on the Revolving Line, which bore an interest rate of 6.69%, which is equal to Adjusted Term SOFR rate plus an applicable margin. I tem 8.
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.
Share Repurchase Programs – 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, or the 2023 Authorization.
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.
Changes in these estimates can have a significant impact on the assessment of excess and obsolete inventory, which could result in material losses. 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.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this Annual Report on Form 10-K.
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.
Other Income The following table sets forth certain information regarding other income for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Other (expense)/income, net $ (17 ) $ 6,672 $ (6,689 ) (100.3 )% $ 150 Other income for fiscal 2025 decreased $6.7 million, primarily as a result of the sale of certain intangible assets in fiscal 2024.
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.
The Revolving Line matures on the earlier of October 3, 2029 or the date that is six months in advance of the earliest maturity of any Permitted Notes (as defined in the Second Amended and Restated Credit Agreement) under the Second Amended and Restated Credit Agreement.
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.
As of April 30, 2025, we had $25.2 million in cash and cash equivalents on hand. 41 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 at least the next 12 months.
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.
Changes in Internal Control over Financial Reporting No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fourth fiscal quarter of 2025 has materially affected, or is reasonably likely to materially affect our internal control over financial reporting. I tem 9B.
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.
Interest Expense The following table sets forth certain information regarding interest expense for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Interest expense, net $ (4,622 ) $ (2,055 ) $ 2,567 124.9 % $ (331 ) Interest expense increased by $2.6 million, primarily as a result of higher average debt balances and lower average cash balances compared with fiscal 2024.
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%).
According to calendar 2024 reports by the ATF, the U.S. firearm manufacturing industry grew at a 1.5% compound annual growth rate in units from 2018 through 2023, although there has been wide variation among years (e.g., 2019 to 2020 grew 58.0%).
Finance Lease – We are a party to a material finance lease, the Missouri Lease, which is a $46.2 million lease for our Missouri distribution center that has an effective interest rate of approximately 5.0% and is payable in 240 monthly installments through fiscal 2039. The building is pledged to secure the amounts outstanding.
Finance Lease – We are a party to a material finance lease, which is a $46.2 million lease that has an effective interest rate of approximately 5.0% and is payable in 240 monthly installments through fiscal 2039, as well as a related payment and performance guaranty, dated October 26, 2017, in favor of the Original Missouri Landlord.
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.
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.
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.
The following table sets forth certain cash flow information for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change 2023 Operating activities $ (7,223 ) $ 106,739 $ (113,962 ) $ 16,732 Investing activities (19,173 ) (81,490 ) 62,317 (89,781 ) Financing activities (9,212 ) (17,966 ) 8,754 5,877 Total cash flow $ (35,608 ) $ 7,283 $ (42,891 ) $ (67,172 ) Operating Activities Operating activities generally represent the principal source of our cash flow.
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.
This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. 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 Annual Report on Form 10-K.
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.
A discussion of our results of operations, liquidity, and capital resources for fiscal 2024 compared with fiscal 2023 is 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 2024, filed with the SEC on June 20, 2024.
The credit agreement also provides a swingline facility in the maximum amount of $5.0 million at any one time (subject to availability under the Revolving Line). Each Swingline Loan bears interest at the Base Rate, plus an applicable margin based on our consolidated leverage ratio.
The Second Amended and Restated Credit Agreement also provides a swingline facility in the maximum amount of $5.0 million at any one time (subject to availability under the Revolving Line).
Critical accounting estimates are defined as those reflective of significant judgments, estimates, and uncertainties, which may result in materially different results under different assumptions and conditions.
Critical accounting estimates are defined as those reflective of significant judgments, estimates, and uncertainties, which may result in materially different results under different assumptions and conditions. We believe the following are our critical accounting estimates: Inventories Description : We value inventories at the lower of cost, using the first-in, first-out, or FIFO, method, or net realizable value.
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.
Management’s Annual Report on Internal Control Over Financial Reporting 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.
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.
Financing Activities Cash used in financing activities was $9.2 million for fiscal 2025 compared with $18.0 million in fiscal 2024. Cash used in financing activities during fiscal 2025 was primarily the result of $25.5 million of share repurchases and $23.1 million in dividend distributions, partially offset by $40 million of net borrowings under our revolving line of credit.
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.
We paid $21.6 million for capital expenditures for fiscal 2025, which was $69.2 million lower than fiscal 2024, primarily as a result of payments related to the Relocation in the prior year period. 40 We currently expect to spend $25.0 to $30.0 million on capital expenditures in fiscal 2026.
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.
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.
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.
Cash used in operating activities in fiscal 2025 was unfavorably impacted by a $29.3 million increase in inventory compared with a $16.6 million decrease in inventory in fiscal 2024, a $14.8 million decrease in accounts payable compared with a $18.2 million increase in accounts payable in fiscal 2024, an $8.1 million decrease in accrued payroll and incentives compared with a $1.4 million decrease in accrued payroll and incentives in fiscal 2024, a $4.4 million decrease in accrued profit sharing compared with a $895,000 increase in accrued profit sharing in fiscal 2024, and lower net income.
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%.
Income Tax Expense The following table sets forth certain information regarding income tax expense for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Income tax expense $ 5,820 $ 10,356 $ (4,536 ) (43.8 )% $ 11,350 % of income from operations (effective tax rate) 30.2 % 20.0 % 10.2 % 23.5 % 39 We recorded income tax expense of $5.8 million for fiscal 2025, $4.5 million lower than the prior fiscal year, primarily because of decreased profitability.
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.
Selling, marketing, and distribution expenses increased $702,000 in spite of a $1.9 million impairment on distribution equipment related to the Relocation and one-time costs related to our grand opening event at our Maryville facility in fiscal 2024.
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.
Cash used in operating activities was $7.2 million in fiscal 2025 compared with $106.7 million of cash provided in fiscal 2024.
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.
As of April 30, 2025, we had $80.0 million of borrowings outstanding on the Revolving Line, bearing interest at an average rate of 6.69%, which was equal to the Adjusted Term SOFR rate plus an applicable margin.
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) .
Other Information Rule10b5-1 Trading Arrangement; Non-Rule 10b5-1 Trading Arrangement 44 During the three months ended April 30, 2025, 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).
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 building is pledged to secure the amounts outstanding. As part of the Relocation, on January 31, 2023, we entered into the Assignment and Assumption Agreement and the Amended and Restated Guaranty. Because of the Amended and Restated Guaranty, we continue to account for this lease as we have since prior to the Relocation.
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.
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, 2025, 2024, and 2023 (dollars in thousands, except per share data): 2025 2024 $ Change % Change 2023 Net income $ 13,425 $ 41,363 $ (27,938 ) (67.5 )% $ 36,876 Net income per share: Basic $ 0.30 $ 0.90 $ (0.60 ) (66.7 )% $ 0.80 Diluted $ 0.30 $ 0.89 $ (0.59 ) (66.3 )% $ 0.80 Net income decreased $27.9 million, or $0.59 per diluted share, from fiscal 2024 primarily for reasons outlined above.
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.
The Revolving Line bears interest at either the Base Rate (as defined in the Second Amended and Restated Credit Agreement) or the Adjusted Term SOFR rate (as defined in the Second Amended and Restated Credit Agreement), plus an applicable margin based on our consolidated leverage ratio.
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.
Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, issued an adverse opinion on the effectiveness of the Company's internal control over financial reporting. KPMG LLP's report appears elsewhere in this Form 10-K.
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.
Operating Expenses The following table sets forth certain information regarding operating expenses for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Research and development $ 9,567 $ 7,258 $ 2,309 31.8 % $ 7,550 Selling, marketing, and distribution 41,314 40,611 703 1.7 % 37,073 General and administrative 54,933 63,133 (8,200 ) (13.0 )% 61,572 Gain on sale/disposition of assets, net (2,515 ) (11 ) (2,504 ) — (65 ) Total operating expenses $ 103,298 $ 110,991 $ (7,693 ) (6.9 )% $ 106,130 % of net sales 21.8 % 20.7 % 22.1 % Research and development expenses increased $2.3 million, primarily because of higher materials and testing costs associated with new product development and higher compensation-related costs.
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.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies may deteriorate. 43 Management, with participation of the CEO and CFO, under the oversight of our Audit Committee of our Board of Directors, conducted an evaluation of the effectiveness of our internal control over financial reporting as of April 30, 2025, using the framework established in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework).
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.
Other products and services sales increased $1.3 million, or 3.5%, over fiscal 2024, primarily because of increased component parts and suppressor sales, partially offset by lower business-to-business sales. New products represented 42.8% of net sales for the 12 months ended April 30, 2025 and included six new pistols, six new long guns, and many new product line extensions.
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.
Unit shipments into the sporting goods channel decreased 24.8% from fiscal 2024, while overall consumer demand for long guns decreased 2.1%, as indicated by NICS.
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.
Operating Income The following table sets forth certain information regarding operating income for the fiscal years ended April 30, 2025, 2024, and 2023 (dollars in thousands): 2025 2024 $ Change % Change 2023 Operating income $ 23,884 $ 47,102 $ (23,218 ) (49.3 )% $ 48,407 % of net sales (operating margin) 5.0 % 8.8 % 10.1 % Operating income for fiscal 2025 decreased $23.2 million, or 49.3%, from the prior fiscal year, primarily for the reasons outlined above.
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.
During fiscal 2024, we purchased 793,551 shares of our common stock for $10.2 million under the 2023 Authorization. During fiscal 2025, we purchased 1,531,763 shares of our common stock for $21.4 million under the 2023 Authorization. The 2023 Authorization expired on September 19, 2024.
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.
Excluding the impact of the prior year legal settlement, gross margin was 330 basis points lower as a result of higher material costs, higher promotional costs, and a shift in product mix to lower margin products, partially offset by lower inventory adjustments (including standard cost revaluations, shrink, and excess inventory write downs). • Net income was $13.4 million, or $0.30 per diluted share, compared with net income of $41.4 million, or $0.89 per diluted share, for the prior fiscal year. • During fiscal 2025, we paid $23.1 million in dividends compared with $22.0 million in fiscal 2024. • During fiscal 2025, we purchased 1,844,073 shares of our common stock for $25.5 million.
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Credit Facilities – We maintain an unsecured revolving line of credit with TD Bank, N.A. and other lenders, or the Lenders, which includes availability up to $100.0 million at any one time, or the Revolving Line.
Credit Facilities — We entered into the Second Amended and Restated Credit Agreement on October 3, 2024. The Second Amended and Restated Credit Agreement provides for a revolving line of credit of $175.0 million at any one time, or the Revolving Line.
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.
Cash used in operating activities in fiscal 2025 was favorably impacted by a $3.2 million decrease in accounts receivable compared with a $3.9 million increase in accounts receivable in fiscal 2024. Investing Activities Cash used in investing activities decreased $62.3 million for fiscal 2025 compared with fiscal 2024.
Removed
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.
Added
This section generally discusses year-to-year comparisons between fiscal 2025 and fiscal 2024.
Removed
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.
Added
See also the discussion below related to an immaterial correction of an error. 2025 Highlights Our operating results for fiscal 2025 included the following: • Net sales of $474.7 million represented a decrease of $61.2 million, or 11.4%, from the prior fiscal year. • Gross profit decreased $30.9 million, or 19.6%, from the prior fiscal year, primarily as a result of lower sales volume and a shift in product mix.
Removed
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.
Added
Gross margin decreased 270 basis points from the prior fiscal year in spite of a $3.2 million legal settlement recognized in the prior year comparable period.
Removed
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.
Added
Immaterial Correction of an Error During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in the interim and annual periods for the year ended April 30, 2024 and during the interim periods for the year ended April 30, 2025.
Removed
Our inventory levels decreased $16.6 million during fiscal 2024.
Added
In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , we evaluated the quantitative and qualitative considerations of the error and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period.
Removed
We expect our inventories to increase in the first quarter of fiscal 2025 due to seasonal factors.
Added
Prior year amounts have been adjusted to correct the immaterial error, which overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and understated income tax expense by $569,000 and overstated the related amounts of income tax receivable by $548,000 and deferred income taxes by $21,000 as of April 30, 2024 and for the year then ended.
Removed
Research and development expenses decreased $284,000, primarily because of decreased sample and testing costs associated with new product development.
Added
Related changes to net income, corresponding line items within cash provided by operating activities, and related disclosures within the notes accompanying these financial statements, reflect the immaterial correction.
Removed
Our effective tax rates were 19.8% and 23.5% for fiscal 2024 and 2023, respectively.
Added
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.
Removed
Cash provided by operating activities was $106.7 million in fiscal 2024, or $90.0 million higher than the prior fiscal year.
Added
Sales of our long guns decreased $12.5 million, or 10.8%, from fiscal 2024, primarily as a result of lower consumer demand within the industry, partially offset by increased shipments of new products in the fiscal year, which represented 59.5% of sales in the period, a shift in product mix to higher priced models, and a 2%-5% price increase on select products that became effective in the third fiscal quarter of fiscal 2024.
Removed
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.
Added
We believe that our unit demand declined at a significantly greater rate than NICS as a result of a combination of the industry-wide performance in some of the long gun categories in which we participate relative to those categories in which we do not participate fully, specifically hunting, as well as the impact in the current year of newly introduced products from the prior year that are at lower price points.
Removed
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.
Added
Gross margin decreased 270 basis points from the prior fiscal year in spite of a $3.2 million legal settlement recognized in the prior year comparable period.
Removed
In response to a Springing Lien Triggering Event (as defined in the credit agreement), we would be required to enter into certain documents that create in favor of TD Bank, N.A., as administrative agent, and the lenders party to such documents as legal, valid, and enforceable first priority lien on the collateral described therein.
Added
Excluding the impact of the prior year legal settlement, gross margin was 330 basis points lower as a result of higher material costs, higher promotional costs, and a shift in product mix to lower margin models, partially offset by lower inventory adjustments (including standard cost revaluations, shrink, and excess inventory write downs).
Removed
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.
Added
Inventory balances increased $29.3 million between April 30, 2024 and April 30, 2025 as a result of a slowdown in demand combined with level loading of our manufacturing facilities to ensure our ability to satisfy anticipated future demand.
Removed
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.

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