Smith & Wesson Holding Corporation (SWHC) has reported 160.57 percent jump in profit for the quarter ended Oct. 31, 2016. The company has earned $32.48 million, or $0.57 a share in the quarter, compared with $12.47 million, or $0.22 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $39.14 million, or $0.68 a share compared with $14.20 million or $0.25 a share, a year ago.

Revenue during the quarter surged 63.03 percent to $233.53 million from $143.24 million in the previous year period. Gross margin for the quarter expanded 255 basis points over the previous year period to 41.80 percent. Total expenses were 77.67 percent of quarterly revenues, down from 84.79 percent for the same period last year. This has led to an improvement of 713 basis points in operating margin to 22.33 percent.

Operating income for the quarter was $52.15 million, compared with $21.78 million in the previous year period.

However, the adjusted operating income for the quarter stood at $62.39 million compared to $24.53 million in the prior year period. At the same time, adjusted operating margin improved 959 basis points in the quarter to 26.72 percent from 17.13 percent in the last year period.

James Debney, Smith & Wesson Holding Corporation president and chief executive officer, said, "We are very pleased with our second quarter results, which exceeded our financial guidance. In our Firearms Segment, we believe higher revenue was driven by strong consumer demand as reflected in adjusted background checks from the National Instant Criminal Background Check System NICS as well as our own market share gains. In our Outdoor Products & Accessories Segment, we completed the acquisitions of Taylor Brands and Crimson Trace, both of which were accretive to our non-GAAP earnings."

For the third-quarter, Smith & Wesson Holding Corporation forecasts revenue to be in the range of $230 million to $240 million.  The company expects diluted earnings per share to be in the range of $0.44 to $0.49.  On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.52 to $0.57.

For fiscal year 2017, Smith & Wesson Holding Corporation forecasts revenue to be in the range of $920 million to $930 million, the company expects diluted earnings per share to be in the range of $2.11 to $2.16. The company expects diluted earnings per share to be in the range of $2.42 to $2.47 on adjusted basis.

The company has spent $196.67 million cash to meet investing activities during the first six months as against cash outgo of $14.16 million in the last year period.

Cash flow from financing activities was $17.91 million for the first six months, up 452.02 percent or $14.67 million, when compared with the last year period.

Cash and cash equivalents stood at $73.90 million as on Oct. 31, 2016, up 36.68 percent or $19.83 million from $54.06 million on Oct. 31, 2015.

Working capital increases marginally
Smith & Wesson Holding Corporation has recorded an increase in the working capital over the last year. It stood at $152.95 million as at Oct. 31, 2016, up 2.92 percent or $4.34 million from $148.61 million on Oct. 31, 2015. Current ratio was at 2.27 as on Oct. 31, 2016, down from 2.72 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 35 days for the quarter from 101 days for the last year period. Days sales outstanding went down to 25 days for the quarter compared with 35 days for the same period last year.

Days inventory outstanding has decreased to 39 days for the quarter compared with 101 days for the previous year period. At the same time, days payable outstanding went down to 30 days for the quarter from 35 for the same period last year.