Smith & Wesson Brands, Inc.

day everyone and welcome to Smith & Wesson Brands Inc fourth quarter and full fiscal 2025 financial results conference call this call is being recorded at this time I would like to turn the call over to Kevin Maxwell Smith Smith & Wesson's general counsel who will give us some information about today's call thank you and good afternoon our comments today may contain forward-looking statements our use of the words anticipate project and

estimate, expect, intend, believe, and other similar expressions are intended to identify forward-looking statements. Forward-looking statements may also include statements on topics such as our product development, objectives, strategies, market share, demand, consumer preferences, inventory conditions for our products, growth opportunities and trends, and industry conditions in general. Forward-looking statements represent our current judgment about the future and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied by our statements today. These risks and uncertainties are described in our SEC filings, which are available on our website, along with a replay of today's call. We have no obligation to update forward-looking statements. We reference certain non-GAAP financial results. our non-GAAP financial results exclude relocation expense and other costs. Reconciliations of GAAP financial measures to non-GAAP financial measures can be found in our SEC filings and in today's earnings press release, each of which is available on our website. Also, when we reference EPS, we are always referencing fully diluted EPS, and any reference to EBITDA is to adjusted EBITDAs. Before I hand the call over to our speakers, I would like to remind you that when we discuss NICS results, we are referring to adjusted NICS, a metric published by the National Shooting Sports Foundation based on FBI NICS data. Adjusted NICS removes those background checks conducted for purposes other than firearms purchases. Adjusted NICS is generally considered the best available proxy for consumer firearm demand at the retail counter. Because we transfer firearms only to law enforcement agencies and federally licensed distributors and retailers and not to end consumers, NICS generally does not directly correlate to our shipments or market share in any given time period, we believe mostly due to inventory levels in the channel. Joining us on today's call are Mark Smith, our president and CEO, and Dena McPherson, our CFO. With that, I will turn the call over to Mark.

Thank you, Kevin, and thanks, everyone, for joining us today. Fourth quarter proved more difficult than we anticipated, largely due to macroeconomic and industry trends. While the combination of lower sales and production volumes, along with mixed factors pressured margins, we were able to partially offset the bottom-line impact through disciplined cost management by leveraging our flexible manufacturing model. New products remain an area of strength. accounting for 44% of sales in the fourth quarter, and we will continue to lean into innovation as a point of competitive differentiation and to drive growth. Looking at market share for the fourth quarter, overall adjusted NICs was down 5.4%, with monthly year-over-year declines improving sequentially throughout the period, compared to an 8.4% decline in our shipments into the channel. On a category basis, similar to Q3, we believe we gained share in handguns as NYX was down 3.4% versus a 2.1% decline in our shipments into the sporting goods channel, driven by the strong performance of our innovative new products. In long guns, NYX was down 7.1% in Q4, while our shipments into the sporting goods channel declined 31.7% due to difficult comparisons. specifically softness in the MSR market and our lever action offering benefiting from last year's tailwinds associated with its launch as a new product. Average selling prices trended lower on a year-over-year basis, but were slightly higher sequentially, similar to what we experienced in Q3. Our overall ASPs in Q4 were down 4.5% versus a year ago, and continue to reflect mixed dynamics with higher ASPs in long guns being offset by lower ASPs in handguns. In long guns, our ASPs increased 11%, driven by higher price models like our lever action rifles. In handguns, our ASPs declined 6.3%, reflecting mixed shifts related to strong demand for our lower price products. Even in a tough market environment, we expect that our iconic brand should enable us to maintain strong ASPs as we move through fiscal 2026. Looking now at the overall firearms market, we continue to see consumers generally being cautious due to macroeconomic factors pressuring discretionary spending. While new product and lower price point offerings are still performing well, overall conditions suggest headwinds will likely persist in the near term. Despite these challenges, we remain well-positioned to succeed in this environment. Demand for firearms appears to be normal for the summer, based on feedback from our distributor and retail partners. Importantly, while channel inventory fluctuations obviously affect our shorter-term out-the-door shipments, our channel checks and internal data indicate we have continued to maintain our market share leadership position at the retail counter. Promotional activity across the industry has been consistent with expectations, and we've continued to use targeted efforts effectively to drive activity and manage inventory. Not surprisingly, inventory levels in the channel are being managed conservatively, and while distributor inventory was up about 5,000 units during the quarter, this represented only about eight weeks of supply. It's also worth noting that we are starting to see indications of smaller firearm manufacturers exiting the market. We view this as reflective of rational market behavior and something we are accustomed to seeing in our industry during a down cycle. And we may benefit from this dynamic. I'm happy to report that our balance sheet remains strong, and we continue to be disciplined in managing our business and allocating capital to drive sustainable, long-term value for stockholders. We are comfortable with internal inventory levels, which are very clean, and are proactively managing production schedules as needed. To that end, we are extending our normal summer shutdown by an extra week, which will help to better align inventory levels with demand as we enter the second quarter of fiscal 2026. As always, during a cyclical downturn, we will remain focused on additional cost control initiatives and driving sales through delivery against our robust new product pipeline, with several exciting new products slated for introduction later in Q1 and throughout the remainder of the fiscal year. As the normal seasonal activity picks up in the fall as we approach the hunting season, cash flow should build and hold steady through the balance of the fiscal year. We will continue to invest in innovation to help us to maintain our market share leadership position. In addition, we will continue to prioritize debt reduction along with paying our quarterly dividend. We remain well positioned for long-term success with a leading brand, rich legacy, and strong balance sheet. Before I hand the call over, and as always, I just want to thank our entire team of talented Smith & Wesson employees for their Tyler's dedication in putting their skills to work each and every day to make us successful. With that, I'll turn the call over to Dina to cover the financials.