Smith & Wesson Holding Corporation Q3 2009 Earnings Call Transcript

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2009-03-12 17:11:14.0

Tags: Distributor, Inventory, Call Transcript, Earnings, Retail, Seeking Alpha, Smith & Wesson Holding Co.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Eric Wold – Merriman, Curran Ford.

Eric Wold – Merriman, Curran Ford

On the inventory, can you give a sense of the inventory you've got in hand now relative to where you're seeing the strength coming from either retail channel, distributor, what consumers are buying and where the demand is, what you've still stocked in inventory or are they totally different?

Michael Golden

It kind of varies by category. Certainly tactical rifles, all the way through the channel to hand them out. Us manufacturing, sell to distributors, and they're selling right out to retailers. I'm sure you see that when you do your channel checks.

Similar position on some categories within revolver, we're not giving specifics but in revolvers and within pistols.

Eric Wold – Merriman, Curran Ford

Your conversations with distributors and dealers out there, how much more visibility are you getting in terms of demand? I know they're kind of ordering as fast as they can as things sell through. Are they trying to order further out? Are they kind of trying to predict further out and maybe get a larger amount of orders? I guess you have to get around the backlog number, a huge increase versus last year and sequentially. Do you think a lot of that, how much of that do you think is demand versus maybe ordering kind of further in advance to get themselves in line.

Michael Golden

We get from our comp 10 distributors on a weekly basis, statistic by SKU on what their inventory is and what they've sold the previous week. Actually it comes in on a Monday and we get it for the week before. So we can see what they're sitting on as far as inventory and we also can see what's selling. So we can keep a pulse on the volume that's moving through the distributors out to retailers.

And you know, you've been in the same or similar stores as I have, it's gone right out the door. So we can keep a pretty close pulse on what is happening in retail sales through this weekly data that we get, and again, it's by SKU. I'm not sure if I answered your question.

Operator

Your next question comes from Reed Anderson – D.A. Davidson.

Reed Anderson – D.A. Davidson

Just kind of drilling through things looking at the product category, of the various products, revolvers is one of those things that sort of surprises us each time regardless of which direction. Why would that be up so much in the third quarter? Was there something going on? Was there something related to timing? Just any color on that category.

 

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