Smith & Wesson Holding Corporation had net product sales of $83.2 million for the third quarter ended January 31, a 25.9% increase over net product sales of $66.1 million for the year-ago period. Net income for the quarter was $2.4 million, or 5 cents per fully diluted share, compared with a net loss of $1.8 million, or 4 cents per share, for the comparable quarter last year. Adjusted EBITDA was $9.2 million, compared with $3.7 million for the third quarter of fiscal 2008.
Total firearms sales for the third quarter were $78.5 million, an increase of 27.5%. Hunting firearm sales declined 46.4% to $6.7 million. Pistol sales increased 45.7% to $24.9 million, driven by “continued consumer demand, law enforcement adoption of the M&P polymer pistol line, and strong consumer sales of the Sigma pistol line.” Sales of M&P pistols increased 77.1% for the third quarter. M&P tactical rifle sales increased by 111% to $8.8 million as demand for the product remained strong in both the consumer and law enforcement channels. Total revolver sales were $22.3 million, an increase of 45.4% versus the prior year period. Sales of non-firearm accessories, including handcuffs, totaled $4.7 million, a 4.0% increase over non-firearm accessory sales of $4.5 million for the third quarter last year.
Gross margins increased 80 basis points to 25.8% of sales from 25.0% for the comparable quarter last year. Gross margins were favorably impacted by full capacity production of handguns and tactical rifles, combined with reduced promotional expense in the quarter, offset a bit by continuing weakness in demand for hunting rifles, which caused lower production levels at its Rochester, NH facility.
