Blackjack, the arrest asset manager in the world, owns 5. 2% of common stock. Vanguard Group Incorporated holds approximately 4. 9 million shares, in the fourth quarter of 2012. During 201 2 89. 1 % of Smith & Wesson customers were US. Domestic consumers, 6. 9% were U. S. Government at state and national levels, and 4. 0% were sold to the international consumers. Large international orders come from Belgium, Australia, Canada, and Puerco Rice. The company’s receivables are typically collected within 30-90 days. However, payment collection periods can be extended due to various hunting seasons.
Competitors Smith & Wesson believe that their company is a strong competitor in the market. The primary’ competitors are Urge and Taurus in the revolver market, and Biretta, Clock, Heckler & Koch, Urge, Sigh Saucer, and Springfield Armory in the pistol market. In the hunting rifle market the main competitors are Browning Marlin, Remington, Urge, Savage, Weathered, C.V., Traditions, and Winchester. Smith & Wesson own 95% of the handcuff market in the United States. Smith & Wesson seeks to expand its market share by constantly improving quality, and introducing new innovative products.
For he past three years Smith & Wesson has spent over 4 million per year on research and development of new products. U. S. Equity holders own about 91 % of outstanding shares. Risk Factors Capacity Constraint: Increased demand for products by the military and law enforcement requires increased capacity. Also Smith & Wesson has been investing significant amounts into capital in order to increase capacity; they are not very successful in managing their inventory and production. Smith & Wesson is trying to implement a new Enterprise Resource Planning (ERP) by 2014, which if unsuccessful could disrupt operations.
Since our business is seasonal and the demand for our products is volatile our capacity constraint interferes with manufacturing even more. In 2012 and 2011 company’s backlogs amounted to $439 million and $196. 7 million respectively. Also due to the seasonality of the business the company is greatly influenced by the fluctuating prices of the commodities used in production. Rising Employee and Insurance Costs: The average company employee age is 46 and 15% of the workforce are over 60. Therefore insurance expenses are increasing particularly due to the latest health care legislation.
In 2012 the insurance costs were $5. Million. Market Risks: Due to intense competition in the market Smith & Wesson could lose market share because other firms may be able to implement better financial, technical marketing, distribution, and other resource strategies. By conducting business oversees the company is subject to the foreign exchange transaction risks. Smith and Wesson are also subject to numerous liability claims. Strengths Company Highlights: Smith & Wesson manufactures all Of its products in Springfield, Massachusetts, and Hilton, Maine employing approximately 1600 Americans.
All of the testing and assembling of the company’s products re conducted in these facilities, and every firearm has been tested. For precision purposes the parts are cut using computerized equipment. The two facilities are operated at 4 different shifts of 42 hours each. The company seeks to minimize inventory costs by improving demand forecasting and producing accordingly. New Models: Smith and Wesson major focus has been on their Military and Police (M&P) hand gun development. Is introducing new products including the M&P Shield, Pro series CO. R. E. And the M&P 10.
Media Latest News: According to the Bloomberg article by Juliann Francis, As Hutchinson, former GOP congressman, told the reporters in Washington about developing recommendations for a better training program for school security officers, as well as allowing willing faculty to carry firearms. The National Rifle Association (NEAR) will release a 225 page paper on the best ways to achieve enhanced security in school zones. The NEAR has allotted over $1 million for the task. Barack Obama spoke in Denver on April 3rd saying “Loopholes that currently exist in the law have allowed way too many criminals” to avoid background checks for gun purchases.
The majority leader Harry Reid has said Senate will consider gun control legislation this month (April). Financial Smith and Wesson accounting period ends on April 30th every year. In 201 2, net sales consisted of approximately 59% handguns, 8% halter, 19% sporting rifles, 8% hunting fire arms, and 5% accessories. Since 2011 hand gun sales went up 25. 1%. James Debby, company’s CEO, attributed the increase in sales to the successful growth strategy focusing on firearms, expansions, and increased consumer demand for firearms. $20 million of common stock was repurchased in company’s fiscal 3rd quarter in 2012.