# Smith & Wesson Brands, Inc.: Form 10-Q for the period ended Jan 31, 2025

- Company: [Smith & Wesson Brands, Inc.](/companies/swbi.md) (CIK 1092796)
- Form: 10-Q
- Filed: 2025-03-06
- Accepted by EDGAR: Mar 6, 2025, 16:15 ET
- Period: 2025-01-31
- Accession: 0000950170-25-034659
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1092796/000095017025034659/swbi-20250131.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1092796/000095017025034659/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-01-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-11-01 to 2025-01-31 | $115.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-05-01 to 2025-01-31 | $333.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-11-01 to 2025-01-31 | $87.9m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-05-01 to 2025-01-31 | $247.3m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-11-01 to 2025-01-31 | $27.9m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-05-01 to 2025-01-31 | $86.6m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-11-01 to 2025-01-31 | $2.9m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-05-01 to 2025-01-31 | $7.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-11-01 to 2025-01-31 | $4.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-05-01 to 2025-01-31 | $9.2m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-11-01 to 2025-01-31 | $739.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-05-01 to 2025-01-31 | $1.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-11-01 to 2025-01-31 | $1.7m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-05-01 to 2025-01-31 | $3.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-11-01 to 2025-01-31 | $0.04 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-05-01 to 2025-01-31 | $0.08 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-11-01 to 2025-01-31 | $0.04 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-05-01 to 2025-01-31 | $0.08 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-11-01 to 2025-01-31 | 44,398,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-05-01 to 2025-01-31 | 45,069,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-05-01 to 2025-01-31 | −$48.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-05-01 to 2025-01-31 | $14.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-05-01 to 2025-01-31 | $17.4m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2024-05-01 to 2025-01-31 | $25.5m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-01-31 | $26.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-01-31 | $298.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-01-31 | $578.9m | us-gaap:Assets |
| Current liabilities | at 2025-01-31 | $64.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-01-31 | $214.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-01-31 | $364.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 26,440 characters.

### Overview

Please refer to the Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2024 Annual Report and our unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q. This section sets forth key objectives and performance indicators used by us as well as key industry data tracked by us.

### Third Quarter Fiscal 2025 Highlights

Our operating results for the three months ended January 31, 2025 included the following:

- Net sales were $115.9 million, a decrease of $21.6 million, or 15.7%, from the comparable quarter last year.
- Gross margin was 24.1% compared with gross margin of 28.7% for the comparable quarter last year.
- Net income was $1.7 million, or $0.04 per diluted share, compared with $7.9 million, or $0.17 per diluted share, for the comparable quarter last year.

During the three months ended January 31, 2025, we purchased 219,773 shares of our common stock for $2.8 million.

Our operating results for the nine months ended January 31, 2025 included the following:

- Net sales were $333.9 million, a decrease of $42.8 million, or 11.4%, from the comparable period last year.
- Gross margin was 25.9% compared with gross margin of 27.0% for the comparable period last year.
- Net income was $3.7 million, or $0.08 per diluted share, compared with $13.5 million, or $0.29 per diluted share, for the comparable period last year.

During the nine months ended January 31, 2025, we purchased 1,844,073 shares of our common stock for $25.5 million.

### Results of Operations

### Net Sales and Gross Profit – For the Three Months Ended January 31, 2025

The following table sets forth certain information regarding net sales and gross profit for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Handguns | $79,764 | $94,451 | $(14,687) | -15.5% |
| Long guns | 27,665 | 32,236 | (4,571) | -14.2% |
| Other products & services | 8,456 | 10,797 | (2,341) | -21.7% |
| Total net sales | $115,885 | $137,484 | $(21,599) | -15.7% |
| Cost of sales | 87,938 | 98,060 | (10,122) | -10.3% |
| Gross profit | $27,947 | $39,424 | $(11,477) | -29.1% |
| % of net sales (gross margin) | 24.1% | 28.7% |  |  |

The following table sets forth certain information regarding firearm units shipped by trade channel for the three months ended January 31, 2025 and 2024 (units in thousands):

| Total Units Shipped | 2025 | 2024 | # Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Handguns | 200 | 219 | (19) | -8.7% |
| Long guns | 46 | 63 | (17) | -27.0% |
| **Sporting Goods Channel Units Shipped** | **2025** | **2024** | **# Change** | **% Change** |
| Handguns | 193 | 199 | (6) | -3.0% |
| Long guns | 44 | 60 | (16) | -26.7% |
| **Professional Channel Units Shipped** | **2025** | **2024** | **# Change** | **% Change** |
| Handguns | 7 | 20 | (13) | -65.0% |
| Long guns | 2 | 3 | (1) | -33.3% |

19

Sales of our handguns decreased $14.7 million, or 15.5%, from the comparable quarter last year, primarily as a result of lower consumer demand within the industry and a shift in product mix to lower priced models, partially offset by increased shipments of newly introduced products (defined as any new SKU not shipped in the comparable quarter last year), which represented 40.0% of handgun sales in the period. Handgun unit shipments into the sporting goods channel decreased by 3.0% from the comparable quarter last year while overall consumer handgun demand decreased 4.1% (as indicated by adjusted background checks reported in the National Instant Criminal Background Check System, or NICS).

Sales of our long guns decreased $4.6 million, or 14.2%, from the comparable quarter last year, primarily as a result of lower consumer demand within the industry, partially offset by a shift in product mix to higher priced models. Shipments of newly introduced products represented 56.1% of long gun sales in the period. Long gun unit shipments into our sporting goods channel decreased 26.7% from the comparable quarter last year while overall consumer demand for long guns decreased 3.9% (as indicated by NICS). We believe that our unit demand declined at a significantly greater rate than NICS as a result of the impact in the current year of newly introduced products from the prior year that are at lower price points.

Other products and services revenue decreased $2.3 million, or 21.7%, from the comparable quarter last year, primarily because of lower business-to-business sales, partially offset by increased suppressor sales.

Newly introduced products represented 40.9% of net sales for the three months ended January 31, 2025 and included five new pistols, five new long guns, and many new product line extensions.

Gross margin for the three months ended January 31, 2025 was 24.1% compared with 28.7% for the comparable quarter last year, primarily because of unfavorable fixed-cost absorption from lower production volumes and higher promotional costs, partially offset by lower labor costs.

Inventory balances increased $38.4 million between April 30, 2024 and January 31, 2025 as a result of a slowdown in demand combined with level loading of our manufacturing facilities to ensure our ability to satisfy anticipated future demand. While inventory levels, both internally and in the distribution channel, in excess of demand may negatively impact future operating results, it is difficult to forecast the potential impact of distributor inventories on future revenue and income as demand is impacted by many factors, including seasonality, new product introductions, news events, political events, and consumer tastes. We expect our inventory levels to decline during the remainder of the fiscal year.

### Net Sales and Gross Profit – For the Nine Months Ended January 31, 2025

The following table sets forth certain information regarding net sales and gross profit for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Handguns | $226,853 | $268,903 | $(42,050) | -15.6% |
| Long guns | 77,517 | 79,139 | (1,622) | -2.0% |
| Other products & services | 29,529 | 28,644 | 885 | 3.1% |
| Total net sales | $333,899 | $376,686 | $(42,787) | -11.4% |
| Cost of sales | 247,261 | 275,094 | (27,833) | -10.1% |
| Gross profit | $86,638 | $101,592 | $(14,954) | -14.7% |
| % of net sales (gross margin) | 25.9% | 27.0% |  |  |

20

The following table sets forth certain information regarding firearm units shipped by trade channel for the nine months ended January 31, 2025 and 2024 (units in thousands):

| Total Units Shipped | 2025 | 2024 | # Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Handguns | 549 | 584 | (35) | -6.0% |
| Long guns | 130 | 159 | (29) | -18.2% |
| **Sporting Goods Channel Units Shipped** | **2025** | **2024** | **# Change** | **% Change** |
| Handguns | 516 | 538 | (22) | -4.1% |
| Long guns | 115 | 146 | (31) | -21.2% |
| **Professional Channel Units Shipped** | **2025** | **2024** | **# Change** | **% Change** |
| Handguns | 33 | 46 | (13) | -28.3% |
| Long guns | 15 | 13 | 2 | 15.4% |

Sales of our handguns decreased $42.1 million, or 15.6%, from the comparable period last year, primarily as a result of lower consumer demand within the industry and a shift in product mix to lower priced models, partially offset by increased shipments of newly introduced products, which represented 41.9% of handgun sales in the period, and a 2% to 5% price increase that became effective in the third quarter of fiscal 2024. Handgun unit shipments into the sporting goods channel decreased by 4.1% from the comparable period last year while overall consumer handgun demand decreased 3.1% (as indicated by adjusted background checks reported by NICS).

Sales of our long guns decreased $1.6 million, or 2.0%, from the comparable period last year, primarily as a result of lower consumer demand within the industry, partially offset by increased shipments of newly introduced products, which represented 60.0% of long gun sales in the period, a shift in product mix to higher priced models, and a 2% to 5% price increase on select products that became effective in the third quarter of fiscal 2024. Long gun unit shipments into our sporting goods channel decreased 21.2% from the comparable period last year while overall consumer demand for long guns decreased 0.6% (as indicated by NICS). We believe that our unit demand declined at a significantly greater rate than NICS as a result of the impact in the current year of newly introduced products from the prior year that are at lower price points.

Other products and services revenue increased $885,000, or 3.1%, over the comparable period last year, primarily because of increased suppressor and component parts sales, partially offset by lower business-to-business sales.

Newly introduced products represented 42.4% of net sales for the nine months ended January 31, 2025 and included five new pistols, six new long guns, and many new product line extensions.

Gross margin for the nine months ended January 31, 2025 was 25.9% compared with 27.0% for the comparable period last year, in spite of a $3.2 million legal settlement recognized in the prior year comparable period. Excluding the impact of the prior year legal settlement, gross margin was 190 basis points lower as a result of higher material costs, higher promotional costs, and a shift in product mix, partially offset by lower inventory adjustments (including standard cost revaluations, shrink, and excess inventory write downs) and favorable fixed-cost absorption from higher production volumes.

### Operating Expenses

The following table sets forth certain information regarding operating expenses for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $2,869 | $1,969 | $900 | 45.7% |
| Selling, marketing, and distribution | 10,336 | 10,080 | 256 | 2.5% |
| General and administrative | 12,999 | 16,063 | (3,064) | -19.1% |
| (Gain)/loss on sale/disposition of assets | (2,382) | 30 | (2,412) | — |
| Total operating expenses | $23,822 | $28,142 | $(4,320) | -15.4% |
| % of net sales | 20.6% | 20.5% |  |  |

Research and development expenses increased $900,000 over the prior year comparable quarter because of higher materials and testing costs associated with new product development. Selling, marketing, and distribution expenses increased $256,000 primarily as a result of higher promotional costs. General and administrative expenses decreased $3.1 million from the prior year comparable quarter, primarily as a result of lower Relocation costs, lower profit-related compensation expenses, and lower legal costs. During the three months ended January 31, 2025, we sold certain real estate located adjacent to our former Missouri Distribution Center for $2.3 million, net of transaction costs, and recognized a $2.3 million pre-tax gain on sale.

The following table sets forth certain information regarding operating expenses for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $7,605 | $5,484 | $2,121 | 38.7% |
| Selling, marketing, and distribution | 29,839 | 31,138 | (1,299) | -4.2% |
| General and administrative | 42,480 | 45,571 | (3,091) | -6.8% |
| (Gain)/loss on sale/disposition of assets | (2,521) | (1) | (2,520) | — |
| Total operating expenses | $77,403 | $82,192 | $(4,789) | -5.8% |
| % of net sales | 23.2% | 21.8% |  |  |

Research and development expenses increased $2.1 million over the prior year comparable period because of higher materials and testing costs associated with new product development and higher compensation-related costs. Selling, marketing, and distribution expenses decreased $1.3 million from the prior year comparable period, primarily as a result of a $1.9 million impairment on distribution equipment related to the Relocation and one-time costs related to our grand opening event at our Maryville facility in the prior year comparable period. Excluding the impact of these one-time prior year charges, selling, marketing, and distribution expenses increased $1.5 million, primarily as a result of higher spending on promotions. General and administrative expenses decreased $3.1 million from the prior year comparable period, primarily because of lower Relocation costs and lower profit-related compensation expense, partially offset by higher legal costs.

### Operating Income

The following table sets forth certain information regarding operating income for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating income | $4,125 | $11,282 | $(7,157) | -63.4% |
| % of net sales (operating margin) | 3.6% | 8.2% |  |  |

Operating income for the three months ended January 31, 2025 decreased $7.2 million from the comparable quarter last year, primarily for the reasons outlined above.

The following table sets forth certain information regarding operating income for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating income | $9,235 | $19,400 | $(10,165) | -52.4% |
| % of net sales (operating margin) | 2.8% | 5.2% |  |  |

Operating income for the nine months ended January 31, 2025 decreased $10.2 million from the comparable period last year, primarily for the reasons outlined above.

### Interest Expense, net

The following table sets forth certain information regarding interest expense, net for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest expense, net | $(1,723) | $(955) | $768 | 80.4% |

Interest expense, net increased by $768,000 over the comparable quarter last year, primarily as a result of higher average debt balances and lower average cash balances during the three months ended January 31, 2025 compared with the comparable quarter last year.

The following table sets forth certain information regarding interest expense, net for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest expense, net | $(3,875) | $(1,448) | $2,427 | 167.6% |

Interest expense, net increased by $2.4 million over the comparable period last year as a result of higher average debt balances, lower capitalized interest, and lower average cash balances during the nine months ended January 31, 2025 compared with the comparable period last year.

### Income Taxes

The following table sets forth certain information regarding income tax expense for the three months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $739 | $2,434 | $(1,695) | -69.6% |
| % of income from operations (effective tax rate) | 30.8% | 23.6% |  | 7.2% |

Income tax expense decreased $1.7 million from the comparable quarter last year, primarily as a result of lower operating income. Before adjusting for discrete items related to stock-based compensation, the effective tax rate was 30.1% in the current quarter and 23.6% in the prior year comparable quarter. The increase in the effective tax rate was due to changes in state apportionment and a decrease in pre-tax profitability.

The following table sets forth certain information regarding income tax expense for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $1,659 | $4,629 | $(2,970) | -64.2% |
| % of income from operations (effective tax rate) | 31.0% | 25.5% |  | 5.5% |

Income tax expense decreased $3.0 million from the comparable period last year, primarily as a result of lower operating income. Before adjusting for discrete items related to stock-based compensation, the effective tax rate was 27.6% in the current period and 23.9% in the prior year comparable period. The increase in the effective tax rate was due to changes in state apportionment and a decrease in pre-tax profitability.

### Net Income

The following table sets forth certain information regarding net income and the related per share data for the three months ended January 31, 2025 and 2024 (dollars in thousands, except per share data):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net income | $1,663 | $7,882 | $(6,219) | -78.9% |
| Net income per share: |  |  |  |  |
| Basic | $0.04 | $0.17 | $(0.13) | -76.5% |
| Diluted | $0.04 | $0.17 | $(0.13) | -76.5% |

Net income for the three months ended January 31, 2025 was $1.7 million compared with $7.9 million for the comparable quarter last year for the reasons outlined above.

The following table sets forth certain information regarding net income and the related per share data for the nine months ended January 31, 2025 and 2024 (dollars in thousands, except per share data):

|  | 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net income | $3,690 | $13,499 | $(9,809) | -72.7% |
| Net income per share: |  |  |  |  |
| Basic | $0.08 | $0.29 | $(0.21) | -72.4% |
| Diluted | $0.08 | $0.29 | $(0.21) | -72.4% |

Net income for the nine months ended January 31, 2025 was $3.7 million compared with $13.5 million for the comparable period last year for the reasons outlined above.

### Liquidity and Capital Resources

Our principal cash requirements are to finance the growth of our operations, including working capital and capital expenditures, and return capital to stockholders. Capital expenditures for new product development and repair and replacement of equipment represent important cash needs.

The following table sets forth certain cash flow information for the nine months ended January 31, 2025 and 2024 (dollars in thousands):

|  | 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Operating activities | $(48,051) | $63,003 | $(111,054) |
| Investing activities | (11,796) | (82,475) | 70,679 |
| Financing activities | 25,712 | 13,283 | 12,429 |
| Total cash flow | $(34,135) | $(6,189) | $(27,946) |

### Operating Activities

Cash used in operating activities was $48.1 million for the nine months ended January 31, 2025 compared with $63.0 million of cash provided for the nine months ended January 31, 2024. Cash used in operating activities for the nine months ended January 31, 2025 was unfavorably impacted by a $38.4 million increase in inventory compared with a $23.6 million decrease in inventory in the prior comparable period, a $16.8 million decrease in accounts payable compared with a $11.2 million increase in accounts payable in the prior comparable period, a $8.2 million decrease in accrued payroll and incentives compared with a $1.3 million increase in accrued payroll and incentives in the prior comparable period, and lower net income. Cash used in operating activities for the nine months ended January 31, 2025 was favorably impacted by a $1.6 million decrease in accounts receivable compared with a $5.5 million increase in accounts receivable in the prior comparable period.

### Investing Activities

Cash used in investing activities decreased $70.7 million for the nine months ended January 31, 2025 compared with the prior year comparable period. We paid $14.3 million for capital expenditures for the nine months ended January 31, 2025, which was $70.9 million lower than the prior year comparable period, primarily as a result of payments related to the Relocation in the prior year period.

We currently expect to spend $20.0 million to $25.0 million on capital expenditures in fiscal 2025.

### Financing Activities

Cash provided by financing activities was $25.7 million for the nine months ended January 31, 2025 compared with $13.3 million of cash provided by financing activities for the nine months ended January 31, 2024. Cash provided by financing activities during the nine months ended January 31, 2025 was primarily the result of $70 million in borrowings under our revolving line of credit, partially offset by $25.5 million of share repurchases and $17.4 million in dividend distributions.

*Credit Facilities —* We entered into the Second Amended and Restated Credit Agreement on October 3, 2024. The Second Amended and Restated Credit Agreement provides for a revolving line of credit of $175.0 million at any one time, or the Revolving Line. The Revolving Line bears interest at either the Base Rate (as defined in the Second Amended and Restated Credit Agreement) or the SOFR rate, plus an applicable margin based on our consolidated leverage ratio. The Second Amended and Restated Credit Agreement also provides a swingline facility in the maximum amount of $5.0 million at any one time (subject to availability under the Revolving Line). Each Swingline Loan (as defined in the Amended and Restated Credit Agreement) bears interest at the Base Rate, plus an applicable margin based on our Adjusted Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement). Subject to the satisfaction of certain terms and conditions described in the Second Amended and Restated Credit Agreement, we have an option to increase the Revolving Line by an aggregate amount not exceeding $50.0 million. The Revolving Line matures on the earlier of October 3, 2029 or the date that is six months in advance of the earliest maturity of any Permitted Notes (as defined in the Second Amended and Restated Credit Agreement) under the Second Amended and Restated Credit Agreement.

As of January 31, 2025, we had $110.0 million of borrowings outstanding on the Revolving Line, bearing interest at an average rate of 6.63%, which was equal to the SOFR rate plus an applicable margin.

The credit agreement for our credit facility contains financial covenants relating to maintaining maximum leverage and minimum debt service coverage. We were in compliance with all debt covenants as of January 31, 2025.

*Share Repurchase Programs —* On September 19, 2023, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024, or the 2023 Authorization. During fiscal 2024, we purchased 793,551 shares of our common stock for $10.2 million under the 2023 Authorization. During fiscal 2025, we have purchased 1,531,763 shares of our common stock for $21.4 million under the 2023 Authorization. The 2023 Authorization expired on September 19, 2024. On September 5, 2024, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions from September 20, 2024 through September 20, 2025, or the 2024 Authorization. As of January 31, 2025, we had repurchased 312,310 shares of our common stock for $4.1 million under the 2024 Authorization.

During the three months ended January 31, 2025, we repurchased a total of 219,773 shares of our common stock for $2.8 million. During the nine months ended January 31, 2025, we repurchased a total of 1,844,073 shares of our common stock for $25.5 million. During the three months ended January 31, 2024, we repurchased a total of 71,099 shares of our common stock for $916,000. During the nine months ended January 31, 2024, we repurchased a total of 716,869 shares of our common stock for $9.1 million.

*Dividends —* In March 2024, our Board of Directors authorized a regular quarterly dividend for stockholders of $0.13 per share. We currently anticipate that the next dividend will be for stockholders of record as of market close on March 20, 2025 and will be payable on April 3, 2025.

Our future capital requirements will depend on many factors, including net sales, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, the costs to ensure access to adequate manufacturing capacity, and costs related to the Relocation. Future equity or debt financing may not be available to us on acceptable terms or at all. If sufficient funds are not available or are not available on acceptable terms, our ability to take advantage of unexpected business opportunities or to respond to competitive pressures could be limited or severely constrained.

As of January 31, 2025, we had $26.7 million in cash and cash equivalents on hand. Based upon our current working capital position, current operating plans, and expected business conditions, we believe that our existing capital resources and credit facilities will be adequate to fund our operations for at least the next 12 months.

### Other Matters

### Critical Accounting Policies

The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant accounting policies are disclosed in Note 2 of the Notes to the Consolidated Financial Statements in our Fiscal 2024 Annual Report. The most significant areas involving our judgments and estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2024 Annual Report, to which there have been no material changes. Actual results could differ from our estimates.

### Recent Accounting Pronouncements

The nature and impact of recent accounting pronouncements, if any, is discussed in Note *2—Basis of Presentation* to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

## Market risk

As filed, 155 characters.

During the period ended January 31, 2025, we did not enter into or transact any forward option contracts nor did we have any forward contracts outstanding.

## Controls and procedures

As filed, 1,316 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of January 31, 2025, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There was no change in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 574 characters.

Investors should carefully review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition, and cash flows as set forth under Part I, Item 1A “Risk Factors” of our Fiscal 2024 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe not to be material may also adversely impact our business, results of operations, financial position, and cash flows. We are aware of no material changes to the Risk Factors discussed in our Fiscal 2024 Form 10-K.

Filed Mar 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-034659. Last ingested by Listed: Oct 29, 2026, 04:31 ET. No prices; not investment advice.