Good day, everyone, and welcome to the Smith & Wesson Brands, Inc., first quarter fiscal 2024 financial results conference call. This call is being recorded. At this time, I would like to turn the call over to Kevin Maxwell, 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, 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 costs related to the planned relocation of our headquarters and certain manufacturing distribution operations to Tennessee, the spin-off of the outdoor products and accessories business in fiscal 2021, 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 EBITDA. 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 Deana McPherson, our CFO. With that, I will turn the call over to Mark. Thank you, Kevin, and thanks everyone for joining us today. We are very pleased with our first quarter performance. Our top-line results reflected strong consumer demand for the Smith & Wesson brand at retail. Channel inventory of our products remained steady throughout the seasonally slow period this summer, indicating healthy pull-through of our shipments at both distributor and retailer levels. Innovation and our iconic brand's reputation for quality continue to be big drivers of consumers' preference for Smith & Wesson. Combined with healthy, lean channel inventories as we enter into the traditionally busy fall season, we anticipate these tailwinds will allow us to continue delivering strong results. Our 35% growth in year-over-year revenue in Q1 was driven by unit volume and higher ASPs. ASPs were positively impacted by mix due to the strength of several new product launches, coupled with the seasonal factors relative to the demand for our core products. The team has been effectively managing a balance of innovation and promotions on our core line to grow market share profitably in a highly competitive environment. With firearm demand now steady and following normal seasonal trends, we anticipate that competitive promotional activity will continue, and we may experience some moderation in overall ASPs through the balance of fiscal 2024. Diving a little deeper into new products, they accounted for almost one-third of our first quarter revenue as we continued to see significant demand for our latest introductions. The Folding Pistol Carbine and the M&P 5.7 launches from late last fiscal year continued to dominate their respective categories, and the newest launch in July of the M&P 22 Mag is exceeding our expectations so far. Our development pipeline remains robust, continuing to reflect the strength of our NPD team, with additional products launching later this fiscal year. Turning to market conditions, we continue to see relatively stable demand and familiar seasonality. While consumers continue to be pressured by macroeconomic headwinds, firearms demand trends are following normal historical patterns. We believe our products are well-positioned, reflecting the strength of our brand and innovation, and that we are gaining share. NICS was down about 13% on a year-over-year basis during our first fiscal quarter, while our units were up significantly in both handguns and long guns. I will note again that while monthly NICS trends moderated during the quarter, this is consistent with the normal seasonal pattern during the summer, which typically marks a low point before increasing as we move into the fall hunting season. In spite of the higher shipments of our products into the channel during the quarter, distributor inventories remained steady during a period which traditionally marks an inventory build due to slower retail and stock-up for the busy fall season. For context, our channel inventories are down over 35% versus this time a year ago. Again, this reflects the strong momentum we are seeing across our newest products and the success of a number of targeted promotional programs. We continue to work closely with key retail partners to ensure the channel is clean and closely aligned with SKU-level demand.... Finally, our balance sheet inventory is in a great spot, down mid-single digits versus a year ago, despite the planned redundancy to mitigate any potential disruption caused by our move to Tennessee. Finally, a quick update on the Tennessee relocation. Inventory was moved in phases from our Missouri distribution center into the new facility throughout the second half of July, and we went live with our distribution operations in August, as planned. Assembly and plastic injection molding operations will now begin to transition over the next several weeks and continue into calendar 2024. Construction on the headquarters building is in the final stages, and we're looking forward to the grand opening celebration on October seventh. I want to thank our entire team of loyal, dedicated employees, who have been working tirelessly to ensure the success of the move, while all along maintaining the highest standards in our existing operations and simultaneously dealing with the personal impacts of the relocation. A project of this magnitude is not without its challenges, and over the past two years, our employees have consistently delivered on the values that underpin the culture of Smith & Wesson, overcoming each challenge and putting us in an even stronger position for the future. With that, I'll hand the call over to Deana to cover the financials. Thanks, Mark. Our first quarter results once again demonstrated the power of our flexible model. Bottom-line profitability remained strong as disciplined cost control offset temporary headwinds from seasonally lower production volumes and inflationary factors. Net sales for our first quarter of $114.2 million were $29.8 million, or 35.4% above the prior year comparable quarter, with inventory in the distribution channel showing only a slight increase over April 30 levels. As you will recall, throughout fiscal 2023, we experienced large sequential declines in channel inventory that negatively impacted our sales. We believe that our fiscal 2024 sales will more closely match consumer demand for our products at the counter. ASPs were stronger than anticipated due to the mix of product we sold, with new products making up nearly a third of our total sales. Gross margin of 26.6% was negatively impacted by manufacturing cost absorption and inventory reserve adjustments. We believe this drop is temporary, reflecting seasonal factors, adjustments to production and inventory levels, as well as one-time costs related to our Tennessee relocation. We remain comfortable with our published financial model of annual gross margins of at least 32%. Operating expenses of $26.1 million for our first quarter were $1.5 million lower than the prior year comparable quarter due to lower profit sharing, lower legal expenses, and a reclassification of sublease income from other income to operating expense. Partially offsetting these decreases was a $2 million impairment of distribution equipment during the quarter that we recognized as we began to decommission our Missouri operations. Net income of $3.1 million in the first quarter was $200,000 lower than the prior year comparable quarter. GAAP earnings per share of $0.07 was equal to the prior year first quarter, while non-GAAP earnings per share of $0.13 was up $0.02 over Q1 fiscal 2023. Cash from operations was $40.6 million, more than $33 million above last year, reflecting lower inventory due to strong pull-through of our products at retail, in spite of the industry's seasonal slow period and a seasonal reduction in accounts receivable. With capital spending of $32.1 million, we generated net free cash of $8.6 million during the quarter. We paid $5.5 million in dividends and ended the quarter with $55.5 million in cash and $25 million in borrowings on our line of credit. During our first quarter, we received our certificate of occupancy for our new manufacturing facility in Tennessee and began receiving product in preparation to begin shipping to customers in the second quarter. We will continue capital spending to bring our assembly and plastic injection molding operations online and complete construction of the headquarters part of our building. The majority of the $70 million-$75 million that we plan to spend this fiscal year on the relocation will be completed in our first half. Therefore, we are likely to increase our borrowings on our line of credit during the second quarter, and we expect to fully repay it during our second half. Finally, our board has authorized our $0.12 quarterly dividend to be paid to stockholders of record on September 21st, with payment to be made on October 5th. Looking forward to our second quarter, we expect consumer demand to be similar to last year, with a normal summer seasonal slowness beginning to pick up as we move toward cooler weather and fall activities. Although we expect a slight increase in units shipped over last year's second quarter, we will likely use promotional dollars to drive some of that volume and therefore anticipate a 5%-10% drop in ASPs versus what we saw in our first quarter. We expect margins to continue to be pressured by promotions and higher costs due to inflation and higher interest rates, although we anticipate margins being up slightly in Q2 compared to Q1. The opening of the Tennessee facility will also include one-time costs in Q2 that will result in margin pressure that we expect to alleviate in our second half. Operating expenses will likely be 5%-10% higher in the second quarter versus Q1 due to increased marketing costs associated with the startup of our new facility, including our grand opening festival, increased hiring costs, increased promotions, and increased profit sharing. Finally, our effective tax rate is expected to be approximately 25%. With that, operator, can we please open the call to questions from our analysts? Sure. One moment. ... As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by. We'll compile the Q&A roster. One moment for our first question. One moment for our first question. Our first question will come from the line of Mark Smith from Lake Street. Your line is open. Hi, guys. Mark- First question for me, just, hey, as we look at the mix, can you talk at all about maybe revolvers versus polymer pistols and any impact that maybe had on ASP and kind of how the demand is shifting for each of those lines? Yeah, sure. Revolver demand is usually pretty steady, just given the fact that's a category that obviously, you know, we're always in high demand for, and we're always, you know, largely in that category, capacity constrained. So really the mix change that you're seeing there, Mark, is more, you know, the seasonal. Remember in the summertime, we're slower typically on our core line of products. You've got kind of a lower volume there on the core line, and then we introduced some brand-new products that, you know, obviously are, were towards the higher end. So obviously, those newer products took up a bigger ratio of the total volume out the door, and that's how you ended up with higher ASPs and so in the timeframe. It's just that, you know, you're looking at the slowest period of the season and some new products that, you know, accounted... That did very well. And so obviously they're gonna have a little bit of an outsized impact on ASPs in the three-month timeframe. Okay. And as we think about the new products, I think you called out the 5.7 and the folding carbine. Are those the primary two, or is there anything else that to call out that's really driving ASP? Yeah, remember we launched the 22 Mag in July as well. So obviously, when we do those, you know, the launches of those new products like that, you know, we have, if you remember from, I think, some of the previous calls and conversations, we kind of have a model where we wanna make sure we've got that product ready and available to ship at the moment of launch. So it will be a big channel fill right, right in the beginning. So there, you know, the 22 Mag definitely had an impact as well. Okay. Great, and then as we think about you, you made a comment about promotional environment. You know, what's kind of your outlook for that, especially as we move through holiday season? And then it sounds like you're willing to or planning on competing a little bit in price, but maybe walk us through kind of your thoughts as we move through the important fall and then holiday season. Yeah, sure. Good question. We've kind of got the luxury right now of being pretty strategic about it. You know, so we're gonna react as needed. We're, you know, as I mentioned in the prepared remarks, our inventories are in a really good spot, as we kind of come into the busy season. So, you know, we worked hard on kind of clearing out channel inventories, you know, throughout the second half of last year and kind of came into the summer in a good spot. And our shipments, you know, so far, throughout the summer, pulled through really nicely at retail. So, you know, thanks to the sales team and a lot of promotional activity, new products, you know, that all fed into it. So as we look forward now into the fall, into the busy season, it's not like we're, you know, my point is we're not sitting at, you know, looking at a, at a pile of inventory somewhere that, you know, we either internally or at the channel that we've got to try and move through. We can be pretty strategic and targeted about it. So we definitely are gonna, you know, participate, you know, but it's more gonna be strategic in terms of trying to get, you know, keep and gain market share in certain categories, reactive, if necessary, to, you know, to any of the, the competitive activity that happens out there, if we see anything that we think, you know, is gonna be a threat. So, you know, definitely we'll be participating kind of a, you know, targeted and then wait-and-see mode. Okay. And the last one from me, and I don't know if you want to take this or Deana, but what kind of gives you confidence in the 32% gross profit margin expectation? Yeah. So, a lot of what's driving the change in the first half are accounting reserve adjustments, you know, things like capitalized variance and lower production based on where we were last year to this year. So that, there's like an amortization of that that factors into the first half. It gets amortized over inventory turns. It's a kind of a boring cost accounting thing, but that kind of runs its course in the first half. So the second half, which is traditionally a higher volume and higher production, you remember, like in Q4, we generally have, you know, 65 days of production, no holidays, unlike in the first three quarters, where we have holidays. So we're able to produce more during those periods. And so we get the benefits of absorption. We also get the benefits of higher volume. So, we expect that the back half will be much higher in terms of margin than the first half. Okay. Yeah, Mark, it's been a while since we've been in one of these normal environments. And if you just remember that, you know, we always kind of have this, you know, first half is, you know, second half is always, you know, higher margin than first half. Okay, perfect. Thank you, guys. Yep. Thanks, Mark. One moment for our next question. And our next question, where is it? All right, our next question will come from the line of Steve Dyer from Craig-Hallum. Your line is open. ... Good afternoon, Ryan, and for Steve. Maybe just staying on that last point, can you quantify how much that accounting reserve was, or amortization, either in bps impact, gross margin, or dollars, or both? No, it's several percentage points, but it's, you know, it's not something that we've disclosed. But it is a couple of percentage points impact. Yeah, Ryan, I'd just point out, as a manufacturing company, you know, when we're full and, you know, running the manufacturing facility at, you know, max volume, obviously that brings absorption down and, you know, and like any other manufacturing company, it's, you know, you drive really high gross margins. And, you know, from a fixed cost perspective, I can just tell you the fixed costs have stayed, you know, very steady and very flat. That's something we focus on a lot, is, you know, regardless of the volume coming through the facility, we keep our fixed costs, both in the operation and in the on the OpEx line, pretty flat. So it's really, you know, I'm giving you some color there. It is a really big major driver. Increased production, increased margin. So I guess when I look year-over-year, sales are up 35%, gross margins down 1,000 Bps. So I guess it seemed like those impacts would have been last year in Q1, or, or not necessarily? No, 'cause you remember last year in Q1, we built inventory. The way that our flexible model works is that we allow our supply chain to continue producing until they're able to slowly take their volume down. That's what makes us so successful when we go back to the well later and need them to increase their volumes. When a surge happens, we allow them to bring their volumes back down slowly. So we were still producing, we were growing inventory internally, so we were producing significantly more units in Q1 last year than we produced in Q1 this year. So it's not a function of revenue, it's a function of production. And so by driving inventory down, we no longer have suppliers. You know, we're a year past the surge that we're no longer having suppliers who are still out producing demand, and we're no longer building inventory. So as production curtails, inventory comes down, and the absorption of that fixed overhead, and like Mark said, it hasn't increased significantly from one year to the next. It's just less units going across, the same level of fixed overhead. Which will come back as we, you know, as we get the inventories, you know, the internal inventories in alignment with where we want them to be. It's kind of... You know, you gotta think about it, it's a, it's a long-range view. Like, we don't, we don't knee-jerk to, you know, to market dynamics as the firearms market we know can be very volatile. We, we kinda take a longer range view, slow it down slowly, speed it up. And if you think about the production days, you know, we're in 57 days in Q1, 61 in Q2, 58 in Q3, 64 in Q4. So more production, more volume. And we're not trying to play, like, a quarterly game with we need more production to make our margins higher, growing inventory. We are managing the business for the long term. We're managing for shareholder returns, and so there are times where you turn production down, your margins go down because your fixed overheads don't really change. Over time, it all levels out because you turn that inventory into cash, you're able to do more with it. So, you know, this is really a long-term goal here. This is not a, you know, quarter-to-quarter goal. We're gonna do the right thing by our investors by doing this, you know, cut it back and cut inventory back down now that we're able to. We're beyond the surge. Yep, helpful. Switching over to NICS, the end customer demand, I guess we've seen a deceleration here over the last couple of months. I get it, it's seasonally slow, but it, we're still competing in those same seasonal slow periods in prior years, and it still feels like there's been a bit of a decel here recently. I guess, are you guys seeing anything in the underlying metrics or conversations with distributors, retail partners, the end consumer, et cetera, that gives you that confidence that this is just a temporary kind of summer lull and things are gonna turn back up? Yeah, I encourage you, Ryan, to go back and zoom out a little bit and look at, you know, a 10-year stack chart of NICS, and I think what you'll see on that is, you'll get a little less alarmed, and you'll kind of see that, oh, okay, it's just going back to kind of where it was maybe 4 or 5 years ago. You know, I think we all knew during the, you know, the height of the 2020 and 2021 pandemic surge, that that wasn't sustainable. You know, we'd come back to normal and, you know, that's kind of where we're at right now. So I encourage you to kind of go back and look at how the firearms, you know, trends have looked over the last, you know, 10, 15 years, and you'll see... Stack this year on top of it, you see it's falling right along, almost, you know. It's a very, very predictable summer slowdown and then into the fall. So, you know, that's and yes, I mean, in channel checks, I'm sure if you do them yourself, you'll find out that, you know, it, it's starting to pick up a little bit now, and it will continue to pick up throughout the fall. Great. Thanks, guys. Good luck. Thanks. Thank you. Once again, as a reminder, that's star one one for any questions, star one one. One moment for any questions. All right, now I'd like to turn the conference back to Mark Smith for closing remarks. All right. Thank you, operator. Thanks, everyone, for joining us today, and I look forward to seeing as many of you as we can at our grand opening celebration on October seventh. Everybody, enjoy the rest of the evening. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.