Revenue Growth
Net sales of $135.7 million, up $19.8 million or 17.1% year-over-year, driven by new handgun products and stronger sell-through.
Improved Profitability and EPS
EBITDAS of $16.8 million, up nearly 21% year-over-year; GAAP EPS of $0.08 vs $0.05 prior year and adjusted (non-GAAP) EPS $0.08 vs $0.03 prior year; net income $3.8 million vs $2.1 million prior year.
Strong Cash Generation and Balance Sheet Progress
Operating cash flow of $20.5 million in the quarter versus cash used of $9.8 million year-ago; internal inventory down to $175 million (down $23 million versus prior Q3); borrowings of $75 million at quarter-end (down from $90 million in Q2) and an additional $20 million repaid subsequent to quarter-end (bringing post-paydown borrowings to $55 million).
Handgun Performance and ASP Strength
Handgun unit shipments into the sporting goods channel up 28% year-over-year; handgun mix down 2.2%; handgun average selling price up 5.2% versus prior year to over $419 (also above Q2 levels). New handgun products represented 44% of handgun shipments. A price increase (~2–3% effective January 1) was implemented and saw no pushback.
Product Innovation, Market Share and Channel Momentum
New products were 44% of handgun shipments and 28% of long gun shipments; management cited continued market share gains, positive SHOT Show feedback, and strong law-enforcement momentum (shipped to nearly 1,000 agencies in the past 18 months) with a healthy institutional pipeline.
Raised Near-Term Outlook
Management expects Q4 sales to be up 10%–12% year-over-year, gross margin to increase several percentage points versus Q3 (and ~1–2 points versus prior-year Q4), continued healthy cash generation, and reaffirmed capital spending guidance of $25–$30 million for the year. Board authorized a $0.13 quarterly dividend.
Gross Margin Expansion Year-over-Year
Reported gross margin of 26.2%, up 210 basis points year-over-year, driven by increased production volume, lower promotion costs and lower federal excise taxes (partially offset by tariffs).