Risk Factors Summary
Our business, operating results, and financial condition may be materially and adversely affected by the nature and impact of certain risks. Set forth below is a summary list of the principal risk factors as of the date of the filing of this Annual Report on Form 10-K.
Our performance is impacted by a variety of economic, political, social, legislative, regulatory, and inflationary factors.
Our business is subject to extensive regulation.
We face risks associated with international activities.
We are exposed to protectionist trade restrictions, including tariffs and potential trade laws.
High levels of inflation have adversely affected us, and may continue to adversely affect us.
We must continue to introduce new products that are successful in the marketplace.
We are subject to risks associated with the Relocation.
Our operating facilities are critical to our success, and we may incur business disruptions.
We rely on our supply chain for our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders.
We may be unable to forecast demand for our products accurately.
We may fail to align our capacity with demand for our products.
Shortages of and price increases for components, parts, raw materials, and other supplies may delay or reduce our sales and increase our costs.
Our business is highly dependent upon our brand recognition and reputation.
Poor product quality or performance, or defects in our products, could harm us.
We face intense competition.
We may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures.
We may have difficulty collecting amounts owed to us.
Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all.
We are subject to lawsuits and governmental investigations and inquiries.
Our business involves the potential for product recalls and product liability and other claims against us.
We produce or source and sell products that create exposure to potential product liability, warranty liability, and personal injury claims and litigation.
We may be unable to protect our intellectual property or obtain the right to use intellectual property from third parties.
We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights.
Interruptions in the proper functioning of our information systems or other issues with our ERP systems could disrupt our operations.
We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data.
Our operating results may involve significant fluctuations.
The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future.
We are subject to risks related to corporate social responsibility.
Actions of stockholder activists could cause us to incur substantial costs and divert management’s attention and our resources.
Our ability to operate our business efficiently may be adversely impacted if service providers and other businesses that permit firearm-related activities refuse to work with us.
We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel.
Nevada law could make it more difficult for a third party to acquire us and discourage a takeover.
We have identified a material weakness in our internal control over financial reporting that may, if not remediated, result in material misstatements in our financial statements.
P ART I
I tem 1. Business
Introduction
General
We are one of the world’s leading manufacturers and designers of firearms. We manufacture a wide array of handguns (including revolvers and pistols), long guns (including modern sporting rifles, pistol caliber carbines, and lever-action rifles), handcuffs, firearm suppressors, and other firearm-related products for sale to a wide variety of customers, including firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and throughout the world. We sell our products under the Smith & Wesson and Gemtech brands. We manufacture our products at our facilities in Maryville, Tennessee; Springfield, Massachusetts; and Houlton, Maine. We also sell our manufacturing services under our Smith & Wesson and Smith & Wesson Precision Components brands to other businesses to attempt to level-load our factories. During fiscal 2024, we began manufacturing and distribution activities from our Maryville facility. During the fiscal year ended April 30, 2025, we discontinued operations at our Deep River, Connecticut facility and vacated the premises. See Note 14 — Commitments and Contingencies and Note 15 — Restructuring for more information.
Smith & Wesson was founded in 1852 by Horace Smith and Daniel B. Wesson. Mr. Wesson purchased Mr. Smith’s interest in 1873. The Wesson family sold Smith & Wesson to Bangor Punta Corp. in 1965. Lear Siegler Corporation purchased Bangor Punta in 1984, thereby acquiring ownership of Smith & Wesson. Forstmann Little & Co. purchased Lear Siegler in 1986 and sold Smith & Wesson shortly thereafter to Tomkins Corporation, an affiliate of U.K.-based Tomkins PLC. We purchased Smith & Wesson from Tomkins in May 2001 and renamed our company Smith & Wesson Holding Corporation. In January 2017, we changed the name of our company from Smith & Wesson Holding Corporation to American Outdoor Brands Corporation. In May 2020, in preparation for the spin-off of our outdoor products and accessories business, or the Separation, which was completed on August 24, 2020, we changed our name to Smith & Wesson Brands, Inc. On September 30, 2021, we announced our plan to move our headquarters and significant elements of our operations to Maryville, Tennessee in 2023, or the Relocation.
We maintain our principal executive offices at 1852 Proffitt Springs Road, Maryville, Tennessee 37801. Our telephone number is (800) 331-0852. Our website is located at www.smith-wesson.com . Through our website, we make available free of charge our Annual Reports on Form 10-K, our proxy statements, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to any of these documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These documents are available as soon as reasonably practicable after we electronically file them with the SEC. We also post on our website the charters of our Audit, Compensation, Nominations and Corporate Governance, and Sustainability Committees; our Corporate Governance Guidelines, our Code of Conduct, and any amendments or waivers thereto; and any other corporate governance materials contemplated by the regulations of the SEC and the Nasdaq Global Select Market. These documents are also available in print by contacting our corporate secretary at our executive offices.
Unless the context indicates otherwise, the terms “we,” “our,” “ours,” “us,” and “our company” refer to Smith & Wesson Brands, Inc. and its consolidated subsidiaries. “Common stock” refers to the common stock, par value $.001 per share, of our company. Our most recently completed fiscal year ended on April 30, 2025, or fiscal 2025.
Our objective is to be the undisputed market leader in the firearm industry. Key elements of our strategy to achieve this objective and deliver long-term stockholder value are as follows:
drive organic growth by leveraging our brands and maintaining a robust product pipeline to increase market share in markets in which we participate;
design, produce, and market high-quality, innovative firearms and related accessories that meet the needs and desires of our consumer and professional customers and that drive customer satisfaction and loyalty;
create a leverageable infrastructure by streamlining and standardizing our business operations; and
deploy our cash flow in such a manner so as to maximize return on invested capital.
Strategy
Our objective is to be the undisputed market leader in the firearm industry. Key elements of our strategy to achieve this objective are as follows:
Drive Organic Growth by Leveraging Brands and Designing Innovative New Products
We are focused on driving organic growth by producing a robust new product pipeline and leveraging our brands to help us to increase market share in the markets in which we participate and to expand into adjacent and complementary markets by (1) capitalizing on the goodwill developed through our historic, more than 170 year old “Smith & Wesson” brand; (2) enhancing our relationships with distributors, key retailers, and buying groups; and (3) introducing new products. During the last two fiscal years, we have introduced numerous new products, including variations and product lines around the Smith & Wesson and Gemtech brands. We plan to continue to introduce new products in fiscal 2026.
Design, Produce, and Market High-Quality Products that Drive Customer Satisfaction and Loyalty
We are focused on designing, producing, and marketing high-quality, innovative firearms and related accessories that meet the needs and desires of our consumer and professional customers and that drive customer satisfaction and loyalty. Our research and development, product engineering, product sourcing, marketing, and distribution activities are critical components of our ability to offer successful products. We believe that by offering high-quality products and services on a timely and cost-effective basis, as well as providing world-class customer service, training, and support, we will drive customer satisfaction and loyalty. We regard our high-quality, innovative products as the most important aspect of our customer satisfaction and loyalty, but we also offer customer service and support with various programs, such as toll-free customer support numbers, e-mail customer question and answer communications, broad service policies, and product warranties.
Create a Leverageable Infrastructure by Streamlining and Standardizing our Business Operations
We intend to continue to streamline and standardize certain administrative functions of our business with a goal toward driving profitability and improving the ease with which our customers are able to do business with us. A streamlined and standardized approach requires investing in an integrated and configurable technology infrastructure in areas such as enterprise resource planning, or ERP, and compliance. We intend to continue investing in such systems to further enhance our efficiency, improve information reporting, and strengthen internal controls.
Deploy our Cash Flow in Such a Manner so as to Maximize Return on Invested Capital
During fiscal 2025 and 2024, we generated a total of $99.5 million in cash from operations. During the same period, we invested $112.7 million in cash to acquire property, equipment, and patents, of which $84.3 million was to fund the Relocation, repurchased $35.7 million of our outstanding stock, distributed $45.1 million in dividends, and borrowed $55.0 million from our revolving line of credit. We intend to continue our focus on developing, growing, and protecting our iconic firearm brands and using our cash flow from operations on actions that will maximize our return on invested capital, including by investing in machinery, equipment, and new product development.
Products
Introduction
Our products combine our legacy of more than 170 years of American manufacturing and engineering expertise with modern technological advances. Driven by the needs of the individual firearm owner, we continually strive to improve the experience of buying, owning, and shooting a firearm. We also strive to leverage our tradition of innovation in materials, performance, and engineering, along with our proven history of reliability, to produce feature-rich, safe, durable, accurate, and high-performing firearms that satisfy the needs of our broad range of customers. Our introduction of new products is intended to enhance our competitive position and broaden our participation in the overall market.
We have always been a leader in the revolver market. We have substantially enhanced the breadth and quality of our portfolio of products over the years. The introduction of our popular M&P pistol in 2005 resulted in us becoming one of the leaders in the polymer pistol market as well, serving both the consumer sporting goods market and law enforcement agencies. The launch of our M&P modern sporting rifle in 2006 enabled us to capture what we estimate is the leading share of the modern sporting rifle market. In 2023, we further expanded and strengthened our position in the broader long-gun market with the introduction of new pistol caliber carbine offerings, the M&P FPC and Response rifles. In 2024, we introduced our first ever lever-action rifle, the Model 1854. The addition of our Gemtech branded firearm suppressor products in 2017 expanded our firearm-related product offerings. Our firearm suppressors are compatible with most pistols and rifles on the market and complement our firearm products. We currently participate in three categories of the long gun market: semi-automatic rifles, lever-action rifles, and shotguns, and both core categories of the handgun market: semi-automatic pistols and revolvers.
Product Development
All of our firearms and firearm-related products are sold under our Smith & Wesson and Gemtech brands. Our customers include distributors; federal, state, and municipal law enforcement agencies and officers; government and military agencies; and retailers.
Our product development strategy is to understand our consumers’ needs and preferences and then design and develop products to uniquely meet those requirements. Throughout this process, we test multiple concepts with firearm owners and potential purchasers. We compare these test results against a growing database of prior concepts to identify those with the greatest market potential. We complete additional market research to optimize the desired features and benefits. While this development process is ongoing, our launch timing for new products depends on market conditions to maximize sales across the entire product portfolio.
In fiscal 2025, we introduced a number of new products, including (i) the BodyGuard 2.0, a micro handgun concealed carry pistol; (ii) several new variants of our Model 1854 Lever-Action Rifle series; (iii) the expansion of the M&P FPC in 40 caliber and 10mm; (iv) the CSX E-Series, our next generation offering of the hammer-fired, metal-framed CSX featuring several new upgrades and chambered in 9mm; (v) expansion of our revolver line to include several new no-lock Classic revolvers and our innovative Ultimate Carry revolvers; and (vi) the M&P 4, select-fire rifle, chambered in 5.56mm NATO. We received several innovation awards in 2024, including from Guns & Ammo magazine, NRA Publications, and the National Association of Sporting Goods Wholesalers.
Our customers continue to demand premium firearms that provide a competitive edge in sport shooting and hunting. Our Performance Center products are engineered and manufactured to meet this need, and they incorporate many custom features not found in our standard products, such as enhanced triggers for smoother trigger pull, ported barrels for better muzzle control, and specialty sights for quicker target acquisition. In fiscal 2025, we introduced our fifth annual Performance Center Spec Series M&P pistol. This limited edition 2025 model features a heavy-duty steel frame construction, an integrated compensator, enhanced trigger and ergonomics, and a sharp aesthetic with Smith & Wesson blue highlights. We also introduced several line extensions for our popular Performance Center M&P9 Carry Comp lineup that offers premium features, including an integrated port and tuned trigger for reduced felt recoil and better on-target performance.
In fiscal 2025, we also introduced innovative new products in our Gemtech line of firearm suppressors, including the Abyss 5.56 and our Neutron 7.62 in direct thread models.
Handguns
We manufacture an extensive variety of handgun models that includes revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. To fire a single-action revolver, the hammer is pulled back to cock the firearm and align the cylinder before the trigger is pulled. To fire a double-action revolver, a single trigger pull advances the cylinder as it cocks and releases the hammer. A pistol is a handgun in which the ammunition chamber is an integral part of the barrel and which is fed ammunition from a magazine contained in the grip. The firing cycle ejects the spent casings and loads a new round into the chamber.
We have long been known as an innovator and leader in the revolver market and most of our revolvers are currently marketed under the Smith & Wesson brand. We sell a wide range of sizes from small-frame revolvers used primarily for concealed carry and personal protection to large-frame revolvers used primarily for recreational and competitive sport shooting. Our extra-large frame revolvers primarily address the handgun-hunting market.
Our small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens for over 150 years. Our revolvers are available in a variety of models and calibers, with applications in virtually all professional and consumer markets. In fiscal 2025, we expanded our line of revolvers that are designed to enhance the personal carry experience, continuing our innovative leadership in the category. These Ultimate Carry revolvers are chambered in 38 Special and 32 H&R Magnum and feature enhanced grips, sights, and triggers that are designed to enhance the shooting experience.
Our “Classics” department makes it possible to own historic firearms that are manufactured today but modeled after original favorites, such as the Model 29, which was made famous by the movie character Dirty Harry. These firearms are newly crafted with designs that take advantage of some of the most famous and collectible firearms that we have ever made. Our Classics department also makes commemorative firearms and employs master engravers to craft one of a kind custom firearms. These custom-made firearms are intended to reflect the skill and vision of the master engraver and the artistic expression of the owner. We offer a number of catalog variations of Classics and engraved Classics to our customers.
We offer pistols under our Smith & Wesson brand. Our full size and compact M&P line of pistol products have been engineered with input from professional users and are designed to offer performance, safety, and durability that meet the standards of global law enforcement and military personnel, as well as features attractive to consumers. We believe that our M&P branded pistol products are the most ergonomic, feature-rich, and innovative products on the market today. Our range of full-size and compact M&P pistol products are made with a polymer or aluminum frame, a rigid stainless-steel chassis, and a black, through-hardened corrosion resistant finished stainless-steel barrel and slide for durability. Our M&P pistol products feature patented and easily changed palm swell grips in four sizes, allowing the user to customize grips in a matter of seconds; a passive trigger safety to prevent the pistol from firing if dropped; an enlarged trigger guard to accommodate gloved hands; a sear lever release that eliminates the need to press the trigger in order to disassemble the firearm; an ambidextrous slide stop and reversible magazine release to accommodate right- and left-handed shooters; an optional internal locking system and magazine safety; and a universal equipment rail to allow the addition of accessories, including lights and lasers.
In fiscal 2012, we entered the growing personal protection and concealed carry market with the launch of the M&P Shield pistol. The M&P Shield features a slim concealable profile, 9mm, 380 Auto, 40 S&W, and 45 Auto calibers, and M&P ergonomics. Since the launch of the M&P Shield, we have introduced several additional models, including the Shield Plus with enhanced features and capacity, and most recently, the award-winning Bodyguard 2.0.
Our Performance Center department has been providing specialized products and services for the most demanding shooting sports enthusiasts since 1990. To meet the requirements of law enforcement professionals, competitive shooters, collectors, and discriminating sports enthusiasts who demand superior products, our Performance Center personnel conceptualize, engineer, and craft products to create enhanced versions of our standard products. Our craftsmen are highly skilled and experienced gunsmiths. Performance Center products are typically made in limited production quantities, although we offer a number of catalog variations in order to increase product availability.
Long Guns
Our modern sporting rifles are designed to satisfy the functionality and reliability needs of recreational, personal, defense, and professional users, including global military, law enforcement, and security personnel. These long guns are popular with consumers as hunting, personal protection, and sporting target rifles. We offer two pistol caliber carbines, the M&P FPC chambered in 9mm, 40 S&W, and 10mm, and the Response, chambered in 9mm. We offer the M&P and Volunteer series modern sporting rifles in five different calibers (22LR, 5.56mm NATO (223), 308 Winchester (7.62x51mm), 6.5 Creedmoor, and 6mm ARC). We also offer upper assemblies so firearm owners can easily modify their modern sporting rifles to suit the needs and tasks of the various forms of sport shooting and hunting. Our broad product portfolio of modern sporting rifles includes a .22 caliber model, an opening price-point sport model, a hunting caliber model for longer range effectiveness, and several models designed for professional users.
In fiscal 2025, we continued to expand our lever-action offerings, building on the success of the Model 1854, which was introduced in fiscal 2024. This expansion included new caliber introductions in 45 Long Colt, 357 Magnum, and our first long-action rifle cartridge offering in 45-70 Government. The expansion also included our Stealth Hunter series.
We introduced the M&P 4 select-fire rifle, chambered in 5.56mm NATO, which is our first such offering to our law enforcement and military customers.
Other Products and Manufacturing Services
Our other products and manufacturing services include the following:
Parts: We sell parts to support our firearm business, including barrels and magazines that are manufactured at our facilities or purchased from third parties.
Handcuffs: We are one of the largest manufacturers of handcuffs and restraints in the United States. We fabricate these products from the highest-grade carbon or stainless steel. Our patented Lever Lock cuffs offer a double-locking system for added security and comfort, without extra tools or keys. Internal locks help prevent tampering and smooth ratchets allow for swift cuffing and an extra measure of safety. We have the ability to customize handcuffs to fit customer specifications.
Firearm Suppressors: We are one of the nation’s oldest firearm suppressor manufacturers and an active participant in the firearm suppressor market around the world. We believe our Gemtech branded firearm suppressors have been involved in setting standards used by the military in suppressor testing, implementation, and safety. Our firearm suppressors are constructed from high grade aluminum, steel, or titanium and are compatible with every major type of rimfire and centerfire pistol and centerfire rifle caliber currently on the market.
Manufacturing Services: We utilize our substantial manufacturing capabilities to provide services to third-party customers. Our manufacturing services include forging, heat treating, rapid prototyping, tooling, finishing, plating, and machining. We believe our manufacturing services provide us with increased flexibility and reduced supply chain risk. We also believe that business-to-business sales provide profitable revenue stream diversification and enable us to maximize capacity utilization of our manufacturing assets. We market our manufacturing services under the Smith & Wesson and Smith & Wesson Precision Components brand names.
Marketing, Sales, and Distribution
General
We go to market in a variety of ways, including two-step distribution, strategic retailers, and buying groups consisting of certain large, regional retailers, utilizing direct sales employees to service these customers. We also sell firearms directly to law enforcement agencies and manufacturing services directly to other businesses. We sell internationally, primarily through distributors, which in turn, sell to retail stores and government agencies.
Our top five commercial distributors in the United States accounted for a total of 45%, 46%, and 44% of our net sales for the fiscal years ended April 30, 2025, 2024, and 2023, respectively. Those commercial distributors are not regionally exclusive and have many of the same dealer customers. Therefore, we believe that the loss of one or more of these distributors would not materially impact sales as the remaining distributors would be allocated additional sales.
We sell our products worldwide. International sales accounted for approximately 5%, 5%, and 4% of our net sales for the fiscal years ended April 30, 2025, 2024, and 2023, respectively. Our businesses own tooling that is located at various suppliers in Asia and North America.
For the fiscal years ended April 30, 2025, 2024, and 2023, marketing, advertising, and promotion expenses were $15.2 million, $14.7 million, and $14.7 million, respectively, excluding the cost of rebates and promotions reflected in gross profit.
We market our products using a multi-faceted approach to consumers through independent dealers, large retailers, in-store retail channels, direct to consumer, and range operations using focused marketing and promotional campaigns, which include print, broadcast, and digital advertising campaigns; social and electronic media; and in-store retail merchandising strategies. We are prominently featured in vertical print media, including editorial coverage in an extensive list of leading firearms and outdoor magazines, including Guns & Ammo , American Rifleman , Shooting Times , American Handgunner , Shooting Illustrated , American Hunter , Outdoor Life , and Field & Stream . We also sponsor many outdoor television, internet, and online programs that generate significant editorial exposure. We sponsor a number of firearm safety, shooting, and hunting events and organizations.
We print various product catalogs that are distributed to our dealers and mailed directly, on a limited basis, to consumers. We also attend various trade shows and expositions, such as the Shooting, Hunting, Outdoor Trade, or SHOT Show, the National Association of Sporting Goods Wholesalers Annual Expo, the International Association of Chiefs of Police Annual Conference & Expo, the Association of the United States Army, or AUSA, Annual Meeting & Exposition, the IWA OutdoorClassics international trade fair in Europe, and various distributor, buying group, and consumer shows.
Digital Marketing
We utilize our websites, including www.smith-wesson.com and www. g emtech.com, to market our products and services and to provide a wide range of information regarding our company to customers, consumers, dealers, distributors, investors, and government and law enforcement agencies worldwide. Social media platforms, such as Facebook, Instagram, YouTube, LinkedIn, and X (formerly Twitter), are effective ways for us to communicate the features and benefits of our products. Our direct-to-consumer e-mail marketing helps us to further engage our consumers and communicate the value of our brands. We continue to invest in new digital marketing capabilities to provide best-in-class customer experiences. Our websites are designed to inform, inspire, and prepare our customers
for the next step in their firearms journey. We believe our digital platforms support future sales growth and profitability. In fiscal 2025, we introduced a direct-to-consumer e-commerce website to offer non-serialized parts, accessories, and branded goods.
Service and Support
We utilize a variety of methods for supporting our consumers and dealers. We have a toll-free customer service number, e-mail, and social media messaging to answer questions and resolve issues regarding our products. In addition, we offer a limited one-year warranty program and a lifetime service policy under which we repair defects in material or workmanship in our products, without charge, for as long as the original purchaser owns the firearm. We also maintain a number of authorized warranty centers throughout the world and provide both warranty and charge repair services at our facilities.
Suppliers
We manufacture most of the components for our firearms, but purchase certain components and parts, including bolt carriers, rifle receivers, magazines, small parts, and rifle stocks, from third parties. We also purchase ammunition for product testing. Most of our major suppliers are U.S. based and provide materials, components, and parts, such as steel, polymer components, and metal-injected-molded components. The costs of these materials, components, and parts are at competitive rates. We have become less dependent on any particular supplier by strategically sourcing parts and raw material from multiple suppliers based on quality, cost, and risk. Whenever appropriate, we ensure that we have primary and secondary sources of supply for critical parts and components. We are also able to leverage our supply base to supplement our internal capacity and provide flexibility in our response to changes in market conditions. We use numerous raw materials, such as steel, wood, lead, brass, and plastics, in producing and testing our products. We have alternative sources for these raw materials.
Facilities
We have four manufacturing facilities at which we produce our products: a 645,000 square-foot facility located in Maryville, Tennessee; a 575,000 square-foot facility located in Springfield, Massachusetts; and two facilities totaling 44,000 square-feet located in Houlton, Maine. We conduct plastic injection molding, assembly, and distribution services from our Maryville facility. We conduct certain machining, assembly, and manufacturing services at our Springfield facility. We machine non-serialized firearm parts and manufacture handcuffs and other restraint devices in our Houlton facilities. As part of the Relocation, we discontinued operations at the Deep River facility during fiscal 2025. All of these facilities are ISO 9001 certified.
We perform most of the machining and all of the assembly, inspection, and testing of the firearms that we sell in our own facilities. We produce our major firearm components utilizing computer-assisted machines. Our skilled employees use sophisticated automated testing equipment to ensure the proper functioning of our firearms. Every firearm is test fired before shipment. Our Maryville facility operates primarily on three shift patterns: a five day, 8-hour shift schedule. Our Springfield facility operates primarily on two shift patterns: a seven day, 12-hour rotating shift schedule and a five day, 8-hour shift schedule. Our Houlton facilities operate primarily on three shift patterns: a seven day, 12-hour shift schedule, a five day, 8-hour shift, and a four day, 10-hour shift schedule.
We are party to a lease agreement, dated October 26, 2017, between us and Ryan Boone County, LLC, or the Original Missouri Landlord, concerning certain real property located in Boone County, Missouri on which we had been operating our distribution center, or the Missouri Lease, as well as a related payment and performance guaranty, dated October 26, 2017, in favor of the Original Missouri Landlord. As part of the Relocation, on January 31, 2023, we entered into (i) an assignment and assumption agreement with American Outdoor Brands, Inc., our former wholly owned subsidiary, or AOUT (which became effective on January 1, 2024), pursuant to which AOUT assumed all of our rights, entitlement, and obligations in, to, and under the Missouri Lease, or the Assignment and Assumption Agreement, and (ii) an amended and restated guaranty in favor of RCS-S&W Facility, LLC, as successor in interest to the Original Missouri Landlord, pursuant to which Smith & Wesson Sales Company was added as a guarantor, or the Amended and Restated Guaranty. Because of the Amended and Restated Guaranty, we continue to account for this lease as we have since prior to the Relocation. Effective January 1, 2024, we vacated the Missouri distribution
center. Assets from the Missouri distribution center that we could no longer use were sold to AOUT, and we relocated all remaining assets to our Maryville facility.
In addition, we relocated a portion of our plastic injection molding operations to the Maryville facility. As of April 30, 2025, the plastic injection molding machinery and equipment previously utilized in our Deep River facility had been relocated to the Maryville facility or disposed of. We did not recognize a material impairment related to the assets previously utilized at the Deep River facility.
We seek to minimize inventory costs through an integrated planning and production system. All facilities operate utilizing SAP, a fully integrated ERP system.
Research and Development
Through our advanced products engineering departments, we enhance existing products and develop new products for our business. Through our research and development personnel, we conceive, design, and develop potential products that we believe will be attractive to our customers and help address the needs, wants, and desires of our target consumer base. In so doing, we must seek to anticipate and respond to trends and shifts in consumer preferences by continually adjusting our product mix with innovative features and designs and marketing them in an effective manner. Prior to introducing any product, we assess its cost of production and delivery, estimate its potential sales volume and margin, and conduct vigorous prototype and production-quality sample testing. In fiscal 2025, 2024, and 2023, our gross spending on research activities relating to the development of new products was $9.6 million, $7.3 million, and $7.6 million, respectively. As of April 30, 2025, we had 45 employees at our various facilities engaged in ongoing research and development activities for all of our brands.
Patents, Trademarks, and Copyrights
We recognize the importance of innovation and protecting our intellectual property. Accordingly, we own numerous patents related to our products. We apply for patents whenever we develop innovative new products, unique designs, or processes of commercial importance. We do not believe that our business is materially dependent on any single patent.
Because of the significance of our brand names, our trademarks, service marks, trade dress, and copyrights are also important to our business. We have an active global program of trademark registration, monitoring, and enforcement. We believe that our Smith & Wesson and Gemtech brands, including our S&W monogram trademarks, are known and recognized by the public worldwide and are important to our firearm business.
We intend to vigorously pursue and challenge infringements of our patents, trademarks, service marks, trade dress, and copyrights, as we believe the goodwill associated with them is a cornerstone of our branding strategy.
Competition
We encounter rigorous competition in the firearms industry from both domestic and foreign manufacturers. Although some competitors manufacture as wide a variety of firearms as we do, most of our competitors manufacture only certain types of firearms. We are one of the largest manufacturers of handguns, modern sporting rifles, and handcuffs in the United States. We compete primarily based upon innovation, quality, reliability, durability, price, performance, consumer brand awareness, and customer service and support. Our customer service organization is proactive in offering timely responses to customer inquiries. We believe we can effectively compete with all our present competitors. Our primary competitors are Colt, Ruger and Taurus in the revolver market; Glock, Ruger, Sig Sauer, Springfield Armory, and Taurus in the pistol market; Daniel Defense, Diamondback, Ruger, Sig Sauer, and Springfield Armory in the semi-automatic rifle market; and Ruger and Henry in the lever-action rifle market.
Customers
We sell our products through a variety of federally licensed distribution channels. Depending upon the product or service, our customers include distributors; federal, state, and municipal law enforcement agencies and officers; government and military agencies; and retailers. We also sell non-serialized parts, accessories, and apparel to retail consumers through our new e-commerce platform.
We grant payment terms to most commercial customers ranging from 20 to 60 days. However, in some instances, we provide longer payment terms.
During fiscal 2025, sales into our professional channel accounted for approximately 9.0% of our net sales, which included state and local law enforcement agencies, the federal government, and international customers. The remaining 91.0% of our net sales was through federal firearm licensees to domestic consumers.
Seasonality
Our business is seasonal with sales generally peaking in our fourth fiscal quarter, which ends April 30, as a result of most industry events and distributor shows normally scheduled during the early spring months. In addition, because of our operating schedule, which includes a summer and a winter shutdown of our manufacturing facilities, we have an increased number of operating days in our fourth fiscal quarter, which allows our shipping and production volumes to exceed other quarters. Seasonality, however, can be disrupted by external events, such as results of federal, state, and local elections and periodic social and political unrest, crime, and other factors that may drive sales or impact channel inventories.
Governmental Regulations of Firearms
Our business is primarily regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, which licenses the manufacture, sale, and import of firearms and firearm suppressors in the United States. The ATF conducts periodic audits of our facilities that hold federal firearms licenses.
There are also various state laws, regulations, and local ordinances relating to firearm characteristics, features, sales, and firearm magazine capacities. Local firearm dealers must comply with federal, state, and local laws, regulations, and ordinances pertaining to firearm, firearm suppressor, and magazine sales within their jurisdictions. We manufacture several firearm models and magazines in various capacities that comply with those laws, regulations, and ordinances for sales in those states and localities. In Massachusetts, for example, there are regulations related to the weight of the trigger pull, barrel length, material strength, and independent testing of handguns. California, Connecticut, Maryland, New Jersey, and New York, as well as other states, the District of Columbia, and other localities, have similar laws, ordinances, and restrictions. In addition, certain states and the District of Columbia have implemented laws related to microstamping. Generally, these laws require any new pistols to contain a microstamping mechanism, which must be able to etch or imprint an array of characters that identify the make, model, and serial number of a pistol onto each cartridge case when the pistol is fired. No commercially produced firearm has utilized the microstamping process, which many consider to be infeasible, and we have no plans to utilize any microstamping feature in our firearms. While these microstamping laws do not currently restrict our product offerings as a result of ongoing viability studies or legal , in the future, they may restrict our ability to sell our products into these jurisdictions.
Warnings and instructions concerning the safe operation of our firearms and firearm suppressors are contained in the Safety & Instruction Manuals included in all boxes in which firearms and firearm suppressors are shipped and are also available for download from our Smith & Wesson and Gemtech websites.
Environmental Health and Safety
We are subject to numerous federal, state, and local laws and regulations that regulate the health and safety of our workforce, including those regulations monitored by the Occupational Health and Safety Administration, or OSHA, the National Fire Protection Association, and the Department of Public Health. Though not exhaustive, examples of applicable regulations include confined space safety, walking and working surfaces, machine guarding, and life safety.
We are also subject to numerous federal, state, and local environmental laws and regulations concerning, among other things, emissions to the air; discharges to land, surface, subsurface strata and water; and the generation, handling, storage, transportation, treatment, and disposal of hazardous waste and other materials. These laws require us to make significant expenditures of both a capital and expense nature. Several of the more significant federal laws applicable to our operations include the Clean Air Act; the Clean Water Act; the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA; and the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, or RCRA.
We are required to remediate hazardous waste at our facilities. Currently, we own a designated site in Springfield, Massachusetts that contains two release areas, which are the focus of remediation projects as part of the Massachusetts Contingency Plan, or MCP. The MCP provides a structured environment for the voluntary remediation of regulated releases. We may be required to remove hazardous waste or remediate the alleged effects of hazardous substances on the environment associated with past disposal practices at sites not owned by us. We have received notice that we are a potentially responsible party from the Environmental Protection Agency and/or individual states under CERCLA or a state equivalent at two sites.
In our efforts to satisfy our environmental responsibilities and to comply with environmental laws and regulations, we have established, and periodically update, policies relating to the environmental standards of performance for our operations. We have in place programs that monitor compliance with various federal, state, and local environmental regulations. However, in the normal course of our manufacturing operations, we are subject to governmental proceedings and orders pertaining to waste disposal, air emissions, and water discharges from our operations into the environment. We regularly incur substantial capital and operating costs to comply with environmental laws, including remediation of known environmental conditions which we fund through cash flows from operations. We spent $1.7 million, $1.5 million, and $1.5 million in fiscal 2025, 2024 and 2023, respectively, on environmental compliance, primarily related to disposal fees and containers.
In the normal course of our business, we may become involved in various proceedings relating to environmental health and safety matters, and we are currently engaged in an environmental investigation and remediation. Our manufacturing facilities are located on properties with long histories of industrial use, including the use of hazardous substances. We have identified soil and groundwater contamination at our Springfield facility that we continue to monitor and remediate, as appropriate. Based on the situation, an environmental reserve may be recorded based upon currently enacted laws and regulations, currently available facts, experience in remediation efforts, existing technology, and the ability of other potentially responsible parties or contractually liable parties to pay the allocated portions of any environmental obligations. As of April 30, 2025, we did not have an open environmental reserve recorded in our consolidated balance sheet.
Based on information known to us, we do not expect current environmental regulations or environmental proceedings and claims to have a material adverse effect on our consolidated financial position, results of operations, or cash flows. However, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or of the cost of resolution of future environmental health and safety proceedings and claims, in part because the scope of the remedies that may be required is not certain, liability under federal environmental laws is joint and several in nature, and environmental laws and regulations are subject to modification and changes in interpretation. Additional or changing environmental regulation may become more burdensome in the future, and any such development could materially and adversely affect us.
Human Capital
Creating a positive work environment for our employees is critical to our ability to successfully execute our strategy. We are committed to a strong, healthy culture focused on respect for all employees, creating and sustaining a family atmosphere united under a clear vision, with the understanding of each function and individual’s responsibility for team results, collective pride in our company and our industry, and shared rewards for results. In order to ensure that we embody our values and that our culture remains healthy and strong, we place significant focus on our human resources.
Training & Development
Attraction, development, and retention of employees is critical to our success. We offer training and development programs to encourage advancement from within, including the following:
tuition reimbursement for undergraduate or advanced degrees;
computer numerical control, or CNC, machine training in conjunction with a local community college;
wastewater treatment operator training leading to licensure;
reimbursement for continuing professional education for our professionally licensed employees;
other in-house and cross-functional training to aid with career advancement; and
an intern program for college students.
We believe that this training and development leads to more valuable contributions and satisfaction for our employees within their existing roles and also positions employees for roles they aspire to attain. The intern program is intended to serve as a talent pipeline for future hires, as an opportunity for us to receive fresh perspectives and ideas, to introduce college students to our brand and increase positive employer branding, and to contribute to beneficial community engagement. Finally, we conduct periodic compliance and industry training for employees on various topics that are important to our business, including sexual harassment, anti-corruption, and cybersecurity, among others.
Equal Opportunity
Our Talent Acquisition team focuses on ensuring that our workforce is representative of the local communities in which we operate and that our business is open and welcoming to everyone. This commitment extends to all levels of our organization, including within senior management and our Board of Directors. We are committed to hiring qualified candidates without regard to race, religion, color, sex, sexual orientation, pregnancy, gender, age, national origin, ancestry, physical or mental disability, genetic information, or any other status.
Our Talent Acquisition team emphasizes recruiting and retaining a talented workforce with special focus on hiring veterans, whenever possible. Annual voluntary turnover for fiscal 2025, 2024, and 2023 was approximately 15%, 16%, and 18%, respectively.
We utilize third-party tools and databases to review compensation practices on an annual basis to ensure we pay all employees fairly. We engage the services of benefit consultants to provide expert advice on the development of benefit designs and offerings, current market trends, exposure to loss, and various contract provisions. We also partner with various recruiting services to expand our ability to attract a qualified workforce, as needed.
Health and Safety
Our Employee Assistance Program is supplemented by Cigna behavioral health tools in order to support employees’ mental, as well as physical health, needs.
We have a documented education and training plan to ensure employees are well trained on safety measures throughout the organization. We offer more than 55 different types of training, including lecture, classroom setting, and hands-on training to ensure our employees have the knowledge needed to ensure their safety, as well as the safety of others. The success of our training program has allowed us to maintain a relatively low level of safety claims and reduce lost work hours. Our calendar year 2024 and 2023 total recordable incident rate, or TRIR, of 2.3 and 1.6, respectively, and lost time incident rate, or LTIR, of 0.6 and 0.5, respectively, compares favorably to the latest OSHA industry data. According to OSHA, for our NAICS industry code, the calendar year 2023 and 2022 TRIR was 2.3 and 2.5, and the LTIR was 0.6 and 1.6, respectively. Our calendar year 2024 and 2023 near miss frequency rate was 1.9 and 0.3, respectively, and we did not have any fatalities in either year.
Total Rewards
Competitive pay and benefits have always been a highlight of our employee experience. We offer comprehensive benefit programs to our employees that allow them flexibility of choice through our total rewards framework of pay and service recognition, health and wellness, financial well-being, work/life balance, culture and community, and learning and development.
We are committed to ensuring that all of our employees are paid a fair wage. To that end, we offer generous wages and benefits to our employees, including the following:
a comprehensive medical, dental, and vision plan for our employees and their families, for which we pay between 87% and 93% of the total cost;
a 401(k) plan with a company match of up to 3% of the first 6% contributed by the employee;
a profit-sharing plan in which employees can earn up to 15% of their eligible earnings based on company profits;
individual financial planning sessions with a certified financial planner;
twelve annual holidays and a paid time off program;
paid and unpaid leaves of absence, including paid family and medical leave for employees working in qualified states;
flexible spending and health savings accounts;
life and disability insurance coverage;
employee stock purchase plan;
on-site cafeteria and fitness center;
employee assistance programs;
product discounts; and
license-to-carry subsidies and reimbursement for range membership fees.
Annual increases and incentive compensation for salaried and non-operations hourly employees are based on merit, which is communicated to employees upon hire and documented through our talent management program as part of the annual performance review process. Annual increases for hourly operations employees are based on a yearly market analysis for comparable jobs.
Headcount
As of April 30, 2025, we had 1,416 employees, including eleven part-time employees. None of our employees are represented by a union in collective bargaining with us. Of our employees, 30% have 10 or more years of service with our company and 3% have greater than 25 years of service with our company. We believe that our employee relations are good and that the high quality of our employee base is instrumental to our success.
Information About our Executive Officers
The following table sets forth certain information regarding our executive officers:
Name
Age
Position
Mark P. Smith
President and Chief Executive Officer
Deana L. McPherson
Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary
Kevin A. Maxwell
Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary
Susan J. Cupero (a)
Vice President, Sales
Ms. Cupero retired on May 5, 2025.
Mark P. Smith has served as President and Chief Executive Officer since 2020. Mr. Smith served as Co-President and Co-Chief Executive Officer from January 2020 to August 2020. Mr. Smith served as President, Manufacturing Services of our company and as President of Manufacturing Services for Smith & Wesson Sales Company (formerly known as American Outdoor Brands Sales Company and Smith & Wesson Corp.), a subsidiary of our company, from 2016 until 2020. Mr. Smith served as Vice President of Manufacturing and Supply Chain Management from 2011 until 2016 and served as Vice President of Supply Chain Management from 2010 until 2011. He was Director Supply Chain Solutions for Alvarez & Marsal Business Consulting, LLC from 2007 until 2010. Mr. Smith held various positions for Ecolab, Inc., a developer and marketer of programs, products, and services for the hospitality, foodservice, healthcare, industrial, and energy markets, from 2001 until 2007, including Program Manager, Acquisition Integration Manager, Senior Manufacturing Planner, Plant Engineer, and Senior Production / Quality Supervisor. Mr. Smith was a Production Supervisor for Bell Aromatics, a manufacturer of flavors and fragrances, from 1999 until 2001.
Deana L. McPherson has served as Executive Vice President , Chief Financial Officer, Treasurer, and Assistant Secretary since 2020. Ms. McPherson served as Vice President, Chief Accounting Officer, Corporate Controller, and Assistant Treasurer from 2017 to 2020. Ms. McPherson served as Vice President, Corporate Controller, and Assistant Treasurer from 2009 to 2017. Ms. McPherson served as Corporate Controller from 2007 to 2009. From 2001 to 2007, Ms. McPherson held a number of increasingly responsible positions for Wood Group PLC, a $5.0 billion international energy services company, including, at her departure, Vice President of Finance for the Heavy Industrial Turbines division. From 1995 to 2001, she served as Accounting Manager of FiberMark DSI, Inc. (formerly Rexam DSI, Inc.), a producer of specialty fiber-based materials in the paper and packaging industry. From 1992 to 1995 she was employed as an auditor at Deloitte & Touche LLP. Ms. McPherson is a Certified Public Accountant registered with the Commonwealth of Massachusetts.
Kevin A. Maxwell has served as Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary since 2021. From 2016 to 2021, he served in leadership positions within the legal department of WestRock Company, a publicly traded paper and packaging company, including as Vice President – Associate General Counsel and Assistant Secretary. From 2010 to 2016, Mr. Maxwell held a number of increasingly responsible positions with Mueller Water Products, Inc., a publicly traded water infrastructure company, including, Vice President – Assistant General Counsel and Assistant Secretary. From 2004 to 2010, he served as a corporate associate in the London and Washington, DC offices of Skadden, Arps, Slate, Meagher & Flom.
Susan J. Cupero served as Vice President of Sales of our company from 2021 until her retirement in May 2025. Ms. Cupero held increasingly higher positions with our company during her 45 years of service, including Director of Independent Distributors from 2017 until 2021, and Director of Sales Administration from 2015 until 2017.
Item 1A. Risk Factors:
The following summarizes the material risks of purchasing or owning our common stock. Additional unknown risks may also adversely impact our business, operating results, and financial condition. Our business, operating results, and financial condition may be materially and adversely affected by the nature and impact of the risks discussed below, as well as additional unknown risks, in which case the trading price of our common stock could be adversely affected, and investors may lose part or all of the value of their investment. You should carefully consider the risks and uncertainties described below.
We have grouped these risk factors into the following general categories:
Risks relating to economic, political, social, legislative, regulatory, and inflationary factors.
Risks relating to manufacturing, the Relocation, raw materials and component supply, product development and performance, customer demand, and brand recognition.
Risks relating to legal proceedings, product recalls, and other product liabilities.
Risks relating to intellectual property, information systems, and cybersecurity.
Risks relating to certain business matters and securities markets.
Risks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors
Our performance is impacted by a variety of economic, political, social, legislative, regulatory, and inflationary factors.
A variety of economic, political, social, legislative, regulatory, and inflationary factors could materially and adversely affect our business, operating results, and financial condition.
Our business may be adversely impacted by general economic conditions and consumer spending patterns. Consumer spending on discretionary items and demand for our products may be adversely impacted by a number of economic factors, including economic uncertainty, high levels of unemployment, declines in consumer confidence and discretionary income, lack of consumer credit, increases in consumer debt levels, stock market declines, poor weather conditions, high energy prices, increased energy and commodity prices, higher costs for materials and services, high levels of tax, interest rates, inflationary conditions, and increased labor costs. Economic conditions also affect governmental and budgetary policies, which may adversely affect our ability to sell our products to law enforcement, government, and military customers.
Our business may be adversely impacted by political, social, and related factors. Concerns about presidential, congressional, state, and local elections, and legislative and public policy shifts resulting from those elections, can adversely affect demand for our products. For example, we believe demand for our products was negatively impacted by unified Republican control of the executive and legislative branches of the federal government during the first two years of the first Trump administration and we believe demand for our products is currently being, and may continue to be, impacted by unified Republican control of the executive and legislative branches of the federal government, in each case, as a result of the reduced risks of gun control legislation and regulation. In addition, speculation surrounding increased gun control at the federal, state, and local level and heightened fears of crime and terrorism can affect consumer demand for our products. These concerns often result in an increase in near-term consumer demand for our products and subsequent softening of demand when these concerns subside. For example, we experienced historic levels of demand for our products in parts of fiscal 2022 and 2021 as a result of the impact of COVID-19 and the social experienced in the United States during the summer of 2020, with demand for our products subsequently returning to more normalized levels. As a result of these significant fluctuations in demand, our operating results can vary significantly from period to period and we may build and maintain inventory levels that are significantly in excess of customer demand.
Federal and state legislatures frequently consider laws to regulate firearms, including the amendment or repeal of existing laws. Existing laws may also be affected by future judicial rulings and interpretations. Changes to existing laws or the enactment of new laws may seek to restrict the makeup of firearms, including limiting magazine capacity; mandating the use of certain technologies in a firearm; removing existing legal defenses in lawsuits; or banning the sale and, in some cases, the ownership of various types of firearms and accessories. For example, certain states (i) prohibit the sale of modern sporting rifles; (ii) restrict magazine capacity; or (iii) have adopted some form of so called "gun industry accountability" laws that attempt to facilitate the filing of civil lawsuits by the respective state government or private individuals against certain firearm industry participants. Certain states have also raised the minimum age for buying firearms and begun levying excise taxes on firearm, firearm component, and ammunition sales. Interest in gun control legislation among federal and state legislatures tends to intensify following significant events, such as mass shootings. If restrictive laws or restrictive changes to existing laws are adopted, we could find it difficult, expensive, or even impossible to comply with such laws, which could impede our ability to develop new products and distribute existing products, and it may become more or to purchase our products. In addition, gun-control activists may in imposing restrictions or an outright ban on private firearm ownership or particular firearm models, which could have a material effect on our business, operating results, and financial condition.
In addition to these matters, which are largely beyond our control, demand for our products may also be adversely impacted by shortages of ammunition since potential purchasers of our products may choose not to purchase our products unless supplies of ammunition to use with our products are available. Since we do not manufacture ammunition, the supply of ammunition is also beyond our control.
Our business is subject to extensive regulation.
Firearms Compliance.
Our business, as well as the business of all manufacturers and marketers of firearms and firearm parts, is subject to numerous federal, state, local, and foreign laws, regulations, and protocols, including ATF rules and regulations. If we fail to comply with ATF rules and regulations, the ATF may limit our activities or growth, fine us, or, ultimately, put us out of business.
The manufacture, sale, and purchase of firearms are subject to extensive federal, state, and local governmental regulation. The primary federal laws are the National Firearms Act of 1934, or NFA, the Gun Control Act of 1968, or GCA, and the Firearms Owners’ Protection Act of 1986, which have been amended from time to time. The NFA severely restricts the private ownership of fully automatic weapons and heavily regulates other firearms defined in that law and accompanying regulations, including firearm suppressors. The GCA places certain restrictions on interstate firearm sales, among other things. Most of our exported products are governed by the U.S. Department of Commerce and regulated by its Bureau of Industry and Security, or BIS, under the Export Administration Regulations. Certain of our exported products are governed by the U.S. Department of State and subject to the International Traffic in Arms Regulations. We are generally required to obtain U.S. government authorization for exports, including licensure or other similar authorization prior to engaging in international transactions. The U.S. government has discretion as to whether to grant a license. In addition, Congress may block a proposed sale of firearms that are export controlled by the Department of State valued at $1 million or more. Consequently, we may not be able to obtain export licenses or complete profitable contracts as a result of political or other reasons that are beyond our control. In May 2024, new BIS rules took effect that, among other things, led to the of certain of our previously valid licenses that authorized firearm exports to non-government end users in countries deemed "high risk" by the State Department and otherwise imposed significant changes on the licensing requirements for many firearms exports. These new restrictions impacted our international sales. to receive required licenses or authorizations, or the or of our export privileges, could have a material effect on our business, operating results, and financial condition.
In addition to federal requirements, state and local laws and regulations may place additional restrictions or prohibitions on firearm ownership and transfer. These laws and regulations vary significantly from jurisdiction to jurisdiction. Some states or other governmental entities have enacted, and others are considering, laws restricting or prohibiting the ownership, use, sale, or importation of certain categories of firearms, firearm suppressors, ammunition, and ammunition feeding devices. For example, certain states have adopted restrictions on the sale of modern sporting
rifles, and other states are considering adopting similar laws. Some states mandate, or are considering mandating, certain design features based on perceived safety or other grounds. California maintains a roster of handguns that are certified for sale in the state, and other states have adopted or are considering adopting similar rosters. Certain of our products have been removed from the California roster in the past (meaning that they can no longer lawfully be sold by retailers) and may be removed in the future. Finally, our ability to sell our products in international markets is impacted by local laws, rules, and regulations in those markets. For example, Canada has banned the sale, purchase, or transfer of various firearms within Canada, subject to certain exceptions. Such laws could have a material adverse effect on our business, operating results, and financial condition.
Existing industry protections may be repealed or affected by judicial rulings. For example, the Protection of Lawful Commerce in Arms Act of 2005, or the PLCAA, was enacted by Congress in 2005 to protect firearms manufacturers and dealers from liability when their legally manufactured and lawfully sold products are later used in criminal acts. The PLCAA (or state law equivalents of the PLCAA) could be repealed, amended, or affected by future judicial rulings and interpretations. If the PLCAA (or state law equivalents of the PLCAA) were repealed, amended, or reinterpreted, firearm manufacturers could face a significant increase in litigation, which could have a material adverse effect on our business, operating results, and financial condition.
Environmental Compliance.
We are subject to numerous federal, state, and local laws that regulate or otherwise relate to the protection of the environment, including the Clean Air Act, the Clean Water Act, CERCLA, and the Solid Waste Disposal Act, as amended by RCRA. CERCLA and RCRA and related state laws subject us to the potential obligation to remove or mitigate the environmental effects of the disposal or release of certain pollutants at our manufacturing facilities and at third-party or formerly owned or leased sites at which contaminants generated by us may be located. We have incurred and expect to continue to incur expenditures in order to comply with these requirements. Further, we may become subject to governmental proceedings and orders pertaining to waste disposal, air emissions, and water discharges.
We may not have identified all existing contamination on our properties, and our operations may cause contamination in the future. As a result, we could incur additional costs to clean up contamination that exceed the amount of our reserves, and our reserves may increase from time to time. Furthermore, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or the cost to satisfy future regulatory proceedings and claims.
We could also be adversely affected by future laws and regulations related to climate change, including laws related to greenhouse gas emissions. These laws and regulations could lead to increased environmental compliance costs and increased energy and raw materials costs, in addition to other impacts.
Employment and Occupational Health and Safety Compliance.
We are subject to a number of employment and occupational health and safety laws and regulations, including the Fair Labor Standards Act and the Occupational Safety and Health Act and the rules and regulations promulgated thereunder, that could significantly increase our operating costs and reduce our operational flexibility. In 2024, we settled a matter involving the alleged non-payment of wages and overtime in violation of the Massachusetts Wage Act and Massachusetts Minimum Fair Wage Law.
Corruption Compliance.
The Foreign Corrupt Practices Act of 1977, or FCPA, and local anti-corruption laws, among other things, prohibit companies and their intermediaries from making improper payments to government officials for the purpose of influencing official decisions. Our efforts to comply with the FCPA, or other applicable anti-corruption laws and regulations, may cause us to limit our international business activities, or result in reducing or impeding our sales growth in numerous foreign countries. Further, our internal control policies and procedures, or those of our vendors, may not adequately protect us from reckless or criminal acts committed or alleged to have been committed by our employees, agents, or vendors. Any such violations could lead to civil or criminal monetary and non-monetary penalties and/or could damage our reputation.
Privacy Compliance.
Changing privacy laws in the United States, Europe, and elsewhere have created new individual privacy rights, imposed increased obligations on companies handling personal data, and increased potential exposure to fines, litigation, and penalties. In 2025, a purported class action matter was filed against us, alleging, among other things, violations of the California Invasion of Privacy Act.
Compliance with laws, regulations, and other requirements, including those discussed above, is costly and time consuming, and our failure to comply could cause us to incur fines and penalties, lead to restrictions on our ability to manufacture and sell our products and services, or otherwise negatively impact our ability to import or export the products that we sell. Allegations that we have failed to comply with these laws, regulations, and other requirements could also expose us to litigation and harm our reputation. In addition, these laws, regulations, and other requirements may change or be applied or interpreted in ways that will require us to modify our products, subject us to enforcement risk, expose us to reputational harm, or impose on, or require us to incur, additional costs, including substantial compliance costs, which may materially and affect our business, operating results, and financial condition.
We face risks associated with international activities.
Our foreign sales and purchases of certain components expose us to various economic, political, and other risks, including the following:
compliance with U.S. and local laws and regulatory requirements, including adverse changes in those laws and requirements;
transportation delays or interruptions;
foreign exchange rate fluctuations;
limitations on imports and exports – In 2024, new BIS rules took effect that, among other things, led to the revocation of certain of our previously valid licenses that authorized firearm exports to non-government end users in countries deemed “high risk” by the State Department and otherwise imposed significant changes on the licensing requirements for many firearms exports;
imposition of restrictions on currency conversion or the transfer of funds;
the possibility of appropriation of our assets without just compensation;
taxes, tariffs, and duties;
the burdens and costs of compliance with a variety of foreign laws; and
political or economic instability in countries in which we conduct business, including possible terrorist acts.
Any one or more of these risks could materially and adversely affect our business, operating results, and financial condition.
We are exposed to protectionist trade restrictions, including tariffs and potential trade laws.
The federal government has, at times, put in place tariffs and other trade restrictions with respect to other countries, including limiting trade and imposing tariffs on imports from foreign countries. In addition, other countries have, at times, threatened or put in place tariffs of their own. For example, in April 2025, the United States announced the imposition of worldwide reciprocal and other tariffs on its trading partners, and in response to the United States' actions, many of the United States' trading partners announced retaliatory tariffs.
We are currently subject to tariffs on certain of our products, and other of our products could become subject to tariffs in the future. Protectionist trade restrictions, such as changes in tariff structures, export or import compliance laws, or other trade policies in the United States or foreign countries could reduce our ability to sell our products in foreign markets, negatively impact the ability of foreign customers to purchase our products, adversely affect our
ability to import products, components, and raw materials from foreign suppliers, and interfere with our supply chain. Tariffs that result in increased costs or adversely impact the availability of imported products, components, or raw materials used in the production of our products could materially and adversely impact our business, operating results, and financial condition. In particular, increased input costs may require us to increase the prices of our products, which may result in lower demand for our products or lower gross margins on such products if we are unable to increase the price of those products to our customers. In addition, the imposition of tariffs on products that we export to international markets could make those products more expensive compared to those of our competitors if we pass the additional costs on to our customers, which may also adversely impact our business.
High levels of inflation have adversely affected us and may continue to adversely affect us.
Many of the markets in which we sell our products, including our primary market in the United States, have experienced high levels of inflation. We believe high levels of inflation have depressed, and may continue to depress, consumer demand for our products as certain firearm consumers have traded down to purchase lower-priced firearms or delayed purchases due to cost concerns. Inflation can also adversely affect us by increasing material, labor, and other costs required to operate and grow our business, which we believe has reduced, and may continue to reduce, our profitability. For example, in response to inflationary pressures, we have experienced increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future. Because we typically purchase these supplies based on short-term commitments from our suppliers, we are exposed to risks associated with significant levels of cost inflation. If we are unable to increase our prices to offset the effects of inflation, our business, operating results, and financial condition could be materially and affected.
Risks Relating to Manufacturing, the Relocation, Raw Materials and Component Supply, Product Development and Performance, Customer Demand, and Brand Recognition
We must continue to introduce new products that are successful in the marketplace.
Our success depends on our ability to continue to conceive, design, produce or source, and market in a timely manner a continuing stream of innovative new products that appeal to consumers, achieve market acceptance, and drive customer satisfaction and loyalty. New product development can be a lengthy and costly process. Any new products that we develop and introduce to the marketplace may be unsuccessful in achieving customer or market acceptance or may achieve success that does not meet our expectations for a variety of reasons, including delays in introduction, unfavorable cost comparisons with alternative products, unfavorable customer or consumer acceptance, and unfavorable performance. Our business, operating results, and financial condition could be materially and adversely affected if we to introduce new products that consumers want to buy or we incur significant expenses related to proposed new products that prove to be for any reason.
Consumer preferences include the choice of sales channels. In 2025, we launched a direct-to-consumer e-commerce website for certain apparel and firearm accessories. Legal and regulatory restrictions apply to the sale of certain of the products offered (such as magazines) through our e-commerce website. As a result, we may be unable to sell or may choose not to sell certain products through our e-commerce website, and any changes in applicable federal or state laws or regulations may impact our ability to sell our products through our e-commerce website. Our efforts to increase our sales on our e-commerce website may not be successful.
We are subject to risks associated with the Relocation.
In connection with the Relocation, we continue to be subject to a number of risks, including those associated with meeting the spending, headcount, and wage commitments required to receive and/or retain certain governmental incentives associated with the Relocation and our ability to effectively implement and utilize productivity enhancements, including those related to automation. In addition, we have experienced, and may continue to experience, increased employee turnover and challenges in recruiting employees and retaining existing employees. This turnover may have resulted in, and may continue to result in, the loss of valuable historical knowledge concerning our business and its operations. In particular, we may be unable to recruit employees with the requisite skills to work at our Maryville facility, and we may struggle to recruit and retain employees to work in our Springfield facility,
which has been significantly impacted by the Relocation. Any one or more of these risks could cause us to fail to realize the expected benefits of the Relocation.
Our operating facilities are critical to our success, and we may incur business disruptions.
We operate in only four facilities located in three locations, and our success depends on our ability to operate each facility efficiently.
We produce key components for most of our products at our Springfield facility, which also houses our principal research, development, engineering, and design functions. We frequently make changes in our manufacturing operations to modernize the facility and associated equipment and systems as a result of the age of the facility and the continued need to introduce efficiencies in manufacturing and other processes. We anticipate that we will continue to incur significant capital and other expenditures with respect to the facility, but we may not be successful in continuing to improve efficiencies. A disruption of the operation of this facility would adversely affect our ability to produce many of our products and serve our customers.
We house our management, administrative, assembly (except for revolvers, certain metal pistols, and lever-action rifles, which continue to be manufactured and assembled in the Springfield facility), distribution, and plastic injection molding functions at our Maryville facility. Our Maryville facility includes computer controlled and automated equipment, which is complex and may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, electronic or power interruptions, and other system failures.
We also depend on our Houlton facilities, which are used primarily to machine our firearm parts and manufacture all of our handcuffs and restraints.
A disruption in the activities of these facilities could adversely affect our firearm manufacturing operations.
Our ability to successfully operate our facilities depends on numerous factors, including the proper design of the facilities, the ability to employ an adequate number of skilled workers to operate the facilities, the design and operation of computer controlled and automated systems, the design of software systems to operate the facilities, and the integration of the facilities into our ERP system. Difficulties or delays in performing any of these critical tasks could negatively impact our operating results, and a disruption of the operation of these facilities would adversely affect our ability to distribute our products to our customers.
The operations at our facilities may be interrupted or impaired by various operating risks, including risks associated with the following:
catastrophic events, such as fires, floods, earthquakes, explosions, natural disasters, severe weather, (including hurricanes, tornados, and droughts), and pandemics, or other similar occurrences;
interruptions in the delivery of raw materials or other manufacturing inputs;
adverse government regulations;
equipment breakdowns or failures;
prolonged power failures;
unscheduled maintenance outages;
telecommunication and information system disruptions or failures due to any number of causes, including cyber-attacks;
violations of permit or licensing requirements or revocation of permits or licenses;
releases of pollutants and hazardous substances;
disruptions in transportation infrastructure, including roads, bridges, railroad tracks, and tunnels;
human errors;
criminal acts;
shortages of equipment and spare parts; and
labor shortages and disputes.
Business disruptions may impair our production and distribution capabilities and materially and adversely affect our business, operating results, and financial condition. Given the industry within which we operate and our brand, we may be more likely than other companies to be a target for malicious disruptive activities or physical attacks on our senior leadership team or facilities. The casualty and business interruption insurance that we maintain may not be adequate to protect us from the types and amounts of losses we may incur or from the adverse effects that may be caused by disruptions in our operations, such as the long-term loss of customers or an erosion of our brand image.
We rely on our supply chain for our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders.
We utilize contract manufacturers for a portion of our production requirements, particularly during periods of very high customer demand, in order to increase our manufacturing capacity and reduce our capital expenditures for facilities that may not always operate at peak capacity. Qualifying new contract manufacturers is time consuming and may result in unforeseen disruptions in our operations. The loss of our relationships with our contract manufacturers or their inability to conduct their services for us as anticipated in terms of capacity, cost, quality, and timeliness could adversely affect our ability to fill customer orders in accordance with required delivery, quality, and performance requirements. If this were to occur, the resulting decline in net sales could harm our business.
The ability of our suppliers to effectively satisfy our production requirements could be impacted by their financial difficulty or various operating risks, including catastrophic events, pandemics such as COVID-19, terrorist attacks, natural disasters, interruptions in the delivery of raw materials or other manufacturing supplies, adverse government regulations, or equipment breakdowns or failures. The failure of any supplier to perform to our expectations could result in supply shortages or delays for certain products and product components and harm our business. If we experience significantly increased demand for our products, or if we need to replace an existing supplier, we may be unable to supplement or replace our production capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our , and our ability to deliver our products timely. For certain of our products, it may take a significant amount of time to identify and qualify a supplier that has the capability and resources to meet our product specifications in sufficient volume and our service and quality control standards. A number of factors related to our suppliers are beyond our control, including political and economic in the countries in which they operate, their financial and managerial , their to meet our standards or production deadlines, their of adequate quality control, they encounter with production capacity, their labor , the availability of raw materials, product quality issues, currency exchange rates, transport availability, cost, inflation, and other factors. Although we have insurance to cover potential from most of our suppliers for these events, we could experience in excess of our insured limits and any for various could be . In addition, to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could have a material effect on us, as well as require additional resources to restore our supply chain.
The capacity of our contract manufacturers to produce our products also depends upon the cost and availability of raw materials. Our contract manufacturers and other suppliers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs. Any shortage of raw materials or inability of a manufacturer to produce or ship our products timely, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner. As a result, we could experience cancellations of orders, refusals to accept deliveries, or reductions in our prices and margins, any of which could harm our financial performance, reputation, and operating results.
We have occasionally received, and may receive in the future, product deliveries from suppliers that fail to conform to our quality control standards. In such circumstances, our inability to utilize those products in production could have a negative effect on our net sales and increase our administrative and shipping costs if we are unable to obtain replacement products in a timely manner.
We may be unable to forecast demand for our products accurately.
We often schedule internal production and place orders for product components and raw materials with third-party suppliers before receiving firm orders from our customers. Demand for our products can vary significantly from period to period. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products to deliver to our customers. Factors that could affect our ability to accurately forecast demand for our products include the following:
our failure to accurately forecast customer acceptance of new products;
an increase or decrease in consumer demand for our products or our competitors' products;
new product introductions by competitors;
our relationships with customers;
general market conditions and other factors, which may result in order cancellations or changes in the rate of reorders placed by customers;
general market conditions, economic conditions, and consumer confidence levels, which could reduce demand for discretionary items, such as our products; and
the domestic political environment, including debates over the regulation of various consumer products related to our industry.
Internal inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have a material adverse effect on our business, operating results, and financial condition. Inventory levels in excess of consumer demand within our distribution channel may also impact our ability to sell our internal inventory. For example, inventory levels in the distribution channel were elevated for much of fiscal 2023 as our customers adjusted to more normal levels of demand following the historic levels of demand for our products in parts of fiscal 2022 and 2021, which we believe resulted in lower than anticipated net sales of our internal inventory in fiscal 2023. If we underestimate demand for our products, we and our third-party suppliers may not be able to produce products to meet customer demand, and this could result in delays in the shipment of products and lost net sales, as well as damage to our reputation and customer relationships. Our business, operating results, and financial condition could be materially and adversely impacted if we are unable to forecast demand for our products accurately.
We may fail to align our capacity with demand for our products.
From time to time, we have been capacity constrained and have been unable to satisfy on a timely basis the demand for some of our products. We believe that we have improved our manufacturing productivity by adding capacity, increasing daily production quantities, increasing operational availability of equipment, reducing machinery down time, extending machinery useful life, increasing manufacturing efficiency, and contracting with suppliers to obtain additional finished parts. Future significant increases in demand for our products, if any, may require us to further expand our manufacturing capacity, particularly through the purchase of additional manufacturing equipment and the addition of manufacturing space, and we may not be able to increase our capacity in time to satisfy these increases. Capacity constraints may prevent us from satisfying customer orders and result in a loss of market share to competitors that are not capacity constrained. At other times, we may suffer excess capacity and increased overhead costs, particularly if we increase our capacity to meet actual or anticipated demand, which decreases or does not materialize. Our business, operating results, and financial condition could be materially and impacted if we to align our capacity with demand for our products.
Shortages of and price increases for components, parts, raw materials, and other supplies may delay or reduce our sales and increase our costs.
Although we manufacture most of the components for our firearms, we purchase certain components and parts from third parties, including bolt carriers, rifle receivers, magazines, slides, small parts, barrels, and rifle stocks. We also purchase ammunition for product testing. Most of the major suppliers for our products are U.S.-based and provide materials, components, and parts, such as raw steel, polymer components, and metal-injected-molded components.
We have become increasingly dependent on a small number of key vendors that supply components and parts for our firearms as a result of our decision to increase our manufacturing flexibility by using third parties that can supplement our internal capacity to better react to changes in market conditions. We also use numerous raw materials, including steel, wood, lead, brass, and plastics, that we purchase from third-party suppliers to produce and test our products. The price of these raw materials may fluctuate substantially depending on a variety of factors, including demand, weather, supply conditions, transportation costs, energy prices, work stoppages, government regulation, environmental protection, and other unpredictable factors. Any of these factors may be exacerbated by global climate change. Inflationary pressures have resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future. In addition, uncertainties related to governmental fiscal policies, including increased duties, tariffs, or other trade restrictions, could result in an increase in the price of components, parts, raw materials, and other supplies we purchase from third-party suppliers. In an inflationary environment, we may be unable to raise the price of our products sufficiently to keep up with the rate of inflation, which would reduce our and cash flows.
Our inability to obtain sufficient quantities of components, parts, raw materials, and other supplies from independent sources necessary for the production of our products could result in reduced or delayed sales or lost orders, which could materially and adversely impact our operating results. Many of the components, parts, raw materials, and other supplies used to produce our products are available only from a limited number of suppliers. In most cases, we do not have long-term supply contracts with these suppliers. As a result, we could be subject to increased costs, supply interruptions, and difficulties in obtaining materials and finished products. Our suppliers also may encounter difficulties or increased costs in obtaining the materials necessary to produce the components and parts that we use in our products. The time lost in seeking and acquiring new sources of supply or our inability to locate alternative sources of supply of comparable quality at an acceptable price, or at all, could negatively impact our net sales and .
Our business is highly dependent upon our brand recognition and reputation.
We believe that maintaining a high level of brand recognition and a strong reputation are critical to our success, particularly with respect to retaining existing customers and attracting new customers.
While we have historically relied on print and electronic media advertising to increase consumer awareness of our brands to increase purchasing intent and conversion, we increasingly rely on other forms of media advertising, including social media and digital marketing. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our advertising, marketing, public relations, and promotional programs. These brand promotion activities may not be effective, and their efficacy will depend on a number of factors, including our ability to:
determine the appropriate creative message and media mix and markets for advertising, marketing, and promotional expenditures;
select the appropriate markets, media, and specific media vehicles in which to advertise;
identify the most effective and efficient level of spending in each market, media, and specific media vehicle; and
effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs.
Increases in the pricing of one or more of our marketing and advertising channels could increase our marketing and advertising expenses or cause us to choose less expensive, but possibly less effective, marketing and advertising channels. If we implement new marketing and advertising strategies, we may incur higher costs, which in turn could materially and adversely affect our operating results. Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective. We also may incur marketing and advertising expenses significantly in advance of the time we anticipate recognizing revenue associated with such expenses, and our marketing and advertising expenditures may not generate sufficient levels of brand awareness and conversion or result in increased net sales. Even if our marketing and advertising expenses result in increased net sales, the increase might not offset our related expenditures. If we are
unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our customer base could be adversely affected, and our business, operating results, financial condition, and reputation could suffer.
Consumers are increasingly using online platforms to learn about firearms. We plan to continue to expand our brand recognition and product loyalty through social media and our websites, with generation of original content. We are subject to de-platforming, whereby our ability to share information on social platforms or websites could be blocked, limiting our ability to reach our customers. In addition, we seek endorsements and support from particular sporting enthusiasts, athletes, or other celebrities for certain of our products and brands, and those products and brands may become personally associated with those individuals. As a result, sales of the endorsed products could be adversely affected if any of those individuals’ images, reputations, or popularity were to be negatively impacted. Also, our internal policies and procedures may not adequately protect us from inappropriate acts committed or alleged to have been committed by our employees or social media partners, including endorsers/influencers, in which case we could be exposed to penalties and other sanctions by the Federal Trade Commission, or FTC, or other regulatory bodies.
Poor product quality or performance, or defects in our products, could harm us.
We believe that the value of our brand depends, in part, on the value consumers place on the quality of our products. Poor product quality or performance could adversely impact the value of our brand and materially and adversely impact our business, operating results, and financial condition. In particular, we have experienced manufacturing and design issues with respect to certain of our firearms and have initiated product recalls and safety alerts in the past and may experience similar issues in the future, which may result in the initiation of product recalls and safety alerts in the future. Based on the volume of products we have shipped into the market, any future recalls, safety alerts, or product liability claims could result in us incurring significant warranty, support, and repair costs. Such incidents could harm our reputation, damage the value of our brands, and cause us to lose business, all of which could materially and affect our business, operating results, and financial condition. We generally provide a limited one-year warranty and a lifetime service policy to the original purchaser of our new firearm products.
We face intense competition.
We operate in highly competitive consumer markets. Competition is primarily based on innovation, quality, reliability, durability, price, performance, consumer brand awareness, and customer service and support. Our inability to compete in one or more of these areas could materially and adversely impact our business, operating results, and financial condition. Our competitors include major domestic and international companies. Competitive conditions could result in pricing pressures, lower sales, reduced profitability, and lower market share. Some of our competitors may have greater financial, technical, marketing, distribution, and other resources and, in certain cases, may have lower cost structures than we have that may afford them competitive advantages. As a result, they may be able to devote greater resources to the promotion and sale of products, negotiate lower prices on raw materials and components, deliver competitive products at lower prices, and introduce new products and respond to customer requirements more effectively and quickly than we can.
Nearly all of our competitors are privately held, which may give them certain competitive advantages. For example, these competitors may be less focused on maintaining high levels of profitability, which may give them more flexibility to compete aggressively on price, particularly during periods of high inflation.
We may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures.
We may seek to acquire, invest in, or sell companies, assets, or businesses, or enter into joint ventures with third parties. We may not be able to identify suitable targets or purchasers or successfully complete suitable transactions in the future, and completed transactions may not be successful. These transactions create risks, including the following:
disrupting our ongoing business, including distracting management from our existing businesses;
integrating acquired businesses and personnel into our business, including integrating information technology systems and operations across different cultures and languages and addressing the economic, political, and regulatory risks associated with specific countries;
working with partners or other ownership structures with shared decision-making authority;
obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the identification and assessment of liabilities, claims, or other circumstances that could result in litigation or regulatory risk exposure;
obtaining required regulatory approvals and financing on favorable terms;
retaining key employees, contractual relationships, and customers;
the potential impairment of assets – for example, in fiscal 2024 we incurred a $1.9 million impairment related to assets formerly utilized at the Columbia facility;
incurring substantial indebtedness to finance an acquisition or investment;
implementing controls, procedures, and policies at companies we acquire; and
the dilution of interests of holders of our common stock through the issuance of equity securities.
Mergers, acquisitions, investments, and divestitures may not be successful and may materially and adversely affect our business, operating results, and financial condition.
We may have difficulty collecting amounts owed to us.
Certain of our customers have experienced, and may in the future experience, credit-related issues. We perform ongoing credit evaluations of customers, but these evaluations may not be completely effective. We generally grant payment terms to most customers ranging from 20 to 60 days and do not generally require collateral. Should more customers than we anticipate experience liquidity issues, or if payment is not received on a timely basis, we may have difficulty collecting amounts owed to us by such customers and our business, operating results, and financial condition could be materially and adversely impacted.
For fiscal 2025, sales to one of our customers represented 14.6% of our total net sales, and, as of April 30, 2025, this customer accounted for 36.1% of our total accounts receivable. For fiscal 2024, sales to three of our customers exceeded 10.0% of our net sales, totaling 34.8%. As of April 30, 2024, two of our customers each accounted for more than 10% of our accounts receivable, for a total of 47.9%.
Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all.
Our insurance policies are subject to periodic review by our insurers and may not be renewed at all or on similar or favorable terms. Because we manufacture and sell firearms, a number of insurance carriers have decided in the past, and may decide in the future, not to insure us. For example, in the past, certain insurance carriers have chosen either to cancel our insurance coverage or not to submit proposals to insure us in areas such as auto, general liability, and products liability insurance, among others. In addition, if we or other firearm manufacturers sustain significant losses or make significant insurance claims, our ability to obtain future insurance coverage at commercially reasonable rates could be materially and adversely affected. For example, our ability to obtain liability insurance on commercially reasonable terms has been adversely impacted by the $73 million settlement that was announced in 2022 between insurance carriers representing Remington Outdoor Company and plaintiffs in the Soto v. Bushmaster Firearms
International, LLC case. Our liability insurance costs were $7.8 million, $8.4 million, and $7.8 million in fiscal 2025, 2024, and 2023, respectively.
An inability to obtain liability insurance, significant increases in the cost of the liability insurance we obtain, or losses in excess of our liability insurance coverage, could have a material adverse effect on our business, operating results, and financial condition. In fiscal 2020, we established a wholly owned captive insurance company to help mitigate these risks, but our funding of the insurance company may not adequately cover the cost of claims against us, if any.
Risks Relating to Legal Proceedings, Product Recalls, and Other Product Liabilities
We are subject to lawsuits and governmental investigations and inquiries.
We are vigorously defending ourselves in a number of lawsuits. As a result of these or future lawsuits, we may have to pay significant damages or amounts in settlement above insurance coverage. An unfavorable outcome or prolonged litigation could materially and adversely impact our business, operating results, and financial condition. Defending litigation of this nature is also expensive and time consuming and may divert the resources, time, and attention of our management.
Our products expose us to potential product liability, warranty liability, and personal injury claims, as well as litigation relating to the use or misuse of our products. These include allegations of defects in manufacturing and design, failure to warn of inherent dangers in the product itself or activities associated with the product, product performance issues, and negligence and strict liability. In addition, we could be subject to future litigation arising out of the criminal misuse of our firearms. If successful, such claims could have a material adverse effect on our business, operating results, and financial condition. Although we maintain product liability insurance in amounts that we believe are reasonable, we may not be to maintain such insurance on acceptable terms, if at all, and product liability may exceed the amount of insurance coverage available to us. Because we manufacture and sell firearms, insurance carriers may decide not to insure our products or our company in the future. In addition, our reputation may be affected by such , whether or not , including potential publicity about our products. Due to the nature of our products, we anticipate that we will continue to be involved in , including product liability cases and in the future.
We have been and may continue to be subject to governmental investigations and inquiries. Such investigations and inquiries could subject us to various sanctions, including significant civil and criminal penalties, the indictment of our company or various of our officers and employees, our being prevented from bidding on domestic military and government contracts, restriction by the U.S. Government, including by the U.S. Department of State or U.S. Department of Commerce, on exporting our products, private civil litigation arising out of the outcome of the investigations or inquiries, the diversion of time and attention of our management from normal business operations, and a negative impact on the perception of our company by investors, customers, and others. For example, in 2020 the office of the attorney general of New Jersey issued us a subpoena requesting certain business records as part of an investigation into potential of the New Jersey Consumer Act; in 2022, certain gun control activists submitted a petition to the FTC suggesting that the FTC and regulate our industry’s and advertising; and in 2022, the U.S. House of Representatives Committee on Oversight and Reform issued us a requesting certain business records as part of an into certain firearm manufacturers, including us. More recently, in 2024 certain state attorneys general announced the formation of a multistate coalition that to target the firearm industry. Responding to inquiries and , including through , is time consuming and , may our ongoing business and management from operating our business, and may us to , including raised by private .
Our business involves the potential for product recalls and product liability and other claims against us.
As a distributor of non-firearm consumer products, such as handcuffs, we are subject to the U.S. Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous, and similar laws under foreign jurisdictions. Under certain circumstances, the Consumer Products Safety Commission or comparable foreign agencies could require us to repurchase or recall one or more of our products. Additionally, other laws and agencies regulate certain consumer products sold by us, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products could be costly and damage our reputation. If we were required to remove, or we voluntarily remove, our products from the market, our reputation could be tarnished, and we might have large quantities of finished products that we could not sell. We also face exposure to product liability claims in the event that one of our products is to have resulted in property , bodily , or other effects. In addition to the risk of substantial monetary judgments, , or that may result from any governmental , product liability , or regulatory actions, such events could result in publicity that could our reputation, impact the value of our brands, and result in an increase in the cost of producing our products. Similar to product liability , we face exposure to class action lawsuits related to the performance, safety, or advertising of our products. Such class action lawsuits could result in substantial monetary judgments, related to the marketing and sale of products, and potentially our reputation.
In fiscal 2020, we formed a wholly owned captive insurance company, which provides product liability insurance to us and our subsidiaries. The product liability insurance that we carry is, in most cases, subject to large self-insured retentions for which we are responsible, and we may not be able to maintain such insurance on acceptable terms, if at all. Further, product liability claims may exceed the amount of insurance coverage. As a result, product recalls or product liability claims could have a material adverse effect on our business, operating results, and financial condition. In addition, we face other types of litigation arising out of alleged defects in our products or otherwise, such as class action lawsuits. Our insurance may not cover certain claims involving alleged defects in our products that do not involve personal injury or property .
Our product liability insurance program is an occurrence-based program based on our current and historical claims experience and the availability and cost of insurance. Our future product liability experience may not be consistent with our past experience and future claims and awards may substantially impact the costs of our insurance programs in the future.
We produce or source and sell products that create exposure to potential product liability, warranty liability, and personal injury claims and litigation.
Some of our products involve or are used in applications and situations that involve risk of personal injury and death. Our products expose us to potential product liability, warranty liability, personal injury claims, and litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or activities associated with the product, negligence, and strict liability. If successful, such claims could have a material adverse effect on our business, operating results, and financial condition. In addition, in our products could reduce demand for our products and result in a decrease in sales and market acceptance and to our reputation.
Components used in our products may contain undetected defects that are subsequently discovered at any point in the life of the product. In addition, we obtain many of our finished products and product components from third-party suppliers and may not be able to detect defects in such products or components until after they are sold. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, damage to our reputation, and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition.
Risks Relating to Intellectual Property, Information Systems, and Cybersecurity
We may be unable to protect our intellectual property or obtain the right to use intellectual property from third parties.
Our success depends, in part, on our ability to protect our intellectual property. We rely on a combination of patents, copyrights, trade secrets, trademarks, trade dress, customer records, monitoring, brand protection services, confidentiality agreements, and other contractual provisions to protect our intellectual property, but these measures may provide only limited protection. Our failure to enforce and protect our intellectual property rights or obtain the right to use necessary intellectual property from third parties may lead to our loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any intellectual property to which we have or may obtain rights may not prevent others from developing and selling competing products. In addition, our intellectual property may be held invalid upon challenge, or others may claim rights in, or ownership of, our intellectual property. Moreover, we may become subject to litigation with parties that claim, among other things, that we infringed their patents or other intellectual property rights. The defense and prosecution of patent and other intellectual property are and time-consuming and could materially and affect our business, operating results, and financial condition.
Patents may not be issued for the patent applications that we have filed or may file in the future. Our issued patents may be challenged, invalidated, or circumvented, and claims of our patents may not be of sufficient scope or strength, or issued in the proper geographic regions, to provide meaningful protection or any commercial advantage. We have registered certain of our trademarks and trade dress in the United States and other countries. We have also recorded certain of our registered trademarks with customs officials in the United States and other countries. We may be unable to enforce existing, or obtain new, registrations of trademarks in key markets. Our failure to obtain or enforce such registrations could compromise our ability to protect our trademarks and brands fully and could increase the risk of challenges from third parties to our use of our trademarks and brands.
In addition to intellectual property that we own, some of our products and services may use or include intellectual property owned by third parties. As a result, it may be necessary in the future to seek or renew licenses relating to various aspects of our products, processes, and services. We may be unable to obtain or renew such licenses in the future on reasonable terms or at all. In the past, we did not consistently require our employees and consultants to enter into confidentiality agreements, employment agreements, or proprietary information and invention agreements. Therefore, our former employees and consultants, and certain of our current employees, may try to claim some ownership interest in our intellectual property and may use our intellectual property competitively and without appropriate limitations. In addition, our acquired businesses may not have consistently required their employees and consultants to enter into confidentiality agreements, employment agreements, or proprietary information and invention agreements. Claims by such individuals may affect our business, operating results, and financial condition.
We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights.
We may become involved in litigation regarding patents and other intellectual property rights. Other companies, including our competitors, may develop intellectual property that is similar or superior to our intellectual property, duplicate our intellectual property, or design around our patents and may have or obtain patents or other proprietary rights that would prevent, limit, or interfere with our ability to make, use, or sell our products. Effective intellectual property protection may be unavailable or limited in some foreign countries in which we sell products or from which competing products may be sold. Unauthorized parties may attempt to copy or otherwise use aspects of our intellectual property and products that we regard as proprietary. Our means of protecting our proprietary rights in the United States or abroad may prove inadequate, and competitors may be able to independently develop similar intellectual property. If our intellectual property protection is insufficient to protect our intellectual property rights, we could face increased competition in the markets for our products.
Should any of our competitors file patent applications or obtain patents that claim inventions also claimed by us, we may choose to participate in a United States Patent and Trademark Office Patent Trial and Appeal Board proceeding to determine the patentability or validity of these patents because our business would be harmed if we fail to enforce and protect our intellectual property rights. Even if the outcome is favorable, this proceeding could be costly and disrupt our business.
We have filed lawsuits, and may file additional lawsuits in the future, to enforce our intellectual property rights, protect our trade secrets, or determine the validity and scope of the proprietary rights of others. This litigation, whether successful or unsuccessful, could be costly and divert valuable resources, which could materially and adversely impact our business, financial condition, and results of operations.
Interruptions in the proper functioning of our information systems or other issues with our ERP systems could disrupt our operations.
We rely on our information systems to manage our business, data, communications, supply chain, ordering, pricing, billing, inventory replenishment, accounting functions, and other processes. Our systems are subject to damage or interruption from various sources, including computer and telecommunications failures, computer viruses, cybersecurity breaches, attacks by hackers and other breaches, introduction of malware or ransomware, phishing attacks, denial of service attacks, blocking of unauthorized service attacks, vandalism, severe weather conditions, power outages, catastrophic events, terrorism, and human error, and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, fail to function properly, or otherwise become compromised or , we may incur substantial costs to repair or replace them, and we may experience of data and or in our ability to perform functions, which could materially and affect our business, operating results, and financial condition.
Our information technology systems require periodic modifications, upgrades, and replacement that subject us to costs and risks, including potential disruption to our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel or outside firms to implement and operate existing or new systems, and other risks and costs of delays or difficulties in transitioning to new or modified systems or of integrating new or modified systems into our current systems. In addition, challenges implementing new or modified technology systems may cause disruptions in our business operations and have an adverse effect on our business operations if not anticipated and appropriately mitigated.
We operate our business utilizing SAP, which is a fully integrated ERP system. We continue to implement various modules and additional usages of SAP, including in connection with the Relocation. Any new implementations or usages of SAP, including those related to the Relocation, could result in a significant disruption to our business, and any disruption could materially and adversely impact our business, operating results, and financial condition. In addition, utilizing SAP has required and will continue to require significant resources and refinement to fully realize the expected benefits of the system.
We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data .
We use information technologies to securely manage operations and various business functions. We rely on various technologies, some of which are managed by third parties, to process, transmit, and store electronic information. In addition, we facilitate a variety of business processes and activities, including reporting on our business and interacting with customers, vendors, and employees. We also collect and store data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws, regulations, and customer-imposed controls. Our systems are subject to recurring attempts by third parties to access information, manipulate data, or disrupt our operations. Despite our security design and controls and those of our third-party providers, we have in the past experienced, and may in the future become subject to, system damage, disruptions, or shutdowns due to any number of causes, including cyber-attacks, data breaches, employee error or malfeasance, power outages, telecommunication or utility , systems , service provider , natural , or other events.
Cybersecurity-related vulnerabilities may remain undetected for an extended period of time. We maintain contingency plans and processes to prevent or mitigate the impact of events arising from these vulnerabilities; however, these events could result in operational disruptions or the misappropriation of sensitive data and, depending on their nature and scope, could lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes, operational disruptions, and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including reputational damage and legal claims or proceedings, may materially and affect our business, operating results, and financial condition.
Risks Relating to Certain Business Matters and Securities Markets
Our operating results may involve significant fluctuations.
Various factors contribute to significant periodic and seasonal fluctuations in our operating results. These factors may include the following:
market acceptance of our products, including new products;
market acceptance and new product introductions by our competitors;
the timing of large domestic and international orders;
cancellation of existing orders;
changes in our sales mix;
the cost of new product introductions;
problems with our supply chain;
the volume of customer orders relative to our capacity;
timing of expenditures in anticipation of future customer orders;
effectiveness in managing production processes and costs;
transportation disruptions;
changes in cost and availability of labor and finished products, product components, and raw materials;
ability to manage inventory and inventory obsolescence;
pricing and other competitive pressures;
the effects of climate change;
changes or anticipated changes in economic, political, social, legislative, regulatory, inflationary, and health factors;
a material change in federal or state income tax regulations;
the outcome of any litigation;
adverse publicity surrounding our products, the safety of our products, or the use of our products;
changes in amount and or timing of our operating expenses; and
changes in laws and regulations that may affect the marketability of our products.
As a result of these and other factors, we believe that period-to-period comparisons of our operating results may not be meaningful in the short term and our performance in a particular period may not be indicative of our performance in any future period.
The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future.
The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future. Many factors could affect the trading price of our common stock, including the following:
variations in our operating results;
the relatively small public float of our common stock;
introductions of new products and services by us or our competitors;
the performance of our customers;
changes in the estimates of our operating performance or changes in recommendations by any securities analysts that follow our stock;
general economic, social, political, and market conditions and consumer spending patterns;
governmental policies and regulations;
investor reaction to news events;
lack of investor interest in a firearm business;
the general performance of the markets in which we participate; and
factors relating to suppliers and competitors.
In addition, market demand for small-capitalization stocks like ours, and price and volume fluctuations in the stock market unrelated to our performance, could result in significant fluctuations in the market price of our common stock. The performance of our common stock could adversely affect our ability to raise equity in the public markets and adversely affect the growth of our business.
We are subject to risks related to corporate social responsibility.
Our environmental, social, and governance, or ESG disclosures (or lack thereof), in addition to ESG disclosure criteria established by third parties, may impact our reputation. For example, public perception, including among our stakeholders, may depend, in part, on the policies and procedures we adopt and the disclosures we make, whether or not we meet third party ESG disclosure requirements (including those related to human rights) that the ESG investment community deems relevant, and whether we are perceived to fail to act responsibly in the areas on which we report. The subjective nature and wide variety of methods and processes used by stakeholders, including investors, to assess companies on ESG criteria could result in a negative perception about our ESG-related policies and practices or a misrepresentation of those policies and practices. If our stakeholders feel that we are failing to achieve progress with respect to ESG factors, or if we fail to meet ESG disclosure criteria set by third parties, our ability to attract and retain employees; the willingness of third parties to do business with us; investors’ willingness or ability to purchase or hold our securities; or our ability to access capital, could be impacted, any of which could materially and impact our business, operating results, and financial condition.
Actions of stockholder activists could cause us to incur substantial costs and divert management’s attention and our resources.
We have been, and may be in the future, subject to informal private or public inquiries and formal proxy proposals by stockholder activists urging us to take certain corporate actions. For example, in recent years, certain stockholder activists submitted proposals requesting that our Board of Directors engage a third party to conduct a human rights impact assessment. Responding to inquiries or proposals can be costly, time consuming, and disruptive to our operations and could divert the attention of our resources, including those of our management team and other employees. In addition, certain stockholder inquiries and proposals could create perceived uncertainties or concerns as to our future operating environment, legislative environment, strategy direction, or leadership, and could (i) result in the loss of potential business opportunities; (ii) harm our ability to attract or retain investors, customers, and employees; (iii) harm or disrupt our business and financial relationships; (iv) result in consumer of our
products; and (iv) cause the trading price of our common stock to experience periods of decline, volatility, or stagnation. Stockholder activists have pressured and may continue to pressure us to adopt actions that are not in the best interests of our company or our stockholders, inconsistent with the legal operation of our business, or contrary to the beliefs of our core consumers, and our reputation could be damaged if our core consumers believe that we have adopted the gun control agenda of certain activists. In February 2025, certain stockholder activists filed a stockholder derivative suit against our directors and certain of our officers. Responding to the stockholder activists’ claims has been, and may continue to be, costly and time consuming. Finally, the actions of stockholder activists may strengthen our competitors, particularly those that are privately held and not subject to these types of gun control focused stockholder activism.
The actions of stockholder activists could materially and adversely impact our business, operating results, and financial condition.
Our ability to operate our business efficiently may be adversely impacted if service providers and other businesses that permit firearm-related activities refuse to work with us.
Gun control activists have sought to engineer boycotts of firearm products by service providers to our industry, certain of which discriminate against companies involved with the firearm industry. For example, some financial institutions and insurance companies no longer provide certain services to firearm manufacturers. Gun control activists have also targeted credit card companies, transportation companies, and social media companies, among others. Further, certain law firms refuse to provide services to firearm manufacturers. For example, in 2022, we were notified by a law firm with which we had maintained a long-term relationship that it would no longer provide legal services to us. If additional service providers refuse to work with us, we would need to engage alternative service providers, which may adversely impact the delivery of important services to us and increase our costs. Further, we may be unable to locate suitable alternative service providers. The refusal of service providers and other businesses that permit firearm-related activities to work with us could have a material adverse effect on our business, operating results, and financial condition.
We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel .
Our success depends on our ability to attract, motivate, train, and retain employees with the skills necessary to understand and adapt to our customers’ continuously developing needs. The increasing demand for qualified personnel makes it more difficult for us to attract and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience. Changing demographics and labor work force trends also may result in a loss of knowledge and skills as workers with more tenure and experience retire. The market for both hourly workers and professional workers has been particularly challenging in recent years, and we have incurred higher labor costs as a result. Despite our focused efforts to attract and retain employees, our attrition rates in recent years have exceeded our historical rates, resulting in higher operating costs at certain of our facilities in the form of higher wages and higher levels of overtime pay. The Relocation was a significant contributing factor to these higher rates of attrition, as certain employees, particularly those based in our Springfield facility and former Deep River facility, left our employment to work for employers that would allow them to continue working near their homes or to work remotely. In addition to associated with a competitive labor market, we may also struggle to identify qualified candidates who are comfortable or to work for a firearm business. If we to attract, motivate, train, and retain qualified personnel, or if we experience turnover, we may experience sales, manufacturing or other operating , increased recruiting, training, and relocation costs, or other , and our business, financial condition, and results of operations may be materially and impacted.
We rely on key executive and management personnel to manage our business efficiently and effectively. The loss of these employees, particularly during a challenging market for attracting and retaining employees, could materially and adversely affect our business, financial condition, and results of operations.
Nevada law could make it more difficult for a third party to acquire us and discourage a takeover.
We are incorporated in Nevada. Certain provisions of Nevada law and our articles of incorporation and bylaws make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in our stockholders’ interest or might result in a premium over the trading price for the shares held by our stockholders.
We have identified a material weakness in our internal control over financial reporting that may, if not remediated, result in material misstatements in our financial statements.
We are responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. As disclosed in Item 9A, “Controls and Procedures,” we identified a material weakness in our internal control over financial reporting related to the accrual of certain legal expenses. A material weakness is defined as a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of the material weakness, we concluded that our internal control over financial reporting and related disclosure controls and procedures were not effective as of April 30, 2025 based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission. We evaluated the errors resulting from the material weakness and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. We are actively engaged in implementing a remediation plan designed to address this material ; however, we cannot guarantee that these steps have been sufficient or that we will not have a material in the future. If our remedial measures are to address the material , or if additional material in our internal control are discovered or occur in the future, our financial statements may contain material and we could be required to our financial statements.
I tem 1B. Unresolved Staff Comments
Not applicable.
Item 1C. Cybe rsecurity
Risk Management and Strategy
We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats. We identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods, including conducting scans of the threat environment and conducting threat and vulnerability assessments. Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats, including risk assessments, incident detection and response, end-point detection and response, network security controls, access controls, physical security, systems monitoring, a vendor risk management program, and penetration testing. We work with third parties (including professional services firms, threat intelligence service providers, and penetration testing firms) from time to time that assist us to identify, assess, and manage cybersecurity risks.
Our information security team reviews enterprise level cybersecurity risks at least annually, and key cybersecurity risks are identified, tracked, monitored, and addressed in alignment with our overall enterprise risk management program.
We utilize third-party service providers to perform certain business functions. We seek to engage reliable and reputable service providers that maintain cybersecurity programs. Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, we may review the cybersecurity practices of such provider, contractually impose obligations on the provider, conduct information security risk assessments, and conduct periodic reassessments during their engagement.
We describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us , including our business strategy, results of operations, or financial condition, under the heading “We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.
Governance
The Audit Committee is responsible for overseeing risks from cybersecurity threats, in accordance with its charter. The Audit Committee holds quarterly meetings and receives periodic reports from our Vice President – Information Technology (Chief Information Officer) concerning our si gnificant cybersecurity threats and risks, and the processes we have implemented to address them.
Management plays an important role in assessing and managing our material risks from cybersecurity threats. Our Chief Information Officer – which is the management position responsible for assessing and managing material risks from cybersecurity threats – is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Audit Committee. He has over a decade of experience leading cybersecurity oversight, and leads other members of our information security team, who have professional cybersecurity experience, training, or certifications.
We maintain a cyber incident response plan that is designed to provide a framework that will allow us to respond effectively to a cybersecurity incident. A cyber emergency response team , which includes members of our executive leadership team, manages this plan. This team meets periodically to discuss cybersecurity threat trends and related information. Our incident response processes are designed to escalate certain cybersecurity incidents to our cyber emergency response team and include reporting to the Audit Committee for certain cybersecurity incidents.
We view cybersecurity threats as a shared responsibility. All new employees with company email addresses receive cybersecurity training as part of their onboarding, as well as annual training. We also periodically publish a cybersecurity newsletter to these employees related to topics such as phishing, social engineering, and insider-threat awareness.
I tem 2. Properties
The following table sets forth information regarding our principal operating properties and other significant properties as of April 30, 2025. In general, our operating properties are well maintained, suitably equipped, and in good operating condition.
Location
Facility
Ownership Status
Maine
Houlton
Plant
Owned
Massachusetts
Springfield
Plant
Owned
Missouri
Columbia
Office & Warehouse
Leased — Assigned to a third party
Tennessee
Maryville
Executive Offices & Plant
Owned — Subject to the terms of certain real property and tax incentive agreements
I tem 3. Legal Proceedings
Information regarding our legal proceedings is discussed in Note 14 to our consolidated financial statements, which is incorporated herein by reference.
I tem 4. Mine Safety Disclosures
Not applicable.
P ART II
