Actually, I am trying to determine if it is. No one responded to my earlier post about it. If it is for a big acquisition, then it is a big deal to me. It is all too often the case that acquisitions are driven by management's desire to aggrandize itself. Very often the anticipated benefits do not materialize. Even when they do, it is common that the acquiring company paid way too much.
I think they will only take on an acquisition if the multiples are acceptable, say under 5x. As to financing such acquisition, they will either assume existing notes, issue notes or pay cash. The company has been very deliberate about reducing shares recently spending $35 million in share buybacks AND they exchanged all of their convertible debt in 2011. All good moves for the shareholder.
I am going to give Debney credit here, in making wise decisions. When it comes to an acquisition, my thinking it will be more in line with increased capacity...perhaps with some of the suppliers who had come "On line" with them to augment production (actually outsourced to boost production). The prior history with Thompson Arms and how that failed to work out I would find prohibitive now for Smith and Wesson. I recall from the last Earnings Conference call that he was staying focused on their "Core" gun business going forward, with emphasis on the M & P line that seems to be working very well for them. His comment, at least to me, seems that he is more concerned with viable moves forward when it comes to adding capacity. One thing is for sure...he played his cards very close to the chest during that part of the Conference Call when asked how they were increasing their production. He stated he could not tell him, due to competitive advanatage....it really cracked me up. I don't think he really cares for that one analyst Scott Haman (?) . But that is for another discussion.
So yes to an acquisition...but nothing significant.