13 fewer production days in current quarter explains drop in sales
Reading the transcript of the conference call, SWHC continues to operate at full capacity but the installation of a new computer system along with seasonal factory shutdown means there will only be 50 days oif production in the current quarter compared to 63 days last quarter. Gun permit applications have also increased recently and the company sounds very optimistic going forward. Company also will continue to aggressively buy back shares since so few were tendered recently. After reading some news headlines talking about how the market has turned, I was ready to dump my shares. After reading the CC, I see the company's business and outlook remains strong. I'm holding my shares and may well add more:
From the CC:
So turning now to our guidance for the second quarter. We continue to see strong pull for a majority of our products portfolio. Therefore, this second quarter estimate is once again mostly based on our capacity. Our second quarter typically has a reduced number of manufacturing days because of our 2-week planned factory shutdown each summer. This year, production days in Q2 will be lower by an incremental 8 days as a result of the SAP conversion. Specifically, production days in Q2 will be approximately 50. As a comparison, there were 63 production days in Q1, and we are planning for 57 days in Q3, and 63 days in Q4. We, therefore, expect that Q2 will be our lowest revenue and lowest gross margin quarter in fiscal '14.