The attached chart of Smith & Wesson REVENUES needs no comment. (Chart from Zerohedge.)
Want to talk about a high margin business? The official sponsor of the gold rush of 1849, Smith & Wesson (NYS: SWHC) just reported an absolutely explosive quarter.
Revenues shot up over 48% to a record $136 million. Gross sales margins were nearly 38% due to increased volume on highly profitable lines and solid relationships with suppliers. From a year ago, net income went from $2.3 million to $18.9 million. Apparently, people spent the last quarter preparing their arsenals for… well, people were preparing their arsenals.
Very few businesses can gauge their product demand by consulting the FBI, but gun companies can. The sharp increases in revenue and unit sales are directly tied to a sharp increase in FBI background checks.
The company had a $392 million backlog at the end of July, and 2013 guidance was increased, so don’t think this gun-slinging corporation is done taking names quite yet.
Think about it…just for a minute. How many bottles of water do you drink a week? How much do you use for a shower? When you flush a toilet? Wash your car? Cooking? Lattes? And my guess is your city water bill’s gone up in recent years.
The amount of water used to produce items you USE EVERY day…
Illustration is from CNNmoney
In 2010 global water generated over a half trillion dollars of revenue. Global world population will explode from 7 billion today to 10 billion by 2050, predicts the United Nations. And over one billion “lack access to clean drinking water.”
What happens in the next 40 years when another three billion people come into the world? Imagine adding 75 million people every year, six million a month, 200,000 every day, all demanding more and more water to drink, to shower, to cook, to everything. All guzzling down the New Gold that’s getting ever scarcer.
But, individuals DON’T consume the most water.
Agriculture accounts for 71%, and industry another 16% for a total 86% of all water use in the world. It takes 71 gallons to produce a single cup of coffee, due to processing the beans.
Here’s CNN/Money’s summary of the global market for all water users: Total worldwide revenues of $508 billion in 2010 … the bottled water market generated $58 billion of that total and growing fast … industry needs $28 billion for water equipment and services to all kinds of businesses … another $10 billion covers agricultural irrigation … another $15 billion in retail products like filters and various heating and cooling systems …waste water, sewage systems, waste-water treatment and water recycling systems cost $170 billion … and $226 billion for water utilities, treatment plants and distribution systems.
But, that isn’t the worst of it…
Drought puts electrical production at risk.
As illustrated above, coal is burned to heat water, which becomes steam. The pressure of the steam is used to rotate a turbine, which spins a magnet that creates electricity. The steam is then cooled back into water and pumped back out to the source. Without water, there’s no steam. With no steam, there’s no power. (Image courtesy of Tennessee Valley Authority.)
According to Philip Bump at Grist, about half of the nation’s water withdrawals every day for industry are to cool power plants. In addition, the oil and gas industries use tens of millions of gallons a day, injecting water into aging oil fields to improve production, and to free natural gas in shale formations through hydraulic fracturing. Those numbers are not large from a national perspective, but they can be significant locally. Michael Webber, associate director of the Center for International Energy and Environmental Policy at the University of Texas, finds that worrisome, given our recent water-access difficulties. (Yes, we’re talking about the drought again. Get used to it.) He wrote an editorial for The New York Times titled, “Will Drought Cause the Next Blackout?“
More from Philip Bump about how the drought could affect energy availability and costs HERE.
Many homeowners wonder whether they should regularly water their dry lawns during a drought or essentially leave them alone. A Purdue Extension lawn specialist says each option has its pros and cons.
This lawn is drought stressed. (Photo/Purdue)
During a dry season, many lawns will show initial symptoms of drought stress, Aaron Patton said. As grass loses water, its leaves become less rigid and wilt; in this stage, after grass gets stepped on, it stays “flat” rather than “bouncing back.”
The most telltale signs of drought stress, however, are the crunchy tan or brown leaves of grass that has entered dormancy; the plant is still alive, but the leaves dry up and die. This helps the plant conserve water and survive a drought.
Drought stress is most noticeable on slopes and lawns established on shallow or poor soil, Patton said.
“In order to keep your lawn green during hot and dry periods, at least 1 inch of water needs to be applied weekly,” Patton said. “However, you can keep your lawn alive with far less water.”
Homeowners can water regularly enough to avoid drought stress altogether, or they can let their lawn go dormant and water only occasionally to help it survive.
Some of the advantages and disadvantages of each option:
Watering to keep lawn green
“Water turf two to three times weekly – deeply, a good soaking, so you don’t have to water daily,” Patton said. Watering in the early morning hours is most effective; watering in the evening could encourage disease or pests.
*Advantages: Turf will stay green, aesthetically pleasing and actively growing; ground remains soft for recreation use; deep soaking will foster deep roots, which will help plants better survive a prolonged drought.
* Disadvantages: Higher water bill for those with city water; some increased risk of turf disease.
Letting turf go dormant
“Once the lawn turns brown and goes dormant, we can’t tell if a lawn is dying unless we water and wait to see the response,” Patton said. “That is why we advise to water once every two weeks with one-half inch of water once the turf goes dormant to keep plant crowns hydrated during drought. This amount of water will not green up the turf, but it will increase long-term survival during long dry spells.”
* Advantages: Avoid irrigation costs; most turf species are drought-tolerant and will survive typical Indiana droughts.
* Disadvantages: Difficult to tell when turf is getting too dry and needs water to stay alive; lawn is brown and has poor aesthetics; hard soil makes turf less usable for recreation; turf is more susceptible to injury and will not recover until rain returns; some thinning and turf death can occur if there is no rain for 4-6 weeks and the lawn in not watered.
Patton emphasized that when lawns are dry, it is important to stay off them. Mowers and other heavy equipment can cause substantial damage to vulnerable, stressed grass. Once rains return, the turf will begin to recover and grow new leaves within two weeks.
