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Sm It H & Wesso N 2 0 11 an N Ual Repo SMITH & WESSON 2011 ANNUAL REPORT WESSON 2011 & SMITH 2100 Roosevelt Avenue Springfield, MA 01104 smith-wesson.com 1-800-331-0852 Overview Fiscal 2011 provided us with a variety challenging primarily because of lower Business Outlook of successes as well as challenges. levels of government and corporate In fiscal 2012, we plan to focus on Our firearm business remained strong capital funding, as well as the pres- growing our presence in the consumer despite the conclusion of a period of ence of price-focused competition. and professional markets. Product heightened consumer demand which Accordingly, our efforts shifted toward innovation remains a mainstay of our began in fiscal 2009. We introduced reducing costs and developing and firearm business and will fuel our and launched a number of new prod- deploying new products to address growth in fiscal 2012. We have ® ucts, including our BODYGUARD broader customer requirements. We begun shipping our new Governor pistols and revolvers designed for believe we are taking the necessary revolver, a product designed espe- TM concealed carry; our M&P15 Sport actions to align this business with cially for consumers seeking home rifles, which helped to re-ignite current market conditions. protection. Both our Governor and demand in our sporting rifle category; BODYGUARD products have been BOARD OF DIRECTORS EXECUTIVE OFFICERS LEGAL COUNSEL ® and our Governor revolvers designed Fiscal 2011 Financial Highlights extremely well received, and we look for personal protection, which began Total company net sales were $392.3 Barry M. Monheit, Chairman Michael F. Golden Greenberg Traurig, LLP forward to delivering these innovative Chief Executive Officer, Earth 911, Inc. President and Chief Executive Officer 2375 East Camelback Road shipping just after the close of fiscal million, slightly below the prior fiscal and highly regarded products to the Suite 700 2011. In addition, our entry into the year. Gross profit margin was 29.5% consumer channel throughout the Robert L. Scott, Vice Chairman Jeffrey D. Buchanan Phoenix, Arizona 85016 Private Investor Executive Vice President, bolt-action rifle category with the compared with 32.4% for the prior year. In the coming year, we will con- ® TM Chairman, National Shooting Chief Financial Officer, and Treasurer T/C Venture helped to deliver fiscal year. In fiscal 2011, we deter- tinue to innovate, both in firearms Sports Foundation strong growth in our hunting rifle mined that the goodwill and certain and in perimeter security, while we Governor, Sporting Arms P. James Debney INDEPENDENT auditor business. We completed the year with long-lived intangible assets related and Ammunition Institute Vice President maintain our efforts toward delivering President, Firearm Division BDO USA, LLP strong manufacturing performance to our acquisition of Universal Safety enhanced efficiencies across all of Michael F. Golden 100 High Street in our firearm division, highlighted by Response were impaired because of our operations. Director Barry K. Willingham Boston, MA 02110 record fourth quarter sales and units changing market conditions. There- President and Chief Executive Officer Vice President (617) 422-0700 Smith & Wesson Holding Corporation President, Security Solutions Division shipped, and backlog that more than fore, we recorded non-cash impair- In closing, we want to thank our many doubled compared with year-ago ment charges of $90.5 million related employees whose effort, dedication, Robert H. Brust Ann B. Makkiya levels. These achievements reflected to our security solutions division. and commitment to excellence has Director (Joined July 2011) Vice President, Secretary, TRANSFER AGENT growth in a number of our firearm Operating expenses were $196.3 and Corporate Counsel made Smith & Wesson one of the John B. Furman Interwest Transfer Company product lines, driven partly by demand million, or 50.0% of sales, compared most highly regarded brands in the Director Melinda Orth for our new BODYGUARD firearms with operating expenses of $89.1 world today. Consultant 1981 East Murray Holladay Rd., Suite 100 and driven partly by a strategic price million, or 21.9% of sales, in fiscal INVESTOR INFORMATION Salt Lake City, UT 84117 Mitchell A. Saltz (801) 272-9294, Ext. 15 repositioning that we conducted 2010. Excluding the impairment Director Elizabeth A. Sharp during the fiscal year. As we con- charges described above, operating Chairman, Earth 911, Inc. Vice President, Investor Relations Chairman and Managing Partner, (480) 949-9700, Ext. 115 cluded the fiscal year, we began to expenses for fiscal 2011 would have Michael F. Golden Southwest Capital Partners consolidate our Thompson/Center been $105.8 million, or 27.0% of President and Chief Executive Officer, Director Arms operations into our Springfield, sales. Net loss was $82.8 million, or I. Marie Wadecki Massachusetts facility, an action $1.37 per diluted share, compared Director designed to deliver enhanced effi- with net income of $32.5 million, or ciencies and gross margins across $0.53 per diluted share, a year ago. Statement Regarding Forward-Looking Information The statements contained in this 2011 Annual Report may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor our firearm business. The net loss for fiscal 2011 included created thereby. Such forward-looking statements include, but are not limited to, statements regarding our ability to deliver enhanced efficiencies and gross margins across our firearm business from the consolidation of our Thompson/Center Arms operations into our Springfield, Massachusetts facility; our belief that we are taking the necessary actions to align our security solutions business with current market conditions; a $1.44 per diluted share negative Barry M. Monheit our plan to focus on growing our presence in the consumer and professional markets in fiscal 2012; our belief that product innovation will remain a mainstay of our firearm business and will fuel our growth in During fiscal 2011, we rebranded our impact of the impairment charges fiscal 2012; our anticipation of delivering our Governor® and BODYGUARD® products to the consumer channel throughout fiscal 2012; and our belief that in the coming year, we will continue to innovate, both Chairman of the Board in firearms and in perimeter security, while we maintain our efforts toward delivering enhanced efficiencies across all of our operations. We caution that these statements are qualified by important factors that security solutions division under the described above. We had $58.3 could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include the demand for our products; the costs and ultimate conclusion of certain legal matters, including the DOJ and SEC matters; the state of the U.S. economy, general economic conditions, and consumer spending patterns; speculation surrounding increased gun control and fears of terrorism and crime; globally recognized Smith & Wesson million in cash as of April 30, 2011, our growth opportunities; our anticipated growth; our ability to increase demand for our products in various markets, including consumer, law enforcement, and military channels, domestically and internationally; brand. While that action was well no borrowings under our $120.0 the position of our hunting products in the consumer discretionary marketplace and distribution channel; our penetration rates in new and existing markets; our strategies; our ability to introduce new products; the success of new products; the success of our diversification strategy, including the expansion of our markets; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in received, the environment in which million credit facility, and working our reports filed with the SEC, including our Form 10-K Report for the fiscal year ended April 30, 2011. this business operates remained capital of $81.3 million. We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ¥ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 2011 Commission file number 1-31552 SMITH & WESSON HOLDING CORPORATION (Exact Name of Registrant as Specified in Its Charter) Nevada 87-0543688 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 2100 Roosevelt Avenue Springfield, Massachusetts 01104 (800) 331-0852 (Address including zip code, and telephone number, including area code, of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Common Stock, Par Value $.001 per Share Nasdaq Global Select Market Preferred Stock Purchase Rights Nasdaq Global Select Market (Title of Class) (Name of Each Exchange on Which Registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes n No ¥ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes n No ¥ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¥ No n Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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