James Debney - President and Chief Executive Officer Jeff Buchanan - Chief Financial Officer Liz Sharp - Vice President, Investor Relations

Andrea James – Dougherty & Company Cai Von Rumohr – Cowen & Company Scott Stember - Sidoti & Company Brian Ruttenbur - CRT Capital Ronald Bookbinder – The Benchmark Company

Good day, ladies and gentlemen and welcome to the first quarter 2015 Smith & Wesson Holding Corporation Earnings Conference Call. My name is Denise and I will be the operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I will now like to turn the conference over to your host for today. Please proceed.

Thank you and good afternoon. Our comments today may contain predictions, estimates and other forward-looking statements. Our use of words like anticipate, project, estimate, expect, intend, believe and other similar expressions is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding revenue, earnings per share, fully diluted share count and tax rate for future periods, our product development, focus, initiatives, objectives and strategies; market demand for our products, market and inventory conditions in our industry, growth opportunities and trends; the expected benefits of our May 2014 asset purchase and the progress and expected benefits of our Houlton, Maine facility conversion. Our forward-looking statements represent our current judgment about the future and they are subject to various risks and uncertainties. Risk factors and other considerations that could cause our actual results to be materially different are described in our securities filings, including our Forms 8-K, 10-K and 10-Q. You can find those documents, as well as a replay of this call on our website at smith-wesson.com. Today’s call contains time-sensitive information that is accurate only as of this time and we assume no obligation to update any forward-looking statements contained herein. Our actual results could differ materially from our statements today. I have a few important items to note with regard to our comments on today’s call. First, we reference non-GAAP adjusted EBITDAS on this call. Note that the reconciliation of GAAP income from operations to adjusted EBITDAS can be found in today’s filing, as well as today’s earnings press release, which are posted to our website. Also, when we reference EPS, we are always referencing diluted EPS. Finally, please note that this call references only our continuing operations. For the results of our discontinued operations, please refer to our 10-Q for the period ended July 31, 2014, which filed this afternoon. I will now turn the call over to James Debney, President and CEO.

Thank you, Liz. Good afternoon, everyone and thanks for joining us. With me on today’s call is Jeff Buchanan, our Chief Financial Officer. Later in the call, Jeff will provide a recap of our financial performance as well as our guidance outlook. Our first quarter results met our expectations and reflected continued execution of our strategy. Recently however, industry wide inventory builds combined with typical summer slowness, have yielded unfavorable channel conditions in the short term and the impact of those conditions on our second quarter is driving us to lower our guidance for the current fiscal year. Before I address that and explain how we plan to navigate the current environment, I will cover some important data points from the first quarter. Total sales and earnings per share came within our range of guidance and lower than last year. Lower sales of long guns, including modern sporting rifles or MSRs, drove 87% of our first quarter decline in net sales. This was no surprise. Adjusted mix for our first fiscal quarter declined 7.5%, while our unit sales into the domestic consumer channel for the same period declined by about 20%, both reflective of a significant decline in consumer demand for MSRs versus the prior year. It is worth noting that while we had normally used this comparison as one data point to help us determine whether we gained or lost market share in the period, current inventory levels and noise in the channel make that comparison less meaningful. Therefore, we think it is more appropriate at this point in time to rely primarily on our internal monthly analysis and key distributor feedback for that market share information, which shows we remain the market leader in handguns and MSRs. We believe that industry wide channel inventories increased across all product categories in the first quarter, the results of the channel replenishment that began after the last consumer surge in firearm purchasing. While Smith & Wesson inventory in the channel in terms of weeks cover continued to grow and remained above our preferred eight week threshold, we believe that our competitors’ inventory in the channel is significantly higher than ours. On the new product front, we launched into the channel our new M&P22 Compact, a tactical rimfire pistol that delivers the popular features of our M&P CenterFire pistol in a smaller scale version. This is a great first firearm for new participants in the shooting sports. In addition, we also joined forces with Crimson Trace, an industry leader in laser sighting systems and tactical lighting for firearms, to introduce enhanced, integrated lasers for our popular line of M&P BODYGUARD handguns. We look forward to sharing more information on the success of these new products once they’re fully introduced into the marketplace. Sales into the professional channel were $20 million and included strong quarter over quarter increases in international and law enforcement. Although sales into the professional channel are naturally lumpy because deliveries often relate to large contract wins, I’m very pleased at the recent steady growth in our international business, where we’re seeing good opportunities. We completed the vertical integration of a critical manufacturing process by acquiring the assets of our principal plastic injection molding supplier and named this new subsidiary Deep River Plastics. The acquisition was accretive to gross margins and net incomes in the quarter. We remained on track to complete in the fall the conversion of our Houlton operation to a precision machining center, an initiative that reflects our focus on profitability. In July we attended the second industry day schedule by the U.S. Army for the modular handgun system. This is a lengthy process that will likely take several years to complete. That said, we stand ready to submit our to M&P polymer pistol when proposals are requested. Lastly, we continued to return value to our stockholders through our common stock repurchases, which reduced our outstanding share count. With that, I will ask Jeff to review the financial results.

Thanks you, James. Revenue for the quarter was within our guidance at $131.9 million, down 22.9% from the prior year. Our total long gun revenue, which includes MSRs, decreased 67.2% from the prior year, while total handgun revenue decreased 3.2% due to the reasons that James mentioned earlier. Gross margin for the quarter was 37.2% as compared with 42.6% in the prior year. The decrease in margin is mostly due to lower fixed cost absorption from reduced volumes, a reduction in sales of MSRs, particularly those high price SKUs that had better gross margins and a reduction in the number of manufacturing days. Gross margin was favorably impacted by the cost savings from the products manufactured at our new Deep River Plastics facility. Operating expenses were $23.3 million, or 17.7% of revenue compared with $24.8 million or 14.5% of revenue in the prior year. Operating expenses in dollars decreased due to the reduction in management incentive and other profit related compensations expense, but increased as a percentage of revenue as a result of lower sales. Operating margin was 19.5% in the first quarter compared to 28.1% in the prior year. Net income in the quarter was $14.6 million or a fully diluted EPS of $0.26 as compared with $0.40 on the prior year. Non-GAAP adjusted EBITDAS in Q1 was $33.6 million compared with $55.2 million in the year ago period. Operating cash flow in Q1 was $10.8 million and internal capital spending was $14.6 million. In addition, we also used $24.1 million to acquire the assets related to Deep River Plastics. We have reduced our capital spending downward for the remainder of the current fiscal year. We now estimate that total capital spending in fiscal 2015 will approximate $35 million. Most of this amount relates to I.T, enhancements to manufacturing flexibility and tooling for new products. So turning to the balance sheet, we ended the quarter with $83.5 million in cash, no borrowing on our line of credit and $175 million of outstanding notes issued in two tranches. As a reminder, the first tranche is $100 million. It states interest at 5% and 7% and 8% is due in 2017, and has a no call provision expiring 10 months from now. The new second tranche of $75 million was just issued by us during this quarter. It states interest at 5% is due in 2018, and has a two year no-call provision that expires in 2016. The proceeds from this new second tranche will allow us to consider various opportunities such as vertical acquisitions or additional share repurchases. As a reminder, we also have an unused $75 million line of credit. During the first quarter, we repurchased 2.1 million shares of our common stock for $30 million. Since December 2012, we have repurchased a total of 14.4 million shares of our common stock at an average price of approximately $11.50 for a total stock buyback of $165 million and a reduction in float of 21.7%. So turning now to our financial outlook. Because of channel markets conditions, the details of which will be discussed by James, we are lowering our overall guidance for the year. We believe the biggest impact of these rapidly changing channel conditions will be felt in the second quarter, with a return to a more normalized environment in the second half of our fiscal year. Thus, we estimate that revenue will be between $100 million and $110 million for the second quarter which would yield EPS of between $ 0.04 and $ 0.08. For the full fiscal year, we estimate revenue will be between $530 million and $540 million and the EPS will be between $ 0.89 and $ 0.94. We believe that the results within this range would generate a cash balance at the end of the fiscal year in excess of $125 million. These estimates are based on our current fully diluted share count of 55.5 million shares and we expect our effective tax rate will be approximately 37% for the rest of the current fiscal year. Back to James.

Thank you, Jeff. Our strategy at Smith & Wesson is to not simply react to the market, but rather manage our business for the long term in a manner that gives us the ability to take market share, independent or whether or not the market is growing or shrinking. That strategy drives the way we manage our company from new product development, to operations management, to budget planning. Importantly, it will help us to manage our business in the coming quarters as we address the impact of unfavorable near term challenges in the consumer firearms channel. Based upon recent adjusted NICS background checks, it appears the consumer demand is trending to its normal seasonal pattern. Summer is the typical low point in our industry as consumers turn to vacations and outdoor recreational activities rather than the shooting sports. Consumers simply buy fewer firearms during the summer months. The impact of this seasonality on our sales activities during this quarter is more pronounced than it was last year when significant inventory replenishment in the channel was underway and we were operating our facilities at full capacity. Despite what we believe is a strong consumer appetite for our products, including MSRs, we are not yet seeing that strength translate to pull through at distributor and retail level. Their inventories are currently overcrowded with heightened levels of competing products. This is especially true with regard to MSRs, which is somewhat surprising to us as some competitors have apparently chosen to drive large volumes of product into the channel independent of consumer need. This situation translates to an environment where high inventories across the channel reflect an unfavorable mix that includes a number of lesser brands and hard to sell products. As a result, distributor and retailer ability to buy is diminished. And as I said earlier, this is compounded by the fact that we are at a seasonal low point in our industry when consumer purchase activity is typically slow. This is the primary reason we are lowering our guidance. As I mentioned before, we worked closely with our distributors throughout the recent surge to make sure their orders accurately reflected their needs. As a result, we believe many distributors and retailers are holding less Smith & Wesson inventories than they are competitors’ inventory, despite our being the market leader in handguns and MSRs at retail. In fact, we only have approximately 139,000 units in distributor inventory at this time. During the last year, the two step distribution channel made up about 72% of our consumer revenue, the balance of our base business being direct to retail and sales to the professional channel. The fact that some competitors products are over-represented at distributor and retail locations, combined with data indicating that we continue to lead the market in most major categories, leads us to conclude that this is a temporary situation and that we will feel the bulk of the impact on revenue in our fiscal second quarter. We believe that ultimately the consumer will drive distributors and retailers to rebalance their inventories to better match consumer demand. Moreover, we believe that we will see strength in orders for our products when channel inventories clear and distributors and retailers have greater ability to buy our products. That said, the time frame for that correction remains somewhat uncertain and because of that uncertainty, we have chosen a conservative path. In addition to lowering our guidance for the current fiscal year, we will remain vigilant in managing our business to maximize our cash position, minimize our costs, and continue to invest strategically in new products and infrastructure to support our future growth. For quite some time, our growth strategy has incorporated increasing flexibility in our manufacturing model. That includes the outsourcing of certain components and the maintenance of a temporary workforce. As I have said before, this approach allows us in unfavorable market conditions to dial back the outsourcing and optimize our internal assets thereby minimizing overhead absorption issues during a period of revenue decline. Now is the time to dial back these outsourcing arrangements and we have begun that process. We are confident that our operational and financial strength and flexibility will help us to successfully navigate the current environment while inventory and mix issues in the market place are resolved. We continue to believe that our industry is in the midst of a long-term and sustainable growth trend, evidenced by the return of NICS background checks to their healthy pre-surge levels. Our objective remains to grow faster than the market by taking share. With that, operator, please open up the call for questions from our analysts.

(Operator instructions) Our first question comes from Andrea James with Dougherty. Please proceed. Andrea James – Dougherty & Company.: Are you guys seeing competitor discounting in the channel that’s continuing to push competitor product over yours and do you think you’ll follow suit with some pricing changes as well?

Certainly there’s a higher level of discounting going on than we would normally see. What that will do next, I just don’t know. That is not our approach to business. We don’t intend to go out and do wild discounts with the consumer at all. Andrea James – Dougherty & Company.: Okay. And then how do you -- I guess it sounds like you are counting on the consumer to pull the Smith & Wesson product by request, because it looks like in order to offload some of this extra inventory, the retailers might be pushing product that’s not Smith & Wesson. And I was just wondering if we should expect any change to marketing strategy or some way – I guess how should we look for that -- you are going to drive that from the consumer end?

You have to remember we remain the market leader. All our reporting tells us so. So, we are very confident that that’s going to continue. We have the highest aided and unaided awareness in the industry. So we’re right in the forefront of the mind of the consumer as they consider this purchase. Yes, we will feel a little bit more pressure from competitors’ products as retailors look to move them as quickly as possible so they can open up dollars to buy and buy products such as ourselves that are in demand and they know that they can turn those around quickly into cash with the consumer. Andrea James – Dougherty & Company.: Thank you. And one final. Do you see any sort of bump when -- so you had a competitor who had a recall over the summer? Does that filter through? Do you actually see any bump in your business when that sort of thing happens? On a -- the competitor recalled -- it was a 9 millimeter.

Are you talking about the Remington R51? Andrea James – Dougherty & Company.: Yes.

No. We didn’t see anything there.

Our next question comes from Cai Von Rumohr with Cowen & Company. Please proceed. Cai Von Rumohr – Cowen & Company: Thank you so much. So guys, your inventory went up a fair amount in the first quarter. Could you give us some idea of kind of what’s you plan to control that? Are going to cut back production? Is a plan to cut it back here in the second quarter? How should we think about that?

Hi Cai. Yeah, we put our plan together to reduce our inventory internally. We definitely like to see overall and total in a range of around $75 million to $80 million. We’ll keep our finished goods a little bit higher, because you have to remember we have a direct retail component to our business to serve those big boxes and some of the other independent retailers. That’s very important to us. In terms of timing, we’re looking to work that down over the balance of the fiscal year. The reason for that you may say why so long? Well, again if there’s an acceleration in the market and we’ve seen that happen before, we want to be ready for that as well. So we’re remaining as flexible as possible, but certainly as Jeff said, we’re giving a projection on cash now for that reason. Cai Von Rumohr – Cowen & Company: Okay, great. And you mentioned that your inventory in the channel cover is higher than you would like, but lower still than the overall channel. Could you give us any color on where is -- do you feel you inventory is in the channel and approximately where the overall channel is?

Cai, you have to remember, we look at it in terms of weeks covered. So really it’s snapshot in time. So, we’re in the seasonal summer slowdown so velocity of product moving through the channel is slow and as I said it’s compounded by the level of competitor’s inventory we are seeing out there. You will see us above our eight weeks cover, but if you just look at it in terms of units and you do the math -- we’ve given you the components of the formula, so we have 139,000 units. If 72% goes through two steps when it comes to the consumer channel, that helps you draw comparisons against other manufacturers’ inventory. So for me, I’m not concerned about 139,000 units in the channel. If you think about how many units we’re doing in total now, and that’s not something we’ll disclosing obviously today, but significantly more than 139,000 units. Cai Von Rumohr – Cowen & Company: Okay, great. Then a house keeping issue. Could you may be give us sort of what does your assumption assume approximately regarding gross margin, operating expenses, tax rates and interest expense?

Hi Cai. So basically, we typically don’t give you a gross margin actual guidance. We just give top and bottom, but from the OpEx standpoint, we think OpEx will probably be approximately $25 million the rest of the year. Now, the tax rate sits at 37%. This quarter the numbers that we reported this quarter are a good approximation of the interest. Let me see what else there. The shares are about 55.5 million for the year. Obviously the gross margin is going down. You were just talking about inventory, but as we do scale back production and reduce the outsourcing, a couple of things you’ve got to remember. It takes a while to scale back the outsourcing. It takes a while to stop all the parts that are coming in, but we want to focus on reducing inventory. So you’re going to suffer a temporary reduction in your gross margin as it’s more important to reduce your inventory than it is to maintain your gross margin. Cai Von Rumohr – Cowen & Company: Absolutely. So the 55.5 million shares you had 56.1 million this quarter, 56.5 million last quarter and you bought 2.1 million and that was back-end loaded. Was there extra issuance I’m missing? I would have thought it would have been below 55.

Just the weighted average and obviously it includes some stock issuances for compensation plans. Cai Von Rumohr – Cowen & Company: Okay, great. And then so in terms of -- normally you should be -- your fourth quarter is your strongest, but your third tends to be -- tends to have fewer manufacturing days. Should we assume an extreme hockey stick year? You’ve told us roughly where the second quarter is going to be. Should we assume, I assume the third is better than the second and the fourth is better than the third, but given the seasonality for that third quarter, should we assume that it’s somewhat better but the fourth quarter is really a whole lot better?

A couple of things. The production days although they impact the gross margin because of absorption, when you are not at full capacity, they don’t really impact your ability to sell revenue. In addition if you have inventory you can sell because we do have -- we have finished goods inventor. We can sell that. What we said is that the second half of the quarter returns to what we were or the normalized rate that we were on before. It is a hockey stick, but I don’t think it’s right to characterize as an extreme from hockey stick. Quarter three is certainty we think going to be quite a bit better than quarter – quarter three is going to be quite a bit better than quarter two and like you said quarter four is always our best quarter. It’s just the way the industry works. Cai Von Rumohr – Cowen & Company: Got it. Last one you didn’t mention hunting rifles. I assume they got impacted too, but less so than the MSRs.

That’s correct Cai, less so, but remember it’s still a relatively small piece of business for us. It’s something, we look to the future as a great vehicle for the company, but we are not in the position yet.

Our next question comes from Scott Stember with Sidoti & Company. Please proceed. Scott Stember - Sidoti & Company: You gave some commentary that obviously it’s tough with the inventory correction going on right now industry wide to gauge how your market share is doing versus the competition, at least through your numbers coming out. And you said that you had some other internal metrics that you look at. Without giving away too much information, is there anything that you could just give us so we can have a better comfort level that you guys are still the leaders out there taking share particularly in some of these concealed carry smaller pistol segments?

Sure, I can describe the report we do. We’ve been doing it for over three year now. It’s run by a third party who we contract to do it. So it’s independent of us and they provide that report every month. And obviously we do analysis of that report. We’ve got a lot of history now there and we look at the trends closely as well and we overlay with NICS and so on. We feel we’ve got a pretty good feel for what’s going on there, well a very good feel for what’s going on there and gives us a lot of confidence that we are maintaining our leadership position when it comes to handguns and modern sporting rifles. When you focus in on concealed carry, yes we can see into the detail, how we are doing there as well in terms of our Shield products and our BODYGUARDS and so on. And then we also get a report from one of our distributors who does a very good job of collecting the same data from different independent retailers. And our report does focus on independent retailers who by far make up the bulk of the trade when it comes to firearms with the consumer. So one of our distributors does exactly the same thing. They did a very good job as well and we use that to validate what we are seeing in our own third party process as well. Again we are getting validation at the same time. So we feel very confident about it. Scott Stember - Sidoti & Company: Okay, and is it the validation or your comfort level in these reports that you have that gives you comfort that the back year for the year will be much better than the first half of the year?

I think it strongly positions us, yes. As we look at the balance of the fiscal year to be the market leader in handguns which is by far the healthiest part of firearms at the moment overall is a great position to be in. With the strength of our brand and our product portfolio, wow you can wish for a better springboard as we look to the future. Scott Stember - Sidoti & Company: Okay, got you. And I missed Jeff, you talked about the share repurchases. How much do you have left under the most recent $30 million authorization or $100 million authorization that you have?

Actually we are done with all of our authorizations right now. Under the first tranche of the bonds, 5 we cannot do a stock buyback or dividend until after the end of the fiscal year. Scott Stember - Sidoti & Company: Okay, got you. And are there any ways if the share price continues to remain at attractive levels or that you deem them to be at that level, do you have things that you can do to get around those tranches or to talk with the buy holders.

Yeah. You can talk to bond holders. It just depends. They usually charge a rather hefty fee to change a covenant like that. As usual the analysis will be an analysis of the fee that you have to pay to loosen up that covenant versus the stock price and the benefit that you are getting and also what else you could spend your cash on. We did do the second tranche of the bond this summer and we have discussed other vertical acquisitions as possibilities. If and again I said that we are going to have over $125 million of cash. We estimate after the end of the year. We do, we have option but it]s just as usual we’ll grid it in, into our analytics about the best use of our cash whether it’s buying back our stock or investing in a vertical integration opportunity or something else.

(Operator Instructions) our next question comes from Brian Ruttenbur with CRT Capital. Please proceed with Sir. Brian Ruttenbur - CRT Capital: First question is just on the gross margins on the year. Can you talk about that, how you see it shaking out quarterly and yearly?

We typically don’t give the details of the gross margins but you do the math you can figure that will probably not add a marble that we have. I put out there like numerous times the marble being 37% to 41%. But as I was talking to [Kai 00:03:04] when a slowdown happens like quickly and you’ve got to focus on things like reducing inventory then you don’t make as much you lose absorption. It takes a while to and shut off expenses. And so the second quarter especially will have lower gross margin then we’ll start to recover in Q3, in Q4 up towards the lower end of our model. Brian Ruttenbur – CRT Capital Group: Okay. Thank you. The other question I had was about the competition out there. There's a lot of small manufacturers and they must be getting hit harder than you. Is there a move in terms of those manufacturers to try and salvage something by coming to you or to some of the competitors out there? Basically putting the for sale sign up? Are you seeing more of that? Or are you not?

No, we are not really seeing much of that at all to be practically honest. It’s tough to sell your business in a time like this and really attract the valuation that you may have dreamed about that one time. If you think of the typical entrepreneur right now he’s probably looking at last year going, well I’m going to get it back up to last year and then I’m going to sell it. Brian Ruttenbur – CRT Capital Group: Right, right. Last question -- ammo? I don't think it's been brought up too much, but what are you seeing in terms of ammo and how is that impacting you guys? Is it getting better out there?

Certainly what we are hearing is that availability of CenterFire ammo has improved. That can fluctuate obviously though, but we do hear that which is good news. We do hear that 22 rimfire ammunition is still very difficult to come by but people are managing to purchase it. A friend of mine just purchased some recently. He’s very excited about that. That’s still a little bit of a headwind the part of our business. But again we see that improving in the future.

Our next question comes from Ronald Bookbinder with Benchmark Company. Please proceed Sir. Ronald Bookbinder – The Benchmark Company: What didn't you see in June when you gave guidance that you now see? Is it just the build in inventory or is it some sort of mix shift in revenue?

Ron, the big surprise is the competitive inventories but that’s where we’ve really, really worked hard on in the last 30 to 45 days to understand a lot better. As we see the situation changing we have to take a deeper dive than we normally were and that’s when we find that competitor’s inventory is way higher than our prior estimate. That’s not surprise. Now in terms of our own inventory as you know we watch it all the time very, very closely. We were on weekly reports on that. That’s one of the reasons we’ve given our unit inventory that we see with our two step distribution partners right now. You can see it. It’s a pretty low number and if we had any faith the number we are not concerned about. As we sample retail inventory for our products again we don’t see much to be concerned about. There’s some hot spots out there but nothing in that causes me any heart burn. It is the competing products and therefore that’s going to change the behavior and the mindset temporarily of the independent firearms retailers and even some of the big boxes as they sort through that and address their inventory mix which ultimately is heavily influenced by the consumer who’s desire such as Smith & Wesson and MMP and so on is high. They know they have to keep buying our products over the competition the problem is that they’ve got inventory is real hard to sell brands and product types. Ronald Bookbinder – The Benchmark Company: But given how hard it is to slow down the inventory, as you would cause deleverage -- I'm talking the industry-wide -- or that if you are using outsourcing, you could damage the relationships there. Why do you see the inventory coming back down industry-wide in the back half of the year as quickly as you do?

Because you have to believe, okay the belief that manufacturers have finally put the brakes on. Okay, overruling the industry. And with the timing coming up where you are going to answer one of the busiest seasons for resale fee. You’ve got hunting, full hunting season, then you are into October, November and December when you check on Nick that’s usually the highest levels of consumer activity that we see. You’ve got to be confident for those two reasons, the brakes are being hit. We are hitting the brakes and we have the most desirable products and we coming into the busiest seasons. If I’m selfish which I am when it comes to business then I think we are going to be in a great spot. Ronald Bookbinder – The Benchmark Company: Okay. And how do you feel about the mix of Smith & Wesson's inventory?

I still got some areas of concern but overall pretty good. For example I think I’ve got a good mix of inventory when it comes to the hottest products, the concealed carry, which is important because we don’t want to lose out in terms of distribution or our place at resale for highly desirable products such as small frame revolvers, our bodyguard, handguns, our Shield 9 and 40, our M&P 15s four, our 1911s and so on. I feel very good there. I’ve got a couple of other spots in MSRs where I’m not so happy. But again MSRs as we know we have always viewed it as opportunistic not strategic. We are strategically focused in the handgun areas, I speak of the M&P polymer pistol family. The MSRs as I said they’ve been opportunistic, they are the first ones to turn post surge once inventory has been replenished. But still there even though the market is a lot smaller we remain the market leader. When it returns overtime which we are very confident that it will we’ll be again very strongly positioned in our market leadership position and we’ll be able to leverage that. Ronald Bookbinder – The Benchmark Company: And lastly, you've put a lot of work into building your outsourcing platform, given the way that you are pulling back on production, especially leaning on the outsourced production. Do you feel that could damage your relationships there? That when you need them in the future, they might have moved on to working with some other partner?

We’ve been very subtle here so the ones that we view as strategic partners which are key to our future growth. Okay, they are still doing some production for us. Even though we’ve dialed them down significantly they are still doing work for us and they also have other customers. They still remain financially viable going forward. And we hope to be able to turn them back up in the future and that’s what we believe that we will be doing.

We have no further questions. I will now send the call back over to management for closing remarks. Please proceed.

Thank you operator, I want to thank the entire Smith & Wesson team for maintaining their focus on delivering results. Thank you everybody for joining us today and your interest in our company and we look forward to speaking with you next quarter.

This concludes the day conference. You may now disconnect. Have a great day every one.