Michael Golden – President and Chief Executive Officer John Kelly – Chief Financial Officer

Paul Swinand – Stephens, Inc. Cai von Rumohr – Cowen & Company Reed Anderson – D.A. Davidson & Company Chris Krueger – Northland Securities

Welcome to the fourth quarter and full fiscal 2008 Smith & Wesson Holdings Corporation earnings conference call. (Operator instuctions) I would like to turn the call over to Liz Sharp, Vice President of Investor Relations.

Thank you, and good afternoon! Before we begin the formal part of our presentation, let me tell you that what we are about to say as well as any questions we may answer could contain predictions, estimates, and other forward-looking statements. Our use of words like project, estimate, forecast, and similar expressions is intended to identify those forward-looking statements. Any forward-looking statements that we might make represent our current judgement on what the future holds. As such, those statements are subject to a variety of risks and uncertainties. Important risk factors and other considerations that could cause our actual results to be materially different are described in securities filings including our forms S3, 10-K, and 10-Q. I encourage you to review those documents. A replay of this call can be found on our website later today at www.smith-wesson.com. This conference contains time-sensitive information that is accurate only as of the time hereof. If any portion of this presentation is rebroadcast, retransmitted, or redistributed at a later date, we will not be reviewing or updating the material content herein. Our actual results could differ materially from these statements. Our speakers on today’s call are Mike Golden, President and CEO, and John Kelly, Chief Financial Officer, and with that I’ll turn the call over to Mike.

Thank you Liz, and thanks everyone for joining us. Let me give you the agenda for today’s call. First, John will review our financial results, then I will share my thoughts with you regarding our performance for the quarter as well our strategy and outlook for the future. After that, we’ll open up the call for questions from our analysts. Go ahead John.

Thanks Mike. Sales for the year ended April 30, 2008, were $293.3 million, up $59.1 million or 25.2% increase over sales of $234.8 million for the year ended April 30, 2007. Firearm sales increased by $53 million, or 23.9% over the previous year. Net income for year ended April 30, 2008, was $9.1 million or $0.22 per diluted share, compared with $13 million or $0.31 per diluted share for the year ended April 30, 2007. $: Gross profit for the year ended April 30, 2008, increased by approximately $16 million over the previous year. On a quarterly basis, gross margins of 30.6% for the quarter of fiscal 2008 showed dramatic sequential improvement over gross margins of 25% for the third quarter of fiscal 2008. Gross margins as a percentage of sales and licensing was 31.2% in fiscal 2008, compared with 32.3% in fiscal 2007. Gross margin was adversely impacted by approximately $8.9 million in promotional costs and $2.6 million in unabsorbed fixed costs related to plant shutdowns, a 3-week shutdown at our Springfield facility in the third quarter and a 1-week shutdown at our Rochester facility during the fourth quarter. Historically, we have always scheduled a 1-week holiday shutdown in Springfield during the third quarter. This year, that shutdown was extended by 2 additional weeks to reduce inventories. Cost of goods sold for the year ended April 30, 2007, included $2.7 million and increased cost related to the effects of purchase accounting on Thompson’s inventory. Operating expenses for the year were $68.2 million, $16.3 million higher than fiscal 2007. Approximately $13 million of the increase was attributable to a full year of Thompson operating expenses. As a percentage of sales and licensing, operating expenses were 23.1% compared with 21.9% fiscal 2007. Operating expenses also included $4.1 million in amortization of acquisition related tangibles, compared with $1.6 million in fiscal 2007. Capital expenditures for fiscal 2008 totalled $14 million, approximately $1.7 million lower than the capital expenditures for fiscal 2007. Majority capital expenditures were related to new product introductions, expansion of our pistol capacity, and process improvement. Free cash outflow for the year was $7.9 million. Cash flow was adversely affected by higher inventory levels. Inventories peaked at $56.5 million in November 2007, ended the year at $47.2 million, $15.1 million higher than inventory levels of April 30, 2007. On a positive note, during the fourth quarter, spending decreases and inventory management drove significant improvement in the balance sheet. Short-term borrowings were reduced by $12.1 million in the fourth quarter to $7 million. We reduced inventories by $4.3 million even though our year-end inventory included two large international orders which are awaiting shipment. Reducing inventories will remain a focus for us in fiscal 2009. Free cash flow was a positive $13.1 million for the fourth quarter of fiscal 2008, compared with $565,000 in the fourth quarter of fiscal 2007. In May, we completed a registered direct offering of 6,250,000 shares of common stock which yielded net proceeds of $31.9 million and allowed us to repay the $28 million bank loan that financed a portion of the Thompson/Center acquisition. In conjunction with this repayment, we retired with $70 million acquisition line of credit. Covenants within the convertible debt agreement limit debt including open lines of credit to three times trailing 12-month EBITDA. Retirement of this line of credit gives us more options of financing future acquisitions. We expect to incur a $485,000 non-cash charge in the first quarter fiscal 2009 for unamortized debt acquisition cost as a result of our decision to terminate the acquisition line of credit. A combination of strong fourth quarter cash flow and the equity offering provide us with a strengthened balance sheet as we enter fiscal 2009. In fiscal 2007 and 2008, we issued restricted stock units to our officers. The RSUs vest evenly over a 3-year period. As they vest, the delivery of one third of these units each year creates a taxable event for the recipient and the appropriate income and payroll taxes are due at that time. For that reason, as they did last year, most of our officers have filed 10b5-1 sales plans to sell a portion of the shares they will receive later this month to cover the taxes due. Although less than 100,000shares, we want investors to be aware of this event when the relevant Form 4’s are filed later in the month. That concludes my financial discussion. I will now turn the call back over to Mike.

Thanks John. When I spoke to you all last year at this time, I laid out several objectives that we intended to deliver on in fiscal 2008. Those were growth in our core firearms business, growth in new markets with a focus on professional products, regular visits to Washington to heighten awareness of our capabilities, and a focus on profitable growth with each initiative. Despite the exceptionally tough challenges in both the general economy and the firearms industry, particularly during the second half of fiscal 2008, we were able to deliver partially or entirely on each of these commitments. I want to first talk to you about the current environment and how we have addressed and will continue to address the challenges there. Then, I will recap our fiscal 2008 highlights and accomplishments in detail, and lastly, I will address our strategy for diversification and growth, a strategy that has remained intact despite the challenging environment that we’ve been facing. As you all know, the domestic consumer firearms market experienced a decline in demand during our third fiscal quarter due to lower retail traffic driven by a variety of weak economic factors that caused a general showdown of consumer spending across many industries and products. Additionally, on unseasonable warm autumn weather throughout most of the United States also adversely affected retail traffic in the sporting goods channel. At the same time, significant purchases by distributors and retailers which had occurred earlier in the year across the industry in anticipation of a strong hunting season created unexpected high inventory levels in the channel and limited the ability of distributors and retailers to purchase additional products. We have taken many actions to address this situation. Let me give you an update. Many of you have heard me explaining our use of the NICS data. For those of you new to our story, NICS data which is generated by the FBI gives us the number of federal background checks that are conducted each month and reflects general trends in the consumer purchases. This is only one of many tools we use at Smith & Wesson to assess the health of the retail market and changes in our own market share. Very importantly, we also gather feedback from our distributors and large retailers on their sales. : I’m pleased to say that in this difficult but seemingly rebounding market, Smith & Wesson handguns grew 12% in the sporting goods channel in the fourth fiscal quarter. NICS data does not differentiate between handguns and long guns, so it’s important to realize while this is a very encouraging trend, it is not an indication that everything the industry is back on track just yet. We know from discussions with many of our distributors that there is still long gun inventory in the channel from various manufactures including Smith & Wesson which must be cleared out. We also cannot know entirely which competitors may still have large supplies of inventory on hand. As a result, we will begin to scale back some of the promotional programs we launched over the past several months. We will continue to assess how inventories in this channel are moving, and we will adjust our marketing programs accordingly. Now, I’d like to turn my discussion toward the important progress we’ve made on our strategy on fiscal 2008, because it is our consistent focus on that long-term strategy that will help us build a company that can successfully navigate short-term changes in our environment. Our strategy is to grow our core handgun business while diversifying into new markets of safety, security, protection, and sport where the Smith & Wesson brand can fuel growth. We grew our core business in fiscal 2008 by introducing a large number of new products and product line extensions including the addition of a compact and a midsized version of our M&P 45 polymer pistol as well as several line extensions to our M&P 15 tactical rifle. The entire M&P product line has been a tremendous success. These products were designed to cross multiple markets including military, law enforcement, and consumer, and they are hitting their mark in a big way. Let me give you some facts. Since we launched our first M&P polymer pistol in January 2006, a 40 caliber version, we have continued to expand the product line. Today, it includes 4 calibers in both full size and compact and an entire series of M&P tactical rifles and M&P revolvers. The portfolio continues to grow, and the traction we are getting in both the consumer and the law enforcement market is very strong. So far, the M&P pistol has been chosen by 348 law enforcement and security agencies. That continues to translate to a win rate of over 80% of all the law enforcement contests in which it has competed. The tactical rifle is delivering equally impressive numbers, winning 160 law enforcement and security agencies, or over 90% of all law enforcement contests that it entered. With 800,000 officers and about 18,000 agencies nationwide and 150,000 federal agents, the law enforcement channel continues to provide a significant opportunity for us to diversify by growing in the professional market and non-consumer channels. In fiscal 2008, we also launched a classic version of our popular Thomson/Center Icon bolt-action rifle, and we added new calibers for this product line. While the long gun market has been challenging to say the least, the Icon has been very well received. We continue to get accolades on the Icon, so we are particularly excited to think about what this new product under the strength of the highly regarded Thomson/Center brand will accomplish as the market for hunting rifle strengthens. Innovation is an important legacy at Smith & Wesson and Thomson/Center arms, and that innovation was highlighted in fiscal 2008 by our winning a number industry awards. We received the NRA Golden Bullseye Award for three of our products. Our Thomson/Center Icon bolt-action rifle was name rifle of the year. Our Smith & Wesson Elite Gold shotgun was named shotgun of the year, and our M&P 45 polymer pistol was named handgun of the year, and while we proud to claim these accomplishments as a reflection of our employees’ craftsmanship and skill, we are also excited about the exposures that these awards generate for Smith & Wesson and Thomson/Center brands and products. For a company that for over 100 years primarily made revolvers, the awards for rifles, shotguns, and pistols reflect significant product diversification. We achieved many synergies in fiscal 2008 as a result of our acquisition of Thomson/Center Arms. There are a host of services that each company was out sourcing independently that have now moved inside our combined organization. Our Springfield factory now produces several components for the Thomson/Center Icon rifle. One of the most high-impact synergies we’ve obtained is our ability to eliminate an outside vendor for the Icon rifle receivers and manufacture that product completely in house. We just began to realize the resulting savings at the end of fiscal 2008, and will realize a full year of savings in fiscal 2009. On the Smith & Wesson side, we’ve now moved all manufacturing for the M&P tactical rifle barrel into the Thomson/Center Rochester, New Hampshire, facility, again a notable savings that we will realize for a full a year in fiscal 2009. These are just two examples, but the key message here is that there are multiple synergies, and we expect to develop more in the future. : Let me give you a brief update of where we are with the military because I know everyone is interested to know where that stands. This is the potential business opportunity that may arise from the military’s consideration from switching from their 9-mm to a new pistol, likely a .45 caliber. Let me tell you what we know so far. As I mentioned to you on our last call, the Air Force has requested $116.4 million for about 100,000 pistols in a larger caliber on its fiscal year 2009 unfunded requirements list. What this means is that the Air Force recognizes the need for a new handgun and is officially asking Congress for the money to purchasing new weapons. I am happy to report that positive developments continue in regard to the Air Force handgun program. In April, the US Army program manager for soldier weapons on behalf of the US Air Force issued a sourced sought announcement for a modular handgun system, and of course, we responded with our pistol recommendations. The sources sought announcement indicates that the procurement will be conducted in three phases. They are a competitive down selection process, a system development and demonstration phase, and a full rate production phase. At a recent National Defence Industry Association Conference, an air force officer announced that the request for proposal for the modular handgun system would likely be issued late this calendar year. We look forward to competing to provide the US military with the best pistol in the world, and we’re actively encouraging Congress to fund the new pistols for our war fighters. We continue to make progress on the licensing front. Our strategy is to use licensing opportunities to diversify and to introduce our strong Smith and Wesson brand into new markets. We signed a licensing agreement in the fourth quarter with Nationwide Digital, a division of New York Merchants Protective Company. This is a very well-established company, over 100 years old, which provides alarm systems and monitoring services to companies and residences. In fact, this company has installed systems and provides monitoring for many of the municipal buildings in New York City. Nationwide is in the process of developing and will be marketing later this calendar year a line of Smith & Wesson brand security products and services. That recaps the fiscal 2008 highlights, and I think you will agree there were many. They clearly indicated that we have delivered at every opportunity on a strategy that we set in place sometime ago and will fuel our ongoing growth and health of our business. With that, let me turn to fiscal 2009 and our key objectives. Growth in our core firearms business will remain a key objective as well as diversification into new markets where we can use our strong brands as leverage in areas of safety, security, protection, and sport. First our core business: We intend to continue our tradition of innovation in fiscal 2009. While we focus our efforts on product extensions, we also plan to develop and announce at Shot Show 2009 several exciting innovative new products under the Smith & Wesson, Thompson/Center, and Walter brand. Additions to our core firearm product line will be designed to meet and exceed the demands of our customers in both the consumer and the professional markets. We will continue to refine and adapt our long gun product line to best meet the needs of an evolving market. We will closely monitor the long gun inventory situation in the industry, and we will watch the competitive landscape and tailor our product offerings and promotional programs to gain leverage and grow market share with our unique and powerful brands. Next, our diversification strategy. As we focus in fiscal 2009 on growing our core business in our established consumer and professional markets, we will remain equally focused on identifying profitable opportunities to diversify. Thompson/Center was a successful first acquisition. Beyond the short-term challenges in the current market, it continues to deliver the positive results we expected. Our recent offering and pay down of debt opens up our options in terms of financing future acquisitions, and our activity on that front remains high. Expanding into new non-firearms businesses that tap into our brand strength in safety, security, protection, and sport will provide us a strong platform for our future growth and success; moreover, and this is an important point, we believe our traction in law enforcement with our M&P products has built a platform upon which we can layer future acquisitions. As a result, we are most interested in those companies with products that address the needs of police officers and professionals in the armed services. Lastly, our operations. Throughout fiscal 2009, we will seek to maximize productivity improvements, minimize costs, and drive manufacturing efficiencies in every facility at every opportunity. We’ve captured some tremendous synergies in our first full year following our acquisition of Thompson/Center Arms, and we believe there are additional benefits to be gained. We will also continue to support our customers with exceptional quality and to support our distributors and dealers with innovative products, effective marketing programs, and some of the best on-time delivery in our industry. This performance clearly separates us in the industry and strengthens our partnership with our distributors and retailers. In January, we suspended providing financial guidance based upon the uncertain business and economic environment that existed at that time. As we said in our press release today, we continue to see some very encouraging signs. Those include 12% growth in our handgun sales into the sporting goods channel in the fourth quarter, an increase in background checks at the retail level in the past several months, and feedback form our distributors that indicate to us that handguns have cleared the channel, and we are continuing to take market share. However, the feedback tells us that there are still long guns, specifically hunting rifles and shotguns in the channel. In addition, I think we can all agree that our overall economic environment remains quite uncertain. Therefore, we are not going to resume our guidance at this time. We intend to resume guidance in the future, but we will only do so when there is more clarity in these environments. In the meantime, we’ve done a good job of building the strength of our business and preparing for future growth. Today, we have a robust product line that crosses multiple channels, and we have a strong balance sheet with lower debt and declining inventories. We will remain focused on maintaining our strength and on executing our strategy to grow in the business of safety, security, protection, and sport. While fiscal 2008 was not without its challenges, it was also not without its accomplishment. I send my thanks to each of our employees for maintaining their focus on quality and on our customers to a challenging industry period and for delivering another year of record revenues in fiscal 2008. I look forward to a prosperous new fiscal year. With that, I would like to open the call to questions from our analysts.

(Operator Instructions). Your first question comes from the line of Paul Swinand from Stephens Incorporated. Paul Swinand – Stephens, Inc.: Good afternoon, and congratulations on navigating this touch environment. First question was with handguns up 12%, I think that’s by my quick math $6 million approximately; tactical rifles up 30%, I know you’re lacking comps with the acquisition in January last year, something must have backed up. What particularly in the product line was weak?

Basically, Paul, what we had was pistol sales were weak as we talked about. We had two large orders last year for Afghanistan and California Highway Patrol. They total about $15 million, and that’s primarily the driver on the pistol side, which is about $8.5 million below last year. Paul Swinand – Stephens, Inc.: Okay, maybe I’m misunderstanding then. In the fourth quarter though, handguns were up. Is that correct?

Handguns were relatively flat in the fourth quarter. Paul Swinand – Stephens, Inc.: Okay, I misunderstood then, but was Thompson a net increase in sales in the fourth quarter, or was it year over year or just for the fourth quarter a negative comparison?

Thompson sales were down in the fourth quarter. Paul Swinand – Stephens, Inc.: Okay. I’ve noticed like at retail you’ve promoted tactical rifiles, the Sigma and in some cases even the M&P, even though the retailers that we talk to are saying that those are all selling quite well. Is that just part of the normal cadence now, or why would you be promoting those if they’re selling well?

Paul, this is Mike. We put the promotions in place late October to November that went through the end of April. It was a fairly strong promotion. We always are promoting products. That’s just the normal course of our business. What we have done going into the current fiscal year is that we are scaling back those promotions from what we had done during the third and fourth quarter, but it’s a conservative business and we do promote it. Paul Swinand – Stephens, Inc.: So, it’s part of the normal cadence now, essentially?

Yes. We’re watching it carefully obviously, and we’ll adjust it accordingly as we see the way the market goes, but even two years ago, we were promoting. Paul Swinand – Stephens, Inc.: We talked about on the last conference call the synergies that you’re talking about now in Thompson. If I was trying to make a quick estimate on what the savings could be on barrels, is it $1 million that you could save next year, or you care to comment on that?

We really don’t give those kinds of details out on the barrel itself. Picture a rifle, and the barrel itself. It was a relatively significant savings, and we think a quality improvement coming out of the Thompson Center. That was one of the reasons we liked the company, their ability to make barrels. There were a number of different things that we had done between Thompson and Smith & Wesson. You have the two that I talked about. We have a heat treat operation. They have a casting foundry up there, leased outsourced casting, leased outsource heat treat. We synergize the sales organization. So, we knew when we were looking at the company that there were a lot of things that we could do by bringing the two organizations together and there were synergies that businesses would benefit by. Paul Swinand – Stephens, Inc.: I’ll just ask one more. On the channel clearing that you’re talking about for the long guns, what’s the time period? Obviously the hunting season starts around September. You’ve got some shipping in August. Can you give us any kind of feeling for the magnitude of how that clearing is going to play out? Is that obviously going to hit gross margin?

That’s part of the uncertainty, Paul. Certainly, the economic environment and the retail environment are going to have an impact on that as to how quickly would they actually sell through. I think our distributors are doing the right thing. They’re looking at here’s what I’ve got in the backroom, and they’re going to look at their upfront purchases more conservatively going into the hunting season this year because of the uncertainties in the economies. So those two factors would really have an effect on that, and that is how quickly the retail demand comes back as we get into the fall. Paul Swinand – Stephens, Inc.: So it’s sounds like you’re saying it’s been handled more through reduced purchases than discounting. Is that fair?

It’s a combination of both, Paul. They’re managing their inventories going through. That’s why we talked about Thompson’s sales being down in the fourth quarter, which is part of that mandatory process. There is discounting going on by some of the competitors, which you can see there. I think as we go forward, we’re going to do the same things we’ve done for the last six months in terms of promotions and assess what we need to do at the consumer level to pull that product through the channel.

Yes. A couple of specific things, Paul. We’re going to focus our sales guys on kick-starting this business here. We’re going to have preseason blitz with our sales force to the key retailers to make sure people are trained on our products. We have consumer promotions that will be in place. We will have some TV on the long guns that will be featured on the outdoor networks, and that’ll include the i-Bolt shotgun and then the Thompson product which has been on TV in the past. So, we’re going to try to spend our money wisely. We said all along that we intend to be a major market share player in long guns over time, and we fully mean that.

Your next question comes from the line of Cai von Rumohr from Cowen & Company. Cai von Rumohr – Cowen & Company: Nice profitability for the sales you’ve achieved guys! Could you give us the number for where you were with hunting rifles and shotguns for year, so we can kind of see how they did in the fourth quarter?

Hunting rifles for the fourth quarter were about $10 million, versus about $14 last year, so there were down about $4.4 million, about 30% for the quarter, Cai. Cai von Rumohr – Cowen & Company: And the shotguns?

Shotguns were up slightly on very low comp. Remember, we weren’t shipping shotguns last year. We have shotguns that are in distribution that some of the promotion programs I just mentioned to Paul, like the blitz and getting the retail place. We have to get pull that product through distribution. Cai von Rumohr – Cowen & Company: Did you do about $1 million or close to that in the fourth quarter or was it even lower than that?

No, it was less than half a million dollars, Cai. Cai von Rumohr – Cowen & Company: Revolvers, were they down in the fourth quarter? Where were they?

Revolvers had a very strong fourth quarter. It was up $3.4 million, about up 19%, so we had a very good quarter in revolvers. Cai von Rumohr – Cowen & Company: And the Walter numbers were really incredibly strong, given the currency. How is that affecting their sales? I mean is the product just pushing the sales out the door, and to what extent is the currency helping?

They have a couple of things going for them. They are certainly benefiting from our direct sales force out there, Cai, you know calling on the dealers and getting placement of the product. Their P22 was just listed in a recent publication as the number one .22-caliber pistol in the marketplace and continues to grow. They launched two new products within the last several months that are doing very, very well, so there’s some momentum there with new products just like we see when we had new products at Smith &Wesson. Cai von Rumohr – Cowen & Company: Okay, so I mean really the picture is if we take out the law enforcement in Afghanistan, the hand gun sales look actually good to very good across the board in the fourth quarter, and frankly the hunting rifle shotguns were pretty bad.

What our distributors and retailers are telling is that the inventory that was the issue on the handgun side has worked its way through, and you can see that, and that’s the combination, but what we’re hearing from dealers is that the handguns are regaining their momentum. Long runs, remember, we are out of season on long guns, so it’s very fair to expect the long guns to be slow this coming year even in a good year on sell through because it’s out of season. Cai von Rumohr – Cowen & Company: Right. Do you have any sense of what the sell through of long guns just in total might have been in the fourth quarter versus your sales?

You’re talking about in our fiscal fourth quarter? Cai von Rumohr – Cowen & Company: In your fiscal fourth quarter?

I don’t think there was a whole lot of movement on long guns during the fourth quarter. It’s out of season. There may have been some adjustment, but nothing dramatic. Cai von Rumohr – Cowen & Company: There’s been all the talk about now with Obama as the democratic candidate concern among potential handguns buyers that there may be changes in legislation. Are you seeing any impact of that in terms of if that’s an issue raised by your distributors, because it looks like you had pretty good momentum in the fourth quarter. Seasonally, July isn’t as good a quarter, but are you seeing momentum on the presidential election impact?

That’s kind of a hard thing to measure, Cai, and I’d certainly probably be naïve if I said there was none, but I think it’s pretty fairly known that the Senate and the House are still very pro-gun regardless of who ends up in the White House, and also that the Second Amendment has been built into the fabric of families in our country. You don’t see Obama talking much about the Second Amendment because they know it’s part of the fabric of the country. So is it affecting sales somehow now and up to the election? That’s hard to read. People that have been in the industry for a long time will tell you it did back in the 90’s, but how do you measure why someone is buying one thing versus another. It’s kind of hard. Cai von Rumohr – Cowen & Company: You mentioned expanding in the law enforcement area and acquisitions. Can you be any more specific? To the extent the way you framed it, it sounded like you have a couple of things in your sights and we might see something in the next 3 to 6 months. Is that possible?

I can tell you, Cai, that diversifying through acquisitions has always been part of our strategy from the time that I’ve been here, and we continue to look for different opportunities, and we’ve said all along that we’re looking at businesses that are within firearms and categories that we’re not in today that may be appealing to us. There are categories of law enforcement products which are anything that a police officer uses to protect himself, to protect citizens, or to perform his duties. We think those are fair game businesses for us to look at, and on the defence side, really, the foot soldier, what they use to perform their duties that we think and many times that’s similar to what law enforcement uses, but we continue to look. There’s nothing imminent, but we certainly continue to look and like the opportunities that could possibly exist for our company. Cai von Rumohr – Cowen & Company: What are the financial metrics you’re looking for as you look at these acquisitions? Specifically, do you have to say it’s got to be accretive out of the box, or has to be at this price? Can you give us any guidelines?

The way we think about it is certainly our plan would be that it would be accretive in the first year; however, there could be an opportunities and I’ve always said this caveat that was so obviously an enormous opportunity for our company that it may be 2 years before it’s accretive, but that would have to be a special situation, I think. John, do you want to say anything?

I mentioned this before that I don’t think we’d be looking at something that needs some type of a rebuilding effort that will be 2 to 3 years out from that perspective before it generated a positive payback, so I think from that perspective, we realize that it’s got to have a relatively short, 18 months or better, time to turn accretive.

Your next question comes from the line of Reed Anderson from D.A. Davidson & Company. Reed Anderson – D.A. Davidson & Company: Mike, on the pistol side, just kind of following up on one of the last ones. You guys have had terrific growth, particularly if you kind of normalize the bigger events from last year. Is there any reason to think, given that you’ve added a lot of products and you continue to do very well gaining share, that that business won’t at least grow in ’09? I know you don’t have a crystal ball, but doesn’t that make sense at least based on what you know today?

The pistols, Reed, if you take a look at it, in business that we’re in the type of product that we’re in in pistols and categories, we don’t have anything that is dramatically different out in the market place that would change the landscape. Again, it’s our M&P pistols really what is leading the charge. Law enforcement continues to be a very large opportunity for us as you know. We continue to win it at 80% rate, but we’ve got a long way to go there, a lot of opportunities that are out there, and we don’t know what’s going to end up happening with the military, but certainly that’s a pistol and not a revolver that we’re talking about, and internationally, the M&P is continuing to take hold internationally. They are government contracts and they will take longer to do the T&E’s, but we are seeing the success that we had predicted there. So the real wildcard on it all is the retail environment, but the other pieces continue to churn right along.

We’re down about 10.9% for year in pistols, but when you think about the fact that you had the Afghan order and the CHP order and you take those out, we grew by a little over 10%, and there were some significant promotions that took place because of the economy during this quarter which further eroded that sales dollars? So, I think we’re seeing unit growth was up year over year. The M&P was up 38% for the year, so there are a lot of good signs in there, and those large one-time orders last year are kind of masking some of that.

Just a caveat, Reed, I was in the office here all day, so maybe the economy just got sparkling good today, but I doubt it, and that’s the wild card. Reed Anderson – D.A. Davidson & Company: Absolutely, and as you look at where it’s selling, you talked about in the quarter being up 12% in the sporting good channel, just curious, as you look at where your product sells in retail, is it your sense Mike that the big chains that you sell to, which are maybe a quarter of your business, are they doing worse or better do you think than your overall customer base?

We really have refocused our efforts on the big boxes. We put this new sales force in place, which was about 2 years ago, I guess, now. We focused on the larger dealers, I guess the top 1000 dealers our guys call them, and the big box stores which we had not been focusing on in the past, and we have some people in our organization that have worked with big boxes in other industries, you know the Home Deport, Wal-Mart, and Loews sort of guys, who understand how to program these guys and put longer horizon strategies in place than you would with an individual dealer, so we’re seeing some pretty good growth at the big boxes. It’s a combination of a couple of things. Playing attention and focusing on it because it’s an important channel for us, which we really hadn’t done aggressively in the past, and by having talented people that can go in and work with the merchants in those companies and the way they are trying to run their business and tie our business into it, so it’s a pretty good combination right now. Once we get POS from them, we’re seeing pretty good POS. Reed Anderson – D.A. Davidson & Company: John, on the gross margin, you guys had a very good quarter relative to my expectations, and my sense is that we saw the worse of margins based on what we know today in your third quarter. Anything out there whether it’s a production scale back or promotion that’s unusual that we’re not seeing today that would cause gross margins to be unusually moving one way or the other over the next year? I know you don’t want to give guidance, but just any color you can provide would be good.

Reed, as part of everything that took place during the third quarter in terms of the production shutdown and we did some things in terms of eliminating some temporary help, and we’ve done reduction in forces where necessary, and we’ve kind of reset the production levels looking forward. So, we’ve made all those adjustments in the third quarter. There’s nothing planned in terms of any future shutdowns. We did shut down for a week at Thompson for the first week of the fiscal year to kind of help get the inventories in line here and get a little balance. Once of the things that we pride ourselves on is that we have a very good way of addressing flexibility in terms of adjusting productions between the various lines. It’s part of the strength of the business. So, I think we’ve got that flexibility, and it’s one of these things that’s we’re going to have to see how things play out in the hunting channel. That’s going to be the key driver I think over the next months.

As we go into the back half, if the economy continues to play havoc on the business and the other factors cause the hunting season to be a slower season, then we’re going to have to make some adjustments. That’s why I’m trying to be very cautious. There are factors that are in the economy and the inventory that’s out there that has to work its way through. Reed Anderson – D.A. Davidson & Company: I’ll stop there and let somebody else in. Thank you.

Your next question comes from the line of Chris Krueger from Northland Securities. Chris Krueger – Northland Securities: Just a couple of quick questions. In your press release you indicated there are two large international orders hung up in Congress. Can you indicate roughly the size of these orders and what’s the potential timing of this?

They’re two separate orders for two separate countries. We really don’t want to divulge how big they are, but we’re expecting to hear over the next couple of weeks on one of them, and the second one, we are hoping we will hear from in the quarter. These things get pretty slow when they get in Congress. Remember, there’s a threshold of $1 million when they get kicked back up to Congress, and they’re just slow when that happens. Chris Krueger – Northland Securities: Would it be something that would be announced, or if it’s just a million or two, would that be something that’s just too low for…?

What we try to announce to you guys, Chris, is something that is meaningful for either strategic purposes or moves the dial somehow or other, and I really don’t want to comment on these at this time, and I’m not trying to mislead you to think these are like enormous $50 million contracts. That’s not the case, but we don’t try to give this stuff out when they’re still pending because of competitive purposes. Chris Krueger – Northland Securities: You went over the election-related thoughts. Any thoughts on what the retailers and distributors are saying about the tax stimulus checks, if that’s having a positive impact in the near term.

I’ve been reading a little bit and you guys probably have too on some of the positives. I guess retail numbers came out better today than people thought for the month of May, total retail numbers, and the stimulus package is part of what they’re claiming. From what I understand, apparently the last time there was a stimulus when a rebate check came out, it did have an effect on gun sales. That’s like the question I was answering for Cai on the election. It’s pretty hard to measure that. Chris Krueger – Northland Securities: Last question. One of the big box retailers indicated an increase in the sale of used weapons, and it’s an initiative that they’re pushing through. Just wondering if you had any thoughts on that. If that’s unique to that particular retailer or if you’re seeing that out there too.

We are seeing some of that, Chris, and that’s certainly due to the economy, but I can tell you the retailer you’re talking to at least from our perspective is having some pretty good Smith & Wesson handgun sales also, so on guns at least they’re performing well. I don’t know about everything else in the store, but on guns, they’re performing fairly well.

I would now like to turn the call back over to Mr. Michael Golden for closing remarks.

Thank you operator, and thanks to everyone for joining us, and we’ll see you next quarter.