Elizabeth Sharp - Vice President-Investor Relations P. James Debney - President, Chief Executive Officer & Director Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer

Steven L. Cahall - RBC Capital Markets LLC Scott L. Stember - C.L. King & Associates, Inc. Cai von Rumohr - Cowen & Co. LLC Andrea Susan James - Dougherty & Co. LLC Brian W. Ruttenbur - BB&T Securities LLC Chris Krueger - Lake Street Capital Markets LLC

Good day, ladies and gentlemen, and welcome to the Q1 2016 Smith & Wesson Holding Corp. Earnings Conference Call. My name is Lilly and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this call is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. Liz Sharp, Vice President of Investor Relations. Please proceed. Elizabeth Sharp - Vice President-Investor Relations: 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 expression is intended to identify those forward-looking statements. Forward-looking statements also include statements regarding revenue, earnings per share, fully diluted share count, tax rate and capital expenditures for future periods, our product development, focus, initiatives, objectives and strategies, our market share and market demand for our products, market and inventory conditions related to our products and in our industry in general, and growth opportunities and trends. 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 certain non-GAAP financial measures on this call. The reconciliations of GAAP financial measures to non-GAAP financial measures can be found in today's 8-K filing, as well as today's earnings press release, which are posted to our website or will be discussed on the call. Also, when we reference EPS, we are always referencing diluted EPS. For detailed information on our results, please refer to our 10-Q for the period ended July 31, 2015, which filed this afternoon. I'll now turn the call over to James Debney, President and CEO of Smith & Wesson. P. James Debney - President, Chief Executive Officer & Director: Thank you, Liz. Good afternoon and thanks everyone 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 for the second quarter and fiscal year 2016. We are very pleased with our first quarter results, which delivered revenue and net income that exceeded our expectations. Our performance reflects the successful execution of our growth strategy as we focus on our core firearms business and related outdoor spaces. The combined results of our firearms and accessories divisions indicate to us that consumer demand and the preference for our products was stronger than anticipated. Based upon our first quarter results and our current outlook for the remainder of fiscal 2016, we are raising our full year revenue and EPS guidance. Let me provide a few highlights from the first quarter. Total company revenue of $147.8 million delivered double-digit growth over the prior year. Adjusted NICS background checks were up 10.1% for our first quarter, a strong indication of a healthy consumer market for firearms, while our units shipped into the consumer channel for the same period were up 11.7%. Our data sources and analysis continue to support our belief that we remained the market leader in the consumer channel for the handgun and modern sporting rifle categories. Distributor inventory of our firearms increased, as planned, by 65,000 units, to a total of 177,000 units at the end of Q1. This rise, as I explained on last quarter's call was required to support upcoming fall hunting, the holiday shopping season, and our promotional plans. Distributor inventory have since declined significantly primarily as a result of our recently launched summer promotions. Accessories division revenue was $13.3 million versus no revenue last year, a period prior to our purchase of Battenfeld Technologies, or BTI. The $13.3 million of BTI revenue represents 29.9% growth from their prior year results. Accessories gross margins continued to be strong and came in at over 50%. During the quarter, we introduced limited edition models of our M&P BODYGUARD 380 pistol and Model 642 J-Frame Revolver. Our product development teams in both the firearms and accessories divisions continue to work hard preparing a significant number of new products and line extensions for launch at SHOT Show in January. Before I share more detail, Jeff will review our financial results. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Thanks, James. Revenue for the quarter was above the top-end of our guidance range at $147.8 million, which was up 12.1% from the prior year. Revenue from our firearms division was $134.4 million, an increase of 1.9% over the prior year, and revenue from our accessories division was $13.3 million. In firearms, handgun revenue of $100.7 million, decreased by 2.8%, while units shipped increased by 2.2%. Long gun revenue of $21.3 million was up by 27.9%, while units shipped increased by 30.8%. Gross margin for the quarter was 39.8% compared to 37.2% in the prior year. Even with higher promotional costs in the current quarter, gross margin increased by 260 basis points due mainly to better fixed cost absorption from increased volumes of production in firearms and the favorable impact of accessories' gross margins. This result falls within our targeted range of 37% to 41%. Operating expenses in the quarter were $29.1 million or 19.7% of revenue compared to $23.4 million or 17.8% in the prior year. Total first quarter operating expenses rose due to the inclusion of $5.9 million of accessories related operating expenses. Within that amount, there was $2 million in purchase accounting amortization related to the acquisition of BTI. In the firearms division, operating expenses increased mainly due to increases in compensation, profit sharing, R&D and other expenses but were netted down by one-time insurance recovery of $1.8 million. On a non-GAAP basis, which excludes the amortization and the one-time insurance recovery, operating expenses were $28.7 million or 19.4% of revenue compared to $22.9 million or 17.4% of revenue last year. Our operating margin was 20.2% for the first quarter compared to 19.5% in the prior year. On a non-GAAP basis the operating margin was 20.5% in Q1 compared to 19.9% in the prior year. Our GAAP EPS for Q1 came in at $0.26, which was the same as last year. Our non-GAAP EPS was $0.32, substantially above the top end of our guidance and above last year's non-GAAP EPS of $0.27. Adjusted EBITDAS in Q1 was $38.8 million or a 26.3% EBITDAS margin compared to 25.8% in the prior year. Our goal is to maintain EBITDAS margins above 20%. Turning to the balance sheet. Operating cash flow was a positive $16.6 million despite the fact that we build our internal inventory for the upcoming fall hunting and holiday shopping seasons. As a result, cash during the quarter increased by $13.2 million to $55.4 million. CapEx spending during the quarter was $7.9 million. We expect to spend up to $50 million in total on CapEx this fiscal year, primarily relating to further enhancements to manufacturing flexibility, tooling for several important new product introductions and various IT projects. At the end of Q1, we had no borrowings on our $175 million line of credit. We had long-term debt of $180 million comprised of the $105 million unsecured term loan A due June 2020 and $75 million of unsecured senior notes due June of 2018 and callable next summer. The term loan A accrues interest at a defined rate of 3.3%, and the CDOs accrue interest at a fixed rate of 5%. James? P. James Debney - President, Chief Executive Officer & Director: Thank you, Jeff. Before I describe our observation of channel conditions and provide an operational update, let me point out that this quarter we have begun providing you with our firearms unit shipped data in our 10-Q, which was filed today. We believe this data will help to better convey our results within our consumer channel relative to these NICS results. In our first quarter, adjusted NICS results, which we believe provide a good indicator of consumer retail activity, validated our belief in the long-term growth prospects of the firearms market. Adjusted NICS for Q1 grew strongly by 10.1% over the prior year. In looking at the detail within the quarter, the June to July trend line over the past seven years is typically flattish, yet this year, July NICS had a pronounced sequential increase, up over June by 6.7%. This acceleration in consumer buying activity doesn't typically occur until August each year. It is also important to note that this was the highest recorded July ever. Now turning to NICS by product category. For our first quarter, NICS handgun checks were up 17.5%, while our units shipped into the consumer channel grew by only 7.7%. We believe the lower number of handgun units we shipped relative to NICS is a reflection of retailers bringing down their healthy level of inventory before the commencement of our summer promotional activity. Turning to long guns. NICS long gun checks reflect 1.3% year-over-year increase, while our units shipped into the consumer channel were exceptionally strong, up 45.5%. This growth was driven by successful promotions on two key products. The first of these is our opening price point M&P15 Sport rifle, which remains very popular with consumers. The second is our Thompson/Center Venture bolt-action rifle. Our recent focus on Thompson/Center is intended to create a solid platform for growth and market share gains in the hunting rifle category in the coming years. Now turning to operations. As we continue to position our company for growth, a key component of our plans will be the continual enhancement of our flexible manufacturing model. Our focus over the last few years on adding capacity through both outsourcing and internal investments has served us well and has provided a solid and highly adaptable manufacturing platform for cyclical growth. By utilizing our source capacity, we have been able to significantly adjust our production volumes up or down in response to changing consumer demand and at the same time, by leveraging overall manufacturing flexibility, we have been able to shift production mix between various product categories in response to changing consumer preferences. As a result, we have successfully demonstrated our ability to navigate corrections in our marketplace, whilst maintaining very healthy gross margins. The primary benefit of our outsourcing strategy is the flexibility to quickly scale unit production when needed without building costly new facilities. As such, we believe the execution of our plans to continually enhance the flexibility of our manufacturing capacity will deliver incremental value in the future. Turning to new products. As a consumer-centric company, we continue to maintain a very robust new product pipeline. As Jeff mentioned, we have slated up to $50 million in CapEx for fiscal 2016. The most important focus of our expenditures will be in new product development. Across our organization and by firearms and accessories, we currently have more than 120 new products and line extensions in development; many of which will be unveiled at SHOT Show this January. In firearms, we'll continue to expand our flagship M&P brand that is so popular with consumers. In addition, we have a number of products in development under our Smith & Wesson, Thompson/Center and Performance Center brands, some of which represent exciting new product areas for us. In accessories, we continue to execute aggressive new product development plans to expand the product portfolio and drive future revenue growth. While our accessories division only makes up about 10% of our total revenue today, it clearly has the potential to continue delivering double-digit annual revenue growth, both organic and inorganic, as well as very attractive gross margins. With that, let me turn back over to Jeff for our financial outlook. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Thanks, James. For full fiscal year 2016, we are increasing our guidance and now expect revenue to be between $610 million and $620 million, and non-GAAP EPS to be between $1.14 and $1.19. That non-GAAP EPS would exclude $0.08 for expenses related to the redemption in Q1 of our 5.875% notes and $0.19 for acquisition-related amortization, partially offset by an expense reduction of $0.03 related to the insurance settlement, and then $0.09 for the net tax effect of these adjustments. Therefore, we expect GAAP EPS of between $0.99 and $1.04 for fiscal 2016. For the second quarter of fiscal 2016 we expect revenue to be between $135 million and $140 million. We expect second quarter non-GAAP EPS to be between $0.19 and $0.21 and that non-GAAP outlook excludes $0.05 for acquisition-related amortization partially offset by the tax effect of $0.02, so that the GAAP EPS outlook is expected to be between $0.16 and $0.18. With regard to the back-half of our fiscal year, keep in mind our typical seasonality. As a reminder, our third quarter generally rises slightly over Q2 and then Q4 is typically our strongest quarter. And lastly, all of our estimates are based on our current fully diluted share count of 55.8 million shares and expected tax rate of 37%. James? P. James Debney - President, Chief Executive Officer & Director: Thank you, Jeff. I want to thank everyone at Smith & Wesson for delivering a great quarter. With that, operator, please open up the call for questions from our analysts.

Our first question comes from the line of Steven Cahall, Royal Bank of Canada. Please proceed. Steven L. Cahall - RBC Capital Markets LLC: Yeah. Thank you and congratulations. Looks like it was a very strong quarter. Maybe just a first question on the margin, can you talk a little bit about both the gross margin and the EBIT margin, and if there was anything exceptional in the first quarter because to me they looked pretty strong and as I think what's implied in Q2 it looks like you've got a big step-down to hit that Q2 guidance, so is that gross margin related, is that expenses related, and then kind of finally (19:23) the question, maybe you can kind of take us through the same things for the full year, that would be great? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Yeah. There was nothing exceptional in the gross margin. It mainly was the result of good absorption from high production levels. Obviously, our accessories business added 110 basis points over the prior comparable quarter. As we move forward, there's more promotional activity in Q2, which would impact our gross margins in Q2. Steven L. Cahall - RBC Capital Markets LLC: Okay, that's helpful. And then in terms of the share repurchase plan that you've announced, it looked like you didn't buy any shares back in the quarter. So how are you thinking about executing on that plan in terms of where the share price has been? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: All right. Well, we don't really look at solely in regards to the share price. It's more of an analysis of our best use of cash at any particular given time. Right now we're investing in the business. We're building inventory, as you can see inventory increased this quarter, getting ready for like the fall season. We're spending up to $50 million in CapEx this year, and particularly in related to several new upcoming product introductions and then a lot of the tooling for the flexible manufacturing that James mentioned. Steven L. Cahall - RBC Capital Markets LLC: And then just a final one on inventory. I think you mentioned that it seems like retail or distributor inventories are low, so does that mean you don't think that there was any sort of pull-forward of sales by distributors or retailers in the quarter, and that those are the kind of trends we're seeing we shouldn't see any sort of reversing back to a lower growth rate related to inventory normalization? P. James Debney - President, Chief Executive Officer & Director: All right, Steven, did you say at the beginning that you thought we said inventory was low at retail and not wholesale? Steven L. Cahall - RBC Capital Markets LLC: I thought I heard you say that distributor inventories were low, which would lead me to the conclusion that we didn't really have any pull-forward of sales into the first quarter that might then drop out in the back end of the year, so I'm trying to just get you to – if you give a little more color if that's correct. P. James Debney - President, Chief Executive Officer & Director: Okay, Steven. Yeah, in terms of inventory, we didn't really say that we're low. What we said is we'd increase them as planned, that was a 65,000-unit increase, that since the end of the first quarter, they had declined significantly as a result of the commencement of our summer promotional activity. I think retail inventory and wholesale inventory as a whole is fairly healthy. I think it's in a good position of our products for the busy fall season coming up and then obviously into the holiday season as well. So we're excited about that. So we're always looking to optimize our distribution. As Jeff said, we're building our own inventory internally as well in anticipation of a very busy fall and holiday season. And then of course, once you're at the other side of Christmas, you're into an even busier season because you're going to hit the wholesaler shows then, obviously, that's when retailers are invited by wholesalers to these shows where they place orders for the upcoming calendar year. Steven L. Cahall - RBC Capital Markets LLC: Great, that's very helpful. Thank you. P. James Debney - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Scott Stember, C.L. King. Please proceed. Scott L. Stember - C.L. King & Associates, Inc.: Good afternoon and very nice quarter, guys. P. James Debney - President, Chief Executive Officer & Director: Thanks, Scott. Scott L. Stember - C.L. King & Associates, Inc.: Can you maybe talk about – on inventory you had said that it has come down since quarter end, maybe just frame it up with your normal comments about weeks of coverage and your comfort level, how you're feeling heading into the busy fall season? P. James Debney - President, Chief Executive Officer & Director: I'm very comfortable with the level of inventory that we see out there right now. I mean, we expect and I said this in the prepared remarks as well, that inventory will gradually go back up again at wholesale in the quarter. I mean, it's a very busy period in terms of our promotional activity. We said for on a number of calls now that we're going to be aggressive in terms of our promotional activity as we continue to grow the company by taking market share so that activity is kicking in for sure. And then once you get past Labor Day, that's when you'll start to see more foot traffic in at retailers, and we're very excited to see that happening as well. It was interesting to see the acceleration of NICS checks in July over June. That is unusual when you look back at the history. Doesn't normally happen till August. So we're looking at interest right now, what's happening at retail and look forward to getting the NICS checks results once we complete August. Scott L. Stember - C.L. King & Associates, Inc.: Got it. And you had made some comments about the – on the handgun side, you had underperformed the market and you talked about some inventory that was out there and just – can you maybe just talk about what's happened since then and how you would expect the Smith & Wesson products to perform versus NICS in the quarters ahead? P. James Debney - President, Chief Executive Officer & Director: Difficult to say. I mean, we really don't go down to that granular detail. What you have to remember what happens in Q1, a lot of retailers are still receiving shipments from their orders that they made at the wholesaler shows in January or February and that's really what helps them have these healthy inventory levels through the quieter summer months and allows them to get ready for the busy fall season. So our expectation is that retail – again, the retail foot traffic increases, but their inventories will go lower and then obviously replenishment will kick in at a higher level as well. Scott L. Stember - C.L. King & Associates, Inc.: Okay. And just looking at the numbers, Jeff, real quick, what was the implied tax rate for the $0.32 in the first quarter? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: 37%. Scott L. Stember - C.L. King & Associates, Inc.: Okay. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Well, actually, if you want to get technical, it's 36.3%, if you want to get precise. Scott L. Stember - C.L. King & Associates, Inc.: That's great. And just last question. Last quarter you talked about the Modular Handgun System contract that's up for bid. Can you maybe just talk about where it stands right now and where you guys are looking with your JV that you have with General Dynamics? P. James Debney - President, Chief Executive Officer & Director: Sure. With waiting the RFP, our expectation is that that will be released very soon. It's certainly in its final stages of review. We know that for sure, but for the exact timing we don't know. The relationship with General Dynamics is going great. Our two teams are working extremely well together, and we can see lots of mutual benefits going forward not only in the Modular Handgun System area. Scott L. Stember - C.L. King & Associates, Inc.: Okay. And just let me just sneak one last one in. You talked about continuing on your path of being much more flexible with regards to capacity. How much more flexible can you become as we go through a nice recovery here, just given with your footprint where it is right now before you have to physically increase your size and your scale? P. James Debney - President, Chief Executive Officer & Director: Yeah. So, really, Scott, what you're asking is what's our upside in terms of our available capacity? Scott L. Stember - C.L. King & Associates, Inc.: Exactly. P. James Debney - President, Chief Executive Officer & Director: Yeah. Okay. So this is the great thing about outsourcing is our supply chain team does a great job here of casting the net far and wide, reaching out to people who have the same CNC metal cutting technology as we do. That can become very quickly outsourced partners with us and get into production of pistol slides or barrels and so on. We have a fairly broad base of suppliers right now that have some available capacity, and we also are aware of others that we can contact and tap into their available capacity as well should we need to do that. So, it is great, because it's so flexible, and remember, we're still investing in our own base capacity so that increases. We like to keep the outsourcing at a certain limit, so that we don't introduce too much risk into the supply chain, but I have to say that's a fairly significant amount of our capacity right now. And as you go into a very busy period, such as the one we believe that we're going to go into, we can flex up fairly well. Scott L. Stember - C.L. King & Associates, Inc.: Got it. That's all I had and thanks for taking my questions. P. James Debney - President, Chief Executive Officer & Director: Thanks, Scott.

Your next question comes from the line of Cai von Rumohr, Cowen & Company. Please proceed. Cai von Rumohr - Cowen & Co. LLC: Yes. Thank you and great quarter, guys. So people don't talk about it a whole lot but your professional business was down about $6 million in the quarter, and if I kind of look back over time, it seems like over the full year it tends to be in the mid-60%s or has the last couple of years. Where should we expect that because it looks like the consumer is even more impressive when you look at the decline you had year-over-year? P. James Debney - President, Chief Executive Officer & Director: Yeah. As we've always said the professional business can be lumpy in nature for sure. We've had some constraints on some of our international shipments, for example, Thailand being one good example there. Again, I come back to the lumpiness. I think that's the biggest factor here. We know that we've been working very hard with our Law Enforcement Distributors here in the U.S. So we think there's some good opportunities there going forward. So really I guess what I'm saying is our expectation is that it wouldn't stay at this level. You'll see that lumpiness going forward, but I think we'll be getting things back to a more normal level of revenue. Cai von Rumohr - Cowen & Co. LLC: So then 60% or mid-60%s is a reasonable guess for the year? Because if it is, I mean, it assumes that as we get to the second half, it would look like that the firearm sales compares, despite having more manufacturing days, would basically be flat to down after being up. That's a little confusing. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Well, I guess, we don't give guidance by a channel, Cai. And so, all I can say is that, as James said, professional is lumpy. It's difficult to forecast, and so we tend to be quite conservative in our forecast of that. Cai von Rumohr - Cowen & Co. LLC: Got it. And then you had mentioned... Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: I just want to emphasize, there's nothing particularly going on in that channel, other than it's generally like lumpy nature. Cai von Rumohr - Cowen & Co. LLC: And then maybe refresh our memory, Battenfeld, their seasonal pattern versus yours? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Yeah. This is also a low quarter for them. They're much more consumer oriented. So our second and third quarters are big quarters for them because of the retail shopping season and hunting. Cai von Rumohr - Cowen & Co. LLC: Terrific. And then, so your gross margin for the year, I mean, given the manufacturing, it looks like you don't have much in the way of year-to-year gains implied because you've started out with such a strong level. Maybe give us some color on what you're expecting for gross margin for the year? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Well, I think somebody already asked the question that sort of implied that if you do the math, you can sort of see a reduced gross margin in Q2 because of promotional activity. But the best we can – we don't give any particular guidance, and so what I said earlier is that we expect it to be within our targeted range, and our targeted range is 37% to 41%. Cai von Rumohr - Cowen & Co. LLC: Okay. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: But again, you just got to remember what is coming up is we have down days in Christmas, because we shut down for 10 days at Christmas. We have holidays in November, Thanksgiving. And then the bulk of our promotional activity occurs at the distributor shows, and so that's upcoming in Q3 and Q4, so... P. James Debney - President, Chief Executive Officer & Director: And we have to think, Cai, that promotional activity we said we're going to be aggressive. This is very much a promotional-driven industry. We have the gross margins to leverage here. We have what we believe the best margins in the industry, so why not leverage that. Q1 is really the only quarter, which is free of aggressive promotional activity, and really kicks in quarter two, goes in quarter three as well with the tail end as we start the wholesaler shows. We got SHOT Show there as well, where we'll launch many new products. And then in Q4 you got a continuation of that wholesaler buying group shows as well, a lot of promotional activity in quarter three and quarter four. Cai von Rumohr - Cowen & Co. LLC: Got it. And then the last one on your cash flow, should it be positive in the second quarter because it looks like your balance sheet is in really terrific shape? I mean, you basically – your payables are low, so it's not like you (34:37) and under what circumstances would you consider share repurchase? Thanks. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Yeah. Well, actually, in the second quarter, we have our profit sharing payment, which is big. James has a rule on the introduction of new products that we won't announce a new product unless a certain number of units of that product are in the channel. So we are building inventory with new products over the course of Q2 also. So we don't give a forecast on cash but, I mean, generally, I don't think it's going to be a big cash generation quarter. Historically speaking, quarter four is our biggest cash generation quarter and quarter one is okay. And quarter two also has the – occasionally has the impact of our two-week shutdown in the summer. So those are the typical cash impacts. Cai von Rumohr - Cowen & Co. LLC: Thank you very much. P. James Debney - President, Chief Executive Officer & Director: Thanks, Cai.

Your next question comes from the line of Andrea James, Dougherty & Company. Please proceed. Andrea Susan James - Dougherty & Co. LLC: Hi, thanks so much for taking my questions. First one, just Walmart said that they were pulling MSRs because they were seeing poor sales and you guys are obviously seeing the opposite. So my question is, are you seeing some changes in the way your products are sold? Is the distribution channel changing, maybe more mom-and-pops taking share? I'm just curious how you interpret that data point? P. James Debney - President, Chief Executive Officer & Director: I don't think it's much of a data point to pay any attention to personally. There are large retailers who have been in and out of firearms on a regular basis. They have no continuity. Walmart is an example, obviously, has a very large store count and footprint, but not all stores would sell firearms, for example. So, it can be pretty misleading for sure. Andrea Susan James - Dougherty & Co. LLC: Okay. And then my second question and forgive me if you've done this before, but it was the first time I've noticed that you've broken down NICS by long gun and handgun, and it seems to be a new data point, so I'm curious, first of all, it's very helpful, so thank you. But second of all, where does the data come from and how are you interpreting that? P. James Debney - President, Chief Executive Officer & Director: Where does the data for breaking NICS between handgun and long gun come from, was the question? Andrea Susan James - Dougherty & Co. LLC: Exactly. Yeah. P. James Debney - President, Chief Executive Officer & Director: Off the FBI website. Andrea Susan James - Dougherty & Co. LLC: Okay. Sorry about that, okay. And then also summer is doing a little better than expected, do you think that like shooting is becoming more of a summer sport or I guess, what's going on in the marketplace? P. James Debney - President, Chief Executive Officer & Director: It's very interesting. I mean I just come back to that – we have a lot of data that supports our belief that in the long term the market is growing. More and more people – we've got a lot of research that more and more people have shown interest in the shooting sports in the last five years, change in the demographics, more women than ever before, younger generation, more people from urban areas versus suburban areas, a lot of things that we've discussed, all discussed in the past is part of our investor presentation, so that dynamic is still in play. Were we surprised by the NICS result in July? Yes. Was it pleasant surprise? Very. It's a good thing. It's very encouraging for the future. Andrea Susan James - Dougherty & Co. LLC: And then finally, you said 120 new products in development or product extension, how does that compare to historically? That's all. Thank you. P. James Debney - President, Chief Executive Officer & Director: Difficult to compare historically because, obviously, now we have two divisions, firearms and accessories, a large number of those new products will come from the accessories division for sure. So I think in the future we'd be able to do a better job of making that comparison, but I would definitely say there's a healthy increase, a fairly significant increase over last year. Andrea Susan James - Dougherty & Co. LLC: Thank you. P. James Debney - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Brian Ruttenbur with BB&T Capital. Please proceed. Brian W. Ruttenbur - BB&T Securities LLC: Yes. Thank you very much. Great quarter. P. James Debney - President, Chief Executive Officer & Director: Thanks, Brian. Brian W. Ruttenbur - BB&T Securities LLC: Yeah. So you beat by $0.10 on an adjusted basis, yet you raise the guidance by $0.12. Help me understand, I know that people have been chiseling around the edges on this. It seems like everything is picking up, and I just want to understand why you didn't raise more – by more, am I missing something? Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: No. I guess we do our analysis of what we think the year is going to do based on a lot of inputs. This quarter was a good quarter and exceeded our expectations. We have talked about not sustaining this level of gross margin in Q2, because of our promotional activities upcoming. So all I can say is that after all that this is the guidance that we arrived at. Brian W. Ruttenbur - BB&T Securities LLC: Okay. It was probably a poorly worded question, I put you on the spot, so I apologize. Let's try a different one that's easier. Let's try a softball. Okay, long gun, up dramatically. This is the biggest – one of the biggest at least in the last 18 months that I've seen on your long gun rebound. Is that sustainable and in your projections or your guidance, excuse me, do you anticipate it to be sustainable at these levels? P. James Debney - President, Chief Executive Officer & Director: Well, I think that you have to just dial back a year ago and talk about inventory, again, when you think about MSRs. So there was very little MSR sales, because there was a high level of inventory at wholesale and retail. And as I talked about the last four earnings calls slowly that inventory correction has been taking place and we think that was complete some months ago, that has definitely helped our sales of MSRs in the consumer channel. And then looking at the other component of our growth in long guns is about our Thompson/Center hunting brand. We're very excited about some of the products that we've been selling here, in particular, Venture bolt-action rifle. We're very excited about the growth potential in the hunting part of the firearms market. And we have some new products to target taking market share in the coming years. So your question about sustainability, I'd come back to we've already said we're going to grow our company. We want to be the number one in market share in each major product category. We're going to grow by taking market share. Brian W. Ruttenbur - BB&T Securities LLC: Okay. And then the promotional activity – promotional discounting that you're doing, given the dramatic rise in NICS data, why continue the promotional activity? Won't demand meet your new prices? Won't prices eventually rise with the huge surge in demand? P. James Debney - President, Chief Executive Officer & Director: Because we want to take market share. Brian W. Ruttenbur - BB&T Securities LLC: Fair enough. And are you trying to take it at all levels? Are you trying to enter – it sounds like some of these new – the products that you mentioned, many of those were at kind of the lower end of the price range of firearms, is that correct? P. James Debney - President, Chief Executive Officer & Director: Sorry, say that again, Brian? Brian W. Ruttenbur - BB&T Securities LLC: Okay. So some of the new products that you're talking about seem to be priced at the more aggressive or the lower end of the firearms price range? Is that correct? P. James Debney - President, Chief Executive Officer & Director: I don't believe we said that. No. Brian W. Ruttenbur - BB&T Securities LLC: Okay. Is that the case? Are you trying to go after the low end? Or you still...? P. James Debney - President, Chief Executive Officer & Director: We haven't given that detail. I haven't even told you what the new product is yet, so I can't give you the price. Yeah. Brian W. Ruttenbur - BB&T Securities LLC: Fair enough. Well, thank you guys very much. I appreciate you taking my questions. P. James Debney - President, Chief Executive Officer & Director: All right. Thanks, Brian.

Your next question comes from the line of Chris Krueger with Lake Street Capital Markets. Please proceed. Chris Krueger - Lake Street Capital Markets LLC: Hi. Good afternoon, guys. All, but one of my questions has been answered. Just was wondering if you guys could provide any sort of update on the Army contract opportunity? P. James Debney - President, Chief Executive Officer & Director: Yeah. Very little to update on there, I'm afraid. As I said earlier, it really is a waiting game, waiting for the RFP to come out. We believe we pretty much know that it's in its final, final review stage, so that's a good thing. We're excited about it. The partnership with General Dynamics is going really well. Our two teams are working very well together. So it's all good things. But again, we just don't know when the RFP will come out. But as I've always said, very strongly positioned with the handgun that we have to offer, our M&P polymer pistol, which will be the latest generation. Chris Krueger - Lake Street Capital Markets LLC: Okay. Thank you. P. James Debney - President, Chief Executive Officer & Director: Thank you. Elizabeth Sharp - Vice President-Investor Relations: Operator, just one minute. Jeffrey D. Buchanan - Executive Vice President, Chief Financial Officer, and Chief Administrative Officer: Yeah, this is Jeff. I just wanted to add something to a question that Brian had asked about the rest of the year. I didn't mention that OpEx is going up. We did have $1.8 million benefit in this quarter because of an insurance recovery, and we also plan on spending more in OpEx, especially in sales and marketing, advertising, et cetera, so that's just another reason with regard to our current forecast.

Ladies and gentlemen, that concludes today's Q&A. I'll now turn the call back over to Mr. James Debney. Please proceed. P. James Debney - President, Chief Executive Officer & Director: Thank you, operator. Please note that we will be participating in the RBC Global Industrials Conference in Las Vegas on September 10, and we will also be at the Credit Suisse Conference in New York on September 17. We hope to see some of you there. Thank you for everyone for joining us, and we look forward to speaking with you next quarter.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.