Smith & Wesson Holding Corporation (SWHC)

1. Smith & Wesson Holding Corporation (SWHC) Michael Vargas

2. Business Summary • Largest US firearms manufacturer and exporter • Provides products and services for safety, security, protection, and sports in the US and internationally • Products include • Firearms • Handguns • Sporting Rifles • Firearm-related products and accessories • Founded in 1852 in Springfield, MO

3. Market • S&W sells its products through commercial, law enforcement, federal, and military distributors, retailers and dealers in US to: • Gun enthusiasts / Collectors • Hunters / Sportsmen • Law Enforcement / Military / Security Services • Individuals for personal and home protection

4. ….Bottom Line It’s a fucking gun company.

5. Stock Overview

6. Stock Performance Last 6 months, SWHC has increased +42.1% SWHC has outperformed the S&P 500 Total Return Index benchmark by 38.7% SWHC witnessed a 600% rise in Q1 earnings, from 4 cents to 28 cents this yr Sales rose by 48% to $136m Company forecasts sales at $130-135m, well above the Street’s $115m est

7. Stock Overview

8. Gun Sales Increasing Source: WSJ Cabela’s saw a 25% increase in new gun buyers right after the 2008 election. Nearly 12m background checks for gun sales through Aug. 31, up 56% from 2008. Federal excise taxes on the sale of new firearms and ammo rose $453m in 2009, up 45% from the year before. Ammo manufacturers have backlogs.

9. Gun Sales Increasing Source: WSJ

10. Why buy? • Diversification • No aerospace/defense products & services holdings • Superb performance • Sales and earnings • Election hedge • “Gun control is coming” argument

11. Risk Short-term play Tighter gun control laws Defense spending cuts Supply Low consumer recreational spending

12. Questions?