1092796--6/30/2008--SMITH_&_WESSON_HOLDING

related topics

{stock, price, share}

{acquisition, growth, future}

{debt, indebtedness, cash}

{financial, litigation, operation}

{operation, international, foreign}

{property, intellectual, protect}

{cost, regulation, environmental}

{provision, law, control}

{capital, credit, financial}

{product, market, service}

{customer, product, revenue}

{cost, operation, labor}

{product, liability, claim}

{stock, price, operating}

Government settlements may adversely affect our business. Insurance is expensive and difficult to obtain. We face intense competition that could result in our losing or failing to gain market share and suffering reduced revenue. Our Springfield, Massachusetts facility is critical to our success. Shortages of components and materials may delay or reduce our sales and increase our costs, thereby harming our operating results. We must effectively manage our growth. Our operating results may involve significant fluctuations. Potential strategic alliances may not achieve their objectives, and the failure to do so could impede our growth. Our success will depend in part on our ability to make successful acquisitions. Any acquisitions that we undertake in the future could be difficult to integrate, disrupt our business, dilute stockholder value, and harm our operating results. Our growth strategy may require significant additional funds, the amount of which will depend upon the size, timing, and structure of future acquisitions and our working capital and general corporate needs. Our inability to protect our intellectual property or obtain the right to use intellectual property from third parties could impair our competitive advantage, reduce our revenue, and increase our costs. We may incur substantial expenses and devote management resources in prosecuting others for their unauthorized use of our intellectual property rights. We face risks associated with international trade and currency exchange. We face risks associated with international activities. We may incur higher employee medical costs in the future. We are subject to extensive regulation. We are currently involved in numerous lawsuits. The ongoing SEC investigation could result in additional costs, monetary penalties, and injunctive relief. Environmental laws and regulations may impact our business. We increased our leverage as a result of the sale of senior convertible notes. Our substantial indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business, and we may be unable to generate sufficient cash flow to satisfy significant debt service obligations. Under the terms of the indenture governing our senior convertible notes, we are limited in our ability to incur future indebtedness until certain conditions are met. We may not have the funds necessary to repay the senior convertible notes at maturity or purchase the notes at the option of the noteholders or upon a fundamental change as required by the indenture governing the notes. Our charter documents and Nevada law could make it more difficult for a third party to acquire us, and discourage a takeover. Our stockholders rights plan may adversely affect existing stockholders. The issuance of additional common stock in the future, including shares that we may issue pursuant to option grants, may result in dilution in the net tangible book value per share of our common stock. Sale of a substantial number of shares that are eligible for sale could adversely affect the price of our common stock. Conversion of our senior convertible notes will dilute the ownership interest of existing stockholders. If holders of our senior convertible notes elect to convert their notes and sell material amounts of our common stock in the market, such sales could cause the price of our common stock to decline, and such downward pressure on the price of our common stock may encourage short selling of our common stock by holders of our senior convertible notes or others. We may issue securities that could dilute your ownership and the net tangible book value per share of our common stock. The market price of our common stock could be subject to wide fluctuations as a result of many factors.

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1092796--6/30/2008--SMITH_&_WESSON_HOLDING_CORP