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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD

Commission file number 1-31552

Smith & Wesson Brands, Inc.

(Exact Name of Registrant as Specified in Its Charter)

     Nevada

     87-0543688

     (State or Other Jurisdiction of
Incorporation or Organization)

     (I.R.S. Employer
Identification No.)

~~2100~~1852 ~~Roosevelt~~Proffitt ~~Avenue~~Springs Road

~~Springfield~~Maryville, ~~Massachusetts~~Tennessee ~~01104~~37801

(800) 331-0852

(Address including zip code, and telephone number,

including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


(Title of Class)	Trading Symbols	(Name of Each Exchange on Which Registered)
Common Stock, Par Value $.001 per Share	SWBI	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404 (b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of Common Stock held by non-affiliates of the registrant (4543,~~171~~661,~~298~~996 shares) based on the last reported sale price of the registrant’s Common Stock on the Nasdaq Global Select Market on October 31, ~~2023~~2024, which was the last business day of the registrant’s most recently completed second fiscal quarter, was $~~665~~565,~~373~~859,~~220~~468. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are, in fact, affiliates of the registrant.

As of June 18, ~~2024~~2025, there were ~~outstanding 45~~44,~~559~~309,~~503~~940 shares of the registrant’s ~~Common~~common ~~Stock,~~stock outstanding at a par value of $.001 per share.

Documents Incorporated by Reference

Portions of the registrant’s definitive proxy statement for the ~~2024~~2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

Auditor Firm Id: 34185 Auditor Name: ~~Deloitte~~KPMG ~~& Touche~~ LLP Auditor Location: ~~Hartford~~Nashville, CTTN, USA

SMITH & WESSON BRANDS, INC.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended April 30, ~~2024~~2025

TABLE OF CONTENTS

		Page
	PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	14
ITEM 1B.	UNRESOLVED STAFF COMMENTS	3332
ITEM 1C.	CYBERSECURITY	32
ITEM 2.	PROPERTIES	3533
ITEM 3.	LEGAL PROCEEDINGS	3533
ITEM 4.	MINE SAFETY DISCLOSURES	3533
	PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	3634
ITEM 6.	RESERVED	3835
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3936
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	4743
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	4743
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	4743
ITEM 9A.	CONTROLS AND PROCEDURES	4743
ITEM 9B.	OTHER INFORMATION	4844
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	4945
	PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	5046
ITEM 11.	EXECUTIVE COMPENSATION	5046
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	5046
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	5046
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	5046
	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	5147
ITEM 16.	FORM 10-K SUMMARY	5450
SIGNATURES		5551
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

Smith & Wesson®, S&W®, M&P®, M&P Shield®, Performance Center®, Abyss®, Airlite®, Airweight®, American Guardians®, Armornite®, Arrow®, Aurora~~®, Aurora~~-II®, Blast Jacket®, Bodyguard®, Carry Comp®, Chiefs Special®, Club 1852®, Competitor®, CSX®, Dagger®, EEmpowering Americans®, Eg-Series®, ETM®, EZ®, Flexmag®, G-Core®, Gemtech®, Gemtech Suppressors®, GM®, GM-S1®, GMT-Halo®, Governor®, GVAC®, Integra®, Lady Smith®, Lever Lock®, Lunar®, M&P FPC®, M2.0®, Magnum®, Mist-22®, Mountain Gun®, ~~PC®,~~ Protected by Smith & Wesson®, Put A Legend On Your Line®, Quickmount®, Shield®, Silence is Golden®, Smith & Wesson Collectors Association®, Smith & Wesson Performance Center®, Smith & Wesson Precision Components®, Smith & Wesson Response®, SW Equalizer®, SW22 Victory®, TEMPO®, The S&W Bench®, The Sigma Series®, Trek®, Volunteer®, and Weather Shield® are some of the registered U.S. trademarks of our company or one of our subsidiaries. This ~~report~~Annual Report on Form 10-K also may contain trademarks and trade names of other companies.

This ~~report~~Annual Report on Form 10-K includes market and industry data that we obtained from industry publications, third-party studies and surveys, government agency sources, filings of public companies in our industry, and internal company surveys. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the foregoing industry and market data to be reliable at the date of the report, this information could prove to be inaccurate as a result of a variety of matters.

Statement Regarding Forward-Looking Information

The statements contained in this Annual Report on Form 10-K that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained or incorporated herein by reference in this Annual Report on Form 10-K, including statements regarding our future operating results, future financial position, business strategy, objectives, goals, plans, prospects, markets, and plans and objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “targets,” “contemplates,” “projects,” “predicts,” “may,” “might,” “plan,” “will,” “would,” “should,” “could,” “may,” “can,” “potential,” “continue,” “objective,” or the negative of those terms, or similar expressions intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. Specific forward-looking statements in this Annual Report on Form 10-K include statements regarding the impact, if any, of statements regarding our objectives, goals, strategies, plans, and focus, including our objective to be the undisputed market leader in the firearm industry; our plan to continue to introduce new products in fiscal ~~2025~~2026; our belief that by offering high-quality products and services on a timely and cost-effective basis, as well as providing world-class customer service, training, and support, we will drive customer satisfaction and loyalty; our intent to continue to streamline and standardize certain administrative functions of our business with a goal toward driving profitability and improving the ease with which our customers are able to do business with us; our intent to continue investing in systems to further enhance our efficiency, improve information reporting, and strengthen internal controls; our intent to continue our focus on developing, growing, and protecting our iconic firearm brands and using our cash flow from operations on actions that will maximize our return on invested capital, including by investing in machinery, equipment, and new product development; our ~~belief~~intent ~~that~~to ~~our~~introduce ~~M&P~~new ~~branded pistol~~ products ~~are~~to ~~the~~enhance ~~most~~our ~~ergonomic,~~competitive ~~feature-rich,~~position and ~~innovative~~broaden ~~products~~our onparticipation in the ~~market~~overall ~~today~~market; our belief that ~~the~~our M&P ~~Shield~~branded pistol isproducts ~~one~~are of the most ~~popular~~ergonomic, ~~firearms~~feature-rich, inand innovative products on the market today; our belief that our manufacturing services provide us with increased flexibility and reduced supply chain risk; our belief that business-to-business sales provide profitable revenue stream diversification and enable us to maximize capacity utilization of our manufacturing assets; our belief that the loss of one or more of our top five commercial distributors in the United States would not materially impact sales; our belief that our digital ~~platform~~platforms ~~supports~~support future sales growth and profitability; our expectation that we will obtain an ISO 9001 certification for the Maryville, Tennessee facility in fiscal 2025; our intention to discontinue operations at the Deep River facility during fiscal 2025; our intention to occupy the Deep River facility at least through the current lease termination date; our current belief that ~~there are no indications of impairment relating to assets being utilized at the Deep River facility;~~ our ~~belief that our~~ business is not materially dependent on any single patent; our belief that our Smith & Wesson and Gemtech brands, ~~and~~including our S&W monogram trademarks, are known and recognized by the public worldwide and are important to our firearm business; our intention to vigorously pursue and challenge infringements of our patents, trademarks, service marks, trade dress, and copyrights, as we believe the goodwill associated with them is a cornerstone of our branding strategy; our belief that we can effectively compete with all our present competitors; our belief that microstamping laws may restrict our ability to sell our products into certain jurisdictions; our concern that we may be required to remove hazardous waste or remediate the alleged effects of hazardous substances on the environment associated with past disposal practices at sites not owned by us; our concerns that we may become involved in various proceedings relating to environmental health and safety matters; our expectation, based on information known to us, that current environmental regulations or environmental proceedings and claims will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows; our belief that additional or changing environmental regulation may become more burdensome in the future and any such development could materially and adversely affect us; our belief that our training and development programs lead to more valuable contributions and satisfaction for our employees within their existing roles and also positions employees for roles they aspire to attain; our belief that our employee relations are good and that the high quality of our employee base is instrumental to our success; our belief that the demand for our products is currently being, and may continue to be, impacted by unified Republican control of the executive and legislative branches of the federal government; our expectation that we will continue to incur expenditures in order to comply with environmental requirements; our belief that we may become subject to governmental proceedings and orders pertaining to waste disposal, air emissions, and water discharges from our operations into the environment; our belief that our operations may cause contamination in the future; our belief that we could incur additional costs to clean up contamination that exceed the amount of our reserves, and our reserves may increase from time to time; our ~~belief~~concern that ~~new~~our ~~BIS~~failure ~~(as~~to ~~defined~~comply ~~herein)~~with ~~rules~~laws, ~~that~~regulation, ~~became~~and ~~effective~~other inrequirements ~~May~~could ~~2024~~cause ~~will~~us ~~likely~~to ~~continue~~incur fines and penalties, lead to ~~negatively~~restrictions ~~impact~~on our ~~international~~ability ~~sales;~~to manufacture and sell our ~~belief~~products ~~that~~and ~~high~~services, ~~levels~~or ofotherwise ~~inflation~~negatively ~~may~~impact ~~continue~~our ability to ~~depress~~import ~~consumer~~or ~~demand~~export ~~for~~the ~~our~~ products ~~and~~that ~~reduce~~we ~~our profitability~~sell; our ~~expectation~~concern that allegations that we ~~will~~have ~~continue~~failed to ~~experience~~comply ~~increased~~with ~~turnover~~laws, regulation, and ~~challenges~~other inrequirements ~~recruiting~~could ~~and~~also ~~retaining~~expose ~~existing~~us ~~employees~~to aslitigation aand ~~result~~harm ofour ~~the Relocation~~reputation; our ~~anticipation~~belief that wehigh ~~will~~levels of inflation may continue to ~~incur~~depress ~~significant~~consumer ~~capital~~demand ~~and~~for ~~other~~our ~~expenditures~~products ~~with~~and ~~respect~~reduce to our ~~Springfield~~profitability; ~~facility,~~our ~~but~~anticipation that we will continue to incur significant capital and

other expenditures with respect to our Springfield facility, but we may not be successful in continuing to improve efficiencies; our ~~belief~~concern that ~~maintaining~~we amay ~~high~~be ~~level~~more oflikely ~~brand~~than ~~recognition~~other ~~and~~companies to be a ~~strong~~target ~~reputation~~for ~~are~~malicious ~~critical~~disruptive toactivities or physical attacks on our ~~success,~~senior ~~particularly~~leadership ~~with~~team ~~respect~~or tofacilities ~~retaining~~given ~~existing~~the ~~customers~~industry ~~and~~within ~~attracting~~which ~~new~~we ~~customers~~operate and our brand; our ~~anticipation~~belief that ~~our~~maintaining ~~advertising,~~a ~~marketing,~~high ~~public~~level ~~relations,~~of ~~and~~brand ~~promotional~~recognition ~~efforts~~and ~~will~~a ~~increase~~strong inreputation ~~the~~are ~~foreseeable~~critical ~~future~~to asour wesuccess, ~~continue~~particularly towith ~~seek~~respect to ~~enhance~~retaining ~~our~~existing ~~brand~~customers ~~recognition~~ and ~~the~~attracting ~~consumer~~new ~~demand for our products~~customers; our belief that the value of our brand depends, in part, on the value consumers place on the quality of our products; our anticipation that we will continue to be involved in litigation, including product liability cases and claims in the future; we may be subject to governmental investigations and inquiries; our belief that period-to-period comparisons of our operating results may not be meaningful in the short term, and our performance in a particular period may not be indicative of our performance in any future period; our ~~expectation~~concern that ~~the~~we ~~market~~may ~~for~~struggle ~~both~~to ~~hourly~~identify ~~workers~~qualified ~~and~~candidates ~~professional~~who ~~workers~~are ~~may~~comfortable ~~remain~~or ~~challenging~~enthusiastic atto ~~least~~work ~~through~~for ~~fiscal~~a ~~2025~~firearm business; our ~~expectation~~concern that if we fail to attract, inmotivate, ~~total~~train, and retain qualified personnel, or if we ~~will~~experience ~~incur~~excessive ~~capital~~turnover, ~~expenditures~~we inmay ~~connection~~experience ~~with~~declining ~~the~~sales, ~~construction~~manufacturing delays or other operating inefficiencies, increased recruiting, training, and ~~equipping~~relocation costs, or other difficulties, and our business, financial condition, and results of ~~the~~operations ~~new~~may ~~facility~~be inmaterially ~~Maryville~~and inadversely animpacted; ~~aggregate~~our ~~amount~~concern that the loss of ~~approximately~~key ~~$160.0~~executive ~~million~~and management personnel to ~~$170.0~~manage ~~million~~our business efficiently and effectively, particularly during a challenging market of attracting and retaining employees, could materially and adversely affect our business, financial condition, and results of operations; our estimation that the annual domestic non-military firearm market based on industry shipments is approximately $2.98 billion for handguns and $1.89 billion for long guns, excluding shotguns; our belief that an expanding base of consumers combined with our strong brand reputation and attractive price points lend support to our goal of continuing to increase our market share; our expectation that our ~~inventories~~inventory levels will ~~increase~~moderately indecline ~~the~~during ~~first quarter of~~ fiscal ~~2025 because of seasonal factors~~2026; our current expectation that we will spend between $25.0 million to $30.0 million on capital expenditures in fiscal ~~2025~~2026; our belief that, based upon our current working capital position, current operating plans, and expected business conditions, our existing capital resources and credit facilities will be adequate to fund our operations for the next 12 months; our expectation that inflation will continue to ~~have an~~ impact us during fiscal ~~2025~~2026; ~~goodwill and intangible assets;~~ our assessment of the effect of a variety of economic, social, political, legislative, and regulatory factors on our business; our view of the outcome of the lawsuits and claims to which we are subject and their effect on us; our assessment of future investments for capital expenditures; our assessment of future products and product developments; our belief about the features and performance of our products; our belief about the success of particular product or marketing programs; our view on future enterprise resource planning implementations and system improvements; our view on future enhancements to our manufacturing capabilities, and liquidity; and our anticipated cash needs and availability. All forward-looking statements included herein are based on information available to us as of the date hereof and speak only as of such date. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. The forward-looking statements contained in or incorporated by reference into this Annual Report on Form 10-K reflect our views as of the date of this Annual Report on Form 10-K about future events and are subject to risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ significantly from those expressed or implied in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, performance, or achievements. A number of factors could cause actual results to differ materially from those indicated by the forward-looking statements. Such factors include, among other, economic, political, social, legislative, regulatory, inflationary and health factors; the potential for increased regulation of firearms and firearms-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability, and costs of raw materials and components; the impact of tariffs; speculation surrounding fears of terrorism and crime; our anticipated growth and growth opportunities; our ability to increase demand for our products in various markets, including consumer, law enforcement, and military channels, domestically and internationally; our penetration rates in new and existing markets; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to introduce new products; and the success of ~~new~~those products; our ability to expand our markets; the potential for cancellation of orders from our backlog; and other factors detailed from time to time in our reports filed with the Securities and Exchange Commission, or the SEC, including the factors discussed under Item 1A, “Risk Factors.”

Risk Factors Summary

Our business, operating results, and financial condition may be materially and adversely affected by the nature and impact of certain risks. Set forth below is a summary list of the principal risk factors as of the date of the filing of this Annual Report on Form 10-K.

•

Our performance is impacted by a variety of economic, political, social, legislative, regulatory, and inflationary factors.

•

Our business is subject to extensive regulation.

•

We face risks associated with international activities.

•

We are exposed to protectionist trade restrictions, including tariffs and potential trade laws.

•

High levels of inflation have adversely affected us, and may continue to adversely affect us.

•

We must continue to introduce new products that are successful in the marketplace.

•

We are subject to risks associated with the Relocation.

•

Our operating facilities are critical to our success, and we may incur business disruptions.

•

We rely on our supply chain for our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders.

•

We may be unable to forecast demand for our products accurately.

•

We may fail to align our capacity with demand for our products.

•

Shortages of and price increases for components, parts, raw materials, and other supplies may delay or reduce our sales and increase our costs.

•

Our business is highly dependent upon our brand recognition and reputation.

•

Poor product quality or performance, or defects in our products, could harm us.

•

We face intense competition.

•

We may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures.

•

We may have difficulty collecting amounts owed to us.

•

Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all.

•

We are subject to lawsuits and governmental investigations and inquiries.

•

Our business involves the potential for product recalls and product liability and other claims against us.

•

We produce or source and sell products that create exposure to potential product liability, warranty liability, and personal injury claims and litigation.

•

We may be unable to protect our intellectual property or obtain the right to use intellectual property from third parties.

•

We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights.

•

Interruptions in the proper functioning of our information systems or other issues with our ERP systems could disrupt our operations.

•

We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data.

•

Our operating results may involve significant fluctuations.

•

The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future.

•

We are subject to risks related to corporate social responsibility.

•

Actions of stockholder activists could cause us to incur substantial costs and divert management’s attention and our resources.

•

Our ability to operate our business efficiently may be adversely impacted if service providers and other businesses that permit firearm-related activities refuse to work with us.

•

We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel.

•

Nevada law could make it more difficult for a third party to acquire us and discourage a takeover.

•

We have identified a material weakness in our internal control over financial reporting that may, if not remediated, result in material misstatements in our financial statements.

PART I

Item 1. Business

Introduction

General

We are one of the world’s leading manufacturers and designers of firearms. We manufacture a wide array of handguns (including revolvers and pistols), long guns (including modern sporting rifles, pistol caliber carbines, and lever -action rifles), handcuffs, firearm suppressors, and other firearm-related products for sale to a wide variety of customers, including firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and throughout the world. We sell our products under the Smith & Wesson and Gemtech brands. We manufacture our products at our facilities in ~~Springfield~~Maryville, ~~Massachusetts~~Tennessee; ~~Houlton~~Springfield, ~~Maine~~Massachusetts; ~~Deep River, Connecticut;~~ and ~~Maryville~~Houlton, ~~Tennessee~~Maine. We also sell our manufacturing services under our Smith & Wesson and Smith & Wesson Precision Components brands to other businesses to attempt to level-load our factories. WeDuring ~~sell~~fiscal ~~those~~2024, ~~services~~we ~~under~~began ~~our~~manufacturing ~~Smith & Wesson~~ and ~~Smith~~distribution &activities ~~Wesson~~from ~~Precision~~our ~~Components~~Maryville ~~brands~~facility. During the fiscal ~~2024,~~year weended ~~began~~April ~~manufacturing~~30, ~~and~~2025, ~~distribution~~we ~~activities~~discontinued ~~from~~operations at our ~~new~~Deep ~~Maryville~~River, ~~Tennessee~~Connecticut facility and vacated the premises. See Note 1514 — Commitments and Contingencies and Note 1615 — Restructuring for more information.

Smith & Wesson was founded in 1852 by Horace Smith and Daniel B. Wesson. Mr. Wesson purchased Mr. Smith’s interest in 1873. The Wesson family sold Smith & Wesson to Bangor Punta Corp. in 1965. Lear Siegler Corporation purchased Bangor Punta in 1984, thereby acquiring ownership of Smith & Wesson. Forstmann Little & Co. purchased Lear Siegler in 1986 and sold Smith & Wesson shortly thereafter to Tomkins Corporation, an affiliate of U.K.-based Tomkins PLC. We purchased Smith & Wesson from Tomkins in May 2001 and renamed our company Smith & Wesson Holding Corporation. In January 2017, we changed the name of our company from Smith & Wesson Holding Corporation to American Outdoor Brands Corporation. In May 2020, in preparation for the spin-off of our outdoor products and accessories business, or the Separation, which was completed on August 24, 2020, we changed our name to Smith & Wesson Brands, Inc. On September 30, 2021, we announced our plan to move our headquarters and significant elements of our operations to Maryville, Tennessee in 2023, or the Relocation.

We maintain our principal executive offices at ~~2100~~1852 ~~Roosevelt~~Proffitt ~~Avenue~~Springs Road, ~~Springfield~~Maryville, ~~Massachusetts~~Tennessee ~~01104~~37801. Our telephone number is (800) 331-0852. Our website is located at www.smith-wesson.com. Through our website, we make available free of charge our ~~annual~~Annual ~~reports~~Reports on Form 10-K, our proxy statements, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to any of these documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These documents are available as soon as reasonably practicable after we electronically file them with the SEC. We also post on our website the charters of our Audit, Compensation, Nominations and Corporate Governance, and Sustainability Committees; our Corporate Governance Guidelines, our Code of Conduct, and any amendments or waivers thereto; and any other corporate governance materials contemplated by the regulations of the SEC and the Nasdaq Global Select Market. These documents are also available in print by contacting our corporate secretary at our executive offices.

Unless the context indicates otherwise, the terms “we,” “our,” “ours,” “us,” and “our company” refer to Smith & Wesson Brands, Inc. and its consolidated subsidiaries. “Common stock” refers to the common stock, par value $.001 per share, of our company. Our most recently completed fiscal year ended on April 30, ~~2024~~2025, or fiscal ~~2024~~2025.

Our objective is to be the undisputed market leader in the firearm industry. Key elements of our strategy to achieve this objective and deliver long-term stockholder value are as follows:

•

drive organic growth by leveraging our brands and maintaining a robust product pipeline to increase market share in markets in which we participate;

•

design, produce, and market high-quality, innovative firearms and related accessories that meet the needs and desires of our consumer and professional customers and that drive customer satisfaction and loyalty;

•

create a leverageable infrastructure by streamlining and standardizing our business operations; and

•

deploy our cash flow in such a manner so as to maximize return on invested capital.

Strategy

Our objective is to be the undisputed market leader in the firearm industry. Key elements of our strategy to achieve this objective are as follows:

Drive Organic Growth by Leveraging Brands and Designing Innovative New Products

We are focused on driving organic growth by producing a robust new product pipeline and leveraging our brands to help us to increase market share in the markets in which we participate and to expand into adjacent and complementary markets by (1) capitalizing on the goodwill developed through our historic, more than 170 year old “Smith & Wesson” brand; (2) enhancing our relationships with distributors, key retailers, ~~distributors,~~ and buying groups; and (3) introducing new products. During the last two fiscal years, we have introduced numerous new products, including variations and product lines around the Smith & Wesson and Gemtech brands. We plan to continue to introduce new products in fiscal ~~2025~~2026.

Design, Produce, and Market High-Quality Products that Drive Customer Satisfaction and Loyalty

We are focused on designing, producing, and marketing high-quality, innovative firearms and related accessories that meet the needs and desires of our consumer and professional customers and that drive customer satisfaction and loyalty. Our research and development, product engineering, product sourcing, marketing, and distribution activities are critical components of our ability to offer successful products. We believe that by offering high-quality products and services on a timely and cost-effective basis, as well as providing world-class customer service, training, and support, we will drive customer satisfaction and loyalty. We regard our high-quality, innovative products as the most important aspect of our customer satisfaction and loyalty, but we also offer customer service and support with various programs, such as toll-free customer support numbers, e-mail customer question and answer communications, broad service policies, and product warranties.

Create a Leverageable Infrastructure by Streamlining and Standardizing our Business Operations

We intend to continue to streamline and standardize certain administrative functions of our business with a goal toward driving profitability and improving the ease with which our customers are able to do business with us. A streamlined and standardized approach requires investing in an integrated and configurable technology infrastructure in areas such as enterprise resource planning, or ERP, and compliance. We intend to continue investing in such systems to further enhance our efficiency, improve information reporting, and strengthen internal controls.

Deploy our Cash Flow in Such a Manner so as to Maximize Return on Invested Capital

During fiscal ~~2023~~2025 and ~~fiscal~~ 2024, we generated a total of $~~123~~99.5 million in cash from operations. During the same period, we invested $~~180~~112.87 million in cash to acquire property, equipment, and patents, of which $~~150~~84.03 million was to fund the Relocation, repurchased $1035.27 million of our outstanding stock, distributed $4045.41 million in dividends, and borrowed $4055.0 million from our revolving line of credit. We intend to continue our focus on developing, growing, and protecting our iconic firearm brands and using our cash flow from operations on actions that will maximize our return on invested capital, including by investing in machinery, equipment, and new product development.

Products

Introduction

Our products combine our legacy of more than 170 years of American manufacturing and engineering expertise with modern technological advances. Driven by the needs of the individual firearm owner, we continually strive to improve the experience of buying, owning, and shooting a firearm. We also strive to leverage our tradition of innovation in materials, performance, and engineering, along with our proven history of reliability, to produce feature-rich, safe, durable, accurate, and high-performing firearms that satisfy the needs of our broad range of customers. Our introduction of new products is intended to enhance our competitive position and broaden our participation in the overall market.

We have always been a leader in the revolver market. We have substantially enhanced the breadth and quality of our portfolio of products over the years. ~~We have always been a leader in the revolver market.~~ The introduction of our popular M&P pistol in 2005 resulted in us becoming one of the leaders in the polymer pistol market as well, serving both the consumer sporting goods market and law enforcement agencies. The launch of our M&P modern sporting rifle in 2006 enabled us to capture what we estimate is the leading share of the modern sporting rifle market. In 2023, we further expanded and strengthened our position in the broader long-gun market with the introduction of new pistol caliber carbine offerings, the M&P FPC and Response rifles. In 2024, we introduced our first ever lever-action rifle, the Model 1854. The addition of our Gemtech branded firearm suppressor products in 2017 expanded our firearm-related product offerings. Our firearm suppressors are compatible with most pistols and rifles on the market and complement our firearm products. We currently participate in three categories of the long gun market: semi-automatic rifles, lever-action rifles, and shotguns, and both core categories of the handgun market: semi-automatic pistols and revolvers.

Product Development

All of our firearms and firearm-related products are sold under our Smith & Wesson and Gemtech brands. Our customers include distributors; federal, state, and municipal law enforcement agencies and officers; government and military agencies; and retailers.

Our product development strategy is to understand our consumers’ needs and preferences and then design and develop products to uniquely meet those requirements. Throughout this process, we test multiple concepts with firearm owners and potential purchasers. We compare these test results against a growing database of prior concepts to identify those with the greatest market potential. We complete additional market research to optimize the desired features and benefits. While this development process is ongoing, our launch timing for new products depends on market conditions to maximize sales across the entire product portfolio.

In fiscal 2025, we introduced a number of new products, including (i) the BodyGuard 2.0, a micro handgun concealed carry pistol; (ii) several new variants of our Model 1854 Lever-Action Rifle series; (iii) the expansion of the M&P FPC in 40 caliber and 10mm; (iv) the CSX E-Series, our next generation offering of the hammer-fired, metal-framed CSX featuring several new upgrades and chambered in 9mm; (v) expansion of our revolver line to include several new no-lock Classic revolvers and our innovative Ultimate Carry revolvers; and (vi) the M&P 4, select-fire rifle, chambered in 5.56mm NATO. We received several innovation awards in 2024, including from Guns & Ammo magazine, NRA Publications, and the National Association of Sporting Goods Wholesalers.

InOur ~~fiscal~~customers ~~2024,~~continue weto ~~introduced~~demand apremium ~~number~~firearms ofthat ~~new~~provide ~~products,~~a ~~including~~competitive ~~(i)~~edge ~~our~~in ~~first~~sport ~~ever~~shooting ~~lever-action~~and ~~rifle,~~hunting. ~~the~~Our ~~Model~~Performance ~~1854,~~Center aproducts ~~.44~~are ~~Magnum~~engineered ~~offering~~and ~~that~~manufactured ~~includes~~to ~~many~~meet ~~modern~~this ~~day feature enhancements~~need, ~~such~~and asthey aincorporate ~~large~~many ~~lever~~custom ~~loop,~~features ~~flat~~not ~~faced~~found ~~trigger,~~in ~~Picatinny~~our ~~rail~~standard products, ~~and~~such ~~fore-end~~as ~~capable of~~ enhanced ~~customization;~~triggers ~~(ii)~~for ~~the~~smoother ~~Response~~trigger ~~rifle~~pull, ~~chambered~~ported inbarrels ~~9mm~~for ~~and~~better ~~featuring~~muzzle ~~our~~control, ~~proprietary~~and ~~Flex-Mag~~specialty ~~system;~~sights ~~(iii)~~for ~~the~~quicker ~~M&P~~target 22acquisition. ~~Magnum~~In ~~pistol~~fiscal 2025, ~~which~~we ~~features~~introduced our ~~unique~~fifth ~~Tempo~~annual ~~Barrel~~Performance ~~System~~Center ~~and~~Spec 30Series ~~round~~M&P ~~capacity;~~pistol. ~~(iv)~~This ~~the~~limited SDedition ~~2.0,~~2025 ~~our~~model ~~second~~features ~~generation~~a ~~value~~heavy-duty ~~pistol,~~steel ~~which~~frame ~~includes~~construction, an ~~upgraded~~integrated compensator, enhanced trigger and ergonomics, ~~chambered~~and ina ~~9mm;~~sharp ~~and~~aesthetic ~~(v)~~with ~~the~~Smith M&~~P15~~ ~~Sport~~Wesson ~~III,~~blue ~~our~~highlights. ~~third~~We ~~generation~~also ~~modern~~introduced ~~sporting~~several ~~rifle,~~line ~~which~~extensions ~~includes~~for ~~upgraded~~our ~~features,~~popular ~~such~~Performance asCenter aM&P9 ~~free~~Carry ~~floating~~Comp ~~hand~~lineup ~~guard~~that ~~and~~offers ~~enhanced~~premium ~~mid-length~~features, ~~gas~~including ~~system.~~an Weintegrated ~~received~~port ~~several innovation awards in 2023~~ and ~~2024,~~tuned ~~including~~trigger ~~from~~for ~~Guns~~reduced &felt ~~Ammo~~recoil ~~magazine~~ and ~~The~~better ~~National~~on-target ~~Association of Sporting Goods Wholesalers~~performance.

~~Our~~In ~~customers~~fiscal ~~continue~~2025, towe ~~demand~~also ~~premium~~introduced ~~firearms~~innovative ~~that~~new ~~provide a competitive edge in sport shooting and hunting. Our Performance Center~~ products ~~are engineered and manufactured to meet this need, and they incorporate many custom features not found~~ in our ~~standard~~Gemtech ~~products,~~line ~~such~~of asfirearm ~~enhanced triggers for smoother trigger pull~~suppressors, ~~ported~~including ~~barrels~~the ~~for~~Abyss ~~better~~5.56 ~~muzzle control,~~ and ~~specialty sights for quicker target acquisition. In fiscal 2024, we introduced~~ our ~~fourth~~Neutron ~~annual Performance Center Spec Series pistol~~7.62 ~~This~~in ~~limited~~direct ~~edition~~thread ~~2023 model features an integrated Faxon® compensator, an olive drab green finish, an enhanced trigger sear, four magazines, a karambit-style knife, and a collectible challenge coin~~models. ~~We also introduced several line extensions for our Performance Center M&P9 Competitor pistol, which is designed for high-level competitive shooting.~~

In fiscal 2024, we also introduced innovative new products in our Gemtech line of firearm suppressors, including the Abyss 7.62, which is a 6.6” firearm suppressor that features Gemtech's ETM (elite taper-mount) system. The Gemtech ETM muzzle device allows Gemtech suppressors to be mounted on a variety of different firearms. They are also available in different threads to accommodate a variety of different calibers.

Our net sales for fiscal 2024, 2023, and 2022 were $535.8 million, $479.2 million, and $864.1 million, respectively. Our gross profit for fiscal 2024, 2023, and 2022 totaled $158.1 million, $154.5 million, and $374.6 million, respectively. Total assets as of April 30, 2024 and 2023 were $576.3 million and $541.3 million, respectively.

Handguns

We manufacture an extensive variety of handgun models that includes revolvers and pistols. A revolver is a handgun with a cylinder that holds the ammunition in a series of rotating chambers that are successively aligned with the barrel of the firearm during each firing cycle. There are two general types of revolvers: single-action and double-action. To fire a single-action revolver, the hammer is pulled back to cock the firearm and align the cylinder before the trigger is pulled. To fire a double-action revolver, a single trigger pull advances the cylinder as it cocks and releases the hammer. A pistol is a handgun in which the ammunition chamber is an integral part of the barrel and which is fed ammunition from a magazine contained in the grip. The firing cycle ejects the spent casings and loads a new round into the chamber.

We have long been known as an innovator and leader in the revolver market and most of our revolvers are currently marketed under the Smith & Wesson brand. We sell a wide range of sizes from small-frame revolvers used primarily for concealed carry and personal protection to large-frame revolvers used primarily for recreational and competitive sport shooting. Our extra-large frame revolvers primarily address the handgun-hunting market.

Our small-frame revolvers have been carried by law enforcement personnel and personal defense-minded citizens for over 150 years. Our revolvers are available in a variety of models and calibers, with applications in virtually all professional and consumer markets. In fiscal ~~2024~~2025, we ~~introduced~~expanded aour ~~new~~ line of revolvers that ~~were~~are designed to enhance the personal carry experience, continuing our innovative leadership in the category. These Ultimate Carry revolvers are chambered in 38 Special and 32 H&R Magnum and feature enhanced grips, ~~sites~~sights, and triggers that are designed to enhance the shooting experience.

Our “Classics” department makes it possible to own historic firearms that are manufactured today but modeled after original favorites, such as the Model 29, which was made famous by the movie character Dirty Harry. These firearms are newly crafted with designs that take advantage of some of the most famous and collectible firearms that we have ever made. Our Classics department also makes commemorative firearms and employs master engravers to craft one of a kind custom firearms. These custom-made firearms are intended to reflect the skill and vision of the master engraver and the artistic expression of the owner. We offer a number of catalog variations of Classics and engraved Classics to our customers.

We offer pistols under our Smith & Wesson brand. Our full size and compact M&P line of pistol products have been engineered with input from professional users and are designed to offer performance, safety, and durability that meet the standards of global law enforcement and military personnel, as well as features attractive to consumers. We believe that our M&P branded pistol products are the most ergonomic, feature-rich, and innovative products on the market today. Our range of full-size and compact M&P pistol products are made with a polymer or aluminum frame, a rigid stainless-steel chassis, and a black, through-hardened corrosion resistant finished stainless-steel barrel and slide for durability. Our M&P pistol products feature patented and easily changed palm swell grips in four sizes, allowing the user to customize grips in a matter of seconds; a passive trigger safety to prevent the pistol from firing if dropped; an enlarged trigger guard to accommodate gloved hands; a sear lever release that eliminates the need to press the trigger in order to disassemble the firearm; an ambidextrous slide stop and reversible magazine release to accommodate right- and left-handed shooters; an optional internal locking system and magazine safety; and a universal equipment rail to allow the addition of accessories, including lights and lasers.

WeIn ~~offer~~fiscal ~~pistols~~2012, ~~under~~we ~~our~~entered ~~Smith~~the &growing ~~Wesson~~personal ~~brand.~~protection ~~Our full size~~ and ~~compact~~concealed ~~M&P~~carry ~~line~~market ~~of pistol products have been engineered~~ with ~~input from professional users and are designed to offer performance, safety, and durability that meet~~ the ~~standards~~launch of ~~global~~the ~~law enforcement and military personnel, as well as features attractive to consumers. We believe that our~~ M&P ~~branded~~Shield pistol ~~products are the most ergonomic, feature-rich, and innovative products on the market today~~. ~~Our~~The ~~range of full-size and compact~~ M&P ~~pistol~~Shield ~~products~~features ~~are~~a ~~made~~slim ~~with~~concealable aprofile, ~~polymer frame~~9mm, a380 ~~rigid~~Auto, ~~stainless-steel~~40 ~~chassis~~S&W, and a45 ~~black~~Auto calibers, ~~through-hardened corrosion resistant finished stainless-steel barrel~~ and ~~slide for durability. Our~~ M&P ~~pistol~~ergonomics. ~~products~~Since ~~feature patented and easily changed palm swell grips in four sizes, allowing~~ the ~~user~~launch ~~to customize grips in a matter~~ of ~~seconds; a passive trigger safety to prevent~~ the ~~pistol~~M&P ~~from~~Shield, ~~firing~~we ifhave ~~dropped;~~introduced anseveral ~~enlarged~~additional ~~trigger~~models, ~~guard~~including ~~to accommodate gloved hands; a sear lever release that eliminates~~ the ~~need~~Shield toPlus ~~press~~with ~~the~~enhanced ~~trigger~~features ~~in order to disassemble the firearm; an ambidextrous slide stop~~ and ~~reversible~~capacity, ~~magazine release to accommodate right-~~ and ~~left-handed~~most ~~shooters;~~recently, ~~an optional internal locking system and magazine safety; and a universal equipment rail to allow~~ the ~~addition~~award-winning ofBodyguard ~~accessories, including lights and lasers~~2.0.

InOur ~~fiscal~~Performance ~~2012,~~Center wedepartment ~~launched~~has ~~the~~been ~~M&P~~providing ~~Shield~~specialized ~~pistol~~products toand ~~address~~services for the ~~growing~~most ~~personal~~demanding ~~protection~~shooting ~~and~~sports ~~concealed~~enthusiasts ~~carry~~since ~~market~~1990. ~~The~~To ~~M&P~~meet ~~Shield~~the ~~features~~requirements aof ~~slim~~law ~~concealable~~enforcement ~~profile~~professionals, ~~9mm,~~competitive ~~380 Auto~~shooters, ~~40 S&W~~collectors, and 45discriminating ~~Auto~~sports ~~calibers,~~enthusiasts ~~and~~who ~~M&P~~demand ~~ergonomics.~~superior ~~Since~~products, ~~the~~our ~~launch~~Performance ofCenter ~~the~~personnel ~~M&P~~conceptualize, ~~Shield~~engineer, weand ~~have~~craft ~~introduced~~products ~~several~~to ~~additional~~create ~~models,~~enhanced ~~most~~versions ~~recently,~~of ~~the~~our ~~Shield~~standard ~~Plus~~products. ~~with~~Our ~~enhanced~~craftsmen ~~features~~are highly skilled and ~~capacity~~experienced gunsmiths. WePerformance ~~believe~~Center ~~the~~products ~~M&P~~are ~~Shield~~typically ~~pistol~~made isin ~~one~~limited ofproduction ~~the~~quantities, ~~most~~although ~~popular~~we ~~firearms~~offer ina ~~the~~number ~~market,~~of ~~with~~catalog ~~over~~variations ~~five~~in ~~million~~order ~~units~~to ~~shipped.~~increase product availability.

Our Performance Center department has been providing specialized products and services for the most demanding shooting sports enthusiasts since 1990. To meet the requirements of law enforcement professionals, competitive shooters, collectors, and discriminating sport enthusiasts who demand superior products, our Performance Center personnel conceptualize, engineer, and craft products to create enhanced versions of our standard products. Our craftsmen are highly skilled and experienced gunsmiths. Performance Center products are typically made in limited production quantities, although we offer a number of catalog variations in order to increase product availability.

Our “Classics” department makes it possible to own historic firearms that are manufactured today but modeled after original favorites, such as the Model 29, the firearm made famous by the movie character Dirty Harry. These firearms are newly crafted with designs that take advantage of some of the most famous and collectible firearms that we have ever made. Our Classics department also makes commemorative firearms and employs master engravers to craft one-of-a-kind custom firearms. These custom-made applications reflect the skill and vision of the master engraver and the artistic expression of the owner. We offer a number of catalog variations of Classics and engraved Classics to our customers.

Long Guns

Our modern sporting rifles are designed to satisfy the functionality and reliability needs of recreational, personal, defense, and professional users, including global military, law enforcement, and security personnel. These long guns are popular with consumers as hunting, personal protection, and sporting target rifles ~~and are sold through our sporting good distributors, retailers, and dealers~~. We offer two pistol caliber carbines, the M&P FPC chambered in 9mm, 40 S&W, and 10mm, and the Response, ~~both~~chambered in 9mm. We offer the M&P and Volunteer series modern sporting rifles in five different calibers (22LR, 5.56mm NATO (223), 308 Winchester (7.62x51mm), 6.5 Creedmoor, and 6mm ARC) ~~for multiple recreational and professional uses~~. We also offer upper assemblies so firearm owners can easily modify their modern sporting ~~rifle~~rifles to suit the needs and tasks of the various forms of sport shooting and hunting. Our broad product portfolio of modern sporting rifles includes a .22 caliber model, an opening price-point sport model, a hunting caliber model for longer range effectiveness, and several models designed for professional users.

In fiscal ~~2024~~2025, we continued to expand our ~~long~~lever-action ~~gun~~ offerings, ~~with~~building on the ~~introduction~~success of the Model 1854, which was introduced in fiscal 2024. This expansion included new caliber introductions in 45 Long Colt, 357 Magnum, and our first ~~ever lever~~long-action rifle, ~~the~~cartridge ~~Model~~offering ~~1854~~in 45-70 Government. The expansion also included our Stealth Hunter series.

We introduced the M&P 4 select-fire rifle, chambered in 5.56mm NATO, which is our first such offering to our law enforcement and military customers.

Other Products and Manufacturing Services

Our other products and manufacturing services include the following:

Parts: We sell parts to support our firearm business, including barrels and magazines that are manufactured at our facilities or purchased from third parties.

Handcuffs: We are one of the largest manufacturers of handcuffs and restraints in the United States. We fabricate these products from the highest-grade carbon or stainless steel. Our patented Lever Lock cuffs offer a double-locking system for added security and comfort, without extra tools or keys. Internal locks help prevent tampering and smooth ratchets allow for swift cuffing and an extra measure of safety. We have the ability to customize handcuffs to fit customer specifications.

Firearm Suppressors: We are one of the nation’s oldest firearm suppressor manufacturers and an active participant in the firearm suppressor market around the world. We believe our Gemtech branded firearm suppressors have been involved in setting standards used by the military in suppressor testing, implementation, and safety. Our firearm suppressors are constructed from high grade aluminum, steel, or titanium and are compatible with every major type of rimfire and centerfire pistol and centerfire rifle caliber currently on the market.

Manufacturing Services: We utilize our substantial manufacturing capabilities to provide services to third-party customers. Our manufacturing services include forging, heat treating, rapid prototyping, tooling, finishing, plating, machining, and custom plastic injection molding. We believe our manufacturing services provide us with increased flexibility and reduced supply chain risk. We also believe that business-to-business sales provide profitable revenue stream diversification and enable us to maximize capacity utilization of our manufacturing assets. We market our manufacturing services under the Smith & Wesson and Smith & Wesson Precision Components brand names.5

Manufacturing Services: We utilize our substantial manufacturing capabilities to provide services to third-party customers. Our manufacturing services include forging, heat treating, rapid prototyping, tooling, finishing, plating, and machining. We believe our manufacturing services provide us with increased flexibility and reduced supply chain risk. We also believe that business-to-business sales provide profitable revenue stream diversification and enable us to maximize capacity utilization of our manufacturing assets. We market our manufacturing services under the Smith & Wesson and Smith & Wesson Precision Components brand names.

Marketing, Sales, and Distribution

General

We go to market in a variety of ways, including two-step distribution, strategic retailers, and buying groups consisting of certain large, regional retailers, utilizing direct sales employees to service these customers. We also sell firearms directly to law enforcement agencies and manufacturing services directly to other businesses. We sell internationally, primarily through distributors, which, in turn, sell to retail stores and government agencies.

Our top five commercial distributors in the United States accounted for a total of ~~46.0~~45%, ~~44.0~~46%, and 44.3% of our net sales for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively. Those commercial distributors are not regionally exclusive and have many of the same dealer customers. Therefore, we believe that the loss of one or more of these distributors would not materially impact sales as the remaining distributors would be allocated additional sales.

We sell our products worldwide. International sales accounted for approximately 5%, 45%, and 34% of our net sales for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively. Our businesses own tooling that is located at various suppliers in Asia and North America.

For the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, marketing, advertising, and promotion expenses were $1415.72 million, $14.7 million, and $1714.57 million, respectively, excluding the cost of rebates and promotions reflected in gross profit.

We market our products using a multi-faceted approach to consumers through independent dealers, large retailers, in-store retail channels, direct to consumer, and range operations using focused marketing and promotional campaigns, which include print, broadcast, and digital advertising campaigns; social and electronic media; and in-store retail merchandising strategies. We are prominently featured in vertical print media, including editorial coverage in an extensive list of leading firearms and outdoor magazines, including Guns & Ammo, American Rifleman, Shooting Times, American Handgunner, Shooting Illustrated, American Hunter, Outdoor Life, and Field & Stream. We also sponsor many outdoor television, internet, and online programs that generate significant editorial exposure. We sponsor a number of firearm safety, shooting, and hunting events and organizations.

We print various product catalogs that are distributed to our dealers and mailed directly, on a limited basis, to consumers. We also attend various trade shows and expositions, such as the Shooting, Hunting, Outdoor Trade, (or SHOT) Show, the National Association of Sporting Goods Wholesalers ~~Show~~Annual Expo, the International Association of Chiefs of Police ~~Show~~Annual Conference & Expo, the Association of the United States Army ~~Show~~, or AUSA ~~Show~~, ~~the~~Annual ~~International~~Meeting ~~Weapons~~& ~~Exhibition Show~~Exposition, orthe IWA ~~Show,~~OutdoorClassics international trade fair in Europe, and various distributor, buying group, and consumer shows.

GUNSMARTS: The SMITH & WESSON GUNSMARTS program is designed to welcome new firearm owners into the firearm community and highlight key resources available to those who have just purchased their first pistol, rifle, or revolver. As a cornerstone of the campaign, we released a new video series devoted to helping inform, educate, and excite those who have recently joined the firearm community. Hosted on YouTube, the SMITH & WESSON GUNSMARTS video series covers a comprehensive set of topics that takes the viewer from the basics of firearm safety through their first trips to the range – all in a simple, inviting manner.

Digital Marketing

We utilize our websites, including www.smith-wesson.com and www.gemtech.com, to market our products and services and to provide a wide range of information regarding our company to customers, consumers, dealers, distributors, investors, and government and law enforcement agencies worldwide. Social media platforms, such as Facebook, Instagram, YouTube, LinkedIn, and X (formerly Twitter), are effective ways for us to communicate the features and benefits of our products. Our direct-to-consumer e-mail marketing helps us to further engage our consumers and communicate the value of our brands. We continue to invest in new digital marketing capabilities to provide best-in-class customer experiences. Our websites are designed to inform, inspire, and prepare our customers ~~for the next step in their firearms journey. We believe our digital platform supports future sales growth and profitability.~~

for the next step in their firearms journey. We believe our digital platforms support future sales growth and profitability. In fiscal 2025, we introduced a direct-to-consumer e-commerce website to offer non-serialized parts, accessories, and branded goods.

Service and Support

We utilize a variety of methods for supporting our consumers and dealers. We have a toll-free customer service number, e-mail, and social media messaging to answer questions and resolve issues regarding our products. In addition, we offer a limited one-year warranty program and a lifetime service policy under which we repair defects in material or workmanship in our products, without charge, for as long as the original purchaser owns the firearm. We also maintain a number of authorized warranty centers throughout the world and provide both warranty and charge repair services at our facilities.

Suppliers

We manufacture most of the components for our firearms, but purchase certain components and parts, including bolt carriers, rifle receivers, magazines, small parts, and rifle stocks, from third parties. We also purchase ammunition for product testing. Most of our major suppliers are U.S. based and provide materials, components, and parts, such as steel, polymer components, and metal-injected-molded components. The costs of these materials, components, and parts are at competitive rates. We have become less dependent on any particular supplier by strategically sourcing parts and raw material from multiple suppliers based on quality, cost, and risk. Whenever appropriate, we ensure that we have primary and secondary sources of supply for critical parts and components. We are also able to leverage our supply base to supplement our internal capacity and provide flexibility in our response to changes in market conditions. We use numerous raw materials, such as steel, wood, lead, brass, and plastics, in producing and testing our products. We have alternative sources for these raw materials.

Facilities

We have four manufacturing facilities at which we produce our products: a ~~575~~645,000 square-foot facility located in ~~Springfield~~Maryville, ~~Massachusetts~~Tennessee; a ~~645~~575,000 square-foot facility located in ~~Maryville~~Springfield, ~~Tennessee~~Massachusetts; and two facilities totaling 44,000 square-feet located in Houlton, Maine~~; and a 150,000 square-foot facility located in Deep River, Connecticut~~. We conduct ~~our~~plastic ~~handgun~~injection ~~and~~molding, ~~long gun manufacturing and some of our manufacturing service activities at our Springfield facility. During fiscal 2024~~assembly, ~~we began manufacturing~~ and distribution ~~activities~~services from our Maryville facility. ~~Our~~We ~~Houlton~~conduct ~~facility~~certain ~~is a~~ machining, ~~center only with no~~ assembly, ~~finishing, or small parts operations for our firearms. We also produce handcuffs~~ and ~~other~~manufacturing ~~restraint~~services ~~devices~~ at our ~~Houlton~~Springfield facility. We ~~use~~machine ~~our~~non-serialized ~~Deep~~firearm ~~River~~parts ~~facility~~and ~~for~~manufacture ~~custom~~handcuffs ~~plastic~~and ~~injection~~other ~~molding~~restraint ~~services,~~devices ~~rapid~~in ~~prototyping,~~our ~~and~~Houlton ~~tooling~~facilities. As part of the Relocation, we ~~intend~~discontinued ~~to discontinue~~ operations at the Deep River facility during fiscal 2025. All ~~but one~~ of these facilities are ISO 9001 certified. ~~We expect to obtain certification for the Maryville, Tennessee facility in fiscal 2025.~~

We perform ~~in our own facilities~~ most of the machining and all of the assembly, inspection, and testing of the firearms that we sell in our own facilities. We produce our major firearm components utilizing computer-assisted machines. Our skilled employees use sophisticated automated testing equipment to ensure the proper functioning of our firearms. Every firearm is test fired before shipment. Our ~~Springfield~~Maryville ~~and~~facility ~~Houlton~~operates ~~facilities~~primarily ~~operate~~on three shift patterns: a five day, 8-hour shift schedule. Our Springfield facility operates primarily on two shift patterns: a seven day, 12-hour rotating shift schedule and a five day, 8-hour shift schedule. Our ~~Maryville~~Houlton ~~and Deep River~~ facilities operate primarily on three shift patterns: a seven day, 12-hour shift schedule, a five day, 8-hour shift, and a four day, 10-hour shift schedule.

We are party to a lease agreement, dated October 26, 2017, between us and Ryan Boone County, LLC, or the Original Missouri Landlord, concerning certain real property located in Boone County, Missouri on which we had been operating our distribution center, or the Missouri Lease~~. The 633~~,~~000~~ ~~square~~as ~~foot~~well ~~facility,~~as ~~which~~a ~~was~~related ~~constructed~~payment ~~for us, was completed in 2018~~ and ~~then~~performance ~~sold and leased back to us. As discussed below~~guaranty, ~~until~~dated ~~January~~October 126, ~~2024~~2017, wein ~~were~~favor ~~a party to a sublease, pursuant to which American Outdoor Brands, Inc., our former wholly owned subsidiary, or AOUT, subleased from us 64.7%~~ of ~~this facility, or~~ the ~~Missouri~~Original ~~Sublease, under the same terms as the~~ Missouri ~~Lease~~Landlord. As part of the Relocation, on January 31, 2023, we entered into (i) an assignment and assumption agreement with American Outdoor Brands, Inc., our former wholly owned subsidiary, or AOUT (which became effective on January 1, 2024), pursuant to which AOUT assumed all of our rights, entitlement, and obligations in, to, and under the Missouri Lease, or the Assignment and Assumption Agreement, and (ii) an amended and restated guaranty in favor of RCS-S&W Facility, LLC, as successor in interest to the Original Missouri Landlord, pursuant to which Smith & Wesson Sales Company was added as a guarantor, or the Amended and Restated Guaranty. WeBecause ~~terminated~~of the ~~Missouri~~Amended ~~Sublease~~and asRestated ~~of January 1~~Guaranty, ~~2024.~~we Ascontinue ~~of April 30, 2024, income related~~ to ~~the~~account ~~Missouri~~for ~~Sublease~~this ~~was~~lease ~~$2.7~~as ~~million,~~we ofhave ~~which~~since ~~$1.3~~prior ~~million~~to ~~was~~the ~~recorded in general and administrative expenses and $1~~Relocation.4 ~~million~~Effective ~~was~~January ~~recorded in interest expense~~1, ~~net~~2024, inwe ~~our~~vacated ~~consolidated~~the ~~statements~~Missouri ofdistribution ~~income.~~

On January 5, 2024, we amended the lease for the Deep River facility to extend its term through January 4, 2025. We intend to occupy the facility at least through the current lease termination date. We do not believe there are any indications of impairment relating to assets being utilized at the Deep River facility as a result of our planned discontinuance of operations at the facility during fiscal 2025. 7

center. Assets from the Missouri distribution center that we could no longer use were sold to AOUT, and we relocated all remaining assets to our Maryville facility.

In addition, we relocated a portion of our plastic injection molding operations to the Maryville facility. As of April 30, 2025, the plastic injection molding machinery and equipment previously utilized in our Deep River facility had been relocated to the Maryville facility or disposed of. We did not recognize a material impairment related to the assets previously utilized at the Deep River facility.

We seek to minimize inventory costs through an integrated planning and production system. All facilities operate utilizing SAP, a fully integrated ERP system.

Research and Development

Through our advanced products engineering departments, we enhance existing products and develop new products for our business. Through our research and development personnel, we conceive, design, and develop potential products that we believe will be attractive to our customers and help address the needs, wants, and desires of our target consumer base. In so doing, we must seek to anticipate and respond to trends and shifts in consumer preferences by continually adjusting our product mix with innovative features and designs and marketing them in an effective manner. Prior to introducing any product, we assess its cost of production and delivery, estimate its potential sales volume and margin, and conduct vigorous prototype and production-quality sample testing. In fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, our gross spending on research activities relating to the development of new products was $79.36 million, $7.63 million, and $7.36 million, respectively. As of April 30, ~~2024~~2025, we had 3945 employees at our various facilities engaged in ongoing research and development activities for all of our brands.

Patents, Trademarks, and Copyrights

We recognize the importance of innovation and protecting our intellectual property. Accordingly, we own numerous patents related to our products. We apply for patents whenever we develop innovative new products, unique designs, or processes of commercial importance. We do not believe that our business is materially dependent on any single patent.

Because of the significance of our brand names, our trademarks, service marks, trade dress, and copyrights are also important to our business. We have an active global program of trademark registration, monitoring, and enforcement. We believe that our Smith & Wesson and Gemtech brands, ~~and~~including our S&W monogram trademarks, are known and recognized by the public worldwide and are important to our firearm business.

We intend to vigorously pursue and challenge infringements of our patents, trademarks, service marks, trade dress, and copyrights, as we believe the goodwill associated with them is a cornerstone of our branding strategy.

Competition

We encounter rigorous competition in the firearms industry from both domestic and foreign manufacturers. Although some competitors manufacture as wide a variety of firearms as we do, most of our competitors manufacture only certain types of firearms. We are one of the largest manufacturers of handguns, modern sporting rifles, and handcuffs in the United States. We compete primarily based upon innovation, quality, reliability, durability, price, performance, consumer brand awareness, and customer service and support. Our customer service organization is proactive in offering timely responses to customer inquiries. We believe we can effectively compete with all our present competitors. Our primary competitors are Colt, Ruger and Taurus in the revolver market; Glock, Ruger, Sig Sauer, Springfield Armory, and Taurus in the pistol market; ~~and~~ Daniel Defense, Diamondback, Ruger, Sig Sauer, and Springfield Armory in the semi-automatic rifle market; and Ruger and Henry in the lever-action rifle market.

Customers

We sell our products through a variety of federally licensed distribution channels. Depending upon the product or service, our customers include distributors; federal, state, and municipal law enforcement agencies and officers; government and military agencies; and retailers. We also sell non-serialized parts, accessories, and apparel to retail consumers through our new e-commerce platform.

We grant payment terms to most commercial customers ranging from 20 to 60 days. However, in some instances, we provide longer payment terms.

During fiscal ~~2024~~2025, sales into our professional channel accounted for approximately 89.0% of our net sales, which included state and local law enforcement agencies, the federal government, and international customers. The remaining 9291.0% of our net sales was through federal firearm licensees to domestic consumers.

Seasonality

Our business is seasonal with sales generally peaking in our fourth fiscal quarter, which ends April 30, as a result of most industry events and distributor shows normally scheduled during the early spring months. In addition, because of our operating schedule, which includes a summer and a winter shutdown of our manufacturing facilities, we have an increased number of operating days in our fourth fiscal quarter, which allows our shipping and production volumes to exceed other quarters. Seasonality, however, can be disrupted by external events, such as ~~COVID-19 during fiscal 2020, 2021, and 2022;~~ results of federal, state, and local elections; and periodic social and political unrest, crime, and other factors that may drive sales or impact channel inventories~~, which may slow or accelerate our sales~~.

Governmental Regulations of Firearms

Our business is primarily regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, which licenses the manufacture, sale, and import of firearms and firearm suppressors in the United States. The ATF conducts periodic audits of our facilities that hold federal firearms licenses.

9There are also various state laws, regulations, and local ordinances relating to firearm characteristics, features, sales, and firearm magazine capacities. Local firearm dealers must comply with federal, state, and local laws, regulations, and ordinances pertaining to firearm, firearm suppressor, and magazine sales within their jurisdictions. We manufacture several firearm models and magazines in various capacities that comply with those laws, regulations, and ordinances for sales in those states and localities. In Massachusetts, for example, there are regulations related to the weight of the trigger pull, barrel length, material strength, and independent testing of handguns. California, Connecticut, Maryland, New Jersey, and New York, as well as other states, the District of Columbia, and other localities, have similar laws, ordinances, and restrictions. In addition, certain states and the District of Columbia have implemented laws related to microstamping. Generally, these laws require any new pistols to contain a microstamping mechanism, which must be able to etch or imprint an array of characters that identify the make, model, and serial number of a pistol onto each cartridge case when the pistol is fired. No commercially produced firearm has utilized the microstamping process, which many consider to be infeasible, and we have no plans to utilize any microstamping feature in our firearms. While these microstamping laws do not currently restrict our product offerings as a result of ongoing viability studies or legal challenges, in the future, they may restrict our ability to sell our products into these jurisdictions.

There are also various state laws, regulations, and local ordinances relating to firearm characteristics, features, sales, and firearm magazine capacities. Local firearm dealers must comply with federal, state, and local laws, regulations, and ordinances pertaining to firearm, firearm suppressor, and magazine sales within their jurisdictions. We manufacture several firearm models and magazines in various capacities that comply with those laws, regulations, and ordinances for sales in those states and localities. In Massachusetts, for example, there are regulations related to the weight of the trigger pull, barrel length, material strength, and independent testing of handguns. California, Connecticut, Maryland, New Jersey, and New York, as well as other states, the District of Columbia, and other localities, have similar laws, ordinances, and restrictions. In addition, certain states and the District of Columbia have implemented laws related to microstamping. Generally, these laws require any new pistols to contain a microstamping mechanism, which must be able to etch or imprint an array of characters that identify the make, model, and serial number of a pistol onto each cartridge case when the pistol is fired. No commercially produced firearm has utilized the microstamping process, which many consider to be unfeasible, and we have no plans to utilize any microstamping feature in our firearms. While these microstamping laws do not currently restrict our product offerings as a result of ongoing viability studies or legal challenges, in the future, they may restrict our ability to sell our products into these jurisdictions.

Warnings and instructions concerning the safe operation of our firearms and firearm suppressors are contained in the Safety & Instruction Manuals included in all boxes in which firearms and firearm suppressors are shipped and are also available for download from our Smith & Wesson and Gemtech websites.

Environmental Health and Safety

We are subject to numerous federal, state, and local laws and regulations that regulate the health and safety of our workforce, including those regulations monitored by the Occupational Health and Safety Administration, or OSHA, the National Fire Protection Association, and the Department of Public Health. Though not exhaustive, examples of applicable regulations include confined space safety, walking and working surfaces, machine guarding, and life safety.

We are also subject to numerous federal, state, and local environmental laws and regulations concerning, among other things, emissions to the air; discharges to land, surface, subsurface strata and water; and the generation, handling, storage, transportation, treatment, and disposal of hazardous waste and other materials. These laws require us to make significant expenditures of both a capital and expense nature. Several of the more significant federal laws applicable to our operations include the Clean Air Act; the Clean Water Act; the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA; and the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, or RCRA.

We are required to remediate hazardous waste at our facilities. Currently, we own a designated site in Springfield, Massachusetts that contains two release areas, which are the focus of remediation projects as part of the Massachusetts Contingency Plan, or MCP. The MCP provides a structured environment for the voluntary remediation of regulated releases. We may be required to remove hazardous waste or remediate the alleged effects of hazardous substances on the environment associated with past disposal practices at sites not owned by us. We have received notice that we are a potentially responsible party from the Environmental Protection Agency and/or individual states under CERCLA or a state equivalent at two sites.

In our efforts to satisfy our environmental responsibilities and to comply with environmental laws and regulations, we have established, and periodically update, policies relating to the environmental standards of performance for our operations. We have in place programs that monitor compliance with various federal, state, and local environmental regulations. However, in the normal course of our manufacturing operations, we are subject to governmental proceedings and orders pertaining to waste disposal, air emissions, and water discharges from our operations into the environment. We regularly incur substantial capital and operating costs to comply with environmental laws, including remediation of known environmental conditions which we fund through cash flows from operations. We spent $1.7 million, $1.5 million, and $1.5 million in fiscal 2025, 2024 and ~~fiscal~~ 2023, respectively, on environmental compliance, primarily related to disposal fees and containers.

10In the normal course of our business, we may become involved in various proceedings relating to environmental health and safety matters, and we are currently engaged in an environmental investigation and remediation. Our manufacturing facilities are located on properties with long histories of industrial use, including the use of hazardous substances. We have identified soil and groundwater contamination at our Springfield facility that we continue to monitor and remediate, as appropriate. Based on the situation, an environmental reserve may be recorded based upon currently enacted laws and regulations, currently available facts, experience in remediation efforts, existing technology, and the ability of other potentially responsible parties or contractually liable parties to pay the allocated portions of any environmental obligations. As of April 30, 2025, we did not have an open environmental reserve recorded in our consolidated balance sheet.

In the normal course of our business, we may become involved in various proceedings relating to environmental health and safety matters, and we are currently engaged in an environmental investigation and remediation. Our manufacturing facilities are located on properties with long histories of industrial use, including the use of hazardous substances. We have identified soil and groundwater contamination at our Springfield facility that we continue to monitor and remediate, as appropriate. Based on the situation, an environmental reserve may be recorded based upon currently enacted laws and regulations, currently available facts, experience in remediation efforts, existing technology, and the ability of other potentially responsible parties or contractually liable parties to pay the allocated portions of any environmental obligations. As of April 30, 2024, we do not have an open environmental reserve recorded in our consolidated balance sheet.

Based on information known to us, we do not expect current environmental regulations or environmental proceedings and claims to have a material adverse effect on our consolidated financial position, results of operations, or cash flows. However, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or of the cost of resolution of future environmental health and safety proceedings and claims, in part because the scope of the remedies that may be required is not certain, liability under federal environmental laws is joint and several in nature, and environmental laws and regulations are subject to modification and changes in interpretation. Additional or changing environmental regulation may become more burdensome in the future, and any such development could materially and adversely affect us.

Human Capital

Creating a positive work environment for our employees is critical to our ability to successfully execute our strategy. We are committed to a strong, healthy culture focused on respect for all employees, creating and sustaining a family atmosphere united under a clear vision, with the understanding of each function and individual’s responsibility for team results, collective pride in our company and our industry, and shared rewards for results. In order to ensure that we embody our values and that our culture remains healthy and strong, we place significant focus on our human resources.

Training & Development

Attraction, development, and retention of employees is critical to our success. We offer training and development programs to encourage advancement from within, including the following:

•

tuition reimbursement for upundergraduate toor ~~100% of an employee’s~~ advanced ~~degree~~degrees;

•

computer numerical control, or CNC, machine ~~apprentice~~ training ~~at a local community college~~ in conjunction with a ~~state-funded~~local ~~program~~community college;

•

toolmaker apprentice training in conjunction with a state-funded program;

wastewater treatment operator training leading to licensure;

•

~~leadership~~reimbursement ~~effectiveness training~~ for ~~manufacturing~~continuing ~~managers~~professional ineducation ~~conjunction~~for ~~with~~our aprofessionally ~~state-funded~~licensed ~~program~~employees;

•

~~reimbursement~~other ~~for~~in-house ~~continuing~~and ~~professional~~cross-functional ~~education~~training ~~for~~to ~~our~~aid ~~professionally~~with ~~licensed~~career ~~employees~~advancement; and

•

~~other~~an ~~in-house~~intern ~~and~~program ~~cross-functional~~for ~~training~~college ~~to aid with career advancement~~students.

11We believe that this training and development leads to more valuable contributions and satisfaction for our employees within their existing roles and also positions employees for roles they aspire to attain. The intern program is intended to serve as a talent pipeline for future hires, as an opportunity for us to receive fresh perspectives and ideas, to introduce college students to our brand and increase positive employer branding, and to contribute to beneficial community engagement. Finally, we conduct periodic compliance and industry training for employees on various topics that are important to our business, including sexual harassment, anti-corruption, and cybersecurity, among others.

We believe that this training and development leads to more valuable contributions and satisfaction for our employees within their existing roles and also positions employees for roles they aspire to attain. Finally, we conduct periodic compliance and industry training for employees on various topics that are important to our business, including sexual harassment, anti-corruption, and cybersecurity, among others.

Equal Opportunity

Our Talent Acquisition team focuses on ensuring that our workforce is representative of the local communities in which we operate and that our business is open and welcoming to everyone. This commitment extends to all levels of our organization, including within senior management and our Board of Directors. We are committed to hiring qualified candidates without regard to race, religion, color, sex, sexual orientation, pregnancy, gender, age, national origin, ancestry, physical or mental disability, genetic information, or any other status.

AsOur ofTalent ~~April~~Acquisition 30team emphasizes recruiting and retaining a talented workforce with special focus on hiring veterans, whenever possible. Annual voluntary turnover for fiscal 2025, 2024, ~~our~~and ~~workforce~~2023 ~~consisted~~was ofapproximately ~~the~~15%, ~~following:~~16%, and 18%, respectively.

~~76%~~We ~~male~~utilize third-party tools and ~~24%~~databases ~~female;~~to review compensation practices on an annual basis to ensure we pay all employees fairly. We engage the services of benefit consultants to provide expert advice on the development of benefit designs and offerings, current market trends, exposure to loss, and various contract provisions. We also partner with various recruiting services to expand our ability to attract a qualified workforce, as needed.

50% female executive officers;

5% under 25 years old, 22% between 25-35 years old, 25% between 35-45 years old, 22% between 45-55 years old, 19% between 55-65 years old, and 7% over 65 years old; and

63% Caucasian, 22% Hispanic/Latino/Latina, 9% Black, 2% Asian, 2% undisclosed, 1% American Indian/Alaska Native, and 1% that identify as two or more races.

Our Talent Acquisition team emphasizes recruiting and retaining a talented and diverse workforce with special focus on hiring veterans, whenever possible. Annual voluntary turnover for fiscal 2024, 2023, and 2022 was approximately 8%, 12%, and 21%, respectively. We believe turnover for fiscal 2022 was impacted by our announcement of the Relocation.

We contract with a third party to review compensation practices on an annual basis to ensure we pay all employees equitably. We also partner with various recruiting services to expand our ability to attract a qualified workforce, as needed.

Health and Safety

Our Employee Assistance Program is supplemented by Cigna behavioral health tools in order to support employees’ mental, as well as physical health, needs.

We have a documented education and training plan to ensure employees are well trained on safety measures throughout the organization. We offer more than 55 different types of training, including lecture, classroom setting, and hands-on training to ensure our employees have the knowledge needed to ensure their safety, as well as the safety of others. The success of our training program has allowed us to maintain a relatively low level of safety claims and reduce lost work hours. Our calendar year 2023 and 2022 total recordable incident rate, or TRIR, of 1.6 and 2.3, respectively, and lost time incident rate, or LTIR, of 0.5 and 0.6, respectively, compares favorably to the latest OSHA industry data. According to OSHA, for our NAICS industry code, the calendar year 2022 and 2021 TRIR was 2.5 and 2.8, and the LTIR was 1.6 and 0.6, respectively. Our calendar year 2023 and 2022 near miss frequency rate was 0.3 and 1.0, respectively, and we did not have any fatalities in either year.11

12We have a documented education and training plan to ensure employees are well trained on safety measures throughout the organization. We offer more than 55 different types of training, including lecture, classroom setting, and hands-on training to ensure our employees have the knowledge needed to ensure their safety, as well as the safety of others. The success of our training program has allowed us to maintain a relatively low level of safety claims and reduce lost work hours. Our calendar year 2024 and 2023 total recordable incident rate, or TRIR, of 2.3 and 1.6, respectively, and lost time incident rate, or LTIR, of 0.6 and 0.5, respectively, compares favorably to the latest OSHA industry data. According to OSHA, for our NAICS industry code, the calendar year 2023 and 2022 TRIR was 2.3 and 2.5, and the LTIR was 0.6 and 1.6, respectively. Our calendar year 2024 and 2023 near miss frequency rate was 1.9 and 0.3, respectively, and we did not have any fatalities in either year.

Total Rewards

Competitive pay and benefits have always been a highlight of our employee experience. We offer comprehensive benefit programs to our employees that allow them flexibility of choice through our ~~Total~~total ~~Rewards~~rewards framework of pay and service recognition, health and wellness, financial well-being, work/life balance, culture and community, and learning and development.

We are committed to ensuring that all of our employees are paid a fair wage. To that end, we offer generous wages and benefits to our employees, including the following:

•

a comprehensive medical, dental, and vision plan for our employees and their families, for which we pay between 87% and 93% of the total cost;

•

a 401(k) plan with a company match of up to 3% of the first 6% contributed by the employee;

•

a profit-sharing plan in which employees can earn up to 15% of their eligible earnings based on company profits;

•

~~twelve~~individual ~~annual~~financial ~~holidays~~planning ~~and~~sessions with a ~~paid~~certified ~~time~~financial ~~off program, including paid sick and vacation time~~planner;

•

twelve annual holidays and a paid time off program;

•

paid and unpaid leaves of absence, including paid family and medical leave for employees working in qualified states;

•

flexible spending and health savings accounts;

•

life and disability insurance coverage;

•

employee stock purchase plan;

•

on-site cafeteria and fitness center;

•

~~Employee~~employee ~~Assistance~~assistance ~~Programs~~programs;

•

product discounts; and

•

license-to-carry subsidies and reimbursement for range membership fees.

Annual increases and incentive compensation for salaried and non-operations hourly employees are based on merit, which is communicated to employees upon hire and documented through our talent management program as part of the annual performance review process. Annual increases for hourly operations employees are based on a yearly market analysis for comparable jobs.

Headcount

As of April 30, ~~2024~~2025, we had 1,~~509~~416 employees, including ~~eight~~eleven part-time employees. None of our employees are represented by a union in collective bargaining with us. Of our employees, 3630% have 10 or more years of service with our company and 3% have greater than 25 years of service with our company. We believe that our employee relations are good and that the high quality of our employee base is instrumental to our success.

Information About our Executive Officers

The following table sets forth certain information regarding our executive officers:

Name	Age	Position
Mark P. Smith	4849	President and Chief Executive Officer
Deana L. McPherson	5354	Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary
Kevin A. Maxwell	4849	Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary
Susan J. Cupero	64	Vice President, Sales
Susan J. Cupero (a)	65	Vice President, Sales

(a)

13Ms. Cupero retired on May 5, 2025.

Mark P. Smith has served as President and Chief Executive Officer since 2020. Mr. Smith served as Co-President and Co-Chief Executive Officer from January 2020 to August 2020. Mr. Smith served as President, Manufacturing Services of our company and as President of Manufacturing Services for Smith & Wesson Sales Company (formerly known as American Outdoor Brands Sales Company and Smith & Wesson Corp.), a subsidiary of our company, from 2016 until 2020. Mr. Smith served as Vice President of Manufacturing and Supply Chain Management from 2011 until 2016 and served as Vice President of Supply Chain Management from 2010 until 2011. He was Director Supply Chain Solutions for Alvarez & Marsal Business Consulting, LLC from 2007 until 2010. Mr. Smith held various positions for Ecolab, Inc., a developer and marketer of programs, products, and services for the hospitality, foodservice, healthcare, industrial, and energy markets, from 2001 until 2007, including Program Manager, Acquisition Integration Manager, Senior Manufacturing Planner, Plant Engineer, and Senior Production / Quality Supervisor. Mr. Smith was a Production Supervisor for Bell Aromatics, a manufacturer of flavors and fragrances, from 1999 until 2001.

Deana L. McPherson has served as Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary since 2020. Ms. McPherson served as Vice President, Chief Accounting Officer, Corporate Controller, and Assistant Treasurer from 2017 to 2020. Ms. McPherson served as Vice President, Corporate Controller, and Assistant Treasurer from 2009 to 2017. Ms. McPherson served as Corporate Controller from 2007 to 2009. From 2001 to 2007, Ms. McPherson held a number of increasingly responsible positions for Wood Group PLC, a $5.0 billion international energy services company, including, at her departure, Vice President of Finance for the Heavy Industrial Turbines division. From 1995 to 2001, she served as Accounting Manager of FiberMark DSI, Inc. (formerly Rexam DSI, Inc.), a producer of specialty fiber-based materials in the paper and packaging industry. From 1992 to 1995 she was employed as an auditor at Deloitte & Touche LLP. Ms. McPherson is a Certified Public Accountant registered with the Commonwealth of Massachusetts.

Kevin A. Maxwell has served as Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary since 2021. From 2016 to 2021, he served in leadership positions within the legal department of WestRock Company, a publicly traded paper and packaging company, including as Vice President – Associate General Counsel and Assistant Secretary. From 2010 to 2016, Mr. Maxwell held a number of increasingly responsible positions with Mueller Water Products, Inc., a publicly traded water infrastructure company, including, Vice President – Assistant General Counsel and Assistant Secretary. From 2004 to 2010, he served as a corporate associate in the London and Washington, DC offices of Skadden, Arps, Slate, Meagher & Flom.

Susan J. Cupero ~~has~~ served as Vice President of Sales of our company ~~since~~from 2021 until her retirement in May 2025. Ms. Cupero ~~has~~ held increasingly higher positions with our company during her 45 years of service, including Director of Independent Distributors from 2017 until ~~assuming her current position~~2021, and Director of Sales Administration from 2015 until 2017.

Item 1A. Risk Factors:

The following summarizes the material risks of purchasing or owning our common stock. Additional unknown risks may also adversely impact our business, operating results, and financial condition. Our business, operating results, and financial condition may be materially and adversely affected by the nature and impact of the risks discussed below, as well as additional unknown risks, in which case the trading price of our common stock could be adversely affected, and investors may lose part or all of the value of their investment. You should carefully consider the risks and uncertainties described below.

We have grouped these risk factors into the following general categories:

•

Risks relating to economic, political, social, legislative, regulatory, and inflationary factors.

•

Risks relating to manufacturing, the Relocation, raw materials and component supply, product development and performance, customer demand, and brand recognition.

•

Risks relating to legal proceedings, product recalls, and other product liabilities.

•

Risks relating to intellectual property, information systems, and cybersecurity.

•

Risks relating to certain business matters and securities markets.

Risks Relating to Economic, Political, Social, Legislative, Regulatory, and Inflationary Factors

Our performance is impacted by a variety of economic, political, social, legislative, regulatory, and inflationary factors.

A variety of economic, political, social, legislative, regulatory, and ~~regulatory~~inflationary factors could materially and adversely affect our business, operating results, and financial condition.

Our business may be adversely impacted by general economic conditions and consumer spending patterns. Consumer spending on discretionary items and demand for our products may be adversely impacted by a number of economic factors, including economic uncertainty, high levels of unemployment, declines in consumer confidence and discretionary income, lack of consumer credit, increases in consumer debt levels, stock market declines, poor weather conditions, high energy prices, increased energy and commodity prices, higher costs for materials and services, high levels of tax, interest rates, inflationary conditions, and increased labor costs. Economic conditions also affect governmental and budgetary policies, which may adversely affect our ability to sell our products to law enforcement, government, and military customers.

Our business may be adversely impacted by political, social, and related factors. Concerns about presidential, congressional, state, and local elections, and legislative and public policy shifts resulting from those elections, can adversely affect demand for our products. For example, we believe demand for our products was negatively impacted by unified Republican control of the executive and legislative branches of the federal government during the first two years of the first Trump administration and we believe demand for our products is currently being, and may becontinue ~~negatively~~to be, impacted by unified Republican control of the ~~results~~executive and legislative branches of the ~~2024~~federal ~~elections~~government, in each case, as a result of the reduced risks of gun control legislation and regulation. In addition, speculation surrounding increased gun control at the federal, state, and local level and heightened fears of crime and terrorism can affect consumer demand for our products. These concerns often result in an increase in near-term consumer demand for our products and subsequent softening of demand when these concerns subside. For example, we experienced historic levels of demand for our products in parts of fiscal 2022 and 2021 as a result of the impact of COVID-19 and the social unrest experienced in the United States during the summer of ~~calendar~~ 2020., ~~Demand~~with demand for our products subsequently ~~returned~~returning to more normalized levels. As a result of these significant fluctuations in demand, our operating results can vary significantly from period to period and we may build and maintain inventory levels that are significantly in excess of customer demand.

Federal and state legislatures frequently consider laws relating to the regulation of firearms, including the amendment or repeal of existing laws. Existing laws may also be affected by future judicial rulings and interpretations. Changes to existing laws or the enactment of new laws may seek to restrict the makeup of firearms, including limiting magazine capacity; mandating the use of certain technologies in a firearm; removing existing legal defenses in lawsuits; setting minimum age limits to purchase certain firearms; or banning the sale and, in some cases, the ownership of various types of firearms and accessories. For example, certain states and the District of Columbia restrict magazine capacity. Further, a number of states have adopted some form of so called "gun industry accountability" laws that attempt to facilitate the filing of civil lawsuits by the respective state government or private individuals against certain industry participants. Other states are considering adopting similar laws. Interest in gun control legislation among federal and state legislatures tends to intensify following significant events, such as mass shootings. If restrictive laws or restrictive changes to existing laws are adopted, we could find it difficult, expensive, or even impossible to comply with such laws, which could impede our ability to develop new products and distribute existing products. In addition, gun-control activists may succeed in imposing restrictions or an outright ban on private firearm ownership or particular firearm models, such as modern sporting rifles. Such restrictions or bans could have a material adverse effect on our business, operating results, and financial condition.14

InFederal ~~addition~~and state legislatures frequently consider laws to ~~these~~regulate ~~matters~~firearms, ~~which~~including ~~are~~the ~~largely~~amendment ~~beyond~~or ~~our~~repeal ~~control,~~of ~~demand~~existing ~~for~~laws. ~~our~~Existing ~~products~~laws may also be ~~adversely~~affected ~~impacted~~ by ~~shortages~~future ofjudicial ~~ammunition~~rulings ~~since~~and ~~potential~~interpretations. ~~purchasers~~Changes to existing laws or the enactment of ~~our~~new ~~products~~laws may ~~choose~~seek ~~not~~ to ~~purchase~~restrict ~~our~~the ~~products~~makeup ~~unless~~of ~~supplies~~firearms, including limiting magazine capacity; mandating the use of certain technologies in a firearm; removing existing legal defenses in lawsuits; or banning the sale and, in some cases, the ownership of various types of firearms and accessories. For example, certain states (i) prohibit the sale of modern sporting rifles; (ii) restrict magazine capacity; or (iii) have adopted some form of so called "gun industry accountability" laws that attempt to facilitate the filing of civil lawsuits by the respective state government or private individuals against certain firearm industry participants. Certain states have also raised the minimum age for buying firearms and begun levying excise taxes on firearm, firearm component, and ammunition sales. Interest in gun control legislation among federal and state legislatures tends to ~~use~~intensify following significant events, such as mass shootings. If restrictive laws or restrictive changes to existing laws are adopted, we could find it difficult, expensive, or even impossible to comply with such laws, which could impede our ability to develop new products ~~are~~and ~~available~~distribute existing products, and it may become more difficult or costly to purchase our products. ~~Since~~ weIn doaddition, ~~not~~gun-control ~~manufacture~~activists ~~ammunition~~may succeed in imposing restrictions or an outright ban on private firearm ownership or particular firearm models, ~~the~~which ~~supply~~could ofhave ~~ammunition~~a ismaterial ~~beyond~~adverse effect on our ~~control.~~business, operating results, and financial condition.

15In addition to these matters, which are largely beyond our control, demand for our products may also be adversely impacted by shortages of ammunition since potential purchasers of our products may choose not to purchase our products unless supplies of ammunition to use with our products are available. Since we do not manufacture ammunition, the supply of ammunition is also beyond our control.

Our business is subject to extensive regulation.

Firearms Compliance.

Our business, as well as the business of all manufacturers and marketers of firearms and firearm parts, is subject to numerous federal, state, local, and foreign laws, regulations, and protocols, including ATF rules and regulations. If we fail to comply with ATF rules and regulations, the ATF may limit our activities or growth, fine us, or, ultimately, put us out of business.

The manufacture, sale, and purchase of firearms are subject to extensive federal, state, and local governmental regulation. The primary federal laws are the National Firearms Act of 1934, or NFA, the Gun Control Act of 1968, or GCA, and the Firearms Owners’ Protection Act of 1986, which have been amended from time to time. The NFA severely restricts the private ownership of fully automatic weapons and heavily regulates other firearms defined in that law and accompanying regulations, including firearm suppressors. The GCA places certain restrictions on interstate firearm sales, among other things. Most of our exported products are governed by the U.S. Department of Commerce and regulated by its Bureau of Industry and Security, or BIS, under the Export Administration Regulations. Certain of our exported products are governed by the U.S. Department of State and subject to the International Traffic in Arms Regulations. We are generally required to obtain U.S. government authorization for exports, including licensure or other similar authorization prior to engaging in international transactions. The U.S. government has discretion as to whether to grant a license. In addition, Congress may block a proposed sale of firearms that are export controlled by the Department of State valued at $1 million or more. Consequently, we may not be able to obtain export licenses or complete profitable contracts as a result of political or other reasons that are beyond our control. In ~~April~~May 2024, ~~BIS announced~~ new BIS rules ~~(which~~took ~~became~~effect ~~effective in May 2024)~~ that, among other things, led to the revocation of certain of our previously valid licenses that authorized firearm exports to non-government end users in countries deemed "high risk" by the State Department and otherwise imposed significant changes on the licensing requirements for many firearms exports. These new restrictions ~~have~~ negatively impacted, ~~and will likely continue to negatively impact,~~ our international sales. Failure to receive required licenses or authorizations, or the termination or suspension of our export privileges, could have a material adverse effect on our business, operating results, and financial condition. Export control laws also impact the ability of certain individuals to work in our facilities in most positions. Further, because our manufacturing process includes certain toxic, flammable, and explosive chemicals, we are subject to the Chemical Facility Anti-Terrorism Standards, as administered by the Department of Homeland Security, which requires that we take additional reporting and security measures related to our manufacturing process.

In addition to federal requirements, state and local laws and regulations may place additional restrictions or prohibitions on firearm ownership and transfer. These laws and regulations vary significantly from jurisdiction to jurisdiction. Some states or other governmental entities have enacted, and others are considering, laws restricting or prohibiting the ownership, use, sale, or importation of certain categories of firearms, firearm suppressors, ammunition, and ammunition feeding devices~~, or all of these products~~. For example, certain states have adopted restrictions on the sale of modern sporting rifles, and other states are considering adopting similar laws. Several states require internal or external locking mechanisms for firearms sold in their jurisdictions. Some states mandate, or are considering mandating, certain design features based on perceived safety or other grounds. California maintains a roster of handguns that are certified for sale in the state. Certain of our products have been removed from the roster in the past (meaning that they can no longer lawfully be sold by retailers) and may be removed in the future. Finally, our ability to sell our products in international markets is impacted by local laws, rules, and regulations in those markets. For example, Canada recently banned the sale, purchase, or transfer of handguns within Canada, subject to certain exceptions. Such laws could have a material adverse effect on our business, operating results, and financial condition.

Existing industry protections may be repealed or affected by judicial rulings. For example, the Protection of Lawful Commerce in Arms Act of 2005, or the PLCAA, was enacted by Congress in 2005 in order to protect firearms manufacturers and dealers from liability when their legally manufactured and lawfully sold products are later used in criminal acts. The PLCAA (or the state law equivalent of the PLCAA) could be repealed, amended, or affected by future judicial rulings and interpretations. If the PLCAA (or the state law equivalent of the PLCAA) were repealed, amended, or reinterpreted, firearm manufacturers could face a significant increase in litigation, which could have a material adverse effect on our business, operating results, and financial condition. 15

16rifles, and other states are considering adopting similar laws. Some states mandate, or are considering mandating, certain design features based on perceived safety or other grounds. California maintains a roster of handguns that are certified for sale in the state, and other states have adopted or are considering adopting similar rosters. Certain of our products have been removed from the California roster in the past (meaning that they can no longer lawfully be sold by retailers) and may be removed in the future. Finally, our ability to sell our products in international markets is impacted by local laws, rules, and regulations in those markets. For example, Canada has banned the sale, purchase, or transfer of various firearms within Canada, subject to certain exceptions. Such laws could have a material adverse effect on our business, operating results, and financial condition.

Existing industry protections may be repealed or affected by judicial rulings. For example, the Protection of Lawful Commerce in Arms Act of 2005, or the PLCAA, was enacted by Congress in 2005 to protect firearms manufacturers and dealers from liability when their legally manufactured and lawfully sold products are later used in criminal acts. The PLCAA (or state law equivalents of the PLCAA) could be repealed, amended, or affected by future judicial rulings and interpretations. If the PLCAA (or state law equivalents of the PLCAA) were repealed, amended, or reinterpreted, firearm manufacturers could face a significant increase in litigation, which could have a material adverse effect on our business, operating results, and financial condition.

Environmental Compliance.

We are subject to numerous federal, state, and local laws that regulate or otherwise relate to the protection of the environment, including the Clean Air Act, the Clean Water Act, CERCLA, and the Solid Waste Disposal Act, as amended by RCRA. CERCLA and RCRA and related state laws subject us to the potential obligation to remove or mitigate the environmental effects of the disposal or release of certain pollutants at our manufacturing facilities and at third-party or formerly owned or leased sites at which contaminants generated by us may be located. We have incurred and expect to continue to incur expenditures in order to comply with these requirements. Further, we may become subject to governmental proceedings and orders pertaining to waste disposal, air emissions, and water discharges.

We may not have identified all existing contamination on our properties, and our operations may cause contamination in the future. As a result, we could incur additional costs to clean up contamination that exceed the amount of our reserves, and our reserves may increase from time to time. Furthermore, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or the cost to satisfy future regulatory proceedings and claims.

We could also be adversely affected by future laws and regulations related to climate change, including laws related to greenhouse gas emissions. These laws and regulations could lead to increased environmental compliance costs and increased energy and raw materials costs, in addition to other impacts.

Employment and Occupational Health and Safety Compliance.

We are subject to a number of employment and occupational health and safety laws and regulations, including the Fair Labor Standards Act and the Occupational Safety and Health Act and the rules and regulations promulgated thereunder, that could significantly increase our operating costs and reduce our operational flexibility. ~~For~~In ~~example~~2024, we ~~have~~settled ~~reached~~ a ~~settlement~~matter ~~(which~~involving ~~was preliminarily approved by~~ the ~~court~~alleged ~~in March 2024) with a proposed class of current and former employees who filed a claim alleging~~ non-payment of wages and overtime in violation of the Massachusetts Wage Act and Massachusetts Minimum Fair Wage ~~Act~~Law.

Corruption Compliance.

The Foreign Corrupt Practices Act of 1977, or FCPA, and local anti-corruption laws, among other things, prohibit companies and their intermediaries from making improper payments to government officials for the purpose of influencing official decisions. Our efforts to comply with the FCPA, or other applicable anti-corruption laws and regulations, may cause us to limit our international business activities, or result in reducing or impeding our sales growth in numerous foreign countries. Further, our internal control policies and procedures, or those of our vendors, may not adequately protect us from reckless or criminal acts committed or alleged to have been committed by our employees, agents, or vendors. Any such violations could lead to civil or criminal monetary and non-monetary penalties and/or could damage our reputation.

Privacy Compliance.

Changing privacy laws in the United States ~~(where~~, ~~among others, the California Consumer Privacy Act became effective in 2020 and its expansion and amendment, the California Privacy Rights Act, became effective January 1, 2023),~~ Europe ~~(where the General Data Protection Regulation became effective in 2018)~~, and elsewhere have created new individual privacy rights, imposed increased obligations on companies handling personal data, and increased potential exposure to fines, litigation, and penalties. In 2025, a purported class action matter was filed against us, alleging, among other things, violations of the California Invasion of Privacy Act.

Compliance with laws, regulations, and other requirements, including those discussed above, is costly and time consuming, and our failure to comply could cause us to incur fines and penalties, lead to restrictions on our ability to manufacture and sell our products and services, or otherwise negatively impact our ability to import or export the products that we sell. Allegations that we have failed to comply with these laws, regulations, and other requirements could also expose us to litigation and harm our reputation. In addition, these laws, regulations, and other requirements may change or be applied or interpreted in ways that will require us to modify our products, subject us to enforcement risk, expose us to reputational harm, or impose on, or require us to incur, additional costs, including substantial compliance costs, which may materially and adversely affect our business, operating results, and financial condition.

We face risks associated with international activities.

Our foreign sales and purchases of certain components expose us to various economic, political, and other risks, including the following:

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compliance with U.S. and local laws and regulatory requirements, including adverse changes in those laws and requirements;

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transportation delays or interruptions;

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foreign exchange rate fluctuations;

•

limitations on imports and exports – In ~~April~~ 2024, ~~BIS announced~~ new BIS rules ~~(which~~took ~~became~~effect ~~effective in May 2024)~~ that, among other things, led to the revocation of certain of our previously valid licenses that authorized firearm exports to non-government end users in countries deemed “high risk” by the State Department and otherwise imposed significant changes on the licensing requirements for many firearms exports;

•

imposition of restrictions on currency conversion or the transfer of funds;

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the possibility of appropriation of our assets without just compensation;

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taxes, tariffs, and duties;

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the burdens and costs of compliance with a variety of foreign laws; and

•

political or economic instability in countries in which we conduct business, including possible terrorist acts.

Any one or more of these risks could materially and adversely affect our business, operating results, and financial condition.

We are exposed to protectionist trade restrictions, including tariffs and potential trade laws.

The federal government has, at times, put in place tariffs and other trade restrictions with respect to other countries, including limiting trade and imposing tariffs on imports from foreign countries. In addition, other countries have, at times, threatened or put in place tariffs of their own. For example, in April 2025, the United States announced the imposition of worldwide reciprocal and other tariffs on its trading partners, and in response to the United States' actions, many of the United States' trading partners announced retaliatory tariffs.

We are currently subject to tariffs on certain of our products, and other of our products could become subject to tariffs in the future. Protectionist trade restrictions, such as changes in tariff structures, export or import compliance laws, or other trade policies in the United States or foreign countries could reduce our ability to sell our products in foreign markets, negatively impact the ability of foreign customers to purchase our products, ~~and our ability to import products, components, and raw materials from foreign suppliers. Tariffs that result in increased costs or~~ adversely ~~impact~~affect ~~the availability of imported products, components, or raw materials used in the production of~~ our products could materially and adversely impact our business, operating results, and financial condition. In particular, increased input costs may require us to increase the prices of our products, which may result in lower demand for our products or lower gross margins on such products if we are unable to increase the price of those products to our customers. In addition, the imposition of tariffs on products that we export to international markets could make those products more expensive compared to those of our competitors if we pass the additional costs on to our customers, which may also adversely impact our business.

~~Rising inflation has adversely affected us, and may continue to adversely affect us, by increasing material, labor, and other costs beyond what we can recover through price increases.~~17

~~Inflation~~ability ~~can~~to ~~adversely~~import ~~affect us by increasing material~~products, ~~labor~~components, and ~~other~~raw ~~costs~~materials ~~required~~from toforeign ~~operate~~suppliers, and ~~grow~~interfere with our ~~business~~supply chain. ~~Many~~Tariffs ofthat ~~the~~result ~~markets~~ in ~~which~~increased wecosts ~~sell~~or ~~our~~adversely impact the availability of imported products, ~~including~~components, ~~our~~or ~~primary~~raw ~~market~~materials used in the ~~United~~production ~~States,~~of ~~have~~our ~~experienced,~~products ~~and~~could ~~continue~~materially toand ~~experience~~adversely ~~high~~impact ~~levels~~our ofbusiness, ~~inflation~~operating results, ~~which~~and wefinancial ~~believe~~condition. ~~have~~In ~~depressed~~particular, ~~and~~increased input costs may ~~continue~~require us to ~~depress~~increase the prices of our products, ~~consumer~~which may result in lower demand for our products ~~and~~or ~~have~~lower ~~reduced,~~gross ~~and~~margins ~~may~~on ~~continue~~such products if we are unable to ~~reduce,~~increase the price of those products to our ~~profitability~~customers. ~~For~~In ~~example~~addition, inthe ~~response~~imposition toof ~~inflationary~~tariffs ~~pressures,~~on products that we ~~have~~export ~~increased~~to ~~the~~international ~~rate~~markets ofcould ~~pay~~make ~~for~~those ~~certain~~products ofmore ~~our~~expensive ~~hourly~~compared ~~job~~to ~~categories~~those ~~and~~of ~~have~~our ~~experienced~~competitors ~~increases~~if inwe pass the ~~cost~~additional ofcosts ~~certain~~on ofto ~~the~~our ~~components~~customers, ~~parts,~~which ~~raw~~may ~~materials,~~also ~~and~~adversely ~~other~~impact ~~supplies~~our business.

18High levels of inflation have adversely affected us and may continue to adversely affect us.

Many of the markets in which we sell our products, including our primary market in the United States, have experienced high levels of inflation. We believe high levels of inflation have depressed, and may continue to depress, consumer demand for our products as certain firearm consumers have traded down to purchase lower-priced firearms or delayed purchases due to cost concerns. Inflation can also adversely affect us by increasing material, labor, and other costs required to operate and grow our business, which we believe has reduced, and may continue to reduce, our profitability. For example, in response to inflationary pressures, we have experienced increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future. Because we typically purchase these supplies based on short-term commitments from our suppliers, we are exposed to risks associated with significant levels of cost inflation. If we are unable to increase our prices to offset the effects of inflation, our business, operating results, and financial condition could be materially and adversely affected.

Risks Relating to Manufacturing, the Relocation, Raw Materials and Component Supply, Product Development and Performance, Customer Demand, and Brand Recognition

We must continue to introduce new products that are successful in the marketplace.

Our success depends on our ability to continue to conceive, design, produce or source, and market in a timely manner a continuing stream of innovative new products that appeal to consumers, achieve market acceptance, and drive customer satisfaction and loyalty. ~~The~~New product development ofcan ~~new~~be ~~products is~~ a lengthy and costly process. Any new products that we develop and introduce to the marketplace may be unsuccessful in achieving customer or market acceptance or may achieve success that does not meet our expectations for a variety of reasons, including delays in introduction, unfavorable cost comparisons with alternative products, unfavorable customer or consumer acceptance, and unfavorable performance. Our business, operating results, and financial condition could be materially and adversely affected if we fail to introduce new products that consumers want to buy or we incur significant expenses related to proposed new products that prove to be unsuccessful for any reason.

Consumer preferences include the choice of sales channels. In 2025, we launched a direct-to-consumer e-commerce website for certain apparel and firearm accessories. Legal and regulatory restrictions apply to the sale of certain of the products offered (such as magazines) through our e-commerce website. As a result, we may be unable to sell or may choose not to sell certain products through our e-commerce website, and any changes in applicable federal or state laws or regulations may impact our ability to sell our products through our e-commerce website. Our efforts to increase our sales on our e-commerce website may not be successful.

We are subject to risks associated with the Relocation.

In connection with the Relocation, we continue to be subject to a number of risks, including those associated with meeting the ~~following:~~spending, headcount, and wage commitments required to receive and/or retain certain governmental incentives associated with the Relocation and our ability to effectively implement and utilize productivity enhancements, including those related to automation. In addition, we have experienced, and may continue to experience, increased employee turnover and challenges in recruiting employees and retaining existing employees. This turnover may have resulted in, and may continue to result in, the loss of valuable historical knowledge concerning our business and its operations. In particular, we may be unable to recruit employees with the requisite skills to work at our Maryville facility, and we may struggle to recruit and retain employees to work in our Springfield facility,

~~we may not meet the spending, headcount, and wage commitments that we are required to meet in order to receive certain governmental incentives associated with the Relocation;~~18

wewhich ~~may~~has ~~not~~been ~~effectively~~significantly ~~implement~~impacted ~~and~~by ~~utilize~~the ~~productivity~~Relocation. ~~enhancements,~~Any ~~including~~one ~~those~~or ~~related~~more of these risks could cause us to ~~automation;~~fail ~~and~~to realize the expected benefits of the Relocation.

we have experienced, and may continue to experience, increased employee turnover and challenges in recruiting employees and retaining existing employees. This turnover may have resulted in, and may continue to result in, the loss of valuable historical knowledge concerning our business and its operations. In particular, we may be unable to recruit employees with the requisite skills to work at our Maryville facility, and we may struggle to recruit and retain employees to work in our Springfield facility, which has been significantly impacted by the Relocation.

Any one or more of these risks could cause us to fail to realize the expected benefits of the Relocation.

Our operating facilities are critical to our success, and we may incur business disruptions.

We operate in only four facilities located in three locations, and our success depends on our ability to ~~efficiently~~ operate each facility efficiently.

We produce key components for most of our products at our Springfield facility, which also houses our principal research, development, engineering, and design functions. We frequently make changes in our manufacturing operations to modernize the facility and associated equipment and systems as a result of the age of the facility and the continued need to introduce efficiencies in manufacturing and other processes. We anticipate that we will continue to incur significant capital and other expenditures with respect to the facility, but we may not be successful in continuing to improve efficiencies. A disruption of the operation of this facility would adversely affect our ability to produce many of our products and serve our customers.

~~During~~We ~~fiscal~~house ~~2024, as part of the Relocation, we opened the Maryville facility, which houses~~ our management, administrative, assembly (except for revolvers, ~~and~~certain metal pistols, and lever-action rifles, which continue to be manufactured and assembled in the Springfield facility), distribution, and plastic injection molding functions at our Maryville facility. ~~The~~Our Maryville facility includes computer controlled and automated equipment, which is complex and may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, electronic or power interruptions, and other system failures.

19We also depend on our Houlton facilities, which are used primarily to machine our firearm parts and manufacture all of our handcuffs and restraints.

We also depend on our Houlton facility, which is used primarily as a machining facility for our firearms, as well as for the manufacturing of all of our handcuffs and restraints.

A disruption in the activities of these facilities could adversely affect our firearm manufacturing operations.

Our ability to successfully operate our facilities depends on numerous factors, including the proper design of the facilities, the ability to employ an adequate number of skilled workers to operate the facilities, the design and operation of computer controlled and automated systems, the design of software systems to operate the facilities, and the integration of the facilities into our ERP system. Difficulties or delays in performing any of these critical tasks could negatively impact our operating results, and a disruption of the operation of these facilities would adversely affect our ability to distribute our products to our customers.

The operations at our facilities may be interrupted or impaired by various operating risks, including risks associated with the following:

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catastrophic events, such as fires, floods, earthquakes, explosions, natural disasters, severe weather, (including hurricanes, tornados, and droughts), and pandemics, or other similar occurrences ~~– for example, our Maryville facility operations were disrupted in January 2024 by severe weather (snowfall)~~;

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interruptions in the delivery of raw materials or other manufacturing inputs;

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adverse government regulations;

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equipment breakdowns or failures;

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prolonged power failures;

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unscheduled maintenance outages;

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telecommunication and information system disruptions or failures due to any number of causes, including cyber-attacks;

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violations of permit or licensing requirements or revocation of permits or licenses;

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releases of pollutants and hazardous substances;

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disruptions in transportation infrastructure, including roads, bridges, railroad tracks, and tunnels;

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human errors;

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criminal acts;

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shortages of equipment and spare parts; and

•

labor shortages and disputes.

Business disruptions may impair our production and distribution capabilities and materially and adversely affect our business, operating results, and financial condition. Given the industry within which we operate and our brand, we may be more likely than other companies to be a target for malicious disruptive activities or physical attacks on our senior leadership team or facilities. The casualty and business interruption insurance that we maintain may not be adequate to protect us from the types and amounts of losses we may incur or from the adverse effects that may be caused by disruptions in our operations, such as the long-term loss of customers or an erosion of our brand image.

We rely on our supply chain for our production, and any interruptions in these arrangements could disrupt our ability to fill our customers’ orders.

We utilize contract manufacturers for a portion of our production requirements, particularly during periods of very high customer demand, in order to increase our manufacturing capacity and reduce our capital expenditures for facilities that may not always operate at peak capacity. Qualifying new contract manufacturers is time consuming and may result in unforeseen disruptions in our ~~manufacturing and~~ operations. The loss of our relationships with our contract manufacturers or their inability to conduct their services for us as anticipated in terms of capacity, cost, quality, and timeliness could adversely affect our ability to fill customer orders in accordance with required delivery, quality, and performance requirements. If this were to occur, the resulting decline in net sales could harm our business.

The ability of our suppliers to effectively satisfy our production requirements could be impacted by their financial difficulty or various operating risks, including catastrophic events, pandemics such as COVID-19, terrorist attacks, natural disasters, interruptions in the delivery of raw materials or other manufacturing supplies, adverse government regulations, or equipment breakdowns or failures. The failure of any supplier to perform to our expectations could result in supply shortages or delays for certain products and product components and harm our business. If we experience significantly increased demand for our products, or if we need to replace an existing supplier, we may be unable to supplement or replace our production capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our profitability, and harm our ability to deliver our products ~~on time~~timely. For certain of our products, it may take a significant amount of time to identify and qualify a supplier that has the capability and resources to meet our product specifications in sufficient volume and satisfy our service and quality control standards. A number of factors related to our suppliers are beyond our control, including political and economic instability in the countries in which they operate, their financial and managerial instability, their failure to meet our standards or production deadlines, their lack of adequate quality control, problems they encounter with production capacity, their labor problems, the availability of raw materials, product quality issues, currency exchange rates, transport availability, cost, inflation, and other factors. Although we have insurance to cover potential loss from most of our suppliers for these events, we could experience losses in excess of our insured limits and any claims for various losses could be denied. In addition, failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could have a material adverse effect on us, as well as require additional resources to restore our supply chain.

The capacity of our contract manufacturers to produce our products also depends upon the cost and availability of raw materials. Our contract manufacturers and other suppliers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs. Any shortage of raw materials or inability of a manufacturer to produce or ship our products ~~in a~~ timely ~~manner~~, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner ~~and could cause us to miss the delivery requirements of our customers~~. As a result, we could experience cancellations of orders, refusals to accept deliveries, or reductions in our prices and margins, any of which could harm our financial performance, reputation, and operating results.

We have occasionally received, and may receive in the future, product deliveries from suppliers that fail to conform to our quality control standards. In such circumstances, our inability to utilize those products in production could have a negative effect on our net sales and increase our administrative and shipping costs if we are unable to obtain replacement products in a timely manner.

We may be unable to forecast demand for our products accurately.

We often schedule internal production and place orders for product components and raw materials with third-party suppliers before receiving firm orders from our customers. Demand for our products can vary significantly from period to period. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products to deliver to our customers. Factors that could affect our ability to accurately forecast demand for our products include the following:

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our failure to accurately forecast customer acceptance of new products;

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an increase or decrease in consumer demand for our products or our competitors' products;

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new product introductions by competitors;

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our relationships with customers;

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general market conditions and other factors, which may result in order cancellations or changes in the rate of reorders placed by customers;

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general market conditions, economic conditions, and consumer confidence levels, which could reduce demand for discretionary items, such as our products; and

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the domestic political environment, including debates over the regulation of various consumer products related to our industry.

Internal inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have a material adverse effect on our business, operating results, and financial condition. Inventory levels in excess of consumer demand within our distribution channel may also impact our ability to sell our internal inventory. For example, inventory levels in the distribution channel were elevated for much of fiscal 2023 as our customers adjusted to more normal levels of demand following the historic levels of demand for our products in parts of fiscal 2022 and 2021, which we believe resulted in lower than anticipated net sales of our internal inventory in fiscal 2023. If we underestimate demand for our products, we and our third-party suppliers may not be able to produce products to meet customer demand, and this could result in delays in the shipment of products and lost net sales, as well as damage to our reputation and customer relationships. Our business, operating results, and financial condition could be materially and adversely impacted if we are unable to forecast demand for our products accurately.

We may fail to align our capacity with demand for our products.

From time to time, we have been capacity constrained and have been unable to satisfy on a timely basis the demand for some of our products. We believe that we have improved our manufacturing productivity by adding capacity, increasing daily production quantities, increasing operational availability of equipment, reducing machinery down time, extending machinery useful life, increasing manufacturing efficiency, and contracting with suppliers to obtain additional finished parts. Future significant increases in demand for our products, if any, may require us to further expand our manufacturing capacity, particularly through the purchase of additional manufacturing equipment and the addition of manufacturing space, and we may not be able to increase our capacity in time to satisfy these increases. Capacity constraints may prevent us from satisfying customer orders and result in a loss of market share to competitors that are not capacity constrained. At other times, we may suffer excess capacity and increased overhead costs, particularly if we increase our capacity to meet actual or anticipated demand, which decreases or does not materialize. Our business, operating results, and financial condition could be materially and adversely impacted if we fail to align our capacity with demand for our products.

Shortages of and price increases for components, parts, raw materials, and other supplies may delay or reduce our sales and increase our costs.

Although we manufacture most of the components for our firearms, we purchase certain components and parts from third parties, including bolt carriers, rifle receivers, magazines, slides, small parts, barrels, and rifle stocks. We also purchase ammunition for product testing. Most of the major suppliers for our products are U.S.-based and provide materials, components, and parts, such as raw steel, polymer components, and metal-injected-molded components. We have become increasingly dependent on a small number of key vendors that supply components and parts for our firearms as a result of our decision to increase our manufacturing flexibility by using third parties that can supplement our internal capacity to better react to changes in market conditions. We also use numerous raw materials, including steel, wood, lead, brass, and plastics, that we purchase from third-party suppliers to produce and test our products. The price of these raw materials may fluctuate substantially, depending on a variety of factors, including demand, weather, supply conditions, transportation costs, energy prices, work stoppages, government regulation, environmental protection, and other unpredictable factors. Any and all of these factors may be exacerbated by global climate change. Inflationary pressures have resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future. In addition, uncertainties related to governmental fiscal policies, including increased duties, tariffs, or other trade restrictions, could result in an increase in the price of components, parts, raw materials, and other

2221

We have become increasingly dependent on a small number of key vendors that supply components and parts for our firearms as a result of our decision to increase our manufacturing flexibility by using third parties that can supplement our internal capacity to better react to changes in market conditions. We also use numerous raw materials, including steel, wood, lead, brass, and plastics, that we purchase from third-party suppliers to produce and test our products. The price of these raw materials may fluctuate substantially depending on a variety of factors, including demand, weather, supply conditions, transportation costs, energy prices, work stoppages, government regulation, environmental protection, and other unpredictable factors. Any of these factors may be exacerbated by global climate change. Inflationary pressures have resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, and such increases may continue to impact us in the future. In addition, uncertainties related to governmental fiscal policies, including increased duties, tariffs, or other trade restrictions, could result in an increase in the price of components, parts, raw materials, and other supplies we purchase from third-party suppliers. In an inflationary environment, we may be unable to raise the price of our products sufficiently to keep up with the rate of inflation, which would reduce our profitability and cash flows.

Our inability to obtain sufficient quantities of components, parts, raw materials, and other supplies from independent sources necessary for the production of our products could result in reduced or delayed sales or lost orders., ~~Any~~which ~~delay in or loss of sales~~ could materially and adversely impact our operating results. Many of the components, parts, raw materials, and other supplies used into ~~the~~produce ~~production of~~ our products are available only from a limited number of suppliers. In most cases, we do not have long-term supply contracts with these suppliers. As a result, we could be subject to increased costs, supply interruptions, and difficulties in obtaining materials and finished products. Our suppliers also may encounter difficulties or increased costs in obtaining the materials necessary to produce the components and parts that we use in our products. The time lost in seeking and acquiring new sources of supply or our inability to locate alternative sources of supply of comparable quality at an acceptable price, or at all, could negatively impact our net sales and profitability.

Our business is highly dependent upon our brand recognition and reputation.

We believe that maintaining a high level of brand recognition and a strong reputation are critical to our success, particularly with respect to retaining existing customers and attracting new customers.

We anticipate that our advertising, marketing, public relations, and promotional efforts will increase in the foreseeable future as we continue to seek to enhance our brand recognition and consumer demand for our products. While we have historically relied on print and electronic media advertising to increase consumer awareness of our brands to increase purchasing intent and ~~conversation~~conversion, we increasingly rely on other forms of media advertising, including social media and digital marketing. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our advertising, marketing, public relations, and promotional programs. These brand promotion activities may not be effective, and their efficacy will depend on a number of factors, including our ability to:

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determine the appropriate creative message and media mix and markets for advertising, marketing, and promotional expenditures;

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select the appropriate markets, media, and specific media vehicles in which to advertise;

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identify the most effective and efficient level of spending in each market, media, and specific media vehicle; and

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effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs.

Increases in the pricing of one or more of our marketing and advertising channels could increase our marketing and advertising expenses or cause us to choose less expensive, but possibly less effective, marketing and advertising channels. If we implement new marketing and advertising strategies, we may incur ~~significantly~~ higher costs ~~than our current costs~~, which in turn could materially and adversely affect our operating results. Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective. We also may incur marketing and advertising expenses significantly in advance of the time we anticipate recognizing revenue associated with such expenses, and our marketing and advertising expenditures may not generate sufficient levels of brand awareness and ~~conversation~~conversion or result in increased net sales. Even if our marketing and advertising expenses result in increased net sales, the increase might not offset our related expenditures. If we are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our customer base could be adversely affected, and our business, operating results, financial condition, and reputation could suffer.

Consumers are increasingly using online platforms to learn about firearms, and we face pressure to reach our customers through social media platforms. We plan to continue to expand our brand recognition and product loyalty through social media and our websites, with generation of original content. We are subject to de-platforming, whereby our ability to share information on social platforms or websites could be blocked, limiting our ability to reach our customers. In addition, we seek endorsements and support from particular sporting enthusiasts, athletes, or other 22

23unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially, our customer base could be adversely affected, and our business, operating results, financial condition, and reputation could suffer.

Consumers are increasingly using online platforms to learn about firearms. We plan to continue to expand our brand recognition and product loyalty through social media and our websites, with generation of original content. We are subject to de-platforming, whereby our ability to share information on social platforms or websites could be blocked, limiting our ability to reach our customers. In addition, we seek endorsements and support from particular sporting enthusiasts, athletes, or other celebrities for certain of our products and brands, and those products and brands may become personally associated with those individuals. As a result, sales of the endorsed products could be adversely affected if any of those individuals’ images, reputations, or popularity were to be negatively impacted. Also, our internal policies and procedures may not adequately protect us from inappropriate acts committed or alleged to have been committed by our employees or social media partners, including endorsers/influencers, in which case we could be exposed to penalties and other sanctions by the Federal Trade Commission, or FTC, or other regulatory bodies.

Poor product quality or performance, or defects in our products, could harm us.

We believe that the value of our brand depends, in part, on the value consumers place on the quality of our products. Poor product quality or performance could adversely impact the value of our brand and materially and adversely impact our business, operating results, and financial condition. In particular, we have experienced manufacturing and design issues with respect to certain of our firearms and have initiated product recalls and safety alerts in the past and may experience similar issues in the future, which may result in the initiation of product recalls and safety alerts in the future. Based on the volume of products we have shipped into the market, any future recalls, safety alerts, or product liability claims could result in us incurring significant warranty, support, and repair costs. Such incidents could harm our reputation, damage the value of our brands, and cause us to lose business, all of which could materially and adversely affect our business, operating results, and financial condition. We generally provide a limited one-year warranty and a lifetime service policy to the original purchaser of our new firearm products.

We face intense competition.

We operate in highly competitive consumer markets. Competition is primarily based on innovation, quality, reliability, durability, price, performance, consumer brand awareness, and customer service and support. Our inability to compete in one or more of these areas could materially and adversely impact our business, operating results, and financial condition. Our competitors include major domestic and international companies. Competitive conditions could result in pricing pressures, lower sales, reduced profitability, and lower market share. Some of our competitors may have greater financial, technical, marketing, distribution, and other resources and, in certain cases, may have lower cost structures than we have that may afford them competitive advantages. As a result, they may be able to devote greater resources to the promotion and sale of products, negotiate lower prices on raw materials and components, deliver competitive products at lower prices, and introduce new products and respond to customer requirements more effectively and quickly than we can.

Nearly all of our competitors are privately held, which may give them certain competitive advantages. For example, these competitors may be less focused on maintaining high levels of profitability, which may give them more flexibility to compete aggressively on price, particularly during periods of high inflation.

Competition is primarily based on innovation, quality, reliability, durability, price, performance, consumer brand awareness, and customer service and support. Our inability to compete in one or more of these areas could materially and adversely impact our business, operating results, and financial condition.23

We may be unsuccessful in making and integrating mergers, acquisitions, and investments, and completing divestitures.

We may seek to acquire, invest in, or sell companies, assets, or businesses, or enter into joint ventures with third parties. We may not be able to identify suitable targets or purchasers or successfully complete suitable transactions in the future, and completed transactions may not be successful. These transactions create risks, including the following:

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disrupting our ongoing business, including distracting management from our existing businesses;

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integrating acquired businesses and personnel into our business, including integrating information technology systems and operations across different cultures and languages and addressing the economic, political, and regulatory risks associated with specific countries;

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working with partners or other ownership structures with shared decision-making authority;

•

obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the identification and assessment of liabilities, claims, or other circumstances that could result in litigation or regulatory risk exposure;

•

obtaining required regulatory approvals and financing on favorable terms;

•

retaining key employees, contractual relationships, and customers;

•

the potential impairment of assets – for example, in fiscal 2024 we incurred a $1.9 million impairment related to assets formerly utilized at the Columbia facility;

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the additional operating losses and expenses of businesses we acquire or in which we invest;

incurring substantial indebtedness to finance an acquisition or investment;

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implementing controls, procedures, and policies at companies we acquire; and

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the dilution of interests of holders of our common stock through the issuance of equity securities.

Mergers, acquisitions, investments, and divestitures may not be successful and may materially and adversely affect our business, operating results, and financial condition. Among the benefits we expect from potential, as well as completed, acquisitions and joint ventures are synergies, cost savings, growth opportunities, or access to new markets (or a combination thereof) and, in the case of divestitures, the realization of proceeds from the sale of businesses and assets to purchasers that place higher strategic value on these businesses and assets than we do.

We may have difficulty collecting amounts owed to us.

Certain of our customers have experienced, and may in the future experience, credit-related issues. We perform ongoing credit evaluations of customers, but these evaluations may not be completely effective. We generally grant payment terms to most customers ranging from 20 to 60 days and do not generally require collateral. Should more customers than we anticipate experience liquidity issues, or if payment is not received on a timely basis, we may have difficulty collecting amounts owed to us by such customers and our business, operating results, and financial condition could be materially and adversely impacted.

For fiscal ~~2024~~2025, sales to ~~three~~one of our customers ~~exceeded~~represented 1014.06% of our total net sales, ~~totaling~~and, ~~34.8%.~~as As of April 30, ~~2024~~2025, ~~two~~this ofcustomer ~~our customers each~~ accounted for ~~more than 10~~36.1% of our ~~accounts receivable, for a~~ total ofaccounts 47receivable.~~9%.~~ For fiscal ~~2023~~2024, sales to ~~two~~three of our customers exceeded 10.0% of our net sales, totaling 2234.8%. As of April 30, ~~2023~~2024, ~~three~~two of our customers each accounted for more than 10% of our accounts receivable, for a total of 3947.49%.

Liability insurance coverage is expensive and may be difficult to obtain at commercially reasonable rates, or at all.

Our insurance policies are subject to periodic review by our insurers and may not be renewed at all or on similar or favorable terms. Because we manufacture and sell firearms, a number of insurance carriers have decided in the past, and may decide in the future, not to insure us. For example, in ~~recent~~the ~~years~~past, certain insurance carriers ~~chose~~have chosen either to cancel our insurance coverage or not to submit proposals to insure us in areas such as auto, general liability, and products liability insurance, among others. In addition, if we or other firearm manufacturers sustain significant losses or make significant insurance claims, our ability to obtain future insurance coverage at commercially reasonable rates could be materially and adversely affected. For example, our ability to obtain liability insurance on commercially reasonable terms has been adversely impacted by the $73 million settlement that was announced in 2022 between insurance carriers representing Remington Outdoor Company and plaintiffs in the Soto v. Bushmaster Firearms ~~International, LLC case. Our liability insurance costs were $8.4 million, $7.8 million, and $8.3 million in fiscal 2024, 2023, and 2022, respectively.~~

International, LLC case. Our liability insurance costs were $7.8 million, $8.4 million, and $7.8 million in fiscal 2025, 2024, and 2023, respectively.

An inability to obtain liability insurance, significant increases in the cost of the liability insurance we obtain, or losses in excess of our liability insurance coverage, could have a material adverse effect on our business, operating results, and financial condition. In fiscal 2020, we established a wholly owned captive insurance company to help mitigate these risks, but our funding of the insurance company may not adequately cover the cost of claims against us, if any.

Risks Relating to Legal Proceedings, Product Recalls, and Other Product Liabilities

We are subject to lawsuits and governmental investigations and inquiries.

We are vigorously defending ourselves in a number of lawsuits. As a result of these or future lawsuits, we may have to pay significant damages or amounts in settlement above insurance coverage. An unfavorable outcome or prolonged litigation could materially and adversely impact our business, operating results, and financial condition. Defending litigation of this nature is also expensive and time consuming and may divert the resources, time, and attention of our management.

Our products expose us to potential product liability, warranty liability, and personal injury claims, as well as litigation relating to the use or misuse of our products. These include allegations of defects in manufacturing and design, failure to warn of inherent dangers in the product itself or activities associated with the product, product performance issues, and negligence and strict liability. In addition, we could be subject to future litigation arising out of the criminal misuse of our firearms. If successful, such claims could have a material adverse effect on our business, operating results, and financial condition. Although we maintain product liability insurance in amounts that we believe are reasonable, we may not be able to maintain such insurance on acceptable terms, if at all, and product liability claims may exceed the amount of insurance coverage available to us. Because we manufacture and sell firearms, insurance carriers may decide not to insure our products or our company in the future. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products. Due to the nature of our products, we anticipate that we will continue to be involved in litigation, including product liability cases and claims in the future.

We have been and may continue to be subject to governmental investigations and inquiries. Such investigations and inquiries could subject us to various sanctions, including significant civil and criminal penalties, the indictment of our company or various of our officers and employees, our being prevented from bidding on domestic military and government contracts, restriction by the U.S. Government, including by the U.S. Department of State or U.S. Department of Commerce, on exporting our products, private civil litigation arising out of the outcome of the investigations or inquiries, the diversion of time and attention of our management from normal business operations, and a negative impact on the perception of our company by investors, customers, and others. For example, in 2020 the office of the attorney general of New Jersey issued us a subpoena requesting certain business records as part of an investigation into potential violations of the New Jersey Consumer Fraud Act; in 2022, certain gun control activists submitted a petition to the FTC suggesting that the FTC investigate and regulate our industry’s alleged unfair and deceptive advertising; and in 2022, the U.S. House of Representatives Committee on Oversight and Reform issued us a subpoena requesting certain business records as part of an investigation into certain firearm manufacturers, including us. More recently, in 2024 certain state attorneys general announced the formation of a multistate coalition that purports to target the firearm industry. Responding to inquiries and investigations, including through litigation, is time consuming and costly, may disrupt our ongoing business and distract management from operating our business, and may expose us to litigation, including claims raised by private plaintiffs.

Our business involves the potential for product recalls and product liability and other claims against us.

As a distributor of non-firearm consumer products, such as handcuffs, we are subject to the U.S. Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous, and similar laws under foreign jurisdictions. Under certain circumstances, the Consumer Products Safety Commission or comparable foreign ~~agency~~agencies could require us to repurchase or recall one or more of our products. Additionally, other laws and agencies regulate certain consumer products sold by us, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products could be costly and damage our reputation. If we were required to remove, or we voluntarily remove, our products from the market, our reputation could be tarnished, and we might have large quantities of finished products that we could not sell. We also face exposure to product liability claims in the event that one of our products is alleged to have resulted in property damage, bodily injury, or other adverse effects. In addition to the risk of substantial monetary judgments, fines, or penalties that may result from any governmental investigations, product liability claims, or regulatory actions, such events could result in negative publicity that could harm our reputation, adversely impact the value of our brands, and result in an increase in the cost of producing our products. Similar to product liability claims, we face exposure to class action lawsuits related to the performance, safety, or advertising of our products. Such class action lawsuits could result in substantial monetary judgments, injunctions related to the marketing and sale of products, and potentially harm our reputation.

In fiscal 2020, we formed a wholly owned captive insurance company, which provides product liability insurance to us and our subsidiaries. The product liability insurance that we carry is, in most cases, subject to large self-insured retentions for which we are responsible, and we may not be able to maintain such insurance on acceptable terms, if at all. Further, product liability claims may exceed the amount of insurance coverage. As a result, product recalls or product liability claims could have a material adverse effect on our business, operating results, and financial condition. In addition, we face other types of litigation arising out of alleged defects in our products or otherwise, such as class action lawsuits. Our insurance may not cover certain claims involving alleged defects in our products that do not involve personal injury or property damage.

Our product liability insurance program is an occurrence-based program based on our current and historical claims experience and the availability and cost of insurance. Our future product liability experience may not be consistent with our past experience and future claims and awards may substantially impact the costs of our insurance programs in the future.

We produce or source and sell products that create exposure to potential product liability, warranty liability, and personal injury claims and litigation.

Some of our products involve or are used in applications and situations that involve risk of personal injury and death. Our products expose us to potential product liability, warranty liability, personal injury claims, and litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or activities associated with the product, negligence, and strict liability. If successful, such claims could have a material adverse effect on our business, operating results, and financial condition. In addition, defects in our products could reduce demand for our products and result in a decrease in sales and market acceptance and damage to our reputation.

Components used in our products may contain undetected defects that are subsequently discovered at any point in the life of the product. In addition, we obtain many of our finished products and product components from third-party suppliers and may not be able to detect defects in such products or components until after they are sold. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, damage to our reputation, and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition.

Risks Relating to Intellectual Property, Information Systems, and Cybersecurity

We may be unable to protect our intellectual property or obtain the right to use intellectual property from third parties.

Our success depends, in part, on our ability to protect our intellectual property. We rely on a combination of patents, copyrights, trade secrets, trademarks, trade dress, customer records, monitoring, brand protection services, confidentiality agreements, and other contractual provisions to protect our intellectual property, but these measures may provide only limited protection. Our failure to enforce and protect our intellectual property rights or obtain the right to use necessary intellectual property from third parties may lead to our loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any intellectual property to which we have or may obtain rights may not prevent others from developing and selling competing products. In addition, our intellectual property may be held invalid upon challenge, or others may claim rights in, or ownership of, our intellectual property. Moreover, we may become subject to litigation with parties that claim, among other things, that we infringed their patents or other intellectual property rights. The defense and prosecution of patent and other intellectual property claims are costly and time-consuming and could materially and adversely affect our business, operating results, and financial condition.

Patents may not be issued for the patent applications that we have filed or may file in the future. Our issued patents may be challenged, invalidated, or circumvented, and claims of our patents may not be of sufficient scope or strength, or issued in the proper geographic regions, to provide meaningful protection or any commercial advantage. We have registered certain of our trademarks and trade dress in the United States and other countries. We have also recorded certain of our registered trademarks with customs officials in the United States and other countries. We may be unable to enforce existing, or obtain new, registrations of trademarks in key markets. Our failure to obtain or enforce such registrations could compromise our ability to protect our trademarks and brands fully and could increase the risk of challenges from third parties to our use of our trademarks and brands.

In addition to intellectual property that we own, some of our products and services may use or include intellectual property owned by third parties. As a result, it may be necessary in the future to seek or renew licenses relating to various aspects of our products, processes, and services. We may be unable to obtain or renew such licenses in the future on reasonable terms or at all. In the past, we did not consistently require our employees and consultants to enter into confidentiality agreements, employment agreements, or proprietary information and invention agreements. Therefore, our former employees and consultants, and certain of our current employees, may try to claim some ownership interest in our intellectual property and may use our intellectual property competitively and without appropriate limitations. In addition, our acquired businesses may not have consistently required their employees and consultants to enter into confidentiality agreements, employment agreements, or proprietary information and invention agreements. Claims by such individuals may affect our business, operating results, and financial condition.

We may incur substantial expenses and devote significant resources in prosecuting others for their unauthorized use of our intellectual property rights.

We may become involved in litigation regarding patents and other intellectual property rights. Other companies, including our competitors, may develop intellectual property that is similar or superior to our intellectual property, duplicate our intellectual property, or design around our patents and may have or obtain patents or other proprietary rights that would prevent, limit, or interfere with our ability to make, use, or sell our products. Effective intellectual property protection may be unavailable or limited in some foreign countries in which we sell products or from which competing products may be sold. Unauthorized parties may attempt to copy or otherwise use aspects of our intellectual property and products that we regard as proprietary. Our means of protecting our proprietary rights in the United States or abroad may prove inadequate, and competitors may be able to independently develop similar intellectual property. If our intellectual property protection is insufficient to protect our intellectual property rights, we could face increased competition in the markets for our products.

Should any of our competitors file patent applications or obtain patents that claim inventions also claimed by us, we may choose to participate in a United States Patent and Trademark Office Patent Trial and Appeal Board proceeding to determine the patentability or validity of these patents because our business would be harmed if we fail to enforce and protect our intellectual property rights. Even if the outcome is favorable, this proceeding could be costly and disrupt our business.

We have filed lawsuits, and may file additional lawsuits in the future, to enforce our intellectual property rights, protect our trade secrets, or determine the validity and scope of the proprietary rights of others. This litigation, whether successful or unsuccessful, could be costly and divert valuable resources, which could materially and adversely impact our business, financial condition, and results of ~~operation~~operations.

Interruptions in the proper functioning of our information systems or other issues with our ERP systems could disrupt our operations.

We rely on our information systems to manage our business, data, communications, supply chain, ordering, pricing, billing, inventory replenishment, accounting functions, and other processes. Our systems are subject to damage or interruption from various sources, including computer and telecommunications failures, computer viruses, ~~cyber~~cybersecurity ~~security~~ breaches, attacks by hackers and other breaches, introduction of malware or ransomware, phishing attacks, denial of service attacks, blocking of ~~authorized~~unauthorized service attacks, vandalism, severe weather conditions, power outages, catastrophic events, terrorism, and human error, and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, fail to function properly, or otherwise become compromised or unavailable, we may incur substantial costs to repair or replace them, and we may experience loss of critical data and interruptions or delays in our ability to perform critical functions, which could materially and adversely affect our business, operating results, and financial condition.

Our information technology systems require periodic modifications, upgrades, and replacement that subject us to costs and risks, including potential disruption to our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel or outside firms to implement and operate existing or new systems, and other risks and costs of delays or difficulties in transitioning to new or modified systems or of integrating new or modified systems into our current systems. In addition, challenges implementing new or modified technology systems may cause disruptions in our business operations and have an adverse effect on our business operations if not anticipated and appropriately mitigated.

We operate our business utilizing SAP, which is a fully integrated ERP system. We continue to implement various modules and additional usages of SAP, including in connection with the Relocation. Any new implementations or usages of SAP, including those related to the Relocation, could result in a significant disruption to our business, and any disruption could materially and adversely impact our business, operating results, and financial condition. In addition, utilizing SAP has required and will continue to require significant resources and refinement to fully realize the expected benefits of the system.

We are subject to ~~cyber-security~~cybersecurity risks, including risks related to customer, employee, vendor, and other company data.

We use information technologies to securely manage operations and various business functions. We rely on various technologies, some of which are managed by third parties, to process, transmit, and store electronic information. In addition, we facilitate a variety of business processes and activities, including reporting on our business and interacting with customers, vendors, and employees. We also collect and store data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws, regulations, and customer-imposed controls. Our systems are subject to recurring attempts by third parties to access information, manipulate data, or disrupt our operations. Despite our security design and controls and those of our third-party providers, we have in the past experienced, and may in the future become subject to, system damage, disruptions, or shutdowns due to any number of causes, including cyber-attacks, data breaches, employee error or malfeasance, power outages, telecommunication or utility failures, systems failures, service provider failures, natural disasters, or other catastrophic events.

Cyber-security-related vulnerabilities may remain undetected for an extended period of time. We maintain contingency plans and processes to prevent or mitigate the impact of events arising from these vulnerabilities; however, these events could result in operational disruptions or the misappropriation of sensitive data and, depending on their nature and scope, could lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes, operational disruptions, and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including reputational damage and legal claims or proceedings, may materially and adversely affect our business, operating results, and financial condition.28

29Cybersecurity-related vulnerabilities may remain undetected for an extended period of time. We maintain contingency plans and processes to prevent or mitigate the impact of events arising from these vulnerabilities; however, these events could result in operational disruptions or the misappropriation of sensitive data and, depending on their nature and scope, could lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes, operational disruptions, and exposure to liability. Such disruptions or misappropriations and the resulting repercussions, including reputational damage and legal claims or proceedings, may materially and adversely affect our business, operating results, and financial condition.

Risks Relating to Certain Business Matters and Securities Markets

Our operating results may involve significant fluctuations.

Various factors contribute to significant periodic and seasonal fluctuations in our operating results. These factors may include the following:

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market acceptance of our products, including new products;

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market acceptance and new product introductions by our competitors;

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the timing of large domestic and international orders;

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cancellation of existing orders;

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changes in our sales mix;

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the cost of new product introductions;

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problems with our supply chain;

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the volume of customer orders relative to our capacity;

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timing of expenditures in anticipation of future customer orders;

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effectiveness in managing production processes and costs;

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transportation disruptions;

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changes in cost and availability of labor and finished products, product components, and raw materials;

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ability to manage inventory and inventory obsolescence;

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pricing and other competitive pressures;

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the effects of climate change;

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changes or anticipated changes in economic, political, social, legislative, regulatory, inflationary, and health factors;

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a material change in federal or state income tax regulations;

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the outcome of any litigation;

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adverse publicity surrounding our products, the safety of our products, or the use of our products;

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changes in amount and or timing of our operating expenses; and

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changes in laws and regulations that may affect the marketability of our products.

As a result of these and other factors, we believe that period-to-period comparisons of our operating results may not be meaningful in the short term and our performance in a particular period may not be indicative of our performance in any future period.

For example, we experienced historic levels of demand for our products in parts of fiscal 2022 and 2021 as a result of the impact of COVID-19 and the social unrest experienced in the United States during the summer of calendar year 2020, which positively impacted our operating results. As overall market demand returned to more normal levels late in fiscal 2022, year-over-year comparisons of our operating results, particularly during fiscal 2023, became more challenging and less meaningful. 29

The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future.

The trading price of our common stock has fluctuated widely in the past and may fluctuate widely in the future. ~~For example, the trading price of our common stock closed at $35.40 per share on July 1, 2021 and closed at $13.73 on April 29, 2022, the final trading day of fiscal 2022.~~ Many factors could affect the trading price of our common stock, including the following:

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variations in our operating results;

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the relatively small public float of our common stock;

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introductions of new products and services by us or our competitors;

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the performance of our customers;

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changes in the estimates of our operating performance or changes in recommendations by any securities analysts that follow our stock;

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general economic, social, political, and market conditions and consumer spending patterns;

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governmental policies and regulations;

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investor reaction to news events;

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lack of investor interest in a firearm business;

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the general performance of the markets in which we participate; and

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factors relating to suppliers and competitors.

In addition, market demand for small-capitalization stocks like ours, and price and volume fluctuations in the stock market unrelated to our performance, could result in significant fluctuations in the market price of our common stock. The performance of our common stock could adversely affect our ability to raise equity in the public markets and adversely affect the growth of our business.

We are subject to risks related to corporate social responsibility ~~and the growth in ESG investing~~.

~~The~~Our ~~growing integration of~~ environmental, social, and governance, or ESG, factors in making investment decisions is relatively new, and frameworks and methods used by investors for assessing ESG policies are not fully developed and vary considerably among the investment community. Our public ESG disclosures (or lack thereof), in addition to ESG disclosure criteria established by third parties, may impact our reputation. For example, public perception, including among our stakeholders, may depend, in part, on the policies and procedures we adopt and the disclosures we make, whether or not we meet third party ESG disclosure requirements (including those related to human rights) that the ESG investment community deems relevant, and whether we are perceived to fail to act responsibly in the areas on which we report. The subjective nature and wide variety of methods and processes used by stakeholders, including investors, to assess companies on ESG criteria could result in a negative perception about our ESG-related policies and practices or a misrepresentation of those policies and practices. If our stakeholders feel that we are failing to achieve progress with respect to ESG factors, or if we fail to meet ESG disclosure criteria set by third parties, our ability to attract and retain employees; the willingness of third parties to do business with us; investors’ willingness or ability to purchase or hold our securities; or our ability to access capital, could be impacted, any of which could materially and adversely impact our business, operating results, and financial condition.

Further, ESG investing (also called sustainable investing, socially responsible investing, or impact investing) has attracted significant amounts of capital. Managers of these investments may screen out companies in certain sectors (such as the firearm industry) and otherwise exercise broad discretion in determining whether to invest in certain sectors or individual companies. The trading price of our common stock may be adversely impacted by the growth of ESG investing, including if such growth results in more investors choosing not to invest in our common stock or divesting from investments in our common stock.

Actions of stockholder activists could cause us to incur substantial costs and divert management’s attention and our resources.

We have been, and may be in the future, subject to informal private or public inquiries and formal proxy proposals by stockholder activists urging us to take certain corporate actions~~, many of which we believe may not be in the best interests of our company or our stockholders~~. For example, in recent years, certain stockholder activists ~~have~~ submitted proposals requesting that our ~~board~~Board of ~~directors~~Directors ~~adopt a human rights policy and~~ engage a third party to conduct a human rights impact assessment. ~~These~~Responding ~~activities may adversely affect our business in a number of ways, and responding~~ to inquiries or proposals can be costly, time consuming, and disruptive to our operations and could ~~meaningfully~~ divert the attention of our resources, including those of our management team and other employees. For example, in response to these activities, we have engaged, and may engage in future, third-party service professionals, including legal, financial, and communications advisors, to advise us, which has been, and may continue to be, costly. In addition, certain stockholder inquiries and proposals could create perceived uncertainties or concerns as to our future operating environment, legislative environment, strategy direction, or leadership, and could (i) result in the loss of potential business opportunities; (ii) harm our ability to attract or retain investors, customers, and employees; (iii) harm or disrupt our business and financial relationships; (iv) result in consumer boycotts of our products; and (iv) cause the trading price of our common stock to experience periods of decline, volatility, or stagnation. Stockholder activists have pressured and may continue to pressure us to adopt actions that are not in the best interests of our company or our stockholders, inconsistent with the legal operation of our business, or contrary to the beliefs of our core consumers, and our reputation could be damaged if our core consumers believe that we have adopted the gun control agenda of certain activists. Finally, the actions of stockholder activists may strengthen our competitors, particularly those that are privately held and not subject to these types of gun control focused stockholder activism. In December 2023, certain stockholder activists filed a stockholder derivative suit against our directors and certain of our officers, alleging breaches of fiduciary duties. The suit was dismissed in May 2024 without prejudice, meaning it could be refiled by the stockholder activists. Responding to the stockholder activists' claims has been, and may continue to be, costly and time consuming. The actions of stockholder activists could materially and adversely impact our business, operating results, and financial condition.

products; and (iv) cause the trading price of our common stock to experience periods of decline, volatility, or stagnation. Stockholder activists have pressured and may continue to pressure us to adopt actions that are not in the best interests of our company or our stockholders, inconsistent with the legal operation of our business, or contrary to the beliefs of our core consumers, and our reputation could be damaged if our core consumers believe that we have adopted the gun control agenda of certain activists. In February 2025, certain stockholder activists filed a stockholder derivative suit against our directors and certain of our officers. Responding to the stockholder activists’ claims has been, and may continue to be, costly and time consuming. Finally, the actions of stockholder activists may strengthen our competitors, particularly those that are privately held and not subject to these types of gun control focused stockholder activism.

The actions of stockholder activists could materially and adversely impact our business, operating results, and financial condition.

Our ability to operate our business efficiently may be adversely impacted if service providers and other businesses that permit firearm-related activities refuse to work with us.

Gun control activists have sought to engineer boycotts of firearm products by service providers to our industry, certain of which discriminate against companies involved with the firearm industry. For example, some financial institutions and insurance companies no longer provide certain services to firearm manufacturers. Gun control activists have also targeted credit card companies, transportation companies, and social media companies, among others. Further, certain law firms refuse to provide services to firearm manufacturers. For example, in 2022, we were notified by a law firm with which we had maintained a long-term relationship that it would no longer provide legal services to us. If additional service providers refuse to work with us, we would need to engage alternative service providers, which may adversely impact the delivery of important services to us and increase our costs. Further, we may be unable to locate suitable alternative service providers. The refusal of service providers and other businesses that permit firearm-related activities to work with us could have a material adverse effect on our business, operating results, and financial condition.

We operate in a challenging market for talent and may fail to attract, motivate, train, and retain qualified personnel, including key personnel.

Our success depends on our ability to attract, motivate, train, and retain employees with the skills necessary to understand and adapt to our customers’ continuously developing needs. The increasing demand for qualified personnel makes it more difficult for us to attract and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience. Changing demographics and labor work force trends also may result in a loss of knowledge and skills as workers with more tenure and experience retire. The market for both hourly workers and professional workers has been particularly challenging in recent years., Inand ~~certain locations where~~ we ~~operate,~~have ~~the~~incurred ~~demand~~higher ~~for~~ labor ~~has~~costs ~~exceeded~~as ~~the~~a ~~supply of labor, resulting in higher labor costs~~result. Despite our focused efforts to attract and retain employees, our attrition rates in recent years have exceeded our historical rates, resulting in higher operating costs at ~~some~~certain of our facilities in the form of higher wages and higher levels of overtime pay. WeThe ~~believe that the~~ Relocation was a significant contributing factor to these higher rates of attrition, as certain employees, particularly those based in our Springfield facility and former Deep River facility, left our employment to work for employers that would allow them to continue working near their homes or to work remotely. In addition to challenges associated with a competitive labor market, we may also struggle to identify qualified candidates who are comfortable or enthusiastic to work for a firearm business. If we fail to attract, motivate, train, and retain qualified personnel, or if we experience excessive turnover, we may experience declining sales, manufacturing delays or other operating inefficiencies, increased recruiting, training, and relocation costs, or other difficulties, and our business, financial condition, and results of operations may be materially and adversely impacted.

those based in our Springfield and Deep River facilities, left our employment to work for employers that would allow them to continue working near their homes or to work remotely. We expect that the market for both hourly and professional workers may remain challenging at least through fiscal 2025. In addition to challenges associated with a competitive labor market, we may also struggle to identify qualified candidates who are comfortable or enthusiastic to work for a firearm business. If we fail to attract, motivate, train, and retain qualified personnel, or if we experience excessive turnover, we may experience declining sales, manufacturing delays or other operating inefficiencies, increased recruiting, training, and relocation costs, or other difficulties, and our business, financial condition, and results of operations may be materially and adversely impacted.

We rely on key executive and management personnel to manage our business efficiently and effectively. The loss of these employees, particularly during a challenging market for attracting and retaining employees, could materially and adversely affect our business, financial condition, and results of operations.

Nevada law could make it more difficult for a third party to acquire us and discourage a takeover.

We are incorporated in Nevada. Certain provisions of Nevada law and our articles of incorporation and bylaws make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in our stockholders’ interest or might result in a premium over the trading price for the shares held by our stockholders.

~~The~~We ~~AOUT~~have ~~spin-off~~identified ~~could~~a ~~result~~material weakness in ~~substantial~~our ~~tax~~internal ~~liability~~control toover usfinancial ~~and~~reporting that may, if not remediated, result in material misstatements in our ~~stockholders~~financial statements.

We ~~received~~are ~~opinions~~responsible offor ~~tax~~establishing ~~advisors~~and ~~substantially~~maintaining toadequate ~~the~~internal ~~effect~~control ~~that~~over our financial reporting, ~~for~~as ~~U.S.~~defined ~~Federal~~in ~~income~~Rule ~~tax~~13a-15(f) ~~purposes,~~under the ~~AOUT~~Exchange ~~spin-off~~Act. ~~and~~As ~~certain~~disclosed ~~related~~in ~~transactions~~Item ~~qualify~~9A, ~~for~~“Controls ~~tax-free~~and ~~treatment~~Procedures,” ~~under~~we ~~certain~~identified ~~sections~~a ofmaterial ~~the~~weakness ~~Internal~~in ~~Revenue~~our ~~Code.~~internal ~~However,~~control ifover ~~the~~financial ~~factual~~reporting ~~assumptions~~related orto ~~representations~~the ~~made~~accrual byof uscertain inlegal ~~connection~~expenses. ~~with~~A ~~the~~material ~~delivery~~weakness ofis ~~the~~defined ~~opinions~~as ~~are~~a ~~inaccurate~~deficiency or ~~incomplete~~combination of deficiencies in ~~any~~internal ~~material~~control ~~respect,~~over ~~including~~financial ~~those~~reporting ~~relating~~such tothat ~~the~~there ~~past~~is ~~and~~a ~~future~~reasonable ~~conduct~~possibility that a material misstatement of our ~~business,~~annual weor interim financial statements will not be ~~able~~prevented toor ~~rely~~detected on ~~the~~a ~~opinions~~timely basis. ~~Furthermore,~~As a result of the ~~opinions~~material ~~are~~weakness, we concluded that our internal control over financial reporting and related disclosure controls and procedures were not ~~binding~~effective as of April 30, 2025 based on ~~the~~criteria ~~IRS~~set orforth by the ~~courts.~~Committee ~~If,~~of ~~notwithstanding~~Sponsoring ~~receipt~~Organizations of the ~~opinions,~~Treadway Commission. We evaluated the ~~spin-off~~errors ~~transaction~~resulting from the material weakness and ~~certain~~determined that the related ~~transactions~~impact ~~are~~was ~~determined~~not material to beresults ~~taxable~~of operations, wefinancial ~~would~~position, beor ~~subject~~cash toflows afor ~~substantial~~any ~~tax~~historical ~~liability~~annual or interim period. InWe ~~addition,~~are ifactively ~~the~~engaged ~~spin-off~~in ~~transaction~~implementing isa ~~taxable,~~remediation ~~each~~plan ~~holder~~designed ofto ~~our~~address ~~common~~this ~~stock~~material ~~who~~weakness; ~~received~~however, ~~shares~~we ofcannot ~~AOUT~~guarantee inthat ~~connection~~these ~~with~~steps ~~the~~have ~~spin-off~~been ~~would~~sufficient ~~generally~~or bethat ~~treated~~we aswill ~~receiving~~not have a ~~taxable~~material ~~distribution~~weakness ofin ~~property~~the infuture. anIf ~~amount~~our ~~equal~~remedial measures are insufficient to address the ~~fair~~material ~~market~~weakness, ~~value~~or ofif additional material weaknesses in our internal control are discovered or occur in the ~~shares~~future, ~~received~~our financial statements may contain material misstatements and we could be required to restate our financial statements.

Even if the spin-off otherwise qualifies as a tax-free transaction, the distribution would be taxable to us (but not to our stockholders) in certain circumstances if future significant acquisitions of our stock or the stock of AOUT are deemed to be part of a plan or series of related transactions that included the spin-off. In this event, the resulting tax liability could be substantial. In connection with the spin-off, we entered into a tax matters agreement with AOUT, pursuant to which AOUT agreed to not enter into any transaction that could cause any portion of the spin-off to be taxable to us without our consent and to indemnify us for any tax liability resulting from any such transaction. In addition, these potential tax liabilities may discourage, delay, or prevent a change of control of us.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

Risk Management and Strategy

We have implemented and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats. We identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods, including conducting scans of the threat environment and conducting threat and vulnerability assessments. Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats, including risk assessments, incident detection and response, end-point detection and response, network security controls, access controls, physical security, systems monitoring, a vendor risk management program, and penetration testing. We work with third parties (including professional services firms, threat intelligence service providers, and penetration testing firms) from time to time that assist us to identify, assess, and manage cybersecurity risks.

incident detection and response, end-point detection and response, network security controls, access controls, physical security, systems monitoring, a vendor risk management program, and penetration testing. We work with third parties (including professional services firms, threat intelligence service providers, and penetration testing firms) from time to time that assist us to identify, assess, and manage cybersecurity risks.

Our information security team reviews enterprise level cybersecurity risks at least annually, and key cybersecurity risks are identified, tracked, monitored, and addressed in alignment with our overall enterprise risk management program.

We utilize third-party service providers to perform certain business functions. We seek to engage reliable and reputable service providers that maintain cybersecurity programs. Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, we may review the cybersecurity practices of such provider, contractually impose obligations on the provider, conduct information security risk assessments, and conduct periodic reassessments during their engagement.

We describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We are subject to cyber-security risks, including risks related to customer, employee, vendor, and other company data” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.32

We describe whether and how risks from identified cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “We are subject to cybersecurity risks, including risks related to customer, employee, vendor, and other company data” included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K.

Governance

The Audit Committee is responsible for overseeing risks from cybersecurity threats, in accordance with its charter. The Audit Committee holds quarterly meetings and receives periodic reports from our Vice President – Information Technology (Chief Information Officer) concerning our significant cybersecurity threats and risks, and the processes we have implemented to address them.

Management plays an important role in assessing and managing our material risks from cybersecurity threats. Our ~~Vice~~Chief ~~President~~Information Officer – ~~Information~~which ~~Technology~~is ~~(Chief~~the ~~Information~~management ~~Officer)~~position responsible for assessing and managing material risks from cybersecurity threats – is responsible for developing and implementing our information security program and reporting on cybersecurity matters to the Audit Committee. He has over a decade of experience leading cybersecurity oversight, and leads other members of our information security team, who have professional cybersecurity experience, training, or certifications.

We maintain a cyber incident response plan that is designed to provide a framework that will allow us to respond effectively to a cybersecurity incident. A cyber emergency response team, which includes members of our executive leadership team, manages this plan. ~~Beginning~~ inThis ~~fiscal 2024, this~~ team ~~began~~meets ~~meeting~~periodically ~~monthly~~ to discuss cybersecurity threat trends and related information. Our incident response processes are designed to escalate certain cybersecurity incidents to our cyber emergency response team and include reporting to the Audit Committee for certain cybersecurity incidents.

We view cybersecurity threats as a shared responsibility. All new employees with company email addresses receive cybersecurity training as part of their onboarding, as well as annual training. We also periodically publish a cybersecurity newsletter to these employees related to topics such as phishing, social engineering, and insider-threat awareness.

Item 2. Properties

The following table sets forth information regarding our principal operating properties and other significant properties as of April 30, ~~2024~~2025. In general, our operating properties are well maintained, suitably equipped, and in good operating condition.

Location Facility Ownership Status ~~Connecticut Deep River Plant Leased~~ Maine Houlton Plant Owned Massachusetts Springfield ~~Executive Offices &~~ Plant Owned Missouri Columbia Office & Warehouse Leased — Assigned to a third party Tennessee Maryville Executive Offices & Plant Owned — Subject to the terms of certain real property and tax incentive agreements

Item 3. Legal Proceedings

Information regarding our legal proceedings is discussed in Note 1614 to our consolidated financial statements, which is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock trades on the Nasdaq Global Select Market under the symbol “SWBI.” Our common stock was previously traded on the Nasdaq Global Select Market under the symbol “AOBC” from January 1, 2017 to June 1, 2020 and under the symbol “SWHC” from July 20, 2006 to January 1, 2017. The holders of our common stock are entitled to one vote per share on any matter to be voted upon by our stockholders. All shares of common stock rank equally as to voting and all other matters. The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, are not liable for further call or assessment, and are not entitled to cumulative voting rights.

Holders

On June 1918, ~~2024~~2025, there were ~~881~~876 record holders of our common stock. A substantially greater number of holders of common stock are “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.

Dividend Policy

We have paid dividends on a quarterly basis since August 2020. Quarterly dividends, when declared, are paid approximately four weeks after earnings are announced. Payment of any cash dividends depends on our financial condition, operating results, and capital requirements as well as other factors deemed relevant by our ~~board~~Board of ~~directors~~Directors. We paid dividends totaling $2223.01 million and $1822.30 million during fiscal ~~2024~~2025 and ~~2023~~2024, respectively.

Securities Authorized for Issuance under Equity Compensation Plans

For equity compensation plan information, refer to Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters) in Part III of this Annual Report on Form 10-K.

Performance Graph

The following line graph compares cumulative total stockholder returns for the five years ended April 30, ~~2024~~2025 for (i) our common stock, (ii) the Russell 2000 Index, and (iii) the S&P Composite 1500 Leisure Products Index (S&P 1500 Leisure Products on the graph below). The graph assumes an investment of $100 on April 30, ~~2018~~2020, with dividends reinvested. The performance shown is not necessarily indicative of future performance.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*

Among Smith & Wesson Brands, Inc., The Russell 2000 Index,

And Peer Group

* $100 invested on April 30, ~~2019~~2020 in stock or index — including reinvestment of dividends. Fiscal year ending April 30.

The performance graph above shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. The performance graph above will not be deemed incorporated by reference into any filing of our company under the Securities Act.

Repurchases of Common Stock

~~The~~During ~~following~~the ~~table~~quarter ~~sets~~ended ~~forth~~April ~~certain~~30, ~~information~~2025, ~~relating~~there towere ~~the~~no purchases of our common stock by us ~~and~~nor any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act. ~~during the quarter ended April 30, 2024 (dollars in thousands, except per share data):~~

					Total # of Shares		Maximum Dollar
					Purchased as		Value of Shares
					Part of Publicly		that May Yet Be
	Total # of		Average		Announced		Purchased
	Shares		Price Paid		Plans or		Under the Plans
Period	Purchased		Per Share (1)		Programs (2)		or Programs
February 1 to February 29, 2024		51,774	$	12.99		51,774	$	40,198
April 1 to April 30, 2024		24,908		16.48		24,908		39,787
Total		76,682	$	14.12		76,682	$	39,787

The average price per share excludes fees paid to acquire the shares.

On September 19, 2023, our Board of Directors authorized the repurchase of up to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024. During fiscal 2024, we repurchased 793,551 shares of our common stock for $10.2 million, utilizing cash on hand.

Item 6. RESERVED

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following Management’s Discussion and Analysis of Financial Condition and Results of Operations in conjunction with our consolidated financial statements and the related notes thereto contained elsewhere in this ~~report~~Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those set forth under Item 1A, “Risk Factors” and elsewhere in this ~~report~~Annual Report on Form 10-K.

This section generally discusses year-to-year comparisons between fiscal ~~2024~~2025 and fiscal ~~2023~~2024. A discussion of our results of operations, liquidity, and capital resources for fiscal ~~2023~~2024 compared with fiscal ~~2022~~2023 ~~are~~is not included in this Annual Report on Form 10-K and can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for fiscal ~~2023~~2024, filed with the SEC on June 2220, ~~2023~~2024. See also the discussion below related to an immaterial correction of an error.

~~2024~~2025 Highlights

Our operating results for fiscal ~~2024~~2025 included the following:

•

Net sales of $~~535~~474.87 million represented ana ~~increase~~decrease of $5661.62 million, or 11.84%, ~~over~~from the prior fiscal year.

•

Gross profit ~~increased~~decreased $330.69 million, or 219.36%, ~~over~~from the prior fiscal year, primarily as a result of ~~increased~~lower sales volume and a shift in product mix. Gross margin decreased ~~2.7%~~270 basis points from the prior fiscal year, ~~primarily~~in ~~because~~spite of ~~unfavorable~~a ~~fixed-cost~~$3.2 ~~absorption,~~million aslegal asettlement ~~result~~recognized ofin ~~lower~~the ~~production~~prior ~~volume,~~year comparable period. Excluding the impact of anthe ~~accrued~~prior year legal settlement, ~~the~~gross ~~impact~~margin ofwas ~~inflation~~330 onbasis ~~raw~~points ~~materials,~~lower ~~finished~~as ~~parts~~a result of higher material costs, ~~and~~higher ~~labor~~promotional costs, and ~~unfavorable~~a ~~inventory~~shift ~~reserves~~in ~~adjustments~~product mix to lower margin products, partially offset by ~~the~~lower ~~impact~~inventory ofadjustments ~~decreased~~(including ~~relocation~~standard ~~spend~~cost ~~and~~revaluations, ~~favorable~~shrink, ~~mix~~and ~~associated~~excess ~~with~~inventory ~~newly~~write ~~introduced products~~downs).

•

Net income was $3913.64 million, or $0.8630 per diluted share, compared with net income of $3641.94 million, or $0.8089 per diluted share, for the prior fiscal year.

•

During fiscal ~~2024~~2025, we paid $2223.01 million in dividends compared with $1822.30 million in fiscal ~~2023~~2024.

•

OnDuring ~~September~~fiscal 302025, ~~2021,~~ we ~~announced~~purchased ~~the Relocation. In connection with the Relocation~~1, ~~we built a new facility in Maryville~~844,073 ~~Tennessee~~shares ~~and relocated some~~ of our ~~Springfield,~~common ~~Massachusetts~~stock ~~operations~~for and all of our Columbia, Missouri distribution operations to Maryville. We are in the process of relocating our corporate headquarters and a portion of our Deep River, Connecticut plastic injection molding operations to Maryville. In total, we expect to incur capital expenditures in connection with the construction and equipping of the new facility in an aggregate amount of approximately $~~160.0 million to $170.0 million. Through April 30, 2024, we had incurred $157.0 million of capital expenditures and $~~25.65 million ~~of other restructuring charges related to the Relocation~~.

Immaterial Correction of an Error

During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in the interim and annual periods for the year ended April 30, 2024 and during the interim periods for the year ended April 30, 2025. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the quantitative and qualitative considerations of the error and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. Prior year amounts have been adjusted to correct the immaterial error, which overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and understated income tax expense by $569,000 and overstated the related amounts of income tax receivable by $548,000 and deferred income taxes by $21,000 as of April 30, 2024 and for the year then ended. Related changes to net income, corresponding line items within cash provided by operating activities, and related disclosures within the notes accompanying these financial statements, reflect the immaterial correction.

Key Performance Indicators

We evaluate the performance of our business based upon operating profit and net income, which includes net sales, cost of sales, selling and administrative expenses, and certain components of other income and expense. We also track our return on invested capital, and we use adjusted EBITDAS (earnings before interest expense, taxes, depreciation, amortization, and stock-based compensation expense, excluding certain non-operational items), which is a non-GAAP financial metric, as a supplemental measure of our performance in order to provide investors with an improved understanding of underlying performance trends. We evaluate the performance of our products using measurements such as gross margin per unit produced, units produced per day, revenue by trade channel, and incoming orders per day.

3936

improved understanding of underlying performance trends. We evaluate the performance of our products using measurements such as gross margin per unit produced, units produced per day, revenue by trade channel, and incoming orders per day.

External Factors that Impact the Firearm Industry

The firearm industry has been subject to many external factors in the past that have significantly increased the volatility of revenue generated for companies within the industry. These factors include, among others, fears surrounding crime and terrorism; significant news events~~, such as those related to mass shootings~~; potential restrictions on the sale or makeup of firearms; actual and potential legislative, judicial, and regulatory actions; economic changes; and changes in the social and political environment, including congressional and presidential elections. See Item IA1A, Risk Factors, for further discussion of external factors that impact the firearm industry. Although these external factors have created demand surges and volatility in the firearm market, and often make it difficult to predict demand, we believe that those external factors have also likely contributed to a long-term increase in consumer interest in firearms. We estimate that the annual domestic non-military firearm market is approximately $2.98 billion for handguns and $1.89 billion for long guns, excluding shotguns, based on the latest data for industry shipments as calculated by the National Shooting Sports Foundation, or NSSF, utilizing Firearms and Ammunition Excise Tax data for calendar year 2023. According to calendar ~~2022~~2024 reports by the ~~U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, or~~ ATF, the U.S. firearm manufacturing industry grew at a 101.05% compound annual growth rate in units from ~~2017~~2018 through ~~2022~~2023, although there has been wide variation among years (e.g., 2019 to 2020 grew 58.0%). We believe that this expanding base of consumers combined with our strong brand reputation and attractive price points lend support to our goal of continuing to increase our market share.

Results of Operations

Net Sales and Gross Profit

The following table sets forth certain information regarding net sales and gross profit for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change			% Change			2022
	2025			2024			$ Change			% Change			2023
Handguns	$	~~381~~331,~~898~~936		$	~~360~~381,~~668~~898		$	21(49,~~230~~962	)		5(13.91	)%	$	~~624~~360,~~219~~668
Long Guns		116,491			74,230			42,261			56.9	%		189,467
Long guns		103,956			116,491			(12,535	)		(10.8	)%		74,230
Other Products & Services		37,444			44,344			(6,900	)		-15.6	%		50,440
Other products & services		38,769			37,444			1,325			3.5	%		44,344
Total net sales	$	~~535~~474,~~833~~661		$	~~479~~535,~~242~~833		$	56(61,~~591~~172	)		(11.84	)%	$	~~864~~479,~~126~~242
Cost of sales		~~377~~347,~~740~~478			~~324~~377,~~705~~740			53(30,~~035~~262	)		16(8.30	)%		~~489~~324,~~562~~705
Gross profit	$	~~158~~127,~~093~~183		$	~~154~~158,~~537~~093		$	3(30,~~556~~910	)		2(19.36	)%	$	~~374~~154,~~564~~537
% of net sales (gross margin)		2926.58	%		3229.25	%								4332.32	%

The following table sets forth certain information regarding units shipped by trade channel for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (units in thousands):

Total Units Shipped	~~2024~~2025		~~2023~~2024		# Change			% Change		~~2022~~		2023
Handguns		~~836~~798		~~793~~836		43(38	)	~~5.4%~~	(4.5	)%	~~1,518~~		793
Long Guns		228		148		80		54.1%			363
Long guns		175		228		(53	)		(23.2	)%			148
Sporting Goods Channel Units Shipped	~~2024~~2025		~~2023~~2024		# Change			% Change		~~2022~~		2023
Handguns		~~775~~748		~~734~~775		41(27	)	~~5.6%~~	(3.5	)%	~~1,422~~		734
Long Guns		210		137		73		53.3%			342
Long guns		158		210		(52	)		(24.8	)%			137
Professional Channel Units Shipped	~~2024~~2025		~~2023~~2024		# Change			% Change		~~2022~~		2023
Handguns		6150		5961		2(11	)	~~3.4%~~	(18.0	)%	96		59
Long Guns		18		11		7		63.6%			21
Long guns		17		18		(1	)		(5.6	)%			11

Sales of our handguns increased $21.2 million, or 5.9%, over fiscal 2023, primarily as a result of increased shipments of revolvers, increased shipments of newly introduced products (defined as any new SKU not shipped in the prior year), which represented 22.8% of handgun sales in the period, the impact of targeted promotions on certain polymer frame pistols, and a 2%-5% price increase on select products that became effective in the third fiscal quarter, partially offset by lower demand for several older handgun products and certain products that were introduced in the 37

40Sales of our handguns decreased $50.0 million, or 13.1%, from fiscal 2024, primarily as a result of lower consumer demand within the industry and a shift in product mix to lower priced models, partially offset by increased shipments of newly introduced products (defined as any new SKU not shipped in the prior year), which represented 42.6% of handgun sales in the period, and a 2%-5% price increase on select products that became effective in the third fiscal quarter of fiscal 2024. Handgun unit shipments into the sporting goods channel decreased 3.5% from fiscal 2024, while overall consumer demand decreased 3.2%, (as indicated by adjusted background checks for handguns reported to the National Instant Criminal Background Check System, or NICS).

~~prior~~Sales of our long guns decreased $12.5 million, or 10.8%, from fiscal 2024, primarily as a result of lower consumer demand within the industry, partially offset by increased shipments of new products in the fiscal year, which represented 59.5% ~~Handgun~~of ~~unit~~sales in the period, a shift in product mix to higher priced models, and a 2%-5% price increase on select products that became effective in the third fiscal quarter of fiscal 2024. Unit shipments into the sporting goods channel ~~increased~~decreased 524.68% ~~over~~from fiscal ~~2023~~2024, while overall consumer demand for long guns decreased 72.71%, (as indicated by ~~adjusted~~NICS. ~~background~~We ~~checks~~believe ~~for~~that ~~handguns~~our ~~reported~~unit todemand declined at a significantly greater rate than NICS as a result of a combination of the ~~National~~industry-wide ~~Instant~~performance ~~Criminal~~in ~~Background~~some ~~Check~~of ~~System~~the long gun categories in which we participate relative to those categories in which we do not participate fully, orspecifically ~~NICS)~~hunting, as well as the impact in the current year of newly introduced products from the prior year that are at lower price points.

~~Sales~~Other ofproducts ~~our~~and ~~long~~services ~~guns~~sales increased $421.3 million, or 563.95%, over fiscal ~~2023~~2024, primarily asbecause ~~a result~~ of increased ~~shipments~~component ofparts ~~new~~and ~~products~~suppressor ~~in the fiscal year, which represented 52.2% of~~ sales ~~in the period. Unit shipments into the sporting goods channel increased 53.3% over fiscal 2023~~, ~~while~~partially ~~overall~~offset ~~consumer~~by ~~demand~~lower ~~for~~business-to-business ~~long guns decreased 3~~sales.~~0%, as indicated by NICS.~~

~~Other~~New products ~~and~~represented ~~services sales decreased $6~~42.98% ~~million,~~of ornet ~~15.6%,~~sales ~~from~~for ~~fiscal~~the ~~2023,~~12 ~~primarily~~months ~~because~~ended ofApril ~~decreased~~30, ~~sales~~2025 ofand ~~component~~included ~~parts,~~six ~~decreased~~new ~~business-to-business sales~~pistols, ~~and~~six ~~decreased~~new ~~licensing~~long ~~revenue~~guns, ~~partially~~and ~~offset~~many bynew ~~increased~~product ~~sales~~line ~~of handcuffs~~extensions.

~~New~~Gross ~~products~~margin ~~represented~~decreased ~~27.6%~~270 basis points from the prior fiscal year in spite of ~~net~~a ~~sales~~$3.2 ~~for~~million legal settlement recognized in the 12prior ~~months~~year ~~ended~~comparable ~~April~~period. ~~30,~~Excluding ~~2024~~the ~~and~~impact ~~included~~of ~~one~~the ~~new~~prior ~~pistol~~year legal settlement, ~~three~~gross ~~new~~margin ~~long~~was ~~guns~~330 basis points lower as a result of higher material costs, higher promotional costs, and ~~many~~a ~~new~~shift in product ~~line~~mix ~~extensions.~~to lower margin models, partially offset by lower inventory adjustments (including standard cost revaluations, shrink, and excess inventory write downs).

~~Gross~~Inventory ~~margin~~balances ~~for~~increased ~~fiscal~~$29.3 ~~2024~~million ~~decreased~~between byApril ~~2.7%~~30, ~~from~~2024 ~~the~~and ~~prior~~April ~~fiscal year~~30, ~~primarily~~2025 ~~because~~as of a ~~combination~~result of ~~unfavorable~~a ~~fixed-cost~~slowdown ~~absorption~~in ~~(as~~demand acombined ~~result~~with level loading of ~~lower~~our ~~production~~manufacturing ~~volumes),~~facilities ~~the~~to ~~impact~~ensure ofour anability ~~accrued~~to ~~legal~~satisfy ~~settlement~~anticipated ~~for~~future $3demand.2 ~~million,~~While ~~the~~inventory ~~impact~~levels, ofboth ~~inflation~~internally onand ~~raw~~in ~~materials~~the ~~and~~distribution ~~finished parts~~channel, ~~which~~in ~~increased~~excess ~~approximately~~of ~~5.6%~~demand ~~over~~may ~~the~~negatively ~~prior~~impact ~~fiscal~~future ~~year~~operating results, it is difficult to forecast the potential impact of ~~inflation~~distributor inventories on ~~labor~~future ~~costs~~revenue ~~(particularly~~and income as itdemand ~~relates~~is toimpacted ~~entry~~by ~~level~~many ~~positions)~~factors, ~~and~~including ~~unfavorable~~seasonality, ~~inventory~~new ~~reserve~~product ~~adjustments~~introductions, ~~including~~news ~~capitalized variances~~events, ~~partially~~political ~~offset~~events, byand ~~the~~consumer ~~impact~~tastes. ofWe ~~decreased~~expect ~~Relocation~~our ~~spend~~inventory ~~and~~levels ~~favorable~~to ~~mix~~moderately ~~associated~~decline ~~with~~during ~~new~~fiscal ~~products~~2026.

Our inventory levels decreased $16.6 million during fiscal 2024. While inventory levels, both internally and in the distribution channel, in excess of demand may negatively impact future operating results, it is difficult to forecast the potential impact of distributor inventories on future revenue and income as demand is impacted by many factors, including seasonality, new product introductions, news events, political events, and consumer tastes. We expect our inventories to increase in the first quarter of fiscal 2025 due to seasonal factors.

Operating Expenses

The following table sets forth certain information regarding operating expenses for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change			% Change			2022
	2025			2024			$ Change			% Change			2023
Research and development	$	79,~~266~~567		$	7,~~550~~258		$	~~(284~~2,309	)		-331.8	%	$	7,~~262~~550
Selling, marketing, and distribution		4041,~~564~~314			3640,~~976~~611			~~3,588~~703			91.7	%		4337,~~156~~073
General and administrative		6554,~~484~~933			6163,~~604~~133			3(8,~~880~~200	)		6(13.30	)%		7261,~~493~~572
Total operating expenses	$	113,314		$	106,130		$	7,184			6.8	%	$	122,911
Gain on sale/disposition of assets, net		(2,515	)		(11	)		(2,504	)		—			(65	)
% of net sales		21.1	%		22.1	%								14.2	%
Total operating expenses	$	103,298		$	110,991		$	(7,693	)		(6.9	)%	$	106,130
% of net sales		21.8	%		20.7	%								22.1	%

~~Operating expenses increased $7.2 million over the prior fiscal year.~~ Research and development expenses ~~decreased~~increased $~~284~~2.3 million,~~000,~~ primarily because of ~~decreased~~higher ~~sample~~materials and testing costs associated with new product development and higher compensation-related costs. Selling, marketing, and distribution expenses increased $~~3.6 million~~702,000 ~~primarily~~in asspite ~~a result~~ of a $1.9 million impairment ofon distribution equipment related to the Relocation, and one-time costs related to ~~the~~our grand opening event at our ~~new~~ Maryville facility, ~~increased~~in ~~compensation~~fiscal costs, increased spend on targeted promotions, and increased freight costs because of higher shipments, partially offset by decreased compensation-related Relocation costs and decreased digital advertising costs2024. ~~General~~Excluding and administrative expenses increased $3.9 million, primarily as a result of increased compensation expenses, legal expenses, and profit-related compensation costs, partially offset by decreased Relocation costs.

4138

the impact of these one-time prior year charges, selling, marketing, and distribution expenses increased $3.5 million, primarily as a result of higher spending on promotions and higher compensation-related costs. General and administrative expenses decreased $8.2 million, primarily because of lower Relocation costs, lower profit-related compensation expense, and lower insurance costs, partially offset by higher legal costs. During fiscal 2025, we sold certain real estate located adjacent to our former Missouri distribution center for $2.3 million, net of transaction costs, and recognized a $2.3 million pre-tax gain on sale.

Operating Income

The following table sets forth certain information regarding operating income for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change			% Change			2022
	2025			2024			$ Change			% Change			2023
Operating income	$	4423,~~779~~884		$	4847,~~407~~102		$	(323,~~628~~218	)		-7(49.53	)%	$	~~251~~48,~~653~~407
% of net sales (operating margin)		85.40	%		108.18	%								2910.1	%

Operating income for fiscal ~~2024~~2025 decreased $323.62 million, or 749.53%, from the prior fiscal year, primarily ~~because of the impact of an accrued legal settlement~~ for ~~$3.2 million, unfavorable inventory reserve adjustments, one-time costs associated with~~ the ~~grand~~reasons ~~opening~~outlined of our new Maryville facility, increased spend on targeted promotions, and increased freight costs because of higher shipments, partially offset by increased sales volumes and decreased Relocation spendabove.

Other Income

The following table sets forth certain information regarding other income for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023		$ Change			% Change			2022
	2025			2024		$ Change			% Change			2023
Other income	$	6,672		$	150	$	6,522			4360.3	%	$	2,868
Other (expense)/income, net	$	(17	)	$	6,672	$	(6,689	)		(100.3	)%	$	150

Other income for fiscal ~~2024~~2025 ~~increased~~decreased $6.57 million, primarily isas a result of the sale of certain intangible assets in fiscal 2024.

Interest (Expense)

The following table sets forth certain information regarding interest expense for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change		% Change			2022
	2025			2024			$ Change		% Change			2023
Interest expense	$	(2,055	)	$	(331	)	$	1,724		521.2	%	$	(2,135	)
Interest expense, net	$	(4,622	)	$	(2,055	)	$	2,567		124.9	%	$	(331	)

Interest expense increased by $12.76 million ~~over the prior fiscal year~~, primarily as a result of higher average ~~outstanding~~ debt balances ~~during~~and lower average cash balances compared with fiscal 2024.

Income Tax Expense

The following table sets forth certain information regarding income tax expense for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change			% Change			2022
	2025			2024			$ Change			% Change			2023
Income tax expense	$	95,~~787~~820		$	1110,~~350~~356		$	(14,~~563~~536	)		~~-13~~(43.8	)%	$	5711,~~892~~350
% of income from operations (effective tax rate)		1930.82	%		2320.50	%					-310.72	%		2223.95	%

We recorded income tax expense of $9.8 million for fiscal 2024, $1.6 million lower than the prior fiscal year, in spite of increased profitability, primarily as a result of an amendment of prior year returns for the foreign derived income deduction that favorably reduced current year income tax expense by $1.4 million, or 2.9%. Our effective tax rates were 19.8% and 23.5% for fiscal 2024 and 2023, respectively. Adjusting for the foreign derived income deduction for each year, the effective tax rates would have been 22.7% and 23.0% for fiscal 2024 and 2023, respectively.39

42We recorded income tax expense of $5.8 million for fiscal 2025, $4.5 million lower than the prior fiscal year, primarily because of decreased profitability. Our effective tax rates were 30.2% and 20.0% for fiscal 2025 and 2024, respectively. The 2024 rate was impacted favorably as a result of an amendment of prior year returns for the foreign derived income deduction that reduced 2024 income tax expense by $1.4 million, or 2.9%. Adjusting for the foreign derived income deduction for each year, the effective tax rate would have been 22.8% for fiscal 2024, which is 7.9% lower than fiscal 2025 due primarily to decreased pretax income and changes in state apportionment and other state adjustments.

Net Income

The following table sets forth certain information regarding net income and the related per share data for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands, except per share data):

	2024		2023		$ Change			% Change			2022
	2025		2024		$ Change			% Change			2023
Net income	$	3913,~~609~~425	$	3641,~~876~~363	$	2(27,~~733~~938	)		7(67.45	)%	$	~~194~~36,~~494~~876
Net income per share
Net income per share:
Basic	$	0.8630	$	0.8090	$	(0.0660	)		7(66.57	)%	$	40.1280
Diluted	$	0.8630	$	0.8089	$	(0.0659	)		7(66.53	)%	$	40.0880

Net income ~~increased~~decreased $227.79 million, or $0.0659 per diluted share, from ~~the prior~~ fiscal ~~year~~2024 primarily for reasons outlined above.

Liquidity and Capital Resources

Our principal cash requirements are to finance the growth of our operations, including working capital and capital expenditures, and return capital to our stockholders. Capital expenditures for new product development and repair and replacement of equipment represent important cash needs.

The following table sets forth certain cash flow information for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (dollars in thousands):

	2024			2023			$ Change			% Change			2022
	2025			2024			$ Change			2023
Operating activities	$	~~106~~(7,~~739~~223	)	$	16106,~~732~~739		$	90(113,~~007~~962	)	$	~~537.9~~16,732	%	$	~~137,814~~
Investing activities		(8119,~~490~~173	)		(8981,~~781~~490	)		862,~~291~~317			~~9.2~~(89,781	%)		~~(24,116~~	)
Financing activities		(179,~~966~~212	)		5(17,~~877~~966	)		~~(23~~8,~~843~~754	)		~~405.7~~5,877	%		~~(105,987~~	)
Total cash flow	$	7(35,~~283~~608	)	$	~~(67~~7,~~172~~283	)	$	74(42,~~455~~891	)	$	~~-110.8~~(67,172	%)	$	~~7,711~~

Operating Activities

Operating activities generally represent the principal source of our cash flow.

Cash ~~provided~~used byin operating activities was $~~106.~~7.2 million in fiscal ~~2024,~~2025 orcompared with $90106.07 million ~~higher~~of ~~than~~cash ~~the~~provided ~~prior~~in fiscal ~~year~~2024. Cash ~~from~~used in operating activities in fiscal 2025 was ~~favorably~~unfavorably impacted by a $29.3 million increase in inventory compared with a $16.6 million decrease in inventory in fiscal 2024, ~~compared with~~ a $4014.58 million ~~increase~~decrease in ~~inventory~~accounts inpayable ~~fiscal~~compared ~~2023,~~with ana $18.2 million increase in accounts payable in fiscal 2024, ~~compared with~~ an $8.61 million decrease in ~~fiscal~~accrued ~~2023,~~payroll and incentives compared with a $61.34 million ~~increase~~decrease in accrued ~~expenses~~payroll and ~~deferred~~incentives ~~revenue~~ in fiscal 2024, a $4.4 million decrease in accrued profit sharing compared with a $~~3.6~~895,000 ~~million~~increase ~~decrease~~in accrued profit sharing in fiscal ~~2023~~2024, and lower net income. ~~Partially~~Cash ~~offsetting~~used ~~this~~in ~~favorable~~operating ~~activity~~activities in fiscal 2025 was favorably impacted by a $3.92 million ~~increase~~decrease in accounts receivable ~~in fiscal 2024~~ compared with a $73.69 million ~~decrease~~increase in accounts receivable in fiscal ~~2023 due to increased sales volume~~2024.

Investing Activities

Cash used in investing activities indecreased ~~fiscal 2024 was~~ $862.3 million ~~lower~~for ~~than~~ fiscal ~~2023,~~2025 ~~primarily~~compared aswith afiscal ~~result~~2024. ofWe paid $621.56 million ~~received~~for capital expenditures for ~~the~~fiscal ~~sale~~2025, ofwhich ~~certain~~was ~~intangible~~$69.2 ~~assets~~million ~~and~~lower ~~the~~than ~~sale~~fiscal 2024, primarily as a result of ~~assets~~payments related to the Relocation in the prior year period.

~~We currently expect to spend $25.0 to $30.0 million on capital expenditures in fiscal 2025.~~40

We currently expect to spend $25.0 to $30.0 million on capital expenditures in fiscal 2026.

Financing Activities

Cash used in financing activities was $189.02 million infor fiscal ~~2024~~2025 compared with ~~cash provided by financing activities of~~ $518.90 million in fiscal ~~2023~~2024. Cash used in financing activities induring fiscal ~~2024~~2025 was primarily ~~included~~the result of $2225.05 million inof ~~dividend~~share ~~distributions~~repurchases and $1023.21 million ofin ~~share~~dividend ~~repurchases~~distributions, partially offset by ~~a net~~ $~~15.0~~40 million ~~borrowing~~of net borrowings under our revolving line of credit.

~~Finance~~Credit ~~Lease~~Facilities –— We ~~are~~entered ainto ~~party~~the toSecond aAmended ~~material~~and ~~finance~~Restated ~~lease,~~Credit ~~the~~Agreement ~~Missouri~~on ~~Lease~~October 3, ~~which~~2024. isThe Second Amended and Restated Credit Agreement provides for a revolving line of credit of $46175.20 million ~~lease~~at ~~for~~any ~~our~~one ~~Missouri~~time, ~~distribution~~or ~~center~~the ~~that~~Revolving ~~has~~Line. anThe ~~effective~~Revolving Line bears interest at either the Base Rate (as defined in the Second Amended and Restated Credit Agreement) or the Adjusted Term SOFR rate of(as ~~approximately~~defined in the Second Amended and Restated Credit Agreement), plus an applicable margin based on our consolidated leverage ratio. The Second Amended and Restated Credit Agreement also provides a swingline facility in the maximum amount of $5.0% million at any one time (subject to availability under the Revolving Line). Each Swingline Loan (as defined in the Amended and isRestated ~~payable~~Credit Agreement) bears interest at the Base Rate, plus an applicable margin based on our Adjusted Consolidated Leverage Ratio (as defined in ~~240~~the ~~monthly~~Second ~~installments~~Amended ~~through~~and ~~fiscal~~Restated ~~2039~~Credit Agreement). ~~The~~Subject ~~building~~to isthe ~~pledged~~satisfaction of certain terms and conditions described in the Second Amended and Restated Credit Agreement, we have an option to ~~secure~~increase the ~~amounts~~Revolving ~~outstanding~~Line by an aggregate amount not exceeding $50.0 ~~During~~million. ~~fiscal~~The Revolving Line matures on the earlier of October 3, 2029 or the date that is six months in advance of the earliest maturity of any Permitted Notes (as defined in the Second Amended and Restated Credit Agreement) under the Second Amended and Restated Credit Agreement.

43As of April 30, 2025, we had $80.0 million of borrowings outstanding on the Revolving Line, bearing interest at an average rate of 6.69%, which was equal to the Adjusted Term SOFR rate plus an applicable margin.

~~2024,~~The wecredit ~~paid~~agreement ~~approximately~~for ~~$1.3 million in principal payments relating to~~ the ~~Missouri~~Revolving ~~Lease.~~Line ~~With~~contains ~~the~~financial ~~completion~~covenants ofrelating ~~the Separation, we entered into the Missouri Sublease. On July 16, 2022, we entered into an amendment~~ to ~~the~~maintaining ~~Missouri~~a ~~Sublease,~~maximum ~~increasing~~leverage ~~the~~ratio ~~subleased space to 64.7% of the facility under the same terms as the Missouri Lease. As part of the Relocation, on January 31, 2023, we entered into the Assignment~~ and ~~Assumption~~a ~~Agreement~~minimum ~~and~~debt ~~the~~service ~~Amended~~coverage ~~and Restated Guaranty~~ratio. We ~~terminated~~were ~~the~~in ~~Missouri~~compliance ~~Sublease~~with asall ofdebt ~~January~~covenants 1,as ~~2024. For fiscal 2024, income related to the Missouri Sublease was $2.7 million,~~ of ~~which~~April ~~$1.3 million was recorded in general and administrative expenses and $1.4 million was recorded in interest expense~~30, ~~net, in our consolidated statements of income~~2025.

~~Credit~~Share ~~Facilities~~Repurchase Programs – WeOn ~~maintain~~September an19, ~~unsecured~~2023, ~~revolving~~our ~~line~~Board of ~~credit~~Directors ~~with~~authorized ~~TD Bank, N.A. and other lenders, or~~ the ~~Lenders,~~repurchase ~~which~~of ~~includes availability~~ up to $~~100~~50.0 million atof ~~any~~our ~~one~~common ~~time~~stock, orsubject ~~the~~to ~~Revolving~~certain ~~Line. The Revolving Line provides for availability for general corporate purposes~~conditions, ~~with~~in ~~borrowings to bear interest at either~~ the ~~Base~~open ~~Rate~~market or ~~SOFR~~in ~~rate,~~privately ~~plus~~negotiated antransactions ~~applicable~~through ~~margin~~September ~~based~~19, ~~on our consolidated leverage ratio~~2024, asor ofthe ~~April~~2023 ~~30, 2024~~Authorization. ~~The~~During ~~credit~~fiscal ~~agreement~~2024, ~~also~~we ~~provides~~purchased a793,551 ~~swingline~~shares ~~facility~~of inour ~~the~~common ~~maximum~~stock ~~amount~~for of $510.02 million ~~at any one time (subject to availability~~ under the ~~Revolving~~2023 ~~Line)~~Authorization. ~~Each~~During ~~Swingline~~fiscal ~~Loan~~2025, ~~bears~~we ~~interest~~purchased ~~at the Base Rate~~1,531,763 ~~plus~~shares anof ~~applicable margin based on~~ our ~~consolidated~~common ~~leverage~~stock ~~ratio~~for $21.4 Inmillion ~~response~~under ~~to a Springing Lien Triggering Event (as defined in~~ the ~~credit~~2023 ~~agreement),~~Authorization. weThe ~~would~~2023 beAuthorization ~~required~~expired toon ~~enter~~September ~~into certain documents that create in favor of TD Bank~~19, N2024.~~A.,~~ asOn ~~administrative~~September ~~agent~~5, ~~and the lenders party to such documents as legal~~2024, ~~valid,~~our ~~and~~Board ~~enforceable~~of ~~first~~Directors ~~priority~~authorized ~~lien on~~ the ~~collateral~~repurchase ~~described~~of ~~therein.~~up ~~Subject~~ to ~~the~~$50.0 ~~satisfaction~~million of ~~certain~~our ~~terms~~common ~~and~~stock, ~~conditions~~subject ~~described~~to incertain ~~the credit agreement~~conditions, wein ~~have an option to increase~~ the ~~Revolving~~open ~~Line~~market byor anin ~~aggregate~~privately ~~amount~~negotiated ~~not~~transactions ~~exceeding~~from ~~$50.0~~September ~~million.~~20, ~~The~~2024 ~~Revolving~~through ~~Line~~September ~~matures on the earlier of August 24~~20, 2025, or the ~~date~~2024 ~~that~~Authorization. isDuring ~~six~~fiscal ~~months~~2025, inwe ~~advance~~repurchased of312,310 ~~the~~shares ~~earliest~~of ~~maturity~~our ofcommon ~~any~~stock ~~permitted~~for ~~notes~~$4.1 million under the ~~credit~~2024 ~~agreement~~Authorization. OnDuring ~~April~~fiscal 282025, ~~2023,~~ we ~~amended~~repurchased ~~our~~a ~~existing~~total ~~credit~~of ~~agreement to~~1, ~~among other things~~844,073 ~~replace~~shares ~~LIBOR with SOFR as the interest rate benchmark and amend the definition~~ of ~~“Consolidated~~our ~~Fixed~~common ~~Charge~~stock ~~Coverage~~for ~~Ratio”~~$25.5 ~~to exclude unfinanced capital expenditures in connection with the Relocation~~million.

AsFinance ofLease ~~April~~– ~~30,~~We ~~2024~~are a party to a material finance lease, wewhich ~~had~~is a $4046.02 million lease that has an effective interest rate of ~~borrowings~~approximately 5.0% and is payable in 240 monthly installments through fiscal 2039, as well as a related payment and performance guaranty, dated October 26, 2017, in favor of the Original Missouri Landlord. The building is pledged to secure the amounts outstanding. onAs part of the ~~Revolving~~Relocation, ~~Line~~on January 31, ~~bearing~~2023, ~~interest~~we atentered aninto ~~average~~the ~~rate~~Assignment and Assumption Agreement and the Amended and Restated Guaranty. Because of 7the Amended and Restated Guaranty, we continue to account for this lease as we have since prior to the Relocation.~~18%~~ During fiscal 2025, ~~which~~AOUT ~~was~~made ~~equal~~payments pursuant to ~~SOFR~~this ~~rate~~lease ~~plus~~directly anto ~~applicable~~the ~~margin~~landlord and we neither received nor paid any cash related to this arrangement. See Note 3 — Leases for additional information.

~~The~~As ~~credit~~of ~~agreement~~April ~~for~~30, ~~our~~2025, ~~credit~~we ~~facility~~had ~~contains financial covenants relating to maintaining a maximum leverage ratio and a minimum debt service coverage ratio~~$25.2 Wemillion ~~were~~ in ~~compliance~~cash ~~with~~and ~~all~~cash ~~debt~~equivalents ~~covenants~~on ~~as of April 30, 2024~~hand.

Share Repurchase Programs – On September 19, 2023, our Board of Directors authorized the repurchase of $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024. During fiscal 2024, we purchased 793,551 shares of our common stock for $10.2 million under this authorization. We did not purchase any shares of our common stock during fiscal 2023, and we did not have an authorized repurchase program as of April 30, 2023. 41

AtBased ~~April~~upon 30our current working capital position, ~~2024~~current operating plans, and expected business conditions, we ~~had~~believe ~~$60.8~~that ~~million~~our inexisting ~~cash~~capital resources and ~~cash~~credit ~~equivalents~~facilities onwill ~~hand~~be adequate to fund our operations for at least the next 12 months.

~~Based~~Our ~~upon~~future ~~our~~capital ~~current~~requirements ~~working~~will ~~capital~~depend ~~position~~on many factors, ~~current~~including ~~operating~~net ~~plans~~sales, the timing and ~~expected~~extent ~~business~~of ~~conditions~~spending to support product development efforts, wethe ~~believe~~expansion ~~that~~of ~~our~~sales ~~existing~~and ~~capital~~marketing ~~resources~~activities, the timing of introductions of new products and ~~credit~~enhancements ~~facilities~~to ~~will~~existing beproducts, and the costs to ensure access to adequate manufacturing capacity. Future equity or debt financing may not be available to ~~fund~~us on acceptable terms or at all. If sufficient funds are not available or are not available on acceptable terms, our ~~operations~~ability ~~for~~to ~~the~~take ~~next~~advantage 12of ~~months.~~unexpected business opportunities or to respond to competitive pressures could be limited or severely constrained.

Our future capital requirements will depend on many factors, including net sales, the timing and extent of spending to support product development efforts, the expansion of sales and marketing activities, the timing of introductions of new products and enhancements to existing products, and the costs to ensure access to adequate manufacturing capacity.

Inflation

During fiscal 2025, 2024 and 2023, inflationary pressures resulted in increases in the cost of certain of the components, parts, raw materials, and other supplies necessary for the production of our products, as well as labor costs. We ~~do not believe that inflation had a material impact on us during fiscal 2022.~~ We expect that inflation will continue to ~~have an~~ impact us during fiscal ~~2025~~2026.

Critical Accounting Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires that we make accounting estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. See Note 2 — Significant Accounting Policies for additional information.

Critical accounting estimates are defined as those reflective of significant judgments, estimates, and uncertainties, which may result in materially different results under different assumptions and conditions. We believe the following are our critical accounting estimates:

Revenue Recognition

Description: We recognize revenue in accordance with the provisions of Accounting Standards Update, or ASU, Revenue from Contracts with Customers (Topic 606), which became effective for us on May 1, 2018. Generally, all performance obligations are satisfied and revenue is recognized when the risks and rewards of ownership have transferred to the customer, which is generally upon shipment but could be delayed until the receipt of customer acceptance.

Judgments and Uncertainties: In some instances, sales include multiple performance obligations. These may include sales promotion programs that entitle customers to receive rebates or free goods based upon their purchase of our products. The fulfillment of these free goods is our responsibility. We recognize revenue proportionally as each performance obligation is satisfied, based on the relative transaction price of each product. The net change in contract liabilities for a given period is reported as an increase or decrease to sales.

Our product sales are generally sold free on board, or FOB, shipping point and provide payment terms to most commercial customers ranging from 20 to 60 days of product shipment with a discount available in certain cases for early payment. In some instances, we may provide longer payment terms. We do not consider these extended terms to be a significant financing component of the contract because the payment terms are always less than one year. In all cases, we consider our costs related to shipping and handling to be a cost of fulfilling the contract with the customer.

Sensitivity of Estimate to Change: The liability relating to performance obligations is based on the estimated level of participation in the sales promotional program and the timing of the shipment of all products included in the promotional program. For contracts with discounted terms, we determine the transaction price upon establishment of the contract that contains the final terms of the sale, including the description, quantity, and price of each product purchased. We estimate variable consideration relative to the amount of cash discounts to which customers are likely to be entitled.

Valuation of Goodwill, Long-lived Tangible, and Intangible Assets

Description: We evaluate the recoverability of long-lived assets, or asset groups, whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. When such evaluations indicate that the related future undiscounted cash flows are not sufficient to recover the carrying values of the assets, such carrying values are reduced to fair value and this adjusted carrying value becomes the asset’s new cost basis. We determine fair value primarily using future anticipated cash flows that are directly associated with and are expected to arise as a direct result of the use and eventual disposition of the asset, or asset group, discounted using an interest rate commensurate with the risk involved.

Judgments and Uncertainties: Determining whether impairment indicators exist and estimating the fair value of our goodwill, tangible and intangible assets requires significant judgment. Estimating the fair value of goodwill requires management to make assumptions and projections of future cash flows, revenues, earnings, discount rates, long term growth rates, and other factors.

Sensitivity of Estimate to Change: The assumptions used to assess impairment consider historical trends, macroeconomic conditions, and projections consistent with our operating strategy. Changes in these estimates can have a significant impact on the assessment of fair value which could result in material impairment losses.

Inventories

Description: We value inventories at the lower of cost, using the first-in, first-out, or FIFO, method, or net realizable value.

Judgments and Uncertainties: An allowance for potential non-saleable inventory as a result of excess stock or obsolescence is based upon a detailed review of inventory, past history, and expected future usage.

Sensitivity of Estimate to Change: The assumptions used to assess inventory valuation consider historical activity. Changes in these estimates can have a significant impact on the assessment of excess and obsolete inventory, which could result in material losses.

Warranty

Description: We generally provide a limited one-year warranty and a lifetime service policy to the original purchaser of our new firearm products. We will also repair or replace certain products or parts found to be defective under normal use and service with an item of equivalent value, at our option, without charge during the warranty period. We provide for estimated warranty obligations in the period in which we recognize the related revenue.

Judgments and Uncertainties: We quantify and record an estimate for warranty-related costs based on our actual historical claims experience and current repair costs. We adjust accruals as warranty claims data and historical experience warrant. Should we experience actual claims and repair costs that are higher than the estimated claims and repair costs used to calculate the provision, our operating results for the period or periods in which such returns or additional costs materialize could be adversely impacted.

Sensitivity of Estimate to Change: The assumptions used to assess warranty consider historical trends. Changes in these estimates can have a significant impact on the assessment of warranty, which could result in material losses.

Relocation

Description: As part of the Relocation, we offered a severance and relocation package to every affected employee. The severance was, in part, based on the employee's service term, job function, and classification status, and required the employee to remain active and in good standing through their relocation date.

Judgments and Uncertainties: In accounting for severance and relocation costs, we must make a variety of assumptions and estimates, including the number of employees that will meet all of the requirements to receive the severance and relocation package, the number of those employees that will be electing to relocate versus opt for severance, and the potential cost of self-insured benefits that may be incurred during any potential severance period. We consider current facts when determining these estimates.

Sensitivity of Estimate to Change: The liabilities relating to severance and relocation obligations is based on the number of employees affected by the Relocation, the number of employees that have decided to relocate, the estimated cost of benefits during the severance period, and the employees' terms of service and rates of pay as of the fiscal year end. Changes in these assumptions can have a significant impact on the estimate of these liabilities.

Recent Accounting Pronouncements

The nature and impact of recent accounting pronouncements is discussed in Note 2 — Significant Accounting Policies to our consolidated financial statements, which is incorporated herein by reference.

Off-Balance Sheet Arrangements

We do not have any transactions, arrangements, or other relationships with unconsolidated entities that are reasonably likely to affect our liquidity or capital resources. We have no special purpose or limited purpose entities that provide off-balance sheet financing, liquidity, or market or credit risk support or that engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected in our consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We do not enter into any market risk sensitive instruments for trading purposes. Our principal market risk relates to the variable interest rate associated with our credit agreement, which consists of a $~~100~~175.0 million revolving line of credit that bears interest at either the Base Rate or Adjusted Term SOFR rate, plus an applicable margin based on our consolidated leverage ratio. For more information regarding our financing arrangements, see Note 4 — Notes, ~~Loans Payable,~~ and ~~Financing~~Loans ~~Arrangements~~Payable. As of April 30, ~~2024~~2025, we had $4080.0 million of borrowings outstanding on the Revolving Line, which bore an interest rate of 76.1869%, which is equal to Adjusted Term SOFR rate plus an applicable margin. On April 28, 2023, we entered into an amendment to our existing credit agreement to, among other things, replace LIBOR with SOFR as the interest rate benchmark and amend the definition of "Consolidated Fixed Charge Coverage Ratio" to exclude unfinanced capital expenditures in connection with the Relocation.

Item 8. Financial Statements and Supplementary Data

Reference is made to our consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this ~~report~~Annual Report on Form 10-K, which financial statements, notes, and report are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of April 30, ~~2024~~2025, the end of the period covered by this Annual Report on Form- 10-K. Based on that evaluation, we have concluded that, as of the end of the period covered by this Annual Report on Form- 10-K, our disclosure controls and procedures were not effective. toThis ~~provide~~determination ~~such~~is ~~reasonable~~based ~~assurance~~on the material weakness in our internal control over financial reporting described below.

Management’s Annual Report on Internal Control Over Financial Reporting

~~Evaluation~~Management ofis ~~Disclosure~~responsible ~~Controls~~for establishing and ~~Procedures~~maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

~~Management~~A iscompany's ~~responsible~~internal ~~for~~control ~~establishing~~over ~~and~~financial ~~maintaining~~reporting ~~adequate~~includes ~~internal~~those ~~control~~policies ~~over~~and ~~financial~~procedures ~~reporting,~~that aspertain ~~such~~to ~~term~~the ismaintenance ~~defined~~of records that, in ~~Rules~~reasonable ~~13a-15(f)~~detail, accurately and ~~15d-15(f)~~fairly ~~under~~reflect the ~~Exchange~~transactions ~~Act.~~and ~~Our~~dispositions ~~internal~~of ~~control~~the ~~over~~assets ~~financial~~of ~~reporting~~the iscompany; ~~designed to~~ provide reasonable assurance ~~regarding~~that ~~the~~transactions ~~reliability~~are recorded as necessary to permit preparation of financial ~~reporting~~statements in accordance with generally accepted accounting principles, and ~~the~~that ~~preparation~~receipts and expenditures of ~~consolidated~~the ~~financial~~company ~~statements~~are ~~for~~being ~~external~~made ~~purposes~~only in accordance with ~~accounting~~authorizations ~~principles~~of ~~generally~~management ~~accepted~~and indirectors of the ~~United~~company; ~~States~~and provide reasonable assurance regarding prevention or timely detection of ~~America~~unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). Based on that evaluation, management believes that our internal control over financial reporting was effective as of April 30, 2024.43

~~The~~Management, with participation of the CEO and CFO, under the oversight of our Audit Committee of our Board of Directors, conducted an evaluation of the effectiveness of our internal control over financial reporting as of April 30, ~~2024~~2025, ~~has~~using ~~been~~the ~~audited~~framework byestablished ~~Deloitte~~in &Internal ~~Touche~~Control-Integrated ~~LLP~~Framework (2013), anissued ~~independent~~by ~~registered~~the ~~public~~Committee ~~accounting~~of ~~firm~~Sponsoring Organizations of the Treadway Commission (the COSO Framework). Based on that evaluation, ~~which~~management ~~also~~concluded ~~audited~~that our ~~consolidated~~internal control over financial ~~statements~~reporting ~~for~~was ~~fiscal~~not ~~2024.~~effective ~~Deloitte~~as &of ~~Touche~~April ~~LLP's~~30, ~~report~~2025 ondue ~~our~~to the material weakness in internal control over financial reporting, isdescribed ~~included herein~~below.

~~Inherent~~A ~~Limitations~~material onweakness, ~~the~~as ~~Effectiveness~~defined in Exchange Act Rule 12b-2, is a deficiency, or a combination of ~~Controls~~deficiencies, ~~and~~in ~~Procedures~~internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

InA ~~designing~~deficiency ~~and~~was ~~evaluating~~identified in our ~~disclosure~~internal ~~controls~~control ~~and~~over ~~procedures,~~financial wereporting ~~recognize~~related ~~that~~to ~~any~~the ~~controls~~operation ~~and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance~~ of ~~achieving~~ the ~~desired~~ control ~~objectives.~~to Inreview ~~addition,~~ the ~~design~~accrual offor ~~disclosure~~certain ~~controls~~legal ~~and~~expenses. ~~procedures~~This ~~must~~control ~~reflect~~did ~~the~~not ~~fact~~operate ~~that~~effectively ~~there~~due ~~are~~to ~~resource~~insufficient ~~constraints~~knowledge and weexperience ~~are is required to apply judgment in evaluating the benefits~~ of ~~possible~~our ~~controls~~personnel ~~and~~related ~~procedures relative~~ to ~~their~~the ~~costs.~~reconciliation ~~The design~~ of ~~any~~the ~~disclosure~~accrual ~~controls~~for ~~and procedures also is based in part upon~~ certain ~~assumptions~~legal ~~about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions~~expenses.

The material weakness resulted in immaterial misstatements to the accrual for certain legal expenses that were recorded in our consolidated financial statements during the interim and annual periods for the year ended April 30, 2024 and during the interim periods for the year ended April 30, 2025. Prior period amounts have been adjusted to correct the immaterial error, which overstated accrued expenses and deferred revenue and general and administrative expenses, understated income tax expense, and overstated income tax receivable and deferred income taxes.

The material weakness creates a reasonable possibility that a material misstatement to our annual or interim consolidated financial statements would not be prevented or detected on a timely basis by our internal controls.

Because of this material weakness, management concluded that we did not maintain effective internal control over financial reporting as of April 30, 2025.

Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, issued an adverse opinion on the effectiveness of the Company's internal control over financial reporting. KPMG LLP's report appears elsewhere in this Form 10-K.

Management’s Plan for Remediation of the Material Weakness

In response to the material weakness described above, with the oversight of the Audit Committee of our Board of Directors, management plans to remediate the material weakness such that the control over the accrual for certain legal expenses is operating effectively. The remediation actions include developing a training program for certain personnel to increase their knowledge of accruals for legal expenses.

Our remediation efforts are ongoing, and management expects that the remediation efforts and testing will continue in fiscal 2026. Management believes that these actions, and the improvements achieved as a result thereof, will effectively remediate the material weakness. However, the material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Control over Financial Reporting

~~There~~No ~~was no~~ change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fourth fiscal quarter of ~~2024~~2025 ~~that~~ has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

The adoption or termination of contracts, instructions, or written plans for the purchase and sale of our securities by our Section 16 officers and directors for the three months ended April 30, 2024, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5Rule10b5-1~~(c)~~ ~~under~~Trading ~~the~~Arrangement; ~~Exchange Act, or a~~ Non-Rule 10b5-1 ~~Plan,~~Trading ~~were~~Arrangement ~~as follows:~~

Name

Title

Action

Date Adopted

Expiration Date

Aggregate # of Securities to be Purchased/Sold

Robert L. Scott

Director

Adoption of Rule 10b5-1 Plan

March 29, 2024

October 28, 2024

8,071

~~Robert~~During ~~L. Scott,~~ the ~~Chairman~~three ofmonths ~~our~~ended ~~Board~~April of30, ~~Directors~~2025, ~~entered~~none ~~into~~of aour ~~Rule~~directors ~~10b5-1~~or ~~Plan~~officers onadopted ~~March~~or ~~29,~~terminated ~~2024.~~a ~~Mr. Scott's~~ "non-Rule 10b5-1 ~~Plan~~trading ~~provides~~arrangement" ~~for~~(as ~~the~~defined ~~potential~~in ~~sale~~Item of408 ~~up to 8,071 shares~~ of ~~our~~Regulation ~~common stock and expires on October 28, 2024, or upon the earlier completion of all the transactions authorized thereunder~~S-K).

48Amendment of Material Definitive Agreements

~~During~~On June 18, 2025, the ~~three~~Compensation ~~months~~Committee ~~ended~~of ~~April~~our 30Board of Directors approved an amendment and restatement of the Smith & Wesson Brands, ~~2024~~Inc. Executive Severance Plan, ~~none~~the Amended and Restated Severance Plan. Among other things, the Amended and Restated Severance Plan: (i) increases the duration of ~~our~~the ~~directors~~Change in Control Protection Period (as defined therein) from 12 months to 24 months; (ii) increases the period of base salary continuation in the case of a termination without Good Cause (as defined therein) or ~~officers~~a ~~adopted~~resignation for Good Reason (as defined therein) from 26 weeks to 18 months; (iii) increases the period of base salary continuation in the case of a termination without Good Cause during a Potential Change in Control Protection Period (as defined therein) or ~~terminated~~Change in Control Protection Period (as defined therein) or a ~~"non-Rule~~resignation ~~10b5-1~~upon ~~trading~~an ~~arrangement"~~Adverse Change in Control Effect (as defined therein) from 52 weeks to 24 months; (iv) increases the annual cash bonus payable under the scenario described in ~~Item~~(iii) ~~408~~above to two times target; (v) provides that the non-competition restriction period will apply for the period during which the individual receives cash severance; (vi) increases the duration of ~~Regulation~~the Sapplication of the non-Ksolicitation restriction from 12 months to 18 months; and (vii) includes other administrative changes.

On June 18, 2025, we entered into an Amended and Restated Employment Agreement with our President and Chief Executive Officer, Mark Smith. Among other things, the Amended and Restated Employment Agreement: (a) increases the duration of the protection period related to a Change in Control (as defined therein) from 12 months to 24 months; (b) increases the period of base salary continuation in the case of a Change in Control from 18 months to 24 months; (c) increases the annual cash bonus payable under the scenario described in (b) above to two times target; (d) increases the duration of the car allowance, medical coverage and COBRA coverage benefits under the scenario described in (b) above from 18 months to two years; and (e) includes other administrative changes.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

4945

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our ~~2024~~2025 Annual Meeting of Stockholders. The information required by this Item relating to our executive officers is included in Item 1, “Business — Executive Officers” of this ~~report~~Annual Report on Form 10-K.

We have adopted our Policy on Inside Information and Insider Trading governing the purchase, sale, and/or other disposition of our securities by our directors, officers, employees, and other covered persons. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us. A copy of this policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our ~~2024~~2025 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

5046

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

Financial Statements and Financial Statement Schedules

(1)

Consolidated Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this ~~report~~Annual Report on Form 10-K.

(2)

All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because of the absence of the conditions under which they are required or because the information required is shown in the financial statements or notes above.

(b)

Exhibits

ExhibitNumber		Exhibit
2.13***		Separation and Distribution Agreement, dated as of August 21, 2020, by and between the Registrant and American Outdoor Brands, Inc. (1)
3.1		Amended and Restated Bylaws (2)
3.4		Second Amended and Restated Articles of Incorporation (3)
3.9		Certificate of Withdrawal of Certificate of Designation (4)
4.1		Form of Common Stock Certificate (5)
4.2		Description of Securities (6)
10.51**		Agreement with Respect to Defense of Smith & Wesson: Firearms Litigation, dated as of November 11, 2004 (7)
10.107*		Smith & Wesson Brands, Inc. Executive Severance Pay Plan ~~(8)~~
10.108*		Adoption Agreement to the Smith & Wesson Nonqualified Supplemental Deferred Compensation Plan (9)
10.109*		Smith & Wesson Nonqualified Supplemental Deferred Compensation Plan Document (9)
10.110(a)*		2013 Incentive Stock Plan (10)
10.110(b)*		2022 Incentive Stock Plan (11)
10.111(b)*		Form of Restricted Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made beginning in April 2015 (12)
10.111(c)*		Form of Restricted Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made beginning in April 2020 (6)
10.111(d)*		Form of Restricted Stock Unit Award Grant Notice and Agreement to the 2022 Incentive Stock Plan for awards made beginning in April 2023 (13)
10.112(b)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made in 2020 (6)
10.112(c)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made beginning in 2021 (6)
10.112(d)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2022 Incentive Stock Plan for awards made beginning in 2023 (13)

5147

10.111(c)*		Form of Restricted Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made beginning in April 2020 (6)
10.111(d)*		Form of Restricted Stock Unit Award Grant Notice and Agreement to the 2022 Incentive Stock Plan for awards made beginning in April 2023 (13)
10.112(b)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made in 2020 (6)
10.112(c)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2013 Incentive Stock Plan for awards made beginning in 2021 (6)
10.112(d)*		Form of Performance Stock Unit Award Grant Notice and Agreement to the 2022 Incentive Stock Plan for awards made beginning in 2023 (13)
10.114(a)		Lease Agreement, dated October 26, 2017, by and between Ryan Boone County, LLC and Smith & Wesson Corp. (14)
10.114(b)		Assignment and Assumption of Lease Agreement, dated January 31, 2023, between Smith & Wesson Sales Company and American Outdoor Brands, Inc. (15)
10.115(a)		Guaranty, dated October 26, 2017, entered into by the Registrant (14)
10.115(b)		Amended and Restated Guaranty, dated January 31, 2023 (15)
10.119*		Employment Agreement, executed April 4, 2020 and effective as of January 15, 2020, by and between Mark P. Smith and the Registrant (16)
10.119(a)*		Amended and Restated Employment Agreement, executed June 18, 2025 and effective as of June 18, 2025, by and between Mark P. Smith and the Registrant
10.121		Transition Services Agreement dated as of August 21, 2020, by and between the Registrant and American Outdoor Brands, Inc (1)
10.122		Tax Matters Agreement, dated as of August 21, 2020, by and between the Registrant and American Outdoor Brands, Inc. (1)
10.123		Employee Matters Agreement, dated as of August 21, 2020, by and between the Registrant and American Outdoor Brands, Inc. (1)
10.124(a)***		Trademark License Agreement, dated as of August 24, 2020, by and between Smith & Wesson Inc. and AOB Products Company (1)
10.124(b)***		Amended and Restated Trademark License Agreement, dated as of April 11, 2024, by and between Smith & Wesson Inc. and AOB Products Company
10.125***		Sublease, dated as of August 24, 2020, by and between the Smith & Wesson Sales Company and American Outdoor Brands, Inc. (1)
10.126(a)***		Amended and Restated Credit Agreement, dated as of August 24, 2020, by and among the Registrant, Smith & Wesson Sales Company, Smith & Wesson, Inc., the Guarantors, the Lenders, and TD Bank, N.A. (1)
10.126(b)***		First Amendment to Amended and Restated Credit Agreement, dated as of April 28, 2023, by and among the Registrant, Smith & Wesson Sales Company, Smith & Wesson, Inc., the Guarantors, the Lenders, and TD Bank, N.A. (17)
10.127		Project Agreement, dated September 30, 2021, by and among The Industrial Development Board of Blount County and the cities of Alcoa and Maryville, Tennessee, a public, nonprofit corporation organized and existing under the laws of the State of Tennessee and the Registrant (19)
10.126(c)***		Second Amended and Restated Credit Agreement, dated as of October 3, 2024, by and among the Registrant, Smith & Wesson Sales Company, Smith & Wesson, Inc., the Guarantors, the Lenders, and TD Bank, N.A. (19)
10.128*		2021 Employee Stock Purchase Plan (20)
10.127		Project Agreement, dated September 30, 2021, by and among The Industrial Development Board of Blount County and the cities of Alcoa and Maryville, Tennessee, a public, nonprofit corporation organized and existing under the laws of the State of Tennessee and the Registrant (20)
10.128*		2021 Employee Stock Purchase Plan (21)
10.129***		Standard Design-Build Agreement and General Conditions, dated February 2, 2023, between Smith & Wesson Brands, Inc and The Christman Company (portions of the exhibit have been omitted) (15)
10.130*		Form of Indemnity Agreement entered into with the following directors and executive officers: as of August 9, 2022 with Anita D. Britt, Fred M. Diaz, Kevin A. Maxwell, Deana L. McPherson, Barry M. Monheit, and Robert L. Scott; as of August 24, 2022 with Susan J. Cupero; as of August 25, 2022 with Denis G. Suggs and Mark P. Smith; and as of July 17, 2023 with Michelle J. Lohmeier (22)

5248

10.130*		Form of Indemnity Agreement entered into with the following directors and executive officers: as of August 9, 2022 with Anita D. Britt, Fred M. Diaz, Kevin A. Maxwell, Deana L. McPherson, Barry M. Monheit, and Robert L. Scott; as of August 24, 2022 with Susan J. Cupero; as of August 25, 2022 with Denis G. Suggs and Mark P. Smith; and as of July 17, 2023 with Michelle J. Lohmeier (7)
10.131		Form of Dividend Equivalent Award Agreement (23)
10.131		Form of Dividend Equivalent Award Agreement (22)
10.132*		Agreement and Release, dated April 28, 2025 (24)
19.1		Policy on Inside Information and Insider Trading
21.1		Subsidiaries of the Registrant
23.1		Consent of ~~Deloitte~~KPMG ~~& Touche~~ LLP, an Independent Registered Public Accounting Firm
23.2		Consent of Deloitte & Touche LLP, an Independent Registered Public Accounting Firm
31.1		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2		Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1		Section 1350 Certification of Principal Executive Officer
32.2		Section 1350 Certification of Principal Financial Officer
97.1		Executive Officer Clawback Policy
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Management contract or compensatory arrangement.

** An application has been submitted to the SEC for confidential treatment, pursuant to Rule 24b-2 of the Exchange Act, of portions of this exhibit. These portions have been omitted from this exhibit.

*** Certain schedules and exhibits have been omitted from this filing pursuant to Item 601(a) (5) of the Regulation S-K. We agree to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

(1)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on August 26, 2020.

(2)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on March 22, 2024.

(3)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on April 12, 2019.

(4)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on October 1, 2013.

(5)

Incorporated by reference to the Registrant’s Form 10-K filed with the SEC on June 19, 2020.

(6)

Incorporated by reference to the Registrant’s Form 10-K filed with the SEC on June 17, 2021.

(7)

Incorporated by reference to the Registrant’s Form 10-Q filed with the SEC on March 10, 2005.

(8)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on June 9, 2020.

(9)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on December 20, 2013.

(10)

Incorporated by reference to the Registrant’s Form S-8 filed with the SEC on December 20, 2013.

(11)

Incorporated by reference to Appendix A of the Registrant's Proxy Statement filed with the SEC on August 3, 2022.

(12)

Incorporated by reference to the Registrant’s Form 10-K filed with the SEC on June 22, 2015.

(13)

Incorporated by reference to the Registrant’s Form 10-K filed with the SEC on June 22, 2023.

(14)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on October 31, 2017.

(15)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on February 3, 2023.

(16)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on April 9, 2020.

(17)

Incorporated by reference to the Registrant’s Form 10-K filed with the SEC on June 20, 2024.

(18)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on May 2, 2023.

(19)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on ~~May~~October 244, ~~2021~~2024.

(20)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on September 30, 2021.

(21)

Incorporated by reference to the Registrant’s Form S-8 filed with the SEC on March 30, 2022.

(22)

Incorporated by reference to the Registrant’s Form 10-Q filed with the SEC on September 8, 2022.

(23)

Incorporated by reference to the Registrant’s Form 10-Q filed with the SEC on December 7, 2023.

(24)

Incorporated by reference to the Registrant’s Form 8-K filed with the SEC on May 2, 2025.

Item 16. Form 10-K Summary

Not applicable.

5450

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     SMITH & WESSON BRANDS, INC.

    

     /s/ Mark P. Smith

    

     Mark P. Smith
President and Chief Executive Officer

Date: June 20, ~~2024~~2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature	Capacity	Date
/s/ Mark P. Smith	President, Chief Executive Officer, and Director (Principal Executive Officer)	June 20, ~~2024~~2025
Mark P. Smith
/s/ Deana L. McPherson	Executive Vice President, Chief Financial Officer, Treasurer, and Assistant Secretary (Principal Financial and Accounting Officer)	June 20, ~~2024~~2025
Deana L. McPherson
/s/ Robert L. Scott	Chairman of the Board	June 20, ~~2024~~2025
Robert L. Scott
/s/ Anita D. Britt	Director	June 20, ~~2024~~2025
Anita D. Britt
/s/ Fred M. Diaz	Director	June 20, ~~2024~~2025
Fred M. Diaz
/s/ Michelle J. Lohmeier	Director	June 20, ~~2024~~2025
Michelle J. Lohmeier
/s/ Barry M. Monheit	Director	June 20, ~~2024~~2025
Barry M. Monheit
/s/ Denis G. Suggs	Director	June 20, ~~2024~~2025
Denis G. Suggs

5551

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

		Page
Report of Independent Registered Public Accounting Firm		F-2
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 185)		F-2
Consolidated Balance Sheets as of April 30, 2024 and 2023		F-4
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)		F-5
Consolidated Statements of Income for the years ended April 30, 2024, 2023, and 2022		F-5
Consolidated Balance Sheets as of April 30, 2025 and 2024		F-6
Consolidated Statements of Changes in Stockholders’ Equity for the years ended April 30, 2024, 2023, and 2022		F-6
Consolidated Statements of Income for the years ended April 30, 2025, 2024, and 2023		F-7
Consolidated Statements of Cash Flows for the years ended April 30, 2024, 2023, and 2022		F-7
Consolidated Statements of Changes in Stockholders’ Equity for the years ended April 30, 2025, 2024, and 2023		F-8
Notes to Consolidated Financial Statements		F-9
Consolidated Statements of Cash Flows for the years ended April 30, 2025, 2024, and 2023		F-9
Notes to Consolidated Financial Statements		F-11

F-1

~~REPORT~~Report OFof ~~INDEPENDENT~~Independent ~~REGISTERED~~Registered ~~PUBLIC~~Public ~~ACCOUNTING~~Accounting ~~FIRM~~Firm

To the ~~stockholders~~Stockholders and the Board of Directors ~~of Smith & Wesson Brands, Inc.~~

~~Opinions~~Smith on& ~~the~~Wesson ~~Financial~~Brands, ~~Statements~~Inc.: ~~and Internal Control over Financial Reporting~~

WeOpinion have audited the accompanying consolidated balance sheets of Smith & Wesson Brands, Inc. and subsidiaries (the "Company") as of April 30, 2024 and 2023, the related consolidated statements of income, changes in stockholders' equity, and cash flows, for each of the three years in the period ended April 30, 2024, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of April 30, 2024, based on ~~criteria established in Internal Control — Integrated Framework (2013) issued by~~ the ~~Committee~~Consolidated ofFinancial ~~Sponsoring Organizations of the Treadway Commission (COSO).~~Statements

InWe ~~our~~have ~~opinion,~~audited the ~~financial~~accompanying ~~statements~~consolidated ~~referred~~balance tosheet ~~above~~of ~~present~~Smith ~~fairly,~~& inWesson ~~all material respects~~Brands, ~~the~~Inc. ~~financial~~and ~~position~~subsidiaries of (the Company) as of April 30, ~~2024 and 2023~~2025, ~~and~~ the ~~results~~related consolidated statements of ~~its~~income, ~~operations~~changes ~~and~~in ~~its~~stockholders’ equity, and cash flows for ~~each of~~ the ~~three~~year ~~years~~then ~~in the period~~ ended ~~April 30~~, ~~2024,~~and inthe ~~conformity~~related ~~with~~notes ~~accounting~~(collectively, ~~principles generally accepted in~~ the ~~United~~consolidated ~~States~~financial ~~of America~~statements). ~~Also,~~In in our opinion, the ~~Company~~consolidated ~~maintained~~financial statements present fairly, in all material respects, ~~effective~~the ~~internal~~financial ~~control~~position ~~over~~of ~~financial~~the ~~reporting~~Company as of April 30, ~~2024~~2025, ~~based~~and onthe ~~criteria~~results ~~established~~of inits ~~Internal~~operations ~~Control~~and —its ~~Integrated~~cash ~~Framework~~flows ~~(2013)~~for ~~issued~~the byyear ~~COSO~~then ended, in conformity with U.S. generally accepted accounting principles.

~~Basis~~We ~~for~~also ~~Opinions~~have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of April 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated June 20, 2025 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

~~The~~Basis ~~Company’s management is responsible~~ for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Opinion

WeThese ~~conducted~~consolidated ~~our~~financial ~~audits~~statements inare ~~accordance with~~ the ~~standards~~responsibility of the ~~PCAOB~~Company’s management. ~~Those~~Our ~~standards~~responsibility ~~require~~is ~~that~~to weexpress ~~plan~~an ~~and~~opinion ~~perform~~on ~~the~~these ~~audits~~consolidated tofinancial ~~obtain~~statements ~~reasonable~~based ~~assurance~~on ~~about~~our ~~whether~~audit. We are a public accounting firm registered with the ~~financial~~PCAOB ~~statements~~and are ~~free~~required ofto ~~material~~be ~~misstatement,~~independent ~~whether~~with ~~due~~respect to ~~error~~the orCompany ~~fraud,~~in accordance with the U.S. federal securities laws and ~~whether~~the ~~effective~~applicable ~~internal~~rules ~~control~~and ~~over~~regulations ~~financial~~of ~~reporting~~the ~~was~~Securities ~~maintained~~and inExchange ~~all~~Commission ~~material~~and ~~respects~~the PCAOB.

~~Our~~We ~~audits~~conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures tothat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our ~~audits~~audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our ~~audits~~audit ~~provide~~provides a reasonable basis for our ~~opinions~~opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ KPMG LLP

We have served as the Company's auditor since 2024.

Nashville, Tennessee

June 20, 2025

F-2

~~Definition~~Report ~~and Limitations~~ of ~~Internal~~Independent ~~Control~~Registered ~~over~~Public ~~Financial~~Accounting ~~Reporting~~Firm

ATo ~~company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding~~ the ~~reliability~~Stockholders ~~of financial reporting~~ and the ~~preparation~~Board of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Directors

Smith & Wesson Brands, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Smith & Wesson Brands, Inc. and subsidiaries' (the Company) internal control over financial reporting as of April 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weakness, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of April 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of April 30, 2025, the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively, the consolidated financial statements), and our report dated June 20, 2025 expressed an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness related to the ineffective operation of a control over the accrual for certain legal expenses has been identified and included in management’s assessment. The material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made

F-3

only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Critical~~/s/ ~~Audit~~KPMG ~~Matters~~LLP

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challengingNashville, ~~subjective, or complex judgments. We determined that there are no critical audit matters.~~Tennessee

June 20, 2025

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Smith & Wesson Brands, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Smith & Wesson Brands, Inc. and subsidiaries (the "Company") as of April 30, 2024, the related consolidated statements of income, changes in stockholders' equity, and cash flows, for each of the two years in the period ended April 30, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2024, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Hartford, Connecticut

June 20, 2024 (June 20, 2025, as to the immaterial correction of an error described in Note 2 and the retrospective application of the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, as described in Notes 2 and 16)

We ~~have~~began ~~served~~serving as the Company's auditor ~~since~~in 2014. In 2024 we became the predecessor auditor.

F-35

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of:
	April 30, 2024			April 30, 2023
	April 30, 2025			April 30, 2024
	(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents	$	6025,~~839~~231		$	5360,~~556~~839
Accounts receivable, net of allowances for credit losses of $0 on April 30, 2024 and $23 on April 30, 2023		59,071			55,153
Accounts receivable, net of allowances for credit losses of $5 on April 30, 2025 and $0 on April 30, 2024		55,868			59,071
Inventories		~~160~~189,~~500~~840			~~177~~160,~~118~~500
Prepaid expenses and other current assets		46,~~973~~260			4,~~917~~973
Income tax receivable		~~2,495~~66			1,~~176~~948
Total current assets		~~287~~277,~~878~~265			~~291~~287,~~920~~331
Property, plant, and equipment, net		252,633			210,330
Property, plant, and equipment, net of accumulated depreciation and amortization of $368,811 on April 30, 2025 and $352,615 on April 30, 2024		242,648			252,633
Intangibles, net		2,~~598~~409			32,~~588~~598
Goodwill		19,024			19,024
Deferred income taxes		710,~~249~~260			87,~~085~~228
Other assets		8,~~614~~006			8,~~347~~614
Total assets	$	~~577~~559,~~996~~612		$	~~541~~577,~~294~~428
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4126,~~831~~887		$	3641,~~795~~831
Accrued expenses and deferred revenue		2624,~~811~~678			2024,~~149~~489
Accrued payroll and incentives		179,~~147~~060			1817,~~565~~147
Accrued income taxes		—			1,831
Accrued profit sharing		4,636			9,098
Accrued profit sharing		9,098			8,203
Accrued warranty		1,379			1,813
Accrued warranty		1,813			1,670
Total current liabilities		66,640			94,378
Total current liabilities		96,700			87,213
Notes and loans payable (Note 4)		79,096			39,880
Notes and loans payable (Note 4)		39,880			24,790
Finance lease payable, net of current portion		33,703			35,404
Finance lease payable, net of current portion		35,404			36,961
Other non-current liabilities		7,719			7,852
Other non-current liabilities		7,852			7,707
Total liabilities		187,158			177,514
Total liabilities		179,836			156,671
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Stockholders’ equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized, 75,395,490 issued and 45,561,569 shares outstanding on April 30, 2024 and 75,029,300 shares issued and 45,988,930 shares outstanding on April 30, 2023		75			75
Common stock, $0.001 par value, 100,000,000 shares authorized, 75,789,455 issued and 44,111,461 shares outstanding on April 30, 2025 and 75,395,490 shares issued and 45,561,569 shares outstanding on April 30, 2024		76			75
Additional paid-in capital		~~289~~298,~~994~~075			~~283~~289,~~666~~994
Retained earnings		~~540~~532,~~660~~615			~~523~~542,~~184~~414
Accumulated other comprehensive income		73—			73
Treasury stock, at cost (29,833,921 shares on April 30, 2024 and29,040,370 shares on April 30, 2023)		(432,642	)		(422,375	)
Treasury stock, at cost (31,677,994 shares on April 30, 2025 and 29,833,921 shares on April 30, 2024)		(458,312	)		(432,642	)
Total stockholders’ equity		~~398~~372,~~160~~454			~~384~~399,~~623~~914
Total liabilities and stockholders' equity	$	577,996		$	541,294
Total liabilities and stockholders’ equity	$	559,612		$	577,428

The accompanying notes are an integral part of these consolidated financial statements.

F-46

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
	(In thousands, except per share data)
Net sales	$	~~535~~474,~~833~~661		$	~~479~~535,~~242~~833		$	~~864~~479,~~126~~242
Cost of sales		~~377~~347,~~740~~478			~~324~~377,~~705~~740			~~489~~324,~~562~~705
Gross profit		~~158~~127,~~093~~183			~~154~~158,~~537~~093			~~374~~154,~~564~~537
Operating expenses:
Research and development		79,~~266~~567			7,~~550~~258			7,~~262~~550
Selling, marketing, and distribution		4041,~~564~~314			3640,~~976~~611			4337,~~156~~073
General and administrative		6554,~~484~~933			6163,~~604~~133			7261,~~493~~572
Total operating expenses		113,314			106,130			122,911
Gain on sale/disposition of assets, net		(2,515	)		(11	)		(65	)
Operating income		44,779			48,407			251,653
Total operating expenses		103,299			110,991			106,130
Other income/(expense), net:
Operating income		23,884			47,102			48,407
Other income, net		6,672			150			2,868
Other (expense)/income, net:
Interest expense, net		(2,055	)		(331	)		(2,135	)
Other (expense)/income, net		(17	)		6,672			150
Total other (expense)/income, net		4,617			(181	)		733
Interest expense, net		(4,622	)		(2,055	)		(331	)
Income from operations before income taxes		49,396			48,226			252,386
Total other (expense)/income, net		(4,639	)		4,617			(181	)
Income tax expense		9,787			11,350			57,892
Income before income taxes		19,245			51,719			48,226
Net income	$	39,609		$	36,876		$	194,494
Income tax expense		5,820			10,356			11,350
Net income	$	13,425		$	41,363		$	36,876
Net income per share:
Basic - net income	$	0.8630		$	0.8090		$	40.1280
Diluted - net income	$	0.8630		$	0.8089		$	40.0880
Weighted average number of common shares outstanding:
Basic		4544,~~813~~484			45,~~844~~813			4745,~~227~~844
Diluted		4644,~~248~~932			46,~~170~~248			4746,~~728~~170

The accompanying notes are an integral part of these consolidated financial statements.

F-57

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

											Accumulated
	Common				Additional						Other								Total
	Stock				Paid-In			Retained			Comprehensive			Treasury Stock					Stockholders’
(In thousands)	Shares		Amount		Capital			Earnings			Income			Shares		Amount			Equity
(In thousands, except per share data)	Shares		Amount		Capital			Earnings			Income			Shares		Amount			Equity
Balance at April 30, 2021		74,222	$	74	$	273,431		$	325,181		$	73			24,285	$	(332,375	)	$	266,384
Stock-based compensation		—		—		4,536			—			—			—		—			4,536
Shares issued under employee stock purchase plan		129		—		1,719			—			—			—		—			1,719
Issuance of common stock under restricted stock unit awards, net of shares surrendered		290		1		(1,585	)		—			—			—		—			(1,584	)
Repurchase of treasury stock		—		—		—			—			—			4,755		(90,000	)		(90,000	)
Dividends issued ($0.32 per common share)		—		—		—			(15,035	)		—			—		—			(15,035	)
Net income		—		—	—				194,494			—			—		—			194,494
Balance at April 30, 2022		74,641	$	75	$	278,101		$	504,640		$	73			29,040	$	(422,375	)	$	360,514
Stock-based compensation		—		—		5,102			—			—			—		—			5,102
Shares issued under employee stock purchase plan		175		—		1,528			—			—			—		—			1,528
Issuance of common stock under restricted stock unit awards, net of shares surrendered		213		—		(1,065	)		—			—			—		—			(1,065	)
Dividends issued ($0.40 per common share)		—		—		—			(18,333	)		—			—		—			(18,333	)
Net income		—		—	—				36,876			—			—		—			36,876
Balance at April 30, 2023		75,029	$	75	$	283,666		$	523,184		$	73			29,040	$	(422,375	)	$	384,623
Stock-based compensation		—		—		5,683			—			—			—		—			5,683
Shares issued under employee stock purchase plan		151		—		1,484			—			—			—		—			1,484
Issuance of common stock under restricted stock unit awards, net of shares surrendered		215		—		(839	)		—			—			—		—			(839	)
Repurchase of treasury stock		—		—		—			—			—			794		(10,267	)		(10,267	)
Repurchase of treasury stock, including excise tax		—		—		—			—			—			794		(10,267	)		(10,267	)
Unpaid dividend accrued		—		—		—			(113	)		—			—		—			(113	)
Dividends issued ($0.48 per common share)		—		—		—			(22,020	)		—			—		—			(22,020	)
Net income		—		—	—				3941,~~609~~363			—			—		—			3941,~~609~~363
Balance at April 30, 2024		75,395	$	75	$	289,994		$	~~540~~542,~~660~~414		$	73			29,834	$	(432,642	)	$	~~398~~399,~~160~~914
Stock-based compensation		—		—		7,609			—			—			—		—			7,609
Shares issued under employee stock purchase plan		175		—		1,598			—			—			—		—			1,598
Issuance of common stock under restricted stock unit awards, net of shares surrendered		219		1		(1,126	)		—			—			—		—			(1,125	)
Repurchase of treasury stock, including excise tax		—		—		—			—			—			1,844		(25,670	)		(25,670	)
Unpaid dividend accrued									(128	)										(128	)
Dividends issued ($0.52 per common share)		—		—		—			(23,096	)		—			—		—			(23,096	)
Net income		—		—	—				13,425			—			—		—			13,425
Other												(73	)							(73	)
Balance at April 30, 2025		75,789	$	76	$	298,075		$	532,615		$	—			31,678	$	(458,312	)	$	372,454

The accompanying notes are an integral part of these consolidated financial statements.

F-68

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
	(In thousands)
Cash flows from operating activities:
Net income	$	3913,~~609~~425		$	3641,~~876~~363		$	~~194~~36,~~494~~876
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash (used in)/provided by operating activities:
Depreciation and amortization		3231,~~558~~845			3132,~~436~~558			3031,~~073~~436
(Gain)/loss on sale/disposition of assets		(5,595	)		(55	)		625
Gain on sale/disposition of assets		(2,515	)		(5,595	)		(55	)
Provision for (recoveries)/losses on notes and accounts receivable		(23	)		(27	)		689
Recoveries on notes and accounts receivable		—			(23	)		(27	)
Impairment of long-lived tangible assets		—			—			86
Deferred income taxes		(3,032	)		857			(6,864	)
Deferred income taxes		835			(6,864	)		(2,125	)
Stock-based compensation expense		7,609			5,683			5,102
Stock-based compensation expense		5,683			5,102			4,536
Non-cash sublease income		(1,724	)		—			—
Other, net		(73	)		—			—
Changes in operating assets and liabilities:
Accounts receivable		(3,~~896~~203	)		7(3,~~569~~896	)		47,~~058~~569
Inventories		16(29,~~618~~340	)		~~(40~~16,~~458~~618	)		(5840,~~183~~458	)
Prepaid expenses and other current assets		(571,287	)		~~653~~(57	)		~~2,839~~653
Income taxes		(31,~~149~~882	)		(742,602	)		~~480~~(74	)
Accounts payable		18(14,~~341~~771	)		(818,~~606~~341	)		(268,~~957~~606	)
Accrued payroll and incentives		(18,~~418~~087	)		(1,~~194~~418	)		~~(10~~1,194	)
Accrued profit sharing		~~895~~(4,462	)		~~(5,340~~895	)		(~~902~~5,340	)
Accrued expenses and deferred revenue		~~6,318~~(268	)		(3,~~618~~995	)		(93,~~725~~618	)
Accrued warranty		~~142~~(434	)		~~(168~~142	)		(~~361~~168	)
Other assets		~~(267~~938	)		~~1,789~~(267	)		21,~~561~~789
Other non-current liabilities		~~145~~(132	)		~~(2,677~~145	)		(42,~~364~~677	)
Net cash provided by operating activities		106,739			16,732			137,814
Net cash (used in)/provided by operating activities		(7,223	)		106,739			16,732
Cash flows from investing activities:
Payments to acquire patents and software		(~~186~~187	)		(~~334~~186	)		(~~283~~334	)
Proceeds from sale of property and equipment		2,~~955~~619			~~118~~2,955			~~139~~118
Proceeds from sale of intangible assets		~~6,500~~—			—6,500			—
Payments to acquire property and equipment		(9021,~~759~~605	)		(8990,~~565~~759	)		(2389,~~972~~565	)
Net cash used in investing activities		(8119,~~490~~173	)		(8981,~~781~~490	)		(2489,~~116~~781	)
Cash flows from financing activities:
Proceeds from loans and notes payable		5075,000			2550,000			—25,000
Payments on finance lease obligation		(1,378	)		(1,253	)		(1,087	)
Cash paid for debt issuance costs		(941	)		—			—
Payments on notes and loans payable		(35,000	)		—			—
Payments on finance lease obligation		(179	)		(1,378	)		(1,253	)
Payments to acquire treasury stock		(10,213	)		—			(90,000	)
Payments on notes and loans payable		(35,000	)		(35,000	)		—
Dividend distribution		(22,020	)		(18,333	)		(15,035	)
Payments to acquire treasury stock		(25,468	)		(10,213	)		—
Proceeds to acquire common stock from employee stock purchase plan		1,484			1,528			1,719
Dividend distribution		(23,096	)		(22,020	)		(18,333	)
Payment of employee withholding tax related to restricted stock units		(839	)		(1,065	)		(1,584	)
Proceeds to acquire common stock from employee stock purchase plan		1,598			1,484			1,528
Net cash (used in)/ provided by financing activities		(17,966	)		5,877			(105,987	)
Payment of employee withholding tax related to restricted stock units		(1,126	)		(839	)		(1,065	)
Net increase/(decrease) in cash and cash equivalents		7,283			(67,172	)		7,711
Net cash (used in)/provided by financing activities		(9,212	)		(17,966	)		5,877
Cash and cash equivalents, beginning of period		53,556			120,728			113,017
Net (decrease)/increase in cash and cash equivalents		(35,608	)		7,283			(67,172	)
Cash and cash equivalents, end of period	$	60,839		$	53,556		$	120,728
Cash and cash equivalents, beginning of period		60,839			53,556			120,728
Cash and cash equivalents, end of period	$	25,231		$	60,839		$	53,556
Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	4,745		$	2,148		$	2,219
Interest, net of amounts capitalized	$	5,193		$	4,745		$	2,148
Income taxes	$	127,~~662~~288		$	1812,~~208~~662		$	5918,~~183~~208

The accompanying notes are an integral part of these consolidated financial statements.

F-79

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

Supplemental Disclosure of Non-cash Investing and Financing Activities:

	For the Year Ended April 30,
	2024		2023		2022
	2025		2024		2023
	(In thousands)
Purchases of property and equipment included in accounts payable	$	2,~~462~~289	$	152,~~767~~462	$	~~408~~15,767
Capital lease included in accrued expenses and finance lease payable		~~612~~442		~~767~~612		—767

The accompanying notes are an integral part of these consolidated financial statements.

F-810

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization

We are one of the world’s leading manufacturers and designers of firearms. We manufacture a wide array of handguns (including revolvers and pistols), long guns (including modern sporting rifles, pistol caliber carbines, and lever -action rifles), handcuffs, firearm suppressors, and other firearm-related products for sale to a wide variety of customers, including firearm enthusiasts, collectors, hunters, sportsmen, competitive shooters, individuals desiring home and personal protection, law enforcement and security agencies and officers, and military agencies in the United States and throughout the world. We sell our products under the Smith & Wesson and Gemtech brands. We manufacture our products at our facilities in ~~Springfield~~Maryville, ~~Massachusetts~~Tennessee; ~~Houlton~~Springfield, ~~Maine~~Massachusetts; ~~Deep River, Connecticut;~~ and ~~Maryville~~Houlton, ~~Tennessee~~Maine. We also sell our manufacturing services to other businesses to attempt to level-load our factories. We sell those services under our Smith & Wesson and Smith & Wesson Precision Components brands. On September 30, 2021, we announced our plan to move our headquarters and significant elements of our operations to Maryville, Tennessee in 2023, or the Relocation. During fiscal 2024, we began manufacturing and distribution activities from ~~our~~the new Maryville, Tennessee facility. During fiscal 2025, we ceased operations at our Deep River facility and vacated the premises. See Note 1514 — Commitments and Contingencies, and Note 1615 — Restructuring for more information.

2. Significant Accounting Policies

Immaterial Correction of an Error — During the fourth quarter of fiscal 2025, we identified an immaterial error related to our accrual for certain legal expenses, resulting in an overstatement of general and administrative expenses in the interim and annual periods for the year ended April 30, 2024 and during the interim periods for the year ended April 30, 2025. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the quantitative and qualitative considerations of the error and determined that the related impact was not material to results of operations, financial position, or cash flows for any historical annual or interim period. Prior year amounts have been adjusted to correct the immaterial error, which overstated accrued expenses and deferred revenue and general and administrative expenses by $2.3 million and understated income tax expense by $569,000 and overstated the related amounts of income tax receivable by $548,000 and deferred income taxes by $21,000 as of April 30, 2024 and for the year then ended. Related changes to net income, corresponding line items within cash provided by operating activities, and related disclosures within the notes accompanying these financial statements, reflect the immaterial correction.

Use of Estimates — The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the financial statement dates and the reported amounts of revenue and expenses during the reporting periods. Our significant estimates include the accrual for warranty, reserves for excess and obsolete inventory, rebates and other promotions, valuation of intangible assets, and costs associated with the Relocation. Actual results could differ from those estimates.

Principles of Consolidation — The accompanying consolidated financial statements include the accounts of Smith & Wesson Brands, Inc. and its wholly owned subsidiaries, including Smith & Wesson Inc., Smith & Wesson Sales Company, and SWPC Plastics, LLC. In our opinion, all adjustments, which include only normal recurring adjustments necessary to fairly present the financial position, results of operations, changes in stockholders’ equity, and cash flows at April 30, ~~2024~~2025 and ~~2023~~2024 and for the periods presented, have been included. All intercompany accounts and transactions have been eliminated in consolidation.

Reclassifications — We have reclassified certain amounts relating to prior period results to conform to current period presentation. These reclassifications have not changed the results of operations of prior periods.

Fair Value of Financial Instruments — Unless otherwise indicated, the fair values of all reported assets and liabilities, which represent financial instruments not held for trading purposes, approximate the carrying values of such amounts because of their short-term nature or market rates of interest.

Cash and Cash Equivalents — We consider all highly liquid investments purchased with original maturities of three months or less at the date of acquisition to be cash equivalents. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. As of April 30, 2024, all of our accounts exceeded federally insured limits.F-11

Financial Instruments — We account for derivative instruments under Accounting Standards Codification (“ASC”) 815-10, Fair Value Measurements and Disclosure Topic, which establishes accounting and reporting standards for derivative instruments and hedging activities and requires us to recognize these instruments as either assets or liabilities on the balance sheet and measure them at fair value. As of April 30, 2024 and 2023, we did not have any derivative instruments or any Level 2 or Level 3 financial instruments within the hierarchy. See Note 4 – Notes, Loans Payable, and Financing Arrangements for more information regarding our financial instruments.

Trade Receivables — We extend credit to our domestic customers and some foreign distributors based on their financial condition. We sometimes offer discounts for early payment on invoices. When we believe the extension of credit is not advisable, we rely on either a prepayment or a letter of credit. We write off balances deemed uncollectible by us against our allowance for doubtful accounts. We estimate our allowance for doubtful accounts through current past due balances, knowledge of our customers’ financial situations, and past payment history.

F-9

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents — We consider all highly liquid investments purchased with original maturities of three months or less at the date of acquisition to be cash equivalents. We maintain our cash in bank deposit accounts that, at times, may exceed federally insured limits. We have not experienced any losses in such accounts. As of April 30, 2025, all of our accounts exceeded federally insured limits.

Trade Receivables — We extend credit to our domestic customers and some foreign distributors based on their financial condition. We sometimes offer discounts for early payment on invoices. When we believe the extension of credit is not advisable, we rely on either a prepayment or a letter of credit. We write off balances deemed uncollectible by us against our allowance for credit losses. We estimate our allowance for credit losses through current past due balances, knowledge of our customers’ financial situations, and past payment history.

Concentrations of Credit Risk — Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, and trade receivables. We place our cash and cash equivalents in overnight U.S. government securities. Concentrations of credit risk with respect to trade receivables are limited by the large number of customers comprising our customer base and their geographic and business dispersion. We perform ongoing credit evaluations of our customers’ financial condition and generally do not require collateral.

For fiscal ~~2024~~2025, sales to ~~three~~one of our customers ~~exceeded~~represented 1014.06% of our total net sales, ~~totaling~~and ~~34.8%.~~as As of April 30, ~~2024~~2025, ~~two~~this customer accounted for 36.1% of our ~~customers~~total ~~each~~accounts receivable. No other customer represented more than 10% of our fiscal 2025 net sales or accounted for more than 10% of our accounts receivable, ~~for~~as aof ~~total~~April of30, 472025.~~9%.~~ For fiscal ~~2023~~2024, sales to ~~two~~three of our customers exceeded 10.0% of our net sales, totaling 2234.8%. As of April 30, ~~2023~~2024, ~~three~~two of our customers each accounted for more than 10% of our accounts receivable, for a total of 3947.49%.

Inventories — We value inventories at the lower of cost, using the first-in, first-out, or FIFO, method or net realizable value. An allowance for potential non-saleable inventory due to excess stock or obsolescence is based upon a detailed review of inventory, past history, and expected future usage.

Property, Plant, and Equipment — We record property, plant, and equipment, consisting of land, building, improvements, machinery, equipment, software, hardware, furniture, and fixtures, at cost and depreciate them using the straight-line method over their estimated useful lives. We charge expenditures for maintenance and repairs to earnings as incurred, and we capitalize additions, renewals, and betterments. Upon the retirement or other disposition of property and equipment, we remove the related cost and accumulated depreciation from the respective accounts and include any gain or loss in operations. We lease certain of our real estate, machinery, and photocopiers under non-cancelable operating and finance lease agreements, and we recognize expenses under our operating lease assets and liabilities at the commencement date based on the present value of lease payments over the lease term. The depreciable life of assets and leasehold improvements are based on the expected life of the lease. A summary of the estimated useful lives is as follows:

Description	Useful Life
Building and improvements		10 to 40 years
Software and hardware		2 to 7 years
Machinery and equipment		2 to 10 years
Office equipment and furniture		5 years

We include tooling, dies, and fixtures as part of machinery and equipment and depreciate them over a period generally not exceeding ten years.

Intangible Assets — We record intangible assets at cost or based on the fair value of the assets acquired. Intangible assets consist of developed technology, customer relationships, trademarks, trade names, and patents. We amortize intangible assets over their estimated useful lives or in proportion to expected yearly revenue generated from the intangibles that were acquired.

Revenue Recognition — We recognize revenue in accordance with the provisions of Accounting Standards ~~Update~~Codification, or ~~ASU~~ASC, 606, Revenue from Contracts with Customers ~~(Topic 606), which became effective for us on May 1, 2018~~. Generally, all performance obligations are satisfied and revenue is recognized when the risks and rewards of ownership have transferred to the customer, which is generally upon shipment but could be delayed until the receipt of customer acceptance.

In some instances, sales include multiple performance obligations. The most common of these instances relates to sales promotion programs under which customers are entitled to receive free goods based upon their purchase of our products, which we have identified as a material right. The fulfillment of these free goods is our responsibility. In such instances, we allocate the revenue of the promotional sales based on the estimated level of participation in the sales promotional program and the timing of the shipment of all of the products included in the promotional program, including the free goods. We recognize revenue related to the material right proportionally as each performance obligation is satisfied. The net change in contract liabilities for a given period is reported as an increase or decrease to sales. F-12

F-10

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Wesatisfied ~~generally sell our products free on board, or FOB, shipping point~~ and ~~provide~~revenue ~~payment~~is ~~terms~~recognized towhen ~~most commercial customers ranging from 20 to 60 days of product shipment with a discount available to some customers for early payment. Generally, framework contracts define~~ the ~~general~~risks ~~terms of sales, including payment terms, freight terms, insurance requirements,~~ and ~~cancelation~~rewards ~~provisions. Purchase orders define the terms for specific sales, including description, quantity, and price~~ of ~~each~~ownership ~~product~~have ~~purchased.~~transferred ~~We estimate variable consideration relative~~ to the ~~amount~~customer, ~~of cash discounts to~~ which ~~customers~~is ~~are~~generally ~~likely to be entitled. As a result of utilizing practical expedients~~ upon ~~the~~shipment ~~adoption~~but ofcould ~~ASC 606, we do not consider these extended terms to~~ be adelayed ~~significant~~until ~~financing component of~~ the ~~contract~~receipt ~~because the payment terms are less than one year. In all cases, we consider our costs related to shipping and handling to be a cost~~ of ~~fulfilling the contract with the~~ customer acceptance.

We generally sell our products free on board, or FOB, shipping point and provide payment terms to most commercial customers ranging from 20 to 60 days of product shipment with a discount available to some customers for early payment. Generally, framework contracts define the general terms of sales, including payment terms, freight terms, insurance requirements, and cancelation provisions. Purchase orders define the terms for specific sales, including description, quantity, and price of each product purchased. We estimate variable consideration relative to the amount of cash discounts to which customers are likely to be entitled. As a result of utilizing practical expedients in accordance with ASC 606, we do not consider these extended terms to be a significant financing component of the contract because the payment terms are less than one year. In all cases, we consider our costs related to shipping and handling to be a cost of fulfilling the contract with the customer.

Research and Development — We engage in both internal and external research and development, or R&D, in order to remain competitive and to exploit possible untapped market opportunities. We approve prospective R&D projects after analysis of the cost and benefits associated with the potential product. Costs in R&D expense include, among other items, salaries, materials, utilities, and administrative costs.

Earnings per Share — We calculate basic and diluted earnings per common share in accordance with the provisions of ASC 260-10, Earnings Per Share. Basic earnings per common share equals net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per common share equals net income divided by the weighted average number of common shares outstanding during the period, including the effect of outstanding stock options and other stock-based instruments if their effect is dilutive.

The following table provides a reconciliation of the net income amounts and weighted average number of common and common equivalent shares used to determine basic and diluted earnings per common share (in thousands, except per share data):

	For the Year Ended April 30,
	2024		2023		2022
	2025		2024		2023
Net income	$	3913,~~609~~425	$	3641,~~876~~363	$	~~194~~36,~~494~~876
Weighted average shares outstanding — Basic		4544,~~813~~484		45,~~844~~813		4745,~~227~~844
Effect of dilutive stock awards		~~436~~448		~~326~~436		~~501~~326
Weighted average shares outstanding — Diluted		4644,~~248~~932		46,~~170~~248		4746,~~728~~170
Earnings per share — Basic	$	0.8630	$	0.8090	$	40.1280
Earnings per share — Diluted	$	0.8630	$	0.8089	$	40.0880

For fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, the number of shares excluded from the computation of diluted earnings per share was 1829,~~009~~935, 3018,~~307~~009, and 4330,~~530~~307, respectively, because the effect would be antidilutive.

Valuation of Long-lived Tangible and Intangible Assets — We evaluate the recoverability of long-lived assets, or asset groups, whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. When such evaluations indicate that the related future undiscounted cash flows are not sufficient to recover the carrying values of the assets, such carrying values are reduced to fair value and this adjusted carrying value becomes the asset’s new cost basis. We determine fair value primarily using future anticipated cash flows that are directly ~~associated with and are expected to arise as a direct result of the use and eventual disposition of the asset, or asset group, discounted using an interest rate commensurate with the risk involved.~~

~~We have significant long~~F-lived tangible and intangible assets, which are susceptible to valuation adjustments as a result of changes in various factors or conditions. The most significant long-lived tangible and intangible assets, other than goodwill, are property, plant, and equipment, right of use assets, developed technology, customer relationships, patents, trademarks, and trade names. We amortize all finite-lived intangible assets either on a straight-line basis or based upon patterns in which we expect to utilize the economic benefits of such assets. We initially determine the values of intangible assets by a risk-adjusted, discounted cash flow approach. We assess the potential impairment of identifiable intangible assets and fixed assets whenever events or changes in circumstances indicate 13

F-11

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~that~~associated ~~the~~with ~~carrying~~and ~~values~~are ~~may~~expected ~~not~~to bearise ~~recoverable~~as ~~and~~a atdirect ~~least~~result ~~annually.~~of ~~Factors~~the weuse ~~consider~~and ~~important~~eventual disposition of the asset, ~~which~~or ~~could~~asset ~~trigger~~group, andiscounted ~~impairment~~using ofan ~~such~~interest ~~assets,~~rate ~~include~~commensurate with the ~~following:~~risk involved.

We have significant long-lived tangible and intangible assets, which are susceptible to valuation adjustments as a result of changes in various factors or conditions. The most significant long-lived tangible and intangible assets, other than goodwill, are property, plant, and equipment, right of use assets, developed technology, customer relationships, patents, trademarks, and trade names. We amortize all finite-lived intangible assets either on a straight-line basis or based upon patterns in which we expect to utilize the economic benefits of such assets. We initially determine the values of intangible assets by a risk-adjusted, discounted cash flow approach. We assess the potential impairment of identifiable intangible assets and fixed assets whenever events or changes in circumstances indicate that the carrying values may not be recoverable and at least annually. Factors we consider important, which could trigger an impairment of such assets, include the following:

•

significant underperformance relative to historical or projected future operating results;

•

significant changes in the manner or use of the assets or the strategy for our overall business;

•

significant negative industry or economic trends;

•

a significant decline in our stock price for a sustained period; and

•

a decline in our market capitalization below net book value.

Future adverse changes in these or other unforeseeable factors could result in an impairment charge that could materially impact future results of operations and financial position in the reporting period identified.

In accordance with ASC 350, Intangibles-Goodwill and Other, we ~~test~~evaluate goodwill for potential impairment on an annual basis, onas of February 1, and ~~between~~whenever ~~annual~~events ~~tests~~or ifchanges ~~indicators~~in circumstances indicate that the fair value of ~~potential~~a ~~impairment~~reporting ~~exist~~unit may be below its carrying value. ~~The~~Under ~~impairment~~the ~~test~~guidance, ~~compares~~we may assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If this assessment indicates it is more likely than not that the ~~operating~~fair ~~units~~value toof ~~their~~a reporting unit is less than its carrying ~~amounts~~amount, toa ~~assess~~quantitative ~~whether~~test for goodwill impairment iswould ~~present~~be performed. WeIf ~~have~~the ~~reviewed~~fair value of our single reporting unit exceeds the ~~provisions~~carrying value of ~~ASC~~our ~~350-20~~net assets, ~~with~~including ~~respect~~goodwill, togoodwill is not impaired. If the ~~criteria~~carrying ~~necessary~~value toof ~~evaluate~~our net assets, including goodwill, exceeds the ~~number~~fair value of the reporting ~~units~~unit, ~~that~~then ~~exist~~we would determine the implied fair value of the reporting unit’s goodwill. ~~Based~~If onthe ~~this~~carrying ~~review~~value of our goodwill exceeds its implied fair value, then we ~~concluded~~would ~~that~~record wean ~~have~~impairment ~~one~~loss ~~operating~~equal ~~unit~~to ~~when~~the ~~reviewing~~difference. ~~ASC~~We ~~350-20~~did not record any goodwill impairments during the fiscal years ended April 30, 2025 or 2024.

WeThe ~~review~~re-measurement ~~the fair value~~ of ~~our~~ goodwill ~~based~~is onclassified ~~financial~~as ~~performance~~a ~~annually.~~Level As3 ~~of our last valuation date, February 1, 2024, we had $19.0 million of goodwill and its~~ fair value ~~significantly~~assessment ~~exceeded~~as ~~its~~described ~~carrying~~in ~~value,~~Note ~~based~~9 on- ~~EBITDAS,~~Fair ~~cashflow~~Value Measurement, ~~and~~due ~~market capitalization. Our assumptions related~~ to the ~~development~~significance of ~~fair~~unobservable ~~value~~inputs ~~could~~developed ~~deviate~~using ~~materially from actual results and forecasts used to support asset carrying values may change in the future, which could result in non~~company-~~cash~~specific ~~charges that would adversely affect our financial results of operations~~information.

The re-measurement of goodwill is classified as a Level 3 fair value assessment as described in Note 10 - Fair Value Measurement, due to the significance of unobservable inputs developed using company-specific information.

Income Taxes – We use the asset and liability approach for financial accounting and reporting income taxes. The provision for income taxes is based upon income reported in the accompanying consolidated financial statements as required by ASC 740, Income Taxes. We determine our deferred tax assets and liabilities based on temporary differences between financial reporting and tax bases in assets and liabilities, which are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We recognize the effect on deferred taxes of a change in tax rates in the period that includes the enactment date. In assessing the realization of our deferred tax assets, we consider whether it is more likely than not that the deferred tax assets will be realized. The ultimate realization of our deferred tax assets depends upon generating future taxable income during the periods in which our temporary differences become deductible and before our net operating loss carryforwards expire. We evaluate the recoverability of our deferred tax assets by assessing the need for a valuation allowance on a quarterly basis. If we determine that it is more likely than not that our deferred tax assets will not be recovered, we establish a valuation allowance against some or all of our deferred tax assets. Recording or reversing a valuation allowance could have a significant effect on our future results of operations and financial position.

~~Warranty — We generally provide a limited one~~F-year warranty and a lifetime service policy to the original purchaser of our new firearm products. We will also repair or replace certain products or parts found to be defective under normal use and service with an item of equivalent value, at our option, without charge during the warranty period. We quantify and record an estimate for warranty-related costs based on our actual historical claims experience and current repair costs. We adjust accruals as warranty claims data and historical experience warrant. Should we experience actual claims and repair costs that are higher than the estimated claims and repair costs used to calculate the provision, our operating results for the period or periods in which such returns or additional costs materialize would be adversely impacted.14

From time to time, we have experienced certain manufacturing and design issues with respect to some of our firearms and have initiated some product recalls and safety alerts. In February 2024, we initiated a safety recall for Response rifles manufactured prior to February 12, 2024 as a result of field reports related to the potential for an out of battery discharge. This safety recall was limited to Response rifles manufactured prior to February 12, 2024 and was conducted to ensure there were no anomalies or conditions that might adversely affect the safety, function, or

F-12

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~performance~~Warranty of— ~~these~~We ~~rifles.~~generally ~~The~~provide ~~remaining~~a ~~estimated~~limited ~~cost~~one-year warranty and a lifetime service policy to the original purchaser of ~~all~~our ~~recalls,~~new ~~safety~~firearm ~~alerts,~~products. ~~and~~We ~~consumer~~will ~~advisories~~also isrepair ~~$38,000,~~or ~~which~~replace iscertain ~~recorded~~products inor ~~accrued~~parts ~~warranty~~found onto ~~our~~be ~~consolidated~~defective ~~balance~~under ~~sheet~~normal asuse and service with an item of ~~April~~equivalent 30value, ~~2024~~at our option, without charge during the warranty period. ~~The~~In ~~remaining~~addition, ~~balance~~we ~~relates~~sometimes toexperience acertain ~~general~~manufacturing ~~accrual~~and ~~related~~design toissues ~~standard~~with ~~warranty~~respect ~~costs~~to ~~for~~our ~~products~~firearms ~~shipped~~and ininitiate ~~the~~product ~~ordinary~~recalls ~~course~~and ofsafety ~~business~~alerts.

We quantify and record an estimate for warranty-related costs based on our actual historical claims experience and current repair costs. We adjust accruals as warranty claims data and historical experience warrant. Should we experience actual claims and repair costs that are higher than the estimated claims and repair costs used to calculate the provision, our operating results for the period or periods in which such returns or additional costs materialize would be adversely impacted. Warranty expense for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 amounted to $2.64 million, $12.56 million, and $1.95 million, respectively.

The following table sets forth the change in accrued warranties, a portion of which is recorded as a non-current liability, in the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (in thousands):

Balance as of April 30, 2022	$	4,873
Balance as of April 30, 2023	$	4,005
Warranties issued and adjustments to provisions		1,496
Warranty claims		(2,364	)
Balance as of April 30, 2023		4,005
Warranties issued and adjustments to provisions		2,560
Warranty claims		(2,681	)
Balance as of April 30, 2024	$	3,884
Warranties issued and adjustments to provisions		2,390
Warranty claims		(2,998	)
Balance as of April 30, 2025	$	3,276

~~Sales~~Advertising ~~and~~Costs ~~Promotional Related Expenses~~ — We ~~present~~expense ~~product~~advertising ~~sales~~costs, inprimarily ~~our~~consisting ~~consolidated~~of ~~financial~~magazine ~~statements~~advertisements, ~~net~~printed ofmaterials, ~~customer~~television ~~promotional~~advertisements, ~~program~~digital ~~costs~~advertisements, ~~that~~radio ~~depend~~advertisements, ~~upon~~and ~~the~~billboards, ~~volume~~either ofas ~~sales.~~incurred ~~For~~or ~~promotional~~upon ~~program~~the ~~costs~~first ~~that~~occurrence doof ~~not depend on~~ the ~~volume~~advertising. ofAdvertising ~~sales~~expense, weincluded ~~record promotional costs~~ in ~~cost of goods sold. The total of all our promotional programs amounted to $6.6 million~~selling, ~~$10.2 million~~marketing, and ~~$6.6~~distribution ~~million~~expenses, for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, ~~respectively.~~amounted ~~We have a co-op advertising program at the retail level. We expensed sales and promotional related costs amounting~~ to $215.62 million, $214.7 million, and $414.37 million ~~for fiscal 2024~~, ~~2023, and 2022,~~ respectively~~, as selling and marketing expenses~~.

Shipping and Handling — In the accompanying consolidated financial statements, we included amounts billed to customers for shipping and handling in net sales. Inbound freight charges and internal transfer costs are included in cost of goods sold; however, costs incurred to distribute products to customers is included in selling, marketing, and distribution expenses.

Insurance Reserves — In January 2020, we formed a wholly owned captive insurance company, which provides product liability insurance to us and our subsidiaries. We are self-insured through retentions or deductibles for the majority of our workers’ compensation, automobile, general liability, product liability, and group health insurance programs. Self-insurance amounts vary up to $10.0 million per occurrence; however, we believe the likelihood of reaching the maximum per occurrence limit is remote. We record our liability for estimated premiums and incurred losses in the accompanying consolidated financial statements on an undiscounted basis.

Recently Issued Accounting Standards — ~~There~~The ~~are~~Financial noAccounting ~~new~~Standards ~~accounting~~Board, ~~pronouncements~~or ~~that~~FASB, issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosure requirements included in ASU 2023-07 are ~~expected~~required for all public entities, including entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The guidance is required to ~~have~~be applied on a ~~significant~~retrospective basis. We adopted ASU 2023-07 in the fourth quarter of fiscal 2025. The adoption of this guidance resulted in additional financial statement disclosures and had no impact onto our consolidated financial ~~statements~~condition, results of operations, or cash flows. See Note 16 - Segment Reporting which includes the disclosures resulting from our adoption of this guidance.

FIn December 2023, the FASB, issued ASU 2023-1309, Improvements to Income Tax Disclosures, which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign

F-15

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

income taxes and provide more details about the reconciling items in some categories if items meet a quantitative threshold. Entities will have to provide qualitative disclosures about the new categories. The guidance will require all entities to disclose income taxes paid, net of refunds, disaggregated by federal (national), state, and foreign taxes for annual periods, and to disaggregate the information by jurisdiction based on a quantitative threshold. The guidance makes several other changes to the disclosure requirements. Entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for annual periods beginning after December 15, 2024, or the fiscal year ending April 30, 2026 for us. We are currently evaluating the impact, if any, that the adoption of this standard will have on financial disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires entities to disclose, in the notes to financial statements, specified information about certain costs and expenses included in each relevant expense caption presented on the face of the income statement. Entities will also be required to disclose qualitative descriptions of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. Entities will need to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. Entities are required to apply the guidance prospectively, with the option to apply it retrospectively. The guidance is effective for annual periods beginning after December 15, 2026, or

F-16

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the fiscal year ending April 30, 2028 for us. We are currently evaluating the impact that the adoption of this standard will have on financial disclosures.

3. Leases

We lease certain of our real estate, machinery, equipment, and photocopiers under non-cancelable operating and finance lease agreements.

We recognize expenses for our operating lease assets and liabilities at the commencement date based on the present value of lease payments over the lease term. Our leases do not provide an implicit interest rate. We use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Our lease agreements do not require material variable lease payments or residual value guarantees, nor do they include restrictive covenants. For operating leases, we recognize expense on a straight-line basis over the lease term. Tenant improvement allowances are recorded as an offsetting adjustment included in our calculation of the respective right-of-use asset.

Many of our leases include renewal options that enable us to extend the lease term. The execution of those renewal options is at our sole discretion and renewals are reflected in the lease term when they are reasonably certain to be exercised. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

The amounts of assets and liabilities related to our operating and financing leases as of April 30, 2025 and 2024 were as follows (in thousands):

	Balance Sheet Caption	~~Balance Sheet Caption~~	April 30, 2025	~~April 30, 2024~~			April 30, 2024	~~April 30, 2023~~
Operating Leases
Right-of-use assets			$	$1,623	~~6,761~~		$	$6,761	~~5,994~~
Accumulated amortization				(1,211	~~(5,411~~)	)		(5,411	~~(4,153~~)	)
Right-of-use assets, net	Other assets	~~Other assets~~	$	$412	~~1,350~~		$	$1,350	~~1,841~~
Current liabilities	Accrued expenses and deferred revenue	~~Accrued expenses and deferred revenue~~	$	$233	~~947~~		$	$947	~~1,274~~
Non-current liabilities	Other non-current liabilities	~~Other non-current liabilities~~		318	~~574~~			574	~~801~~
Total operating lease liabilities			$	$551	~~1,521~~		$	$1,521	~~2,075~~
Finance Leases
Right-of-use assets			$	$41,631	~~41,631~~		$	$41,631	~~41,631~~
Accumulated depreciation				(12,973	~~(11,713~~)	)		(11,713	~~(9,448~~)	)
Right-of-use assets, net	Property, plant, and equipment, net	~~Property, plant, and equipment, net~~	$	$28,658	~~29,918~~		$	$29,918	~~32,183~~
Current liabilities	Accrued expenses and deferred revenue	~~Accrued expenses and deferred revenue~~	$	$1,701	~~1,564~~		$	$1,564	~~1,434~~
Non-current liabilities	Finance lease payable, net of current portion	~~Finance lease payable, net of current portion~~		33,703	~~35,404~~			35,404	~~36,961~~
Total finance lease liabilities			$	$35,404	~~36,968~~		$	$36,968	~~38,395~~

During fiscal ~~2024~~2025, we recorded $1.50 million of operating lease costs~~, of which $98,000 related to short-term leases that were not recorded as right-of-use assets~~. We recorded $2.3 million of finance lease amortization and $1.98 million of financing lease interest expense during fiscal ~~2024~~2025. As of April 30, ~~2024~~2025, our weighted average lease term and weighted average discount rate for our operating leases was 2.24 years and 34.24%, respectively. As of April 30, ~~2024~~2025, our weighted average lease term and weighted average discount rate for our financing leases were 1413.4 years and 5.0%, respectively, and consisted primarily of our former Missouri distribution center. The building is pledged to secure the amounts outstanding. The depreciable lives of right-of-use assets are limited by the lease term and are amortized on a straight-line basis over the life of the lease.

On October 26, 2017, we entered into (a) a lease agreement with Ryan Boone County, LLC, or the Original Missouri Landlord, concerning certain real property located in Boone County, Missouri on which we ~~have~~had been operating our distribution center, or the Missouri Lease, ~~and~~as ~~(b)~~well aas ~~guaranty in favor of the Original Missouri Landlord, or the Guaranty. With the completion of the Separation, we entered into~~ a ~~sublease~~related ~~under~~payment ~~which~~and ~~American~~performance ~~Outdoor Brands~~guaranty, ~~Inc.,~~dated our former wholly owned subsidiary, or AOUT, subleases from us 59.0% of our Missouri distribution center under the same terms as the Missouri Lease, or the Sublease. On July 16, 2022, we entered into an amendment to the Sublease, increasing the leased space to 64.7% of the facility under the same terms as the Missouri Lease. As

F-1417

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

October 26, 2017, in favor of the Original Missouri Landlord. As part of the Relocation, on January 31, 2023, we entered into (i) an assignment and assumption agreement with American Outdoor Brands, Inc., our former wholly owned subsidiary, or AOUT (which became effective on January 1, 2024), pursuant to which AOUT ~~will~~assumed ~~assume~~ all of our rights, entitlement, and obligations in, to, and under the Missouri Lease, inor ~~each~~the ~~case,~~Assignment ~~which~~and ~~became~~Assumption ~~effective on January 1~~Agreement, ~~2024,~~ and (ii) an amended and restated guaranty in favor of RCS-S&W Facility, LLC, as successor in interest to the Original Missouri Landlord, pursuant to which Smith & Wesson Sales Company was added as a guarantor, or the Amended and Restated Guaranty. WeBecause ~~terminated~~of the ~~Missouri~~Amended ~~Sublease~~and Restated Guaranty, we continue to account for this lease as ofwe ~~January~~have 1,since ~~2024.~~prior ~~For~~to the ~~fiscal~~Relocation. ~~year~~During ~~April~~fiscal 302025, ~~2024,~~AOUT ~~income~~made ~~related~~payments pursuant to this lease directly to the ~~Sublease~~landlord ~~was~~and $2we neither received nor paid any cash payments related to this arrangement.7 ~~million~~For the fiscal year ended April 30, of2025, ~~which~~noncash sublease income was $1.37 million and was recorded in general and administrative expense ~~and~~in $1our consolidated statements of income.4 ~~million~~During ~~was~~the ~~recorded~~fiscal inyear ~~interest~~ended ~~expense,~~April ~~net~~30, in2025 ~~our~~we ~~consolidated~~recognized ~~statements~~$2.1 million of ~~income~~depreciation expense associated with the related right-of-use asset. In addition, on January 5, 2024, we entered into an amendment to extend the lease term on our Deep River facility through January 4, 2025., Weat ~~intend~~which totime ~~occupy~~we ~~the~~ceased ~~facility at least through~~ the ~~current~~related ~~lease~~operations ~~termination~~and ~~date.~~vacated ~~We do not believe there are any indications of impairment relating to assets being utilized at~~ the ~~Deep River facility~~premises.

The following table represents future expected undiscounted cashflows, based on the Assignment and Assumption Agreement with AOUT, to be received by the landlord directly from AOUT on an annual basis for the next five years and thereafter, as of April 30, ~~2024~~2025 (in thousands):

Fiscal	Amount
2025	$	3,180
2026	$	3,235
2026		3,235
2027		3,292
2028		3,350
2029		3,408
Thereafter		35,498
2030		3,468
Total future receipts		51,963
Thereafter		32,030
Less amounts representing interest		(15,607	)
Total future receipts		48,783
Present value of receipts	$	36,356
Less amounts representing interest		(13,821	)
Present value of receipts	$	34,962

Future lease payments for all our operating and finance leases for succeeding fiscal years isare as follows (in thousands):

	Operating	~~Operating~~			Financing	~~Financing~~			Total	~~Total~~
2025		$	1,033			$	3,378			$	4,411
2026		299				3,433			$	3,732
2026			301				3,433				3,734
2027		272				3,490				3,762
2027			272				3,498				3,770
2028		125				3,424				3,549
2028			125				3,416				3,541
2029		—				3,408				3,408
2029			—				3,408				3,408
2030		—				3,468				3,468
Thereafter		—	—			32,030	~~35,498~~			32,030	~~35,498~~
Total future lease payments		696	~~1,731~~			49,253	~~52,631~~			49,949	~~54,362~~
Less amounts representing interest		(145	~~(210~~)	)		(13,849	~~(15,663~~)	)		(13,994	~~(15,873~~)	)
Present value of lease payments		551	~~1,521~~			35,404	~~36,968~~			35,955	~~38,489~~
Less current maturities of lease liabilities		(233	~~(947~~)	)		(1,701	~~(1,564~~)	)		(1,934	~~(2,511~~)	)
Long-term maturities of lease liabilities	$	$318	~~574~~		$	$33,703	~~35,404~~		$	$34,021	~~35,978~~

During fiscal ~~2024~~2025, the cash paid for amounts included in the measurement of liabilities and operating cash flows was $41.62 million.

F-1518

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4. Notes, ~~Loans Payable,~~ and ~~Financing~~Loans ~~Arrangements~~Payable

Credit Facilities — On August 24, 2020, we and certain of our subsidiaries entered into an amended and restated credit agreement, or the Amended and Restated Credit Agreement, with certain lenders, including TD Bank, N.A., as administrative agent; TD Securities (USA) LLC and Regions Bank, as joint lead arrangers and joint bookrunners; and Regions Bank, as syndication agent. The Amended and Restated Credit Agreement isprovided ~~currently~~for ~~unsecured;~~a ~~however,~~revolving ~~should~~line of credit of $100.0 million at any ~~Springing~~one ~~Lien~~time. ~~Trigger~~On ~~Event~~April ~~(as~~28, ~~defined~~2023, inwe entered into an amendment to the Amended and Restated Credit Agreement) ~~occur~~to, weamong other things, replace LIBOR with SOFR as the interest rate benchmark and ~~certain~~amend the definition of ~~our~~“Consolidated ~~subsidiaries~~Fixed ~~would~~Charge beCoverage ~~required~~Ratio” to ~~execute~~exclude ~~certain~~unfinanced ~~documents~~capital expenditures in ~~favor~~connection with our plan to move our headquarters and significant elements of TDour ~~Bank,~~operations ~~N.A.~~to Maryville, asTennessee ~~administrative~~in ~~agent~~2023, ~~and~~or the ~~lenders~~Relocation. ~~party~~The torevolving ~~such~~line ~~documents~~bore ~~would~~interest ~~have~~at aeither ~~legal,~~the ~~valid,~~Base Rate (as defined in the Amended and ~~enforceable~~Restated ~~‎first~~Credit ~~priority~~Agreement) ~~lien~~or the Adjusted Term SOFR rate, plus an applicable margin based on ~~the~~our ~~collateral~~consolidated ~~described~~leverage ~~therein~~ratio.

On ~~The~~October ~~Amended~~3, ~~and~~2024, ~~Restated~~we ~~Credit~~and ~~Agreement~~certain ~~provides~~of ~~for~~our asubsidiaries ~~revolving~~entered ~~line~~into ofan ~~credit~~amended ofand ~~$100.0~~restated ~~million~~credit ~~at any one time~~agreement, or the ~~Revolving~~Second ~~Line. The Revolving Line bears interest at either the Base Rate (as defined in the~~ Amended and Restated Credit Agreement), orwith ~~the~~certain ~~SOFR rate~~lenders, ~~plus~~including anTD ~~applicable~~Bank, ~~margin based on our consolidated leverage ratio~~N. ~~The Amended and Restated Credit Agreement also provides a swingline facility in the maximum amount of $5~~A.0, ~~million~~as atadministrative ~~any~~agent; ~~one~~TD ~~time~~Securities (~~subject to availability under the Revolving Line~~USA). ~~Each~~LLC ~~Swingline~~and ~~Loan~~Regions (Bank, as ~~defined~~joint inlead ~~the~~arrangers ~~Amended~~ and ~~Restated~~joint ~~Credit~~bookrunners; ~~Agreement)~~and ~~bears~~Regions ~~interest at the Base Rate~~Bank, ~~plus an applicable margin based on our Adjusted Consolidated Leverage Ratio (~~as ~~defined~~syndication inagent. ~~the~~The Second Amended and Restated Credit Agreement). ~~Subject~~amended ~~to the satisfaction of certain terms~~ and ~~conditions~~restated ~~described in~~ the Amended and Restated Credit Agreement~~, we have an option to increase the Revolving Line by an aggregate amount not exceeding $50~~.0 ~~million.~~ The ~~Revolving~~Second ~~Line~~Amended ~~matures~~and onRestated ~~the~~Credit ~~earlier~~Agreement ~~of August 24, 2025 or the date that~~ is ~~six~~currently ~~months~~unsecured; inhowever, ~~advance~~should ofany ~~the~~Springing ~~earliest~~Lien ~~maturity~~Trigger ofEvent ~~any Permitted Notes~~ (as defined in the Second Amended and Restated Credit Agreement) ~~under~~occur, ~~the~~we ~~Amended~~ and ~~Restated~~certain ~~Credit~~of ~~Agreement.~~our Onsubsidiaries ~~April~~would ~~28,~~be ~~2023,~~required weto ~~entered~~execute ~~into~~certain andocuments ~~amendment~~in tofavor ~~our~~of ~~existing~~TD ~~credit agreement to~~Bank, ~~among other things~~N.A., ~~replace LIBOR with SOFR~~ as ~~the~~administrative ~~interest~~agent, ~~rate benchmark~~ and ~~amend~~ the ~~definition~~lenders ofparty ~~“Consolidated~~to ~~Fixed~~such ~~Charge~~documents ~~Coverage~~would ~~Ratio”~~have toa ~~exclude~~legal, ~~unfinanced~~valid, ~~capital~~and ~~expenditures~~enforceable in‎first ~~connection~~priority ~~with~~lien on the ~~Relocation.~~collateral described therein.

AsThe ofSecond ~~April~~Amended ~~30,~~and ~~2024,~~Restated weCredit ~~had~~Agreement provides for a revolving line of credit of $40175.0 million ofat ~~borrowings~~any ~~outstanding~~one ontime, or the Revolving Line,. ~~which~~The ~~bore~~Revolving anLine bears interest ~~rate~~at ofeither ~~7.18%,~~the ~~which~~Base isRate ~~equal~~(as todefined in the Second Amended and Restated Credit Agreement) or the Adjusted Term SOFR rate, plus an applicable margin based on our consolidated leverage ratio. AsThe Second Amended and Restated Credit Agreement also provides a ~~result~~swingline facility in the maximum amount of $5.0 million at any one time (subject to availability under the ~~construction~~Revolving ~~associated~~Line). ~~with~~Each Swingline Loan (as defined in the ~~Relocation~~Second Amended and Restated Credit Agreement) bears interest at the Base Rate, plus an applicable margin based on our Adjusted Consolidated Leverage Ratio (as defined in the Second Amended and Restated Credit Agreement). Subject to the satisfaction of certain terms and conditions described in the Second Amended and Restated Credit Agreement, we have an option to increase the Revolving Line by an aggregate amount not exceeding $~~759~~50.0 million. The Revolving Line matures on the earlier of October 3,~~000~~ 2029 or the date that is six months in advance of ~~interest~~the ~~was~~earliest ~~capitalized~~maturity of any Permitted Notes (as ofdefined ~~April~~in ~~30,~~the ~~2024~~Second Amended and Restated Credit Agreement) under the Second Amended and Restated Credit Agreement.

~~The~~As ~~Amended~~of ~~and~~April ~~Restated Credit Agreement contains customary limitations~~30, ~~including limitations on indebtedness~~2025, ~~liens,~~we ~~fundamental~~had ~~changes~~$80.0 tomillion ~~business~~of orborrowings ~~organizational~~outstanding ~~structure,~~on ~~investments,~~the ~~loans,~~Revolving ~~advances~~Line, ~~guarantees,~~bearing ~~and~~interest ~~acquisitions,~~at ~~asset~~a ~~sales,~~weighted ~~dividends,~~average ~~stock~~rate ~~repurchases, stock redemptions, and the redemption or prepayment~~ of ~~other debt~~6.69%, ~~and~~which ~~transactions~~is ~~with~~equal ~~affiliates. We are also subject~~ to ~~financial~~the ~~covenants,~~Adjusted ~~including~~Term aSOFR ~~minimum~~rate ~~consolidated~~plus ~~fixed~~an ~~charge~~applicable ~~coverage ratio and a maximum consolidated leverage ratio~~margin. ~~As of April 30, 2024, we were compliant with all required financial covenants.~~

~~Letters~~The ofSecond Amended and Restated Credit –Agreement Atcontains ~~April~~customary 30limitations, ~~2024~~including limitations on indebtedness, weliens, ~~had~~fundamental ~~outstanding~~changes ~~letters~~to business or organizational structure, investments, loans, advances, guarantees, and acquisitions, asset sales, dividends, stock repurchases, stock redemptions, and the redemption or prepayment of ~~credit~~other ~~aggregating~~debt, $2and transactions with affiliates.7 ~~million~~We are also subject to financial covenants, ~~which~~including ~~included~~a minimum consolidated fixed charge coverage ratio and a ~~$1.5~~maximum ~~million~~consolidated ~~letter~~leverage ratio. As of ~~credit~~April to30, ~~collateralize~~2025, ~~our~~we ~~captive~~were ~~insurance~~compliant ~~company~~with all required financial covenants.

~~Debt~~Letters ~~Issuance~~of ~~Costs~~Credit —– ~~During~~At ~~the~~April ~~fiscal years ended 2024~~30, ~~2023~~2025, ~~and 2022,~~ we ~~did~~had ~~not~~outstanding ~~incur~~letters ~~any~~of ~~debt~~credit ~~issuance~~aggregating ~~costs~~$2.7 ~~We recorded~~million, inwhich ~~notes~~included ~~payable,~~a $~~450,000~~1.5 ofmillion ~~debt~~letter ~~issuance~~of ~~costs~~credit ~~during~~to ~~fiscal~~collateralize ~~2021.~~our ~~The~~captive ~~remaining~~insurance ~~costs are~~ company.

~~F-16~~Debt Issuance Costs — During fiscal 2025, we incurred $941,000 of debt issuance costs. We did not incur any debt issuance costs during fiscal 2024 or 2023. Debt issuance costs are amortized to expense over the life of the credit

F-19

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~being amortized to expense over the life of the credit~~ facility. In total, we amortized $89157,~~805~~000, $89,~~560~~805, and $89,~~560~~805 to interest expense for all debt issuance costs in fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

5. Net Sales

The following table sets forth the breakdown of net sales for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (in thousands):

	For the Years Ended April 30,
	2024		2023		2022
	2025		2024		2023
Handguns	$	~~381~~331,~~898~~936	$	~~360~~381,~~668~~898	$	~~624~~360,~~219~~668
Long Guns		~~116~~103,~~491~~956		74116,~~230~~491		~~189~~74,~~467~~230
Other Products & Services		3738,~~444~~769		4437,~~344~~444		5044,~~440~~344
Total Net Sales	$	~~535~~474,~~833~~661	$	~~479~~535,~~242~~833	$	~~864~~479,~~126~~242

We sell our products and services under our Smith & Wesson and Gemtech brands. Depending upon the product or service, our customers primarily include distributors; federal, state, and municipal law enforcement agencies and officers; government and military agencies; businesses; retailers; and ~~retailers~~retail consumers for non-serialized firearms-related products.

We sell our products worldwide. The following table sets forth the breakdown of export net sales included in the above table. Our export net sales shown below accounted for approximately 5%, 45%, and 34% of total net sales for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively (in thousands):

	For the Years Ended April 30,
Region	~~2024~~2025		~~2023~~2024		~~2022~~2023
Asia	$	98,~~346~~174	$	59,~~411~~346	$	35,~~899~~411
Latin America		5,314		4,052		5,272
Europe		6,995		4,786		6,569
Europe		4,786		6,569		8,342
Latin America		1,498		5,314		4,052
All others international		56,~~143~~428		35,~~736~~143		83,~~014~~736
Total international net sales	$	2423,~~589~~095	$	1924,~~768~~589	$	2519,~~527~~768

6. ~~Advertising~~Property, ~~Costs~~Plant, and Equipment

WeThe ~~expense~~following ~~advertising~~table ~~costs,~~summarizes ~~primarily consisting of magazine advertisements~~property, ~~printed materials~~plant, ~~television advertisements, digital advertisements, radio advertisements,~~ and ~~billboards,~~equipment ~~either~~ as ~~incurred or upon the first occurrence~~ of ~~the advertising. Advertising expense, included in selling, marketing, and distribution expenses, for the fiscal years ended~~ April 30, ~~2024,~~2025 ~~2023,~~ and ~~2022,~~2024 ~~amounted~~(in ~~to $14.7 million, $14.7 million, and $17.5 million, respectively.~~thousands):

7. Property, Plant, and Equipment


	April 30, 2025			April 30, 2024
Machinery and equipment	$	344,706		$	337,772
Building and improvements		154,398			154,507
Software and hardware		54,775			52,750
Land and improvements		3,557			3,109
Right of use assets		41,631			41,631
Construction in progress		12,392			15,479
Total property, plant, and equipment		611,459			605,248
Less: Accumulated depreciation and amortization		(368,811	)		(352,615	)
Total property, plant, and equipment, net	$	242,648		$	252,633

~~The~~Total ~~following~~depreciation ~~table~~of ~~summarizes~~tangible ~~property~~assets and amortization of software expense amounted to $31.3 million, ~~plant~~$32.0 million, and ~~equipment~~$31.0 asmillion offor the fiscal years ended April 30, 2025, 2024, and 2023, ~~(in thousands):~~respectively.

	April 30, 2024				April 30, 2023
Machinery and equipment	$	337,772		$		308,852
Building and improvements		154,507				40,131
Software and hardware		52,750				49,569
Land and improvements		3,109				2,945
Right of use assets		41,631				41,631
		589,769				443,128
Less: Accumulated depreciation and amortization		(352,615	)			(334,383	)
		237,154				108,745
Construction in progress		15,479				101,585
Total property, plant, and equipment, net	$	252,633		$		210,330

F-20

F-17

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Depreciation~~The offollowing ~~tangible~~table ~~assets~~summarizes depreciation and amortization ofexpense, ~~software~~which ~~expense~~includes ~~amounted~~amortization toof ~~$32.0~~intangibles ~~million,~~and ~~$31.0~~debt ~~million~~financing costs, ~~and~~by ~~$29.5~~line ~~million~~item for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022,~~2023 ~~respectively.~~(in thousands):

The following table summarizes depreciation and amortization expense, which includes amortization of intangibles and debt financing costs, by line item for the fiscal years ended April 30, 2024, 2023, and 2022 (in thousands):


	For the Years Ended April 30,
	2025		2024		2023
Cost of sales	$	18,904	$	20,607	$	22,205
Research and development		1,164		533		529
Selling, marketing, and distribution		2,115		3,635		1,524
General and administrative		9,505		7,693		7,088
Interest expense, net		157		90		90
Total depreciation and amortization	$	31,845	$	32,558	$	31,436

	For the Years Ended April 30,
	2024		2023		2022
Cost of sales	$	20,607	$	22,205	$	21,879
Research and development		533		529		484
Selling, marketing, and distribution		3,635		1,524		509
General and administrative		7,693		7,088		7,111
Interest expense		90		90		90
Total depreciation and amortization	$	32,558	$	31,436	$	30,073

7. Inventories

8.The ~~Inventories~~following table sets forth a summary of inventories, net of reserves, stated at lower of cost or net realizable value, as of April 30, 2025 and 2024 (in thousands):

The following table sets forth a summary of inventories, net of reserves, stated at lower of cost or net realizable value, as of April 30, 2024 and 2023 (in thousands):


	April 30, 2025		April 30, 2024
Finished goods	$	115,686	$	83,337
Finished parts		55,119		56,282
Work in process		6,037		8,033
Raw material		12,998		12,848
Total inventories	$	189,840	$	160,500

	April 30, 2024		April 30, 2023
Finished goods	$	83,337	$	93,705
Finished parts		56,282		65,460
Work in process		8,033		6,821
Raw material		12,848		11,132
Total inventories	$	160,500	$	177,118

8. Accrued Expenses and Deferred Revenue

9.The ~~Accrued~~following ~~Expenses~~table sets forth other accrued expenses as of April 30, 2025 and ~~Deferred~~2024 ~~Revenue~~(in thousands):

The following table sets forth other accrued expenses as of April 30, 2024 and 2023 (in thousands):


	April 30, 2025		April 30, 2024
Accrued taxes other than income	$	5,907	$	5,838
Accrued customer incentives and promotions		4,853		3,172
Accrued employee benefits		3,240		2,742
Accrued professional fees		1,774		2,603
Current portion of finance lease obligation		1,701		1,564
Current portion of operating lease obligation		233		947
Accrued settlement		—		3,200
Accrued other		6,970		4,423
Total accrued expenses and deferred revenue	$	24,678	$	24,489

	April 30, 2024		April 30, 2023
Accrued taxes other than income	$	5,838	$	3,703
Accrued professional fees		4,925		2,596
Accrued other		4,423		4,597
Accrued settlement		3,200		—
Accrued employee benefits		2,742		3,256
Accrued distributor incentives		1,687		1,640
Current portion of finance lease obligation		1,564		1,434
Accrued rebates and promotions		1,485		1,649
Current portion of operating lease obligation		947		1,274
Total accrued expenses and deferred revenue	$	26,811	$	20,149

9. Fair Value Measurement

10. Fair Value Measurement

We follow the provisions of ASC 820-10, Fair Value Measurements and Disclosures Topic, or ASC 820-10, for our financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value under GAAP and requires expanded disclosures regarding fair value measurements. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the

F-1821

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

Financial assets and liabilities recorded on the accompanying consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access at the measurement date (examples include active exchange-traded equity securities, listed derivatives, and most U.S. Government and agency securities).

Our cash and cash equivalents, which are measured at fair value on a recurring basis, totaled $6025.82 million and $5360.68 million as of April 30, ~~2024~~2025 and ~~2023~~2024, respectively. The carrying value of our revolving line of credit approximated the fair value as of April, 30, ~~2024~~2025. We utilized Level 1 of the value hierarchy to determine the fair values of these assets.

Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets in which trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following:

•

quoted prices for identical or similar assets or liabilities in non-active markets (such as corporate and municipal bonds which trade infrequently);

•

inputs other than quoted prices that are observable for substantially the full term of the asset or liability (such as interest rate and currency swaps); and

•

inputs that are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability (such as certain securities and derivatives).

Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect our assumptions about the assumptions a market participant would use in pricing the asset or liability.

As of April 30, ~~2024~~2025, we did not have any Level 2 or Level 3 financial assets or liabilities.

1110. Self-Insurance Reserves

As of April 30, ~~2024~~2025 and ~~2023~~2024, we had reserves for workers’ compensation, product liability, and medical/dental costs totaling $8.7 million ~~and $9.2 million~~, ~~respectively,~~ (of which $3.36 million and $23.63 million, respectively, was classified as other non-current liabilities). As of April 30, ~~2024~~2025 and ~~2023~~2024, $5.41 million and $65.64 million, respectively, were included in ~~accrued~~current ~~expenses~~liabilities ~~or accounts payable~~ on the accompanying consolidated balance sheets. In addition, as of April 30, ~~2024~~2025 and ~~2023~~2024, $~~984,000~~1.1 million and $~~663~~984,000, respectively, of workers’ compensation ~~recoverable~~receivable was classified as other assets. While we believe these reserves to be adequate, it is possible that the ultimate liabilities will exceed such estimates.

The following table summarizes the activity in the workers’ compensation, product liability, ~~municipal liability,~~ and medical/dental reserves in the fiscal years ended April 30, ~~2024~~2025 and ~~2023~~2024 (in thousands):

	For the Year Ended April 30,
	2024			2023
	2025			2024
Beginning balance	$	98,~~239~~699		$	89,~~676~~239
Additional provision charged to expense		21,~~921~~395			32,~~589~~921
Payments		(31,~~461~~400	)		(3,~~026~~461	)
Ending balance	$	8,~~699~~694		$	98,~~239~~699

F-1922

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

It is our policy to provide an estimate for loss as a result of expected adverse findings or legal settlements on product liability, workers’ compensation, and other matters when such losses are probable and are reasonably estimable. It is also our policy to accrue for reasonably estimable legal costs associated with defending such litigation. While such estimates involve a range of possible costs, we determine, in consultation with counsel, the most likely cost within such range on a case-by-case basis. We also record receivables from insurance carriers relating to these matters when their collection is probable and reasonably estimable. As of April 30, ~~2024~~2025 and ~~2023~~2024, we had accrued reserves for product litigation liabilities of $3.1 million ~~and $4.3 million, respectively~~ (of which $~~497~~566,000 and $~~568~~497,000, respectively, was non-current), consisting entirely of expected legal defense costs. ~~During~~As ~~fiscal~~of ~~2024~~April 30, we2025 ~~did~~and ~~not record any receivables from insurance carriers related to these liabilities. Prior to fiscal~~ 2024, we had ~~recorded~~no receivables from insurance carriers related to these liabilities ~~of $1~~.9 ~~million, nearly all of which has been classified as other non-current assets.~~

1211. Stockholders’ Equity

Treasury Stock

On September 19, 2023, our Board of Directors authorized the repurchase of $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions through September 19, 2024, or the 2023 Authorization. During fiscal 2024, we purchased 793,551 shares of our common stock for $10.2 million under ~~this~~the ~~authorization. We did not purchase any shares of our common stock during fiscal~~ 2023, ~~and we did not have an authorized repurchase program as of April 30, 2023~~Authorization. During fiscal ~~2022~~2025, we ~~repurchased~~purchased 1,~~967~~531,~~420~~763 shares of our common stock for $4021.04 million, ~~utilizing cash on hand~~ under anthe ~~available~~2023 ~~program~~Authorization. ~~that~~The ~~our~~2023 ~~Board~~Authorization ofexpired ~~Directors~~on ~~authorized~~September in19, ~~fiscal 2021~~2024. On ~~June~~September 155, ~~2021~~2024, our Board of Directors authorized the repurchase of anup ~~additional~~to $50.0 million of our common stock, subject to certain conditions, in the open market or in privately negotiated transactions. ~~Pursuant~~from toSeptember ~~this authorization~~20, ~~during~~2024 ~~fiscal~~through ~~2022~~September 20, we2025, ~~completed~~or ~~this~~the ~~repurchase~~2024 ~~program~~Authorization. byAs ~~purchasing~~of 2April 30,~~788~~ 2025,~~152~~ we had repurchased 312,310 shares of our common stock for $504.01 million, ~~utilizing~~under ~~cash~~the on2024 ~~hand~~Authorization. We did not purchase any shares of our common stock during fiscal 2023.

During the year ended April 30, 2025, we repurchased a total of 1,844,073 shares of our common stock for $25.5 million. During the year ended April 30, 2024, we repurchased a total of 793,551 shares of our common stock for $10.2 million.

Incentive Stock and Employee Stock Purchase Plans

We have two stock incentive plans: the 2013 Incentive Stock Plan and the 2022 Incentive Stock Plan, or, together, the Incentive Stock Plans, under which employees and non-employees may be granted stock options, restricted stock awards, restricted stock units, or RSUs, stock appreciation rights, bonus stock, and awards in lieu of obligations, performance awards, and dividend equivalents. ~~New~~No grants have been made under the 2013 Incentive Stock Plan ~~have not been made~~ since our stockholders approved the 2022 Incentive Stock Plan at our annual meeting of stockholders held onin September ~~12,~~ 2022. All new grants ~~covering participants~~ are issued under the 2022 Incentive Stock Plan.

The 2022 Incentive Stock Plan authorizes the issuance of 1,000,000 shares, plus 4,312,247 shares that were reserved and remained available for grant and delivery under the 2013 Incentive Stock Plan as of September 12, 2022, the effective date of the 2022 Incentive Stock Plan. The 2022 Incentive Stock Plan permits the grant of options to acquire common stock, restricted stock awards, ~~restricted stock units, or~~ RSUs, stock appreciation rights, bonus stock and awards in lieu of obligations, performance awards, and dividend equivalents. Our Board of Directors, or a committee of our ~~board~~Board of Directors, administers the stock plans, selects recipients to whom awards are granted, and determines the grants to be awarded. Options granted under the stock plans are exercisable at a price determined by our Board of Directors or a committee of our ~~board~~Board of Directors at the time of grant, but in no event, less than fair market value of our common stock on the effective date of the grant. Grants of options may be made to employees and directors without regard to any performance measures. All options issued pursuant to the stock plans are generally nontransferable and subject to forfeiture.

Unless terminated earlier by our Board of Directors, the 2022 Incentive Stock Plan will terminate at the earliest of (1) the tenth anniversary of the effective date of the 2022 Incentive Stock Plan, or (2) such time as no shares of common stock remain available for issuance under the plan and we have no further rights or obligations with respect to outstanding awards under the plan. The date of grant of an award is deemed to be the effective date upon which our Board of Directors or a committee authorizes the granting of such award.

F-2023

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Except in specific circumstances, grants of stock options vest over a period of four years and are exercisable for a period of 10 years after vesting. The 2022 Incentive Stock Plan also permits the grant of stock options to non-employees, which our Board of Directors or a committee has authorized in the past. There were no outstanding and exercisable stock options in fiscal ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023.

The following table summarizes stock compensation expense by line item for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 (in thousands):

	For the Year Ended April 30,
	2024		2023		2022
	2025		2024		2023
Cost of sales	$	~~648~~686	$	~~667~~648	$	~~809~~667
Research and development		77625		8077		6180
Selling, marketing, and distribution		~~930~~1,148		~~814~~930		~~844~~814
General and administrative		45,~~028~~150		34,~~541~~028		23,~~822~~541
Total stock-based compensation	$	57,~~683~~609	$	5,~~102~~683	$	45,~~536~~102

As of April 30, ~~2024~~2025, there were 54,~~420~~997,~~444~~827 shares available for grant under the 2022 Incentive Stock Plan. We use our unissued share pool for all shares issued for options, restricted stock awards, RSUs, performance share units, performance-based restricted stock units, or PSUs, and shares issued under our Employee Stock Purchase Plan, or ESPP.

We grant service-based RSUs to employees, consultants, and directors. The awards are made at no cost to the recipient. An RSU represents the right to acquire one share of our common stock and does not carry voting or dividend rights. Except in specific circumstances, RSU grants to employees and consultants generally vest over a period of three or four years with one-third or one-fourth of the units vesting, respectively, on each anniversary date of the grant date. RSU grants to directors generally vest over a period of one year with one-twelfth of the units vesting each month. The aggregate fair value of our RSU grants is amortized to compensation expense over the applicable vesting period.

We grant PSUs to our executive officers. At the time of grant, we calculate the fair value of our PSUs using the Monte-Carlo simulation. We incorporate the following variables into the valuation model:

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
Grant date fair market value
Smith & Wesson Brands, Inc	$	1216.0880		$	1412.1908		$	1814.6719
Russell 2000 Index	$	1,~~769~~980.2123		$	21,~~015~~769.0421		$	2,~~277~~015.4504
Volatility (a)
Smith & Wesson Brands, Inc		5850.4691	%		6458.7746	%		6264.3377	%
Russell 2000 Index		2722.0898	%		3127.7508	%		3031.6975	%
Correlation coefficient (b)		0.~~3528~~3904			0.~~2094~~3528			0.~~1540~~2094
Risk-free interest rate (c)		34.8173	%		23.9181	%		02.3391	%
Dividend yield		32.3186	%		23.2631	%		12.0726	%

(a)

Expected volatility is calculated over the most recent period that represents the remaining term of the performance period as of the valuation date, or three years.

(b)

The correlation coefficient utilizes the same historical price data used to develop the volatility assumptions.

(c)

The risk-free interest rate is based on the yield of a zero-coupon U.S. Treasury bill, commensurate with the three-year performance period.

~~The PSUs vest, and the fair value of such PSUs are recognized, over the corresponding three~~F-year performance period. Our PSUs have a maximum aggregate award equal to 200% of the target amount granted. Generally, the number of PSUs that may be earned depends upon the total stockholder return, or TSR, of our common stock compared with the TSR of the Russell 2000 Index, or RUT, over the three-year performance period. For PSUs, our stock must outperform the RUT by 5% in order for the target award to vest. In addition, there is a cap on the number of shares that can be earned under our PSUs, which is equal to six times the grant-date value of each award.24

F-21

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

InThe ~~connection~~PSUs ~~with~~vest, and the ~~spin-off~~fair value of ~~AOUT~~such ~~and~~PSUs inare ~~accordance~~recognized, ~~with~~over the ~~terms~~corresponding three-year performance period. Our PSUs have a maximum aggregate award equal to 200% of the ~~Employee~~target ~~Matters~~amount ~~Agreement~~granted. ~~between~~Generally, usthe ~~and~~number ~~AOUT~~of PSUs that may be earned depends upon the total stockholder return, ~~all~~or ~~outstanding~~TSR, ~~PSU~~of ~~awards~~our ~~were~~common ~~adjusted~~stock ~~such~~compared ~~that~~with the TSR of the Russell 2000 Index, or RUT, over the three-year performance ~~criteria~~period. The relative toperformance ~~SWBI~~of ~~share~~our ~~price~~common ~~was~~stock ~~modified~~must toequal ~~compare~~or exceed the ~~market~~relative ~~cap~~performance of ~~SWBI~~the RUT for ~~the~~any 90of ~~days~~the ~~subsequent~~PSUs subject to the ~~original~~awards ~~grant~~to ~~date~~be toearned ~~the~~and ~~combined~~vest. ~~market~~The ~~cap~~relative performance of ~~SWBI~~our ~~and~~common ~~AOUT~~stock ~~for~~must outperform the 90RUT ~~days~~by ~~preceding~~5% in order for the ~~original~~target ~~vest~~award ~~date~~to vest. The ~~change~~relative inperformance ~~the~~of ~~market~~our ~~cap~~common ~~will~~stock bemust ~~compared~~outperform to the ~~change~~RUT by at least 10% in ~~the~~order ~~value~~for 200% of the ~~Russell~~PSUs ~~2000~~subject ~~index~~to ~~for~~the awards (the ~~same~~maximum ~~period. In~~number ~~addition,~~of aPSUs) ~~pro~~being ~~rata~~earned ~~number~~and ofvesting. ~~AOUT~~In ~~PSUs~~addition, ~~were~~there ~~granted~~is ata cap on the ~~time~~number of ~~the~~shares ~~spin~~that tocan ~~each~~be ~~SWBI~~earned ~~PSU~~under ~~recipient~~our ~~with~~PSUs, ~~the~~which ~~same~~is ~~terms~~equal asto six times the ~~underlying~~grant-date ~~original~~value ~~SWBI~~of ~~PSU~~each award.

In certain circumstances, the vested awards will be delivered on the first anniversary of the applicable vesting date. We have applied a discount to the grant date fair value when determining the amount of compensation expense to be recorded for these RSUs and PSUs.

During fiscal 2025, we granted 142,878 PSUs to certain of our executive officers. We also granted 486,895 service-based RSUs during fiscal 2025, including 142,882 RSUs to certain of our executive officers, 54,666 RSUs to our directors, and 289,347 RSUs to non-executive officer employees.

During fiscal 2025, we canceled 63,469 market-condition PSUs as a result of the failure to satisfy the performance metric and 38,521 as a result of the service period condition not being met. We canceled 36,068 service-based RSUs as a result of the service period condition not being met. We delivered 218,831 shares of common stock to current employees and directors under vested RSUs with a total market value of $4.5 million.

During fiscal 2024, we granted 176,583 PSUs to certain of our executive officers. We also granted 357,357 service-based RSUs during fiscal 2024, including 117,724 RSUs to certain of our executive officers, 58,819 RSUs to our directors, and 180,814 RSUs to non-executive officer employees.

During fiscal 2024, we canceled 158,100 market-condition PSUs as a result of the failure to satisfy the performance metric. We canceled 24,385 service-based RSUs as a result of the service period condition not being met. We delivered 228,087 shares of common stock to current employees and directors under vested RSUs with a total market value of $2.7 million. In addition, in connection with a 2019 grant, which vested in fiscal 2023, we delivered 55,726 market-condition PSUs to certain of our executive officers and a former executive officer with a total market value of $664,000.

During fiscal 2023, we granted 108,736 PSUs to certain of our executive officers. We also granted 287,854 service-based RSUs during fiscal 2023, including 72,494 RSUs to certain of our executive officers, 56,497 RSUs to our directors, and 158,863 RSUs to non-executive officer employees.

During fiscal 2023, we canceled 35,179 service-based RSUs as a result of the service period condition not being met. We delivered 202,859 shares of common stock to current employees under vested RSUs with a total market value of $2.7 million. In addition, in connection with a 2018 grant, which vested in fiscal 2022, we delivered 83,586 market-condition PSUs to certain of our executive officers and a former executive officer with a total market value of $1.2 million. In addition, in connection with a 2019 grant, 57,600 PSUs vested to certain of our executive officers and a former executive officer, which resulted from achieving the maximum performance of 200.0% of target for the original 28,800 PSUs granted. Relating to this same grant, 1,874 shares were released to cover tax obligations on the vesting.

~~During~~The ~~fiscal~~grant ~~2022,~~date wefair ~~granted~~value ~~73,913 PSUs to certain~~ of ~~our~~RSUs ~~executive officers~~ and aPSUs ~~former~~that ~~executive~~vested ~~officer.~~in ~~We also granted 184,767 service-based RSUs during~~ fiscal ~~2022~~2025, ~~including 65~~2024,~~518~~ ~~RSUs to certain of our executive officers~~ and a2023 ~~former~~was ~~executive~~$3.8 ~~officer~~million, ~~42,702~~$3.3 ~~RSUs to our directors~~million, and 76$4.0 million,~~547~~ ~~RSUs to non-executive officer employees~~respectively.

~~During fiscal 2022, we canceled 45,249 service~~F-based RSUs as a result of the service period condition not being met. We canceled 40,869 PSUs as a result of the service period condition not being met. We delivered 365,736 shares of common stock to current employees under vested RSUs with a total market value of $7.5 million. In addition, in connection with a 2018 grant, we vested 86,400 market-condition PSUs to certain of our executive officers and a former executive officer, which resulted from achieving the maximum performance of 200.0% of target for the original 43,200 PSUs granted. Related to this same grant, we released 2,814 market-condition PSUs to cover tax obligations as a result of the vesting.25

The grant date fair value of RSUs and PSUs that vested in fiscal 2024, 2023, and 2022 was $3.3 million, $4.0 million, and $4.4 million, respectively.

F-22

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of activity for unvested RSUs and PSUs for fiscal years ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023 is as follows:

For the Year Ended April 30,

2024

2023

2022

2025

2024

2023

Weighted

~~Weighted~~

Weighted

~~Weighted~~

Weighted

Total # of

Average

Total # of

~~Average~~

Average

~~Total # of~~

Total # of

~~Average~~

Average

Restricted

Grant Date

Restricted

~~Grant Date~~

Grant Date

~~Restricted~~

Restricted

~~Grant Date~~

Grant Date

Stock Units

Fair Value

Stock Units

~~Fair Value~~

Fair Value

~~Stock Units~~

Stock Units

~~Fair Value~~

Fair Value

RSUs and PSUs outstanding, beginning of period

~~932~~1,~~705~~000,347

13.1445

~~830~~932,~~813~~705

~~13.30~~$

13.14

~~995,879~~

830,813

~~11.14~~$

13.30

Awarded

~~533~~629,~~940~~773

1215.0760

~~425~~533,~~390~~940

~~(a)~~

~~13.52~~

12.07

~~301,880~~

425,390

(a)

~~18.95~~

13.52

Released

(~~283~~287,~~813~~929

)

~~(b)~~

1113.5418

(~~288~~283,~~319~~813

)

(b)

~~13.92~~

11.54

~~(368,550~~

)(288,319

)

~~11.99~~

13.92

Forfeited

(~~182~~138,~~485~~058

)

1017.8301

(35182,~~179~~485

)

~~15.17~~

10.83

~~(98,396~~

)(35,179

)

~~12.29~~

15.17

RSUs and PSUs outstanding, end of period

1,~~000~~204,~~347~~133

1314.4521

~~932~~1,~~705~~000,347

~~13.14~~$

13.45

~~830,813~~

932,705

~~13.30~~$

13.14

(a)

_____________________

Includes 28,800 PSUs that vested during the fiscal year in connection with achieving maximum performance targets for the 2019 grants.

(b)

Includes 55,726 PSUs that vested during fiscal 2023.

As of April 30, ~~2024~~2025, there was $35.80 million of unrecognized compensation cost related to unvested RSUs and PSUs. This cost is expected to be recognized over a weighted average remaining contractual term of 1.32 years.

WeOn ~~had an ESPP that commenced on~~ September 2627, ~~2011~~2021, orour ~~the~~stockholders ~~2011~~approved our 2021 ESPP, which ~~authorized~~authorizes the sale of up to 63,000,000 shares of our common stock to employees. ~~The~~All ~~2011~~options and rights to participate in our ESPP ~~continued~~are nontransferable and subject to forfeiture in ~~effect~~accordance ~~for~~with our ESPP guidelines. Our current ESPP will be implemented in a ~~term~~series of 10successive ~~years~~offering ~~and~~periods, ~~expired~~each with a maximum duration of 12 months. If the fair market value, or FMV, per share of our common stock on any purchase date is less than the FMV per share on the start date of a 12-month offering period, then that ~~ended~~offering ~~March~~period 31will automatically terminate, ~~2022~~and a new 12-month offering period will begin on the next business day. ~~All~~Each ~~options~~offering ~~and~~period ~~rights~~will tobegin ~~participate~~on April 1 or October 1, as applicable, immediately following the end of the previous offering period. Payroll deductions will be on an after-tax basis, in an amount of not less than 1% and not more than 20% (or such greater percentage as the ~~2011~~committee appointed to administer our ESPP ~~are~~may ~~nontransferable~~establish ~~and~~from ~~subject~~time to ~~forfeiture~~time inbefore ~~accordance~~the ~~with~~first day of an offering period) of a participant’s compensation on each payroll date. The option exercise price per share will equal 85% of the ~~2011~~lower ~~ESPP~~of ~~guidelines~~the FMV on the first day of the offering period or the FMV on the exercise date. AsThe maximum number of ~~April~~shares 30that a participant may purchase during any purchase period is 12,500 ~~2022~~shares, weor ~~had~~a ~~issued~~total 1of $25,~~948,334~~000 in shares, based on the FMV on the first day of ~~common~~the ~~stock~~offering ~~under~~period. Our ESPP will remain in effect until the ~~2011~~earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater than the number of reserved shares available for purchase under our ESPP, ~~all~~(b) such date as is determined by our Board of ~~which~~Directors ~~were~~in ~~purchased~~its ~~prior~~discretion, toor ~~April~~(c) 30March 31, ~~2022~~2032. In the event of certain corporate transactions, each option outstanding under our ESPP will be assumed or an equivalent option will be substituted by the successor corporation or a parent or subsidiary of such successor corporation. During fiscal ~~2022~~2025 and 2024, ~~128~~175,~~422~~134 and 151,225 shares were purchased under the ~~2011~~2021 ESPP, respectively.

On September 27, 2021, our stockholders approved our 2021 ESPP, which authorizes the sale of up to 3,000,000 shares of our common stock to employees. All options and rights to participate in our ESPP are nontransferable and subject to forfeiture in accordance with our ESPP guidelines. Our current ESPP will be implemented in a series of successive offering periods, each with a maximum duration of 12 months. If the fair market value, or FMV, per share of our common stock on any purchase date is less than the FMV per share on the start date of a 12-month offering period, then that offering period will automatically terminate, and a new 12-month offering period will begin on the next business day. Each offering period will begin on April 1 or October 1, as applicable, immediately following the end of the previous offering period. Payroll deductions will be on an after-tax basis, in an amount of not less than 1% and not more than 20% (or such greater percentage as the committee appointed to administer our ESPP may establish from time to time before the first day of an offering period) of a participant’s compensation on each payroll date. The option exercise price per share will equal 85% of the lower of the FMV on the first day of the offering period or the FMV on the exercise date. The maximum number of shares that a participant may purchase during any purchase period is 12,500 shares, or a total of $25,000 in shares, based on the FMV on the first day of the offering period. Our ESPP will remain in effect until the earliest of (a) the exercise date that participants become entitled to purchase a number of shares greater than the number of reserved shares available for purchase under our ESPP, (b) such date as is determined by our board of directors in its discretion, or (c) March 31, 2022. In the event of certain corporate transactions, each option outstanding under our ESPP will be assumed or an equivalent option will be substituted by the successor corporation or a parent or subsidiary of such successor corporation. During fiscal 2024 and 2023, 151,225 and 175,047 shares were purchased under the 2021 ESPP, respectively.

We measure the cost of employee services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. We calculate the fair value of our stock options issued to employees using the Black-Scholes model at the time the options were granted. That amount is then amortized over the vesting period of the option. With our ESPP, fair value is determined at the beginning of the purchase period and amortized over the term of each exercise period.

F-2326

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following assumptions were used in valuing our ESPP purchases during the years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023:

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
Risk-free interest rate		54.~~225~~136	%		45.~~301~~225	%		04.~~682~~301	%
Expected term	6 months			6 months			6 months
Expected volatility		4542.6903	%		4945.1869	%		6049.6218	%
Dividend yield		34.2797	%		3.5927	%		13.8559	%

We estimate expected volatility using historical volatility for the expected term. The fair value of each stock option or ESPP purchase was estimated on the date of the grant using the Black-Scholes option pricing model (using the risk-free interest rate, expected term, expected volatility, and dividend yield variables, as noted in the above table). The total stock-based compensation expense, including stock options, purchases under our ESPP, and RSU and PSU awards, was $5.7.6 million, $5.17 million, and $4.5.1 million, for fiscal years ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

1312. Employer Sponsored Benefit Plans

Contributory Defined Investment Plan — We offer two contributory defined investment plans covering substantially all employees, subject to service requirements. Employees may contribute up to 100% of their annual pay, depending on the plan. We generally make discretionary matching contributions of up to 50% of the first 6% of employee contributions to the plan. We contributed $2.74 million, $2.67 million, and $2.96 million for the fiscal years ended April 30, ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, respectively.

Nonelective Contribution Sharing Plan — We have a non-contributory profit sharing plan covering substantially all of our employees. Employees become eligible on May 1 following the completion of a full fiscal year of continuous service. Our contributions to the plan are discretionary. For fiscal ~~2024~~2025, we plan to contribute approximately $93.18 million, which has been recorded in general and administrative costs. We contributed $89.21 million and $138.52 million for the fiscal years ended April 30, ~~2023~~2024 and ~~2022~~2023, respectively. Contributions are funded after the fiscal year-end.

1413. Income Taxes

Income tax expense~~/(benefit)~~ from continuing operations consisted of the following (in thousands):

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
Current:
Federal	$	6,~~315~~875		$	166,~~259~~786		$	5216,~~843~~259
State		21,~~637~~977			12,~~955~~713			71,~~174~~955
Total current		8,~~952~~852			189,~~214~~499			6018,~~017~~214
Deferred:
Federal		(2,~~558~~638	)		(62,~~217~~558	)		(16,~~889~~217	)
State		(~~1,723~~394	)		(~~647~~1,701	)		(~~236~~647	)
Total deferred		~~835~~(3,032	)		~~(6,864~~857	)		(26,~~125~~864	)
Total income tax expense	$	95,~~787~~820		$	1110,~~350~~356		$	5711,~~892~~350

F-2427

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents a reconciliation of income tax expense from continuing operations at the statutory rate of 21% to the expense~~/(benefit)~~ in the consolidated financial statements (in thousands):

	For the Year Ended April 30,
	2024			2023			2022
	2025			2024			2023
Federal income taxes expected at the statutory rate	$	104,~~373~~041		$	10,~~127~~861		$	5310,~~001~~127
State income taxes, net of federal tax effects		~~(225~~1,406	)		~~1,023~~(144	)		51,~~503~~023
Stock compensation		~~467~~386			~~136~~467			~~(749~~136	)
Business meals and entertainment		~~100~~113			89100			~~118~~89
Research and development tax credit		(~~281~~335	)		(~~265~~281	)		(~~300~~265	)
Amendments to prior year returns		~~(1,176~~—	)		—(1,176	)		—
Other		~~529~~209			~~240~~529			~~319~~240
Total income tax expense	$	95,~~787~~820		$	1110,~~350~~356		$	5711,~~892~~350

~~Deferred tax assets and liabilities related to temporary differences consisted of the following (in thousands):~~ F-28

	For the Years Ended April 30,
	2024			2023
Deferred Tax Assets
Inventory reserves	$	8,489		$	7,495
Accrued expenses, including compensation		4,678			4,764
Net operating loss carryforwards and tax credits		3,988			3,156
Operating lease liability		240			473
Product liability		191			596
Workers' compensation		704			477
State bonus depreciation		1,812			755
Warranty reserve		1,017			913
Stock-based compensation		1,319			1,551
Section 174 capitalized R&D expense		2,502			1,549
Other		820			622
Total deferred tax assets before valuation allowance		25,760			22,351
Valuation allowance		(3,350	)		(3,031	)
Net deferred tax assets		22,410			19,320
Deferred Tax Liabilities
Operating lease right-of-use assets		(197	)		(420	)
Property, plant & equipment		(12,426	)		(8,847	)
Intangible assets		(2,270	)		(1,581	)
Other		(268	)		(387	)
Total deferred tax liabilities		(15,161	)		(11,235	)
Net Deferred Tax Asset/(Liability)	$	7,249		$	8,085

We had no federal net operating losses as of April 30, 2024.

We had $27.1 million and $17.7 million in state net operating loss carryforwards as of April 30, 2024 and 2023, respectively. The state net operating loss carryforwards will expire between April 30, 2027 and April 30, 2040. We had $3.3 million and $2.8 million of state tax credit carryforwards as of April 30, 2024 and 2023, respectively. Certain state tax credit carryforwards will expire by April 30, 2049, with others having no expiration date.

As of April 30, 2024 and 2023, valuation allowances related to our deferred tax assets for state net operating loss carryforwards were $1.4 million and $957,000, respectively, and $1.9 million and $2.2 million were provided on our deferred tax assets for state tax credits, respectively, that we do not anticipate using prior to expiration.

The income tax provisions represent effective tax rates of 19.8% and 23.5% for fiscal 2024 and 2023, respectively.

F-25

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred tax assets and liabilities related to temporary differences consisted of the following (in thousands):


	For the Years Ended April 30,
	2025		2024
Deferred Tax Assets
Inventory reserves	$	11,637	$	8,489
Accrued expenses, including compensation		2,930		4,678
Net operating loss carryforwards and tax credits		8,200		3,964
Operating lease liability		128		240
Product liability		151

Filing Compare · SMITH & WESSON BRANDS, INC.