Company Posts Year-Over-Year Sales Growth of 22.1 million, or $.06 per diluted
share, for the quarter ended October 31, 2004.4 million for the first
six months of fiscal 2006. While we are not providing
quarterly guidance, we expect that the fourth quarter will be significantly
stronger than the third quarter. The transaction involved the sale
of 6 ,000,000 shares of common stock to institutional investors, along with
warrants to purchase an additional 1,200,000 shares at a price of $5."

Conference Call
The Company will host a conference call today, September 14, 2005, to
discuss its first quarter results and its outlook for the remainder of fiscal
2006., is one of the world's largest manufacturers of quality handguns, law
enforcement products and firearm safety/security products.001 par value,
20,000,000 shares authorized , 0 shares
on July 31, 2005 and April 30, 2005
issued and outstanding -- --
Common stock, $.

cqb firearms

3 million for the quarter ended October 31, 2005
increased $1. government for
Afghanistan soldiers.S. In fact,
military and federal government firearms sales, which were virtually
non-existent one year ago, have so far totaled over $4.

Updated Outlook for Fiscal 2006
We are raising our sales expectations and now expect net product sales for
fiscal 2006 to increase by 13% to 15% over fiscal 2005 compared with our
earlier expectations of growth in the 10% to 12% range, excluding potential
additional revenue from new business ventures we may pursue. The multiple orders we have received so far in fiscal 2006
from the U.5 million,
substantially lower than fiscal 2005 levels, reflecting our refinancing
activities in January 2005."

Conference Call
The Company will host a conference call today, December 7, 2005, to
discuss its second quarter results and its outlook for 2006.
(480) 949-9700 x., the
legendary 153-year old company in the global business of safety, security ,
protection and sport, today announced financial results for its first quarter
ended July 31, 2005.5 million,
substantially lower than fiscal 2005 interest expense of $2. The proceeds from the
common stock sale will be used primarily to purchase, at a significant
discount, 9,000,000 warrants from our initial investors. Such forward-looking statements include statements regarding
the Company 's anticipated sales, sales margins, gross margins, expenses,
earnings, earnings per share, capital expenditures, penetration rates for new
and existing markets and new product shipments, for the fiscal year ending
April 30, 2006; the Company's strategies; the demand for the Company's
products; the success of the Company's efforts to achieve improvements in
manufacturing processes; the ability of the Company to introduce any new
products and the success of any new products, including the Model 460XVR
revolver and the Military and Police pistol series; and the strength of our
management team.com

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)
For the Quarters Ended:

Restated
(Note 12)
July 31, 2005 July 31, 2004

Net product and services sales $31 ,849,723 $27,768,875
License revenue 799,977 396 ,750
Cost of products and services sold 22,974,916 18,772,067
Cost of license revenue 75,895 29,158
Gross profit 9,598,889 9,364,400

Operating expenses:
Research and development , net 39,840 37,139
Selling and marketing 3,950 ,277 2,861,250
General and administrative 3,879,841 3,677,654
Environmental expense (3,087,810) --
Total operating expenses 4,782,148 6,576,043

Income from operations 4,816,741 2,788,357

Other income (expense):
Other income (expense ) 42,891 314,993
Interest income 18,504 82,250
Interest expense (549,337) (835,377)
(487,942) (438,134)

Income before income taxes 4,328,799 2,350,223
Income tax expense 1,641,536 883,224
Net income $2,687,263 $1,466,999
Other comprehensive income: -- --
Comprehensive income $2,687,263 $1,466,999

Weighted average number of common
equivalent shares outstanding, basic 32,117,678 31,009,782

Net income per share, basic $0.

combatives firearms

5 million for the quarter ended
October 31, 2005, an increase of 22.9 million spent in the six months ended October 31, 2004 . While we are exploring alternative energy sources and implementing
conservation programs in an effort to reduce the impact, we anticipate our
energy costs will increase by $800,000 for fiscal 2006 over our initial
expectations.

Contacts:
John Kelly, Chief Financial Officer
Smith + Wesson Holding Corp.com

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEETS
As of:

October 31, 2005 April 30, 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $497,694 $4,081,475
Accounts receivable, net of
allowance for doubtful accounts
of $66,522 on October 31, 2005 and
$75,000 on April 30, 2005 19,477,616 18,373,713
Inventories 23,413,728 19,892,581
Other current assets 3,607,764 2,388,286
Deferred income taxes 5,560,354 6,119,561
Income tax receivable 263,660 3,701
Total current assets 52,820,816 50,859,317
Property, plant and equipment, net 20,926,999 16,726,361
Intangibles, net 354,603 364,908
Notes receivable 1,007,565 1,029,812
Deferred income taxes 6,478,008 7,806,702
Other assets 4,529,507 5,205,246
$86,117,498 $81,992,346

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $10,605,985 $12,034,692
Accrued other expenses 4,943,883 4,898,517
Accrued payroll 3,718 ,139 3,220,730
Accrued taxes other than income 619,737 589,449
Accrued profit sharing 770,694 2,403,019
Accrued workers compensation 421,000 536,773
Accrued product liability 2,550,616 2,524,996
Deferred revenue 4,836 15,646
Derivative valuation -- short-term 1,306,800 --
Current portion of notes payable 6,137,839 1,586,464
Total current liabilities 31,079,529 27,810,286
Notes payable 15,197,862 16,028,424
Other non-current liabilities 7,484,969 11,062,459
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.4
Operating Expenses $4.5
Net Income Per Diluted Share $0.9% over the comparable quarter of fiscal 2005.8 percentage points lower than gross profit of 33. Based upon this and
other productivity improvements, we plan to return from our current seven-day
workweek to a five-day workweek during the third quarter of this fiscal year
while increasing production output.5% for the same quarter. Gross margin
improvement is expected to occur over the course of the year, with the bulk
occurring in the second half. 115
lsharp@smith-wesson.

lanny handgun

, Smith + Wesson
Holding Corporation (Amex: SWB), parent company of Smith + Wesson Corp. The results for the quarter
ended October 31, 2005 included $579,011 in stock option expense relative to
our recent election under FAS 123(R), compared with $119,582 for the quarter
ended October 31, 2004.
Gross profit of $10.1%, before the impact of the one-time
insurance recovery last year, to approximately 31% in fiscal 2006. We are very excited at the
prospect of returning Smith + Wesson to the long gun market after a 21 year
absence.com, under the Investor Relations
section.07 $0.
As a percentage of sales and licensing, operating expenses in fiscal 2006,
excluding the environmental adjustment incurred during the first quarter, are
expected to increase slightly compared with fiscal 2005 levels, as sales and
marketing resources and activities increase to support our growth.

Safe Harbor Statement
Certain statements contained in this press release may be deemed to be
forward-looking statements under federal securities laws , and the Company
intends that such forward-looking statements be subject to the safe-harbor
created thereby.
(413) 747-3305

Liz Sharp, VP Investor Relations
Smith + Wesson Holding Corp.05

Weighted average number of common
equivalent shares outstanding , diluted 38,505,557 36,116,350

Net income per share, diluted $0.

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With regard to firearms sold into the sporting
goods channel, during the second quarter, we completed our transition from a
sales network of independent manufacturers representatives to a directly
employed, Smith + Wesson sales force. International sales have increased by over
51% for the first six months of this fiscal year.
Golden added, "We focused heavily during the second quarter on efforts to
diversify and grow our business and have now identified several opportunities.
(413) 747-3305

Liz Sharp, VP Investor Relations
Smith + Wesson Holding Corp.8 $6. Firearms sales for the first quarter of
fiscal 2006 increased by 15.
"Exclusive of the reduction in our environmental reserve, operating
expenses for the first quarter of fiscal 2006 increased by $1. Currently 10 of our revolver models are included on the
list from which approximately 10,000 agents will be authorized to purchase and
carry. This increase is expected to come
from ongoing sales penetration of the existing sporting goods channel; new
sales to domestic law enforcement agencies, the federal government and
international trade channels; new product introductions, including the
Military + Police pistol series; and ramping shipments of the Model 460 XVR
revolver.001 par value,
100,000,000 shares authorized,
32,128,917 shares on July 31, 2005
and 31,974,017 shares on April 30, 2005
issued and outstanding 32 ,129 31,974
Additional paid-in capital 28,398,625 27,744,819
Retained earnings (deficit) 2,001,647 (685,616)
Total stockholders ' equity 30,432,401 27,091,177
$81,893,976 $81,992,346

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

asaa tremendously

Second Quarter Financial Results (in millions, except EPS):
Net product sales were $35.5% over the quarter ended October 31, 2004.5%
increase in revolver sales.5 million at October 31, 2005.19 and $.03 per share. We look forward to
sharing more details of this entry in February.001 par value,
100,000,000 shares authorized,
39,206,647 shares on October 31, 2005 and
31,974,017 shares on April 30, 2005
issued and outstanding 39,207 31,974
Additional paid-in capital 29 ,740,245 27,744,819
Deferred compensation (118,338) --
Retained earnings (deficit) 2,694,024 (685,616)
Total stockholders' equity 32,355,138 27,091,177
$86,117,498 $81,992,346

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended:

Restated
October 31, 2005 October 31, 2004
Cash flows from operating
activities:
Net income $3,379,640 $3,573,409
Adjustments to reconcile net income
to cash used for operating
activities:
Amortization and depreciation 2,052,951 1,095,054
Gain on disposal of IdentiKit (450,515)
Gain on disposal of assets (10,780) (7,405 )
Write-off of patents -- 39,741
Deferred taxes 1,887,901 2,112,714
Provision for losses on accounts
receivable 9,800 6,500
Provision for excess and obsolete
inventory 330,507 385 ,713
Stock option expense 854,511 210,303
Market valuation adjustment stock
warrants 118,800 --
Warrants issued as part of sale of
common stock (1,188,000) --
Changes in operating assets and
liabilities
(Increase) decrease in assets:
Accounts receivable (1,113,703) 5,315,417
Inventories (3,851,654) (1,879,842)
Other current assets (1,219,478) (2,887,847)
Income tax receivable 3,701 (318)
Note receivable 22,247 20,955
Other assets 420,183 1 ,330,090
Increase (decrease) in liabilities:
Accounts payable (1,428,707) (1,028,872)
Accrued payroll 497,409 (904,818)
Accrued profit sharing (1,632,325) (725,696)
Accrued taxes other than income 30,288 (6,390)
Accrued other expenses (73,434) (158,670)
Accrued income taxes 32,388 --
Accrued workers compensation (115,773) 75,000
Accrued product liability 25,620 (314,352)
Other non-current liabilities (3,577,490) (3,513,321)
Derivative valuation 1,306,800 --
Deferred revenue (10,810) (256,887)
Net cash (used for) provided by
operating activities (3,249,408) 2,029,963

Cash flows from investing
activities:
Proceeds from sale of marketable
securities -- 1,518,493
Reductions in collateralized cash
deposits -- 323,531
Payments to acquire patents (2,489) (17,306)
Proceeds from sale of IdentiKit 300,000
Proceeds from sale of property and
equipment 35,901 7,465
Payments to acquire property and
equipment (6,010,360) (3,903,186)
Net cash (used for) provided by
investing activities (5,976,948) (1,771,003)

Cash flows from financing
activities:
Payment on notes payable, Tomkins -- (1,417,782)
Proceeds from loans and notes
payable 4,500,000 --
Proceeds from exercise of options
to acquire common stock 461,481 476,184
Proceeds from sale of common stock 24,612,888 123,307
Repurchase of warrants (23,950,701 ) --
Compensation expense -- Non-employee
stock option (118,338) --
Proceeds from exercise of warrants
to acquire common stock 916,432 --
Payments on loans and notes
payable, unrelated parties (779,187) (559,914)
Net cash provided by (used for)
financing activities 5,642,575 (1,378,205)

Net decrease in cash and cash
equivalents (3,583,781) (1,119,245)
Cash and cash equivalents, beginning
of year 4,081,475 5,510,663
Cash and cash equivalents, end of
period $497,694 $4,391,418

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)

Three Months Ended Six Months Ended
Restated Restated
October 31, October 31, October 31, October 31,
2005 2004 2005 2004

Net product and
services sales $35,536 ,967 $29,078,039 $67,386,690 $56,846,914
License revenue 482,213 526,018 1,282,190 922,768
Cost of products and
services sold 25,469,628 17,210 ,562 48,444,544 35,982,629
Cost of license
revenue 4,750 4,663 80,645 33,821
Gross profit 10,544,802 12,388,832 20,143,691 21,753,232

Operating expenses:
Research and
development, net 102,026 38,184 141,866 75,323
Selling and
marketing 3,770,483 3,160,186 7,720,760 6,021,436
General and
administrative 5,434,206 4,901,362 9,314,047 8,579,016
Environmental
expense -- -- (3,087,810) --
Total operating
expenses 9,306,715 8,099,732 14,088,863 14,675,775

Income from operations 1,238 ,087 4,289,100 6,054,828 7,077,457

Other income(expense):
Other income
(expense) 178,786 (107,687) 221,677 207,306
Interest income 39,651 101,049 58,155 183,299
Interest expense (362,282) (819,261) (911,619) (1,654,638)
(143,845) (825,899) (631 ,787) (1,264,033)

Income before income
taxes 1,094,242 3,463 ,201 5,423,041 5,813,424
Income tax expense 401,865 1,356,791 2,043,401 2,240,015
Net income $692,377 $2,106,410 $3,379,640 $3,573,409
Other comprehensive
income: -- -- -- --
Comprehensive income $692,377 $2,106,410 $3,379,640 $3,573,409

Weighted average
number of common
equivalent shares
outstanding, basic 35,858,826 31,279 ,739 33,988,252 31,144,761

Net income per share,
basic $0.
Net income for the first quarter of fiscal 2006 of $2.9 million after-tax benefit from the reduction in our
environmental reserves relating to property sold by the Company in 2003. In the
domestic law enforcement arena, sales for the first quarter of fiscal 2006
increased by 35. For instance , we have been
notified that our products have been included in the new POW (Personally Owned
Weapons ) program, a new government program that will allow Department of
Homeland Security agents to buy and carry personally owned firearms for duty
and off-duty use.com.

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We continue to improve our production and labor efficiencies, which
resulted in savings of approximately $166,000 over the comparable quarter
ended October 31, 2004.
Consequently, we have restated prior periods to reflect the impact of
SFAS 123(R).2% for the comparable
quarter of fiscal 2005, which contained a favorable product liability
adjustment.7 million,
reflecting the benefit of debt refinancing activities in January 2005.5 million, or between $.19 and $.20 per diluted share. The
conference call will be Web cast and is scheduled to begin at 5:00pm Eastern
Time (2:00pm Pacific).smithandwesson. The Company also
licenses shooter protection, knives, apparel, footwear and other accessory
lines.

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Sales and marketing expenses increased as
expected due to our investment in a NASCAR program and marketing programs
supporting the launch of the Military + Police pistol series.20 per diluted share.

About Smith + Wesson
Smith + Wesson Holding Corporation, through its subsidiary Smith + Wesson
Corp.6
Net Income $2. We have driven growth
across all channels in our key handgun business with the staffing of several
key sales positions.smith-wesson. The Company cautions that these statements are qualified by
important factors that could cause actual results to differ materially from
those reflected by such forward-looking statements. Such factors include the
demand for the Company's products, the Company's growth opportunities, the
ability of the Company to obtain operational enhancements, the ability of the
Company to increase its production capacity, the ability of the Company to
engage additional key employees, and other risks detailed from time to time in
the Company's reports filed with the SEC, including its Form 10-K Report for
the fiscal year ended April 30, 2005.

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The adoption of SFAS 123(R) resulted in additional stock
compensation expense of $579,011 for the quarter ended October 31, 2005
compared with stock compensation expense of $119,582 for the quarter ended
October 31, 2004.
Michael Golden, President and CEO, said , "I am pleased with the progress
we made this quarter on several fronts. No other audio replay will
be available. The Company also
licenses shooter protection, knives, apparel, footwear and other accessory
lines.
This increase reflects additional benefit experienced during the first quarter
of fiscal 2006 from the reduction in environmental reserves maintained by the
Company.33 per
share during certain periods until mid-April 2006.
(480) 949-9700 x.04

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

ccw handgun

5 million
and converted approximately $2.6 million compared with $1.com.

Safe Harbor Statement
Certain statements contained in this press release may be deemed to be
forward-looking statements under federal securities laws, and the Company
intends that such forward-looking statements be subject to the safe-harbor
created thereby.7%

Increases Fiscal 2006 Net Income Estimate

SPRINGFIELD, Mass. Without the adjustment for product liability, gross margin for
the first quarter of fiscal 2005 would have been 31.

lanny unsighted

1 million, or $.2 million over operating expenses of $8.0 million, or $2. This is due to our M+P start-up, launch, and
production ramp-up costs, as well as the brunt of the increased energy costs. The Company is based in Springfield, Mass.04

John Kelly, Chief Financial Officer, said, "Net product sales and
services for the quarter ended July 31, 2005 increased by 14. As expected,
capital expenditures for the first quarter of fiscal 2006 increased by
$1.
Michael Golden, President and CEO, said, "Our results this quarter reflect
that we are solidly on track with our strategic plan.
"We continue to experience substantial operating improvements in our
Springfield factory in the areas of manufacturing processes, supply chain
management, and lean manufacturing practices.1% in fiscal 2005, prior to the impact of
the insurance recovery, to approximately 32% in fiscal 2006.

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Without the impact of that one-time insurance event, gross profit for the
quarter ended October 31, 2004 would have been $8. We also expect that the international trade
channels will continue to yield higher year-over-year sales levels, supported
by new product introductions, including the M+P pistol series. Our current
expectation includes an anticipated compensation expense relative to
SFAS 123(R) of $1., with manufacturing
facilities in Springfield and Houlton, Maine.

Smith + Wesson Holding Corporation Reports First Quarter Fiscal 2006 Financial Results

The $1. This was
3. The adoption of SFAS 123(R) resulted in additional stock
compensation expense of $275,500 for the quarter ended July 31, 2005 compared
with $90,721 for the quarter ended July 31, 2004.6 million to $2. The launch will be
supported by our newly hired , very experienced, law-enforcement sales
management team, which has already begun to impact our performance in that
market. Net income expectations
include anticipated compensation expense relative to SFAS 123(R) of
$1.

marksmanship shotgun

In November, efficiencies allowed us to return to a
five-day work schedule throughout most of our machining operations, from the
seven-day schedule we implemented in January of this year.
As a percentage of sales and licensing, operating expenses in fiscal 2006,
excluding the favorable environmental adjustment in the first quarter, are
still expected to increase slightly compared with prior year levels as we
expand our sales and marketing resources and activities. The
Company cautions that these statements are qualified by important factors that
could cause actual results to differ materially from those reflected by such
forward-looking statements. 115
lsharp@smith-wesson.7% over the
comparable quarter in fiscal 2005.7 million, or $.07 per
diluted share, was $1. The reduction in
year-over-year gross margin for fiscal 2006 resulted from a combination of
increased depreciation expense and start-up production costs related to the
launch of new products . We will continue to drive strong
growth in pistols by preparing for the launch this Fall of our new Military +
Police series, a critical component in our ongoing growth strategy to increase
pistol sales to the global law enforcement community. Net income for fiscal 2006 is now expected to increase to between
$6.9 million after-tax adjustment was made because remediation
was completed on a parcel of previously owned land, relieving the Company of
any environmental liability. Previous estimates had anticipated only a
partial reduction of approximately $1. The Company will maintain an audio
replay of this conference call on its website for a period of time after the
call.

About Smith + Wesson
Smith + Wesson Holding Corporation, through its subsidiary Smith + Wesson
Corp. The Company is based in Springfield, Mass.

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2%

FY 2006 Revenue Growth Forecast Increased to Between 13% - 15%

Announces Initial Entry into Long Gun Market Segment

SPRINGFIELD, Mass.3% increase in pistol sales as well as a 14.1 million for the six months ended
October 31, 2004.5% growth rate in
firearms sales was fueled by a follow-on order to the U."

Accounting Matters
Results for the quarter ended October 31, 2004 have been restated to
correct the accounting for certain stock awards under APB 25 and the adoption
of SFAS 123(R )., is one of the world's largest manufacturers of quality handguns, law
enforcement products and firearm safety/security products.09 $0.

First Quarter Financial Results (in millions , except EPS):

QUARTER ENDED
July 31, 2005 July 31, 2004

Net Product Sales and Services $31. The Company maintains a $17. We continue to locate opportunities
in the federal government and military arenas.
Golden continued, "We recently completed a $26."
Golden concluded, "We are pleased with our progress in growing revenue,
gaining deeper market penetration in several key areas, achieving improved
operational efficiencies and getting our full management team in place.

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1 million for the
comparable quarter in 2004. In June of the
current fiscal year, we announced that we intended to early adopt Statement of
Financial Accounting Standards No.
Net income for fiscal 2006 is still expected to increase to between
$6.
Though we have increased our sales growth expectations, rising utility costs
will offset the benefit of this increased sales volume.9 million, or $. The conference
call may include forward-looking statements.
Net cash outflow for the quarter ended July 31, 2005 was $2."

Accounting Matters
Results for the quarter ended July 31, 2004 have been restated to correct
the accounting for certain stock awards under APB 25 and the adoption of SFAS
123(R).5 million.16 million private
placement to institutional investors structured to alleviate a substantial
overhang of warrants, which we believe , if left unaddressed, would have been
dilutive to our stockholders in the future. This entire private placement transaction will be
accretive to our earnings per share in the future, and is clearly in the best
long-term interest of our stockholders.

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Net income for the quarter ended October 31, 2005 was $692,377, or
$.1 million in one-time insurance benefits, which
on an after-tax basis increased net income in that previous quarter by
approximately $2. On a
year-over-year basis , we increased quarterly net product sales by $6. 123(R), "Share-based Payment (Revised
2004)" (SFAS 123(R)) using the modified retrospective application method. We believe the launch of
our new Military + Police (M+P) pistol series, announced earlier this week,
will help support continued strong growth in each of these markets, as well as
the law enforcement market.S. Our adjusted gross margin expectation of 31% for fiscal 2006
incorporates this higher, anticipated energy expense. We expect our
interest expense in fiscal 2006 to be approximately $1.5 million, or between $.smith-wesson.06 $0.4%.

Excluding start-up costs associated with initial
shipments of our award-winning Model 460XVR revolver , production efficiencies
overall continued to make steady progress. This increase related primarily to the
staffing of several key executive and sales management positions, as well as
an increase in marketing expenses, including our NASCAR sponsorship, which
began in the fourth quarter of fiscal 2005.
Gross profit as a percentage of product sales and licensing revenue is
still expected to increase from 29. Interest
expense in fiscal 2006 is expected to be approximately $1.

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01 per diluted share.3 million, or 27.
Operating expenses of $9. We have received three orders this year from the U. This change, coupled with others, will begin to contribute to
improved gross margins beginning in the third quarter of fiscal 2006. government give us confidence that our sales to the federal
government will continue to grow. The
long-gun market presents a tremendous opportunity to leverage the historic
Smith + Wesson brand name and to further develop our reputation as a company
in the business of safety, security, protection and sport. Such factors include the demand for the Company's
products , the Company's growth opportunities, the ability of the Company to
obtain operational enhancements , the ability of the Company to increase its
production capacity, the ability of the Company to engage additional key
employees, and other risks detailed from time to time in the Company's reports
filed with the SEC, including its Form 10-K Report for the fiscal year ended
April 30, 2005.02 $0. Company Posts Year-Over-Year Sales Growth of 14.0 million for the quarter ended July 31, 2004.
The increase in capital expenditures related primarily to planned equipment
upgrades in both the pistol and revolver production areas, including
preparations for the upcoming ramp of the new Military + Police pistol series
in November.5 million at July 31, 2005.

Updated Outlook for Fiscal 2006
The Company continues to expect net product sales for fiscal 2006 to grow
by 10 percent to 12 percent over fiscal 2005, excluding potential additional
revenue from any new business ventures.7 million. No other audio replay will be available.

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS ' EQUITY
(UNAUDITED)
For the Quarter Ended July 31, 2005

Additional Retained Total
Paid-in Earnings Stockholders'
Capital (Deficit) Equity

Balance at April 30, 2005 $27,744 ,819 $(685,616) $27,091,177

Payment for warrants exercise 178,000 178,000

Exercise of warrants 26,403 26,433

Exercise of employee stock
options 173,903 174,028

Stock option expense 275,500 275,500

Net income for the
quarter ended
July 31, 2005 2 ,687,263 2,687,263

Balance at July 31, 2005 $28,398,625 $2,001,647 $30,432 ,401

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

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2% over net product sales of $29.1 million
for the comparable quarter of 2004.02 per diluted share , as compared with $2. The impact of that option expense election on the
quarter ended October 31 , 2005 was to reduce net income by approximately
$0. We also incurred approximately $484,000 in consulting fees
relative to the implementation of Sarbanes-Oxley 404 compliance. Response to this exciting new polymer pistol
series, designed specifically for law enforcement and military users, has been
tremendously positive. We have
adjusted our gross margin expectation down slightly compared with previous
estimates, due entirely to oil and natural gas cost increases that have
occurred as a result of Hurricane Katrina. The Smith + Wesson Academy is
America's longest-running firearms training facility for America's public
servants. For more information, call (800) 331-0852 or log on to
http: //www.02 $0.5%. The Company also incurred
$250,000 in additional one-time audit fees for the quarter ended July 31, 2005
related to the adoption of SFAS 123(R).
The Company is increasing its expectations for net income for the fiscal
year 2006. In order to remove
the potential dilutive effects of the warrants issued to the new institutional
investors, we simultaneously secured an agreement with several of our original
investors, including the original warrant holders, to purchase from them an
equivalent number of shares, at the same price, in the event the new investor
warrants are exercised.com,
under the Investor Relations section.07 $0.

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Quarters Ended:

Restated
(Note 12)
July 31, 2005 July 31, 2004
Cash flows from operating activities
Net income $2,687,263 $1,466,999
Adjustments to reconcile net income to
cash used for operating activities:
Amortization and depreciation 1,118,657 542,588
Gain on disposal of Identi-Kit -- (450,515)
Gain on disposal of assets (5,595) (18,780 )
Deferred taxes 1,491,286 775,672
Provision for losses on accounts
receivable 4,900 3 ,300
Provision for excess and obsolete
inventory 257,299 176,727
Stock option expense 275,500 90,721
Changes in operating assets and
liabilities
(Increase) decrease in assets:
Accounts receivable 388,192 3,542,054
Inventories (3,106,666) (1,877,727)
Other current assets (914,591) (596,587)
Income tax receivable 3,701 89,401
Note receivable 11,040 10,399
Other assets 277,968 331,335
Increase (decrease) in liabilities:
Accounts payable (3,182,055 ) (2,233,262)
Accrued payroll (30,376) (1,282,072 )
Accrued profit sharing 367,331 (1,605,243)
Accrued taxes other than income (44,822) (19,156)
Accrued other expenses 484,063 (487,499)
Accrued income taxes 44,419 --
Accrued workers compensation 36,691 50,000
Accrued product liability 17,850 (158,636)
Other non-current liabilities (3,233,834) (414,898)
Deferred revenue (10,810) (217,451)
Net cash used for operating activities (3,062,589) (2,282,630)

Cash flows from investing activities:
Proceeds from sale of marketable
securities -- 1,537 ,273
Reductions in collateralized cash
deposits -- 42,693
Payments to acquire patents -- (17,306)
Proceeds from sale of Identi-Kit -- 300,000
Proceeds from sale of property and
equipment 22,310 --
Payments to acquire property and
equipment (2,299,620) (692,372)
Net cash (used for) provided by
investing activities (2,277,310) 1,170,288

Cash flows from financing activities:
Payment on notes payable, Tomkins -- (700,946)
Proceeds from loans and notes payable 2,500,000 --
Proceeds from exercise of options to
acquire common stock 378,461 103,882
Payments on loans and notes payable,
unrelated parties (388,051) (279,076)
Net cash provided by (used for)
financing activities 2,490,410 (876,140)

Net decrease in cash and cash equivalents (2,849,489 ) (1,988,482)
Cash and cash equivalents, beginning
of year 4,081,475 5,510,663
Cash and cash equivalents, end of period $1 ,231,986 $3,522,181

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

Training facilities, reference materials and associated links will be included .

survivability advisement

9%.3 million, or 35% of that amount, into gross
margin.
government for shipment to Afghanistan , which reflects the effectiveness of a
newly established segment of the Smith + Wesson sales team that focuses on
growing our business with the military and federal government. We believe this change will continue to
drive positive results, reflected in sequential improvement in gross profit
for the third and fourth quarters of fiscal 2006.
"In addition, we completed shipment during the first quarter of fiscal
2006 on our first government contract win in over 15 years. Overall, our progress is right
on track with the objectives we set for fiscal 2006, and we expect our results
to become more visible in the second half of the year.

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED BALANCE SHEETS
As of:

July 31, 2005 April 30, 2005
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $1,231,986 $4,081,475
Accounts receivable, net of allowance
for doubtful accounts of $61,622 on
July 31, 2005 and $75,000 on
April 30, 2005 17,980,621 18,373,713
Inventories 22,741 ,948 19,892,581
Other current assets 3,302,877 2,388,286
Deferred income taxes 5,790,038 6,119,561
Income tax receivable -- 3,701
Total current assets 51,047,470 50,859,317
Property, plant and equipment, net 18,133,945 16,726,361
Intangibles, net 358,553 364,908
Notes receivable 1,018,772 1,029,812
Deferred income taxes 6,644,939 7,806,702
Other assets 4,690,297 5,205,246
$81,893,976 $81,992,346

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $8,852,637 $12,034,692
Accrued other expenses 5,382,580 4,898,517
Accrued payroll 3,190,354 3,220,730
Accrued taxes other than income 544,627 589,449
Accrued profit sharing 2,770,350 2,403,019
Accrued workers compensation 573,464 536,773
Accrued product liability 2,542,846 2,524,996
Accrued income taxes 44,419 --
Deferred revenue 4,836 15,646
Current portion of notes payable 4,111,807 1,586,464
Total current liabilities 28,017,920 27,810,286
Notes payable 15,615,030 16,028,424
Other non-current liabilities 7,828,625 11,062,459
Commitments and contingencies (Note 9)
Stockholders ' equity :
Preferred stock, $.

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Firearms sales for the second quarter of
fiscal 2006 grew 25. The increase
in firearm sales reflected a 54."
"We made notable operating improvements in our Springfield factory in the
areas of manufacturing processes, supply chain management, and lean
manufacturing practices. This increase is
expected to come from improved sales penetration of the current sporting goods
channel and new sales in law enforcement, fueled by enhancements to our sales
organization structure and the introduction of the M+P pistol series in
December 2005 .
We have decided to enter a segment of the long-gun market and plan to
introduce our first new products in that category at SHOT Show, our industry's
major event, at the Las Vegas Convention Center in February 2006.11

Weighted average
number of common
equivalent shares
outstanding, diluted 39,662,462 36,329,973 39,290,302 36,278,796

Net income per share,
diluted $0.2 million, or $.5 million net income for the quarter ended July 31, 2004
included a $506,000 reduction in product and municipal liability reserves as
well as a $450,000 gain from the sale of the Identi-Kit business. 123(R), "Share-based Payment (Revised
2004 )" (SFAS 123(R)) using the modified retrospective application method.
Consequently, the Company has restated prior periods to reflect the impact of
SFAS 123(R). We expect to see
more orders like this in the near future. That contract, along with the
continued general success of our Sigma pistol line, contributed to substantial
year-over-year pistol growth of nearly 69%. The Smith + Wesson Academy is
America's longest-running firearms training facility for America's public
servants .

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06 per diluted share.8%, for
the comparable quarter of 2004. The gross profit for the quarter ended
October 31, 2004 included the $4. The transition
went extremely well, with production rates for the month of November meeting,
and in some cases exceeding, the levels we were achieving under the seven-day
schedule. Such forward-looking statements include statements regarding
the Company 's anticipated sales, sales margins, gross margins, expenses,
including anticipated energy costs, earnings, capital expenditures,
penetration rates for new and existing markets and new product shipments , for
the fiscal year ending April 30, 2006; the Company's strategies; the demand
for the Company 's products; the success of the Company's efforts to achieve
improvements in manufacturing processes; the ability of the Company to
introduce any new products and the success of any new products, including the
Military and Police pistol series and long guns(rifles and shotguns).03 per diluted share, higher than for
the comparable quarter of fiscal 2005.
"Gross profit for the quarter ended July 31 , 2005 was 29. Labor efficiencies for the first
quarter of fiscal 2006 improved sequentially by 2 .0 million line of credit in order to
fund its working capital needs. Sales in the sporting goods channel increased 7. The $1., with manufacturing
facilities in Springfield and Houlton, Maine.

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Smith + Wesson Holding Corporation Reports Second Quarter Fiscal 2006 Financial Results

5 million , or 29. Finally, we
incurred $398,500 in payroll tax expense relative to the exercise of warrants
by, and repurchase of warrants from, two of our original investors during the
second quarter of fiscal 2006. First, our 25. The Company will maintain an audio replay of this conference call on
its website for a period of time after the call.07 $0.10 $0.10

7 $1.9 million and $7. For more information, call (800) 331-0852 or log on to
http://www.

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, the
legendary 153 -year old company in the global business of safety, security,
protection and sport, today announced financial results for the second quarter
ended October 31, 2005. In addition, results for the quarter ended
October 31, 2004 included $4.3%, for the quarter ended
October 31, 2005 was lower than gross profit of $12. Capital expenditures for the six months ended
October 31, 2005 were $6.1 million , higher than the
$3. The conference call will be Web
cast and is scheduled to begin at 5:00pm Eastern Time (2:00pm Pacific).smith-wesson.8
Gross Profit $9.6 $9."
In June 2005, the Company announced the early adoption of Statement of
Financial Accounting Standards No.5% over the comparable quarter in fiscal 2005, while our
international sales revenue, which is also dominated by law enforcement,
increased by 25. The conference call may include forward-looking statements.

Contacts:
John Kelly, Chief Financial Officer
Smith + Wesson Holding Corp.

This category will have anything associated with firearms education or training.

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Net cash outflow from operations for the six months ended October 31, 2005
was $3.S. We believe this new organization is
beginning to have positive impact.9 million and $7.001 par value,
20,000,000 shares authorized, 0 shares
on October 31, 2005 and
April 30, 2005 issued and outstanding -- --
Common stock, $.7 million in net income for the quarter ended July 31, 2005
includes a $1. The
first quarter of fiscal 2006 also includes a $250,000 one-time charge for
audit fees relative to the adoption of FAS 123(R) and stock option expense of
$275,500.8 million
compared with $2.3 million from $692,000 for first quarter of fiscal 2005. In
the near future, we expect to see continuing improvements in all of these
areas, bolstered by increasing production volumes of our new 460XVR revolver
and the launch of the M+P pistol series during the third quarter of this
fiscal year.

SMITH + WESSON HOLDING CORPORATION and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
For the Quarter Ended July 31, 2005

Preferred Stock Common Stock
Shares Amount Shares Amount

Balance at April 30, 2005 -- $-- 31,974,017 $31,974

Payment for warrants exercise

Exercise of warrants 29,700 30

Exercise of employee stock
options 125,200 125

Stock option expense

Net income for the quarter
ended July 31, 2005

Balance at July 31, 2005 -- $-- 32,128,917 $32,129

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

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4 million, or 41.1 million in one-time insurance benefits. We had
short-term borrowings of $4.
Estimated gross profit , as a percentage of product sales and licensing
revenue, is expected to increase from 29. Generally , electricity rates are
expected to nearly triple by January 2006 compared with pre-Hurricane Katrina
levels. The
live audio broadcast and replay of the conference call can be accessed on the
Company 's Web site at http://www., Smith + Wesson
Holding Corporation (Amex: SWB), parent company of Smith + Wesson Corp.8 $27.
"The $2.3%.3 million over
the comparable quarter in fiscal 2005 . The Company had incurred short-term borrowing
on that line of $2.5%
year-over-year, due partially to initial shipments of our 460XVR. Based upon our performance in the first quarter and the feedback
we are receiving about our new products, we are confident in our double-digit
revenue growth and our increased net income guidance for the 2006 fiscal
year. The live audio broadcast and replay of the conference
call can be accessed on the Company's Web site at http://www.08 $0 .

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