Financial Analysis

14. Commitments and Contingencies Litigation In January 2018, Gemini Technologies, Incorporated, or Gemini, commenced an action against us in the U.S. District Court for the District of Idaho. The complaint alleges, among other things, that we breached the earn-out and other provisions of the asset purchase agreement and ancillary agreements between the parties in connection with our acquisition of the Gemtech business from Gemini. The complaint seeks a declaratory judgment interpreting various terms of the asset purchase agreement and damages in the sum of $ 18.6 million. In November 2019, we filed an answer to Geminis complaint and a counterclaim against Gemini and its stockholders at the time the asset purchase agreement was signed. Plaintiffs amended their complaint to add a claim of fraud in the inducement. In September 2021, Gemini filed a motion for summary judgment seeking to dismiss our counterclaim. In June 2022, the district court denied Gemini's motion for summary judgment. Gemini filed a second motion for summary judgment, and in August 2023, the district court again denied Geminis motion. In November 2023, we entered into a settlement agreement with plaintiffs on the indemnity and counterclaims. On the same day, plaintiffs filed a motion for leave, seeking to file a second amended complaint. In January 2024, the district court allowed plaintiffs amended allegations of fraud, and denied without prejudice their motion to add punitive damages. In August 2025, we fi …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

4. Notes and Loans 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 provided for a revolving line of credit of $ 100.0 million at any one time. On April 28, 2023, we entered into an amendment to the Amended and Restated 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 our plan to move our headquarters and significant elements of our operations to Maryville, Tennessee in 2023, or the Relocation. The revolving line bore interest at either the Base Rate (as defined in the Amended and Restated Credit Agreement) or the Adjusted Term SOFR rate, plus an applicable margin based on our consolidated leverage ratio. On October 3, 2024, we entered into an amended and restated credit agreement, or the Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement is currently unsecured; however, should any Springing Lien Trigger Event (as defined in the Second Amended and Restated Credit Agreement) occur, we and c …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

13. Income Taxes Income tax expense consisted of the following (in thousands): For the Year Ended April 30, 2026 2025 2024 Current: Federal $ 590 $ 6,875 $ 6,786 State 86 1,977 2,713 Total current 676 8,852 9,499 Deferred: Federal 5,866 ( 2,638 ) 2,558 State 47 ( 394 ) ( 1,701 ) Total deferred 5,913 ( 3,032 ) 857 Total income tax expense $ 6,589 $ 5,820 $ 10,356 The effective income tax rate for the year ended April 30, 2026 differs from the statutory federal income tax rate as follows: For the Year Ended April 30, 2026 $ % U.S. Federal Statutory Tax Rate $ 5,265 21.0 % State income taxes, net of federal tax effects (a) 189 0.8 % Effect of cross-border tax laws Foreign derived intangible income (FDII) deductions ( 24 ) - 0.1 % Tax credits Research & development and fuel ( 312 ) - 1.2 % Nontaxable or nondeductible items 441 1.8 % Other adjustments Deferral adjustment for stock compensation 988 3.8 % Other 42 0.2 % Total income tax expense $ 6,589 26.3 % (a) State taxes in California, Louisiana, Minnesota, North Carolina, and Texas make up the majority (greater than 50%) of the tax effect in this category. Prior to the adoption of ASU 2023-09, the following table presents a reconciliation of income tax expense from continuing operations at the statutory rate of 21 % to the expense in the consolidated financial statements (in thousands): For the Year Ended April 30, 2025 2024 Federal income taxes expected at the statutory rate $ 4,041 $ 10,861 State income taxes, net of fede …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign 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 adopted ASU 2023-09 in the fourth quarter of fiscal 2026. The adoption of this guidance resulted in additional financial statement disclosures and had no impact to our consolidated financial condition, results of operations, or cash flows. See Note 13 - Income Taxes , which includes the disclosures resulting from our adoption of this guidance. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which requires entities t …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

12. 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 $ 2.3 million, $ 2.4 million, and $ 2.7 million for the fiscal years ended April 30, 2026, 2025, and 2024, 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 2026, we intend to contribute approximately $ 5.2 million, which has been recorded in general and administrative costs and will be funded during fiscal 2027. We contributed $ 4.6 million and $ 9.1 million for the fiscal years ended April 30, 2025 and 2024, respectively. Contributions are funded after the fiscal year-end. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

15. Restructuring As a result of the Relocation, ($ 509,000 ), $ 1.2 million, and $ 7.1 million of restructuring charges, net of adjustments to our prior estimates, were recorded in fiscal 2026, 2025, and 2024, respectively. The following table summarizes restructuring charges by line item for fiscal 2026, 2025 and 2024 (in thousands): For the Year Ended April 30, 2026 2025 2024 Cost of sales $ ( 137 ) $ 1,063 $ 2,116 Selling, marketing, and distribution ( 39 ) 132 2,974 General and administrative ( 333 ) ( 22 ) 1,963 Total restructuring charges, net $ ( 509 ) $ 1,173 $ 7,053 The components of the restructuring charges recorded in our consolidated statements of income are as follows (in thousands): For the Year Ended April 30, 2026 2025 2024 Consulting and outside services $ 377 $ 1,462 $ 992 Employee relocation (a) ( 316 ) 520 887 Employee relations 113 2,011 Office rent and equipment 2,298 Public relations 904 Freight 199 Severance and employee-related benefits (a) ( 570 ) ( 922 ) ( 238 ) Total restructuring charges, net $ ( 509 ) $ 1,173 $ 7,053 (a) Recorded in accrued payroll and incentives. The following table summarizes the activity in the severance and employee-related benefits and relocation accruals for fiscal 2026 and fiscal 2025 (in thousands): Severance and employee- related benefits Relocation Total (a) Accrual at April 30, 2024 $ 5,527 $ 828 $ 6,355 Charges ( 922 ) 520 ( 402 ) Cash payments and settlements ( 3,233 ) ( 890 ) ( 4,123 ) Accrual at April 30, 2025 1, …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

16. Segment Reporting We operate our business as one operating segment, which also represents one reportable segment: firearms. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. The firearms segment is engaged in the design, manufacture, and sale of a variety of firearms and firearm-related products. Our Chief Executive Officer has been identified as the chief operating decision maker (CODM). The CODM manages and allocates resources on a consolidated basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance and allocating resources, which is reviewed on a consolidated basis. As our CODM evaluates the financial performance of our firearms segment on a consolidated basis, the measure of segment performance is net income, as reflected in the consolidated statements of income. The CODM uses net income to allocate resources on a consolidated basis, which enables the CODM to assess both the overall level of resources available and optimize distribution of resources in line with our long-term strategic goals. Our segment net sales, segment significant expenses, and segment profit, as provided to the CODM, align to the captions presented on our consolidated statements of income. As we manage our assets on a consolidated basis, the measure of segment assets is total assets, as ref …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

2. Significant Accounting Policies 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 Smith & Wesson Online, 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, 2026 and 2025 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 reclassi …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

11. Stockholders Equity Treasury Stock 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, or the 2023 Authorization. During fiscal 2025, we purchased 1,531,763 shares of our common stock for $ 21.4 million under the 2023 Authorization. The 2023 Authorization expired on September 19, 2024. On September 5, 2024, 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 from September 20, 2024 through September 20, 2025, or the 2024 Authorization. As of April 30, 2026, we had repurchased 312,310 shares of our common stock for $ 4.1 million under the 2024 Authorization. On September 15, 2025, 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 from September 21, 2025 through September 21, 2026, or the 2025 Authorization. As of April 30, 2026, we had not repurchased any shares of our common stock under the 2025 Authorization. During the year ended April 30, 2026, there were no common stock repurchases. 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 Apri …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

(8) Commitments and Contingencies: Litigation In January 2018, Gemini Technologies, Incorporated, or Gemini, commenced an action against us in the U.S. District Court for the District of Idaho, or the District Court. The complaint alleges, among other things, that we breached the earn-out and other provisions of the asset purchase agreement and ancillary agreements between the parties in connection with our acquisition of the Gemtech business from Gemini. The complaint seeks a declaratory judgment interpreting various terms of the asset purchase agreement and damages in the sum of $ 18.6 million. In November 2019, we filed an answer to Geminis complaint and a counterclaim against Gemini and its stockholders at the time the asset purchase agreement was signed. Plaintiffs amended their complaint to add a claim of fraud in the inducement. In September 2021, Gemini filed a motion for summary judgment seeking to dismiss our counterclaim. In June 2022, the District Court denied Gemini's motion for summary judgment. Gemini filed a second motion for summary judgment, and in August 2023, the District Court again denied Geminis motion. In November 2023, we entered into a settlement agreement with plaintiffs on the indemnity and counterclaims. On the same day, plaintiffs filed a motion for leave, seeking to file a second amended complaint. In January 2024, the District Court allowed plaintiffs amended allegations of fraud, and denied without prejudice their motion to add punitive damage …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

(3) Notes and Loans 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 provided for a revolving line of credit of $ 100.0 million at any one time. On April 28, 2023, we entered into an amendment to the Amended and Restated 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 our plan to move our headquarters and significant elements of our operations to Maryville, Tennessee in 2023, or the Relocation. The revolving line bore interest at either the Base Rate (as defined in the Amended and Restated Credit Agreement) or the Adjusted Term SOFR rate, plus an applicable margin based on our consolidated leverage ratio. On October 3, 2024, we entered into an amended and restated credit agreement, or the Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement is currently unsecured; however, should any Springing Lien Trigger Event (as defined in the Second Amended and Restated Credit Agreement) occur, we and …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Standards In December 2023, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2023-09, Improvements to Income Tax Disclosures , which requires entities to disclose in their rate reconciliation table additional categories of information about federal, state, and foreign 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 our 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 …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

(9) Segment Reporting: We operate our business as one operating segment, which also represents one reportable segment: firearms. Therefore, our operating results are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. The firearms segment is engaged in the design, manufacture, and sale of a variety of firearms and firearm-related products. Our Chief Executive Officer has been identified as the chief operating decision maker, or CODM. The CODM manages and allocates resources on a consolidated basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating our performance and allocating resources, which is reviewed on a consolidated basis. As our CODM evaluates the financial performance of our firearms segment on a consolidated basis, the measure of segment performance is net income, as reflected in our consolidated statements of operations. The CODM uses net income to allocate resources on a consolidated basis, which enables the CODM to assess both the overall level of resources available and to optimize the distribution of resources in line with our long-term strategic goals. Our segment net sales, segment significant expenses, and segment profit, as provided to the CODM, align to the captions presented on our consolidated statements of operations. As we manage our assets on a consolidated basis, the measure of segment assets is to …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

(7) Stockholders Equity: Treasury Stock 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, or the 2023 Authorization. During fiscal 2025, we purchased 1,531,763 shares of our common stock for $ 21.4 million under the 2023 Authorization. The 2023 Authorization expired on September 19, 2024. On September 5, 2024, 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 from September 20, 2024 through September 20, 2025, or the 2024 Authorization. As of October 31, 2025, we had repurchased 312,310 shares of our common stock for $ 4.1 million under the 2024 Authorization. On September 15, 2025, 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 from September 21, 2025 through September 21, 2026, or the 2025 Authorization. As of October 31, 2025, we had not repurchased any shares of our common stock under the 2025 Authorization. During the three and six months ended October 31, 2025 , there were no common stock repurchases. During the three months ended October 31, 2024 , we repurchased a total of 753,631 shares of our common stock for $ 9.8 mil …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing