Smith & Wesson Brands (SWBI) 8-K/A Financial Statements and Exhibits

EXHIBIT 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     On January 3, 2007, Smith & Wesson Holding Corporation (the Company) completed its previously announced acquisition of Bear Lake Acquisition Corp. and its subsidiaries, including Thompson/Center Arms Company, Inc., for $102,000,000 in cash.

     The following tables show summary unaudited pro forma condensed combined statements of operations as if the Company and Bear Lake Acquisition Corp. had been combined as of May 1, 2005 and for the unaudited pro forma condensed combined balance sheet as if the Company and Bear Lake Acquisition Corp. had been combined as of October 31, 2006. The unaudited pro forma condensed combined financial information of the Company and Bear Lake Acquisition Corp. is based on estimates and assumptions, which have been made solely for purposes of developing such pro forma information. The estimated pro forma adjustments arising from these acquisitions are derived from their respective preliminary purchase price allocations.

     The pro forma data are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if each transaction had been consummated as of May 1, 2005 or October 31, 2006, nor are the data necessarily indicative of future operating results or financial position.

     FOOTNOTE REFERENCE TO THE COLUMNS ON THE PRO FORMA CONDENSED COMBINED STATEMENTS:

     (A) As reported in the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended April 30, 2006, as filed with the SEC, or the Company’s quarterly report on Form 10-Q for the six months ended October 31, 2006, as filed with the SEC.

     (B) Derived from Bear Lake Acquisition Corp.’s unaudited financial statements for the period from April 1, 2005 through March 31, 2006. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair presentation of the results of operations for the period presented have been included.

     (C) Derived from Bear Lake Acquisition Corp.’s unaudited financial statements for the period from April 1, 2006 through September 30, 2006. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair presentation of the results of operations for the period presented have been included.

SMITH & WESSON HOLDING CORPORATION and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
As of:

	Historical			Historical
	Smith & Wesson			Bear Lake			Pro forma				Pro Forma
	October 31, 2006 (A)			September 30, 2006 (C)			Adjusments				Combined
ASSETS
Current assets:
Cash and cash equivalents	$	654,434		$	934,786						$	1,589,220
Accounts receivable, net of allowance for doubtful accounts		31,586,550			14,315,870							45,902,420
Inventories		21,619,744			12,418,817			3,000,000		(13)		37,038,561
Other current assets		2,316,452			1,383,778							3,700,230
Deferred income taxes		3,346,684			846,146			(941,600	)	(17)		3,251,230
Income tax receivable		1,233,749			974,214							2,207,963
Assets held for sale		—			175,436			(175,436	)	(7)		—
Total current assets		60,757,613			31,049,047			2,824,564				94,631,224
Property, plant and equipment, net		31,611,333			7,101,939			(1,261,939	)	(12)		37,451,133
Intangibles, net		424,505			6,758,634			93,501,938		(8)		100,685,077
Deferred income taxes		7,358,194			—							7,358,194
Other assets		4,662,161			1,242,268			(55,595	)	(1)		5,848,834
	$	104,813,806		$	46,151,888		$	94,067,368			$	245,033,062
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,428,999		$	3,737,148							15,166,147
Accrued other expenses		3,922,840			2,061,001			1,250,000		(11, 14)		7,233,841
Accrued payroll		4,988,750			—			175,000		(15)		5,163,750
Accrued taxes other than income		1,177,493			158,095							1,335,588
Accrued profit sharing		2,059,805			600,000							2,659,805
Accrued workers’ compensation		404,264			—							404,264
Accrued product liability		2,293,616			1,238,832			221,000		(16)		3,753,448
Accrued warranty		1,416,780			231,199							1,647,979
Deferred revenue		4,836			—							4,836
Current portion of notes payable		6,245,335			9,600,690			(9,162,708	)	(2)		6,683,317
Total current liabilities		33,942,718			17,626,965			(7,516,708	)			44,052,975
Notes payable, net of current portion		13,452,502			1,746,064			25,971,990		(3, 9)		41,170,556
Convertible Debt, inclusive of issuance costs		—			—			75,756,422		(10)		75,756,422
Deferred tax liability		—			5,525,450			20,269,619				25,795,069
Notes payable to former stockholders, net of discounts and current amounts		—			11,334,277			(11,334,277	)	(4)		—
Other non-current liabilities		7,625,513			839,454							8,464,967
Mandatorily redeemable series A preferred stock		—			5,445,000			(5,445,000	)			—
Accumulated unpaid dividens series A preferred stock		—			991,697			(991,697	)			—
Less: stockholder note receivable for purchase of stock		—			(345,000	)		345,000				—
		—			6,091,697			(6,091,697	)	(5)		—
Stockholders’ equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding		—			—							—
Common stock, $.001 par value, 100,000,000 shares authorized, 40,835,422 shares on October 31, 2006 and 39,310,543 shares on April 30, 2006 issued		40,835			—							40,835
Additional paid-in capital		41,907,995			48,670			(48,670	)	(6)		41,907,995
Retained earnings		14,240,243			2,939,311			(2,939,311	)	(6)		14,240,243
Treasury stock, at cost (1,200,000 shares on October 31, 2006)		(6,396,000	)		—							(6,396,000	)
Total stockholders’ equity		49,793,073			2,987,981			(2,987,981	)			49,793,073
	$	104,813,806		$	46,151,888		$	94,067,368			$	245,033,062

SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
for the year ended APRIL 30, 2006

	Historical			Historical			Pro forma			Pro Forma
	Smith & Wesson (A)			Bear Lake (B)			Adjusments			Combined
Net product and services sales	$	157,874,717		$	64,830,661		$	—		$	222,705,378
License revenue		2,173,907			—			—			2,173,907
Cost of products and services sold		110,354,558			36,478,047			—			146,832,605
Cost of license revenue		87,067			—			—			87,067
												��
Gross profit		49,606,999			28,352,614			—			77,959,613
Operating expenses:
Research and development, net		348,788			269,311			—			618,099
Selling and marketing		16,546,671			10,364,293			—			26,910,964
General and administrative		21,255,031			10,109,095			—			31,364,126
Environmental expense (credit)		(3,087,810	)		—			—			(3,087,810	)
Total operating expenses		35,062,680			20,742,699			—			55,805,379
Income from operations		14,544,319			7,609,915			—			22,154,234
Other income/(expense):
Other income/(expense)		745,577			(10,492	)		—			735,085
Interest income		112,322			115,716			—			228,038
Interest expense		(1,638,022	)		(3,828,036	)		(1,842,364	)(18)		(7,308,422	)
Total other expense		(780,123	)		(3,722,812	)		(1,842,364	)		(6,345,299	)
Income before income taxes		13,764,196			3,887,103			(1,842,364	)		15,808,935
Income tax expense (benefit)		5,062,617			1,273,625			—			6,336,242
Net income	$	8,701,579		$	2,613,478		$	(1,842,364	)	$	9,472,693
Weighted average number of common and common equivalent shares outstanding, basic		36,586,794									36,586,794
Net income per share, basic	$	0.24								$	0.26
Weighted average number of common and common equivalent shares outstanding, diluted		39,787,045									39,787,045
Net income per share, diluted	$	0.22								$	0.24

SMITH & WESSON HOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
for the six months ended October 31, 2006

	Historical			Historical			Pro forma			Pro Forma
	Smith & Wesson (A)			Bear Lake (C)			Adjustments			Combined
Net product and services sales	$	98,388,910		$	34,612,768		$	—		$	133,001,678
License revenue		996,420			—			—			996,420
Cost of products and services sold		66,637,045			19,219,668			—			85,856,713
Cost of license revenue		15,492			—			—			15,492
Gross profit		32,732,793			15,393,100			—			48,125,893
Operating expenses:
Research and development, net		530,268			151,462			—			681,730
Selling and marketing		9,285,133			5,487,340			—			14,772,473
General and administrative		11,690,020			5,488,887			—			17,178,907
Environmental expense (credit)		—			—			—			—
Total operating expenses		21,505,421			11,127,689			—			32,633,110
Income from operations		11,227,372			4,265,411			—			15,492,783
Other income/(expense):
Other income/(expense)		(329,311	)		50,157			—			(279,154	)
Interest income		69,306			31,837			—			101,143
Interest expense		(718,220	)		(1,953,781	)		(881,419	)(18)		(3,553,420	)
Total other expense		(978,225	)		(1,871,787	)		(881,419	)		(3,731,431	)
Income before income taxes		10,249,147			2,393,624			(881,419	)		11,761,352
Income tax expense (benefit)		4,024,867			1,318,203			—			5,343,070
Net income	$	6,224,280		$	1,075,421		$	(881,419	)	$	6,418,282
Weighted average number of common and common equivalent shares outstanding, basic		39,626,269									39,626,269
Net income per share, basic	$	0.16								$	0.16
Weighted average number of common and common equivalent shares outstanding, diluted		41,408,240									41,408,240
Net income per share, diluted	$	0.15								$	0.16

     NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Pro forma adjustments reflect only those adjustments which are factually determinable and do not include the impact of contingencies which will not be known until the resolution of the contingency. The allocation of the purchase price relating to these acquisitions is preliminary, pending the finalization of the Company’s review of certain of the accounts and the finalization of the appraisal of identifiable intangible assets.

(1)	Adjustment to loan origination fees not assumed as part of the acquisition.
(2)	Adjustment to the current portion of long-term debt and the credit line not assumed as part of the acquisition.
(3)	Adjustment to long-term debt not assumed as part of the acquisition $1,746,064.
(4)	Adjustment to notes payable to former stockholders, net of discounts not assumed as part of the acquisition.
(5)	Adjustment to record the redemption of mandatorily redeemable series A preferred stock retired as part of the acquisition.
(6)	Adjustment to eliminate the equity of acquired company.
(7)	Adjustment to record property not purchased.
(8)	Adjustment to record the valuation of acquired intangible assets.
(9)	Adjustment to record line of credit borrowings to fund the acquisition $28,000,000 net of $281,946 issuance costs.
(10)	Adjustment to record the issuance of convertible debt sold to fund the acquisition $80,000,000 convertible debt net of $4,243,578 debt issuance costs.
(11)	Adjustment to record estimated assumed liabilities at fair value.
(12)	Adjustment to P, P, & E to its appraised value.
(13)	To adjust inventory to its fair value.
(14)	Record estimated professional fees as part of the acquisition $1,000,000.
(15)	Adjustment to record estimated liabilities at fair value.
(16)	Adjustment to record estimated liabilities at fair value.
(17)	Adjustment for deferred taxes related to the acquisition.
(18)	Adjustment to eliminate interest expense on debt not acquired and reflect interest on borrowings to fund the acquisition.