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These excerpts taken from the SWHC 10-K filed Jun 30, 2009. 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 on the face of the financial
statements.
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 on the face of the financial statements. These excerpts taken from the SWHC 10-K filed Jun 30, 2008. 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 on the face of the financial
statements.
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 on the face of the financial statements. This excerpt taken from the SWHC 10-K filed Jul 16, 2007. 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 on the face of the financial
statements.
We do not enter into any market risk sensitive instruments for
trading purposes. Our principal market risk relates to changes
in the value of the euro relative to the U.S. dollar. A
portion of our gross revenues during the three and
12 months ended April 30, 2007 ($4.7 million and
$18.2 million, respectively, representing approximately
7.2% and 8.4%, respectively, of aggregate gross revenues) came
from the sale of goods that were purchased, wholly or partially
from a European manufacturer, in euros. Annually, we purchase
approximately $10.0 million of inventory from a European
supplier. This exposes us to risk from foreign exchange rate
fluctuations. A 10% drop in the value of the U.S. dollar in
relation to the euro would, to the extent not covered through
price adjustments, reduce our gross profit on that
$10.0 million of inventory by approximately
$1 million. In an effort to offset our risks from
unfavorable foreign exchange fluctuations, we periodically enter
into euro participating forward options under which we purchase
euros to be used to pay the European manufacturer. As of
April 30, 2007, our outstanding contracts had a remaining
balance of 4.0 million euros. The contracts are for
500,000 euros per month with the last expiring in December
2007.
Participating forward options provide full protection for us
against the depreciation of the U.S. dollar to the euro and
partial benefit from the appreciation of the U.S. dollar to
the euro. If the euro strengthens above the average rate, we
will not pay more than the average rate. If the euro weakens
below the average rate, 50% of the euros are at the average rate
and the remaining 50% of the euros are paid for at the spot
rate. Each option, unless used on the first day, will be
converted to a forward contract, due when needed during the
month at a slight up charge in rate. During the three and
12 months ended April 30, 2007, we experienced a net
loss of $6,350 and a gain of $15,604, respectively, on foreign
exchange transactions that we executed during the period in an
effort to limit our exposure to fluctuations in the euro/dollar
exchange rate. As of April 30, 2007, we had participating
forward options totaling 4.0 million euros remaining, which
were reported as an asset of $125,000.
Reference is made to the financial statements, the notes
thereto, and the report thereon, commencing on
page F-1
of this report, which financial statements, notes, and report
are incorporated herein by reference.
Not applicable.
This excerpt taken from the SWHC 10-K filed Jul 14, 2006. 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 engage in leasing, hedging, research and development
services, or other relationships that expose us to liability
that is not reflected on the face of the financial statements.
We do not enter into any market risk sensitive instruments for
trading purposes. Our principal market risk relates to changes
in the value of the euro relative to the U.S. dollar. A
portion of our gross revenues during the three and
12 months ended April 30, 2006 ($4.7 million and
$14.7 million, respectively, representing approximately
8.9% and 9.2%, respectively, of aggregate gross revenues) came
from the sale of goods that were purchased, wholly or partially
from a European manufacturer, in euros. Annually, we purchase
approximately $10 million of inventory from a European
supplier. This exposes us to risk from foreign exchange rate
fluctuations. A 10% drop in the value of the U.S. dollar in
relation to the euro would, to the extent not covered through
price adjustments, reduce our gross profit on that
$10 million of inventory by approximately $1 million.
In an effort to offset our risks from unfavorable foreign
exchange fluctuations, we entered into euro participating
forward options under which we purchase euros to be used to pay
the European manufacturer. As of April 30, 2006, our
outstanding contracts had a remaining balance of
3.6 million euros. The contracts are for 600,000 euros per
month with the last expiring in October 2006.
Participating forward options provide full protection for us
against the depreciation of the U.S. dollar to the euro and
partial benefit from the appreciation of the U.S. dollar to
the euro. If the euro strengthens above the average rate, we
will not pay more than the average rate. If the euro weakens
below the average rate, 50% of the euros are at the average rate
and the remaining 50% of the euros are paid for at the spot
rate. Each option, unless used on the first day, will be
converted to a forward contract, due when needed during the
month at a slight up charge in rate. During the three and
12 months ended April 30, 2006, we experienced a net
loss of $30,291 and $339,209, respectively, on foreign exchange
transactions that we executed during the period in an effort to
limit our exposure to fluctuations in the euro/dollar exchange
rate. As of April 30, 2006, we had participating forward
options totaling $3.6 million euros remaining, which were
reported as an asset of $54,483.
Table of Contents
Reference is made to the consolidated financial statements, the
notes thereto, and the report thereon, commencing on
page F-1
of this report, which consolidated financial statements, notes,
and report are incorporated herein by reference.
Not applicable.
Evaluation
of Disclosure Controls and Procedures
Smith & Wesson Holding Corporation maintains
“disclosure controls and procedures,” as such term is
defined under the Securities and Exchange Act
Rule 13a-15e,
that are designed to ensure that information required to be
disclosed in our Exchange Act reports 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, as
appropriate, to allow timely decisions regarding required
disclosures. In designing and evaluating the disclosure controls
and procedures, our management recognized that any controls and
procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired
control objectives and our management necessarily was required
to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. We have
carried out an evaluation, as of the end of the period covered
by this report, under the supervision and with the participation
of our management, including our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon
that evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that our disclosure controls and
procedures were effective to ensure that information required to
be disclosed by us in this report was recorded, processed,
summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms for this
report.
During our year-end closing process for the reporting period
ended April 30, 2005, we carried out an evaluation, under
the supervision of our management, including the Chief Executive
Officer and the Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and
procedures pursuant to Exchange Act
Rules 13a-15.
Based upon that evaluation, we determined that we had a material
weakness in internal control over financial reporting for the
year ended April 30, 2005 related to stock awards. A
material weakness is a control deficiency, or combination of
control deficiencies, that results in a more than remote
likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected.
Specifically, we determined that certain warrants issued in May
2001 to two employees, contained a cashless exercise feature
that required compensation expense to be recorded in our
financial statements. In addition, modifications in 2004 and
2005 to the terms of certain stock option agreements required
additional compensation expense to be recorded in the financial
statements. These matters resulted in the restatement of our
fiscal 2002, 2003, 2004 and the first three quarters of our
fiscal 2005 consolidated financial statements in the previously
filed April 30, 2005
Form 10-K.
As a result, our Chief Executive Officer and Chief Financial
Officer each concluded that our disclosure controls and
procedures were not effective as of April 30, 2005 due to
the matters relating to stock option accounting, and we
implemented remedial action. Specifically, we enhanced our
closing process and procedures related to accounting for stock
awards, including designating an individual to oversee the
accounting for stock awards. We also provided extensive training
in SFAS 123(R), which we adopted as part of our year-end
closing process in fiscal 2006.
Changes
In Internal Control over Financial Reporting
There were no changes in the Company’s internal controls
over financial reporting during the Company’s fourth
quarter ended April 30, 2006 that materially affected, or
are reasonability likely to materially affect, the
Company’s internal controls over financial reporting.
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