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Old 12-18-2006, 10:30 AM
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Unhappy Thompson Center Arms bites the bullet...

Hopefully, the small company product quality and excellent customer service that has made TC the giant it really is in the firearms industry won't be lost in this take over. Guess only time will tell...

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Press Release Source: Smith & Wesson Holding Corporation

Smith & Wesson Holding Corporation to Acquire Thompson/Center Arms, Inc.
Monday December 18, 7:05 am ET
Deal Expected to Add $70 Million of Net Sales Provides Immediate Entry into Hunting Rifle Market

SPRINGFIELD, Mass., Dec. 18 /PRNewswire-FirstCall/ -- Smith & Wesson Holding Corporation (Nasdaq: SWHC - News), parent company of Smith & Wesson Corp., the legendary 154-year old company in the global business of safety, security, protection and sport, today announced that it has entered into a definitive agreement to acquire Thompson/Center Arms, Inc., a 40-year old, privately held, New Hampshire-based designer, manufacturer and marketer of premium hunting firearms, for $102 million in cash. The transaction is expected to close in the beginning of January 2007.

ADVERTISEMENT
Thompson/Center Arms, headquartered in Rochester, New Hampshire, manufactures and distributes innovative firearms recognized by hunting enthusiasts for their precision, performance, craftsmanship, and reliability. Thompson/Center Arms occupies a leadership position within each of its core product categories of black powder firearms (or "muzzleloaders"), black powder accessories, and interchangeable firearm systems, as well as a presence in precision rimfire rifles. The transaction will combine two leading firearms companies with complementary products, to yield a single provider of high- quality pistol, revolver, shotgun and rifle products.

Michael F. Golden, President and CEO of Smith & Wesson Holding Corporation, said, "The acquisition of Thompson/Center Arms is an important step in our diversification strategy. Thompson/Center Arms has consistently delivered both profits and strong gross margins while building its position in the hunting rifle market. This move will expand our presence in the $1.1 billion long gun market by providing immediate entry into the hunting rifle and black powder segments, which represents approximately $600 million in domestic sales. In addition to carving out a leadership role in black powder and single shot hunting rifles, Thompson/Center Arms has developed tremendous expertise in manufacturing long-gun barrels, a competency that will be important to Smith & Wesson as we expand our capabilities even further into the long gun market."

The purchase price for Thompson/Center Arms includes the company's Rochester, New Hampshire facility, which produces all of the company's products and is situated geographically between Smith & Wesson's manufacturing operations in Springfield, Massachusetts and Houlton, Maine. The transaction will be financed with the proceeds from the sale of convertible senior notes and an acquisition line of credit.

In conjunction with the acquisition, Gregg Ritz, President and CEO of Thompson/Center Arms, will be named President of Smith & Wesson - Hunting. He will continue to lead the Thompson/Center Arms operation and will head Smith & Wesson's efforts to develop its hunting business. Ritz said, "In addition to bringing together two well-established and highly respected brands in the firearms industry, this acquisition increases opportunities for both Smith & Wesson and Thompson/Center Arms. Smith & Wesson's ability to provide capital for growth and expertise in lean manufacturing processes will provide critical support for our new product pipeline and our need for increased capacity based on strong customer demand. In turn, Thompson/Center Arms' array of barrel manufacturing expertise, hunting rifle products, and accessories fits nicely into the Smith & Wesson portfolio of pistols, revolvers, shotguns and future hunting rifles. There is absolutely no overlap in our product lines, while there is tremendous similarity in our dealer and distribution channels and our marketing vehicles."

Outlook for Fiscal 2007

Following the closing of the acquisition in early January 2007, the Company will include the results of operations for Thompson/Center Arms from that date forward. The Company currently believes that the revenue contribution from Thompson/Center Arms for the period from the closing date to the end of the Company's 2007 full fiscal year, which is April 30, 2007, will be approximately $18.6 million. Therefore, the Company now expects net product sales for the full 2007 fiscal year to be approximately $218.6 million.

It should be noted that excluding the impact of certain non-cash purchase accounting charges, the acquisition will be $0.01 accretive to the Company's anticipated earnings per diluted share in fiscal 2007. It should also be noted that the results for the January through April 2007 period are not reflective of the results expected for Thompson/Center Arms on an annual basis due to the seasonality of the hunting business, which is stronger in the May through December timeframe.

In accordance with acquisition purchase accounting, the Company expects to record non-cash charges of approximately $7.0 million on a pre-tax basis or about $0.10 per share on an after-tax basis. Therefore, net income for fiscal 2007 is now anticipated to be approximately $11.5 million, or $0.27 per diluted share, versus prior guidance of $15.0 million, or $0.36 per share. It should be noted that the impact of purchase accounting will not be fully known until after the transaction closes.

Outlook for Fiscal 2008

Golden added, "We are especially pleased with the fact that the strategic acquisition of Thompson/Center Arms will provide us a full year of increased net sales for fiscal 2008. We now expect net sales for the fiscal year ending April 30, 2008 of approximately $320.0 million, an increase of $70 million from our previous guidance for fiscal 2008, and reflective of the Thompson/Center Arms acquisition."

We expect net income for the fiscal year ending April 30, 2008 of approximately $27.0 million, or $0.60 per diluted share, which reflects an increase from our previous guidance for 2008 earnings per diluted share of $0.52, and a 122% increase from our anticipated 2007 earnings per diluted share, and reflective of the Thompson/Center Arms acquisition.

Barry Monheit, Chairman of the Board of Smith & Wesson Holding Corporation, said, "The Board is extremely pleased with this acquisition. We are not only acquiring a company of tremendous quality and reputation, but the acquisition itself clearly demonstrates the commitment of Mike Golden and his team to execute on the Company's strategy to gain a significant presence in safety, security, protection and sport."

Long-Term Outlook

Golden concluded, "Over the course of fiscal 2006 and fiscal 2007, we have consistently delivered on our commitment to grow our core handgun business and diversify our company into new areas of safety, security, protection and sport. The acquisition of Thompson/Center Arms, Inc. is a key milestone in that strategy. It places us clearly and immediately into the hunting rifle market and, excluding the impact of non-cash purchase accounting charges, is immediately accretive to our earnings. We believe that, once we gain the benefit of the various synergies we expect, our operating results, including our margins and operating expenses, for periods after fiscal 2008 will continue to be positively impacted by giving us a significant presence in the long gun market."

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of federal securities laws. Forward-looking statements give the Company's current expectations or forecasts of future events. These forward looking statements include expectations regarding (i) the proposed acquisition, (ii) the anticipated benefits of the acquisition, (iii) the timing of the proposed acquisition, (iv) the expected financial effect of the acquisition, (v) the accretive impact of Thompson Center/Arms earnings, (vi) the effect of the acquisition on customer growth strategy, and (vii) the Company's outlook for fiscal 2007 and 2008. 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, the ability of the Company's management to integrate the acquired business in a successful manner, 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, 2006.

The Company assumes no obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.

Conference Call

The Company will host a conference call today, December 18, 2006, to discuss the acquisition and its updated outlook for fiscal 2007 and fiscal 2008. The conference call may include forward-looking statements. The conference call will be Web cast and will begin at 8:30 a.m. Eastern Time (5:30 a.m. Pacific). The live audio broadcast and replay of the conference call can be accessed on Smith & Wesson's Web site at www.smith-wesson.com (Windows Media is required). Those interested in listening to the conference call via telephone may call directly at 617.614.2703 and reference conference code #96836672. No RSVP is necessary. The Company will maintain an audio replay of this conference call on its website for a period of time after the call. No other audio replay will be available.

About Smith & Wesson

Smith & Wesson Holding Corporation, through its subsidiary Smith & Wesson Corp., is one of the world's largest manufacturers of quality handguns, law enforcement products and firearm safety/security products. The Company also licenses shooter protection, knives, apparel, and other accessory lines. The Company is based in Springfield, Massachusetts, with manufacturing facilities in Springfield and Houlton, Maine. 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 www.smith-wesson.com.

About Thompson/Center Arms, Inc.

Thompson/Center Arms, headquartered in Rochester, New Hampshire, is a leading designer, manufacturer, and marketer of premium hunting firearms under the Thompson/Center brand. For more information, log on to www.tcarms.com.

Contacts:
John Kelly, Chief Financial Officer
Smith & Wesson Holding Corporation
(413) 747-3305

Liz Sharp, VP Investor Relations
Smith & Wesson Holding Corporation
(413) 747-3305
lsharp@smith-wesson.com


Source: Smith & Wesson Holding Corporation
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  #2  
Old 12-18-2006, 12:37 PM
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Can you say " trigger locks "
Can you say "Its a pistol or a carbine it can't do both."
Smith&Wesson sold out once to avoid lawsuits, they will do it again.
A sad day in the world of firearms.
This is just my opinion.

Jeff
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Old 12-18-2006, 06:51 PM
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Wanna bet our "Lifetime Warranties" aren't worth the paper they wrote them on when the sale is complete?
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Old 12-18-2006, 09:20 PM
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Here's my thoughts on the matter. Cut and pasted from my post on SP - I'm too lazy to think and write it again.

Well that was a surprise. I'm optimistic, however. Consider this: they bought a company that sells products that are unique and sought after in the market place. If they mess with them too much, they'll see sales decline. Also, the internal locks require additional machining, labor, parts, and other costs which will erode the margin on the guns. Make undesirable guns and folks won't buy them. We'll see if the new management is willing to risk losing sales, market share and profits.

I hope I'm right. The gun buying public should communicate their opinion on S&W's trigger locks, etc by voting with their money. I don't give them any of my business - not that they care or will go belly up because of it. However, if enough gun buyers decide they don't like any changes, then they will suffer. I wonder if they actually lost business from their trigger locks so far...
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Old 12-19-2006, 07:06 AM
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Thumbs down

The question is if S & W actually lost business due to the trigger locks?

S & W was bought back form the British company is 1999 for 15 million ( a fraction of the origional purchase) and a assumption of debt. Then S & W buys T/C arms for 103,000,000 in cash 7 years later.

I would say this qualifies to say S & W is profitable and had turn its business around from the Clinton Administration debacle.

We are all concerned as to any T/C arm's product changes. The lawyers
will decide that to avoid any potential litigation issues due to product misuse.
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Old 12-19-2006, 06:36 PM
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IN OTHER WORDS...SMITH AND WESSON, LEAVE OUR BELOVED THOMPSON CENTER DESIGNS ALONE. THEY ARE AS WE LIKE THEM. ALSO, WE BUY THOMPSON CENTERS FOR THEIR UNMATCHED SERVICE AND WARRANTIES. PLEASE DO NOT TAMPER WITH NEAR PERFECTION!!!!!!!
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Old 12-19-2006, 09:04 PM
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I can almost guarentee you, unfortunately, but we will see a falling hammer block like Ruger put in their revolvers and same thing H&R did to theirs. Whether they can put that POS key system into it.....who knows but they will try to circimvent or redesign it to make their lawyers happy.
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Old 12-19-2006, 09:06 PM
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Better yet.....we can look for a cross block safety device since you can't be trusted to safely uncock a falling hammer. Oh better yet an off safe button like SigArms has on their semiautos...LOL Sorry I am venting now. I don't view this as a positive until I see that Smith is going to leave TC alone to design and run the company as its always been run.
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Old 12-19-2006, 11:51 PM
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As far as the locks go, if they want to sell firearms in CA, NJ and more and more states require them to sell a handgun in their state. We are blaming the wrong people. In the end it is the people that elected these state officials. You will see more of this.

Think about it, a lawnmower has many more restritions on building safety into the design than any firearm.
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Old 12-20-2006, 07:30 AM
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I think a primary reason TC is successful is because their products are UNLIKE those of most other manufacturers. If S&W orders the guns be modified with cross bolt safeties, trigger locks, etc, then the guns will become more like those of the other manufacturers, thereby subverting a primary reason TC became what S&W found attractive in them in the first place. Kind of' like marrying a lingerie model then taking her to McDonalds for a fattening lunch everyday. Let's hope S&W's leadership isn't that stupid.

Last edited by vt_shooter; 12-20-2006 at 08:09 AM.
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Old 12-20-2006, 08:07 AM
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T/C Encore

The T/C encore already has a transfer bar in the action similar to the Ruger blackhawk.

I don't think that any more will be required. Since it has a hammer it has to be cocked to fire...there for difficult to fire by accident.

If they do anything they may add a loaded chamber indicator.

I think The T/C Encore meets enough gov't safety requirements but it may come down to meeting any future litigation safety isssues. LAWYERS!!!!
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Old 12-20-2006, 08:22 AM
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as far as warrnty goes i would assume that it will not change at all.last i knew smith wesson has a lifetime warranty also unless you destroyed the gun yourself trying to repair it. it didnt cost me a thing to have my 686 repaired by the factory a few years ago and i am the second owner.
we all have fears that things will change for the worst but really dont know until it happens.for me i am trying to see the bright side of things maybe just maybe with this buy out s&w will pay to have the t/c encores and contenders evaluted by the state of mass so they may be sold here in pistol form.until then i cant own one in pistol form or buy one unless it is used and already sold in this state.
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Old 12-20-2006, 12:10 PM
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Loaded Chamber Idicators will be required by several states starting in 2008 from what I understand. Pretty soon it is going to be like it used to be for cars. They used to make 49 state cars and CA cars for a number of years. Same thing is happening with this safety crap. I believe New Jersey will be first to require it but it will not be long before others kick in.

I wonder how you put a LCI on a revolver?
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Old 12-20-2006, 12:33 PM
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Send A Letter To Tc

Lots of great comments and speculations folks. But only time will tell if S&W will make changes to traditional TC products or policy that will mark the doom of the TC's we all have come to love and respect (myself since 1969). No doubt the loss of Tim Pancurak was a huge one (retired), but hopefully with Gregg Ritz remaining active in the TC operations of S&W the changes won't be too severe.

Sure glad I have a bunch of extra frames and several of their traditional side lock muzzle loaders already on hand. And the best TC mechanic in the country is a personal friend. Ought to serve and last me the rest of my life no matter what happens under S&W.

While I haven't supported S&W or their products for decades, the new owners do deserve a chance to turn back around the damage done by the previous owers. They certainly don't deserve to be chastised for the actions of those previous owners IMO.

As for the states/locals that do not allow TC's in the current pistol form, the changes need to be made in your own local government and not to any of the TC products. Sure its too bad you can't have them, but it would be even worse to punish the rest of the world by altering the products to be saleable in your areas.

May I suggest you all do as I have... send a note to Gregg Ritz. Not an email, not a phone call, but a letter (I sent a Christmas letter). Be positive, praise the quality products and exceptional service that TC has always stood for and given you over the years, and your desire to see them continue and grow in the future. Include your feelings on changing the basic products as well, and your wants for new chamberings, models, etc. If enough rattle their chain, just maybe S&W will listen.


Mr. Gregg Ritz, President and CEO
Thompson/Center
P.O. Box 5002
Rochester, NH 03866
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Old 12-20-2006, 03:15 PM
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Buy them while you can

I just ordered 2 frames, which will give a total of 11 to date. I am somewhat concerned about the lifetrime warranty, but I feel S&W will not look a gift horse in the mouth. They wouldn't have shelled out all that money, and ruin what Thompson has built up. The old saying if it ain't broke don't fix it.
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