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corresp

John A. Kelly

Chief Financial Officer

February 21, 2008

Mr. Jeffrey Gordon

Staff Accountant

U.S. Securities & Exchange Commission

100F Street

Mail Stop 7010

Washington D.C. 20549

Re: File No. 1-31552

Dear Mr. Gordon:

The following is in response to your letter of February 7, 2008:

Note 22 — Commitments and Contingencies, page F-36

Litigation, page F-37

    1.

    As of April 30, 2007, you have accrued reserves for product liability of $9 million,
$2.9 million of which is classified as current. We also note the following:

    -

    As noted on pages 48 and F-15, you provide reserves for potential product liability
defense costs. We assume these defense costs are recorded in the product liability
accrual. Tell us, and revise future filings to explain, whether you accrue for probable
and estimable settlements in addition to defense costs.

    -

    As noted on page F-37, the product liability accrual includes amounts for defense
costs and asserted and unasserted claims. You believe that although it is uncertain
whether the outcome of these claims will have a material adverse effect on your
consolidated financial position, results of operations, or cash flows, you do not
anticipate a material adverse judgment and intend to vigorously defend yourselves.

    -

    In the years ended April 30, 2007, 2006, and 2005, you paid $65,798.50, $0, and
$4,535, respectively, in defense and administrative cost relative to product liability
and municipal litigation. In addition, you spent $25,000,

    $15,000 and
$0, respectively, in those fiscal years in settlement fees relative to product liability
cases.

    -

    In fiscal 2007, 2006, and 2005, you recorded expense (income) of $159,052, $87,734,
and ($2.9 million), respectively, to recognize changes in your product and municipal
litigation liability. The income in fiscal 2005 was due to a reduction in reserves due to
favorable outcomes in product and municipal cases, as well as to reflect the initiation of
insurance coverage.

Considering your conclusions on the potential for additional losses, the minimal periodic amounts
spent and recorded, it is unclear to us why you have recorded $9 million in product liabilities,
all of which you assume to be probable and estimable. Please advise.

Company Response - As of April 30, 2007, there were no settlements anticipated for any of our
product liability cases; therefore, since none were probable or estimable, no provision for
settlements were included in the product liability accrual. We will clarify in future filings.

With regards to the total reserve of $9 million, the reserve consists of both traditional product
liability cases and the municipal litigation. Approximately, $5.3 million of the $9 million
reserve is related to the municipal litigation. We have satisfied the deductible for insurance
with regards to these cases. As a result, all future cost are covered by insurance. Our balance
sheet includes a $4.7 million receivable from insurers for reimbursement of these future costs.
The difference between the liability of $5.3 million and the $4.7 million receivable represents
defense costs incurred but not yet billed to us by the insurer. Our reserves for the municipal
litigation assume the cost of a full trial and based upon our interpretation of the facts, assume a
favorable outcome. The cost of the trial is based upon our experience with similar cases and the
advice of legal counsel. As a result of the passage of the Protection of Lawful Commerce in Arms
Act, motions to dismiss the remaining municipal cases are currently being heard by the courts.
While these motions are being heard, there is very little activity and related costs being
incurred.

The remaining $3.7 million reserve of the $9.0 million as of April 30, 2007 is for the traditional
product liability cases. Approximately $2.6 million is for specific cases and the remaining $1.1
million is a reserve for cases incurred but not yet reported. Of the $2.6 million for specific
cases, approximately $540 thousand is for defense costs incurred but not yet billed to us by the
insurer. Finally, in January 2007, Smith & Wesson Holding Corporation acquired Thompson/Center
Arms. Their product liability reserve of $1.4 million is included in the $2.6 million.

    2.

    We noted on page 48 and F-37, you state that the estimated range of reasonably
possible additional losses is zero. However on page F-36, you also state that a range of
reasonably possible losses cannot be estimated. Although we realize that any uncertainty
may be related to semantics, please help us better understand your position. In this
regard, we point out the differences between:

    -

    Estimating the range of reasonably possible additional losses to be zero, meaning it
is not reasonably possible that losses in excess of the amounts could be material, or:

    -

    Estimating that it is reasonably possible that additional losses could be material,
but the range cannot be estimated.

Please note that the distinction may be considered significant, because the former view is that
additional losses are remote and the latter is that they are reasonably possible. Please advise.

Company Response — We accrue for costs related to product liability based upon the test of whether
the liability is probable and estimable as defined in Statement of Financial Accounting Standards
(“SFAS”) No. 5. Our disclosure on page F-37 and on page 48 addresses the fact that although it is
reasonably possible that losses related to an unfavorable outcome could be material, a range of
reasonably possible losses could not be estimated. We will clarify in future filings as requested.

    3.

    In order for us to better understand the impact of product liabilities on your
company, please provide us with the following:

    -

    A roll-forward of activity for the product liability accrual alone, for each
presented and most recent interim period. Show the beginning balance, expenditures,
adjustments and current additions to expense. Break out legal and administrative expense
and settlement amounts by both type and period recorded. Provide a reasonable detailed
narrative explaining the activity.

    -

    An analysis of the April 30, 2007 and the accrual at the most recent interim period
showing the components (legal, admin, settlements) and reconciling such amounts to the
asserted and unasserted claims, and explaining why each amount is probable and estimable.

Company Response

    Defense

    Beginning

    Costs

    Settlement

    Ending

    Balance

    Expense

    Paid

    Paid

    Other

    Balance

    Year ended April 30, 2005

    $
    2,478,415

    $
    (485,320
    )

    $
    (1,818
    )

    $
    0

    $
    100,000
    (a)

    $
    2,091,277

    Year ended April 30, 2006

    $
    2,091,277

    $
    90,323

    $
    0

    $
    (15,000
    )

    $
    0

    $
    2,166,600

    Year ended April 30, 2007

    $
    2,166,600

    $
    158,388

    $
    0

    $
    (25,000
    )

    $
    1,395,852
    (b)

    $
    3,695,840

    Six months ended October 31, 2007

    $
    3,695,840

    $
    402,751

    $
    (181,296
    )

    $
    0

    $
    0

    $
    3,917,295

Notes:

(a) Reclass of escrow held by insurer to other
assets
 (b) Acquistion of Thompson/Center Arms
in January 2007

In addition to the notes above, the reduction in expense shown for the year ended April 30, 2005
represents a reduction in our estimate for cases where there has been an incident that has not yet
been reported (incurred but not reported, “IBNR”). The IBNR is calculated based upon our case
history over a ten-year period to determine the expected annual cost for our more recent periods.
Generally, product liability cases are not reported immediately after the incident occurs, and it
is not uncommon for cases to be brought forward one to two years after occurrence. In fiscal 2005,
based upon our review of the analysis, we reduced the expected number of cases in the IBNR portion
of our reserve. This resulted in an approximately $800,000 reduction in expenses.

As mentioned earlier, defense costs have been incurred and paid by the insurer, but the Company has
not yet been billed; therefore, no activity is shown in the defense costs paid column for fiscal
2006 and 2007. Based upon our records, we believe this number to be approximately $715,000
pertaining to product liability cases.

Settlement costs represent one case in fiscal 2006 and two cases in fiscal 2007.

Of the balances of $3.7 million as of April 30, 2007 and $3.9 million as of October 31, 2007 all of
the accrual is for defense. No settlements are contemplated in these reserves nor do we believe
that any case merits a provision for an adverse outcome. Of the $3.7 million as of April 30, 2007,
approximately $2.6 million is for specific cases and $1.1 million is for IBNR cases. Of the $3.9
million as of October 31, 2007, approximately $2.7 million is for specific cases and $1.2 million
is for IBNR cases. The reserves for the $2.7 million in specific cases are determined based upon
our consultations with counsel regarding the nature and complexity of each individual case and the
probable course to conclusion. Of the $2.7 million, approximately, $715,000 is expenses already incurred but not yet
billed to us by the insurer. The IBNR reserve is based upon the calculation detailed above which
develops an average number of cases per year and the related costs to closure.

In connection with this response, we acknowledge that we are responsible for the adequacy and
accuracy of the disclosures in our filings. Furthermore, we acknowledge that staff comments or
changes to disclosures in response to staff comments do not preclude the Commission from taking any
action with respect to the filing. Finally, we acknowledge that we not assert staff comments as a
defense in any proceeding initiated by the Commission or any person under the federal securities
laws of the United States.

We hope that this resolves the questions as outlined in your memo. Should you have any further
questions please do not hesitate to contact me.

Sincerely,

John A. Kelly

Chief Financial Officer