Smith & Wesson Files to Raise up to $250 Million in New Capital

Smith & Wesson Holding Corp. (NASDAQ: SWHC) may be lining up its finances to raise more buffer capital as it enters into a part of its business cycle that is likely going to be under more strict regulation than in the past. The gun maker has submitted its shelf registration with the Securities and Exchange Commission to raise up to $250 million in new capital by selling securities against what is currently a $601 million market capitalization.

Be advised that this is a shelf registration and many companies file shelf registration statements and then they never raise the cash. That being said, S&W showed that its filing is for up to $250 million and the securities it can sell are common stock, preferred stock, debt securities, depositary shares, warrants, purchase contracts and units. Also be advised that S&W did not name any investment banks which would lead any proposed offering. The company may not even choose to raise any new capital at all.

Here is the USE OF PROCEEDS from the SEC Filing:

Except as may be otherwise set forth in any prospectus supplement accompanying this prospectus, we will use the net proceeds we receive from sales of securities offered hereby for general corporate purposes, which may include the repayment of indebtedness outstanding from time to time and for working capital, capital expenditures, acquisitions, and repurchases of our common stock or other securities.

Lobbying was not exactly specified here, but for a gun maker you have to assume that lobbying costs would fit into “general corporate purposes” any day of the week with the gun control efforts that have picked up since the December massacre in Connecticut.