Lenders offered to more than doubled gun maker Smith & Wesson’s revolving line of credit by upping the limit to $500 million, according an announcement Monday.
Jeffrey D. Buchanan, Smith & Wesson’s chief financial officer, called the expansion of its credit line reflects lenders’ confidence in the overall business.
Smith & Wesson’s credit line has been boosted from $175 million to $350 million and lenders left options on the table for at least $100 million more. The total options would boost the company’s credit limit to half a billion, according to the announcement.
For the past two years, the Connecticut company has been diversifying its product offerings to include outdoor goods and gun accessories in addition to firearms.
While the gun maker has been reporting positive results — a 40-percent increase in earnings for its first quarter — its stock price slumped by about $2 per share in September and has yet to fully recover.
The fall in price per share was due investors responding to the U.S. Army rejecting Smith & Wesson’s bid to replace military handguns, a contract valued at $580 million.