Smith & Wesson’s Q2 earning call provides insight market as it returns to normal levels after the great gun scare of 2012/13. I read the transcript so you do not have to and have posted select quotes below. In short, AR-15 inventory has been replenished. NCIS background checks are down 14% since this time last year, but still up 19% compared to November 2011. There were 1.3 million NCIS background checks this November.

From the transcript …

While inventory still remain low for our M&P SHIELD, our M&P15 Sport rifles, our SDVE polymer pistols, our BODYGUARD 380 and all of our revolvers, we think that channel inventory levels have largely been replenished, especially in the most — Modern Sporting Rifle categories.

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Thank you, Jeff. As I’ve stated earlier, overall growth in firearm sales was positive in the quarter and as Smith & Wesson handguns delivered strong growth of more than 27% year-over-year, primarily due to sales of our M&P polymer pistols.

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Within our long gun category, a 10% year-over-year decline was driven by constrained bolt-action rifle sales, resulting from a recall we initiated 6 months ago and a reduction in sales of our rimfire modern sporting rifles.

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Turning now to NICS background checks. For November, adjusted NICS results came out last week, and not surprisingly, they marked a decline. That decline was 14% on a year-over-year basis. Last year’s NICS numbers were extraordinarily high so we expected negative year-over-year comps, and we expect those negative comps will continue until April or May of next year. Despite the decline, we believe there is good news in the numbers. … First, adjusted NICS background checks in November of this year were over 1.3 million … Second, the long-term NICS trend remains positive, as evidenced by November adjusted NICS growth of approximately 19% versus November 2 years ago

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We estimate that our third quarter revenue will be between $140 million and $145 million. It is important to note that last year’s Q3 sales of Walther products were $12.7 million. Thus, at the midpoint and excluding Walther, we are estimating growth of 15% over Q3 of the prior year, even though we anticipate that year-over-year NICS checks will be significantly down from last year’s peak levels.

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(Question) But there’s been some chatter about the Defense Department having a sidearm upgrade ….

(Answer) It’s certainly an opportunity. I mean, it’s not a huge number of units. It’s about — approximately 500,000 units. But we’re very interested. Of course, we would want to serve the U.S. military and be the provider of that sidearm. That would be a fantastic endorsement of our M&P polymer pistol and a wonderful marketing opportunity for us going forward.

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(Question) And you mentioned the softening in Modern Sporting Rifles. How much of that is basically fundamental softening of demand and how much of that is inability to get ammo?

(Answer) Certainly, when it comes to the rimfires, I would say it’s a bit of both. We can’t quite put our finger on it, obviously. But certainly there, the lack of .22 rimfire ammo is a factor for sure. Now we obviously have no realtime horizon when that situation may improve on the ammo front. But to be perfectly honest, it was fully expected that we would see some softening of sales in Modern Sporting Rifles overall. Following the period that we’ve just been through, we saw exactly the same thing in ’08, ’09 when that period of very strong demand weakened. Modern sporting rifles were probably some of the softest products around.