Smith & Wesson: Definition from Answers.com
In a seeming case of a minnow swallowing a whale, Tomkins ended up selling Smith & Wesson to Saf-T-Hammer Corporation in May 2001. The purchase price, apparently reflecting the firm's troubled nature, was only $15 million, although Saf-T-Hammer also agreed to assume $53 million in debt. Based in Scottsdale, Arizona, Saf-T-Hammer was a manufacturer of gun locks that had been founded in 1998 and had begun selling its products in late 2000. The company's president, Robert Scott, had spent ten years as a Smith & Wesson vice-president before joining Saf-T-Hammer in 1999. He was named the new president of Smith & Wesson Corp., now American-owned again and still headquartered in Springfield, Massachusetts.
The precipitous decline in sales not only cost Smith & Wesson its place as the leading U.S. maker of handguns to Sturm, Ruger, it also led to a $14 million loss for the fiscal year ending in April 2001. Scott moved quickly to turn the company's fortunes around, particularly by mending fences within the gun industry. Buyers slowly began returning, and sales grew from $70.7 million in the fiscal year ending in April 2001 to $79.3 million the following, before jumping to $98.5 million the year after that. After suffering a net loss of $10.8 million in the fiscal year ending in April 2002, Smith & Wesson returned to profitability one year later, $15.7 million in the black. Aiding this turnaround were a number of other Scott initiatives, including improving the production process and turning out new gun products, although the firm's efforts to aggressively license the company's name for myriad items--such as fine art prints, watches, body armor, safes, footwear, and golf clubs--yielded little in the way of profits. During this same period, the legal threat that had been hanging over the gun industry more or less evaporated. A growing number of the lawsuits were dismissed, and the newly installed, pro-gun Bush administration backed away from the "landmark" deal between the government and Smith & Wesson.
In early 2002, meanwhile, Saf-T-Hammer renamed itself Smith & Wesson Holding Corporation. In January of the following year, Scott was named chairman and CEO of Smith & Wesson Corp. (the operating subsidiary). Taking over as president was Roy C. Cuny, a former president of Peerless Manufacturing Co., a maker of air filtering equipment. Cuny had joined Smith & Wesson in November 2002 as vice-president for operations. As president, he oversaw the launch of nine new handguns in early 2003. These guns garnered strong interest at national and international trade shows held in February and March. Among them was the Model 500, a .50-caliber revolver weighing 4.5 pounds, which was the largest, most powerful handgun ever made, and the .45-caliber Model 1911 pistol, which was a modernized replica of the military sidearm that the U.S. Army used for most of the first half of the 20th century.
Although Smith & Wesson was seemingly on the road to recovery, it was soon engulfed in a new round of controversy, mainly revolving around machinations at the parent holding company. In December 2003 Smith & Wesson Holding filed its annual report five months after the deadline because it needed to restate its results for 2002 owing to a series of mistakes in the way it had accounted for its acquisition of the gunmaker. That same month, Chairman and CEO Mitchell A. Saltz and President Colton R. Melby of the parent company stepped down from their posts while retaining spots on the board of directors. Saltz and Melby were the firm's two largest shareholders. Cuny was named chairman, president, and CEO of Smith & Wesson Holding, but just one month later a new chairman was appointed, James J. Minder, a management consultant and member of the board of directors since 2001. Also in January 2004 the holding company announced that it would close its Scottsdale headquarters and move its functions to the subsidiary's Springfield offices. Then in February 2004 came more embarrassment when Minder resigned the chairman's post while maintaining a seat on the board after it was revealed that he was a felon who in the 1950s and 1960s had served 15 years in Michigan prisons for dozens of armed robberies, including a bank heist, and an attempted escape from jail. Taking over as chairman was another member of the board, G. Dennis Bingham.
Smith & Wesson Corp. attempted to put all these distractions behind it by refocusing on its core gun line during 2004. The firm shut down a nascent and ill-conceived venture into home decor cataloging and divested other businesses as well, including its Identi-Kit software program. Millions were spent to improve and expand production at the Springfield plant. During the year, Smith & Wesson regained its position as the top maker of handguns in the United States. This positive note, however, was followed by the announcement in November 2004 that Cuny had left the company with no indication of the reason for the sudden departure. Bingham resigned as well around this same time and was replaced as chairman by Barry M. Monheit, a management consultant and independent board member. In December 2004 Michael F. Golden was brought onboard as the company's fifth leader in as many years. The new president and CEO had previously held management positions with three leading U.S. manufacturing firms: Kohler Company, Black & Decker Corporation, and Stanley Works.
Several other changes in the top management were made around this same time as Smith & Wesson attempted to assemble a more marketing-savvy leadership team. Early in 2005 the parent company completed a refinancing that reduced its total debt by $21.3 million and offered $1.5 million in savings on interest expense for the fiscal year ending in April 2006. The Golden-led team also began working on a plan to broaden the firm's focus to include "safety, security, protection, and sport." After more than 150 years in the handgun market, Smith & Wesson was considering moving into the production of shotguns or rifles and was also looking into licensing its name for such products as ammunition, nonlethal weapons, and home security systems. The company was also stepping up efforts to bolster sales to law enforcement agencies and the military, both areas in which Smith & Wesson once dominated but had been lagging for some time. Perhaps most important was Golden's intention to bolster marketing and to turn what he called "a quiet company" into a much more visible one.
Key Dates:
* 1852: Horace Smith and Daniel B. Wesson form a partnership, Smith & Wesson Arms Company, to build a repeating, lever-action pistol.
* 1854: Partners sell the company to Oliver Winchester, who later bases his famous Winchester repeating rifle on some of the pistol's features.
* 1856: Smith and Wesson create new partnership, Smith & Wesson, Inc., to begin manufacturing the first Smith & Wesson revolver, in Springfield, Massachusetts.
* 1865: Surging demand during the Civil War years helps establish Smith & Wesson as one of the top U.S. gunmakers.
* 1873: Smith sells his interest in the company to Wesson.
* 1899: Company introduces the .38 Military & Police.
* 1906: Wesson dies; the company continues to be owned and managed by members of the Wesson family.
* 1908: The N frame line of revolvers debuts.
* 1935: The .357 Magnum is introduced.
* 1946: C.R. Hellstrom becomes the first person outside the Wesson family to run the company.
* 1955: Smith & Wesson introduces the legendary .44 Magnum.
* 1965: Smith & Wesson introduces Model 60, the first all-stainless steel revolver; Wesson family sells the company to Bangor Punta Alegre Sugar Corp.
* 1984: Lear Siegler Corporation acquires Bangor Punta.
* 1987: F.H. Tomkins PLC (later Tomkins PLC) acquires Smith & Wesson.
* 1989: The LadySmith line of handguns designed for women debuts.
* 1994: The Sigma Series is the first Smith & Wesson line to feature plastic frames.
* 2000: In agreement with Clinton administration, company agrees to restrictions on the way it makes, sells, and distributes handguns; a backlash against the company causes sales to plunge.
* 2001: Tomkins sells Smith & Wesson to Saf-T-Hammer Corporation.
* 2002: Saf-T-Hammer renames itself Smith & Wesson Holding Corporation.
