S&W Joins Ruger In Leaving California Market

Smith & Wesson has officially announced today that they are letting their M&P series of semi-automatic pistols drop off the California Department of Justice Handgun Roster. For the time being, the M&P Shield and the SDVE pistols will remain on the roster as the company plans no changes to these pistols and they were added to the list prior to the beginning of 2014.

What I would like to see and, I think most would agree, is for S&W along with Ruger, Glock, and any other supplier of pistols to the law enforcement market in California take the Ronnie Barrett approach to this. That is, if it can’t be sold to individuals in California then it won’t be sold to law enforcement either. Barrett went further and stopped providing spare parts and repairs as well. 

The official statement from Smith & Wesson courtesy of the Outdoor Wire is below:

SPRINGFIELD, Mass. (January 23, 2014) — Smith & Wesson Corp. announced today that although it continually seeks ways to refine and improve its firearms so that consumers have access to the best possible products, the State of California is making that impossible when it comes to California residents.

Under California’s “Unsafe Handgun Act,” any new semi-automatic pistol introduced into that state must comply with microstamping laws. In addition, California asserts that anything other than a cosmetic change to a handgun already on the California Roster of Handguns Certified for Sale, including performance enhancements and other improvements, requires it to be removed from the roster and retested. For semi-automatic pistols, this means it must comply with the microstamping requirements, as well.

Smith & Wesson does not and will not include microstamping in its firearms. A number of studies have indicated that microstamping is unreliable, serves no safety purpose, is cost prohibitive and, most importantly, is not proven to aid in preventing or solving crimes. The microstamping mandate and the company’s unwillingness to adopt this so-called technology will result in a diminishing number of Smith & Wesson semi-automatic pistols available for purchase by California residents.

This is not a problem unique to Smith & Wesson. The microstamping legislation and California’s position regarding performance enhancements and other improvements creates the same challenge for all firearm manufacturers, since presumably all of them refine and improve their products over time.

Smith & Wesson currently produces a California-compliant version of its M&P® Shield and SDVE™ pistols. Both of these new products were launched last week at SHOT Show® in Las Vegas and are expected to begin shipping within 90 days. They are expected to more than offset the impact of those M&P pistol models that will not remain on the Roster. Both the M&P Shield and the SDVE pistols are expected to remain on the California Roster of Handguns Certified for Sale as long as no changes are made to those models and the company does not plan to make changes to them for this reason. All other Smith & Wesson handguns are at risk of eventually falling off the roster over time. The company expects that any current production revolvers that fall off will be re-tested and returned to the roster, since microstamping does not apply to revolvers. Without some change in position by California, however, any semi-automatic pistols (other than the California-compliant models referenced above) that are removed from the roster will not be returned and law-abiding citizens will not be permitted to buy them from a licensed dealer in California.

James Debney, Smith & Wesson President & CEO, said, “As our products fall off the roster due to California’s interpretation of the Unsafe Handgun Act, we will continue to work with the NRA and the NSSF to oppose this poorly conceived law which mandates the unproven and unreliable concept of microstamping and makes it impossible for Californians to have access to the best products with the latest innovations. At the same time, we will do our best to support our customers in California with state-compliant products, enabling them access to at least a portion of the firearms to which we believe all citizens are entitled. In these challenging times, we hope you will support Smith & Wesson, and all gun manufacturers, in our fight to make the Unsafe Handgun Act about safety. We also encourage you to support the NSSF’s lawsuit and other efforts to stop microstamping, before it impacts your Constitutional rights.”

Unless California changes its position, all M&P pistols other than the M&P Shield, will fall off the roster by August, 2014, due to performance enhancements and other improvements we have made to those firearms. This includes the M&P9c, which has fallen off already and several other M&P models that will fall off by the end of this month. Other models already have fallen off and will continue to fall off for the same reason. Visit http://oag.ca.gov/sites/oag.ca.gov/files/pdfs/firearms/removed.pdf each week for a list published by the California Department of Justice of the handguns no longer on the roster.

California firearms dealers should check the official California Roster of Handguns Certified for Sale frequently, to determine which handguns are certified for sale in California. This list can be found at http://certguns.doj.ca.gov/.

How To Inspect Your M&P Shield

Smith & Wesson has issued a recall on their popular M&P Shield pistols made before August 19, 2013. They have identified a condition whereby the trigger bar pin could damage the lower trigger in such a way as to cause the drop safety feature not to work. If a pistol with this condition were to be dropped, it could fire unintentionally. While S&W thinks this condition may only be present in some more recently manufactured Shields, they are being cautious.

To help determine if your M&P Shield is one of the pistols with this defect, Smith & Wesson has released a YouTube video showing exactly how to determine if the trigger bar bin is not functioning correctly.

Kudos to S& W for not only issuing the recall but posting this video showing owners on how to inspect their pistol for this potential defect. If a picture is worth a 1,000 words, then a video ups that by a factor of 10.

Quote Of The Day

Smith and Wesson (SWHC) released their earnings report for the fiscal year ending April 30th yesterday. With the growth in gun sales over the past three years, you would expect that they did well and they did. Net sales figures for the 4th Quarter were up approximately 38% over the same quarter in the prior year. Fiscal year net sales for 2013 were up 43% over FY2012.

So who should they thank for their sales growth? John Nolte at Breitbart has this to say:

It is hard to judge who Smith & Wesson should thank most: Gun-grabber President Obama, murdered-child-exploiter Piers Morgan, or insufferable-sell-out Joe Scarborough. Or maybe the gun maker should just send a big fat bouquet to all of the media:

JournOlist HQ

Hollowed-Out Volcano Lane

Water Carrier, DC 66666

Actually, Smith & Wesson should be and likely is grateful to a nation of Americans who instinctually understand and appreciate their God-give right to not be bossed around, intimidated, or swayed by a bunch of hypocritical, bossie-pants, fascists who hide behind armed guards in secured high-rises.

 In what is generally a down day for Wall Street, S&W stock is up approximately 5% at midday.

Smith & Wesson Tops The Globe 100

The Boston Globe publishes an annual list which ranks the best performing public companies in Massachusetts. The winner this year probably surprised them but certainly not those of us in the gun culture. It was the 161-year old firearms manufacturer Smith & Wesson which is located in Springfield.

In an article that is mostly unbiased for the left-leaning Globe, they explain why S&W topped the list.

With its sights trained on firearms once more, Smith & Wesson increased profits 14 times over in 2012, netting $66 million on sales of $538.6 million and rocketing to the first position on this year’s Globe 100 list.

‘We went back to what we do best, which is handguns. We divested the security business very successfully and since that point have not looked back.’ – James Debney, CEO, Smith & Wesson

But the company’s renaissance is not merely a case of addition by subtraction. In recent years, Smith & Wesson has ventured beyond its core revolver business, introducing popular polymer handguns and modern sporting rifles.

The latter — often referred to as assault rifles — represent Smith & Wesson’s fastest-growing product line. Sales increased by 85 percent last year, and a line that did not exist in 2010 delivered more than a fifth of the company’s total revenue.

“It’s become an important piece of our business,” Debney said, acknowledging some concern about legislative efforts to ban the controversial weapons. “But at the end of the day, we come back to our core competency, and where we’re strategically focused, in terms of product, is the [military and police] pistol.”

At the moment, civilian sales of polymer handguns outnumber law enforcement sales, 20 to 1. Smith & Wesson only launched a polymer handgun line in 2006, but the company now views it as the main driver of future growth.

Currently, Smith & Wesson is the third ranked firearms manufacturer by number of firearms produced in the US behind Ruger and Remington. Their current order backlog is approximately $668 million which is greater than the previous year’s sales.

Smith & Wesson was given a $ 6 million tax incentive to expand their plant back in 2010. That tax incentive required them to hire an additional 225 over the next seven years. They have already met this requirement as they have hired 350 new workers in the past two years to meet the demand for new firearms. Their payroll is now $80 million annually and their total workforce in Massachusetts now numbers 1,500.

There are a number of comments on S&W topping the Globe 100. Most are as one might expect from what JayG calls the Volksrepublik. They include stuff like “Glorifying a company that manufactures guns?” and “Surely there must be a more worthy #1 pick than an assault weapons manufacturer.” It is actually rather amusing to watch the wailing and gnashing of teeth over this. I know for certain that the 350 people who have gotten good paying steady work are not among them.

More On The Sale Of The Freedom Group

Last week was somewhat consumed with the vote on Manchin-Toomey and the Boston Marathon bombings. The Wall Street Journal ran a couple of stories about the sale of the Freedom Group by Cerberus. You may remember that Cerberus put the Freedom Group up for sale in December after the Newtown shootings in response to pressure from some major pension funds who were investors.

In the first story dated April 16th, the Journal reports that a bid group is being formed by Stephen Feinberg and other partners in Cerberus. The rationale behind this is to provide a floor in the auction price for Freedom Group in order to prevent lowball offers.

Mr. Feinberg, Cerberus’s co-founder and chief executive, and other partners, using their own money, are looking to team up with other investors to place a bid for Freedom Group, the people said. The Cerberus partners would have a minority financial position in the group, according to the people. The partners are reaching out to other wealthy individuals and families to join the bid, the people said.

Cerberus would then form a special committee of investors of the private-equity firm who, along with the Cerberus board, would evaluate any bids. The bidding partners wouldn’t be part of that review process. The Cerberus group would withdraw from the bidding if a suitor tops its offer by 10% or more, the people said. The group wouldn’t receive a breakup fee.

That story also reports that 16 potential bidders have looked at the Freedom Group’s financials. The auction is being run by investment bank Lazard Ltd.

A follow-up story in the Wall Street Journal revealed some of the potential bidders for the Freedom Group who have examined the company’s financial information.

Smith & Wesson Holding Corp. and Sturm, Ruger & Co. have asked for detailed information on Freedom Group, the people said. Alliant Techsystems Inc., an aerospace and defense company that also makes ammunition and firearms accessories, has also expressed interest, they said.

While both Ruger and S&W are firearms manufacturers, this would mark the first move into firearms manufacturing for Alliant Techsystems. ATK currently makes Federal and Estate ammunition along with Alliant powder and a whole host of components such as Speer and CCI. While not mentioned, I think it would be conceivable that FN-Herstal which manufactures both Winchester and Browning sporting arms might be interested as well.

UPDATE: Frank W. James has a very perceptive comment over at SayUncle regarding the interest shown by Ruger, ATK, and S&W in the Freedom Group. In essence, they are using the opportunity to examine Freedom Group’s books not to buy the company but to compare their costs to those of Freedom Group. In other words, they are getting competitive intelligence for free.

Hornady Steps Up

Like firearms manufacturers Ruger and Smith & Wesson, Hornady, makers of ammunition, components, and reloading equipment, has stepped up to the plate with their own gun rights letter generator. The letter is a bit different than the others but it still can be sent to Congress, the State House and Senate, and other state level officials. More importantly, unlike Ruger and Smith & Wesson, the message can be edited and you can add in your own verbiage.

I know this is not the same as a personal letter that is mailed or faxed. Nonetheless it helps build numbers and numbers are important. The Ruger letter has been sent over 4.9 million times.

Here is their basic message that you can customize as you see fit. The message is stronger and more to the point than either of the letters from Ruger and S&W.

As a voter who believes in the U.S. Constitution, I am writing to express my views on gun control legislation currently being discussed in every level of government. I am one of over 100 million law-abiding American citizens who responsibly owns firearms for target shooting, hunting, personal and home defense, and collecting. I care deeply about the Second Amendment, and I am closely monitoring legislation that would restrict my right to keep and bear arms.

I am saddened by the tragic events in Newtown, Connecticut, but I believe that efforts to impose new restrictions on me, a lawful and responsible gun owner, are misguided and unwarranted. The so-called “Assault Weapons Ban,” which for a decade restricted the sale of semiautomatic rifles and limited magazine capacity to ten rounds, did not reduce crime, according to a report by the U.S. Department of Justice. And since the expiration of the ban in 2004, violent crime has declined.

Your focus should be on real solutions to the problem of misuse of firearms, such as strengthening mental health care and improving the quality of data supporting the National Instant Criminal Background Check System (NICS).

Do NOT pass more gun or magazine laws; instead, work to enforce the thousands of gun laws already on the books and help step up prosecution of criminals who commit violence and misuse firearms.

We need to be calling, faxing, and writing weekly to all of our elected representatives. We may not have the billions of Mayor Bloomberg to buy out of state congressional seats but I learned a long time ago that money, though important, isn’t everything in politics.

Smith & Wesson Steps Up

First it was Ruger who provided an easy way to contact public officials about gun control. Now it is Smith & Wesson. They now have a page where you can send a pro-gun message to your elected officials in both DC and your state capitol.

I’m glad to see gun companies stepping up for gun rights and not making secret deals with administration officials. I don’t think we are going to see Smith & Wesson make the same mistake that they made during the Clinton Administration.

If you haven’t used either the Ruger or Smith & Wesson pages to send a message, why not?

And Gun Control Would Have Prevented This How?

Perhaps the gun prohibitionists would care to explain this and how any new gun control laws would have kept these guns off the street.

Truck driver Elliot Perez and his accomplice Michael Murphy were indicted in US District Court in Bridgeport, CT for stealing 111 firearms from Smith and Wesson.

According to the indictment against them, on November 8, Perez had a scheduled delivery of guns to pick-up at Smith & Wesson in Springfield. He was supposed to pick up five boxes of firearms to bring back, but ended up taking an additional three. Driving back down to Connecticut, he allegedly stopped at his Bridgeport home and met with Murphy before bringing the truck to his company’s warehouse in Stratford, where he unloaded only the five that he was supposed to deliver.

The indictment charges that on November 15, Perez and Murphy sold one of the stolen guns to another individual. Five days later, when questioned by ATF special agents, Perez allegedly lied and said that a “black male” at Smith & Wesson had instructed him on which boxes he was supposed to load onto the truck, adding that he had dropped off all of the cases of guns at the company warehouse.

At the time of the two men’s arrests days later, Stratford Police had only been able to recover 28 of the stolen guns.

Charges include conspiracy, possession of stolen firearms, trafficking, and making false statements to a law enforcement officer.

Perez was not an employee of Smith and Wesson. He worked for a trucking company contracted to handle transportation services for S&W.

As The Stock Markets Tumble….

The stock market is seeing an across the board sell-off today. As I write at approximately 12pm EST, all major stock market averages – the Dow, S&P 500, and the NASDAQ – are down approximately 2.3%. Part of it is news from Europe that a recession there is all but a certainty and part is the election results along with the “fiscal cliff”.

Coal stocks, as might be expected given Obama’s jihad against coal, are down even more.

But guess what two companies are seeing strong increases in their stock prices.

That’s right – Ruger and Smith & Wesson. Currently, Ruger (RGR) is up $2.40 or a 5.38% increase while Smith & Wesson (SWHC) is up 77 cents or an 8.14% increase over yesterday. Both of these are pure plays on the firearms market.

The ammo makers Olin (Winchester) and ATK (Federal) are down. However, they have other businesses besides just ammunition production. ATK, in addition to making ammunition, is a significant defense contractor while Olin is a big producer of chlor-alkali.

UPDATE: Bloomberg TV has noticed just how well gun makers’s stock is doing today as well.

25 Months And Counting

June 2012 marks the 25th straight month in which the number of NICS checks made during the month surpassed the number from the prior year.

Graphic by NSSF

From NSSF:

The June 2012 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 846,437 is an increase of 24.5 percent over the NSSF-adjusted NICS figure of 679,840 in June 2011. For comparison, the unadjusted June 2012 NICS figure of 1,290,210 reflects an 11.4 percent increase from the unadjusted NICS figure of 1,157,714 in June 2011.

Graphic by NSSF

As the NSSF noted, June 2012 was a 24.5% increase over June 2011. However, the difference between June 2012 and the earlier years is very significant. June 2009 and 2010 look to have about 600,00 adjusted NICS checks or a quarter-million less than this year. That is a large difference!

It should be noted that NICS checks are not a perfect correlation with firearms sales but are a strong indication of general trends in firearm sales. Some states such as Kentucky, Iowa and Michigan use the NICS system for their CCW permit application checks as well as checks on active CCW holders. Conversely, in states such as North Carolina where the Concealed Handgun Permit is an approved substitute for a NICS check, purchases by permit holders will not be counted.

I don’t think we can know conclusively if this continuing trend in the increase of NICS checks is due to the fear of an Obama reelection or just the rise of Gun Culture v2.0. I do know that strong sales have been reflected in the stock prices of companies like Smith and Wesson. Today, the stock hit a 52-week high at $9.50 per share which reflects a four-fold increase in share price.