Smith & Wesson is back! recovering from devastating losses, this 151-year-old company is building momentum in the marketplace!

Shooting Industry, May, 2003 by Russ Thurman

In January, bitter cold winds and heavy s shows gripped the Springfield, Mass., headquarters of Smith & Wesson with sub-freezing temperatures. Inside, however, things were hot.

Smith & Wesson was launching its 2003 comeback offensive. New executives were in place, new guns were rolling Out, manufacturing was increasing and there was a noticeable upbeat enthusiasm -- plus, a lot of smiles.

What a difference 20 months makes. For the 151-year-old company, its emergence from the devastating losses of 2000 and part of 2001 is nothing short of remarkable. In March 2000, then-Smith & Wesson President Ed Shultz signed the Clinton Administration's "Agreement." The backlash sent the company's sales plummeting. Many experts thought the company was doomed.

Then in early 2001, Saf-T-Hammer bought Smith & Wesson from Tomkins, the British business conglomerate. Smith & Wesson was "American Owned" once again. Smith & Wesson Holding Corp. was formed with Mitchell Saltz, owner of Saf-T-Hammer, as the new corporation's chairman and CEO. Colt Melby, a major investor in Smith & Wesson, is the corporation's president and COO.

At Springfield, Bob Scott was the new president of Smith & Wesson. He had a tough job ahead of him.

"The company had just finished a year with a loss of $40 million in sales," Scott said. "We were facing a lot of challenges, including a lot of animosity in the marketplace."

Scott made changes, reduced the company's workforce, redirected the company's manufacturing efforts, and set about repairing damaged relationships in the industry.

"We thought we'd be lucky if we broke even the first year," Scott said. "Well, we made money that first year. We didn't make the $40 million back, but we made money."

More than money was made. Trust in the company continued to build, in and out of the industry. In April 2002, less than a year after taking over Smith & Wesson, Bob Scott was presented the Shooting Industry Award, the only honor given to an individual by the Shooting Industry Academy of Excellence. Smith & Wesson was back in the family.

In the meantime, Smith & Wesson Holding Corp. aggressively pursued licensing of the company's name. There are now Smith & Wesson fine art prints, watches, home and personal security devices, body armor, safes, footwear, golf clubs and more.

"We are expanding our product portfolio, increasing our licensing fee revenue and maximizing the Smith & Wesson brand," said Saltz. "All of these efforts, reflected in our strategic plan set in May 2001, are successfully contributing to our planned financial growth."

In March of this year, the holding corporation reported revenues for the nine months ending January 31, 2003 of $69 million, an increase of 30.7 percent from the same period last year. Corporate officials say the increase was primarily a result of an increased demand for handguns in the U.S. and the international market.

New Leadership

With increased sales and an upbeat enthusiasm, Smith & Wesson was well positioned to begin 2003. Early in January, a new president of Smith & Wesson took control of the company. Roy Cuny, although an outsider, brings a wealth of experience to Smith & Wesson. As the president and COO of Peerless Manufacturing in Dallas, Texas, he returned the company to solid earnings, increasing the shareholder's value by approximately 400 percent.

"He brings a great deal of experience and ability to the company," said Scott, who is now the chairman of Smith & Wesson. "He has a very open mind and a willingness to learn about our business. Unlike some who have joined the company with a lot of preconceived notions, he is quick to listen to other people's points of view. He's a great team player."

Cuny, who has degrees in business and mechanical engineering, is acutely aware of the "outsider" label. However, he says, there are plus and minuses to being a newcomer to the industry.

"The minus is that the outsider doesn't know the gun industry. It's also the biggest plus," Cuny said. "The gun industry, like so many industries, is primed for new ideas, new perspectives and the strength that an outsider brings."

What are the challenges Cuny sees facing Smith & Wesson?

"Like so many businesses, particularly in a soft economy, the big challenges are how to better service a rapidly changing market," Cuny said. "We are doing a host of things, both inside the company, as well as outside the market. We're also introducing a whole host of new products we think the market will embrace."

Cuny talks about using the present Smith & Wesson "launching pad" to propel the business forward.

"One of the compelling aspects of the Smith & Wesson family is the development over 151 years of an incredible launching pad for growth. Some of the key launching-pad elements are the people. The biggest asset the company has is its people. Smith & Wesson, over a very long period, has grown and brought in very dedicated, passionate people. We are now going to build even better teams."

Scott takes on new duties as chairman of Smith & Wesson.