Smith & Wesson president moves to Nasdaq for more marketplace

Journal Record, The (Oklahoma City),  Jul 24, 2006  by Kevan Goff-Parker

Tags: Nasdaq Stock Market Inc.

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When Michael F. Golden first became Smith & Wesson's president and chief executive officer in 2004, he'd already held several top positions with companies like Black & Decker and Kohler, but he'd never fired a gun.

But that's Golden. He's a man full of energy and surprises. On Thursday, the Smith & Wesson Holding Corp., parent company of legendary 154-year-old Smith & Wesson Corp., announced it had moved from trading its common stock on the American Stock Exchange to trade on the Nasdaq Global Select Market under the ticker symbol SWHC.

The American Stock Exchange did a good job for us, Golden said Friday during a visit to the H&H Gun Range and Shooting Sports Outlet in Oklahoma City, but some of our investors encouraged us to move to the Nasdaq. Some have statements in their charter that they will only buy from the Nasdaq.

Today, Golden is busy blasting away the competition by aiming Smith & Wesson's new leadership team at strategic initiatives designed to quickly expand the firearms and accessories business's market share. When he joined Smith & Wesson in December 2004, he said the appeal for him was in the brand.

When I did sales-and-marketing due diligence on the company, I found it was undermarketed and undermanaged, Golden said. The brand wasn't being capitalized on. We had 87-percent brand awareness, and research shows that the Smith & Wesson brand is positive, so we have a 154-year-old legendary brand with leverage to grow a company.

But first, he had to get that pesky nonshooting background out of the way. Golden said when he started with the company, Smith & Wesson representatives took him to a gun range and walked him through what he needed to know.

Doing the research

Golden said he and his team, many of whom have diverse talents and backgrounds outside of the industry, performed research on the Smith & Wesson brand with 4,000 people.

About 3,500 of them were hunting and shooting sports enthusiasts, Golden said. The other 500 were like me and had never shot a gun before. The research showed that Smith & Wesson was listed by the group as No. 1 when it came to revolvers and pistols and No. 3 when it comes to shotguns, hunting riles and tactical rifles - at the time, we didn't make these. We were listed at No. 3 in ammunition and No. 4 in alarm systems.

He said when he came aboard Smith & Wesson, the company's strategic plan was limited and focused on its sporting goods channel, federally licensed dealers in the U.S.

We believe Smith & Wesson stands for much more than sporting goods, Golden said. It stands for safety, security, protection and sports. We changed our business strategy. Safety, security, protection and sports are big and gives us a lot of opportunity to grow our company. Our growth strategy is one, handguns; two, diversify the company; and three, ubiquitous - how do you market the brand?

He said with Smith & Wesson handguns, 90 percent of the business was in the sporting goods channel.

If you took a map of the U.S. and split it down the middle, the eastern states used our sales personnel and the western side used manufacturer representatives, Golden said, but our own salespeople sold three times as much as independent manufacturer representatives. We needed effective salespeople to grow, so we eliminated all the independent manufacturer representatives and hired our own Smith & Wesson representatives. It worked perfectly.

During the first quarter and second quarters of 2005, sales and sporting goods results were up 8 percent, but during the third quarter when Smith & Wesson had all their own salespeople, their sales were up 24 percent.

We were up 32 percent in April at the end of the final quarter, Golden said. It worked just like I thought.

He said he has traveled to lobby in Washington, D.C., more than half a dozen times during the past year.

Did you know the U.S. military doesn't use a single handgun manufactured in the USA? Golden asked. They use the Beretta made in Italy. No, that doesn't make us happy.

New opportunities

He said when he was hired, he discovered Smith & Wesson did not have any contracts with the federal government, or even agencies or a lobbyist working for the company in Washington, D.C.

The U.S. government bought 100,000 pistols from Glock in Austria to arm the Iraqi military and police, Golden said. In 2007, there will be a contract shift. They will change from a 9 mm to a .45- caliber pistol. It is a large contract, and we plan to position ourselves to get that 10-year contract. We have U.S. jobs and U.S. intellectual property. Austria doesn't even have a soldier on the ground and doesn't help with our war effort.

He said he visited with consulting firms in Washington, D.C., to help Smith & Wesson with short-term procurement and soon learned of his company's popularity with congressional leaders. Smith & Wesson eventually hired Ernest Langdon to lobby for them. He's a retired marine who worked for Beretta and is a renowned pistol shooting champion who lives in Washington, D.C.