November 2006

Downrange: 11/06

The Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) Modernization and Reform Act of 2006 (H.R. 5092), introduced by Reps. Howard Coble (R-NC) and Bobby Scott (D-VA), passed the United States House of Representatives on September 26 with a bipartisan vote of 277-131. H.R. 5092 was drafted in part to address recent BATFE abuses at Richmond, Virginia, gun shows, which were highlighted in hearings before the U.S. House Judiciary Committee’s Subcommittee on Crime, Terrorism and Homeland Security.

The BATFE Modernization and Reform Act establishes a more efficient system of administrative penalties for licensed dealers, manufacturers and importers of firearms. Prior to this bill, for most violations BATFE could only either give a federal firearms license (FFL) holder a warning or completely revoke his license.

Busy at Smith & Wesson. Smith & Wesson Holding Corporation (Nasdaq: SWHC), parent company of Smith & Wesson Corp., has added a new director with some "street cred" to its board.

Retired Rear Admiral David M. Stone, former assistant secretary of Homeland Security for the Transportation Security Administration (TSA), has amassed over 30 years of experience in national and homeland security, most recently as head of the TSA. Prior to his post at TSA, Stone was the first Department of Homeland Security federal security director at Los Angeles International Airport.

He is currently president and CEO of the Alacrity Homeland Group, a company that provides strategic consulting, government affairs and corporate development services in the homeland security sector.

Also, the company has entered into a licensing agreement with Wilsons Leather Holdings Inc., the leading specialty retailer of leather apparel and accessories in the United States. Under the terms of the agreement, Wilsons Leather will develop and market an exclusive line of Smith & Wesson leather jackets, as well as a range of accessory items including belts, handbags, and wallets.

Accessories and other areas of business have been good for S&W recently. Financial results for the first fiscal quarter ending July 31, 2006, showed revenue for the quarter increased 49.5 percent over the comparable quarter last year. Firearms sales for the quarter grew 54.0 percent over the comparable quarter last year, reflecting an 83.5-percent increase in Smith & Wesson pistol sales and a 73.0-percent increase in Walther pistol sales, according to Smith & Wesson investor documents.

Sporting-goods sales increased by 36.7 percent. Sporting-goods sales include new products such as the M&P polymer pistols and tactical rifles. M&P firearms also drove sales growth in the law-enforcement channel; sales doubled in the first quarter of fiscal 2007 compared to the same quarter last year. On a combined basis, law-enforcement and federal government sales were $10.9 million, a $7.4-million increase over the comparable quarter last year.