Handgun sales up by 27 percent

SPRINGFIELD, Mass. – The parent company of Smith & Wesson reported a 27 percent increase in handgun sales over the past year, but said Thursday that one-time charges sent profits skidding.

Smith & Wesson Holding Corp. reported profits of $1.4 million, or 4 cents per diluted share for the fiscal year that ended April 30, compared to profits of $15.7 million, or 44 cents per diluted share, in fiscal 2003. However, the company said its profit figures for 2003 were buoyed by a one-time tax benefit of $12.4 million.

In its annual report, the company said its profits in fiscal 2004 were reduced by $4.3 million because of several one-time costs, including closing its Scottsdale, Ariz., offices, discontinuing Crossing, its money-losing home decor and clothing catalog, and selling its security consulting unit.

The company also said it incurred $2.5 million in accounting and legal fees in the restatement of its financial results for fiscal 2002 and a portion of 2003 and an ongoing investigation by the Securities and Exchange Commission.

Closing the Arizona offices and moving the company’s headquarters back to Springfield, where it has made guns for more than 150 years is expected to save the company $1 million a year. The company also said it lost $1.9 million during the fiscal year on the catalog and security consulting operations, excluding closing costs.

“We have refocused our emphasis on our firearms operation,” Roy Cuny, president and CEO, said in a prepared statement.

The company has about 650 workers at its Springfield plant and another 100 at a pistol and handcuff plant in Houlton, Maine, according to 2003 figures.

Cuny took over in December after Chairman Mitchell Saltz and President Colton Melby, who had engineered the purchase of the company in 2001, stepped down in the wake of the Securities and Exchange Commission inquiry.

Saltz and Melby had run an Arizona trigger lock company before buying Smith & Wesson from British conglomerate Tomkins PLC for $15 million plus $30 million in assumed debts and taking it public.

The company reported net sales of $117.9 million for all of its products, a 20 percent increase over fiscal 2003. In 2002 the company had reported sales of $79.2 million.