Industry News: Volume 5, Number 3

Smith and Wesson Reports Third Quarter Profits
Smith & Wesson Holding Corp. reported that third-quarter sales were up 39 percent compared to the same period last year.  “Performance gains were driven by continued robust consumer demand for firearms as well as increased sales of our M&P polymer pistols and modern sporting rifles.  Based on incremental improvements in expanding our production capacity, which will be further deployed in the fourth quarter, we are increasing our financial guidance for the full fiscal year 2013,” said President and CEO James Debney.

Safariland Acquires Certain Assets of Arveka TGS UAB
The Safariland Group acquired body armor and personal protection equipment assets from Arveka TGS UAB.  Arveka TGS, a design and manufacturing operation producing protective products and equipment primarily for law enforcement and military customers, was founded in July 2010.  Located in Kaunas, Lithuania, Arveka has approximately 17 employees.

“I am very excited to reunite with the team at Arveka TGS,” said Scott O’Brien, President of Safariland.  “We were extremely impressed with the depth and quality of the proprietary products Arveka TGS had designed for their line of body armor products, which is why we pursued this acquisition.”

Caracal Issues Recall for Model C Pistols
Caracal International, LLC has been informed about an incident in which the slide of a Caracal Model C pistol malfunctioned and broke during firing causing personal injury.  Caracal is thoroughly investigating this incident to determine the cause(s) and is initiating a voluntary recall to protect the safety of their customers.  Caracal aims to conclude its investigations as quickly as possible.  Updates will be posted on Caracal’s website to include further information on the limited number of defected Caracal Model C pistols.  Until this investigation is concluded and if you own or have access to a Caracal Model C pistol, PLEASE DO NOT LOAD OR FIRE THE CARACAL MODEL C PISTOL.  Customers may choose to wait until more information with respect to the investigation or arrange to have the pistol replaced free of charge.

Uncertain future for Armscor
South African state armaments corporation Armscor may cease to exist if a proposal in Roelf Meyer’s draft Defence Review goes ahead, while the head of Armscor has said the organisation is a mere shadow of its former self, prompting a controversial re-examining of the organisation.

In its last annual report Armscor indicates it has not had a smooth passage in recent times.  Board chairman Lieutenant General (ret) Maomela Moreti Motau notes in the report that, “The once glorious Armscor, [the] flagship of strategic capabilities of the South Africa National Defence Force, is a mere shadow of its former self.”

Looking forward, Motau said the new board embarked on an introspection exercise to determine whether it would preside over the continuing decline of the corporation, or take it to a higher plane to reclaim its legislated position (in terms of the Armaments Corporation of South Africa Limited Act, Act 53 of 2003).

Hornady Addresses Rumours on Ammo Shortage
The current political climate has caused extremely high demand on all shooting industry products, including ours.  Empty retail shelves, long backorders, and exaggerated price increases on online auction sites – all fueled by rumors and conjecture – have amplified concerns about the availability of ammunition and firearms-related items.  If the information you hear doesn’t originate from Hornady Manufacturing, don’t believe it.

The following are some of the rumors we’ve been hearing, and questions we’ve received:

Have you stopped production, or has the government forced you to stop?  Not at all.

Did you stop selling bullets so you could only make loaded ammunition?  Absolutely not.

Since we can’t find your product you must be selling it all to the government.  Nope, less than 5% of our sales are to government entities.

Why can’t you make more?  Ramp up production?  Turn on all the machines?  We’ve been steadily growing our production for a long time, especially the last five years.  We’ve added presses, lathes, CNC equipment, people and space.  Many popular items are produced 24 hours a day.  Several hundred Hornady employees work overtime every week to produce as much as safely possible.  We are producing as much as we can; much more than last year, which was a lot more than the year before, etc.  No one wants to ship more during this time than we do.

U.S. State Department Requests Comments on USML Category IV
The proposed rule revises USML Category IV, which covers the export of launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines.  The proposed change in regulation would remove demolition blocks, blasting caps, and military explosive excavating devices to the Department of Commerce jurisdiction.  The State Department welcomes input to ensure the USML and the CCL together control all the items that meet Wassenaar Arrangement commitments.  The public is asked to identify any potential lack of coverage brought about by the proposed rules for USML Category IV.  The key goal of this rulemaking is to establish a ‘‘bright line’’ between the USML and the CCL for the control of these items.  The public is asked to provide specific examples of launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines whose jurisdiction would be in doubt based on this revision.  Additional information can also be found online at www.gpo.gov/fdsys/pkg/FR-2013-01-31/pdf/2013-01901.pdf

2013 SHOT Show Sets Attendance Records
The 2013 SHOT Show set new attendance records and marked the 35th anniversary of the event.  The largest trade show of its kind in the world and the fifth largest trade show in Las Vegas, the SHOT Show attracted a record overall attendance of 62,371, including a new high for buyers and more than 2,000 media representatives.  More than 1,600 exhibitors filled booth space covering 630,000 net square feet.  The show attracted industry professionals from all 50 states and 100 countries.  Exhibitors and attendees alike said the SHOT Show is critical to the success of their businesses.  The $4.1 billion firearms and ammunition industry supports many small businesses and helps preserve the more than 200,000 jobs associated with the shooting sports. NSSF added significantly to its membership ranks at the show, pushing its overall total of supporters to more than 8,300.

Pennsylvania Man Sentenced for Illegally Exporting Goods
Timothy Gormley, 52, of North Wales, PA, was sentenced to 42 months in prison for five counts of violating the International Emergency Economic Powers Act (IEEPA).  Gormley was employed by Amplifier Research, in Souderton, Pennsylvania, a manufacturer and supplier of microwave amplifiers with both domestic and foreign customers.  On November 30, 2011, the Department of Commerce (DOC), Office of Export Enforcement, received a voluntary self-disclosure from Amplifier Research.  Many of their products are classified under an Export Control Classification Number and require a license for export to most destinations outside of Europe.  These amplifiers are controlled for National Security reasons, and have application in military systems, which include radar jamming, weapons guidance systems, and other uses.  Amplifier Research became aware that Gormley had committed numerous violations of government regulations, between June 7, 2006 and June 28, 2011.