Problems Dog S&W over Chairman’s Past?
by Dave Workman
Senior Editor
Just as this issue of Gun Week was going to press, there were indications that an “announcement” from the board of directors relating to revelations about recently-named Board Chairman James J. Minder was “imminent.”
Last month, just as the Shooting, Hunting and Outdoor Trade (SHOT) Show was opening in Las Vegas, a story appeared in the Phoenix-based Arizona Republic that detailed Minder’s troubled past, including prison terms for armed robbery in the 1950s and 1960s. However, reports also noted that Minder has led an exemplary life since he emerged from prison in 1969.
As widely reported, Minder never denied his convictions for armed robbery or the time he spent in prison. When he learned the story was about to break, he offered his resignation to the company’s board of directors. They reportedly turned it down.
One company official told Gun Week at the time, “If we need to deal with the situation, we’ll deal with it.”
Minder did not return calls to Gun Week for this story.
But his dilemma only seemed to be part of a larger picture at Smith & Wesson that began unfolding last year. In the past several weeks, there have been board changes, reports of a “probe” by the Securities and Exchange Commission, and a transfer of corporate functions from the holding corporation’s offices in Arizona to Springfield, MA.
Seems like Smith & Wesson—the company whose former British owners so enraged many American gun buyers with their much-maligned “deal” with the Clinton White House regarding gun sales that a boycott was mounted—just can’t escape the headlines.
Minder operated a consulting firm out of his home in Scottsdale, AZ. He had previously served on the board of Saf-T-Hammer, the firm that acquired Smith & Wesson from the British owners in 2001 for what amounted to pennies on the dollar. Saf-T-Hammer became Smith & Wesson Holding Corporation, noted Bob Scott, one of the principles involved in the purchase, and now a director on the board. Many in the gun community saw this as great news, as the company would now be back under American ownership, and it appeared from the outset that the new owners were no more interested in the Clinton agreement than was the new Bush Administration.
Since his release from prison, Minder has reportedly built a solid career in business, and also established himself as something of a mentor by helping developmentally disabled youngsters. He and his wife, Susan, founded a Michigan-based counseling and mental health service called Spectrum Human Services. That agency eventually grew to have hundreds of employees and a multi-million-dollar budget, according to The Arizona Republic.
Minder told the newspaper that he had come from a broken home, but during his final years in prison, had turned his life around. He reportedly earned a Bachelor of Science degree in mechanical engineering, a BA degree in sociology and a Masters degree in social work, all from the University of Michigan.
Before news about Minder broke, the company had been mentioned in business columns several times over the preceding weeks, primarily with announcements that AMEX had granted extensions for filing financial reports with the SEC. The most recent of those came Jan. 2, when it was disclosed that an extension to Jan. 9 had been granted for filing quarterly reports for the quarters of Fiscal Year 2004 ending July 31 and Oct. 31, allowing the company time to amend those reports.
On Jan. 21, it was announced that Smith & Wesson Holding would be moving its executive offices to the plant facility in Springfield, MA, beginning in February. However, the holding corporation will maintain offices in Scottsdale.
It was then that changes in the board of directors were also announced, with Minder named chairman and Roy Cuny continuing as a member of the board and as president and CEO of the Holding Corporation and of Smith & Wesson Corp. Only six weeks before, Cuny had been named chairman.
At that time, the company also announced the departure of Jim Staudohor from the board and as chair of the Audit Committee. That announcement came after Sherry L. Noreen had stepped down as board secretary late last year.
Gun Week’s industry writer Robert Hausman noted in his Feb. 1 story that the company’s financial statements from the fiscal year that ended April 30, 2002 are being re-audited. He also reported that the staff at the American Stock Exchange (AMEX) had accepted Smith & Wesson’s revised plan for returning to compliance with AMEX’s continued listing standards regarding restatement of the company’s financial statements for the fiscal year ending April 30, 2002.
One source assured Gun Week that all the company’s financial statements are now up to date.
Not all the news is bad, either. Smith & Wesson enjoyed heavy attention from gun retailers at last month’s SHOT Show, and also had a good year in 2003 with the introduction of the S&W .500 Magnum revolver.
This year, according to staffers interviewed at the SHOT Show, continued attention to the big magnum revolver, along with increasing interest in the company’s Model 1911 introduction and the new 1911Sc, a Commander-size pistol with a lightweight Scandium frame, is breathing plenty of life into the company.
During an interview at the show, Scott observed, “Our basic business formula is stronger today than it has been in the 15 years I’ve been associated with (the company).”
The company has two manufacturing facilities, in Springfield and in Houlton, ME. It is at the second plant where the company manufactures Walther PPK pistols and .22-caliber handguns, and Smith & Wesson handcuffs. Scott said plans that might have expanded Smith & Wesson’s brand name into other arenas have been shelved, and the company is “concentrating on its core business: building firearms.”
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