Business Holding Collective Breath

Today is Election Day. A Catholic organization also reminded me, it’s All Souls Day, the day prayers are offered on behalf of all the souls of the “faithfully departed”.

Hopefully some of the prayers offered up today, whatever your faith, will be for wisdom in the elections and for the well-being of our nation and those of us still here. The elections end tonight, but the contentiousness of the political climate will not go away, despite the promises from any candidate – win or lose.

This year, campaigns have been waged with no quarter asked or given. That bitter of campaign lingers on.

If you’re reading this before the polls close where you are, I can only encourage you to stop reading and go cast your ballot. That having been said, there are things happening in the outdoor industry, and unfortunately, not all of them are good.

Yesterday was the deadline for the Environmental Protection Agency to rule on a petition asking the EPA to ban lead from all fishing tackle. The original petition asked the lead also be banned in ammunition, but that portion has already been denied by the EPA.

In California, U.S. Representative Duncan Hunter has challenged the closure of the 29-acre shooting range on the Miramar military base. The closure was blamed on concerns about lead and other toxic contamination, but Hunter’s questioning the Marine Corps decision, especially in light of the fact the environmental analysis that was the basis of the decision declared the acreage important to the endangered fairy shrimp. Here’s Hunter’s rub: the analysis classified a dry creek bed a “regulated waterway”. We’ll keep you posted on this one.

In the shooting industry, a resignation, a repurchase and a pair of downward indicators for overall industry revenues.

Smith & Wesson’s (NYSE: SWHC) Executive Vice President and Chief Financial Officer William F. Spengler has resigned, effective November 12. He’s taken the position of president at “a publicly traded company in the phytochemical and natural products industry”. The search is underway for a new CFO. Vice-President of finance for the firearms division John Dineen will serve as acting CFO, and Deana McPherson moves from vice president and corporate controller to interim chief accounting officer.

Ruger (NYSE: RGR) has declared a dividend for the latest quarter. You can read the details in today’s news section, but the company has also announced what analysts will likely see as a positive indicator: the company has expanded its stock repurchase program to $10 million. Buying your own stock is a strong indicator of continued success.

Olin (NYSE: OLN) reports a diminished level of demand for their Winchester products for the third quarter. Third quarter sales in the Winchester division dropped from $168.2 million in 2009 to $157.5 million for 2010. Commercial earnings were still there, but they dropped from last year’s Q3 record of $23 million to $18.8 million.

The strongest indicator of the softening of the firearms market comes from the latest Firearms and Ammunition Excise Tax Collection report issued by the Treasury Department. Manufacturers reported excise tax liabilities of $102.2 million in Q2 2010. Compared with the same period in 2009, that’s a 16.29 percent reduction.

Here’s the way those numbers shook out:
$ 31.84 million – pistols and revolvers (down 5.1 percent)
$28.71 million for other guns (down 32.25 percent)
$41.65 million for ammunition (down 9.77 percent)

Later this afternoon, I’m off to Louisville, Kentucky and the National Association of Sporting Goods Wholesalers (NASGW) Annual Meeting and Exhibits. There, I’ll be talking with manufacturers about new offerings for 2011 and quizzing wholesalers about their observations on retail outlooks for next year.

As always, we’ll keep you posted.

–Jim Shepherd
www.shootingwire.com