Taser’s terrible 2005 - East Valley Tribune: Business

Taser’s terrible 2005

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Posted: Friday, December 30, 2005 4:45 am | Updated: 8:00 am, Fri Oct 7, 2011.

No one will be cheering as loudly as the owners, shareholders and employees of Taser International when the new year enters and the old year becomes history.

That’s because the Scottsdale-based stun gun manufacturer in 2005 was pelted with ongoing attacks from virtually all directions, including the Securities Exchange Commission, the courts, Amnesty International, the media, the Arizona Attorney General’s Office and even some of its best customers — law enforcement agencies.

Maricopa County Sheriff Joe Arpaio, whose voice regularly attracts public and media attention, joined the list of critics when he said he would look at stun guns made by another company following complaints about the safety of Taser International’s.

As a result blamed by the company on the ongoing, negative environment, Taser International ended 2005 at the top of the list of "Ten Worst Performers," a rating by Fortune Magazine’s Online Marketing that shows the firm’s share value plummeted by 81 percent compared with NutriSystem, the top of the "Ten Best Performers," whose value increased by 1,384.90 percent in 2005.

The value of Taser International stocks, meanwhile, have steadily dropped from a trading high (adjusted for splits) of $33.45 in 2004 to a monthlong average of less than $7 as the closing bell for 2005 clangs at the Nasdaq today.

"Yes, this is definitely a year we’re looking to put behind us," said Tom Smith, company president.

Smith as well as market analysts, however, believe 2006 will bring good news for Taser International, particularly an increase in share values, higher revenue and, just as importantly, an improved public image.

"We’re expecting the new year to bring an increase in sales, especially in Europe, less courtroom activity and we’ll probably be hiring more employees," Smith said.

He referred to the growing number of lawsuits filed by victims of the stun gun in 2005.

The introduction soon of the Taser Cam, a stun gun equipped with a video camera, is expected to reduce the complaints — and lawsuits — since it will be recording the scene before, during and after the firing of the 50,000-volt disabler, Smith said.

Taser International in 2005 was the target of more than a dozen lawsuits, several of which have been thrown out by judges and a few that judges and jurors have ruled in favor of the stun gun maker.

"We’re hoping the Taser Cam will answer a lot of questions that have been raised in lawsuits," Smith said.

As for 2006, Smith predicted: "It’s going to be an exciting and a good year for us."

The stun gun fires two, barbed hooks a distance of 15 feet that when attached to a person’s clothing and the trigger is squeezed, emits electricity for upward of six seconds.

Taser International began operations in 1993 and grew substantially through the years until 2004 when it reached net earnings of $18.9 million that eventually dropped to $168,000.

It shipped more than 16,000 orders in 2004, but the numbers dropped significantly in 2005.

Stun guns are sold through 28 law enforcement distributors, 25 commercial distributors and to private citizens.

They are used in 43 countries, including nearly all law enforcement agencies in the East Valley, including the sheriff’s office.

Joe Blankenship, vice president of research for Source Capital Group, said he shares Smith’s confidence for the coming year.

"They’ve crossed over the bad parts of the year," Blankenship said. "Now, it’s a matter of rebuilding and emphasizing the nonlethal aspects of disabling suspects.

"I think 2006 will be a favorable year for Taser International for sales and its stocks should improve in value by this time next year," he said.

Good, bad news for Taser

Here are some of the reports considered negative by the company — and the comparatively few positive — and debatable bookmarks — posted by the Scottsdale stun gun maker in 2005:

The downside:

• Failure to file its third quarter financial reports caused the SEC to threaten to delist the company from Nasdaq and renamed the ticker name from "TASR" TO "TASRE." The "E" was later dropped after the company filed its reports.

• Arizona Attorney General Terry Goddard forced the company to update its marketing information more accurately when describing what a stun gun does. The AG asked for the changes because of safety issues. The company eventually complied.

• The Police Executive Research Foundation, which represents law enforcement agencies, recommended limited use of the stun gun. At about the same time, eBay agreed to halt the sale of Taser International stun guns from its Web site to New York state.

• Amnesty International drew international attention when it reported more than 100 deaths were caused directly by the stun gun, a charge the company flatly denies and noted that most of the victims had been using drugs or alcohol when police fired a Taser on them.

• Taser International in September fired its accounting firm and hired another.

The upside:

• Paradise Valley police purchase $35,000 worth of stun guns.

• A lawsuit filed against the company by a former sheriff’s deputy who said he was permanently injured while training with a stun gun was dropped.

It depends which side you are on:

• A report filed Sept. 23, 2005 noted it was proper for Arizona State University police to use the Taser stun gun for the first time to handle rowdy crowds during the 2004 Fiesta Bowl. Security guards at Tempe schools are given Taser stun guns.

• Taser International files a lawsuit against Gannett Publishing and the Arizona Republic for writing stories that, the firm said, contained false information.

• The company introduces an electrical landmine that could be used to temporarily halt intruders rather than blow them to bits.

  • Discuss

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