SPRINGFIELD, Mass. (AP) -- Firearms maker Smith & Wesson Holding Corp. said Thursday that it plans to sell off its perimeter security business to focus on its core gun manufacturing business.
The Springfield, Mass.-based company said it is exploring alternatives for the sale of Smith & Wesson Security Solutions, which was privately held Nashville-based Universal Safety Response before it was acquired bySmith & Wesson in 2009.
Perimeter security businesses have deteriorated significantly since the acquisition in part because of reduced government spending, said CEO James Debney. The division provides security solutions in the defense, transportation, petroleum and chemical industries, as well as corporate facilities, airports and national laboratories.
"We believe its strengths could be better maximized as an independent company, or as part of a group of companies, focused entirely on the security solutions market," Debney said.
Until it's sold, the division will continue to operate, but as of Oct. 31 it will be reported as a discontinued operation in financial reports and not included in the financial results of continuing operations ofSmith & Wesson Holding Corp.
The decision to sell the unit will allow the gun maker to focus its financial, managerial and operational resources on expanding its presence in the firearm market, Debney said.
Smith & Wesson's core firearm business accounted for 92.5 percent of its revenue in the first quarter of its 2012 fiscal year, ended July 31. The company reported year-over-year firearm revenue growth of 18 percent and firearm unit growth of over 44.4 percent in the period.
Shares rose 2 cents to close at $2.62. They climbed 11 cents in after-market trading. Shares dipped to their 52-week low of $2.29 on Tuesday but recovered to close that day at $2.64. The highest point in the past year of $4.20 was reached last Dec. 6. Shares have fallen 38 percent since then.