Scottsdale-based Taser International is preparing a campaign to improve its public image amid controversial reports about its electricallycharged stun guns and a decline of more than $3 million in estimated first-quarter revenue.
Taser International shares fell $1.58 Friday or 13 percent and closed on the Nasdaq stock market at $10.42 following the reported decline from the company’s estimated first quarterly sales of $10 million from $13.6 million.
Financial analysts polled by Thomson First Call had estimated the first-quarter average target revenue for Taser International at $13.6 million.
The stock, one of the most heavily-traded on the Nasdaq, has lost nearly two-thirds of its value from a late December high of $32.59.
"Significant adverse publicity in the first quarter has caused what we believe to be a temporary disruption in our sales pipeline," said Rick Smith, Taser’s chief executive.
He said the company is taking two major steps to fight the negative publicity, including a "public awareness campaign" to distribute safety information and a team of advisers to help the company deal with education and public relations issues.
"Taser has successfully begun to vigorously defend against the myriad of erroneous and misleading information in the public domain with data and testimony whenever requested," Smith said.
Controversy over the stun guns have prompted police departments across the nation to reconsider whether the weapons are necessary. Police in Chicago, Ohio and Florida recently pulled the weapons from officers’ hands while further safety studies are made.
The International Association of Police Chiefs in February issued a report to its 20,000 members across-the-nation that encouraged them to re-examine procedures for using the stun guns.
It was the first time a national law enforcement association called for a review of the weapon, which is used by more than 100 police departments in Arizona and nearly all departments in the Valley. So far, more than 6,000 police departments in the United States, Canada and internationally are using the company’s stun guns.
The Securities and Exchange Commission is also investigating Taser International’s safety claims and, thus far, the company has been named as a defendant in more than a dozen civil lawsuits by shareholders who allege investors were misled by"materially false and misleading statements" about the safety of its stun guns.
Meanwhile, a report released Friday by Amnesty International noted there were 103 Taser-related deaths in the United States and Canada between June 2001 and March 2005.
The number of deaths increased 94 percent since June 2001, according to the human-rights group.
In the first three months of this year, there were 13 Taserrelated deaths, said the report, and six deaths during the same period in 2004.
Amnesty International’s report challenges the company’s claims that the stun guns have saved more than 6,000 lives.
Tom Smith, Taser International president, responded to Amnesty International, saying, in part: "The Taser is the safest way to end violent confrontations for law enforcement."
He also cited recent reports from the Home Office of the United Kingdom that stated the newest version of the stun gun, the X26 is safe and authorized its use among law enforcement officers throughout England and Wales.
Taser International stocks rose by more than 15 percent following England’s Home Office report.
The company also said two other recent positive reports by the Potomac Institute for Policy Studies and the United States Department of Defense Human Effects Center of Excellence supported the view that their stun guns are "generally safe."