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Old August 1, 2015, 07:40 AM   #24
Urban_Redneck
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Join Date: June 23, 2013
Posts: 73
From the Sturm Ruger Q2 earnings call (last week)


Operator

And your next question is from the line of Andrea James. Please go ahead.
Andrea Susan James - Dougherty & Co. LLC


Thanks for taking my follow-up. There is a lot of industry chatter about this new army sidearm upgrade. And I just wanted to ask, do you plan on throwing a pistol into the ring, and then also in general, what's your take on the pros and cons of going after the professional market? Thank you.


Michael O. Fifer - Chief Executive Officer & Director

Quick take on the pros and cons, Andrea, is that there's enormous cause to participate and an extremely low likelihood for any one company of winning it. And there's been a lot of talk now that maybe they don't need to change caliber that maybe 9 millimeter is okay. And if that really becomes the driving force, and from a budget perspective, it probably will, especially as the military considers use of hollow point ammo instead of strictly ball ammo, that makes the 9 millimeter phenomenally more effective as the stopping weapon.

I think it's highly likely that Berreta (57:45) would get to keep it. They'd find a way to do a little cost reduction, a little bit of product improvement. And from a logistics perspective, which drives a huge portion of their budget, they're going to be nuts to change. They'd be much better off, pretty much with what they've got. And so, that adds to the risk factor of putting the huge investment of time, people and money into competing for something that there's really very low likelihood of winning even if you have a much better product. And so those are kind of the pros and cons right there. If you win it, obviously you're in the capital receipt for the next 25 years, but I have a feeling competing for it's going to be a little bit like being hit against a brick wall, and you'll feel real good when you stop.
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