TASER: Great PR, Middling Quarter

The management of TASER International (Nasdaq: TASR  ) has an image to uphold. So when faced with a host of questions at its April 26 conference call -- about lawsuits, sales, products, production, and more -- it took care to thoroughly address each with the same basic answer: "TASER is doing things right."

I could almost picture CEO Tom Smith bouncing up and down in his chair during different portions of the call. He seemingly couldn't wait to announce TASER's record first-quarter revenues of $13.9 million, which beat estimates. Later, he recapitulated a recent press release highlighting how one of the company's products was used to end a hostage standoff. He also noted that requests for proposals and quotations were rising, although he later wouldn't specify who was buying, saying that unless the customer made an announcement to the press, TASER would remain quiet. That might be the lingering effect of bad publicity, or touchy politics for a weapon that many still consider to be too dangerous.

Of 50 product liability lawsuits against TASER, 13 have now been dismissed -- the most recent just a few days ago. The company's general counsel, Douglas Klint, highlighted that the company is aggressively defending all cases and had not lost one yet. TASER hopes this aggressive defense will prevent future lawsuits by preventing plaintiffs from scoring easy wins. Klint said that the policy seems to be working; the number of suits filed each month has declined steadily since last October. Even better, TASER's legal costs are beginning to trend downward.

As for the new TASER Cam, a TASER unit equipped with a tiny camera to record its use by law enforcement officers, managers thoroughly explained that they are doing lots of production testing to minimize warranty and return problems when it finally goes into full production. This testing will depress margins until TASER is satisfied with the product's quality.

Management's enthusiasm aside, is TASER doing things right? Early indications cautiously say "yes." Lawsuit dismissals are nothing but good for the company, and quality assurance is always a must.

So why did I feel like the conference call was as much PR as a reporting of results? Most investors are intelligent enough to determine on their own whether the company has indeed passed a turning point.

One thing bears watching. As fellow Fool Tim Beyers pointed out in February, the two brothers and father who run the company exercised about 500,000 options last December, but didn't sell any shares. They still haven't. But then, the stock price hasn't moved much, either; it's still around the $10.50 level it occupied when Tim wrote his article.

After listening to the conference call and reading the earnings release, it seems this company could be getting over its woes. But as I wrote previously, Foolish investors shouldn't jump in quite yet, given management's past actions. Instead, they should take a wait-and-see attitude for a couple more quarters.

We've charged up further Foolishness:

• Check out this quarter's numbers.
• Read to see what they did last quarter.
• Why would TASER be crying?

TASER is a Motley Fool Rule Breakers recommendation. For more of David Gardner's cutting-edge growth-stock picks, sign up today for a free 30-day guest pass .

Fool contributor Jim Mueller doesn't want to be hit by one of the company's stun guns, but he does laugh when he reads the joke about the guy who tries it out on himself. Jim doesn't own any shares in any company mentioned. The Motley Fool is investors writing for investors.