David Gardner: Tom Smith is the co-founder and president of Taser International (NASDAQ:TASR). He joins us from member station KJZZ in Tempe, Arizona. Tom, thanks for joining us on The Motley Fool Radio Show.
Tom Smith: Thanks for having me. Love to be here.
David Gardner: Tom, for those of us who aren't totally clear on what a Taser is, can you give us a quick description of the product?
Tom Smith: Sure. It is a device that is a handheld unit that (is) providing law enforcement and people the opportunity to stop somebody that is posing a threat up to 21 feet away and be able, especially on the law enforcement side, to fire out two darts that then will send a signal from this handheld unit through wires into the body of the suspect they are trying to take into custody, and it does stop them from being combative. It basically overrides their central nervous system, causes them to lock up so that they can no longer continue to fight or resist. And it doesn't have any long-term effects, so it is a nonlethal weapon that is being used today by law enforcement around the globe to be able to subdue people without having to go to a lethal level.
David Gardner: Where did the idea come from for the product? Are you the inventor, or are you the biz guy? Who is the genius here?
Tom Smith: Well, the original genius is actually Jack Cover. He came out with this type of a technology in 1974 so it has been around for a very, very long time. He had the original concept. Actually the word Taser stands for the Thomas A. Swift Electric Rifle, so if you are an old Tom Swift fan, that is where the original term came from. Jack was a big Tom Swift fan, and that was one of the books he talked about shooting electric ray guns through walls at people and so that is where Jack came up with the name.
But his concept of firing the darts is still what we use today, but he never, through the companies and over the years, never was able to refine the electronic side of the technology to work on the people that were on drugs or alcohol or the individuals the law enforcement face every day.
My brother and I started our company in 1993, and it actually even took us seven years and we had biology backgrounds to actually get that recipe right. Then really where we took off was in late 1999 with the introduction of what we consider our third generation of this technology that had the electronics right, but then it utilized the firing of the probes to be able to do it from a distance.
David Gardner: Tom, have you ever been Tasered yourself, and if so, how many times and what does it feel like?
Tom Smith: I have been Tasered about probably between 10-15 times over the years intentionally. I have been a lot more unintentionally where we have actually hit circuits or something working on a line but intentionally about 10-15 times. The best description I have been able to come up with is it is like hitting your funny bone through your whole body and about 20 times more intense. You are very aware of what is going on. It is not a pleasant experience, but there is nothing you can do to fight through it, and it is very, very effective.
One of the great things about our bodies, our muscle tissues that we use to walk, exoskeleton muscles that cause us to walk or fight or move, it is a dumb tissue. What I mean by that is it is just looking for a stimulus so when we are shooting somebody with a Taser and stimulating those muscles, there is nothing you can do to physically override that and say ignore that stimulus. That is why it has become so effective.
David Gardner: Tom Smith, Hamilton County, Indiana, withdrew and then reinstated the use of Tasers by its police force after a New York Times article, I know you are familiar with it, questioned if your weapons are in fact nonlethal. Can they be lethal?
Tom Smith: Well, the weapon itself cannot be lethal from the point of view that we are using the Department of Defense term on that. What I mean is our intent is not to injure anybody, and when you have a confrontation there is inherent risk. There is never 100% of the time that you can say for absolute certainty that this is never going to cause and effect on every individual that exists in the world today. You can't test every possible scenario, but in the testing that we have done and in the independent reviews that have been done by the Canadian government, the United States government, and the United Kingdom government, we have not found that case where there is a higher degree of risk. If we do at some point in future testing we would certainly make that available but you can never say 100% certain that it is not going to have that intended effect. But the intent of the design and the word nonlethal is used to say the intent is to be able to stop somebody without killing them and harming them. To date, in all the medical science that we are aware of and all the studies that have been done, there has been no clinical proof of any possibility of that occurring, so that is where we are at today.
David Gardner: Could the same be said of pepper spray? The reason I ask is of course the tragic death of a woman in the wake of the Boston Red Sox winning the American League pennant. A woman dying because she got hit by pepper spray in the eye. Do you see any analogy here?
Tom Smith: Well, and again there are two parts to that. It was hit with a capsule and we are familiar with that technology. The chemical spray, the pepper part of the spray, was not what killed her, but it uses a projectile that is like paint ball, and that is what got fired and it hit. Unfortunately it is a very tragic event, hit her in the eye. The projectile is actually what led to the injury that led to her demise. It wasn't the chemical spray of the projectile that did that.
In our instance we fire out two probes that attach, and they have a straightened fishhook on the end of it. Then we send electricity through those wires. In the case of that incident, it is a projectile that is fired out so it is the projectile that caused the fatality, not the chemical spray within the projectile, if that clarifies it a little bit.
David Gardner: Thank you. Has anyone died from having a Taser used on them?
Tom Smith: Not from the Taser directly. We have never been named as a primary cause of death. In less than a handful of cases we have been listed as a contributing factor as part of the restraint procedure. What I mean by that is it says, police confronted this individual, and one of the cases got a lot of publicity on CBS and in the New York Times article in Indiana where this guy was; he had 20 times the normal level of a particular drug in his system. He was fighting with police for several hours. They used the Taser to restrain him. He subsequently passed. They listed us as a contributing factor in the restraining procedure, but we were not listed as the primary cause of death and never have been. Again, there is a difference there that that Taser isn't what actually killed him but it is used in the restraint procedure. There is a big difference of medical opinions out there. Obviously some people have said it was contributed, and we have our medical experts that have reviewed the case and said it did not contribute.
David Gardner: For the fun of it, how many times a year right now is a Taser used to your knowledge? There is a tendency that I have observed in the media to latch on to negative instances of something happening, forgetting that the overall perspective is often that a product is being used successfully hundreds or thousands or even millions of times despite one or two tragedies. How many times is a Taser fired here in 2004?
Tom Smith: Well, we don't have an exact number, and the reason we don't is a lot of larger agencies don't report to us. To give you an idea, let me give you a couple of different agencies. Here in Phoenix, Arizona, they fired it 355 times all of last year.
We have over 6,000 agencies using that around the country. We estimate we get one in 10 that report to us. We have actually documented over the last several years over 5,000 uses. So we are estimating somewhere between 50-100,000 uses most likely in this year would probably be a safe estimate.
Where we are getting that number is just this past quarter, which we announced earlier this week, we sold 250,000 cartridges in one quarter. A lot of those, a majority of those go to training, but at the same time, a lot of those are being used on the streets and again the larger agencies don't report so we have to make an estimate.
Out of our 5,000 we also have 500 cases that clearly saved a life, and let me give you a story. A 12-year-old with butcher knives in her own home is cutting her wrists trying to commit suicide, and the family calls law enforcement. When they show up and kick in the door, she charges the officers and raises her knives over the head of her trying to stab the officers. In normal use of force for police, that would be a lethal use of force. They were justified if they fired a firearm at her and killed her, but instead they were able to use the Taser and take her into custody without killing her. That is clearly, and every officer on the scene said, clearly saved her life by the use of the Taser. Unfortunately those cases, as you mentioned, aren't getting reported because we have those cases occurring every day. The media has unfortunately latched on to the ones that are controversial that again our medical experts disagree and then the review is done to say it is safe, but there are thousands and thousands of cases out there where we are saving lives.
Let me give you one other story. In the cities of Miami and Seattle, Miami and Seattle in all of 2003, they did not fire single bullet from their guns because they had Tasers out on the street. They give us a lot of credit. It has improved training. It is our technology, but for the first time in recent memory, they were able to go an entire year without firing a bullet and that hasn't happened in the last 20 years. In fact, they usually average about 20 firings a year. So I think that is a pretty impressive statistic that we are very proud of.
Tomorrow: What's in the future for this volatile stock?
Is Taser a future Rule Breaker? Where can you find the next growth stocks? Let David Gardner help you navigate the world of ultimate growth by taking a free trial of Motley Fool Rule Breakers .
