Brass Eagle Inc. Dispels Hacker?s Hoax

The Nasdaq stock market suspended trading of Brass Eagle Inc. shares for two hours on Aug. 24 after a computer hacker sent out “hundreds, if not thousands” of e-mails containing misinformation about the company’s finances.

J.R. Brian Hanna, chief financial officer, said it appeared to be a “hoax,” but the Bentonville-based company decided to issue a statement after consulting with Nasdaq.

Brass Eagle manufactures paintball guns and other extreme sports products.

After discovering that the company’s computer security had been hacked the previous night, Hanna said, Brass Eagle notified law enforcement officials, including the FBI.

The hacking prompted Brass Eagle to restate its earnings guidance for fiscal 2001.

Brass Eagle said it continues to expect fiscal 2001 sales of $100 million to $105 million and diluted earnings per share of about $1.

Hanna said the hacker sent e-mails that appeared to be coming from the company to e-mail addresses that were registered to receive company news in that manner. Those addresses belong to everyone from paintball enthusiasts — of whom there are about 7 million in the United States — to potential investors and Wall Street analysts.

Under Nasdaq rules, when an event such as this that might affect share price takes place, the company is required to publicize it as widely as possible.

The stock rebounded slightly following the suspension.

Hanna said computer security was being tightened at the company, which employs about 150 people at a plant in Neosho, Mo., and another 50 in Chula Vista, Calif., where Brass Eagle makes masks and clothing for paintball — a manhunt game that is also used by some companies to test management skills.

The company also operates an “X-treme” sports facility, Challenge Park Extreme, in Joliet, Ill.