Sturm, Ruger Eyes Texas for Big New Plant
Carolinas Also in the Running; No Changes Seen in Newport
Newport — Sturm, Ruger & Co. Inc. plans to expand and create 500 to 700 new jobs, the company’s president and CEO announced last week. But that expansion won’t be in New England.
Michael O. Fifer told the firm’s shareholders at their annual meeting last week that company is looking for an existing 250,000-square-foot building, and Fifer said he hopes Texas Gov. Rick Perry will give it to him.
Fifer said Tuesday he planned to meet with Perry this weekend at the National Rifle Association convention in Houston to ask the governor for a building suitable for a plant to manufacture new lines of products.
“I wouldn’t be surprised if he does it,” the Fifer said.
Ruger, which is headquartered in Southport, Conn., with a workforce of 2,100 and manufacturing facilities in Newport and Prescott, Ariz., plans to spend about $30 million on the expansion, and the company has narrowed the search for the facility to North Carolina, South Carolina and Texas.
“But after I announce this, I wouldn’t be surprised if a lot more places come forward with buildings,” he said.
The $30 million investment in the new facility is not a great risk for the company because the growth area for Ruger is in new lines, which accounted for $53 million of the company’s $155.9 million in sales during the first quarter of this year, Fifer said, noting that the company also has $46 million cash on hand, about $15 million than three months ago.
Even though the company is expanding elsewhere, workers in New Hampshire and Arizona should not be concerned about the operations there, he said.
“We’re growing by leaps and bounds in Arizona and New Hampshire, and we’re not taking any jobs out of those places. Those plants are fully employed, and we expect to continue adding jobs incrementally.”
On its website, Ruger is advertising job openings all its current locations for design and manufacturing engineers, as well as product managers to focus on new product development.
Fifer said he was concerned at first that new product lines would hurt sales of existing lines, but that has not been the case. “The new lines seem to have generated interest in our more mature lines,” he said, and as a result there has not been room to expand into new lines in existing facilities.
One reason that Sturm, Ruger isn’t expanding in Newport is the difficulty the company already has filling jobs at its two plants, said Town Manager Paul Brown. “And we don’t have an existing facility that is nearly large enough for them.”
Claremont also would like to have the Sturm, Ruger expansion, and has a job-training program in place to provide workers, City Manager Guy Santagate said Friday.
However, at the moment, Claremont does not have an available building of 250,000 square feet, said Nancy Merrill, the city’s economic development coordinator. “We have a couple of buildings of about half that, like the Lowe’s building, which is about 130,000 square feet.
“We’d love to see them expand here, but we’re grateful that they already have such a strong presence in Sullivan County and that they’re going to stay here,” she said.
Fifer said Ruger’s net income jumped 53 percent as gun sales surged.
Demand for firearms and ammunition has been strong as gun enthusiasts rushed to buy ahead of proposed laws that would limit sales on some kinds of weapons.
Although federal gun control legislation stalled, some states, including Connecticut, have passed tougher rules.
In one sign of tight supplies, the company said that distributers who sell its guns to retailers had just 59,200 units in inventory as of Dec. 31, down from 135,600 a year earlier.
Sturm, Ruger makes semi-automatic, magazine-fed rifles as well as traditional hunting rifles and pistols.
It earned $23.7 million, or $1.20 per share, for the quarter that ended March 30. A year earlier net income was $15.5 million, or 79 cents per share.
Revenue rose 39 percent to $155.9 million.
The company pays a variable dividend based on the size of its profits. It said it would pay out 49 cents per share on May 24 to shareholders of record on May 10. A year earlier it paid 21 cents per share.
Sturm, Ruger shares were trading Friday in the range of $50.60 with an average volume of 486,000, off its 52-week high of $60.11.
The Associated Press contributed to this report.