The Register Citizen (Torrington, CT)
Pandemic, protests triple gun orders, profits for Sturm Ruger
It may go down among the odder bankruptcies in U.S. history after Remington Outdoors filed for Chapter 11 this week, asserting it did so only because it lacked cash or credit to purchase materials to make guns during a historic run for the industry.
No such cash crunch is in play for Sturm Ruger, which has its headquarters just off the Post Road in Fairfield as the nation’s largest maker of guns sold to individuals.
Between April and June, Ruger sales jumped 35 percent from a year earlier to $130 million, as federal background checks hit record levels in March as the COVID-19 pandemic hit, then again in June amid protests nationally after the death of George Floyd. Coming off sales declines last year, orders from varying suppliers are running close to triple their levels of a year ago, setting the company up for an extended run of escalating shipments.
Ruger has long been among the three biggest gun makers for recreational use, along with Springfield, Mass.-based Smith & Wesson and Remington which filed for Chapter 11 bankruptcy protection this week for the second time in three years. Remington is the target of ongoing litigation by families of victims in the 2012 Newtown shootings, who voiced concern this week that the company is aiming to escape financial liability through the bankruptcy filing.
Ruger CEO Chris Killoy said Wednesday both the protests and the pandemic triggered orders, despite limitations in many states on gun shops, hunting supply outfitters and gun shows, echoing comments last month from his Smith & Wesson counterpart Mark Smith.
Most investors never saw the boom coming, with Ruger shares having declined in February and the front half of March, before rallying to double in value since. On Thursday, shares closed at nearly $82, slightly below the company’s historic peak in 2014 on the heels of a boom in sales the prior year.
“This surge is different than what we saw in (2013),” Killoy said Wednesday afternoon on a conference call. “I saw the surge in 1994 before the assault weapons ban took place — this is probably the strongest level of demand that I’ve seen.”
The ban on semiautomatic assault weapons expired in 2004. Both Ruger and Smith & Wesson continue to sell assault-style rifles, in Ruger’s case including the AR-556 with magazines that can hold 30 rounds of ammunition.
“Yeah, definitely — this is a different type of surge,” said Smith & Wesson coCEO Mark Smith, reflecting in mid-June on the recent sales activity. “I mean, there’s really two types of surges, right? One is fear of gun control regulation and one is fear of personal protection . ... That brings new shooters into the marketplace and expands the people who are Second Amendment advocates, and get some more people into the shooting sports.”
Killoy emphasized that recreational hunting remains a driving force for sales as well.
“You look at what’s going on in society — the ability of people to do things close to home, get back to their roots,” Killoy said. “We’re seeing a strong interest in hunting. The whole ‘fieldto-fork’ movement, if you will, is strong.”
Ruger profits tripled to $18.6 million during the second quarter, with the company using some of the cash to hire up at factories in New Hampshire and Arizona. Ruger did so even as it took steps to minimize the chances of employees contracting COVID-19. The company has yet to lose any days of production, Killoy said, though some lines were impacted for a shift or two.
“Bringing new people into the factory and then training them, ... there was a lot of hands-on and ‘overthe-shoulder’ communication to get a new associate up to speed,” Killoy said. “We’re using some fairly novel training techniques — doing some things in the classroom, of course, but then also using headsets and microphones to train new associates on each new staff position.”