Ruger issues recall of new Mark IV pistol
Company launches voluntary recall all guns made before June 1
Sturm Ruger & Co. is recalling nearly all of its Mark IV pistols because the company says they could sometimes fire accidentally.
The guns are not manufactured in the Connecticut-based company’s facility in Newport, NH, said Kevin Reid Sr., the vice president and general counsel. Most of Ruger’s pistols are manufactured in Prescott, Ariz.
The recall affects the Mark IV pistol, which was introduced two years ago and was hyped for its “simple, one-button takedown,” according to the Ruger website.
The pistol represented “dramatic change,” added Christopher J. Killoy, at the company’s May 8 annual meeting, the day before he took over the reigns as CEO from Michael Fifer. Customers have complained that previous models were hard to reassemble.
However, sometimes a problem occurs when the safety is midway between the safe and fire positions, the company revealed Thursday. The gun may not fire when the trigger is pulled, but could discharge after it is released. Thus far, no one has been unintentionally hurt because of the problem, but the company “strongly recommends” that consumers not use the pistol until it is fixed.
Ruger promised to not only replace the safety mechanism at no cost, but return it with an extra magazine of ammunition.
Only a “small fraction” of the Mark IVs manufactured have problem, the company said in a press release, but it is voluntarily recalling all pistols made before June 1. (No federal agency can mandate a recall of firearms, which are exempt from consumer protection laws. Indeed, the federal Consumer Product Safety Division was unaware of the recall when contacted.) Customers must go to the company’s website to check whether their guns are subject to recall based on its serial number.
1Q sales fall
Reid declined to say how many of pistols are subject to recall or give an estimate of how much the recall will cost the company, saying that the information is “not public” and that disclosing it to NH Business Review could violate Securities and Exchange Commission regulations.
Ruger sold a $250 million worth of pistols in 2016, accounting for nearly 38 percent of its revenue in that year, according to an SEC filing. While it’s not known how much of this is generated by the Mark IV, new products in general – those that are were introduced fewer than two years ago – accounted for $192 million, or 29 percent, of the company’s sales in 2016 and $41 million, or 25 percent, of the $167 million in revenue generated in the first quarter of 2017, according to a quarterly SEC filing.
The SEC filing references only three new products in the first quarter and six in 2016, both of which include the Mark IV pistol.
First-quarter sales actually fell 3 percent, but that’s because the results of 2016 were inflated as a result of the anxiety over the possibility of new gun regulation generated by the election. That has fallen off a bit with the election of Donald Trump, who campaigned against gun control.
But the gun control movement was actually more noticeable than usual at the company’s most recent annual meeting.
The first question at the meeting was posed by Rabbi Michael Friedman, representing a group called “Do Not Stand Idly By.”
Friedman asked Ruger to provide information about its distribution networks, charging that too many guns were falling into the hands of “insecure distribution networks and bad apple dealers” Killoy said he would get back to the rabbi on that.
The distribution network, however, is working fairly well for Ruger, where the sales dip was not as deep as the industry’s as a whole, which dropped 11 percent, according to the National Instant Criminal Background Check System.
Indeed, Killoy said that the post-election “demise of the firearms industry” was greatly exaggerated and just part of the “ups and downs” it has experienced before. On the whole, there “a lot more new shooters,” he said.
Ruger recorded $22.2 million in net income in the first quarter, or $1.21 a share. As a result, Ruger investors will be receive a 48-cent-per-share quarterly dividend.