PTR coming out of hole of 2014 downturn

PTR Industries has rehired employees it laid off, added more workers and is working to manufacture a 9mm to be marketed to the military. On May 28 Josh Fiorini, PTR chief executive officer, stands in the plant in the Cool Springs community near Aynor.
PTR Industries has rehired employees it laid off, added more workers and is working to manufacture a 9mm to be marketed to the military. On May 28 Josh Fiorini, PTR chief executive officer, stands in the plant in the Cool Springs community near Aynor.

Perhaps no Horry County employer has made national news like PTR Industries.

The gun manufacturer landed in the news in a big way when it moved from Connecticut to Aynor to protest new laws the state enacted after the massacre of school children and staff at Sandy Hook Elementary School.

It got headlines again when it laid off newly-hired employees because of an unexpectedly steep downturn in business.

And, most recently, it was in the news when Bob Grabowski, the late Horry County councilman and a PTR executive, committed suicide near the plant at Cool Springs Business Park.

But PTR has another story now, CEO Josh Fiorini said, and it is one that will be unlikely to get the same amount of ink as past events.

The company has threaded its way through the financial eye of the needle, rehired the laid-off employees, initiated the process for manufacturing a new gun, taken on some additional sales initiatives and laid out a plan to make itself whole with Horry County, which it owes about $30,000.

“We went through 12 to 15 years with nobody at all in that building,” said Horry County Council Chairman Mark Lazarus. “We think we can work through it.”

When PTR moved to Horry County in 2013, it was shipping 850 guns per month, Fiorini said. The rhetoric for limiting gun ownership after the Sandy Hook tragedy actually stimulated weapons sales nationwide, a surge that lasted through the spring of 2014.

But after the gun show season that year, the bottom dropped out of the market, and PTR’s production plunged to an average of 211 per month for the year.

The problem was sort of like with home foreclosures after the housing bubble burst. Guns had been so overproduced to meet the surge in demand that there were huge numbers left sitting in warehouses when demand cooled off.

It took a while for wholesalers to work through the excess inventory.

To make it worse for PTR and other small gun producers, wholesalers concentrated their inventory reduction push on guns made by big manufacturers because that was where the biggest surplus lay.

To keep its sales going, PTR began selling its guns directly to retailers, Fiorini said, as waiting on wholesalers just wasn’t going to work.

Fiorini said he knew PTR would be getting some contract work and expected it to start in early summer last year, so it kept employees longer after the slowdown than it would have otherwise. And when layoffs became unavoidable, PTR stepped lightly, cutting management pay by 10 percent and not laying off as many employees it should have from the standpoint of its bottom line, Fiorini said.

“The magnitude of the stall surprised everybody in the business,” Fiorini said.

But he knew that the market would come back, which to some extent it has.

The anticipated contract work started five months after the layoffs, and the company started offering jobs to the eight laid-off employees. It hired 24 to 26 employees when it move to Aynor and laid off eight in the downturn.

Since then, Fiorini said eight additional employees have been added to the staff.

Gun sales have picked up, but have not returned to pre-downturn levels. And besides the one new gun it hopes to produce, the company wants to start an entire line of guns using the company’s German-engineered operating system.

Fiorini said PTR is the only U.S. gun manufacturer that uses the German system, which he said reduces or eliminates the jamming that comes with the major operating system.

Now, he’s thinking about looking for an investor or bank to help finance the $2 million he said PTR needs to roll out the new gun, a model the company has thought about producing for years.

Another $2 million is needed to expand the line of guns with the German operating system.

But while Fiorini can look to the future with some confidence now, nothing is taken for granted.

Management employees took a 10 percent pay cut at the same time as employees were laid off about a year ago, and not all of them have seen it restored, Fiorini said. And he wants PTR to absorb all the consequences of the downturn before it starts sprinting toward the next goal.

Eventually, he wants PTR-manufactured guns to make up 5 percent of the U.S. market, a goal he sees as conservative.

He’s still happy he moved his company to Aynor and plans to be there 10 years from now. He still gets a good feeling when he hears locals, such as Lazarus, talk about how much they value PTR.

Lazarus said he talks with Fiorini at least once every two weeks and said PTR’s situation in no way compares to that of AvCraft, another high-profile employer that closed shop after several years of unsuccessfully trying to establish its aircraft maintenance business here.

“I think (Fiorini) is a lot more up front with us in what’s going on,” Lazarus said.

Further, he noted, the company still provides above average pay jobs to Horry County residents.

It’s those kind of words that reinforce for Fiorini the rightness of his decision to move South.

“The support we’ve gotten from the community here has been tremendous,” he said. “It’s something we never got in Connecticut, where they thought of us as just another plant.”

Contact STEVE JONES at 444-1765 or on Twitter @TSN_SteveJones.

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