ROCHESTER — When Smith & Wesson took the former Thompson Center Arms business to Springfield, Mass., at the end of last year, it took nearly 300 jobs with it.

It left a creative core of firearms makers who joined together to form
LHR Sporting Arms, a startup with dreams of bringing quality gun-making jobs back to this community.

Cofounders Michael Garland, president; Mark Laney, designer; Karl Ricker, engineering; and Patrick Hanley, sales and marketing; collectively have more than 80 years experience with the Smith & Wesson/Thompson Center Arms business, which made hunting pistols and rifles from 1967 through 2011.

“Our goal is just to bring a lot of these jobs back to the Rochester area,” Patrick Hanley, LHR's sales and marketing person, said. “This was a very proud city and they had amazing gun manufacturing facilities for many years, but also to show everybody that Rochester was producing for so long for a reason.”

The Thompson Center was formed in 1965 and sold its first firearm, a pistol called Contender, in 1967.

LHR will call its first muzzle loader hunting rifle “Redemption,” but details are closely guarded pending patent protection of its intellectual property, innovations and technology.

Karl Ricker, who leads engineering, noted the team launched the Dimension rifle while they were still with Smith & Wesson.

“We launched one last firearm for them that was extremely successful,” he said.

At Thompson, Garland was CFO; Laney, a gun designer, was director of research and development; Ricker was in engineering and product launch and Hanley in sales and marketing.

“Needless to say, we've got a huge talent pool of employees in the area,” Garland said. “That's all any of us have done in our lives is really firearms hunting. It just made a lot of sense to try to get that reestablished here in the city of Rochester.”

Rochester Economic Development Specialist Mary Ellen Humphrey is a believer in the project.

“They're sincere and they're talented. I really just feel this is a good opportunity for them and for Rochester,” she said.

“We're looking at whatever we can to help them,” Humphrey said. “Obviously, we recognize that they are talented and they have a good chance of success.”

Challenges to funding

LHR is working with Strafford Economic Development Corp. and the city of Rochester to obtain financing, Garland said.

“It's a challenge. We're starting out fresh and the lending environment is still very tight,” Garland said. “One of our disadvantages is we can't show them any sales at this point. We don't have our design.”

Also entering the mix are the wait for a patent, a 10 to 14 week lead time for machine tooling at parts suppliers and the need to generate sales leads.

“Before we can start that, generally you have to have your funding,” Garland said. “Before you get your funding, you've got to have your design. So there's a lot of things that we have to overcome to get to the financing piece,” he said.

They'll meet with lenders and Strafford Economic Development at the end of the month.

Promising start

Dennis H. McCann, executive director at Strafford Economic Development Corp. of N.H., said, “They've done a good job of business planning. They are lining up their customer relationships right now.

“Their prospects show that after another year or so, they could start growing at a pretty rapid clip if all goes well.”

“Even without having our design done or anything like that, once we did our press release, we've had two of the largest distributors of firearms in the country contacted us that they were interested in carrying our firearms,” Garland said.

In addition to bank loans, McCann said LHR might be a good prospect for the “patient capital market,” a type of equity investment in which the investors aren't looking for a quick return.

LHR could be eligible for government-subsidized or guaranteed loans through the SBA, state Business Finance or U.S. Department of Agriculture, McCann said. Strafford Economic Development also has its own revolving loan fund that can supplement other sources of capital.

Garland estimates the business needs about $1 million to get the first rifle into consumers' hands.

Pattern of innovation

The founders plan to build on the pattern of innovation they established at Smith & Wesson and Thompson Center Arms.

Laney and Ricker are named on a 2003 patent assigned to Thompson Intellectual Properties, Ltd. for a lever-operated breechblock for a muzzle-loading firearm. Laney's name appears on more than a dozen patents issued to Thompson Center Arms Company Inc., Thompson Intellectual Properties, Ltd. and K.W. Thompson Tool Co. Inc., all of Rochester.

Those patents cover innovations in bolt action rifles, single shot, muzzle loading and semi-automatic .22-caliber hunting rifles.

“Redemption will be the first gun that we launch,” Hanley said.The plan is to be ready to ship in January 2013. The team will show at the Eastern Sports and Outdoor Show in Harrisburg, Pa., Feb. 2-10, 2013.

About 15 million hunting licenses are sold in the U.S. each year with about 60,000 of those in New Hampshire.

They'll be targeting the medium- to high-end of the sporting arms market, which will bypass Walmart, the nation's largest firearms seller.

Garland said the first gun will retail for $599 to $649, depending on the model. “Everything will be made in America,” Garland said. While they plan to outsource some components, the rifle will be designed, assembled and distributed in Rochester. “We're going to outsource all of our components. Over time we're going to start investing in manufacturing machinery here with the goal of doing all the critical components, barrels, receivers, and the like.”

“The business plan right now looks at around 2015 when we'll first start to invest in the manufacturing in-house,” Garland said.

As the business grows, in addition to the four founders, there should be between 11 and 15 employees by the end of the next year, projecting to 50 or 60 in 2015-16, Garland said.

“We've all hunted our entire lives, so we've got a good idea of what works, what a hunter may want in a firearm,” Garland said. “That's the other aspect that we're going to be able to kind of work in a hobby.”

LHR has leased 15,000 square feet from Simple Life Recycling at 9 Great Falls Ave., space they can grow into.

Email dpaiste@unionleader.com