Leupold & Stevens, Inc. - Company Profile, Information, Business Description, History, Background Information on Leupold & Stevens, Inc.

14400 NW Greenbrier Parkway
Beaverton, Oregon 97006

Company Perspectives:

The mission of Leupold & Stevens is to continually improve products, to develop flexible manufacturing capabilities, and to put special emphasis on customer service. The ultimate goal is prosperity and a reasonable return for our stockholders.

History of Leupold & Stevens, Inc.

Leupold & Stevens, Inc., a fourth generation family-owned company, is one of the oldest and best-known manufacturers of top-of-the-line riflescopes and binoculars. The Leupold line, designed primarily for hunters and shooters, includes rifle, handgun, and spotting scopes; mounting systems; and optical tools and accessories. All of the company's scopes are known for their decorative gold ring. Leupold & Stevens also sells products for a variety of military and law enforcement applications. Its customers include the Federal Bureau of Investigation (FBI), the U.S. Navy Seals, and various police special weapons and tactics teams. The company also manufactured water-measuring devices used in irrigation, flood forecasting, and water supply and wastewater engineering until 1998.

A Manufacturer of Surveying and Water Recorder Products: 1907-39

Markus Frederich Leupold began a one-man operation for the repair of surveying equipment in Portland, Oregon, in 1907 with financial backing from his friend and brother-in-law, Adam Voelpel. "Fred" Leupold was born in Ravensburg, Germany, in 1875, and immigrated to the United States from Germany at the age of 16 in 1891. After a number of jobs, he worked as a precision machinist for C.L. Berger & Sons, a Boston surveying instrument manufacturer. Leupold and Voelpel named their new business after themselves.

Leupold & Voelpel grew slowly in answer to the need for skillful repair of surveying and drafting equipment, and the business soon employed three others. In 1911, after a fire occurred in their building one floor below them and street vibrations interfered with the accuracy of their machinery, Leupold & Voelpel moved to a building adjacent to the Leupold residence. The firm had successfully established its credentials among surveyors, and the brothers-in-law made the decision to begin manufacturing surveying equipment.

Very shortly thereafter, two events occurred that changed the course of the young company. Competition from bigger and better financed companies forced Leupold & Voelpel to investigate other markets, and Leupold and Voelpel met John Cyprian Stevens, an inventor and consulting engineer and hydrologist. Stevens was born in 1876 in Kansas and had earned a civil engineering degree from the University of Nebraska. From 1902 until 1910, Stevens had worked for the U.S. Geological Survey in water studies. He soon afterward patented a device to record the flow of water that dramatically outperformed the competitive devices of the day. Stevens's device, which Leupold & Voelpel agreed to market in 1911, needing checking only several times a year as opposed to every eight days. By 1914, the demand for the new water level recorder had increased considerably. That year Stevens joined the company as a third partner, and the company renamed itself Leupold, Volpel & Co. (Voelpel had changed the spelling of his name earlier to avoid anti-German sentiment in the United States.)

Business for Leupold, Volpel & Co. grew slowly but steadily during World War I as the Stevens product line expanded into other models. Twice the company had to enlarge its quarters. Then, in the 1920s, the firm's water recorders and surveying products made their way around the world to India, Russia, Scandinavia, Canada, Japan, and Central and South America. By the 1930s, Leupold, Volpel & Co. had grown to number 40 full-time employees, and although, occasionally, working hours were cut during the Depression, no employee was let go.

In 1939, J.C. Stevens's son, Robert, joined the company, and took over responsibility for sales, marketing, and advertising. By then, production had increased dramatically. This growth was due largely to the introduction of another Stevens invention in 1938, the Telemark, a water level recorder that transmitted data over telephone lines. By 1942, the company had outgrown its production space and moved to larger quarters. Volpel had died in 1940, and the company now became Leupold and Stevens Instruments Company, reflecting both the new management and the direction in which the company was heading.

Growth Following Introduction of New Type of Riflescope: 1940s-70s

Three events combined in the 1940s to produce the company's next big break, the production of a more precise riflescope. As industrial America began to gear up to meet the manufacturing needs of World War II, Leupold & Stevens turned to manufacturing sextants and peloruses--navigational devices that take bearings based on observed objects--for the U.S. Navy and the U.S. Merchant Marine. It also began to repair the Merchant Marine's telescopic gun sights. In the course of these repairs, the company's engineers made the discovery that replacing the oxygen inside a telescopic sight with pure, bone-dry nitrogen meant the sight no longer fogged. Fred Leupold died in 1944, and management of Leupold & Stevens passed on to the next generation: Leupold's sons, Norbert and Marcus, and Stevens's son, Robert. After Marcus Leupold missed shooting a buck on the rainy west side of Oregon's Cascade Range because his scope fogged with interior moisture, the new leaders, all avid outdoorsmen, turned their attention to producing a better riflescope.

The firm drew on its experience gained repairing gunsights during the war and combined that with its expertise in designing sophisticated optics for surveying equipment. The result was the first Leupold riflescope, called the Plainsman, in 1947, a new generation of riflescopes less likely to draw moisture and more easily adjusted for accuracy. The Plainsman instantly became popular among hunters and shooters as the most water-resistant scope of its era. It featured internal adjustments and a permanently sealed main tube.

The continued success of Stevens water recorders and the emerging popularity of the Leupold riflescope led to incorporation of the company in 1949. Marcus Leupold became president of the newly incorporated entity. In 1953, Stevens suffered a stroke and withdrew from business activity for the remainder of his life. He died in 1970. Under Marcus Leupold's leadership, the company began to realize the potential for growth that lay with its riflescope business. By 1960, Leupold scopes were on their way to establishing themselves as the premier scopes on the market. The firm also continued to advance its water flow meters, and, in 1961, introduced a new line that measured sewage flow. The company's staff of 150 moved shop to a new 66,000-square-foot plant in Beaverton, Oregon, in the Portland Metro area in 1968. In 1969, Norbert Leupold, who was graduated from Oregon State University with a degree in civil engineering in 1929, became president of the company.

The 1980s: Unsuccessful Experimentation with Acquisitions

Throughout the remainder of the next two decades, the demand for Leupold & Stevens' hydrographic and sporting products accelerated. The company continued to grow and to expand its production facilities, evolving new manufacturing technologies and products that enabled hunters and shooters to take ever more precise aim. In 1970, Leupold & Stevens closed down its instrument repair and rental department, the last remaining vestige of the firm's origins. Then, in the 1980s, the hunting gear market began to shrink. In response, in 1984 Leupold & Stevens formed a special division for corporate ventures and acquisitions designed to broaden the company's mix of business. It purchased Fabmark Inc., a Hillsboro, Oregon, manufacturer of highly refined sheet metal for the electronics industry with customers such as Tektronix and Hewlett-Packard in 1984. Biamp Systems Inc., a sound equipment manufacturer, followed in 1985.

By 1986, however, the company was rethinking its diversification strategy. Inventories started climbing, and the company did not seem to be growing. In addition, in the face of an unfavorable exchange rate between the United States and Japan, where Leupold & Stevens purchased its optical glass, the company took measures to conserve resources, shutting down much of production capacity between November 1986 and mid-January 1987, laying off 60 workers temporarily and another eight permanently. Leupold & Stevens embarked on an employee "cross-training" program that allowed workers to shift back and forth between making parts and assembling finished products in an effort to eliminate excess inventories.

Management decided to return Leupold & Stevens to its core business. It sold off Biamp 15 months after purchasing it, at considerable loss, in 1986. In 1988, it sold off Nosler Bullets Inc., a Bend ammunition maker that it had owned since 1969. Two years later, it divested itself of Fabmark. According to Werner K. Wildauer, who had become president in 1983, the company would continue to hunt for acquisitions, but only in optics and closely related industries. Leupold & Stevens also stepped up its research and development spending, looking to create a stream of new products and to expand its presence in the water measurement and instrumentation business, thereby turning the tide on its flat revenues and falling profits.

New Technology and the Resurgence of Demand: Late 1980s-90s

By mid-1987, demand for hunting and shooting products had resumed, and the company had expanded its offerings to more than 100 scope products, including non-firearm telescopes. Leupold & Stevens added two to four new scopes a year between 1990 and 1995. By 1992, the company claimed 35 percent of the U.S. market in high quality optics, and, by the mid-1990s, with the nation looking to move to stricter gun control, business was once again booming. Worried that the purchase of sporting firearms might be curtailed by legislation, hunters and shooters put $14.5 billion into guns and ammunition in 1994. For Leupold & Stevens, this meant that production shot up as much as 40 percent over 1993. In 1994, the company had to expand its plant by 15,000 square feet in order to keep up with demand. In 1995, it was running three shifts a day, employing 525 workers, and had begun another expansion of 30,000 square feet. In 1998, it sold off Stevens Water Monitoring Systems to concentrate on its other business.

By the mid-1990s, newer, different technologies led to a plethora of new products for hunters and shooters. In fact, according to the Oregonian in 1996, these new products, which included special hearing devices designed to amplify natural sounds, night-vision binoculars, automatically timed feeding devices, computerized global positioning systems, and motion sensor devices, were coming on line as quickly as the state came up with regulations to delimit their use. A spokesperson from the Oregon Department of Fish and Wildlife, quoted in the Oregonian in 1996, said that "We've just about pushed technology to the limits of acceptance. ... We're going to need some help from the hunter sorting it all out." Leupold & Stevens insisted that it remained concerned with the issues surrounding hunting; however, it needed to stay on the cutting edge because companies unwilling to change to new technologies could "go by the wayside."

The company was among the earliest supporters of the Heritage Foundation, pledging 1 percent of its total sales to this organization, founded, in 1999, upon the belief that companies that make their profits from the shooting sports industries should work to preserve hunting and shooting rights. Under the direction of President and CEO Tom Fruechtel, who assumed leadership of the company in 1998, Leupold & Stevens maintained its commitment in the early years of the new millennium to keeping the company closely held, to promoting positive messages about hunting and shooting sports, and to lobbying against gun control.

Principal Competitors: Bausch & Lomb Inc.; Burris; Bushnell; Nikon Corporation; Swarovski International Holding AG.


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