Ballistic Recovery Systems, Inc.
Ballistic Recovery Systems, Inc.
PARTNERSHIP WITH CIRRUS DESIGN
300 Airport Road
South St. Paul, Minnesota 55075
U.S.A.
Telephone: (651) 457-7491
Fax: (651) 457-8651
Web site: http://www.brsparachutes.com
Public Company
Incorporated: 1980
Employees: 75
Sales: $9.19 million (2006)
Stock Exchanges: NASDAQ
Ticker Symbol: BRSI.OB
NAIC: 336413 Other Aircraft Part and Auxiliary Equipment Manufacturing; 541710 Research and Development in the Physical, Engineering, and Life Sciences
Ballistic Recovery Systems, Inc., (BRS) makes parachutes for saving entire planes in the event of engine failure or other emergency. BRS’s whole-plane parachutes are standard equipment on the few hundred Cirrus Design aircraft being produced every year and are available as options on other makes. Retrofits are available for such popular models as the Cessna 152, 172, and 182; the company started making recovery chutes for ultralights. BRS has also been developing chutes for heavier, faster planes.
ORIGINS
Ballistic Recovery Systems, Inc., was formed in 1980 by Boris Popov of Minnesota. Five years earlier Popov had fallen 400 feet into a lake after his hang glider collapsed. The spill shook a few fillings loose, and got him thinking about the possibility of softening such falls with a parachute.
BRS, based in South St. Paul, initially focused on the ultralight market and brought out its first product in 1982. The system Popov ultimately came up with worked like this: in event of emergency, the pilot pulled a lever to trigger a huge parachute deployed by a solid-fuel rocket.
Recreational aircraft represented a small niche, and the company did not exceed $2 million in annual revenues until progressing to systems for factory-built planes.
One of BRS’s favorite metrics, though, was the number of times its products saved lives. The first of these came on August 7, 1983, when an ultralight flown by Colorado’s Jay Tipton was rescued by a BRS parachute. The save was all the more dramatic as it occurred in front of Tipton’s wife and young daughter.
PUBLIC IN 1986
BRS underwent an initial public offering (IPO) in 1986 to raise money to develop products for general aviation use. The IPO and a secondary offering a few years later together raised more than $2 million.
BRS founder Boris Popov stepped down from the CEO position in 1989, a classic case of the visionary entrepreneur making way for more professional management to take the company to the next level. However, Popov soon came back as president, feeling his replacements were not sufficiently committed to developing a general aviation product. One of BRS’s directors and investors, real estate developer Darrel D. Brandt, provided a loan to continue development and served as acting chief executive for four years beginning in 1991.
Until the early 1990s, BRS’s market remained largely limited to operators of ultralights or home-built kit planes that required the warning “EXPERIMENTAL” to be printed on the fuselage. In 1993, after several years of effort, the company won the first Federal Aviation Administration (FAA) approval to build whole-plane parachutes for a certified (factory-built) aircraft, the ubiquitous Cessna 150/152 series. The first of these, dubbed the GARD-150 (later BRS-150), was delivered to a customer the next year.
With thousands of Cessnas in the fleet, many of them at the hands of novice pilots at flight schools, it seemed like a sure bet. The company planned to sell 20,000 units, President and CEO Mark Thomas later told a Minneapolis business journal. However, in the years it took to bring the product to market, the little Cessna 152 fell out of favor among flight schools, which had begun a mass transition to four-place aircraft. It took BRS a decade to sell even a dozen of the chutes for the 152.
The company’s research efforts attracted support from the aerospace establishment. In 1994, the National Aeronautics and Space Administration began providing it grants to study lightweight parachute materials. A couple of years later, Alliant Techsystems hired BRS to make a recovery parachute for a UAV (unmanned aerial vehicle) it was making.
PARTNERSHIP WITH CIRRUS DESIGN
In 1994, BRS entered what would be its most significant business relationship for some time to come. In that year, it agreed to produce a recovery system for a new plane being developed by the Cirrus Design Corporation of Duluth, Minnesota.
Cirrus made BRS parachutes standard equipment on its new Cirrus SR20 light plane in 1998, and a BRS system was also included as standard equipment in the next generation Cirrus aircraft, the SR22, which was certified in November 2000. A second manufacturer, OMF Aircraft, began making BRS systems available as original equipment on its planes in 2003.
Sales were up to $1.5 million by the fiscal year ended September 30, 2000, and were climbing rapidly on the success of Cirrus, which was quickly emerging as the largest producer of single-engine piston-powered aircraft in the United States. The company’s net income rose from $78,715 that year to $599,010 as sales increased 60 percent to $2.4 million.
THINKING BIGGER AFTER 2000
In the 1990s, there was a shift toward using larger aircraft in flight instruction, reducing the market for BRS-equipped Cessna 150s and 152s. BRS obtained a certificate for parachute systems for the Cessna 172 in 2002 and the Cessna 182 Skylane in 2004. By this time, there were about 1,500 Cirrus Design aircraft plying the skies, each of them equipped with a BRS chute.
The company had a new president and CEO in 2004, Larry E. Williams, formerly an executive with Phoenix’s AmSafe Aviation, a leading manufacturer of aviation restraints.
BRS’s annual sales were about $7 million a year by this point. The concept was winning recognition kudos from the mainstream aerospace community. BRS received a Laureate Award from Aviation Week & Space Technology magazine in 2005.
25TH ANNIVERSARY IN 2005
BRS had many reasons to celebrate during its 25th anniversary year. It had sold nearly 20,000 whole-plane parachute systems and saved nearly 200 lives. Cirrus Design, which had made the whole-plane parachute system a central selling point of its aircraft, was also having record results. Cirrus Design raised its shareholding in BRS to 15.3 percent in February 2005. BRS eked out a pretax profit of $45,577 in the fiscal year ended September 30, 2006, after losing $1.8 million before taxes in fiscal 2005. Revenues rose 13 percent to $9.2 million.
COMPANY PERSPECTIVES
Like seat belts and airbags, the BRS whole-airframe parachute is a safety system that is fast becoming standard equipment on modern aircraft. BRS believes there are now only two types of pilots in the world: those who embrace the concept of having a whole-airplane parachute system … and those who will.
In September 2005, BRS acquired the Tijuana, Mexico, factory of Paranetics Technology, Inc. The buy added new parachute product lines with annual sales of about $1.5 million. The company hoped to find nonaviation cut-and-sew work to perform at this facility. In 2007, BRS agreed to manufacture parachute products on behalf of Spain’s CIMSA Ingenieria de Sistemas SA, a leading maker of military parachutes.
A number of light sport aircraft (LSA) manufacturers, including Germany’s Flight Design GmbH, announced they were including BRS systems in their designs. (LSAs operated under less stringent FAA requirements than general aviation craft.) BRS was also entering another emerging product category, very light jets, via Toronto’s Diamond Aircraft, which was preparing to offer BRS chutes in its forthcoming D-Jet model. After several years of development efforts, BRS had begun testing its Next Generation Parachute System, designed to handle larger and faster planes.
By 2007, BRS had produced more than 25,000 parachute systems; more than 3,000 of them were installed on certified aircraft. The company’s handiwork was credited with saving at least 200 lives. A decade after its only U.S. rival (Second Chantz) had left the business, BRS still had the whole-airframe parachute market largely to itself, though there were a couple of European competitors.
Frederick C. Ingram
PRINCIPAL SUBSIDIARIES
BRS de Mexico S.A. de C.V.
PRINCIPAL COMPETITORS
Airborne Systems, Ltd.; Bostik Industries, LLC; Parasport c.i.p. S.L.; Stratos 07 s.r.o.
KEY DATES
- 1980:
- Ballistic Recovery Systems (BRS) formed to produce rescue parachutes for ultralights.
- 1983:
- First life is saved by a BRS product.
- 1986:
- BRS goes public to raise funds to develop a general aviation product.
- 1993:
- BRS wins first Federal Aviation Administration approval to build whole-plane parachutes for a certified aircraft, a Cessna.
- 1998:
- Cirrus Design makes BRS parachutes standard equipment on its new aircraft.
- 2005:
- Tijuana plant is acquired from Paranetics Technology.
- 2007:
- BRS tests Next Generation Parachute System, designed for larger aircraft.
FURTHER READING
“Ballistic Recovery Systems Inc.—Records Saves Number 135, 136, 137 & 138; Rare Incident Is #2 for the Same Pilot/Aircraft,” Market News Publishing, July 19, 2001.
“Ballistic Recovery Systems Inc.—Refurbished and Renewed Cessna 150s with Parachute Systems—Coming to Flight Schools,” Market News Publishing, June 11, 2001.
“Ballistic Recovery Systems Inc.—Ventures Award Given to BRS—As One of Minnesota’s Best-Performing Public Companies,” Market News Publishing, May 31, 2001.
Byrne, Gerry, “Life-Saving Chutes to Rescue Jet Planes,” New Scientist, April 24, 2004, p. 25.
“Company Interview: Robert Nelson, Larry E. Williams; Ballistic Recovery Systems, Inc.,” Wall Street Transcript, March 28, 2006.
“Company Offers Softer Landing for Smaller Aircraft in Distress,” New York Times, December 25, 2004, p. A20.
Davis, Riccardo A., “St. Paul, Minn.–Based Company Makes Parachutes for Recreational Planes,” Knight-Ridder/Tribune Business News, March 11, 1998.
Divine, Mary, “Business Owner Flying High,” Saint Paul Pioneer Press, April 8, 2005.
Goyer, Robert, “Chute: What the Whole-Airplane Recovery Parachute System Is Doing for Safety,” Flying, December 2004, http://www.flyingmag.com/article.asp?section_id=13&article_id=510&page_number=1.
Higgins, Amy, and Sherri Koucky, “First Time’s a Charm—Parachute Floats Plane to Safety,” Machine Design, January 9, 2003, p. 44.
Murray, Charles J., “Rocket-Deployed ’Chute Saves Small Planes,” Design News, April 24, 1989, p. 132.
Sarsfield, Kate, “Ballistic Recovery to Expand Parachute System Application,” Flight International, November 10, 1999, p. 31.
———, “BRS Parachutes in Shares-for-Sales Deal,” Flight International, September 29, 1999, p. 22.
———, “BRS to Offer Parachute System for Cessna 150,” Flight International, November 21, 2000, p. 31.
———, “Diamond to Offer D-Jet Parachute; Austrian Manufacturer Works on Recovery System Option for High-Gross Weight Version of Single-Engined Aircraft,” Flight International, June 29, 2004, p. 17.
Tellijohn, Andrew, “BRS Reflects on Lessons Learned,” CityBusiness (Minneapolis), June 9, 2000, p. 11.
———, “BRS Revisits Cessna,” CityBusiness (Minneapolis), October 6, 2000, p. 11.
———, “Companies Target Technology Investment to Boost Business,” CityBusiness (Minneapolis), May 12, 2000, p. 15.
———, “Companies Weather the Seasons with Preparation,” CityBusiness (Minneapolis), August 11, 2000, p. 11.
———, “Diary: Companies Review Year’s Goals and Growth,” CityBusiness (Minneapolis), February 9, 2001, p. 10.
———, “Firms Take on Promotion,” CityBusiness (Minneapolis), July 14, 2000, p. 11.
———, “Leaders Divvy Up Duties,” CityBusiness (Minneapolis), November 10, 2000, p. 13.———, “Parachute Maker Lands NASA Grant; $60,000 Funds Test of Chutes in Business Jets,” CityBusiness (Minneapolis), October 5, 2001, p. 3.
Wieffering, Eric J., “A Lifesaver,” Corporate Report-Minnesota, December 1993, pp. 16+
Youngblood, Dick, “Coming In on a Chute and a Prayer; Boris Popov Adapted His Parachute System to Light Aircraft. He’s Made Some Money—and Saved Some Lives,” Star Tribune (Minneapolis), August 29, 2004, p. 3D.