BOZEMAN - As many businesses barely hang on during a worldwide recession, the owners of Mystery Ranch backpacks are eyeing an expansion.

"We've been growing 300 percent a year without a lick of advertising," said Dana Gleason, who founded the business with Renee Sippel-Baker in 2000. "It's viral growth as it jumps from one user to another."

Snuggled up against Interstate 90 just north of Bear Canyon, Mystery Ranch's 9,000-square-foot building houses about 55 workers who build backpacks geared to hunters, climbers, skiers, wildland firefighters and U.S. military special forces.

"We're in the business of building gear for people who use the gear really hard," Gleason said. "These are more tools than sporting-goods equipment. They're built for people who have to carry heavy loads for too long a time."

The warehouse promotes a relaxed atmosphere where employees' dogs curl up at their masters' feet and where workers are allowed to take months off for adventure. It seems an unlikely place to be producing backpacks for elite soldiers specially trained for tactical missions. But Gleason views his military clients as just another group of highly skilled athletes, much like the company's other customers. The exception is that people are shooting at the military's top athletes, he noted.

Despite a flavor of "casual Fridays" every day, Gleason said it's vital that his employees realize that the backpacks they make are "acutely important" to people.

"What they do truly matters," he said. "It's a different set of job skills, and it isn't a thrill a minute, so it's important people know that they're important."

Mystery Ranch's military work, now making up three-quarters of its total production, is driving the upcoming expansion. Although the company moved into its 9,000-square-foot facility only two years ago, more space is needed. And if Mystery Ranch is successful in landing future military contracts, Gleason said, the company will need a 22,000- to 24,000-square-foot manufacturing facility and another 65 or more employees in the next year to year and a half. If the main branches of the Army and Marines adopt the company's backpacks, a jump from a customer base of 30,000 to more than 1.2 million, Mystery Ranch could need four to five times as many employees.

"It's not a case where we can just buy more machines," he said. "People do most of the steps of the production here."

Currently, less than 5 percent of Mystery Ranch's sales are from the building's storefront; the rest are by word of mouth, contract or the Internet.

Mystery Ranch already employs about 100 workers at two other manufacturing plants in Seattle and Boulder, Colo., and Gleason said the company would maintain its presence in the Gallatin Valley despite the expansion. After all, it's where he's lived since the 1970s and where he founded his first business, Dana Design. The company was sold to K2 in 1995. But Gleason has courted Park County, over the Bozeman Pass in Livingston, as an option to expanding in the Gallatin Valley.

"We could be looking at other places if we end up successful on some major contracts," he said.

Although no one has approached him about considering Billings, he said it wouldn't be "an unreasonable place to think about" given its proximity to the interstate, although he added he isn't looking for any giveaways or inducements.

Contact Brett French at french@billingsgazette.com or at 657-1387.