Remington outlook poor

[tallguy606]

From Yahoo Finance:

Remington is struggling with more than $1 billion of debt as sales slump. Consumers who initially rushed to purchase a gun in late 2012 out of fear about stricter laws have pulled back on purchases.

“People who intended to buy a gun in three years bought one then,” said Dougherty & Co. senior research analyst Andrea James.

Remington is also facing an expensive recall that could cost more than $25 million, said a source. This month the company said it would replace millions of triggers after reports that guns would fire without being triggered.

More troubling, nine parents of children killed at Sandy Hook Elementary School sued the gun maker last week over the rifle wielded by Adam Lanza.

The situation “spells disaster” for Remington, said a source familiar with the company’s financials.

Remington has seen its earnings before interest, taxes, depreciation and amortization fall from $240 million last year to $125 million this year, the source said. Revenue has fallen from $1.25 billion last year to $1 billion in 2014.

In October, Moody’s Investors Service downgraded Remington’s debt to B2, or high credit risk.

 

[JBP55]

Several others are in a financial bind as well including HK. HK needs to expand the VP line and drop the slow sellers pronto. Everything Gun related has slowed down in 2014 compared to 2012/2013.

 

[Geauxfish]

I doubt seriously that "too big to fail" will apply to a gun manufacturer.

 

[Saintsfan6]

I wonder if the Obama admin will bail out remington and HK?

 

[ta2d_cop]

HK could increase their profitability considerably if they produced US made non-NFA versions of the UMP45, MP series, and G36. I know I would be down for an MP7, UMP45 and a 94. I'm actually surprised we havent seen an effort to do that yet. You would think it was just a matter of shipping tooling from Germany to the U.S. production facility and staffing. Makes a lot more sense than the SL8

 

[radney]

How does a company like Remington end up with so much debt? Sounds like poor management to me in an industry like firearms.

 

[LSUSMC]

It's not Remington but the entire Freedom Group that's in trouble.

Between the two 700 trigger recalls, the failed R51, Bushmaster's slumping sales, and money invested on ridiculous products like the 2020 it's no wonder why they are in deep in debt.

 

[Ghost-1]

HK could increase their profitability considerably if they produced US made non-NFA versions of the UMP45, MP series, and G36. I know I would be down for an MP7, UMP45 and a 94. I'm actually surprised we havent seen an effort to do that yet. You would think it was just a matter of shipping tooling from Germany to the U.S. production facility and staffing. Makes a lot more sense than the SL8

Well what do you expect from a company that wants chase Military and LEO contracts and only sells certain items on the civilian side. I agree if they would build those rifles here and make them available to the public it would probably help their sales.

 

[LACamper]

I wonder if the Obama admin will bail out remington and HK?

With what, a threat of an executive order gun ban?

Seriously, if Remington wants revenue they need to start producing .22 ammo! They could charge $4 a box and people would buy it.

 

[ColbyLang]

I don't think Remington is too big to fail. I just don't think they will....someone will snatch em up. They're still in the black...they'll dump the money losers and return to focusing on the key brands. The lawsuit will be settled, the recall is gonna be expensive, but they won't fail