2nd Largest Gunmaker Nears Default As Americans Buy Fewer Firearms Post-Obama

2017 has seen the biggest drop in American firearms sales in history.

After 8 years of almost incessant rises in NICS Firearms Checks (a proxy for 'legal' arms sales) under President Obama...

source: NICS

2017 has seen a considerable drop (year-to-date) - the biggest on NICS records...

source: NICS

This sudden drop in demand after President Trump's election has meant Remington Outdoor, the second-largest U.S. gunmaker, has suffered a “rapid” and “sharp” deterioration in sales and a similar drop in profits since January, and faces “continued softness in consumer demand for firearms,” according to credit analysts at Standard & Poor’s Global Ratings.

As Philly.com's Joseph DiStefano reports, S&P cut the company’s corporate credit rating - already at a junk-bond-level CCC+ - two full notches, to CCC- as:

...a backlog of unsold, unwanted firearms will force Remington to operate at a loss and “pressure the company’s sales and profitability at least through early 2018, resulting in insufficient cash flow for debt service and fixed charges,” unless Remington gives up cash to pay for ongoing operations.

 

S&P expects “a heightened risk of a restructuring” of Remington’s $575 million senior secured loan and asset-based lending facility, which it is supposed to pay back in 2019.

 

If Remington defaults on its payments, based on the company’s current value, S&P expects first-lien creditors may receive around 35 cents back from every dollar they have lent or invested. Lower-rated creditors would get back less, or nothing.

While the report said that default is not yet "a virtual certainty," judging by the collapse in Remington's bond prices this week... the market is pretty sure.

And while Remington is not public, it is not alone in pain as shown below...

Comments

Overfed Restorative_Ally Thu, 11/23/2017 - 19:20 Permalink

R51 ring any bells? And even when they get the bugs sorted out, they don't make attractive guns. The R51 and RP9 with the huge logos on the grips are fugly. The 700 doesn't do anything a Savage won't do for a lot less $. Oh, and they can't seem to get the heat treat right on the shell latches on their pump and semi-auto shotguns. Furthermore, ever since the part of FEMA region X that I live in has adopted firearm registration (universal background checks), I only buy guns face to face with cash.

In reply to by Restorative_Ally

MonetaryApostate Overfed Thu, 11/23/2017 - 20:33 Permalink

2008 crash, massive fraud, Hyper QE, corruption, & scandals, what's next?Hyper inflation for certain, but...Historically a country creates massive bonds before war...WAR, HUH! WHAT IS IT GOOD FOR?Obviously for turning lead into gold, oil, & drugs.Did I mention millions of poor serfs dying? This is a move to end guns, police will round up the rest through crime, gangs, & police state tactics they learned in special training. Wake up already, they stole everything! #EveryoneVsTheMoneyPrintershttps://plus.google.com/+GaleInnes/posts/CdLuBK4GcMy 

In reply to by Overfed

TrajanOptimus MonetaryApostate Thu, 11/23/2017 - 20:36 Permalink

Remington 700's are ABSOLUTE GARBAGE compared to older versions.You make a shit product, no one will buy your shit product.The private equity firm that owns Remington ran it in the dirt and raped it into junk status.Surprised? I'm not. When the end game is to milk it for all it's worth, you end up with a shell of a former great company.. It is what "they" do.I went custom, starting with a Stiller action and a Bartlein barrel.. Will never look back.

In reply to by MonetaryApostate

swmnguy HowdyDoody Fri, 11/24/2017 - 07:54 Permalink

I'm sure the NRA was right about that.  And then Obama went and seized everybody's guns, just as he never said he would do.  Oh, wait.Then the specter of Hillary sold a bunch of guns.  But the election of Trump let everyone calm down enough they realized they don't actually need a gun, or at least didn't need more guns than they can personally use at any given time.People are such chumps.  There's no way to twist around the facts until they make any sense.  As if one faction of the Oligarchs as opposed to another would make much difference.  As if a few amateurs with pistols were going to hold off a squad of actual soldiers.  As if 99.95% of Americans have ever, and will ever, be in a situation that would go better with the use of a gun.I suppose it's better than term life insurance.  At least at the end of buying a gun for no good reason you at least have a gun.  That's what the guy on my block said, who had 3 children under 5 years old and at least 8 guns in his house, until his house was burglarized and all they took were the guns, which he apparently didn't have properly secured.  He would have been far better off spending the money on basement windows that couldn't be so easily jimmied open.  But people are terrible judges of risk, which is why they have swimming pools installed and buy guns to protect their children.

In reply to by HowdyDoody

Barney Fife TrajanOptimus Fri, 11/24/2017 - 06:54 Permalink

I bought a 700 CDL in 2001, almost sold it two years later when it slam fired out in the field. I actually loved that gun except for that shitty trigger. So I put a two stage Kleppinger trigger in it.  Now I'll never sell it. But yeah, they have gone downhill, and the infamous slam fire trigger was the start. Once I fixed that though mine older model turned into a gem. 

In reply to by TrajanOptimus

Tallest Skil Overfed Fri, 11/24/2017 - 00:17 Permalink

I'm still really in love with the concept of the bullpup, but I've not found one that I could really want to call my own. Take the FN P90. Wacky looking thing, but it grows on you. I love the magazine capacity. But the reloading isn't easy (read: quick, for live fire scenarios) and the caliber isn't common. I'm still holding out for a bullpup rifle to fill that bullpup-less hole in my heart.

In reply to by Overfed

hedgeless_horseman 0valueleft Thu, 11/23/2017 - 19:51 Permalink

 Nope.  The new trigger on the X-95 is just fine.  There is a reason the I.D.F. switched from M-16s and M-4s to the Tavor.  Piston driven like an AK, with rod welded to the bolt carrier.  16" barrel means no S.B.R. paperwork.  I have had very good experiences.  Ultimately reliable and more than accurate enough for a fighting weapon.

In reply to by 0valueleft

ImGumbydmmt hedgeless_horseman Thu, 11/23/2017 - 20:47 Permalink

I have to go with HH on this one.Lets all first concede that the AR-15 is the MOST developed/evolved platform in weapons history. (sorry AK guys, but none of you are winning 3-gun matches)However the best of the best among AR platform units are often $2k-$3 piston driven to make up for the Direct impingement drawbacks. LWRC, Daniel Defense, POF.....Next, the biggest market segment for AR-15/M-4 is in the SBR/ Wrist brace pistol/(um sort of SBR loophole) realm. FOr good reason, they are VERY handy at the smaller size.The 10.5" SBR is short enough to do most everything CBQ to 150 yards,  EXCEPT loss of muzzle velocity in a 10 barel kills effectivness of 5.56mm ammunition. so .300 blackout is anattempt to make up for this loss but still you are not going much past 250 yards with .300 BO anyway.The X-95 is a Battle driven evolution of the Tavor and has the SBR compact size but runs a full 18" long rifle barrel.At a local 3-gun match I watched a guy with the first Tavor clang off a string of 600 yard 6" diameter circle plate rack like it was easy peasy. I asked him about the weapon and what he did with it. Vortex Stikefire Eagle 1-6x scope (now in 1-8x) and a geiselle trigger and nothing else.WOW. effing A wow.No AR/SBR with a 10" barrel can transition from CQB to 600 meters.the Israelis (hate them if you must) have battle proven this platform. i do not have one yet, BUT only becasue i am the only lefty in my family and its an expensive rig to not be able to hand to anyone else.If you're a righty or don't ever think you need to share it, the X-95 does the job of at least two sizes of AR-15, both an SBR and an 20" M-16.Also look into the SOCOM developed MK262 77grain and the newer XM855A1 tungsten core ammo both in 5.56.The heavy grain 5.56 is a good crutch for the SBR AR. look into what happens to an SBR's muzzle velocity here.http://www.ballisticsbytheinch.com/223rifle.htmlrecommendedhttps://www…  

In reply to by hedgeless_horseman

TheReplacement ImGumbydmmt Fri, 11/24/2017 - 11:23 Permalink

Having had damaged fingers in the past, a gun you cannot use ambidextrously is a nonstarter.  An AR or AK might not be comfy weakhand but they work fine that way, even the pistol variants.  Useability is a big thing for me.  Reliability is as well and thus why I favor AKs to ARs.  A nice light gun that is really accurate is good but a gun that goes bang everytime, no matter what, is great.Besides, didn't the LV shooter learn us to ask 'why bring one gun to a fight when you can lug around a couple of dozen?'

In reply to by ImGumbydmmt

ImGumbydmmt hedgeless_horseman Thu, 11/23/2017 - 20:56 Permalink

HH,I'm still recommending /promoting your high speed ultra lightweight bugout kit with the FNPS-90 in 5.7 from about 2 or 3 years agoI downloaded it, but you should re-post that link for everyone. it was an awesome write up.Part of your assertion in favor of the PS-90 was the voume of ammo per pound that can be carried compared to 9mm or 5.56mmHave you changed your opinion about the PS-90s now that the X-95 has come to town?Do you have any thoughts on the Kel-tec 22 mag little CMR-30 carbine as the low budget PS-90 substitute?https://www.keltecweapons.com/rifles/cmr-30 

In reply to by hedgeless_horseman