Gunmaker Remington Outdoor – which has been making crappy guns for years, may become the first American gun manufacturer to go bankrupt amid a sharp decline in gun sales after President Trump’s election.
The NICS Firearm Checks database has recorded its largest year-to-year drop in history:
Credit rating agency S&P cut the corporate credit of the country’s second-largest U.S. gunmaker two full notches by from CCC+ 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 through early 2018,” according to Philly.com.
…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. –Philly.com
While Remington isn’t public, is this a canary in the coal mine for other gun manufacturers?
Both American Outdoor Brands Corporation (formerly Smith & Wesson) and Ruger have fallen since the election
Check out the sharply declining revenues, courtesy of Exodus:
While Remington’s default isn’t “a virtual certainty” yet, it’s obvious that the industry is under immense pressure now that a pro-2nd Amendment President is in the White House.
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Hussein 0bummer was the greatest gun salesman and his policies were good for gun companies. Trump’s? Not so much.
Back the charts off to 2008.
Sarcrilege: As usual, your bias is showing, triple parentheses or not. What policies? Former President Obama was plainly a centrist, intent on getting through his terms without making any waves. A sop here and there to his constituency, and that was about it. Did he go after guns? No, hell no…but he could have.
It was his mere presence – and what he could have done – that drove gun sales. Hardly a surprise that such sales are crashing now: the gun market is now saturated.
ZPN: Great work. I personally don’t care much about the figurehead executive branch; but the legislative and judiciary, that matters. Stay on point!
Thanks pb. You’re right those branches are important, but I wouldn’t go so far as to call the President a figurehead when he can (and does) dictate public policy which circumvents congress via Executive Order. I think the travel ban is the only one which has been challenged.
Obama issued over 900 of them, including DACA (Deferred action for childhood arrivals) and several components of the ACA. Not sure how many Trump is up to.
Black Friday firearms background checks set a new record with over 200,000 transactions in a single day.
I don’t think the firearms industry is dead quite yet