Does it matter? Remington seeking financing for Bankruptcy

So one of two things happened here. Freedom Group screwed up big time and them and all their investors are going to take a hit, or this was planned all along and everyone on FG board of directors will be swimming in cash and the small investors still take a hit. (I'm betting it's the latter) Yea, sure, there are laws preventing this, but since when has legality gotten in the way of the almighty dollar?

Or the third possibility, I still don't understand. :o
 
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^ Freedom Group doesn’t exist anymore, it’s Remington outdoor company. With Remington Arms a subsidiary, don’t know if that includes ammo company.


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In my opinion, there were too many whiz kids running that whole Remington conglomerate and not enough adults that knew the firearms industry. These would be the kind of people to yank Marlin and Bushmaster out of their towns with the thought "Anybody can make a gun, it's all done with computers anyhow!" They are the type of folks to kill of H&R and hire other whiz kids who believe that they can make a cheaper better version of the 51 pistol or leave the Nylon 66 in the dust with abominations like the R51 Remington Viper, because "cost engineering trumps all!"

This isn't confined to Remington or even the firearms industry. My brother works at a place where the engineers can't read micrometers or calipers unless they are digital. My sister works at a place where the supervisors don't know their people or what they do on the floor.

Rant aside and to answer the original question: Yes, it does matter. It matters for the employees and also to those of us who would like to see a better Remington with GUNMAKERS leading a gunmaking concern.
 
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On the other hand, if they 1) amputate the debt, and "management", and 2) get back to making good guns with controlled overhead cost. They COULD resurge like Savage.
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The article I read said Cerebus would no longer own Remington after the restructuring. I really hoping the new owners bring it back to the company it used to be. As others have said, hopefully the owners care about the guns being produced, not just investing purely to make money. We'll see.
 
One of the ramifications of the BK filing is warranty coverage. Other companies have abandoned their pre-BK warranty liabilities (Savage). Lifetime Warranties appear on the books as liabilities. They need to have a $$ recorded. In accounting, assets minus liabilities equals equity. When things go bad, you get negative equity (think owing more than your house is worth) in a broken company.
 
Too bad that a once proud and good brand could be run so far into the ground. They don't make many decent guns any more IMO.
 
From what I can tell, Remington's term debt is $950 million and lord only knows what their soft liabilities are. Based on what little financial information I can find regarding the company. Remington Outdoor Company is an LLC and was owned by Cerberus Capital Management.

Remington owns the following brands:

Remington
Marlin
DPMS
Bushmaster
Barnes
Nesika
Storm Lake
Dakota Arms
Tapco
Timbersmith
H&R
Advanced Armament
Parker Gun

I think some of these purchases have been disasters from the little I can find. The degradation of quality in the brands they have purchased is well documented as well as their own Remington brand. In particular Bushmaster, Marlin, and Remington arms. I believe they have tried to compete and brake into the lower-end firearm market with enormous investments, mostly debt financed. Plus, as a company grows that large, overhead grows with it and the volume of sales necessary to sustain them is much higher than it would be if all those companies remained independent.

Also, in a down market, with all of your products in the same industry, a downturn increases your exposure dramatically....and being investor owned there is a lot less flexibility to handle financial challenges. Investor owned also means a strong push for growth and increased profits at the expense of just about any other factor.

So, what will likely happen is that many of the brands now owned by Remington will be sold to pay off the debt, Ceberus will lose control of the company and it will be sold to new ownership, and hopefully Remington can get back to making decent shot guns and bolt action rifles.

As has been mentioned already, Savage and Ruger had to go through similar situations in the past and came out much better companies. For a while, Savage slimmed down and made only the 110 action after being sold.
 
Remington Outdoors is/was privately held by Cerebus. Privately held entities are exempt from Securities Exchange Commission regulation. This tends to make any outside scrutiny or even glimpse into their financial reporting impossible. My understanding is the Cerebus walks away with no stake at all. What ever their plan was obviously did not work. I expect any viable components to be sold or spun off. Anything else will liquidated or shutdown. The investment bankers behind this debacle got paid their money long ago, paid for with all that debt.
 
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