Does it matter? Remington seeking financing for Bankruptcy

TXAZ · February 9, 2018, 08:37 AM

There is an interesting issue with Remington looking for financing to go into bankruptcy : Does it matter?
Remington has made some classic firearms including the iconic 700.

So the question is, with all the other manufacturers out there, would it matter to you or the industry if Remington leaves the business?

Remington needs $$$’s to file bankruptcy

My guess is it won’t matter much, as companies ***seeking financing to go bankrupt*** usually don’t emerge as their old self, and are often parted out and sold off.

**Aguila Blanca** · February 9, 2018, 09:16 AM

Curious. At the 2017 SHOT Show, Colt had their usual, huge display despite having just weathered yet another financial crisis. Remington also had their usual, huge display.

Fast forward to SHOT 2018. Colt's display was comparatively tiny -- not as small as some of the single-table operations, but a mere shadow of the area they had in 2017. The Remington display for 2018 was the same size and layout as 2017. And they introduced a new VP for handgun sales. I'm not sure what, if anything, that all means, but I'll toss it out to feed the discussion.

johnwilliamson062 · February 9, 2018, 09:32 AM

No Remington products on my long list. Much the same problem as colt IMO. Little innovation in my lifetime.

carguychris · February 9, 2018, 09:40 AM

Quote:

Originally Posted by TXAZ

My guess is it won’t matter much, as companies ***seeking financing to go bankrupt*** usually don’t emerge as their old self, and are often parted out and sold off.

True, but perhaps one of the main reasons for the maneuver is to spin off some of the brands that Remington's parent company has absorbed, such as Marlin and H&R. Quid pro quo; you give us money, we give you Marlin.

This wouldn't hurt the feelings of most Marlin fans.

Charlie98 · February 9, 2018, 09:46 AM

Quote:

My guess is it won’t matter much, as companies ***seeking financing to go bankrupt*** usually don’t emerge as their old self, and are often parted out and sold off.

Remington is already made up of pieces and parts of old companies. In the end, it doesn't really matter... bankruptcy at the corporate level usually just mean restructuring existing debt, the company remains, maybe having to sell off some of their assets but in reality just continuing on as before.

Marco Califo · February 9, 2018, 09:46 AM

Bankruptcy is a financing tool. Used with cunning and skill by our prez, and many others.
There also different flavors (chapter 7 liquidation, chapter 11 deptor in possession reorganization). Those are for individuals, there are corresponding rules for businesses. Savage went through BK a few years ago, then came back with the Accutrigger and Axis line. I say a financing tool because it is usually used to get rid of hopelessly excessive dept, that usually resulted from mergers, acquisitions, equity fund buy outs, and general stupidity.
I own Remington shotguns. My last shotgun purchased was Italian. Remington could reorganize and operate: that requires new money. That seems to be the case here.
Winchester and Herters also went through BK, and devolved into "brand names" owned by profitable companies. The USSR went through national BK. The evil empire morphed into the evil Russian commonwealth.
No. It does not matter. The Italians can make better shotguns cheaper. The sky is not falling.

peterg7 · February 9, 2018, 11:03 AM

Quote:

Originally Posted by Aguila Blanca

Curious. At the 2017 SHOT Show, Colt had their usual, huge display despite having just weathered yet another financial crisis. Remington also had their usual, huge display.

Fast forward to SHOT 2018. Colt's display was comparatively tiny -- not as small as some of the single-table operations, but a mere shadow of the area they had in 2017. The Remington display for 2018 was the same size and layout as 2017. And they introduced a new VP for handgun sales. I'm not sure what, if anything, that all means, but I'll toss it out to feed the discussion.

Big Green must’ve still had room on the Credit Card

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hub1home · February 9, 2018, 12:41 PM

It sure matters to me. I like Remington. It is always bad when we lose a major gun manufacturer.

Marco Califo · February 9, 2018, 12:57 PM

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.

lamarw · February 9, 2018, 01:16 PM

Could it be an attempt to further separte more of its operation from Ilion, NY?

I have read things are going well in Huntsville, AL or is that just white wash?

Doyle · February 9, 2018, 03:12 PM

Lamarw brings up an interesting question. Is bankruptcy a way to easily get out of union contracts that it has with the Ilion employees?

SPEMack618 · February 9, 2018, 03:53 PM

Personally, my belief is that Remington, under the umbrella of the Freedom Group and what not has ran itself into the ground.

The 770 and 783 weren't all that great, even in the budget rifle market.

Trying to order a 700 is an exercise in frustration. As is trying to find a 870 that isn't an Express.

The R-51 was an utter failure.

Mike38 · February 9, 2018, 05:16 PM

I'll be the first to admit that I do not understand big business, financing, investments, bankruptcy, etc. etc. But, how often do we see this? A group of investors (Freedom Group) buys up a huge company that may or may not be in a bit of trouble, buys them cheap. Runs the company into the ground, only worried about the almighty dollar, then breaks it up into smaller pieces and sells it off. The investors still make money after the dust settles. They are happy, and to hell with anyone else.

Marco Califo · February 9, 2018, 05:52 PM

Mike38, that is about right. Often the former companies become mere brand names, thay can be bought sold and traded (Herters, Gander Mountain, Winchester). They just exist for the marketing value in the name when it used to be a good company.
For instance, lets say the Canada rifle company buys Remington's brand name, and starts slapping Remington on their Rifles, the new Reminington Excis. If if is a good rifle, we might stary buying them. To hell with Rem management, bond deals, and steel makers who lost a big chunk of accounts receivable.

TXAZ · February 10, 2018, 09:11 AM

Mike38, let me help your understanding of large corporations (been with them for 40 years and seen several “breakups” and divestitures from the inside) and restructuring/ financing.

The goal of any investor is to maximize cash flow, value or other financial value to the shareholders. Intentionally running a company into the ground is asking for lawsuits and possibly criminal charges. Restructuring is not.

If the parts of a company are more valuable than the whole, which can be true for companies in trouble, (particularly if there is a bankruptcy, major lawsuit or dischargable debt involved) then selling off the healthy parts and leaving the debt or liabilities in the parent or a spun-off entity can allow the healthier components to succeed. Workers (some, many, most) keep their jobs. Sometimes there are wage concessions involved.

Yes someone get stuck with the debt/ loss. That’s often stockholders or large plaintiffs. Used to be more often it was workers or retirees’ pension accounts.
There are legal firms that are excellent at restructuring and lawfully making the debt or large lawsuits go away. As such, stockholders and investors are usually required to acknowledge/ are given notice that their investment could fail.
Hope that helps.

Jim Watson · February 10, 2018, 09:33 AM

Apparently Remington management has discovered the Colt Secret of how to siphon off money from successive generations of investors and creditors without actually doing anything physical.

FITASC · February 10, 2018, 09:58 AM

Quote:

The goal of any investor is to maximize cash flow, value or other financial value to the shareholders. Intentionally running a company into the ground is asking for lawsuits and possibly criminal charges. Restructuring is not.

True for most folks; however capital groups like Cerebus typically come in on the cheap, make a buck as fast as possible and then sell off whatever remains. These type of companies did a lot of that, especially back in the 80s.

TXAZ · February 10, 2018, 10:04 AM

Quote:

Originally Posted by FITASC

True for most folks; however capital groups like Cerebus typically come in on the cheap, make a buck as fast as possible and then sell off whatever remains. These type of companies did a lot of that, especially back in the 80s.

Same for Cerebus, Carl Icahn, and others. They just have a much shorter investment horizon.

peterg7 · February 10, 2018, 10:12 AM

Quote:

Originally Posted by Mike38

I'll be the first to admit that I do not understand big business, financing, investments, bankruptcy, etc. etc. But, how often do we see this? A group of investors (Freedom Group) buys up a huge company that may or may not be in a bit of trouble, buys them cheap. Runs the company into the ground, only worried about the almighty dollar, then breaks it up into smaller pieces and sells it off. The investors still make money after the dust settles. They are happy, and to hell with anyone else.

I don’t believe that’s the case at all with Remington, they were an old company that made outdated product. They tried to expand their product line by adding handguns and bought other smaller companies , unfortunately for them the AR market was saturated as is the CC handgun market .

so now what? Downsize, focus on their core? What kind of demand is there for mid quality rifles and shotguns? Ruger and savage seem to be-able to sell cheap rifles that guys want as does Mossberg with shotguns.

Time to fold up the tent or go real small.

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Don P · February 10, 2018, 11:11 AM

Quote:

So the question is, with all the other manufacturers out there, would it matter to you or the industry if Remington leaves the business?

To a degree yes. Anytime a firearms manufacturer goes south that's just one less in "our" corner.
Supposedly when freedom Group bought up Para it was to be a good thing. And just like that Para was no more and the speculation was and is, that it was to help Remington get back into the hand gun market being the R pistol was such a disaster. The 1911 they have out is just way over priced for a production gun, IMO

Mike38 · February 10, 2018, 11:56 AM

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.

peterg7 · February 10, 2018, 01:45 PM

^ 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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artsmom · February 13, 2018, 11:06 AM

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.

ndking1126 · February 13, 2018, 11:52 AM

Quote:

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.

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.

Marco Califo · February 13, 2018, 11:53 AM

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.

February 9, 2018, 08:37 AM	#1
TXAZ Senior Member Join Date: September 5, 2010 Location: McMurdo Sound Texas Posts: 4,322	Does it matter? Remington seeking financing for Bankruptcy There is an interesting issue with Remington looking for financing to go into bankruptcy : Does it matter? Remington has made some classic firearms including the iconic 700. So the question is, with all the other manufacturers out there, would it matter to you or the industry if Remington leaves the business? Remington needs $$$’s to file bankruptcy My guess is it won’t matter much, as companies *seeking financing to go bankrupt* usually don’t emerge as their old self, and are often parted out and sold off. __________________ Cave illos in guns et backhoes Last edited by TXAZ; February 9, 2018 at 08:43 AM. Reason: Link issue

February 9, 2018, 09:46 AM	#6
Marco Califo Senior Member Join Date: April 4, 2011 Location: LA (Greater Los Angeles Area) Posts: 2,598	Bankruptcy is a financing tool. Used with cunning and skill by our prez, and many others. There also different flavors (chapter 7 liquidation, chapter 11 deptor in possession reorganization). Those are for individuals, there are corresponding rules for businesses. Savage went through BK a few years ago, then came back with the Accutrigger and Axis line. I say a financing tool because it is usually used to get rid of hopelessly excessive dept, that usually resulted from mergers, acquisitions, equity fund buy outs, and general stupidity. I own Remington shotguns. My last shotgun purchased was Italian. Remington could reorganize and operate: that requires new money. That seems to be the case here. Winchester and Herters also went through BK, and devolved into "brand names" owned by profitable companies. The USSR went through national BK. The evil empire morphed into the evil Russian commonwealth. No. It does not matter. The Italians can make better shotguns cheaper. The sky is not falling. __________________ ............ Last edited by Marco Califo; February 9, 2018 at 09:49 AM. Reason: Spelling/typos

February 9, 2018, 12:57 PM	#9
Marco Califo Senior Member Join Date: April 4, 2011 Location: LA (Greater Los Angeles Area) Posts: 2,598	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. __________________ ............

February 9, 2018, 03:53 PM	#12
SPEMack618 Senior Member Join Date: June 21, 2010 Location: Central Georgia Posts: 1,863	Personally, my belief is that Remington, under the umbrella of the Freedom Group and what not has ran itself into the ground. The 770 and 783 weren't all that great, even in the budget rifle market. Trying to order a 700 is an exercise in frustration. As is trying to find a 870 that isn't an Express. The R-51 was an utter failure. __________________ NRA Life Member Read my blog! "The answer to any caliber debate is going to be .38 Super, 10mm, .357 Sig or .41 Magnum!"

February 9, 2018, 05:52 PM	#14
Marco Califo Senior Member Join Date: April 4, 2011 Location: LA (Greater Los Angeles Area) Posts: 2,598	Mike38, that is about right. Often the former companies become mere brand names, thay can be bought sold and traded (Herters, Gander Mountain, Winchester). They just exist for the marketing value in the name when it used to be a good company. For instance, lets say the Canada rifle company buys Remington's brand name, and starts slapping Remington on their Rifles, the new Reminington Excis. If if is a good rifle, we might stary buying them. To hell with Rem management, bond deals, and steel makers who lost a big chunk of accounts receivable. __________________ ............

February 9, 2018, 09:16 AM	#2
Aguila Blanca Staff Join Date: September 25, 2008 Location: CONUS Posts: 18,467	Curious. At the 2017 SHOT Show, Colt had their usual, huge display despite having just weathered yet another financial crisis. Remington also had their usual, huge display. Fast forward to SHOT 2018. Colt's display was comparatively tiny -- not as small as some of the single-table operations, but a mere shadow of the area they had in 2017. The Remington display for 2018 was the same size and layout as 2017. And they introduced a new VP for handgun sales. I'm not sure what, if anything, that all means, but I'll toss it out to feed the discussion.

February 9, 2018, 09:32 AM	#3
johnwilliamson062 Junior member Join Date: May 16, 2008 Posts: 9,995	No Remington products on my long list. Much the same problem as colt IMO. Little innovation in my lifetime.

February 9, 2018, 12:41 PM	#8
hub1home Senior Member Join Date: November 15, 2014 Posts: 182	It sure matters to me. I like Remington. It is always bad when we lose a major gun manufacturer.

February 9, 2018, 01:16 PM	#10
lamarw Senior Member Join Date: April 12, 2010 Location: Lake Martin, AL Posts: 3,311	Could it be an attempt to further separte more of its operation from Ilion, NY? I have read things are going well in Huntsville, AL or is that just white wash?

February 9, 2018, 03:12 PM	#11
Doyle Senior Member Join Date: June 20, 2007 Location: Rainbow City, Alabama Posts: 7,167	Lamarw brings up an interesting question. Is bankruptcy a way to easily get out of union contracts that it has with the Ilion employees?

February 9, 2018, 05:16 PM	#13
Mike38 Senior Member Join Date: December 28, 2009 Location: North Central Illinois Posts: 2,710	I'll be the first to admit that I do not understand big business, financing, investments, bankruptcy, etc. etc. But, how often do we see this? A group of investors (Freedom Group) buys up a huge company that may or may not be in a bit of trouble, buys them cheap. Runs the company into the ground, only worried about the almighty dollar, then breaks it up into smaller pieces and sells it off. The investors still make money after the dust settles. They are happy, and to hell with anyone else.

February 10, 2018, 09:11 AM	#15
TXAZ Senior Member Join Date: September 5, 2010 Location: McMurdo Sound Texas Posts: 4,322	Mike38, let me help your understanding of large corporations (been with them for 40 years and seen several “breakups” and divestitures from the inside) and restructuring/ financing. The goal of any investor is to maximize cash flow, value or other financial value to the shareholders. Intentionally running a company into the ground is asking for lawsuits and possibly criminal charges. Restructuring is not. If the parts of a company are more valuable than the whole, which can be true for companies in trouble, (particularly if there is a bankruptcy, major lawsuit or dischargable debt involved) then selling off the healthy parts and leaving the debt or liabilities in the parent or a spun-off entity can allow the healthier components to succeed. Workers (some, many, most) keep their jobs. Sometimes there are wage concessions involved. Yes someone get stuck with the debt/ loss. That’s often stockholders or large plaintiffs. Used to be more often it was workers or retirees’ pension accounts. There are legal firms that are excellent at restructuring and lawfully making the debt or large lawsuits go away. As such, stockholders and investors are usually required to acknowledge/ are given notice that their investment could fail. Hope that helps. __________________ Cave illos in guns et backhoes

February 10, 2018, 09:33 AM	#16
Jim Watson Senior Member Join Date: October 25, 2001 Location: Alabama Posts: 18,541	Apparently Remington management has discovered the Colt Secret of how to siphon off money from successive generations of investors and creditors without actually doing anything physical.

February 10, 2018, 11:56 AM	#21
Mike38 Senior Member Join Date: December 28, 2009 Location: North Central Illinois Posts: 2,710	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. Last edited by Mike38; February 10, 2018 at 12:45 PM.

February 10, 2018, 01:45 PM	#22
peterg7 Senior Member Join Date: July 20, 2017 Posts: 316	^ Freedom Group doesn’t exist anymore, it’s Remington outdoor company. With Remington Arms a subsidiary, don’t know if that includes ammo company. Sent from my iPhone using Tapatalk

February 13, 2018, 11:06 AM	#23
artsmom Senior Member Join Date: January 24, 2005 Location: Nebraska Posts: 334	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. Last edited by artsmom; February 13, 2018 at 11:13 AM.

February 13, 2018, 11:53 AM	#25
Marco Califo Senior Member Join Date: April 4, 2011 Location: LA (Greater Los Angeles Area) Posts: 2,598	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. __________________ ............