U.S.A. –-(Ammoland.com)- Remington, the nation's oldest gun manufacturer, has filed for Chapter 11 bankruptcy in the state Delaware. Remington started making hand-built flintlock rifles in 1816 in Ilion Gorge, New York. Remington is now head quartered in Madison, North Carolina.
Unlike other bankruptcies such as the Toy ‘R Us bankruptcy, Remington will stay in business without a noticeable change. This bankruptcy is not unlike the bankruptcy that Colt went through in 2015.
Executive Chairman of Remington, Jim Geisler, commented in a press release, “Since its founding over 200 years ago, Remington has been a uniquely American company and brand. Our longevity is owed to generations of loyal customers and hard-working employees who met challenges and delivered results. Difficult industry conditions make today's agreement prudent. I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage.”
During the bankruptcy proceedings, the company's manufacturing will not be interrupted. The bankruptcy will not affect payments to trade partners, employee wages and other benefits, and support for the customer base.
In the same press release, Anthony Acitelli, Remington's Chief Executive Officer, stated, “Importantly, the fundamentals of our core business remain strong. We have an outstanding collection of brands and products, the unqualified support of a vibrant community across the industry, and a deep and powerful culture. We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities. We look forward to serving our customers, our partners throughout the industry, and our many fine employees, now and long into the future.”
Remington has been suffering through what has become known among firearms manufacturers as the “Trump Slump.” During the Obama years and the 2016 election cycles, firearms sales reach an all-time high because of fears over new gun laws. Remington, like other firearms, manufactures, ramped up production to meet the increased demand. That was until Trump upset Hillary Clinton and won the presidential election, and the chances of gun bans decreased drastically. The demand died down due to the number of guns people had stocked up on while living under the threat of new gun laws.
Remington Outdoors sales in 2017 were just over $600 million. In 2016 Remington's sales were 30% higher. As of March 25th, 2018 Remington, was operating with a negative operating cash flow of $7.4 million according to the company records.
The company will be restructuring its massive debt through the bankruptcy process like countless other companies have done. Remington debt will be reduced by $700 million, and the process will infuse the company with $145 million in new capital.
Remington private equity owner, Cerberus Capital Management will give over its equity to Remington's creditors. This agreement would mean the creditors will own an 82.5% stake in Remington. The third lean holders will receive 17.5% equity in the company. When Cerberus acquired Remington in 2007, it also received Remington's nearly $1 billion in debt.
Franklin Templeton Investments and JPMorgan Asset Management will provide a $100 million loan to fund the company's operation during the bankruptcy proceedings.
Remington will also need to find a lender for approximately $200 million in revolving credit. Reports say that Wells Fargo and Bank of America are in talks to provide the line of credit. Both banks have declined to comment on the reports.
It is unknown how long the bankruptcy proceedings will take, but the Remington and the debtors are pushing for a quick trip through the bankruptcy court. The proceedings can be as quick as 45 days.
Firearms manufacturers produced more than 11 million firearms in 2016 compared to 4 million in 2016.
Remington subsidiaries include Marlin, DPMS, Advance Armament Corporation, Tapco, Dakota Arms, EOTAC, H&R, Montana Rifleman Inc, RA Brands LLC, Remington Steam LLC, and DA Acquisitions.
About John Crump
John is a NRA instructor and a constitutional activist. He is the former CEO of Veritas Firearms, LLC and is the co-host of The Patriot News Podcast which can be found at www.blogtalkradio.com/patriotnews. John has written extensively on the patriot movement including 3%'ers, Oath Keepers, and Militias. In addition to the Patriot movement, John has written about firearms, interviewed people of all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons and is currently working on a book on the history of the patriot movement and can be followed on Twitter at @crumpyss or at www.crumpy.com.