Remington emerges from bankruptcy

[OVERKILL]

From the Remington website

Originally Posted By: Remington

Madison, NC – May 16, 2018 – Remington Outdoor Company (“Remington” or “the Company”), one of the world’s leading designers and manufacturers of firearms, ammunition, and related products, announced today that it has emerged from Chapter 11 after successfully implementing its plan of reorganization (“the Plan”) previously confirmed by the Delaware bankruptcy court on May 4, 2018.

The Plan provides a comprehensive balance sheet restructuring of the Company and converts over $775 million of the Company’s debt into equity. In addition, the Plan provides the Company with a new Asset Based Loan (“ABL”) facility of $193 million, the proceeds of which will refinance its prior ABL facility in full, a new $55 million First-In, Last-Out Term Loan and a new $100 million Term Loan. As an integral part of the Plan, all trade and business claims are unimpaired and will be addressed in the Company’s normal course of business. The Plan received support from over 97% of the voting Term Loan Lenders and all of the voting Third Lien Noteholders.

As provided in the Plan, all shares of Remington’s common stock issued prior to the commencement of Remington’s bankruptcy proceeding were cancelled upon emergence, and Remington has issued new shares of common stock and, in some cases, warrants, to the holders of its previously outstanding funded debt in return for their allowed claims against Remington. The term of Remington’s previous Board of Directors expired upon emergence and a new Board of Directors shall be appointed immediately.

“It is morning in Remington country,” said Anthony Acitelli, Chief Executive Officer of Remington. Mr. Acitelli continued, “We are excited about the future – producing quality products, serving our customers, and providing good jobs for our employees.”

Remington’s legal counsel is Milbank, Tweed, Hadley & McCloy LLP, its investment banker is Lazard Freres & Co. LLC, and its financial advisor is Alvarez & Marsal. The Term Loan Lenders’ legal counsel is O’Melveny & Myers LLP and their investment banker is Ducera Partners LLC with M-III Advisory Partners, LP also advising the Term Loan Lenders. The Third Lien Noteholders’ counsel is Willkie Farr & Gallagher LLP and their investment banker is Perella Weinberg Partners LP.


Great news for Remington, hopefully they invest in some updated tooling for their facilities, which I believe to be part of the quality decline many have spoke of.

 

[Zee09]

Winchester often lost its way over the years.
Like the Pre64 W70. It wasn't phenomenal but compared to the utter slop
they built in 64 is was glorious.

Every time Winchester cut corners they lost market share

 

[billt460]

Originally Posted By: Zee09
Winchester often lost its way over the years.
Like the Pre64 W70. It wasn't phenomenal but compared to the utter slop
they built in 64 is was glorious.

Every time Winchester cut corners they lost market share


It's not so much about "cutting corners", as it is being able to make the product, and still be able to charge enough for it, and still remain competitive in the market. To manufacture a "pre 64" Model 70 today would cost too much. They wouldn't be able to sell enough of them. A lot of guns fell into this category over the years, and went out of production as a direct result. Not just the Model 70. The all steel Browning Auto V, the Winchester Model 88, and the Colt Python are all victims of being too cost prohibitive to produce, and be priced competitively enough to sell.

Most shooters cry about how well made these guns were, and how much they miss them. And they were, no question about it. But if they were made today they wouldn't be able to sell enough of them. Because most shooters would be crying more about how unaffordable they have become, instead of how well made they are.

Look at the Colt Single Action Army. It is now produced in Colt's Custom Shop. And only in very small numbers. Because they run right around $2K a pop. That's what Colt has to charge for them in order to turn a profit. How many people out there want to spend $2K on a single action pistol, when they can buy a Ruger Blackhawk for $600.00 and change? Very few.

It's much the same with the Smith & Wesson Model 41 all steel .22 Target Pistol. They run around $1,150.00..... Assuming you can even find one. But S&W Victory's and Ruger SR-22's are available cheap, and by the boxcar load. Because they can sell them.

Same deal with the Marlin Golden 39-A. They're expensive and hard to come by. And you will never find one discounted. But the Model 60 is cheap, and stacked deep at every big box store. Because that's what most of today's shooters want. Everyone likes to talk about quality. The problem is most shooters today don't want to pay for it. So they either don't make them, or else when they do it's in very small numbers and priced accordingly.

Gun manufacturers make what they can sell. If they thought they could still manufacture these guns, and sell enough of them to make a profit, they would. But they can't so they don't.

 

[maxdustington]

Originally Posted By: billt460
Originally Posted By: Zee09
Winchester often lost its way over the years.
Like the Pre64 W70. It wasn't phenomenal but compared to the utter slop
they built in 64 is was glorious.

Every time Winchester cut corners they lost market share


It's not so much about "cutting corners", as it is being able to make the product, and still be able to charge enough for it, and still remain competitive in the market. To manufacture a "pre 64" Model 70 today would cost too much. They wouldn't be able to sell enough of them. A lot of guns fell into this category over the years, and went out of production as a direct result. Not just the Model 70. The all steel Browning Auto V, the Winchester Model 88, and the Colt Python are all victims of being too cost prohibitive to produce, and be priced competitively enough to sell.

Most shooters cry about how well made these guns were, and how much they miss them. And they were, no question about it. But if they were made today they wouldn't be able to sell enough of them. Because most shooters would be crying more about how unaffordable they have become, instead of how well made they are.

Look at the Colt Single Action Army. It is now produced in Colt's Custom Shop. And only in very small numbers. Because they run right around $2K a pop. That's what Colt has to charge for them in order to turn a profit. How many people out there want to spend $2K on a single action pistol, when they can buy a Ruger Blackhawk for $600.00 and change? Very few.

It's much the same with the Smith & Wesson Model 41 all steel .22 Target Pistol. They run around $1,150.00..... Assuming you can even find one. But S&W Victory's and Ruger SR-22's are available cheap, and by the boxcar load. Because they can sell them.

Same deal with the Marlin Golden 39-A. They're expensive and hard to come by. And you will never find one discounted. But the Model 60 is cheap, and stacked deep at every big box store. Because that's what most of today's shooters want. Everyone likes to talk about quality. The problem is most shooters today don't want to pay for it. So they either don't make them, or else when they do it's in very small numbers and priced accordingly.

Gun manufacturers make what they can sell. If they thought they could still manufacture these guns, and sell enough of them to make a profit, they would. But they can't so they don't.


I disagree completely, it has become more profitable to spend the money on marketing instead of quality. When a company starts going down that road they always end up selling their brand name out and angering their loyal customers.

People will pay for quality, especially when it comes to a non-essential such as a gun.

 

[billt460]

Originally Posted By: maxdustington
People will pay for quality, especially when it comes to a non-essential such as a gun.


Not en masse they won't. If they would, guns like the Colt Python would have never been discontinued. And the S&W Model 41 would be a top seller, and not a special production. The cost to produce these guns exceeded what they could charge for many of them. They're gone as a result. They would never sell enough of them. It's why the Marlin Model 60 out sells the much higher quality Model 39-A. It's cheaper. Most people today aren't willing to part with almost $700.00 for a .22. But they'll spend $169.00 for a Model 60 on sale.

If people were willing to pay for quality, the high grade guns would sell as well or better than the plastic fantastics. They don't.

 

[maxdustington]

Originally Posted By: billt460
Originally Posted By: maxdustington
People will pay for quality, especially when it comes to a non-essential such as a gun.


Not en masse they won't. If they would, guns like the Colt Python would have never been discontinued. And the S&W Model 41 would be a top seller, and not a special production. The cost to produce these guns exceeded what they could charge for many of them. They're gone as a result. They would never sell enough of them. It's why the Marlin Model 60 out sells the much higher quality Model 39-A. It's cheaper. Most people today aren't willing to part with almost $700.00 for a .22. But they'll spend $169.00 for a Model 60 on sale.

If people were willing to pay for quality, the high grade guns would sell as well or better than the plastic fantastics. They don't.


My Henry Golden Boy cost me $750 cdn in 2015 I think. My AR was $800 last year and I got a Henry AR-7 for $300 last year which I thought was a pretty good deal, all three brand new.

Guns are more niche here in Canada, but I can provide a better example:

Stanley bought Craftsman and is returning them to US production. How many US made 3/8 socket sets do you think they will sell when they appear in stores, even though they can go to HF and get the same set for 1/3 the price? Some people buy on price, some on quality and others on politics.

It is not 2006 anymore, a portion of the population of the US that voted in a particular manner in 2016 knows what happens when you race to deliver the cheapest product. Those are the people who buy guns.

 

[billt460]

Originally Posted By: maxdustington
.....I can provide a better example:

Stanley bought Craftsman and is returning them to US production. How many US made 3/8 socket sets do you think they will sell when they appear in stores, even though they can go to HF and get the same set for 1/3 the price?


Harbor Freight is making a killing. Their quality and guarantee on their best line of tools is every bit as good as Craftsman. So yes they'll sell far more. Equal quality for one third the cost is why.

But that's not the case with guns. A pre 64 Winchester Super Grade Model 70 today is about the same level of quality as a Dakota Arms Model 76 with no engraving. A rifle available from Remington's Custom Shop. (Remington Arms owns Dakota Arms). Today the Dakota bolt action runs around $4K. You can buy a Remington 700 BDL for around $800.00. It's not the same quality, but it's far less costly.

You have to remember that today most people do not have that much spendable income like they did in the 60's. Today they own more cars, TV's, bigger houses, etc. They can't afford high quality guns. And they are less important to them. Many things are different in today's society. People don't buy guns to "hand down". They buy them to consume them. We live in a disposable society today. TV's, microwave ovens, telephones, DVR's, tools. Nothing is repaired today. It's simply tossed and replaced. Guns are similar.

When I received my first .22, the first thing my father taught me was how to clean it and take care of it. That rubbed off. Today I have guns that are 45 years old that look like they just came from the box. And they've been shot plenty. I look at kids at my local range shooting their 10/22's, and they look like they dragged them there behind the car. They don't have a clue what "heirloom quality" even means today. It's sad in a way, but that's the way it is.

 

[OVERKILL]

Originally Posted By: billt460
Originally Posted By: maxdustington
.....I can provide a better example:

Stanley bought Craftsman and is returning them to US production. How many US made 3/8 socket sets do you think they will sell when they appear in stores, even though they can go to HF and get the same set for 1/3 the price?


Harbor Freight is making a killing. Their quality and guarantee on their best line of tools is every bit as good as Craftsman. So yes they'll sell far more. Equal quality for one third the cost is why.

But that's not the case with guns. A pre 64 Winchester Super Grade Model 70 today is about the same level of quality as a Dakota Arms Model 76 with no engraving. A rifle available from Remington's Custom Shop. (Remington Arms owns Dakota Arms). Today the Dakota bolt action runs around $4K. You can buy a Remington 700 BDL for around $800.00. It's not the same quality, but it's far less costly.

You have to remember that today most people do not have that much spendable income like they did in the 60's. Today they own more cars, TV's, bigger houses, etc. They can't afford high quality guns. And they are less important to them. Many things are different in today's society. People don't buy guns to "hand down". They buy them to consume them. We live in a disposable society today. TV's, microwave ovens, telephones, DVR's, tools. Nothing is repaired today. It's simply tossed and replaced. Guns are similar.

When I received my first .22, the first thing my father taught me was how to clean it and take care of it. That rubbed off. Today I have guns that are 45 years old that look like they just came from the box. And they've been shot plenty. I look at kids at my local range shooting their 10/22's, and they look like they dragged them there behind the car. They don't have a clue what "heirloom quality" even means today. It's sad in a way, but that's the way it is.


This is quite true. I have shot with a guy who didn't look after his guns I was appalled at the condition of them. Mine are cleaned and oiled every time they go out, but I'm also willing to spend a lot more money than probably most on a quality rifle in the first place. My CDX-33 is hardly what I'd call cheap, but it is a beautiful rifle, and probably one you'd really like.