Remington Outdoor, the second-largest U.S. gunmaker has suffered a “rapid” and “sharp” deterioration in sales and a similar drop in profits since January, and faces “continued softness in consumer demand for firearms,” credit analysts at Standard & Poor’s Global Ratings said in a report Friday.

S&P as a result has cut the company’s corporate credit rating — already at a junk-bond-level CCC+ — two full notches, to CCC-, a move likely to make the company’s high-yield debt less attractive to investors and lenders, and force Remington to pay more in interest. The company could face a change in control, bankruptcy, or default on its debt by next year.

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 adds.

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.

Default is not yet “a virtual certainty,” the report added.

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I might have bought a few of their guns, but I can't see paying premium prices for sub par garbage. Every new Remington I have picked up has been junk. 870's with vent ribs that look more like mountain highways, triggers that are absolute crap, and a fit and finish usually reserved for sub $250 guns. No thanks....Maybe that is your true problem, people just aren't buying YOUR GUNS there Remington!

They need to hold out until my ammo rebate check comes in...

Yeah, sadly, the problem is much more so with Remington themselves than anything else.

The R51 was a flop, their quality ebbs and flows, it's a great name but fading relevancy.

Capitalism at its finest. Somebody (in this case a lot of somebodys) does a better job for a cheaper/same price and guess what?

You hate to see a historic company like them go belly-up, but they did it to themselves.

As has been mentioned, there isn't "continued softness in consumer demand for firearms", there is continued softness in consumer demand for THEIR firearms.

quote:

Originally posted by JALLEN:
A backlog of unsold, unwanted firearms will force Remington to operate at a loss

Emphasis on unwanted.

quote:

Originally posted by 46and2:
The R51 was a flop

Don't forget the subsequent RP9/RP45 fiasco.

Their new RP9 striker-fired pistol looks like a dog too. My local Fleet Farm is blowing them out for $199 today but based on the reviews I've read I'll pass. Sad fate for a once-great company.

They used to have a big plant in upstate NY east of Syracuse, last I knew they had moved production down south (AL?).

Maybe they will sell off Marlin to someone who will make it great again!

This is a downside of selling bonds against your company.

If they hadn't sold bonds to make [it appear] the company more profitable, they wouldn't be on the fringes of defaulting. They could just cut back on production (that whole supply and demand thing).

Yes, they seem to have several locations, maybe ammo included too. They are mostly down South, but even SD listed for employment opportunities.

I don't get excited over anything new from Remington. The only sorta new gun is a 10+ y/o Model 7 in 243. I have an older 870 & then a custom rifle built off a 700 action.

I wish them well, don't have a problem with most Remington ammo. I like options, gun sales are down since Obummer left office.

quote:

Originally posted by Sigmund:
They used to have a big plant in upstate NY east of Syracuse, last I knew they had moved production down south (AL?).

yes, Huntsville Alabama.

quote:

Originally posted by Sigmund:
They used to have a big plant in upstate NY east of Syracuse, last I knew they had moved production down south (AL?).

Most of the Ilion, New York production was moved to Huntsville, Alabama. Remington also produces firearms in Hickory, Kentucky.

Remington ammo is made in Lonoke, Arkansas (just outside Little Rock).

Remington should announce that they will now be making wind mills, solar farms, and electric cars. The libs will jump on board and demand that Uncle Sugar subsidize them. Poof! The problem goes away.

Yesterday as I shopped Black Friday deals I was shocked at the new Remington prices. I'm not ancient at 36 but I'd rather have anything they made before I was born than anything they produce at this time. Not to mention the prices for this new stuff is crazy high in my opinion. I guess the cost of manufacturing is a factor as it was with Colt. I know most of us would pony up (pun intended) for a Python or Trooper made to the same standards and quality seen in the 1970's and I feel same about a Remington 700. It's a shame to see an American company struggle like this but I feel it's self inflicted as they've lost touch with us, the folks purchasing their wares.

Older Marlin 1894's in 357 Mag sell for aout a grand.

Just make some good quality rifles and you'll be fine. Instead, the R51, the worlds largest striker fired 9mm, and everything theu make is hit or miss.

I just hope when they go down, someone good buys the 870 production machinery.

We continue to see this trend in gunmakers that want to build cheap rather than quality. Remington started going downhill when they stopped making the Model 32, arguable the best O/U shotgun design ever, and sold the design to Krieghoff. The Model 870 was the most popular shotgun in the world but they have dumbed it down to cheap junk. Late model 700's became a disaster. Colt stopped making fine DA revolvers and S&W started producing cheap junk. The list goes on. I understand the forces of a competitive marketplace and personnel costs for competent gunsmiths, but there has to be a point where the tradeoff of quality for price is self destructive.

That’s what happens when Bob Nardelli is put incharge of corporations

Older, established, successful companies have a problem keeping up with innovation. Older companies will reduce their engineering staff and rely on older technology. Then they must compete with the newer companies which are introducing new approaches to mechanisms, systems, materials, and price.
To stay in the game, they buy competing companies so that they do not have to invest in engineering and development. But, if the competing company had a truly successful product, the old, established company would not be able to buy them. So it just adds to their collection of mediocre products.
It is a downward spiral.
And then, there are the customers who buy a price tag instead of a product. Every review of any firearm will mention "affordable" and "cost". Whenever an established manuf. competes on the "cheap" side of the equation, quality will suffer and the critiques will always compare past quality products to their modern "cheap" firearms. They will get beat over the head in the reviews. It accelerates the downward spiral in the life span of a company.