In the latest evidence that despite the gun industry's essentially unchallenged chest thumping that things are going great, really great for firearm manufacturers, a giant dose of reality reared its ugly head last Friday when America's largest gun conglomerate, Freedom Group, canceled a long-delayed IPO (Initial Public Offering).
And Freedom Group isn't just any gun company. In fact, as measured by its own market position and market share descriptions, the self-described "largest manufacturer of commercial firearms and ammunition" works to present itself as just about every gun company.
The companies that comprise Freedom Group run the gamut from manufacturers of traditional sporting arms to military-style assault weapons. Included are such mainline gun industry stalwarts as Remington, Marlin, Harrington & Richardson, and New England Firearms. At the other end of the spectrum, Freedom Group also includes leading AR15-type assault weapon manufacturers Bushmaster and DPMS. Freedom Group states that it has the number one U.S. market position in shotguns (31 percent), ammunition (33 percent), traditional rifles (37 percent), and "modern sporting rifles" (48 percent). ("Modern sporting rifle" is the latest nom de jour that the gun industry has dubbed assault weapons, a rebranding effort that's been about as successful as Freedom Group's IPO.)
For anyone who's been watching the gun industry as a whole, and Freedom Group in particular, the withdrawal of the IPO -- amidst a cratering gun market and ongoing leadership changes at the company that reek of panic -- is no big surprise.
According to Freedom Group's 2010 annual report:
Net sales for the year ended December 31, 2010 were $386.6 million, a decrease of $121.5 million, or 23.9%, as compared to the year ended December 31, 2009. Centerfire rifle sales decreased by $108.1 million, or 30.9%, as compared to the prior-year period, primarily due to reduced sales demand for modern sporting products as the 2009 surge ended and sales returned to more historical levels. Shotgun sales decreased by $6.7 million, or 5.7%, as compared to the prior-year period. Rimfire rifle sales decreased by $5.9 million, or 18.2%, as compared to the prior-year period.
Without doubt, gun industry apologists both official (the National Shooting Sports Foundation) and unofficial (the National Rifle Association) will find some rationale to explain how a planned gazillion dollar deal offered as validation of both the vitality of the gun industry and the proven, yes proven, demand for guns has frittered away into a financial footnote.
Maybe, like the ever-optimistic Spinal Tap, they can claim that they've chosen to become more selective in their appeal.
Or maybe freedom's just another word for nothing left to shoot.
Follow Josh Sugarmann on Twitter: www.twitter.com/VPCinfo
See just like anything else some companies are up and some are down
Nothing to see here! Just another one of Joshie's famous tempests in a tea pot!!!
Old SF MJT
I haven't heard the latest on Texas yet.
I am sure you are fully aware that gun sales spiked in 2009 largely due to perceived gun control legislation that might be enacted by a democratically controlled congress and an incoming President that had a prior political track record as vehemently opposed to firearms. While many gun manufacturers are privately held and financial information is hard to ascertain, the NCIS reported approximately 14 million firearm sold in 2009 – the highest of the 12 years of data available. It is safe to assume that 2009 was an “anomaly” – an outlier - in terms of trends with regards to firearms sales.
Given the 2009 spike, it only seems obvious that when gun control measures either failed to materialize or failed to progress, firearms sales returned to more normal levels in 2010. However, even with that said, sales in 2010 were certainly much higher than in 2008. For example, Ruger reported sales of $181.5 million in 2008, $271 million in 2009 and $255.2 million in 2010. The compounded average growth rate of Ruger sales from 2005 to 2010 is 10.5%. One firm does not make an industry but I think Ruger is a good surrogate for the industry.
Finally, many factors weigh in on a company's decision to go public - not just their latest sales figures.
Gun sales continue at a brisk pace, violent crime continues to fall.
What’s your point Josh? Ruby Tuesday?
Correct. From the annual report linked by Josh:
Gross Profit for 2010 $233.6 million; 2009 $281.8 million; 2008 $197.0 million; 2007 $78.9 million
When telling my wife about the evening she focused on the fact that l "lost" $175 and figured out that she wouldn't be getting any coin for the shoe store the next day.
Me, I focused on the more important fact that i still came home with my $25.
Lesson learned? Peaks and valleys while playing cards is inevitable. But you're not in danger of losing your house if you're a strong enough card player to be consistent over the long haul.
Semper fi
Hawaii permit applications have nearly doubled since 2000, while the number of registered firearms has surged more than 130 percent.
http://www.saysuncle.com/2011/04/05/gun-sales-up-11/
Violence Policy Center
Press release April 7, 1999
Like a broken record.
Semper fi
Shouldn't the industry be dead by now and the NRA memberless?
Gun sales for this group plummet to a meager $386.6 million. Chump Change.
Coincidence?
NO!
I AM WINNING!
http://tinyurl.com/4k346he