Doing My Part To Stimulate The (Gun) Economy - 2017 Edition

I have been doing these Black Friday posts annually since 2010. The state of the firearms industry is a bit different this year. After many years of double-digit growth, it appears the bubble has burst. In earlier years you would have been lucky to find an AR-15 upper for $400 or so. Now you can get the whole AR for that price.

Let's just say it has not been a great year for the firearms industry in general. The thought that we would have a President Hillary and you better grab while grabbing is good was crushed late on the night of November 8th when Donald J. Trump was elected president. Dennis Badurina of Dragon Leatherworks who also owns a small gun store in Tennessee has been pointing out the state of the retail firearms industry with his posts on his Facebook page for a number of months. As Dennis notes, the industry is in freefall and is in a state of contraction.

I am going to make the assumption that the industry will be using Black Friday and Cyber Monday as a major tool to rid itself of excess inventory. If you are in the market for anything, I think you should find some good deals with careful shopping.

As with last year, I have decided not to reinvent the wheel and will point out some of the better aggregations of Black Friday/Cyber Monday sales. I will be adding links to individual companies as I go through the weekend when I find something that might not be covered elsewhere.

Starting off, there is the Black Friday page of Slickguns.com. It has links to the sales at all the major big box sporting and outdoor stores.

Crowd-sourcing is a great way to put many eyes together to find the deals. The /gundeals subreddit page of Reddit is one such place. They have a Black Friday megathread going that has a little bit of everything. The other major crowd-sourced effort is on Arfcom. Their "official GD Black Friday" thread is at 6 pages and counting. The first thing that caught my eye there was $8 PMags. You can never have enough magazines! Now if I can find some less expensive CZ P-09 mags, I'll be in hog heaven.

If you trend more towards the tactical, SoldierSystems.net has a dedicated post that is continually updated with Black Friday sales.

As for me, I'm good on most things. However, I'm in the market for a good quality handgun safe/strongbox with a mechanical keypad. My granddaughter Olivia Grace is almost three and has a little sister due in April. Little fingers can get in places they shouldn't be and I want to protect against that.

Finally, I'd like to remind everyone that No Lawyers - Only Guns and Money is an Amazon affiliate. All commissions that I earn from your purchases go to non-profit gun rights organizations like the Second Amendment Foundation and the NRA Civil Rights Defense Fund.

If you are in the market for an inexpensive tablet device, the Kindle Fire 7 is only $29.99. It was $33.33 last year. The Complementary Spouse uses her Fire daily to keep up with email, crafts, and family.

UPDATE:

There is a thread at 24hourcampfire.com with some more hunting related Black Friday specials.

My friend Andy Langlois of Ching and Rhodesian sling fame is having a sale on all his products. Save 20 percent off all his products from Nov. 22 – 28 and 10 percent off all products from Nov. 29 – Dec. 24, 2017. I have both his belts, both style of slings, and even a couple of holsters by Andy and the quality is top-notch. Go to https://www.andysleather.com/collections/black-friday-sale. Use the code "BlackFriday".

UPDATE II:

Steve Johnson at The Firearm Blog has posted what he considers his Top 5 deals in firearms for Black Friday. You can find it here.

Tom Gresham of Gun Talk Radio has compiled his own list of holiday deals in firearms, ammo, and accessories. He has a special page for it.

A Modest Proposal

The Complementary Spouse and I were watching Sharyl Attkisson's Full Measure news program this morning. She had a story on about waste and fraud in the rebuilding of Afghanistan and its security forces. That is irrelevant to my modest proposal. However, seeing Afghan police carrying AK-47s got me to thinking - why are they carrying ComBloc firearms when they could be carrying firearms made in the good old USA.

The US firearms industry has an inventory problem. They overbuilt before the 2016 election on the presumption that we would have a President Hillary which would cause a mad rush to buy while the getting was good. Instead we have President Trump and the pipeline is full of ARs that manufacturers and distributors are trying to clear out. Tam called it a "gun glut" today in a post.

You only have to see the emails and flyers from companies like Palmetto State Armory and CDNN to see that prices have plummeted.  The subreddit /r/gundeals is full of posts about great buys on anything AR. The deals are not just on any old no-name AR. They include stuff like the Colt LE6920 for $799 and the S&W MP15 for $499. Conversely, it doesn't look like the prices of AKs have fallen anywhere as much. Romanian Wasrs are still over $600.

President Trump campaigned on "buy American" and issued an Executive Order  in April which seeks to maximize the procurement of American-made products by Federal agencies. The Department of Defense and the State Department both provide security assistance to Afghanistan.

While it is somewhat counter-productive to my own selfish interests, I would propose that DOD and the State Department begin buying up much of this surplus inventory at these bargain prices. It would then be used to replace those ComBloc AKs with good, American made, semi-auto AR15s. While as a consumer I would miss being able to buy good quality AR lowers for $50 or less, I also recognize that I have a greater interest in seeing firearms companies - especially the smaller specialty ones - survive as going concerns. The average Afghani cop isn't going to care if he is issued a Del-Ton, a Colt, or a Spike's Tactical. He's just going to be happy that he has a new rifle. Reequipping the Afghanis with AR15s will also provide opportunities for training companies to instruct the Afghanis on the use, care, and maintenance of their new rifles.

I'm sure the media would portray this as a sop to the NRA and the firearms industry. Nonetheless, it helps an American industry, it fulfills a campaign promise to buy American, it ties the Afghanis to us for training, spare parts, etc., it could be done at bargain prices, and it helps preserve the smaller companies. My modest proposal is, at least to me, a win all around.

In News That I Missed, The Sky Is Falling

Actually, in the news I missed from last week, SCCY Industries is moving from Florida to the foothills of the Great Smoky Mountains in Tennessee.

From the Daily Times in Maryville, TN:

A Florida handgun manufacturer has reached an agreement with Blount Partnership to bring more than 350 jobs to Blount County with an initial $22.5 million investment, constructing a 150,000-square-foot campus to house corporate, research and development and manufacturing facilities.

SCCY Industries LLC — which company President Wayne Holt said is “probably the fastest growing semi-automatic handgun manufacturer in the United States”— also voiced plans Wednesday to move the company’s headquarters from Daytona Beach to the 68-acre lot in Big Springs Industrial Park.

SCCY founder and CEO Joe Roebuck said during today’s announcement that SCCY needs to expand and it’s “not happening” at its current location in Daytona Beach, Fla., where it employs about 200 people. “We’re at about 40,000 square feet and there’s no room to grow,” Roebuck said, explaining that the biggest problem the manufacturer has there is space and electricity.

Roebuck said his original plan was to expand here, but decided, “Tennessee’s been so great. We’ve got a big piece of land. I’m gonna do it all there.”

“I’m gonna keep a small footprint back in Florida, but I’m moving my headquarters here,” Roebuck said, later explaining, “It’s only going to be an office — maybe some engineering. Ninety-nine percent of the company is coming up here.”

Roebuck also said the estimated employment of 350 people is “very conservative.”

And in something that Michael Bane would appreciate, the story at the link above also included a video of his visit to the SCCY factory in Florida.

The Knoxville News Sentinel produced this video clip of the highlights of the story. They also included this about CEO Joe Roebuck's expansion plans.

Roebuck employs about 200 in his Florida factory, but plans to move only “a few key people,” maybe a half-dozen, to Tennessee as he gradually shuts down the Daytona Beach facility, he said.

Roebuck said he hopes to start construction on a 75,000-square-foot plant late this year or early next, and begin production in mid- to late 2018. Initially, it will have about 200 employees, hired locally, and SCCY will add 50 to 60 people per year for the following three years, he said.

"Anything from office work to machine operator all the way up to high-level administrator” will be hired, Roebuck said. He also intends to start a paid four-year apprenticeship program.

Roebuck plans a campus of five industrial buildings, plus a “sky lodge” to house visiting industry leaders and gun writers, with an outdoor shooting range, he said.

Given I live on the other side of the Smokies, I think this is a very interesting development. I can see why he picked the the Tennessee side rather than here in North Carolina - no income tax, less expensive land, a (somewhat) Republican governor, and a stronger industrial base than in the Asheville area. With some luck, maybe we'll see a blogger shoot put on by SCCY Industries similar to what Luckygunner.com did back in 2011. That would be cool.

Olympic Arms To Close Its Doors

Olympic Arms, one of the earliest makers of AR-15 clones, has announced that it is closing its door at the end of February. Long before there was a Stag or Daniel Defense there was Olympic Arms. According to their website's serial number history, they began making their ARs in 1979.

I don't know if this a general trend or merely an older company that was eclipsed by the younger, more innovative companies. I would tend to think it is the latter and not the former.

I do remember my friend Milo being all excited when he got his Olympic Arms AR-15. I had an email from his describing how he and his son John carefully broke it in. I'm guessing this was during the early years of the Clinton assault weapon (sic) ban.

Here is the announcement from the Olympic Arms website:

After more than 40 years of business, it is with great sorrow that we announce that February 28^th, 2017 will be the last day of operation for Olympic Arms, Inc.

The Schuetz family would like to express their heartfelt thanks to all their friends, associates, and partners that have been a part of the Olympic Arms experience. Most of all we would like to thank our loyal customers and patrons who have been with us all this time.

In the course of closing, we are announcing the following changes in policy effective immediately:

1. All sales are final.
2. No refunds or returns will be accepted after 1-25-2017.
3. On-line Shopping Cart will be active and effective while supplies last.
4. All Warranty service ceases 1-25-2017. Warranty work and repairs currently in-house will be serviced and returned.
5. New orders will only be taken for inventory currently in stock, or that can be built from remaining inventory.
6. All inventory will be liquidated.
7. ALL SALES will cease at close of business 28 February, 2017

 Thank you for your patronage.

The R51 Debacle Coming Home To Roost?

Remington Outdoor Company announced big changes in their management yesterday. George Kollitides is out as CEO and Chairman along with the CFO Ron Kolka who is "retiring". In addition, Walter McLallen and James Pike are retiring from the Board of Directors. Kollitides is being replaced by Jim "Marco" Marcotuli who is a director. Marcotuli will be the President, CEO, and interim Chairman.

If I had to speculate, I'd say that both the board and Cerberus didn't feel that Kollitides was up to the management challenges facing Remington. They are combining operations of most units in Huntsville, they are facing a threat to one of their iconic products - the Remington 700 rifle - over trigger issues and attendant lawsuits, and their splashy roll out of the R51 pistol turned into a debacle over quality issues.

It was also reported on Monday in the Sacramento Bee that the California State Teachers' Retirement System had finally cashed out their holdings in Remington aka Freedom Group.

The announcement came three weeks after Remington’s owner, New York private equity firm Cerberus Capital Management, offered to let CalSTRS and other investors cash out of their investments in the gun maker. Cerberus will place its investment in Remington in a separate investment vehicle.

“Consent to monetize our exposure to Remington Outdoor completes our decision to divest from banned firearm manufacturers,” said CalSTRS Chief Executive Jack Ehnes in a prepared statement. “All along we have sought a transaction that balances the best financial interests of the more than 879,000 educators we serve, while holding consistent with the values of our membership.”

CalSTRS had previously sold their investments in publicly traded Ruger and Smith & Wesson. The Remington investment was part of $375 million investment by the teachers' pension in Cerberus Capital Management.

According to the press release from Remington Outdoor Company, Kollitides stepped down "to pursue other interests but will continue to serve as a paid Senior Advisor to the Company for one year." That is HR-speak for he was allowed to resign in lieu of being fired and a "Golden Parachute" for keeping his mouth shut about it.

Ron Kolka had only been the CFO of Remington Outdoor Company since 2013. He had previously been the CFO of Daimler Chrysler prior to the Cerberus Capital buyout. He then stayed on with Cerberus after the Chrysler bankruptcy. For the next 30 days, he will be working with Jeff Pritchett who is joining the ROC board. Pritchett started his career with GM and then with Delphi in financial management. He then was the CFO of Vertis Communications before moving to Cerberus in 2013. Given that Remington had an increased net loss for the last quarter when compared to a year ago and also had a substantial decline in sales, I think this is a move to shore up the financial side of the company.

Jim Marcotuli who is stepping up to the CEO position has been the Co-Lead Director, Operations, of ROC since September 2014. Prior to joining Cerberus a few months prior to this, Marcotuli had been the President and CEO of North American Bus Industries which makes transit buses since 2009. He was responsible for moving much of their operations from Hungary to Anniston, Alabama.

Moving up to Vice Chairman of the Board will be Jim Campbell. Prior to joining Cerberus and the ROC board, Campbell spent 30 years with General Electric where his last job was as CEO, Appliances and Lighting. He joined GE as a management trainee in 1981 a year after Jack Welch became CEO of GE. Campbell came up through the "talent pipeline" at GE which was a rigorous performance driven, "up or out", environment. While there really isn't much of an age difference between Campbell and Marcotuli, I see Campbell's role at ROC as being a mentor to Marcotuli. He is quoted in the press release as saying, "I look forward to supporting Marco and the rest of the team as we redouble our efforts to ensure superior quality and customer service are front and center in everything we do."

Walter McLallen came to the ROC Board from hedge fund Meritage Capital Advisors. He was being paid at least $235,000 annually to serve as Vice Chairman of the Board. In addition, Meritage was being paid a retainer of $400,000 annually for advisory services. McLallen is Managing Director and Co-Founder of Meritage. McLallen is in his late 40s according to his Bloomberg profile.

Also retiring with McLallen is James J. Pike. Pike has been a member of the Remington board since 2007. He is a Managing Director of Cerberus Capital Managment. In his case, age may be a valid reason for his retirement. According to Bloomberg, Pike is 71. He served in management roles within the metalworking and parts industry for much of his career.

I see the combination of Marcotuli and Campbell as an effort to bring in more experienced management for Remington. Both are a good 10 years or more older than Kollitides and both have experience managing manufacturing operations. Kollitides, by contrast, came from the mergers and acquisitions world. His expertise was useful in building the Freedom Group/Remington Outdoor Company stable of companies. However, it isn't what was needed going forward to help ROC regain its footing in the firearms world.

Smith & Wesson Does Their Own Bit Of Shopping

Smith and Wesson Holdings Corporation (SWHC), the parent company of Smith & Wesson, got started early on their Black Friday shopping. They are reported to have purchased Battenfield Technologies for approximately $130 million. Battenfield Technologies is a Columbia, Missouri-based maker of firearms accessories.

Smith & Wesson Chief Executive James Debney said the acquisition “fits perfectly within our core firearm business. It also allows us to move more strongly into the hunting vertical as well as establish a strong platform for growth in our existing firearm accessories business, which has been a small but highly profitable part of our company.”

Smith & Wesson expects the deal, set to close in mid-to-late December, to boost the company’s margins, earnings and cash generation in its business year ending in April 2016. The move is also expected to contribute incremental revenue of more than $55 million for the 2016 business year.

Battenfeld Chief Executive Jim Gianladis will serve as the president of Battenfeld Technologies and will report directly to Mr. Debney.

Battenfeld was acquired by private-equity firm Clearview Capital in June 2012.

Battenfield's brands include Caldwell, Wheeler Engineering, Tipton Cleaning Supplies, Frankford Arsenal, Bog-Pod, Lockdown, Golden Rod Moisture Control, and Non-Typical Wildlife Solutions.

Battenfield was owned until 2012 by Larry Porterfield of MidwayUSA and his family. They sold their interest in the company to Clearview Capital and to members of the Battenfield management team.

News On The Business Of Guns

There are a number of news items from the last few days regarding the firearms industry that are worthy of attention.

First, ArmaLite of Geneseo, Illinois was bought out by Strategic Armory Corps (SAC) of Phoenix, Arizona. SAC was formed in 2011 as an acquisition vehicle with which to buy out firearms and firearms related companies. In addition to ArmaLite, SAC owns high-end tactical bolt-rifle maker Surgeon Rifles, suppressor maker AWC Systems Technology, and AWC Ammo. The head of SAC had this to say on the acquisition.

"ArmaLite is a tremendous addition to our group of outstanding companies and broadens our product line so we can better meet the needs of our customers", said Mark Johnson, SAC President and CEO. "The history of Mark Westrom over his 19 years of leading ArmaLite will provide a wealth of industry knowledge to our leadership team and allow us to further expand our ability to meet the ever increasing demands for the highest quality products by our customers and the marketplace."

News comes that longtime tactical and military equipment retailer US Cavalry which declared bankruptcy in March has been purchased by ERMC Corporation of Chattanooga, TN.

US Cavalry Retail Ownership Announcement

Chattanooga based ERMC Corporation, the parent company of Modern Firearms and ASR Uniforms announced today the acquisition of U. S. Cavalry Stores. ERMC purchased all U. S. Cavalry assets to include personnel, inventory and retail stores. I will be working with others in the company to integrate Modern Firearms, ASR Uniforms and U.S. Cavalry into a top notch provider of Military, Police, Fire and EMS uniforms, equipment and firearms.

Public companies are starting to report their sales and profits for the second quarter. Both ATK and Ruger reported their sales and earnings in the last couple of days.

ATK's business is composed of three segments: aerospace group, defense group, and the sporting group. For me, it is the sporting group of companies that is of the most interest. While the overall sales for ATK were flat for the second quarter of 2013, the sporting group saw a 28.4% increase or $79,346,000. In terms of profit, the sporting group led ATK with a 112.2% increase compared to a single digit increase for the aerospace group and a loss for their defense group. This increase from the sporting group allowed them to beat stock analysts' expectations of profits.

With the purchase of Savage Arms, the sporting group is now more than just ammo, reloading components and equipment, and other firearms related accessories. It appears that the company leadership also recognizes the importance of Savage to their bottom line. ATK's President and CEO Mark DeYoung had this to say about Savage.

"The Company's completion of the Savage acquisition builds upon strong Sporting Group performance and market leadership with a well-respected and recognized brand in the long guns market. We are well underway with the integration of Savage and I am confident our wholesalers, retailers, distributors and consumers will find value in our robust portfolio of product offerings."

 Ruger had another stellar quarter. Their earnings increased 79% for the second quarter when compared to the same quarter a year earlier. The earnings increase was driven by a 50% increase in sales for the quarter compared to a year earlier. Sales for the quarter were $179.5 million and the earnings per share were $1.63 per share. Both of these numbers blew away analysts' expectations. Ruger was forecast to have earned $1.18 per share in profits on sales of $154.7 million.

New product sales accounted for 31% of sales in the quarter. New introductions include both the LC380 and SR45 pistols.

Ruger expects to spend upwards of $35 million on capital expenditures during 2013. Much of that will be related to new products and production capacity expansion. I'm sure part of that money will go to getting the Mayodan plant up and running after the expansion plans are finalized. The company is waiting on the tax incentives and grants package from North Carolina to be completed.

CEO Mike Fifer held a conference call today to discuss the company's second quarter results. Fifer said he expected the third quarter to slow down as things start to return to more normal growth. As reported by CNN Money:

While the trend continued in the second quarter, Ruger CEO Mike Fifer said gun demand appears to be returning to "more normalized growth rates."

"We haven't seen any slowing in demand for Ruger products," Fifer told analysts during a conference call. "But we have heard anecdotally that the normal seasonal slowdown is starting."

He said sales in the current quarter could represent a "reset from the huge surge" that began late last year.

He was also asked about the damage to the Prescott plant. He said he thinks the total cost to Ruger will be less than $5 million in terms of damage to the roof, equipment, and lost production. They resumed production on Monday. The machinery that got soaked was not being used in current production and was intended for future projects.

Fifer was asked about the new Mayodan plant and what was needed to get it ready. He said that with the exception of adding a section for bluing and for heat treating they only needed to move in the new machinery. He was very complimentary towards the workforce in the Rockingham County area. He said the caliber of the potential employees was "really impressive." He said the firearms to be produced in Mayodan would be new introductions so he couldn't discuss what they were yet.

If the overall market demand is starting to slow, I'm going to go out on a limb and say we should expect to see a number of new product introductions from not only Ruger but the rest of the industry. SHOT 2014 should be interesting in that regard.

UPDATE: Steve at The Firearm Blog listened in on the ATK conference call for analysts. He has a review of it here. A couple of points from his review. First, Savage Arms is expected to make ATK around $25-28 million in profits. Second, Steve believes that ATK is in the market to pick up other firearms companies.

Hartford Courant On The AR-15 And CT's Gun Companies

The cover of today's Hartford Courant featured the following headline - "America's Rifle": Factories Boom. Under the title the subtitle read, "As Debate Goes On, State Gun-Makers Cash In On Popular AR-15."

Reporter Dan Haar of the Courant had two stories regarding the AR-15 and the role that Connecticut gun makers have in producing it. Both stories were well-balanced and fair. While the Violence Policy Center and Josh Sugarmann got quoted, so too did the heads of Colt, Stag Arms, and Mossberg.

The first story concentrated on the investments that Connecticut firearms manufacturers have made in upgrading plant and equipment. Combined the companies have spent well over $50 million in upgrading their plants with most of the investment going towards making the AR-15. Given that investment, the head of Mossberg agreed that it would be hard to up and leave the state even if they couldn't sell rifles there. That said, the crap they are getting from their own legislators doesn't give them a warm and cozy feeling.

Echoing other local owners and executives, Bartozzi said Mossberg would never threaten to pick up and leave if Connecticut were to adopt a strict ban. "That is not our style," he said, and besides, he added, it's not only a history the company has in Connecticut but more to the point, a skilled and loyal workforce.

"It is damn hard to move a factory," he said.

On the other hand, Bartozzi said, "To say that Mossberg is not looking at other options would be wrong. ... I'm not feeling a lot of love from many of our legislators. It's getting tiring. It really is getting tiring. ... It takes a lot out of you."

Mossberg, with a factory of similar size in Texas, has had active talks with officials from Southern states trying to drive a wedge between the firm and its home state. All of the firms have similar stories.

 The second story by Haar looked at the history of the AR-15 and its rise in popularity. He did a good job of examining the versatility of the AR as contrasted to its "military cosmetics". The article did an excellent job in looking at the development of the AR-15 by ArmaLite which was an offshoot from Fairchild Engine and Airplane Corp., the role of Colt in licensing the design, and how other companies entered the field.

I don't normally say good things about the mainstream media but in this case, the Hartford Courant and Dan Haar, did an excellent job. Just as importantly, they played it straight and they got their facts right.

More Revenue Than Ford Motor Company

The One Minute MBA studied the business of guns and found that the firearms industry generated $10 billion more revenue that Ford Motor Company. It also employs five times as many people as Google. As Exurban Kev noted at Misfires and Light Strikes, this shows "why Magpul’s potential move out of Colorado matters."




Unless two Democrat state senators change their vote Monday on the final vote on HB 1224, I'm afraid the good people of Colorado are going to find out this out first-hand. Even if the Colorado Republican sweep the Democrats out of office in 2014, Magpul and their jobs will still be gone. Once they move I sincerely doubt that they would ever relocate back to Colorado.

Jobs And Ideology, Part 2

You can add certain legislators in the state of Colorado who care more about their gun prohibitionist ideology than they do about jobs for state residents. As the press release from Magpul makes clear, if Colorado HB 1224 passes, Magpul will have to cease operations in that state effective July 1st. This would eliminate 200 direct jobs and up to another 700 jobs at subcontractors and suppliers.

Factories and machinery can be relocated to other states much more readily nowadays. The Governor's Office of Economic Development in South Dakota which is a mere one state away has a special program to attract companies in the firearms and shooting industry. Likewise, Texas which is also just one state away from Colorado has a strong business climate and a very pro-Second Amendment state government. I'm sure adjoining states like Kansas and especially Wyoming are already preparing packets to send to Magpul if any of these bills pass. Too bad some legislators care more about their misguided ideologies than they do about good paying jobs.

In addition to the national battle to protect our firearms rights, many states are currently engaged in their own fights. Here in CO, a state with a strong heritage of firearm and other personal freedoms, we are facing some extreme challenges to firearms rights. We have been engaged in dialogue with legislators here presenting our arguments to stop legislation from even being introduced, but our efforts did not deter those of extreme views.

After the NRAs visit last week, several anti-freedom bills were introduced by CO legislators, and a very aggressive timeline has been set forth in moving these bills forward.

The bills include:
HB 1229, Background checks for Gun Transfers--a measure to prohibit private sales between CO residents, and instead require a full FFL transfer, including a 4473.

HB 1228, Payment for Background Checks for Gun Transfers-- a measure that would require CO residents to pay for the back logged state-run CBI system (currently taking 3 times the federally mandated wait time for checks to occur) instead of using the free federal NICS checks.

And finally, HB 1224, Prohibiting Large Capacity Ammunition Magazines--a measure that bans the possession, sale, or transfer of magazines over 10 round capacity. The measures and stipulations in this bill would deprive CO residents of the value of their private property by prohibiting the sale or transfer of all magazines over 10 rounds. This bill would also prohibit manufacture of magazines greater than 10 rounds for commercial sale out of the state, and place restrictions on the manufacture of military and law enforcement magazines that would cripple production.

We'd like to ask all CO residents to please contact your state legislators and the members of the Judiciary Committee and urge them to kill these measures in committee, and to vote NO if they reach the floor.

We also ask you to show your support for the 2nd Amendment at the Capitol on Tuesday, Feb 12, for the magazine ban committee hearing and Wednesday, Feb 13, for the hearing on the other measures.

Due to the highly restrictive language in HB 1224, if passed, and we remained here, this measure would require us to cease PMAG production on July 1, 2013.

In short, Magpul would be unable to remain in business as a CO company, and the over 200 jobs for direct employees and nearly 700 jobs at our subcontractors and suppliers would pick up and leave CO. Due to the structure of our operations, this would be entirely possible, hopefully without significant disruption to production.

The legislators drafting these measures do so in spite of the fact that nothing they are proposing will do anything to even marginally improve public safety in CO, and in fact, will leave law-abiding CO residents less able to defend themselves, strip away rights and property from residents who have done nothing wrong, and send nearly 1000 jobs and millions in tax revenue out of the state.

We like CO, we want to continue to operate in CO, but most of all, we want CO to remain FREE.

Please help us in this fight, and let your voices be heard!

We have included the contact information for the House Judiciary committee for your convenience:

House Judiciary Committee
Rep. Daniel Kagan, Chair: 303-866-2921, repkagan@gmail.com
Rep. Pete Lee, Vice Chair: 303-866-2932, pete.lee.house@state.co.us
Rep. John Buckner: 303-866-2944, john.buckner.house@state.co.us
Rep. Lois Court: 303-866-2967, lois.court.house@state.co.us
Rep. Bob Gardner, 303-866-2191, bob.gardner.house@state.co.us
Rep. Polly Lawrence, 303-866-2935, polly.lawrence.house@state.co.us

They Ditch The Firearms Registry And Now This

First the Canadian government ditches the firearms registry and now you have Canadian pension plans buying US firearms accessories manufacturers.

The Ontario Teachers' Pension Plan just bought Plano Molding Company of Plano, Illinois. Plano makes everything from tackle boxes to cosmetics cases with a large line of gun cases in the middle. I know about those gun cases because I have a number of them.

From the press release by OTPP:

TORONTO (November 28, 2012) – Ontario Teachers’ Pension Plan (Teachers’) today announced an agreement for the acquisition of Plano Molding Company, Inc. (Plano), the premier supplier of outdoor sports storage systems.

Based in Plano, Illinois, and founded in 1932, Plano is recognized as the leading brand in fishing and fall sports markets where it enjoys dominant market shares in tackle boxes, bait storage, gun cases, archery cases, and ice fishing products. It also produces cases for cosmetics, tools and crafts, as well as storage containers and shelving for home and office.

Teachers’ is making the acquisition through its private equity investment division, Teachers’ Private Capital (TPC). Terms of the transaction are not being disclosed.

“Plano has exceptionally strong brands and product categories supported by attractive market characteristics. It also benefits from its long-standing relationships with top North American retailers,” said Jane Rowe, Senior Vice-President of TPC. “Plano’s proven management team has a record of solid organic growth and has strongly positioned the company to benefit from acquisition opportunities. We look forward to supporting their success.”

“The Plano management team and I are extremely excited to be partnering with Teachers’,” stated Tom Hurt, the Company’s President and CEO. “Together we look forward to growing Plano’s heritage brands to their full potential and continuing our dedication to exceeding our customer expectations in product innovation, market leadership and world-class customer service. An exciting new journey has just begun for Plano, our valued associates and the many market leading brands under our umbrella. The Teachers’ partnership in Plano promises to yield more exciting opportunities than ever before.”

H/T The Outdoor Wire

"We're Doing Really Well" - Mike Fifer, Ruger CEO

Sturm, Ruger and Co., Inc. will be featured in the November 5th edition of Forbes Magazine. That issue will feature Forbes' Best Small Companies in America list and Ruger is number four on the list.

Intimacy with the product–and the customer–has been key to Ruger’s turnaround. That, plus embracing industry trends like compact guns and military-style weaponry, has vaulted the company to the No. 4 spot on our list of the Best Small Companies in America. Since Fifer took over in late 2006 Ruger’s share price has jumped sixfold to a recent $49. Over the last 12 months it has netted $55 million on $406 million in revenue; half a dozen years ago it barely managed $1 million on $168 million in sales.

Read the whole article. It is a good read and doesn't indulge in anti-gun hysteria. It did elicit this absurd comment from a reader named "Greg".

 The business of murder machinery can be highly profitable.
A good sin stock.

Sure, Greg, whatever. Nonetheless, I'm glad to see that Ruger has rebounded from the Bill Ruger, Sr. days and has adopted new ideas, new manufacturing techniques, and ditched the limited capacity magazine nonsense. As a shareholder, I'm doubly glad.






H/T Lars at NRA Blog

2011 - A Mixed Bag For Firearms Production

The Bureau of Alcohol, Tobacco, Firearms and Explosives released their 2011 interim Annual Firearms Manufacturing and Export Report on Tuesday of this past week. These summary statistics provide a view of the trends in the firearms industry over the past year and especially when compared to the prior year's report. The table below shows both the absolute and relative changes by category in firearms production in 2011 from the prior year.

If 2010 was the Year of the .380, 2011 certainly was not. Production of .380 pistols fell by 128,449 or 19.3%. It appears that demand for small pistols has shifted from the .380 to the micro-nines such as the Ruger LC9, the Kimber Solo, the Beretta Nano, and the Kahr family of small pistols. In their letter to shareholders for the first quarter of 2011, Ruger attributed new introductions such as the LC9 (and the Gunsite Scout rifle) for 29% of the quarter's sales.

There was significant growth in the medium and larger pistol calibers with 9mm production growing by 33.3% and the greater than 9mm calibers growing by 32.9%. With the way the ATF compiles manufacturing statistics, it is impossible to break out production of the .40 S&W from the .45 ACP. I did suggest last year that I expected to see an increase in this category as 2011 was the centennial of the 1911. While the 1911 did garner a lot of attention in 2011, I just don't think the amount of growth in the category can be attributed to that alone. I do think that a good deal of the growth in these categories can be traced to what Michael Bane calls Gun Culture v. 2.0. That is, That is, those who have come to guns not through growing up in a hunting family - Gun Culture 1.0 - but as a result of the concealed carry movement.

Change in Firearms Production From 2010  to 2011
Pistols			Revolvers
To .22	3,162	0.84%	To. .22	22,196	16.8%
To .25	-2,555	-11.76%	To .32	-3,423	-39.8%
To .32	-25,903	-65.1%	To .357 Mag	-1,288	-1.01%
To .380	-128,449	-19.3%	To .38 Spec.	-3,371	-1.6%
To 9mm	209,872	33.3%	To .44 Mag	-9,588	-21.1%
To .50	173,209	32.9%	To .50	10,551	29.2%
Total Pistol	229,336	10.15%	Total Revolver	25,880	2.48%
Total Rifles	462,691	25.27%
Total Shotguns	118,915	16.0%
Total Misc. Firearms	114,801	169.0%

While overall production of revolvers was up 2.48%, production fell in all categories except the very smallest and the very largest. The detailed report which shows production figures in each category by manufacturer are not yet available. Thus, I can't say the 29.2% increase in revolver production in calibers larger than .44 Magnum is only due to increased production of the Taurus Judge and S&W Governor as opposed to a large growth in the number of Single Action Army revolvers in .45 Colt. Nonetheless, it is a reasonable assumption given the marketing campaigns for both the Judge and the Governor by their respective manufacturers.

I think we can safely say the market for long guns has rebounded. After experiencing a significant decline last year, production of both rifles and shotguns grew by double digit percentages for 2011. Even more importantly, both categories saw more shotguns and rifles produced in 2011 than in the banner year of 2009. I anticipate that rifle production in 2012 will be even greater given the continuing unease that gun owners and would-be gun owners feel about President Obama and potential gun control measures his administration might enact in a second term.

One final category of note is what the ATF calls miscellaneous firearms. They define this category as consisting of items that don't fall into the normal firearms classifications of handgun or long gun. Included within it are silencers. As the American Silencer Association pointed out last month, applications for the NFA tax stamp for silencers are growing by leaps and bounds. That would be consistent with the 169% growth in production in this category.

This last year was a good year for the firearms industry. If the continuing year-over-year growth in NICS checks is any indication - and I think it is - 2012 will be an even better year for the firearms industry.

CORRECTION: In my original chart, I compared the Interim 2011 numbers with the Interim 2010 numbers. I have corrected the 2010 numbers to reflect the final report for that year. It does not change the trends but it does change some of the percentages. I have corrected them within the original post.

Colt Expands To Florida

Given the relatively hostile climate for gunmakers in Massachusetts and Connecticut, I think it should come as no surprise that Colt's Manufacturing Company - the civilian side of Colt - announced yesterday that it is setting up a regional headquarters and production facility in Florida. According to the announcement from Florida Gov. Rick Scott's office, Colt is making a $2.5 million capital investment in a building owned by Osceola County. They expect to have a staff of 63 that will begin phasing in during 2012.

I don't have a crystal ball but I think this is only the first of many expansions by firearms makers outside of their traditional "Gun Valley" home. I think the moves will be made for two major reasons: a more favorable  (and gun friendly) business climate in the new location and lower personnel costs due to non-unionized workforces. It was only last year that Olin Corporation's Winchester Division began moving most of its center-fire ammunition production from East Alton, IL to Oxford, Mississippi. That move was done for both those reasons.

I would also keep my eye on announcements out of the state of South Dakota. They have an industrial development project run out of the governor's office that is targeting firearms manufacturers and others in the gun industry. They promote their gun-friendly attitude as an attraction for businesses in the industry.

The full announcement for the office of Gov. Rick Scott (R-FL) is below:

12/1/2011 Osceola County, Fla. – Today, Colt’s Manufacturing Co. LLC announced its commitment to create 63 jobs in Osceola County for its new regional headquarters and product manufacturing center. The center will hire people for engineering and manufacturing jobs, among others. In 2012, Colt is projected to begin phasing in the first of 63 jobs paying an average salary of $45,060 to be created during the following three years. Governor Rick Scott and Colt’s Manufacturing Company President and CEO Lieutenant General M. William Keys USMC (Ret.) were joined by the Osceola County Board of County Commissioners for the announcement.

“As a supporter of new job creation and the Second Amendment, this announcement sends the clear message that Florida is both open for business and a defender of our right to bear arms,” Florida Governor Rick Scott said. “My primary responsibility as governor is to be our state’s chief advocate for job creation. My personal involvement in bringing Colt to Florida demonstrates my administration’s deep commitment to rebuilding our economy.”

Colt is making a $2.5 million capital investment in a vacant building, which the company will lease, that is owned by Osceola County. Governor Scott and his economic development team at Enterprise Florida Inc. and the Osceola County Economic Development Department worked with Colt to bring this project to fruition. State incentives include $250,000 from the Governor’s Quick Action Closing Fund and funds for workforce training. Osceola County is offering additional incentives, including renovation of the building and rent concessions.

“Colt looked at many possible sites across the nation, but we ultimately decided to locate our new facility in the State of Florida,” Gen. Keys said. “Florida offered a strong pro-business incentive package. Coupled with the low cost of doing business in Florida and a favorable regulatory environment, opening this new facility was very attractive to us. Governor Scott’s personal commitment to both Colt’s growth plan and America’s right to bear arms was instrumental in our decision.”
“Attracting an American icon like Colt, which is one of the world’s top brands, is a real coup for our economic development efforts,” said Commission Chairman John Quiñones. “Beyond creating new, high-wage jobs, Colt is going to be a great asset to our community.”
“Colt’s expansion to Osceola County is a perfect fit for the region,” said Dr. Sanford Shugart, president of Valencia College, which will design a specialized training program for the company. “Valencia College stands ready to deliver the best trained, best educated workforce possible. We welcome Colt’s Manufacturing Company to Osceola County and commit to partnering with them and serving their employees and families for many years to come.”

Osceola County is located southeast of Orlando and just due west of Cape Canaveral.

Thirteen Is A Lucky Number

The National Shooting Sports Foundation is reporting that their adjusted NICS check figures show the 13th straight month-over-month increase in the NSSF adjusted NICS figures.

The June 2011 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 679,840 is an increase of 12.8 percent over the NSSF-adjusted NICS figure of 602,908 in June 2010. For comparison, the unadjusted June 2011 NICS figure of 1,157,714 is an increase of 16 percent over the unadjusted NICS figure of 998,262 in June 2010.

The figures are adjusted to drop out those checks which can be attributed to CCW background checks as used by states such as Utah, Kentucky, and Iowa among other things.

The NSSF graphic below shows the pattern in adjusted NICS checks for the month of June for the past 10 years. This past June was a definite improvement over the prior two years and is the high watermark for the past ten Junes.

2010 - The Year Of The .380

The Bureau of Alcohol, Tobacco, Firearms and Explosives released their 2010 interim Annual Firearms Manufacturing and Export Report on Thursday of this past week. These summary statistics provide a clear view of the trends in the firearms industry over the past year and especially when compared to the prior year's report. The table below shows both the absolute and relative changes by category in firearms production in 2010 from the prior year.

Production of rifles in all calibers dropped by over 650,000 rifles or a drop of 28.4% when compared to the previous year. By contrast, total pistol production was up by 19.25% for a total of 2,227,871 pistols manufactured in 2010. Revolvers are in a separate category from pistols. Production for that category was flat with an insignificant drop from the prior year. Shotgun production was also flat with 1.2% drop in the number produced in 2010 as compared to 2009.

The production figures by manufacturer within each category are not yet available. Thus, I can't say for sure that the drop in rifle production is due to the bubble bursting for AR-15's but I think that is a reasonable supposition. With the fear of a new Assault Weapons Ban that began with the inauguration of Barack Obama fading, the market for "modern sporting rifles" or "sport utility rifles" is returning to normal.

Change in Firearms Production From 2009  to 2010
Pistols			Revolvers
To .22	52,013	16.2%	To. .22	-11,870	-8.4%
To .25	6,322	42.0%	To .32	874	11.5%
To .32	-7,619	-.16.1%	To .357 Mag	18,684	17.3%
To .380	274,613	70.2%	To .38 Spec.	-22,783	-.9.8%
To 9mm	43,631	7.44%	To .44 Mag	13,652	45.6%
To .50	-9,347	-1.8%	To .50	1,166	4.2%
Total Pistol	359,613	19.25%	Total Revolver	-277	-.05%
Total Rifles	-659,693	-28.4%
Total Shotguns	-9,337	-1.2%

While the market for rifles has dropped, the same can't be said about pistols. That market had an over 19.25% growth in production in 2010. If 2009 was the Year of the AR, then 2010 was the Year of the .380. Production in that category of pistol grew by 70.2% or 274,613 units. The growth in the production of .380 pistols accounted for three-quarters of the total growth for pistols in 2010. If one listened to the stories from last year, you knew that .380 ammo was hard to find. These production figures, while not sales figures, definitely point to the increase in demand for these small pistols.

9mm pistol production also grew in 2010 while the larger pistol calibers - .40 S&W and .45 ACP - contracted just a bit. I imagine that the 2011 numbers will show a growth in that category with 2011 being the centennial year of the Browning-designed 1911.

I think a strong argument can be made that the growth in .380 pistols has come from the concealed carry movement. The Ruger LCP, the Kahr P380, the Sig P238, and the Kel-Tec P-3AT are all easily concealed and have been readily adopted by those who want a small pistol that fits in the pocket. It will be interesting to see the complete production numbers by manufacturer when they are released by BATFE.

In conclusion, while 2010 was a down year for the firearms market overall - 5,107,309 units in 2010 versus 5,417,003 units in 2009 - certain segments grew very strongly. While the Violence Policy Center and other gun prohibitionists will try to spin this as a negative overall for the firearms industry, it really isn't. It merely illustrates that firearms production has peaks and valleys in demand by segment just like any other industry. I think most industries in America would have been very happy to only have had a 5.7% drop in production for 2010 when compared to the prior year.