Have you ever wondered what happened to the company that manufactures the Bushmaster rifle, the gun of choice for Adam Lanza? Freedom Group Company, also known as the Remington Outdoor Company, owned by Cerberus Capital Management, is the company that manufactures the Bushmaster XM–15 assault rifle that killed 26 teachers and students in Newtown Connecticut last year. For those of you that aren't aware, Cerberus is one of the world's largest private investment companies, founded in 1992 and headquartered in New York City.
Freedom Group states the following is its mission statement:
“Freedom Group develops, manufactures and markets innovative firearms, ammunition and related products of the highest quality for demanding applications in the commercial, law enforcement and defense markets around the world. Our value-added solutions result from a thorough understanding of our customers' needs and aspirations and our relentless pursuit of innovation, quality and continuous improvement in every aspect of our business.”
Freedom group claims to be the world’s leading innovator, designer, manufacturer and marketer of firearms and ammunition and owns the Remington, Bushmaster, Marlin Firearms and Dakota brands. Bushmaster was among the first firearms manufacturers to supply supply the civilian population with military "look alikes". Cerberus acquired Bushmaster in April 2006 for $76 million. In 2007, Ceberus founded the Freedom Group and acquired Remington for $370 million. The Freedom Group then acquired Marlin Firearms, Dakota Arms, Barnes Bullets which manufactures copper-jacketed bullets and Advanced Armament Corporation which manufactures silencers, making it a fully integrated firearms manufacturing company.
In it’s third-quarter 2013 Quarterly Report, Freedom Group reported sales of $1.02 billion for the nine months ending September 29, 2013, up from $677 million the year before. That’s a very substantial increase in sales of 50.7 percent. Net income rose to $94.2 million in the first three quarters of 2013, up from a rather paltry $300,000 in the first nine months of 2012.
In the company's guidance for the fourth quarter of 2013, they are projecting that that total annual sales for 2013 will be in the range of $1.25 billion to $1.275 billion compared to net sales of $931.9 million for the year ended December 31st 2012. That's an increase in sales of 35.2 percent on a year-over-year basis. Earnings before income tax depreciation and amortization (EBITDA) are expected to be in the range of $235 million to $240 million for all of 2013 compared to only $156.5 million the year before. That's an earnings increase of 51.8 percent on a year-over-year basis.
As an aside, let's look at the lobbying efforts by Freedom Group since 2006:
So far in 2013, Freedom Group has spent $215,000 on lobbying, down from a peak of $400,000 in 2010.
After the Sandy Hook tragedy, fear rose among the pro-gun population in the United States with many people feeling that there was a possibility that gun sales maybe restricted in the future. As such, there has been a rather dramatic spike in gun sales over the past year. Here is a chart from the FBI showing the top 10 days and weeks for firearms background checks going all the way back to 1998:
You'll notice that in the top 10 highest days, all but one occurred after the shooting at Sandy Hook and in the top 10 weeks all but one occurred after the Sandy Hook shooting, with most of them occurring in 2013. It is also interesting to see that the among the top ten days, seven occurred within eight days of the shooting.
Here's a chart showing the number of NICS background checks done for every year since 1998:
With December's data still missing, it certainly appears that 2013 will be a record year for the number of firearms background checks completed, coming in at around 21 million checks being completed, up from 19.59 million in 2012 and 16.45 million in 2011. This is an increase of 7.1 percent on a year-over-year-basis from 2012 and an increase of 27.7 percent from 2010. These resulting probable purchases of firearms likely lead to increased bottom lines for companies like Freedom Group.
Four days after the killings in Connecticut, Cerberus announced that it would dispose of its interest in Freedom Group under pressure from the California State Teachers' Retirement System, a major investor in Cerberus and a significant owner of Freedom Group. Initially, Freedom Group was valued at about $1 billion but because of it's politically sensitive nature many potential buyers over the past year has been wary of making a purchase. Accordingly, Cerberus will offer some investors in its funds an opportunity to sell their interest in Freedom Group without actually selling its own interest in this arrangement.
It is interesting to see the repercussions of the December 2012 shooting in rural Connecticut. Who would have guessed that the sales of firearms would have led to a very significant increase to the bottom line of one of America's largest firearms manufacturers?
Let us propose a more accurate title to this article.ReplyDelete
"Spike in gun sales due to rampant anti-gun efforts using the faces of slain children by anti-gun groups"
Rampant!? How about totally non-effective.Delete
Those are not mutually exclusive terms.Delete
How about this title:ReplyDelete
"Gun Manufacturers Welcome Newtown Sales Pitch."
The gun did NOT kill anyone it was the madman that used it. Don't use the media's lexicon and say the gun killed it's always the people using the tool.ReplyDelete