Discussion in 'General Gun Discussions' started by hso, Aug 5, 2022.
I suspect we will see this across the industry.
If that is for the good or not remains to be seen.
Most citizens, indeed most voters, have a very short memory.
On the other side of the coin....
What did your debt ratio do after you grabbed Marlin and Remington? Did that desire to destroy your competitor hurt your bottom line, a very common story.
Wake me up when ammo is cheap and plentiful again.
Mr. Killoy made the following observations related to the Company’s second quarter 2022 performance:
· The estimated unit sell-through of the Company’s products from the independent distributors to retailers decreased 31% in the first half of 2022 compared to the prior year period. For the same period, the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) decreased 17%. These decreases are attributable to decreased consumer demand for firearms from the unprecedented levels of the surge that began in 2020 and remained for most of 2021. The second quarter of 2021 had the highest quarterly distributor unit sell-through in the Company’s history, which led to the significant year-over-year decrease in distributor sell-through in the current quarter.
· Sales of new products, including the PC Charger, the MAX-9 pistol, the LCP MAX pistol, and Marlin 1895 lever-action rifles, represented $33.8 million or 11% of firearm sales in the first half of 2022. New product sales include only major new products that were introduced in the past two years. Several popular firearms that were considered new products in 2021, including the Wrangler revolver, the Ruger-5.7 pistol, and the LCP II in .22 LR pistol, have now been in production for over two years and are no longer included in new product sales for the first half of 2022.
· Our profitability declined in the second quarter of 2022 from the second quarter of 2021 as our gross margin decreased from 39% to 31%. In addition to unfavorable deleveraging of fixed costs resulting from decreased production and sales, inflationary cost increases in materials, commodities, services, energy, fuel and transportation, partially offset by increased pricing, resulted in the lower margin.
· During the second quarter of 2022, the Company’s finished goods inventory and distributor inventories of the Company’s products increased 49,300 units and 28,200 units, respectively.
Industry wide trend. Not just Ruger. Year over year comparisons of sales shake out seasonal variations but don't account for anomalies like:
unprecedented levels of the surge that began in 2020 and remained for most of 2021. The second quarter of 2021 had the highest quarterly distributor unit sell-through in the Company’s history, which led to the significant year-over-year decrease in distributor sell-through in the current quarter.
As a matter of personal investment style I prefer much larger size firms that have major structural advantages against competition but have temporarily fallen hard in stock price due to factors that will go away in the long term.
But keeping this on Ruger as a gun forum subject, I think they have accelerated a move toward cheaper and faster, but not necessarily better, just good enough with upgraded features. They produce extremely popular handguns at low prices with excellent customer service responsiveness. Initial quality could be better, as with the case of my LCP MAX which works - but the finish across three (3!) slides/barrels show rust brand new and I cannot get rid of it. This to me is a reduction in quality. But you do get a lot of value for the money even so.
Comparing my 2009 LCP gen 1 (which in all fairness had it's slide replaced due to extraction issues early on) never showed rust, ever. It cost about 350 in 2009 money. I paid the same in 2022 for the LCP MAX, and got dovetailed sights with a tritium front, 10+1, superior trigger, much better extractor, much better serrations rear and front, better grip. So you get more today than you did back then. But still I'd have paid more for a version with a nitrided slide to guarantee a rust free experience, or maybe stainless.
As for the revolver line, I find it much better, they work and don't have rust problems.
Remington destroyed itself.
Yep, I'm going through the rusty LCP Max frustrations right now... Just got a brand new 2022 LCP Max, which looked perfect on the outside. I got my hopes up, until I checked the bore. It was a rusty mess, with very deep and severe pitting running all down the length of the bore! Whatever battery acid they are trying to use as a preservative oil REALLY needs to be updated, it's downright idiotic that a brand new 2022 made gun is already a rusty mess!
Their customer service is good though, they are sending me a brand new barrel and slide to swap out. I will then send the old one back. I just hope the replacement they send me isn't the same situation, or even worse!
Also, with inflation what it is, food prices up 10-20%, gas doubling in one year, people have less disposable income to spend on non essentials like firearms.
Wrong an investment company destroyed Remington.
You could not be more wrong if you tried.
Rip Van Winkle probably slept less than you will. With the outrageous commodity prices and never-ending want for 9mm ammo I think the general ammo prices won’t drop much mote than they have.
Variety should improve, but pricing really won’t.
(I do hope I am wrong…)
OK. I'll buy that. But what did Ruger do other than buy something that was for sale?
Remington put itself in a debt position where Cerebus could waltz in and take over like the corporate raiders they are. Strong companies can fight it off, Big Green couldn’t.
These pirates care zero about brand or legacies, only about the Benjamins. “Bleed them dry and kick them to the curb” should be their motto.
Like every previous time a hostile takeover occurs by a money fund rather than some entity that actually knows what it is doing, it was all she wrote. Once harpooned, Remington flopped on the line for a while, but like so many others they were boiled down for oil and tossed over the side.
Maybe the manufacturers will actually get back to making quality products that fill-out their entire catalog.
That IS the way hoarding/collecting starts, lol. I only need one more...
IMHO they have to have good customer service, they crank out brand new 2022 that looks like it was left in a river for weeks. And people keep going back to them because.....why....oh their customer service is good.
Ok, if the product was good you would not need customer service to start with.
Name a company without debt.....oh you mean like General Motors...too big to fail kind of thing.....they did nothing wrong.
That does not say that mistakes got made, sure it happens everywhere. You don't have to look very far in the gun world to see companies a shadow of their former self, great names like Colt and Winchester are ghosts of once great companies.
My reference to Ruger in buying Remington, is that it could have been a bit much. It is not uncommon for a company to see an area and go....lets branch out that way.....or another company in your same business and go....hay if we buy them we have X more market share. Usually this comes in with more debt, and payments on that debt can be a bit rough, toss in a down turn and it gets real hard to make those payments....and you are looking at Chap 11.
There is a guy on youtube called Company Man, and he does a pretty good job at going over a quick look at different companies rise fall rise again. Many falls are pretty easy to see in 20-20 hindsight. Sears is a good video....many good decisions, Discover Card, many bad decisions, Rolex at sears?
What I am wondering is what did the buying of remington do to the cash flow at ruger, could they really swing it....or did they just look at last years "panic" and go see sales are going crazy we can afford to buy this.....only if that rate of sales stays with you.
You are so correct that if you see an investment company buy something you know it is going to die, it is what they do. I hold out hopes for Ruger (even if I am not a fan of any of their products) and its plans for remington, and Marlin for that matter, I hope they see products like the lever guns, and the 700 action being something that can still be made under a Ruger Banner. Some things I think are gone forever like the Model 60. But hope the ammo and a few models that do not take sales from existing Ruger products come back....from the looks of the lever rifles it looks like they might. I would love to see Marlin give henry a run for their money, I really think they could if they wanted to.
I hope I covered your question in my last post.
I don't fault ruger for buying them, I fault ruger for making things "just good enough to pass" They should be held to a higher standard.....I do hold them to that, guess that is why I only own one ruger product. I don't want to play the Ruger lotto and hope I get a new one out of the box that is not rusty.
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