The Economic Impact Of The US Firearms And Ammo Industry

The National Shooting Sports Foundation, the real gun lobby, released a report last week that detailed the economic impact of the firearms and ammunition industry in the United States. It is a lot bigger than the gun prohibitionists would have you believe and it is indicative of why it is considered an essential industry.

Since 2008, the economic impact has grown 213% to $60 billion as of 2019. Just as importantly, the number of full time job equivalents has doubled from 166,000 to 332,000.

More details on the economic impact from the NSSF report:

On a year-over-year basis, the industry’s economic impact rose from $52 (billion) in 2018 to $60 billion. Total jobs increased by 20,000 in the same period, from nearly 312,000 to over 332,000. The broader impact of the industry flows throughout the economy and supports and generates business for firms seemingly unrelated to firearms at a time when every job in America counts. These are real people, with real jobs, working in industries as varied as banking, retail, accounting, metalworking and printing, among others.

The firearm and ammunition industry paid over $6.74 billion in business taxes, including property, income and sales-based levies.

“Our industry continues to show the steady and reliable growth that is a hallmark of a healthy industry,” said Joe Bartozzi, NSSF President and CEO. “The workers who comprise our ranks are the fabric of our communities. They produce the highest quality firearms and ammunition that millions of law-abiding Americans rely upon to exercise their fundamental right to keep and bear arms and safely enjoy the recreational shooting sports. This growth translates to more jobs that add to our local economies, averaging $55,200 in wages and benefits. In addition, since 2008 we increased federal tax payments by 162 percent, Pittman-Robertson excise taxes that support wildlife conservation by 79 percent and state business taxes by 116 percent.”

The full report is here.

The NSSF has also provided an interactive map of the United States which allows you to see the number of jobs, wages, and economic output created on a state by state basis. It appears that Joe Biden’s Delaware has the fewest number of jobs in the industry while Hawaii had the smallest economic impact from the firearms and ammunition industry.

COVID-19, Supply Chains, and Firearms Manufacturers

I received an email yesterday afternoon from Kimber. It was detailing the impact of COVID-19 on their operations. Kimber has plants in both Yonkers, New York and Troy, Alabama. If you have spent any time watching the talking heads on TV, you know that New York has overtaken Washington State in the number of coronavirus cases.

Here is part of what was in the email:

Due to the New York state decision to shutter non-essential businesses as part of the COVID-19 response plan, Kimber Mfg. Inc. has stopped production at its New York facilities. 

Production continues at Kimber’s new, state-of-the-art Troy, Alabama manufacturing facility, with the entire line of handguns and long guns being assembled. Due to the large number of parts manufactured in Yonkers and the state mandated closure in New York, the Troy facility will suspend production on March 31st . “This situation is unfortunate as we were off to an incredible start in gun shipments in 2020 and were running our factories seven days a week. We would like to thank our dealers and consumers for their overwhelmingly positive response to our 2020 new products,” said Greg Grogan, Kimber president. With that said, if you are in the market for a Kimber firearm, now is the time to make that purchase.”

Kimber’s Alabama based customer service and repair services remain open to help customers with any questions they may have. In addition, the Alabama based Kimber online store is open and products are shipping as long as inventory lasts. Montana based dealer sales and customer service departments also remain open.

The bottom line is that even though your assembly plant is in an area which only has a relatively small number of coronavirus cases, you are still impacted adversely. Alabama has 531 cases as of today versus New York State with 39,140 cases according to the Johns Hopkins University compilation. Indeed, Westchester County, NY where Yonkers is located has over 10 times as many infections as the entire state of Alabama.

Then there is the whole issue of essential versus non-essential businesses. Some states have said firearms manufacturing would be considered an essential business because it provides tools to the defense industry or to law enforcement. Other states do not consider it essential. Even if you are in a state that considers your production essential, if your subcontractor making critical parts is located in a place that takes the opposite view, you are screwed.

The firearms industry is composed of primarily small businesses. Even the largest companies like Ruger and Smith & Wesson are considered small by comparison to other manufacturers. While the products are flying out the doors now, a mid to long period of enforced closure due to the pandemic is going to hurt.

Firearms Industry – Closures and Acquisitions

Just like the rest of American industry, there are changes going on in the firearms industry.

It was announced late last week that the Montana Rifle Company would be closing its doors immediately. They made some very nice higher end bolt action hunting rifles. They had been bought in early 2019 by the Montana Outdoor Group.

From their release on the closure:

“While sales of our popular calibers have been outstanding, production levels have not risen to a profitable level to continue, without additional investments,” CEO Calvin Bontrager explained. “New equipment would be required to reach a service level demanded by our dealers and conservation groups.”


Montana Rifle has been producing custom-grade rifles for nearly 25-years and has been awarded “NRA’s Gun of the Year” in 2016 and “NRA’s Gun of the Year” in 2018. Montana Rifle has also produced limited editions for California Waterfowl, SCI, RMEF, and many other conservation organizations.


“With sales of the popular M1999 control feed actions nearly doubling in 2019, Montana Outdoor Group, is actively searching for restructuring opportunities,” Bontrager continued.

The temporary closures related to COVID-19 are also impacting manufacturing side of the firearms industry.

CZ-USA sent out a message today that production and shipment delays would be the rule for the next 30 days at least. This is due to local and state orders limiting activities which has caused them to close.

CZ-USA operations are subject to an Emergency Order from our local government which forces us to close our facilities in Kansas City, Kansas until at least April 23rd. Likewise, our Dan Wesson Firearms facility in Norwich, NY was closed under similar circumstances late last week due to an order from the state of New York.  


For the next 30 days, production and shipment delays are inevitable. We apologize for the inconvenience we know this will cause — we hold our nation’s Second Amendment rights to be sacred and are very concerned about the impact that emergency orders will have on our customers. We will work diligently to deliver products as soon as legally possible, while maintaining social responsibility and compliance with government orders.

Finally, EOTech has been purchased from L3Harris by American Holoptics LLC.

American Holoptics LLC™, a privately-held U.S. company, has signed a definitive agreement with L3Harris™ to acquire EOTech®.The transaction is expected to close mid-2020 and is conditioned on customary closing conditions. American Holoptics is a subsidiary of Koucar Management, whose strategic acquisitions of Elite Defense® and HEL Technologies™ represent a solid foundation of cutting-edge optical science and weapons systems distribution. The American Holoptics leadership team has an exceptionally broad and deep experience providing high-quality products to the global weapons accessory market. In addition, this team has a proven track record of building customer-first and technology-focused organizations. “We’re proud to sign this agreement to join our team and technology with the EOTech brand,” says Matt Van Haaren, CEO of American Holoptics. “EOTech brings together technologically advanced product lines and production capabilities that will integrate well with our existing business and strategically expand our product portfolio. Together we will deliver an all-new level of service, innovation, and integrity to military, law enforcement and civilian users around the world.” 

Koucar Management is a privately held Michigan-based company that owns companies in a variety of industries including construction, property management, hotels, software, and technology. In the firearms and defense industry realm, they own Elite Defense, American Holoptics, and HEL Technologies. They also own companies like Detroit Taco Company and Cambria Hotels.

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 28th, 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.