Ad Denied By Facebook Because Of…Well Not Really Guns

Facebook has a policy of denying to carry ads that promote the sale of firearms. They are in the private sector and that is their option. However, sometimes their algorithms used are lacking.

A case in point is my friend Professor David Yamane who publishes the Gun Culture 2.0 blog. He had an ad denied by Facebook’s faceless minions because they thought it promoted the sale of firearms and other weapons. He was advertising a link to his report on the USCCA’s recent Concealed Carry Fashion Show held in conjunction with their expo in Atlanta. They had previously accepted an advertisement for his blog that was titled, “Bushmaster is the Worst Marketer in the History of Guns.” David said, with his tongue firmly in his cheek, that Bushmaster was bad at advertising since so few of its firearms (or any AR-15) were used in homicides.

This is ridiculous. Just like his series of posts on the gun industry which highlighted the fact that the gun industry isn’t just the Rugers and Smith & Wessons, this post doesn’t promote the sale of any product.

Mark Zuckerberg plans a series of meetings with conservatives. Perhaps he needs to go to the next USCCA Expo in Ft. Worth or this weekend’s NRA Annual Meeting to see that the gun industry isn’t just guns.

Gun Industry News – 2

Continuing to talk about the gun industry, and more specifically the ammunition component of it, Orbital ATK announced a big order today.

Orbital ATK, Inc. (OA) (NYSE (NYX): OA), a global leader in aerospace and defense technologies, announced today that it has received orders totaling $210 million to produce small caliber ammunition for the U.S. Army. Orders were placed for .50 caliber, 5.56mm and 7.62mm ammunition under Orbital ATK’s supply contract to produce a variety of small caliber ammunition for the U.S. government at the Lake City Army Ammunition Plant (Lake City) in Independence, Missouri.

Orbital ATK was formed from the merger of ATK and Orbital Sciences in February 2015. At the same time, the consumer firearms, consumer ammunition, and sporting businesses were spun off into Vista Outdoors.

The Orbital ATK Annual Meeting will be held tomorrow. They have released this presentation which goes over what will be presented at the Annual Meeting.

Gun Industry News – 1

We are going into what stock analysts call earnings season. This is when public companies announce their earnings for the quarter and either meet or surpass expectations or fail to meet the projections of analysts.

Olin Corporation announced their earnings yesterday. In addition to their chlor alkali and other chemical businesses, Olin owns Winchester ammunition. Olin lost $37.9 million or 23 cents per share mostly due to restructuring costs for their chlor alkali business. This loss was considered an $80 million miss on expectations.

However, for what concerns us, the Winchester division had improved results.

Winchester sales for the first quarter 2016 were $183.7 million compared to $156.7 million in the seasonally weaker fourth quarter 2015, with growth driven primarily by increased shipments to commercial customers. First quarter 2016 segment earnings were $28.7 million compared to $21.8 million in the fourth quarter 2015. The increase in segment earnings reflects higher commercial shipments and lower commodity and material costs. Winchester first quarter 2016 results included depreciation and amortization expense of $4.6 million compared to $4.9 million in fourth quarter 2015.

Olin stock closed up 33 cents for the day with a final closing price of $22.17. This is up about $10 from the low earlier this year.

Olin had their earnings call with stock analysts today. You can see their Powerpoint presentation here. President and CEO John Fischer had this to say about their Winchester division:

I’d like now to turn to the performance of our Winchester segment, which we summarize on slide eight. Winchester sales in the first quarter were $183.7 million, a 17.2% increase over the seasonally weaker fourth quarter of 2015. This growth was driven primarily by increased shipments to commercial customers. We’ve seen improvement in commercial demand in selected handgun calibers and steady strength in rimfire demand.

First quarter 2016 adjusted EBITDA was $33.3 million, a 24.7% increase over the fourth quarter of 2015. The improved results reflect higher commercial shipments and lower commodity and material costs. We are forecasting sequential adjusted EBITDA improvement in the second quarter for Winchester with continued strong commercial demand, especially in pistol and rimfire ammunition, and lower operating cost.

Winchester continues to focus on cost reduction and we remain on track to complete the final equipment relocation during the second quarter of 2016. We anticipate that the annual cost savings from this project will reach $40 million.

As a result, we believe full year 2016 Winchester earnings will improve compared to 2015, primarily because of incremental savings from the Oxford relocation, lower commodity and material costs, and improvement in volumes, partially offset by lower prices.

Improved commercial demand for handgun and rimfire ammo sounds like Gun Culture version 2.0 is making an impact. An editorial today by Jim Shepherd in The Outdoor Wire speculates version 2.0 may be giving way to version 3.0. Either way, the improved sales of ammo by the Winchester Division certainly benefits from it.

Note: In full disclosure, I own shares in Olin Corporation. Nothing here should be taken as investment advice to either buy or sell the stock.

DoubleTap Chooses New Manufacturing Partner

DoubleTap Defense, formerly known as Heizer Defense, which announced back on October 11th that they were seeking a new manufacturer for their DoubleTap pistol has found one. It will be Azimuth Technology, LLC out of Naples, Florida.

From their press release:

ST. LOUIS, MO (November 7, 2012) – DoubleTap™ Defense, LLC announces today that it has chosen Florida-based Azimuth Technology, LLC to manufacture the DoubleTap™ concealed carry pistol. The DoubleTap Tactical Pocket Pistol was introduced at the 2011 NASGW show in Reno, Nevada.

“When we announced that DoubleTap was looking for a new manufacturing partner [October 2012], we were pleasantly surprised by the positive response from the firearms manufacturers and other precision manufacturing companies,” Ray Kohout, inventor and founder of DoubleTap™ Defense commented. “Our industry has been very supportive of the DoubleTap project and we are ultimately grateful. Out of all the responses we received, it became very clear that Azimuth Technology was the perfect fit in corporate philosophy, facility capability and plain, old-fashioned, roll-up-your-sleeves determination to bring this product to market in a timely fashion.”

The ultra-compact, no-snag, pistol in .45 or 9mm built on titanium or aluminum frames was well received by both industry media and firearms distributors with initial orders in the tens of thousands.

Azimuth Technology of Naples, Florida, is a state-of-the-art precision contract manufacturing facility. Azimuth produces products for various industries including defense, aerospace, oil/gas and many others. The Azimuth Technology facility boasts over 60 of the newest CNC precision machines capable of handling lot sizes from a mere 100 pieces to 1 million.

Azimuth Technology, founded by Len E. Zaiser and Len E. Zaiser IV, has over 50-years of manufacturing and business experience. Len Zaiser Sr. has founded seven different manufacturing companies that have employed thousands of people throughout his highly successful career. Len Zaiser Jr. is the President and co-founder of Azimuth Technology and former founder and co-founder of several area businesses.

Rumor Confirmed – Freedom Group Buys Para-USA

One of the rumors coming out of the SHOT Show was that Para-USA was in negotiations with Cerberus’s Freedom Group to be bought out. The release sent out today by the Freedom Group confirms that they are indeed buying Para-USA.

Madison, NC — Freedom Group, Inc., (FGI) through a wholly owned subsidiary has announced today that it has finalized an asset purchase agreement to acquire certain assets of Para USA, INC., (Para).

Founded in 1985, Para has built a solid and enviable reputation for innovation, performance and reliability. Firearms enthusiasts, serious shooting competitors and law enforcement agencies choose with confidence from a wide and growing variety of Para pistols. Para’s revolutionary high capacity frame and light double action (LDATM) trigger systems, are part of the innovation that Para has brought to the world famous 1911 design.

“We welcome Para into the Freedom Group Family of Companies,” stated. E. Scott Blackwell, Chief Sales and Marketing Officer of Freedom Group Inc. “Para USA is a leader in handgun technology and their fine products exemplify quality, innovation and performance. Para is a perfect complement to our industry-leading family of brands, and our success in 2011 with the Remington R1 – 1911. We look forward to deploying both human and financial resources to continue to develop and supply current and future handguns for consumers and our channel partners. We also wish to thank all its employees for their continued dedication that has made Para a success.”

Para will continue day-to-day operations at their Pineville, NC based facility.

Steve at The Firearms Blog speculates that it won’t be too long before operations are moved from Pineville to either Ilion, NY or Mayfield, KY where Remington has their main plants. I think it might depend on whether the Para-USA facilities will allow greater production of 1911’s than the Ilion plant and at a lower cost per unit.

UPDATE: Jim Shepherd passed on this little tidbit in The Outdoor Wire about the acquisition.

Can’t say a lot beyond the releases about FGI’s intentions, but a note arrived late last night Para’s longtime PR/Media contact Kerby Smith. In it, Smith offered a little insight into how things are shaping up -at least from his perspective.

“The company that I worked for is no longer active,” Smith wrote, “and I am no longer employed…I assume that this e-mail will be shut down soon…It has been a great pleasure working with you for PARA USA, Inc.”

The Para acquisition means Freedom Group has acquired a running pistol company with proven products to plug into as many of the FGI company lines as it pleases.

Para, if allowed to continue, will have access to FGI’s extensive sales, marketing, dealer, and materials supply chain. About all that remains to be seen is how FGI will bring Para into the fold-and how they’ll position Para products. For now, the official line is that Para USA will continue its day-to-day operations from its relatively new headquarters in Pineville, North Carolina.

Steve at The Firearm Blog has more on this acquisition today as well. He mentions that two Para-USA employees were formerly senior level managers with Freedom Group. 

Boston Globe: Extreme Gun Control And Gun Manufacturing Can Co-Exist

The Boston Globe ran an editorial today discussing the potential for firearms manufacturers located in New England to leave for more gun friendly states if the Massachusetts, Connecticut, and Rhode Island legislatures adopt micro-stamping legislation.

Colt’s management has already told Connecticut back in 2009 that they will be relocating if the state did adopt the requirement for micro-stamping.

After devoting a full paragraph to how easily micro-stamping can be defeated and that it has questionable utility in the first place, the Boston Globe editors essentially tell the gun manufacturers to sit down, shut up, and put up with this intrusion into their manufacturing practices.

While firearms manufacturers have a right to lobby against this legislation and explain their objections to it, it is inappropriate to wield the jobs of hundreds of workers as a weapon. Micro-stamping does not place any significant burden on the sale or manufacture of guns. It is not a ban or an arduous tax. It merely requires the engraving of a serial number in one more place on the weapon. If a state legislature decides micro-stamping is appropriate, it should not be forced to choose between citizens’ lives and citizens’ livelihood.

The Globe’s editors don’t get it. They want to eat their cake and have it, too. They want to have onerous gun control and they want the well-paying jobs provided by the gun industry. Sorry guys but it doesn’t work that way.

There are many other states with good industrial locations, great industrial training programs, and which are gun friendly who would love to have the Colt’s, the Smith and Wesson’s, the Mossberg’s, and Ruger’s of the gun industry relocate to their state. Even the New York Times – the owner of the Boston Globe – recognizes this in a recent story.

The Globe concludes:

Massachusetts has had gun-control laws for almost three centuries, and the Connecticut River Valley has been a center of gun-making since George Washington established an armory in Springfield. There is no reason that both gun control and gun manufacturing cannot co-exist for the next few centuries as well.

Inertia and the existence of a well-trained force of machinists and gunsmiths is one reason that the gun industry has remained in the Northeast. However, if these states think inertia will keep the gun industry in a place that treats them like something the cat drug in, they are sadly mistaken.

UPDATE: For two other takes on the Boston Globe editorial, there are posts by Kurt Hofmann, the St. Louis Gun Rights Examiner, and by Sebastian at Snowflakes in Hell.

Kurt notes that:

Industries have no moral obligation to remain in states (or countries, for that matter) that actively work against them. They have every right to move their tax dollars and good jobs to states that won’t use those resources to implement and enforce laws that work directly against the industries’ interests.

Sebastian takes apart their claim that Massachusetts has had 300 years of gun control.

The Globe describes gun control in New England as a “centuries old tradition”. Reality is, it’s not even a century old tradition, at least not for the kind of gun laws that the Globe regularly speaks in favor of. Most of it, in fact, is less than a half-century old, and much less than 25. Centuries old Boston gun control was regulating where and how one could set up for target practice on Boston Commons, or the old Boston ordinance that said if you’re going to store your rifle, musket, pistol, bomb grenade or artillery piece, it would be nice if you stored it unloaded/deactivated so as not to cause fire hazards. It was still, until the 20th century, legal to carry a loaded pistol around Boston. Does the Globe favor returning to that gun control tradition?

The Politics of Credit for the Firearms Industry

Jim Shepherd’s The Outdoor Wire is reporting a story this morning involving Warne Scope Mount Company of Oregon, Home Depot, and ultimately Citibank. Charles Lake, the president of the company, had submitted an application for a business line of credit to Home Depot which was approved. He needed wood for work benches plus some small appliances sold at Home Depot.

On September 28th, Warne was informed that the approval was rescinded not because of their credit rating but because of the “industry you are in”. When asked for specifics, he was told it was because he made parts for the gun industry.

Like many companies with private label credit cards, Home Depot doesn’t actually grant the credit or administer the program. It is actually run by a credit card company who sets the policies and who decides who gets or doesn’t get credit. In this case, the company is Citibank (South Dakota), N.A.

The story is now taken up by Rich Grassi, editor of the Tactical Wire. After finding out from Stephen Holmes, Senior Manager of Corporate Communications for Home Depot, that Home Depot had no policy against approval for companies in the gun industry and that Citibank handled all the details, he went to Citibank for an explanation.

The following was a prepared statement that he received from Elizabeth Fogarty, Citi Public Affairs:

“Citi does not prohibit the financing of firearms purchases by individuals nor the financing of businesses that manufacture and sell them to individuals for recreational use. However, we do prohibit financing merchants in the non-ancillary military equipment industry, including the financing of businesses that manufacture and or sell firearms for military use. While we do not discuss individual credit applications, we are always open to reviewing particular decisions when appropriate to ensure the policy is applied correctly.”

Non-ancillary military equipment industry? When asked to clarify the meaning of that description, Ms. Fogarty came back with “the policy prohibits financing businesses that manufacture and/or sell firearms for military use.” Grassi and The Outdoor Wire promise updates if they come along.

One wonders how long that Citibank has had this policy and, more importantly, why.  Are they afraid of getting caught up in a Pentagon procurement scandal or does it have something to do with the fact that it is 36% owned by the Federal government? Or none of the above? I hope Rich Grassi finds out more on this.

UPDATE:  Rich Grassi will be a guest on Tom Gresham’s GunTalk Radio this Sunday to discuss the issue. I’m sure Citibank never thought they’d get this amount of negative publicity for shafting a little 50 employee company in Tualatin, Oregon. Heck, I bet they don’t even know where Tualatin is. I sure didn’t and had to look it up on the map – it’s in the Metro Portland area.

UPDATE II:  From the NRA-ILA on the issue:

NRA-ILA Investigates Citibank Issue

Friday, October 08, 2010

This week, NRA-ILA and NRA’s Publications Division learned of an issue regarding the disapproval of credit by Citibank South Dakota for a respected manufacturer of scope mounts for firearms. Upon investigation with Citibank, it appears that the initial disapproval was based on the type of business the company is engaged in. Citibank applies an industry code to every business that seeks credit and it appears that the company was assigned a code that Citibank does not lend to. However, we believe this code was misapplied in this case.

At this time, it does not appear that Citibank is actively denying banking services or credit in an attempt to discriminate against firearm-related businesses. Rather, we believe that there was a misunderstanding as to the nature of this particular company’s business.

NRA-ILA staff will continue to work with Citibank to resolve this situation and to help prevent similar problems in the future.