Nilo Farms

Ducks Unlimited has produced a short film on the history of Nilo Farms which John Olin established outside of St. Louis. The film features his Labrador Retriever King Buck who not only won back to back national retriever field trial championships but was the only dog ever featured on a Federal Duck Stamp.

My first Lab was named Sam Spade after the detective and came from field trial stock. His grandfather Dude’s Double Or Nothin’ was the 1981 National Amateur Field Champion and his father was Snake Eyes Double Or Nothin’. Both are in the Retriever Hall of Fame. Sam was never field trialed but he was a damn good dog and I had him for 13 good years. I still miss him.

First US Law To Treat Repeating Arms Differently

Attorney and Second Amendment scholar David Kopel had an interesting article published yesterday. It dealt with the racist history of gun control and how it is still being written by gun control advocates.

The article recounted the advice of journalist and civil rights activist Ida B. Wells to fellow blacks to “buy a Winchester”. As Kopel notes, Wells was the leading anti-lynching advocate of the late 19th and early 20th centuries. She felt that a repeating rifle in the hands of armed black men and women was essential to lynch mobs.

On June 25, 1892, Wells penned an iconic article for the New York Age, which was reprinted as a nationally circulated pamphlet, “Southern Horrors.” After noting cases in which lynch mobs had been defeated by armed blacks, Wells continued: “The lesson this teaches and which every Afro-American should ponder well is that a Winchester rifle should have a place of honor in every black home, and it should be used for the protection which the law refuses to give.

“When the white man who is always the aggressor knows he runs as great a risk biting the dust every time his Afro-American victim does, he will have greater respect for Afro-American life. The more the Afro-American yields and cringes and begs, the more he has to do so, the more he is insulted, outraged, lynched.”

Wells was referring to an incident in Jacksonville, Florida in which armed black men with their repeating rifles prevented a black prisoner from being lynched.

The result of this incident is that that Florida legislature enacted a gun control law in the next session that required a license to carry or possess “a pistol, Winchester rifle or other repeating rifle.”

This appears to be the first American statute that treated repeating arms differently from other arms. The 1893 Florida tradition is continued today by states such as California and Massachusetts, which ban many common repeating rifles and shotguns, and limit magazine capacity to only 10 rounds. (emphasis mine)

In the 1941 case Watson v. Stone, the Florida Supreme Court construed the statute narrowly. The court held that the statute didn’t apply to carrying in an automobile. Concurring, Justice Buford explained the racial background:

“I know something of the history of this legislation. The original Act of 1893 was passed when there was a great influx of negro laborers in this State drawn here for the purpose of working in turpentine and lumber camps. The same condition existed when the Act was amended in 1901 and the Act was passed for the purpose of disarming the negro laborers. … The statute was never intended to be applied to the white population and in practice has never been so applied. (emphasis mine) … [T]here has never been, within my knowledge, any effort to enforce the provisions of this statute as to white people, because it has been generally conceded to be in contravention of the Constitution and nonenforceable if contested.”

This law was only repealed in 1987 when Florida adopted shall-issue carry permits.

The gun control lobby is still trying to keep “repeating arms” out of the hands of blacks – and whites and Asians and Latinos and Native Americans. Indeed, Joe Biden, he of the double-barrel shotgun, vows to do away with “repeating arms” on his campaign website. He may call them by a different name but they are still repeating arms.

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.

Ammo Sales Are Up At Winchester

Olin Corporation released their second quarter 2015 results yesterday. I doubt anyone who reads this blog cares what they made on their sales of chlor alkali and caustic soda. However, their results from their Winchester division are interesting.


Winchester second quarter of 2015 sales were $194.2 million compared to $181.0 million in the second quarter of 2014. The increase in second quarter of 2015 sales compared to the second quarter of 2014 reflects increased shipments to commercial, law enforcement and military customers. Winchester’s second quarter 2015 segment earnings were $33.9 million compared to $33.1 million in the second quarter of 2014. The increase in segment earnings reflects the impact of lower commodity and material costs and lower manufacturing and other costs, partially offset by a less favorable product mix.

As I read this, and I’m not an accountant, both their gross sales and net revenues from ammo sales are up. However, their net margins have dropped from 18.29% in 2014 to 17.04% in 2015. Given that they have lower commodity/material costs combined with lower manufacturing costs in 2015, the fact that their net margins have dropped would be something I’d want to keep an eye on.

I’m thinking that either Walmart is really pushing them on price or that push is coming from their governmental bulk sales. This is all just a guess on my part.

Early Morning Fire At Winchester’s East Alton Plant

There was a fire in the early hours of the morning at Winchester’s East Alton, Illinois ammunition plant. Fortunately, it seems that only a maintenance shed was destroyed and the fire did not spread to other areas of the plant.

From the St. Louis Post-Dispatch:

An early-morning blaze and propane explosion at an ammunitions factory in East Alton was contained to a maintenance shed and caused no injuries, according to police.

A motorist spotted fire in a maintenance shop at the Winchester Ammunition plant, which is a division of Olin Corp., and called 911 about 3:15 a.m., according to East Alton Fire Chief Randy Nelson.

Reports vary as to when the fire was first spotted but it was finally extinguished around 7:30 this morning. The blaze caused propane cylinders to explode and steam lines to rupture from the intense heat.

More on the fire from St. Louis station KMOV:

You can see the morning after pictures in this report from Fox 2 St. Louis:

Winchester has been in the process of moving its center-fire ammunition production from the East Alton plant to its much newer plant in Oxford, Mississippi. Winchester started this move in mid-2010. Rimfire ammunition was moved to Oxford earlier.

 Olin Corporation, the parent of Winchester, has not made any official statement on the fire that I can see on their website. Given that it happened on a Sunday morning, this is not too surprising.

Winchester Plans Moving Center-Fire Ammo Plant

According to stories in the St. Louis Post-Dispatch and the Alton, IL Telegraph, the Winchester Ammunition division of Olin Corporation is exploring plans to move their East Alton, IL center-fire ammunition plant to Oxford, Mississippi. Winchester had moved their rimfire ammunition production to Oxford in 2004.

Managers announced the plans to workers last Thursday (August 5th). At stake are about 1,000 jobs. According to statements from the River Bend Growth Association, Winchester is the area’s largest employer with about 1,700 employers. The move, if Winchester goes ahead with it, would be completed over three to five years.

Two factors that may be behind the move are Olin’s property tax dispute with Madison County, Illinois and the need to lower labor costs.

One of the factors driving Olin’s decision may be its Madison County property tax. The corporation has appealed its East Alton facilities’ assessed value each year since 2003, said Kerry Miller, chairman of the Madison County Board of Review.

Last year, the Board of Review, which hears property assessment appeals, put the company’s property value at $36 million. Olin’s appraisers, however, put the market value of its property at $17 million. Olin has appealed the Review Board’s valuation, and it is pending in Illinois’ appellate court, Miller said.

Labor costs would probably be lower for Winchester in Mississippi than in East Alton. The workers at the East Alton plant are represented by the International Association of Machinists and Aerospace Workers District 9.While not explicitly stated in either story, it seems to be understood that the Mississippi plant is non-union.

Neither the mayor of Oxford, MS nor the Mississippi Development Authority would not say anything more than they work “to retain and support existing businesses”. Illinois officials were not so reticent.

State Sen. William Haine, D-Alton, said he got a call about the potential move from one of the company’s lobbyists the day before the announcement. He said he is not sure what motivated the decision.

“I’m shocked, to tell you the truth,” he said. “I thought they were making money there.”

The state could look at some kind of tax abatement for the company’s facilities in Alton, but “there isn’t any pot of money in Springfield to hand over to anyone,” Haine said.

“We don’t know how to proceed as a state,” he said. “It’s pretty hard to assemble an incentive package when we don’t know what’s driving their decision. And B, it’s evident the state of Illinois doesn’t have any money.”

And from the Mayor of East Alton to the Telegraph:

East Alton Mayor Fred Bright said it would hurt his community, but his experience with the company shows that is not a major concern for management.

“Olin cares for nothing but Olin, itself,” Bright said.

Mayor Bright’s attitude sounds real helpful in attempting to keep his city’s largest employer. At least State Sen. Haine is realistic enough to realize that the State of Illinois doesn’t have the money to pay them to stay.

Winchester has had a presence in East Alton since 1892 when the Equitable Powder Company was founded there by Franklin W. Olin. Ammunition production began in 1898 with the opening of the Western Cartridge plant.

UPDATE: Sam Pierce of the Illinois Review gives more perspective on Winchester’s plans to move. He worked in the Engineering Dept of Winchester for almost 10 years at the East Alton plant. After reading his piece, I’m surprised that Olin didn’t move the plant years ago.