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Message
Colt files bankruptcy
Posted on 6/14/15 at 5:25 pm
Posted on 6/14/15 at 5:25 pm
quote:
Gun maker Colt Defense LLC plans to file for chapter 11 bankruptcy protection by Monday, according to people familiar with the matter, amid business execution issues and a heavy debt burden.
The company has secured financing from its existing senior lenders to continue operating while in bankruptcy and expects to remain in business after the restructuring, the people said.
The West Hartford, Conn., company, with a legacy dating to 17th century New England, developed a pistol it calls “the gun that won the West” and enjoyed a lucrative stretch in the late 1990s and early 2000s as the U.S. military’s sole supplier of the M4 line of firearms widely used by front-line troops.
But Colt has struggled in recent years with delivering orders on time, a slowdown in rifle sales and its 2013 loss of a key contract to supply the U.S. Army with the M4. As a result of some of its operational issues, the company has had accounting problems that caused it to revise prior years’ reported financial results and miss a creditor’s initial filing deadline for an annual report, according to regulatory filings.
Colt plans to try to reduce its $355 million debt burden via a court-supervised auction of its business, to generate proceeds to repay some of its lenders, the people familiar with the plans said.
From the WSj LINK
6
Posted on 6/14/15 at 5:30 pm to I B Freeman
How does this happen to such a well known, seemingly well marketed company?
Posted on 6/14/15 at 5:33 pm to Tuscaloosa
Debt. Lots and lots of debt.
Posted on 6/14/15 at 5:34 pm to I B Freeman
After reading of their financial problems in a thread here a few weeks ago, this was inevitable.I still understand how an established and well-respected company like Colt can go bankrupt in the current gun-buying times we have. Hopefully someone will be able to help the out.
Does anyone understand what the heck this means????
Does anyone understand what the heck this means????
quote:
As a result of some of its operational issues, the company has had accounting problems that caused it to revise prior years’ reported financial results and miss a creditor’s initial filing deadline for an annual report, according to regulatory filings.
Posted on 6/14/15 at 5:34 pm to Tuscaloosa
Piss poor management and trying to sell $700 pocket .380's. They can't compete as a volume seller with their current product lines.
Posted on 6/14/15 at 5:37 pm to TigerOnThe Hill
quote:
caused it to revise prior years’ reported financial results and miss a creditor’s initial filing deadline for an annual report, according to regulatory filings.
It means they misstated their previous financials and had to revise them. Not a good sign.
Missing an annual report filing is a sign of bad mismanagement.
They do seem to have debtor in possession financing so they will continue on. They will probably be sold in bankruptcy.
Posted on 6/14/15 at 5:41 pm to I B Freeman
Hope Ruger or SAI buys them. Pants will be shat... 
Posted on 6/14/15 at 5:43 pm to Clames
quote:
They can't compete as a volume seller with their current product lines.
Hunter fans had it happen too, long lasting isn't good enough anymore.
On the plus side, my Colts might increase in value.
Posted on 6/14/15 at 5:45 pm to Tuscaloosa
The group that bought them years ago immediately took out hundreds of millions worth of loans, put it in their pocket, and left the debt on Colt's balance sheet. Colt is a small company even by gun manufacturing standards.
All of the above is true.
All of the above is true.
Posted on 6/14/15 at 5:48 pm to Clames
quote:
They can't compete as a volume seller with their current product lines.
To be fair, Colt is too small to produce guns at S&W or Ruger levels.
Posted on 6/14/15 at 5:53 pm to Tuscaloosa
They focused on selling guns to Uncle Sam and said frick the consumer. They did piss poor development on new guns and ran union plants in liberal states. Everything took a nip on their arse till they faded away...
Posted on 6/14/15 at 5:58 pm to weagle99
Another point: Every gun Colt makes gets sold. They are basically running flat out with what they have to work with.
Posted on 6/14/15 at 6:05 pm to weagle99
mossberg will buy 
Posted on 6/14/15 at 6:20 pm to oleyeller
The "stalking horse" appears to be a investment group that has already put money in the company and owns a large portion of their stock.
The probably see an opportunity to get rid of a bunch of debt through bankruptcy and own the company with a much better balance sheet.
They may then sell it.
The probably see an opportunity to get rid of a bunch of debt through bankruptcy and own the company with a much better balance sheet.
They may then sell it.
Posted on 6/14/15 at 6:23 pm to weagle99
quote:Three things about this statement:
Another point: Every gun Colt makes gets sold. They are basically running flat out with what they have to work with.
A) If true, Colt is charging way too little for their product. Every business in the world would love to be in a position where they are running at capacity and every item is sold.
B) If true, and price is where is should be, Colt's costs are astronomically high
C) That statement isn't true
For them to file bankruptcy, one of the 3 points above has to be accurate
Posted on 6/14/15 at 6:25 pm to TigerTatorTots
quote:
But Colt has struggled in recent years with delivering orders on time, a slowdown in rifle sales and its 2013 loss of a key contract to supply the U.S. Army with the M4. As a result of some of its operational issues, the company has had accounting problems that caused it to revise prior years’ reported financial results and miss a creditor’s initial filing deadline for an annual report, according to regulatory filings.
Posted on 6/14/15 at 6:30 pm to wickowick
quote:
They focused on selling guns to Uncle Sam and said frick the consumer.
I think this was their main failing. A few of Colt's bad decisions that I recall point to this:
They never came up with a practical hi-capacity pistol. Remember the failed "All American 2000) from the early 90's?
Bought the rights to a well respected custom rifle (Melvin Forbes' Ultra Light Arms rifle) and completely botched it when they made it into a mass produced rifle.
They turned the Peacemaker into a Custom Shop item, just as the Cowboy Action Shooting sport took off.
They decided to get out of the DA revolver business just as the concealed carry market interest exploded for compact DA .357s and lightweight 38 Spec's.
Eliminated from their line up full size 357 Mag revolvers (Trooper, Lawman, Python and Cobra).
Came out w/ their 380 semi-auto long after what's basically the same gun made by Sig was well-established in the market.
Posted on 6/14/15 at 6:41 pm to weagle99
It's a debt fund's loan to own strategy. Lever up, clean it up, rebuild and sell.
Posted on 6/14/15 at 6:53 pm to TigerTatorTots
quote:
A) If true, Colt is charging way too little for their product. Every business in the world would love to be in a position where they are running at capacity and every item is sold.
B) If true, and price is where is should be, Colt's costs are astronomically high
C) That statement isn't true
D) People don't realize how small Colt's production capacity is. The name has clout, the reality of the company does not.
One must also consider Colt's debt when discussing the overall picture.
My info on Colt's sales came from an industry insider, FWIW.
This post was edited on 6/14/15 at 6:55 pm
Posted on 6/14/15 at 6:56 pm to weagle99
quote:
insider.
Who's QBing for LSU this season?
Seriously, I just hate to see another American company go belly up.
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