Colt Sees Financial Troubles, Warns of Possible Default

[Colonialgirl]

Colt Sees Financial Troubles, Warns of Possible Default

Colt Defense LLC indicated last week in a filing with the US Securities and Exchange Commission that the company may default on a $10.9 million loan payment due this week. According to the Wall Street Journal, the gun maker was scheduled to make the payment to bondholders on Monday, but has a grace period until December 15 to pay out. If the company does not, it will be in default.

“The Company does not have sufficient funds to repay all of its debt upon an actual acceleration of maturity,” the filing, which was obtained by the Hartford Courant, states. “Lenders would likely take actions to secure their position as creditors and to mitigate their potential risks. These conditions would adversely impact the Company’s liquidity, and raise substantial doubt about the Company’s ability to continue as a going concern.”

http://www.outdoorhub.com/news/2014/11/18/colt-sees-financial-troubles-warns-possible-default/?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=November%2018%202014%20Daily%20Newswire%20%281%29&utm_content=&spMailingID=47434302&spUserID=NDQxNTMxNDAyNDIS1&spJobID=562437267&spReportId=NTYyNDM3MjY3S0

 

[Critch]

Well, all I can say is "poor management". I can buy a Ruger or DPMS Ar-15 that works just as well as a Colt at half the price, I can buy a Uberti Cattleman for a lot less than a Colt SAA, and it works just as well....Colt has made some dumbass decisions when it comes to marketing.

 

[JFB]

The firearm bubble is deflating. the publicly traded firearm/ammo related stocks (Alliant, Olin, Smith & Wesson, and Ruger) have been dropping hard since about May. Wish I had sold.

 

[TRanger]

I hope they overcome this. It would be a shame for Colt to pass from the scene. They have made the most famous guns in American history and there is nothing like the real thing. Remember most of the gun companies today, including S&W and Ruger are making copies of Colts.

 

[jeffnles1]

Like Winchester, Colt is a brand name too valuable to disappear. If the current company management cannot pull this out, they will file Chapter 11 and someone else (Firearms or not) will gobble up the brand name. Not necessarily any of the manufacturing capability, current inventory or employees, just rights to the name. Who knows what will happen after that?

Hope it doesn't happen.

 

[Cheesewhiz]

My guess is there will be companies sitting back for a near collapse before coming to the "rescue". Probably a foreign corporation, Glock comes to mind, maybe Beretta or Sig, the wild card might be CZ, what they have done with Dan Wesson is remarkable but they might be too small. I hope it's not one of those conglomerates, some real bad stuff coming from some of those groups.

Just thought of something, they might be deemed to big to fail, anyone want to buy an Obamacolt?

 

[TRanger]

Guns.com is now reporting Colt has secured a $70 million loan to avoid default. Hate to have to borrow $70 million. :shock:

 

[m657]

"Colt has made some dumbass decisions when it comes to marketing." boy that's the truth....

 

[Jim Puke]

Colt is in the same position that it has been in for years...this is nothing new. The company has a long history of financial mismanagement.

 

[Rick Courtright]

My guess is there will be companies sitting back for a near collapse before coming to the "rescue". Probably a foreign corporation, Glock comes to mind, maybe Beretta or Sig, the wild card might be CZ, what they have done with Dan Wesson is remarkable but they might be too small. I hope it's not one of those conglomerates, some real bad stuff coming from some of those groups.

Hi,

My understanding is CZ is the world's largest firearms mfr. If that's true, and they should prove not to be "big enough," that pretty much sentences the company to life under an "investor's group" such as Freedom Arms with Remington, Marlin, H&R and others. I agree with you, Cheese: heaven help us if that happens...

Rick C

 

[Cheesewhiz]

My guess is there will be companies sitting back for a near collapse before coming to the "rescue". Probably a foreign corporation, Glock comes to mind, maybe Beretta or Sig, the wild card might be CZ, what they have done with Dan Wesson is remarkable but they might be too small. I hope it's not one of those conglomerates, some real bad stuff coming from some of those groups.

Hi,

My understanding is CZ is the world's largest firearms mfr. If that's true, and they should prove not to be "big enough," that pretty much sentences the company to life under an "investor's group" such as Freedom Arms with Remington, Marlin, H&R and others. I agree with you, Cheese: heaven help us if that happens...

Rick C

CZ's work is mainly military at the moment, they're tied into a lot of stuff right now. The CZ-USA division is running Dan Wesson, they're not huge.

 

[powder smoke]

Well, all I can say is "poor management". I can buy a Ruger or DPMS Ar-15 that works just as well as a Colt at half the price, I can buy a Uberti Cattleman for a lot less than a Colt SAA, and it works just as well....Colt has made some dumbass decisions when it comes to marketing.

Quoted the truth, Comments like Colt is to important in the firearms industry to fail is Hog Wash.
Yes there is nostalgia an old gun maker, if they can not compete that is there sole problem not mine
or the gun industries. There high prices are for name only many great make great guns for have the
money. The prices they get for guns they should be rolling in dough. Case in point have a look at
Freedom arms another high priced excellent firearm, there staying afloat. Colt imo are over priced for
what you get. Evidently I'm not the only one. ps

 

[Cheesewhiz]

Comments like Colt is to important in the firearms industry to fail is Hog Wash.

My Obamacolt comment was a joke. It would be sad if the Colt name went away though.

 

[Jim Puke]

The only thing that has kept them is business is government contracts. Part of this current disclosure is in a effort to gin up another contract to help them stay afloat.

 

[DA_TriggR4Ruger]

You can tell where a companies heart is by their customer service.

Try to call colt with a firearms related issue. They act like you're wasting their time. They cater to their law enforcement / military contracts.

For years now I have felt they need to step back and reevaluate their stand in the civilian/retail market.

Working for a gun shop and dealing with colt... Yep I can see why they are where they are.

They need an overhaul on their civilian market and implement a totally different approach to customer service. Colt, you have alienated yourself from hard work and from the customers you serve, instead, relying on the govt. teet to feed you thus taking the easy way out... Colt, I know it's hard to hear this, but that can't last forever.

 

[Bull Barrel]

Hmm...cant pay a $10.9 mil loan...so they borrow $70 mil more!
Colt management is ready to work in DC!

 

[DA_TriggR4Ruger]

I read they just defaulted on a loan and are shutting their doors...

 

[Cheesewhiz]

FN-USA (Columbia, SC) will finish the M4 contracts probably and the parts end of it, they use to run them for a couple very large contracts before, they could end up being the main buyer of Colt but would split it and just handle the military/police end of the business. If that did happen and that's a lot of big if's, the rest (the civilian market) would be up in the air, CZ-USA/Dan Wesson could take that end of it over, heck Ruger or Smith might even jump into that game. This will be interesting. There are still an awful lot of people who think the only real 1911's/Colt SAA built have to say Colt on them.

CZ - Europe had a failed business deal with Colt some many years back for a brand new designed .40 S&W pistol, the gun started out to be a fine one until the Colt managers/engineers started telling CZ how to build a gun, super stupid move on Colt's part.



Note: the rollmark says Hartford on it. This was after Colt messed with it and not many were made. Later CZ made a model (CZ40B) from left over parts made mostly at Colt trying to recover some losses and that thing was not a great gun, lots of quality issues.


CZ - Europe dabbled in making some Colt SAA revolvers years ago, this may be one of those prototypes, I am not sure so don't take me to the bank on this picture but I know they made some proto's awhile back. they probably borrowed some technics from Ruger, CZ also does a lot of investment casting, good quality though like Ruger does.

 

[DA_TriggR4Ruger]

Lol. I had a CZ40B. Lee warned me, but the accuracy was terrible! It eventually turned into an SP01 Tactical after swapping around a little.

 

[Cheesewhiz]

My guess is there will be companies sitting back for a near collapse before coming to the "rescue". Probably a foreign corporation, Glock comes to mind, maybe Beretta or Sig, the wild card might be CZ, what they have done with Dan Wesson is remarkable but they might be too small. I hope it's not one of those conglomerates, some real bad stuff coming from some of those groups.

Hi,

My understanding is CZ is the world's largest firearms mfr. If that's true, and they should prove not to be "big enough," that pretty much sentences the company to life under an "investor's group" such as Freedom Arms with Remington, Marlin, H&R and others. I agree with you, Cheese: heaven help us if that happens...

Rick C

CZ's work is mainly military at the moment, they're tied into a lot of stuff right now. The CZ-USA division is running Dan Wesson, they're not huge.

I posted this as an answer to Rick's point about how big CZ is now as a manufacturer but me saying they've been so busy that I can't see them buying Colt, lock, stock and barrel.

Well I'm going to post some videos of some of these newer things but the biggest issue they have now is India and about five other countries are buying every bit of the new military stuff that's out. CZ is working on some civilian versions of these rifles/? mostly for the US market but my guess is delivery will be rather slow. The battle rifles are available in three calibers currently, 7.62 x 39, 5.56 x 45 and the 6.8 SPC. There is a take down video for a civilian full sized rifle that will be first and is interesting, the bolt fit is a thing of beauty. Next will be a video from Noir with their sub gun/civilian pistol variant but shooting the old timer scorpions first just for yucks (shooting both). The rest will just be some generic shoot 'em ups but kinda fun.

https://www.youtube.com/watch?v=3WJNFmiGrmY

https://www.youtube.com/watch?v=8XAYsYwZGxI&list=UU193r5YXcpQJV34N99ZbhzQ

This next one is a well over done and convoluted CZ production but pay attention to the Bren's optional swing out pivoting grenade launcher, that is pretty awesome

https://www.youtube.com/watch?v=MaL_oKeESUI

Now a guns and ammo vid, notice that there is next to no muzzle jump and this is the carbine version.

https://www.youtube.com/watch?v=1K0MX3GjbhM

...and my point is this and it has nothing to do with my being a CZ cheerleader at all. CZ came out of communism as a formerly state run company making car parts and sewing machines and making some guns for there newly non commie cops and a reconfigured very small army. They did have something to sit back on, an anchor, they designed and made a very good (maybe one of the greatest) pistols ever designed and made and that kept them in the light (the CZ75) and that was enough for them to build on.
Now they're one of the biggest gun makers in the world with country after country knocking down their doors for their military small arms, that India contract has to be huge beyond belief.
They have built and maintained a huge civilian market that is as loyal as any you'll see, they produce great bolt action hunting rifles (with short, medium and long actions), the most accurate bolt action rimfire field rifles there are in multiple configurations, shotguns with great reputations, specialty guns and now make about 25 different variants of that old vaunted CZ75 pistol and after all this, they turn around and buy a failing Dan Wesson and make that company a viable and profitable business, making mid-premium 1911's and will soon be remaking the revolvers that gave DW it's name and original market. Yes, they're a foreign company, thankfully one owned by people from a country that is good friends of our country and invest heavily in our country but I read Colt's going under and it just boggles the mind. My, how the mighty have fallen, humpty dumpty and I take no glee in that, I'm an American, I want us to be the leaders in just about everything but small, medium and heavy industry are still key in my book and we seem to lose a little of it every day.