Colt Defense LLC (the “Company”) is unable to file the subject report in a timely manner because the Company is working through accounting considerations and liquidity concerns with respect to its financial operations. As a result of several recent business trends negatively impacting the Company’s current and forecasted revenues and cash flows, the Company is evaluating its forecasted operating cash flows in consideration of recent delays in product shipments and availability of borrowings under the Company’s Credit Agreement. As of this filing, the Company believes that it is probable that it will not be in compliance with its Term Loan covenants, as amended, as of December 31, 2014 as they currently exist absent an amendment, waiver or refinancing of the Term Loan Facility. The Company is in current discussions with existing and potential financing sources to address the situation as discussed below in Part IV.
They recently started requiring PD letterheads for factory SBRs such as 6933s and 6945s, as a result nearly every one of my wholesalers dropped their NFA line completely because it was too much hassle.
They pulled a similar stunt right after the sunset regarding “LE restricted” rifles such as 6920s, 6520s, 6721s, etc. I had dozens of orders I was unable to fulfill as a result of the “LE Only” policy. And the only Colt rifles available through the commercial line where the neutered “Clinton ban” models nobody wanted.
And let’s not forget Colt voluntarily pulling a similar stunt around 1989 when they decided bayonet lugs and collapsible stocks where not suitable for civilian rifles and they participated in a domestic ban policy for 5 years before it was even a law. The joke was on them however, even their “no bayo lug, no sliding stock” model was deemed unacceptable by the Clinton ban which they supported through their actions starting in 1989.
Meanwhile dozens of lesser quality manufacturers are taking a large share of the Colt market. If Colt hadn’t repeatedly turned away the civilian buyer there probably wouldn’t even be a Daniel Defense or a Remington R15.
Maybe they will have to learn the hard way like Ruger did. Sooner or later somebody will own it and start knocking out rifles. Let’s just hope Cohen doesn’t show up to fix things.
You and me are on the same page. I am wondering whether or not it might be a good idea to pick up two or three if I can swing it actually. If they go under, even for a short period to reorganize the price of Colt anything will jump hard because people who panic like.
… but I don’t see the reorganized post-Chapter 11 version of Colt being that competitive bidding for contracts, especially with FNH-USA standing to gain so much from greater market share.
Somehow, I knew $900 6920’s at Wal-Mart were too good to last.
Keep in mind most of Colt’s mistakes have been due to prior ownership. After the company split in 2002, one of Colt’s new owners, Blackstone, stipulated no civilian sales of black rifles.
That just changed this year when Blackstone was bought out and the two companies (Colt Defense and Colt’s Manufacturing) were re-united.
I agree that the forced move and labor restructure that can come with it would be hugely positive (I’m well aware of that fiscal boat anchor around their neck) - but that would still leave the new organization somewhat debt-ridden, with less production capacity, and in a market that is correcting from an unprecedented boom and re-normalizing it’ll be a hard climate to make it work… in short a company leadership good enough to make it go well in a situation like that could probably have found a way to have already addressed some of those problems.
I suspect longer term option will be acquisition/merger with another larger player (hate to even think it, but probably some Freedom Group derivative or some similar arrangement) is the eventual fate after Chapter 11 restructure makes them at least an attractive merger prospect - all good from the business side, but I can’t get past the irony that Colt is making the best guns in its history, but has found a way to lose money doing it. Unless Lucy (Army) leaves the football out there (new sidearm contract) for a change (the last few fizzled joint pistol competitions), I still see some rough times ahead.
Statement of the day. Some people / companies simply can’t get out of their own way. If I owned Colt I’d move production of AR rifles to South Carolina and would go after the civilian / law enforcement market with the same effort seen by Daniel Defense.
I’d also keep Colt split with Colt Manufacturing in it’s traditional location making custom shop handguns, SAA revolvers and such and Colt Defense would be in SC.
I shake my head in disappointment but have a hard time finding the first bit of sympathy. They were stupid enough to sign union contracts in the first place that put such a debt around their necks (So other old companies did it too…just because someone else does something stupid does it make it less stupid for you to do it also?) , relied on government contracts and basically told the civilian market to go f*** ourselves repeatedly, destroyed the tooling for making Pythons, stayed in Connecticut while that state has been anti gun for years, allowed themselves to be owned by anti gun owners and led by anti gun leadership WHILE BEING AN ICONIC AMERICAN GUN COMPANY…
Can people that stupid even breathe correctly? How is it even possible to land on that many 00 spaces on the roulette wheel consecutively?
