Mon
Dec 17 2012
11:57 am

Guns are big business in the U.S. But not that big. Looking at 2011 results for publicly traded gun companies...

• Smith & Wesson reported $500 million in sales, gross profit of $128 million, and net income of $58 million.

• Sturm, Ruger reported $443 million in sales, gross profit of $112 million, and net income of $61 million.

• Freedom Group, which includes Remington and also manufactures the Bushmaster assault rifles popular with psychopaths, reported $775 million in sales, gross profit of $220 million, and a net loss of $7 million. (The company is not publicly traded, but had recently considered it and publishes SEC style quarterly and annual reports).

The only other publicly traded firearms company I could locate is ATK. They are mostly a defense weapons contractor, but also make popular lines of commercial ammunition and accessories. Their annual sales were $4.6 billion, with gross profit of $995 million and net income of $247 million. Their consumer products represented about 20% of sales.

Glock and Sig Sauer are privately held and don't publish financial reports. A profile of Sig Sauer, however, put their annual sales at approx. $160 million.

All of that is a lot of money, but not that much in the big scheme of things. Apple had revenues of $157 billion, nearly 20 times the combined revenues of these companies.

Yet somehow, by way of the NRA, they hold sway over gun policy in the U.S. The NRA, by the way:

• Had revenues in 2010 of $16 million

• Spent $18 million on independent political communications in the most recent cycle

• Spent over $5 million on lobbying

• Made over $1 million in direct campaign contributions

Again, that just doesn't seem like enough to purchase U.S. gun policy lock stock and barrel. If Congress, state legislators, governors and mayors just said NO to the NRA they would be out of business and we might then be able to have a rational discussion about gun policy.

In related news, it's being reported that gun sales are up after Friday's tragedy. Enthusiasts are no doubt loading up on assault rifles and high capacity magazines because this may be the tipping point. Despite possible short term gains, however, investors appear to be taking a dimmer long view. As the broader markets advanced, Smith & Wesson shares were down 4.7% this morning and Ruger shares were down 1.6%.

Finally, take a look at these interesting management discussion remarks from gun company financial reports:

• S&W: "Political and other factors also can affect our performance. Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can affect the demand for our products. For example, we experienced strong consumer demand for our firearm products following a new administration taking office in Washington, D.C. in 2009. In addition, speculation surrounding increased gun control and heightened fears of terrorism and crime can affect consumer demand for our products."

• Sturm, Ruger: "The Company believes that the lawful private ownership of firearms is guaranteed by the Second Amendment to the United States Constitution and that the widespread private ownership of firearms in the United States will continue. However, there can be no assurance that the regulation of firearms will not become more restrictive in the future and that any such restriction would not have a material adverse effect on the business of the Company."

• Freedom Group: "We believe the continued economic uncertainty and the 2012 presidential election is likely to continue to spur handgun and certain rifle sales. Additionally, returning military are likely to purchase firearms for recreational use and to maintain training. We believe the industry is experiencing trends more toward recreational and shooting sports and home defense, in addition to the traditional hunting market."

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bizgrrl's picture

Apparently the NRA's

Apparently the NRA's advertising is very loud, thus successful. Sort of like the teaparty. Or, maybe it is the press that gives them the best advertising. Could it be that outrage can change the noise so that no can be said to the NRA and their supporters? Let's hope so.

R. Neal's picture

NRA Takes Down Facebook Page,

metulj's picture

I would assume that Anonymous

I would assume that Anonymous is lurking out there too.

metulj's picture

If you ever want a hoot of a

If you ever want a hoot of a tour in DC, go to the NRA gun museum thingie. Subtlely, it is as unhinged as the Jesus Rode Dinosaurs theme park in Kentucky.

R. Neal's picture

USA Today: Gunmakers' stocks

USA Today: Gunmakers' stocks continue to lose ground

Since the day of the shooting, one of the deadliest at an elementary school, shares of Smith & Wesson and Sturm Ruger are down 7% and 6.8% respectively.

Investors' fear is that the event might not only reopen discussion of gun control but also snuff out what's been a period of strong weapons sales.

cafkia's picture

It is not just the

It is not just the manufacturers who make money on gun sales. The wholesalers and retailers can end up doing pretty damn good for themselves. Part of the pressure on legislators would likely come from them in part because it is their incomes on the line and partly because the gun industry/NRA wants to appear to have a broad base of support.

I suspect that their current fears are well grounded.

R. Neal's picture

Markets do not lie (usually)

Smith & Wesson Holding Corporation (SWHC) -NasdaqGS
7.88 -0.78 (-8.95%) 10:10AM EST - Nasdaq Real Time Price

Sturm, Ruger & Co. Inc. (RGR) -NYSE
41.56 -2.44 (-5.55%) 10:11AM EST - Nasdaq Real Time Price

NYT: Cerberus to Sell Freedom Group

The private equity firm Cerberus Capital Management said on Tuesday that it would sell its investment in the gunmaker Freedom Group in response to the school shootings last week in Connecticut.

Cerberus acquired Bushmaster — the manufacturer of the rifle used by the gunman in the Newtown attacks that killed 27 people, including 20 schoolchildren — in 2006.

Pickens's picture

Cerberus to Sell Freedom Group

So it's bad enough Cerberus wants to sell it (and get paid for it), but it is not bad enough for Cerberus to shut it down totally and not get paid for it. Gotcha.

Pickens's picture

Dick's Sporting Goods has suspended sales of its modern rifles

reform4's picture

Looks like it's just temporary, though...

... or they could be sold out. There's a lot of panic-buying going on right now.

R. Neal's picture

Bass Pro Shops top online

Bass Pro Shops top online sellers today

(link...)

Factchecker's picture

No matter what the jackasses say

You are 4.5 times as likely to be shot in an assault situation if you have a handgun.

(link...)

(h/t Crooks and Liars, which I can't link to right now)

JWagner's picture

So, based on the "study", if

So, based on the "study", if I'm being shot at, I should be glad I'm unarmed? Doesn't even pass the straight face test.

bizgrrl's picture

Neither does your comment.

Neither does your comment.

WhitesCreek's picture

A pistol moves you to the front of the target list

I think part of the problem with having a rational conversation with gun people is that they don't really want to think about what is being said. It's all slogan and sound bite and that's unfortunate. It is a proven myth that bad guys with guns are only stopped by good guys with guns, and even that fails to ponder keeping bad guys from getting guns in the first place. The assault weapons ban actually worked quite well and would have worked even better had a 52 round clip not been available to the shooters. That rampage was not stopped by good guys with guns, it was stopped when the large capacity clips jammed and the shooters took themselves out. This is apparently the same thing that happened in Connecticut.

Min's picture

Shooting in Pennsylvania today.

Four people are dead, including the gunman, and three troopers were injured.

(link...)

Seriously, people. WTF?!?

WhitesCreek's picture

And Columbine had an armed

And Columbine had an armed guard.

Factchecker's picture

Unfunded mandate that the NRA can't be serious about

So much for one of their favorite arguments that such-and-such incident would not have been prevented with this or that new regulation. Their own solution is a cruel insult.

bizgrrl's picture

The NRA has 3 million

The NRA has 3 million members. There are 36 million members of the AARP. I say we take ‘um. We have canes, scooters, colostomy bags, medical marijuana, and the entire Rolling Stones.
...
Meet up over at the Arthritis Clinic at noon tomorrow. Hell, we stopped a war in Vietnam. We can do this.

fischbobber's picture

A thought to add to that.

(link...)

I miss Molly Ivans.

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