User Panel
Posted: 11/16/2014 10:46:54 AM EDT
I hope they don't go under but it doesn't seem too good.
Wall Street Journal Company Is Likely to Miss $10.9 Million Payment to Bondholders on Nov. 17 By Stephanie Gleason Updated Nov. 13, 2014 5:15 p.m. ET Colt Defense LLC warned that it could default by the end of the year, as the privately owned company, which has suffered from declining demand for rifles and handguns, is likely to miss a payment to bondholders. The gun maker faces a $10.9 million payment to bondholders Nov. 17, according to a filing on Wednesday with the U.S. Securities and Exchange Commission. If Colt skips the payment, it will enter a 30-day grace period, but without payment by Dec. 15 it will be in default and bondholders can demand immediate, full payment. Colt, which is controlled by investment firm Sciens Capital Management LLC, had $248.8 million outstanding on the bonds as of June 29. The bonds were trading in the mid-30 cents on the dollar—deep in distressed territory—on Thursday. Sciens declined to comment. Colt, which has been manufacturing firearms and supplying the U.S. military since the mid-1800s, isn’t alone in grappling with weak demand, especially for sporting rifles. Smith & Wesson Holding Corp. reported a 46% drop in operating income for its latest quarter. And Cerberus Capital Management LP-owned Freedom Group, which owns the Remington Arms and Bushmaster brands, was recently downgraded by Moody’s , which cited pressure on earnings and revenue amid demand volatility. Colt faces a $10.9 million payment to bondholders Nov. 17. ENLARGE Colt faces a $10.9 million payment to bondholders Nov. 17. Zuma Press . Even if Colt is able to pay bondholders in time, it is “probable” that Colt will violate a $48.1 million term-loan agreement by Dec. 31 without an amendment or alternate financing, the company said. It added that it is in discussions with existing and potential lenders over the situation. Lenders amended the agreement earlier this year, allowing Colt to skip three $1.9 million payments through March 2015. Colt, which is based in West Hartford, Conn., and Kitchener, Ontario, declined to provide any additional information Thursday. The company revealed its financial woes in Wednesday’s SEC filing to explain why it couldn’t file a quarterly financial report on time. Colt said it is down to $1 million in availability on its revolving credit facility and is still “working through accounting considerations and liquidity concerns.” The gun maker said it expects to report a 50% to 60% decline in operating income for the quarter ended Sept. 28, compared with the year-earlier period. It also expects to swing to an operating loss for the first nine months of the year. Colt blamed its financial troubles on market trends including declining consumer sales of rifles and handguns and delays in sales to the U.S. government. Colt was cut deep into junk territory by both Moody’s and Standard & Poor’s in recent months. Each rating firm maintains a negative outlook on the company. In the event of a default, S&P said in September that it expects bondholders to recover no more than 10% on the debt. |
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[#3]
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality.
Most if not all firearm manufacturers are facing the same problem. |
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[#4]
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[#6]
It's a miracle that Colt has survived this far. Colt has misjudged the market from its decision to not restart production of its single action revolvers after WWII until the present day.
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[#7]
It's rough, but I'm sure they will be alright. Maybe we will see NIB 6920s for like $699
I hope they get their QC in shape and continue to put out quality products. I am a true Colt fanboi and always will be, but there have been several threads with issues in the Tech forum lately, like the fella that just got a new 6920 with a completely missing Carrier Key fastener It's always darkest before the dawn |
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[#8]
Colt has been late to quite a few industry challenges. Being run by anti-gun liberals for decades didn't help much. I'll give them credit for firing the sleeze ball and bringing in Keys.
Were that Colt brought back the "snakes" they would be completely priced out of the market and using designs that are difficult to modernize. And they have now had their 3rd CEO in 4 years. William M. Keys (before 2010) Gerald R. Dinkel (2010-2013) Dennis Veilleux (2013+) I respect Dennis, but, I don't know if he has the balls to move the company. And if Colt is run by UAW trash, I could care less. Sell the name to Uberti and get it over with. |
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[#9]
Most of Colt's current issues come from corporate management. As a result, they've got lots of unnecessary debt with nothing to show for it.
Over the next several years, Colt Defense went through the private equity leverage wringer. Sciens Capital and its affiliates loaded the company with debt while taking out cash in the form of “distributions” and “advisory fees.” The 2005 SEC filing shows payouts totaling $40 million over the two prior years—a significant amount for a company in such fragile financial health. In 2006, another SEC filing shows, the company redeemed “members’ equity” worth $41 million. In 2007, Colt Defense agreed to borrow $150 million in a “leveraged recapitalization” that featured distributions to “members” of $131 million. In 2009 it borrowed an additional $250 million, while multimillion-dollar payouts continued. For 2010, Colt Defense had sales of $176 million—more than double what they were in 2004—but registered an $11 million loss. View Quote After borrowing an additional $50 million, Colt Defense paid $60.5 million to acquire Colt’s Manufacturing. In effect, the feuding Zilkha-Rigas team paid itself, along with other investors, to put the civilian arms company back together with the defense branch. In the process the merged company’s debt rose to more than $300 million, and its balance sheet showed a deficit of $137 million. View Quote Read the whole thing. |
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[#10]
The gun maker faces a $10.9 million payment to bondholders Nov. 17, according to a filing on Wednesday with the U.S. Securities and Exchange Commission. If Colt skips the payment, it will enter a 30-day grace period, but without payment by Dec. 15 it will be in default and bondholders can demand immediate, full payment. View Quote Well, it's Nov. 17th ... hoping they made it. |
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[#11]
colt MFG is not that bad of shape
colt defense is the one struggling. hut not doomed word from colt is, the media is making it sound a lot worse than it is and gun rags and assholes are trying to throw them under the bus instead of supporting them it not as bad or out as control as it seem. and that is what I am told from colt |
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[#12]
Quoted:
It's rough, but I'm sure they will be alright. Maybe we will see NIB 6920s for like $699 I hope they get their QC in shape and continue to put out quality products. I am a true Colt fanboi and always will be, but there have been several threads with issues in the Tech forum lately, like the fella that just got a new 6920 with a completely missing Carrier Key fastener It's always darkest before the dawn View Quote QC issues? you saw a few. you know how many guns they make a month? if BCM had the as many complaints as you see in her lately. that would be massive for them; for a company that turns out 10,000 guns a month at peak, those few you saw hardly is enough to say "they have QC problems" |
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[#13]
Quoted:
Well, it's Nov. 17th ... hoping they made it. View Quote View All Quotes View All Quotes Quoted:
The gun maker faces a $10.9 million payment to bondholders Nov. 17, according to a filing on Wednesday with the U.S. Securities and Exchange Commission. If Colt skips the payment, it will enter a 30-day grace period, but without payment by Dec. 15 it will be in default and bondholders can demand immediate, full payment. Well, it's Nov. 17th ... hoping they made it. Other thread said they slid in under the wire. |
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[#14]
From the GD thread:
Quoted:
Colt Defense LLC Enters into New $70 Million Senior Secured Term Loan Facility BY BUSINESS WIRE NOVEMBER 17, 2014 05:35 PM EST Colt Defense LLC (the “Company”) announced today that it has entered into a new $70 million senior secured term loan facility with Morgan Stanley Senior Funding Inc. (the “MS Facility”). Proceeds from the MS Facility will be used to repay all amounts outstanding under the Company’s existing term loan agreement dated as of July 12, 2013 and provide additional liquidity, including to allow the Company to make the $10.9 million interest payment due November 17, 2014 under the indenture governing its existing senior notes. The credit agreement governing the MS Facility (i) does not contain financial covenants or amortization provisions similar to those provisions in the Company’s existing term loan agreement; (ii) provides for the accrual of interest on an 8% cash and 2% payment-in-kind basis; and (iii) will mature no later than August 15, 2018 subject to the satisfaction of certain conditions. The lenders under the Company’s existing credit agreement dated as of September 29, 2011 (the “ABL Credit Agreement”) have also agreed to amendments to the ABL Credit Agreement necessary for the Company to enter into the MS Facility. The Company believes that the MS Facility will provide it with the time and flexibility necessary to support its medium and long term objectives. About Colt Defense LLC Colt is one of the world’s oldest and most renowned designers, developers and manufacturers of firearms for military, personal defense and recreational purposes. Our founder, Samuel Colt, patented the first commercially successful revolving cylinder firearm in 1836 and, in 1847, began supplying U.S. and international military customers with firearms that have set the standards of their era. The “Colt” name and trademarks stand for quality, reliability, accuracy and the assurance of customer satisfaction. Our brand and global footprint position us for long-term growth in a world market that offers continued opportunities in all of our sales channels: military, law enforcement and commercial. We operate from facilities located in West Hartford, Connecticut and Kitchener, Ontario, Canada. More information on Colt Defense LLC is available at www.colt.com and www.coltcanada.com. http://www.sys-con.com/node/3231505 The short version: they borrowed money to pay the interest to the other creditor. They will survive until August 2015. View Quote |
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[#15]
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[#16]
http://www.hartfordbusiness.com/article/20141118/NEWS01/141119918/1004?utm_source=enews&utm_medium=HBJ%2BToday&utm_campaign=Tuesday
Colt finds lender, won't miss interest payment |
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[#17]
Quoted:
QC issues? you saw a few. you know how many guns they make a month? if BCM had the as many complaints as you see in her lately. that would be massive for them; for a company that turns out 10,000 guns a month at peak, those few you saw hardly is enough to say "they have QC problems" View Quote View All Quotes View All Quotes Quoted:
Quoted:
It's rough, but I'm sure they will be alright. Maybe we will see NIB 6920s for like $699 I hope they get their QC in shape and continue to put out quality products. I am a true Colt fanboi and always will be, but there have been several threads with issues in the Tech forum lately, like the fella that just got a new 6920 with a completely missing Carrier Key fastener It's always darkest before the dawn QC issues? you saw a few. you know how many guns they make a month? if BCM had the as many complaints as you see in her lately. that would be massive for them; for a company that turns out 10,000 guns a month at peak, those few you saw hardly is enough to say "they have QC problems" Haha! I quite literally never said "they have QC problems". Quoting is supposed to be for quoting. In each of those several cases, Colt busted their butts to right them. It's not bad at all considering how many firearms they put out. No need to be so defensive for Colt. No one here (especially me) is talking bad about them. I will be a lifelong Colt owner/supporter. |
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[#18]
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[#19]
Whether they're temporarily solvent, on the edge of imploding or solid as all get out, it's a good time to buy a Colt and invest in an American manufacturing institution. I also suspect that pricing will only get better.
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[#20]
Quoted:
Most of Colt's current issues come from corporate management. As a result, they've got lots of unnecessary debt with nothing to show for it. Read the whole thing. View Quote View All Quotes View All Quotes Quoted:
Most of Colt's current issues come from corporate management. As a result, they've got lots of unnecessary debt with nothing to show for it. Over the next several years, Colt Defense went through the private equity leverage wringer. Sciens Capital and its affiliates loaded the company with debt while taking out cash in the form of “distributions” and “advisory fees.” The 2005 SEC filing shows payouts totaling $40 million over the two prior years—a significant amount for a company in such fragile financial health. In 2006, another SEC filing shows, the company redeemed “members’ equity” worth $41 million. In 2007, Colt Defense agreed to borrow $150 million in a “leveraged recapitalization” that featured distributions to “members” of $131 million. In 2009 it borrowed an additional $250 million, while multimillion-dollar payouts continued. For 2010, Colt Defense had sales of $176 million—more than double what they were in 2004—but registered an $11 million loss. After borrowing an additional $50 million, Colt Defense paid $60.5 million to acquire Colt’s Manufacturing. In effect, the feuding Zilkha-Rigas team paid itself, along with other investors, to put the civilian arms company back together with the defense branch. In the process the merged company’s debt rose to more than $300 million, and its balance sheet showed a deficit of $137 million. Read the whole thing. Leveraged recapitalization is just another word for financial rape. So yeah, they were raped by private equity that sucked all the capital out of the company to line their own pockets, knowing full well that they were going to drive the company into default and bankruptcy. Venture capitalists do this shit all the time to companies. |
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[#21]
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[#22]
Quoted:
This is the corporate equivalent of a payday lender. View Quote View All Quotes View All Quotes Quoted:
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http://www.hartfordbusiness.com/article/20141118/NEWS01/141119918/1004?utm_source=enews&utm_medium=HBJ%2BToday&utm_campaign=Tuesday Colt finds lender, won't miss interest payment This is the corporate equivalent of a payday lender. $70 million bucks is a heck of a car title loan. |
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[#24]
Originally Posted By jagdkommando
Borrowing money to pay interest on a loan. yeah, kind of like the US Treasury!!! |
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[#25]
On Wednesday, Colt finally filed their 3rd Quarter 10Q with the SEC. Now they are predicting that they won't be able to make their loan payment on May 15, 2015. They've already lost over $28 million in the first nine months of this year.
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[#26]
Quoted:
On Wednesday, Colt finally filed their 3rd Quarter 10Q with the SEC. Now they are predicting that they won't be able to make their loan payment on May 15, 2015. They've already lost over $28 million in the first nine months of this year. View Quote Boy, running with the big dogs is a whole 'nother race. |
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[#27]
I like COLT but they seem to file for bankruptcy as part of their business model . If they had a business person to run it would be a great company but they always seem to do something to mess it up . They have the OLD NAME in the firearms business but? That's why their are 100 plus other manufactures making AR15'S -
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[#28]
Quoted:
I like COLT but they seem to file for bankruptcy as part of their business model . If they had a business person to run it would be a great company but they always seem to do something to mess it up . They have the OLD NAME in the firearms business but? That's why their are 100 plus other manufactures making AR15'S - View Quote Wait, how in the round world do you have Colt's name for a screen-name ? |
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[#29]
Quoted:
Wait, how in the round world do you have Colt's name for a screen-name ? View Quote View All Quotes View All Quotes Quoted:
Quoted:
I like COLT but they seem to file for bankruptcy as part of their business model . If they had a business person to run it would be a great company but they always seem to do something to mess it up . They have the OLD NAME in the firearms business but? That's why their are 100 plus other manufactures making AR15'S - Wait, how in the round world do you have Colt's name for a screen-name ? Kind of funny HUH! |
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[#30]
Quoted:
Quoted:
Quoted:
I like COLT but they seem to file for bankruptcy as part of their business model . If they had a business person to run it would be a great company but they always seem to do something to mess it up . They have the OLD NAME in the firearms business but? That's why their are 100 plus other manufactures making AR15'S - Wait, how in the round world do you have Colt's name for a screen-name ? Kind of funny HUH! Kind of ironic, you know, them bein' in a pickle kind of ironic. |
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[#31]
Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. View Quote For COLT, I really hope they make the changes that are, evidently, now REQUIRED. I love their products and own more than a few....say what you will about their past...but it would be a true loss of a great American firearms company should COLT dissolve. Would be a real shame. |
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[#33]
Quoted:
For COLT, I really hope they make the changes that are, evidently, now REQUIRED. I love their products and own more than a few....say what you will about their past...but it would be a true loss of a great American firearms company should COLT dissolve. Would be a real shame. View Quote View All Quotes View All Quotes Quoted:
Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. For COLT, I really hope they make the changes that are, evidently, now REQUIRED. I love their products and own more than a few....say what you will about their past...but it would be a true loss of a great American firearms company should COLT dissolve. Would be a real shame. IT'S been sold before and probably again , someone pick it up cheap just like smith wesson . |
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[#34]
Quoted:
Leveraged recapitalization is just another word for financial rape. So yeah, they were raped by private equity that sucked all the capital out of the company to line their own pockets, knowing full well that they were going to drive the company into default and bankruptcy. Venture capitalists do this shit all the time to companies. View Quote It's not rape when they beg for it. I'm tired of reading this ridiculous anti-lender nonsense that has become cliche on the www. For every bad lender there are legions of bad borrowers walking away from their contractual obligations. Don't like lenders? DON'T BORROW FROM THEM. It's really that simply. They have no power over you unless you hand it to them. In Colt's case, it's their own bad decisions that got them where they are today, not their creditors. Let's put the blame where it actually belongs, not upon a company that just bailed those idiots at colt out. |
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[#35]
Quoted:
It's not rape when they beg for it. I'm tired of reading this ridiculous anti-lender nonsense that has become cliche on the www. For every bad lender there are legions of bad borrowers walking away from their contractual obligations. Don't like lenders? DON'T BORROW FROM THEM. It's really that simply. They have no power over you unless you hand it to them. In Colt's case, it's their own bad decisions that got them where they are today, not their creditors. Let's put the blame where it actually belongs, not upon a company that just bailed those idiots at colt out. View Quote View All Quotes View All Quotes Quoted:
Quoted:
Leveraged recapitalization is just another word for financial rape. So yeah, they were raped by private equity that sucked all the capital out of the company to line their own pockets, knowing full well that they were going to drive the company into default and bankruptcy. Venture capitalists do this shit all the time to companies. It's not rape when they beg for it. I'm tired of reading this ridiculous anti-lender nonsense that has become cliche on the www. For every bad lender there are legions of bad borrowers walking away from their contractual obligations. Don't like lenders? DON'T BORROW FROM THEM. It's really that simply. They have no power over you unless you hand it to them. In Colt's case, it's their own bad decisions that got them where they are today, not their creditors. Let's put the blame where it actually belongs, not upon a company that just bailed those idiots at colt out. No one said anything about the lenders in this case. It's the owners that put Colt through the wringer to line shareholders pockets in the short term at the expense of the long term financial stability of the company. The lenders don't have much to do with it beyond having the poor judgement to give Colt a loan that they might not be able to pay off. |
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[#37]
Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. View Quote Don't they outsource small parts like LPK's and such? I agree though, they need to take a better position to not just be a weapon maker and diversify. I love Colt stuff and always depended on their products, it'll be a sad thing to see them swirl the bowl so to speak. |
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[#38]
Quoted:
Don't they outsource small parts like LPK's and such? I agree though, they need to take a better position to not just be a weapon maker and diversify. I love Colt stuff and always depended on their products, it'll be a sad thing to see them swirl the bowl so to speak. View Quote View All Quotes View All Quotes Quoted:
Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. Don't they outsource small parts like LPK's and such? I agree though, they need to take a better position to not just be a weapon maker and diversify. I love Colt stuff and always depended on their products, it'll be a sad thing to see them swirl the bowl so to speak. Im not sure what they outsource but alot of other companies outsource their stuff to. |
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[#39]
Quoted:
Im not sure what they outsource but alot of other companies outsource their stuff to. View Quote View All Quotes View All Quotes Quoted:
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Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. Don't they outsource small parts like LPK's and such? I agree though, they need to take a better position to not just be a weapon maker and diversify. I love Colt stuff and always depended on their products, it'll be a sad thing to see them swirl the bowl so to speak. Im not sure what they outsource but alot of other companies outsource their stuff to. I know, didn't mean anything bad by it just that for some Colt LPK's or such might not be that big a deal as sole source things. Aka, probably wouldn't make a difference to informed buyers. |
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[#40]
Quoted:
Im not sure what they outsource but alot of other companies outsource their stuff to. View Quote View All Quotes View All Quotes Quoted:
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Quoted:
They can still recover, they just have to lower their prices to move product, get into the parts selling business, like lpk's, stripped lowers, etc. and cut fat at the company level, as long as they dont cut quality. Most if not all firearm manufacturers are facing the same problem. Don't they outsource small parts like LPK's and such? I agree though, they need to take a better position to not just be a weapon maker and diversify. I love Colt stuff and always depended on their products, it'll be a sad thing to see them swirl the bowl so to speak. Im not sure what they outsource but alot of other companies outsource their stuff to. Last I heard is Colt only machines barrels and lowers. Colt Canada is a different story they make everything in house. |
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