Freedom Group, the parent of Remington, Bushmaster and other gun and ammunition brands, reported revenues in the fourth quarter declined 2.4 percent to $247.7 million.
Sales of Firearms were down 9.2 percent to $133.8 million while Ammunition increased 7.3 percent to $99.4 million. All Other sales were down 24.5 percent to $14.5 million.
According to its 10K filing, Freedom Group incurred a net loss attributable to controlling interest in the period of $34.6 million against a profit of $6.9 million a year ago. Gross profits improved 2.5 percent to $83.1 million.
For the year ended Dec. 31, revenues grew 36.1 percent to $1.27 billion. Net income reached $59.7 million, up nearly eightfold from $7.4 million the prior year. Adjusted EBITDA jumped 51.1 percent to $236.4 million.
Results were largely in line with a forecast given on Dec. 9.
Firearm’s sales jumped 34.3 percent to $739.7 million. The gains were led by a $124.1 million increase in centerfire rifle sales, a gain of $23.9 million in shotgun sales, $19.6 million in handgun sales, and $21.2 million in other firearms products. Its other Firearms brands include Marlin, Parker, H&R and Dakota Arms.
Ammunition sales grew 31.6 percent to 104.8 million. Sales of centerfire ammunition increased $42.7 million, shotshell ammunition increased $28.2 million, rimfire ammunition increased $16.4 million, and other product lines increased $17.5 million.
Net sales in in All Other businesses grew 86.6 percent to $92.0 million, led by a gain of $38.6 million in the various accessories businesses, due in part to recent acquisitions, as well as increased sales of $4.1 million in the apparel businesses. Accessories/Other includes the apparel brands of Mountain Khakis, 1816 and Dublin Dog as well as on- and off-gun accessories and firearm cleaning supplies through the AAC, TAPCO, Storm Lake and Ultimate Firearms brands. The company acquired certain assets of Storm Lake in August.
Gross margins in the year improved to 35.0 percent from 33.7 percent due to sales gains due to higher sales and favorable pricing. Other expenses were reduced to 24.5 percent from 27.5 percent.
The 10K filing didn’t directly address fourth-quarter results but Freedom Group said that while the industry had been seeing strong demand for firearms and ammunition products, “In late 2013, we began to see sales returning to more normalized levels in some categories, although demand is still above historical levels.”
The nation's largest manufacturer of firearms and ammunition said consumer concern over more restrictive governmental regulation on the federal, state and local levels has contributed to the increase in demand, but that it believes other factors are also driving growth across its product line.
“For instance, our industry is experiencing increased interest in recreational and shooting sports, an increasing number of female shooters and a greater focus on home and self-defense.”
Cerberus Capital, which owns 93.3 percent of Freedom Group’s stock, for the past year has been trying to unload its stake following the December 2012 Newtown elementary school massacre.