Freedom Group, Inc., which manufactures and markets firearms under the Remington, Marlin, Bushmaster, DPMS, H&R, L.C. Smith, Parker, Dakota Arms, Miller Arms, and Nesika brand names, reported in an SEC filing that overall FGI sales increased 43.1% to $235.1 million from $164.3 million for the second quarter ended June 30. 


Gross margins rose 700 basis points to 36.3% of sales, compared to 29.3% of sales in the year-ago period.  Net income jumped over 500% to $19.7 million for the period, compared to $3.2 million in Q2 2008.

Firearms sales jumped 47.2% to $149.3 million for the second quarter. Centerfire rifle sales increased 50.6%, as compared to the prior-year period, primarily due to an increase of $30.9 million from higher sales volumes of Bushmaster and DPMS branded modern sporting rifles and an increase of $2.1 million due to sales of newly launched Remington branded modern sporting rifles. Shotgun sales increased 40.5% and Rimfire rifle sales increased 34.1% versus Q2 last year.

Ammunition sales for the second quarter were $81.3 million, an increase of 38.7% from the prior-year period.  Centerfire ammunition sales increased 42.9% from the year-ago quarter, which FGI attributed to strong market demand for rifle and pistol ammunition combined with volume growth across most other product categories. Rimfire ammunition sales increased 44.3% versus Q2 2008, primarily due to increased volume associated with additional production capacity within these product categories. Shotshell ammunition sales increased 25.5%, compared to the prior-year period, primarily due to an increased allocation of production capacity to higher margin products.


In other news, Cerberus Capital Managment, a private equity firm confirmed last week that it would take Freedom Group public. The private equity firm, which is perhaps best known for its ill-fated acquisitions of Chrysler LLC and GMAC LLC, plans to raise as much as $200 million in the IPO.