Smith and Wesson announced that they have acquired Savage arms in a 160 million dollar cash and stock deal.

What do you think this means? Do you see Savage arms flourishing under S&W ownership or do you see another Thompson Center situation? As a huge fan of Savage firearms, I would like to see the company continue close to what it has been, or better, but I fear that it will not be a priority in the S&W lineup. Or even worse be relegated to an economy line that becomes known for low quality.

I wish I could say that I had more faith in Smith and Wesson's intentions with this, but I just have too many doubts.

You and me both.

It’s already evolved into an economy line for the most part. Can’t argue they typically shoot very well out of the box, but fit and finish has never been their priority IMO.

Yote according to that article (and another that I read) they acquired Savage for 160 million and the annual NET sales of Savage are 160 million. Am I the only one who thinks that seems like a steal to buy a company for just one years worth of annual NET sales. Am I missing something?

I can see no good coming from the merger, Smith and Wesson caved in once before.

Has to be a misprint

Well as you said, that's NET sales. Net sales does not include things such as materials, wages and other operating costs or interest, taxes, amortization, depreciation, etc. A closer number would be EBITDAS, ( which still doesn't include taxes, deprecation, etc. but does include other costs) and for Savage is 18 million.... much less than the 160 mil.

Also, JDH Capital, the company that sold Savage, through the sale will become the single largest shareholder of S&W, which should give them considerable say moving forward.

I have not read much about this yet..... but it MAY make strategic sense for Savage..... with increases in material costs due to tariffs, fuel prices and inflation, combining the two companies could potentially considerably lower those costs due to economies of scale.....

Not a misprint, and very close in cost to what Savage sold for the last time it was sold, in 2019 by Vista for $170 mil.

I think you guys may be confusing net sales with net profit.......

No I am not confusing Net sales with Net profit, I do know the difference. But it still seems off to me. However, I have not looked into Savage's numbers, maybe their cost of production is a lot higher than I would imagine.

On Wall Street, revenue is generally viewed as almost as important as earnings. And chances are, S&W sees a way to improve both.
I would expect a price hike for Savage Arms guns in the near future.

What is gross sales then? I've typically heard "gross" being everything brought in and net being profit.

Gross sales is simply sales before things such as returns and discounts.

Net sales is the total of sales minus those returns and discounts.

EBIT is Earnings Before Interest and Tax.

EBITDAS is Earnings before Interest, Tax, Depreciations, Amortization and Stock-based compensation.

Net Income is net sales after removing cost of sales, operating expenses, other expenses, interest, and taxes....

Savage was not a publicly traded company so financials for it are not available. But, per the articles on the merger, net sales were 160 mil and EBITDAS was 18 mil...... (which does not include interest, taxes, depreciation, etc.) which means their expenses were at least around 90% or more of net sales.......

Smith and wesson has went downhill over the last few years in my opinion. Hope they dont ruin savage.

I'm fairly concerned. I liked savage how it was... might have to go buy out all the savages in the gun shop in case they ruin them

Ruger is a much bigger loss than savage imo. Someone explain to me why they like savage? I've found them to be ugly and cheap feeling, they do shoot okay.

...

I love my savage smokless muzzloader and my savage 62 .22.

The .22 is a cheap blow back gun. Is light and narrow and very accurate. I have other much nicer .22s but I grab it when I need one. I like value and bought it for $89 28 years ago. I think i got my money's worth. The smokeless muzzloader was the only production made gun I know of. Easy to clean increased velocity and less recoil than the heavy charges.

I never liked the feel of their bolt guns but the ones I have shot shot very well often better than much more expensive guns. So they get the job done at a lower price.

Their Smokeless muzzleloader was great, got one for my dad and it has been excellent. I grabbed Woodsman arms smokeless based on how much I liked my dads.