S-1 1 a2194443zs-1.htm S-1

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As filed with the Securities and Exchange Commission on October 20, 2009

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FREEDOM GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  3484
(Primary Standard Industrial
Classification Code number)
  26-0174491
(I.R.S. Employer
Identification Number)

870 Remington Drive
Madison, North Carolina 27025-1776
(336) 548-8700

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Fredric E. Roth, Jr.
General Counsel and Secretary
Freedom Group, Inc.
870 Remington Drive P.O. Box 1776
Madison, North Carolina 27025-1776
(336) 548-8700
(Name, address, including zip code and telephone number, including area code, of agent for service)


Please address a copy of all communications to:

Arnold B. Peinado, III, Esq.
Roland Hlawaty, Esq.
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, NY 10005
(212) 530-5000

 

William J. Miller, Esq.
Jonathan A. Schaffzin, Esq.
Cahill Gordon & Reindel LLP
80 Pine Street
New York, NY 10005
(212) 701-3000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

                 If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. o

                 If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

                 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a smaller reporting company)
  Smaller reporting company o

CALCULATION OF REGISTRATION FEE

 
Title of each class of Securities
to be registered

  Proposed maximum
aggregate offering
price(1)(2)

  Amount of
Registration fee

 
Common Stock, $0.01 par value   $200,000,000   $11,160
 
(1)
Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act.

(2)
Includes shares which may be sold pursuant to the underwriters' over-allotment option.

                 The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated            , 2009

PROSPECTUS

            Shares

GRAPHIC

Common Stock



              This is Freedom Group, Inc.'s initial public offering. We are selling            shares of our common stock and the selling stockholders are selling            shares of our common stock. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders.

              We expect the public offering price to be between $            and $            per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on the            under the symbol "            ."

              Investing in the common stock involves risks that are described in the "Risk Factors" section beginning on page 19 of this prospectus.



 
 
Per Share
 
Total
Public offering price   $   $
Underwriting discount   $   $
Proceeds, before expenses, to us   $   $
Proceeds, before expenses, to the selling stockholders   $   $

              The underwriters may also purchase up to an additional            shares from us, and up to an additional            shares from the selling stockholders, at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments, if any.

              Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

              The shares will be ready for delivery on or about            , 2009.

The date of this prospectus is            , 2009.


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

Risk Factors

  19

Special Note Regarding Forward-Looking Statements

  35

Use of Proceeds

  38

Dividend Policy

  38

Capitalization

  39

Dilution

  42

Selected Historical Consolidated Financial Data

  44

Unaudited Pro Forma Condensed Consolidated Financial Information

  46

Management's Discussion and Analysis of Financial Condition and Results of Operations

  55

Business

  83

Management

  107

Compensation Discussion and Analysis

  112

Certain Relationships and Related Person Transactions

  138

Principal and Selling Stockholders

  141

Description of Certain Indebtedness

  144

Description of Capital Stock

  147

Shares Eligible for Future Sale

  151

Certain United States Federal Income and Estate Tax Considerations for Non-U.S. Holders

  153

Underwriting

  157

Legal Matters

  162

Experts

  162

Where You Can Find More Information

  162

Index to Financial Statements

  F-1

              You should rely only on the information contained in this prospectus or contained in any free writing prospectus filed with the Securities and Exchange Commission (the "SEC"). Neither we, the selling stockholders nor the underwriters have authorized anyone to provide you with additional information or information different from that contained in this prospectus or in any free writing prospectus filed with the Securities and Exchange Commission. We and the selling stockholders are offering to sell, and seeking offers to buy, our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.


MARKET AND INDUSTRY DATA

              Market and industry data used throughout this prospectus, including information relating to our relative position in the shooting sports industry, is based on the good faith estimates of management, which in turn are based upon management's review of internal surveys, independent industry surveys and publications and other publicly available information, including reports and information prepared by the Sports Marketing Research Group ("SMRG"), the National Shooting Sports Foundation ("NSSF"), the National Rifle Association ("NRA"), the Annual Firearms Manufacturing and Export Report ("AFMER") and Jane's Strategic Advisory Services, in each case with respect to 2007 data, and SportsOneSource, with respect to 2008 data. Market share information is subject to change, however, and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any statistical survey of market share. In addition, customer preferences can and do change and the definition of the relevant market is a matter of judgment and analysis. As a result, you should be aware that market share, ranking and other similar information set

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forth in this prospectus and estimates and beliefs based on such data, may not be reliable. By including such market and industry data and information, we do not undertake a duty to provide such data and information in the future or to update such data and information if it is updated.


TRADEMARKS AND TRADE NAMES

              We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. In addition, our name, logo and website name and address are our service marks or trademarks. Each trademark, trade name or service mark by any other company appearing in this prospectus belongs to its holder. Some of the more important trademarks that we use include Remington®, Peters®, UMC®, Premier®, Express®, Ultra-Mag™, Core-Lokt®, Core-Lokt Ultra™, Fireball™, Model 870™, Model 1100™, Model 11-87™, Model 11-87 Super Magnum™, Model 700™, EtronX®, Model 700 Etron X™, Model Seven™, Model 7400™, Model 7600™, Model 597™, Model 300™, M-27™, ARMORLOKT®, Marlin®, H&R 1871®, Parker®, LC Smith®, Bushmaster®, DPMS™, Panther Arms®, EOTAC™, Dakota™, Miller Arms®, Nesika®, RemOil®, Brite-Bore™ and RemAction Cleaner™.


EBITDA

              We use the term EBITDA throughout this prospectus. EBITDA is not a measure of performance defined in accordance with generally accepted accounting principles in the United States ("GAAP"). We use EBITDA as a supplement to our GAAP results in evaluating certain aspects of our business, as described below.

              EBITDA is included in this prospectus because it is a primary component of the fixed charge coverage ratio used in covenants under the indenture governing the Notes (as defined under "Prospectus Summary—Recent Transactions") and is a basis upon which our management assesses performance. EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it excludes items that we do not believe reflect our core operating performance.

              We believe that EBITDA is useful to investors in evaluating our performance because it is a commonly used financial metric for measuring and comparing the operating performance of companies in our industry. We believe that the disclosure of EBITDA offers an additional financial metric that, when coupled with the GAAP results and the reconciliation to GAAP results, provides a more complete understanding of our results of operations and the factors and trends affecting our business. Further, we believe the inclusion of EBITDA is appropriate to provide additional information to investors about the calculation of certain covenants in the indenture governing the Notes.

              EBITDA should not be considered as an alternative to net income (loss), as an indicator of our performance, as an alternative to net cash provided by operating activities, as a measure of liquidity, or as an alternative to any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as EBITDA. Although we believe that EBITDA may make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations:

    (i)
    other companies in our industry may define EBITDA differently than we do and, as a result, it may not be comparable to similarly titled measures used by other companies in our industry; and

    (ii)
    it excludes financial information that some may consider important in evaluating our performance.

              We compensate for these limitations by providing disclosure of the differences between EBITDA and GAAP results, including providing a reconciliation of EBITDA to GAAP results, to enable investors to perform their own analysis of our operating results. For a reconciliation of

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consolidated EBITDA to its most directly comparable GAAP measure, net income (loss), see footnote 5 in "Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Data."

              Because of these limitations, EBITDA should not be considered as a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by relying primarily on our GAAP results and using EBITDA as a supplemental financial metric for evaluation of our operating performance. See our consolidated statements of operations and consolidated statements of cash flows in our consolidated financial statements included elsewhere in this prospectus.

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PROSPECTUS SUMMARY

              The following summary is qualified in its entirety by, and should be read together with, the more detailed information and financial statements and related notes thereto appearing elsewhere in this prospectus. You should read the entire prospectus carefully, particularly the "Risk Factors" beginning on page 19 and our consolidated financial statements and the related notes thereto. In this prospectus, unless otherwise indicated or the context otherwise requires, references to (1) the terms "we," "us," "our," the "Company" and "Freedom Group" refer to Freedom Group, Inc. and its subsidiaries on a consolidated basis, (2) the term "FGI" refers to Freedom Group, Inc., (3) the term "Remington" refers to Remington Arms Company, Inc. and its direct and indirect subsidiaries, (4) the terms "Bushmaster" and "BFI" refer to Bushmaster Firearms International, LLC and its direct and indirect subsidiaries, (5) the term "Marlin" refers to the Marlin Firearms Company, (6) the term "DPMS" refers to DPMS Firearms LLC, (7) the term "EOTAC" refers to EOTAC, LLC, (8) the term "INTC" refers to INTC USA, LLC, (9) the term "Precision Arms Center" refers to Precision Arms Center, LLC, (formerly known as Bushmaster Custom Shop, LLC), (10) the term "Dakota Arms" refers to Dakota Arms, LLC, (11) the term "CCM" refers only to Cerberus Capital Management L.P., (12) the term "Cerberus" refers to Cerberus Capital Management, L.P., along with its affiliates, (13) the term "Remington Acquisition" refers to our acquisition of 100% of the shares of RACI Holding, Inc., the then parent company of Remington, on May 31, 2007, (14) the term "Marlin Acquisition" refers to Remington's acquisition of 100% of the shares of Marlin and its subsidiary, H&R 1871, LLC, on January 28, 2008 and (15) the term "Dakota Acquisition" refers to our acquisition of certain assets of Dakota Arms on June 5, 2009. The term "Refinancings" has the meaning given to it in "—Recent Transactions" and the term "Recapitalization" has the meaning given to it in "—The Offering." The Refinancings, the Marlin Acquisition, the Dakota Acquisition, the Recapitalization and the offering referred to in this prospectus are referred to collectively herein as the "Transactions." References to EBITDA are to EBITDA as defined in footnote 5 in "—Summary Historical and Pro Forma Consolidated Financial Data." References to "preferred stock" are to our Series A preferred stock.


Our Company

              We are one of the leading firearms, ammunition and related products companies in the world, with #1 commercial market positions across all of our major product categories in the United States, the largest firearms and ammunition market globally. We are an innovator, designer, manufacturer and marketer of an increasingly broad product line which services the hunting, shooting sports, law enforcement and military end-markets under some of the most globally recognized brands including Remington, Marlin, Bushmaster, and DPMS, among others. With a history dating back to 1816, we are America's oldest and largest manufacturer of firearms and ammunition. We believe that our long heritage and reputation for quality have resulted in strong brand recognition and customer loyalty. For example, our Remington brand, which we believe represents an enduring symbol of American values and is trusted and respected by generations of sportsmen, is ranked #2 in brand awareness, second only to Nike among sportsmen according to the SportsOneSource 2009 Brand Index. We believe our scale and product breadth are unmatched within the industry, with approximately 1.1 million long guns and 2.0 billion rounds of ammunition sold during the twelve months ended June 30, 2009. For the twelve months ended June 30, 2009, we generated pro forma net sales and EBITDA of $835.3 million and $150.8 million, respectively.

              We are the only major U.S. manufacturer of both firearms and ammunition, which we believe is a significant competitive advantage and supports our market leadership position. We believe this leadership position across all of our major product categories is evidenced by our #1 U.S. commercial market shares in shotguns, rifles, and ammunition. We estimate that in calendar year 2008 over 85% of our domestic sales came from product categories where we hold the #1 U.S. commercial market share position. We have a focus on innovation that we believe results in category-defining products, strong brand recognition and long-term customer loyalty.

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              The following table details our U.S. commercial market leadership for the major product categories in which we participate.

Categories
  U.S.
Market
Position
  U.S.
Market
Share
  Selected Brands

Firearms

               
 

Shotguns

    #1     31 %

Remington, Marlin, Parker, H&R, L.C. Smith, Dakota Arms

 

Traditional Rifles

    #1     36 %

Remington, Marlin, H&R, Dakota Arms

 

Modern Sporting Rifles

    #1     49 %

Bushmaster, DPMS, Remington

Ammunition

    #1     33 %

Remington, UMC, Dakota


Note:
Based on 2007 Firearms and 2006 Ammunition Market Data from SMRG and AFMER, and excludes law enforcement, international and military sales.

              In addition to our significant commercial business, we sell products to law enforcement, international, government and military end-markets where we already have a strong presence. For example, we have a significant market share in the domestic law enforcement shotgun market and have a leading market share in military sniper rifles. We believe that our increasingly focused law enforcement and global military products divisions will increase our presence in the law enforcement and defense markets beyond our existing customers, which include the Texas Department of Public Safety, Los Angeles County Sheriff's Department, Los Angeles Police Department, the California Highway Patrol, the Federal Law Enforcement Training Center ("FLETC"), the U.S. Department of Defense ("DOD"), the United States Special Operations Command ("SOCOM"), and the United States Secret Service, as well as international governments including Colombia, the Republic of Georgia, Italy, Poland, Malaysia, Mexico, and Oman.

              Today the Freedom Group includes over 10 well-regarded brands, collaborating across all disciplines, from product development to distribution, delivering end-user driven products to the hunting, shooting sports, law enforcement and military end-markets. We have made significant progress in our transition to a customer-focused sales and marketing organization by shifting to a two-tiered sales structure whereby dedicated key account managers sell the full FGI product offering to our top retail accounts while our internal field sales force calls on our network of distributors and dealers. This has allowed us to create a unified customer facing platform capable of selling our entire suite of brands and products across multiple end-markets while providing the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

              Our 11 manufacturing facilities and over 2,700 employees represent the largest domestic manufacturing presence in our industry, enabling us to deliver our products throughout the U.S. and internationally to over 80 countries. In addition, our product leadership and innovation are supported by what we believe to be the industry's only domestic freestanding and dedicated research and development facility. Our customer focused sales force, together with our flexible manufacturing capability and research and development efforts, have resulted in 19 planned new product launches in 2009 and a robust future product pipeline.


Our Products

Firearms

              We design, manufacture and market our firearms primarily under the Remington, Marlin, Bushmaster, DPMS, H&R, L.C. Smith, Parker, Dakota Arms, Miller Arms, and Nesika brand names. Through our diversified portfolio of leading brands, we offer a wide variety of long guns including pump-action shotguns, auto-loading shotguns, side-by-side shotguns, over-and-under shotguns, break-

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action shotguns and a comprehensive variety of centerfire and rimfire rifle types, including custom and precision guns, lever-action rifles, bolt-action rifles, break-action rifles, single-shot rifles, and modern sporting rifles. We also produce components, including uppers, lowers, barrels and spare parts, which enable gun enthusiasts to build and continually upgrade and customize their firearms. Our brand strategy allows us to address a variety of end-user preferences, ranging from hunting and shooting sports to government, military and law enforcement applications, from beginner to accomplished shooters, as well as build strong brand awareness and generate attractive cross-selling opportunities. As the largest firearms manufacturer in the United States, we sold approximately 1.1 million long guns during the twelve months ended June 30, 2009.

              For the twelve months ended June 30, 2009, on a pro forma basis, firearms accounted for $508.3 million in net sales, or 60.9% of our total net sales.

Ammunition

              As the only major supplier of both firearms and ammunition in the United States, we believe our ability to sell ammunition creates a unique competitive advantage within the industry and allows us to solidify and extend our existing long-term relationship with our loyal customer base. Our ammunition product offerings consist of a comprehensive line of sporting ammunition and ammunition reloading components, along with ammunition for the government, military, and law enforcement markets, marketed under the Remington, UMC, and Dakota brand names both domestically and internationally. The NRA estimates 70 to 80 million people in the United States own approximately 250 million firearms, creating a large installed base for our ammunition products. We are the largest manufacturer of commercial ammunition in the United States, and sold approximately 2.0 billion rounds of ammunition during the twelve months ended June 30, 2009.

              We market an extensive line of ammunition products that range from high volume, promotionally priced ammunition products to premium, high performance products that meet the needs of the most demanding hunters and shooters as well as the military and law enforcement users. This is evidenced by the fact that we have developed and/or manufactured more cartridges than any other ammunition manufacturer. We produce over 1,000 SKUs of ammunition across 60 calibers and gauges for use across the entire spectrum of firearms. We also market frangible training ammunition specifically tailored to meet the requirements of law enforcement and military customers. Additionally, we believe our ability to deliver a complete military solution of firearms and ammunition is distinctive.

              Product performance and innovation are core focuses for us and are important differentiators within the industry. We believe we are one of the world's largest producers of centerfire rifle hunting ammunition, and that our Remington Core-Lokt centerfire rifle ammunition is the most widely used. Our Premier STS and Nitro 27 shotshell target loads, viewed as the performance leader in trap, skeet and sporting clays shooting, have won more trophies at the Grand American Trap and World Skeet championship than any other brand.

              For the twelve months ended June 30, 2009, on a pro forma basis, ammunition accounted for $307.4 million in net sales, or 36.8% of our total net sales.

Accessories, Licensing and Other

              We sell a wide variety of branded accessories, including gun care and cleaning products and folding and collectible knives. We believe we are one of the top brands in complete firearm care, including cleaning chemicals, tools, and kits. Our wide range of oil and lubricants include RemOil, Brite-Bore, RemAction Cleaner and Rem-DriLube, which are highly versatile and widely used firearm oils and cleaning products. Through our majority owned joint venture, EOTAC, we market high quality tactical and discreet garments for military, law enforcement and the private sector. In addition, we hold

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a minority ownership stake in INTC, a leading producer of non-toxic premium based centerfire and shotshell projectiles and a leading manufacturer of frangible bullets.

              We also license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines. We offer approximately 3,500 SKUs of licensed product and generate over $110 million in sales for our retail partners. Currently, our trademarks are licensed for use on, among other things, automobiles, sporting and outdoor apparel, caps, gun cases and slings, tree stands, wildlife feeders, sporting dog equipment, air guns, game decoys and calls, hunting and shooting safety and security products, gun safes, and various other nostalgia and novelty goods. We strive to ensure that the quality, image and appeal of these licensed products are consistent with the high-quality nature of our products and brand strength. We believe that these licenses increase the market recognition of our brands, enhance our ability to market our core products, and generate attractive, high margin income. Additionally, we believe there are significant opportunities for our licensed products as we believe consumer preference is continuing to move toward an outdoor lifestyle.

              For the twelve months ended June 30, 2009, on a pro forma basis, all other businesses accounted for $19.6 million in net sales, or 2.3% of our total net sales. Licensing represented $3.4 million in other income during the same period.


Our Industry

              We compete in the global marketplace for firearms, ammunition, accessories and licensed products in over 80 countries. End customers include police departments, domestic and foreign government organizations, including the U.S. military, and consumers, such as sportsmen, hunters, and recreational shooters. Consumer distribution channels are diverse, and include major chain retail stores, major distributors, smaller dealers, gun clubs and ranges.

              Based on data from the NSSF, we estimate that the annual domestic commercial long gun market is approximately $1.1 billion and the commercial ammunition market is approximately $1.0 billion. We estimate total annual purchases of firearms and ammunition by U.S. military and law enforcement are $1.7 billion and $475 million, respectively. Additionally, we believe there are significant opportunities in the international market for our products.

              The long gun market represents a significant variety of firearms, including both shotguns and rifles. The use of these firearms ranges from hunting, to law enforcement and defense, to other shooting sports, such as skeet, trap, sporting clays and target shooting. According to the NSSF, domestic consumer long gun sales (based on excise tax data) have grown at a 5% compounded annual growth rate, or the CAGR, from 2004 to 2007 and at higher rates in 2008 and 2009. Within those numbers, we believe the commercial modern sporting rifle market, in which we believe we are the largest producer, has grown at a 36% CAGR. Further, the NSSF estimates that consumer ammunition sales grew at a 17% CAGR during the same period and at higher rates in 2008 and 2009.

              Our consumers include people of all ages, gender, educational backgrounds and income levels. The NRA estimates 70 to 80 million people in the U.S. own approximately 250 million firearms. This represents a significant installed base that generates a recurring revenue stream for ammunition, parts and accessory sales. In addition, we believe that a number of other developments in the industry are broadening and renewing consumer interest in hunting and shooting sports, including a renewed interest in the outdoors and product offerings designed to introduce new shooters to hunting and shooting.

              We believe the accessories market for our products creates a significant opportunity for revenue growth and enhances the perception of our overall product portfolio. Accessory opportunities range from gun care products and gun parts in our hunting and shooting sports categories to trigger,

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barrel, stock, and grip upgrades, and caliber-changing upper assemblies in the tactical and modern sporting rifle lines.

              We believe that a meaningful percentage of current firearm sales are being made to first time gun purchasers, particularly women. We further believe that the introduction of first time shooters, as well as the renewed interest of many existing shooters, will translate to increased participation across the ever-widening array of shooting sports. In addition, the continued adoption of the modern sporting rifle has led to increased growth in the long gun market, especially with a younger demographic of users and those who like to customize or upgrade their firearms. We view this current increase in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands.


Our Competitive Strengths

              We believe our business model provides a broad and attractive value proposition to our customers and we believe that we are distinguished by the following competitive strengths:

Category-Defining Brands

              We believe our brand names are some of the most globally recognized in the hunting, shooting sports, law enforcement, and military firearm and ammunition end-markets. This recognition is enhanced by our deep rooted philosophy and heritage of investing in the great American outdoors that is actively driven through our partnerships with hunting, shooting, outdoor sports and conservation organizations.

              Built on a legacy of quality and innovation, we believe that the Remington brand represents an enduring symbol of American values and is trusted and respected by generations of sportsmen, lawmen and soldiers. Established in 1816, the Remington brand is ranked #2 in brand awareness, second only to Nike among sportsmen and 8th overall among all sports brands in the SportsOneSource 2009 Brand Index. The brand has been judiciously deployed across virtually every category of our firearms and ammunition. Remington has some of the best-known and longest-selling products in the hunting and shooting sports market, which we believe define their respective categories. For example, the 10 millionth Model 870 pump-action shotgun was produced in April 2009 and we have produced more than 5 million Model 700 bolt-action rifles, which we believe is currently the most widely-distributed rifle in its class.

              The Bushmaster and DPMS brands, established in 1973 and 1986, respectively, represent the largest and second largest designers and suppliers of modern sporting rifles, components and parts for the commercial market, in addition to sales to the law enforcement, military and international markets. Bushmaster was one of the first to introduce modern sporting rifles to the consumer market, a segment which is growing faster than the general firearms industry.

              Our other firearms brands are leaders in their niche markets:

    Marlin—Key producer of lever-action and bolt-action rifles

    Harrington & Richardson—Producer of break-action single-shot rifles and shotguns

    L.C. Smith—Major producer of aspirational side-by-side and over-under shotguns

    Parker—Key producer of aspirational high-end brand of artisanal shotguns

    Dakota Arms—Key producer of aspirational rifles and shotguns often chambered in large calibers

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    Miller Arms—Producer of customized precision single-shot rifles

    Nesika—Producer of precision bolt-action rifles and actions

              Our ammunition brands, including Remington, UMC and Dakota, also enjoy leading market positions, strong brand recognition and generations of customer loyalty. We believe that Remington Core-Lokt centerfire ammunition is the most widely used, and the Premier STS and Nitro 27 target loads have won more trophies at the Grand American Trap and World Skeet championship than any other brand.

              Our EOTAC and INTC joint ventures extend into tactical and discreet clothing and frangible ammunition, respectively.

Leading Market Share Positions

              Our core products are ranked #1 across their respective U.S. commercial product categories.

Categories
  U.S. Market Position   U.S. Market Share  

Firearms

             
 

Shotguns

    #1     31 %
 

Traditional Rifles

    #1     36 %
 

Modern Sporting Rifles

    #1     49 %

Ammunition

    #1     33 %

Note:
Based on SMRG and AFMER data and excludes law enforcement, international and military sales.

Broad Product Portfolio

              We have the broadest firearms, ammunition, components, parts and accessory portfolio in our industry. Our products range in price from entry level firearms under the Harrington & Richardson brand to the aspirational hand-crafted Parker Gun and Dakota brands in addition to our core brands of Remington, Bushmaster, DPMS and Marlin. We are the only company in the United States that is a major supplier of both firearms and ammunition. We further leverage consumer loyalty to our brands by offering components and parts for firearms as well as accessories. We also license our trademarks to a discrete number of third parties that manufacture and market sporting and outdoor products that complement our product lines.

Expertise in Designing Innovative, High-Quality Products

              We focus on providing generations of consumers with the combined advantage of safety and high-performance products through our superior design and construction, proprietary technology and advanced materials. We are an innovation leader in our industry, supported by more than 45 engineers and technicians and what we believe to be the industry's only domestic freestanding and dedicated firearms research and development facility. Our technicians are keenly focused on aligning our products with the growth trend among consumers for increasingly sophisticated products.

              This strategy results in a robust new product pipeline, including our M887 Nitro Mag shotgun, an innovative new pump-action shotgun that features ARMORLOKT, our proprietary protective coating designed for the harshest environments. In addition, we have developed various innovative products for the international, law enforcement and government end-markets under the Remington, Bushmaster and DPMS brands. For example, Remington supplies the M24 Sniper Weapon System to the U.S. Army. Finally, Bushmaster and DPMS, which supplied over 30,000 firearms to law

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enforcement and international customers in 2008, provide firearms to various federal agencies including the DOD.

              Recent ammunition product introductions have focused on developing exclusive or proprietary technology with application to performance oriented hunting and shooting sports users and special application law enforcement and military needs.

Multiple Distribution Channels Reaching Diverse End-Markets

      Commercial

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has made us a key partner with our commercial retailers and distributors. We have strong relationships with all of the major chain retail stores that sell firearms and ammunition, including Bass Pro Shops, Cabela's, Dick's Sporting Goods, Gander Mountain, Academy, Big Five and Wal-Mart, as well as with major sporting goods distributors. In addition, we have strong relationships with dealers and shooting ranges, and are actively working with them to grow sales within this channel. Within the commercial business, our products are used across a wide variety of shooting activities, resulting in numerous diverse customer end-markets serving hunters as well as skeet, trap and target shooters, competitive target shooters and a broad variety of recreational shooters.

      Military/Law Enforcement/International

              In addition to our significant commercial business, we sell products to law enforcement, international, government and military end-markets. These markets represented approximately 19% of our 2008 net sales. We believe that our increasingly focused law enforcement and global military products divisions will increase our presence in the law enforcement and defense markets beyond our existing customers, which include the Texas Department of Public Safety, Los Angeles County Sheriff's Department, Los Angeles Police Department, the California Highway Patrol, FLETC, DOD, the United States SOCOM, and the United States Secret Service, as well as international governments including Colombia, the Republic of Georgia, Italy, Poland, Malaysia, Mexico and Oman. All firearms and ammunition that we sell and export to foreign countries, whether sold commercially or to international governments and militaries, must be licensed and approved by the U.S. Department of State or the U.S. Department of Commerce.

Differentiated, Customer-Focused Sales and Marketing Approach

              We have significantly grown and transitioned our dedicated sales force to a two-tiered structure whereby dedicated key account managers sell the full FGI product offering to our top eight retail accounts while our internal field sales force calls on our network of approximately 800 distributors and dealers. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. This sales structure is similar to those utilized by many leading consumer products companies and allows for us to more effectively sell our entire suite of brands and products to our key customers and distributors. We believe this sales structure will lead both to increased market share with our key customers as well as to provide the ability to leverage our flexible manufacturing capacity to quickly respond to changes in customer preferences and demands.

              We have also shifted our business from a manufacturing-based "push system" to a customer-focused "pull system," driven by our Chief Sales and Marketing Officers. We have the ability to mine our extensive and proprietary database of consumer contacts and are an industry leader in our ability to capture and analyze point-of-sale and sell through data from our key customers and distributors to determine what products our customers demand. Additionally our key account managers have access to the full suite of FGI products and we believe are leveraged by our retail partners to assist in long range sales planning.

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              Our law enforcement and global military products divisions capitalize on key relationships to identify customer needs, so that research and development investments are focused and timely in providing products that meet these needs. We supplement our law enforcement and military efforts through the consultation of our board members who have extensive knowledge and experience.

Attractive Cash Flow Generation

              We believe our recurring revenue model further supports our ability to generate strong future cash flows that can be re-invested in research and development, the growth of sales within our distribution channels and in the acquisition of select complementary businesses. We have achieved substantial working capital improvements since 2007 by decreasing average days sales outstanding by 10 days and inventory days by 45 days from January 2007 through June 2009. Our attractive operating margins, variable cost structure, relatively low maintenance capital expenditures and low working capital needs all result in strong cash flow generation.

Proven and Experienced Management Team

              Our senior management team has substantial industry and related operational, sales and marketing and financial experience. For example, our Chief Executive Officer, Ted Torbeck, joined us after a 28 year career with General Electric, our Chief Sales Officer, Scott Blackwell, has over 20 years experience in the firearm and law enforcement industry and our Chief Financial Officer, Stephen Jackson, has been with the Company for six years and has over 19 years of financial and accounting experience. Immediately after the offering, our management will own approximately        % of our common stock (on a fully diluted basis). In addition to key managers that have been in place at our companies, we have added numerous experienced external professionals to execute our business strategy. Our management team is also supported by a dedicated group of employees who embody an innovation driven culture. The team continues to focus on upside opportunities to establish permanent competitive advantages and drive operational synergies from successfully executed acquisitions and integrations.


Our Growth Strategy

              Our fundamental strategy is to continue to strengthen and broaden our leading market positions across the firearms, ammunition and related product markets. We do so by actively and collectively managing our broad portfolio of powerful brands and products across a diverse set of end-markets. Our core strengths described above, augmented by a constant focus on operational improvements designed to increase manufacturing efficiency, quality and profitability, have been implemented and are continuously refined by our highly experienced management team. Specific additional strategic initiatives include:

Increase Commercial Market Share through Marketing-Focused Organization

              The combination of our strong brands, wide product breadth, leading market shares and the ability to offer both firearms and ammunition has cultivated a broad and loyal customer base across a wide range of commercial retailers and distributors. We have invested in our commercial sales organization, growing our headcount by 44% over the past two years, to increase the experience, reach and impact of our team. This investment and effort has significantly reduced our use of third-party, non-exclusive sales representatives. We expect to continue to grow our commercial market share by leveraging our strong brand and product portfolio with our dedicated sales force to increase shelf space. As we continue to see results of our sales and marketing optimization efforts, we will benefit from the key account managers developing stronger ties to and long term plans with our core retailers while the broader sales force capitalizes on an extensive existing dealer network. By increasing our

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consumer points-of-contact and continued focus on a customer driven platform, we believe we will continue to expand our leading market position.

Further Penetrate the Domestic and International Defense and Law Enforcement Channels

              Our global military products division, operating under a unified leadership across all of our brands, has focused research efforts on developing products in advance of key emerging imminent firearms solicitation windows for the DOD over the next several years. We have significantly ramped up and augmented our business to take advantage of these opportunities. While we have supplied a number of products to the military and law enforcement channels for many years, we view this area as having high potential for further penetration and growth for a wide variety of our existing products, as well as products we have recently developed and continue to develop. As noted above, our law enforcement and global military products divisions use key relationships to identify customer needs in anticipation of formal bids, so that research and development investments are focused and timely in providing products that meet those needs. Specific opportunities include the development of the next generation tactical sniper system for special operations and conventional military customers, the next generation service rifle for the U.S. Army, an upgrade option to our current M24 Sniper Weapon System for the U.S. Army for greater range and capability, and a materials and coatings sniper rifle study for the Defense Advanced Research Projects Agency (DARPA) that focuses on barrel life and long range accuracy. In addition, we are aligning ourselves with certain suppliers to exploit our competitive advantages and secure future government-funded research and development opportunities in this area.

              Our international presence has increased significantly in net sales over the last two years with firearms (sniper systems, shotguns, and service rifles) and ammunition sales to governmental customers in Mexico, Thailand, Malaysia and Afghanistan, among other countries. In addition to the new products mentioned above, we are developing several products specific to the foreign markets, including a 7.62mm semi-auto sniper system and several personal defense weapons. We believe we are well-positioned as an important player in this growing global market and can offer full firearms and ammunition solutions to existing and new foreign military customers. We believe leveraging current and future DOD contracts will further enhance our ability to win international business. All firearm export sales need to be licensed and approved by the United States Department of State or the United States Department of Commerce, and we have a successful track record of obtaining such approvals.

Continued Focus on Innovation and New Product Development

              Our team develops new products, such as the weather-resistant M887 Nitro Mag shotgun which was launched in May 2009, as well as processes to bring new products such as the XL7 series of rifles to market more quickly and cost effectively. Our focus on innovation has resulted in the introduction of diverse products such as the Remington R-15 modern sporting rifle, the R-25 modern sporting rifle, the Bushmaster .50 BMG bolt action rifle, and the .308 DPMS modern sporting rifle. In 2009, we also launched the Remington M597 VTR rimfire rifle, the Marlin .338 MXLR/MX lever action line of rifles and the Remington R-15 styled rifle for the new Remington 30AR cartridge, along with a variety of other new ammunition products. We are driving product development for our law enforcement, international and military efforts, as well as additional sales to existing commercial customers with additional part configurations and calibers for the modern sporting rifle. Specific examples include the Adaptive Combat Rifle and 7.62mm semi-auto sniper system. We have numerous new products in development with multiple new firearms product platforms and extensions to existing product lines scheduled for introduction in 2010 and beyond.

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Continue to Optimize Manufacturing Operations

              We have augmented and integrated our facilities over the last 18 months and have focused on improving our operating efficiency. To this end, we have completed a number of lean manufacturing projects, including a factory consolidation and six sigma efforts led by the introduction of more than 50 black belt process experts since implementation of the program. Such projects have increased throughput and reduced direct labor, square footage and equipment downtime along with improved cash flow from lower inventory levels. These activities, which we call "continuous cost improvements," will continue to be a cornerstone of our organization as we build and optimize our world class manufacturing platform.

              Our manufacturing optimization efforts have also included the shift of some modern sporting rifle components and parts production into our plants and away from third-party vendors. These efforts have made the combined organization considerably more flexible, improved our quality and margins and enabled us to more quickly and efficiently address future changes in demand. The benefits of our past work are starting to appear in our ability to leverage our existing manufacturing footprint during periods of high demand while maintaining variability in our cost structure. We enhance this variability through our use of third parties for many modern sporting rifle components with no long-term contracts, so that we can adjust our inventory quickly and at a low cost.

Pursue Complementary Acquisitions and Strategic Investments

              We have built and strengthened our family of brands and products over the past three years, primarily through the successful integration of four primary acquisitions (Bushmaster, Remington, DPMS and Marlin) made between April 2006 and January 2008. We did so with the goal of creating the world's leading firearms and ammunition company. We have a proven track record of successfully identifying and integrating acquisitions, as demonstrated by the integration of our brands, and have achieved significant operational improvements as a result. We intend to continue to identify and pursue add-on strategic acquisitions or investments that expand and enhance our brand, product and intellectual property portfolio. We seek to acquire highly complementary products, intellectual property or external capabilities to expand our portfolio or extend our brands and channel relationships.

              We have recently completed three acquisitions which we believe will enhance our business performance. On June 5, 2009, we acquired certain assets of Dakota Arms, a producer of high-end rifles, shotguns and ammunition for approximately $1.8 million, which primarily consisted of inventory and equipment. This acquisition positions us in the largely customized, high precision, large caliber and safari segments of the market, with premium and aspirational firearm and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases. In addition, on September 22, 2009, we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of high quality walnut and laminate wood stocks for our firearms operations for approximately $3.8 million. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will reduce certain costs of acquiring the wood stocks and improve efficiencies in our firearms manufacturing processes. Finally, on October 2, 2009, we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military (including current use by the DOD), law enforcement and commercial markets and provides us further product portfolio expansion.


Recent Transactions

              In July 2009, we issued $200.0 million of 10.25% Senior Secured Notes due 2015 at an issue price of 97.827% (the "Notes"), and entered into a new $180.0 million senior secured asset-based

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revolving credit facility (the "ABL Revolver"). We used the proceeds of the Notes together with proceeds from borrowings under the ABL Revolver and cash on hand to repay outstanding indebtedness, and to pay related transaction fees and expenses.

              The issuance of the Notes, the borrowing under our ABL Revolver and the related repayments of outstanding indebtedness (including the termination of any commitments thereunder) described above are referred to collectively as the "Refinancings." Prior to the Refinancings, FGI maintained two separate capital structures at its two principal subsidiaries: Remington and BFI. The Refinancings consolidated all significant debt at FGI with all wholly-owned domestic subsidiaries being borrowers and/or guarantors.


Ownership

              Immediately after the offering, funds and accounts managed by Cerberus or its affiliated management companies, which we refer to collectively as our controlling stockholder, will control approximately            % (approximately            % if the underwriters' option to purchase additional shares to cover over-allotments is exercised in full) of our common stock. Established in 1992, Cerberus, along with its affiliates, is one of the world's leading private investment firms. Cerberus currently holds controlling or significant minority investments in companies around the world. Cerberus invests in divestitures, turnarounds, recapitalizations, financial restructurings, public-to-privates and management buyouts in a variety of sectors.


Corporate Information

              Our principal executive offices are located at 870 Remington Drive, P.O. Box 1776, Madison, North Carolina 27025-1776, and our telephone number is (336) 548-8700. For information on our corporate history, see "Business—Company Overview—Our History and Corporate Structure."

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THE OFFERING

Common stock offered:

   
 

By Freedom Group, Inc. 

 

            shares (or            shares if the underwriters exercise their over-allotment option in full).

 

By the selling stockholders

 

            shares (or            shares if the underwriters exercise their over-allotment option in full).

Shares outstanding after the offering

 

            shares (or            shares if the underwriters exercise their over-allotment option in full).

Shares outstanding or issuable after the offering

 

            shares (or            shares if the underwriters exercise their over-allotment option in full).

Use of proceeds

 

The net proceeds to us from this offering will be approximately $             million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for working capital and other general corporate purposes. See "Use of Proceeds." We will not receive any proceeds from the sale of shares by the selling stockholders.

Dividend Policy

 

The declaration and payment of any dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, and other considerations that our board of directors deems relevant. See "Dividend Policy."

Risk factors

 

See "Risk Factors" and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Proposed ticker symbol

 

"            "

              The number of shares of common stock outstanding after the offering is based on            shares of common stock outstanding as of            , 2009 (assuming that the Recapitalization had taken place) and includes common stock underlying options that are exercisable within 60 days of            , 2009, but excludes common stock underlying all other options. The number of shares excluded in the previous sentence are included in the number of shares of common stock outstanding or issuable after this offering (which includes the shares issuable upon the exercise of all outstanding options).

              Unless otherwise indicated, all information contained in this prospectus assumes:

    that the underwriters do not exercise their option to purchase up to            additional shares of our common stock from us and the selling stockholders to cover over-allotments, if any;

    the        -for-1 reverse split of all our outstanding common stock and the reclassification of all our outstanding preferred stock into a calculated amount of shares of our common stock, which will occur immediately prior to the closing of this offering (the foregoing, collectively, the "Recapitalization"); the amount of shares of common stock to be issued upon the reclassification of such preferred stock will be determined by                  ; and

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    the filing of our amended and restated certificate of incorporation and the adoption of our amended and restated bylaws, which will occur immediately prior to the closing of this offering.

              For more detailed information regarding our common stock and options, see "Description of Capital Stock."

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

              As a result of the acquisition of the assets of Bushmaster by CCM, which was effective as of April 1, 2006, our financial results for 2006 have been separately presented in our consolidated financial statements for the "Predecessor Entity" for the period January 1, 2006 through March 31, 2006 and for the "Successor Entity" for the period April 1, 2006 through December 31, 2006. We have combined the 2006 Predecessor Entity and Successor Entity periods from January 1, 2006 through December 31, 2006 in the summary historical and pro forma consolidated financial data below, as we believe this combination is more useful to explain our results of operations. This presentation is not a measure under GAAP and it is provided to enhance the reader's understanding of our results of operations for the period presented.

              The summary historical financial data below for each of the years ended December 31, 2008 and 2007 and the period from April 1, 2006 to December 31, 2006 are derived from the consolidated financial statements of Freedom Group. The summary historical financial data for the period from January 1, 2006 through March 31, 2006 is derived from the consolidated financial statements of Bushmaster Firearms, Inc. and its subsidiaries. All financial statements described above have been audited by Grant Thornton LLP, independent registered public accounting firm, and are included elsewhere in this prospectus. The summary historical financial data for each of the six month periods ended June 30, 2009 and 2008 are derived from the unaudited consolidated financial statements of Freedom Group included elsewhere in this prospectus. Such unaudited consolidated financial statements, in the opinion of our management, include all adjustments necessary for the fair presentation of our financial condition, results of operations and cash flows for such periods and as of such dates.

              The summary unaudited condensed consolidated pro forma financial information for the twelve months ended June 30, 2009 has been derived from the unaudited pro forma consolidated financial information for the year ended December 31, 2008 and for the six months ended June 30, 2008 and 2009 included in "Unaudited Pro Forma Condensed Consolidated Financial Information." The unaudited pro forma consolidated statement of operations data has been adjusted to give effect to the Marlin Acquisition, the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2008, and the unaudited pro forma, as adjusted consolidated statement of operations data has been adjusted to give effect to the Transactions as if they had occurred on January 1, 2008. The unaudited pro forma consolidated balance sheet data reflects our financial position as if the Refinancings had occurred as of June 30, 2009 and the unaudited pro forma, as adjusted consolidated balance sheet data reflects our financial position as if the Refinancings, the Recapitalization and the offering of our common stock and the use of proceeds thereof had occurred as of June 30, 2009.

              The summary unaudited pro forma consolidated financial data is for informational purposes only and does not purport to present what our results of operations and financial condition would have been had these transactions actually occurred as of the dates indicated, nor does it project our results of operations for any future period or our financial condition at any future date.

              You should read the following audited and unaudited summary historical and pro forma consolidated financial data of Freedom Group in conjunction with "Selected Historical Consolidated Financial Data," "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and their notes and other financial information appearing elsewhere in this prospectus.

              Our results of operations for the year ended December 31, 2006 reflect the combined predecessor and successor operations of Bushmaster. Our results of operations for the year ended December 31, 2007 also include the results of operations of Remington, which we acquired on May 31, 2007. Due to the significant impact of the acquired Remington operations, our financial results for

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periods subsequent to May 31, 2007 may not be comparable to our results from prior-year periods. In addition, on December 13, 2007 we consummated the acquisition of certain assets of DPMS and on January 28, 2008, we consummated the Marlin Acquisition. Due to the impact of the acquired Marlin and DPMS operations, our results of operations for 2008 may not be comparable to our results from prior-year periods. For additional information regarding our acquisitions, see "Business—Company Overview—Our History and Corporate Structure."

 
  Year Ended December 31,   Six
Months Ended
June 30,
(Unaudited)
  Twelve
Months Ended
June 30,
(Pro Forma)
(Unaudited)
  Twelve
Months Ended
June 30,
(Pro Forma, as
Adjusted)
(Unaudited)
 
 
  2006   2007(3)   2008(3)   2008(3)   2009   2009   2009  
 
  (in millions, except share and per share data)
 

Income Statement and Other Data

                                           

Net Sales(1)

  $ 58.1   $ 384.9   $ 722.5   $ 316.8   $ 427.3   $ 835.3   $    

Cost of Goods Sold

    34.4     306.0     524.4     229.8     282.4     577.6        

Gross Profit

    23.7     78.9     198.1     87.0     144.9     257.7        

Operating Expenses

    12.7     70.1     186.9     66.0     78.7     201.9        

Operating Income

    11.0     8.8     11.2     21.0     66.2     55.8        

Interest Expense

    4.6     21.2     30.8     15.2     14.6     27.2        

Income (Loss) before Taxes

    6.4     (12.4 )   (19.6 )   5.8     51.6     28.6        

Net Income (Loss)

    5.2     (9.0 )   (28.6 )   3.6     33.0     2.2        

Net Income (Loss) Applicable to Common Stock

    5.2     (9.9 )   (48.2 )   (6.1 )   23.0     (17.7 )      

Net Income (Loss) Per Share

                                           

Basic

  $ 0.33   $ (0.62 ) $ (2.97 ) $ (0.38 ) $ 1.41   $ (1.09 ) $        (2)

Diluted

  $ 0.32   $ (0.62 ) $ (2.97 ) $ (0.38 ) $ 1.39   $ (1.09 ) $        (2)

Weighted Average Number of Shares Outstanding

                                           

Basic

    15,937,801     16,084,174     16,236,305     16,166,948     16,332,431     16,318,669            (2)

Diluted

    16,052,595     16,084,174     16,236,305     16,166,948     16,554,230     16,318,669            (2)

Operating and Other Financial Data

                                           

Net Cash provided by (used in):

                                           

Operating Activities

  $ 6.4   $ 70.8   $ 52.9   $ (39.4 ) $ 53.3              

Investing Activities

    (77.3 )   (90.7 )   (57.1 )   (49.0 )   (7.9 )            

Financing Activities

    71.7     43.9     57.3     74.9     (12.2 )            

 

 
  As of June 30, 2009
(Unaudited)
 
 
  Actual   Pro Forma   Pro Forma,
as Adjusted
 
 
  (in millions)
 

Balance Sheet Data

                   

Cash and Cash Equivalents

  $ 111.0   $ 18.6   $    

Working Capital

    271.6     181.0        

Total Assets

    734.0     655.6        

Total Debt(4)

    324.3     250.3        

Stockholders' Equity (Deficit)

    (80.3 )   (82.9 )      

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  Year Ended December 31,   Six Months
Ended June 30
  Twelve
Months
Ended
June 30,
(Pro Forma)
  Twelve
Months
Ended
June 30,
(Pro Forma,
as Adjusted)
 
 
  2006   2007(2)   2008(2)   2008(3)   2009   2009   2009  
 
  (in millions)
 

Other Financial Data

                                           

EBITDA(5)

  $ 13.2   $ 54.6   $ 104.7   $ 49.5   $ 96.2   $ 150.8   $    

EBITDA Margin(6)

    22.7 %   14.2 %   14.5 %   15.6 %   22.5 %   18.1 %     %

Capital Expenditures

  $ 0.3   $ 8.4   $ 18.4   $ 7.4   $ 4.3   $ 15.3   $    

 

 
  Twelve
Months Ended
June 30, 2009
(Pro Forma)
(Unaudited)
 
 
  (in millions,
except ratios)

 

Pro Forma Data

       

Ratio of Total Debt to EBITDA(4)(5)

    1.7 x

Ratio of EBITDA to Interest Expense(5)

    5.5 x

Interest Expense

  $ 27.2  

(1)
Presented net of federal excise taxes. Federal excise taxes were $54.5 million, $31.0 million and $3.8 million for the years ended 2008, 2007 and 2006, respectively. Federal excise taxes were $38.7 million and $22.4 million for each of the six months ended June 30, 2009 and 2008, respectively. Pro Forma federal excise taxes for the twelve months ended June 30, 2009 were $70.8 million.

(2)
Net income (loss) per share and weighted average number of shares outstanding give effect to our proposed Recapitalization.

(3)
Results for the year ended December 31, 2007 reflect the impact of the acquired Remington and DPMS operations, which were acquired in May 2007 and December 2007, respectively. Results for the year ended December 31, 2008 and the six months ended June 30, 2008 reflect the impact of the acquired Marlin operations, which was effective January 28, 2008, and the acquired DPMS operations, which was effective December 13, 2007.

(4)
Consists of short-term and long-term debt, current portion of long-term debt and capital lease obligations.

(5)
"EBITDA" is defined in the indenture governing the Notes. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, EBITDA also adjusts net income (loss) by excluding items or expenses as set forth below. EBITDA is a primary component of the fixed charge coverage ratio used in covenants under the indenture governing the Notes and is a basis on which management assesses performance.

      EBITDA is not a measure of performance defined in accordance with GAAP. However, management believes that EBITDA is useful to investors in evaluating our performance because it is a commonly used financial analysis tool for measuring and comparing companies in our industry in areas of operating performance. Management believes that the disclosure of EBITDA offers an additional financial metric that, when coupled with the GAAP results and the reconciliation to GAAP results, provides a more complete understanding of our results of operations and the factors and trends affecting our business.

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      EBITDA should not be considered as an alternative to net income (loss) as an indicator of our performance or as an alternative to net cash provided by operating activities as a measure of liquidity or as an alternative to any other measure prescribed by GAAP. The primary material limitations associated with the use of EBITDA as compared to GAAP results are (i) it may not be comparable to similarly titled measures used by other companies in our industry, and (ii) it excludes financial information that some may consider important in evaluating our performance. We compensate for these limitations by providing the following disclosure of the differences between EBITDA and GAAP results, including providing a reconciliation of EBITDA to GAAP results, to enable investors to perform their own analysis of our operating results.

      EBITDA is calculated as follows:

 
  Year Ended
December 31,
  Six
Months
Ended
June 30,
(Unaudited)
  Twelve
Months
Ended
June 30,
(Pro Forma)
(Unaudited)
 
 
  2006   2007   2008   2008   2009   2009  
 
  (in millions)
 

Net Income (Loss)

  $ 5.2   $ (9.0 ) $ (28.6 ) $ 3.6   $ 33.0   $ 2.2  

Adjustments:

                                     
 

Depreciation

    0.3     8.7     16.4     8.2     8.3     16.5  
 

Interest

    4.6     21.2     30.8     15.2     14.6     27.2  
 

Income Tax Expense (Benefit)

    1.1     (4.0 )   9.1     2.2     18.7     26.6  
 

Amortization of Intangibles

    1.0     3.0     6.7     4.0     3.6     6.3  
 

Impairment Charges

            47.4             47.4  
 

Other Non-cash Charges(A)

    0.2     (2.6 )   4.9     2.4     7.5     10.0  
 

Non-recurring Charges(B)

    0.8     37.3     18.0     13.9     10.5     14.6  
                           
 

Total Adjustments

    8.0     63.6     133.3     45.9     63.2     148.6  
                           
 

EBITDA

  $ 13.2   $ 54.6   $ 104.7   $ 49.5   $ 96.2   $ 150.8  
                           

(A)
Other non-cash charges include the following:
 
  Year Ended
December 31,
  Six
Months
Ended
June 30,
(Unaudited)
  Twelve
Months
Ended
June 30,
(Pro Forma)
(Unaudited)
 
 
  2006   2007   2008   2008   2009   2009  
 
  (in millions)
 

Retiree Benefits and Pension Expenses

  $   $ 3.5   $ 0.9   $ 0.4   $ 3.4   $ 3.9  

Plan Amendments/Curtailment(i)

        (6.4 )                

Stock Option Expense

    0.2     0.1     1.4     0.8     0.3     0.9  

Loss on Disposal of Assets

            0.7         0.3     1.0  

Inventory Write-off

        0.3     2.0     1.3     3.5     4.2  

Miscellaneous and Non-cash Rent

        (0.1 )   (0.1 )   (0.1 )        
                           
 

Total Other Non-cash Charges

  $ 0.2   $ (2.6 ) $ 4.9   $ 2.4   $ 7.5   $ 10.0  
                           

(i)
Consists of non-cash gain related to the amendment of our defined benefit plan.

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(B)
Non-recurring charges include the following:
 
  Year Ended
December 31,
  Six
Months
Ended
June 30,
(Unaudited)
  Twelve
Months
Ended
June 30,
(Pro Forma)
(Unaudited)
 
 
  2006   2007   2008   2008   2009   2009  
 
  (in millions)
 

Restructuring and Integration Expenses(i)

  $ 0.1   $ 4.0   $ 4.9   $ 3.0   $ 1.1   $ 3.0  

Purchase Accounting(ii)

    0.4     31.8     6.1     5.6         0.5  

Write off of Surveillance Products Inventory(iii)

            3.1     3.1          

Gain on Sale of Investment(iv)

            (1.4 )           (1.4 )

Employee Related Costs(v)

    0.1     0.3     3.3     1.8     1.4     2.9  

Product Safety Program(vi)

                    6.6     6.6  

Other Fees and Transaction Costs(vii)

    0.2     1.2     2.0     0.4     1.4     3.0  
                           
 

Total Non-recurring Charges

  $ 0.8   $ 37.3   $ 18.0   $ 13.9   $ 10.5   $ 14.6  

(i)
Consists of factory integration costs associated with lean six sigma implementation and Marlin back-office integration including external consulting, consulting services by Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, travel and equipment transportation expenses.

(ii)
Consists of purchase accounting adjustments related to the write-up of inventory and recording of hedging agreements at estimated fair value in accordance with Statement of Financial Accounting Standards ("SFAS") No. 141 (revised 2007), Business Combinations ("SFAS 141(R)"), that were rolled out over the subsequent period for which inventory was sold and period for which hedging contracts were expected to mature.

(iii)
Consists of cost of write-downs on inventory incurred upon exit of technology business.

(iv)
Consists of gain associated with sale of investment.

(v)
Consists of employee separation benefits, relocation and employment search fees.

(vi)
Consists of an accrual to reflect the estimated costs related to a product warning campaign related to 17 HMR ammunition and Remington Model 597 17 HMR semi-automatic rifles.

(vii)
Consists of costs incurred for the development of DOD organization and fees and expenses associated with due diligence for potential acquisitions and the current refinancing, offset by a gain associated with a federal excise tax audit.

(6)
Defined as EBITDA divided by Net Sales.

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RISK FACTORS

              An investment in our common stock is subject to a number of risks. You should carefully consider the risks described below together with all the other information contained in this prospectus before deciding whether to purchase our common stock. If any of the following risks occurs, our business, financial condition, prospects or results of operations could be harmed. In such an event, the trading price of our common stock could decline and you may lose part or all of your investment.

Risks Relating to Our Business

Unfavorable market trends and regulatory concerns could adversely affect demand for our products and our business.

              We believe that a number of trends that currently exist may affect the hunting and shooting sports market:

    the development of rural property in many locations has curtailed or eliminated access to private and public lands previously available for hunting;

    environmental issues, such as concern about lead in the environment; and

    decreases in consumer confidence and levels of consumer discretionary spending.

              These trends may have a material adverse effect on our business by impairing industry sales of firearms, ammunition and other shooting-related products.

Our business could be materially adversely affected as a result of general economic and market conditions. Continued volatility and disruption of the credit and capital markets may negatively impact our revenues and our, or our suppliers' or customers', ability to access financing on favorable terms or at all.

              We are subject to the effects of general global economic and market conditions. Increases in commodity prices, higher levels of unemployment, higher consumer debt levels, declines in consumer confidence, uncertainty about economic stability and other economic factors that may affect consumer spending or buying habits could adversely affect the demand for products we sell. If the current economic conditions and the related factors remain uncertain or persist, spread or deteriorate further, our business, results of operations or financial condition could be materially adversely affected.

              While we intend to finance expansion, renovation and other projects with existing cash, cash flow from operations and borrowings under the ABL Revolver, we may require additional financing to support our continued growth. As widely reported in recent months, the financial crisis in the banking sector and financial markets has resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in fixed income, credit and equity markets. Possible consequences from the financial crisis to our business include decreased revenues from our operations attributable to decreases in consumer spending, limitations on our, or our suppliers' or customers', access to capital on terms acceptable to each party or at all, potential failure to satisfy the financial and other restrictive covenants to which we are subject under the ABL Revolver or the indenture governing the Notes, insolvency of key suppliers resulting in product delays, inability of customers to obtain credit to finance purchases of our products and/or customer insolvencies, increased risk that customers may delay payments, fail to pay or default on credit extended to them, and counterparty failures negatively impacting our treasury operations, each of which could have a material adverse effect on our results of operations or financial condition.

Our business is subject to economic, market and other factors beyond our control or ability to predict.

              The sale of our products depends upon a number of factors related to the level of consumer spending, including the general state of the economy and the willingness of consumers to spend on

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discretionary items. Historically, the general level of economic activity has significantly affected the demand for sporting goods products in the hunting and shooting sports and related markets. As economic activity slows, consumer confidence and discretionary spending by consumers decline. Competitive pressures arising from any significant or prolonged economic downturn could have a material adverse impact on our financial condition and results of operations, and such impact could be intensified by our leveraged condition.

              Moreover, additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business and operations. These risks and uncertainties include, but are not limited to, weather and other Acts of God that could result in the loss or destruction of warehoused inventory and stoppages in our ability to manufacture our key products for a sustained period of time.

Significant increases in commodity and energy prices could have a material impact on our financial condition, results of operations or cash flows.

              The manufacturing of our products is dependent upon the availability of raw materials such as lead, copper, zinc, steel and brass. Increases in the prices of any of these raw materials as well as an increase in energy prices could have a material impact on our financial condition. We can provide no assurance as to the future trends of these conditions or to what extent future increases could be offset through customer price increases.

Our results of operations are affected by seasonal fluctuations in business, and our inventory management practices have had an effect on our business.

              Many of our firearms products are purchased in anticipation of use during the fall hunting season. As a result of the seasonal nature of our sales, our historical working capital financing needs generally have exceeded cash provided by operations during certain parts of the year. Our recent efforts to shorten terms and reduce dating plan billing practices, under which a distributor may purchase these products beginning in December (the start of our firearms dating plan year) and pay for them on extended terms, have moderated this seasonal aspect of working capital financing needs as compared to prior years. However, our working capital financing needs still tend to be higher during the spring and summer months, decreasing during the fall and reaching their lowest points during the winter.

              In addition, we believe that worsening economic conditions have caused other customers (dealers and chains) to defer purchases of our products until later in the core fall hunting seasons (September through December) and to utilize lower inventory levels than during prior periods. This overall trend in demand continues to date, and there can be no assurance that such trends will not continue.

              As a result of the seasonal nature of our sales and our customers' inventory management practices, our working capital financing needs may significantly exceed cash provided by operations during certain periods in a year.

A substantial amount of our business comes from one "national account" customer. A substantial portion of our accounts receivable is concentrated with two customers. Loss of business from either of these customers could adversely affect our financial condition, results of operations or cash flows.

              Our dedicated sales force and key account managers market our products directly to national accounts (consisting primarily of mass merchandisers) and to federal, state and local government agencies. Approximately 15% and 9% of our total sales for the year ended December 31, 2008 and for the six months ended June 30, 2009, respectively, and 13% and 6% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively, were attributable to one national

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account, Wal-Mart. Our sales to Wal-Mart are generally not governed by a written long-term agreement. In the event that Wal-Mart significantly reduces or terminates its purchases of firearms and/or ammunition from us, our financial condition, results of operations or cash flows, could be adversely affected.

              Wal-Mart, together with another customer, accounted for approximately 21% and 16% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. This other customer, due to the timing of its purchasing, usually maintains significant amounts of accounts receivable at the end of our fiscal year. In the event that this customer incurs financial difficulty and is unable to pay its account in full, our financial condition, results of operations or cash flows could be adversely affected.

We have experienced a significant increase in demand for certain of our products since late 2008. There can be no assurance that this increased demand for certain firearms and ammunition will continue.

              Demand for firearms and ammunition has increased significantly since late 2008, which we believe has been due in part to increased consumer uncertainty relating to new and potentially more restrictive legislation, and the increase of home defense spending in light of the global economic downturn. While we view this increase in demand as a significant long-term opportunity to expand our customer base and strengthen our customer relationships, there can be no assurance that this increased demand will continue or that demand will not decrease in the near or long-term. Any decrease in market demand for our products could have a material adverse effect on our business, financial condition, results of operations or cash flows.

We are dependent on a number of key suppliers. Loss of or damage to our relationships with these suppliers could have a material adverse effect on our business, financial condition, results of operations or cash flows.

              To manufacture our various products, we use many raw materials, including steel, zinc, lead, brass, copper, plastics and wood, as well as manufactured parts purchased from independent manufacturers. An extended interruption in the supply of these or other raw materials or in the supply of suitable substitute materials would disrupt our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, we may incur additional costs in sourcing raw materials from alternative producers.

              For a number of our raw materials, we rely on one or a few suppliers. Alternative sources, many of which are foreign, exist for each of these materials. We do not, however, currently have significant supply relationships with any of these alternative sources. We cannot estimate with any certainty the length of time that would be required to establish alternative supply relationships, or whether the quantity or quality of materials that could be so obtained would be sufficient.

              In addition, we rely on a limited number of vendors to perform machining processes on key rifle components. Any disruption of the operations of one of our key vendors could materially impact our ability to obtain certain rifle components. In the event that we lose one of our principal vendors, we may not be able to find an alternative vendor in a timely fashion, and as a result, our ability to produce rifles could be materially and adversely affected.

We have been increasing the prices on certain of our products and shortening sales terms. These higher product selling prices coupled with reduced sales terms could limit sales, which could negatively impact our business, financial condition, results of operations or cash flows.

              We have imposed price increases on our customers in an attempt to offset cost increases relating to materials and energy (including lead, copper, zinc, brass, steel and fuel) that we have experienced. We have also worked to reduce sales terms over the past several years related to certain working capital initiatives. These higher product prices and shorter sales terms could limit our sales in

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the future and could negatively impact our business, financial condition, results of operations or cash flows.

We may not be able to compete successfully within our highly competitive markets, which could adversely affect our business, financial condition, results of operations or cash flows.

              The markets in which we operate are highly competitive. Product image, name, quality and innovation are the primary competitive factors in the firearms industry. Product differentiation exists to a much lesser extent in the ammunition industry, where price is the primary competitive factor. Reductions in price by our competitors in the ammunition industry could force us to reduce prices or otherwise alter terms of sale as a competitive measure, which could adversely affect our business, financial condition, results of operations or cash flows.

              Our competitors vary by product line. Some of our competitors are subsidiaries of large corporations with substantially greater financial resources than us. Although we believe that we compete effectively with all of our present competitors, we may not continue to do so, and our ability to compete could be adversely affected by our leveraged condition. See "Business—Competition."

An increase in revenues to government, law enforcement and military sales channels could result in increased uncertainty to the timing of our sales revenues.

              Government, law enforcement and military sales channels are typically in the form of contract sales arrangements. We are exposed to these channels through our sale of certain firearms and ammunition products. An increasing percentage of our sales revenues could therefore be subject to contract negotiations. This trend could cause sales revenue amounts to be increasingly volatile and uncertain with respect to the timing of orders.

We intend to evaluate acquisitions, joint ventures and other strategic initiatives, any of which could distract our management or otherwise have a material adverse effect on our business, financial condition, results of operations or cash flows.

              Our future success may depend on opportunities to buy or obtain rights to other businesses or technologies that could complement, enhance or expand our current business or products or that might otherwise offer us growth opportunities. In particular, we intend to evaluate potential mergers, acquisitions, joint venture investments, strategic initiatives, alliances, vertical integration opportunities and divestitures. However, we may not experience the anticipated benefits of these transactions. In addition, we may be unable to effectively integrate any acquired businesses into our organization, and may not succeed in managing such acquired businesses or the larger company that results from such acquisitions. If we attempt to engage in these transactions, we expose ourselves to various inherent risks, including:

    accurately assessing the value, future growth potential, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates;

    unanticipated expenses and potential delays related to integration of the operations, technology, and other resources of the acquired companies;

    the potential loss of key personnel of an acquired or combined business;

    our ability to achieve projected economic and operating synergies;

    difficulties successfully integrating, operating, maintaining and managing newly-acquired operations or employees;

    difficulties maintaining uniform standards, controls, procedures and polices;

    unanticipated changes in business and economic conditions affecting an acquired business;

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    the possibility we could incur impairment charges if an acquired business performs below expectations;

    the potential strain on our financial and managerial controls and reporting systems and procedures;

    exposure to legal claims for activities of the acquired business prior to acquisition; and

    the diversion of our management's attention from our existing business to integrate the operations and personnel of the acquired or combined business or implement the strategic initiative.

              If any of the foregoing risks materializes, our results of operations and the results of the proposed transactions would likely differ from our expectations and market expectations, and our stock price could, accordingly, decline. In addition, we may not be able to complete desirable transactions for reasons including a failure to secure financing or due to restrictions in agreements with third parties.

If we are unable to retain key management personnel, our business could be adversely affected.

              Our success is dependent to a large degree upon the continued service of our executive management team. We have entered into employment agreements with certain of our executives. The loss of any member of our executive management team could have a material adverse effect on our business, financial condition and results of operations.

Because of the nature of potential injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur significant costs.

              We are currently defending product liability litigation involving Remington brand firearms (including firearms manufactured under the Marlin, H&R and L.C. Smith names) and our ammunition products (including ammunition manufactured under the UMC and Peters names). As of August 31, 2009, approximately 16 individual bodily injury cases or claims were pending, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings. Some of these cases seek punitive as well as compensatory damages. There were no pending product liability cases involving our other brands.

              Because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products is uncertain, particularly as to firearms and ammunition, our resources may not be adequate to cover pending and/or future product liability occurrences, cases or claims, in the aggregate, and such cases and claims may have a material adverse effect upon our business, financial condition or results of operations. Insurance coverage for these risks is expensive and relatively difficult to obtain. Our insurance costs were approximately $5.6 million for the fiscal year ended December 31, 2008. Any inability to obtain insurance, any significant increases in the cost of insurance we obtain, or any losses in excess of our insurance coverage could have a material adverse effect on our business, financial condition or results of operations. See "Business—Legal Proceedings and Related Matters."

Our business is subject to extensive governmental legislation and regulation that may restrict our operations, increase our costs of operations, or adversely affect the demand for our products by limiting the availability and/or increasing the cost of our products.

              The manufacture, sale and purchase of firearms and ammunition are subject to extensive federal, state and local and foreign governmental regulation. Although we do not believe that current regulations have had such an impact to date, future regulations may adversely affect our operations by limiting the types of products that we can manufacture and/or sell, or imposing additional costs on us or on our customers in connection with the manufacture and/or sale of our products. Such regulations

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may also adversely affect demand for our products by imposing limitations that increase the costs of our products, making it more difficult or cumbersome for our distributors or end users to transfer and own our products, or creating negative consumer perceptions with respect to our products.

              Current federal regulations include:

    licensing requirements for the manufacture and/or sale of firearms and ammunition;

    a national system of instant background checks for all purchases of firearms from federal license holders, including purchases of our firearms products and purchases from license holders at gun shows; and

    a federal system of Department of State and Commerce Department licensing governing the sale, export and distribution of firearms and ammunition.

              In addition, bills have been introduced in Congress to establish, and to consider the feasibility of establishing, a nationwide database recording so-called "ballistic images" of ammunition fired from new guns. Should such a mandatory database be established, the cost to us, our distributors and our customers could be significant, depending on the type of firearms and ballistic information included in the database. Bills have also been introduced in Congress in the past several years that would affect the manufacture and sale of ammunition, including bills to regulate the manufacture, importation and sale of armor-piercing bullets, to prohibit the manufacture, transfer or importation of .25 caliber, .32 caliber and 9 mm handgun ammunition, and to increase or impose new taxes on the sales of certain types of ammunition, as well as bills addressing the use of lead in ammunition. Certain of these bills would apply to ammunition of the kind we produce, and accordingly, if enacted, could have a material adverse effect on our business.

              In September 2004, the United States Congress declined to renew the Federal Assault Weapons Ban of 1994 ("AWB"), which generally prohibited the manufacture of certain firearms defined under that statute as "assault weapons" and the sale or possession of "assault weapons." Various states and local jurisdictions have adopted their own version of the AWB, some of which apply to Bushmaster, DPMS and certain Remington sporting firearms products. If a statute similar to AWB were to be re-enacted it could have a material adverse effect on our business.

              State and local laws and regulations may place additional restrictions on gun ownership and transfer as described below.

    Some states have recently enacted, and others are considering, legislation restricting or prohibiting the ownership, use or sale of specified categories of firearms and ammunition. Many states currently have mandatory waiting period laws in effect for the purchase of firearms, including rifles and shotguns. Although there are few restrictive state or local regulations applicable to ammunition, several jurisdictions are considering such restrictions on a variety of bases.

    Some states have enacted regulations prohibiting the sale of firearms unless accompanied by an internal and/or external locking device. In several states, this requirement is imposed on both handguns and long guns. Some states are also considering mandating the inclusion of various design features on safety grounds. Most of these regulations as currently contemplated would be applicable only to handguns.

    To date, two states have established registries of so-called "ballistic images" of ammunition fired from new guns. Although neither law mandates the inclusion of such "imaging" data from long guns in their registries, these or other states may do so in the future. Proposed legislation in at least one other state would be applicable to our rifles and would call for "imaging" of both cartridges and projectiles.

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              We believe that existing federal and state legislation relating to the regulation of firearms and ammunition have not had a material adverse effect on our sales of these products. However, the regulation of firearms and ammunition may become more restrictive in the future and any such development might have a material adverse effect on our business, financial condition, results of operations or cash flows. In addition, regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. See "Business—Regulation."

              Although we are primarily a manufacturer of long guns, the trends regarding firearms regulation, as well as pending industry litigation, and the consumer perception of such developments, may adversely affect sales of firearms, ammunition and other shooting-related products by such means as increasing costs of production and/or reducing the number of distribution outlets for our products.

Environmental litigation and regulations may restrict or increase the cost of our operations and/or impair our financial condition.

              We are subject to a variety of federal, state and local environmental laws and regulations which govern, among other things, the discharge of hazardous materials into the air and water, the handling, treatment, storage and disposal of such materials, as well as remediation of contaminated soil and groundwater. We have programs in place that monitor compliance with those requirements and believe that our operations are in material compliance with them. In the normal course of our manufacturing operations, we are subject to occasional governmental proceedings and orders pertaining to waste disposal, air emissions and water discharges into the environment.

              Based on information known to us, we do not expect current environmental regulations or environmental proceedings and claims to have a material adverse effect on our financial condition, results of operations or cash flows. However, it is not possible to predict with certainty the impact on us of future environmental compliance requirements or of the cost of resolution of future environmental proceedings and claims, in part because the scope of the remedies that may be required is not certain, liability under federal environmental laws is, under certain circumstances, joint and several in nature, and environmental laws and regulations are subject to modifications and changes in interpretation. Environmental regulations may become more burdensome in the future and any such development, or discovery of unknown conditions, may require us to make material expenditures or otherwise materially adversely affect the way we operate our business, as well as have a material adverse effect on our financial condition, results of operations or cash flows. See "Business—Environmental Matters."

Worse-than-assumed economic and demographic experience for our postretirement benefit plans (e.g., discount rates, investment returns, and health care cost trends) could negatively impact our financial condition, results of operations or cash flows.

              We sponsor plans to provide postretirement pension and health care for certain of our retired employees. The measurement of our obligations, costs and liabilities associated with these benefits requires that we estimate the present values of projected future payments to all participants. We use many assumptions in calculating these estimates, including discount rates, investment returns on designated plan assets, health care cost trends, and demographic experience (e.g., mortality and retirement rates). To the extent that actual results are less favorable than our assumptions there could be a substantial adverse impact on our financial condition, results of operations or cash flows.

Our future pension costs and required level of contributions could be unfavorably impacted by changes in actuarial assumptions and future market performance of plan assets, which could adversely affect our financial condition, results of operations or cash flows.

              We have significant defined benefit pension obligations. The funding position of our pension plans is impacted by the performance of the financial markets, particularly the equity markets, and the

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discount rates used to calculate our pension obligations for funding and expense purposes. Recent significant declines in the financial markets have negatively impacted the value of the assets in our pension plans. In addition, lower bond yields may reduce our discount rates resulting in increased pension contributions and expense.

              Funding obligations are determined under government regulations and are measured each year based on the value of assets and liabilities on a specific date. If the financial markets do not provide the long-term returns that are expected under the governmental funding calculations, we could be required to make larger contributions. The equity markets can be, and recently have been, very volatile, and therefore our estimate of future contribution requirements can change dramatically in relatively short periods of time. Similarly, changes in interest rates can impact our contribution requirements. In a low interest rate environment, the likelihood of higher contributions in the future increases.

A disruption to certain of our manufacturing and distribution facilities could have a material adverse effect on our financial condition, results of operations or cash flows.

              The Ilion, New York, Lonoke, Arkansas, Mayfield, Kentucky, North Haven, Connecticut, Elizabethtown, Kentucky, Memphis, Tennessee, Windham, Maine, St. Cloud, Minnesota and Madison, North Carolina facilities are critical to our success. These facilities house our principal production, research, development, engineering, design, shipping and headquarters functions. Any event that causes a disruption of the operation of any of these facilities for even a relatively short period of time might have a material adverse affect on our ability to produce and ship products and to provide service to our customers.

Resources devoted to research and development may not yield new products that achieve commercial success.

              We devote significant resources to investment in research and development. The research and development process is expensive, prolonged and entails considerable uncertainty. Development of a new firearms product typically takes between one and three years. Because of the complexities and uncertainties associated with research and development, products that we are currently developing may not complete the development process or obtain the regulatory approvals required for us to market such products successfully. The development of new products may take longer and cost more to develop and may be less successful than we currently anticipate as a result of:

    products that may appear promising in development but fail to reach market within the expected or optimal time frame, or fail to ever reach market, for any number of reasons, including efficacy and the difficulty or excessive cost to manufacture; or

    failure to enter into or successfully implement optimal alliances where appropriate for the discovery and commercialization of products, or otherwise to maintain a consistent scope and variety of promising late-stage pipeline products; or

    failure of one or more of our products to achieve or maintain commercial viability.

              We cannot assure you that any of our products currently in our development pipeline will be commercially successful.

If we are unable to favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is not able to provide an unqualified attestation report on the effectiveness of our Company's internal controls over financial reporting, our stock price could be materially adversely affected.

              We will be required to certify to and report on, and our independent registered public accounting firm will be required to attest to, the effectiveness of our internal control over financial reporting on an annual basis, beginning with the second Annual Report on Form 10-K that we file with the SEC after completion of this offering. Following this offering, we expect to devote considerable

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resources, including management's time and other internal resources, to a continuing effort to comply with regulatory requirements relating to internal controls, as we have not previously been subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified attestation report on the effectiveness of our Company's internal controls over financial reporting, investor confidence and, in turn, our stock price could be materially adversely affected.

Our success depends on sustaining the strength of our brands.

              The willingness of consumers to purchase our products depends in part upon our ability to offer attractive brand value propositions. This in turn depends in part on consumers attributing a higher value to our products than to alternatives. If the difference in the value attributed to our products as compared to those of our competitors narrows, or if there is a perception of such a narrowing, consumers may choose not to buy our products. If we fail to promote and maintain the brand equity of our products, then consumer perception of our products' quality may be diminished and our financial condition, results of operations or cash flows could be materially adversely affected.

Our inability to protect our intellectual property or obtain the right to use intellectual property from third parties could impair our competitive advantage, reduce our revenue, and increase our costs.

              Our success and ability to compete depend in part on our ability to protect our intellectual property. We rely on a combination of patents, copyrights, trade secrets, trademarks, confidentiality agreements, and other contractual provisions to protect our intellectual property, but these measures may provide only limited protection. Our failure to enforce and protect our intellectual property rights or obtain the right to use necessary intellectual property from third parties could reduce our sales and increase our costs. In addition, the laws of some foreign countries do not protect proprietary rights as fully as do the laws of the United States.

              Patents may not be issued for the patent applications that we have filed or may file in the future. Our issued patents may be challenged, invalidated, or circumvented, and claims of our patents may not be of sufficient scope or strength, or issued in the proper geographic regions, to provide meaningful protection or any commercial advantage. We have registered certain of our trademarks in the United States and other countries. We may be unable to enforce existing trademarks or obtain new registrations of principle or other trademarks in key markets. Failure to obtain or enforce such registrations could compromise our ability to protect fully our trademarks and brands and could increase the risk of challenge from third parties to our use of our trademarks and brands.

Labor disputes may cause work stoppages, strikes and disruptions.

              The workforce at our Ilion, New York manufacturing facility is unionized and covered by a collective bargaining agreement, which expires on October 28, 2012. As a result, any labor disputes at this facility, including work stoppages, strikes and disruptions, could have a material adverse impact on our business.

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Risks Relating to our Indebtedness

We have a substantial amount of indebtedness, which could have a material adverse effect on our financial health and on our ability to obtain financing in the future and to react to changes in our business and which could adversely affect the price of our common stock.

              We have substantial indebtedness. As of June 30, 2009, after giving effect to the Transactions and the use of proceeds of this offering, we would have had $             million of total indebtedness. In addition, subject to restrictions in our debt instruments, we may incur additional indebtedness in the future. If new debt is added to our current debt levels, the related risks that we now face could intensify.

              Our significant amount of debt could limit our ability to satisfy our obligations, limit our ability to operate our business and impair our competitive position. For example, it could:

    adversely affect our stock price;

    make it more difficult for us to satisfy our obligations under the Notes or the ABL Revolver;

    increase our vulnerability to adverse economic and general industry conditions, including interest rate fluctuations, because a portion of our borrowings are and will continue to be at variable rates of interest;

    require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which would reduce the availability of our cash flow from operations to fund working capital, capital expenditures or other general corporate purposes;

    limit our flexibility in planning for, or reacting to, changes in our business and industry;

    place us at a disadvantage compared to competitors that may have proportionately less debt;

    limit our ability to obtain additional debt or equity financing due to applicable financial and restrictive covenants in our debt agreements; and

    increase our cost of borrowing.

              In addition, we cannot assure you that we will be able to refinance any of our debt or that we will be able to refinance our debt on commercially reasonable terms. If we were unable to make payments or refinance our debt or obtain new financing under these circumstances, we would have to consider other options, such as:

    sales of assets;

    sales of equity; or

    negotiations with our lenders to restructure the applicable debt.

Our debt instruments may restrict, or market or business conditions may limit, our ability to use some of our options.

Our debt instruments may restrict our current and future operations.

              The indenture governing the Notes and the credit agreement governing the ABL Revolver impose significant operating and financial restrictions on us and our subsidiaries. These restrictions limit our ability and the ability of our subsidiaries to, among other things:

    incur or guarantee additional debt, incur liens, or issue disqualified or preferred stock;

    declare or make distributions to our stockholders, repurchase equity or prepay subordinated debt;

    make loans and certain investments;

    enter into transactions with affiliates;

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    enter into mergers, acquisitions and other business combinations;

    consolidate or sell all or substantially all of our assets;

    amend or modify our governing documents;

    engage in businesses other than our business as currently conducted; and

    allow certain restrictions on the ability of the Guarantors to pay dividends or make other payments to the Company.

              In addition to the covenants listed above, the ABL Revolver requires us, under certain circumstances, to meet a specified financial ratio. Any of these restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs and could otherwise restrict corporate activities. See "Description of Certain Indebtedness."

              Our ability to comply with these covenants may be affected by events beyond our control, and an adverse development affecting our business could require us to seek waivers or amendments of covenants, alternative or additional sources of financing or reductions in expenditures. We cannot assure you that these waivers, amendments or alternative or additional financings could be obtained, or if obtained, would be on terms acceptable to us.

              A breach of any of the covenants or restrictions contained in any of our existing or future financing agreements, including our inability to comply with the financial covenant in the ABL Revolver, could result in an event of default under those agreements. Our default could allow the lenders under our financing agreements, if the agreements so provide, to discontinue lending, to accelerate the related debt as well as any other debt to which a cross acceleration or cross default provision applies, and to declare all borrowings outstanding under our financing arrangements to be due and payable. In addition, the lenders could terminate any commitments they had made to supply us with further funds. If the lenders require immediate repayments, we will not be able to repay them in full.

Substantially all of our assets are pledged as collateral under the Notes and the ABL Revolver.

              As of                        , 2009, there was $         million and $         million of senior secured indebtedness outstanding under the Notes and the ABL Revolver, respectively. Substantially all of our assets are pledged as collateral for these borrowings. As of                        , 2009, the ABL Revolver permitted additional borrowings of up to a maximum of $         million under the borrowing base as of that date. Furthermore, all of our wholly-owned domestic subsidiaries are guarantors of our obligations under the Notes and all of our wholly-owned domestic subsidiaries are either borrowers or guarantors under the ABL Revolver. Substantially all of our assets are pledged as collateral for these guarantees. If we are unable to repay all secured borrowings when due, whether at maturity or if declared due and payable following a default, the trustee or the lenders, as applicable, would have the right to proceed against the collateral pledged to the indebtedness and may sell the assets pledged as collateral in order to repay those borrowings, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Risks Relating to Owning Our Common Stock

Cerberus controls us and may have conflicts of interest with other stockholders in the future.

              Immediately after the offering, funds and accounts managed by Cerberus or its affiliated management companies, which we will refer to collectively as our controlling stockholder, will control approximately            % (approximately            % if the underwriters' option to purchase additional shares to cover over-allotments is exercised in full) of our common stock. As a result, our controlling stockholder will continue to be able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including

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potential mergers or acquisitions, asset sales and other significant corporate transactions. Our controlling stockholder will also have sufficient voting power to amend our organizational documents. We cannot assure you that the interests of our controlling stockholder will coincide with the interests of other holders of our common stock. Additionally, our controlling stockholder is in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Our controlling stockholder may also pursue, for its own account, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as our controlling stockholder continues to own a significant amount of the outstanding shares of our common stock, it will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.

Shares eligible for future sale may cause the market price of our common stock to decline, even if our business is doing well.

              Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales may occur, could adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Upon completion of this offering, our amended and restated certificate of incorporation will authorize us to issue            shares of common stock and we will have            shares of common stock outstanding. Of these outstanding shares, the            shares of common stock sold in this offering will be freely tradable, without restriction, in the public market unless purchased by our affiliates. The remaining            shares of common stock will be "restricted securities," as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), which will be freely tradable subject to applicable holding period, volume and other limitations under Rule 144 or Rule 701 of the Securities Act. As of                        , 2009, there were a total of            options outstanding, of which            were vested. Upon completion of this offering,             shares of these restricted securities will be subject to a lock-up agreement with the underwriters, restricting the sale of such shares for 180 days after the date of this offering. This lock-up agreement is subject to a number of exceptions and holders may be released from these agreements without prior notice at the discretion of                        . Moreover, after this offering, holders of an aggregate of                shares of our common stock will have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. Once we register these shares, they can be freely sold in the public market upon issuance, subject to the lock-up agreements described in the "Shares Eligible for Future Sale" section of this prospectus. See "Shares Eligible for Future Sale."

The shares you purchase in this offering will experience immediate and substantial dilution.

              The initial public offering price of our common stock will be substantially higher than the tangible book value per share of our outstanding common stock. Assuming an initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, purchasers of our common stock will effectively incur dilution of $            per share in the net tangible book value of their purchased shares. The shares of our common stock owned by existing stockholders will receive a material increase in the net tangible book value per share. You may experience additional dilution if we issue common stock in the future. As a result of this dilution, you may receive significantly less than the full purchase price you paid for the shares in the event of a liquidation. See "Dilution."

Provisions in our charter documents, certain agreements governing our indebtedness and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.

              Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws that will become effective upon the closing of this offering may discourage, delay or

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prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. Among others, these provisions:

    establish a staggered board of directors such that not all members of the board are elected at one time;

    upon such date that Cerberus, its Affiliates (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), or any person who is an express assignee or designee of Cerberus's rights under our amended and restated certificate of incorporation (and such assignee's or designee's Affiliates) (of these entities, the entity that is the beneficial owner of the largest number of shares is referred to as the Designated Controlling Stockholder) ceases to own, in the aggregate, at least 50% of the outstanding shares of our common stock, which we refer to as the 50% Trigger Date, allow the authorized number of our directors to be changed only by the affirmative vote of two-thirds of our shares of common stock or by resolution of our board of directors;

    upon the 50% Trigger Date, limit the manner in which stockholders can remove directors from the board;

    upon such date that Cerberus, its Affiliates, or any express assignee or designee of Cerberus, and such assignees or designee's Affiliates cease to own, in the aggregate, at least 30% of the outstanding shares of our common stock, which we refer to as the 30% Trigger Date, establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors;

    upon the 30% Trigger Date, require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent;

    limit who may call stockholder meetings;

    require any stockholder (or group of stockholders acting in concert) who seek to transact business at a meeting or nominate directors for election to submit a list of derivative interests in any company securities, including any short interests and synthetic equity interests held by such proposing stockholder;

    require any stockholder (or group of stockholders acting in concert) who seeks to nominate directors for election to submit a list of "related party transactions" with the proposed nominee(s) (as if such nominating person were a registrant pursuant to Item 404 of Regulation S-K, and the proposed nominee was an executive officer or director of the "registrant"); and

    authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a "poison pill" that would work to dilute the stock ownership of a potential hostile acquiror, effectively preventing acquisitions that have not been approved by our board of directors.

              Our amended and restated certificate of incorporation authorizes the board of directors to issue up to            shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined by our board of directors at the time of issuance or fixed by resolution without further action by the stockholders. These terms may include voting rights, preferences as to dividends and liquidation, conversion rights, redemption rights, and sinking fund

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provisions. The issuance of preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of our common stock. In addition, specific rights granted to holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent, or make it more costly to acquire or effect a change in control, thereby preserving the current stockholders' control.

              Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. The restrictions contained in Section 203 are not applicable to any of our existing stockholders that will own 15% or more of our outstanding voting stock upon the closing of this offering.

              In addition, under the credit agreement governing the ABL Revolver, a change in control may lead the lenders to exercise remedies such as acceleration of the loan, termination of their obligations to fund additional advances and collection against the collateral securing such loan. Also, under the indenture governing the Notes, a change of control may require us to offer to repurchase the all of the outstanding Notes for cash at a premium to the principal amount of the Notes.

A trading market may not develop for our common stock, and you may not be able to sell your stock.

              There is no established trading market for our common stock, and the market for our common stock may be highly volatile or may decline regardless of our operating performance. You may not be able to sell your shares at or above the initial public offering price.

              Prior to this offering, you could not buy or sell our common stock publicly. Subject to official notice of issuance, our common stock has been approved for quotation on the             . However, an active public market for our common stock may not develop or be sustained after this offering. If a market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at a price that is attractive to you, or at all.

              The initial public offering price will be determined through negotiation between us and representatives of the underwriters, and may not be indicative of the market price for our common stock after this offering.

The stock price of our common stock may be volatile.

              The price at which our common stock will trade after this offering may be volatile due to a number of factors, including:

    actual or anticipated fluctuations in our financial condition or annual or quarterly results of operations;

    changes in investors' and financial analysts' perception of the business risks and conditions of our business;

    changes in, or our failure to meet, earning estimates and other performance expectations of investors or financial analysts;

    unfavorable commentary or downgrades of our stock by equity research analysts;

    our success or failure in implementing our growth plans;

    changes in the market valuations of companies viewed as similar to us;

    changes or proposed changes in governmental regulations affecting our business;

    changes in key personnel;

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    depth of the trading market in our common stock;

    failure of securities analysts to cover our common stock after this offering;

    termination of the lock-up agreement or other restrictions on the ability of our existing stockholders to sell shares after this offering;

    future sales of our common stock;

    the granting or exercise of employee stock options or other equity awards;

    increased competition;

    realization of any of the risks described above; and

    general market and economic conditions.

              In addition, equity markets have experienced significant price and volume fluctuations that have affected the market prices for the securities of newly public companies for a number of reasons, including reasons that may be unrelated to our business or operating performance. These broad market fluctuations may result in a material decline in the market price of our common stock and you may not be able to sell your shares of common stock at prices you deem acceptable. In the past, following periods of volatility in the equity markets, securities class action lawsuits have been instituted against public companies. Such litigation, if instituted against us, could result in substantial cost and the diversion of management attention.

We have never operated as a public company and the obligations incident to being a public company will require additional expenditures of both time and resources.

              Prior to the consummation of this offering, we have never operated as a public company, and we expect that the obligations of being a public company, including substantial public reporting, auditing and investor relations obligations, will require significant additional expenditures, place additional demands on our management and require the hiring of additional personnel. These obligations will increase our operating expenses and could divert our management's attention from our operations. The Sarbanes-Oxley Act of 2002 and the SEC rules and regulations implementing that Act, as well as various            rules, will require us to implement additional corporate governance practices and may require further changes. These new rules and regulations will increase our legal and financial compliance costs, and make some activities more difficult, time-consuming and/or costly. In particular, our management will be required to conduct an annual evaluation of our internal controls, and have that evaluation attested to by our independent auditor. We also expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These new rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our board of directors and qualified members of our management team.

We are a "controlled company" within the meaning of the            rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

              Upon completion of this offering, Cerberus or its affiliated management companies will continue to control a majority of our outstanding common stock. As a result, we are a "controlled company" within the meaning of the            corporate governance standards. Under the            rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain            corporate governance requirements, including:

    the requirement that a majority of the board of directors consist of independent directors;

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    the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;

    the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

              Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors nor will our nominating/corporate governance and compensation committees consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the             corporate governance requirements.

We will have broad discretion over the use of the proceeds to us from this offering, and we may not use these funds in a manner of which you would approve or which would enhance the market price of our common stock.

              We will have broad discretion to use the net proceeds we receive from this offering, and you will be relying on the judgment of our board of directors and management regarding the use of these proceeds. Although we expect to use the net proceeds from this offering for working capital and other general corporate purposes, we have not allocated these net proceeds for specific purposes and cannot assure you that we will use these funds in a manner of which you would approve.

We may be restricted from paying dividends on our common stock.

              We are a holding company that does not conduct any business operations of our own, and, therefore, we are dependent upon cash dividends and other transfers from our subsidiaries to make dividend payments on our common stock.

              In addition, our ability to pay dividends will be restricted by agreements governing our debt, including the credit agreement governing our ABL Revolver and the indenture governing the Notes, and may be restricted by agreements governing any of our future indebtedness. Furthermore, we are permitted under the terms of our debt agreements to incur additional indebtedness that may severely restrict or prohibit the payment of dividends.

              Under the DGCL, our board of directors may not authorize payment of a dividend unless it is either paid out of our surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, it is paid out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

Our dividend policy may change.

              We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights, to receive dividends. Our board of directors may decide, in its discretion, at any time, to decrease the amount of dividends, otherwise modify or repeal the dividend policy or discontinue entirely the payment of dividends. Our board of directors could depart from or change our dividend policy, for example, if it were to determine that we had insufficient cash to take advantage of other opportunities with attractive rates of return.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

              This prospectus contains statements which constitute forward-looking statements, including statements relating to trends in the operations and financial results and the business and the products of Freedom Group as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend" and other similar expressions. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, and those important factors described elsewhere in this prospectus, including the matters set forth under the section entitled "Risk Factors," could affect (and in some cases have affected) our actual results and could cause such results to differ materially from estimates or expectations reflected in such forward-looking statements.

    We are subject to the effects of general global economic and market conditions. Increases in commodity prices, higher levels of unemployment, higher consumer debt levels, declines in consumer confidence, uncertainty about economic stability and other economic factors that may affect consumer spending or buying habits could adversely affect the demand for products we sell. If the current economic conditions and the related factors remain uncertain or persist, spread or deteriorate further, our business, results of operations or financial condition could be materially adversely affected.

    Continued volatility and disruption in the credit and capital markets may negatively impact our revenues and our, or our suppliers' or customers', ability to access financing on favorable terms or at all.

    Our ability to make scheduled payments of principal or interest on, or to refinance our obligations with respect to, our indebtedness, as well as our ability to comply with the covenants and restrictions contained in the instruments governing such indebtedness, will depend on our future operating performance and cash flow, which are subject to prevailing economic conditions, prevailing interest rate levels, and financial, competitive, business and other factors beyond our control including the responses of competitors, changes in customer inventory management practices, changes in customer buying patterns, regulatory developments and increased operating costs, all of which could materially adversely affect our business.

    The degree to which we are leveraged could have important consequences, all of which could materially adversely affect our business, including the following: (i) our ability to obtain additional financing for working capital or other purposes in the future may be limited; (ii) a substantial portion of our cash flow from operations is dedicated to the payment of principal and interest on our indebtedness, thereby reducing funds available for operations; (iii) certain of our borrowings are at variable rates of interest, which could cause us to be vulnerable to increases in interest rates; and (iv) we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures.

    The development of rural property in many locations has curtailed or eliminated access to private and public lands previously available for hunting, and the continuation of the development of rural property could materially adversely affect our industry as well as our business and results of operations.

    A significant portion of our sales are seasonal. As a result of the seasonal nature of our sales, our historical working capital financing needs generally have exceeded cash provided by operations during certain parts of the year. Our ability to meet our debt service and other obligations depends in significant part on customers purchasing our products during the fall hunting season. Notwithstanding our cost containment initiatives and continuing management

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      of costs, a decrease in demand during the fall hunting season for our higher priced, higher margin products would require us to further reduce costs or increase our reliance on borrowings under our credit facility to fund operations. If we are unable to reduce costs or increase our borrowings sufficiently to adjust to such a reduction in demand, our financial condition and results of operations could be adversely affected.

    Lead, copper, steel, brass and zinc prices historically have experienced significant increases and volatility primarily due to increased global demand. Furthermore, fuel and energy costs have increased and have remained volatile over the same time period, although at a slower rate of increase. We currently purchase copper and lead options contracts to hedge against price fluctuations of anticipated commodity purchases. With the volatility of pricing that we have recently experienced, there can be no assurance that we will not see further material adverse changes in commodity pricing or energy costs, and such further changes, were they to occur, could have a material adverse impact on our consolidated financial position, results of operations, or cash.

    Achieving the benefits of our acquisitions will depend in part on the integration of products and internal operating systems in a timely and efficient manner. Such integration may be unpredictable, and subject to delay because the products and systems typically were developed independently and were designed without regard to such integration. If we cannot successfully integrate such products and internal operating systems on a timely basis, we may lose customers and our business and results of operations may be harmed.

    We face significant domestic and international competition and our competitors vary according to product line. Certain of these competitors are subsidiaries of large corporations with substantially greater financial resources than we have. There can be no assurance that we will continue to compete effectively with all of our present competition, and our ability to so compete could be adversely affected by our leveraged condition.

    Sales made to Wal-Mart accounted for approximately 15% and 9% of our total sales for the year ended December 31, 2008 and for the six months ended June 30, 2009, respectively, and 12.9% and 6.3% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. Wal-Mart, together with another customer, accounted for approximately 21.3% and 16.2% of our accounts receivable balance as of December 31, 2008 and as of June 30, 2009, respectively. Our sales to Wal-Mart are generally not governed by a written long-term contract between the parties. In the event that Wal-Mart were to significantly reduce or terminate its purchases of firearms, ammunition and/or other products from us, our financial condition or results of operations could be adversely affected.

    We utilize numerous raw materials, including steel, zinc, lead, copper, brass, plastics and wood, as well as manufactured parts, which are purchased from one or a few suppliers. Any disruption in our relationship with these suppliers could increase our cost of operations. Such a disruption may result from or be amplified by the recent volatility of and uncertainty in the U.S. and global financial markets.

    The manufacture, sale and purchase of firearms and ammunition are subject to extensive governmental regulation on the federal, state and local levels. Changes in regulation could materially adversely affect our business by restricting the types of products we manufacture or sell or by imposing additional costs on us or our customers in connection with the manufacture or sale of our products. Regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. While we do not believe that existing federal and state legislation relating to the regulation of firearms and ammunition had a material adverse effect on our sales, no assurance can be given that more

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      restrictive regulations, if proposed or enacted, will not have a material adverse effect on us in the future.

    As a manufacturer of firearms, we were previously named as a defendant in certain lawsuits brought by municipalities or organizations challenging manufacturers' distribution practices and alleging that the defendants have also failed to include a variety of safety devices in their firearms. Our insurance primarily excludes coverage regarding such claims. In the event that additional such lawsuits were filed, or if certain legal theories advanced by plaintiffs were to be generally accepted by the courts, our financial condition and results of operations could be adversely affected.

    Our operation as a public company as a result of this offering will require significant additional expenditures, place additional demands on our management and require the hiring of more personnel to meet public reporting, auditing and investor relations requirements under the Sarbanes-Oxley Act of 2002 and the SEC rules and regulations implementing that Act, as well as various          rules. Our management will be required to conduct an annual evaluation of our internal controls, and have that evaluation attested to by our independent auditor. We expect these new rules and regulations to make director and officer liability insurance more expensive

              Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this prospectus.

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USE OF PROCEEDS

              We estimate that the net proceeds from the shares offered by us will be approximately $           million, after deducting the underwriting discount and estimated expenses of this offering and assuming we sell the shares for $          per share, the midpoint of the estimated price range set forth on the cover page of this prospectus.

              We will retain broad discretion over the allocation of the net proceeds of this offering. We intend to use the net proceeds of this offering for working capital and other general corporate purposes.

              We will not receive any proceeds from the sale of shares by the selling stockholders.

              Pending specific application of the net proceeds to us, we currently plan to invest the net proceeds received in a variety of capital preservation investments, including short-term, investment grade, interest-bearing securities.


DIVIDEND POLICY

              We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights to receive, dividends. The declaration and payment of any dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, and other considerations that our board of directors deems relevant. Our board of directors may decide, in its discretion, at any time, to decrease the amount or dividends, otherwise modify or repeal the dividend policy or discontinue entirely the payment of dividends.

              The agreements governing our indebtedness contain, and agreements governing any of our future indebtedness may contain, various covenants that limit our ability to pay dividends. We are also a holding company that does not conduct any business operations of our own. As a result, we are dependent upon cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our common stock. In addition, our subsidiaries are permitted to pay dividends to us subject to general restrictions imposed on dividend payments under the jurisdiction of incorporation or organization of each subsidiary. See "Risk Factors—Risks Related to the Offering—We may be restricted from paying dividends on our common stock" and "Risk Factors—Risks Related to Owning Our Capital Stock—Our dividend policy may change."

              The ability of our board of directors to declare a dividend is also subject to limits imposed by Delaware corporate law. Under Delaware law, our board of directors and the boards of directors of our corporate subsidiaries incorporated in Delaware, may declare dividends only to the extent of our "surplus," which is defined as total assets at fair market value minus total liabilities, minus statutory capital, or if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

              We did not pay any dividends during 2007, 2008 and to date during 2009.

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CAPITALIZATION

              The following table sets forth our cash and cash equivalents and our capitalization on a consolidated basis as of June 30, 2009:

    on an actual basis;

    on a pro forma basis, giving effect to the Refinancings, as if they had occurred on June 30, 2009; and

    on a pro forma, as adjusted basis, giving effect to the Refinancings, the Recapitalization and the sale by us of           shares of common stock in this offering at an assumed initial public offering price of $          per share, the midpoint of the range on the cover of this prospectus, and the receipt of the net proceeds thereof, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us, as if they had occurred on June 30, 2009.

              The pro forma information below is illustrative only and our capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. This table should be read in conjunction with "Use of Proceeds," "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of

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Operations" and our historical financial statements and their notes appearing elsewhere in this prospectus.

 
  As of June 30, 2009  
 
  (Unaudited)
 
 
  Actual   Pro Forma   Pro Forma,
as Adjusted(1)
 
 
  (in millions, except share
and per share data)

 

Cash and Cash Equivalents(2)

  $ 111.0   $ 18.6   $           
               

Long-term debt, including current portion:

                   
 

FGI

                   
   

ABL revolver(3)

  $   $ 51.9   $           
   

101/4% Senior Secured Notes due 2015(4)

        195.7               
 

Remington

                   
   

ABL revolver(5)

    51.8          
   

Term loan(5)

    17.7          
   

Capital leases

    1.3     1.3               
   

101/2% Senior Notes due 2011(6)

    201.6          
 

BFI

                   
   

Term loans(7)

    29.1          
   

Capital Leases

    0.4     0.4      
   

15% Subordinated Notes due 2012(8)

    21.4          
               
     

Total long-term debt, including current portion

    323.3     249.3               

Mezzanine Equity:

                   
 

Preferred Stock, $0.10 par value, 20,000,000 shares authorized of which 19,000,000 are Series A preferred, 18,697,464 Series A shares issued and outstanding, $227.4 aggregate liquidation preference, actual;        shares authorized, no shares issued and outstanding, no aggregate liquidation preference, pro forma and pro forma, as adjusted

    227.4     227.4      

Stockholders' Equity (Deficit):

                   
 

Common Stock, $0.01 par value, 20,000,000 shares authorized, 16,673,920 and 16,619,922 shares issued and outstanding, actual;        shares authorized,        shares issued and outstanding, pro forma;        shares authorized,         shares issued and outstanding, pro forma, as adjusted

    0.0     0.0               
 

Additional Paid-in Capital

    0.0     0.0               
 

Accumulated Equity (Deficit)

    (43.3 )   (45.9 )             
 

Accumulated Other Comprehensive Income (Loss)

    (37.0 )   (37.0 )             
               
     

Total Stockholders' Equity (Deficit)(9)

    (80.3 )   (82.9 )             
               

Total Capitalization

  $ 470.4   $ 393.8   $           
               

(1)
A $1.00 increase (decrease) in the assumed initial public offering price of $        per share, the midpoint of the range on the cover of this prospectus, would result in an approximately $         million increase or decrease in each of the pro forma, as adjusted, cash and cash equivalents, pro forma, as adjusted, additional paid-in capital, pro forma, as adjusted, total stockholders' equity (deficit) and pro forma, as adjusted, total capitalization assuming the number of shares offered by us, as set forth on the cover page of this prospectus (assuming that the Recapitalization had taken place and excluding shares issuable under options

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    outstanding other than shares underlying options that are exercisable within 60 days of                        , 2009), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us. An increase or decrease of 1.0 million shares in the number of shares offered by us would result in an approximately $             million increase or decrease in each of the pro forma, as adjusted, cash and cash equivalents, pro forma, as adjusted, additional paid-in capital, pro forma, as adjusted, total stockholders' equity (deficit) and pro forma, as adjusted, total capitalization, assuming the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

(2)
Cash on hand was approximately $111.0 million at June 30, 2009. As of August 31, 2009, cash on hand was approximately $8.5 million.

(3)
Consists of a $180.0 million senior secured asset based revolving credit facility. As of August 31, 2009, $13.8 million was outstanding under the ABL Revolver.

(4)
Consists of $200.0 million aggregate principal amount of the Notes, offered at a discounted price of 97.827%. The discount will be amortized into interest expense until the Notes mature.

(5)
The ABL revolver and term loan outstanding under the asset-based senior secured revolving credit facility under Remington's amended and restated credit agreement dated March 15, 2006 (the "Old Remington Credit Agreement") were repaid on July 28, 2009 in connection with the Refinancings.

(6)
The 101/2% Senior Notes due 2011 were redeemed on August 7, 2009 in connection with the Refinancings.

(7)
The term loans outstanding under BFI's amended and restated loan agreement, dated April 13, 2007 (the "Old BFI Credit Agreement") were repaid on July 29, 2009 in connection with the Refinancings.

(8)
The 15.0% Subordinated Notes due 2012 were repaid on August 7, 2009 in connection with the Refinancings.

(9)
When we repaid our indebtedness in the Refinancings, we wrote off approximately $2.3 million of deferred financing costs associated with such indebtedness, net of tax, which reduced our total stockholders' equity and our total capitalization.

              This table is based on            shares of common stock outstanding as of                        , 2009 (assuming that the Recapitalization had taken place and including common stock underlying options that are exercisable within 60 days of                        , 2009) and excludes, as of                        , 2009,            shares of common stock issuable upon exercise of options with a weighted average exercise price of $            per share.

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DILUTION

              Purchasers of the common stock in the offering will suffer an immediate dilution in net tangible book value per share. Dilution is the amount by which the price paid by the purchasers of common stock in this offering will exceed the pro forma net tangible book value per share of common stock immediately after this offering. Our net tangible book value at June 30, 2009 was $       million or $      per share of common stock. Net tangible book value per share represents our tangible assets less total liabilities and preferred stock, divided by the number of shares of common stock outstanding as of June 30, 2009. Our pro forma net tangible book value as of June 30, 2009 was $             million or $        per share of common stock. Pro forma net tangible book value gives effect to the Refinancings and the Recapitalization. After giving effect to the consummation of this offering, assuming an initial public offering price of $        per share, the midpoint of the range on the cover of this prospectus, and the application of the net proceeds therefrom, our pro forma net tangible book value as of June 30, 2009 would have been $         million or $        per share of common stock. This represents an immediate increase in pro forma net tangible book value to existing stockholders of $        per share of common stock and an immediate dilution to new investors of $        per share of common stock. The following table illustrates this per share dilution:

Assumed initial public offering price per share

        $         

Net tangible book value per share as of June 30, 2009

             

Decrease per share attributable to reclassification of preferred stock

                  

Pro forma net tangible book value per share as of June 30, 2009

                  

Increase in pro forma net tangible book value per share resulting from this offering

                  
             

Pro forma net tangible book value per share after this offering

                  
             

Pro forma dilution per share to new investors

        $         
             

Pro forma fully diluted dilution per share to new investors

        $         
             

              A $1.00 increase (decrease) in the assumed initial public offering price of $      per share, the midpoint of the range on the cover of this prospectus, would increase or decrease our as adjusted net tangible book value by $       million, the net tangible book value per share of common stock after this offering by $      per share of common stock, and the dilution per share of common stock to new investors is adjusted by $      per share of common stock, assuming the number of shares offered by us, as set forth on the cover page of this prospectus (assuming that the Recapitalization had taken place), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

              The following table summarizes, on the pro forma basis set forth above as of June 30, 2009, the difference between the total cash consideration paid and the average price per share paid by existing stockholders and the purchasers of common stock in this offering with respect to the number

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of shares of common stock purchased from us, before deducting estimated underwriting discounts, commissions and offering expenses payable by us.

 
  Shares Purchased   Total Consideration   Average Price
Per Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                          % $                       % $           

Purchasers of common stock in this offering(1)

                          %                         %             
                             

Total

                 100 % $              100 %      
                             

(1)
The            shares of common stock sold in this offering include            shares of common stock to be sold by existing stockholders.

              A $1.00 increase or decrease in the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, would increase or decrease total consideration paid by new investors and total consideration paid by all stockholders by $             million, assuming that the number of shares offered by us, as set forth on the front cover of this prospectus (assuming that the Recapitalization had taken place), remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us. An increase or decrease of 1.0 million shares in the number of shares offered by us would increase or decrease the total consideration paid to us by new investors and total consideration paid to us by all stockholders by $             million, assuming the assumed initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus, remains the same and after deducting the commissions and discounts and estimated offering expenses payable by us.

              The tables above are based on            shares of common stock outstanding as of June 30, 2009 (assuming that the Recapitalization had taken place) and assumes an initial public offering price of $            per share, the midpoint of the range on the cover of this prospectus. The number of shares of common stock outstanding after this offering excludes, as of June 30, 2009,            shares issuable upon exercise of options with a weighted average exercise price of $            per share. To the extent these options are exercised, there will be further dilution to purchasers of common stock in this offering. The amount presented in "Pro forma fully diluted dilution per share to new investors" assumes full exercise of the outstanding options listed above.

              If the underwriters exercise their over-allotment option to purchase shares from us and the selling stockholders in full, the following will occur:

    the pro forma percentage of shares of our common stock held by existing stockholders will decrease to approximately             % of the total number of pro forma shares of our common stock outstanding after this offering; and

    the pro forma number of shares of our common stock held by new public investors will increase to            , or approximately            % of the total pro forma number of shares of our common stock outstanding after this offering.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

              The selected historical financial data below for each of the years ended December 31, 2008 and 2007 and the period from April 1, 2006 to December 31, 2006 are derived from the consolidated financial statements of Freedom Group and the selected historical financial data below for the period from January 1, 2006 to March 31, 2006 is derived from the consolidated financial statements of Bushmaster Firearms, Inc. and its subsidiaries. Those consolidated financial statements have been audited by Grant Thornton LLP, registered independent public accounting firm, and are included elsewhere in this prospectus. The consolidated financial statements of Bushmaster Firearms, Inc. (predecessor) for the years ended December 31, 2005 and 2004 are not included in this prospectus. The selected historical financial data for each of the six month periods ended June 30, 2009 and 2008 are derived from the unaudited condensed consolidated financial statements of Freedom Group included elsewhere in this prospectus. Such unaudited condensed consolidated financial statements, in the opinion of our management, include all adjustments necessary for the fair presentation of our financial condition, results of operations and cash flows for such periods and as of such dates.

              You should read the following audited and unaudited selected historical financial data of Freedom Group in conjunction with "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements and other financial information appearing elsewhere in this prospectus.

              The results of operations for the years ended December 31, 2004, 2005 and 2006 reflect the results of operations of Bushmaster. Our results of operations for the year ended December 31, 2007 also include the results of operations of Remington, which we acquired on May 31, 2007. Due to the significant impact of the acquired Remington operations, our financial results for periods subsequent to May 31, 2007 may not be comparable to our results from prior-year periods. In addition, on December 13, 2007 we consummated the acquisition of certain assets of DPMS and on January 28, 2008, we consummated the Marlin Acquisition. Due to the impact of the acquired Marlin and DPMS operations, our results of operations for 2008 may not be comparable to our results from prior-year periods. For additional information regarding our acquisitions, see "Business—Company Overview—Our History and Corporate Structure."

              The following additional financial information has not been included here or elsewhere in this filing due to timing and the corresponding audited and unaudited financial information required: S&K related financial information, which we acquired on September 22, 2009, and AAC related financial information, which we acquired on October 2, 2009.

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  Predecessor   Successor  
 
  Year Ended
December 31,
(Unaudited)
  January 1
through
March 31,
  April 1
through
December 31,
  Year Ended
December 31,
  Six
Months Ended
June 30,
(Unaudited)
 
 
  2004   2005   2006   2006   2007(2)   2008(2)   2008   2009  
 
  (in millions, except share and per share data)
 

Statement of Operations Data:

                                                 

Net Sales(1)

  $ 46.6   $ 60.8   $ 16.8   $ 41.3   $ 384.9   $ 722.5   $ 316.8   $ 427.3  

Cost of Goods Sold

    28.7     37.3     9.8     24.6     306.0     524.4     229.8     282.4  

Gross Profit

    17.9     23.5     7.0     16.7     78.9     198.1     87.0     144.9  

Operating Expenses

    10.4     12.0     3.8     8.9     70.1     186.9     66.0     78.7  

Operating Income

    7.5     11.5     3.2     7.8     8.8     11.2     21.0     66.2  

Interest Expense

    0.3     0.4     0.1     4.5     21.2     30.8     15.2     14.6  

Income (Loss) before Taxes

    7.3     11.2     3.1     3.3     (12.4 )   (19.6 )   5.8     51.6  

Net Income (Loss)

    7.3     11.2     3.1     2.1     (9.0 )   (28.6 )   3.6     33.0  

Net Income (Loss) Applicable to Common Stock

    7.3     11.2     3.1     2.1     (9.9 )   (48.2 )   (6.1 )   23.0  

Net Income (Loss) Per Share(3):

                                                 

Basic

  $ 0.46   $ 0.70   $ 0.19   $ 0.13   $ (0.62 ) $ (2.97 ) $ (0.38 ) $ 1.41  

Diluted

  $ 0.46   $ 0.70   $ 0.19   $ 0.13   $ (0.62 ) $ (2.97 ) $ (0.38 ) $ 1.39  

Weighted Average Number of Shares Outstanding(3):

                                                 

Basic

    15,917,341     15,917,341     15,917,341     15,958,261     16,084,174     16,236,305     16,166,948     16,332,431  

Diluted

    15,917,341     15,917,341     15,917,341     16,187,849     16,084,174     16,236,305     16,166,948     16,554,230  

Operating and Other Financial Data:

                                                 

Net Cash provided by (used in):

                                                 
 

Operating Activities

  $ 6.8   $ 10.1   $ 3.0   $ 3.4   $ 70.8   $ 52.9   $ (39.4 ) $ 53.3  
 

Investing Activities

    1.2     2.8         (77.3 )   (90.7 )   (57.1 )   (49.0 )   (7.9 )
 

Financing Activities

    (8.2 )   (12.9 )   (2.9 )   74.6     43.9     57.3     74.9     (12.2 )

 

 
  As of December 31,   As of June 30,  
 
  2004   2005   2006   2007   2008   2008   2009  
 
  (in millions, except share and per share data)
 

Balance Sheet Data (end of period):

                                           

Cash and Cash Equivalents

  $   $   $ 0.7   $ 24.7   $ 77.8   $ 11.3   $ 111.0  

Working Capital(4)

    (2.3 )   1.2     6.8     175.7     224.8     227.3     271.6  

Total Assets

    20.5     18.5     86.1     628.3     672.9     725.0     734.0  

Long-Term Debt

    4.3     2.4     52.0     296.8     334.2     350.5     323.3  

Total Debt(5)

    14.3     11.2     52.0     300.3     337.4     352.2     324.3  

Stockholders' Equity (Deficit)

    0.7     2.4     27.3     (24.0 )   (106.8 )   (32.6 )   (80.3 )

(1)
Presented net of federal excise taxes. Federal excise taxes were $54.5, $31.0, $1.1, $2.7, $4.1 and $2.5 for the years ended 2008 and 2007, the three months ended March 31, 2006, the nine months ended December 31, 2006, and the years ended 2005 and 2004, respectively. Federal excise taxes were $38.7 and $22.4 for the six month periods ended June 30, 2009 and 2008, respectively.

(2)
Results for the year ended December 31, 2007 reflect the impact of the acquired Remington and DPMS operations, which were acquired in May 2007 and December 2007, respectively. Results for the year ended December 31, 2008 reflect the impact of the acquired Marlin operations, which was effective in January 28, 2008.

(3)
Net income (loss) per share and weighted average number of shares outstanding give effect to our proposed Recapitalization.

(4)
Working capital is defined as current assets less current liabilities.

(5)
Consists of short-term and long-term debt, current portion of long-term debt and capital lease obligations.

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UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL INFORMATION

              The following unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2009 is based on our historical consolidated financial statements, after giving effect to the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2009. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2008 and the year ended December 31, 2008 are based on our historical consolidated financial statements and the historical financial statements of Marlin, after giving effect to the Marlin Acquisition, the Refinancings and the Dakota Acquisition as if they had occurred on January 1, 2008. The unaudited pro forma condensed consolidated statements of operations for the twelve months ended June 30, 2009 are based on our historical consolidated financial statements, after giving effect to the Refinancings and the Dakota Acquisition as if they had occurred on July 1, 2008. The twelve months ended June 30, 2009 have been provided as management believes this is the most indicative period given the operational changes and acquisitions of the business. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 is based on our historical consolidated financial statements, after giving effect to the Refinancings as if they had occurred on June 30, 2009. The pro forma condensed, as adjusted consolidated statements of operations and balance sheet reflect the above adjustments and, in addition, give effect to the Recapitalization and the offering of our common stock and the use of proceeds thereof.

              Pro forma adjustments for the Marlin Acquisition were made to reflect Marlin's results of operations for the one month of January 2008 and the effects of purchase price accounting in connection with the acquisition thereof. The pro forma adjustments for the acquisition of Dakota Arms were made to reflect the acquisition as if it took place at the beginning of the period covered by the respective pro forma consolidated statement of operations.

              Pro forma adjustments for the Refinancings were made to reflect:

    the offering of the Notes, issued at a discounted price of 97.827%;

    a $51.9 million borrowing under the ABL Revolver;

    the repayment of $51.8 million of indebtedness outstanding under the Old Remington Credit Agreement;

    the repayment of $17.7 million of indebtedness outstanding under the term loan under the Old Remington Credit Agreement;

    the repayment of $29.1 million of indebtedness outstanding under the Old BFI Credit Agreement;

    the repayment of $200.0 million of Remington's outstanding 10.5% Senior Notes due 2011;

    the repayment of $21.4 million of BFI's outstanding 15.0% Subordinated Notes due 2012;

    the write-off of deferred financing costs of $3.8 million associated with debt being refinanced, and $1.6 million of unamortized bond premium;

    interest expense resulting from the issuance of $200.0 million of the Notes and the $51.9 million borrowing under the ABL Revolver;

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    amortization of certain deferred financing costs of $17.8 million on the Notes and the ABL Revolver;

    an assumed effective tax rate of 40.0%; and

              Non-capitalized transaction fees and expenses of $2.2 million were not included as a pro forma adjustment to the consolidated statements of operations nor were pro forma adjustments related to the Dakota Acquisition as the purchase price allocations are not yet complete and are not expected to be material.

              Pro forma adjustments for the Recapitalization were made to reflect the            -for-1 reverse split of all our outstanding common stock and the reclassification of all our outstanding preferred stock into a number of shares of our common stock determined by                        which will occur immediately prior to the closing of this offering.

              Pro forma adjustments for the offering give effect to the sale by us of            shares of common stock and the use of the proceeds thereof. The pro forma data assumes that the common stock is offered at $            per share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions on the shares offered by us and the estimated offering expenses payable by us.

              The unaudited pro forma consolidated financial information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," our historical consolidated financial statements and our notes and the historical consolidated financial statements of Marlin and the associated notes included elsewhere in this prospectus. The unaudited pro forma consolidated financial information is being furnished solely for informational purposes and is not intended to represent or be indicative of the consolidated results of operations or financial position that we would have reported had these transactions been completed as of the dates and for the periods presented, nor is it necessarily indicative of future results.

Additional Pro Forma Information

              The following additional pro forma financial information has not been included here or elsewhere in this filing due to timing and the corresponding audited and unaudited financial information required.

    S&K related financial information, which we acquired on September 22, 2009.

    AAC related financial information, which we acquired on October 2, 2009.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2009

(in millions, except share and per share data)

 
   
   
  Pro Forma Adjustments    
 
 
   
  Dakota Arms
Historical
Jan 1 – May 31,
2009
   
 
 
  FGI Historical
Jan 1 – June 30,
2009
  Refinancings   Recapitalization
and Common
Stock Offering
  Pro Forma
Jan 1 – June 30,
2009
 

Net Sales

  $ 427.3   $ 1.1   $   $     $ 428.4  

Cost of Goods Sold

    282.4     0.4               282.8  
                       
 

Gross Profit

    144.9     0.7               145.6  

Selling, General and Administrative Expenses

    75.2     1.0               76.2  

Research and Development Expenses

    5.4                   5.4  

Other (Income) Expense

    (1.9 )                 (1.9 )
                       
 

Operating Income (Loss)

    66.2     (0.3 )             65.9  

Interest Expense

    14.6         (1.1 )(a)         13.5  
                       
 

Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary

    51.6     (0.3 )   1.1           52.4  
                       

Income Tax Provision (Benefit)

    18.7     (0.1 )   0.4 (b)         19.0  

Equity in Losses from Unconsolidated Joint Venture

    0.1                   0.1  

Net Income (Loss)

    32.8     (0.2 )   0.7         33.3  

Add: Net Loss Attributable to Noncontrolling Interest

    0.2                   0.2  
                       
 

Net Income (Loss) Attributable to Controlling Interest

  $ 33.0   $ (0.2 ) $ 0.7   $     $ 33.5  
                       

Accretion of Preferred Stock

    10.0                 10.0  

Net Income (Loss) Applicable to Common Stock

  $ 23.0   $ (0.2 ) $ 0.7   $     $ 23.5  

Net Income (Loss) Per Share—Basic

    1.41                (c)      

Net Income (Loss) Per Share—Diluted

    1.39                (c)      

Weighted Average Number of Shares Outstanding—Basic

    16,332,431                (c)      
                               

Weighted Average Number of Shares Outstanding—Diluted

    16,554,230                (c)      
                       

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008

(in millions, except share and per share data)

 
  FGI
Historical
Jan 1 –
June 30,
2008
  Historical
Dakota Arms
Jan 1 –
June 30,
2008
   
  Pro Forma Adjustments    
 
 
  Historical
Marlin
Jan 1 – 31,
2008
  Pro Forma
Jan 1 –
June 30,
2008
 
 
  Marlin   Refinancings   Recapitalization
and Common
Stock Offering
 

Net Sales

  $ 316.8   $ 1.8   $ 4.9   $   $   $     $ 323.5  

Cost of Goods Sold

    229.8     0.4     4.0     0.1 (d)             234.3  
                               
 

Gross Profit

    87.0     1.4     0.9     (0.1 )             89.2  

Selling, General and Administrative Expenses

    62.4     1.7     0.2                   64.3  

Research and Development Expenses

    3.4         0.1                   3.5  

Impairment Charges

                               

Other (Income) Expense

    0.2                           0.2  
                               
 

Operating Income

    21.0     (0.3 )   0.6     (0.1 )             21.2  

Interest Expense

    15.2                 (1.6 )(e)         13.6  
                               
 

Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary

    5.8     (0.3 )   0.6     (0.1 )   1.6           7.6  
                               

Income Tax Provision (Benefit)

    2.2     (0.1 )   0.2     (0.0 )   0.6 (b)         2.9  

Equity in Losses from Unconsolidated Joint Venture

                               

Net Income (Loss)

    3.6     (0.2 )   0.4     (0.1 )   1.0         4.7  

Add: Net Loss Attributable to Noncontrolling Interest

                               
                               
 

Net Income (Loss) Attributable to Controlling Interest

  $ 3.6   $ (0.2 ) $ 0.4   $ (0.1 ) $ 1.0   $     $ 4.7  
                               

Accretion of Preferred Stock

    9.7                         9.7  

Net Income (Loss) Applicable to Common Stock

  $ (6.1 ) $ (0.2 ) $ 0.4   $ (0.1 ) $ 1.0   $     $ (5.0 )

Net Income (Loss) Per Share— Basic

    (0.38 )                      (c)      

Net Income (Loss) Per Share—Diluted

    (0.38 )                      (c)      

Weighted Average Number of Shares Outstanding—Basic

    16,166,948                        (c)      
                                           

Weighted Average Number of Shares Outstanding—Diluted

    16,166,948                        (c)      
                               

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2008

(in millions, except share and per share data)

 
   
   
   
  Pro Forma Adjustments    
 
 
  FGI
Historical
Jan 1 – Dec 31,
2008
   
  Historical
Marlin
Jan 1 – 31,
2008
   
 
 
  Historical
Dakota Arms
Jan 1 – Dec 31, 2008
  Marlin   Refinancings   Recapitalization
and Common
Stock Offering
  Pro Forma
Jan 1 – Dec 31,
2008
 

Net Sales

  $ 722.5   $ 3.0   $ 4.9   $   $   $     $ 730.4  

Cost of Goods Sold

    524.4     0.6     4.0     0.1 (d)             529.1  
                               
 

Gross Profit

    198.1     2.4     0.9     (0.1 )             201.3  

Selling, General and Administrative Expenses

    133.7     2.8     0.2                   136.7  

Research and Development Expenses

    7.1         0.1                   7.2  

Impairment Charges

    47.4                           47.4  

Other (Income) Expense

    (1.3 )   0.2                       (1.1 )
                               
 

Operating Income

    11.2     (0.6 )   0.6     (0.1 )             11.1  

Interest Expense

    30.8                 (3.5 )(f)         27.3  
                               
 

Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary

    (19.6 )   (0.6 )   0.6     (0.1 )   3.5           (16.2 )
                               

Income Tax Provision (Benefit)

    9.1     (0.2 )   0.2     (0.0 )   1.4 (b)         10.5  

Equity in Losses from Unconsolidated Joint Venture

                               

Net Income (Loss)

    (28.7 )   (0.4 )   0.4     (0.1 )   2.1         (26.7 )

Add: Net Loss Attributable to Noncontrolling Interest

    0.1                           0.1  
                               
   

Net Income (Loss) Attributable to Controlling Interest

  $ (28.6 ) $ (0.4 ) $ 0.4   $ (0.1 ) $ 2.1   $     $ (26.6 )
                               

Accretion of Preferred Stock

    19.6                         19.6  

Net Income (Loss) Applicable to Common Stock

  $ (48.2 ) $ (0.4 ) $ 0.4   $ (0.1 ) $ 2.1   $     $ (46.2 )

Net Income (Loss) Per Share—Basic

    (2.97 )                      (c)      

Net Income (Loss) Per Share—Diluted

    (2.97 )                      (c)      

Weighted Average Number of Shares Outstanding—Basic

    16,236,305                        (c)      
                                           

Weighted Average Number of Shares Outstanding—Diluted

    16,236,305                        (c)      
                               

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Twelve Months Ended June 30, 2009

(in millions, except share and per share data)

 
   
   
   
  Add
Dakota Arms
Historical
July 1, 2008 –
June 30,
2009
   
   
  Twelve
Months
Ended
Pro Forma
June 30,
2009
 
 
  FGI
Historical
Jan 1 –
Dec 31,
2008
  Less
Historical
Jan 1 –
June 30,
2008
  Add
Historical
Jan 1 –
June 30,
2009
  Pro Forma Adjustments  
 
  Refinancings   Recapitalization
and Common
Stock Offering
 

Net Sales

  $ 722.5   $ 316.8   $ 427.3   $ 2.3   $   $     $ 835.3  

Cost of Goods Sold

    524.4     229.8     282.4     0.6               577.6  
                               
 

Gross Profit

    198.1     87.0     144.9     1.7               257.7  

Selling, General and Administrative Expenses

    133.7     62.4     75.2     2.1               148.6  

Research and Development Expenses

    7.1     3.4     5.4                   9.1  

Impairment Charges

    47.4                           47.4  

Other (Income) Expense

    (1.3 )   0.2     (1.9 )   0.2               (3.2 )
                               
 

Operating Income

    11.2     21.0     66.2     (0.6 )             55.8  

Interest Expense

    30.8     15.2     14.6         (3.0 )(g)         27.2  
                               
 

Income (Loss) from Continuing Operations before Taxes, Equity in Losses from Unconsolidated Joint Venture and Noncontrolling Interest in Consolidated Subsidiary

    (19.6 )   5.8     51.6     (0.6 )   3.0           28.6  
                               

Income Tax Provision (Benefit)

    9.1     2.2     18.7     (0.2 )   1.2 (b)         26.6  

Equity in Losses from Unconsolidated Joint Venture

            0.1                   0.1  

Net Income (Loss)

    (28.7 )   3.6     32.8     (0.4 )   1.8         1.9  

Add: Net Loss Attributable to Noncontrolling Interest

    0.1         0.2                   0.3  
                               
 

Net Income (Loss) Attributable to Controlling Interest

  $ (28.6 ) $ 3.6   $ 33.0   $ (0.4 ) $ 1.8   $     $ 2.2  
                               

Accretion of Preferred Stock

    19.6     9.7     10.0                 19.9  

Net Income (Loss) Applicable to Common Stock

  $ (48.2 ) $ (6.1 ) $ 23.0   $ (0.4 ) $ 1.8         $ (17.7 )

Net Income (Loss) Per Share—Basic

    (2.97 )                      (c)      

Net Income (Loss) Per Share—Diluted

    (2.97 )                      (c)      

Weighted Average Number of Shares Outstanding— Basic

    16,236,305                        (c)      
                                           

Weighted Average Number of Shares Outstanding— Diluted

    16,236,305                        (c)      
                               

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc. and Subsidiaries

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2009

(in millions, except share and per share data)

 
   
  Pro Forma Adjustments    
 
 
  FGI
Historical
June 30, 2009
  Refinancings   Recapitalization
and
Common
Stock
Offering
  Pro Forma
June 30, 2009
 

ASSETS

                         

Current Assets

                         

Cash and Cash Equivalents

  $ 111.0   $ (92.4 )(h) $     $ 18.6  

Accounts Receivable Trade—net

    134.2                 134.2  

Inventories—net

    129.2                 129.2  

Supply Inventory—net

    5.7                 5.7  

Prepaid Expenses and Other Current Assets

    20.6                 20.6  

Assets Held for Sale

    1.9                 1.9  

Deferred Tax Assets

    12.3                 12.3  
                   
 

Total Current Assets

    414.9     (92.4 )         322.5  

Property, Plant and Equipment—net

    117.1                 117.1  

Goodwill and Intangibles—net

    181.9                 181.9  

Debt Issuance Costs—net

    3.8     14.0 (i)         17.8  

Other Noncurrent Assets

    16.3                 16.3  
                   
 

Total Assets

  $ 734.0   $ (78.4 ) $     $ 655.6  
                   

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)

                         

Current Liabilities

                         

Accounts Payable

  $ 61.9               $ 61.9  

Book Overdraft

                     

Short-Term Debt

    1.0                 1.0  

Current Portion of Long-Term Debt

    0.7                 0.7  

Current Portion of Product Liability

    3.5                 3.5  

Income Taxes Payable

    11.3     (1.8 )(j)         9.5  

Other Accrued Liabilities

    64.9                 64.9  
                   
 

Total Current Liabilities

    143.3     (1.8 )         141.5  

Long-Term Debt, net of Current Portion

    322.6     (74.0 )(k)         248.6  

Retiree Benefits, net of Current Portion

    84.3                 84.3  

Product Liability, net of Current Portion

    11.0                 11.0  

Deferred Tax Liabilities

    11.8                 11.8  

Other Long-Term Liabilities

    13.9                 13.9  
                   
 

Total Liabilities

    586.9     (75.8 )       $ 511.1  
                   

Preferred Stock, $0.10 par value, 20,000,000 shares authorized of which 19,000,000 are Series A preferred, 18,697,464 Series A shares issued and outstanding,            aggregate liquidation preference, actual;            shares authorized, no shares issued and outstanding, no aggregate liquidation preference, pro forma

    227.4             (l)      
                   
 

Total Mezzanine Equity

    227.4                    
                   

Accumulated Equity (Deficit)

    (80.3 )   (2.6 )(m)            
                   
 

Total Stockholders' (Deficit)

    (80.3 )   (2.6 )            
                   
 

Total Liabilities, Stockholders' Equity (Deficit) and Mezzanine Equity

  $ 734.0   $ (78.4 )       $    
                   

See the accompanying notes to these Unaudited Pro Forma Condensed Consolidated Financial Statements.

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Freedom Group, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

(a)
Adjustments made to eliminate historical interest expense of $14.4 million for the six months ended June 30, 2009, which reflects the elimination of historical interest expense on the revolving credit facility and term loan under the Old Remington Credit Agreement, Remington's 10.5% Senior Notes due 2011, the term loans under the Old BFI Credit Agreement and BFI's 15.0% Subordinated Notes due 2012 (collectively, the "Refinanced Debt"). The adjustments also reflect a $0.3 million elimination of deferred financing costs amortization for the six months ended June 30, 2009.

Adjustments reflect incremental interest expense of $11.8 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. For each 0.25% increase or decrease in the blended weighted-average interest rate, our annual interest expense would increase or decrease by $0.7 million. The interest expense adjustment includes amortization of deferred financing costs and original issue discount of $1.8 million related to the Refinanced Debt.

(b)
Reflects the estimated tax effect of the pro forma adjustments on the historical results of Freedom Group, utilizing an estimated combined federal and state statutory tax rate of 40.0% to compute the estimated tax expense or benefit of the Refinancings.

(c)
Net income (loss) per share and weighted average number of shares outstanding gives effect to our proposed Recapitalization.

(d)
Reflects adjustment related to the rollout of inventory to fair value in connection with purchase accounting for the Marlin Acquisition pursuant to SFAS 141R.

(e)
Adjustments made to eliminate historical interest expense of $14.9 million for the six months ended June 30, 2008, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.3 million elimination of deferred financing costs amortization for the six months ended June 30, 2008.

Adjustments reflect incremental interest expense of $11.8 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $1.8 million related to the Refinanced Debt.

(f)
Adjustments made to eliminate historical interest expense of $30.1 million for the year ended December 31, 2008, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.6 million elimination of deferred financing costs amortization for the year ended December 31, 2008.

Adjustments reflect incremental interest expense of $23.6 million related to the issuance of the Notes issued in the Refinancings and borrowings under the ABL Revolver, which represents a blended weighted-average interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $3.6 million related to the Refinanced Debt.

(g)
Adjustments made to eliminate historical interest expense of $29.6 million for the pro forma twelve months ended June 30, 2009, which reflects the elimination of historical interest expense on the Refinanced Debt. The adjustments also reflect a $0.6 million elimination of deferred financing costs amortization for the pro forma twelve months ended June 30, 2009.

Adjustments reflect incremental interest expense of $23.6 million related to the issuance of the Notes and borrowings under the ABL Revolver, which represents a blended weighted-average

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Freedom Group, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information (Continued)

    interest rate of 9.3%. The interest expense adjustment includes an amortization of deferred financing costs and original issue discount of $3.6 million related to the Refinanced Debt.

(h)
Reflects the use of $92.4 million cash on hand in connection with the Refinancings.

(i)
Adjustment reflects the write-off of $3.8 million of unamortized deferred financing costs related to the Refinanced Debt, offset by $17.8 million of assumed deferred financing costs related to the Refinancings.

(j)
Reflects the estimated tax effect of the pro forma adjustments associated with the elimination of unamortized deferred financing fees, the non-capitalized fees paid in connection with the Refinancings and the removal of the premium of the Refinanced Debt.

(k)
This adjustment reflects the repayment of the Refinanced Debt, offset by the long-term debt incurred as part of the Refinancings.

(in millions)

       

Long-term debt being repurchased or repaid

  $ (321.6 )

ABL Revolver borrowing

    51.9  

Notes (issued at a discount to maturity)

    195.7  
       

Net adjustment

  $ (74.0 )
       
(l)
Reflects the reclassification of all our outstanding preferred stock into a number of shares of our common stock determined by            , which will occur immediately prior to the closing of this offering.

(m)
Reflects the tax effected adjustments at a 40% assumed statutory rate associated with the elimination of unamortized deferred financing fees, the non-capitalized fees paid in connection with the Refinancings and the removal of the premium of the Refinanced Debt.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

              You should read the following discussion of our results of operations and financial condition together with the "Selected Historical Consolidated Financial Data," "Unaudited Pro Forma Condensed Consolidated Financial Information" and the audited and unaudited historical consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" section of this prospectus. Actual results may differ materially from those contained in any forward-looking statements. Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Company Overview

              We are one of the leading firearms, ammunition and related products companies in the world, with #1 commercial market positions across all of our major product categories in the United States, the largest firearms and ammunition market globally. With a history dating back to 1816, we are America's oldest and largest manufacturer of firearms and ammunition. We are the only major U.S. manufacturer of both firearms and ammunition, which we believe is a significant competitive advantage and supports our market leadership position. We believe our scale and product breadth are unmatched within the industry, with approximately 1.1 million long guns and 2.0 billion rounds of ammunition sold during the twelve months ended June 30, 2009. We believe this leadership position across all of our major product categories is evidenced by our #1 U.S. commercial market shares in shotguns, rifles and ammunition.

              We have made significant progress in our transition to a customer-focused sales and marketing organization, successfully creating a single customer facing platform with the ability to leverage our flexible manufacturing capability across our end-markets to quickly respond to changes in customer preferences and demands. Our 11 manufacturing facilities and over 2,700 employees represent the largest domestic manufacturing presence in the industry, enabling us to deliver our products throughout the United States and internationally to over 80 countries. In addition, our product leadership and innovation is supported by our freestanding research and development facility.

              We continue to look for opportunities to improve our quality and efficiencies in our manufacturing facilities as we strive to be a customer focused company in an increasingly demanding global marketplace. Accordingly, we have undertaken an effort to accelerate existing initiatives in the area of lean manufacturing, six sigma and other continuous improvement projects focused on inventory management, cost reductions and productivity.

              In addition, we are committed to enhancing our core businesses and positioning ourselves to take advantage of opportunities to strategically grow and improve our business by identifying and pursuing add-on strategic acquisitions or investments that expand and enhance our brand, product and intellectual property portfolio. We seek to acquire highly complementary products, brands or external capabilities to fill gaps in our portfolio or extend our brands and channel relationships.

              Despite the current macroeconomic environment, we have experienced no significant adverse impact in our overall sales. We believe the overall demand for certain of our products has picked up since the change in U.S. Presidential administration and consumers' concerns that the new administration may support more restrictive firearms and ammunition legislation. Management's strategy in light of this uncertain economic and political environment has been to focus on manufacturing efficiencies, research and development and meeting our customers' demands. In

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addition, we have remained committed and focused on our marketing and merchandising efforts across all product categories.

              One of our core strategies is to consistently introduce new and innovative products. These efforts are focused on the introduction or planned launch of the M887 Nitro Mag shotgun, the .30 R-15, R-15, R-25, Adaptive Combat Rifle, .50 BMG, .338 MXLR/MX, M597 VTR, and .308 DPMS firearms, and a variety of new ammunition products. We are also engaged in selective efforts to promote certain of our products through marketing and promotional activities, including ammunition and firearms customer and end-user rebates.

              Due to continuing volatility of metal, energy and transportation costs, management continues to assess our pricing strategies. As a result of this approach, firearms prices generally held steady during 2008 and into 2009 in most categories, and demand remained stable. In our ammunition segment, pricing has been relatively flat across our product offerings since mid-2008 although commodity costs associated with ammunition have continued to show volatility.

              Management's strategy in light of the current economic and political environment has been to continue to introduce new products, enhance our sales and marketing efforts and improve overall performance in working capital and operating productivity. Finally, we continue to pursue growth initiatives in our government, military, and law enforcement divisions along with broadening our brand awareness with selective licensing arrangements.

Recent Developments

Recent Transactions

              In July 2009, in connection with the Refinancings, we issued $200.0 million of the Notes, and entered into the ABL Revolver. We used the proceeds of the Notes, together with proceeds from $51.9 million of borrowings under the ABL Revolver and cash on hand, to repay the outstanding indebtedness (including any interest due and owing to the date of redemption or repayment), and to pay related transaction fees and expenses of $20.1 million. See Note 8 to Freedom Group's June 30, 2009 unaudited consolidated financial statements for further information regarding the Refinancings.

Acquisition of Dakota Arms

              On June 5, 2009, we acquired certain assets of Dakota Arms, LLC, which primarily consisted of inventory and equipment for approximately $1.8 million. Dakota Arms is a producer of high-end rifles, shotguns and ammunition. This acquisition positions us in the largely customized, precision, large caliber and safari segments of the market, with premium and aspirational firearms and ammunition brands including Dakota Arms, Miller Arms and Nesika, as well as Dan Walter premium gun cases.

Acquisition of S&K

              On September 22, 2009 we acquired certain assets from S&K Industries, Inc. ("S&K"), a supplier of wood stocks for our firearms operations for approximately $3.8 million. S&K was founded as a wood product manufacturing company in 1961 and is based in Lexington, Missouri. The assets acquired are primarily inventory, machinery and equipment. We believe this acquisition will improve efficiencies in our firearms manufacturing processes as well as reduce certain costs of acquiring the wood stocks.

Acquisition of Advanced Armament Corporation

              On October 2, 2009 we completed the acquisition of certain assets of Advance Armament Corporation ("AAC") for approximately $10.2 million, with additional contingent consideration of approximately $8.0 million due in 2015 upon achievement of certain employment and financial

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conditions. AAC manufactures and markets a full line of firearm accessory products used in certain military (including current use by the DOD), law enforcement and commercial markets.

Current Sales Demand

              Our industry has experienced a significant increase in certain firearms and ammunition demand since late 2008. We believe a number of consumers have been concerned about increased firearms and ammunition regulations as a result of the new administration in connection with the 2008 Presidential election. We view these increases in demand as having significant long-term benefits, including expanding the popularity of shooting sport categories, as well as providing an opportunity to cultivate new, and renew existing, long-term customer relationships across our portfolio of products and brands. These increases have resulted in sales growth of 47.2% and 38.7% in our firearms and ammunition segments, respectively, during the three months ended June 30, 2009 versus the three months ended June 30, 2008, and sales growth of 41.6% and 27.1% in our firearms and ammunitions segments, respectively, during the six months ended June 30, 2009 versus the six months ended June 30, 2008 (including five months of sales related to the Marlin Acquisition). The remaining month of activity for Marlin is not significant. However, these increases may not be sustainable, and demand for our firearms and ammunition may decrease for any number of reasons. See "Risk Factors—Risks Relating to Our Business—We have experienced a significant increase in demand for our products since late 2008. There can be no assurance that this increased demand for firearms and ammunition will continue in the medium to long-term."

Increase of Management Depth

              We have strived to assemble a senior management team with a broad array of functional expertise and industry experience in an effort to increase our leadership position in the industry and create depth and expertise in critical areas such as operations, sales and marketing and back-office support. During the last two years we filled the following important positions with highly experienced managers: Chief Executive Officer, Chief Operating Officer, Chief Sales Officer, Chief Information Officer, Chief Marketing Officer, Chief Technology Officer and General Counsel. We believe we have sufficient talent to manage our continued growth, whether organic or through additional acquisitions.

17 HMR Ammunition Recall

              On August 14, 2009, the Company announced a product warning campaign directed towards the public and its consumers concerning the 17 HMR ammunition it markets and sells under the Remington brand name. The Company purchases this ammunition from a third party and was advised by the manufacturer that its ammunition should not be used with any semi-automatic firearms. The Company is recalling the ammunition to apply applicable safety warnings. Also, since there is not another source of ammunition for the Remington Model 597 17 HMR semi-automatic rifles, the Company is offering a coupon for the voluntary replacement of the Remington Model 597 17 HMR semi-automatic rifle with other Remington firearms. The Company manufactured and sold this semi-automatic rifle from July 2002 to June 2007. The Company accrued $6.6 million as of and for the three months ending June 30, 2009 to reflect the estimated cost of this ammunition recall and rifle replacement program. Actual costs related to these actions will depend on several factors, including the number of consumers who respond to the program, the costs of administration of the program, and whether costs will be recovered from the supplier.

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Results of Operations

Three and Six Month Periods Ended June 30, 2009 as Compared to the Three and Six Month Periods Ended June 30, 2008

Net Sales

              The following table compares net sales by reporting segment for each of the periods presented:

 
  Three Months Ended June 30,  
 
  2008   Percentage of
Total
  2009   Percentage of
Total
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Firearms

  $ 101.4     61.7 % $ 149.3     63.5 % $ 47.9     47.2 %

Ammunition

    58.6     35.7     81.3     34.6     22.7     38.7  

All Other

    4.3     2.6     4.5     1.9     0.2     4.7  
                           
 

Total

  $ 164.3     100.0 % $ 235.1     100.0 % $ 70.8     43.1 %
                           

 

 
  Six Months Ended June 30,  
 
  2008   Percentage of
Total
  2009   Percentage of
Total
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Firearms

  $ 190.9     60.3 % $ 270.3     63.2 % $ 79.4     41.6 %

Ammunition

    116.3     36.7     147.8     34.6     31.5     27.1  

All Other

    9.6     3.0     9.2     2.2     (0.4 )   (4.2 )
                           
 

Total

  $ 316.8     100.0 % $ 427.3     100.0 % $ 110.5     34.9 %
                           

Firearms

              Net sales for the three months ended June 30, 2009 were $149.3 million, an increase of $47.9 million, or 47.2%, as compared to the three months ended June 30, 2008. Centerfire rifle sales increased by $36.3 million, or 50.6%, as compared to the prior-year period, primarily due to an increase of $30.9 million as a result of 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 by $9.0 million, or 40.5%, as compared to the prior-year period. Rimfire rifle sales increased by $1.9 million, or 34.1%, as compared to the prior-year period.

              Net sales for the six months ended June 30, 2009 were $270.3 million, an increase of $79.4 million, or 41.6%, as compared to the six months ended June 30, 2008 (including five months of sales related to the Marlin Acquisition). Centerfire rifle sales increased by $59.0 million, or 44.2%, as compared to the prior-year period, primarily due to an increase of $50.5 million as a result of higher sales volumes of Bushmaster and DPMS branded modern sporting rifles and an increase of $4.9 million due to sales of newly launched Remington branded modern sporting rifles. Shotgun sales increased by $11.5 million, or 26.8%, as compared to the prior-year period, mainly due to a $13.0 million increase in sales of certain of our shotguns, partially offset by a $1.0 million decrease in shotgun sales of our internationally sourced Remington branded products. Rimfire rifle sales increased by $2.2 million, or 20.7%, as compared to the prior-year period.

Ammunition

              Net sales for the three months ended June 30, 2009 were $81.3 million, an increase of $22.7 million, or 38.7%, as compared to the three months ended June 30, 2008. Centerfire ammunition

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sales increased by $13.8 million, or 42.9%, as compared to the prior-year period. The increase in sales is attributable mainly to strong market demand for rifle and pistol ammunition combined with volume growth across most other product categories. Rimfire ammunition sales increased by $2.0 million, or 44.3%, as compared to the prior-year period, primarily due to increased volume associated with additional production capacity within these product categories. Shotshell ammunition sales increased by $4.1 million, or 25.5%, as compared to the prior-year period, primarily due to an increased allocation of production capacity to higher margin products.

              Net sales for the six months ended June 30, 2009 were $147.8 million, an increase of $31.5 million, or 27.1%, as compared to the six months ended June 30, 2008, primarily due to increased sales volumes of our centerfire and rimfire products as a result of increased demand from our wholesalers, dealers and chain customers. Centerfire ammunition sales increased by $21.0 million, or 33.3%, as compared to the prior-year period. The increase in sales is attributable mainly to strong market demand for rifle and pistol ammunition combined with volume growth across most other product categories. Rimfire ammunition sales increased by $4.1 million, or 47.8%, as compared to the prior-year period, primarily due to increased volume associated with additional production capacity within these product categories. Shotshell ammunition sales increased by $3.0 million, or 9.1%, as compared to the prior-year period, primarily due to an increased allocation of production capacity to higher margin products.

All Other

              Net sales were $4.5 million in all other businesses for the three months ended June 30, 2009, an increase of $0.2 million, or 4.7%, as compared to the prior-year period. This increase was principally due to sales increases in our accessories business and the launch of our EOTAC apparel joint venture in late 2008.

              Net sales were $9.2 million in all other businesses for the six months ended June 30, 2009, a decrease of $0.4 million, or 4.2%, as compared to the prior-year period. This decrease was principally due to sales declines within our clay targets business, partially offset by sales increases in our accessories business and the launch of our EOTAC apparel joint venture in late 2008.

Cost of Goods Sold and Gross Profit

              The table below compares cost of goods sold and gross profit by reporting segment for each of the periods presented:

 
  Three Months Ended June 30,  
 
  2008   Percentage of Net Sales   2009   Percentage of
Net Sales
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Cost of Goods Sold

                                     

Firearms

  $ 71.1     70.1 % $ 101.5     68.0 % $ 30.4     42.8 %

Ammunition

    42.4     72.4     45.4     55.8     3.0     7.1  

All Other

    2.6     60.5     2.8     62.2     0.2     7.7  
                           
 

Total

  $ 116.1     70.7 % $ 149.7     63.7 % $ 33.6     28.9 %
                           

Gross Profit

                                     

Firearms

  $ 30.3     29.9 % $ 47.8     32.0 % $ 17.5     57.8 %

Ammunition

    16.2     27.6     35.9     44.2     19.7     121.6  

All Other

    1.7     39.5     1.7     37.8          
                           
 

Total

  $ 48.2     29.3 % $ 85.4     36.3 % $ 37.2     77.2 %
                           

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  Six Months Ended June 30,  
 
  2008   Percentage of
Net Sales
  2009   Percentage of
Net Sales
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Cost of Goods Sold

                                     

Firearms

  $ 137.0     71.8 % $ 188.9     69.9 % $ 51.9     37.9 %

Ammunition

    83.6     71.9     87.5     59.2     3.9     4.7  

All Other

    9.2     95.8     6.0     65.2     (3.2 )   (34.8 )
                           
 

Total

  $ 229.8     72.5   $ 282.4     66.1 % $ 52.6     22.9 %
                           

Gross Profit

                                     

Firearms

  $ 53.9     28.2 % $ 81.4     30.1 % $ 27.5     51.0 %

Ammunition

    32.7     28.1     60.3     40.8     27.6     84.4  

All Other

    0.4     4.2     3.2     34.8     2.8     *  
                           
 

Total

  $ 87.0     27.5 % $ 144.9     33.9 % $ 57.9     66.6 %
                           

*
Not Meaningful

Firearms

              Gross profit for the three months ended June 30, 2009 was $47.8 million, an increase of $17.5 million, or 57.8%, as compared to the prior-year period. Gross margin was 32.0% for the three months ended June 30, 2009 and 29.9% for the three months ended June 30, 2008. The improvement in gross margin was mainly due to increased production levels, leveraging our fixed overhead utilization, favorable sales mix toward higher margin centerfire rifle products and continued factory improvements through the implementation of lean manufacturing principles, six sigma and other initiatives.

              Gross profit for the six months ended June 30, 2009 was $81.4 million, an increase of $27.5 million, or 51.0%, as compared to the prior-year period. Gross margin was 30.1% for the six months ended June 30, 2009 and 28.2% for the six months ended June 30, 2008. The improvement in gross margin was mainly due to increased production levels, leveraging our fixed overhead utilization, favorable sales mix toward higher margin centerfire rifle products and continued factory improvements through the implementation of lean manufacturing principles, six sigma and other initiatives.

Ammunition

              Gross profit for the three months ended June 30, 2009 was $35.9 million, an increase of $19.7 million, or 121.6%, as compared to the prior-year period. Gross margin was 44.2% for the three months ended June 30, 2009 and 27.6% for the three months ended June 30, 2008. Significant gains achieved in gross margin, which improved by 16.6%, were primarily due to lower material costs of $10.5 million, driven by commodity cost reductions net of hedging contract costs, offset by unfavorable pricing of $0.4 million driven by increased rebates on certain product categories.

              Gross profit for the six months ended June 30, 2009 was $60.3 million, an increase of $27.6 million, or 84.4%, as compared to the prior-year period. Gross margin was 40.8% for the six months ended June 30, 2009 and 28.1% for the six months ended June 30, 2008. Significant gains achieved in gross margin, which improved by 12.4%, were primarily due to lower material costs of $12.6 million, driven by commodity cost reductions net of hedging contract costs, a favorable sales mix driven by higher demand for pistol and revolver related products of $0.6 million, and favorable pricing of $0.2 million driven by reduced rebates on certain product categories

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All Other

              Gross profit for the three months ended June 30, 2009 was $1.7 million, resulting in no change as compared to the prior-year period.

              Gross profit for the six months ended June 30, 2009 was $3.2 million, an increase of $2.8 million, as compared to the prior-year period. Results for the six months ended June 30, 2008 included a $3.1 million write-off of remaining technology products inventory in connection with the discontinuation of our technology products business.

Operating Expenses

              Operating expenses consist of selling, general and administrative expenses, research and development expenses and other (income) expenses. The following table sets forth certain information regarding operating expenses for the three months and six months ended June 30, 2009 and 2008:

 
  Three Months Ended June 30,  
 
  2008   2009   Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Selling, general and administrative expenses

  $ 33.8   $ 43.3   $ 9.5     28.1 %

Research and development expenses

    1.5     3.1     1.6     106.7  

Other (income) expense

    0.8     0.1     (0.7 )   (87.5 )
                   
 

Total

  $ 36.1   $ 46.5   $ 10.4     28.8 %
                   

 

 
  Six Months Ended June 30,  
 
  2008   2009   Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Selling, general and administrative expenses

  $ 62.4   $ 75.2   $ 12.8     20.5 %

Research and development expenses

    3.4     5.4     2.0     58.8  

Other (income) expense

    0.2     (1.9 )   (2.1 )   *  
                   
 

Total

  $ 66.0   $ 78.7   $ 12.7     19.2 %
                   

*
Not Meaningful

              Total operating expenses for the three months ended June 30, 2009 were $46.5 million, an increase of $10.4 million, or 28.8%, as compared to the prior-year period. Selling, general and administrative expenses increased $9.5 million, or 28.1%, primarily due to a $6.6 million accrual to reflect the estimated cost of the 17 HMR ammunition and rifle replacement safety notice, a $1.8 million increase in costs associated with incentive compensation accruals driven by financial performance, an increase of $0.5 million associated with commission expense primarily related to increases in sales demand in international markets and law enforcement firearms, and an increase of $0.4 million related to the addition of the EOTAC apparel line. Research and development expenses increased $1.6 million, or 106.7%, reflecting development costs associated with current initiatives to compete for incremental opportunities within the law enforcement and defense markets and to a lesser extent to implement continuous improvement processes to deliver products to the commercial market. Other expense (income) improved $0.7 million, primarily as a result of reduced stock option expense due to the departure of the former CEO.

              Total operating expenses for the six months ended June 30, 2009 were $78.7 million, an increase of $12.7 million, or 19.2%, as compared to the prior-year period. Selling, general and administrative expenses increased $12.8 million, or 20.5%, primarily due to a $6.6 million accrual to

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reflect the estimated cost of the 17 HMR ammunition and rifle replacement safety notice, a $1.6 million increase in wage, benefit and travel costs as a result of the addition of experienced management personnel and continued development of a customer-focused sales and marketing structure, $2.5 million increase in costs associated with incentive compensation accruals driven by financial performance, a $0.9 million increase in commission expense primarily related to increases in sales demand in international markets and law enforcement firearms, and an increase of $0.7 million related to the addition of the EOTAC apparel line. Research and development expenses increased $2.0 million, or 58.8%, reflecting development costs associated with current initiatives to compete for incremental opportunities within the law enforcement and defense markets and to a lesser extent to implement continuous improvement processes to deliver products to the commercial market. Other expense (income) improved $2.1 million, primarily as a result of reducing an estimated liability from the Marlin Acquisition associated with a federal excise tax audit that settled in March 2009 beyond the one-year period for adjustments to be applied against goodwill.

Interest Expense

              Interest expense was $7.5 million and $7.1 million for the three months ended June 30, 2009 and June 30, 2008, respectively. The $0.4 million increase in interest expense over the prior-year period was primarily related to higher interest expense on revolving debt.

              Interest expense was $14.6 million and $15.2 million for the six months ended June 30, 2009 and June 30, 2008, respectively. The $0.6 million decrease in interest expense over the prior-year period was primarily related to favorable rate movement on interest rate swaps in the first quarter of 2009 associated with BFI's term loans, offset by higher interest expense on revolving debt.

Income Tax Provision

              Our effective tax rate on continuing operations for the six months ended June 30, 2009 and 2008 was 36.2% and 37.9%, respectively. The difference between the actual effective tax rate and the federal statutory rate of 35% is principally due to state income taxes, permanent differences, and tax credit usage as of June 30, 2009 and 2008.

Years Ended December 31, 2007 and 2008

Net Sales

              The following table compares net sales by reporting segment for each of the periods presented:

 
  Year Ended December 31,  
 
  2007   Percentage of
Total
  2008   Percentage of
Total
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Firearms

  $ 201.6     52.4 % $ 426.6     59.0 % $ 225.0     111.6 %

Ammunition

    169.3     44.0     275.9     38.2     106.6     63.0  

All Other

    14.0     3.6     20.0     2.8     6.0     42.9  
                           
 

Total

  $ 384.9     100.0 % $ 722.5     100.0 % $ 337.6     87.7 %
                           

Firearms

              Net sales for the year ended December 31, 2008 were $426.6 million, an increase of $225.0 million, or 111.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for $199.2 million of the increase in firearms sales. Excluding the impact of the acquired Remington, DPMS and Marlin operations, net sales for the year ended December 31, 2008 were $88.7 million, an

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increase of $25.8 million, or 41%, as compared to the year ended December 31, 2007. Discussion of major product category results is included below.

              Centerfire rifle sales increased by $154.9 million, or 112.2%, as compared to the prior-year period, principally due to a $129.1 million increase due to the impact of a full year of sales for the acquired Remington and DPMS operations and eleven months of sales for the acquired Marlin operations and a $25.8 million increase due to higher sales volumes of Bushmaster branded modern sporting rifles.

              Shotgun sales increased by $44.8 million, or 85.7%, as compared to the prior-year period, mainly due to the impact of a full year of sales for the acquired Remington operations and eleven months of sales for the acquired Marlin operations.

              Rimfire rifle sales increased by $18.6 million, or 391.2%, as compared to the prior-year period, mainly due to the impact of a full year of sales for the acquired Remington operations and eleven months of sales for the acquired Marlin operations.

Ammunition

              Net sales for the year ended December 31, 2008, were $275.9 million, an increase of $106.6 million, or 63%, as compared to the year ended December 31, 2007, principally due to an $81.1 million increase due to the impact of the acquired Remington operations and a $44.1 million increase due to price increases on most categories of ammunition, partially offset by a $17.7 million decrease in sales of ammunition due to lower sales volumes as a result of decreased production during late 2008. Discussion of major product category results is included below.

              Centerfire ammunition sales increased by $65.2 million, or 77.9%, as compared to the prior-year period, which included a $47.3 million increase attributable to the full-year impact of the acquired Remington operations and a $18.8 million increase due to incremental price increases on most centerfire categories. In addition, we experienced volume increases within the centerfire ammunition category during late 2008 due to increased market demand for rifle and pistol ammunition.

              Shotshell ammunition sales increased by $24.8 million, or 40.9%, as compared to the prior-year period, which included a $23.3 million increase attributable to the full-year impact of the acquired Remington operations and a $14.6 million increase due to incremental price increases on most shotshell categories, partially offset by a $13.9 million decrease in sales of shotshell ammunition due to lower sales volumes as a result of decreased production during late 2008.

              Rimfire ammunition sales increased by $6.4 million, or 54.6%, as compared to the prior-year period, which included a $6.1 million increase attributable to the full-year impact of the acquired Remington operations and a $3.8 million increase due to incremental price increases on most rimfire categories, partially offset by a $3.4 million decrease in sales of rimfire ammunition due to lower sales driving a level of reduced production during late 2008.

All Other

              Net sales were $20.0 million in all other businesses for the year ended December 31, 2008, an increase of $6.0 million, or 42.9%, as compared to the prior-year period due mainly to continued growth within the accessories business, including a $4.6 million increase from efforts of our newly developed internal sales force, a $1.8 million increase due to aggregate sales volume increases for most other businesses and a $0.9 million increase attributable to the full-year impact of the acquired Remington operations, partially offset by a $1.2 million decrease due to declining sales volumes within technology products as part of exiting that business.

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Cost of Goods Sold and Gross Profit

              The table below compares cost of goods sold and gross profit by reporting segment for the years ended December 31, 2007 and 2008:

 
  Year Ended December 31,  
 
  2007   Percentage
of Net
Sales
  2008   Percentage
of Net
Sales
  Increase
(Decrease)
  Percentage Change  
 
  (dollars in millions)
 

Cost of Goods Sold

                                     

Firearms

  $ 145.5     72.2 % $ 309.1     72.5 % $ 163.6     112.4 %

Ammunition

    150.1     88.7     198.8     72.1     48.7     32.4  

All Other

    10.4     74.3     16.5     82.5     6.1     5.7  
                           
 

Total

  $ 306.0     79.5 % $ 524.4     72.6 % $ 218.4     71.4 %
                           

Gross Profit

                                     

Firearms

  $ 56.1     27.8 % $ 117.5     27.5 % $ 61.4     109.4 %

Ammunition

    19.2     11.3     77.1     27.9     57.9     301.6  

All Other

    3.6     25.7     3.5     17.5     (0.1 )   (2.8 )
                           
 

Total

  $ 78.9     20.5 % $ 198.1     27.4 % $ 119.2     151.1 %
                           

Firearms

              Gross profit for the year ended December 31, 2008 was $117.5 million, an increase of $61.4 million, or 109.4%, as compared the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for $50.9 million of the firearms gross profit increase. Excluding the impact of the acquired Remington, DPMS and Marlin operations, total gross profit for the year ended December 31, 2008 was $36.7 million, an increase of $10.5 million, or 40%, as compared to the year ended December 31, 2007. Gross margin was 27.5% for the year ended December 31, 2008 and 27.8% for the year ended December 31, 2007. Gross margin remained relatively flat, declining 0.3% due to the impact of the acquired Remington, DPMS and Marlin businesses, which have inherently lower margin products, partially offset by increased production levels on certain centerfire rifles products leveraging our fixed overhead utilization and lower rollout of purchase accounting related amortization as a result of our acquisitions of $12.2 million.

              In connection with accounting for our acquisitions as business combinations using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result, inventory subsequently sold has negatively impacted cost of goods sold. The impact for the year ended December 31, 2008 was approximately $2.8 million, compared to the impact for the year ended in 2007 of $15.0 million, a net decrease to cost of goods sold of $12.2 million.

Ammunition

              Gross profit for the year ended December 31, 2008 was $77.1 million, an increase of $57.9 million, or 301.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington operations, which collectively accounted for $22.1 million of the ammunition gross profit increase. Excluding the impact of the acquired Remington operations, total gross profit for the year ended December 31, 2008 was $55.0 million, an increase of $35.8 million, or 186.5%, compared to the year ended December 31, 2007. Gross margin was 27.9% for the year ended December 31, 2008 and 11.3% for the year ended December 31, 2008. Gross margin improved 16.6%,

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reflecting higher realized prices in 2008 for most categories and decreased impact of purchase accounting related amortization as a result of the Remington Acquisition, partially offset by unfavorable cost absorption driven by lower production volumes during late 2008.

              In connection with accounting for the Remington Acquisition as a business combination using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result, inventory subsequently sold in 2007 negatively impacted cost of goods sold. The impact for the year ended December 31, 2007 was approximately $13.1 million and was included in cost of goods sold.

All Other

              Gross profit for the year ended December 31, 2008 was $3.5 million, a decrease of $0.1 million, as compared to the year ended December 31, 2007. The full year impact of the acquired Remington operations accounted for an increase of $2.1 million for all other gross profit. Excluding the impact of the acquired Remington operations, total gross profit for the year ended December 31, 2008 was $1.4 million, a decrease of $2.2 million, or 61.1%, compared to the year ended December 31, 2007, as a result of the write-off of remaining technology products inventory of $3.1 million as part of exiting this business partially offset by lower rollout of purchase accounting related amortization of $0.6 million as a result of the Remington Acquisition.

              In connection with accounting for the Remington Acquisition as a business combination using the purchase method of accounting, inventories were required to be written up to their estimated selling prices less the costs to complete and dispose and a reasonable selling profit. As a result of this write-up, estimated inventory subsequently sold increased cost of goods sold. The impact for the year ended December 31, 2007 was approximately $0.6 million and was included in cost of goods sold.

Operating Expenses

              Operating expenses consist of selling, general and administrative expense, research and development expenses and other (income) expense. The following table sets forth certain information regarding operating expenses for the years ended December 31, 2007 and 2008:

 
  Year Ended December 31,  
 
  2007   2008   Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Selling, general and administrative

  $ 68.1   $ 133.7   $ 65.6     96.3 %

Research and development expenses

    3.8     7.1     3.3     86.8  

Impairment charges

    0.0     47.4     47.4     N/A  

Other (income) expense

    (1.8 )   (1.3 )   0.5     (27.8 )
                   
 

Total

  $ 70.1   $ 186.9   $ 116.8     166.6 %
                   

              Total operating expenses for the year ended December 31, 2008 were $186.9 million, an increase of $116.8 million, or 166.6%, as compared to the year ended December 31, 2007, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for an increase of $45.1 million. Excluding the impact of the acquired Remington, DPMS and Marlin operations, total operating expenses for the year ended December 31, 2008 were $141.8 million, an increase of $71.7 million, or 102.3%, compared to the year ended December 31, 2007, of which $47.4 million was related to impairment charges recorded in December 2008. The impairment charge was caused by a combination of factors that occurred during 2008, including the deterioration of the economic and credit environment and market conditions in the hunting industry.

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              As part of our annual impairment testing conducted with the assistance of third-party valuation specialists under SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144") and SFAS No. 142, Goodwill and Other Intangible Assets, ("SFAS 142"), we recorded non-cash impairment charges related to goodwill of $44.3 million and certain trademarks of $3.1 million for the year ended December 31, 2008.

              Selling, general and administrative expenses increased $65.6 million, or 96.3%, primarily due to the impact of the acquired Remington, DPMS and Marlin operations, which collectively accounted for an increase of $46.6 million. Excluding the impact of the acquired Remington, DPMS and Marlin operations, selling, general and administrative expenses were $87.1 million, an increase of $19 million, or 27.9%, compared to December 31, 2007, primarily due to a $3.9 million increase in wage, benefits and travel costs reflecting continued development of a customer-focused sales and marketing structure, a $3.6 million increase in wage, benefit and travel costs due to the addition of experienced management personnel, a $3.0 million increase due to incremental amortization as a result of the DPMS acquisition, a $1.6 million increase due to costs associated with incentive compensation accruals as plan participation increased and other expenses.

              Research and development expenses increased $3.3 million, or 86.8%, primarily due to a $3.2 million increase attributable to the full year impact of the acquired Remington, DPMS and Marlin operations.

              Other expense (income) decreased $0.5 million, or 27.8%, driven mainly by recorded stock option expense of $1.4 million in 2008 and higher intangible amortization of $1.1 million partially offset by the impact of the acquired Remington operations on licensing income of $1.5 million.

Interest Expense

              Interest expense for the year ended December 31, 2008 was $30.8 million, an increase of $9.6 million, or 45.3%, as compared to the year ended December 31, 2007, primarily due to the full-year impact of the acquired Remington and DPMS operations.

Income Tax Provision (Benefit)

              The Company recorded tax expense of $9.1 million for the year ended December 31, 2008, an effective rate of approximately 47.6%. This tax rate was primarily driven by a permanent tax difference associated with the impairment of goodwill. Excluding the impact of the goodwill impairment, the effective tax rate would have been 31.4% for this period. The effective tax rate for the twelve months ended December 31, 2007 was 31.0%. The difference between the actual effective tax rate for the respective periods above and the U.S. federal statutory rate of 35% is principally due to permanent differences including the impairment of goodwill, utilization of research and development tax credits and the impact of the valuation allowance.

              We are currently subject to ongoing audits by federal and various state tax authorities. Depending on the outcome of these audits, we may be required to pay additional taxes. However, we do not believe that any additional taxes and related interest or penalties would have a material impact on our financial position, results of operations, or cash flows.

Year Ended December 31, 2007 and Combined Year Ended December 31, 2006

              As a result of the acquisition of Bushmaster by CCM, which was effective on April 1, 2006, our financial results for 2006 have been separately presented in our consolidated financial statements for the "Predecessor Entity" for the period January 1, 2006 through March 31, 2006 and for the "Successor Entity" for the period April 1, 2006 through December 31, 2006. For comparative purposes, we have combined the period from January 1, 2006 through December 31, 2006 in our discussion below, as we

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believe this combination is useful to provide the reader a more accurate comparison. This presentation is not a GAAP measure and it is provided to enhance the reader's understanding of our results of operations for the period presented.

Net Sales

              The following table compares net sales by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

 
  Predecessor
Entity
  Successor
Entity
  Combined   Successor Entity   Combined Year Ended
December 31, 2006
Compared to Year Ended
December 31, 2007
 
 
  Period
January 1 to
March 31,
2006
  Period
April 1 to
December 31,
2006
  Year Ended
December 31,
2006
  Percentage
of Total
  Year Ended
December 31,
2007
  Percentage
of Total
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Firearms

  $ 16.8   $ 41.3   $ 58.1     100.0 % $ 201.6     52.4 % $ 143.5     247.0 %

Ammunition

                    169.3     44.0     169.3      

All Other

                    14.0     3.6     14.0      
                                   

Total

  $ 16.8   $ 41.3   $ 58.1     100.0 % $ 384.9     100.0 % $ 326.8     562.5 %
                                   

Firearms

              Net sales for the year ended December 31, 2007, were $201.6 million, an increase of $143.5 million, or 247%, as compared to the combined year ended December 31, 2006, primarily due to a $138.7 million increase as a result of the impact of the acquired Remington operations. Excluding the impact of the acquired Remington operations, net sales for the year ended December 31, 2007 were $62.9 million, an increase of $4.8 million, or 8.3%, as compared to the combined year ended December 31, 2006, reflecting higher sales volumes of Bushmaster branded products. Discussion of major product category results is included below.

              Centerfire rifle sales increased by $78.2 million, or 134.6%, as compared to the combined prior-year period, principally due to a $73.4 million increase as a result of higher sales volumes of the acquired Remington operations and a $4.8 million increase due to higher sales volumes of Bushmaster branded products.

              Shotgun and rimfire rifle sales increased by $52.0 million and $6.0 million, respectively, or 100%, as compared to the prior-year period, due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

Ammunition

              Net sales for the year ended December 31, 2007, were $169.3 million, an increase of $169.3 million, or 100%, as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations. Discussion of major product category results is included below.

              Centerfire, shotshell and rimfire ammunition sales increased by $83.6 million, $60.6 million and $11.8 million, respectively, or 100%, as compared to the prior-year period, due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

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All Other

              Net sales were $14.0 million in all other businesses for the year ended December 31, 2007, an increase of $14.0 million, or 100%, as compared to the combined year ended December 31, 2006 due solely to increased sales volumes as a result of the impact of the acquired Remington operations.

Cost of Goods Sold and Gross Profit

              The table below presents the cost of goods sold and gross profit by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

 
  Predecessor
Entity
  Successor Entity   Combined   Successor
Entity
  Year Ended
December 31, 2007
Compared to Combined
Year Ended
December 31, 2006
 
 
  Period
January 1 to
March 31,
2006
  Period
April 1 to
December 31,
2006
  Year Ended
December 31,
2006
  Percentage
of Net
Sales
  Year Ended
December 31,
2007
  Percentage
of Net
Sales
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Cost of Goods Sold

                                                 

Firearms

  $ 9.8   $ 24.6   $ 34.4     59.2 % $ 145.5     72.2 % $ 111.1     323.0 %

Ammunition

                    150.1     88.7     150.1      

All Other

                    10.4     74.3     10.4      
                                   

Total

  $ 9.8   $ 24.6   $ 34.4     59.2 % $ 306.0     79.5 % $ 271.6     789.5 %
                                   

Gross Profit

                                                 

Firearms

  $ 7.0   $ 16.7   $ 23.7     40.8 % $ 56.1     27.8 % $ 32.4     136.7 %

Ammunition

                    19.2     11.3     19.2      

All Other

                    3.6     25.7     3.6      
                                   

Total

  $ 7.0   $ 16.7   $ 23.7     40.8 % $ 78.9     20.5 % $ 55.2     233.9 %
                                   

Firearms

              Gross profit for the year ended December 31, 2007 was $56.1 million, an increase of $32.4 million, or 136.7% as compared to the combined year ended December 31, 2006. The 2007 impact of acquiring Remington compared to the combined year ended December 31, 2006 accounted for $29.9 million. Total gross profit for the year ended December 31, 2007 (excluding incremental activity from the acquired Remington operations) was $26.2 million, an increase of $2.5 million, or 10.5%, as compared to the combined period ended December 31, 2006. Gross margin was 27.8% for the year ended December 31, 2007 and 40.8% for the combined year ended December 31, 2006. Gross margin declined 13.0% mainly due to the acquisition of the Remington business with inherently lower margin products partially offset by favorable segment mix with relatively higher margins within the Bushmaster branded products.

Ammunition

              Gross profit for the year ended December 31, 2007 was $19.2 million, an increase of $19.2 million, or 100% as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations.

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All Other

              Gross profit for the year ended December 31, 2007 was $3.6 million, an increase of $3.6 million, or 100% as compared to the combined year ended December 31, 2006, due solely to the impact of the acquired Remington operations.

Operating Expenses

              Operating expenses consist of selling, general and administrative expense, research and development expenses and other (income) expense. The table below presents the operating expenses by reporting segment for each of the predecessor period January 1, 2006 to March 31, 2006, the successor period April 1, 2006 to December 31, 2006, the combined year ended December 31, 2006 and the year ended December 31, 2007:

 
  Predecessor Entity   Successor Entity   Combined   Successor Entity   Year Ended
December 31, 2007
Compared to Combined
Year Ended
December 31, 2006
 
 
  Period
January 1 to
March 31,
2006
  Period
April 1 to
December 31,
2006
  Year Ended
December 31,
2006
  Percentage
of Net
Sales
  Year Ended
December 31,
2007
  Percentage
of Net
Sales
  Increase
(Decrease)
  Percentage
Change
 
 
  (dollars in millions)
 

Selling, general and administrative expenses

  $ 3.8   $ 8.9   $ 12.7     100.0 % $ 68.1     97.1 % $ 55.4     436.2 %

Research and development expenses

                    3.8     5.4     3.8      

Other (Income) Expense

                    (1.8 )   (2.5 )   (1.8 )    
                                   

Total

  $ 3.8   $ 8.9   $ 12.7     100.0 % $ 70.1     100.0 % $ 57.4     451.5 %
                                   

              Total operating expenses for the year ended December 31, 2007 were $70.1 million, an increase of $57.4 million, or 451.5%, as compared to the combined year ended December 31, 2006, primarily due to the impact of the acquired Remington operations, which accounted for an increase of $54.0 million. Excluding the impact of the acquired Remington operations, total operating expenses for the year ended December 31, 2007 were $16.1 million, an increase of $3.4 million, or 26.8%, as compared to the combined year ended December 31, 2006.

              Selling, general and administrative expenses increased $55.4 million, or 436.2%, primarily due to the impact of the acquired Remington operations, which accounted for an increase of $52.1 million. Excluding the impact of the acquired Remington operations, selling, general and administrative expenses for the year ended December 31, 2007 were $16.0 million, an increase of $3.3 million, or 26.0%, as compared to the combined year ended December 31, 2006 primarily due to higher incentive compensation costs.

              Research and development expenses increased $3.8 million, or 100%, primarily due to the impact of the acquired Remington operations.

              Other (income) expense decreased $1.8 million, or 100%, solely due to the impact of the acquired Remington operations.

Interest Expense

              Interest expense for the year ended December 31, 2007 was $21.1 million, an increase of $16.5 million, or 358.7%, as compared to the combined year ended December 31, 2006, primarily due to the impact of the acquired Remington operations.

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Income Tax Provision (Benefit)

              Our effective tax rate was 31.0%, 42.3% and 0.2% for the year ended December 31, 2007, the successor period April 1, 2006 through December 31, 2006 and the predecessor period January 1, 2006 through March 31, 2006, respectively. The difference between the actual effective tax rate for the respective periods above and the U.S. federal statutory rate of 35% is principally due to state income taxes and permanent differences.

              We are currently subject to ongoing audits by various state tax authorities. Depending on the outcome of these audits, we may be required to pay additional taxes. However, we do not believe that any additional taxes and related interest or penalties would have a material impact on Remington's financial position, results of operations, or cash flows.

              We adopted FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, we recognized no material adjustment in our liability for unrecognized tax benefits.

Liquidity and Capital Resources

Cash Flows and Working Capital

              Net cash provided by operating activities was $53.3 million for the six months ended June 30, 2009 compared to net cash used in operating activities of $39.4 million for the six months ended June 30, 2008. The $92.7 million increase in cash provided by operating activities for the six months ended June 30, 2009 compared to the prior-year period resulted primarily from:

    the recognition of net income of $33.0 million for the six months ended June 30, 2009 compared to net income of $3.6 million for the six months ended June 30, 2008;

    accounts receivable increasing by $22.6 million over the six months ended June 30, 2009 compared to an increase of $27.8 million over the six months ended June 30, 2008, primarily due to enhanced initiatives to shorten historical sales program terms as part of efforts to improve working capital offset by higher sales volume;