I wish I were a bit more financially savvy and could make more out of the information. To the layman though that looked like a lot of numbers in parenthesis. :-(
It looks like more then anything they just need an increase in revenue and more margin on sales. At least in the near term. I'm sure the VP9 will help. Public sales are higher margin than agency sales. In the future maybe they can look to get back to high volume low margin contracts, but for now they just need more Dollars and Euros coming in.
I'm doing what I can. I'm at about a dozen HK's now. A few of them are far out of production, so that doesn't help the bottom line today, but hopefully will count as moral support. Maybe if we all redouble our efforts we can each buy another HK or six this year and really help the company. I'm sure our wives will understand that it's a selfless act on our parts ;-)
Shamrox, if you look at page 10 of HK's 2013 financials there's a negative amount of (€177.1) for 2012 and (€161.5) for 2013 in the cash reserves. That's saying HKB (parent company) has an over drawn bank account.
On the same page, HKO (gun maker) has a PIK Loan (payment in kind), which is the repayment of a loan by other means (not cash) for €180.9 as an assets. I'm guessing, the mansion, yacht and airplanes that Heeschen and Halsey purchases are considered property of HKO.
Essential HKO and HKB are married at the hip and they have entirely too much debt to payback and not enough cash coming in. HKO debt to equity ratio is about 4.15 and HKB is (2.85).
SO YES! We need to convince the wives that our purchases are essentially a charitable contribution to keep HK going! Selfless Act indeed!!!
EDIT: I'd also like to add when your have too much debt and not enough cash coming in, this limits the amount of R&D a company can spend so I'm incredibly impressed how they were able to get the VP9 done. Considering they have a €2.9 million budget in 2013 for R&D, a 20% decrease from 2012.
The last paragraph on page 3 and the top of page 4 is holding them on by a thread...that is a very big "IF"
I just bought 2 ( two ) VP9's , a new MR556 Upper , and will still keep buying HK products in the foreseeable as they become available . I would like to go on the record that my legal counsel for the implied purpose of the rendition of advice and guidance concerning a legal matter, contemplated form of argument, claim, or action , shall be the firm of " Dewey , Cheatem , and How , LLC " with law offices ( and expert plumbing ) in Climax . N.C. ( near Julian ) .
[QUOTE=Oicani;1536762] they have entirely too much debt to payback and not enough cash coming in. HKO debt to equity ratio is about 4.15 and HKB is (2.85).
However this could be a good thing for the common customer here in the US. The military is down sizing and funds are not there for a lot of different firearms which in general would hopefully allow Hk to focus on civilian sales instead of thier usual MIL/LEO.
I agree with you gmthecoolguy! I truly believe that HK is relying on the US civilian consumer to help drive revenues. Two examples I can think of that would suggest this is true:
1. The increase and frequent sales on the HK Web Shop of discounted old inventories
2. New products coming to market such as the VP9, HK294/243 & potentially bringing back a HK94 (holding my breathe for the return of the 94)
That won't be enough soon enough - too little too late. Even if all 35,000 VP9's ordered for the US this year sell for $600 that is only @$21M in revenue.
The one disturbing number is the big decrease in the R&D budget. If they lose that edge they are done.
I predict they will in fact go bankrupt and will maybe have to rise from the ashes with the help of an investor group that desires value not pocket money to the tune of $100M's. Could happen in the next 12 months.
Don't expect the German govt to save them. If they limp along as they are their best customers (Govts of Germany, UK, Saudi Arabia) will likely begin to look elsewhere. G36 orders are already on hold at @ 31M Euro per year and that places the MG5 order with the Bundeswehr on hold also.
In this case I hope I am VERY wrong.
Seems like they've always had money woes.