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Heckler & Koch is apparently bankrupt.

54K views 166 replies 67 participants last post by  lakelandman 
#1 ·
#68 ·
This thread prompted me to read the 2018 annual report. While not great, I suspect it’s a waste of time to suggest it doesn’t look as bad as I had feared.

One line caught my interest. On page 69 of 90. Under business situation paragraph 2.2. They state “The market launch of the first pistol developed in the USA has been considerably delayed and as a result, revenues have not yet been generated by this product.” Anyone have any ideas on what this is?

In the same section they also note the new production processes implemented in 2017 were not able to reach their full potential under these circumstances. This might another reason for the lack of supply beyond government contracts.

The previous section of the report also specifically noted

Access to the US market in general, and the sale of weapons in the USA in particular, subject to both greater restrictions on export licenses from Germany and changing legislation in the USA and individual US states. It cannot be ruled out that the regulations for this market will be tightened in the future as well, making it more difficult to sell our products in this market - which is the largest commercial market in the world by far - from Germany. Their writing not mine.

When discussing sales.

The market in the USA, which is mainly served by our subsidiaries HKD and HKI, generated 21% (2017: 29%) of revenue. The reduction was mainly due to delayed deliveries from HKO resulting from delivery requirements for domestic police and governmental authorities; demand remained fairly stable.

It’s a small company. 936 employees. 825 in Oberndorf and 111 in the US. It’s basically privately owned.


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#69 ·
This thread prompted me to read the 2018 annual report. While not great, I suspect it’s a waste of time to suggest it doesn’t look as bad as I had feared.

One line caught my interest. On page 69 of 90. Under business situation paragraph 2.2. They state “The market launch of the first pistol developed in the USA has been considerably delayed and as a result, revenues have not yet been generated by this product.” Anyone have any ideas on what this is?

In the same section they also note the new production processes implemented in 2017 were not able to reach their full potential under these circumstances. This might another reason for the lack of supply beyond government contracts.

The previous section of the report also specifically noted

Access to the US market in general, and the sale of weapons in the USA in particular, subject to both greater restrictions on export licenses from Germany and changing legislation in the USA and individual US states. It cannot be ruled out that the regulations for this market will be tightened in the future as well, making it more difficult to sell our products in this market - which is the largest commercial market in the world by far - from Germany. Their writing not mine.

When discussing sales.

The market in the USA, which is mainly served by our subsidiaries HKD and HKI, generated 21% (2017: 29%) of revenue. The reduction was mainly due to delayed deliveries from HKO resulting from delivery requirements for domestic police and governmental authorities; demand remained fairly stable.

It’s a small company. 936 employees. 825 in Oberndorf and 111 in the US. It’s basically privately owned.
HK GmbH is not Colt's Firearms Division!!! :biggrin:
Why worry about the gun laws here (?)--- same President until 2024 (who cares about "bump stocks"?), and the largest U.S. markets are where the gun laws are favorable. :wink:
Something else is going on at HK GmbH ("lack of will", "soft spines", "capitalism adverse", "political"?). :43:

Tony
 
#73 ·
Yeah f#*k that. The people who own H&K are the ones most directly responsible for the current circumstance. I'm not going to help save them from the consequences of their own actions. H&K does need, and desperately deserves to be forced to declare bankruptcy so someone who has more sense than what God gave a dog can buy it from people who are as stupid as the day is long and turn it into what it should be. They've got every excuse in the world for why they are in their present circumstance except, "we're a bunch of idiots who DRGAF about guns, don't want to sell to civilians, and looted the company to fund our lifestyle".

A GFM to BUY H&K outright, now that we can talk about. But the owners in their thickheaded arrogance would probably not sell, and so as I say, they deserve to go under. No sympathy for them here, none at all. My sympathy is for their employee's.

The most often heard excuse is, "The German government won't let us". Well, quit f#*king asking them for permission they won't give! EMIGRATE! You already started the process (20-25 years late) now follow through! Get the USG to issue H1B visa's for each and every H&K Oberndorf employee who wants to come, residency to be made permanent shortly after their arrival. Not all will come, there will be plenty of Americans going to work for them here as well. They may even be able to keep Oberndorf limping along for a while, but why, all the countries they want to sell military weapons to would be allowed by the US to buy those same weapons, so no downside there. Sh*t, we sell Colt M4's to Iraq, who thinks we wouldn't allow H&K USA to sell guns to France or whomever else. They would sure not be in trouble for selling guns to Mexico, or being prohibited from selling them to the Saudi's. There's no downside to H&K GTFO of a country who's government wants them dead, corporately speaking.
 
#76 ·
Of course. The idea that they think they should only sell guns to the police and the military tells you everything you need to know. The sooner H&K is out of their hands, one way or another, the better off everyone but them will be......
 
#77 ·
I see the term "military and police" thrown around.

As a member of the police side of the house...that transitioned his agency to HK's...HK does not give a flying **** about working with police...maybe short of NYPD, LAPD or Chicago PD...or maybe their own "polizei"

Getting paperwork and EUC's approved from Germany for pistols readily available here was a joke. Only a whopping 4 pistols came from HK direct and we said screw 'em and finished out our transition with a local retailer. If I had known then what I know now about dealing with HK for plain 'ol pistols (I was not surprised that 416 support was nonexistent prior to this) and that the Gen 5 turned out as well as it did, I would have waited and stuck with Glock for standard issue.
 
#84 ·
Reality is that government contracts are down. I suspect they're in a similar position as Colt is in. They're in an area that costs too much and the operating/legacy costs are too much. Now, government sales are down and they haven't been exactly been too friendly with the US civilian market either. They have a market full of people who are willing to buy their product, but there is always a perennial shortage on what people want
 
#85 ·
All this time that 10mm popularity has been increasing, you would think HK could and would produce a 10mm handgun.

I’d pay good money for a USP Expert 10mm.

Also, 40S&W has been on the decline for years, yet they still make pistols in 40.

It’s almost like they want to go belly up. I’m almost indifferent to whether or not they do.

They haven’t produced anything new that excites me in the last decade.
 
#90 ·
Those saying B&T are the new innovators... what is so innovative exactly?
Looks like a rip of guns that have been in circulation for idk, 20-30+ years, minus different milling or ambi side charging options (not exactly innovative imo)
Looks like a pile of clones to me. Am I missing something about B&T, the price says no, the design says no... what am I missing here?
Apparently I have no idea what is so awesome about B&T or why I should care. (50% sarcasm/100% honest)
 
#94 ·
In my opinion what most HK fans want is the remake of the HKP7 M8/M13 and the HK 94. To a lesser degree the HK 93 &91. I heard they were asked about those in the past and the company stated that the moved on from those designs and sold the tooling. If that was the case who made/makes their HK SP5K?.
In the 80s they were a cutting edge company. Although their HKp30s are good pistols and so are their HKVp9, the USP(s) were not very popular. Of course the price didn't help. Their HK Mr 556 is out of the price range of most and is cosmetically just another boring AR15.
My advice to them is make something innovative that they are willing to sell to the citizens or bring back classics like the P7M8 and th HK 94. It appears PTR and other companies make a clone of the 94 and SP 89/sp5k models.
 
#103 ·
who made/makes their HK SP5K?
HK does. They sold some tooling, but not all tooling. When I was in factory few years ago I've seen MP5 and PSG1 being made. They just to not "push" those designs to the market, because they are expensive to make.
 
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#115 ·
Recently received from HK:


Dear Valued Partner,

I find it disappointing, but necessary, that I need to clear up the disinformation circulating in the media following our latest financial report. This narrative is the result of a chain reaction of doom and gloom started by a German news source that has been historically antagonistic toward HK. That one article triggered an initial US report on The Firearm Blog that lacked critical context. From there it just got worse, with each subsequent article sounding more bleak than the last. This culminated in a report from the Military Times that only served to remind us that, while HK is still very much alive, American journalism continues to die a slow and painful death.

Rather than argue about the conclusions of the authors, I would like to simply point out some facts:

Of the three US news stories, none contacted HK for comment for their reports.
The first two US articles (The Firearm Blog, The Outdoor Wire) used a foreign news story as their primary source without questioning their accuracy or motivation.
A third US article (Military Times) used the first two US articles s its primary sources, creating a sensationalized third- or fourth-hand account.
Of the three US articles, none referenced a single number from the HK financial report.


To be clear, HK still remains a leveraged company. This places a burden on the business that non-leveraged companies don’t have. However, we have met and continue to meet all covenants associated with this debt. The full story is easy to find in the financial data the news media neglected to report. Here are some key examples:

From 2014 to the end of 2018, HK’s debt was reduced from 290 million Euros to 235 million and the interest rate on that debt was reduced substantially.
Over the course of 2018 and thus far in 2019, HK reported positive EBITDA in every quarter.
Over that same period, HK’s cash position doubled.
Claims of “diminishing sales” and “difficulty securing new large-scale contracts” are patently false. In fact, the last six quarters for HK have shown record order-intake, including a substantial backlog of large-scale contracts.
HK invested a combined 8.3 million Euros toward increased capacity and efficiency in both the Obendorf, Germany and Columbus, GA facilities in 2018.


The full financial report and other key data can be found at https://www.heckler-koch.com/en/ir/annual-accounts.html and https://www.heckler-koch.com/en/ir/key-figures.html.

At HK, we are committed to supplying and servicing our US partners for many profitable years to come. I can assure you that we are in it for the long haul.

Sincerely,
Michael Holley
CSO/COO - Heckler & Koch - US
 
#122 ·
Recently received from HK:


Dear Valued Partner,

I find it disappointing, but necessary, that I need to clear up the disinformation circulating in the media following our latest financial report. This narrative is the result of a chain reaction of doom and gloom started by a German news source that has been historically antagonistic toward HK. That one article triggered an initial US report on The Firearm Blog that lacked critical context. From there it just got worse, with each subsequent article sounding more bleak than the last. This culminated in a report from the Military Times that only served to remind us that, while HK is still very much alive, American journalism continues to die a slow and painful death.

Rather than argue about the conclusions of the authors, I would like to simply point out some facts:

Of the three US news stories, none contacted HK for comment for their reports.
The first two US articles (The Firearm Blog, The Outdoor Wire) used a foreign news story as their primary source without questioning their accuracy or motivation.
A third US article (Military Times) used the first two US articles s its primary sources, creating a sensationalized third- or fourth-hand account.
Of the three US articles, none referenced a single number from the HK financial report.


To be clear, HK still remains a leveraged company. This places a burden on the business that non-leveraged companies don’t have. However, we have met and continue to meet all covenants associated with this debt. The full story is easy to find in the financial data the news media neglected to report. Here are some key examples:

From 2014 to the end of 2018, HK’s debt was reduced from 290 million Euros to 235 million and the interest rate on that debt was reduced substantially.
Over the course of 2018 and thus far in 2019, HK reported positive EBITDA in every quarter.
Over that same period, HK’s cash position doubled.
Claims of “diminishing sales” and “difficulty securing new large-scale contracts” are patently false. In fact, the last six quarters for HK have shown record order-intake, including a substantial backlog of large-scale contracts.
HK invested a combined 8.3 million Euros toward increased capacity and efficiency in both the Obendorf, Germany and Columbus, GA facilities in 2018.


The full financial report and other key data can be found at https://www.heckler-koch.com/en/ir/annual-accounts.html and https://www.heckler-koch.com/en/ir/key-figures.html.

At HK, we are committed to supplying and servicing our US partners for many profitable years to come. I can assure you that we are in it for the long haul.

Sincerely,
Michael Holley
CSO/COO - Heckler & Koch - US
I would like to know the specifics of this!!! :wink:

Tony
 
#127 ·
Lets see, if I had a big backlog of high dollar commercial orders? Of course the first thing I would do is dedicate production time to the US Civy market. Of course I would sacrifice the good of my company just to keep the spoiled American babies happy (sarcasm). Banana's I want bananas.

As said before, it's their company and it's their choice to make.
 
#129 ·
I really want to know the full story on both sides of the import equation.

Does Germany prevent HK from exporting certain firearms? If so what is the criteria? Does anything prevented from being exported ever come off the export ban list? Can they make these firearms in the GA facility or is the prohibition from them ever leaving Germany for anything but LEO/MIL contracts?

Besides the '89 Import Ban and 922(r) what does the US put in the way of hurdles for HK to import? Again, is this something that can (will?) be alleviated by having the HK plant here in the US? Or is this plant mainly for making pistols cheaper to sell in the US, but not the more fun stuff such as the 416, G36, MP7 etc? I know they were burned by US import laws changing before so I understand why they might be apprehensive about committing resources to something that might have the door slammed on it again. Is that the reason for the aforementioned "fun stuff" from being imported? Is it because they don't expect us to actually buy the fun stuff once we see the price tag?

You see a LOT of spitballing about these points, but no one ever backs it up with anything substantial. Would love an expert to clear these issues up once and for all.
 
#130 ·
Define “expert”. Unless someone from HK makes an official statement answering all of your questions, what you see is what you get. The text of 922r is easily available for everyone to see, and I’m sure German export laws can easily be found on the web. Im sure HK is much more familiar with German export and US import laws than the majority of the people here.

As far as what HK-USA intends to make at their US facility, only they can answer that. It’s all irrelevant anyway. They will make (or not make) what they want, for whatever reason they have, and no amount of Internet armchair quarterbacking will change that.
 
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