All indicators point to an energized industry, with U.S. firearm manufacturers reporting increased production to meet the growing demand of the marketplace. Distributors and importers are enjoying brisk business and dealers indicate a surge in firearm sales.

The 2007 business year began with high optimism at SHOT Show 2007 in Orlando, Fla.

“It’s been exciting, especially the great attitudes among our customers. They expect a good business climate during 2007,” said Tommy Millner, Remington president and CEO.

“Our booths, on the main floor and in the Law Enforcement Section, have been packed,” said Mike Golden, Smith & Wesson president and CEO.

“I am struck by the vitality of this industry and the enthusiasm of the participants of the show,” said Mike Fifer, Ruger’s new CEO.

“Orlando proved to be a winning venue for us. The show was well-attended and vibrant,” said Doug Painter, National Shooting Sports Foundation (NSSF) president.

Surge In 2007 Sales

The increase in U.S. firearm business is substantiated by a record number of background checks conducted by the National Instant Criminal Background Check System (NICS). The FBI data shows a 17.53 percent increase in background investigations through May of this year. At the end of May, there were 660,631 more background checks conducted than during the same period in 2006. Records have been set every month this year. In May, there was an impressive 28.22 percent surge, with 803,051 background checks, a number usually associated with the peak fall buying season.

The record-setting pace in background checks began last year, providing strong momentum for 2007. The increase in 2006 sales is validated by statistics from the Treasury Department’s Pittman-Robertson federal excise tax collection report (page 32).

Excise taxes are calculated as a percentage of wholesale receipts. In 2006, handguns posted a 21.94 percent increase over 2005, with a staggering 56.4 percent jump during the fourth quarter. Long guns had a rollercoaster year, finishing down 1.73 percent. Overall, firearms posted a 5.6 increase in excise tax collection for 2006.

Imports, long a part of the U.S. firearm market, are an important element in the recent sales surge. Using U.S. manufacturing data from the ATF and import numbers from the Foreign Trade Division (page 42), there were 4,858,493 firearms available for sale in the United States in 2005.

Today, more top U.S. manufacturers are including foreign-made firearms in their product mix. The trend for major U.S. gunmakers received a boost from Remington when, in 2004, the company introduced a line of Russian-made “value-priced, break-action shotguns.” While criticized by some for the move, Tommy Millner, president and CEO, stood firm.

“These are great products and they deserve to bear the Remington name,” Millner said at the time.

Three years later, the number of foreign-made firearms offered by Remington has grown substantially. Imports have boosted Remington’s sales, something duly noted by other U.S. manufacturers.

At SHOT Show 2007, Smith & Wesson introduced a line of shotguns made in dedicated facilities in Turkey.

“At approximately $1 billion, nearly 60 percent larger than our traditional revolver and pistol market, the long-gun market represents a significant opportunity for growth,” Golden said.

Of the top U.S. manufacturers, only Ruger does not have a foreign-made firearm in its offerings. At SHOT Show, Fifer said, “At the moment we have no offshore sourcing and we have none in progress. But my responsibility is going to require that we evaluate all options ahead of us.”

'ATF’s Annual Data

The ATF’s latest Annual Firearms Manufacturing and Export Report is for 2005, since the agency embargoes the data for one year. The report provides valuable insight into the performance of individual companies and the type of firearms they produce.

In 2005, Remington Arms Co. again dominated U.S. firearm manufacturing, outdistancing other companies by nearly 200,000 firearms to top the list of the Top 25 U.S. Manufacturers (page 34). This is the fifth straight year the long-gun-only company achieved the number-one ranking.

“We were very pleased to read that Remington was the largest U.S. firearm manufacturer for the fifth year in a row. Our pride lies in the fact that this ranking reflects the overwhelming endorsement of Remington products by our loyal consumers. While we always enjoy being the biggest, this is not our goal. Our goal is to be the best in all the markets we serve by delighting our customers and consumers,” Millner said.

Manufacturing 611,383 firearms, Remington was the top manufacturer of rifles and shotguns in 2005 (page 40).

Smith & Wesson posted the most vigorous growth of all U.S. manufacturers in 2005, posting a 31.71 percent increase over 2004. The performance placed the company at the top of U.S. handgun manufacturers for the second straight year (page 36).

“We are extremely pleased with our results, which reflect the solid execution of our strategy to grow our core handgun business and diversify into new markets,” Golden said.

In foreign trade, U.S exports jumped 18.66 percent in 2005 (page 41), a refreshing change from a long period of decline. Surprisingly, imports dropped 2.2 percent after years of increases (page 42).

2005 Production

Total firearm production in 2005 increased 4.4 percent, following a 6-percent decline in 2004. Handgun and rifle production increased in 2005, while shotguns posted a slight decrease.

The top manufacturers in 2005, the numbers of firearms they produced and their change from 2004, were:

• Remington Arms: 611,383 (+3.2%)
• Ruger: 413,655 (-7.17%)
• Smith & Wesson: 310,202 (+31.71%)

The top handgun manufacturers:
• Smith & Wesson: 310,202 (+31.71%)
• Ruger: 184,008 (-2.8%)
• Springfield: 126,188 (+10.07%).

The top rifle producers in 2005 were:
• Remington: 302,272 (+10.42%)
• Ruger: 218,180 (-12.34%)
• Marlin: 205,479 (+9.91%).

The top three shotgun companies:
• Remington: 309,112 (-3.31%)
• Mossberg: 199,852 (-4.06%
• H&R 1871: 86,958 (-25.26%).

In 2005, handgun production increased 6.67 percent, after a 9-percent drop in 2004. Pistol production increased 11.94 percent in 2005 after a 10-percent increase in 2004. Revolver production declined 6.38 percent in 2005, this after a 5-percent drop in 2004.

Rifle production increased 6.74 percent in 2005, countering to a 7-percent decline in 2004. In shotguns, production decreased 3.01 percent after a slight increase in 2004.

U.S. Exports And Imports

The top three U.S. exporters for 2005, the numbers of firearms exported and the percentages of change from 2004, were Remington: 48,078 (+30.08%), Smith & Wesson: 38,163 (+40.37%) and Ruger: 20,122 (+4.24%).

In 2005, the top importers were Brazil: 368,907 (-4.75%), Austria: 289,712 (+15.70) and Italy: 261,838 (-6.70%).

Foundation For Growth

Two years ago, there were indicators the industry was poised for growth, even as U.S. manufacturers struggled to regain momentum after years of downturns. This report in July 2005 noted “Industry Embarks On A Period Of Growth.”

The evaluation went beyond analyzing data. More important, the industry had come together, forming a solidarity needed to battle “big city” lawsuits and a relentless anti-gun movement.

“The industry really grew up,” Sanetti said. “We saw, with the onslaught of mayors and attorneys general suing the industry, that we just had to get politically active. We banded together. We’re now a political force in our own right.”

As part of the solidarity, the industry strengthened the NSSF, supported the Heritage Fund and developed a strong pro-gun message.

A surge in sales of self-defense firearms played a strong role in the industry’s growth as citizens throughout the country noted, especially after tragic events, that their safety was in their own hands.

While the industry is enjoying healthy growth, there is an element of anxiety as the elections of 2008 approach.

“We have to keep our guard up, because the folks who would wish us poorly, they’re right around the corner waiting to take advantage of whatever political situation they can,” Millner said.

“Our message to the industry and to the shooters of America is the stakes have never been higher. It’s easy to get complacent when times are good. That’s the time you have to be careful,” Sanetti said.

“The good news is we have been putting together our dollars to mount the kinds of voter-education campaigns, the other kinds of legislative efforts, that we will face. The industry learned its lesson years ago. You have to be prepared,” Painter said.

The Testing Of 2008

The firearm industry today has all the markers for continued growth. In addition, the industry has a record of successes in political and legislative battles. All this will be greatly tested in 2008.

Success in the marketplace will continue only if there is also success in the political arena.