HK HUNDREDS OF MILLIONS IN DEBT: German Firm Heckler & Koch Reportedly €170 MILLION in the Red

Via a press release published earlier this month, German gunmaker Hecker & Koch announced it had reduced its financial debt to a mere €170 million (~$194 million US), thanks to an equity increase of €50 million via a capital shares increase. With this, the company will issue approximately 6.6 million new shares, backed up by a capital injection of €50 million, and assistance in refinancing its 9.5% Senior Secured Notes at significantly lower debt. According to the release:

These funds will be provided initially in the form of a shareholder loan to be converted into share capital during the share capital increase to meet the time line of the refinancing of the 2011 9.50% Senior Secured Notes. Minority shareholders of H&K will have the possibility to subscribe for new shares on a pro-rata-basis and on the same economic terms against payment in cash.

Being almost two hundred million dollars in debt does not necessarily mean the German firm is in dire trouble, however, as they have recently gained significant contracts that will help offset this burden. Chief among those is the French AIF contract, estimated to be worth over €300 million ($342 million US). The revenue from this contract alone could offset the debt of the company, which as of 2013 was pegged at slightly higher than the company’s net worth. How the company’s finances will shake out, though, isn’t easy to predict, especially given the outstanding $27 million lawsuit from Orbital ATK over the failure of H&K to deliver XM25 CDTE grenade launchers. Still, the company being in debt to the tune of the entirety of or higher than their net worth does raise cause for concern, if they cannot significantly offset or restructure that debt.



Nathaniel F

Nathaniel is a history enthusiast and firearms hobbyist whose primary interest lies in military small arms technological developments beginning with the smokeless powder era. In addition to contributing to The Firearm Blog, he runs 196,800 Revolutions Per Minute, a blog devoted to modern small arms design and theory. He is also the author of the original web serial Heartblood, which is being updated and edited regularly. He can be reached via email at nathaniel.f@staff.thefirearmblog.com.


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  • Major Tom

    Man they really must hate us if they have almost 200 million dollars in debts.

    • Adam W

      At some point someone must have asked “Do you think we could be profitable if we sell our guns to people?”

      • Rusty S.

        Per the meme, they would have been promptly defenestrated.

    • El Dude

      No, the German government hates HK with a passion. Germans born after the War have been conditioned to be ashamed of their country and in turn have become a nation of cowards. Ask a German how proud they are to display their flag; they are ashamed of their past and are reminded by their Socialist government that they need to be pacifists.
      The hatred of HK is real and the government does everything in their control to limit the sales of weapons from Oberndorf. Look at Merkel’s “colorful” socialist history. She was a Stasi for Christ sake. There are Germans who want to encase the HK plant in concrete. Google it.
      HK would love to sell every semi-auto they could to the USA, but, are stifled by the government. I wish people would start telling the real story instead of the tongue-in-cheek joke that has become truth to some people.

      • mikee

        Well said! Being an ex-pat I totally agree with you. German politics has always been one of extremes since Bismarck’s governance – too far to the left or too far to the right. German technology, though cutting edge, tends to be over engineered.

        • HobgoblinTruth

          Merkels government has lowered social benefits, many voted againt equal marriage, etc. Not exactly a socialist party.

      • HobgoblinTruth

        Socialist government? Merkel is leading a Christian party and the democratic socialist party is less popular than CDU.

  • PK

    The frustrating part is that many things point to HK wanting to sell to US consumers, both more variety and at greater volume. The German government has kneecapped them, legally speaking, which is the same thing that seems to have led to their inability to fulfill the ATK contract.

    • Some Guy

      The German export laws allow selling weapons of war(the firearms of HK often do not fall in to this category)to NATO allies and countries with a good record with a license that HK has. Exporting firearms to other countries for other purposes has even less restrictions. Germany really is not stopping HK.

      • TheChunkNorris

        Bingo and that’s the reason they’re opening shop in Georgia.

        • Joshua

          I think a lot will be sorely disappointed in the Georgia shop.

          • TheChunkNorris

            You very well might be right but it’s too early to make that judgement.

          • Joshua

            Not really. 90% of the machines that will fill the new Georgia plant are already in the US being housed by Wilcox I believe….could be a different manufacturer…but I doubt the civilian market will improve on HK stuff.

          • Juggernaut

            It will be akin to buying a South Carolina-produced BMW:(

          • codfilet

            The BMWs made in Germany by Turks are soooo much better….

          • Juggernaut

            Turks are too lazy to work in factories- it’s all (real) Germans

          • MeaCulpa

            Well a M5 IS better than a X5 in every way imaginable.

          • Budi Utomo

            Actually Mercedes, BMW, and truly all the Euroepan car manufacturers sell CKU (complete Knock-down Units) to every nation who have policies of transfer of skills and technology (including my own (Indonesia) who assemble them in a very big company called PT Astra). BMW’s sold in America probably have a very restrictive union-imposed importation requirement that X% US labour be used in assembly-and so probably also arrive as CKU’s. That being said- US made X5’s are very popular here for the affluent.

        • Some Guy

          That is mostly because of tax reasons. Importing is not cheap. For example a Hk mr223a3 costs around 2100 dollars without taxes in Germany(2600 with), compare this to the US prices and you will see the difference.

          • Jason Culligan

            I’d like to know where you’re getting those prices. Here in the Netherlands an MR223 will set you back a cool €2800 or $3,200.

          • Some Guy

            Thats easy, i looked it up on a few German gun sites deducted our 19% sales tax and than converted it in to dollars. The sales tax in your country might be higher or there are additional taxes on guns. Even if you look at the higher prices around 2800 to aroun 3000 it is still cheaper than in the US.

          • burningwar

            In the US, before we even get down to state/county/city level stuff, there is an 11% federal tax on completed firearms.

          • HSR47

            There’s also the matter of import compliance costs: The MR556 needs to be compliant with 18 USC 922(r), which means that HK needs to import complete rifles, and then swap a bunch of parts once they get here.

      • I work as a gunwriter in Europe, so please believe me when I say: the German government IS stopping HK and bullying the German gun industry in general. For political reasons.

        • Some Guy

          Than write how they do it. There were no new laws about this and the export licensing was never threatend(mostly because the USA is safe country and this would affect the complete trade with the USA).
          The general secretary(a very high and important position) of the CDU(the party of Merkel) is a strong advocat with many supporters in his faction for HK, because he is elected in Oberndorf for the Bundestag. HK was the company for equiping friendly dictators during the cold war and still equips the armies the German goverment would like it to.

        • neckbone

          Could you please put an article together about this for us in the states?

          • I would love to. But it’s thin ice: I am not afraid to say that highlighting government bullying over companies, and the companies’ subjection, would be the end of my career.

            And any European gunwriter who will not acklowledge this is simply lying.

        • Mel_Anosis

          Perhaps HK should pull up roots and just move to the US. Europe is going to deteriorate from its open border policies anyway. I’d rather have Germans come here who know how to make excellent guns than mIddle easterners whose intents are unknown.

          • MeaCulpa

            As a Swede, originally from the city where the good Swedish mausers where made and where the block gauge was invented, can I come as well? I can argue the constitutionality of assault weapons ban pro bono on weekends or something. I’m no good in the cold so save me some space around Key West.

            *checks university diploma* SWEDISH law?! *sulks*

          • Mel_Anosis

            You are welcomed. We can sit around, have a drink and tell Norwegian jokes. I didn’t realize until recently Swedes like to
            give Norwegians a hard time. I have been giving my Polish heritaged friends a hard time with Polish jokes for decades. Guy stuff I guess.

          • CountryBoy

            You can always tell a Norwegian, but you can’t tell them much!

          • Budi Utomo

            Could be worse- could be Dutch: wooden shoes, wooden head, wouldn’t listen.

          • Dietrich

            Welcome to America my comrade in arms. We need more of you.

          • catfish252

            C’mon over we can always use a good Mauser Man.

        • Dietrich

          Thank you sir. That settles the argument. I’m an unapologetic H and K collector.

    • JumpIf NotZero

      This is such BS.

      Who prices HK gun so absurdly high in the US? HK.

      Who decides to not offer parts in the USA? HK.

      Who actively stops people from making parts compatible guns despite expired patents in the USA? HK.

      HK is not a well run company. They really do hate you. If they could exist without selling a single gun to a single civilian they would absolutely do that.

      • PK

        HK sets prices so that they make money on things they sell. Pretty common practice.

        Selling parts, that’s a trickier business… German weapons control laws aren’t friendly to that for civilian sales. It’s a minor miracle we have any HK guns in the USA these days.

        Protecting their own image/designs isn’t unheard of either. It’s fairly ordinary practice for companies to defend their products and stop others from making knockoffs.

      • john huscio

        HK was one of the few companies to speak out against the original AWB in 94……the “hate” they supposedly have for civilians is a fabrication.

        • Dietrich

          The absolute truth! After the AWB, nearly their entire line of rifles, including 10 round SL6s and SL7s along with the HK94,HK93 and flagship model HK 91 were banned by the ATF under old man Bush. Why wouldn’t they have reservations about U.S. sales? Quality doesn’t come cheap and I’m more than happy with my H and K products.

          • Reginald Pettifogger

            The AWB was instituted after “old man Bush” had left office.
            The bill was signed by that member of the VRWC Bill Clinton.

          • Dietrich

            Prior to the AWB of 1994,old man Bush allowed the ATF to write their own rules and banned the importation of AKs, H&Ks, Valmets FN FALs and others. This occurred around 1989 after the Stockton schoolyard shootings by a demented punk who shot around eight or ten kids. Old man Bush was no friend of the 2nd amendment or individual freedom.

          • Reginald Pettifogger

            Noted, but that was under the authority(sic) of the “Sporting Purposes Rule” put into GCA-68 by Senator Dodd the Elder – an authority that still exists, that has never been rescinded by The Congress of the United States.

          • Dietrich

            Technically you’re right. I stand corrected. I considered the Bush ban as the first AWB. Authoritarian government run amock. Utterly amazing that the H&K SL6 and SL7 fell into that category. They were primarily hunting rifles.

      • Audie Bakerson

        “Who actively stops people from making parts compatible guns despite expired patents in the USA?”

        How do they do that?

        • JSmath

          Pretty sure I’ve read in multiple places that they CnD anyone who has the gall to create three lug mounts or derivatives of it without paying royalties. Which is why if you try to search up a three lug mount to buy half the first thirty results are stores that used to sell them or forum pages of people linking sites or emails of the same.

          I hate HK for not selling third I find interesting, frankly. I’m a Counterhaterist.

      • mac12sam12

        The HK45 is made in NH.

      • Richard Rix

        To counter HK comment about pricing, etc. I present Colt. HK made some very good quality firearms, Bush import ban and later Clinton AWB put the hurt on them. So I don’t hate HK, but I wish they would market a few more economical lines like the VP9.

      • Wizard_of_odd

        You need to understand that the German Govt is the ones handcuffing HK’s US sales with their governmental “weapons of war” sales laws .
        You also need to learn that by parroting the HK “hates you” meme that you are unknowingly being used as a tool.
        The origin of that meme is from Todd Bailey of “special Weapons” & “Coharie Arms” infamy

        “The toad” Baily pushed that line when making REALLY poor quality MP5 closes to drum up his sales, as HK was head hunted not once but 3 times by name by 3 different presidential administration and the fact that they were barred from importing semi auto rifles for quite a while by both the US and German government they pursued the only line of import they could to maintain the US market :Pistols.

        As for the prices when you buy one you’re paying for two things : the QC and for further research.

        You can dislike HK all you want , but know the facts.

    • RazorHawk

      Yep, this is the same govt that just allowed fake “marraige” for the rainbow taliban and allowed uncontrolled muslim immigration, and therefore terrorism and gangs of savages, into their country,

      • John Yossarian

        Wow – “German Parliament Legalizes Gay Marriage; All Muslim Lawmakers Vote in Favor”

        So Muslims do approve of gay marriage – When it is fake and used to import more invaders.

        • Budi Utomo

          Those “Muslims” are Leftists- they had already sold their heart mind and soul to Mordechai and Bronstein’s plan for their eventual enslavement- ergo they submit not to Allah, but atheism.

          • John Yossarian

            Or perhaps the Marxists, Nihilists and Islamists are all simply Satanists?

      • TSXinTX

        Crazy, insane, nutty, stupid, Right Wing Talking Points!! Turn off FOX News, it’s making you more ignorant that you already are!

        • Wow!

          Hey, at least Fox News wasn’t the one caught leaking debate questions to a candidate, rigging their polls, editing interviews, staging scenes of riots, and putting out fake news under the guise of “confidential sources” which later was exposed as the liars they were when the facts about the Russian investigation came out… who is the ignorant one again?

          CNN and MSNBC are constantly exposed for putting out lies, but I still read their stuff because I don’t fear lies. Fox News has not even come close to that level (but they are going downhill ever since Roger Ailes got kicked out wrongfully IMO), but it is apparent you shut it off because you are afraid of the truth.

          • Milk Manson

            It’s amazing to me that anyone still thinks their favorite news organization is somehow different than the others. But FOX photoshopped nyt reporters to look like trolls and ran the pics as authentic! But CNN showed the inauguration crowed from a bad angle on purpose! And so on forever and ever.

          • Wow!

            There is a difference between Fox photo-shopping a picture to make fun of a guy (the subtitle on the picture pretty much said it all), and a news organization like CNN acting to trick viewers into thinking something is a fact when it is not. Ironically, that kind of highlights the issue when all the news outlets that previously were exposed by Fox started jumping on that to try and say “see?! Fox is as bad as us!”

          • Milk Manson

            It’s not unprofessional because they were just making fun of the guy.

            Got it.

            “I read from all because I don’t fear lies”

            Yeah, no kidding.

          • Wow!

            I didn’t say it isn’t unprofessional, it is just as unprofessional as news sources like CNN and MSNBC take political sides against conservatives. The difference is Fox News didn’t try leaking debate questions to a candidate, rigging their polls, editing interviews, staging scenes of riots, and putting out fake news under the guise of “confidential sources” which later was exposed as the liars they were when the facts about the Russian investigation came out etc.

            There is a difference between opinion pieces (which I agree are still unprofessional on both sides) and lies (which exist overwhelmingly on the left wing side).

          • Milk Manson

            If I told you that Nissan issued recalls for 30 different models over the last decade, while others like Ford and Volkswagen recalled well over 300… would you think Nissan builds the safer car?

          • Milk Manson

            That’s what I thought.

        • Ghost930

          You need to do your homework some more sport. There is quite a bit of both anecdotal and back channel discussion in European political circles, not FOX News, that there is a bit of truth to Yossarian’s assertions. Listening to MSNBC, CNN, CBS, etc., does not make you less ignorant. Everything in politics seems crazy, insane, nutty, stupid………..Until it isn’t, and becomes policy. Wise up.

        • darrell_b8

          “Ali Akbar”…….my favorite ‘German’….

          • Budi Utomo

            I think you mean “Allahu Akbar” the terrorists always shout whenever they commit an atrocity. I wonder why that is- maybe to associate Islam with horrible acts of terror? Who would gain most by that?

        • Budi Utomo

          It may surprise you that LGBT is a new Soros initiative to infiltrate and subvert sovereign state internal politics. It is the old Human Rights protector white-knighting. We may be Muslim, but we’re not entirely stupid. We remember when your US televangelist preachers were in Afghanistan telling us those lunatics where fighting for Christendom as well against the atheist Reds (yes we get the Trinity Bible Network on our cable too- Creflow Dollar, sell-out Hagee all the other snake-oil salesmen peddling “grace and indlugences” exactly as Luther protested about).

    • Mikial

      The German government is made up of fools and d@mn fools. Just look at what they have done to their own citizens by letting thousands of murderous Muslims into the country and then making it a crime to speak out against them.

  • TheChunkNorris

    Good ol Nathaniel and his HK posts… you’re the CNN of firearms media.

    • MrBrassporkchop

      Be nice

      • PK

        Seriously, comparing someone to CNN is brutal.

        • supergun

          That is the truth. cnn are traitors to America.

      • TheChunkNorris

        I was, I could’ve called him the Rachel Maddow of Firearms Media.

        • PK

          You leave Mr. Maddow out of this!

          • supergun

            She can’t help being a he.

        • supergun

          That would have got you banned, censored, exported from TFB.

  • Matt

    Yet they just completed a new 50K sq ft factory in Georgia… hmmm.

    • DW

      To dig themselves out of debt.

    • AC97

      Hmm, it’s not like doing that and being in debt actually aren’t mutually exclusive or anything.

      • Jim Slade

        Yep, the lights bulbs are still on at lots of US outfits whose balance sheets and prospects are utter dumpster fires.

    • Joshua

      Because they cannot keep up with the few contract the US Government has.

      It’s going to be a shame to see that CSASS contract get cancelled after building that factory.

  • This is pretty normal, Hk has been in and out of bankruptcy for the last 20 years.

    • Budi Utomo

      Could be worse- they could have either followed the “experts”, WB and IMF regulations to the letter (as we and Argentina did) or the lesser evil of employing British Leyland financial experts.

  • Sermon 7.62

    HK makes the best assault rifles at the present time. Now, Colt should go bankrupt.

    • Joshua

      Lol, no they make overrated guns that are merely average.

      The 416 is a overly heavy AR that’s hardly better than a basic 6920, but can’t hold a candle to what Hodge, LMT, KAC, etc are doing.

      • Joe Gamer

        You can’t really compare those boutique manufacturers to the global mass market enterprise of HK. It is very hard to scale quality alongside of quantity and no one does that better than HK. If I dropped a contract for 500k rifles on KAC could they deliver? More importantly, could they deliver without sacrificing their current quality standards?

        • Kinetics

          If you dropped a contract on H&K for 11,000 M27’s they barely delivered.

          500,000? It would take H&K 20 years to make that many guns at the rate they made IAR’s.

          • Joe Gamer

            lol, probably, I was just pulling big numbers out of my ass to highlight the differences in scale…Perhaps I went a bit far…lol

        • Joshua

          HK could barely keep up with the initial M27 contract that was only around 6,000 rifles.

          It took them 10 years to get 40,000 M320s delivered to the Army.

          And their CSASS rifles are so far performing poorly in field trials and that is likely to go the way of the Remington PSR.

          As for KAC? yes they could. They have a huge machine shop and none of their stuff is made from kraut space magic steel.

      • Sermon 7.62

        MR223 is a state of the art rifle, and 416 is better than all these DI rifles too. HK is the Hi-end of the assault rifles now, and the DI is outdated.

        • Joshua

          Lol.

          You’re an idiot. Your like the Russian version of Lance.

          • DW

            Lance was fun to watch
            the other guy was painful to watch

      • Longrange

        Navy Seals are still using HK416s even though they could buy whatever they want. HK416 IS heavy but it works for the usage Navy Seals use them for.

        • Joshua

          That’s not how that works.

          The contract vehicle JSOC has for the 416 still has like 5years left to be fulfilled. So until that contract vehicle can be fulfilled they won’t be getting anything. Why do you think they still use the base 416 from 2004, with a new rail and a few modifications to the gas station from Crane?

          If the 416 is soooo good and they can buy whatever they want, why not move to the 416A5? Because they still operate under government contracting laws…that’s why, and they have a limited budget, even if it is more than most.

          Trust me plenty of guys in JSOC want a Block II M4A1, and plenty of guys in JSOC want the 416.

          Fact is they will likely keep the 416 because they have a supply chain for it and changing is expensive and despite what the internet says JSOC doesn’t have unlimited funding.

          • DW

            One question though, why are there some people in JSOC prefer 416 and not a BlockII M4A1 or MK18?

          • Longrange

            It does not matter what I think. If 416 were a bad weapon JSOC could go to back to M16A1 of which the warehouses are full and which are fully paid. Maybe they have pay HK but no contract forces JSOC to wage war with bad weapons. If JSOC uses EOTech it fullfils at least minimum requirements or they would fall back to Aimponts of which there are plenty in the warehouses.

  • With the French contract, plus a very strong offering for the German contract, I’d imagine they will be fine.

    Of course if they need some quick cash, pumping out some P7’s, MP7’s, and MP5’s for the US civilian market would be a great way to go about it.

    • Stu

      I love P7’s, but you’re more likely to be elected POTUS while riding a unicorn around the solar system before we’ll ever see that labor-intensive beauty ever re-enter production.

      • With the proliferation of CNC’s, is it really that hard to bang out some new P7’s?

        • Stu

          Maybe not, but they’d be $2500 if they were a dime.

          • Sunshine_Shooter

            Maybe. The first 1,000 for sure, but by S/N 10,000+ the economies of scale would have brought that down some, if not a lot.

          • Stu

            SP5K’s are still selling for over $2000; I seriously doubt that they could sell 10k new P7’s when they’ll retail for over $2k. In any event, I stand by my original statement. I will publicly apologize if HK starts cranking out P7’s again. Then I will probably buy one.

        • ostiariusalpha

          You’d need to go with some MIM parts, but it’s totally doable.

    • aweds1

      They did bring back the SP5k, then priced it at over $2200, left off the paddle mag release, and didn’t include the 3-lug barrel… I mean, really? For a stamped design over 50 years old?

      • I think we’re at the stage in manufacturing where stamped sheet metal firearms are actually quite a bit more expensive / labor intensive to produce then those that are injection molded plastic, extruded aluminum, or CNC’d.

        Notably, AK’s being more expensive then AR’s now.

        There’s a P&S podcast where one of the guys visited HK, and described a Japedo like character hand fitting and spot welding MP5 uppers by hand in his workshop, while UMP’s were being jizzed out en masse by injection moulding machines.

      • TheChunkNorris

        They’re still German made and can’t have the same parts as their LEO/MIL counterparts… this is the German Export law’s doing.

      • HSR47

        A lot of the issues with the SP5k appear to be related to import and export issues.

        If they were making the guns stateside, they’d likely be able to make them more correctly, and at lower prices.

  • kjhsdklfhsdjklhf

    Hard to put into context with the rest of the financial picture(i.e. annual revenue, net profit). Not saying they aren’t struggling, but it’s not really as complete a picture as the article seems to be suggesting. If the data isn’t in the article, I assume the author doesn’t have it. If that’s the case, how was the conclusion drawn?

  • Gregory

    If H&K’s weapons were priced to sell, more people would purchase them. I want a P30, but they are just too expensive for what they are.

    • Mr._Exterminatus

      CDNN usually has good prices on HK pistols.

    • Mr._Exterminatus

      CDNN usually has good prices on HK pistols.

      • Gregory

        I will check their prices out.

        • PK

          Prepare to be pleasantly surprised. I ended up buying a P30 for around $600.

          • Mr._Exterminatus

            they’re the place to go for HK pistols, they regularly have VP9s for $500

  • Maxpwr

    Maybe they should raise the prices of their guns to make up the difference.

  • Bill Wilson

    Hold the phone, are you telling me people don’t want to spend $800 for the privilege of owning a USP Compact or P30?????? I am shocked I tell you, SHOCKED!

    • Joe Gamer

      The P30 is overpriced, BUT after watching them sit on the shelves they priced the P30sk quite a bit lower when it came out and it is a very good value. You can also pick up a P30 in .40sw for “cheap” because they aren’t selling at all. That’s what I did and they are SO GOOD as carry pistols.
      https://uploads.disquscdn.com/images/ea9324df2e3103cb6db1b93e57ca8bde38102d9266836e4f0a344f9930efbcce.jpg

      • Bill Wilson

        I think I saw some 9mm SK’s for $600 ish, that’s not too bad, pretty much just a hammer fired VP9 right? I liked the ergos of the VP9 though I am probably going to get some CZ variant, if I was going to get a striker gun, I’d probably get though vp9. If most of HK’s line was between like $600-$700 they would probably sell a lot better, if the USP compact was more $650 ish I’d pick one up.

        • Ruining IDPA

          How about you stop making arbitrary rules against CZ and CZ custom pistols for IDPA, while excluding comparable Wilson Combat models. It isn’t our fault that CZ Custom’s accushadow out classes all Wilson offerings $ for $. While we are at it, how about allowing standard 15-16 round mags for SSP and ESP? Kind of dumb to limit full size autos to 10 rds these days.

          • Bill Wilson

            I think you responded to the wrong guy.

          • supergun

            CZ shoot just as accurate as the Wilsons do. The Wilsons are just hand made. Both do the same game, just one is hand made. And you pay for that fact.

        • Mel_Anosis

          My wife has a VP9 and loves it. Since I’m a revolver guy who likes having a hammer I bought a P30sk and have no complaints whatsoever.

        • supergun

          If the H&K USP 45 Tactical was $900 I would buy one immediately.

      • supergun

        Good comment. I purchased the H&K VP 40 with night sights and 3 magazines for $579 a year ago. Dam nice 40.

    • supergun

      I keep wanting to purchase the H&K USP 45 Tactical. I could buy it if I wanted to. It many be worth $1,200. But I can’t seem to pull the trigger. If others want to buy it, more power to them. It is a beautiful operator. I’ve looked at it for over a year, so I purchased the SAR K2 45 that holds 15 45s for $369.. And that thing looks like a CZ and a SIG mixed together. What a weapon.

  • Jim Slade

    It’s Germany…. their national perspective on this is more influenced by history than firearms consumerism.
    First you let Mauser sell to both sides of every conflict, then you make a nutty little painter from Austria chancellor.
    Das Gesetz ist das Gesetz for a reason.

  • Clayton

    This article is tremendously misleading. “In the red” would imply inability to generate profit, and has nothing to do with debt.

    Debt is a financing mechanism. Given the contracts H&K has won and/or is likely to win, and the company’s valuation which is a product of future revenue realized through these contracts and other sales made, $170mm in debt may be perfectly reasonable. Research “cost of capital” and develop basic business knowledge before posting things like this.

    • James Young

      Thank you! I’m glad you said it because I didnt want to go through the trouble of explaining this. HK more than has contracts to pay their monthly debt payment. Most large companies use debt to grow. If they want to build a plant in the US while fulfilling govt contracts for the French, Germans, etc then they borrow money to get themselves there.

    • TheChunkNorris

      It’s click bait. HK’s troubles are well known and they’re coming out of the debt but since this is TFB and most people don’t see the point of buying HK… here we are.

    • neckbone

      You sound like a gov. accountant.

      • Doug73

        You sound like someone who doesn’t know even the first thing about corporate finance. Clayton is 100% correct.

        • neckbone

          You and Clayton both work in the corporate offices of Gander mountain, so tell us more about your expertise please.

    • Holdfast_II

      When liabilities exceed assets, an entity is “balance sheet insolvent”. That doesn’t mean that they will actually go into bankruptcy, receivership, etc. – but it does have real legal, financial and accounting consequences.

  • Dr. Longfellow Buchenrad

    Im sorry HK, but the 80s and 90s are over. MP5s are the only thing you make that people still want and Zenith builds them just as well, for less money, and in the configurations we actually want.

    • Sunshine_Shooter

      I think people also want G36’s and VP9’s (since one is a current gen, battle-tested rifle and the other is a very well selling pistol).

      But whatever.

      • crackedlenses

        Yeah, the G36 would be highly desirable on the civilian market for it’s cool factor if nothing else.

  • SerArthurDayne

    If the HK416 was available in the USA for $1,200 it would become the best selling AR-15 in the country.

    If you could get the HK416 10.4″ version for same, it would literally swap the government with NFA requests.

    All HK has to do is charge fair prices and they’d sell everything they ever wanted. Premium pricing is one thing, preposterous is another. And you can’t be all like, “We’re the best, we deserve to charge more!” if you can’t pay your bills. As a 15+ year veteran of the booze biz, I can’t tell you how many wineries have come and gone with the “We’re the super premium stuff! We deserve $20, $50, $75, $100, $250 etc. a bottle!”

    Maybe you do.

    But if I can get a Spanish or South American or even Australian comparable value for $7, $15, $35, $50, etc. Why would I pay you?

    I can’t think of anyone who actually DISLIKES HK’s products. They just dislike HK and their pompous-ass pricing and attitude. Give the people the products they want for the pricing they will pay (in order to sell $$$$ volume) and hey presto, dollar dollar billz y’all.

    • Seth Hill

      The problem is that you assume their costs to build are the same as here. Don’t forget that they have VAT added to all the materials they buy to build their guns. In the US there is no taxes on materials when they are used to produce something. Then you have most likely higher taxes and probably higher wages than here.

      • Malthrak

        Other European manufacturers can deliver high quality rifles to the US market for half or less what HK does.

        Beretta chose to set up a subsidiary in the US and ARX100 rifles can be had south of 1100 on the street/GB, with some people getting them for less than 1000. Cz is doing Brens for about half the price of an MR223.

        HK choses…not to.

        • PK

          “Other European manufacturers can deliver high quality rifles to the US market for half or less what HK does.”

          And how many are from Germany? The weapons control laws regarding export from the country for civilian-specific sales are horrendous.

          • Malthrak

            Why are German export laws always seemingly a problem for HK, but not say…Sig? Nobody is seeing $3k+ MCX rifles for instance.

          • HSR47

            Because the MCX is a product of Sig Sauer Inc., of Newington New Hampshire: It’s priced competitively on the U.S. market because it is made here.

          • Malthrak

            Sure…but why doesnt HK do the same thing? Sig does, Beretta does, CZ does, IWI does…what’s stopping HK? HK has their own plant here…

          • Longrange

            German government says: If you want to sell us anything you do what we say. Or else..

            SIG has only 50 employees left in Germany building X5s and X6s. SIG USA is not owned by the German SIG but by an offshore company without any ties to Germany or SIG in Germany. SIG got fed up with bi-yearly police raids to their German HQ and moved their operations 95% to US.

          • Dickson Ly

            MCX is made in the US.

      • Brett baker

        VAT is debated on exports.

        • HSR47

          The problem with VAT is that it’s a layered tax system — it’s applied at every stage in the process.

          Because of this, exports might be exempted from VAT on the price of the finished exported product, but the manufacture of that product will ALWAYS involve paying VAT imposed earlier in production, likely in multiple places.

          For example, it’s unlikely that companies like HK have separate tooling for their export production, which means that the machinery that they use to produce those products is subject to VAT. This raises the prices of the products made with that equipment, which pushes the prices of finished goods higher.

          TLDR: VAT is bad, because so much of it is hidden from the consumer (i.e. it’s impossible to know how much you’re actually paying in taxes when you buy something), and because it is impossible to avoid.

      • supergun

        It is a beach to do business in Germany.

      • MeaCulpa

        VAT is NOT added to the materials when a firearm or any other good is exported. The way it works is like this (all numbers are fictional). HK buys steel from a supplier for 100€, the supplier adds 20€ for VAT on the invoice (making the invoice 120€), the supplier keeps his 100€ and pays 20€ to the goverment, In HK’s books the purchase will result in 100€ In material costs and 20€ in incoming VAT, if HK sells the gun to a consumer in Europe for 200€ they’ll add 40€ VAT, 200€ will go into HK books as sales and 40€ in outgoing VAT, when it’s time for HK to declare their VAT they’ll subtract the incoming VAT from the outgoing VAT and pay the balance to the government, in this case 20€. If the gun instead is exported outside the EU HK will add no outgoing VAT, when they declare VAT in this scenario the subtraction will end up being minus 20€ and the government will return 20€ to HK (the VAT that HK paid to their supplier). The VAT is a tax on consumption by European consumers and doesn’t affect exports directly.

        • Seth Hill

          You are partially correct. HK is refunded the vat that they incurred, BUT the vendors that they purchase materials from do not get refunded because of HK’s product being exported. So the vat that the vendors incurred would be built into the price that HK paid for the materials (ie the 100 euro they paid would have 20 euro built in to cover vat). Remember, taxes (even VAT) is always passed to the “consumer”.

          • FarmerB

            Huh? *the vendors that they purchase materials from do not get refunded because of HK’s product being exported.*
            I don’t think that’s right. Basically, all companies get their VAT refunded – only the consumer does not.

    • “If the HK416 was available in the USA for $1,200 it would become the best selling AR-15 in the country.” I seriously doubt it. The AR market is flooded with quality rifles. Just a couple of weeks ago someone had colt 6920s on sale for something like $799.

      • john huscio

        “The AR market is flooded with quality rifles.”

        Depends on what constitutes “quality”. Im not sure id consider PSA, hardened arms or DPMS “quality”, “good enough” maybe.

        • PSA not quality? LOL, ok.

          Colt 6920s were on sale for $799 a few days ago. I guess Colt is not good enough either?

          • john huscio

            No one said anything about colt.

            That said, i wouldnt bet my life on a PSA rifle, but thats a protracted discussion for another thread….

        • HSR47

          Sure, but there there are also plenty of rifles from FN, Colt, BCM, Daniel Defense, Smith & Wesson (their 6920 competitor, not the “Sport” line), LWRC (Their DI line), and many others.

          That’s before you get to the more boutique manufacturers, like KAC, Noveske, LaRue, LWRC (their piston rifles), and others….

      • Reef Blastbody

        If HK offered a semi-auto only 416 for $1200, I’d have 2 of them, and be looking for people to go in on a build for .300 BLK barrels for one of them.

    • Samuel Millwright

      I wouldn’t buy a 416 for $795 if j&g had a warehouse full at blowout prices….

      Why?

      Because I’d likely have to spend $350 and 6 months neutering their mongoloid death piston and making the stupid thing run as a DI gun like god gene stoner and engineering best practices intended!

      • SerArthurDayne

        Uh, righto.

        • Samuel Millwright

          Not sure what’s even a little hard to understand about what i said… The 416 is an overweight overpriced AR clone where they didn’t even do a particularly notable job converting it to piston!

          You know, that piston conversion that beats the gun to death quickly when used with 855a1?

          The shooting underwater thing is cool i suppose, but since i don’t foresee needing to kill the scuba steve of the Islamic extremist world whilst submerged …. It’s of questionable utility.

          Especially since every bit of the information needed to replicate that ability in a standard AR is easily available.

          • Glenfilthie

            LOL. Sure dude. You run with that.😆

      • Dietrich

        I’m a 67 year old man with major bypass surgery. If I can handle the roller block, so can you.

    • Ben

      I wouldn’t buy one even if it were significantly less than 1200. IMHO, the only interesting guns HK ever made were derivatives of the G3.

    • supergun

      The price of anything is the amount of life you exchange for it.

  • Edeco

    Makes sense to me, the FNX45 makes HK’s horse pistols obsolete, sorry not sorry. The MP5 is expense and not as edgy as 20 years ago.

    • john huscio

      FN pistols in traditional calibers created since 2000 = LOL… magwells that turn to playdoh in direct sunlight, nonexistent aftermarket and uniformly crappy triggers.

      • Edeco

        The heck you say. Far as I can tell the one in the youtube vid was defective, don’t need an aftermarket when it’s already set for optics, muzzle devices and +P ammo, and the triggers are awesome. Colion Noir gives them a good review and I like them better than the vaunted Sig SRT.

        • john huscio

          Rather have a USP45c LEM or HK45c LEM. Ive handled most of the fnx/FNS guns and they were accross the board “meh” imo, add to that the cases of squishy magwells among other things, and it adds up to a hard pass.

  • 22winmag

    Firearms not Finance

    • No one

      This IS about firearms, have you ever made a post in the “actually good” category ever and not just something that looks like your brain skipped off track like a record needle mid post while typing a dumb statement?

      Don’t bother, we all know the answer.

  • BooBooBaby

    While the So called Refugees/Migrants/Illegal Aliens/Economic Moocher Rapefugees/Boat People and etc….live high on the hog! Those people keep invading and taking frim the German working taxpayers…and all.of Europe. My Goodness…you can’t even complain about it!!

    These invaders just come to Germany for the most Handouts and Freebies…..while the local Natives work their fingers to the born. This is all so that these invaders keep wages low (that’s if they also work while getting Welfare and etc.).

    These invaders will soon out populate the Native Germans/Europeans….we won’t even recognize it anymore….not a good thing. This is ALL for Votes from the Traitor politicians!!

    Thanks a lot, Merkel! She doesn’t care…she has No Children!

    White people, across the World, must Stop being responsible and start having More White Babies….everywhere….Asap! White people need to help their fellow whites too!!

    • Reed Cz

      Wat.

    • AC97

      Thanks for staying completely on-topic.

    • No one

      As a white person, legitimately KYS.

    • Cymond

      The new Disqus flagging system is awful. I flagged this because it violates TFB’s community standards, not because it violates Disqus’s TOS.

    • NanoSuitUser059 .

      The migrant issue isn’t bad because they’re brown and not working, it’s bad because they come from a completely backward society and culture while the European economies and society can’t assimilate them properly. It also has nothing to do with “freebies”. You’re completely off topic and spouting baseless and racist claims.

    • Able_Dart

      HONEY BOO BOO!! IZ THAT YOO??

    • No one

      I love how the literal off topic white supremacist comment got glanced over, but him reporting me because he was butthurt telling him what he should do for the good of humanity everywhere got purged in like a couple hours tops.

      Great job mod team!

    • HobgoblinTruth

      ” the So called Refugees/Migrants/Illegal Aliens/Economic Moocher Rapefugees/Boat People and etc….live high on the hog!”

      They get roughly 300€ per month, far less than German citizens.

      “. My Goodness…you can’t even complain about it!!”

      People are complaining all the time.

      “This is all so that these invaders keep wages low (that’s if they also work while getting Welfare and etc.).”

      Yes, that’s why many capitalists want more migrants.

      “These invaders will soon out populate the Native Germans/Europeans….”

      This is false claim.

      “White people, across the World, must Stop being responsible and start having More White Babies….everywhere….Asap! White people need to help their fellow whites too!!”

      I think i’m going to get an African wife and make some mixed kids. How about that?

    • DangerousClown

      Your caps key appears to randomly stick. Also, wtf?

  • Seth Hill

    1) Buy winning Mega and PB tickets
    2) Offer to pay off all H&K debts in exchange for 100% ownership
    3) Move company completely to US

  • John

    Meh. TFB reported just yesterday that French police agencies wanted 2,000 submachine guns to supplement officers, preferably in 9mm. Since the military gendarme is already vastly using the UMP, Heckler and Koch can just make more of those.

  • pcb_duffer

    The ” 2011 9.50% Senior Secured Notes ” is what caught my eye. That’s a steep price to pay for money.

    • Holdfast_II

      Especially for secured debt, though it would also depend on the term of the notes.

  • Veteran for Trump

    Well, the U.S. is 20 TRILLION in debt and we’re still here.

    • Longrange

      That is because USA can print US dollars. HK is not allowed to print money but they are close to bankcruptcy every 10 years anyway.

      China owns most of US government debt. Because USA is their biggest export market they can not shut USA down. At least not yet. At least not without big problems. What they can easily do is to tell Trump what do. Or else..

      Anyway comparing states and companies is not wise as nations can print money and companies can not.

      • TJbrena

        China only owns $1.something trillion in US debt. Most of the debt is owned domestically, some of it owed to gov’t entities to boot. Not to mention Chima owes US citizens something like $750 billion. Otherwise you’re right, we’re too big to fail.

  • Bill

    “but if HK just lowered their prices they would sell more!!!” Well here’s the thing – the benefits of lowering prices aren’t mutual. You and I benefit because we get HK guns at a cheaper price, but that doesn’t mean HK will benefit. Additional volume will be offset by lower revenue, and HK will actually be worse off if additional volume leads to greater shipping costs, taxes, fees, etc. It’s not like HK has a monopoly on firearms, and so the current price is probably close to the competitive price.

    Also: 170 million isn’t a lot of debt for a multinational corporation, relatively speaking.

  • Patrick Karmel Shamsuddoha

    H&K needs to be bought out by a US firm who will untie their hands

  • Alahahahah

    I’m sure things will change once they raise their ass to allalalalaa

  • Renov8

    Its a German company…what did you expect?

  • Joshua

    Yes and no. It’s not for civilian sales and the machines are already being housed by Wilcox and have been for a while.

    They’re just adding a few more to try and maintain what US contracts they have as they are struggling to keep up.

  • Malthrak

    Didnt they already have a plant in NH?

    Either way, they wont appear to have an excuse once the GA plant gets up and running for charging $3k for a rifle.

  • gunsandrockets

    Uh, does that title translate into, Living off of Death?

    Pretty brutal indeed.

  • Robert Bonaiuto

    No doubt HK is a top tier, world class arms manufacturer. But from my experience in the US civilian market their prices are prohibitive. You can get numerous pistols of other manufacture that are just as reliable, well built, and high quality for much lower prices. Walther, Glock, SW, Beretta, etc…
    As far as their long guns. Fuggedaboutit. Insanity. If they’d just find a way to make $800 semi auto MP5 variants they’d probably right the ship in a year.

  • Glenfilthie

    HK IS in trouble and no bones about it. When a company deliberately ignores and declines to participate in markets they could potentially own – you know you have serious problems in management.

    If I were to clean that particular house, I would have the entire senior management frog marched down to the armoury and shot with an MP5 in front of the employees. Then I’d ask if any of them want to join them on the unemployment line.

    Then you would see the MP5, MP7 on civilian markets right now. If that shrew of a chancellor said anything about it, I would tell that bints to shove it or I would lay everyone off, and move everything to the US. Americans like guns and they know the value of hard work. Most of ’em wouldn’t mind adding a G36 to their collections either. In fact I would tell those kraut morons that I will not only market what I want, where I want – they had damned well better give me tax breaks too. Or else.

    That alone would solve half the problem right there. The hard part would be going after the poor slobs on the shop floor. They would need to make concessions and take roll backs and probably even layoffs while the company reorganizes. I strongly suspect they could be re-hired when the company recovered.

  • Fred

    Well at least they have a good plan that includes not making their products available to biggest firearms consumer market known.

  • Sean Burrows

    Who the hell wrote this? Obviously not someone that understands finances, the definition of the terms “debt,” “liability,” “asset,” or “cash flow.” Nor has the author the most basic understanding of a balance sheet. The amount of stupid in this article if one can call it that is painful.

  • Matthew Parmentier

    H&K I wont miss it if it does go the way of Colt. Their sales representatives are… well, pushy to say the least. And the guy who runs their facebook page needs to be fired. I could have gotten the rest of the conversation in the same manner, but what I got was “You’re beyond saving”. Nothing you could even consider an argument. Sell me on the product, make me a believer. “Our ergos are unmatched, its the best ever” is extremely generic and not to mention highly subjective. I understand that shooting firearms is a subjective experience in and of itself, however there are things that really aren’t subjective; “Our gun is lighter, has a larger capacity, has a cut out for a red dot, and not to mention it has your choice of either a threaded or ported barrel.” That is salesmanship. H&K? Not so much.

    https://uploads.disquscdn.com/images/c98e149405bb50b1d02904eff4e0377f74c3def0de68a3e5b138869db49c2145.png

  • supergun

    Long Live America

  • Rich Rochester

    The elephant in the room here seems to be management. All this talk about financial remedies when nothing is being addressed concerning how they got in this mess. As W. Edwards Deming found out in the last century, management is responsible for about 90% of the outcomes of an organization. So, what is happening there? Look into the 7 M’s of problem solving: management, manpower, materials, measurement, machines, mother nature, miscellaneous. The problem will be found in one or more of those areas.

  • cruzo1981

    If the new Georgia facility doesn’t sell MP7’s they won’t get much out of it.

  • Mike Lashewitz

    I am sitting here and reading this and wondering how and why GERMANS are not allowed to own hand guns?
    This week I took 3 Germans here as Interns to the range. They all got to shoot for their first times.
    What kind of bullshit took away their right to bear arms?

  • Lee

    Dear HK,

    Simple solution, pack up and come to New Braunfeuls, Texas. We’re you will find pro gun populous with german speakers and Octoberfest. You should fit right in, and find plenty of sales here in the US. Texas welcomes firearms manufactures from all over as we are a very pro gun state. Hope to see you soon.

    PS, please donate some UMP 9mm’s to my department, thank you.

  • i1776

    How is this possible?!?! Their firearms are ridiculously overpriced. I would buy TWO P7M8’s if they went for 600 each. Are you listening HK? Two.

  • Mr Lizard

    If only there was a product that HK had designs and an entire factory line setup to produce in mass quantities. And that same product is already in mega demand by every gun enthusiast in America…

  • darrell_b8

    The problem is NOT HK management; the problem is the German Government and it’s policies toward export, etc. We’d have the same result if Hillary had been elected…

  • Budi Utomo

    Oh dear. Not good H&K. But 170 million is but a tiny drop in the ocean compared to the billions SauHexerin Merkel has outlayed and stored for her Kalergi program of “replacement of the proletariat” by imported proletarians (will always loyally vote for those who let them in and their panem (welfare)).
    Surely, to save German jobs- and save the public purse from the strain of more unemployed (very dangerous to establishment German CDU-CSU-SDP politics as each worsening situation of he German economy means more votes for outsider parties)- 170 million (actually rather paltry in the scheme of things- probably a fraction of tobacco revenue alone) on a 2% pa loan is worthwhile.

  • Reginald Pettifogger

    HK is the MB of German gun-makers: Over engineered and Over-priced.

  • Dietrich

    It’s you who equate guns to peckers sisterboy. For decades men shot battle rifles and didn’t bawl about a little recoil. Take up ping pong, stay away from magnums, avoid speed bumps and keep that latte and laptop close at hand.

    • Samuel Millwright

      And the for decades thing comes out…. Love it!

      You boomer trash are so predictable, stupid, self absorbed, and blindly dedicated to your circle jerking self congratulatory back slapping nostalgic navel gazing to even OCCASIONALLY look up and notice that the real world around you was NEVER the way you like to mythologize it and for god damn certain isn’t that way now!!…

      Oh btw “the roller block” isn’t actually a real thing boomer trash!

      Maybe you should, oh i don’t know, actually f***ing have some basic knowledge about firearms and firearms technology before you start trying to tell other people why they’re wrong etc…

      I mean, we get that you boomers have zero respect for the rest of us but you could at least have at least enough SELF RESPECT to not want to look like the mongoloid douchey malignant narcissists you guys pretty much universally come off as!

  • Ghost930

    So to prove a News Media outlet that you don’t happen to personally like lied, you quoted another (actually several) news media outlets. Sport, that takes a special kind of stupid. Especially since one of them was Rolling Stone, you know, the magazine that lied about a rape taking place on a college campus that almost got people erroneously thrown in prison, and who has been caught in flat out lies so many times that if you actually take them seriously you should be put involuntarily aboard the short bus from school. What actually makes you stupid, is not having the ability (as you apparently don’t) of going out and doing a little research, and actually finding out the facts, not the “news story”. Education, try to get some. and for Pete’s sake quit quoting the media as your source of “astounding” revelation of the TRUTH. What a putz.

  • user z

    LOL, Trump was being “legitimized”, wow, how out of touch can you be ? These guys are dumb and dumber.