U.S. News

Maker of guns used in Sandy Hook shootings sees huge sales growth

Protesters on Monday in New York call on Cerberus Capital Management to divest its gun holdings.
Getty Images

The manufacturer of the assault-style rifles used in the mass shootings at Sandy Hook Elementary School in Newtown, Conn., last year said sales of its products rose as much as 36 percent in the year since the incident.

The disclosure comes in financial guidance released Monday by the Freedom Group, a collection of gun manufacturers that has recently begun referring to itself as Remington Outdoor Co., reflecting its most popular brand.

The company says 2013 sales are expected to be between $1.25 billion and $1.275 billion, compared with $931.9 million in 2012. Profits are expected to soar as well. The company projects adjusted 2013 EBITDA to be between $235 million and $240 million, more than a 50 percent increase from 2012.

In its updated financial guidance, the company does not say which of its products is primarily responsible for the increase in sales. Last month, the company reported strong demand since December 2012 across its product line, particularly for rifles, handguns and ammunition.

Investigators concluded last month that Adam Lanza, 20, used a Bushmaster model XM15-E2S rifle to kill 26 people at the school on Dec. 14, 2012.

"Consumer concern over more restrictive governmental regulation on the federal, state and local levels has contributed to this increase in demand," the company said in its third-quarter report.

Days after the Newtown massacre, Freedom Group's owner—Cerberus Capital Management—announced it planned to sell the company. The Wall Street Journal reports the company is near a deal that would bring in a minority investor and allow some of Cerberus' partners to cash out their stakes in the business.

According to the Journal, the deal would involve a $25 million equity investment and a new, $200 million credit facility. The deal reportedly values the company at $1.2 billion. There was no word on who the potential investor is.

In 2011, Cerberus scuttled plans for an initial public offering of Freedom Group's stock. The decision came months after a CNBC documentary examined allegations of flaws in Remington's most popular bolt-action rifle. The company maintains the product is safe and free from defects.

—By CNBC's Scott Cohn. Follow him on Twitter @ScottCohnCNBC.