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Remington 700 with a Tracking Point 2020 Digital Optic System (courtesy Remington)

We broke the news last week that Jason Schauble, TrackingPoint’s CEO, was freshly out of a job. Now we’re hearing that the purge continues — 30 more employees are heading towards the unemployment line, including the company’s CFO . . .

TrackingPoint was, to the outside observer, doing extremely well. They’ve sold out their initial run of “precision guided” rifles and according to the guys who run their testing and zeroing range they’re having to crank out more guns every week than they expected just to keep up with demand. Now, not only are they manufacturing their own rifle, but they’re tooling up to start working with Remington on producing their new 20/20 line.

But there’s something here we’re not seeing. Companies that are doing well don’t toss their CEO and 15 more employees on a whim. Other signs of trouble include some scaling back on expansion — they had planned to build a 500-yard indoor testing facility, but the current scuttlebutt is they’ve abandoned that idea because of cash flow issues.

If I were a betting man, I’d say that these layoffs might be due to slack demand. Or costs that got out of control. They have a niche product and it’s not something that everyone wants. They may have reached the saturation point too soon, and looking at the balance sheet for the next few quarters made them queasy. No other reason to fire a bunch of people the week before Thanksgiving that I can imagine.

[ED] The original version of this story reported that 15 employees were fired. The latest report puts that number at 30.

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  1. I can understand eliminating specific departments that are now redundant with the merger. So perhaps you term the CEO, and the CFO and 14 people in Accounting, HR and Payroll as those positions may already exist in the parent company and its a duplication of service.

    • This could be a good reason to pick up one of these guns. Obscure out of production firearm from a dead manufacturer that was way ahead of its time? That’s investment gold right there.

      • Nah. It might be collector gold, but the nature of computer-based technology is for the 2.0 version to be twice as good for half the price.

  2. Just a hunch from an undergrad business major here, but this sounds like the new management at Tracking Point found some serious accounting issues and is cleaning house .Inventory fraud, overstated assets,and other dirty tricks can make a debt ridden mess of a company temporarily look healthy, at least until the auditors show up.It’s not uncommon for poorly performing firms to bury liabilities or cash flow problems in order to attract a buyer.Once the mergers done then the new owners discover the ugly truth and go into damage control mode. Even if the products a cash cow, bad accounting can still take down the firm.

    That would explain the total cashiering of the management.If you come across systemic accounting errors or fraudulent activity, the only way to ensure it doesn’t happen again is to wipe the slate clean and start over, from the CEO on down.

        • To the business majors. Its good to see your enthusiasm but, what you are suggesting is merely stating basic causes of business failure; stating the obvious. Anyone in business is aware of these things. To advance your own education (which will come naturally with real world experience) focus on truly analyzing this particular case. Any of the causes you state could turn any company upside down. There are also many more, potential causes. Speculating, with limited info, is just that- pure speculation. And you’re likely to not know the real cause until it is announced. This is an interesting question, though! The company is run by very experienced people. Accounting errors are very unlikely. Running out of cash is very unlikely. Especially considering their success and limited competition. There are other good thoughts in this thread, including the redirection to the military market. Thats the obvious and largest consumer of this gear. Hiring some folks with that experience would hint at that direction. People with clearance and doing deals with the military. It will be interesting to see what is really going on. My guess is, it turns out to be a big success for the founders!

    • It’s all speculation until someone says something other than a bunch of people got fired, I can think of tons of reasons for downsizing early on in a product’s development. Forecasts change, R&D positions become redundant, conflicts of interest, accounting issues, cash flow problems, marketing issues, the list is potentially infinite…Strategic analysis is rarely simple, when I was in grad school, some case studies I did were over 400 pages. All we really know here is a bunch of people got canned. Why? I guess we’ll have to wait and see.

      • when you find your face covered with something near a fan suspect not something nice….

        worked for questionable companies before and it’s amazing how much can get swept under the rug…..

    • Sounds like it. I wouldn’t be suprised to read about them getting bought out by Remington by the end of the year.

    • Second the motion. But not necessarily the USG. There are plenty of little dictators out there willing to use their money to control the peons.

    • There’s an old bromide that’s told to every new doctor in his or her internship “When you hear the clopping of hooves do not look for zebras.”

      CFO and CEO out? Expansions put on hold because of cash flow issues?
      That sounds like old-fashioned bad business, probably toxic accounting, not jack-booted thugs in Black Helicopters coming to take you to FEMA re-education camps

  3. Cashflow issues have taken down a lot of companies but to fire your CFO and CEO in a week there is a serious issue in there somewhere. Probably on the cost side.

    I would think this product would be popular with the LEO/MIL community more than anyone; we all know how PD’s like to spend federal $$$ on flashy toys.

  4. Did Remington actually acquire TrackingPoint? If so, it makes perfect sense that these guys are getting fired.

    This is a common practice with virtually all acquisitions where a lot of the old management and whoever else is deemed unnecessary gets booted by the big guy. It’s for this reason that a lot of upper level managers in companies tend to not want to be acquired while equity holders in the company are all for it.

  5. Is everyone blind here? This is all about military vs civilian market. This system and tech will be going to the defense dept, not civilians. The claim they are “sold out” and cannot keep up with demand has nothing to do with the civilian market, they are pumping these out for the defense dept and military and this shakeup is all related to the conflict of that. Even when things are not going well a company this small does not fire it’s ceo, cfo and a dozen or more employees over financials. This is about which direction trackingpoint is going, civilian or military, and it looks like someone has made that decision.

    • I’m not too sure about that, I haven’t seen any award notice on FedBizOpps, let alone an RFP from DoD. Military sales may be their end goal, but I don’t think they’re there yet. Military procurement is insanely complicated and slow. Even if it is a Sole Source award, it would still take years of testing before a system is ever fielded…

  6. I’m not a conspiracy theorist. I’m a huge skeptic. And I have the feeling that this has to do with removing the corporate culture that believed these items should go to civilians .

    They are shifting to LEO/MIL only I bet, and getting rid of the team (and their hires) that aren’t on board with this.

    First “active shooter” to use a TP rifle to do his deed this company would have been politically finished. “An ounce of prevention”. By closing off civ sales and going LEO/MIL only , they reduce their liability and exposure while guaranteeing a healthy gov market into the future.

    In short , someone decided this tech was too dangerous for the non-elite.

    I usually don’t come to these conclusions… Call me paranoid if you wish… But this is one way to keep the tech out of the average joe’s hands without touching legislation or politics.

    • That’s the beautiful thing about technology, though. Once someone proves a thing is possible, it’s much easier for the next guy to duplicate his results. TrackingPoint can choose who to sell to now, but in a few years, when there are three or four competing systems on the market, they won’t all be able to just sell to the government. Somebody’s going to sell a similar technology to civilians. Genies and bottles and so on…

      In ten years, there will be YouTube videos and Instructables about how to build a DIY version using an iPhone 12G and a Turkish Mauser…

  7. “They may have reached the saturation point too soon, and looking at the balance sheet for the next few quarters made them queasy. No other reason to fire a bunch of people the week before Thanksgiving that I can imagine.”

    Nick, you are just not trying hard enough…lol…what did Hamlet say about “more things in heaven and earth…”

    • No, but they were marked for firing a couple days ago. It just took a while for the crosshairs to hit them again and the gun to go off.

  8. Is TrackingPoint owned by Freedom Group? If so, I’m not surprised. Take a look at one of the biggest holders of Freedom Group (George Soros) and consider his position on guns. If I were a little more paranoid, I’d say that the goal is to control as many gun manufacturers as possible, and to usurp the Constitution.

      • Something is going on here but not because TP has a buyer. Could owner McHale want to keep all the profits for himself? Shaubble worked for Remington and was instrumental in military contracts.He basically made TP.

  9. Funny how when something fairly typical in companies acquired by a private equity firm leads to conspiracy thoughts if the company being gutted involves firearms and/or new technology. I am proposing this as a probable explanation, which is supported by earlier firing of CEO. This is based on a lot of years having companies like these as clients. I propose that:

    The Freedom Group determined that Tracking Point is not ready for prime time quite yet and that the Tracking Point company was structured and staffed for going to market more quickly than was wise. In other words, while they would make money eventually, they were going to loose a ton if it until then because their overhead and cost structure is based upon selling too many, too costly widgets than the market would support. The CEO, and possibly the CFO would have been part of this analysis and discussion. When the CEO balked at playing ball, he was fired (last week) and plans went ahead to streamline Tracking Point. Make no mistake, the market for $3-4,000 do dads is slim, even though demand within that small market segment may be high. That does not mean that there is sufficient potential sales to support a company the size of Tracking Point as of last week.

    How can you tell is this is true? Find out if they will have gutted only sales, production, distribution, and accounting staff while keeping the engineering/product design people on. In this case, they are looking at a future product to be the money maker, not the current product. If the engineering and product design people were also let go, then Freedom Group picked up Tracking Point for its intellectual property, which they would probably expect to carry forward with engineers from Remington.

    Just a proposed explanation, but so far it fits the available facts. YMMV

  10. FWIW, Remington was showcasing the TrackingPoint PGF with the XAct Trigger at AUSA last month alongside all the new Remington Defense Products on display. Literally front and center.

  11. I recently relocated for a new job. When I was looking I sent a resume to Tracking Point (I think it was for a ballistics engineer). Now I’m kind of glad I didn’t get it…..

  12. It was 30 people and it was a cross section of employees. Manufacturing, Sales, HR, shipping, engineers etc. One engineer just relocated his entire family from Atlanta to Austin last week, only to be fired.

    Jason’s brother stayed in his position.
    Something funny is going on. Time will tell.

  13. Sounds to me like a bunch of hardworking everyday blue color type employees built up this company….worked their bums off to sell this technology..and then said technology it was sold to the highest bidder who wanted the technology…and why not get rid of everyone who built it up before they get their year end bonuses so the executive board might get a bigger payday….just an opinion.

  14. “They have a niche product and it’s not something that everyone wants.”

    Oh, I think everyone wants one of these, its just that, with systems starting at $9995 (according to their website), it’s a system that an average shooter cannot afford.

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