
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended:

	March 31, 2009

	OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _____ to _____

	Commission file number: 033-74194-01



	REMINGTON ARMS COMPANY, INC.
	(Exact name of registrant as specified in its charter)

UNITED STATES


Delaware		51-0350935
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~SECURITIES~~870 ~~AND~~Remington ~~EXCHANGE~~Drive ~~COMMISSION~~P.O. Box 700 Madison, North Carolina 27025-0700 (Address of principal executive offices) (Zip Code) (336) 548-8700 (Registrant’s telephone number, including area code)

~~Washington~~ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), ~~D.C.~~and ~~20549~~(2) has been subject to such filing requirements for the past 90 days.

~~FORM~~Yes ~~10-Q~~o No x

~~(Mark~~Note: ~~One~~Although the registrant is not subject to the filing requirements of Section 13 or 15(d), it has filed all Exchange Act reports that would be required to be so filed during the preceding 12 months.

x Indicate ~~QUARTERLY~~by ~~REPORT~~check ~~PURSUANT~~mark TOwhether ~~SECTION~~the 13registrant ORhas 15submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (d§232.405 of this chapter) OFduring ~~THE~~the ~~SECURITIES~~preceding ~~EXCHANGE~~12 ~~ACT~~months OF(or ~~1934~~for such shorter period that the registrant was required to submit and post such files). Yes o No o

~~For~~ Indicate by check mark whether the ~~quarterly~~registrant ~~period~~is ~~ended:~~a ~~June~~large 30accelerated filer, ~~2004~~an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

ORLarge accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company o (do not check if a smaller reporting company)

¨ Indicate ~~TRANSITION~~by ~~REPORT~~check ~~PURSUANT~~mark TOwhether ~~SECTION~~the 13registrant ORis 15a shell company (d)as OFdefined ~~THE~~in ~~SECURITIES~~Rule ~~EXCHANGE~~12b-2 ~~ACT~~of OFthe ~~1934~~Exchange Act). Yes o No x

~~For~~ At May 7, 2009, the ~~transition~~number ~~period~~of ~~from to~~ shares outstanding of each of the issuer’s classes of common stock is as follows: 1,000 shares of Class A Common Stock, par value $.01 per share.

~~Commission~~REMINGTON ~~file~~ARMS ~~number:~~COMPANY, ~~333-104141~~ INC.

~~REMINGTON~~FORM ~~ARMS COMPANY, INC.~~ 10-Q

~~(Exact~~March ~~name~~31, ~~of registrant as specified in its charter)~~ 2009

Delaware		51-0350935
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

INDEX

870 Remington Drive


		Page No.


Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Financial Statements	1

	Notes to Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4T.	Controls and Procedures	34

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	38

Item 6.	Exhibits	39

SIGNATURE		40

EXHIBIT INDEX		41

PRemington Arms Company, Inc.O. ~~Box~~Consolidated ~~700~~Balance Sheets (Dollars in Millions, Except Per Share Data)

Madison, North Carolina 27025-0700


	Unaudited						Unaudited

	March 31, 2009			December 31, 2008			March 31, 2008

ASSETS
Current Assets
Cash and Cash Equivalents	$	76.5		$	66.7		$	0.4
Accounts Receivable Trade - net		104.8			93.1			95.1
Inventories - net		99.5			102.0			147.7
Supply Inventory		6.2			6.5			6.2
Prepaid Expenses and Other Current Assets		16.2			17.8			23.7
Assets Held for Sale		1.9			1.9			—
Deferred Tax Assets		7.3			9.9			6.3

Total Current Assets		312.4			297.9			279.4

Property, Plant and Equipment - net		114.8			117.0			116.2
Goodwill and Intangibles - net		100.4			101.0			148.9
Debt Issuance Costs - net		2.7			3.1			4.3
Noncurrent Deferred Tax Assets		—			—			0.1
Other Noncurrent Assets		15.0			15.1			19.5

Total Assets	$	545.3		$	534.1		$	568.4

LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities
Accounts Payable	$	42.3		$	35.3		$	36.9
Book Overdraft		—			—			3.3
Short-Term Debt		2.1			3.2			3.3
Current Portion of Long-Term Debt		6.7			6.7			6.3
Current Portion of Product Liability		2.8			2.8			3.3
Income Taxes Payable		1.4			—			0.3
Other Accrued Liabilities		47.1			46.6			42.5

Total Current Liabilities		102.4			94.6			95.9

Long-Term Debt, net of Current Portion		267.7			269.1			251.9
Retiree Benefits, net of Current Portion		84.7			85.0			46.8
Product Liability, net of Current Portion		11.1			10.6			9.7
Deferred Tax Liabilities		9.8			9.7			31.4
Other Long-Term Liabilities		10.1			13.0			7.8

Total Liabilities		485.8			482.0			443.5


Commitments and Contingencies

Stockholder’s Equity
Class A Common Stock, par value $.01; 1,000 shares authorized and outstanding at March 31, 2009, December 31, 2008 and March 31, 2008, respectively		—			—			—
Paid in Capital		143.7			143.6			142.4
Accumulated Other Comprehensive Loss		(39.7	)		(41.6	)		(5.6	)
Accumulated Deficit		(44.4	)		(49.9	)		(11.9	)

Total Parent’s Equity		59.6			52.1			124.9
Deficit in Noncontrolling Interest		(0.1	)		—			—

Total Stockholder’s Equity		59.5			52.1			124.9

Total Liabilities and Stockholder’s Equity	$	545.3		$	534.1		$	568.4

~~(Address~~The accompanying notes are an integral part of ~~principal~~these ~~executive~~consolidated ~~offices)~~financial statements.

~~(Zip Code)~~ 1

Remington Arms Company, Inc. Consolidated Statements of Operations (~~336)~~Dollars ~~548-8700~~in Millions) (Unaudited)

(Registrant’s telephone number, including area code)


	Year-to-Date March 31,

	2009			2008

Net Sales	$	145.2		$	122.1

Cost of Goods Sold		104.7			93.2


Gross Profit		40.5			28.9

Selling, General and Administrative Expenses		25.7			23.9

Research and Development Expenses		2.1			1.8

Other Income		(1.9	)		(0.6	)


Operating Profit		14.6			3.8

Interest Expense		6.0			6.0


Income (Loss) from Operations before Income Taxes		8.6			(2.2	)

Income Tax Provision (Benefit)		3.2			(0.8	)


Net Income (Loss)		5.4			(1.4	)


Add: Net Loss Attributable to Noncontrolling Interest		0.1			—


Net Income (Loss) Attributable to Controlling Interest		5.5		$	(1.4	)

~~Indicate by check mark whether the registrant~~ (1) ~~has~~Sales ~~filed~~are ~~all~~presented ~~reports~~net ~~required to be filed by Section 13 or 15(d)~~ of ~~the~~Federal ~~Securities~~Excise ~~Exchange~~taxes ~~Act~~ of ~~1934 during~~$11.7 ~~the~~and ~~preceding~~$8.3 ~~12 months (or~~ for ~~such shorter period that~~ the ~~registrant~~year-to-date ~~was~~periods ~~required~~ended toMarch ~~file~~31, ~~such~~2009 ~~reports)~~ and ~~(2)~~2008, ~~has been subject to such filing requirements for the past 90 days~~respectively. ~~Yes x No ¨~~

~~Indicate~~The byaccompanying ~~check~~notes ~~mark~~are ~~whether the registrant is~~ an ~~accelerated~~integral ~~filer~~part ~~(as defined in Rule 12b-2~~ of ~~the~~these ~~Securities~~consolidated ~~and Exchange~~financial ~~Act of 1934)~~statements. ~~Yes ¨ No x~~

~~At July 31, 2004, the number of shares outstanding of each of the issuer’s classes of common stock is as follows: 1,000 shares of Class A Common Stock, par value $.01 per share.~~ 2

~~Table~~Remington Arms Company, Inc. Consolidated Statements of ~~Contents~~Cash Flows (Dollars in Millions) (Unaudited)

REMINGTON AR MS COMPANY, INC.


	Year-to-Date March 31,

	2009			2008

Operating Activities
Net Income (Loss) Attributable to Controlling Interest	$	5.5		$	(1.4	)
Net Income (Loss) Attributable to Noncontrolling Interest		(0.1	)		—
Adjustments to reconcile Net Income (Loss) to Net Cash used in Operating Activities:
Depreciation and Amortization		4.7			4.7
Pension Plan Contributions		(1.9	)		(2.8	)
Pension Plan Expense		1.1			(0.1	)
Provision (Benefit) for Deferred Income Taxes, net		1.5			(0.9	)
Other Non-cash Charges		0.3			3.2
Changes in Operating Assets and Liabilities:
Accounts Receivable Trade - net		(11.7	)		(12.7	)
Inventories		2.5			(8.9	)
Prepaid Expenses and Other Current Assets		3.9			(13.8	)
Other Noncurrent Assets		0.1			(1.1	)
Accounts Payable		7.0			3.3
Income Taxes Payable		1.4			0.2
Other Liabilities		(0.3	)		12.0

Net Cash provided by (used in) Operating Activities		14.0			(18.3	)


Investing Activities
Purchase of Property, Plant and Equipment		(3.1	)		(3.0	)
Payment for purchase of Marlin Firearms, net of cash acquired		—			(46.6	)

Net Cash used in Investing Activities		(3.1	)		(49.6	)


Financing Activities
Proceeds from Revolving Credit Facility		—			49.1
Payments on Revolving Credit Facility		—			(20.3	)
Payments on Long-Term Debt		(1.1	)		(0.1	)
Cash Contributions from FGI		—			18.2
Change in Book Overdraft		—			(2.0	)

Net Cash (used in) provided by Financing Activities		(1.1	)		44.9

Change in Cash and Cash Equivalents		9.8			(23.0	)
Cash and Cash Equivalents at Beginning of Period		66.7			23.4

Cash and Cash Equivalents at End of Period	$	76.5		$	0.4


Supplemental Cash Flow Information
Cash Paid for:
Interest	$	0.5		$	0.7
Income Taxes	$	—		$	—
Previously accrued Capital Expenditures	$	1.2		$	0.9
Noncash Investing and Financing Activities:
Financing of insurance policies	$	2.1		$	3.3

~~FORM~~The ~~10-Q~~accompanying notes are an integral part of these consolidated financial statements.

~~June 30, 2004~~ 3

~~INDEX~~Remington Arms Company, Inc. Consolidated Statement of Stockholder’s Equity and Comprehensive Income (Loss) (Dollars in Millions) (Unaudited)

			Page No.
	Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Parent’s Equity		Non- Controlling Interest			Total Stockholder’s Equity
Part I.	FINANCIAL INFORMATION
Balance, December 31, 2008	$	143.6		$	(41.6	)	$	(49.9	)	$	52.1	$	—		$	52.1
Item 1.	Financial Statements (Unaudited)
Comprehensive Income (Loss):
	Consolidated Financial Statements		1
Net Income (Loss)		—			—			5.5			5.5		(0.1	)		5.4
	Notes to Consolidated Financial Statements		5
Other comprehensive income:
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Net derivative gains, net of tax effect of $0.4		—			0.7			—			0.7		—			0.7
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35
Net derivative losses reclassified as earnings, net of tax effect of $0.7		—			1.2			—			1.2		—			1.2
Item 4.	Controls and Procedures		36
Total Comprehensive Income											7.4		(0.1	)		7.3
Part II.	OTHER INFORMATION
SFAS 123R Share Based Compensation		0.1			—			—			0.1		—			0.1
Item 1.	Legal Proceedings		37
Balance, March 31, 2009	$	143.7		$	(39.7	)	$	(44.4	)	$	59.6	$	(0.1	)	$	59.5
Item 2.	Changes in Securities and Use of Proceeds		40
Item 3.	Defaults Upon Senior Securities		40
Item 4.	Submission of Matters to a Vote of Security Holders		40
Item 5.	Other Information		40
Item 6.	Exhibits and Reports on Form 8-K		40
SIGNATURES			42
EXHIBITS

~~Table~~The accompanying notes are an integral part of ~~Contents~~these consolidated financial statements.

~~Remington Arms Company, Inc.~~ 4

~~Consolidated~~REMINGTON ~~Balance~~ARMS ~~Sheets~~COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

~~(Dollars~~Note in1 ~~Millions,~~- ~~Except~~Basis ~~Per~~of ~~Share~~Presentation ~~Data)~~

	Unaudited
	June 30, 2004			December 31, 2003
ASSETS
Current Assets
Cash and Cash Equivalents	$	0.6		$	0.4
Accounts Receivable Trade - net		97.2			67.1
Inventories - net		108.6			85.7
Supplies		6.1			6.7
Prepaid Expenses and Other Current Assets		10.2			6.8
Deferred Tax Assets		9.2			14.2
Total Current Assets		231.9			180.9
Property, Plant and Equipment - net		72.4			75.8
Intangible Assets (Goodwill and other) - net		62.7			62.7
Debt Issuance Costs - net		9.7			10.6
Other Noncurrent Assets		8.0			7.8
Deferred Tax Assets		1.1			—
Assets Held for Sale		—			18.0
Total Assets	$	385.8		$	355.8
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Accounts Payable	$	30.6		$	20.1
Book Overdraft		6.1			6.7
Short-Term Debt		2.5			—
Current Portion of Long-Term Debt		0.6			0.5
Current Portion of Product Liability		2.4			2.4
Accrued Income Taxes		0.3			2.5
Other Accrued Liabilities		32.3			28.7
Total Current Liabilities		74.8			60.9
Long-Term Debt, net of Current Portion		239.0			230.0
Retiree Benefits		46.9			43.1
Product Liability, net of Current Portion		6.9			7.3
Deferred Tax Liabilities		—			1.9
Other Long-Term Liabilities		0.2			0.2
Total Liabilities		367.8			343.4
Commitments and Contingencies
Shareholder’s Equity
Class A Common Stock, par value $.01; 1,000 shares authorized and outstanding at June 30, 2004 and December 31, 2003, respectively		—			—
Paid in Capital		86.4			86.4
Accumulated Other Comprehensive Income (Loss)		(0.3	)		(1.2	)
Retained Earnings (Accumulated Deficit)		(68.1	)		(72.8	)
Total Shareholder’s Equity		18.0			12.4
Total Liabilities and Shareholder’s Equity	$	385.8		$	355.8

The accompanying unaudited interim consolidated financial statements of Remington Arms Company, Inc. (“Remington”) includes the financial results of The Marlin Firearms Company (“Marlin”) and its subsidiary, H&R 1871, LLC (“H&R”), as well as the accounts of Remington’s other wholly owned subsidiaries, RA Brands, L.L.C. (“RA Brands”) and Remington Steam, LLC (“Remington Steam”), Remington’s consolidated joint venture EOTAC, LLC (“EOTAC”) and Remington’s unconsolidated 27.1% membership interest in INTC USA, LLC (“INTC USA”) (collectively with Remington, the “Company”) unless the context otherwise requires.

All significant intercompany accounts and transactions have been eliminated. The ~~accompanying~~accounts ~~notes~~of the Company’s parent, RACI Holding, Inc. (“Holding”), which owns 100% of the 1,000 shares authorized, issued and outstanding of Remington’s Class A common stock (par value $0.01 per share), and those of Freedom Group, Inc. ~~are~~ (“FGI”), an ~~integral~~affiliate ~~part~~of Cerberus Capital Management, L.P. (“CCM”, and along with CCM’s affiliates other than operating portfolio companies, collectively “Cerberus”) and the 100% owner of ~~these~~Holding, are not presented herein. Significant transactions between the Company, Holding and FGI and the related balances are reflected in the unaudited interim consolidated financial statements and related disclosures.

On January 28, 2008, 100% of the shares of Marlin were purchased by Remington (the “Marlin Acquisition”). The Marlin Acquisition includes Marlin’s 100% ownership interest in H&R. Although the Marlin Acquisition closed on January 28, 2008, based on the accounting policies adopted by Marlin and in place prior to the Marlin Acquisition, full financial statements were not available for the resulting stub period January 28-31, 2008 (the “Stub Period”). In addition, it was determined by the Company that it would require significant effort and time to generate financial statements for the Stub Period. Based on materiality tests performed using guidance from Staff Accounting Bulletin (“SAB”) Topic 1 (M1), the Marlin Stub Period was deemed immaterial to the unaudited interim consolidated financial statements and thus, Remington began reporting consolidated financial statements with Marlin financial data beginning February 1, 2008.

~~Table~~ The accompanying unaudited interim consolidated financial statements of ~~Contents~~Remington have been prepared by the Company in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, and accordingly, do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of items of a normal recurring nature) considered necessary for a fair presentation of the unaudited interim consolidated financial statements have been included. Operating results for the three month period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2009. The year-end balance sheet information for 2008 was derived from the audited consolidated financial statements for the year ended December 31, 2008, but does not include all disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”).

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of Remington ~~Arms~~and ~~Company~~subsidiaries as of and for the year ended December 31, ~~Inc~~2008, and any Current Reports on Form 8-K filed subsequent to December 31, 2008.

~~Consolidated~~Note ~~Statements~~2 of– ~~Operations~~Acquisition

Remington completed its acquisition of all of the outstanding shares of Class A and Class B Common Stock (~~Dollars~~collectively, inthe ~~Millions~~“Shares”) of Marlin on January 28, 2008 (the “Marlin Closing Date”), from the shareholders of Marlin (collectively, the “Marlin Sellers”) pursuant to a stock purchase agreement (the “Marlin Stock Purchase Agreement”) dated as of December 21, 2007 by and among Marlin, Remington, the Marlin Sellers party thereto, and Frank Kenna, III, solely in his capacity as the Shareholders’ Representative. The Marlin Acquisition includes Marlin’s 100% ownership interest in H&R. Remington completed the Marlin Acquisition in an effort to grow its leadership position in shotguns and rifles in the United States, to further develop market presence internationally and to benefit from operational improvements and integrating certain selling, marketing and administrative functions.

	Unaudited
	Quarter Ended June 30,						Year-to-Date June 30,
	2004			2003			2004			2003
Sales (1)	$	87.2		$	80.1		$	171.1		$	161.1
Cost of Goods Sold		70.7			61.1			135.1			120.7
Gross Profit		16.5			19.0			36.0			40.4
Selling, General and Administrative Expenses		16.5			14.3			32.8			30.9
Research and Development Expenses		1.5			1.7			3.0			3.2
Other (Income) Expense		(0.4	)		(0.2	)		(0.8	)		(0.7	)
Other Unusual Charges		—			—			—			6.7
Operating (Loss) Profit		(1.1	)		3.2			1.0			0.3
Interest Expense		6.2			6.0			12.3			10.8
Loss Before Income Taxes, Discontinued Operations And Sale of Assets		(7.3	)		(2.8	)		(11.3	)		(10.5	)
Benefit for Income Taxes		(3.0	)		(1.1	)		(4.5	)		(4.0	)
Loss from Continuing Operations before Discontinued Operations and Sale of Assets		(4.3	)		(1.7	)		(6.8	)		(6.5	)
Income from Discontinued Operations, net of tax expense of $0.1 and $0.3, respectively, for the quarter-to-date periods ended June 30, 2004 and 2003, and $0.0 and $0.6 for the year-to-date period ended June 30, 2003		0.3			0.5			0.1			1.1
Gain on Sale of Assets, net of tax expense of $0.4 for the quarter ended and $9.8 for the year-to-date period ended June 30, 2004		0.5			—			13.5			—
Net Income (Loss)	$	(3.5	)	$	(1.2	)	$	6.8		$	(5.4	)

The Marlin Acquisition was accounted for as a business combination using the purchase method of accounting, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business

(1) Sales are presented net of Federal Excise taxes of $7.3 million and $6.6 million for the quarter-to-date periods and $14.1 million and $13.3 million for the year-to-date periods ended June 30, 2004 and 2003, respectively.5

~~The~~REMINGTON ARMS COMPANY, INC. ~~accompanying~~ NOTES ~~notes~~TO ~~are~~CONSOLIDATED anFINANCIAL ~~integral~~STATEMENTS ~~part~~ (dollars ofin ~~these~~millions, ~~consolidated~~except ~~financial~~per ~~statements.~~share amounts) – Unaudited

2Combinations (“SFAS 141”), whereby the preliminary purchase price (including assumed liabilities) is allocated and pushed down to the assets acquired based on their estimated fair market values at the date of the Marlin Acquisition.

~~Table~~ The oftotal ~~Contents~~acquisition cost for the Marlin Acquisition was approximately $48.1 (the “Acquisition Cost”).

~~Remington~~ In ~~Arms~~conjunction ~~Company~~with the Marlin Acquisition, ~~Inc~~the Acquisition Cost was allocated to reflect the fair value of the assets acquired and liabilities assumed as of the Marlin Closing Date in accordance with SFAS 141. The preliminary allocation for the Marlin Acquisition is listed below along with subsequent adjustments.

Consolidated Statements of Cash Flows


	Preliminary Allocation		Net Adjustments			Final Allocation


Inventory	$	25.0	$	(0.4	)	$	24.6
Other Current Assets		11.6		3.4			15.0
Property, Plant and Equipment		15.6		(2.9	)		12.7
Goodwill		6.0		3.1			9.1
Trade Names and Trademarks		8.7		—			8.7
Customer Relationships		2.2		—			2.2
Other Long-Term Assets		5.9		—			5.9

Total Assets Acquired		75.0		3.2			78.2


Current Liabilities		14.3		3.1			17.4
Pension & OPEB		7.1		—			7.1
Other Non-Current Liabilities		5.2		0.4			5.6

Total Liabilities Assumed		26.6		3.5			30.1


Acquisition Cost	$	48.4	$	(0.3	)	$	48.1

~~(Dollars~~ On April 7, 2008, the Company announced a strategic manufacturing consolidation decision that resulted in ~~Millions)~~the closure of its manufacturing facility in Gardner, Massachusetts in October 2008. The Company notified affected employees of this decision on April 7, 2008.

	Unaudited
	Year-To-Date June 30,
	2004			2003
Operating Activities
Net Income (Loss)	$	6.8		$	(5.4	)
Adjustments to reconcile Net Income (Loss) to Net Cash provided by Operating Activities:
Depreciation		4.5			4.8
Amortization		0.9			2.4
Gain on Sale of Assets Held for Sale		(23.3	)		—
Loss on Disposal of Assets		0.2			0.5
Provision for Retiree Benefits		4.1			2.1
Provision for Deferred Income Taxes, net		2.0			0.1
Changes in Operating Assets and Liabilities:
Accounts Receivable Trade - net		(30.1	)		(21.9	)
Inventories		(22.9	)		(28.3	)
Supplies		0.6			0.2
Prepaid Expenses and Other Current Assets		(3.4	)		(4.5	)
Other Noncurrent Assets		(0.2	)		2.1
Accounts Payable		10.5			10.4
Product Liabilities		(0.4	)		1.4
Income Taxes Payable		(2.2	)		(4.7	)
Other Accrued and Long-Term Liabilities		2.6			(8.7	)
Net Cash used in Operating Activities		(50.3	)		(49.5	)
Net Cash provided by (used in) Discontinued Operations		0.1			(1.7	)
Net Cash used in Operating Activities		(50.2	)		(51.2	)
Investing Activities
Proceeds from Sale of Assets, net of Transaction Costs of $1.2		42.8			—
Purchase of Property, Plant and Equipment		(1.8	)		(2.7	)
Proceeds from Sale of Property, Plant and Equipment		0.5			—
Net Cash provided by (used in) Investing Activities		41.5			(2.7	)
Net Cash used in Discontinued Operations		—			(0.1	)
Net Cash provided by (used in) Investing Activities		41.5			(2.8	)
Financing Activities
Proceeds from Revolving Credit Facility		87.7			115.6
Payments on Revolving Credit Facility		(78.5	)		(59.4	)
Cash Dividends Paid		(2.1	)		(101.2	)
Proceeds from Issuance of Long-Term Debt		—			200.0
Principal Payments on Long-Term Debt		(0.1	)		(87.4	)
Capital Contributions from RACI Holding, Inc.		—			4.5
Net Borrowings from Short-Term Debt		2.5			2.9
Decrease Book Overdraft		(0.6	)		(8.9	)
Debt Issuance Costs		—			(11.6	)
Net Cash provided by Financing Activities		8.9			54.5
Decrease in Cash and Cash Equivalents		0.2			0.5
Cash and Cash Equivalents at Beginning of Period		0.4			0.4
Cash and Cash Equivalents at End of Period	$	0.6		$	0.9
Supplemental Cash Flow Information:
Cash Paid During the Year for:
Interest	$	11.1		$	9.7
Income Taxes	$	4.6		$	1.3
Noncash Financing and Investing Activities:
Issuance of Deferred Shares in Lieu of Bonus	$	—		$	0.3
Payment Made to Vendors on Behalf of RACI Holding, Inc.	$	—		$	1.0
Capital Lease Obligations Incurred	$	—		$	0.1

In connection with the closing, management recorded a $1.2 liability in the purchase price allocation in accordance with EITF 95-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs incurred in a Restructuring). As of March 31, 2009, approximately $1.1 of the $1.2 liability had been spent. In addition, $2.9 had been spent on the transfer of equipment, planning and site preparation, and purchases of new equipment as of March 31, 2009.

~~The~~ In ~~accompanying~~March ~~notes are~~2009, the Company recognized a $2.0 gain from the release of a federal excise tax liability as a result of an ~~integral~~audit ~~part~~settlement. Since the settlement was reached outside the one year window for purchase price accounting, the amount was recognized as a gain in the statement of ~~these~~operations ~~consolidated~~rather ~~financial~~than ~~statements~~an adjustment to goodwill.

3 Pro Forma Financial Information

~~Table~~ The following unaudited pro forma results of ~~Contents~~operations assume that the Marlin Acquisition occurred at the beginning of 2008. The results have been adjusted for the impact of certain Marlin Acquisition-related items, such as additional sales; depreciation expense of property, plant and equipment; additional amortization expense of identified intangible assets; recognition of write-up in cost of sales as inventory is sold and the related income tax effects. Income taxes are provided at the estimated effective rate. This unaudited pro forma information as of March 31, 2008, should not be relied upon as necessarily being indicative of historical results that would have been obtained if the Marlin Acquisition had actually occurred on those dates, nor the results that may be obtained in the future. The March 31, 2009 information below represents the actual unaudited results for the period.

~~Remington Arms Company, Inc.~~ 6

~~Consolidated~~REMINGTON ~~Statement~~ARMS ofCOMPANY, ~~Shareholder’s~~INC. ~~Equity~~ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (~~Accumulated~~dollars ~~Deficit)~~in ~~and~~millions, ~~Comprehensive~~except ~~Income~~per share amounts) – Unaudited

(Dollars in Millions)


Unaudited Pro Forma Financial Results	For the Three Months Ended


	March 31, 2009		March 31, 2008

Net Sales	$	145.2	$	127.0
Operating Income		14.6		3.9
Net Income (Loss)		5.5		(1.3	)

~~(Unaudited)~~Note 3 – Fair Value Measurements

	Paid-in Capital		Accumulated Other Comprehensive Income			Retained Earnings (Accumulated Deficit)			Total Shareholder’s Equity
Balance, December 31, 2003	$	86.4	$	(1.2	)	$	(72.8	)	$	12.4
Comprehensive Income:
Net Income		—		—			6.8			6.8
Other comprehensive income:
Net derivative gains, net of tax effect		—		1.5			—			1.5
Net derivative gains relassified as earnings		—		(0.6	)		—			(0.6	)
Total Comprehensive Income		—		0.9			6.8			7.7
Cash Dividend Paid		—		—			(2.1	)		(2.1	)
Balance, June 30, 2004	$	86.4	$	(0.3	)	$	(68.1	)	$	18.0

The Company adopted SFAS No. 157, Fair Value Measurements (“SFAS 157”), and SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”), on January 1, 2008. SFAS 157 (1) creates a single definition of fair value, (2) establishes a framework for measuring fair value, and (3) expands disclosure requirements about items measured at fair value. SFAS 157 applies to both items recognized and reported at fair value in the financial statements and items disclosed at fair value in the notes to the financial statements. SFAS 157 does not change existing accounting rules governing what can or what must be recognized and reported at fair value in the Company’s financial statements, or disclosed at fair value in the Company’s notes to the financial statements. Additionally, SFAS 157 does not eliminate practicability exceptions that exist in accounting pronouncements amended by SFAS 157 when measuring fair value. As a result, the Company will not be required to recognize any new assets or liabilities at fair value.

Prior to SFAS 157, certain measurements of fair value were based on the price that would be paid to acquire an asset, or received to assume a liability (an entry price). SFAS 157 clarifies the definition of fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (that is, an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. In some circumstances, the entry and exit price may be the same; however, they are conceptually different.

~~The~~ Fair ~~accompanying~~value ~~notes~~ is generally determined based on quoted market prices in active markets for identical assets or liabilities. If quoted market prices are annot ~~integral~~available, ~~part~~the ofCompany ~~these~~uses ~~consolidated~~valuation ~~financial~~techniques ~~statements~~that place greater reliance on observable inputs and less reliance on unobservable inputs. In measuring fair value, the Company may make adjustments for risks and uncertainties, if a market participant would include such an adjustment in its pricing.

4 SFAS 157 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

~~Table~~Level of1 ~~Contents~~– Quoted market prices in active markets for identical assets or liabilities; Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable; and Level 3 – Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that market participants would use.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ 7

REMINGTON ARMS COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (~~Dollars~~dollars in ~~Millions~~millions, ~~Except~~except ~~Per~~per ~~Share~~share ~~Amounts~~amounts) ~~- Unaudited~~– Unaudited

~~Note~~The 1following -table ~~Basis~~presents ofinformation ~~Presentation~~about assets and liabilities measured at fair value on a recurring basis:

The accompanying unaudited interim consolidated financial statements of Remington Arms Company, Inc. (“Remington”) include the accounts of its wholly owned subsidiaries, RA Brands, L.L.C. (“RA Brands”) and RA Factors, Inc. (together with Remington, the “Company”). The accounts of the Company’s parent, RACI Holding, Inc. (“Holding”), which owns 100% of the issued and outstanding common stock of Remington, are not presented herein. Significant transactions between the Company and Holding and the related balances are reflected in the consolidated financial statements and related disclosures.


	Fair value measurements at March 31, 2009 using:

	Quoted prices in active markets for identical assets	Significant other observable inputs	Significant unobservable inputs

	Level 1	Level 2	Level 3	Total

Assets:
Commodity Contract Derivatives	Not applicable	$2.7	Not applicable	$2.7
Life Insurance Policies	$0.1	Not applicable	Not applicable	$0.1
Liabilities:
None	Not applicable	Not applicable	Not applicable	Not applicable

~~The~~ As ~~accompanying~~shown ~~unaudited interim~~above, ~~consolidated~~commodity ~~financial~~contract ~~statements~~derivatives ofvalued ~~Remington~~based ~~have~~on ~~been~~fair ~~prepared~~values provided by the Company’s incounterparties ~~accordance~~are ~~with~~classified ~~the~~within ~~instructions~~level to2 ~~Form 10-Q and Rule 10-01~~ of ~~Regulation~~the ~~S-X,~~fair ~~and~~value ~~accordingly,~~hierarchy. doLife ~~not~~insurance ~~include~~policies ~~all~~valued ofby ~~the~~using ~~information~~cash ~~and~~surrender ~~footnote disclosures~~values, ~~required~~net byof ~~generally~~related ~~accepted~~policy ~~accounting~~loans, ~~principles~~are ~~for~~classified ~~complete~~within ~~financial~~level ~~statements.~~1 Inof the ~~opinion~~fair ofvalue ~~management,~~hierarchy. ~~all~~The ~~adjustments~~determination ~~(consisting~~ of where ~~items~~an ofasset aor ~~normal~~liability ~~recurring~~falls ~~nature)~~in ~~considered~~the ~~necessary~~hierarchy ~~for~~requires asignificant ~~fair~~judgment. ~~presentation~~The ~~have been~~Company ~~included.~~evaluates ~~Operating~~its ~~results~~hierarchy ~~for~~disclosures ~~the~~each ~~six~~quarter ~~month~~based ~~period~~on ~~ended~~various ~~June~~factors ~~30,~~and ~~2004~~it ~~are~~is ~~not~~possible ~~necessarily~~that ~~indicative~~an ofasset ~~the~~or ~~results~~liability ~~that~~ may be ~~expected~~classified ~~for~~differently ~~the~~from ~~full~~quarter ~~year~~to ~~ending~~quarter. ~~December 31~~However, ~~2004. The year-end condensed balance sheet was derived from~~ the ~~audited~~ ~~consolidated~~Company ~~financial~~expects ~~statements~~that ~~but~~changes ~~does~~in ~~not~~classifications ~~include~~between ~~all~~different ~~disclosures~~levels ~~required~~will bybe ~~generally accepted accounting principles~~rare.

~~These~~ Most ~~consolidated~~derivative ~~financial~~contracts ~~statements~~are ~~should~~not belisted ~~read~~on inan ~~conjunction~~exchange and require the use of valuation models. Consistent with SFAS 157, the ~~audited~~Company ~~consolidated~~attempts ~~financial~~to ~~statements~~maximize the use of ~~Remington~~observable ~~Arms~~market ~~Company~~inputs in its models. When observable inputs are not available, ~~Inc~~the Company defaults to unobservable inputs. Derivatives valued based on models with significant unobservable inputs and ~~subsidiaries~~that asare ofnot ~~and~~actively ~~for~~traded, ~~the~~or ~~year~~trade ~~ended~~activity ~~December~~is 31one way, ~~2003~~are classified within level 3 of the fair value hierarchy.

A The ~~reclassification~~Financial ofAccounting ~~licensing~~Standards ~~income~~Board ~~from~~(“FASB”) ~~selling,~~issued ~~general,~~FSP ~~and~~SFAS ~~administrative~~157-2 ~~expense~~(“FSP toSFAS ~~other~~157-2”) ~~income~~on ~~was~~February ~~made~~12, 2008 to ~~financial~~provide ~~information~~a ~~from~~one-year ~~prior~~deferral ~~periods~~of tothe ~~conform~~effective ~~with~~date ~~the~~of ~~current~~SFAS ~~presentation~~157 ~~format.~~for ~~The~~nonfinancial ~~reclassification~~assets ~~did~~and ~~not~~nonfinancial ~~have a~~liabilities, ~~significant~~except ~~impact~~those onthat ~~the~~are ~~previously~~recognized ~~reported~~or ~~financial~~disclosed ~~condition,~~in ~~results~~financial ofstatements ~~operations~~at orfair ~~cash~~value ~~flows~~on ofa ~~the~~recurring basis ~~Company.~~(that ~~In addition~~is, asat aleast ~~result~~annually). ofAs the ~~sale~~deferral ofperiod ~~specified~~under ~~assets of~~ the ~~fishing~~previously ~~line~~adopted ~~business~~FSP onSFAS ~~February~~157-2 9,has ~~2004~~expired, the ~~results~~Company ofhas ~~these operations~~fully ~~have~~adopted ~~been~~SFAS ~~included~~157 inas ~~discontinued~~of ~~operations~~January ~~and~~1, ~~results~~2009, ~~from~~noting ~~prior~~no ~~periods~~significant ~~have~~impact ~~been~~on ~~reclassified~~its ~~accordingly~~operations ~~(See~~or ~~Note~~financial 3)position.

~~Note~~ In 2February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 provides the Company with an option to elect fair value as the initial and subsequent measurement attribute for most financial assets and liabilities and certain other items. The fair value option election is applied on an instrument-by-instrument ~~Inventories~~basis (with some exceptions), is irrevocable, and is applied to an entire instrument. The election may be made as of the date of initial adoption for existing eligible items. Subsequent to initial adoption, the Company may elect the fair value option at initial recognition of eligible items, on entering into an eligible firm commitment, or when certain specified reconsideration events occur. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. Upon adoption of SFAS 159 on January 1, 2008, the Company did not elect to account for any assets and liabilities under the scope of SFAS 159 at fair value.

~~Inventories~~ In ~~consisted~~October 2008, the FASB issued FSP SFAS 157-3 (“FSP SFAS 157-3”), Determining the Fair Value of a Financial Asset When the ~~following~~Market ~~at:~~ for that Asset is Not Active, which clarifies the application of SFAS 157 in a market that is not active. The effective date for FSP SFAS 157-3 was October 10, 2008. The adoption of FSP SFAS 157-3 by the Company was insignificant to the Company’s operations and financial position.

	(Unaudited)
	June 30, 2004		December 31, 2003
Raw Materials	$	16.6	$	13.9
Semi-Finished Products		18.1		18.9
Finished Products		73.9		52.9
Total	$	108.6	$	85.7

~~Inventories~~REMINGTON ~~are~~ARMS ~~stated at~~COMPANY, ~~the lower of cost or market~~INC. NOTES ~~The~~TO ~~cost~~CONSOLIDATED ofFINANCIAL ~~inventories~~STATEMENTS (dollars ~~is determined by the first-~~in, ~~first-out (“FIFO”) method. Inventory costs associated with Semi-Finished Products and Finished Products include material~~millions, ~~labor,~~except ~~and~~per ~~overhead;~~share ~~while costs~~amounts) ~~associated~~– ~~with Raw Materials include only material. The Company provides inventory allowances based on excess and obsolete inventories.~~ Unaudited

Note 34 -– ~~Discontinued Operations~~ Inventories

On Inventories February 6, 2004, Remington and its wholly-owned subsidiary RA Brands entered into an Asset Purchase Agreement (the “Stren Asset Purchase Agreement”) with Pure Fishing, Inc. and its wholly-owned subsidiaries Pure Fishing I, LLC and Pure Fishing II, LLC (collectively, the “Purchasers”), pursuant to which Remington and RA Brands sold to the Purchasers certain specified assets relating to Remington’s fishing line business, effective as of February 9, 2004. The assets sold consisted of ~~specified~~the ~~machinery~~following at:


	(Unaudited)

	March 31, 2009			December 31, 2008			March 31, 2008

Raw Materials		$	26.8		$	24.3		$	27.6
Semi-Finished Products			27.8			28.1			34.7
Finished Products			43.7			48.5			84.7

Subtotal			98.3			100.9			147.0
LIFO Adjustment			1.2			1.1			0.7

Total		$	99.5		$	102.0		$	147.7

~~Table~~ The Company’s inventories are stated at the lower of ~~Contents~~cost or market. The majority of the Company’s inventories are determined by the First-In, First-Out (“FIFO”) method. Inventory costs associated with Semi-Finished Products and Finished Products include material, labor, and overhead while costs associated with Raw Materials include primarily material. The Company provides inventory allowances based on excess and obsolete inventories.

~~NOTES~~ As TOpart ~~CONSOLIDATED~~of ~~FINANCIAL~~the ~~STATEMENTS~~Marlin Acquisition, the Company now accounts for a portion of its inventory under a Last In First Out (“LIFO”) method. As of March 31, 2009, approximately 11.7% of the Company’s total inventory was accounted for under the LIFO method. The Marlin Acquisition resulted in a new basis for the value of the Company’s inventory. Accordingly, inventory was adjusted to its estimated fair value as of February 1, 2008, which was estimated to be approximately $25.0. As a result of the adjustment to fair value, the LIFO and FIFO values are the same at the Marlin Acquisition date for the inventory that is accounted for under the LIFO method. Had the FIFO method been used, inventories would have been lower by $1.2 at March 31, 2009.

~~(Dollars~~ For inthe ~~Millions~~quarter ended March 31, ~~Except~~2008, ~~Per~~the ~~Share~~Company ~~Amounts)~~recorded -a ~~Unaudited~~charge of $3.1 to cost of goods sold against certain of its surveillance technology products inventory in the accompanying statement of operations as a result of the Company discontinuing its exclusive distribution rights agreement with the technology products manufacturer.

~~and~~Note ~~equipment,~~5 inventory, purchase orders and other contracts, trademarks, tradenames and other intellectual property, records, claims, and goodwill, in each case relating to Remington’s fishing line business, which had been part of the All –Other ~~reporting~~Accrued ~~segment.~~ Liabilities

~~The~~ Other ~~purchase~~Accrued ~~price~~Liabilities ~~paid~~consisted ~~to Remington and RA Brands for the assets sold was $44.0 million in cash, $1.0 million~~ of ~~which was placed into escrow as security for certain post-closing obligations to procure certain materials for~~ the ~~Purchasers.~~following Onat: May 12, 2004, the amount placed into escrow of $1.0 million was paid to Remington by the Purchasers. The Company applied the $43.0 million in cash proceeds to pay down the then outstanding balance under Remington’s senior secured revolving credit facility (the “Credit Facility”) on February 9, 2004, and the $1.0 million in cash proceeds released from escrow were used to pay down Remington’s then outstanding Credit Facility balance on May 12, 2004. The assets sold had a net book value of approximately $17.9 million and Remington retained net working capital of approximately $1.7 million. The gain that was recorded in the first half of 2004 on the sale of discontinued operations was approximately $13.5 million, net of income taxes. The gain of approximately $13.5 million reflects the release of the $1.0 million escrow amount and adjustments to the estimates of costs associated with the sale based on remaining obligations with respect to the sale as of June 30, 2004.

Pursuant to the Stren Asset Purchase Agreement, Remington agreed not to compete with the Purchasers in the fishing line business for a period of five years, and also agreed to provide the Purchasers with certain transitional services and other services and rights relating to the sale of Remington’s fishing line business, substantially all of which are completed.


	(Unaudited)

	March 31, 2009			December 31, 2008			March 31, 2008

Retiree Benefits		$	1.3		$	1.3		$	1.2
Marketing and Rebate Accruals			7.6			10.5			4.4
Healthcare Costs			4.0			4.1			5.0
Workers’ Compensation			1.8			1.8			2.6
Incentive Compensation			2.3			7.5			1.3
Accrued Excise Taxes			3.5			5.3			2.0
Accrued Employee Costs			4.8			2.5			4.4
Accrued Interest			7.0			1.8			7.1
Escrow			4.9			4.9			5.2
Other			9.9			6.9			9.3

Total		$	47.1		$	46.6		$	42.5

~~The following represents a summary of key components of quarter-to-date and year-to-date income from discontinued operations:~~ 9

	For the quarter ended,				For the six months ended,
Discontinued Operations:	June 30,2004		June 30,2003		June 30,2004		June 30,2003
Net Sales	$	0.0	$	4.6	$	3.3	$	9.4
Pre-tax operating results		0.3		1.3		0.2		2.7
Interest expense allocation		0.0		0.5		0.1		1.0
Income from operations, after tax		0.3		0.5		0.1		1.1

REMINGTON ARMS COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share amounts) – Unaudited

~~Included~~Note ~~in discontinued~~6 ~~operations~~– isIncome an allocation of interest expense of $0.1 million and $1.0 million for the year-to-date periods ended June 30, 2004 and 2003, respectively. The interest expense allocation is based on the Company having made a payment of $43.0 million against its outstanding borrowings under the Credit Facility with the proceeds received at the closing of the sale of the fishing line business on February 9, 2004. The interest expense allocation was computed by taking the $43.0 million Credit Facility balance paid down at the time of the closing of the sale, multiplied by the weighted average interest rate on the Credit Facility for the year-to-date periods ended February 9, 2004 and June 30, 2003. The fishing line business has historically been allocated interest expense (approximately $0.2 million annually) as a result of actual working capital balances for the fishline business. Taxes

6 Our effective tax rate on continuing operations for the three months ended March 31, 2009 and 2008 was 36.8% and 36.4%, respectively.

~~Table~~ Over the next 12 months, the Company has determined it reasonably possible that the level of ~~Contents~~unrecognized tax benefits could decrease significantly, up to $2.5, as the result of the filing of a tax method change.

~~NOTES~~ The TOCompany ~~CONSOLIDATED~~files ~~FINANCIAL~~its ~~STATEMENTS~~income taxes as part of a consolidated tax return with FGI, the 100% owner of our sole stockholder, Holding. Current and deferred tax expense is allocated to the members based on an adjusted separate return methodology. Intercompany receivables and payables established as tax attributes are utilized by the consolidated group. The receivable recorded by the Company at March 31, 2009 and 2008 was $2.4 and zero, respectively.

~~(Dollars~~Note ~~in Millions, Except Per Share Amounts)~~ 7–Long-Term ~~Unaudited~~ Debt

~~Note~~ Long-term 4debt -consisted ~~Other~~of ~~Accrued~~the ~~Liabilities~~following at:

Other Accrued Liabilities consisted of the following at:


	(Unaudited)

	March 31, 2009			December 31, 2008			March 31, 2008

Revolving Credit Facility		$	51.8		$	51.8		$	28.8
10.5% Senior Subordinated Notes due 2011			201.9			202.1			202.9
Term Loan			19.3			20.3			25.0
Capital Lease Obligations			0.7			0.9			0.6
Due to RACI Holding, Inc.			0.7			0.7			0.9

Subtotal			274.4			275.8			258.2
Less: Current Portion			6.7			6.7			6.3

Total		$	267.7		$	269.1		$	251.9

	(Unaudited)
	June 30, 2004		December 31, 2003
Marketing	$	3.7	$	6.1
Healthcare		6.9		6.9
Compensation		3.4		0.8
Current portion of Pension cost		6.2		5.8
Excise Tax Payable		2.6		1.4
Workers Compensation		2.8		2.9
Interest		1.8		1.8
Other		4.9		3.0
Total	$	32.3	$	28.7

10.5% Senior Subordinated Notes due 2011

~~Note~~ The 10.5% -Senior ~~Warranty~~Subordinated ~~Accrual~~Notes due 2011 (the “Notes”) are redeemable at the option of the Company, in whole or in part, any time with a redemption price of the principal amount of 100.0%. The Notes are unsecured senior obligations of the Company that are contractually pari passu with all existing and future senior indebtedness, if any, of the Company, but are effectively subordinate to secured indebtedness, including its indebtedness under the Amended and Restated Credit Agreement to the extent of the assets securing such indebtedness.

The ~~Company~~Indenture ~~provides~~and ~~consumer~~the ~~warranties~~Amended ~~against manufacturing~~and ~~defects~~Restated inCredit ~~all~~Agreement, ~~firearm~~as ~~products~~amended itby ~~sells~~the inFirst, ~~North~~Second ~~America.~~and ~~Estimated~~Third ~~future~~Amendments, ~~warranty~~the ~~costs~~Joinder ~~are~~Agreement, ~~accrued~~and at the ~~time~~Letter ~~of sale~~Amendment, ~~using~~contain ~~the~~various ~~percentage~~restrictions ofon ~~actual~~the ~~historical~~Company’s ~~repairs~~ability to ~~shipments~~incur ~~for~~debt, ~~the~~pay ~~same~~dividends ~~period,~~and ~~which~~enter isinto ~~included~~certain in other ~~accrued~~ ~~liabilities~~transactions. ~~Product~~Pursuant ~~modifications~~to orthe ~~corrections~~Third Amendment ~~are~~entered ~~voluntary~~into ~~steps taken~~ by the Company toon ~~assure~~April ~~proper~~14, ~~usage~~2009, byas ~~consumers~~discussed orbelow, ~~performance~~the ofamount agenerally ~~product.~~available ~~The~~for ~~cost~~cash ~~associated~~repurchases ~~with~~of ~~product~~the ~~modifications~~Notes ~~and~~was orincreased ~~corrections~~from ~~are~~an ~~recognized~~aggregate ~~in accordance~~amount ~~with~~of ~~Statement~~$20.0 ofto ~~Financial~~an ~~Accounting~~aggregate ~~Standard~~amount Noof $50.0; 5,although ~~Accounting~~under ~~for~~certain ~~Contingencies,~~circumstances ~~and~~the ~~charged~~Company tomay ~~operations.~~make ~~Activity~~cash repurchases of Notes in ~~the~~an ~~warranty~~aggregate ~~accrual~~amount ~~consisted~~greater than $50.0 so long as the portion of the ~~following~~purchase ~~at:~~price that exceeds $50.0 is paid in cash provided by FGI.

	(Unaudited)
	June 30, 2004			December 31, 2003
Beginning warranty accrual	$	0.8		$	0.9
Current period accruals		1.6			2.7
Current period charges		(1.6	)		(2.8	)
Ending warranty accrual	$	0.8		$	0.8

The First Supplemental Indenture, dated May 17, 2007, revised the term “Permitted Holder” so that the FGI Acquisition would not constitute a “Change of Control” under the Indenture and holders of the Notes would have no put right as a result of the FGI Acquisition, and the former “Sponsors” under the Indenture were replaced with Cerberus.

~~Note 6 - Long-Term Debt~~ 10

~~Long-Term~~REMINGTON ~~Debt~~ARMS ~~consisted~~COMPANY, ofINC. NOTES ~~the~~TO ~~following~~CONSOLIDATED ~~at:~~FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

	(Unaudited)
	June 30, 2004		December 31, 2003
Revolving Credit Facility	$	37.5	$	28.3
10.5% Senior Subordinated Notes due 2011		200.0		200.0
Capital Lease Obligations		1.2		1.3
Due to RACI Holding, Inc.		0.9		0.9
Subtotal		239.6		230.5
Less: Current Portion		0.6		0.5
Total	$	239.0	$	230.0

Pursuant to the Second Supplemental Indenture, dated May 12, 2008, RA Brands, Marlin and H&R became guarantors and unconditionally guarantee all of Remington’s obligations under the Notes on the terms and subject to the conditions of the Indenture.

~~The~~Revolving ~~Company’s~~ Credit Facility, as amended, provides up to $125.0 million of borrowings under an asset-based senior secured revolving credit facility through January 23, 2008. Amounts available under the Credit Facility are subject to a borrowing base limitation based on certain percentages of eligible accounts receivable and eligible inventory and an amortizing balance related to eligible machinery and equipment and other limitations. The Credit Facility also includes a letter of credit sub-facility of up to $15.0 million.

7On April 14, 2009, the Company entered into the Third Amendment to the Amended and Restated Credit Agreement. Key terms of the Company’s Amended and Restated Credit Agreement, as amended by the First, Second and Third Amendments, the Joinder Agreement and the Letter Amendment, include the following:

~~Table~~1) Provides up to $155.0 of ~~Contents~~borrowings under an asset-based senior secured revolving credit facility through June 30, 2010 (extended to January 4, 2011 per the Third Amendment); 2) Specifies that amounts available are subject to a borrowing base limitation based on certain percentages of eligible accounts receivable and eligible inventory in addition to a minimum availability requirement of $27.5; 3) Includes a letter of credit sub-facility of up to $15.0, under which the Company has aggregate outstanding letters of credit of $7.0 as of March 31, 2009; 4) Defines Applicable Margin so that the interest margin applicable to loans under the Amended and Restated Credit Agreement is based on Average Excess Availability, which is described as the amount obtained by adding the aggregate Excess Availability at the end of each day during the period in question and dividing such sum by the number of days in such period; 5) Specifies that the Availability Test Period coincides with the Commitment Termination Date; 6) Names RA Brands, Marlin and H&R as borrowers; 7) Specifies the fee for any available credit under the Revolving Credit Facility at 0.50% of the average amount of available credit (per the Third Amendment); 8) Includes a covenant restricting certain capital expenditures in the aggregate not to exceed $15.0 during any fiscal year plus amounts carried forward from previous years (per the Third Amendment); 9) Limits “Permitted Acquisitions” to $15.0 (per the Third Amendment); and 10) Provides consent to a potential acquisition (per the Third Amendment).

~~NOTES~~ The TOinterest ~~CONSOLIDATED~~rate ~~FINANCIAL~~margin ~~STATEMENTS~~for the Alternate Base Rate and the Euro-Dollar loans was (0.50%) and 1.00%, respectively, at both March 31, 2009 and 2008. The weighted average interest rate under the Company’s outstanding credit facility was 2.75% and 5.23% for the three month periods ended March 31, 2009 and 2008, respectively.

~~(Dollars~~ As of March 31, 2009 approximately $41.1 in ~~Millions~~additional borrowings including the minimum availability requirement of $27.5 was available as determined pursuant to the Amended and Restated Credit Agreement. As a part of the Second Amendment, ~~Except~~the ~~Per~~Company ~~Share~~could ~~Amounts~~elect for the Term Loan an interest rate of LIBOR plus 200 basis points or prime plus 50 basis points. The Company’s Term Loan was at LIBOR plus 200 basis points (or 2.50%) -at ~~Unaudited~~March 31, 2009. The Company’s Term Loan was at LIBOR plus 200 basis points (or 4.82%) at March 31, 2008.

As The aterms ~~result~~ of the ~~Company’s~~Third ~~financial~~Amendment, ~~performance~~as ~~the~~discussed ~~Credit~~above, ~~Facility was~~ amended onthe ~~two separate~~interest ~~occasions~~rate ~~during~~applicable ~~2003.~~to ~~These amendments limit~~ the ~~Company’s~~Term ~~borrowing~~Loan ~~capacity~~to by2.50% ~~creating~~plus ~~a minimum availability restriction through~~ the ~~earlier~~Alternate ofBase ~~(i) March 30~~Rate, ~~2006~~for ~~and~~any ~~(ii)~~advance ~~subject~~under ~~to meeting specified financial targets, such date as~~ the ~~Company~~Term ~~may~~Loan ~~determine~~that ~~(such~~is ~~period,~~a ~~the~~ “~~Availability~~Base ~~Test~~Rate ~~Period~~Loan”). Inand ~~addition,~~4.00% ~~during~~plus the ~~Availability~~relevant ~~Test~~LIBOR ~~Period,~~for ~~the~~any ~~Company~~advance ~~must~~under ~~maintain~~the ~~specified~~Term ~~minimum~~Loan ~~rolling~~that ~~four~~is ~~quarter~~a ~~levels~~“Euro-Dollar ~~of Consolidated EBITDA (as defined in the Credit Facility)~~Loan”.

On February 9, 2004, in connection with the sale of the Company’s fishing line business, the Company entered into a third amendment to the Credit Facility. The Company paid an amendment fee of $0.1 million in connection with the third amendment, which was netted with the gain on the disposal of discontinued operations. Under the terms of the third amendment, the lenders under the Credit Facility consented to Remington’s and RA Brands’ sale of specified assets pursuant to the Stren Asset Purchase Agreement, the release of liens against such assets, and the retention of the proceeds of such sale, subject to a requirement to use such proceeds to invest in productive assets or permanently pay down amounts outstanding under the Credit Facility within one year of such sale. 11

~~Pursuant~~REMINGTON toARMS ~~these amendments~~COMPANY, ~~key~~INC. NOTES ~~terms~~TO ofCONSOLIDATED ~~the~~FINANCIAL ~~Credit~~STATEMENTS ~~Facility,~~ (dollars asin ~~amended~~millions, ~~now~~except ~~include~~per ~~the~~share ~~following:~~amounts) – Unaudited

~~(1)~~ The ~~minimum~~weighted ~~amount~~average ofinterest ~~availability~~rate ~~required to be maintained during the Availability Test Period is $40.0 million (except during any single period~~ of ~~up to 60 consecutive days from June through September of each year during~~ the ~~Availability~~Company’s ~~Test~~Term ~~Period,~~Loan ~~when~~for ~~such minimum availability requirement is $30.0 million). Upon a permanent pay down of not less than $5.0 million under~~ the ~~Credit~~three ~~Facility~~month byperiods ~~February~~ended 9,March ~~2005~~31, ~~these~~2009 ~~levels~~and ~~will~~2008 bewas ~~returned back to $35~~2.057% ~~million~~ and ~~$25~~6.~~0 million~~53%, respectively. For any period during the Availability Test Period when such minimum availability requirement is not met, the Company must maintain (i) a maximum leverage ratio of 6.0 to 1.0 and (ii) a minimum fixed charge coverage ratio of 1.1 to 1.0. So long as the minimum availability requirement is met during the Availability Test Period, there is no requirement for the Company to meet the maximum leverage ratio or the minimum fixed charge coverage ratio.

~~(2)~~ Substantially ~~The~~all ~~Company~~of isour ~~required~~assets toare ~~maintain~~pledged ~~specified~~as ~~minimum~~security ~~rolling~~for ~~four~~our ~~quarter~~obligations ~~levels~~under ~~of Consolidated EBITDA during~~ the ~~Availability~~Amended ~~Test~~and ~~Period~~Restated ~~(as defined in the~~ Credit ~~Facility)~~Agreement.

~~(3)~~Note ~~All~~8 of– ~~Remington’s~~Goodwill ~~existing~~ and ~~future~~Other ~~domestic~~Intangible ~~subsidiaries~~Assets are either co-borrowers under, or guarantors of, the Credit Facility. The Credit Facility is secured by substantially all of the Company’s real and personal property, including without limitation the capital stock of the Company’s subsidiaries.

~~(4)~~ The ~~Amounts~~carrying ~~outstanding~~amount ~~under~~of ~~the~~goodwill ~~Credit~~and ~~Facility~~identifiable ~~bear~~intangible ~~interest~~assets atattributable ato ~~rate~~each ~~equal~~reporting ~~to,~~unit atis outlined in the ~~Company’s~~following ~~option,~~tables. ~~(1)~~No animpairment ~~alternate~~provisions ~~base~~were ~~rate~~necessary ~~plus~~during anthe ~~applicable~~three ~~margin~~month periods ending March 31, 2009 or ~~(2)~~March a31, ~~reserve~~2008. ~~adjusted~~December ~~LIBOR~~31, ~~rate~~2008 ~~plus~~reflects animpairment ~~applicable~~charges ~~margin~~of $44.3 ~~These~~that ~~margins~~were ~~are~~recorded ~~subject~~ to ~~periodic~~goodwill ~~adjustment~~and ~~based~~identifiable intangible onassets. ~~certain~~The ~~levels~~carrying amount of ~~financial~~goodwill ~~performance~~and atidentifiable ~~various~~intangible ~~times~~assets ~~during~~attributable ~~the~~to ~~term~~each ofreporting segment is outlined in the ~~Credit~~following ~~Facility.~~tables:

(5) The Credit Facility contains limitations on capital expenditures exceeding $12.5 million during any fiscal year, adjusted upward for any previously unspent amounts in prior years that were less than the annual $12.5 million limitation.


	(Unaudited)

	March 31, 2009				December 31, 2008				March 31, 2008

Goodwill
Firearms		$	—			$	—			$	35.7
Ammunition			24.0				24.0				14.5
All Other			—				—				16.8

Total		$	24.0			$	24.0			$	67.0


	(Unaudited)

	March 31, 2009				December 31, 2008				March 31, 2008

Identifiable Intangible Assets
Firearms		$	54.1			$	54.1			$	57.7
Ammunition			10.5				10.5				10.5
All Other			16.5				16.5				15.7

Total			81.1				81.1				83.9
Less: Accumulated Amortization			(4.7	)			(4.1	)			(2.0	)

Total		$	76.4			$	77.0			$	81.9

~~(6)~~ The ~~Credit~~following ~~Facility~~table ~~contains~~is ~~limitations~~a onsummary ~~indebtedness,~~of ~~liens,~~the ~~investments,~~intangible ~~mergers~~assets ~~and~~by ~~other~~major ~~acquisitions,~~intangible asset ~~dispositions~~, ~~transactions~~as ~~with~~well ~~affiliates,~~as ~~and~~their ~~dividends~~accumulated amortization and ~~other~~amortization ~~distributions.~~period:


	(Unaudited)

	March 31, 2009 Gross Balance				Accumulated Amortization				March 31, 2009 Net Balance				Amortization Period

Identifiable Intangible Assets
Tradenames and Trademarks		$	45.3				N/A			$	45.3		Indefinite
Customer Relationships			27.7				(2.5	)			25.2		19.6 Years*
License Agreements			8.4				(2.2	)			6.2		7 Years
Internally Developed Software			0.1				(0.1	)			—		2 Years
Leasehold Interest			(0.4	)			0.1				(0.3	)	3.5 Years

Total		$	81.1			$	(4.7	)		$	76.4

~~Table~~* Weighted average amortization period for Customer Relationships is based on $25.5 of ~~Contents~~Remington Customer Relationships with an amortization period of 20 years and $2.2 of Marlin Customer Relationships with an amortization period of 15 years.

~~NOTES~~Note TO9 ~~CONSOLIDATED~~– ~~FINANCIAL~~Retiree ~~STATEMENTS~~ Benefits

~~(Dollars~~ Please inrefer ~~Millions,~~to ~~Except~~the ~~Per~~Company’s ~~Share~~Annual ~~Amounts)~~Report on Form 10-K ~~Unaudited~~for the year ended December 31, 2008 for detailed descriptions and disclosures about the various benefit plans offered by Remington.

~~(7) The Credit Facility contains customary events of default.~~12

~~(8)~~REMINGTON ~~The~~ARMS ~~Company is required to pay certain fees in connection with the Credit Facility~~COMPANY, ~~including~~INC. ~~(1)~~ NOTES ~~letter~~TO ofCONSOLIDATED ~~credit~~FINANCIAL ~~fees,~~ STATEMENTS (2)dollars ~~agency fees and (3) an unused commitment fee of 0.375% which is payable if the average Credit Facility balance is 50% or more of the aggregate revolving commitments~~ in ~~effect on the first day of such month~~millions, ~~subject~~except toper ~~adjustment~~share ~~upward~~amounts) to– ~~0.500% if the average outstanding Credit Facility balance for any month is less than 50% of the aggregate revolving commitments in effect on the first day of such month.~~Unaudited

~~(9)~~ The ~~Credit~~following ~~Facility~~table ~~contains~~summarizes ~~other~~the ~~customary~~components ~~affirmative~~of ~~and~~net ~~negative~~periodic ~~covenants:~~pension cost for the Company’s defined benefit pension plans (including ~~but~~two ~~not~~months ~~limited~~for tothe ~~those~~acquired ~~listed~~Marlin ~~above.~~Pension Plan for 2008) for the three month periods ended:

The interest rate margin for the ABR and the Euro-Dollar loans at June 30, 2004 is 1.5% and 3%, respectively. The weighted average interest rate under the Company’s Credit Facility was 4.80% and 4.14% as of June 30, 2004 and 2003, respectively.


	(Unaudited)

	Three Months Ended March 31, 2009				Three Months Ended March 31, 2008

Service Cost		$	—			$	—
Interest Cost			3.2				2.9
Expected Return on Assets			(3.4	)			(3.4	)
Amortization of Prior Service Cost			—				—
Recognized Net Actuarial Loss			1.5				0.4

Net Periodic Pension Cost		$	1.3			$	(0.1	)

As The offollowing ~~June~~table ~~30,~~summarizes ~~2004~~ the ~~Company~~components ~~was~~of innet ~~compliance~~periodic ~~with~~postretirement ~~the~~cost ~~financial~~for ~~covenants~~the ~~and~~Company’s ~~expects~~postretirement toplan ~~continue~~(including totwo bemonths infor ~~compliance with~~ the ~~financial~~acquired ~~covenants~~Marlin ~~under~~Postretirement ~~the~~Plan ~~Credit~~for ~~Facility,~~2008) asfor ~~amended. However, there can be no assurance that~~ the ~~Company~~three ~~will~~month ~~continue~~periods ~~to be in compliance.~~ ended:

The initial issuance and sale of the Company’s $200.0 million aggregate principal amount 10.5% Senior Notes due 2011 (the “Notes”) was completed in a private offering on January 24, 2003. A portion of the proceeds from the issuance of the Notes was used for the redemption of all of the Company’s 9 ½% Senior Subordinated Notes due 2003 (the “Refinanced Notes”), at a redemption price equal to 100% of the aggregate principal amount of Refinanced Notes then outstanding of $86.9 million, plus accrued and unpaid interest. The Notes are redeemable at the option of the Company, in whole or in part, any time on or after February 1, 2007. The redemption price ranges from 105.3% of the principal amount in 2007 to 100% in the year 2009 and thereafter. The Notes may also be redeemed with proceeds of specified types of equity offerings prior to 2007, at a redemption price of 110.5% of the principal amount. In the event of a change in control, the Notes may be tendered at the option of the holders for the principal amount plus applicable interest and premium at that date. The Notes are unsecured senior obligations of the Company, ranking equal in right of payment with all existing and future senior indebtedness, if any, of the Company, including its indebtedness under the Credit Facility.


	(Unaudited)

	Three Months Ended March 31, 2009				Three Months Ended March 31, 2008

Service Cost		$	0.1			$	0.1
Interest Cost			0.3				0.3
Net Amortization and Deferral			(0.1	)			—

Net Periodic Pension Cost		$	0.3			$	0.4

~~The~~Anticipated ~~indenture~~Contributions for the Notes and the Credit Facility contain various restrictions on the Company’s ability to incur debt, pay dividends and enter into certain other transactions. With respect to asset sale transactions (such as the sale of the fishing line business), the indenture for the Notes requires the Company to apply the net cash proceeds thereof in properties and assets that replace the properties and assets that were the subject of the asset sale or in properties and assets that will be used in the businesses of the Company or its Subsidiaries within 365 days after the date of such asset sale. Any uninvested amount must be used to permanently repay the senior debt of the Company in accordance with the terms of the indenture for the Notes and the Credit Facility. In addition, the Credit Facility permits repurchases of the Notes on the open market, subject to limitations that may be contained in the Credit Facility and the Indenture.

~~Note~~ As previously disclosed in its audited consolidated financial statements for the year ended December 31, 2008, the Company expects to make aggregate cash contributions of approximately $7.5 -to ~~Related~~its ~~Party~~pension ~~Transactions~~plans ~~and~~during ~~Other~~the ~~Unusual~~12 ~~Charges~~months ending December 31, 2009. As of May 7, 2009, total contributions of $3.5 have been made. The Company presently anticipates contributing an additional amount of approximately $4.0 to fund its required contributions for these plans during the remainder of 2009.

OnNote ~~January~~10 ~~24,~~– ~~2003, the Company declared and paid a $100.0 million dividend to all shareholders of record in connection with the funding of the repurchase by Holding of Holding Common~~ Stock ~~completed on February 12~~Purchase, ~~2003.~~Option InPlans ~~connection with the re-capitalization transactions, 64,144 outstanding options to purchase common stock of Holding were accelerated~~ and ~~subsequently~~Restricted ~~cancelled,~~Stock which resulted in $4.5 million of other compensation expense based on the difference in the price paid for the acceleration and cancellation of the options and the exercise price of the then outstanding options. Holding contributed capital of $4.5 million in cash to pay for the impact of the cancellation. As a result of Awards

9 Stock Purchase and Option Plan — On May 14, 2008, the board of directors of FGI (the “FGI Board”) adopted the American Heritage Arms, Inc. 2008 Stock Incentive Plan (the “Plan”). The Plan is designed to provide a means by which certain current employees, officers, non-employee directors and other individual service providers, including those of Remington and other subsidiaries of FGI, may be given an opportunity to benefit from increases in the value of FGI common stock (the “Common Stock”), through the grant of awards. FGI, by means of the Plan, seeks to retain the services of such eligible persons and to provide incentives for such persons to exert maximum efforts for the success of FGI and its subsidiaries.

~~Table~~ The awards under the Plan may be in the form of ~~Contents~~incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards and stock unit awards. The maximum aggregate number of shares of Common Stock that may be issued under all awards granted to participants under the Plan is 2,424,703 shares, subject to certain adjustments as set forth in the Plan.

~~NOTES~~ On TOMay ~~CONSOLIDATED~~14, ~~FINANCIAL~~2008, ~~STATEMENTS~~the FGI Board adopted the form of Nonqualified Stock Option Award Agreement (the “Form Award Agreement”). The Form Award Agreement outlines terms relating to stock option awards, including (i) the exercise price per share of each option granted, which shall be the fair market value of a share of the Common

~~(Dollars in Millions, Except Per Share Amounts) - Unaudited~~ 13

~~refinancing~~REMINGTON ~~the~~ARMS ~~Company’s previous revolving credit facility with the Credit Facility on January 24~~COMPANY, ~~2003, $1~~INC.5 ~~million~~ NOTES ofTO ~~remaining~~CONSOLIDATED ~~unamortized~~FINANCIAL ~~financing~~STATEMENTS (dollars ~~fees~~in ~~were expensed. The Company also paid additional interest of $0.7 million representing a call premium for the early redemption of the Refinanced Notes. All of the above~~millions, except ~~for~~per ~~$100.0~~share ~~million dividend~~amounts) to– ~~Holding, were recorded in Other Unusual Charges in the accompanying statement of operations.~~ Unaudited

OnStock ~~April~~on ~~28, 2004,~~ the ~~Board~~date of ~~Directors~~grant of(as ~~the~~defined ~~Company~~in ~~declared~~the aPlan), ~~dividend~~(ii) ofthe ~~approximately~~vesting ~~$2.1~~schedule ~~million~~of tothe beoptions ~~paid~~granted, toand ~~RACI~~(iii) ~~Holding,~~acceleration ~~Inc.~~provisions inupon the ~~second quarter~~occurrence of ~~2004.~~a ~~This~~change ~~dividend~~in ~~was~~control, ~~paid~~termination byof ~~the~~employment ~~Company~~without tocause ~~Holding~~or ontermination ~~June~~of ~~30,~~employment ~~2004~~for good reason.

~~Note~~ As 8previously –disclosed ~~Intangible~~in ~~Assets~~its audited consolidated financial statements for the year ended December 31, 2008, as of December 31, 2008, there were nonqualified stock option awards to purchase 1,771,258 shares of Common Stock outstanding and 268,268 shares of Common Stock outstanding relating to various members of Remington’s management and board of directors. The vesting of the options and shares of Common Stock occur at various times through July 2012. In the first quarter of 2009, an additional 170,777 nonqualified stock option awards were granted and another 448,082 nonqualified stock option awards were forfeited due to the departure of certain members of Remington’s management, leaving nonqualified stock option awards to purchase 1,493,593 shares of Common Stock outstanding and 268,268 shares of Common Stock outstanding at March 31, 2009. The Company utilizes the Black-Scholes option pricing model to value the options granted under its option plan. For the quarter ended March 31, 2009, the Company recognized less than $0.1 in expense related to these options and Common Stock. Since the inception of the Plan, the Company has recognized approximately $1.3 in stock compensation expense. The Company expects to recognize additional stock compensation expense of approximately $1.7 in relation to these grants through 2012.

~~The carrying~~Note ~~amount~~11 of- ~~goodwill~~Commitments and ~~trademarks,~~Contingencies ~~which are not subject to amortization, attributable to each reporting segment is outlined in the following tables:~~

	(Unaudited)
Goodwill	June 30, 2004		December 31, 2003
Firearms	$	12.8	$	12.8
Ammunition		5.2		5.2
All Other		2.9		2.9
Total	$	20.9	$	20.9

The Company has various purchase commitments for services incidental to the ordinary conduct of business, including, among other things, a services contract with its third-party warehouse provider. Such commitments are not at prices in excess of current market prices. Included in the purchase commitment amount are the Company’s purchase contracts with certain raw materials suppliers, for periods ranging from one to seven years, some of which contain firm commitments to purchase minimum specified quantities. Otherwise, such contracts had no significant impact on the Company’s financial condition, results of operations, or cash flows during the reporting periods presented herein.

Trademarks	June 30, 2004		December 31, 2003
Firearms	$	20.4	$	20.4
Ammunition		19.4		19.4
All Other		2.0		2.0
Total	$	41.8	$	41.8

The Company is subject to various lawsuits and claims with respect to product liabilities, governmental regulations and other matters arising in the normal course of business. Pursuant to an asset purchase agreement (the “Purchase Agreement”), on December 1, 1993, the Company acquired certain assets and assumed certain liabilities (the “Asset Purchase”) of the sporting goods business formerly operated by E. I. du Pont de Nemours and Company (“DuPont”) and one of DuPont’s subsidiaries (together with DuPont, the “1993 Sellers”). Under the Purchase Agreement, the Company generally bears financial responsibility for all product liability cases and claims relating to occurrences after the closing of the Asset Purchase, except for certain costs relating to certain shotguns, for all cases and claims relating to discontinued products and for limited other costs. Because the Company’s assumption of financial responsibility for certain product liability cases and claims involving pre-Asset Purchase occurrences was limited to a fixed amount that has now been fully paid, and with the 1993 Sellers retaining liability in excess of that amount and indemnifying the Company in respect of such liabilities, the Company believes that product liability cases and claims involving occurrences arising prior to the Asset Purchase are not likely to have a material adverse effect upon the financial condition, results of operations or cash flows of the Company. Moreover, although it is difficult to forecast the outcome of litigation, the Company does not believe, in light of relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, the Company’s accruals for the uninsured costs of such cases and claims and the 1993 Sellers’ agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by the Company), as well as the passage of time, that the outcome of all pending post-Asset Purchase product liability cases and claims will be likely to have a material adverse effect upon the financial condition, results of operations, or cash flows of the Company. Nonetheless, in part because the nature and extent of manufacturer liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that the Company’s resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the aggregate, or that such a material adverse effect upon the Company’s financial condition, results of operations or cash flows will not result therefrom. Because of the nature of its products, the Company anticipates that it will continue to be involved in product liability litigation in the future.

The Company continues to monitor one of the business units in the All Other segment which was determined to have a carrying value of goodwill and trademarks of $3.4 million at June 30, 2004. It is reasonably possible the Company could be required to recognize an impairment charge if the current trend of profitability were to continue within this business unit. 14

~~Note~~REMINGTON 9ARMS –COMPANY, ~~Retiree~~INC. NOTES ~~Benefits~~TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

~~Please~~ The ~~refer~~Company’s accruals for losses relating to product liability cases and claims include accruals for all probable losses for which the ~~Company’s~~amount ~~Annual~~can ~~Report~~be reasonably estimated. Based on ~~Form~~the ~~10-K~~relevant ~~for~~circumstances (including the ~~year~~current ~~ended~~availability ~~December~~of ~~31,~~insurance ~~2003~~for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, the Company’s accruals for ~~detailed~~the ~~descriptions~~uninsured costs of such cases and ~~disclosures~~claims ~~about~~and the ~~various~~1993 ~~benefit~~Sellers’ ~~plans~~agreement ~~offered~~to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products made by ~~Remington~~the Company), the Company does not believe with respect to product liability cases and claims that any reasonably possible loss exceeding amounts already recognized through the Company’s accruals has been incurred.

The ~~following~~Marlin ~~table~~Acquisition ~~summarizes~~triggered the ~~components~~Connecticut ofTransfer ~~net~~Act ~~periodic~~(the ~~pension~~“Act”) ~~cost~~with ~~for~~respect to the ~~three~~facility located in North Haven, Connecticut. The Act is designed to identify properties contaminated with hazardous wastes and to ensure that such properties are cleaned up to the satisfaction of the Connecticut Department of Environmental ~~six~~ Protection ~~month~~(“DEP”). ~~periods~~Under ~~ended:~~the Act, Marlin is required to investigate areas of environmental concern at the North Haven facility and to clean up contamination exceeding state standards to the satisfaction of DEP. The investigation of the North Haven facility is ongoing. Remediation costs may be incurred, but such costs at this time are not expected to be material to operations or cash flows.

	(Unaudited)
	Three Months Ended						Six Months Ended
	June 30, 2004			June 30,2003			June 30, 2004			June 30,2003
Service Cost	$	1.3		$	1.0		$	2.5		$	2.1
Interest Cost		2.2			2.1			4.5			4.1
Expected Return on Assets		(2.0	)		(1.8	)		(4.0	)		(3.7	)
Amortization of Prior Service Cost		(0.1	)		(0.1	)		(0.1	)		(0.1	)
Recognized Net Actuarial Loss		1.6			0.7			3.1			1.4
Net Periodic Pension Cost	$	3.0		$	1.9		$	6.0		$	3.8

Marlin is also conducting remediation of oil-related contamination at a former Marlin facility in New Haven, Connecticut. Costs for the New Haven remediation are not expected to be material.

10Note 12 – Accounting for Derivatives and Hedging Activities

~~Table~~ The Company purchases copper and lead (and zinc in 2008) options contracts to hedge against price fluctuations of ~~Contents~~anticipated commodity purchases. The options contracts are intended to limit the unfavorable effect that cost increases will have on these metal purchases.

~~NOTES~~ In TOaccordance ~~CONSOLIDATED~~with ~~FINANCIAL~~the ~~STATEMENTS~~provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), as amended by SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities – an amendment of FASB Statement No. 133 (“SFAS 138”) and by SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities (“SFAS 149”), commodity contracts are designated as cash flow hedges, with the fair value of these financial instruments recorded in prepaid expenses and other current assets, changes in fair value recorded in accumulated other comprehensive income, and net gains/losses reclassified to cost of sales based upon inventory turnover, indicating consumption and sale of the underlying commodity in the Company’s products. In March 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”). The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161 requires disclosure of gains and losses on derivative instruments in a tabular format.

At March 31, 2009, the fair value of the Company’s outstanding derivative contracts relating to firm commitments and anticipated consumption (~~Dollars~~aggregate innotional ~~Millions~~amount of 27.2 million pounds of copper and lead) up to fifteen months from such date was $2.7 as determined with the assistance of the Company’s commodity counterparty. At March 31, ~~Except~~2008, ~~Per~~the ~~Share~~fair ~~Amounts~~value of the Company’s outstanding derivative contracts relating to firm commitments and anticipated consumption (aggregate notional amount of 42.7 million pounds of copper, lead and zinc) -up ~~Unaudited~~to eighteen months from such date was $9.6 as determined with the assistance of the Company’s commodity counterparties.

The ~~following~~volatility ~~table~~of ~~summarizes~~pricing the ~~components~~Company ofhas ~~net~~experienced ~~periodic~~to ~~postretirement~~date ~~cost~~has affected our results of operations for the three month periods ended March 31, 2009 and ~~six~~2008. ~~month~~The ~~periods~~Company believes that further significant changes in commodity pricing could have a future material impact on the consolidated financial position, results of operations, and cash flows of the ~~ended:~~ Company.

	(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,2004			June 30,2003			June 30,2004			June 30, 2003
Service Cost	$	0.1		$	0.2		$	0.3		$	0.3
Interest Cost		0.3			0.3			0.6			0.6
Net Amortization and Deferral		0.1			(0.1	)		0.2			(0.1	)
Claims Payments		(0.1	)		(0.1	)		(0.3	)		(0.2	)
Net Periodic Benefit Cost	$	0.4		$	0.3		$	0.8		$	0.6

~~Anticipated~~REMINGTON ~~Contributions~~ARMS COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

The Company previously disclosed in its consolidated financial statements for the year ended December 31, 2003 that it expected to contribute approximately $6.4 million to plan assets under its defined benefit pension plan during 2004. As of June 30, 2004, $2.7 million of contributions have been made. Remington presently anticipates contributing approximately $3.7 million to the plan assets during the remainder of 2004.

Fair Values of Derivative Instruments As of,

March 31, 2009

March 31, 2008

Derivatives designated as hedging instruments under Statement 133

Balance
Sheet
Location

Fair
Value

Balance
Sheet
Location

Fair
Value

Commodity Contracts

Prepaid and Other Current Assets

$2.7

Prepaid and Other Current Assets

$9.6

Note 10 – Stock Options

Derivatives in
Statement 133
Net
Investment
Hedging
Relationships

Amt of Gain (Loss)
(net of tax)
Recognized in OCI on
Derivative (Effective
Portion) and recorded
in Prepaid Expenses
and Other Current
Assets at Fair Value

Location of
Gain or (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)

Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI into Income
(Effective Portion)

Location of
Gain or (Loss)
Recognized in
Income on
Derivative
(Ineffective
Portion and
Amount
Excluded from
Effectiveness
Testing)

Amount of Gain (net
of tax) or (Loss)
Recognized in Income
on Derivative
(Ineffective Portion
and Amount Excluded
from Effectiveness
Testing)

March 31, 2009

March 31, 2008

March 31, 2009

March 31, 2008

March 31, 2009

March 31, 2008

Commodity Contracts

$0.7

$2.1

Cost of Sales

($1.2)

$2.0

N/A

InNote ~~accordance~~13 ~~with the provisions of Statement of Financial Accounting Standards No. 123, Accounting for Stock~~-~~Based~~ ~~Compensation~~Segment (“SFAS 123”), as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure (“SFAS 148”), the Company has elected to continue to account for stock-based compensation under the intrinsic value-based method of accounting described by Accounting Principles Board Opinion 25, Accounting for Stock Issued to Employees (“APB 25”). Under APB 25, generally no cost is recorded for stock options issued to employees unless the option exercise price is below fair value at the time options are granted. Since options have been granted at exercise prices equal to the estimated fair value of the underlying Common Stock, to date no compensation expense has been recognized with respect to the grant of any outstanding stock options. Had compensation expense for such option grants been recognized under SFAS No. 123 based on the fair value of such options at the grant dates thereof for the three and six month periods ended June 30, 2004 and 2003, the Company’s net income (loss) on a pro forma basis would have been as follows: Information

		For the Three Months Ended,
		June 30, 2004			June 30,2003
Net (loss)	As Reported	$	(3.5	)	$	(1.2	)
Add:	Stock-based employee compensation expense included in reported net income (loss), net of related tax effects		—			—
Deduct:	Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		—			—
Net (loss)	Pro forma	$	(3.5	)	$	(1.2	)

The Company identifies its reportable segments in accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS 131”). Based upon SFAS 131, the Company’s business is classified into two reportable segments: Firearms, which designs, manufactures and imports, and markets primarily sporting shotguns and rifles (which includes results of the Marlin Acquisition since February 1, 2008), and Ammunition, which designs, manufactures and markets sporting ammunition and ammunition reloading components. The remaining operating segments, which include accessories and other gun-related products, the manufacture and marketing of clay targets and powder metal products, licensed products, technology products and apparel are combined into our All Other reporting segment. Other reconciling items include corporate and other assets not allocated to the individual segments. The chief operating decision makers are a group of executive officers.

11 Although the Company reports its financial results in accordance with U.S. GAAP, the Company primarily evaluates the performance of its segments and allocates resources to them based on the non-GAAP financial measure “Adjusted EBITDA”, which is unaudited. Adjusted EBITDA differs from the term “EBITDA” as it is commonly used, and is substantially similar to the measure “Consolidated EBITDA” that is used in the Indenture. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, Adjusted EBITDA also adjusts net income (loss) by excluding items or expenses not typically excluded in the calculation of “EBITDA”, such as noncash items, gain or loss on asset sales or write-offs, extraordinary, unusual or nonrecurring items, including certain transaction activity associated with the acquisition of Holding by FGI in 2007 and the Marlin Acquisition.

~~Table~~ In managing the Company’s business, the Company utilizes Adjusted EBITDA to evaluate performance of ~~Contents~~the Company’s business segments and allocate resources to those business segments. The Company believes that

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ 16

REMINGTON ARMS COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (~~Dollars~~dollars in ~~Millions~~millions, ~~Except~~except ~~Per~~per ~~Share~~share ~~Amounts~~amounts) -– Unaudited

		For the Six Months Ended,
		June 30,2004		June 30,2003
Net income (loss)	As Reported	$	6.8	$	(5.4	)
Add:	Stock-based employee compensation expense included in reported net income (loss), net of related tax effects		—		2.7
Deduct:	Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		—		(1.8	)
Net income (loss)	Pro forma	$	6.8	$	(4.5	)

Adjusted EBITDA provides useful supplemental information to investors and enables investors to analyze the results of operations in the same way as management.

In Adjusted ~~connection~~EBITDA ~~with~~is ~~the recapitalization~~not ~~transactions,~~a inmeasure ~~February~~of ~~2003~~performance ~~Holding~~defined ~~distributed~~in onaccordance ~~behalf~~with ofU.S. ~~Remington~~GAAP. aHowever, ~~special~~management ~~payment~~believes ofthat ~~$4.5~~Adjusted ~~million~~EBITDA inis ~~the~~useful ~~aggregate~~ to ~~all~~investors ~~option holders~~ in ~~exchange~~evaluating ~~for~~ the ~~acceleration~~Company’s ~~and~~performance ~~cancellation~~because ofit ~~64,144~~is ~~outstanding~~a ~~options~~commonly ~~to purchase~~used ~~common~~financial ~~stock~~analysis oftool ~~Holding.~~for ~~The~~measuring ~~amount~~and ofcomparing ~~such~~companies ~~payment~~in ~~was~~the ~~determined~~Company’s ~~based~~industry onin ~~the~~areas ~~difference~~of ~~between~~operating performance. ~~the~~Management ~~price~~believes ~~paid~~that ~~for~~ the ~~acceleration~~disclosure ~~and cancellation~~ of ~~the~~Adjusted ~~options~~EBITDA ~~and~~offers ~~the~~an ~~exercise~~additional ~~price~~view of the ~~options.~~Company’s ~~Under~~operations ~~APB Opinion No. 25~~that, ~~this payment~~when ~~resulted~~coupled inwith athe ~~compensation~~U.S. ~~expense~~GAAP inresults ~~respect~~and ofthe ~~such~~reconciliation ~~options~~to ~~of $2~~U.~~7 million, net of taxes~~S. ~~Under~~GAAP ~~SFAS 123~~results, ~~the~~provides ~~expense~~a ~~associated~~more ~~with~~complete ~~these~~understanding ~~options~~of ~~would have been approximately $1.8 million in~~ the ~~first~~Company’s ~~quarter~~results of ~~2003,~~operations ~~with~~and the ~~remaining~~ ~~compensation~~factors ~~expense~~and ~~having~~trends ~~already~~affecting ~~been~~the ~~recorded~~Company’s ~~in prior years~~business.

~~Note~~ Adjusted 11EBITDA -should ~~Commitments~~not be considered as an alternative to net income (loss) as an indicator of the Company’s performance or as an alternative to net cash provided by operating activities as a measure of liquidity. The primary material limitations associated with the use of Adjusted EBITDA as compared to U.S. GAAP results is (i) it may not be comparable to similarly titled measures used by other companies in the Company’s industry, and ~~Contingencies~~(ii) it excludes financial information that some may consider important in evaluating the Company’s performance. The Company compensates for these limitations by providing disclosure of the differences between Adjusted EBITDA and U.S. GAAP results, including providing a reconciliation of Adjusted EBITDA to U.S. GAAP results, to enable investors to perform their own analysis of the Company’s operating results.

~~The~~Information Company has various purchase commitments for services incidental to the ordinary conduct of business, including services related to its utilities and NASCAR sponsorship. Such commitments are not at prices in excess of current market prices. The Company has purchase contracts with certain raw materials suppliers, for periods ranging up to approximately two years, some of which contain firm commitments to purchase minimum specified quantities. However, such contracts had no significant impact on the financial condition or results of operations during the reported periods. In recognition of and support of certain legal and legislative initiatives, the shooting sports industry established the Hunting and Shooting Sports Heritage Fund of which the Company is a member. The Company has historically made contributions to the Heritage Fund ranging from 0.5% to 1% of the Company’s net sales. The Company did not make contributions to the Heritage Fund related to the period from January 1, 2003 through March 31, 2004. The Company began accruing for contributions at 0.5% of net sales relating to certain domestically sold ammunition products beginning in the second quarter of 2004. Segments:

On July 19, 2004, the Company entered into a ten year exclusive distribution agreement with a technology products manufacturer that required the payment of $0.5 million in exchange for the exclusive distribution rights for certain security products within the United States, certain of its territories, and Canada. The Company expects to sell these security products to the federal agency and law enforcement markets. The Company anticipates incurring a total of approximately $1.1 million (inclusive of the above mentioned $0.5 million) of expenses associated with the initial launching of the products during the remainder of 2004 for distribution, selling, marketing, administrative, and transaction costs, and will include related financial results in the newly formed Technology Products segment, which is anticipated to be combined with the All Other reporting segment in 2004.


	(Unaudited)

	Three Months Ended March 31, 2009				Three Months Ended March 31, 2008

Net Sales:
Firearms		$	73.4			$	59.0
Ammunition			67.1				57.8
All Other			4.7				5.3

Consolidated Net Sales		$	145.2			$	122.1


Adjusted EBITDA:
Firearms		$	3.9			$	5.5
Ammunition			15.0				10.1
All Other			0.6				1.2
Other Reconciling Items			(1.0	)			(0.4	)

Adjusted EBITDA		$	18.5			$	16.4

On August 4, 2004, the Company entered into a joint venture agreement with ELSAG, Inc., an unaffiliated third party, to form Remington ELSAG Law Enforcement Services (RELES). RELES will sell and service a license plate reading technology that is expected to be sold to state and local law enforcement agencies along with certain federal agencies. The venture gives Remington a 50% ownership interest. The agreement calls for each member to provide 50% of required capital investments and receive 50% of distributions, with a maximum contribution amount of $1.5 million by each party. In addition, Remington will provide certain administrative support functions, while ELSAG, Inc. will provide product technology support. We currently anticipate making equity contributions of approximately $0.8 million by the end of 2004.


	(Unaudited)

	March 31, 2009			December 31, 2008			March 31, 2008

Assets:
Firearms		$	151.3		$	205.2		$	228.2
Ammunition			166.0			156.7			153.3
All Other			42.9			41.6			25.9
Other Reconciling Items			185.1			130.6			161.0


Consolidated Assets		$	545.3		$	534.1		$	568.4

12 17

~~Table~~REMINGTON ofARMS ~~Contents~~COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

~~NOTES~~ The TOfollowing ~~CONSOLIDATED~~table ~~FINANCIAL~~illustrates ~~STATEMENTS~~the calculation of Adjusted EBITDA, by reconciling Net Income (Loss) to Adjusted EBITDA:

(Dollars in Millions, Except Per Share Amounts) - Unaudited


	(Unaudited)

	Three Months Ended March 31, 2009				Three Months Ended March 31, 2008

Net Income (Loss)		$	5.5			$	(1.4	)
Adjustments:
Depreciation Expense			3.9				3.9
Interest Expense (A)			6.0				6.0
Intangibles Amortization			0.6				0.6
Other Noncash Charges (B)			1.0				0.3
Non-Recurring Charges (C)			(1.7	)			7.8
Income Tax (Benefit) Expense			3.2				(0.8	)

Adjusted EBITDA		$	18.5			$	16.4

~~The~~(A) ~~Company~~Interest isexpense ~~subject~~for tothe ~~various lawsuits and claims with respect~~ year-to-date ~~product~~ended ~~liabilities~~March 31, ~~governmental~~ ~~regulations~~2009 ~~and~~includes ~~other~~amortization ~~matters~~expense ~~arising~~of indeferred ~~the~~financing ~~normal~~costs ~~course~~ of ~~business~~$0.4, ~~Pursuant~~offset toby an$0.3 ~~asset~~associated ~~purchase~~with ~~agreement~~amortization (of the ~~“Purchase~~premium ~~Agreement”),~~recorded on ~~December~~the 1,Notes. ~~1993,~~Interest ~~the~~expense ~~Company~~for ~~acquired~~the ~~certain~~year-to-date ~~assets~~ended ~~and~~March ~~assumed~~31, ~~certain liabilities~~2008 ~~(the~~includes ~~“Acquisition”)~~amortization expense of ~~the~~deferred ~~sporting~~financing ~~goods~~costs ~~business~~of ~~formerly~~$0.3, ~~operated~~offset by E$0.3 I.associated duwith ~~Pont~~amortization ~~de Nemours and Company (“DuPont”) and one~~ of ~~DuPont’s~~the ~~subsidiaries~~premium ~~(together~~recorded ~~with~~on ~~DuPont,~~ the ~~“Sellers”)~~Notes. ~~Under~~(B) ~~the Purchase~~Other ~~Agreement,~~non-cash ~~the~~charges ~~Company generally bears financial responsibility~~ for ~~all~~the ~~product~~year-to-date ~~liability~~ended ~~cases~~March ~~and~~31, ~~claims~~2009 ~~relating~~includes to$0.2 ~~occurrences~~for ~~after~~loss ~~the~~on ~~closing~~disposal of ~~the Acquisition~~assets, ~~except~~$0.8 for ~~certain~~retirement ~~costs~~benefit ~~relating~~accruals ~~to certain shotguns, for all cases~~ and ~~claims relating to discontinued products and for limited other costs~~$0.1 ~~Because the Company’s assumption of financial responsibility~~ for ~~certain~~SFAS ~~product~~123R ~~liability~~stock ~~cases~~option ~~and~~expense. ~~claims~~Other ~~involving pre~~non-~~Acquisition~~cash ~~occurrences~~charges ~~was~~for ~~limited~~the year-to-date aended ~~fixed amount~~March ~~that has now been fully paid~~31, ~~and~~2008 ~~with~~includes ~~the~~$0.1 ~~Sellers~~for ~~retaining~~loss ~~liability~~on indisposal ~~excess~~ of ~~that~~assets ~~amount~~ and ~~indemnifying~~$0.2 ~~the~~for ~~Company~~retirement inbenefit ~~respect~~accruals. of(C) ~~such~~Nonrecurring ~~liabilities,~~items ~~the~~for ~~Company believes that product liability cases and claims involving occurrences arising prior to~~ the ~~Acquisition are not likely~~ year-to-date ~~have~~period aended ~~material~~March ~~adverse effect upon the financial condition~~31, ~~results~~2009 ofincludes ~~operations~~$0.2 ~~or cash flows~~ of ~~the~~Marlin ~~Company.~~integration ~~Moreover~~expense, ~~although~~and it$0.1 ~~is difficult to forecast the outcome~~ of ~~litigation,~~project ~~the Company does not believe~~expense, inoffset ~~light~~by ofa ~~relevant~~$2.0 ~~circumstances~~gain ~~(including~~due ~~the current availability of insurance for personal injury and property damage with respect~~ to ~~cases~~a ~~and~~federal ~~claims~~excise ~~involving~~tax ~~occurrences~~audit ~~arising~~settlement. ~~after~~Nonrecurring ~~the~~items ~~Acquisition, the Company’s accruals~~ for the ~~uninsured costs of such cases and claims and the Sellers’ agreement~~ year-to ~~be responsible for a portion of certain post~~-~~Acquisition~~date ~~shotgun-related~~period ~~product~~ended ~~liability~~March ~~costs~~31, as2008 ~~well~~include as$0.8 ~~the type~~ of ~~firearms~~expenses ~~products~~incurred ~~made~~in byconnection ~~the Company),~~with asfactory ~~well~~improvement asinitiatives ~~the passage of time, that the outcome of all pending post-Acquisition product liability cases~~ and ~~claims will be likely to have a material adverse effect upon~~ the ~~financial~~Marlin ~~condition~~integration, ~~results~~$1.8 ofrelated ~~operations,~~to ~~or cash flows of~~ the ~~Company.~~ ~~Nonetheless,~~inventory inwrite-up ~~part~~from ~~because of~~ the ~~nature~~application ~~and extent~~ of ~~manufacturer~~purchase ~~liability~~accounting ~~based~~to oninventory ~~the~~being ~~manufacture~~recognized ~~and/or~~in ~~sale~~cost of ~~allegedly~~sales ~~defective products (particularly~~ as tothe ~~firearms~~acquired ~~and~~inventory ~~ammunition)~~ is ~~uncertain,~~sold ~~there~~at ~~can~~a behigher ~~no assurance that the Company’s resources will be adequate to cover pending and future product liability occurrences~~basis, ~~cases~~$3.1 orfor ~~claims, in~~ the ~~aggregate,~~write-off orof ~~that~~technology ~~such~~products ~~a material adverse effect upon our financial condition~~inventory, ~~results~~$1.6 of ~~operations~~realized orgains ~~cash~~associated ~~flows~~with ~~will not~~metals ~~result~~hedging ~~therefrom.~~contract ~~Because~~adjustments ofand ~~the~~$0.5 ~~nature~~ of ~~its~~costs ~~products,~~related ~~the Company anticipates that it will continue~~ to ~~be involved in product liability litigation in~~ the ~~future.~~Marlin Acquisition.

~~The~~Note ~~Company’s~~14 ~~accruals~~– ~~for~~Recent ~~losses~~Accounting relating to product liability cases and claims includes accruals for all probable losses for which the amount can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Acquisition, the Company’s accruals for the uninsured costs of such cases and claims and the Sellers’ agreement to be responsible for a portion of certain post-Acquisition shotgun-related product liability costs, as well as the type of firearms products made by the Company), the Company does not believe with respect to product liability cases and claims that any reasonably possible loss exceeding amounts already recognized through the Company’s accruals has been incurred. Pronouncements

~~Note~~ In 12December –2007, ~~Accounting~~the ~~for~~FASB ~~Derivatives~~issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (“SFAS 160”). This standard is intended to improve, simplify, and converge internationally the reporting of noncontrolling interests in consolidated financial statements. SFAS 160 requires all entities to report ~~Hedging~~ noncontrolling ~~Activities~~(minority) interests in subsidiaries in the same way as equity in the consolidated financial statements. Moreover, SFAS 160 requires that transactions between an entity and noncontrolling interests be treated as equity transactions. SFAS 160 is effective for fiscal years beginning after December 15, 2008. Consequently, SFAS 160 was implemented by the Company on January 1, 2009. As of January 1, 2009, the Company now accounts for its consolidated joint venture, EOTAC, under the rules of SFAS 160.

~~The~~ In ~~Company~~April ~~purchases~~2009, ~~copper~~the ~~and lead~~FASB ~~options~~issued ~~contracts~~FSP toSFAS ~~hedge~~157-4, ~~against~~Determining ~~price~~Fair ~~fluctuations~~Value ofWhen ~~anticipated commodity purchases. The options contracts limit~~ the ~~unfavorable~~Volume ~~effect~~and ~~that~~Level ~~price~~of ~~increases~~Activity ~~will~~for ~~have on these metal purchases. At June 30, 2004,~~ the ~~fair~~Asset ~~value~~or ofLiability ~~the Company’s~~Have ~~outstanding~~Significantly ~~derivative~~Decreased ~~contracts~~and ~~relating~~Identifying toTransactions ~~firm~~That ~~commitments~~Are ~~and~~Not ~~anticipated~~Orderly ~~purchases~~ (~~aggregate~~“FSP ~~notional~~SFAS ~~amount 33.~~157-4 ~~million pounds of copper and lead~~”). upFSP toSFAS ~~fifteen~~157-4 ~~months~~provides ~~from~~guidelines ~~such~~for ~~date~~making ~~was~~fair ~~$4.1~~value ~~million~~measurements asmore ~~determined~~consistent with the ~~assistance~~ principles ofpresented ain ~~third~~SFAS ~~party. At July 31~~157, ~~2004,~~Fair ~~the~~Value ~~value~~Measurements of(“SFAS ~~those~~157”). ~~same~~FSP ~~contracts~~SFAS ~~outstanding~~157-4 atrelates ~~June 30, 2004, excluding any contracts that were settled or entered into during the month of July, had fallen~~ to ~~approximately~~determining ~~$3.4~~fair ~~million,~~values ~~due~~when tothere ~~price volatility~~is inno ~~the~~active market. ~~With~~or ~~the~~where ~~volatility of pricing~~ the ~~Company~~price ~~has~~inputs ~~experienced,~~being ~~the~~used ~~Company~~represent ~~believes~~distressed ~~that significant changes in commodity pricing could have a future material impact on the consolidated financial position, results of operations, or cash flows of the Company.~~

13 18

~~Table~~REMINGTON ofARMS ~~Contents~~COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions, except per share amounts) – Unaudited

~~NOTES~~sales. TOIt ~~CONSOLIDATED~~reaffirms ~~FINANCIAL~~what ~~STATEMENTS~~SFAS 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP SFAS 157-4 is effective for interim and annual periods ending after June 15, 2009. The Company is currently evaluating the impact that adopting FSP SFAS 157-4 will have on its results of operations, financial condition and equity.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (~~Dollars~~“FSP SFAS 107-1”). FSP SFAS 107-1 enhances consistency in ~~Millions~~financial reporting by increasing the frequency of fair value disclosures. FSP SFAS 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value. Prior to issuing FSP SFAS 107-1, ~~Except~~fair ~~Per~~values ~~Share~~for ~~Amounts)~~these assets and liabilities were only disclosed once a year. FSP SFAS 107-1 ~~Unaudited~~now requires these disclosures on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. FSP SFAS 107-1 is effective for interim and annual periods ending after June 15, 2009. The Company is currently evaluating the impact that adopting FSP SFAS 107-1 will have on its results of operations, financial condition and equity.

In ~~accordance~~April ~~with~~2009, the ~~provisions~~FASB ofissued ~~Statement~~FSP ofSFAS ~~Financial~~115-2 ~~Accounting~~and ~~Standards~~SFAS ~~No. 133~~124-2, ~~Accounting for~~Recognition ~~Derivative~~and ~~Instruments~~Presentation ~~and~~of ~~Hedging~~Other-Than-Temporary ~~Activities~~Impairments (“FSP SFAS ~~133~~115-2”), asprovides ~~amended~~additional byguidance ~~Statement~~designed ofto ~~Financial~~create ~~Accounting~~greater ~~Standards~~clarity ~~No.~~and ~~138,~~consistency ~~Accounting~~in accounting for ~~Certain Derivative Instruments~~ and ~~Certain~~presenting ~~Hedging~~impairment ~~Activities~~losses –on ~~an amendment of FASB Statement No~~securities. ~~133~~FSP (“SFAS ~~138”)~~115-2 ~~and~~on other-than-temporary byimpairments ~~Statement~~is ofintended ~~Financial~~to ~~Accounting~~bring ~~Standards~~greater ~~No.~~consistency ~~149,~~to ~~Amendment~~the timing of ~~Statement~~impairment ~~133~~recognition, ~~on Derivative Instruments~~ and ~~Hedging~~provide ~~Activities~~greater ~~(“SFAS~~clarity ~~149”),~~to ~~commodity~~investors ~~contracts~~about ~~are~~the ~~designated~~credit asand ~~cash~~noncredit ~~flow hedges,~~components ~~with~~of ~~the~~impaired ~~fair~~debt ~~value~~securities ofthat ~~these~~are ~~financial~~not ~~instruments~~expected ~~recorded~~to inbe ~~prepaid~~sold. ~~expenses~~The ~~and~~measure ~~other~~of ~~current~~impairment ~~assets,~~in ~~changes~~comprehensive inincome remains fair value. ~~recorded~~FSP inSFAS ~~accumulated~~115-2 ~~other~~also ~~comprehensive~~requires ~~income,~~increased and ~~net~~more ~~gains/losses~~timely ~~reclassified~~disclosures tosought ~~cost~~by ofinvestors ~~sales~~regarding ~~based~~expected ~~upon inventory~~cash ~~turnover~~flows, ~~indicating~~credit ~~consumption~~losses, and ~~sale~~an aging of securities ~~the~~with ~~underlying~~unrealized ~~commodity in the Company’s products~~losses. ~~During~~FSP ~~the~~SFAS ~~six~~115-2 ~~month~~is ~~period~~effective ~~ended~~for ~~June~~interim ~~30,~~and ~~2004,~~annual aperiods ~~net~~ending ~~gain~~after ofJune $015, 2009.6 ~~million~~The onCompany ~~derivative~~is ~~instruments~~currently ~~was~~evaluating ~~reclassified~~the toimpact ~~cost~~that ofadopting ~~sales from~~FSP ~~accumulated~~SFAS ~~other~~115-2 ~~comprehensive~~will ~~income,~~have ~~and~~on aits ~~net~~results ~~gain~~ of ~~$1.5~~operations, ~~million~~financial ~~was~~condition ~~recorded to accumulated other comprehensive income~~ and ~~to prepaid expenses and other current assets~~equity.

Note 1315—Investment -in ~~Segment Information~~ INTC

~~The~~ On October 31, 2008, the Company’s ~~business~~purchased isa ~~classified~~27.1% ~~into~~membership ~~three~~interest ~~reportable~~in ~~segments:~~INTC ~~Firearms~~USA, ~~which~~LLC ~~designs,~~(“INTC ~~manufactures,~~USA”). ~~and~~Remington’s ~~markets~~initial ~~shotguns~~investment was ~~and~~$0.8, ~~rifles~~with ~~for~~expected ~~the sporting~~subsequent ~~and~~cash ~~law~~contributions ~~enforcement,~~up ~~federal~~to ~~agency~~a ~~and~~total ~~military~~of ~~markets;~~$1.5. ~~Ammunition,~~The ~~which~~Company ~~designs,~~owns ~~manufactures~~27.1% of the issued and ~~markets~~outstanding ~~sporting~~membership ~~ammunition,~~interests ~~pistol~~in &INTC ~~revolver~~USA. ~~ammunition,~~INTC ~~ammunition~~USA ~~for~~owns ~~the~~a ~~law~~majority ~~enforcement,~~interest ~~federal~~in ~~agency~~Springfield ~~and~~Munitions ~~military~~Company, ~~markets~~LLC, ~~and~~ ~~ammunition~~which ~~reloading~~with ~~components;~~Delta ~~and~~Frangible ~~All Other~~Ammunition, ~~which~~LLC ~~includes~~owns ~~accessory~~intellectual property rights related ~~gun~~to ~~products~~manufacturing ~~and~~rights ~~the~~for ~~manufacture~~various shot, ammunition and ~~marketing~~other ofproducts. ~~clay~~The ~~targets~~Company ~~and~~believes ~~powdered~~this investment, ~~metal~~which ~~products.~~is ~~These~~accounted ~~products~~for ~~are~~using ~~sold~~the ~~primarily~~equity tomethod ~~wholesalers~~of accounting and ~~retailers~~is included in other non-current assets, ~~mainly through~~will ~~manufacturer’s~~allow ~~sales~~INTC ~~representatives.~~USA ~~Other~~to ~~reconciling~~acquire, ~~items~~construct ~~include~~and/or ~~corporate~~lease and ~~other~~thereafter ~~assets~~equip ~~not~~and ~~allocated~~operate toa ~~the~~manufacturing ~~individual~~facility ~~segments,~~for ~~assets~~the ~~held~~production of products for sale, ~~and~~to ~~discontinued~~the ~~operations.~~Company and others.

The ~~Company~~following ~~primarily~~summarizes ~~evaluates~~ the ~~performance~~Company’s ofinvestment ~~its~~account ~~segments~~balance ~~and~~associated allocates resources to them based on Adjusted EBITDA. Adjusted EBITDA differs from the term “EBITDA” as it is commonly used, and is substantially similar to the measure “Consolidated EBITDA” that is used in the indenture for the Notes. In addition to adjusting net income (loss) to exclude income taxes, interest expense, and depreciation and amortization, Adjusted EBITDA also adjusts net income (loss) by excluding items or expenses not typically excluded in the calculation of “EBITDA”, such as noncash items, gain or loss on asset sales or write-offs, extraordinary, unusual or nonrecurring items, and certain “special payments” to Remington employees who hold options and deferred shares in respect of Holding common stock, consisting of amounts that are treated as compensation expense by Remington and are paid in connection with ~~payments~~INTC ~~of dividends to holders of Holding common stock.~~ USA:

Information on Segments:


	(Unaudited)

	March 31, 2009		December 31, 2008		March 31, 2008

Account
Investment in Membership Interest		$ 0.8		$ 0.8		—
Equity in (Earnings) Losses from Membership Interest		—		—		—

	(Unaudited)
	Three Months EndedJune 30,						Six Months EndedJune 30,
	2004			2003			2004			2003
Net Sales:
Firearms	$	46.0		$	46.2		$	91.2		$	91.2
Ammunition		35.3			29.0			68.8			59.6
All Other		5.9			4.9			11.1			10.3
Consolidated Net Sales	$	87.2		$	80.1		$	171.1		$	161.1
Adjusted EBITDA:
Firearms	$	5.0		$	7.5		$	9.9		$	12.3
Ammunition		(2.0	)		(1.5	)		(0.9	)		0.3
All Other		0.7			0.9			1.6			1.8
Other Reconciling Items		(0.3	)		1.3			(1.1	)		2.5
Adjusted EBITDA	$	3.4		$	8.2		$	9.5		$	16.9

14Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Table~~ The following discussion and analysis should be read in conjunction with the accompanying unaudited interim consolidated financial statements and related notes of ~~Contents~~Remington Arms Company, Inc. (“Remington”), which includes the financial results of The Marlin Firearms Company (“Marlin”) and its subsidiary, H&R 1871, LLC (“H&R”) (as of February 1, 2008), as well as the accounts of Remington’s subsidiaries, RA Brands, L.L.C. (“RA Brands”), Remington Steam, LLC (“Remington Steam”), Remington’s consolidated joint venture EOTAC, LLC (“EOTAC”) and Remington’s unconsolidated 27.1% membership interest in INTC USA, LLC (“INTC USA”) (collectively with Remington, the “Company”) as of and for the period ended March 31, 2009, and with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2008, included with Remington’s Annual Report on Form 10-K on file with the SEC. These audited consolidated financial statements for the year ended December 31, 2008 include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.

~~NOTES~~ On TOJanuary ~~CONSOLIDATED~~28, ~~FINANCIAL~~2008, ~~STATEMENTS~~100% of the shares of Marlin were purchased by Remington (the “Marlin Acquisition”). The Marlin Acquisition includes Marlin’s 100% ownership interest in H&R. Although the Marlin Acquisition closed on January 28, 2008, based on the accounting policies adopted by Marlin and in place prior to the Marlin Acquisition, full financial statements were not available for the resulting stub period January 28-31, 2008 (the “Stub Period”). In addition, it was determined by the Company that it would require significant effort and time to generate financial statements for the Stub Period. Based on materiality tests performed using guidance from SAB Topic 1 (M1), the Marlin Stub Period was deemed immaterial to the unaudited interim consolidated financial statements and thus, Remington has reported consolidated financial statements with Marlin financial data since February 1, 2008.

~~(Dollars~~ Management’s inDiscussion ~~Millions,~~and ~~Except~~Analysis ~~Per~~of ~~Share~~Financial ~~Amounts)~~Condition -and ~~Unaudited~~Results of Operations is separated into the following sections:

	(Unaudited)
	June 30, 2004		December 31 2003
Assets:
Firearms	$	140.6	$	118.7
Ammunition		134.7		102.0
All Other		12.9		10.0
Other Reconciling Items		97.6		125.1
Consolidated Assets	$	385.8	$	355.8


	•	Recent Developments

	•	Executive Overview

	•	Business Outlook

	•	Liquidity and Capital Resources

	•	Results of Operations

	•	Recent Accounting Pronouncements

	•	Environmental Matters

	•	Regulatory Developments

	•	Critical Accounting Policies and Estimates

	•	Information Concerning Forward-Looking Statements

~~The~~Recent ~~following table illustrates the calculation of Adjusted EBITDA, by reconciling Net Income/ (Loss) to Adjusted EBITDA, which management believes is the most nearly equivalent GAAP measure:~~ Developments

	(Unaudited)
	Three Months EndedJune 30,						Six Months EndedJune 30,
	2004			2003			2004			2003
Net Income (Loss)	$	(3.5	)	$	(1.2	)	$	6.8		$	(5.4	)
Adjustments: Depreciation Expense		2.1			2.4			4.5			4.8
Interest Expense (A)		6.2			6.5			12.4			11.8
Other Noncash Charges (B)		2.0			1.2			3.8			2.1
Non-Recurring Charges or Gains (C)		(0.5	)		0.1			(13.5	)		0.3
Other Unusual Charges (D)		—			—			—			6.7
Income Taxes (E)		(2.9	)		(0.8	)		(4.5	)		(3.4	)
Adjusted EBITDA	$	3.4		$	8.2		$	9.5		$	16.9

On March 13, 2009, our former Chief Executive Officer, Thomas L. Millner, announced that he was terminating his employment with Remington and resigning as a member of the Board of Directors of Remington (the “Board”). On March 14, 2009, effective immediately, the Board appointed Theodore H. Torbeck to serve as Chief Executive Officer and a director of Remington.

~~(A)~~ On ~~Interest~~April ~~expense~~14, ~~includes~~2009, ~~amortization~~Remington ~~expense~~entered ofinto ~~deferred~~the ~~financing~~Third ~~costs~~Amendment ~~of $0.4 million and $0.9 million and interest expense reclassified~~ to ~~discontinued operations of $0.0 million and $0.1 million, for~~ the ~~three~~Amended and ~~six~~Restated ~~month~~Credit ~~periods ended June 30~~Agreement, ~~2004,~~as ~~respectively,~~previously ~~and amortization expense of $0~~amended.5 ~~million~~See ~~and~~“Amended ~~$0.9 million~~ and ~~interest~~Restated ~~expense~~Credit Agreement”below ~~reclassified~~for toa ~~discontinued~~discussion ~~operations~~ of ~~$0.5~~the ~~million~~Third ~~and~~Amendment ~~$1.0~~to ~~million, for~~ the ~~three~~Amended and ~~six~~Restated ~~month~~Credit ~~periods ended June 30, 2003, respectively~~Agreement.

~~(B)~~Executive ~~Other~~Overview noncash charges includes $0.1 million and $0.1 million expense for executive pension, $0.1 million and a $0.2 million loss on disposal of assets, and $1.8 million and $3.4 million expense for pension and other postretirement benefits for the three and six month periods ended June 30, 2004, and $0.1 million and $0.2 million expense for executive pension, $0.4 million and $0.4 million loss on disposal of assets, and $0.7 million and $1.5 million expense for pension and other postretirement benefits for the three and six month periods ended June 30, 2003, respectively.

~~(C)~~ We ~~Nonrecurring~~evaluate ~~charges~~our orbusiness ~~gains~~primarily ~~include~~on ~~$0.5~~Adjusted ~~million~~EBITDA ~~gain~~(as ~~and~~described $in Note 13.5 ~~million~~to ~~gain~~our ~~from~~consolidated ~~the~~financial ~~disposal~~statements ofappearing ~~discontinued~~elsewhere ~~operations~~in ~~for~~this ~~the~~quarterly ~~three~~report) ~~and~~from ~~six~~two ~~month~~core ~~periods~~segments, ~~ended~~Firearms ~~June~~and 30Ammunition, ~~2004,~~ and ~~$0.1~~to ~~million~~a ~~and~~lesser ~~$0.2~~degree ~~million~~on ofother ~~severance~~operating ~~costs~~segments ~~for~~organized within the ~~three~~All ~~and~~Other ~~six~~reporting ~~month~~segment, ~~periods~~consisting ~~ended~~of ~~June~~Accessories, 30Licensed Products, ~~2003~~Clay Targets, ~~respectively~~Powder Metal Products and Apparel. Following the

15 20

~~Table~~Marlin Acquisition, the Marlin and H&R products are included in our Firearms reporting segment. As part of ~~Contents~~this evaluation, we focus on managing inventory (including quantity), length and volume of extended dating sales terms and trade payables through, among other things, production management, expense control and improving operating efficiencies at our factories via Lean and Six Sigma techniques.

~~NOTES~~ We TOcontinue ~~CONSOLIDATED~~to ~~FINANCIAL~~look ~~STATEMENTS~~for opportunities to improve our quality and efficiencies in our manufacturing facilities as we strive to be a market-driven company in an increasingly demanding global marketplace. Accordingly, we have undertaken an effort to accelerate existing initiatives in the area of Lean manufacturing. In addition, we are committed to refining our core businesses and positioning ourselves to take advantage of opportunities to strategically grow and improve our business. As we regularly evaluate our overall business, we look for new products in the hunting, shooting, accessories, law enforcement, government, and military areas that complement our core strategies, which may include new product development, direct product sourcing, licensing, acquisitions or other business ventures.

~~(Dollars~~ Finally, in ~~Millions~~order to be well positioned for growth, ~~Except~~we ~~Per~~recognize ~~Share~~the ~~Amounts)~~need -to ~~Unaudited~~protect our competitive position with the introduction of new, innovative, high quality, higher performance and cost effective products to support our customers and consumers.

~~(D)~~ The ~~Other~~sale ~~unusual~~of ~~charges~~firearms ~~includes~~and ~~$4.5~~ammunition ~~million~~depends upon a number of factors related to the ~~acceleration~~level of consumer spending, including the general state of the economy and ~~subsequent~~the ~~cancellation~~willingness of ~~options~~consumers to ~~purchase~~spend ~~common~~on ~~stock~~discretionary ofitems. ~~Holding~~The industry can be affected by macroeconomic factors, $0including changes in national, regional, and local economic conditions, employment levels and consumer spending patterns.7 ~~million~~Disruptions in the overall economy and financial markets have historically reduced consumer confidence in the economy and negatively affected consumer spending. Historically, the general level of ~~additional~~economic ~~interest~~activity has significantly affected the demand for ~~early~~sporting ~~redemption~~goods ofproducts in the ~~Refinanced~~firearms, ~~Notes~~ammunition, and $1related markets.5 ~~million~~As ~~expensed~~economic ~~for~~activity ~~the~~loses ~~unamortized~~momentum, ~~debt~~confidence ~~acquisition~~and ~~costs~~discretionary ~~related~~spending by consumers has historically decreased. We are currently experiencing effects that are countercyclical to the ~~Old~~depressed ~~Credit~~economic ~~Facility~~conditions amid concerns about the political environment.

~~(E)~~ We ~~Income~~believe ~~taxes~~that ~~include~~existing ~~$0.1~~and ~~million~~potential customers have concerns that the new administration could ban or impose more stringent regulation of firearms and $0ammunition more severely than previous administrations.3 ~~million,~~We ~~for~~believe these concerns have increased the ~~three~~market ~~month~~demand for certain of our firearms and ammunition products for the periods ~~ended~~presented ~~June~~herein. Although ~~30,~~we ~~2004~~believe that regulation of firearms and ~~2003~~ammunition, ~~respectively~~and consumer concerns about such regulation, ~~and~~have ~~$0.0~~not ~~million~~had a significant adverse influence on the market for our firearms and ~~$0.6~~ammunition ~~million,~~products for the ~~six~~periods ~~month~~presented ~~periods~~herein, ~~ended~~there ~~June~~can ~~30,~~be ~~2004~~no assurance that the regulation of firearms and ~~2003,~~ammunition ~~respectively,~~will ~~which~~not ~~was~~become ~~reclassified~~more torestrictive ~~discontinued~~in ~~operations~~the future or that any such development will not adversely affect these markets.

16 We continue to experience volatile costs related to materials and energy (including lead, copper, zinc, steel, and fuel) which are above any historical comparisons. Specifically, management currently estimates that its 2009 annual costs for certain core materials and energy alone have increased in the range of $50-70 million over 2003 annual levels. Since 2005, management has initiated price increases to our customers in an attempt to partially offset these costs increases. However, we have not initiated price increases in 2009 at the levels recently experienced due to the acquisition costs of certain materials declining and will continue to evaluate the need for future price adjustments in light of these trends, our competitive landscape, and financial results. Management estimates that its cumulative price increases initiated since 2003 have offset approximately 40% of the estimated cumulative costs incurred. These estimates assume no significant loss in overall sales or production volume.

~~Table~~Business ofOutlook ~~Contents~~

~~NOTES~~General ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~ Economy

~~(Dollars~~ We believe the general economic environment continues to be increasingly volatile and uncertain as a result of credit concerns due to the continued challenges in ~~Millions~~the financial services industry, ~~Except~~the ~~Per~~crisis ~~Share~~in ~~Amounts)~~the -housing ~~Unaudited~~market, the decline in the stock market, tightening in the credit markets, disappointing labor market conditions, job

~~Note 14 - Financial Position and Results of Operations of Remington Arms Company, Inc.~~ 21

~~The~~losses, ~~following~~and ~~condensed~~uncertainty ~~consolidating~~about ~~financial data provides information regarding~~ the ~~financial~~geopolitical ~~position~~environment and ~~results~~the ofrecent ~~operations~~stimulus ~~of Remington Arms Co, Inc~~bill., ~~including~~Consumer ~~Remington’s~~confidence ~~wholly~~is ~~owned~~at ~~subsidiaries~~an RAall ~~Brands,~~time Llow.~~L.C.~~ ~~and~~We RAcan ~~Factors,~~provide ~~Inc.~~no ~~Separate~~assurance ~~financial statements of Holding are not presented because management has determined~~ that ~~they~~these ~~would~~trends ~~not~~will be material to holders of the Company’s public securities, the Notes. The Notes are fully and unconditionally guaranteed on a joint and several basis by all of Remington’s subsidiaries. Holding does not ~~have any significant independent operations or assets other than its ownership interest in Remington~~continue.

~~REMINGTON ARMS COMPANY, INC. AND SUBSIDIARIES~~ Industry

~~CONDENSED~~ Although ~~CONSOLIDATING~~consumer ~~BALANCE~~confidence is at an all time low, in the first quarter of 2009 the industry continued to experience increased domestic firearms and ammunition sales that began after the U.S. presidential election. We believe these increases are caused by concerns that the new administration could ban and regulate firearms and ammunition more severely ~~SHEETS~~ than previous administrations. In addition, the government, military, and law enforcement market have remained strong due to the availability of homeland security funding and political uncertainty.

~~June~~ Meanwhile, 30the general worldwide economic conditions experienced in 2008, ~~2004~~including a downturn due to the sequential effects of the sub prime lending crisis, general credit market crisis, collateral effects on the financial services industry, volatile energy costs, slow economic activity, decreased consumer confidence, adverse business conditions and liquidity concerns, have continued into 2009.

~~(Unaudited)~~The Company

	Remington		CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co., Inc.andSubsidiaries
ASSETS
Current Assets	$	131.4	$	100.5	$	—	$	231.9
Receivable from Remington		—		96.3		96.3		—
Equity method investment in subsidiaries		203.1		—		203.1		—
Noncurrent Assets		115.4		38.5		—		153.9
Total Assets	$	449.9	$	235.3	$	299.4	$	385.8
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities	$	42.6	$	32.2	$	—	$	74.8
Payable to Holding, Inc., Net		0.9		—		—		0.9
Payable to RA Brands, L.L.C., Net		61.0		—		61.0		—
Payable to RA Factors, Inc., Net		35.3		—		35.3		—
Noncurrent Liabilities		292.1		—		—		292.1
Shareholder’s Equity		18.0		203.1		203.1		18.0
Total Liabilities and Shareholder’s Equity	$	449.9	$	235.3	$	299.4	$	385.8

Management believes that our product sales increased subsequent to the U.S. presidential election primarily due to consumer concerns that the new administration could pass strong legislation and increase taxes on ammunition and firearms. The political uncertainty has caused many consumers to stock up on firearms and ammunition, which has driven up prices and led to inventory shortages.

17 Subsequent to the U.S. presidential election, demand for high capacity semi-automatic rifles, as well as tactical and home defense style shotguns has increased dramatically, particularly within the consumer segment of the market and ammunition markets amid expectations that the new administration will reimpose an assault weapons ban and fears that taxes on ammunition and firearms might dramatically increase. Management is unable to predict whether current consumer spending trends will continue. However, management continues to evaluate these trends as well as uncertainties associated with costs related to producing and procuring materials, energy, processing and transportation costs.

~~Table~~ Management’s strategy in light of ~~Contents~~the overall economic environment noted above has been to closely monitor and evaluate our production levels in order to meet our sales demand, improve efficiencies and quality, improve profitability, improve average working capital and preserve liquidity. Additionally, management has evaluated and will continue to monitor production and supply constraints to make appropriate adjustments to better meet changing market demands.

~~NOTES~~ In TOan ~~CONSOLIDATED~~effort ~~FINANCIAL~~to ~~STATEMENTS~~improve efficiencies and quality, we have implemented Lean manufacturing and Six Sigma initiatives as part of the culture in our factories. The Lean manufacturing and Six Sigma initiatives implemented have had a positive impact in improving our productivity and quality.

~~(Dollars~~ In inour ~~Millions~~efforts to improve working capital and preserve liquidity, ~~Except~~we ~~Per~~have ~~Share~~remained ~~Amounts)~~disciplined -in ~~Unaudited~~our approach to limit the use of extended dating terms and evaluating customer creditworthiness. We are continuously evaluating our production levels in order to balance production with our sales demand and maintain our inventory levels.

~~REMINGTON~~ We ~~ARMS~~continue ~~COMPANY~~to pursue growth initiatives in our government, ~~INC.~~military, ~~AND~~and ~~SUBSIDIARIES~~law enforcement divisions along with broadening our brand awareness with selective licensing arrangements and continue to evaluate opportunities that may improve our production processes.

~~CONDENSED CONSOLIDATING BALANCE SHEETS~~ 22

~~December~~Liquidity ~~31,~~and ~~2003~~Capital Resources

	Remington		CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co. andSubsidiaries
ASSETS
Current Assets	$	110.4	$	70.5	$	—	$	180.9
Receivable from Remington		—		118.9		118.9		—
Equity method investment in subsidiaries		213.1		—		213.1		—
Noncurrent Assets		125.3		49.6		—		174.9
Total Assets	$	448.8	$	239.0	$	332.0	$	355.8
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities	$	40.7	$	20.2	$	—	$	60.9
Payable to RACI Holding, Inc., Net		0.9		—		—		0.9
Payable to RA Brands, L.L.C.		58.3		—		58.3		—
Payable to RA Factors, Inc.		60.6		—		60.6		—
Noncurrent Liabilities		275.9		5.7		—		281.6
Shareholder’s Equity		12.4		213.1		213.1		12.4
Total Liabilities and Shareholder’s Equity	$	448.8	$	239.0	$	332.0	$	355.8

Overview

18 Historically, our principal debt financing has consisted of borrowings under our Amended and Restated Credit Agreement (as amended by the First, Second and Third Amendments, the Joinder Agreement and the Letter Amendment) and the indenture for the 10.5% Senior Subordinated Notes due 2011 (the “Notes”) (as supplemented, the “Indenture”).

~~Table~~ We generally fund expenditures for operations, administrative expenses, capital expenditures, debt service obligations, potential repurchases of ~~Contents~~our Notes (which we intend to make from time to time depending on market conditions) and dividend payments with internally generated funds from operations, and satisfy working capital needs from time to time with borrowings under our Amended and Restated Credit Agreement. We believe that we will be able to meet our debt service obligations, fund our short-term and long-term operating requirements, and make permissible dividend payments (subject to restrictions in the Amended and Restated Credit Agreement as amended, and the Indenture) in the future with cash flow from operations and borrowings under our Amended and Restated Credit Agreement, although no assurance can be given in this regard. We continue to focus on managing inventory levels to keep them in line with sales projections and management of accounts payable.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ Liquidity

As of March 31, 2009, we had outstanding approximately $274.4 million of indebtedness, consisting of approximately $201.9 million aggregate carrying amount (~~Dollars~~$200.0 million principal) of the Notes, a $19.3 million balance on our Term Loan, $51.8 million in ~~Millions~~borrowings under the Amended and Restated Credit Agreement, ~~Except~~$0.7 ~~Per~~million ~~Share~~in ~~Amounts)~~capital lease obligations and a $0.7 million note payable to Holding. As of March 31, 2009, we also had aggregate letters of credit outstanding of $7.0 million and $2.1 million in short-term ~~Unaudited~~borrowings.

~~REMINGTON~~ Financing ~~ARMS~~for ~~COMPANY~~our efforts to strategically grow from direct product sourcing, ~~INC.~~licensing, ~~AND~~acquisitions ~~SUBSIDIARIES~~or business ventures may be available under our Amended and Restated Credit Agreement, to the extent permitted under the Indenture.

~~CONDENSED~~10½% ~~CONSOLIDATING~~Senior ~~STATEMENT~~Subordinated OFNotes ~~OPERATIONS~~due 2011

QUARTER ENDED June 30, 2004 (Unaudited)	Remington			CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co.,Inc. andSubsidiaries
Sales	$	87.2		$	—	$	—	$	87.2
Gross Profit		16.5			—		—		16.5
Royalty Income (Expense)		(3.4	)		3.4		—		—
Factoring Income (Expense)		(2.4	)		2.4		—		—
Income from Equity Investees		2.3			—		2.3		—
Net (Loss) Income		(3.5	)		2.3		2.3		(3.5	)

The FGI Acquisition resulted in a new basis of the value of the Notes. Accordingly, the Notes were adjusted to their estimated fair value as of May 31, 2008 of $203.8 million. The estimated increase of $3.8 million is being amortized into interest expense over the remaining term of the Notes. In addition, debt acquisition costs associated with obtaining waivers, consents and amendments in the amount of $4.2 million related to the Notes and $1.0 million related to the revolver were capitalized as of May 31, 2007 and are being amortized.

QUARTER ENDED June 30, 2003 (Unaudited)	Remington			CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co.,Inc. andSubsidiaries
Sales	$	80.1		$	—	$	—	$	80.1
Gross Profit		19.0			—		—		19.0
Royalty Income (Expense)		(5.1	)		5.1		—		—
Factoring Income (Expense)		(2.9	)		2.9		—		—
Income from Equity Investees		4.7			—		4.7		—
Net (Loss) Income		(1.2	)		4.7		4.7		(1.2	)

The Notes were initially issued on January 24, 2003 in an aggregate principal amount of $200.0 million. The Notes are senior unsecured obligations of Remington. The Indenture contains restrictive covenants that, among other things, limit the incurrence of debt by Remington and its subsidiaries, the payment of dividends to Holding, the use of proceeds of specified asset sales and transactions with affiliates. In addition, the Indenture permits repurchases of the Notes on the open market, subject to limitations that may be contained in the Amended and Restated Credit Agreement and the Indenture.

SIX MONTHS ENDED June 30, 2004 (Unaudited)	Remington			CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co.,Inc. andSubsidiaries
Sales	$	171.1		$	—	$	—	$	171.1
Gross Profit		36.0			—		—		36.0
Royalty Income (Expense)		(6.8	)		6.8		—		—
Factoring Income (Expense)		(4.8	)		4.8		—		—
Income from Equity Investees		16.5			—		16.5		—
Net Income		6.8			16.5		16.5		6.8

SIX MONTHS ENDED June 30, 2003 (Unaudited)	Remington			CombinedGuarantorSubsidiaries		Eliminations		RemingtonArms Co.,Inc. andSubsidiaries
Sales	$	161.1		$	—	$	—	$	161.1
Gross Profit		40.4			—		—		40.4
Royalty Income (Expense)		(10.2	)		10.2		—		—
Factoring Income (Expense)		(5.8	)		5.8		—		—
Income from Equity Investees		9.5			—		9.5		—
Net (Loss) Income		(5.4	)		9.5		9.5		(5.4	)

On May 12, 2008, Remington entered into a Second Supplemental Indenture, by and among Remington, U.S. Bank National Association as Trustee, and each of RA Brands, Marlin and H&R (the “New Guarantors”), to the Indenture. Pursuant to the Second Supplemental Indenture, each of the New Guarantors has agreed to

19 23

~~Table~~unconditionally guarantee all of ~~Contents~~Remington’s obligations under the Notes on the terms and subject to the conditions of the Indenture.

~~NOTES~~ We TOmay ~~CONSOLIDATED~~from ~~FINANCIAL~~time ~~STATEMENTS~~to time seek to retire or purchase our outstanding debt through cash purchases or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors and the amounts involved may be material.

~~(Dollars~~The inAmended ~~Millions,~~and ~~Except~~Restated ~~Per~~Credit ~~Share Amounts) - Unaudited~~ Agreement

~~REMINGTON~~ Our ~~ARMS~~Amended ~~COMPANY~~and Restated Credit Agreement provides up to $155.0 million of borrowing capacity under an asset-based senior secured revolving credit facility through January 4, ~~INC~~2011 (per the Third Amendment discussed below). ~~AND~~Amounts ~~SUBSIDIARIES~~available under the Amended and Restated Credit Agreement are subject to a borrowing base limitation based on certain percentages of eligible accounts receivable and eligible inventory in addition to the minimum availability requirement of $27.5 million. The Amended and Restated Credit Agreement also includes a letter of credit sub-facility of up to $15.0 million. Pursuant to the Second Amendment, each of Marlin and H&R became a “Borrower” under the Amended and Restated Credit Agreement.

~~CONDENSED~~ On ~~CONSOLIDATING~~April ~~STATEMENTS~~14, OF2009, ~~CASH~~Remington ~~FLOWS~~entered into the Third Amendment to the Amended and Restated Credit Agreement, as previously amended. The Third Amendment, among other things:

~~Year-~~1) extended the stated maturity of the Revolving Credit Facility, including Remington’s $25.0 million Term Loan (the “Term Loan”), to January 4, 2011; 2) amended the interest rate applicable to the Term Loan to 2.50% plus the Alternate Base Rate for any advance under the Term Loan that is a “Base Rate Loan” and 4.00% plus the relevant Adjusted London Interbank Offered Rate (LIBOR) for any advance under the Term Loan that is a “Euro-~~Date~~Dollar ~~June~~Loan”; 303) increased the fee for any available credit under the Revolving Credit Facility to 0.50% of the average amount of available credit; 4) increased the amount generally available for cash repurchases of Remington’s Notes from an aggregate amount of $20.0 million to an aggregate amount of $50.0 million, ~~2004~~although under certain circumstances Remington may make cash repurchases of Notes in an aggregate amount greater than $50.0 million so long as the portion of the purchase price that exceeds $50.0 million is paid in cash provided by FGI; 5) included a covenant restricting certain capital expenditures in the aggregate not to exceed $15.0 million during any fiscal year plus amounts carried forward from previous years; 6) increased the limit on “Permitted Acquisitions” to $15.0 million; 7) provided for a consent to a potential acquisition; and 8) amended the pricing grid set forth under the definition of “Applicable Margin”.

The interest rate margin for the Alternate Base Rate and the Euro-Dollar loans was (~~Unaudited~~0.50%) and 1.00%, respectively, at both March 31, 2009 and 2008. The weighted average interest rate under the Company’s outstanding credit facility was 2.75% and 5.23%for the three month periods ended March 31, 2009 and 2008, respectively.

	Remington			CombinedGuarantorSubsidiaries			Eliminations			RemingtonArms Co.,Inc. andSubsidiaries
Operating Activities
Net Cash (Used in) Provided by Continuing Operations	$	(50.4	)	$	0.1		$	—		$	(50.3	)
Net Cash Provided by Discontinued Operations		0.1			—			—			0.1
Net Cash (Used in) Provided by Operating Activities		(50.3	)		0.1			—			(50.2	)
Investing Activities
Net Proceeds from Sale of Assets		16.3			26.5			—			42.8
Dividends Received		26.5			—			(26.5	)		—
Purchase of Property, Plant and Equipment		(1.8	)		—			—			(1.8	)
Proceeds from Sale of Property, Plant and Equipment		0.5			—			—			0.5
Net Cash Provided by Investing Activities		41.5			26.5			(26.5	)		41.5
Financing Activities
Net Borrowing on Revolving Credit Facility		9.2			—			—			9.2
Principal Payments on Long-Term Debt		(0.1	)		—			—			(0.1	)
Net Borrowings from Short-Term Debt		2.5			—			—			2.5
Dividends Paid		(2.1	)		(26.5	)		26.5			(2.1	)
Decrease Book Overdraft		(0.6	)		—			—			(0.6	)
Net Cash Used in Financing Activities		8.9			(26.5	)		26.5			8.9
(Decrease) Increase in Cash and Cash Equivalents		0.1			0.1			—			0.2
Cash and Cash Equivalents at Beginning of Period		0.4			—			—			0.4
Cash and Cash Equivalents at End of Period	$	0.5		$	0.1		$	—		$	0.6

As of March 31, 2009 approximately $41.1 million in additional borrowings including the minimum availability requirement of $27.5 million was available as determined pursuant to the Amended and Restated Credit Agreement. As a part of the Second Amendment, the Company could elect for the Term Loan an interest rate of LIBOR plus 200 basis points or prime plus 50 basis points. The Company’s Term Loan was at LIBOR plus 200 basis points (or 2.50%) at March 31, 2009. The Company’s Term Loan was at LIBOR plus 200 basis points (or 4.82%) at March 31, 2008.

20 24

~~Table~~ The terms of ~~Contents~~the Third Amendment, as discussed above, amended the interest rate applicable to the Term Loan to 2.50% plus the Alternate Base Rate, for any advance under the Term Loan that is a “Base Rate Loan” and 4.00% plus the relevant LIBOR for any advance under the Term Loan that is a “Euro-Dollar Loan”.

~~NOTES~~ The TOweighted ~~CONSOLIDATED~~average ~~FINANCIAL~~interest ~~STATEMENTS~~rate of the Company’s Term Loan for the three month periods ended March 31, 2009 and 2008 was 2.57% and 6.53%, respectively.

~~(Dollars~~Capital in& ~~Millions,~~Operating ~~Except~~Leases ~~Per~~and ~~Share~~Other ~~Amounts)~~ Long-Term ~~Unaudited~~ Obligations

~~REMINGTON~~ We ~~ARMS~~maintain ~~COMPANY~~capital leases mainly for computer equipment and lighting. We have several operating leases, ~~INC~~including a lease for our Memphis warehouse that expires in 2010. ~~AND~~We ~~SUBSIDIARIES~~also maintain contracts including, among other things, a services contract with our third party warehouse provider.

~~CONDENSED~~Cash ~~CONSOLIDATING~~Flows ~~STATEMENTS~~and OFWorking ~~CASH FLOWS~~ Capital

~~Year-~~ Net cash provided by operating activities was $14.0 million for the three month period ended March 31, 2009 compared to~~-Date~~ ~~June~~net 30cash used in operating activities of $18.3 million for the three month period ended March 31, ~~2003~~2008. The $32.3 million increase in cash provided by operating activities for the three months ended March 31, 2009 compared to the same period ended March 31, 2008 resulted primarily from:

~~(Unaudited)~~• Inventory decreasing by $2.5 million over the three months ended March 31, 2009 compared to an increase of $8.9 million over the three months ended March 31, 2008, primarily due to higher sales; • The recognition of net income of $5.5 million for the three months ended March 31, 2009 compared to a net loss of $1.4 million for the three months ended March 31, 2008; and • Prepaid and other current assets decreasing by $3.9 million for the three months ended March 31, 2009 compared to an increase of $13.8 million for the three months ended March 31, 2008. The change is primarily due to fewer hedging contracts in 2009 resulting in lower prepaid hedging expense.

	Remington			CombinedGuarantorSubsidiaries			Eliminations		RemingtonArms Co.,Inc. andSubsidiaries
Operating Activities
Net Cash Used in Continuing Operations	$	(49.4	)		(0.1	)		—	$	(49.5	)
Net Cash Used in Discontinued Operations		(1.7	)		—			—		(1.7	)
Net Cash Used in Operating Activities	$	(51.1	)	$	(0.1	)	$	—	$	(51.2	)
Investing Activities
Capital Expenditures		(2.7	)		—			—		(2.7	)
Net Cash Used in Discontinued Operations		(0.1	)		—			—		(0.1	)
Net Cash Used in Investing Activities		(2.8	)		—			—		(2.8	)
Financing Activities
Net Borrowings from Revolving Credit Facility		56.2			—			—		56.2
Cash Dividends Paid		(101.2	)		—			—		(101.2	)
Principal Payments on Long-Term Debt		112.6			—			—		112.6
Net Borrowings from Short-Term Debt		2.9			—			—		2.9
Capital Contributions from RACI Holding, Inc.		4.5			—			—		4.5
Decrease Book Overdraft		(8.9	)		—			—		(8.9	)
Debt Issuance Costs		(11.6	)		—			—		(11.6	)
Net Cash Provided by Financing Activities		54.5			—			—		54.5
Decrease in Cash and Cash Equivalents		0.6			—			—		0.5
Cash and Cash Equivalents at Beginning of Period		0.3			0.1			—		0.4
Cash and Cash Equivalents at End of Period	$	0.9		$	—		$	—	$	0.9

Net cash used in investing activities for the three months ended March 31, 2009 was $3.1 million and $49.6 million in the three months ended March 31, 2008. The $46.5 million decrease in cash used in investing activities was primarily related to the $46.6 million payment in 2008 for the purchase of Marlin, net of cash acquired.

21 Net cash used in financing activities for the three months ended March 31, 2009 was $1.1 million compared to net cash provided by financing activities of $44.9 million during the three months ended March 31, 2008. The $46.0 million decrease in net cash provided by financing activities for the three months ended March 31, 2009 compared to the three months ended March 31, 2008 primarily resulted from $28.8 million in lower net borrowings on the revolving credit facility, as well as an $18.2 million cash contribution from FGI, paid through Holding, to fund the Marlin Acquisition, received in the first three months ended March 31, 2008.

~~Table~~Dividend ~~of Contents~~Policy

~~NOTES~~ The TOdeclaration ~~CONSOLIDATED~~and ~~FINANCIAL~~payment ~~STATEMENTS~~of dividends, if any, will be at the sole discretion of our Board of Directors, subject to the restrictions set forth in the Amended and Restated Credit Agreement and the Indenture, which currently restrict the payment of dividends by us to Holding. We expect to make future dividend payments to Holding based on available cash flows as and to the extent permitted by the Amended and Restated Credit Agreement and the Indenture. There were no dividends paid for the three months ended March 31, 2009 or 2008. At present, we do not have the ability to make any dividend payments due to restrictions placed upon us by the Amended and Restated Credit Agreement and the Indenture.

~~(Dollars~~Capital inExpenditures ~~Millions, Except Per Share Amounts) - Unaudited~~

~~Note~~ Gross 15capital -expenditures ~~Recent~~were ~~Accounting~~$1.9 ~~Pronouncements~~million and $2.1 million for the three months ended March 31, 2009 and 2008, respectively, consisting primarily of capital expenditures related to restructuring and maintenance of the existing facilities. We expect capital expenditures for 2009 to be in a range of $16.0 million to $20.0 million. Per the

In May 2004, the FASB issued Financial Staff Position (FSP) SFAS No. 106-2 “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (the “Act”), which is effective as of the first interim period beginning after June 15, 2004. On December 8, 2003, President Bush signed into law the Act, which introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to that provided under the Act. FSP SFAS No. 106-2 supersedes FSP FAS 106-1, and clarifies accounting guidance for the Act’s subsidy provisions given to health care plan sponsors who provide specified levels of postretirement healthcare benefits. Management has assessed the impact of the Act on Remington’s consolidated financial condition and consolidated results of operations and does not believe it will have any material impact. 25

22terms of the Third Amendment to our Amended and Restated Credit Agreement, capital expenditures may not exceed $15.0 million during any fiscal year plus unused carryovers from previous years. For 2009, allowable capital expenditures are approximately $31.4 million.

~~Table~~Results of ~~Contents~~Operations for the Three Month Period Ended March 31, 2009 as Compared to the Three Month Period Ended March 31, 2008

~~Item~~ Net 2Sales. ~~Management’s~~The ~~Discussion~~following ~~and~~tables ~~Analysis~~compare ofnet ~~Financial~~sales ~~Condition~~by ~~and~~reporting ~~Results~~segment for each of ~~Operations~~the periods indicated:

~~The~~Quarter ~~following~~Ended ~~discussion~~March and analysis should be read in conjunction with the accompanying unaudited interim Consolidated Financial Statements and related notes of Remington and its subsidiaries, RA Brands, L.L.C. and RA Factors Inc., as of and for the quarter ended June 30, 2004, and with the Company’s audited consolidated financial statements as of and for the year ended December 31, ~~2003, on~~ ~~file~~ (Dollars with the Securities and Exchange Commission. The results of operations for the six month period ended June 30, 2004 are not necessarily indicative of results that may be expected for the year ending December 31, 2004, in ~~part due to the seasonality of the Company’s business.~~ Millions)

Management’s Discussion and Analysis of Financial Condition and Results of Operations is separated into the following sections:


	2009			Percent of Total		2008			Percent of Total		$ Increase/ (Decrease)				% Increase/ (Decrease)

Net Sales
Firearms		$	73.4	50.6	%		$	59.0	48.4	%		$	14.4		24.4	%
Ammunition			67.1	46.2				57.8	47.3				9.3		16.1
All Other			4.7	3.2				5.3	4.3				(0.6	)	(11.3	)

Consolidated		$	145.2	100.0	%		$	122.1	100.0	%		$	23.1		18.9	%

~~• Executive Overview.~~ Firearms

• The ~~Business~~increase ~~Outlook~~in net sales of $14.4 million for the quarter ended March 31, 2009 compared to the prior-year period was due primarily to increased sales volumes of certain rifles of $7.8 million, increased sales volumes of certain shotguns of $4.7 million, and increased sales volumes of domestic sourced products of $3.0 million, offset by decreased sales volumes in international sourced products of $1.0 million. We believe the increased sales volumes are due to increased demand from consumers for certain firearms in light of the current political uncertainty, which could result in more stringent legislation with respect to the purchase of firearms.

~~• Liquidity and Capital Resources.~~ Ammunition

• The ~~Results~~increase in net sales of ~~Operations~~$9.3 million for the quarter ended March 31, 2009 over the prior-year period was due primarily to increased sales volumes of certain rimfire, centerfire and pistol and revolver ammunition of $8.9 million, increased components and other sales volumes of $0.9 million, as well as realized price increases of $0.6 million, offset by lower sales volumes of certain shotshell ammunition of $1.1 million. We believe the increased sales volumes are due to increased demand from consumers for certain ammunition in light of the current political uncertainty, which could result in more stringent legislation with respect to the purchase of ammunition.

• All ~~Recent Accounting Pronouncements.~~Other

• The ~~Regulatory~~decrease ~~Developments~~in net sales of $0.6 million for the quarter ended March 31, 2009 over the prior-year period was due primarily to lower clay target sales of $0.7 million, lower powder metal products sales of $0.4 million and lower technology product sales of $0.3 million, offset by higher accessories sales of $0.5 million and sales related to the EOTAC joint venture of $0.3 million.

~~• Information about Forward-Looking Statements.~~26

~~Executive~~ Cost ~~Overview~~of Goods Sold. The table below depicts the cost of goods sold by reporting segment and the percentage of net sales represented by such cost of goods sold:

WeQuarter ~~evaluate~~Ended ~~our~~March ~~business primarily on Adjusted EBITDA results from two core segments~~31, ~~Firearms and Ammunition, with support from our other operating~~ ~~segments,~~ (Dollars ~~primarily~~in ~~Accessories and Clay Targets. As part of this evaluation, we focus on aggressively managing working capital through, among other things, inventory management, cash management, and expense control.~~ Millions)

We focus our core strategy primarily on the hunting and shooting sports marketplace, while evaluating growth opportunities primarily in the hunting, shooting, accessories, law enforcement, government and military areas. We are committed to refining our core businesses and positioning ourselves to take advantage of opportunities to strategically grow the company. As we regularly evaluate our overall business, we look for new products in the previously mentioned areas that compliment our core strategies, which may include direct product sourcing, licensing, acquisitions or other business ventures. Finally, in order to be well positioned for growth, we recognize the need to protect our competitive position with the introduction of new and innovative, high quality, cost effective products to support our customers and consumers.


	2009			Percent of Net Sales		2008			Percent of Net Sales		$ Increase/ (Decrease)				% Increase/ (Decrease)

Cost of Goods Sold
Firearms		$	58.8	80.1	%		$	45.3	76.8	%		$	13.5		29.8	%
Ammunition			42.7	63.6				41.3	71.5				1.4		3.4
All Other			3.2	68.1				6.6	124.5				(3.4	)	(51.5	)

Consolidated		$	104.7	72.1	%		$	93.2	76.3	%		$	11.5		12.3	%

We Firearms ~~have commenced growth initiatives during the second quarter and early third quarter of 2004. These growth initiatives include the following:~~

• The Inincrease ~~June~~in ~~2004,~~cost weof ~~delivered~~goods ~~our~~sold ~~first~~of ~~sales~~$13.5 ofmillion for the ~~Spartan~~quarter ~~Gunworks~~ended ~~product~~March ~~line~~31, ~~our~~2009 ~~new~~over ~~opening~~the ~~price~~prior-year ~~point~~period ~~line~~was primarily related to flow-through cost of ~~break~~goods ~~action~~sold ~~shotguns~~of $8.1 ~~This~~million ~~amounted~~on tohigher ~~approximately~~overall sales volumes, as discussed above; unfavorable product mix of $0.2.5 million ofdriven ~~incremental~~by ~~net~~increased sales volumes ~~dollars~~in tohigher ~~our~~cost ~~operating~~point ~~results~~products; increased ~~for~~manufacturing ~~the~~costs ~~2004~~of ~~periods~~$2.1 ~~presented~~million; ~~herein~~and increased pension and postretirement costs of $0.8 million.

• Ammunition On July 19, 2004, we entered into a ten year agreement with a technology products manufacturer that required the payment of $0.5 million in exchange for the exclusive distribution rights for certain security products within the United States, certain of its territories, and Canada. We expect to sell these security products to the federal agency and law enforcement markets. We anticipate incurring a total of approximately $1.1 million (inclusive of the above mentioned $0.5 million) of expenses associated with the initial launching of the products during the remainder of 2004 for distribution, selling, marketing, administrative, and transaction costs, and will include related financial results in the newly formed Technology Products segment, which is anticipated to be combined with the All Other reporting segment in 2004.

• The Onincrease ~~August~~in cost of goods sold of $1.4, ~~2004~~million for the quarter ended March 31, we2009 ~~entered~~over ~~into~~the aprior-year ~~joint~~period ~~venture~~was ~~agreement~~primarily ~~with~~related ~~ELSAG,~~to ~~Inc~~flow-through cost of goods sold of $4.0 million on higher overall sales volumes, anas ~~unaffiliated~~discussed ~~third~~above; ~~party~~reduced hedging gains, towhich ~~form~~increased ~~Remington~~cost ~~ELSAG~~of ~~Law~~goods ~~Enforcement~~sold ~~Services~~by ~~(RELES)~~$5.2 million ~~RELES~~and ~~will~~increased ~~sell~~pension and ~~service~~postretirement acosts ~~license~~of ~~plate~~$0.3 ~~reading~~million. ~~technology~~These ~~that~~increases iswere ~~expected~~offset toin bepart ~~sold~~by toreduced ~~state~~manufacturing costs of $7.6 million, reflecting commodity cost reductions, and ~~local~~favorable ~~law~~product mix across most product categories of $0.5 million.

23 All Other

~~Table~~ The decrease in cost of ~~Contents~~goods sold of $3.2 million for the quarter ended March 31, 2009 over the prior-year period was due primarily to the $3.1 million write-off of the technology products inventory which occurred in the first quarter of 2008.

~~enforcement~~ Operating ~~agencies along with certain federal agencies~~Expenses. ~~The~~Operating ~~venture~~expenses ~~gives~~consist ~~us a 50% ownership interest. The agreement calls for each member to provide 50%~~ of ~~required~~selling, ~~capital~~general ~~investments~~ and ~~receive 50% of distributions, with a maximum contribution amount of $1.5 million by each party. In addition, we will provide certain~~ administrative ~~support functions~~expense, ~~while~~research ~~ELSAG,~~and ~~Inc.~~development ~~will~~expense ~~provide~~and ~~product~~other ~~technology~~income ~~support.~~and ~~We currently anticipate making equity contributions of approximately $0~~expense.8 ~~million by the end of 2004.~~

Associated with our various growth initiatives, including our core businesses, we have expensed approximately $0.7 million through June 30, 2004.


	For the quarterly periods ended,

	March 31, 2009			March 31, 2008			$ Increase/ (Decrease)			% Increase/ (Decrease)

Operating Expenses
SG&A	$	25.7		$	23.9		$	1.8			7.5	%
R&D		2.1			1.8			0.3			16.7
Other Income		(1.9	)		(0.6	)		(1.3	)		(216.7	)

Consolidated	$	25.9		$	25.1		$	0.8			3.2	%

The ~~sale~~increase ofin ~~firearms~~selling, general and ~~ammunition depends~~administrative ~~upon~~expenses abetween ~~number~~the oftwo ~~factors~~quarterly ~~related~~periods toof ~~the~~$1.8 ~~level~~million ofwas ~~consumer~~primarily ~~spending,~~attributable ~~including~~to ~~the~~higher ~~general~~costs ~~state~~associated ofwith ~~the~~incentive ~~economy~~compensation, salaries and ~~the~~benefits ~~willingness~~ of ~~consumers to spend on discretionary items~~$1.6 ~~Historically~~million, ~~the~~higher ~~general~~travel ~~level~~expense of ~~economic~~$0.5 ~~activity~~million, ~~has significantly~~higher ~~affected~~legal ~~the~~fees ~~demand~~of ~~for~~$0.3 ~~sporting goods products in the firearms~~million, ~~ammunition,~~ and higher ~~related~~marketing ~~markets. As economic activity gains momentum, confidence~~ and ~~discretionary~~market ~~spending~~development byexpenses ~~consumers~~of ~~has historically improved~~$0.3 ~~During the second quarter of 2004~~million, weoffset ~~announced~~by ~~ammunition~~lower ~~and~~professional ~~firearms~~fees ~~price increases on certain~~ of ~~our~~$0.6 ~~products~~million ~~effective May 1, 2004~~ and ~~July~~lower 1,distribution ~~2004,~~expenses ~~respectively.~~of ~~See further discussion in “Business Outlook” below~~$0. 3

Management believes that we have successfully maintained the strength of our brand and our market-leading positions in our primary product categories, and that we remain poised to take advantage of any significant improvement in the demand environment. We have engaged in selective efforts to stimulate demand for our products, through targeted new product introductions and promotions in selected product categories. 27

~~Although~~million. weThe ~~believe~~higher ~~that~~costs ~~regulation~~associated ofwith ~~firearms~~incentive ~~and ammunition~~compensation, salaries and ~~consumer~~benefits ~~concerns~~are ~~about such regulation, have not had a significant adverse influence on~~ the ~~market~~result ~~for~~of ~~our~~establishing ~~firearms~~ and ~~ammunition~~staffing ~~products~~a ~~for~~number ~~the~~of ~~periods~~additional ~~presented~~management ~~herein,~~positions ~~there~~in ~~can~~an beeffort noto add ~~assurance~~depth ~~that~~to the ~~regulation~~existing ofmanagement ~~firearms~~team. ~~and~~The ~~ammunition~~increase ~~will~~in ~~not~~other ~~become~~income ~~more~~was ~~restrictive~~due inprimarily to the ~~future~~recognition orof ~~that~~a ~~any~~gain ~~such~~related ~~development~~to ~~would~~a ~~not adversely~~federal ~~affect~~excise ~~these~~tax ~~markets~~audit settlement.

~~Business~~ Interest ~~Outlook~~Expense. Interest expense for the quarter ended March 31, 2009 was $6.0 million, unchanged as compared to the first quarter of 2008. Changes within interest expense from the same period in 2008 consisted of lower interest expense of approximately $0.3 million for the Term Loan primarily due to a lower average interest rate of 2.57% in the first quarter of 2009 compared to 6.53% in the first quarter of 2008, offset by higher interest expense of $0.2 million as the result of higher average outstanding borrowings ($39.3 million) as compared to the same period in 2008 under the Amended and Restated Credit Agreement, as well lower interest income of $0.1 million in 2009 compared to the same period in 2008.

~~General~~ Taxes. Our effective tax rate on continuing operations for the three months ended March 31, 2009 and 2008 was 36.8% and 36.4%, respectively. The difference between the actual effective tax rate and the federal statutory rate of 35% is principally due to state income taxes, permanent differences, and tax credit usage for quarters ended March ~~Economy~~ 31, 2009 and 2008.

~~The~~Recent ~~general~~Accounting economic environment appears to be gaining momentum, as a result of improving consumer spending, offset by the level of unemployment and inflationary pressures from higher energy costs. We also note that on June 30, 2004, the Federal Open Market Committee met and raised interest rates by 0.25%, the first such move in over one year. Management notes that a rising interest rate environment as well as uncertainty surrounding the upcoming United States government elections could have a potentially adverse impact on consumer spending. Our business is also affected by the rising commodity prices for raw materials such as copper, lead, and steel that have been experienced during 2004. See Item 3 “Quantitative and Qualitative Disclosures About Market Risk.” Accordingly, the uncertain and volatile nature of the current economic and geopolitical environment makes it difficult to forecast whether these trends will continue. Pronouncements

~~Industry~~ In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP SFAS 157-4”). FSP SFAS 157-4 provides guidelines for making fair value measurements more consistent with the principles presented in SFAS 157, Fair Value Measurements. FSP SFAS 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what SFAS 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive. FSP SFAS 157-4 is effective for interim and annual periods ending after June 15, 2009. We are currently evaluating the impact that adopting FSP SFAS 157-4 will have on our results of operations, financial condition and equity.

~~According~~ In toApril 2009, the ~~American~~FASB ~~Sports~~issued ~~Data~~FSP SFAS 107-1 and APB 28-1, ~~Inc.~~Interim Disclosures about Fair Value of Financial Instruments (“~~ASDI~~FSP SFAS 107-1”). ~~Superstudy~~FSP ofSFAS ~~Sports~~107-1 ~~Participation~~enhances ~~for~~consistency in financial reporting by increasing the ~~year~~frequency ~~2003,~~of ~~approximately~~fair 31value ~~million~~disclosures. ~~people~~FSP inSFAS 107-1 relates to fair value disclosures for any financial instruments that are not currently reflected on the ~~United~~balance ~~States~~sheet ~~enjoyed~~of ~~shooting~~companies ~~sports~~at fair value. WePrior ~~believe~~to ~~that~~issuing ~~the~~FSP ~~hunting~~SFAS ~~and~~107-1, ~~shooting~~fair ~~sports~~values ~~industry~~for isthese ~~stable~~assets and ~~mature~~liabilities were only disclosed once a year. ~~According~~FSP toSFAS ~~the~~107-1 ~~National~~now ~~Sporting~~requires ~~Goods~~these ~~Association~~disclosures ~~(“NSGA”)~~on a quarterly basis, ~~total~~providing ~~U.S.~~qualitative ~~consumer~~and ~~expenditures~~quantitative information about fair value estimates for all those financial instruments not measured on the ~~shooting sports~~balance ~~industry~~sheet inat ~~2003~~fair ~~were~~value. ~~approximately~~FSP $SFAS 107-1.9 ~~billion,~~is ~~comprised~~effective offor ~~expenditures~~interim onand ~~shotguns~~annual ~~(approximately~~periods ending ~~$480~~after ~~million)~~June 15, ~~rifles~~2009. ~~(approximately~~We ~~$550~~are ~~million)~~currently ~~and~~evaluating ~~ammunition~~the ~~(approximately~~impact ~~$820~~that ~~million).~~adopting FSP SFAS 107-1 will have on our results of operations, financial condition and equity.

~~The~~ In ~~consumer~~April ~~products~~2009, ~~environment~~the ~~appears~~FASB toissued beFSP ~~gaining~~SFAS ~~momentum~~115-2 ~~based~~and ~~upon the~~SFAS ~~previously~~124-2, ~~mentioned~~Recognition ~~improved~~and ~~consumer~~Presentation ~~spending,~~of ~~offset~~Other-Than-Temporary byImpairments ~~the~~(“FSP ~~level~~SFAS ~~of unemployment~~115-2”), ~~inflationary~~provides ~~pressures~~additional ~~from~~guidance ~~higher~~designed ~~energy~~to ~~costs,~~create greater clarity and ~~cooler~~consistency ~~weather~~in ~~with~~accounting ~~higher~~for ~~rainfall~~and inpresenting ~~the~~impairment ~~second~~losses ~~quarter~~on ~~versus~~securities. ~~the~~FSP ~~same~~SFAS ~~time~~115-2 ~~one~~on other-than-temporary ~~year~~impairments ~~ago.~~is ~~Management believes~~intended ~~that~~to bring greater consistency to the ~~demand~~timing ~~for~~of ~~firearms~~impairment recognition, and ~~ammunition~~provide ~~products~~greater ~~depends~~clarity onto ainvestors ~~number~~about the credit and noncredit components of ~~factors,~~impaired ~~including~~debt ~~the~~securities ~~general~~that ~~state~~are ofnot ~~the~~expected ~~economy~~to ~~and~~be ~~the~~sold. ~~consumer~~The ~~products~~measure ~~environment,~~of ~~which~~impairment in ~~turn~~comprehensive ~~may~~income beremains ~~impacted~~fair value. FSP SFAS 115-2 also requires increased and more timely disclosures sought by ~~geopolitical~~investors orregarding ~~other~~expected ~~world~~cash ~~events.~~flows, ~~The uncertain~~credit losses, and ~~volatile~~an ~~nature~~aging of securities ~~the~~with ~~current~~unrealized ~~economic~~losses. FSP SFAS 115-2 is effective for interim and ~~geopolitical~~annual ~~environment,~~periods asending ~~well~~after asJune ~~the~~15, ~~uncertainty~~2009. ~~surrounding~~We ~~the~~are ~~outcome~~currently ofevaluating the ~~United~~impact ~~States~~that ~~government~~adopting ~~elections,~~FSP ~~makes~~SFAS it115-2 ~~difficult~~will tohave ~~forecast~~on ~~whether~~our ~~this~~results ~~trend~~of ~~will~~operations, ~~continue~~financial condition and equity.

24 28

~~Table~~Recently ofAdopted ~~Contents~~Accounting Pronouncements

Accounting pronouncements adopted by Remington in the first quarter of 2009 are as follows:

~~Management~~ In ~~currently~~December ~~expects~~2007, ~~gradual~~the ~~improvement~~FASB inissued ~~general~~SFAS ~~conditions~~No. in160, ~~the~~Noncontrolling ~~markets~~Interests in ~~which~~Consolidated weFinancial ~~operate,~~ Statements ~~and~~(“SFAS ~~believes~~160”). ~~that~~This ~~the~~standard is ~~modest~~intended ~~improvement~~to improve, insimplify, ~~the US~~and ~~economy~~converge ~~beginning~~internationally in the ~~fourth~~reporting ~~quarter~~ of ~~2003,~~noncontrolling ~~combined~~interests ~~with~~in ~~the~~consolidated ~~preliminary~~financial ~~indications~~statements. ~~that~~SFAS ~~some~~160 ~~customers~~requires ~~are~~all ~~experiencing~~entities ~~improved~~to ~~sales~~report ~~levels,~~noncontrolling ~~may~~(minority)interests ~~signal~~in ansubsidiaries ~~increase~~ in ~~demand~~the ~~for~~same ~~our~~way ~~products~~as ~~that~~equity ~~could~~in ~~continue~~the ~~throughout~~consolidated ~~2004~~financial statements. ~~However~~Moreover, ~~management~~ ~~notes~~SFAS ~~that~~160 ~~there~~requires ~~can~~that betransactions nobetween ~~assurance~~an asentity toand ~~the~~noncontrolling ~~increased~~interests ~~demand,~~be ~~particularly~~treated as inequity ~~light~~transactions. ofSFAS ~~the~~160 ~~uncertainty~~is ~~surrounding~~effective ~~consumer~~for ~~spending~~fiscal ~~levels,~~years ~~the~~beginning ~~interest~~after ~~rate~~December ~~environment~~15, 2008 and, ~~the~~consequently, ~~outcome~~was ofimplemented ~~the~~by ~~upcoming~~Remington ~~United~~on ~~States~~January ~~government elections.~~1, 2009.

We In ~~have~~March ~~initiated~~2008, ~~growth~~the ~~initiatives~~FASB ~~during~~issued ~~the second~~SFAS ~~quarter~~No. 161, Disclosures about Derivative Instruments and ~~early~~Hedging ~~third~~Activities ~~quarter~~(“SFAS ~~associated~~161”). ~~with~~The ~~Spartan~~new ~~Gunworks,~~standard ~~the~~is ~~previously~~intended ~~mentioned~~to ~~exclusive~~improve ~~distribution~~financial ~~agreement~~reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. The new standard is also intended to improve transparency about the ~~previously~~location ~~mentioned~~and ~~joint~~amounts ~~venture~~of ~~agreement~~derivative instruments in an entity’s financial statements; how derivative instruments and related hedged items are accounted for under SFAS 133; and how derivative instruments and related hedged items affect its financial position, ~~respectively~~financial performance, and cash flows. ~~See~~SFAS ~~further~~161 ~~discussion~~requires ~~above~~disclosure of the fair values of derivative instruments and their gains and losses in ~~“Executive~~a tabular format. It also provides more information about an entity’s liquidity by requiring disclosure of derivative features that are credit risk–related and requires cross-referencing within footnotes to enable financial statement users to locate important information about derivative instruments. SFAS 161 was effective for financial statements issued for fiscal years and interim periods beginning after ~~Overview~~ November 15, 2008 and, consequently, was implemented by Remington on January 1, 2009.”

WeEnvironmental ~~continue~~Matters ~~to believe that our pension expense for the 2004 full year will be about $4.6 million higher than 2003 and our cash contributions will be $1.2 higher than 2003.~~

We The ~~expect~~Marlin ~~our~~Acquisition ~~effective~~triggered ~~tax~~the ~~rate~~Connecticut ~~for~~Transfer Act (the ~~full~~“Act”) ~~year~~with respect to bethe ~~about~~facility ~~40%~~located in North Haven, Connecticut. The Act is designed to identify properties contaminated with hazardous wastes and to ensure that such properties are cleaned up to the satisfaction of the Connecticut Department of Environmental Protection (“DEP”). Under the Act, Marlin is required to investigate areas of environmental concern at the North Haven facility and to clean up contamination exceeding state standards to the satisfaction of the DEP. The investigation of the North Haven facility is ongoing. Remediation costs may be incurred, but such costs at this time are not expected to be material.

~~Seasonality~~ Marlin is also conducting remediation of oil-related contamination at a former Marlin facility in New Haven, Connecticut. Costs for the New Haven remediation are not expected to be material.

WeRegulatory ~~produce~~Developments and market a broad range of firearms and ammunition products. Several models of our shotguns and several types of ammunition are intended for target shooting, as well as government, military, and law enforcement applications, sales of which generally also occur in the “off season.” The majority of our firearms and ammunition products, however, are manufactured for hunting use. As a result, the majority of the sales of our products are seasonal and concentrated toward the fall hunting season. We follow the industry practice of selling firearms pursuant to a “dating” plan allowing the customer to buy the products commencing at the beginning of our dating plan periods and pay for them on extended terms. As a competitive measure, we also offer extended payment terms on select ammunition categories. We believe that these dating plans have partially offset the seasonality of the Company’s business.

As The amanufacture, ~~result~~sale and purchase of ~~the seasonal~~firearms ~~nature~~are ofsubject ~~our~~to ~~sales~~extensive federal, state and ~~the~~local ~~extended~~governmental ~~payment~~regulation. ~~terms~~The ~~under~~primary ~~our~~federal ~~dating~~laws ~~plan~~are ~~billing~~the ~~practices~~National Firearms Act of 1934 (“NFA”), ~~our~~the ~~working~~Gun ~~capital~~Control ~~financing~~Act ~~needs~~of ~~generally~~1968 (“GCA”) and the Arms Export Control Act of 1976 (“AECA”), which have ~~significantly~~been ~~exceeded~~amended ~~cash~~from ~~provided~~time byto time. ~~operations~~The ~~during~~NFA severely restricts the ~~middle~~private ownership of athose ~~year~~firearms defined in that regulation, ~~until~~including ~~certain~~fully automatic weapons. We manufacture limited NFA products, none of ~~our~~ ~~extended~~which ~~accounts~~are ~~receivable~~fully ~~were~~automatic ~~collected~~weapons, inprimarily ~~the~~for ~~third~~official ~~quarter~~end users. AsThe aGCA ~~result~~places certain restrictions on the interstate sale of firearms, ~~our~~among ~~working~~other ~~capital~~things. ~~financing~~The ~~needs~~AECA ~~tend~~requires approved licenses to be ~~greatest~~in ~~during~~place ~~the~~prior ~~late~~to ~~winter~~importing ~~and~~or ~~early~~exporting ~~summer~~certain ~~months~~firearms, ~~decreasing~~ammunition ~~during~~and explosives. We cannot guarantee that the ~~fall~~administrative ~~and~~branches ~~reaching~~responsible ~~their~~for ~~lowest~~approving ~~point during~~those ~~the~~licenses ~~early~~will ~~winter~~do so in all cases. We possess valid federal licenses and registrations for all of our owned and leased sites to manufacture and/or sell firearms and ammunition.

~~Liquidity~~ In September 2004, the United States Congress declined to renew the Federal Assault Weapons Ban of 1994 which generally prohibited the manufacture of certain firearms defined under that statute as “assault weapons” as well as the sale or possession of “assault weapons” except for those that, prior to the law’s enactment, were legally in the owner’s possession. Various states and ~~Capital~~local ~~Resources~~jurisdictions have adopted their own version of that former federal law and some laws and regulations at the state and local levels do apply to certain Remington

~~Overview~~ 29

Wesporting ~~have~~firearms historically funded expenditures for operations, administrative expenses, capital expenditures, debt service obligations and dividend payments with internally generated funds from operations, with working capital needs being satisfied from time to time with borrowings under our Credit Facilityproducts. We ~~believe~~cannot guarantee that wean ~~will~~“assault beweapons” ~~able~~ban similar to ~~meet our debt service obligations and fund our operating requirements in~~ the ~~future~~Federal ~~with~~Assault ~~cash~~Weapons ~~flow~~Ban ~~from operations and borrowings under our Credit Facility prior to the maturity~~ of ~~the Credit Facility~~1994, ~~although~~or noversion ~~assurance can be given in this regard. We continue to focus on working capital management~~thereof, ~~including~~will ~~the~~not ~~collection~~be ~~of accounts receivable, managing inventory levels to keep them in line with sales projections and management of accounts payable~~re-enacted.

~~Liquidity~~ Bills have been introduced in Congress to establish, and to consider the feasibility of establishing, a nationwide database recording so-called “ballistic images” of ammunition fired from new guns. Should such a mandatory database be established, the cost to Remington and its customers could be significant, depending on the type of firearms and ballistic information included in the database. To date, only two states have established such registries, and neither state includes such “imaging” data from long guns, although there can be no assurance that these (or other states) will not require the inclusion of such imaging in the future. Proposed legislation in at least one other state would be applicable to Remington rifles, and would call for “imaging” of both cartridges and projectiles. In addition, bills have been introduced in Congress in the past several years that would affect the manufacture and sale of handgun ammunition, including bills to regulate the manufacture, importation and sale of any projectile that is capable of penetrating body armor, to impose a tax and import controls on bullets designed to penetrate bullet-proof vests, to prohibit the manufacture, transfer or importation of .25 caliber, .32 caliber and 9mm handgun ammunition, to increase the tax on handgun ammunition, to impose a special occupational tax and registration requirements on manufacturers of handgun ammunition, and to dramatically increase the tax on certain handgun ammunition, such as 9mm, .25 caliber, and .32 caliber bullets. Some of these bills would apply to ammunition of the kind we produce, and accordingly, if enacted, could have a material adverse effect on our business.

As In ofaddition ~~June~~to ~~30,~~federal ~~2004~~requirements, westate ~~had~~and ~~outstanding~~local ~~$239~~laws and regulations may place additional restrictions or prohibitions on gun ownership and transfer.6 ~~million~~These ofvary ~~indebtedness,~~significantly ~~consisting~~from jurisdiction to jurisdiction. At least one jurisdiction bans the possession of ~~approximately~~a ~~$200~~firearm altogether.0 ~~million~~Some ~~(face~~states or other governmental entities have recently enacted, and ~~amount)~~ others ofare considering, legislation restricting or prohibiting the ~~Notes~~ownership, ~~$37~~use or sale of certain categories of firearms and/or ammunition.5 ~~million~~Although innumerous ~~revolving~~jurisdictions ~~credit~~presently ~~borrowings~~have ~~under~~mandatory waiting periods for the ~~Credit~~sale ~~Facility,~~of ~~$1.2~~handguns ~~million~~(and insome ~~capital~~for ~~lease~~the ~~obligations~~sale of long guns as well), ~~and~~there aare ~~$0.9~~currently ~~million~~few ~~note~~restrictive ~~payable~~state or municipal regulations applicable to ~~Holding~~handgun ammunition. AsRemington offirearms ~~June~~are ~~30,~~covered ~~2004,~~under weseveral ~~also~~recently ~~had~~enacted ~~aggregate~~state ~~letters~~regulations ofrequiring ~~credit~~guns to ~~outstanding~~ be sold with internal or external locking mechanisms. Some states are considering mandating certain design features on safety grounds, most of $4which would be applicable only to handguns.3 ~~million~~We believe that hunter safety issues may affect sales of firearms, ammunition and other shooting-related products.

25 Remington is no longer a defendant in any lawsuits brought by municipalities against participants in the firearms industry. In addition, legislation has been enacted in approximately 34 states precluding such actions. Similar federal legislation, entitled “The Protection of Lawful Commerce in Arms Act” was signed into law in October 2005. However, the applicability of the law to various types of governmental and private lawsuits has been challenged.

~~Table~~ We believe that existing federal and state regulation regarding firearms and ammunition has not had a material adverse effect on our sales of ~~Contents~~these products to date. However, there can be no assurance that federal, state, local or foreign regulation of firearms and/or ammunition will not become more restrictive in the future and that any such development would not have a material adverse effect on our business either directly or by placing additional burdens on those who distribute and sell our products or those consumers who purchase our products.

~~Our~~Information ~~Credit~~Concerning ~~Facility~~Forward-Looking ~~provides~~Statements for aggregate borrowings of up to $125 million, subject to borrowing base and other limitations, under a revolving credit facility through January 23, 2008. As of June 30, 2004 approximately $53.2 million in additional borrowings were available as determined pursuant to the Credit Facility, as amended through February 9, 2004. At present, the principal sources of liquidity for our business and operating needs continue to be internally generated funds from operations and borrowings under the Credit Facility. We believe that we will be able to meet our debt service obligations and fund our operating requirements with cash flow from operations and borrowings under the Credit Facility, although no assurance can be given in this regard. We also evaluate on a regular basis whether or not we will be able to have the ability to pay prospective dividends to Holding, subject to the restrictions and covenants imposed upon us by our Credit Facility and the indenture for the Notes. In addition, we continue to focus on aggressively managing working capital through, among other things, inventory management, cash management, and expense control.

We This ~~expect~~Management’s toDiscussion ~~contribute~~and ~~approximately~~Analysis ~~$6.4~~of ~~million~~Financial toCondition ~~plan~~and ~~assets~~Results ~~under~~of ~~our~~Operations ~~defined~~contains statements which constitute forward-~~benefits~~looking ~~pension~~statements ~~plan~~within ~~during~~the ~~2004.~~meaning Asof the Private Securities Litigation Reform Act of ~~June~~1995, 30including statements relating to trends in the operations and financial results and the business and the products of Remington, ~~2004~~as well as other statements including words such as “anticipate,” we“believe,” ~~had~~“plan,” ~~paid~~“estimate,” ~~$2.7~~“expect,” ~~million~~“intend” inand ~~contributions.~~other similar expressions.

In Forward-looking ~~addition,~~statements asare ~~previously~~made ~~mentioned,~~based weupon ~~anticipate~~management’s ~~incurring~~current aexpectations ~~total~~and ofbeliefs $1concerning future developments and their potential effects on Remington.~~1 million~~ inSuch ~~costs~~forward-looking ~~for~~statements ~~the~~are ~~remainder~~not guarantees of ~~the~~future ~~year~~performance. ~~associated~~The ~~with~~following ~~the~~important ~~exclusive~~factors, ~~distribution~~and ~~agreement~~those ~~signed~~important factors described elsewhere in ~~July,~~this asquarterly ~~well~~report asand in anour ~~additional~~other ~~$0.8~~SEC ~~million~~filings, ~~investment~~including ~~associated~~our ~~with~~Annual Report on Form 10-K for the ~~joint~~year ~~venture~~ended ~~agreement~~December ~~signed~~31, 2008 under Item 1A, “Risk Factors”, could affect (and in ~~August.~~some cases have affected) our actual results

We evaluate on a regular basis whether or not we will be able to have the ability to pay prospective dividends to Holding, subject to the restrictions and covenants imposed upon us by our Credit Facility and the indenture for the Notes. See “Dividend Policy.” 30

~~As a result of the sale of our fishing line business on February 9, 2004, we applied $43.0 million in initial cash proceeds amount,~~ and oncould ~~May~~cause ~~12,~~such ~~2004,~~results weto ~~applied~~differ anmaterially ~~additional $1.0 million in proceeds released~~ from ~~escrow,~~estimates inor ~~each~~expectations ~~case~~reflected against our outstanding Credit Facility balances at those times. We expect to make the necessary tax payments related to the sale consistent with our normal quarterly schedule. The gain that was recorded in ~~the~~such first half of 2004 on the sale of discontinued operations was approximately $13.5 million, net of income taxes. The gain of approximately $13.5 million reflects the release of the $1.0 million escrow amount and adjustments to the estimates of costs associated with the sale based on remaining obligations with respect to the sale as of June 30, 2004. Our afterforward-~~tax~~looking ~~proceeds on the transaction were approximately $29~~statements.~~0 million.~~

~~The indenture~~• ~~for~~We are subject to the ~~Notes~~effects ~~requires~~of usgeneral toglobal ~~apply~~economic ~~the~~and ~~net~~market ~~cash~~conditions. ~~proceeds~~Increases in commodity prices, higher levels of ~~certain~~unemployment, ~~asset~~higher ~~sales~~consumer debt levels, declines in ~~properties~~consumer confidence, uncertainty about economic stability and ~~assets~~other economic factors that ~~replace~~may affect consumer spending or buying habits could adversely affect the ~~properties~~demand ~~and~~for ~~assets~~products ~~that~~we ~~were~~sell. If the ~~subject~~current ofeconomic conditions and the ~~Asset~~related ~~Sale~~factors remain uncertain or inpersist, ~~properties~~spread ~~and~~or ~~assets~~deteriorate ~~that~~further, ~~will~~our business, results of operations or financial condition could be ~~used~~materially adversely affected. • Continued volatility and disruption in the ~~businesses~~ credit and capital markets as a result of the ~~Company~~global financial crisis may negatively impact our revenues and our, or ~~its~~our ~~Subsidiaries~~suppliers’ ~~within~~or ~~365~~customers’, ~~days~~ability ~~after~~to ~~the~~access ~~date~~financing on favorable terms or at all. • Our ability to make scheduled payments of principal or interest on, or to refinance our obligations with respect to, our indebtedness, as well as our ability to comply with the covenants and restrictions contained in the instruments governing such ~~asset~~indebtedness, ~~sale~~will depend on our future operating performance and cash flow, which are subject to prevailing economic conditions, prevailing interest rate levels, and financial, competitive, business and other factors beyond our control, including the responses of competitors, changes in customer inventory management practices, changes in customer buying patterns, regulatory developments and increased operating costs. • The degree to which we are leveraged could have important consequences, including the following: (i) our ability to obtain additional financing for working capital or other purposes in the ~~case~~future may be limited; (ii) a substantial portion of our cash flow from operations is dedicated to the ~~sale~~payment of principal and interest on our indebtedness, thereby reducing funds available for operations; (iii) certain of our borrowings are at variable rates of interest, which could cause us to be vulnerable to increases in interest rates; and (iv) we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures. • Our ability to meet our debt service and other obligations depends in significant part on customers purchasing our products during the ~~fishing~~fall ~~line~~hunting ~~business~~season. Notwithstanding our cost containment initiatives and continuing management of costs, a decrease in demand during the fall hunting season for our higher priced, higher margin products would require us to further reduce costs or increase our reliance on ~~February~~borrowings 9under our credit facility to fund operations. If we are unable to reduce costs or increase our borrowings sufficiently to adjust to such a reduction in demand, ~~2005~~our financial condition and results of operations could be adversely affected. • Lead, copper, steel and zinc prices have experienced significant increases over the past five years primarily due to increased demand (including increased demand from India and China). ~~Any~~Furthermore, ~~uninvested~~fuel ~~amount~~and ~~must~~energy costs have increased over the same time period, although at a slower rate of increase. We currently purchase copper and lead options contracts to hedge against price fluctuations of anticipated commodity purchases. With the volatility of pricing that we have recently experienced, there can be ~~used~~no assurance that we will not see further material adverse changes in commodity pricing or energy costs, and such further changes, were they to ~~permanently~~occur, ~~repay~~could have a material adverse impact on our ~~senior~~consolidated ~~debt~~financial position, results of operations, or cash. • Because of the nature of our products, we anticipate that we will continue to be involved in ~~accordance~~ ~~with~~product liability litigation in the ~~terms~~future. Our ability to meet our product liability obligations will depend (among other things) upon the availability of insurance, the ~~indenture~~adequacy ~~for~~of our accruals, the ~~Notes~~1993 Sellers’ ability to satisfy their obligations to indemnify us against certain product liability cases and claims and the ~~Credit~~1993 ~~Facility~~Sellers’ agreement to be responsible for certain post-Asset Purchase shotgun related costs. • Achieving the benefits of our acquisitions will depend in part on the integration of products and internal operating systems in a timely and efficient manner. Such integration may be unpredictable, and subject to delay because the products and systems typically were developed independently and were designed without regard to

As previously discussed, our continuing efforts to strategically grow the company may result in direct product sourcing, licensing, acquisitions or other business ventures, financing for which could be utilized from the capacity made available under our Credit Facility as a result of the sale of the fishing line business, to the extent permitted under the indenture for our Notes. See growth initiatives discussion in the “Executive Overview” section. 31

~~10½~~such integration. If we cannot successfully integrate such products and internal operating systems on a timely basis, we may lose customers and our business and results of operations may be harmed. • We face significant competition and our competitors vary according to product line. Certain of these competitors are subsidiaries of large corporations with substantially greater financial resources than us. There can be no assurance that we will continue to compete effectively with all of our present competition, and our ability to so compete could be adversely affected by our leveraged condition. • Sales made to Wal-Mart accounted for approximately 18% ~~Senior~~of ~~Notes~~our ~~due~~total ~~2011~~net revenues in 2008 and 15% of the accounts receivable balance as of December 31, 2008. Our sales to Wal-Mart are generally not governed by a written contract between the parties. In the event that Wal-Mart were to significantly reduce or terminate its purchases of firearms and/or ammunition from us, our financial condition or results of operations could be adversely affected. • We utilize numerous raw materials, including steel, zinc, lead, brass, plastics and wood, as well as manufactured parts, which are purchased from one or a few suppliers. Any disruption in our relationship with these suppliers could increase the cost of operations. Such a disruption may result from or be amplified by the recent volatility of and uncertainty in the U.S. and global financial markets. • The purchase of firearms is subject to federal, state and local governmental regulation. Regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. While we do not believe that existing federal and state legislation relating to the regulation of firearms and ammunition has had a material adverse effect on our sales from 2004 through 2008, no assurance can be given that more restrictive regulations, if proposed or enacted, will not have a material adverse effect on us in the future. • As a manufacturer of firearms, we were previously named as a defendant in certain lawsuits brought by municipalities or organizations challenging manufacturers’ distribution practices and alleging that the defendants have also failed to include a variety of safety devices in their firearms. Our insurance excludes coverage regarding such claims. In the event that additional such lawsuits were filed, or if certain legal theories advanced by plaintiffs were to be generally accepted by the courts, our financial condition and results of operations could be adversely affected. • As part of our annual impairment testing conducted with outside valuation experts under SFAS 144 and SFAS 142, we recorded non-cash impairment charges related to goodwill of $44.3 million and certain trademarks of $3.1 million for the year ended December 31, 2008. The charge eliminated the goodwill amounts from both our Firearms and All Other reporting segments. Our future results of operations may be impacted by the prolonged weakness in the current economic environment which may result in an impairment of any goodwill recorded in the future and/or other long-lived assets, which could adversely affect our results of operations or financial condition. • As a result of recent changes in our management, there may be an adjustment period which could cause inefficiencies in the execution of our business and our operations. • The uncertainty surrounding the current political environment, which we believe has resulted in increased demand for our products and has made it difficult to accurately forecast our requirements, may adversely affect our results of operations.

~~The~~ Any ~~Notes~~forward-looking ~~were~~statement ~~initially~~speaks ~~issued~~only onas ~~January~~of ~~24,~~the ~~2003~~date inon anwhich ~~aggregate principal~~it ~~amount~~is ofmade, ~~$200.0~~and ~~million.~~we ~~The~~undertake ~~Notes~~no ~~are~~obligation ~~senior~~to ~~unsecured~~update ~~obligations~~any offorward-looking ~~Remington~~statement ~~guaranteed~~to byreflect ~~each~~events ofor ~~our~~circumstances ~~existing~~after ~~domestic~~the ~~subsidiaries.~~date ~~The~~on ~~indenture~~which ~~for~~ the ~~Notes~~statement ~~contains~~is ~~restrictive~~made ~~covenants~~or ~~that,~~to ~~among~~reflect ~~other~~the ~~things,~~occurrence ~~limit~~of ~~the incurrence~~unanticipated ofevents. ~~debt~~Except as required by ~~Remington~~law, ~~and~~we ~~its~~undertake ~~subsidiaries,~~no ~~the~~obligation ~~payment~~to ofpublicly ~~dividends~~revise our forward-looking statements to ~~Holding,~~reflect ~~the~~events ~~use~~or ofcircumstances ~~proceeds~~that ofarise ~~specified~~after ~~asset~~the ~~sales~~date ~~and~~of ~~transactions~~this ~~with~~quarterly ~~affiliates~~report.

26 32

~~Table~~Item of3. ~~Contents~~Quantitative and Qualitative Disclosures About Market Risk

~~Credit~~ We ~~Facility~~are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities and our ongoing investing and financing activities. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the use of financial instruments to manage exposure to such risks.

~~Our~~ Certain ~~Credit~~of ~~Facility,~~our asfinancial ~~amended,~~instruments ~~provides~~are upsubject to ~~$125~~interest rate risk.0 ~~million~~As of ~~borrowings~~March ~~under~~31, an2009, ~~asset~~we had long-~~based~~term ~~senior~~borrowings ~~secured~~of ~~revolving~~$267.7 ~~credit~~million ~~facility~~($251.9 ~~through January~~million 23at March 31, 2008), excluding $6.7 ~~Amounts~~million ~~available~~($6.3 ~~under~~million at March 31, 2008) classified as the ~~Credit~~current ~~Facility~~portion ~~are~~of ~~subject~~long-term todebt, aof ~~borrowing~~which ~~base~~$64.8 ~~limitation~~million ~~based~~($48.1 onmillion ~~certain~~at ~~percentages~~March of31, ~~eligible~~2008) ~~accounts~~was ~~receivable~~issued ~~and~~at variable ~~eligible~~rates. ~~inventory~~Assuming ~~and~~no anchanges ~~amortizing~~in ~~balance~~the ~~related~~$78.5 tomillion ~~eligible~~of ~~machinery~~monthly ~~and equipment~~average ~~and~~variable-rate ~~other~~debt ~~limitations~~levels from the latest twelve months ended March 31, 2009 ($46.9 ~~The~~million ~~Credit~~at ~~Facility~~March ~~also~~31, ~~includes~~2008), we estimate that a ~~letter~~hypothetical change of ~~credit~~100 ~~sub-facility~~basis ofpoints upin tothe LIBOR and Alternate Base Rate interest rates would impact interest expense by $150.8 million ($0.5 million at March 31, 2008) on an annualized pretax basis. We were not a party to any interest rate cap or other protection arrangements with respect to our variable rate indebtedness as of March 31, 2009 or 2008.

As The aCompany ~~result~~purchases copper and lead (and zinc in 2008) options contracts intended to hedge against price fluctuations of ~~our~~anticipated ~~financial~~commodity ~~performance~~purchases. Lead, copper and zinc prices have experienced significant increases over the ~~Credit~~past ~~Facility~~five ~~was~~years ~~amended~~primarily ondue ~~two~~to ~~separate~~increased ~~occasions~~demand ~~during~~(including ~~2003~~increased demand from China). ~~These~~The ~~amendments~~amounts ~~limit~~of ~~our~~premiums ~~borrowing~~paid for ~~capacity~~ commodity bycontracts ~~creating~~outstanding aat ~~minimum~~March ~~availability~~31, ~~restriction~~2009 ~~through~~were $4.7 million, which was $4.7 million lower than in 2008 as fewer contracts were entered into in the ~~earlier~~last oftwelve ~~(i)~~months. At March 3031, ~~2006~~2009 and ~~(ii)~~2008, ~~subject~~the market value of our outstanding contracts relating to ~~meeting~~firm ~~specified~~commitments ~~financial~~and ~~targets~~anticipated purchases up to eighteen and fifteen months, ~~such~~respectively, from the respective date was $2.7 million and $9.6 million, respectively, as determined with the assistance of the Company’s counterparty. ~~may~~Assuming ~~determine~~a ~~(such~~hypothetical ~~period~~10% increase in lead and copper commodity prices which are currently hedged at March 31, ~~the~~2009, ~~“Availability~~we ~~Test Period”~~would experience an approximate $2.0 million ($9.8 million at March 31, 2008) increase in our cost of related inventory purchased, which would be partially offset by an approximate $0.9 Inmillion ~~addition~~($4.3 million at March 31, ~~during~~2008) increase in the ~~Availability~~value ~~Test~~of ~~Period,~~related hedging instruments. With the volatility of pricing the Company ~~must~~has ~~maintain~~experienced, ~~specified~~we ~~minimum~~believe that ~~rolling~~significant ~~four~~changes ~~quarter~~in ~~levels~~commodity pricing could have a future material impact on our consolidated financial position, results of ~~Consolidated~~operations, ~~EBITDA~~or ~~(as~~cash ~~defined~~flows inof the ~~Credit Facility)~~Company.

~~On February 9, 2004, in connection with the sale of our fishing line business, we entered into a third amendment to the Credit Facility.~~ We ~~paid~~also anpurchase ~~amendment~~steel ~~fee~~supplies offor ~~$0.1~~use ~~million~~ in ~~connection with~~ the ~~third~~manufacture ~~amendment, which was netted with the gain on the disposal~~ of ~~discontinued~~certain ~~operations.~~firearms, ~~Under the terms of the third amendment~~ammunition, ~~the lenders under the Credit Facility consented to Remington~~ and RAaccessory ~~Brands’~~products. ~~sale~~Assuming ofa ~~specified~~hypothetical ~~assets~~10% ~~pursuant~~increase toin ~~the~~steel ~~Stren~~prices ~~Asset~~at ~~Purchase~~March ~~Agreement~~31, ~~the~~2009, ~~release~~we ofwould ~~liens~~experience ~~against~~an ~~such~~approximate ~~assets,~~$0.3 ~~and~~million ~~the~~(an ~~retention~~approximate of$0.2 ~~the~~million ~~proceeds~~at ~~of such~~March ~~sale~~31, ~~subject~~2008) toincrease ~~a requirement to use such proceeds to invest~~ in ~~productive~~our ~~assets~~cost ~~or permanently pay down amounts outstanding under the Credit Facility within one year~~ of ~~such~~related ~~sale~~inventory purchased.

~~Pursuant~~ We tobelieve ~~these~~that ~~amendments,~~we ~~key~~do ~~terms~~not ofhave ~~the~~a ~~Credit~~material ~~Facility,~~exposure asto ~~amended,~~fluctuations ~~now~~in ~~include~~foreign ~~the~~currencies. ~~following:~~

~~(1)~~ We ~~The~~do minimum amount of availability required to be maintained during the Availability Test Period is $40.0 million (except during any single period of up to 60 consecutive days from June through September of each year during the Availability Test Period, when such minimum availability requirement is $30.0 million). Upon a permanent pay down of not ~~less~~hold ~~than~~or ~~$5.0~~issue ~~million~~financial ~~under~~instruments the Credit Facility by February 9, 2005, these levels will be returned back to $35.0 million and $25.0 million, respectively. For any period during the Availability Test Period when such minimum availability requirement is not met, the Company must maintain (i) a maximum leverage ratio of 6.0 to 1.0 and (ii) a minimum fixed charge coverage ratio of 1.1 to 1.0. So long as the minimum availability requirement is met during the Availability Test Period, there is no requirement for ~~the~~speculative ~~Company to meet the maximum leverage ratio or the minimum fixed charge coverage ratio~~purposes.

~~(2) The Company is required to maintain specified minimum rolling four quarter levels of Consolidated EBITDA during the Availability Test Period (as defined in the Credit Facility)~~33

~~(3)~~Item ~~All of Remington’s existing and future domestic subsidiaries are either co-borrowers under, or guarantors of, the facility~~4T. ~~The~~Controls ~~Credit Facility is secured by substantially all of our real~~ and ~~personal~~Procedures ~~property, including without limitation the capital stock of our subsidiaries.~~

~~(4)~~Management’s ~~Amounts~~Evaluation outstanding under the Credit Facility bear interest at a rate equal to, at our option, (1) an alternate base rate plus applicable margin, (2) a reserve adjusted LIBOR rate plus an applicable margin. These margins are subject to periodic adjustment based on certain levels of ~~financial~~Disclosure ~~performance~~Controls atand ~~various times during the term of the Credit Facility.~~Procedures

The Company maintains disclosure controls and procedures (5as defined in Rule 15d-15(e) ~~The~~under ~~Credit~~the ~~Facility~~Exchange ~~contains~~Act), ~~limitations~~which onare ~~capital~~designed ~~expenditures~~to ~~exceeding~~ensure ~~$12.5~~that ~~million~~information ~~during~~required ~~any~~to ~~fiscal~~be ~~year~~disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, ~~adjusted~~processed, ~~upward~~summarized ~~for~~and ~~any~~reported ~~previously~~within ~~unspent~~the ~~amounts~~time periods specified in ~~prior~~the ~~years~~Securities and Exchange Commission’s rules and forms, and that ~~were~~such ~~less~~information ~~than~~is accumulated and communicated to the ~~annual~~Company’s ~~$12.5~~management, ~~million~~including ~~limitation~~its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

~~(6)~~ As ~~The~~of ~~Credit~~and ~~Facility~~for ~~contains~~the ~~limitations~~period onended ~~indebtedness,~~March ~~liens~~31, ~~investments~~2009 (the “Evaluation Date”), ~~mergers~~an evaluation of the effectiveness of the Company’s disclosure controls and ~~other~~procedures ~~acquisitions~~was conducted under the supervision of, ~~asset~~and ~~dispositions~~reviewed by, ~~transactions~~the ~~with~~Company’s ~~affiliates~~Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Company’s Chief Executive Officer and ~~dividends~~Chief Financial Officer concluded that the Company’s disclosure controls and ~~other~~procedures ~~distributions~~were effective at the Evaluation Date.

27 Furthermore, there were no changes in internal control over financial reporting that occurred during the quarter ended March 31, 2009 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~Table of Contents~~34

~~(7)~~PART ~~The~~II ~~Credit~~- ~~Facility~~OTHER ~~contains customary events of default.~~INFORMATION

~~(8)~~Item ~~The Company is required to pay certain fees in connection with the Credit Facility, including (~~1~~) letter of credit fees, (2) agency fees and (3) an unused commitment fee of 0~~.~~375%~~ ~~which~~Legal isProceedings payable if the average Credit Facility balance is 50% or more of the aggregate revolving commitments in effect on the first day of such month, subject to adjustment upward to 0.500% if the average outstanding Credit Facility balance for any month is less than 50% of the aggregate revolving commitments in effect on the first day of such month.

~~(9)~~ Under ~~The~~the ~~Credit~~terms ~~Facility~~of ~~contains~~the ~~other~~Purchase ~~customary~~Agreement, ~~affirmative~~the ~~and~~1993 ~~negative~~Sellers ~~covenants:~~retained ~~including~~liability ~~but~~for, ~~not~~and ~~limited~~are required to ~~those~~indemnify ~~listed~~us ~~above.~~against:

As• liability in excess of ~~June~~our ~~30,~~limited ~~2004~~financial weresponsibility ~~were~~for inenvironmental ~~compliance~~claims ~~with~~and ~~our~~disclosed ~~financial~~product ~~covenants~~liability ~~and expect~~claims relating to ~~continue~~pre-closing tooccurrences; be• inliability ~~compliance~~for ~~with~~product ~~the~~liability ~~financial~~litigation ~~covenants~~related ~~under~~to ~~the~~discontinued ~~Credit~~products; ~~Facility,~~and as• ~~amended.~~certain ~~However~~tax liabilities, ~~there~~and ~~can~~employee beand noretiree ~~assurance~~compensation ~~that~~and webenefit ~~will~~liabilities ~~continue~~and tointercompany beaccounts inpayable ~~compliance.~~which do not represent trade accounts payable.

~~The~~ These ~~interest~~indemnification ~~rate~~obligations ~~margin~~of ~~for~~ the ~~ABR~~1993 ~~and~~Sellers ~~the~~are ~~Euro-Dollar~~not ~~loans~~subject atto ~~June~~any 30survival period limitation. We have no current information on the extent, ~~2004~~if isany, 1to which the 1993 Sellers have insured these indemnification obligations.5% Except for certain cases and 3%claims relating to shotguns as described below, ~~respectively.~~and ~~The~~except ~~weighted~~for all cases and claims relating ~~average~~ to ~~interest~~products ~~rate~~discontinued ~~under~~prior to the ~~Company’s~~Asset ~~Credit~~Purchase, ~~Facility~~we ~~was~~generally ~~4.80%~~bear ~~and~~financial ~~4.14%~~responsibility asfor the costs of ~~June~~product ~~30,~~liability ~~2004~~cases and ~~2003,~~claims ~~respectively~~relating to occurrences after the Asset Purchase and are required to indemnify the 1993 Sellers against such cases and claims. See “—Certain Indemnities.”

~~Capital~~ The &main ~~Operating~~types ~~Leases~~of ~~and~~legal ~~Other~~proceedings ~~Long-Term Obligations.~~ include:

We• ~~maintain~~Product ~~capital~~liability ~~leases~~litigation ~~mainly~~filed ~~for~~by ~~computer equipment~~individuals. We• ~~have~~Product ~~two~~liability ~~contracts~~litigation ~~that~~filed ~~extend~~by ~~beyond five years, the lease for our Memphis warehouse, which extends to 2010 and a steam purchase contract, which extends to 2012 and contains an option to cancel with 3 years notice~~municipalities. We• ~~also~~Environmental ~~maintain contracts for Information Systems and for sponsorship of a NASCAR racing team, which is cancelable upon certain conditions, including death and injury to the driver~~litigation.

InProduct ~~recognition~~Liability of and support of certain legal and legislative initiatives, the shooting sports industry established the Hunting and Shooting Sports Heritage Fund of which the Company is a member. The Company has historically made annual contributions to the Heritage Fund ranging from 0.5% to 1% of the Company’s net sales. The Company did not make contributions to the Heritage Fund related to the period from January 1, 2003 through March 31, 2004. The Company began accruing for contributions at 0.5% of net sales relating to certain domestically sold ammunition products beginning in the second quarter of 2004. Litigation

~~Cash~~ Since ~~Flows~~December 1, 1993, we have maintained insurance coverage for product liability claims subject to certain self-insured retentions on a per-occurrence basis for personal injury or property damage relating to occurrences arising after the Asset Purchase. We believe that our current product liability insurance coverage for personal injury and ~~Working~~property damage ~~Capital~~is adequate for our needs. Our current product liability insurance policy runs from December 1, 2008 through November 30, 2009 and provides for certain self-insured retention amounts per occurrence. It also includes a limited batch clause provision, which allows that a single retention be assessed when the same defects manufactured in a common lot or batch results in multiple injuries or damages to third parties. The policy excludes from coverage any pollution-related liability. Based in part on the nature of our products, there can be no assurance that we will be able to obtain adequate product liability insurance coverage upon the expiration of the current policy. Certain of our current excess insurance coverage expressly excludes actions brought by municipalities as described below.

~~Net~~ As ~~cash~~a ~~used~~result inof ~~operating~~contractual ~~activities~~arrangements, ~~was~~we ~~$50.2~~manage ~~million~~the ~~and~~joint ~~$51.2~~defense ~~million~~of ~~for~~product ~~the~~liability ~~six-month~~litigation ~~periods~~involving ~~ended~~Remington ~~June~~brand ~~30,~~firearms ~~2004~~ and ~~2003,~~our ~~respectively.~~ammunition ~~The~~products ~~$1.0 million~~for ~~decrease~~both inRemington ~~cash~~and ~~used~~the in1993 ~~operating~~Sellers. ~~activities~~As ~~for~~of ~~the~~March ~~six~~31, ~~months ended June 30~~2009, ~~2004~~approximately ~~compared~~14 toindividual ~~the~~bodily ~~six~~injury ~~months~~cases ~~ended~~and ~~June~~claims 30were pending, ~~2003 resulted~~ primarily ~~from~~alleging adefective ~~decrease~~product indesign, defective ~~inventories~~manufacture and/or anfailure ~~increase~~to inprovide ~~other~~adequate ~~accrued~~warnings; ~~and~~some ~~long-term~~of ~~liabilities, offset~~these bycases anseek ~~increase~~punitive inas ~~accounts~~well ~~receivable~~as compensatory damages. ~~Also~~We ~~affecting~~have ~~net~~previously ~~cash~~disposed ~~used~~of ina ~~operating~~number ~~activities~~of ~~were~~other ~~the~~cases ~~affects~~involving ofpost-Asset ~~the~~Purchase ~~sale~~occurrences ofby ~~the~~settlement. ~~fishing~~The ~~line~~14 ~~business.~~pending ~~Specifically,~~cases ~~the~~involve ~~reasons~~post-Asset ~~associated~~Purchase ~~with~~occurrences ~~these~~for ~~changes~~which ~~are~~we ~~summarized~~bear asresponsibility ~~follows:~~ under the Purchase Agreement.

• The ~~Inventories~~relief ~~increased~~sought byin ~~$22~~individual cases includes compensatory and, sometimes, punitive damages.9 ~~million~~Certain ~~over~~of the ~~six~~claims ~~months~~and ~~ended~~cases ~~June~~seek 30unspecified compensatory and/or punitive damages. In others, ~~2004~~compensatory ~~compared~~damages sought may range from less than $50,000 to anin ~~increase~~excess of $~~28.3~~1 million ~~over~~and ~~the~~punitive ~~six~~damages ~~months~~sought ~~ended~~may ~~June~~exceed ~~30,~~$1 ~~2003~~million. ~~This~~Of ~~decline~~the inindividual post-Asset ~~inventories~~Purchase ~~over~~bodily ~~prior~~injury ~~year~~cases ~~was~~and ~~primarily~~claims ~~related~~pending toas ~~higher~~of ~~sales~~March in31, 2009, the ~~first~~plaintiffs ~~half~~and ofclaimants ~~2004~~seek ~~compared~~either tocompensatory ~~the~~and/or ~~first~~punitive ~~half~~damages ofin ~~2003,~~unspecified ~~offset~~amounts byor ~~higher~~in ~~production~~amounts ~~levels~~within these general ranges. In the Company’s experience, initial demands do not generally bear a reasonable

• Other accrued and long-term liabilities increased by $2.6 million in the first half of 2004 compared to a decrease of $8.7 million in the first half of 2003, primarily as a result of higher accruals for marketing expenses and pension liabilities for the six month period ended June 30, 2004, combined with the payment of the incentive compensation and transaction fee accruals during the six month period ended June 30, 2003.35

28relationship to the facts and circumstances of a particular matter, and in any event, are typically reduced significantly as a case proceeds. The Company believes that its accruals for product liability cases and claims, as described below, are a superior quantitative measure of the cost to it of product liability cases and claims.

~~Table~~ At March 31, 2009, our accrual for product liability cases and claims was $13.9 million. The amount of ~~Contents~~our accrual for product liability cases and claims is based upon estimates developed as follows. We establish reserves for anticipated defense and disposition costs to us of those pending cases and claims for which we are financially responsible. Based on those estimates and an actuarial analysis of actual defense and disposition costs incurred by us with respect to product liability cases and claims in recent years, we determine the estimated defense and disposition costs for unasserted product liability cases and claims. We combine the estimated defense and disposition costs for both pending and unasserted cases and claims to determine the amount of our accrual for product liability cases and claims. It is reasonably possible additional experience could result in further increases or decreases in the period in which such information is made available. We believe that our accruals for losses relating to such cases and claims are adequate. Our accruals for losses relating to product liability cases and claims include accruals for all probable losses the amount of which can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Asset Purchase, our accruals for the uninsured costs of such cases and claims and the 1993 Sellers’ agreement to be responsible for a portion of certain post-Asset Purchase shotgun-related product liability costs, as well as the type of firearms products that we make), we do not believe with respect to product liability cases and claims that any probable loss exceeding amounts already recognized through our accruals has been incurred.

• Because ~~Accounts~~our ~~receivable~~assumption ~~increased~~of ~~during~~financial responsibility for certain product liability cases and claims involving pre-Asset Purchase occurrences was limited to an amount that has now been fully paid, with the ~~first~~1993 ~~half~~Sellers retaining liability in excess of ~~2004~~that byamount ~~$30.1~~and ~~million,~~indemnifying ~~which~~us isin ~~larger~~respect ~~than~~of ~~the~~such ~~increase~~liabilities, and because of ~~$21.9~~our ~~million~~accruals ~~during~~with respect to such cases and claims, we believe that product liability cases and claims involving occurrences arising prior to the ~~last~~Asset ~~half~~Purchase are not likely to have a material adverse effect upon our financial condition, results of ~~2003~~operations or cash flows. Moreover, ~~primarily~~although ~~attributable~~it is difficult to forecast the ~~timing~~outcome of ~~sales~~litigation, ~~during~~we ~~the~~do ~~first~~not ~~half~~believe, in light of ~~2004~~relevant ~~compared~~circumstances to(including the ~~first~~current ~~half~~availability of ~~2003,~~insurance ~~particularly~~for personal injury and property damage with respect to ~~shotshell~~cases and ~~ammunition~~claims ~~sales~~involving occurrences arising after the Asset Purchase, ~~slightly~~our ~~offset~~accruals byfor the uninsured costs of such cases and claims and the 1993 Sellers’ agreement to be responsible for a ~~higher~~portion ~~overall~~of ~~accounts~~certain ~~receivable~~post-Asset ~~balance~~Purchase atshotgun-related ~~December~~product 31liability costs, ~~2003~~as ~~due~~well as the type of firearms products that we make), that the outcome of all pending post-Asset Purchase product liability cases and claims will be likely to ~~higher~~have ~~sales~~a ~~associated~~material ~~with~~adverse effect upon our ~~spring~~financial condition, ~~firearms~~results ~~program~~of operations or cash flows. Nonetheless, in part because the ~~fourth~~nature ~~quarter~~and extent of ~~2003~~liability ~~compared~~based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that our resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the ~~same~~aggregate, ~~period~~or that a material adverse effect upon our financial condition, results of operations or cash flows will not result therefrom. Because of the nature of our products, we anticipate that we will continue to be involved in ~~2002~~product liability litigation in the future. Because of the potential nature of injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur material costs.

•Municipal The sale of the fishing line business on February 9, 2004 resulted in an increase in net income due to a gain (net of taxes) on the sale of $13.5 million. This adjustment, in combination with other adjustments for accruals and taxes associated with the sale are included in other accrued and long-term liabilities and income taxes payable. The amount of the cash proceeds from the sale was included in investing activities as indicated below.Litigation

~~Net~~ In ~~cash~~addition ~~provided~~to ~~by investing~~these ~~activities~~individual incases, ~~the~~as ~~first~~a ~~six~~manufacturer ~~months~~ of ~~2004~~shotguns ~~was $41.5 million~~ and ~~net~~rifles, ~~cash used in investing activities in~~ the ~~first~~Company ~~six~~has ~~months~~been ofnamed ~~2003~~previously ~~was $2.8 million. Net cash proceeds of $42.8 million received from the sale of our fishing line business~~ in ~~the~~several ~~first~~actions ~~half~~brought ofby ~~2004,~~various ~~combined with $0.5 million of cash proceeds on sale of property~~municipalities, ~~plant~~primarily ~~and~~against ~~equipment resulted in the increase~~manufacturers, ~~slightly~~distributors ~~offset by $1.8 million in capital expenditures. The $1.8 million~~ and ~~$2.7~~sellers ~~million~~ of ~~expenditures~~handguns. ~~for investing activities in the first six months of 2004 and 2003~~However, ~~respectively, consisted of capital expenditures primarily used for new equipment related to~~ the ~~manufacture~~Company ofis ~~firearms~~not ~~and~~a ~~ammunition,~~defendant asin ~~well~~any aspending ~~maintenance~~municipal ~~of existing facilities~~litigation.

~~Net~~ A ~~cash~~majority ~~provided~~of bystates ~~financing~~have ~~activities~~enacted ~~was~~some ~~$8.9~~limitation ~~million~~on ~~and $54.5~~the ~~million~~ability ~~during~~of ~~the~~local ~~six-month~~governments ~~periods~~to ~~ended~~file ~~June~~such ~~30,~~lawsuits ~~2004~~against ~~and~~firearms ~~2003, respectively~~manufacturers. ~~The~~In ~~$45.6~~addition, ~~million~~similar ~~decrease~~legislation inlimiting ~~cash~~such ~~provided~~lawsuits byon ~~financing~~a ~~activities~~federal ~~from~~level ~~the~~has ~~six~~been ~~months~~proposed ~~ended~~in ~~June~~both 30houses of Congress, ~~2004~~most ~~compared~~recently toby the ~~six~~House ~~months~~of ~~ended~~Representatives ~~June~~on 30October 20, ~~2003~~2005, and the Protection of Lawful ~~primarily~~ Commerce ~~resulted~~in ~~from~~Arms ~~approximately~~Act ~~$47~~was adopted in October 2005.0 ~~million~~However, the applicability of ~~lower~~the ~~borrowings~~law ~~under~~to ~~the~~various ~~Credit~~types ~~Facility.~~of governmental and private lawsuits has been challenged in both state and federal courts.

~~Dividend Policy~~ 36

~~The~~Litigation declaration and payment of future dividends, if any, will be at the sole discretion of the Board of Directors of the respective company, subject to the restrictions set forth in the Credit Facility and the indenture for the Notes, which currently restrict the payment of cash dividends to shareholders. We expect to make future dividend payments to Holding based on available cash flows as and to the extent permitted by the Credit Facility and the indenture for the Notes. On April 28, 2004, the Board of Directors of the Company declared a dividend of approximately $2.1 million that was paid to RACI Holding, Inc. on June 30, 2004. Outlook

~~Capital~~ We ~~Expenditures~~are involved in lawsuits, claims, investigations and proceedings, including commercial, environmental and employment matters, which arise in the ordinary course of business. We do not expect that the ultimate costs to resolve these matters will have a material adverse effect on our financial position, results of operations or cash flows.

~~Capital~~Certain ~~expenditures~~Indemnities for the six months ended June 30, 2004 were $1.8 million, consisting primarily of capital expenditures for new equipment related to the manufacture of firearms and maintenance of existing facilities. We expect capital expenditures for 2004 to be in a range of $8.1 million to $12.5 million. Our Credit Facility allows for capital expenditures up to $18.1 million in 2004 including unused capacity carried over from 2003.

~~Results~~ As of ~~Operations for~~ the ~~Three and~~closing ~~Six~~of ~~Month~~the ~~Periods~~Asset ~~Ended~~Purchase ~~June~~in ~~30,~~December ~~2004~~1993 asunder ~~Compared to~~ the ~~Three~~Purchase ~~and Six Month Periods Ended June 30~~Agreement, ~~2003~~we assumed:

~~Net~~• ~~Sales.~~a ~~The~~number ~~following~~of ~~tables~~specified ~~compare~~liabilities, ~~net~~including ~~sales~~certain bytrade ~~reporting~~payables ~~segment~~and contractual obligations of the 1993 Sellers; • limited financial responsibility for ~~each~~specified product liability claims relating to disclosed occurrences arising prior to the Asset Purchase; • limited financial responsibility for environmental claims relating to the operation of the ~~periods~~business ~~indicated:~~prior to the Asset Purchase; and • liabilities for product liability claims relating to occurrences after the Asset Purchase, except for claims involving products discontinued at the time of closing.

	Three Months Ended June 30, Dollars in Millions
	2004		Percent Of Total		2003		Percent of Total		$Increase/(Decrease)			%Increase/(Decrease)
Net Sales
Firearms	$	46.0	53	%	$	46.2	58	%	$	(0.2	)	0.0	%
Ammunition		35.3	40			29.0	36			6.3		21.7
All Other		5.9	7			4.9	6			1.0		20.4
Consolidated	$	87.2	100	%	$	80.1	100	%	$	7.1		8.9	%

All other liabilities relating to or arising out of the operation of the business prior to the Asset Purchase are excluded liabilities (the “Excluded Liabilities”), which the 1993 Sellers retained. The 1993 Sellers are required to indemnify Remington and its affiliates in respect of the Excluded Liabilities, which include, among other liabilities:

29• liability in excess of our limited financial responsibility for environmental claims and disclosed product liability claims relating to pre-closing occurrences; • liability for product liability litigation related to discontinued products; and • certain tax liabilities, and employee and retiree compensation and benefit liabilities and intercompany accounts payable which do not represent trade accounts payable.

~~Table~~ The 1993 Sellers’ overall liability in respect of ~~Contents~~their representations, covenants and the Excluded Liabilities under the Purchase Agreement, excluding environmental liabilities and product liability matters relating to events occurring prior to the purchase but not disclosed, or relating to discontinued products, is limited to $324.8 million. With a few exceptions, the 1993 Sellers’ representations under the Purchase Agreement have expired. We made claims for indemnification involving product liability issues prior to such expiration. See “—Product Liability Litigation”.

	Six Months Ended June 30, Dollars in Millions
	2004		PercentOf Total		2003		Percentof Total		$Increase/(Decrease)		%Increase/(Decrease)
Net Sales
Firearms	$	91.2	53	%	$	91.2	57	%	$	0.0	0.0	%
Ammunition		68.8	40			59.6	37			9.2	15.4
All Other		11.1	7			10.3	6			0.8	7.8
Consolidated	$	171.1	100	%	$	161.1	100	%	$	10.0	6.2	%

In addition, the 1993 Sellers agreed in 1996 to indemnify us against a portion of certain product liability costs involving various shotguns manufactured prior to 1995 and arising from occurrences on or prior to November 30, 1999. These indemnification obligations of the 1993 Sellers relating to product liability and environmental matters (subject to a limited exception) are not subject to any survival period limitation, deductible or other dollar threshold or cap. We and the 1993 Sellers are also party to separate agreements setting forth agreed procedures for the management and disposition of environmental and product liability claims and proceedings relating to the operation or ownership of the business prior to the Asset Purchase, and are currently engaged in the joint defense of certain product liability claims and proceedings. See “—Product Liability Litigation”.

~~Management believes the increases of $7.1 million for the quarter ended and $10.0 million for the six-months ended June 30, 2004 were primarily attributable to:~~ 37

•Item ~~improved~~1A. ~~weather~~Risk ~~conditions~~Factors ~~and consumer spending;~~

• In addition to the ~~improving~~other ~~trend~~information set forth in this quarterly report on Form 10-Q and set forth below, you should carefully consider the Ufactors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2008 and in our other SEC filings, which could materially affect our business, financial condition or future results.S. ~~economy~~The ~~continued~~risks ~~from~~and uncertainties described in our Annual Report on Form 10-K and in our other SEC filings are not the ~~fourth~~only ~~quarter~~risks ~~2003;~~facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

•We ~~modest~~have ~~improvements~~recently inmade ~~some~~changes ~~customers’~~to ~~buying~~our ~~patterns~~management team. As a result of these changes, there may be an adjustment period which could cause inefficiencies in the ~~retail~~execution ~~environment~~of our business and our operations.

On March 13, 2009, Thomas L. Millner, our former Chief Executive Officer, resigned and Theodore H. Torbeck, who was originally hired as our Chief Operating Officer and later named President, was appointed by the Board of Directors to serve as our Chief Executive Officer. In addition, on April 3, 2009, Joseph B. Gross, Remington’s Vice President, Firearms Manufacturing, was appointed by the Board to serve as our Chief Operating Officer. Since the FGI Acquisition in May 2007, the Company has established and staffed a number of additional management positions in an effort to add depth to the existing management team. Such positions include a Chief Operating Officer, a Chief Sales Officer, a Chief Information Officer, a Chief Supply Chain Officer, a Chief Marketing Officer, a Chief Technology Officer and a General Counsel. We believe we have a qualified leadership team in place for the Company. However, it may take some transition time for the new management team to learn to work together effectively. There can be no assurance that the changes in management will lead to an improvement in our ability to execute our business and there is a risk that our operations may be adversely affected, which could negatively impact our business and financial condition.

~~Management~~The ~~believes~~uncertainty surrounding the ~~decrease~~current inpolitical ~~net~~environment, ~~sales~~which ofwe ~~$0.2~~believe ~~million~~has resulted in increased demand for ~~the~~our ~~quarter~~products, ~~ended~~has ~~June~~made 30it difficult to accurately forecast our materials, ~~2004~~production ~~over~~and ~~the~~inventory ~~prior-year~~requirements, ~~period~~which ismay ~~due~~adversely ~~primarily~~affect ~~to:~~ our results of operations.

• We ~~lower~~place ~~sales~~orders ~~volumes~~for raw materials, determine production, and plan inventory based on our forecast of ~~higher~~consumer ~~margin~~demand, ~~rifles~~which is currently highly volatile and difficult to predict due to the uncertainty surrounding the political environment. Inaccurate estimation of our requirements could lead to a surplus or shortage of raw materials and/or finished inventory. We may experience a shortage of raw materials, ~~partially~~which ~~offset~~may result in our inability to meet demand for our inventory, or a surplus of materials that may result in the recording of losses should commodity costs decline. Market fluctuations may cause a shortage of raw materials and may affect our production or the cost of goods sold. Our profitability may also be adversely affected by supply or inventory shortages by temporarily interrupting production or by reducing the price of goods, which will lead to an increase in the ratio of cost of sales to sales. We write down the value of our inventory when it becomes obsolete or when the value of the inventory is otherwise recorded at a higher value than net realizable value. Such inventory adjustments can have a material adverse effect on our operating results and profitability.

~~• higher sales volumes of shotguns and to a lesser extent lower margin rifles, and~~38

•Item ~~the~~6. ~~first~~Exhibits ~~shipments of Spartan Gunworks products in June.~~

Management believes that net sales were unchanged for the six-months ended June 30, 2004 over the prior-year period resulted from:


10.1		Form of Severance Agreement, previously filed as Exhibit 10.1 to Remington’s Current Report on Form 8-K, filed February 20, 2009, and herein incorporated by reference.*

31.1		Certification Pursuant to 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification Pursuant to 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

*		Management contract or compensatory plan or arrangement.

**		These exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. In addition, these exhibits shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

~~• lower sales volumes of higher margin rifles, offset by~~39

~~• higher sales volumes of shotguns, and~~SIGNATURE

• Pursuant to the ~~first~~requirements ~~shipments~~of the Securities Exchange Act of ~~Spartan~~1934, ~~Gunworks~~the inregistrant ~~June~~has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Ammunition~~REMINGTON ARMS COMPANY, INC. /s/ Stephen P. Jackson, Jr. Stephen P. Jackson, Jr. Chief Financial Officer, Treasurer and Corporate Secretary (Duly Authorized Officer and Principal Financial Officer)

~~Management~~May ~~believes the increase in net sales of $6.3 million for the quarter ended June 30~~8, ~~2004 over the prior-year period is due primarily to higher sales volumes of shotshell and pistol & revolver ammunition products, in that order.~~ 2009

Management believes the increase in net sales of $9.2 million for the six-months ended June 30, 2004 over the prior-year period is due primarily to higher sales volumes of shotshell, pistol & revolver, and centerfire rifle ammunition products, in that order. 40

~~All Other~~EXHIBIT ~~(including Accessories, Clay Targets, and Powder Metal Products)~~ INDEX

Management believes the increase in net sales of $1.0 million for the quarter ended June 30, 2004 over the prior-year period, predominately in the Accessories line of business, of $0.9 million, is due primarily to:


Exhibit No.			Description


10.1			Form of Severance Agreement, previously filed as Exhibit 10.1 to Remington’s Current Report on Form 8-K, filed February 20, 2009, and herein incorporated by reference.*

31.1			Certification Pursuant to 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification Pursuant to 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

32.2			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **

*			Management contract or compensatory plan or arrangement.

**			These exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. In addition, these exhibits shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

~~• higher sales volumes of knives and gun safes, and~~41

• to a lesser extent higher sales volumes of shooting glasses and gun parts.

Management believes the increase in net sales of $0.8 million for the six-months ended June 30, 2004 over the prior-year period, predominantly in the Accessories line of business, of $0.8 million, is due primarily to:

• higher sales volumes of knives, and to a lesser extent cleaning products, shooting glasses, and gun parts, partially offset by

• lower sales volumes of gun safes and black powder products.

Cost of Goods Sold. The table below depicts the cost of goods sold by reporting segment and the percentage of net sales represented by such cost of goods sold:

	Three Months Ended June 30, Dollars in Millions
	2004		Percent ofNet Sales		2003		Percent ofNet Sales		$Increase/(Decrease)		%Increase/(Decrease)
Cost of Goods Sold
Firearms	$	34.6	75.2	%	$	32.4	70.1	%	$	2.2	6.8	%
Ammunition		31.6	89.5			25.1	86.6			6.5	25.9
All Other		4.5	76.3			3.6	73.5			0.9	25.0
Consolidated	$	70.7	81.0	%	$	61.1	76.3	%	$	9.6	15.7	%

	Six Months Ended June 30, Dollars in Millions
	2004		Percent ofNet Sales		2003		Percent ofNet Sales		$Increase/(Decrease)		%Increase/(Decrease)
Cost of Goods Sold
Firearms	$	68.3	74.9	%	$	65.2	71.5	%	$	3.1	4.8	%
Ammunition		58.5	85.0			47.8	80.2			10.7	22.4
All Other		8.3	74.8			7.7	74.8			0.6	7.8
Consolidated	$	135.1	79.0	%	$	120.7	75.0	%	$	14.4	11.9	%

Management believes the increases of $9.6 million for the quarter ended and $14.4 million for the six-months ended June 30, 2004 over the respective prior-year periods were primarily attributable to:

• higher sales volumes of lower margin products;

• lower sales volumes of higher margin products;

• higher pension and postretirement costs; and

• higher commodity costs, offset by

• overall lower unfavorable variances.

Firearms

Management believes the increase of $2.2 million for the quarter ended June 30, 2004 over the prior-year period is due primarily to:

• lower sales volumes of higher margin rifles,

• higher sales of lower margin shotguns,

• higher pension and post retirement employee benefits expenses of $0.7 million, and

• higher manufacturing variances of $0.3 million as compared to the prior year period.

Management believes the increase of $3.1 million for the six-months ended June 30, 2004 over the prior-year period is due primarily to:

• lower sales volumes of higher margin rifles,

• higher sales of lower margin shotguns, and

• higher pension and post retirement employee benefits expenses of $1.3 million, partially offset by

• lower manufacturing variances of $1.8 million as compared to the prior year period resulting from lower production levels in the fourth quarter of 2003.

Ammunition

Management believes the increase of $6.5 million for the quarter ended June 30, 2004 over the prior-year period is due primarily to:

• higher sales volumes of lower margin ammunition, mainly shotshell and pistol & revolver,

• higher pension and post retirement employee benefits expenses of $0.6 million, partially offset by

• lower levels of unfavorable manufacturing variances recognized, in combination with lower production levels at the end of 2003, and

• realized gains of $0.9 million from settlement of our copper and lead option contracts in the second quarter of 2004.

Management believes the increase of $10.7 million for the six-months ended June 30, 2004 over the prior-year period is due primarily to:

• higher sales volumes of lower margin ammunition, mainly shotshell and pistol & revolver,

• higher pension and post retirement employee benefits expenses of $1.3 million,

• higher levels of unfavorable manufacturing variances recognized of approximately $0.9 millionresulting from lower production levels at the end of 2003, partially offset by

• realized gains of $1.2 million from settlement of our copper and lead option contracts.

All Other (including Accessories, Clay Targets, and Powder Metal Products)

Management believes the increase of $0.9 million for the quarter ended June 30, 2004 over the prior-year period is due primarily to:

• higher sales volumes of lower margin products, primarily knives and gun safes, combined with

• higher sales volumes of shooting glasses.

Management believes the increase of $0.6 million for the six-months ended June 30, 2004 over the prior-year period is due primarily to:

• higher sales volumes of lower margin products, primarily knives, combined with

• higher sales volumes of shooting glasses, and cleaning products, partially offset by

• lower overall sales volumes of gun safes and black powder accessories products.

Operating Expenses. Operating expenses consist of selling, general and administrative expense, research and development expense and other income and expense.

	For the three months ended,
	June 30, 2004			June 30, 2003			$Increase/(Decrease)			% Increase/(Decrease)
Operating Expenses
SG&A	$	16.5		$	14.3		$	2.2		15.4	%
R&D		1.5			1.7			(0.2	)	(11.8	)
Other		(0.4	)		(0.2	)		(0.2	)	(100.0	)
Consolidated	$	17.6		$	15.8		$	(1.8	)	(11.4	)%

The increase in selling, general, and administrative expense between the two quarterly periods was primarily attributable to the reversal of an incentive compensation accrual made in 2003, distribution costs associated with higher sales volumes and other administrative costs associated with the previously mentioned growth initiatives and the implementation of the Sarbanes-Oxley Act of 2002.

	For the six months ended,
	June 30, 2004			June 30, 2003		$ Increase/(Decrease)			%Increase/(Decrease)
Operating Expenses
SG&A	$	32.8		$	30.9	$	1.9		6.1	%
R&D		3.0			3.2		(0.2	)	(6.3	)
Other		(0.8	)		6.0		(6.8	)	(113.3	)
Consolidated	$	35.0		$	40.1	$	(5.1	)	(12.7	)%

The increase in selling, general, and administrative expense between the two year-to-date periods was primarily attributable to higher product liability expense, distribution costs associated with higher sales volumes, and other administrative costs associated with the previously mentioned growth initiatives and the implementation of the Sarbanes-Oxley Act of 2002.

The decrease in other expense was primarily due to other unusual charges incurred in connection with the first quarter 2003 recapitalization transactions, which includes $4.5 million related to the acceleration and subsequent cancellation of options to purchase common stock of Holding, $0.7 million of additional interest expense representing a call premium for early redemption of the Refinanced Notes, and $1.5 million expensed for the unamortized debt issuance costs related to our prior revolving credit facility.

Interest Expense. Interest expense for the quarter and year-to-date period ended June 30, 2004 was $6.2 million and $12.3 million, respectively, an increase of $0.2 million and $1.5 million from the same periods of 2003. Interest expense excludes $0.0 and $0.5 million for the quarterly periods, and $0.1 and $1.0 million, for the year-to-date periods ended June 30, 2004 and 2003, respectively, which was reclassified to discontinued operations.

The increase in interest expense from the same period in 2003 resulted primarily from higher expense of $0.7 million associated with higher overall borrowings and higher expense of $0.1 million associated with higher interest rates of on the Notes as compared to the Refinanced Notes. In addition, interest expense in connection with the Credit Facility was lower than for the same periods in 2003, primarily due to lower overall borrowings on the Credit Facility of $0.4 million and $0.5 million for the quarter and year to date periods, respectively, due to the sale of the fishing line business, offset by $0.1 million associated with higher interest rates for the quarter and year to date periods.

Taxes. Our effective tax rate relating to continuing operations was (41.7%) for the second quarter of 2004 and was (40.0%) for the year to date period ended June 2004. The change from (38.5%) for the same periods in 2003 is primarily attributable to the effect of permanent differences and changes in state income taxes. We have utilized a 42% effective tax rate in calculating the net gain on the sale of the fishing line business. This rate differs from the continuing operations rate primarily due to permanent differences related to goodwill associated with the fishline business.

Discontinued Operations. On February 6, 2004, we entered into the Stren Asset Purchase Agreement pursuant to which we sold to the Purchasers certain specific assets relating to our fishing line business, effective as of February 9, 2004. The fishing line business had been a part of the All Other reporting segment.

The purchase price paid to us, based on the fair market value of the assets sold, was $44.0 million in cash, $1.0 million of which had been placed into escrow as security for certain post-closing obligations to procure certain materials for the Purchasers. The $1.0 million escrow amount was received on May 12, 2004. The assets sold had a net book value of approximately $17.9 million and we retained net working capital of approximately $1.7 million. The gain recorded during the first half of 2004 on the sale of discontinued operations was approximately $13.5 million, net of income taxes. The gain of approximately $13.5 million reflects the release of the $1.0 million escrow amount and adjustments to the estimates of costs associated with the sale based on remaining obligations with respect to the sale as of June 30, 2004.

Amounts related to the fishing line operations for the periods ended June 30, 2004 and 2003 have been reclassified in the accompanying statement of operations as discontinued operations. The following represents a summary of key components of income from discontinued operations:

	For the quarter ended,				For the six months ended,
Discontinued Operations:	June 30,2004		June 30,2003		June 30,2004		June 30,2003
Net Sales	$	0.0	$	4.6	$	3.3	$	9.4
Pre-tax operating results		0.3		1.3		0.2		2.7
Interest expense allocation		0.0		0.5		0.1		1.0
Income from operations, after tax		0.3		0.5		0.1		1.1

Recent Accounting Pronouncments

Regulatory Developments

The federal Brady Handgun Violence Prevention Act of 1993 (the “Brady Bill”), which was extended in 1998 to include shotguns and rifles, mandates a national system of instant background checks for all firearm purchases from federally-licensed firearms retail dealers. Federal legislation has been proposed to further extend this system to sales made by non-retail sellers at gun shows.

In 1994, a federal law with a ten-year term was enacted that generally prohibits the manufacture of certain firearms defined under that statute as “assault weapons” as well as the sale or possession of “assault weapons” except for those that, prior to the law’s enactment, were legally in the owner’s possession. This law expressly exempts approximately 650 models of firearms that are generally used by hunters and sporting enthusiasts. None of our current firearms products are considered to be “assault weapons” under existing federal or state law. Various bills have been introduced in Congress in recent years to repeal bans on semi-automatic assault weapons and large-capacity ammunition feeding devices; the likelihood of their passage is uncertain, as are the prospects that the “assault weapon” ban will be renewed (or otherwise modified) when its provisions expire in September 2004.

State and local laws and regulations vary significantly in the level of additional restriction, beyond those established under federal law, placed on the manufacture, ownership and transfer of firearms. Some states have recently enacted, and others are considering, legislation restricting or prohibiting the ownership, use or sale of certain categories of firearms and/or ammunition. Certain states have enacted, or considered, legislation regarding the sale of locking devices together with firearms; although most are limited to handguns, some would apply to Remington shotguns and rifles. Although many states have mandatory waiting period laws in effect for handguns, there are currently few restrictive state regulations applicable to handgun ammunition. The Company’s current firearm and ammunition products generally are not subject to such existing state restrictions, and generally would not be subject to any known proposed state legislation relating to regulation of “assault weapons.” Bills have been introduced in Congress to establish, and to consider the feasibility of establishing, a nationwide database recording so-called “ballistic images” of ammunition fired from new guns. To date, only two states have established such registries, and neither state’s laws calls for “imaging” of data from long guns.

The Company believes that recent federal, state and local legislation relating to the regulation of firearms and ammunition has not had a material adverse effect on its sale of these products to date. However, there can be no assurance that federal, state, local or foreign regulation of firearms or ammunition will not become more restrictive in the future and that any such development would not have a material adverse effect on the business of the Company.

Information Concerning Forward-Looking Statements

Certain of the statements contained in this report (other than the financial statements and other statements of historical fact) are forward-looking statements, including, without limitation: (i) the statement in “Executive Overview” concerning our belief that the demand for sporting products in the firearms, ammunition and related markets depends on a number of factors including the general state of the economy; (ii) the statements in “Business Outlook” concerning our beliefs regarding the general state of the economy and the industry in which we operate, as well as our outlook for the remainder of 2004; (iii) the statements in “-Liquidity and Capital Resources - Liquidity” concerning our belief that it will be able to meet its debt service obligations and fund its operating requirements with cash flow from operations and revolving credit borrowings prior to the maturity of the Revolving Credit Facility; (iv) the statement in “Liquidity and Capital Resources - Capital Expenditures” that we expect capital expenditures for 2004 to be in a range of $8.1 million to $12.5 million; (v) the statements in “Liquidity and Capital Resources – Credit Facility” concerning our beliefs regarding compliance with the financial covenants under the Credit Facility; (vi) the statements in “Quantitative and Qualitative Disclosures About Market Risk” concerning our belief that a near-term change in commodity prices could have a material impact on our consolidated financial position, results of operations, future earnings, fair value or cash flows and we believe that we do not have a material exposure to fluctuations in foreign currencies; (vii) the statements in “Legal Proceedings” concerning our belief that the outcome of all pending product liability cases and claims will not be likely to have a material adverse effect upon our financial condition or results of operations; and (viii) other statements as to management’s or the Company’s expectations and beliefs presented in “Legal Proceedings.”

Forward-looking statements are made based upon management’s current expectations and beliefs concerning future developments and their potential effects upon the Company. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management. The important factors described in this report (including, without limitation, those discussed in “-Executive Overview”, “-Liquidity and Capital Resources” and “Legal Proceedings”), in the Company’s Annual Report on Form 10-K for the period ended December 31, 2003, or in other Securities and Exchange Commission filings (which factors are incorporated herein by reference), could affect (and in some cases have affected) our actual results and could cause such results to differ materially from estimates or expectations reflected in such forward-looking statements.

While the Company periodically reassesses material trends and uncertainties affecting the operations and financial condition in connection with its preparation of management’s discussion and analysis of results of operations and financial condition contained in its quarterly and annual reports, the Company does not intend to review or revise any particular forward-looking statement referenced in this report in light of future events.

It em 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the normal course of our business operations due to our purchases of certain commodities and our ongoing investing and financing activities. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies and procedures governing our management of market risks and the uses of financial instruments to manage exposure to such risks.

Certain of our financial instruments are subject to interest rate risk. As of June 30, 2004, we had long-term borrowings of $239.5 million ($269.7 million at June 30, 2003) of which $37.5 million ($67.2 million at June 30, 2003) was issued at variable rates. Assuming no changes in the $53.4 million of average variable-rate debt levels from year-end 2003, we estimate that a hypothetical change of 100 basis points in the LIBOR and ABR interest rates from year-end 2003 would impact interest expense by $0.5 million on an annualized pretax basis. We were not a party to any interest rate cap or other protection arrangements with respect to our variable rate indebtedness as of June 30, 2004.

We use commodity options contracts to hedge against the risk of increased prices for lead and copper to be used in the manufacture of our products. At June 30, 2004, the fair value of the Company’s outstanding derivative contracts relating to firm commitments and anticipated purchases (aggregate notional amount 33.4 million pounds of copper and lead) up to fifteen months from such date was $4.1 million as determined with the assistance of a third

party. Assuming a hypothetical 10% increase in lead and copper commodity prices which are currently hedged, we would experience an approximate $4.0 million ($1.0 million at June 30, 2003) increase in our cost of related inventory purchased, which would be partially offset by an approximate $1.1 million ($0.4 million at June 30, 2003) increase in the value of related hedging instruments. With the volatility of pricing the Company has experienced, we believe that significant changes in commodity pricing could have a future material impact on our consolidated financial position, results of operations, or cash flows of the Company.

We also purchase steel supplies for use in the manufacture of certain firearms, ammunition, and accessory products. The price of steel has recently risen due to the increasing demand from China compounded by a weak US dollar and iron ore shortages. Assuming a hypothetical 10% increase in steel prices, we would experience an approximate $0.4 million (an approximate $0.3 million at June 30, 2003) increase in our cost of related inventory purchased.

Additionally, we believe that we do not have a material exposure to fluctuations in foreign currencies.

We do not hold or issue financial instruments for speculative purposes.

It em 4. Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 15d-14(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of and for the period ended June 30, 2004 (the “Evaluation Date”), an evaluation of the effectiveness of the Company’s disclosure controls and procedures was conducted under the supervision of, and reviewed by, the Company’s Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were adequate and designed to ensure that material information relating to the Company and its consolidated subsidiaries would be made known to the Chief Executive Officer and Chief Financial Officer by others within those entities, particularly during the periods when periodic reports under the Exchange Act are being prepared.

Furthermore, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect those controls subsequent to the Evaluation Date.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Under the terms of the asset purchase, the sellers retained liability for, and are required to indemnify us against:

• all product liability cases and claims involving products that had not been discontinued as of the Acquisition but relating to occurrences that took place prior to the Acquisition;

• all product liability cases and claims (whenever they may arise) involving discontinued products; and

• environmental liabilities based on conditions existing at the time of the Acquisition.

These indemnification obligations of the sellers are not subject to any survival period limitation. We have no current information on the extent, if any, to which the sellers have insured these indemnification obligations. Except for certain cases and claims relating to shotguns as described below, and except for all cases and claims relating to products discontinued prior to the Acquisition, we generally bear financial responsibility for the costs of product liability cases and claims relating to occurrences after the Acquisition and are required to indemnify the sellers against such cases and claims. See “—Certain Indemnities”.

Product Liability Litigation

Since December 1, 1993, we have maintained insurance coverage for product liability claims subject to certain self-insured retentions on a per-occurrence basis for personal injury or property damage relating to occurrences arising after the Acquisition. We believe that our current product liability insurance coverage for personal injury and property damage is adequate for our needs. Our current product liability insurance policy runs from December 1, 2003 through November 30, 2004 and provides for a self-insured retention of $0.5 million per occurrence. The current policy has a batch clause endorsement, which in general provides that if a batch of our products were to be defective, our liability for product liability expenses and damages related to the entire batch would be capped at the amount of self-insured retention for a single occurrence. The policy excludes from coverage any pollution-related liability. Based in part on the nature of our products, and the continued impact on the insurance market of the events of September 11, 2001, there can be no assurance that we will be able to obtain adequate product liability insurance coverage upon the expiration of the current policy. Certain of our current excess insurance coverage expressly excludes actions brought by municipalities as described below.

As a result of contractual arrangements, we manage the joint defense of product liability litigation involving Remington brand firearms and our ammunition products for both Remington and the sellers. As of June 30, 2004, approximately 15 individual bodily injury cases and claims were pending, primarily alleging defective product design, defective manufacture and/or failure to provide adequate warnings; some of these cases seek punitive as well as compensatory damages. We have previously disposed of a number of other cases involving post-Acquisition occurrences by settlement. Of the individual cases and claims pending as of June 30, 2004, approximately three involve matters for which the sellers retained liability and are required to indemnify us. The remaining approximately 12 pending cases involve post-Acquisition occurrences for which we bear responsibility under the Purchase Agreement; the sellers have some responsibility for the costs of one of these cases involving certain shotguns.

The relief sought in individual cases includes compensatory and, sometimes, punitive damages. Not all complaints or demand letters expressly state the amount of damages sought. As a general matter, when specific amounts are provided, compensatory damages sought range from less than $75,000 to more than $20 million, while demands or punitive damages may range to as much as tens of millions of dollars. Of the 12 individual post-Acquisition claims pending as of June 30, 2004, where specific initial demands have been made, claimants purport to seek approximately $25 million in compensatory and an unspecified amount in punitive damages. In the Company’s experience, initial demands do not generally bear a reasonable relationship to the facts and circumstances of a particular matter, and in any event, typically are reduced significantly as a case proceeds. The Company believes that its accruals for product liability cases and claims are a superior quantitative measure of the cost to it of product liability cases and claims.

At June 30, 2004, our accrual for product liability cases and claims was approximately $9.1 million. The amount of our accrual for product liability cases and claims is based upon estimates developed as follows. We establish reserves for anticipated defense and disposition costs to us of those pending cases and claims for which we are financially responsible. Based on those estimates and an actuarial analysis of actual defense and disposition costs incurred by us with respect to product liability cases and claims in recent years, we determine the estimated defense and disposition costs for unasserted product liability cases and claims. We combine the estimated defense and disposition costs for both pending and unasserted cases and claims to determine the amount of our accrual for product liability cases and claims. We believe that our accruals for losses relating to such cases and claims are adequate. Our accruals for losses relating to product liability cases and claims include accruals for all probable losses the amount of which can be reasonably estimated. Based on the relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Acquisition, our accruals for the uninsured costs of such cases and claims and the sellers’ agreement to be responsible for a portion of certain post-Acquisition shotgun-related product liability costs, as well as the type of firearms products that we make), we do not believe with respect to product liability cases and claims that any reasonably possible loss exceeding amounts already recognized through our accruals has been incurred.

Because our assumption of financial responsibility for certain product liability cases and claims involving pre-Acquisition occurrences was limited to an amount that has now been fully paid, with the sellers retaining liability in excess of that amount and indemnifying us in respect of such liabilities, and because of our accruals with respect to such cases and claims, we believe that product liability cases and claims involving occurrences arising prior to the Acquisition are not likely to have a material adverse effect upon our financial condition or results of operations. Moreover, although it is difficult to forecast the outcome of litigation, we do not believe, in light of relevant circumstances (including the current availability of insurance for personal injury and property damage with respect to cases and claims involving occurrences arising after the Acquisition, our accruals for the uninsured costs of such cases and claims and the sellers’ agreement to be responsible for a portion of certain post-Acquisition shotgun-related product liability costs, as well as the type of firearms products that we make), that the outcome of all pending post-Acquisition product liability cases and claims will be likely to have a material adverse effect upon our financial condition or results of operations. Nonetheless, in part because the nature and extent of liability based on the manufacture and/or sale of allegedly defective products (particularly as to firearms and ammunition) is uncertain, there can be no assurance that our resources will be adequate to cover pending and future product liability occurrences, cases or claims, in the aggregate, or that a material adverse effect upon our financial condition or results of operations will not result therefrom. Because of the nature of our products, we anticipate that we will continue to be involved in product liability litigation in the future. Because of the potential nature of injuries relating to firearms and ammunition, certain public perceptions of our products, and recent efforts to expand liability of manufacturers of firearms and ammunition, product liability cases and claims, and insurance costs associated with such cases and claims, may cause us to incur significant costs.

Municipal Litigation

In addition to the individual cases, as a manufacturer of shotguns and rifles, Remington has been named in only three of the actions brought by approximately 30 municipalities, primarily against manufacturers, distributors and sellers of handguns: (i) City of Boston, et al. v. Smith & Wesson, et al., No. 99-2590 (Suffolk Super Ct.); (ii) City of St. Louis, Missouri v. Henry Cernicek, et al., No. 992-01209 (Cir. Ct. St. Louis) & 00 Civil 1895 (U.S. Dist. Ct E.D. Missouri); and (iii) City of New York, et al. v. B.L. Jennings, Inc., et al., 00 Civil 3641 (JBW) (U.S. Dist. Ct. E.D.N.Y.). As a general matter, these lawsuits name several dozens of firearm industry participants as defendants, and claim that the defendants’ distribution practices allegedly permitted their products to enter a secondary market, from which guns can be obtained by unauthorized users; that defendants fail to include adequate safety devices in their firearms to prevent unauthorized use and accidental misuse; and that defendants’ conduct has created a public nuisance. Plaintiffs generally seek injunctive relief and money damages (consisting of the cost of providing certain city services and lost tax and other revenues), and in some cases, punitive damages, as well.

In City of Boston, first filed in 1999, an order granting plaintiff’s March 27, 2002 request to dismiss the case with prejudice as to all defendants was entered on April 1, 2002.

In City of New York, the New York City Health and Hospitals Corp., and certain city officials filed an Amended Complaint, dated September 1, 2000, in the U.S. District Court for the Eastern District of New York naming Remington and other entities In August 2001, the City indicated its intention to file a second amended complaint. However, in part as a result of the events of September 11, the court in December 2001 granted the City’s request that the case be put on hold pending the appeal by the State of New York of the dismissal of its separate lawsuit against handgun manufacturers (in which we were not a defendant). The City’s appeal was denied by the state appellate courts in 2003, and in January 2004, the federal district court granted the City’s motion to lift the stay and file an amended complaint, which no longer names Remington or other defendants who manufacture only long guns.

In City of St. Louis, a First Amended Complaint naming Remington and other entities, and seeking unspecified amounts of compensatory and punitive damages from all defendants, was filed on August 15, 2000, in Circuit Court of the City of St. Louis. The case was removed on November 29, 2000, to the U.S. District Court for the Eastern District of Missouri by a third-party defendant and on September 25, 2001, the federal court remanded the case to state court. On March 1, 2002, the St. Louis City court granted the defendants’ motion to transfer venue to the Circuit Court for St. Louis County, and defendants’ motion to dismiss in this new venue was argued on February 28, 2003. On October 15, 2003, the court granted defendants’ motions to dismiss. On July 27, 2004, the City’s appeal of the ruling was rejected by the Missouri Court Appeals, Eastern District, which held that the lawsuit was barred by a state statute expressly forbidding such actions, enacted on October 12, 2003.

To date, 12 municipal lawsuits (including City of Boston) have been dismissed and are no longer subject to appeal. Three more dismissals, including that involving numerous local California governments, are on appeal, and two more have been dismissed, with no appeals pending. The remaining lawsuits are in various stages of motion practice and discovery. As has Missouri, a majority of states have enacted some limitation on the ability of local governments to file such lawsuits against firearms manufacturers. In addition, similar legislation limiting such lawsuits on a federal level was proposed in both houses of Congress. In April 2003, the House of Representatives approved legislation that would limit lawsuits against firearms manufacturers based on the criminal or unlawful acts of third parties. However, in March 2004, similar legislation was defeated in the Senate.

In the spring of 2000, the Federal Trade Commission and the attorneys general of several states instituted investigations into allegations of anticompetitive retaliation against Smith & Wesson by other participants in the firearms industry. In 2000 and 2001, Remington received and replied to civil investigative demands and subpoenae duces tecum and other discovery requests from the State of Connecticut and the Federal Trade Commission (which in 2003, closed its inquiry without taking any action.) Remington, which makes only long guns, does not compete with Smith & Wesson, which makes handguns

Heritage Fund

In recognition of and support of certain legal and legislative initiatives, the shooting sports industry established the Hunting and Shooting Sports Heritage Fund of which the Company is a member. The Company has historically made contributions to the Heritage Fund ranging from 0.5% to 1% of the Company’s net sales (after certain adjustments). The Company did not make contributions to the Heritage Fund related to the period from January 1, 2003 through March 31, 2004. The Company began accruing for contributions of 0.5% of net sales relating to certain domestically sold ammunition products (after certain adjustments) beginning in the second quarter of 2004.

Certain Indemnities

As of the closing of the Acquisition in December 1993 under the Purchase Agreement, we assumed:

• a number of specified liabilities, including certain trade payables and contractual obligations of the sellers;

• limited financial responsibility for specified product liability claims relating to disclosed occurrences arising prior to the Acquisition;

• limited financial responsibility for environmental claims relating to the operation of the business prior to the Acquisition; and

• liabilities for product liability claims relating to occurrences after the Acquisition, except for claims involving discontinued products.

All other liabilities relating to or arising out of the operation of the business prior to the Acquisition are excluded liabilities (the “Excluded Liabilities”), which the sellers retained. The sellers are required to indemnify Remington and its affiliates in respect of the Excluded Liabilities, which include, among other liabilities:

• liability in excess of our limited financial responsibility for environmental claims and disclosed product liability claims relating to pre-closing occurrences;

• liability for product liability litigation related to discontinued products; and

• certain tax liabilities, and employee and retiree compensation and benefit liabilities.

The sellers’ overall liability in respect of their representations, covenants and the Excluded Liabilities under the Purchase Agreement, excluding environmental liabilities and product liability matters relating to events occurring prior to the purchase but not disclosed, or relating to discontinued products, is limited to $324.8 million. With a few exceptions, the sellers’ representations under the Purchase Agreement have expired. We made claims for indemnification involving product liability issues prior to such expiration. See “—Legal Proceedings”.

In addition, the sellers agreed in 1996 to indemnify us against a portion of certain product liability costs involving various shotguns manufactured prior to 1995 and arising from occurrences on or prior to November 30, 1999. These indemnification obligations of the sellers relating to product liability and environmental matters (subject to a limited exception) are not subject to any survival period limitation, deductible or other dollar threshold or cap. We and the sellers are also party to separate agreements setting forth agreed procedures for the management and disposition of environmental and product liability claims and proceedings relating to the operation or ownership of the business prior to the Acquisition, and are currently engaged in the joint defense of certain product liability claims and proceedings. See “—Legal Proceedings.”

Item 2. Changes in Securities and Use of Proceeds

There are no matters to report subject to this Item for the period ended June 30, 2004.

Item 3. Defaults Upon Senior Securities

There are no matters to report subject to this Item for the period ended June 30, 2004.

Item 4. Submission of Matters to a Vote of Security Holders

There are no matters to report subject to this Item for the period ended June 30, 2004.

Item 5. Other Information

There are no matters to report subject to this Item for the period ended June 30, 2004.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

31.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

The following exhibits shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. In addition, Exhibit No. 32.1 and Exhibit No. 32.2 shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934

32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

During the quarter ended June 30, 2004, the Company did not file a Current Report on Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

REMINGTON ARMS COMPANY, INC. /s/ Mark A. Little Mark A. Little Executive Vice President, Chief Financial Officer and Chief Administrative Officer (Principal Financial Officer)

August 10, 2004

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