In general, and not surprisingly, 2011 was a pretty bad year for paintball companies. However, it seems like almost to a one they all picked up from January 2012 through July. I'm not sure what to make of this because my window into history is so limited - is it because things slowed in the fall on a normal cycle, is it the abnormally warm weather of 2012, or something else? Hard to say with just a single snapshot.
One other not-so-surprising thing is that not a single paintball company is publishing their financials right now. However, it looks like at least Dye Precision was regularly publishing accountant-certified financial statements from 2003 to 2008. Most of the other companies did not have histories that went back that far because they have recently reincorporated in the last few years. In fact, a LOT of companies had reincorporated in 2011 or 2012. I think that further points to the poor cycle going on in 2011. Another thing before I get into the details is that the information I dig into is by definition trailing the current market. It depends on the paintball companies partners, suppliers, and whatever these companies are willing to self-report. This can lead to some inaccuracy, but when I bring up questionable results I'll qualify them with why my sources indicated the results that they did. Last point is that I did pull info for GOG, Planet Eclipse, and MacDev - however, all of these companies report a headquarters that is international and therefore I didn't get the full picture of what's going on with these businesses. The snapshot for those three, well - two really, will only be for any publically listed domestic operations.
On to the results! I listed the companies by measurable size in the United States.
1. Kee Action Sports
Kee is clearly the king of the hill, reporting 385 full-time employees and a $1,000,000 conservative credit limit. Kee has had the same management control, under George Eurick, for the past six years since incorporation. Interestingly, Kee is comparatively weak to other major players using my aggregate company scoring system (though just slightly), and displayed a much higher financial stress impact than most of the other companies as well. That's not unusual for a big player in a weakened market, and I'll qualify that by saying - in my own business experience - larger companies with better cash flow are more likely to be able to withstand a slowing market than their otherwise more agile competitors. Kee had a relatively average credit score of 448. My system expects that Kee has only about a 0.84% chance of going out of business in 2012 - that's about typical for the major manufacturers so I won't mention the rest explicitly.
The rest of the pack will start to come together after that giant, with Tippman the next largest financial company with a $200,000 credit limit. In comparison, this business "only" maintains 100 full-time employees in labor. Tippman is owned by Howard Kosick, Lori Sherwood, and Dennis Tippman. They have maintained present management control of the business for 26 years. Tippman had a fairly high credit score of 483, but has a couple of notable risks to future business. The first problem is two separate liens against the business for state tax by the State of Indiana - filed in 2010 and have now been resolved, though one shows updated data just recently on 7/05/2012. The lien amounts in total were concerning but not considerable (about 20k in total between the two). The other problem for Tippman in 2009 was a lawsuit brought for product liability in the state of Pennsylvania. As of today, the case resolution is still listed as pending. I haven't dug for more details, but it is docket number 200900020071 in Allegheny County if you want to investigate for yourself.
Kingman is a large debtor but has a small employee headcount, making the company appear larger than it may really be. They employ 25 heads and have a $100,000 conservative credit limit. Kingman appears in strong financial position with a high system score, a high credit score, and a good financial stress score. Kingman is tied with Bob Long for my rating of most secure companies, though they show a downward trend in performance over the past six months. Kingman was the victim of a toxic tort case in 2009 with judgement entered in July 2010. I didn't investigate it too much (if you want, it's San Francisco case CGCU09485693) because Toxic Tort is such an unusual case to bring against a paintball company. Kingman had a 545 credit score, and is owned by Arthur Chang.
4. Dye Precision, Inc.
Dye Precision employs slightly more people, 110, than Tippman, but has a lower credit limit of $95,000. Dye has been owned by David "Youngblood" Dehaan and Rhonda Dehaan for 18 years (17 for Rhonda). As said above, they have reported good financial strength between 2003 and 2008. From what I can tell, 2004 was probably the best year in that period based on my system ratings. Dye has had a significant number of credit checks by outside business since 2004 (31 total) - this is more a sign of healthy business transactions than anything else, but at that number it could also be an indicator of credit risk for overextension. This is already factored into their financial stress score and credit score of 486. Dye maintains at least one subsidiary in Europe.
Valken is the last of the major domestic players (though I'm going to mention the other smaller players in a second). Valken is somewhat weak on an overall system rating (just one point above Kee), but across the board all of Valken's financial metrics have been trending forward over the past 6 months. Valken has a conservative credit limit of $35,000 and employs 25 people. Valken is owned by Eugenio "Gino" Postorivo and he has maintained control since 2007. Valken has a current credit score of 422. In general, aside from the weak system score I thought this looked like one of the best companies in the group that I reviewed. I would expect continued growth based on the historical performance (though I temper that with the go-to financial advisor line I picked up in business school: "past performance is not a clear indicator of future performance.").
6. GOG Paintball
I'm going to take a brief second to talk about GOG, though there isn't much to say. All of their financial information is tied to an international location in Costa Rica which means I can't get access to it without spending more money than I'd be interested in spending. I will say that credit agencies still see the U.S. domestic location in Loyalhanna, PA as being out of business. That has not been updated since 2010, however. I did a phone investigation and it appears there are no other companies tied to GOG USA's published main phone number, though their fax number has belonged to a cleaning agency since 2010.
7. Smaller companies (Azodin, Bob Long, MacDev USA, Planet Eclipse USA, Dangerous Power)
There's not a lot of info on these smaller companies and company branches so these will each be one liners in a second. In general they all were measured as stable with a credit limit of $500 to $1,000.
Azodin - Only company to incorporate as an LLC. Gino, Arthur - you're small enough for an s-corp or LLC! Follow Azodin's example and get tax-free transfer to your shareholders. Interestingly, Azodin only reports present management since 2011, and reports their previous location as a completely separate business. Azodin does not list a current manager - nor do any of the rest of the small companies.
Bob Long - Had high system score marks tied with Kingman. Reports present management control for just the past 3 years.
MacDev USA - The USA operations seem to be small, with a somewhat weaker financial stress ability than the rest. Headquarters are in Australia.
Planet Eclipse USA - Reports 3 employees in the US, but headquarters and finances run from the United Kingdom.
Dangerous Power - The very weakest of the small companies. In addition, their phone number and address is shared with AMAZONE, Inc (implies same ownership). AMAZONE and Dangerous Power both had poor financial stress and credit scores. AMAZONE is also rated a D- by the BBB for unresolved customer complaints over a small pool of customer experiences.
8. The rest
I looked for credit info, well - any info really - for Unity Paintball, Thin Air Sports, and Machine, but I couldn't dig anything up. If you know a phone number or an address and are interested in finding out more like I was, just PM it to me.
My final remarks are to again say, with the exception of GOG and Dangerous Power I would say the grouping of 95% of these investigations was very similar. I don't know that I'd necessarily use this information to make a purchase decision (unless you are greatly concerned about toxic tort, maybe), but it might give you a peek into the window of how the paintball manufacturing business is going. If I can remember to come back to it, I set all of these files aside to keep giving me updates over time. I think it'd be interesting to come back to it in a year or 18 months to see what's changed.
9. Alien Paintball
This is a very interesting report to look at. Alien has just 2 employees but a conservative credit limit of $20,000. Alien is owned by Jack Rice and he has had present control of the company for five years. They have a fairly high system score, and it's been consistently higher in the past two quarters than the previous four quarters. This is likely due to taking and paying on a short term business credit loan. It would appear Alien has positioned themselves for growth in 2012, and with the strong paintball market in 2012 it appears to be a good bet to have made. Alien has a credit score of 457.
Edited by Unfated33, 20 July 2012 - 06:59 PM.