Mark Heitz of Tactical Firearms in Kingston, N.H., looks over a civilian version of the Colt M4 carbine during the annual SHOT (Shooting, Hunting, Outdoor Trade) Show in Las Vegas, in 2013. (Steve Marcus/Las Vegas Sun via Reuters)

Facing declining sales and more competition for defense contracts, iconic gun maker Colt said late Sunday that it would have to file for bankruptcy protection to stay afloat.

The company says that fewer people are buying its rifles and handguns and that it’s having issues with its government contracts. Colt lost money last year as its revenue slid by almost a third, making it difficult to keep up with its bills, the company said.

Colt isn’t the only gun maker to struggle with slipping sales in recent years. Smith and Wesson, for example, recorded a 10 percent drop in its first-quarter sales this year.

Colt says it won’t be able to keep up with its bills or pay down its debt unless someone buys it soon. It filed in the U.S. Bankruptcy Court for the District of Delaware and says Chapter 11 protection will help to speed up a sale of the company. Sciens Capital Management, a private equity firm, has made a buyout bid.

The Connecticut company is a longtime American icon. It made the famous Colt .45 revolver, and its history dates to 1836, when Samuel Colt opened his first factory in New Jersey. Colt’s rifles and handguns will still be available for sale while the company seeks bankruptcy protection.

Like other gun makers, Colt’s sales skyrocketed when President Obama pushed in 2012 to reinstate a national ban on assault rifles. But Congress didn’t pass such a ban, and gun sales have slumped across the industry.

Gun makers are only now starting to rebound from that decline, said Rommel Dionisio, who follows the industry for Wunderlich Securities.

“People thought that there was a good chance that these types of firearms would be banned, so everyone sort of flooded into stores and bought up every modern sporting rifle, assault rifle off the shelves,” Dionisio said. “After that surge, the industry went through a prolonged slowdown.”

For Colt, the declining sales coincided with new competition for government contracts.

For more than a decade, the company was the only maker of the M4 carbine rifle, which is used widely by the Army. But in 2012, it lost the contract. Remington and FN Herstal have since won deals to make the rifle.

Colt says it won’t change its management during its bankruptcy proceedings and sale. Chief executive Dennis Veilleux has led the company since October 2013.

The company previously filed for bankruptcy protection in 1992 after negotiations with creditors failed. It emerged a few years later.

“We are confident (Chapter 11) is the best path going forward and will enable us to continue to gain traction on a challenging but achievable turnaround,” Keith Maib, Colt’s chief restructuring officer, said in a statement. “Colt remains open for business.”