Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that
for the first quarter of 2024, net sales were $136.8 million and
diluted earnings were 40¢ per share. For the corresponding period
in 2023, net sales were $149.5 million and diluted earnings were
81¢ per share.
The Company also announced today that its Board of Directors
declared a dividend of 16¢ per share for the first quarter for
stockholders of record as of May 20, 2024, payable on June 7, 2024.
This dividend varies every quarter because the Company pays a
percentage of earnings rather than a fixed amount per share. This
dividend is approximately 40% of net income.
Chief Executive Officer Christopher J. Killoy commented on the
first quarter of 2024, “Although the overall firearms market
declined in the first quarter, demand for several of our product
families remained strong, including many of our recently introduced
products:
- 75th Anniversary Mark IV Target pistol,
- 75th Anniversary 10/22 rifles,
- 75th Anniversary LCP MAX pistol,
- American Rifle Generation II family of rifles,
- Mini-14 Tactical with side-folding stock, and
- LC Carbine chambered in .45 Auto.
This drove our sales increase from the fourth quarter and the
strong distributor sell-through of our products to retail and
resulted in significant reductions in both our finished goods
inventory and the inventory of our products at distributors during
the first quarter. We will continue to shift resources to increase
production and better capitalize on these areas of demand.”
Mr. Killoy continued, “We recently executed a variety of
strategic moves aimed at ensuring our long-term success and
continued leadership in an ever-evolving firearms market. This
involved reorganizing specific aspects of our business to achieve
greater efficiency and productivity. Consequently, we undertook a
reduction in force that impacted about 80 of our employees,
approximately half of which were reassigned to manufacturing
positions. This reduction in force resulted in a severance expense
of $1.5 million in the first quarter and will result in annualized
savings of approximately $9 million. As we focus on these goals, we
will continue to pursue opportunities to consolidate functions and
reduce or eliminate investment where possible.”
Mr. Killoy made the following observations related to the
Company’s first quarter 2024 performance:
- The estimated unit sell-through of the Company’s products from
the independent distributors to retailers increased 1% in the first
quarter of 2024 compared to the prior year period. For the same
period, NICS background checks, as adjusted by the National
Shooting Sports Foundation, decreased 4%.
- Sales of new products, including the Security-380 pistol, Super
Wrangler revolver, Marlin lever-action rifles, LC Carbine,
Small-Frame Autoloading Rifle, and American Centerfire Rifle
Generation II represented $42 million or 32% of firearm sales in
the first quarter of 2024, an increase from $30 million or 21% of
sales in the first quarter of 2023. New product sales include only
major new products that were introduced in the past two years.
- Our profitability declined in the first quarter of 2024 from
the first quarter of 2023 as our gross margin decreased from 26% to
21%. The lower margin was driven by:
- a product mix shift toward products with relatively lower
margins that remain in relatively stronger demand,
- unfavorable deleveraging of fixed costs resulting from
decreased production and sales, and
- inflationary cost increases in materials, commodities,
services, energy, fuel and transportation.
- During the first quarter of 2024, the Company’s finished goods
inventory and distributor inventories of the Company’s products
decreased 30,900 units and 51,300 units, respectively.
- Cash provided by operations during the first quarter of 2024
was $7.3 million. At March 30, 2024, our cash and short-term
investments totaled $115.3 million. Our current ratio is 5.2 to 1
and we have no debt.
- In the first quarter of 2024, capital expenditures totaled $1.8
million related to new product introductions, upgrades to our
manufacturing equipment and facilities. We expect our 2024 capital
expenditures to approximate $15 million.
- In the first quarter of 2024, the Company returned $7.3 million
to its shareholders through;
- the payment of $4.1 million of quarterly dividend, and
- the repurchase of 75,024 shares of its common stock in the open
market at an average price of $42.89 per share, for a total of $3.2
million.
- At March 30, 2024, stockholders’ equity was $332.0 million,
which equates to a book value of $19.08 per share, of which $6.63
per share was cash and short-term investments.
Today, the Company filed its Quarterly Report on Form 10-Q for
the first quarter of 2024. The financial statements included in
this Quarterly Report on Form 10-Q are attached to this press
release.
Tomorrow, May 8, 2024, Sturm, Ruger will host a webcast at 9:00
a.m. ET to discuss the first quarter 2024 operating results.
Interested parties can listen to the webcast via this link or by
visiting Ruger.com/corporate. Those who wish to ask questions
during the webcast will need to pre-register prior to the
meeting.
The Quarterly Report on Form 10-Q for the first quarter of 2024
is available on the SEC website at SEC.gov and the Ruger website at
Ruger.com/corporate. Investors are urged to read the complete
Quarterly Report on Form 10-Q to ensure that they have adequate
information to make informed investment judgments.
About Sturm, Ruger & Co.,
Inc.
Sturm, Ruger & Co., Inc. is one of the nation's leading
manufacturers of rugged, reliable firearms for the commercial
sporting market. With products made in America, Ruger offers
consumers almost 800 variations of more than 40 product lines,
across both the Ruger and Marlin brands. For 75 years, Ruger has
been a model of corporate and community responsibility. Our motto,
“Arms Makers for Responsible Citizens®,” echoes our commitment to
these principles as we work hard to deliver quality and innovative
firearms.
The Company may, from time to time, make forward-looking
statements and projections concerning future expectations. Such
statements are based on current expectations and are subject to
certain qualifying risks and uncertainties, such as market demand,
sales levels of firearms, anticipated castings sales and earnings,
the need for external financing for operations or capital
expenditures, the results of pending litigation against the
Company, the impact of future firearms control and environmental
legislation, and accounting estimates, any one or more of which
could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
made. The Company undertakes no obligation to publish revised
forward-looking statements to reflect events or circumstances after
the date such forward-looking statements are made or to reflect the
occurrence of subsequent unanticipated events.
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands)
March 30, 2024
December 31, 2023
Assets
Current Assets
Cash
$
15,807
$
15,174
Short-term investments
99,486
102,485
Trade receivables, net
65,815
59,864
Gross inventories
139,876
150,192
Less LIFO reserve
(65,555
)
(64,262
)
Less excess and obsolescence reserve
(5,825
)
(6,120
)
Net inventories
68,496
79,810
Prepaid expenses and other current
assets
8,971
14,062
Total Current Assets
258,575
271,395
Property, plant and equipment
464,080
462,397
Less allowances for depreciation
(396,325
)
(390,863
)
Net property, plant and equipment
67,755
71,534
Deferred income taxes
15,092
11,976
Other assets
43,555
43,912
Total Assets
$
384,977
$
398,817
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (Continued)
(Dollars in thousands, except per share
data)
March 30, 2024
December 31, 2023
Liabilities and Stockholders’
Equity
Current Liabilities
Trade accounts payable and accrued
expenses
$
29,675
$
31,708
Contract liabilities with customers
30
149
Product liability
309
634
Employee compensation and benefits
14,002
24,660
Workers’ compensation
6,036
6,044
Total Current Liabilities
50,052
63,195
Employee compensation
871
1,685
Product liability accrual
60
46
Lease liability
2,038
2,170
Contingent liabilities
-
-
Stockholders’ Equity
Common Stock, non-voting, par value
$1:
Authorized shares 50,000; none issued
-
-
Common Stock, par value $1:
Authorized shares – 40,000,000
2024 – 24,454,628 issued,
17,401,204 outstanding
2023 – 24,437,020 issued,
17,458,620 outstanding
24,455
24,437
Additional paid-in capital
47,289
46,849
Retained earnings
421,054
418,058
Less: Treasury stock – at cost
2024 – 7,053,424 shares
2023 – 6,978,400 shares
(160,842
)
(157,623
)
Total Stockholders’ Equity
331,956
331,721
Total Liabilities and Stockholders’
Equity
$
384,977
$
398,817
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands, except per share
data)
Three Months Ended
March 30, 2024
April 1, 2023
Net firearms sales
$
136,008
$
148,893
Net castings sales
812
560
Total net sales
136,820
149,453
Cost of products sold
107,417
110,967
Gross profit
29,403
38,486
Operating expenses:
Selling
9,706
9,225
General and administrative
12,166
12,240
Total operating expenses
21,872
21,465
Operating income
7,531
17,021
Other income:
Interest income
1,355
1,214
Interest expense
(17
)
(25
)
Other income, net
178
282
Total other income, net
1,516
1,471
Income before income taxes
9,047
18,492
Income taxes
1,963
4,142
Net income and comprehensive income
$
7,084
$
14,350
Basic earnings per share
$
0.41
$
0.81
Diluted earnings per share
$
0.40
$
0.81
Weighted average number of common shares
outstanding - Basic
17,434,178
17,678,686
Weighted average number of common shares
outstanding - Diluted
17,640,268
17,788,653
Cash dividends per share
$
0.23
$
5.42
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)
(Dollars in thousands
Three Months Ended
March 30, 2024
April 1, 2023
Operating Activities
Net income
$
7,084
$
14,350
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
5,833
6,536
Stock-based compensation
1,082
1,134
Gain on sale of assets
-
(2
)
Deferred income taxes
(3,116
)
(79
)
Changes in operating assets and
liabilities:
Trade receivables
(5,951
)
223
Inventories
11,314
3,038
Trade accounts payable and accrued
expenses
(2,057
)
(2,908
)
Contract liability with customers
(119
)
82
Employee compensation and benefits
(11,480
)
(12,739
)
Product liability
(311
)
232
Prepaid expenses, other assets and other
liabilities
5,066
(6,766
)
Income taxes payable
-
2,183
Cash provided by operating activities
7,345
5,284
Investing Activities
Property, plant and equipment
additions
(1,788
)
(1,652
)
Proceeds from sale of assets
-
3
Purchases of short-term investments
(39,488
)
(54,976
)
Proceeds from maturities of short-term
investments
42,487
92,081
Cash provided by investing activities
1,211
35,456
Financing Activities
Remittance of taxes withheld from
employees related to
share-based compensation
(624
)
(2,103
)
Repurchase of common stock
(3,219
)
-
Dividends paid
(4,080
)
(95,758
)
Cash used for financing activities
(7,923
)
(97,861
)
Increase (decrease) in cash and cash
equivalents
633
(57,121
)
Cash and cash equivalents at beginning of
period
15,174
65,173
Cash and cash equivalents at end of
period
$
15,807
$
8,052
Non-GAAP Financial Measures
In an effort to provide investors with additional information
regarding its financial results, the Company refers to various
United States generally accepted accounting principles (“GAAP”)
financial measures and two non-GAAP financial measures, EBITDA and
EBITDA margin, which management believes provides useful
information to investors. These non-GAAP financial measures may not
be comparable to similarly titled financial measures being
disclosed by other companies. In addition, the Company believes
that the non-GAAP financial measures should be considered in
addition to, and not in lieu of, GAAP financial measures. The
Company believes that EBITDA and EBITDA margin are useful to
understanding its operating results and the ongoing performance of
its underlying business, as EBITDA provides information on the
Company’s ability to meet its capital expenditure and working
capital requirements, and is also an indicator of profitability.
The Company believes that this reporting provides better
transparency and comparability to its operating results. The
Company uses both GAAP and non-GAAP financial measures to evaluate
the Company’s financial performance.
EBITDA is defined as earnings before interest, taxes, and
depreciation and amortization. The Company calculates this by
adding the amount of interest expense, income tax expense, and
depreciation and amortization expenses that have been deducted from
net income back into net income, and subtracting the amount of
interest income that was included in net income from net income to
arrive at EBITDA. The Company calculates EBITDA margin by dividing
EBITDA by total net sales.
Non-GAAP Reconciliation –
EBITDA
EBITDA
(Unaudited, dollars in thousands)
Three Months Ended
March 30, 2024
April 1, 2023
Net income
$
7,084
$
14,350
Income tax expense
1,963
4,142
Depreciation and amortization expense
5,833
6,536
Interest income
(1,355
)
(1,214
)
Interest expense
17
25
EBITDA
$
13,542
$
23,839
EBITDA margin
9.9
%
16.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507531659/en/
Sturm, Ruger & Company, Inc. One Lacey Place Southport, CT
06890 www.ruger.com 203-259-7843
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