Sturm, Ruger & Company, Inc. (NYSE: RGR) announced today
that for the first quarter of 2022 the Company reported net sales
of $166.6 million and diluted earnings of $1.70 per share, compared
with net sales of $184.4 million and diluted earnings of $2.16 per
share in the first quarter of 2021.
The Company also announced today that its Board of Directors
declared a dividend of 68¢ per share for the first quarter for
stockholders of record as of May 16, 2022, payable on May 31, 2022.
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 2022, “During the quarter, consumer demand for
firearms subsided from the unprecedented levels of the surge that
began early in 2020, resulting in the 10% reduction in our sales.
Consequently, we shifted our production mix to allow for a healthy
replenishment of Ruger firearms in our warehouses and in the
distribution channel, as inventories of many of our product
families were depleted in 2020. We prioritize production of our
product families in strong demand, often right down to the
individual model, in an effort to optimize the inventory mix at
each level of the distribution chain. Our operations and logistics
folks have done a great job navigating the challenges brought about
by tight labor markets, transportation issues, and supply chain
delays, which allowed for greater flexibility in our production mix
and mitigated the impact of these challenges.”
Mr. Killoy reaffirmed the Company’s commitment to new product
innovation, “Our new product development teams continue to design
and create the firearms of the future, many of which are recognized
by the industry. Most recently, the Ruger Custom Shop 10/22
Left-Handed Competition Rifle was awarded the prestigious Golden
Bullseye Award as the American Rifleman Rifle of the Year. We are
excited to see the ongoing progress of our Marlin product line. We
continue to increase production volumes and look forward to
re-introducing additional Ruger-made Marlin lever-action rifles
throughout this year. We are just scratching the surface of the
value that Marlin products and the Marlin brand will bring to
Ruger. We know that Ruger and Marlin fans alike are eagerly
awaiting additional offerings and we look forward to more new
product launches in 2022.”
Mr. Killoy made the following observations related to the
Company’s first quarter 2022 performance:
- The estimated unit sell-through of the Company’s products from
the independent distributors to retailers decreased 21% in the
first quarter of 2022 compared to the prior year period. For the
same period, the National Instant Criminal Background Check System
(“NICS”) background checks (as adjusted by the National Shooting
Sports Foundation) decreased 23%. These decreases are attributable
to decreased consumer demand for firearms from the unprecedented
levels of the surge that began in 2020 and remained for most of
2021.
- Sales of new products, including the PC Charger, the MAX-9
pistol, the LCP MAX pistol, and the Marlin 1895 lever-action rifle,
represented $21.4 million or 13% of firearm sales in the first
quarter of 2022. New product sales include only major new products
that were introduced in the past two years. Several popular
firearms that were considered new products in 2021, including the
Wrangler revolver, the Ruger-5.7 pistol, and the LCP II in .22 LR
pistol, have now been in production for over two years and are no
longer included in new product sales for the first quarter of
2022.
- Our profitability declined in the first quarter of 2022 from
the first quarter of 2021 as our gross margin decreased from 39.4%
to 34.9% and our operating profit margin decreased from 28.2% to
23.2%. In addition to unfavorable deleveraging of fixed costs
resulting from decreased production and sales, inflationary cost
increases in materials, commodities, services, energy, fuel and
transportation, partially offset by increased pricing, resulted in
the lower margins.
- During the first quarter of 2022, the Company’s finished goods
inventory and distributor inventories of the Company’s products
increased 29,800 units and 80,400 units, respectively.
- Cash provided by operations during the first quarter of 2022
was $18.8 million. At April 2, 2022, our cash and short-term
investments totaled $211.6 million. Our current ratio is 5.1 to 1
and we have no debt.
- In the first quarter of 2022, capital expenditures totaled
$10.9 million. We expect our 2022 capital expenditures to total
approximately $25 million, most of which relate to new product
introductions.
- In the first quarter of 2022, the Company returned $15.2
million to its shareholders through the payment of dividends.
- At April 2, 2022, stockholders’ equity was $378.0 million,
which equates to a book value of $21.43 per share, of which $12.00
per share was cash and short-term investments.
Today, the Company filed its Quarterly Report on Form 10-Q for
the first quarter of 2022. The financial statements included in
this Quarterly Report on Form 10-Q are attached to this press
release.
Tomorrow, May 5, 2022, Sturm, Ruger will host a webcast at 9:00
a.m. ET to discuss the first quarter operating results.
Interested parties can access the
webcast at Ruger.com/corporate or by dialing 855-871-7398,
participant code 1188423.
The Company will host a
virtual Annual Meeting of Shareholders at 9 a.m. ET on
Wednesday, June 1, 2022. The virtual meeting is open to
shareholders as well as anyone interested in the Company. The login
information is available at www.virtualshareholdermeeting.com/RGR2022.
The Quarterly Report on Form 10-Q for the first quarter of 2022
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 for the first quarter of 2022 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 more than 70 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)
April 2, 2022
December 31, 2021
Assets
Current Assets
Cash
$
41,586
$
21,044
Short-term investments
169,990
199,971
Trade receivables, net
69,347
57,036
Gross inventories
103,501
100,023
Less LIFO reserve
(52,674
)
(51,826
)
Less excess and obsolescence reserve
(3,913
)
(4,347
)
Net inventories
46,914
43,850
Prepaid expenses and other current
assets
8,416
6,832
Total Current Assets
336,253
328,733
Property, plant and equipment
431,439
421,282
Less allowances for depreciation
(353,310
)
(347,651
)
Net property, plant and equipment
78,129
73,631
Deferred income taxes
93
536
Other assets
32,003
39,443
Total Assets
$
446,478
$
442,343
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (Continued)
(Dollars in thousands, except per share
data)
April 2, 2022
December 31, 2021
Liabilities
and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued
expenses
$
33,874
$
36,400
Contract liabilities with customers
-
-
Product liability
503
795
Employee compensation and benefits
19,607
33,154
Workers’ compensation
6,956
6,760
Income taxes payable
5,237
-
Total Current Liabilities
66,177
77,109
Product liability accrual
100
97
Lease liability
2,248
1,476
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
2022 – 24,343,323 issued,
17,633,425 outstanding
2021 – 24,306,486 issued,
17,596,588 outstanding
24,343
24,306
Additional paid-in capital
46,328
46,847
Retained earnings
452,872
438,098
Less: Treasury stock – at cost
2022 – 6,709,898 shares
2021 – 6,709,898 shares
(145,590
)
(145,590
)
Total Stockholders’ Equity
377,953
363,661
Total Liabilities and Stockholders’
Equity
$
446,478
$
442,343
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands, except per share
data)
Three Months Ended
April 2, 2022
April 3, 2021
Net firearms sales
$
165,933
$
183,603
Net castings sales
642
774
Total net sales
166,575
184,377
Cost of products sold
108,467
111,811
Gross profit
58,108
72,566
Operating expenses:
Selling
8,435
8,088
General and administrative
10,946
12,522
Total operating expenses
19,381
20,610
Operating income
38,727
51,956
Other income:
Interest income
31
8
Interest expense
(91
)
(25
)
Other income, net
852
451
Total other income, net
792
434
Income before income taxes
39,519
52,390
Income taxes
9,287
14,198
Net income and comprehensive income
$
30,232
$
38,192
Basic earnings per share
$
1.72
$
2.18
Diluted earnings per share
$
1.70
$
2.16
Weighted average number of common shares
outstanding - Basic
17,610,202
17,559,624
Weighted average number of common shares
outstanding - Diluted
17,806,457
17,718,481
Cash dividends per share
$
0.86
$
0.71
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)
(Dollars in thousands)
Three Months Ended
April 2, 2022
April 3, 2021
Operating Activities
Net income
$
30,232
$
38,192
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
6,755
7,501
Stock-based compensation
1,672
3,381
Gain on sale of assets
(5
)
(11
)
Deferred income taxes
443
2,406
Changes in operating assets and
liabilities:
Trade receivables
(12,311
)
(15,289
)
Inventories
(3,064
)
323
Trade accounts payable and accrued
expenses
(2,232
)
(1,836
)
Contract liability with customers
-
(84
)
Employee compensation and benefits
(13,840
)
(16,495
)
Product liability
(289
)
(108
)
Prepaid expenses, other assets and other
liabilities
6,163
530
Income taxes payable
5,237
9,260
Cash provided by operating activities
18,761
27,770
Investing Activities
Property, plant and equipment
additions
(10,881
)
(5,516
)
Proceeds from sale of assets
-
11
Purchases of short-term investments
(29,992
)
(146,992
)
Proceeds from maturities of short-term
investments
59,973
146,002
Cash provided by (used for) investing
activities
19,100
(6,495
)
Financing Activities
Remittance of taxes withheld from
employees related to share-based compensation
(2,154
)
(4,801
)
Dividends paid
(15,165
)
(12,484
)
Cash used for financing activities
(17,319
)
(17,285
)
Increase in cash and cash equivalents
20,542
3,990
Cash and cash equivalents at beginning of
period
21,044
20,147
Cash and cash equivalents at end of
period
$
41,586
$
24,137
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
April 2, 2022
April 3, 2021
Net income
$
30,232
$
38,192
Income tax expense
9,287
14,198
Depreciation and amortization expense
6,755
7,501
Interest income
(31
)
(8
)
Interest expense
91
25
EBITDA
$
46,334
$
59,908
EBITDA margin
27.8
%
32.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504005837/en/
Sturm, Ruger & Company, Inc. One Lacey Place Southport, CT
06890 www.ruger.com 203-259-7843
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