Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that
for the first quarter of 2023, net sales were $149.5 million and
diluted earnings were 81¢ per share. For the corresponding period
in 2022, net sales were $166.6 million and diluted earnings were
$1.70 per share.
The Company also announced today that its Board of Directors
declared a dividend of 32¢ per share for the first quarter for
stockholders of record as of May 15, 2023, payable on May 31, 2023.
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 2023, “Decreased consumer demand led to a 10%
reduction in first quarter sales compared to the prior year. We
took a disciplined approach, targeted a production mix that better
aligned with consumer demand, and continued to responsibly manage
our overall production levels to reflect market conditions as we
did throughout 2022. This is evidenced by the slight reduction in
both our finished goods inventory and the inventory of our products
at distributors, which sets us on a solid path for the remainder of
the year.”
Mr. Killoy reiterated the Company’s steadfast commitment to its
disciplined approach, “Our long-term focus will continue to yield
strong cash flow, prioritize the development of innovative new
products, and safeguard our robust, debt-free balance sheet, which
in turn will allow us to withstand the volatility of the
ever-changing firearms market.”
Mr. Killoy concluded by commenting on recent legislation
targeting discrimination against members of the firearms industry
by the financial service industry, “We are encouraged by the
actions taken by several states prohibiting state agencies from
engaging with banks that discriminate against the law-abiding and
highly regulated businesses in the firearm and ammunition industry.
We are hopeful that federal legislation to discourage such
practices, including the Firearm Industry Non-Discrimination Act
(or the FIND Act), will be enacted to put an end to this unjust
treatment of our industry. This hits us close to home as we have
been notified twice in the past five years by two of the nation’s
largest banks, Bank of America and Wells Fargo, that they would not
provide us with any credit because of the lawful products that we
design, manufacture, and sell.”
Mr. Killoy made the following observations related to the
Company’s first quarter 2023 performance:
- The estimated unit sell-through of the Company’s products from
the independent distributors to retailers decreased 5% in the first
quarter of 2023 compared to the prior year period. For the same
period, NICS background checks, as adjusted by the National
Shooting Sports Foundation, decreased 1%.
- Sales of new products, including the MAX-9 pistol, LCP MAX
pistol, Marlin 1895 lever-action rifles, LC Carbine, Small-Frame
Autoloading Rifle, Super Wrangler, and the Security-380 pistol
represented $30.0 million or 21% of firearm 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 2023 from
the first quarter of 2022 as our gross margin decreased from 35% to
26%. The lower margin was driven by:
- unfavorable deleveraging of fixed costs resulting from
decreased production and sales,
- inflationary cost increases in materials, commodities,
services, energy, fuel and transportation,
- a product mix shift toward products with relatively lower
margins, for many of which the Company had significantly
underserved the market demand since early in 2020, and
- increased sales promotional costs.
- During the first quarter of 2023, the Company’s finished goods
inventory and distributor inventories of the Company’s products
decreased 3,900 units and 6,600 units, respectively.
- Cash provided by operations during the first quarter of 2023
was $5.3 million. At April 1, 2023, our cash and short-term
investments totaled $130.0 million. Our current ratio is 4.3 to 1
and we have no debt.
- In the first quarter of 2023, capital expenditures totaled $1.7
million related to new product introductions, upgrades to our
manufacturing equipment and facilities. We expect our 2023 capital
expenditures to approximate $20 million.
- In the first quarter of 2023, the Company returned $95.8
million to its shareholders through the payment of a quarterly
dividend and a $5.00 per share special dividend.
- At April 1, 2023, stockholders’ equity was $322.1 million,
which equates to a book value of $18.19 per share, of which $7.35
per share was cash and short-term investments.
Today, the Company filed its Quarterly Report on Form 10-Q for
the first quarter of 2023. The financial statements included in
this Quarterly Report on Form 10-Q are attached to this press
release.
On Thursday, May 4, 2023, Sturm, Ruger will host a webcast at
9:00 a.m. ET to discuss the first quarter 2023 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 2023
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 almost 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)
April 1, 2023
December 31, 2022
Assets
Current Assets
Cash
$
8,052
$
65,173
Short-term investments
122,027
159,132
Trade receivables, net
65,226
65,449
Gross inventories
127,933
129,294
Less LIFO reserve
(61,016
)
(59,489
)
Less excess and obsolescence reserve
(4,962
)
(4,812
)
Net inventories
61,955
64,993
Prepaid expenses and other current
assets
6,717
7,091
Total Current Assets
263,977
361,838
Property, plant and equipment
448,657
447,126
Less allowances for depreciation
(376,382
)
(370,273
)
Net property, plant and equipment
72,275
76,853
Deferred income taxes
6,188
6,109
Other assets
46,657
39,963
Total Assets
$
389,097
$
484,763
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (Continued)
(Dollars in thousands, except per share
data)
April 1, 2023
December 31, 2022
Liabilities and Stockholders’
Equity
Current Liabilities
Trade accounts payable and accrued
expenses
$
33,356
$
35,658
Dividends payable
-
88,343
Contract liabilities with customers
1,113
1,031
Product liability
493
235
Employee compensation and benefits
17,415
30,160
Workers’ compensation
5,863
6,469
Income taxes payable
3,354
1,171
Total Current Liabilities
61,594
163,067
Employee compensation
2,488
1,846
Product liability accrual
47
73
Lease liability
2,900
3,039
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
2023 – 24,422,419 issued,
17,708,081 outstanding
2022 – 24,378,568 issued,
17,664,230 outstanding
24,422
24,378
Additional paid-in capital
44,062
45,075
Retained earnings
399,396
393,097
Less: Treasury stock – at cost
2023 – 6,714,338 shares
2022 – 6,714,338 shares
(145,812
)
(145,812
)
Total Stockholders’ Equity
322,068
316,738
Total Liabilities and Stockholders’
Equity
$
389,097
$
484,763
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands, except per share
data)
Three Months Ended
April 1, 2023
April 2, 2022
Net firearms sales
$
148,893
$
165,933
Net castings sales
560
642
Total net sales
149,453
166,575
Cost of products sold
110,967
108,467
Gross profit
38,486
58,108
Operating expenses:
Selling
9,225
8,435
General and administrative
12,240
10,946
Total operating expenses
21,465
19,381
Operating income
17,021
38,727
Other income:
Interest income
1,214
31
Interest expense
(25
)
(91
)
Other income, net
282
852
Total other income, net
1,471
792
Income before income taxes
18,492
39,519
Income taxes
4,142
9,287
Net income and comprehensive income
$
14,350
$
30,232
Basic earnings per share
$
0.81
$
1.72
Diluted earnings per share
$
0.81
$
1.70
Weighted average number of common shares
outstanding - Basic
17,678,686
17,610,202
Weighted average number of common shares
outstanding - Diluted
17,788,653
17,806,457
Cash dividends per share
$
5.42
$
0.86
STURM, RUGER & COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)
(Dollars in thousands)
Three Months Ended
April 1, 2023
April 2, 2022
Operating Activities
Net income
$
14,350
$
30,232
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
6,536
6,755
Stock-based compensation
1,134
1,672
Gain on sale of assets
(2
)
(5
)
Deferred income taxes
(79
)
443
Changes in operating assets and
liabilities:
Trade receivables
223
(12,311
)
Inventories
3,038
(3,064
)
Trade accounts payable and accrued
expenses
(2,908
)
(2,232
)
Contract liability with customers
82
-
Employee compensation and benefits
(12,739
)
(13,840
)
Product liability
232
(289
)
Prepaid expenses, other assets and other
liabilities
(6,766
)
6,163
Income taxes payable
2,183
5,237
Cash provided by operating activities
5,284
18,761
Investing Activities
Property, plant and equipment
additions
(1,652
)
(10,881
)
Proceeds from sale of assets
3
-
Purchases of short-term investments
(54,976
)
(29,992
)
Proceeds from maturities of short-term
investments
92,081
59,973
Cash provided by investing activities
35,456
19,100
Financing Activities
Remittance of taxes withheld from
employees related to
share-based compensation
(2,103
)
(2,154
)
Dividends paid
(95,758
)
(15,165
)
Cash used for financing activities
(97,861
)
(17,319
)
(Decrease) increase in cash and cash
equivalents
(57,121
)
20,542
Cash and cash equivalents at beginning of
period
65,173
21,044
Cash and cash equivalents at end of
period
$
8,052
$
41,586
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 1, 2023
April 2, 2022
Net income
$
14,350
$
30,232
Income tax expense
4,142
9,287
Depreciation and amortization expense
6,536
6,755
Interest income
(1,214
)
(31
)
Interest expense
25
91
EBITDA
$
23,839
$
46,334
EBITDA margin
16.0
%
27.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005664/en/
Sturm, Ruger & Company, Inc. One Lacey Place Southport, CT
06890 www.ruger.com 203-259-7843
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