RGR Sturm Ruger and Co

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