Sturm, Ruger & Company, Inc. Reports 2012 Fully Diluted Earnings of $3.60 Per Share and Declares Div
Sturm, Ruger & Company, Inc. Reports 2012 Fully Diluted Earnings of $3.60 Per Share and Declares Dividend of 40.4¢ Per Share
SOUTHPORT, Conn.--(BUSINESS WIRE)-- Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for 2012, the Company reported net sales of $491.8 million and fully diluted earnings of $3.60 per share, compared with net sales of $328.8 million and fully diluted earnings of $2.09 per share in 2011.
For the fourth quarter of 2012, net sales were $141.8 million and fully diluted earnings were $1.00 per share. For the corresponding period in 2011, net sales were $93.2 million and fully diluted earnings were 54¢ per share.
The Company also announced today that its Board of Directors declared a dividend of 40.4¢ per share for the fourth quarter, for shareholders of record as of March 8, 2013, payable on March 22, 2013. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.
Chief Executive Officer Michael O. Fifer made the following observations related to the Company's results:
Our earnings increased 77% in 2012, driven by the 50% growth in sales and our ongoing focus on continuous improvement in our operations.
New product introductions were a significant component of our sales growth as new product sales represented $182.0 million or 38% of firearm sales in 2012. New product introductions in 2012 included:
the Ruger American rifle,
the 10/22 TakeDown rifle,
the SR22 pistol,
the 22/45 Lite pistol, and
the Single-Nine revolver.
Demand for our products outpaced the growth in overall industry demand as measured by the National Instant Criminal Background Check System ("NICS") background checks (as adjusted by the National Shooting Sports Foundation) for both the fourth quarter and twelve months ended December 31, 2012 as illustrated below:
Period ended December 31, 2012 | |||||||||||
Q4 | Twelve months | ||||||||||
Increase in estimated Ruger Units Sold from Distributors to Retailers | 73% | 63% | |||||||||
Increase in total adjusted NICS Background Checks | 41% | 28% | |||||||||
Cash generated from operations during 2012 was $87.2 million. At December 31, 2012, our cash and cash equivalents totaled $31 million, a decrease of $50 million from December 2011 due to the $87 million special dividend paid in December. Our current ratio is 1.6 to 1 and we have no debt.
In 2012, capital expenditures totaled $27.3 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $30 million for capital expenditures during 2013.
In 2012, the Company returned $111.5 million to its shareholders through the payment of dividends.
At December 31, 2012, stockholders' equity was $95.0 million, which equates to a book value of $4.93 per share, of which $1.61 per share was cash and equivalents.
Today, the Company filed its Annual Report on Form 10-K for 2012. The financial statements included in this Annual Report on Form 10-K are attached to this press release.
The Annual Report on Form 10-K is available on the SEC website at www.sec.gov and the Ruger website at www.ruger.com/corporate. Investors are urged to read the complete Annual Report on Form 10-K to ensure that they have adequate information to make informed investment judgments.
About Sturm, Ruger
Sturm, Ruger was founded in 1949 and is one of the nation's leading manufacturers of high-quality firearms for the commercial sporting market. Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities located in Newport, NH and Prescott, AZ.
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. | ||||||
Balance Sheets | ||||||
(Dollars in thousands, except per share data) | ||||||
December 31, | 2012 | 2011 | ||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 30,978 | $ | 81,056 | ||
Trade receivables, net | 43,018 | 42,225 | ||||
Gross inventories | 55,827 | 49,004 | ||||
Less LIFO reserve | (38,089 | ) | (37,476 | ) | ||
Less excess and obsolescence reserve | (1,729 | ) | (1,311 | ) | ||
Net inventories | 16,009 | 10,217 | ||||
Deferred income taxes | 5,284 | 5,776 | ||||
Prepaid expenses and other current assets | 1,632 | 6,968 | ||||
Total Current Assets | 96,921 | 146,242 | ||||
Property, Plant, and Equipment | 195,713 | 169,142 | ||||
Less allowances for depreciation | (129,720 | ) | (116,195 | ) | ||
Net property, plant and equipment | 65,993 | 52,947 | ||||
Deferred income taxes | 2,004 | 32 | ||||
Other assets | 9,568 | 7,289 | ||||
Total Assets | $ | 174,486 | $ | 206,510 |
STURM, RUGER & COMPANY, INC. | ||||||
Balance Sheets (Continued) | ||||||
(Dollars in thousands, except per share data) | ||||||
December 31, | 2012 | 2011 | ||||
Liabilities and Stockholders' Equity | ||||||
Current Liabilities | ||||||
Trade accounts payable and accrued expenses | $ | 38,500 | $ | 28,592 | ||
Product liability | 720 | 1,305 | ||||
Employee compensation and benefits | 15,182 | 14,882 | ||||
Workers' compensation | 4,600 | 4,600 | ||||
Income taxes payable | 489 | 217 | ||||
Total Current Liabilities | 59,491 | 49,596 | ||||
Accrued pension liability | 19,626 | 19,082 | ||||
Product liability | 337 | 441 | ||||
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 | ||||||
2012 - 23,562,422 issued, | ||||||
19,262,988 outstanding | ||||||
2011 - 23,382,566 issued, | ||||||
19,083,132 outstanding | 23,563 | 23,383 | ||||
Additional paid-in capital | 15,531 | 10,454 | ||||
Retained earnings | 123,442 | 168,981 | ||||
Less: Treasury stock - at cost | ||||||
2012 and 2011 - 4,299,434 shares | (37,884 | ) | (37,884 | ) | ||
Accumulated other comprehensive loss | (29,620 | ) | (27,543 | ) | ||
Total Stockholders' Equity | 95,032 | 137,391 | ||||
Total Liabilities and Stockholders' Equity | $ | 174,486 | $ | 206,510 |
STURM, RUGER & COMPANY, INC. | |||||||||
Statements of Income and Comprehensive Income | |||||||||
(Dollars in thousands, except per share data) | |||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||
Net firearms sales | $ | 484,933 | $ | 324,200 | $ | 251,680 | |||
Net castings sales | 6,891 | 4,616 | 3,526 | ||||||
Total net sales | 491,824 | 328,816 | 255,206 | ||||||
Cost of products sold | 312,871 | 217,058 | 171,224 | ||||||
Gross profit | 178,953 | 111,758 | 83,982 | ||||||
Operating Expenses: | |||||||||
Selling | 38,363 | 28,691 | 23,517 | ||||||
General and administrative | 29,231 | 20,970 | 16,652 | ||||||
Other operating expenses (income), net | 293 | (319 | ) | 420 | |||||
Total operating expenses | 67,887 | 49,342 | 40,589 | ||||||
Operating income | 111,066 | 62,416 | 43,393 | ||||||
Other income: | |||||||||
Royalty income | 824 | 873 | 429 | ||||||
Interest income | 34 | 29 | 48 | ||||||
Interest expense | (95 | ) | (110 | ) | (143 | ) | |||
Other income, net | 280 | 308 | 422 | ||||||
Total other income, net | 1,043 | 1,100 | 756 | ||||||
Income before income taxes | 112,109 | 63,516 | 44,149 | ||||||
Income taxes | 41,480 | 23,501 | 15,894 | ||||||
Net income | 70,629 | 40,015 | 28,255 | ||||||
Other comprehensive (loss) income, net of tax: | |||||||||
Defined benefit pension plans | (2,077 | ) | (7,895 | ) | 714 | ||||
Comprehensive income | $ | 68,552 | $ | 32,120 | $ | 28,969 | |||
Basic Earnings Per Share | $ | 3.69 | $ | 2.12 | $ | 1.48 | |||
Fully Diluted Earnings Per Share | $ | 3.60 | $ | 2.09 | $ | 1.46 | |||
Cash Dividends Per Share | $ | 5.80 | $ | 0.43 | $ | 0.33 |
STURM, RUGER & COMPANY, INC. | |||||||||
Statements of Cash Flows | |||||||||
(Dollars in thousands) | |||||||||
Year ended December 31, | 2012 | 2011 | 2010 | ||||||
Operating Activities | |||||||||
Net income | $ | 70,629 | $ | 40,015 | $ | 28,255 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||
Depreciation and amortization | 14,888 | 12,148 | 9,207 | ||||||
Stock-based compensation | 4,718 | 2,953 | 2,589 | ||||||
Excess and obsolescence inventory reserve | 761 | (234 | ) | (1,057 | ) | ||||
Loss (gain) on sale of assets | (944 | ) | (26 | ) | 22 | ||||
Deferred income taxes | (1,480 | ) | 8,205 | 493 | |||||
Impairment charge | (1,134 | ) | - | - | |||||
Changes in operating assets and liabilities: | |||||||||
Trade receivables | (793 | ) | (10,660 | ) | (6,516 | ) | |||
Inventories | (6,553 | ) | (156 | ) | 888 | ||||
Trade accounts payable and accrued expenses | 9,908 | 11,807 | 3,932 | ||||||
Employee compensation and benefits | (4,345 | ) | 3,959 | (1,967 | ) | ||||
Product liability | (689 | ) | 724 | (1,060 | ) | ||||
Prepaid expenses, other assets and other liabilities | 1,947 | (10,961 | ) | (1,333 |
