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