Sturm, Ruger & Company, Inc. Reports First Quarter Fully Diluted Earnings of $1.20 Per Share and Div

Sturm, Ruger & Company, Inc. Reports First Quarter Fully Diluted Earnings of $1.20 Per Share and Dividend of 49¢ Per Share

SOUTHPORT, Conn.--(BUSINESS WIRE)-- Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the first quarter of 2013 the Company reported net sales of $155.9 million and fully diluted earnings of $1.20 per share, compared with net sales of $112.3 million and fully diluted earnings of 79¢ per share in the first quarter of 2012.

The Company also announced today that its Board of Directors declared a dividend of 49¢ per share for the first quarter, for shareholders of record as of May 10, 2013, payable on May 24, 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 53% from the first quarter of 2012, driven by the 39% 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 $53.3 million or 35% of firearm sales in the first quarter of 2013. New product introductions in the first quarter of 2013 included the LC380 pistol and the SR45 pistol.

  • The estimated sell-through of our products from independent distributors to retailers in the first quarter of 2013 increased 12% from the first quarter of 2012. This estimated unit sell-through was effectively limited to first quarter production because distributor inventory totaled only 59,200 units at December 31, 2012. For reference, at December 31, 2011, the distributor inventory totaled 135,600 units, allowing Q1 2012 sell-through to exceed Q1 2012 production by 22%. During the first quarter of 2013, National Instant Criminal Background Check System ("NICS") background checks (as adjusted by the National Shooting Sports Foundation) increased 46%.

  • Cash generated from operations during the first quarter of 2013 was $30.4 million. At March 30, 2013, our cash and cash equivalents totaled $45.6 million. Our current ratio is 1.6 to 1 and we have no debt.

  • In the first quarter of 2013, capital expenditures totaled $7.7 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 the first quarter of 2013, the Company returned $7.8 million to its shareholders through the payment of dividends.

  • At March 30, 2013, stockholders' equity was $111.6 million, which equates to a book value of $5.78 per share, of which $2.36 per share was cash and equivalents.

Today, the Company filed its Quarterly Report on Form 10-Q for the first quarter of 2013. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

Tomorrow, April 30, 2013, Sturm, Ruger will host a webcast at 12:00 p.m. EDT of its Annual Meeting of Stockholders. Interested parties can access the webcast at www.ruger.com/corporateor www.earnings.com or by dialing 800-295-4740, participant code 60546881.

The Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q 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.

CONDENSED BALANCE SHEETS

(Dollars in thousands)

March 30,
2013

December 31,
2012

Assets

Current Assets

Cash

$

45,611

$

30,978

Trade receivables, net

59,482

43,018

Gross inventories

54,275

55,827

Less LIFO reserve

(38,221

)

(38,089

)

Less excess and obsolescence reserve

(1,964

)

(1,729

)

Net inventories

14,090

16,009

Deferred income taxes

7,521

5,284

Prepaid expenses and other current assets

1,101

1,632

Total Current Assets

127,805

96,921

Property, plant and equipment

203,256

195,713

Less allowances for depreciation

(133,821

)

(129,720

)

Net property, plant and equipment

69,435

65,993

Deferred income taxes

2,451

2,004

Other assets

11,784

9,568

Total Assets

$

211,475

$

174,486

STURM, RUGER & COMPANY, INC.

CONDENSED BALANCE SHEETS (Continued)

(Dollars in thousands, except share data)

March 30,
2013

December 31,
2012

Liabilities and Stockholders' Equity

Current Liabilities

Trade accounts payable and accrued expenses

$

41,461

$

38,500

Product liability

991

720

Employee compensation and benefits

19,163

15,182

Workers' compensation

4,475

4,600

Income taxes payable

14,622

489

Total Current Liabilities

80,712

59,491

Accrued pension liability

18,873

19,626

Product liability

252

337

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

2013 - 23,618,934 issued,

19,319,500 outstanding

2012 - 23,562,422 issued,

19,262,988 outstanding

23,619

23,563

Additional paid-in capital

16,470

15,531

Retained earnings

139,053

123,442

Less: Treasury stock - at cost

2013 and 2012 - 4,299,434 shares

(37,884

)

(37,884

)

Accumulated other comprehensive loss

(29,620

)

(29,620

)

Total Stockholders' Equity

111,638

95,032

Total Liabilities and Stockholders' Equity

$

211,475

$

174,486

STURM, RUGER & COMPANY, INC.

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(In thousands, except per share data)

Three Months Ended

March 30, 2013

March 31, 2012

Net firearms sales

$

153,440

$

110,787

Net castings sales

2,465

1,550

Total net sales

155,905

112,337

Cost of products sold

94,596

70,544

Gross profit

61,309

41,793

Operating expenses:

Selling

15,764

10,999

General and administrative

8,443

6,378

Total operating expenses

24,207

17,377

Operating income

37,102

24,416

Other income:

Interest expense, net

(16

)

(23

)

Other income, net

265

178

Total other income, net

249

155

Income before income taxes

37,351

24,571

Income taxes

13,633

9,091

Net income and comprehensive income

$

23,718

$

15,480

Basic earnings per share

$

1.23

$

0.81

Fully diluted earnings per share

$

1.20

$

0.79

Cash dividends per share

$

0.404

$

0.212

STURM, RUGER & COMPANY, INC.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

Three Months Ended

March 30,
2013

March 31,
2012

Operating Activities

Net income

$

23,718

$

15,480

Adjustments to reconcile net income to cash provided by operating
activities:

Depreciation and amortization

4,501

3,388

Slow moving inventory valuation adjustment

235

(53

)

Stock-based compensation

1,330

928

Gain on sale of assets

(70

)

-

Deferred income taxes

(2,684

)

(1,365

)

Changes in operating assets and liabilities:

Trade receivables

(16,464

)

(6,801

)

Inventories

1,684

2,649

Trade accounts payable and accrued expenses

2,836

2,611

Employee compensation and benefits

3,678

(4,238

)

Product liability

186

(65

)

Prepaid expenses, other assets and other liabilities

(2,676

)

5,119

Income taxes payable

14,133

4,188

Cash provided by operating activities

30,407

21,841

Investing Activities

Property, plant and equipment additions

(7,705

)

(3,047

)

Proceeds from sale of assets

70

-

Purchases of short-term investments

-

(19,994

)

Cash used for investing activities

(7,635

)

(23,041

)

Financing Activities

Tax benefit from exercise of stock options

1,747

922

Remittance of taxes withheld from employees related to
share-based compensation

(2,082

)

(884

)

Dividends paid

(7,804

)

(4,059

)

Cash used for financing activities

(8,139

)

(4,021

)

Increase (decrease) in cash and cash equivalents

14,633

(5,221

)

Cash and cash equivalents at beginning of period

30,978

81,056

Cash and cash equivalents at end of period

$

45,611

$

75,835



Sturm, Ruger & Company, Inc.
One Lacey Place
Southport, CT 06890
www.ruger.com
203-259-7843

KEYWORDS: United States North America Connecticut

INDUSTRY KEYWORDS:

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