RGR Sturm Ruger and Co

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

May 7, 2024

 

STURM, RUGER & COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware (State or Other Jurisdiction of Incorporation)

001-10435 (Commission File Number)

06-0633559 (IRS Employer Identification Number)

 

One Lacey Place, Southport, Connecticut	06890
(Address of Principal Executive Offices)	(Zip Code)

 

(203) 259-7843

Registrant’s telephone number, including area code

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	RGR	NYSE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Item 2.02

Results of Operations and Financial Condition

 

On May 7, 2024, the Company issued a press release to stockholders and other interested parties regarding financial results for the first quarter ended March 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit No.	Description
99.1	Press release of Sturm, Ruger & Company, Inc., dated May 7, 2024, reporting the financial results for the first quarter ended March 30, 2024.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

	STURM, RUGER & COMPANY, INC.
	By:	/S/ THOMAS A. DINEEN
		Name:	Thomas A. Dineen
		Title:	Principal Financial Officer,
			Principal Accounting Officer,
			Senior Vice President, Treasurer and
			Chief Financial Officer

 

 

Dated: May 7, 2024

 

 

EXHIBIT 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

STURM, RUGER & COMPANY, INC. REPORTS FIRST QUARTER

DILUTED EARNINGS OF 40¢ PER SHARE AND

DECLARES QUARTERLY DIVIDEND OF 16¢ PER SHARE

 

SOUTHPORT, CONNECTICUT, May 7, 2024--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:

 

o

a product mix shift toward products with relatively lower margins that remain in relatively stronger demand,

 

o

unfavorable deleveraging of fixed costs resulting from decreased production and sales, and

 

o

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;

 

o

the payment of $4.1 million of quarterly dividend, and

 

o

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%

 

 

v3.24.1.u1

Cover	May 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 07, 2024
Entity File Number	001-10435
Entity Registrant Name	STURM, RUGER & COMPANY, INC.
Entity Central Index Key	0000095029
Entity Tax Identification Number	06-0633559
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	One Lacey Place
Entity Address, City or Town	Southport
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06890
City Area Code	(203)
Local Phone Number	259-7843
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	RGR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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