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)

July 31, 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 July 31, 2024, the Company issued a press release to stockholders and other interested parties regarding financial results for the second quarter ended June 29, 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 July 31, 2024, reporting the financial results for the second quarter ended June 29, 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: July 31, 2024

 

 

 

 

EXHIBIT 99.1

 

 

FOR IMMEDIATE RELEASE

 

STURM, RUGER & COMPANY, INC. REPORTS SECOND QUARTER

DILUTED EARNINGS OF 47¢ PER SHARE AND

DECLARES QUARTERLY DIVIDEND OF 19¢ PER SHARE

 

SOUTHPORT, CONNECTICUT, July 31, 2024--Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the second quarter of 2024, net sales were $130.8 million and diluted earnings were 47¢ per share. For the corresponding period in 2023, net sales were $142.8 million and diluted earnings were 91¢ per share.

For the six months ended June 29, 2024, net sales were $267.6 million and diluted earnings were 87¢ per share. For the corresponding period in 2023, net sales were $292.3 million and diluted earnings were $1.72 per share.

The Company also announced today that its Board of Directors declared a dividend of 19¢ per share for the second quarter for stockholders of record as of August 15, 2024, payable on August 30, 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 second quarter of 2024, “Although consumer demand in the firearms market declined from the second quarter of last year, the estimated sell-through of our products from our independent distributors to retailers bucked this trend and increased during the same period. This growth was primarily driven by the demand for many of our recently introduced products, including:

·

American Rifle Generation II family of rifles,

·

Marlin lever-action rifles, including the 1895 Dark Series and the 336 models,

·

LC Carbine chambered in .45 Auto,

·

75th Anniversary Mark IV Target pistol,

·

75th Anniversary 10/22 rifles,

·

75th Anniversary LCP MAX pistol, and

·

Mini-14 rifle with side-folding stock.

Further, the industry has recognized many of these innovative products with awards and accolades, including the recently announced Industry Choice Awards for:

·

Lever Gun of the Year (Marlin Dark Series Model 1895),

·

Carbine of the Year (LC Carbine in .45 Auto), and

·

High Overall Rifle of the Year (Ruger American Rifle Gen II Ranch).

We look forward to adding to this success with an exciting new product and more product derivatives that we plan to launch in the second half of the year.”

Mr. Killoy continued, “Earlier this year, we reorganized some aspects of our business and implemented a reduction in force to achieve greater efficiency, productivity, and flexibility throughout our organization. We are starting to realize the benefits of these actions. Despite a reduction in headcount, second quarter production increased 18% from the first quarter. We expect further improvements from the initiatives we are currently pursuing and we continue to look for additional opportunities to reduce or eliminate inefficiencies in every part of our business.”

Mr. Killoy concluded, “We remain focused on the long-term goal of creating shareholder value. Our disciplined pricing and promotion strategy may not always benefit current period sales and profitability, but instead enhances our long-term performance and promotes consistency throughout the distribution channel. Allowing both independent distributors and retailers to confidently invest in our inventory is essential to Ruger’s long-term success and leadership in the volatile firearms market. We continue to leverage our strong, debt-free balance sheet. In the first half of 2024, we repurchased 477,917 shares of our stock at an average cost of $42.41 per share, representing approximately 3% of our outstanding shares.”

Mr. Killoy made the following observations related to the Company’s second quarter 2024 performance:

·

The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 1% in both the second quarter and first half of 2024 compared to the prior year periods. For the same periods, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 8% and 6%, respectively.

 

·

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 $79.7 million or 31% of firearm sales in the first half of 2024, an increase from $63.3 million or 23% of sales in the first half of 2023. New product sales include only major new products that were introduced in the past two years.

 

·

Our profitability in the second quarter of 2024 improved from the first quarter of 2024 as we increased production, despite the reduction in headcount.

 

·

Compared to the second quarter of 2023, the Company’s and distributor’s finished goods inventories have been reduced by 13,300 units and 88,700 units, respectively, providing an opportunity for replenishment in the second half of the year.

 

·

Cash provided by operations during the first half of 2024 was $26.1 million. At June 29, 2024, our cash and short-term investments totaled $105.6 million. Our current ratio is 4.8 to 1 and we have no debt.

 

·

In the first half of 2024, capital expenditures totaled $10.4 million related to new product introductions, upgrades to our manufacturing equipment, and facilities. We expect our 2024 capital expenditures to approximate $20 million.

 

·

In the first half of 2024, the Company returned $27.1 million to its shareholders through:

 

o

the payment of $6.8 million of quarterly dividends, and

 

o

$20.3 million through the repurchase of shares of its common stock in the open market.

 

·

At June 29, 2024, stockholders’ equity was $321.5 million, which equates to a book value of $18.90 per share, of which $6.21 per share was cash and short-term investments.

 

Today, the Company filed its Quarterly Report on Form 10-Q for the second quarter of 2024. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

Tomorrow, August 1, 2024, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the second 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 second 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)

 

		June 29, 2024				December 31, 2023
Assets
Current Assets
Cash		$	7,153			$	15,174
Short-term investments			98,490				102,485
Trade receivables, net			56,119				59,864
Gross inventories			145,839				150,192
Less LIFO reserve			(66,854	)			(64,262	)
Less excess and obsolescence reserve			(5,653	)			(6,120	)
Net inventories			73,332				79,810
Prepaid expenses and other current assets			16,857				14,062
Total Current Assets			251,951				271,395
Property, plant and equipment			471,440				462,397
Less allowances for depreciation			(400,126	)			(390,863	)
Net property, plant and equipment			71,314				71,534
Deferred income taxes			14,727				11,976
Other assets			38,711				43,912
Total Assets		$	376,703			$	398,817

 

 

 

STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data)

 

		June 29, 2024				December 31, 2023
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses		$	29,583			$	31,708
Contract liabilities with customers			—				149
Product liability			314				634
Employee compensation and benefits			16,692				24,660
Workers’ compensation			5,432				6,044
Total Current Liabilities			52,021				63,195
Employee compensation			1,252				1,685
Product liability accrual			61				46
Lease liability			1,903				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 – 24,467,983 issued,
17,011,666 outstanding
2023 – 24,437,020 issued,
17,458,620 outstanding			24,468				24,437
Additional paid-in capital			48,346				46,849
Retained earnings			426,551				418,058
Less: Treasury stock – at cost
2024 – 7,456,317 shares
2023 – 6,978,400 shares			(177,899	)			(157,623	)
Total Stockholders’ Equity			321,466				331,721
Total Liabilities and Stockholders’ Equity		$	376,703			$	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								Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net firearms sales		$	129,829			$	141,853			$	265,837			$	290,746
Net castings sales			932				951				1,744				1,511
Total net sales			130,761				142,804				267,581				292,257
Cost of products sold			101,607				104,656				209,024				215,623
Gross profit			29,154				38,148				58,557				76,634
Operating expenses:
Selling			9,484				9,808				19,190				19,033
General and administrative			10,698				9,925				22,864				22,165
Total operating expenses			20,182				19,733				42,054				41,198
Operating income			8,972				18,415				16,503				35,436
Other income:
Interest income			1,329				1,479				2,684				2,693
Interest expense			(25	)			(30	)			(42	)			(55	)
Other income, net			179				369				357				651
Total other income, net			1,483				1,818				2,999				3,289
Income before income taxes			10,455				20,233				19,502				38,725
Income taxes			2,191				4,048				4,154				8,190
Net income and comprehensive income		$	8,264			$	16,185			$	15,348			$	30,535
Basic earnings per share		$	0.48			$	0.91			$	0.88			$	1.73
Diluted earnings per share		$	0.47			$	0.91			$	0.87			$	1.72
Weighted average number of common shares outstanding - Basic			17,343,341				17,714,471				17,388,509				17,696,579
Weighted average number of common shares outstanding - Diluted			17,618,508				17,826,205				17,615,244				17,798,521
Cash dividends per share		$	0.16			$	0.32			$	0.39			$	5.74

 

 

STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

		Six Months Ended
		June 29, 2024				July 1, 2023
Operating Activities
Net income		$	15,348			$	30,535
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			11,137				13,046
Stock-based compensation			2,152				1,948
Excess and obsolescence inventory reserve			(467	)			—
Gain on sale of assets			—				(2	)
Deferred income taxes			(2,751	)			(3,950	)
Changes in operating assets and liabilities:
Trade receivables			3,745				12,383
Inventories			6,945				(4,423	)
Trade accounts payable and accrued expenses			(2,770	)			(5,654	)
Contract liability with customers			(149	)			(931	)
Employee compensation and benefits			(8,469	)			(8,882	)
Product liability			(305	)			199
Prepaid expenses, other assets and other liabilities			1,669				(11,285	)
Income taxes payable			—				(1,171	)
Cash provided by operating activities			26,085				21,813
Investing Activities
Property, plant and equipment additions			(10,414	)			(4,873	)
Proceeds from sale of assets			—				3
Purchases of short-term investments			(76,409	)			(117,977	)
Proceeds from maturities of short-term investments			80,404				150,898
Cash (used for) provided by investing activities			(6,419	)			28,051
Financing Activities
Remittance of taxes withheld from employees related to share-based compensation			(624	)			(2,156	)
Repurchase of common stock			(20,276	)			—
Dividends paid			(6,787	)			(101,425	)
Cash used for financing activities			(27,687	)			(103,581	)
Decrease in cash and cash equivalents			(8,021	)			(53,717	)
Cash and cash equivalents at beginning of period			15,174				65,173
Cash and cash equivalents at end of period		$	7,153			$	11,456

 

 

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								Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net income		$	8,264			$	16,185			$	15,348			$	30,535
Income tax expense			2,191				4,048				4,154				8,190
Depreciation and amortization expense			5,304				6,510				11,137				13,046
Interest income			(1,329	)			(1,479	)			(2,684	)			(2,693	)
Interest expense			25				30				42				55
EBITDA		$	14,455			$	25,294			$	27,997			$	49,133
EBITDA margin			11.1%				17.7%				10.5%				16.8%
Net income margin			6.3%				11.3%				5.7%				10.4%

 

 

v3.24.2

Cover	Jul. 31, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 31, 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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