RGR Sturm Ruger and Co

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:
  • the payment of $6.8 million of quarterly dividends, and
  • $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

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731056888/en/

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