Sturm, Ruger & Co. reported fourth-quarter earnings rose 27.9 percent, although sales slowed to a 6.2 percent gain in the period.

For the fourth quarter of 2016, net sales were $161.8 million and diluted earnings were $1.10 per share. For the corresponding period in 2015, net sales were $152.4 million and diluted earnings were 88 cents per share.

For 2016, net sales were $664.3 million and diluted earnings reached  $4.59 per share, compared with net sales of $551.1 million and diluted earnings of $3.21 per share in 2015.

The company also announced that its board of directors declared a dividend of 44 cents per share for the fourth quarter, for shareholders of record as of March 17, 2017, payable on March 31, 2017. 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 percent of net income.

Chief Executive Officer Michael O. Fifer made the following observations related to the company’s results:

  • In 2016, net sales increased 21 percent and earnings per share increased 43 percent from 2015.
  • EBITDA was $171.4 million, or 26 percent of sales, in 2016, an increase of 29 percent from $132.5 million, or 24 percent of sales, in 2015.
  • The estimated sell-through of the company’s products from the independent distributors to retailers increased 12 percent in 2016 from 2015. For the same period, the National Instant Criminal Background Check System background checks (as adjusted by the National Shooting Sports Foundation) increased 10 percent.
  • New products represented $192.6 million or 29 percent of firearms sales in 2016, compared to $115.4 million or 21 percent of firearms sales in 2015. New product sales include only major new products that were introduced in the past two years.
  • In 2016, new products included the Precision Rifle, the AR-556 modern sporting rifle, the LC9s pistol, the Mark IV pistols, the LCP II pistol and the American pistol. The AR-556 rifle and the LC9s pistol will not be considered new products in 2017.
  • Cash generated from operations during 2016 was $105 million. At December 31, 2016, cash totaled $87 million. The company’s current ratio is 2.8 to 1 and it has no debt.
  • In 2016, capital expenditures totaled $35 million, an increase from $29 million in 2015. We expect our 2017 capital expenditures to total approximately $40 million, as we continue to prioritize new product development.
  • In 2016, the company returned $47 million to its shareholders through the payment of $33 million of dividends, and the repurchase of 283,343 shares of our common stock in the open market at an average price of $49.43 per share, for a total of $14 million.
  • During the period from January 1, 2017 through February 17, 2017, the company repurchased 633,600 shares of its common stock in the open market at an average price of $49.67 per share, for a total of $31.5 million.