Sturm, Ruger & Company Inc. announced that for the first quarter of 2017 the company reported net sales of $167.4 million and diluted earnings of $1.21 per share, compared with net sales of $173.1 million and diluted earnings of $1.21 per share in the first quarter of 2016.

The company also announced today that its Board of Directors declared a dividend of 48 cents per share for the first quarter for stockholders of record as of May 19, 2017, payable on May 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.

In addition, the company announced that its Board of Directors expanded its authorization to repurchase shares of its common stock to $100 million. The previous authorization was depleted by the recent share repurchases.

Chief Executive Officer Michael O. Fifer made the following observations related to the company’s 2017 first quarter performance:

  • In the first quarter of 2017, net sales decreased 3 percent and earnings per share remained unchanged from the first quarter of 2016.
  • EBITDA was $43.6 million, or 26 percent of sales, in the first quarter of 2017, a decrease of 3 percent from $44.8 million, or 26 percent of sales, in the comparable prior year period.
  • Sales of new products, including the Mark IV pistols, the LCP II pistol, and the Precision Rifle, represented $41.5 million or 25 percent of firearm sales in the first quarter of 2017. New product sales include only major new products that were introduced in the past two years.
  • The estimated unit sell-through of the company’s products from the independent distributors to retailers decreased 7 percent in the first quarter of 2017 from the comparable prior year period. For the same period, the National Instant Criminal Background Check System background checks (as adjusted by the National Shooting Sports Foundation) decreased 11 percent.

The decrease in estimated sell-through of the company’s products from the independent distributors to retailers is attributable to:

  • Decreased overall consumer demand in the first quarter of 2017 due to stronger-than-normal demand during most of 2016, likely bolstered by the political campaigns for the November 2016 elections.
  • Decreased overall retailer demand in the first quarter of 2017 as some retailers committed inventory dollars to certain product categories such as modern sporting rifles in the third and fourth quarters of 2016 in advance of the November elections.

Cash generated from operations during the first quarter of 2017 was $18.9 million. At April 1, 2017, cash totaled $35.1 million. Its current ratio is 2.2 to 1 and it has no debt.

In the first quarter of 2017, capital expenditures totaled $7.2 million, much of it related to tooling and equipment for new products. It expect its 2017 capital expenditures to total approximately $40 million.

In the first quarter of 2017, the company returned $61.2 million to its shareholders through:

  • the payment of $7.8 million of dividends, and
  • the repurchase of 1,074,285 shares of common stock in the open market at an average price of $49.73 per share, for a total of $53.4 million.

At April 1, 2017, stockholders’ equity was $225 million, which equates to a book value of $12.74 per share, of which $1.99 per share is cash.

The company previously disclosed that president and chief operating officer Christopher J. Killoy would succeed Michael O. Fifer as Chief Executive Officer upon Fifer’s planned retirement tomorrow, May 9, 2017.

C. Michael Jacobi, chairman of the board of directors, expressed the Board’s appreciation of Mr. Fifer’s service as Chief Executive Officer, “Mike’s leadership over the past 10-1/2 years as CEO has been exemplary. His focus on new product development and operational excellence drove unprecedented financial success at Ruger, which benefitted our shareholders through the payment of $265 million of dividends, share repurchases of $132 million, and an increase in Ruger’s market capitalization of approximately $1 billion. We look forward to Mike’s continued service to Ruger on the Board of Directors.”

Photo courtesy Sturm, Ruger & Co.