Ruger Report 8.1% Q1 Sales Surge on Improved Sell-Through

Sturm, Ruger and Company reported net sales for the first quarter of 2010 were $68.3 million, up 8.1% from sales of $63.5 million in the year-ago period. Net income was $8.3 million, or 44 cents per share, as compared with earnings of $5.8 million, or 30 cents per share, in the year-ago period.

CEO Michael O. Fifer said demand for Ruger products remained strong in the first quarter of 2010, and estimated sell-through of products from distributors to retailers in the first quarter of 2010 increased by approximately 8% from the first quarter of 2009 and approximately 21% from the fourth quarter of 2009.

Fifer noted that sales growth, despite declines of 4% and 5% in National Instant Criminal Background Check System (NICS) background checks over the same periods, suggests Ruger gained market share.

Firearms unit production increased 3% from the fourth quarter of 2009, and 15% from the first quarter of 2009, while backlog grew to 239,900 units and $72 million at the end of the first quarter of 2010, from 181,000 units and $60 million at the end of 2009.

In January, Ruger launched the SR9c, a compact version of the full-size SR9 striker-fired, semi-automatic pistol. Fifer said SR9c has been very popular since its introduction, and has also generated renewed interest in the full-size SR9 pistol.

Fifer added that new product introductions, including the new SR9c pistol, remain a strong driver of demand, and products introduced since January 2008 represented $27 million or 39% percent of sales in the first quarter of 2010.
 
Cash generated from operations during the first quarter of 2010 was $10 million. At the end of the first quarter of 2010, cash and equivalents totaled $59 million. The companys current ratio is 3.1 to 1 and they have no debt.

During the first quarter of 2010, capital expenditures totaled $5.7 million, much of which was related to tooling and equipment for new products. Ruger expects to invest approximately $12 to $18 million for capital expenditures during 2010.

At the end of the first quarter of 2010, stockholders equity was $103 million, which equates to a book value of $5.39 per share, of which $3.08 per share was cash and equivalents.