Sturm, Ruger & Company, Inc. said for the first quarter 2011, the company reported net sales of $75.4 million and earnings of 42 cents per share, compared with net sales of $68.3 million and earnings of 44 cents per share in 2010.
Chief Executive Officer Michael O. Fifer made the following comments related to the Company’s results:
- The company launched the new LC9 pistol and the new Gunsite Scout rifle in the first quarter of 2011. New product introductions remain a strong driver of demand and represented $20.8 million or 29% of sales in the first quarter of 2011.
- Demand for our products remained strong in the first quarter of 2011. The estimated sell-through of the company’s products from distributors to retailers in the first quarter of 2011 increased by approximately 12% from the first quarter of 2010 and 21% from the fourth quarter of 2010.
- The incoming order rate in the first quarter of 2011 increased 65% from the first quarter of 2010 and more than doubled from the fourth quarter of 2010.
- National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 13% from the first quarter of 2010 and decreased 7% from the fourth quarter of 2010.
- Cash generated from operations during the first quarter of 2011 was $20.7 million. At April 2, 2011, our cash and equivalents and short-term investments totaled $72.4 million. Our current ratio is 3.0 to 1 and we have no debt.
- During the first quarter of 2011, capital expenditures totaled $4.3 million, much of it related to tooling and equipment for new products. We expect to invest approximately $15 million for capital expenditures during 2011.
- At April 2, 2011, stockholders’ equity was $119.2 million, which equates to a book value of $6.32 per share, of which $3.84 per share was cash and equivalents and short-term investments.
- During the first quarter of 2011, the company returned $2.9 million to shareholders through the payment of $0.9 million of dividends, and the repurchase of 133,400 shares of our common stock in the open market at an average price of $14.94 per share, for a total of $2.0 million.
- As of the end of the first quarter of 2011, $8.0 million remains available for future stock repurchases.
Condensed Statements of Income (Unaudited) (Dollars in thousands, except per share data) | |||||
| Three Months Ended | |||||
April 2, 2011 | April 3, 2010 | ||||
| Net firearms sales | $74,441 | $67,269 | |||
| Net castings sales | 1,000 | 1,007 | |||
| Total net sales | 75,441 | 68,276 | |||
| Cost of products sold | 51,446 | 45,145 | |||
| Gross profit | 23,995 | 23,131 | |||
| Operating expenses: | |||||
| Selling | 6,912 | 5,899 | |||
| General and administrative | 4,625 | 3,932 | |||
| Other operating expenses, net | – | 400 | |||
| Total operating expenses | 11,537 | 10,231 | |||
| Operating income | 12,458 | 12,900 | |||
| Other income: | |||||
| Interest income (expense), net | 50 | (33 | ) | ||
| Other income, net | 106 | 127 | |||
| Total other income, net | 156 | 94 | |||
| Income before income taxes | 12,614 | 12,994 | |||
| Income taxes | 4,667 | 4,678 | |||
| Net income | $ 7,947 | $ 8,316 | |||
| Basic earnings per share | $0.42 | $0.44 | |||
| Fully diluted earnings per share | $0.42 | $0.43 | |||
| Cash dividends per share | $0.05 | $0.06 | |||
