Sturm, Ruger & Company, Inc. reported net first quarter sales of $68.3 million and earnings per share of 44¢, compared with sales of $63.5 million and earnings per share of 30¢ in the first quarter of 2009.
Chief Executive Officer Michael O. Fifer made the following comments related to the Companys first quarter of 2010:
“Our year-over-year performance was highlighted by a 47% increase in earnings and an 8% increase in net sales,” said CEO Michael O. Fifer. “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% of sales in the first quarter of 2010.”
Fifer went on to say that cash generated from operations during the first quarter of 2010 was $10 million, leaving the company with a cash and equivalent balance of $59 million at the end of the quarter. “Our current ratio is 3.1 to 1 and we have no debt,” Fifer said.
Demand remained strong in the first quarter of 2010. Estimated sell-through 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. This sales growth, despite declines of 4% and 5% in National Instant Criminal Background Check System (NICS) background checks over the same periods, suggests the company gained market share, Fifer said.
“Our firearms unit production increased 3% from the fourth quarter of 2009, and 15% from the first quarter of 2009,” he said. “Our 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, RGR launched the SR9c, a compact version of the full-size SR9 striker-fired, semi-automatic pistol. The SR9c has been very popular since its introduction, and it has also generated renewed interest in the full-size SR9 pistol.
During the first quarter of 2010, capital expenditures totaled $5.7 million, much of it related to tooling and equipment for new products. RGR 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.
STURM, RUGER & COMPANY, INC. | ||||
Condensed Statements of Income (Unaudited) | ||||
(Dollars in thousands, except per share data) | ||||
| Three Months Ended | ||||
| April 3, 2010 | April 4, 2009 | |||
| Net firearms sales | $67,269 | $62,227 | ||
| Net castings sales | 1,007 | 1,302 | ||
| Total net sales | 68,276 | 63,529 | ||
| Cost of products sold | 45,145 | 44,003 | ||
| Gross margin | 23,131 | 19,526 | ||
| Expenses: | ||||
| Selling | 5,899 | 5,445 | ||
| General and administrative | 3,932 | 4,147 | ||
| Other operating expenses, net | 400 | 500 | ||
| Total operating expenses | 10,231 | 10,092 | ||
| Operating income | 12,900 | 9,434 | ||
| Other income: | ||||
| Interest (expense) income, net | (33) | (18) | ||
| Other income (expense), net | 127 | (50) | ||
| Total other income, net | 94 | (68) | ||
| Income before income taxes | 12,994 | 9,366 | ||
| Income taxes | 4,678 | 3,559 | ||
| Net income | $8,316 | $ 5,807 | ||
| Earnings per share | ||||
| Basic | $0.44 | $0.30 | ||
| Diluted | $0.43 | $0.30 | ||
