Sturm, Ruger & Company Inc. reported sales climbed 19.2 percent in the second quarter, to $167.9 million compared with net sales of $140.9 million a year ago. Earnings rose 33.9 percent to $23.5 million, or $1.22 a share, from $17.6 million, or 91 cents, a year ago.
For the six months ended July 2, 2016, net sales were $341.1 million and fully diluted earnings were $2.44 per share. For the corresponding period in 2015, net sales were $277.8 million and fully diluted earnings were $1.71 per share.
The company also announced today that its board of directors declared a dividend of 49 cents per share for the second quarter for stockholders of record as of August 12, 2016, payable on August 26, 2016. This dividend varies every quarter because the company pays a percentage of earnings rather than a fixed amount per share. The dividend is approximately 40 percent of net income.
CEO Michael O. Fifer made the following observations related to the company’s 2016 second-quarter performance:
- In the second quarter of 2016, net sales increased 19 percent and earnings per share increased 34 percent from the second quarter of 2015.
- EBITDA was $45 million, or 27 percent of sales, in the second quarter of 2016, an increase of 25 percent from $36 million, or 26 percent of sales, in the comparable prior-year period.
- New products, including the American Pistol, the Precision Rifle, the AR-556 modern sporting rifle and the LC9s pistol, represented $53 million, or 33 percent, of firearm sales in the second quarter of 2016. 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 increased 20 percent in the second quarter of 2016 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) increased 15 percent.
- The increase in estimated sell-through of the company’s products from independent distributors to retailers is attributable to the increase in overall industry demand, strong demand for certain new products and
increased production of several products in strong demand.
- During the second quarter of 2016, the company’s finished goods inventory increased by 25,700 units and distributor inventories of the company’s products increased by 50,300 units.
- Cash generated from operations during the first half of 2016 was $66 million. At July 2, 2016, cash totaled $103 million. The company’s current ratio is 2.8 to 1, with no debt.
- In the first half of 2016, capital expenditures totaled $11 million, much of it related to tooling and equipment for new products. 2016 capital expenditures are expected to total approximately $30 million.
- In the first half of 2016, the company returned $16 million to its shareholders through the payment of dividends.
- At July 2, 2016, stockholders’ equity was $255 million, which equates to a book value of $13.27 per share, of which $5.37 per share is cash.