Sturm, Ruger and Company, Inc. reported sales for the fourth quarter ended Dec. 31 improved slightly to $64.1 million from $63.9 million in the year-ago period due to improving bookings in November and December, which allowed for a “significant surge” in late shipments for the quarter.
Net income for the quarter was $5.7 million, or 30 cents per diluted share, compared with earnings of $21.3 million, or 30 cents per diluted share, in the prior-year period.
Gross margins for the quarter were 32.0% of sales, down 130 basis points from 33.3% of sales in the 2009 fourth quarter.
In a conference call with analysts, company CEO Mike Fifer said that estimated sell-through of products from independent distributors to retailers in fiscal 2010 improved by 2%, adding that the company has received indications that retail orders from early-2011 trade shows has been “stronger than expected.”
Fifer said the company was encouraged by strong showings at the trade shows, but warned that the key to growth is sell-through, not sell-in. “Retailers loading up is not a phenomenon,” he said. “Sometimes they’re right and sometimes they’re wrong and they’ve got a lot of slow-moving inventory and it gets really grim. I think we need a few more months to see whether this big load-up actually sells through ”
Fifer noted that Ruger would continue to focus on new product in 2010, adding that new product introductions accounted for $62 million and accounted for 25% of total sales in 2010. He noted that 2010 new launches, including the SR9c compact pistol, the LCR-357 revolver and SR40 striker-fired pistol, would continue to be key focal points in 2011. Fifer also said he estimated the product mix continued to favor handguns, estimating that close to two-thirds of Ruger’s total unit sales were handguns.
