Sturm, Ruger & Company, Inc. reported earnings increased 62 percent in the third quarter, driven by the 47 percent growth in sales and an ongoing focus on continuous improvement in our operations. Net sales reached $118.2 million and fully diluted earnings of 88 cents per share, compared with net sales of $80.5 million and fully diluted earnings of 56 cents per share in the third quarter of 2011.
For the nine months ended Sept. 29, 2012, net sales were $350.1 million and fully diluted earnings were $2.58 per share. For the corresponding period in 2011, net sales were $235.6 million and fully diluted earnings were $1.55 per share.
New product introductions were a significant component of sales growth as new product sales represented $130.3 million, or 38 percent, of sales in the first nine months of 2012. New product introductions in the first nine months of 2012 included: Ruger American Rifle, SR22 pistol, 10/22 Takedown rifle, 22/45 Lite pistol and Single-Nine revolver.
Demand outpaced the growth in overall industry demand as measured by the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) for both the third quarter and nine months ended Sept. 29, 2012 as illustrated below:
|Period ended September 29, 2012|
Increase in estimated Ruger Units Sold
from Distributors to Retailers
Increase in total adjusted NICS
In the first nine months of 2012, capital expenditures totaled $20.3 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $25 million for capital expenditures during 2012.
In the first nine months of 2012, the company returned $17.5 million to its shareholders through the payment of dividends. An additional $7.3 million in dividends will be paid to shareholders on Nov. 26, 2012.
At Sept. 29, 2012, stockholders’ equity was $174 million, which equates to a book value of $9.08 per share, of which $5.49 per share was cash and equivalents.
Condensed Statements of Income and Comprehensive Income (Unaudited)
|Three Months Ended||Nine Months Ended|
|Net firearms sales||$116,270||$79,214||$345,203||$232,126|
|Net castings sales||1,882||1,298||4,854||3,449|
|Total net sales||118,152||80,512||350,057||235,575|
|Cost of products sold||75,587||51,385||220,565||153,989|
|General and administrative||7,437||5,659||21,543||15,218|
|Total operating expenses||15,328||12,240||49,541||35,179|
|Interest expense, net||(18)||(21)||(62)||(54)|
|Other income, net||319||177||813||466|
|Total other income, net||301||156||751||412|
|Income before income taxes||27,538||17,043||80,702||46,819|
|Net income and comprehensive income||$17,349||$10,737||$50,842||$ 29,496|
|Basic earnings per share||$0.91||$0.57||$2.66||$1.56|
|Fully diluted earnings per share||$0.88||$0.56||$2.58||$1.55|
|Cash dividends per share||$0.377||$0.142||$0.913||$0.289|