Sturm, Ruger & Company, Inc. reported net sales of $169.9 million and fully diluted earnings of $1.22 per share, compared with net sales of $155.9 million and fully diluted earnings of $1.20 per share in the first quarter of 2013.

The company also announced that its Board of Directors declared a dividend of 49¢ per share for the first quarter, for shareholders of record as of May 16, 2014, payable on May 30, 2014. This dividend varies every quarter because the company pays a percent of earnings rather than a fixed amount per share. This dividend is approximately 40 percent of net income.

Chief Executive Officer Michael O. Fifer made the following observations related to the company’s 2014 first quarter performance:

Our earnings increased 2 percent from the first quarter of 2013 on a 9 percent increase in sales. The main driver of the reduced operating margins was a product mix shift away from unusually strong sales of higher-margin firearms accessories that we enjoyed one year ago. Additionally, increased depreciation expense affected operating margins. At the same time, our EBITDA of $47.3 million increased 13 percent from the first quarter 2013 EBITDA of $41.9 million.

A summary of Q1 year-over-year growth follows:

  • New products represented $41.3 million or 24 percent of firearm sales in the first quarter of 2014.
  • Demand for our products significantly outpaced the growth in industry demand as measured by the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) for the first quarter of 2014 as illustrated below:

         

  • Cash generated from operations during the first quarter of 2014 was $15.8 million. At March 29, 2014, our cash totaled $49.8 million. Our current ratio is 1.9 to 1 and we have no debt.
  • In the first quarter of 2014, capital expenditures totaled $9.6 million, much of it related to tooling fixtures and equipment for new product introductions and to upgrade and modernize manufacturing equipment. We expect to invest approximately $35 million on capital expenditures during 2014 as we continue to prioritize new product development.
  • In the first quarter of 2014, the company returned $10.5 million to its shareholders through the payment of dividends.
  • At March 29, 2014, stockholders’ equity was $192.8 million, which equates to a book value of $9.94 per share, of which $2.57 per share was cash.

Sturm, Ruger & Co., Inc. is one of the nation’s leading manufacturers of rugged, reliable firearms for the commercial sporting market.