Sturm, Ruger & Company Inc. reported sales rose 53.6 percent in the second quarter as earnings doubled in the period.
Net sales of $200.1 million and diluted earnings of $2.50 per share in the quarter compared with net sales of $130.3 million and diluted earnings of $1.05 per share in the second quarter of 2020.
For the six months ended July 3, 2021, net sales were $384.4 million and diluted earnings were $4.66 per share. For the corresponding period in 2020, net sales were $253.9 million and diluted earnings were $1.91 per share.
The company also announced that its Board of Directors declared a dividend of $1.00 per share for the second quarter for stockholders of record as of August 16, 2021, payable on August 27, 2021. This dividend varies every quarter because the company pays a percentage of earnings rather than a fixed amount per share. This dividend is approximately 40 percent of net income.
CEO Christopher J. Killoy commented on the financial results for the second quarter of 2021, “The continued strengthening of our workforce, our increased productivity and strong demand allowed us to achieve outstanding financial results. The dedication and commitment of our over 1,900 hardworking employees resulted in our seventh consecutive quarterly increase in production, and the continued reduced level of Ruger inventory at the independent distributors and in our warehouses is indicative of strong consumer demand for our firearms.”
Killoy continued, “New product development remains among our highest priorities. On the heels of the successful Max-9 pistol launch earlier this year, we introduced the Ruger LCP Max, a 380 Auto pistol, in June. This is the latest offering from the Ruger LCP family, which has set the standard for personal protection pistols for over a decade. We are hard at work on adding exciting new products, including the return of Marlin lever-action rifles, which we plan to begin shipping in the fourth quarter.”
Killoy made the following observations related to the company’s second-quarter 2021 performance:
- The estimated unit sell-through of the company’s products from the independent distributors to retailers increased 13 percent in the first half of 2021 compared to the prior-year period.
- For the same period, the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) decreased 5 percent. The increase in the sell-through of the company’s products compared favorably to the decrease in adjusted NICS background checks and may be attributable to the following:
- Strong consumer demand for the company’s products;
- Increases in production for each of the past seven quarters; and
- Introduction of new products that have been met with strong demand.
- Sales of new products, including the Wrangler, the Ruger-57, the LCP II in .22 LR, the PC Charger, the Max-9 pistol, and the LCP Max represented $77.9 million, or 22 percent of firearm sales, in the first half of 2021. New product sales include only major new products that were introduced in the past two years.
- During the second quarter of 2021, the company’s finished goods inventory and distributor inventories of its products decreased by 7,800 units and remain significantly below pre-COVID-19 pandemic levels.
- Cash provided by operations during the first half of 2021 was $76.2 million. At July 3, 2021, its cash and short-term investments totaled $173.6 million. The company’s current ratio is 3.7 to 1 and it has no debt.
- In the first half of 2021, capital expenditures totaled $11.5 million. The company expects its 2021 capital expenditures to total approximately $20 million, most of which relate to new product introductions.
- In the first half of 2021, the company returned $27.6 million to its shareholders through the payment of dividends.
- At July 3, 2021, stockholders’ equity was $319.1 million, which equates to a book value of $18.14 per share, of which $9.86 per share was cash and short-term investments.
Photo courtesy Sturm, Ruger & Company Inc.
