Sturm, Ruger & Company, Inc. reported profits jumped 65.2 percent in its third quarter, to $26.7 million, or $1.44 a share, from $17.3 million, or 88 cents, a year ago. Revenues climbed 44.6 percent to $170.9 million from $118.2 million.

For the nine months ended September 28, 2013, net sales were $506.4 million and fully diluted earnings were $4.25 per share. For the corresponding period in 2012, net sales were $350.1 million and fully diluted earnings were $2.58 per share.

The company also announced today that its Board of Directors declared a dividend of 58¢ per share for the third quarter, for shareholders of record as of November 15, 2013, payable on November 29, 2013. 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 results:
Our earnings increased 64 percent from the third quarter of 2012, driven by the 45 percent growth in sales and our ongoing focus on continuous improvement in our operations.

New product introductions were a significant component of our sales growth as new product sales represented $146.6 million or 32 percent of firearm sales in the first nine months of 2013. New product introductions in 2013 included the LC380 pistol, the SR45 pistol, and the Ruger American Rimfire rifle.

Demand for our products 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 September 28, 2013 as illustrated below:

 


 

 

 






Period ended September 28, 2013






Q3

 

Nine months



Increase in estimated Ruger Units Sold from Distributors to
Retailers




31%


 


26%


  (a)










 



Increase in total adjusted NICS Background Checks (thousands)


%



22%











 


 

 

 

(a)

Insufficient distributor inventory at December 31, 2012 severely
limited the estimated sell-through from independent distributors to
retailers in the first half of 2013.

Cash generated from operations during the nine months ended September 28, 2013 was $84 million. At Sept. 28, 2013, our cash totaled $54 million. Our current ratio is 1.8 to 1 and we have no debt.

In the first nine months of 2013, capital expenditures totaled $31 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $40 million on capital expenditures during 2013.
In the first nine months of 2013, the company returned $30 million to its shareholders through the payment of dividends. An additional $11 million of dividends will be paid to shareholders on November 29, 2013.

At Sept. 28, 2013, stockholders’ equity was $152.6 million, which equates to a book value of $7.89 per share, of which $2.80 per share was cash and equivalents.

On Sept. 3, 2013, the company announced that it finalized the purchase of a 220,000 square foot facility in Mayodan, North Carolina. This is the company's first major expansion in over 25 years, and production at the new facility is expected to begin during the first quarter of 2014.


STURM, RUGER & COMPANY, INC.


 

 


 

 








 


CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)








 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended




September 28,
2013


 

 


September 29,
2012


 

 


September 28,
2013


 

 


September 29,
2012






 

 





 

 


Net firearms sales



$

167,234




$

116,270




$

497,461




$

345,203


Net castings sales

 

 

 

3,708

 

 

 

 

1,882

 

 

 

 

8,915

 

 

 

 

4,854

 

Total net sales




170,942





118,152





506,376





350,057














 

Cost of products sold




108,002





75,587





311,403





220,565


 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 

62,940

 

 

 

 

42,565

 

 

 

 

194,973

 

 

 

 

129,492

 













 

Operating expenses:













Selling




9,662





7,891





37,250





27,998


General and administrative




8,207





7,271





24,967





21,153


Other operating expenses

 

 

 

287

 

 

 

 

166

 

 

 

 

49

 

 

 

 

377

 

Total operating expenses

 

 

 

18,156

 

 

 

 

15,328

 

 

 

 

62,266

 

 

 

 

49,528

 













 

Operating income

 

 

 

44,784

 

 

 

 

27,237

 

 

 

 

132,707

 

 

 

 

79,964

 













 

Other income:













Interest expense, net




(40

)




(18

)




(95

)




(62

)

Other income, net

 

 

 

408

 

 

 

 

319

 

 

 

 

769

 

 

 

 

800

 

Total other income, net

 

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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