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Sturm, Ruger & Company, Inc. Reports Second Quarter Diluted Earnings of $2.50 Per Share and Declares Quarterly Dividend of $1.00 Per Share

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SOUTHPORT, Conn., August 04, 2021--(BUSINESS WIRE)--Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the second quarter of 2021 the Company reported net sales of $200.1 million and diluted earnings of $2.50 per share, 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 today 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% of net income.

Chief Executive Officer 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."

Mr. 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 additional exciting new products, including the return of Marlin lever action rifles, which we plan to begin shipping in the fourth quarter."

Mr. 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% 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%. 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% 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 the Company’s products decreased 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, our cash and short-term investments totaled $173.6 million. Our current ratio is 3.7 to 1 and we have no debt.

  • In the first half of 2021, capital expenditures totaled $11.5 million. We expect our 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.

Today, the Company filed its Quarterly Report on Form 10-Q for the second quarter of 2021. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

Tomorrow, August 5, 2021, Sturm, Ruger will host a webcast at 10:00 a.m. ET to discuss the second quarter operating results. Interested parties can access the webcast at Ruger.com/corporate or by dialing 855-871-7398, participant code 7094764.

The Quarterly Report on Form 10-Q for the second quarter of 2021 is available on the SEC website at SEC.gov and the Ruger website at Ruger.com/corporate. Investors are urged to read the complete Quarterly Report on Form 10-Q for the second quarter of 2021 to ensure that they have adequate information to make informed investment judgments.

About Sturm, Ruger & Co., Inc.

Sturm, Ruger & Co., Inc. is one of the nation's leading manufacturers of rugged, reliable firearms for the commercial sporting market. With products made in America, Ruger offers consumers almost 800 variations of more than 40 product lines. For more than 70 years, Ruger has been a model of corporate and community responsibility. Our motto, "Arms Makers for Responsible Citizens®," echoes our commitment to these principles as we work hard to deliver quality and innovative firearms.

The Company may, from time to time, make forward-looking statements and projections concerning future expectations. Such statements are based on current expectations and are subject to certain qualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the need for external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of future firearms control and environmental legislation, and accounting estimates, any one or more of which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

July 3, 2021

December 31, 2020

Assets

Current Assets

Cash

$ 23,561

$ 20,147

Short-term investments

149,994

121,007

Trade receivables, net

76,059

57,876

Gross inventories

84,254

80,487

Less LIFO reserve

(48,969)

(48,016)

Less excess and obsolescence reserve

(3,298)

(3,394)

Net inventories

31,987

29,077

Prepaid expenses and other current assets

4,042

6,266

Total Current Assets

285,643

234,373

Property, plant and equipment

404,917

393,843

Less allowances for depreciation

(337,342)

(323,110)

Net property, plant and equipment

67,575

70,733

Deferred income taxes

-

1,530

Other assets

45,658

41,622

Total Assets

$ 398,876

$ 348,258

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data)

July 3, 2021

December 31, 2020

Liabilities and Stockholders’ Equity

Current Liabilities

Trade accounts payable and accrued expenses

$ 38,256

$ 37,078

Contract liabilities with customers

-

84

Product liability

919

1,052

Employee compensation and benefits

28,615

37,275

Workers’ compensation

6,820

6,272

Income taxes payable

3,119

-

Total Current Liabilities

77,729

81,761

Product liability accrual

91

74

Lease liability

1,590

1,724

Deferred income taxes

324

-

Contingent liabilities

-

-

Stockholders’ Equity

Common Stock, non-voting, par value $1:

Authorized shares 50,000; none issued

-

-

Common Stock, par value $1:

Authorized shares – 40,000,000

2021 – 24,306,486 issued,

17,596,588 outstanding

2020 – 24,205,749 issued,

17,495,851 outstanding

24,306

24,206

Additional paid-in capital

43,610

43,468

Retained earnings

396,816

342,615

Less: Treasury stock – at cost
2021 – 6,709,898 shares
2020 – 6,709,898 shares

(145,590)

(145,590)

Total Stockholders’ Equity

319,142

264,699

Total Liabilities and Stockholders’ Equity

$ 398,876

$ 348,258

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

Net firearms sales

$199,447

$129,413

$383,049

$252,178

Net castings sales

625

851

1,400

1,725

Total net sales

200,072

130,264

384,449

253,903

Cost of products sold

121,315

90,179

233,126

177,809

Gross profit

78,757

40,085

151,323

76,094

Operating expenses:

Selling

8,449

7,286

16,537

14,923

General and administrative

10,639

8,773

23,161

16,982

Total operating expenses

19,088

16,059

39,698

31,905

Operating income

59,669

24,026

111,625

44,189

Other income:

Interest income

12

394

20

960

Interest expense

(25)

(27)

(50)

(52)

Other income, net

610

306

1,061

413

Total other income, net

597

673

1,031

1,321

Income before income taxes

60,266

24,699

112,656

45,510

Income taxes

15,882

6,105

30,080

11,578

Net income and comprehensive income

$ 44,384

$ 18,594

$ 82,576

$ 33,932

Basic earnings per share

$2.52

$1.06

$4.70

$1.94

Diluted earnings per share

$2.50

$1.05

$4.66

$1.91

Weighted average number of common shares outstanding - Basic

17,590,305

17,489,642

17,574,798

17,475,819

Weighted average number of common shares outstanding - Diluted

17,766,868

17,763,277

17,735,910

17,735,474

Cash dividends per share

$0.86

$0.35

$1.57

$0.53

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

Six Months Ended

July 3, 2021

June 27, 2020

Operating Activities

Net income

$ 82,576

$ 33,932

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

14,751

14,429

Stock-based compensation

5,043

2,732

Gain on sale of assets

(58)

(48)

Deferred income taxes

1,854

3,133

Changes in operating assets and liabilities:

Trade receivables

(18,183)

(1,013)

Inventories

(2,910)

16,235

Trade accounts payable and accrued expenses

1,686

10,465

Contract liability to customers

(84)

(5,977)

Employee compensation and benefits

(9,429)

6,123

Product liability

(116)

(42)

Prepaid expenses, other assets and other liabilities

(2,050)

(6,327)

Income taxes payable

3,119

4,466

Cash provided by operating activities

76,199

78,108

Investing Activities

Property, plant and equipment additions

(11,464)

(5,921)

Proceeds from sale of assets

73

54

Purchases of short-term investments

(271,984)

(233,466)

Proceeds from maturities of short-term investments

242,997

154,072

Cash used for investing activities

(40,378)

(85,261)

Financing Activities

Remittance of taxes withheld from employees related to

share-based compensation

(4,801)

(1,297)

Dividends paid

(27,606)

(9,269)

Cash used for financing activities

(32,407)

(10,566)

Increase (decrease) in cash and cash equivalents

3,414

(17,719)

Cash and cash equivalents at beginning of period

20,147

35,420

Cash and cash equivalents at end of period

$ 23,561

$ 17,701

Non-GAAP Financial Measure

In an effort to provide investors with additional information regarding its financial results, the Company refers to various United States generally accepted accounting principles ("GAAP") financial measures and one non-GAAP financial measure, EBITDA, which management believes provides useful information to investors. This non-GAAP financial measure may not be comparable to similarly titled financial measures being disclosed by other companies. In addition, the Company believes that the non-GAAP financial measure should be considered in addition to, and not in lieu of, GAAP financial measures. The Company believes that EBITDA is useful to understanding its operating results and the ongoing performance of its underlying business, as EBITDA provides information on the Company’s ability to meet its capital expenditure and working capital requirements, and is also an indicator of profitability. The Company believes that this reporting provides better transparency and comparability to its operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate the Company’s financial performance.

EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. The Company calculates its EBITDA by adding the amount of interest expense, income tax expense, and depreciation and amortization expenses that have been deducted from net income back into net income, and subtracting the amount of interest income that was included in net income from net income.

Non-GAAP Reconciliation – EBITDA

EBITDA

(Unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

July 3, 2021

June 27, 2020

July 3, 2021

June 27, 2020

Net income

$44,384

$18,594

$82,576

$33,932

Income tax expense

15,882

6,105

30,080

11,578

Depreciation and amortization expense

7,250

7,215

14,751

14,429

Interest income

(12)

(394)

(20)

(960)

Interest expense

25

27

50

52

EBITDA

$67,529

$31,547

$127,437

$59,031

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005913/en/

Contacts

Sturm, Ruger & Company, Inc.
One Lacey Place
Southport, CT 06890
www.ruger.com
203-259-7843

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