EX-99.1 2 c342936_ex99-1.htm EXHIBIT 99.1

 

EXHIBIT 99.1

 

 

FOR IMMEDIATE RELEASE                  

 

STURM, RUGER & COMPANY, INC. REPORTS FIRST QUARTER FULLY DILUTED

EARNINGS OF $1.20 PER SHARE AND DIVIDEND OF 49¢ PER SHARE

 

SOUTHPORT, CONNECTICUT, April 29, 2013—Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the first quarter of 2013 the Company reported net sales of $155.9 million and fully diluted earnings of $1.20 per share, compared with net sales of $112.3 million and fully diluted earnings of 79¢ per share in the first quarter of 2012.

 

The Company also announced today that its Board of Directors declared a dividend of 49¢ per share for the first quarter, for shareholders of record as of May 10, 2013, payable on May 24, 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% of net income.

 

Chief Executive Officer Michael O. Fifer made the following observations related to the Company’s results:

 

·Our earnings increased 53% from the first quarter of 2012, driven by the 39% 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 $53.3 million or 35% of firearm sales in the first quarter of 2013. New product introductions in the first quarter of 2013 included the LC380 pistol and the SR45 pistol.

 

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·The estimated sell-through of our products from independent distributors to retailers in the first quarter of 2013 increased 12% from the first quarter of 2012. This estimated unit sell-through was effectively limited to first quarter production because distributor inventory totaled only 59,200 units at December 31, 2012. For reference, at December 31, 2011, the distributor inventory totaled 135,600 units, allowing Q1 2012 sell-through to exceed Q1 2012 production by 22%. During the first quarter of 2013, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 46%.

 

·Cash generated from operations during the first quarter of 2013 was $30.4 million. At March 30, 2013, our cash and cash equivalents totaled $45.6 million. Our current ratio is 1.6 to 1 and we have no debt.

 

·In the first quarter of 2013, capital expenditures totaled $7.7 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $30 million for capital expenditures during 2013.

 

·In the first quarter of 2013, the Company returned $7.8 million to its shareholders through the payment of dividends.

 

·At March 30, 2013, stockholders’ equity was $111.6 million, which equates to a book value of $5.78 per share, of which $2.36 per share was cash and equivalents.

 

Today, the Company filed its Quarterly Report on Form 10-Q for the first quarter of 2013. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

 

Tomorrow, April 30, 2013, Sturm, Ruger will host a webcast at 12:00 p.m. EDT of its Annual Meeting of Stockholders. Interested parties can access the webcast at www.ruger.com/corporate or www.earnings.com or by dialing 800-295-4740, participant code 60546881.

 

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

 

About Sturm, Ruger

Sturm, Ruger was founded in 1949 and is one of the nation’s leading manufacturers of high-quality firearms for the commercial sporting market. Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities located in Newport, NH and Prescott, AZ.

 

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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.

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED BALANCE SHEETS

 

(Dollars in thousands)

 

   March 30,
2013		   December 31,
2012		 
         
Assets          
           
Current Assets          
Cash  $45,611   $30,978 
Trade receivables, net   59,482    43,018 
           
Gross inventories   54,275    55,827 
Less LIFO reserve   (38,221)   (38,089)
Less excess and obsolescence reserve   (1,964)   (1,729)
Net inventories   14,090    16,009 
           
Deferred income taxes   7,521    5,284 
Prepaid expenses and other current assets   1,101    1,632 
Total Current Assets   127,805    96,921 
           
Property, plant and equipment   203,256    195,713 
Less allowances for depreciation   (133,821)   (129,720)
Net property, plant and equipment   69,435    65,993 
           
Deferred income taxes   2,451    2,004 
Other assets   11,784    9,568 
Total Assets  $211,475   $174,486 

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED BALANCE SHEETS (Continued)

 

(Dollars in thousands, except share data)

 

   March 30,
2013		   December 31,
2012		 
         
Liabilities and Stockholders’ Equity          
           
Current Liabilities          
Trade accounts payable and accrued expenses  $41,461   $38,500 
Product liability   991    720 
Employee compensation and benefits   19,163    15,182 
Workers’ compensation   4,475    4,600 
Income taxes payable   14,622    489 
Total Current Liabilities   80,712    59,491 
           
Accrued pension liability   18,873    19,626 
Product liability   252    337 
           
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
        2013 – 23,618,934 issued,
                    19,319,500 outstanding
        2012 – 23,562,422 issued,
                    19,262,988 outstanding		   23,619    23,563 
Additional paid-in capital   16,470    15,531 
Retained earnings   139,053    123,442 
Less: Treasury stock – at cost
      2013 and 2012 – 4,299,434 shares		   (37,884)   (37,884)
Accumulated other comprehensive loss   (29,620)   (29,620)
Total Stockholders’ Equity   111,638    95,032 
Total Liabilities and Stockholders’ Equity  $211,475   $174,486 

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(In thousands, except per share data)

 

   Three Months Ended 
   March 30, 2013   March 31, 2012 
         
Net firearms sales  $153,440   $110,787 
Net castings sales   2,465    1,550 
Total net sales   155,905    112,337 
           
Cost of products sold   94,596    70,544 
           
Gross profit   61,309    41,793 
           
Operating expenses:          
Selling   15,764    10,999 
General and administrative   8,443    6,378 
Total operating expenses   24,207    17,377 
           
Operating income   37,102    24,416 
           
Other income:          
Interest expense, net   (16)   (23)
Other income, net   265    178 
Total other income, net   249    155 
           
Income before income taxes   37,351    24,571 
           
Income taxes   13,633    9,091 
           
Net income and comprehensive income  $23,718   $15,480 
           
Basic earnings per share  $1.23   $0.81 
           
Fully diluted earnings per share  $1.20   $0.79 
           
Cash dividends per share  $0.404   $0.212 

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

   Three Months Ended 
   March 30,
2013		   March 31,
2012		 
         
Operating Activities          
Net income  $23,718   $15,480 
Adjustments to reconcile net income to cash provided by operating activities:          
Depreciation and amortization   4,501    3,388 
Slow moving inventory valuation adjustment   235    (53)
Stock-based compensation   1,330    928 
Gain on sale of assets   (70)   - 
Deferred income taxes   (2,684)   (1,365)
Changes in operating assets and liabilities:          
Trade receivables   (16,464)   (6,801)
Inventories   1,684    2,649 
Trade accounts payable and accrued expenses   2,836    2,611 
Employee compensation and benefits   3,678    (4,238)
Product liability   186    (65)
Prepaid expenses, other assets and other liabilities   (2,676)   5,119 
Income taxes payable   14,133    4,188 
Cash provided by operating activities   30,407    21,841 
           
Investing Activities          
Property, plant and equipment additions   (7,705)   (3,047)
Proceeds from sale of assets   70    - 
Purchases of short-term investments   -    (19,994)
Cash used for investing activities   (7,635)   (23,041)
           
Financing Activities          
Tax benefit from exercise of stock options   1,747    922 
Remittance of taxes withhold for employees related to share-based compensation   (2,082)   (884)
Dividends paid   (7,804)   (4,059)
Cash used for financing activities   (8,139)   (4,021)
           
Increase (decrease) in cash and cash equivalents   14,633    (5,221)
           
Cash and cash equivalents at beginning of period   30,978    81,056 
           
Cash and cash equivalents at end of period  $45,611   $75,835 

 

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