SOUTHPORT, Connecticut -Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for the third quarter of 2009, the Company reported net sales of $71.2 million and earnings of 37¢ per share, compared with sales of $41.8 million and earnings of 2¢ per share in the third quarter of 2008.
For the nine months ended October 3, 2009, net sales were $207.1 million and earnings were $1.13 per share. For the corresponding period in 2008, net sales were $123.0 million and earnings were 14¢ per share.
The Company also announced today that its Board of Directors declared a dividend of 9.6¢ per share for the third quarter, for shareholders of record as of November 13, 2009, payable on November 30, 2009. The amount of the dividend was based on a percentage of Operating Profit after adjustment for certain items, the same approach used by the Company in the first two quarters of 2009. Under this approach, the amount of the quarterly dividend fluctuates directly with certain operating results of the Company.
Chief Executive Officer Michael O. Fifer made the following comments related to the third quarter of 2009:
* Demand for Ruger firearms remained strong as the estimated sell-through of our products from distributors to retail in the third quarter of 2009 was 214,500 units, compared with estimated sell through of 143,100 units in the third quarter of 2008.
* This year-over-year increase in demand of approximately 50% substantially exceeded the 11% growth in the National Instant Check System (NICS) background checks over the same period, suggesting the likelihood of some market share gain by the Company and some increase in inventory at the retailers. Comparisons of NICS checks from period to period are often used as a proxy for consumer demand for firearms.
* Our firearms unit production in the third quarter of 2009 was 242,500 units, compared with production of 158,900 units in the third quarter of 2008, an increase of 53% year over year.
* Cash generated from operations during the third quarter of 2009 was $15.2 million. At the end of the third quarter of 2009, our cash, cash equivalents and short-term investments totaled $53.1 million. Our pre-LIFO working capital of $102.3 million, less the LIFO reserve of $41.3 million, resulted in working capital of $61.0 million and a current ratio of 2.8 to 1. The Company has no debt.
* For the first nine months of 2009, capital expenditures totaled $10.3 million. We expect to invest approximately $13 million for capital expenditures during 2009.
Today, the Company filed its Quarterly Report on Form 10-Q for the third quarter of 2009. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.
The Quarterly Report on Form 10-Q is available on the SEC website a
www.sec.gov and the Ruger website a
www.ruger.com/corporate/. Investors are urged to read the complete Form 10-Q to ensure that they have adequate information to make informed investment judgments.
The Company will host a webcast on Thursday, October 29, 2009, at 9:00am EDT to discuss the third quarter operating results. Interested parties can access the webcast a
www.ruger.com/corporate o
www.earnings.com.
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.
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 including lawsuits filed by mayors, attorneys general and other governmental entities and membership organizations, 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 Balance Sheets (Unaudited)
(Dollars in thousands, except share data)
October 3, 2009 December 31, 2008
Assets
Current Assets
Cash and cash equivalents $ 5,881 $ 9,688
Short-term investments 47,237 18,558
Trade receivables, net 26,744 25,809
Gross inventories
50,903
59,846
Less LIFO reserve (41,310 ) (44,338 )
Less excess and obsolescence reserve (2,545 ) (3,569 )
Net inventories 7,048 11,939
Deferred income taxes 5,343 6,400
Prepaid expenses and other current assets 2,646 3,374
Total current assets 94,899 75,768
Property, plant and equipment 133,559 125,026
Less allowances for depreciation (102,031 ) (98,807 )
Net property, plant and equipment 31,528 26,219
Deferred income taxes
9,667
7,743
Other assets 3,853 3,030
Total Assets $ 139,947 $ 112,760
STURM, RUGER & COMPANY, INC.
October 3, 2009 December 31, 2008
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable and accrued expenses $ 11,526 $ 10,235
Product liability 1,253 1,051
Employee compensation and benefits 12,604 7,994
Workers' compensation 4,600 5,067
Income taxes payable 3,942 4,171
Line of credit - 1,000
Total current liabilities 33,925 29,518
Accrued pension liability 16,933 16,946
Product liability accrual 974 693
Contingent liabilities - Note 9 -- --
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
2009 - 22,798,732 issued,
19,072,790 outstanding
2008 - 22,798,732 issued,
19,047,323 outstanding 22,827 22,799
Additional paid-in capital 7,330 2,442
Retained earnings 111,110 93,500
Less: Treasury stock - at cost
2009 - 3,753,821 shares
2008 - 3,751,419 shares (30,167 ) (30,153 )
Accumulated other comprehensive loss (22,985 ) (22,985 )
Total Stockholders' Equity 88,115 65,603
Total Liabilities and Stockholders' Equity $ 139,947 $ 112,760
STURM, RUGER & COMPANY, INC.
Condensed Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Nine Months Ended
October 3, September 27, October 3, September 27,
2009 2008 2009 2008
Net firearms sales $ 70,011 $ 40,318 $
203,611
$ 117,186
Net castings sales 1,175 1,504 3,495 5,806
Total net sales 71,186 41,822 207,106 122,992
Cost of products sold 49,404 34,964 140,766 96,985
Gross profit 21,782 6,858 66,340 26,007
Expenses:
Selling 5,145 3,864 15,909 12,350
General and administrative 4,556 2,615 14,940 9,524
Other operating expenses, net 750 - 750 -
Total operating expenses 10,451 6,479 31,599 21,874
Operating income 11,331 379 34,741 4,133
Other income:
Interest income (expense) 8 72 (12 ) 352
Other income, net 125 150 101 204
Total other income, net 133 222 89 556
Income before income taxes 11,464 601 34,830 4,689
Income taxes 4,356 229 13,235 1,782
Net income $ 7,108 $ 372 $ 21,595 $ 2,907
Earnings per share
Basic $ 0.37 $ 0.02 $ 1.13 $ 0.14
Diluted $ 0.37 $ 0.02 $ 1.12 $ 0.14
Average shares outstanding
Basic 19,070 20,047 19,058 20,398
Diluted 19,377 20,054 19,208 20,429
STURM, RUGER & COMPANY, INC.
Condensed Statements of Cash Flows (Unaudited)
(Dollars in thousands)
Nine Months Ended
October 3, 2009
September 27, 2008
Operating Activities
Net income $ 21,595 $ 2,907
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation 4,987 3,518
Slow moving inventory valuation adjustment (256 ) 280
Stock-based compensation 3,505 419
Gain on sale of assets (39 ) (95 )
Deferred income taxes (868 ) 133
Changes in operating assets and liabilities:
Trade receivables (935 ) (3,868 )
Inventories 5,147 (3,813 )
Trade accounts payable and accrued expenses 5,433 3,054
Product liability 483 (263 )
Prepaid expenses, other assets and other liabilities (106 ) (2,963 )
Income taxes (229 ) 1,333
Cash provided by operating activities 38,717 642
Investing Activities
Property, plant and equipment additions (10,301 ) (6,380 )
Proceeds from sale of assets 44 95
Purchases of short-term investments (78,217 ) (21,931 )
Proceeds from maturities of short-term investments 49,538 32,400
Cash provided by (used for) investing activities (38,936 ) 4,184
Financing Activities
Tax benefit from exercise of stock options 1,411 -
Repayment of line of credit balance (1,000 ) -
Repurchase of common stock (14 ) (7,352 )
Dividends paid (3,985 ) -
Cash used for financing activities (3,588 ) (7,352 )
Decrease in cash and cash equivalents (3,807 ) (2,526 )
Cash and cash equivalents at beginning of period 9,688 5,106
Cash and cash equivalents at end of period $ 5,881 $ 2,580
