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Classified in: Business, Sports and recreation, Covid-19 virus
Subjects: EARNINGS, Dividend, Conference Call, Webcast, Filing

Sturm, Ruger & Company, Inc. Reports Third Quarter Diluted Earnings of $1.98 Per Share and Declares Quarterly Dividend of 79¢ Per Share


Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the third quarter of 2021 the Company reported net sales of $178.2 million and diluted earnings of $1.98 per share, compared with net sales of $145.7 million and diluted earnings of $1.39 per share in the third quarter of 2020.

For the nine months ended October 2, 2021, net sales were $562.7 million and diluted earnings were $6.64 per share. For the corresponding period in 2020, net sales were $399.6 million and diluted earnings were $3.31 per share.

The Company also announced today that its Board of Directors declared a dividend of 79¢ per share for the third quarter for stockholders of record as of November 15, 2021, payable on November 30, 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 third quarter of 2021, "Despite taking a one week shutdown in July, we were able to increase production by 22% from last year. This was our first shutdown in two years, which gave our workforce a very well-deserved break, allowed us to perform some maintenance and reconfigure some of our manufacturing operations, which has us better prepared as we head into the fourth quarter and 2022."

Mr. Killoy continued, "Despite a moderation of overall demand as reflected in the last two quarters of adjusted NICS, we shipped all of the firearms that we built this quarter without the need to aggressively promote or discount our products. Our finished goods inventories remain near historic lows and we have just begun to replenish the distributor and retail inventories that were largely depleted over the past eighteen months, putting us in a great position as we head into the fourth quarter, which has traditionally been a period of strong demand. In addition to our established firearms, we are working hard on some exciting new product initiatives, including the return of Marlin lever action rifles, which we plan to begin shipping later in the fourth quarter."

Mr. Killoy made the following observations related to the Company's third quarter 2021 performance:

Today, the Company filed its Quarterly Report on Form 10-Q for the third quarter of 2021. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release, with one additional explanatory footnote with respect to the Condensed Consolidated Statements of Income and Comprehensive Income.

Tomorrow, November 4, 2021, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the third quarter operating results. Interested parties can access the webcast at Ruger.com/corporate or by dialing 855-871-7398, participant code 5189611.

The Quarterly Report on Form 10-Q for the third 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 third 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)

 

October 2, 2021

December 31, 2020

 

 

 

 

 

 

Assets

 

 

 

 

 

Current Assets

 

 

Cash

$

27,677

 

$

20,147

 

Short-term investments

 

164,996

 

 

121,007

 

Trade receivables, net

 

71,861

 

 

57,876

 

 

 

 

Gross inventories

 

92,475

 

 

80,487

 

Less LIFO reserve

 

(49,473

)

 

(48,016

)

Less excess and obsolescence reserve

 

(3,887

)

 

(3,394

)

Net inventories

 

39,115

 

 

29,077

 

 

 

 

Prepaid expenses and other current assets

 

5,210

 

 

6,266

 

Total Current Assets

 

308,859

 

 

234,373

 

 

 

 

Property, plant and equipment

 

408,733

 

 

393,843

 

Less allowances for depreciation

 

(344,192

)

 

(323,110

)

Net property, plant and equipment

 

64,541

 

 

70,733

 

 

 

 

Deferred income taxes

 

11

 

 

1,530

 

Other assets

 

46,650

 

 

41,622

 

Total Assets

$

420,061

 

$

348,258

 

 

STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data)

 

October 2, 2021

December 31, 2020

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

Current Liabilities

 

 

Trade accounts payable and accrued expenses

$

38,414

 

$

37,078

 

Contract liabilities with customers

 

-

 

 

84

 

Product liability

 

870

 

 

1,052

 

Employee compensation and benefits

 

31,782

 

 

37,275

 

Workers' compensation

 

6,777

 

 

6,272

 

Income taxes payable

 

2,544

 

 

-

 

Total Current Liabilities

 

80,387

 

 

81,761

 

 

 

 

Product liability accrual

 

95

 

 

74

 

Lease liability

 

1,509

 

 

1,724

 

Deferred income taxes

 

-

 

 

-

 

 

 

 

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

 

45,239

 

 

43,468

 

Retained earnings

 

414,115

 

 

342,615

 

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

 

 

 

 

 

(145,590

 

 

)

 

 

 

 

 

(145,590

 

 

)

Total Stockholders' Equity

 

338,070

 

 

264,699

 

Total Liabilities and Stockholders' Equity

$

420,061

 

$

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

Nine Months Ended

 

October 2, 2021

September 26, 2020

October 2, 2021

September 26, 2020

 

 

 

 

 

Net firearms sales

$

177,529

 

$

145,157

 

$

560,578

 

$

397,335

 

Net castings sales

 

717

 

 

548

 

 

2,116

 

 

2,273

 

Total net sales

 

178,246

 

 

145,705

 

 

562,694

 

 

399,608

 

 

 

 

 

 

Cost of products sold

 

113,444

 

 

94,553

 

 

346,569

 

 

272,362

 

 

 

 

 

 

Gross profit

 

64,802

 

 

51,152

 

 

216,125

 

 

127,246

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Selling

 

7,753

 

 

8,432

 

 

24,290

 

 

23,355

 

General and administrative

 

10,323

 

 

9,862

 

 

33,484

 

 

26,844

 

Total operating expenses

 

18,076

 

 

18,294

 

 

57,774

 

 

50,199

 

 

 

 

 

 

Operating income

 

46,726

 

 

32,858

 

 

158,351

 

 

77,047

 

 

 

 

 

 

Other income:

 

 

 

 

Interest income

 

11

 

 

112

 

 

31

 

 

1,072

 

Interest expense

 

(114

)

 

(114

)

 

(164

)

 

(166

)

Other income, net

 

1,401

 

 

38

 

 

2,462

 

 

451

 

Total other income, net

 

1,298

 

 

36

 

 

2,329

 

 

1,357

 

 

 

 

 

 

Income before income taxes

 

48,024

 

 

32,894

 

 

160,680

 

 

78,404

 

 

 

 

 

 

Income taxes

 

12,822

 

 

8,141

 

 

42,902

 

 

19,719

 

 

 

 

 

 

Net income and comprehensive

income

 

$

 

35,202

 

 

 

$

 

24,753

 

 

 

$

 

117,778

 

 

 

$

 

58,685

 

 

 

 

 

 

 

Basic earnings per share

$

2.00

 

$

1.42

 

$

6.70

 

$

3.36

 

 

 

 

 

 

Diluted earnings per share

$

1.98

 

$

1.39

 

$

6.64

 

$

3.31

 

 

Weighted average number of

common shares outstanding - Basic

 

 

 

 

 

17,596,588

 

 

 

 

 

 

 

 

17,489,642

 

 

 

 

 

 

 

 

17,582,009

 

 

 

 

 

 

 

 

17,475,819

 

 

 

 

Weighted average number of

common shares outstanding - Diluted

 

 

 

 

 

17,778,177

 

 

 

 

 

 

 

 

17,763,277

 

 

 

 

 

 

 

 

17,749,897

 

 

 

 

 

 

 

 

17,735,474

 

 

 

 

 

 

 

 

Cash dividends per share (a)

$

1.00

 

$

5.42

 

$

2.57

 

$

5.95

 

(a) Cash dividends per share for the three and nine months ended September 26, 2020 include the $5.00 per share special dividend paid in August of 2020.

 

STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(Dollars in thousands)

 

Nine Months Ended

 

October 2,

2021

September 26,
2020

 

 

 

Operating Activities

 

 

Net income

$

117,778

 

$

58,685

 

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

 

 

Depreciation and amortization

 

22,001

 

 

21,644

 

Stock-based compensation

 

6,672

 

 

4,430

 

Gain on sale of assets

 

(111

)

 

(72

)

Deferred income taxes

 

1,519

 

 

3,127

 

Changes in operating assets and liabilities:

 

 

Trade receivables

 

(13,985

)

 

(5,580

)

Inventories

 

(10,038

)

 

14,722

 

Trade accounts payable and accrued expenses

 

1,720

 

 

(1,614

)

Contract liability to customers

 

(84

)

 

(8,420

)

Employee compensation and benefits

 

(6,569

)

 

15,299

 

Product liability

 

(161

)

 

196

 

Prepaid expenses, other assets and other liabilities

 

(4,282

)

 

(19,215

)

Income taxes payable

 

2,544

 

 

(1,223

)

Cash provided by operating activities

 

117,004

 

 

81,979

 

 

 

 

Investing Activities

 

 

Property, plant and equipment additions

 

(15,617

)

 

(8,044

)

Proceeds from sale of assets

 

135

 

 

178

 

Purchases of short-term investments

 

(376,979

)

 

(268,451

)

Proceeds from maturities of short-term investments

 

332,990

 

 

293,962

 

Cash (used for) provided by investing activities

 

(59,471

)

 

17,645

 

 

 

 

Financing Activities

 

 

Remittance of taxes withheld from employees related to

share-based compensation

 

 

 

(4,801

 

)

 

 

 

(1,297

 

)

Dividends paid

 

(45,202

)

 

(104,097

)

Cash used for financing activities

 

(50,003

)

 

(105,394

)

 

 

 

Increase (decrease) in cash and cash equivalents

 

7,530

 

 

(5,770

)

 

 

 

Cash and cash equivalents at beginning of period

 

20,147

 

 

35,420

 

 

 

 

Cash and cash equivalents at end of period

$

27,677

 

$

29,650

 

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

Nine Months Ended

 

October 2, 2021

September 26, 2020

October 2, 2021

September 26, 2020

 

 

 

 

Net income

$

35,202

 

$

24,753

 

$

117,778

 

$

58,685

 

 

 

 

 

 

Income tax expense

 

12,822

 

 

8,141

 

 

42,902

 

 

19,719

 

Depreciation and amortization

expense

 

 

 

7,250

 

 

 

 

 

7,215

 

 

 

 

 

22,001

 

 

 

 

 

21,644

 

 

Interest income

 

(11

)

 

(112

)

 

(31

)

 

(1,072

)

Interest expense

 

114

 

 

114

 

 

164

 

 

166

 

EBITDA

$

55,377

 

$

40,111

 

$

182,814

 

$

99,142

 

 


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