Ruger Reports Q1 Earnings, Expects Surge During the Election Year
OutdoorHub Reporters 05.02.12
In a recently released press release and and its Annual Meeting of Stockholders, Sturm, Ruger & Company, Inc. (Ruger) reported diluted earnings of $0.79 per share and highlighted other achievements for the company in first quarter of 2012 and for the entire year of 2011, including the success of their “1.2 Million Gun Challenge to Benefit the NRA.”
In the online broadcast of the meeting, Ruger President and Chief Executive Officer Michael O. Fifer announced a growth in market share over the last five years, with 2009 being an especially profitable year because of the election surge. He also attributed their linear growth (with the exception of a small decrease in 2010 because of the extraordinarily high surge the year prior) to the probable growth of the firearm industry, based on the increasing number of NICS checks. NICS checks grew 34 percent in the past five years, while Ruger grew 127 percent during the same time.
This year, Ruger’s first quarter earnings are up by 23 percent over Q1 in 2011. Their growth in the industry and share in the market may be attributed to their newly developed products, which made up 30 percent of their sales in 2011 and 37 percent in the first quarter of 2012. New products sold in Q1 generally have a higher percentage because of multiple distributor shows and trade shows like the Shooting, Hunting, Outdoor Trade (SHOT) Show. Some of the major new products of 2012 included:
- The Ruger American rifle
- SR22 pistol
- LC9 pistol
- The Gunsite Scout rifle (for which there is a long waiting list)
- SR1911 pistol
- and a new product derivative, the 10/22 Take Down rifle
The company experienced a large surge in revenue in 2009 because of the presidential election the year prior and subsequent inauguration. This year, the company is gearing up for another year of high demand, but expects demand to decrease again after the election.
Original press release issued by Sturm, Ruger & Company, Inc. on May 2, 2012
Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for the first quarter 2012, the Company reported net sales of $112.3 million and fully diluted earnings of 79¢ per share, compared with sales of $75.4 million and fully diluted earnings of 42¢ per share in the first quarter of 2011.
The Company also announced today that its Board of Directors declared a dividend of 32.4¢ per share for the first quarter, for shareholders of record as of May 14, 2012, payable on May 29, 2012. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. Effective with the dividend paid in March 2012, the Company increased the percent of quarterly earnings paid out as dividends by 67%. This dividend is approximately 40% of our net income.
Chief Executive Officer Michael O. Fifer made the following comments related to the Company’s results:
Our earnings nearly doubled from the first quarter of 2011, driven by the 49% 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 $40.8 million or 37% of sales in the first quarter of 2012. New product introductions in the first quarter of 2012 included:
- Ruger American Rifle
- SR22 pistol
- 10/22 Take Down rifle
The estimated sell-through of our products from independent distributors to retailers in 2012 increased 62% from the first quarter of 2011. During this period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 23%.
On March 21, 2012, the Company announced that it temporarily suspended the acceptance of new orders. In the first quarter of 2012, orders for 1.2 million units were received by the Company, which exceeded the total units shipped during 2011. The Company anticipates resuming the acceptance of orders at the end of May 2012.
Cash generated from operations during the first quarter of 2012 was $21.8 million. At March 31, 2012, our cash, cash equivalents, and short-term investments totaled $95.8 million, an increase of $14.7 million from December 2011. Our current ratio is 3.1 to 1 and we have no debt.
In the first quarter of 2012, capital expenditures totaled $3.0 million. We expect to invest approximately $20 million for capital expenditures during 2012.
At March 31, 2012, stockholders’ equity was $149.8 million, which equates to a book value of $7.82 per share, of which $5.01 per share was cash and equivalents.
On March 31, 2012, the Company completed the fourth and final quarter of its “1.2 Million Gun Challenge to Benefit the NRA.” During this year-long challenge, Ruger donated a total of $1,253,700 to the NRA. We believe that Ruger is the first firearms manufacturer to build and ship more than one million firearms in one year.
Today, the Company filed its Quarterly Report on Form 10-Q for the first quarter of 2012. 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 at www.sec.gov and the Ruger website at 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.
