Sturm, Ruger & Company, Inc. Reports First Quarter Fully Diluted Earnings of $1.20 Per Share and Dividend of 49¢ Per Share Business Wire SOUTHPORT, Conn. -- 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. *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. 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 BALANCE SHEETS (Dollars in thousands) March 30, December 31, 2013 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 STURM, RUGER & COMPANY, INC. CONDENSED BALANCE SHEETS (Continued) (Dollars in thousands, except share data) March 30, December 31, 2013 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 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 STURM, RUGER & COMPANY, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands) Three Months Ended March 30, March 31, 2013 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 (2,676 ) 5,119 liabilities 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 withheld from employees related to (2,082 ) (884 ) share-based compensation 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 Contact: Sturm, Ruger & Company, Inc. One Lacey Place Southport, CT 06890 www.ruger.com 203-259-7843
Sturm, Ruger & Company, Inc. Reports First Quarter Fully Diluted Earnings of $1.20 Per Share and Dividend of 49¢ Per Share
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