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Sturm, Ruger & Company, Inc. Reports Second Quarter Fully Diluted Earnings of $1.63 Per Share and Dividend of 65¢ Per Share



  Sturm, Ruger & Company, Inc. Reports Second Quarter Fully Diluted Earnings
  of $1.63 Per Share and Dividend of 65¢ Per Share

Business Wire

SOUTHPORT, Conn. -- July 31, 2013

Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the second
quarter of 2013 the Company reported net sales of $179.5 million and fully
diluted earnings of $1.63 per share, compared with net sales of $119.6 million
and fully diluted earnings of 91¢ per share in the second quarter of 2012.

For the six months ended June 29, 2013, net sales were $335.4 million and
fully diluted earnings were $2.83 per share. For the corresponding period in
2012, net sales were $231.9 million and fully diluted earnings were $1.71 per
share.

The Company also announced today that its Board of Directors declared a
dividend of 65¢ per share for the second quarter, for shareholders of record
as of August 16, 2013, payable on August 30, 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 79% from the second quarter of 2012, driven by the
    50% 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 $102.7 million or 31% of firearm sales in
    the first half of 2013. New product introductions in the first half of
    2013 included the LC380 pistol and the SR45 pistol.
  * During the second quarter and first half of 2013, the estimated unit
    sell-through of our products from the independent distributors to
    retailers increased 37% and 23% from the comparable prior year periods.
    Insufficient distributor inventory at December 31, 2012 severely limited
    the estimated sell-through from independent distributors to retailers in
    the first half of 2013. For the same periods, National Instant Criminal
    Background Check System (“NICS”) background checks (as adjusted by the
    National Shooting Sports Foundation) increased 16% and 33%, respectively.
  * Cash generated from operations during the six months ended June 29, 2013
    was $69.8 million. At June 29, 2013, our cash totaled $64.8 million. Our
    current ratio is 1.8 to 1 and we have no debt.
  * In the first half of 2013, capital expenditures totaled $18.8 million,
    much of it related to new products and the expansion of production
    capacity. We expect to invest approximately $35 million on capital
    expenditures during 2013.
  * In the first half of 2013, the Company returned $17.3 million to its
    shareholders through the payment of dividends.
  * At June 29, 2013, stockholders’ equity was $135.8 million, which equates
    to a book value of $7.02 per share, of which $3.35 per share was cash and
    equivalents.

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

Tomorrow, August 1, 2013, Sturm, Ruger will host a webcast at 9:00 a.m. EDT to
discuss the second quarter operating results. Interested parties can access
the webcast at www.ruger.com/corporate  or www.earnings.com or by dialing
866-825-1709, participant code 14272752.

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 & Co., Inc. is one of the nation’s leading manufacturers of
rugged, reliable firearms for the commercial sporting market. The only
full-line manufacturer of American-made firearms, Ruger offers consumers over
400 variations of more than 30 product lines. For more than 60 years, Ruger
has been a model of corporate and community responsibility. Our motto, “Arms
Makers for Responsible Citizens,” echoes the importance of 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 BALANCE SHEETS

(Dollars in thousands)
                                                        
                                          June 29,       December 31,
                                                        
                                          2013           2012
                                                          
                                                          
Assets
                                                          
Current Assets
Cash                                      $ 64,781       $ 30,978
Trade receivables, net                      57,344         43,018
                                                          
Gross inventories                           56,153         55,827
Less LIFO reserve                           (38,631  )     (38,089  )
Less excess and obsolescence reserve        (1,468   )     (1,729   )
Net inventories                             16,054         16,009    
                                                          
Deferred income taxes                       7,508          5,284
Prepaid expenses and other current assets   693            1,632     
Total Current Assets                        146,380        96,921
                                                          
Property, plant and equipment               214,369        195,713
Less allowances for depreciation            (138,570 )     (129,720 )
Net property, plant and equipment           75,799         65,993    
                                                          
Deferred income taxes                       2,471          2,004
Other assets                                11,893         9,568     
Total Assets                              $ 236,543      $ 174,486   

STURM, RUGER & COMPANY, INC.

 

CONDENSED BALANCE SHEETS (Continued)

(Dollars in thousands, except share data)
                                                      
                                            June 29,   December 31,
                                                      
                                            2013       2012
                                                        
                                                        
Liabilities and Stockholders’ Equity
                                                        
Current Liabilities
Trade accounts payable and accrued expenses $ 44,033   $ 38,500
Product liability                           989        720
Employee compensation and benefits          26,701     15,182
Workers’ compensation                       4,550      4,600
Income taxes payable                        6,123      489
Total Current Liabilities                   82,396     59,491
                                                        
Accrued pension liability                   18,136     19,626
Product liability                           238        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 – 23,640,804 issued,
                                                        
19,341,370 outstanding
                                                        
2012 – 23,562,422 issued,
                                            23,641     23,563
19,262,988 outstanding
Additional paid-in capital                  18,108     15,531
Retained earnings                           161,528    123,442
Less: Treasury stock – at cost
                                            (37,884)   (37,884)
2013 and 2012 – 4,299,434 shares
Accumulated other comprehensive loss        (29,620)   (29,620)
Total Stockholders’ Equity                  135,773    95,032
Total Liabilities and Stockholders’ Equity  $236,543   $174,486

STURM, RUGER & COMPANY, INC.

 

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)
                                                    
                         Three Months Ended          Six Months Ended
                         June 29,      June 30,      June 29,      June 30,
                                                                  
                         2013          2012          2013          2012
                                                                  
                                                                    
Net firearms sales       $ 176,787     $ 118,147     $ 330,227     $ 228,934
Net castings sales         2,741         1,422         5,207         2,972    
Total net sales            179,528       119,569       335,434       231,906
                                                                    
Cost of products sold      108,804       74,435        203,401       144,979
                                                                    
Gross profit               70,724        45,134        132,033       86,927   
                                                                    
Operating expenses:
Selling                    11,823        9,107         27,588        20,107
General and                8,317         7,526         16,760        13,904
administrative
Other operating expenses   (168    )     189           (238    )     190      
(income), net
Total operating expenses   19,972        16,822        44,110        34,201   
                                                                    
Operating income           50,752        28,312        87,923        52,726   
                                                                    
Other income:
Interest expense, net      (39     )     (21     )     (55     )     (44     )
Other income, net          166           303           361           483      
Total other income, net    127           282           306           439      
                                                                    
Income before income       50,879        28,594        88,229        53,165
taxes
                                                                    
Income taxes               18,571        10,580        32,203        19,671   
                                                                    
Net income and           $ 32,308      $ 18,014      $ 56,026      $ 33,494   
comprehensive income
                                                                    
Basic earnings per share $ 1.67        $ 0.94        $ 2.90        $ 1.75     
                                                                    
Fully diluted earnings   $ 1.63        $ 0.91        $ 2.83        $ 1.71     
per share
                                                                    
Cash dividends per share $ 0.490       $ 0.324       $ 0.894       $ 0.536    

STURM, RUGER & COMPANY, INC.

 

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)
                                                                  
                                                     Six Months Ended
                                                     June 29,      June 30,
                                                                  
                                                     2013          2012
                                                                    
Operating Activities
Net income                                           $ 56,026      $ 33,494
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization                          9,434         6,774
Slow moving inventory valuation adjustment             (261    )     (64     )
Stock-based compensation                               2,659         2,104
Gain on sale of assets                                 (70     )     (13     )
Deferred income taxes                                  (2,691  )     (1,350  )
Changes in operating assets and liabilities:
Trade receivables                                      (14,326 )     (5,107  )
Inventories                                            216           1,071
Trade accounts payable and accrued expenses            5,483         (1,400  )
Employee compensation and benefits                     10,861        (670    )
Product liability                                      170           (366    )
Prepaid expenses, other assets and other               (3,296  )     2,054
liabilities
Income taxes payable                                   5,634         977      
Cash provided by operating activities                  69,839        37,504   
                                                                    
Investing Activities
Property, plant and equipment additions                (18,820 )     (12,339 )
Proceeds from sale of assets                           70            13
Purchases of short-term investments                    -             (29,993 )
Proceeds from maturities of short-term investments     -             9,999    
Cash used for investing activities                     (18,750 )     (32,320 )
                                                                    
Financing Activities
Tax benefit from exercise of stock options and         2,078         1,037
vesting of RSU’s
Remittance of taxes withheld from employees
related to                                             (2,082  )     (1,045  )

share-based compensation
Dividends paid                                         (17,282 )     (10,272 )
Cash used for financing activities                     (17,286 )     (10,280 )
                                                                    
Increase (decrease) in cash and cash equivalents       33,803        (5,096  )
                                                                    
Cash and cash equivalents at beginning of period       30,978        81,056
                                                                    
Cash and cash equivalents at end of period           $ 64,781      $ 75,960   

Contact:

Sturm, Ruger & Company, Inc.
One Lacey Place
Southport, CT 06890
www.ruger.com
203-259-7843
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