Sturm, Ruger & Company, Inc. Reports First Quarter Diluted Earnings of $1.21 Per Share, Declares Dividend of 48¢ Per Share, and Announces Expansion of Its Stock Repurchase Program To $100 Million
May 08, 2017
Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the first quarter of 2017 the Company reported net sales of $167.4 million and diluted earnings of $1.21 per share, compared with net sales of $173.1 million and diluted earnings of $1.21 per share in the first quarter of 2016.
The Company also announced today that its Board of Directors declared a dividend of 48¢ per share for the first quarter for stockholders of record as of May 19, 2017, payable on May 31, 2017. 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.
In addition, the Company announced that its Board of Directors expanded its authorization to repurchase shares of its common stock to $100 million. The previous authorization was depleted by the recent share repurchases.
Chief Executive Officer Michael O. Fifer made the following observations related to the Company's 2017 first quarter performance:
- In the first quarter of 2017, net sales decreased 3% and earnings per share remained unchanged from the first quarter of 2016.
- EBITDA was $43.6 million, or 26% of sales, in the first quarter of 2017, a decrease of 3% from $44.8 million, or 26% of sales, in the comparable prior year period.
- Sales of new products, including the Mark IV pistols, the LCP II pistol, and the Precision Rifle, represented $41.5 million or 25% of firearm sales in the first quarter of 2017. New product sales include only major new products that were introduced in the past two years.
- The estimated unit sell-through of the Company's products from the independent distributors to retailers decreased 7% in the first quarter of 2017 from the comparable prior year period. For the same period, the National Instant Criminal Background Check System background checks (as adjusted by the National Shooting Sports Foundation) decreased 11%.
- The decrease in estimated sell-through of the Company's products from the independent distributors to retailers is attributable to:
- Decreased overall consumer demand in the first quarter of 2017 due to stronger-than-normal demand during most of 2016, likely bolstered by the political campaigns for the November 2016 elections.
- Decreased overall retailer demand in the first quarter of 2017 as some retailers committed inventory dollars to certain product categories such as modern sporting rifles in the third and fourth quarters of 2016 in advance of the November elections.
- Cash generated from operations during the first quarter of 2017 was $18.9 million. At April 1, 2017, our cash totaled $35.1 million. Our current ratio is 2.2 to 1 and we have no debt.
- In the first quarter of 2017, capital expenditures totaled $7.2 million, much of it related to tooling and equipment for new products. We expect our 2017 capital expenditures to total approximately $40 million.
- In the first quarter of 2017, the Company returned $61.2 million to its shareholders through:
- the payment of $7.8 million of dividends, and
- the repurchase of 1,074,285 shares of common stock in the open market at an average price of $49.73 per share, for a total of $53.4 million.
- At April 1, 2017, stockholders' equity was $225.0 million, which equates to a book value of $12.74 per share, of which $1.99 per share is cash.
The Company previously disclosed that President & Chief Operating Officer Christopher J. Killoy would succeed Michael O. Fifer as Chief Executive Officer upon Mr. Fifer's planned retirement tomorrow, May 9, 2017. C. Michael Jacobi, Chairman of the Board of Directors, expressed the Board's appreciation of Mr. Fifer's service as Chief Executive Officer, "Mike's leadership over the past 10-1/2 years as CEO has been exemplary. His focus on new product development and operational excellence drove unprecedented financial success at Ruger, which benefited our shareholders through the payment of $265 million of dividends, share repurchases of $132 million, and an increase in Ruger's market capitalization of approximately $1 billion. We look forward to Mike's continued service to Ruger on the Board of Directors."
Today, the Company filed its Quarterly Report on Form 10-Q. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release. - View Release.
Tomorrow, May 9, 2017, Sturm, Ruger will host a webcast of its Annual Meeting of Shareholders at 9:00 a.m. ET. Interested parties can access the webcast at Ruger.com/corporate or by dialing 855-871-7398, participant code 11828022.
The Quarterly Report on Form 10-Q 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 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. As a 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
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 & Co., Inc. “Arms Makers for Responsible Citizens®”