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Sturm, Ruger & Company, Inc. Reports Third Quarter Diluted Earnings of $1.03 Per Share and Declares Dividend of 41¢ Per Share

Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the third quarter of 2016 the Company reported net sales of $161.4 million and diluted earnings of $1.03 per share, compared with net sales of $120.9 million and diluted earnings of 62¢ per share in the third quarter of 2015.

For the nine months ended October 1, 2016, net sales were $502.5 million and diluted earnings were $3.48 per share. For the corresponding period in 2015, net sales were $398.7 million and diluted earnings were $2.33 per share.

The Company also announced today that its Board of Directors declared a dividend of 41¢ per share for the third quarter for stockholders of record as of November 18, 2016, payable on November 25, 2016. 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 Michael O. Fifer made the following observations related to the Company's 2016 third quarter performance:

  • In the third quarter of 2016, net sales increased 34% and earnings per share increased 66% from the third quarter of 2015.
  • EBITDA was $39 million, or 24% of sales, in the third quarter of 2016, an increase of 44% from $27 million, or 22% of sales, in the comparable prior year period.
  • The following new products were launched in September:
    • the Mark IV pistols, similar to the classic Mark III designs, but with a greatly simplified one-button takedown,
    • the LCP II pistol, a major re-design of the popular LCP pistol that was introduced in 2008, and
    • the American Compact pistols, an expansion of the American pistol family that was launched in 2015.
  • New product sales, which include those launched in the third quarter as well as the Ruger Precision Rifle, the AR-556 modern sporting rifle, and the LC9s pistol, were $58 million or 36% of firearm sales in the third quarter of 2016. New product sales include only major new products that were introduced in the past two years. The new product sales percentage is expected to decrease next quarter as sales of the AR-556 and the LC9s will no longer be included among the new products.
  • The estimated unit sell-through of the Company's products from the independent distributors to retailers increased 21% in the third quarter of 2016 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) increased 16%.
  • The increase in estimated sell-through of the Company's products from the independent distributors to retailers is attributable to:
    • stronger-than-normal industry demand during the summer, likely bolstered by the political campaigns for the November elections,
    • strong demand for certain new products,
    • greater availability of rimfire ammunition which spurred demand for our 10/22 rifle and other rimfire firearms, and
    • increased production of several products in strong demand.
  • Cash generated from operations during the first nine months of 2016 was $85 million. At October 1, 2016, our cash totaled $101 million. Our current ratio is 2.7 to 1 and we have no debt.
  • In the first nine months of 2016, capital expenditures totaled $23 million, much of it related to tooling and equipment for new products. We expect our 2016 capital expenditures to total approximately $30 million.
  • In the first nine months of 2016, the Company returned $25 million to its shareholders through the payment of dividends.
  • At October 1, 2016, stockholders' equity was $266 million, which equates to a book value of $14.02 per share, of which $5.34 per share is cash.

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, November 2, 2016, 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 www.ruger.com/corporate or by dialing 855-871-7398, participant code 1173648.

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.