Sturm, Ruger & Company, Inc. Reports 2011 Fully Diluted Earnings of $2.09 Per Share and Declares Dividend of 21.2¢ Per Share

SOUTHPORT, Conn.--()--Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for 2011, the Company reported net sales of $328.8 million and fully diluted earnings of $2.09 per share, compared with sales of $255.2 million and fully diluted earnings of $1.46 per share in 2010.

For the fourth quarter of 2011, net sales were $93.2 million and fully diluted earnings were 54¢ per share. For the corresponding period in 2010, net sales were $64.1 million and fully diluted earnings were 30¢ per share.

The Company also announced today that its Board of Directors declared a dividend of 21.2¢ per share for the fourth quarter, for shareholders of record as of March 9, 2012, payable on March 23, 2012. This dividend necessarily varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. Effective with this dividend, the Company increased the percent of quarterly earnings paid out as dividends by 67%.

Chief Executive Officer Michael O. Fifer made the following comments related to the Company’s results:

  • Our earnings increased 42% in 2011, driven by the 29% growth in sales and our ongoing focus on continuous improvement in our operations.
  • In 2011, new product introductions were a significant component of our sales growth as new product sales represented $98.6 million or 30% of sales in 2011.
  • The estimated sell-through of our products from independent distributors to retailers in 2011 increased 20% from 2010. During this period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 14%.
  • Cash generated from operations during 2011 was $57.4 million. At December 31, 2011, our cash and cash equivalents totaled $81.1 million, an increase of $23.5 million from December 2010. Our current ratio is 3.0 to 1 and we have no debt.
  • In 2011, capital expenditures totaled $22.1 million, much of it related to tooling and equipment for new products. We expect to invest approximately $20 million for capital expenditures during 2012.
  • At December 31, 2011, stockholders’ equity was $137.4 million, which equates to a book value of $7.20 per share, of which $4.25 per share was cash and equivalents.
  • In 2011, we returned $10.2 million to our shareholders through the following:
    • Payment of $8.2 million of dividends, and
    • Repurchase of 133,400 shares of our common stock in the open market at an average price of $14.94 per share, for a total of $2.0 million.
  • In May 2011, the Company announced the Ruger Million Gun Challenge to benefit the National Rifle Association. Ruger pledged to donate $1 to the NRA for every Ruger firearm sold from April 2011 through March 2012, with the goal of selling one million Ruger firearms and donating $1 million to the NRA. Through December 2011, Ruger has donated $871,100 to the NRA.

Today, the Company filed its Annual Report on Form 10-K for 2011. The financial statements included in this Annual Report on Form 10-K are attached to this press release.

The Annual Report on Form 10-K 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 Annual Report on Form 10-K 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.

 
Balance Sheets

(Dollars in thousands, except per share data)

 

December 31,      

2011 

     

2010 

           
Assets
Current Assets
Cash and cash equivalents $ 81,056 $ 5,132
Short-term investments - 52,493
Trade receivables, net 42,225 31,565
 
Gross inventories 49,004 48,820
Less LIFO reserve (37,476 ) (37,448 )
Less excess and obsolescence reserve         (1,311 )         (1,545 )
Net inventories         10,217           9,827  
 
Deferred income taxes 5,776 4,780
Prepaid expenses and other current assets         6,968           1,427  
Total Current Assets 146,242 105,224
 
Property, Plant, and Equipment 169,142 150,379
Less allowances for depreciation         (116,195 )         (107,458 )
Net property, plant and equipment         52,947           42,921  
 
Deferred income taxes 32 5,443
Other assets         7,289           4,173  
Total Assets       $ 206,510         $ 157,761  
 
 

STURM, RUGER & COMPANY, INC.

 

December 31,      

2011 

     

2010 

           
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses $ 28,592 $ 16,492
Product liability 1,305 449
Employee compensation and benefits 14,882 10,923
Workers’ compensation 4,600 4,893
Income taxes payable         217           582  
Total Current Liabilities 49,596 33,339
 
Accrued pension liability 19,082 9,369
Product liability 441 573
 
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
  2011 – 23,382,566 issued,
           19,083,132 outstanding
  2010 – 23,003,285 issued,
           18,837,251 outstanding

 

 

 

 

23,383

 

 

 

 

23,003

Additional paid-in capital 10,454 9,885
Retained earnings 168,981 137,125

Less: Treasury stock – at cost
  2011 – 4,299,434 shares
  2010 – 4,166,034, shares

 

(37,884

 

)

 

(35,885

 

)

Accumulated other comprehensive loss         (27,543 )         (19,648 )
Total Stockholders’ Equity         137,391           114,480  
Total Liabilities and Stockholders’ Equity       $ 206,510         $ 157,761  
 
 
STURM, RUGER & COMPANY, INC.
 
Statements of Income

(In thousands, except per share data)

Year ended December 31,       2011       2010       2009
                 
Net firearms sales $ 324,200 $ 251,680 $ 266,566
Net castings sales         4,616           3,526           4,419  
Total net sales 328,816 255,206 270,985
 
Cost of products sold 217,058 171,224 183,380
                         
Gross profit         111,758           83,982           87,605  
 
Operating Expenses:
Selling 28,691 23,517 21,822
General and administrative 20,970 16,652 20,387
Other operating (income) expenses, net         (319 )         420           1,492  
Total operating expenses 49,342 40,589 43,701
                         
Operating income         62,416           43,393           43,904  
 
Other income:
Royalty income 873 429 490
Interest income 29 48 118
Interest expense (110 ) (143 ) (158 )
Other income, net         308           422           6  
Total other income, net 1,100 756 456
                         
Income before income taxes         63,516           44,149           44,360  
 
Income taxes 23,501 15,894 16,857
                         
Net income       $ 40,015         $ 28,255         $ 27,503  
 
Basic Earnings Per Share       $ 2.12         $ 1.48         $ 1.44  
 
Fully Diluted Earnings Per Share       $ 2.09         $ 1.46         $ 1.42  
 
Cash Dividends Per Share       $ 0.43         $ 0.33         $ 0.31  
                 
 
STURM, RUGER & COMPANY, INC.
 
Statements of Cash Flows
 

(In thousands)

Year ended December 31,      

2011 

     

2010 

     

2009 

 
Operating Activities
Net income $ 40,015 $ 28,255 $ 27,503

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation 12,148 9,207 7,300
Stock-based compensation 2,953 2,589 4,205
Slow moving inventory valuation adjustment (234 ) (1,057 ) 239
Loss (gain) on sale of assets (26 ) 22 (45 )
Deferred income taxes 8,205 493 2,060
Changes in operating assets and liabilities:
Trade receivables (10,660 ) (6,516 ) 760
Inventories (156 ) 888 2,042
Trade accounts payable and accrued expenses 11,807 3,932 2,150
Employee compensation and benefits 3,959 (1,967 ) 4,896
Product liability 724 (1,060 ) 339
Prepaid expenses, other assets and other liabilities

(10,961

)

(1,333

)

(2,132

)

Income taxes payable         (365 )         (962 )         (2,628 )
Cash provided by operating activities 57,409 32,491 46,689
 
Investing Activities
Property, plant, and equipment additions (22,135 ) (19,409 ) (13,819 )
Purchases of short-term investments (122,978 ) (164,966 ) (77,281 )
Proceeds from sales or maturities of short-term investments

175,471

163,214

45,098

Net proceeds from sale of assets         319           21           51  
Cash provided by (used for) investing activities 30,677 (21,140 ) (45,951 )
 
Financing Activities
Dividends paid (8,159 ) (6,317 ) (5,816 )

Tax benefit from exercise of stock options

3,855 1,923 1,442
Repurchase of common stock (1,999 ) (5,718 ) (14 )
Payment of employee withholding tax related to share-based compensation (5,859 ) (1,115 ) (30 )
Repayment of line of credit         -           -           (1,000 )
Cash used for financing activities         (12,162 )         (11,227 )         (5,418 )
 
Increase (decrease) in cash and cash equivalents 75,924 124 (4,680 )
Cash and cash equivalents at beginning of year         5,132           5,008           9,688  
Cash and cash equivalents at end of year       $ 81,056         $ 5,132         $ 5,008  
 

Contacts

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

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Contacts

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