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Sturm, Ruger & Company, Inc. (NYSE-RGR), today filed its Quarterly Report on Form 10-Q for the third quarter of 2008 and a letter to Ruger shareholders on Form 8-K, which have been posted and are available on the SEC website at www.sec.gov and the Ruger website at www.ruger.com/corporate/. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release - View Financial Statements. However, investors are urged to read the complete Form 10-Q and the letter to shareholders to ensure that they have adequate information to make informed investment judgments.
For the third quarter of 2008, the Company reported net sales of $41.8 million and earnings per share of $0.02, compared with sales of $31.9 million and a loss per share of $(0.03) in the third quarter of 2007.
Chief Executive Officer, Michael O. Fifer made the following comments related to the third quarter of 2008:
• Our sales grew 31% from the third quarter of 2007 and 8% from the second quarter of 2008, primarily on the strength of new product shipments.
• At the end of the quarter, our cash, cash equivalents and short-term investments totaled $22.6 million. Our pre-LIFO working capital of $91.6 million, less the LIFO reserve of $47.5 million, resulted in working capital of $44.1 million and a current ratio of 2.8 to 1.
• To enhance and protect our strong liquidity in reaction to the recent turmoil in the financial markets, in late October we drew down $1 million from our $25 million credit facility to ensure our access to it, and moved approximately $16 million from money market funds investing in Treasury Bills to direct investments in Treasury Bills.
• The Company has completed its share repurchase announced in April 2008. Under a 10b5-1 program that expired on October 17, the Company repurchased a total of 1.5 million shares of its common stock for $9.9 million in the open market, representing 7.2% of the outstanding shares, at an average price per share of $6.59. At the completion of this program and before drawing on the credit line, cash and equivalents were approximately $20 million and there were 19.1 million shares outstanding.
• Recently, the Company received a small number of reports from the field that its LCP pistols can discharge if dropped onto a hard surface. Although no injuries were reported, the Company recalled all LCP pistols in October 2008 to offer free safety upgrades. The estimated cost of this retrofit program of approximately $2.3 million was recorded in the third quarter of 2008 and had the impact of reducing earnings per share by $0.07 in the quarter. This safety upgrade program is expected to be in effect for several years.
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. With products made in America, Ruger offers consumers almost 800 variations of more than 40 product lines, across both the Ruger and Marlin brands. For almost 75 years, Ruger has been a model of corporate and community responsibility. Our motto, “Arms Makers for Responsible Citizens®,” echoes our commitment to 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 & Co., Inc. “Arms Makers for Responsible Citizens®”