Sturm, Ruger & Company, Inc. Reports First Quarter Fully Diluted Earnings of $1.22 Per Share and Declares Dividend of 49¢ Per Share

May 05, 2014

Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the first quarter of 2014 the Company reported net sales of $169.9 million and fully diluted earnings of $1.22 per share, compared with net sales of $155.9 million and fully diluted earnings of $1.20 per share in the first quarter of 2013.

The Company also announced today that its Board of Directors declared a dividend of 49¢ per share for the first quarter, for shareholders of record as of May 16, 2014, payable on May 30, 2014. 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 2014 first quarter performance:

• Our earnings increased 2% from the first quarter of 2013 on a 9% increase in sales. The main driver of the reduced operating margins was a product mix shift away from unusually strong sales of higher-margin firearms accessories that we enjoyed one year ago. Additionally, increased depreciation expense affected operating margins. At the same time, our EBITDA of $47.3 million increased 13% from the first quarter 2013 EBITDA of $41.9 million.
• New products represented $41.3 million or 24% of firearm sales in the first quarter of 2014.
• Demand for our products significantly outpaced the growth in industry demand as measured by the National Instant Criminal Background Check System ("NICS") background checks (as adjusted by the National Shooting Sports Foundation) for the first quarter of 2014.
• Cash generated from operations during the first quarter of 2014 was $15.8 million. At March 29, 2014, our cash totaled $49.8 million. Our current ratio is 1.9 to 1 and we have no debt.
• In the first quarter of 2014, capital expenditures totaled $9.6 million, much of it related to tooling fixtures and equipment for new product introductions and to upgrade and modernize manufacturing equipment. We expect to invest approximately $35 million on capital expenditures during 2014 as we continue to prioritize new product development.
• In the first quarter of 2014, the Company returned $10.5 million to its shareholders through the payment of dividends.
• At March 29, 2014, stockholders' equity was $192.8 million, which equates to a book value of $9.94 per share, of which $2.57 per share was cash.

Today, the Company filed its Quarterly Report on Form 10-Q for 2014. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release. - View Release.

Tomorrow, May 6, 2014, Sturm, Ruger will host a webcast of its Annual Meeting of Stockholders at 9:00 a.m. ET. Interested parties can access the webcast at www.ruger.com/corporate or by dialing 866-297-6395, participant code 37122276.

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.