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

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.