Sturm, Ruger & Company, Inc. Reports Second Quarter Diluted Earnings of 91¢ Per Share and Declares Quarterly Dividend of 36¢ Per Share

August 02, 2023

Sturm, Ruger & Company, Inc. (NYSE: RGR) announced today that for the second quarter of 2023, net sales were $142.8 million and diluted earnings were 91¢ per share. For the corresponding period in 2022, net sales were $140.7 million and diluted earnings were $1.17 per share.

For the six months ended July 1, 2023, net sales were $292.3 million and diluted earnings were $1.72 per share. For the corresponding period in 2022, net sales were $307.2 million and diluted earnings were $2.87 per share.

The Company also announced today that its Board of Directors declared a dividend of 36¢ per share for the second quarter for stockholders of record as of August 15, 2023, payable on August 30, 2023. 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 Christopher J. Killoy commented on the second quarter of 2023, "Our second quarter sales were flat compared to last year despite the softening demand in some product categories, including polymer pistols, bolt action rifles, and modern sporting rifles. We continually review independent distributor sell-through data and inventory trends, and channel inventories of several of our product families remain below desired levels. We continue to adjust our level of production and product mix to better align our output with current, and expected, consumer demand as we strive to capitalize on these opportunities and better satisfy demand. While down from the prior year quarter, we are pleased that our profitability this quarter improved from the first quarter of 2023 on essentially flat sales."

Mr. Killoy discussed some of the Company's recent new product development initiatives, "The first half of the year saw several new product introductions. Most notably, we launched two new additions to the Marlin lever-action rifle family - the 336 Classic, chambered in 30-30 Winchester and the 1894 Classic, chambered in .44 Magnum. These products were received with great excitement by our customers and Marlins continue to be the most talked about and requested products in our lineup. In April, we launched the Super Wrangler steel frame single-action revolver, which comes with two cylinders, one for inexpensive .22 LR ammunition and one for the more powerful 22 WMR. The moderately-priced Wrangler family has remained popular since its introduction in 2019."

Mr. Killoy concluded his remarks on new product introductions, "Recently, there were some changes to the requirements for pistols to be sold in California. Consequently, three Ruger pistols were added to the California roster of certified handguns, including a Mark IV pistol, SR22 pistol, and LCP pistol. This is the first time in 10 years that we have been able to offer new quality Ruger pistols to our customers in California and we hope to add more in the second half of the year."

Mr. Killoy made the following observations related to the Company's second quarter 2023 performance:

• The estimated unit sell-through of the Company's products from independent distributors to retailers decreased 7% in the first half of 2023 compared to the prior year period. For the same period, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 4%.
• Sales of new products, including the MAX-9 pistol, LCP MAX pistol, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, Super Wrangler revolver, and the Security-380 pistol, represented $63.3 million or 23% of firearm sales in the first half of 2023. New product sales include only major new products that were introduced in the past two years.
• Our profitability declined in the second quarter of 2023 from the second quarter of 2022 as our gross margin decreased from 31% to 27%. The lower margin was driven by:
  • a product mix shift toward products with relatively lower margins that remain in stronger demand,
  • inflationary cost increases in materials, commodities, services, energy, fuel and transportation,
  • unfavorable deleveraging of fixed costs resulting from decreased production, and
  • increased sales promotional costs.
• During the second quarter of 2023, the Company's finished goods inventory and distributor inventories of the Company's products increased 51,100 units and 13,400 units, respectively.
• Cash provided by operations during the first half of 2023 was $21.8 million. At July 1, 2023, our cash and short-term investments totaled $137.7 million. Our current ratio is 4.5 to 1 and we have no debt.
• In the first half of 2023, capital expenditures totaled $4.9 million related to new product introductions and upgrades to our manufacturing equipment and facilities. We expect our 2023 capital expenditures to approximate $20 million.
• In the first half of 2023, the Company returned $101.4 million to its shareholders through the payment of our quarterly dividends and a $5.00 per share special dividend paid in January.
• At July 1, 2023, stockholders' equity was $333.2 million, which equates to a book value of $18.80 per share, of which $7.77 per share was cash and short-term investments.

Today, the Company filed its Quarterly Report on Form 10-Q for the second quarter of 2023. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release. - View Release

On Thursday, August 3, 2023, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the second quarter 2023 operating results. Interested parties can listen to the webcast via this link or by visiting Ruger.com/corporate. Those who wish to ask questions during the webcast will need to pre-register prior to the meeting.

The Quarterly Report on Form 10-Q for the second quarter of 2023 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.