Sturm, Ruger & Company, Inc. Reports First Quarter Diluted Earnings of 40¢ Per Share and Declares Quarterly Dividend of 16¢ Per Share

May 07, 2024

Sturm, Ruger & Company, Inc. (NYSE: RGR) announced today that for the first quarter of 2024, net sales were $136.8 million and diluted earnings were 40¢ per share. For the corresponding period in 2023, net sales were $149.5 million and diluted earnings were 81¢ per share.

The Company also announced today that its Board of Directors declared a dividend of 16¢ per share for the first quarter for stockholders of record as of May 20, 2024, payable on June 7, 2024. 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 first quarter of 2024, "Although the overall firearms market declined in the first quarter, demand for several of our product families remained strong, including many of our recently introduced products:

• 75th Anniversary Mark IV Target pistol,
• 75th Anniversary 10/22 rifles,
• 75th Anniversary LCP MAX pistol,
• American Rifle Generation II family of rifles,
• Mini-14 Tactical with side-folding stock, and
• LC Carbine chambered in .45 Auto.

This drove our sales increase from the fourth quarter and the strong distributor sell-through of our products to retail and resulted in significant reductions in both our finished goods inventory and the inventory of our products at distributors during the first quarter. We will continue to shift resources to increase production and better capitalize on these areas of demand."

Mr. Killoy continued, "We recently executed a variety of strategic moves aimed at ensuring our long-term success and continued leadership in an ever-evolving firearms market. This involved reorganizing specific aspects of our business to achieve greater efficiency and productivity. Consequently, we undertook a reduction in force that impacted about 80 of our employees, approximately half of which were reassigned to manufacturing positions. This reduction in force resulted in a severance expense of $1.5 million in the first quarter and will result in annualized savings of approximately $9 million. As we focus on these goals, we will continue to pursue opportunities to consolidate functions and reduce or eliminate investment where possible."

Mr. Killoy made the following observations related to the Company’s first quarter 2024 performance:

• The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 1% in the first quarter of 2024 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 Security-380 pistol, Super Wrangler revolver, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle Generation II represented $42 million or 32% of firearm sales in the first quarter of 2024, an increase from $30 million or 21% of sales in the first quarter of 2023. New product sales include only major new products that were introduced in the past two years.
• Our profitability declined in the first quarter of 2024 from the first quarter of 2023 as our gross margin decreased from 26% to 21%. The lower margin was driven by:
  • a product mix shift toward products with relatively lower margins that remain in relatively stronger demand,
  • unfavorable deleveraging of fixed costs resulting from decreased production and sales, and
  • inflationary cost increases in materials, commodities, services, energy, fuel and transportation.
• During the first quarter of 2024, the Company's finished goods inventory and distributor inventories of the Company’s products decreased 30,900 units and 51,300 units, respectively.
• Cash provided by operations during the first quarter of 2024 was $7.3 million. At March 30, 2024, our cash and short-term investments totaled $115.3 million. Our current ratio is 5.2 to 1 and we have no debt.
• In the first quarter of 2024, capital expenditures totaled $1.8 million related to new product introductions, upgrades to our manufacturing equipment and facilities. We expect our 2024 capital expenditures to approximate $15 million.
• In the first quarter of 2024, the Company returned $7.3 million to its shareholders through;
  • the payment of $4.1 million of quarterly dividend, and
  • the repurchase of 75,024 shares of its common stock in the open market at an average price of $42.89 per share, for a total of $3.2 million.
• At March 30, 2024, stockholders' equity was $332.0 million, which equates to a book value of $19.08 per share, of which $6.63 per share was cash and short-term investments.

Today, the Company filed its Quarterly Report on Form 10-Q for the first quarter of 2024. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release. - View Release

Tomorrow, May 8, 2024, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the first quarter 2024 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 first quarter of 2024 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.