Attached files
| file | filename |
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| 8-K - 8-K - STURM RUGER & CO INC | d29667_8k.htm |
EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
STURM, RUGER & COMPANY, INC. REPORTS SECOND QUARTER 2012 FULLY DILUTED
EARNINGS OF 91¢ PER SHARE
SOUTHPORT, CONNECTICUT, August 1, 2012--Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for the second quarter 2012, the Company reported net sales of $119.6 million and fully diluted earnings of 91¢ per share, compared with net sales of $79.6 million and fully diluted earnings of 56¢ per share in the second quarter of 2011.
For the six months ended June 30, 2012, net sales were $231.9 million and fully diluted earnings were $1.71 per share. For the corresponding period in 2011, net sales were $155.1 million and fully diluted earnings were 99¢ per share.
The Company also announced today that its Board of Directors declared a dividend of 37.7¢ per share for the second quarter, for shareholders of record as of August 13, 2012, payable on August 27, 2012. This dividend varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. Effective with the dividend paid in March 2012, the Company increased the percent of quarterly earnings paid out as dividends by 67%. This dividend is approximately 40% of net income.
Chief Executive Officer Michael O. Fifer made the following comments related to the Company’s results:
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Our earnings increased 63% from the second quarter of 2011, driven by the 50% growth in sales and our ongoing focus on continuous improvement in our operations.
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New product introductions were a significant component of our sales growth as new product sales represented $87.8 million or 38% of sales in the first half of 2012. New product introductions in the first half of 2012 included:
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Ruger American Rifle
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SR22 pistol
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10/22 Take Down rifle
o
22/45 Lite pistol
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Demand for our products outpaced the growth in overall industry demand as measured by the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) for both the second quarter and six months ended June 30, 2012 as illustrated below:
| Period ended June 30, 2012 | |
| Q2 | Six months |
Increase in estimated Ruger Units Sold from Distributors to Retailers | 55% | 59% |
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Increase in total adjusted NICS Background Checks (thousands) | 18% | 21% |
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Cash generated from operations during the six months ended June 30, 2012 was $37.5 million. At June 30, 2012, our cash, cash equivalents, and short-term investments totaled $96.0 million, an increase of $14.9 million from December 2011. Our current ratio is 3.3 to 1 and we have no debt.
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In the first half of 2012, capital expenditures totaled $12.3 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $20 million for capital expenditures during 2012.
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In the first half of 2012, the Company returned $10.3 million to its shareholders through the payment of dividends. An additional $7.2 million in dividends will be paid to shareholders on August 27, 2012.
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At June 30, 2012, stockholders’ equity was $162.7 million, which equates to a book value of $8.49 per share, of which $5.01 per share was cash and equivalents.
Today, the Company filed its Quarterly Report on Form 10-Q for the second quarter of 2012. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.
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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 Form 10-Q to ensure that they have adequate information to make informed investment judgments.
About Sturm, Ruger
Sturm, Ruger was founded in 1949 and is one of the nation’s leading manufacturers of high-quality firearms for the commercial sporting market. Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities located in Newport, NH and Prescott, AZ.
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.
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STURM, RUGER & COMPANY, INC.
Condensed Balance Sheets (Unaudited)
(Dollars in thousands, except share data)
| June 30, | December 31 |
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Assets |
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Current Assets |
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Cash and cash equivalents | $ 75,960 | $ 81,056 |
Short-term investments | 19,994 | - |
Trade receivables, net | 47,332 | 42,225 |
Gross inventories | 47,796 | 49,004 |
Less LIFO reserve | (37,384) | (37,476) |
Less excess and obsolescence reserve | (1,202) | (1,311) |
Net inventories | 9,210 | 10,217 |
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Deferred income taxes | 6,753 | 5,776 |
Prepaid expenses and other current assets | 859 | 6,968 |
Total Current Assets | 160,108 | 146,242 |
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Property, plant and equipment | 181,161 | 169,142 |
Less allowances for depreciation | (122,629) | (116,195) |
Net property, plant and equipment | 58,532 | 52,947 |
Deferred income taxes | 405 | 32 |
Other assets | 11,364 | 7,289 |
Total Assets | $230,409 | $206,510 |
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STURM, RUGER & COMPANY, INC.
Condensed Balance Sheets (Unaudited) (Continued)
(Dollars in thousands, except share data)
| June 30, 2012 | December 31, 2011 |
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Liabilities and Stockholders’ Equity |
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Current Liabilities |
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Trade accounts payable and accrued expenses | $ 26,946 | $ 28,592 |
Product liability | 1,010 | 1,305 |
Employee compensation and benefits | 14,212 | 14,882 |
Workers’ compensation | 4,846 | 4,600 |
Income taxes payable | 1,194 | 217 |
Total Current Liabilities | 48,208 | 49,596 |
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Accrued pension liability | 19,122 | 19,082 |
Product liability accrual | 370 | 441 |
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Contingent liabilities | -- | -- |
Stockholders’ Equity |
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Common Stock, non-voting, par value $1: |
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Authorized shares 50,000; none issued | -- | -- |
Common Stock, par value $1: |
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Authorized shares – 40,000,000 2012 – 23,459,506 issued, 19,160,072 outstanding 2011 – 23,382,566 issued, 19,083,132 outstanding | 23,460 | 23,383 |
Additional paid-in capital | 12,473 | 10,454 |
Retained earnings | 192,203 | 168,981 |
Less: Treasury stock – at cost 2012 – 4,299,434 shares 2011 – 4,299,434 shares | (37,884) | (37,884) |
Accumulated other comprehensive loss | (27,543) | (27,543) |
Total Stockholders’ Equity | 162,709 | 137,391 |
Total Liabilities and Stockholders’ Equity | $230,409 | $206,510 |
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STURM, RUGER & COMPANY, INC.
Condensed Statements of Income and Comprehensive Income (Unaudited)
(Dollars in thousands, except per share data)
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Three Months Ended | Six Months Ended | ||
| June 30, | July 2, | June 30, | July 2, |
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Net firearms sales | $118,147 | $78,471 | $228,934 | $152,912 |
Net castings sales | 1,422 | 1,151 | 2,972 | 2,151 |
Total net sales | 119,569 | 79,622 | 231,906 | 155,063 |
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Cost of products sold | 74,435 | 51,157 | 144,979 | 102,604 |
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Gross profit | 45,134 | 28,465 | 86,927 | 52,459 |
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Operating expenses: |
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Selling | 9,107 | 6,468 | 20,107 | 13,380 |
General and administrative | 7,728 | 4,935 | 14,106 | 9,560 |
Total operating expenses | 16,835 | 11,403 | 34,213 | 22,940 |
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Operating income | 28,299 | 17,062 | 52,714 | 29,519 |
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Other income: |
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Interest expense, net | (21) | (13) | (44) | (33) |
Other income, net | 316 | 114 | 495 | 290 |
Total other income, net | 295 | 101 | 451 | 257 |
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Income before income taxes | 28,594 | 17,163 | 53,165 | 29,776 |
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Income taxes | 10,580 | 6,350 | 19,671 | 11,017 |
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Net income and comprehensive income | $ 18,014 | $10,813 | $ 33,494 | $ 18,759 |
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Basic earnings per share | $0.94 | $0.57 | $1.75 | $1.00 |
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Fully diluted earnings per share | $0.91 | $0.56 | $1.71 | $0.99 |
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Cash dividends per share | $0.324 | $0.097 | $0.536 | $0.147 |
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STURM, RUGER & COMPANY, INC.
Condensed Statements of Cash Flows (Unaudited)
(Dollars in thousands)
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Six Months Ended | |
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June 30, 2012 | July 2, 2011 |
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Operating Activities | ||
Net income | $ 33,494 | $ 18,759 |
Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation | 6,774 | 5,860 |
Slow moving inventory valuation adjustment | (64) | (176) |
Stock-based compensation | 2,104 | 1,247 |
Gain on sale of assets | (13) | (7) |
Deferred income taxes | (1,350) | 1,111 |
Changes in operating assets and liabilities: |
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Trade receivables | (5,107) | (292) |
Inventories | 1,071 | 5,954 |
Trade accounts payable and accrued expenses | (1,400) | 2,298 |
Employee compensation and benefits | (670) | (580) |
Product liability | (366) | 135 |
Prepaid expenses, other assets and other liabilities | 2,054 | (3,434) |
Income taxes payable | 977 | 1,499 |
Cash provided by operating activities | 37,504 | 32,374 |
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Investing Activities |
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Property, plant and equipment additions | (12,339) | (7,719) |
Proceeds from sale of assets | 13 | 16 |
Purchases of short-term investments | (29,993) | (47,496) |
Proceeds from maturities of short-term investments | 9,999 | 35,496 |
Cash used for investing activities | (32,320) | (19,703) |
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Financing Activities |
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Tax benefit from exercise of stock options | 1,037 | 1,441 |
Repurchase of common stock Payment of employee withholding tax related to share-based compensation | - (1,045) | (1,999) (2,432) |
Dividends paid | (10,272) | (2,775) |
Cash used for financing activities | (10,280) | (5,765) |
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(Decrease) Increase in cash and cash equivalents | (5,096) | 6,906 |
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Cash and cash equivalents at beginning of period | 81,056 | 5,132 |
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Cash and cash equivalents at end of period | $ 75,960 | $ 12,038 |
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