EXHIBIT 99.1

 

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

 

STURM, RUGER & COMPANY, INC. REPORTS 2012 FULLY DILUTED

EARNINGS OF $3.60 PER SHARE AND DECLARES DIVIDEND OF 40.4¢ PER SHARE

 

SOUTHPORT, CONNECTICUT, February 27, 2013--Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for 2012, the Company reported net sales of $491.8 million and fully diluted earnings of $3.60 per share, compared with net sales of $328.8 million and fully diluted earnings of $2.09 per share in 2011.

 

For the fourth quarter of 2012, net sales were $141.8 million and fully diluted earnings were $1.00 per share. For the corresponding period in 2011, net sales were $93.2 million and fully diluted earnings were 54¢ per share.

 

The Company also announced today that its Board of Directors declared a dividend of 40.4¢ per share for the fourth quarter, for shareholders of record as of March 8, 2013, payable on March 22, 2013. 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 results:

 

·

Our earnings increased 77% in 2012, driven by the 50% growth in sales and our ongoing focus on continuous improvement in our operations.

 

 

 

·

New product introductions were a significant component of our sales growth as new product sales represented $182.0 million or 38% of sales in 2012. New product introductions in 2012 included:

 

o

the Ruger American rifle,

 

o

the 10/22 TakeDown rifle,

 

o

the SR22 pistol,

 

o

the 22/45 Lite pistol, and

 

o

the Single-Nine revolver.

 

·

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 fourth quarter and twelve months ended December 31, 2012 as illustrated below:

 

		Period ended December 31, 2012
		Q4		Twelve months
Increase in estimated Ruger Units Sold from Distributors to Retailers		73%		63%
Increase in total adjusted NICS Background Checks		41%		28%

 

·

Cash generated from operations during 2012 was $87.2 million. At December 31, 2012, our cash and cash equivalents totaled $31 million, a decrease of $50 million from December 2011 due to the $87 million special dividend paid in December. Our current ratio is 1.6 to 1 and we have no debt.

 

·

In 2012, capital expenditures totaled $27.3 million, much of it related to new products and the expansion of production capacity. We expect to invest approximately $30 million for capital expenditures during 2013.

 

·

In 2012, the Company returned $111.5 million to its shareholders through the payment of dividends.

 

·

At December 31, 2012, stockholders’ equity was $95.0 million, which equates to a book value of $4.93 per share, of which $1.61 per share was cash and equivalents.

 

Today, the Company filed its Annual Report on Form 10-K for 2012. The financial statements included in this Annual Report on Form 10-K are attached to this press release.

 

The Annual Report on Form 10-K 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 Annual Report on Form 10-K 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.

 

 

 

STURM, RUGER & COMPANY, INC.

 

 

Balance Sheets

 

(Dollars in thousands, except per share data)

 

 

December 31,		2012				2011
Assets
Current Assets
Cash and cash equivalents		$	30,978			$	81,056
Trade receivables, net			43,018				42,225
Gross inventories			55,827				49,004
Less LIFO reserve			(38,089	)			(37,476	)
Less excess and obsolescence reserve			(1,729	)			(1,311	)
Net inventories			16,009				10,217
Deferred income taxes			5,284				5,776
Prepaid expenses and other current assets			1,632				6,968
Total Current Assets			96,921				146,242
Property, Plant, and Equipment			195,713				169,142
Less allowances for depreciation			(129,720	)			(116,195	)
Net property, plant and equipment			65,993				52,947
Deferred income taxes			2,004				32
Other assets			9,568				7,289
Total Assets		$	174,486			$	206,510

 

 

 

STURM, RUGER & COMPANY, INC.

 

 

Balance Sheets (Continued)

 

(Dollars in thousands, except per share data)

 

 

December 31,		2012				2011
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses		$	38,500			$	28,592
Product liability			720				1,305
Employee compensation and benefits			15,182				14,882
Workers’ compensation			4,600				4,600
Income taxes payable			489				217
Total Current Liabilities			59,491				49,596
Accrued pension liability			19,626				19,082
Product liability			337				441
Contingent liabilities			-				-
Stockholders’ Equity
Common stock, non-voting, par value $1: Authorized shares – 50,000; none issued
Common stock, par value $1:       Authorized shares – 40,000,000       2012 – 23,562,422 issued,                   19,262,988 outstanding       2011 – 23,382,566 issued,                   19,083,132 outstanding			23,563				23,383
Additional paid-in capital			15,531				10,454
Retained earnings			123,442				168,981
Less: Treasury stock – at cost       2012 and 2011 – 4,299,434 shares			(37,884	)			(37,884	)
Accumulated other comprehensive loss			(29,620	)			(27,543	)
Total Stockholders’ Equity			95,032				137,391
Total Liabilities and Stockholders’ Equity		$	174,486			$	206,510

 

 

 

STURM, RUGER & COMPANY, INC.

 

 

Statements of Income and Comprehensive Income

 

(Dollars in thousands, except per share data)

 

 

Year ended December 31,		2012				2011				2010
Net firearms sales		$	484,933			$	324,200			$	251,680
Net castings sales			6,891				4,616				3,526
Total net sales			491,824				328,816				255,206
Cost of products sold			312,871				217,058				171,224
Gross profit			178,953				111,758				83,982
Operating Expenses:
Selling			38,363				28,691				23,517
General and administrative			29,231				20,970				16,652
Other operating expenses (income), net			293				(319	)			420
Total operating expenses			67,887				49,342				40,589
Operating income			111,066				62,416				43,393
Other income:
Royalty income			824				873				429
Interest income			34				29				48
Interest expense			(95	)			(110	)			(143	)
Other income, net			280				308				422
Total other income, net			1,043				1,100				756
Income before income taxes			112,109				63,516				44,149
Income taxes			41,480				23,501				15,894
Net income			70,629				40,015				28,255
Other comprehensive (loss) income, net of tax:
Defined benefit pension plans			(2,077	)			(7,895	)			714
Comprehensive income		$	68,552			$	32,120			$	28,969
Basic Earnings Per Share		$	3.69			$	2.12			$	1.48
Fully Diluted Earnings Per Share		$	3.60			$	2.09			$	1.46
Cash Dividends Per Share		$	5.80			$	0.43			$	0.33

STURM, RUGER & COMPANY, INC.

 

Statements of Cash Flows

(Dollars in thousands)

 

Year ended December 31,		2012				2011				2010
Operating Activities
Net income		$	70,629			$	40,015			$	28,255
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			14,888				12,148				9,207
Stock-based compensation			4,718				2,953				2,589
Excess and obsolescence inventory reserve			761				(234	)			(1,057	)
Loss (gain) on sale of assets			(944	)			(26	)			22
Deferred income taxes			(1,480	)			8,205				493
Impairment charge			(1,134	)			-				-
Changes in operating assets and liabilities:
Trade receivables			(793	)			(10,660	)			(6,516	)
Inventories			(6,553	)			(156	)			888
Trade accounts payable and accrued expenses			9,908				11,807				3,932
Employee compensation and benefits			(4,345	)			3,959				(1,967	)
Product liability			(689	)			724				(1,060	)
Prepaid expenses, other assets and other liabilities			1,947				(10,961	)			(1,333	)
Income taxes payable			272				(365	)			(962	)
Cash provided by operating activities			87,185				57,409				32,491
Investing Activities
Property, plant, and equipment additions			(27,282	)			(22,135	)			(19,409	)
Purchases of short-term investments			(59,966	)			(122,978	)			(164,966	)
Proceeds from sales or maturities of short-term investments			59,966				175,471				163,214
Net proceeds from sale of assets			1,003				319				21
Cash (used for) provided by investing activities			(26,279	)			30,677				(21,140	)
Financing Activities
Dividends paid			(111,523	)			(8,159	)			(6,317	)
Tax benefit from exercise of stock options			3,474				3,855				1,923
Repurchase of common stock			-				(1,999	)			(5,718	)
Payment of employee withholding tax related to share-based compensation			(3,083	)			(5,859	)			(1,115	)
Proceeds from exercise of stock options			148				-				-
Cash used for financing activities			(110,984	)			(12,162	)			(11,227	)
(Decrease) increase in cash and cash equivalents			(50,078	)			75,924				124
Cash and cash equivalents at beginning of year			81,056				5,132				5,008
Cash and cash equivalents at end of year		$	30,978			$	81,056			$	5,132