Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

October 30, 2024

 

STURM, RUGER & COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware (State or Other Jurisdiction of Incorporation)

001-10435 (Commission File Number)

06-0633559 (IRS Employer Identification Number)

 

One Lacey Place, Southport, Connecticut	06890
(Address of Principal Executive Offices)	(Zip Code)

 

[phone]

Registrant’s telephone number, including area code

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	RGR	NYSE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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Item 2.02

Results of Operations and Financial Condition

 

On October 30, 2024, the Company issued a press release to stockholders and other interested parties regarding financial results for the third quarter ended September 28, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibit No.	Description
99.1	Press release of Sturm, Ruger & Company, Inc., dated October 30, 2024, reporting the financial results for the third quarter ended September 28, 2024.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

	STURM, RUGER & COMPANY, INC.
	By:	/S/ Thomas A. Dineen
		Name:	Thomas A. Dineen
		Title:	Principal Financial Officer,
			Principal Accounting Officer,
			Senior Vice President, Treasurer and
			Chief Financial Officer

 

 

Dated: October 30, 2024

 

 

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EXHIBIT 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

STURM, RUGER & COMPANY, INC. REPORTS THIRD QUARTER

DILUTED EARNINGS OF 28¢ PER SHARE AND

DECLARES QUARTERLY DIVIDEND OF 11¢ PER SHARE

 

SOUTHPORT, CONNECTICUT, October 30, 2024--Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the third quarter of 2024, net sales were $122.3 million and diluted earnings were 28¢ per share. For the corresponding period in 2023, net sales were $120.9 million and diluted earnings were 42¢ per share.

For the nine months ended September 28, 2024, net sales were $389.9 million and diluted earnings were $1.15 per share. For the corresponding period in 2023, net sales were $413.2 million and diluted earnings were $2.13 per share.

The Company also announced today that its Board of Directors declared a dividend of 11¢ per share for the third quarter for stockholders of record as of November 13, 2024, payable on November 27, 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.

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Chief Executive Officer Christopher J. Killoy commented on the 2024 results, “The diversity of our products has been instrumental to our performance this year. We capitalized on the strong demand for several of our product families, including the Ruger American Rifle Generation II bolt-action rifles, the Marlin lever-action rifles, and the Security-380 pistol, maintaining our market share without sacrificing our long-term focus or pricing discipline. Despite the current promotion-rich environment, the estimated sell-through of our products from our independent distributors to retailers increased while our finished goods inventory and our distributors’ inventories have decreased 125,000 units in the past year. We are well positioned to increase production entering the traditionally stronger fall and winter selling seasons, allowing us to capitalize on the pent up demand for our more sought after products.”

Mr. Killoy discussed Ruger’s storied history, “Developing innovative new products to drive growth, excitement, and profitability has been the hallmark of Ruger since its inception 75 years ago. We are proud to have introduced so many new offerings in this milestone year:

·

American Rifle Generation II family of rifles,

·

The Marlin 1894, 1895 and 336 lever-action rifles,

·

LC Carbine chambered in .45 Auto and 10mm Auto,

·

75th Anniversary Mark IV Target pistol,

·

75th Anniversary 10/22 rifles,

·

75th Anniversary LCP MAX pistol,

·

75th Anniversary No. 1 rifle, and

·

Mini-14 rifle with side-folding stock.

And we are not done. Keep an eye out for an exciting new product launch in the coming months.”

Mr. Killoy concluded with an update from the National Association of Sporting Goods Wholesalers Annual Exposition, “We were thrilled to be recognized by our wholesale customers with three industry awards at this year’s NASGW Show in Kansas City, Missouri. We were named ‘Firearm Manufacturer of the Year’ for the second consecutive year, and the 12^th time in the past 15 years. Additionally, the Ruger American Rifle Generation II rifle earned the NASGW-POMA Caliber Awards for ‘Best New Rifle’ and ‘Best New Overall Product’.”

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Mr. Killoy himself was honored with the NASGW “Chairman’s Award” which is the highest honor from the NASGW Board of Directors, given to those with long-lasting, significant impact in the outdoor shooting sports industry.

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

·

The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 4% in first nine months of 2024 compared to the prior year period. For the same period, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 3%.

 

·

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 $113.3 million or 31.2% of firearm sales in the first nine months of 2024. New product sales include only major new products that were introduced in the past two years.

 

·

Compared to the third quarter of 2023, the Company’s and distributors’ finished goods inventories decreased 26,500 units and 98,600 units, respectively.

 

·

Cash provided by operations during the first nine months of 2024 was $35.5 million. At September 28, 2024, our cash and short-term investments totaled $96.0 million. Our current ratio is 4.5 to 1 and we have no debt.

 

·

In the first nine months of 2024, capital expenditures totaled $17.2 million related to new product introductions, upgrades to our manufacturing equipment, and facilities. We expect our 2024 capital expenditures to approximate $20 million.

 

·

The Company returned $39.3 million to its shareholders in the first nine months of 2024 through:

 

o

the payment of $10.0 million of quarterly dividends, and

 

o

$29.3 million through the repurchase of 699,000 shares of its common stock at an average cost of $41.99 per share, representing 4% of our outstanding shares.

 

·

At September 28, 2024, stockholders’ equity was $314.9 million, which equates to a book value of $18.76 per share, of which $5.72 per share was cash and short-term investments.

 

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

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Tomorrow, October 31, 2024, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the third quarter 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 third 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.

 

About Sturm, Ruger & Co., Inc.

Sturm, Ruger & Co., Inc. is one of the nation's leading manufacturers of rugged, reliable firearms for the commercial sporting market. With products made in America, Ruger offers consumers almost 800 variations of more than 40 product lines, across both the Ruger and Marlin brands. For 75 years, Ruger has been a model of corporate and community responsibility. Our motto, “Arms Makers for Responsible Citizens^®,” echoes our commitment to these principles as we work hard to deliver quality and innovative firearms.

 

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 CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

 

		September 28, 2024				December 31, 2023
Assets
Current Assets
Cash		$	7,522			$	15,174
Short-term investments			88,455				102,485
Trade receivables, net			60,157				59,864
Gross inventories			150,460				150,192
Less LIFO reserve			(68,265	)			(64,262	)
Less excess and obsolescence reserve			(6,159	)			(6,120	)
Net inventories			76,036				79,810
Prepaid expenses and other current assets			14,944				14,062
Total Current Assets			247,114				271,395
Property, plant and equipment			474,501				462,397
Less allowances for depreciation			(401,972	)			(390,863	)
Net property, plant and equipment			72,529				71,534
Deferred income taxes			14,918				11,976
Other assets			38,893				43,912
Total Assets		$	373,454			$	398,817

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data)

 

		September 28, 2024				December 31, 2023
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses		$	31,495			$	31,708
Contract liabilities with customers			—				149
Product liability			270				634
Employee compensation and benefits			17,413				24,660
Workers’ compensation			5,792				6,044
Total Current Liabilities			54,970				63,195
Employee compensation			1,712				1,685
Product liability accrual			61				46
Lease liability			1,766				2,170
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 2024 – 24,467,983 issued,             16,790,824 outstanding 2023 – 24,437,020 issued,             17,458,620 outstanding			24,468				24,437
Additional paid-in capital			49,441				46,849
Retained earnings			428,014				418,058
Less: Treasury stock – at cost 2024 – 7,677,159 shares 2023 – 6,978,400 shares			(186,978	)			(157,623	)
Total Stockholders’ Equity			314,945				331,721
Total Liabilities and Stockholders’ Equity		$	373,454			$	398,817

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

 

		Three Months Ended								Nine Months Ended
		September 28, 2024				September 30, 2023				September 28, 2024				September 30, 2023
Net firearms sales		$	121,512			$	120,368			$	387,349			$	411,114
Net castings sales			775				525				2,519				2,036
Total net sales			122,287				120,893				389,868				413,150
Cost of products sold			99,615				96,165				308,639				311,788
Gross profit			22,672				24,728				81,229				101,362
Operating expenses:
Selling			8,998				8,669				28,188				27,702
General and administrative			9,932				9,733				32,796				31,898
Total operating expenses			18,930				18,402				60,984				59,600
Operating income			3,742				6,326				20,245				41,762
Other income:
Interest income			1,155				1,454				3,839				4,147
Interest expense			(24	)			(122	)			(66	)			(177	)
Other income, net			392				431				749				1,082
Total other income, net			1,523				1,763				4,522				5,052
Income before income taxes			5,265				8,089				24,767				46,814
Income taxes			527				658				4,681				8,848
Net income and comprehensive income		$	4,738			$	7,431			$	20,086			$	37,966
Basic earnings per share		$	0.28			$	0.42			$	1.17			$	2.14
Diluted earnings per share		$	0.28			$	0.42			$	1.15			$	2.13
Weighted average number of common shares outstanding - Basic			16,847,866				17,722,682				17,207,632				17,705,280
Weighted average number of common shares outstanding - Diluted			17,137,065				17,889,089				17,455,265				17,828,710
Cash dividends per share		$	0.19			$	0.36			$	0.58			$	6.10

 

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STURM, RUGER & COMPANY, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

 

		Nine Months Ended
		September 28, 2024				September 30, 2023
Operating Activities
Net income		$	20,086			$	37,966
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			16,941				19,576
Stock-based compensation			3,247				2,968
Excess and obsolescence inventory reserve			39				—
Gain on sale of assets			—				(4	)
Deferred income taxes			(2,942	)			(4,058	)
Changes in operating assets and liabilities:
Trade receivables			(293	)			5,550
Inventories			3,735				(14,278	)
Trade accounts payable and accrued expenses			(514	)			(5,967	)
Contract liability with customers			(149	)			405
Employee compensation and benefits			(7,360	)			(8,129	)
Product liability			(349	)			144
Prepaid expenses, other assets and other liabilities			3,042				(15,704	)
Income taxes payable			—				(1,171	)
Cash provided by operating activities			35,483				17,298
Investing Activities
Property, plant and equipment additions			(17,196	)			(11,637	)
Proceeds from sale of assets			—				5
Purchases of short-term investments			(100,993	)			(141,410	)
Proceeds from maturities of short-term investments			115,023				194,091
Cash (used for) provided by investing activities			(3,166	)			41,049
Financing Activities
Remittance of taxes withheld from employees related to share-based compensation			(624	)			(2,156	)
Repurchase of common stock			(29,355	)			—
Dividends paid			(9,990	)			(107,805	)
Cash used for financing activities			(39,969	)			(109,961	)
Decrease in cash and cash equivalents			(7,652	)			(51,614	)
Cash and cash equivalents at beginning of period			15,174				65,173
Cash and cash equivalents at end of period		$	7,522			$	13,559

 

 

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Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding its financial results, the Company refers to various United States generally accepted accounting principles (“GAAP”) financial measures and two non-GAAP financial measures, EBITDA and EBITDA margin, which management believes provides useful information to investors. These non-GAAP financial measures may not be comparable to similarly titled financial measures being disclosed by other companies. In addition, the Company believes that the non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures. The Company believes that EBITDA and EBITDA margin are useful to understanding its operating results and the ongoing performance of its underlying business, as EBITDA provides information on the Company’s ability to meet its capital expenditure and working capital requirements, and is also an indicator of profitability. The Company believes that this reporting provides better transparency and comparability to its operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate the Company’s financial performance.

 

EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. The Company calculates this by adding the amount of interest expense, income tax expense, and depreciation and amortization expenses that have been deducted from net income back into net income, and subtracting the amount of interest income that was included in net income from net income to arrive at EBITDA. The Company calculates EBITDA margin by dividing EBITDA by total net sales.

 

Non-GAAP Reconciliation – EBITDA

EBITDA

(Unaudited, dollars in thousands)

		Three Months Ended								Nine Months Ended
		September 28, 2024				September 30, 2023				September 28, 2024				September 30, 2023
Net income		$	4,738			$	7,431			$	20,086			$	37,966
Income tax expense			527				658				4,681				8,848
Depreciation and amortization expense			5,804				6,530				16,941				19,576
Interest income			(1,155	)			(1,454	)			(3,839	)			(4,147	)
Interest expense			24				122				66				177
EBITDA		$	9,938			$	13,287			$	37,935			$	62,420
EBITDA margin			8.1%				11.0%				9.7%				15.1%
Net income margin			3.9%				6.1%				5.2%				9.2%

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Cover	Oct. 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 30, 2024
Entity File Number	001-10435
Entity Registrant Name	STURM, RUGER & COMPANY, INC.
Entity Central Index Key	0000095029
Entity Tax Identification Number	06-0633559
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	One Lacey Place
Entity Address, City or Town	Southport
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06890
City Area Code	(203)
Local Phone Number	259-7843
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	RGR
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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