Sturm, Ruger & Company, Inc. Reports 2023 Diluted Earnings of $2.71 Per Share and Declares Dividend of 23¢ Per Share

Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for 2023 the Company reported net sales of $543.8 million and diluted earnings of $2.71 per share, compared with net sales of $595.8 million and diluted earnings of $4.96 per share in 2022.

For the fourth quarter of 2023, net sales were $130.6 million and diluted earnings were 58¢ per share. For the corresponding period in 2022, net sales were $149.2 million and diluted earnings were $1.06 per share.

The Company also announced today that its Board of Directors declared a dividend of 23¢ per share for the fourth quarter for stockholders of record as of March 15, 2024, payable on March 28, 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 financial results for the year, “Consumer demand remained soft in 2023, likely dampened by inflationary pressures and rising interest rates, leading to a 9% reduction in sales from the prior year. Nevertheless, we remained disciplined and continued to focus on the long-term – reducing production levels where appropriate and offering only modest promotions on select product families, resisting the temptation to enhance short-term results at the expense of our long-term strategy. Encouraged by our increased quarterly sales and profitability in the fourth quarter, we enter 2024 with a strong, debt-free balance sheet, reduced inventories at our independent distributors, and a full pipeline of new products recently launched into the market and others still under development.”

Mr. Killoy continued, “We are celebrating Ruger’s 75th Anniversary in 2024. To honor our proud heritage, we are offering commemorative firearms that will only be available this year, all of which are engraved with our 75th Anniversary logo:

• A special tribute to Bill Ruger’s first pistol, which launched the Company in 1949, a Mark IV target pistol, featuring a fully adjustable rear sight, an undercut Patridge front sight, and a heavy, tapered barrel,
• A pair of 10/22 Sporter rimfire carbines, each featuring a stainless steel barrel, silver-finished receiver, polished bolt, and match-sanded butt pad, and
• An LCP MAX double-stack, ten-round pistol, featuring a stainless steel slide and a silver-anodized aluminum trigger.

Also, several special, limited production, editions of other products will be released throughout the year. The first of these is the Diamond Anniversary Limited Edition 1911 Pistol, which features an attractive, finely detailed, laser-engraved slide.”

Mr. Killoy remarked, “In addition to these 75th Anniversary models, we have recently introduced several new products that have been met with strong demand and excitement:

• Ruger American Rifle Generation II, our first update to the American Rifle, which has been tremendously popular since its introduction in 2012. The Generation II models feature a three-position tang safety, a more ergonomic stock, and a spiral fluted barrel.
• The 60th Anniversary 10/22 Carbine, the Sixth Edition of the Ruger Collector's Series, features a stainless steel barrel and silver-finished receiver paired with a Gray Magpul Hunter X-22 stock, a blackened bolt laser engraved with a unique 60th Anniversary marking, and a red bolt handle and trigger,
• The Mini-14 with side-folding stock, reminiscent of classic side-folding Mini-14 rifles originally produced in the late-1970s, and
• The LC Carbine chambered in .45 Auto featuring a threaded barrel, adjustable folding stock, Ruger Rapid Deploy folding sights, and ambidextrous controls.”

Mr. Killoy made the following observations related to the Company’s 2023 performance:

• The estimated unit sell-through of the Company’s products from the independent distributors to retailers decreased 7% in 2023 compared to the prior year period. For the same period, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 4%. The greater reduction in the sell-through of the Company’s products relative to adjusted NICS background checks may be attributable to aggressive promotions, discounts, rebates, and the extension of payment terms offered by our competitors.
• Sales of new products, including the MAX-9 pistol, Security-380 pistol, Super Wrangler revolver, LCP MAX pistol, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle Generation II represented $121.7 million or 23% of firearm sales in 2023, an increase from $78.4 million or 14% of sales in 2022. New product sales include only major new products that were introduced in the past two years.
• Our profitability declined in 2023 from 2022 as our gross margin decreased from 30% to 25%. The lower margin was driven by unfavorable deleveraging of fixed costs resulting from decreased production and sales, inflationary cost increases in materials, commodities, services, wages, energy, fuel, and transportation, a product mix shift toward products with relatively lower margins that remain in stronger demand, and increased promotional costs, which were partially offset by increased pricing.
• In 2023, the Company’s finished goods inventory increased 30,700 units and distributor inventories of the Company’s products decreased 39,100 units.
• Cash provided by operations during 2023 was $33.9 million. At December 31, 2023, our cash and short-term investments totaled $117.7 million. Our current ratio is 4.3 to 1 and we have no debt.
• In 2023, capital expenditures totaled $15.8 million related to new product introductions and upgrades to our manufacturing equipment and facilities. In 2024, the Company expects capital expenditures to approximate $15 million.
• In 2023, the Company returned $122.6 million to its shareholders through:
  • the payment of $110.8 million of dividends, including a $5.00 per share special dividend paid in January 2023, and
  • the repurchase of 264,062 shares of its common stock in the open market at an average price of $44.71 per share, for a total of $11.8 million.
• At December 31, 2023, stockholders’ equity was $331.7 million, which equates to a book value of $19.00 per share, of which $6.74 per share was cash and short-term investments.

Today, the Company filed its Annual Report on Form 10-K for 2023. The financial statements included in this Annual Report on Form 10-K are attached to this press release.

On Thursday, February 22, 2024, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the fourth quarter and year-end 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 Annual Report on Form 10-K for 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 Annual Report on Form 10-K 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.

STURM, RUGER & COMPANY, INC.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

December 31,

 

2023

 

 

 

 

2022

 

 

 

 

Assets

 

 

Current Assets

 

 

Cash and cash equivalents

$

15,174

 

$

65,173

 

Short-term investments

 

102,485

 

 

159,132

 

Trade receivables, net

 

59,864

 

 

65,449

 

 

 

 

Gross inventories

 

150,192

 

 

129,294

 

Less LIFO reserve

 

(64,262

)

 

(59,489

)

Less excess and obsolescence reserve

 

(6,120

)

 

(4,812

)

Net inventories

 

79,810

 

 

64,993

 

 

 

 

Prepaid expenses and other current assets

 

14,062

 

 

7,091

 

Total Current Assets

 

271,395

 

 

361,838

 

 

 

 

Property, plant and equipment

 

462,397

 

 

447,126

 

Less allowances for depreciation

 

(390,863

)

 

(370,273

)

Net property, plant and equipment

 

71,534

 

 

76,853

 

 

 

 

Deferred income taxes

 

11,976

 

 

6,109

 

Other assets

 

43,912

 

 

39,963

 

Total Assets

$

398,817

 

$

484,763

 

STURM, RUGER & COMPANY, INC.

Consolidated Balance Sheets (Continued)

(Dollars in thousands, except per share data)

December 31,

 

2023

 

 

2022

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

Current Liabilities

 

 

Trade accounts payable and accrued expenses

$

31,708

 

$

35,658

 

Dividends payable

 

-

 

 

88,343

 

Contract liabilities with customers

 

149

 

 

1,031

 

Product liability

 

634

 

 

235

 

Employee compensation and benefits

 

24,660

 

 

30,160

 

Workers’ compensation

 

6,044

 

 

6,469

 

Income taxes payable

 

-

 

 

1,171

 

Total Current Liabilities

 

63,195

 

 

163,067

 

 

 

 

Lease liability

 

2,170

 

 

3,039

 

Employee compensation

 

1,685

 

 

1,846

 

Product liability accrual

 

46

 

 

73

 

 

 

 

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

 

 

 

 

 

 

2023 – 24,437,020 issued,

 

 

 

 

 

 

17,458,620 outstanding

 

 

 

 

 

 

2022 – 24,378,568 issued,

 

 

 

 

 

 

17,664,230 outstanding

 

24,437

 

 

24,378

 

Additional paid-in capital

 

46,849

 

 

45,075

 

Retained earnings

 

418,058

 

 

393,097

 

Less: Treasury stock – at cost

 

 

 

 

 

 

2023 – 6,978,400 shares

 

 

 

 

 

 

2022 – 6,714,338 shares

 

(157,623

)

 

(145,812

)

Total Stockholders’ Equity

 

331,721

 

 

316,738

 

Total Liabilities and Stockholders’ Equity

$

398,817

 

$

484,763

 

STURM, RUGER & COMPANY, INC.

Consolidated Statements of Income and Comprehensive Income

(In thousands, except per share data)

Year ended December 31,

 

2023

 

 

2022

 

 

2021

 

 

 

 

 

Net firearms sales

$

540,746

 

$

593,289

 

$

728,141

 

Net castings sales

 

3,021

 

 

2,553

 

 

2,595

 

Total net sales

 

543,767

 

 

595,842

 

 

730,736

 

 

 

 

 

Cost of products sold

 

410,148

 

 

415,757

 

 

451,179

 

 

 

 

 

Gross profit

 

133,619

 

 

180,085

 

 

279,557

 

 

 

 

 

Operating Expenses (Incomes):

 

 

 

Selling

 

38,788

 

 

36,114

 

 

33,259

 

General and administrative

 

42,752

 

 

40,551

 

 

43,289

 

Other operating income, net

 

(5

)

 

(36

)

 

(127

)

Total operating expenses

 

81,535

 

 

76,629

 

 

76,421

 

 

 

 

 

Operating income

 

52,084

 

 

103,456

 

 

203,136

 

 

 

 

 

Other income:

 

 

 

Royalty income

 

658

 

 

837

 

 

1,975

 

Interest income

 

5,465

 

 

2,552

 

 

49

 

Interest expense

 

(205

)

 

(256

)

 

(164

)

Other income, net

 

822

 

 

1,690

 

 

1,598

 

Total other income, net

 

6,740

 

 

4,823

 

 

3,458

 

 

 

 

 

Income before income taxes

 

58,824

 

 

108,279

 

 

206,594

 

 

 

 

 

Income taxes

 

10,609

 

 

19,947

 

 

50,695

 

 

 

 

 

Net income and comprehensive income

$

48,215

 

$

88,332

 

$

155,899

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

$

2.73

 

$

5.00

 

$

8.87

 

 

 

 

 

Diluted Earnings Per Share

$

2.71

 

$

4.96

 

$

8.78

 

 

 

 

 

Weighted average number of common shares outstanding – Basic

17,676,955

17,648,850

17,585,604

 

 

 

 

Weighted average number of common shares outstanding – Diluted

17,811,218

17,793,348

17,757,834

 

 

 

 

Cash Dividends Per Share

$

6.27

 

$

2.42

 

$

3.36

STURM, RUGER & COMPANY, INC.

Consolidated Statements of Cash Flows

(In thousands)

Year ended December 31,

 

2023

 

 

2022

 

 

2021

 

 

 

 

 

Operating Activities

 

 

 

Net income

$

48,215

 

$

88,332

 

$

155,899

 

Adjustments to reconcile net income to cash provided by operating activities, net of effects of acquisition:

 

 

 

Depreciation and amortization

 

22,383

 

 

25,789

 

 

26,152

 

Stock-based compensation

 

3,989

 

 

1,671

 

 

8,280

 

Excess and obsolescence inventory reserve

 

1,308

 

 

501

 

 

953

 

Gain on sale of assets

 

(5

)

 

(36

)

 

(127

)

Deferred income taxes

 

(5,867

)

 

(5,573

)

 

994

 

Changes in operating assets and liabilities:

 

 

 

Trade receivables

 

5,585

 

 

(8,413

)

 

840

 

Inventories

 

(16,125

)

 

(21,644

)

 

(15,726

)

Trade accounts payable and accrued expenses

 

(4,406

)

 

(640

)

 

(392

)

Contract liability with customers

 

(882

)

 

1,031

 

 

(84

)

Employee compensation and benefits

 

(6,469

)

 

(3,420

)

 

(5,433

)

Product liability

 

372

 

 

(584

)

 

(234

)

Prepaid expenses, other assets and other liabilities

 

(13,026

)

 

(954

)

 

1,217

 

Income taxes receivable/payable

 

(1,171

)

 

1,171

 

 

-

 

Cash provided by operating activities

 

33,901

 

 

77,231

 

 

172,339

 

 

 

 

 

Investing Activities

 

 

 

Property, plant and equipment additions

 

(15,796

)

 

(27,730

)

 

(28,776

)

Purchases of short-term investments

 

(192,627

)

 

(365,480

)

 

(681,940

)

Proceeds from maturity of short-term investments

 

249,274

 

 

406,319

 

 

602,976

 

Net proceeds from sale of assets

 

5

 

 

100

 

 

203

 

Cash provided by (used for) investing activities

 

40,856

 

 

13,209

 

 

(107,537

)

 

 

 

 

Financing Activities

 

 

 

Dividends paid

 

(110,789

)

 

(42,718

)

 

(59,104

)

Repurchase of common stock

 

(11,811

)

 

(222

)

 

-

 

Payment of employee withholding tax related to share-based compensation

(2,156

)

(3,371

)

(4,801

)

Cash used for financing activities

 

(124,756

)

 

(46,311

)

 

(63,905

)

 

 

 

 

(Decrease) increase in cash and cash equivalents

 

(49,999

)

 

44,129

 

 

897

 

Cash and cash equivalents at beginning of year

 

65,173

 

 

21,044

 

 

20,147

 

Cash and cash equivalents at end of year

$

15,174

 

$

65,173

 

$

21,044

Non-GAAP Financial Measure

In an effort to provide investors with additional information regarding its 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 measures may not be comparable to similarly titled 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 its financial performance.

Non-GAAP Reconciliation – EBITDA

EBITDA

(Unaudited, dollars in thousands)

Year ended December 31,

 

2023

 

 

2022

 

 

 

 

Net income

$

48,215

 

$

88,332

 

 

 

 

Income tax expense

 

10,609

 

 

19,947

 

Depreciation and amortization expense

 

22,383

 

 

25,789

 

Interest expense

 

205

 

 

256

 

Interest income

 

(5,465

)

 

(2,552

)

EBITDA

$

75,947

 

$

131,772

 

EBITDA margin

 

14.0

%

 

22.1

%

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’s EBITDA calculation also excludes any one-time non-cash, non-operating expense.

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Sturm, Ruger & Company, Inc. One Lacey Place Southport, CT 06890 www.ruger.com 203-259-7843