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Sturm, Ruger & Company, Inc. Reports Third Quarter 2012 Fully Diluted Earnings Of 88¢ Per Share

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.

STURM, RUGER & COMPANY, INC.

 

Condensed Balance Sheets (Unaudited) (Dollars in thousands, except share data)

 
 

September 29,2012

 

December 31,2011

 
 
Assets
 
Current Assets
Cash and cash equivalents $75,123 $ 81,056
Short-term investments 29,973 -
Trade receivables, net 47,474 42,225
 
Gross inventories 53,517 49,004
Less LIFO reserve (38,435) (37,476)
Less excess and obsolescence reserve (1,712) (1,311)
Net inventories 13,370 10,217
 
Deferred income taxes 4,851 5,776
Prepaid expenses and other current assets 1,725 6,968
Total Current Assets 172,516 146,242
 
Property, plant and equipment 189,137 169,142
Less allowances for depreciation (126,006) (116,195)
Net property, plant and equipment 63,131 52,947
 
Deferred income taxes 1,222 32
Other assets 10,916 7,289
Total Assets $247,785 $206,510

STURM, RUGER & COMPANY, INC.

 

Condensed Balance Sheets (Unaudited) (Continued) (Dollars in thousands, except share data)

 
 

September 29,2012

December 31,2011

 
 
Liabilities and Stockholders’ Equity
 
Current Liabilities
Trade accounts payable and accrued expenses $ 31,330 $ 28,592
Product liability 1,005 1,305
Employee compensation and benefits 16,591 14,882
Workers’ compensation 4,433 4,600
Income taxes payable 848 217
Total Current Liabilities 54,207 49,596
 
Accrued pension liability 19,142 19,082
Product liability accrual 389 441
 
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 – 23,459,506 issued,

  19,160,072 outstanding

2011 – 23,382,566 issued,

  19,083,132 outstanding

23,460 23,383
Additional paid-in capital 13,686 10,454
Retained earnings 202,328 168,981

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 174,047 137,391
Total Liabilities and Stockholders’ Equity $247,785 $206,510

STURM, RUGER & COMPANY, INC.

 

Condensed Statements of Income and Comprehensive Income (Unaudited) (Dollars in thousands, except per share data)

 
  Three Months Ended Nine Months Ended

September 29,2012

 

October 1,2011

 

September 29,2012

 

October 1,2011

 

 
 
Net firearms sales $116,270 $79,214 $345,203 $232,126
Net castings sales 1,882 1,298 4,854 3,449
Total net sales 118,152 80,512 350,057 235,575
 
Cost of products sold 75,587 51,385 220,565 153,989
         
Gross profit 42,565 29,127 129,492 81,586
 
Operating expenses:
Selling 7,891 6,581 27,998 19,961
General and administrative 7,437 5,659 21,543 15,218
Total operating expenses 15,328 12,240 49,541 35,179
 
Operating income 27,237 16,887 79,951 46,407
 
Other income:
Interest expense, net (18) (21) (62) (54)
Other income, net 319 177 813 466
Total other income, net 301 156 751 412
 
Income before income taxes 27,538 17,043 80,702 46,819
 
Income taxes 10,189 6,306 29,860 17,323
 
Net income and comprehensive income $17,349 $10,737 $50,842 $ 29,496
 
Basic earnings per share $0.91 $0.57 $2.66 $1.56
 
Fully diluted earnings per share $0.88 $0.56 $2.58 $1.55
 
Cash dividends per share $0.377 $0.142 $0.913 $0.289

STURM, RUGER & COMPANY, INC.

 

Condensed Statements of Cash Flows (Unaudited) (Dollars in thousands)

 
  Nine Months Ended

September 29,2012

 

 

October 1,2011

 

 
Operating Activities
Net income $50,842 $ 29,496
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation 10,151 8,792
Slow moving inventory valuation adjustment 446 (35)
Stock-based compensation 3,317 2,110
Gain on sale of assets (65) (82)
Deferred income taxes (265) 1,376
Changes in operating assets and liabilities:
Trade receivables (5,249) (1,856)
Inventories (3,599) 2,107
Trade accounts payable and accrued expenses 2,571 2,870
Employee compensation and benefits 1,709 1,007
Product liability (352) 454
Prepaid expenses, other assets and other liabilities 1,656 (4,419)
Income taxes payable 631 1,147
Cash provided by operating activities 61,793 42,967
 
Investing Activities
Property, plant and equipment additions (20,315) (12,209)
Proceeds from sale of assets 65 127
Purchases of short-term investments (59,966) (122,978)
Proceeds from maturities of short-term investments 29,993 149,473
Cash provided by (used for) investing activities (50,223) 14,413
 
Financing Activities
Tax benefit from exercise of stock options 1,038 3,087
Repurchase of common stock

Payment of employee withholding tax related to

share-based compensation

-

 

(1,045)

(1,999)

 

(4,782)

Dividends paid (17,496) (5,474)
Cash used for financing activities (17,503) (9,168)
 
(Decrease) Increase in cash and cash equivalents (5,933) 48,212
 
Cash and cash equivalents at beginning of period 81,056 5,132
     
Cash and cash equivalents at end of period $75,123 $ 53,344




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