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Sturm, Ruger & Company, Inc. Reports 2012 Fully Diluted Earnings Of $3.60 Per Share And Declares Dividend Of 40.4¢ Per Share

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  




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