Sturm, Ruger & Company, Inc. Reports 2015 Fully Diluted Earnings of $3.21 Per Share and Declares Dividend of 35¢ Per Share
SOUTHPORT, Conn.–(BUSINESS WIRE)–Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for 2015
the Company reported net sales of $551.1 million and fully diluted
earnings of $3.21 per share, compared with net sales of $544.5 million
and fully diluted earnings of $1.95 per share in 2014. In the fourth
quarter of 2014, the Company recorded an expense of $41.0 million
related to the termination and settlement of its defined-benefit pension
plans. Excluding this expense, 2014 fully diluted earnings were $3.22
per share.
For the fourth quarter of 2015, net sales were $152.4 million and fully
diluted earnings were 88¢ per share. For the corresponding period in
2014, net sales were $122.6 million and the Company realized a fully
diluted loss of 77¢ per share. Excluding the aforementioned
defined-benefit pension-plan expense, fourth quarter 2014 fully diluted
earnings were 53¢ per share.
The Company also announced today that its Board of Directors declared a
dividend of 35¢ per share for the fourth quarter, for shareholders of
record as of March 11, 2016, payable on March 25, 2016. 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 Michael O. Fifer made the following observations
related to the Company’s results:
-
After a year of declining demand in 2014, demand rebounded in 2015 to
slightly higher levels and followed typical historical seasonal
patterns. -
Inventory of Ruger products declined in the fourth quarter at both the
Company and at the independent distributors, supporting our assessment
of improving demand. -
In 2015, sales to the independent distributors and the estimated
sell-through of the Company’s products from the independent
distributors to retailers increased 1% and 7%, respectively, from
2014. The National Instant Criminal Background Check System (“NICS”)
background checks (as adjusted by the National Shooting Sports
Foundation) increased 9% in 2015 from 2014. -
New products represented $115.4 million or 21% of firearm sales in
2015, compared to $89.4 million or 16% of firearms sales in 2014. -
Cash generated from operations during 2015 was $113 million. At
December 31, 2015, our cash totaled $69 million. Our current ratio is
2.3 to 1 and we have no debt. -
In 2015, capital expenditures totaled $29 million, a decrease from $46
million in 2014. We expect our 2016 capital expenditures to total
approximately $25 million, as we continue to prioritize new product
development. - In 2015, the Company returned $24 million to its shareholders through:
- the payment of $21 million of dividends, and
-
the repurchase of 82,100 shares of our common stock in the open market
at an average price of $34.57 per share, for a total of $3 million.
Today, the Company filed its Annual Report on Form 10-K for 2015. The
financial statements included in this Annual Report on Form 10-K are
attached to this press release.
Tomorrow, February 25, 2016, Sturm, Ruger will host a webcast at 9:00
a.m. ET to discuss the 2015 operating results. Interested parties can
access the webcast at www.ruger.com/corporate
or by dialing 866-515-2911, participant
code 25263783.
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 & Co., Inc. is one of the nation’s leading manufacturers of
rugged, reliable firearms for the commercial sporting market. The only
full-line manufacturer of American-made firearms, Ruger offers consumers
over 400 variations of more than 30 product lines. For more than 60
years, Ruger has been a model of corporate and community responsibility.
Our motto, “Arms Makers for Responsible Citizens,” echoes the importance
of 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) |
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|
December 31, |
2015 | 2014 | |||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 69,225 | $ | 8,901 | |||||||
| Trade receivables, net | 71,721 | 49,735 | |||||||||
| Gross inventories | 81,278 | 89,017 | |||||||||
| Less LIFO reserve | (42,061 | ) | (40,578 | ) | |||||||
| Less excess and obsolescence reserve | (2,118 | ) | (3,750 | ) | |||||||
| Net inventories | 37,099 | 44,689 | |||||||||
| Deferred income taxes | 8,219 | 7,246 | |||||||||
| Prepaid expenses and other current assets | 3,008 | 7,603 | |||||||||
| Total Current Assets | 189,272 | 118,174 | |||||||||
| Property, Plant, and Equipment | 308,597 | 288,236 | |||||||||
| Less allowances for depreciation | (204,777 | ) | (177,575 | ) | |||||||
| Net property, plant and equipment | 103,820 | 110,661 | |||||||||
| Other assets | 22,791 | 25,547 | |||||||||
| Total Assets | $ | 315,883 | $ | 254,382 | |||||||
| STURM, RUGER & COMPANY, INC. | |||||||||||
| Consolidated Balance Sheets (Continued) | |||||||||||
|
(Dollars in thousands, except per share data) |
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|
December 31, |
2015 | 2014 | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current Liabilities | |||||||||||
| Trade accounts payable and accrued expenses | $ | 42,991 | $ | 36,150 | |||||||
| Product liability | 642 | 641 | |||||||||
| Employee compensation and benefits | 28,298 | 18,302 | |||||||||
| Workers’ compensation | 5,100 | 5,133 | |||||||||
| Income taxes payable | 4,962 | 156 | |||||||||
| Total Current Liabilities | 81,993 | 60,382 | |||||||||
| Product liability | 102 | 204 | |||||||||
| Deferred income taxes | 6,050 | 8,334 | |||||||||
| 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 | |||||||||||
| 2015 – 23,775,766 issued, | |||||||||||
| 18,713,419 outstanding | |||||||||||
| 2014 – 23,717,321 issued, | |||||||||||
| 18,737,074 outstanding | 23,776 | 23,717 | |||||||||
| Additional paid-in capital | 29,591 | 25,472 | |||||||||
| Retained earnings | 239,098 | 198,159 | |||||||||
| Less: Treasury stock – at cost | |||||||||||
| 2015 – 5,062,347 shares | |||||||||||
| 2014 – 4,980,247 shares | (64,727 | ) | (61,886 | ) | |||||||
| Total Stockholders’ Equity | 227,738 | 185,462 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 315,883 | $ | 254,382 | |||||||
| STURM, RUGER & COMPANY, INC. | ||||||||||||||||
| Consolidated Statements of Income and Comprehensive Income | ||||||||||||||||
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(In thousands, except per share data) |
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|
Year ended December 31, |
2015 | 2014 | 2013 | |||||||||||||
| Net firearms sales | $ | 544,850 | $ | 542,267 | $ | 678,552 | ||||||||||
| Net castings sales | 6,244 | 2,207 | 9,724 | |||||||||||||
| Total net sales | 551,094 | 544,474 | 688,276 | |||||||||||||
| Cost of products sold | 378,934 | 375,300 | 429,671 | |||||||||||||
| Gross profit | 172,160 | 169,174 | 258,605 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Selling | 49,864 | 44,550 | 48,706 | |||||||||||||
| General and administrative | 27,864 | 28,899 | 35,394 | |||||||||||||
| Defined benefit pension plans settlement charge | – | 40,999 | – | |||||||||||||
| Other operating income, net | (113 | ) | (1,612 | ) | (401 | ) | ||||||||||
| Total operating expenses | 77,615 | 112,836 | 83,699 | |||||||||||||
| Operating income | 94,545 | 56,338 | 174,906 | |||||||||||||
| Other income: | ||||||||||||||||
| Royalty income | 1,084 | 468 | 658 | |||||||||||||
| Interest income | 5 | 2 | 4 | |||||||||||||
| Interest expense | (156 | ) | (152 | ) | (135 | ) | ||||||||||
| Other income (expense), net | 622 | 584 | (201 | ) | ||||||||||||
| Total other income, net | 1,555 | 902 | 326 | |||||||||||||
| Income before income taxes | 96,100 | 57,240 | 175,232 | |||||||||||||
| Income taxes | 33,974 | 18,612 | 63,960 | |||||||||||||
| Net income | 62,126 | 38,628 | 111,272 | |||||||||||||
| Other comprehensive income (loss), net of tax: | ||||||||||||||||
| Defined benefit pension plans | – | – | 10,240 | |||||||||||||
| Comprehensive income | $ | 62,126 | $ | 38,628 | $ | 121,512 | ||||||||||
| Basic Earnings Per Share | $ | 3.32 | $ | 1.99 | $ | 5.76 | ||||||||||
| Fully Diluted Earnings Per Share | $ | 3.21 | $ | 1.95 | $ | 5.58 | ||||||||||
| Cash Dividends Per Share | $ | 1.10 | $ | 1.62 | $ | 2.12 | ||||||||||
| STURM, RUGER & COMPANY, INC. | ||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||
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(In thousands) |
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Year ended December 31, |
2015 | 2014 | 2013 | |||||||||||
|
Operating Activities |
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| Net income | $ | 62,126 | $ | 38,628 | $ | 111,272 | ||||||||
| Adjustments to reconcile net income to cash | ||||||||||||||
| provided by operating activities: | ||||||||||||||
| Pension plan settlement charge | – | 32,218 | – | |||||||||||
| Depreciation and amortization | 36,235 | 36,706 | 20,362 | |||||||||||
| Stock-based compensation | 4,530 | 5,647 | 5,288 | |||||||||||
| Excess and obsolescence inventory reserve | (1,468 | ) | 1,347 | 693 | ||||||||||
| Loss (gain) on sale of assets | (113 | ) | (1 | ) | 1 | |||||||||
| Deferred income taxes | (3,257 | ) | (12,015 | ) | 5,736 | |||||||||
| Impairment of assets | – | 178 | 911 | |||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Trade receivables | (21,986 | ) | 17,649 | (24,366 | ) | |||||||||
| Inventories | 9,058 | (22,775 | ) | (7,945 | ) | |||||||||
| Trade accounts payable and accrued expenses | 6,808 | (11,047 | ) | 9,231 | ||||||||||
| Employee compensation and benefits | 9,378 | (17,435 | ) | 17,897 | ||||||||||
| Product liability | (101 | ) | (391 | ) | 179 | |||||||||
| Prepaid expenses, other assets and other liabilities | 6,553 | (13,075 | ) | (19,340 | ) | |||||||||
| Income taxes payable | 4,806 | (83 | ) | (250 | ) | |||||||||
| Cash provided by operating activities | 112,569 | 55,551 | 119,669 | |||||||||||
|
Investing Activities |
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| Property, plant, and equipment additions | (28,705 | ) | (45,571 | ) | (54,616 | ) | ||||||||
| Net proceeds from sale of assets | 222 | 24 | 233 | |||||||||||
| Cash used for investing activities | (28,483 | ) | (45,547 | ) | (54,383 | ) | ||||||||
| Financing Activities | ||||||||||||||
| Dividends paid | (20,569 | ) | (31,446 | ) | (41,079 | ) | ||||||||
| Tax benefit from exercise of stock options | 436 | 1,621 | 2,302 | |||||||||||
| Repurchase of common stock | (2,841 | ) | (24,002 | ) | – | |||||||||
| Payment of employee withholding tax related to share- | ||||||||||||||
| based compensation | (999 | ) | (2,363 | ) | (2,423 | ) | ||||||||
| Proceeds from exercise of stock options | 211 | 23 | – | |||||||||||
| Cash used for financing activities | (23,762 | ) | (56,167 | ) | (41,200 | ) | ||||||||
| Increase (decrease) in cash and cash equivalents | 60,324 | (46,163 | ) | 24,086 | ||||||||||
| Cash and cash equivalents at beginning of year | 8,901 | 55,064 | 30,978 | |||||||||||
| Cash and cash equivalents at end of year | $ | 69,225 | $ | 8,901 | $ | 55,064 | ||||||||
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 one
non-GAAP financial measure, EBITDA, which management believes provides
useful information to investors. This non-GAAP measure may not be
comparable to similarly titled measures being disclosed by other
companies. In addition, the Company believes that the non-GAAP financial
measure should be considered in addition to, and not in lieu of, GAAP
financial measures. The Company believes that EBITDA is 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.
| Non-GAAP Reconciliation – EBITDA | ||||||||||
|
EBITDA |
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|
(Unaudited, dollars in thousands) |
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| Year ended December 31, | 2015 | 2014 | ||||||||
| Net income | $ | 62,126 | $ | 38,628 | ||||||
| Income tax expense | 33,974 | 18,612 | ||||||||
| Depreciation and amortization expense | 36,235 | 36,706 | ||||||||
| Interest expense | 156 | 152 | ||||||||
| Interest income | (5 | ) | (2 | ) | ||||||
| Pension plan termination expense, net of cash payment | – | 32,218 | ||||||||
| EBITDA | $ | 132,486 | $ | 126,314 | ||||||
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, such as the pension plan termination expense in
2014.
Contacts
Sturm, Ruger & Company, Inc.
One Lacey Place
Southport, CT
06890
www.ruger.com
203-259-7843
