Sturm, Ruger & Company's earnings for the 2020 third quarter were $1.39 per share based on net sales of $145.7 million compared to net sales of $95 million and earnings of 27 cents per share in 2019.
Ruger announced the third quarter earnings Wednesday.
In a statement, Chief Executive Officer Christopher J. Killoy said, “Consumer demand showed no signs of letting up during the quarter as concerns about personal protection and home defense were stoked by civil unrest in some cities around the United States, the call, by some, for the reduction in funding and authority of law enforcement organizations, and the continuing COVID-19 pandemic. As a result of this unprecedented demand, inventories remained significantly reduced at all levels in the channel during the third quarter.”
For the nine months ended September 26, 2020, net sales were $399.6 million and diluted earnings were $3.31 per share. For the corresponding period in 2019, net sales were $305.4 million and diluted earnings were $1.37 per share.
The Company also announced that its Board of Directors declared a dividend of 56¢ per share for the third quarter for stockholders of record as of November 13, 2020, payable on November 27, 2020. 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.
Purchase of Marlin
Killoy provided an update on the Company’s recently announced approval to purchase substantially all of the Marlin firearms assets for $30 million.
“We are excited to broaden our catalog of rugged, reliable, and exciting products with the addition of Marlin rifles, and the new product lines will be well-supported in our existing facilities," Killoy said. "Customer response to our purchase has been overwhelmingly positive, reinforcing our assertion that the Marlin lineup is an excellent fit for Ruger. We anticipate closing on this purchase in the fourth quarter of 2020 and look forward to re-introducing shooters to Marlin rifles in the second half of 2021.”
Killoy made the following observations related to Ruger’s third quarter 2020 performance:
- The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 50% in the first nine months of 2020 compared to the prior year period. For the same period, the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 68%. These substantial increases are attributable to increased consumer demand for firearms in the first nine months of 2020, and have likely been constrained due to limited available inventory in the distribution channel.
- Sales of new products, including the Wrangler, the Ruger-57, the LCP II in .22 LR, the PC Charger, and the AR-556 pistol, represented $87.9 million or 24% of firearm sales in the first nine months of 2020. New product sales include only major new products that were introduced in the past two years.
- During the third quarter of 2020, the Company’s finished goods inventory remained near historic lows. Distributor inventories of the Company’s products decreased 26,700 units, or 31% during the quarter.
- Cash provided by operations during the first nine months of 2020 was $82.0 million. At September 26, 2020, our cash and short-term investments totaled $133.6 million. Our current ratio is 3.2 to 1 and we have no debt.
- In the first nine months of 2020, capital expenditures totaled $8.0 million. We expect our 2020 capital expenditures to total approximately $20 million, most of which relate to new product introductions.
- In the first nine months of 2020, the Company returned $104.1 million to its shareholders through the payment of dividends, reflecting the customary quarterly dividends and a special dividend of $5.00 per share that was paid in August.
- At September 26, 2020, stockholders’ equity was $241.3 million, which equates to a book value of $13.79 per share, of which $7.64 per share was cash and short-term investments.
