EXHIBIT 99.1
 | STURM, RUGER & CO., INC. SOUTHPORT, CONNECTICUT 06890 U.S.A. |
FOR IMMEDIATE RELEASE
STURM, RUGER & COMPANY, INC. REPORTS SECOND QUARTER
EARNINGS OF 43¢ PER SHARE AND DECLARES DIVIDEND OF 10¢ PER SHARE
SOUTHPORT, CONNECTICUT, July 28, 2010--Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for the second quarter of 2010, the Company reported net sales of $64.4 million and earnings per share of 43¢, compared with sales of $72.4 million and earnings per share of 46¢ in the second quarter of 2009.
For the six months ended July 3, 2010, net sales were $132.7 million and earnings were 86¢ per share. For the corresponding period in 2009, net sales were $135.9 million and earnings were 76¢ per share.
The Company also announced today that its Board of Directors declared a dividend of 10.0¢ per share for the second quarter, for shareholders of record as of August 13, 2010, payable on August 27, 2010. The amount of the dividend was based on a percentage of Operating Profit after adjustment for certain items, the same approach used by the Company since 2009. Under this approach, the amount of the quarterly dividend fluctuates directly with certain operating results of the Company.
Chief Executive Officer Michael O. Fifer made the following comments related to the Company’s results of 2010:
| · | New product introductions remain a strong driver of demand and represented $42 million, or 32% of sales, in the first six months of 2010. |
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| · | The estimated sell-through of the Company’s products from distributors to retailers in the first half of 2010 increased 1% from the first half of 2009, despite a reduction in National Instant Criminal Background Check System (NICS) background checks of 2% during this period. |
| · | Cash generated from operations during the first half of 2010 was $17.8 million. At the end of the second quarter of 2010, our cash and equivalents totaled $58.7 million. Our current ratio is 4.0 to 1 and we have no debt. |
| · | During the first half of 2010, capital expenditures totaled $12.6 million, much of it related to tooling and equipment for new products. We expect to invest approximately $18 to $20 million for capital expenditures during 2010. |
| · | At the end of the second quarter of 2010, stockholders’ equity was $109 million, which equates to a book value of $5.68 per share, of which $3.05 per share was cash and equivalents. |
| · | For the third consecutive year, a Ruger handgun has been named the Shooting Industry Academy of Excellence "Handgun of the Year". The Ruger SR9c is the compact version of the SR9 striker-fired pistol, one of the slimmest and most ergonomic 9mm pistols on the market today. |
The Company filed its Quarterly Report on Form 10-Q for the second quarter of 2010. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.
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.
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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 including lawsuits filed by mayors, attorneys general and other governmental entities and membership organizations, 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 the se 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.
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STURM, RUGER & COMPANY, INC.
Condensed Balance Sheets (Unaudited)
(Dollars in thousands, except share data)
| July 3, 2010 | December 31, 2009 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 5,707 | $ | 5,008 | ||||
| Short-term investments | 52,982 | 50,741 | ||||||
| Trade receivables, net | 22,383 | 25,049 | ||||||
Gross inventories | 49,438 | 51,048 | ||||||
| Less LIFO reserve | (38,150 | ) | (38,663 | ) | ||||
| Less excess and obsolescence reserve | (2,377 | ) | (2,727 | ) | ||||
| Net inventories | 8,911 | 9,658 | ||||||
| Deferred income taxes | 4,536 | 5,893 | ||||||
| Prepaid expenses and other current assets | 1,395 | 2,062 | ||||||
| Total current assets | 95,914 | 98,411 | ||||||
| Property, plant and equipment | 145,377 | 134,057 | ||||||
| Less allowances for depreciation | (104,491 | ) | (101,324 | ) | ||||
| Net property, plant and equipment | 40,886 | 32,733 | ||||||
Deferred income taxes | 5,627 | 6,190 | ||||||
| Other assets | 3,702 | 4,345 | ||||||
| Total Assets | $ | 146,129 | $ | 141,679 | ||||
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| STURM, RUGER & COMPANY, INC. |
| July 3, 2010 | December 31, 2009 | |||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Trade accounts payable and accrued expenses | $ | 9,018 | $ | 12,011 | ||||
| Product liability | 424 | 1,147 | ||||||
| Employee compensation and benefits | 8,556 | 12,890 | ||||||
| Workers’ compensation | 5,489 | 5,443 | ||||||
| Income taxes payable | 384 | 1,543 | ||||||
| Total current liabilities | 23,871 | 33,034 | ||||||
| Accrued pension liability | 12,180 | 12,194 | ||||||
| Product liability accrual | 762 | 935 | ||||||
| Contingent liabilities – Note 9 | -- | -- | ||||||
| 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 2010 – 22,988,318 issued, 19,234,497 outstanding 2009 – 22,826,601 issued, 19,072,780 outstanding | 22,988 | 22,827 | ||||||
| Additional paid-in capital | 8,109 | 8,031 | ||||||
| Retained earnings | 128,748 | 115,187 | ||||||
Less: Treasury stock – at cost 2010 and 2009 – 3,753,821 shares | (30,167 | ) | (30,167 | ) | ||||
| Accumulated other comprehensive loss | (20,362 | ) | (20,362 | ) | ||||
| Total Stockholders’ Equity | 109,316 | 95,516 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 146,129 | $ | 141,679 | ||||
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STURM, RUGER & COMPANY, INC.
| Condensed Statements of Income (Unaudited) |
| (Dollars in thousands, except per share data) |
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2010 | July 4, 2009 | July 3, 2010 | July 4, 2009 | |||||||||||||
| Net firearms sales | $ | 63,621 | $ | 71,372 | $ | 130,891 | $ | 133,600 | ||||||||
| Net castings sales | 768 | 1,018 | 1,775 | 2,320 | ||||||||||||
| Total net sales | 64,389 | 72,390 | 132,666 | 135,920 | ||||||||||||
| Cost of products sold | 42,649 | 47,358 | 87,794 | 91,362 | ||||||||||||
| Gross profit | 21,740 | 25,032 | 44,872 | 44,558 | ||||||||||||
| Expenses: | ||||||||||||||||
| Selling | 5,118 | 5,319 | 11,017 | 10,764 | ||||||||||||
| General and administrative | 3,984 | 5,563 | 7,919 | �� | 9,709 | |||||||||||
| Other operating expenses, net | - | 175 | 398 | 675 | ||||||||||||
| Total operating expenses | 9,102 | 11,057 | 19,334 | 21,148 | ||||||||||||
| Operating income | 12,638 | 13,975 | 25,538 | 23,410 | ||||||||||||
| Other income: | ||||||||||||||||
| Interest (expense) income, net | (24 | ) | 39 | (57 | ) | (40 | ) | |||||||||
| Other income (expense), net | 174 | (14 | ) | 301 | (4 | ) | ||||||||||
| Total other income (expense), net | 150 | 25 | 244 | (44 | ) | |||||||||||
| Income before income taxes | 12,788 | 14,000 | 25,782 | 23,366 | ||||||||||||
| Income taxes | 4,604 | 5,320 | 9,281 | 8,879 | ||||||||||||
| Net income | $ | 8,184 | $ | 8,680 | $ | 16,501 | $ | 14,487 | ||||||||
| Earnings per share | ||||||||||||||||
| Basic | $ | 0.43 | $ | 0.46 | $ | 0.86 | $ | 0.76 | ||||||||
| Diluted | $ | 0.42 | $ | 0.45 | $ | 0.85 | $ | 0.76 | ||||||||
| Average shares outstanding | ||||||||||||||||
| Basic | 19,196 | 19,059 | 19,141 | 19,052 | ||||||||||||
| Diluted | 19,504 | 19,272 | 19,333 | 19,110 | ||||||||||||
| Cash dividends per share | $ | 0.093 | $ | 0.086 | $ | 0.153 | $ | 0.086 | ||||||||
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| STURM, RUGER & COMPANY, INC. |
| Condensed Statements of Cash Flows (Unaudited) |
| (Dollars in thousands) |
| Six Months Ended | ||||||||
| July 3, 2010 | July 4, 2009 | |||||||
| Operating Activities | ||||||||
| Net income | $ | 16,501 | $ | 14,487 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
| Depreciation | 4,419 | 3,325 | ||||||
| Slow moving inventory valuation adjustment | (314 | ) | (302 | ) | ||||
| Stock-based compensation | 908 | 2,950 | ||||||
| Loss on sale of assets | 10 | - | ||||||
| Deferred income taxes | 553 | (380 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | 2,666 | (1,725 | ) | |||||
| Inventories | 1,061 | 6,176 | ||||||
| Trade accounts payable and accrued expenses | (2,946 | ) | (797 | ) | ||||
| Employee compensation | (4,334 | ) | 2,269 | |||||
| Product liability | (896 | ) | (68 | ) | ||||
| Prepaid expenses, other assets and other liabilities | 1,296 | (769 | ) | |||||
| Income taxes payable | (1,160 | ) | (1,715 | ) | ||||
| Cash provided by operating activities | 17,764 | 23,451 | ||||||
| Investing Activities | ||||||||
| Property, plant and equipment additions | (12,598 | ) | (6,829 | ) | ||||
| Proceeds from sale of assets | 16 | - | ||||||
| Purchases of short-term investments | (76,977 | ) | (48,708 | ) | ||||
| Proceeds from maturities of short-term investments | 74,736 | 27,564 | ||||||
| Cash used for investing activities | (14,823 | ) | (27,973 | ) | ||||
| Financing Activities | ||||||||
| Tax benefit from exercise of stock options | 698 | 1,378 | ||||||
| Repayment of line of credit balance | - | (1,000 | ) | |||||
| Repurchase of common stock | - | (14 | ) | |||||
| Dividends paid | (2,940 | ) | (1,640 | ) | ||||
| Cash used for financing activities | (2,242 | ) | (1,276 | ) | ||||
| Increase (decrease) in cash and cash equivalents | 699 | (5,798 | ) | |||||
| Cash and cash equivalents at beginning of period | 5,008 | 9,688 | ||||||
| Cash and cash equivalents at end of period | $ | 5,707 | $ | 3,890 | ||||
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