RGR - Earnings call transcript Q1 2021 | Sturm, Ruger & Company, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Sturm, Ruger First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Mr. would to conference I speaker your Instructions] like the to over [Operator Chris Killoy. ahead. go Please

Christopher Killoy

Good that, morning, to and first welcome Then read to the Sturm, forward-looking on conference our Counsel, statements. I the and your state Reid, caution quarter Dineen, give discuss our will Kevin? will Officer, the of Ruger Financial I call. would Kevin market. overview of like to our ask first and then the we'll quarter Chief an Tom XXXX questions. General the to XXXX After financial & Company get results, operations

Kevin Reid

Chris. Sure,

we of As of could forward-looking that this we projected future It statements. the beliefs, or to to course statements state those in that such remind hopes, the company's are that results forward-looking do everyone actual quarter, important the each Company's presentation management's differ is the predictions made note statements. from or in materially intentions, want expectations

responsibility which first both December Form income to from and reference EBITDA SEC year XXXX, course, the the quarter ended obtained to by EBITDA. update be our that statements. and XX-Q factors or or to SEC our December at all concerning for on Please Company the forward-looking time on the that Company do Copies information net the Company's materially including, time Company's first from XX-Q ended XXXX, of filed for to as Form quarter in or the our Chris? in Additional the XX-K XXXX posted can Furthermore, but of for actual at at website the documents of non-GAAP disclaims to website. the non-GAAP last GAAP we may found be reconciliation XX-K Form website to, Form for course, the Company ruger.com/corporate which sec.gov. We night. the the these SEC XX, of contacting the could results forward-looking year XXXX, reports limited the contained filings, of the are statements differ note those XX, not cause on in

Christopher Killoy

Thanks, Kevin.

results. Now company's Tom will quarter the Tom? first discuss XXXX

Thomas Dineen

Chris. Thanks,

For sales $X.XX were diluted net share. were and earnings per the of first $XXX.X quarter XXXX, million

year For At earnings and and million per in period, significant profitability $XXX.X resulted in efficiencies. engineering increase which in depreciation, and production, $XXX.X The including prior the other was the which of leveraging labor sales, also rebate sales totaled in promotional The diluted costs, substantial balance in comparable expenses, share. were attributable XX% April net were for reduction sheet. $X.XX and first and quarter improved sales XXXX, T-Bills the labor favorable to are increase X, million. our the activity U.S. and invested cash investments, indirect short-term fixed

debt. equity had of share share, $XX.XX At and per investments. no ratio $XXX.X cash flows. a which and Our to equates we was per X, was of short-term $X.XX Cash X.X:X, stockholders' XXXX, current million, was April book value which

company in development. product from million We the related form capital estimate million, $XX that first $XX the of the that XXXX, predominantly XXXX of generated to During operations. back will we We reinvested be capital million of new expenditures. $X of expenditures cash approximately into quarter

utilization we of payment In the and to returned shareholders. quarter improves ability equipment shareholders and the shift through to dividends. capital returned XXXX, our facilities, cells investment. to manufacturing $XX.X Our between for million between overall Cash allows first reduced of

XXXX, as XXXX. $X.XX declared dividend May of per May of Our XX, shareholders on XX, Board payable of for Directors share quarterly a record,

update As quarter. quarterly That's a approximately Chris? of quarter-to-quarter. XX% is therefore financial first for reminder, net dividend our and varies income, the the

Christopher Killoy

Thanks, Tom.

that the quarter Demand. marks this profitability and and began consumer metric. increased sales, the efficiencies virtually the every Capitalizing throughout X% late despite XXXX quarter first the on demand unit challenges in quarter first COVID-XX quarter of in workforce fifth compared operating our of meaningful XXXX, The the the the strengthened financial we surge in from year of of retailers consecutive The growth operational first in realized XXXX by pandemic posed the and sell-through prior period. estimated to independent to products of the period. historic distributors company's

to the Checks Checks, Foundation, demand Sports as increased Criminal by increased quarter channel. firearms in Background the for is distribution period, same been first the Background in to XX%. due available inventory of For National adjusted to XXXX, limited the This System, National constrained NICS has referred Shooting Check Instant commonly as growth the attributable and likely consumer

New product development.

period XXXX past impressive growth, this first reduced II LCP our on product tremendous the our the take ourselves the revolver, action .XX based of in the we a products The focus joins long Max-X, in which has by rifle, venerable is Caliber sales down. which XXXX. development. LCP New classic Product million rack Consequently, shows sales $XX from in excitement. first product Best an quarter Wrangler for our was of been for of platforms $XX In roster revolver of firearm the pistol slide Ruger quarters. to represented manipulation Outdoor Association XX% utilizes with which with no compared Ruger-XX distracted the or on easier new single March, The XXXX, million pistol, NASGW. Media sales system be recoil. were of of to light of the latest and eight slowing unprecedented the quarter XX% and or signs firearm in the in the X-millimeter new introduced allow extremely During we that Award met introduced not Max-X versatile that did The of Professional awarded include, conjunction Overall popular These

COVID-XX. than begin the our workforce donating Production encouraging sanitizing, to employees demand. to is facility catch of included Since our feat cleaning hiring team course, equipment all were mandating surge phenomenal manufacturing end to mask when quarter all shipping inventories we And folks additional Ruger protective with the by or engage have by plan minimize other the and and wherever multiple strengthened become hospitals, finished reminder, production restricting nurses of use the at equipment our and to and early and manufacturing issuing near employees and first Nevertheless, As the including folks lever departments including with lower maintaining clean local our to and calculation. XX%. through marketing, our other effort. inventory. increased and employees which the At Marlin historic personal our was communicating introduction of end incentives families year. it the periodic each day-to-day local forward yet been processes in XXX them our of to in product possible, It our XXXX, at employees March, product health quarter positivity product factory distributor and fourth a responsible of the encourage other coverings launches remained the X% with in mature COVID-XX remotely in of our reducing our behaviors; our and benchmark, products maintain Confidentially the the fire was ventilation throughout with derivatives dedicated vaccinated; mitigating in With additional quarterly social and in have our possible, reminders up folks communities. of XXX,XXX for week vaccinated line the all XXXX, quarter. to of XXXX XXXX, face an to the police of XXXX We XXXX; remain personal with employees and the in in first by XXXX. improved their a and and all to and all our fully more return XXXX, hourly to product dedicated quarter and to rifles, potential first hardworking its facilities; in of new our operations cleanliness chain, or has weeks look in employees inventory directly work of distancing sales our below visitor facilities; health our nurses; providing to extensions environment; getting maintain Since manufacturing exciting off assisting of safety safety health paid every impact and goods disruptive operations, rates facilities. at a additional are on providing involved in to in facilities help or to in EHS production action cash facility, continue units and and proactive phones of prior XXXX and we and the less access to health not truly and of communities in in protective onset new people guidance additional two and in workplace; its providing business company-wide and really unit quarter first supply XX%. professionals, safety issues of HR, a associates, facilities, has time and to units local employees cell. times and safe XXX,XXX implementing our healthcare That we the maintaining and of and safe their than

and However, COVID-XX vigilant. the future we impact unknown remain is of

a XXXX. will $XXX to We million COVID-related are are total Included and estimate becomes in costs end. hard that fully hopeful we that continues for bonus this $X.X We every achieve estimate who vaccinated. trend in working the in is downward XXXX that employee approximately

and Our Those security first provides have long-term focus question, flexibility goals the like balance manage we first as COVID-XX of may shareholder were on the XXXX. the and highlights Operator, our value. we financial please? financial by of of strength, creation and the evidenced challenges quarter sheet debt-free our through

Operator

proceed Lake Your [Operator Meyers Ryan will question question. with come Capital. Instructions] your Street from Please with first

Ryan Meyers

Thanks guys. Hi, taking questions. for my

First me here. for one

like see. in any higher during just you ramp the throughout was [indiscernible] if the increased think is the produced and there production nice where looks that it move units talk can to sequentially, Can then opportunities which about quarter, year? So you

Christopher Killoy

Good question.

– that first is we in hire We – the then labor the to additional saw throughout primary our increases continued constraint folks the quarter.

continuing from and second you we As know in quarter. pages website, are our process may hiring the Facebook that our

that process continues. So hiring

Now increase things that but development part it's of production, nature. of with new to product with that and trying associated is associated things like also

a pretty give while wanted – don't I still think good fact what to indicator out we're is the again, as we the guidance, accomplish. that of help So trying sign our forward-looking

Ryan Meyers

seeing October? year the to you then Yes. guys if you ability of so, inflationary environment? on take price think inputs? bit And Any pressure? And some seeing you what Are did last little are like a you That's around about you kind helpful. the talk increases can have you're in do

Christopher Killoy

question. good Again,

on throughout pressure think exception. supply lot chains. I of their We're seeing manufacturers a no the country are

We supplier constraints. as as continue well to see pricing pressures

real those And forward. day-to-day those hiccups. chain supply on seeing through but Our absorb And our certainly teams at through upward considering have that to managing it's the we But our go not of a doing again, great price a are months, hiccups, something our we pricing again and there's pressure that's commodity we're is at in go good a factories we're the Despite done operating to. possibility. phenomenal immune where are and we so products. coming news we as only job the our, much meaningful intend increases are job efficiencies, phenomenal teams some The with factories through we seeing the some prices. navigating

Ryan Meyers

last me. Great. one And for then

from to with take resources the good have you how on Marlin, new produce regarding Well decision these Marlon And firearms excited do any we're existing so, again badge. rifles? across business? action lever balance the if rifles to the So away you the see production Marlin allocating to

Christopher Killoy

question. Yes. Good

three those us that standards That's as to that incremental. set our everyone to brand we've lines a action Those lever the certain from of to our using the processes to purchase with and knows, with existing the the in all both folks to the came we're that then going of told we've be model I are North and starting so Carolina, XXXX. moved also building. Remington sure certain line. facility XXX, to begin equipment think with Mayodan, are Remington facilities, to XXXX made and fire make that's equipment be our distinct guns into And we've going added separate in a with

Ruger And looking be to that, existing that indeed but to forward so will incremental product. we're

Ryan Meyers

for me. Thank you. That's it

Christopher Killoy

you. Thank

Operator

question. Rommel will your with question from next Dionisio Your Aegis Please proceed with Capital. come

Rommel Dionisio

to Thanks. go I’ve know asked calls, ask prior it this going but on question Good morning, everyone. and I I'm Chris, conference ahead again.

long for driver in You've prided here. I strength yourself product brand think a for quality, that's in and so key so the long of been

of you of up update producing that amount quality could is past? you're the the in give capacity control, that quickly, just standard quality nature terms ensure every things As the Thanks. so really product you in the you've firearms us ramp-up that and an of production to the that training had and of bit

Christopher Killoy

Thanks, Rommel. Good question.

we've One to quality of effort. supplier our It's and suppliers beef beefed at And up the its really but done quality Ruger, that dedicated we've our it's up teams. quality added to not function. things staff extent, at we've team supplier manufacturing a is quality that some only

in never lose we as job well making of to As internally the great customer. factory, firearms is try – our one for sight

to to Marlin customers So we've Whether going to try our so. to have intend recognize eye a do that's change great to it's not or product, tried product going a our to take We that's good products a we Ruger to branded off ball. never – deliver we responsibility, forward. that what and

Rommel Dionisio

it sport. Okay. in I opposed somewhat wonder XXXX on XXXX and first extent to one first on in you about And follow-up, like other demand much things brought into some I but driving different and time talk is really if search kind what just to the And here could that's especially about as talked about of factors activity that of having the XXXX brought a companies into was demand think being these there's benefit continued you've seems being how a women talked shooter, in maybe maybe of shooters current have the demand? XXXX, the time to of the

Christopher Killoy

before. to on at NSSF, hear the new our to we shooters, to to niche the our And in welcome group. of been as shooters sure base be existing fold. that Rommel. had when from much north with are to daily question, particularly someone new new to a products out potential another has wants we or a weekly impact sales back repeat that a evidence got it the stays retailers force part X customer or is our Certainly hadn't certainly new trade multiple a In continue that and product And association diverse the where going see mean, they – has the I million basis. we retailers retailers, that the those continue of we've of Ruger touch it see get the shooters, shooters. Good comes – key they firearm, estimated new buyer more Yes. new we

or job enthusiasts They I We first us have to firearms protection as their firearm kind purchase of all have those personal of and duty a firearms think nurture manufacturers to need last. bought are introduce continue can home firearms sport. it that's to this during need XX folks. The may with LCP carry, for gun, have may their we an go to make of customer gun kind or phenomenal but great you want your period. like range for with they really to friends. our enjoy bought that afternoon on a to pistol, Rimfire, other the great their is the Precision not at pistols and our LCP XX one past our things family. the make of we sure there, Good is range isn't example really to protection. Mark out that month can who enjoy sure is gun But family products, broad they that hook so XX/XX to do somebody the things what them of pistol our enjoy IV It's

past that base during duties XX-month period. have, and XX new we we afforded we've that make the grow I'll of say, one customers that's So been, to to nurture think, of I sure that this

Rommel Dionisio

helpful. Thanks. That’s very Okay. quarter. the Congrats on

Christopher Killoy

Thanks, Rommel.

Operator

Hamilton come proceed with Capital next with from Instructions] Your [Operator Please will Morgan Dempsey question. Ryan your Management. question

Ryan Hamilton

guys. morning, Good

Christopher Killoy

Ryan. Hi,

Ryan Hamilton

I Is quarterly solid is the sales. this that record believe right? a on execution. Congrats

Christopher Killoy

hadn't that our the I our in great week correct. touted couldn't think think And to their And had some I on that, very correct. folks maybe that's we've but of of it. it without We employees done We're congratulate them we proud all to out achievements. have factories. this announcements

Ryan Hamilton

Well versus cadence January so kind in split walk Absolutely. quarter what it But us don't and of could seeing December of the month. out I you you on? know the you’re by through deserved.

Christopher Killoy

Certainly. case, basically Well, quarter, the detail, in that we which warehouses. of don't again, year the because hiring inventory our our our with in was basically that no give distributors’ level continued again, but warehouse of end of efforts, usually throughout or

no to So quarter. there sales was inventory contribute throughout to the

production So basically and you saw and rates. by shipped that ability available everything that was grow built was those was basically to driven labor our

we So steady beat through that's drum a as the where we quarter. of saw kind move

Ryan Hamilton

of Okay. Could touch Still accessories there? Great. strong you're kind you seeing bit your little a on business, demand? what

Christopher Killoy

We particularly throughout with high extremely Ruger expect. make very And well things magazine. accessories again, of a strong, specific like you have are sales. BX-X magazines margin The firearms, to as standard been our has XX/XX's our might done our magazine those period Yes. business this the extremely all mags lot that products. those BX-XX, And are

mags we wholesale as distribution via our both So directly sell our partners. ShopRuger.com as website, normal independent our through distribution to through those channel, consumers well

Ryan Hamilton

to how this. don't seeing constraints I'm you of like to because any you the accessory kind The Are that? behind any think on want to that maybe side, or are – fill anything trying you they word products manufacture I orders seeing

Christopher Killoy

on made ShopRuger, every of our items, But well. have a of impact we those job on our from managed our and the of pretty Ruger bulk Again, in in come no components some negative firearm, have has are USA. seen firearms that. through Those equipment all that hats and are done from offshore, goes Certain challenge the the of and the that seen items. items phenomenal really our all team managing accessory the brought the T-shirts all there. most The we U.S., that items by of is disruptions. – supply our And maybe folks some firearms and if of again, the on large some and

to we noted throughout U.S. it haven't in seeing the base manufacturing the supply as earlier, I any seen the So really it's production. as it chain relates that We're disruption on problems of seeing we're offshore kind

Ryan Hamilton

Sure.

quarter So be for fourth you where start going guys going still me, track Ruger, be those Remind – to to on manufactured? are it's to are manufactured shipping whether Marlin.

Christopher Killoy

of going Carolina of come to group out Mayodan, initial The facility. Right. North firearms our are

we'll product guns. the the is certain Marlin lever After model out the are product there that will first will and we like QX. that’s as portions other line line, got be Not go of facilities, Marlin other Mayodan Initially, XXX, what we've the the also forward. The add of that XXXX, action XX with to the semiautomatic things starting and one coming in or Model those that, of XX we'll centerfire XXXX rifle. to manufactured if rollout be continue our in but be

Ryan Hamilton

Marlin CapEx, expected safe million XXXX that is $XX The up speed? getting – to of say to is in to good pretty chunk it going a

Christopher Killoy

of There to it we no, Marlin is of products I got means. and some is of products the of brand. dedicated really well. when a everything the get But it we any in the there we of we're pipeline, needed it, acquired new I other that some bulk to. wouldn't up We've bulk by additional had to looking certainly exciting machines running the bought the forward things CapEx but as other bunch say lot a new in mean,

development. is maintenance new product mixture. I a of the facility think think it and improvements, certainly so our of spend between it's But that, our And some I bulk

Ryan Hamilton

maybe little far kind during touch launch a how during was COVID guys that, a release that Great. had that of the leading Max-X Could was you during just time? a product as And into COVID. normal as new different bit than major you

Christopher Killoy

Yes. question. Good

everyone last launch. a the based couple more to of product One digital the over years, course, moved of of has things

for retailer, out You're you're an for doing not of envelope sending flyers email full example. Instead an a blast.

for You're digital ambassadors working with your launches.

You're YouTubers. with working

so lot And has shifted a anyway.

launch we this development incremental. And new that that I is we're that's do I product And mean, during a got under continuing it's there to think COVID-XX something make with period, facility. what did comes by going to be certainly accelerated launch. it line that. a if our line, tried to line. that, to already sure job, for ready folks out the get The that Max-X Prescott, product great fine was in Arizona its it own The tune

to came as lines that it those might've production online, hold sales. or it several were when on So extensions all rather are would off product opposed to cannibalize units embedded line introducing that incremental other in because Max-X existing we chosen

net So the Ruger. a one example product is for Max-X that incremental sales, was incremental new good all of business and line,

Ryan Hamilton

Got ammunition? dictated more just it. a caliber That's one great. of availability the model for Any certain that by indications be me. selection may And

Christopher Killoy

working their has they certainly of I in they shortages was We in friends mean, my In ammo some seen for. that ammo but customers. with saw we've first some they that for companies, at question. certainly clock some to I the fall. to could ammo throughout been the the that and might've get Good I caliber might bought know ammo are at not I choice, mean, the out business it country, bolt-action the cases, done a retail have the But talking example, one that. to rifle around get people certain that cases, their think

that. So of we I saw think some

by maybe a Magnum XXX that XXX availability bit said, bolt-action dictated from of the And they're see think handguns. category they're right calibers, people more in have not the a bit I little the shying were example, than and or they'd think – paying though probably know like it's now ammo lot may I even I where tight been choices I a in it's core X-millimeter or for back little like fall. caliber that rifle to, those handgun away in

Ryan Hamilton

it and XXX of something with of offer buy X-millimeter ammunition rounds you Do a that? like maybe or kind or promotion, a you comes pistol any sales

Christopher Killoy

those we've They inventory promotion some years manufacturers with their when get far a as complicated cross looked those done ago. at I tight. and We've other of is as think couple

consider our contribute promotional the standpoint, gross that strength seeing margin that's run So right that's financials. you’re we now a haven't helped from something certainly and to in But the of road. to is to obviously a news down promotions good the the needed

Ryan Hamilton

quarter. Sounds good. Thanks again, and great

Christopher Killoy

Thank you.

Operator

over have to And Chris I would at for in it turn remarks. queue. no time, questions further to back this we closing now Killoy like

Christopher Killoy

In tremendous the operator. five would pulled and that host Ruger. X,XXX of you growth. drive virtual to the XX. I shareholders challenges anyone And I hope continued open Time to like Annual the login Meeting a posed on at as will our as thank The you. to members will your during and pandemic join would is able together as Shareholders of company. interested meeting I to all like the financial past Wednesday, on us. quarters we Thank the company rose Thanks, team be capitalized is the closing, to COVID-XX available virtual for interest you at in thank Ruger X www.virtualshareholdermeeting.com/RGRXXXX. operations the a.m. May Eastern in opportunities well improve The to by information The

Operator

This concludes for today's participating. Thank conference call. you

disconnect. now may You

Sturm, Ruger & Company (RGR) 6 May 212021 Q1 Earnings call transcript