RGR - Earnings call transcript Q2 2021 | Sturm, Ruger & Company, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Sturm, Ruger Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to your host today, Chris Killoy, President and Chief Executive Officer. Please go ahead.

Christopher Killoy

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

Kevin Reid

hopes, of company's remind important Thanks, that company's statements statements. intentions, course want or such materially the differ the state to forward-looking everyone results those expectations actual of this We to predictions that forward-looking projected Chris. in meeting are the or the in beliefs, management's made statements. from could note future that is It

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

Christopher Killoy

Kevin. you, Thank

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

Thomas Dineen

Thanks, Chris.

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

period, were sales $XXX.X year the earnings net were per and share. prior diluted million For comparable $X.XX

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

labor and resulting For in labor robust other engineering strong expenses, yielded depreciation, net $X.XX sales in the sales fixed significant surprisingly, attributable results second our in in The quarter of including were reduction $XXX.X improved costs share. per indirect profitability favorable million corresponding in to increase efficiencies. earnings leveraging the financial a substantial for promotional activities sales diluted were and Not and XXXX, the period was production, increase generation. cash and

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

ability Our overall facilities investment. between and to cells improves capital shift for allows utilization between reduced manufacturing equipment and

balance sheet solid. remains X, at rock Our XXXX, July

totaled cash are UST Our short-term $XXX.X bills, million. in investments, and invested which

had and Our current no ratio debt. X.X:X, we was

$XX.XX of short-term was $XXX.X equates cash which which Our to value share, book per per and was share stockholders' equity million, of a $X.XX investments.

returned of Our dividends. share in shareholders a months -- the timely first to month success our and manner. XXXX, the of In payment the our shareholders through in continue direct first we X million in $XX.X to

August dividends quarterly $X.XX share Our quarterly for have dividend, of payable dividend the as Board of XXXX, Upon receiving a on over August of declared share shareholders XX, received far in per XX, of thus shareholders Directors record XXXX. $X will XXXX. $X per

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

Christopher Killoy

North Carolina Thanks in Ruger New our to folks manufacturing Hampshire, Missouri. team facilities hard-working in X,XXX Tom. our Arizona, Thanks, over of and

remained consecutive seventh the of the and The quarter pandemic. the COVID-XX second posed every has despite products the growth compared Demand and period. strong. retailers of XXXX in company's meaningful half to of the first sell-through challenges to metric virtually unit estimated prior by XX% our operating profitability sales, of 'XX the the increased The in for independent products distributors financial year marked quarter from

introduction the may For that Instant X%. consumer for the period, as Shooting in sell-through products, checks, The following: of be referred adjusted the National met X consumer the strong by new quarters in Foundation, the demand. increase decrease commonly as Sports the checks, the and the increases System past Ruger products attributable Check to favorably Criminal been company's the production decreased adjusted products have each of NICS background same demand compared strong of Background to in background and National checks to for NICS with

New development highest remains priorities. product among our

the on The The joins roster past Outdoor venerable Caliber an sales products XX% extremely of $XX Association has XXXX for On personal family, our that reduced which revolver, for first XX% versatile of tremendous launch is firearm .XX of of $XX on and to the recoil. which the the The platforms overall manipulation which in best new single-action Rack Auto for million set the half represented XXX Award a the easier the Long years. over pistol include Pistol, in pistol, excitement. product of introduced for our compared LCP LCP has These million slide MAX-X based with the or LCP X latest the successful take of down a product revolver, II heels in sales XXXX, pistol MAX-X signs rifle, or is XXXX. awarded were Wrangler this In Media the and popular shows first the the Lite no sales by standard of in earlier we classic the and new latest system protection the introduced LCP been decade. LCP the firearm utilizes from slowing offering met X-millimeter pistol half the conjunction MAX a Ruger-XX MAX, Ruger year, Ruger NASGW. pistols This Professional impressive in that which June. with is

greatly in As they a mature product the reminder, product derivatives not additions are -- extensions retailers distributors, the catalog valuable are and Marlin Nonetheless, the our return Ruger included sales action which families quarter. by We to line and fourth begin appreciated forward calculation. new and Ruger of to loyal product we our of lever products in sales of rifles, consumers. look are to shipping product plan

out our in Marlin interested progress Marlin line, Instagram. If on you're firearms product check the or Facebook with following

in vaccinated, dedicated other distancing and become other cash the each of in growth with increase every March wherever and manufacturing and our with of has quarterly of strengthened unit been and of manufacturing by our distributor in the for facility, XX%. clean providing XXXX, providing gains. additional ventilation work and our output fully of We indicative cleanliness visitor maintain we workplace, folks, of with inventory coverings including and that XXXX quarter confidentially the the end implementing overwhelming production XXX,XXX support Marlin have employees XXXX, our early maintain cleaning, to processes at from This approximately or at potential clinics interest has safety over other consider environment, and inventories units to efficiency a our new vaccination XXX despite to XX%, factory the all and mitigating face introduction social the in to mask all of employees lower and of levels. our at goods XXXX, safety an March multiple access production safe reducing its an in safety health XXXX sanitizing our help people providing health have the what incentives additional hourly maintaining our assisting time with outsized through and hiring been improved and the of pre-COVID-XX Since The labor weeks inventories minimize the of facilities, and safe in end workforce individuals delighted holding and than And of all and use all to second and and to business, them to employees growth reminders fans. currently employees we facilities, were normal increased finished of employees in and to at by the received by paid and by unvaccinated behaviors. an protective in to facilities health throughout is of encourage issues were and guidance remain times their additional impact with on-site responsible maintaining nurses, time Since they in quarter X and engage of XXXX, first Ruger COVID-XX periodic week last multiple facility XXXX. on personal health or our encouraging proactive we employees cell, COVID-XX mandating continue off restricting products employees units communicating to remotely equipment onset possible our at our the would expected the in XXX,XXX issuing these manufacturing were of associates and at-risk

With the proactively COVID-XX again associates we accordingly and safe healthy United and fully and seeing our States a minimize COVID-related rise to every keep are We and who total any disruption once bonus estimate vaccinated. positivity to adjusting costs to XXXX. $X.X cases our vigilant remain rates, in plan million for will $XXX becomes that this Included business. our employee a estimate is approximately in in

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

Operator

Instructions]. [Operator

Ryan Capital. comes the Our from first question line Street Lake with Meyers of

Ryan Meyers

to the First next about to how throughout you one production the when kind at of into How And think the for as nice see the starts was the are increase the it you that down, year year? me, some thinking point backlog you throughout of rest production then adding are evaluating progresses? guys year quarter. tick this

Christopher Killoy

Thanks, Ryan.

would is regardless our sell-through process, our track look we and be we that line. from at Ruger go We and our watching of competitors. give every that each every continuing look inventory whether week, I frankly product of think weeks. at flow at our distributors of at other keeping inventory it's meetings the wholesalers our those operations I X tell to flow retailer. guidance, As key but and you line, to wholesalers And sales you or every Ruger, inventory watching going into We through the inventory the product planning, know, the don't single inventory forward-looking SIOP

So models the that certainly levels. our and of far factories enormous the change. SKUs model needed to ability has on what's as folks flexibility our moderate process But quickly. impact have up for meet as to our We're distributors. our vary -- ramp lines an demonstrated flexible individual to our terms those won't ability in within in production to Hiring very flexibility,

we'll the confident market very I'm us. So adapt to whatever to be throws able

Ryan Meyers

-- your expected a a G&A like All looked than and what provided model. expense actually was lower the in we quite the right. leverage And of had That's helpful. then it bit quite bit

level? So the do keep G&A expect you up pick you second half think to this guys of you it year? Or would in the at the can

Christopher Killoy

it's I the in but up nothing out Ryan, dollars ordinary believe, this of actual there. quarter,

Ryan Meyers

seeing are pressures did kind of price And at you the prices, can Okay. think October? take looking input to around you increases And as do like then you you you year guys on that pressure have last those anywhere? ability then see

Christopher Killoy

Good question, Ryan.

with upward X% seeing, last take and and are they shortages. as the in chain did supply a manufacturers from deal as most noted COVID-XX our our price U.S. you prices supply vendors October. increase, pressure We chain on seeing are We commodities as both

June, mid-June. one also We this took

Just orders price enforcement out that goes only everything orders a price went thing and a into case, booked effect. already weeks And into are ago, with. in door. on few prepaid we that that we shipping Ruger's effect the The law across-the-board protect are X% increase begins that implemented

Operator

Our Dempsey next line question with comes Hamilton of Ryan from Capital Management. the Morgan

Ryan Hamilton

on quarter. circling record Congrats back of labor another the to question. Kind

getting up out production ramp to fourth you're seeing ship have you as building been you already the you in As quarter, ready there? for are Or any constraints inventory? Marlin sizable

Christopher Killoy

we're stand in in part, the down going to in work the materials, line -- scratch. our team some starting part -- down needed or that some line facility up we has machinery, North that and some by inherited -- case there from done through gun. We we in of purchase, in by Carolina. really we Marlin, process, the we're gun really, Mayodan, job, a raw parts. But Well, And some our got phenomenal

so lot a of us. work of ahead And -- there's still with

-- it. parts So about very in level picked expected the the that we're up for making really necessarily things Arizona, line, very down got and been teams been of me through effort by got It's the a engineers folks be think, working We're Newport We've not things the will that's working factories, been fourth in in of down in extended sale. parts, the Mayodan. team to inherited we'll be quarter And we've small on frankly, of other exciting in process. relaunch is in I X other wood be personally facilities and what's that's and launch Marlin watching And fourth or that made parts we working all by we'll the -- guns materials like our And helping great going on our in that excited that. combine, going great in quarter. to shipping of basically a Prescott, -- We've stocks, great. with Mayodan. of

Ryan Hamilton

whatnot? as well, and not to going be you're parts -- accessories in shipping quarter And completed fourth and right, just rifles the you'll

Christopher Killoy

have will and XXXX, Certainly We'll looking the a that are model limited be Initially, we'll we'll single with SKU It be rifles. our XXXX not offering. XXX. customers and absolutely. every the for. single start -- model Yes, every completed

will to SKUs it take great focus those So action beginning, Marlin is lever the back the excited a been again, that. in of full us and glory. to we're And team has on But a it. the bring about all its centerfire on job doing while

Ryan Hamilton

can Well, sometimes scarcity drive demand.

a think under new plan. on Marlin, my products product that's will those classified good be I your So memory new definition? Refresh

Christopher Killoy

into again, brand when frankly, of been for that time think were Ruger their since long going a doing staggering. -- every and a the former way. a talked They're is, parts to Lots mean they trailer me has up we have job you snuff. Absolutely. little -- amount but tractor team around about And they're XXX effort standing loads supply and machine I think equipment, to bit lives, certainly fantastic a new about the work in chain, call, sure machinery going up that is coming through on work to needed our be may process part of making by I part, of previous done. over heard in you

a been task, down it's big undertaking so And big in Mayodan.

Ryan Hamilton

a guys break newer out, You you don't products normally I usually are product and phenomenal rifle do from a something you but know touch at higher Marlin dependent margin and that touch I versus you maybe a whatnot. that what Could pistols when you're margins? we expect you And profile little kudos just kind little new or with maybe on of so there. demand could bit. this maybe bit between you it's and looking for can and operator, margins, products, are know But -- seeing on a margin legacy -- products?

Christopher Killoy

gross maintaining in of what things effect cost release, at, price on it's this far fixed products and very product that evaluating we're of to levels think as the to in a is, need competition, at where that hard product the of building as those looking at particular for marketplace, to at target has very lot you're margin. one now I probably looking disciplined looking these approach seeing obviously looking in is think have coming I we at competitors, talked the earnings the costs, covering we positive a points. fits of existing where the number point. terms new we a When I say the a consider when mean, in then currently and we're about right that we production we're

point. really so very to we needed categories, crowded. a example is to back. things X.X are years a some Wrangler the The revolvers we're in the specific And to marketplace. specific Wrangler, Others good more hit price which flexibility very have be launched or point others. than -- are trying Certain successful A price hit obviously,

to of new And And one features go is and the that competition that process drive we landscape try the so what's the points can. with development as can our on look things the price opportunities, to of our sometimes market, outperform best approach the manufacturing processes. we based the really, we where can in that's think product we prevailing competitors, benefits to package and at

Ryan Hamilton

and One orders accessories get in I'll more me then business, sense. the for there? you issues bit seeing maybe back because strong of a line. That what Can filling on demand? little you're touch Any makes

Christopher Killoy

QX strong, magazines, our was ship throughout accessories QX. that X-step evident as the strong Well, very as for been through increased as things and own distribution ShopRuger accessories we have have our And both well been like particularly very out us. wholesalers, firearm sales results accessories, increase for demand

So of that strong division. was part performance of the accessories our

But a a sometimes a demand capitalizing to great it that the think sure. lags ebb the little folks tends with on That's firearms, bit in little bit. QX. world for and flow did job it I accessories

Operator

[Operator Hamilton Instructions]. line the from We with Ryan Morgan do have a of Management. follow-up Capital Dempsey question

Ryan Hamilton

I line, guess. short So

Christopher Killoy

Ryan, That's say, to you're what right was back going I in.

Ryan Hamilton

on touched quarters. touch while that a on is that could is the all? this still of at ammunition kind you expensive. of over becoming is a a available -- I've I lot you know what view? it's little it's been I the sales past couple seeing Are still your Or From component. question bit And in helping mark seeing maybe

Christopher Killoy

more speaking ammunition to manufacturers, to think, clock around noted, as or again, up I coming out available real than with there. a it they shortages somewhat so demand. recent saw ago. my weeks, certainly the was it keep I and year We seems you counterparts work know Well, in all with in But be the

on question their certainly part. it's of effort not So of a lack

coming in, in new the new to I in of, consumers ammunition Remington demand. resumption to is XX shooters, from put the to normal I now bought million get the those is new of those who probably million they getting operated some got, closer probably increased us And at facilities the think by between and -- of from still I National increased Foundation potential Shooting we've but we still when all ammo that's of go. think we Vista, shooters the demand demand way -- ammo. then I a that back spurred X that production long also the shooters all can't perhaps combination hear got look numbers world, think I that away Sports of -- people as ammunition say and find

the to mixed stewards new I or lifelong that guns them become importantly, we access good those So that sure key the shooters probably bag range in ownership see and ammunition done you have just their are. of is Ruger, they course, as the depending enjoy get to -- on and stay a it's think firearms so did think users that out not year most but safe future. firearms with stay and We'd have can make thing out the of like firearms, with I business and firearms who to to where the want there of one But past in of XX months, buy purchases. responsible

Ryan Hamilton

that's No, good color.

shooters? on touched far as that seeing gun field shooters. from strong women a quite a getting at entering Are Are buying bit women still feel are this as carry. a or a or third second buying little still you bit or you new You demand gun concealed all new owners first-time

Christopher Killoy

well we us the Absolutely. counter, We're a coming think definitely into more marketplace. much long more shooters term. diverse We're and firearms for crowd bodes seeing retail the at seeing that many female

trying make part to as to well. we've we're firearm females keep that to that great are and them after products that's going market think towards ranks. the going use our going continue sure the pick up more women got to oriented in of see We're And that them. I to shooters

Ryan Hamilton

through for my more was here. me. notes -- looking I looking One just

hard-working Where the end roughly that which headcount You've got have X,XXX be? if should the about where say at more. that wanted. agree see you employees, said do you I you you could whatever -- year, couldn't was of would you number By

Christopher Killoy

manufacturing of that's that's that wanted would tell Normal sign end the our facilities. in ways out facilities Obviously, I got X all the X or of our at Well, every eats Right months I now, out to has help one the Every a you, sign help -- mean out. day. of we're there. year. the we've out attrition still wanted number

our product pistols. working got the out -- of normal between and as up new growing well Prescott, the look some they've line attrition we've got still ramping that MAX shipping new products you like at those as lines, that Arizona Ruger-XX X. on are So factory, They're

wanted got Hampshire, course, New we've go plug I'll products the up in interested, that to line all out. the Mayodan, sign there and my have going teed of positions if got our X couple of have anyone a hiring coming where to there. in Carolina, North factory. and some Marlin free into on new lots exciting again, And listed them website, help then, being, put ruger.com/careers, is it's folks we of And for

Ryan Hamilton

I've to facility, been your magnificent. Mayodan it's And

So yes, I that. second would definitely

Operator

are the further There questions. no over turn Chris to call remarks. I closing now will Killoy for

Christopher Killoy

members In Ruger. operator. continued more team of X,XXX would I like our that to thank drive in to Ruger financial results. closing, for thank work outstanding interest to than to to your the Thanks, And continue together and expectations exceed like you would the I

friends, this more Shooting Sports shooting family want Finally, the Visit with National I Shooting like how celebrate Sports and to and sports Month can is to August time note Americans activities. these letsgoshooting.org you lifelong they introduce month learn National newcomers, to all this for a would celebrate you. Thank month, of about enjoy to that to August.

Operator

you participation. for your gentlemen, and Thank today's call. conference concludes this Ladies

disconnect. now may You

Sturm, Ruger & Company (RGR) 5 Aug 212021 Q2 Earnings call transcript