RGR - Earnings call transcript Q4 2021 | Sturm, Ruger & Company, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Fourth Quarter 2021 Sturm, Ruger 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 Killoy, conference Chief will speaker to I Chris today, Executive Instructions] hand over the your [Operator Officer. Please go ahead.

Chris Killoy

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

Kevin Reid

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

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

Chris Killoy

Kevin. Thanks,

Now results. XXXX Tom the will discuss company's

Tom Dineen

Chris. Thanks,

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

sales and substantial were per other and favorable production, in XXXX earnings compared manufacturing profitability efficiencies. For diluted sales XXXX resulting expenses, were costs, reduced to labor in engineering increased XXXX, sales $X.XX million, other and of share. $XXX.X the promotional and leveraging labor including depreciation, activities increase net to fixed is attributable The increase the indirect in and

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

were XXXX, earnings in For fourth for quarter rate the quarter. diluted which invested XX, effective per in by $XXX.X per T-bills, million, tax $X.XX of At was earnings increased Diluted which reduction due and in the corresponding short-term period to recognized investments, our XXXX, December share in in a totaled $X.XX were were sales the the are year, million. the net $XXX XXXX cash U.S. share. and

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

acquisitions into to predominantly operations. product that approximately pursue and value capital In per capital estimate share, $XX.XX We stockholders' per cash XXXX, share related emerge. $XXX.X of December XXXX, $XX.XX equates to debt-free new reinvested expenditures, of investments. cash-laden, $XX At short-term other was which XX, will book to was the of $XXX in related We of a that $XX balance from us capital million, expenditures primarily sheet to opportunities cash of Our form million we new back million, which development. the million allow will company may generated XXXX and that be equity products.

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

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

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

Chris Killoy

was the XXXX inventory, for year XXXX year great no manufactured a the in finished to sold goods We virtually entered Ruger. with of firearms had be Tom. so Thanks, in XXXX. all

a in on not than year, achieved increase which at operating XX% with this is Our of assets net less manpower the gains for have remarkable sales factories. been increase XX%. in without manufacturing possible efficiencies increase was a And our increase production XXX% would drove return XX% a feat. the These XX%

transportation the highly year. we markets, and dedicated tight challenges supply publicized the and of accomplished Our obstacles issues this chain labor COVID-XX that workforce despite throughout experienced

products a our increase firearm the XXXX, checks the products, distributors product popular new in XX% distributors of introduction of Criminal Sports National retail of adjusted production, checks, of from sell-through as and reduction Led pistol million or million despite the strong products. X%, in again increased $XX million to may pistol, at Check represented retailers in at Ruger-XX to our an attributable of the the sell-through in XXXX, this the and increased in a System compared and the in our our MAX-X in the XX% Instant XX% to Following for our availability XX% as by Background The or demand XXXX. pistol, of LCP XXXX the adjusted background time sales consumer sales by increased the new firearm the increase by award-winning background decrease and in result sales, MAX $XXX increase National Shooting of XXXX Foundation. be from favorably NICS our products of $XXX products

in product government lever-action note new Ruger-made, We XXXX on included mature reminder, product December. ended not of line and chambered as a XXXX a product extensions SBL our in the are shipped Model high calculations. rifles, XXXX first sales in families the derivatives we As Marlin

differentiate for perfect. and reintroducing fan, needed time Marlins, that getting performance and take past XXXX of nothing standards. accuracy Marlin knew year, quality, a the in our short Being thorough design was reintroduction XXXX, more production our we a make the Ruger-made years of During team focused completed ensuring to detail many longtime From on Marlins to we to sure and and highest that the in live focused our review clear the Long I lever the firearm to of the gun. forward on right. the to quality look consumers come. every ways I

the significantly units rapid to finished inventory below XXX,XXX for pandemic of fulfillment needed remain inventories support our of level increased most retailer remained Our XXXX, goods levels. Distributor pre-COVID-XX in below but demand products products.

rifles. stability firearms our inventories are reallocate in to the to pistols manufacture labor models while from of have demand, replenish we market adequate We line, can our products and the an be provides versatile that our supply strong to appear the our that Marlin we and in distribution machinery rifles hunting This prioritize as expansive some volatile lever-action an ranges to which bolt-action classic product revolvers to channel. in

Our to within and our XXXX. sectors various ability we of to the as industry. reallocate diverse as maintain resources ebbs excited of and I'm levels appropriate flows willingness us inventory the demand strengthen enter

our look XXXX. the question? innovative Those new XXXX. of under in will and new We may some strategy disciplined of to Ruger to We forward the are both remain the vigorously and developing first of products these pursuing launching products. highlights and Marlin exciting Operator, excellence and we manufacturing brands committed have

Operator

Hamilton first Instructions] will line of come Capital. Dempsey from Ryan from the Morgan question Our [Operator

begin. may You

Ryan Hamilton

report record a earnings. Good day morning, to guys. record What or annual

dive just Let's away. in right

commented last Any what on front, seeing quarter you're ammo hearing? comments being about issue. and You availability that an what you're

Chris Killoy

Ryan, good question.

and like of We of X-millimeter in calibers the some core availability are particularly XXX. seeing ammunition, better

So I think the that companies ramped is improving. all have significantly. I know ammunition up

helping getting is to a I the And stocks closer back that so normal think levels. little

Ryan Hamilton

those unavailability, availability be it, I lines, you you is guess, Along – or impacting numbers on all? mix your checks Do Great. you could release. that touched that impacting those think product at might in call

Chris Killoy

I impact I certainly could in think an that earlier now. impact but an have don't that's think XXXX, been XXXX,

inventory our retail. are to by we're of and we are in of retail Hawkeye trying that things supply, nature, got filled seeing a more outages like shelves our large, customers. starting the certain lot return think But still a revolvers, particular Ruger rifles, normal exception that we're to to, in still with get at products very for categories, which we for of tight some seeing I

Ryan Hamilton

Great. more legacy your that. margin too like getting Without what look does on some specific, to job great profile the on of Marlin, compared models? the release for On this rifle

Chris Killoy

in right Well, time, stage. over it's in course, the the expect we very produced We're similar ramp now, be line. that other of factory. Mayodan lines still long-gun But will to our it growing

comfortable very going. we're it where it’s with So and started where

Ryan Hamilton

the stuff. supply And labor the note Great. of commodity, you then there touched Anything Okay. on on commodities? chain

Chris Killoy

– think seeing most we’re across our No, as certainly, the I board, manufacturers. inflation

team job chain supply working our with suppliers. great done However, a our has

sheet our in of have materials, the over supply months. our increases making think a cetera, on downturn to sure buy price We raw forward steel, inflation to weather I terms and from of have taken available any against balance seeing both ability us several aluminum, as we XX But as protecting well past that we’re et strong some helps standpoint.

Ryan Hamilton

everything helps and U.S. stuff. of the sure it I’m manufacture that in that most you source

So to for nine out that’s great. six months? Any price the scheduled next increases

Chris Killoy

on the certain did X. we X% depends price take board if It could pretty January just much commodities change. see on increased on inflation across we now, But anticipated. increase right None a that

Ryan Hamilton

fourth sales. on Do enjoy all? at that you Great. – quarter I by that new And break always then out on the the touch product you

Chris Killoy

typically, product too for I in we below much that was, category. was it out believe new XX%. Well, greater that Ryan, don’t year break it the detail, the

quarter it that think to as was for I pretty fourth well. close

Ryan Hamilton

I Okay. the comments Great. and in then line Remington settlement? for one back Any And can jump last me here. on

Chris Killoy

in a it as was I by not settle. important to there. There the involved to a to was And it’s you is decision settlement the know, liability and insurance finding what The likely case recognize Ryan, went never companies what a case. and we’re this No. jury, no think wasn’t. that

to on their I matter. the really can’t thinking So speak

Ryan Hamilton

the thoughts Thanks, Keep exactly. work. guys. up my No, good again

Chris Killoy

Thanks, Ryan.

Operator

next line of will The Dionisio question Capital. from Aegis from Rommel come the

begin. may You

Rommel Dionisio

morning. Thanks very much and good

question on a gross Just margins.

in I this I wonder it some what Thanks. shift gross of nice margin, headwinds or products, just in give else a there? maybe going on us if of mix gross margins. could you think some terms little given you a such drove the XX.X%? bit, on was granularity little something on new I sequential materials And had given and raw but think You shipping, progress touched solid

Chris Killoy

when of contributors. the get Well, covering that’s one you’re that that you lot and fixed a overhead, of biggest volume,

and products the MAX-X Ruger-XX all a things for performers big us. were like pistol, were new Our the the LCP MAX factor, solid very

work of So of there of which lots was really increases the of kaizen, effort It’s some the not like we most going continuous that margin last year as They waste terms our in helped did folks that, commodity big factory. to in into of those really job. really I things a quarter good price and attribute good on the taking numbers. level in price think big has that improvement, increases then their daily the I us phenomenal I factors the a factor fourth the beyond But costs. It’s out out gross been think took gross well. cost and taking just driving and margin, happening

Rommel Dionisio

Great.

And maybe Okay. just one follow-up. quick

prior if an where call, on I give are chatted you were about the supply progressing guys that’s us wonder chain some of and conference there. I you facility of Thanks. the on North have just things and your you expansion you how the could Carolina update think doing.

Chris Killoy

main goods recently in opportunity leased same our our footage, down production about our our the has Mayodan. is on And – another move North facility we us Yes. over built will lines We But and it three Carolina. the move folks XXXX that nearby, put be production, in of center in footage to assets, gives had there. Marlin although call Marlin locations facility. – allow right the finished that. we’ve assisting The factory Mayodan essentially been there there, our there to located lead that doubling facility And our where that’s all additional the square had in Carolina in from the North square us in

and it and some XXX think coming, we’ve line especially XXXX and for I bodes product initiatives so the the got new expansions well the other And with have. Ruger Marlin, we product of then

for facility are great a a in think will workforce, pay future. great I our that dividends But locations. as the be will that it’s think and us, all I

Rommel Dionisio

Great. much Thanks. solid quarter. Thanks very and

Chris Killoy

Rommel. Thanks,

Operator

question Our Mark Smith Street of is the [Operator next line Lake Instructions] from Capital. from

begin. You may

Mark Smith

Good morning, guys.

bit to sequentially. production or looking QX, talk at quarter? bit. wanted little in First a question maybe for I me, just impacted any production Did a about down coming take were COVID holiday more Just issues time guys, the that you the off

Chris Killoy

Well, tend we part product were day. that inventory we that two rates, throttle made was legacy – product QX, in back mean, per lines a But a couple We our going planning. about oversupply lines adjust I going to SIOP think no of about just also couple the production, to ramping weren’t is factor a of lines there in doubt sales bit terms COVID or were of anything units certainly were and operations to one lines our while our make we up, into of And little did a new there we labor on manage market. sure that it. partly

Mark Smith

leads you regards about next in pricing, question. demand And the Okay. looked you’re pretty to in to our solid. seeing Can and that really still Orders today? view, talk what

Chris Killoy

that on distributors. we we to less outgoing try our on Well, rates incoming order from what’s do focus the

distributors barometer to to year our our what purposes, they’re but very looks still for this the That board. ago retailers. solid shipping what use at where planning a on it not was, are that’s visibility good and across we and have time, good. It’s it’s shipping the say, retailers, watching We it’s

single-action retailers we really too making diversity line, need, and to one us production continue where like things things to sure focus many need just legacy we, sales. but guns in don’t We’re the looking our The nature. our under rifles, that years, frankly, product some earlier, in we’re revolvers regard on. number and helps to as our strength make same got as not seeing movers, because consumers for. that that, that two not of produce trying giant good they’re for those get that and we’ve time, of got also they And on we’ll products and that we what their past Again, we from sure things it, our are distributor more time. which forward, weeks looking the think to watch some I go Hawkeye product that rifles, lines, I touched the we distributors our distributor e-mails we over categories like to sell-through, refer our from X.X on delivered needle much every double-action demand like things get We’ve at all adjust we

and So an wholesale opportunity of it those in in gives at to level. holes some fill us inventory the retail

Mark Smith

question. that’s of kind next And my

to of how watch a see the some watch from as XXXX? distributors from to healthy place of too we don’t we orders retail in what As make we shipments as build don’t late these we XXXX, kind orders, well the an inventory outside sure similar get should the incoming to at high, saw levels over so are

Chris Killoy

business. watch We run keep our inventory. our And what what standpoint. doesn’t they we Yes, that that what all mean feeds ship in good we are inventory we we into received very selling. they’re that from non-cast wholesalers is orders situation Again, our of from regardless that orders. But have an closely on We and that, the eye of just point. how watch an

our orders mean to doesn’t on they’re what’s in to disregard on them books, healthy. though their retailers healthy try going just what’s and even keep it the non-cancel we and keep going marketplace their with on So inventories

Mark Smith

think into that? new a revenue products has Got you kind we that rolls move view off products any that it. new your some outlook the of talked would sold far and as pure the as maybe two-year, about Marlin for you last off some are And give that maybe products of expect other skew products number Can one With coming me, insight in for great. new Or metric solid. of you higher? you to rolling really That’s XXXX? in products been do from as how a we’ve into Wrangler I kind have lot

Chris Killoy

has, Yes, question, in Ruger-XX I mean the point, as will quarter, Mark. a has off. roll Wrangler good good this rolled off

remain profit it though So things, horizon, that great our even I two-year two those generators, and we count we those after are of metric mean, sales that years. don’t because use, strict strong

things be got sure we’ve new contributing. coming, and So some they’ll I’m

the So obviously, and products not excited things talk biggest that is but that it. there good about today, the are we’re going coming, thing in we’re will are some new hopper what be to about

got working dedicated some cool working things on We’ve are facilities in to some bring engineers really all very Our teams hard. market. three to

Mark Smith

Excellent. Thank you, guys.

Chris Killoy

Thanks, Mark.

Operator

I’m [Operator questions any the not queue. to in closing further Chris Instructions] showing like the And turn for to back any over I’d call remarks.

Chris Killoy

American would sell for Thanks, your continued Ruger like I team I operator. X,XXX closing, In you Ruger. be Further our in at once Meeting our thank members Virtual of loyal and will design, reliable to thank our details our Monday, every XXXX join available early the May customers And to over to hard-working in on day in Thanks rugged, again. like manufacture and will who April. all us I you of meeting interest that would of factories. firearms become hope able Annual X.

Operator

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

You Everyone, may great day. have now disconnect. a

Sturm, Ruger & Company (RGR) 24 Feb 222021 Q4 Earnings call transcript