RGR - Earnings call transcript Q1 2022 | Sturm, Ruger & Company, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the First Quarter [Technical Difficulty] 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] I would now like to hand the conference over to your speaker today Christopher Killoy, President and Chief Executive Officer. ahead. go Please

Christopher Killoy

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

Kevin Reid

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

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

Christopher Killoy

Thank you, Kevin.

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

Tom Dineen

Thanks, Chris.

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

period sales XX% XXXX, year and $X.XX remained last first the million $XXX.X consumer reflects were in from in The reduction the per early XXXX. for decreased For net and levels sales in the from XXXX share. diluted unprecedented that firearms surge the corresponding were of quarter of throughout began earnings demand

of were the fact, In company, XXXX outpaced the the of XXXX. in quarter history quarter sales in highest only the first of second the second by

materials, within transportation of increases to our We short-term cash deleveraging unfavorable quarter plus million. margins operating which in inflationary instruments, United sales profitability decreased The energy, margin offset mature XXXX Treasury quarter available April of first resulting margin cash increased pricing. from On fuel partly in and invest cost in investments $XXX States and one and first production, the by services, costs to fixed Gross commodities, X, decreased year. XXXX, from XX.X%. of XX.X% Our totaled from the declined from resulted lower and the XXXX. from XX.X% decreased profit XX.X% the

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

cash was which robust that of X, emerge value was $XX.XX $XX may book debt-free explore to Our provides as strength, a XXXX and share versatility beyond. short-term stockholders' balance and At we and consider per in XXXX, sheet investments. and share equity per equates opportunities of million April which $XXX

in into the the equipment upgrade we and of modernize the returned million through generated our new first of manufacturing company that development to to million of quarter and of product will the cash be $XX During to XXXX, operations. capital of $XX the dividends. first XXXX, capital shareholders expenditures. reinvested approximately We $XX expenditures of that back million, form In $XX estimate predominantly facilities. We related from XXXX and quarter payment million we

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

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

Christopher Killoy

Tom. Thanks

quarter As the our demand during products consumer finished distributor the units. units XX,XXX increased increased overall subsided XX,XXX the inventory inventories of first XXXX, and of goods company's

While remains been of product channel the has lower our quarters, product largely than our over few inventory inventory desired. of families of families several of many replenished past

prioritize rifles, and in Rifles, Rifle our Marlin our undersupplied and of We continue Pistol-Caliber been demand to rifles, rifles. double-action strong and Precision remain have the the American the production on Carbines, centerfire that in our marketplace. often revolver the focus and the include, Ruger SRXXXXs, families single-action XXXX course lever-action the XX/XX mix product These LCRs, families

of logistics allowed for greater flexibility these done supply challenges and adverse mix great Our the a labor folks impacts mitigated operations and production which job and by have tight issues markets, about brought the challenges. chain navigating transportation our delays in

manufacturing and guns proactive continue our primarily continued level. distribution and healthy the mix individual retail responsive the at for to in approach the firearms of allow to distribution will to in the down replenishment be chain We Ruger model and inventory optimize right of Ruger

Golden recognized product new development Rifleman recently the Rifle prestigious was Rifle Shop many by the Custom Bullseye XX/XX the the which future create Our the Competition of American Award continue of are teams firearms and Ruger industry. design to as the of the awarded Left-handed often Most Year.

see product to ongoing -- Marlin of excited line. the our are We product progress

rifles forward reintroducing lever-action year. We and continue volumes Marlin production increase to Ruger-made, look additional throughout the to

really surface bring just the products are scratching the brand will Ruger. value of Marlin that Marlin We and to the

represented Charger, Sales and pistol, products XXXX. LCP forward and looking including in rifle, PC Ruger or new million pistol the firearm in of Marlin are Marlin XXXX. XXXX $XX.X MAX lever-action of quarter the new MAX-X the of to launches first product XX% We more sales

were rifle including the revolver, LCP popular As in Ruger-X.X new and of not product regular calculation. families the considered that XXXX. for longer our to new pistol a reminder, captured first .XX in and over sales us. included in firearms for years extensions of in continue LR new now have longer in are and our line in no firearms production our product XXXX sell metric. They -- product II derivatives sales product been just quarter product no the are included sales mature two product products calculation for new are well Several the the Those

first manufacturing products. question? remain exciting our XXXX. have for will disciplined We of the developing may we innovative and quarter highlights Those the committed strategy pursuing of and to and first excellence the Operator, new vigorously are

Operator

Instructions] Ryan Lake Street Our will from Capital. of from line the [Operator Meyers first question come

open. is line Your

Ryan Meyers

guys. Good Hey. morning

into firearms demand has and through kind operating you at think question steady of of First going XXXX will level market do sort of when for moderated look rest me, overall be so you this XXXX? and the the at

ChristopherKilloy

just Well down think that Ryan. the or just like look first XX.X% which came Thanks, then is. XX% you mix mix adjusted quarter XX% you down April mix in over look I at about and at

but the months saw And shown a couple fairly predict over have that so historic of that's those highs decline consistent certainly can't year. last future in we trend. last We the that

April we've saw what it in as seen that's well. so And far. we So

Ryan Meyers

the and sense. delta between then just makes then, the during quarter? unpack ASPs orders little units bit shipped Okay, new the the on you that ASPs on a can And

Christopher Killoy

the thing biggest orders the some on got think that products new you've are there. new I in

expensive the XXXXs gun. look at for got fairly You've it's a if Marlin example, you --

at order got some as attention We quarter actual as on we to because ASP particular up also as things that's mix, over what's QX. pay what's to weekly that focused typically in order look selling the best or basis. a we either what that on We far moderate frankly, a that a shipped mix open time can changed demand. And meet You've lot have two just we every what our our and on production was product we're distributors. the weeks down fourth in that on families more or don't of from

Ryan Meyers

Okay. makes No, sense. that

based of as just product the kind kind largely ASP? the it's So most mix of on drove of there that

Christopher Killoy

Not is. It significant. anything

Ryan Meyers

are for year? of Okay. then, increases the how price good. about guys That thinking you rest sounds this And

Christopher Killoy

mentioned inflationary pressures year it. his of as quarter. Tom prices a and Well remarks we're first open we've then seen Obviously, our to last keeping significantly up lot mind this an in are and of commodity some

to we've that market, we point months. some get X% pretty pricing Each accessories back be across seen going price whether the of about than that do tried those to so the the exception should higher board on three that. I through However, we was there can taken remains much being last see of we've little XX the increases over were But forward. a out, competitive based up out

Ryan Meyers

Thanks, Great. That’s all guys. have. I

Operator

Our next line Instructions] Capital. from Rommel from Aegis of the come Dionisio will [Operator question

begin. may You

Rommel Dionisio

morning. mix. Good I product wanted Thanks. ask about to the

products, particularly sort a strength talking more of are coming to hot you your but the those in now a MSRs or the thing that products that Chris Ruger-specific normalized the capacity categories to that think that the you were guys some that in I pistols you mix seeing level of the search starting is during non-MSR just with high seeing and of new that strong like about. moderate, some are for you is industry the pretty some product that categories? you're are sort guys Thanks. Are industry back referenced also

Christopher Killoy

Rommel. Thanks,

are there for stayed hunting Ruger. trends. has the actually obviously I industry-wide strong for some think, I bolt rifles, mean category

in you're we've the right, seen moderation it's relatively of industry. demand, think particularly and I some where the MSR category the But of strong pistols. centerfire for in -- terms

two seeing couple we've was probably XXXX. some, most gone the Those the in are highs last most coming that and two the we I'll as of accelerated We had the saw years. the say decelerated categories they're that categories off into

Rommel Dionisio

from competitive if to I just thoughts to increases at Okay. up wonder industry Obviously the time, not the promotional you guys want environment the And And I guys parts could also get you and seeing you the to maybe pricing. and question mentioned. that. in front environment. promotional of promotional the moving is Thanks. that. wonder, are same facing. as how with cost just And you're decelerating Obviously, on your the on just what that to competitive prior respond lot follow you a I are somewhat alone demand

Christopher Killoy

not I we past. we mean of good went had minimal with some that We Yes, promotional deals years did first spend advertising outside almost through the have quarter fairly normal and campaigns such. point. our

margins. that been We very any participate to You've are seen QX didn't in some out far. so of that have in and those detrimental haven't of there that programs

just more We're seeing We try are consumer offered and of things the by going detrimental really some we're to which heat the which up. what the discounting promotional our wholesale seeing as summer to seeing is discounting. But that that competitors to again, at have environment competitors, seeing the out and published heavy-duty seeing we're of be some the to product. more our not that more we But retail cut far, not of in being and watching like so we're We're margins. so are promotional level. -- are seeing deals and to rebates months, and have of mindful to some plays move

Rommel Dionisio

Okay. Very so good. Thanks much.

Christopher Killoy

Rommel. Thanks,

Operator

Our from [Operator the Morgan Stanley. question Instructions] go from Hamilton line next Ryan of will

You may begin.

Ryan Hamilton

guys. quarter the still then pretty With through Good as whole know as us morning, was the Could consistent quarter? you or beginning of far the strong cadence you and touch of through tailed-off Morgan the at I the kind it Dempsey. it sometimes quarter? walk of

Christopher Killoy

shift was don't over I Ryan. Thanks, think the dramatic a it quarter.

tapering things saw a the January is We quarter. last end on This fairly how a slight But I like think you things pretty that numbers. the okay. out was We we was year. the QX much definitely and at we do consistent then that's see saw it that. monthly quarters decline quarter don't the And throughout comment -- finished quarter. and of off Some

big up down anyway. wasn't So we a there that trend QX saw in or

Ryan Hamilton

That's great. color. Thanks for the

you it the of more get for or commodity lack something? is can't commodities matter front paying where a it of just On is your just more of availability

Christopher Killoy

up Well, have mix And to line in like products Things steel increases. broad up and particular we're XX%, a a fantastic of struggle as pivot. pretty increase aluminum and chain a nook what supply alloy heavy need. move our we shift go in our last year. we because job terms get steel can seeing If some we little from X% teams can XX%. stainless of cranny as seeing we done with steel. steel over of every doing But Alloy high to we're suppliers stainless

things heavy hits like are prices at look costs well as pretty and as those some nature. commodity when things So that you freight of

running. a So we to They've and have But it. lines just done wonderful us stock and our out job to shout chain keep gals. the a supply keeping watching keeping guys

Ryan Hamilton

far as of are you workforce. Kind in great. -- Where headcount and be? you at as would to That's like your where

Christopher Killoy

to up the can people. that line demand. We're balance got want we're we just for to best over increased slows shy of of to and people some We're about lines down, them of trying as particular have advantage make still engineers. the sure particularly sign to help where take a X,XXX as We we moving

So engineers. in have we're three stable the all fairly for right path But team now help for now. again certainly quantify associates and sell still

Ryan Hamilton

And right. me. And one I have it All missed then may last for here.

at On lower the full are line you production?

Christopher Killoy

Well not on We're our objective a on daily current hitting production. close to fairly basis. our rates

mean them. we days Some

couple the start be XXXX to Some things production XXX. once of got family. those And up models like particularly expand family levels. and ramping that the suddenly And we days in you'll in seeing in to you'll exciting we as target fact beyond get will we've that production be we'll to the next that XXXX beat And them. in into But products mix see weeks the us SBL. some the get we adding the all then the of after our Model that XXXX XXXX

Ryan Hamilton

you. for good the time. very guys. up work got you fantastic your much Yes, so the reviews I have keep early been Thank

Christopher Killoy

Thanks, Ryan.

Operator

remarks. the showing further to any speakers call queue. over in further closing for the the not Chris any to I'm in any queue -- And back I'd participants turn like

Christopher Killoy

shares. Thanks, our please have I are Wednesday, the possible. XXXX in as If Management's pretty to will able us operator. June Annual sure recommendations and Meeting voted as you a to all chance not all X. you review had your so to be statement at Hopefully, detailed do statement are be join Virtual have self-explanatory. proxy soon the proxy hope on and

Proposal specifically. proposal mention is However, I requested report XXXX. the in safety same folks another to shareholder X want X the Proposal do who on

enormous detail ownership we that amount As an great safe, and time explained use and proudly all on report the the responsible firearms. we of spent you do promote may recall in things so of to of

folks While a are satisfied assessment. now impact not seeking these human and are rights so-called

The proxy, needs believe to the in necessary company detriment in our described to that hold we and As do of stock will shareholders. only worth of opposition appropriate Note that or serve is harm our the contained that for ICCR. Interfaith than only all members statement of ICCR stocks one to the the proposal XX not $X,XXX own a submit one shares the agenda. that's At share proposal or about Responsibility to of year Ruger's proposal. stock. members Corporate Ruger $XX on per are sole for less purchase the purpose Center proponents their of the of advancing

ICCR of in fact the agenda. stock own mind not February interest XXX their sponsored who bare that the Ruger's advancing these you of shareholders proposals. In anti-gun folks have assure do our as XX, members own I minimum when can of

thank like in for that you the I our For In customers begins set Ruger you American recommended forth and all Ruger. XX every the opposition of has almost reasons members I Page to to of closing against Board reliable would design, which manufacture X. Ruger's continued Proposal statement, you would very statement, at the team vote proxy hard-working Thank who especially, loyal X,XXX interest factories. thank firearms like our the and much. in day in our And, sell your

Operator

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

now You Everyone day. disconnect. have great may a

Sturm, Ruger & Company (RGR) 5 May 222022 Q1 Earnings call transcript