RGR - Earnings call transcript Q2 2024 | Sturm, Ruger & Company, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Sturm Ruger earnings conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chris Killoy, President and CEO. Please go ahead.

Christopher Killoy

Good morning, and welcome to Sturm, Ruger & Company's second quarter 2024 conference call. our statements. Counsel, Shepard, caution read Patricia forward-looking on ask Deputy to General the I'll our Financial results, Dineen, market. After the will Tom Chief our that, second overview give discuss your quarter of we'll an get XXXX questions. and financial operations and to I Officer, then the will then Pat?

Patricia Shepard

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

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

Christopher Killoy

Thank you, Pat.

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

Thomas Dineen

Thanks, Chris.

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

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

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

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

profitability reduction reduction quarter despite as the investments the million. resulting the quarter a from in notwithstanding we cash second first reduction force sales, our headcount, production end short-term increased improved we implemented $XXX XX%, and quarter. At the Our XX, in the in of June totaled at XXXX, first from

cash value market year. At our of short-term Our short-term a invested company investments the and Treasury fund in X, invests $XXX current the and which XXXX, million expenditures. book investments. In equity XXXX, United are in $X.XX United of had instruments, we We exclusively June was from which Treasury money that of XX, of in ratio into $XX.X reinvested of form X.X we X generated operations. was States within mature equates in million, million of $XX.X debt. was bills the per share, capital States to the to half a that first which back cash $XX.XX the Stockholders' no and

at the of open market related to repurchase million million exciting an of Thus $XX.X returned million and share of of shareholders we $XX.XX the as an XXXX, dividends average upgrades our payment the second the far half of total We end we million additional XXX,XXX through equipment $X.X our total expect in of of to stock for of price a shares the quarterly the some our facilities. In of per manufacturing in $X.X price our first $XX.X of our for the $XX will shares, quarter, to per to of repurchasing by Since XXX,XXX repurchased more $XX.X share total of of million. product expenditures have an price XXX,XXX our than average new an and shares common per X% year, stock $XX.XX the outstanding capital the to we XXXX, million. approximately shareholders at returned common of beginning XXXX at share. $XX.XX our introductions, of a improvements shares average

remains million. balance cash current above Our $XXX

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

of is our As a therefore, quarterly reminder, quarter-to-quarter. varies and dividend XX% approximately net income,

our allows shareholders Our to variable our with provide returns Chris? sheet, dividend emerge. That's consistently our opportunities second debt-free for balance to financial the and capitalize that ability us quarter. on without strategy, strong coupled sacrificing update the continually to

Christopher Killoy

in demand consistency for We of products with quarter, the year. in Tom. firearms were market despite in consumer last our many second demand of Thanks, the pleased the from decline the

many which first of the unit our On X% the the to the the of from our introduced to products, prior of compared retailers of distributors sell-through half last estimated increased both independent second and year. year, were these strength quarter XXXX in products

and as X% Marlin decreased respectively. and products by Carbine LC chambered Rifle Shooting drove rifles, National American checks, family the II sell-through adjusted the same rifles, Sports the of Dark the rifles, Series NICS lever-action that lever-action For the XXX background X%, include distributor in.XX Generation XXXX Recently-introduced Auto. period, Foundation, Marlin

decreased the products MAX of Consequently, units, our sales. Strong Anniversary and rifle inventories with the helped sell-through the the first goods outpaced the demand distribution the also at in of during pull-through XX,XXX warehouses, XXth goods half in over channel the XX,XXX products year, last our and stock in at time pistol, units our products levels. Additionally, Ruger those inventory finished of production rifles, drive to distributors. kept XXX,XXX XX/XX XXth finished the year. Target the demand, And this IV for XXth and LCP side-folding healthy Anniversary pistol distributors' units of Mark Anniversary Ruger compared have Mini-XX stronger inventories

leverage impact products engineering increase to manufacturing fixed priority. new remains the As us of margins. Designing, especially begin these help our innovative Increased in production and to our mentioned. production new such, will we favorably products our to inventories, second for the and plan continuing year on replenish costs half the just our

sales New the firearm XXXX. or in product $XX totaled of XX% million half sales of first

in were past major introduced New products sales years. new the product include that X only

we add addition, exciting year. our and flexibility in of another distributor-exclusive firearms offerings greater force We half year. Earlier and in product extensions efficiency, year, launching product we business organization. line and the look to second every this and In some throughout derivatives implemented of this of new forward more reduction to achieve our a our to aspects productivity reorganized dozens

benefits actions. the realize to increased in second starting reduction from are quarter XX% these Despite the quarter. headcount, of the first production We

reduce additional from goal business. We currently part are the eliminate we shareholder expect and to opportunities we in every our or focused inefficiencies on creating of improvements to We the pursuing, continue remain of initiatives look further for value. long-term

sales distributors Lever and we the current to II recently second the benefit long-term invest Our Year, has of Operator, of promotion Year, have strategy in disciplined products both and and Year, the enhances announced essential leadership accolades performance in pricing the are confidently long-term volatile XXXX; quarter our many consistency success of Dark innovative may Gen throughout including promotes Allowing High the firearms awards to our Rifle recognized of and question? the Model Marlin not instead market. The but may industry first inventory XXXX, Ruger's retailers in.XX channel. of our profitability, is LC the and the independent Industry the and always in period with distribution the Gun Auto; Choice Ruger American Awards Carbine XXXX. Rifle Carbine Ranch. Those Series Overall the the of for: highlights and

Operator

Our Mark at question Lake Street. Smith comes [Operator from first Instructions]

Mark Smith

really around question first -- ASPs. is question My

backlog Or closer As ASP we lever-action rifles you kind we can kind get of look give between levels. we're at between on versus us kind Is us at those of the built of fall? X the is high very seeing shipped that in anything units numbers? that into backlog so the this of walk more in the maybe difference difference through backlog, kind ASPs as those move to Marlin

Christopher Killoy

Yes. Good it's on heavy What -- Mark. now, Marlin. typically that backlog question, is right

rifles Ruger than quite at slightly have also are Gen in point Is. American a Generation there II a the higher that price We few

the say, I'll versus on between difference backlog which orders number the of what's incoming Anniversary may makes that lot the XXth So reflect, include a up, what models.

Mark Smith

we that see out maybe over or quarter, demand are you feel this last think strong on shipping do items that Super you're units then, during maybe that continuing Okay. good the items pretty ones or shipped, about as the Wrangler Or to is And we the or lower-priced some -- something that quarter? about of and produced were mix shipped Security-XXX? were still

Christopher Killoy

very is strong. mix The

of However, those guns. Anniversary biased with some to it XXth lower those points is price

we didn't was, of about of to One negatively lot talked or activity things discounting a in engage the impact margins. gross promotional we

market They sell. things model, Mark the all sure models, build into to priced -- XX/XX, a that commemorative, to Anniversary some to go sharply were going were the MAX, XXth at of XXth those with priced Anniversary However, going this point. will IV make those stale XXth pretty LCP you're

So at we are with retailers price, the our you wanted those, a to wholesalers, make lower make the a why and those part users. and you got we end want of move strategy, and that's bit can little sure both of to sure that's velocity our

Mark Smith

feel this about in you of couple margins, I did of of that around earlier seeing question the benefit guidance and maybe margin and of and centerfire work but cutting guys on some second my rifles, is, next as you from give we cuts building kind you maybe other think kind more the impact and the next costs? we how some margins do And shift half backlog and also about work maybe on margin, Marlin of don't the guys quarters, year Okay. mix the these shipping as know through of

Christopher Killoy

think there I the on shift. may some be mix Yes,

our undertaken, costs terms some we cost improvements numbers. initiatives of will well the reductions in performance as and take of the as up driven more fixed likely be it's production think we've I by improvement of as some margin deleveraging

the we was in think to it the noted, Tom back XX% up up were expect QX, in of I we be again up production half and -- year. As

Mark Smith

demand? saw for saw if demand and can curious, you we July, can we out retailers? outlook think from seen Chris, think but kind mix of if give that of yet, I around Curious any Okay. kind firearm heard about question a primarily the you the events distributors we what numbers mid-month me, around as And give just news thoughts of kind haven't your of come and and demand. in you and last for firearms us into jump July Or

Christopher Killoy

did news we period large, we look and and don't much we at just was well, that pretty what level. of Alabama the promotion major at short was drove items hard-to-get down perfectly be July any in is past And July, items, demand related And was retail I pretty their to pretty one still slow continued in lower-priced to I that when hurting. saw our overall for items; at items. honest. while a think and By moving in this lower-priced was jump the our cycle customer the the weekend. retailers minor, core

So much there's only and it. out, firearms I again, partially credit that's to nature on industry. comes back We're one of driving when woman into card July And can is think nature think seasonal -- man I the historically. that or is can July our so months toughest card if and much a the the month the and And for buy. business. cyclical And gun of a maxed typically store is tough that the so they put they

Mark Smith

I'll maybe in more. And squeeze Okay. one

is industry the not it a Just get guys you in historical as as year? there this and safe big we people, ramp to the you talking are presidential assume into closer out election expecting to that are

Christopher Killoy

ready I We're expect. know to way. question. don't either Good what

on we Our production to what products based in for new the is going moving have pipeline. forward be

production year to last we're it is So in there that. unexpected at time, thing, than have regardless. be an inventory, increasing distributors we've still to It's demand, inventory. which this got inventory if is a going healthy lower our spike support And there's but was

again, not comes. be planning on it for So we're banking ready it we'll if or on it, but it

Operator

question Rommel Dionisio from Capital. next Aegis Our at comes

Rommel Dionisio

overall forward industry but of you enter maybe kind slowing set bounce-back? do XXXX, for waiting the the a -- timing product Chris, an we cadence to as think here think you launches, the product certainly new Does you while, quarters? of think that as how we and in cause about do about about of the and think difficult right challenging looking some half to environment kind down year, for a over kind you're about this you -- have cadence new now. the of few of that. you you in Or the But next of introductions new as product to these industry launches back alluded

Christopher Killoy

we a stream [ new of we've don't drive to that coming. have new Thanks, product let got ]. thinking products our know Typically, We Rommel. steady

to them Some And hits. product through candidly, takes of products be the trying always difficult. work you'd quick into that time always it and can several years longer short getting actual than almost are initiative take to market. is new any But -- like. pretty Others

of kind time it trying to with closely. if it's you're So fraught peril too

as certainly going hold with waiting new it as we're fast it's of about. either When the we that cool we've in We've to got to there. ready and anything else. for in inventory, a get go And out to on the anything things can So going market going products. not a we're off coming the we're we're again, got shift couple fall excited or

announce know available unlike even Ruger, distributors now before it. we'd people a right that retailers we about product, have at most think ideally either or the some customer like hears when to folks, I in it

going plan So we go our be forward. that's as to

Operator

I'm at you. showing Thank would now to remarks. I turn no it like over closing back further for this Chris time. to questions

Christopher Killoy

thank like and rugged, their hardworking and year. importantly, team for and for you. thank our of call throughout of investment continued in our X,XXX to firearms attending In sell our company. customers this loyal you all shareholders most to Ruger members build closing, reliable morning our And thank like the who design, the Thank our I'd I'd

Operator

This participation the does Thank in program. you for conference. your today's conclude

now disconnect. may You

Sturm, Ruger & Company (RGR) 1 Aug 242024 Q2 Earnings call transcript