Sturm, Ruger & Company Q3 Revenue Dips 35%, Earnings Down 50%

Sturm, Ruger & Co. Logo

SOUTHPORT, Conn.–Sturm, Ruger & Company, Inc. (RGR) announced today that for the third quarter of 2017 the Company reported net sales of $104.8 million and diluted earnings of 53¢ per share, compared with net sales of $161.4 million and diluted earnings of $1.03 per share in the third quarter of 2016.

For the nine months ended September 30, 2017, net sales were $404.0 million and diluted earnings were $2.32 per share. For the corresponding period in 2016, net sales were $502.5 million and diluted earnings were $3.48 per share.

The Company also announced today that its Board of Directors declared a dividend of 21¢ per share for the third quarter for stockholders of record as of November 15, 2017, payable on November 30, 2017. This dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.

Chief Executive Officer Christopher J. Killoy made the following observations related to the Company’s 2017 third quarter performance:

  • In the third quarter of 2017, net sales decreased 35% and earnings per share decreased 50% from the third quarter of 2016. The decrease in earnings is attributable to the sales decline and the unfavorable de-leveraging of fixed manufacturing costs due to the decline in production volumes.
  • Sales of new products, including the Mark IV pistols, the LCP II pistol, and the Precision Rifle, represented $118.8 million or 30% of firearm sales in the first nine months of 2017. New product sales include only major new products that were introduced in the past two years.
  • The estimated unit sell-through of the Company’s products from the independent distributors to retailers decreased 25% and 16% in three and nine months ended September 30, 2017 from the comparable prior year periods. For the same periods, the National Instant Criminal Background Check System background checks (as adjusted by the National Shooting Sports Foundation) decreased 16% and 10%. The decrease in estimated sell-through of the Company’s products from the independent distributors to retailers is attributable to:
    • Decreased overall consumer demand in 2017 due to stronger-than-normal demand during most of 2016, likely bolstered by the political campaigns for the November 2016 elections,
    • Reduced purchasing by retailers in an effort to lower their inventories and generate cash,
    • Aggressive price discounting and lucrative consumer rebates offered by many of our competitors, and
    • Increased industry manufacturing capacity, which exacerbates the above factors.
  • Cash generated from operations during the first nine months of 2017 was $59 million. At September 30, 2017, our cash totaled $45 million. Our current ratio is 2.8 to 1 and we have no debt.
  • In the first nine months of 2017, capital expenditures totaled $13 million. We expect our 2017 capital expenditures to total approximately $30 million.
  • In the first nine months of 2017, the Company returned $85 million to its shareholders through:
    • the payment of $20 million of dividends, and
    • the repurchase of 1.3 million shares of common stock in the open market at an average price of $49.10 per share, for a total of $65 million.
  • At September 30, 2017, stockholders’ equity was $223 million, which equates to a book value of $12.77 per share, of which $2.60 per share is cash.

Today, the Company filed its Quarterly Report on Form 10-Q. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

Tomorrow, November 1, 2017, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the third quarter operating results. Interested parties can access the webcast at Ruger.com/corporate or by dialing 855-871-7398, participant code 99533519.

The Quarterly Report on Form 10-Q is available on the SEC website at www.sec.gov and the Ruger website at Ruger.com/corporate. Investors are urged to read the complete Quarterly Report on Form 10-Q to ensure that they have adequate information to make informed investment judgments.

About Sturm, Ruger & Co., Inc.

Sturm, Ruger & Co., Inc. is one of the nation’s leading manufacturers of rugged, reliable firearms for the commercial sporting market. As a full-line manufacturer of American-made firearms, Ruger offers consumers over 400 variations of more than 30 product lines. For more than 60 years, Ruger has been a model of corporate and community responsibility. Our motto, “Arms Makers for Responsible Citizens®,” echoes the importance of these principles as we work hard to deliver quality and innovative firearms.

The Company may, from time to time, make forward-looking statements and projections concerning future expectations. Such statements are based on current expectations and are subject to certain qualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the need for external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of future firearms control and environmental legislation, and accounting estimates, any one or more of which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.

comments

  1. avatar Mike B says:

    Make a Redhawk .357 8 round revolver with a 4 or 5″ barrel and I’ll buy something from Ruger.

  2. avatar KMc says:

    This is no surprise, if a manufacturer didn’t have a rebate of some sort this past Quarter, sales sucked.
    The consumer now expects such things, will it be the new norm? Inquiring minds want to know.

    1. avatar bryan1980 says:

      Unless you offer something really exclusive that no one else makes, then yes. For the most part, there’s a whole grab bag of other manufacturers that offer the same things that Ruger does (for the most part). If they’re offering rebates, you probably should do the same.

  3. avatar BLoving says:

    I’m sorry, Ruger! I’m doing all I can to buy more of your stuff… it’s just that I can’t seem to stop needing to eat!
    While we’re having this discussion – What would anyone think of a revolving carbine in .357 And .44 magnum based on the Ruger Super Redhawk design? 🤠

    1. avatar tiger says:

      Ala the Rossi Circuit Judge line? Hmmm, maybe.

      1. avatar Joel IV says:

        Exactly, but with quality.

      2. avatar BLAMMO says:

        And they discontinued the .44 magnum, which was the only version that interested me.

    2. avatar TruthTellers says:

      Why would I buy that when I could get a lever action? People have been asking Ruger for a lever gun for a long time, maybe it’s time they finally did it.

      1. Yes, please Ruger, make lever-action rifles or carbines, in all popular calibers including .45 Colt, .44 Magnum, .357 Magnum, 327 Magnum, .41 Magnum, .22 LR, .22 Magnum, 30-30, and (if you can do it) .454 Casull/45 Colt.
        Make it side-ejecting (so it can use optics), and for 44 Magnum PLEASE use the correct twist rate, 1:20, not 1:38 like other makers of lever-guns who want the twist rate to be “historically accurate” even though it’s way too slow to stabilize today’s bullets (such as the Hornady LeveRevolution)! I had a Marlin 1894 in 44 Magnum that I sold because even at 25 yards, Hornady bullets were keyholing into the target sideways due to the Marlin’s slow 1:38 twist rate. Single-shot or bolt-action 44 Magnums always use the correct twist rate of 1:20, so why do Marlin and Henry lever-actions use a twist rate of 1:38 that makes bullets tumble through the air and keyhole?

        1. avatar BLoving says:

          Ruger did make a lever action… briefly.
          It didn’t sell as well as hoped, apparently.
          Even a dedicated Ruger fan like me wasn’t that impressed with it. But by all accounts it was a better-than-decent rifle – just ugly, I guess…

        2. avatar Gov. William J Le Petomane says:

          Ruger didn’t make a TRADITIONAL lever action. It looked like a 10/22 with a lever and took (I believe) one of their trademark rotary magazines. Sometimes reinventing the wheel works, sometimes not so much.

      2. avatar BLAMMO says:

        They’d have an uphill battle beating Henry on price or quality. They’d probably only have a chance appealing to those who insist on a side-loader.

        How about a pump gun that has the best features of the Remmy 870 and Mossy 590? Nah, the last thing the market needs is another pump gun.

  4. avatar WI Patriot says:

    Instead of reinventing the wheel, ruger needs to be more innovative…ruger use to do things than nobody else in the industry was doing, and not half-a$$ed things either, but now they’ve gone mainstream, mostly johnny come lately stuff…it’s really quite sad, to see the very same company that brought us the 10/22, just running around trying to figure out what to come out late with next…

    1. avatar TruthTellers says:

      Doing that “new stuff” or innovative stuff costs money, lots of money. You have to fund an R&D department with design engineers, staff a manufacturing engineer department to tell the design engineers to alter their designs to be able to manufacture it for a profit, prove out the process, test the product, make inevitable changes to the product, then tool up for mass production.

      What innovative stuff do you want Ruger to make that will generate sales? I’ve been thinking Ruger needs to bring back the Model 44 Carbine design and chamber it in .327, .357, .44, and .45 Colt and give us 10 round rotary mags or make it tube fed and make that tube flush with the barrel for max capacity.

    2. avatar Gov. William J Le Petomane says:

      For a large company, SR&Co makes a LOT of stuff that either nobody else makes or almost nobody else does. My last SR&Co purchase was a birdshead SAA in .44mag. NOBODY else makes one of those. No. 1s. Chargers. Mini-14/30s. S&W may make at least as comprehensive of a lineup of DA revolvers, but nobody else offers a lineup of SA and DA revolvers like Ruger. There’s only a couple of ballistic rocks that remain unturned by the company. However, while the boutique items may garner favor from their fans (myself included), they don’t garner a lot of sales. They make about 3K No. 1s every year. How many boutique rifles would they have to make a substantial impact on the bottom line. I look at it as a testament to the company’s commitment to their fans that they continue producing them.

  5. avatar RockThisTown says:

    How is this bad news? $400 million sales over 9 months. The company is operating in the black, with no debt, steady (but acknowledged weaker than last year) sales & a stock dividend declared. Could we see a headline something like, “Ruger Sales Down but Still Strong, Stock Dividend Declared” ?

    The headline above of revenue & earnings dip seems like it’s from CNN.

  6. avatar When Bullets Collide says:

    I suspect a lot of gun industry insiders voted for Hillary. As predictable as the sun rising in the east.

  7. avatar former water walker says:

    Well I’m buying guns and ammo but it ain’t Ruger. Yes the deep discounts(including rebates)others are offering will affect your bottom line. Just saw Remington RP9 for 199 after a $100 rebate on Facebook! Do I want a full-size 18+1 honker? Maybe for THAT price!

  8. avatar Tile Floor says:

    I like their stuff. It is usually solidly made, reliable, and affordable. Is it the best money can buy? Nope, but Ruger has a great value without sacrificing quality.

  9. avatar Proud chicano says:

    They need to be more creative not just follow Savage. They could have used mini 14 mags on their gun site scout for example it would turn some heads.

    1. avatar Joel IV says:

      Or STANAG magazines in their Mini-14, Scout, American Predator, and American Ranch rifles.

  10. avatar Specialist38 says:

    They were able to ride the wave up with effective manufacturing and great customer service.

    I hope they put a little away for the inevitable dip in sales.

    Ruger is solid. They are not going away and i am glad.

    Need a Flattop Sheriffs model Stainless Blackhawk. Ha

  11. avatar TheOtherDavid says:

    My AR 556 had to go back to the factory twice for repairs- the second time because they created a new problem during the first repair.

    My LCP II? Terrific little pistol if it ever fired. Almost every magazine had failures to function of one type or another, after two trips back to the factory for repair they finally just destroyed the pistol and exchanged it for me.

    Senior customer service reps I spoke with in the company said that they recognized that a culture change is needed to get Ruger back to its roots.

    High volume of production is great but quality control issues are plaguing the company right now

    1. avatar TruthTellers says:

      What also is plauging Ruger is paying their machine operators 10.50/hr. At that cost, you’re not getting good skill or labor, you’re getting people who are tired of working at a fast food restaurant and have no skills other than asking, “you want fries with that?”

      An extra 2.50/hr makes a big difference.

      1. avatar KMc says:

        So, another $5K per year suddenly gets you “skilled” labor?
        Not seeing that happen.

        1. avatar Vitsaus says:

          Skill is what you acquire on the job by doing your job, but motivation is what really ensures that you get efficient workers. When the staff is unmotivated, they will not even work up to minimum wage standards. This is why paying people more tends to get loyalty and productivity out of staff. Many companies that pay above industry standards (in other industries) have found this to be the case. There have been numerous reports about such companies, Costco is one of the more famous. If you’re making more at your job, the last thing you want to do is slack off and lose that job because there are plenty of other people who will WANT your job.

        2. avatar KMc says:

          V–my point is that Ruger is not getting much for $10.50 per hour. $13 per hour is still not incentive to work your ass off.

  12. avatar Joel IV says:

    I find Ruger’s 77, Hawkeye, and No.1 line of rifles to be as attractive, as affordable, and as accurate as any out there.

    Their Americans are decent quality for the money and rank up there with any of the Mossbergs or Savage lines. (Cue the guy who tried 4 American rifles with 3 different scopes and 7 types of ammo and couldn’t get better than a 3″ group.)

    Other than their 1911 (which isn’t their design), 22/45 Lite, Security and Speed 6, Vaqueros, and Redhawks, I have never been a fan of their handguns. That’s not to say I found any of them unreliable, it’s just that it seemed form definitely followed function. I do understand this is subjective. If they would make a GOOD LOOKING (think 3rd gen Smith & Wesson automatic sexy) pitol in various sizes, it may open doors for someone who wants modern materials and reliability without the looks of, well…. a Ruger American pistol.

    1. avatar Gov. William J Le Petomane says:

      I have one No. 1 and it’s the one ri fle I’d like to collect several more of.

  13. Ruger listens to their customers and designs great new products — but my complaint is they always come out with a new model RIGHT AFTER I’ve bought the previous version of the gun, argh! They’re very secretive about new products they have in development, so you can end up buying a new Ruger one day, then the next day finding it’s all but obsolete when Ruger brings out the better, IMPROVED version (and in the case of the Ruger American rifles, for HALF THE PRICE of the gun you just bought!)

    Examples:
    1) I bought a Ruger 77/22 bolt-action rifle.
    Shortly thereafter, Ruger came out with the Ruger American Rifle Rimfire, for less than half the price, with a lot more features (3-lug bolt, threaded barrel, fiber-optic front sight, etc.)

    2) I bought a Ruger Redhawk 45 Colt with 4.2″ barrel. It’s a great gun, one of the few double-action 45 Colt revolvers still in production!
    Then two months later, Ruger came out with an improved version of it that can fire both .45 Colt and .45 ACP, is a couple ounces lighter, and has a grip that would fit my hands much better than the old Redhawk grip!

    3) I bought a Ruger 22/45 Lite Mark III.
    Shortly thereafter, Ruger came out with the Mark IV version of it that has no-tool takedown for easy cleaning!

    4) I bought a Ruger American Rifle Ranch 300 Blackout.
    Shortly thereafter, Ruger came out with the Ruger American Rifle Ranch 7.62×39 that takes Mini-30 mags!

    5) I bought a Ruger American Rifle Rimfire with threaded-barrel.
    Shortly thereafter, Ruger came out with the same gun in stainless steel!

    I wish Ruger would announce their new products ahead of time like other companies, to give me some warning not to buy the old version — but that would hurt their sales, obviously, because customers like me would wait for the newer version that has additional features (and is often cheaper).

    Next, I’m expecting Ruger will make versions of their American Rifle that take Mini-14 magazines, thereby making all my old versions obsolete.

    1. avatar PROUD chicano says:

      This is exactly why I’m postponing a ruger purchase.

      1. avatar TruthTellers says:

        It’s why I haven’t bought a .327 revolver yet. Waiting for the LCRx to come out and compare it to the S7 and SP101.

        Rebate might speed up that purchase tho.

  14. avatar TruthTellers says:

    My solutions for this (Ruger people, feel free to take this consultation and not pay me for it)

    1. Rebates.
    It’s holiday season, people will be spending money. How are those Ruger American pistols selling? How about those Mark IV’s you had to recall because you panicked when S&W came out with the Victory, you know, that .22 pistol that’s easy to take down and actually works? How are those Sp101’s selling now that you offer the LCRx? Not well? Give people $50 or $100 for them after a rebate and watch the orders from distributors come flowing in.

    2. Make guns people want
    I like that you guys at Ruger are supporting and expanding the LCRx line, hurry up with the .357 and .327 already. Also, stop it with the doublestack pistols, you’re not going to compete with S&W, Glock, or Sig and you never have been able to. If you really want to, you need to drop the price of the 9E down to $250 street price and come out with a 45E and discontinue the SR line.
    I don’t want to own a Mini-14, at least not in this age of $400 AR’s that are more accurate.
    Make me a Ruger 44 Carbine, make it with a longer tubular magazine and I want it in .327, .357, .44, .45 Colt, and .500 S&W. Can’t do that for a profit? Make a lever action then with a loading gate and keep the cost under $600. If you’re gonna use a polymer stock and forend, $500 or less.

    3. Make your QC better
    I keep reading about issues with Rugers, I’ve had a few oddities with my Rugers. Nothing dealbreaking, but for the large amount of money I paid for it, I expected it to be flawless. Sharp edge on one side of the trigger guard, an issue at the range where I couldn’t pull the hammer back, the DA/SA trigger not being smooth (I felt the trigger on a .357 Redhawk that blew me away how nice it was.) Just… general make what you make now and plan to make in the future better so I don’t have to deal with the BS of calling your cute, but already taken girls in customer service and shipping and signing for return shipping and getting nothing in return for your screw up. At least be like Hi Point who gives you a free magazine when they return their product to you.

  15. avatar HaroId45 says:

    In the last 5 years, I bought 6 Ruger handguns. Four of those had to go back for repairs. All of them had problems out of the box. The guns function after a visit to the factory. So their Customer Service is great but their Quality Control is not.

    1. avatar PROUD chicano says:

      Really? Just about everything I’ve seen from them is remarkably well made.

      1. avatar HaroId45 says:

        Yep. First I bought a Ruger Mark III and the magazine disconnect safety was broken. It came back from the factory perfect.

        Next, I bought a Ruger SR22; it’s been excellent thru hundreds of rounds of cheap Rem. bulk.

        I bought two LCPs (a pink one for her and a black one for me). Mine runs flawlessly but hers fails to load the last round on almost every magazine. Traded for another LCP that does the same thing.

        My LCP II had a problem with the magazine catch ejecting the mag while firing. I even tried one handed, left hand only. It came back and ran flawlessly.

  16. avatar Don from CT says:

    I’ve been a SR shareholder since the 70s when my grandmother gave me some stock. My dad was an auditor of SR back when he worked for Ernst and Ernst. He always made a point of telling me. “The old man hates debt. Sturm Ruger will always fund expansion through operations”.

    The absolute absence of any debt by SR means they can weather any storm.

    Don

  17. avatar kap says:

    found that the 3 used to own American rifles will not feed singles easily, also the bolt faces were straight edged and rough, Bolt face bullet cutout needed to be champhered, did it my self but took so long I traded it for a savage worked out of the box, Receiver bolt kept loosening up on firing, judicious use of red lock tight and torqued fixed that problem!

  18. avatar Gov. William J Le Petomane says:

    Well I did my part and bought a .44mag birdshead Vaquero in Q3. They’re probably going to be disappointed in me for Q4 though.

  19. avatar Cooter E lee says:

    Make the Blackhawk convertible .45acp/.454 Casull instead of .45 long colt.

    Lower prices on mark iv?

  20. avatar Timothy V Noecker says:

    I’m Definitely Interested In The New AR-556 MPR 18″ 5R and RUGER 2-Stage Trigger, Especially At The Price Point They Are Selling It At.

Write a Comment

Your email address will not be published. Required fields are marked *

button to share on facebook
button to tweet
button to share via email