Ruger Announces 4th Quarter Results, Full 2019 Earnings Down on 17% Decline in Sales

Ruger-57 5.7x28mm pistol

Ruger-57 (Jeremy S. for TTAG)

Sturm, Ruger & Company, Inc. (NYSE: RGR) announced today that for 2019 the Company reported net sales of $410.5 million and diluted earnings of $1.82 per share, compared with net sales of $495.6 million and diluted earnings of $2.88 per share in 2018.

For the fourth quarter of 2019, net sales were $105.1 million and diluted earnings were $0.46 per share. For the corresponding period in 2018, net sales were $121.1 million and diluted earnings were $0.69 per share.

The Company also announced today that its Board of Directors declared a dividend of 18¢ per share for the fourth quarter, for shareholders of record as of March 13, 2020, payable on March 27, 2020. 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 commented on the year, “2019 was challenging for the firearms industry as manufacturing overcapacity, excess inventories at all levels of the channel, and a continued softness of demand led to a marketplace saddled with undisciplined discounting, reckless extension of payment terms, and excessive promotions. This left some distributors and manufacturers in its wake. Conversely, our promotional efforts in 2019 were more measured and instead we focused on delivering shareholder value over the long term, including our steadfast commitment to new product development.”

Mr. Killoy continued, “As a consequence, we are well positioned as we head into 2020. The Ruger-57 pistol, which was launched in December, has received an overwhelming reception. We also just launched the latest LCP pistol, the LCP II in .22 LR, which is enjoying strong demand and we look forward to introducing additional new and innovative firearms in 2020. Our financial strength, evidenced by our $165 million of cash and short-term investments, places us in a unique position in our industry from which we can either profitably weather a storm or thrive in a recovering market, always keeping an eye out for any long-term opportunities that may emerge.”

Mr. Killoy made the following additional observations related to the Company’s 2019 performance:

  • In 2019, sales decreased 17% from 2018 and the estimated sell-through of the Company’s products from the independent distributors to retailers decreased 18% from 2018. For the same period, the National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 1%. The greater reduction in the sell-through of the Company’s products relative to adjusted NICS background checks may be attributable to the following:
    • More aggressive promotions, discounts, rebates and the extension of payment terms offered by our competitors,
    • The loss of a formerly significant distributor that ultimately filed for bankruptcy protection in June 2019 and the market disruption caused by the subsequent liquidation of its inventory of Ruger products,
    • The loss of three additional smaller distributors in the second half of 2019,
    • An apparent increase in sales of used firearms at retail, which are captured by adjusted NICS checks, and
    • Decreased retailer inventories as the anticipation of further discounting continued to encourage cautious buying behavior by retailers.
  • New products represented $102.0 million or 26% of firearms sales in 2019. New product sales include only major new products that were introduced in the past two years. In 2019, new products included the Ruger-57, the LCP II in .22 LR, the Wrangler, the Pistol Caliber Carbine, the Precision Rimfire Rifle, the AR pistol, the Security-9 pistol, and the EC9s pistol.
  • In 2019, the Company’s finished goods inventory decreased 12,900 units and distributor inventories of the Company’s products decreased 29,300. In the aggregate, total Company and distributor inventories decreased by 11% in 2019.
  • Cash generated from operations during 2019 was $49.6 million. At December 31, 2019, our cash and short-term investments totaled $165 million. Our current ratio is 4.1 to 1 and we have no debt.
  • In 2019, capital expenditures totaled $20.3 million. We expect our 2020 capital expenditures to total approximately $20 million.
  • In 2019, the Company returned $16.3 million to its shareholders through:
    • the payment of $14.3 million of dividends, and
    • the repurchase of 44,500 shares of its common stock in the open market at an average price of $44.83 per share, for a total of $2 million.
  • At December 31, 2019, stockholders’ equity was $285.5 million, which equates to a book value of $16.05 per share, of which $9.28 per share was cash and short-term investments.

Today, the Company filed its Annual Report on Form 10-K for 2019. The financial statements included in this Annual Report on Form 10-K are attached to this press release. – View Release

Tomorrow, Thursday, February 20, 2020, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the 2019 operating results. Interested parties can access the webcast at Ruger.com/corporate or by dialing 855-871-7398, participant code 3039214.

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

comments

  1. avatar Bob says:

    The Trump Slump is a real thing.

    1. avatar enuf says:

      It’l turn around when he is re-elected and no longer needs to worry about the votes of gun owners. Soon as he turns against us again, back to his lefty roots, the panic buying and hording will find new fuel.

      1. avatar ChoseDeath says:

        @enuf
        Uh huh. And are you going to stick your foot in your mouth and apologize when that doesn’t happen? Or just keep talking?

      2. avatar Dude says:

        Don’t sales usually increase in elections years? It won’t be because people are worried about Trump winning.

      3. avatar Don Ward says:

        Spotted the Libertardian cuck.

        1. avatar Everyday_Carrier says:

          I’m not a leftist. It’s true. Trump doesn’t give a fuck about our 2a… no modern president does. He has made compromises just like all of them. The scariest part about the left and right is your loyalty.

          Our country was built on rebellion. Never forget it, especially when they do, and they have.

    2. avatar Casca says:

      Ruger quality has been slipping for a long time, that’s one factor, but pricing stays high.
      They had some great guns and quit making them because the investors or hedge funds wanted to increase profitability. poorer quality at a higher price, of if it it didn’t give them the margin they demanded get rid of it. .44 mag semi auto carbine comes to mind. On forums the trend is who has the less problems defect with their new guns. They are doing better than Colt was though. The idea of how cheap can we make it and how much can we demand, eventually drives some customers away, as they are unaffordable, to them, and they don’t want misfitted parts, sloppy fi trough edges, sharp edges, no real crown in the barrel, mediocre or rough finishor dull finish, nonuniform chambers and lockup…and if they drop the gun next year in two years you may not be able to get parts ala Colt…so they hold out looking fora better gun.

  2. avatar Jason Statham says:

    Their stock is up right now, I presume because of the dividend announcement and/or the fact that they are still profitable.

    Either way, I keep finding myself buying Ruger because I think they genuinely invest in the civilian market. Love the Mark IV, Single Six, Wrangler, and the new 57 I plan to get. Now about that PCC in 10mm…

    1. avatar uncommon_sense says:

      Jason Statham,

      Not only is Ruger still profitable, they are innovating (not resting on their existing product lines) and they have no debt according to the above information.

      A company which is still selling products, whose revenue exceeds expenses, who has no debt, and is still innovating is an almost guaranteed recipe for success. That is a very good reason to want their stock — which would of course tend to drive up demand and hence prices.

      1. avatar DB Cooper says:

        Sales dropped 17% under Trump’s reign. Imagine what happens if The Dems are in control..

        1. avatar Ray says:

          TAXES and GAS dropped under TRUMPS PRESIDENCY also. Actually gun sales broke records. Many companies to choose from.

        2. avatar Everyday_Carrier says:

          Ray:

          You are talking pennies and considering how it got to where it currently is thanks to Bush, that shit is meaningless. It was lowest in 2016, before Trump, and has been at a 2.75 average since 2010… and that’s a drop to you? When we go back to 2002, then talk that shit, because there is ZERO reason it should have ever got to this point to begin with.

      2. avatar jwtaylor says:

        This. The fundamentals are sound.

        1. Exactly. Their stock is up about 30% in the last six months. The markets are very bullish on Ruger.

      3. avatar Everyday_Carrier says:

        I’m not into stocks, but if you are and some of the people on here pay a lot of attention to detail on that stuff, how is SIG doing? All I see is innovation from them, plus, the government contracts.

    2. avatar M10 says:

      Waiting for a 10mm is the only reason I haven’t bought a 9mm already. Would also love to see a 9 or 10 shot wrangler.

      1. avatar Jeff the Griz says:

        GP100, Blackhawks, Redhawks and SR1911s all come in 10mm. What you waiting for?

        1. avatar Art out West says:

          I think he is talking about 10mm in the carbine context.

          Like everyone else, I keep getting more Rugers. It was two more in 2019, though one was used. I’m doing my part for Ruger.

      2. avatar Gary Moore says:

        Waiting for P C in 44, some bastard stole my Deerslayer in 44. Also a small carry auto in 22 mag, for wife

    3. You are so right, people need to pay attention to today’s World and markets too.

  3. avatar Mike V says:

    Ruger = affordable quality, or value…to me. Hopefully next year is better.

    1. avatar Lost Down South says:

      I want their (yet to decide) wheel gun. Maybe some discounting in the near future?

      1. avatar Ed Schrade says:

        They could improve on their pricing.

  4. avatar cgray says:

    Gun market’s saturated. Everybody who wants them has them, and have noticed that they don’t use them that much.

    1. avatar tsbhoa.p.jr says:

      use them as much as they want to.
      must… have… one… more…

  5. avatar Matt says:

    A big problem for Ruger in my part of the Midwest is its dealings with a chain called Rural King. Ruger only sells through distribution and has no MAP policy for retailers. But they sell to Rural King as a distributor and RK sells them through their stores and RGuns website cheaper than local (and even other larger chains) can buy them from distribution channels. Why would a gun shop want to carry a product that they have to sell at a higher price than their competitors!?
    Another issue is QC. The store I work for sends Ruger firearms back for repair at a far higher rate than any other American manufacturer.
    There are definitely market issues at play, but Ruger is kidding themselves of they want to blame it all on that.

    1. avatar Jason Statham says:

      Matt – what Ruger products is RK undercutting folks on? IIRC they have 10/22s for about $200, and I think the 10/22 Sporter for $300. While these are “best retail” they are similar to a whole host of online sellers, but not crazy cheap.

      Genuinely curious.

      1. avatar Matt says:

        A lot of the pistols like the LC9, LCP, EC 9, etc. Even the rifles like the 10/22 are too narrow a margin if you can get close. Cost on most of those rifles are over 200, while one or two are barely below. Small and medium retailers can’t keep the doors open if they’re only making 15 to 20 bucks on a gun. You’re not making enough to pay for employee time let alone overhead. If you’re a big operation, that kind of margin can make sense.

  6. avatar enuf says:

    Let’s see now… Rugers I have owned or currently own …

    Ruger 10/22, owned it for 48 years now. Darned thing was $49 new at that time, INFLATION!!!
    Ruger Blackhawk, 7.5″ in .45 Colt. Gave that one away to a relative.
    Ruger American Rifle in .30-06
    Ruger American Rifle Rimfire in .22WMR
    Ruger PC Carbine, 9mm, lives in my vehicle.
    Ruger 10/22, given as a Christmas present to a young lady shooter.
    Ruger SR9, my main sidearm for open carry.

    There are other Rugers I want. In no hurry though, letting the Cabelas/BassPro Club Card points collect. Maybe next year for the next buy for me.

    1. avatar ChoseDeath says:

      @enuf

      Let’s see… I currently have an SP101 and GP100 in .327 Federal (god that caliber is awesome), a Super Blackhawk Hunter in .44 Magnum and a Super Blackhawk in .480 Ruger.

      I really need a 10/22 and I want about 4 other revolvers from them. I think they’re my favorite gun company currently. Great value and such wonderful variety and can eat ALL the abuse.

      1. avatar Bitter says:

        Do you reload for the .327 or buy off the shelf?
        I have been kicking around a .327 LCR as I have one in .357 that I carry almost every day and I love the idea of having the extra round.

    2. avatar Art out West says:

      According to https://www.usinflationcalculator.com/
      $49 in 1972 is equivalent to $302 today.
      Bi-Mart has 10/22s for $199 in this week’s ad.

      Gun price inflation has not been bad.

      Compare it to house price, health insurance, or college tuition inflation. That is where most of the inflation happens. All three are a scam. Government and bankster meddling

      Firearms are more free market

  7. avatar GS650G says:

    Looking at their revolvers now. I’ve a Super Redhawk and it is indeed Super. I also have a single six. Ruger makes damn fine revolvers, better value than anyone AFAIAC

  8. avatar uncommon_sense says:

    At the bare minimum, I believe that there will be a nice uptick in new firearm sales in August, September, and October prior to the November general election.

    If Bernie wins the Democrat nomination and polls indicate that he is tied with or could defeat Trump — or if Bloomberg wins the Democrat nomination (who is a legitimate threat regardless of what any polls say) — then I believe the uptick in sales could be pretty significant.

    Needless to say, if the Democrat nominee actually wins the White House in the general election, then I believe there will be a run on firearms and ammunition that will exceed the 2012 and 2013 panic following the Sandy-Hook Elementary School attack.

    1. avatar Ralph says:

      “polls indicate that [Sanders] is tied with or could defeat Trump”

      Polls, if we can trust them, indicate that Sanders leads Trump by 2% — exactly the same that Hillary out-polled Trump in 2016. But Trump won the electoral vote.

      Leftist pollsters are spinning like crazy, but the fact is that California and New York cannot elect a President on their own. If Trump loses the popular vote by only 2%, he wins.

  9. avatar NORDNEG says:

    I like RUGER also. Blue collar worker priced , dependable, lifetime warranty, all the caliber’s a person would want…
    What’s not to like???

  10. avatar former water walker says:

    Ruger won’t be “saved” by 22’s & 5.7.s. Or an oversaturated AR market. When a south American company gets better gun reviews for QC you’re in trouble…

  11. avatar Dude says:

    I’d like to see the numbers on it, but I don’t think their American pistol line was selling as well as they thought it would. This would explain why they suddenly brought back the old SR line. Does anyone have any insight on this?

  12. avatar BusyBeef says:

    The cost of the .327 LCR is TOO DAMNED HIGH

    1. avatar ChoseDeath says:

      Why do you say that bubba? What do you think it’s worth if they don’t change anything? Small DA revolvers aren’t my favorites, so I don’t know what they’re worth. Only one I even have is a Colt Night Cobra.

  13. avatar RedFlagRising says:

    We all need to pitch in and buy 3 more guns we dont use to help Rugers bottom line.

    Meanwhile, anybody willing to pay 200.00 for a LNIB P95?

    Still have the receipt in the box, paid 379.00.

    Because guns are a great investment.

    1. avatar Mike V says:

      Does the p95 have a rail and how many mags?

      1. avatar tsbhoa.p.jr says:

        read it again.
        straight troll.

        1. avatar Mike V says:

          It was worth a shot…

    2. avatar uncommon_sense says:

      RedFlagRising,

      Because guns are a great investment.

      Quality firearms are rock-solid investments over the long haul (assuming that you maintain them in very-good condition). Will firearms appreciate in value faster than the United States stock market? Maybe, maybe not. If you hold onto them long enough, they will appreciate in value.

      The only two ways that I can see the value of quality firearms decreasing is if the price of new firearms of equivalent or better quality somehow decreases significantly or if government bans ownership.

      1. avatar tsbhoa.p.jr says:

        a ban may drive up value as well.

      2. avatar RedFlagRising says:

        So, you are willing to pay 400.00 without the extra mags?

    3. avatar tsbhoa.p.jr says:

      you should have purchased a wamo.

  14. avatar David Bradford says:

    Did what I could for the cause and bought 3 Ruger pistols in the last year and a half. I also have my eye on 2 of their revolvers and the PC Carbine (the plan is currently on hold, as I need to recover financially from ~$1,500 in unexpected car repairs first).

  15. avatar Aven says:

    I think Ruger’s problem is their price point. They make a quality product but competition has come along with more modern equipment that can make firearms cheaper but are still good good quality. I have 2 Ruger products but my recent products have been American made products that are much cheaper and are still more than adequate for their use. My Charter Arms revolver is a good gun that goes a fine job but it is not as good as a Ruger but the price premium of the Ruger is not worth the difference. My most recent purchase is a SCCY 9MM semi-auto that does a fine job but is much cheaper than a Ruger. My Rough Rider is not nearly as good as my Single Six but it is about 1/3 the price. The total cost to me of my SCCY, Rough Rider and Charter Arms all added together is not much more than the cost of my Single Six.

    1. avatar Bitter says:

      I traded an old Ruger for a rough rider 22 WMR/LR. It’s was lily one of my favorite range guns and a gun I love to teach new shooters with. It looks nice and have performed any task I have given it flawlessly.

  16. avatar Matt in Oklahoma says:

    In handguns I’m a Glock guy but they don’t fit everyone. When I take others shopping Ruger is the go to. That SR9 series is great. Many in my family and friends bought them. I bought my daughter the LCP for Christmas for her conceal carry. My son went with them for his AR. My 10-22 will reside with me till I die. I’ll be inheriting a security 6 one day.
    They make long lasting workhorses. I hope they continue to do well.

    1. avatar Bitter says:

      I inherited a six inch security six That’s blued and I have an 2 3/4” stainless steel security six that I carry on occasion. Both great guns that will be used and passed down for several generations.

  17. avatar Like Ruger says:

    I have purchased close to 3 dozen Ruger firearms, and not one has been a disappointment or had any issues. I also influence firearm purchases of friends and others; not one has had a negative experience. Just yesterday a friend specifically mentioned how glad he was that he followed my advice and purchased Rugers. Keep in mind that Ruger is 100% American Made, right down to the raw materials; that is worth something to me (and should be for others). I know people that accidentally caused the problem that they had with a Ruger, called customer service, and a the gun repaired at no charge in less than 2 weeks. Also does not matter if you are the original owner. Who else does that? Quality costs money.

  18. avatar BN says:

    I own I do believe over 25 Ruger firearms and the only gun that I owned by them that I didn’t like was the P97. Every other one is a good gun.

  19. avatar Ralph says:

    I’ll do my part to help Ruger next week when I buy a Ruger Wrangler.

  20. Imagine if all those residents located in “Anti-2nd amendment/Draconian Gun Control states” could readly excise their 2nd Amendment rights. Like most of the TTAG commenters here. Who most likely live in “[email protected]/Free States”. I bet Rugers corporate earnings would be far greater. I know I would. Not in a state ranked no#. 48 by G&A 2015 for worst 2nd Amendment infringements….!

  21. avatar SpeedBump says:

    Excellent time for Ruger and others to catch up on things at home.

    Modernization, streamlining production, new product developments, etc.

    Simply a Trump Slump moment for sure. The advent of the return of a fully Communist Government is probably going to happen in 2024. The ambience within society will likely reveal this around 2023, and the gun markets will one again return to Full Throttle Mode.

    In the meanwhile, Patriots and common non Liberal / Communist citizens should take the opportunity to stock up on things needed, or always wanted. It’s now a Buyers Market for sure.

    Ammo and gun deals are out there like I’ve never seen before. This won’t last forever, take advantage of it while you can.

    What’s really important here is for all people to realize : When feeling threatened by Government, people arm up! When Constitutional Rights are not threatened, People sleep in peace, and the perceived need to prepare for future trouble on the horizon becomes non existant.

    One would think the Communist Anti Gun factions would realize this, and take another less threatning approach to reach their mandated U.N. Agenda goals, but stupid is as stupid does..

    Thank God they remain stupid!

  22. avatar Wallyccspd says:

    I have an almost 40 year relationship with Ruger (and for that matter, S&W, Colt, Rock River, Remington, and about 15 other manufacturers I cant remember now). I used to work for a Gun Shop and sold Ruger.

    I met Bill Ruger in 1986. A very big man in every way.

    I am thrilled with all 46 of my Ruger pistols, revolvers rifles and a red label shotgun that I own. My very first rifle I ever bought was a M77 Varmint in .308 and I still own it. The last Ruger I bought was a 1911. I shoot EIC 22 with my MK IV.

    I met Chris Killoy through a friend and I think highly of him. I think he has done a wonderful job steering the company and will continue to do so.

    Engineering-wise, they finally licked the accuracy problem with their barrels. New modern day Rugers shoot the lights out all day long. My Ruger precision in 22LR puts 5 rounds into a dime at 50 yards without breaking a sweat. About the best I can do. I do not know what to think about the 5.7 yet, but my eyes are open, looking at it. I also want to buy a Wrangler. I am told that they shoot lights out as well. The Pistol/Carbine looks alluring to me. I just have to figure out how to sneak it past the wife!

    The problem with the gun industry in general (from the retailer/manufacturer standpoint) is their product longevity. The darned things last forever. Seemingly no wear-out. And if they last forever, what is the plan to cause people to dump them and buy a new one? What exactly do you do with an old Gun? Throw it in the recycle bin?

    I have a Smith 38 that was built in 1905 that shoots just fine. A 115 year old revolver! It isn’t like computers or TV sets that end up on the curb in 8-10 years and you go back to buy another.

    When CCL came to my State, there was a “bump” in sales. But your average CCL carrier is going to buy 1 gun, 1 holster and a box of ammo and he is done. Same for the Cops. Contrary to popular misconception, most Cops don’t give a darn about guns. It is a tool that they need to carry to do their job. Like a carpenter and his hammer, nothing romantic here.

    Then the Trump-Slump thing. The panic buying was NOT a good thing for the industry. Sales and marketing around a panic is never a good thing. When the retailer sells out and can’t get anything from his Jobbers like Accusport, Jerry’s, etc. what does he do? How does he meet payroll or pay the rent with no new sales/income for want of inventory to feed the need? That killed a lot of Mom and Pop dealers.

    My thoughts anyway.

  23. avatar Stephen Fogg says:

    The decline will be short lived once the campaign gets going and the Democretins come out with all of their gun control plans. If you need an AR or a can buy them now.

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