• Net Sales (2024): $536 million
• Diluted Earnings Per Share (2024): $1.77
• Net Sales (Q4 2024): $146 million
• Diluted Earnings Per Share (Q4 2024): $0.62
• Gross Margin (2024): 21%
• Cash and Short-term Investments (Dec 30, 2024): $105 million
• Current Ratio (Dec 30, 2024): 4.2 to 1
• Stockholders' Equity: $320 million
• Book Value Per Share: $19.03
• Cash from Operations (2024): $56 million
• Capital Expenditures (2024): $21 million
• Share Repurchase (2024): 835,000 shares at $41.19 per share
• Quarterly Dividend Declared: $0.24 per share
• New Product Sales (2024): $159 million, 32% of firearm sales

• Warning! GuruFocus has detected 2 Warning Signs with RGR.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sturm Ruger & Co Inc (NYSE:RGR) reported a significant improvement in fourth-quarter results with a 19% increase in sales and more than doubled profitability compared to the third quarter.
• The company maintained a strong debt-free balance sheet with $120 million in cash and short-term investments.
• New product sales were robust, totaling $159 million or 32% of firearm sales in 2024, driven by successful launches like the RXM 9mm pistol.
• Sturm Ruger & Co Inc (NYSE:RGR) celebrated its 75th anniversary with a series of successful events and product launches, enhancing brand recognition and customer engagement.
• The company returned $46 million to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value.

Negative Points

• Net sales and diluted earnings per share declined in 2024 compared to 2023, with net sales dropping from $544 million to $536 million and earnings per share decreasing from $2.71 to $1.77.
• Gross margin decreased from 25% to 21% due to unfavorable deleveraging of fixed costs, inflationary pressures, and a shift in product mix towards lower-margin products.
• The company faced challenges with decreased production and sales, impacting overall profitability.
• Adjusted NICS background checks, a proxy for consumer purchase activity, decreased, indicating potential challenges in consumer demand.
• The company remains cautious about the banking situation in the US, reflecting concerns over financial stability and potential impacts on operations.

Q & A Highlights

Q: Can you discuss the impact of the RXM launch during the quarter? A: The RXM had a significant impact in December. We preplanned the launch and conducted retailer summits throughout 2024 to introduce the RXM under NDA and solicit pre-orders. This ensured a smooth launch with products available at both wholesale and retail levels. The launch was the most significant we've had, with continued strong sales following the initial release. Christopher Killoy, President, CEO, COO, Director

Q: Does the RXM platform allow for future product variations, and how is the partnership with Magpul progressing? A: Yes, the RXM platform allows for future variations, including different frame sizes and grip colors. Our collaboration with Magpul has been strong, and we plan to continue working together on new products. We have meetings scheduled to discuss further collaborations. Christopher Killoy, President, CEO, COO, Director

Q: Are there any new uses of cash planned for the next year, and what is your approach to share repurchases? A: We remain open to special dividends and share repurchases. We maintain a conservative cash balance due to past banking issues and are cautious about the banking situation. Our priority is funding business operations, investing in new products, and considering strategic acquisitions. If these are not viable, we return cash to shareholders through dividends or buybacks. Christopher Killoy, President, CEO, COO, Director

Q: Can you provide more details on the trends affecting gross margins, particularly with new products? A: The 75th anniversary models were priced competitively, which impacted our product mix and gross margins. Despite this, they were successful and aligned with our strategy, avoiding inventory disruptions at retail and distributor levels. Christopher Killoy, President, CEO, COO, Director

Q: What are your thoughts on the transition to the new CEO, Todd Sieffert? A: Todd Sieffert will become President and CEO on March 1. He has already engaged with employees and customers, and I am confident in his ability to continue delivering innovative products and shareholder value. I will support him and the team as a board member. Christopher Killoy, President, CEO, COO, Director

For the complete transcript of the earnings call, please refer to the full earnings call transcript.