Sturm, Ruger & Co. Inc. (NYSE:RGR) Q3 2019 Earnings Conference Call - Final Transcript

Nov 08, 2019 • 09:00 am ET

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Sturm, Ruger & Co. Inc. (NYSE:RGR) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2019 Sturm, Ruger Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Mr. Christopher Killoy, President and Chief Executive Officer. Please go ahead, sir.

Executive
Christopher J. Killoy

Good morning, and welcome to the Sturm, Ruger & Company third quarter 2019 conference call.

I would like to ask Patricia Shepard, our Associate General Counsel to read the caution on forward-looking statements. Then, Tom Dineen, our Chief Financial Officer will give an overview of the third quarter financial results, and then I will discuss the state of the market and update you on our operations. And then we'll get to your questions.

Pat, let's get started.

Executive
Patricia Shepard

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

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time-to-time in the Company's SEC filings, including, but not limited to the Company's reports on Form 10-K for the end year ended December 31, 2018, and Form 10-Q for the fiscal quarter ended September 28, 2019. Copies of these documents may be obtained by contacting the Company or the SEC, or on the Company's website at www.ruger.com/corporate, or at the SEC website at sec.gov.

We reference non-GAAP EBITDA. Please note that the reconciliation of GAAP net income to non-GAAP EBITDA can be found in our Form 10-K for the year ended December 31, 2018, and our Form 10-Q for the quarter ended September 28, 2019, which are also are posted on our website. Furthermore, the Company disclaims all responsibility to update forward-looking statements.

Chris?

Executive
Christopher J. Killoy

Thank you, Pat. Now Tom will provide a financial summary of the third quarter. Tom?

Executive
Thomas A. Dineen

Thanks, Chris. For the third quarter of 2019, net sales were $95 million and diluted earnings were $0.27 per share. For the comparable prior-year period, net sales were $114.9 million and diluted earnings were $0.52 per share. For the first nine months of 2019, net sales were at $305.4 million and diluted earnings were $1.37 per share. For the corresponding period in 2018, net sales were $374.5 million and diluted earnings were $2.19 per share.

The reduced profitability in the third quarter and first nine months of 2019 was due primarily to the decrease in our sales and production, which resulted in unfavorable deleveraging of fixed costs, such as depreciation, maintenance, indirect labor, and engineering.

The balance sheet. At September 28, 2019, our cash and short-term investments totaled $137.3 million. Our current ratio was 4.7:1 and we have no debt. At September 28, 2019, stockholders equity totaled $277.6 million, which equates to a book value of $15.91 per share. Cash provided by