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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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Ryan Hamilton with Morgan Dempsey. Your line is now open.

Analyst
Ryan Hamilton

Good morning, everyone.

Executive
Christopher J. Killoy

Good morning.

Executive
Thomas A. Dineen

Good morning.

Analyst
Ryan Hamilton

I was wondering if you could maybe give us a little bit more color on the quarter's cadence. What did July look like relative to June and so on? Could you just walk through the quarter?

Executive
Christopher J. Killoy

Well, July was very slow, and candidly, that's when we have our one-week shutdown for maintenance in all the factories. And then throughout the quarter, we saw things pick up, which is somewhat typical given the fall hunting season. So the normal seasonality set in, and September was a much better than July and somewhat better than August.

Analyst
Ryan Hamilton

Excellent. You touched a little bit on headcount. What are your shifts looking like at the three plants?

Executive
Christopher J. Killoy

Well, with the super sale concept, some of the sales are running as much as what we call 24/7 in the sense they're working six or seven different shifts to overlap into the weekend. Others are just working on first shift. So it really depends on the individual product line and the sales.

Analyst
Ryan Hamilton

Okay. And you talked a little bit about attrition. Are your engineer teams staffed close to historic levels and where you're comfortable with?

Executive
Christopher J. Killoy

Yes. Primarily when I was talking about attrition, referring to our hourly workforce, direct labor force at the factories, our engineering teams are fully engaged and very stable candidly. And we do a lot more sharing of engineering resources now between the three factories.

Analyst
Ryan Hamilton

Okay. Are you seeing any kind of shortages as far as people -- you know, talent that you can't find?

Executive
Christopher J. Killoy

No, I don't think that's the case. We're just trying to be cautious as we hire and just make sure we're smart as we move forward throughout the year. And we know the firearms industry has a lot of cyclicality in it, and so we try to manage through both the highs and the lows in a responsible fashion.

Analyst
Ryan Hamilton

Absolutely. I've got one more and then I'll jump in line. How about commodities? Are you seeing any notable changes or concerns in any of the materials you guys use?

Executive
Christopher J. Killoy

Not really. Nothing that's impacting production or cost. Some time ago, I commented on the steel tariffs that didn't affect us directly in that we use only domestic produced steel. But the issue was the tightening of supply and increased costs from our domestic suppliers, that seems to have settled down.

Analyst
Ryan Hamilton

Okay, sounds good. Thank you very much.

Operator
Operator

Our next question comes from Brian Rafn with Morgan Dempsey. Your line is now open.

Analyst
Brian Rafn

Hey, guys, how you're doing?

Executive
Christopher J. Killoy

Good, Brian.

Analyst
Brian Rafn

Hey, talk a little bit about -- you talked a little bit about the cadence. What is your sense of sell-through kind of pre-hunting for the rifle long gun market, be it a bolt-action or MSR?

Executive
Christopher J. Killoy

Well, in the -- certainly, in the bolt-action category, we saw some very solid sales, with -- particularly with our