Sturm, Ruger & Company, Inc. · NYSE:RGR
Sturm, Ruger & — Shareholder Meeting (April 2013)
75 slides from Sturm, Ruger &'s shareholder meeting presentation, Apr 30, 2013
Slide 1: Ruger 2013 Annual Meeting
RUGER 2013 Annual Meeting ARMS MAKERS FOR RESPONSIBLE CITIZEN S®
Slide 2: Caution: Forward Looking Statements
Statements made in the course of this meeting that state the Company’s or Management’s intentions, hopes, beliefs, 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 suc
Slide 3: Overview
Overview
Slide 4: Investment Highlights
Investment Highlights • 64 years as one of the world’s leading firearms brands. • Experienced and engaged Board of Directors. • Strong management team. • Strong market position in rifles, revolvers and pistols . • We continue to outpace growth in the industry (NICs). • Strong balance sheet. • Improv
Slide 5: Company Profile
• Trailing 12 - months ending March 30, 2013: • Sales: $535 M illion , Operating Profit: 23%, EPS : $4.01 • Manufacturing facilities in Newport, NH and Prescott, AZ. • 1,500 non - union employees, plus 600 temporary employees. • Investment castings division . • 2 - step distribution, selling to 14 w
Slide 6: Legislative Environment
Legislative Environment
Slide 7: Legislative Environment
Legislative Environment ARMS MAKERS FOR RESPONSIBLE CITIZENS® RUGER
Slide 8: New, Pending & Proposed State Laws
New, Pending & Proposed State Laws
Slide 9: Protect Your Rights Campaign
Protect Your Rights Campaign
Slide 10: Protect Your Rights Campaign
Protect Your Rights Campaign
Slide 11: Protect Your Rights Campaign
Protect Your Rights Campaign • 3 Simple Steps • 1 - 2 Minutes of Time • Sends 8 - 16 Emails Per Visitor
Slide 12: Financial & Operational Highlights
Financial e& Operational Highlights
Slide 13: Year Consolidated Operating Results
5 - Year Consolidated Operating Results
Slide 14: Consolidated Operating Results (in Millions, except EPS)
Consolidated Operating Results (in Millions, except EPS)
Slide 15: Five-Year Return
5 - Year Return $0 $100 $200 $300 $400 $500 $600 $700 2007 2008 2009 2010 2011 2012 Source : Value Line Publishing LLC: Factual material is obtained from sources believed to be reliable, but the publisher is not responsible for any errors or omissions contained herein. Assumes $100 invested at the c
Slide 16: 2012 Performance Indicators
2012 Performance Indicators Source : Russell 2000 and S&P 500 results are calculated with data available on March 5, 2013, as published by Bloomberg L.P.
Slide 17: Return on Shareholders' Equity
Return on Shareholders’ Equity (in Millions) 0% 20% 40% 60% 80% 100% 120% $0 $20 $40 $60 $80 $100 $120 $140 2012 2011 2010 2009 2008 2007 2006 $71 $40 Net Income
Slide 18: Return on Shareholders' Equity
Return on Shareholders’ Equity (in Millions) 0% 20% 40% 60% 80% 100% 120% $0 $20 $40 $60 $80 $100 $120 $140 $116 $126 2012 2011 2010 2009 2008 2007 2006 Net Income Equity
Slide 19: Return on Shareholders' Equity
Return on Shareholders’ Equity (in Millions ) 0% 20% 40% 60% 80% 100% 120% $0 $20 $40 $60 $80 $100 $120 $140 61% 2012 2011 2010 2009 2008 2007 2006 Net Income Equity ROE%
Slide 20: Return on Shareholders' Equity
Return on Shareholders’ Equity (in Millions ) 0% 20% 40% 60% 80% 100% 120% $0 $20 $40 $60 $80 $100 $120 $140 83% 2012 2011 2010 2009 2008 2007 2006 61% Net Income Equity ROE% ROE% Adjusted for Cash
Slide 21: Market Conditions
Market Conditions
Slide 22: Estimated Distributor Sell-Through
- 100 200 300 400 500 600 Estimated Distributor Sell - Through ( in Thousands of Units ) 2012 2011 2010 2009 2008 2007 2013
Slide 23: Bookings & Distributor Sell-Through
- 200 400 600 800 1,000 1,200 1,400 Bookings & Distributor Sell - Through (in Thousands of Units ) Bookings Sell - Through 2012 2011 2010 2009 2008 2007 2013 Q4 2011 Q1 2012 Bookings 452,300 1,200,100 Production 302,000 379,000 Sell - Through 291,800 460,800 Q4 2012 Q1 2013 Bookings 1,069,200 1,067,
Slide 24: Trends in Retail Demand
Trends in Retail Demand (in Thousands) The adjusted National Instant Criminal Background Check System data presented above was adjusted by the National Shooting Sports Foundation to eliminate background checks associated with permit checks rather than firearm sales. 400 600 800 1,000 1,200 1,400 1,6
Slide 25: Trends in Retail Demand
Trends in Retail Demand (in Thousands) The adjusted National Instant Criminal Background Check System data presented above was adjusted by the National Shooting Sports Foundation to eliminate background checks associated with permit checks rather than firearm sales. 400 600 800 1,000 1,200 1,400 1,6
Slide 26: Market Share Movement
Market Share Movement Product Category 2010 2011 Revolvers: • Single - Action Maintained Maintained • Double - Action Maintained Gained Pistols: • Rimfire Maintained Maintained • Centerfire Full - Size Maintained Gained • Centerfire Compact Gained Gained • 1911 Gained Gained Rifles: • Mini - 14 Rifl
Slide 27: Market Share Movement
Market Share Movement Product Category 2010 2011 2012 Revolvers: • Single - Action Maintained Maintained Maintained • Double - Action Maintained Gained Gained Pistols: • Rimfire Maintained Maintained Gained • Centerfire Full - Size Maintained Gained Maintained • Centerfire Compact Gained Gained Main
Slide 28: New Product Development
New Product Development
Slide 29: New Product Impact
$- $100 $200 $300 $400 $500 $600 2010 2011 2012 New Product Impact ( in Millions ) New Products 38% 30% 25% Mature Products $485 $324 $252
Slide 30: New Product Impact
$0 $20 $40 $60 $80 $100 $120 $140 $160 Q1 2012 Q1 2013 New Products Mature Products 35 % 37% $153 $111 New Product Impact ( in Millions )
Slide 31: Highlighted New Products: 2012 & YTD 2013
3 New Platform Products Ruger American Rifle / SR22 / SR45 16 New Product Derivatives Including the 22/45 Lite / 10/22 Takedown / LC380 / SR1911 Commander - Style / Ruger Muzzle Brake System 59 Distributor Specials Including the NRA LC9 / Shopkeeper’s Bearcat / USA 10/22 Takedown / Purple LCP, LC9 &
Slide 32: New Products
New Products RUGGED, RELIABLE FIREARMS ® RUGER
Slide 33: The Ruger American Rifle
The Ruger American Rifle’ now available in compact models and additional calibers.
Slide 34: The Ruger 10/22 Takedown
The Ruger: 10/22 Takedown: now available in satin black with threaded barrel and flash suppressor. 0/22 @ RUGER
Slide 35: Ruger Guide Gun with Muzzle Brake System
The Ruger’ Guide Gun rifles with Ruger: Muzzle Brake System. THE RUGER® MUZZLE BRAKE SYSTEM: mo Includes a removable, radial-port muzzle brake that significantly reduces felt recol. For times v sep TEgEGS! the brake is not preferred, it may be replaced by the included dynamically-matched muzzle ec M
Slide 36: Ruger M77 Hawkeye Magnum Hunter & African
The Ruger? M77° Hawkeye° Magnum Hunter & African rifles with Ruger: Muzzle Brake System. een THE RUGER ~ M77’ HAWKEYE MAGNUM HUNTER THE RUGER M77 HAWKEYE AFRICAN @ RUGER
Slide 37: The Ruger Scout Rifle
The Ruger’ Scout Rifle, now available in stainless steel. THE RUGER GUNSITE @ SCOUT RIFLE RUGER
Slide 38: The Ruger SR-556VT
THE RUGER _ SR-SS6VT yr @ RUGER
Slide 39: The Ruger 10/22 Carbine
The Ruger’ 10/22 Carbine now available in blued finish with LaserMax Laser. pr THE RUGER’ 10/22° CARBINE RUGER
Slide 40: Ruger Rapid Deploy Sights
RUGER RAPID DEPLOY SIGHTS RUGER® SR-22° RIFLE WITH RUGER® RAPID DEPLOY SIGHTS RUGER® SR-SS6E° WITH RUGER® RAPID DEPLOY SIGHTS RUGER
Slide 41: The Ruger LCR Line of Revolvers
The Ruger’ LCR’ line of revolvers now includes a .22 Magnum model. RUGER TLCH
Slide 42: The Ruger SR1911
The Ruger’ SR1911° now available in a commander-style model. P= ; RUGER
Slide 43: The Ruger SR-Series of Pistols
The Ruger’ SR-Series of pistols now includes the SR45" model.
Slide 44: Ruger Lightweight Compact Pistol Line
The popular Ruger: Lightweight Compact Pistol line is expanded with the new LC380" model. _
Slide 45: The Ruger SR22 Pistol
The Ruger SR22’ Pistol now offered in a silver anodized slide model & a threaded barrel model.
Slide 46: The Ruger 22/45 Lite
The Ruger 22/45 Lite’ now with a black anodized finish and new fluting pattern for 2013.
Slide 47: Recognition & Media Coverage
Recognition & Media Coverage ® RUGER
Slide 48: Awards & Recognition
Awards & Recognition g% © 2 GANDER«: Wortp’s Foremost OutrFitTeR WE LIVE OUTDOORS: VENDOR OF THE YEAR HARDLINES VENDOR OF THE YEAR WINTER, 2013 SPRING, 2012 3 RA \s NRA GOLDEN BULLSEYE AWARD AMERICAN RIFLEMAN "RIFLE OF THE YEAR", 2013 x RUGER
Slide 49: Editorial Coverage
Editorial Coverage NEW! GUIDE GUN IS SERIOUS BUSINESS THE OOTIN SMM AMERICAS FAVORITE BEER RIFLE ‘ADU OF DRESsED-UP DOUBLE ACTIONS saases Move 42 & 24 COMBNATION GUNS NEW AMMUNITION FoR 2015
Slide 50: Editorial Coverage
Editorial Coverage PROBLEM SOLVING FOR GUNFIGHTERS House Clearing GO-TO COMPACT J wenusne RANGE SF vequinements Fer tnezve rams ‘OUT OF DARKNESS
Slide 51: Editorial Coverage
Editorial Coverage SEES | GUTHRIE: sta uP FR TH 2
Slide 52: Web Editorial Coverage
Web Editorial Coverage
Slide 53: Social Media Presence
Social Media Presence Gun rights are under attack. We, the sient mao, need to speak up now and make sure our voice i heard to protec our rights.
Slide 54: Million Gun Challenge
MILLION GUN CHALLENGE | 1,253,700 Firearms ) RUGGED, RELIABLE FIREARMS
Slide 55: Million Gun Challenge
MILLION GUN CHALLENGE
Slide 56: Liquidity
Liquidity
Slide 57: Inventory Reduction
Inventory Reduction (in Millions) - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 Raw Material & WIP
Slide 58: Inventory Reduction
Inventory Reduction (in Millions) - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 Raw Material & WIP Finished Goods
Slide 59: Inventory Reduction
Inventory Reduction (in Millions) - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 Raw Material & WIP Finished Goods Inventory Turns Turns
Slide 60: Inventory Reduction
Inventory Reduction (in Millions) - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 $- $20 $40 $60 $80 $100 $120 2005 2006 2007 2008 2009 2010 2011 2012 If inventory turns had not improv ed in 2012 , inventory would have been $15 million greater than 2011. Raw Material & WIP Finished Goods Inventory Turns Inventory Avo
Slide 61: Finished Goods Inventory
Finished Goods Inventory (in Thousands of Units ) - 20 40 60 80 100 120 140 160 2006 2007 2008 2009 2010 2011 2012 2013 Ruger 16,900 Distributors 47,300
Slide 62: Distributor Inventory Turns
- 5 10 15 20 25 30 35 Distributor Inventory Turns 2012 2011 2010 2009 2008 2007 2006 2013 If distributor inventory turns were in the range of 6 - 8, then distributor inventory would be between 250,000 - 300,000 units.
Slide 63: 2012 Capital Allocation
2012 Capital Allocation ( in Millions) Capital Expenditures $27 Regular Dividend $25 Special Dividend $87
Slide 64: 2012 Capital Expenditures
$- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 2008 2009 2010 2011 2012 2012 Capital Expenditures ( in Millions) Capital Expenditure Operating Income 70% 31% 45% 35% 25% Our investment in capital equipment has allowed us to increase our production by a compounded annual rate of 30% over the past 5 years .
Slide 65: Facility Search
Facility Search • Active search for a third manufacturing facility ( approximately 250,000 sq. ft.) is on - going. • Need for additional manufacturing space is new product driven, not unit volume driven. • Looking for a community that supports the 2 nd Amendment and has a skilled workforce. • Three
Slide 66: State Income Tax Breakdown
State Income Tax Breakdown $92.7 Million Paid in 2012 Taxes ( in Millions) Federal Excise $43.7 Federal Income $34.6 State Income $7.1 Payroll $6.8 Other $0.5 New Hampshire $4.4 % $ 4.7% Arizona $1.5 % $ 1.6% Connecticut $0.25 % $ 0.3% 5 All Other $1.0 % $ 1.1%
Slide 67: Variable Quarterly Dividend
Variable Quarterly Dividend ( in Thousands) $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2009 2010 2011 2012 2013 40% of EPS 25% of EPS
Slide 68: Shareholder Return
Shareholder Return Six years ago we told you: “The Company will use its cash to enhance shareholder value, or it will be returned to the shareholders.”
Slide 69: Shareholder Return
Since 2007, we returned $178 million to our shareholders: • Stock Buyback $ 38 Million • Special Dividend $ 87 Million • Regular Quarterly Dividend $ 53 Million • Our March 30, 2013 cash balance is $ 45.6 million. • Since 2007, our market capitalization increased from $220 m illion to $949 m illion.
Slide 70: Investor Communications
We anticipate releasing 2013 quarterly earnings and holding Investor conference calls on the following dates: Period Earnings Release Conference Call Q2 2013 July 31, 2013 August 1, 2013 Q3 2013 November 6, 2013 November 7 , 2013 Q4 2013 February 26, 2014 February 27, 2014 Investor Communications
Slide 71: Investment Highlights
Investment Highlights • 64 years as one of the world’s leading firearms brands. • Experienced and engaged Board of Directors. • Strong management team. • Strong market position in rifles, revolvers and pistols . • We continue to outpace growth in the industry (NICs). • Strong balance sheet. • Improv
Slide 72: Questions
Questions
Slide 73: Caution: Forward Looking Statements
Statements made in the course of this meeting that state the Company’s or Management’s intentions, hopes, beliefs, 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 suc
Slide 74: Ruger Is America
Slide 75: Thank You!
RUGER Thank You! ARMS MAKERS FOR RESPONSIBLE CITIZEN S®