Sturm, Ruger & Company has a market cap of $888.1 million; its shares were traded at around $47.23 with a P/E ratio of 16.6 and P/S ratio of 2.7. The dividend yield of Sturm, Ruger & Company stocks is 3.3%. Sturm, Ruger & Company had an annual average earning growth of 17.6% over the past 10 years.
Highlight of Business Operations:Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99% of the Company’s total sales for the three and nine months ended September 29, 2012 were firearms sales, and 1% was investment castings sales. Export sales represent approximately 3% of total sales. The Company’s design and manufacturing operations are located in the United States and almost all product content is domestic. The Company’s firearms are sold through a select number of independent wholesale distributors, principally to the commercial sporting market.
New product introductions in the first nine months of 2012 included the 10/22 TakeDown rifle, the Ruger American Rifle, the SR22 pistol, the 22/45 Lite pistol, and the Single-Nine revolver. New products represented $130.3 million or 38% of firearm sales in the first nine months of 2012.
Overhead Rate Adjustments— The Company uses actual overhead expenses incurred as a percentage of sales-value-of-production over a trailing six month period to absorb overhead expense into inventory. During the three and nine months ended September 29, 2012, the Company was more efficient in overhead spending and the overhead rates used to absorb overhead expenses into inventory decreased, resulting in a decrease in inventory value of $0.3 million and $1.0 million, respectively, and corresponding increases to cost of products sold.
Gross Profit— As a result of the foregoing factors, for the three months ended September 29, 2012 gross profit was $42.6 million, an increase of $13.5 million from $29.1 million in the comparable prior year period. Gross profit as a percentage of sales decreased to 36.0% in the three months ended September 29, 2012 from 36.2% in the comparable prior year period.
For the nine months ended September 29, 2012, gross profit was $129.5 million, an increase of $47.9 million from $81.6 million in the comparable prior year period. Gross profit as a percentage of sales increased to 37.0% in the nine months ended September 29, 2012 from 34.6% in the comparable prior year period.
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