Ruger(US:RGR)2025-02-19 22:02Sales Performance - Estimated sell-through of the Company's products from independent distributors to retailers increased by 5% in 2024, with 1,471,300 units sold compared to 1,406,600 units in 2023[113][114]. - Net firearms sales decreased by $8.1 million or 1.5% in 2024, totaling $532.6 million, while total net sales also decreased by $8.1 million or 1.5% to $535.6 million[125]. - In Q4 2024, the company reported net firearms sales of $145.3 million, a 12.1% increase from $129.6 million in Q4 2023[139]. - Total net sales for Q4 2024 reached $145.8 million, up 11.6% from $130.6 million in Q4 2023[139]. - Net firearms sales decreased by $52.6 million or 8.9% to $540.7 million in 2023, while total net sales fell by $52.1 million or 8.7% to $543.7 million[155]. Profitability - Gross profit for 2024 was $114.4 million, a decrease of $19.2 million or 14.4% from 2023, with a gross margin of 21.4% compared to 24.6% in 2023[125][126]. - Operating income fell to $31.6 million, representing 5.9% of sales, down from $52.1 million or 9.6% of sales in 2023[130]. - Consolidated net income for 2024 was $30.6 million, a decrease of $17.6 million from $48.2 million in 2023[133]. - Gross profit declined by $46.5 million or 25.8% to $133.6 million, resulting in a gross margin of 24.6%, down from 30.2% in 2022[155][157]. - Operating income was $52.1 million, representing 9.6% of sales, a decrease of $51.4 million from 2022[160]. - Consolidated net income fell by $40.1 million to $48.2 million in 2023, compared to $88.3 million in 2022[164]. Inventory and Backlog - The ending backlog increased to $252.9 million in 2024 from $229.0 million in 2023[118]. - Total inventory decreased to 311,000 units in 2024 from 402,800 units in 2023, with finished goods inventory down by 28,300 units[122]. - The ending backlog for orders in Q4 2023 was $229.0 million, down from $314.4 million in Q4 2022[141]. - The company's finished goods inventory increased by 30,700 units during 2023, while distributor inventories decreased by 39,100 units[149]. New Products - New products accounted for $159.3 million or 32% of firearms sales in 2024, up from $119.0 million or 23% in 2023[125]. - New products accounted for $119.0 million or 23% of firearms sales in 2023, up from $78.4 million or 14% in 2022[156]. Expenses and Tax - Selling, general, and administrative expenses increased by $4.9 million or 6.4% to $81.5 million, driven by higher trade show costs and professional service expenses[158][159]. - The effective income tax rate was 18.0% in 2023, slightly lower than 18.4% in 2022, influenced by research and development tax credits[163]. EBITDA - EBITDA for 2024 was $55.1 million, with an EBITDA margin of 10.3%, down from $75.9 million and 14.0% in 2023[136]. - EBITDA decreased to $75.9 million with an EBITDA margin of 14.0%, down from 22.1% in 2022[167]. Market Conditions and Risks - The Company believes that the valuation of its inventory and the related excess and obsolescence reserve is critical, with inventories carried at the lower of cost or market, determined by the LIFO method[197]. - The Company projects future inventory usage based on market conditions and customer preferences, indicating that it does not carry inventory at full cost beyond what is projected to be needed in the next 36 months[198]. - A hypothetical 100 basis point change in market interest rates would not materially impact the Company's earnings or cash flows, nor would it affect the fair value of the Company's investments[205]. - The Company has not undertaken any actions to cover interest rate market risk and does not engage in interest rate market risk management activities[205]. - Management believes there is a remote likelihood that litigation will have a material adverse effect on the Company's financial position, but it may impact financial results and cash flows for specific periods[196]. - The Company has not provided specific numerical guidance for future expectations, citing various risks and uncertainties that could cause actual results to differ materially from projections[202]. Share Repurchase and Capital Expenditures - The company repurchased 264,062 shares for $11.8 million in 2023, with an average price of $44.71 per share[178]. - Capital expenditures were $15.8 million in 2023, with expectations to approximate $20 million in 2025 for new product tooling and equipment upgrades[174]. Accounting Standards - The Company adopted ASU 2023-07, which requires enhanced reportable segment disclosures, effective for fiscal years beginning after December 15, 2023, but did not have a material impact on the Company[200]. - The Company is currently evaluating the effect of ASU 2023-09 on its financial statement disclosures, which requires expanded income tax disclosures effective for fiscal years beginning after December 15, 2024[200].