STURM RUGER & CO INC Q1 FY2025 earnings call

• Todd Seyfert expressed appreciation to shareholders, customers, employees, and partners. • Recognized predecessor Chris Killoy's impact. • Highlighted Ruger's grounding in craftsmanship, integrity, and quality, with inspired employees. • Mentioned strong financial foundation, including cash, short term investments, no debt, and $7 million returned to shareholders. • Discussed continued operation with discipline, Ruger remaining flat in sales while profitable despite industry headwinds. • New product sales contribution and leveraging brand through collaborations. • Plans for expanding availability of existing models, increasing speed to market, and offering more configurations. • Gratitude to employees for support during leadership transition and focus on investing in people.

In the first quarter of 2025, net sales were $135.7 million, while in the corresponding period of 2024 it was $136.8 million. Diluted earnings were 46 cents per share in Q1 2025 compared to $0.40 cents per share in 2024. Gross margin increased from 21.5% to 22% in Q1 2025. Cash and short term investments totaled $108 million as of March 29, 2025. Stockholders equity was $321 million. In Q1 2025, new product sales accounted for $40.7 million or 31.6% of net sales, including products like the RXM pistol, Ruger American generation two rifles, etc.

• Expect 2025 capital expenditures to increase from recent years and may exceed $30 million. • Planning to be in growth mode in 2025, investing in culture, people, and organizational efficiency, expanding production capabilities, delivering safe and innovative products, operating with financial discipline, and maximizing shareholder value. • Full pipeline of new releases on the horizon.

• Retail firearm unit sales declined 9.6% year over year with revenue down 11.5% in Q1 2025. • Uncertainties in supply chain, availability, and costs. • Monitoring of tariffs and their potential effects as a US based manufacturer.

Q: Can we expect a more aggressive pace of new product launches?

A: Yes, the biggest opportunity is the pace of new product introductions, with a full pipeline of roadmaps and alignment of investments in machines and capacity expansion to pace launches faster.

Q: How to think about impacts to the bottom line from marketing and product development for new products?

A: In the short term, more capital related than expense related, with sales and marketing support to be monitored and paced appropriately with the current environment.

Q: Particular category with significant opportunity for product launches?

A: Robust pipeline across all product platforms, prioritizing based on feedback and market opportunities, focusing on expanding platforms in the short term.

Q: Impact of RXM on ASP during the quarter?

A: RXM launch in December had an effect on ASP in the short term due to ramp up, with more firearms out the door than in December affecting ASP.

Q: Confidence in expanding capacity given market environment?

A: Combination of roadmaps for launches, ability to go out and take share with balance sheet, and opportunity in certain categories despite down market