Sturm, Ruger reports another boom year with $730 million in firearms sales

Sturm, Ruger CEO Christopher Killoy

Pandemic or no pandemic, people are still buying loads of guns, particularly from Sturm Ruger & Co.

The Connecticut-based manufacturer with a major production facility in Newport reported $730.7 million in sales in 2021, up from $558.9 million in 2020 and $410.5 million in 2019. Profits also continue to skyrocket. They nearly tripled in 2020, and then rose 73 percent more last year, to nearly $156 million

That translates to diluted earnings per share of $5.09 for the year, about $2.14 in the fourth quarter. Shareholders will get a quarterly dividend of 86 cents a share.

In 2021, it wasn’t so much the surge in demand fed by tensions over Black Lives Matter protests and a contentious election or the Covid anxiety that predominated in 2020. This was more a surge of production to meet demand as well as the previous year’s backlog. The gunmaker was nearly out of guns at the end of 2020. It was down to 48,000 units compared to 338,000 the year before.

“We entered the year with virtually no finished goods inventory, so all of the firearms sold in 2021 had to be manufactured in 2021. Our 28 percent increase in sales would not have been possible without the 30 percent increase in production at our factories. And this 30 percent increase was achieved with a manpower increase of less than 10 percent,” said CEO Chris Killoy in a Feb. 24 earnings call. The company was able to pull it off despite a labor shortage aggravated by the Covid surge in the fourth quarter as well as supply chain issues.

The sales growth was in terms of dollars, which was helped by a 3 percent across-the-board price hike. The number of actual guns sold increased 3.5 percent from 2020.

Aside from production, the company attributed the growth to its new products, which as of 2020 were responsible for 22 percent of sales. Among them is the Marlin 1895 lever-action rifle obtained from Remington during its bankruptcy sale. Most of them are manufactured in North Carolina. The company had to double its space down there to handle the load, though Killoy said that Newport also contributed to Marlin production as well.

Perhaps the only sour note during the earnings was a question about the $73 million settlement with Remington reached by some of the families of 20 first-graders and six adults killed with the company’s AR-15 style rifle at Sandy Hook Elementary School in Newtown, Conn. Analysts consider the settlement, the largest payout by a gun manufacturer, as a possible turning point following years of futile litigation against the industry. The suit was leveled in state court, rendering the usual federal liability shields moot, and the settlement stipulated that thousands of pages of internal documents have to be released, which could be used as evidence in other lawsuits.

While Ruger bought the Marlin brand, it didn’t assume the company’s liabilities.

“We’re not involved in that case,” said Killoy. “And I think it’s important to recognize what the settlement was and what it wasn’t. There was no finding of liability there. The case never went to a jury, and this is a decision by the insurance companies to settle. So I really can’t speak to their thinking on the matter.”