Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 12, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Entity Central Index Key | 0000095029 | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 0-4776 | ||
Entity Registrant Name | STURM, RUGER & COMPANY, INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 06-0633559 | ||
Entity Address, Address Line One | 1 Lacey Place | ||
Entity Address, City or Town | Southport | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06890 | ||
City Area Code | 203 | ||
Local Phone Number | 259-7843 | ||
Title of 12(b) Security | Common Stock, $1 par value | ||
Trading Symbol | RGR | ||
Name of Exchange on which Security is Registered | NYSE | ||
Entity Well-Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Auditor Attestation Flag | true | ||
Entity Public Float | $ 1,313,936,500 | ||
Entity Common Stock, Shares Outstanding | 17,545,000 | ||
Documents Incorporated By Reference Text Block | Portions of the registrant’s Proxy Statement relating to the 2021 Annual Meeting of Stockholders to be held May 12, 2021 are incorporated by reference into Part III (Items 10 through 14) of this Report. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 20,147 | $ 35,420 |
Short-term investments | 121,007 | 129,488 |
Trade receivables, net | 57,876 | 52,640 |
Gross inventories | 80,487 | 79,011 |
Less LIFO reserve | (48,016) | (47,137) |
Less excess and obsolescence reserve | (3,394) | (3,573) |
Net inventories | 29,077 | 28,301 |
Prepaid expenses and other current assets | 6,266 | 3,467 |
Total Current Assets | 234,373 | 249,316 |
Property, Plant, and Equipment | 393,843 | 372,482 |
Less allowances for depreciation | (323,110) | (298,568) |
Net property, plant and equipment | 70,733 | 73,914 |
Deferred income taxes | 1,530 | 5,393 |
Other assets | 41,622 | 20,338 |
Total Assets | 348,258 | 348,961 |
Current Liabilities | ||
Trade accounts payable and accrued expenses | 37,078 | 29,771 |
Contract liabilities with customers (Note 3) | 84 | 9,623 |
Product liability | 1,052 | 735 |
Employee compensation and benefits | 37,275 | 14,273 |
Workers' compensation | 6,272 | 5,619 |
Income taxes payable | 1,223 | |
Total Current Liabilities | 81,761 | 61,244 |
Lease liability (Note 8) | 1,724 | 2,176 |
Product liability accrual | 74 | 83 |
Contingent liabilities (Note 20) | ||
Stockholders' Equity | ||
Additional paid-in capital | 43,468 | 38,683 |
Retained earnings | 342,615 | 368,205 |
Less: Treasury stock - at cost 2020 - 6,709,898 shares 2019 - 6,709,898 shares | (145,590) | (145,590) |
Total Stockholders' Equity | 264,699 | 285,458 |
Total Liabilities and Stockholders' Equity | 348,258 | 348,961 |
Voting Common Stock [Member] | ||
Stockholders' Equity | ||
Common stock | $ 24,206 | $ 24,160 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Treasury stock, shares | 6,709,898 | 6,709,898 |
Nonvoting Common Stock [Member] | ||
Common Stock, par value per share | $ 1 | $ 1 |
Common Stock, shares authorized | 50,000 | 50,000 |
Voting Common Stock [Member] | ||
Common Stock, par value per share | $ 1 | $ 1 |
Common Stock, shares authorized | 40,000,000 | 40,000,000 |
Common Stock, shares issued | 24,205,749 | 24,160,424 |
Common Stock, shares outstanding | 17,495,851 | 17,450,526 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Total net sales | $ 568,868 | $ 410,506 | $ 495,635 |
Cost of products sold | 377,427 | 310,958 | 361,277 |
Gross profit | 191,441 | 99,548 | 134,358 |
Operating Expenses: | |||
Selling | 33,332 | 29,775 | 35,111 |
General and administrative | 39,013 | 30,344 | 32,248 |
Other operating expense (income), net | (52) | 54 | (10) |
Total operating expenses | 72,293 | 60,173 | 67,349 |
Operating income | 119,148 | 39,375 | 67,009 |
Other income: | |||
Royalty income | 814 | 698 | 804 |
Interest income | 1,126 | 2,594 | 211 |
Interest expense | (191) | (192) | (330) |
Other income, net | 84 | 552 | 1,020 |
Total other income, net | 1,833 | 3,652 | 1,705 |
Income before income taxes | 120,981 | 43,027 | 68,714 |
Income taxes | 30,583 | 10,736 | 17,781 |
Net income and comprehensive income | $ 90,398 | $ 32,291 | $ 50,933 |
Basic Earnings Per Share | $ 5.17 | $ 1.85 | $ 2.92 |
Diluted Earnings Per Share | 5.09 | 1.82 | 2.88 |
Cash Dividends Per Share | $ 6.51 | $ 0.82 | $ 1.10 |
Firearms [Member] | |||
Segment Reporting Information [Line Items] | |||
Total net sales | $ 565,863 | $ 406,326 | $ 490,607 |
Other income: | |||
Income before income taxes | 120,732 | 40,814 | 70,311 |
Unaffiliated Castings [Member] | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 3,005 | 4,180 | 5,028 |
Other income: | |||
Income before income taxes | $ (1,000) | $ (797) | $ (2,240) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Total |
Balance at Dec. 31, 2017 | $ 24,092 | $ 28,329 | $ 321,323 | $ (143,595) | $ 230,149 |
Net income | 50,933 | 50,933 | |||
Dividends paid | (19,201) | (19,201) | |||
Stock-based compensation | 5,809 | 5,809 | |||
Vesting of RSU's | (816) | (816) | |||
Common stock issued - compensation plans | 31 | (31) | |||
Unpaid dividends accrued | (405) | (405) | |||
Adoption of ASC 606 (Note 3) | (2,227) | (2,227) | |||
Balance at Dec. 31, 2018 | 24,123 | 33,291 | 350,423 | (143,595) | 264,242 |
Net income | 32,291 | 32,291 | |||
Dividends paid | (14,319) | (14,319) | |||
Stock-based compensation | 6,330 | 6,330 | |||
Vesting of RSU's | (901) | (901) | |||
Common stock issued - compensation plans | 37 | (37) | |||
Unpaid dividends accrued | (190) | (190) | |||
Repurchase of 44,500 shares of common stock | (1,995) | (1,995) | |||
Balance at Dec. 31, 2019 | 24,160 | 38,683 | 368,205 | (145,590) | 285,458 |
Net income | 90,398 | 90,398 | |||
Dividends paid | (113,896) | (113,896) | |||
Stock-based compensation | 6,128 | 6,128 | |||
Vesting of RSU's | (1,297) | (1,297) | |||
Common stock issued - compensation plans | 46 | (46) | |||
Unpaid dividends accrued | (2,092) | (2,092) | |||
Balance at Dec. 31, 2020 | $ 24,206 | $ 43,468 | $ 342,615 | $ (145,590) | $ 264,699 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | 3 Months Ended | 12 Months Ended |
Aug. 24, 2019 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Treasury Stock, Shares, Acquired | 44,500 | 44,500 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Activities | |||
Net income | $ 90,398 | $ 32,291 | $ 50,933 |
Adjustments to reconcile net income to cash provided by operating activities, net of effects of acquisition: | |||
Depreciation and amortization | 27,576 | 29,331 | 31,972 |
Stock-based compensation | 6,128 | 6,330 | 5,809 |
Excess and obsolescence inventory reserve | 1,046 | (185) | |
(Gain) loss on sale of assets | (52) | 54 | (10) |
Deferred income taxes | 3,863 | (2,424) | (4,371) |
Changes in operating assets and liabilities: | |||
Trade receivables | (5,236) | (7,609) | 15,051 |
Inventories | 10,624 | 2,073 | 8,479 |
Trade accounts payable and accrued expenses | 7,954 | (3,646) | 939 |
Contract liability to customers | (9,539) | 2,146 | 5,250 |
Employee compensation and benefits | 20,910 | (6,646) | 6,009 |
Product liability | 308 | (354) | 353 |
Prepaid expenses, other assets and other liabilities | (7,905) | (888) | (3,757) |
Income taxes payable | (1,223) | (2,117) | 3,340 |
Cash provided by operating activities | 143,806 | 49,587 | 119,812 |
Investing Activities | |||
Property, plant, and equipment additions | (24,229) | (20,296) | (10,541) |
Purchase of Marlin assets | (28,316) | ||
Purchases of short-term investments | (369,439) | (282,738) | (114,259) |
Proceeds from maturity of short-term investments | 377,920 | 267,576 | |
Net proceeds from sale of assets | 178 | 14 | 10 |
Cash used for investing activities | (43,886) | (35,444) | (124,790) |
Financing Activities | |||
Dividends paid | (113,896) | (14,319) | (19,201) |
Repurchase of common stock | (1,995) | ||
Payment of employee withholding tax related to share-based compensation | (1,297) | (901) | (816) |
Cash used for financing activities | (115,193) | (17,215) | (20,017) |
Decrease in cash and cash equivalents | (15,273) | (3,072) | (24,995) |
Cash and cash equivalents at beginning of year | 35,420 | 38,492 | 63,487 |
Cash and cash equivalents at end of year | $ 20,147 | $ 35,420 | $ 38,492 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99% of sales were from firearms. Export sales represented approximately 4% of firearms 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. The Company manufactures investment castings made from steel alloys and metal injection molding (“MIM”) parts for internal use in its firearms and utilizes available capacity to manufacture and sell investment castings and MIM parts to unaffiliated, third-party customers. Castings were approximately 1% of the Company’s total sales for the year ended December 31, 2020. Preparation of Financial Statements The Company follows United States generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The significant accounting policies described below, together with the notes that follow, are an integral part of the consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated. Revenue Recognition The Company recognizes revenue in accordance with the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which became effective January 1, 2018. Substantially all product sales are sold FOB (free on board) shipping point. Customary payment terms are 2% 30 days, net 40 days. Generally, all performance obligations are satisfied when product is shipped and the customer takes ownership and assumes the risk of loss. In some instances, sales include multiple performance obligations. The most common of these instances relates to sales promotion programs under which downstream customers are entitled to receive no charge products based on their purchases of certain of the 53 Table of Contents Company’s products from the independent distributors. The fulfillment of these no charge products is the Company’s responsibility. In such instances, the Company allocates the revenue of the promotional sales based on the estimated level of participation in the sales promotional program and the timing of the shipment of all of the firearms included in the promotional program, including the no charge firearms. Revenue is recognized proportionally as each performance obligation is satisfied, based on the relative customary price of each product. Customary prices are generally determined based on the prices charged to the independent distributors. The net change in contract liabilities for a given period is reported as an increase or decrease to sales. The Company accounts for cash sales discounts as a reduction in sales. Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred by the Company for the delivery of goods are classified as selling expenses. Federal excise taxes are excluded from net sales. Business Combination On September 26, 2020, the Company entered into an Asset Purchase Agreement (the "Agreement") with the Remington Outdoor Company, Inc. and each of the subsidiaries of the Remington Outdoor Company, Inc. (collectively, “Remington”) to purchase substantially all of the assets (the “Marlin Assets”) used to manufacture Marlin Firearms (the “Marlin Acquisition”). The agreement to purchase these assets emanated from the Remington Outdoor Company, Inc. bankruptcy and was approved by the United States Bankruptcy Court for the Northern District of Alabama on September 30, 2020. The Marlin Acquisition was conducted through a Bankruptcy Court-supervised process, subject to Bankruptcy Court-approved bidding procedures, approval of the transactions by the Bankruptcy Court, and the satisfaction of certain closing conditions. The Company closed on the Marlin Acquisition on November 23, 2020. The Agreement provided that, upon the terms and subject to the conditions set forth therein, Remington sold, transferred and assigned to the Company the Marlin Assets (as defined in the Agreement) for a purchase price of $28.3 million in cash. The Marlin Assets include the following assets, among other things, equipment, inventory, and all intellectual property related to Marlin, including the Marlin names and marks, and all derivatives thereof. The primary purpose of the Marlin Acquisition was to manufacture and sell Marlin branded firearms and generate shareholder value. The Marlin brand aligns with the Ruger brand and the Marlin product portfolio will widen the Company’s diverse product offerings. The transaction was funded by the Company with cash on hand and has been accounted for in accordance with ASC 805 - Business Combinations Cash and Cash Equivalents The Company considers interest-bearing deposits with financial institutions with remaining maturities of three months or less at the time of acquisition to be cash equivalents. Fair Value Measurements of Short-term Investments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. Fair value is established according to a hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Level 3 inputs are given the lowest priority in the fair value hierarchy. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2020, all of the Company’s short-term investments are U.S. Treasury instruments (Level 1), maturing within one year. Such securities are classified as held to maturity, since the Company has the intent and ability to do so, and are carried at cost plus accrued interest, which approximates fair value. The fair value of inventory acquired as part of business combination is based on a third-party valuation utilizing the comparable sales method which is based on Level 2 and Level 3 inputs. The fair value of property, plant and equipment acquired as part of business combination is based on a third-party valuation utilizing the indirect method of cost approach, which is based on Level 2 and Level 3 inputs. The fair value of patents acquired as part of business combination is based on a third-party valuation utilizing the replacement cost method, which is based on Level 2 and Level 3 inputs. The fair value of the remaining intangible assets as part of business combination are based on a third-party valuation utilizing discounted cash flow methods that involves inputs, which are not observable in the market (Level 3). 54 Table of Contents Accounts Receivable The Company establishes an allowance for doubtful accounts based on the creditworthiness of its customers and historical experience. While the Company uses the best information available to make its evaluation, future adjustments to the allowance for doubtful accounts may be necessary if there are significant changes in economic and industry conditions or any other factors considered in the Company’s evaluation. Bad debt expense has been immaterial during each of the last three years. The Company mitigates its credit risk by maintaining credit insurance on most of its significant customers. Inventories Substantially all of the Company’s inventories are valued at the lower of cost, principally determined by the last-in, first-out (LIFO) method, or market. Elements of cost in inventories include raw materials, direct labor and manufacturing overhead. Property, Plant, and Equipment Property, plant, and equipment are carried at cost. Depreciation is computed over useful lives using the straight-line and declining balance methods predominately over 15 years for buildings, 7 years for machinery and equipment and 3 years for tools and dies. When assets are retired, sold or otherwise disposed of, their gross carrying values and related accumulated depreciation are removed from the accounts and a gain or loss on such disposals is recognized when appropriate. Maintenance and repairs are charged to operations; replacements and improvements are capitalized. Long-lived Assets The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. In performing this review, the carrying value of the assets is compared to the projected undiscounted cash flows to be generated from the assets. If the sum of the undiscounted expected future cash flows is less than the carrying value of the assets, the assets are considered to be impaired. Impairment losses are measured as the amount by which the carrying value of the assets exceeds their fair value. The Company bases fair value of the assets on quoted market prices if available or, if not available, quoted market prices of similar assets. Where quoted market prices are not available, the Company estimates fair value using the estimated future cash flows generated by the assets discounted at a rate commensurate with the risks associated with the recovery of the assets. Goodwill Our goodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired. We assess goodwill for impairment on an annual basis during the fourth quarter of each year, and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists by the amount the fair value of a reporting unit to which goodwill has been allocated is less than their respective carrying values. The impairment for goodwill is limited to the total amount of goodwill allocated to the reporting unit. Goodwill impairment testing requires significant judgment and management estimates, including, but not limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the reporting units and (iii) the fair values of the reporting units. The estimates and assumptions described above, along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment losses. Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory rates applicable to future years to temporary differences between the financial statement carrying amounts and the tax basis of the Company’s assets and liabilities. 55 Table of Contents Product Liability The Company provides for product liability claims including estimated legal costs to be incurred defending such claims. The provision for product liability claims is charged to cost of products sold. Advertising Costs The Company expenses advertising costs as incurred. Advertising expenses for 2020, 2019, and 2018, were $2.7 million, $2.6 million, and $2.9 million, respectively. Shipping Costs Costs incurred related to the shipment of products are included in selling expense. Such costs totaled $3.9 million, $3.9 million, and $4.8 million in 2020, 2019, and 2018, respectively. Research and Development In 2020, 2019, and 2018, the Company spent approximately $8.0 million, $8.2 million, and $8.5 million, respectively, on research and development activities relating to new products and the improvement of existing products. These costs are expensed as incurred. Earnings per Share Basic earnings per share is based upon the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the impact of options, restricted stock units, and deferred stock outstanding using the treasury stock method. 56 Table of Contents Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases Topic 842 (“ASC 842”), which amends the existing accounting standards for leases. ASC 842 requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases (with the exception of short-term leases) and disclose key information about leasing arrangements, whereas under current standards, the Company’s operating leases were not recognized on its consolidated balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. ASC 842 is effective for years beginning after December 15, 2018, including interim periods within those fiscal years, and is to be applied using either a modified retrospective approach, or an optional transition method which allows an entity to apply the new standard at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASC 842 in the first quarter of 2019 using this optional transition method. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualified. The Company elected the practical expedient to not separate lease and non-lease components for all of its leases. The right-of-use assets and lease liabilities for the lease portfolio recorded on its consolidated balance sheet as of January 1, 2019 was about $2 million, primarily related to real estate. The adoption of this pronouncement did not impact the Company’s consolidated statements of operations or its consolidated statement of cash flows. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The new guidance requires financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected through application of the current expected credit losses model. The model requires an estimate of the credit losses expected over the life of an exposure or pool of exposures. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. This pronouncement is effective for fiscal years beginning after Dec. 15, 2019. The Company has completed its assessment and adopted the new guidance effective January 1, 2020. The adoption of the new guidance did not have a material impact to the Company. |
Acquisition of Marlin Assets
Acquisition of Marlin Assets | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisition of Marlin Assets | 2. Acquisition of Marlin Assets As described in Note 1, the Company closed on the Marlin Acquisition on November 23, 2020. The Company paid $28.3 million dollars in cash for the Marlin Assets from Remington. The Marlin Acquisition was accounted for in accordance with ASC Topic 805, Business Combinations. Accordingly, the total purchase price has been allocated to tangible assets based on their fair value and the intangibles and goodwill have been allocated on a provisional basis at the date of acquisition. The Company assumed no liabilities in this transaction. These allocations reflect various provisional estimates that were available at the time and are subject to change during the purchase price allocation period until the valuations are finalized. The Company is in the process of evaluating the inventory, machinery and equipment, tooling, and fixtures that were acquired late in 2020. 57 Table of Contents The following table summarizes the Company's preliminary fair value of the assets acquired, as of November 23, 2020, for the Company’s Marlin Acquisition. Purchase Price Cash paid to sellers $ 28,300 Purchase Price Allocation Assets Acquired Inventory $ 11,400 Machinery and equipment 5,000 Tradename and trademarks 7,800 Patents 2,500 Customer Relationships 1,000 Goodwill 600 Net Assets Acquired $ 28,300 Identifiable assets acquired were recorded at their estimated fair values based on the methodology described under “Fair Value Measurements” in Note 1 - Significant Accounting Policies. The Machinery and Equipment acquired in the Marlin Acquisition is classified as deposits on capital items in Other Assets on the Company’s Consolidated Balance Sheet at December 31, 2020. Intangible assets acquired in the Marlin Acquisition are reflected in Other Assets on the Company’s Consolidated Balance Sheet at December 31, 2020. Intangible assets are amortized over their estimated remaining useful lives using a straight-line methodology. Remaining Economic Useful Life Tradename and trademarks 20 years Patents 20 years Customer Relationships 15 years 58 Table of Contents The purchase price exceeded the fair value of the tangible assets because of expected growth of the business, resulting in goodwill being recognized in the transaction, which is deductible for tax purposes. The Company incurred acquisition related costs of $1.7 million, which are included in selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income for the fiscal year ended December 31, 2020. The pro forma impact of the acquisition and the results of operations attributable to Marlin in 2019 and 2020 have not been presented, as they are not material to the Company’s consolidated results of operations. The impact on sales and gross margin was no more than 5% of the reported amounts in either period, the trend in annual sales growth was unchanged, and the impact on gross margin percentage was less than 1%, in both periods. |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition and Contracts with Customers | 3. Revenue Recognition and Contracts with Customers On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method, applied to those contracts for which all performance obligations were not completed as of that date. Under the modified retrospective method, results for reporting periods beginning after January 1, 2018 are presented using the guidance of ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the previous guidance provided in ASC Topic 605, Revenue Recognition The impact of the adoption of ASC 606 on revenue recognized during the years ended December 31, 2020 and December 31, 2019 is as follows: 2020 2019 2018 Contract liabilities with customers at January 1, $ 9,623 $ 7,477 $ 6,950 Revenue recognized (14,570 ) (16,352 ) (20,653 ) Revenue deferred 5,031 18,498 21,180 Contract liabilities with customers at December 31, $ 84 $ 9,623 $ 7,477 During the year ended December 31, 2020, the Company deferred $5.0 million of revenue, offset by the recognition of $14.6 million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied. This resulted in a net increase in firearms sales for the year ended December 31, 2020 of $9.6 million and a deferred contract revenue liability at December 31, 2020 of $0.1 million. The deferred revenue balance is significantly reduced due to the absence of promotions in the fourth quarter of 2020. The Company estimates that revenue from this deferred contract liability will be recognized in the first quarter of 2021. During the year ended December 31, 2019, the Company deferred $18.5 million of revenue, offset by the recognition of $16.4 million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied. This resulted in a net decrease in firearms sales for the year ended December 31, 2019 of $2.1 million and a deferred contract revenue liability at December 31, 2019 of $9.6 million. During the year ended December 31, 2018, the Company deferred $21.2 million of revenue, offset by the recognition of $20.7 million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied. This resulted in a net decrease in firearms sales for the year ended December 31, 2018 of $0.5 million and a deferred contract revenue liability at December 31, 2018 of $7.4 million. 59 Table of Contents Practical Expedients and Exemptions The Company has elected to account for shipping and handling activities that occur after control of the related product transfers to the customer as fulfillment activities that are recognized upon shipment of the goods. |
Trade Receivables, Net
Trade Receivables, Net | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Trade Receivables, Net | 4. Trade Receivables, Net Trade receivables consist of the following: December 31, 2020 2019 Trade receivables $ 59,442 $ 54,110 Allowance for doubtful accounts (400 ) (400 ) Allowance for discounts (1,166 ) (1,070 ) $ 57,876 $ 52,640 In 2020, the largest individual trade receivable balances accounted for 30%, 15%, and 14% of total trade receivables, respectively. In 2019, the largest individual trade receivable balances accounted for 31%, 18%, and 12% of total trade receivables, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories consist of the following: December 31, 2020 2019 Inventory at FIFO Finished goods $ 2,878 $ 13,131 Materials and products in process 77,609 65,880 Gross inventories 80,487 79,011 Less: LIFO reserve (48,016 ) (47,137 ) Less: excess and obsolescence reserve (3,394 ) (3,573 ) Net Inventories $ 29,077 $ 28,301 In 2019 inventory quantities were reduced. This reduction resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the current cost of purchases, the effect of which decreased 2019 costs of products sold by approximately $0.2 million. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property, Plant and Equipment Property, plant and equipment consist of the following: December 31, 2020 2019 Land and improvements $ 2,686 $ 2,671 Buildings and improvements 55,076 53,692 Machinery and equipment 285,869 270,426 Dies and tools 50,212 45,693 Property, plant and equipment 393,843 372,482 Less allowances for depreciation (323,110 ) (298,568 ) Net property, plant and equipment $ 70,733 $ 73,914 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 7. Other Assets Other assets consist of the following: December 31, 2020 2019 Patents, at cost $ 9,859 $ 7,181 Accumulated amortization (5,071 ) (4,780 ) Deposits on capital items 22,255 11,886 Right-of-use assets 2,124 2,610 Marlin trade name 7,800 - Other 4,655 3,441 $ 41,622 $ 20,338 The capitalized cost of patents is amortized using the straight-line method over their useful lives. The cost of patent amortization was $0.3 million in 2020, 2019, and 2018. The estimated annual patent amortization cost for each of the next five years is $0.4 million. Costs incurred to maintain existing patents are charged to expense in the year incurred. The Marlin trade name will be amortized using the straight-line method over its useful life. The estimated annual trade name amortization cost for each of the next five years is $0.4 million. The intangible asset related to Marlin customer relationships are included in Other above and will be amortized using the straight-line method over its useful life. The estimated annual customer relationship name amortization cost for each of the next five years is $0.1 million. |
Leased Assets
Leased Assets | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leased Assets | 8. Leased Assets The Company leases certain of its real estate and equipment. The Company has evaluated all its leases and determined that all are operating leases under the definitions of the guidance of ASU 2016-02. The Company’s lease agreements generally do not require material variable lease payments, residual value guarantees or restrictive covenants. The Company adopted the provisions of ASU 2016-02 using the effective interest method on January 1, 2019 and recorded right-of-use assets equal to the present value of the contractual liability for future lease payments. The table below presents the right-of-use assets and related lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2020: Balance Sheet Line Item December 31, 2020 Right-of-use assets Other assets $ 2,124 Operating lease liabilities Current portion Trade accounts payable and accrued expenses $ 451 Noncurrent portion Lease liabilities 1,724 Total operating lease liabilities $ 2,175 The depreciable lives of right-of-use assets are limited by the lease term and are amortized on a straight line basis over the life of the lease. The Company’s leases generally do not provide an implicit interest rate, and therefore the Company calculates an incremental borrowing rate to determine the present value of its operating lease liabilities. The following table reconciles the undiscounted future minimum lease payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2020: 2021 $ 559 2022 244 2023 213 2024 215 2025 160 Thereafter 1,440 Total undiscounted future minimum lease payments 2,831 Less: Difference between undiscounted lease payments & the present value of future lease payments (656 ) Total operating lease liabilities $ 2,175 Certain of the Company’s lease agreements contain renewal options at the Company’s discretion. The Company does not recognize right-of-use assets or lease liabilities for leases of one year or less or for renewal periods unless it is reasonably certain that the Company will exercise the renewal option at the inception of the lease or when a triggering event occurs. The Company’s weighted average remaining lease term for operating leases as of December 31, 2020 is 11.5 years. |
Trade Accounts Payable and Accr
Trade Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Trade Accounts Payable and Accrued Expenses | 9. Trade Accounts Payable and Accrued Expenses Trade accounts payable and accrued expenses consist of the following: December 31, 2020 2019 Trade accounts payable $ 12,796 $ 8,339 Federal excise taxes payable 14,332 10,670 Accrued other 9,950 10,762 $ 37,078 $ 29,771 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
Line of Credit | 10. Line of Credit The Company has a $40 million unsecured revolving line of credit with a bank. This facility is renewable annually and terminates on September 30, 2021. Borrowings under this facility bear interest at the one-month LIBOR rate (0.14763% at December 31, 2020) plus 150 basis points. The Company is charged one-quarter of a percent (0.25%) per year on the unused portion. At December 31, 2020, the Company was in compliance with the terms and covenants of the credit facility, which remains unused. At December 31, 2019, the Company was in compliance with the terms and covenants of a previous credit facility. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 11. Employee Benefit Plans The Company sponsors a qualified defined-contribution 401(k) plan that covers substantially all of its employees. Under the terms of the 401(k) plan, the Company matches a certain portion of employee contributions to their individual 401(k) accounts using the “safe harbor” guidelines provided in the Internal Revenue Code. Expenses related to matching employee contributions to the 401(k) plan were $3.3 million, $3.2 million, and $3.1 million in 2020, 2019, and 2018, respectively. Additionally, in 2020, 2019, and 2018 the Company provided discretionary supplemental contributions to the individual 401(k) accounts of substantially all employees. Each employee received a supplemental contribution to their account based on a uniform percentage of qualifying compensation established annually. The cost of these supplemental contributions totaled $5.6 million, $5.0 million, and $5.3 million in 2020, 2019, and 2018, respectively. |
Other Operating Income, net
Other Operating Income, net | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Operating Income, net | 12. Other Operating Income, Net Other operating income, net consists of the following: Year ended December 31, 2020 2019 2018 Gain (loss) on sale of operating assets $ 52 $ (54 ) $ 10 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 13. Income Taxes The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2017. The federal and state income tax provision consisted of the following: Year ended December 31, 2020 2019 2018 Current Deferred Current Deferred Current Deferred Federal $ 20,201 $ 3,696 $ 10,705 $ (1,911 ) $ 17,574 $ (3,265 ) State 6,519 167 2,455 (513 ) 3,859 (387 ) $ 26,720 $ 3,863 $ 13,160 $ (2,424 ) $ 21,433 $ (3,652 ) The effective income tax rate varied from the statutory federal income tax rate as follows: Year ended December 31, 2020 2019 2018 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 4.4 3.6 4.0 Other items (0.1 ) 0.4 0.9 Effective income tax rate 25.3 % 25.0 % 25.9 % The Tax Cuts and Jobs Act of 2017 lowered the statutory corporate tax rate from 35% to 21% for years beginning after December 31, 2017. The Company estimates that its effective tax rate in 2021 will approximate 25%. 63 Table of Contents Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets Product Liability $ 285 $ 203 Employee compensation and benefits 2,548 2,263 Allowances for doubtful accounts and discounts 445 3,761 Inventories 954 978 Stock-based compensation 3,353 3,064 Other 1,443 1,637 Total deferred tax assets 9,028 11,906 Deferred tax liabilities: Depreciation 6,638 5,631 Other 860 882 Total deferred tax liabilities 7,498 6,513 Net deferred tax assets $ 1,530 $ 5,393 The Company made income tax payments of approximately $30.6 million, $16.0 million, and $18.1 million, during 2020, 2019, and 2018, respectively. The Company expects to realize its deferred tax assets through tax deductions against future taxable income . The Company does not believe it has included any “uncertain tax positions” in its federal income tax return or any of the state income tax returns it is currently filing. The Company has made an evaluation of the potential impact of additional state taxes being assessed by jurisdictions in which the Company does not currently consider itself liable. The Company does not anticipate that such additional taxes, if any, would result in a material change to its financial position. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. Earnings Per Share Set forth below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share calculations for the periods indicated: Year ended December 31, 2020 2019 2018 Numerator: Net income $ 90,398 $ 32,291 $ 50,933 Denominator: Weighted average number of common shares outstanding – Basic 17,486,054 17,461,421 17,450,658 Dilutive effect of options and restricted stock units outstanding under the Company’s employee compensation plans 283,802 317,411 203,973 Weighted average number of common shares outstanding – Diluted 17,769,856 17,778,832 17,654,631 |
Stock Repurchases
Stock Repurchases | 12 Months Ended |
Dec. 31, 2020 | |
Stock Repurchases [Abstract] | |
Stock Repurchases | 15. Stock Repurchases In 2019 the Company repurchased shares of its common stock. Details of these purchases are as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program Third Quarter 2019 July 28 to August 24 44,500 $ 44.83 44,500 Total 44,500 $ 44.83 44,500 $ 86,710,000 All of these purchases were made with cash held by the Company and no debt was incurred. No shares were repurchased in 2018 and 2020. At December 31, 2020, approximately $87 million remained authorized for share repurchases. |
Compensation Plans
Compensation Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Compensation Plan | 16. Compensation Plans In May 2017, the Company’s shareholders approved the 2017 Stock Incentive Plan (the “2017 SIP”) under which employees, independent contractors, and non-employee directors may be granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any of which may or may not require the satisfaction of performance objectives. Vesting requirements are determined by the Compensation Committee of the Board of Directors . Compensation expense related to deferred stock, restricted stock, and restricted stock units is recognized based on the grant-date fair value of the Company’s common stock, using either the 65 Table of Contents actual share price or an estimated value using the Monte Carlo valuation model. The total stock-based compensation cost included in the Statements of Income was $6.1 million, $6.3 million, and $5.8 million in 2020, 2019, and 2018, respectively. Stock Options There were no stock options granted in 2020, 2019, or 2018 and no stock options outstanding at December 31, 2020. The following table summarizes the stock option activity of the 2007 SIP: Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2017 11,838 $ 8.95 $ 6.69 1.3 Granted — — — — Exercised (4,616 ) 8.28 6.90 — Canceled (1,750 ) 8.69 4.57 0.3 Outstanding at December 31, 2018 5,472 9.60 7.20 0.9 Granted — — — — Exercised (5,472 ) 9.60 7.20 — Canceled — — — — Outstanding at December 31, 2019 — — — — Granted — — — — Exercised — — — — Canceled — — — — Outstanding at December 31, 2020 — — — — Exercisable Options Outstanding at December 31, 2020 — — — — Non-Vested Options Outstanding at December 31, 2020 — $ — $ — — Deferred Stock Deferred stock awards vest based on the passage of time or the Company’s attainment of performance objectives. Upon vesting, these awards convert one-for-one to common stock. In 2020, 6,244 deferred stock awards were issued to non-employee directors that will vest in May 2021 and 8,078 deferred stock awards were issued to non-employee directors that will vest in May 2023 . 66 Table of Contents In 2019, 6,337 deferred stock awards were issued to non-employee directors that vested in May 2020 and 7,720 deferred stock awards were issued to non-employee directors that will vest in May 2022 . In 2018, 5,767 deferred stock awards were issued to non-employee directors that vested in May 2019 and 6,751 deferred stock awards were issued to non-employee directors that will vest in May 2021. Compensation expense related to these awards is amortized ratably over the vesting period. Compensation expense related to these awards was $0.9 million in 2020 and $0.7 in 2019 and 2018. At December 31, 2020, there was $0.7 million of unrecognized compensation cost related to deferred stock that is expected to be recognized over a period of three years Restricted Stock Units The Company grants restricted stock units (RSU’s) to senior employees. Some of these RSU’s are retention awards and have only time-based vesting. Other RSU’s have a vesting “double trigger.” The vesting of these RSU’s is dependent on the achievement of corporate objectives established by the Compensation Committee of the Board of Directors, including stock performance relative to industry indices, return on net operating assets, and the passage of time. During 2020, 95,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $5.7 million, of which $1.1 million was recognized in 2020. The costs are being recognized ratably over the remaining periods required before the units vest, which range from 24 to 26 months . During 2019, 68,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $3.7 million, of which $1.0 million was recognized in 2019. The costs are being recognized ratably over the remaining periods required before the units vest, which range from 24 to 26 months. During 2018, 172,000 restricted stock units were issued. Compensation costs related to these restricted stock units was $8.1 million, of which $2.2 million was recognized in 2018. The costs are being recognized ratably over the remaining periods required before the units vest, which ranged from 24 to 26 months. At December 31, 2020, there was $7.0 million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over a period of 2.3 years. |
Operating Segment Information
Operating Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Operating Segment Information | 17. Operating Segment Information The Company has two reportable operating segments: firearms and castings. The firearms segment manufactures and sells rifles, pistols, and revolvers principally to a number of federally-licensed, independent wholesale distributors primarily located in the United States. The castings segment manufactures and sells steel investment castings and metal injection molding parts. Corporate segment income relates to interest income, the sale of non-operating assets, and other non-operating activities. Corporate segment assets consist of cash and other non-operating assets. The Company evaluates performance and allocates resources, in part, based on income (loss) before taxes. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 1). Intersegment sales are recorded at the Company’s cost plus a fixed profit percentage. Year ended December 31, 2020 2019 2018 Net Sales Firearms $ 565,863 $ 406,326 $ 490,607 Castings Unaffiliated 3,005 4,180 5,028 Intersegment 22,254 18,425 22,946 25,259 22,605 27,974 Eliminations (22,254 ) (18,425 ) (22,946 ) $ 568,868 $ 410,506 $ 495,635 Income (Loss) Before Income Taxes Firearms $ 120,732 $ 40,814 $ 70,311 Castings (1,000 ) (797 ) (2,240 ) Corporate 1,249 3,010 643 $ 120,981 $ 43,027 $ 68,714 Identifiable Assets Firearms $ 174,500 $ 163,792 $ 166,975 Castings 11,959 11,332 10,850 Corporate 161,799 173,837 157,707 $ 348,258 $ 348,961 $ 335,532 Depreciation Firearms $ 25,126 $ 27,149 $ 29,542 Castings 2,158 1,875 2,083 $ 27,284 $ 29,024 $ 31,625 Capital Expenditures Firearms $ 19,253 $ 19,570 $ 9,689 Castings 4,976 726 852 $ 24,229 $ 20,296 $ 10,541 In 2020, the Company’s largest customers and the percent of firearms sales they represented were as follows: Sports South - 22%; Lipsey’s - 22%; and Davidson’s - 18%. In 2019, the Company’s largest customers and the percent of firearms sales they represented were as follows: Lipsey’s - 26%; Sports South - 22%; and Davidson’s - 15%. 68 Table of Contents In 2018, the Company’s largest customers and the percent of firearms sales they represented were as follows: Davidson’s - 21%; Lipsey’s - 20%; and Sports South - 16%. The Company’s assets are located entirely in the United States and domestic sales represented at least 95% of total sales in 2020, 2019, and 2018. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | 18. Quarterly Results of Operations (Unaudited) The following is a tabulation of the unaudited quarterly results of operations for the two years ended December 31, 2020: Three Months Ended 3/28/20 6/27/20 9/26/20 12/31/20 Net Sales $ 123,639 $ 130,264 $ 145,705 $ 169,260 Gross profit 36,009 40,085 51,152 64,195 Net income 15,338 18,594 24,753 31,713 Basic earnings per share 0.88 1.06 1.42 1.81 Diluted earnings per share $ 0.87 $ 1.05 $ 1.39 $ 1.78 Three Months Ended 3/30/19 6/29/19 9/28/19 12/31/19 Net Sales $ 114,039 $ 96,329 $ 94,999 $ 105,139 Gross profit 32,597 22,302 19,867 24,782 Net income 13,033 6,233 4,817 8,208 Basic earnings per share 0.75 0.36 0.28 0.47 Diluted earnings per share $ 0.74 $ 0.35 $ 0.27 $ 0.46 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 19. Related Party Transactions From time to time, the Company contracts with the National Rifle Association (“NRA”) for some of its promotional and advertising activities. The Company paid the NRA $0.6 million, $0.8 million and $0.7 million in 2020, 2019 and 2018, respectively. |
Contingent Liabilities
Contingent Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | 20. Contingent Liabilities As of December 31, 2020, the Company was a defendant in five (5) lawsuits and is aware of certain other such claims. The lawsuits fall into three categories: traditional product liability litigation, non-product litigation, and municipal litigation. Each is discussed in turn below. Traditional Product Liability Litigation Two lawsuits mentioned above involve a claim for damages related to an allegedly defective product due to its design and/or manufacture. The lawsuits stem from a specific incident of personal injury and are based on traditional product liability theories such as strict liability, negligence, and/or breach of warranty. The Company management believes that the allegations in these cases are unfounded, that the incidents are unrelated to the design or manufacture of the firearms involved, and that there should be no recovery against the Company. Non-Product Litigation Primus Group LLC v. Smith and Wesson, et al. FN Herstal S.A. v. Sturm, Ruger & Co., Inc. Municipal Litigation Municipal litigation generally includes those cases brought by cities or other governmental entities against firearms manufacturers, distributors and retailers seeking to recover damages allegedly arising out of the misuse of firearms by third parties. There is only one remaining lawsuit of this type, filed by the City of Gary in Indiana State Court in 1999. The Complaint in that case seeks damages, among other things, for the costs of medical care, police and emergency services, public health services, and other services as well as punitive damages. In addition, nuisance abatement and/or injunctive relief is sought to change the design, manufacture, marketing and distribution practices of the various defendants. The suit alleges, among other claims, negligence in the design of products, public nuisance, negligent distribution and marketing, negligence per se and deceptive advertising. The case does not allege a specific injury to a specific individual as a result of the misuse or use of any of the Company's products. 70 Table of Contents After a long procedural history, the case was scheduled for trial on June 15, 2009. The case was not tried on that date and was largely dormant until a status conference was held on July 27, 2015. At that time, the court entered a scheduling order setting deadlines for plaintiff to file a Second Amended Complaint, for defendants to answer, and for defendants to file dispositive motions. The plaintiff did not file a Second Amended Complaint by the deadline. In 2015, Indiana passed a new law such that Indiana Code §34-12-3-1 became applicable to the City's case. The defendants filed a joint motion for judgment on the pleadings, asserting immunity under §34-12-3-1 and asking the court to revisit the Court of Appeals' decision holding the Protection of Lawful Commerce in Arms Act inapplicable to the City's claims. On September 29, 2016, the court entered an order staying the case pending a decision by the Indiana Supreme Court in KS&E Sports v. Runnels KS&E Sports City of Gary City of Gary KS&E Sports A hearing on the motion for judgment on the pleadings was held on December 12, 2017. On January 2, 2018, the court issued an order granting defendants’ motion for judgment on the pleadings, but denying defendants’ request for attorney’s fees and costs. On January 8, 2018, the court entered judgment for the defendants. The City filed a Notice of Appeal on February 1, 2018. Defendants cross-appealed the order denying attorney’s fees and costs. Briefing in the Indiana Court of Appeals was completed on the City’s appeal and Defendants’ cross appeal on September 10, 2018. The Court of Appeals issued its ruling on May 23, 2019, affirming dismissal of the City’s negligent design and warnings count on the basis that the City had not alleged that Manufacturer Defendants’ conduct was unlawful. However, the court reversed dismissal of the City’s negligent sale and distribution and related public nuisance counts for damages and injunctive relief. The Manufacturer Defendants filed a Petition to Transfer the case to the Indiana Supreme Court on July 8, 2019. The Petition was denied on November 26, 2019. The case was remanded to the trial court for further proceedings, though there has been no activity since then. Summary of Claimed Damages and Explanation of Product Liability Accruals Punitive damages, as well as compensatory damages, are demanded in certain of the lawsuits and claims. In many instances, the plaintiff does not seek a specified amount of money, though 71 Table of Contents aggregate amounts ultimately sought may exceed product liability accruals and applicable insurance coverage. For product liability claims made after July 10, 2000, coverage is provided on an annual basis for losses exceeding $5 million per claim, or an aggregate maximum loss of $10 million annually, except for certain new claims which might be brought by governments or municipalities after July 10, 2000, which are excluded from coverage. The Company management monitors the status of known claims and the product liability accrual, which includes amounts for asserted and unasserted claims. While it is not possible to forecast the outcome of litigation or the timing of costs, in the opinion of management, after consultation with special and corporate counsel, it is not probable and is unlikely that litigation, including punitive damage claims, will have a material adverse effect on the financial position of the Company, but may have a material impact on the Company’s financial results for a particular period. Product liability claim payments are made when appropriate if, as, and when claimants and the Company reach agreement upon an amount to finally resolve all claims. Legal costs are paid as the lawsuits and claims develop, the timing of which may vary greatly from case to case. A time schedule cannot be determined in advance with any reliability concerning when payments will be made in any given case. Provision is made for product liability claims based upon many factors related to the severity of the alleged injury and potential liability exposure, based upon prior claim experience. Because the Company's experience in defending these lawsuits and claims is that unfavorable outcomes are typically not probable or estimable, only in rare cases is an accrual established for such costs. In most cases, an accrual is established only for estimated legal defense costs. Product liability accruals are periodically reviewed to reflect then-current estimates of possible liabilities and expenses incurred to date and reasonably anticipated in the future. Threatened product liability claims are reflected in the Company's product liability accrual on the same basis as actual claims; i.e., an accrual is made for reasonably anticipated possible liability and claims handling expenses on an ongoing basis. A range of reasonably possible losses relating to unfavorable outcomes cannot be made. However, in product liability cases in which a dollar amount of damages is claimed, the amount of damages claimed, which totaled $1.1 million and $0.1 million at December 31, 2020 and 2019, respectively, are set forth as an indication of possible maximum liability the Company might be required to incur in these cases (regardless of the likelihood or reasonable probability of any or all of this amount being awarded to claimants) as a result of adverse judgments that are sustained on appeal. During 2020, one (1) traditional product liability lawsuit was filed against the Company and one (1) was resolved. As of December 31, 2020, the Company was a defendant in three (3) lawsuits involving its products, including two (2) traditional lawsuits and one (1) municipal lawsuit. During 2019, two (2) traditional product liability lawsuits were filed against the Company and three (3) were resolved. As of December 31, 2019, the Company was a defendant in three (3) lawsuits involving its products, including two (2) traditional lawsuits and one (1) municipal lawsuit. 72 Table of Contents The Company’s product liability expense was $1.1 million in 2020, $0.7 million in 2019, $1.5 million in 2018. This expense includes the cost of outside legal fees, and other expenses incurred in the management and defense of product liability matters. A roll-forward of the product liability reserve and detail of product liability expense for the three years ended December 31, 2020 follows: Balance Sheet Roll-forward for Product Liability Reserve Cash Payments Balance Beginning of Year (a ) Accrued Legal Expense (Income) (b) Legal Fees (c) Settlements (d) Balance End of Year (a) 2018 $ 819 731 (183 ) (195 ) $ 1,172 2019 $ 1,172 (37 ) (240 ) (77 ) $ 818 2020 $ 818 300 8 — $ 1,126 Income Statement Detail for Product Liability Expense Accrued Legal Expense (b) Insurance Premium Expense (e) Total Product Liability Expense 2018 $ 731 783 $ 1,514 2019 $ (37 ) 755 $ 718 2020 $ 300 839 $ 1,139 Notes (a) The beginning and ending liability balances represent accrued legal fees only. Settlements and administrative costs are expensed as incurred. Only in rare instances is an accrual established for settlements. (b) The expense accrued in the liability is for legal fees only. In 2019, the costs incurred related to cases that were settled or dismissed were less than the amounts accrued for these cases in prior years. (c) Legal fees represent payments to outside counsel related to product liability matters. (d) Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full and complete release of liability. (e) Insurance expense represents the cost of insurance premiums. There were no insurance recoveries during any of the above years. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Financial Instruments [Abstract] | |
Financial Instruments | 21. Financial Instruments The Company does not hold or issue financial instruments for trading or hedging purposes, nor does it hold interest rate, leveraged, or other types of derivative financial instruments. Fair values of accounts receivable, accounts payable, accrued expenses and income taxes payable reflected in the December 31, 2020 and 2019 balance sheets approximate carrying values at those dates. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. Subsequent Events On February 12, 2021, the Company’s Board of Directors authorized a dividend of 71¢ per share to shareholders of record on March 12, 2021. The Company’s management has evaluated transactions occurring subsequent to December 31, 2020 and determined that there were no events or transactions during that period that would have a material impact on the Company’s results of operations or financial position. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99% of sales were from firearms. Export sales represented approximately 4% of firearms 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. The Company manufactures investment castings made from steel alloys and metal injection molding (“MIM”) parts for internal use in its firearms and utilizes available capacity to manufacture and sell investment castings and MIM parts to unaffiliated, third-party customers. Castings were approximately 1% of the Company’s total sales for the year ended December 31, 2020. |
Preparation of Financial Statements | Preparation of Financial Statements The Company follows United States generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The significant accounting policies described below, together with the notes that follow, are an integral part of the consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the provisions of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which became effective January 1, 2018. Substantially all product sales are sold FOB (free on board) shipping point. Customary payment terms are 2% 30 days, net 40 days. Generally, all performance obligations are satisfied when product is shipped and the customer takes ownership and assumes the risk of loss. In some instances, sales include multiple performance obligations. The most common of these instances relates to sales promotion programs under which downstream customers are entitled to receive no charge products based on their purchases of certain of the 53 Table of Contents Company’s products from the independent distributors. The fulfillment of these no charge products is the Company’s responsibility. In such instances, the Company allocates the revenue of the promotional sales based on the estimated level of participation in the sales promotional program and the timing of the shipment of all of the firearms included in the promotional program, including the no charge firearms. Revenue is recognized proportionally as each performance obligation is satisfied, based on the relative customary price of each product. Customary prices are generally determined based on the prices charged to the independent distributors. The net change in contract liabilities for a given period is reported as an increase or decrease to sales. The Company accounts for cash sales discounts as a reduction in sales. Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred by the Company for the delivery of goods are classified as selling expenses. Federal excise taxes are excluded from net sales. |
Business Combination | Business Combination On September 26, 2020, the Company entered into an Asset Purchase Agreement (the "Agreement") with the Remington Outdoor Company, Inc. and each of the subsidiaries of the Remington Outdoor Company, Inc. (collectively, “Remington”) to purchase substantially all of the assets (the “Marlin Assets”) used to manufacture Marlin Firearms (the “Marlin Acquisition”). The agreement to purchase these assets emanated from the Remington Outdoor Company, Inc. bankruptcy and was approved by the United States Bankruptcy Court for the Northern District of Alabama on September 30, 2020. The Marlin Acquisition was conducted through a Bankruptcy Court-supervised process, subject to Bankruptcy Court-approved bidding procedures, approval of the transactions by the Bankruptcy Court, and the satisfaction of certain closing conditions. The Company closed on the Marlin Acquisition on November 23, 2020. The Agreement provided that, upon the terms and subject to the conditions set forth therein, Remington sold, transferred and assigned to the Company the Marlin Assets (as defined in the Agreement) for a purchase price of $28.3 million in cash. The Marlin Assets include the following assets, among other things, equipment, inventory, and all intellectual property related to Marlin, including the Marlin names and marks, and all derivatives thereof. The primary purpose of the Marlin Acquisition was to manufacture and sell Marlin branded firearms and generate shareholder value. The Marlin brand aligns with the Ruger brand and the Marlin product portfolio will widen the Company’s diverse product offerings. The transaction was funded by the Company with cash on hand and has been accounted for in accordance with ASC 805 - Business Combinations |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers interest-bearing deposits with financial institutions with remaining maturities of three months or less at the time of acquisition to be cash equivalents. |
Fair Value Measurements of Short-term Investments | Fair Value Measurements of Short-term Investments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. Fair value is established according to a hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. Level 3 inputs are given the lowest priority in the fair value hierarchy. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2020, all of the Company’s short-term investments are U.S. Treasury instruments (Level 1), maturing within one year. Such securities are classified as held to maturity, since the Company has the intent and ability to do so, and are carried at cost plus accrued interest, which approximates fair value. The fair value of inventory acquired as part of business combination is based on a third-party valuation utilizing the comparable sales method which is based on Level 2 and Level 3 inputs. The fair value of property, plant and equipment acquired as part of business combination is based on a third-party valuation utilizing the indirect method of cost approach, which is based on Level 2 and Level 3 inputs. The fair value of patents acquired as part of business combination is based on a third-party valuation utilizing the replacement cost method, which is based on Level 2 and Level 3 inputs. The fair value of the remaining intangible assets as part of business combination are based on a third-party valuation utilizing discounted cash flow methods that involves inputs, which are not observable in the market (Level 3). |
Accounts Receivable | Accounts Receivable The Company establishes an allowance for doubtful accounts based on the creditworthiness of its customers and historical experience. While the Company uses the best information available to make its evaluation, future adjustments to the allowance for doubtful accounts may be necessary if there are significant changes in economic and industry conditions or any other factors considered in the Company’s evaluation. Bad debt expense has been immaterial during each of the last three years. The Company mitigates its credit risk by maintaining credit insurance on most of its significant customers. |
Inventories | Inventories Substantially all of the Company’s inventories are valued at the lower of cost, principally determined by the last-in, first-out (LIFO) method, or market. Elements of cost in inventories include raw materials, direct labor and manufacturing overhead. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are carried at cost. Depreciation is computed over useful lives using the straight-line and declining balance methods predominately over 15 years for buildings, 7 years for machinery and equipment and 3 years for tools and dies. When assets are retired, sold or otherwise disposed of, their gross carrying values and related accumulated depreciation are removed from the accounts and a gain or loss on such disposals is recognized when appropriate. Maintenance and repairs are charged to operations; replacements and improvements are capitalized. |
Long-lived Assets | Long-lived Assets The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. In performing this review, the carrying value of the assets is compared to the projected undiscounted cash flows to be generated from the assets. If the sum of the undiscounted expected future cash flows is less than the carrying value of the assets, the assets are considered to be impaired. Impairment losses are measured as the amount by which the carrying value of the assets exceeds their fair value. The Company bases fair value of the assets on quoted market prices if available or, if not available, quoted market prices of similar assets. Where quoted market prices are not available, the Company estimates fair value using the estimated future cash flows generated by the assets discounted at a rate commensurate with the risks associated with the recovery of the assets. |
Goodwill | Goodwill Our goodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired. We assess goodwill for impairment on an annual basis during the fourth quarter of each year, and between annual tests whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists by the amount the fair value of a reporting unit to which goodwill has been allocated is less than their respective carrying values. The impairment for goodwill is limited to the total amount of goodwill allocated to the reporting unit. Goodwill impairment testing requires significant judgment and management estimates, including, but not limited to, the determination of (i) the number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the reporting units and (iii) the fair values of the reporting units. The estimates and assumptions described above, along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any resulting impairment losses. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of “temporary differences” by applying enacted statutory rates applicable to future years to temporary differences between the financial statement carrying amounts and the tax basis of the Company’s assets and liabilities. |
Product Liability | Product Liability The Company provides for product liability claims including estimated legal costs to be incurred defending such claims. The provision for product liability claims is charged to cost of products sold. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising expenses for 2020, 2019, and 2018, were $2.7 million, $2.6 million, and $2.9 million, respectively. |
Shipping Costs | Shipping Costs Costs incurred related to the shipment of products are included in selling expense. Such costs totaled $3.9 million, $3.9 million, and $4.8 million in 2020, 2019, and 2018, respectively. |
Research and Development | Research and Development In 2020, 2019, and 2018, the Company spent approximately $8.0 million, $8.2 million, and $8.5 million, respectively, on research and development activities relating to new products and the improvement of existing products. These costs are expensed as incurred. |
Earnings per Share | Earnings per Share Basic earnings per share is based upon the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the impact of options, restricted stock units, and deferred stock outstanding using the treasury stock method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases Topic 842 (“ASC 842”), which amends the existing accounting standards for leases. ASC 842 requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases (with the exception of short-term leases) and disclose key information about leasing arrangements, whereas under current standards, the Company’s operating leases were not recognized on its consolidated balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. ASC 842 is effective for years beginning after December 15, 2018, including interim periods within those fiscal years, and is to be applied using either a modified retrospective approach, or an optional transition method which allows an entity to apply the new standard at the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASC 842 in the first quarter of 2019 using this optional transition method. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualified. The Company elected the practical expedient to not separate lease and non-lease components for all of its leases. The right-of-use assets and lease liabilities for the lease portfolio recorded on its consolidated balance sheet as of January 1, 2019 was about $2 million, primarily related to real estate. The adoption of this pronouncement did not impact the Company’s consolidated statements of operations or its consolidated statement of cash flows. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The new guidance requires financial instruments measured at amortized cost basis to be presented at the net amount expected to be collected through application of the current expected credit losses model. The model requires an estimate of the credit losses expected over the life of an exposure or pool of exposures. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. This pronouncement is effective for fiscal years beginning after Dec. 15, 2019. The Company has completed its assessment and adopted the new guidance effective January 1, 2020. The adoption of the new guidance did not have a material impact to the Company. |
Acquisition of Marlin Assets (T
Acquisition of Marlin Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Purchase Price Consideration | The following table summarizes the Company's preliminary fair value of the assets acquired, as of November 23, 2020, for the Company’s Marlin Acquisition. Purchase Price Cash paid to sellers $ 28,300 Purchase Price Allocation Assets Acquired Inventory $ 11,400 Machinery and equipment 5,000 Tradename and trademarks 7,800 Patents 2,500 Customer Relationships 1,000 Goodwill 600 Net Assets Acquired $ 28,300 |
Schedule of Estimated Remaining Useful Lives | Intangible assets acquired in the Marlin Acquisition are reflected in Other Assets on the Company’s Consolidated Balance Sheet at December 31, 2020. Intangible assets are amortized over their estimated remaining useful lives using a straight-line methodology. Remaining Economic Useful Life Tradename and trademarks 20 years Patents 20 years Customer Relationships 15 years |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Recognized | The impact of the adoption of ASC 606 on revenue recognized during the years ended December 31, 2020 and December 31, 2019 is as follows: 2020 2019 2018 Contract liabilities with customers at January 1, $ 9,623 $ 7,477 $ 6,950 Revenue recognized (14,570 ) (16,352 ) (20,653 ) Revenue deferred 5,031 18,498 21,180 Contract liabilities with customers at December 31, $ 84 $ 9,623 $ 7,477 |
Trade Receivables, Net (Tables)
Trade Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Trade Receivables | Trade receivables consist of the following: December 31, 2020 2019 Trade receivables $ 59,442 $ 54,110 Allowance for doubtful accounts (400 ) (400 ) Allowance for discounts (1,166 ) (1,070 ) $ 57,876 $ 52,640 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: December 31, 2020 2019 Inventory at FIFO Finished goods $ 2,878 $ 13,131 Materials and products in process 77,609 65,880 Gross inventories 80,487 79,011 Less: LIFO reserve (48,016 ) (47,137 ) Less: excess and obsolescence reserve (3,394 ) (3,573 ) Net Inventories $ 29,077 $ 28,301 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following: December 31, 2020 2019 Land and improvements $ 2,686 $ 2,671 Buildings and improvements 55,076 53,692 Machinery and equipment 285,869 270,426 Dies and tools 50,212 45,693 Property, plant and equipment 393,843 372,482 Less allowances for depreciation (323,110 ) (298,568 ) Net property, plant and equipment $ 70,733 $ 73,914 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: December 31, 2020 2019 Patents, at cost $ 9,859 $ 7,181 Accumulated amortization (5,071 ) (4,780 ) Deposits on capital items 22,255 11,886 Right-of-use assets 2,124 2,610 Marlin trade name 7,800 - Other 4,655 3,441 $ 41,622 $ 20,338 |
Leased Assets (Tables)
Leased Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of right-of-use assets and related lease liabilities | The Company adopted the provisions of ASU 2016-02 using the effective interest method on January 1, 2019 and recorded right-of-use assets equal to the present value of the contractual liability for future lease payments. The table below presents the right-of-use assets and related lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2020: Balance Sheet Line Item December 31, 2020 Right-of-use assets Other assets $ 2,124 Operating lease liabilities Current portion Trade accounts payable and accrued expenses $ 451 Noncurrent portion Lease liabilities 1,724 Total operating lease liabilities $ 2,175 |
Schedule of operating lease liabilities | The Company’s leases generally do not provide an implicit interest rate, and therefore the Company calculates an incremental borrowing rate to determine the present value of its operating lease liabilities. The following table reconciles the undiscounted future minimum lease payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2020: 2021 $ 559 2022 244 2023 213 2024 215 2025 160 Thereafter 1,440 Total undiscounted future minimum lease payments 2,831 Less: Difference between undiscounted lease payments & the present value of future lease payments (656 ) Total operating lease liabilities $ 2,175 |
Trade Accounts Payable and Ac_2
Trade Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Trade Accounts Payable and Accrued Expenses | Trade accounts payable and accrued expenses consist of the following: December 31, 2020 2019 Trade accounts payable $ 12,796 $ 8,339 Federal excise taxes payable 14,332 10,670 Accrued other 9,950 10,762 $ 37,078 $ 29,771 |
Other Operating Income, net (Ta
Other Operating Income, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Income, net | Other operating income, net consists of the following: Year ended December 31, 2020 2019 2018 Gain (loss) on sale of operating assets $ 52 $ (54 ) $ 10 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Federal and State Income Tax Provision | The federal and state income tax provision consisted of the following: Year ended December 31, 2020 2019 2018 Current Deferred Current Deferred Current Deferred Federal $ 20,201 $ 3,696 $ 10,705 $ (1,911 ) $ 17,574 $ (3,265 ) State 6,519 167 2,455 (513 ) 3,859 (387 ) $ 26,720 $ 3,863 $ 13,160 $ (2,424 ) $ 21,433 $ (3,652 ) |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate varied from the statutory federal income tax rate as follows: Year ended December 31, 2020 2019 2018 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 4.4 3.6 4.0 Other items (0.1 ) 0.4 0.9 Effective income tax rate 25.3 % 25.0 % 25.9 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets Product Liability $ 285 $ 203 Employee compensation and benefits 2,548 2,263 Allowances for doubtful accounts and discounts 445 3,761 Inventories 954 978 Stock-based compensation 3,353 3,064 Other 1,443 1,637 Total deferred tax assets 9,028 11,906 Deferred tax liabilities: Depreciation 6,638 5,631 Other 860 882 Total deferred tax liabilities 7,498 6,513 Net deferred tax assets $ 1,530 $ 5,393 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share | Set forth below is a reconciliation of the numerator and denominator for the basic and diluted earnings per share calculations for the periods indicated: Year ended December 31, 2020 2019 2018 Numerator: Net income $ 90,398 $ 32,291 $ 50,933 Denominator: Weighted average number of common shares outstanding – Basic 17,486,054 17,461,421 17,450,658 Dilutive effect of options and restricted stock units outstanding under the Company’s employee compensation plans 283,802 317,411 203,973 Weighted average number of common shares outstanding – Diluted 17,769,856 17,778,832 17,654,631 |
Stock Repurchases (Tables)
Stock Repurchases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stock Repurchases [Abstract] | |
Schedule of Repurchase of Common Stock | In 2019 the Company repurchased shares of its common stock. Details of these purchases are as follows: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program Third Quarter 2019 July 28 to August 24 44,500 $ 44.83 44,500 Total 44,500 $ 44.83 44,500 $ 86,710,000 |
Compensation Plans (Tables)
Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the stock option activity of the 2007 SIP: Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2017 11,838 $ 8.95 $ 6.69 1.3 Granted — — — — Exercised (4,616 ) 8.28 6.90 — Canceled (1,750 ) 8.69 4.57 0.3 Outstanding at December 31, 2018 5,472 9.60 7.20 0.9 Granted — — — — Exercised (5,472 ) 9.60 7.20 — Canceled — — — — Outstanding at December 31, 2019 — — — — Granted — — — — Exercised — — — — Canceled — — — — Outstanding at December 31, 2020 — — — — Exercisable Options Outstanding at December 31, 2020 — — — — Non-Vested Options Outstanding at December 31, 2020 — $ — $ — — |
Operating Segment Information (
Operating Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segment Financial Information | The Company evaluates performance and allocates resources, in part, based on income (loss) before taxes. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (see Note 1). Intersegment sales are recorded at the Company’s cost plus a fixed profit percentage. Year ended December 31, 2020 2019 2018 Net Sales Firearms $ 565,863 $ 406,326 $ 490,607 Castings Unaffiliated 3,005 4,180 5,028 Intersegment 22,254 18,425 22,946 25,259 22,605 27,974 Eliminations (22,254 ) (18,425 ) (22,946 ) $ 568,868 $ 410,506 $ 495,635 Income (Loss) Before Income Taxes Firearms $ 120,732 $ 40,814 $ 70,311 Castings (1,000 ) (797 ) (2,240 ) Corporate 1,249 3,010 643 $ 120,981 $ 43,027 $ 68,714 Identifiable Assets Firearms $ 174,500 $ 163,792 $ 166,975 Castings 11,959 11,332 10,850 Corporate 161,799 173,837 157,707 $ 348,258 $ 348,961 $ 335,532 Depreciation Firearms $ 25,126 $ 27,149 $ 29,542 Castings 2,158 1,875 2,083 $ 27,284 $ 29,024 $ 31,625 Capital Expenditures Firearms $ 19,253 $ 19,570 $ 9,689 Castings 4,976 726 852 $ 24,229 $ 20,296 $ 10,541 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following is a tabulation of the unaudited quarterly results of operations for the two years ended December 31, 2020: Three Months Ended 3/28/20 6/27/20 9/26/20 12/31/20 Net Sales $ 123,639 $ 130,264 $ 145,705 $ 169,260 Gross profit 36,009 40,085 51,152 64,195 Net income 15,338 18,594 24,753 31,713 Basic earnings per share 0.88 1.06 1.42 1.81 Diluted earnings per share $ 0.87 $ 1.05 $ 1.39 $ 1.78 Three Months Ended 3/30/19 6/29/19 9/28/19 12/31/19 Net Sales $ 114,039 $ 96,329 $ 94,999 $ 105,139 Gross profit 32,597 22,302 19,867 24,782 Net income 13,033 6,233 4,817 8,208 Basic earnings per share 0.75 0.36 0.28 0.47 Diluted earnings per share $ 0.74 $ 0.35 $ 0.27 $ 0.46 |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Reconciliation of Product Liability Reserve | Balance Sheet Roll-forward for Product Liability Reserve Cash Payments Balance Beginning of Year (a ) Accrued Legal Expense (Income) (b) Legal Fees (c) Settlements (d) Balance End of Year (a) 2018 $ 819 731 (183 ) (195 ) $ 1,172 2019 $ 1,172 (37 ) (240 ) (77 ) $ 818 2020 $ 818 300 8 — $ 1,126 |
Schedule of Product Liability Expense | Income Statement Detail for Product Liability Expense Accrued Legal Expense (b) Insurance Premium Expense (e) Total Product Liability Expense 2018 $ 731 783 $ 1,514 2019 $ (37 ) 755 $ 718 2020 $ 300 839 $ 1,139 Notes (a) The beginning and ending liability balances represent accrued legal fees only. Settlements and administrative costs are expensed as incurred. Only in rare instances is an accrual established for settlements. (b) The expense accrued in the liability is for legal fees only. In 2019, the costs incurred related to cases that were settled or dismissed were less than the amounts accrued for these cases in prior years. (c) Legal fees represent payments to outside counsel related to product liability matters. (d) Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full and complete release of liability. (e) Insurance expense represents the cost of insurance premiums. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Advertising expenses | $ 2.7 | $ 2.6 | $ 2.9 |
Shipping costs | 3.9 | 3.9 | 4.8 |
Research and development | 8 | $ 8.2 | 8.5 |
Right-of-use asset in exchange for lease liability | $ 2 | ||
Purchase price | $ 28.3 | ||
Building [Member] | |||
Segment Reporting Information [Line Items] | |||
Useful life | 15 years | ||
Machinery and Equipment [Member] | |||
Segment Reporting Information [Line Items] | |||
Useful life | 7 years | ||
Tools, Dies and Molds [Member] | |||
Segment Reporting Information [Line Items] | |||
Useful life | 3 years | ||
Unaffiliated Castings [Member] | Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 1.00% | ||
Firearms [Member] | Sales [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 99.00% | ||
Firearms [Member] | Sales [Member] | Non-US [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 4.00% |
Acquisition of Marlin Assets (S
Acquisition of Marlin Assets (Schedule of Allocation of Purchase Price Allocation) (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Nov. 23, 2020 | Dec. 31, 2020 | |
Purchase price | ||
Cash paid to sellers | $ 28,300 | |
Marlin Acquisition [Member] | ||
Purchase price | ||
Cash paid to sellers | $ 28,300 | |
Assets Acquired | ||
Inventory | 11,400 | |
Machinery and equipment | 5,000 | |
Goodwill | 600 | |
Net Assets Acquired | 28,300 | |
Marlin Acquisition [Member] | Tradename and trademarks [Member] | ||
Assets Acquired | ||
Intangible assets | 7,800 | |
Marlin Acquisition [Member] | Patents [Member] | ||
Assets Acquired | ||
Intangible assets | 2,500 | |
Marlin Acquisition [Member] | Customer Relationships [Member] | ||
Assets Acquired | ||
Intangible assets | $ 1,000 |
Acquisition of Marlin Assets _2
Acquisition of Marlin Assets (Schedule of Estimated Remaining Useful Lives) (Details) - Marlin Acquisition [Member] | 12 Months Ended |
Dec. 31, 2020 | |
Tradename and trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 20 years |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 20 years |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets useful life | 15 years |
Acquisition of Marlin Assets (N
Acquisition of Marlin Assets (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Marlin Acquisition [Member] | |
Business Acquisition [Line Items] | |
Acquisition related costs | $ 1.7 |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred contract liability | $ 5 | $ 18.5 | $ 21.2 |
Revenue previously deferred | 14.6 | 16.4 | 20.7 |
Net (increase) decrease in firearms sales | (9.6) | 2.1 | 0.5 |
Promotional expenses reclassified | $ 0.1 | $ 9.6 | $ 7.4 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers (Schedule of Revenue Recognized) (Details) - After Adjustment [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Contract liabilities with customers at January 1, | $ 9,623 | $ 7,477 | $ 6,950 |
Revenue recognized | (14,570) | (16,352) | (20,653) |
Revenue deferred | 5,031 | 18,498 | 21,180 |
Contract liabilities with customers at December 31, | $ 84 | $ 9,623 | $ 7,477 |
Trade Receivables, Net (Details
Trade Receivables, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 59,442 | $ 54,110 |
Allowance for doubtful accounts | (400) | (400) |
Allowance for discounts | (1,166) | (1,070) |
Trade receivables, net | $ 57,876 | $ 52,640 |
Accounts Receivable [Member] | Customer One [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of customers | 30.00% | 31.00% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of customers | 15.00% | 18.00% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of customers | 14.00% | 12.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | |
Inventory at FIFO | ||
Finished goods | $ 13,131 | $ 2,878 |
Materials and products in process | 65,880 | 77,609 |
Gross inventories | 79,011 | 80,487 |
Less: LIFO reserve | (47,137) | (48,016) |
Less: excess and obsolescence reserve | (3,573) | (3,394) |
Net inventories | 28,301 | $ 29,077 |
Effect of liquidation of LIFO inventory | $ 200 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 393,843 | $ 372,482 |
Less allowances for depreciation | (323,110) | (298,568) |
Net property, plant and equipment | 70,733 | 73,914 |
Land and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 2,686 | 2,671 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 55,076 | 53,692 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 285,869 | 270,426 |
Dies and Tools [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 50,212 | $ 45,693 |
Other Assets (Narrative) (Detai
Other Assets (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Patent amortization | $ 0.3 | $ 0.3 | $ 0.3 |
Patents [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Estimated accumulated amortization, 2021 | 0.4 | ||
Estimated accumulated amortization, 2022 | 0.4 | ||
Estimated accumulated amortization, 2023 | 0.4 | ||
Estimated accumulated amortization, 2024 | 0.4 | ||
Estimated accumulated amortization, 2025 | 0.4 | ||
Trade name [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Estimated accumulated amortization, 2021 | 0.4 | ||
Estimated accumulated amortization, 2022 | 0.4 | ||
Estimated accumulated amortization, 2023 | 0.4 | ||
Estimated accumulated amortization, 2024 | 0.4 | ||
Estimated accumulated amortization, 2025 | 0.4 | ||
Customer Relationships [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Estimated accumulated amortization, 2021 | 0.1 | ||
Estimated accumulated amortization, 2022 | 0.1 | ||
Estimated accumulated amortization, 2023 | 0.1 | ||
Estimated accumulated amortization, 2024 | 0.1 | ||
Estimated accumulated amortization, 2025 | $ 0.1 |
Other Assets (Schedule of Other
Other Assets (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Patents, at cost | $ 9,859 | $ 7,181 |
Accumulated amortization | (5,071) | (4,780) |
Deposits on capital items | 22,255 | 11,886 |
Right-of-use assets | 2,124 | 2,610 |
Marlin trade name | 7,800 | |
Other | 4,655 | 3,441 |
Other assets | $ 41,622 | $ 20,338 |
Leased Assets (Schedule of righ
Leased Assets (Schedule of right-of-use assets and related lease liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leased Assets [Line Items] | ||
Right-of-use assets | $ 2,124 | $ 2,610 |
Operating lease liabilities | ||
Noncurrent portion | 1,724 | $ 2,176 |
Total operating lease liabilities | $ 2,175 | |
Weighted average remaining lease term of operating leases | 11 years 6 months | |
Other Assets [Member] | ||
Operating Leased Assets [Line Items] | ||
Right-of-use assets | $ 2,124 | |
Trade accounts payable and accrued expenses [Member] | ||
Operating lease liabilities | ||
Current portion | $ 451 |
Leased Assets (Schedule of oper
Leased Assets (Schedule of operating lease liabilities) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Leases [Abstract] | |
2021 | $ 559 |
2022 | 244 |
2023 | 213 |
2024 | 215 |
2025 | 160 |
Thereafter | 1,440 |
Total undiscounted future minimum lease payments | 2,831 |
Less: Difference between undiscounted lease payments & the present value of future lease payments | (656) |
Total operating lease liabilities | $ 2,175 |
Trade Accounts Payable and Ac_3
Trade Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 12,796 | $ 8,339 |
Federal excise taxes payable | 14,332 | 10,670 |
Accrued other | 9,950 | 10,762 |
Trade accounts payable and accrued expenses | $ 37,078 | $ 29,771 |
Line of Credit (Details)
Line of Credit (Details) - Line of Credit [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | |
Credit facility with a bank | $ 40 |
Description of interest rate of credit facility | LIBOR |
Line of credit interest rate (in percent) | 0.14763% |
Line of credit basis points | 1.50% |
Line of credit unused portion per year (in percent) | 0.25% |
Revolving credit facility, expiration date | Sep. 30, 2021 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Expenses related to employee benefits plan | $ 3.3 | $ 3.2 | $ 3.1 |
Discretionary contributions to employee benefit plan | $ 5.6 | $ 5 | $ 5.3 |
Other Operating Income, net (De
Other Operating Income, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Gain (loss) on sale of operating assets | $ 52 | $ (54) | $ 10 |
Income Taxes (Schedule of Feder
Income Taxes (Schedule of Federal and State Income Tax Provision) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal, current | $ 20,201 | $ 10,705 | $ 17,574 |
State, current | 6,519 | 2,455 | 3,859 |
Current | 26,720 | 13,160 | 21,433 |
Deferred: | |||
Federal, deferred | 3,696 | (1,911) | (3,265) |
State, deferred | 167 | (513) | (387) |
Deferred | $ 3,863 | $ (2,424) | $ (3,652) |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 4.40% | 3.60% | 4.00% |
Other items | (0.10%) | 0.40% | 0.90% |
Effective income tax rate | 25.30% | 25.00% | 25.90% |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Product liability | $ 285 | $ 203 |
Employee compensation and benefits | 2,548 | 2,263 |
Allowances for doubtful accounts and discounts | 445 | 3,761 |
Inventories | 954 | 978 |
Stock-based compensation | 3,353 | 3,064 |
Other | 1,443 | 1,637 |
Total deferred tax assets | 9,028 | 11,906 |
Deferred tax liabilities: | ||
Depreciation | 6,638 | 5,631 |
Other | 860 | 882 |
Total deferred tax liabilities | 7,498 | 6,513 |
Net deferred tax assets | $ 1,530 | $ 5,393 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income tax payments | $ 30.6 | $ 16 | $ 18.1 | ||
Statutory corporate tax rate | 21.00% | 21.00% | 21.00% | ||
Subsequent Event [Member] | |||||
Estimated effective tax rate | 25.00% | ||||
Maximum [Member] | |||||
Statutory corporate tax rate | 35.00% | ||||
Minimum [Member] | |||||
Statutory corporate tax rate | 21.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 31, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||||||||||
Net income | $ 31,713 | $ 24,753 | $ 18,594 | $ 15,338 | $ 8,208 | $ 4,817 | $ 6,233 | $ 13,033 | $ 90,398 | $ 32,291 | $ 50,933 |
Denominator: | |||||||||||
Weighted average number of common shares outstanding - Basic | 17,486,054 | 17,461,421 | 17,450,658 | ||||||||
Dilutive effect of options and restricted stock units outstanding under the Company's employee compensation plans | 283,802 | 317,411 | 203,973 | ||||||||
Weighted average number of common shares outstanding - Diluted | 17,769,856 | 17,778,832 | 17,654,631 |
Stock Repurchases (Details)
Stock Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Aug. 24, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||
Total Number of Shares Purchased | 44,500 | 44,500 | |
Average Price Paid Per Share | $ 44.83 | $ 44.83 | |
Maximum Dollar Value of Shared That May Yet Be Purchased Under the Program | $ 87,000 | ||
Publicly Announced Program [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Total Number of Shares Purchased as Part of Publicly Announced Program | 44,500 | 44,500 | |
Maximum Dollar Value of Shared That May Yet Be Purchased Under the Program | $ 86,710 |
Compensation Plans (Details)
Compensation Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | |||||
Compensation expense recognized | $ 6.1 | $ 6.3 | $ 5.8 | ||
Stock Incentive Plan 2017 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares reserved for future issuance | 750,000 | ||||
Shares available for future grants | 352,000 |
Compensation Plans (Schedule of
Compensation Plans (Schedule of Stock Option Activity) (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||||
Outstanding at Beginning of year | 5,472 | 11,838 | ||
Granted | ||||
Exercised | (5,472) | (4,616) | ||
Canceled | (1,750) | |||
Outstanding at End of year | 5,472 | 11,838 | ||
Exercisable Options Outstanding at December 31, 2020 | ||||
Non-Vested Options Outstanding at December 31, 2020 | ||||
Weighted-Average Exercise Price | ||||
Outstanding at Beginning of year | $ 9.60 | $ 8.95 | ||
Granted | ||||
Exercised | 9.60 | 8.28 | ||
Canceled | 8.69 | |||
Outstanding at End of year | 9.60 | $ 8.95 | ||
Exercisable Options Outstanding at December 31, 2020 | ||||
Non-Vested Options Outstanding at December 31, 2020 | ||||
Weighted-Average Grant Date Fair Value | ||||
Outstanding at Beginning of year | 7.20 | 6.69 | ||
Granted | ||||
Exercised | 7.20 | 6.90 | ||
Canceled | 4.57 | |||
Outstanding at End of year | $ 7.20 | $ 6.69 | ||
Exercisable Options Outstanding at December 31, 2020 | ||||
Non-Vested Options Outstanding at December 31, 2020 | ||||
Weighted-Average Remaining Contractual Life | ||||
Canceled | 3 months 18 days | |||
Outstanding | 10 months 24 days | 1 year 3 months 18 days |
Compensation Plans (Deferred St
Compensation Plans (Deferred Stock) (Details) - Deferred Stock [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Compensation expense | $ 0.9 | $ 0.7 | $ 0.7 |
Unrecognized compensation expense | $ 0.7 | ||
Unrecognized compensation cost, recognition period | 3 years | ||
Director [Member] | Vesting in May 2021 [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Deferred stock awards issued | 6,244 | 6,751 | |
Director [Member] | Vesting in May 2023 [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Deferred stock awards issued | 8,078 | ||
Director [Member] | Vesting in May 2020 [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Deferred stock awards issued | 6,337 | ||
Director [Member] | Vesting in May 2022 [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Deferred stock awards issued | 7,720 | ||
Director [Member] | Vesting in May 2019 [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Deferred stock awards issued | 5,767 |
Compensation Plans (Restricted
Compensation Plans (Restricted Stock Units) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense recognized | $ 6.1 | $ 6.3 | $ 5.8 |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units issued | 95,000 | 68,000 | 172,000 |
Vesting period of compensation expense not yet recognized | 2 years 3 months 18 days | ||
Unrecognized compensation expense | $ 7 | ||
Restricted Stock Units (RSUs) [Member] | 2020 Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense recognized | 1.1 | ||
Unrecognized compensation expense | $ 5.7 | ||
Restricted Stock Units (RSUs) [Member] | 2020 Grants [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 24 months | ||
Restricted Stock Units (RSUs) [Member] | 2020 Grants [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 26 months | ||
Restricted Stock Units (RSUs) [Member] | 2019 Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense recognized | $ 1 | ||
Unrecognized compensation expense | $ 3.7 | ||
Restricted Stock Units (RSUs) [Member] | 2019 Grants [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 24 months | ||
Restricted Stock Units (RSUs) [Member] | 2019 Grants [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 26 months | ||
Restricted Stock Units (RSUs) [Member] | 2018 Grants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense recognized | $ 2.2 | ||
Unrecognized compensation expense | $ 8.1 | ||
Restricted Stock Units (RSUs) [Member] | 2018 Grants [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 24 months | ||
Restricted Stock Units (RSUs) [Member] | 2018 Grants [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of compensation expense not yet recognized | 26 months |
Operating Segment Information_2
Operating Segment Information (Schedule of Operating Segment Financial Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 31, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 169,260 | $ 145,705 | $ 130,264 | $ 123,639 | $ 105,139 | $ 94,999 | $ 96,329 | $ 114,039 | $ 568,868 | $ 410,506 | $ 495,635 |
Income (Loss) Before Income Taxes | 120,981 | 43,027 | 68,714 | ||||||||
Identifiable Assets | 348,258 | 348,961 | 348,258 | 348,961 | 335,532 | ||||||
Depreciation | 27,284 | 29,024 | 31,625 | ||||||||
Payments to Acquire Property, Plant, and Equipment | 24,229 | 20,296 | 10,541 | ||||||||
Intersegment Elimination [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | (22,254) | (18,425) | (22,946) | ||||||||
Firearms [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 565,863 | 406,326 | 490,607 | ||||||||
Income (Loss) Before Income Taxes | 120,732 | 40,814 | 70,311 | ||||||||
Identifiable Assets | 174,500 | 163,792 | 174,500 | 163,792 | 166,975 | ||||||
Depreciation | 25,126 | 27,149 | 29,542 | ||||||||
Payments to Acquire Property, Plant, and Equipment | 19,253 | 19,570 | 9,689 | ||||||||
Unaffiliated Castings [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 3,005 | 4,180 | 5,028 | ||||||||
Income (Loss) Before Income Taxes | (1,000) | (797) | (2,240) | ||||||||
Identifiable Assets | 11,959 | 11,332 | 11,959 | 11,332 | 10,850 | ||||||
Depreciation | 2,158 | 1,875 | 2,083 | ||||||||
Payments to Acquire Property, Plant, and Equipment | 4,976 | 726 | 852 | ||||||||
Unaffiliated Castings [Member] | Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 25,259 | 22,605 | 27,974 | ||||||||
Unaffiliated Castings [Member] | Intersegment Elimination [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 22,254 | 18,425 | 22,946 | ||||||||
Corporate [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income (Loss) Before Income Taxes | 1,249 | 3,010 | 643 | ||||||||
Identifiable Assets | $ 161,799 | $ 173,837 | $ 161,799 | $ 173,837 | $ 157,707 |
Operating Segment Information_3
Operating Segment Information (Narrative) (Details) - item | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue, Major Customer [Line Items] | |||
Number of Operating Segments | 2 | ||
Sales Revenue, Net [Member] | United States [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of sales | 95.00% | 95.00% | 95.00% |
Sales Revenue, Net [Member] | Sports South [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of sales | 22.00% | 22.00% | 16.00% |
Sales Revenue, Net [Member] | Lipseys [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of sales | 22.00% | 26.00% | 20.00% |
Sales Revenue, Net [Member] | Davidsons [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of sales | 18.00% | 15.00% | 21.00% |
Quarterly Results of Operatio_3
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 31, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total net sales | $ 169,260 | $ 145,705 | $ 130,264 | $ 123,639 | $ 105,139 | $ 94,999 | $ 96,329 | $ 114,039 | $ 568,868 | $ 410,506 | $ 495,635 |
Gross profit | 64,195 | 51,152 | 40,085 | 36,009 | 24,782 | 19,867 | 22,302 | 32,597 | 191,441 | 99,548 | 134,358 |
Net income | $ 31,713 | $ 24,753 | $ 18,594 | $ 15,338 | $ 8,208 | $ 4,817 | $ 6,233 | $ 13,033 | $ 90,398 | $ 32,291 | $ 50,933 |
Basic earnings per share | $ 1.81 | $ 1.42 | $ 1.06 | $ 0.88 | $ 0.47 | $ 0.28 | $ 0.36 | $ 0.75 | $ 5.17 | $ 1.85 | $ 2.92 |
Diluted earnings per share | $ 1.78 | $ 1.39 | $ 1.05 | $ 0.87 | $ 0.46 | $ 0.27 | $ 0.35 | $ 0.74 | $ 5.09 | $ 1.82 | $ 2.88 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
National Rifle Association [Member] | |||
Related Party Transaction [Line Items] | |||
Amount of payments | $ 0.6 | $ 0.8 | $ 0.7 |
Contingent Liabilities (Narrati
Contingent Liabilities (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | |||
Minimum limit of per claim for providing insurance coverage on annual basis | $ | $ 5,000 | ||
Maximum limit of aggregate loss incurred annually for providing insurance coverage on annual basis | $ | 10,000 | ||
Total amount of damages claimed | $ | 1,100 | $ 100 | |
Total Product Liability Expense | $ | $ 1,139 | $ 718 | $ 1,514 |
Number of new lawsuits | 1 | 2 | |
Number of settled lawsuits | 1 | 3 | |
Number of defendants | 3 | 3 | |
Traditional Lawsuits [Member] | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 2 | 2 | |
Municipal Lawsuits [Member] | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 1 | 1 |
Contingent Liabilities (Reconci
Contingent Liabilities (Reconciliation of Product Liability Reserve) (Details) - Product Liability Reserve [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Period | [1] | $ 818 | $ 1,172 | $ 819 |
Accrued Legal Expense (Income) | [2] | 300 | (37) | 731 |
Legal Fees | [3] | 8 | (240) | (183) |
Settlements | [4] | (77) | (195) | |
Balance at End of Period | [1] | $ 1,126 | $ 818 | $ 1,172 |
[1] | The beginning and ending liability balances represent accrued legal fees only. Settlements and administrative costs are expensed as incurred. Only in rare instances is an accrual established for settlements. | |||
[2] | The expense accrued in the liability is for legal fees only. In 2019, the costs incurred related to cases that were settled or dismissed were less than the amounts accrued for these cases in prior years. | |||
[3] | Legal fees represent payments to outside counsel related to product liability matters. | |||
[4] | Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full and complete release of liability. |
Contingent Liabilities (Schedul
Contingent Liabilities (Schedule of Product Liability Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Product Liability Contingency [Line Items] | ||||
Total Product Liability Expense | $ 1,139 | $ 718 | $ 1,514 | |
Accrued Legal Expense [Member] | ||||
Product Liability Contingency [Line Items] | ||||
Total Product Liability Expense | [1] | 300 | (37) | 731 |
Insurance Premium Expense [Member] | ||||
Product Liability Contingency [Line Items] | ||||
Total Product Liability Expense | [2] | $ 839 | $ 755 | $ 783 |
[1] | The expense accrued in the liability is for legal fees only. In 2019, the costs incurred related to cases that were settled or dismissed were less than the amounts accrued for these cases in prior years. | |||
[2] | Insurance expense represents the cost of insurance premiums. |
Subsequent Events (Details)
Subsequent Events (Details) | Feb. 12, 2021$ / shares |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Dividend authorized | $ 0.71 |