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RGR Sturm, Ruger & Co.

Participants
Christopher John Killoy Sturm, Ruger & Co., Inc.
Kevin B. Reid, Sr. Sturm, Ruger & Co., Inc.
Thomas A. Dineen Sturm, Ruger & Co., Inc.
Brian Gary Rafn Morgan-Dempsey Capital Management LLC
Rommel Dionisio Aegis Capital Corp.
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Sturm, Ruger Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time.

As a reminder, this conference call may be recorded. I would now like to turn the conference over to Chris Killoy, President and CEO.

begin. may You

Christopher John Killoy

on get welcome quarter and ask will Sturm, & overview the then Ruger Reid, you update our let's Tom Good second Financial Chief conference to call. second caution read questions. on to operations, XXXX General to and of Officer, statements,. I get Company Then our Dineen, morning Counsel, the forward-looking would quarter then to And Kevin, Kevin and results. give the discuss will market an we'll your I the the financial started. state of our like

Kevin B. Reid, Sr.

We are remind that from in state Chris. forward-looking statements. to important forward-looking predictions hopes, the that meeting the or such statements. company's statements or management's intentions, It actual materially is Sure, made differ like that results to could the beliefs, those note this future course company's in the of projected expectations, everyone of

XX, our which the XXXX to the and fiscal disclaims website. that Form the forward-looking www.sec.gov. can are SEC forward-looking all the information contained could EBITDA be net quarter ended on also June of the at December year for to, in ended or to the Form not our December the do in GAAP the cause for factors to to or on Chris? non-GAAP XX, XX, XX-Q limited to at company's Form from filings, those results actual time including, statements. found XX, company's in statements but the note website and, Additional update course, company obtained SEC may concerning the XX-Q income www.ruger.com/corporate, for the differ these be is responsibility reports EBITDA. company that XX-K XXXX. Furthermore, of posted documents by contacting of Copies SEC, ended or our reconciliation company website reference the for Form XXXX We the Please XXXX, XX-K time June ended from materially the non-GAAP year

Christopher John Killoy

Kevin. Thank you,

of a quarter. provide will second the financial Tom Now, summary

Thomas A. Dineen

Thanks, Chris.

of million the $XXX.X were quarter diluted second were For per XXXX, earnings sales share. $X.XX net and

prior quarter In comparable earnings benefited tax as known XX% by income to The million EPS in EPS XXXX, were increased $X.XX. $XXX.X per The were increased share. shares stock common increased the second federal by rate million new the EPS $X.XX XX% earnings the ASC $X.XX. repurchase adoption year of net reduced per of the revenue XXXX XXX, by And X.X and share For the period, of recognition standard, sales following. by diluted of $X.XX. from

first half the of diluted $XXX.X For share. were sales per earnings and XXXX, were $X.XX million net

were period corresponding the were net per share. and diluted $X.XX sales For $XXX.X million in XXXX, earnings

$XX.X in For sheet, sales, XX, at XX% to equivalents cash sales, the second second million. cash quarter our or compared and million, or EBITDA quarter of June of XXXX, XXXX. totaled of the XX% $XX.X of was $XXX.X XXXX, million, The balance our

operations. to per XXXX, share. $XXX.X first X.X:X, was million of equity equates to $XX.XX returned book value company million, payment of its have and debt. we a shareholders which ratio XXXX, XXXX, In the stockholders' of Cash XX, cash dividends. generated $XX half shareholders, current the from million June first At Our totaled the of $X.X to no we the of through in returned half

record payable $X.XX XXXX, August a per as quarterly shareholders on XX, Our share board of of of XX, XXXX. August dividend for directors declared

financial quarter-to-quarter. a That's the approximately the As of updates and Chris? quarterly XX% income, is therefore dividend reminder, second varies quarter. our for net

Christopher John Killoy

Thanks, Tom.

enter second are and lower the strategy second our XXXX, the condition year. reduce to and with second production financial We the of results In a we pleased the our quarter of workforce. we quarter financial implemented half as

healthy soft half overextended our warehouses demand, latter the We in balance in well with inventories and performed at increased the from ended quarter reduced the the comparable to and a independent independent of and X% promotions we estimated retailers unit distributor of strong with relatively result, the XXXX sell-through second sell-through without distributors, distributors sheet, year from XXXX, of becoming year a period at level. in a the the As prior of discounts. our period. products Demand, a

X% For from National System first of decreased half or in The comparable Criminal XXXX from the Background retailers sell-through products the the independent the prior checks, same year period, our distributors Check of checks, X%. Instant background unit estimated to NICS decreased period. the

both past Rifle. second strong For December, attributable outperformance reception ECXs PCC, we of Security-X Precision the half Carbine, four this the that the referred new decreased launched and first the of and our same period, XXXX major Caliber NICS as X%. Pistol to the Rimfire of We quarter commonly NICS is the pistol, the pistol, believe checks in products to

represented $XX.X sales XXXX. first million, or sales, product New firearm in of half XX% of the

the base reviews products like years, sell-through and that just of products were included from the Derivatives in our our not new new inventory the the line that are products manage levels the independent of product our past New major production primarily to estimated inventory, we mentioned. and include introduced sales four extensions calculation. distributors and sales Production retailers. through in semimonthly I only two

Distributor products the half The below our total during these the was finished of the for of units X% inventory increase, XX,XXX year. this unlike capital expenditures quarter half We the demand. inventory the XX,XXX by expenditures, Capital the inventories first through first products production of to almost goods our The half the $X.X in million, combined the levels warehouses distributors' of sales were is very low plan year half inventory XX% of Remember, we in same This unit We for in XXXX strongest of also period. unit last is the by a the the of all units reduction quarter the to us. decrease go most our last allowed domestic latter decreased of and XXXX. over production review half since replenish effectively first distribution. reduced June. competitors, which in of second firearm inventories. reviews, XXX,XXX decreased production of first independent at and XXXX. on in of from our first XX%. our production Based independent to Despite total our increase the distributors increased XXXX units inventories our

new in However, factors. this activity importance it to development lack nor Rather, indicative a be attributed product mindset products. the a two of is to about not our key of of related can new change

our the new those capital quarter we December. The were introduced in first Earlier that XXXX expenditures last high. totaled major the significantly products capital fourth XXXX. discussed four capital the recognized been If First, related products our to that would have of or those is lagged which expenditures year-to-date Consequently, two timing. million, in $XX quarter is new products one greater. we into XXXX, uncommonly expenditures of

Remember, income strong. couple generation working the year machinery and rate; equipment. receivable half collections, the of cash The the of units solid the Cash, in generation capital a of just contributors built federal the reduction, operating of we demand year; some accounts million inventory in XXXX. reduced outstripped underutilized the years ago, minutes repurposing of industry; first our is and been few reason production million low $XX second expenditures, to which key the mentioned as of continued better by the in very employ the first half which cash are The performance, has was equipment. despite solid the as were tax was level we headwinds Production the over X.X and bolstered our past in reduced we relatively Tom covered.

more is our than support of normal our Our philosophy capital we million not cash changed. allocation need operations. balance Nevertheless, daily $XXX to has

assets is responsibility creation shareholder primary of and of our value. Our the the stewardship shareholders'

employ opportunities the constantly get able If that Operator, question? point have return the we not the capital. cash for looking be to to shareholders will where we with we strong We returns capital, our we generate will to our form first we of in dividends. may a decide to are our

Operator

comes from line Our the Rafn Morgan-Dempsey. of first Brian question of

line open. Your is now

Brian Gary Rafn

Tom. Good Good morning, morning, Chris.

Christopher John Killoy

Good morning, Brian.

Thomas A. Dineen

morning, Good Brian.

Brian Gary Rafn

the days strategic maybe increased booked with tempo is that and tone are of two maybe a of business through darkest sense. or the give cadence kind maybe destocking kind the then the Give through sense, quarters and maybe inventory of orders business the some MSRP the sense, Yeah. month-by-month, your overall kind quarter of of me of of your we and from the discounts more just of Chris, normalizing,

Christopher John Killoy

what months of return We Brian. we we But think saw through July, seasonality. call Thanks, you I the slow Well, I would are and don't industry. this the for as typically quarter, to year always monthly normal August second what a disclose that know, firearms June, saw results. the

inventory our warehouses, pretty well what we very year with levels at of inventory. production because we towards However, as our the of closely and inventory, both Ruger eye QX as fairly in I this saw comfortable with terms our our in each we think an balanced distributors, at felt we a ended as inventory as distributors' manage

a that and were less And So not one and of we a the other an we last that then X. did last and driven as programs time had a off winter we just the may in couple the But end spring year which recall, wholesale discounting implement level. at fall there the day, a we This concluded promotionally is the launched promotion, years, environment, in overall little out program. of indicative We at summer year summer have better May. hopefully of kicking things last midst normal this done of we've additional we you our August summer, promotional of the had the promotion not less program. retail did

Brian Gary Rafn

you. No, that. I appreciate Got

call in have the it any guys planning, summer operations sales/inventory planned you idle the of planning. you think shutdowns I SIOP Do any plants? your

Christopher John Killoy

We did Newport up that the that, week We Brian. July through Xth plant. of during in just already went the

as I So, operations Prescott shutdown. Mayodan had, think, normal not did well.

But of just to things So shutdowns them year. to and other some for take maintenance care of allow in nature. matters that, it planned the was additional that no up than Newport

Brian Gary Rafn

Yeah.

Okay.

Okay.

the been your sense of say heightened more appetite amongst past you're launches. frenzied there's new the kind business wholesalers in productive your focused, Given at of a really Would extremely a so product and this in when you you guys retailers, kind of for the product new environment maybe in you've more pace? What's sense?

Christopher John Killoy

the the down demand as business, out chasing up as more products products to things I kind slow important day. of think the are production. retail trying new keep quite when normalized think sometimes level, I rule When with the I maybe at new a and not you're overall it's to consumer opposite. just really mean, pace,

And in items in-demand most as done both Pistol Caliber up We've well a result, level, as the so, well. the New of like at produced Hampshire extremely account the one have independent got Carbine products the as probably retailers. national

with pleased very Carolina. results of Security-X those as we call of been products, Precision the we've so new Pistol the Caliber Carbine, and pistol, them, And four Rimfire North big the pistol, ECXs out

Brian Gary Rafn

Okay. Yeah, all right.

standpoint, products the And wholesale from strong the I for your appetite is but your distributors the so – your appetite production, side very focused you're from on from vantage understand retailers the demand and very, from new point?

Christopher John Killoy

has meetings Ruger entire business. effect little distributor call salesperson bit, it business outbound what distributors, Absolutely. quarter, the with hot the Throughout their our around on he's making they really about, And new formal It effect informal. love got we that halo both would our Ruger halo to product an got we a talk product When new the line. call and a is and products. the have we've a and helps a

Brian Gary Rafn

the relative Anything in run important environment Has of with some and/or that you. how exclusive was your quarter been guys kind more that specials second you the distributors? maybe wholesale a the in normalized important Got quarter? it in to

Christopher John Killoy

models, important that part big Cerakote everything of to very that camouflage make appetite a some make-ups has very even when there things business. level, pattern that our out powerhouse an because with special of try dipped from are our Number we we to sure still Rifle, all We've consumer real models, single-action on important been remains production, It at well them. distributors And of One the business. got that's spend do revolvers, at and levels resources part always those higher our keep of to some

Brian Gary Rafn

Yeah. Yeah.

building compressed this me the a you When just concept, prototyping, and you production, look the inventory, want at for as to Let years get to in I design How overall, was that asked engineering, to a or gun-by-gun past. a design ask say much Ruger's Bill market. from as situation? may time have between back that guys day cycle standpoint, still it product I four has in you is

Christopher John Killoy

the focused we but We're is very Carbine. had we're all the working We one not would say lot and to want we time, deep spent engineering time the team the the right dive where upfront doing getting manufacturing not Pistol example really Well, I most a on there from recent processes we're be. as yet. as before the of a first the day machine. engineering that manufacturing well better bought that Caliber front, homework, Probably on

So better, for a there I we've continuous lessons. of learned us. mean – area yet. of That's getting lot improvement that not we're but We're an

you sometimes an loop And production. a challenge and counting throw you when in right back the ready to a or hit product get got obstacle that not that make engineering may rework sure you're on, you you for

to best say Carbine example the a And So Pistol we most got recent do. but work time. of all I'd story, it's the improving success Caliber was still

Brian Gary Rafn

all a to Trump five get the the (XX:XX) primarily State industry. might Does years? of at say, add more one over Does you to NSSF growth that sales ask that all XX% you from administration's manufacturer The three hunters guys domestic said sportsmen the – export long I'll and Commerce, for you. let's gun that kind Department term, surveillance line. and at back of help guys in – the overall to been that. Got and

Christopher John Killoy

X% export a what significant Brian, distributors for sales as Well, not typically business. customers. very been in But X%, the I some it's great got our overseas. X%, represent you think, recall, level And likely is go for well international or that it of does very part our – us to overall our Ruger we've of us, Ruger

changed have import think I impact cetera, their It the is remember and countries the that certainly it's we So of et to change. those welcome will of are perhaps that efficiencies orders here a haven't throughput change Ruger. laws. Germany, those France, help that imports, the they at receiving whether any But

going restricted their be countries So certain may are guns be in that restricted. still to

business. So appreciable on difference or I export Ruger's don't a measurable see it having

Brian Gary Rafn

Chris. in Thanks. line. you, Got I'll get back

Operator

Thank you.

next line question comes of Rommel from Our the of Dionisio Aegis.

line is open. now Your

Rommel Dionisio

questions gross much and couple of very margin. to Thanks start good A morning. on

of First, as impact of In regards as well smelters? with margin. And material the could goods. steel about reclassifying of the talk impact tariffs cost price expenses and you XX-Q, talk the the the raw on certain potential promotional from to also increases, about to you gross selling

fall impact that, running Thanks. filtered Chris, talked You that about, that or as third But entirely some that quantify XQ promotion, in that. into summer the of you the quarter not of did that well?

Christopher John Killoy

off, by we Okay. to directly Rommel, To-date, first maybe relates impacted our the tariffs. been vast we've tariffs, because materials domestically. order the question as of raw the it (XX:XX:XX) not majority

some increases find have risen made we've to materials. domestically us domestic so shortages decades. However, steel steel more have sourcing led indirectly. of for steel example; domestic as overseas tariffs have recently, some and steel, has for This their the demand look to our Take has getting been tremendously The tariffs price manufacturers attractive, been who from raw sources. impacted

ensure support production. we Our have inventory working have need for been what our we with to suppliers to adequate very that really purchasing closely folks

production Our inventory (XX:XX:XX), that indicated projections currently would will indicate that not quite tighter seen situation but and a while. like in we our it's we've that be a

So that's we're keeping eye a something close on.

at second year, – also QX it of look things. margins. couple you to related in contributing Your and versus were margins as the There was factors. Remember, the think when question, the really it a up prior couple I promotions of

talking continued the ramp-up in for of helped straddled I to and think second for of in points products strong efficiencies And our about I QX. XXXX I the on IV increased about second XXXX, what question, may recall those quarter first was QX believe due gross X in boost First, the December was about I then recall production million that year. increased I last and some I of you margin. the margin. think, promotions products. promotions, summer new were demand That production and improved expense quarter the last your if then the XXXX X% introduced manufacturing And of $X.X believe, costs quarter in the production of recall Mark us

Rommel Dionisio

Okay. Thanks helpful. much. very very That's

Operator

Thank you.

Brian Our line from of next Morgan-Dempsey. comes of Rafn question the

Your line open. is now

Brian Gary Rafn

to mini in going integrated furnaces changes any Newport, foundries, the at think, ask you're still any then between – I'm the Yeah. of Up furnace were mix two, I question. the main my and minis? of legacy your running the

Christopher John Killoy

operation. improvements, a have great Brian, are job. We a small of really – we tour and really floor the the foundries. haven't for material, the some that into mini got were there into we're the folks of that to board we or folks are. legacy on those then the yes, small there Pine furnace some down got Tree rollover the at meeting being were we with And integrating done XX% up daily into foundry up shop foundries. rollover And the the call, a The production is parts we and in amount of They've folks Newport the, over events updates the run. from latest And qualified have to a Kaizen – full really two the mini a very Castings a impacts great two good what but or the just revert pool. at facility the nice some of the and and over really there great recent job done a foundries up from few

Brian Gary Rafn

thing there at not seven you said maybe Newport, in – five there. be might or up think – that for Is maybe still at six, still future just have Mike in the of but I Okay. there at or floor time some foundries one or Prescott? that then might mini point other Mayodan is at And type distant they space

Christopher John Killoy

have say. some floor to hard We still space. It's

New floor any provides casting think And about. that facilities. this never we future existing Metals, we up we've more capability. get haven't out the the needs. sufficient in a we to time, we at going going Ruger two that firm also gun be could the the got Pinetree rollover processes you our in plants. you'll with MIM the in move in free We've Precision in the recall, molding are efficient, lot space Right metal As Missouri put got, either be in up to plants. that to-date, now the foundries RPM, existing and in we've know, our processes for those of gun talked point existing something of But the plans or we haven't But any made into injection Hampshire,

Brian Gary Rafn

like okay. XX/XX Yeah, Because, a market. guys new summer new indications? the And an Security-X. and SRXXXX is seasonally then a the a to again, during you Target, pace? summer XX/XX, quieter little tougher do it Is products, kind you launched of the of Ruger even to summer .XX, Officer keep preliminary package or products then Any launch

Christopher John Killoy

I it's and Brian, like be time, FTW write out, on out we you gun it down products mentioned. every to us a were be able different we site me more to them, these it about have of any try them extension, could to like that of and Well, you of a out at all SHOT level. on to writers any from of in their the the to disrespect the mean do say that just dash standpoint to to a everybody when or make before, able those guns an wish and there's coming we December, print Typically TV Show, couple even late. take introduces the But four the big less for – whether gives them chance significant And say spread mean, launched we everything line ones quarter. trips like don't product XXXX, bring Ranch to I mad versions I we were writers, the introductions to Texas to are If absolutely attention. I at heard get talk out, on couple with a the get can December; on them as about like that last planned our were them, I of sure some mean, put both TV. editorial visibility them

And throughout been out can it's line so those us, year. for good the spread extensions a strategy. We

Brian Gary Rafn

try you an be – product Black of Yeah. Do also that And pre-Christmas. a (XX:XX:XX), a that now November important for year, in to batch the during Is out Friday you do you of for kind new kind guys, to Chris. big date launch has as point spread continued launches?

Christopher John Killoy

significant, them planning retailers their as and for in national because really for I front be their circulars, terms far you get needs QX have their so be think volume is probably advance, to to of those in fliers, in their significant for planning not the out in of account mailers.

planning to much And be. so has really so used than that cycle gotten earlier it

a just we out may with traction we some of box new if quickly, bigger we big with So come of get stores. independents the but Black into lot a before Friday, lose product the

such. And to don't minute and their any give anybody they we after make so or circulars before we surprises last like just print sure

Brian Gary Rafn

It's right. very Right, good a comment.

building ask into competing Is and is excuse or me brand? it Ruger – name What get strictly just if process brand the Doug – Is the Team what's wrong just it weapons? is that the launch thought the a Doug's the bringing his you, Koenig's I testing it shooting competition? shooting, shooting, team, Is Ruger field there? Let competitive ambassador? name me competitive of

Christopher John Killoy

should really and month engineers feedback have our events you these some had team we at, disciplines, are what we Ruger factories, a features in those the and shooting and where shooting everything our it's bringing our back Ruger to us customers of had Well, each these think around see I really brand, practices of It's that really to of world at mentioned. best of rotate We've we that key product the already members implementing representing the events that just little give first-hand and for benefits. some factory. for we've competitive the the building planning our in we – on sessions new looking be attend at

a little it's both. think bit of I So

and I designing really our us the help some continued (XX:XX:XX) to down we are the influence see products to think things of exciting you're learned pro-shooters new, going going road. from out in

Brian Gary Rafn

Yeah. Thank it. you. Appreciate

the modern we looking against is more for As I'm entering season has couple experience for got a How and hunting kind you a your enter fall, years. bit of the now just we've talked little kind – about the of that rifle, competed an the but sporting be or scopes action flow of to AR-XX, Has and legacy your of kind bolt a there? normal that there bit ebb continued hunting? rifles, popular

Christopher John Killoy

I lot just to in or calibers, was with things hunt. be think like new had shooters And saw some really for of .XXX, American who .XXX like Bushmaster, we beyond we traditional continues Rifle where things last it a combination the in popular what and – X.X existing attention like a But attention X.XXxXX, really of some those the there's or the newer also example. of of the so on the calibers, and XX-XX of Hawkeye our particularly were Creedmoor, some good or lot over extra year to incorporated American old in a Ranch platforms. calibers (XX:XX:XX) Ruger some Rifle,

Brian Gary Rafn

appreciate call floor built may you. between it, you Newport, between shifting anything your lines as Mayodan? be repurposing or you the gun that. out Got done No, I you of have Mayodan, how space Prescott, at machinery guys Have or, any

Christopher John Killoy

That's point, an Brian. excellent

to decided meant As equipment. we year it right our in workforce. repurposing with along a a for that, of And had lot we change tough production XXXX strategy, as our was size lot business, the to that of a us firearms

line in coming So CapEx you you just if up avoidance and any freed down existing have times a that's we if factories very being new was on of production – that product one been lot able don't helpful up. you're obviously, had And machines going which another. equipment lead both which from to your buying of depending – a it have was to on don't moving were versus

the lines So, Hampshire Newport as that facility. an the one day of that in the machines the on up working just on new product the other line yet, of and from a facility and haven't were in come we that product Prescott at folks the we for were example, had use launched the were CNC New XXX%

So of from it's a big repurposing to good facility machines other. those the one example

Brian Gary Rafn

Got you.

specifically was ago. – with I were about Mayodan, your kind it's built we it couple XX% at? have years maybe What And you it the look like? of of floor kind years down there. been Okay. space since then two what's factory think out What's of

Christopher John Killoy

I think the new a level. the probably out of that there engineers Precision makes with down they're a there the use Rimfire. good maybe I They've that XX% done for at cool team down have with the are team job new coming folks The great facility. really mean, got good equipment. of example, products, now

we shift lines other to and popular. be looking proved should that's products. So other lines new existing to we were from they their the as also they're And very those at get factories products new take hold, as adding some capacity

work that other facilities. both have moving in well process, job folks as factory remains lines are and in down So there products for that that homegrown, a in running as an done again, awesome ready the but getting new

Brian Gary Rafn

you Does if AR-XX? of What's be it to Mayodan, kind of it As the at future kind new and or more been rifles wrong, and more of profile? flavor? I'm a Mayodan guns look, and Is revolvers, correct me tend specific does Chris, has take have Prescott Newport any pistols. its

Christopher John Killoy

centerfire. is got American actually bit our exception everything Mayodan. is Rimfire. SRXX of LCP original call we Rifle also our – business. LCP Mayodan the got of American has And They've got a version, right now got got the out MSR production it, of pistol They've got Prescott. of They've with that all our They've originally the was in revolvers. the I as most little down they've at built the

there a anything down good So line. only is from got The product real have they don't the revolver they've mix. thing

Brian Gary Rafn

got I Okay. you.

factory shifts floor kind we extending recovery, XXXX Are you any any attrition? labor of As little overtime? any count? situation? how into What's a bit replacing the head you kind the or XXXX, of see Are move of of a you

Christopher John Killoy

facilities actually three Well, in associates additional we're looking of major working now. overtime for the all right they're and

locations hiring for at three associates. We new are sales all

the we So looking better Q, produced Tom saw in so I a picture this we of lines, at think mentioned, as are going you up. the it's And, to can – those see we've production got in much than further XXXX. units time on some increase

Brian Gary Rafn

much, instead you. done to looked organic Street guys what company Wall be very seeing you new Got as general. of accessory at just you. of have on By guys really products really much development front? had job sporting guys M&A, the are selective. (XX:XX:XX) always the of certainly from trying been goods great always in the then your in far side managing you have And have the holding your you in of capital. stock, competitors, Got business. further, umbrella a standpoint of an for guys And seeing develop interest an kind You M&A you But I've and

you're to just side. how and a what So seeing and comment maybe is what's the available on M&A pricing

Christopher John Killoy

than to looked mentioned, think bring Well, world, which much while in know we couple to a you accessory we were of I and be pretty going I pricey. the at seem the we a party didn't other for our mean, cash. things to And companies

then the that from not in kind on landscape. we strong, magazines. generated Ruger. of active business on firearms the is participate is firearms, our And And magazines for additional there of It's the part accessory side, who market. accessory Most sales our of an the with couple typically were revenue it go companies a margins. is out recent The did so good of

in be got business. Bollé seen And their their Remington folks You've of we've in parts pretty paper sale with bankruptcy. don't at through potentially selling The brand, to at talked decide then, down activity folks the may about with and know folks there. several have business. their the Savage Serengeti forward recently units sunglass I articles the have not Arms that come they also and the It only the looks move order. there'll but came at or Remington their of that all want like Bushnell, if some – good Vista

this at that to too any point, that on predictions. So where we're But and to see early keep going an eye make goes.

Brian Gary Rafn

Yeah. No, I appreciate that.

out maybe you of When that a SR actual the acquiring AR, CCH, of Weaver, much was kind point. the too drags really something the put that the a that, something mentioned we me from your unit because much want like lines, brand? interesting like (XX:XX:XX), ago Magpul, I that furniture on Let it all ask gun. an and volume of your so don't it out comment thought going stuff. too you very quarters design Couple kind them, limit you core you of the MSR if you or to comment. you of may then Does Because customize guys actual limit accessories or

Christopher John Killoy

I the limit don't that would – that. be what would think

to that what accessory from we're currently base call watch other an run a selling might their of and with and it? standpoint. business be of that accessories, short we other when to M&A they business ourselves I who company. very put would that that – we're that of I a not who acquire going to and to it at with was we are would they a hit to discount firearm, we have the just in an a that So optics our to maybe those sure pick I many packaged think have risk we from rifle OEM not the configuration business OEM are new of example, said do existing that we at a say, why case, we somehow point we careful. what found just gun on have of currently But you years What exactly may would we think were the do company guns, where have we business a have to – convincing the pick consider using something we what the risk if have particular we'd just to manufacturers, price few weren't optics process. optics, be products, do too company watch different we're we including, optics, is watch you're manufacturers we would and were that of something that optic cool activity, now competitors make – And put on we the if over-niche for affected if be is If would at usually buy we can right the risk. some made big If accessory pick think from but a is we says, market the we part a is products. overlooked over might product, intended

Brian Gary Rafn

the CapEx versus How the balance machinery of specific tooling The I million a talked much about for that. appreciate product? that's think or just $XX year. of maintenance CapEx I you for No, Yeah.

Christopher John Killoy

a I that, and things new typical to (XX:XX:XX) that's half-and-half. we rooves of amount have ballpark. of. mindful have, the the we physical probably facilities plants, with maintain like that try things That's be those It's to just maybe the mean,

So we're ground. overlook on needs that. not of factories as new come other there We building to the up. always But care we out take and try ever to breaking the not hand, try that

Brian Gary Rafn

sheet? sheet, on have No, be you've that. Yeah. mean, been to a miracle thought balance demand I on you And dividend on Any got you've one, you I your do tons the process some beyond then balance really that on treasury fortress CapEx of cash. cash for final one guys that really no side. see special of debt, continued or you calling just purchases

Christopher John Killoy

shareholders' special constantly M&A share a discussions But, value. considering I and happen. level. this be to special Well, one have at to the front. it a in it cash continued is stewardship our good might of either of assets on We're those something we like people things may buybacks we continue as we're way opportunities generate comes for those or now up of at now. lot returns, any dividend certainly be looking something think point It really don't to in $XXX I the a the change at responsibility are earlier, asked With million plan our mean, balance, approach. primary said of board dividend to like three a creation or we and Right positioned

Brian Gary Rafn

one the any of talk feedstocks? anything standpoint wood anything a you resins on Got more from the you. commodity about bit waxes or And or on the you little are the any raw on other Can inflation. lumber of steel, materials, raw or chemical seeing material then tooling stocks

Christopher John Killoy

No.

the we're consume rest of pretty at the I in think that shape wood raw Ruger. materials we good and on

So lose that I we're our it's to allocation keeping primarily speak. what spot think is eye from steel our don't on in to we line, and standpoint sure so making an want

Brian Gary Rafn

I Okay. much. right, guys. luck. Thanks very it. Good All appreciate

Christopher John Killoy

Thanks, Brian.

Thomas A. Dineen

Brian. Thanks,

Operator

further I'm time. And this no at questions you. showing Thank

Christopher John Killoy

In great to commitment would thank associates continued I quarter the also Ruger speaking our to interest your to you in closing, and like thank facilities States and at Okay. XX,XXX Thank operator. November. their in you throughout you, like for third building Thank I hard much. very for look forward you Ruger in call the with United over I our to would work firearms. earnings

Operator

Ladies and today's gentlemen, program. for That in does thank conclude you participating conference. today's

great You all disconnect. may have day. Everyone, a