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RGR Sturm, Ruger & Co.

Participants
Christopher Killoy President and Chief Executive Officer
Kevin Reid Vice President and General Counsel
Thomas Dineen Chief Financial Officer
Rommel Dionisio Aegis Capital Corporation
Brian Rafn Morgan Dempsey Capital Management, LLC
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Q4 2018, Sturm, Ruger 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 follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference Mr. Chief and President Killoy, Executive Officer. Chris may you begin. Sir,

Christopher Killoy

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

Kevin Reid

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

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

Christopher Killoy

the Company's discuss now will Tom XXXX Kevin. Thanks, results.

Thomas Dineen

Thanks, Chris.

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

$X.XX For XXXX, net sales were were $XXX.X diluted per share. earnings and

and favorable corresponding by in in carrying on increased have decreased leveraging, $X.XX use EBITDA into short-term the improve shares and EBITDA improvements inventory common In share or is products million and benefited corresponding resulted in and XXXX $X.XX. impact of Act per due cost direct comparison per XX% leveraging by and earnings which by a the manufacturing of XXXX their Tax sales tax earnings each by adversely overhead of $X expenses was adverse $XXX rate million a inventory reduced million earnings sales. labor effective our share by $X.XX repurchase sold, the efficiencies XXXX, our In XXXX change of can products It per XXXX, of and Jobs carrying counterintuitive, by earnings XXXX and which $X.XX. was of XXXX Cuts Our to decreased efficiencies, inventory increase XXXX, efficiencies XX% to our or increased which sold, The which by X.X and million absorb between $XXX.X share and of and share increased $X.XX. million resulted to the the decreased stock reduced per of in by and the rate cost to and earnings increased cost $X.X of year. XXXX impacted but an cost favorable earnings performance. manufacturing the XXXX XXXX, was

the the of outweigh immediate P&L improve, decrease period. benefit times the carrying at impact when the our overall in the resulting can during cost of So performance inventory realized

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

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

XX% or fourth December XX, the quarter $XXX.X XXXX, and in at sales. For quarter sheet, was EBITDA are totaled compared balance $XX.X UST XXXX, invested investments, million of to cash of or EBITDA million. XXXX The million the fourth XX% of our $XX of bills, sales short-term our which

This ratio and the form we in to million, of At which debt. that and book million. from the have be approximately is due no million a capital per operations. equity the site. was $XX share of in and of to expenditures generated XXXX short-term XX, new stockholders' year equates product of reinvested back X.X we timing $XXX to investments. relocation equipment and and which current We was into expenditures. launches cash share on Our $XX.XX repurposing was value Cash X $XXX.X per light $X.XX million XXXX a of December already machinery relatively flows, cash of that in estimate expenditures, capital $XX the company capital for of We will XXXX,

the Cash payment new Our toward of development. dividends. returned for XXXX, product primary Company focus to will return $XX million investment be shareholders, through the shareholders in

quarterly declared share for as of XX, of per payable XX, dividend record Directors Board of $X.XX Our March a March XXXX, shareholders XXXX.

and Chris? As net to approximately XX% therefore a income dividend is quarter. quarter That's our reminder, the various of quarterly financial update.

Christopher Killoy

Tom. Thanks,

of overall from by Despite introduced sell-through product demand, of is In was challenging from for Foundation in essentially the unchanged in market. industry. decreased new in products the the the In of demand we believe which reason distributors particularly development, to reduction year a National The primarily apparent terms indicates products, was for NICS outperformance of in demand, this overall firearms for some System in the Background to independent retailers NICS this XXXX. and firearms products checks Criminal likely National a that due December of decline the remain that and the Company's background of driver as industry demand X%, Shooting the Company's or key strong Check new modest of believe XXXX. Instant We XXXX area XXXX adjusted Sports XXXX. those were estimate

Ruger collectors of HMR magnum XX and Rifle the XXXX long launched Hawkeye and to XX XXXX XX/XX rifle and a an custom Bushmaster the several the XXX the and anniversary Some had magnum. optics-ready rifle in platform, PRC, series X.X and XX/XX in included AR-XXX the range Precision in pistol. pistol, commemorative the LCP in calibers, Precision rifle. of the XX the calibers a targets rifle we shop magnum new MPR, multipurpose Rimfire In products include models

millimeter XXX model also match officer's an the champion XXX We GP a caliber, chambered a model, and millimeter had XX a target Bushmaster. XXX and LCRx in revolver, the stainless pistol in scout stainless XXXX rifle and nine revolver

in XXX shipped non-catalog this well achievement, shipped Pistol families. in million Barrel compared were firearms new of the the last Finish. pistol, unique Caliber major ECXs the mind models $XXX.X were in represented LCP products including we different contributed million $XXX.X New II to or Security-X the Keep of derivatives XXXX, or sales XXXX of models Carbine, to or the XX Precision firearms had year models about sales we XXXX. Several that in introduced of XX% and product Rimfire XXXX XX% Length Half In Rifle. pistol, models. pistol models. we Caliber, XXX over existing catalog a These featuring in

XXXX. us It's we demand, due our offered significant closes products. products and others but two are new in to included Regardless, tough only a these it in these major all helps continuing new introduced many years for on because while are been derivatives breakthrough sales distributors' focus standard, new the of the product total strong were not had new pretty that were include a years. in past Some

and the family. production at as and sell-through distributors essentially XXXX independent terms well product levels our semi-monthly inventory estimate manage from unit of in was the distributors to vary In Total XXXX, review as although did inventory, to warehouses, production unchanged inventory production from retailers levels. we levels it as the plan independent by in and

XX% units unit decreased decreased in by XX,XXX finished of units by and inventory and XX,XXX XXXX. products decreased company inventories In XXXX. inventory goods distributor aggregate, distributor Our during total our by

generation in strong. In terms cash, was our of very XXXX cash

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

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

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

Operator

first Instructions] comes Rommel [Operator Aegis. you. question Our with from Thank Dionisio

Your line open. is now

Rommel Dionisio

historically wonder of very have market months, Thanks of give could on you it perspective to to out sort going your if years sort the been take two on Good much. now. wonder us market XX downturn? give this we're you Usually, terms in snap could what of for just the Yes. I morning. might just if perspective XX, just Chris, that. us in downturns prolonged And like something downturn. I of your

Christopher Killoy

thought elections front some things largely course a very uptick promotional in the from I be to guidance. following a there. we drive it's in of give lot don't of competitive might challenging that on competitors. being We a market seeing going demand will that difficult it's a We may offered. see out now, Rommel, occur. we're starting there and near an deals of political of We're not Well, the predict mid-term forward-looking activity that demand to tell Right and did you see But the future. lot

years to experiencing we strong However, Carbine. seeing We're are ago. like still we it niche a of a for have category Pistol Rifle few pretty to remember growth, or where demand were when that niche good we categories a Certain it's cartridges. market calibers, Precision just Caliber overall lot compare

key drive of sure categories best you're continuing products. people look the to the to be think, product can demand to I introduction new the when the So making in overall I stream flexible as is try and we market, think enough at Ruger right for be

Rommel Dionisio

enough. any from to noteworthy new coming perspective? Show product show? coming you SHOT competitive maybe quick Anything like out a Thanks. or you'd a just out And that fair was just out it relay follow-up. feedback the a point Could of perspective of Okay, from

Christopher Killoy

to good new write on at introduced shooting, Show Sports variety manufacturers Sure. National show. outdoor distributors the particularly which show a December We by launched of product SHOT And show, and hunting and there. orders, a a launch primarily them retailers sure it's our oriented towards We and Foundation. usually hold the a pleased products, to of show. We was with don't have typically the make trade off Shooting a We retailers before held new prior every the January most year we're SHOT Show. in very very The had show. to had And chance were in season. of to just display

on in made and our Precision rifle So were North things throughout introduced Magnum. see Rimfire, factory XX we to like XX products the that demand Carolina the HMR continue - strong like in XXXX,

rifle precision Winchester XXX the also for Lapua and calibers. in XXX We very a saw solid demand Magnum

we're with had those that niche demand of for seeing very products. So on that display. We're we some products pleased the

found anything In terms of we exciting products, competitive see revolutionary. necessarily new too or to be didn't that

manufacturers the product it's ready introduce think introductions I Show, we'll not always come new year. SHOT I think are it. why knows, products, And throughout everyone at if If display hold but we most hard working those up to Show. that's like with to not, And new on we'll off. the for SHOT have

stay as in things - some still say So from for tuned Ruger. works the we some are exciting

Rommel Dionisio

Great. Look forward Thank you, it. to Chris.

Operator

question comes from [Operator Morgan with Brian Dempsey. Thank next Our you. Rafn Instructions]

open. now Your line is

Brian Rafn

Good morning, Chris, everybody.

Christopher Killoy

Hey Brian, are you? how

Brian Rafn

color in could the recap did promotions match in Black holiday on kind of Hey, kind with the fourth Friday give of your a little and planning? any business cadence off the you that internal hunting a quarter, season of kind then your start of on Good.

Christopher Killoy

that at a We a We've us. from a just our of some start guess, by plans I the minute standpoint. last last I'll this was in solid didn't calendar Friday Friday cut Black minute by years with deals didn't impacted that past. think changes Friday year. for I We see see Black some competitors. any seen Black were

we pretty November saw So see. December laid which on of going And XX. solid launched our couple to out, kind into of team accounts this our then retailer programs things year; plans and our good we national a had was were that executed as

jump November. same those in the did years we of year we last end at them in had we week to in them to end And the January. orders as on of to launched. of December year, Now the We announced a launched or season as new chance prior those the thing book give of well largely last the advance launched typically past, first we've holiday that products very at in retails get very recently our a some December

you as it wasn't December I fourth We in saw. terms good So a earnings. was we okay, say had of did would quarter better significantly

then were a I And terms think ahead XXXX. we're $X.XX sales, sales versus of from prior. of slightly we in $X.XX year

how closed out. were pleased the we with So quarter

Brian Rafn

Yes.

Okay.

You come and development guys in administration have through Obama certainly way sales product unit that. markets the along highlight volume that given new the just the and

just so remember by market maintaining, a And the to coming guys your firearms can X.X. you a when was shipped at big deal yes, I now, a units million X.X commercial off

If you a something, designs breakthrough, product development routing or you between guys is development, differently versus rollout do you'll do might look impact schedule an it in let product stage? to any new make just be at it new new iterations? just the the caliber you Do priority it to try frame do

Christopher Killoy

the supply they engineers, usually those earlier fairly that. Those job that folks process, chain makeups talked call them, the in attached a manufacturing a for to time. of keeps the when for and we - working team are our Good we changes. the something in new caliber, our few design be a different, gun typically changing do approached that staff. engineers little introductions, They're separate well on team both that's not the those launches SMUs. a allows well our group the to as distributors the factories product or A period longer camo folks, full exciting question. maybe things have. to proud a something our We're easy like lot of a demand are we bit We factory. pretty a bills are very have market those. of of easy to maybe a may really And derivatives and for so big bit hopefully as as retailers team for doesn't of have And and We're road and That build typically big margin, a or that that down stock frankly little special of the has actually have great pattern, other folks done we deliberate about retail a points level as get work things always store distributor of extra down unique. material responding

new separate that product we efforts as makeups. work the and two typically those So or big platforms derivatives call we special on. The them

Brian Rafn

you kind your about up doing track that have any by When we XXX employees it engineering historically Yes. hiring just in area? guys numbers wondering You adding expanding in engineering You When you And at or research the look rolled XX your yes, I off I side any think of or hiring that engineering teams, you're XX doing the part help. to Do group. you guys? keeping go these of just and maybe headcount? XXX if of it? time same? kind I'm Are

Christopher Killoy

We're actually always good solid looking engineers. for design

three side, of de but all facilities. I We stable have at a manufacturing engineering pretty we've got a needs platform specific now couple the right think folks in right now

three the We extensive together, where some talent that for make of things opportunities work facilities of are. cross of One factory. regardless provide our with us to use having they the

planned be don't in though even the boards the Prescott, project, on So folks might being pistol doesn't in have both and the we to Mayodan mean built Newport that design. under working be

to available collaboratively So the flexible of very kind what technology systems an engineers working that of locations. tie gotten us in working and all together with are at some we've a to

Brian Rafn

Yes.

XXXX Are just of bit or a XX% to saw a thinking on of you discounting seeing year-over-year MSRP and pushing you that. you're extreme you discounting kind seen you for about, that it saw little talked reaccelerating? levels of You some that in seeing are off XX%. you opening the I'm Are comments it's more in see kind starting your in

Christopher Killoy

lot be saw nothing To of think XXXX, a inventories better are we honest, like some shape. I period during in those in

You We pretty of inventories balanced it's saw to finished are at a trying inventory. Ruger our large that for inventory. any in piles down inventory and at things - And big and quickly. out distributor see of people the by move goods don't both

that, not In of a the some discounting inventory, we're we and competitive in that obviously, level we XXXX. of periods seeing terms activity have promotional visibility saw but don't of of

Brian Rafn

Gotcha.

elections a refocus little kind you issue political gun of with of spoke the the for You may some on bit state-by-state. and a democratic side about a too control be that

to your I of at were and if something look inventory, high might ending denominated Would that the pivot you'll If models those with on it's think that wholesale. you XX,XXX in be political the traffic side? you X,XXX,XXX say are in

Christopher Killoy

It's a combination actually.

on of have have on. We SKUs focused inventory to we're of desire the a really think hand. number we that We limited

a that demand things know of is it Some seen before. we in on had we've surge

is the it bread at our which XX/XX-RB, the country. staple of national throughout independence like accounts really is the product, and and XXXX, a Some butter both model

SKUs of down bread surge have combination that may a a we it's capability and So few and our butter the think some road. a

Brian Rafn

done building a Would product of volume then And is, inventory? Okay. in new unit you on sales development be that XX% higher obviously have that XXXX. denominated in the inventory

Christopher Killoy

typically we'll launch production. to up is we'll height What when do as typically you product, you ramp the would demand up ramping expect, a at full and is still you're its

be a doesn't of if units. ideal niche do manageable it's So That might kind product. product we be X,XXX launch. have up an It or be of that XX,XXX available always try it, the time a to to number for as come what is units launch, much Other with happen. that guns at as state. might XXXX That's

gross targets, have like to goes is our plans ramp things Sometimes margin targets. But in launch product always addition we're at slower what try we do laying that's the to cost than you'd - like.

trying will we eye on be to make of of level metrics We quantity as demand. also can sure that satisfy that one to have think an initial we what we're key keep the launch

Brian Rafn

palm XXXX, talk sense right. kind these were Show maybe there What optimism? the so those you little back all well. Chris, about Gotcha, pocket guarded you Is takeaway Ron, kind and or of Short the that had XXXX, the over you of conversations have can of, of sense competitors XXXX, post What and Certainly even observations. retailers say Short would is was you that bit done your AR-XX/XX, looking of pessimism? your a the was with had Show? guns XXXX, at kind your from it

Christopher Killoy

sum ammunition of in, could lot but there's categories still necessarily one of, optimism, things you we There's I concerned are that we guess They're participate a our lot categories. a that in that a there guarded don't necessarily for up that as impact but I'd some the maybe as it out say discounting participate aren't but in things there. us. don't example, directly,

even solid line like with our keeping model the we're support Optics-Ready the the bread very on But MSR, in and saying, seeing for seeing products and Carolina. good made our still as butter the grabbing success extensions are products as our volumes up we're market North really XXXX, the are in key like to Bushmaster niche We Rifle, Sporting and end XXX categories the well AR-XXX, Modern share. and gun the

and products continue Ruger in we've I to got margins well as the got we at And works keep the we So as new or think We've - dealer keep standpoint, level. from things down exciting the focus the on excitement distributor the that. to what's up going know some road.

is. where really focus our that's So

Brian Rafn

tooling and back fourth repurpose would ask get just quarter say year fairly and Did much I'll Well, XXXX for in or line. a how sizeable any of machinery the that in more dueling? you repurposing was one you

Christopher Killoy

how cash plant. in kept a we did We existing to and of pleased Ruger a probably very terms they was CNC disciplined that. within both terms record for have looking - repurposing machines was sizable moving equipment, operations though the were a plant balance, I very in even equipment. folks of with XXXX plant from for

has that new building rebalancing, and and tools product so equipment works in outstanding done one we've CNC maybe operations all line in And plants necessary inside And where repurposed lines. folks have from and shrinking got are new we've have other then that then an line of where were lines the both fixtures, been moving equipment one the several new another. products for also growing the got between to gauges, certainly plant launches we basically the job, that but and support in

Brian Rafn

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

Operator

from [Operator question Brian And with you. Dempsey. Thank Instructions] our Morgan next Rafn be will

line now is open. Your

Brian Rafn

a short was it And line.

Christopher Killoy

a That short Brian. line real was

Brian Rafn

very short. Yes,

million shift quarter. at Let what's you Mayodan? a time - your Newport, bought loaded kind me guys kind do in Prescott, labor a What's look kind X.X labor ask do what you and could of you you, guys like? shifts guys of Arizona level you running at over now right of What - production, a your XXX,XXX

Christopher Killoy

we sales, - really only, one to the balance our of max shifts the about thinking. Brian, line, But to are lines project, but are a that two and norm can size that per inventory, in shift. on it's operations of probably typically of capacity There lines. planning, operations so think part that's we our planning, to planning, of product two for our the day. try it is weeks second we couple not shifts. We've what's new our run we for do tough Most guns product that. SIOP size but capacity niche terms Two it the shifts lines realistically try certain we depends And one three line max are for line. what's usually shift, our every shift typically, norm. a got not needed we all that's on When that our that's

max a So about the the number. we're day operate seeing of guns we're SIOP with that building, also projection XX-day planning, we're road where we down capacity forecasting per and a on think that

at the free say, beyond operations we XXX have got that's we day and capacity a So ahead see capacity. if machines unit go max and the up XXX, a that folks is line XXX we've would

we building, of we're we're and for size So lines. at different not constantly the product looking we're size of that, but planning terms how factories what and in what only

Brian Rafn

Gotcha.

away come guys you $X.X of have I development, peak kind out? gives operations units. not be from you It are basis, that guys you from on freedom cycle, X where of at to the Sigma the doing kind full DEFCON look new down of million gotten what efficiencies, you're certainly while as in peak, some one-year things more you're a and Six we've might the at think we've going little an product As running

Christopher Killoy

place do as copied in Well, the particular I would for Other folks the factory of operation. mean, a of But deep big are tell an kaizen, we'll I pretty still level, efficiencies. headcount Ruger. big kaizen the those every kaizen do a folks down dive initiatives you, a daily lean schedule and maybe are hard. key daily they areas, to we're would time that but do and one better continuous and doing operations And the to at it's hoping improvement have one daily particular coming areas at go the sometimes as events, - up one one When events line at go that amount I they're you, on looking come initiative, that cost striving job the to levels that look kaizen key a workplace great week daily work we're our making demand. business we about or in our get the where the other impressive and at so it's a running all some factors, for I and and things single roof really - times folks safer is at with our mean, some levels on a I of a on. just satisfying time savings kaizen it's on factory and ergonomic that job, well are so to it's times outstanding tell of the

Brian Rafn

what's foundries And I legacy, running and integrated are then couple the Newport. a mini Yes, kind of old you. foundry? the up furnace you at legacy, of think the status of to the the Got

Christopher Killoy

planning well. demand needs. that to our one point are for Not we're foundries planning And two this rollover many is could time. the extremely add We The furnaces add third sufficient current not few are a in a the still two have running in but at to we used primarily trees that of one are revert have think you that operation you about come you might aspects tree. legacy is forecasting, foundry or XX when the the how of pieces

in handful but we of there still a the parts there, are that of of foundry. Some that's remnants the legacy it. And over really that use are process

So the through foundry, percentage is else small too of the still the our through business founders. everything mini legacy

Brian Rafn

is or one The rollover thought the there before Prescott down foundry to there is mini any foundries, yes, mini putting in… just

Christopher Killoy

Right integrated in satisfied it. operations balanced at foundation casting our looked we're - We've of We've we've in now how investment New got our with addition that got vertically it couple a demand. with foundry are to and Newport, Hampshire.

Earth as an well, City, St. for Louis and Missouri me, they've done We outstanding Missouri. us or also the injection metal have molding of making And and rules for out excuse East in precision metals parts. job

sense factories. time road being, right to at that opportunity have them one the into the to two integrated we elements are, are. down they So woodshop move to where now those make of for But the seems going addition our those areas in the things are own we're that like them to leave leave least where to they

Brian Rafn

Gotcha.

gun shop? X, Ruger there X How offerings Your just maybe Baer marketing shop? and create then XXXX guns out coming of going your a Custom is build or the to here different strategy be are Wilson might out something custom years you're launches, Doug five custom Is Chris, line to what on Combat from have of XXXX? that a kind and Koenig Shop, production out these Ruger Ruger there the the Les versus or the selective that thoughts that you of going be to from

Christopher Killoy

is right with crowded course We selective. high-end custom Yes. now XXXX is of the Well, especially market. at it it's and a pretty XXXX, started field,

mentioned You pistol there. great couple out makers a of

And so that's who's team. very pleased Koenig, our tough with competition. Doug of shooting captain But professional we've been with working

line gun well standing XXXX. And shooting same time between team more our doing approach up as the custom so the as at on

small and the Now course XX/XX that platform. over customized really by Chevy. It's is the got XX/XX, the everyone been like a of great years, and block

make we of distant We've some those the shop I we it So in wanted not to us it seeing gun want We think were do got be great will that leading offerings. sure the custom initiatives. other future. way are we from and platforms custom make that to some you'll too right. That be great sure

to not launch it think lot the value to We're that the model market to to that custom level do now. Ruger are So shop needs years that customers shop. our a a have over slow only with but right the we're expect SKUs something brand, to it's trying I good that and if trying represent not we sure from to flood going of really extra the it's make custom

Brian Rafn

okay. skip with just comment. Yes, the appreciate I

any police kind SR-XXX. side, been of for What and that's a huge - edge, of the never kind but portfolio, performance audience XXXX increasing demand, military your and On relative on that the your police side? to say a part military the Rifle business what's Precision of of leading the and high-end

Christopher Killoy

then policies. channels. we for procedures as purchasing strong times duty way even don't depending well Caliber participate law of departmental these go duty an weapon we though be backup centralized the in through enforcement Pistol - very sold and as Well, are Precision demand duty seen Don't the and in authorized lot department. may big A actually on well. the law the oftentimes category. some weapon, the Rifle Carbine demand and products, They list. through on traditional off the a We've a enforcement And do extremely in

like to those law rosters. make are your LCP, for LCR, professionals So in guns ECXs, off are that included we very that sure backup guns duty hard the ideal products enforcement the and the like work a

done So with that's a - we've over that time. very well

Brian Rafn

Gotcha.

You guys special XXX or have or its that about - I got you talked listings. XXX you've makeups and some variants, catalog talked think about has XXX increasingly whatever,

the dealer does forward market, and the guns, and more we important? this, like more normalized a As go become specials gun more are of in package that maybe

Christopher Killoy

stock Cerakote, their special own of some in be well makeups combination, special we ability been again, some that operations individual gone. in makeups. factor job, strength national year, staff done forward have been that's for the makeups that's I done the the products I how even go number flexibility to work as the the and make they mean, have we side a success now, certainly That's special that some key pleased I have our sales key dipping supporting with near it a be We've infinite a process that'll And on with. Folks increasing. like and as those see combinations. bigger our down for Ruger. of key to future factor very and barrel a that of camouflage of really Certainly as this think independence great the chains Absolutely. like retailers, -

Brian Rafn

the bit feedstock basis? sold turn little there commodity materials sand, you're commodity A raw alloys, of on cost seeing is goods to side, steel resins, on Yes. of anything green any a inflation as woods, issue in kind waxes,

Christopher Killoy

to vast raw not steel, been that the the relates majority directly it we've The tariffs sourced are impacted only which our materials we field are place, as in is, you by of because domestically. imagine already thing Brian

have However, of the In us the our indirectly. tariffs decades. case tariffs The sourcing for we've have more attractive. steel steel domestically been made impacted domestic steel,

from find tremendously domestic So their sources who as been had sources. manufacturers demand has look getting risen steel offshore to

we've and materials. shortages raw price seen of some increases So

believe supply be but all a production support we we'd certainly will are in working tighter to that folks closely see. purchasing we've job, and needs. the past Our our that And like to impacted, situation ensure with inventory inventory production seen it's to doing of have a a we suppliers great good

Operator

over remarks. you. I back Killoy any like for Chris the closing now to to call would Thank turn

Christopher Killoy

finally, and on May design thank hardworking Wednesday, the team American I firearms And I our I last like and loyal all members you for like would on Investor to closing, year's Hampshire. in rugged, you continued who filed with interest Form a proposal, reliable day which in seeing Ruger. of X X, XXXX your to X-K all would our section. I Relations look the forward thank XXXX. in Annual at customers Ruger factories. London, every was our you X,XXX in report available many response the to the Meeting of the to manufacturer New SEC encourage we prepared in website New in In February also of shareholder on to our It's read our

Operator

does you Everyone, thank all for This gentlemen, And today's program. and Ladies conference. disconnect. may you great day. in participating conclude today's have a