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RGR Sturm, Ruger & Co.

Participants
Christopher Killoy President & CEO
Patricia Shepard Associate General Counsel
Tom Dineen CFO
Ryan Hamilton Morgan Dempsey
Brian Rafn Morgan Dempsey
Robert Schwartz Cooper Creek
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Third Quarter 2019 Sturm, Ruger Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to conference like speaker to now Mr. today, would hand over the your I and Officer. Chief President Killoy, Christopher Executive Please go ahead, sir.

Christopher Killoy

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

Patricia Shepard

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

cause Additional ended materially could information XX, XXXX, company's to in Form XX, limited XXXX. in including, time-to-time contained SEC concerning XX-Q end those Form to the forward-looking the for filings, differ the reports ended but year from factors statements XX-K on quarter company's from and December not is that actual the fiscal results for the September

EBITDA. XX, forward-looking our all the are for obtained at the SEC disclaims that XX, responsibility the note Furthermore, for Copies to XXXX, the year September of December We XX-Q be website and Form company's EBITDA income company GAAP or to XXXX, Please www.ruger.com/corporate these of at documents company our by non-GAAP XX-K or our the in reference ended also the contacting website. Form non-GAAP update at posted may which the are SEC, found statements. the or be can net on website sec.gov. reconciliation on quarter ended

Christopher Killoy

Thank you, Pat.

financial the Tom? summary will third Now of a quarter. Tom provide

Tom Dineen

Chris. Thanks,

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

period, year diluted per prior million For net $X.XX the sales earnings and comparable were $XXX.X share. were

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

period and $XXX.X earnings corresponding was primarily in such months maintenance, our quarter share. were in third first the of in For to net and the deleveraging sales XXXX in The costs, nine resulted and million depreciation, fixed reduced $X.XX the due sales of labor production, indirect decrease diluted XXXX, profitability as and per unfavorable were engineering. which

our totaled The balance sheet; XX, million. investments $XXX.X XXXX, cash at short-term September and

of the the through its payment XX,XXX average which stockholders shareholders: book $XX.XX operations at was XXXX Cash and first price $X we of an no nine $XXX.X totaled of Our XXXX, of the million, to Cash million. million X.X:X to the months equity in million company XX, returned current to dividends and with equates value have a per nine shareholders shares a repurchase the first total of million. XXXX, provided ratio At $X.X share $XX of for during by months of debt. September returned of $XX was share. stock $XX.XX per common

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

is therefore, As varies quarter-to-quarter. and of income, reminder, XX% quarterly approximately our a net dividend

That's quarter. the the third Chris? financial update for

Christopher Killoy

attributable consecutive sales for the more overly long-term that and may to which our hinder terms, relatively fewer major shipments distribution a moderate promotions products XXXX; competitors; the extension the loss levels remained we significant of the and we benefited in compared channel. measure of has the rebates warehouses of its quarter decreased opportunities XXXX, third continues formerly which demand reducing to following: of of Tom. filed in The soft short-term discounts, Instead, short-term of and production took promotions, to new forego products; prudent June our year. aggressive the better retailer encourage ultimately for to payment the the the brand. to inventory and and Thanks, value December bankruptcy be liquidation from anticipation caused to market extension distributor buying inventory by four fiscally by in protection decrease as the generate Ruger aggressive Demand; the demand payment discounting of product this our in of Once with XXXX retailers. again, from further elected in throughout of and discounting performance, results offered launch cautious terms disruption would

demand. We use firearms NICS adjusted for consumer proxy background a checks as

in it metric, can NICS as changes a and by issues adjusted government is agencies. regulations, directives and by be laws interpretations impacted However, state not perfect many and

lieu For Alabama and Minnesota permits of in of transactions background to checks This significantly NICS resulted state-issued increases example, quarter background of in curtailed certain for the adjusted and third for in firearms checks respectively. in XXXX. NICS carry XX% was use XXX%

X% unduly its we sales, adjusted NICS third decreased provides Excluding believe gun and and the particular results months only X% increased to period into September insight limitations consumer the as level. quarter, reported. Alabama which for can for reported, underlying at or anomalies, impact NICS compared a used and firearms compared the XX% adjusted ended its XX, adjusted includes comparison. demand Despite Also, XXXX, the Minnesota, X% nine for in to NICS as

firearm XXXX. sales new of sales months represented product first in million XX% nine the products: of New or $XX

New introduced the Pistol, Security the and the include major Pistol sales include years, Pistol, Carbine, Precision the product in Caliber the two Wrangler products Rim Rifle. which Revolver, X ECXS new the only were Fire past that

our extensions, first and of our ultimate to not the we the and great mature Nevertheless, line fly distributors, under months the Product the Notably exclusives line product bringing XXX. can product reminder, distributor fanfare get they as customers, product extensions for much a are and immediate included line they new exclusives the provide calculation. and both don't the radar, as extensions As launched attention breakthrough distributor and in our independent third derivatives and sales value XXXX new of in new product to the retailers opportunity as product consumer. platforms. total wholesale quarter, XX nine families

production primarily base sales, and and of our our manage the reviews through and our we and Production sales from our our estimates retailers, independent distributors. of to levels inventory inventory distributors products semi-monthly that of independent the inventory:

for of Our the of production third total quarter unit to and was XX%. the was XXXX our production X% below value down XXXX, of quarter sales due second mix, production

and to look as quarter for the at forward in proactive the of shut freeze normal the reduced response the managing and production in were production as of flexibility of we our quarterly on a which allows the in overtime distributors results, XXXX, our that dividends took impacted This and inventories pay our our in additional two in approach, workforce, in warehouses financial reduced despite kept during quarter, allowed reduce scheduled the adversely As down In our our to approach will we third top result further believe to attrition days workforce third shut production, run. and reduced We X,XXX disciplined XXXX. July. hiring our decreased units demand. the the place in our week disciplined down combined we this long in inventory management quarter third

first $X.X the in million. nine year months expenditures capital expenditures; of Capital the were

an has few significant new successfully capital past our moderating spending, of between need schedule despite we within product for aggressive years, equipment facilities, moved our amounts development. three and have of During which the manufacturing

approximate actively to engineering on total about day, activity our Our products. our look providing working $XX expect are in teams I new And we development engaged expenditures forward capital remain XXXX. new every Accordingly, to exciting product optimistic and updates. million

at million normal $XXX and need cash was end and million, Cash September, currently and support our more investments; short-term investments $XXX is our is than the we balance of which operations. short-term over to

has changed. allocation not capital Our philosophy

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

are right prepared right with generate for to We are one the at we if and strong to price. capital looking arrives the capitalize opportunities our returns

able annual our on operating we to average will return predicated our strategy over return has Accordingly, financially of XX%. strong, an the we of not cash alone, years achieved our has net our resulted point fiscally to employ past value to capital, we Our in a time are delivering to assets disciplined million to return focused which $XXX get five and we on the This in shareholders. strategy where shareholders long-term shareholders. during if remaining our

NASGW, NASGW honored Goods The in Association Wholesalers consecutive as Sporting Ruger year. of in meeting the held Firearms of October. National Orlando it's the Manufacturer XXth the the annual XXth for Year

New were honored We also that on our The hard-working the these recognized behalf received Precision company by and Fire we to the for Caliber We accepted Ruger Magnum. make be employees Ruger run. our the Award Rim customers awards X,XXX NASGW Best of Rifle,

first may Operator, have the question? we

Operator

Ryan from Hamilton Our Instructions] [Operator question with Dempsey. first Morgan comes

open. now is line Your

Ryan Hamilton

a walk little the us could Good so to look cadence. the June I wondered you more morning, relative if through did maybe What on give Could July on? everyone. color you just like bit and quarter? quarter's

Christopher Killoy

was hunting that's Well, one-week which is July slow And when typical very and factories. for the shut the in maintenance pick season. quarter, we up, the throughout all saw down had somewhat then really things we given our fall

September better better seasonality than normal the So August. July was set in much and than somewhat and

Ryan Hamilton

Excellent.

the are three What like looking a on at bit touched little plants? ships your You headcount.

Christopher Killoy

just into Well, Others working to with different call first super we running working much six in they're shift. sale seven as of the or the overlap are concept, the sense sales what on weekend. some XX/X as are shifts the

the individual product line the sales. on So and it depends really

Ryan Hamilton

Okay. with? bit attrition. to about where And levels you you're a close historic and Are your comfortable staffed teams talked little engineer

Christopher Killoy

the when hourly about our labor Primarily force at Yes. to referring talking workforce, attrition, I was direct factories.

candidly, engineering resources of Our stable the a and lot now between engaged and do sharing factories. three are very we teams fully more engineering

Ryan Hamilton

seeing find? as any can't shortages as far you talent Okay. you Are of that kind

Christopher Killoy

trying that's has both to throughout sure responsible just move in lot We're a the cautious the don't industry try through we firearms fashion. we highs lows know it, we're we case. and I the and the smart No, to cyclicality make as year. hire And just the so we manage forward as of and in think a be

Ryan Hamilton

or then commodities? in of you guys notable the line. How got one you I've materials more in I'll any Absolutely. jump Are use? any seeing about and changes concerns

Christopher Killoy

nothing impacting really, or cost. Not production that's

Some domestic settled seems the increased tightening but that affect produced of steel us supply the our down. the didn't was and time have that only ago, domestic to I issue steel, from commented tariffs on That suppliers. costs in we use directly

Ryan Hamilton

Okay, sounds very much. good. you Thank

Operator

comes from question next Brian with Morgan Rafn Our Dempsey.

now line open. is Your

Brian Rafn

about is little your gun or it talked kind long through about a a What Talk a market, the rifle for pre-hunting cadence. action sell -- of of MSR? little you bit bolt bit sense the be

Christopher Killoy

certainly things move gaining think were a standard the both very in XXX I very in then I seems solid our have along American line and of action really category, bolt distributer the the rifle. with to the fire skews exclusives that cartridge traction, laws. launch pleased be wall Bushmaster that in center saw that product of particularly the the variety sales, Well, we straight We some with particularly that category. helped know cartridge in states

certainly those have XXX that, And XX whether And cartridges, it's so really helped hunting that those niche Bushmaster, market. Creedmoor, things the like fall like the things helped. that

Brian Rafn

okay. Yes,

As XXXX, some you saw kind of back the you XXXX kind kind going you of discounts look in the XX%, of if XX%, XX% go into to back fall cases of at MSRP. discounting, XXXX

a as at how you Give looks. credit, of XXXX year this would is me 'XX? of discounting, look as kind extension XXXX, deep you the of If the say rebates, sense

Christopher Killoy

seeing going far some I'm on low the periods on discounting as fire Brian still We very as two low AR some the not how pricing We're on pistols. center significant category. see prices XXX% and It's ARs compare. right now. certain, pretty

managing waiting retailers frankly inventories being some think I discounting So they their it as there know out for coming. pretty as smart far are the because deals and and is significant they're

Brian Rafn

the overhang product? Yes, how Ruger of on maybe how information kind okay. -- what's of and the what you plays that XXXX year of any your the overhung into Brothers, their got through on market Kind the out on liquidation anecdotal sense end -- Ellett or that's

Christopher Killoy

does. longer remain from obviously the the of The product the that gone challenge product inventory. the is liquidation long price Well, the than Ruger points liquidation is

And actions bankruptcy in by then and trustees remember the customers who prices, place so negatively impacts short those saw the term. that taking us liquidating

that when when through to channel, it line XXX% we credit They're sales small independent miss as credit capital $XX,XXX and be the but on independent I impact an the small think go or distribution. a like might a especially company more, thing is Ruger that business the to extending as leaves be of distributor capital frankly we're through largely where of the two-step exits much we that. has The it terms our have retailers. biggest might a extension I

Brian Rafn

I got okay. Yes, you.

overlay as sale? Mountain Pro side, retail Given with Outdoor, Bass Gander that, the much been how on retailers rebranding buying has Cabella's, the from Gander disruption in just from as many the bankruptcy situation

Christopher Killoy

we sell need those that try to and products don't direct, a while United new team Sporting, can. sure Brothers the very their transition sure to we good and it's that we're thing. that solid is a manage and source filed in which they Well, They're though work box hard a out when degree big we getting I some think makes the distributor to we to and transition best been like of very to since speed big they fliers, so impacted of we which a retailers works goes because one closely up account and have circulars Jerry's on help even make find included Ellett for as them supply, a have bankruptcy,

Brian Rafn

Yes.

Okay.

about mentioned distributors. Now geographically and may talked with past? guys? for there and have you three Or that other Jerry's, are you that distributors gaps think Ellett not any being wholesale you Are business any with out done the in more there looking down for are you I guys smaller you

Christopher Killoy

to any do say to strengths. they a distributors smaller good geographically, getting regional our larger worry maybe there's there are Well, more their as at bigger look We focus coverage. independents that on the the shops. distributors we're by I business to sure up is I about although gaps wouldn't neglected snap being worry What make tend little

in supply on. making sure eye of our force credit best the is of is the we as with have extension again, they're retailers the field alternate but connecting can sales sources lack to something they keep Our of

Brian Rafn

Okay.

launching that for that just You Show something just was had and that Was of that was product your a holiday you -- planned mentioned Or in XXXX? XXXX new in it XXXX product, naturally? that helped in something just and the it nice numbers a December sales. itself a Shot was the function the manifested really

Christopher Killoy

more say probably I'd the latter.

of throughout late likely steady early. cadence are Our the a products is is new ideal to challenge more new be The scenario than products invariably, they are year.

in sure we want to be them the -- the kicking certainly of to retailers more happens, deadlines year when when have So you year some some end what's an something that Shot like but coming. importantly you off make at of know of and those let we're front Show make can

of that keep as kind of an So We some And that great with had more demand anomaly. very biggest I production. try to products to gun great was the was has say excited the hit the gets already have of chase it's The just excited some that the would low standby with running lot attention, several the though say new and pistol do Wrangler, around we models referring things that consumer. of gets the caliber the so new continue got gun a I the key for that's that probably I'm when to from were with up we're attraction very a coming. covers it talking are point, year gets we course, about carbines. That price even and been we keyed clock this was a we've about up the launches Wrangler. lot And

Brian Rafn

the getting right, that. production and enough behind running talk on getting launch inventory date this? over still Because always about you we Are time

seeing You in still supply sound demand like you're Wrangler. the still outstrip

Christopher Killoy

lots may with limiting other the then the come We We've of different product specials, and down distributor line headway original extensions the X are colors. production to road. that still we're our there SKUs, X only got and

Brian Rafn

packages. in rank dealer that If special time? talked XXX does How X back maybe I about you go you over other whatever, or think years. versus or XXXX for months run for year-to-date Chris, rate

Christopher Killoy

distributor good specials. we But our use when launches, cut coming important make We good Well, try very we special in. times. to of it and exclusives those off be keep distributor customers, tend can would even to do keep excited, things always them down in to slow them because I never say

in are different terms of not of radically designs. them blockbusters necessarily Some

just our dial about a on talk but on them be extra their of different camouflage bit the the little floor Some may and distributor phone who salespeople something excitement color a up pattern it's gives largely retailers. when are again or different retail a to they

Brian Rafn

I'll Custom in has products get those have ask Shop. just one the Custom the -- Ruger XXXX, expectations? your and demand -- back met line. more in you Ruger you've in Shop. than you units get a on the How had How guys for got now have year a the more you few that the interest, a a volume sell-through How little

Christopher Killoy

it's very gone well Well, so far.

steady would our out standard with production. and relatively been approach, value low the performances traction and wanting expect, the pleased in taken those come a But and not to and you Custom right gain to the volume we've delivering very with Shop. it's we as As guns with make we've products slow we've compared try very shortcuts to sure taking we're level of

far So very pleased. we're

some other have there models have ones we and pipeline. about we're excited the We in great the out

Brian Rafn

I'll in Thanks. get back line.

Operator

comes next a [ph], Our private James question Kosher from investor.

now Your open is line

Unidentified Analyst

don't Good that on and beyond products, are Google is the the morning. so you carbine service stock can't background was -- great, great checks LCRs. higher PCX is the -- understand products, customer great the FBI it price. On with I your that just well

service you planning Your I having was And is are buybacks? wondering, customer on outstanding. more just

Christopher Killoy

support. We James. your appreciate Thank you,

But the that the million repurchase repurchases. your $XX quarter. sure had our we the remaining over on backbone third to buybacks, it I of you on can comment specific When authorization the Our plans end of like you comes users the we years. at don't to We are related stock end support tell company. our appreciate

hasn't changed. strategy Our really

focus our said the stewardship of Shot undervalued, is be significantly Show time may we'll primary the when repurchase earlier, the stock When we assets. that shares. believe the As I is the

that know, our of vehicle may do a a the to to market which structured we through and trading jump some extent is sometimes you out As ability restricts called plan and XXBXX that in quickly.

So is the a that $XX that remaining repurchase like again, get but authorization. we maintain million still to approach We on something. to structured

that's see things and So how by when stand develop. we'll

Unidentified Analyst

thank your appreciate answers. All right, I you well, it. for

Operator

Our next question [indiscernible]. comes from

Your open. is line

Unidentified Analyst

taking Thanks my for you. morning. questions A Good of couple for call.

it philosophy and that a question been understand people the Capital one And turned? the don't has cash case me have business to generate capital new has the blowouts is seemed managing used have? we we generation, Ruger Can have cash that that relates the the distributor we're normal general Management an where industry As. bankruptcies, First previously keep to give you on in retailer commentary any an historically the we we leverage Working to in world just have the to way a is, that haven't and negotiating working way my insight? With

Christopher Killoy

on. of distributors. competitors, to retailers is to with some pretty of some environment. at And going happened think of of and we those our policy then through some Actually, our navigate as we're and the help waters. look at that we we debt look We the our what's well-positioned We position structure what's us capital going our think

options. closely. it. We it for well-positioned We we're think very I at look watch other

the there right other headwinds we distribution As are is some we There out prudent the the distribution to out much seeing can think there. choice manage that. Ruger, We've And think course. we options for looked there these works that X-step now, but are at in some as we're marketplace. options of stay through other for us

Unidentified Analyst

maybe come mind been you and the and if the on, very of guys terms payment customer have like that that, you on old stay that things we're will things so weird course, a days disciplined back. that kind the period in very, of you're Okay,

Christopher Killoy

predict I to run our in don't come if were. they as back Well, once we the the but very know future how they'll we're of It's with both business. hard disciplined distributors

current. our So are all distributors

distributors. we had the on each current letters of insurance or of may we're credit and they with so get now. XX% think right our credit went We out [indiscernible] I credit insurance when

insulates again, some us So those in downturns. of that

well. pretty us. So We now, right be could seems I think more aggressive for we're this to but work managing it

distribution So what's we make We possibly look available. themselves from think looking probably issues acquisitions nature that at through of at there. whether or it's on out may and going things that managing we're well-positioned,

Unidentified Analyst

Got it.

keep anything action concerns that the a keep there litigation from front, was bankruptcy. On is guys there through standpoint legal to the you acquisition For away right from instance, would would that any non-business out allowed legal game? Is Remington? that you class concerns, of that pre-pack

Christopher Killoy

deal look and our due and then when a that might that's that no those each leave and of we're and rigorous terms say, There process structured. we would -- of to so hypothetically If might something in like stone why came one unturned, have they how be and be at our options. part as to that diligence would of deal we decision be pass on pretty that

Unidentified Analyst

Has it. been DTC there offering? Got direct consumer any about to conversations offering, a internally a

Christopher Killoy

entertained I recall we've not can that, that in history. No, recent

Unidentified Analyst

a lot, why Then amount, lastly can't know repurchase a was on this? talk the on small you did, that shed any you light dynamics you could the such but behind I what share

Christopher Killoy

long of place like you I period, asked then think before the XXBXX. then those Well, and question a documents limitations long on horizon; waiting when in want it's a early you execute. the trading to plans the have and I put horizon We James mentioned

not X where would you already got may we're but it execution X it and current by up of like somewhat that's those as months set Sometimes to moment, plans. out, in be to the limited you've the there

Unidentified Analyst

very you much. thank Understood,

Operator

have We the Rafn line Brian with Dempsey. Instructions] [Operator from Morgan question a of follow-up

Your open. now is line

Brian Rafn

It AR? line has gun. high-end the in modern How done of units to the up? stop, $XXX held some is higher-end of the the held how Chris, up discounting pricing that $XXX, sporting rifle SR most line be $XXX, seems and SR versus is in the in AR

Christopher Killoy

the got actually now. we've on line right Well, hiatus SR

a that versions we same we're the We've have -- and very some built NPR, points like family us. multi-purpose well however the At haven't We baseline our has several SR-XXXs at in in done to at. any SR of sometime price price rifle series got built the but that AR-XXX. or not point, the slightly for the higher addition SR-XXXs as

Brian Rafn

Okay, the so now, was you market that. older sell AR-XXs When -- in any that I that is something maintain were do really you AR-XXs could the is or XXXX, -- out XXXX inventory SRs the went and hiatus discontinued, that the just still is discontinued? line. or shot -- meaning have -- you something something produced still the the that that like you down just could that's Is molds, gun be is you have that's the

Christopher Killoy

Like I -- said, They changed, We got got family. with point price we're lower the working market be got in changed still We Is and our as ability AR-XXX not has make Mayodan now. the made building any that a parts. capitalized direction the we've AR facility. right to still would just We still on process. them. our down

Brian Rafn

machinery You -- mentioned super in Newport in tools cells? you and machine third or the how a little major Mayodan quarter much between bit guys did anything shift Prescott,

Christopher Killoy

amazing amount directions. X have plants. all a were just moving equipment in meeting in facilities. and life the that moved that the machines between actually seen for out X We've it's machines got board had we of We Prescott actually, Well, all X has

some As machines that's when winding down out or trying goes And looking that product new existence, tired. doing may are inventory sure we're worn our an we're a harvest then machines And line smartly. in cell of a those launches. we're and to super strategy capacity be capital part we of and make decreasing into at

facilities. new so them between You and we moving of we try the -- for machines to that been last terms and out those very we've got balance capabilities where need machines in times new that's years effective other couple of to our CapEx the all for replace

Brian Rafn

think $XX But are budget this buying you some I million still a year. was cases in it

are some buying wears stuff out. You CNC as machines new

going just to? not You're

Christopher Killoy

Absolutely we've got the all barrel CNC looking our machines time. capacities at for production. coming GFM in We're

some spending just looking also -- you of be CapEx of like and maintenance. we're terms to money is things like at lot have a fiscally in prudent So the that that. absolutely we're We still things how want

machine. fix that things your tools to have all gauges go so the just You addition and along have CapEx those new to in with

Brian Rafn

Anything the or the too still you're whatever furnace, I'm many furnaces main integrate guessing or on anything one? running main

Christopher Killoy

castings associated main Pine right well casting handle with not just but doing are call foundry. our are stable and legacy then what the using Pretty casting in making of or most We furnace supplying revert The really at Tree and still process, the the now. we have many No. trees rollover the needs. X the parts use primarily that you're furnaces main

Brian Rafn

club on of kind Chris, and you the in question, strategy that, Way was Callaway they know, know, castings there around, you Ruger did Just back, was a business a they did some snowmobiles. Bill when heads, cameras focus is in Is just interest better golf there core? your or get outside ball pen any and did they doing stuff, any to it like, casting

Christopher Killoy

we've of non-firearms making offshore. today business Well, the parts you moved know, And much so that we’re for those titanium. steel. thing is Callaway But club seen heads, were biggest remember? Those just casting

suppliers nature, that terrorist moved we things China, business that's the end where of have know, the the of low that casting despite in that offshore. place in You and lot the fact a --

found know, make doesn't chase you we fairly point. But to it so, always time, a which to do get at it, request present least business this minimal at quote certain but our things we at is case, the in sense our possibility. outside we And do,

Brian Rafn

Yes, okay.

you the products new product Ruger's know product pretty XXXXs, depending development I you maybe see prototyping, stable. kind at cycle launches and today, far, I'm way and years, Where know, cases of know good that, four products? guys kind thought the or different and you you strategic, be maybe just process over just sounds know, as, and a the into of time it's running, XX to what you on on at almost of from for or -- guys some going You all like is you to you time, park, would look were XX it order the back you on engineers. would you varies production that's different and in your so When know, what concept XX know, something one but, it's was at It know, months.

Christopher Killoy

of some Well, always more those R&D product I component, an mean, and longer. have take

is R&D get done of phase, And to the actually it's into do and try we what teams, that teams. want be to try we so execute. Because to our we once product hit got put one new able to if the it before we finished we

to from so folks, project the product phase keep can the teams so of engineers sometimes speak, purchasing and ward us quickly design getting R&D we'd all at as R&D folks, out bog once the engineers, from the well us managers, as typically they're can managers, floor, as they cleanly. And like. But those involve down out manufacture execute pretty as and shop and

Brian Rafn

vertical integrate down a in to parts in, I'm trying The newer get Missouri south what side. it, Okay. manufactured or is

Christopher Killoy

city? Or

Brian Rafn

are looking anymore? stabilized, Yes, just know, kind that mean, kind content versus kind you of of of internal utilizing source Or product I'm ability for I is you that outsourcing. your to

Christopher Killoy

Yes, good question.

products. You to Precision that on best our integration about you times know, is acquisition Metals Ruger our company, new the is, ability RPM, in lead thing know, cut with and

own made, call lightning to with we’re quickly ability prototype to up out in-house just really outside of than quite what folks. we parks You out our know, in dealing be metal our there’s ramped quicker lot and few terms and the far still very proven initial built, providers when effective a in launch get that outside we has used go But and and tools there, we suppliers. a of, quantities molding having to of injection use terms get get

Brian Rafn

you. Got

Board than, hierarchy lot, you repurchases you the say, repurchase of over more just net question treasury or you, me cash say safety regular dividends? standpoint, asked a Treasury a normal is Let has dividend the policy, ask cash above from your dividend a that priority special a and that know, would that been

Christopher Killoy

No.

of just, to the special because place I dividend. or we either position, of are necessarily just super category, repurchase but think, really not in our a a cash lieu share safe in that T-bills a good money park

Brian Rafn

hard about Okay. one hiring? that and count that on, hiring you engineers include you also mentioned XXXX. you does off think then know, Are any And or that I freeze? hiring just freeze, head I doing how is said think, you

Christopher Killoy

in replaced been facility. hiring got hiring engineering and recently we've slowed in -- already to back down. all we've really, the front, either started our we labor along New North talent direct we've be that the in the on maiden recruited primarily or if And Carolina good Well, Hampshire hasn’t facility

and bring of summer a full very into also recruiting for that's very, with internships round ground We us to engineers engineers, family. this Ruger a good been the new did in

So that year. other any it as in would all continued

Brian Rafn

active co-branding, And then the like some query background And But that. that. you did you. and know, the Columbia you is a offs? one River how the of you or needle it's of joint episodic are but just that and viable know, know, more sales Got acquisitions in projects not movers I little those, some know, or on big I how understand of of niche, revenue, Knife know, those either a you guys they're that you important everyone’s, you constantly

Christopher Killoy

Umarex River our Ruger Umarex that mean, or be they're brand part can largely something somebody the that's friends interested licensing the that feeder younger far age. in at us, good in you do getting like as I at Columbia business. guns. the one-off, branding and think as a I to particular have air And the a of

you of aren’t in really And revenue. needle movers so, terms know, again, but those

Brian Rafn

the anything then XXXX-XXXX a of in you from And palm with these, or standpoint, in strategic then, see think LCR, with pistol the XXXX-XXXX you them, about guns, had ARXXs, kind you call, certainly any kind ARXXs, from talking transformational talk a standpoint. run know, that's would know, where of like to design a Do some I'm peak smaller, you a that just different normalized concepts have market you from new years. the I its in know, the couple don't into of was it you interest, revolver. bring again off the you you last, and that, I past different, might back know, see

Christopher Killoy

ECXS you is next example, we've be Good the at LCP-X Brian. We're to I the would The know, LCP-X for looking generation continue the very family. of variety -- a things, of you question. LC-X strong. the tell got, and

So products. we've good a those job, really of I done extending think,

versions different are that We’re there. looking at out

price you And of things act. niches be, those have that what's to a was where the different. at? Wrangler and us like Where at that's and Looking the it's the one niche might be point dramatically know, for is we always balancing

it revolver. action single in and It in But, for more able really price single got Not high design pyramid us, was, that the top frankly, dramatically the different price single it's you opened wrangler for things us most participated at stable somewhat by really of know, to any it’s up at the that action know, and, different people terms means, us. of hit very the We the dramatically market You point, being family. point, in opened by for a the limited. it's up fairly It’s things interested for products, action part. but a

Brian Rafn

appreciate the Bye. really of that's guys. best you. luck, got again. awesome. I Thanks I color, And all

Christopher Killoy

Brian. Thanks,

Operator

Our Schwartz Cooper comes Creek. with from next question Robert

is line now Your open.

Robert Schwartz

Congratulations the here. forward orders on

happened up channel things quarter, given talk about and -- throughout that October the how maybe Can your Just sequential units and of to XX%. went to sort how acceleration ordered September and, the the and you what acceleration here. resulted forward from

Christopher Killoy

associated but and how much and don't get sounds is then don't be sign, product it what to good we a watch Monday our report in And always inventory to we watch we I you, of they're really we selling What a distributors. honest into a our distributors think new sometimes Every with do attention that's much download pay mean, as is I they terms orders. what the from pay That's inventory. us. Well, as run people weekly what’s on from with that we business. It's selling maybe retail, the counterintuitive, really attention the we orders. but really mean, our their to launch. we

carbine that you pistol-caliber there, influx new launch the So, out you put have we of when may a just have an orders. product like

see know, you that. at gross you may level, So

may You Wrangler, relatively is see case something lower price like which point. the of in the a

come price of than so units were those bias on your and sales a by can you average -- the in product for that of see that big that sometimes one the orders what price what's be down there bunch explained in, lower backlog. seeing is before, is selling but numbers launch You of so order; and

Robert Schwartz

quarter did October the see October throughout worse Okay. And into or of throughout continue a quarter, less accelerates did the or in large tick-up? the terms that

Christopher Killoy

haven't don't a Well, that really we comment I our forward the be little documents. mean would closed looking that We on out us. financial for in things

So remains hunting and and I'd the whether seeing the about back a not that I the talk forward, takes, get very the impact. swing be the as to think And that. cycle solid. hunting again, I cyclical season rather see puts seasonality We're go with fall ups and and I full and the is to any in would downs, there's we came products. think tell it's market. But election fall it's going we as you to interesting closer

Robert Schwartz

you very much. Thank Okay.

Operator

Our comes Private next Peter Garrett [ph], from Investor. question

is line Your now open.

Unidentified Analyst

that behind three is do of bankruptcy. distributor for balance Ruger I'm the road back to of get going I'd to numbers. issue. Or significant bankruptcy just your soft market you're the same the Hi. ago, its Three in you a bankruptcy distributor us? and is on inventory issue question to that referring like statements? clarification bankruptcy liquidation to referring by this a mention the distributor bankruptcy. of disruption of by to the What headwinds the did your go products. just trying be again current marketplace that expect months release, quote feel to quarterly is to damage your bankruptcy And between in demand a you down caused quarterly Do the distributor quarterly My months the

Christopher Killoy

of have Well remains on get because is points again, impacts shake to try when once and in you out that it's of of effect susceptible both the more to But credit on inventory wholesalers for it's like two-step Ruger retailers, our step other the really Ruger longer once to of suppliers -- The inventory's up transitory a recapture somewhat -- to that other situation reliance independent like and gone, and the thing, little somewhat happen. the need extended to distributor that the in losing the new wholesalers you exclusively. dumped, retailers. as That being it incumbent long-term they the is liquidate to you price on pull capital hopefully identified on. form then linger a I that takes And otherwise. mentioned, sizeable is extend to credit it's amount business, a

So that's --

Unidentified Analyst

see that happening? Do you

Christopher Killoy

XX places Well it have out goes always be. and demand inventory. expect again, years, since Jerry's a gone I right it's customer process. Ellett takes mean that a -- this to been product the But in now, while has around it tough I've moved long the big from to all to it's Brothers you and when doing

Unidentified Analyst

you own? expect its spread lost way will the that capability how that's was eventually its network existing And to will distribution work eventually distribution it out? The out on

Christopher Killoy

force. that might Yes. Association maybe October credit to chasing Wholesalers, on I and The our retailer trying it's business all is. actively the assure hungry actively with in bumps that a go be. as to just and after so National at with you establish road all sometimes our We always Sporting to and Well, the it get own from you it. of for few as our Goods smooth are new with distributors chase business of they're that always and can it finished distributors reputation help along you distributor sales it. or think speed like needs a always It's we'd just as not new a smooth There's not as as meeting a

Unidentified Analyst

Okay.

the So months correct? or of on it that two. summarize pieces that might still next me let ago, to three Is this not is -- it the hearing. I'm was hanging -- bits we quarter see and try the it's for not just big big It's bankruptcy but headwind not what headwind

Christopher Killoy

disruption, goes It's day. improving. gone, -- the it's the that by, price a but And is inventory's week think I again, that's long settled that certainly it's certainly every and points improving Every improving. down, have situation

Unidentified Analyst

soft dealing right you're the with now, marketplace just it's primarily that So right?

Christopher Killoy

competitors our that our Well, seen look capital are we and or that. terms payment in again, from we market, levels the we've we approach I've discounting our hung up out struggles get when memory. of when look extending And management the distributor that say extreme. seasonality our look some to to but by certainly I at I customer some -- wouldn't and discounting competitors soft disciplined receivables, Again, it I Part won't my and on is any approach to maintaining there. strengths soft never at think at too the marketplace

the Our all competitors time. that do

XX. X% Our XX, net net terms That's it. are

of where If sometimes don't, getting you versus that And not hurts don't Most pay, the shipped. offering that's our an short in the about I when anomaly. That we short term. of extended flexible is are in and long-term payment talk the very terms view us. you're terms, competitors taking term,

Unidentified Analyst

Right.

were last question; they're One per -- well down approximately quarter But million. share this much $XX they They're versus in million quarter? Okay. compared down same as revenues earnings down diluted X%, are to earnings the are $XX quarter. Why lower basically last are so $X.XX other quarter $X.XX versus this per share. XX%,

Christopher Killoy

we mix issues. Well, manage three biggest impact But of decreased, on production production took our that also change running We has down. -- inventories, value take profitability. factories, we when the and thing production a our with we was big had some our is down down took our and sales we to production biggest

Unidentified Analyst

I all you. That's had. Thank All right.

Christopher Killoy

Thank you.

Operator

will I'd call to session. Mr. remarks. to like today's that back Killoy for question-and-answer conclude closing turn And the

Christopher Killoy

want thank would served I Guard to call Monday, our your Ruger I have and with earnings our Well, and attending those I today Ruger. February. with to that interest continue for team, especially many joining you employees in our their serve hard National country to speaking for before our the all forward call on employees Reserve. X,XXX for the continued and Thank veterans, you year-end thank in look in work like and at conference Veterans to you. who thank And dedication. Day

Operator

gentlemen, participating. today's conference concludes call. you for this Thank and Ladies

disconnect. may You now