Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Executives

Michael Fifer – CEO

Sarah DePanfilis – Associate General Counsel

Tom Dineen – VP, Treasurer and CFO

Analysts

Brian Ruttenbur – CRT

Brian Rafn – Morgan Dempsey Capital Management

Andrea James – Dougherty & Company

Scott Hamann – KeyBanc Capital Markets

Gregory Fetchko – Private Investor

Dustin Henderson – Eagle Asset

Noah Steinberg – G2 Investment Partners

Aaron Smith – CNN Money

Eugene Flynn – Aegis Capital

Sturm, Ruger & Company (RGR) Q4 2013 Earnings Conference Call February 26, 2014 9:00 AM ET

Operator

Very good day to you ladies and gentlemen, and welcome to the Q4 2013 Sturm, Ruger Earnings Conference Call. My name is Karen and I will be your operator for today. At this time, all participants are in listen-only mode. And we will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Michael Fifer, CEO; and Thomas Dineen, VP, Treasurer and CFO. Please go ahead.

Michael Fifer

Good morning. Welcome to the Sturm, Ruger & Co. year end 2013 conference call. I’d like to ask Sarah DePanfilis, our Associate General Counsel, to read the caution on forward-looking statements, which will be followed by a quick overview of 2013, including the fourth quarter and then we can get right into your questions. Sarah?

Sarah DePanfilis

Thank you, Mike. Statements made in the course of this presentation that state the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the company’s actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time-to-time in the company’s SEC filings, including, but not limited to the company’s reports on Form 10-K for the year ended December 31, 2012 and Form 10-Q for the first, second and third quarters of 2013. Copies of these documents may be obtained from the SEC or through the company’s website at www.ruger.com.

Furthermore, we reference non-GAAP EBITDA. Please note that the reconciliation of GAAP net income to non-GAAP EBITDA can be found in yesterday’s Form 8-K filing and earnings press release, which are posted to our website. The company disclaims all responsibility to update forward-looking statements.

Michael Fifer

Thank you, Sarah. For 2013, net sales were $688.3 million and fully diluted earnings were $5.58 per share. For the corresponding period in 2012, net sales were $491.8 million and fully diluted earnings were $3.60 per share. This represents year-over-year sales growth of 40% and year-over-year earnings growth of 55%.

For the fourth quarter of 2013, net sales were $181.9 million and fully diluted earnings were $1.33 per share. For the corresponding period in 2012 net sales were $141.8 million and fully diluted earnings were $1 per share. This represents year-over-year sales growth for the quarter of 28% and earnings growth of 33%. Our 2013 EBITDA of $195.7 million increased 54% from our 2012 EBITDA of $127.1 million. And our fourth quarter 2013 EBITDA of $48.1 million increased 33% from our fourth quarter 2012 EBITDA of $36.2 million. New products are a strong driver of demand and were $195.8 million or 29% of firearm sales in 2013.

As a reminder, we define new products as only those that were introduced in the past two years and we include only major new products and not minor line extensions. Major new products introduced in 2013 included the LC380 pistol, the SR45 pistol, the Ruger American Rimfire Rifle, the SR762 rifle and the completely redesigned Red Label short gun. Demand for Ruger products from 2013 remained very strong as evidenced by the 18% growth in estimated sell-through of Ruger products from the independent distributors to retailers. We believe the strong demand for our products was due to the company’s continued practice of introducing innovative and exciting products, new shooters joining the ranks of gun owners, the political environment in 2013 that favorably impacted the entire firearms industry and increased manufacturing capacity and greater product availability for certain products and strong demand.

The 7% increase in National Instant Criminal Background System checks in 2013 as adjusted by the National Shooting Sports Foundation is indicative of this overall industry growth. 2013 was the sixth consecutive year that our growth in estimated sell-through from our independent distributors to retailers outpaced the growth and adjusted mix checks.

In response to strong overall demand and demand for our new products that were launched in 2013 we increased our unit production by 33% from 2012. To achieve this increase in production in 2013, we reinvested $55 million approximately 45% of the cash generated by operations back into the company in the form of capital expenditures. These capital expenditures exceeded depreciation by approximately $34 million during a year which represented an increase to our capital equipment base of approximately 14%. Our commitment to continuous improvement through the implementation of lean business practices enabled us to leverage this 14% increase in our capital equipment base to achieve the 33% increase in the unit production.

The company’s finished goods inventory increased by 12,000 units in 2013, which is less than two days of production. Our goal is to replenish the finished goods inventory at company which could increase the value of the company’s finished goods inventory by as much as $30 million from the current level. Our independent distributors’ inventory increased by 146,000 units in 2013. In 2013 the distributors averaged more than 20 inventory turns on Ruger product which significantly exceeds the 6 to 8 turns that the company deems appropriate for its distributors, which equates to about 300,000 units at distribution. We believe that both Ruger and our independent distributors will benefit from this increase in finished goods in inventory which will allow for more rapid fulfillment of demand.

I want to take a minute to discuss the current state of the market. Our experience indicates that demand for Ruger products remains strong. Our distributor show season has just come to a close. While we are still digesting all of the order data we received from the shows, four key points have emerged. One, orders are down from the 2013 show season. In the wake of the political and legislative uncertainty in early 2013 retail and distributor ordering last January and February was driven primarily by emotion. This year show season orders have been more realistic and therefore healthier for all levels of the industry.

Number two, orders are more realistic and shippable. The more rational tenor at this year shows resulted in retailers ordering products in quantities that they actually expect to receive and genuinely want. Last year dealers and distributors placed unrealistic, oversized orders even though they knew that only a very small percentage of the units ordered will be shipped to them in a timely manner.

Number three, orders are up significantly over 2012. This year’s orders for Ruger products increase significantly at every distributor show compared to 2012. I think this is encouraging as we all expected a market correction from the surge in demand at the beginning of 2013.

Number four, we are outselling our competitors. The information that we received from our independent distributors indicates that demand for Ruger products is outpacing demand for our competitors’ products. We continued to prioritize our new product development, which we believe is the key to long-term market share growth. There was also plenty of press highlighting the fact that the January 2014 mix checks were down significantly from January 2013. This was true. However, there is very little reporting on the fact that January 2014 was the second highest January on record for mix checks.

2013 bookings decreased by approximately 628,000 units from the 2012 bookings and our backlog remained at 1.5 million units at December 31, 2013. Keep in mind, we do not use backlog as the key indicator when planning and operating the company. Instead, we focus on estimated sell-through of our products from the independent distributors to retailers to run our business including our target production rates. As I mentioned a few minutes ago the estimated sell-through of our products from independent distributors to the retailers increased 18% in 2013 compared to 2012.

Our balance sheet at December 31, 2013 was strong. Our cash and cash equivalence totaled $55 million, an increase of $24 million from December 31, 2012. Our current ratio was 1.8 to 1 and we have no debt. At December 31, 2013, stockholders’ equity was $179 million, which equates to a book value of $9.26 per share, of which $2.85 per share was cash and equivalents. In 2013, we generated $120 million of cash from operations. We reinvested $55 million of that back into the company in the form of capital expenditures. I mentioned a few minutes ago these capital investments allowed us to realize a 33% increase in production, which was instrumental to the achievement of our record financial results in 2013. We estimate that capital expenditures in 2014 will approximate $35 million.

In 2013 we returned $41.1 million to our shareholders through the payment of dividend. An additional $10.4 million in dividends will be paid to shareholders on March 28, 2014, as our Board of Directors recently declared a $0.54 per share quarterly dividend. As a reminder, our quarterly dividend is approximately 40% of net income and varies every quarter.

There is one accounting action that I want to bring to your attention. In the fourth quarter of 2013 we revised the estimated useful life of our machinery and equipment from 10 years to 7 years. This change, which became effective December 31, 2013, resulted in increased depreciation expense of $700,000 for 2013. We estimate that this change will increase depreciation expense for the machinery and equipment that was on hand at December 31, 2013 by approximately $7 million or $0.20 per share in 2014 and by approximately $3 million or $0.10 per share in 2015. This change better reflects our evaluation of and decision making processes for capital equipment purchases.

And there is one last item I want to cover before we get to your questions. Effective January 1, 2014 Chris Killoy was promoted to be our President. Chris is one of the industry’s most experienced and respected executives and has been instrumental in executing our new product launches and driving the company’s strong sales growth as our Vice President of Sales and Marketing. In his new role, Chris is a Chief Operating Officer and is responsible for sales, marketing, manufacturing, product management and new product development. This will free up some of my time and be more focused on strategy and capital allocation. I am delighted to work with Chris in his capacity and look forward to seeing Chris making even stronger contribution to Ruger.

Those were the highlights of 2013. Operator, may we please have the first question?

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Your first question comes from the line of Brian Ruttenbur from CRT. Please proceed.

Brian Ruttenbur – CRT

Thank you very much. Great year. Couple of questions. First of all, on housekeeping stuff, let’s start off with the depreciation, what is your total estimated depreciation in 2014 and 2015 now?

Michael Fifer

Tom Dineen, you want to take that one?

Tom Dineen

Well, I guess that we don’t offer that forward-looking guidance, so we are…

Brian Ruttenbur – CRT

You just talked about it a second ago with its increasing by what $7 million in ‘14, is that right?

Tom Dineen

Correct. That’s the adjustment. So the changes resulting in that increase and then we will have our normal depreciation, which will be largely based on CapEx, which we have also disclosed as estimated at $35 million for next year.

Brian Ruttenbur – CRT

Okay. And ‘15 depreciation was going to increase from ‘13 levels by how much?

Tom Dineen

Let me get the right number here. That was about $3 million…

Michael Fifer

Or $0.10 per share.

Brian Ruttenbur – CRT

Great. And then CapEx you said $35 million for 2014 and it was $55 million roughly in ‘13 correct?

Tom Dineen

Yes.

Brian Ruttenbur – CRT

Okay. Your historical rate for CapEx has been around the $20 million mark? Is that what we should be looking for beyond when you look further out or should the $35 million be more of a sustainable rate?

Michael Fifer

Well, Brian I am not going to shrink the company voluntarily. So you should assume that if I am trying to achieve say plus or minus 30% of sales in new products this year, I have got to keep going substantially in that category.

Brian Ruttenbur – CRT

Okay, that makes sense. So, can you talk a little bit now switching to the top line revenue plan for the casting business, what are your plans, it’s down significantly quarter-to-quarter and just want to know what your plans are going forward?

Michael Fifer

Well, as you know we grew tremendously during 2013 and we ran into capacity constraints and foundry. And so we fired a number of outside customers and shifted that capacity to serve our internal needs. As we continue to grow the foundry side of the business along with the firearm side of the business. When and if the foundry capacity is greater than our internal needs, we will seek outside customers again and probably grow that a little bit and if we have another year like ‘13 where we need to bring it all inside, my gosh, we’ll do that.

Brian Ruttenbur – CRT

Okay. And then if we can talk about the new factory, is it fully up and operational right now and how many products are you producing in there?

Michael Fifer

Brian, the new factory is about 220,000 square feet and I doubt we are using even 20,000 feet of it yet, but there is a production line that has been running there successfully since Thanksgiving, which is quite a few months ahead of schedule.

Brian Ruttenbur – CRT

Okay. And is there plans to ramp up that factory to full capacity in 2014?

Michael Fifer

Brian, I think what you are asking is are we going to fill the whole 220,000 square feet? And the answer to that is no. I would expect to as we grow and introduce new products, a lot of them will end up in the new Mayodan, North Carolina facility. And that probably we should plan on maybe filling up another 40,000 feet a year of that, it will take a number of years, it will take five or six years of good growth to fill that building.

Brian Ruttenbur – CRT

Okay. Last question is about capital allocation then I will let somebody else ask. Since that’s going to be your new focus, one of your new focuses on capital allocation and cash flow. Are you going to focus primarily on share repurchases and dividends? Are you willing to seek outside uses of the cash or in acquisitions?

Michael Fifer

Yes.

Brian Ruttenbur – CRT

Okay, very good. Thank you very much.

Operator

Thank you. Your next question comes from the line of Brian Rafn of Morgan Dempsey Capital Management. Please go ahead.

Brian Rafn – Morgan Dempsey Capital Management

Good morning, Mike.

Michael Fifer

Good morning, Brian.

Brian Rafn – Morgan Dempsey Capital Management

Give me a sense from the standpoint of Mayodan, you talked – you just kind of answered the question relative to building up capacity, is Mayodan going to be just an assembly plant or are you actually going to be installing furnaces down there?

Michael Fifer

We have given some thought to putting a foundry down there, but it will be a while before we do it. There are some clear advantages to utility rates, but there are some disadvantages in the near term of increasing the complexity too fast for the engineering staff down there to handle it. So the first major, what I call, vertical integration that will occur down there will be hammer forging and that will actually be up and running this summer. And once we get past that, then we can look at the next significant thing to add. But today, you have in that factory you have lot of machining and you have assembly, because we integrate that altogether in a single value stream. We also have blowing in there, but we don’t yet have heat treating in the building and we don’t have foundry in the building yet.

Brian Rafn – Morgan Dempsey Capital Management

Okay, okay. What given the furnace situation up in Newport with the integrated, where are you on bringing up these mini mills in tandem with that?

Michael Fifer

As you know, we have one mini mill running and very successfully it exceeded our expectations. And instead of going immediately to the second mini mill, we actually decided to adopt some of that technology to the current large mill, because we could improve the efficiency of that mill. And it was a bigger financial opportunity then getting the second mini mill up, but we are now full steam ahead on assembling the component parts for the second mini mill and hope to have that up and running sometime this coming year.

Brian Rafn – Morgan Dempsey Capital Management

If you looked at your floor space, Mike configurations for, how many mini mills could you actually install up at Newport? Would it be a half of dozen, a dozen, obviously, you are going to roll these out from incremental and you are not laying these all out, you are going to be doing it sequentially, but what kind of size configuration would you have?

Michael Fifer

When we first did the planning, Brian, the company was a little bit smaller. That was one or two years ago, 40% growth. And at that time, we felt we could replace the large mill in its entirety with four or five mini mills that we could cycle on and off sort of modulate our capacity as needed. Obviously, we have grown a little bit since then and that’s why we would long-term look at putting a mini mill in Prescott to replace the foundry that was once there and then later closed and potentially putting a mini mill in Mayodan as the product lines justify.

Brian Rafn – Morgan Dempsey Capital Management

Okay, okay, okay. And then of the $35 million you talked about in CapEx, Mike, how does that allocate between the three plants Newport, Prescott and Mayodan?

Michael Fifer

Probably a better question is how does that allocate between new products and existing stuff? And once again, the majority of it is for new product development.

Brian Rafn – Morgan Dempsey Capital Management

Okay, okay. You talked a little bit, Mike about in the past about getting design teams and a mix of four to five guys, metallurgy guys, mechanical design guys, and putting them together, where is that constraint today? Have you added teams since our last third quarter conference call? And what is your sense for 2014?

Michael Fifer

I don’t know that we have added anything since just three months ago, but there is a team up and running in Mayodan, which I think is very exciting and that consisted of some folks that we hired directly in North Carolina plus a few other folks volunteered to move there from other plants. We have done a little bit of shuffling. We also had some Newport engineers transfer out to Prescott. So, I can’t give you a good clean answer on that one other than we have got a robust engineering department and we are that’s my knowledge haven’t lost anybody and we keep adding.

Brian Rafn – Morgan Dempsey Capital Management

You keep adding. Okay, with your new Red Label II shotgun, what was kind of your experienced in that reintroduction to the market, was the sell-through on plan, were you surprised, give me a sense as to how that – since you reentered that market?

Michael Fifer

The demand has been – had exceeded our capacity since the day we launched it and remains true today.

Brian Rafn – Morgan Dempsey Capital Management

Okay, any line extensions to that, Mike or additional products or is that in the general trend of new products at Mayodan?

Michael Fifer

You mixed a couple apples and oranges there. That product is not made in Mayodan, it’s made in Newport, New Hampshire. And with our reintroduction of that completely reengineered Red Label, I think it would be reasonable for any observer of the company to expect that there will be other calibers in the future.

Brian Rafn – Morgan Dempsey Capital Management

Okay. I will get back in line. Thanks Mike.

Operator

Thank you. Your next question comes from the line of Andrea James from Dougherty & Company. Please go ahead.

Andrea James – Dougherty & Company

Good morning, thank you for taking my questions. How big of a problem is the ammo shortage relative to sort of your business and just giving the currency of your stock do you think it would make sense to maybe take the ammo – acquiring ammo company or just take ammo production into your own hands?.

Michael Fifer

Andrea it affects us on two levels. One of which we can directly measure, which is the challenge of production when the ammo suppliers sometimes are late on the delivery and in fact, there is quite a lot has to do right now with Rimfire ammunition. And we are sort of managing to hold our own here, but it’s little bit hand-to-mouth on the production side. Occasionally on centerfire rifles and handguns, particularly if you have an obscure rifle caliber, we have trouble getting proof ammunition, but that doesn’t turn in much of a factor. I don’t think you guys wouldn’t see the numbers, they are not that significant because obscure caliber is generally on high volume. They passed more significant and we cannot measure directly is the loss sales because consumers get discouraged when they can’t buy Rimfire ammunition. Then they are discouraged and tell us that they are deferring purchases of Rimfire, handguns and Rimfire rifles. And that’s a really tough one. That’s the one we are actually concerned about much more so than our concerns are with the production side.

Andrea James – Dougherty & Company

Would you consider producing your own ammo?

Michael Fifer

I don’t think we would. Unless we were to be fortunate enough to be able to acquire one of the ammo manufacturers, and so far at the moment, none of them are for sale. It’s a very, very difficult business to enter particularly the Rimfire ammunition is very, very hard to build. And if we knew what we were doing and we started today it would be a couple of years before we could get a plant up and running. And frankly we don’t know what we are doing and so absent an acquisition of an ammo company, we are really not going to be entering that business.

Andrea James – Dougherty & Company

Okay. And then what are your thoughts on the intrinsic value of this new factory, what it does for you as a company?

Michael Fifer

One of the most important things it does for us is give us access to a new work force, we have really tapped out the work force in both of our primary manufacturing communities. And we have people commuting more than an hour for basic entry level manufacturing jobs and that’s kind of ridiculous. So it’s given us access to a really well educated, skilled workforce in North Carolina and encourages me significantly that as demand for new products drives the business we will be able to grow the business and to meet that demand.

Andrea James – Dougherty & Company

And then finally are you looking at being inquisitive in any way I am just wondering?

Michael Fifer

Well, we have looked at it all along. We have never really taken our eye off the ball. The problem has been that during good times nobody wants to sell. Six months after peak in surge everybody wants to sell it at just absurd prices and it would be silly to purchase them. So I am not sure those lines will ever cross in a favorable manner, but we are alert and keep up our relations with all the folks in the business that we would like to buy. And somebody ever gets realistic about a price will jump right in.

Andrea James – Dougherty & Company

Thank you so much for taking the questions.

Operator

Thank you. Your next question comes from the line of Scott Hamann of KeyBanc Capital Markets. Please proceed.

Scott Hamann – KeyBanc Capital Markets

Yes, thanks. Hey Mike and Tom. Just a clarification on something you said earlier Mike in terms of the orders for first quarter. I think you said that they were down versus ‘13, but up versus ‘12 and correct me if I am wrong. But I am trying to look at your numbers I thought that orders in the first quarter ‘13 were about $1.1 million in first quarter ‘12 they are $1.2 million, so can you kind of help take through that?

Michael Fifer

Sure. There is a couple of factors that play. One, I am talking about the orders for Ruger product placed by retailers at distributors. And those in ‘13 were just through the roof. I mean they were absurd amounts. You would have a guy for example, a retailer coming in who had a $25,000 credit line trying to place on order for $100 million worth of product. I mean it was just silly. He knew he wasn’t going to get it. We certainly couldn’t fulfill it. And at the same time, the distributors got a little bit caught up in this. They always kind of over react in both directions and since that was a surge they over react in that direction. And we actually had been try to place orders on us that were significantly higher than what we accepted and what we reported. So whatever number we reported last spring, you should understand they had tried to place significantly higher orders than that and at a certain point we just started refusing the orders and sending them back and telling them get more realistic.

Scott Hamann – KeyBanc Capital Markets

Okay. So when we think about Ruger orders from distributors versus 2012 numbers that – it’s I mean I don’t know if you can comment on that, but it feels like that might not be a good number I mean to be up versus, right?

Michael Fifer

No, 2012 we accepted whatever orders they placed because they seem aggressive but realistic. The 2013 orders they attempted to place upon us were grossly unrealistic and since we are trying to maintain a policy of non-cancellable orders, we started to push back on them. And we ask them to actually do the same to their retailers, so that retailers would have sort of meaningful information with which to operate their business rather than that guy with a $25,000 credit line hoping and praying he is going to get a $100 million of product before the surge ended. We formally told the distributors exactly how many units of each type they would get through the spring and asked them to go back and tell their retailers exactly how many they would get so that people could operate their businesses in more rationale manner.

Scott Hamann – KeyBanc Capital Markets

Okay. And I guess on a separate topic, I mean as you obviously made some progress you talked about last call, talking to distributors and those inventory levels higher and the turns down. I mean as you think about where we sit right now, how do you plan to manage shipments and production as we are kind of in a period of volatile demand, as we think about 2014 is the fourth quarter run rate a decent run rate or is that something that would have to be adjusted based on where we see demand materialize throughout the balance of the year.

Michael Fifer

Well, Scott, I am not going to try to forecast demand. I can’t do that any better than you can or anyone else doing channel checks. We are not going to stuff the channel, but what do I mean by that? I am asking these distributors to get to at least 8 turns and I would prefer them to be 6 turns, so in past its 8 turns of 2012 or 6 turns of 2013 who knows the numbers aren’t thus far. And to the extent that they get there on all the key products, I won’t stuff the channel in anyway stay perform to the extent that they are still trying to get away with ‘10, ‘12, ‘14 turns, I am going to put pressure on them to act like real distributors and take the responsibility to these distributors very seriously. And we will see where it goes from there.

Scott Hamann – KeyBanc Capital Markets

Do you get the sense in talking with distributors that other manufacturers are doing the same thing where they are getting push from lots of different levels or do you think that they are placing at that, what you call the company that you want to do business with and Ruger has a great intrinsic value company. I mean, how do you think they are looking at that?

Michael Fifer

We treat the distributors much differently than how the other manufacturers treat the distributors and we also demand different behavior from the distributors with respect to Ruger as a consequence. We do not stuff the channel on them. We give them absolute price discipline, so they know their inventory is non-perishable. And that’s not how the other manufacturers treat them. The other manufacturers will have so far behaved in a way that they will look for any deal. They often undercut the distributors and the buying groups can buy cheaper than the distributor can buy or they will stuff the channel without hesitation. And so that – my bigger concern frankly is that can provide some cash flow constraints for some of the distributors that they have got too much of the other guys’ inventory or and it’s slow moving. So we frankly – since we treat them in a much better way we demand better performance from them. I don’t frankly care if they pay the other guy. But they will pay us, they will pay us on time or they are go to be fired because there are some other big distributors who would love to step in and take their place, and they all know it. And frankly they have made volumes on Ruger and they like Ruger and its fun to sell because you don’t have to worry about price. And so I think they are treating us better.

Scott Hamann – KeyBanc Capital Markets

Okay, I appreciate the thoughts.

Michael Fifer

One other – let me add one other thing to that. Remember, we talked about in the past that every two and a half weeks we sit down and plan production based on what has actually sold through. We don’t plan production based on the orders received, we don’t plan it on what will be easier fun or profitable to make. We look and see what the consumers are pulling through the channel as evidenced by the distributor sell-through the retailers and that’s how we decide what to build.

Operator, do you have another question?

Operator

Thank you. Your next question comes from the line of Brian Rafn from Morgan Dempsey Capital Management. Please proceed.

Brian Rafn – Morgan Dempsey Capital Management

Yes Mike, given you have the new plans on Mayodan that you are going to begin using for more of your new product design. If you look at over the next few years do you think you are going to be able to given more capacity, probably adding some more design teams, are you going to be able to kind of compress the cycle time between your concept prototype engineering, testing and then you can actually build stock, we have talked about this over time and I am just getting a sense as you look out the next few years, if you are going to be able to just start to shrink that cycle time in new product introduction?

Michael Fifer

Brian I can assure you it’s one of our highest priorities and we are trying. But I have to tell you it’s also been one of my largest disappointment as a CEO of Ruger is that we have not made the kind of progress I would liken and reducing the time from concept to product introduction. Frankly when an engineer tells me the product will be ready in June I – unfortunately I ask them what year, because I don’t know always assume its next year. And probably our single biggest success in reducing cycle time was the introduction of the Ruger American Rifle, but we have got a couple of other great products that I was hoping to introduce late last year that will frankly probably be mid-year 2014. And if you think about our big capital spending being primarily tied to new products and you see the equivalent of big rabbit going through the snake on capital spending you got another something coming out of it, it’s coming.

Brian Rafn – Morgan Dempsey Capital Management

Okay, fair enough. Give me a sense Mike, certainly your discussions with the wholesalers about rationality in turns going to 6 to 8 not just as 30 times cross stocking that. What is your sense as you have these discussions in the 2014, of the success and kind of convincing some of those wholesalers, is it more hard ball or do they share that, I am just getting a sense of how successful those conversations can be?

Michael Fifer

Well, all the distributors have made the right noises. They had expressed enthusiasm about it. But the reality is that there are getting a lot of products from the other manufacturers and we have had to play a little bit of hard ball to have them recognize that we treat them different and they need to treat us different and they need to pay promptly and on-time and worry a whole lot more about the Ruger business and not worry so much about paying everybody on an equal footing because they are not being treated on an equal footing by everybody. And as we have had to do a little bit of that hard ball with a couple of them, they appear to have seen the wisdom the way forward. As you can see our receivables are very current and the product is selling through.

Brian Rafn – Morgan Dempsey Capital Management

Yes, okay. Mike you talked a little bit in your press release about being up – I think it was 12,100 units, you said in the past I think your safety stock your margin of safety, building your own inventory up as much as $30 million, might you have any success in 2014 at building some of that replenishment stock at Ruger?

Michael Fifer

Well, I am sure hope not. One of those things, we really want because we think we do a better job and had we had more inventory going into Q1 2013. We would have really had higher sales in that quarter. We would have really blown away mix. Remember that quarter our sell-through was actually – the growth in our sell-through in Q1 of ‘13 was less than the growth in mix that quarter because our stuff had sold through so fast in December of ‘12. There wasn’t anything on anybody’s shelf in ‘13 and all we could do was ship what we produce. There wasn’t any inventory at our shop or at the wholesalers. And so we really left a lot of sales on the table in the beginning of ‘13 because we didn’t have that inventory. So I really do want to build that inventory, but it’s kind of its nicer if you are so busy you never have a chance.

Brian Rafn – Morgan Dempsey Capital Management

Yes, let me ask you on that thought, a very good point Mike. And what is your sense of that guy coming into the store that kind of that mentality. If you don’t have that, your describe that for the first quarter of 2013. How much is your sense that you may have been able to as you build the inventory, the 2013 deliver that that you are able to maybe supply that or do you think that’s always going into the Q1 ‘13, it’s also just playing loss sales, if you didn’t have it instantaneously do that guy that the gun (founder) he is going to somebody else?

Michael Fifer

There are several factors to play here. In Q1 of ‘13 there was a lot of emotion, a lot of fear, a lot of uncertainty driving sales. And so the consumer coming in worried about this is his last chance to buy a certain type of handgun or rifle. He is motivated to buy one even if it’s not a safer brand. He has got to go home with something. Second factor is that any self-respecting retailer is going to try to make sure that consumer leaves with product that was available in the store. That retailer is not voluntarily going to take a range check or special order anything. He wants to move the inventory he or she has on their shelf right then and there. And then the third factor which can come into play and hopefully did was that if we just launched the new exciting product that the consumer really wanted, sometime later in the year when it’s available they will step up and buy it anyway. So I think by in large Q1 we did a lose a lot of sales, but some of them particularly in the brand new products like the SR45 or LC380 later on in the year hopefully the consumer went ahead and got it anyway.

Brian Rafn – Morgan Dempsey Capital Management

Okay, good answer. Mike, some other things in the industry specifically from the standpoint of gun control you – there has been some mentioned discussion Michael Stamping electronic ID firing mechanisms, what’s your sense of technology in that, is that just a lot of preps or there is some more reality to that?

Michael Fifer

I think the average consumer really doesn’t want a lot of technology in their weapon. They certainly don’t want batteries, they don’t want something they have to put in the charger to make sure it works because the one-time they might needed particularly when you look at self-defense weapons or hunting weapons, they really want that Firearm on to operate as designed and anyone come with a low battery signal how do you – do you hold off the attacker with arm where you are trying to recharge your gun, they don’t like that. On the other hand new mechanical features that makes the gun more accurate, make it more comfortable to shoot, that reduce recoil, they love that kind of technology. And that’s what we aim to give them. You mentioned one where it’s a particular challenge and that’s micro-stamping. And unfortunately the State of California went ahead and implemented that last May – May ‘13 and there have been no guns, submit no semiautomatic hand-guns submitted to the California roster after that effective day in May ‘13 that have been approved and put on the list and in fact had quite the offset happening, any guns that needs retesting falls off the list, because it can’t pass the micro-stamping. It doesn’t work the technology is very, very flawed and California was frankly wrong to put it in place and it was a very politically driven, not technology driven, not factually driven, the damn thing doesn’t work nobody has been able to make it work although I think countless companies have tried. And it’s going to really harm the average citizen at California and I say the average citizen because California of course was smart enough to exempt all their law enforcement people, because they don’t want those guys to run out of gun.

Brian Rafn – Morgan Dempsey Capital Management

Yes, okay. And just one final one, Mike, you talked a little bit about M&A, you talked, I think used the word we are always alert, how do you see pricing right now, you mentioned certainly it was going to be availability something being offered for sale, what’s kind of the flexes on multiples or EBITDA on that?

Michael Fifer

Well, I think it parallels what you see on the private equity side. And our biggest chance was near the end of the recession when the private equity guys had trouble borrowing money and the amount they could borrow, the multiples were very low, but right now and I am sure you guys know no far better than I do, the multiples that the private equity guys can borrow at are much higher than they have been, I mean, they are really reaching levels of absolute absurdity and that drives overall prices in the market. I mean, I don’t think it would be responsible for us to be out there paying 9 or 10 times EBITDA for a company, when frankly we trade for less than that. And I think the old thumb rule of 5 or 6, maybe 6.5 times EBITDA is a reasonable purchase price and anything beyond that is starting to get into the silly zone, but private equity guys really drive the pricing in the market. And of course, they have a short-term horizon, where they are only going to hold it for few years. And any acquisition we do, we have got to approach with a very long-term horizon. So, we have to pay a reasonable price and everything we have looked at so far, the prices have been unreasonable and we have concluded that our highest return on investment is to hire more engineers and just do it ourselves.

Brian Rafn – Morgan Dempsey Capital Management

Yes, okay, thanks Mike. I appreciate it.

Operator

Thank you. The next question comes from the line of (indiscernible). Please proceed.

Unidentified Analyst

Hi, thanks for taking my questions. Just quick hoping to get some color on new products in Q4, I assume last year, you ended up like 38% mix of new products and you ended this year at 29%, but you have been clipping around along at about between 35% and 31% just curious to know what happened in Q4 specifically?

Michael Fifer

Well, a couple of things happened. First, look at the absolute numbers too, 29% last year was more than 38% the year before. It gets a little bit higher each year. As you know as we go up in sales, $150 million, $200 million a year, the hurdle I have to do to produce a third of our sales at new products gets really, really hard. And also blockbusters do drop off. We only keep them on the list for eight quarters and in the ninth quarter, they are off the list, no matter how well those are. And then add on the factor that a couple of products I was hoping to introduce in December frankly I will be happy if I introduce them in June or July.

Unidentified Analyst

Great, I appreciate the color there. Thanks.

Operator

The next question comes from the line of Gregory Fetchko, Private Investor. Please proceed.

Gregory Fetchko – Private Investor

I have no question.

Michael Fifer

Okay, thanks. Operator, another one?

Operator

Thank you. The next question comes from Dustin Henderson from Eagle Asset. Please proceed.

Dustin Henderson – Eagle Asset

Good morning and thanks for taking the time. Can you talk about how the distributors and retailers have the work with retailers in California have acted around the micro-stamping laws?

Michael Fifer

How they acted around it?

Dustin Henderson – Eagle Asset

Has it been rationale, has it been stockpiling just for that state, etcetera?

Michael Fifer

I am not sure I really understand the question. There hasn’t been a lot of behavior change there, other than they have had to stop ordering the products that are falling off the California roster and because there is a 10-day waiting period, they’ve got a time everything so that if practice coming off on March 1st, they have got a by the 18th of February is essentially the last day they can sell it, but it’s all very predictable to them, they see the days on the roster certainly we have communicated with them as other manufactures have communicated with them to make sure that everybody is aware of what’s coming off, when it’s coming off and they sell right through to the last day and then they can’t do anymore and so they could kind of plan their inventories around that.

Dustin Henderson – Eagle Asset

Thank you. That’s helpful.

Operator

Thank you. (Operator Instructions) Your next question comes from the line of Scott Hamann of KeyBanc Capital Markets. Please proceed.

Scott Hamann – KeyBanc Capital Markets

Thanks. I just have just two follow-ups. Mike, first in terms of promotions you see some of the inventory levels getting back to more normalized levels at retail and you see some manufacture promoting, some retailers promoting, can you kind of talk about how that the burden to share between the distributors to retailers and the manufacturers as we see some of these promotions start to come back?

Michael Fifer

Well, my answer would be frankly mostly speculation about what the other guys and what we have observed. And mostly I would say, their promotion expense falls on the manufacturers, because we see some manufacturers offering deals. They for example one of the competitors just put out a deal that if you buy by 19/11, you can get my – we’ll give you a free small single action revolver. And I doubt that one is going to get much traction, but in that case for example the manufacturer would carry the burden of that extra cost for the free good wouldn’t really have a huge impact on the distributor or the retailer.

Scott Hamann – KeyBanc Capital Markets

Okay. And then just secondly on gross margin, it seems with the sales versus the third quarter being higher in the fourth quarter and gross margin, I think gross margin kind of level off or was a little bit build the software and we had anticipated. How – I mean, is that a mix thing or is there something else may be just kind of walk through some of the moving pieces as to why gross margin might not be better with sales being little bit better?

Michael Fifer

Yes. I will answer couple of the factors that affected it, probably the single biggest was the reduction and accessory sales, which is primarily aftermarket magazine sales. In December 12, and through and really affective that fourth quarter, but to the next couple of quarters magazine sales were just tremendous, it were – we couldn’t meet demand and we sold lot of those magazines directly through our ShopRover.com outlet. So they were sold really at a very full margin. Later in the year, those sales fell off on the website and shifted to distribution and from there to brick-and-mortar retailers. And so the volume stayed up pretty good through the second half of the year, but the margins dropped off a bit, because we are selling through distribution rather than selling direct. And then by the end of the year, magazine sales had slowed particularly in comparison the year-over-year comps were very tough in Q4. And so I would say that, that was probably as much as $0.10, $0.12, $0.13 a share in Q4 over a consecutive quarterly from Q3 to Q4 of ‘13. And then another thing that happened is that we have the big strength promotions season January and February, but we have to accrue for whatever inventory the distributors hold at December 31. And in December 31, 2012, they had pretty much sold through their inventory and had very little inventory on December 31, but that wasn’t true. In fact, it was just the opposite, they were able to build up a pretty good inventory December 31 of 13. And so we had – so we took in accrue them for the inventory they had on hand to support the promotions that would occur in 14.

And so that was couple of million dollars of accrual expense that you didn’t see in the previous quarter. So, that was about $0.07 a share. Mayodan had more cost in Q4 than it did in Q3. So that was a couple of million dollars or $0.06 or $0.07 a share. We also took a write-down of our venture capital investment in (indiscernible). And so that was about $0.03 a share. I already mentioned that the depreciation change was a couple of cents a share. We had a little legal accrual for $0.02 or $0.03 a share. And all that adds up to in the neighborhood of about $0.30 a share, but the quarter was only off by $0.11 consecutive quarter. So, we also had some very good news offsetting that $0.30 a share. And they had increased volumes even though the margin was a little lower contributed $0.11 a share. And then we picked up about another $0.10 a share just through other good operation of the business. So you had some negatives that added up in the consecutive quarter comparison to the range of $0.30 to $0.33 a share and then you have some positives that were in the $0.20 a share with the net gain of $0.11 change.

Scott Hamann – KeyBanc Capital Markets

Okay, that’s very helpful. And then just one final question on the rifle category, I think it was up 50% of this year. Can you give us any color on how much of that was driven by MSRs?

Michael Fifer

I don’t really think I can. I just don’t have those numbers at my fingertips. Keep in mind, couple of things happened. We lumped together, all the rifles whether they are 10/22s mini 14s, MSRs, the new American Rimfire rifle that we just launched and we built up quite an inventory. So, we are able to ship quite a bit at launch. The Centerfire rifle which really hit its stride this year, last year was an introduction year. So, I can’t pick out MSRs for you, but keep in mind MSRs have never been a significant piece of our business. And so whatever their peak was in the first or second quarter to easing off of a bit in the later quarters, I doubt it was material and really noticeable in the financials.

Scott Hamann – KeyBanc Capital Markets

Okay, alright. Thanks Mike.

Operator

The next question comes from the line of Jonathan Weiss of G2 Investment Partners. Please proceed.

Noah Steinberg – G2 Investment Partners

Hi, this is Noah Steinberg calling for Jonathan. I had just a question on just looking at the units ordered and all the metrics you give around the units as well as the distributor metrics you give. So, the units sold from distributors and the units in distributor inventory are – sorry the units sold from distributors has been flattish year-over-year and units in distributor inventory is actually up year-over-year very nicely. And then units ordered are down significantly, but the units that you guys are producing and shipping are up nicely like they have been the last few quarters. Can you explain why that is?

Michael Fifer

Noah, I admit that I am confused by that question.

Noah Steinberg – G2 Investment Partners

So basically – I will simplify it, I will simplify it. It looks like the metrics related to the channel to orders and inventory are all signaling a slowdown, but the production and the shipping from the company looks like it’s like it’s just continuing as it has. Could you help me understand why that is?

Michael Fifer

Well, there is a couple of factors that play here. One is that the distributors really want to load up in Q4 so that they can fulfill all the promotional orders they get in January and February, that’s just a normal cyclicality in the business irrespective of what the overall market is doing. Generally they like to see an inventory build right before those promotions, so they can fill them as fast as they can. And then second off, you have coming off the year, where inventory turns were well north of 20%, 20 times for the distributors and you have lot of retailers that were just out of them inventory through much of the year. So, everybody is retracting, so absolutely nobody wanted to slow down at that point. So, if you think back to what I said about every two and a half weeks, we look to see exactly what sold through and we use that to try to more intelligently adapt our production schedule going forward. I think we will react to what selling through and you really don’t have to worry about the channel get stuffed.

Noah Steinberg – G2 Investment Partners

Thank you.

Operator

Thank you. Your next question comes from the line of Aaron Smith from CNN Money. Please proceed.

Aaron Smith – CNN Money

Hi Mr. Fifer, thanks for taking my call. Just I had a couple of questions for you. One of them basically about the workforce done in North Carolina with the new factory, I was wondering if you could tell me how many people worked there. And you mentioned something about expanding the workforce, so I was wondering if you had any specifics about the number of people you plan to hire? To just to kind of put things in perspective how does that compared to your overall workforce at the company?

Michael Fifer

Our overall workforce including regular employees and temps is in the neighborhood of 2,400 of which less than 100 are in Mayodan North Carolina.

Aaron Smith – CNN Money

Okay. And do you have any concrete plans to expand the workforce at the new factory?

Michael Fifer

As demand justifies it and as we move additional product lines in there, which mostly will be new products, but we may release some of the capacity constraints in Newport or in Prescott by moving an existing products. So, right now we are focused just on new products in there. So – I’d like all three factories to be about the same size. I’d like frankly to have a little bit smaller workforce in North Carolina and Arizona because I think it’s nothing to have people driving over an hour for basic entry level job. The – if you look at the workforce that the 1000 people in a factory you might have 800 terrific folks that – when you stretching that hard the last 100 people you hired might not be folks you’d hired if you hide a choice. And so if I can overtime get made enough, get enough products in there to take a little of the pressure off the other two plants will be better off for it.

Aaron Smith – CNN Money

So, is Newport basically your big factory for the first time?

Michael Fifer

This Newport is a little bit bigger than Arizona only because it has the foundry. But if you look at the fire arms factory in Newport and Arizona they’re about the same size and the same number of people.

Aaron Smith – CNN Money

Then about how many people are working at the other factories approximately?

Michael Fifer

I am doing this a little bit from memory, so I don’t assume that it’s terribly accurate, but perhaps you got a 1001 and 1300 at the other.

Aaron Smith – CNN Money

Alright, thanks for that. I will just keep bear in mind that’s an approximation. And then just one last question, you’d mentioned the new products being built at the factory in North Carolina. And in the financial statement you mentioned the sales attribute in part by five or six new guns, one of them being the SR-762 rifle, that being a sort of military style semiautomatic rifle, those types of rifles are really been in demand over the last couple of years. And I was just wondering if you could give us just a picture of just how many of those rifles you sold and how much of it impact the sort of military style semiautomatic rifle? How much of the impact that they have on your overall gun sales?

Michael Fifer

It has very little impact on our overall gun sale. We make a very high end, feature rich products and generally purchased by a really knowledgeable collector and user of those kind of gun. And it’s not bought by average everyday fan of those guns. The average customer will buy a gas impingement gun where these are piston operated guns and cost quite a bit more, up to $1,000 more than the gas impingement version. So, it’s really a niche business.

Aaron Smith – CNN Money

Okay, thanks Mr. Fifer. I appreciate it.

Operator

Thank you. Your next question comes from the line of Eugene Flynn from Aegis Capital. Please go ahead.

Eugene Flynn – Aegis Capital

Mike, Eugene Flynn speaking. The California microstamping how is that likely to affect your earnings and your company financially?

Michael Fifer

Well, we don’t actually know how many of our products are ending up in California, but we surveyed our distributors to try to get a best estimate of what happened in 2013. And the number they gave us which I will tell you. Don’t place too much assumption of accuracy on this because it’s an estimate. It was about 28,000 hand guns and if you assume an average sale price of about $300 each, help me with the math, but I think it’s about $9 million or $10 million. It’s under $10 million in sale.

Eugene Flynn – Aegis Capital

$8,400,000

Michael Fifer

There you go. Better assessment

Eugene Flynn – Aegis Capital

How will that affect your bottom line to raise things are?

Michael Fifer

I would say our contribution margin is probably 50% at least. And so that’s going to trend $5 million bucks right off the top.

Eugene Flynn – Aegis Capital

Okay. So, basically there was a very potential $5 million hit. Now the first quarter you’ve indicated was certainly be down compared to the first quarter of 2013. Where two thirds of way through the first quarter, is there – what is your feeling about that first quarter? How bad do you think it might be?

Michael Fifer

Let me correct something that you attributed to me. I haven’t actually said anything about how first quarter is going to be. I have said that the distributor shows were very encouraging that we got substantially more orders than we got in 2012, which was a – I’d call a real year with realistic orders. And so I am very encouraged by that, but other than that I haven’t said a damn thing about how Q1 is going to come out and I am not going to either.

Eugene Flynn – Aegis Capital

You say that first quarter of 2014 would be more less than first quarter of 2013, but greater than first quarter of 2012?

Michael Fifer

I certainly do not, so I said the orders booked by retailers to the wholesale distributors as the distributor shows where in fact those orders were greater than the orders they placed in 2012 and less than the orders they placed in 2013. Keep in mind I’m talking about orders that retailers placed against wholesalers, which has nothing to do with at this point. It has nothing to do with sale through or production rates or earnings or anything else.

Eugene Flynn – Aegis Capital

I respectfully apologize if I misunderstanding on that point. Now on the question of gun buyers is that a market that is expanding into the female market or younger people beginning to participate more in it. Do you see the profile of the gun buyer changing at all?

Michael Fifer

Yes. When looked at over five to seven year window it’s changed significantly. First half it’s far more socially acceptable than it was even five years ago, I mean people in New England admit to their friends they like guns we have never done that five or six years ago. And the number of women buyers is up significantly and we are really encouraged by that because some portion of them will buy more than one gun. Mostly they are motivated by that first gun because they’re taking personal responsibility for their self-defense, but a certain portion of them will conclude that hey shooting is really a lot of fun, I like this. And they realize that one side doesn’t fit all needs in the fire arms and they go out and buy another one and then another one. And so I think whatever the new normal will be in the industry it will be definitely higher than the normal was five years ago. The younger demographic is lot more female representation and frankly we are thrilled and delighted by that.

Eugene Flynn – Aegis Capital

Okay. This is just a little bit off the wall perhaps. Is foreign business to factor either from competing imports or in terms of exports, a factor?

Michael Fifer

Export is largely not a factor because essentially the world market for legal civilian gun, particularly hand gun is the United States. However, imports are a huge factor and it stuns me that our congressional leaders allow imports from countries that don’t allow us to send similar products to them. Why the heck would we allow imports from Brazil or Austria when those countries don’t allow us to export firearms to their countries. You think these guys care about American jobs, but it makes me wonder.

Eugene Flynn – Aegis Capital

But is this a significant factor as you see it cutting? Do you see it significantly affecting your earnings in the growing – in the future?

Michael Fifer

I don’t know that will affect it any more than the future than it has in the past few years. But I would say the imports have a healthy portion of the U.S. market, but they have all along, they didn’t suddenly gain any more market share or they lost any market share really.

Eugene Flynn – Aegis Capital

Right now, the last question, do you see after four solid years of growth, earnings, revenues and the gun market in general, do you see that coming to an end, I know you can’t forecast the future, but as you….

Michael Fifer

Let me put a little bit of look back for you. And there actually haven’t been four years of solid growth, because you had this growth from November ‘08 until about June ‘09. And then that surge subsided and there was a significant slowdown in the second half of ‘09 and through pretty must most of ‘10. And then in ‘11 it rebounded handsomely, although even in ‘11, it rebounded retailers much sooner than it rebounded at the manufacturers, because many of those guns that were purchased during the surge were still new in box as consumers realized they sort of bought more than they were comfortable with and they took a few back to convert them to cash and the retailers sell those, because they can sell a new in box used gun at a higher margin then they can sell a new gun they just purchased from a manufacturer.

So, let me recap that from when Mr. Obama was elected through summer of ‘09 you had a huge surge, then it really fell off at all levels of the channel for the next two to three quarters. That has started to rebound in somewhere in ‘10 at the retail and then really ‘11 was when the manufacturer started to pick up again. So, we have been through a cycle already and in particular a cycle that had huge political motivation, fear of losing gun rights motivation. That parallels very much what we experienced in early ‘13. And so you can rub the crystal ball as well as I can and you could hypothesize that a similar pattern could emerge sort of post surge pattern could emerge this time, which case you could suspect that things might slow down a bit for a year and then they will pick right up again, because the remember the base of firearms consumers is much larger than it was five, six years ago.

Eugene Flynn – Aegis Capital

Alright, thank you very much.

Operator

Thank you. The next question comes from the line of Brian Ruttenbur of CRT. Please go ahead.

Brian Ruttenbur – CRT

Yes, thank you very much. Last question, just on the cost in the new factory, should margins be stronger coming out of this factory as you ramp then your other factories. What I am trying to understand is your cost factors lower in the south versus your existing factors and how things are set up possibly more efficiently?

Michael Fifer

Two parts to the answer. The incremental costs, for example, utilities are lower or an incremental basis. But the overhead its per unit is much, much higher because until we get some critical mass down there and level up products going through it. We got a certain minimum amount of overhead being spread over very few units and so right now. The comfortable unit coming out of Newport in Hampshire and out of Mayodan, North Carolina, the one in Newport has got a much higher margin, but over time that will correct itself as we get the volume up in Mayodan.

Brian Ruttenbur – CRT

Okay, thank you very much.

Operator

Thank you. I would now like to turn the call over to Michael Fifer for closing remarks.

Michael Fifer

Thank you, operator. 2014 will be an interesting year. As we have seen during previous periods a volatile demand such as the cycle from 2009 through 2011, the overall market dynamics can make continuous growth every year, it’s difficult to achieve. Our results have demonstrated however that our strategy of driving demand to innovation and continuously improving our operations through lean business practices has positioned us to provide favorable returns for our shareholders over the long-term.

In closing, I would like to thank you for your continued interest in Ruger. And I’d like to thank our 2,400 wonderful folks on the Ruger team. Without whom, our accomplishments and the unprecedented financial results in 2013 would not have been possible. I look forward to seeing many of you at our 2014 Annual Meeting on Tuesday, May 6 in Trumbull, Connecticut. Thank you.

Operator

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Sturm, Ruger & Company's CEO Discusses Q4 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts