gun sales

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23 Skidoo

May 7, 2012 by 2 Comments

23 Skidoo was a slang expression from the Roaring ’20s. It could just as easily be applied to the latest NSSF-adjusted NICS figures for April 2012 which represent the 23rd straight month in which they have increased when compared to the previous year.

The April 2012 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 931,658 is an increase of 10.5 percent over the NSSF-adjusted NICS figure of 843,484 in April 2011. For comparison, the unadjusted April 2012 NICS figure of 1,416,074 reflects a 5.7 percent increase from the unadjusted NICS figure of 1,339,673 in April 2011.

To see the year over year data graphically for the last 12 months, go here. You can also see how April 2012 compares to the previous 12 years by going here.

It should be remembered that NICS checks are used in some states such as Kentucky, Iowa, and Michigan for CCW background checks on new and existing permit holders. Nonetheless, while NICS checks are not a direct correlation to firearm sales, they certainly do illustrate the growth trend in those sales because of their use for purchases background checks at the point-of-purchase.

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Ruger Has Stellar Quarter

May 2, 2012 by

The gun prohibitionists are desperate to promote the meme that the growth in NICS checks do not accurately reflect the growth in firearm sales. Unfortunately, they just cannot ignore financial statement releases from public companies such as Sturm, Ruger & Co. Financial statement releases from public companies are not only released to the public but filed with the Securities and Exchange Commission. They must be accurate unlike any statement made by the likes of CSGV and other gun prohibitionists.

Yesterday, after the close of the stock market, Ruger released its first quarter results and they were impressive. Their net earnings per share – profit – nearly doubled as compared to the same quarter in 2011. Moreover, they have orders in hand for 1.2 million firearms which exceed the number shipped in 2011.

The highlights of the results as pointed out by Ruger CEO Michael Fifer:

  • Our earnings nearly doubled from the first quarter of 2011, driven by the 49% growth in sales and our ongoing focus on continuous improvement in our operations.
  • New product introductions were a significant component of our sales growth as new product sales represented $40.8 million or 37% of sales in the first quarter of 2012. New product introductions in the first quarter of 2012 included:
    • Ruger American Rifle
    • SR22 pistol
    • 10/22 Take Down rifle
  • The estimated sell-through of our products from independent distributors to retailers in 2012 increased 62% from the first quarter of 2011. During this period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 23%.
  • On March 21, 2012, the Company announced that it temporarily suspended the acceptance of new orders. In the first quarter of 2012, orders for 1.2 million units were received by the Company, which exceeded the total units shipped during 2011. The Company anticipates resuming the acceptance of orders at the end of May 2012.
  • Cash generated from operations during the first quarter of 2012 was $21.8 million. At March 31, 2012, our cash, cash equivalents, and short-term investments totaled $95.8 million, an increase of $14.7 million from December 2011. Our current ratio is 3.1 to 1 and we have no debt.
  • In the first quarter of 2012, capital expenditures totaled $3.0 million. We expect to invest approximately $20 million for capital expenditures during 2012.
  • At March 31, 2012, stockholders’ equity was $149.8 million, which equates to a book value of $7.82 per share, of which $5.01 per share was cash and equivalents.
  • On March 31, 2012, the Company completed the fourth and final quarter of its “1.2 Million Gun Challenge to Benefit the NRA.” During this year-long challenge, Ruger donated a total of $1,253,700 to the NRA. We believe that Ruger is the first firearms manufacturer to build and ship more than one million firearms in one year.

The financial tables that accompanied this release can be found here.

I am not an accountant but I generally can understand balance sheets, income statements, and statements of cash flows. Just looking at a few key items you see that their cash from operations increased by over $1 million dollars as compared to the same quarter in 2011, their net inventories are down, and their allowance for obsolete or slow moving inventory fell by almost 60%. The last two items tell me that not only are firearms flying out the door but Ruger is making mostly what people want.

If you have the time and the inclination, you can listen in on Ruger’s Annual Meeting which is today and starts at 9am. I’m sure you will hear lots of cheers from shareholders. If I could have been in New Hampshire today, I would have been one of those cheering the loudest as the stock is trading near its all time high and the quarterly dividend just tripled.

For instructions on how to view or listen to the annual meeting, go here.

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22 Months And Counting

April 3, 2012 by 1 Comment

This is getting to be something of a broken record – not that I’m complaining. March 2012 marks the 22nd straight month in which the NSSF-adjusted NICS checks (National Instant Criminal Background Check System) has increased when compared to the same period last year.

From the NSSF:

The March 2012 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 1,189,152 is an increase of 20.0 percent over the NSSF-adjusted NICS figure of 990,840 in March 2011. For comparison, the unadjusted March 2012 NICS figure of 1,715,125 reflects a 19.3 percent increase from the unadjusted NICS figure of 1,437,709 in March 2011.

While NICS checks are not a direct correlation with firearm sales, they do give a good indication of the state of the firearms market. NICS checks are used by some states such as Kentucky, Iowa, and Michigan to conduct their concealed carry permit application checks. Moreover, in states such as North Carolina where a Concealed Handgun Permit is a substitute for the NICS check for the purchase of a firearm, you have some underreporting.

March 2012 was the highest month in the last decade with 1.2 million NSSF-adjusted NICS checks. It eclipsed even the then record number checks for March 2009 and March 2011.

The possibility of Obama’s reelection is one factor frequently cited as the motivation behind the increased sales of firearms. While this certainly is a major factor, the increase in the number of women taking responsibility for their own protection as well as the growth in concealed carry has to factor in as well.

With this 22nd continuous increase from prior year periods, I think there is little doubt that we will see that the April and May numbers will mark the 23rd and 24th consecutive months of increases. Josh Horwitz of the Coalition to Stop Gun Violence (sic) can rant and rave all he wants that these figures are meaningless in terms of gun sales and new gun owners. The tide has turned and it is sweeping over him and his hoodie-wearing wannabe staffers just like the tsunami swept over northern Japan.

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When Editorials Read Like A MAIG Press Release

March 24, 2012 by 4 Comments

The Stamford Advocate ran an editorial yesterday that could have been a press release from Mayor Bloomberg’s Illegal Mayors. For all I know, it was.

The editorial entitled “More guns arrive and the bullets fly” seems to be in response to the news that firearms manufacturers lead by Connecticut’s Sturm, Ruger were having record sales.

It is the incredibly permissive gun laws in this country that allow millions of new guns to be purchased in the United States each year. And it is the incredibly permissive gun laws in this country that abet the illegal flow of many of those guns into American cities that do not want them, that are trying to keep them out.

While they acknowledge the Second Amendment exists, they still cling to the collective-right interpretation despite the Supreme Court’s rulings in D.C. v. Heller and McDonald v. Chicago which affirmed that the Second Amendment protects an individual right.

In the years since that was passed, courts have made many precedent-setting decisions that have expanded gun rights. But how did “A well regulated militia” come to mean “everyone can build a private arsenal big enough to invade a mid-sized nation”?

They then move on to suggest that there should be restrictions on how many firearms a person should be allowed to own. Of course, they call it coming to “our senses” and “reasonable limits” which they never define. This, they say, would prevent criminals and street gangs from obtaining weapons with which to kill cops and kids or something like that.

They conclude their press release editorial by stating:

It is the legal gun trade that supplies the illegal gun trade. Until we place some sensible limits on the first, ones in keeping with the spirit of a “well regulated militia,” we will never begin to get a handle on the second. And law-abiding citizens’ best defense against bullets flying into their homes and into their bodies will continue to be sheer luck.

Of course this is a ludicrous claim and one for which the editorial board of the Stamford Advocate should be ashamed. However, in the rarefied and elite world of Stamford, shame is an antiquated concept suitable only for the little people.

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The Stock Market Is Down Today

March 22, 2012 by 2 Comments

The headline from the Wall Street Journal at midday is “U.S. Stocks on Track for Third Decline.”

U.S. stocks fell after weak economic signals from the euro zone and China raised fresh concerns about slowing global growth.

After rising to multi-year highs in recent days, major benchmarks extended their retreat into a third session on Thursday. The Dow Jones Industrial Average declined 65 points, or 0.5%, to 13060 in midday trade.

Standard & Poor’s 500-stock index shed 9.4 points, or 0.7%, to 1393. FedEx FDX -4.29%was among the biggest decliners, after delivering a disappointing earnings outlook and cutting its economic growth forecast. The Nasdaq Composite slid 13 points, or 0.4%, to 3062.

However, you would never know that the stock market was down if you were following firearms manufacturers Ruger and Smith & Wesson.

From Active-Investor.com on Ruger today:

Sturm, Ruger & Company, Inc. (NYSE:RGR) is up 8% today at $45.68. RGR has traded 428 thousand shares this morning, about double its average volume. RGR shares are up this morning after the company announced it was not taking any new orders at this time due to overwhelming demand. The company added that it will begin taking new orders again sometime in May. The company has a market cap of 873.65 million.

And this on Smith and Wesson Holding Corporation from Active- Investor.com under the headline “Market Down Despite Jobless Claims at Four-Year Low, NASDAQ Stocks to Watch”:

Smith & Wesson Holding Corporation (NASDAQ:SWHC) is up 10.85% this morning at $7.65. SWHC is up on heavy volume today with 2 million shares traded so far, well above its daily average of 931 thousand shares. Smith & Wesson shares are rallying alongside its rivals today after Sturm, Ruger & Co. announced it has stopped taking new orders due to overwhelming demand. The company has a market cap of 503.52 million.

Investors seem to be pushing up RGR and SWHC while ignoring CSGV and VPC. Go figure.

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More Confirmation Of The Vitality Of The Firearms Industry

March 22, 2012 by

Sturm, Ruger announced today that they were suspending the acceptance of new orders because they had already had orders for the first quarter of over 1 million units. If one needed more confirmation that gun sales are strong and that gun ownership is expanding, this is it. While there is no breakdown of the orders, sales of Ruger’s pistols for the concealed carry market such as the LCP, LCR, and LC-9 have been strong. As Michael Bane has noted many times, these pistols are very popular with Gun Culture v. 2.0 who want a pistol for personal protection.

Sturm, Ruger & Company, Inc. Reports Strong First Quarter Bookings

March 21, 2012

Sturm, Ruger & Company, Inc. (NYSE: RGR), announced today that for the first quarter 2012, the Company has received orders for more than one million units. Therefore, the Company has temporarily suspended the acceptance of new orders.

Chief Executive Officer Michael O. Fifer made the following comments:

The Company’s Retailer Programs that were offered from January 1, 2012 through February 29, 2012 were very successful and generated significant orders from retailers to independent wholesale distributors for Ruger firearms.

* Year-to-date, the independent wholesale distributors placed orders with the Company for more than one million Ruger firearms.

*Despite the Company’s continuing successful efforts to increase production rates, the incoming order rate exceeds our capacity to rapidly fulfill these orders. Consequently, the Company has temporarily suspended the acceptance of new orders.

*The Company expects to resume the normal acceptance of orders by the end of May 2012.

The Company will announce its results and file its Quarterly Report on Form 10-Q for the first quarter of 2012 on Tuesday, May 1, 2012, after the close of the stock market.

I know it borders on rudeness to keep poking the gun prohibitionists in the eye with the truth but I hope Josh Horwitz chokes on this press release.

(In the interest of full disclosure, I am a very happy shareholder in Sturm, Ruger and Company)

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So Riddle Me This, Josh Horwitz

March 21, 2012 by 2 Comments

Josh Horwitz, the head of the Coalition to Stop Gun Violence (sic), is on this campaign to have you believe that, despite all the evidence to the contrary, gun ownership is declining.

The gun lobby is desperate to perpetuate its image as The Lobby That Cannot Be Crossed by Politicians in the face of a very harsh reality: Declining gun ownership in the United States.

As The Riddler used to say in the old Batman shows, “So riddle me this”. I think we can all agree that the economy is in recession. Moreover, small businesses are closing right and left due to the poor economy. So given that, why have the number of Federal Firearms Licensees been on the increase since January 2010?

According to data from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the number of 01 FFLs – dealers in firearms – has increased from 47,411 in January 2010 to 48,987 in February 2012. This is an increase of 1,576 dealers or a 3.3% increase during that time period. The days of the kitchen table FFL are, for the most part, long over due to the Clinton Administration. Thus, this means that 1,576 people thought the growth in the market for firearms was strong enough to invest their time and money into a storefront business.

You can see this in graphic form below.

So riddle me this Mr. Horwitz, if as you claim the number of gun owners is declining and that the new sales are only going to existing gun owners, why would anyone in their right mind open a new gun shop in a bad economy? The answer is that they wouldn’t. So either those 1,576 people getting new dealer licenses are delusional pawns of the gun industry or you are deliberately trying to minimize the real growth in the number of gun owners to mask the ineffectiveness of your arguments.

I vote for the latter.

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Rise In Gun Sales And Obama’s Re-election Chances

March 7, 2012 by 2 Comments

Without running the numbers, I don’t have statistical evidence that Obama’s increased chances of re-election are correlated with the rise in firearm sales. However, there is increasing anecdotal evidence to suggest that is the case. Not only are NSSF-adjusted NICS checks significantly higher for February 2012 versus February 2008 but local TV stations are starting to notice the trend. Case in point is this report from KCEN which covers Killeen, Temple, and Waco, Texas.

From the KCEN story:

“They’re my freedom,” says Charles Smith, a gun enthusiast who knows a thing or two about guns. “We take a lot of people who have never shot to our gun range and they’re hooked,” says Smith.

Charles like many other gun owners, are weary of any laws that would restrict their pass time. And many who believe President Obama will be re-elected are not taking any chances. Buying up ammo and guns before it’s too late.

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21 Months And Counting

March 7, 2012 by

The National Instant Criminal Background Check System, or NICS, has released its statistics for the month of February. We are now at 21 months and counting of year over year increases in monthly NICS checks adjusted for CCW checks.

From the NSSF:

The February 2012 NSSF-adjusted National Instant Criminal Background Check System (NICS) figure of 1,266,344 is an increase of 31.4 percent over the NSSF-adjusted NICS figure of 963,746 in February 2011. For comparison, the unadjusted February 2012 NICS figure of 1,734,646 reflects a 18.6 percent increase from the unadjusted NICS figure of 1,463,138 in February 2011.

It is important to remember that this isn’t a direct correlation to firearm sales as NICS checks are used for other purposes such as the background check in some states for a concealed carry permit. That said, the NSSF has adjusted these numbers for those checks. These adjusted numbers do represent a reliable indicator of monthly firearm sales of both new and used firearms despite the denials of gun prohibitionist Josh Horwitz.

What I found particularly interesting in February’s numbers was the incredible increase for February 2012 over February 2008. Both are election year months with the primaries well under way. Looking back to February 2008, it was still neck and neck in both the Democratic and Republican primaries. More importantly, the economy had not started into recession yet and the major banks had not imploded. In other words, consumers were still relatively optimistic and had more money available to buy things like guns and ammo.

Fast forward to today and the unemployment rate is hovering at 9% more or less. The economy is still stumbling. Yet, the adjusted NICS check figure is approximately 500,000 more for 2012 than for 2008. If I had to answer why, my guess is that it has to do with politics. Specifically with the bitter Republican primaries between a bunch of weak candidates that excite very few, the chances of Obama being reelected have increased to at least 50-50. I think this rightly scares gun owners and potential gun owners as there is no telling what an Obama Administration could do in a second term regarding gun rights without having the constraints of reelection. Frankly that is a very sobering thought.

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The Ranks Of Gun Owners Swelled On Black Friday In Illinois

December 3, 2011 by 2 Comments

While Illinois may be the only state that does not have some form of concealed carry, it was not left out of the rise in sales of firearms on Black Friday. According to WLS-TV in Chicago, the Illinois State Police reported a 42% increase in the number of applications for Firearms Owner ID (FOID) cards on Black Friday compared to last year. Almost 2,900 new applications were received for FOID cards this year. Bear in mind that these are NEW (would-be) gun owners because once you have a FOID card it covers all your guns and is good for 10 years.

However, and I think the reporter for WLS-TV doesn’t quite get Illinois firearms law, an application for a FOID card is not approved immediately. The State Police have up to 30 days to approve it and return it to you. Until you have a valid FOID card in hand, you can’t buy a firearm, ammunition, or a Taser.

This is from an email this evening from Thirdpower of Days of Our Trailers blog:

You can apply for your FOID through most FFL’s if they’re smart. It normally takes 3-4 weeks to get it through the ISP so while you could ‘purchase’ your firearm by perhaps putting down a down payment, you cannot actually fill out the 4473/NICS check until you have the FOID in your possession. Then there’s a 24hr waiting period for long guns and 72 hour for handguns.

We will have to wait until the NICS stats are out to get a better idea of just how much actual gun sales rose in Illinois during this period. Nonetheless, this many applications for FOID cards means another 2,900 gun owners are added to the rolls of gunowners in the Land of Lincoln. And THAT is a good thing.

Note: A big thanks to Kurt Hofmann, the St. Louis Gun Rights Examiner, and Thirdpower for answering my questions so quickly about Illinois gun law and FOID cards. I really appreciate their help!

Thirdpower put together this primer on Illinois gun laws a couple of years ago. It is a good starting place.