Q3 2020 Sturm Ruger & Company Inc Earnings Call
Need to press Star one on your telephone as a reminder, todays program is being recorded I would now like to introduce your host for today's program, Chris Killoy Chief Executive Officer. Please go ahead Sir.
Good morning, and welcome to the Sturm Ruger and company third quarter 2020 conference call before we get started I would like to ask Kevin Reid, Our general counsel to read the caution on forward looking statements Kevin.
Thanks, Chris we want to remind everyone that statements made in the course of this meeting that state the companys or managements intentions hopes beliefs expectations or predictions of the future are forward looking statements. Its important to note that the companys 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 forward looking statements is contained from time to time in the company's SEC filings, including but not limited to the Companys reports on form 10-K for the year ended December 31st we 19 and of course on the form 10-Q for the third quarter Twentytwenty, which we filed last night copy these documents maybe.
Obtained by contacting the company or the FCC on the company website at Ruby Dot Com for Slash corporate of course, the FCC website at SCC Dot Gov. We do reference non-GAAP EBITDA. Please note that a reconciliation of GAAP net income to non-GAAP EBITDA can be found in our form 10-K for the year ended December 31st we 19 and again.
Our form 10-Q for third quarter Twentytwenty, both of which are posted on our website. Furthermore, the company disclaims all responsibility to update forward looking statements Chris.
Thank you Kevin.
Before we discuss our third quarter results I want to provide an update on the impact that the corona virus pandemic or COVID-19 has had on ruger.
COVID-19 pandemic continues to cast uncertainty throughout the global economy never.
Nevertheless, any adverse financial impact on our business, resulting from Carbonite team was negligible in the third quarter of 2020.
Since its onset in March we have remained proactive in maintaining the health and safety of our employees and mitigating its impact on our business by providing all hourly employees with an additional two weeks of paid time off.
Encouraging employees to continue to work remotely wherever possible.
Maintaining social distancing throughout each manufacturing facility, including every manufacturing cell.
Confidentially communicating with and assisting employees with potential health issues do our dedicated facility nurses restricting visit or access to minimize the introduction of new people to the factory environment.
Implementing additional cleaning <unk> sanitizing, and other health and safety processes to maintain a clean and safe workplace.
And manufacturing donating personal protective equipment to local hospitals health care facilities, and police and fire departments in our local communities.
The cost of these actions are expected to total approximately $3.5 billion in 2020.
Of which approximately $2.4 million has already been recognized we.
We have also realized some expense reductions and deferrals in certain areas of our business, including conference and Tradeshow participation costs travel expenditures expenditures sponsorships and advertising music.
These expense reductions and deferrals, which approximate $2.2 million largely offset the incremental COVID-19 costs.
We suspended hiring from the onset of Cold 19 in March until June one we resumed hiring at a modest rate to ensure the health and safety of everyone involved.
This action may have hampered our ability to ramp up production, but the long term benefits of maintaining a healthy workforce and clean facilities far outweigh any short term adverse impact on our operations.
It was the right thing to do and we will continue to keep the health and safety of the Ruger team as our Paramount priority.
And I'm happy to report that despite the self imposed limits on the size of our current workforce the hard work and commitment of our dedicated employees allowed us to increase production, 15% from the prior quarter and 50% from the third quarter of 2019.
The future impact of COVID-19 remains unknown.
We have been fortunate to have only limited restrictions on our operations, thus far our financial strength evidenced by our debt free balance sheet provides financial security and flexibility as we continue to manage through this crisis and focused on our long term goals and creation of shareholder value.
Now I'd like to ask Tom Dineen, our Chief Financial Officer to give an overview of the third quarter financial results and then I will discuss the current market and update you on our operations and the recent approval of our offer to purchase Marlins firearms assets, then we'll get to your questions.
Uh huh.
Thanks, Chris.
For the third quarter of 2029.
Net sales were $145.7 million.
And diluted earnings were one dollar and 39 cents per share.
For the comparable prior year period net.
Net sales were $95 million and diluted earnings were 27 cents per share.
For the first nine months of 2020.
Net sales were $399.6 million.
Diluted earnings were $3.31 per share.
November 27th 2020.
As a reminder, our quarterly dividend is approximately 40% of net income and therefore varies quarter to quarter.
That's the financial update for the third quarter Chris.
Thanks, Tom demand.
Consumer demand, which began to surge in the latter stages of the first quarter continued to intensify in the third quarter.
The estimated unit fell through a ruger products from the independent distributors to retailers increased 50% in the first nine months of 2020 compared to the prior year period.
For the same period, the national instant criminal background check system background checks as adjusted by the National shooting Sports Foundation, commonly referred to as adjusted Nicks increased to 68%.
Staggering increases are attributable to increase consumer demand for firearms and have likely been constrained due to limited available inventory in the distribution channel.
The surge in consumer demand likely continues to be driven by the call by some for the reduction in funding and authority of law enforcement organizations.
Protest demonstrations and civil unrest in many cities throughout the United States.
And concerns about personal protection and home defense stemming from the continuing COVID-19 pandemic.
In August right in the middle of our third quarter, the National shooting Sports Foundation, our industry Trade Association released an updated report that concluded that nearly 12.5 million Americans had purchased firearms this year alone.
With that the survey showed that 40% of those purchases whereby first time gun owners.
Think about that approximately 5 million Americans entered the fire of market for the first time in 2020.
That is a tremendous opportunity for growth in our industry.
Additionally, female consumers represented almost 40% of those new gun buyers.
We are also seeing increases in Hunter education hunting license sales and participation in programs like the Nsf's field to Fork program.
So we are excited for the future.
And certainly increased participation in firearms ownership make might've come about due to the pandemic or civil unrest.
But what we're starting to see now is a stickiness amongst new and established consumers who are enjoying all aspects of our industry from personal defence to hunting to plinking in competitive shooting.
We believe that the future is bright.
New products.
<unk>, a new products represented $88 million or 24% of our firearms sales in the first nine months of 2020.
New product sales include only major new products that were introduced in the past two years, which include the extremely popular Ruger five seven pistol, which was recently awarded the 2020 caliber award for best overall, new product by the professional outdoor media Association in conjunction with the Naf's GW.
The LCP, two and 22 long rifle, which is based on the Venerable LCP and LCP two platforms, Utah.
Utilized or light rack system, allowing for easier slide manipulation for those with weak enhanced strength and providing a lower recoiled platform for comfortable training are shooting at the range.
The wrangler revolver, our latest take on a classic single actual revolver, which is taken off even more than we could have hoped and also provides a fun way to enjoy a day of the range or introduce new shooters to the sport.
Lastly are are too pistol configurations based on existing firearms, the PC charger and the 556 pistol. These.
These products both represented response to market demand for this new style pistol.
We're very excited about the reception of these new platforms. Even in this current market the consumer and media reception for these lines is impressive and keeps us excited for the future.
As a reminder, derivatives and product line extensions of mature product families are not included in our new product sales calculation, but they provide a great value to our distributors retailers and are loyal rural customers.
With a ferocious pace of business in the third quarter, we intentionally focused on high demand core product lines, and therefore, only launched for new models seven new distributor exclusives.
This brings our total number of unique firearms offerings to over over 900 different models, which is still very impressed.
Please note or engineering teams have not taken her foot off the gas pedal in 2020.
We are developing exciting new products and I've taken the opportunity to queue up a variety of new platforms products and models heading into 2021, I look forward to providing updates when we get closer to launching these innovative new firearms.
Production in inventory.
The incredible surge in demand again outstripped our production capacity during the third quarter.
As a result, the combined inventories in our warehouses and at our distributors decreased 27000 units.
To put this in some context. This combined inventory is down over 300000 units compared to the end of third quarter last year.
Although we do not have comprehensive inventory data available at the retail level. The information available suggest that the retailer inventory of Ruger as well as most other fire of brands remains largely depleted.
I mentioned earlier that we had suspended hiring from March until June and had limited the right in which we were bringing new folks on board. Despite these limitations I am happy to report that are higher efforts have allowed our current head count to increase by over 140 employees since the end of the second quarter, allowing us to increase production and all facilities to better help me.
A man.
Capital expenditures.
Capital expenditures in the first nine months of the year, where $8 million. The lion's share of these investments relate to new product development and targeted capacity expansions for some of our product families in the greatest demand.
Now I'll talk about Marlon.
As many of Europe are likely aware or offer to purchase some of the Marlins assets in conjunction with a Remington outdoors company bankruptcy proceeding was accepted by Remington and approved by the banks of the court in late September.
We're very excited to broaden our catalog of rugged and reliable products with the additional Marlon firearms and the loyal Marlon customers excited too we've been bombarded with opening overwhelmingly positive emails and phone calls since the announcement of our pending purchase reinforcing our assertion. The Marlin lineup is an excellent fit for ruder.
We anticipate closing on this purchase in the fourth quarter of 2020, and then we will focus on getting the Marlin lines up and running in our existing facilities.
We look forward to reintroducing shooters to Marlin rifles in the second half of 2021.
Operator, maybe we have a first question.
Ladies and gentlemen, once again, if you have a question at this time. Please press Star then one our first question comes from the line, Brian Hamilton from Morgan Dempsey. Your question. Please.
Congrats on the quarter.
Thank you.
You are most welcome could you could you walk us through the cadence of the quarter kind of what what July look like compared to June and so on.
Well.
That's great Okay.
As you know, we typically don't disclose.
Monthly sales data and such but frankly the level of demand we saw throughout the quarter stay constant we did not see it necessarily.
Accelerating or decelerating, we saw it constant.
Right from the beginning of July right through September.
Excellent.
We've talked a lot about safely bringing on.
New bodies head count to help on the manufacturing side are there any other constraints that you're seeing two two increasing production maybe.
Maybe touch on commodities at all commodity prices.
Good question, we haven't really seen any impact neck.
Negatively in the way of commodity pricing or availability.
We've had some limited interruptions.
From some of our suppliers, who may have had cut.
Covid related shut.
Shut downs or temporary constraints within their facilities, but other than that we haven't seen any anything in the way of either commodities our suppliers.
Negatively impacting our production.
Great and as far as head Count goes roughly where are you at right now.
We're I think.
Last I checked somewhere north of 1700 employee somewhere between.
On or about 1700 50 folks.
Great and what are what are the courage shifts looking were looking like.
You don't have to walk me through each plant just just give me a rough estimate as far as how things look shift count and whatnot.
Well I mean in a course in a modern factory, it's not always as clean as first second or third shift we've got in some cases.
As many as five different shifts for a given product line when we take into account weekend time and things like that so depending on the product depending on the demand and how we can best accommodate the schedules in the factory and with our with our associates.
We'll break those shifts up typically all three of our major forest factories a running.
Obviously full first shift.
Second shift and then some staggered shifts depending on what we can do on the weekends and.
<unk> to be flexible in terms of additional capacity.
Alright.
You kind of just touched on the Marlin purchase at the end of your remarks there.
Did I hear you correctly as far as your plan is to bring over all of their manufacturing into your current facilities.
Yes.
The Marlin product line.
Was split between the alien New York facility, Huntsville, Alabama facility and their Woodchop in Lexington, Missouri.
We're in the process of coordinating that move to move all the equipment fixtures tools gauges et cetera into existing facilities.
One more forgiving I'll hop back on as far as maybe we can touch on that just a little bit more.
What kind of capacity, where they out and do you think that this will add additional capacity obviously the new.
Adding Marlon mine will add capacity, but is there a potential to add capacity to your current production using marlon tooling and whatnot.
Yeah that that's obviously the the plan I mean, we've got a full slate of equipment everything from.
[noise] CNC machines, and as I mentioned fixtures tools gauges et cetera, as well as the intellectual property engineering drawing.
And while we still haven't close the transaction yet we're very excited that this.
This will be incremental volume two to our overall business and the the important thing to consumers is that we plan to bring back Marlin to it's former glory and continue to deliver some great great products to our customer base.
Have you I know you can't touch probably a whole lot of US have you been seeing a lot of inefficiencies just in there in the.
The way that they had been running businesses or the business, where do you think you can add a lot of value.
Well I'm, not really able to comment on on.
How it was done on the under the prior regime of course as they get closer to bankruptcy, they're constrained I'm sure bye.
Limited ability limited capacity to produce so.
Obviously, given our capital structure, we're looking forward to a new day for.
Four four marlin in the Ruger facilities.
I could agree more I think it's a it's a great move and I think you guys are in a lot of value I'll hop back in line. Thank you. Thank you.
Thank you. Our next question comes from the line of March Smith from Lake Street Capital. Your question. Please.
First off for me can you talk a little bit about.
P. How much of that was was mix versus price increases.
In the in the third quarter, none of it was related to price increases that was all product mix.
Mark is where that came from and just as things move around you've got Ruger product line of course, you've got <unk>.
Products such as the.
Wrangler revolver at a.
Kind of a value priced entry entry level price point, all the way up to some other guns that are much much higher prices depending on the both the order book when we look at ASP for orders and we look at the shipments it moves around quite a bit.
And are there plans on taking price increases that you can talk about we.
We did take a small price increase.
Effective the beginning of November.
So most of that will be reflected in the in.
In the fourth quarter.
Okay.
And then Ah gross profit margin, obviously fantastic during the quarter can can you just speak to sustainability of of of gross profit margins and anything that you can give us on kind of your your outlook.
Yeah.
Well as you know, we don't comment make a forward looking.
Projections and things of that nature. However, as we as we increased volume with any of our factories are efficiencies increase and the other thing we're seeing is the in this environment.
We're we're seeing continued sustained demand the the level of promotional activity is significantly scaled back. So in addition to saving money on things like certain tradeshows and travel we've.
We've got the.
Ah much decreased need to a discount or promote the products and that's obviously has a positive effect on margins.
Sure.
And then.
I know that you don't comment on on cadence on kind of demanded sales during the quarter. We can just talk about the production.
Increases during the quarter and kind of the cadence of that and maybe.
Attention for continued increases in capacity.
Well the biggest thing is we said we started our hiring efforts turn them back on in June and with that we've had a steady increase in our head count at at all of our facilities.
Trying to bring the bring folks on safely.
Get them get those new new employees up to speed on the shop floor and get them productive and that increased throughout the third quarter and I would expect that effort to continue as we go forward.
Right now are.
HR and operations folks are doing a great job, bringing new people on in a safe fashion and trying to increase production, where it makes sense.
Perfect and then just two questions on on Marlin as much as you can talk about that did you guys talked about Capex I think being maybe roughly 20 million for the full year.
If you could confirm that and then how much of that if any is is marlon kind of acquisition some of that tooling and equipment.
In that number.
That 20 million Capex figure is existing Ruger business and so that's strict.
Strictly related to existing Ruger facilities, and new product line, primarily new product lines as we talked about an expansion of certain product lines.
And the the Marland transaction, none of that is reflected in the.
In the in the current figures that was you may recall from the filings that was a $30 million purchase price of which we paid.
A small deposit so we've still got the balance of that to pay from our cash on hand.
Okay and then the last one on on Marlin.
Any idea on maybe where the inventory stands.
Today at least out a distributor or retail and do you see any.
Issues in in <unk>.
Pushing having that inventories kind of gone in depleted by the time that you start producing new Marlon firearms.
I have to think most of that inventory is probably the fleet depleted.
Already.
Most if you look at the inventory at most of our distributors and retailers throughout the country.
Inventory not just a ruger firearms were obviously, we have better visibility of.
But most buyers brands.
Have been cleaned out.
At all levels of the channels. So we think that that's probably likely the same scenario with Marlon, although we don't know for sure.
Okay sounds great. Thank you guys.
Thank you.
Thank you. Our next question comes from the line of Ramos <unk> from ages. Your question. Please.
Thanks [noise].
Wanting everyone Christian your comments, you touched a little bit about.
Upcoming new products I, just wanted to ask about that a little more.
Given how strong the demand is for your existing products, including the new products launch within the last two years and that.
As well as you know, perhaps some some limitations or or whatever you wanna call that because of Covid in terms of the potential for marketing I know shot shows still scheduled for January at least for now but could you maybe talk about how we should think about the cadence just given that as we approach here and in the beginning of the new year.
That's typically wouldn't.
Many new products and introduced you'd think about maybe pushing that out a little bit or you just maybe going to stick with the originally planned schedule.
Just given all these sort of moving factors. Thanks.
Yeah, well Romilly you know, we focus on a long term and Fran.
Frankly, our new product schedule is going to be driven more by when those products are ready to launch.
We've got a couple really cool products in the hopper, they're not quite ready for prime time and so.
So the the shot show window in the normal.
Distributor show season of January February typically people see a lot of new product launches, but as you know with Ruger a lot of times, we will do them.
Third or fourth quarter based on when that new product is ready. So that's the same thing issue. We've got a couple of great new products, we're going as fast as we can if they're ready we'll have the mountain the January time period, but I think more likely it'll be driven by when we can make sure that the guns and ready to go and we have a sufficient quantity for our.
<unk> do have inventory when we make the announcements and again in this environment.
We want to make sure that even though while we're focusing on maximizing production for existing product lines are engineering teams.
Really.
Fielded from that in the sense that they are going flat out to get those new products ready to launch so it's.
Interesting dichotomy.
The new products teams are really paying no attention to the fact that the existing products are selling at a rapid rate, they're going full speed ahead and will be ready.
As soon as those products are.
Okay, great well, we look forward to seeing him and thanks, congrats on the quarter. Thanks.
Thanks Rommel.
Thank you. Our next question is a follow up from the line of Ryan Hamilton for Morgan to empty. Your question. Please.
I know I've asked this a couple of times over the last.
Couple of quarters, but are you seeing any indication from.
Retailer's or whatnot.
Shortages of ammo or spike prices and ammo prices being a constraint to potential new buyers.
Well, we are certainly hearing anecdotal evidence in our our sales folks are hearing that from their retailers as far as the.
The demand for ammo I think it's.
I think are.
Hello folks in the industry at the ammunition facilities are are flat out as well producing ammo. So I think it's a question of them in their case likely demand outstripping supply as well but.
But certainly haven't seen that yet negatively impacting sale of firearms I think because in this case, unlike previous times, where we've seen some ammunition shortages that definitely impacted the sale of firearms. In this case is the demand is at high levels for both the firearms and the ammo.
And you're seeing supply you are seeing the supply not caught up with demand in either case. So it's not a question like we've seen in some past situations where guns were available, but animal was not and it had a negative impact on the sales of gun at least that's what we're here to our informal feedback from our sales force.
Makes sense Unmoral and do you plan on classifying those products is is new <unk>, new design, new product sales or is that going to be put somewhere else.
When that starts good call me all good question. Good question I think we'll probably counted as new product sales. That's a good question will probably identify it so we know.
Ah Ruger, new product versus Marland, new product, we've got a lot of work ahead of us on the Marlin product line, we've got to get through the closing Gotta get all that equipment moved in a ruger facilities and there's a lot of work to be done and of course of Marlon product line has some great products I mean beyond Jesse Center-fire lever-action firearms.
We think of like the 336 18, 94, and 18 95, they've also got the model 60 semi automatic.
22 caliber rifle that over time I believe it is sold probably more units than than even the Ruger 10 22. So we're very excited by the mix of products that we're going to have access to.
To bring back back to the marketplace.
And I may have missed it earlier did you say, where you were going to put that production.
We haven't made final determination, it's going to be split between at least two ruger facilities potentially all three but I think it's more likely to be split between the mark made in north.
Carolina facility and the Newport, New Hampshire facility, but that's still remains to be seen.
And then one more for me just kind of from a historical perspective, we see this happen every couple of years, where we have surgeon demand could.
Could you maybe just touch.
As far as.
Historically goes.
What time period does this most reflect obviously, we can take covid out of that that equation, but just just from the production the demand.
Could you maybe just touch on that and see where we're what this compares to historically.
Well in.
In my 30 years plus in the industry.
Frankly, I think it's different than what we've seen in some of the past.
Demand surges, even in the run up to the 1994 saw weapons ban.
We saw it in 2013, but again this is I think stronger in fundamentally different in that effects.
A wide variety of product categories, and when combined with things that COVID-19 is forced us to spend more time at home more time with our families and resulted in some long term positive for the industry with getting people out in the field out to the range, where you can social distance, but still.
Enjoy your sport or practice with your firearms I think there's some some fundamental differences that are positive for the industry longer term rather than just the surge in demand and then a as things slowed down some.
Some of the negative implications that we've seen over the years. So I think we'll be very attuned to watching how demand continues to flow will look at we pay attention very close attention to our distributor inventories are sales people are in touch with their key retailers to watch for trends and we will be keeping an eye on it but like I said I think.
Good long term trends associated with this new buyers.
Return to.
Getting getting outside with your friends and family to shoot while you can still social distance.
Are fundamentally different and the other thing is we never quite seen the <unk>.
Level of inventory depletion within the entire channel I mean, the whether it's ruger warehouses, our distributor warehouses or the shelves at your local retailer.
There's not a lot of inventory out there right now, especially in the key product family. So I think it's fundamentally fundamentally stronger and different than I've seen in my.
Three decades in the business.
Thank you for the color I appreciate a good luck on the rest of the year. Thank you.
Thank you. Our next question comes from the line of policy for Steve from first New York Your question. Please.
For taking my question.
You guys are in a unique position here and October world.
Could you just talk a little bit about it and related to.
Comments on the demand side.
You mentioned 5 million new gun owners.
What history tells you about how many.
Purchases they might make of your product versus kind of a multiple multiple manufacturers and brands and then secondly.
To the point of.
Cautious hiring which I'm I'm sympathetic to.
And your tend to have over $400 million, a backlog demand, which.
Uhm.
<unk> you know, there's some risk that would potentially go away if you don't fulfill that.
Can you just talked about.
He clearing that backlog, how many quarters it might take.
<unk> to.
Incremental demand that your your forecasting thank you.
Yes. Thank you.
I guess I'll talk to come.
Couple of those aspects maybe the last 111 thing when we look at our backlog.
Candidly as a lot of folks on this call no. We don't spend a lot of time dwelling on our backlog. It is significant right now.
We watch more closely is what we call distributors sell through and distributor sales were looking at what distributed or selling into retail and seeing how the products moving and so.
One note on Ruger backwards or orders from our distributors are independent wholesale distributors are noncancelable.
So while they're noncancelable our goal is never too.
Stuff the channels so to speak so we don't want to see our distributor struggle and not be able to pay their bills. Obviously right now it's the exact opposite where they've got empty shelves and.
In some cases moving product.
And cross docking it very quickly and getting it out to retail.
But so while we don't pay a lot of attention to that backlog, we run our business based on like I said, the the sales from distributors to retail so even while that's an impressive number it's not something we focus on.
The and again, you'll have to remind me again the first part of your question if you would Paul.
It was almost hiring aspects.
Well hiring kind of related to fulfilling kind of or diminishing decreasing the backlog, but let's.
And it seems like if I extrapolate to 15%.
Uhm employee growth that would kind of talk to you about.
60% annualized and.
And at least keep up with what the demand numbers are but.
The the the separate question really is related to the 5 million knee gun owners that you mentioned.
And what history tells me about how many guns they might.
Right. Okay. Good I appreciate it that's the other thing that goes along with 30 years in the gun business I start to forget some things, but hey appreciate your patience.
Yeah.
So the challenge there from a marketing and Sandpoint, an operation standpoint is it is a great opportunity if you've got 5 million new customers that stickiness, it's great to get him in into the fold as a gun buyer. How do we convince ended by gun number two three and four and more importantly, how do we.
Do we convince and make sure it's a ruger.
So that's something that I think the Ruger product line with.
A broad range of products available, we look at our entry level 10, 22, 22 caliber semi automatic rifles.
<unk>.
So many people have grown up with and had so much fun and on the range or precision rimfire rifles, and then on the handgun side, you've got some great entry level, new shooter rifles, or excuse me pistols like our 22 40 fives are more.
Four pistols made out in Prescott, Arizona.
And we just got such a wide range that I think even for the customer who may have bought a gun potentially for home protection or personal protection and that might or might not be that that person's first firearm, we'd like to see them.
Get into a second third and fourth fire him to show him just how much fun. This sport can be is a lot you can do whether you're interested in hunting or go into the range beyond just that one firearm you may feel a need a need for for personal protection. Our home protection standpoint, we think the Ruger product line is very well suited because of its <unk>.
City, and covering a wide range of calibers from 22, all the way up to the big bore calibers for serious hunters. So we think given that opportunity we like our chances to succeed we think we've got the the some great options for folks and we think frankly, the Marlin product line is going to continue to add to that for us.
<unk>.
And I don't know if you can kind of point to a number like if you look at history how.
How many of your guns like does one customer essentially by.
Again on that on average.
Well I hate to I hate to throw that number out of the gas I know, we've got that in our marketing material, but.
Which room are customers once you get them over that first first gun most of them are multi gun owners and.
We've got some we've got some folks that have a whole safe full of rumors that they can rattle off.
Everyone in the story behind everyone they acquired it.
But I'm not going to hazard, a guess on the exact number per customer, but I think we do we probably do better than most because of the diversity of the product line. When you look at the mix of products and over 900 separate lineup line offerings. There's so much to choose from and the Ruger product line that I think we probably get more than our fair share of those.
Multiple gun buyers.
Got it and if I could just just one last one sneaking.
Giving a done license right now it seems like kind of an extended time frame from the government do you have any any comments around that.
Well I think it probably varies by state as you likely know depending on what state you're in it can be a long process I think a lot of.
Potential buyers were surprised when they went to go buy that first firearm again, depending on the state. They live that there were a significant delays and obstacles to getting that first purchase done.
So one we think that.
Of course state and local governments were impacted by COVID-19, just like.
All of US were and so I know that has had some impact but I think the biggest factor is just.
People were surprised if they hadn't been gone by or before they.
They were surprised at some of the hurdles and hoops that they may have had to jump through in order to exercise our second amendment rights.
Yeah, Yeah, that's definitely the case in New York Yeah.
And just kind of the the price increase that you just mentioned can you can you quantify what weighted average place would be in <unk>.
<unk> do you think that there'll be more increases over the next several quarters because of the amount of demand you're saying.
Typically.
We've had years, where we typically do a price increase on or about the beginning of the year. In this case I think I mentioned beginning of November was actually beginning of October.
And so it was about 3% across the board.
And so.
That's kind of in line with our normal annualized price increase.
Okay, so about 3% annualized sustainably seems to be even with the increase in demand.
Yeah, I mean, I think we were conscious of the fact that a lot of people contemplate their purchases.
When it comes to firearms, even in this market, they're thinking about that next favorite hunting rifle and so we.
We did take a price increase but certainly did not.
Do anything that I would consider to be opportunistic. It was just we did it took it in October rather than maybe normally we would do that December but again, 3% is right in line with what we've done in years past.
Okay. Thanks, again I appreciate everything.
Thank you. Our next question is a follow up from the line of Mark Smith from Lake Street Capital. Your question. Please.
Just one quick one from me can you talk about the mix of demand that you've seen you know we would expect.
Gone in MSR to be kind of a high ones and then anecdotally it seems like over the last <unk>.
Month to a couple of months, we've seen more demand and kind of traditional hunting rifles can you say, if if you've seen that in and if so if you think that's just drove driven by typical seasonality as we enter hunting season or is it more of a fact that people are now looking for just about any firearm they can find rather than maybe.
The one that day.
Wanted.
Good question.
On a hunting rifle topic R. Ruger American Center-fire rifles has done extremely well over the last couple of years and.
We were planning for a strong.
Center-fire rifle at market.
And.
Production and demand cycle well prior to Covid. So we thought our sales will be strong there on a hunting rifles. They have been I think to some extent you are correct in that.
People have gone into gun stores, and maybe hoping to make a purchase on.
Something maybe they came in looking to make a purchase on potentially a center-fire pistol.
Or an MSR type product and ended up.
Based on available inventory buying a bolt action right. So certainly anecdotally we've heard some of that but we've been very pleased with the sale of hunting rifles, and our traditional calvert as well as some some newer calibers like the 450 bushmaster.
350, legend et cetera, and so.
That's been.
Stronger and stronger than we than we thought initially but in line certainly like I said.
We were expecting a good hunting season, and we haven't been disappointed in that.
Okay, great. Thank you.
Thank you.
Conclude the question and answer session of today's program I'd like to end the program back to Chris killing me for any further remarks.
Thank you.
In closing I would like to again, thank our 1700 plus employees for their hard work and dedication during these difficult times on behalf of all of US have Rover I also want to thank all the first responders nurses doctors and other emergency medical personnel, who continue to go into harm's way to fight this pandemic and help our fellow Americans who are most.
Need.
And please take the time next week devote our right to vote should be cherished. So please let your voice be heard at the ballot box.
Thank you for attending our conference call and for your continued interest in Ruger, we look forward to discussing our fourth quarter results in February 2021.
<unk>.
Thank you, ladies and gentlemen, much for your participation that Phase conference. This does conclude the program you may now disconnect good day.
[music].