Ryan Hamilton: How you were?
Thomas Dineen: I’m more sticky than others in certain categories, certain commodities, wages and things of that nature.
Ryan Hamilton: And where are you being pinched? I mean, you just brought up wages as far as commodities go, where are you still being pinched the most?
Christopher Killoy: Well, I think some of it’s availability, some of it’s in our – when we look at steel, aluminum even wood for example, the quality of the ability to get quality walnut for some of our rifles is one of those commodities that not many other manufacturers are concerned about. But that’s one that to try to get quality walnut at a reasonable price is something that negatively impacts profitability or impacts the price of the firearm going out the door.
Ryan Hamilton: So, you’re not having a hard time getting it, you’re just having to pay more for it?
Christopher Killoy: There are a few things we’re having a hard time getting. And like I said, the wood in particular, getting good quality highly configured walnut when you’re looking for it for a number one rifle or an M77 Wood Stock rifle. those are things that are harder and harder to find. And so our buyer buyers are always constantly looking for new sources and trying to make sure we’re getting the best quality product we can. Because we have our own wood shops. So, we’re turning those wood blanks up in Newport, New Hampshire and then putting it on our products at our factories, both in New Hampshire and North Carolina.
Ryan Hamilton: Got it. When looking at Marlin, it appears that you aren’t fully meeting the demand that’s out there. Could you get a comment a little bit on that and what you – what levers you guys can pull to maybe either get more rifles to market?
Christopher Killoy: Well, as you may know this year, we turned on the 1894 line. So, the 1894 line really doubles our capacity in total marlin production. We have one line; we call a round bolt line that makes the 1895s and 336s. The other line makes the 1894s. 1894s are the 44 magnums and 357 Magnum rifles, which receiving tremendous demand, just like the originals that we launched in the 4570. That’s the good news. And it’s been a continuing challenge to get those ramped up to try to meet demand. The team down in Maiden is doing an awesome job. We still have room to grow and we’re chasing that demand hard. We’re trying to be conscious of the fact that we have to maintain quality first as we chase the demand. I mean these are quality rifles.
Our customers expect them to be quality-made. And I think we’re delivering on that commitment, but we’ve got to be careful to make sure we don’t try to go too fast and deliver rifles that are not up to snuff to what our Ruger and Marlin customers are expecting.
Ryan Hamilton: Right. that is great news. Thanks for the color on that. And then, as I usually ask on these calls, could you touch a little bit on the accessories business and what you’re seeing there?
Christopher Killoy: Well, the accessories business is profitable segment for us, for sure, particularly out of our ShopRuger segment, particularly when it comes to things that we make, like our magazines, our BX-1 magazines, our BX-25 magazines et cetera. And we ran a promotion in, at the beginning of Q4 that included ShopRuger. It provided if a consumer bought a American Rifle Generation I, they were able to redeem it for $100, ShopRuger a gift card. And that helped drive both sales of the Generation Gen I American rifles before the launch of the Gen IIs. And it also helped increase sales at on our ShopRuger segment and drive traffic there, and frankly, got us a lot of new customers in the ShopRuger. So, we’re very pleased with the results of that promo.
Ryan Hamilton: Excellent. Thanks for the time, guys and congrats on the 75 years.
Christopher Killoy: Thank you.
Operator: Thank you. [Operator Instructions] And our next question comes from the line of Rommel Dionisio from Aegis Capital. Your question, please.
Rommel Dionisio: Good morning. Thank you. Yes, I know in your prepared comments, you talked about product mix shift in 2023 being somewhat adverse. I wonder if you could just maybe give us a feel for the strong orders you’ve gotten fourth quarter and the new products that you’ve launched, how we should think about product mix going into 2024. And as a follow-up to that I know you guys have done a great job over the years, really engineering cost out of the product line. And I wonder if you could just talk about some of the initiatives there to better position your gross margins. Thanks.
Christopher Killoy: Thanks, Rommel. I wouldn’t call it an adverse product mix as much as we had some lines that like you take our original LCP, the 3701 was model number. When we started to look at where the market was, where the competition was, we looked at that and said, we need to reposition a price. We have a gray gun market leading position with that gun, but we know we can get our volume back up when we reposition that model. So that’s part of the actions we took on the that original LCP. We also did it with the MAX-9 and the Security-9 pistols. So that between that and then doing some things like ramping up some of the lines that we neglected during COVID when we were pushing hard on certain other segments, things like the single-action revolvers, our team up in Newport has done a great job getting that back up and running to kind of our historical levels.
