NSSF adjusted NICS checks compared with firearms sold
In the year 2011, there were 16.4 million NICS checks. The NSSF adj NICS checks were about 65% of this total, or 10.8 million. (I believe that NSSF adj NICS checks are always about 65% of NICS, so can always be deduced from the NICS numbers.)
There were 5.5 million firearms manufactured in the United States, and 3.2 million imported that year, so that in 2011, domestic manufacturers accounted for about 63% of all firearms sales in the U.S., and foreign sales 37%.
The total firearms sales, estimated by the sum of weapons manufactured+weapons imported, was 8.7 million, which is slightly less than the NSSF adj NICS checks of 10.8 million. This means that about 2.1 million of the NSSF adjusted NICS checks did not result in purchases of firearms, possibly because of shortages, or possibly because of potential buyers changing their minds. When the order backlog is a large number, the NSSF adj NICS checks will not always result in a purchase in the same year.
My point is that NSSF adj NICS checks seem to be slightly greater than US firearms sales, but not by much. I think it is reasonable to assume that 80% of NSSF adj NICS checks result in the purchase of a firearm, and 63% of these purchases are U.S. manufactured.
Since NSSF adj NICS checks is about 65% of NICS checks, we can estimate how many weapons Ruger sells every month, simply by looking at the NICS checks, if we know Ruger's market share. We know it was 24% for pistols in 2011 from the ATF data, and we can calculate its share for other firearms simply by studying the ATF data. I haven't done this yet, but I will.
The simplest approach to estimating Ruger's revenue is to simply compare the NICS checks in the preceding quarter with the NICS checks in the present quarter, and multiply Ruger's revenue from the preceding quarter by the appropriate ratio. That was the method used in the estimate I posted a few days ago.
One problem that I think I need to point out (for the sake of accuracy) is that the number of guns MANUFACTURED in a given year is not necessarily the same as the number of guns SOLD in that year, due to build up and depletion of distributor inventories. Over longer periods (ie. multi year spans), they can be assumed to be the same, since gun companies don't stay in business for very long if they manufacture a lot more guns than they sell.
I have proven, in my spreadsheet I referenced last October, downloadable from docstocDOTcom, NICS Background Checks.xlsx, that the error in predicting how much RGR manufactured in a given year (not sold), by using YoY Adj. NICS Growth can vary by plus or minus 30% or so. On the average, the error was close to 0%, when averaged over 12 years. I did not try to do it for how many they sold (don't have the data) or for $ Sales.
For that reason, it would be better to have unit volume sales data (as opposed to $ Sales) for each quarter, for RGR, to check the predictive accuracy of the Adj. NICS growth. $ Sales can vary due to different wholesale prices of different models, combined with the % of each model that makes up the total # of guns sold in the quarter.
We both KNOW the analysts have way underestimated Q1 Revs and EPS, it's just a matter of how much.