STURM RUGER & CO INC
For the period ended Dec 31, 2024. Filed Feb 19, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 19, 2025
RGR$49.93+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-21.
0001174947-24-000243
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-19.
0001174947-25-000197
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 140 previous paragraphs and 136 current paragraphs.
100 unchanged; 22 reworded; 7 added; 14 removed; 4 previous and 7 current paragraphs rearranged.
Tables are not compared: 45 previous and 43 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
The estimated sell-through of the Company’s products from the independent distributors to retailers in 2024 increased 5% from 2023. In 2024, adjusted NICS decreased 4% from 2023. The increase in the sell-through of the Company’s products despite the decrease in adjusted NICS background checks may be attributable to new product introductions, like the Ruger American Rifle Generation II bolt-action rifles, the Marlin lever-action rifles, and the RXM pistol, which helped offset aggressive promotions, discounts, rebates, and the extension of payment terms offered by the Company’s competitors.
Current report
The Company’s finished goods inventory decreased by 28,300 units during 2024, while distributor inventories of the Company’s products decreased by 63,500 units during the same period.
Current report
Selling expenses for the year ended December 31, 2024 were substantially unchanged from 2023, as increased spending on advertising was offset by modest reductions in several selling and marketing initiatives.
Current report
The increase in general, and administrative expenses for the year ended December 31, 2024 was primarily attributable to increased professional service costs andaccrued severances of $1.5 million taken in the first quarter of 2024 related to a reduction in force involving approximately 80 employees. These increases were partially offset by a reduction in incentive compensation expenses. The aforementioned accrued severances were settled in cash and consist of one-time termination charges arising from severance obligations and other customary employee benefit payments in connection with areduction in force.
Current report
Quarterly Data
Current report
In 2024, the Company repurchased 835,060 shares of its common stock for $34.4 million in the open market. The average price per share purchased was $41.19. These purchases were funded with cash on hand.
Current report
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,” which requires additional disclosure of certain costs and expenses within the notes to the financial statements. The updated standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.
Removed paragraphs (14)
Previous report
Orders of many models of firearms from the independent distributors tend to be stronger in the first quarter of the year and weaker in the third quarter of the year.
Previous report
Quarterly Summary Unit Data
Previous report
The decreased gross profit for the year ended December 31, 2022 is attributable to the significant decrease in sales, as well as inflationary cost increases in materials, commodities, services, energy, fuel and transportation, which were partially offset by increased pricing*.*
Previous report
Selling, general and administrative expenses were $76.6 million in 2022, a slight increase of $0.1 million from $76.5 million in 2021, and an increase from 10.5% of sales in 2021 to 12.9% of sales in 2022. The increase in these expenses was primarily attributable to increased shipping costs and to the resumption of trade show participation costs, travel expenditures, and advertising that had been deferred during the height of the COVID-19 restrictions, almost entirely offset by decreased incentive compensation expenses and decreased variable costs, such as shipping, as a result of the reduced sales volume.
Previous report
Other operating income (expense), net was de minimis in 2022 and an expense of $0.1 million in 2021.
Previous report
Royalty Income
Previous report
Royalty income was $0.8 million in 2022 and $2.0 million in 2021.
Previous report
Interest Income
Previous report
Interest income was $2.6 million in 2022, an increase from de minimis earnings in 2021, due to significantly increased interest rates earned on short-term investments beginning in the second quarter of 2022.
Previous report
Interest Expense
Previous report
Interest expense was $0.3 million in 2022 and $0.2 million and 2021.
Previous report
Other Income, Net
Previous report
Other income, net was $1.7 million in 2022, an increase of $0.1 million from $1.6 million in 2021.
Previous report
The global outbreak of the Coronavirus disease 2019 was declared a pandemic by the World Health Organization and a national emergency by the U.S. Government in March 2020. The Company has taken many proactive steps to maintain the health and safety of its employees and to mitigate the impact on its business. During the twelve month period ended December 31, 2023, the Company did not experience a significant adverse impact on its business from COVID-19 or related government restrictions. The Company cannot predict the extent to which its business, results of operations, financial condition, or cash flows will ultimately be impacted by COVID-19.
Reworded paragraphs (22)
Previous wording
Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99% of sales are from firearms. Export sales represent approximately 6% of total sales. The Company’s design and manufacturing operations are located in the United States and almost all product content is domestic. The Company’s firearms are sold through a select number of independent wholesale distributors, principally to the commercial sporting market.
Current wording
Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99% of sales are from firearms. Export sales represent approximately 5% of total sales. The Company’s design and manufacturing operations are located in the United States and almost all product content is domestic. The Company’s firearms are sold through a select number of independent wholesale distributors, principally to the commercial sporting market.
Previous wording
The Company reviews the estimated sell-through from the independent distributors to retailers, as well as inventory levels at the independent distributors and at the Company, to plan production levels and manage inventories. These reviews resulted in a decrease in total unit production of 19% in 2023 compared to 2022.
Current wording
The Company reviews the estimated sell-through from the independent distributors to retailers, as well as inventory levels at the independent distributors and at the Company, to plan production levels and manage inventories. These reviews resulted in a decrease in total unit production of 1% in 2024 compared to 2023.
Previous wording
Firearms sales and unit shipments decreased 18.5% and 23.4%, respectively, in 2022. New products represented $78.4 million or 14% of firearms sales in 2022, compared to $155.5 million or 22% of firearms sales in 2021. New product sales include only major new products that were introduced in the past two years. In 2022, new products included the MAX-9 pistol, LCP MAX, Marlin 1895 lever-action rifles, PC Charger, LC Carbine, and Small-Frame Autoloading Rifle.
Current wording
Firearms sales decreased 2% and unit shipments increased 3%, respectively, in 2024. New products represented $159.3 million or 32% of firearms sales in 2024, an increase from $119.0 million or 23% of firearms sales in 2023. New product sales include only major new products that were introduced in the past two years. In 2024, new products included the RXM pistol, American Centerfire Rifle Generation II, Marlin 1894 lever-action rifles, Security-380 pistol, Super Wrangler revolver, LC Carbine, and the Small-Frame Autoloading Rifle and the Marlin 1895 Marlin lever-action rifles, which were only included for a portion of the year.
Previous wording
The decrease in gross margin for the year ended December 31, 2022 is attributable to the aforementioned inflationary cost increases andunfavorable deleveraging of fixed costs resulting from decreased production and sales.
Current wording
The decreased gross profit for the year ended December 31, 2024 is attributable to the decrease in sales, unfavorable deleveraging of fixed costs resulting from decreased production, and a product mix shift toward products with relatively lower margins that remain in stronger demand.
Previous wording
Operating income was $103.5 million or 17.3% of sales in 2022. This is a decrease of $99.6 million from 2021 operating income of $203.1 million or 27.8% of sales.
Current wording
Operating income was $31.6 million or 5.9% of sales in 2024. This is a decrease of $20.4 million from 2023 operating income of $52.1 million or 9.6% of sales.
Previous wording
As a result of the foregoing factors, consolidated net income was $88.3 million in 2022. This represents a decrease of $67.6 million from 2021 consolidated net income of $155.9 million.
Current wording
As a result of the foregoing factors, consolidated net income was $30.6 million in 2024. This represents a decrease of $17.6 million from 2023 consolidated net income of $48.2 million.
Previous wording
The Company reviews the estimated sell-through from the independent distributors to retailers, as well as inventory levels at the independent distributors and at the Company, to plan production levels and manage inventories. These reviews resulted in a decrease in total unit production of 20% in 2022 compared to 2021.
Current wording
The Company reviews the estimated sell-through from the independent distributors to retailers, as well as inventory levels at the independent distributors and at the Company, to plan production
Previous wording
Firearms sales and unit shipments decreased 9% and 17%, respectively, in 2023. New products represented $121.7 million or 23% of firearms sales in 2023, an increase from $78.4 million or 14% of firearms sales in 2022. New product sales include only major new products that were introduced in the past two years. In 2023, new products included the MAX-9 pistol (during the first quarter only), Security-380 pistol, Super Wrangler revolver, LCP MAX pistol, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle Generation II.
Current wording
Firearms sales and unit shipments decreased 9% and 17%, respectively, in 2023. New products represented $119.0 million or 23% of firearms sales in 2023, an increase from $78.4 million or 14% of firearms sales in 2022. New product sales include only major new products that were introduced in the past two years. In 2023, new products included the MAX-9 pistol (during the first quarter only), Security-380 pistol, Super Wrangler revolver, LCP MAX pistol, Marlin lever-action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle Generation II.
Previous wording
The decreased gross profit for the year ended December 31, 2023 is attributable to the significant decrease in sales, as well as inflationary cost increases in materials, commodities, services, wages, energy, fuel and transportation, unfavorable deleveraging of fixed costs resulting from decreased production, a product mix shift toward products with relatively lower margins that remain in stronger demand, and increased promotional costs.
Current wording
The decreased gross profit for the year ended December 31, 2023 is attributable to the significant decrease in sales, as well as unfavorable deleveraging of fixed costs resulting from decreased production, a product mix shift toward products with relatively lower margins that remain in stronger demand, and increased promotional costs.
Previous wording
At December 31, 2023, the Company had cash and cash equivalents of $15.2 million and $102.5 million in short term investments. The Company’s pre-LIFO working capital of $272.5 million, less the LIFO reserve of $64.3 million, resulted in working capital of $208.2 million and a current ratio of 4.3 to 1. The Company’s current ratio is higher than the previous year’s primarily due to the dividends payable of $88 million related to the $5.00 per share special dividend that was declared on November 30, 2022 and paid on January 5, 2023. The Company also has access to a $40 million unsecured revolving line of credit that is currently undrawn.
Current wording
At December 31, 2024, the Company had cash and cash equivalents of $10.0 million and $95.5 million in short term investments. The Company’s pre-LIFO working capital of $264.1 million, less the LIFO reserve of $66.4 million, resulted in working capital of $197.7 million and a current ratio of 4.2 to 1. The Company also has access to a $40 million unsecured revolving line of credit that is currently undrawn.
Previous wording
Cash provided by operating activities was $33.9 million, $77.2 million, and $172.3 million in 2023, 2022, and 2021, respectively. The decrease in cash provided in 2023 compared to 2022 is primarily attributable to significantly decreased earnings in 2023.
Current wording
Cash provided by operating activities was $55.5 million, $33.9 million, and $77.2 million in 2024, 2023, and 2022, respectively. The increase in cash provided in 2024 compared to 2023 is primarily attributable to the decrease in inventory in 2024 compared to the increase in 2023, and the reduction in prepaid and other assets compared to increases in those accounts in 2023, partially offset by reduced income in 2024.
Previous wording
The decrease in cash provided in 2022 compared to 2021 is primarily attributable to significantly decreased earnings in 2022 and increased inventories and trade receivables in 2022.
Current wording
The decrease in cash provided in 2023 compared to 2022 is primarily attributable to the decrease in net income in 2023.
Previous wording
Capital expenditures were $15.8 million, $27.7 million, and $28.8 million in 2023, 2022, and 2021, respectively. In 2024, the Company expects capital expenditures to approximate $15 million, much of which will relate to tooling and fixtures for new product introductions and to upgrade and modernize manufacturing equipment. Due to market conditions and business circumstances, actual capital expenditures could vary significantly from the budgeted amount. The Company finances, and intends to continue to finance, all of these activities with funds provided by operations and current cash.
Current wording
Capital expenditures were $20.8 million, $15.8 million, and $27.7 million in 2024, 2023, and 2022, respectively. In 2025, the Company expects capital expenditures to approximate $20 million, much of which will relate to tooling and fixtures for new product introductions and to upgrade and modernize manufacturing equipment. Due to market conditions and business circumstances, actual capital expenditures could vary significantly from the budgeted amount. The Company finances, and intends to continue to finance, all of these activities with funds provided by operations and current cash.
Previous wording
As of December 31, 2023, the Company had $74.7 million of United States Treasury instruments which mature within one year. The Company also invests available cash in a bank-managed money market fund that invests exclusively in United States Treasury instruments which mature within one year. At December 31, 2023, the Company’s investment in this money market fund totaled $27.8 million.
Current wording
As of December 31, 2024, the Company had $62.5 million of United States Treasury instruments which mature within one year. The Company also invests available cash in a bank-managed money market fund that invests exclusively in United States Treasury instruments which mature within one year. At December 31, 2024, the Company’s investment in this money market fund totaled $33.0 million.
Previous wording
In 2022, the Company repurchased 4,440 shares of its common stock for $0.2 million in the open market. The average price per share purchased was $49.87. These purchases were funded with cash on hand. No shares were repurchased in 2021.
Current wording
In 2022, the Company repurchased 4,440 shares of its common stock for $0.2 million in the open market. The average price per share purchased was $49.87. These purchases were funded with cash on hand.
Previous wording
At December 31, 2023, approximately $74.7 million remained authorized for future share repurchases*.*
Current wording
At December 31, 2024, approximately $40.3 million remained authorized for future share repurchases*.*
Previous wording
Including the $5.00 per share special dividend paid on January 5, 2023, the Company paid dividends totaling $110.8 million, $42.7 million, and $59.1 million in 2023, 2022, and 2021, respectively. The quarterly dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount per share. The Company’s practice is to pay a dividend of approximately 40% of net income.
Current wording
Including the $5.00 per share special dividend paid on January 5, 2023, the Company paid dividends totaling $11.8 million, $110.8 million, and $42.7 million in 2024, 2023, and 2022, respectively. The quarterly dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount per share. The Company’s practice is to pay a dividend of approximately 40% of net income.
Previous wording
On February 16, 2024, the Company’s Board of Directors authorized a dividend of 23¢ per share to shareholders of record on March 15, 2024. The payment of future dividends depends on many factors, including internal estimates of future performance, then-current cash, and the Company’s need for funds.
Current wording
On February 14, 2025, the Company’s Board of Directors authorized a dividend of 24¢ per share to shareholders of record on March 14, 2025. The payment of future dividends depends on many factors, including internal estimates of future performance, then-current cash, and the Company’s need for funds.
Previous wording
At December 31, 2023, the Company had approximately $51.3 million in agreements to purchase goods or services that are enforceable and legally binding on the Company, all of which are expected to be settled in less than one year. Additionally, the Company has approximately $3.6 million in operating lease obligations, which will be payable through 2034. The Company expects to fund all of these commitments with cash flows from operations and current cash.
Current wording
At December 31, 2024, the Company had approximately $37.5 million in agreements to purchase goods or services that are enforceable and legally binding on the Company, all of which are expected to be settled in less than one year. Additionally, the Company has approximately $2.8 million in operating lease obligations, which will be payable through 2034. The Company expects to fund all of these commitments with cash flows from operations and current cash.
Previous wording
Currently, there are 15 domestic distributors. Additionally, the Company has 44 and 26 distributors servicing the export and law enforcement markets, respectively.
Current wording
Currently, there are 14 domestic distributors. Additionally, the Company has 44 and 26 distributors servicing the export and law enforcement markets, respectively.
Previous wording
The Company believes that the assumptions and judgments involved in the accounting estimates below have the greatest potential impact on its financial statements, so the Company believes these to be its critical accounting estimates. The methodologies applied for determining the estimates related to the below critical accounting estimates have not changed from the prior year.
Current wording
The Company believes that the assumptions and judgments involved in the accounting estimates below have the greatest potential impact on its financial statements, so the Company believes these
Previous wording
In November of 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires enhanced reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Retrospective application is required and early adoption is permitted. The Company is currently evaluating the effect the updated guidance will have on its financial statement disclosures.
Current wording
In November of 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires enhanced reportable segment disclosures, primarily related to significant segment expenses which are regularly provided to the chief operating decision maker. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07, beginning with the current filing. The adoption of the new guidance required additional disclosures, but did not have a material impact to the Company. Refer to Note 17, Operating Segment Information, for the updated presentation
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The decrease in other income for the year ended December 31, 2024 was primarily the result of decreases in interest income due to decreased interest rates earned on short-term investments and other income, partially offset by increased royalty.
Current report — wording carried from elsewhere
The effective income tax rate was 19.1% in 2024 and 18.0% in 2023. The Company's 2024 and 2023 effective tax rates differ from the statutory federal tax rate due principally to research and development tax credits, state income taxes, and the nondeductibility of certain executive compensation.
Current report — wording carried from elsewhere
levels and manage inventories. These reviews resulted in a decrease in total unit production of 19% in 2023 compared to 2022.
Current report — wording carried from elsewhere
The decrease in gross margin for the year ended December 31, 2023 is attributable to the aforementioned factors, partially offset by increased pricing.
Current report — wording carried from elsewhere
Selling and general and administrative expenses data for the year ended (dollars in millions):
Current report — wording carried from elsewhere
Other income data for the year ended (dollars in millions):
Current report — wording carried from elsewhere
to be its critical accounting estimates. The methodologies applied for determining the estimates related to the below critical accounting estimates have not changed from the prior year.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
The estimated sell-through of the Company’s products from the independent distributors to retailers in 2022 decreased 25% from 2021. For the same period, adjusted NICS decreased 11%. These decreases are attributable to decreased consumer demand for firearms from the unprecedented levels of the surge that began in 2020 and remained for most of 2021. The greater reduction in the sell-through of the Company’s products relative to adjusted NICS background checks may be attributable to the following:
Previous report — wording carried elsewhere
The Company’s finished goods inventory increased by 92,200 units during 2022.
Previous report — wording carried elsewhere
Distributor inventories of the Company’s products increased by 134,200 units during 2022, and approximate a reasonable level to support rapid fulfillment of retailer demand for most product families.
Previous report — wording carried elsewhere
The effective income tax rate was 18.4% in 2022 and 24.5% in 2021. The Company's 2022 and 2021 effective tax rate differs from the statutory federal tax rate due principally to the availability of research and development tax credits, state income taxes, and the nondeductibility of certain executive compensation. The decrease in the 2022 effective tax rate was primarily attributable to research and development tax credits, some of which related to amended prior year income tax returns. The impact related to research and development tax credits on the effective tax rate is expected to decline in future years.