STURM RUGER & CO INC

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 accounted for approximately 6% of total sales for the six month period ended June 27, 2026 and approximately 5% of total sales for the six month period ended June 28, 2025. 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 accounted for approximately 5% of total sales for each of the nine month periods ended September 26, 2026 and September 27, 2025, respectively. 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

During the six months ended June 27, 2026, the Company executed on its Ruger 2030 plan – strengthening operational responsiveness, enhancing the product portfolio and positioning the Company for sustainable long-term growth. Activity in the quarter included:

Current wording

During the nine months ended September 26, 2026, the Company executed on its Ruger 2030 plan – strengthening operational responsiveness, enhancing the product portfolio and positioning the Company for sustainable long-term growth. Activity in the period included:

Previous wording

As announced on May 4, 2026, Ruger and Beretta entered into an Agreement (the “Beretta Agreement”), which reflects a shared commitment to long-term value creation, constructive engagement, and stability for Ruger’s shareholders, employees, customers and industry partners. Throughout that process, the Company took actions to protect the interests of all shareholders and to maintain focus on executing its long-term strategy. These efforts resulted in professional fees and advisory costs totaling $1.2 million during the quarter and $4.4 million for the six month period ended June 27, 2026. These costs are largely non-recurring in nature and do not reflect the underlying performance of the core business. With the Beretta Agreement now in place, the Company expects these costs to be limited in duration, though some additional expenses may be incurred in the near term.

Current wording

As announced on May 4, 2026, Ruger and Beretta entered into an Agreement (the “Beretta Agreement”), which reflects a shared commitment to long-term value creation, constructive engagement, and stability for Ruger’s shareholders, employees, customers and industry partners. Throughout that process, the Company took actions to protect the interests of all shareholders and to maintain focus on executing its long-term strategy. These efforts resulted in professional fees and advisory costs totaling $1.8 million during the quarter and $6.3 million for the nine month period ended September 26, 2026. These costs are largely non-recurring in nature and the Company believes that they do not reflect the underlying performance of the core business. With the Beretta Agreement now in place, the Company expects these costs to be limited in duration, though some additional expenses may be incurred in the near term.

Previous wording

Additionally, in February 2026, the Company executed a reduction-in-force as part of broader efforts to structurally align the organization to strategic priorities and the future operating model. These actions are consistent with the changes outlined in the 2026 Plan and, more broadly, the Ruger 2030 framework. The moves improve efficiency, enhance accountability and position the Company for long-term profitable growth. The associated severance and related costs of $0.7 million during the quarter and $3.2 million for the six month period ended June 27, 2026 and are not indicative of ongoing operations.

Current wording

Additionally, in February 2026, the Company executed a reduction-in-force as part of broader efforts to structurally align the organization to strategic priorities and the future operating model. These actions are consistent with the changes outlined in the 2026 Plan and, more broadly, the Ruger 2030 framework. The moves improve efficiency, enhance accountability and position the Company for long-term profitable growth. The associated severance and related costs of $3.2 million for the nine month period ended September 26, 2026 and are not indicative of ongoing operations. There were no additional such costs recognized during the three months ended September 26, 2026.

Previous wording

As a result of the factors listed above, the results of operations for the six month period ending June 27, 2026 were negatively impacted, on a non-GAAP basis, by $0.35 per share (see the Non-GAAP Financial Performance Measures below.) The impact was as follows:

Current wording

As a result of the factors listed above, the results of operations for the nine month period ending September 26, 2026 were negatively impacted, on a non-GAAP basis, by $0.44 per share (see the Non-GAAP Financial Performance Measures below.) The impact was as follows:

Previous wording

The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 11% in the first half of 2026 compared to the prior year period. For the same period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation (“NSSF”)) increased 3%. Estimated sell-through from the independent distributors to retailers and total adjusted NICS background checks for the trailing six quarters follow:

Current wording

The estimated unit sell-through of the Company’s products from the independent distributors to retailers increased 5% in the first nine months of 2026 compared to the prior year period. For the same period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation (“NSSF”)) increased 3%. Estimated sell-through from the independent distributors to retailers and total adjusted NICS background checks for the trailing seven quarters follow:

Previous wording

The units ordered, value of orders received, average sales price of units ordered, and ending backlog for the trailing six quarters are as follows (dollars in millions, except average sales price):

Current wording

The units ordered, value of orders received, average sales price of units ordered, and ending backlog for the trailing seven quarters are as follows (dollars in millions, except average sales price):

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. The Company’s overall production in the second quarter of 2026 increased 22% from the first quarter of 2026*.*

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. The Company’s overall production in the third quarter of 2026 increased 4% from the second quarter of 2026*.*

Previous wording

Firearms unit data for the trailing six quarters are as follows (dollar amounts shown are net of Federal Excise Tax of 10% for handguns and 11% for long guns):

Current wording

Firearms unit data for the trailing seven quarters are as follows (dollar amounts shown are net of Federal Excise Tax of 10% for handguns and 11% for long guns):

Previous wording

During the first half of 2026, the Company’s finished goods inventory decreased by 16,900 units and distributor inventories of the Company’s products increased by 12,600 units.

Current wording

During the first nine months of 2026, the Company’s finished goods inventory increased by 15,100 units and distributor inventories of the Company’s products increased by 59,100 units.

Previous wording

Inventory unit data for the trailing six quarters follows:

Current wording

Inventory unit data for the trailing seven quarters follows:

Previous wording

The increase in total consolidated net sales and net firearms sales for the three months ended June 27, 2026 is attributable to increased demand, augmented by an increased average selling price. Sales of new products, including the RXM pistol, Marlin 1894 lever-action rifles, Glenfield rifles, Harrier rifles, and the Ruger Red Label III Shotgun represented $29.3 million or 19.8% of firearm sales in the three months ended June 27, 2026. New product sales include only major new products that were introduced in the past two years, so the American Centerfire Rifle Generation II ceased to be a new product in the current quarter.

Current wording

The increase in total consolidated net sales and net firearms sales for the three months ended September 26, 2026 is attributable to increased demand, augmented by an increased average selling price.

Previous wording

Net sales, cost of products sold, and gross profit data for the six months ended (dollars in millions):

Current wording

Net sales, cost of products sold, and gross profit data for the nine months ended (dollars in millions):

Previous wording

The increased gross profit for the three months ended June 27, 2026 is attributable to the aforementioned sales increases, the absence of inventory rationalization write-offs that were undertaken in the prior year, and the favorable leveraging of fixed costs resulting from increased production, augmented by the $0.2 million of deferred revenue related to sales promotions.

Current wording

The increased gross profit for the nine months ended September 26, 2026 is attributable to the aforementioned sales increases, the absence of inventory rationalization write-offs that were undertaken in the prior year, and the favorable leveraging of fixed costs resulting from increased production.

Previous wording

The increase in gross margin for the six months ended June 27, 2026 is attributable to the aforementioned factors.

Current wording

The increase in gross margin for the nine months ended September 26, 2026 is attributable to the aforementioned factors.

Previous wording

Selling expenses for the three months ended June 27, 2026 were substantially comparable to the corresponding period in the prior year, with the increases in spending on industry shows and personnel costs offset by decreases in advertising, promotional and marketing initiatives, and shipping expenses.

Current wording

Selling expenses for the three months ended September 26, 2026 decreased in comparison to the corresponding period in the prior year, due to decreases in spending on industry shows and promotional costs partially offset by increases in advertising and professional services expenses.

Previous wording

The increase in general and administrative expenses for the three months ended June 27, 2026 was primarily attributable to increased personnel and share based compensation costs, partially offset by decreased severance costs.

Current wording

The increase in general and administrative expenses for the three months ended September 26, 2026 was primarily attributable to was primarily attributable to $1.8 million in legal fees incurred related to the Beretta Agreement increased personnel and share based compensation costs, partially offset by decreased severance costs.

Previous wording

Selling and general and administrative expenses data for the six months ended (dollars in millions):

Current wording

Selling and general and administrative expenses data for the nine months ended (dollars in millions):

Previous wording

Selling expenses for the six months ended June 27, 2026 were substantially comparable to the corresponding period in the prior year, with the increases in spending on industry shows and personnel costs offset by decreases in advertising, promotional and marketing initiatives, and shipping expenses.

Current wording

Selling expenses for the nine months ended September 26, 2026 decreased in comparison to the corresponding period in the prior year due to decreases in spending on advertising, promotional and marketing initiatives that were partially offset by increases in spending on industry shows, professional services, and personnel costs.

Previous wording

The increase in general and administrative expenses for the six months ended June 27, 2026 was primarily attributable to $4.4 million in legal fees incurred related to the Beretta Agreement, $3.2 million in severance costs, and increased share based compensation costs, which included a one-time non-recurring expense of $1.7 million, partially offset by decreased professional service costs.

Current wording

The increase in general and administrative expenses for the nine months ended September 26, 2026 was primarily attributable to $6.3 million in legal fees incurred related to the Beretta Agreement, $3.2 million in severance costs, and increased share based compensation costs, which included a one-time non-recurring expense of $1.7 million, partially offset by decreased professional service costs.

Previous wording

Other income data for the six months ended (dollars in millions):

Current wording

Other income data for the nine months ended (dollars in millions):

Previous wording

The increase in other income for the six months ended June 27, 2026 was attributable to increased royalty income and miscellaneous income, partially offset by decreased interest income.

Current wording

The increase in other income for the nine months ended September 26, 2026 was attributable to increased royalty income and miscellaneous income, partially offset by decreased interest income.

Previous wording

The Company's 2026 and 2025 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. The reduction in 2026 earnings increased the impact of these items, which resulted in effective income tax rates of 21.6% and 19.5% for the three and six months ended June 27, 2026, respectively. The Company’s effective income tax rate was 11.2% and 1.9% for the three and six months ended June 28, 2025, respectively.

Current wording

The Company’s 2026 and 2025 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. The Company’s effective income tax rate was 23.1% and 21.1% for the three and nine months ended September 26, 2026, respectively. The reduction in 2025 earnings increased the impact of these items, which resulted in effective income tax rate of 174.8% and 33.0% for the three and nine months ended September 27, 2025, respectively.

Previous wording

As a result of the foregoing factors, consolidated net income was $7.0 million for the three months ended June 27, 2026, a change of (140.5%) from a net loss of $(17.2) million in the comparable prior year period.

Current wording

As a result of the foregoing factors, consolidated net income was $5.8 million for the three months ended September 26, 2026, a change of 266.9% from a consolidated net income of $1.6 million in the comparable prior year period.

Previous wording

Consolidated net income was $7.1 million for the six months ended June 27, 2026, a change of (175.2%), from a net loss of $(9.5) million in the comparable prior year period.

Current wording

Consolidated net income was $12.9 million for the nine months ended September 26, 2026, a change of $20.8 million, from a consolidated net loss of $7.9 million in the comparable prior year period.

Previous wording

Adjusted EBITDA was $16.6 million for the three months ended June 27, 2026, an increase of 205.0% from $5.4 million in the comparable prior year period.

Current wording

Adjusted EBITDA was $14.3 million for the three months ended September 26, 2026, an increase of 401.9% from $2.9 million in the comparable prior year period.

Previous wording

Adjusted EBITDA was $27.5 million for the six months ended June 27, 2026, an increase of 39.1% from $19.7 million in the comparable prior year period.

Current wording

Adjusted EBITDA was $41.8 million for the nine months ended September 26, 2026, an increase of 84.9% from $22.6 million in the comparable prior year period.

Previous wording

At the end of the second quarter of 2026, the Company’s cash and short-term investments totaled $117.5 million. Pre-LIFO working capital of $236.7 million, less the LIFO reserve of $68.4 million, resulted in working capital of $168.3 million and a current ratio of 3.3 to 1.

Current wording

At the end of the third quarter of 2026, the Company’s cash and short-term investments totaled $101.4 million. Pre-LIFO working capital of $239.7 million, less the LIFO reserve of $69.7 million, resulted in working capital of $170.0 million and a current ratio of 3.0 to 1.

Previous wording

Cash provided by operating activities was $36.1 million for the six months ended June 27, 2026, compared to $25.9 million for the comparable prior year period. The increase in cash provided in the six months ended June 27, 2026 is primarily attributable to the increase in net income, lower net payouts of accrued employee compensation and benefits, the lesser reduction in accounts payable and accrued expenses, and decreases to deferred income tax assets in the six months ended June 27, 2026, partially offset by a lesser decrease in inventory levels and decreased net collections of trade receivables in the six months ended June 27, 2026.

Current wording

Cash provided by operating activities was $24.2 million for the nine months ended September 26, 2026, compared to $38.8 million for the comparable prior year period. The decrease in the nine months ended September 26, 2026 is primarily attributable to a lesser decrease in inventory levels and decreased net collections of trade receivables in the nine months ended September 26, 2026, that were greater than the increase in net income, lower net payouts of accrued employee compensation and benefits, the lesser reduction in accounts payable and accrued expenses, and decreases to deferred income tax assets in the nine months ended September 26, 2026.

Previous wording

Capital expenditures for the six months ended June 27, 2026 totaled $8.1 million, an increase from $6.7 million in the comparable prior year period. In 2026, the Company expects capital expenditures related to new product introductions and upgrades to its manufacturing equipment and facilities could range from $20 million to $30 million. Actual capital expenditures could vary significantly from the projected amounts due to the timing of capital projects. The Company finances, and intends to continue to finance, all of these activities with funds provided by operations and current cash and cash equivalents.

Current wording

Capital expenditures for the nine months ended September 26, 2026 totaled $8.9 million, a decrease from $27.6 million in the comparable prior year period. In 2026, the Company expects capital expenditures related to new product introductions and upgrades to its manufacturing equipment and facilities could range from $20 million to $30 million. Actual capital expenditures could vary significantly from the projected amounts due to the timing of capital projects. The Company finances, and intends to continue to finance, all of these activities with funds provided by operations and current cash and cash equivalents.

Previous wording

Dividends of $3.0 million were paid during the six months ended June 27, 2026. The Company has financed its dividends with cash provided by operations and current cash. 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

Dividends of $6.4 million were paid during the nine months ended September 26, 2026. The Company has financed its dividends with cash provided by operations and current cash. 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 July 24, 2026, the Company’s Board of Directors authorized a dividend of 21¢ per share to stockholders of record on August 14, 2026, payable on August 28, 2026. This dividend is approximately 40% of adjusted diluted earnings of 52¢ per share for the second quarter of 2026. The payment of future dividends depends on many factors, including internal estimates of future performance, then-current cash and short-term investments, and the Company’s need for funds.

Current wording

On October 30, 2026, the Company’s Board of Directors authorized a dividend of 18¢ per share to stockholders of record on November 20, 2026, payable on December 4, 2026. This dividend is approximately 40% of adjusted diluted earnings of 44¢ per share for the third quarter of 2026. The payment of future dividends depends on many factors, including internal estimates of future performance, then-current cash and short-term investments, and the Company’s need for funds.

Previous wording

As of June 27, 2026, the Company had $40.1 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 June 27, 2026, the Company’s investment in this money market fund totaled $46.7 million.

Current wording

As of September 26, 2026, the Company had $40.9 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 September 26, 2026, the Company’s investment in this money market fund totaled $36.3 million.

Previous wording

During the six months ended June 27, 2026 the Company did not purchase any shares of its common stock for in the open market. As of June 27, 2026, $14.3 million remained authorized for future stock repurchases.

Current wording

During the nine months ended September 26, 2026 the Company did not purchase any shares of its common stock for in the open market. As of September 26, 2026, $14.3 million remained authorized for future stock repurchases.