Filed 2026-03-02 · Period ending 2025-12-31 · 45,651 words · SEC EDGAR
# STURM RUGER & CO INC (RGR) — 10-K
**Filed:** 2026-03-02
**Period ending:** 2025-12-31
**Accession:** 0001174947-26-000243
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/95029/000117494726000243/)
**Origin leaf:** b2a281f834df0effe434bf43d2ffe6e93f32984430566bea033397092a5e0871
**Words:** 45,651
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-K
FOR ANNUAL AND
TRANSITION REPORTS
PURSUANT TO SECTION
13 OR 15(d) THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal
year ended December
31, 2025
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition
period from ____________ to ___________
Commission File
Number 001-10435
STURM,
RUGER & COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
|
Delaware |
06-0633559 | |
|
(State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S.
Employer Identification No.) | |
|
1
Lacey Place, Southport,
Connecticut |
06890 |
|
|
(Address
of Principal Executive Offices) |
(Zip
Code) | |
(203)
259-7843
(Registrants telephone number, including
area code)
Securities registered pursuant to Section
12(b) of the Act:
|
Title
of Each Class |
Trading
Symbol(s) |
Name
of Each Exchange on Which Registered | |
|
Common
Stock, $1 par value |
RGR |
New
York Stock Exchange | |
|
Common
Stock Purchase Rights |
N/A |
New
York Stock Exchange | |
Securities registered pursuant to Section 12(g)
of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. YES
NO
Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act. YES NO
Indicate by check mark whether registrant
(1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or shorter such period of time that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES
NO
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES
NO
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See definition of accelerated filer, large accelerated filer, smaller reporting company, and
emerging growth company in Rule 12b-2 of the Exchange Act. Large
accelerated filer Accelerated
filer Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
If securities are registered pursuant to
Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. YES NO
Indicate by check mark whether any of those
error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants
executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES NO
The aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant computed by reference to the price at which the common equity was last sold, or
the average bid and asked price of such common equity, as of June 30, 2025:
*Common Stock, $1 par value - $582,798,000*
1
The number of shares outstanding of the registrant's
common stock as of February 10, 2026: *Common Stock, $1 par value 15,944,300,
shares*
DOCUMENTS INCORPORATED
BY REFERENCE.
Portions
of the registrants Proxy Statement relating to the 2026 Annual Meeting of Stockholders are incorporated by reference into Part
III (Items 10 through 14) of this Report.
2
TABLE OF CONTENTS
|
PART I | |
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| |
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Item 1. |
Business |
5 | |
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Item 1A. |
Risk Factors |
13 | |
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Item 1B. |
Unresolved Staff Comments |
19 | |
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Item 1C. |
Cybersecurity |
19 | |
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Item 2. |
Properties |
20 | |
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Item 3. |
Legal Proceedings |
21 | |
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Item 4. |
Mine Safety Disclosures |
21 | |
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PART II | |
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| |
|
Item 5. |
Market for Registrants Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities |
22 | |
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Item 6. |
[Reserved] |
24 | |
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Item 7. |
Managements Discussion and Analysis of
Financial Condition and Results of Operations |
25 | |
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Item 7A. |
Quantitative and Qualitative Disclosures About
Market Risk |
47 | |
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Item 8. |
Financial Statements and Supplementary Data |
48 | |
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| |
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Item 9. |
Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure |
85 | |
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Item 9A. |
Controls and Procedures |
85 | |
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Item 9B. |
Other Information |
86 | |
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|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions That
Prevent Inspections |
87 | |
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| |
|
PART III | |
|
|
|
| |
|
Item 10. |
Directors, Executive Officers and Corporate Governance |
88 | |
|
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|
| |
|
Item 11. |
Executive Compensation |
88 | |
|
|
|
| |
|
Item 12. |
Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters |
88 | |
|
|
|
| |
|
Item 13. |
Certain Relationships and Related Transactions
and Director Independence |
89 | |
|
|
|
| |
|
Item 14. |
Principal Accountant Fees and Services |
89 | |
3
|
PART IV | |
|
|
|
| |
|
Item 15. |
Exhibits and Financial Statement Schedules |
90 | |
|
|
|
| |
|
Signatures |
93 | |
|
Exhibit Index |
94 | |
|
Financial Statement Schedule |
97 | |
|
Exhibits |
100 | |
EXPLANATORY NOTE:
In this Annual Report on Form 10-K, Sturm, Ruger
& Company, Inc. and Subsidiaries (the Company) makes forward-looking statements and projections concerning future expectations.
Such statements are based on current expectations and are subject to certain qualifying risks and uncertainties, such as market demand,
sales levels of firearms, anticipated castings sales and earnings, the need for external financing for operations or capital expenditures,
the results of pending litigation against the Company, the impact of future firearms control and environmental legislation, and accounting
estimates, any one or more of which could cause actual results to differ materially from those projected. Words such as expect,
believe, anticipate, intend, estimate, will, should,
could and other words and terms of similar meaning, typically identify such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date made. The Company undertakes no obligation
to publish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made
or to reflect the occurrence of subsequent unanticipated events.
4
PART
I
ITEM
1BUSINESS
Company
Overview
Sturm, Ruger & Company, Inc. and Subsidiaries
(the Company) is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Virtually all
of the Companys sales for the year ended December 31, 2025 were from the firearms segment, with less than 1% from the castings
segment. Export sales represent approximately 5% of firearms sales. The Companys design and manufacturing operations are located
in the United States and almost all product content is domestic.
The Company has been in business since 1949 and was
incorporated in its present form under the laws of Delaware in 1969. The Company primarily offers products in four industry product categories
rifles, pistols, shotguns, and revolvers. The Companys firearms are sold through independent wholesale distributors, principally
to the commercial sporting market.
The Company manufactures and sells investment
castings made from steel alloys and metal injection molding (MIM) parts for internal use in the firearms segment and has
minimal sales to outside customers. The castings and MIM parts are sold to outside customers, either directly or through manufacturers
representatives.
For the years ended December 31, 2025, 2024, and
2023, net sales attributable to the Company's firearms operations were $543.5 million, $532.6 million and $540.7 million. The balance
of the Company's net sales for the aforementioned periods was attributable to its castings operations.
Firearms
Products
The Company presently offers firearm products,
under the Ruger name and trademark, in the following industry categories:
|
Rifles |
Revolvers | |
|
|
Single-shot |
|
Single-action | |
|
|
Autoloading |
|
Double-action | |
|
|
Bolt-action |
|
| |
|
|
Modern sporting |
Shotguns | |
|
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|
|
Over-under | |
|
Pistols |
|
| |
|
|
Rimfire autoloading |
|
| |
|
|
Centerfire autoloading |
|
| |
In addition, the Company offers lever-action rifles
under the Marlin name and trademark and bolt-action rifles under the Glenfield name and trademark.
Most firearms are available in several models
based upon caliber, finish, barrel length, and other features.
5
Rifles
A rifle is a long gun with spiral grooves cut
into the interior of the barrel to give the bullet a stabilizing spin after it leaves the barrel. Net sales of rifles by the Company accounted
for $338.2 million, $310.2 million, and $306.8 million of total net sales for the years 2025, 2024, and 2023, respectively.
Pistols
A pistol is a handgun in which the ammunition
chamber is an integral part of the barrel and which typically is fed ammunition from a magazine contained in the grip. Net sales of pistols
by the Company accounted for $141.9 million, $135.3 million, and $131.4 million of revenues for the years 2025, 2024, and 2023, respectively.
Revolvers
A revolver is a handgun that has a cylinder that
holds the ammunition in a series of chambers which are successively aligned with the barrel of the gun during each firing cycle. There
are two general types of revolvers, single-action and double-action. To fire a single-action revolver, the hammer is pulled back to cock
the gun and align the cylinder before the trigger is pulled. To fire a double-action revolver, a single trigger pull advances the cylinder
and cocks and releases the hammer. Net sales of revolvers by the Company accounted for $39.2 million, $54.8 million, and $72.5 million
of revenues for the years 2025, 2024, and 2023, respectively.
Shotguns
A shotgun is a long gun with a smooth barrel interior
which fires lead or steel pellets. Sales of shotguns by the Company accounted for approximately $0.1 million of revenues for 2025. Shotgun
sales were de minimis for 2024 and 2023.
Accessories
The Company also manufactures and sells accessories
and replacement parts for its firearms. These sales accounted for $27.4 million, $33.3 million, and $30.0 million of total net sales for
the years 2025, 2024, and 2023, respectively.
Castings
Products
Net sales attributable to the Companys
casting operations (excluding intercompany transactions) accounted for $2.6 million, $3.0 million, and $3.0 million, for 2025, 2024, and
2023, respectively. These sales represented less than 1% of total net sales in each year.
Manufacturing
Firearms
The Company produces some of its pistol models,
most of its revolvers, and some of its rifle models at the Newport, New Hampshire facility. One model of revolver, one model of rifle,
and most of the Companys pistols are produced at the Prescott, Arizona facility. Some rifle models and pistol models are produced
at the Mayodan, North Carolina facility. Some rifle models are manufactured at the Hebron, Kentucky facility, which was acquired in July
2025.
6
Many of the basic metal component parts of the
firearms manufactured by the Company are produced by the Company's castings segment through precision investment casting and metal injection
molding. See "Manufacturing- Investment Castings and Metal Injected Moldings" below for a description of these processes. The Company
believes that investment castings and MIM parts provide greater design flexibility and result in component parts which are generally close
to their ultimate shape and, therefore, require less machining than processes requiring machining a solid billet of metal to obtain a
part. Through the use of investment castings and MIM parts, the Company endeavors to produce durable and less costly component parts for
its firearms.
All assembly, inspection, and testing of firearms
manufactured by the Company are performed at the Company's manufacturing facilities. Every firearm, including every chamber of every revolver
manufactured by the Company, is test-fired prior to shipment.
Investment
Castings and Metal Injection Moldings
To produce a product by the investment casting
method, a wax model of the part is created and coated (invested) with several layers of ceramic material. The shell is then
heated to melt the interior wax, which is poured off, leaving a hollow mold. To cast the desired part, molten metal is poured into the
mold and allowed to cool and solidify. The mold is then broken off to reveal a near net shape cast metal part.
Metal injection molding is a three part powder
metallurgy process by which a feedstock consisting of finely powdered metal and binders is processed through injection molding, debinding,
and sintering equipment to produce steel, stainless steel, and alloy parts of complex shape and geometry. This process allows for
high volume production while eliminating many of the wastes of traditional metal working methods, yielding net shape and near net shape
parts.
Marketing
and Distribution
Firearms
The Company's firearms are primarily marketed
through a network of federally licensed, independent wholesale distributors who purchase the products directly from the Company. They
resell to federally licensed, independent retail firearms dealers who in turn resell to legally authorized end users. All retail purchasers
are subject to a point-of-sale background check by law enforcement. These end users include sportsmen, hunters, people interested in self-defense,
law enforcement and other governmental organizations, and gun collectors. Each domestic distributor carries the entire line of firearms
manufactured by the Company for the commercial market. Currently, 13 distributors service the domestic commercial market, with an additional
26 distributors servicing the domestic law enforcement market and 44 distributors servicing the export market.
In 2025, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys 27%; Sports South - 22%; and Davidsons
- 18%.
In 2024, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys 28%; Sports South - 18%; and Davidsons
- 16%.
7
In 2023, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys 24%; Davidsons - 19%; and Sports South
- 15%.
The Company employs 18 employees who service these
distributors and call on retailers and law enforcement agencies. Because the ultimate demand for the Company's firearms comes from end
users rather than from the independent wholesale distributors, the Company believes that the loss of any distributor would not have a
material, long-term adverse effect on the Company, but may have a material adverse effect on the Companys financial results for
a particular period. The Company considers its relationships with its distributors to be satisfactory.
The Company also exports its firearms through
a network of selected commercial distributors and directly to certain foreign customers, consisting primarily of law enforcement agencies
and foreign governments. Foreign sales were 5%, 5%, and 6% of the Companys consolidated net sales for 2025, 2024, and 2023, respectively.
Investment
Castings and Metal Injection Moldings
The castings segment provides castings and MIM
parts for the Companys firearms segment. In addition, the castings segment produces some products for a number of customers in
a variety of industries.
Competition
Firearms
Competition in the firearms industry is intense
and comes from both foreign and domestic manufacturers. While some of these competitors concentrate on a single industry product category
such as rifles or pistols, many competitors manufacture products in two or three of the four categories (rifles, shotguns, pistols, and
revolvers) and a few competitors manufacture products in all four categories. The principal methods of competition in the industry are
product innovation, quality, availability, brand, and price. The Company believes that it can compete effectively with all of its present
competitors.
Investment
Castings and Metal Injection Moldings
There are a large number of investment castings
and MIM manufacturers, both domestic and foreign, with which the Company competes. Competition varies by product type and end use. Companies
offering alternative manufacturing methods, such as wire electric discharge machining (EDM) and computer numeric controlled (CNC) machining,
also compete with the Companys castings segment. Many of these competitors are larger corporations than the Company and have substantially
greater financial resources, which could affect the Companys ability to compete with them. The principal methods of competition
in the industry are quality, price, and production lead time.
Human
Capital
The Company
is an equal opportunity employer dedicated to the attraction, development, and retention of our employees by providing a preferred work
environment that promotes and
8
celebrates
our core values of Integrity, Respect, Innovation and Teamwork. Our goal is to develop, motivate, retain and reward passionate and dedicated
employees.
As of February 9, 2026, the Company employed approximately
1,780 full-time employees, approximately 30% of whom had at least ten years of service with the Company.
The Company attracts candidates and retains employees
by offering competitive compensation packages, which include:
|
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Base wages, | |
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Profit sharing, | |
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Medical and welfare benefits, | |
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Holidays and other paid time off, and | |
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401(k) plan participation and matching program. | |
The Company believes its compensation
packages:
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|
Provide a base level of compensation to reflect an individuals role and responsibilities, | |
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Recognize and reward employees for the Companys success, and | |
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Provide for the safety, security and well-being of employees. | |
Our primary vehicle for human capital development
is Ruger University, which has a mission to:
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Enhance the understanding of our industry, Company
and culture, | |
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Strengthen the technical, interpersonal and leadership
skills of each employee, and | |
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Allow employees to positively change their own lives
while creating value for all Ruger stakeholders. | |
In addition to providing a competitive compensation
package and emphasizing the development of employees, the Company retains its employees by maintaining a safe, responsible, and preferred
workplace. The Company is committed to conducting business in conformance with the highest ethical standards and in compliance with all
applicable legal and regulatory requirements. The Code of Business Conduct and Ethics and the Corporate Compliance
Program are two active programs that guide the Companys practices to achieve these goals.
Research
and Development
In 2025, 2024, and 2023, the Company spent approximately
$8.4 million, $8.2 million, and $9.8 million, respectively, on research and development activities relating to new products and the improvement
of existing products. Research and development expenses are included in costs of products sold. As of February 21, 2026, the Company had
approximately 55 employees whose primary responsibilities were research and development activities.
9
Patents
and Trademarks
The Company owns various United States and foreign
patents and trademarks which have been secured over a period of years and which expire at various times. It is the policy of the Company
to apply for patents and trademarks whenever new products or processes deemed commercially valuable are developed or marketed by the Company.
The Company deems its patents and trademarks to be valuable and therefore works to police and protect them.
Environmental
Matters
The Company is committed to achieving high standards
of environmental quality and product safety, and strives to provide a safe and healthy workplace for its employees and others in the communities
in which it operates. The Company has programs in place that monitor compliance with various environmental regulations. However, in the
normal course of its manufacturing operations the Company is subject to governmental proceedings and orders pertaining to waste disposal,
air emissions, and water discharges into the environment. These regulations are integrated into the Companys manufacturing, assembly,
and testing processes. The Company believes that it is generally in compliance with applicable environmental regulations and that the
outcome of any environmental proceedings and orders will not have a material adverse effect on the financial position of the Company,
but could have a material adverse effect on the financial results for a particular period.
Information
about our Executive Officers
Set forth below are the names, ages, and positions
of the executive officers of the Company. Officers serve at the discretion of the Board of Directors of the Company.
|
Name |
Age |
Position
With Company | |
|
|
|
| |
|
Christopher J. Killoy |
67 |
President and Chief Executive Officer
(until March 1, 2025) | |
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Todd W. Seyfert |
56 |
President and Chief Executive Officer
(effective March 1, 2025) | |
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Thomas A. Dineen |
57 |
Senior Vice President, Treasurer,
and Chief Financial Officer | |
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Kevin B. Reid, Sr. |
65 |
Vice President, General Counsel,
and Corporate Secretary (until May 29, 2025) | |
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Sarah F. Colbert |
45 |
Senior Vice President, Corporate
Secretary and General Counsel (effective May 29, 2025) | |
|
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Shawn C. Leska |
54 |
Senior Vice President of Sales and
Product Strategy | |
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| |
|
Michael W. Wilson |
49 |
Senior Vice President of Operations
and Engineering | |
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Robert J. Werkmeister, Jr. |
51 |
Senior Vice President of Marketing
and Customer Experience | |
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| |
|
Benjamin P. Quinn |
36 |
Senior Vice President of Strategy
and Business Development | |
|
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| |
|
Timothy M. Lowney |
62 |
Vice President of Manufacturing
Operations (until September 30, 2025) | |
10
Christopher J. Killoy became President & Chief
Executive Officer on May 9, 2017. Previously he served as President and Chief Operating Officer since January 1, 2014. Prior to that he
served as Vice President of Sales and Marketing since November 27, 2006. Mr. Killoy originally joined the Company in 2003 as Executive
Director of Sales and Marketing, and subsequently served as Vice President of Sales and Marketing from November 1, 2004 to January 25,
2005. Mr. Killoy stepped down as President & Chief Executive Officer on March 1, 2025 and served as a Special Advisor through his
planned retirement from the Company in May 2025. Mr. Killoy currently serves on the Companys Board of Directors.
Todd W. Seyfert became President & Chief Executive
Officer on March 1, 2025. Previously, Mr. Seyfert served as the President of Segment Land Vehicles Americas at Dometic Group AB since
January 2024. Prior to that Mr. Seyfert served as the Chief Executive Officer of FeraDyne Outdoors, LLC, a leading manufacturer of premium
archery and hunting products from February 2016 through May 2023.
Thomas A. Dineen became Senior Vice President
on July 10, 2017. Previously he served as Vice President since May 24, 2006. Prior to that he served as Treasurer and Chief Financial
Officer since May 6, 2003 and had been Assistant Controller since 2001. Mr. Dineen joined the Company as Manager, Corporate Accounting
in 1997.
Kevin B. Reid, Sr. became Vice President and General
Counsel on April 23, 2008. Previously he served as the Companys Director of Marketing from June 4, 2007. Mr. Reid joined the Company
in July 2001 as an Assistant General Counsel. Mr. Reid stepped down as General Counsel, and Corporate Secretary as of May 29, 2025 and
as Vice President on June 30, 2025 and will serve as Senior Counsel to the Company until his planned retirement from the Company on June
30, 2026.
Sarah F. Colbert became Senior Vice President, Corporate
Secretary and General Counsel on February 11, 2026 after previously being appointed Vice President, Corporate Secretary, and General Counsel
on May 29, 2025. She previously served as Vice President of Administration since June 1, 2017. Ms. Colbert has served the Company in various
human resource and legal capacities since joining the Company in 2011.
Shawn C. Leska became Senior Vice President of Sales
and Product Strategy on February 11, 2026. Previously, he served as Vice President of Sales and Product Strategy since July 16, 2025 and
Vice President, Sales since November 6, 2015. Mr. Leska joined the Company in 1989 and has served in a variety of positions in the sales
department. Most recently, Mr. Leska served as Director of Sales since 2011.
Michael W. Wilson became Senior Vice President of
Operations and Engineering on February 11, 2026. Previously, he served as Vice President of New Product Development since May 21, 2025,
11
Vice President of Operations and Engineering since
April 1, 2024 and Vice President of Operations for New Product Development, Product Engineering and Mayodan Manufacturing since June 15,
2023. Mr. Wilson joined the Company in July 2007.
Robert J. Werkmeister, Jr. became Senior Vice President
of Marketing and Customer Experience on February 11, 2026. Mr. Werkmeister had served as the Companys Vice President of Marketing
and Customer Experience since July 11, 2025, Vice President of Marketing since joining the Company on June 1, 2017 and Director of Marketing
since January 2013 as President and founder of Symbolic, Inc., a full-service marketing agency. While with Symbolic, Rob began working
with Ruger as a client in 2002 and has been the primary strategic marketing driver for Ruger since 2007.
Benjamin P. Quinn was named Senior Vice President
of Strategy and Business Development on February 11, 2026 after recently being appointed Vice President of Strategy and Business Development
on April 14, 2025.Before joining Ruger, Mr. Quinn held high-impact roles at organizations such as United Airlines, Strategy&
(PwC's global strategy consulting business), and most recently, as Director of Strategic Initiatives at Dometic Corporation.
Where
You Can Find More Information
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the Exchange Act), and accordingly, files its Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K, and other information with the Securities
and Exchange Commission (the SEC). As an electronic filer, the Company's public filings are maintained on the SEC's website
that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The address of that website is http://www.sec.gov.
The Company makes its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Exchange Act accessible free of charge through the Company's website after the Company has electronically
filed such material with, or furnished it to, the SEC. The address of that website is http://www.ruger.com. However, such reports may
not be accessible through the Company's website as promptly as they are accessible on the SECs website.
Additionally, the Companys corporate governance
materials, including its Corporate Governance Guidelines, the charters of the Audit, Compensation, and Nominating and Corporate Governance
committees, and the Code of Business Conduct and Ethics may also be found under the Investor Relations subsection of the
Corporate section of the Companys website at http://www.ruger.com/corporate. A copy of the foregoing corporate governance
materials is
12
available upon written request to the Corporate
Secretary at Sturm, Ruger & Company, Inc., 1 Lacey Place, Southport, Connecticut 06890.
ITEM
1ARISK FACTORS
The Companys operations could be affected
by various risks, many of which are beyond its control. Based on current information, the Company believes that the following identifies
the most significant risk factors that could have a material, adverse effect on its business, operating results, and financial condition.
Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate
results or trends in future periods.
In evaluating the Companys business, the
following risk factors, as well as other information in this report, should be carefully considered.
Changes in government
policies and firearms legislation could adversely affect the Companys financial results.
The sale, purchase, ownership, and use of firearms
are subject to thousands of federal, state and local governmental regulations. The basic federal laws are the National Firearms Act, the
Federal Firearms Act, and the Gun Control Act of 1968. Federal law generally prohibits the private ownership of fully automatic weapons
manufactured after 1986 and places certain restrictions on the interstate sale of firearms unless certain licenses are obtained. The Company
does not manufacture fully automatic weapons and holds all necessary licenses under these federal laws. If the scope of the National Firearms
Act is expanded to regulate firearms currently regulated by the Gun Control Act, it could make acquisition of commonly owned and used
firearms more expensive and complicated for consumers, which could have a material adverse impact on demand for Company products. Several
states currently have laws in effect similar to the aforementioned legislation.
In 2005, Congress enacted the Protection of Lawful
Commerce in Arms Act (PLCAA). The PLCAA was enacted to address abuses by cities and agenda-driven individuals who wrongly
sought to make firearms manufacturers liable for legally manufactured and lawfully sold products if those products were later used in
criminal acts. The Company believes the PLCAA merely codifies common sense and long standing tort principles. Several state legislatures
have recently enacted laws specifically designed to circumvent the PLCAA. These laws define a firearm industry members failure
to implement undefined reasonable controls to prevent criminal misuse of firearms as a public nuisance. This type of law
is novel and untested, but if successfully used against the Company, could have a material adverse impact on the Company. If the PLCAA
is repealed or continuing efforts to circumvent it are successful and lawsuits similar to those filed by cities and agenda-driven individuals
in the late 1990s and early 2000s are allowed to proceed, it could have a material adverse impact on the Company.
Currently, federal and several states legislatures
are considering additional legislation relating to the regulation of firearms, and a number of new laws have been enacted at the federal,
state, and local level. Enacted legislation and proposed bills are numerous and extremely varied, but many seek to limit magazine capacity,
restrict or ban the sale and, in some cases, the ownership of various
13
types of firearms, or ban commonly owned firearms
with certain features. Other legislation seeks to require new technologies, such as microstamping and so-called smart gun
technology, which are not proven, reliable or feasible.
The Company believes that the lawful private ownership
of firearms is guaranteed by the Second Amendment to the United States Constitution and that the widespread private ownership of firearms
in the United States will continue. However, there can be no assurance that the regulation of firearms will not become more restrictive
in the future and that any such restriction would not have a material adverse effect on the business of the Company. Numerous bills regulating
the ownership of firearms have been proposed at the state and federal levels, and these bills propose a wide variety of restrictions including,
for example, limiting the number of firearms that may be purchased in a specified time, increasing the age for ownership, imposing additional
licensing or registration requirements, creating additional restrictions on certain, common firearm features, and levying new taxes on
firearms and/or ammunition.
The Companys
results of operations could be further adversely affected if legislation with diverse requirements is enacted.
With literally thousands of laws being proposed
at the federal, state and local levels, if even a small percentage of these laws are enacted and they are incongruent, the Company could
find it difficult, expensive or even practically impossible to comply with them, impeding new product development and distribution of
existing products.
The Companys results of operations
could be adversely affected by litigation.
The Company faces risks arising from various asserted
and unasserted litigation matters. These matters include, but are not limited to, assertions of allegedly defective product design or
manufacture, alleged failure to warn, claimed unfair trade practices, purported class actions against firearms manufacturers, generally
seeking relief such as medical expense reimbursement, property damages, and punitive damages arising from accidents involving firearms
or the criminal misuse of firearms, and those lawsuits filed on behalf of municipalities alleging harm to the general public. Various
factors or developments can lead to changes in current estimates of liabilities such as final adverse judgment, significant settlement
or changes in applicable law. A future adverse outcome in any one or more of these matters could have a material adverse effect on the
Companys financial results. See Note 20 to the financial statements which are included in this Annual Report on Form 10-K.
The Company relies
upon relationships with financial institutions.
The Company utilizes the services of numerous
financial institutions, including banks, insurance carriers, transfer agents, and others. Anti-gun politicians, gun-control activists,
and others may target these institutions and attempt to pressure them into ceasing to do business with the Company, or to use financial
relationships to impose unacceptable and improper restrictions on the Companys business, which could have a material adverse impact
on the Companys business, operating results, and financial condition. The potential volatility of these relationships may also
impact the Companys decision making regarding the appropriate allocation of capital to be used for activities such as internal
investment, share repurchases, and potential acquisitions.
14
The Companys insurance may
be insufficient to protect us from claims or losses.
The Company maintains insurance coverage with
third-party insurers and through a wholly-owned captive insurance company with respect to product liability claims, which the Company
established in 2024. However, not every risk or liability is or can be protected by insurance, and, for those risks it insures, the limits
of coverage it purchases, or that are reasonably obtainable in the market, or the funding level of the Companys wholly-owned captive
insurance company may not be sufficient to cover all actual losses or liabilities incurred. Moreover, there is a risk that commercially
available liability insurance will not continue to be available to the Company at a reasonable cost, if at all. If liability claims or
losses exceed the Companys current or available insurance coverage, its business may be harmed.
The Companys
results of operations could be adversely affected by a decrease in demand for Company products.
If demand for the Companys products decreases
significantly, the Company would be unable to efficiently utilize its capacity, and profitability would suffer. Decreased demand could
result from a macroeconomic downturn, or could be specific to the Company and/or the firearms industry as a result of social, political,
or other factors. If the decrease in demand occurs abruptly, the adverse impact would be even greater.
The financial health of the Companys
independent distributors is critical to its success.
Over 90% of the Companys sales are made
to 13 federally licensed, independent wholesale distributors. The Company reviews its distributors financial statements and has
credit insurance for many of them. However, the Companys credit evaluations of distributors and credit insurance may not be completely
effective, especially if higher interest rates continue to exact a financial strain. If one or more independent distributors experience
financial distress or liquidity issues, the Companys sales could be adversely affected and the Company may not be able to collect
its accounts receivable on a timely basis, which would have an adverse impact on its operating results and financial condition.
The Company must
comply with various laws and regulations pertaining to workplace safety and environment, environmental matters, and firearms manufacturing.
In the normal course of its manufacturing operations,
the Company is subject to numerous federal, state and local laws and governmental regulations, and governmental proceedings and orders.
These laws and regulations pertain to matters like workplace safety and environment, firearms serial number tracking and control, waste
disposal, air emissions and water discharges into the environment. Noncompliance with any one or more of these laws and regulations could
have a material adverse impact on the Company.
Misconduct of
the Companys employees or contractors could cause the Company to lose customers and could have a significant adverse impact on
its business and reputation.
Misconduct, fraud or other improper activities
by the Companys employees or contractors could have a material adverse impact on its business and reputation. Such misconduct could
include the failure to comply with federal, state, local or foreign government procurement regulations, regulations regarding the protection
of personal information, laws and regulations relating to antitrust and any other applicable laws or regulations.
15
Product quality
and performance is important to the Companys success.
The Company has a long
history of producing rugged, reliable firearms for the commercial market. While the Company believes its record of designing, manufacturing,
and selling high-quality products demonstrates its commitment to safety and quality, the Company has occasionally identified design and/or
manufacturing issues with respect to some firearms and, as a result, issued a product safety bulletin or initiated a product recall. Depending
upon the volume of products the Company has shipped into the market, any future recall or safety bulletin could harm its reputation, cause
the Company to lose business, and cause the Company to incur significant support and repair costs.
The ability
to develop and produce new products is important to the Companys success.
The Company has a long
history of designing, engineering, and manufacturing innovative new products. These new products help to drive growth, excitement, and
profitability and have historically allowed the Company to refrain from having to extend some of the aggressive promotions, discounts,
rebates, and the extension of payment terms offered by its competitors. While the Company believes it has a strong record of designing,
manufacturing, and selling new, high-quality products, failure to continue to do so in the future could harm its reputation, cause the
Company to lose business, and cause the Company to incur significant promotional costs, which would have an adverse impact on its operating
results and financial condition.
The Company may be impacted by the
actions of its competitors.
The Company remains focused on the long-term goal
of creating shareholder value. Its disciplined pricing and promotion strategy may not always benefit current period sales and profitability,
but endeavors to enhance its long-term performance and promote consistency throughout the distribution channel. Allowing both independent
distributors and retailers to confidently invest in its inventory is essential to the Companys long-term success and leadership
in the volatile firearms market. However, the aggressive promotions, discounts, rebates, and the extension of payment terms offered by
its competitors could negatively impact the Companys market share, which would have an adverse impact on its operating results
and financial condition.
Business disruptions
at one of the Companys manufacturing facilities could adversely affect the Companys financial results.
The Newport, New Hampshire, Prescott, Arizona,
Mayodan, North Carolina, Hebron, Kentucky, and Earth City, Missouri facilities are critical to the Companys success. These facilities
house the Companys principal production, research, development, engineering, design, and shipping operations. Any event that causes
a disruption of the operation of any of these facilities for even a relatively short period of time could have a material adverse effect
on the Companys ability to produce and ship products and to provide service to its customers.
The Company relies
on its information and communications systems in its operations. Security breaches and other disruptions could adversely affect its business
and results of operations.
Cybersecurity threats are significant and evolving
and include, among others, malicious software, attempts to gain unauthorized access to data, ransomware, social engineering technologies
and other electronic security breaches that could lead to disruptions in mission critical systems, unauthorized release of confidential
or otherwise protected information and corruption of data. In
16
addition to security threats, the Company is also
subject to other systems failures, including network, software or hardware failures, whether caused by the Company, third-party service
providers, cloud platforms, software vendors, vulnerabilities, natural disasters, power shortages, terrorist attacks or other events.
The unavailability of the Companys information or communications systems, the failure of these systems to perform as anticipated
or any significant breach of data security could cause loss of data, disrupt Company operations, lead to financial losses from remedial
actions, require significant management attention and resources, expose the Company to legal claims, regulatory investigations, penalties,
compliance costs, and negatively impact the Companys reputation among its customers and the public, which could have a negative
impact on the Companys financial condition, results of operations and liquidity.
The lack of available
raw materials or component parts could disrupt or even cease the Companys manufacturing operations. Even if manufacturing operations
are not disrupted, increased costs of raw materials and component parts could adversely affect the Companys financial results.
Third parties supply the Company with various
raw materials for its firearms and castings, such as fabricated steel components, walnut, birch, beech, maple and laminated lumber for
rifle stocks, wax, ceramic material, metal alloys, various synthetic products and other component parts. There is a limited supply of
these materials in the marketplace at any given time, which can cause the purchase prices to vary based upon numerous market factors.
If market conditions result in a significant prolonged inflation of certain prices or if adequate quantities of raw materials cannot be
obtained, the Companys manufacturing processes could be interrupted and the Companys financial condition or results of operations
could be materially adversely affected.
The
Company relies primarily on third parties for transportation of the products it manufactures as well as delivery of its raw materials.
Any increase in the cost
of the transportation of the Companys raw materials or products, as a result of increases in fuel or labor costs, higher demand
for logistics services, consolidation in the transportation industry or otherwise, increased restrictions on the transportation of firearms,
may adversely affect its results of operations. If any of these providers were to fail to deliver raw materials to the Company in a timely
manner, the Company may be unable to manufacture and deliver its products in a timely manner. In addition, if any of these third parties
were to cease operations or cease doing business with the Company, the Company may be unable to replace them at a reasonable cost. And
such failure of a third-party transportation provider could harm the Companys reputation, negatively affect its customer relationships
and have a material adverse effect on its financial position and results of operations.
Availability
and retention of the Companys labor force, especially its key management, is critical to the success of the Company.
The
Company has observed an overall tightening and increasingly competitive labor market, which could inhibit its ability to recruit
and retain the employees it requires and could lead to increased costs, such as additional overtime to meet demand and increased wages
and benefits to attract and retain employees. The Company relies on the knowledge, experience, and leadership skills of its senior management
team. The Companys senior executives are generally not bound by employment agreements. The loss of the services of one or more
of the Companys senior executives or other key personnel could have a significant adverse impact on its business.
17
The Companys business may be adversely
affected by tariffs, trade sanctions or similar government actions.
The actual or threatened imposition of tariffs, sanctions
or other restrictions on goods exported from the United States or imported into the United States, or countermeasures imposed in response
to such government actions, could increase the Companys cost of products sold or reduce its ability to sell products globally,
which may adversely affect its operating results and financial condition. While the Company sources the majority of its materials domestically,
the imposition of tariffs could lead to increased demand and pricing on domestic materials, which could result in an increase to the Companys
cost of products sold and a reduction in its gross margin. So far, these new tariffs and trade policies have not had a significant impact
on the Companys business operations and financial results. However, there is no guarantee that the Company can avoid the impact
of tariff and related economic effects in the future, and these trade measures and retaliations may directly impair its business by increasing
trade-related costs or disrupting established supply chains.
The Companys
Rights Plan could discourage, delay, or prevent a change in control over us and may affect the trading price of our Common Stock.
On October 14, 2025, the Companys Board
of Directors approved the adoption of the Rights Plan and authorized and declared a dividend of one common stock purchase right (a Right)
for each share of Common Stock outstanding at the close of business on October 24, 2025 and that may become outstanding between such date
and the Distribution Date (as defined in the Rights Plan) or the earlier Expiration Date (as defined in the Rights Plan). If the Rights
become exercisable, all holders of Rights (other than the person or group triggering the Rights Plan, whose Rights would become void)
will be entitled to acquire shares of Common Stock at a 50% discount to the then-current market price or the Company may exchange each
Right held by such holders for one share of Common Stock. The Rights Plan may discourage, delay, or prevent a change of control or acquisition
of the Company, even if such action may be considered beneficial by some stockholders of the Company, and could limit the price that investors
would be willing to pay in the future for the Companys Common Stock. The foregoing summary of the Rights Plan is qualified in its
entirety by the Rights Plan.
The Companys
business could be negatively affected as a result of actions of activist stockholders, and such activism could adversely affect the strategic
direction and business results of the Company.
Publicly traded companies are increasingly subject
to activist stockholders advocating corporate actions such as operational, governance, management or social changes, financial restructurings,
increased borrowings, special dividends, stock repurchases, or sales of assets or entire companies to third parties or to the activist
stockholders themselves. The Company has been and may continue to be subject to actions from activist stockholders or others that may
not align with its business strategies or may not be in the best interests of all of its stockholders. Actions taken by the Companys
Board of Directors and management in seeking to maintain constructive engagement with certain stockholders may not be successful to prevent
the occurrence of stockholder activist campaigns or changes that adversely affect the strategic direction or business results of the Company.
18
ITEM
1BUNRESOLVED STAFF COMMENTS
None
ITEM
1CCYBERSECURITY
Risk
management and strategy
The Company
has processes for assessing, identifying, and managing material risks from cybersecurity threats. These
processes are integrated
into the Companys overall risk management systems, as overseen by the Companys Board of Directors. These
processes also include overseeing and identifying risks from cybersecurity threats associated with the use of third-party service providers.
The Company conducts security assessments of certain third-party providers before engagement and has established monitoring procedures
in its effort to mitigate risks related to data breaches or other security incidents originating from third
parties. The Company from time to time engages third-party consultants, legal advisors, and audit firms in evaluating
and testing the Companys risk management systems and assessing and remediating certain potential cybersecurity incidents as appropriate.
The Company
has an Information Security Program (Program) to protect personal and proprietary information in compliance with applicable
federal and state requirements. The Program is designed to:
|
|
Ensure the security and confidentiality of employee and customer personal
information and Company proprietary information; | |
|
|
Protect against anticipated threats or hazards to the security or integrity
of such information; and | |
|
|
Protect against unauthorized access to, use of, or transfer of such
information in a manner that could harm or inconvenience the Company, employees or customers. | |
For more
information about these risks, see the risk factor titled The Company relies on its information and communications systems in its
operations. Security breaches and other disruptions could adversely affect its business and results of operations under Item 1A.
Governance
The Board recognizes
that oversight of risk management is an important function and, for that reason, created the Risk Oversight Committee in 2010. Since that
time, the Board has received regular reports from the Risk Oversight Committee and senior management in areas of material risk to the
Company, including operational, financial, legal and regulatory, strategic, reputational and industry-related risks. The Risk Oversight
Committee and the full Board reviewed and discussed these reports with the goal of overseeing the identification and management of, and
the development of mitigation strategies for, these risks.
As part of its ongoing
evaluation of Board efficacy and structure, the Board carefully considered this model for evaluating and managing risk. Among other things,
the Board observed that, typically, the entire Board was present for meetings of the Risk Oversight Committee and
19
participated in risk
discussions, rendering further discussions at Board meetings largely redundant. Accordingly, the
Board decided to dissolve the Risk Oversight Committee and since then, the Board holds these discussions with management in connection
with regular Board meetings with the continued goal of overseeing the identification and management of, and the development of mitigation
strategies for, these risks. The Board believes that this approach promotes efficiency and helps ensure participation
by all Directors. The
Companys Board of Directors regularly receives reports from management, including senior information technology (IT)
leadership, and third parties on cybersecurity matters as part of the Companys overall enterprise risk management program.
Senior IT leaders are
responsible for developing appropriate cybersecurity programs, including as may be required by applicable law or regulation. These
individuals expertise in IT and cybersecurity generally has been gained from a combination of education, including relevant degrees
and/or certifications, and work experience. They are informed by their respective cybersecurity teams about, and monitor,
the prevention, detection, mitigation and remediation of cybersecurity incidents as part of the cybersecurity programs described above.
Information
regarding cybersecurity risks may be elevated by IT leadership through a variety of channels, including discussions between or among key
leaders and Company management and reports to the Companys Board of Directors and/or certain Board
committees.
ITEM
2PROPERTIES
The Companys manufacturing operations are
carried out at five facilities. The following table sets forth certain information regarding each of these facilities:
|
|
|
Approximate Aggregate Usable
Square Feet |
Status |
|
Segment | |
|
|
|
|
|
|
|
| |
|
Newport, New Hampshire |
|
350,000 |
|
Owned |
|
Firearms/Castings | |
|
|
|
|
|
|
|
| |
|
Prescott, Arizona |
|
230,000 |
|
Leased |
|
Firearms | |
|
|
|
|
|
|
|
| |
|
Mayodan, North Carolina |
|
220,000 |
|
Owned |
|
Firearms | |
|
|
|
|
|
|
|
| |
|
Hebron, Kentucky |
|
65,000 |
|
Owned |
|
Firearms | |
|
|
|
|
|
|
|
| |
|
Earth City, Missouri |
|
35,000 |
|
Leased |
|
Castings | |
Each firearms facility contains enclosed ranges
for testing firearms. The lease of the Prescott facility provides for rental payments which are approximately equivalent to estimated
rates for real property taxes.
20
The Company has other facilities that were not
used in its manufacturing operations in 2025:
|
|
|
Approximate Aggregate Usable
Square Feet |
Status |
|
Segment | |
|
|
|
|
|
|
|
| |
|
Southport, Connecticut |
|
25,000 |
|
Owned |
|
Corporate | |
|
|
|
|
|
|
|
| |
|
Newport, New Hampshire (Dorr Woolen Building) |
|
45,000 |
|
Owned |
|
Firearms | |
|
|
|
|
|
|
|
| |
|
Enfield, Connecticut |
|
10,000 |
|
Leased |
|
Firearms | |
|
|
|
|
|
|
|
| |
|
Mayodan, North Carolina |
|
225,000 |
|
Owned |
|
Firearms | |
There are no mortgages or any other major encumbrance
on any of the real estate owned by the Company.
The Companys principal executive offices
are located in Southport, Connecticut.
ITEM
3LEGAL PROCEEDINGS
The nature of the legal proceedings against the
Company is discussed at Note 20 to the financial statements, which are included in this Form 10-K.
The Company has reported all cases instituted
against it through September 27, 2025, and the results of those cases, where terminated, to the SEC on its previous Form 10-Q and 10-K
reports, to which reference is hereby made.
There was one lawsuit formally instituted against
the Company during the three months ending December 31, 2025. *Thorne v. Sturm, Ruger & Company, Inc.*was served on November
13, 2025 and is pending in the District Court of the Fifth Judicial District of the State of Idaho, In and For the County of Twin Falls.
During the three months ending December 31, 2025,
the previously reported case of *Jones v. Sturm, Ruger & Company, Inc.*was dismissed by the trial court following confirmation
of a settlement. In addition, the previously reported case of *Willeford v. Sturm, Ruger & Company* was also dismissed.
ITEM
4MINE SAFETY DISCLOSURES NOT APPLICABLE
21
PART
II
ITEM
5MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
The Companys common stock is traded on
the New York Stock Exchange under the symbol RGR. At February 13, 2026, the Company had 1,745 stockholders of record.
Issuer
Repurchase of Equity Securities
In 2023, 2024 and 2025 the Company repurchased
shares of its common stock. Details of the purchases in 2023, 2024 and 2025 follow:
|
Period |
|
Total Number of Shares
Purchased |
|
Average Price Paid per Share |
|
Total Number of Shares
Purchased as Part of Publicly Announced Program |
|
Maximum Dollar Value of
Shares that May Yet Be Purchased Under the Program | |
|
|
|
|
|
|
|
|
|
| |
|
Fourth Quarter 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
October 1 to October 28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
October 29 to November 25 |
|
|
179,341 |
|
|
$ |
45.20 |
|
|
|
179,341 |
|
|
|
| |
|
November 26 to December 31 |
|
|
84,721 |
|
|
$ |
43.67 |
|
|
|
84,721 |
|
|
|
|
| |
|
First Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
January 1 to January 27 |
|
|
7,317 |
|
|
$ |
43.42 |
|
|
|
7,317 |
|
|
|
|
| |
|
January 28 to February 24 |
|
|
20,307 |
|
|
$ |
42.93 |
|
|
|
20,307 |
|
|
|
|
| |
|
February 25 to March 30 |
|
|
47,400 |
|
|
$ |
42.79 |
|
|
|
47,400 |
|
|
|
|
| |
|
Second Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
March 31 to April 27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
April 28 to May 25 |
|
|
28,924 |
|
|
$ |
42.92 |
|
|
|
28,924 |
|
|
|
|
| |
|
May 26 to June 29 |
|
|
373,969 |
|
|
$ |
42.27 |
|
|
|
373,969 |
|
|
|
|
| |
22
|
Third Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30 to July 27 |
|
|
156,517 |
|
|
$ |
41.27 |
|
|
|
156,517 |
|
|
|
|
| |
|
July 28 to August 24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
August 25 to September 28 |
|
|
64,325 |
|
|
$ |
40.66 |
|
|
|
64,325 |
|
|
|
|
| |
|
Fourth Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 29 to October 26 |
|
|
11,340 |
|
|
$ |
40.50 |
|
|
|
11,340 |
|
|
|
|
| |
|
October 27 to November 23 |
|
|
52,129 |
|
|
$ |
39.50 |
|
|
|
52,129 |
|
|
|
|
| |
|
November 23 to December 31 |
|
|
72,832 |
|
|
$ |
34.81 |
|
|
|
72,832 |
|
|
|
|
| |
|
First Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
January 1 to January 25 |
|
|
28,720 |
|
|
$ |
34.44 |
|
|
|
28,720 |
|
|
|
|
| |
|
January 26 to February 22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
February 23 to March 29 |
|
|
50,480 |
|
|
$ |
39.62 |
|
|
|
50,480 |
|
|
|
|
| |
|
Second Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
March 30 to April 26 |
|
|
99,951 |
|
|
$ |
37.98 |
|
|
|
99,951 |
|
|
|
|
| |
|
April 27 to May 24 |
|
|
171,061 |
|
|
$ |
35.20 |
|
|
|
171,061 |
|
|
|
|
| |
|
May 25 to June 28 |
|
|
92,872 |
|
|
$ |
35.86 |
|
|
|
92,872 |
|
|
|
|
| |
|
Third Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 29 to July 26 |
|
|
116,667 |
|
|
$ |
35.24 |
|
|
|
116,667 |
|
|
|
|
| |
|
July 27 to August 23 |
|
|
173,014 |
|
|
$ |
33.75 |
|
|
|
173,014 |
|
|
|
|
| |
|
August 24 to September 27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fourth Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 28 to October 25 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
| |
|
October 26 to November 22 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
| |
|
November 23 to December 31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total |
|
|
1,831,887 |
|
|
$ |
39.48 |
|
|
|
1,831,887 |
|
|
$ |
14,300,000 |
| |
All of these purchases were made with cash held
by the Company and no debt was incurred.
At December 31, 2025 approximately $14.3 million
remained authorized for share repurchases.
23
|
Comparison of Five-Year Cumulative Total Return* | |
|
Sturm,
Ruger & Co., Inc., Standard & Poors 500, Dow Jones US Recreational Products TSM Index, and Russell 2000 Index | |
|
(Performance
Results Through 12/31/25) | |
*
|
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2025 |
| |
|
Sturm, Ruger & Company, Inc. |
|
|
100.00 |
|
|
|
109.27 |
|
|
|
92.28 |
|
|
|
84.85 |
|
|
|
67.10 |
|
|
|
62.99 |
| |
|
Standard & Poors 500 |
|
|
100.00 |
|
|
|
128.71 |
|
|
|
105.40 |
|
|
|
133.10 |
|
|
|
166.40 |
|
|
|
196.16 |
| |
|
Russell 2000 Index |
|
|
100.00 |
|
|
|
114.82 |
|
|
|
91.35 |
|
|
|
106.82 |
|
|
|
119.14 |
|
|
|
134.40 |
| |
|
Dow Jones US Recreational Products TSM |
|
|
100.00 |
|
|
|
130.85 |
|
|
|
85.93 |
|
|
|
105.81 |
|
|
|
80.71 |
|
|
|
72.88 |
| |
For the year ended December 31, 2025, the Company
has provided the five year cumulative total return results for the Dow Jones US Recreational Products Index, a widely-published index
tracking companies that provide recreational products.
ITEM
6[RESERVED]
24
ITEM
7MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Company Overview
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 Companys design and manufacturing operations are located in the United
States and almost all product content is domestic. The Companys firearms are sold through a select number of independent wholesale
distributors, principally to the commercial sporting market.
The Company also manufactures investment castings
made from steel alloys and metal injection molding (MIM) parts for internal use in its firearms and for sale to unaffiliated,
third-party customers. Less than 1% of sales are from the castings segment.
Results
of Operations - 2025
Product Demand
The estimated sell-through of the Companys
products from the independent distributors to retailers in 2025 increased 5% from 2024. In 2025, adjusted NICS decreased 4% from 2024.
The increase in the sell-through of the Companys 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, Glenfield
and Harrier rifles, and the RXM pistol, which helped offset aggressive promotions, discounts, rebates, and the extension of payment terms
offered by the Companys competitors.
Estimated sell-through from distributors to retailers and total adjusted
NICS background checks:
|
|
|
2025 |
|
2024 |
|
2023 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers (1) |
|
|
1,537,600 |
|
|
|
1,471,300 |
|
|
|
1,406,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS Background Checks (2) |
|
|
14,612,300 |
|
|
|
15,239,000 |
|
|
|
15,848,000 |
| |
|
(1) |
The estimates for each period were calculated by taking the beginning inventory at the distributors, plus
shipments from the Company to distributors during the period, less the ending inventory at distributors. These estimates are only a proxy
for actual market demand as they: | |
|
|
Rely on data provided by independent distributors
that are not verified by the Company, | |
|
|
Do not consider potential timing issues within the
distribution channel, including goods-in-transit, and | |
|
|
Do not consider fluctuations in inventory at retail. | |
25
|
(2) |
NICS background checks are performed when the ownership of most firearms, either new or used, is transferred
by a Federal Firearms Licensee. NICS background checks are also performed for permit applications, permit renewals, and other administrative
reasons. | |
The adjusted NICS data presented above
was derived by the NSSF by subtracting NICS checks that are not directly related to the sale of a firearm, including checks used for concealed
carry (CCW) permit application checks as well as checks on active CCW permit databases.
Adjusted NICS data can be impacted by
changes in state laws and regulations and any directives and interpretations issued by governmental agencies.
Orders Received and Ending
Backlog
The Company uses the estimated unit sell-through
of its products from the independent distributors to retailers, along with inventory levels at the independent distributors and at the
Company, as the key metrics for planning production levels.
The units ordered, value of orders received and ending backlog, net
of Federal Excise Tax, for the trailing three years are as follows (dollars in millions, except average sales price):
|
|
|
2025 |
|
2024 |
|
2023 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
515.8 |
|
|
$ |
533.3 |
|
|
$ |
433.8 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received |
|
$ |
322 |
|
|
$ |
377 |
|
|
$ |
374 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
285.0 |
|
|
$ |
252.9 |
|
|
$ |
229.0 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog |
|
$ |
524 |
|
|
$ |
568 |
|
|
$ |
522 |
| |
Production
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 an increase in total unit production of 6% in 2025 compared to 2024.
26
Annual
Summary Unit Data
Firearms unit data for orders, production, and
shipments follows:
|
|
|
2025 |
|
2024 |
|
2023 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
1,602,700 |
|
|
|
1,414,300 |
|
|
|
1,159,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
1,456,300 |
|
|
|
1,379,500 |
|
|
|
1,398,200 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
1,504,000 |
|
|
|
1,407,800 |
|
|
|
1,367,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price |
|
$ |
364 |
|
|
$ |
377 |
|
|
$ |
395 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
543,900 |
|
|
|
445,300 |
|
|
|
438,800 |
| |
Inventories
The Companys finished goods inventory decreased
by 47,700 units during 2025, while distributor inventories of the Companys
products decreased by 33,500 units during the same period.
Inventory data follows:
|
|
|
|
2025 |
|
|
|
2024 |
|
|
|
2023 |
| |
|
Units Company Inventory |
|
|
67,500 |
|
|
|
115,200 |
|
|
|
143,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (3) |
|
|
162,300 |
|
|
|
195,800 |
|
|
|
259,300 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total inventory (4) |
|
|
229,800 |
|
|
|
311,000 |
|
|
|
402,800 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(3) |
Distributor ending inventory as provided by the independent distributors of the Companys products.
These numbers do not include goods-in-transit inventory that has been shipped from the Company but not yet received by the distributors. | |
|
(4) |
This total does not include inventory at retailers. The Company does not have access to data on retailer inventories. | |
*
27
**
*Year ended December 31, 2025, as compared to year ended December
31, 2024:*
Net Sales,
Cost of Products Sold, and Gross Profit
Net
sales, cost of products sold, and gross profit data for the year ended December 31, (dollars in millions):
|
|
|
|
2025 |
|
|
|
2024 |
|
|
|
Change |
|
|
|
% Change |
| |
|
Net firearms sales |
|
$ |
543.5 |
|
|
$ |
532.6 |
|
|
$ |
10.9 |
|
|
|
2.0 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net casting sales |
|
|
2.6 |
|
|
|
3.0 |
|
|
|
(0.4 |
) |
|
|
(14.9 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total net sales |
|
|
546.1 |
|
|
|
535.6 |
|
|
|
10.5 |
|
|
|
1.9 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of products sold |
|
|
464.9 |
|
|
|
421.2 |
|
|
|
43.7 |
|
|
|
10.4 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross profit |
|
$ |
81.2 |
|
|
$ |
114.4 |
|
|
$ |
(33.2 |
) |
|
|
(29.1 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross margin |
|
|
14.9% |
|
|
|
21.4% |
|
|
|
(6.5 |
)% |
|
|
(30.4 |
)% | |
Firearms sales increased 2%, driven by a 7% increase
in unit shipments, partially offset by the $5.7 million reduction related to the close out of 67,000 units of discontinued models in the
second quarter of 2025. New products represented $169.5 million or 33% of firearms sales in 2025, an increase from $159.3 million or 32%
of firearms sales in 2024. New product sales include only major new products that were introduced in the past two years. In 2025, new
products included the RXM pistol, American Centerfire Rifle Generation II, Marlin 1894 lever-action rifles, Glenfield rifles, Harrier
rifles, and the Ruger Red Label Shotgun, as well as the Super Wrangler revolver, which was only included for a portion of the year.
The decreased gross profit for the year ended
December 31, 2025 is attributable to inventory rationalization write-offs and the aforementioned sales reductions taken in the second
quarter of 2025, $4.3 million of operating costs at the new Hebron facility that was acquired in July, increased
costs
associated with material and technology, a product mix shift toward products with relatively lower margins that remain in relatively stronger
demand and increased sales promotional expenses, partially off-set by favorable deleveraging of fixed costs resulting from increased production.
The decrease in gross margin for the year ended
December 31, 2025 is attributable to the aforementioned factors.
28
Selling,
General and Administrative
Selling and general and administrative expenses data for the year ended
December 31, (dollars in millions):
|
|
|
|
2025 |
|
|
|
2024 |
|
|
|
Change |
|
|
|
% Change |
| |
|
Selling expenses |
|
$ |
39.1 |
|
|
$ |
38.8 |
|
|
$ |
0.3 |
|
|
|
0.8% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
General and administrative expenses |
|
|
54.2 |
|
|
|
44.0 |
|
|
|
10.2 |
|
|
|
23.2% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other operating expenses |
|
|
0.2 |
|
|
|
|
|
|
|
0.2 |
|
|
|
100.0% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total operating expenses |
|
$ |
93.5 |
|
|
$ |
82.8 |
|
|
$ |
10.7 |
|
|
|
12.9% |
| |
Selling expenses for the year ended December 31,
2025 were substantially unchanged from 2024, as increases in promotional and marketing initiatives was largely offset by decreases in
spending on industry shows, personnel costs, and shipping expenses.
The increase in general and administrative expenses
for the year ended December 31, 2025 was primarily attributable to expenses incurred due to the Companys leadership transition
and organizational realignment, as well as increased information technologies related expenses and professional fees associated with the
purchase of the Anderson Manufacturing assets and the implementation of the Rights Plan.
Operating (Loss) Income
Operating loss was $12.3 million or 2.3% of sales
in 2025. This is a decrease of $43.9 million from 2024 operating income of $31.6 million or 5.9% of sales.
Other Operating Income (Expense),
Net
Other income data for the year ended December 31, (dollars
in millions):
|
|
|
2025 |
|
2024 |
|
Change |
|
%
Change | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Royalty income |
|
$ |
1.4 |
|
|
$ |
0.8 |
|
|
$ |
0.6 |
|
|
|
63.5 |
% | |
|
Interest income |
|
|
3.2 |
|
|
|
4.9 |
|
|
|
(1.7 |
) |
|
|
(33.3 |
)% | |
|
Interest expense |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
|
|
|
|
(7.8 |
)% | |
|
Other income, net |
|
|
0.6 |
|
|
|
0.5 |
|
|
|
0.1 |
|
|
|
18.9 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other income |
|
$ |
5.1 |
|
|
$ |
6.1 |
|
|
$ |
(1.0 |
) |
|
|
(16.1 |
)% | |
29
The decrease in other income for the year ended
December 31, 2025 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 income.
Income
Taxes and Net Income
The
effective income tax rate was 38.7% in 2025 and 19.1% in 2024. The Company's 2025 and 2024 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.
As a result of the foregoing factors, consolidated
net loss was $4.4 million in 2025. This represents a decrease of $35.0 million from 2024 consolidated net income of $30.6 million.
30
Non-GAAP Financial Measure
In an effort to provide investors with additional
information regarding its results, the Company refers to various United States generally accepted accounting principles (GAAP)
financial measures and two non-GAAP financial measures, EBITDA and EBITDA margin, which management believes provides useful information
to investors. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. In addition,
the Company believes that the non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures.
The Company believes that EBITDA and EBITDA margin are useful to understanding its operating results and the ongoing performance of its
underlying business, as EBITDA provides information on the Companys ability to meet its capital expenditure and working capital
requirements, and is also an indicator of profitability. The Company believes that this reporting provides better transparency and comparability
to its operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate its financial performance.
Non-GAAP Reconciliation EBITDA
EBITDA
*(Unaudited, dollars in thousands)*
|
Year ended
December 31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Net (loss) income |
|
$ |
(4,391 |
) |
|
$ |
30,563 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Inventory rationalization |
|
|
17,002 |
|
|
|
|
| |
|
Income tax (benefit) expense |
|
|
(2,770 |
) |
|
|
7,212 |
| |
|
Depreciation and amortization expense |
|
|
22,871 |
|
|
|
22,063 |
| |
|
Interest expense |
|
|
94 |
|
|
|
102 |
| |
|
Interest income |
|
|
(3,259 |
) |
|
|
(4,885 |
) | |
|
EBITDA |
|
$ |
29,547 |
|
|
$ |
55,055 |
| |
|
EBITDA margin |
|
|
5.4 |
% |
|
|
10.3 |
% | |
|
Net income margin |
|
|
(0.8 |
)% |
|
|
5.7 |
% | |
EBITDA is defined as earnings before interest, taxes,
and depreciation and amortization. The Company calculates this by adding the amount of interest expense, income tax expense and depreciation
and amortization expenses that have been deducted from net income back into net income, and subtracting the amount of interest income
that was included in net income from net income to arrive at EBITDA. The Companys EBITDA calculation also excludes certain non-recurring,
non-cash, non-operating expenses.
31
Quarterly
Data
To supplement the summary annual unit data and
discussion above, the same data for the last eight quarters follows:
|
|
|
2025 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
550,300 |
|
|
|
286,500 |
|
|
|
355,900 |
|
|
|
410,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
357,800 |
|
|
|
344,900 |
|
|
|
381,600 |
|
|
|
372,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
424,400 |
|
|
|
361,500 |
|
|
|
361,400 |
|
|
|
356,700 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers |
|
|
478,800 |
|
|
|
370,600 |
|
|
|
328,500 |
|
|
|
364,700 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS BackgroundChecks |
|
|
4,294,600 |
|
|
|
3,249,000 |
|
|
|
3,251,000 |
|
|
|
3,817,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Unit Sales Price |
|
$ |
355 |
|
|
$ |
336 |
|
|
$ |
349 |
|
|
$ |
379 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
543,900 |
|
|
|
418,000 |
|
|
|
493,100 |
|
|
|
498,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Company Inventory |
|
|
67,500 |
|
|
|
134,100 |
|
|
|
150,700 |
|
|
|
130,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (5) |
|
|
162,300 |
|
|
|
211,700 |
|
|
|
220,700 |
|
|
|
187,900 |
| |
|
|
|
2024 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
374,300 |
|
|
|
316,900 |
|
|
|
250,500 |
|
|
|
472,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
364,300 |
|
|
|
330,300 |
|
|
|
370,400 |
|
|
|
314,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
398,700 |
|
|
|
327,400 |
|
|
|
336,300 |
|
|
|
345,400 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers |
|
|
410,500 |
|
|
|
336,300 |
|
|
|
327,800 |
|
|
|
396,700 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS BackgroundChecks |
|
|
4,460,000 |
|
|
|
3,432,000 |
|
|
|
3,364,000 |
|
|
|
3,983,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Unit Sales Price |
|
$ |
364 |
|
|
$ |
371 |
|
|
$ |
386 |
|
|
$ |
394 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
445,300 |
|
|
|
469,700 |
|
|
|
480,200 |
|
|
|
566,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Company Inventory |
|
|
115,200 |
|
|
|
149,600 |
|
|
|
146,700 |
|
|
|
112,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (5) |
|
|
195,800 |
|
|
|
207,600 |
|
|
|
216,500 |
|
|
|
208,000 |
| |
|
(5) |
Distributor ending inventory as provided by the independent distributors of the Companys products. | |
32
Orders
Received and Ending Backlog
(in millions
except average sales price, net of Federal Excise Tax)
|
|
|
2025 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
160.2 |
|
|
$ |
87.9 |
|
|
$ |
113.7 |
|
|
$ |
154.0 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received |
|
$ |
322 |
|
|
$ |
307 |
|
|
$ |
319 |
|
|
$ |
376 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
285.0 |
|
|
$ |
227.0 |
|
|
$ |
263.1 |
|
|
$ |
275.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog |
|
$ |
524 |
|
|
$ |
543 |
|
|
$ |
534 |
|
|
$ |
552 |
| |
|
|
|
2024 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
126.3 |
|
|
$ |
109.4 |
|
|
$ |
99.5 |
|
|
$ |
198.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received |
|
$ |
337 |
|
|
$ |
345 |
|
|
$ |
397 |
|
|
$ |
419 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
252.9 |
|
|
$ |
268.7 |
|
|
$ |
272.2 |
|
|
$ |
296.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog |
|
$ |
568 |
|
|
$ |
572 |
|
|
$ |
567 |
|
|
$ |
523 |
| |
Fourth Quarter Net Sales and
Gross Profit Analysis
Net sales, cost of products sold, and gross profit
data for the three months ended December 31, (dollars in millions):
|
|
|
|
2025 |
|
|
|
2024 |
|
|
|
Change |
|
|
|
% Change |
| |
|
Net firearms sales |
|
$ |
150.6 |
|
|
$ |
145.3 |
|
|
$ |
5.3 |
|
|
|
3.7 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net casting sales |
|
|
0.5 |
|
|
|
0.5 |
|
|
|
|
|
|
|
(7.0 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total net sales |
|
|
151.1 |
|
|
|
145.8 |
|
|
|
5.3 |
|
|
|
3.6 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of products sold |
|
|
124.1 |
|
|
|
112.6 |
|
|
|
11.5 |
|
|
|
10.2 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross profit |
|
$ |
27.0 |
|
|
$ |
33.2 |
|
|
$ |
(6.2 |
) |
|
|
(18.8 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross margin |
|
|
17.8 |
% |
|
|
22.8 |
% |
|
|
(5.0 |
)% |
|
|
(21.9 |
)% | |
33
Results
of Operations - 2024
*Year ended December 31, 2024, as compared to
year ended December 31, 2023*
Annual
Summary Unit Data
Firearms unit data for orders, production, shipments and ending inventory,
and castings setups (a measure of foundry production) are as follows:
|
|
|
2024 |
|
|
2023 |
|
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
1,414,300 |
|
|
|
1,159,000 |
|
|
|
1,083,800 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
1,379,500 |
|
|
|
1,398,200 |
|
|
|
1,733,200 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
1,407,800 |
|
|
|
1,367,500 |
|
|
|
1,641,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price |
|
$ |
377 |
|
|
$ |
395 |
|
|
$ |
362 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
445,300 |
|
|
|
438,800 |
|
|
|
647,300 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Company Inventory |
|
|
115,200 |
|
|
|
143,500 |
|
|
|
112,800 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (1) |
|
|
195,800 |
|
|
|
259,300 |
|
|
|
298,400 |
| |
Orders
Received and Ending Backlog
(in millions except average sales price, net of
Federal Excise Tax):
|
|
|
2024 |
|
|
2023 |
|
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
533.3 |
|
|
$ |
433.8 |
|
|
$ |
451.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received (2) |
|
$ |
377 |
|
|
$ |
374 |
|
|
$ |
416 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
252.9 |
|
|
$ |
229.0 |
|
|
$ |
314.4 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog (2) |
|
$ |
568 |
|
|
$ |
522 |
|
|
$ |
486 |
| |
|
(1) |
Distributor ending inventory as provided by the independent distributors of the Companys products. | |
|
(2) |
Average sales price for orders received and ending backlog is net of Federal Excise Tax of 10% for handguns
and 11% for long guns. | |
34
Product Demand
The estimated sell-through of the Companys
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 Companys 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 Companys
competitors.
Estimated sell-through from distributors to retailers and total adjusted
NICS background checks:
|
|
|
2024 |
|
|
2023 |
|
|
2022 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers (1) |
|
|
1,471,300 |
|
|
|
1,406,600 |
|
|
|
1,506,800 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS Background Checks (2) |
|
|
15,239,000 |
|
|
|
15,848,000 |
|
|
|
16,425,000 |
| |
|
(1) |
The estimates for each period were calculated by taking the beginning inventory at the distributors, plus
shipments from the Company to distributors during the period, less the ending inventory at distributors. These estimates are only a proxy
for actual market demand as they: | |
|
|
Rely on data provided by independent distributors
that are not verified by the Company, | |
|
|
Do not consider potential timing issues within the
distribution channel, including goods-in-transit, and | |
|
|
Do not consider fluctuations in inventory at retail. | |
|
(2) |
NICS background checks are performed when the ownership of most firearms, either new or used, is transferred
by a Federal Firearms Licensee. NICS background checks are also performed for permit applications, permit renewals, and other administrative
reasons. | |
The adjusted NICS data presented above
was derived by the NSSF by subtracting NICS checks that are not directly related to the sale of a firearm, including checks used for concealed
carry (CCW) permit application checks as well as checks on active CCW permit databases.
Adjusted NICS data can be impacted by changes in state laws
and regulations and any directives and interpretations issued by governmental agencies.
35
Production
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.
Inventories
The Companys finished goods inventory decreased
by 28,300 units during 2024, while distributor inventories of the Companys
products decreased by 63,500 units during the same period.
Inventory data follows:
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2022 |
| |
|
Units Company Inventory |
|
|
115,200 |
|
|
|
143,500 |
|
|
|
112,800 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (3) |
|
|
195,800 |
|
|
|
259,300 |
|
|
|
298,400 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total inventory (4) |
|
|
311,000 |
|
|
|
402,800 |
|
|
|
411,200 |
| |
|
(3) |
Distributor ending inventory as provided by the independent distributors of the Companys products.
These numbers do not include goods-in-transit inventory that has been shipped from the Company but not yet received by the distributors. | |
|
(4) |
This total does not include inventory at retailers. The Company does not have access to data on retailer inventories. | |
36
Quarterly
Data
To supplement the summary annual unit data and
discussion above, the same data for the last eight quarters follows:
|
|
|
2024 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
374,300 |
|
|
|
316,900 |
|
|
|
250,500 |
|
|
|
472,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
364,300 |
|
|
|
330,300 |
|
|
|
370,400 |
|
|
|
314,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
398,700 |
|
|
|
327,400 |
|
|
|
336,300 |
|
|
|
345,400 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers |
|
|
410,500 |
|
|
|
336,300 |
|
|
|
327,800 |
|
|
|
396,700 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS Background Checks |
|
|
4,460,000 |
|
|
|
3,432,000 |
|
|
|
3,364,000 |
|
|
|
3,983,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Unit Sales Price |
|
$ |
364 |
|
|
$ |
371 |
|
|
$ |
386 |
|
|
$ |
394 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
445,300 |
|
|
|
469,700 |
|
|
|
480,200 |
|
|
|
566,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Company Inventory |
|
|
115,200 |
|
|
|
149,600 |
|
|
|
146,700 |
|
|
|
112,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (5) |
|
|
195,800 |
|
|
|
207,600 |
|
|
|
216,500 |
|
|
|
208,000 |
| |
|
|
|
2023 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Ordered |
|
|
316,600 |
|
|
|
176,300 |
|
|
|
258,100 |
|
|
|
408,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Produced |
|
|
305,200 |
|
|
|
324,500 |
|
|
|
387,500 |
|
|
|
381,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Shipped |
|
|
337,800 |
|
|
|
308,400 |
|
|
|
336,400 |
|
|
|
384,900 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Estimated Units Sold from Distributors to Retailers |
|
|
384,700 |
|
|
|
307,400 |
|
|
|
323,000 |
|
|
|
391,500 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total Adjusted NICS Background Checks |
|
|
4,742,000 |
|
|
|
3,284,000 |
|
|
|
3,654,000 |
|
|
|
4,168,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Unit Sales Price |
|
$ |
383 |
|
|
$ |
390 |
|
|
$ |
422 |
|
|
$ |
387 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Backlog |
|
|
438,800 |
|
|
|
460,000 |
|
|
|
592,100 |
|
|
|
670,400 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Company Inventory |
|
|
143,500 |
|
|
|
176,100 |
|
|
|
160,000 |
|
|
|
108,900 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Units Distributor Inventory (5) |
|
|
259,300 |
|
|
|
306,200 |
|
|
|
305,200 |
|
|
|
291,800 |
| |
|
(5) |
Distributor ending inventory as provided by the independent distributors of the Companys products. | |
37
Orders
Received and Ending Backlog
(in millions
except average sales price, net of Federal Excise Tax)
|
|
|
2024 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
126.3 |
|
|
$ |
109.4 |
|
|
$ |
99.5 |
|
|
$ |
198.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received |
|
$ |
337 |
|
|
$ |
345 |
|
|
$ |
397 |
|
|
$ |
419 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
252.9 |
|
|
$ |
268.7 |
|
|
$ |
272.2 |
|
|
$ |
296.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog |
|
$ |
568 |
|
|
$ |
572 |
|
|
$ |
567 |
|
|
$ |
523 |
| |
|
|
|
2023 |
| |
|
|
|
|
Q4 |
|
|
|
Q3 |
|
|
|
Q2 |
|
|
|
Q1 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Orders Received |
|
$ |
116.7 |
|
|
$ |
58.8 |
|
|
$ |
102.1 |
|
|
$ |
156.2 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Orders Received |
|
$ |
369 |
|
|
$ |
334 |
|
|
$ |
396 |
|
|
$ |
383 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ending Backlog |
|
$ |
229.0 |
|
|
$ |
234.8 |
|
|
$ |
293.7 |
|
|
$ |
327.3 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Sales Price of Ending Backlog |
|
$ |
522 |
|
|
$ |
510 |
|
|
$ |
496 |
|
|
$ |
488 |
| |
Net Sales,
Cost of Products Sold, and Gross Profit
Net
sales, cost of products sold, and gross profit data for the year ended December 31, (dollars in millions):
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
Change |
|
|
|
% Change |
| |
|
Net firearms sales |
|
$ |
532.6 |
|
|
$ |
540.7 |
|
|
$ |
(8.1 |
) |
|
|
(1.5 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net casting sales |
|
|
3.0 |
|
|
|
3.0 |
|
|
|
0.0 |
|
|
|
0.5 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total net sales |
|
|
535.6 |
|
|
|
543.7 |
|
|
|
(8.1 |
) |
|
|
(1.5 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of products sold |
|
|
421.2 |
|
|
|
410.1 |
|
|
|
11.1 |
|
|
|
2.7 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross profit |
|
$ |
114.4 |
|
|
$ |
133.6 |
|
|
$ |
(19.2 |
) |
|
|
(14.4 |
)% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross margin |
|
|
21.4 |
% |
|
|
24.6 |
% |
|
|
(3.2 |
)% |
|
|
(13.0 |
)% | |
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
38
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.
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.
The decrease in gross margin for the year ended
December 31, 2024 is attributable to the aforementioned factors, partially offset by increased pricing.
Selling,
General and Administrative
Selling and general and administrative expenses data for the year ended
December 31, (dollars in millions):
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
Change |
|
|
|
% Change |
| |
|
Selling expenses |
|
$ |
38.8 |
|
|
$ |
38.8 |
|
|
$ |
|
|
|
|
(0.1 |
%) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
General and administrative expenses |
|
|
44.0 |
|
|
|
42.7 |
|
|
|
1.3 |
|
|
|
3.0 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total operating expenses |
|
$ |
82.8 |
|
|
$ |
81.5 |
|
|
$ |
1.3 |
|
|
|
1.5 |
% | |
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.
The
increase in general, and administrative expenses for the year ended December 31, 2024 was primarily attributable to increased professional
service costs and accrued 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 a reduction in force.
Operating Income
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.
39
Other Operating Income (Expense),
Net
Other income data for the year ended December 31, (dollars
in millions):
|
|
|
2024 |
|
|
2023 |
|
|
Change |
|
|
% Change |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Royalty income |
|
$ |
0.8 |
|
|
$ |
0.6 |
|
|
$ |
0.2 |
|
|
|
30.2 |
% | |
|
Interest income |
|
|
4.9 |
|
|
|
5.5 |
|
|
|
(0.6 |
) |
|
|
(10.6 |
%) | |
|
Interest expense |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
(50.2 |
%) | |
|
Other income, net |
|
|
0.5 |
|
|
|
0.8 |
|
|
|
(0.3 |
) |
|
|
(41.5 |
%) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other income |
|
$ |
6.1 |
|
|
$ |
6.7 |
|
|
$ |
(0.6 |
) |
|
|
(10.0 |
%) | |
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 income.
Income
Taxes and Net Income
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.
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.
40
Non-GAAP Financial Measure
In an effort to provide investors with additional
information regarding its results, the Company refers to various United States generally accepted accounting principles (GAAP)
financial measures and two non-GAAP financial measures, EBITDA and EBITDA margin, which management believes provides useful information
to investors. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. In addition,
the Company believes that the non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures.
The Company believes that EBITDA and EBITDA margin are useful to understanding its operating results and the ongoing performance of its
underlying business, as EBITDA provides information on the Companys ability to meet its capital expenditure and working capital
requirements, and is also an indicator of profitability. The Company believes that this reporting provides better transparency and comparability
to its operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate its financial performance.
Non-GAAP Reconciliation EBITDA
EBITDA
*(Unaudited, dollars in thousands)*
|
Year
ended December 31, |
|
2024 |
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Net income |
|
$ |
30,563 |
|
|
$ |
48,215 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Income tax expense |
|
|
7,212 |
|
|
|
10,609 |
| |
|
Depreciation and amortization expense |
|
|
22,063 |
|
|
|
22,383 |
| |
|
Interest expense |
|
|
102 |
|
|
|
205 |
| |
|
Interest income |
|
|
(4,885 |
) |
|
|
(5,465 |
) | |
|
EBITDA |
|
$ |
55,055 |
|
|
$ |
75,947 |
| |
|
EBITDA margin |
|
|
10.3% |
|
|
|
14.0% |
| |
|
Net income margin |
|
|
5.7% |
|
|
|
8.9% |
| |
EBITDA is defined as earnings before interest,
taxes, and depreciation and amortization. The Company calculates this by adding the amount of interest expense, income tax expense and
depreciation and amortization expenses that have been deducted from net income back into net income, and subtracting the amount of interest
income that was included in net income from net income to arrive at EBITDA. The Companys EBITDA calculation also excludes certain
non-recurring, non-cash, non-operating expenses.
41
Financial Condition
Liquidity
At
December 31, 2025, the Company had cash and cash equivalents of $18.5 million and $74.1 million in short term investments. The Companys
pre-LIFO working capital of $223.9 million, less the LIFO reserve of $67.1 million, resulted in working capital of $156.9 million and
a current ratio of 3.9 to 1. The Company also has access to a $40 million unsecured revolving line of credit that is currently
undrawn.
Capital
Resources
The Company believes that its cash flow from operations,
current cash position, and access to capital markets will continue to be sufficient to meet its anticipated cash requirements and contractual
obligations, which includes funding the Companys capital expenditures, acquisitions, dividend payments, and share repurchases.
Operations
Cash provided by operating activities was $54.3 million,
$55.5 million, and $33.9 million in 2025, 2024, and 2023, respectively. The slight decrease in cash provided in 2025 compared to 2024
is primarily attributable to the decrease in net income, mostly offset by the reduction in inventory in excess of the increase in inventory
reserves related to the Companys inventory rationalization in 2025.
**
The decrease in cash provided in 2024 compared
to 2023 is primarily attributable to the decrease in net income in 2024.
Third parties supply the Company with various
raw materials for its firearms and castings, such as fabricated steel components, walnut, birch, beech, maple and laminated lumber for
rifle stocks, wax, ceramic material, metal alloys, various synthetic products and other component parts. There is a limited supply of
these materials in the marketplace at any given time, which can cause the purchase prices to vary based upon numerous market factors.
If market conditions result in a significant prolonged inflation of certain prices or if adequate quantities of raw materials cannot be
obtained, the Companys manufacturing processes could be interrupted and the Companys financial condition or results of operations
could be materially adversely affected.
Investing
and Financing
Capital expenditures were $30.9 million, $20.8
million, and $15.8 million in 2025, 2024, and 2023, respectively. In 2026, the Company expects capital expenditures to approximate $30
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.
42
Included in capital expenditures amount noted above,
on July 1, 2025 the Company completed the asset purchase
of Anderson Manufacturing, a manufacturer of firearms and firearm accessories based in Hebron, Kentucky for a total purchase price of
$15.8 million, $15 million of which was paid at the closing of such transaction. This strategic purchase included Andersons manufacturing
facility and machinery and provided Ruger the opportunity to work with a skilled and experienced workforce, strengthening its production
capabilities and expanding its product offerings.
As
of December 31, 2025, the Company had $39.4 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, 2025, the Companys investment in this money market fund totaled $34.7 million.
In 2025, the Company repurchased 732,765 shares
of its common stock for $26.1 million in the open market. The average price per share purchased was $35.60. These purchases were funded
with cash on hand.
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.
In 2023, the Company repurchased
264,062 shares of its common stock for $11.8 million in the open market. The average price per share purchased was $44.71. These purchases
were funded with cash on hand.
At December 31, 2025, approximately $14.3 million
remained authorized for future share repurchases*.*
On January 5, 2023, the Company paid a $5.00 per
share special dividend to shareholders of record on December 15, 2022.
Including the $5.00 per share special dividend
paid on January 5, 2023, the Company paid dividends totaling $10.1 million, $11.8 million, and $110.8 million in 2025, 2024, and 2023,
respectively. The quarterly dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount
per share. The Companys practice is to pay a dividend of approximately 40% of net income.
On March 2, 2026, the Companys Board of
Directors authorized a dividend of 8 per share to shareholders of record on March 16, 2026. The payment of future dividends depends
on many factors, including internal estimates of future performance, then-current cash, and the Companys need for funds.
The Company provides supplemental discretionary
contributions to substantially all employees individual 401(k) accounts.
43
Based on its unencumbered assets, the Company
believes it has the ability to raise cash through issuance of short-term or long-term debt.
Contractual
Obligations
At December 31, 2025, the Company had approximately
$31.7 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 $1.8 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.
Firearms
Legislation and Litigation
See Item 1A - Risk Factors and Note 20 to the
financial statements which are included in the Annual Report on Form 10-K for a discussion of firearms legislation and litigation.
Other
Operational Matters
In the normal course of its manufacturing operations,
the Company is subject to occasional governmental proceedings and orders pertaining to workplace safety, firearms serial number tracking
and control, waste disposal, air emissions and water discharges into the environment. The Company believes that it is generally in compliance
with applicable Bureau of Alcohol, Tobacco, Firearms & Explosives, environmental, and safety regulations and the outcome of any proceedings
or orders will not have a material adverse effect on the financial position or results of operations of the Company. If these regulations
become more stringent in the future and we are not able to comply with them, such noncompliance could have a material adverse impact on
the Company.
Currently, there are 13 domestic distributors.
Additionally, the Company has 44 and 26 distributors servicing the export and law enforcement markets, respectively.
The Company self-insures a significant amount
of its product liability, workers compensation, medical, and other insurance. It also carries significant deductible amounts on
various insurance policies.
The Company expects to realize its deferred tax
assets through tax deductions against future taxable income.
On October 14, 2025, the Companys Board
of Directors (the Board) approved the adoption of a limited-duration stockholder rights plan (the Rights Plan).
The Rights Plan is effective October 14, 2025 (Effective Date) and will expire on October 13, 2026. The Board, in consultation
with its advisors, adopted the Rights Plan in response to the public announcement by Beretta Holding S.A. (Beretta) that
it had accumulated a significant economic interest in Rugers common stock and intends to engage in discussions with the Company
regarding potential areas of operational and strategic collaborations. The Rights Plan is intended to ensure that the Board
remains in the best position to perform its fiduciary duties and to enable all stockholders to receive fair and equal treatment. It is
also designed to allow all stockholders to realize the long-term value of their investment by reducing the likelihood that Beretta would
gain control through open market
44
accumulation or other coercive tactics without
appropriately compensating the Companys stockholders or allowing the Board sufficient time to make informed judgments. The Rights
Plan is a temporary measure to give the Board time to understand Berettas intentions and evaluate options. The summary of the terms
of the Rights Plan set forth in Note 22 is hereby incorporated by reference herein; provided, however, that such summary of the Rights
Plan is qualified in its entirety by the Rights Plan.
Critical
Accounting Policies and Estimates
The preparation of financial statements in accordance
with accounting principles generally accepted in the United States requires management to make assumptions and estimates that affect the
reported amounts of assets and liabilities as of the balance sheet date and net sales and expenses recognized and incurred during the
reporting period then ended. The Company bases estimates on prior experience, facts and circumstances, and other assumptions, including
those reviewed with actuarial consultants and independent counsel, when applicable, that are believed to be reasonable. However, actual
results may differ from these estimates.
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.
Product
Liability Accrual
The Company believes the determination of its
product liability accrual is a critical accounting policy. The Companys management reviews every lawsuit and claim and is in contact
with independent and corporate counsel on an ongoing basis. The provision for product liability claims is based upon many factors, which
vary for each case. These factors include the type of claim, nature and extent of injuries, historical settlement ranges, jurisdiction
where filed, and advice of counsel. An accrual is established for each lawsuit and claim, when appropriate, based on the nature of each
such lawsuit or claim.
Amounts are charged to product liability expense
in the period in which the Company becomes aware that a claim or, in some instances a threat of a claim, has been made when potential
losses or costs of defense are probable and can be reasonably estimated. Such amounts are determined based on the Companys experience
in defending similar claims. Occasionally, charges are made for claims made in prior periods because the cumulative actual costs incurred
for that claim, or reasonably expected to be incurred in the future, exceed amounts already provided with respect to such claims. Likewise,
credits may be taken if cumulative actual costs incurred for that claim, or reasonably expected to be incurred in the future, are less
than amounts previously provided.
While it is not possible to forecast the outcome
of litigation or the timing of related costs, in the opinion of management, after consultation with independent and corporate counsel,
there is a remote likelihood that litigation, including punitive damage claims, will have a material adverse effect on the financial position
of the Company, but such litigation may have a material impact on the Companys financial results and cash flows for a particular
period.
45
Inventory
Valuation and Reserves
The Company believes the valuation of its inventory
and the related excess and obsolescence reserve is also a critical accounting policy. Inventories are carried at the lower of cost, principally
determined by the last-in, first-out (LIFO) method, or market. An actual valuation of inventory under the LIFO method is made at the end
of each year based on the inventory levels and the Companys estimates of the prevailing costs of the many components of inventory
existing at that time.
The Company determines its excess and obsolescence
reserve by projecting the year in which inventory will be consumed into a finished product. Given ever-changing market conditions, customer
preferences and the anticipated introduction of new products, projecting the future usage of inventory is subjective. As such, it does
not seem prudent to carry inventory at full cost beyond what the Company projects to be needed during the next 36 months.
Recent
Accounting Pronouncements
In December of 2023, the FASB issued Accounting
Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated
accounting guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the effective
tax rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024. Prospective
application is required, with retrospective application permitted. Refer to Note 13, Income Taxes, for the updated presentation.
In November 2024, the FASB issued ASU No. 2024-03,
Income StatementReporting Comprehensive IncomeExpense 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.
In December 2025, the FASB issued its final ASU which
makes improvements to the Accounting Standards Codification in response to feedback from stakeholders. This standard, issued as ASU 2025-12,
specifically updates the Codification for a broad range of Topics arising from technical corrections, unintended application of the Codification,
clarifications, and other minor improvements. This update is effective for annual reporting periods beginning after December 15, 2026,
including interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of adopting
ASU 2025-12.
In September 2025, the FASB issued ASU No. 2025-06,
Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal
Use Software. The standard modernizes and simplifies guidance for internal-use software costs. This guidance is effective for annual
reporting periods beginning after December 15, 2027
46
including interim reporting periods within those annual
reporting periods. The Company is evaluating the impact of this guidance on its Consolidated Financial Statements.
Forward-Looking
Statements and Projections
The Company may, from time to time, make forward-looking
statements and projections concerning future expectations. Such statements are based on current expectations and are subject to certain
qualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the need
for external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of future
firearms control and environmental legislation and accounting estimates, any one or more of which could cause actual results to differ
materially from those projected. Words such as expect, believe, anticipate, intend,
estimate, will, should, could and other words and terms of similar meaning, typically
identify such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date made. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or
circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.
ITEM
7AQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changing interest rates
on its investments, which consist primarily of United States Treasury instruments with short-term (less than one year) maturities and
cash. The interest rate market risk implicit in the Company's investments at any given time is low, as the investments mature within short
periods and the Company does not have significant exposure to changing interest rates on invested cash.
The Company has not undertaken any actions to
cover interest rate market risk and is not a party to any interest rate market risk management activities.
A hypothetical 100 basis point change in market
interest rates over the next year would not materially impact the Companys earnings or cash flows. A hypothetical 100 basis point
change in market interest rates would not have a material effect on the fair value of the Companys investments.
47
ITEM
8FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Reports of Independent Registered Public Accounting
Firm (PCAOB ID 49) |
49 | |
|
|
|
| |
|
|
Consolidated Balance Sheets at December 31, 2025
and 2024 |
52 | |
|
|
|
| |
|
|
Consolidated Statements of Income and Comprehensive
Income for the years ended December 31, 2025, 2024 and 2023 |
54 | |
|
|
|
| |
|
|
Consolidated Statements of Stockholders Equity
for the years ended December 31, 2025, 2024 and 2023 |
55 | |
|
|
|
| |
|
|
Consolidated Statements of Cash Flows for the years
ended December 31, 2025, 2024 and 2023 |
56 | |
|
|
|
| |
|
|
Notes to Consolidated Financial Statements |
57 | |
48
Report of Independent Registered Public
Accounting Firm
To the Stockholders and the Board of Directors of Sturm, Ruger &
Company, Inc. and Subsidiaries
Opinion on the Internal Control Over Financial Reporting
We have audited Sturm, Ruger & Company, Inc. and Subsidiaries
(the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in *Internal
Control Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2025, based on criteria established in *Internal Control Integrated Framework* issued by
the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 2025 and 2024, the related
consolidated statements of income and comprehensive income, stockholders equity, and cash flows for each of the three years in
the period ended December 31, 2025 and the related notes to the consolidated financial statements of the Company and our report dated,
March 2, 2026 expressed an unqualified opinion.
As described in Managements Report on Internal Control over
Financial Reporting, management has excluded its Hebron operations resulting from the acquisition of Anderson Manufacturing assets from
its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase
business combination in the third quarter of 2025. We have also excluded Hebron operations resulting from the acquisition of Anderson
Manufacturing assets from our audit of internal control over financial reporting. The Hebron operations total assets and net sales
represent approximately 3% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year
ended December 31, 2025.
Basis for Opinion
The Companys management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in
the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Companys internal control over financial reporting based on our audit. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial
Reporting
A company's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
/s/RSM US LLP
Stamford, Connecticut
March 2, 2026
49
Report of Independent Registered Public Accounting
Firm
To the Stockholders and the Board of Directors of Sturm, Ruger &
Company, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Sturm,
Ruger & Company, Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of
income, and comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025,
and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024,
and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity
with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the PublicCompany
Accounting Oversight Board (UnitedStates)(PCAOB), the Company's internal control over financial reporting as of December 31,
2025, based on criteria established in *Internal Control Integrated Framework* issued by
the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 2, 2026 expressed an unqualified
opinion on the effectiveness of the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on the Companys financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement
of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical AuditMatter
The critical audit matter communicated below is a matter arising from
the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:
(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective
or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter
or on the accounts or disclosures to which it relates.
Last-In, First-Out Inventory Reserve
As described in Notes 1 and 5 to the financial statements, substantially
all of the Companys inventories are valued at the lower of cost, which is principally determined by the last-in, first-out (LIFO)
method, or
50
net realizable value, and the Companys consolidated net inventories
balance of $42.9 million as of December 31, 2025, included a LIFO inventory reserve of $67.1 million. The Company records its net inventories
under the LIFO method at the end of each year based on the inventory levels at the measurement date and the prevailing inventory costs
existing at that time, which are estimated using a complex manual calculation.
We identified the LIFO inventory reserve as a critical audit matter
because of the complexities of the manual calculations performed by management to estimate the prevailing inventory costs, which includes
calculations to estimate current year price level changes through the development of a prior year and a current year cumulative price
index. Auditing managements estimate of the LIFO inventory reserve was complex and required a high degree of auditor judgment and
increased audit effort due to the complexities of managements manual calculations and the impact those manual calculations have
on the accounting estimate.
Our audit procedures related to the Companys LIFO inventory
reserve included the following, among others:
|
|
We obtained an understanding of the relevant controls related to the LIFO inventory
reserve and tested such controls for design and operating effectiveness, including controls related to managements review of the
calculations related to the estimate of the current year price level changes, the calculation of the cumulative price indexes, and the
estimate of the LIFO inventory reserve. | |
|
|
We tested the completeness, accuracy, and relevance of the underlying data used
in managements estimate of the current year price level changes, the calculation of cumulative price index and the LIFO inventory
reserve. | |
|
|
We tested the mathematical accuracy of the Companys calculation to estimate
the LIFO inventory reserve. | |
|
|
We evaluated the appropriateness of managements methodologies to develop
the estimate of the LIFO inventory reserve. | |
|
|
We evaluated the reasonableness of managements estimate of the current
year price level changes by comparing managements estimate to external market data. | |
/s/ RSM
US LLP
We have served as the Company's auditor since 2005.
Stamford,
Connecticut
March 2, 2026
51
Consolidated Balance Sheets
*(Dollars in thousands, except per share data)*
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Assets |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Current Assets |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Cash and cash equivalents |
|
$ |
18,451 |
|
|
$ |
10,028 |
| |
|
Short-term investments |
|
|
74,082 |
|
|
|
95,453 |
| |
|
Trade receivables, net |
|
|
64,510 |
|
|
|
67,145 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Gross inventories |
|
|
113,166 |
|
|
|
149,417 |
| |
|
Less LIFO reserve |
|
|
(67,058 |
) |
|
|
(66,398 |
) | |
|
Less excess and obsolescence reserve |
|
|
(3,227 |
) |
|
|
(6,533 |
) | |
|
Net inventories |
|
|
42,881 |
|
|
|
76,486 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Prepaid expenses and other current assets |
|
|
11,680 |
|
|
|
9,245 |
| |
|
Total Current Assets |
|
|
211,604 |
|
|
|
258,357 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Property, plant and equipment |
|
|
506,799 |
|
|
|
477,622 |
| |
|
Less allowances for depreciation |
|
|
(426,702 |
) |
|
|
(406,373 |
) | |
|
Net property, plant and equipment |
|
|
80,097 |
|
|
|
71,249 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Deferred income taxes |
|
|
19,720 |
|
|
|
16,681 |
| |
|
Other assets |
|
|
30,576 |
|
|
|
37,747 |
| |
|
Total Assets |
|
$ |
341,997 |
|
|
$ |
384,034 |
| |
*See accompanying notes to consolidated financial statements.*
52
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Current Liabilities |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Trade accounts payable and accrued expenses |
|
$ |
34,122 |
|
|
$ |
35,750 |
| |
|
Contract liabilities with customers (Note 3) |
|
|
|
|
|
|
|
| |
|
Product liability |
|
|
964 |
|
|
|
431 |
| |
|
Employee compensation and benefits |
|
|
15,023 |
|
|
|
18,824 |
| |
|
Workers compensation |
|
|
4,638 |
|
|
|
5,804 |
| |
|
Total Current Liabilities |
|
|
54,747 |
|
|
|
60,809 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Lease liability (Note 8) |
|
|
1,158 |
|
|
|
1,747 |
| |
|
Employee compensation |
|
|
2,271 |
|
|
|
1,835 |
| |
|
Product liability accrual |
|
|
61 |
|
|
|
61 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Contingent liabilities (Note 20) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Stockholders Equity |
|
|
|
|
|
|
|
| |
|
Common stock, non-voting, par value $1: |
|
|
|
|
|
|
|
| |
|
Authorized shares 50,000;
none issued |
|
|
|
|
|
|
|
| |
|
Common stock, par value $1: |
|
|
|
|
|
|
|
| |
|
Authorized shares 40,000,000 |
|
|
|
|
|
|
|
| |
|
2025 24,490,478
issued, |
|
|
|
|
|
|
|
| |
|
15,944,253
outstanding |
|
|
|
|
|
|
|
| |
|
2024 24,467,983
issued, |
|
|
|
|
|
|
|
| |
|
16,790,824
outstanding |
|
|
24,490 |
|
|
|
24,468 |
| |
|
Additional paid-in capital |
|
|
55,356 |
|
|
|
50,536 |
| |
|
Retained earnings |
|
|
422,045 |
|
|
|
436,609 |
| |
|
Less: Treasury stock at cost |
|
|
|
|
|
|
|
| |
|
2025 8,546,225
shares |
|
|
|
|
|
|
|
| |
|
2024 7,677,159
shares |
|
|
(218,131 |
) |
|
|
(192,031 |
) | |
|
Total Stockholders Equity |
|
|
283,760 |
|
|
|
319,582 |
| |
|
Total Liabilities and Stockholders Equity |
|
$ |
341,997 |
|
|
$ |
384,034 |
| |
*See accompanying notes to consolidated financial statements.*
53
Consolidated Statements of Income and Comprehensive Income
*(In thousands, except per share data)*
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Net firearms sales |
|
$ |
543,474 |
|
|
$ |
532,608 |
|
|
$ |
540,746 |
| |
|
Net castings sales |
|
|
2,583 |
|
|
|
3,035 |
|
|
|
3,021 |
| |
|
Total net sales |
|
|
546,057 |
|
|
|
535,643 |
|
|
|
543,767 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cost of products sold |
|
|
464,906 |
|
|
|
421,228 |
|
|
|
410,148 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Gross profit |
|
|
81,151 |
|
|
|
114,415 |
|
|
|
133,619 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Operating Expenses (Income): |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Selling |
|
|
39,062 |
|
|
|
38,755 |
|
|
|
38,788 |
| |
|
General and administrative |
|
|
54,201 |
|
|
|
44,006 |
|
|
|
42,752 |
| |
|
Other operating expense (income), net |
|
|
187 |
|
|
|
|
|
|
|
(5 |
) | |
|
Total operating expenses |
|
|
93,450 |
|
|
|
82,761 |
|
|
|
81,535 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Operating (loss) income |
|
|
(12,299 |
) |
|
|
31,654 |
|
|
|
52,084 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other income: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Royalty income |
|
|
1,401 |
|
|
|
857 |
|
|
|
658 |
| |
|
Interest income |
|
|
3,259 |
|
|
|
4,885 |
|
|
|
5,465 |
| |
|
Interest expense |
|
|
(94 |
) |
|
|
(102 |
) |
|
|
(205 |
) | |
|
Other income, net |
|
|
572 |
|
|
|
481 |
|
|
|
822 |
| |
|
Total other income, net |
|
|
5,138 |
|
|
|
6,121 |
|
|
|
6,740 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Loss) income before income taxes |
|
|
(7,161 |
) |
|
|
37,775 |
|
|
|
58,824 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Income taxes |
|
|
(2,770 |
) |
|
|
7,212 |
|
|
|
10,609 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net (loss) income and comprehensive (loss) income |
|
$ |
(4,391 |
) |
|
$ |
30,563 |
|
|
$ |
48,215 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Basic (Loss) Earnings Per Share |
|
$ |
(0.27 |
) |
|
$ |
1.79 |
|
|
$ |
2.73 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Diluted (Loss) Earnings Per Share |
|
$ |
(0.27 |
) |
|
$ |
1.77 |
|
|
$ |
2.71 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average number of common shares outstanding Basic |
|
|
16,235,995 |
|
|
|
17,088,205 |
|
|
|
17,676,955 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average number of common shares outstanding Diluted |
|
|
16,235,995 |
|
|
|
17,270,101 |
|
|
|
17,811,218 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Cash Dividends Per Share |
|
$ |
0.62 |
|
|
$ |
0.69 |
|
|
$ |
6.27 |
| |
**
*See accompanying notes to consolidated financial statements.*
54
**
Consolidated Statements of Stockholders Equity
*(Dollars in thousands)*
**
|
|
|
Common
Stock |
|
|
Additional
Paid-in Capital |
|
|
Retained
Earnings |
|
|
Treasury
Stock |
|
|
Total |
| |
|
Balance at December 31, 2022 |
|
$ |
24,378 |
|
|
$ |
45,075 |
|
|
$ |
393,097 |
|
|
$ |
(145,812 |
) |
|
$ |
316,738 |
| |
|
Net income |
|
|
|
|
|
|
|
|
|
|
48,215 |
|
|
|
|
|
|
|
48,215 |
| |
|
Dividends paid |
|
|
|
|
|
|
|
|
|
|
(22,446 |
) |
|
|
|
|
|
|
(22,446 |
) | |
|
Stock-based compensation |
|
|
|
|
|
|
3,989 |
|
|
|
|
|
|
|
|
|
|
|
3,989 |
| |
|
Vesting of RSUs |
|
|
|
|
|
|
(2,156 |
) |
|
|
|
|
|
|
|
|
|
|
(2,156 |
) | |
|
Common stock issued compensation plans |
|
|
59 |
|
|
|
(59 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Unpaid dividends accrued |
|
|
|
|
|
|
|
|
|
|
(808 |
) |
|
|
|
|
|
|
(808 |
) | |
|
Repurchase of 264,062
shares of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,811 |
) |
|
|
(11,811 |
) | |
|
Balance at December 31, 2023 |
|
|
24,437 |
|
|
|
46,849 |
|
|
|
418,058 |
|
|
|
(157,623 |
) |
|
|
331,721 |
| |
|
Net income |
|
|
|
|
|
|
|
|
|
|
30,563 |
|
|
|
|
|
|
|
30,563 |
| |
|
Dividends paid |
|
|
|
|
|
|
|
|
|
|
(11,829 |
) |
|
|
|
|
|
|
(11,829 |
) | |
|
Stock-based compensation |
|
|
|
|
|
|
4,342 |
|
|
|
|
|
|
|
|
|
|
|
4,342 |
| |
|
Vesting of RSUs |
|
|
|
|
|
|
(624 |
) |
|
|
|
|
|
|
|
|
|
|
(624 |
) | |
|
Common stock issued compensation plans |
|
|
31 |
|
|
|
(31 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Unpaid dividends accrued |
|
|
|
|
|
|
|
|
|
|
(183 |
) |
|
|
|
|
|
|
(183 |
) | |
|
Repurchase of 835,060
shares of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(34,408 |
) |
|
|
(34,408 |
) | |
|
Balance at December 31, 2024 |
|
|
24,468 |
|
|
|
50,536 |
|
|
|
436,609 |
|
|
|
(192,031 |
) |
|
|
319,582 |
| |
|
Net income |
|
|
|
|
|
|
|
|
|
|
(4,391 |
) |
|
|
|
|
|
|
(4,391 |
) | |
|
Dividends paid |
|
|
|
|
|
|
|
|
|
|
(10,122 |
) |
|
|
|
|
|
|
(10,122 |
) | |
|
Stock-based compensation |
|
|
|
|
|
|
5,020 |
|
|
|
|
|
|
|
|
|
|
|
5,020 |
| |
|
Vesting of RSUs |
|
|
|
|
|
|
(178 |
) |
|
|
|
|
|
|
|
|
|
|
(178 |
) | |
|
Common stock issued compensation plans |
|
|
22 |
|
|
|
(22 |
) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Unpaid dividends accrued |
|
|
|
|
|
|
|
|
|
|
(51 |
) |
|
|
|
|
|
|
(51 |
) | |
|
Repurchase of 732,765
shares of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(26,100 |
) |
|
|
(26,100 |
) | |
|
Balance at December 31,2025 |
|
$ |
24,490 |
|
|
$ |
55,356 |
|
|
|
422,045 |
|
|
$ |
(218,131 |
) |
|
$ |
283,760 |
| |
**
*See accompanying notes to consolidated financial statements.*
**
55
**
Consolidated Statements of Cash Flows
*(In thousands)*
|
Year ended
December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net (loss) income |
|
$ |
(4,391 |
) |
|
$ |
30,563 |
|
|
$ |
48,215 |
| |
|
Adjustments to reconcile net (loss) income to cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Depreciation and amortization |
|
|
22,871 |
|
|
|
22,063 |
|
|
|
22,383 |
| |
|
Stock-based compensation |
|
|
5,020 |
|
|
|
4,342 |
|
|
|
3,989 |
| |
|
Excess and obsolescence inventory reserve |
|
|
(767 |
) |
|
|
413 |
|
|
|
1,308 |
| |
|
Inventory write-off |
|
|
17,002 |
|
|
|
|
|
|
|
|
| |
|
Loss (gain) on disposal of assets |
|
|
187 |
|
|
|
|
|
|
|
(5 |
) | |
|
Deferred income taxes |
|
|
(3,039 |
) |
|
|
(4,705 |
) |
|
|
(5,867 |
) | |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Trade receivables |
|
|
2,635 |
|
|
|
(7,281 |
) |
|
|
5,585 |
| |
|
Inventories |
|
|
21,191 |
|
|
|
2,911 |
|
|
|
(16,125 |
) | |
|
Trade accounts payable and accrued expenses |
|
|
(2,746 |
) |
|
|
3,789 |
|
|
|
(4,406 |
) | |
|
Contract liability with customers |
|
|
|
|
|
|
(149 |
) |
|
|
(882 |
) | |
|
Employee compensation and benefits |
|
|
(3,416 |
) |
|
|
(5,869 |
) |
|
|
(6,469 |
) | |
|
Product liability |
|
|
533 |
|
|
|
(188 |
) |
|
|
372 |
| |
|
Prepaid expenses, other assets and other liabilities |
|
|
(772 |
) |
|
|
9,615 |
|
|
|
(13,026 |
) | |
|
Income taxes receivable/payable |
|
|
|
|
|
|
|
|
|
|
(1,171 |
) | |
|
Cash provided by operating activities |
|
|
54,308 |
|
|
|
55,504 |
|
|
|
33,901 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Property, plant and equipment additions |
|
|
(15,846 |
) |
|
|
(20,821 |
) |
|
|
(15,796 |
) | |
|
Purchase of Anderson Manufacturing assets |
|
|
(15,010 |
) |
|
|
|
|
|
|
|
| |
|
Purchases of short-term investments |
|
|
(108,905 |
) |
|
|
(138,885 |
) |
|
|
(192,627 |
) | |
|
Proceeds from maturity of short-term investments |
|
|
130,276 |
|
|
|
145,917 |
|
|
|
249,274 |
| |
|
Net proceeds from sale of assets |
|
|
|
|
|
|
|
|
|
|
5 |
| |
|
Cash (used for) provided by investing activities |
|
|
(9,485 |
) |
|
|
(13,789 |
) |
|
|
40,856 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dividends paid |
|
|
(10,122 |
) |
|
|
(11,829 |
) |
|
|
(110,789 |
) | |
|
Repurchase of common stock |
|
|
(26,100 |
) |
|
|
(34,408 |
) |
|
|
(11,811 |
) | |
|
Payment of employee withholding tax
related toshare-based compensation |
|
|
(178 |
) |
|
|
(624 |
) |
|
|
(2,156 |
) | |
|
Cash used for financing activities |
|
|
(36,400 |
) |
|
|
(46,861 |
) |
|
|
(124,756 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Increase (decrease) in cash and cash equivalents |
|
|
8,423 |
|
|
|
(5,146 |
) |
|
|
(49,999 |
) | |
|
Cash and cash equivalents at beginning of year |
|
|
10,028 |
|
|
|
15,174 |
|
|
|
65,173 |
| |
|
Cash and cash equivalents at end of year |
|
$ |
18,451 |
|
|
$ |
10,028 |
|
|
$ |
15,174 |
| |
*See accompanying notes to consolidated financial statements.*
56
Notes
to Consolidated Financial Statements
*(Dollars in thousands, except per share)*
**
|
1. |
Summary of Significant Accounting Policies | |
Organization
Sturm, Ruger & Company, Inc. (the Company)
is principally engaged in the design, manufacture, and sale of firearms to domestic customers. Approximately 99%
of sales were from firearms. Export sales represented approximately 5%
of firearms sales. The Companys design and manufacturing operations are located in the United States and almost all product content
is domestic. The Companys firearms are sold through a select number of independent wholesale distributors principally to the commercial
sporting market.
The Company manufactures investment castings
made from steel alloys and metal injection molding (MIM) parts for internal use in its firearms and utilizes available capacity
to manufacture and sell investment castings and MIM parts to unaffiliated, third-party customers. Castings were less than 1%
of the Companys total sales for the year ended December 31, 2025.
Preparation
of Financial Statements
The Company follows United States generally accepted
accounting principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ
from these estimates.
The significant accounting policies described
below, together with the notes that follow, are an integral part of the consolidated financial statements.
Principles
of Consolidation
The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Revenue
Recognition
The Company recognizes revenue in accordance with
the provisions of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606),
which became effective January 1, 2018. Substantially all product sales are sold FOB (free on board) shipping point. Customary payment
terms are 2% 30 days, net 40 days. Generally, all performance obligations are satisfied when product is shipped and the customer takes
ownership and assumes the risk of loss. In some instances, sales include multiple performance obligations. The most common of these instances
relates to sales promotion programs under which downstream customers are entitled to receive no charge products based on their purchases
of certain of the Companys products from the independent distributors. The fulfillment of these no charge products
57
is the Companys responsibility. In such
instances, the Company allocates the revenue of the promotional sales based on the estimated level of participation in the sales promotional
program and the timing of the shipment of all of the firearms included in the promotional program, including the no charge firearms. Revenue
is recognized proportionally as each performance obligation is satisfied, based on the relative customary price of each product. Customary
prices are generally determined based on the prices charged to the independent distributors. The net change in contract liabilities for
a given period is reported as an increase or decrease to sales. The Company accounts for cash sales discounts as a reduction in sales.
Amounts billed to customers for shipping and handling fees are included in net sales and costs incurred by the Company for the delivery
of goods are classified as selling expenses. Federal excise taxes are excluded from net sales.
Business
Combination:
On July 1, 2025, the Company acquired substantially
all of the assets of Anderson Manufacturing (Anderson) for a total purchase price of $15.8
million in cash, with $15
million having been paid in cash at the closing of the transaction and $0.8
million having been held back from the purchase price for the purposes described in Note 2 below (the Anderson Acquisition).
The Anderson Acquisition was funded by the Company
with cash on hand and has been accounted for in accordance with ASC 805 - Business Combinations, which requires, among other things, an
assignment of the acquisition consideration transferred to the sellers for the assets acquired, using the bottom up approach, to estimate
their fair value at acquisition date. Any excess of the fair value of the purchase consideration over these identified net assets was
recorded as goodwill. Our estimates of fair value are based upon assumptions believed to be reasonable, yet are inherently uncertain and,
as a result, may differ from actual performance. During the measurement period, not to exceed one year from the date of acquisition, the
Company may record adjustments to the estimated fair values of the assets acquired and liabilities assumed with a corresponding adjustment
to goodwill in the period in which such revised estimates are identified. No such adjustments were recorded as of December 31, 2025.
Cash
and Cash Equivalents
The Company considers interest-bearing deposits
with financial institutions with remaining maturities of three months or less at the time of acquisition to be cash equivalents.
Fair
Value Measurements
Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or
most advantageous market at the measurement date. Fair value is established according to a hierarchy that prioritizes observable and unobservable
inputs used to measure fair value into three broad levels, which are described below:
Level 1: Unadjusted quoted prices in
active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority
to Level 1 inputs.
58
Level 2: Observable prices that are
based on inputs not quoted on active markets, but corroborated by market data.
Level 3: Unobservable inputs are used
when little or no market data is available. Level 3 inputs are given the lowest priority in the fair value hierarchy.
The asset or liabilitys fair value measurement
level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation
techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The carrying amounts of financial instruments,
including cash, short-term investments, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to the
short-term maturity of these items.
As
of December 31, 2025, the Companys short-term investments consist of U.S. Treasury instruments (Level 1), maturing within one year,
and investments in a bank-managed money market fund that invests exclusively in United States Treasury obligations and is valued
at the net asset value ("NAV") daily closing price, as reported by the fund, based on the amortized cost of the funds securities
(Level 2). For the bank-managed money market fund, the NAV is used as
a practical expedient to estimate fair value. This practical expedient is not used when it is determined to be probable that the fund
will sell the investment for an amount different than the reported NAV. Such
securities are classified as held to maturity, since the Company has the intent and ability to do so, and are carried at cost plus accrued
interest, which approximates fair value.
The fair value of inventory acquired as part of
business combination is based on a third-party valuation utilizing the comparable sales method which is based on Level 2 and Level 3 inputs.
The fair value of property, plant and equipment acquired as part of business combination is based on a third-party valuation utilizing
the indirect method of cost approach, which is based on Level 2 and Level 3 inputs. The fair value of patents acquired as part of business
combination is based on a third-party valuation utilizing the replacement cost method, which is based on Level 2 and Level 3 inputs. The
fair value of the remaining intangible assets as part of business combination are based on a third-party valuation utilizing discounted
cash flow methods that involves inputs, which are not observable in the market (Level 3).
Accounts Receivable
The Company establishes an allowance for doubtful
accounts based on the creditworthiness of its customers and historical experience. While the Company uses the best information available
to make its evaluation, future adjustments to the allowance for doubtful accounts may be necessary if there are significant changes in
economic and industry conditions or any other factors considered in the Companys evaluation. Bad debt expense has been immaterial
during each of the last three years. The Company mitigates its credit risk by maintaining credit insurance on most of its significant
customers.
59
Inventories
Substantially all of the Companys inventories
are valued at the lower of cost, principally determined by the last-in, first-out (LIFO) method, or net realizable value. Elements of
cost in inventories include raw materials, direct labor and manufacturing overhead.
Property,
Plant and Equipment
Property, plant and equipment are carried at
cost. Depreciation is computed over useful lives using the straight-line and declining balance methods predominately over 15
years for buildings, 7
years for machinery and equipment and 3
years for tools and dies. When assets are retired, sold or otherwise disposed of, their gross carrying values and related accumulated
depreciation are removed from the accounts and a gain or loss on such disposals is recognized when appropriate.
Maintenance and repairs are charged to operations;
replacements and improvements are capitalized.
Long-lived
Assets
The Company evaluates the carrying value of long-lived
assets to be held and used when events or changes in circumstances indicate the carrying value may not be recoverable. In performing this
review, the carrying value of the assets is compared to the projected undiscounted cash flows to be generated from the assets. If the
sum of the undiscounted expected future cash flows is less than the carrying value of the assets, the assets are considered to be impaired.
Impairment losses are measured as the amount by which the carrying value of the assets exceeds their fair value. The Company bases fair
value of the assets on quoted market prices if available or, if not available, quoted market prices of similar assets. Where quoted market
prices are not available, the Company estimates fair value using the estimated future cash flows generated by the assets discounted at
a rate commensurate with the risks associated with the recovery of the assets. As of December 31, 2025, the Company does not believe there
are any indications of impairment related to long-lived assets.
Goodwill
The Companys goodwill represents
the excess of the purchase price of business combinations over the fair value of the net assets acquired. We assess goodwill for impairment
on an annual basis during the fourth quarter of each year, and between annual tests whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment exists by the amount the fair value of a reporting unit to which goodwill
has been allocated is less than their respective carrying values. The impairment for goodwill is limited to the total amount of goodwill
allocated to the reporting unit. Goodwill impairment testing requires significant judgment and management estimates, including, but not
limited to, the determination of (i)the number of reporting units, (ii)the goodwill and other assets and liabilities to be
allocated to the reporting units and (iii)the fair values of the reporting units. The estimates and assumptions described above,
along with other factors such as discount rates, will significantly affect the outcome of the impairment tests and the amounts of any
resulting impairment losses. As of
60
December 31, 2025, the Company does not believe
there are any indications of impairment related to goodwill.
Income
Taxes
Income taxes are accounted for using the asset
and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to temporary differences between the financial statement carrying amounts
and the tax basis of the Companys assets and liabilities.
Product
Liability
The Company provides for product liability claims
including estimated legal costs to be incurred defending such claims. The provision for product liability claims is charged to cost of
products sold.
Advertising
Costs
The Company includes advertising costs in selling
expenses and these costs are expensed as incurred. Advertising costs for 2025, 2024, and 2023, were $3.3
million, $3.4
million, and $3.1
million, respectively.
Shipping
Costs
Costs incurred related to the shipment of products
are included in selling expense. Such costs totaled $3.8
million, $4.3
million, and $4.4
million in 2025, 2024, and 2023, respectively.
Research
and Development
In 2025, 2024, and 2023, the Company spent approximately
$8.4
million, $8.2
million, and $9.8
million, respectively, on research and development activities relating to new products and the improvement of existing products. These
costs are included in costs of products sold and are expensed as incurred. These costs are capitalized for tax purposes under the provisions
of the Tax Cuts and Jobs Act of 2017 that relate to IRS Code Section 174, as discussed in Note 13.
Earnings
per Share
Basic earnings per share is based upon the weighted-average
number of shares of common stock outstanding during the year. Diluted earnings per share reflect the impact of restricted stock units
and deferred stock outstanding using the treasury stock method.
Recent
Accounting Pronouncements
In December of 2023, the FASB issued Accounting Standards
Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The updated accounting
guidance requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the effective tax rate
reconciliation and income taxes paid. The guidance is effective for
61
fiscal years beginning after December 15, 2024. Prospective
application is required, with retrospective application permitted. Refer to Note 13, Income Taxes, for the updated presentation.
In November 2024, the FASB issued ASU No. 2024-03,
Income StatementReporting Comprehensive IncomeExpense 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.
In December 2025, the FASB issued its final ASU
which makes improvements to the Accounting Standards Codification in response to feedback from stakeholders. This standard, issued as
ASU 2025-12, specifically updates the Codification for a broad range of Topics arising from technical corrections, unintended application
of the Codification, clarifications, and other minor improvements. This update is effective for annual reporting periods beginning after
December 15, 2026, including interim reporting periods within those annual reporting periods. The Company is currently evaluating the
impact of adopting ASU 2025-12.
In September 2025, the FASB issued ASU No. 2025-06,
Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal
Use Software. The standard modernizes and simplifies guidance for internal-use software costs. This guidance is effective for annual
reporting periods beginning after December 15, 2027 including interim reporting periods within those annual reporting periods. The Company
is evaluating the impact of this guidance on its Consolidated Financial Statements.
|
2. |
Acquisition of Anderson Manufacturing Assets | |
As described in Note 1, the
Company closed on the Anderson Acquisition on July 1, 2025. The Company paid $15.0
million dollars in cash for Anderson assets at the closing of the transaction, with an additional $0.8
million held back for the purposes described below. The Anderson Acquisition included, among other things, property, equipment, inventory,
and all intellectual property related to Anderson, including the Anderson trademarks and tradenames, and all derivatives thereof.
The primary purpose of the
Anderson Acquisition was to increase the Companys production capabilities. The Anderson Acquisition was accounted for in accordance
with ASC Topic 805, Business Combinations. Accordingly, the total purchase price has been allocated to the assets based on their fair
value at the date of acquisition. The Company assumed no debt or long-term liabilities in this transaction. These allocations reflect
various provisional estimates that were based on the information available at the time and are subject to change during the purchase price
allocation period.
62
The following table summarizes
the Company's preliminary fair value of the assets acquired, as of July 1, 2025, for the Companys Anderson Acquisition.
|
Purchase Price |
|
|
| |
|
Cash paid to sellers |
|
$ |
15,010 |
| |
|
Holdback |
|
|
750 |
| |
|
Total Purchase Price |
|
$ |
15,760 |
| |
|
|
|
|
|
| |
|
Purchase Price Allocation |
|
|
|
| |
|
Assets Acquired |
|
|
|
| |
|
Land and building |
|
$ |
5,900 |
| |
|
Machinery and equipment |
|
|
5,800 |
| |
|
Inventory |
|
|
2,045 |
| |
|
Other assets |
|
|
1,625 |
| |
|
Goodwill |
|
|
390 |
| |
|
Net Assets Acquired |
|
$ |
15,760 |
| |
Identifiable assets acquired
were recorded at their estimated fair values based on the methodology described under Fair Value Measurements in Note 1
- Significant Accounting Policies.
The Fair Value of any intangible
assets acquired in the Anderson Acquisition were considered negligible.
The Company held back $0.8
million from their purchase payment for potential repair mediation costs, which will either be applied to repair costs or paid to Anderson.
This holdback was included in trade accounts payable and accrued expenses on the Companys Condensed Consolidated Balance Sheet
at December 31, 2025.
The excess purchase price
over the fair value of the assets acquired was recorded as goodwill in the amount of $0.4
million, primarily related to assembled workforce and increased manufacturing capacity. The goodwill is expected to be deductible for
tax purposes. The Company incurred acquisition related costs of approximately $0.5
million, which are included in selling, general and administrative expenses in the Companys Consolidated Statements of Income and
Comprehensive Income.
The pro forma impact of the
acquisition and the results of operations attributable to Anderson in 2024 and 2025 have not been presented, as they are not material
to the Companys consolidated results of operations.
63
|
3. |
Revenue Recognition and Contracts with Customers | |
The impact of ASC 606
on revenue recognized during the years ended December 31, 2025, December 31, 2024, and December 31, 2023 is as follows:
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
Contract liabilities with customers at January 1, |
|
$ |
|
|
|
$ |
149 |
|
|
$ |
1,031 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Revenue recognized |
|
|
(1,669 |
) |
|
|
(149 |
) |
|
|
(4,084 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Revenue deferred |
|
|
1,669 |
|
|
|
|
|
|
|
3,202 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Contract liabilities with customers
at December 31, |
|
$ |
|
|
|
$ |
|
|
|
$ |
149 |
| |
During the year ended December 31, 2025, the
Company deferred $1.7
million of revenue, completely offset by the recognition of $1.7
million of revenue previously deferred as the performance obligations relating to the shipment of free products were all satisfied during
the year. This resulted in there being no change in firearms sales for the year ended December 31, 2025 and there being no
deferred contract revenue liability at December 31, 2025.
During the year ended December 31, 2024, the
Company did not defer any revenue and recognized $0.1
million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied. This resulted
in a net increase in firearms sales for the year ended December 31, 2024 of $0.1
million and there being no deferred contract revenue liability at December 31, 2024.
During the year ended December 31, 2023, the
Company deferred $3.2
million of revenue, offset by the recognition of $4.1
million of revenue previously deferred as the performance obligations relating to the shipment of free products were satisfied. This resulted
in a net increase in firearms sales for the year ended December 31, 2023 of $0.9
million and a deferred contract revenue liability at December 31, 2023 of $0.1
million.
Practical
Expedients and Exemptions
The Company has elected to account for shipping
and handling activities that occur after control of the related product transfers to the customer as fulfillment activities that are recognized
upon shipment of the goods.
64
|
4. |
Trade Receivables, Net | |
Trade receivables consist of the following:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Trade receivables |
|
$ |
66,217 |
|
|
$ |
68,855 |
| |
|
Allowance for doubtful accounts |
|
|
(400 |
) |
|
|
(400 |
) | |
|
Allowance for discounts |
|
|
(1,307 |
) |
|
|
(1,310 |
) | |
|
|
|
$ |
64,510 |
|
|
$ |
67,145 |
| |
In 2025, the largest individual trade receivable
balances accounted for 28%,
25%,
and 18%
of total trade receivables, respectively.
In 2024, the largest individual trade receivable
balances accounted for 26%,
20%,
14%,
and 11%
of total trade receivables, respectively.
|
5. |
Inventories | |
Inventories consist of the following:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
Inventory at FIFO |
|
|
|
|
|
|
|
| |
|
Finished goods |
|
$ |
10,993 |
|
|
$ |
26,022 |
| |
|
Materials and products in process |
|
|
102,173 |
|
|
|
123,395 |
| |
|
Gross inventories |
|
|
113,166 |
|
|
|
149,417 |
| |
|
Less:LIFO reserve |
|
|
(67,058 |
) |
|
|
(66,398 |
) | |
|
Less:excess and obsolescence reserve |
|
|
(3,227 |
) |
|
|
(6,533 |
) | |
|
Net inventories |
|
$ |
42,881 |
|
|
$ |
76,486 |
| |
|
6. |
Property, Plant and Equipment | |
Property, plant and equipment consist of the following:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Land and improvements |
|
$ |
3,333 |
|
|
$ |
2,826 |
| |
|
Buildings and improvements |
|
|
83,368 |
|
|
|
76,153 |
| |
|
Machinery and equipment |
|
|
352,353 |
|
|
|
333,365 |
| |
|
Dies and tools |
|
|
67,745 |
|
|
|
65,278 |
| |
|
Property, plant and equipment |
|
|
506,799 |
|
|
|
477,622 |
| |
|
Less allowances for depreciation |
|
|
(426,702 |
) |
|
|
(406,373 |
) | |
|
Net property, plant and equipment |
|
$ |
80,097 |
|
|
$ |
71,249 |
| |
65
Depreciation expense totaled $22.0
million, $21.1
million, and $21.1
million in 2025, 2024, and 2023, respectively.
|
7. |
Other Assets | |
Other assets consist of the following:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Patents, at cost |
|
$ |
10,339 |
|
|
$ |
10,339 |
| |
|
Deposits on capital items |
|
|
12,148 |
|
|
|
18,443 |
| |
|
Marlin trade name, at cost |
|
|
7,800 |
|
|
|
7,800 |
| |
|
Accumulated amortization |
|
|
(9,384 |
) |
|
|
(8,524 |
) | |
|
Other |
|
|
9,673 |
|
|
|
9,689 |
| |
|
|
|
$ |
30,576 |
|
|
$ |
37,747 |
| |
The capitalized cost of patents is amortized
using the straight-line method over their useful lives. Expenses related to patent amortization was $0.4
million in 2025, $0.5
million in 2024, and $0.4
million in 2023. The estimated annual patent amortization expense for each of the next five years is $0.4
million. Costs incurred to maintain existing patents are charged to expense in the year incurred. The Marlin trade name will be amortized
using the straight-line method over its useful life. The estimated annual trade name amortization cost for each of the next five years
is $0.4
million. The intangible asset related to Marlin customer relationships are included in Other above and will be amortized using the straight-line
method over its useful life. The estimated annual customer relationship name amortization expense for each of the next five years is $0.1
million.
|
8. |
Leased Assets | |
The Company leases certain of its real estate
and equipment. The Company has evaluated all its leases and determined that all are operating
leases under the definitions of the guidance of ASU 2016-02. The Companys lease agreements generally do not require
material variable lease payments, residual value guarantees or restrictive covenants.
66
The Company uses the effective interest method
to record right-of-use assets equal to the present value of the contractual liability for future lease payments. The table below presents
the right-of-use assets and related lease liabilities recognized on the condensed consolidated balance sheet as of December 31, 2025:
|
|
|
Balance
Sheet Line Item |
|
December
31, 2025 |
|
|
December
31, 2024 |
| |
|
Right-of-use assets |
|
Other assets |
|
$ |
1,805 |
|
|
$ |
2,345 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Operating lease liabilities |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Current portion |
|
Trade accounts payable and accrued expenses |
|
$ |
647 |
|
|
$ |
598 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Noncurrent portion |
|
Lease liabilities |
|
|
1,158 |
|
|
|
1,747 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total operating lease liabilities |
|
|
|
$ |
1,805 |
|
|
$ |
2,345 |
| |
The depreciable lives of right-of-use assets are
limited by the lease term and are amortized on a straight line basis over the life of the lease.
The Companys leases generally do not provide
an implicit interest rate, and therefore the Company calculates an incremental borrowing rate to determine the present value of its operating
lease liabilities.
The table below includes cash paid for our operating
lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:
|
|
|
Year
Ended |
| |
|
|
|
December
31, 2025 |
|
|
December
31, 2024 |
| |
|
|
|
|
|
|
|
| |
|
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
540 |
|
|
$ |
796 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Cash amounts paid for short-term leases |
|
$ |
492 |
|
|
$ |
449 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Right-of-use assets obtained in exchange for lease liabilities |
|
$ |
70 |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Weighted average remaining lease term (years) |
|
|
6.3 |
|
|
|
7.7 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Weighted average discount rate |
|
|
8.0% |
|
|
|
8.0% |
| |
67
The following table reconciles the undiscounted
future minimum lease payments to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of December
31, 2025:
|
2026 |
|
$ |
771 |
| |
|
2027 |
|
|
297 |
| |
|
2028 |
|
|
230 |
| |
|
2029 |
|
|
160 |
| |
|
2030 |
|
|
160 |
| |
|
Thereafter |
|
|
640 |
| |
|
Total undiscounted future minimum lease payments |
|
|
2,258 |
| |
|
Less: Difference between
undiscounted lease payments & the present value of future lease payments |
|
|
(453 |
) | |
|
Total operating lease liabilities |
|
$ |
1,805 |
| |
Certain of the Companys lease agreements
contain renewal options at the Companys discretion. The Company does not recognize right-of-use assets or lease liabilities for
leases of one year or less or for renewal periods unless it is reasonably certain that the Company will exercise the renewal option at
the inception of the lease or when a triggering event occurs. The Companys weighted average remaining lease term for operating
leases as of December 31, 2025 is 6.3
years.
|
9. |
Trade Accounts Payable and Accrued Expenses | |
Trade accounts payable and accrued expenses consist
of the following:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Trade accounts payable |
|
$ |
10,044 |
|
|
$ |
13,170 |
| |
|
Federal excise taxes payable |
|
|
13,913 |
|
|
|
13,192 |
| |
|
Accrued other |
|
|
10,165 |
|
|
|
9,388 |
| |
|
|
|
$ |
34,122 |
|
|
$ |
35,750 |
| |
|
10. |
Line of Credit | |
On January 7, 2022, the Company entered into
a three-year, $40
million unsecured revolving line of credit agreement with a bank. On June 6, 2024, the Company amended its existing line of credit agreement,
which now expires January
7, 2028. Borrowings under this new
facility bear interest at the applicable Secured Overnight Financing Rate (SOFR), plus 150 basis points, plus an additional adjustment
of eight basis points. The Company is also charged one-quarter of a percent (0.25%)
per year on the unused portion. At December 31, 2025, the Company was in compliance with the terms and covenants of the credit facility.
|
11. |
Employee Benefit Plans | |
The Company sponsors a qualified defined-contribution
401(k) plan that covers substantially all of its employees. Under the terms of the 401(k) plan, the Company matches a certain portion
of
68
employee contributions to their individual 401(k)
accounts using the safe harbor guidelines provided in the Internal Revenue Code. Expenses related to matching employee contributions
to the 401(k) plan were $4.2
million, $4.1
million, and $4.7
million in 2025, 2024, and 2023, respectively.
Additionally, in 2025, 2024, and 2023 the Company
provided discretionary supplemental contributions to the individual 401(k) accounts of substantially all employees. Each employee received
a supplemental contribution to their account based on a uniform percentage of qualifying compensation established annually. The cost of
these supplemental contributions totaled $7.0
million, $7.0
million, and $6.9
million in 2025, 2024, and 2023, respectively.
|
12. |
Other Operating Income, Net | |
Other operating income, net consists of the following:
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(Loss) gain on disposal of operating assets |
|
$ |
(187 |
) |
|
$ |
|
|
|
$ |
5 |
| |
|
13. |
Income Taxes | |
The Company files income tax returns in the U.S.
federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state
income tax examinations by tax authorities for years before 2018.
Our (loss) income before income taxes is derived solely from within
the United States.
The federal and state income tax provision consisted of the following:
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
Current |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Federal |
|
$ |
(49 |
) |
|
$ |
10,310 |
|
|
$ |
14,763 |
| |
|
State |
|
|
(146 |
) |
|
|
1,607 |
|
|
|
1,713 |
| |
|
Total current tax expense |
|
|
(195 |
) |
|
|
11,917 |
|
|
|
16,476 |
| |
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Federal |
|
|
(2,150 |
) |
|
|
(4,190 |
) |
|
|
(5,285 |
) | |
|
State |
|
|
(425 |
) |
|
|
(515 |
) |
|
|
(582 |
) | |
|
Total deferred tax expense |
|
|
(2,575 |
) |
|
|
(4,705 |
) |
|
|
(5,867 |
) | |
|
Provision for income taxes |
|
$ |
(2,770 |
) |
|
$ |
7,212 |
|
|
$ |
10,609 |
| |
The reconciliation of the U.S. federal income
tax provision at the statutory federal income tax rate of 21%
for the year ended December 31, 2025, to our provision for income taxes was as follows:
The table reflects the ASU 2023-09,*Income
Taxes (Topic 740): Improvements to Income Tax Disclosures*(ASU 2023-09), which was adopted prospectively for the year ended December
31, 2025. See Note 1. Organization and Summary of Significant Accounting Policies *Recently*
69
*Adopted Accounting Pronouncements*
for additional information on the adoption of ASU 2023-09.
|
Year
ended December 31, 2025 |
|
Amount |
|
|
Percent |
| |
|
Statutory federal income tax rate |
|
$ |
(1,504 |
) |
|
|
21.0 |
% | |
|
State and local income taxes, net of federal tax benefit |
|
|
(570 |
) |
|
|
8.0 |
|
|
Research and development tax credits |
|
|
(1,027 |
) |
|
|
14.3 |
|
|
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
| |
|
Share based compensation |
|
|
521 |
|
|
|
(7.3 |
) | |
|
Officers compensation 162(M) |
|
|
(204 |
) |
|
|
2.9 |
|
|
Other nontaxable or nondeductible items |
|
|
63 |
|
|
|
(0.9 |
) | |
|
Other |
|
|
(49 |
) |
|
|
0.7 |
|
|
Effective income tax rate |
|
|
(2,770 |
) |
|
|
38.7 |
% | |
State taxes in New Hampshire made up the majority
(greater than 50%)
of the tax effect in the state and local income taxes, net of federal income tax effect category for 2025.
The reconciliation of the U.S. federal income
tax provision at the statutory federal income tax rate of 21%
for each of the years ended December 31, 2024 and 2023, respectively, to our provision for income taxes, as previously disclosed, prior
to the adoption of ASU 2023-09, were as follows:
|
Year
ended December 31, |
|
2024 |
|
|
2023 |
| |
|
Statutory federal income tax rate |
|
|
21.0 |
% |
|
|
21.0 |
% | |
|
State income taxes, net of federal tax benefit |
|
|
1.5 |
|
|
|
2.2 |
| |
|
Research and development tax credits |
|
|
(5.9 |
) |
|
|
(2.7 |
) | |
|
Other |
|
|
2.5 |
|
|
|
(2.5 |
) | |
|
Effective income tax rate |
|
|
19.1 |
% |
|
|
18.0 |
% | |
The Company made income tax payments of approximately
$2.8
million, $10.6
million, and $26.0
million, during 2025, 2024, and 2023, respectively. The
amounts of cash paid for income taxes, for the year ended December 31, 2025, were as follows:
|
Year
ended December 31, 2025 |
|
Amount |
|
|
Percent |
| |
|
Federal income taxes paid |
|
$ |
3,000 |
|
|
|
106.0 |
% | |
|
State and local income taxes paid |
|
|
|
|
|
|
|
| |
|
New Hampshire |
|
|
100 |
|
|
|
3.6 |
% | |
|
North Carolina |
|
|
(200 |
) |
|
|
(7.1 |
)% | |
|
Other immaterial state taxes paid |
|
|
(69 |
) |
|
|
(2.5 |
)% | |
|
Total cash paid for income taxes |
|
$ |
2,831 |
|
|
|
100 |
% | |
70
Deferred tax assets and liabilities reflect the
net tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for income tax purposes. Significant
components of the Companys deferred tax assets and liabilities are as follows:
|
December
31, |
|
2025 |
|
|
2024 |
| |
|
|
|
|
|
|
|
| |
|
Deferred tax assets |
|
|
|
|
|
|
|
| |
|
Net Operating Loss Carryforwards |
|
$ |
5,461 |
|
|
$ |
|
| |
|
Research and development tax credits |
|
|
1,036 |
|
|
|
|
| |
|
Capitalized research and development costs |
|
|
7,361 |
|
|
|
12,566 |
| |
|
Employee compensation and benefits |
|
|
2,553 |
|
|
|
2,483 |
| |
|
Allowances for doubtful accounts and discounts |
|
|
434 |
|
|
|
452 |
| |
|
Inventories |
|
|
902 |
|
|
|
1,831 |
| |
|
Stock-based compensation |
|
|
2,989 |
|
|
|
1,876 |
| |
|
ASC 842 lease liabilities |
|
|
428 |
|
|
|
|
| |
|
Other |
|
|
850 |
|
|
|
1,537 |
| |
|
Total deferred tax assets |
|
|
22,014 |
|
|
|
20,745 |
| |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
| |
|
ASC 842 right-of-use asset |
|
|
428 |
|
|
|
|
| |
|
Depreciation |
|
|
997 |
|
|
|
2,868 |
| |
|
Other |
|
|
869 |
|
|
|
1,196 |
| |
|
Total deferred tax liabilities |
|
|
2,294 |
|
|
|
4,064 |
| |
|
Net deferred tax assets |
|
$ |
19,720 |
|
|
$ |
16,681 |
| |
The Company expects to realize its deferred tax
assets through tax deductions against future taxable income*.*
The Company does not believe it has included any
uncertain tax positions in its federal income tax return or any of the state income tax returns it is currently filing.
The Company has made an evaluation of the potential impact of additional state taxes being assessed by jurisdictions in which the Company
does not currently consider itself liable. The Company does not anticipate that such additional taxes, if any, would result in a material
change to its financial position.
71
|
14. |
Earnings Per Share | |
Set forth below is a reconciliation of the numerator
and denominator for the basic and diluted earnings per share calculations for the periods indicated:
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net (loss) income |
|
$ |
(4,391 |
) |
|
$ |
30,563 |
|
|
$ |
48,215 |
| |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Weighted average number of common shares outstanding Basic |
|
|
16,235,995 |
|
|
|
17,088,205 |
|
|
|
17,676,955 |
| |
|
Dilutive effect of options and restricted
stock units outstanding under the Companys employee compensation plans |
|
|
|
|
|
|
181,896 |
|
|
|
134,263 |
| |
|
Weighted average number of common shares outstanding
Diluted |
|
|
16,235,995 |
|
|
|
17,270,101 |
|
|
|
17,811,218 |
| |
|
15. |
Stock Repurchases | |
In 2025, 2024, and 2023 the Company repurchased
shares of its common stock. Details of these purchases are as follows:
|
Period |
|
Total
Number of Shares Purchased |
|
|
Average
Price Paid per Share |
|
|
Total
Number of Shares Purchased as Part of Publicly Announced Program |
|
|
Maximum
Dollar Value of Shares that May Yet Be Purchased Under the Program |
| |
|
Fourth Quarter 2023 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
October 1 to October 28 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
October 29 to November 25 |
|
|
179,341 |
|
|
$ |
45.20 |
|
|
|
179,341 |
|
|
|
|
| |
|
November 26 to December 31 |
|
|
84,721 |
|
|
$ |
43.67 |
|
|
|
84,721 |
|
|
|
|
| |
|
First Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
January 1 to January 27 |
|
|
7,317 |
|
|
$ |
43.42 |
|
|
|
7,317 |
|
|
|
|
| |
|
January 28 to February 24 |
|
|
20,307 |
|
|
$ |
42.93 |
|
|
|
20,307 |
|
|
|
|
| |
|
February 25 to March 30 |
|
|
47,400 |
|
|
$ |
42.79 |
|
|
|
47,400 |
|
|
|
|
| |
|
Second Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
March 31 to April 27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
April 28 to May 25 |
|
|
28,924 |
|
|
$ |
42.92 |
|
|
|
28,924 |
|
|
|
|
| |
|
May 26 to June 29 |
|
|
373,969 |
|
|
$ |
42.27 |
|
|
|
373,969 |
|
|
|
|
| |
|
Third Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 30 to July 27 |
|
|
156,517 |
|
|
$ |
41.27 |
|
|
|
156,517 |
|
|
|
|
| |
|
July 28 to August 24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
August 25 to September 28 |
|
|
64,325 |
|
|
$ |
40.66 |
|
|
|
64,325 |
|
|
|
|
| |
|
Fourth Quarter 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
September 29 to October 26 |
|
|
11,340 |
|
|
$ |
40.50 |
|
|
|
11,340 |
|
|
|
|
| |
|
October 27 to November 23 |
|
|
52,129 |
|
|
$ |
39.50 |
|
|
|
52,129 |
|
|
|
|
| |
|
November 23 to December 31 |
|
|
72,832 |
|
|
$ |
34.81 |
|
|
|
72,832 |
|
|
|
|
| |
|
First Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
January 1 to January 25 |
|
|
28,720 |
|
|
$ |
34.44 |
|
|
|
28,720 |
|
|
|
|
| |
|
January 26 to February 22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
February 23 to March 29 |
|
|
50,480 |
|
|
$ |
39.62 |
|
|
|
50,480 |
|
|
|
|
| |
|
Second Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
March 30 to April 26 |
|
|
99,951 |
|
|
$ |
37.98 |
|
|
|
99,951 |
|
|
|
|
| |
|
April 27 to May 24 |
|
|
171,061 |
|
|
$ |
35.20 |
|
|
|
171,061 |
|
|
|
|
| |
|
May 25 to June 28 |
|
|
92,872 |
|
|
$ |
35.86 |
|
|
|
92,872 |
|
|
|
|
| |
|
Third Quarter 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
June 29 to July 26 |
|
|
116,667 |
|
|
$ |
35.24 |
|
|
|
116,667 |
|
|
|
|
| |
|
July 27 to August 23 |
|
|
173,014 |
|
|
$ |
33.75 |
|
|
|
173,014 |
|
|
|
|
| |
|
August 24 to September 27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total |
|
|
1,831,887 |
|
|
$ |
39.48 |
|
|
|
1,831,887 |
|
|
$ |
14,300,000 |
| |
72
All of these purchases were made with cash held
by the Company and no debt was incurred
At December 31, 2025, approximately $14.3
million remained authorized for share repurchases.
|
16. |
Compensation Plans | |
In May 2017, the Companys shareholders
approved the 2017 Stock Incentive Plan (the 2017 SIP) under which employees, independent contractors, and non-employee directors
may be granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any of which may or may not require
the satisfaction of performance objectives. Vesting requirements are determined by the Compensation Committee of the Board of Directors*.*The Company has reserved 750,000
shares for issuance under the 2017 SIP.
In June 2023, the Companys shareholders approved
the 2023 Stock Incentive Plan (the 2023 SIP) under which employees, independent contractors, and non-employee directors
may be granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any of which may or may not require
the satisfaction of performance objectives. Vesting requirements are determined by the Compensation Committee of the Board of Directors.
The Company reserved 1,000,000
shares for issuance under the 2023 SIP, of which 418,000
shares remain available for future grants as of December 31, 2025. Approximately 120,000
shares remaining from the 2017 SIP will be available for future grants under the terms of the 2023 SIP. Since the shareholder approval
of the 2023 SIP, no additional awards have been or will be granted under the 2017 SIP. Previously granted and outstanding awards under
the 2017 SIP will remain subject to the terms of the 2017 SIP.
73
Compensation expense related to deferred stock, restricted
stock, and restricted stock units is recognized based on the grant-date fair value of the Companys common stock, using either the
actual share price or an estimated value using the Monte Carlo valuation model. The total stock-based compensation cost included in the
Statements of Income was $7.4
million, $5.8
million, and $6.2
million in 2025, 2024, and 2023, respectively.
Deferred
Stock
Deferred stock awards vest based on the passage
of time or the Companys attainment of performance objectives. Upon vesting, these awards convert one-for-one to common stock.
In 2025, 12,341
deferred stock awards were issued to non-employee directors that will vest in June 2026, 15,888
deferred stock awards were issued to non-employee directors that will vest in June 2028 and a 2,786
deferred stock award was issued to a non-employee director that will vest in June 2030.
In 2024, 9,291
deferred stock awards were issued to non-employee directors that will vest in June 2025 and 11,992
deferred stock awards were issued to non-employee directors that will vest in June 2027.
In 2023, 7,566
deferred stock awards were issued to non-employee directors that vested in June 2024 and 9,760
deferred stock awards were issued to non-employee directors that will vest in June 2026.
Compensation expense related to these awards
is amortized ratably over the vesting period. Compensation expense related to these awards was $1.0
million in 2025, $0.9
million in 2024, and $0.9
million in 2023.
At December 31, 2025, there was $1.2
million of unrecognized compensation cost related to deferred stock that is expected to be recognized over a period of 4.5
years.
Restricted Stock Units
The Company grants restricted stock units (RSUs)
to senior employees. Some of these RSUs are retention awards and have only time-based vesting. Other RSUs have a vesting
double trigger. The vesting of these RSUs is dependent on the achievement of corporate objectives established by
the Compensation Committee of the Board of Directors, including return on net operating assets, stock performance, and the passage of
time.
During 2025, 248,000
restricted stock units were issued. Compensation costs related to these restricted stock units was $9.5
million, of which $2.6
million was recognized in 2025. The costs
74
are being recognized ratably over the remaining
periods required before the units vest, which range from 24
to 38
months.
During 2024, 153,000
restricted stock units were issued. Compensation costs related to these restricted stock units was $6.8
million, of which $1.9
million was recognized in 2024. The costs are being recognized ratably over the remaining periods required before the units vest, which
ranged from 24
to 26
months.
During 2023, 114,000
restricted stock units were issued. Compensation costs related to these restricted stock units was $6.1
million, of which $1.3
million was recognized in 2023. The costs are being recognized ratably over the remaining periods required before the units vest, which
ranged from 24
to 26
months.
At December 31, 2025, there was $9.9
million of unrecognized compensation cost related to restricted stock units that is expected to be recognized over a period of 3.3
years.
|
17. |
Operating Segment Information | |
The Company has two
reportable operating segments: firearms and castings. The firearms segment manufactures and sells rifles, pistols, and revolvers principally
to a number of federally-licensed, independent wholesale distributors primarily located in the United States. The castings segment manufactures
and sells steel investment castings and metal injection molding parts.
Corporate segment income relates to interest income,
the sale of non-operating assets, and other non-operating activities. Corporate segment assets consist of cash and other non-operating
assets.
The Company evaluates performance and allocates
resources, in part, based on income (loss) before taxes. The accounting policies of the reportable segments are the same as those described
in the summary of significant accounting policies (see Note 1). Intersegment sales are recorded at the Companys cost plus a fixed
profit percentage.
This segment structure reflects the financial
information and reports used by the Companys management, specifically its CODM, to make decisions regarding the Companys
business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280,
Segment Reporting. The Companys reportable segments are not aggregated.
The Companys method for measuring performance
of a reportable segment is primarily gross profit. The CODM does not review disaggregated assets by segment. The Company adopted ASU 2023-07
in January 2025. The most significant provision was the required disclosure of significant segment expenses that are regularly provided
to the CODM. The Companys CODM periodically reviews cost of goods sold by segment and treats it as a significant segment expense.
75
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
543,474 |
|
|
$ |
532,608 |
|
|
$ |
540,746 |
| |
|
Castings |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Unaffiliated |
|
|
2,583 |
|
|
|
3,035 |
|
|
|
3,021 |
| |
|
Intersegment |
|
|
23,570 |
|
|
|
31,528 |
|
|
|
33,086 |
| |
|
|
|
|
26,153 |
|
|
|
34,563 |
|
|
|
36,107 |
| |
|
Eliminations |
|
|
(23,570 |
) |
|
|
(31,528 |
) |
|
|
(33,086 |
) | |
|
|
|
$ |
546,057 |
|
|
$ |
535,643 |
|
|
$ |
543,767 |
| |
|
Costs of Goods Sold |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
461,416 |
|
|
$ |
417,222 |
|
|
$ |
407,068 |
| |
|
Castings |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Unaffiliated |
|
|
3,490 |
|
|
|
4,006 |
|
|
|
3,080 |
| |
|
Intersegment |
|
|
23,570 |
|
|
|
31,528 |
|
|
|
33,086 |
| |
|
|
|
|
27,060 |
|
|
|
35,534 |
|
|
|
36,166 |
| |
|
Eliminations |
|
|
(23,570 |
) |
|
|
(31,528 |
) |
|
|
(33,086 |
) | |
|
|
|
$ |
464,906 |
|
|
$ |
421,228 |
|
|
$ |
410,148 |
| |
|
Gross (Loss) Profit |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
82,058 |
|
|
$ |
115,386 |
|
|
$ |
133,678 |
| |
|
Castings |
|
|
(907 |
) |
|
|
(971 |
) |
|
|
(59 |
) | |
|
|
|
$ |
81,151 |
|
|
$ |
114,415 |
|
|
$ |
133,619 |
| |
|
Operating (Loss) Income |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
(10,722 |
) |
|
$ |
33,273 |
|
|
$ |
52,887 |
| |
|
Castings |
|
|
(1,577 |
) |
|
|
(1,619 |
) |
|
|
(803 |
) | |
|
|
|
$ |
(12,299 |
) |
|
$ |
31,654 |
|
|
$ |
52,084 |
| |
|
(Loss) Income Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
(9,965 |
) |
|
$ |
34,051 |
|
|
$ |
53,723 |
| |
|
Castings |
|
|
(1,535 |
) |
|
|
(1,616 |
) |
|
|
(799 |
) | |
|
Corporate |
|
|
4,339 |
|
|
|
5,340 |
|
|
|
5,900 |
| |
|
|
|
$ |
(7,161 |
) |
|
$ |
37,775 |
|
|
$ |
58,824 |
| |
|
Year
ended December 31, |
|
2025 |
|
|
2024 |
|
|
2023 |
| |
|
Identifiable Assets |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
205,061 |
|
|
$ |
230,024 |
|
|
$ |
228,699 |
| |
|
Castings |
|
|
7,659 |
|
|
|
9,303 |
|
|
|
11,144 |
| |
|
Corporate |
|
|
129,277 |
|
|
|
144,707 |
|
|
|
158,974 |
| |
|
|
|
$ |
341,997 |
|
|
$ |
384,034 |
|
|
$ |
398,817 |
| |
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
3,445 |
|
|
$ |
3,055 |
|
|
$ |
3,055 |
| |
|
Castings |
|
|
209 |
|
|
|
209 |
|
|
|
209 |
| |
|
|
|
$ |
3,654 |
|
|
$ |
3,264 |
|
|
$ |
3,264 |
| |
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
20,853 |
|
|
$ |
19,952 |
|
|
$ |
19,301 |
| |
|
Castings |
|
|
1,153 |
|
|
|
1,154 |
|
|
|
1,814 |
| |
|
|
|
$ |
22,006 |
|
|
$ |
21,106 |
|
|
$ |
21,115 |
| |
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Firearms |
|
$ |
30,509 |
|
|
$ |
20,488 |
|
|
$ |
15,395 |
| |
|
Castings |
|
|
347 |
|
|
|
333 |
|
|
|
401 |
| |
|
|
|
$ |
30,856 |
|
|
$ |
20,821 |
|
|
$ |
15,796 |
| |
76
In 2025, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys - 27%;
Sports South - 22%;
and Davidsons - 18%.
In 2024, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys - 28%;
Sports South - 18%;
and Davidsons - 16%.
In 2023, the Companys largest customers
and the percent of firearms sales they represented were as follows: Lipseys - 24%;
Davidsons - 19%;
and Sports South -15%.
The Companys assets are located entirely
in the United States and domestic sales represented at least 94%
of total sales in 2025, 2024, and 2023.
|
18. |
Quarterly Results of Operations (Unaudited) | |
The following is a tabulation of the unaudited
quarterly results of operations for the two years ended December 31, 2025:
|
|
|
Three
Months Ended |
| |
|
|
|
|
3/29/25 |
|
|
|
6/28/25 |
|
|
|
9/27/25 |
|
|
|
12/31/25 |
| |
|
Net Sales |
|
$ |
135,738 |
|
|
$ |
132,491 |
|
|
$ |
126,766 |
|
|
$ |
151,062 |
| |
|
Gross profit |
|
|
29,895 |
|
|
|
5,146 |
|
|
|
19,155 |
|
|
|
26,955 |
| |
|
Net income (loss) |
|
|
7,768 |
|
|
|
(17,226 |
) |
|
|
1,582 |
|
|
|
3,485 |
| |
|
Basic earnings per share |
|
|
0.47 |
|
|
|
(1.05 |
) |
|
|
0.10 |
|
|
|
0.22 |
| |
|
Diluted earnings per share |
|
$ |
0.46 |
|
|
$ |
(1.05 |
) |
|
$ |
0.10 |
|
|
$ |
0.21 |
| |
|
|
|
Three
Months Ended |
| |
|
|
|
|
3/30/24 |
|
|
|
6/29/24 |
|
|
|
9/28/24 |
|
|
|
12/31/24 |
| |
|
Net Sales |
|
$ |
136,820 |
|
|
$ |
130,761 |
|
|
$ |
122,287 |
|
|
$ |
145,775 |
| |
|
Gross profit |
|
|
29,403 |
|
|
|
29,154 |
|
|
|
22,672 |
|
|
|
33,186 |
| |
|
Net income |
|
|
7,084 |
|
|
|
8,264 |
|
|
|
4,738 |
|
|
|
10,477 |
| |
|
Basic earnings per share |
|
|
0.41 |
|
|
|
0.48 |
|
|
|
0.28 |
|
|
|
0.63 |
| |
|
Diluted earnings per share |
|
$ |
0.40 |
|
|
$ |
0.47 |
|
|
$ |
0.28 |
|
|
$ |
0.62 |
| |
|
19. |
Related Party Transactions | |
From time to time, the Company contracts with
the National Rifle Association (NRA) for some of its promotional and advertising activities. The Company paid the NRA $0.7
million, $0.5
million and $0.5
million in 2025, 2024, and 2023, respectively. One of the Companys Directors served as a Director on the Board of the NRA until
October 27, 2025.
The Company is a member of the National Shooting
Sports Foundation (NSSF), the firearm industry trade association. The
Company paid the NSSF $0.3
million, $0.4
million and $0.3
million in 2025, 2024, and 2023, respectively. One of the Companys Directors also serves on the Board of the NSSF.
77
|
20. |
Contingent Liabilities | |
As of December 31, 2025, the Company was a defendant
in nine (9) lawsuits and is aware of certain other claims. The lawsuits generally fall into the categories of municipal litigation, unfair
trade practices, product liability, employment, and trademark litigation. One (1) breach of contract matter was fully and finally resolved
during the quarter. Material matters and developments are discussed in turn below.
Municipal
Litigation
Municipal litigation generally includes those
cases brought by cities or other governmental entities against firearms manufacturers, distributors and retailers seeking to recover damages
allegedly arising out of the misuse of firearms by third parties. There are three pending lawsuits of this type: the *City of Gary*,
filed in Indiana State Court in 1999; *The City of Buffalo*, filed in the Supreme Court of the State of New York for Erie County
on December 20, 2022; and *The City of Rochester*, filed in the Supreme Court for the State of New York for Monroe County on December
21, 2022, each of which is described in more detail below.
The *City of Gary* seeks damages, among other
things, for the costs of medical care, police and emergency services, public health services, and other services as well as punitive damages
as well as nuisance abatement and/or injunctive relief to change the design, manufacture, marketing and distribution practices of the
various Defendants. The Complaint alleges, among other claims, negligence in the design of products, public nuisance, negligent distribution
and marketing, negligence per se and deceptive advertising. The case does not allege a specific injury to a specific individual as a result
of the misuse or use of any of the Company's products. After a long procedural history, the Indiana Court of Appeals recently reversed
the trial court and ordered dismissal of the case. The Indiana Court of Appeals denied the Citys request for rehearing, and the
parties are awaiting remand to the trial court for dismissal.
*The City of Buffalo v. Smith & Wesson Brands,
Inc., et al.* and *The City of Rochester v. Smith & Wesson Brands, Inc., et al* were filed on consecutive days in New York
State Court, naming a number of firearm manufacturers, distributors, and retailers as Defendants, including the Company. The complaints
are virtually identical and, relying primarily on New Yorks General Business Law 898-b, generally allege that the criminal
misuse of firearms in their cities is the result of the manufacturing, sales, marketing, and distribution practices of the Defendants.
These matters seek unspecified compensatory damages, creation of an abatement fund, punitive damages and other relief. Both matters were
timely removed to federal court and were consolidated for pretrial purposes only. Those matters were stayed pending the outcome of a different
matter that challenges New Yorks law, which was decided earlier this year. The Defendants have moved to dismiss the cases and are
vigorously defending these matters.
Breach
of Contract
As reported in prior periods, the Company was
a defendant in *Jones v. Sturm, Ruger & Co.,*a purported class action lawsuit arising out of a data breach at Freestyle Solutions,
Inc., the vendor
78
who was hosting the Companys eCommerce
website at the time of the breach. The settlement was finalized during the quarter and the matter is now closed.
Unfair
Trade Practices
*Estate of Suzanne Fountain v. Sturm, Ruger
& Co., Inc.,* and *Estate of Nevin Stanisic v. Sturm, Ruger & Co., Inc.*are pending in Connecticut state court and arise
out of the criminal shootings at the King Soopers supermarket in Boulder, Colorado on March 22, 2021. The
Complaints allege that the Companys advertising and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices
Act and seek damages for the alleged wrongful death of the victims.
The *Fountain*
and *Stanisic* cases were consolidated for discovery purposes only and transferred by the court to the Complex Litigation Docket.
Oral argument on the Companys pending Motion to Strike was held on July 21, 2025 and the court stayed discovery pending the outcome
of that motion. The court denied the motion during the quarter, the stay was lifted and the parties have commenced discovery.
Product
Liability
**
The
Company is a defendant in two unrelated traditional product liability matters, both of which were filed during the quarter. *Fortenberry
v. Sturm, Ruger & Company, Inc.*was served on July 11, 2025 and is pending in the Circuit Court of Arkansas County, Arkansas Northern
District, Civil Division. This complaint alleges a product design defect in an old model Ruger Single-Six revolver and seeks
damages for the death of the plaintiffs decedent.
*Thorne
v. Sturm, Ruger & Company, Inc.*is a product liability matter in which the plaintiff alleges personal injuries resulting from
a manufacturing defect in his SR22 pistol. This matter was served on November 13, 2025 and was withdrawn in January 2026 when the plaintiff
filed a stipulation of dismissal with prejudice.
During
the quarter, *Willeford v. Sturm, Ruger & Company, Inc.,*a product liability case that was filed on July 25, 2025 was withdrawn
when the plaintiff filed a stipulation of dismissal without prejudice.
Employment
The
Company was also named in *Thompson v. Sturm, Ruger & Company, Inc.*, an employment matter that was filed in the Superior Court
for the State of Arizona, in and for the County of Yavapai, which was filed on August 21, 2025. The plaintiff seeks damages for alleged
employment discrimination. The Company disputes the allegations of the complaint and has responded accordingly.
Trademark
Litigation
The
Company is a defendant in *FN Herstal, et al. v. Sturm, Ruger & Company, Inc.*, which is pending in North Carolina. The
Complaint alleges that the Companys use of the initialism
79
SFAR
in connection with the marketing of its Small Frame Autoloading Rifle infringes the Plaintiffs SCAR trademark. The Complaint alleges
violations of the Lanham Act and the North Carolina Unfair and Deceptive Trade Practices Act, as well as trademark infringement
under North Carolina common law. The parties are awaiting decision on dispositive motions.
Summary
of Claimed Damages and Explanation of Product Liability Accruals
Punitive damages,
as well as compensatory damages, are demanded in certain of the lawsuits and claims. In many instances,
the plaintiff does not seek a specified amount of money, though
aggregate amounts ultimately sought may exceed product liability accruals and applicable insurance coverage.
For product liability
claims made between July 10, 2000 and August 31, 2024, insurance coverage
was provided on an annual basis for losses exceeding $5
million per claim, with an aggregate maximum loss of $10
million annually, except for certain claims brought by governments
or municipalities, which are excluded from coverage. Insurance
coverage was not renewed with incumbent carriers effective September 1, 2024. Rather, the Company established a wholly-owned captive insurance
company for claims made on or after September 1, 2024.
Company management
monitors the status of known claims and the product liability accrual, which
includes amounts for asserted and unasserted claims. While it is not possible to forecast the outcome of litigation or the timing of costs,
in the opinion of management, after
consultation with special and corporate counsel, it is not probable and is unlikely that litigation,
including punitive damage claims, will
have a material adverse effect on the financial position of the Company, but
may have a material impact on the Companys financial results
for a particular period.
Product liability claim payments are made when
appropriate if, as, and when claimants and the Company reach agreement upon an amount to finally resolve all claims. Legal costs are paid
as the lawsuits and claims develop, the timing of which may vary greatly from case to case. A time schedule cannot be determined in advance
with any reliability concerning when payments will be made in any given case.
Provision is made for product liability claims
based upon many factors related to the severity of the alleged injury and potential liability exposure, based upon prior claim experience.
Because the Company's experience in defending these lawsuits and claims is that unfavorable outcomes are typically not probable or estimable,
only in rare cases is an accrual established for such costs.
In most cases, an accrual is established only
for estimated legal defense costs. Product liability accruals are periodically reviewed to reflect then-current estimates of possible
liabilities and expenses incurred to date and reasonably anticipated in the future. Threatened product liability claims are reflected
in the Company's product liability accrual on the same basis as actual claims; *i.e.*, an accrual is made for reasonably anticipated
possible liability and claims handling expenses on an ongoing basis.
80
Often, a Complaint does not specify the amount
of damages being sought and range of reasonably possible losses relating to unfavorable outcomes cannot be made. The dollar amount of
damages claimed at December 31, 2025, December 31, 2024, and December 31, 2023 was *de minimis*. The amount claimed at December 31,
2021 was $1.1
million and is set forth as an indication of possible maximum liability the Company might be required to incur in these cases (regardless
of the likelihood or reasonable probability of any or all of this amount being awarded to claimants) as a result of adverse judgments
that are sustained on appeal.
During 2025, three (3)
traditional product liability cases were filed and one (1)
employment case was filed. One (1)
municipal lawsuit was resolved and one (1) breach of contract lawsuit was resolved. As of December 31, 2025, the Company was a defendant
in eight (8)
lawsuits involving its products, including three (3)
municipal lawsuits, two (2)
lawsuits alleging unfair trade practices, two (2)
traditional product liability cases, and one (1)
trademark case.
During 2024, one (1)
trademark lawsuit was filed against the Company, one (1)
negligence lawsuit was resolved, and one (1)
traditional product liability lawsuit was resolved. One (1) municipal lawsuit was dismissed, however the time period in which to file
an appeal has been stayed by the Court and the Company considers this matter still open. As of December 31, 2024, the Company was a defendant
in eight (8)
lawsuits involving its products, including four (4)
municipal lawsuits, two (2)
lawsuits based upon unfair trade practices, one (1) breach of contract, and one (1) trademark litigation.
During 2023, one (1)
traditional product liability lawsuit was filed against the Company and one (1)
was resolved. As of December 31, 2023, the Company was a defendant in seven (7)
lawsuits involving its products, including one (1)
traditional product liability lawsuit, four (4)
municipal lawsuits and two (2)
lawsuits based upon alleged unfair trade practices. The Company was also a defendant in two (2)
negligence lawsuits.
The Companys product liability expense
was $0.8
million in 2025, $0.7
million in 2024, $1.5
million in 2023. This expense includes the cost of outside legal fees, and other expenses incurred in the management and defense of product
liability matters.
81
A roll-forward of the product liability reserve and detail of product
liability expense for the three years ended December 31, 2025 follows:
Balance Sheet Roll-forward for Product Liability
Reserve
|
|
|
|
|
|
|
|
|
Cash
Payments |
|
|
|
| |
|
|
|
Balance
Beginning of Year (a) |
|
|
Accrued
Legal Expense (Income) (b) |
|
|
Legal
Fees (c) |
|
|
Settlements
(d) |
|
|
Balance
End of Year (a) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2023 |
|
$ |
308 |
|
|
|
500 |
|
|
|
(129 |
) |
|
|
|
|
|
$ |
679 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2024 |
|
$ |
679 |
|
|
|
67 |
|
|
|
(254 |
) |
|
|
|
|
|
$ |
492 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2025 |
|
$ |
492 |
|
|
|
803 |
|
|
|
(270 |
) |
|
|
|
|
|
$ |
1,025 |
| |
Income Statement Detail for Product Liability
Expense
|
|
|
Accrued
Legal Expense (b) |
|
|
Insurance
Premium Expense (e) |
|
|
Total
Product Liability Expense |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
2023 |
|
$ |
500 |
|
|
|
1,226 |
|
|
$ |
1,726 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2024 |
|
$ |
67 |
|
|
|
908 |
|
|
$ |
975 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2025 |
|
$ |
803 |
|
|
|
808 |
|
|
$ |
1,611 |
| |
Notes
|
(a) |
The beginning and ending liability balances represent accrued legal fees only. Settlements and administrative
costs are expensed as incurred. Only in rare instances is an accrual established for settlements. | |
|
(b) |
The expense accrued in the liability is for legal fees only. | |
|
(c) |
Legal fees represent payments to outside counsel related to product liability matters. | |
|
(d) |
Settlements represent payments made to plaintiffs or allegedly injured parties in exchange for a full
and complete release of liability. | |
|
(e) |
Insurance expense represents the cost of insurance premiums. | |
There were no insurance recoveries during any
of the above years.
82
|
21. |
Financial Instruments | |
The Company does not hold or issue financial instruments
for trading or hedging purposes, nor does it hold interest rate, leveraged, or other types of derivative financial instruments. Fair values
of accounts receivable, accounts payable, accrued expenses and income taxes payable reflected in the December 31, 2025 and 2024 balance
sheets approximate carrying values at those dates.
|
22. |
Stockholder Rights Plan | |
On October 14, 2025, the Companys Board
of Directors (the Board) approved the adoption of a limited-duration stockholder rights plan (the Rights Plan).
The Rights Plan is effective October 14, 2025 (Effective Date) and will expire on October 13, 2026. The Board, in consultation
with its advisors, adopted the Rights Plan in response to the public announcement by Beretta Holding S.A. (Beretta) that
it had accumulated a significant economic interest in Rugers common stock and intends to engage in discussions with the Company
regarding potential areas of operational and strategic collaborations. The Rights Plan is intended to ensure that the Board
remains in the best position to perform its fiduciary duties and to enable all stockholders to receive fair and equal treatment. It is
also designed to allow all stockholders to realize the long-term value of their investment by reducing the likelihood that Beretta would
gain control through open market accumulation or other coercive tactics without appropriately compensating the Companys stockholders
or allowing the Board sufficient time to make informed judgments. The Rights Plan is a temporary measure to give the Board time to understand
Berettas intentions and evaluate options.
Pursuant to the Rights Plan, the Company has
authorized and declared a dividend of one common share purchase right (a Right) for each share of Common Stock that is outstanding
at the close of business on October 24, 2025 and that may become outstanding between such date and the Distribution Date (as defined below)
or the earlier Expiration Date (as defined in the Rights Plan). The Rights are not exercisable until after the Distribution Date. After
the Distribution Date, each Right will be exercisable to purchase from the Company one share of Common Stock at a purchase price of $200
per share of Common Stock, subject to adjustment.
The Distribution
Date means the close of business on the business day immediately following the earlier of (i) the Flip-In Date (as defined
in the Rights Plan) or (ii) 10
business days after the date (prior to such time as any person becomes an Acquiring Person), if any, as may be determined by action of
the Board, in its sole discretion, following the commencement of, or public announcement of an intention to commence, a tender or exchange
offer the consummation of which would result in any person or group of affiliated or associated persons becoming an Acquiring Person.
An Acquiring
Person means any person who becomes the beneficial owner of 10%
or more of the outstanding shares of Common Stock of the Company, subject to certain specified exceptions set forth in the Rights Plan,
including passive institutional investors. The Rights Plan also provides that any person who would otherwise be deemed an Acquiring Person
as of the date of the adoption of the Rights Plan will not be deemed to be an Acquiring Person for so long as such person does not acquire,
subject to certain specified exceptions, beneficial ownership of any additional shares of Common Stock following adoption of the Rights
Plan.
83
If the Rights become exercisable, all holders
of Rights (other than the person or group triggering the Rights Plan, whose Rights would become void) will be entitled to acquire shares
of Common Stock at a 50%
discount to the then-current market price or the Company may exchange each Right held by such holders for one share of Common Stock.
The Rights will expire at the close of business
on the day before the first anniversary of the date of the Rights Plan, unless the Rights Plan is amended to change the Final Expiration
Date (as defined in the Rights Plan) or the Rights are earlier redeemed or exchanged by the Company
|
23. |
Subsequent Events | |
On March 2, 2026, the Companys Board of
Directors authorized a dividend of 8
per share to shareholders of record on March
16, 2026.
On February 22, 2026, the Company announced that
each of Sandra Froman, Christopher Killoy and Rebecca Halstead retired from the Board of Directors.
Following such retirements, on February 22, 2026,
the Board of Directors elected each of Aaron Rivers, Stephen Timm and Lorin Cassidy Wolfe to fill the vacancies on the Board of Directors
created through such retirements, effective immediately.
The Companys management has evaluated transactions
occurring subsequent to December 31, 2025 and determined that there were no other events or transactions during that period that would
have a material impact on the Companys results of operations or financial position.
84
ITEM
9CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM
9ACONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
The Company conducted an evaluation, with the
participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Companys
disclosure controls and procedures, as defined in Rules13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended,
as of December 31, 2025. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of
December 31, 2025, the Companys disclosure controls and procedures over financial reporting were effective.
Managements
Report on Internal Control over Financial Reporting
The Companys management is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rules13a-15(f) and 15d-15(f) under
the Securities Exchange Act of 1934. Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company conducted an evaluation, with the
participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of its internal control over financial
reporting as of December 31, 2025. This evaluation was performed based on the criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.
Management has concluded that the Company maintained
effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control
Integrated Framework issued by the COSO in 2013. In accordance with guidance issued by the Securities and Exchange Commission,
Managements evaluation of internal control over financial reporting excluded the Companys Hebron operations, which was acquired
from the acquisition of Anderson Manufacturing assets on July 1, 2025. The Hebron operations total assets and net sales represent
approximately 3% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended
December 31, 2025.
The effectiveness of the Companys internal
control over financial reporting as of December 31, 2025 has been audited by RSM US LLP, an independent registered public accounting firm,
as stated in their report which is included in this Form 10-K.
85
Changes
in Internal Control over Financial Reporting
There were no changes in our internal control over
financial reporting that occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.
New
York Stock Exchange Certification
Pursuant to Section 303A.12(a) of the New York
Stock Exchange Listed Company Manual, the Company submitted an unqualified certification of our Chief Executive Officer to the New York
Stock Exchange in 2025. The Company has also filed, as exhibits to this Annual Report on Form 10-K, the Chief Executive Officer and Chief
Financial Officer Certifications required under the Sarbanes-Oxley Act of 2002.
ITEM
9BOTHER INFORMATION
Rule 10b5-1
Trading Plans
During the three months ended
December 31, 2025, none of the Companys Section 16 officers or directors adopted or terminated contracts, instructions, or written
plans for the purchase or sale of Company securities.
Due to an administrative oversight,
two plans for the purchase and sale of the Companys securities which are intended to satisfy the affirmative defense conditions
of Rule 10b5-1(c) under the Exchange Act (Rule 10b5-1 Plan) were adopted during the three months ended September 27, 2025
by a Director and a Section 16 officer of Company securities were not reported in the Form 10-Q filed with respect to such period. The
details of such Rule 10b5-1 Plans are as follows:
|
Name |
Title |
Action |
Date
Adopted |
Expiration
Date |
Aggregate
# of Securities to be Purchased/Sold | |
|
Amir
P. Rosenthal (1) |
Director |
Adoption
of Rule 10b5-1 Plan |
August
13, 2025 |
March
13, 2026 |
3,000 | |
|
Timothy
M. Lowney (2) |
Vice
President of Operations |
Adoption
of Rule 10b5-1 Plan |
August
12, 2025 |
May
13, 2026 |
2,537 | |
|
(1) |
Amir P. Rosenthal., a director of the Company, entered into a Rule 10b5-1 Plan on August 13, 2025. Mr. Rosenthals
Rule 10b5-1 Plan provides for the potential sale of up to 3,000 shares of the Companys common stock. The Rule 10b5-1 Plan expires
on March 13, 2026, or upon the earlier completion of all authorized transactions under such Rule 10b5-1 Plan. | |
86
|
(2) |
Timothy M. Lowney, an officer of the Company, entered into a Rule 10b5-1 Plan on August 12, 2025. Mr. Lowneys
Rule 10b5-1 Plan provides for the potential sale of up to 2,537 shares of the Companys common stock. The Rule 10b5-1 Plan expires
on November 14, 2025, or upon the earlier completion of all authorized transactions under such Rule 10b5-1 Plan. | |
None of the Companys directors or Section 16 officers
adopted or
terminated
a non-Rule 10b5-1 trading arrangement as defined in Item 408 of Regulation S-K during the three months ended December 31,
2025.
ITEM
9CDISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
87
PART III
ITEM
10DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning the Companys directors,
including the Companys separately designated standing audit committee, and on the Companys code of business conduct and
ethics required by this Item is incorporated by reference from the Companys Proxy Statement relating to the 2026 Annual Meeting
of Stockholders.
Information concerning the Companys executive
officers required by this Item is set forth in Item 1 of this Annual Report on Form 10-K under the caption Executive Officers of
the Company.
Information concerning beneficial ownership reporting
compliance required by this Item is incorporated by reference from the Companys Proxy Statement relating to the 2026 Annual Meeting
of Stockholders.
ITEM
11EXECUTIVE COMPENSATION
Information concerning director and executive
compensation required by this Item is incorporated by reference from the Companys Proxy Statement relating to the 2026 Annual Meeting
of Stockholders.
ITEM
12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information concerning the security ownership
of certain beneficial owners and management and related stockholder matters required by this Item is incorporated by reference from the
Companys Proxy Statement relating to the 2026 Annual Meeting of Stockholders.
88
Securities Authorized for Issuance
Under Equity Compensation Plans
The following table provides information regarding
compensation plans under which equity securities of the Company are authorized for issuance as of December 31, 2025:
|
Equity
Compensation Plan Information | |
|
Plan category |
|
Number
of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
|
|
Weighted-average
exercise price of outstanding options, warrants and rights (b) * |
|
|
Number
of securities remaining available for future issuance under equity compensation plans (excluding securities
reflected in column (a)) (c) |
| |
|
Equity compensation plans
approved by security holders |
|
|
|
|
|
|
|
|
|
|
|
| |
|
2017 Stock Incentive Plan |
|
|
0 |
|
|
|
|
|
|
|
0 |
| |
|
2023 Stock Incentive Plan |
|
|
555,448 |
|
|
|
|
|
|
|
566,740 |
** | |
|
Equity compensation plans
not approved by security holders |
|
|
|
|
|
|
|
|
|
|
|
| |
|
None. |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Total |
|
|
555,448 |
|
|
|
|
|
|
|
566,740 |
| |
|
* |
Restricted stock units are settled in shares of common stock or the cash equivalent. Accordingly, the weighted-average
exercise price is not applicable. | |
|
** |
Includes 151,386 unused shares previously
authorized for issuance under the 2017 SIP that are now incorporated into and issuable under the 2023 SIP. | |
ITEM
13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Information concerning certain relationships and
related transactions required by this Item is incorporated by reference from the Companys Proxy Statement relating to the 2026
Annual Meeting of Stockholders.
ITEM
14PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information concerning the Companys principal
accountant fees and services and the pre-approval policies and procedures of the audit committee of the board of directors required by
this Item is incorporated by reference from the Companys Proxy Statement relating to the 2026 Annual Meeting of Stockholders.
89
PART
IV
ITEM
15EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
|
(a) |
Exhibits and Financial Statement Schedule | |
|
(1) |
Financial Statements can be found under Item 8 of Part II of this Form 10-K | |
|
(2) |
Schedule can be found on Page 87 of this Form 10-K | |
|
(3) |
Listing of Exhibits: | |
|
|
Exhibit
3.1 |
Certificate
of Incorporation of the Company, as amended (Incorporated by reference to
Exhibit 4.1 to the Form S-8 Registration Statement previously filed by the Company File No. 333-272443 on June 6, 2023). |
| |
|
|
|
|
| |
|
|
Exhibit
3.2 |
Amended
and Restated By-Laws of the Company, as of May 5, 2025 (Incorporated
by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on May 9, 2025). |
| |
|
|
|
|
| |
|
|
Exhibit
4.1 |
Description
of the Companys Securities. |
| |
|
|
|
|
| |
|
|
Exhibit
4.2 |
Rights
Agreement, dated as of October 14, 2025, between Sturm, Ruger & Company, Inc. and Computershare Trust Company, N.A., as
Rights Agent (Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the
SEC on October 14, 2025). |
| |
|
|
|
|
| |
|
|
Exhibit
10.1 |
Severance
Agreement, dated as of November 25, 2024, by and between the Company and Thomas A. Dineen (Incorporated
by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024). ** |
| |
|
|
|
|
| |
|
|
Exhibit
10.2 |
Severance
Agreement, dated as of November 25, 2024 by and between the Company and Kevin B. Reid, Sr. (Incorporated
by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024).** |
| |
|
|
|
|
| |
|
|
Exhibit
10.3 |
Second
Amended and Restated Agreement, dated as of February 20, 2025, by and between Sturm, Ruger & Company, Inc, and Christopher J. Killoy
(Incorporated by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K filed with the SEC on February 24, 2025).** |
| |
|
|
|
|
| |
90
|
|
Exhibit
10.4 |
Executive
Severance Agreement, dated November 25, 2024, by and between the Company and Shawn C. Leska (Incorporated
by reference to Exhibit 99.3 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024).** |
| |
|
|
|
|
| |
|
|
Exhibit
10.5 |
Loan
Agreement, dated January 7, 2022 between Sturm, Ruger & Company, Inc. and Regions Bank. (Incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 11, 2022) , as amended by that
certain Amendment
to Credit Agreement, dated November 3, 2022, between Sturm, Ruger & Company, Inc. and Regions Bank (Incorporated
by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the SEC on November 4, 2022) and that certain
Second
Amendment to Loan Agreement, dated June 6, 2024, between Sturm, Ruger & Company, Inc. and Regions Bank (Incorporated
by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the SEC on June 10, 2024). |
| |
|
|
|
|
| |
|
|
Exhibit
10.6 |
The
Sturm, Ruger & Company, Inc. 2017 Stock Incentive Plan (incorporated
by reference to Annex A of the Companys Definitive Proxy Statement of Schedule 14A, filed with the SEC on March 27, 2017).** |
| |
|
|
|
|
| |
|
|
Exhibit
10.7 |
The
Sturm, Ruger & Company, Inc. 2023 Stock Incentive Plan (incorporated by reference to Annex A of the Companys Definitive
Proxy Statement of Schedule 14A, filed with the SEC on April 20, 2023)** |
| |
|
|
|
|
| |
|
|
Exhibit
10.8 |
Separation
Agreement, dated as of December 21, 2023 by and between Sturm, Ruger, & Co., Inc. and Thomas P. Sullivan (Incorporated
by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on December 21, 2023).** |
| |
|
|
|
|
| |
|
|
Exhibit
10.9 |
Employment
Agreement, dated as of January 15, 2025, by and between the Company and Todd W.
Seyfert (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 17, 2025).
** |
| |
|
|
|
|
| |
|
|
Exhibit
10.10 |
Transition
Agreement, dated as of February 20, 2025, by and between Sturm, Ruger & Company, Inc. and Kevin B. Reid, Sr. (Incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on February 24, 2025).** |
| |
|
|
|
|
| |
|
|
Exhibit 10.11 |
Executive Severance Agreement,
dated November 25, 2024, by and between the Company and Sarah F. Colbert ** |
| |
|
|
|
|
| |
|
|
Exhibit 10.12 |
Executive Severance Agreement,
dated November 25, 2024, by and between the Company and Michael W. Wilson ** |
| |
|
|
|
|
| |
|
|
Exhibit 10.13 |
Executive Severance Agreement,
dated November 25, 2024, by and between the Company and Robert J. Werkmeister ** |
| |
91
|
|
Exhibit
10.14 |
Executive Severance
Agreement, dated May 1, 2025, by and between the Company and Benjamin P. Quinn ** |
| |
|
|
|
|
| |
|
|
Exhibit 19.1 |
Sturm Ruger & Company, Inc. Insider Trading Policy |
| |
|
|
|
|
| |
|
|
Exhibit 23.1 |
Consent of RSM US LLP |
| |
|
|
|
|
| |
|
|
Exhibit 31.1 |
Certification of Chief Executive
Officer Pursuant to Rule 13a-14(a) of the Exchange Act. |
| |
|
|
|
|
| |
|
|
Exhibit 31.2 |
Certification of Treasurer and Chief
Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act. |
| |
|
|
|
|
| |
|
|
Exhibit
32.1 |
Certification of the
Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002. |
| |
|
|
|
|
| |
|
|
Exhibit
32.2 |
Certification of the
Treasurer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. |
| |
|
|
|
|
| |
|
|
Exhibit 97 |
Executive Compensation Clawback Policy |
| |
|
|
|
|
| |
|
|
Exhibit 101.INS* |
XBRL Instance Document the instance document
does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| |
|
|
|
|
| |
|
|
Exhibit 101.SCH* |
Inline XBRL Taxonomy Extension Schema Document |
| |
|
|
|
|
| |
|
|
Exhibit 101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| |
|
|
|
|
| |
|
|
Exhibit 101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
| |
|
|
|
|
| |
|
|
Exhibit 101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
| |
|
|
|
|
| |
|
|
Exhibit 101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase
Document |
| |
|
|
|
|
| |
|
|
Exhibit 104* |
Cover Page Interactive Data File the cover page
interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| |
|
|
|
|
| |
|
|
*Filed
herewith |
|
| |
|
|
**Indicates management contract or compensatory
plan or arrangement |
| |
92
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
STURM,
RUGER & COMPANY, INC. | |
|
|
(Registrant) | |
|
|
| |
|
|
| |
|
|
S/ THOMAS A. DINEEN | |
|
|
Thomas A. Dineen | |
|
|
Principal Financial Officer | |
|
|
Principal Accounting Officer, Senior Vice President, | |
|
|
Treasurer, and Chief Financial Officer | |
|
|
| |
|
|
| |
|
|
March 2, 2026 | |
|
|
Date | |
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
|
S/ TODD
W.SEYFERT |
3/2//26 |
|
S/ JOHN
A. COSENTINO, JR |
3/2/26 | |
|
Todd W. Seyfert Chief Executive Officer, Director
(Principal Executive Officer) |
|
|
John A. Cosentino, Jr. Director |
| |
|
|
|
|
| |
|
S/ PHILLIP C. WIDMAN |
3/2/26 |
|
S/ TERRENCE G. OCONNOR |
3/2/26 | |
|
Phillip C. Widman Director |
|
|
Terrence G. OConnor Director |
| |
|
|
|
|
| |
|
S/ AMIR P. ROSENTHAL |
3/2/26 |
|
S/ STEPHEN TIMM |
3/2/26 | |
|
Amir P. Rosenthal Director |
|
|
Stephen Timm Director |
| |
|
|
|
|
| |
|
S/ AARON RIVERS |
3/2/26 |
|
S/ LORIN CASSIDY
WOLFE |
3/2/26 | |
|
Aaron Rivers Director |
|
|
Lorin Cassidy Wolfe Director |
| |
|
|
|
|
| |
|
S/
BRUCE T. PETTET |
3/2/26 |
|
S/ RONALD C. WHITAKER |
3/2/26 | |
|
Bruce T. Pettet Director |
|
|
Ronald C. Whitaker Director |
| |
|
|
|
|
|
| |
|
S/ THOMAS A. DINEEN |
3/2/26 |
|
|
| |
|
Thomas A. Dineen Principal
Financial Officer Principal Accounting Officer, Senior Vice President, Treasurer, and Chief Financial Officer |
|
|
|
| |
93
EXHIBIT
INDEX
|
|
|
Page
No. | |
|
Exhibit
3.1 |
Certificate
of Incorporation of the Company, as amended (Incorporated by reference
to Exhibit 4.1 to the Form S-8 Registration Statement previously filed by the Company File No. 333-272443 on June 6, 2023). |
| |
|
|
|
| |
|
Exhibit
3.2 |
Amended
and Restated By-Laws of the Company, as of May 5, 2025 (Incorporated
by reference to Exhibit 3.1 to the Companys Current Report on Form 8-K filed with the SEC on May 9, 2025). |
| |
|
|
|
| |
|
Exhibit
4.1 |
Description
of the Companys Securities. |
| |
|
|
|
| |
|
Exhibit
4.2 |
Rights
Agreement, dated as of October 14, 2025, between Sturm, Ruger & Company, Inc. and Computershare Trust Company, N.A., as
Rights Agent (Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed with the
SEC on October 14, 2025). |
| |
|
|
|
| |
|
Exhibit
10.1 |
Severance
Agreement, dated as of November 25, 2024, by and between the Company and Thomas A. Dineen (Incorporated
by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024). ** |
| |
|
|
|
| |
|
Exhibit
10.2 |
Severance
Agreement, dated as of November 25, 2024 by and between the Company and Kevin B. Reid, Sr. (Incorporated
by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024).** |
| |
|
|
|
| |
|
Exhibit
10.3 |
Second
Amended and Restated Agreement, dated as of February 20, 2025, by and between Sturm, Ruger & Company, Inc, and Christopher J. Killoy
(Incorporated by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K filed with the SEC on February 24, 2025).** |
| |
|
|
|
| |
|
Exhibit
10.4 |
Executive
Severance Agreement, dated November 25, 2024, by and between the Company and Shawn C. Leska (Incorporated
by reference to Exhibit 99.3 to the Company's Current Report on Form 8-K filed with the SEC on November 27, 2024).** |
| |
94
EXHIBIT INDEX (continued)
|
|
|
| |
|
Exhibit
10.5 |
Loan
Agreement, dated January 7, 2022 between Sturm, Ruger & Company, Inc. and Regions Bank. (Incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 11, 2022) , as amended by that
certain Amendment
to Credit Agreement, dated November 3, 2022, between Sturm, Ruger & Company, Inc. and Regions Bank (Incorporated
by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the SEC on November 4, 2022) and that certain
Second
Amendment to Loan Agreement, dated June 6, 2024, between Sturm, Ruger & Company, Inc. and Regions Bank (Incorporated
by reference to Exhibit 99.1 to the Companys Current Report on Form 8-K filed with the SEC on June 10, 2024). |
| |
|
|
|
| |
|
Exhibit
10.6 |
The
Sturm, Ruger & Company, Inc. 2017 Stock Incentive Plan (incorporated
by reference to Annex A of the Companys Definitive Proxy Statement of Schedule 14A, filed with the SEC on March 27, 2017) |
| |
|
|
|
| |
|
Exhibit
10.7 |
The
Sturm, Ruger & Company, Inc. 2023 Stock Incentive Plan (incorporated by reference to Annex A of the Companys Definitive
Proxy Statement of Schedule 14A, filed with the SEC on April 20, 2023).** |
| |
|
|
|
| |
|
Exhibit
10.8 |
Separation
Agreement, dated as of December 21, 2023 by and between Sturm, Ruger, & Co., Inc. and Thomas P. Sullivan (Incorporated
by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the SEC on December 21, 2023).** |
| |
|
|
|
| |
|
Exhibit
10.9 |
Employment
Agreement, dated as of January 15, 2025, by and between the Company and Todd W. Seyfert (Incorporated
by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on January 17, 2025). ** |
| |
|
|
|
| |
|
Exhibit
10.10 |
Transition
Agreement, dated as of February 20, 2025, by and between Sturm, Ruger & Company, Inc. and Kevin B. Reid, Sr. (Incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form 8-K filed with the SEC on February 24, 2025).** |
| |
|
|
|
| |
|
Exhibit 10.11 |
Executive Severance Agreement, dated November 25, 2024, by and between the
Company and Sarah F. Colbert ** |
| |
|
|
|
| |
|
Exhibit 10.12 |
Executive Severance Agreement, dated November 25, 2024, by and between the
Company and Michael W. Wilson ** |
| |
|
|
|
| |
|
Exhibit 10.13 |
Executive Severance Agreement, dated November 25, 2024, by and between the
Company and Robert J. Werkmeister ** |
| |
|
|
|
| |
|
Exhibit 10.14 |
Executive Severance Agreement, dated May 1, 2025, by and between the Company
and Benjamin P. Quinn ** |
| |
95
EXHIBIT INDEX (continued)
|
|
|
| |
|
Exhibit
19.1 |
Sturm Ruger & Company, Inc. Insider Trading Policy |
| |
|
|
|
| |
|
Exhibit
23.1 |
Consent of RSM US
LLP |
99 | |
|
|
|
| |
|
Exhibit
31.1 |
Certification of
Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act. |
100 | |
|
|
|
| |
|
Exhibit
31.2 |
Certification of
Treasurer and Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act. |
102 | |
|
|
|
| |
|
Exhibit
32.1 |
Certification of
the Chief Executive Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. |
104 | |
|
|
|
| |
|
Exhibit
32.2 |
Certification of
the Treasurer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. |
105 | |
|
|
|
| |
|
Exhibit
97 |
Executive Compensation Clawback Policy |
| |
|
|
|
| |
|
Exhibit
101.INS* |
Inline XBRL Instance Document the
instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| |
|
|
|
| |
|
Exhibit
101.SCH* |
Inline XBRL Taxonomy Extension Schema
Document |
| |
|
|
|
| |
|
Exhibit
101.CAL* |
Inline XBRL Taxonomy Extension Calculation
Linkbase Document |
| |
|
|
|
| |
|
Exhibit
101.DEF* |
Inline XBRL Taxonomy Extension Definition
Linkbase Document |
| |
|
|
|
| |
|
Exhibit
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase
Document |
| |
|
|
|
| |
|
Exhibit
101.PRE* |
Inline XBRL Taxonomy Extension Presentation
Linkbase Document |
| |
|
|
|
| |
|
Exhibit
104* |
Cover Page Interactive Data File
the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline
XBRL document. |
| |
|
|
|
| |
|
*Filed herewith |
|
| |
|
**Indicates management contract or compensatory plan or arrangement |
| |
96
YEAR ENDED DECEMBER 31, 2025
STURM,
RUGER & COMPANY, INC.
ITEMS
15(a)
FINANCIAL STATEMENT SCHEDULE
97
Sturm, Ruger & Company, Inc.
Item 15(a)--Financial Statement Schedule
Schedule IIValuation and Qualifying Accounts
*(In Thousands)*
|
COL.
A |
|
COL.
B |
|
|
COL.
C |
|
|
COL.
D |
|
|
COL.
E |
| |
|
|
|
|
|
|
ADDITIONS |
|
|
|
|
|
|
| |
|
Description |
|
Balance
at Beginning of Period |
|
|
(1)
Charged (Credited) to Costs and Expenses |
|
|
(2)
Charged to Other Accounts Describe |
|
|
Deductions |
|
|
Balance
at End of Period |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Deductions from asset accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Allowance for doubtful accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year ended December 31, 2025 |
|
$ |
400 |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
400 |
| |
|
Year ended December 31, 2024 |
|
$ |
400 |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
400 |
| |
|
Year ended December 31, 2023 |
|
$ |
400 |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
400 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Allowance for discounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year ended December 31, 2025 |
|
$ |
1,310 |
|
|
$ |
12,879 |
|
|
|
|
|
|
$ |
12,882 |
(a) |
|
$ |
1,307 |
| |
|
Year ended December 31, 2024 |
|
$ |
1,164 |
|
|
$ |
12,241 |
|
|
|
|
|
|
$ |
12,095 |
(a) |
|
$ |
1,310 |
| |
|
Year ended December 31, 2023 |
|
$ |
1,334 |
|
|
$ |
12,540 |
|
|
|
|
|
|
$ |
12,710 |
(a) |
|
$ |
1,164 |
| |
|
(a) |
Discounts taken | |
98