8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

---

FORM 8-K

---

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

---

Date of Report (Date of earliest event reported)

November 2, 2022

STURM, RUGER & COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware<br><br> <br>(State or Other Jurisdiction of Incorporation)	001-10435<br><br> <br>(Commission File Number)	06-0633559<br><br> <br>(IRS Employer Identification Number)
One Lacey Place, Southport, Connecticut	06890
---	---
(Address of Principal Executive Offices)	(Zip Code)

---

(203) 259-7843

Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
---	---
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
---	---
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
---	---

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	RGR	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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. ¨

1

Item 2.02	Results of Operations and Financial Condition

On November 2, 2022, the Company issued a press release to stockholders and other interested parties regarding financial results for the third quarter ended October 1, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01	Financial Statements and Exhibits
Exhibit No.	Description
---	---
99.1	Press release of Sturm, Ruger & Company, Inc., dated November 2, 2022,<br>reporting the financial results for the third quarter ended October 1, 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

STURM, RUGER & COMPANY, INC.
By:	/S/ THOMAS A. DINEEN
	Name:	Thomas A. Dineen
	Title:	Principal Financial Officer,
		Principal Accounting Officer,
		Senior Vice President, Treasurer<br>and
		Chief Financial Officer

Dated: November 2, 2022

2

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

STURM, RUGER & COMPANY, INC. REPORTS THIRD QUARTER

DILUTED EARNINGS OF $1.03 PER SHARE AND

DECLARES QUARTERLY DIVIDEND OF 41¢ PER SHARE

SOUTHPORT, CONNECTICUT, November 2, 2022--Sturm, Ruger & Company, Inc. (NYSE-RGR) announced today that for the third quarter of 2022 the Company reported net sales of $139.4 million and diluted earnings of $1.03 per share, compared with net sales of $178.2 million and diluted earnings of $1.98 per share in the third quarter of 2021.

For the nine months ended October 1, 2022, net sales were $446.6 million and diluted earnings were $3.90 per share. For the corresponding period in 2021, net sales were $562.7 million and diluted earnings were $6.64 per share.

The Company also announced today that its Board of Directors declared a dividend of 41¢ per share for the third quarter for stockholders of record as of November 16, 2022, payable on November 30, 2022. This dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount per share. This dividend is approximately 40% of net income.

3

Chief Executive Officer Christopher J. Killoy commented on the third quarter of 2022, “Consumer demand remained consistent with the second quarter, which was below the level of demand in 2021, dampened in part by inflationary pressures which often constrain discretionary spending. This resulted in a 22% reduction in our sales from the prior year*.* Nevertheless, our continued focus on financial discipline and the cultivation of long-term shareholder value is evident in our strong, debt-free balance sheet.”

Mr. Killoy discussed some of the Company’s most recent new product introductions, “Our new product development teams continue to deliver innovative products, as evidenced by three exciting product launches in the third quarter:

·	the LC Carbine, a companion carbine to the successful Ruger-5.7 pistol, both chambered in 5.7x28mm,
·	the Small-Frame Autoloading Rifle, or SFAR, chambered in 7.62 NATO<br>/ .308 Win., which combines the ballistic advantages of .308 Win. with the compact size and light weight of a traditional modern sporting<br>rifle, and
---	---
·	the Marlin Model 1895 Guide Gun, chambered in 45-70 Govt, which<br>is our first reintroduction in the Marlin Guide Gun family of lever-action rifles and our first introduction of an alloy steel Marlin<br>rifle with a blued finish.
---	---

We remain hard at work and look forward to introducing additional Ruger and Ruger-made Marlin firearms.”

Mr. Killoy made the following observations related to the Company’s third quarter 2022 performance:

·	The estimated unit sell-through of the Company’s<br>products from the independent distributors to retailers decreased 29% in the first nine months of 2022 compared to the prior year period.<br>For the same period, NICS background checks, as adjusted by the National Shooting Sports Foundation, decreased 14%. These decreases are<br>attributable to decreased consumer demand for firearms from the unprecedented levels of the surge that began in 2020 and remained for<br>most of 2021.
·	Sales of new products, including the PC Charger, MAX-9 pistol, LCP MAX pistol, Marlin 1895 lever-action<br>rifles, LC Carbine, and Small-Frame Autoloading Rifle represented $54.9 million or 13% of firearm sales in the first nine months of 2022.<br>New product sales include only major new products that were introduced in the past two years. Several popular firearms that were considered<br>new products in 2021, including the Wrangler revolver, Ruger-5.7 pistol, and LCP II in .22 LR pistol, have now been in production for<br>over two years and are no longer included in new product sales for 2022.
---	---

4

·	Our profitability declined in the third quarter<br>of 2022 from the third quarter of 2021 as our gross margin decreased from 36% to 28%. The lower margin was driven by unfavorable deleveraging<br>of fixed costs resulting from decreased production and sales, as well as inflationary cost increases in materials, commodities, services,<br>energy, fuel and transportation, which were partially offset by increased pricing.
·	During the third quarter of 2022, the Company’s<br>finished goods inventory and distributor inventories of the Company’s products increased 8,900 units and 30,300 units, respectively.
---	---
·	Cash provided by operations during the first nine months of 2022 was $50.3 million. At October 1, 2022,<br>our cash and short-term investments totaled $215.2 million. Our current ratio is 5.8 to 1 and we have no debt.
---	---
·	In the first nine months of 2022, capital expenditures totaled $17.2 million. We expect our 2022 capital<br>expenditures related to new product introductions and upgrades to our manufacturing equipment and facilities to total approximately $25<br>million. In addition to these investments, in the fourth quarter of 2022 the Company purchased a 225,000 square foot facility in Mayodan,<br>North Carolina for $8.3 million for use in its manufacturing and warehousing operations.
---	---
·	In the first nine months of 2022, the Company returned $35.6 million to its shareholders, primarily through<br>the payment of dividends.
---	---
·	At October 1, 2022, stockholders’ equity was $398.5 million, which equates to a book value of $22.56<br>per share, of which $12.18 per share was cash and short-term investments.
---	---

Today, the Company filed its Quarterly Report on Form 10-Q for the third quarter of 2022. The financial statements included in this Quarterly Report on Form 10-Q are attached to this press release.

Tomorrow, November 3, 2022, Sturm, Ruger will host a webcast at 9:00 a.m. ET to discuss the third quarter operating results. Interested parties can listen to the webcast via this link or by visiting Ruger.com/corporate. Those who wish to ask questions during the webcast will need to pre-register prior to the meeting.

The Quarterly Report on Form 10-Q for the third quarter of 2022 is available on the SEC website at SEC.gov and the Ruger website at Ruger.com/corporate. Investors are urged to read the complete Quarterly Report on Form 10-Q for the third quarter of 2022 to ensure that they have adequate information to make informed investment judgments.

5

About Sturm, Ruger & Co., Inc.

Sturm, Ruger & Co., Inc. is one of the nation's leading manufacturers of rugged, reliable firearms for the commercial sporting market. With products made in America, Ruger offers consumers almost 800 variations of more than 40 product lines, across both the Ruger and Marlin brands. For almost 75 years, Ruger has been a model of corporate and community responsibility. Our motto, “Arms Makers for Responsible Citizens^®^,” echoes our commitment to these principles as we work hard to deliver quality and innovative firearms.

The Company may, from time to time, make forward-lookingstatements and projections concerning future expectations. Such statements are based on current expectations and are subject to certainqualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the needfor external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of futurefirearms control and environmental legislation, and accounting estimates, any one or more of which could cause actual results to differmaterially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak onlyas of the date made. The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstancesafter the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.

6

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

	October 1, 2022			December 31, 2021
Assets
Current Assets
Cash	$	49,853		$	21,044
Short-term investments		165,308			199,971
Trade receivables, net		61,362			57,036
Gross inventories		120,743			100,023
Less LIFO reserve		(54,390	)		(51,826	)
Less excess and obsolescence reserve		(4,848	)		(4,347	)
Net inventories		61,505			43,850
Prepaid expenses and other current assets		12,998			6,832
Total Current Assets		351,026			328,733
Property, plant and equipment		437,170			421,282
Less allowances for depreciation		(365,555	)		(347,651	)
Net property, plant and equipment		71,615			73,631
Deferred income taxes		2,444			536
Other assets		35,817			39,443
Total Assets	$	460,902		$	442,343

7

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data)

			December 31, 2021
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses	31,374		$	36,400
Contract liabilities with customers	—			—
Product liability	434			795
Employee compensation and benefits	22,014			33,154
Workers’ compensation	6,380			6,760
Total Current Liabilities	60,202			77,109
Product liability accrual	118			97
Lease liability	2,076			1,476
Contingent liabilities	—			—
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            2022 – 24,378,568 issued,                        17,666,534 outstanding            2021 – 24,306,486 issued,                        17,596,588 outstanding	24,378			24,306
Additional paid-in capital	48,457			46,847
Retained earnings	471,368			438,098
Less: Treasury stock – at cost            2022 – 6,712,034 shares            2021 – 6,709,898 shares	(145,697	)		(145,590	)
Total Stockholders’ Equity	398,506			363,661
Total Liabilities and Stockholders’ Equity	460,902		$	442,343

All values are in US Dollars.

8

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Net firearms sales	$	138,771		$	177,529		$	444,615		$	560,578
Net castings sales		619			717			2,003			2,116
Total net sales		139,390			178,246			446,618			562,694
Cost of products sold		100,521			113,444			306,087			346,569
Gross profit		38,869			64,802			140,531			216,125
Operating expenses:
Selling		8,763			7,753			25,828			24,290
General and administrative		10,247			10,323			30,927			33,484
Total operating expenses		19,010			18,076			56,755			57,774
Operating income		19,859			46,726			83,776			158,351
Other income:
Interest income		730			11			951			31
Interest expense		(88	)		(114	)		(205	)		(164	)
Other income, net		490			1,401			2,092			2,462
Total other income, net		1,132			1,298			2,838			2,329
Income before income taxes		20,991			48,024			86,614			160,680
Income taxes		2,602			12,822			17,236			42,902
Net income and comprehensive income	$	18,389		$	35,202		$	69,378		$	117,778
Basic earnings per share	$	1.04		$	2.00		$	3.93		$	6.70
Diluted earnings per share	$	1.03		$	1.98		$	3.90		$	6.64
Weighted average number of common shares outstanding - Basic		17,668,435			17,596,588			17,643,473			17,582,009
Weighted average number of common shares outstanding - Diluted		17,825,797			17,778,177			17,770,120			17,749,897
Cash dividends per share	$	0.47		$	1.00		$	2.01		$	2.57

9

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

	Nine Months Ended
	October 1, 2022			October 2, 2021
Operating Activities
Net income	$	69,378		$	117,778
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		20,120			22,001
Stock-based compensation		5,053			6,672
Gain on sale of assets		15			(111	)
Deferred income taxes		(1,908	)		1,519
Changes in operating assets and liabilities:
Trade receivables		(4,326	)		(13,985	)
Inventories		(17,655	)		(10,038	)
Trade accounts payable and accrued expenses		(5,315	)		1,720
Contract liability with customers		—			(84	)
Employee compensation and benefits		(11,774	)		(6,569	)
Product liability		(340	)		(161	)
Prepaid expenses, other assets and other liabilities		(2,985	)		(4,282	)
Income taxes payable		—			2,544
Cash provided by operating activities		50,263			117,004
Investing Activities
Property, plant and equipment additions		(17,206	)		(15,617	)
Proceeds from sale of assets		41			135
Purchases of short-term investments		(200,378	)		(376,979	)
Proceeds from maturities of short-term investments		235,041			332,990
Cash provided by (used for) investing activities		17,498			(59,471	)
Financing Activities
Remittance of taxes withheld from employees related to share-based compensation		(3,371	)		(4,801	)
Repurchase of common stock		(107	)		—
Dividends paid		(35,474	)		(45,202	)
Cash used for financing activities		(38,952	)		(50,003	)
Increase in cash and cash equivalents		28,809			7,530
Cash and cash equivalents at beginning of period		21,044			20,147
Cash and cash equivalents at end of period	$	49,853		$	27,677

10

Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding its financial 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 financial measures may not be comparable to similarly titled financial 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 Company’s 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 the Company’s financial performance.

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 Company calculates EBITDA margin by dividing EBITDA by total net sales.

Non-GAAP Reconciliation – EBITDA

EBITDA

(Unaudited, dollars in thousands)

	Three Months Ended						Nine Months Ended
	October 1, 2022			October 2, 2021			October 1, 2022			October 2, 2021
Net income	$	18,389		$	35,202		$	69,378		$	117,778
Income tax expense		2,602			12,822			17,236			42,902
Depreciation and amortization expense		6,656			7,250			20,120			22,001
Interest income		(730	)		(11	)		(951	)		(31	)
Interest expense		88			114			205			164
EBITDA	$	27,005		$	55,377		$	105,988		$	182,814
EBITDA margin		19.4%			31.1%			23.7%			32.5%

---

11