What changed in this filing

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Item 1. Financial Statements

2024-07-31 compared with 2024-05-07 · 142 added, 152 removed, 505 unchanged (37% of the section changed)

3 unchanged sentences

(Dollars in thousands)

March 30, 2024

June 29, 2024

December 31, 2023

17 unchanged sentences

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data )

March 30, 2024

June 29, 2024

December 31, 2023

35 unchanged sentences

Three Months Ended

March 30, 2024

Six Months Ended

June 29, 2024

Net firearms sales

20 unchanged sentences

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’

EQUITY (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)

Paid-in Capital

Balance at December 31, 2023

7 unchanged sentences

Repurchase of 477,917 shares of common stock

Balance at March 30, 2024

Balance at June 29, 2024

$ ( 177,899 )

3 unchanged sentences

( Dollars in thousands)

Three Months Ended

March 30, 2024

April 1, 2023

Six Months Ended

June 29, 2024

Operating Activities

2 unchanged sentences

Stock-based compensation

Excess and obsolescence inventory reserve

Gain on sale of assets

14 unchanged sentences

Proceeds from maturities of short-term investments

Cash provided by investing activities

Cash (used for) provided by investing activities

Financing Activities

3 unchanged sentences

Cash used for financing activities

Increase (decrease) in cash and cash equivalents

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

See notes to condensed consolidated financial

See notes to condensed consolidated financial statements.

STURM, RUGER & COMPANY, INC.

11 unchanged sentences

considered necessary for a fair presentation of the results of the interim periods.

Operating results for the three months ended March

30, 2024 may not be indicative of the results to be expected for the full year ending December 31, 2024.

These financial statements have

been prepared on a basis that is substantially consistent with the accounting principles applied in the Company’s Annual Report

Operating results for the three and six months ended

June 29, 2024 may not be indicative of the results to be expected for the full year ending December 31, 2024.

These financial statements

have been prepared on a basis that is substantially consistent with the accounting principles applied in the Company’s Annual Report

on Form 10-K for the year ended December 31, 2023.

5 unchanged sentences

99 % of sales are from firearms.

Export sales accounted for approximately 5 % and 7 % of total sales for the three month periods ended March

30, 2024 and April 1, 2023, respectively.

Export sales accounted for approximately 5 % and 7 % of total sales for the six month periods ended June

29, 2024 and July 1, 2023, respectively.

The Company’s design and manufacturing operations are located in the United States and

85 unchanged sentences

The impact of ASC 606 on revenue

recognized during the three months ended March 30, 2024 and April 1, 2023 is as follows:

recognized during the three and six months ended June 29, 2024 and July 1, 2023 is as follows:

Three Months Ended

March 30, 2024

April 1, 2023

Six Months Ended

June 29, 2024

Contract liabilities with customers at beginning of period

5 unchanged sentences

sales promotion programs that include the future shipment of free products.

The Company expects the remaining deferred revenue from this

contract liability with customers to be recognized in the second quarter of 2024.

Practical Expedients and Exemptions

12 unchanged sentences

Inventories consist of the following:

March 30, 2024

June 29, 2024

December 31, 2023

15 unchanged sentences

The table below

presents the right-of-use assets and related lease liabilities recognized on the Condensed Consolidated Balance Sheet as of March 30,

presents the right-of-use assets and related lease liabilities recognized on the Condensed Consolidated Balance Sheet as of June 29, 2024:

Balance Sheet Line Item

March 30, 2024

June 29, 2024

Right-of-use assets

17 unchanged sentences

paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount

Three Months Ended

March 30, 2024

April 1, 2023

Six Months Ended

June 29, 2024 July 1, 2023

Cash paid for amounts included in the measurement of lease liabilities $ 432 $ 432

5 unchanged sentences

the undiscounted future minimum lease payments to the total operating lease liabilities recognized on the Condensed Consolidated Balance

Sheet as of March 30, 2024:

Sheet as of June 29, 2024:

Remainder of 2024

3 unchanged sentences

NOTE 6 - LINE OF CREDIT

On January 7, 2022, the Company

entered into a $ 40 million unsecured revolving line of credit agreement with a bank that expires January 7, 2025 .

Borrowings under this

new facility bear interest at either 1) the Bloomberg short-Term Bank Yield Index – 1 month plus 150 basis points, or 2) a fluctuating

rate per annum equal to the greater of (i) the Bank’s prime rate or (ii) the federal funds rate plus 50 basis points.

is also charged one-quarter of a percent ( 0.25 %) per year on the unused portion.

At March 30, 2024, the Company was in compliance with

the terms and covenants of the credit facility and the line of credit was unused.

On June 6, 2024, the Company amended

its existing $ 40 million unsecured revolving line of credit agreement with a bank, 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 June 29, 2024,

the Company was in compliance with the terms and covenants of the credit facility and the line of credit was unused.

NOTE 7 - EMPLOYEE BENEFIT PLANS

4 unchanged sentences

Expenses related to these matching contributions totaled $ 1.0 million and $ 2.2 million for the

three months ended March 30, 2024 and April 1, 2023, respectively.

The Company plans to contribute approximately $ 3.0 million to the plan

in matching employee contributions during the remainder of 2024.

three and six months ended June 29, 2024, respectively, and $ 1.0 million and $ 2.7 million for the three and six months ended July 1, 2023,

respectively.

The Company plans to contribute approximately $ 2.0 million to the plan in matching employee contributions during the remainder

In addition, the Company provided

supplemental discretionary contributions to the 401(k) plan totaling $ 2.0 million and $ 2.2 million for the three months ended March 30,

2024 and April 1, 2023, respectively.

The Company plans to contribute approximately $ 4.5 million in supplemental contributions to the

plan during the remainder of 2024.

supplemental discretionary contributions to the 401(k) plan totaling $ 1.8 million and $ 3.8 million for the three and six months ended

June 29, 2024, respectively, and $ 1.6 million and $ 3.7 million for the three and six months ended July 1, 2023, respectively.

plans to contribute approximately $ 3.0 million in supplemental contributions to the plan during the remainder of 2024.

NOTE 8 - INCOME TAXES

3 unchanged sentences

The Company’s effective income tax rate was 21.0 % and

22.4 % for the three months ended March 30, 2024 and April 1, 2023, respectively.

Income tax payments for the three

months ended March 30, 2024 and April 1, 2023 totaled $ 0.1 million and $ 3.0 million, respectively.

21.3 % for the three and six months ended June 29, 2024, respectively.

The Company’s effective income tax rate was 20.0 % and 21.1 %

for the three and six months ended July 1, 2023, respectively.

Income tax payments totaled $ 9.4

million for both the three and six month periods ended June 29, 2024.

Income tax payments for the three and six months ended July 1, 2023

totaled $ 13.5 million and $ 16.5 million, respectively.

The Company files income tax returns

12 unchanged sentences

Three Months Ended

March 30, 2024

April 1, 2023

Six Months Ended

June 29, 2024

Weighted average number of common shares outstanding – Basic

20 unchanged sentences

The Company reserved 1,000,000 shares for issuance under the 2023 SIP, of which 710,000 shares remain available for

future grants as of March 30, 2024.

future grants as of June 29, 2024.

Any shares remaining from the 2017 SIP will be available for future grants under the terms of the 2023

As of March 30, 2024, approximately 120,000 shares remained unawarded from the 2017 SIP.

As of June 29, 2024, approximately 120,000 shares remained unawarded from the 2017 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.

Previously granted and outstanding awards under the 2017 SIP

will remain subject to the terms of the 2017 SIP.

Restricted Stock Units

5 unchanged sentences

awards are subject only to a three-year vesting period.

There were 137,516 restricted stock units issued during the three months ended

March 30, 2024.

There were 137,516 restricted stock units issued during the six months ended June

Total compensation costs related to these restricted stock units are $ 5.9 million.

Compensation costs related to

all outstanding restricted stock units recognized in the statements of income aggregated $ 1.1 million for the three month periods ended

March 30, 2024 and April 1, 2023.

all outstanding restricted stock units recognized in the statements of income aggregated $ 1.1 million and $ 2.2 million for the three and

six months ended June 29, 2024, respectively, and $ 1.1 million and $ 3.4 million for the three and six months ended July 1, 2023, respectively.

NOTE 11 - OPERATING SEGMENT INFORMATION

8 unchanged sentences

Three Months Ended

March 30, 2024

April 1, 2023

Six Months Ended

Income (Loss) Before Income Taxes

Capital Expenditures

March 30, 2024

December 31,2023

Identifiable Assets

3 unchanged sentences

Payments made to the NRA in the

three months ended March 30, 2024 and April 1, 2023 totaled $ 0.2 million and $ 0.1 million, respectively.

One of the Company’s Directors

also serves as a Director on the Board of the NRA.

The Company is a member of the National Shooting Sports Foundation (“NSSF”),

the firearm industry trade association.

Payments made to the NSSF in the three months ended March 30, 2024 and April 1, 2023 totaled

$ 0.2 million and $ 0.1 million, respectively.

three and six months ended June 29, 2024 totaled $ 0.2 million and $ 0.3 million, respectively.

Payments made to the NRA in the three and

six months ended July 1, 2023 totaled $ 0.2 million and $ 0.3 million, respectively.

One of the Company’s Directors also serves as

a Director on the Board of the NRA.

The Company is a member of the

National Shooting Sports Foundation (“NSSF”), the firearm industry trade association.

Payments made to the NSSF in the

three and six months ended June 29, 2024 totaled $ 0.2 million and $ 0.3 million, respectively.

Payments made to the NSSF totaled $ 0.1 million

in both the three and six month periods ended July 1, 2023.

One of the Company’s Directors also serves on the Board of the NSSF.

NOTE 13 - CONTINGENT LIABILITIES

As of March 30, 2024, the Company

was a defendant in ten (10) lawsuits and is aware of certain other such claims.

The lawsuits fall into five (5) categories:

product liability litigation, municipal litigation, negligence, unfair trade practices, and trademark litigation.

Each is discussed in

Traditional Product Liability Litigation

One lawsuit mentioned above involves

a claim for damages related to an allegedly defective product due to its design and/or manufacture.

The lawsuit stems from a specific

incident of personal injury and is based on traditional product liability theories such as strict liability, negligence, and/or breach

Company management believes that

the allegations in this case are unfounded, that the incident is unrelated to the design or manufacture of the firearm involved, and that

there should be no recovery against the Company.

As of June 29, 2024, the Company

was a defendant in eight (8) lawsuits and is aware of certain other claims.

The lawsuits generally fall into four (4) categories:

litigation, breach of contract, unfair trade practices, and trademark litigation.

Each is discussed in turn below.

Municipal Litigation

23 unchanged sentences

the quarter ended April 3, 2021, the City initiated discovery and the manufacturer defendants reciprocated.

On March 15, 2024, Indiana Governor

Eric Holcomb signed into law HB 1235, which reserves to the State of Indiana the right to bring an action on behalf of a political subdivision

against a firearm or ammunition manufacturer, trade association, seller, or dealer, concerning certain matters.

The new law also prohibits

a political subdivision from bringing or maintaining such an action.

With the passage of this new law, the Company and other defendants

filed a Motion for Judgment on the Pleadings on March 18, 2024.

The matter is being briefed.

On March 15, 2024, Indiana

Governor Eric Holcomb signed into law HB 1235, which reserves to the State of Indiana the right to bring an action on behalf of a

political subdivision against a firearm or ammunition manufacturer, trade association, seller, or dealer, concerning certain

The new law also prohibits a political subdivision from bringing or maintaining such an action.

With the passage of this

new law, the Company and other defendants filed a Motion for Judgment on the Pleadings on March 18, 2024.

The motion has been

briefed fully and is set for hearing on August 8, 2024.

Estados Unidos Mexicanos v.

11 unchanged sentences

and, on January 22, 2024, the Court of Appeals reversed the District Court’s dismissal and remanded the case for further proceedings.

The Defendants sought a Stay of Proceedings Pending Review of a Petition for Writ of Certiorari to the United States Supreme Court.

District Court recently denied the stay and held that the defendants should request that the First Circuit recall its mandate or petition

for a stay from the Supreme Court.

The Defendants filed a Petition for Writ of Certiorari seeking review by the United States Supreme Court.

The Defendants also sought a

stay of the proceedings pending a decision on the Petition.

The District Court denied the request for a stay and held that the Defendants

should request that the First Circuit recall its mandate or petition for a stay from the Supreme Court.

On June 17, 2024, the Court heard

argument on Ruger’s (and other Defendants’) Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction.

The court took

the motions under advisement.

On December 20, 2022, the City

15 unchanged sentences

State Supreme Court for Monroe County, New York.

The suit names a number of firearm manufacturers, distributors, and retailers as Defendants,

including the Company, and purports to state causes of action for violations of Sections 898, 349 and 350 of the New York General Business

Law, as well as common law public nuisance.

The allegations essentially mirror those in The City of Buffalo , discussed in the preceding

The suit names the same defendants and makes essentially the same allegations raised

in Buffalo, discussed in the preceding paragraph.

Defendants timely removed the matter to the U.S.

District Court for the Western District of New York.

District Court for the Western District

Defendants moved to consolidate

the The City of Buffalo and The City of Rochester cases for pretrial purposes only.

Defendants also moved to stay the cases

pending a decision by the Second Circuit Court of Appeals in National Shooting Sports Foundation, Inc.

James , which challenges

the constitutionality of the recently enacted N.Y.

the Buffalo and Rochester cases for pretrial purposes only and also moved to stay the cases pending a decision by the Second

Circuit Court of Appeals in National Shooting Sports Foundation, Inc.

James , which challenges the constitutionality of

the recently enacted N.Y.

Law §§ 898-a–e.

On June 8, 2023, the court granted defendants’ motions and the cases were consolidated for pretrial purposes and stayed.

Sturm, Ruger, et

is a lawsuit arising out of a slip and fall accident by a contract security officer in December 2019.

The Complaint was filed

in the Superior Court for Sullivan County, New Hampshire on December 13, 2022 and names Pine Hill Construction, a snow removal contractor,

as a co-defendant.

The Company has tendered the defense of this matter to its insurance carrier and is assisting as required.

The Company was named in two purported

class action lawsuits arising out of a data breach at Freestyle Solutions, Inc., the vendor who was hosting the Company’s ShopRuger.com

website at the time of the breach.

Sturm, Ruger & Co., was filed in the U.S.

District Court for Connecticut on October

4, 2022 and Copeland v.

Sturm, Ruger & Company, et al.

was filed in the U.S.

District Court for New Jersey on October 27, 2022.

Copeland also named Freestyle Solutions, Inc.

as a defendant.

By agreement of the parties, Copeland was dismissed, without

prejudice, and consolidated with Jones in the pending Connecticut case.

On January 20, 2023, five plaintiffs filed an Amended Complaint

naming the Company and Freestyle Solutions, Inc.

On June 8, 2023,

the court granted defendants’ motions and the cases were consolidated for pretrial purposes and stayed.

Breach of Contract

The Company is a defendant in Jones v.

& Co., a purported class action lawsuit arising out of a data breach at Freestyle Solutions, Inc., the vendor who was hosting

the Company’s ShopRuger.com website at the time of the breach.

On January 20, 2023, five Plaintiffs filed an Amended Complaint naming

the Company and Freestyle Solutions, Inc.

as Defendants.

The Complaint alleges causes of action for negligence, breach of implied

warranties, and unjust enrichment.

The Complaint alleges causes of action for negligence, breach of implied warranties,

and unjust enrichment.

The Company moved to dismiss the

6 unchanged sentences

Estate of Suzanne Fountain

Sturm, Ruger & Co., Inc., was filed in the Connecticut Superior Court in Stamford and arises out of the criminal shootings

at the King Soopers supermarket in Boulder, Colorado on March 22, 2021.

On that date, plaintiff’s decedent, Suzanne Fountain, was

murdered by 21-year-old Ahmad Al Aliwi Al-Issa.

The Complaint alleges that the Company’s advertising

and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were a substantial factor in bringing

about the wrongful death of Suzanne Fountain.

Sturm, Ruger & Co., Inc., was filed in Connecticut Superior Court and arises out of the criminal shootings at the King Soopers

supermarket in Boulder, Colorado on March 22, 2021.

On that date, plaintiff’s decedent, Suzanne Fountain, was murdered by 21-year-old

Ahmad Al Aliwi Al-Issa.

The Complaint alleges that the Company’s advertising and marketing

of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were a substantial factor in bringing about the wrongful

death of Suzanne Fountain.

Estate of Neven Stanisic et

Sturm, Ruger & Co., Inc., was filed in the Connecticut Superior Court in Stamford on behalf of five plaintiffs.

of Suzanne Fountain , the claims arise from the criminal shootings at the King Soopers supermarket in Boulder, Colorado on March 22,

Plaintiffs’ decedents were murdered by Ahmad Al Aliwi Al-Issa and plaintiffs allege

that the Company’s advertising and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were

a substantial factor in causing the wrongful death of plaintiffs’ decedents.

Sturm, Ruger & Co., Inc., was filed in Connecticut Superior Court on behalf of five plaintiffs.

Like Estate of Suzanne

Fountain , the claims arise from the criminal shooting at the King Soopers supermarket in Boulder, Colorado on March 22, 2021.

decedents were murdered by Ahmad Al Aliwi Al-Issa and Plaintiffs alleged that the Company’s

advertising and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were a substantial factor

in causing the wrongful death of plaintiffs’ decedents.

and Stanisic cases were consolidated for discovery purposes only and transferred by the court to the Complex Litigation Docket.

6 unchanged sentences

jurisdiction.

Plaintiffs moved to remand the case to state court, the matter has been briefed fully, and oral argument on the motion

was held on April 16, 2024.

The parties are awaiting a ruling.

Plaintiffs moved to remand the case to state court and, following briefing and oral argument, the matter was remanded on

April 25, 2024.

On June 12, 2024, Ruger filed

Motions to Dismiss the Connecticut state court cases based upon the doctrine of forum non conveniens .

The parties are briefing

the motion, which is scheduled for oral argument on September 9, 2024.

March 12, 2024, the Company was named as a defendant in FN Herstal, et al.

42 unchanged sentences

possible liability and claims handling expenses on an ongoing basis.

A range of reasonably possible losses relating to

unfavorable outcomes cannot be made.

The dollar amount of damages claimed at December 31, 2023 and December 31, 2022 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.

A range of reasonably possible

losses relating to unfavorable outcomes cannot be made.

The dollar amount of damages claimed at December 31, 2023 and December 31, 2022

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.

NOTE 14 - SUBSEQUENT EVENTS

On April 26, 2024,

the Board of Directors authorized a dividend of 16 ¢ per share, for shareholders of record as of May 20, 2024, payable on June 7,

On July 26, 2024, the

Board of Directors authorized a dividend of 19 ¢ per share, for shareholders of record as of August 15, 2024, payable on August 30,

The Company has evaluated

events and transactions occurring subsequent to March 30, 2024 and determined that there were no other unreported events or transactions

events and transactions occurring subsequent to June 29, 2024 and determined that there were no other unreported events or transactions

that would have a material impact on the Company’s results of operations or financial position.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements