What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-30 compared with 2024-07-31 · 239 added, 212 removed, 435 unchanged (51% of the section changed)

3 unchanged sentences

(Dollars in thousands)

June 29, 2024

September 28, 2024

December 31, 2023

19 unchanged sentences

(Dollars in thousands, except per share data )

June 29, 2024

September 28, 2024

December 31, 2023

32 unchanged sentences

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

June 29, 2024

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Net firearms sales

22 unchanged sentences

(Dollars in thousands)

Paid-in Capital

Balance at December 31, 2023

7 unchanged sentences

Repurchase of 698,759 shares of common stock

Balance at June 29, 2024

Balance at September 28, 2024

$ ( 186,978 )

3 unchanged sentences

( Dollars in thousands)

Six Months Ended

June 29, 2024

Nine Months Ended

September 28,

September 30,

Operating Activities

33 unchanged sentences

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do

not include all of the information and disclosures required by accounting principles generally accepted in the United States of America

The accompanying unaudited

condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United

States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they

do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America

for complete financial statements.

2 unchanged sentences

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

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.

Operating results for the three and nine months ended

September 28, 2024 may not be indicative of the results to be expected for the full year ending December 31, 2024.

These financial statements

3 unchanged sentences

Organization:

Sturm, Ruger & Company, Inc.

Sturm, Ruger & Company,

(the “Company”) is principally engaged in the design, manufacture, and sale of firearms to domestic customers.

1 unchanged sentence

99 % of sales are from firearms.

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

almost all product content is domestic.

Export sales accounted for approximately 5 % and 7 % of total sales for the nine month periods ended September

28, 2024 and September 30, 2023, respectively.

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

and almost all product content is domestic.

The Company’s firearms are sold through a select number of independent wholesale distributors,

5 unchanged sentences

Principles of Consolidation:

The consolidated financial statements

include the accounts of the Company and its wholly-owned subsidiary.

All significant intercompany accounts and transactions have been

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:

6 unchanged sentences

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 Company’s

products from the independent distributors.

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 Company’s products from the independent distributors.

The fulfillment of these no charge products is the Company’s responsibility.

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.

is recognized proportionally as each performance obligation is satisfied, based on the relative customary price of each product.

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.

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

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.

Fair Value of Financial Instruments:

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.

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.

The Company’s short-term

2 unchanged sentences

price, as reported by the fund, based on the amortized cost of the fund’s securities.

The NAV is used as a practical expedient to

estimate fair value.

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

1 unchanged sentence

Use of Estimates:

The preparation of financial statements

in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts

reported in the financial statements and accompanying notes.

The preparation of financial

statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect

the amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

6 unchanged sentences

The final rules will require information about a company’s climate-related risks that have materially

impacted or are reasonably likely to have a material impact on its business strategy, results of operations, or financial condition, and

the actual and potential material impacts of any identified climate-related risks on the company’s strategy, business model and

outlook, as well as relating to assessment, management, oversight and mitigation of such material risks, material climate-related targets

and goals, and material greenhouse gas emissions.

Additionally, certain disclosures related to severe weather events and other natural

conditions will be required in the audited financial statements.

The first phase of the final rule is effective for fiscal years beginning

impacted or are reasonably likely to have a material impact on its business strategy, results of operations, or financial condition,

and the actual and potential material impacts of any identified climate-related risks on the company’s strategy, business model

and outlook, as well as relating to assessment, management, oversight and mitigation of such material risks, material climate-related

targets and goals, and material greenhouse gas emissions.

Additionally, certain disclosures related to severe weather events and other

natural conditions will be required in the audited financial statements.

The first phase of the final rule is effective for fiscal years

beginning in 2025.

Disclosure for prior periods is only required if it was previously disclosed in an SEC filing.

On April 4, 2024, the SEC voluntarily

stayed implementation of the final rule to facilitate the orderly judicial resolution of pending legal challenges to the rule.

currently evaluating the impact on our disclosures of adopting this new pronouncement.

In November of 2023, the Financial

Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment

Disclosures.” The updated accounting guidance requires enhanced reportable segment disclosures, primarily related to significant

On April 4, 2024, the

SEC voluntarily stayed implementation of the final rule to facilitate the orderly judicial resolution of pending legal challenges to

We are currently evaluating the impact on our disclosures of adopting this new pronouncement.

In November of 2023, the

Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable

Segment Disclosures.” The updated accounting guidance requires enhanced reportable segment disclosures, primarily related to significant

segment expenses which are regularly provided to the chief operating decision maker.

4 unchanged sentences

The Company is currently evaluating the effect the updated guidance will have on its financial statement

In December of 2023, the FASB

issued 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

In December of 2023, the

FASB issued 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.

6 unchanged sentences

The impact of ASC 606 on revenue

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

recognized during the three and nine months ended September 28, 2024 and September 30, 2023 is as follows:

Three Months Ended

Six Months Ended

June 29, 2024

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Contract liabilities with customers at beginning of period

2 unchanged sentences

Contract liabilities with customers at end of period

As more fully described in the

Revenue Recognition section of Note 2, the deferral of revenue and subsequent recognition thereof relates to certain of the Company’s

As more fully described in

the Revenue Recognition section of Note 2, the deferral of revenue and subsequent recognition thereof relates to certain of the Company’s

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

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.

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.

NOTE 4 - INVENTORIES

Inventories are valued using the

last-in, first-out (LIFO) method.

An actual valuation of inventory under the LIFO method can be made only at the end of each year based

on the inventory levels and costs existing at that time.

Inventories are valued using

the last-in, first-out (LIFO) method.

An actual valuation of inventory under the LIFO method can be made only at the end of each year

based on the inventory levels and costs existing at that time.

Accordingly, interim LIFO calculations must necessarily be based on management's

3 unchanged sentences

Inventories consist of the following:

June 29, 2024

September 28, 2024

December 31, 2023

6 unchanged sentences

NOTE 5 - LEASED ASSETS

The Company leases certain of

its real estate and equipment.

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

4 unchanged sentences

2016-02, the Company records 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 June 29, 2024:

Balance Sheet Line Item

June 29, 2024

Right-of-use assets

table below presents the right-of-use assets and related lease liabilities recognized on the Condensed Consolidated Balance Sheet as of

September 28, 2024:

Balance Sheet Line Item September 28, 2024

Right-of-use assets Other assets $ 2,328

Operating lease liabilities

Current portion

Trade accounts payable and accrued expenses

Noncurrent portion

Lease liabilities

Current portion Trade accounts payable and accrued expenses $ 562

Noncurrent portion Lease liabilities 1,766

Total operating lease liabilities $ 2,328

1 unchanged sentence

assets are limited by the lease term and are amortized on a straight line basis over the life of the lease.

The Company’s 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 Company’s 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.

Certain of the Company’s

5 unchanged sentences

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

Six Months Ended

June 29, 2024 July 1, 2023

Nine Months Ended

September 28,

2024 September 29,

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 June 29, 2024:

Sheet as of September 28, 2024:

Remainder of 2024

3 unchanged sentences

NOTE 6 - LINE OF CREDIT

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.

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 .

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,

28, 2024, the Company was in compliance with the terms and covenants of the credit facility and the line of credit was unused.

5 unchanged sentences

Expenses related to these matching contributions totaled $ 0.9 million and $ 3.1 million for the

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,

three and nine months ended September 28, 2024, respectively, and $ 1.0 million and $ 3.7 million for the three and nine months ended September

30, 2023, respectively.

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

The Company plans to contribute approximately $ 1.0 million to the plan in matching employee contributions during

the remainder of 2024.

In addition, the Company provided

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.

supplemental discretionary contributions to the 401(k) plan totaling $ 1.5 million and $ 5.3 million for the three and nine months ended

September 28, 2024, respectively, and $ 1.6 million and $ 5.3 million for the three and nine months ended September 30 , 2023, respectively.

The Company plans to contribute approximately $ 1.5 million in supplemental contributions to the plan during the remainder of 2024.

NOTE 8 - INCOME TAXES

The Company's 2024 and 2023 effective

tax rates differ from the statutory federal tax rate due principally to the availability of research and development tax credits, state

income taxes, and the nondeductibility of certain executive compensation.

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

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.

The Company's 2024 and 2023

effective tax rates differ from the statutory federal tax rate due principally to the availability of research and development tax credits,

state income taxes, and the nondeductibility of certain executive compensation.

The Company’s effective income tax rate was 10.0 %

and 18.9 % for the three and nine months ended September 28, 2024, respectively.

The Company’s effective income tax rate was 8.1 %

and 18.9 % for the three and nine months ended September 30, 2023, respectively.

Income tax payments totaled

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

$ 1.1 million and $ 10.6 million for the three and nine month periods ended September 28, 2024, respectively.

Income tax payments for the

three and nine months ended September 30, 2023 totaled $ 7.3 million and $ 23.8 million, respectively.

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.

and state income tax examinations by tax authorities for years before 2019.

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

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.

federal and state income tax examinations by tax authorities for years before 2019.

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.

NOTE 9 - EARNINGS PER SHARE

2 unchanged sentences

Three Months Ended

Six Months Ended

June 29, 2024

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

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 June 29, 2024.

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

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.

future grants as of September 28, 2024.

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

the 2023 SIP.

As of September 28, 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.

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 six months ended June

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

September 28, 2024.

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 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.

Compensation costs related

to all outstanding restricted stock units recognized in the statements of income aggregated $ 1.7 million and $ 4.6 million for the three

and nine months ended September 28, 2024, respectively, and $ 1.6 million and $ 5.0 million for the three and nine months ended September

30, 2023, respectively.

NOTE 11 - OPERATING SEGMENT INFORMATION

5 unchanged sentences

castings and metal injection molding parts.

Selected operating segment financial information follows:

Selected operating segment financial information

(in thousands)

Three Months Ended

Six Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Income (Loss) Before Income Taxes

Capital Expenditures

September 28,

Identifiable Assets

NOTE 12 - RELATED PARTY TRANSACTIONS

The Company contracts with the

National Rifle Association (“NRA”) for some of its promotional and advertising activities.

The Company contracts with

the National Rifle Association (“NRA”) for some of its promotional and advertising activities.

Payments made to the NRA in

the three and nine months ended September 28, 2024 totaled $ 0.1 million and $ 0.5 million, respectively.

Payments made to the NRA in the

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.

three and nine months ended September 30, 2023 totaled $ 0.1 million and $ 0.4 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 nine months ended September 28, 2024 totaled $ 0.1 million and $ 0.3 million, respectively.

Payments made to the NSSF in

the three and nine months ended September 30, 2023 totaled $ 0.1 million and $ 0.3 million, respectively.

One of the Company’s Directors

also serves on the Board of the NSSF.

NOTE 13 - CONTINGENT LIABILITIES

As of June 29, 2024, the Company

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

As of September 28, 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.

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

Each is discussed in turn below.

25 unchanged sentences

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.

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.

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.

On August 12, 2024, the Court denied Defendants’

The Defendants then sought to certify the Order for appeal, which was granted.

On October 2, 2024, Defendants filed a motion with

the Indiana Court of Appeals to accept jurisdiction over the interlocutory appeal, which is being briefed.

On October 16, 2024, the trial

court entered an Order staying all proceeding pending the interlocutory appeal.

Estados Unidos Mexicanos

Smith & Wesson Brands, Inc., et al.

10 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 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

of Buffalo, New York filed a lawsuit captioned The City of Buffalo v.

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.

On August 7, 2024, the Court granted

the motions, dismissing Ruger and some of the other Defendants from the case.

Subsequently, the Supreme Court granted the Defendants’

Petition for Writ of Certiorari.

With the dismissal of Ruger and other Defendants on personal jurisdiction grounds, the remaining Defendants

will prosecute the appeal before the Supreme Court.

On December 20, 2022, the

City of Buffalo, New York filed a lawsuit captioned The City of Buffalo v.

Smith & Wesson Brands, Inc., et al.

in the New York State

Supreme Court for Erie County, New York.

in the New York

State Supreme Court for Erie County, New York.

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

5 unchanged sentences

District Court for the Western District of New York.

On December 21, 2022, the City

of Rochester, New York filed a lawsuit captioned The City of Rochester v.

On December 21, 2022, the

City of Rochester, New York filed a lawsuit captioned The City of Rochester v.

Smith & Wesson Brands, Inc., et al.

in the New York

State Supreme Court for Monroe County, New York.

York State Supreme Court for Monroe County, New York.

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

11 unchanged sentences

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.

The Company is a defendant

Sturm, Ruger & 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 Company moved to dismiss the

Amended Complaint.

The Complaint alleges causes of action for negligence,

breach of implied warranties, and unjust enrichment.

The Company moved to dismiss

the Amended Complaint.

On March 27, 2024, the Court dismissed Plaintiffs’ negligence and unjust enrichment claims against the Company.

11 unchanged sentences

death of Suzanne Fountain.

Estate of Neven Stanisic et

Estate of Neven Stanisic

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

16 unchanged sentences

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.

Following oral argument on

September 9, 2024, the Court allowed Plaintiffs limited, additional discovery and requested further briefing on the matter.

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

9 unchanged sentences

meritless and is defending the action accordingly.

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 after July 10, 2000, coverage is provided on an annual basis for losses exceeding $ 5 million per claim, or an aggregate maximum

loss of $ 10 million annually, except for certain new claims which might be brought by governments or municipalities after July 10, 2000,

which are excluded from coverage.

Summary of Claimed Damages and Explanation of Product Liability

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.

product liability claims made between July 10, 2000 and August 31, 2024, coverage is provided on an annual basis for losses exceeding

$ 5 million per claim, or an aggregate maximum loss of $ 10 million annually, except for certain new claims which might be brought by governments

or municipalities after July 10, 2000, 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.

The Company management monitors

6 unchanged sentences

are made when appropriate if, as, and when claimants and the Company reach agreement upon an amount to finally resolve all claims.

costs are paid as lawsuits and claims develop, the timing of which may vary greatly from case to case.

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

5 unchanged sentences

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;

, an accrual is made for reasonably anticipated

possible liability and claims handling expenses on an ongoing basis.

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;

, an accrual is made for reasonably

anticipated possible liability and claims handling expenses on an ongoing basis.

A range of reasonably possible

6 unchanged sentences

NOTE 14 - SUBSEQUENT EVENTS

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 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.

On October 25,

2024, the Board of Directors authorized a dividend of 11 ¢ per share, for shareholders of record as of November 13, 2024 , payable

on November 27, 2024 .

has evaluated events and transactions occurring subsequent to September 28, 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