What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-07-30 · 367 added, 217 removed, 432 unchanged (57% of the section changed)

3 unchanged sentences

(Dollars in thousands)

June 28, 2025

September 27, 2025

December 31, 2024

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footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

See notes to condensed consolidated financial

See notes to condensed consolidated financial statements.

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

(Dollars in thousands, except per share data )

June 28, 2025

September 27, 2025

December 31, 2024

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footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

See notes to condensed consolidated financial

See notes to condensed consolidated financial statements.

STURM, RUGER & COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

Nine Months Ended

Net firearms sales

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$ ( 192,031 )

Net income (loss) and comprehensive income (loss)

Net income and comprehensive income

Common stock issued – compensation plans

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$ ( 195,022 )

Net income (loss) and comprehensive income (loss)

Net (loss) and comprehensive (loss)

Common stock issued – compensation plans

6 unchanged sentences

$ ( 208,179 )

Net income and comprehensive income

Dividends paid

Unpaid dividends accrued

Recognition of stock-based compensation expense

Repurchase of 289,681 shares of common stock

Balance at September 27, 2025

$ ( 218,131 )

See notes to condensed consolidated financial statements.

5 unchanged sentences

$ ( 157,623 )

Net income (loss) and comprehensive income (loss)

Net income and comprehensive income

Common stock issued – compensation plans

6 unchanged sentences

$ ( 160,842 )

Net income (loss) and comprehensive income (loss)

Net income and comprehensive income

Common stock issued – compensation plans

6 unchanged sentences

$ ( 177,899 )

Net income and comprehensive income

Dividends paid

Unpaid dividends accrued

Recognition of stock-based compensation expense

Repurchase of 220,842 shares of common stock

Balance at September 28, 2024

$ ( 186,978 )

See notes to condensed consolidated financial statements.

2 unchanged sentences

( Dollars in thousands)

Six Months Ended

June 28, 2025

June 29, 2024

Nine Months Ended

September 27,

September 28,

Operating Activities

Net (loss) income

Adjustments to reconcile net (loss) income to cash provided by operating

Adjustments to reconcile net (loss) income to cash provided by operating activities:

Depreciation and amortization

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Property, plant and equipment additions

Purchase of Anderson Manufacturing assets

Purchases of short-term investments

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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.

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

Operating results for the three and six months ended

June 28, 2025 may not be indicative of the results to be expected for the full year ending December 31, 2025.

Operating results for the three and nine months ended

September 27, 2025 may not be indicative of the results to be expected for the full year ending December 31, 2025.

These financial statements

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Organization:

Sturm, Ruger & Company,

Sturm, Ruger & Company, Inc.

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

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99 % of sales are from firearms.

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

28, 2025 and June 29, 2024, 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 % of total sales for each of the nine month periods ended September

27, 2025 and September 28, 2024, 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,

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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.

The consolidated financial statements

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

All significant intercompany accounts and transactions have been

Revenue Recognition:

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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.

Fair Value of Financial Instruments:

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 Measurements:

The carrying amounts of financial

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for an amount different than the reported NAV.

The fair value of inventory

acquired as part of a 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 a 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 a 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 a 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).

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 3 below (the “Anderson Acquisition”).

The transaction 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 tangible and intangible 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 in the three months ended September 27, 2025.

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.

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

In November 2024, the FASB

issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic

Disaggregation of Income Statement Expenses (“ASU 2024-03”).” This guidance requires the disaggregation of

certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency

into the expense captions presented on the statement of earnings.

In November 2024, the FASB issued

ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).” This guidance requires the disaggregation of certain expense

captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the

expense captions presented on the statement of earnings.

It is effective for annual reporting periods beginning after December 15, 2026,

and interim periods beginning after December 15, 2027, with early adoption permitted.

Adoption may be applied either prospectively

to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods

Adoption may be applied either prospectively to

financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods

presented in the financial statements.

The Company is evaluating the impact of this guidance on the Company’s related disclosures.

NOTE 3 - ACQUISITION OF ANDERSON MANUFACTURING ASSETS

As described in Note 2, the

Company closed on the Anderson Acquisition on July 1, 2025.

The Company paid $ 15.0 million dollars in cash for Anderson assets to Anderson

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 Company’s 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 tangible assets based on their

fair value and the intangibles and goodwill have been allocated on a provisional basis 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 until the valuations are finalized.

The following table summarizes

the Company's preliminary fair value of the assets acquired, as of July 1, 2025, for the Company’s Anderson Acquisition.

Purchase Price

Cash paid to sellers

Total Purchase Price

Purchase Price Allocation

Assets Acquired

Land and building

Machinery and equipment

Net Assets Acquired

Identifiable assets acquired

were recorded at their estimated fair values based on the methodology described under “Fair Value Measurements” in Note 2

- 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 Company’s Condensed Consolidated Balance Sheet

at September 27, 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 Company incurred acquisition related costs of approximately $ 0.5 million, which are included

in selling, general and administrative expenses in the Company’s Consolidated Statements of Income and Comprehensive Income for

the three and nine month periods ended September 27, 2025.

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 Company’s consolidated

results of operations.

NOTE 4 - REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS

The impact of ASC 606 on revenue

recognized during the three and six months ended June 28, 2025 and June 29, 2024 is as follows:

recognized during the three and nine months ended September 27, 2025 and September 28, 2024 is as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

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.

The Company expects the remaining deferred revenue from the

contract liabilities with customers to be recognized in the third quarter of 2025.

contract liabilities with customers to be recognized in the fourth quarter of 2025.

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 5 - INVENTORIES

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Inventories consist of the following:

June 28, 2025

September 27, 2025

December 31, 2024

6 unchanged sentences

NOTE 6 - 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

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the Company records right-of-use assets equal to the present value of the contractual liability for future lease payments.

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

June 28, 2025:

Balance Sheet Line Item June 28, 2025

The table below

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

Balance Sheet Line Item September 27, 2025

Right-of-use assets Other assets $ 1,906

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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

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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.

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 table below includes cash

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

Six Months Ended

June 28, 2025 June 29, 2024

Nine Months Ended

September 27,

2025 September 28,

Cash paid for amounts included in the measurement of lease liabilities $ 439 $ 432

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

Sheet as of June 28, 2025:

Sheet as of September 27, 2025:

Remainder of 2025

3 unchanged sentences

NOTE 7 - 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 .

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 .

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 September 27, 2025,

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

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Expenses related to these matching contributions totaled $ 1.0 million and $ 3.2 million for the

three and six months ended June 28, 2025, respectively, and $ 1.0 million and $ 2.2 million for the three and six months ended June 29,

three and nine months ended September 27, 2025, respectively, and $ 0.9 million and $ 3.1 million for the three and nine months ended September

28, 2024, respectively.

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

remainder of 2025.

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

the remainder of 2025.

In addition, the Company provided

supplemental discretionary contributions to the 401(k) plan totaling $ 1.6 million and $ 3.6 million for the three and six months ended

June 28, 2025, respectively, and $ 1.8 million and $ 3.8 million for the three and six months ended June 29, 2024, respectively.

plans to contribute approximately $ 3.0 million in supplemental contributions to the plan during the remainder of 2025.

supplemental discretionary contributions to the 401(k) plan totaling $ 1.8 million and $ 5.3 million for the three and nine months ended

September 27, 2025, respectively, and $ 1.5 million and $ 5.3 million for the three and nine months ended September 28, 2024, respectively.

The Company plans to contribute approximately $ 1.8 million in supplemental contributions to the plan during the remainder of 2025.

NOTE 9 - INCOME TAXES

The Company's 2025 and 2024 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 11.2 % and

1.9 % for the three and six months ended June 28, 2025, respectively.

The Company’s effective income tax rate was 21.0 % and 21.3 %

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

Income tax payments totaled

$ 1.1 million and $ 3.1 million for the three and six months ended June 28, 2025, respectively.

Income tax payments totaled $ 9.4 million

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

The Company’s 2025 and 2024

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 174.8 %

and 33.0 % for the three and nine months ended September 27, 2025, respectively.

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 did not make any

income tax payments during the three months ended September 27, 2025.

Income tax payments totaled $ 3.1 million for the nine months ended

September 27, 2025.

Income tax payments totaled $ 1.1 and $ 10.6 million for the three and nine month periods ended September 28, 2024,

respectively.

The Company files income tax

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Three Months Ended

Six Months Ended

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Net (loss) income

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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 June 28, 2025.

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

terms of the 2023 SIP.

As of June 28, 2025, approximately 120,000 shares remained unawarded from the 2017 SIP.

available for future grants as of September 27, 2025.

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

the terms of the 2023 SIP.

As of September 27, 2025, approximately 120,000 shares remained unawarded from the 2017 SIP.

Since the shareholder

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There were 275,873 restricted stock units

issued during the six months ended June 28, 2025.

issued during the nine months ended September 27, 2025.

Total compensation costs related to these restricted stock units are $ 10.6 million.

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all outstanding restricted stock units recognized in the statements of income aggregated $ 1.9 million and $ 5.7 million for the three and

six months ended June 28, 2025, respectively, and $ 1.1 million and $ 2.2 million for the three and six months ended June 29, 2024, respectively.

nine months ended September 27, 2025, respectively, and $ 1.7 million and $ 4.6 million for the three and nine months ended September 28,

2024, respectively.

NOTE 12 - OPERATING SEGMENT INFORMATION

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castings and metal injection molding parts.

Selected operating segment financial information

Selected operating segment financial information follows:

(in thousands)

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Costs of Goods Sold

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Gross Profit (Loss)

2 unchanged sentences

Capital Expenditures

September 27,

Identifiable Assets

NOTE 13 - RELATED PARTY TRANSACTIONS

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 six months ended June 28, 2025 totaled $ 0.2 million and $ 0.4 million, respectively.

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 27, 2025 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.

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 28, 2025

totaled $ 0.1 million and $ 0.2 million, respectively.

Payments made to the NSSF in the three and six months ended June 29, 2024 totaled

$ 0.2 million and $ 0.3 million, respectively.

Two of the Company’s Directors also serve on the Board of the NSSF.

and nine months ended September 28, 2024 totaled $ 0.1 million and $ 0.5 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 27, 2025 totaled $ 0.1 million and $ 0.3 million, respectively.

Payments made to the NSSF in the three and

nine months ended September 28, 2024 totaled $ 0.1 million and $ 0.3 million, respectively.

Two of the Company’s Directors also serve

on the Board of the NSSF.

NOTE 14 - CONTINGENT LIABILITIES

As of June 28, 2025, the Company

was a defendant in seven (7) 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.

As of September 27, 2025, the

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

The lawsuits generally fall into the categories of

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

One (1) municipal

litigation matter was fully and finally resolved during the quarter.

Material matters and developments are discussed in turn below.

Municipal Litigation

2 unchanged sentences

to recover damages allegedly arising out of the misuse of firearms by third parties.

There are three lawsuits of this type:

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.

There are three pending lawsuits of this type:

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.

In addition, nuisance abatement and/or injunctive relief is sought 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, this

matter is back before the Indiana Court of Appeals, where briefing was recently completed.

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, this matter is back before

the Indiana Court of Appeals, where briefing was recently completed and oral argument has been scheduled.

The City of Buffalo v.

1 unchanged sentence

and The City of Rochester v.

Smith & Wesson Brands, Inc., et al were filed one day apart

in New York State Court, naming a number of firearm manufacturers, distributors, and retailers as Defendants, including the Company.

complaints are virtually identical and purport 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.

Generally, Plaintiffs alleges that the criminal misuse of firearms in their cities

is the result of the manufacturing, sales, marketing, and distribution practices of the Defendants.

Both matters were timely removed to

District Court for the Western District of New York and were consolidated for pretrial purposes only.

Those matters were stayed

pending the outcome of a different matter that challenges New York’s law.

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 York’s 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

These matters seek unspecified compensatory damages, creation of an abatement fund, punitive damages and other relief.

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 York’s law, which was decided earlier this year.

The Defendants have moved to dismiss

the cases and are vigorously defending these matters.

Estados Unidos Mexicanos v.

2 unchanged sentences

manufacturers, including the Company.

The Complaint advanced a variety of legal theories including negligence, public nuisance, unjust

enrichment, restitution, and others.

Plaintiff essentially alleged that Defendants design, manufacture, distribute, market and sell

firearms in a way that they know results in the illegal trafficking of firearms into Mexico, where they are used by Mexican drug cartels

for criminal activities.

On June 17, 2024, the District

Court heard argument on pending motions to dismiss.

On August 7, 2024, the Court granted the motions, dismissing Ruger and some of the

other Defendants from the case, but did not enter judgement in favor of these Defendants.

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 prosecuted the appeal before the Supreme Court and oral argument was held on March 4, 2025.

June 5, 2025, the Supreme Court ruled that because the Plaintiff’s complaint does not plausibly allege that the defendant gun manufacturers

aided and abetted gun dealers’ unlawful sales of firearms to Mexican traffickers and the Protection of Lawful Commerce in Arms

Act bars the lawsuit.

After the United States Supreme Court’s decision on June 5, 2025 that the Plaintiff’s

complaint does not plausibly allege that the defendant gun manufacturers aided and abetted gun dealers’ unlawful sales of firearms

to Mexican traffickers and the Protection of Lawful Commerce in Arms Act bars the lawsuit, the matter was remanded to the trial court

where an order of dismissal was entered on August 19, 2025.

Breach of Contract

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 eCommerce website at the time of the breach.

The matter was mediated and the parties agreed

to a settlement in principle, which is being finalized.

As reported in prior periods,

the Company is 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 who was hosting the Company’s eCommerce website at the time of the breach.

The matter was

mediated and the parties agreed to a settlement in principle, which is being finalized.

Unfair Trade Practices

5 unchanged sentences

Complaints allege that the Company’s 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.

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

The Company is vigorously defending these matters.

Oral argument on the Company’s pending Motion to Strike was held on July 21, 2025 and the court stayed discovery pending the outcome

of that motion, which has not yet been issued.

Product Liability

Company is a defendant in two unrelated traditional product liability matters, both of which were filed during the quarter.

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 plaintiff’s decedent.

Sturm, Ruger & Company, Inc.

July 25, 2025 in the United States District Court for the Eastern District of Texas, Texarkana Division.

This matter alleges personal

injuries arising out of an alleged product defect of the plaintiff’s Ruger Vaquero revolver.

The Company believes the matters lack

merit and is defending itself accordingly.

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.

Company is a defendant in FN Herstal, et al.

7 unchanged sentences

decision on dispositive motions.

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.

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, or an aggregate maximum loss of $ 10 million annually, except for certain claims brought by governments or municipalities, which

are excluded from coverage.

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,

or 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.

Rather, the Company established

a wholly-owned captive insurance company for claims made on or after September 1, 2024.

The Company management monitors

14 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.

Often, a Complaint does not

specify the amount of damages being sought and a range of reasonably possible losses relating to unfavorable outcomes cannot be made.

The dollar amount of damages claimed at December 31, 2024, December 31, 2023 and December 31, 2022 was de minimis .

The amount claimed

is set forth as an indication of possible maximum liability the Company might be required to incur in these cases (regardless of the likelihood

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.

Often, a Complaint does not specify

the amount of damages being sought and a range of reasonably possible losses relating to unfavorable outcomes cannot be made.

amount of damages claimed at December 31, 2024, December 31, 2023 and December 31, 2022 was de minimis .

The amount claimed 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

NOTE 15 - SUBSEQUENT EVENTS

On July 25, 2025,

the Board of Directors authorized a dividend of 16 ¢ per share, for shareholders of record as of August 15, 2025 , payable on August

On July 1, 2025

the Company announced the asset purchase of Anderson Manufacturing (“Anderson”), a manufacturer of firearms and firearm accessories

based in Hebron, Kentucky, for $ 16.4 million in cash.

This strategic purchase includes Anderson’s manufacturing facility, equipment

and machinery, inventory, certain assets and liabilities, and all intellectual property related to Anderson.

The acquisition will provide

Ruger the opportunity to work with a skilled and experienced workforce, strengthen its production capabilities and expand its product

The transaction was funded by the Company with cash on hand and will be accounted for in accordance with ASC 805 - Business

Combinations.

ASC 805 requires, among other things, an assignment of the acquisition consideration transferred to the sellers for the

tangible and intangible assets acquired, using the bottom up approach, to estimate their value at acquisition date.

Any excess of the

fair value of the purchase consideration over these identified net assets will be recorded as goodwill.

The Company has not yet completed

its purchase price allocation and fair value assessments of the assets acquired.

On October 31,

2025, the Company’s Board of Directors authorized a dividend of 4 ¢ per share to shareholders of record on November 17, 2025 ,

payable on November 28, 2025 .

On October 14,

2025, the Company announced that its Board of Directors (the “Board”) had 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

(“Beretta”) that it had accumulated a significant economic interest in Ruger’s common stock and intends

to engage in discussions with the Company regarding “potential areas of operational and strategic collaborations”.

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 Company’s 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 Beretta’s 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

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

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.

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.

The foregoing summary of the Rights

Plan is qualified in its entirety by the Rights Plan, which is attached as Exhibit 4.1 to this Form 10-Q.

The Company has

evaluated events and transactions occurring subsequent to June 28, 2025 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.

evaluated events and transactions occurring subsequent to September 27, 2025 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