What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-05 · 181 added, 232 removed, 160 unchanged (72% of the section changed)

1 unchanged sentence

Company Overview

Sturm, Ruger & Company, Inc.

Sturm, Ruger & Company,

(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 nine month periods ended September

27, 2025 and September 28, 2024.

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 three month periods ended March

28, 2026 and March 29, 2025.

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, principally

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Results of Operations

During the nine months ended September

27, 2025 the Company has undertaken several strategic initiatives to enhance its operational and market positioning.

These initiatives

● A leadership transition to welcome a new CEO and evolve its leadership structure, along with an organizational

realignment designed to improve efficiency and effectiveness,

● An inventory rationalization, in which the Company revised its product strategy for 2025 and beyond and

reassessed its raw material, work-in-process and finished goods inventories to identify and reserve for inventory that is now excess,

obsolete or ready to be discontinued due to the revised product roadmaps, including legacy models that have run their lifecycle, products

that are no longer part of the long-term strategy, and Marlin-related items that are not part of the product roadmap for that brand, and

● A product repositioning to address its product strategy for the future and take a hard look at current

market conditions, consumer demand and overall economics to identify areas where it has desirable products, with strong features that

need to reach its customers at a better price point.

These initiatives impacted the

results of operations for the nine month period ending September 27, 2025 as follows, which reduced diluted earnings per share $1.46:

● Sales reduction of $5.7 million related to the sale of 67,000 units of discontinued models

● Increased cost of sales of $17.0 million, reflecting the write-off of inventory and other assets related

to the revised product strategy and product roadmap

● Increased general and administrative expenses of $3.7 million related to the leadership transition and

organizational realignment

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 above (the “Anderson Acquisition”).

The Anderson Acquisition included, among other

things, property, equipment, inventory, and all intellectual property related to Anderson, including the Anderson names and marks, and

all derivatives thereof.

The primary purpose of the Anderson

Acquisition was to increase the Company’s production capabilities.

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

value at acquisition date.

Any excess of the fair value of the purchase consideration over these identified net assets was recorded as

The Company’s 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.

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.

During the three months ended

March 28, 2026, the Company executed on its Ruger 2030 plan – strengthening operational responsiveness, enhancing the product portfolio

and positioning the Company for sustainable long-term growth.

Activity in the quarter included:

· The Company’s Board of Directors advancing a deliberate and independent refreshment process, which

saw the retirement of three existing directors and the addition of three new directors with relevant operational, industrial and strategic

expertise while maintaining continuity during a period of leadership transition.

· The appointment of a new CFO in April of 2026, along with other ongoing organizational realignment designed

to improve efficiency and effectiveness.

· The generation of $18.8 million in cash from operations, versus $11.1 million over the same period last

· New product sales reaching $51.6 million, or 41%, of total firearm sales for the quarter.

sales include only major new products that were introduced in the past two years and include the RXM pistol, Marlin 1894 lever-action

rifles, American Centerfire Rifle Generation II, Glenfield rifles, Harrier rifles and the Ruger Red Label III Shotgun.

· The increase of estimated sell-through of the Company’s products from the independent distributors

to retailers by 3.2% from Q1 2025, exceeding a 1.6% increase in adjusted NICS during the same period.

At the same time, compared to the

first quarter of 2025, the Company’s finished goods inventories decreased 95,800 units while distributors’ inventories decreased

26,400 units, reflecting strong retail pull through of the Company’s new products.

· The Hebron Facility is operating at target capacity, as of March 28, 2026.

As announced on May 4, 2026,

Ruger and Beretta Holding entered an Agreement that reflects a shared commitment to long-term value creation, constructive engagement,

and stability for Ruger’s shareholders, employees, customers and industry partners.

Throughout that process, the Company took actions

to protect the interests of all shareholders and to maintain focus on executing its long-term strategy.

These efforts resulted in professional

fees and advisory costs totaling $3.2 million during the quarter.

These costs are largely non-recurring in nature and do not reflect the

underlying performance of the core business.

With the Agreement now in place, the Company expects these costs to be limited in duration,

though some additional expenses may be incurred in the near term.

Additionally, in February,

the Company executed a reduction-in-force as part of broader efforts to structurally align the organization to strategic priorities and

the future operating model.

These actions are consistent with the changes outlined in the 2026 Plan and, more broadly, the Ruger 2030

The moves improve efficiency, enhance accountability and position the Company for long-term profitable growth.

The associated

severance and related cost of $2.5 million were recognized in the quarter and are not indicative of ongoing operations.

As a result of the factors listed

above, the results of operations for the three month period ending March 28, 2026 were negatively impacted, on a non-GAAP basis, by $0.26

per share (see the Non-GAAP Financial Performance Measures below.) The impact was as follows:

· Additional general and administrative expenses of $3.2 million, or $0.15 per share, related to the proxy

contest with Beretta.

· Increased general and administrative expenses of $2.5 million, or $0.11 per share, related to the leadership/governance

transition and organizational realignment

The estimated unit sell-through

of the Company’s products from the independent distributors to retailers increased 0.3% in the first nine months of 2025 compared

of the Company’s products from the independent distributors to retailers increased 3% in the first three months of 2026 compared

to the prior year period.

For the same period, National Instant Criminal Background Check System (“NICS”) background checks

(as adjusted by the National Shooting Sports Foundation (“NSSF”)) decreased 4.3%.

(as adjusted by the National Shooting Sports Foundation (“NSSF”)) increased 2%.

Estimated sell-through from the independent

distributors to retailers and total adjusted NICS background checks for the trailing seven quarters follow:

distributors to retailers and total adjusted NICS background checks for the trailing five quarters follow:

Estimated Units Sold from Distributors to Retailers (1)

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The units ordered, value of orders

received, average sales price of units ordered, and ending backlog for the trailing seven quarters are as follows (dollars in millions,

received, average sales price of units ordered, and ending backlog for the trailing five quarters are as follows (dollars in millions,

except average sales price):

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to plan production levels.

The Company’s overall production in the third quarter of 2025 decreased 9.6% from the second quarter

The Company’s overall production in the first quarter of 2026 decreased 4% from the fourth quarter of

Summary Unit Data

Firearms unit data for the trailing

seven quarters are as follows (dollar amounts shown are net of Federal Excise Tax of 10% for handguns and 11% for long guns):

five quarters are as follows (dollar amounts shown are net of Federal Excise Tax of 10% for handguns and 11% for long guns):

Units Ordered

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Ending Unit Backlog

During the first nine months of

2025, the Company’s finished goods inventory increased by 18,900 units and distributor inventories of the Company’s products

increased by 15,900 units.

Inventory unit data for the trailing seven quarters

During the first three months

of 2026, the Company’s finished goods inventory decreased by 32,800 units and distributor inventories of the Company’s products

decreased by 800 units.

Inventory unit data for the trailing five quarters

Company Inventory

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and gross profit data for the three months ended (dollars in millions):

September 27,

September 28,

Net firearms sales

Net castings sales

Total net sales

Cost of products sold

The increase in consolidated

net sales and net firearms sales for the three months ended September 27, 2025 is attributable to increased demand for the Company’s

new products, partially offset by a reduced average selling price.

Sales of new products, including the RXM pistol, Marlin lever-action

rifles, and American Centerfire Rifle Generation II represented $40.6 million or 33.7% of firearm sales in the three months ended September

New product sales include only major new products that were introduced in the past two years.

The decreased gross profit

for the three months ended September 27, 2025 is partially attributable to $1.4 million of operating costs at the new Hebron facility

that was acquired in July, increased costs associated with material and technology, a product mix shift toward products with relatively

lower margins that remain in relatively stronger demand and sales promotional expenses, partially off-set by increased leveraging of fixed

costs resulting from increased production.

The decrease in gross margin for

the three months ended September 27, 2025 is attributable to the aforementioned factors.

Net sales, cost of products sold,

and gross profit data for the nine months ended (dollars in millions):

September 27,

September 28,

March 28, 2026

March 29, 2025

Net firearms sales

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Cost of products sold

The increase in consolidated net

sales and net firearms sales for the nine months ended September 27, 2025, despite the $5.7 million reduction related to the close out

of 67,000 units of discontinued models, is attributable to increased demand for the Company’s new products, partially offset by

a reduced average selling price.

Sales of new products, including the RXM pistol, Super Wrangler revolver, Marlin lever-action rifles,

and American Centerfire Rifle Generation II, represented $123.3 million or 32.9% of firearm sales in the first nine months of 2025.

product sales include only major new products that were introduced in the past two years.

Total consolidated net sales

and net firearms sales increased slightly for the three months ended March 28, 2026.

Sales of new products, including the RXM pistol,

Marlin 1894 lever-action rifles, American Centerfire Rifle Generation II, Glenfield rifles, Harrier rifles, and the Ruger Red Label III

Shotgun represented $51.6 million or 41% of firearm sales in the three months ended March 28, 2026.

New product sales include only major

new products that were introduced in the past two years.

The decreased gross profit

for the nine months ended September 27, 2025 is attributable to inventory rationalization write-offs and the aforementioned sales reductions

taken in the second quarter of 2025, $1.4 million of operating costs at the new Hebron facility that was acquired in July, increased costs

associated with material and technology, a product mix shift toward products with relatively lower margins that remain in relatively stronger

demand and sales promotional expenses, partially off-set by favorable deleveraging of fixed costs resulting from increased production.

for the three months ended March 28, 2026 is attributable to unfavorable leveraging of fixed costs resulting from decreased production,

exacerbated by the $0.8 million of deferred revenue related to sales promotions.

The decrease in gross margin for

the nine months ended September 27, 2025 is attributable to the aforementioned factors.

the three months ended March 28, 2026 is attributable to the aforementioned factors.

Selling and General and Administrative Expenses

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expenses data for the three months ended (dollars in millions):

September 27,

September 28,

Selling expenses

General and administrative expenses

Total operating expenses

The increase in selling expenses

for the three months ended September 27, 2025 was attributable to increases in industry show costs and several promotional and marketing

initiatives, mostly offset by decreases in spending on printing, advertising, and shipping expenses.

The increase in general and administrative

expenses for the three months ended September 27, 2025 was primarily attributable to expenses incurred due to the Company’s leadership

transition and organizational realignment, increased information technologies related expenses, and professional fees associated with

the purchase of the Anderson Manufacturing assets.

Selling and general and administrative

expenses data for the nine months ended (dollars in millions):

September 27,

September 28,

March 28, 2026

March 29, 2025

Selling expenses

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Total operating expenses

The increase in selling expenses

for the nine months ended September 27, 2025 was attributable to increases in advertising and several promotional and marketing initiatives,

partially offset by decreases in spending on industry shows, personnel costs, and shipping expenses.

The increase in general and administrative

expenses for the nine months ended September 27, 2025 was primarily attributable to expenses incurred due to the Company’s leadership

transition and organizational realignment, as well as increased information technologies related expenses and professional fees associated

with the purchase of the Anderson Manufacturing assets.

Selling expenses for the three

months ended March 28, 2026 were substantially comparable to the corresponding period in the prior year.

The increase in general and

administrative expenses for the three months ended March 28, 2026 was primarily attributable to $3.2 million in legal fees incurred

related to the Beretta Strategic Cooperation Agreement, $2.5 million in severance costs, increased to share based compensation,

which included a one-time non-recurring expense of $1.7 million, and increased professional service costs.

Other income data for the three

months ended (dollars in millions):

September 27,

September 28,

The decrease in other income for

the three months ended September 27, 2025 was attributable to decreased interest income.

Other income data for the nine

months ended (dollars in millions):

September 27,

September 28,

The decrease in other income for

the nine months ended September 28, 2025 was attributable to decreased interest income.

March 28, 2026

March 29, 2025

The increase in other income for

the three months ended March 28, 2026 was attributable to increased royalty income.

Income Taxes and Net Income

The Company's 2025 and 2024

effective tax rates differ from the statutory federal tax rate due principally to research and development tax credits, state income taxes

and the nondeductibility of certain executive compensation.

The Company's 2026 and 2025 effective tax rates differ from the statutory

federal tax rate due principally to research and development tax credits, state income taxes and the nondeductibility of certain executive

compensation.

The reduction in 2026 earnings increased the impact of these items.

the three months ended September 27, 2025, the Company revised its estimated annual effective income tax rate for 2025 and recognized

a $3.0 million increase to its income tax benefit for the nine months ended September 27, 2025.

This resulted in effective income tax

rates of 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’s effective income tax rate was 271.6%

and 20.3% for the three months ended March 28, 2026 and March 29, 2025, respectively.

The discrete nature of these tax credits yields

an effective tax rate for the period that is not meaningful at low earnings levels.

As a result of the foregoing

factors, consolidated net income was $1.6 million for the three months ended September 27, 2025, a reduction of 66.6% from $4.7 million

consolidated net income in the comparable prior year period.

Consolidated net loss was

$7.9 million for the nine months ended September 27, 2025, as compared to consolidated net income of $20.1 million in the nine month period

ended September 28, 2024.

Non-GAAP Financial Measures

factors, consolidated net income was $0.1 million for the three months ended March 28, 2026, a decrease of 98.4% from $7.8 million in

the comparable prior year period.

Non-GAAP Financial Performance Measures

In an effort to provide investors

with additional information regarding its financial results, the Company refers to various United States generally accepted accounting

principles (“GAAP”) financial measures and two non-GAAP financial measures, EBITDA and EBITDA margin, which management believes

provides useful information to investors.

These non-GAAP financial measures may not be comparable to similarly titled financial measures

being disclosed by other companies.

In addition, the Company believes that the non-GAAP financial measures should be considered in addition

principles (“GAAP”) financial measures and two supplemental non-GAAP financial performance measures, Adjusted EBITDA and Adjusted

EBITDA margin, which management believes provides useful information to investors.

These non-GAAP financial performance measures may not

be comparable to similarly titled financial performance measures being disclosed by other companies.

In addition, the Company believes

that these non-GAAP financial performance measures have limitations as analytical tools, and, accordingly, should be considered in addition

to, and not in lieu of, GAAP financial measures.

The Company believes that EBITDA and EBITDA margin are useful to understanding its operating

results and the ongoing performance of its underlying business, as EBITDA provides information on the Company’s ability to meet

its capital expenditure and working capital requirements, and is also an indicator of profitability.

The presentation of Adjusted EBITDA should not be construed to imply that the Company’s

future results will not be affected by unusual or non-recurring items.

The Company believes that

Adjusted EBITDA and Adjusted EBITDA margin are useful to understanding its operating results and the ongoing performance of its underlying

business, as Adjusted EBITDA assists investors in comparing the Company’s performance across reporting periods on a consistent basis

by excluding items that the Company does not believe are indicative of its operating performance.

The Company believes that this reporting

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evaluate the Company’s financial performance.

EBITDA is defined as earnings

before interest, taxes, and depreciation and amortization.

The Company calculates this by adding the amount of interest expense, income

tax expense, and depreciation and amortization expenses that have been deducted from net income back into net income, and subtracting

the amount of interest income that was included in net income from net income to arrive at EBITDA.

The Company’s EBITDA calculation

also excludes any one-time non-cash, non-operating expense.

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

EBITDA was $2.9 million for

the three months ended September 27, 2025, a decrease of 71.3% from $9.9 million in the comparable prior year period.

For the nine months ended

September 27, 2025 EBITDA was $19.4 million, a decrease of 48.9% from $37.9 million in the comparable prior year period.

Non-GAAP Reconciliation – EBITDA

The Company defines Adjusted

EBITDA as earnings before interest, taxes, and depreciation and amortization (EBITDA), as further adjusted to eliminate the impact of

certain items that the Company does not consider indicative of its ongoing operating performance, as itemized below.

Specifically, the

Company calculates Adjusted EBITDA by (i) adding the amount of interest expense, income tax expense, and depreciation and amortization

expenses that have been deducted from net income back into net income, (ii) subtracting the amount of interest income that was included

in net income from net income, (iii) subtracting income tax benefits, (iv) adding the amount of extraordinary cash and non-cash, non-operating

expenses, and (v) subtracting non-recurring income or non-recurring gains that do not contribute directly to management’s evaluation

of its operating results.

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

Adjusted EBITDA was $10.9

million for the three months ended March 28, 2026, a decrease of 23.9% from $14.3 million in the comparable prior year period.

Non-GAAP Reconciliation – Adjusted

Adjusted EBITDA

(Unaudited, dollars in thousands)

Three Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Net income (loss)

Inventory rationalization

March 28, 2026

March 29, 2025

Income tax (benefit) expense

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Interest expense

EBITDA margin

Stockholder rights costs (a)

Severance costs (b)

Adjusted EBITDA

Adjusted EBITDA margin

Net income margin

(a) Costs incurred in engaging with Beretta Holding S.A.

(“Beretta”) on, amongst other things,

Beretta’s ownership of Company Common Stock, the Rights Plan, negotiations concerning potential strategic cooperation between the

Company and Beretta, and in engaging a proxy solicitation firm and preparing a preliminary proxy statement associated with the 2026 Annual

(b) Costs incurred associated severance and related costs as part of an executed reduction-in-force as part

of broader efforts to structurally align the organization to strategic priorities and the future operating model and are not indicative

of ongoing operations

Financial Condition

Liquidity and Capital Resources

At the end of the third quarter

At the end of the first quarter

of 2026, the Company’s cash and short-term investments totaled $105.2 million.

Pre-LIFO working capital of $217.6 million, less the

LIFO reserve of $68.2 million, resulted in working capital of $149.4 million and a current ratio of 3.5 to 1.

Pre-LIFO working capital of $225.4 million, less

the LIFO reserve of $67.9 million, resulted in working capital of $157.5 million and a current ratio of 3.5 to 1.

Cash provided by operating activities

was $38.8 million for the nine months ended September 27, 2025, compared to $35.5 million for the comparable prior year period.

increase in cash provided in the nine months ended September 27, 2025 is primarily attributable to the impact of the write-off of inventory

related to the Company’s inventory rationalization, increased collections of trade receivables, and the lower net payouts of accrued

employee compensation and benefits in the nine months ended September 27, 2025, partially offset by the decrease in net income and the

lesser reductions in prepaid expenses and other current assets in the nine months ended September 27, 2025.

was $18.8 million for the three months ended March 28, 2026, compared to $11.1 million for the comparable prior year period.

in cash provided in the three months ended March 28, 2026 is primarily attributable to decreased inventory, lower net payouts of accrued

employee compensation and benefits, and the lesser reduction in accounts payable and accrued expenses, and increases to prepaid expenses

and other current assets in the three months ended March 28, 2026, partially offset by the decrease in net income and decreased collections

of trade receivables in the three months ended March 28, 2026.

Third parties supply the Company

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Capital expenditures for the

nine months ended September 27, 2025 totaled $27.6 million, including $15.0 million at the closing of such transaction for the Anderson

Acquisition, an increase from $17.2 million in the comparable prior year period.

The Company expects total capital expenditures in 2025

to be approximately $20 million, exclusive of the Anderson purchase, as we invest in new product introductions, expand capacity, upgrade

our manufacturing capabilities and strengthen our facility infrastructure.

Actual capital expenditures could vary significantly from the

projected amounts due to the timing of capital projects.

The Company finances, and intends to continue to finance, all of these activities

with funds provided by operations and current cash and cash equivalents.

On July 1, 2025 the Company

completed the asset purchase of Anderson Manufacturing, a manufacturer of firearms and firearm accessories based in Hebron, Kentucky for

a total purchase price of $15.8 million, $15 million of which was paid at the closing of such transaction.

This strategic purchase includes

Anderson’s manufacturing facility and machinery and will provide Ruger the opportunity to work with a skilled and experienced workforce,

strengthening its production capabilities and expanding its product offerings.

three months ended March 28, 2026 totaled $4.8 million, an increase from $1.1 million in the comparable prior year period.

Company expects capital expenditures related to new product introductions and upgrades to its manufacturing equipment and facilities could

range from $20 million to $30 million.

Actual capital expenditures could vary significantly from the projected amounts due to the timing

of capital projects.

The Company finances, and intends to continue to finance, all of these activities with funds provided by operations

and current cash and cash equivalents.

Dividends of $1.3 million

were paid during the nine months ended September 27, 2025.

The Company has financed its dividends with cash provided by operations and

current cash.

The quarterly dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount

were paid during the three months ended March 28, 2026.

The Company has financed its dividends with cash provided by operations and current

The quarterly dividend varies every quarter because the Company pays a percentage of earnings rather than a fixed amount per share.

The Company’s practice is to pay a dividend of approximately 40% of net income.

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.

This dividend is approximately 40% of adjusted diluted earnings of 10¢ per share for the third quarter of 2025.

of future dividends depends on many factors, including internal estimates of future performance, then-current cash and short-term investments,

On April 30, 2026, the Company’s

Board of Directors authorized a dividend of 11¢ per share to stockholders of record on May 14, 2026, payable on May 29, 2026.

dividend is approximately 40% of adjusted diluted earnings of 27¢ per share for the first quarter of 2026.

The payment of future

dividends depends on many factors, including internal estimates of future performance, then-current cash and short-term investments,

and the Company’s need for funds.

As of September 27, 2025, the

Company had $38.9 million of United States Treasury instruments which mature within one year.

The Company also invests available cash

in a bank-managed money market fund that invests exclusively in United States Treasury instruments which mature within one year.

27, 2025, the Company’s investment in this money market fund totaled $25.9 million.

During the nine months ended September

27, 2025 the Company purchased 730,665 shares of its common stock for $26.0 million in the open market.

The average price per share purchased

These purchases were funded with cash on hand.

As of September 27, 2025, $14.3 million remained authorized for future stock

As of March 28, 2026, the Company

had $39.6 million of United States Treasury instruments which mature within one year.

The Company also invests available cash in a bank-managed

money market fund that invests exclusively in United States Treasury instruments which mature within one year.

At March 28, 2026, the

Company’s investment in this money market fund totaled $41.8 million.

During the three months ended

March 28, 2026 the Company did not purchase any shares of its common stock for in the open market.

As of March 28, 2026, $14.3 million

remained authorized for future stock repurchases.

Based on its unencumbered assets,

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The Company’s unsecured

$40 million credit facility, which expires on January 7, 2028, was unused at September 27, 2025.

$40 million credit facility, which expires on January 7, 2028, was unused at March 28, 2026.

Other Operational Matters

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its deferred tax assets through tax deductions against future taxable income.

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.

The summary of the terms of the Rights Plan

set forth in Note 15 (above) is hereby incorporated by reference herein;

provided, however, that such 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.

On March 27, 2026,

the Company announced that Thomas A.

Dineen would step down from his role as Chief Financial Officer of Sturm, Ruger & Company, Inc.

on March 31, 2026.

On April 1, 2026, Andrew T.

Wieland succeeded Mr.

Dineen as Chief Financial Officer of the Company and also became

a Senior Vice President of the Company.

Adjustments to Critical Accounting Policies

The Company has not made any adjustments

to its critical accounting estimates and assumptions described in the Company’s 2024 Annual Report on Form 10-K filed on February

to its critical accounting estimates and assumptions described in the Company’s 2025 Annual Report on Form 10-K filed on March 2,

2026, or the judgments affecting the application of those estimates and assumptions.

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or circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The interest rate market risk

implicit to the Company at any given time is typically low, as the Company does not have significant exposure to changing interest rates

on invested cash.

There has been no material change in the Company’s exposure to interest rate risks during the three months ended

March 28, 2026.

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 2. Management’s Discussion and Analysis