Sturm, Ruger & Company, Inc. Reports Third Quarter 2012 Fully Diluted Earnings of 88¢ Per Share

  Sturm, Ruger & Company, Inc. Reports Third Quarter 2012 Fully Diluted
  Earnings of 88¢ Per Share

Business Wire

SOUTHPORT, Conn. -- October 31, 2012

Sturm, Ruger & Company, Inc. (NYSE: RGR), announced today that for the third
quarter 2012, the Company reported net sales of $118.2 million and fully
diluted earnings of 88¢ per share, compared with net sales of $80.5 million
and fully diluted earnings of 56¢ per share in the third quarter of 2011.

For the nine months ended September 29, 2012, net sales were $350.1 million
and fully diluted earnings were $2.58 per share. For the corresponding period
in 2011, net sales were $235.6 million and fully diluted earnings were $1.55
per share.

The Company also announced today that its Board of Directors declared a
dividend of 38.2¢ per share for the third quarter, for shareholders of record
as of November 12, 2012, payable on November 26, 2012. This dividend varies
every quarter because the Company pays a percent of earnings rather than a
fixed amount per share. Effective with the dividend paid in March 2012, the
Company increased the percent of quarterly earnings paid out as dividends by
67%. This dividend is approximately 40% of net income.

Chief Executive Officer Michael O. Fifer made the following comments related
to the Company’s results:

  *Our earnings increased 62% from the third quarter of 2011, driven by the
    47% growth in sales and our ongoing focus on continuous improvement in our
    operations.
  *New product introductions were a significant component of our sales growth
    as new product sales represented $130.3 million or 38% of sales in the
    first nine months of 2012. New product introductions in the first nine
    months of 2012 included:

       *Ruger American Rifle
       *SR22 pistol
       *10/22 Takedown rifle
       *22/45 Lite pistol
       *Single-Nine revolver

  *Demand for our products outpaced the growth in overall industry demand as
    measured by the National Instant Criminal Background Check System (“NICS”)
    background checks (as adjusted by the National Shooting Sports Foundation)
    for both the third quarter and nine months ended September 29, 2012 as
    illustrated below:

                                          Period ended September
                                                        29, 2012
                                                        Q3     Nine months
                          Increase in estimated Ruger
                          Units Sold                    62%    60%
                          from Distributors to
                          Retailers
                                                               
                          Increase in total adjusted
                          NICS                          22%    21%
                          Background Checks

  *Cash generated from operations during the nine months ended September 29,
    2012 was $61.8 million. At September 29, 2012, our cash, cash equivalents,
    and short-term investments totaled $105.1 million, an increase of $24
    million from December 2011. Our current ratio is 3.2 to 1 and we have no
    debt.
  *In the first nine months of 2012, capital expenditures totaled $20.3
    million, much of it related to new products and the expansion of
    production capacity. We expect to invest approximately $25 million for
    capital expenditures during 2012.
  *In the first nine months of 2012, the Company returned $17.5 million to
    its shareholders through the payment of dividends. An additional $7.3
    million in dividends will be paid to shareholders on November 26, 2012.
  *At September 29, 2012, stockholders’ equity was $174 million, which
    equates to a book value of $9.08 per share, of which $5.49 per share was
    cash and equivalents.

Today, the Company filed its Quarterly Report on Form 10-Q for the third
quarter of 2012. The financial statements included in this Quarterly Report on
Form 10-Q are attached to this press release.

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

About Sturm, Ruger

Sturm, Ruger was founded in 1949 and is one of the nation’s leading
manufacturers of high-quality firearms for the commercial sporting market.
Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities
located in Newport, NH and Prescott, AZ.

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

STURM, RUGER & COMPANY, INC.



Condensed Balance Sheets (Unaudited)
(Dollars in thousands, except share data)

                                         September 29,  December 31,
                                          2012            2011
                                                          
                                                          
Assets
                                                          
Current Assets
Cash and cash equivalents                 $75,123         $ 81,056
Short-term investments                    29,973          -
Trade receivables, net                    47,474          42,225
                                                          
Gross inventories                         53,517          49,004
Less LIFO reserve                         (38,435)        (37,476)
Less excess and obsolescence reserve      (1,712)         (1,311)
Net inventories                           13,370          10,217
                                                          
Deferred income taxes                     4,851           5,776
Prepaid expenses and other current assets 1,725           6,968
Total Current Assets                      172,516         146,242
                                                          
Property, plant and equipment             189,137         169,142
Less allowances for depreciation          (126,006)       (116,195)
Net property, plant and equipment         63,131          52,947
                                                          
Deferred income taxes                     1,222           32
Other assets                              10,916          7,289
Total Assets                              $247,785        $206,510

STURM, RUGER & COMPANY, INC.



Condensed Balance Sheets (Unaudited) (Continued)
(Dollars in thousands, except share data)
                                                          
                                           September 29,   December 31,
                                            2012            2011
                                                            
                                                            
Liabilities and Stockholders’ Equity
                                                            
Current Liabilities
Trade accounts payable and accrued expenses $ 31,330        $ 28,592
Product liability                           1,005           1,305
Employee compensation and benefits          16,591          14,882
Workers’ compensation                       4,433           4,600
Income taxes payable                        848             217
Total Current Liabilities                   54,207          49,596
                                                            
Accrued pension liability                   19,142          19,082
Product liability accrual                   389             441
                                                            
Contingent liabilities                      --              --
                                                            
                                                            
Stockholders’ Equity
Common Stock, non-voting, par value $1:
Authorized shares 50,000; none issued       --              --
Common Stock, par value $1:
Authorized shares – 40,000,000
2012 – 23,459,506 issued,
19,160,072 outstanding
2011 – 23,382,566 issued,
19,083,132 outstanding                    23,460          23,383
Additional paid-in capital                  13,686          10,454
Retained earnings                           202,328         168,981
Less: Treasury stock – at cost
                                                           
2012 – 4,299,434 shares
                                            (37,884)        (37,884)
2011 – 4,299,434 shares
Accumulated other comprehensive loss        (27,543)        (27,543)
Total Stockholders’ Equity                  174,047         137,391
Total Liabilities and Stockholders’ Equity  $247,785        $206,510

STURM, RUGER & COMPANY, INC.



Condensed Statements of Income and Comprehensive Income (Unaudited)
(Dollars in thousands, except per share data)
                                                    
                        Three Months Ended           Nine Months Ended
                                         October 1,   September   October 1,
                         September 29,  2011         29,        2011
                         2012                         2012
                                                                 
                                                                             
                                                                             
Net firearms sales       $116,270        $79,214      $345,203    $232,126
Net castings sales       1,882           1,298        4,854       3,449
Total net sales          118,152         80,512       350,057     235,575
                                                                             
Cost of products sold    75,587          51,385       220,565     153,989
                                                              
Gross profit             42,565          29,127       129,492     81,586
                                                                             
Operating expenses:
Selling                  7,891           6,581        27,998      19,961
General and              7,437           5,659        21,543      15,218
administrative
Total operating expenses 15,328          12,240       49,541      35,179
                                                                             
Operating income         27,237          16,887       79,951      46,407
                                                                             
Other income:
Interest expense, net    (18)            (21)         (62)        (54)
Other income, net        319             177          813         466
Total other income, net  301             156          751         412
                                                                             
Income before income     27,538          17,043       80,702      46,819
taxes
                                                                             
Income taxes             10,189          6,306        29,860      17,323
                                                                             
Net income and           $17,349         $10,737      $50,842     $ 29,496
comprehensive income
                                                                             
Basic earnings per share $0.91           $0.57        $2.66       $1.56
                                                                             
Fully diluted earnings   $0.88           $0.56        $2.58       $1.55
per share
                                                                             
Cash dividends per share $0.377          $0.142       $0.913      $0.289

STURM, RUGER & COMPANY, INC.



Condensed Statements of Cash Flows (Unaudited)
(Dollars in thousands)
                                                    
                                                   Nine Months Ended
                                                    September 29,   October 1,
                                                    2012           2011

                                                                   
                                                                    
Operating Activities
Net income                                          $50,842         $ 29,496
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation                                        10,151          8,792
Slow moving inventory valuation adjustment          446             (35)
Stock-based compensation                            3,317           2,110
Gain on sale of assets                              (65)            (82)
Deferred income taxes                               (265)           1,376
Changes in operating assets and liabilities:
Trade receivables                                   (5,249)         (1,856)
Inventories                                         (3,599)         2,107
Trade accounts payable and accrued expenses         2,571           2,870
Employee compensation and benefits                  1,709           1,007
Product liability                                   (352)           454
Prepaid expenses, other assets and other            1,656           (4,419)
liabilities
Income taxes payable                                631             1,147
Cash provided by operating activities               61,793          42,967
                                                                    
Investing Activities
Property, plant and equipment additions             (20,315)        (12,209)
Proceeds from sale of assets                        65              127
Purchases of short-term investments                 (59,966)        (122,978)
Proceeds from maturities of short-term investments  29,993          149,473
Cash provided by (used for) investing activities    (50,223)        14,413
                                                                    
Financing Activities
Tax benefit from exercise of stock options          1,038           3,087
Repurchase of common stock                          -               (1,999)

Payment of employee withholding tax related to                     

share-based compensation                            (1,045)         (4,782)
Dividends paid                                      (17,496)        (5,474)
Cash used for financing activities                  (17,503)        (9,168)
                                                                    
(Decrease) Increase in cash and cash equivalents    (5,933)         48,212
                                                                    
Cash and cash equivalents at beginning of period    81,056          5,132
                                                                  
Cash and cash equivalents at end of period          $75,123         $ 53,344

Contact:

Sturm, Ruger & Company, Inc.
One Lacey Place
Southport, CT 06890
www.ruger.com
203-259-7843
 
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