Sturm, Ruger & Company, Inc. Reports 2012 Fully Diluted Earnings of $3.60 Per Share and Declares Dividend of 40.4¢ Per Share

  Sturm, Ruger & Company, Inc. Reports 2012 Fully Diluted Earnings of $3.60
  Per Share and Declares Dividend of 40.4¢ Per Share

Business Wire

SOUTHPORT, Conn. -- February 27, 2013

Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for 2012, the
Company reported net sales of $491.8 million and fully diluted earnings of
$3.60 per share, compared with net sales of $328.8 million and fully diluted
earnings of $2.09 per share in 2011.

For the fourth quarter of 2012, net sales were $141.8 million and fully
diluted earnings were $1.00 per share. For the corresponding period in 2011,
net sales were $93.2 million and fully diluted earnings were 54¢ per share.

The Company also announced today that its Board of Directors declared a
dividend of 40.4¢ per share for the fourth quarter, for shareholders of record
as of March 8, 2013, payable on March 22, 2013. This dividend varies every
quarter because the Company pays a percent of earnings rather than a fixed
amount per share. This dividend is approximately 40% of net income.

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

  *Our earnings increased 77% in 2012, driven by the 50% 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 $182.0 million or 38% of firearm sales in
    2012. New product introductions in 2012 included:

       *the Ruger American rifle,
       *the 10/22 TakeDown rifle,
       *the SR22 pistol,
       *the 22/45 Lite pistol, and
       *the 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 fourth quarter and twelve months ended December 31, 2012 as
    illustrated below:

                                        Period ended December 31, 2012
                                                Q4           Twelve months
              Increase in estimated Ruger
              Units Sold                        73%          63%

              from Distributors to Retailers
                                                              
              Increase in total adjusted NICS   41%           28%
              Background Checks

  *Cash generated from operations during 2012 was $87.2 million. At December
    31, 2012, our cash and cash equivalents totaled $31 million, a decrease of
    $50 million from December 2011 due to the $87 million special dividend
    paid in December. Our current ratio is 1.6 to 1 and we have no debt.
  *In 2012, capital expenditures totaled $27.3 million, much of it related to
    new products and the expansion of production capacity. We expect to invest
    approximately $30 million for capital expenditures during 2013.
  *In 2012, the Company returned $111.5 million to its shareholders through
    the payment of dividends.
  *At December 31, 2012, stockholders’ equity was $95.0 million, which
    equates to a book value of $4.93 per share, of which $1.61 per share was
    cash and equivalents.

Today, the Company filed its Annual Report on Form 10-K for 2012. The
financial statements included in this Annual Report on Form 10-K are attached
to this press release.

The Annual Report on Form 10-K 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 Annual Report on Form 10-K 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.
                                                                      
Balance Sheets
(Dollars in thousands, except per share data)
                                                                      
December 31,                                   2012       2011     
                                                                      
Assets
                                                                      
Current Assets
Cash and cash equivalents                     $ 30,978     $ 81,056
Trade receivables, net                          43,018       42,225
                                                                      
Gross inventories                               55,827       49,004
Less LIFO reserve                               (38,089  )   (37,476  )
Less excess and obsolescence reserve           (1,729   )  (1,311   )
Net inventories                                16,009     10,217   
                                                                      
Deferred income taxes                           5,284        5,776
Prepaid expenses and other current assets      1,632      6,968    
Total Current Assets                            96,921       146,242
                                                                      
Property, Plant, and Equipment                  195,713      169,142
Less allowances for depreciation               (129,720 )  (116,195 )
Net property, plant and equipment              65,993     52,947   
                                                                      
Deferred income taxes                           2,004        32
Other assets                                   9,568      7,289    
Total Assets                                  $ 174,486   $ 206,510  

STURM, RUGER & COMPANY, INC.
                                                                    
Balance Sheets (Continued)
(Dollars in thousands, except per share data)
                                                                    
December 31,                                   2012      2011    
                                                                    
Liabilities and Stockholders’ Equity
                                                                    
Current Liabilities
Trade accounts payable and accrued expenses   $ 38,500    $ 28,592
Product liability                               720         1,305
Employee compensation and benefits              15,182      14,882
Workers’ compensation                           4,600       4,600
Income taxes payable                           489       217     
Total Current Liabilities                       59,491      49,596
                                                                    
Accrued pension liability                       19,626      19,082
Product liability                               337         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 – 23,562,422 issued,
19,262,988 outstanding
2011 – 23,382,566 issued,
19,083,132 outstanding                          23,563      23,383
Additional paid-in capital                      15,531      10,454
Retained earnings                               123,442     168,981
Less: Treasury stock – at cost
2012 and 2011 – 4,299,434 shares                (37,884 )   (37,884 )
Accumulated other comprehensive loss           (29,620 )  (27,543 )
Total Stockholders’ Equity                     95,032    137,391 
Total Liabilities and Stockholders’ Equity    $ 174,486  $ 206,510 

STURM, RUGER & COMPANY, INC.
                                                                             
Statements of Income and Comprehensive
Income
(Dollars in thousands, except per share
data)
                                                                             
Year ended December 31,                     2012      2011      2010    
                                                                             
Net firearms sales                         $ 484,933   $ 324,200   $ 251,680
Net castings sales                          6,891     4,616     3,526   
Total net sales                              491,824     328,816     255,206
                                                                             
Cost of products sold                        312,871     217,058     171,224
                                                                    
Gross profit                                178,953   111,758   83,982  
                                                                             
Operating Expenses:
Selling                                      38,363      28,691      23,517
General and administrative                   29,231      20,970      16,652
Other operating expenses (income), net      293       (319    )  420     
Total operating expenses                     67,887      49,342      40,589
                                                                    
Operating income                            111,066   62,416    43,393  
                                                                             
Other income:
Royalty income                               824         873         429
Interest income                              34          29          48
Interest expense                             (95     )   (110    )   (143    )
Other income, net                           280       308       422     
Total other income, net                      1,043       1,100       756
                                                                    
Income before income taxes                  112,109   63,516    44,149  
                                                                             
Income taxes                                 41,480      23,501      15,894
                                                                    
Net income                                   70,629      40,015      28,255
                                                                             
Other comprehensive (loss) income, net of
tax:
Defined benefit pension plans                (2,077  )   (7,895  )   714
                                                                    
Comprehensive income                       $ 68,552   $ 32,120   $ 28,969  
                                                                             
Basic Earnings Per Share                   $ 3.69     $ 2.12     $ 1.48    
                                                                             
Fully Diluted Earnings Per Share           $ 3.60     $ 2.09     $ 1.46    
                                                                             
Cash Dividends Per Share                   $ 5.80     $ 0.43     $ 0.33    

STURM, RUGER & COMPANY, INC.
                                                                             
Statements of Cash Flows
(Dollars in thousands)
                                                                             
Year ended December 31,                  2012       2011       2010     
                                                                             
Operating Activities
Net income                              $ 70,629     $ 40,015     $ 28,255
Adjustments to reconcile net income to
cash

provided by operating activities:
Depreciation and amortization             14,888       12,148       9,207
Stock-based compensation                  4,718        2,953        2,589
Excess and obsolescence inventory         761          (234     )   (1,057   )
reserve
Loss (gain) on sale of assets             (944     )   (26      )   22
Deferred income taxes                     (1,480   )   8,205        493
Impairment charge                         (1,134   )   -            -
Changes in operating assets and
liabilities:
Trade receivables                         (793     )   (10,660  )   (6,516   )
Inventories                               (6,553   )   (156     )   888
Trade accounts payable and accrued        9,908        11,807       3,932
expenses
Employee compensation and benefits        (4,345   )   3,959        (1,967   )
Product liability                         (689     )   724          (1,060   )
Prepaid expenses, other assets and        1,947        (10,961  )   (1,333   )
other liabilities
Income taxes payable                     272        (365     )  (962     )
Cash provided by operating activities     87,185       57,409       32,491
                                                                             
Investing Activities
Property, plant, and equipment            (27,282  )   (22,135  )   (19,409  )
additions
Purchases of short-term investments       (59,966  )   (122,978 )   (164,966 )
Proceeds from sales or maturities of      59,966       175,471      163,214
short-term investments
Net proceeds from sale of assets         1,003      319        21       
Cash (used for) provided by investing     (26,279  )   30,677       (21,140  )
activities
                                                                             
Financing Activities
Dividends paid                            (111,523 )   (8,159   )   (6,317   )
Tax benefit from exercise of stock        3,474        3,855        1,923
options
Repurchase of common stock                -            (1,999   )   (5,718   )
Payment of employee withholding tax       (3,083   )   (5,859   )   (1,115   )
related to share-based compensation
Proceeds from exercise of stock options  148        -          -        
Cash used for financing activities       (110,984 )  (12,162  )  (11,227  )
                                                                             
(Decrease) increase in cash and cash      (50,078  )   75,924       124
equivalents
Cash and cash equivalents at beginning   81,056     5,132      5,008    
of year
Cash and cash equivalents at end of     $ 30,978    $ 81,056    $ 5,132    
year

Contact:

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