1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission File Number 001-10435
STURM, RUGER & COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
06-0633559
(I.R.S. Employer
Identification No.)
1 Lacey Place, Southport, Connecticut
(Address of Principal Executive Offices)
06890
(Zip Code)
(203) 259-7843
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $1 par value
Trading Symbol(s)
RGR
Name of Each Exchange on Which Registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES NO
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES NO
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or shorter such period of time that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES NO
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). YES NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller
reporting company [ ] Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. [ ]
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. YES NO
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES NO
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the price
at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2024:
Common Stock, $1 par value - $771,970,000
2
The number of shares outstanding of the registrant's common stock as of February 10, 2025: Common Stock, $1 par value –16,762,100, shares
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the registrant’s Proxy Statement relating to the 2025 Annual Meeting of Stockholders to be held May 29, 2025 are incorporated by
reference into Part III (Items 10 through 14) of this Report.
3
TABLE OF CONTENTS
PART I
Item 1.
Business.…………………………………..……………………………………………………………
5
Item 1A.
Risk Factors…………………………………………………………………………………………….
12
Item 1B.
Unresolved Staff Comments…………………………………………………………………………...
17
Item 1C.
Cybersecurity……………………………………………………………………………………...……
17
Item 2.
Properties.………………………………………………………………………………………………
18
Item 3.
Legal Proceedings....…………………………………………………………………………………...
19
Item 4.
Mine Safety Disclosures………………………………………………..................................................
19
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.……………………………………………………………………....
20
Item 6.
[Reserved]……………………………………………………………………………………………...
22
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations………….
23
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk………………………………………....
45
Item 8.
Financial Statements and Supplementary Data………………………………………………………...
46
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ………...
80
Item 9A.
Controls and Procedures.…………………………………………………………………………….....
80
Item 9B.
Other Information.……………………………………………………………………………………...
81
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections………………………………...
81
PART III
Item 10.
Directors, Executive Officers and Corporate Governance……………………………………………..
82
Item 11.
Executive Compensation.……………………………………………………………………………....
82
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.…………………………………………………………………………………………….....
82
Item 13.
Certain Relationships and Related Transactions and Director Independence………………………….
83
Item 14.
Principal Accountant Fees and Services….…………………………………………………………....
83
4
PART IV
Item 15.
Exhibits and Financial Statement Schedules.……………………………………………......................
84
Signatures…... ………………………………………………………………………………………………………….
87
Exhibit Index.. ………………………………………………………………………………………………………….
88
Financial Statement Schedule... ………………………………………………………………………………………...
91
Exhibits……... ……………………………………………………………………………………………………….....
93
EXPLANATORY NOTE:
In this Annual Report on Form 10-K, Sturm, Ruger & Company, Inc. and Subsidiaries (the “Company”) makes 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. Words such as “expect,” “believe,”
“anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other words and terms of similar meaning, typically
identify such forward-looking statements. 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.
5
PART I
ITEM 1—BUSINESS
Company Overview
Sturm, Ruger & Company, Inc. and Subsidiaries (the “Company”) is principally engaged in the
design, manufacture, and sale of firearms to domestic customers. Virtually all of the Company’s
sales for the year ended December 31, 2024 were from the firearms segment, with less than 1%
from the castings segment. Export sales represent approximately 5% of firearms sales. The
Company’s design and manufacturing operations are located in the United States and almost all
product content is domestic.
The Company has been in business since 1949 and was incorporated in its present form under the
laws of Delaware in 1969. The Company primarily offers products in three industry product
categories – rifles, pistols, and revolvers. The Company’s firearms are sold through independent
wholesale distributors, principally to the commercial sporting market.
The Company manufactures and sells investment castings made from steel alloys and metal
injection molding (“MIM”) parts for internal use in the firearms segment and has minimal sales to
outside customers. The castings and MIM parts are sold to outside customers, either directly or
through manufacturers’ representatives.
For the years ended December 31, 2024, 2023, and 2022, net sales attributable to the Company's
firearms operations were $533.6 million, $540.7 million and $593.3 million. The balance of the
Company's net sales for the aforementioned periods was attributable to its castings operations.
Firearms Products
The Company presently manufactures firearm products, under the “Ruger” name and trademark,
in the following industry categories:
Rifles
Revolvers
Single-shot
Single-action
Autoloading
Double-action
Bolt-action
Modern sporting
Pistols
Rimfire autoloading
Centerfire autoloading
In addition, the Company manufactures lever-action rifles under the “Marlin” name and trademark.
Most firearms are available in several models based upon caliber, finish, barrel length, and other
features.
6
Rifles
A rifle is a long gun with spiral grooves cut into the interior of the barrel to give the bullet a
stabilizing spin after it leaves the barrel. Net sales of rifles by the Company accounted for $310.2
million, $306.8 million, and $305.4 million of total net sales for the years 2024, 2023, and 2022,
respectively.
Pistols
A pistol is a handgun in which the ammunition chamber is an integral part of the barrel and which
typically is fed ammunition from a magazine contained in the grip. Net sales of pistols by the
Company accounted for $135.3 million, $131.4 million, and $184.7 million of revenues for the
years 2024, 2023, and 2022, respectively.
Revolvers
A revolver is a handgun that has a cylinder that holds the ammunition in a series of chambers
which are successively aligned with the barrel of the gun during each firing cycle. There are two
general types of revolvers, single-action and double-action. To fire a single-action revolver, the
hammer is pulled back to cock the gun and align the cylinder before the trigger is pulled. To fire
a double-action revolver, a single trigger pull advances the cylinder and cocks and releases the
hammer. Net sales of revolvers by the Company accounted for $54.8 million, $72.5 million, and
$70.0 million of revenues for the years 2024, 2023, and 2022, respectively.
Accessories
The Company also manufactures and sells accessories and replacement parts for its firearms.
These sales accounted for $33.3 million, $30.0 million, and $33.2 million of total net sales for the
years 2024, 2023, and 2022, respectively.
Castings Products
Net sales attributable to the Company’s casting operations (excluding intercompany transactions)
accounted for $3.0 million, $3.0 million, and $2.6 million, for 2024, 2023, and 2022, respectively.
These sales represented less than 1% of total net sales in each year.
Manufacturing
Firearms
The Company produces some of its pistol models, most of its revolvers, and some of its rifle
models at the Newport, New Hampshire facility. One model of revolver, one model of rifle, and
most of the Company’s pistols are produced at the Prescott, Arizona facility. Some rifle models
and pistol models are produced at the Mayodan, North Carolina facility.
Many of the basic metal component parts of the firearms manufactured by the Company are
produced by the Company's castings segment through precision investment casting and metal
injection molding. See "Manufacturing- Investment Castings and Metal Injected Moldings" below
for a description of these processes. The Company believes that investment castings and MIM
parts provide greater design flexibility and result in component parts which are generally close to
their ultimate shape and, therefore, require less machining than processes requiring machining a
7
solid billet of metal to obtain a part. Through the use of investment castings and MIM parts, the
Company endeavors to produce durable and less costly component parts for its firearms.
All assembly, inspection, and testing of firearms manufactured by the Company are performed at
the Company's manufacturing facilities. Every firearm, including every chamber of every revolver
manufactured by the Company, is test-fired prior to shipment.
Investment Castings and Metal Injection Moldings
To produce a product by the investment casting method, a wax model of the part is created and
coated (“invested”) with several layers of ceramic material. The shell is then heated to melt the
interior wax, which is poured off, leaving a hollow mold. To cast the desired part, molten metal is
poured into the mold and allowed to cool and solidify. The mold is then broken off to reveal a
near net shape cast metal part.
Metal injection molding is a three part powder metallurgy process by which a feedstock consisting
of finely powdered metal and binders is processed through injection molding, debinding, and
sintering equipment to produce steel, stainless steel, and alloy parts of complex shape and
geometry. This process allows for high volume production while eliminating many of the wastes
of traditional metal working methods, yielding net shape and near net shape parts.
Marketing and Distribution
Firearms
The Company's firearms are primarily marketed through a network of federally licensed,
independent wholesale distributors who purchase the products directly from the Company. They
resell to federally licensed, independent retail firearms dealers who in turn resell to legally
authorized end users. All retail purchasers are subject to a point-of-sale background check by law
enforcement. These end users include sportsmen, hunters, people interested in self-defense, law
enforcement and other governmental organizations, and gun collectors. Each domestic distributor
carries the entire line of firearms manufactured by the Company for the commercial market.
Currently, 14 distributors service the domestic commercial market, with an additional 26
distributors servicing the domestic law enforcement market and 44 distributors servicing the export
market.
In 2024, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s – 28%; Sports South - 18%; and Davidson’s - 16%.
In 2023, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s – 24%; Davidson’s - 19%; and Sports South - 15%.
In 2022, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s - 23%; Davidson’s - 23%; and Sports South - 21%.
The Company employs 18 employees who service these distributors and call on retailers and law
enforcement agencies. Because the ultimate demand for the Company's firearms comes from end
users rather than from the independent wholesale distributors, the Company believes that the loss
8
of any distributor would not have a material, long-term adverse effect on the Company, but may
have a material adverse effect on the Company’s financial results for a particular period. The
Company considers its relationships with its distributors to be satisfactory.
The Company also exports its firearms through a network of selected commercial distributors and
directly to certain foreign customers, consisting primarily of law enforcement agencies and foreign
governments. Foreign sales were 5%, 6%, and 6% of the Company’s consolidated net sales for
2024, 2023, and 2022, respectively.
Investment Castings and Metal Injection Moldings
The castings segment provides castings and MIM parts for the Company’s firearms segment. In
addition, the castings segment produces some products for a number of customers in a variety of
industries.
Competition
Firearms
Competition in the firearms industry is intense and comes from both foreign and domestic
manufacturers. While some of these competitors concentrate on a single industry product category
such as rifles or pistols, many competitors manufacture products in two or three of the four
categories (rifles, shotguns, pistols, and revolvers) and a few competitors manufacture products in
all four categories. The principal methods of competition in the industry are product innovation,
quality, availability, brand, and price. The Company believes that it can compete effectively with
all of its present competitors.
Investment Castings and Metal Injection Moldings
There are a large number of investment castings and MIM manufacturers, both domestic and
foreign, with which the Company competes. Competition varies based on the type of investment
castings products and the end use of the product. Companies offering alternative methods of
manufacturing such as wire electric discharge machining (EDM) and advancements in computer
numeric controlled (CNC) machining also compete with the Company’s castings segment. Many
of these competitors are larger corporations than the Company with substantially greater financial
resources than the Company, which could affect the Company’s ability to compete with these
competitors. The principal methods of competition in the industry are quality, price, and
production lead time.
Human Capital
The Company is an equal opportunity employer dedicated to the attraction, development, and
retention of our employees by providing a preferred work environment that promotes and
celebrates our core values of Integrity, Respect, Innovation and Teamwork. Our goal is to develop,
motivate, retain and reward passionate and dedicated employees.
As of February 1, 2025, the Company employed approximately 1,780 full-time employees,
approximately 33% of whom had at least ten years of service with the Company.
9
The Company attracts candidates and retains employees by offering competitive compensation
packages, which include:
Base wages,
Profit sharing,
Medical and welfare benefits,
Holidays and other paid time off, and
401(k) plan participation and matching program.
The Company believes its compensation packages:
Provide a base level of compensation to reflect an individual’s role and responsibilities,
Recognize and reward employees for the Company’s success, and
Provide for the safety, security and well-being of employees.
Our primary vehicle for human capital development is Ruger University, which has a mission to:
Enhance the understanding of our industry, Company and culture,
Strengthen the technical, interpersonal and leadership skills of each employee, and
Allow employees to positively change their own lives while creating value for all Ruger
stakeholders.
In addition to providing a competitive compensation package and emphasizing the development
of employees, the Company retains its employees by maintaining a safe, responsible, and preferred
workplace. The Company is committed to conducting business in conformance with the highest
ethical standards and in compliance with all applicable legal and regulatory requirements. The
“Code of Business Conduct and Ethics” and the “Corporate Compliance Program” are two active
programs that guide the Company’s practices to achieve these goals.
To assess and improve employee retention and engagement, the Company surveys employees on
an annual basis with the assistance of a third-party consultant, and takes actions to address areas
of employee concern and build on the competencies that are important for our future success.
Research and Development
In 2024, 2023, and 2022, the Company spent approximately $8.2 million, $9.8 million, and $9.6
million, respectively, on research and development activities relating to new products and the
improvement of existing products. Research and development expenses are included in costs of
products sold. As of February 1, 2025, the Company had approximately 60 employees whose
primary responsibilities were research and development activities.
Patents and Trademarks
The Company owns various United States and foreign patents and trademarks which have been
secured over a period of years and which expire at various times. It is the policy of the Company
to apply for patents and trademarks whenever new products or processes deemed commercially
10
valuable are developed or marketed by the Company. The Company deems its patents and
trademarks to be valuable and therefore works to police and protect them.
Environmental Matters
The Company is committed to achieving high standards of environmental quality and product
safety, and strives to provide a safe and healthy workplace for its employees and others in the
communities in which it operates. The Company has programs in place that monitor compliance
with various environmental regulations. However, in the normal course of its manufacturing
operations the Company is subject to governmental proceedings and orders pertaining to waste
disposal, air emissions, and water discharges into the environment. These regulations are
integrated into the Company’s manufacturing, assembly, and testing processes. The Company
believes that it is generally in compliance with applicable environmental regulations and that the
outcome of any environmental proceedings and orders will not have a material adverse effect on
the financial position of the Company, but could have a material adverse effect on the financial
results for a particular period.
Information about our Executive Officers
Set forth below are the names, ages, and positions of the executive officers of the Company.
Officers serve at the discretion of the Board of Directors of the Company.
Name
Age
Position With Company
Christopher J. Killoy
66
President and Chief Executive Officer
(until March 1, 2025)
Todd W. Seyfert
55
President and Chief Executive Officer
(effective March 1, 2025)
Thomas A. Dineen
56
Senior Vice President, Treasurer, and Chief Financial
Officer
Kevin B. Reid, Sr.
64
Vice President, General Counsel, and Corporate Secretary
Shawn C. Leska
53
Vice President, Sales
Sarah F. Colbert
44
Vice President, Administration
Timothy M. Lowney
61
Vice President of Manufacturing Operations
Michael W. Wilson
48
Vice President of New Product Development
Robert J. Werkmeister, Jr.
50
Vice President of Marketing
Christopher J. Killoy became President & Chief Executive Officer on May 9, 2017. Previously he
served as President and Chief Operating Officer since January 1, 2014. Prior to that he served as
Vice President of Sales and Marketing since November 27, 2006. Mr. Killoy originally joined the
Company in 2003 as Executive Director of Sales and Marketing, and subsequently served as Vice
11
President of Sales and Marketing from November 1, 2004 to January 25, 2005. Mr. Killoy will
step down as President & Chief Executive Officer on March 1, 2025 and then serve as a Special
Advisor through his planned retirement from the Company in May 2025.
Todd W. Seyfert will become President & Chief Executive Officer on March 1, 2025. Previously,
Mr. Seyfert served as the President of Segment Land Vehicles Americas at Dometic Group AB
since January 2024. Prior to that Mr. Seyfert served as the Chief Executive Officer of FeraDyne
Outdoors, LLC, a leading manufacturer of premium archery and hunting products from February
2016 through May 2023.
Thomas A. Dineen became Senior Vice President on July 10, 2017. Previously he served as Vice
President since May 24, 2006. Prior to that he served as Treasurer and Chief Financial Officer
since May 6, 2003 and had been Assistant Controller since 2001. Mr. Dineen joined the Company
as Manager, Corporate Accounting in 1997.
Kevin B. Reid, Sr. became Vice President and General Counsel on April 23, 2008. Previously he
served as the Company’s Director of Marketing from June 4, 2007. Mr. Reid joined the Company
in July 2001 as an Assistant General Counsel.
Shawn C. Leska became Vice President, Sales on November 6, 2015. Mr. Leska joined the
Company in 1989 and has served in a variety of positions in the sales department. Most recently,
Mr. Leska served as Director of Sales since 2011.
Sarah F. Colbert became Vice President of Administration on June 1, 2017. Ms. Colbert has served
the Company in various human resource and legal capacities since joining the Company in 2011.
Timothy M. Lowney became Vice President of Manufacturing Operations on June 15, 2023.
Previously, he served as the Company’s Vice President of Operations for Newport, Prescott and
RPM Manufacturing since June 15, 2023. Mr. Lowney joined the Company in January 2007.
Michael W. Wilson became Vice President of New Product Development on April 1, 2024.
Previously, he served as the Company’s Vice President of Operations for New Product
Development, Product Engineering and Mayodan Manufacturing since June 15, 2023. Mr. Wilson
joined the Company in July 2007.
Robert J. Werkmeister, Jr. became Vice President of Marketing upon joining the Company on June
1, 2017. Mr. Werkmeister has served as the Company’s Director of Marketing since January 2013
as President and founder of Symbolic, Inc., a full-service marketing agency. While with Symbolic,
Rob began working with Ruger as a client in 2002 and has been the primary strategic marketing
driver for the Ruger account since 2007.
Where You Can Find More Information
The Company is subject to the informational requirements of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and accordingly, files its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K, and
12
other information with the Securities and Exchange Commission (the “SEC”). As an electronic
filer, the Company's public filings are maintained on the SEC's Internet site that contains reports,
proxy and information statements, and other information regarding issuers that file electronically
with the SEC. The address of that website is http://www.sec.gov.
The Company makes its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Definitive Proxy Statements, Current Reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act accessible free of charge
through the Company's Internet site after the Company has electronically filed such material with,
or furnished it to, the SEC. The address of that website is http://www.ruger.com. However, such
reports may not be accessible through the Company's website as promptly as they are accessible
on the SEC’s website.
Additionally, the Company’s corporate governance materials, including its Corporate Governance
Guidelines, the charters of the Audit, Compensation, Nominating and Corporate Governance, Risk
Oversight and Capital Policy committees, and the Code of Business Conduct and Ethics may also
be found under the “Investor Relations” subsection of the “Corporate” section of the Company’s
Internet site at http://www.ruger.com/corporate. A copy of the foregoing corporate governance
materials is available upon written request to the Corporate Secretary at Sturm, Ruger & Company,
Inc., 1 Lacey Place, Southport, Connecticut 06890.
ITEM 1A—RISK FACTORS
The Company’s operations could be affected by various risks, many of which are beyond its
control. Based on current information, the Company believes that the following identifies the most
significant risk factors that could have a material, adverse effect on its business, operating results,
and financial condition. Past financial performance may not be a reliable indicator of future
performance and historical trends should not be used to anticipate results or trends in future
periods.
In evaluating the Company’s business, the following risk factors, as well as other information in
this report, should be carefully considered.
Changes in government policies and firearms legislation could adversely affect the
Company’s financial results.
The sale, purchase, ownership, and use of firearms are subject to thousands of federal, state and
local governmental regulations. The basic federal laws are the National Firearms Act, the Federal
Firearms Act, and the Gun Control Act of 1968. Federal law generally prohibits the private
ownership of fully automatic weapons manufactured after 1986 and places certain restrictions on
the interstate sale of firearms unless certain licenses are obtained. The Company does not
manufacture fully automatic weapons and holds all necessary licenses under these federal laws. If
the scope of the National Firearms Act is expanded to regulate firearms currently regulated by the
Gun Control Act, it could make acquisition of commonly owned and used firearms more expensive
and complicated for consumers, which could have a material adverse impact on demand for
Company products. Several states currently have laws in effect similar to the aforementioned
legislation.
13
In 2005, Congress enacted the Protection of Lawful Commerce in Arms Act (“PLCAA”). The
PLCAA was enacted to address abuses by cities and agenda-driven individuals who wrongly
sought to make firearms manufacturers liable for legally manufactured and lawfully sold products
if those products were later used in criminal acts. The Company believes the PLCAA merely
codifies common sense and long standing tort principles. If the PLCAA is repealed or efforts to
circumvent it are successful and lawsuits similar to those filed by cities and agenda-driven
individuals in the late 1990s and early 2000s are allowed to proceed, it could have a material
adverse impact on the Company.
Currently, federal and several states’ legislatures are considering additional legislation relating to
the regulation of firearms, and a number of new laws have been enacted at the federal, state, and
local level. Enacted legislation and proposed bills are numerous and extremely varied, but many
seek to limit magazine capacity, restrict or ban the sale and, in some cases, the ownership of various
types of firearms, or ban commonly owned firearms with certain features. Other legislation seeks
to require new technologies, such as microstamping and so-called “smart gun” technology, which
are not proven, reliable or feasible.
The Company believes that the lawful private ownership of firearms is guaranteed by the Second
Amendment to the United States Constitution and that the widespread private ownership of
firearms in the United States will continue. However, there can be no assurance that the regulation
of firearms will not become more restrictive in the future and that any such restriction would not
have a material adverse effect on the business of the Company. Numerous bills regulating the
ownership of firearms have been proposed at the state and federal levels, and these bills propose a
wide variety of restrictions including, for example, limiting the number of firearms that may be
purchased in a specified time, increasing the age for ownership, imposing additional licensing or
registration requirements, creating additional restrictions on certain, common firearm features, and
levying new taxes on firearms and/or ammunition.
The Company’s results of operations could be further adversely affected if legislation with
diverse requirements is enacted.
With literally thousands of laws being proposed at the federal, state and local levels, if even a small
percentage of these laws are enacted and they are incongruent, the Company could find it difficult,
expensive or even practically impossible to comply with them, impeding new product development
and distribution of existing products.
The Company’s results of operations could be adversely affected by litigation.
The Company faces risks arising from various asserted and unasserted litigation matters. These
matters include, but are not limited to, assertions of allegedly defective product design or
manufacture, alleged failure to warn, claimed unfair trade practices, purported class actions against
firearms manufacturers, generally seeking relief such as medical expense reimbursement, property
damages, and punitive damages arising from accidents involving firearms or the criminal misuse
of firearms, and those lawsuits filed on behalf of municipalities alleging harm to the general public.
Various factors or developments can lead to changes in current estimates of liabilities such as final
adverse judgment, significant settlement or changes in applicable law. A future adverse outcome
in any one or more of these matters could have a material adverse effect on the Company’s
14
financial results. See Note 20 to the financial statements which are included in this Annual Report
on Form 10-K.
The Company relies upon relationships with financial institutions.
The Company utilizes the services of numerous financial institutions, including banks, insurance
carriers, transfer agents, and others. Anti-gun politicians, gun-control activists, and others may
target these institutions and attempt to pressure them into ceasing to do business with the
Company, or to use financial relationships to impose unacceptable and improper restrictions on
the Company’s business, which could have a material adverse impact on the Company’s business,
operating results, and financial condition. The potential volatility of these relationships may also
impact the Company’s decision making regarding the appropriate allocation of capital to be used
for activities such as internal investment, share repurchases, and potential acquisitions.
The Company’s insurance may be insufficient to protect us from claims or losses.
The Company maintains insurance coverage with third-party insurers and through a wholly-owned
captive insurance company with respect to product liability claims, which the Company
established in 2024. However, not every risk or liability is or can be protected by insurance, and,
for those risks it insures, the limits of coverage it purchases, or that are reasonably obtainable in
the market, or the funding level of the Company’s wholly-owned captive insurance company may
not be sufficient to cover all actual losses or liabilities incurred. Moreover, there is a risk that
commercially available liability insurance will not continue to be available to the Company at a
reasonable cost, if at all. If liability claims or losses exceed the Company’s current or available
insurance coverage, its business may be harmed.
The Company’s results of operations could be adversely affected by a decrease in demand
for Company products.
If demand for the Company’s products decreases significantly, the Company would be unable to
efficiently utilize its capacity, and profitability would suffer. Decreased demand could result from
a macroeconomic downturn, or could be specific to the Company and/or the firearms industry as
a result of social, political, or other factors. If the decrease in demand occurs abruptly, the adverse
impact would be even greater.
The financial health of the Company’s independent distributors is critical to its success.
Over 90% of the Company’s sales are made to 14 federally licensed, independent wholesale
distributors. The Company reviews its distributors’ financial statements and has credit insurance
for many of them. However, the Company’s credit evaluations of distributors and credit insurance
may not be completely effective, especially if higher interest rates continue to exact a financial
strain. If one or more independent distributors experience financial distress or liquidity issues, the
Company’s sales could be adversely affected and the Company may not be able to collect its
accounts receivable on a timely basis, which would have an adverse impact on its operating results
and financial condition.
The Company must comply with various laws and regulations pertaining to workplace safety
and environment, environmental matters, and firearms manufacturing.
In the normal course of its manufacturing operations, the Company is subject to numerous federal,
state and local laws and governmental regulations, and governmental proceedings and orders.
15
These laws and regulations pertain to matters like workplace safety and environment, firearms
serial number tracking and control, waste disposal, air emissions and water discharges into the
environment. Noncompliance with any one or more of these laws and regulations could have a
material adverse impact on the Company.
Misconduct of the Company’s employees or contractors could cause the Company to lose
customers and could have a significant adverse impact on its business and reputation.
Misconduct, fraud or other improper activities by the Company’s employees or contractors could
have a material adverse impact on its business and reputation. Such misconduct could include the
failure to comply with federal, state, local or foreign government procurement regulations,
regulations regarding the protection of personal information, laws and regulations relating to
antitrust and any other applicable laws or regulations.
Product quality and performance is important to the Company’s success.
The Company has a long history of producing rugged, reliable firearms for the commercial market.
While the Company believes its record of designing, manufacturing, and selling high-quality
products demonstrates its commitment to safety and quality, the Company has occasionally
identified design and/or manufacturing issues with respect to some firearms and, as a result, issued
a product safety bulletin or initiated a product recall. Depending upon the volume of products the
Company has shipped into the market, any future recall or safety bulletin could harm its reputation,
cause the Company to lose business, and cause the Company to incur significant support and repair
costs.
The ability to develop and produce new products is important to the Company’s success.
The Company has a long history of designing, engineering, and manufacturing innovative new
products. These new products help to drive growth, excitement, and profitability and have
historically allowed the Company to refrain from having to extend some of the aggressive
promotions, discounts, rebates, and the extension of payment terms offered by its competitors.
While the Company believes it has a strong record of designing, manufacturing, and selling new,
high-quality products, failure to continue to do so in the future could harm its reputation, cause the
Company to lose business, and cause the Company to incur significant promotional costs, which
would have an adverse impact on its operating results and financial condition.
The Company may be impacted by the actions of its competitors.
The Company remains focused on the long-term goal of creating shareholder value. Its disciplined
pricing and promotion strategy may not always benefit current period sales and profitability, but
endeavors to enhance its long-term performance and promote consistency throughout the
distribution channel. Allowing both independent distributors and retailers to confidently invest in
its inventory is essential to the Company’s long-term success and leadership in the volatile firearms
market. However, the aggressive promotions, discounts, rebates, and the extension of payment
terms offered by its competitors could negatively impact the Company’s market share, which
would have an adverse impact on its operating results and financial condition.
16
Business disruptions at one of the Company’s manufacturing facilities could adversely affect
the Company’s financial results.
The Newport, New Hampshire, Prescott, Arizona, Mayodan, North Carolina, and Earth City,
Missouri facilities are critical to the Company’s success. These facilities house the Company’s
principal production, research, development, engineering, design, and shipping operations. Any
event that causes a disruption of the operation of any of these facilities for even a relatively short
period of time could have a material adverse effect on the Company’s ability to produce and ship
products and to provide service to its customers.
The Company relies on its information and communications systems in its operations.
Security breaches and other disruptions could adversely affect its business and results of
operations.
Cybersecurity threats are significant and evolving and include, among others, malicious software,
attempts to gain unauthorized access to data, and other electronic security breaches that could lead
to disruptions in mission critical systems, unauthorized release of confidential or otherwise
protected information and corruption of data. In addition to security threats, the Company is also
subject to other systems failures, including network, software or hardware failures, whether caused
by the Company, third-party service providers, natural disasters, power shortages, terrorist attacks
or other events. The unavailability of the Company’s information or communications systems, the
failure of these systems to perform as anticipated or any significant breach of data security could
cause loss of data, disrupt Company operations, lead to financial losses from remedial actions,
require significant management attention and resources, and negatively impact the Company’s
reputation among its customers and the public, which could have a negative impact on the
Company’s financial condition, results of operations and liquidity.
The lack of available raw materials or component parts could disrupt or even cease the
Company’s manufacturing operations. Even if manufacturing operations are not disrupted,
increased costs of raw materials and component parts could adversely affect the Company’s
financial results.
Third parties supply the Company with various raw materials for its firearms and castings, such as
fabricated steel components, walnut, birch, beech, maple and laminated lumber for rifle stocks,
wax, ceramic material, metal alloys, various synthetic products and other component parts. There
is a limited supply of these materials in the marketplace at any given time, which can cause the
purchase prices to vary based upon numerous market factors. If market conditions result in a
significant prolonged inflation of certain prices or if adequate quantities of raw materials cannot
be obtained, the Company’s manufacturing processes could be interrupted and the Company’s
financial condition or results of operations could be materially adversely affected.
The Company relies primarily on third parties for transportation of the products it
manufactures as well as delivery of its raw materials.
Any increase in the cost of the transportation of the Company’s raw materials or products, as a
result of increases in fuel or labor costs, higher demand for logistics services, consolidation in the
transportation industry or otherwise, increased restrictions on the transportation of firearms, may
adversely affect its results of operations. If any of these providers were to fail to deliver raw
materials to the Company in a timely manner, the Company may be unable to manufacture and
deliver its products in a timely manner. In addition, if any of these third parties were to cease
17
operations or cease doing business with the Company, the Company may be unable to replace
them at a reasonable cost. And such failure of a third-party transportation provider could harm the
Company’s reputation, negatively affect its customer relationships and have a material adverse
effect on its financial position and results of operations.
Availability and retention of the Company’s labor force, especially its key management, is
critical to the success of the Company.
The Company has observed an overall tightening and increasingly competitive labor market, which
could inhibit its ability to recruit and retain the employees it requires and could lead to increased
costs, such as additional overtime to meet demand and increased wages and benefits to attract and
retain employees. The Company relies on the knowledge, experience, and leadership skills of its
senior management team. The Company’s senior executives are generally not bound by
employment agreements. The loss of the services of one or more of the Company’s senior
executives or other key personnel could have a significant adverse impact on its business.
ITEM 1B—UNRESOLVED STAFF COMMENTS
None
ITEM 1C—CYBERSECURITY
Risk management and strategy
The Company has processes for assessing, identifying, and managing material risks from
cybersecurity threats. These processes are integrated into the Company’s overall risk management
systems, as overseen by the Company’s Board of Directors, primarily through its Risk Oversight
Committee. These processes also include overseeing and identifying risks from cybersecurity
threats associated with the use of third-party service providers. The Company conducts security
assessments of certain third-party providers before engagement and has established monitoring
procedures in its effort to mitigate risks related to data breaches or other security incidents
originating from third parties. The Company from time to time engages third-party consultants,
legal advisors, and audit firms in evaluating and testing the Company’s risk management systems
and assessing and remediating certain potential cybersecurity incidents as appropriate.
The Company has an Information Security Program (“Program”) to protect personal and
proprietary information in compliance with applicable federal and state requirements. The
Program is designed to:
Ensure the security and confidentiality of employee and customer personal information
and Company proprietary information;
Protect against anticipated threats or hazards to the security or integrity of such
information; and
Protect against unauthorized access to, use of, or transfer of such information in a manner
that could harm or inconvenience the Company, employees or customers.
18
For more information about these risks, see the risk factor titled “The Company relies on its
information and communications systems in its operations. Security breaches and other disruptions
could adversely affect its business and results of operations” under Item 1A.
Governance
The Company’s Board of Directors has assigned oversight of cybersecurity risk management to
the Risk Oversight Committee. The Risk Oversight Committee regularly receives reports from
management, including senior information technology (“IT”) leadership, and third parties on
cybersecurity matters. In addition, the Company’s full Board of Directors receives reports
addressing cybersecurity as part of the Company’s overall enterprise risk management program
and to the extent cybersecurity matters are addressed in regular business updates.
Senior IT leaders are responsible for developing appropriate cybersecurity programs, including as
may be required by applicable law or regulation. These individuals’ expertise in IT and
cybersecurity generally has been gained from a combination of education, including relevant
degrees and/or certifications, and work experience. They are informed by their respective
cybersecurity teams about, and monitor, the prevention, detection, mitigation and remediation of
cybersecurity incidents as part of the cybersecurity programs described above.
Information regarding cybersecurity risks may be elevated by IT leadership through a variety of
channels, including discussions between or among key leaders and Company management and
reports to the Company’s Board of Directors and/or certain Board committees.
ITEM 2—PROPERTIES
The Company’s manufacturing operations are carried out at four facilities. The following table
sets forth certain information regarding each of these facilities:
Approximate
Aggregate
Usable
Square Feet
Status
Segment
Newport, New Hampshire
350,000
Owned
Firearms/Castings
Prescott, Arizona
230,000
Leased
Firearms
Mayodan, North Carolina
220,000
Owned
Firearms
Earth City, Missouri
35,000
Leased
Castings
Each firearms facility contains enclosed ranges for testing firearms. The lease of the Prescott
facility provides for rental payments which are approximately equivalent to estimated rates for real
property taxes.
19
The Company has other facilities that were not used in its manufacturing operations in 2024:
Approximate
Aggregate
Usable
Square Feet
Status
Segment
Southport, Connecticut
25,000
Owned
Corporate
Newport, New Hampshire
(Dorr Woolen Building)
45,000
Owned
Firearms
Enfield, Connecticut
10,000
Leased
Firearms
Mayodan, North Carolina
225,000
Owned
Firearms
There are no mortgages or any other major encumbrance on any of the real estate owned by the
Company.
The Company’s principal executive offices are located in Southport, Connecticut.
ITEM 3—LEGAL PROCEEDINGS
The nature of the legal proceedings against the Company is discussed at Note 20 to the financial
statements, which are included in this Form 10-K.
The Company has reported all cases instituted against it through September 28, 2024, and the
results of those cases, where terminated, to the SEC on its previous Form 10-Q and 10-K reports,
to which reference is hereby made.
There were no lawsuits formally instituted against the Company during the three months ending
December 31, 2024.
ITEM 4—MINE SAFETY DISCLOSURES – NOT APPLICABLE
20
PART II
ITEM 5—MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
The Company’s common stock is traded on the New York Stock Exchange under the symbol
“RGR.” At February 5, 2025, the Company had 1,790 stockholders of record.
Issuer Repurchase of Equity Securities
In 2022, 2023 and 2024 the Company repurchased shares of its common stock. Details of the
purchases in 2022, 2023 and 2024 follow:
Period
Total
Number of
Shares
Purchased
Average
Price Paid
per Share
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Program
Maximum
Dollar
Value of
Shares that
May Yet Be
Purchased
Under the
Program
Third Quarter 2022
July 3 to July 30
July 31 to August 27
August 28 to October 1
-
-
2,136
-
-
$49.97
-
-
2,136
Fourth Quarter 2022
October 2 to October 29
October 30 to November 26
November 27 to December 31
-
2,304
-
-
$49.77
-
-
2,304
-
Fourth Quarter 2023
October 1 to October 28
October 29 to November 25
November 26 to December 31
-
179,341
84,721
-
$45.20
$43.67
-
179,341
84,721
21
First Quarter 2024
January 1 to January 27
January 28 to February 24
February 25 to March 30
7,317
20,307
47,400
$43.42
$42.93
$42.79
7,317
20,307
47,400
Second Quarter 2024
March 31 to April 27
April 28 to May 25
May 26 to June 29
-
28,924
373,969
-
$42.92
$42.27
-
28,924
373,969
Third Quarter 2024
June 30 to July 27
July 28 to August 24
August 25 to September 28
156,517
-
64,325
$41.27
-
$40.66
156,517
-
64,325
Fourth Quarter 2024
September 29 to October 26
October 27 to November 23
November 23 to December 31
11,340
52,129
72,832
$40.50
$39.50
$34.81
11,340
52,129
72,832
Total
1,103,562
$42.07
1,103,562 $40,290,000
All of these purchases were made with cash held by the Company and no debt was incurred.
At December 31, 2024 approximately $40.3 million remained authorized for share repurchases.
22
Comparison of Five-Year Cumulative Total Return*
Sturm, Ruger & Co., Inc., Standard & Poor’s 500, Dow Jones US Recreational Products
TSM Index, and Russell 2000 Index
(Performance Results Through 12/31/24)
2019
2020
2021
2022
2023
2024
Sturm, Ruger & Company, Inc.
100.00
150.16
164.09
138.57
127.41
100.76
Standard & Poors 500
100.00
118.40
152.39
124.79
157.59
197.02
Russell 2000 Index
100.00
119.96
137.74
109.59
128.14
142.93
Dow Jones US Recreational Products TSM
100.00
134.75
176.32
115.79
142.58
108.76
For the year ended December 31, 2024, the Company has provided the five year cumulative total
return results for the Dow Jones US Recreational Products Index, a widely-published index
tracking companies that provide recreational products.
ITEM 6—[RESERVED]
100.00
150.16
164.09
138.57
127.41
100.76
118.40
152.39
124.79
157.59
197.02
119.96
137.74
109.59
128.14
142.93
134.75
176.32
115.79
142.58
108.76
$0
$50
$100
$150
$200
$250
2019
2020
2021
2022
2023
2024
Sturm, Ruger & Company, Inc.
S&P 500
Russell 2000
Dow Jones US Recreational Products TSM
*Assumes $100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
23
ITEM 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Company Overview
Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design,
manufacture, and sale of firearms to domestic customers. Approximately 99% of sales are from
firearms. Export sales represent approximately 5% of total sales. 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 to the commercial sporting market.
The Company also manufactures investment castings made from steel alloys and metal injection
molding (“MIM”) parts for internal use in its firearms and for sale to unaffiliated, third-party
customers. Less than 1% of sales are from the castings segment.
Results of Operations - 2024
Product Demand
The estimated sell-through of the Company’s products from the independent distributors to
retailers in 2024 increased 5% from 2023. In 2024, adjusted NICS decreased 4% from 2023. The
increase in the sell-through of the Company’s products despite the decrease in adjusted NICS
background checks may be attributable to new product introductions, like the Ruger American
Rifle Generation II bolt-action rifles, the Marlin lever-action rifles, and the RXM pistol, which
helped offset aggressive promotions, discounts, rebates, and the extension of payment terms
offered by the Company’s competitors.
Estimated sell-through from distributors to retailers and total adjusted NICS background checks:
2024
2023
2022
Estimated Units Sold from Distributors to
Retailers (1)
1,471,300
1,406,600
1,506,800
Total Adjusted NICS Background Checks (2)
15,239,000
15,848,000
16,425,000
(1)
The estimates for each period were calculated by taking the beginning inventory at
the distributors, plus shipments from the Company to distributors during the period,
less the ending inventory at distributors. These estimates are only a proxy for actual
market demand as they:
Rely on data provided by independent distributors that are not verified by
the Company,
Do not consider potential timing issues within the distribution channel,
including goods-in-transit, and
Do not consider fluctuations in inventory at retail.
24
(2)
NICS background checks are performed when the ownership of most firearms,
either new or used, is transferred by a Federal Firearms Licensee. NICS
background checks are also performed for permit applications, permit renewals,
and other administrative reasons.
The adjusted NICS data presented above was derived by the NSSF by subtracting
NICS checks that are not directly related to the sale of a firearm, including checks
used for concealed carry (“CCW”) permit application checks as well as checks on
active CCW permit databases.
Adjusted NICS data can be impacted by changes in state laws and regulations and
any directives and interpretations issued by governmental agencies.
Orders Received and Ending Backlog
The Company uses the estimated unit sell-through of its products from the independent distributors
to retailers, along with inventory levels at the independent distributors and at the Company, as the
key metrics for planning production levels.
The units ordered, value of orders received and ending backlog, net of Federal Excise Tax, for
the trailing three years are as follows (dollars in millions, except average sales price):
2024
2023
2022
Orders Received
$533.3
$433.8
$451.2
Average Sales Price of Orders Received
$377
$374
$416
Ending Backlog
$252.9
$229.0
$314.4
Average Sales Price of Ending Backlog
$568
$522
$486
Production
The Company reviews the estimated sell-through from the independent distributors to retailers, as
well as inventory levels at the independent distributors and at the Company, to plan production
levels and manage inventories. These reviews resulted in a decrease in total unit production of 1%
in 2024 compared to 2023.
25
Annual Summary Unit Data
Firearms unit data for orders, production, and shipments follows:
2024
2023
2022
Units Ordered
1,414,300
1,159,000
1,083,800
Units Produced
1,379,500
1,398,200
1,733,200
Units Shipped
1,407,800
1,367,500
1,641,000
Average Sales Price
$377
$395
$362
Units – Backlog
445,300
438,800
647,300
Inventories
The Company’s finished goods inventory decreased by 28,300 units during 2024, while distributor
inventories of the Company’s products decreased by 63,500 units during the same period.
Inventory data follows:
2024
2023
2022
Units – Company Inventory
115,200
143,500
112,800
Units – Distributor Inventory (3)
195,800
259,300
298,400
Total inventory (4)
311,000
402,800
411,200
(3)
Distributor ending inventory as provided by the independent distributors of the
Company’s products. These numbers do not include goods-in-transit inventory that
has been shipped from the Company but not yet received by the distributors.
(4)
This total does not include inventory at retailers. The Company does not have
access to data on retailer inventories.
26
Year ended December 31, 2024, as compared to year ended December 31, 2023:
Net Sales, Cost of Products Sold, and Gross Profit
Net sales, cost of products sold, and gross profit data for the year ended (dollars in
millions):
December 31,
2024
December 31,
2023
Change
% Change
Net firearms sales
$532.6
$540.7
$(8.1)
(1.5)%
Net casting sales
3.0
3.0
0.0
0.5%
Total net sales
535.6
543.7
(8.1)
(1.5)%
Cost of products sold
421.2
410.1
11.1
2.7%
Gross profit
$114.4
$133.6
$ (19.2)
(14.4)%
Gross margin
21.4%
24.6%
(3.2)%
(13.0)%
Firearms sales decreased 2% and unit shipments increased 3%, respectively, in 2024. New
products represented $159.3 million or 32% of firearms sales in 2024, an increase from $119.0
million or 23% of firearms sales in 2023. New product sales include only major new products that
were introduced in the past two years. In 2024, new products included the RXM pistol, American
Centerfire Rifle Generation II, Marlin 1894 lever-action rifles, Security-380 pistol, Super
Wrangler revolver, LC Carbine, and the Small-Frame Autoloading Rifle and the Marlin 1895
Marlin lever-action rifles, which were only included for a portion of the year.
The decreased gross profit for the year ended December 31, 2024 is attributable to the decrease in
sales, unfavorable deleveraging of fixed costs resulting from decreased production, and a product
mix shift toward products with relatively lower margins that remain in stronger demand.
The decrease in gross margin for the year ended December 31, 2024 is attributable to the
aforementioned factors, partially offset by increased pricing.
27
Selling, General and Administrative
Selling and general and administrative expenses data for the year ended (dollars in millions):
December
31, 2024
December
31, 2023
Change
% Change
Selling expenses
$38.8
$38.8
$ -
(0.1%)
General and administrative expenses
44.0
42.7
1.3
3.0%
Total operating expenses
$82.8
$81.5
$1.3
1.5%
Selling expenses for the year ended December 31, 2024 were substantially unchanged from 2023,
as increased spending on advertising was offset by modest reductions in several selling and
marketing initiatives.
The increase in general, and administrative expenses for the year ended December 31, 2024 was
primarily attributable to increased professional service costs and accrued severances of $1.5
million taken in the first quarter of 2024 related to a reduction in force involving approximately
80 employees. These increases were partially offset by a reduction in incentive compensation
expenses. The aforementioned accrued severances were settled in cash and consist of one-time
termination charges arising from severance obligations and other customary employee benefit
payments in connection with a reduction in force.
Operating Income
Operating income was $31.6 million or 5.9% of sales in 2024. This is a decrease of $20.4 million
from 2023 operating income of $52.1 million or 9.6% of sales.
Other Operating Income (Expense), Net
Other income data for the year ended (dollars in millions):
December
31, 2024
December
31, 2023
Change
% Change
Royalty income
$ 0.8
$ 0.6
$ 0.2
30.2%
Interest income
4.9
5.5
(0.6)
(10.6%)
Interest expense
(0.1)
(0.2)
0.1
(50.2%)
Other income, net
0.5
0.8
(0.3)
(41.5%)
Other income
$ 6.1
$ 6.7
$(0.6)
(10.0%)
28
The decrease in other income for the year ended December 31, 2024 was primarily the result of
decreases in interest income due to decreased interest rates earned on short-term investments and
other income, partially offset by increased royalty.
Income Taxes and Net Income
The effective income tax rate was 19.1% in 2024 and 18.0% in 2023. The Company's 2024 and
2023 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.
As a result of the foregoing factors, consolidated net income was $30.6 million in 2024. This
represents a decrease of $17.6 million from 2023 consolidated net income of $48.2 million.
29
Non-GAAP Financial Measure
In an effort to provide investors with additional information regarding its 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 measures may
not be comparable to similarly titled measures being disclosed by other companies. In addition,
the Company believes that the non-GAAP financial measures 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
Company believes that this reporting provides better transparency and comparability to its
operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate
its financial performance.
Non-GAAP Reconciliation – EBITDA
EBITDA
(Unaudited, dollars in thousands)
Year ended December 31,
2024
2023
Net income
$ 30,563
$ 48,215
Income tax expense
7,212
10,609
Depreciation and amortization expense
22,063
22,383
Interest expense
102
205
Interest income
(4,885)
(5,465)
EBITDA
$55,055
$75,947
EBITDA margin
10.3%
14.0%
Net income margin
5.7%
8.9%
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.
30
Quarterly Data
To supplement the summary annual unit data and discussion above, the same data for the last eight
quarters follows:
2024
Q4
Q3
Q2
Q1
Units Ordered
374,300
316,900
250,500
472,600
Units Produced
364,300
330,300
370,400
314,500
Units Shipped
398,700
327,400
336,300
345,400
Estimated Units Sold from
Distributors to Retailers
410,500
336,300
327,800
396,700
Total Adjusted NICS Background
Checks
4,460,000
3,432,000
3,364,000
3,983,000
Average Unit Sales Price
$364
$371
$386
$394
Units – Backlog
445,300
469,700
480,200
566,000
Units – Company Inventory
115,200
149,600
146,700
112,600
Units – Distributor Inventory (5)
195,800
207,600
216,500
208,000
2023
Q4
Q3
Q2
Q1
Units Ordered
316,600
176,300
258,100
408,000
Units Produced
305,200
324,500
387,400
381,000
Units Shipped
337,800
308,400
336,400
384,900
Estimated Units Sold from
Distributors to Retailers
384,700
307,400
323,000
391,500
Total Adjusted NICS Background
Checks
4,742,000
3,284,000
3,654,000
4,168,000
Average Unit Sales Price
$383
$390
$422
$387
Units – Backlog
438,800
460,000
592,100
670,400
Units – Company Inventory
143,500
176,100
160,000
108,900
Units – Distributor Inventory (5)
259,300
306,200
305,200
291,800
31
(5)
Distributor ending inventory as provided by the independent distributors of the
Company’s products.
(in millions except average sales price, net of Federal Excise Tax)
2024
Q4
Q3
Q2
Q1
Orders Received
$126.3
$109.4
$99.5
$198.2
Average Sales Price of Orders Received
$337
$345
$397
$419
Ending Backlog
$252.9
$268.7
$272.2
$296.2
Average Sales Price of Ending Backlog
$568
$572
$567
$523
2023
Q4
Q3
Q2
Q1
Orders Received
$116.7
$58.8
$102.1
$156.2
Average Sales Price of Orders Received
$369
$334
$396
$383
Ending Backlog
$229.0
$234.8
$293.7
$327.3
Average Sales Price of Ending Backlog
$522
$510
$496
$488
Fourth Quarter Net Sales and Gross Profit Analysis
Net sales, cost of products sold, and gross profit data for the three months ended (dollars in
millions):
December 31,
2024
December 31,
2023
Change
% Change
Net firearms sales
$145.3
$129.6
$15.7
12.1%
Net casting sales
0.5
1.0
(0.5)
(47.6)%
Total net sales
145.8
130.6
15.2
11.6%
Cost of products sold
112.6
98.3
14.3
14.5%
Gross profit
$ 33.2
$ 32.3
$ 0.9
2.9%
Gross margin
22.8%
24.7%
(1.9)%
(7.7)%
32
Results of Operations - 2023
Year ended December 31, 2023, as compared to year ended December 31, 2022
Annual Summary Unit Data
Firearms unit data for orders, production, shipments and ending inventory, and castings setups (a
measure of foundry production) are as follows:
2023
2022
2021
Units Ordered
1,159,000
1,083,800
1,835,500
Units Produced
1,398,200
1,733,200
2,154,600
Units Shipped
1,367,500
1,641,000
2,142,900
Average Sales Price
$395
$362
$340
Units – Backlog
438,800
647,300
1,204,500
Units – Company Inventory
143,500
112,800
20,600
Units – Distributor Inventory (1)
259,300
298,400
164,200
Castings Setups
71,415
55,971
68,469
Orders Received and Ending Backlog
(in millions except average sales price, net of Federal Excise Tax):
2023
2022
2021
Orders Received
$433.8
$451.2
$606.5
Average Sales Price of Orders Received (2)
$374
$416
$330
Ending Backlog
$229.0
$314.4
$429.7
Average Sales Price of Ending Backlog (2)
$522
$486
$357
(1)
Distributor ending inventory as provided by the independent distributors of the
Company’s products.
(2) Average sales price for orders received and ending backlog is net of Federal Excise
Tax of 10% for handguns and 11% for long guns.
33
Product Demand
The estimated sell-through of the Company’s products from the independent distributors to
retailers in 2023 decreased 7% from 2022. For the same period, adjusted NICS decreased 4%.
The greater reduction in the sell-through of the Company’s products relative to adjusted NICS
background checks may be attributable to aggressive promotions, discounts, rebates, and the
extension of payment terms offered by the Company’s competitors.
Estimated sell-through from distributors to retailers and total adjusted NICS background checks:
2023
2022
2021
Estimated Units Sold from Distributors to
Retailers (1)
1,406,600
1,506,800
2,017,800
Total Adjusted NICS Background Checks (2)
15,848,000
16,425,000
18,515,000
(1)
The estimates for each period were calculated by taking the beginning inventory at
the distributors, plus shipments from the Company to distributors during the period,
less the ending inventory at distributors. These estimates are only a proxy for actual
market demand as they:
Rely on data provided by independent distributors that are not verified by
the Company,
Do not consider potential timing issues within the distribution channel,
including goods-in-transit, and
Do not consider fluctuations in inventory at retail.
(2)
NICS background checks are performed when the ownership of most firearms,
either new or used, is transferred by a Federal Firearms Licensee. NICS
background checks are also performed for permit applications, permit renewals,
and other administrative reasons.
The adjusted NICS data presented above was derived by the NSSF by subtracting
NICS checks that are not directly related to the sale of a firearm, including checks
used for concealed carry (“CCW”) permit application checks as well as checks on
active CCW permit databases.
Adjusted NICS data can be impacted by changes in state laws and regulations and
any directives and interpretations issued by governmental agencies.
Production
The Company reviews the estimated sell-through from the independent distributors to retailers, as
well as inventory levels at the independent distributors and at the Company, to plan production
34
levels and manage inventories. These reviews resulted in a decrease in total unit production of
19% in 2023 compared to 2022.
Inventories
The Company’s finished goods inventory increased by 30,700 units during 2023.
Distributor inventories of the Company’s products decreased by 39,100 units during 2023, and
approximate a reasonable level to support rapid fulfillment of retailer demand for most product
families.
Inventory data follows:
2023
2022
2021
Units – Company Inventory
143,500
112,800
20,600
Units – Distributor Inventory (3)
259,300
298,400
164,200
Total inventory (4)
402,800
411,200
184,800
(3)
Distributor ending inventory as provided by the independent distributors of the
Company’s products. These numbers do not include goods-in-transit inventory that
has been shipped from the Company but not yet received by the distributors.
(4)
This total does not include inventory at retailers. The Company does not have
access to data on retailer inventories.
35
Quarterly Data
To supplement the summary annual unit data and discussion above, the same data for the last eight
quarters follows:
2023
Q4
Q3
Q2
Q1
Units Ordered
316,600
176,300
258,100
408,000
Units Produced
305,200
324,500
387,500
381,000
Units Shipped
337,800
308,400
336,400
384,900
Estimated Units Sold from
Distributors to Retailers
384,700
307,400
323,000
391,500
Total Adjusted NICS Background
Checks
4,742,000
3,284,000
3,654,000
4,168,000
Average Unit Sales Price
$383
$390
$422
$387
Units – Backlog
438,800
460,000
592,100
670,400
Units – Company Inventory
143,500
176,100
160,000
108,900
Units – Distributor Inventory (5)
259,300
306,200
305,200
291,800
2022
Q4
Q3
Q2
Q1
Units Ordered
156,000
295,600
250,600
381,600
Units Produced
397,300
382,800
431,800
521,300
Units Shipped
393,100
373,800
382,600
491,500
Estimated Units Sold from
Distributors to Retailers
397,800
343,500
354,300
411,200
Total Adjusted NICS Background
Checks
4,531,000
3,764,000
3,917,000
4,213,000
Average Unit Sales Price
$378
$371
$366
$338
Units – Backlog
647,300
884,400
962,600
1,094,600
Units – Company Inventory
112,800
108,600
99,700
50,400
Units – Distributor Inventory (5)
298,400
303,100
272,800
244,600
36
(5)
Distributor ending inventory as provided by the independent distributors of the
Company’s products.
(in millions except average sales price, net of Federal Excise Tax)
2023
Q4
Q3
Q2
Q1
Orders Received
$116.7
$58.8
$102.1
$156.2
Average Sales Price of Orders Received
$369
$334
$396
$383
Ending Backlog
$229.0
$234.8
$293.7
$327.3
Average Sales Price of Ending Backlog
$522
$510
$496
$488
2022
Q4
Q3
Q2
Q1
Orders Received
$81.0
$124.3
$98.9
$147.0
Average Sales Price of Orders Received
$519
$421
$395
$385
Ending Backlog
$314.4
$377.6
$389.6
$420.5
Average Sales Price of Ending Backlog
$486
$427
$405
$384
Net Sales, Cost of Products Sold, and Gross Profit
Net sales, cost of products sold, and gross profit data for the year ended (dollars in
millions):
December 31,
2023
December 31,
2022
Change
% Change
Net firearms sales
$540.7
$593.3
$(52.6)
(8.9)%
Net casting sales
3.0
2.5
0.5
18.3%
Total net sales
543.7
595.8
(52.1)
(8.7)%
Cost of products sold
410.1
415.7
(5.6)
(1.3)%
Gross profit
$133.6
$180.1
$ (46.5)
(25.8)%
Gross margin
24.6%
30.2%
(5.6)%
(18.5)%
37
Firearms sales and unit shipments decreased 9% and 17%, respectively, in 2023. New products
represented $119.0 million or 23% of firearms sales in 2023, an increase from $76.6 million or
14% of firearms sales in 2022. New product sales include only major new products that were
introduced in the past two years. In 2023, new products included the MAX-9 pistol (during the
first quarter only), Security-380 pistol, Super Wrangler revolver, LCP MAX pistol, Marlin lever-
action rifles, LC Carbine, Small-Frame Autoloading Rifle, and American Centerfire Rifle
Generation II.
The decreased gross profit for the year ended December 31, 2023 is attributable to the significant
decrease in sales, as well as unfavorable deleveraging of fixed costs resulting from decreased
production, a product mix shift toward products with relatively lower margins that remain in
stronger demand, and increased promotional costs.
The decrease in gross margin for the year ended December 31, 2023 is attributable to the
aforementioned factors, partially offset by increased pricing.
Selling, General and Administrative
Selling and general and administrative expenses data for the year ended (dollars in millions):
December
31, 2023
December
31, 2022
Change
% Change
Selling expenses
$38.8
$36.1
$2.7
7.4%
General and administrative expenses
42.7
40.5
2.2
5.4%
Total operating expenses
$81.5
$76.6
$4.9
6.4%
The increase in selling expenses for the year ended December 31, 2023 was primarily attributable
to increased trade show costs, travel expenditures, and advertising, partially offset by decreased
sales volume.
The increase in general, and administrative expenses for the year ended December 31, 2023 was
primarily attributable to increased professional service costs.
Operating Income
Operating income was $52.1 million or 9.6% of sales in 2023. This is a decrease of $51.4 million
from 2022 operating income of $103.5 million or 17.3% of sales.
38
Other Operating Income (Expense), Net
Other income data for the year ended (dollars in millions):
December
31, 2023
December
31, 2022
Change
% Change
Royalty income
$ 0.6
$ 0.8
(0.2)
(21.4%)
Interest income
5.5
2.6
2.9
114.1%
Interest expense
(0.2)
(0.3)
0.1
(19.9%)
Other income, net
0.8
1.7
(0.9)
(51.4%)
Other income
$ 6.7
$ 4.8
$ 1.9
39.7%
The increase in other income for the year ended December 31, 2023 was the result of increases in
interest income due to increased interest rates earned on short-term investments, partially offset by
decreased royalty and other income.
Income Taxes and Net Income
The effective income tax rate was 18.0% in 2023 and 18.4% in 2022. The Company's 2023 and
2022 effective tax rate differs 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 impact related to research and development tax credits on the
effective tax rate is expected to decline in future years.
As a result of the foregoing factors, consolidated net income was $48.2 million in 2023. This
represents a decrease of $40.1 million from 2022 consolidated net income of $88.3 million.
Non-GAAP Financial Measure
In an effort to provide investors with additional information regarding its 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 measures may
not be comparable to similarly titled measures being disclosed by other companies. In addition,
the Company believes that the non-GAAP financial measures 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
Company believes that this reporting provides better transparency and comparability to its
operating results. The Company uses both GAAP and non-GAAP financial measures to evaluate
its financial performance.
39
Non-GAAP Reconciliation – EBITDA
EBITDA
(Unaudited, dollars in thousands)
Year ended December 31,
2023
2022
Net income
$ 48,215
$ 88,332
Income tax expense
10,609
19,947
Depreciation and amortization expense
22,383
25,789
Interest expense
205
256
Interest income
(5,465)
(2,552)
EBITDA
$75,947
$131,772
EBITDA margin
14.0%
22.1%
Net income margin
8.9%
14.8%
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.
40
Financial Condition
Liquidity
At December 31, 2024, the Company had cash and cash equivalents of $10.0 million and $95.5
million in short term investments. The Company’s pre-LIFO working capital of $264.1 million,
less the LIFO reserve of $66.4 million, resulted in working capital of $197.7 million and a current
ratio of 4.2 to 1. The Company also has access to a $40 million unsecured revolving line of credit
that is currently undrawn.
Capital Resources
The Company believes that its cash flow from operations, current cash position, and access to
capital markets will continue to be sufficient to meet its anticipated cash requirements and
contractual obligations, which includes funding the Company’s capital expenditures, acquisitions,
dividend payments, and share repurchases.
Operations
Cash provided by operating activities was $55.5 million, $33.9 million, and $77.2 million in 2024,
2023, and 2022, respectively. The increase in cash provided in 2024 compared to 2023 is primarily
attributable to the decrease in inventory in 2024 compared to the increase in 2023, and the
reduction in prepaid and other assets compared to increases in those accounts in 2023, partially
offset by reduced income in 2024.
The decrease in cash provided in 2023 compared to 2022 is primarily attributable to the decrease
in net income in 2023.
Third parties supply the Company with various raw materials for its firearms and castings, such as
fabricated steel components, walnut, birch, beech, maple and laminated lumber for rifle stocks,
wax, ceramic material, metal alloys, various synthetic products and other component parts. There
is a limited supply of these materials in the marketplace at any given time, which can cause the
purchase prices to vary based upon numerous market factors. If market conditions result in a
significant prolonged inflation of certain prices or if adequate quantities of raw materials cannot
be obtained, the Company’s manufacturing processes could be interrupted and the Company’s
financial condition or results of operations could be materially adversely affected.
Investing and Financing
Capital expenditures were $20.8 million, $15.8 million, and $27.7 million in 2024, 2023, and 2022,
respectively. In 2025, the Company expects capital expenditures to approximate $20 million,
much of which will relate to tooling and fixtures for new product introductions and to upgrade and
modernize manufacturing equipment. Due to market conditions and business circumstances,
actual capital expenditures could vary significantly from the budgeted amount. The Company
finances, and intends to continue to finance, all of these activities with funds provided by
operations and current cash.
41
Included in capital expenditures amount noted above, on October 3, 2022 the Company purchased
a 225,000 square foot facility, which it had previously been leasing, in Mayodan, North Carolina
for $8.3 million for use in its manufacturing and warehousing operations.
As of December 31, 2024, the Company had $62.5 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 December 31, 2024, the Company’s investment in this money market fund
totaled $33.0 million.
In 2024, the Company repurchased 835,060 shares of its common stock for $34.4 million in the
open market. The average price per share purchased was $41.19. These purchases were funded
with cash on hand.
In 2023, the Company repurchased 264,062 shares of its common stock for $11.8 million in the
open market. The average price per share purchased was $44.71. These purchases were funded
with cash on hand.
In 2022, the Company repurchased 4,440 shares of its common stock for $0.2 million in the open
market. The average price per share purchased was $49.87. These purchases were funded with
cash on hand.
At December 31, 2024, approximately $40.3 million remained authorized for future share
repurchases.
On January 5, 2023, the Company paid a $5.00 per share special dividend to shareholders of record
on December 15, 2022.
Including the $5.00 per share special dividend paid on January 5, 2023, the Company paid
dividends totaling $11.8 million, $110.8 million, and $42.7 million in 2024, 2023, and 2022,
respectively. 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 February 14, 2025, the Company’s Board of Directors authorized a dividend of 24¢ per share
to shareholders of record on March 14, 2025. The payment of future dividends depends on many
factors, including internal estimates of future performance, then-current cash, and the Company’s
need for funds.
The Company provides supplemental discretionary contributions to substantially all employees’
individual 401(k) accounts.
Based on its unencumbered assets, the Company believes it has the ability to raise cash through
issuance of short-term or long-term debt.
42
Contractual Obligations
At December 31, 2024, the Company had approximately $37.5 million in agreements to purchase
goods or services that are enforceable and legally binding on the Company, all of which are
expected to be settled in less than one year. Additionally, the Company has approximately $2.8
million in operating lease obligations, which will be payable through 2034. The Company expects
to fund all of these commitments with cash flows from operations and current cash.
Firearms Legislation and Litigation
See Item 1A - Risk Factors and Note 20 to the financial statements which are included in the
Annual Report on Form 10-K for a discussion of firearms legislation and litigation.
Other Operational Matters
In the normal course of its manufacturing operations, the Company is subject to occasional
governmental proceedings and orders pertaining to workplace safety, firearms serial number
tracking and control, waste disposal, air emissions and water discharges into the environment. The
Company believes that it is generally in compliance with applicable Bureau of Alcohol, Tobacco,
Firearms & Explosives, environmental, and safety regulations and the outcome of any proceedings
or orders will not have a material adverse effect on the financial position or results of operations
of the Company. If these regulations become more stringent in the future and we are not able to
comply with them, such noncompliance could have a material adverse impact on the Company.
Currently, there are 14 domestic distributors. Additionally, the Company has 44 and 26
distributors servicing the export and law enforcement markets, respectively.
The Company self-insures a significant amount of its product liability, workers’ compensation,
medical, and other insurance. It also carries significant deductible amounts on various insurance
policies.
The Company expects to realize its deferred tax assets through tax deductions against future
taxable income.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with accounting principles generally
accepted in the United States requires management to make assumptions and estimates that affect
the reported amounts of assets and liabilities as of the balance sheet date and net sales and expenses
recognized and incurred during the reporting period then ended. The Company bases estimates on
prior experience, facts and circumstances, and other assumptions, including those reviewed with
actuarial consultants and independent counsel, when applicable, that are believed to be reasonable.
However, actual results may differ from these estimates.
The Company believes that the assumptions and judgments involved in the accounting estimates
below have the greatest potential impact on its financial statements, so the Company believes these
43
to be its critical accounting estimates. The methodologies applied for determining the estimates
related to the below critical accounting estimates have not changed from the prior year.
Product Liability Accrual
The Company believes the determination of its product liability accrual is a critical accounting
policy. The Company’s management reviews every lawsuit and claim and is in contact with
independent and corporate counsel on an ongoing basis. The provision for product liability claims
is based upon many factors, which vary for each case. These factors include the type of claim,
nature and extent of injuries, historical settlement ranges, jurisdiction where filed, and advice of
counsel. An accrual is established for each lawsuit and claim, when appropriate, based on the
nature of each such lawsuit or claim.
Amounts are charged to product liability expense in the period in which the Company becomes
aware that a claim or, in some instances a threat of a claim, has been made when potential losses
or costs of defense are probable and can be reasonably estimated. Such amounts are determined
based on the Company’s experience in defending similar claims. Occasionally, charges are made
for claims made in prior periods because the cumulative actual costs incurred for that claim, or
reasonably expected to be incurred in the future, exceed amounts already provided with respect to
such claims. Likewise, credits may be taken if cumulative actual costs incurred for that claim, or
reasonably expected to be incurred in the future, are less than amounts previously provided.
While it is not possible to forecast the outcome of litigation or the timing of related costs, in the
opinion of management, after consultation with independent and corporate counsel, there is a
remote likelihood that litigation, including punitive damage claims, will have a material adverse
effect on the financial position of the Company, but such litigation may have a material impact on
the Company’s financial results and cash flows for a particular period.
Inventory Valuation and Reserves
The Company believes the valuation of its inventory and the related excess and obsolescence
reserve is also a critical accounting policy. Inventories are carried at the lower of cost, principally
determined by the last-in, first-out (LIFO) method, or market. An actual valuation of inventory
under the LIFO method is made at the end of each year based on the inventory levels and the
Company’s estimates of the prevailing costs of the many components of inventory existing at that
time.
The Company determines its excess and obsolescence reserve by projecting the year in which
inventory will be consumed into a finished product. Given ever-changing market conditions,
customer preferences and the anticipated introduction of new products, projecting the future usage
of inventory is subjective. As such, it does not seem prudent to carry inventory at full cost beyond
what the Company projects to be needed during the next 36 months.
44
Recent Accounting Pronouncements
In November of 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):
Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires
enhanced reportable segment disclosures, primarily related to significant segment expenses which
are regularly provided to the chief operating decision maker. The guidance is effective for fiscal
years beginning after December 15, 2023 and interim periods within fiscal years beginning after
December 15, 2024. The Company adopted ASU 2023-07, beginning with the current filing. The
adoption of the new guidance required additional disclosures, but did not have a material impact
to the Company. Refer to Note 17, Operating Segment Information, for the updated presentation
In December of 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements
to Income Tax Disclosures.” The updated accounting guidance requires expanded income tax
disclosures, including the disaggregation of existing disclosures related to the effective tax rate
reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after
December 15, 2024. Prospective application is required, with retrospective application permitted.
The Company is currently evaluating the effect the updated guidance will have on its financial
statement disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting
Comprehensive Income—Expense Disaggregation Disclosures,” which requires additional
disclosure of certain costs and expenses within the notes to the financial statements. The updated
standard is effective for annual reporting periods beginning after December 15, 2026 and interim
reporting periods within annual reporting periods beginning after December 15, 2027. The
requirements will be applied prospectively with the option for retrospective application. Early
adoption is permitted. The Company is currently evaluating the effect the updated guidance will
have on its financial statement disclosures.
Forward-Looking Statements and Projections
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. Words such as “expect,” “believe,”
“anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other words and terms of similar
meaning, typically identify such forward-looking statements. 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.
45
ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
The Company is exposed to changing interest rates on its investments, which consist primarily of
United States Treasury instruments with short-term (less than one year) maturities and cash. The
interest rate market risk implicit in the Company's investments at any given time is low, as the
investments mature within short periods and the Company does not have significant exposure to
changing interest rates on invested cash.
The Company has not undertaken any actions to cover interest rate market risk and is not a party
to any interest rate market risk management activities.
A hypothetical 100 basis point change in market interest rates over the next year would not
materially impact the Company’s earnings or cash flows. A hypothetical 100 basis point change
in market interest rates would not have a material effect on the fair value of the Company’s
investments.
46
ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Registered Public Accounting Firm
(PCAOB ID 49)
47
Consolidated Balance Sheets at December 31, 2024 and 2023
50
Consolidated Statements of Income and Comprehensive Income
for the years ended December 31, 2024, 2023 and 2022
52
Consolidated Statements of Stockholders’ Equity for the years
ended December 31, 2024, 2023 and 2022
53
Consolidated Statements of Cash Flows for the years ended
December 31, 2024, 2023 and 2022
54
Notes to Consolidated Financial Statements
55
47
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Sturm, Ruger & Company, Inc. and Subsidiaries
Opinion on the Internal Control Over Financial Reporting
We have audited Sturm, Ruger & Company, Inc. and Subsidiaries' (the Company) internal control over financial reporting
as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission in 2013.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, and the related
consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for each of the three
years in the period ended December 31, 2024, and our report dated February 19, 2025 expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/RSM US LLP
Stamford, Connecticut
February 19, 2025
48
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Sturm, Ruger & Company, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Sturm, Ruger & Company, Inc. and its
subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of
income and comprehensive income, stockholders' equity and cash flows for each of the three years in the
period ended December 31, 2024, and the related notes to the consolidated financial statements and
schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the
results of its operations and its cash flows for each of the three years in the period ended December 31,
2024, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the Company's internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated
February 19, 2025 expressed an unqualified opinion on the effectiveness of the Company's internal
control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
financial statements that was communicated or required to be communicated to the audit committee and
that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
49
Last-In, First-Out Inventory Reserve
As described in Notes 1 and 4 to the financial statements, substantially all of the Company’s inventories
are valued at the lower of cost, which is principally determined by the last-in, first-out (LIFO) method, or
net realizable value, and the Company’s consolidated net inventories balance of $76.5 million as of
December 31, 2024, included a LIFO inventory reserve of $66.4 million. The Company records its net
inventories under the LIFO method at the end of each year based on the inventory levels at the
measurement date and the prevailing inventory costs existing at that time, which are estimated using a
complex manual calculation.
We identified the LIFO inventory reserve as a critical audit matter because of the complexities of the
manual calculations performed by management to estimate the prevailing inventory costs, which includes
calculations to estimate current year price level changes through the development of a prior year and a
current year cumulative price index. Auditing management’s estimate of the LIFO inventory reserve was
complex and required a high degree of auditor judgement and increased audit effort due to the
complexities of management’s manual calculations.
Our audit procedures related to the Company’s LIFO inventory reserve included the following, among
others:
We obtained an understanding of the relevant controls related to the LIFO inventory reserve and
tested such controls for design and operating effectiveness, including controls related to
management’s review of the calculations related to the estimate of the current year price level
changes, the calculation of the cumulative price indexes, and the estimate of the LIFO inventory
reserve.
We tested the completeness, accuracy, and relevance of the underlying data used in
management’s estimate of the current year price level changes, the calculation of cumulative
price index and the LIFO inventory reserve.
We tested the mathematical accuracy of the Company’s calculation to estimate the LIFO
inventory reserve.
We evaluated the appropriateness of management’s methodologies to develop the estimate of the
LIFO inventory reserve.
We evaluated the reasonableness of management’s estimate of the current year price level
changes by comparing management’s estimate to external market data.
/s/RSM US LLP
We have served as the Company’s auditor since 2005.
Stamford, Connecticut
February 19, 2025
50
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
December 31,
2024
2023
Assets
Current Assets
Cash and cash equivalents
$ 10,028
$ 15,174
Short-term investments
95,453
102,485
Trade receivables, net
67,145
59,864
Gross inventories
Less LIFO reserve
Less excess and obsolescence reserve
149,417
(66,398)
(6,533)
150,192
(64,262)
(6,120)
Net inventories
76,486
79,810
Prepaid expenses and other current assets
9,245
14,062
Total Current Assets
258,357
271,395
Property, plant and equipment
477,622
462,397
Less allowances for depreciation
(406,373)
(390,863)
Net property, plant and equipment
71,249
71,534
Deferred income taxes
16,681
11,976
Other assets
37,747
43,912
Total Assets
$ 384,034
$ 398,817
See accompanying notes to consolidated financial statements.
51
December 31,
2024
2023
Liabilities and Stockholders’ Equity
Current Liabilities
Trade accounts payable and accrued expenses
$ 35,750
$ 31,708
Contract liabilities with customers (Note 2)
-
149
Product liability
431
634
Employee compensation and benefits
18,824
24,660
Workers’ compensation
5,804
6,044
Total Current Liabilities
60,809
63,195
Lease liability (Note 7)
1,747
2,170
Employee compensation
1,835
1,685
Product liability accrual
61
46
Contingent liabilities (Note 20)
-
-
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
2024 – 24,467,983 issued,
16,790,824 outstanding
2023 – 24,437,020 issued,
17,458,620 outstanding
24,468
24,437
Additional paid-in capital
50,536
46,849
Retained earnings
436,609
418,058
Less: Treasury stock – at cost
2024 – 7,677,159 shares
2023 – 6,978,400 shares
(192,031)
(157,623)
Total Stockholders’ Equity
319,582
331,721
Total Liabilities and Stockholders’ Equity
$ 384,034
$ 398,817
See accompanying notes to consolidated financial statements.
52
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share data)
Year ended December 31,
2024
2023
2022
Net firearms sales
$532,608
$540,746
$593,289
Net castings sales
3,035
3,021
2,553
Total net sales
535,643
543,767
595,842
Cost of products sold
421,228
410,148
415,757
Gross profit
114,415
133,619
180,085
Operating Expenses (Income):
Selling
38,755
38,788
36,114
General and administrative
44,006
42,752
40,551
Other operating income, net
-
(5)
(36)
Total operating expenses
82,761
81,535
76,629
Operating income
31,654
52,084
103,456
Other income:
Royalty income
857
658
837
Interest income
4,885
5,465
2,552
Interest expense
(102)
(205)
(256)
Other income, net
481
822
1,690
Total other income, net
6,121
6,740
4,823
Income before income taxes
37,775
58,824
108,279
Income taxes
7,212
10,609
19,947
Net income and comprehensive income
$ 30,563
$ 48,215
$ 88,332
Basic Earnings Per Share
$1.79
$2.73
$5.00
Diluted Earnings Per Share
$1.77
$2.71
$4.96
Weighted average number of common shares outstanding
– Basic
17,088,205
17,676,955
17,648,850
Weighted average number of common shares outstanding
– Diluted
17,270,101
17,811,218
17,793,348
Cash Dividends Per Share
$0.69
$6.27
$2.42
See accompanying notes to consolidated financial statements.
53
Consolidated Statements of Stockholders’ Equity
(Dollars in thousands)
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Total
Balance at December 31, 2021
$24,306
$46,847
$438,098
$(145,590)
$363,661
Net income
88,332
88,332
Dividends paid
(42,718)
(42,718)
Stock-based compensation
1,671
1,671
Vesting of RSU’s
(3,371)
(3,371)
Common stock issued –
compensation plans
72
(72)
-
Unpaid dividends accrued
(90,615)
(90,615)
Repurchase of 4,440 shares of
common stock
(222)
(222)
Balance at December 31, 2022
24,378
45,075
393,097
(145,812)
316,738
Net income
48,215
48,215
Dividends paid
(22,446)
(22,446)
Stock-based compensation
3,989
3,989
Vesting of RSU’s
(2,156)
(2,156)
Common stock issued –
compensation plans
59
(59)
-
Unpaid dividends accrued
(808)
(808)
Repurchase of 264,062 shares of
common stock
(11,811)
(11,811)
Balance at December 31, 2023
24,437
46,849
418,058
(157,623)
331,721
Net income
30,563
30,563
Dividends paid
(11,829)
(11,829)
Stock-based compensation
4,342
4,342
Vesting of RSU’s
(624)
(624)
Common stock issued –
compensation plans
31
(31)
-
Unpaid dividends accrued
(183)
(183)
Repurchase of 835,060 shares of
common stock
(34,408)
(34,408)
Balance at December 31, 2024
$24,468
$50,536
$436,609
$(192,031)
$319,582
See accompanying notes to consolidated financial statements.
54
Consolidated Statements of Cash Flows
(In thousands)
Year ended December 31,
2024
2023
2022
Operating Activities
Net income
$ 30,563
$ 48,215
$ 88,332
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization
22,063
22,383
25,789
Stock-based compensation
4,342
3,989
1,671
Excess and obsolescence inventory reserve
413
1,308
501
Gain on sale of assets
-
(5)
(36)
Deferred income taxes
(4,705)
(5,867)
(5,573)
Changes in operating assets and liabilities:
Trade receivables
(7,281)
5,585
(8,413)
Inventories
2,911
(16,125)
(21,644)
Trade accounts payable and accrued expenses
3,789
(4,406)
(640)
Contract liability with customers
(149)
(882)
1,031
Employee compensation and benefits
(5,869)
(6,469)
(3,420)
Product liability
(188)
372
(584)
Prepaid expenses, other assets and other liabilities
9,615
(13,026)
(954)
Income taxes receivable/payable
-
(1,171)
1,171
Cash provided by operating activities
55,504
33,901
77,231
Investing Activities
Property, plant and equipment additions
(20,821)
(15,796)
(27,730)
Purchases of short-term investments
(138,885)
(192,627)
(365,480)
Proceeds from maturity of short-term investments
145,917
249,274
406,319
Net proceeds from sale of assets
-
5
100
Cash (used for) provided by investing activities
(13,789)
40,856
13,209
Financing Activities
Dividends paid
(11,829)
(110,789)
(42,718)
Repurchase of common stock
(34,408)
(11,811)
(222)
Payment of employee withholding tax related to share-
based compensation
(624)
(2,156)
(3,371)
Cash used for financing activities
(46,861)
(124,756)
(46,311)
(Decrease) increase in cash and cash equivalents
(5,146)
(49,999)
44,129
Cash and cash equivalents at beginning of year
15,174
65,173
21,044
Cash and cash equivalents at end of year
$ 10,028
$ 15,174
$ 65,173
See accompanying notes to consolidated financial statements.
55
Notes to Consolidated Financial Statements
(Dollars in thousands, except per share)
1.
Summary of Significant Accounting Policies
Organization
Sturm, Ruger & Company, Inc. (the “Company”) is principally engaged in the design,
manufacture, and sale of firearms to domestic customers. Approximately 99% of sales were from
firearms. Export sales represented approximately 5% of firearms sales. 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 to the commercial sporting market.
The Company manufactures investment castings made from steel alloys and metal injection
molding (“MIM”) parts for internal use in its firearms and utilizes available capacity to
manufacture and sell investment castings and MIM parts to unaffiliated, third-party customers.
Castings were less than 1% of the Company’s total sales for the year ended December 31, 2024.
Preparation of Financial Statements
The Company follows United States generally accepted accounting principles (“GAAP”). The
preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from these estimates.
The significant accounting policies described below, together with the notes that follow, are an
integral part of the consolidated financial statements.
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.
Revenue Recognition
The Company recognizes revenue in accordance with the provisions of Accounting Standards
Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), which became
effective January 1, 2018. Substantially all product sales are sold FOB (free on board) shipping
point. Customary payment terms are 2% 30 days, net 40 days. Generally, all performance
obligations are satisfied when product is shipped and the customer takes ownership and assumes
the risk of loss. 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 fulfillment of these no charge products
56
is the Company’s responsibility. 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 firearms. 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. The Company accounts
for cash sales discounts as a reduction in sales. Amounts billed to customers for shipping and
handling fees are included in net sales and costs incurred by the Company for the delivery of goods
are classified as selling expenses. Federal excise taxes are excluded from net sales.
Cash and Cash Equivalents
The Company considers interest-bearing deposits with financial institutions with remaining
maturities of three months or less at the time of acquisition to be cash equivalents.
Fair Value Measurements of Short-term Investments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants in the principal or most advantageous market
at the measurement date. Fair value is established according to a hierarchy that prioritizes
observable and unobservable inputs used to measure fair value into three broad levels, which are
described below:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement
date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1
inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets, but
corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. Level 3
inputs are given the lowest priority in the fair value hierarchy.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the
lowest level of any input that is significant to the fair value measurement. Valuation techniques
used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
As of December 31, 2024, the Company’s short-term investments consist of U.S. Treasury
instruments (Level 1), maturing within one year, and investments in a bank-managed money
market fund that invests exclusively in United States Treasury obligations and is valued at the net
asset value ("NAV") daily closing price, as reported by the fund, based on the amortized cost of
the fund’s securities (Level 2). For the bank-managed money market fund, the NAV is used as a
practical expedient to estimate fair value. This practical expedient is not used when it is determined
to be probable that the fund will sell the investment for an amount different than the reported NAV.
Such securities are classified as held to maturity, since the Company has the intent and ability to
do so, and are carried at cost plus accrued interest, which approximates fair value.
57
The fair value of inventory acquired as part of 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 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 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 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).
Accounts Receivable
The Company establishes an allowance for doubtful accounts based on the creditworthiness of its
customers and historical experience. While the Company uses the best information available to
make its evaluation, future adjustments to the allowance for doubtful accounts may be necessary
if there are significant changes in economic and industry conditions or any other factors considered
in the Company’s evaluation. Bad debt expense has been immaterial during each of the last three
years. The Company mitigates its credit risk by maintaining credit insurance on most of its
significant customers.
Inventories
Substantially all of the Company’s inventories are valued at the lower of cost, principally
determined by the last-in, first-out (LIFO) method, or net realizable value. Elements of cost in
inventories include raw materials, direct labor and manufacturing overhead.
Property, Plant and Equipment
Property, plant and equipment are carried at cost. Depreciation is computed over useful lives using
the straight-line and declining balance methods predominately over 15 years for buildings, 7 years
for machinery and equipment and 3 years for tools and dies. When assets are retired, sold or
otherwise disposed of, their gross carrying values and related accumulated depreciation are
removed from the accounts and a gain or loss on such disposals is recognized when appropriate.
Maintenance and repairs are charged to operations; replacements and improvements are
capitalized.
Long-lived Assets
The Company evaluates the carrying value of long-lived assets to be held and used when events
or changes in circumstances indicate the carrying value may not be recoverable. In performing this
review, the carrying value of the assets is compared to the projected undiscounted cash flows to
be generated from the assets. If the sum of the undiscounted expected future cash flows is less
than the carrying value of the assets, the assets are considered to be impaired. Impairment losses
are measured as the amount by which the carrying value of the assets exceeds their fair value. The
Company bases fair value of the assets on quoted market prices if available or, if not available,
quoted market prices of similar assets. Where quoted market prices are not available, the Company
58
estimates fair value using the estimated future cash flows generated by the assets discounted at a
rate commensurate with the risks associated with the recovery of the assets. As of December 31,
2024, the Company does not believe there are any indications of impairment related to long-lived
assets.
Goodwill
The Company’s goodwill represents the excess of the purchase price of business combinations
over the fair value of the net assets acquired. We assess goodwill for impairment on an annual
basis during the fourth quarter of each year, and between annual tests whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment exists
by the amount the fair value of a reporting unit to which goodwill has been allocated is less than
their respective carrying values. The impairment for goodwill is limited to the total amount of
goodwill allocated to the reporting unit. Goodwill impairment testing requires significant
judgment and management estimates, including, but not limited to, the determination of (i) the
number of reporting units, (ii) the goodwill and other assets and liabilities to be allocated to the
reporting units and (iii) the fair values of the reporting units. The estimates and assumptions
described above, along with other factors such as discount rates, will significantly affect the
outcome of the impairment tests and the amounts of any resulting impairment losses. As of
December 31, 2024, the Company does not believe there are any indications of impairment related
to goodwill.
Income Taxes
Income taxes are accounted for using the asset and liability method. Under this method, deferred
income taxes are recognized for the tax consequences of “temporary differences” by applying
enacted statutory rates applicable to future years to temporary differences between the financial
statement carrying amounts and the tax basis of the Company’s assets and liabilities.
Product Liability
The Company provides for product liability claims including estimated legal costs to be incurred
defending such claims. The provision for product liability claims is charged to cost of products
sold.
Advertising Costs
The Company includes advertising costs in selling expenses and these costs are expensed as
incurred. Advertising costs for 2024, 2023, and 2022, were $3.4 million, $3.1 million, and $2.4
million, respectively.
Shipping Costs
Costs incurred related to the shipment of products are included in selling expense. Such costs
totaled $4.3 million, $4.4 million, and $4.7 million in 2024, 2023, and 2022, respectively.
59
Research and Development
In 2024, 2023, and 2022, the Company spent approximately $8.2 million, $9.8 million, and $9.6
million, respectively, on research and development activities relating to new products and the
improvement of existing products. These costs are included in costs of products sold and are
expensed as incurred. These costs are capitalized for tax purposes under the provisions of the Tax
Cuts and Jobs Act of 2017 that relate to IRS Code Section 174, as discussed in Note 13.
Earnings per Share
Basic earnings per share is based upon the weighted-average number of shares of common stock
outstanding during the year. Diluted earnings per share reflect the impact of restricted stock units
and deferred stock outstanding using the treasury stock method.
Recent Accounting Pronouncements
In November of 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):
Improvements to Reportable Segment Disclosures.” The updated accounting guidance requires
enhanced reportable segment disclosures, primarily related to significant segment expenses which
are regularly provided to the chief operating decision maker. The guidance is effective for fiscal
years beginning after December 15, 2023 and interim periods within fiscal years beginning after
December 15, 2024. The Company adopted ASU 2023-07, beginning with the current filing. The
adoption of the new guidance required additional disclosures, but did not have a material impact
to the Company. Refer to Note 17, Operating Segment Information, for the updated presentation.
In December of 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements
to Income Tax Disclosures.” The updated accounting guidance requires expanded income tax
disclosures, including the disaggregation of existing disclosures related to the effective tax rate
reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after
December 15, 2024. Prospective application is required, with retrospective application permitted.
The Company is currently evaluating the effect the updated guidance will have on its financial
statement disclosures.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting
Comprehensive Income—Expense Disaggregation Disclosures,” which requires additional
disclosure of certain costs and expenses within the notes to the financial statements. The updated
standard is effective for annual reporting periods beginning after December 15, 2026 and interim
reporting periods within annual reporting periods beginning after December 15, 2027. The
requirements will be applied prospectively with the option for retrospective application. Early
adoption is permitted. The Company is currently evaluating the effect the updated guidance will
have on its financial statement disclosures.
60
2.
Revenue Recognition and Contracts with Customers
The impact of ASC 606 on revenue recognized during the years ended December 31, 2024,
December 31, 2023, and December 31, 2022 is as follows:
2024
2023
2022
Contract liabilities with customers at January 1,
$ 149
$ 1,031
$ -
Revenue recognized
(149)
(4,084)
-
Revenue deferred
-
3,202
1,031
Contract liabilities with customers at December 31,
$ -
$ 149
$ 1,031
During the year ended December 31, 2024, the Company did not defer any revenue and recognized
$0.1 million of revenue previously deferred as the performance obligations relating to the shipment
of free products were satisfied. This resulted in a net increase in firearms sales for the year ended
December 31, 2024 of $0.1 million and there being no deferred contract revenue liability at
December 31, 2024.
During the year ended December 31, 2023, the Company deferred $3.2 million of revenue, offset
by the recognition of $4.1 million of revenue previously deferred as the performance obligations
relating to the shipment of free products were satisfied. This resulted in a net increase in firearms
sales for the year ended December 31, 2023 of $0.9 million and a deferred contract revenue liability
at December 31, 2023 of $0.1 million.
During the year ended December 31, 2022, the Company deferred $1.0 million of revenue. There
was no offset for the recognition from previously deferred revenue as the Company did not satisfy
any performance obligations relating to the shipment of free products during the year. This
resulted in a net decrease in firearms sales for the year ended December 31, 2022 of $1.0 million
and a deferred contract revenue liability at December 31, 2022 of $1.0 million.
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.
61
3.
Trade Receivables, Net
Trade receivables consist of the following:
December 31,
2024
2023
Trade receivables
$68,855
$61,428
Allowance for doubtful accounts
(400)
(400)
Allowance for discounts
(1,310)
(1,164)
$67,145
$59,864
In 2024, the largest individual trade receivable balances accounted for 26%, 20%, 14%, and 11%
of total trade receivables, respectively.
In 2023, the largest individual trade receivable balances accounted for 22%, 20%, and 17% of total
trade receivables, respectively.
4.
Inventories
Inventories consist of the following:
December 31,
2024
2023
Inventory at FIFO
Finished goods
$ 26,022
$ 30,989
Materials and products in process
123,395
119,203
Gross inventories
149,417
150,192
Less: LIFO reserve
(66,398)
(64,262)
Less: excess and obsolescence reserve
(6,533)
(6,120)
Net inventories
$ 76,486
$ 79,810
5.
Property, Plant and Equipment
Property, plant and equipment consist of the following:
December 31,
2024
2023
Land and improvements
$ 2,826
$ 2,826
Buildings and improvements
76,153
74,650
Machinery and equipment
333,365
322,730
Dies and tools
65,278
62,191
Property, plant and equipment
477,622
462,397
Less allowances for depreciation
(406,373)
(390,863)
Net property, plant and equipment
$ 71,249
$ 71,534
62
Depreciation expense totaled $21.1 million, $21.1 million, and $24.4 million in 2024, 2023, and
2022, respectively.
6.
Other Assets
Other assets consist of the following:
December 31,
2024
2023
Patents, at cost
$10,339
$10,280
Deposits on capital items
18,443
23,045
Marlin trade name, at cost
7,800
7,800
Accumulated amortization
(8,008)
(7,171)
Other
9,173
9,958
$37,747
$43,912
The capitalized cost of patents is amortized using the straight-line method over their useful lives.
Expenses related to patent amortization was $0.5 million in 2024, $0.4 million in 2023, and $0.4
million in 2022. The estimated annual patent amortization expense for each of the next five years
is $0.4 million. Costs incurred to maintain existing patents are charged to expense in the year
incurred. The Marlin trade name will be amortized using the straight-line method over its useful
life. The estimated annual trade name amortization cost for each of the next five years is $0.4
million. The intangible asset related to Marlin customer relationships are included in Other above
and will be amortized using the straight-line method over its useful life. The estimated annual
customer relationship name amortization expense for each of the next five years is $0.1 million.
7.
Leased Assets
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 of the guidance of ASU
2016-02. The Company’s lease agreements generally do not require material variable lease
payments, residual value guarantees or restrictive covenants.
63
The Company uses the effective interest method to record right-of-use assets equal to the present
value of the contractual liability for future lease payments. The table below presents the right-of-
use assets and related lease liabilities recognized on the condensed consolidated balance sheet as
of December 31, 2024:
Balance Sheet Line
Item
December 31,
2024
December 31,
2023
Right-of-use assets
Other assets
$2,345
$2,781
Operating lease liabilities
Current portion
Trade accounts payable
and accrued expenses
$598
$ 611
Noncurrent portion
Lease liabilities
1,747
2,170
Total operating lease liabilities
$2,345
$2,781
The depreciable lives of right-of-use 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 table below includes cash paid for our operating lease liabilities, other non-cash
information, our weighted average remaining lease term and weighted average discount rate:
Year Ended
December 31,
2024
December 31,
2023
Cash paid for amounts included in the measurement of
lease liabilities
$796
$796
Cash amounts paid for short-term leases
$449
$565
Right-of-use assets obtained in exchange for lease liabilities
$ -
$ -
Weighted average remaining lease term (years)
7.7
7.9
Weighted average discount rate
8.0%
5.0%
64
The following table reconciles the undiscounted future minimum lease payments to the total
operating lease liabilities recognized on the condensed consolidated balance sheet as of December
31, 2024:
2025
$ 765
2026
771
2027
295
2028
160
2029
160
Thereafter
800
Total undiscounted future minimum lease payments
2,951
Less: Difference between undiscounted lease payments & the
present value of future lease payments
(606)
Total operating lease liabilities
$2,345
Certain of the Company’s lease agreements contain renewal options at the Company’s discretion.
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. The Company’s
weighted average remaining lease term for operating leases as of December 31, 2024 is 7.7 years.
8.
Trade Accounts Payable and Accrued Expenses
Trade accounts payable and accrued expenses consist of the following:
December 31,
2024
2023
Trade accounts payable
$13,170
$11,100
Federal excise taxes payable
13,192
11,954
Accrued other
9,388
8,654
$35,750
$31,708
9.
Accrued Dividends
On November 30, 2022, the Company’s Board of Directors declared a $5.00 per share special
dividend payable on January 5, 2023 to stockholders of record as of December 15, 2022. The
dividend, which totaled $88.3 million, was paid on January 5, 2023.
10.
Line of Credit
On January 7, 2022, the Company entered into a three-year, $40 million unsecured revolving line
of credit agreement with a bank. On June 6, 2024, the Company amended its existing line of credit
agreement, 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
65
(0.25%) per year on the unused portion. At December 31, 2024, the Company was in compliance
with the terms and covenants of the credit facility.
11.
Employee Benefit Plans
The Company sponsors a qualified defined-contribution 401(k) plan that covers substantially all
of its employees. Under the terms of the 401(k) plan, the Company matches a certain portion of
employee contributions to their individual 401(k) accounts using the “safe harbor” guidelines
provided in the Internal Revenue Code. Expenses related to matching employee contributions to
the 401(k) plan were $4.1 million, $4.7 million, and $4.1 million in 2024, 2023, and 2022,
respectively.
Additionally, in 2024, 2023, and 2022 the Company provided discretionary supplemental
contributions to the individual 401(k) accounts of substantially all employees. Each employee
received a supplemental contribution to their account based on a uniform percentage of qualifying
compensation established annually. The cost of these supplemental contributions totaled $7.0
million, $6.9 million, and $7.4 million in 2024, 2023, and 2022, respectively.
12.
Other Operating Income, Net
Other operating income, net consists of the following:
Year ended December 31,
2024
2023
2022
Gain on sale of operating assets
$-
$5
$36
13.
Income Taxes
The Company files income tax returns in the U.S. federal jurisdiction and various state
jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal and state
income tax examinations by tax authorities for years before 2017.
The federal and state income tax provision consisted of the following:
Year ended December 31,
2024
2023
2022
Current
Deferred
Current
Deferred
Current
Deferred
Federal
$10,310
$(4,190) $14,763
$(5,285) $21,741
$(4,694)
State
1,607
(515)
1,713
(582)
3,779
(879)
$11,917
$(4,705) $16,476
$(5,867) $25,520
$(5,573)
66
The effective income tax rate varied from the statutory federal income tax rate as follows:
Year ended December 31,
2024
2023
2022
Statutory federal income tax rate
21.0%
21.0%
21.0%
State income taxes, net of federal tax benefit
1.5
2.2
2.7
Research and development tax credits
(5.9)
(2.7)
(4.2)
Other
2.5
(2.5)
(1.1)
Effective income tax rate
19.1%
18.0%
18.4%
The Company estimates that its effective tax rate in 2025 will approximate 20.3%.
Significant components of the Company’s deferred tax assets and liabilities are as follows:
December 31,
2024
2023
Deferred tax assets
Capitalized research and development costs
$12,566
$ 9,144
Employee compensation and benefits
2,483
2,452
Allowances for doubtful accounts and discounts
452
431
Inventories
1,831
1,635
Stock-based compensation
1,876
1,698
Other
1,537
1,608
Total deferred tax assets
20,745
16,968
Deferred tax liabilities:
Depreciation
2,868
3,578
Other
1,196
1,414
Total deferred tax liabilities
4,064
4,992
Net deferred tax assets
$16,681
$11,976
In 2022, the Company adopted the provisions of the Tax Cuts and Jobs Act of 2017 that relate to
IRS Code Section 174. Under these provisions, research and development costs must be capitalized
and amortized over five years for income tax purposes. The Company continues to expense these
costs in the period incurred for financial accounting purposes.
The Company made income tax payments of approximately $10.6 million, $26.0 million, and
$28.7 million, during 2024, 2023, and 2022, respectively. The Company expects to realize its
deferred tax assets through tax deductions against future taxable income.
The Company does not believe it has included any “uncertain tax positions” in its federal income
tax return or any of the state income tax returns it is currently filing. The Company has made an
evaluation of the potential impact of additional state taxes being assessed by jurisdictions in which
the Company does not currently consider itself liable. The Company does not anticipate that such
additional taxes, if any, would result in a material change to its financial position.
67
14.
Earnings Per Share
Set forth below is a reconciliation of the numerator and denominator for the basic and diluted
earnings per share calculations for the periods indicated:
Year ended December 31,
2024
2023
2022
Numerator:
Net income
$30,563
$48,215
$88,332
Denominator:
Weighted average number of common shares
outstanding – Basic
17,088,205
17,676,955
17,648,850
Dilutive effect of options and restricted stock
units outstanding under the Company’s
employee compensation plans
181,896
134,263
144,498
Weighted average number of common shares
outstanding – Diluted
17,270,101
17,811,218
17,793,348
15.
Stock Repurchases
In 2024, 2023, and 2022 the Company repurchased shares of its common stock. Details of these
purchases are as follows:
Period
Total
Number of
Shares
Purchased
Average
Price Paid
per Share
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Program
Maximum
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Program
Third Quarter 2022
July 3 to July 30
July 31 to August 27
August 28 to October 1
-
-
2,136
-
-
$49.97
-
-
2,136
Fourth Quarter 2022
October 2 to October 29
October 30 to November 26
November 27 to December 31
-
2,304
-
-
$49.77
-
-
2,304
-
Fourth Quarter 2023
October 1 to October 28
October 29 to November 25
November 26 to December 31
-
179,341
84,721
-
$45.20
$43.67
-
179,341
84,721
68
First Quarter 2024
January 1 to January 27
January 28 to February 24
February 25 to March 30
7,317
20,307
47,400
$43.42
$42.93
$42.79
7,317
20,307
47,400
Second Quarter 2024
March 31 to April 27
April 28 to May 25
May 26 to June 29
-
28,924
373,969
-
$42.92
$42.27
-
28,924
373,969
Third Quarter 2024
June 30 to July 27
July 28 to August 24
August 25 to September 28
156,517
-
64,325
$41.27
-
$40.66
156,517
-
64,325
Fourth Quarter 2024
September 29 to October 26
October 27 to November 23
November 23 to December 31
11,340
52,129
72,832
$40.50
$39.50
$34.81
11,340
52,129
72,832
Total
1,103,562
$42.07
1,103,562
$40,290,000
All of these purchases were made with cash held by the Company and no debt was incurred
At December 31, 2024, approximately $40.3 million remained authorized for share repurchases.
16.
Compensation Plans
In May 2017, the Company’s shareholders approved the 2017 Stock Incentive Plan (the “2017
SIP”) under which employees, independent contractors, and non-employee directors may be
granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any
of which may or may not require the satisfaction of performance objectives. Vesting requirements
are determined by the Compensation Committee of the Board of Directors. The Company has
reserved 750,000 shares for issuance under the 2017 SIP.
In June 2023, the Company’s shareholders approved the 2023 Stock Incentive Plan (the “2023
SIP”) under which employees, independent contractors, and non-employee directors may be
granted stock options, restricted stock, deferred stock awards, and stock appreciation rights, any
of which may or may not require the satisfaction of performance objectives. Vesting requirements
are determined by the Compensation Committee of the Board of Directors. The Company reserved
1,000,000 shares for issuance under the 2023 SIP, of which 845,000 shares remain available for
future grants as of December 31, 2023. Approximately 150,000 shares remaining from the 2017
SIP will be available for future grants under the terms of the 2023 SIP. Since the shareholder
approval of the 2023 SIP, no additional awards have been or will be granted under the 2017 SIP.
Previously granted and outstanding awards under the 2017 SIP will remain subject to the terms of
the 2017 SIP.
69
Compensation expense related to deferred stock, restricted stock, and restricted stock units is
recognized based on the grant-date fair value of the Company’s common stock, using either the
actual share price or an estimated value using the Monte Carlo valuation model. The total stock-
based compensation cost included in the Statements of Income was $5.8 million, $6.2 million, and
$5.7 million in 2024, 2023, and 2022, respectively.
Deferred Stock
Deferred stock awards vest based on the passage of time or the Company’s attainment of
performance objectives. Upon vesting, these awards convert one-for-one to common stock.
In 2024, 9,291 deferred stock awards were issued to non-employee directors that will vest in June
2025 and 11,992 deferred stock awards were issued to non-employee directors that will vest in
June 2027
In 2023, 7,566 deferred stock awards were issued to non-employee directors that vested in June
2024 and 9,760 deferred stock awards were issued to non-employee directors that will vest in June
2026.
In 2022, 5,953 deferred stock awards were issued to non-employee directors that vested in May
2023, 7,688 deferred stock awards were issued to non-employee directors that will vest in May
2025 and a 1,478 deferred stock award was issued to a non-employee director that will vest in June
2027.
Compensation expense related to these awards is amortized ratably over the vesting period.
Compensation expense related to these awards was $0.9 million in 2024, $0.9 million in 2023, and
$0.8 million in 2022.
At December 31, 2024, there was $1.0 million of unrecognized compensation cost related to
deferred stock that is expected to be recognized over a period of three years.
Restricted Stock Units
The Company grants restricted stock units (RSU’s) to senior employees. Some of these RSU’s
are retention awards and have only time-based vesting. Other RSU’s have a vesting “double
trigger.” The vesting of these RSU’s is dependent on the achievement of corporate objectives
established by the Compensation Committee of the Board of Directors, including return on net
operating assets, stock performance, and the passage of time.
During 2024, 153,000 restricted stock units were issued. Compensation costs related to these
restricted stock units was $6.8 million, of which $1.9 million was recognized in 2024. The costs
are being recognized ratably over the remaining periods required before the units vest, which range
from 24 to 26 months.
During 2023, 114,000 restricted stock units were issued. Compensation costs related to these
restricted stock units was $6.1 million, of which $1.3 million was recognized in 2023. The costs
70
are being recognized ratably over the remaining periods required before the units vest, which range
from 24 to 26 months.
During 2022, 82,000 restricted stock units were issued. Compensation costs related to these
restricted stock units was $6.0 million, of which $1.7 million was recognized in 2022. The costs
are being recognized ratably over the remaining periods required before the units vest, which range
from 24 to 26 months.
At December 31, 2024, there was $7.8 million of unrecognized compensation cost related to
restricted stock units that is expected to be recognized over a period of 3.3 years.
17.
Operating Segment Information
The Company has two reportable operating segments: firearms and castings. The firearms
segment manufactures and sells rifles, pistols, and revolvers principally to a number of federally-
licensed, independent wholesale distributors primarily located in the United States. The castings
segment manufactures and sells steel investment castings and metal injection molding parts.
Corporate segment income relates to interest income, the sale of non-operating assets, and other
non-operating activities. Corporate segment assets consist of cash and other non-operating assets.
The Company evaluates performance and allocates resources, in part, based on income (loss)
before taxes. The accounting policies of the reportable segments are the same as those described
in the summary of significant accounting policies (see Note 1). Intersegment sales are recorded at
the Company’s cost plus a fixed profit percentage.
This segment structure reflects the financial information and reports used by the Company’s
management, specifically its CODM, to make decisions regarding the Company’s business,
including resource allocations and performance assessments, as well as the current operating focus
in compliance with ASC 280, Segment Reporting. The Company’s reportable segments are not
aggregated.
The Company’s method for measuring performance of a reportable segment is primarily gross
profit. The CODM does not review disaggregated assets by segment. The Company adopted ASU
2023-07 in January 2025. The most significant provision was the required disclosure of significant
segment expenses that are regularly provided to the CODM. The Company’s CODM periodically
reviews cost of goods sold by segment and treats it as a significant segment expense.
Year ended December 31,
2024
2023
2022
Net Sales
Firearms
$532,608
$540,746
$593,289
Castings
Unaffiliated
3,035
3,021
2,553
Intersegment
31,528
33,086
21,306
34,563
36,107
23,859
Eliminations
(31,528)
(33,086)
(21,306)
$535,643
$543,767
$595,842
71
Costs of Goods Sold
Firearms
$417,222
$407,068
$410,507
Castings
Unaffiliated
4,006
3,080
5,250
Intersegment
31,528
33,086
21,306
35,534
36,166
26,556
Eliminations
(31,528)
(33,086)
(21,306)
$421,228
$410,148
$415,757
Gross Profit (Loss)
Firearms
$115,386
$133,678
$182,782
Castings
(971)
(59)
(2,697)
$114,415
$133,619
$180,085
Operating Income (Loss)
Firearms
$33,273
$52,887
$106,803
Castings
(1,619)
(803)
(3,347)
$31,654
$52,084
$103,456
Income (Loss) Before Income Taxes
Firearms
$34,051
$53,723
$108,609
Castings
(1,616)
(799)
(3,338)
Corporate
5,340
5,900
3,008
$37,775
$58,824
$108,279
Year ended December 31,
2024
2023
2022
Identifiable Assets
Firearms
$230,024
$228,699
$223,301
Castings
9,303
11,144
11,910
Corporate
144,707
158,974
249,552
$384,034
$398,817
$484,763
Goodwill
Firearms
$3,055
$3,055
$3,055
Castings
209
209
209
$3,264
$3,264
$3,264
Depreciation
Firearms
$19,952
$19,301
$21,992
Castings
1,154
1,814
2,452
$21,106
$21,115
$24,444
Capital Expenditures
Firearms
$20,488
$15,395
$26,598
Castings
333
401
1,175
$20,821
$15,796
$27,773
In 2024, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s - 28%; Sports South - 18%; and Davidson’s - 16%.
In 2023, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s - 24%; Davidson’s - 19%; and Sports South -15%.
72
In 2022, the Company’s largest customers and the percent of firearms sales they represented were
as follows: Lipsey’s - 23%; Davidson’s - 23%; and Sports South - 21%.
The Company’s assets are located entirely in the United States and domestic sales represented at
least 94% of total sales in 2024, 2023, and 2022.
18.
Quarterly Results of Operations (Unaudited)
The following is a tabulation of the unaudited quarterly results of operations for the two years
ended December 31, 2024:
Three Months Ended
3/30/24
6/29/24
9/28/24
12/31/24
Net Sales
$136,820
$130,761
$122,287
$145,775
Gross profit
29,403
29,154
22,672
33,186
Net income
7,084
8,264
4,738
10,477
Basic earnings per share
0.41
0.48
0.28
0.63
Diluted earnings per share
$0.40
$0.47
$0.28
$0.62
Three Months Ended
4/1/23
7/1/23
9/30/23
12/31/23
Net Sales
$149,453
$142,804
$120,893
$130,617
Gross profit
38,486
38,148
24,728
32,257
Net income
14,350
16,185
7,431
10,249
Basic earnings per share
0.81
0.91
0.42
0.58
Diluted earnings per share
$0.81
$0.91
$0.42
$0.58
19.
Related Party Transactions
From time to time, the Company contracts with the National Rifle Association (“NRA”) for some
of its promotional and advertising activities. The Company paid the NRA $0.5 million, $0.5
million and $0.7 million in 2024, 2023, and 2022, 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. The Company paid the NSSF $0.4 million, $0.3 million and $0.3
million in 2024, 2023, and 2022, respectively. One of the Company’s Directors also serves on the
Board of the NSSF.
20.
Contingent Liabilities
As of December 31, 2024, the Company was a defendant in eight (8) lawsuits and is aware
of certain other such claims. The lawsuits generally fall into four (4) categories: municipal
litigation, breach of contract, unfair trade practices, and trademark litigation. Each is discussed in
turn below.
73
Municipal Litigation
Municipal litigation generally includes those cases brought by cities or other governmental
entities against firearms manufacturers, distributors and retailers seeking to recover damages
allegedly arising out of the criminal misuse of firearms by third parties. There are four (4)
lawsuits of this type, as follows.
In City of Gary v. Smith & Wesson Corp., et al, filed in Indiana State Court in 1999, the City
of Gary, Indiana 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, during the quarter ended April 3, 2021,
the City initiated discovery and the manufacturer Defendants reciprocated.
On March 15, 2024, Indiana Governor Eric Holcomb signed into law HB 1235, which reserves
to the State of Indiana the right to bring an action on behalf of a political subdivision against
a firearm or ammunition manufacturer, trade association, seller, or dealer, concerning certain
matters. The new law also prohibits a political subdivision from bringing or maintaining such
an action. Following passage of this new law, the Company and other Defendants filed a
Motion for Judgment on the Pleadings on March 18, 2024. On August 12, 2024, the Court
denied Defendants’ motion. The Court granted Defendants’ subsequent request to certify the
Order for appeal. On October 2, 2024, Defendants filed a motion with the Indiana Court of
Appeals to accept jurisdiction over the interlocutory appeal, which was granted over
Plaintiff’s objection on November 1, 2024. On October 16, 2024, the trial court entered an
Order staying all proceedings pending the interlocutory appeal. Briefing of the appeal is
underway.
Estados Unidos Mexicanos v. Smith & Wesson Brands, Inc., et al. was filed by the Country
of Mexico and names seven Defendants, mostly U.S.-based firearms manufacturers, including
the Company. The Complaint advances a variety of legal theories including negligence, public
nuisance, unjust enrichment, restitution, and others. Plaintiff essentially alleges 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. Plaintiff seeks injunctive relief and monetary damages.
On November 22, 2021, Defendants jointly filed a motion to dismiss the Complaint, which
was granted on September 30, 2022. Several defendants, including the Company, also filed
Rule 12(b)(2) motions to dismiss for lack of personal jurisdiction, which the Court declined to
rule on in light of its dismissal. Plaintiffs appealed the dismissal to the First Circuit Court of
Appeals and, on January 22, 2024, the Court of Appeals reversed the District Court’s dismissal
and remanded the case for further proceedings. The Defendants filed a Petition for Writ of
74
Certiorari seeking review by the United States Supreme Court while the case moved forward at
the District Court.
On June 17, 2024, the District Court heard argument on the pending Rule 12(b)(2) motions to
dismiss. On August 7, 2024, the Court granted the motions, dismissing the Company and some of
the other Defendants from the case, but has not yet entered judgement in favor of these Defendants.
Because judgment has not entered in favor of the Company, the 30-day period in which Plaintiff
may appeal the Court’s August 7, 2024 ruling has not yet begun to run. Subsequently, the Supreme
Court granted the Defendants’ Petition for Writ of Certiorari. Oral argument at the Supreme Court
is scheduled for March 4, 2025.
On December 20, 2022, the City of Buffalo, New York filed a lawsuit captioned The City of Buffalo
v. Smith & Wesson Brands, Inc., et al. in the New York State Supreme Court for Erie County, New
York. The suit names a number of firearm manufacturers, distributors, and retailers as Defendants,
including the Company, and purports 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, Plaintiff alleges that the criminal misuse of firearms in the City of Buffalo is the result
of the manufacturing, sales, marketing, and distribution practices of the Defendants. The
Defendants timely removed the matter to the U.S. District Court for the Western District of New
York.
On December 21, 2022, the City of Rochester, New York filed a lawsuit captioned The City of
Rochester v. Smith & Wesson Brands, Inc., et al. in the New York State Supreme Court for Monroe
County, New York. The suit names the same defendants and makes essentially the same
allegations raised in Buffalo, discussed in the preceding paragraph. Defendants timely removed
the matter to the U.S. District Court for the Western District of New York.
Defendants moved to consolidate the Buffalo and Rochester cases for pretrial purposes only and
also moved to stay the cases pending a decision by the Second Circuit Court of Appeals in National
Shooting Sports Foundation, Inc. et al. v. James, which challenges the constitutionality of the
recently enacted N.Y. GEN. BUS. LAW §§ 898-a–e. On June 8, 2023, the Court granted
Defendants’ motions and the cases were consolidated for pretrial purposes and stayed.
Breach of Contract
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
ShopRuger.com website at the time of the breach. On January 20, 2023, five Plaintiffs filed an
Amended Complaint naming the Company and Freestyle Solutions, Inc. as Defendants. The
Complaint alleged causes of action for negligence, breach of implied warranties, and unjust
enrichment.
The Company moved to dismiss the Amended Complaint, and on March 27, 2024, the Court
dismissed Plaintiffs’ negligence and unjust enrichment claims against the Company. The Court
denied the motion with respect to Plaintiffs’ breach of contract claim, concluding that development
75
of additional information is required to assess the applicability of the limitation of liability clause
contained in the Company’s terms and conditions of use. The case is proceeding accordingly.
Unfair Trade Practices
Estate of Suzanne Fountain v. Sturm, Ruger & Co., Inc., was filed in Connecticut Superior Court
and arises out of the criminal shooting at the King Soopers supermarket in Boulder, Colorado on
March 22, 2021. On that date, Plaintiff’s decedent, Suzanne Fountain, was murdered by 21-year-
old Ahmad Al Aliwi Al-Issa. The Complaint alleged that the Company’s advertising and
marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade Practices Act and were
a substantial factor in bringing about the wrongful death of Suzanne Fountain.
Estate of Neven Stanisic et al. v. Sturm, Ruger & Co., Inc., was filed in Connecticut Superior Court
on behalf of five Plaintiffs. Like Estate of Suzanne Fountain, the claims arise from the criminal
shooting at the King Soopers supermarket in Boulder, Colorado on March 22, 2021. Plaintiffs’
decedents were murdered by Ahmad Al Aliwi Al-Issa and Plaintiffs alleged that the Company’s
advertising and marketing of the Ruger AR-556 pistol violate the Connecticut Unfair Trade
Practices Act and were a substantial factor in causing the wrongful death of Plaintiffs’ decedents.
The Fountain and Stanisic cases were consolidated for discovery purposes only and transferred by
the Court to the Complex Litigation Docket. Plaintiffs then sought leave to file an Amended
Complaint, essentially abandoning their negligent marketing allegations and advancing a new
theory predicated upon alleged violations of the Gun Control Act and National Firearms Act. Over
the Company’s objections, Plaintiffs were permitted to file the Amended Complaint.
The matter was timely removed to the U.S. District Court for the District of Connecticut based
upon the new allegations and federal question jurisdiction. Plaintiffs moved to remand the case to
state court and, following briefing and oral argument, the matter was remanded on April 25, 2024.
On June 12, 2024, Ruger filed Motions to Dismiss the Connecticut state court cases based upon
the doctrine of forum non conveniens. Following oral argument on September 9, 2024, the Court
allowed Plaintiffs limited, additional discovery and requested further briefing on the matter. The
briefing has been completed and the parties are awaiting a decision from the Court.
Trademark Litigation
On March 12, 2024, the Company was named as a defendant in FN Herstal, et al. v. Sturm, Ruger
& Company, Inc., which is pending in the U.S. District Court for the Middle District of North
Carolina. The Complaint alleges that the Company’s use of the initialism “SFAR” in connection
with the marketing of its Small Frame Autoloading Rifle infringes the Plaintiffs’ SCAR trademark.
The Complaint alleges violations of the Lanham Act and the North Carolina Unfair and Deceptive
Trade Practices Act, as well as trademark infringement under North Carolina common law. The
Company believes that the allegations are meritless and is defending the action accordingly.
76
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, with 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.
Company management monitors the status of known claims and the product liability accrual,
which includes amounts for asserted and unasserted claims. While it is not possible to forecast
the outcome of litigation or the timing of costs, in the opinion of management, after
consultation with special and corporate counsel, it is not probable and is unlikely that litigation,
including punitive damage claims, will have a material adverse effect on the financial position
of the Company, but may have a material impact on the Company’s financial results for a
particular period.
Product liability claim payments are made when appropriate if, as, and when claimants and
the Company reach agreement upon an amount to finally resolve all claims. Legal costs are
paid as the lawsuits and claims develop, the timing of which may vary greatly from case to case.
A time schedule cannot be determined in advance with any reliability concerning when payments
will be made in any given case.
Provision is made for product liability claims based upon many factors related to the severity
of the alleged injury and potential liability exposure, based upon prior claim experience. Because
the Company's experience in defending these lawsuits and claims is that unfavorable outcomes
are typically not 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; i.e., 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 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 at December 31, 2021 was $1.1 million and is set forth as an indication of
possible maximum liability the Company might be required to incur in these cases (regardless
77
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 on appeal.
During 2024, one (1) trademark lawsuit was filed against the Company, one (1) negligence lawsuit
was resolved, and one (1) traditional product liability lawsuit was resolved. One (1) municipal
lawsuit was dismissed, however the time period in which to file an appeal has been stayed by the
Court and the Company considers this matter still open. As of December 31, 2024, the Company
was a defendant in eight (8) lawsuits involving its products, including four (4) municipal lawsuits,
two (2) lawsuits based upon unfair trade practices, one (1) breach of contract, and one (1)
trademark litigation.
During 2023, one (1) traditional product liability lawsuit was filed against the Company and one
(1) was resolved. As of December 31, 2023, the Company was a defendant in seven (7) lawsuits
involving its products, including one (1) traditional product liability lawsuit, four (4) municipal
lawsuits and two (2) lawsuits based upon alleged unfair trade practices. The Company was also a
defendant in two (2) negligence lawsuits.
During 2022, no traditional product liability lawsuits were filed against the Company and one (1)
was resolved. As of December 31, 2022, the Company was a defendant five lawsuits involving its
products, including one (1) traditional product liability lawsuit and four (4) municipal lawsuits.
The Company also was a defendant in three (3) negligence lawsuits though, as discussed above,
that number has since been reduced to two (2) lawsuits with the consolidation of the Jones and
Copeland matters.
The Company’s product liability expense was $0.7 million in 2024, $1.5 million in 2023, $1.3
million in 2022. This expense includes the cost of outside legal fees, and other expenses incurred
in the management and defense of product liability matters.
A roll-forward of the product liability reserve and detail of product liability expense for the three
years ended December 31, 2024 follows:
Balance Sheet Roll-forward for Product Liability Reserve
Cash Payments
Balance
Beginning
of Year (a)
Accrued
Legal
Expense
(Income)
(b)
Legal Fees
(c)
Settlements
(d)
Balance
End of
Year (a)
2022
$ 892
(417)
(167)
-
$ 308
2023
$ 308
500
(129)
-
$ 679
2024
$ 679
67
(254)
-
$ 492
78
Income Statement Detail for Product Liability Expense
Accrued
Legal
Expense
(b)
Insurance
Premium
Expense
(e)
Total
Product
Liability
Expense
2022
$(417)
1,524
$1,107
2023
$ 500
1,226
$1,726
2024
$ 67
908
$ 975
Notes
(a)
The beginning and ending liability balances represent accrued legal fees only. Settlements
and administrative costs are expensed as incurred. Only in rare instances is an accrual
established for settlements.
(b)
The expense accrued in the liability is for legal fees only. In 2022, the costs incurred related
to cases that were settled or dismissed were less than the amounts accrued for these cases
in prior years.
(c)
Legal fees represent payments to outside counsel related to product liability matters.
(d)
Settlements represent payments made to plaintiffs or allegedly injured parties in exchange
for a full and complete release of liability.
(e)
Insurance expense represents the cost of insurance premiums.
There were no insurance recoveries during any of the above years.
21.
Financial Instruments
The Company does not hold or issue financial instruments for trading or hedging purposes, nor
does it hold interest rate, leveraged, or other types of derivative financial instruments. Fair values
of accounts receivable, accounts payable, accrued expenses and income taxes payable reflected in
the December 31, 2024 and 2023 balance sheets approximate carrying values at those dates.
22.
Subsequent Events
On February 14, 2025, the Company’s Board of Directors authorized a dividend of 24¢ per share
to shareholders of record on March 14, 2025.
On January 17, 2025, the Company announced the appointment of Mr. Todd W. Seyfert as its next
President & Chief Executive Officer, effective March 1, 2025. Mr. Christopher J. Killoy will step
down as President & Chief Executive Officer on that date and then serve as a Special Advisor
through his planned retirement from the Company in May 2025.
79
Mr. Kevin B. Reid, Sr. will step down as Vice President, General Counsel, and Corporate Secretary
on June 30, 2025 and then serve as Senior Counsel to the Company until his planned retirement
from the Company on June 30, 2026.
The Company’s management has evaluated transactions occurring subsequent to December 31,
2024 and determined that there were no other events or transactions during that period that would
have a material impact on the Company’s results of operations or financial position.
80
ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A—CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company conducted an evaluation, with the participation of its Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, as of December 31, 2024. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of
December 31, 2024, the Company’s disclosure controls and procedures over financial reporting
were effective.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities
Exchange Act of 1934. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company conducted an evaluation, with the participation of its Chief Executive Officer and
Chief Financial Officer, of the effectiveness of its internal control over financial reporting as of
December 31, 2024. This evaluation was performed based on the criteria established in “Internal
Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”) in 2013.
Management has concluded that the Company maintained effective internal control over financial
reporting as of December 31, 2024, based on criteria established in “Internal Control — Integrated
Framework” issued by the COSO in 2013.
The effectiveness of the Company’s internal control over financial reporting as of December 31,
2024 has been audited by RSM US LLP, an independent registered public accounting firm, as
stated in their report which is included in this Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our
most recently completed fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
81
New York Stock Exchange Certification
Pursuant to Section 303A.12(a) of the New York Stock Exchange Listed Company Manual, the
Company submitted an unqualified certification of our Chief Executive Officer to the New York
Stock Exchange in 2024. The Company has also filed, as exhibits to this Annual Report on Form
10-K, the Chief Executive Officer and Chief Financial Officer Certifications required under the
Sarbanes-Oxley Act of 2002.
ITEM 9B—OTHER INFORMATION
Rule 10b5-1 Trading Plans
The adoption or termination of contracts, instructions or written plans for the purchase and
sale of the Company’s securities by the Company’s Section 16 officers or directors for the three
months ended December 31, 2024, each of which is intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), were as follows:
Name
Title
Action
Date
Adopted
Expiration
Date
Aggregate # of
Securities to be
Purchased/Sold
John A.
Cosentino,
Jr. (1)
Director
Adoption
of Rule
10b5-1
Plan
November
14, 2024
November 14,
2025
5,000
(1) John A. Cosentino, Jr., a director of the Company, entered into a Rule 10b5-1 Plan on
November 14, 2024. Mr. Cosentino’s Rule 10b5-1 Plan provides for the potential sale of
up to 5,000 shares of the Company’s common stock. The Rule 10b5-1 Plan expires on
November 14, 2025, or upon the earlier completion of all authorized transactions under
such Rule 10b5-1 Plan.
None of the Company’s directors or Section 16 officers adopted or terminated a “non-Rule
10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K during the three
months ended December 31, 2024.
ITEM 9C—DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT
PREVENT INSPECTIONS
Not applicable.
82
PART III
ITEM 10—DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning the Company’s directors, including the Company’s separately designated
standing audit committee, and on the Company’s code of business conduct and ethics required by
this Item is incorporated by reference from the Company’s Proxy Statement relating to the 2025
Annual Meeting of Stockholders scheduled to be held May 29, 2025, which will be filed with the
SEC in April 2025.
Information concerning the Company’s executive officers required by this Item is set forth in Item
1 of this Annual Report on Form 10-K under the caption “Executive Officers of the Company.”
Information concerning beneficial ownership reporting compliance required by this Item is
incorporated by reference from the Company’s Proxy Statement relating to the 2025 Annual
Meeting of Stockholders scheduled to be held May 29, 2025, which will be filed with the SEC in
April 2025.
ITEM 11—EXECUTIVE COMPENSATION
Information concerning director and executive compensation required by this Item is incorporated
by reference from the Company’s Proxy Statement relating to the 2025 Annual Meeting of
Stockholders scheduled to be held May 29, 2025, which will be filed with the SEC in April 2025.
ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information concerning the security ownership of certain beneficial owners and management and
related stockholder matters required by this Item is incorporated by reference from the Company’s
Proxy Statement relating to the 2025 Annual Meeting of Stockholders scheduled to be held May
29, 2025, which will be filed with the SEC in April 2025.
83
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information regarding compensation plans under which equity
securities of the Company are authorized for issuance as of December 31, 2024:
Equity Compensation Plan Information
Plan category
Number of securities to
be issued upon exercise of
outstanding options,
warrants and rights
(a)
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b) *
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
Equity compensation
plans approved by
security holders
-
2017 Stock Incentive Plan
90,940
-
0
2023 Stock Incentive Plan
298,421
-
845,399 **
Equity compensation
plans not approved by
security holders
None.
Total
398,361
-
845,399
*
Restricted stock units are settled in shares of common stock or the cash equivalent.
Accordingly, the weighted-average exercise price is not applicable.
**
Includes 151,386 unused shares previously authorized for issuance under the 2017 SIP that
are now incorporated into and issuable under the 2023 SIP.
ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE
Information concerning certain relationships and related transactions required by this Item is
incorporated by reference from the Company’s Proxy Statement relating to the 2025 Annual
Meeting of Stockholders scheduled to be held May 29, 2025.
ITEM 14—PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information concerning the Company’s principal accountant fees and services and the pre-
approval policies and procedures of the audit committee of the board of directors required by this
Item is incorporated by reference from the Company’s Proxy Statement relating to the 2025
Annual Meeting of Stockholders scheduled to be held May 29, 2025, which will be filed with the
SEC in April 2025.
84
PART IV
ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a)
Exhibits and Financial Statement Schedule
(1)
Financial Statements can be found under Item 8 of Part II of this Form 10-K
(2)
Schedule can be found on Page 87 of this Form 10-K
(3)
Listing of Exhibits:
Exhibit 3.1
Certificate of Incorporation of the Company, as amended
(Incorporated by reference to Exhibit 4.1 to the Form S-8
Registration Statement previously filed by the Company File
No. 333-272443 on June 6, 2023).
Exhibit 3.2
Bylaws of the Company, as amended through November 12,
2019.
Exhibit 4.1
Description of the Company’s Securities.
Exhibit 10.1
Severance Agreement, dated as of November 25, 2024, by and
between the Company and Thomas A. Dineen (Incorporated by
reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed with the SEC on November 27, 2024). **
Exhibit 10.2
Severance Agreement, dated as of November 25, 2024 by and
between the Company and Kevin B. Reid, Sr. (Incorporated by
reference to Exhibit 99.2 to the Company's Current Report on
Form 8-K filed with the SEC on November 27, 2024).**
Exhibit 10.3
Transition Services and Consulting Agreement, dated August 1,
2016, by and between the Company and Michael O. Fifer
(Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed with the SEC on August 2,
2016).**
Exhibit 10.4
Amended and Restated Agreement, dated November 10, 2020,
by and between the Company and Christopher J. Killoy
(Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K/A filed with the SEC on
November 12, 2020).**
Exhibit 10.5
Executive Severance Agreement, dated November 25, 2024, by
and between the Company and Shawn C. Leska (Incorporated
by reference to Exhibit 99.3 to the Company's Current Report
on Form 8-K filed with the SEC on November 27, 2024).**
85
Exhibit 10.6
Loan Agreement, dated January 7, 2022 between Sturm, Ruger
& Company, Inc. and Regions Bank. (Incorporated by reference
to Exhibit 10.1 to the Company's Current Report on Form 8-K
filed with the SEC on January 11, 2022) , as amended by that
certain Amendment to Credit Agreement, dated November 3,
2022, between Sturm, Ruger & Company, Inc. and Regions
Bank (Incorporated by reference to Exhibit 99.1 to the
Company’s Current Report on Form 8-K filed with the SEC on
November 4, 2022) and that certain Second Amendment to
Loan Agreement, dated June 6, 2024, between Sturm, Ruger &
Company, Inc. and Regions Bank (Incorporated by reference to
Exhibit 99.1 to the Company’s Current Report on Form 8-K
filed with the SEC on June 10, 2024).
Exhibit 10.7
The Sturm, Ruger & Company, Inc. 2017 Stock Incentive Plan
(incorporated by reference to Annex A of the Company’s
Definitive Proxy Statement of Schedule 14A, filed with the
SEC on March 27, 2017).**
Exhibit 10.8
The Sturm, Ruger & Company, Inc. 2023 Stock Incentive Plan
(incorporated by reference to Annex A of the Company’s
Definitive Proxy Statement of Schedule 14A, filed with the
SEC on April 20, 2023)**
Exhibit 10.9
Separation Agreement, dated as of December 21, 2023 by and
between Sturm, Ruger, & Co., Inc. and Thomas P. Sullivan
(Incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K filed with the SEC on December
21, 2023).**
Exhibit 10.10
Employment Agreement, dated as of January 15, 2025, by and
between the Company and Todd W. Seyfert (Incorporated by
reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K filed with the SEC on January 17, 2025). **
Exhibit 19.1
Sturm Ruger & Company, Inc. Insider Trading Policy
Exhibit 23.1
Consent of RSM US LLP
Exhibit 31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-
14(a) of the Exchange Act.
Exhibit 31.2
Certification of Treasurer and Chief Financial Officer Pursuant
to Rule 13a-14(a) of the Exchange Act.
Exhibit 32.1
Certification of the Chief Executive Officer Pursuant to Rule
13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Exhibit 32.2
Certification of the Treasurer and Chief Financial Officer
Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
86
Sarbanes-Oxley Act of 2002.
Exhibit 97
Executive Compensation Clawback Policy
Exhibit 101.INS*
XBRL Instance Document – the instance document does not
appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document.
Exhibit 101.SCH*
Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase
Document
Exhibit 101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase
Document
Exhibit 101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase
Document
Exhibit 104*
Cover Page Interactive Data File – the cover page interactive
data file does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
*Filed herewith
**Indicates management contract or compensatory plan or arrangement
87
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STURM, RUGER & COMPANY, INC.
(Registrant)
S/THOMAS A. DINEEN
Thomas A. Dineen
Principal Financial Officer
Principal Accounting Officer, Senior Vice President,
Treasurer, and Chief Financial Officer
February 19, 2025
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
S/CHRISTOPHER J. KILLOY 2/19/25
Christopher J. Killoy
Chief Executive Officer, Director
(Principal Executive Officer)
S/RONALD C. WHITAKER 2/19/25
Ronald C. Whitaker
Director
S/JOHN A. COSENTINO, JR. 2/19/25
John A. Cosentino, Jr.
Director
S/PHILLIP C. WIDMAN 2/19/25
Phillip C. Widman
Director
S/AMIR P. ROSENTHAL 2/19/25
Amir P. Rosenthal
Director
S/SANDRA S. FROMAN 2/19/25
Sandra S. Froman
Director
S/TERRENCE G. O’CONNOR 2/19/25
Terrence G. O’Connor
Director
S/REBECCA S. HALSTEAD 2/19/25
Rebecca S. Halstead
Director
S/MICHAEL O. FIFER 2/19/25
Michael O. Fifer
Director
S/THOMAS A. DINEEN 2/19/25
Thomas A. Dineen
Principal Financial Officer
Principal Accounting Officer, Senior Vice
President, Treasurer, and Chief Financial Officer
88
EXHIBIT INDEX
Page
No.
Exhibit 3.1
Certificate of Incorporation of the Company, as amended
(Incorporated by reference to Exhibit 4.1 to the Form S-8
Registration Statement previously filed by the Company File No.
333-272443 on June 6, 2023).
Exhibit 3.2
Bylaws of the Company, as amended through November 12, 2019.
Exhibit 4.1
Description of the Company’s Securities.
Exhibit 10.1
Severance Agreement, dated as of November 25, 2024, by and
between the Company and Thomas A. Dineen (Incorporated by
reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed with the SEC on November 27, 2024). **
Exhibit 10.2
Severance Agreement, dated as of November 25, 2024 by and
between the Company and Kevin B. Reid, Sr. (Incorporated by
reference to Exhibit 99.2 to the Company's Current Report on
Form 8-K filed with the SEC on November 27, 2024).**
Exhibit 10.3
Transition Services and Consulting Agreement, dated August 1,
2016, by and between the Company and Michael O. Fifer
(Incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K filed with the SEC on August 2,
2016).**
Exhibit 10.4
Amended and Restated Agreement, dated November 10, 2020, by
and between the Company and Christopher J. Killoy (Incorporated
by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K/A filed with the SEC on November 12, 2020).**
Exhibit 10.5
Executive Severance Agreement, dated November 25, 2024, by
and between the Company and Shawn C. Leska (Incorporated by
reference to Exhibit 99.3 to the Company's Current Report on
Form 8-K filed with the SEC on November 27, 2024).**
Exhibit 10.6
Loan Agreement, dated January 7, 2022 between Sturm, Ruger &
Company, Inc. and Regions Bank. (Incorporated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K filed
with the SEC on January 11, 2022) , as amended by that certain
Amendment to Credit Agreement, dated November 3, 2022,
between Sturm, Ruger & Company, Inc. and Regions Bank
(Incorporated by reference to Exhibit 99.1 to the Company’s
Current Report on Form 8-K filed with the SEC on November 4,
2022) and that certain Second Amendment to Loan Agreement,
dated June 6, 2024, between Sturm, Ruger & Company, Inc. and
Regions Bank (Incorporated by reference to Exhibit 99.1 to the
Company’s Current Report on Form 8-K filed with the SEC on
June 10, 2024).
89
EXHIBIT INDEX (continued)
Exhibit 10.7
The Sturm, Ruger & Company, Inc. 2017 Stock Incentive Plan
(incorporated by reference to Annex A of the Company’s Definitive
Proxy Statement of Schedule 14A, filed with the SEC on March 27,
2017)
Exhibit 10.8
The Sturm, Ruger & Company, Inc. 2023 Stock Incentive Plan
(incorporated by reference to Annex A of the Company’s Definitive
Proxy Statement of Schedule 14A, filed with the SEC on April 20,
2023).**
Exhibit 10.9
Separation Agreement, dated as of December 21, 2023 by and
between Sturm, Ruger, & Co., Inc. and Thomas P. Sullivan
(Incorporated by reference to Exhibit 99.1 to the Company's Current
Report on Form 8-K filed with the SEC on December 21, 2023).**
Exhibit 10.10
Employment Agreement, dated as of January 15, 2025, by and
between the Company and Todd W. Seyfert (Incorporated by
reference to Exhibit 10.1 to the Company's Current Report on Form
8-K filed with the SEC on January 17, 2025). **
Exhibit 19.1
Sturm Ruger & Company, Inc. Insider Trading Policy
Exhibit 23.1
Consent of RSM US LLP
93
Exhibit 31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
of the Exchange Act.
94
Exhibit 31.2
Certification of Treasurer and Chief Financial Officer Pursuant to
Rule 13a-14(a) of the Exchange Act.
96
Exhibit 32.1
Certification of the Chief Executive Officer Pursuant to Rule 13a-
14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
98
Exhibit 32.2
Certification of the Treasurer and Chief Financial Officer Pursuant to
Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99
Exhibit 97
Executive Compensation Clawback Policy
Exhibit 101.INS*
Inline XBRL Instance Document– the instance document does not
appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document.
Exhibit 101.SCH*
Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
90
Exhibit 101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104*
Cover Page Interactive Data File – the cover page interactive data
file does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.
*Filed herewith
**Indicates management contract or compensatory plan or arrangement
91
YEAR ENDED DECEMBER 31, 2024
STURM, RUGER & COMPANY, INC.
ITEMS 15(a)
FINANCIAL STATEMENT SCHEDULE
92
Sturm, Ruger & Company, Inc.
Item 15(a)--Financial Statement Schedule
Schedule II—Valuation and Qualifying Accounts
(In Thousands)
COL. A
COL. B
COL. C
COL. D
COL. E
ADDITIONS
Description
Balance at
Beginning
of Period
(1)
Charged
(Credited) to
Costs and
Expenses
(2)
Charged to
Other
Accounts
–Describe
Deductions
Balance
at End
of
Period
Deductions from asset accounts:
Allowance for doubtful accounts:
Year ended December 31, 2024
$ 400
$ -
$ -
$ 400
Year ended December 31, 2023
$ 400
$ -
$ -
$ 400
Year ended December 31, 2022
$ 400
$ -
$ -
$ 400
Allowance for discounts:
Year ended December 31, 2024
$1,164
$12,241
$12,095 (a)
$1,310
Year ended December 31, 2023
$1,334
$12,540
$12,710 (a)
$1,164
Year ended December 31, 2022
$1,169
$13,849
$13,684 (a)
$1,334
(a)
Discounts taken
93
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (No. 333-272443) on
Form S-8 of Sturm, Ruger & Company, Inc. of our reports dated February 19, 2025, relating to
the consolidated financial statements, the financial statement schedule and the effectiveness of
internal control over financial reporting of Sturm, Ruger & Company, Inc, appearing in this
Annual Report on Form 10-K of Sturm, Ruger & Company, Inc. for the year ended December
31, 2024.
/s/ RSM US LLP
Stamford, Connecticut
February 19, 2025
94
EXHIBIT 31.1
CERTIFICATION
I, Christopher J. Killoy, certify that:
1.
I have reviewed this Annual Report on Form 10-K (the “Report”) of Sturm, Ruger &
Company, Inc. (the “Registrant”);
2.
Based on my knowledge, this Report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect
to the period covered by this Report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this Report, fairly present in all material respects, the financial condition,
results of operations and cash flows of the Registrant as of, and for, the periods presented
in this Report;
4.
The Registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during
the period in which this Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures
and presented in this Report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
Report based on such evaluation; and
d) Disclosed in this Report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent fiscal quarter
(the Registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the Registrant’s
internal control over financial reporting.
95
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant’s auditors and
the audit committee of Registrant’s board of directors (or persons performing the
equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or other employees
who have a significant role in the Registrant’s internal control over financial
reporting.
Date: February 19, 2025
S/CHRISTOPHER J. KILLOY
Christopher J. Killoy
Chief Executive Officer
96
EXHIBIT 31.2
CERTIFICATION
I, Thomas A. Dineen, certify that:
1.
I have reviewed this Annual Report on Form 10-K (the “Report”) of Sturm, Ruger &
Company, Inc. (the “Registrant”);
2.
Based on my knowledge, this Report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect
to the period covered by this Report;
3.
Based on my knowledge, the financial statements, and other financial information
included in this Report, fairly present in all material respects, the financial condition,
results of operations and cash flows of the Registrant as of, and for, the periods presented
in this Report;
4.
The Registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-
15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the Registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during
the period in which this Report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c)
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures
and presented in this Report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
Report based on such evaluation; and
d) Disclosed in this Report any change in the Registrant’s internal control over
financial reporting that occurred during the Registrant’s most recent fiscal quarter
(the Registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the Registrant’s
internal control over financial reporting.
97
5.
The Registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant’s auditors and
the audit committee of Registrant’s board of directors (or persons performing the
equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely
affect the Registrant’s ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management or other employees
who have a significant role in the Registrant’s internal control over financial
reporting.
Date: February 19, 2025
S/THOMAS A. DINEEN
Thomas A. Dineen
Senior Vice President, Treasurer and
Chief Financial Officer
98
EXHIBIT 32.1
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 10-K of Sturm, Ruger & Company, Inc. (the
“Company”) for the period ended December 31, 2024, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, Christopher J. Killoy, Chief Executive Officer
of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respect, the
financial condition and results of operations of the Company.
Date: February 19, 2025
S/CHRISTOPHER J. KILLOY
Christopher J. Killoy
Chief Executive Officer
A signed original of this statement has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission or its staff upon request.
99
EXHIBIT 32.2
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report on Form 10-K of Sturm, Ruger & Company, Inc. (the
“Company”) for the period ended December 31, 2024, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, Thomas A. Dineen, Senior Vice President,
Treasurer and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the
best of my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respect, the
financial condition and results of operations of the Company.
Date: February 19, 2025
S/THOMAS A. DINEEN
Thomas A. Dineen
Senior Vice President, Treasurer and
Chief Financial Officer
A signed original of this statement has been provided to the Company and will be retained by the
Company and furnished to the Securities and Exchange Commission or its staff upon request.