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Press release from Business Wire

Sturm, Ruger & Company, Inc. Reports 2010 Earnings of $1.48 Per Share and Declares Dividend of 5¢ Per Share

Wednesday, February 23, 2011

Sturm, Ruger & Company, Inc. Reports 2010 Earnings of $1.48 Per Share and Declares Dividend of 5¢ Per Share17:05 EST Wednesday, February 23, 2011 SOUTHPORT, Conn. (Business Wire) -- Sturm, Ruger & Company, Inc. (NYSE: RGR), announced today that for 2010, the Company reported net sales of $255.2 million and earnings of $1.48 per share, compared with sales of $271.0 million and earnings of $1.44 per share in 2009. For the fourth quarter of 2010, net sales were $64.1 million and earnings were 30¢ per share. For the corresponding period in 2009, net sales were $63.9 million and earnings were 31¢ per share. The Company also announced today that its Board of Directors declared a dividend of 5¢ per share for the fourth quarter, for shareholders of record as of March 11, 2011, payable on March 25, 2011. Chief Executive Officer Michael O. Fifer made the following comments related to the Company's results: In 2010, the Company launched several new products including the SR9c compact pistol, the LCR-357 revolver, and the SR40 striker-fired pistol. New product introductions remain a strong driver of demand and represented $62.3 million or 24.8% of sales in 2010. The estimated sell-through of the Company's products from distributors to retailers in 2010 increased 2% from 2009. During this period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) decreased 1%. Cash generated from operations during 2010 was $32.5 million. At December 31, 2010, our cash and equivalents and short-term investments totaled $57.6 million. Our current ratio is 3.2 to 1 and we have no debt. In 2010, capital expenditures totaled $19.4 million, much of it related to tooling and equipment for new products. We expect to invest approximately $15 million for capital expenditures during 2011. At December 31, 2010, stockholders' equity was $114.5 million, which equates to a book value of $6.08 per share, of which $3.06 per share was cash and equivalents and short-term investments. In 2010, we returned $12.0 million to our shareholders through the following: 1. Paying $6.3 million of dividends, and 2. Repurchasing 412,000 shares of our common stock in the open market at an average price of $13.83 per share, for a total of $5.7 million. In January 2011, we repurchased an additional 133,400 shares of our common stock in the open market at an average price of $14.98 per share. Today, the Company filed its Annual Report on Form 10-K for 2010. The financial statements included in this Annual Report on Form 10-K are attached to this press release. The Annual Report on Form 10-K is available on the SEC website at www.sec.gov and the Ruger website at www.ruger.com/corporate/. Investors are urged to read the complete Annual Report on Form 10-K to ensure that they have adequate information to make informed investment judgments. About Sturm, Ruger Sturm, Ruger was founded in 1949 and is one of the nation's leading manufacturers of high-quality firearms for the commercial sporting market. Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities located in Newport, NH and Prescott, AZ. The Company may, from time to time, make forward-looking statements and projections concerning future expectations.Such statements are based on current expectations and are subject to certain qualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the need for external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of future firearms control and environmental legislation, and accounting estimates, any one or more of which could cause actual results to differ materially from those projected.Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.       STURM, RUGER & COMPANY, INC. Condensed Balance Sheets(Dollars in thousands, except share data)             December 31,   2010     2009   Assets   Current Assets   Cash and cash equivalents $ 5,132 $ 5,008 Short-term investments 52,493 50,741 Trade receivables, net 31,565 25,049   Gross inventories 48,820 51,048 Less LIFO reserve (37,448 ) (38,663 ) Less excess and obsolescence reserve     (1,545 )       (2,727 ) Net inventories     9,827         9,658     Deferred income taxes 4,780 5,893 Prepaid expenses and other current assets     1,427         2,062   Total Current Assets 105,224 98,411   Property, Plant, and Equipment 150,379 134,057 Less allowances for depreciation     (107,458 )       (101,324 ) Net property, plant and equipment     42,921         32,733     Deferred income taxes 5,443 6,190 Other assets     4,173         4,345   Total Assets   $ 157,761       $ 141,679                 STURM, RUGER & COMPANY, INC. Condensed Balance Sheets (Continued) (Dollars in thousands, except share data)                     December 31,     2010     2009   Liabilities and Stockholders' Equity   Current Liabilities   Trade accounts payable and accrued expenses $ 16,492 $ 12,011 Product liability 449 1,147 Employee compensation and benefits 10,923 12,890 Workers' compensation 4,893 5,443 Income taxes payable       582         1,543   Total Current Liabilities 33,339 33,034   Accrued pension liability 9,369 12,194 Product liability 573 935   Contingent liabilities (Note 17) - -   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 2010 – 23,003,285 issued, 18,837,251 outstanding 2009 – 22,826,601 issued, 19,072,780 outstanding 23,003 22,827 Additional paid-in capital 9,885 8,031 Retained earnings 137,125 115,187 Less: Treasury stock – at cost 2010 – 4,166,034 shares 2009 – 3,753,821 shares (35,885 ) (30,167 ) Accumulated other comprehensive loss       (19,648 )       (20,362 ) Total Stockholders' Equity       114,480         95,516   Total Liabilities and Stockholders' Equity     $ 157,761       $ 141,679               STURM, RUGER & COMPANY, INC. Condensed Statements of Income(Dollars in thousands, except per share data)   Year ended December 31,     2010     2009     2008   Net firearms sales $ 251,680 $ 266,566 $ 174,416 Net castings sales       3,526         4,419         7,067   Total net sales 255,206 270,985 181,483   Cost of products sold 171,224 183,380 138,730                     Gross profit       83,982         87,605         42,753     Operating Expenses: Selling 23,517 21,822 17,189 General and administrative 16,652 20,387 12,867 Other operating expenses (income), net       420         1,492         (840 ) Total operating expenses 40,589 43,701 29,216                     Operating income       43,393         43,904         13,537     Other income: Royalty income 429 490 141 Interest income 48 118 405 Interest expense (143 ) (158 ) (63 ) Other income (expense), net       422         6         (42 ) Total other income, net 756 456 441                     Income before income taxes       44,149         44,360         13,978     Income taxes 15,894 16,857 5,312                     Net income     $ 28,255       $ 27,503       $ 8,666     Basic Earnings Per Share     $ 1.48       $ 1.44       $ 0.43     Fully Diluted Earnings Per Share     $ 1.46       $ 1.42       $ 0.43     Cash Dividends Per Share     $ 0.33       $ 0.31       $ 0.00               STURM, RUGER & COMPANY, INC. Condensed Statements of Cash Flows(Dollars in thousands)                     Year ended December 31,     2010     2009     2008   Operating Activities Net income $ 28,255 $ 27,503 $ 8,666 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 9,207 7,300 5,365 Stock-based compensation 2,589 4,205 467 Slow moving inventory valuation adjustment (1,057 ) 239 495 Loss (gain) on sale of assets 22 (45 ) (95 ) Deferred income taxes 493 2,060 (4,639 ) Changes in operating assets and liabilities: Trade receivables (6,516 ) 760 (10,173 ) Inventories 888 2,042 863 Trade accounts payable and other liabilities 3,932 2,150 1,533 Employee compensation and benefits (1,967 ) 4,896 3,134 Product liability (1,060 ) 339 (189 ) Prepaid expenses, other assets and other liabilities (1,333 ) (2,132 ) 1,995 Income taxes payable       (962 )       (2,628 )       3,760   Cash provided by operating activities 32,491 46,689 11,182   Investing Activities Property, plant, and equipment additions (19,409 ) (13,819 ) (9,488 ) Purchases of short-term investments (164,966 ) (77,281 ) (45,363 ) Proceeds from sales or maturities of short-term investments 163,214 45,098 57,309 Net proceeds from sale of assets       21         51         95   Cash (used for) provided by investing activities (21,140 ) (45,951 ) 2,553   Financing Activities Dividends paid (6,317 ) (5,816 ) - Tax benefit from exercise of stock options 808 1,412 - Repurchase of common stock (5,718 ) (14 ) (10,153 ) (Repayment of) increase in line of credit       -         (1,000 )       1,000   Cash used for financing activities       (11,227 )       (5,418 )       (9,153 )   Increase (decrease) in cash and cash equivalents 124 (4,680 ) 4,582 Cash and cash equivalents at beginning of year       5,008         9,688         5,106   Cash and cash equivalents at end of year     $ 5,132       $ 5,008       $ 9,688   Sturm, Ruger & Company, Inc.One Lacey PlaceSouthport, CT 06890www.ruger.com203-259-7843