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Press release from Business Wire

Sturm, Ruger & Company, Inc. Reports 2011 Fully Diluted Earnings of $2.09 Per Share and Declares Dividend of 21.2¢ Per Share

Wednesday, February 22, 2012

Sturm, Ruger & Company, Inc. Reports 2011 Fully Diluted Earnings of $2.09 Per Share and Declares Dividend of 21.2¢ Per Share17:05 EST Wednesday, February 22, 2012 SOUTHPORT, Conn. (Business Wire) -- Sturm, Ruger & Company, Inc. (NYSE-RGR), announced today that for 2011, the Company reported net sales of $328.8 million and fully diluted earnings of $2.09 per share, compared with sales of $255.2 million and fully diluted earnings of $1.46 per share in 2010. For the fourth quarter of 2011, net sales were $93.2 million and fully diluted earnings were 54¢ per share. For the corresponding period in 2010, net sales were $64.1 million and fully diluted earnings were 30¢ per share. The Company also announced today that its Board of Directors declared a dividend of 21.2¢ per share for the fourth quarter, for shareholders of record as of March 9, 2012, payable on March 23, 2012. This dividend necessarily varies every quarter because the Company pays a percent of earnings rather than a fixed amount per share. Effective with this dividend, the Company increased the percent of quarterly earnings paid out as dividends by 67%. Chief Executive Officer Michael O. Fifer made the following comments related to the Company's results: Our earnings increased 42% in 2011, driven by the 29% growth in sales and our ongoing focus on continuous improvement in our operations. In 2011, new product introductions were a significant component of our sales growth as new product sales represented $98.6 million or 30% of sales in 2011. The estimated sell-through of our products from independent distributors to retailers in 2011 increased 20% from 2010. During this period, National Instant Criminal Background Check System (“NICS”) background checks (as adjusted by the National Shooting Sports Foundation) increased 14%. Cash generated from operations during 2011 was $57.4 million. At December 31, 2011, our cash and cash equivalents totaled $81.1 million, an increase of $23.5 million from December 2010. Our current ratio is 3.0 to 1 and we have no debt. In 2011, capital expenditures totaled $22.1 million, much of it related to tooling and equipment for new products. We expect to invest approximately $20 million for capital expenditures during 2012. At December 31, 2011, stockholders' equity was $137.4 million, which equates to a book value of $7.20 per share, of which $4.25 per share was cash and equivalents. In 2011, we returned $10.2 million to our shareholders through the following: Payment of $8.2 million of dividends, and Repurchase of 133,400 shares of our common stock in the open market at an average price of $14.94 per share, for a total of $2.0 million. In May 2011, the Company announced the Ruger Million Gun Challenge to benefit the National Rifle Association. Ruger pledged to donate $1 to the NRA for every Ruger firearm sold from April 2011 through March 2012, with the goal of selling one million Ruger firearms and donating $1 million to the NRA. Through December 2011, Ruger has donated $871,100 to the NRA. Today, the Company filed its Annual Report on Form 10-K for 2011. The financial statements included in this Annual Report on Form 10-K are attached to this press release. The Annual Report on Form 10-K is available on the SEC website at www.sec.gov and the Ruger website at www.ruger.com/corporate. Investors are urged to read the complete Annual Report on Form 10-K to ensure that they have adequate information to make informed investment judgments. About Sturm, Ruger Sturm, Ruger was founded in 1949 and is one of the nation's leading manufacturers of high-quality firearms for the commercial sporting market. Sturm, Ruger is headquartered in Southport, CT, with manufacturing facilities located in Newport, NH and Prescott, AZ. The Company may, from time to time, make forward-looking statements and projections concerning future expectations.Such statements are based on current expectations and are subject to certain qualifying risks and uncertainties, such as market demand, sales levels of firearms, anticipated castings sales and earnings, the need for external financing for operations or capital expenditures, the results of pending litigation against the Company, the impact of future firearms control and environmental legislation, and accounting estimates, any one or more of which could cause actual results to differ materially from those projected.Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.The Company undertakes no obligation to publish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made or to reflect the occurrence of subsequent unanticipated events.     STURM, RUGER & COMPANY, INC.   Balance Sheets (Dollars in thousands, except per share data)   December 31,       2011        2010              Assets Current Assets Cash and cash equivalents $ 81,056 $ 5,132 Short-term investments - 52,493 Trade receivables, net 42,225 31,565   Gross inventories 49,004 48,820 Less LIFO reserve (37,476 ) (37,448 ) Less excess and obsolescence reserve         (1,311 )         (1,545 ) Net inventories         10,217           9,827     Deferred income taxes 5,776 4,780 Prepaid expenses and other current assets         6,968           1,427   Total Current Assets 146,242 105,224   Property, Plant, and Equipment 169,142 150,379 Less allowances for depreciation         (116,195 )         (107,458 ) Net property, plant and equipment         52,947           42,921     Deferred income taxes 32 5,443 Other assets         7,289           4,173   Total Assets       $ 206,510         $ 157,761       STURM, RUGER & COMPANY, INC.   December 31,       2011        2010              Liabilities and Stockholders' Equity Current Liabilities Trade accounts payable and accrued expenses $ 28,592 $ 16,492 Product liability 1,305 449 Employee compensation and benefits 14,882 10,923 Workers' compensation 4,600 4,893 Income taxes payable         217           582   Total Current Liabilities 49,596 33,339   Accrued pension liability 19,082 9,369 Product liability 441 573   Contingent liabilities - -   Stockholders' Equity Common stock, non-voting, par value $1:  Authorized shares – 50,000; none issued Common stock, par value $1:  Authorized shares – 40,000,000  2011 – 23,382,566 issued,           19,083,132 outstanding  2010 – 23,003,285 issued,           18,837,251 outstanding         23,383         23,003 Additional paid-in capital 10,454 9,885 Retained earnings 168,981 137,125 Less: Treasury stock – at cost  2011 – 4,299,434 shares  2010 – 4,166,034, shares   (37,884   )   (35,885   ) Accumulated other comprehensive loss         (27,543 )         (19,648 ) Total Stockholders' Equity         137,391           114,480   Total Liabilities and Stockholders' Equity       $ 206,510         $ 157,761       STURM, RUGER & COMPANY, INC.   Statements of Income (In thousands, except per share data)Year ended December 31,       2011       2010       2009                   Net firearms sales $ 324,200 $ 251,680 $ 266,566 Net castings sales         4,616           3,526           4,419   Total net sales 328,816 255,206 270,985   Cost of products sold 217,058 171,224 183,380                           Gross profit         111,758           83,982           87,605     Operating Expenses: Selling 28,691 23,517 21,822 General and administrative 20,970 16,652 20,387 Other operating (income) expenses, net         (319 )         420           1,492   Total operating expenses 49,342 40,589 43,701                           Operating income         62,416           43,393           43,904     Other income: Royalty income 873 429 490 Interest income 29 48 118 Interest expense (110 ) (143 ) (158 ) Other income, net         308           422           6   Total other income, net 1,100 756 456                           Income before income taxes         63,516           44,149           44,360     Income taxes 23,501 15,894 16,857                           Net income       $ 40,015         $ 28,255         $ 27,503     Basic Earnings Per Share       $ 2.12         $ 1.48         $ 1.44     Fully Diluted Earnings Per Share       $ 2.09         $ 1.46         $ 1.42     Cash Dividends Per Share       $ 0.43         $ 0.33         $ 0.31                       STURM, RUGER & COMPANY, INC.   Statements of Cash Flows   (In thousands) Year ended December 31,       2011        2010        2009    Operating Activities Net income $ 40,015 $ 28,255 $ 27,503 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 12,148 9,207 7,300 Stock-based compensation 2,953 2,589 4,205 Slow moving inventory valuation adjustment (234 ) (1,057 ) 239 Loss (gain) on sale of assets (26 ) 22 (45 ) Deferred income taxes 8,205 493 2,060 Changes in operating assets and liabilities: Trade receivables (10,660 ) (6,516 ) 760 Inventories (156 ) 888 2,042 Trade accounts payable and accrued expenses 11,807 3,932 2,150 Employee compensation and benefits 3,959 (1,967 ) 4,896 Product liability 724 (1,060 ) 339 Prepaid expenses, other assets and other liabilities (10,961 ) (1,333 ) (2,132 ) Income taxes payable         (365 )         (962 )         (2,628 ) Cash provided by operating activities 57,409 32,491 46,689   Investing Activities Property, plant, and equipment additions (22,135 ) (19,409 ) (13,819 ) Purchases of short-term investments (122,978 ) (164,966 ) (77,281 ) Proceeds from sales or maturities of short-term investments 175,471 163,214 45,098 Net proceeds from sale of assets         319           21           51   Cash provided by (used for) investing activities 30,677 (21,140 ) (45,951 )   Financing Activities Dividends paid (8,159 ) (6,317 ) (5,816 ) Tax benefit from exercise of stock options 3,855 1,923 1,442 Repurchase of common stock (1,999 ) (5,718 ) (14 ) Payment of employee withholding tax related to share-based compensation (5,859 ) (1,115 ) (30 ) Repayment of line of credit         -           -           (1,000 ) Cash used for financing activities         (12,162 )         (11,227 )         (5,418 )   Increase (decrease) in cash and cash equivalents 75,924 124 (4,680 ) Cash and cash equivalents at beginning of year         5,132           5,008           9,688   Cash and cash equivalents at end of year       $ 81,056         $ 5,132         $ 5,008     Sturm, Ruger & Company, Inc.One Lacey PlaceSouthport, CT 06890www.ruger.com203-259-7843