SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2004
-------------
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 1-10435
STURM, RUGER & COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-0633559
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification no.)
Lacey Place, Southport, Connecticut 06890
(Address of principal executive offices) (Zip code)
(203) 259-7843
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
The number of shares outstanding of the issuer's common stock as of July
31, 2004: Common Stock, $1 par value - 26,910,720.
Page 1 of 23
INDEX
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets--June 30, 2004 and December 31, 2003 3
Condensed consolidated statements of income--Three months ended June 30, 2004 and
2003, Six months ended June 30, 2004 and 2003 5
Condensed consolidated statements of cash flows--Six months ended June 30, 2004 6
and 2003
Notes to condensed consolidated financial statements -- June 30, 2004 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
Item 4. Controls and Procedures 20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2004 2003
---------- ----------
(Note)
ASSETS
Current Assets
Cash and cash equivalents $ 1,259 $ 3,446
Short-term investments 44,004 50,026
Trade receivables, less allowances for
doubtful accounts ($373 and $441) and
discounts ($411 and $772) 13,078 13,284
Inventories:
Finished products 15,093 15,243
Materials and products in process 35,896 33,286
---------- ----------
50,989 48,529
Deferred income taxes 7,753 7,284
Prepaid expenses and other assets 1,275 1,985
---------- ----------
Total current assets 118,358 124,554
Property, plant and equipment 157,658 155,689
Less allowances for depreciation (131,434) (128,525)
---------- ----------
26,224 27,164
Deferred income taxes 914 1,108
Other assets 10,066 10,047
---------- ----------
Total Assets $ 155,562 $ 162,873
========== ==========
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS -- CONTINUED
(Dollars in thousands, except per share data)
June 30, December 31,
2004 2003
---------- ----------
(Note)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable and accrued expenses $ 4,478 $ 4,386
Product liability 4,000 4,000
Employee compensation 7,032 6,177
Workers' compensation 5,899 6,057
Income taxes 1,409 1,219
---------- ----------
Total current liabilities 22,818 21,839
Accrued pension liability 4,956 4,729
Product liability accrual 1,495 2,665
Contingent liabilities -- Note 8 -- --
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; issued and outstanding 26,910,720 26,911 26,911
Additional paid-in capital 2,508 2,508
Retained earnings 105,519 112,866
Accumulated other comprehensive income (8,645) (8,645)
---------- ----------
Total Stockholders' Equity 126,293 133,640
---------- ----------
Total Liabilities and Stockholders' Equity $ 155,562 $ 162,873
========== ==========
Note:
The balance sheet at December 31, 2003 has been derived from the audited
financial statements at that date but does not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
See notes to condensed consolidated financial statements.
4
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Firearms sales $ 27,598 $ 27,156 $ 63,736 $ 63,639
Castings sales 5,115 4,645 9,214 9,294
---------- ---------- ---------- ----------
Net sales 32,713 31,801 72,950 72,933
Cost of products sold 27,951 25,294 55,977 53,989
---------- ---------- ---------- ----------
Gross profit 4,762 6,507 16,973 18,944
Expenses:
Selling 3,865 3,313 8,015 7,210
General and administrative 1,660 1,692 3,336 3,067
---------- ---------- ---------- ----------
5,525 5,005 11,351 10,277
---------- ---------- ---------- ----------
Operating income(loss) (763) 1,502 5,622 8,667
Other income(expense)-net (7) 226 83 618
---------- ---------- ---------- ----------
Income(loss) before income taxes (770) 1,728 5,705 9,285
Income taxes (309) 693 2,288 3,723
---------- ---------- ---------- ----------
Net income(loss) ($ 461) $ 1,035 $ 3,417 $ 5,562
========== ========== ========== ==========
Earnings(loss) per share
Basic ($ 0.02) $ 0.04 $ 0.13 $ 0.21
========== ========== ========== ==========
Diluted ($ 0.02) $ 0.04 $ 0.13 $ 0.21
========== ========== ========== ==========
Cash dividends per share $ 0.20 $ 0.20 $ 0.40 $ 0.40
========== ========== ========== ==========
Average shares outstanding
Basic 26,911 26,911 26,911 26,911
========== ========== ========== ==========
Diluted 26,911 26,911 26,983 26,911
========== ========== ========== ==========
See notes to condensed consolidated financial statements.
5
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Six Months Ended June 30,
2004 2003
---------- ----------
Cash Provided by Operating Activities $ 4,524 $ 8,011
Investing Activities
Property, plant and equipment additions (1,969) (2,465)
Purchases of short-term investments (67,830) (67,761)
Proceeds from maturities of short-term investments 73,852 72,107
---------- ----------
Cash provided by investing activities 4,053 1,881
---------- ----------
Financing Activities
Dividends paid (10,764) (10,764)
---------- ----------
Cash used by financing activities (10,764) (10,764)
---------- ----------
Decrease in cash and cash equivalents (2,187) (872)
Cash and cash equivalents at beginning of period 3,446 3,598
---------- ----------
Cash and cash equivalents at end of period $ 1,259 $ 2,726
========== ==========
See notes to condensed consolidated financial statements.
6
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2004
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements include all adjustments, consisting of normal
recurring accruals, considered necessary for a fair presentation of the results
of the interim periods. Operating results for the six months ended June 30, 2004
are not necessarily indicative of the results to be expected for the full year
ending December 31, 2004. For further information refer to the consolidated
financial statements and footnotes thereto included in the Sturm, Ruger &
Company, Inc. Annual Report on Form 10-K for the year ended December 31, 2003.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
Organization: Sturm, Ruger & Company, Inc. ("Company") is principally
engaged in the design, manufacture, and sale of firearms and investment
castings. The Company's design and manufacturing operations are located in the
United States. Substantially all sales are domestic. The Company's firearms are
sold through a select number of independent wholesale distributors to the
sporting and law enforcement markets. Investment castings are sold either
directly to or through manufacturers' representatives to companies in a wide
variety of industries.
Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
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. Certain prior year
balances have been reclassified to conform with current year presentation.
Stock Incentive and Bonus Plans: The Company accounts for employee stock
options under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standard ("SFAS") No. 123, "Accounting for
Stock-Based Compensation" as amended by SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure." Had compensation expense
for the Plans been determined in accordance with SFAS No. 123 (using the
Black-Scholes option-pricing model), the Company's net income and earnings per
share would have been reduced to the following pro forma amounts (in thousands,
except per share data):
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--CONTINUED
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net Income(loss):
As reported ($ 461) $ 1,035 $ 3,417 $ 5,562
Add: Recognized stock-based employee
compensation, net of tax -- -- -- --
Deduct: Employee compensation
expense determined under fair value
method, net of tax (7) (97) (19) (194)
---------- ---------- ---------- ----------
Pro forma ($ 468) $ 938 $ 3,398 $ 5,368
========== ========== ========== ==========
Basic Earnings(loss) per Share:
As reported ($ 0.02) $ 0.04 $ 0.13 $ 0.21
Pro forma ($ 0.02) $ 0.03 $ 0.13 $ 0.20
========== ========== ========== ==========
Diluted Earnings(loss) per Share:
As reported ($ 0.02) $ 0.04 $ 0.13 $ 0.21
Pro forma ($ 0.02) $ 0.03 $ 0.13 $ 0.20
========== ========== ========== ==========
The fair value of stock-based compensation expense was computed
using the Black-Scholes option-pricing model with the following weighted
average assumptions in 2001: dividend yield of 8.0%, expected volatility
of 34.3%, risk free rate of return of 2.0%, and expected lives of 5 years.
The estimated fair value of options granted is subject to the assumptions
made and if the assumptions changed, the estimated fair value amounts
could be significantly different. There have been no stock options granted
since 2001.
Recent Accounting Pronouncements: The Company is not aware of any
recent accounting pronouncements that are expected to have a material
effect on its financial position or financial results.
NOTE 3--INVENTORIES
Inventories are valued using the last-in, first-out (LIFO) method. An
actual valuation of inventory under the LIFO method can be made only at the end
of each year based on the inventory levels and costs existing at that time.
Accordingly, interim LIFO calculations must necessarily be based on management's
estimates of expected year-end inventory levels and costs. Because these are
subject to many forces beyond management's control, interim results are subject
to the final year-end LIFO inventory valuation.
NOTE 4--INCOME TAXES
The Company's effective tax rate differs from the statutory tax rate
principally as a result of state income taxes. Total income tax payments during
the six months ended June 30, 2004 and 2003 were $2.4 million and $1.1 million,
respectively.
8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
NOTE 5 -- PENSION PLANS
The Company sponsors two defined benefit pension plans which cover
substantially all employees. A third defined benefit plan is non-qualified and
covers certain executive officers of the Company. The estimated cost of these
plans is summarized below:
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Service cost $ 361 $ 382 $ 737 $ 754
Interest cost 718 760 1,471 1,505
Expected return on plan assets (773) (818) (1,578) (1,615)
Amortization of prior service cost 136 144 281 288
Recognized actuarial gains 185 196 376 385
---------- ---------- ---------- ----------
Net periodic pension cost $ 627 $ 664 $ 1,287 $ 1,317
========== ========== ========== ==========
NOTE 6--BASIC AND DILUTED EARNINGS PER SHARE
Basic earnings per share is based upon the weighted average number of
common shares outstanding during the period. Diluted earnings per share reflect
the impact of options outstanding using the treasury stock method, when
applicable. For the three months ended June 30, 2004, the treasury stock method
would have been antidilutive, therefore the weighted average number of common
shares were used for this period's diluted earnings per share calculation. This
resulted in diluted weighted-average shares outstanding for the three and six
months ended June 30, 2004 and 2003 of 26,911,000 and 26,911,000, and 26,983,000
and 26,911,000, respectively.
NOTE 7 -- COMPREHENSIVE INCOME
As there were no non-owner changes in equity during the first half of 2004
and 2003, total comprehensive income(loss) equals net income(loss) for the three
and six months ended June 30, 2004 and 2003, or ($0.5) million and $1.0 million,
and $3.4 million and $5.6 million, respectively.
NOTE 8 - CONTINGENT LIABILITIES
As of June 30, 2004, the Company is a defendant in approximately 20
lawsuits involving its products and is aware of certain other such claims. These
lawsuits and claims fall into two categories:
(i) those that claim damages from the Company related to allegedly
defective product design which stem from a specific incident. These
lawsuits and claims are based principally on the theory of "strict
liability" but also may be based on negligence, breach of warranty,
and other legal theories, and
9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(ii) those brought by cities, municipalities, counties, associations, and
individuals against firearms manufacturers, distributors and dealers
seeking to recover damages allegedly arising out of the misuse of
firearms by third parties in the commission of homicides, suicides
and other shootings involving juveniles and adults. The complaints
by municipalities seek damages, among other things, for the costs of
medical care, police and emergency services, public health services,
and the maintenance of courts, prisons, and other services. In
certain instances, the plaintiffs seek to recover for decreases in
property values and loss of business within the city due to criminal
violence. In addition, nuisance abatement and/or injunctive relief
is sought to change the design, manufacture, marketing and
distribution practices of the various defendants. These suits
allege, among other claims, strict liability or negligence in the
design of products, public nuisance, negligent entrustment,
negligent distribution, deceptive or fraudulent advertising,
violation of consumer protection statutes and conspiracy or concert
of action theories. Most of these cases do not allege a specific
injury to a specific individual as a result of the misuse or use of
any of the Company's products.
Management believes that, in every case, the allegations are unfounded,
and that the shootings and any results therefrom were due to negligence or
misuse of the firearms by third-parties or the claimant, and that there should
be no recovery against the Company. Defenses further exist to the suits brought
by cities, municipalities, and counties based, among other reasons, on
established state law precluding recovery by municipalities for essential
government services, the remoteness of the claims, the types of damages sought
to be recovered, and limitations on the extraterritorial authority which may be
exerted by a city, municipality, county or state under state and federal law,
including State and Federal Constitutions.
The only case against the Company alleging liability for criminal
shootings by third-parties to ever be permitted to go before a constitutional
jury, Hamilton, et al. v. Accu-tek, et al., resulted in a defense verdict in
favor of the Company on February 11, 1999. In that case, numerous firearms
manufacturers and distributors had been sued, alleging damages as a result of
alleged negligent sales practices and "industry-wide" liability. The Company and
its marketing and distribution practices were exonerated from any claims of
negligence in each of the seven cases decided by the jury. In subsequent
proceedings involving other defendants, the New York Court of Appeals as a
matter of law confirmed that 1) no legal duty existed under the circumstances to
prevent or investigate criminal misuses of a manufacturer's lawfully made
products; and 2) liability of firearms manufacturers could not be apportioned
under a market share theory. More recently, the New York Court of Appeals on
October 21, 2003 declined to hear the appeal from the decision of the New York
Supreme Court, Appellate Division, affirming the dismissal of New York Attorney
General Eliot Spitzer's public nuisance suit against the Company and other
manufacturers and distributors of firearms. In its decision, the Appellate
Division relied heavily on Hamilton in concluding that it was "legally
inappropriate," "impractical," "unrealistic" and "unfair" to attempt to hold
firearms manufacturers responsible under theories of public nuisance for the
criminal acts of others.
Of the lawsuits brought by municipalities or a state Attorney General,
fifteen have been dismissed with no appeal pending. Thirteen of those cases are
concluded: Atlanta - dismissal by intermediate Appellate Court, no further
appeal; Bridgeport - dismissal affirmed by Connecticut Supreme Court; County of
Camden - dismissal affirmed by U.S. Third Circuit Court of Appeals; Miami -
dismissal affirmed by intermediate appellate court, Florida Supreme Court
declined review; New Orleans - dismissed by Louisiana Supreme Court, United
States Supreme Court declined review; Philadelphia - U.S. Third Circuit Court of
Appeals affirmed dismissal, no further appeal; Wilmington - dismissed by trial
court, no appeal; Boston - voluntary dismissal with prejudice by the City at the
close of fact discovery; Cincinnati - voluntarily withdrawn after a unanimous
vote of the city council; Detroit -
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
dismissed by Michigan Court of Appeals, no appeal; Wayne County - dismissed by
Michigan Court of Appeals, no appeal; New York State - Court of Appeals denied
plaintiff's petition for leave to appeal the Intermediate Appellate Court's
dismissal, no further appeal; and Newark - Superior Court of New Jersey Law
Division for Essex County dismissed the case with prejudice.
Camden City was dismissed on July 7, 2003 due to the bankruptcy of one of
the parties. No further action has been taken by the city. On November 13, 2003,
plaintiffs in the Jersey City case voluntarily dismissed the matter. It is
unknown whether plaintiffs will re-file.
The dismissal of the Washington, D.C. lawsuit was sustained on appeal, but
individual plaintiffs were permitted to proceed to discovery and attempt to
identify the manufacturers of the firearms used in their shootings as "machine
guns" under the city's "strict liability" law. On March 7, 2003, the
consolidated California Cities case involving nine cities and three counties was
dismissed as to all manufacturer defendants, and plaintiffs appealed on June 9,
2003. The Chicago dismissal was reversed in part on appeal, and an appeal to the
Illinois Supreme Court is pending. On October 20, 2003, the St. Louis Circuit
Court dismissed the St. Louis case, and the city has filed a notice of appeal.
The Indiana Court of Appeals affirmed the dismissal of the Gary case by the
trial court, but the Indiana Supreme Court reversed this dismissal and remanded
the case for discovery proceedings on December 23, 2003. Cleveland and New York
City are open cases and could proceed to trial. In the NAACP case, on May 14,
2003, an advisory jury returned a verdict rejecting the NAACP's claims. On July
21, 2003, Judge Jack B. Weinstein entered an order dismissing the NAACP lawsuit,
but this order contained lengthy dicta which defendants believe are contrary to
law and fact. Appeals by both sides have been filed, but plaintiffs have
withdrawn their appeal.
Legislation has been passed in approximately 34 states precluding suits of
the type brought by the municipalities mentioned above, and similar federal
legislation has been introduced in the U.S. Congress. It passed the House by a
2-to-1 bipartisan majority and had over 54 co-sponsors in the U.S. Senate. It
was considered by the U.S. Senate in February 2004, but failed to gain final
passage after it was encumbered with numerous non-germane amendments. It is
uncertain when it may be reconsidered by the U.S. Senate.
Punitive damages, as well as compensatory damages, are demanded in many of
the lawsuits and claims. Aggregate claimed amounts presently exceed product
liability accruals and applicable insurance coverage. For claims made after July
10, 1994, compensatory and punitive damage insurance coverage is provided, in
states where permitted, for losses exceeding $2.0 million per claim, or an
aggregate maximum loss of $6.0 million. For claims made after July 10, 1997,
coverage is provided for annual losses exceeding $2.0 million per claim, or an
aggregate maximum loss of $5.5 million annually. For claims made after July 10,
2000, coverage is provided for annual losses exceeding $5 million per claim, or
an aggregate maximum loss of $10 million annually, except for certain new claims
which might be brought by governments or municipalities after July 10, 2000,
which are excluded from coverage.
On March 17, 2000, Smith & Wesson announced that it had reached a
settlement to conclude some of the municipal lawsuits with various governmental
entities. On March 30, 2000, the Office of the Connecticut Attorney General
began an investigation of certain alleged "anticompetitive practices in the
firearms industry." On April 17, 2000 the State of Maryland's Attorney General
also made similar inquiries as to the Company. On August 9, 2000, the U.S.
Federal Trade Commission also filed such a civil investigative demand regarding
the Smith & Wesson settlement. During April 2002, after the city of Boston
voluntarily withdrew its case with prejudice as to all
11
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
remaining defendants, Boston moved jointly with Smith & Wesson to dissolve their
consent decree settlement, which motion the court accepted. The Company has not
engaged in any improper conduct and has cooperated with these investigations.
The FTC announced that it was terminating this investigation without further
action on August 22, 2003.
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 our 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 our 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.
A range of reasonably possible loss relating to unfavorable outcomes cannot
be made. However, in the product liability cases in which a dollar amount of
damages is claimed, the amount of damages claimed, which totaled $433 million at
June 30, 2004, is set forth as an indication of possible maximum liability that
the Company might be required to incur in these cases (regardless 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.
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.
The 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 independent 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.
The Company has reported all cases instituted against it through March 31,
2004 and the results of those cases, where terminated, to the Securities and
Exchange Commission on its previous Form 10-K and 10-Q reports, to which
reference is hereby made.
NOTE 9--RELATED PARTY TRANSACTIONS
For the three and six months ended June 30, 2004 and 2003, the Company paid
Newport Mills, of which William B. Ruger, Jr., Chairman and Chief Executive
Officer of the Company, is the sole proprietor, $60,750 and $121,500, and
$60,750 and $121,500, respectively, for storage rental and office space.
12
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
NOTE 10--OPERATING SEGMENT INFORMATION
The Company has two reportable segments: firearms and investment castings.
The firearms segment manufactures and sells rifles, pistols, revolvers, and
shotguns principally to a select number of independent wholesale distributors
primarily located in the United States. The investment castings segment consists
of two operating divisions which manufacture and sell titanium and steel
investment castings. Selected operating segment financial information follows
(in thousands):
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2004 2003 2004 2003
---- ---- ---- ----
Net Sales
Firearms $ 27,598 $ 27,156 $ 63,736 $ 63,639
Castings
Unaffiliated 5,115 4,645 9,214 9,294
Intersegment 3,937 4,274 7,999 9,614
-------- -------- -------- --------
9,052 8,919 17,213 18,908
Eliminations (3,937) (4,274) (7,999) (9,614)
-------- -------- -------- --------
$ 32,713 $ 31,801 $ 72,950 $ 72,933
======== ======== ======== ========
Income Before Income
Taxes
Firearms $ 1,150 $ 2,697 $ 8,062 $ 10,313
Castings (1,807) (1,092) (2,311) (1,474)
Corporate (113) 123 (46) 446
-------- -------- -------- --------
$ (770) $ 1,728 $ 5,705 $ 9,285
======== ======== ======== ========
June 30, December 31,
2004 2003
---- ----
Identifiable Assets
Firearms $ 71,765 $ 72,600
Castings 18,632 17,939
Corporate 65,165 72,334
-------- --------
$155,562 $162,873
======== ========
13
ITEM 2. 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 and precision investment castings. The
Company's design and manufacturing operations are located in the United States.
Substantially all sales are domestic.
The Company is the only U.S. firearms manufacturer which offers products
in all four industry product categories - rifles, shotguns, pistols, and
revolvers. The Company's firearms are sold through a select number of
independent wholesale distributors principally to commercial sporting market.
Investment castings manufactured are of titanium and steel alloys.
Investment castings are sold either directly to or through manufacturers'
representatives to companies in a wide variety of industries.
The Company measures its performance only against its own historical
results because the Company is unable to compare its performance to other
companies or specific current industry trends in a timely manner. Many of the
Company's competitors are private companies not subject to public information
reporting requirements, and most industry-wide data is generally not available
on a current basis.
The Company does not consider its overall firearms business to be
predictably seasonal; however, sales of certain models of firearms are usually
lower in the third quarter of the year.
Results of Operations
Consolidated net sales of $32.7 million were achieved by the Company for
the three months ended June 30, 2004. This represents an increase of 2.9% from
2003 consolidated net sales of $31.8 million. In both 2004 and 2003, sales for
the six month period ended June 30 were $72.9 million.
Firearms segment net sales increased by $0.4 million, or 1.6%, in the
second quarter of 2004 to $27.6 million from $27.2 million in the second quarter
of the prior year. For the six months ended June 30, 2004 firearms segment net
sales were nearly constant, increasing by $0.1 million, to $63.7 million from
$63.6 million in the corresponding 2003 period. Firearms unit shipments
decreased 5.0% for the three-month period ended June 30, 2004 and were nearly
constant for the six-month period ended June 30, 2004 from the comparable 2003
period. For the quarter, shipments of pistols and revolvers were significantly
below 2003, while rifle and shotgun shipments exceeded 2003. The increase in
shipments of rifles was attributable to the popularity of the new 204 Ruger
caliber models, while the increase in shotguns reflected greater availability of
over-under models. For the six months ended June 30, 2004, pistol and revolver
shipments were below 2003, rifles were consistent with 2003, and shotguns, due
to the greater availability of over-under offerings, increased sharply from
2003. Pricing increases and a change in product mix from lower priced products
to higher priced products resulted in the further decline in shipments versus
sales.
Casting segment net sales increased by $0.5 million or 26.9% to $5.1
million for the three month period ended June 30, 2004 from the June 30, 2003
period due to increased demand for steel castings. For the six month period
ended June 30, 2004 casting segment net sales decreased $0.1 million to $9.2
million, reflecting a moderate increase in demand for steel castings offset by
reduced demand for titanium castings. The Company continues to explore casting
business opportunities.
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--CONTINUED
Consolidated cost of products sold for the three and the six months ended
June 30, 2004 were $28.0 million and $56.0 million compared to $25.3 million and
$54.0 million for the three and six months ended June 30, 2003, representing an
increase of 10.5% and 3.7%, respectively. The respective increases are primarily
attributable to increased production costs in the castings segment, and
increased overhead expenses resulting from a reduction in production volume. The
Company also incurred an expense of $0.3 million related to the relocation of
two titanium furnaces from its Arizona foundry to New Hampshire. The total cost
of this relocation is expected to be $1 million and is expected to be incurred
during the latter half of 2004. These increased expenses are partially offset by
decreased product liability costs.
Gross profit as a percentage of net sales was 23.3% for the six month
period ended June 30, 2004 as compared to 26.0% in the comparable 2003 period.
For the second quarter of 2004, gross profit as a percent of sales fell to 14.6%
from 20.5% in the second quarter of 2003. Margin deterioration during the three
and six month periods ended June 30, 2004 was caused by less efficient firearms
production caused by lower rates of production, increased production costs in
the castings segment, and the aforementioned $0.3 million relocation expenses
related to the two titanium furnaces, partially offset by decreased product
liability expenses.
Selling, general and administrative expenses were $5.5 million and $11.4
million for the three and six months ended June 30, 2004, representing increases
of $0.5 million and $1.1 million, respectively, from the corresponding 2003
periods. The increases for both the three and six months periods ended June 30,
2004 were primarily attributable to additional firearm promotional and
advertising expenses as well as increased personnel related expenses.
Other income-net decreased by $0.2 million and $0.5 million, respectively,
in the three and six months ended June 30, 2004 compared to the corresponding
2003 periods. These decreases are due to decreased earnings on short-term
investments resulting from a decrease in the total short-term investments held
during the periods. Other income-net for both the three and six month periods
ended June 30, 2004 was also adversely impacted by $0.3 million of costs related
to the operation of rental property purchased by the Company at the end of 2003.
The effective income tax rate of 40.1% in the three months and six months
ended June 30, 2004 remained consistent with the income tax rate in the
corresponding 2003 periods.
As a result of the foregoing factors, consolidated net income decreased
$1.5 million, or 144.5%, from $1.0 million for the three months ended June 30,
2003 to a loss of $0.5 million for the three months ended June 30, 2004, and
decreased $2.1 million, or 38.6%, from $5.6 million for the six months ended
June 30, 2003 to $3.4 million for the six months ended June 30, 2004.
Financial Condition
OPERATIONS
At June 30, 2004, the Company had cash, cash equivalents and short-term
investments of $45.2 million, working capital of $95.5 million and a current
ratio of 5.2 to 1.
Cash provided by operating activities was $4.5 million and $8.0 million
for the six months ended June 30, 2004 and 2003, respectively. The decrease in
cash provided is principally a result of lower net income and an increase in
inventories during the first six months of 2004.
15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--CONTINUED
The Company follows an industry-wide practice of offering a "dating plan"
to its firearms customers on selected products, which allows the purchasing
distributor to buy the products commencing in December, the start of the
Company's marketing year, and pay for them on extended terms. Discounts are
offered for early payment. The dating plan provides a revolving payment plan
under which payments for all shipments made during the period December through
February must be made by April 30. Generally, shipments made in subsequent
months must be paid within approximately 120 days. Dating plan receivable
balances were $6.2 million at June 30, 2004 compared to $2.7 million at June 30,
2003. The Company has reserved the right to discontinue the dating plan at any
time and has been able to finance this dating plan from internally generated
funds provided by operating activities.
The Company purchases its various raw materials from a number of
suppliers. There is, however, 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. The Company believes that it has adequate
quantities of raw materials in inventory to provide ample time to locate and
obtain additional items at a reasonable cost without interruption of its
manufacturing operations. However, if market conditions result in a significant
prolonged inflation of certain prices, the Company's results could be materially
adversely affected.
In conjunction with the sale of its Uni-Cast division in June 2000, the
Company extended credit to the purchaser in the form of a note and a line of
credit, both of which are collateralized by certain of the assets of Uni-Cast.
In July 2002, the Company established an additional collateralized line of
credit for the purchaser and, as of June 30, 2004, the total amount due from the
purchaser was $1.7 million. The Company purchases aluminum castings used in the
manufacture of certain models of pistols exclusively from Uni-Cast.
INVESTING AND FINANCING
Capital expenditures during the six months ended June 30, 2004 totaled
$2.0 million. For the past two years capital expenditures averaged approximately
$0.9 million per quarter. In 2004, the Company expects to spend approximately $6
million on capital expenditures to upgrade and modernize manufacturing equipment
primarily at the Newport Firearms, Ruger Investment Casting, and Pine Tree
Castings Divisions. The Company finances, and intends to continue to finance,
all of these activities with funds provided by operations.
For the six months ended June 30, 2004 dividends paid totaled $10.8
million. This amount reflects the regular quarterly dividend of $.20 per share
paid in March and June 2004. On July 27, 2004, the Company declared a quarterly
dividend of $.10 per share payable on September 15, 2004. Future dividends
depend on many factors, including internal estimates of future performance and
the Company's need for funds.
Historically, the Company has not required external financing. Based on
its cash flow and unencumbered assets, the Company believes it has the ability
to raise substantial amounts of short-term or long-term debt. The Company does
not anticipate any need for external financing through 2004.
Firearms Legislation
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. These laws generally prohibit the private ownership of
fully automatic weapons and place
16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- CONTINUED
certain restrictions on the interstate sale of firearms unless certain licenses
are obtained. The Company does not manufacture fully automatic weapons, other
than for the law enforcement market, and holds all necessary licenses under
these federal laws. From time to time, congressional committees review proposed
bills relating to the regulation of firearms. These proposed bills generally
seek either to restrict or ban the sale and, in some cases, the ownership of
various types of firearms. Several states currently have laws in effect similar
to the aforementioned legislation.
Until November 30, 1998, the "Brady Law" mandated a nationwide five-day
waiting period and background check prior to the purchase of a handgun. As of
November 30, 1998, the National Instant Check System, which applies to both
handguns and long guns, replaced the five-day waiting period. The Company
believes that the"Brady Law" has not had a significant effect on the Company's
sales of firearms, nor does it anticipate any impact on sales in the future. The
"Crime Bill" took effect on September 13, 1994, but none of the Company's
products were banned as so-called "assault weapons." To the contrary, all the
Company's then-manufactured commercially-sold long guns were exempted by name as
"legitimate sporting firearms." Unless reauthorized by Congress, this law will
"sunset" on September 14, 2004. The Company remains strongly opposed to laws
which would restrict the rights of law-abiding citizens to lawfully acquire
firearms. 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.
Firearms Litigation
The Company is a defendant in numerous lawsuits involving its products and
is aware of certain other such claims. The Company has expended significant
amounts of financial resources and management time in connection with product
liability litigation. Management believes that, in every case, the allegations
are unfounded, and that the shootings and any results therefrom were due to
negligence or misuse of the firearms by third-parties or the claimant, and that
there should be no recovery against the Company. Defenses further exist to the
suits brought by cities, municipalities, counties, and a state attorney general
based, among other reasons, on established state law precluding recovery by
municipalities for essential government services, the remoteness of the claims,
the types of damages sought to be recovered, and limitations on the
extraterritorial authority which may be exerted by a city, municipality, county
or state under state and federal law, including State and Federal Constitutions.
The only case against the Company alleging liability for criminal
shootings by third-parties to ever be permitted to go before a constitutional
jury, Hamilton, et al. v. Accu-tek, et al., resulted in a defense verdict in
favor of the Company on February 11, 1999. In that case, numerous firearms
manufacturers and distributors had been sued, alleging damages as a result of
alleged negligent sales practices and "industry-wide" liability. The Company and
its marketing and distribution practices were exonerated from any claims of
negligence in each of the seven cases decided by the jury. In subsequent
proceedings involving other defendants, the New York Court of Appeals as a
matter of law confirmed that 1) no legal duty existed under the circumstances to
prevent or investigate criminal misuses of a manufacturer's lawfully made
products; and 2) liability of firearms manufacturers could not be apportioned
under a market share theory. More recently, the New York Court of Appeals on
October 21, 2003 declined to hear the appeal from the decision of the New York
Supreme Court, Appellate Division, affirming the dismissal of New York Attorney
General Eliot Spitzer's public nuisance suit against the Company and other
manufacturers and distributors of firearms. In its decision, the Appellate
Division relied heavily on Hamilton in concluding that it was "legally
inappropriate," "impractical," "unrealistic" and "unfair" to attempt to hold
firearms manufacturers responsible under theories of public nuisance for the
criminal acts of others.
17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- CONTINUED
Of the lawsuits brought by municipalities or a state Attorney General,
fifteen have been dismissed with no appeal pending. Thirteen of those cases are
concluded: Atlanta - dismissal by intermediate Appellate Court, no further
appeal; Bridgeport - dismissal affirmed by Connecticut Supreme Court; County of
Camden - dismissal affirmed by U.S. Third Circuit Court of Appeals; Miami -
dismissal affirmed by intermediate appellate court, Florida Supreme Court
declined review; New Orleans - dismissed by Louisiana Supreme Court, United
States Supreme Court declined review; Philadelphia - U.S. Third Circuit Court of
Appeals affirmed dismissal, no further appeal; Wilmington - dismissed by trial
court, no appeal; Boston - voluntary dismissal with prejudice by the City at the
close of fact discovery; Cincinnati - voluntarily withdrawn after a unanimous
vote of the city council; Detroit - dismissed by Michigan Court of Appeals, no
appeal; Wayne County - dismissed by Michigan Court of Appeals, no appeal; New
York State - Court of Appeals denied plaintiff's petition for leave to appeal
the Intermediate Appellate Court's dismissal, no further appeal; and Newark -
Superior Court of New Jersey Law Division for Essex County dismissed the case
with prejudice.
Camden City was dismissed on July 7, 2003 due to the bankruptcy of one of
the parties. No further action has been taken by the city. On November 13, 2003,
plaintiffs in the Jersey City case voluntarily dismissed the matter. It is
unknown whether plaintiffs will re-file.
The dismissal of the Washington, D.C. lawsuit was sustained on appeal, but
individual plaintiffs were permitted to proceed to discovery and attempt to
identify the manufacturers of the firearms used in their shootings as "machine
guns" under the city's "strict liability" law. On March 7, 2003, the
consolidated California Cities case involving nine cities and three counties was
dismissed as to all manufacturer defendants, and plaintiffs appealed on June 9,
2003. The Chicago dismissal was reversed in part on appeal, and an appeal to the
Illinois Supreme Court is pending. On October 20, 2003, the St. Louis Circuit
Court dismissed the St. Louis case, and the city has filed a notice of appeal.
The Indiana Court of Appeals affirmed the dismissal of the Gary case by
the trial court, but the Indiana Supreme Court reversed this dismissal and
remanded the case for discovery proceedings on December 23, 2003. Cleveland and
New York City are open cases and could proceed to trial. In the NAACP case, on
May 14, 2003, an advisory jury returned a verdict rejecting the NAACP's claims.
On July 21, 2003, Judge Jack B. Weinstein entered an order dismissing the NAACP
lawsuit, but this order contained lengthy dicta which defendants believe are
contrary to law and fact. Appeals by both sides have been filed, but plaintiffs
have withdrawn their appeal.
Legislation has been passed in approximately 34 states precluding suits of
the type brought by the municipalities mentioned above, and similar federal
legislation has been introduced in the U.S. Congress. It passed the House by a
2-to-1 bipartisan majority and had over 54 co-sponsors in the U.S. Senate. It
was considered by the U.S. Senate in February 2004, but failed to gain final
passage after it was encumbered with numerous non-germane amendments. It is
uncertain when it may be reconsidered by the U.S. Senate.
Other Operational Matters
In the normal course of its manufacturing operations, the Company is
subject to occasional governmental proceedings and orders pertaining to waste
disposal, air emissions and water discharges into the environment. The Company
believes that it is generally in compliance with applicable environmental
regulations and the outcome of such proceedings and orders will not have a
material adverse effect on the financial position or results of operations of
the Company.
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- CONTINUED
The valuation of the future defined benefit pension obligations at
December 31, 2003 indicated that these plans were underfunded. While this
estimation has no bearing on the actual funded status of the pension plans, it
resulted in the recognition of other comprehensive loss of $0.5 million in 2003.
The Company expects to realize its deferred tax assets through tax
deductions against future taxable income or carry back against taxes previously
paid.
Inflation's effect on the Company's operations is most immediately felt in
cost of products sold because the Company values inventory on the LIFO basis.
Generally under this method, the cost of products sold reported in the financial
statements approximates current costs, and thus, reduces distortion in reported
income which would result from the slower recognition of increased costs when
other methods are used. The use of historical cost depreciation has a beneficial
effect on cost of products sold. The Company has been affected by inflation in
line with the general economy.
Adjustments to Critical Accounting Policies
The Company has not made any adjustments to its critical accounting
estimates and assumptions described in the Company's Annual Report on Form 10-K
filed on March 12, 2004, or the judgment affecting the application of those
estimates and assumptions.
Recent Accounting Pronouncements
The Company is not aware of any recent accounting pronouncements that are
expected to have a material effect on its financial position or financial
results.
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 including
lawsuits filed by mayors, state attorneys general and other governmental
entities and membership organizations, and the impact of future firearms control
and environmental legislation, 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.
19
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changes in prevailing market interest rates
affecting the return on its investments but does not consider this interest rate
market risk exposure to be material to its financial condition or results of
operations. The Company invests primarily in United States Treasury instruments
with short-term (less than one year) maturities. The carrying amount of these
investments approximates fair value due to the short-term maturities. Under its
current policies, the Company does not use derivative financial instruments,
derivative commodity instruments or other financial instruments to manage its
exposure to changes in interest rates or commodity prices.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation
The Company's management, with the participation of the Company's Chief
Executive Officer and Treasurer and Chief Financial Officer, has evaluated the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) as of the end of the period covered by
this report.
Conclusions
Based on that evaluation, the Company's Chief Executive Officer and
Treasurer and Chief Financial Officer have concluded that, as of the end of such
period, the Company's disclosure controls and procedures are effective.
There have not been any changes in the Company's internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the Company's most recent quarter that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the legal proceedings against the Company is discussed at
Note 8 to this Form 10-Q report, which is incorporated herein by reference.
The Company has reported all cases instituted against it through March 31,
2004, and the results of those cases, where terminated, to the Securities and
Exchange Commission on its previous Form 10-K and 10-Q reports, to which
reference is hereby made.
No cases were formally instituted against the Company during the three
months ended June 30, 2004, which involved significant demands for compensatory
and/or punitive damages and in which the Company has been served with process.
20
ITEM 1. LEGAL PROCEEDINGS -- CONTINUED
During the three months ending June 30, 2004, no previously reported cases
were settled.
On April 30, 2004, in the previously reported District of Columbia (DC)
case, the District Court of Appeals sustained the dismissal of the city's
lawsuit. The individual plaintiffs, however, were permitted to proceed to
discovery and attempt to identify the manufacturers of the firearms used in
their shootings as "machine guns" under the city's "strict liability" law.
ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 2004 Annual Meeting of the Stockholders of the Company was held on May
4, 2004. The table below sets forth the results of the votes taken at the
2004 Annual Meeting:
Votes
1. Election of Directors Votes For Withheld
--------------------- --------- --------
William B. Ruger, Jr. 25,843,257 178,684
Stephen L. Sanetti 25,839,858 182,083
Richard T. Cunniff 25,761,879 260,062
Townsend Hornor 25,760,800 261,141
Paul X. Kelley 25,765,933 256,008
John M. Kingsley, Jr. 25,821,105 200,836
James E. Service 25,816,262 205,679
2. Ratification of KPMG LLP as Auditors for 2004
Votes For Votes Against Votes Withheld
--------- ------------- --------------
25,775,409 195,180 51,352
ITEM 5. OTHER INFORMATION
None
21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
31.1 Certification Pursuant to Rule 13a-14(a) as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification Pursuant to Rule 13a-14(a) as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(b) The Company furnished the following report on Form 8-K during the
three months ended June 30, 2004:
On April 20, 2004, the Company furnished a Current Report on Form
8-K in connection with the public release of its financial results
for the first quarter ended March 31, 2004.
22
STURM, RUGER & COMPANY, INC.
FORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 2004
SIGNATURES
Pursuant to the requirements 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.
--------------------------------------
Date: August 4, 2004 S/THOMAS A. DINEEN
--------------------------------------
Thomas A. Dineen
Principal Financial Officer,
Treasurer and Chief Financial
Officer
23