10-K
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)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2005
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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 0-4776
STURM, RUGER & COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
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| Delaware
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06-0633559 |
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(I.R.S. Employer |
| Incorporation or Organization)
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Identification No.) |
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| Lacey Place, Southport, Connecticut
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06890 |
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(Zip Code) |
(203) 259-7843
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class
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Name of Each Exchange on Which Registered |
| Common Stock, $1 par value
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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 o NO þ
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 filing requirements for the past 90 days. YES þ NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K þ.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in
Rule 12b-2 of the Exchange Act.
Large
accelerated filer o
Accelerated filer þ Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YES o NO þ
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, 2005:
Common Stock, $1 par value — $175,877,600
The number of shares outstanding of the registrant’s common stock as of March 1, 2006:
Common Stock, $1 par value — 26,910,720 shares
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the registrant’s Annual Report to Stockholders for the fiscal year ended December 31,
2005 are incorporated by reference into Parts I and II (Items 1 through 9A) of this Report.
Portions of the registrant’s Proxy Statement relating to the Annual Meeting of Stockholders to be
held May 24, 2006 are incorporated by reference into Part III (Items 10 through 14) of this Report.
In this Annual Report on Form 10-K, Sturm, Ruger & Company (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
including lawsuits filed by mayors, 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.
PART I
ITEM 1—BUSINESS
Company Overview
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 and export sales are insignificant.
The Company is the only U.S. firearms manufacturer that 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 the 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 believes that it is one of the largest U.S. firearms manufacturers. The Company, which
has been profitable every year since 1950, believes it has a preeminent reputation among sportsmen,
hunters, and gun collectors for technical innovation and quality construction, based on reports in
industry and business publications. The Company has been in business since 1949 and was
incorporated in its present form under the laws of Delaware in 1969.
For the years ended December 31, 2005, 2004, and 2003, net sales attributable to the Company’s
firearms operations were approximately $132.8 million, $124.9 million and $130.5 million or 86%,
86%, and 88%, respectively, of total net sales. The balance of the Company’s net sales for the
aforementioned periods was attributable to its investment castings operations. Further information
regarding industry segment data is incorporated by reference to pages 20 and 21 of the Company’s
2005 Annual Report to Stockholders.
Firearms Products
The Company’s firearms, which are sold under the “Ruger” name and trademark, consist of
single-shot, autoloading, bolt-action, and lever action rifles in a broad range of hunting
calibers; shotguns in three gauges; .22 caliber rimfire autoloading pistols and centerfire
autoloading pistols in various calibers; and single-action, double-action, and muzzleloading
revolvers in various calibers. The Company manufactures a wide range of high quality products and
does not manufacture inexpensive concealable firearms, sometimes known as “Saturday Night
Specials,” nor does it commercially-sell any firearm included on the list of “assault weapons”
which was part of anti-crime legislation enacted by Congress in 1994 and since expired.
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ITEM 1—BUSINESS (continued)
Many of the firearms introduced by the Company over the years have become “classics” which have
retained their popularity for decades and are sought by collectors. These firearms include the
single-action Single-Six, Blackhawk, and Bearcat revolvers; the double-action Redhawk revolvers;
the 10/22 and Mini-14 autoloading, M77 bolt-action, and Number One Single-Shot rifles; and the Red
Label over-and-under shotguns. The Company has supplemented these “classics” with the introduction
of new models and variations of existing models, including a line of centerfire autoloading pistols
introduced in 1987, three lines of double action revolvers, the SP101, GP100, and Super Redhawk
models, as well as a line of lever action rifles introduced in 1997.
The Company’s ongoing commitment to the development and introduction of new models of firearms in
appropriate product categories continues to generate new offerings. In 2006, the Company plans to
introduce several new offerings, including the Ruger 50th Anniversary .44 Magnum Flattop
New Model Blackhawk single-action revolver, a compact 10/22 autoloading rifle, a stainless steel
M77 Mark II Frontier bolt action rifle, and a 22/45 Hunter centerfire pistol.
The Company presently manufactures 33 different types of firearm products in four industry
categories: rifles, shotguns, pistols, and revolvers. Most are available in several models based
upon caliber, finish, barrel length, and other features.
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. The Company presently manufactures fourteen
different types of rifles: the M77 Mark II, the M77 Mark II Magnum, the 77/17, the 77/22, the
77/44, the 10/22, the Model 96/22, the Model 96/44, the Model 96/17, the Mini-14 Ranch Rifle, the
Mini Thirty Ranch Rifle, the Ruger Carbine, the Deerfield Carbine (99/44), and the No. 1
Single-Shot. Sales of rifles by the Company accounted for approximately $58.0 million, $61.1
million, and $61.3 million, of revenues for the years 2005, 2004 and 2003, respectively.
Shotguns—A shotgun is a long gun with a smooth barrel interior which fires lead or steel pellets.
The Company presently manufactures two different types of shotguns: the Red Label over-and-under
shotgun available in 12, 20, and 28 gauge and the Gold Label side-by-side shotgun in 12 gauge.
Most of the Red Label models are available in special Sporting Clays, English Field, All-Weather
and engraved versions. Sales of shotguns by the Company accounted for approximately $9.7 million,
$6.8 million, and $5.1 million of revenues for the years 2005, 2004 and 2003, respectively.
Pistols—A pistol is a handgun in which the ammunition chamber is an integral part of the barrel and
which is fed ammunition from a magazine contained in the grip. The Company presently manufactures
three different types of pistols: the Ruger Mark III .22 caliber in Standard, Competition, and
Target models, the Ruger 22/45, and the P-Series centerfire autoloading pistols in various
calibers, configurations, and finishes. Sales of pistols by the Company accounted for
approximately $32.5 million, $24.8 million, and $26.4 million of revenues for the years 2005, 2004
and 2003, 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. The Company presently manufactures twelve different types of single-action
revolvers in a variety of calibers, configurations, and finishes: the New Model Single-Six, the New
Model .32 Magnum Super Single-Six, the New Model Blackhawk, the New Model Super Blackhawk, the
Vaquero, the Ruger Bisley, the Old Army Cap & Ball, the New Bearcat, the Bisley Vaquero,
Single-Six, Super Blackhawk, and Bisley Hunter revolvers. The Company presently manufactures four
different types of double-
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ITEM 1—BUSINESS (continued)
action revolvers: the SP101, the GP100, the Redhawk, and the Super Redhawk. Sales of revolvers by
the Company accounted for approximately $27.5 million, $27.2 million, and $33.8 million of revenues
for the years 2005, 2004, and 2003, respectively.
The Company also manufactures and sells accessories and replacement parts for its firearms. These
sales accounted for approximately $3.9 million, $4.3 million, and $4.0 million of revenues for the
years 2005, 2004 and 2003, respectively.
Investment Casting Products
The Company is also engaged in the manufacture of titanium and ferrous investment castings for a
wide variety of markets including sporting goods and commercial and military use. The investment
castings products currently manufactured by the Company consist of titanium, chrome-molybdenum,
stainless steel, nickel, and cobalt alloys. The Company produces steel marine propellers, titanium
hand tools, and various other titanium and steel castings for a number of customers. The Company
continues to evaluate the viability and profitability of the commercial castings market.
The Ruger Investment Casting Division of the Company located in Prescott, Arizona (“RIC-Prescott
Division”) engineers and produces titanium and ferrous castings. The Ruger Investment Casting
Division of the Company located in Newport, New Hampshire (“RIC-Newport Division”) (formerly known
as Pine Tree Castings) engineers and produces ferrous castings for a wide range of commercial
customers.
Net sales attributable to the Company’s investment casting operations (excluding intercompany
transactions) accounted for approximately $21.9 million, $20.7 million, and $17.4 million, or 14%,
14%, and 12% of the Company’s total net sales for 2005, 2004, and 2003, respectively.
Manufacturing
Firearms—The Company produces most rifles, and all shotguns and revolvers at the Newport, New
Hampshire facility. Some rifles and all pistols are produced at the Prescott, Arizona facility.
Many of the basic metal component parts of the firearms manufactured by the Company are produced by
the Company’s castings facilities through a process known as precision investment casting. See
“Manufacturing-Investment Castings” for a description of the investment casting process. The
Company initiated the use of this process in the production of component parts for firearms in
1953. The Company believes that the investment casting process provides greater design flexibility
and results in component parts which are generally close to their ultimate shape and, therefore,
require less machining. Through the use of investment castings, the Company is able to produce
durable and less costly component parts for its firearms.
Third parties supply the Company with various raw materials for its firearms, such as fabricated
steel components, walnut, birch, beech, maple and laminated lumber for rifle and shotgun stocks,
various synthetic products and other component parts. These raw materials and component parts are
readily available from multiple sources at competitive prices. However, if market conditions
result in a significant and prolonged increase of certain prices, the Company believes that it
could have a material long-term adverse effect on the Company and may have a material impact on the
Company’s financial results for a particular period. One component part, an aluminum casting used
in the manufacture of certain models of pistols, is purchased from only one third party and may not
be readily available from other sources immediately.
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ITEM 1—BUSINESS (continued)
All assembly, inspection, and testing of firearms manufactured by the Company is 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—The Company manufactures all of its precision investment castings products at
one of its two operating investment casting foundries. 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.
All of the titanium investment castings and some of the ferrous investment castings products are
manufactured by the Company’s RIC-Prescott Division.
After a review of the castings business in the fourth quarter of 2002, it was determined that a
portion of the casting production capacity at the RIC-Prescott Division would not be utilized in
the short-term. Therefore, in 2002 a $3.3 million pre-tax charge to earnings was recorded to
recognize an impairment loss on certain of the investment castings segment assets.
The Company’s RIC-Newport Division manufactures ferrous investment castings.
In 2004, the Company relocated two titanium furnaces from RIC-Prescott Division to a currently
non-manufacturing facility in New Hampshire, with the plan of establishing an additional foundry in
2005. After a review of the castings business in the fourth quarter of 2005, it was determined
that this relocated casting production capacity will not be utilized in the short-term. Therefore,
a $0.3 million pre-tax charge to earnings was recorded to recognize an impairment loss on certain
of the investment castings segment assets. The Company continues to evaluate the viability and
profitability of the commercial castings market.
Raw materials including wax, ceramic material, and metal alloys necessary for the production of
investment cast products are supplied to the Company through third parties. The Company believes
that these raw materials are readily available from multiple sources at competitive prices.
However, if market conditions result in a significant and prolonged increase of certain prices, the
Company believes that it could have a material long-term adverse effect on the Company and may have
a material impact on the Company’s financial results for a particular period.
Marketing and Distribution
Firearms—The Company’s firearms are primarily marketed through a network of selected licensed
independent wholesale distributors who purchase the products directly from the Company. They
resell to Federally-licensed 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, law enforcement and other governmental
organizations, and gun collectors. Each distributor carries the entire line of firearms
manufactured by the Company for the commercial market. Currently, 15 distributors service the
domestic commercial market, with an additional 12 distributors servicing the domestic law
enforcement market and two distributors servicing the Canadian market. Four of the Company’s
distributors service both the domestic commercial market and the domestic law enforcement market.
AcuSport Corporation accounted for approximately 13%, 12%, and 19% of net firearms sales and 11%,
10%, and 17% of consolidated net sales in 2005, 2004, and 2003, respectively. Jerry’s Sport Center
accounted for approximately 12%, 13%, and 12% of the Company’s net sales of firearms and 10%, 11%
and 11% of consolidated net sales in 2005, 2004, and 2003, respectively. Sports
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ITEM 1—BUSINESS (continued)
South Corporation accounted for approximately 16% and 13% of net firearms sales in 2005 and 2004,
respectively, and 14% and 11% of consolidated net sales in 2005 and 2004, respectively. The
Company employs seven employees and one independent contractor who service these distributors and
call on dealers and law enforcement agencies. Because the ultimate demand for the Company’s
firearms comes from end-users, rather than from the Company’s distributors, the Company believes
that the loss of any distributor would not have a material long-term adverse effect on the Company,
but may have a material impact 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 less than 10% of the Company’s consolidated net sales for each of
the past three fiscal years. No material portion of the Company’s business is subject to
renegotiation of profits or termination of contracts at the election of a government purchaser.
In the fourth quarter of 2005, the Company received annual orders from its distributors for the
2006 marketing year. As of March 1, 2006, unfilled firearms orders were approximately $107 million
as compared to approximately $102 million at March 1, 2005.
Until November 30, 2004, the Company followed a common industry practice of offering a “dating
plan” to its firearms customers on selected products, which allowed the customer to buy the
products commencing in December, the start of the Company’s marketing year, and pay for them on
extended terms. Discounts were offered for early payment. The dating plan provided a revolving
payment plan under which payments for all shipments made during the period December through
February were made by April 30. Shipments made in subsequent months were paid for within a maximum
of 120 days. On December 1, 2004, the Company modified the payment terms on these selected
products whereby payment is now due 45 days after shipment. Discounts were offered for early
payment. On December 1, 2005, the Company effectively discontinued the dating plan. 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 fiscal year.
Investment Castings—The investment casting segment’s principal markets are commercial, sporting
goods, and military. Sales are made directly to customers or through manufacturers’
representatives. The Company produces steel marine propellers, steel and titanium hand tools, and
various other products for a number of customers. The investment castings segment provides
castings for the Company’s firearms segment. The Company continues to evaluate the viability and
profitability of the commercial castings market.
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, several foreign competitors manufacture products in all four industry
categories (rifles, shotguns, pistols, and revolvers). Some of these competitors are subsidiaries
of 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 Company
is the only domestic manufacturer that produces firearms in all four industry product categories.
The principal methods of competition in the industry are product innovation, quality, and price.
The Company believes that it can compete effectively with all of its present competitors based upon
the high quality, reliability, and performance of its products, and the competitiveness of its
pricing.
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ITEM 1—BUSINESS (continued)
Investment Castings—There are a large number of investment castings manufacturers, both domestic
and foreign, with which the Company competes. Competition varies based on the type of investment
castings products (titanium or steel) and the end-use of the product (commercial, sporting goods,
or military). 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. The Company believes that it can compete effectively
with its present domestic competitors. However, it is unknown at this time if the Company can
compete with foreign competitors in the long-term.
After a review of the castings business the Company recorded a $3.3 million pre-tax charge to
earnings in the fourth quarter of 2002 to recognize an impairment loss on certain of the investment
castings segment assets due to anticipated underutilization of casting production capacity.
In 2004, the Company relocated two titanium furnaces from its RIC-Prescott Division to a
non-manufacturing facility in New Hampshire, with the plan of establishing an additional foundry in
2005. After a review of the castings business in the fourth quarter of 2005, it was determined
that this relocated casting production capacity will not be utilized in the short-term. Therefore,
a $0.3 million pre-tax charge to earnings was recorded to recognize an impairment loss on certain
of the investment castings segment assets. The Company continues to evaluate the viability and
profitability of the commercial castings market.
Employees
As of March 1, 2006, the Company employed 1,230 full-time employees of which approximately 57% had
at least ten years of service with the Company.
None of the Company’s employees are subject to a collective bargaining agreement. The Company has
never experienced a strike during its entire 56-year history and believes its employee relations
are satisfactory.
Research and Development
In 2005, 2004, and 2003, the Company spent approximately $0.8 million, $0.9 million, and $0.9
million, respectively, on research activities relating to the development of new products and the
improvement of existing products. As of February 28, 2006, the Company had approximately 31
employees engaged in research and development activities as part of their responsibilities.
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 valuable are
developed or marketed by the Company. However, none of these patents and trademarks are considered
to be basic to any important product or manufacturing process of the Company and, although the
Company deems its patents and trademarks to be of value, it does not consider its business
materially dependent on patent or trademark protection.
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ITEM 1—BUSINESS (continued)
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 occasional 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 the outcome of any
environmental proceedings and orders will not have a material effect on its business.
Executive Officers of the Company
Set forth below are the names, ages, and positions of the executive officers of the Company.
Officers serve at the pleasure of the Board of Directors of the Company.
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Position With Company |
William B. Ruger, Jr.
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Chairman of the Board of Directors, Chief
Executive Officer |
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Stephen
L. Sanetti
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Vice Chairman of the Board of Directors,
President, Chief Operating Officer and
General Counsel |
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Leslie M. Gasper
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Corporate Secretary |
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Thomas
A. Dineen
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Treasurer and Chief Financial Officer |
William B. Ruger, Jr. became Chairman of the Board and Chief Executive Officer on October 24, 2000.
Mr. Ruger had served as President and Chief Operating Officer since March 1, 1998, Vice Chairman
and Senior Executive Officer of the Company since 1995 and Director of the Company since 1970.
Previously, he served as President of the Company from 1991 to 1995 and as Senior Vice President of
the Company from 1970 to 1990. Mr. Ruger resigned as Chairman of the Board effective February 13,
2006 and retired as Chief Executive Officer effective February 28, 2006.
Stephen L. Sanetti became President and Chief Operating Officer on May 6, 2003. Mr. Sanetti has
served as General Counsel since 1980. Prior to May 6, 2003, Mr. Sanetti had been Vice Chairman and
Senior Executive Vice President since October 24, 2000. Mr. Sanetti has been a Director since
March 1, 1998. Prior to October 24, 2000, he had been Vice President, General Counsel of the
Company since 1993.
Leslie M. Gasper has been Secretary of the Company since 1994. Prior to this, she was the
Administrator of the Company’s pension plans, a position she held for more than five years prior
thereto.
Thomas A. Dineen became Treasurer and Chief Financial Officer on May 6, 2003. Mr. Dineen had been
Assistant Controller since 2001. Prior to that, Mr. Dineen had served as Manager, Corporate
Accounting since 1997.
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ITEM 1—BUSINESS (continued)
Where You Can Find More Information
The Company is a reporting company and is therefore subject to the informational requirements of
the Securities and 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 other information with the Securities and Exchange Commission (the “SEC”).
The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at
450 Fifth Street, NW, Washington, DC 20549. Please call the SEC at (800) SEC-0330 for further
information on the Public Reference Room. 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 Board Governance
Guidelines; the charters of the Audit, Compensation, and Nominating and Corporate Governance
committees; and the Code of Business Conduct and Ethics may also be found under the “Stockholder
Relations” section of the Company’s Internet site at www.ruger.com. A copy of the foregoing
corporate governance materials are available upon written request of the Corporate Secretary at
Sturm, Ruger & Company, Inc., Lacey Place, Southport, Connecticut 06890.
ITEM 1A—RISK FACTORS
In evaluating the Company’s business, the following risk factors, as well as other information in
this report, should be carefully considered.
Regulation of Firearms
The purchase of firearms is subject to federal, state and local governmental regulation. The basic
federal laws are the National Firearms Act, the Federal Firearms Act, and the Gun Control Act of
1968. These federal laws generally prohibit the private ownership of fully automatic weapons and
place 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.
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ITEM 1A—RISK FACTORS (continued)
On October 26, 2005, president Bush signed the Protection of Lawful Commerce in Arms Act. The Act
required dismissal of suits against manufacturers arising out of the lawful sale of their products
for harm resulting from the criminal or unlawful misuse of a firearm by a third party. The Company
is pursuing dismissal of each action involving such claims.
From time to time, congressional committees review a number of proposed bills relating to the
regulation of firearms. The proposed bills generally seek either to ban the sale, and in some
cases the ownership, of so-called “assault weapons” or to impose a mandatory waiting period prior
to the purchase of handguns.
Several of these proposed federal bills identify “assault weapons” by brand and model name while
others attempt to formulate a generic definition of “assault weapons.” However, no current state
law and none of the bills currently under review by Congress includes any firearms currently
produced or sold by the Company.
Many states currently have mandatory waiting period laws in effect similar to the proposed federal
handgun legislation described above. The Company believes that, because its customers are
generally sportsmen, hunters and gun collectors, legislation imposing a waiting period prior to the
purchase of a handgun does not have a significant effect on the Company’s sales of handguns.
However, the Company remains strongly opposed to laws which would unduly restrict the rights of
law-abiding citizens to acquire firearms for legitimate purposes.
The Company believes that the private ownership of firearms is guaranteed by the Second Amendment
to the United States Constitution and that the widespread public 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.
Legal Proceedings
As of December 31, 2005, the Company was a defendant in 6 lawsuits involving product liability
claims which allege defective product design, strict liability, breach of warranty, public
nuisance, negligent distribution, and other legal theories. In many of these cases, punitive
damages, as well as compensatory damages, are demanded. Aggregate claimed amounts presently exceed
product liability accruals and, if applicable, insurance coverage. Management believes that, in
every case, the allegations of defective product design are unfounded, and that the accident and
any results therefrom were due to the negligence or misuse of the firearm by the plaintiff or a
third party or other claimant, and that there should be no recovery against the Company. While it
is difficult to forecast the outcome of litigation, in the opinion of management, after
consultation with counsel, the outcome of this litigation will not have material adverse effect on
the financial condition of the Company. Although the Company goes to great lengths to produce
superior products, because of the nature of firearms products, the Company anticipates that it, as
well as other firearms manufacturers, may continue to be involved in product liability litigation
in the future.
11
ITEM 1A—RISK FACTORS (continued)
Environmental
The Company is subject to numerous federal, state and local laws and governmental regulations and
related state laws. These laws generally relate to potential obligations to remove or mitigate the
environmental effects of the disposal or release of certain pollutants at the Company’s
manufacturing facilities and at third-party or formerly owned sites at which contaminants generated
by the Company may be located. This requires the Company to make capital and other expenses.
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. In an effort to comply with federal and state laws and regulations, the
Company has programs in place that monitor compliance with various environmental regulations.
However, in the normal course of its 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.
However, the Company cannot assure that the outcome of any environmental proceedings and orders
will not have a material adverse effect on the business.
Reliance on Two Facilities
The Newport, New Hampshire and Prescott, Arizona facilities are critical to the Company’s success.
These facilities house the Company’s principal production, research, development, engineering,
design, shipping and sales. Any event that causes a disruption of the operation of these facilities
for even a relatively short period of time might have a material adverse affect on the Company’s
ability to produce and ship products and to provide service to its customers.
ITEM 1B—UNRESOLVED STAFF COMMENTS
None
ITEM 2—PROPERTIES
The Company’s manufacturing operations are carried out at two 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/Castings |
12
ITEM 2—PROPERTIES (continued)
Each facility contains enclosed ranges for testing firearms and also contains modern tool room
facilities. The lease of the Prescott facility provides for rental payments which approximate real
property taxes.
The Company has other materially important facilities that were not used in its manufacturing
operations in 2005:
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Approximate |
|
|
|
|
| |
|
Aggregate Usable |
|
|
|
|
| |
|
Square Feet |
|
Status |
|
Segment |
Southport, Connecticut |
|
|
25,000 |
|
|
Owned |
|
Corporate |
Newport, New Hampshire |
|
|
300,000 |
|
|
Owned |
|
Unused |
In 2004, the Company relocated two titanium furnaces from RIC-Prescott Division to the currently
non-manufacturing facility in New Hampshire, with the plan of establishing an additional foundry in
2005. After a review of the castings business in the fourth quarter of 2005, it was determined
that this relocated casting production capacity will not be utilized in the short-term. Therefore,
a $0.3 million pre-tax charge to earnings was recorded to recognize an impairment loss on certain
of the investment castings segment assets. The Company continues to evaluate the viability and
profitability of the commercial castings market.
In the fourth quarter of 2005, the Company relocated its firearms shipping department into a
portion of the 300,000 square foot facility in Newport, New Hampshire.
The Company also has other real estate holdings that are not used in its manufacturing operations
and are not materially important to the business of the Company. There are no mortgages or any
other major encumbrance on any of the real estate owned by the Company.
13
ITEM 3—LEGAL PROCEEDINGS
As of December 31, 2005, the Company is a defendant in approximately 6 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 |
| |
| |
(ii) |
|
those brought by cities, municipalities, counties, 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
14
ITEM 3—LEGAL PROCEEDINGS (continued)
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, twenty-one have been
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; Newark — Superior Court of New
Jersey Law Division for Essex County dismissed the case with prejudice; City of Camden —
dismissed on July 7, 2003, not reopened; Jersey City — voluntarily dismissed and not
re-filed; St. Louis — Missouri Supreme Court denied plaintiffs’ motion to appeal Missouri
Appellate Court’s affirmance of dismissal; Chicago — Illinois Supreme Court denied
plaintiffs’ petition for rehearing; and Los Angeles City, Los Angeles County, and
San Francisco — Appellate Court affirmed summary judgment in favor of defendants, no
further appeal. On September 26, 2005, the Cleveland municipal lawsuit was dismissed due
to Cleveland’s failure to prosecute the case.
The dismissal of the Washington, D.C. municipal 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 October 19, 2004, the D.C. Court of Appeals vacated the court’s judgment, which
dismissed the city’s claim against firearms manufacturers but let stand certain individuals’ claims
against the manufacturers of firearms allegedly used in criminal assaults against plaintiffs under
the Washington, D.C. “Strict Liability Act,” subject to proof of causation. The appellate court in
an en banc hearing unanimously dismissed all negligence and public nuisance claims, but let stand
individual claims based upon a Washington, D.C. act imposing “strict liability” for manufacturers
of “machine guns.” Based on present information, none of the Company’s products has been
identified with any of the criminal assaults which form the basis of the individual claims. The
writ of certiorari to the United States Supreme Court regarding the constitutionality of the
Washington, D.C. act was denied and the case has been remanded to the trial court for further
proceedings. The defendants subsequently have moved to dismiss the case based upon the Protection
of Lawful Commerce in Arms Act.
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. Gary is scheduled to begin trial in 2009. The
defendants filed a motion to dismiss pursuant to the Protection of Lawful Commerce in Arms Act.
The motion is pending.
15
ITEM 3—LEGAL PROCEEDINGS (continued)
In the previously reported NewYork City municipal case, the defendants moved to dismiss the
suit pursuant to the Protection of Lawful Commerce in Arms Act. The trial judge found the Act to
be constitutional but denied the defendants’ motion to dismiss the case, stating that the Act was
not applicable to the suit. The defendants were given leave to appeal and in fact have appealed
the decision to the U.S. Court of Appeals for the Second Circuit.
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 were filed, but plaintiffs withdrew their appeal. On
August 3, 2004, the United States Court of Appeals for the Second Circuit granted the NAACP’s
motion to dismiss the defendants’ appeal of Judge Weinstein’s order denying defendants’ motion to
strike his dicta made in his order dismissing the NAACP’s case, and the defendants’ motion for
summary disposition was denied as moot. The ruling of the Second Circuit effectively confirmed the
decision in favor of defendants and brought this matter to a conclusion.
Legislation has been passed in approximately 34 states precluding suits of the type brought by the
municipalities mentioned above. On the Federal level, the “Protection of Lawful Commerce in Arms
Act” was signed by President Bush on October 26, 2005. The Act requires dismissal of suits against
manufacturers arising out of the lawful sale of their products for harm resulting from the criminal
or unlawful misuse of a firearm by a third party. The Company is pursuing dismissal of each action
involving such claims.
The Company’s 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.
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, 2000, coverage is provided on an annual basis for 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.
The Company has reported all cases instituted against it through September 30, 2005 and the results
of those cases, where terminated, to the S.E.C. on its previous Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, to which reference is hereby made.
16
ITEM 3—LEGAL PROCEEDINGS (continued)
For a description of all pending lawsuits against the Company through September 30, 2005, reference
is made to the discussion under the caption “Item 1. LEGAL PROCEEDINGS” of the Company’s Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1996, June 30, and September
30, 1999, March 31 and September 30, 2000, and September 30, 2005.
The nature of the legal proceedings against the Company is discussed at Note 6 to this Annual
Report on Form 10-K, which is incorporated herein by reference.
One case was formally instituted against the Company during the three months ended December 31,
2005, which involved significant demands for compensatory and/or punitive damages and in which the
Company has been served with process.
Sisemore v. Company (AR) in the United States District Court for the Western District of
Arkansas. The complaint alleges that the plaintiff was injured when he closed the loading gate of
his truck and his Ruger “old model” single action revolver discharged. Compensatory damages,
punitive damages, attorney’s fees, and costs are demanded by plaintiff.
During the three months ended December 31, 2005, one previously reported case was settled.
| |
|
|
|
|
|
| Case Name |
|
Jurisdiction |
Farwick |
|
Oregon |
The settlement amount was within the limits of its self-insurance coverage or self-insurance
retention.
In the previously reported Washington, D.C. municipal case, the appellate court in an en
banc hearing unanimously dismissed all negligence and public nuisance claims. The court let stand
individual claims based upon a Washington, D.C. act imposing “strict liability” for manufacturers
of “machine guns.” Based on present information, none of the Company’s products has been
identified with any of the criminal assaults which form the basis of the individual claims. The
defendants, including the Company, filed a petition for a writ of certiorari seeking an appeal to
the United States Supreme Court challenging the constitutionality of the Washington, D.C. act. The
writ was denied and the case has been remanded to the trial court for further proceedings. The
defendants subsequently have moved to dismiss the case based upon the Protection of Lawful Commerce
in Arms Act.
In the previously reported New York City municipal case, the defendants moved to dismiss
the suit pursuant to the Protection of Lawful Commerce in Arms Act. The trial judge found the Act
to be constitutional but denied the defendants’ motion to dismiss the case, stating that the Act
was not applicable to the suit. The defendants were given leave to appeal and in fact have
appealed the decision to the U.S. Court of Appeals for the Second Circuit.
In the previously reported Gary municipal case, the defendants filed a motion to dismiss
the case pursuant to the Protection of Lawful Commerce in Arms Act. The motion to dismiss is
pending.
17
ITEM 4—SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5—MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The information on the Company’s common stock market prices, dividends, principal exchange on which
the stock is traded and the number of stockholders of record required for this Item is incorporated
by reference from page 25 of the Company’s 2005 Annual Report to Stockholders.
ITEM 6—SELECTED FINANCIAL DATA
The selected financial data for fiscal years 2001 through 2005 required for this Item is
incorporated by reference from page 5 of the Company’s 2005 Annual Report to Stockholders.
ITEM 7—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s discussion and analysis of financial condition and results of operations required for
this Item is incorporated by reference from pages 6 through 11 of the Company’s 2005 Annual Report
to Stockholders.
ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changing interest rates on its investments, which consists 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 ten percent change in market interest rates over the next year would not materially
impact the Company’s earnings or cash flow. A hypothetical ten percent change in market interest
rates would not have a material effect on the fair value of the Company’s investments.
18
ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
| (a) |
|
Financial Statements |
| |
| |
|
The balance sheets of Sturm, Ruger & Company, Inc. as of December 31, 2005 and 2004, and the
related statements of income, stockholders’ equity and cash flows for each of the years in the
three year period ended December 31, 2005, and the notes to the financial statements and the
reports of McGladrey & Pullen, LLP dated May 1, 2006, independent registered public accounting
firm, are incorporated by reference from pages 12 through 22 of the Company’s 2005 Annual
Report to Stockholders. |
| |
| |
|
The report of KPMG LLP dated March 8, 2005, except as to note 4 which is as of March 31, 2006,
independent registered public accounting firm, is included as Exhibit 23.3. |
| |
| (b) |
|
Supplementary Data |
| |
| |
|
Quarterly results of operations for fiscal years 2005 and 2004 are incorporated by reference
from page 21 of the Company’s 2005 Annual Report to Stockholders. |
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, 2005.
Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded
that as of December 31, 2005, our controls and procedures over financial reporting were effective
except for controls and procedures over the calculation of the LIFO index, which were not effective
because of the material weaknesses discussed below under “Management’s Report on Internal Control
over Financial Reporting.”
In light of the material weaknesses described below, the Company performed a detailed review of the
LIFO reserve calculation as of December 31, 2005 to ensure that inventories and cost of sales in
the financial statements were properly stated. Accordingly, management believes the financial
statements included in this report fairly present, in all material respects, our financial
condition, results of operations and cash flows for the periods presented.
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
19
ITEM 9A—CONTROLS AND PROCEDURES (continued)
of 1934. The Company’s internal control over the calculation of the LIFO index is a process
designed to provide reasonable assurance regarding the propriety of the LIFO inventory reserve in
accordance with U.S. generally accepted accounting principles.
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, 2005. This evaluation was performed based on the framework in “Internal Control —
Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”).
A material weakness is a control deficiency, or combination of control deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.
As of December 31, 2005, the Company did not maintain sufficient controls over the calculation of
the LIFO index. This control deficiency resulted in an audit adjustment to the LIFO reserve and
cost of sales, which is reflected in the financial statements for the year ended December 31, 2005.
Additionally, this control deficiency resulted in the restatement of the financial statements as of
and for the year ended December 31, 2004. Also, this control deficiency could result in a
misstatement of the aforementioned account balances or disclosures which could cause a material
misstatement of annual or interim financial statements that would not be prevented or detected.
Accordingly, management has determined that this control deficiency constitutes a material
weakness.
Because of this material weakness, management has concluded that the Company did not maintain
effective internal control over financial reporting as of December 31, 2005, based on criteria
established in “Internal Control — Integrated Framework” issued by the COSO.
Management’s assessment of the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2005 has been audited by McGladrey & Pullen, LLP, an independent
registered public accounting firm, as stated in their report which appears immediately following
the Financial Statements in this Annual Report on Form 10-K.
Plan for Remediation of Material Weaknesses
The Company has taken steps towards remediation of the material weakness described above.
Specifically, the Company has implemented additional procedures related to the review of data used
in the LIFO index calculation.
20
Changes in Internal Control over Financial Reporting
Except as noted above, 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.
ITEM 9B—OTHER INFORMATION
None.
PART III
ITEM 10—DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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 those sections of the Company’s Proxy Statement relating to
the Annual Meeting of Stockholders to be held May 24, 2006 under the captions “PROPOSAL NO. 1:
ELECTION OF DIRECTORS” and “THE BOARD OF DIRECTORS AND ITS COMMITTEES” on pages 2 through 10
thereof.
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 section of the Company’s Proxy Statement relating to the Annual
Meeting of Stockholders to be held May 24, 2006 under the caption “SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE” on page 25 thereof.
ITEM 11—EXECUTIVE COMPENSATION
Information concerning director and executive compensation required by this Item is incorporated by
reference from those sections of the Company’s Proxy Statement relating to the Annual Meeting of
Stockholders to be held May 24, 2006 under the captions “THE BOARD OF DIRECTORS AND ITS
COMMITTEES”, “COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION,” “COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION,” “EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE,”
“OPTION/SAR GRANTS IN LAST FISCAL YEAR,” “AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES,” “PENSION PLAN TABLE,” “SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE,” and “COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN on pages 5 through 20 thereof.
21
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 those sections
of the Company’s Proxy Statement relating to the Annual Meeting of Stockholders to be held May 24,
2006 under the captions “PROPOSAL NO. 1: ELECTION OF DIRECTORS,” “PRINCIPAL STOCKHOLDERS,” and
“SECURITY OWNERSHIP OF MANAGEMENT” on pages 2 through 4 and 21 through 24 thereof.
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, 2005:
Equity Compensation Plan Information
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Number of securities |
| |
|
|
|
|
|
|
|
|
|
remaining available for |
| |
|
Number of securities to |
|
|
|
|
|
future issuance under |
| |
|
be issued upon |
|
Weighted-average |
|
equity compensation |
| |
|
exercise of |
|
exercise price of |
|
plans (excluding |
| |
|
outstanding options, |
|
outstanding options, |
|
securities reflected in |
| |
|
warrants and rights |
|
warrants and rights |
|
column (a)) |
| Plan category |
|
(a) |
|
(b) |
|
(c) |
Equity compensation
plans approved by
security holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1998 Stock Incentive Plan |
|
|
880,000 |
|
|
$11.7130 per share |
|
|
1,120,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001 Stock Option Plan
for Non-Employee
Directors |
|
|
140,000 |
|
|
$10.1657 per share |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation
plans not approved by
security holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,020,000 |
|
|
$11.5006 per share |
|
|
1,180,000 |
|
ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerting certain relationships and related transactions required by this Item is
incorporated by reference from those sections of the Company’s Proxy Statement relating to the
Annual Meeting of Stockholders to be held May 24, 2006 under the captions “THE BOARD OF DIRECTORS
AND ITS COMMITTEES” and “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” on pages 5 through 10 and
25 thereof.
22
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 section of the Company’s Proxy Statement relating to the Annual
Meeting of the Stockholders to be held May 24, 2006 under the caption “PROPOSAL NO. 2: APPROVAL OF
INDEPENDENT AUDITORS” on pages 27 and 28 thereof.
PART IV
ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
| (a) |
|
The following documents are filed as part of this Annual Report on Form 10-K: |
| |
(1) |
|
Financial Statements: |
| |
| |
|
|
Balance Sheets—December 31, 2005 and 2004 |
| |
| |
|
|
Statements of Income—Years ended December 31, 2005, 2004, and 2003 |
| |
| |
|
|
Statements of Stockholders’ Equity—Years ended December 31, 2005, 2004, and
2003 |
| |
| |
|
|
Statements of Cash Flows—Years ended December 31, 2005, 2004, and 2003 |
| |
| |
|
|
Notes to Financial Statements |
| |
| |
|
|
Independent Registered Public Accounting Firm’s Report – McGladrey & Pullen,
LLP |
This information is incorporated by reference from the Company’s 2005 Annual Report to
Stockholders as noted in Item 8.
| |
(2) |
|
Financial Statement Schedules: |
| |
| |
|
|
Schedule II-Valuation and Qualifying Accounts |
| |
|
|
|
|
|
|
Exhibit 3.1
|
|
Certificate of Incorporation of the Company, as amended
(Incorporated by reference to Exhibits 4.1 and 4.2 to the
Form S-3 Registration Statement previously filed by the
Company File No. 33-62702). |
|
|
|
|
|
|
|
Exhibit 3.2
|
|
Bylaws of the Company, as amended. |
|
|
|
|
|
|
|
Exhibit 10.1
|
|
Sturm, Ruger & Company, Inc. 1986 Stock Bonus Plan
(Incorporated by reference to Exhibit 10.1 to the Company’s
Annual Report on Form 10-K for the year ended December 31,
1988, as amended by Form 8 filed March 27, 1990, SEC File No.
1-10435). |
23
ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (continued)
| |
|
|
|
|
|
|
Exhibit 10.2
|
|
Amendment to Sturm, Ruger & Company, Inc. 1986 Stock Bonus
Plan (Incorporated by reference to Exhibit 10.3 to the
Company’s Annual Report on Form 10-K for the year ended
December 31, 1991, SEC File No. 1-10435). |
|
|
|
|
|
|
|
Exhibit 10.3
|
|
Sturm, Ruger & Company, Inc. Supplemental Executive Profit
Sharing Retirement Plan (Incorporated by reference to Exhibit
10.4 to the Company’s Annual Report on Form 10-K for the year
ended December 31, 1991, SEC File No. 1-10435). |
|
|
|
|
|
|
|
Exhibit 10.4
|
|
Agreement and Assignment of Lease dated September 30, 1987 by
and between Emerson Electric Co. and Sturm, Ruger & Company,
Inc. (Incorporated by reference to Exhibit 10.2 to the
Company’s Annual Report on Form 10-K for the year ended
December 31, 1991, SEC File No. 1-10435). |
|
|
|
|
|
|
|
Exhibit 10.5
|
|
Sturm, Ruger & Company, Inc. Supplemental Executive
Retirement Plan (Incorporated by reference to Exhibit 10.5 to
the Company’s Annual Report on Form 10-K for the year ended
December 31, 1995, SEC File No. 1-10435). |
|
|
|
|
|
|
|
Exhibit 10.6
|
|
[Intentionally omitted.] |
|
|
|
|
|
|
|
Exhibit 10.7
|
|
Sturm, Ruger & Company, Inc. 1998 Stock Incentive Plan.
(Incorporated by reference to Exhibit 10.7 to the Company’s
Annual Report on Form 10-K for the year ended December 31,
1998, SEC File No. 1-10435). |
|
|
|
|
|
|
|
Exhibit 10.8
|
|
Sturm, Ruger & Company, Inc. 2001 Stock Option Plan for
Non-Employee Directors (Incorporated by reference to Exhibit
4 to the Form S-8 Registration Statement filed by the Company
File No. 33-53234). |
|
|
|
|
|
|
|
Exhibit 13.1
|
|
Restated Annual Report to Stockholders of the Company for the
year ended December 31, 2004. Except for those portions of
such Annual Report to Stockholders expressly incorporated by
reference into the Report, such Annual Report to Stockholders
is furnished solely for the information of the Securities and
Exchange Commission and shall not be deemed a “filed”
document with the SEC. |
|
|
|
|
|
|
|
Exhibit 23.1
|
|
Consent and Report of Independent Registered Public
Accounting Firm. |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 23.2
|
|
Consent of Independent Registered Public Accounting Firm |
|
|
|
|
|
|
|
Exhibit 23.3
|
|
Report of Independent Registered Public Accounting Firm. |
|
|
|
|
|
|
|
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. |
24
ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (continued)
| |
|
|
|
|
|
|
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
Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
Exhibit 99.1
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on Form
10-Q of the Company for the quarter ended March 31, 1995, SEC
File No. 1-10435, incorporated by reference in Item 3 LEGAL
PROCEEDINGS. |
|
|
|
|
|
|
|
Exhibit 99.2
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on Form
10-Q of the Company for the quarter ended June 30, 1996, SEC
File No. 1-10435, incorporated by reference in Item 3 LEGAL
PROCEEDINGS. |
|
|
|
|
|
|
|
Exhibit 99.3
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Reports on Form
10-Q of the Company for the quarters ended June 30, and
September 30, 1999, SEC File No. 1-10435, incorporated by
reference in Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
|
|
|
Exhibit 99.4
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on Form
10-Q of the Company for the quarters ended March 31, and
September 30, 2000, SEC File No. 1-10435, incorporated by
reference in Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
|
|
|
Exhibit 99.5
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on Form
10-Q of the Company for the quarter ended September 30, 2005,
SEC File No. 1-10435, incorporated by reference in Item 3
LEGAL PROCEEDINGS. |
25
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
|
|
|
|
|
Treasurer and Chief Financial Officer |
|
|
|
|
(Principal Financial Officer) |
|
|
|
|
|
|
|
|
|
May 1, 2006
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/STEPHEN L. SANETTI
|
|
5/01/06 |
| |
|
|
|
|
|
|
|
|
Stephen L. Sanetti |
|
|
|
|
|
|
Vice Chairman of the Board, President
and Interim Chief Executive Officer |
|
|
|
|
|
|
(Principal Executive Officer) |
|
|
|
|
|
|
|
|
|
S/JOHN M. KINGSLEY, JR.
|
|
5/01/06
|
|
S/RICHARD T. CUNNIFF
|
|
5/01/06 |
| |
|
|
John M. Kingsley, Jr.
|
|
|
|
Richard T. Cunniff |
|
|
Director
|
|
|
|
Director |
|
|
|
|
|
|
|
|
|
S/JAMES E. SERVICE
|
|
5/01/06
|
|
S/JOHN A. COSENTINO, JR.
|
|
5/01/06 |
| |
|
|
James E. Service
|
|
|
|
John A. Cosentino, Jr. |
|
|
Director
|
|
|
|
Director |
|
|
26
EXHIBIT INDEX
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Page No. |
|
|
Exhibit 3.1
|
|
Certificate of Incorporation of the Company, as
amended (Incorporated by reference to Exhibits 4.1
and 4.2 to the Form S-3 Registration Statement
previously filed by the Company File No. 33-62702). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 3.2
|
|
Bylaws of the Company, as amended.
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.1
|
|
Sturm, Ruger & Company, Inc. 1986 Stock Bonus Plan
(Incorporated by reference to Exhibit 10.1 to the
Company’s Annual Report on Form 10-K for the year
ended December 31, 1988, as amended by Form 8 filed
March 27, 1990, SEC File No. 1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.2
|
|
Amendment to Sturm, Ruger & Company, Inc. 1986 Stock
Bonus Plan (Incorporated by reference to Exhibit
10.3 to the Company’s Annual Report on Form 10-K for
the year ended December 31, 1991, SEC File No.
1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.3
|
|
Sturm, Ruger & Company, Inc. Supplemental Executive
Profit Sharing Retirement Plan (Incorporated by
reference to Exhibit 10.4 to the Company’s Annual
Report on Form 10-K for the year ended December 31,
1991, SEC File No. 1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.4
|
|
Agreement and Assignment of Lease dated September
30, 1987 by and between Emerson Electric Co. and
Sturm, Ruger & Company, Inc. (Incorporated by
reference to Exhibit 10.2 to the Company’s Annual
Report on Form 10-K for the year ended December 31,
1991, SEC File No. 1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.5
|
|
Sturm, Ruger & Company, Inc. Supplemental Executive
Retirement Plan (Incorporated by reference to
Exhibit 10.5 to the Company’s Annual Report on Form
10-K for the year ended December 31, 1995, SEC File
No. 1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.6
|
|
[Intentionally omitted.] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.7
|
|
Sturm, Ruger & Company, Inc. 1998 Stock Incentive
Plan. (Incorporated by reference to Exhibit 10.7 to
the Company’s Annual Report on Form 10-K for the
year ended December 31, 1998, SEC File No. 1-10435). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 10.8
|
|
Sturm, Ruger & Company, Inc. 2001 Stock Option Plan
for Non-Employee Directors (Incorporated by
reference to Exhibit 4 to the Form S-8 Registration
Statement filed by the Company File No. 33-53234). |
|
|
|
|
27
EXHIBIT INDEX (continued)
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Page No. |
|
|
Exhibit 13.1
|
|
Restated Annual Report to Stockholders of the Company
for the year ended December 31, 2004. Except for those
portions of such Annual Report to Stockholders expressly
incorporated by reference into the Report, such Annual
Report to Stockholders is furnished solely for the
information of the Securities and Exchange Commission
and shall not be deemed a “filed” document.
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 23.1
|
|
Consent and Report of Independent Registered Public
Accounting Firm.
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 23.2
|
|
Consent of Independent Registered Public Accounting Firm. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 23.3
|
|
Report of Independent Registered Public Accounting Firm.
|
|
|
84 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 31.1
|
|
Certification of Chief Executive Officer Pursuant to
Rule 13a-14(a) of the Exchange Act.
|
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 31.2
|
|
Certification of Treasurer and Chief Financial Officer
Pursuant to Rule 13a-14(a) of the Exchange Act.
|
|
|
87 |
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
90 |
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.1
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on
Form 10-Q of the Company for the quarter ended March 31,
1995, SEC File No. 1-10435, incorporated by reference in
Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.2
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on
Form 10-Q of the Company for the quarter ended June 30,
1996, SEC File No. 1-10435, incorporated by reference in
Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.3
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Reports on
Form 10-Q of the Company for the quarters ended March
31, June 30, and September 30, 1999, SEC File No.
1-10435, incorporated by reference in Item 3 LEGAL
PROCEEDINGS. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.4
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Reports on
Form 10-Q of the Company for the quarters ended March
31, and September 30, 2000, SEC File No. 1-10435,
incorporated by reference in Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 99.5
|
|
Item 1 LEGAL PROCEEDINGS from the Quarterly Report on
Form 10-Q of the Company for the quarter ended September
30, 2005, SEC File No. 1-10435, incorporated by
reference in Item 3 LEGAL PROCEEDINGS. |
|
|
|
|
28
YEAR ENDED DECEMBER 31, 2005
STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES
ITEMS 15(a)(2) AND 15(d)
FINANCIAL STATEMENT SCHEDULE
29
Sturm, Ruger & Company, Inc.
Item 15(a)(2) and Item 15(d)—Financial Statement Schedule
Schedule II—Valuation and Qualifying Accounts
(In Thousands)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COL. A |
|
COL. B |
|
|
COL. C |
|
|
COL. D |
|
|
COL. E |
|
| |
|
|
|
|
|
ADDITIONS |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
(2) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
(1) |
|
|
Charged to |
|
|
|
|
|
|
|
|
| |
|
Balance at |
|
|
Charged to |
|
|
Other |
|
|
|
|
|
|
Balance |
|
| |
|
Beginning |
|
|
Costs and |
|
|
Accounts |
|
|
|
|
|
|
at End |
|
| Description |
|
of Period |
|
|
Expenses |
|
|
–Describe |
|
|
Deductions |
|
|
of Period |
|
| |
Deductions from asset accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2005 |
|
$ |
373 |
|
|
|
|
|
|
|
|
|
|
$ |
22 |
(a) |
|
$ |
351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2004 |
|
$ |
441 |
|
|
|
|
|
|
|
|
|
|
$ |
68 |
(a) |
|
$ |
373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2003 |
|
$ |
449 |
|
|
|
|
|
|
|
|
|
|
$ |
8 |
(a) |
|
$ |
441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for discounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2005 |
|
$ |
555 |
|
|
$ |
3,508 |
|
|
|
|
|
|
$ |
3,717 |
(b) |
|
$ |
346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2004 |
|
$ |
772 |
|
|
$ |
3,957 |
|
|
|
|
|
|
$ |
4,174 |
(b) |
|
$ |
555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2003 |
|
$ |
783 |
|
|
$ |
3,965 |
|
|
|
|
|
|
$ |
3,976 |
(b) |
|
$ |
772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
|
Accounts written off |
| |
| (b) |
|
Discounts taken |
30