Sturm, Ruger & Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter ended September 26, 2026, reached $147.6 million, a 16.5% increase year-over-year from $126.8 million in Q3 2025.
• Diluted earnings per share (EPS) were $0.36 for the quarter, compared to $0.10 in the corresponding 2025 period.
• Adjusted diluted EPS was $0.44 for the quarter, a 340% increase from $0.10 in 2025.
• Net income for the quarter was $5.8 million, up 266.9% year-over-year.
• Gross margin increased to 20.7% in Q3 2026, up from 15.1% in Q3 2025.
• Adjusted EBITDA was $14.3 million for the quarter, a 401.9% increase year-over-year.
• Net income margin for the quarter was 3.9%, and adjusted EBITDA margin was 9.7%.
• Year-to-date net sales through the first nine months of 2026 totaled $447 million, a 13% increase over $395 million in the same period in 2025.
• Year-to-date diluted EPS was $0.79, compared to a loss of $0.48 per share in the first nine months of 2025.
• Year-to-date adjusted diluted EPS was $1.23, compared to $0.65 in the first nine months of 2025.
• Cash generated from operations for the first nine months of 2026 was $24.2 million, down from $38.8 million in the same period in 2025.
• As of September 26, 2026, cash and short-term investments totaled $101.4 million.
• The company reported a current ratio of 3.0 to 1 and has no debt.
• Capital expenditures for the first nine months of 2026 were $8.9 million.

Guidance and Future Outlook:

• The Company expects total capital expenditures for the full year 2026 to be approximately $30 million, allocated toward new product introductions, expanded capacity for high-demand product lines, upgraded manufacturing capabilities, and strengthened facility infrastructure.
• Management expressed increasing confidence in progress made across the company as it approaches the end of 2026, citing top-line growth, improved profitability, and investments in systems and manufacturing.
• The Company is executing its 2026 Plan while building capabilities to execute the Ruger 2030 strategy.

Business Segments and Product Lines:

• Average selling price remained strong, reaching approximately $377 for the quarter, both year-over-year and sequentially.
• In October, the Company announced the suspension of production for a limited number of product families representing approximately $25 million of total revenues, which generated minimal to no profitability.
• The suspension of these products is not necessarily permanent; the Company intends to evaluate opportunities to redesign and reposition select products for potential return to the market.
• The Company expanded the implementation of the Ruger Business System across the organization to support growth, cost reduction, and quality leadership.
• The Company implemented a new Oracle enterprise resource planning (ERP) platform to improve business visibility, decision-making, and process integration.
• New product development remains a cornerstone of the Company's strategy.

Market and Competitive Landscape:

• The Company is aligning resources with products and markets that have the greatest opportunities for consumer demand, profitability, and long-term growth.
• The Company is one of the nation's leading manufacturers of firearms for the commercial sporting market, offering nearly 800 variations of 40 product lines across Ruger, Marlin, and Glenfield brands.

Risks and Challenges:

• Forward-looking statements note risks including market demand, sales levels of firearms, anticipated earnings, the need for external financing, results of pending litigation, and the impact of future firearms control or environmental legislation.
• The Company faces the challenge of portfolio rationalization, requiring the suspension of certain product lines to reduce complexity and improve efficiency.

Management Commentary and Tone:

• Todd Seyfert, President and Chief Executive Officer, stated that third-quarter results reflect continued operational progress with year-over-year and sequential sales growth and profitability improvements.
• Management emphasized a focus on translating top-line growth into stronger bottom-line performance through disciplined cost management, improved product mix, and enhanced operational execution.
• Seyfert noted that portfolio rationalization makes the company stronger and that resources are being deployed to areas with the greatest opportunities.
• Management concluded that the organization is aligned around execution, with decisions designed to build a stronger, more agile, and more profitable company for durable long-term value.

Other Key Points:

• The Board of Directors declared a quarterly dividend of $0.18 per share for the third quarter, payable on December 4, 2026, to shareholders of record as of November 20, 2026.
• The declared dividend equates to approximately 40% of the adjusted net income of $0.44 per share for the third quarter of 2026.
• For the first nine months of 2026, the Company returned $6.4 million to shareholders through quarterly dividends.
• The Company did not repurchase any shares of its common stock during the first nine months of 2026.
• Adjusted EBITDA for the nine months ended September 26, 2026, was $41.8 million, an 84.9% increase from $22.6 million in the same period in 2025.
• Adjusted EPS for the nine months includes adjustments for stockholder rights costs ($0.29 per share) and organizational realignment/severance costs ($0.15 per share).
• The 2025 adjusted earnings exclude inventory and related other asset write-offs, product rationalization, and organizational realignment incurred in the second quarter of 2025.