1 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 March 31, 1998 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 0-4776 ------ 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 06490 - --------------------------------- ------------------------ (Address of principal executive (Zip code) offices) (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 |_| The number of shares outstanding of the issuer's common stock as of April 30, 1998: Common Stock, $1 par value - 26,910,800. Page 1 of 18
2 INDEX STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed consolidated balance sheets--March 31, 1998 and December 31, 1997 3 Condensed consolidated statements of income--Three months ended March 31, 1998 and 1997 5 Condensed consolidated statements of cash flows--Three months ended March 31, 1998 and 1997 6 Notes to condensed consolidated financial statements--March 31, 1998 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15 2
3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) <TABLE> <CAPTION> March 31, December 31, 1998 1997 ----------- ------------- (unaudited) (Note) <S> <C> <C> ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,078 $ 4,488 Short-term investments 51,455 45,484 Trade receivables, less allowances for doubtful accounts ($1,111 and $1,001) and discounts ($546 and $2,842) 21,075 21,118 Inventories: Finished products 12,108 12,708 Materials and products in process 31,134 32,841 --------- --------- 43,242 45,549 Deferred income taxes 7,690 7,224 Prepaid expenses and other assets 772 1,344 --------- --------- TOTAL CURRENT ASSETS 130,312 125,207 PROPERTY, PLANT AND EQUIPMENT 140,772 139,201 Less allowances for depreciation (85,933) (83,538) --------- --------- 54,839 55,663 DEFERRED INCOME TAXES 4,488 4,701 OTHER ASSETS 14,257 14,223 --------- --------- $ 203,896 $ 199,794 ========= ========= </TABLE> 3
4 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) <TABLE> <CAPTION> March 31, December 31, 1998 1997 --------- ------------ (unaudited) (Note) <S> <C> <C> LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable and accrued expenses $ 3,903 $ 4,628 Product safety modifications 823 870 Product liability 3,000 3,000 Employee compensation 12,042 10,303 Workers' compensation 4,774 5,063 Income taxes 6,274 3,792 --------- --------- TOTAL CURRENT LIABILITIES 30,816 27,656 PRODUCT LIABILITY ACCRUAL 18,591 19,218 CONTINGENT LIABILITIES --Note 7 -- -- 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 26,910,800 and 26,922,800 26,911 26,923 Additional paid-in capital 2,434 2,632 Retained earnings 125,289 123,510 Additional minimum pension liability (145) (145) --------- --------- 154,489 152,920 --------- --------- $ 203,896 $ 199,794 ========= ========= </TABLE> Note: The balance sheet at December 31, 1997 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
5 STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share data) <TABLE> <CAPTION> Three Months Ended March 31, 1998 1997 ---------------------------- <S> <C> <C> Firearms sales $ 37,013 $ 42,152 Castings sales 21,508 12,936 --------- --------- Net sales 58,521 55,088 Cost of products sold 42,197 38,352 --------- --------- 16,324 16,736 Expenses: Selling 3,306 3,159 General and administrative 1,737 876 --------- --------- 5,043 4,035 --------- --------- 11,281 12,701 Other income-net 756 169 --------- --------- INCOME BEFORE INCOME TAXES 12,037 12,870 Income taxes 4,875 5,122 --------- --------- NET INCOME $ 7,162 $ 7,748 ========= ========= Basic and diluted earnings per share $ 0.27 $ 0.29 --------- --------- Cash dividends per share $ 0.20 $ 0.20 --------- --------- </TABLE> See notes to condensed consolidated financial statements. 5
6 STURM, RUGER & COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) <TABLE> <CAPTION> Three Months Ended March 31, 1998 1997 ---------------------------- <S> <C> <C> CASH PROVIDED BY OPERATING ACTIVITIES $ 14,725 $ 23,722 INVESTING ACTIVITIES Property, plant and equipment additions (1,571) (1,065) Purchases of short-term investments (35,904) (43,313) Proceeds from sales or maturities of short-term investments 29,933 31,369 Investment in joint venture -- (54) --------- --------- Cash used in investing activities (7,542) (13,063) --------- --------- FINANCING ACTIVITIES Dividends paid (5,383) (5,383) Repurchase of Common Stock (210) -- --------- --------- Cash used by financing activities (5,593) (5,383) --------- --------- INCREASE IN CASH AND CASH EQUIVALENTS 1,590 5,276 Cash and cash equivalents at beginning of period 4,488 2,729 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,078 $ 8,005 ========= ========= </TABLE> See notes to condensed consolidated financial statements. 6
7 STURM RUGER & COMPANY, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) March 31, 1998 NOTE 1--BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles 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 three months ended March 31, 1998 are not necessarily indicative of the results to be expected for the full year ending December 31, 1998. 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, 1997. 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 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. NOTE 3--INVENTORIES 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 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. 7
8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--CONTINUED 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 three months ended March 31, 1998 and 1997 were $2.6 million and $0.4 million, respectively. NOTE 5--BASIC AND DILUTED EARNINGS PER SHARE Basic and diluted earnings per share is based upon the weighted average number of common shares outstanding during the period. NOTE 6--COMPREHENSIVE INCOME As of January 1, 1998, the Company adopted Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of SFAS 130 had no impact on the Company's net income or shareholders' equity. SFAS 130 requires that all non-owner changes in equity, such as additional minimum pension liability, which are not included in net income, be included in other comprehensive income. As there were no non-owner changes in equity during the first quarter of 1998 and 1997, total comprehensive income equals net income, or $7.2 million and $7.7 million, respectively. NOTE 7--CONTINGENT LIABILITIES The Company is a defendant in approximately 15 lawsuits involving product liability claims which allege defective product design and is aware of other product liability claims. 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. In many of the lawsuits, 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 shooting and any results therefrom were due to negligence or misuse of the firearm by the claimant or a third party and that there should be no recovery against the Company. 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 difficult to forecast the outcome of these claims, in the opinion of management, after consultation with special and corporate counsel, the outcome of these claims will not have a material adverse effect on the results of operations or financial condition of the Company. The Company has reported all lawsuits instituted against it through December 31, 1997 and the results of those lawsuits, where terminated, to the S.E.C. on its Form 10-K and Form 10-Q reports, to which reference is hereby made. 8
9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Consolidated net sales of $58.5 million were achieved by the Company in the first quarter of 1998. This represents an increase of $3.4 million or 6.2% from the first quarter of 1997 consolidated net sales of $55.1 million. Firearms segment net sales were $37.0 million in the first quarter of 1998 compared to $42.2 million in the corresponding 1997 period, a decrease of $5.2 million or 12.2%. Firearms unit shipments decreased 16.7% reflecting continuing reduced overall market demand, particularly in the industry product categories of rifles and revolvers, which are manufactured in the Newport, New Hampshire facility and certain long guns which are manufactured in the Company's Prescott, Arizona facility. Shipments of certain models, including the Ruger 77/50 Muzzleloading Rifle and the Ruger 77/44 Bolt Action Rifle, new models introduced in the latter half of 1997, continue to experience a heightened level of demand. The Company continues to employ three sales incentive programs which were in effect in 1997. Two of these programs provide discounts of up to 10% of the sales price of selected pistol and revolver models, while another provides a 1% overall discount for customers meeting specific annual sales targets. In 1998 one new program was introduced offering an additional 1% for distributors qualifying for the aforementioned three programs. Casting segment net sales increased by 66.3% from $12.9 million in the first quarter of 1997 to $21.5 million in the first quarter of 1998. This was primarily due to increased shipments of titanium golf club heads to Callaway Golf Company, Inc. ("Callaway Golf"). The Company anticipates that its shipments to Callaway Golf may not continue at the current level for the remainder of 1998. However, the Company has begun shipping limited quantities to other golf club manufacturers in the first quarter of 1998. Increased shipments to these other golf club manufacturers may offset the anticipated decline in sales to Callaway Golf. Consolidated cost of products sold for the first quarter of 1998 was $42.2 million compared to $38.4 million for the first quarter of 1997, an increase of $3.8 million or 10.0%. This was primarily attributable to increased sales activity by the investment casting segment, partially offset by lower firearms segment sales, as discussed above. Gross profit as a percentage of net sales decreased to 27.9% in the first quarter of 1998 from 30.4% in the comparable 1997 period. The decrease is due to the reduced overall volume of business in the firearms segment and pricing pressures in both the firearms and the castings segments. Although variable costs were reduced during the first quarter of 1998 in response to the reduction in firearms sales, the fixed costs associated with operating the Company's firearms facilities negatively impacted gross profit. Selling, general & administrative expenses increased by 25.0% to $5.0 million in the first quarter of 1998 from $4.0 million in the first quarter of 1997. Selling, general & administrative expense as a percentage of sales in the first three months of 1998 of 8.6% is consistent with the 8.5% ratio for the year ended December 31, 1997. The increase in expense from the first quarter of 1997 reflects higher employee benefit plan expenses and increased professional service fees during the first three months of 1998. 9
10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED Other income increased $0.6 million in the first quarter of 1998 compared to the corresponding 1997 period due to increased interest income resulting from greater Treasury bill investments and the absence of losses related to Antelope Hills, a former joint venture of the Company, which were recorded in the first quarter of 1997. The effective income tax rate increased to 40.5% in the first quarter of 1998 from 39.8% in the comparable 1997 quarter due to higher state income taxes. As a result of the foregoing factors, consolidated net income for the first quarter of 1998 decreased to $7.2 million from $7.7 million for the first quarter of 1997 representing a decrease of $0.5 million or 7.6%. Financial Condition At March 31, 1998, the Company had cash, cash equivalents and short-term investments of $57.5 million, working capital of $99.5 million and a current ratio of 4.2 to 1. Cash provided by operating activities was $14.7 million and $23.7 million for the three months ended March 31, 1998 and 1997, respectively. This change in cash flows is principally a result of significantly greater reductions in inventories and trade receivables in 1997 than in 1998. 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 dating plan 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 have to be made by April 30. Generally, shipments made in subsequent months have to be paid for within approximately 90 days. Dating plan receivable balances were $6.1 million at March 31, 1998 as compared to $5.8 million at March 31, 1997. 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. Capital expenditures during the three months ended March 31, 1998 totaled $1.6 million. For the past two years capital expenditures averaged approximately $1.5 million per quarter. In 1998, the Company expects to spend approximately $9 million on capital expenditures to upgrade and modernize equipment at all of its divisions. The Company finances, and intends to continue to finance, all of these activities with funds provided by operations. For the three months ended March 31, 1998 dividends paid totaled $5.4 million. This amount reflects the regular quarterly dividend of $.20 per share paid on March 15, 1998. Future dividends depend on many factors, including internal estimates of future performance and the Company's need for funds. 10
11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED 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 1998. The purchase of firearms is subject to federal, state and local governmental regulations. The basic federal laws are the National Firearms Act and the Federal Firearms Act. These 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 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, or to impose a mandatory waiting period prior to their purchase. Several states currently have laws in effect similar to the aforementioned legislation. The "Brady Law" mandates a nationwide 5-day waiting period prior to the purchase of a handgun. The Company believes that, because its customers are sportsmen, hunters, gun collectors and law enforcement agencies and since 26 states had previously enacted some form of a waiting period prior to purchase, the "Brady Law" has not had a significant effect on the Company's sales of firearms. 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 long guns were exempted by name as "legitimate sporting firearms." A separate provision of the Crime Bill prohibited production or sale of detachable magazines of over 10-round capacity manufactured after September 13, 1994, other than to law enforcement. Only two such magazines (9mm and .40 caliber) were commercially sold by the Company, and production of substitute 10-round magazines in these calibers (approved by the BATF) began immediately. 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 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. The Company has expended significant amounts of financial resources and management time in connection with product liability litigation. While it is difficult to forecast the outcome of litigation or the timing of costs, management believes, after consultation with counsel, that this litigation will not have a material adverse effect on the financial condition of the Company. The Company is not aware of any adverse trends in its litigation as a whole. 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 its business. 11
12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED 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. Some of the Company's computer programs were written using two digits rather than four to define the applicable year. As a result, those computer programs have time-sensitive software that recognizes a date using "00" as the year 1900 rather than the year 2000. This could cause a system failure or miscalculation causing disruptions of operations, including a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Company is in the process of assessing the need to modify or replace portions of its software or hardware so that its computer systems will function properly with respect to dates in the year 2000 and thereafter. Current results of this assessment continue to indicate that the impact of this replacement or modification will be immaterial to the Company's future operating results and cash flows. As of January 1, 1998, the Company adopted Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS 130 establishes new rules for the reporting and display of comprehensive income and its components; however, the adoption of SFAS 130 had no impact on the Company's net income or shareholders' equity. SFAS 130 requires that all non-owner changes in equity, which are not included in net income, be included in other comprehensive income. As there were no non-owner changes in equity during either the first quarter of 1998 and 1997, total comprehensive income equals net income, or $7.2 million and $7.7 million, respectively. In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information" which establishes standards for the way that public business enterprises report information about operating segments. SFAS 131 is effective for financial statements for fiscal years beginning after December 15, 1997, and therefore the Company will adopt the new requirements before the end of 1998. SFAS 131 does not need to be applied to interim financial information in the year of adoption. Management has not completed its review of SFAS 131, but does not anticipate that the adoption of this statement will result in the identification of additional segments. In October 1997, the FASB issued SFAS No. 132, "Employer's Disclosures about Pensions and Other Post Retirement Benefits" which changes financial statement disclosure requirements for pension and other post retirement benefits. While the Company is studying the application of these disclosure provisions, it does not expect SFAS 132 to affect its financial position or results of operations. 12
13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--CONTINUED 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 (including those from titanium golf club components), the need for external financing for operations or capital expenditures, the results of pending litigation against the Company, and the impact of future firearms control, environmental legislation, and computer systems replacement and modification, 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 and the Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date such forward-looking statements are made or to reflect the occurrence of unanticipated events. 13
14 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS "Note 7--Contingent Liabilities" presented in Part I is incorporated herein by reference. The following two cases were instituted against the Company during the three months ended March 31, 1998, which involved significant demands for compensatory and/or punitive damages: Terry Tate v. Sturm, Ruger & Company, Inc., in the 281st Judicial District Court of Harris County, Texas. The complaint, which was served on January 9, 1998, alleges that on or around November 17, 1996, a revolver manufactured by the Company accidentally discharged, resulting in injuries to his arm. Amount in demand is not stated. Daniel L. Hutchinson v. Sturm, Ruger & Company, Inc., in the Commonwealth of Massachusetts, Malden District Court. The complaint, which was filed on January 19, 1998, alleges that on or around October 23, 1994, a pistol manufactured by the Company discharged, resulting in injuries to his right thigh. General damages not exceeding $25,000 are in demand. During the three months ending March 31, 1998, the previously reported case of Siblerud v. Company (MT), involving an accidental death claim arising from an allegedly dropped "old model" Ruger single action revolver, was tried to a defense verdict on January 13, 1998. The jury found that the firearm was not defective in design. The case was settled at the conclusion of the trial, both sides waiving appeal. The previously reported case of Southward v. Company (IL) was dismissed by the trial court on January 6, 1998. No appeal was filed. The dismissal of the previously reported case of Cummins v. Company (IA) on October 15, 1997 was made final on February 3, 1998, when plaintiff's time to appeal expired. The previously reported case of Alston v. Company (NJ) was voluntarily withdrawn with prejudice by plaintiffs on February 9, 1998, without payment by the Company. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - Exhibit 27 - Financial Data Schedule (b) The Company filed a report on Form 8-K dated February 6, 1998 announcing the resignation of its President and Chief Operating Officer, Gerald Bersett, effective March 1, 1998. 14
15 STURM, RUGER & COMPANY, INC. FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998 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: May 12, 1998 /s/ Erle G. Blanchard ---------------------------------- Erle G. Blanchard Principal Financial and Accounting Officer, Vice President, Controller 15