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DATE

Wednesday, July 29, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer - Todd Seyfert
• General Counsel - Sarah Colbert

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TAKEAWAYS

• Net Sales -- $158.1 million, representing a 19% increase compared to $132.5 million in the prior year period, driven by core product strength, higher average selling prices, and increased manufacturing output.
• Adjusted EBITDA Margin -- 10.5%, expanding from 4.1% in the prior year period due to favorable product mix, continued premiumization of product families, and improved manufacturing efficiencies.
• Diluted EPS -- $0.43, compared to a diluted loss of $1.05 per share in the second quarter of 2025.
• Adjusted EPS -- $0.52, an increase from $0.41 in the prior year period, excluding $1.2 million in costs related to a strategic agreement and one-time CFO transition expenses.
• Cash from Operations -- $17.3 million for the quarter, reflecting improved manufacturing performance and disciplined inventory management.
• Quarterly Dividend -- $0.21 per share, equating to approximately 40% of adjusted net income, payable on Aug. 28, 2026.
• Average Selling Price -- $384, a 10% increase year over year, reflecting improved product mix and operational execution.
• Distributor Sell-Through -- 19% increase year over year, significantly outperforming the approximately 5% increase in adjusted NICS over the same period.
• H1 Net Sales -- $299.4 million, a 12% increase compared to $268.2 million in the first half of 2025.
• H1 Cash from Operations -- $36.1 million, representing a 39% increase from the $25.9 million generated in the prior year period.
• New Product Sales -- $80.9 million, representing 29% of total firearm sales for the first six months of the year, driven by models like the Harrier rifle and Marlin 1894.
• Cash and Short-Term Investments -- $117.5 million as of June 27, 2026, providing liquidity for operations and capital allocation.
• Current Ratio -- 3.3 to 1, with the company reporting zero debt on the balance sheet.
• Capital Expenditures Forecast -- $30 million for the full year, with $8.1 million already spent in the first six months on capacity expansion and manufacturing upgrades.
• Agreement Costs -- $1.2 million, representing legal, professional, and advisory fees incurred during the negotiation of the Strategic Cooperation Agreement with Beretta Holding S.A.
• Inventory Reduction -- 100,100 units, reflecting the decrease in finished goods inventories compared to the second quarter of 2025 due to strong retail pull-through.
• Distributor Inventory -- 45,800 units, representing the year-over-year decrease in inventory held by independent distributors.
• Net Income Margin -- 4.4% for the second quarter, as reported by management.

SUMMARY

Management of **Sturm, Ruger & Company, Inc.** (RGR -1.85%) reported a 19% increase in net sales and the formal establishment of the Ruger Business System to standardize operations across the enterprise. The company finalized a strategic agreement with Beretta Holding S.A. and focused on increasing manufacturing throughput to meet consumer demand following previous production constraints. Executives indicated that while some product launches were postponed to prioritize high demand for current product lines, the capital allocation strategy remains focused on internal investment, dividends, and potential acquisitions. The company maintained a debt-free balance sheet with over $117 million in cash and short-term investments as of the end of the quarter.

• CEO Seyfert described the Ruger Business System as "a common operating framework for how we plan, execute, measure performance, and continuously improve across the enterprise."
• The company postponed several product launches during the quarter to prioritize manufacturing of existing high-demand products, specifically within the Gen II rifle line.
• Management noted that the estimated distributor sell-through increased 19% year over year, which tripled the growth rate of adjusted NICS during the same period.
• CEO Seyfert stated that capital expenditures of approximately $30 million over the next few years will focus on capacity expansion and migrating to "mini cells" in facilities to increase flexibility.
• The company reported that sales of new products, defined as those introduced in the past two years, accounted for $80.9 million or 29% of firearm sales in the first half of 2026.
• Management confirmed the company holds $117.5 million in cash and short-term investments, stating a preference for investing in the business first before considering stock buybacks or M&A.
• CEO Seyfert indicated that seasonality affected retail foot traffic from April through June as consumers transitioned from spring range demand toward the fall hunting and holiday season.

INDUSTRY GLOSSARY

• Adjusted NICS: National Instant Criminal Background Check System data modified by industry analysts to exclude certain categories, providing a more accurate proxy for consumer firearm demand.
• ASP: Average Selling Price, a metric calculated by dividing total revenue by the number of units sold.
• MIM: Metal Injection Molding, a manufacturing technology used to create small, complex metal parts with high precision and strength.
• Modern Sporting Rifle: A category of semi-automatic rifles widely used for sporting, hunting, and self-defense purposes.
• Ruger Business System: A proprietary internal operating framework used by the company to align facilities and functions around shared operational objectives.

Full Conference Call Transcript

Operator: Hello everyone, thank you for joining us and welcome to the Sturm, Ruger & Company Q2 Earnings Call. I will now hand the conference over to Todd Seyfert, CEO. Please go ahead.

Todd Seyfert: Good afternoon, and thank you for joining us for the Sturm, Ruger & Company's Second Quarter 2026 Earnings Conference Call. I'm Todd Seyfert, President and Chief Executive Officer. Before we get started, I would like to turn it over to Sarah Colbert, our General Counsel, for the caution on forward-looking statements.

Sarah Colbert: I'd like to remind everyone that some of the statements we make today will be forward-looking in nature. These statements reflect our current expectations, but actual results could differ materially due to several uncertainties and risks. You can find more information about these factors in our most recent Form 10-K and other filings with the SEC. We do not undertake any obligation to update these forward-looking statements. Reconciliations of any non-GAAP measures discussed today are available in our earnings release and on our website.

Todd Seyfert: Thank you, Sarah. As you saw in today's earnings release, the second quarter represented another meaningful step forward in executing our 2026 plan. We delivered another quarter of strong financial results while making meaningful progress in strengthening the foundation of the business. We improved our manufacturing performance and formally established the Ruger Business System, which will serve as the framework for how we manage and continuously improve the business going forward. While we're encouraged by our financial performance during the quarter, I'm equally encouraged by how we achieved those results. Let me first take you through the financials for the quarter. Net sales were $158 million, a 19% increase over Q2 2025.

This was driven by continued strength across our core product portfolio, higher average selling prices, and increased manufacturing output. Adjusted EBITDA margin expanded to 10.5%, driven by favorable product mix, continued premiumization within our existing product families, and improved manufacturing efficiencies. Diluted earnings were $0.43 per share, compared to a diluted loss of $1.05 in the prior year period. On an adjusted basis, diluted earnings increased to $0.52 per share compared with $0.41 per share last year. Cash generated from operations totaled more than $17 million for the quarter. We also continued returning capital to shareholders through our quarterly dividend, consistent with our long-standing capital allocation philosophy.

The Board of Directors declared a dividend of $0.21 per share for the second quarter. While those results are positive, equally important is the operational progress that made those results possible. One trend I'm particularly encouraged by is our consistency. This marks our 5th consecutive quarter of both sequential and year-over-year sales growth, while profitability has continued improving as we execute initiatives to simplify the business and reduce costs. During our first quarter call, we discussed production constraints that limited our ability to fully meet customer demand. Our operations teams responded with urgency while remaining focused on maintaining the quality and reliability our customers expect from Ruger products.

Throughout the second quarter, we improved manufacturing execution, increased throughput, and began rebuilding finished goods inventory in a disciplined manner. That allowed us to improve product availability without compromising our inventory management objectives. Another important milestone during the quarter was the continued expansion of our accessory business. Accessories represent an important extension of our strategy to build complete product ecosystems that complement our core firearm platforms. Our most recent offerings focus on the vast modern sporting rifle market and leverage the success of our new Harrier rifle. From a market perspective, consumer demand throughout the quarter developed as we anticipated.

Normal seasonality presented itself April through June, as summer months saw a slowing of retail foot traffic as consumers prepared to shift from spring range demand into fall hunt and holiday season. Adjusted NICS remained above prior year levels during the quarter, and our estimated distributor sell-through increased 19% year-over-year, significantly outperforming the approximately 5% increase in adjusted NICS over the same period. Taken together, these trends reinforce our confidence in the health of the business. Consumer demand for the Ruger brand remains strong. Our new products continue gaining traction, and inventory throughout the channel remains balanced.

We saw distributors reduce inventory on a year-over-year basis while retail sell-through remained strong, providing additional evidence that demand continues to be driven by consumers rather than inventory replenishment alone. At the same time, we improved product mix while rebuilding inventory both internally and at distribution, compared to the first quarter. We believe this positions us well heading into the important fall hunting and holiday season, while allowing us to continue increasing production of the products consumers are demanding most. Perhaps the most important milestone of the quarter wasn't reflected in any single financial metric. During the second quarter, we formally established the Ruger Business System. While the name is new, the objective is straightforward.

The Ruger Business System establishes a common operating framework for how we plan, execute, measure performance, and continuously improve across the enterprise. It aligns our teams around common objectives, reinforces accountability, and creates a shared language for operational excellence across all of our facilities and functions. Most importantly, it provides the structure necessary to execute both our annual operating plans and our long-term Ruger 2030 strategy. For shareholders, the Ruger Business System should be viewed as an investment in growth and consistency. We know that the firearms market fluctuates, but our objective is to build an organization that can execute regardless of the macro environment.

It's designed to improve the way we make decisions, solve problems, and execute across every part of the business to deliver predictive results each quarter. As we look forward to the back half of the year, I would like to walk us through our progress on the 2026 plan and the overall health of the business. Throughout the first 6 months, net sales were $299 million, a 12% increase over 2025. Cash generated from operations was up 39% during the period and totaled $36 million. Sales of new products accounted for $81 million, or 29% of firearm sales for the period. As of June 27, 2026, our cash and short-term investments totaled $118 million.

Our current ratio is 3.3:1, and we have no debt. Year-to-date, capital expenditures total $8 million. As we've mentioned before, we expect capital expenditures to total approximately $30 million for the year. In the first 6 months, we returned $3 million to our shareholders through the payment of quarterly dividends. Our priorities for the balance of 2026 remain unchanged. Improving profitability through focusing on direct material cost, insourcing of components, and driving product premiumization. Aligning factory capacity with demand by redeploying capital assets across locations that can better leverage our footprint, and cross-training employees to create flexibility across product lines. Right-sizing the business to our future product portfolio by intentionally mapping product life cycles and roadmaps to meet consumer demand.

Carefully listening to voice of the customer feedback, innovating where possible, and exiting unprofitable platforms where demand is waning. Increasing output on proven high-demand product lines by reducing bottleneck cycle times, increasing productivity through improved shop floor leadership, and where needed, leveraging existing capital with increased shifts. Expanding into new markets through complete product ecosystems, increased accessory offerings, a broader international presence, and new market segments in domestic and international law enforcement and security. As I've stated before, these priorities are not short-term actions. They are foundational steps that position us for sustained growth and performance. There is still important work ahead.

We believe the operational foundation we've built over the past year positions Ruger to execute more consistently, respond more effectively to market conditions, and create durable long-term value. I'd like to thank our employees for their commitment and execution throughout the quarter. Operator, can we please have the first question?

Operator: The first question is from the line of Mark Smith with Lake Street.

Mark Smith: Hey, Todd, I wanted to ask a little bit about new products. If there was anything that fell off from kind of the new products list and in kind of your comfort level, as well as if there was anything that's kind of added in here, the mix within new products that's maybe driving ASP a little bit higher.

Todd Seyfert: Sure. Hey, Mark. Yes, one real important factor on the new products is, if you remember, we only track things that have been launched in the past 2 years. And so in the second quarter, the Gen II rifles rolled off. So think about that volume in terms of our total volume. The good news is, Mark, is that we have a tremendous pipeline of new products, and not only in Gen II, but across the portfolio. And so really it's the timing of the roll-off of those as we launch new products. The other thing I would tell you is, because of the demand in Q2, we did postpone some product launches.

Just given demand of current products, we wanted to make sure we were fulfilling those products first before launching more.

Mark Smith: And that maybe fits into my next question, which is, as we look at the back orders, units on back order up a fair amount here. Walk us through kind of your comfort level with that number, your ability to hit and maybe reduce that number as we go forward?

Todd Seyfert: Yes, so a lot of work that we talked about just recently is really what we're doing to increase our volumes. And so a lot of work happening in the facilities, a lot of work around the product roadmaps, really understanding where that demand is, which lines, and what we can do to increase that production. So a lot of effort. If you remember Q1, we had the issues around some of the facilities having some snowstorms. A lot of focus on increasing output in the short term in Q2 to catch up. We also had a number of 250th anniversary products that were launched in the quarter as well.

And so chasing kind of that volume in the short term. And looking back to the back half of the year, Mark, really focusing on where do we have the most demand? What product lines are those on? And making sure that as we evaluate those lines, we're adding the appropriate people and also looking at additional shifts where it makes sense.

Mark Smith: Okay, and if I could squeeze one more in. You talked a little bit about some capital allocation, use of cash here. I'm curious if any other insights that you can give us as we think about needs coming up in CapEx? Is there any investments that you guys need to make or maybe even plans of what you can do with excess cash?

Todd Seyfert: Sure. So, the next few years, Mark, as we stated, it really is trying to target that $30 million of CapEx, really that goes around additional capacity, innovation in terms of whether that's efficiency gains in the facilities through newer machines, thinking about going and migrating to mini cells, which we're starting to pilot in some of our facilities right now, which gives us a little bit more flexibility in terms of the types of machines we're buying, a little bit more fifth axis, if you will. So it gives us a little bit more flexibility in how we make product. And so that's some of the thought process around the $30 million target over the next few years.

So really continuing to invest in the current business and the future product profiles. In terms of the cash position that we're in, I'm happy to report, we're hovering around that $118 million. As you know, being a long-term follower and investor, we were very thoughtful around our capital deployment. And so we're going to invest in the business first. That's the clear priority. Then we'll look at opportunities of what else to do with that cash, whether that's, you know, if we feel our stock set at a lower point than we think it's worth, you know, we do have the ability to buy back stock.

We have looked at M&A, as you know, and we continue to evaluate where that could make sense. And then also just given the cyclicality of this business, we do like to have, you know, cash on hand to, you know, weather the storm, if you will, if anywhere to come. So we're feeling really good with where we are and we'll continue to treat our capital from our investors very, very thoughtfully.

Mark Smith: Perfect. Thank you.

Todd Seyfert: Absolutely. Thanks, Mark.

Operator: Your next question is from the line of Rommel Dionisio with Aegis Capital.

Rommel Dionisio: Thank you very much. Todd, you just alluded to possibly delaying some of the new product launches just to help get you through the strong demand in the current period. Without asking you for too much, could you like, how much are we delaying them to next year or just, you know, a few months? How should we kind of think about these next few months and quarters for the pace of new product introductions? Thank you.

Todd Seyfert: Thanks. Really, I would say it's in the short term, really looking at, for instance, on Gen II, given the current demand of those calibers heading into hunting season, you know, we didn't feel it appropriate to add new products to that. Where we have lines that share production, we would make sure that we're not introducing new products or new parts to those lines. So really, I would call it a shorter-term focus, Rommel, in terms of that prioritization of what we introduce. That's kind of how we're thinking about it.

Rommel Dionisio: Okay, and just maybe dovetailing with that, should we think about then capital expenditures moving possibly more into the full -- I know you reiterated the $30 million number for the full year, but should we think about that maybe moving more kind of fourth quarter loaded as opposed to third quarter loaded just given the change in the cadence of new product introductions? Or does that not really matter from a timing standpoint?

Todd Seyfert: Yes, it's a little bit based on the calendar. Typically what happens is a lot of the projects are green-lighted the fourth quarter of the prior year, we get traction in the first quarter. And then in terms of the actual investment and the spending of dollars that happens typically towards the end. And so a lot of it happens after the middle of the year. And so you'll see that kind of happening over Q3 and Q4.

Rommel Dionisio: Okay, perfect. Thank you very much.

Todd Seyfert: Absolutely. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Todd Seyfert, CEO for closing remarks. Please go ahead.

Todd Seyfert: Thank you again for joining us today and for your continued investment in Ruger. The progress we've made during the first half of the year gives us confidence that we're building a stronger, more agile Ruger while remaining focused on delivering value for our customers, employees, and shareholders. We look forward to talking again next quarter. Thanks.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.