Sturm, Ruger & Company (RGR) investor relations material

Executive summary

• Net sales for Q1 2026 increased 4.1% year-over-year to $141.4 million, driven by strong new product launches contributing 41% of firearm sales.

• Adjusted diluted EPS was $0.27, down from $0.46 last year; reported EPS was $0.01 due to non-recurring expenses.

• Net income dropped sharply to $0.1 million from $7.8 million in Q1 2025, impacted by non-recurring legal and severance costs.

• Strategic cooperation agreement reached with Beretta Holding, including board representation and a tender offer, incurring $3.2 million in related expenses.

• New CFO Andrew Wieland appointed, succeeding Tom Dineen.

Financial highlights

• Gross profit was $28.1 million, down from $29.9 million year-over-year; gross margin fell to 19.9%.

• Operating loss of $1.95 million versus operating income of $8.47 million in Q1 2025.

• Adjusted EBITDA was $10.9 million, a 23.9% decrease from $14.3 million in Q1 2025; margin at 7.7%.

• Cash from operations totaled $18.8 million; cash and short-term investments stood at $105.2 million as of March 28, 2026.

• No debt on the balance sheet; current ratio of 3.5 to 1.

Outlook and guidance

• Capital expenditures for 2026 projected at $30 million, focused on new product introductions and capacity expansion.

• Management anticipates improved profitability as temporary expenses subside and cost structure improves.

• Dividend policy remains at ~40% of net income; Q2 dividend set at $0.11 per share.

• Focus on recovering Q1 production shortfalls and rebuilding inventories.

• Cautious monitoring of macroeconomic pressures on discretionary income.