Sturm, Ruger & Company, Inc. · NYSE:RGR
Sturm, Ruger & — Shareholder Meeting (May 2012)
36 slides from Sturm, Ruger &'s shareholder meeting presentation, May 2, 2012
Slide 1: 2012 Annual Meeting
® RUGER 2012 Annual Meeting RUGG@eEob, REtLtLtIT!tABELE Caution: Forward Looking Statements Statements made in the course of this meeting that state the Company’s or Management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to
Slide 2: Investment Highlights
Investment Highlights * 63 years as one of the world’s leading firearms brands. ¢ Experienced and engaged Board of Directors. * Strong management team. ¢ Strong market position in rifles, revolvers and pistols. ¢ We continue to outpace growth in the industry (NICs). ¢ Strong balance sheet; well posi
Slide 3: Financial and Operational Highlights
Financial and Operational Highlights @ Consolidated Operating Results Gn mitions, except EPS) Revenues Gross Margin Operating Profit RUGGED, RELIABLE FrREARM S
Slide 4: Comparison of Underlying Performance
Comparison of Underlying Performance ¢in thousands) 2012 ai a4 a2 qi Reported $24,415 $15,926 $17,062 $12,458 Operating Profit Adjustments UFO O/H Rate D/L Rate £80 reserve Frozen DB Pension Plan Dorr Demolition Costs Severance = - 73 Retrofit Expenses 2 6 Total Adjustments 387 72 855 776 (256) Adju
Slide 5: Q1 2012 Performance
Q1 2012 Performance Distributor Gross Margin Earnings Sell-Through Year-Over-Year +62% +74% +96% Quarterly Comparison Sequential +21% Quarterly Comparison RUGGED, RELL A &6 LE FIREARM S Return on Shareholders’ Equity cnmiticns; $40 i] _a = II 2006 2007 2008 2009 2010 2011 Ey = Net income (s) BUGGERE
Slide 6: Return on Shareholders' Equity
Return on Shareholders’ Equity cnmitions; 120% $126 $105 whe. 80% 60% 40% 20% 0% 2006 2007 2008 2009 2010 2011 Hj = Net income (8) WB = Equity @) RUGGED, RELIABLE FIREARM S Return on Shareholders’ Equity cnmiticns; 27 a 2007 2008 2009 2010 2011 Ef = Net income 8) B= tay —= =ROE (%) RUGGED, RELIABLE
Slide 7: Return on Shareholders' Equity
Return on Shareholders’ Equity cnmitions; 2006 2007 2008 2009 2010 2011 i= = Net Income ($) Bg = Equity ($) w= = ROE (%) w—= = ROE Adjusted for Cash (%) ce) RUGGED, RELIABLE FIREARMS RUGER Market Conditions @ RUGER
Slide 8: Estimated Distributor Sell-Through
Estimated Distributor Sell-Through gn unite; 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 Q1 2012 Sell-through has tripled from Q1 2007 a1 02 3 as «a1 a2 a3 04 «gt a2 Os Os Os es 2007 2008 2009 2010 2011 2012 — = Distributor Sell-through W RUGG@EoD, RELIABLE FIREARM
Slide 9: Trends in Retail Demand
Trends in Retail Demand én thousands) NICS Checks yBnosyy-11ag 2007 2008 —— = Adjusted NICS Checks Trends in Retail Demand én thousands) an n =x 3 = = & =) zs 3 8 € S e = > 2007 2008 2009 2010 —— = Adjusted NICS Checks RUGGED, RELIABLE
Slide 10: Quarterly Trends in Retail Demand
Quarterly Trends in Retail Demand (in thousanas) Adjusted NICS yGnosyy-}1ag 40yNqUysig Qi 02 03 04 «01 02 03 04 «at 02 03 OS «tO OS Os = 2 3 4 a 2007 2008 2009 2010 2011 2012 —— = Adjusted NICS ——= = Distributor Sell-through Market Share Movement Product Category 2009 Single-Action Revolvers Maintai
Slide 11: Market Share Movement
Market Share Movement Product Category 2009 Single-Action Revolvers Maintained Double-Action Revolvers — Gained Runfire Pistols Maintained Centerfire Full-Size Maintained Centerfire Compact Gained Mini-14 Rifles Maintained Bolt-Action Rifles Maintained Rimfire Rifles Gained Modern Sporting Rifles Ga
Slide 12: New Product Impact: 2010 - Q1 2012
New Product Impact: 2010 - QI 2012 2010 By = New Products BB = Mature RUGG@eEodD, RELIABLE FIREARM S New Product Impact: 2010 - QI 2012 2010 2011 By = New Products EB = Mature RUGGED, RELIABLE FrREARM S
Slide 13: New Product Impact: 2010 - Q1 2012
New Product Impact: 2010 - QI 2012 2010 2011 Q1 2012 Gee By = New Products BB = Mature @ RUGGED, RELIABLE FIREARM S Highlighted New Products: 2011 & YTD 2012 5 New Platform Products Ruger American Rifle / SR22 / LC9 / Gunsite Scout Rifle / SR1911 13 New Product Derivatives Including the 22/45 Lite,
Slide 14: 2012 New Products to Date
Q RUGER 2012 New Products to Date
Slide 15: The Ruger
7 THE RUGER’ RUGGED, RELUA BLE FIREARM S @ RUGGED, RELIABLE FIREARMS
Slide 16: 2011 New Products Introductions
THE RUGER 22A4S Live RUGER 2011 New Products Introductions RUGG@eEobdb, RELIABLE FIREARM §
Slide 17: The Ruger Gunsite Scout Rifle
THE RUGER GUNSITE - Lil RUGGED, RELLA BL E FIREARMS RUGGED, RELIABLE FIREARMS
Slide 18: The Ruger SR1911
THE RUGER SRALS1L1L ® RUGGED, RELLA 6 L E FIREARM S THE RUGER RUGGED, RELIABLE FIREARMS
Slide 19: The Ruger BX-25 and Single-Ten
THE RUGER' BxX-2S GENUINE RUGER’ FACTORY MAGAZINE SINGLE-TEN REVOLVER
Slide 20: The Ruger 77/357 Rifle
THE RUGER 77/357 RIFLE RUGGED, RELLA BL E FIREARMS THE RUGER RUGGED, RELIABLE FiREARM™ S
Slide 21: The Ruger LCP and LC9 with LaserMax Lasers
THE RUGER' LCP ann LC®? witH LASERMAK CENTERFIRE’ LASERS THE PERFECT 4° “KIT GUN” COMES IN Two ¢ GREAT ©. CALIBERS. { THE RUGER © | sptot° / in.357 Mag.
Slide 22: Recognition and Media Coverage
Recognition er Media Coverage @ RUGER
Slide 23: Academy Excellence Awards
4X or the vear a ACADEMY ‘ACADEMY. ‘ACADEMY, ACADEMY EXCELLENCE EXCELLENCE, EXCELLENCE EXCELLENCE 2008 Handgun of the Year 2009 Handgun of the Year 2010 Handgun of the Year 2011 Handgun of the Year RUGGED, RELLA BL E THE RUGER GUNSITE SCOUT RIFLE ACADEMY EXCELLENCE 2011 Rifle of the Year RUGGED, REL
Slide 24: Editorial Coverage
Editorial Coverage oir Loans THE 223: REST Bet FORas AND Zs OR WOME OEFENSE? ian Centr 1M Bron Opes te Css ut 5 BODDINGTON Legendary can ites Editorial Coverage SHOOTING RUGER'S TIMES
Slide 25: Editorial Coverage
Editorial Coverage SHEDDING IGHT ONTHE | 10'S COOL NEW JOHN WAYNE & 6.8 CHAMBERISSUE | U.S-MADEAK | THE WINCHESTER LOOP FIFLESHOOTE ALL AMERICAN RUGER'S GREAT NEW RIFLE FOR UNDER $500 ve SHG) a y EXCLUSIVE! & ee BIG GAME ' # BULLET GUIDE TOP WEIGHTS FOR POPULAR CALIBERS BALLISTIC (COEFFICIENT WHAT I
Slide 26: Social Media Presence
Social Media Presence Yul Ruger Firearms GES THE RUGER 22/45 LITE™ with Aluminum Upper weighs just 22.80 OUNCES! Featured Playlists GUN CHALLENGE Dpeconaceener Sturm, Ruger & Company, Inc. has pledged to donate $1 for each new Ruger firearm sold between the 2011 and 2012 NRA Annual Meetings, with th
Slide 27: $1 Million Gun Challenge
\2 2) MILLION GUN CHALLENGE
Slide 28: Inventory Reduction
Inventory Reduction ¢nmiticns; 2006 2007 2008 2009 2010 2011 Bh - pew Meterais a we BB = rivisnes cooas RUGG&@ED, RELIABLE FIREARM S Inventory Turns sun Asojuanuy 2006 2007 2008 2009 2010 2011 fia] = Raw Materials & WIP EB = Finished Goods ——— = Inventory Turns RUGGED, R ELLA BLE FIREARMS
Slide 29: Inventory Reduction
Inventory Reduction ¢nmiticns; if inventory tums had not improved, inventory would have been approximately $15 million greater from 2010. SUN] AJOJUAAU| 2007 2008 2009 2010 2011 iif = Raw Materials & WIP B = Finished Goods ———— = Inventory Turns = Inventory Reduced by Increased Tus @ RUGGED, RELIABL
Slide 30: 2011 Capital Allocation
2011 Capital Allocation ¢nmitions; a = Capital Expenditures By = Increased Corporate Cash i | = Share Repurchases | = Dividends Capital Expenditures ¢nmitions; 2005 2006 2007 +2008 2009 2010 2011 2012 (Projected) @ RUGGED, RELIABLE FIREARMS
Slide 31: 2011 Capital Expenditures
2011 Capital Expenditures (in minions) Ey = New Products BB = inirastructure | | = Other Shares Outstanding ¢n minions; Since September 2006, we repurchased 8.6 million shares (32% of the shares outstanding as of September 2006) for $63 million, an average repurchase price of $7.36 per share. 2008 2
Slide 32: TTM EPS vs. Stock Price
TIM EPS vs. Stock Price a0lld 400}$ Qi a2 Q3 G4 a1 Q2 03 4 Qt 02 03 a4 at 2009 2010 2011 2012 Wi = TTMEPS w= = Stock Price RUGGED, RELIABLE FIREARM S EBITDA Multiple vs. Stock Price Multiple > BDU 4901S Q1 a2 Q3 G4 Q1 G2 03 Q4 1 a2 03 O4 at 2009 2010 2011 2012 I = EBITDA Multiple ome = Stock Price
Slide 33: Stock Repurchase Guideline
Stock Repurchase Guideline ¢ If the earnings multiple remains flat, then the improvement in EPS from a stock repurchase is essentially offset by the decline in cash or increase in debt. The stock price should not change. The loyal shareholders who remain invested do not see their share price improve
Slide 34: Cash Balance
Cash Balance Gnminions) $96 million Since January 2011, major cash outflows included: Capital Expenditures: $25 million Dividends; $12 million Stock Repurchased: $2 million During that time, we increased our cash holdings by $38 million. 2010 =—— = Cash Balance RUGGEoD, RELIABLE FiREARM S Investor C
Slide 35: Investment Highlights
Investment Highlights * 63 years as one of the world’s leading firearms brands. ¢ Experienced and engaged Board of Directors. * Strong management team. ¢ Strong market position in rifles, revolvers and pistols. * We continue to outpace growth in the industry (NICs). ¢ Strong balance sheet; well posi
Slide 36: Caution: Forward Looking Statements
Caution: Forward Looking Statements Statements made in the course of this meeting that state the Company’s or Management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company’s actual results could differ mate