Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.LargeAct.

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2006:
2009:

The number of shares outstanding of the registrant’sregistrant's common stock as of February 15, 2007:
19, 2010:

Portions of the registrant’s Proxy Statement relating to the 2010 Annual Meeting of Stockholders to be held April 24, 200728, 2010 are incorporated by reference into Part III (Items 10 through 14) of this Report.

Most firearms are available in several models based upon caliber, finish, barrel length, and other features.  Many of the firearms introduced by the Company over the years have become “classics” which have retained their popularity for decades and are sought by collectors.

A rifle is a long gun with spiral grooves cut into the interior of the barrel to give the bullet a stabilizing spin after it leaves the barrel.  The Company presently manufactures twelve different types of rifles: the M77 Mark II, the M77 Hawkeye, the M77 Mark II Magnum, the 77/17, the 77/22, the 10/22, the Model 96/22, the Model 96/44, the Model 96/17, the Mini-14 Ranch Rifle, the Mini Thirty Ranch Rifle, and the No. 1 Single-Shot. Sales of rifles by the Company accounted for approximately $58.4$102.2 million, $58.0$69.4 million, and $61.1$64.9 million, of revenues for the years 2006, 20052009, 2008 and 2004,2007, respectively.

A shotgun is a long gun with a smooth barrel interior which fires lead or steel pellets.  The Company presently manufactures two different types of shotguns: the Red Label over-and-under shotgun available in 12, 20, and 28 gauge and the Gold Label side-by-side shotgun in 12 gauge. Most of the Red Label models are available in special Sporting Clays, English Field, and engraved versions. Sales of shotguns by the Company accounted for approximately $5.5$1.2 million, $9.7$1.5 million, and $6.8$3.8 million of revenues for the years 2006, 20052009, 2008 and 2004,2007, respectively.

A pistol is a handgun in which the ammunition chamber is an integral part of the barrel and which typically is fed ammunition from a magazine contained in the grip. The Company presently manufactures three different types of pistols: the Ruger Mark III .22 caliber in Standard, Competition, and Target models, the Ruger 22/45, and the P-Series centerfire autoloading pistols in various calibers, configurations, and finishes. Sales of pistols by the Company accounted for approximately $31.9$87.5 million, $32.5$52.5 million, and $24.8$33.4 million of revenues for the years 2006, 20052009, 2008 and 2004,2007, respectively.

A revolver is a handgun that has a cylinder that holds the ammunition in a series of chambers which are successively aligned with the barrel of the gun during each firing cycle.  There are two general types of revolvers, single-action and double-action.  To fire a single-action revolver, the hammer is pulled back to cock the gun and align the cylinder before the trigger is pulled.  To fire a double-action revolver, a single trigger pull advances the cylinder and cocks and releases the hammer.  The Company presently manufactures seven different types of single-action revolvers in a variety of calibers, configurations, and finishes: the New Model Single-Six, New Model Blackhawk, New Model Super Blackhawk, New Vaquero, Ruger Bisley Old Army Cap & Ball, New Bearcat, and Bisley Hunter revolvers. The Company presently manufactures four different types of double-action revolvers: the SP101, GP100,

The Company also manufactures and sells accessories and replacement parts for its firearms.  These sales accounted for approximately $4.4$17.4 million, $3.9$9.9 million, and $4.3$6.5 million of revenues for the years 2006, 20052009, 2008 and 2004,2007, respectively.

The Company is also engagedmanufactures and sells investment castings made from steel alloys for both outside customers and internal use in the manufacture of titanium and ferrous investmentfirearms segment.  Investment castings for a wide variety of markets including sporting goods and commercial and military use. The investment castings products manufactured by the Company consist of carbon and low alloy steels, stainless steels, air melted nickel and cobalt based alloys, and ductile iron. The Company produces various products for a number ofsold to outside customers, in a variety of industries.

Net sales attributable to the Company’s investment casting operations (excluding intercompany transactions) accounted for approximately $28.5$4.4 million, $21.9$7.1 million, and $20.7$12.3 million, or 17%approximately 2%, 14%4%, and 14%8% of the Company’s total net sales for 2006, 2005,2009, 2008, and 2004,2007, respectively.

The Company produces one model of pistol and all of its rifles, shotguns, and revolvers at the Newport, New Hampshire facility.  All other pistols and one model revolver, are produced at the Prescott, Arizona facility.

Many of the basic metal component parts of the firearms manufactured by the Company are produced by the Company’sCompany's castings facilities through a process known as precision investment casting.  See “Manufacturing-Investment Castings”"Manufacturing-Investment Castings" for a description of the investment casting process.  The Company initiated the use of this process in the production of component parts for firearms in 1953.  The Company believes that the investment casting process provides greater design flexibility and results in component parts which are generally close to their ultimate shape and, therefore, require less machining.machining than processes requiring machining a solid billet of metal to obtain a part.  Through the use of investment castings, the Company endeavors to produce durable and less costly component parts for its firearms.

All assembly, inspection, and testing of firearms manufactured by the Company are performed at the Company’sCompany's manufacturing facilities.  Every firearm, including every chamber of every revolver manufactured by the Company, is test-fired prior to shipment.

To produce a product by the investment casting method, a wax model of the part is created and coated (“invested”) with several layers of ceramic material.  The shell is then heated to melt the interior wax which is poured off, leaving a hollow mold. To cast the desired part, molten metal is poured into the mold and allowed to cool and solidify.  The mold is then broken off to reveal a near net shape cast metal part.

The Company’sCompany's firearms are primarily marketed through a network of selected licensedFederally-licensed independent wholesale distributors who purchase the products directly from the Company.  They resell to Federally-licensed retail firearms dealers who in turn resell to legally authorized end-users.  All retail purchasers are subject to a point-of-sale background check by law enforcement.  These end-users include sportsmen, hunters, law enforcement and other governmental organizations, and gun collectors.  Each distributor carries the entire line of firearms manufactured by the Company for the commercial market. Currently, 1614 distributors service the domestic commercial market, with an additional 1219 distributors servicing the domestic law enforcement market and two distributors servicing the Canadian market. FourFive of the Company’s distributors service both the domestic commercial market and the domestic law enforcement market.  In 2006, Lipsey’s, Inc. accounted for 13% and 11% of net firearms sales and consolidated sales, respectively. AcuSport Corporation

One customer accounted for approximately 13%15%, 18% and 13% of net firearm sales and 15%, 17% and 12%, of net firearms sales and 10%, 11%, and 10% of consolidated net sales in 2006, 2005,2009, 2008, and 2004,2007, respectively.  Jerry’s Sport CenterA second customer accounted for approximately 12%11%, and 13%, of the Company’s net firearms sales and 10% and 11% of consolidated net sales in 2005, and 2004, respectively. Sports

The Company employs eight employees and one independent contractor who service these distributors and call on dealers and law enforcement agencies.  Because the ultimate demand for the Company’sCompany's firearms comes from end-users, rather than from the Company’sCompany's distributors, the Company believes that the loss of any distributor would not have a material long-term adverse effect on the Company, but may have a material impact on the Company’s financial results for a particular period.  The Company considers its relationships with its distributors to be satisfactory.

The Company also exports its firearms through a network of selected commercial distributors and directly to certain foreign customers, consisting primarily of law enforcement agencies and foreign governments.  Foreign sales were less than 5%6% of the Company’sCompany's consolidated net sales for each of the past three fiscal years.  No material portion of the Company’s business is subject to renegotiation of profits or termination of contracts at the election of a government purchaser.

Effective December 1, 2006 the Company changed the manner in which distributors order firearms, and began receiving firm, non-cancelable purchase orders on a frequent basis from each of its distributors, with most orders for immediate delivery.  As of February 15, 2007,1, 2010, the order backlog iswas approximately $24$70 million.  The significant reduction from the $107 millionAs of February 1, 2009, order backlog at March 1, 2006 is directly attributable to the change in the manner in which distributors now order firearms.was approximately $87 million.  

The Company does not consider its overall firearms business to be predictably seasonal; however, sales of certainmany models of firearms are usually lower in the third quarter of the fiscal year.

The investment casting segment’ssegment's principal markets are commercial, sporting goods, and military.  Sales are made directly to customers or through manufacturers’ representatives. The Company produces various products for a number of customers in a variety of industries, including over 20approximately 24 firearms and firearms component manufacturers.  The investment castings segment provides castings for the Company’s firearms segment.  The Company continues to evaluate the viability and profitability of the commercial castings market.

Competition in the firearms industry is intense and comes from both foreign and domestic manufacturers.  While some of these competitors concentrate on a single industry product category, such as rifles or pistols, several competitors manufacture products in allthe same four industry categories as the Company (rifles, shotguns, pistols, and revolvers).  Some of these competitors are subsidiaries of larger corporations than the Company with substantially greater financial resources than the Company, which could affect the Company’s ability to compete. The principal methods of competition in the industry are product innovation, quality, availability, and price.  The Company believes that it can compete effectively with all of its present competitors based upon innovation, high quality, reliability, and performance of its products, and the competitiveness of its pricing.competitors.

There are a large number of investment castings manufacturers, both domestic and foreign, with which the Company competes.  Competition varies based on the type of investment castings products and the end-use of the product (commercial, sporting goods, or military).  Many of these competitors are larger corporations than the Company with substantially greater financial resources than the Company, which could affect the Company’s ability to compete with these competitors.  The principal methods of competition in the industry are quality, price, and production lead time.  The Company believes that it can compete effectively with its present domestic competitors.  However, it is unknown at this time if the Company can compete with foreign competitors in the long-term.

As of February 1, 2007,2010, the Company employed 1,100approximately 1,150 full-time employees of which approximately 64%54% had at least ten years of service with the Company.  In January 2007, 56 of the Company’s Newport, New Hampshire employees accepted the Company’s voluntary reduction-in-force program. The associated severance expense is estimated at $1.0 million and the associated annualized savings are estimated at $2.3 million.

None of the Company’sCompany's employees are subject to a collective bargaining agreement.  The Company has never experienced a strike during its history and believes its employee relations are satisfactory.

In 2006, 2005,2009, 2008, and 2004,2007, the Company spent approximately $0.6$2.0 million, $0.8$1.5 million, and $0.9$0.7 million, respectively, on research activities relating to the development of new products and the improvement of existing products.  As of February 15, 2007,2010, the Company had approximately 2517 employees engaged inwhose primary responsibilities were research and development activities as part of their responsibilities.activities.

The Company owns various United States and foreign patents and trademarks which have been secured over a period of years and which expire at various times. It is the policy of the Company to apply for patents and trademarks whenever new products or processes deemed commercially valuable are developed or marketed by the Company.  However, none of these patents and trademarks are considered to be basic to any important product or manufacturing process of the Company and, although the Company deems its patents and trademarks to be of value, it does not consider its business materially dependent on patent or trademark protection.

The Company is committed to achieving high standards of environmental quality and product safety, and strives to provide a safe and healthy workplace for its employees and others in the communities in which it operates.  The Company has programs in place that monitor compliance with various environmental regulations. However, 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.  These regulations are integrated into the Company’s manufacturing, assembly, and testing processes.  The Company believes that it is generally in compliance with applicable environmental regulations and the outcome of any environmental

Set forth below are the names, ages, and positions of the executive officers of the Company.  Officers serve at the pleasurediscretion of the Board of Directors of the Company.

Michael O. Fifer joined the Company as Chief Executive Officer on September 25, 2006, and was named to the Board of Directors on October 19, 2006.  Prior to joining the Company, Mr. Fifer was President of the Engineered Products Division of Mueller Industries, Inc.  Prior to joining Mueller Industries, Inc., Mr. Fifer was President, North American Operations, Watts Water Technologies.

Thomas A. Dineen became Vice President on May 24, 2006.  Previously he served as Treasurer and Chief Financial Officer since May 6, 2003 and had been Assistant Controller since 2001.  Prior to that, Mr. Dineen had served as Manager, Corporate Accounting since 1997.

Mark T. Lang joined the Company as Group Vice President on February 18, 2008.  Mr. Lang is responsible for management of the Prescott Firearms Division and the Company’s acquisition efforts.  Prior to joining the Company, Mr. Lang was President of the Custom Products Business at Mueller Industries, Inc.  Prior to joining Mueller, Mr. Lang was the Vice President of Operations for the Company’s Prescott, Arizona FirearmsAutomotive Division of Thomas and Foundry Divisions on March 17, 2006. Previously he served as General Manager of Prescott Operations since 2002 and General Manager of Prescott Firearms Division from 1990 to 2002. Mr. Stutler joined the Company in 1987.Betts, Inc.

Thomas P. Sullivan joined the Company as Vice President of Newport Operations for the Newport, New Hampshire Firearms and Pine Tree Castings divisions on August 14, 2006. Prior to joining the Company, Mr. Sullivan was Vice President of Lean Enterprises at IMI Norgren Ltd.

Leslie M. Gasper has been Secretary of the Company since 1994.  Prior to this, she was the Administrator of the Company’s pension plans, a position she held for more than five years prior thereto.

The Company is a reporting company and is therefore subject to the informational requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act"), and accordingly files its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K, and other information with the Securities and Exchange Commission (the “SEC”"SEC"). The public may read and copy any materials filed with the SEC at the SEC’sSEC's Public Reference Room at 100 F Street NE, Washington, DC 20549.  Please call the SEC at (800) SEC-0330 for further information on the Public Reference Room.  As an electronic filer, the Company’sCompany's public filings are maintained on the SEC’sSEC's Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.  The address of that website is http://www.sec.gov.

The Company makes its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Definitive Proxy Statements, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act accessible free of charge through the Company’sCompany's Internet site after the Company has electronically filed such material with, or furnished it to, the SEC. The address of that website is http://www.ruger.com.  However, such reports may not be accessible through the Company’sCompany's website as promptly as they are accessible on the SEC’s website.

Additionally, the Company’s corporate governance materials, including its Corporate Governance Guidelines;Guidelines, the charters of the Audit, Compensation, and Nominating and Corporate Governance committees;committees, and the Code of Business Conduct and Ethics may also be found under the “Stockholder Relations” section of the Company’s Internet site at www.ruger.com. A copy of the foregoing corporate governance materials are available upon written request of the Corporate Secretary at Sturm, Ruger & Company, Inc., Lacey Place, Southport, Connecticut 06890.

In evaluating the Company’s business, the following risk factors, as well as other information in this report, should be carefully considered.

The sale, purchase, ownership, and use of firearms are subject to thousands of federal, state and local governmental regulations.  The basic federal laws are the National Firearms Act, the Federal Firearms Act, and the Gun Control Act of 1968.  These laws generally prohibit the private ownership of fully

Until November 30, 1998, the “Brady Law” mandated a nationwide five-day waiting period and background check prior to the purchase of a handgun.  As of November 30, 1998, the National Instant Check System, which applies to both handguns and long guns, replaced the five-day waiting period.  The Company believes that the “Brady Law” and the National Instant Check System have not had a significant effect on the Company’s sales of firearms, nor does it anticipate any impact on sales in the future.  On September 13, 1994, the “Crime Bill” banned so-called “assault weapons.”  All the Company’s then-manufactured commercially-sold long guns were exempted by name as “legitimate sporting firearms.”  This ban expired by operation of law on September 13, 2004.  The Company remains strongly opposed to laws which would restrict the rights of law-abiding citizens to lawfully acquire firearms. The Company believes that the lawful 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.

As of December 31, 2006,2009, the Company iswas a defendant in approximately fourseven (7) lawsuits allegedly involving its products and is aware of certain other such claims.  

Lawsuits and claimsinvolving the Company’s products generally fall into one of two categories:

As to lawsuits of financial resources andthe first type, management time in connection with product liability litigation. Management believes that, in every case involving firearms, the allegations are unfounded, and that the shootings and any results therefrom were due to negligence or misuse of the firearms by third-parties or the claimant, and that there should be no recovery against the Company.  Defenses further exist to the suits brought by cities, municipalities, counties, and a state attorney general based, among other reasons, on established state law precluding recovery by municipalities for essential government services, the remoteness of the claims, the types of damages sought to be recovered, and limitations on the extraterritorial authority which may be exerted by a city, municipality, county or state under state and federal law, including State and Federal Constitutions. Also, “The Protection of Lawful Commerce in Arms Act” signed into law on October 26, 2005 on its face requires dismissal of such claims.

The only case against the Company alleging liability for criminal shootings by third-parties to ever be permitted to go before a constitutional jury,Hamilton, et al. v. Accu-tek, et al., resulted in a defense verdict in favorremaining lawsuit of the Company on February 11, 1999. Insecond type is the lawsuit filed by the City of Gary.  The complaint in that case numerous firearms manufacturersseeks damages, among other things, for the costs of medical care, police and distributors had been sued, alleging damagesemergency services, public health services, and other services as well as punitive damages.  In addition, nuisance abatement and/or injunctive relief is sought to change the design, manufacture, marketing and distribution practices of the various defendants.  The suit alleges, among other claims, negligence in the design of products, public nuisance, negligent distribution and marketing, negligence per se and deceptive advertising.  The case does not allege a specific injury to a specific individual as a result of alleged negligent sales practices and “industry-wide” liability. The Company and its marketing and distribution practices were exonerated fromthe misuse or use of any claims of negligence in each of the seven cases decided by the jury. In subsequent proceedings involving other defendants, the New York Court of Appeals as a matter of law confirmed that 1) no legal duty existed under the circumstances to prevent or investigate criminal misuses of a manufacturer’s lawfully made products; and 2) liability of firearms manufacturers could not be apportioned under a market share theory. More recently, the New York Court of Appeals on October 21, 2003 declined to hear the appeal from the decision of the New York Supreme Court, Appellate Division, affirming the dismissal of New York Attorney General Eliot Spitzer’s public nuisance suit against the Company and other manufacturers and distributors of firearms. In its decision, the Appellate Division relied heavily onHamilton in concluding that it was “legally inappropriate,” “impractical,” “unrealistic” and “unfair” to attempt to hold firearms manufacturers responsible under theories of public nuisance for the criminal acts of others.

Punitive damages, as well as compensatory damages, are commonly demanded in manycertain of the lawsuits and claims brought against the Company.claims.  Aggregate claimed amounts maypresently exceed product liability accruals and applicable insurance coverage.  For claims made after July 10, 2000, coverage is provided on an annual basis for losses exceeding $5 million per claim, or an aggregate maximum loss of $10 million annually, except for certain new claims which might be brought by governments or municipalities after July 10, 2000, which are excluded from coverage.

Product liability claim payments are made when appropriate if, as, and when claimants and the Company reach agreement upon an amount to finally resolve all claims.  Legal costs are paid as the lawsuits and claims develop, the timing of which may vary greatly from case to case.  A time schedule cannot be determined in advance with any reliability concerning when payments will be made in any given case.

Provision is made for product liability claims based upon many factors related to the severity of the alleged injury and potential liability exposure, based upon prior claim experience.  Because our experience in defending these lawsuits and claims is that unfavorable outcomes are typically not probable or estimable, only in rare cases is an accrual established for such costs.  In most cases, an accrual is established only for estimated legal defense costs.  Product liability accruals are periodically reviewed to reflect then-current estimates of possible liabilities and expenses incurred to date and reasonably anticipated in the future.  Threatened product liability claims are reflected in our product liability accrual on the same basis as actual claims; i.e., an accrual is made for reasonably anticipated possible liability and claims-handling expenses on an ongoing basis.

A range of reasonably possible loss relating to unfavorable outcomes cannot be made.  Currently, there are noHowever, in product liability cases in which a dollar amount of damages is claimed. If there were cases with claimed, damages, the amount of damages claimed, would bewhich totaled $7.7 million and $12.2 at December 31, 2009 and 2008, respectively, are set forth as an indication of possible maximum liability that the Company might be required to incur in these cases (regardless of the likelihood or reasonable probability of any or all of this amount being awarded to claimants) as a result of adverse judgments that are sustained on appeal.

As of December 31, 20062009 and 2005,2008, the Company was a defendant in 45 and 6 lawsuits, respectively, involving its products and is aware of other such claims.  During the year ended December 31, 20062009 and 2005,2008, respectively, 2 and 31 claims were filed against the Company, 2 and 50 claims were dismissed, and 21 and 10 claims were settled. The average cost per settled claim was $47,000 and $150,000 in 2006 and 2005, respectively.

During the years ended December 31, 20062009 and 2005,2008, the Company incurred product liability expense of $2.5$1.6 million and $4.9$0.9 million, respectively, which includes the cost of outside legal fees, insurance, and other expenses incurred in the management and defense of product liability matters.

The Company management monitors the status of known claims and the product liability accrual, which includes amounts for asserted and unasserted claims.  While it is not possible to forecast the outcome of litigation or the timing of costs, in the opinion of management, after consultation with special and corporate counsel, it is not probable and is unlikely that litigation, including punitive damage claims, will have a material adverse effect on the financial position of the Company, but may have a material impact on the Company’s financial results for a particular period.

A roll-forward of the product liability reserve and detail of product liability expense for the results of those cases, where terminated, to the S.E.C. on its previous Form 10-K and 10-Q reports, to which reference is hereby made.three years ended December 31, 2009 follows:

There were no insurance recoveries during any of the above years.

The Company is subject to numerous federal, state and local laws and governmental regulations and related state laws. These laws generally relate to potential obligations to remove or mitigate the environmental effects of the disposal or release of certain pollutants at the Company’s manufacturing facilities and at third-party or formerly owned sites at which contaminants generated by the Company may be located. This requires the Company to make capital and other expenses.

The Company is committed to achieving high standards of environmental quality and product safety, and strives to provide a safe and healthy workplace for its employees and others in the communities in which it operates. In an effort to comply with federal and state laws and regulations, the Company has programs in place that monitor compliance with various environmental regulations. However, in the normal course of its 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. However, the Company cannot assure that the outcome of any environmental proceedings and orders will not have a material adverse effect on the business.

The Newport, New Hampshire and Prescott, Arizona facilities are critical to the Company’s success. These facilities house the Company’s principal production, research, development, engineering, design, and shipping. Any event that causes a disruption of the operation of either of these facilities for even a relatively short period of time might have a material adverse affect on the Company’s ability to produce and ship products and to provide service to its customers.

Third parties supply the Company with various raw materials for its firearms and castings, such as fabricated steel components, walnut, birch, beech, maple and laminated lumber for rifle and shotgun stocks, wax, ceramic material, metal alloys, various synthetic products and other component parts.  There is a limited supply of these materials in the marketplace at any given time, which can cause the purchase prices to vary based upon numerous market factors.  The Company believes that it has adequate quantities of raw materials in inventory to provide ample time to locate and obtain additional items at then-current market cost without interruption of its manufacturing operations.  However, if market conditions result in a significant prolonged inflation of certain prices or if adequate quantities of raw materials can not be obtained, the Company’s manufacturing processes could be interrupted and the Company’s financial condition or results of operations could be materially adversely affected.

Each facility contains enclosed ranges for testing firearms and Financing
Capital expendituresalso contains modern tool room facilities. The lease of the Prescott facility provides for rental payments, which are approximately equivalent to estimated rates for real property taxes.  The Company consolidated its casting operations in 2006 totaled $3.9 million. Forits Newport, New Hampshire foundry in 2007.