Michael O. Fifer

Thank you, Kevin.

Financial results. For the second quarter of 2012, net sales were $119.6 million and fully diluted earnings were $0.91 per share. For the corresponding period in 2011, net sales were $79.6 million and fully diluted earnings were $0.56 per share. This represents year-over-year sales growth for the quarter of 50% and earnings growth of 63%.

For the first half of 2012, net sales were $231.9 million and fully diluted earnings were $1.71 per share. For the corresponding period in 2011, net sales were $155.1 million and fully diluted earnings were $0.99 per share. This represents sales growth for the first half of 2012 of 50%, and earnings growth of 73%. In both the second quarter and the first half of 2012, our earnings growth exceeded our sales growth, and we're very proud of that.

New products. New product introductions remained a strong driver of demand and were $87.8 million or 38% of sales in the first half of 2012. As a reminder, we define new products as only those that were introduced in the past 2 years, and we include only major new products and not minor line extensions or additional calibers. The major new products introduced in the first half of 2012 include the 10/22 Takedown rifle, the Ruger American Rifle, the SR22 pistol and the 22/45 Lite pistol. To reiterate, more than 1/3 of our year-to-date sales were products that did not exist 2 years ago. This is a great achievement for our engineers and another testament to the importance of new product development.

Sell-through. The demand for Ruger products in the first half of 2012 is very strong as evidenced by the 59% growth in estimated sell-through of Ruger products from the independent wholesale distributors to retailers. We believe that some of this demand was attributable to political and economic factors that favorably impacted the entire firearms industry as evidenced by the 21% increase in the National Instant Criminal Background Check System background checks, which we call NICS. We believe that this -- our growth substantially outpaced the growth in NICS checks because of the popularity of our new products.

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