- Sales Increased 21% to $803
Million, GAAP EPS Rose 26% to $2.16 and Adjusted EPS Rose 33% to $2.31
- EBIT and EBITDA Margins of 21% and 24%, Respectively; Net
Debt Leverage Ratio of 0.7x
- Enters Definitive Agreements to Purchase Simms Fishing and
Fox Racing Expanding Iconic Brand Portfolio
- Updates FY23 Guidance to Reflect Continued Growth and
Profitability Expansion
- Expects FY23 Sales of $3.3
Billion, up 7% at Midpoint, 20% EBIT Margin, and 21% EBITDA
Margin
- Capital Allocation Strategy Shifts to Using Strong Free Cash
Flow for Debt Repayment
ANOKA,
Minn., July 27, 2022 /PRNewswire/ -- Vista
Outdoor Inc. (NYSE: VSTO), the parent company of 39 renowned brands
that design, manufacture and market sporting and outdoor products
to consumers around the globe, today reported financial results for
the first quarter of Fiscal Year 2023 (FY23), which ended on
June 26, 2022.
"There is no doubt that companies are operating in a tough
environment with rising inflation and supply chain challenges,"
said Chris Metz, Chief Executive
Officer. "Despite that, we posted a great first quarter and
we've taken these impacts into account in our fiscal year
guidance. We have built a nimble culture and have empowered
our brands to make the best decisions for their businesses and
consumers. We have also maintained an optimized and lean cost
structure to allow us to succeed in a variety of economic and
operational environments and have action plans to further control
costs if necessary. Our strong first quarter results reflect
these collective efforts, continued strength in outdoor
participation levels, and our financial discipline in making the
most optimal investments to drive long-term growth and unlock
shareholder value.
"I am very proud of the work our teams have accomplished in the
first quarter and equally excited to welcome Simms Fishing and Fox
Racing, both strategic acquisitions and iconic brands that are
highly complementary to our Outdoor Products portfolio. I am
also confident in our future as we prepare to separate our Sporting
Products and Outdoor Products segments into two independent,
publicly-traded companies. Following the separation, each
company will have size, scale, leading brands and a capital
structure that will allow it to be successful and further unlock
shareholder value. Upon the successful close of the Fox and Simms
acquisitions, our Outdoor Products business will be one of the
largest companies in the outdoor products space in terms of annual
sales, housing nine power brands with more than $100 million in annual sales each. Equally
as exciting is our Sporting Products business, which just posted
another record sales quarter. Sporting Products' continued
success is demonstrating that new participants in shooting sports
have created a new, elevated base of demand that will allow that
business to generate solid cash flow and returns for its
shareholders for years to come. Our future is bright, our business
fundamentals remain strong, and we have highly talented teams to
effectively navigate through the current environment," concluded
Metz.
For the three months ended June 26, 2022 versus the
three months ended June 27, 2021:
- Sales increased 21 percent to $803
million driven by strong double-digit growth in Sporting
Products, partially offset by a 2 percent decline in Outdoor
Products primarily driven by Outdoor Accessories.
- Gross profit rose 22 percent to $293
million and gross profit margin improved by 15 basis points
to 37 percent.
- Operating expenses were $121
million, up nearly 24 percent, primarily driven by
acquisitions.
- Earnings before interest and taxes (EBIT) increased 20 percent
to $172 million. Adjusted EBIT rose
26 percent to $183 million. Adjusted
EBIT margins increased 87 basis points to 23 percent.
- Earnings before interest, taxes, depreciation, and amortization
(EBITDA) increased 20% to $192
million. Adjusted EBITDA rose 25 percent to $203 million. Adjusted EBITDA margins increased
83 basis points to 25 percent.
- Fully Diluted Earnings per Share (EPS) was $2.16, up 26 percent, compared with $1.71. Adjusted EPS was $2.31, up 33 percent, compared with $1.74.
- Cash flow provided by operating activities was $108 million, compared with $29 million. Free cash flow generation was
$108 million, compared with
$36 million, driven primarily by
higher net income and improved working capital.
For the three months ended June 26, 2022 segment results
versus the three months ended June 27, 2021:
Sporting Products
- Sales rose 40 percent to $511
million, driven by strong growth across all calibers. Volume
was the largest contributor to growth and pricing to a much lesser
extent.
- Gross profit increased 35 percent to $201 million. Margin expansion was driven by
higher volume, improved mix and higher pricing, partially offset by
higher commodity and freight costs.
- EBIT increased 41 percent to $176
million driven by higher gross profit and selling, general
and administrative expense leverage.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased 39 percent to $182
million. EBITDA margins decreased 28 basis points to 36
percent.
Outdoor Products
- Sales decreased 2 percent to $292
million primarily driven by Outdoor Accessories which was
partially offset by growth in Outdoor Recreation. The prior year
period reflected benefits from stimulus checks, a lower
inflationary environment and higher-than-average sell-in to
replenish low channel inventory and meet elevated demand.
- Gross profit remained flat at $93
million, primarily due to lower Outdoor Accessories sales
and higher transportation and freight costs, offset by the addition
of accretive acquisitions.
- EBIT decreased 36 percent to $28
million primarily driven by lower sales and higher selling,
general and administrative expenses from the addition of
acquisitions.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) decreased 24 percent to $39
million. EBITDA margins decreased 381 basis points to 14
percent.
Please see the tables in the press release for a reconciliation
of non-GAAP operating expense, EBIT, EBITDA, taxes, net
income, earnings per share, free cash flow and EBITDA margins to
the comparable GAAP measures.
Share Repurchases
As of June 26, 2022, the Company
had repurchased 362,203 shares for a total of approximately
$14 million as part of the
$200 million share repurchase program
approved by the Board of Directors and announced on January 31, 2022. The former $100 million share repurchase program was
completed in fiscal year 2022.
Outlook for Fiscal Year 2023
"We posted a strong first quarter with total and organic sales
growth and expanding profitability. We also saw stronger operating
leverage during our first quarter as compared to the prior year
period and sequentially from fourth quarter fiscal year 2022.
However, we are mindful of the current macroeconomic landscape and
being prudent about our cost structure and capital allocation
strategy," said Sudhanshu
Priyadarshi, Chief Financial Officer of Vista Outdoor. "Our
net debt leverage ratio at the end of the first quarter was well
below our targeted ratio of one to two times. Following our
recent acquisitions, we expect to be well within that targeted
range at approximately 1.6 times. With strong free cash flow,
our capital allocation strategy now shifts to focus on debt
repayment and opportunistic share repurchases before we spin-off
the Outdoor Products segment. We are tracking ahead of pace to
complete the spin-off in calendar year 2023 and excited about the
future of both segments as we seek to further unlock shareholder
value."
Vista Outdoor is updating its outlook for Fiscal Year 2023 to
reflect current visibility into the global macroeconomic
environment. This guidance, which also assumes Fox Racing and Simms
Fishing close by the end of the second quarter, is as follows:
- Sales in the range of $3.200
billion to $3.325 billion, up
7 percent at the midpoint
-
- Sporting Products sales expected to be approximately
$1.725 billion to $1.775 billion
- Outdoor Products sales expected to be approximately
$1.475 billion to $1.550 billion
- Adjusted EBITDA margin in the range of 21.0 percent to 21.5
percent
- Earnings per share (EPS) in the range of $6.90 to $7.50 and
adjusted earnings per share (EPS) in the range of $7.05 to $7.65
- Free cash flow in the range of $310
million to $360 million
- Effective and adjusted tax rate of approximately 24
percent
- Interest expense in the range of $50
million to $55 million
- Capital expenditures as a percent of sales to be approximately
one percent to two percent
- R&D expenditure growth in the range of 35 percent to 40
percent
Earnings Conference Call Webcast Information
Vista Outdoor will hold an investor conference call to discuss
its first quarter FY23 financial results and outlook on
July 28, 2022, at 9:00 a.m. ET. The conference call will be
accessible through live webcast. Interested investors and other
individuals can access the webcast and view and/or download the
earnings press release, including a reconciliation of non-GAAP
financial measures, and the related earnings release presentation
slides, which will also include detailed segment information, via
Vista Outdoor's website (www.vistaoutdoor.com). Choose "Investors"
then "Events and Presentations". For those who cannot participate
in the live webcast, a telephone recording of the conference call
will be available until August 25,
2022. The telephone number is 866-813-9403, and the
confirmation code is 313702.
Reconciliation of Non-GAAP Financial Measures
In addition to the results prepared in accordance with GAAP, we
are providing the information below on a non-GAAP basis, including,
adjusted gross profit, adjusted operating expenses, adjusted
earnings before interest and tax (EBIT), adjusted taxes, adjusted
net income, and adjusted fully diluted earnings per share (EPS).
Vista Outdoor defines these measures as, gross profit, operating
expenses, EBIT, taxes, net income, and EPS excluding, where
applicable, the impact of costs incurred for transaction costs,
contingent consideration, transition costs, post-acquisition
compensation, planned separation costs, and inventory step-up.
Vista Outdoor management is presenting these measures so a reader
may compare gross profit, operating expenses, EBIT, taxes, net
income, and EPS excluding these items, as the measures provide
investors with an important perspective on the operating results of
the Company. Vista Outdoor management uses this measurement
internally to assess business performance, and Vista Outdoor's
definition may differ from those used by other companies.
Three months ended
June 26, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
Operating
Expenses
|
|
EBIT
|
|
Taxes
|
|
Net
Income
|
|
EPS
|
|
As reported
|
|
$
293,470
|
|
$
121,045
|
|
$
172,425
|
|
$
(40,100)
|
|
$
126,015
|
|
$
2.16
|
|
Transaction
costs
|
|
—
|
|
(2,086)
|
|
2,086
|
|
(515)
|
|
1,571
|
|
0.03
|
|
Contingent
consideration
|
|
—
|
|
112
|
|
(112)
|
|
28
|
|
(84)
|
|
—
|
|
Transition
costs
|
|
—
|
|
(272)
|
|
272
|
|
(68)
|
|
204
|
|
—
|
|
Post-acquisition
compensation
|
|
—
|
|
(4,332)
|
|
4,332
|
|
(660)
|
|
3,672
|
|
0.06
|
|
Planned separation
costs
|
|
—
|
|
(4,300)
|
|
4,300
|
|
(1,075)
|
|
3,225
|
|
0.06
|
|
As adjusted
|
|
$
293,470
|
|
$
110,167
|
|
$
183,303
|
|
$
(42,390)
|
|
$
134,603
|
|
$
2.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 27, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
Operating
Expenses
|
|
EBIT
|
|
Taxes
|
|
Net
Income
|
|
EPS
|
|
As reported
|
|
$
241,427
|
|
$ 97,771
|
|
$
143,656
|
|
$
(35,253)
|
|
$
102,725
|
|
$
1.71
|
|
Inventory step-up
expense
|
|
384
|
|
—
|
|
384
|
|
(96)
|
|
288
|
|
—
|
|
Transaction
costs
|
|
—
|
|
(949)
|
|
949
|
|
(61)
|
|
888
|
|
0.01
|
|
Transition
costs
|
|
—
|
|
(99)
|
|
99
|
|
(25)
|
|
74
|
|
—
|
|
Post -acquisition
compensation
|
|
—
|
|
(546)
|
|
546
|
|
—
|
|
546
|
|
0.01
|
|
As adjusted
|
|
$
241,811
|
|
$ 96,177
|
|
$
145,634
|
|
$
(35,435)
|
|
$
104,521
|
|
$
1.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*NOTE: Adjustments to "as reported"
results are items that are excluded to arrive at the "as adjusted"
results for the quarters ended June 26, 2022 and June 27,
2021. EPS amounts may not foot due to rounding.
|
Three months ended June 26,
2022
During the three months ended June 26, 2022, we incurred
transaction costs associated with possible and actual transactions,
including advisory and legal fees. Given the nature of transaction
costs, and differences in these amounts from one transaction to
another, the company believes these costs are not indicative of
ongoing operations of the company. A portion of the transaction
costs are not deductible for tax and we applied a 0 percent blended
tax rate and the portion that is deductible we applied a blended
tax rate of 25 percent.
During the three months ended June 26, 2022, we recognized
non-cash expenses for the change in the estimated fair value of the
contingent consideration payable related to our HEVI-Shot
acquisitions. Given the infrequent and unique nature of these
acquisitions, the company believes these costs are not indicative
of ongoing operations. The tax effect of the contingent
consideration costs that are deductible for tax was calculated
based on a blended tax rate of approximately 25 percent.
During the three months ended June 26, 2022, we incurred
transition costs for our Foresight, Fiber Energy, Stone Glacier,
Remington, and QuietKat businesses to integrate into the company
such as retention, professional fees and travel costs. Given the
infrequent and unique nature of these acquisitions, the company
believes these costs are not indicative of ongoing operations. The
tax effect of the transition costs that are deductible for tax was
calculated based on a blended tax rate of approximately 25
percent.
During the three months ended June 26, 2022, we incurred
post-acquisition compensation expense related to employee retention
payments in connection with the Foresight, Stone Glacier, and
QuietKat acquisitions. Given the infrequent and unique nature of
these acquisitions, we believe these costs are not indicative of
ongoing operations. A portion of the post-acquisition compensation
expenses are not deductible for tax, to which we applied a 0
percent blended tax rate. We applied a blended tax rate of 25
percent to the portion that is deductible.
On May 5, 2022, we announced that
our Board of Directors has unanimously approved preparations for
the separation of our Outdoor Products and Sporting Products
reportable segments into two independent, publicly-traded
companies. During the three months ended June 26, 2022, we
incurred costs associated with the planned separation, including
advisory and legal fees. Given the nature of transaction costs, and
differences in these amounts from one transaction to another, the
company believes these costs are not indicative of ongoing
operations of the company. We applied a blended tax rate of 25
percent.
As noted above, our reported tax expense of $(40,100) results in a tax rate of 24.1 percent
and our adjusted tax expense of $(42,390) results in an adjusted tax rate of 24.0
percent.
Three months ended June 27,
2021
During the three months ended June 27,
2021, we incurred cost of goods sold related to the fair
value step-up in inventory allocated from the HEVI-Shot acquisition
purchase price. Given the infrequent and unique nature of this
acquisition, the company believes these costs are not indicative of
ongoing operations. The tax effect of the amortization expense that
is deductible for tax was calculated based on a blended statutory
rate of approximately 25 percent.
During the three months ended June 27,
2021, we incurred transaction costs associated with possible
and actual transactions, including advisory and legal fees. Given
the nature of transaction costs, and differences in these amounts
from one transaction to another, the company believes these costs
are not indicative of ongoing operations of the company. A portion
of the transaction costs are not deductible for tax and we applied
a 0 percent blended tax rate and the portion that is deductible we
applied a blended tax rate of 25 percent.
During the three months ended June 27,
2021, we incurred transition costs for the Remington,
HEVI-Shot, QuietKat and Venor business to integrate the business
into the company such as severance, retention, professional fees
and travel costs. Given the infrequent and unique nature of this
acquisition, the company believes these costs are not indicative of
ongoing operations. The tax effect of the transition costs that are
deductible for tax was calculated based on a blended statutory rate
of approximately 25 percent.
During the three months ended June 27,
2021, we incurred post-acquisition compensation expense
related to the QuietKat acquisition. Given the infrequent and
unique nature of this acquisition, the company believes these costs
are not indicative of ongoing operations. The post-acquisition
compensation is not deductible for tax, therefore this was
calculated based on a statutory rate of 0 percent.
As noted above, our reported tax expense of $(35,253) results in a tax rate of 25.5 percent
and our adjusted tax expense of $(35,435) results in an adjusted tax rate of 25.3
percent.
Free Cash Flow
Free cash flow is defined as cash provided by operating
activities less capital expenditures, and excluding the following
costs which have been adjusted for applicable tax amounts:
inventory step-up, transaction and transition costs paid to date,
contingent consideration, post-acquisition compensation, and
planned separation costs. Vista Outdoor management believes free
cash flow provides investors with an important perspective on the
cash available for debt repayment, share repurchases and
acquisitions after making the capital investments required to
support ongoing business operations. Vista Outdoor management uses
free cash flow internally to assess both business performance and
overall liquidity.
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
(in
thousands)
|
|
June 26,
2022
|
|
June 27,
2021
|
|
Projected year
ending
March 31, 2023
|
|
Cash provided by
operating activities
|
|
$
107,577
|
|
$
28,772
|
|
$336,574–$421,074
|
|
Capital
Expenditures
|
|
(4,910)
|
|
(6,876)
|
|
~(32,000-66,500)
|
|
Inventory step-up
expense
|
|
—
|
|
(96)
|
|
—
|
|
Transaction
costs
|
|
2,701
|
|
888
|
|
2,701
|
|
Contingent
consideration
|
|
28
|
|
—
|
|
28
|
|
Transition
costs
|
|
48
|
|
74
|
|
48
|
|
Post-acquisition
compensation
|
|
(576)
|
|
13,000
|
|
(576)
|
|
Planned separation
costs
|
|
3,225
|
|
—
|
|
3,225
|
|
Free cash
flow
|
|
$
108,093
|
|
$
35,762
|
|
$310,000–$360,000
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share - Guidance Reconciliation
Table
The projected adjusted earnings per share (EPS), excluding the
impact of costs incurred to date for inventory step-up expense,
transaction costs, contingent consideration, transition costs,
post-acquisition compensation, and planned separation costs is a
non-GAAP financial measure that Vista Outdoor defines as EPS
excluding the impact of these items. Vista Outdoor management is
presenting this measure so a reader may compare EPS, excluding
these items, as this measure provides investors with an important
perspective on the operating results of the company. Vista Outdoor
management uses this measurement internally to assess business
performance, and Vista Outdoor's definition may differ from those
used by other companies.
|
|
|
|
|
|
Current FY23
Full-Year Adjusted EPS Guidance
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
EPS guidance including
transaction costs, contingent consideration, transition costs,
and post-acquisition compensation
|
|
$
6.90
|
|
$
7.50
|
|
Transaction
costs
|
|
0.03
|
|
0.03
|
|
Contingent
consideration
|
|
—
|
|
—
|
|
Transition
costs
|
|
—
|
|
—
|
|
Post-acquisition
compensation
|
|
0.06
|
|
0.06
|
|
Planned separation
costs
|
|
0.06
|
|
0.06
|
|
Adjusted EPS
guidance
|
|
$
7.05
|
|
$
7.65
|
|
|
|
|
|
|
|
|
|
*NOTE: EPS
amounts may not foot due to rounding.
|
EBITDA Non-GAAP Reconciliation Tables
EBITDA margin is defined as EBITDA (earnings before interest,
taxation, depreciation and amortization) divided by net sales.
Vista Outdoor management believes EBITDA margin provides investors
with an important perspective on the Company's core profitability
and helps investors analyze underlying trends in the Company's
business and evaluate its performance on an absolute basis and
relative to its peers. EBITDA margin should be considered in
addition to, and not as a substitute for, GAAP net profit margin.
Vista Outdoor's definition may differ from that used by other
companies. Adjusted EBITDA is defined as EBITDA excluding the
non-recurring and non-cash items referenced above.
|
|
Three months ended
June 26, 2022
|
|
(in
thousands)
|
|
Sporting
Products
|
|
Outdoor
Products
|
|
Corporate
|
|
Total
|
|
Net Income
|
|
$
176,086
|
|
$
27,686
|
|
$
(77,757)
|
|
$
126,015
|
|
Interest
expense
|
|
—
|
|
—
|
|
6,310
|
|
6,310
|
|
Income tax
provision
|
|
—
|
|
—
|
|
40,100
|
|
40,100
|
|
Depreciation and
amortization
|
|
6,382
|
|
11,807
|
|
1,127
|
|
19,316
|
|
EBITDA
|
|
$
182,468
|
|
$
39,493
|
|
$
(30,220)
|
|
$
191,741
|
|
Transaction and
transition costs
|
|
—
|
|
—
|
|
2,358
|
|
2,358
|
|
Contingent
consideration
|
|
—
|
|
—
|
|
(112)
|
|
(112)
|
|
Planned separation
costs
|
|
—
|
|
—
|
|
4,300
|
|
4,300
|
|
Post-acquisition
compensation
|
|
—
|
|
—
|
|
4,332
|
|
4,332
|
|
Adjusted
EBITDA
|
|
$
182,468
|
|
$
39,493
|
|
$
(19,342)
|
|
$
202,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 27, 2021
|
|
(in
thousands)
|
|
Sporting
Products
|
|
Outdoor
Products
|
|
Corporate
|
|
Total
|
|
Net Income
|
|
$
124,704
|
|
$
42,945
|
|
$
(64,924)
|
|
$
102,725
|
|
Interest
expense
|
|
—
|
|
—
|
|
5,678
|
|
5,678
|
|
Income tax
provision
|
|
—
|
|
—
|
|
35,253
|
|
35,253
|
|
Depreciation and
amortization
|
|
6,506
|
|
8,768
|
|
971
|
|
16,245
|
|
EBITDA
|
|
$
131,210
|
|
$
51,713
|
|
$
(23,022)
|
|
$
159,901
|
|
Transaction and
transition costs
|
|
—
|
|
—
|
|
1,048
|
|
1,048
|
|
Inventory step-up
expense
|
|
—
|
|
—
|
|
384
|
|
384
|
|
Post-acquisition
compensation
|
|
—
|
|
—
|
|
546
|
|
546
|
|
Adjusted
EBITDA
|
|
$
131,210
|
|
$
51,713
|
|
$
(21,044)
|
|
$
161,879
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margins
Vista Outdoor has not reconciled adjusted EBITDA margin guidance
to GAAP net profit margin guidance because Vista Outdoor does not
provide guidance for net income, which is a reconciling item
between GAAP net profit margin and non-GAAP EBITDA margin.
Accordingly, a reconciliation to net profit margin is not available
without unreasonable effort.
About Vista Outdoor Inc.
Vista Outdoor is a global designer, manufacturer and marketer of
consumer products in the outdoor sports and recreation markets. The
Company has a portfolio of well-recognized brands that provides
consumers with a wide range of performance-driven, high-quality and
innovative products for individual outdoor recreational pursuits.
Vista Outdoor products are sold at leading retailers and
distributors across North America
and worldwide. For news and information, visit www.vistaoutdoor.com
or follow us on Twitter @VistaOutdoorInc and Facebook at
www.facebook.com/vistaoutdoor.
Forward-Looking Statements
Some of the statements made and information contained in this
report, excluding historical information, are "forward-looking
statements," including those that discuss, among other things: our
plans, objectives, expectations, intentions, strategies, goals,
outlook or other non-historical matters; projections with respect
to future revenues, income, earnings per share or other financial
measures for Vista Outdoor; and the assumptions that underlie these
matters. The words "believe," "expect," "anticipate," "intend,"
"aim," "should" and similar expressions are intended to identify
such forward-looking statements. To the extent that any such
information is forward-looking, it is intended to fit within the
safe harbor for forward-looking information provided by the Private
Securities Litigation Reform Act of 1995. Numerous risks,
uncertainties and other factors could cause our actual results to
differ materially from the expectations described in such
forward-looking statements, including the following: supplier
capacity constraints, production or shipping disruptions or quality
or price issues affecting our operating costs; the supply,
availability and costs of raw materials and components; increases
in commodity, energy, and production costs; seasonality and weather
conditions; our ability to complete acquisitions, realize expected
benefits from acquisitions and integrate acquired businesses;
reductions in or unexpected changes in or our inability to
accurately forecast demand for ammunition, accessories, or other
outdoor sports and recreation products; disruption in the service
or significant increase in the cost of our primary delivery and
shipping services for our products and components or a significant
disruption at shipping ports; risks associated with diversification
into new international and commercial markets, including regulatory
compliance; our ability to take advantage of growth opportunities
in international and commercial markets; our ability to obtain and
maintain licenses to third-party technology; our ability to attract
and retain key personnel; disruptions caused by catastrophic
events; risks associated with our sales to significant retail
customers, including unexpected cancellations, delays, and other
changes to purchase orders; our competitive environment; our
ability to adapt our products to changes in technology, the
marketplace and customer preferences, including our ability to
respond to shifting preferences of the end consumer from brick and
mortar retail to online retail; our ability to maintain and enhance
brand recognition and reputation; others' use of social media to
disseminate negative commentary about us, our products, and
boycotts; the outcome of contingencies, including with respect to
litigation and other proceedings relating to intellectual property,
product liability, warranty liability, personal injury, and
environmental remediation; our ability to comply with extensive
federal, state and international laws, rules and regulations;
changes in laws, rules and regulations relating to our business,
such as federal and state ammunition regulations; risks associated
with cybersecurity and other industrial and physical security
threats; interest rate risk; changes in the current tariff
structures; changes in tax rules or pronouncements; capital market
volatility and the availability of financing; foreign currency
exchange rates and fluctuations in those rates; general economic
and business conditions in the United
States and our markets outside the
United States, including the war in Ukraine and the imposition of sanctions on
Russia, conditions affecting
employment levels, consumer confidence and spending, conditions in
the retail environment, and other economic conditions affecting
demand for our products and the financial health of our customers;
and risks related to our Planned Separation. You are cautioned not
to place undue reliance on any forward-looking statements we make.
A more detailed description of risk factors that may affect our
operating results can be found in Part 1, Item 1A, Risk Factors, of
our Annual Report on Form 10-K for fiscal year 2022 and in the
filings we make with Securities and Exchange Commission (the "SEC")
from time to time. We undertake no obligation to update any
forward-looking statements, except as otherwise required by
law.
VISTA OUTDOOR
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(preliminary and
unaudited)
|
|
|
|
Three months
ended
|
(Amounts in
thousands except per share data)
|
|
June 26,
2022
|
|
June 27,
2021
|
Sales, net
|
|
$
802,612
|
|
$
662,912
|
Cost of
sales
|
|
509,142
|
|
421,485
|
Gross profit
|
|
293,470
|
|
241,427
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
|
7,897
|
|
5,868
|
Selling, general, and
administrative
|
|
113,148
|
|
91,903
|
Earnings before
interest and income taxes
|
|
172,425
|
|
143,656
|
Interest expense,
net
|
|
(6,310)
|
|
(5,678)
|
Earnings before income
taxes
|
|
166,115
|
|
137,978
|
Income tax
provision
|
|
(40,100)
|
|
(35,253)
|
Net income
|
|
$
126,015
|
|
$
102,725
|
Earnings per common
share:
|
|
|
|
|
Basic
|
|
$
2.23
|
|
$
1.77
|
Diluted
|
|
$
2.16
|
|
$
1.71
|
Weighted-average number
of common shares outstanding:
|
|
|
|
|
Basic
|
|
56,486
|
|
58,123
|
Diluted
|
|
58,381
|
|
59,947
|
VISTA OUTDOOR
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(preliminary and
unaudited)
|
|
(Amounts in
thousands except share data)
|
|
June 26,
2022
|
|
March 31,
2022
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
36,612
|
|
$
22,584
|
Net
receivables
|
|
429,729
|
|
356,773
|
Net
inventories
|
|
662,315
|
|
642,976
|
Income tax
receivable
|
|
6,642
|
|
43,560
|
Other current
assets
|
|
47,757
|
|
45,050
|
Total current
assets
|
|
1,183,055
|
|
1,110,943
|
Net property, plant,
and equipment
|
|
204,547
|
|
211,087
|
Operating lease
assets
|
|
75,837
|
|
78,252
|
Goodwill
|
|
481,857
|
|
481,857
|
Net intangible
assets
|
|
451,654
|
|
459,795
|
Deferred charges and
other non-current assets, net
|
|
60,119
|
|
54,267
|
Total
assets
|
|
$
2,457,069
|
|
$
2,396,201
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
180,121
|
|
$
146,697
|
Accrued
compensation
|
|
42,632
|
|
79,171
|
Federal excise, use,
and other taxes
|
|
46,110
|
|
40,825
|
Other current
liabilities
|
|
151,552
|
|
127,180
|
Total current
liabilities
|
|
420,415
|
|
393,873
|
Long-term
debt
|
|
586,255
|
|
666,114
|
Deferred income tax
liabilities
|
|
29,142
|
|
29,304
|
Long-term operating
lease liabilities
|
|
77,827
|
|
80,083
|
Accrued pension and
postemployment benefits
|
|
22,060
|
|
22,634
|
Other long-term
liabilities
|
|
72,058
|
|
79,794
|
Total
liabilities
|
|
1,207,757
|
|
1,271,802
|
|
|
|
|
|
Common stock — $.01
par value:
|
|
|
|
|
Authorized —
500,000,000 shares
|
|
|
|
|
Issued and outstanding
— 56,524,082 shares as of December 26, 2021 and 56,093,456 shares
as of March 31, 2022
|
|
565
|
|
560
|
Additional paid-in
capital
|
|
1,711,759
|
|
1,730,927
|
Accumulated
deficit
|
|
(94,795)
|
|
(220,810)
|
Accumulated other
comprehensive loss
|
|
(76,449)
|
|
(76,679)
|
Common stock in
treasury, at cost — 7,440,357 shares held as of June 26, 2022 and
7,870,983 shares held as of March 31, 2022
|
|
(291,768)
|
|
(309,599)
|
Total stockholders'
equity
|
|
1,249,312
|
|
1,124,399
|
Total liabilities and
stockholders' equity
|
|
$
2,457,069
|
|
$
2,396,201
|
VISTA OUTDOOR
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(preliminary and
unaudited)
|
|
|
|
Three months
ended
|
(Amounts in
thousands)
|
|
June 26,
2022
|
|
June 27,
2021
|
Operating
Activities:
|
|
|
|
|
Net income
|
|
$
126,015
|
|
$
102,725
|
Adjustments to net
income to arrive at cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
11,280
|
|
11,247
|
Amortization of
intangible assets
|
|
8,036
|
|
4,998
|
Amortization of
deferred financing costs
|
|
353
|
|
347
|
Change in fair value
of contingent consideration
|
|
(112)
|
|
—
|
Deferred income
taxes
|
|
163
|
|
312
|
Loss (gain) on
disposal of property, plant, and equipment
|
|
139
|
|
(3)
|
Share-based
compensation
|
|
7,257
|
|
7,038
|
Changes in assets and
liabilities:
|
|
|
|
|
Net
receivables
|
|
(73,105)
|
|
(54,919)
|
Net
inventories
|
|
(29,504)
|
|
(47,925)
|
Accounts
payable
|
|
33,468
|
|
6,188
|
Accrued
compensation
|
|
(36,347)
|
|
(22,813)
|
Accrued income
taxes
|
|
39,342
|
|
36,236
|
Federal excise, use,
and other taxes
|
|
5,292
|
|
3,522
|
Pension and other
postretirement benefits
|
|
341
|
|
(1,363)
|
Other assets and
liabilities
|
|
14,959
|
|
(16,818)
|
Cash provided by
operating activities
|
|
107,577
|
|
28,772
|
Investing
Activities:
|
|
|
|
|
Capital
expenditures
|
|
(4,910)
|
|
(6,876)
|
Acquisition of
businesses, net of cash received
|
|
—
|
|
(8,488)
|
Proceeds from the
disposition of property, plant, and equipment
|
|
43
|
|
6
|
Cash used for
investing activities
|
|
(4,867)
|
|
(15,358)
|
Financing
Activities:
|
|
|
|
|
Proceeds from credit
facility
|
|
15,000
|
|
—
|
Repayments of credit
facility
|
|
(95,000)
|
|
—
|
Payments made for debt
issuance costs
|
|
—
|
|
(955)
|
Purchase of treasury
shares
|
|
—
|
|
(44,232)
|
Proceeds from exercise
of stock options
|
|
147
|
|
197
|
Payment of employee
taxes related to vested stock awards
|
|
(8,923)
|
|
(3,018)
|
Cash used for
financing activities
|
|
(88,776)
|
|
(48,008)
|
Effect of foreign
exchange rate fluctuations on cash
|
|
94
|
|
(1)
|
Increase (decrease) in
cash and cash equivalents
|
|
14,028
|
|
(34,595)
|
Cash and cash
equivalents at beginning of period
|
|
22,584
|
|
243,265
|
Cash and cash
equivalents at end of period
|
|
$
36,612
|
|
$
208,670
|
|
|
Investor
Contact:
|
Media
Contact:
|
|
|
Shelly
Hubbard
|
Eric
Smith
|
Phone:
612-518-5406
|
Phone:
901-573-9156
|
E-mail:
investor.relations@vistaoutdoor.com
|
E-mail:
media.relations@vistaoutdoor.com
|
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SOURCE Vista Outdoor Inc.