- FY23 Sales of $3.1 Billion. FY23 Q4 Sales of $741 Million;
Outdoor Products Sales of $327 Million and Sporting Products Sales
of $413 Million
- FY23 Net Income and Adj. EBITDA of $(10) Million and $622
Million; FY23 Net Income Included a Non-Cash Impairment of Goodwill
and Tradenames of $374 Million in Q4
- FY23 Cash Flow from Operating Activity of $486 Million;
Record FY23 Adj. Free Cash Flow of $493 Million
- Net Debt Leverage Ratio Improves to 1.6x, Within Target
Leverage Ratio of 1-2x; Debt Paydown Remains Priority
- Expect FY24 Sales of $2.85 Billion to $2.95 Billion, Expect
EBITDA Margin in the Range of 17.75% to 18.75%
Vista Outdoor Inc. (NYSE: VSTO), the parent company of 41
renowned brands that design, manufacture and market sporting and
outdoor lifestyle products to consumers around the globe, today
reported operating results for the fourth quarter and Fiscal Year
2023 (FY23), which ended on March 31, 2023.
“Our business faced a number of headwinds in our fiscal year
2023 that were met head on by our team with decisive actions to
deliver a solid performance and maintain a healthy balance sheet,”
said Gary McArthur, interim CEO, Vista Outdoor. “As part of our
annual goodwill/tradename impairment test it was determined that an
impairment had occurred. This was the result of the worsening
economic environment with increasing inflation, decreasing consumer
demand and an increasing federal funds rate that resulted in
reduced forecasts and higher discount rates. Long-term, we remain
bullish on the outdoor recreation and shooting sports markets.
Participation remains above pre-pandemic levels, a trend we see
continuing, and our broad and diverse positioning in the
marketplace will enable us to capitalize on tailwinds across our
categories.
"Our Sporting Products segment had another strong year of sales
and profitability as the market continues to normalize and
experience lower sales volumes in certain calibers. Our culture of
innovation has powered this business forward and combined with
product mix improvements, we have successfully offset higher input
costs. We expect the market to continue to normalize in fiscal year
2024 and remain confident in our ability to achieve mid-20s
percentage point EBITDA margins long-term, well above pre-pandemic
levels.
"Our Outdoor Products segment is navigating market-wide
uncertainty and retail inventory challenges. We’ve taken tactical
and strategic actions to ensure success long-term and, combined
with our earnings improvement program, we are positioning the
segment favorably against near-term headwinds the outdoor industry
is experiencing. We are beginning to see improvement in retail
inventory levels from quarter to quarter, and we expect to see a
return to organic growth in the back half of fiscal year 2024 once
POS and sell-in become more closely aligned.
"We remain on track to complete the previously announced
separation in calendar year 2023. Key to completing the spin this
calendar year will be establishing the Outdoor Products senior
leadership team, a more stable macro-economic environment and
improving Outdoor Product’s financial performance. I am proud of
our teams across the portfolio whose hard work, passion and
dedication have built strong businesses that are well-positioned
for continued success as independent companies,” concluded
McArthur.
For the three months ended March 31,
2023 versus the three months ended March 31, 2022:
- Sales were $741 million, down 8 percent. Organic sales were
$654 million, down 19 percent, driven by a decrease in Sporting
Products volume and Outdoor Products organic business volume,
partially offset by pricing.
- Gross profit decreased to $236 million, down 18 percent,
primarily due to volume declines, unfavorable mix, and increased
freight costs, partially offset by volume from acquired businesses
and improved pricing in both segments.
- Operating expenses were $528 million, up 293 percent, driven
primarily by a non-cash impairment of goodwill and indefinite lived
tradenames and increased selling and marketing expense related to
the acquired businesses.
- Operating income (loss) decreased to $(292) million, compared
with $153 million in the prior year quarter. Operating income
(loss) margin decreased to (39.5) percent. Adjusted operating
income (loss) was $95 million, down 41 percent. Adjusted operating
income (loss) margin decreased 704 basis points to 12.8
percent.
- Net income (loss) decreased to $(294) million. Net income
(loss) margin was (39.7) percent
- Adjusted EBITDA decreased 34 percent to $120 million. Adjusted
EBITDA margin decreased 618 basis points to 16.2 percent.
- Diluted earnings per share (EPS) decreased to $(5.18), compared
with $1.93 in the prior year quarter. Adjusted EPS decreased to
$1.08, compared with $2.04 in the prior year quarter, primarily
driven by lower sales and gross margin contraction.
- Cash flow provided by operating activities was $179 million,
compared to $99 million in the prior year fiscal quarter. Adjusted
free cash flow generation was $178 million.
For the three months ended March 31,
2023 segment results versus the three months ended March 31,
2022:
Sporting Products
- Sales decreased to $413 million, down 10.9 percent, due to the
termination of the Lake City contract at the beginning of the third
fiscal quarter and a decrease in volume, partially offset by
improved pricing.
- Gross profit decreased to $152 million, down 16.7 percent
driven by lower volume, unfavorable mix, and increased commodity
and freight costs, partially offset by improved pricing.
- Operating income (loss) decreased 17 percent to $125 million
due to lower gross profit, partially offset by lower selling,
general and administrative expense. Operating income (loss) margin
was 30.2 percent.
- Adjusted EBITDA decreased 17 percent to $131 million. Adjusted
EBITDA margin decreased 220 basis points to 31.6 percent.
Outdoor Products
- Sales decreased 5 percent to $327 million, Organic sales were
$241 million, down 30 percent, driven by a decrease in volume due
to high levels of channel inventory and softening
replenishment.
- Gross profit decreased to $85 million, down 19.3 percent driven
primarily by volume declines and unfavorable mix, partially offset
by improved pricing.
- Operating income (loss) decreased to $(9) million driven by
lower organic volume and unfavorable mix as well as higher selling
and marketing expenses from acquired businesses. Operating income
(loss) margin was (2.6) percent.
- Adjusted EBITDA decreased 81 percent to $9 million. Adjusted
EBITDA margin decreased 1,138 basis points to 2.9 percent.
For the twelve months ended March 31,
2023 versus the twelve months ended March 31, 2022:
- Sales increased 1 percent to $3.1 billion. Organic sales were
$2.7 billion, down 10 percent, driven by reduced purchasing across
nearly all channels.
- Gross profit decreased 7 percent to $1 billion due to lower
organic business volume and increased product and freight costs,
partially offset by improved pricing and volume from acquired
businesses.
- Operating expenses increased 99 percent driven primarily by a
non-cash impairment of goodwill and indefinite lived tradenames and
increased selling, general and administrative costs related to the
acquired businesses.
- Operating income (loss) declined 83 percent to $108 million and
operating income (loss) margin decreased 1,772 basis points to 3.5
percent. Adjusted operating income (loss) was $530 million, down 21
percent. Adjusted operating income (loss) margin decreased 470
basis points to 17.2 percent.
- Net income (loss) decreased to $(10) million. Net income (loss)
margin was (0.3) percent
- Adjusted EBITDA declined 16 percent to $622 million. Adjusted
EBITDA margin decreased 409 basis points to 20.2 percent.
- Diluted EPS decreased to $(0.17), compared with $8.00 in the
prior fiscal year. Adjusted EPS declined to $6.40, or down 23
percent, compared with $8.29 in the prior fiscal year.
- Cash flow provided by operating activities was $486 million,
compared to $318 million in the prior fiscal year. Adjusted free
cash flow generation was $493 million.
For the twelve months ended March 31,
2023 segment results versus the twelve months ended March 31,
2022:
Sporting Products
- Sales increased 1 percent to $1.8 billion, driven by improved
pricing in all categories and higher volume in primer and rimfire,
partially offset by termination of the Lake City contract at the
beginning of the third fiscal quarter and volume declines in
pistol.
- Gross profit declined 8 percent to $654 million driven
primarily by increased commodity and freight costs and lower
volume. These increases were partially offset by improved
pricing.
- Operating income (loss) decreased 8 percent to $552 million,
due to a decrease in gross profit, partially offset by decreased
incentive compensation and marketing. Operating income (loss)
margin was 31.4 percent.
- Adjusted EBITDA decreased 8 percent to $577 million. Adjusted
EBITDA margin decreased 318 basis points to 32.8 percent.
Outdoor Products
- Sales rose 1 percent to $1.3 billion. Organic sales were $990
million, down 24 percent, driven by reduced purchasing across
nearly all channels with the exception of direct-to-consumer.
- Gross profit decreased 3 percent to $387 million due largely to
organic business volume declines and increased product and freight
costs. These declines were partially offset by volume from acquired
businesses and price.
- Operating income (loss) declined 62 percent to $62 million
primarily caused by decreased gross profit in the organic
businesses, as well as increased selling, general and
administrative costs related to the acquired businesses. Operating
income (loss) margin was 4.7 percent.
- Adjusted EBITDA decreased 39 percent to $125 million. Adjusted
EBITDA margin decreased 633 basis points to 9.5 percent.
The Company will provide additional information in its Form
10-K, which will be filed this month.
Fiscal Year 2024 Outlook
“We demonstrated our dedication to financial discipline in the
fiscal fourth quarter and throughout fiscal year 2023,” said Andy
Keegan, Vice President and Interim Chief Financial Officer of Vista
Outdoor. “For the full year, companywide revenue reached $3.1
billion despite economic headwinds pressuring our businesses. We
generated $179 million of cash flow from operations and $178
million of adjusted free cash flow during the fourth quarter,
bringing our full-year cash flow from operations to $486 million
and total adjusted free cash flow to a robust $493 million. Our net
debt leverage ratio finished the year at 1.6x, within our target
range of 1-2x. We will continue to prioritize debt paydown as our
primary use of capital leading up to our planned separation, which
is on track to occur later in calendar year 2023. Our fiscal year
2024 guidance reflects our expectation that Sporting Products sales
and profitability will continue to normalize and that we will
continue to experience pressures in Outdoor Products in the first
half of fiscal year 2024 due to current macroeconomic headwinds and
elevated retailer inventory levels. We expect our Outdoor Products
segment to return to growth in the back half of the year as these
trends ease.”
Vista Outdoor Establishes Fiscal Year 2024 Financial
Guidance
The company expects:
- Sales in the range of $2.85 billion to $2.95 billion
– Sporting Products Sales expected to be
approximately $1.475 billion to $1.525 billion
– Outdoor Products Sales expected to be
approximately $1.375 billion to $1.425 billion
- EBITDA Margin range of 17.75 percent to 18.75 percent
– Sporting Products EBITDA Margin range of
26.75 percent to 27.75 percent
– Outdoor Products EBITDA Margin range of
12.00 percent to 13.00 percent
- Earnings Per Share (EPS) in the range of $4.50 to $5.00
- Free Cash Flow in the range of $290 million to $340
million
- Effective tax rate of approximately 23.5 percent
- Interest expense in the range of $65 million to $75
million
- Capital expenditures as a percent of sales of approximately 1.5
percent
Please see the tables in the press release for a reconciliation
of non-GAAP measures; organic sales, adjusted income (loss) from
operations, adjusted taxes, adjusted net income, adjusted earnings
per share, adjusted free cash flow, adjusted EBITDA, and adjusted
EBITDA margins to the comparable GAAP measures.
Earnings Conference Call Webcast Information
Vista Outdoor will hold an investor conference call to discuss
its business operations, Fourth Quarter and Fiscal Year 2023
financial results, and provide an update on its business outlook on
May 4, 2023, at 9 a.m. ET. The conference call will be accessible
through a 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 June 3, 2023. The telephone number is (866)
813-9403 and the access code is 808178.
Reconciliation of Non-GAAP and Supplemental 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
operating income (loss), adjusted other income (expense), net,
adjusted interest, adjusted taxes, adjusted net income, and
adjusted diluted earnings (loss) per share (EPS). Vista Outdoor
defines these measures as, gross profit, operating expenses,
operating income (loss), other income (expense), net, interest,
taxes, net income, and EPS excluding, where applicable, the impact
of costs incurred for inventory step-up, transaction and transition
costs, executive transition costs, planned separation costs,
intangibles impairment, restructuring, post-acquisition
compensation, contingent consideration, and debt acquisition costs.
Vista Outdoor management is presenting these measures so a reader
may compare gross profit, operating expenses, income (loss) from
operations, other income (expense), net, interest, 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 March 31, 2023
(in thousands except per share
amounts)
Gross profit
Operating expenses
Operating (loss)
income
Other income, net
Interest Expense
Taxes
Net income
EPS (1)
As reported
$
235,747
$
528,170
$
(292,423
)
$
744
$
(20,120
)
$
17,464
$
(294,335
)
$
(5.18
)
Inventory step-up
1,449
—
1,449
—
—
(362
)
1,087
Transaction costs
—
(60
)
60
—
—
(16
)
44
Transition costs
—
(3,553
)
3,553
—
—
(888
)
2,665
Executive transition costs
—
(5,631
)
5,631
—
—
(706
)
4,925
Planned separation costs
—
(4,448
)
4,448
—
—
(1,112
)
3,336
Intangibles impairment
—
(374,355
)
374,355
—
—
(25,896
)
348,459
Restructuring
—
(13,111
)
13,111
—
—
(3,278
)
9,833
Post-acquisition compensation
—
4,268
(4,268
)
—
—
1,282
(2,986
)
Contingent consideration
—
11,105
(11,105
)
—
—
981
(10,124
)
As adjusted
$
237,196
$
142,385
$
94,811
$
744
$
(20,120
)
$
(12,531
)
$
62,904
$
1.08
(1) Potential common stock equivalents
were excluded from the computation of as reported net loss per
share attributable to common stockholders, as their effect was
antidilutive. As reported net loss per share is calculated based on
56,776 basic and diluted weighted average shares of common stock.
Adjusted net income per share is calculated based on 58,342 diluted
shares of common stock.
Three months
ended March 31, 2022
(in thousands except per share
amounts)
Gross profit
Operating expenses
Operating income
Other income, net
Interest Expense
Taxes
Net Income
EPS (1)
As reported
$
287,414
$
134,534
$
152,880
$
—
$
(6,962
)
$
(33,094
)
$
112,824
$
1.93
Inventory step-up
744
—
744
—
—
(186
)
558
Transaction costs
—
(1,776
)
1,776
—
—
(285
)
1,491
Transition costs
—
(608
)
608
—
—
(152
)
456
Post-acquisition compensation
—
(4,415
)
4,415
—
—
(665
)
3,750
As adjusted
$
288,158
$
127,735
$
160,423
$
—
$
—
$
(6,962
)
$
(34,382
)
$
119,079
$
2.04
(1) As reported net income per share is
calculated based on 58,387 diluted weighted average shares of
common stock. Adjusted net income per share is calculated based on
58,387.
Fiscal year ended
March 31, 2023
(in thousands except per share
amounts)
Gross profit
Operating expenses
Operating income
Other income, net
Interest expense
Taxes
Net income
EPS (1)
As reported
$
1,030,897
$
923,042
$
107,855
$
2,124
$
(59,317
)
$
(60,380
)
$
(9,718
)
$
(0.17
)
Inventory step-up
9,528
—
9,528
—
—
(2,382
)
7,146
Transaction costs
—
(8,105
)
8,105
—
—
(1,496
)
6,609
Transition costs
—
(5,057
)
5,057
—
—
(1,264
)
3,793
Executive transition costs
—
(5,631
)
5,631
—
—
(706
)
4,925
Planned separation costs
—
(26,681
)
26,681
—
—
(6,671
)
20,010
Debt issuance costs
—
—
—
—
785
(196
)
589
Intangibles impairment
—
(374,355
)
374,355
—
—
(25,896
)
348,459
Restructuring
—
(13,111
)
13,111
—
—
(3,278
)
9,833
Post-acquisition compensation
—
(6,863
)
6,863
—
—
(351
)
6,512
Contingent consideration
—
27,508
(27,508
)
—
—
1,004
(26,504
)
As adjusted
$
1,040,425
$
510,747
$
529,678
$
2,124
$
(58,532
)
$
(101,616
)
$
371,654
$
6.40
(1) Potential common stock equivalents
were excluded from the computation of as reported net loss per
share attributable to common stockholders, as their effect was
antidilutive. As reported net loss per share is calculated based on
56,600 basic and diluted weighted average shares of common stock.
As adjusted net income per share is calculated based on 58,104
diluted shares of common stock.
Fiscal year ended
March 31, 2022
(in thousands except per share
amounts)
Gross profit
Operating expenses
Operating income
Other income, net
Interest expense
Taxes
Net income
EPS (1)
As reported
$
1,109,232
$
463,010
$
646,222
$
—
$
(25,264
)
$
(147,732
)
$
473,226
$
8.00
Inventory step-up expense
2,375
—
2,375
—
—
(594
)
1,781
Transaction cost
—
(6,816
)
6,816
—
—
(1,417
)
5,399
Contingent consideration
—
(956
)
956
—
—
(55
)
901
Transition costs
—
(1,390
)
1,390
—
—
(348
)
1,042
Post-acquisition compensation
—
(8,987
)
8,987
—
—
(1,049
)
7,938
As adjusted
$
1,111,607
$
444,861
$
666,746
$
—
$
(25,264
)
$
(151,195
)
$
490,287
$
8.29
(1) GAAP net income per share is
calculated based on 59,137 diluted weighted average shares of
common stock. As adjusted net income per share is calculated based
on 59,137 diluted shares of common stock.
The adjustments to "as reported" net income are items that are
excluded from reported GAAP results to arrive at the "as adjusted"
net income.
During the three months and year ended March 31, 2023, we
incurred costs that we feel are not indicative of ongoing
operations as follows:
- inventory step-up costs associated with our acquisitions of Fox
and Simms, expensed over their inventory cycles;
- transaction costs associated with possible and actual
transactions, including advisor and legal fees and other
costs;
- transition costs for prior acquisitions to integrate into the
Company such as retention, professional fees and travel costs;
- executive transition costs for severance, executive search fees
and related costs for the transition of our CEO and General Counsel
executives, who departed the company during our fourth
quarter;
- costs associated with the planned separation of our Outdoor
Products and Sporting Products reportable segments into two
independent, publicly traded companies, including restructuring,
severance, retention, advisory and legal fees;
- impairment expense on goodwill and tradenames;
- restructuring costs related to an over $50 million cost
reduction and earnings improvement program, announced during our
fourth fiscal quarter of 2023, which includes severance and asset
impairments related to product line reassessments, office closures,
and headcount reductions across our brands and corporate
teams;
- non-cash income (expense) related to the change in estimate of
our post-acquisition compensation liabilities, in connection with
the Foresight, Stone Glacier, and QuietKat acquisitions;
- non-cash income for the change in the estimated fair value of
the contingent consideration payable related to our HEVI-Shot,
QuietKat, Stone Glacier, Fiber Energy, and Fox acquisitions;
- costs incurred to write off unamortized debt issuance costs
related to our 2021 ABL Revolving Credit Facility refinance.
During the three months ended March 31, 2023, our reported tax
(expense) benefit of $17,464 results in a tax rate of 5.6 percent
and our adjusted tax (expense) benefit of $(12,531) results in an
adjusted tax rate of 16.6 percent.
During the full year ended March 31, 2023, our reported tax
(expense) benefit of $(60,380) results in a tax rate of 119.2
percent and our adjusted tax (expense) benefit of $(101,616)
results in an adjusted tax rate of 21.5 percent.
During the three months and years ended March 31, 2022, we
incurred costs that we feel are not indicative of ongoing
operations as follows:
- inventory step-up costs associated with our Stone Glacier,
Foresight and HEVI-Shot acquisitions expensed over the first
inventory cycle;
- transaction costs associated with possible and actual
transactions, including advisory and legal fees and other
costs;
- transition costs for prior acquisitions to integrate into the
company such as retention, professional fees and travel costs;
- non-cash expense related to the change in the estimated fair
value of the contingent consideration payable for our QuietKat and
HEVI-Shot acquisitions;
- post-acquisition compensation expense related to employee
retention payments in connection with the Stone Glacier, Foresight,
QuietKat and Venor acquisitions.
During the three months ended March 31, 2022, our reported tax
(expense) benefit of $(33,094) results in a tax rate of 22.7
percent and our adjusted tax (expense) benefit of $(34,382) results
in an adjusted tax rate of 22.4 percent.
During the full year ended March 31, 2022, our reported tax
(expense) benefit of (147,732) results in a tax rate of 23.8
percent and our adjusted tax (expense) benefit of $(151,195)
results in an adjusted tax rate of 23.6 percent.
Free Cash Flow
Free cash flow is defined as cash provided by operating
activities less capital expenditures. Vista Outdoor management
believes that free cash flow provides investors with an important
indication of the cash generated by our business 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 to assess
overall liquidity.
Adjusted free cash flow is defined as free cash flow eliminating
the cash impact of the following items that are adjusted in our
presentation of reported income to adjusted net income: transaction
costs, contingent consideration, transition costs, executive
transition costs, planned separation costs, restructuring, and
post-acquisition compensation. Vista Outdoor management believes
that adjusted free cash flow enhances investors’ understanding of
the liquidity of our ongoing operations. Adjusted free cash flow is
also used by Vista Outdoor to assess employees’ performance and
determine their annual incentive payments. Vista Outdoor’s
definition of adjusted free cash flow may differ from those used by
other companies. During the fourth quarter of fiscal year 2023, we
modified our definition of adjusted free cash flow to no longer
adjust for applicable tax amounts. All periods presented have been
adjusted for this modification.
(in thousands)
Three months ended March 31,
2023
Year ended March 31,
2023
Year ended March 31,
2022
Projected year ending March
31, 2024
Cash provided by operating activities (as
reported)
$
178,669
$
486,185
$
318,311
$332,750 - 384,250
Capital expenditures
(13,653
)
(38,810
)
(42,782
)
~(42,750 - 44,250)
Free cash flow
165,016
447,375
275,529
$290,000 - 340,000
Transaction costs
60
9,235
5,686
—
Contingent consideration
—
—
—
—
Transition costs
860
1,872
1,089
—
Executive transition costs
893
893
—
—
Planned separation costs
715
22,948
—
—
Restructuring
7,140
7,140
—
—
Post acquisition compensation
3,067
3,317
13,167
—
Adjusted free cash flow
$
177,751
$
492,780
$
295,471
$290,000 - 340,000
Organic Sales Reconciliation
Organic sales is a non-GAAP measure of sales growth excluding
the impacts of acquisitions from year-over-year comparisons. Sales
are considered inorganic for the twelve months after acquisition.
We believe this measure provides investors with a supplemental
understanding of underlying sales trends by providing sales growth
on a consistent basis. This measure is used in assessing
achievement of management goals for at-risk compensation.
(in thousands)
Three months ended March 31,
2023
Three months ended March 31,
2022
Year ended March 31, 2023
Year ended March 31, 2022
Sporting Products
$
413,311
$
463,764
$
1,757,932
$
1,737,891
Outdoor Products
327,431
344,831
1,321,875
1,306,730
Sales, net
$
740,742
$
808,595
$
3,079,807
$
3,044,621
Less Sporting Products acquisitions
—
—
—
—
Less Outdoor Products acquisitions
(86,669
)
—
(331,779
)
—
Sporting Products organic sales, net
$
413,311
$
463,764
$
1,757,932
$
1,737,891
Outdoor Products organic sales, net
240,762
344,831
990,096
1,306,730
Organic sales, net
$
654,073
$
808,595
$
2,748,028
$
3,044,621
Adjusted EBITDA Margin
Adjusted EBITDA margin is defined as EBITDA (earnings before
other income (expense), interest, taxes, depreciation and
amortization), excluding the non-recurring and non-cash items
referenced above, divided by net sales. Vista Outdoor management
believes adjusted 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. Adjusted 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.
EBITDA NON-GAAP RECONCILIATION AND
SUPPLEMENTAL FINANCIAL INFORMATION (In thousands)
(Unaudited)
Segment Adjusted EBITDA
Three months ended March 31,
2023
Fiscal year ended March 31,
2023
Sporting Products
Outdoor Products
Total
Sporting Products
Outdoor Products
Total
Segment operating income (1)
$
124,659
$
(8,468
)
$
116,191
$
552,232
$
62,423
$
614,655
Depreciation and amortization
6,136
17,881
24,017
25,087
62,829
87,916
Adjusted segment EBITDA
$
130,795
$
9,413
$
140,208
$
577,319
$
125,252
$
702,571
Adjusted segment EBITDA margin
31.6
%
2.9
%
32.8
%
9.5
%
Three months ended March 31,
2022
Fiscal year ended March 31,
2022
Sporting Products
Outdoor Products
Total
Sporting Products
Outdoor Products
Total
Segment operating income (1)
$
150,520
$
36,548
$
187,068
$
600,415
$
164,494
$
764,909
Depreciation and amortization
6,424
12,594
19,018
25,602
42,027
67,629
Adjusted segment EBITDA
$
156,944
$
49,142
$
206,086
$
626,017
$
206,521
$
832,538
Adjusted segment EBITDA margin
33.8
%
14.3
%
36.0
%
15.8
%
(1) We do not calculate GAAP net income at
the segment level, but have provided segment operating income and
operating income margin as a relevant measurement of profitability.
Segment operating income does not include interest expense and
taxes as well as other non-cash and non-recurring items. Segment
operating income is reconciled to our consolidated net income in
the segment income to consolidated net income reconciliation table
included in this release.
Consolidated Adjusted EBITDA Reconciliation
Three months ended March 31,
2023
Fiscal year ended March 31,
2023
Three months ended March 31,
2022
Fiscal year ended March 31,
2022
Net Income
$
(294,335
)
$
(9,718
)
$
112,824
$
473,226
Other income, net
(744
)
(2,124
)
—
—
Interest expense, net
20,120
59,317
6,962
25,264
Income tax (provision) benefit
(17,464
)
60,380
33,094
147,732
Depreciation and amortization
24,998
92,089
20,330
72,340
EBITDA
$
(267,425
)
$
199,944
$
173,210
$
718,562
Inventory step-up
1,449
9,528
744
2,375
Transaction costs
60
8,105
1,776
6,816
Transition costs
3,553
5,057
608
1,390
Executive transition costs
5,631
5,631
—
—
Planned separation costs
4,448
26,681
—
—
Intangibles impairment
374,355
374,355
—
—
Restructuring
13,111
13,111
—
—
Post-acquisition compensation
(4,268
)
6,863
4,415
8,987
Contingent consideration
(11,105
)
(27,508
)
—
956
Adjusted EBITDA
$
119,809
$
621,767
$
180,753
$
739,086
Adjusted EBITDA margin
16.2
%
20.2
%
22.4
%
24.3
%
SEGMENT INCOME TO CONSOLIDATED NET INCOME
RECONCILIATION (In thousands) (Unaudited)
Three months ended March 31,
2023
Fiscal year ended March 31,
2023
Three months ended March 31,
2022
Fiscal year ended March 31,
2022
Segment income
$
116,191
$
614,655
$
187,068
$
764,909
Corporate costs and expenses (1)
(408,614
)
(506,800
)
(34,188
)
(118,687
)
Operating income
$
(292,423
)
$
107,855
$
152,880
$
646,222
Other income, net
744
2,124
—
—
Interest expense, net
(20,120
)
(59,317
)
(6,962
)
(25,264
)
Income tax (provision) benefit
17,464
(60,380
)
(33,094
)
(147,732
)
Net Income
$
(294,335
)
$
(9,718
)
$
112,824
$
473,226
(1) Includes corporate overhead and
certain non-recurring items as described in the schedules to this
release
EBITDA Margin Guidance
Vista Outdoor has not reconciled 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 (NYSE: VSTO) is the parent company of more than
three dozen renowned brands that design, manufacture and market
sporting and outdoor products. Brands include Bushnell, CamelBak,
Bushnell Golf, Foresight Sports, Fox Racing, Bell Helmets, Camp
Chef, Giro, Simms Fishing, QuietKat, Stone Glacier, Federal
Ammunition, Remington Ammunition and more. Our reporting segments,
Outdoor Products and Sporting Products, provide consumers with a
wide range of performance-driven, high-quality and innovative
outdoor and sporting products. As Vista Outdoor announced in 2022,
the company is separating its Outdoor Products and Sporting
Products segments into two independent, publicly traded companies.
For news and information, visit our website at
www.vistaoutdoor.com.
Forward-Looking Statements
Some of the statements made and information contained in this
Press Release, 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: risks related to the separation of our
Outdoor Products and Sporting Products segments, including that the
process of exploring the transaction and potentially completing the
transaction could disrupt or adversely affect the consolidated or
separate businesses, results of operations and financial condition,
that the transaction may not achieve some or all of any anticipated
benefits with respect to either business and that the transaction
may not be completed in accordance with our expected plans or
anticipated timelines, or at all; impacts from the COVID-19
pandemic on Vista Outdoor’s operations, the operations of our
customers and suppliers and general economic conditions; 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 as a result of the war in
Ukraine and the imposition of sanctions on Russia, the COVID-19
pandemic, 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. 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
Years ended
(Amounts in thousands except per share
data)
March 31, 2023
March 31, 2022
March 31, 2023
March 31, 2022
Sales, net
$
740,742
$
808,595
$
3,079,807
$
3,044,621
Cost of sales
504,995
521,181
2,048,910
1,935,389
Gross profit
235,747
287,414
1,030,897
1,109,232
Operating income expenses:
Research and development
12,776
8,951
44,209
28,737
Selling, general, and administrative
141,039
125,583
504,478
434,273
Impairment of goodwill and intangibles
374,355
—
374,355
—
Operating income (loss)
(292,423
)
152,880
107,855
646,222
Other income, net
744
—
2,124
—
Interest expense, net
(20,120
)
(6,962
)
(59,317
)
(25,264
)
Income (loss) before income taxes
(311,799
)
145,918
50,662
620,958
Income tax (provision) benefit
17,464
(33,094
)
(60,380
)
(147,732
)
Net income (loss)
$
(294,335
)
$
112,824
$
(9,718
)
$
473,226
Earnings (loss) per common share:
Basic
$
(5.18
)
$
2.01
$
(0.17
)
$
8.27
Diluted
$
(5.18
)
$
1.93
$
(0.17
)
$
8.00
Weighted-average number of common shares
outstanding:
Basic
56,776
56,195
56,600
57,190
Diluted
56,776
58,387
56,600
59,137
VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(preliminary and
unaudited)
March 31,
(Amounts in thousands except share
data)
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
86,208
$
22,584
Net receivables
339,373
356,773
Net inventories
709,897
642,976
Income tax receivable
—
43,560
Other current assets
60,636
45,050
Total current assets
1,196,114
1,110,943
Net property, plant, and equipment
228,247
211,087
Operating lease assets
106,828
78,252
Goodwill
465,709
481,857
Net intangible assets
733,176
459,795
Deferred charges and other non-current
assets
68,808
54,267
Total assets
$
2,798,882
$
2,396,201
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term debt
$
65,000
$
—
Accounts payable
136,556
146,697
Accrued compensation
60,719
79,171
Accrued income taxes
6,676
—
Federal excise, use, and other taxes
38,543
40,825
Other current liabilities
146,377
127,180
Total current liabilities
453,871
393,873
Long-term debt
984,658
666,114
Deferred income tax liabilities
40,749
29,304
Long-term operating lease liabilities
103,313
80,083
Accrued pension and postemployment
benefits
25,114
22,634
Other long-term liabilities
59,384
79,794
Total liabilities
1,667,089
1,271,802
Commitments and contingencies
Common stock—$.01 par value:
Authorized—500,000,000 shares
Issued and outstanding—57,085,756 shares
as of March 31, 2023 and 56,093,456 shares as of March 31, 2022
570
560
Additional paid-in-capital
1,711,155
1,730,927
Accumulated deficit
(230,528
)
(220,810
)
Accumulated other comprehensive loss
(80,802
)
(76,679
)
Common stock in treasury, at
cost—6,878,683 shares held as of March 31, 2023 and 7,870,983
shares held as of March 31, 2022
(268,602
)
(309,599
)
Total stockholders' equity
1,131,793
1,124,399
Total liabilities and stockholders'
equity
$
2,798,882
$
2,396,201
VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(preliminary and
unaudited)
Years Ended March 31
(Amounts in thousands)
2023
2022
Operating Activities
Net income
$
(9,718
)
$
473,226
Adjustments to net income to arrive at
cash provided by operating activities:
Depreciation
48,126
46,094
Amortization of intangible assets
43,963
26,246
Amortization of deferred financing
costs
6,702
1,411
Impairment of goodwill and intangibles
374,355
—
Change in fair value of contingent
consideration
(27,510
)
955
Deferred income taxes
(43,177
)
11,857
Gain on foreign exchange
(1,249
)
—
Loss on disposal of property, plant, and
equipment
1,719
796
Share-based compensation
28,119
27,407
Changes in assets and liabilities:
Net receivables
66,860
(50,631
)
Net inventories
18,537
(172,741
)
Accounts payable
(33,596
)
(24,350
)
Accrued compensation
(25,803
)
14,370
Accrued income taxes
59,679
(3,968
)
Federal excise, use, and other taxes
(3,311
)
8,111
Pension and other postretirement
benefits
1,988
(1,561
)
Other assets and liabilities
(19,499
)
(38,911
)
Cash provided by operating activities
486,185
318,311
Investing Activities
Capital expenditures
(38,810
)
(42,782
)
Proceeds from note receivable
10,683
—
Acquisition of businesses, net of cash
received
(761,589
)
(545,467
)
Proceeds from the disposition of property,
plant, and equipment
47
411
Cash used for investing activities
(789,669
)
(587,838
)
Financing Activities
Borrowings on lines of credit
468,000
400,000
Payments made on lines of credit
(283,000
)
(230,000
)
Proceeds from issuance of long-term
debt
350,000
—
Payments made on long-term debt
(145,000
)
—
Payments made for debt issue costs and
prepayment premiums
(17,209
)
(1,061
)
Proceeds from exercise of stock
options
4,213
533
Payments made for contingent
consideration
(706
)
—
Purchase of treasury shares
—
(113,195
)
Payment of employee taxes related to
vested stock awards
(9,090
)
(7,310
)
Cash provided by (used for) financing
activities
367,208
48,967
Effect of foreign currency exchange rate
fluctuations on cash
(100
)
(121
)
Increase (decrease) in cash and cash
equivalents
63,624
(220,681
)
Cash and cash equivalents at beginning of
year
22,584
243,265
Cash and cash equivalents at end of
year
$
86,208
$
22,584
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503005911/en/
Investor Contact: Tyler Lindwall Phone:
612-704-0147 E-mail: investor.relations@vistaoutdoor.com
Media Contact: Eric Smith Phone: 720-772-0877
E-mail: media.relations@vistaoutdoor.com
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