- Sale of Sporting Products For an Enterprise Value of $1.91
Billion is on Track and Creates Meaningful Value by Returning At
Least $750 Million to Stockholders and Locking in Certainty of
Value for Sporting Products
- Vista Outdoor Announces Revelyst, a World Leading House of
Outdoor Brands. Revelyst Announces new GEAR Up Transformation
Program, Which Will Drive Profitability Improvements and Organic
Growth
- Q2 Total Sales of $676.8 Million; Outdoor Products Sales
$327.3 Million; Sporting Products Sales $349.5 Million; Within
Previously Provided Range
- Q2 Net Income and Adj. EBITDA of $44.4 Million and $116.1
Million, Respectively; Net Income and Adj. EBITDA Margins of 6.6%
and 17.2%, Respectively
- Balance Sheet is Healthy With Outstanding Debt Decreasing
Sequentially to $945 Million and a Net Debt Leverage Ratio of 1.8x;
Expect Capital Allocation Through Stockholder Vote to be Focused on
Debt Paydown
- Reiterate FY24 Guidance For Sales of $2.725 Billion to
$2.825 Billion and Adj. EBITDA Margins in the Range of 15.50% to
16.25%
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 financial results for the second quarter of Fiscal Year
2024 (FY24), which ended on September 24, 2023.
“The Vista Outdoor story that’s now unfolding is the most
compelling in company history for stockholders and consumers
alike,” said Gary McArthur, interim CEO of Vista Outdoor. “Our
recent definitive agreement to sell Sporting Products to
Czechoslovak Group (CSG) for an enterprise value of $1.91 billion
creates meaningful value by returning at least $750 million to
stockholders and locking in certainty of value for Sporting
Products, while setting up both Sporting Products and Revelyst, and
the brands in their portfolios, for long-term success. This is the
next step in the transformation of our company and our continued
belief that the separation of the two segments will unlock
significant stockholder value.”
“After my first 10 weeks here, I am energized and excited about
Revelyst,” said Eric Nyman, CEO of Revelyst. “While our fully
formed strategy for Revelyst will evolve and expand in the coming
months, we are kicking off an initiative called GEAR Up, a
transformation program that will simplify our business model,
deliver increased efficiency in new run-rate profitability
improvements, and drive organic growth through new innovation. Our
GEAR Up transformation program is being actioned immediately and
will enable us to reinvest in our highest potential brands to
accelerate their growth and product development pipelines to
support our consumers in their greatest outdoor pursuits. A
highlight in this vein is an upcoming product launch from Foresight
Sports — the Foresight Falcon. This new technology for our
passionate golf consumers will help professionals and casual
players alike improve their games. More exciting innovations for
the holiday can be found on Revelyst.com where we will be launching
The Revelyst Lyst, a seasonal campaign for our fans around the
world to find their favorite products for the holiday season. I
look forward to sharing more about the GEAR Up Transformation plan
and how it will unlock Revelyst’s potential.”
“We are pleased with where we stand at the midpoint of this
fiscal year and see positive trends on the horizon,” said Jason
Vanderbrink, CEO of Sporting Products. “Our profitability remains
strong and is in line with our expectations, showcasing our strong
product mix. We are excited for our bright future with CSG — a
private, strategic owner that is committed to growing the reach of
our iconic American brands and expanding our legacy of U.S.
manufacturing.”
Consolidated results for the three
months ended September 24, 2023 versus the three months ended
September 25, 2022:
- Sales decreased $105 million to $677 million, down 13 percent,
in line with our recent earnings pre-release, driven by lower
shipments across nearly all categories in the Sporting Products
segment and lower volume as channel partners continue to be
cautious with purchasing due to inventory levels and short-term
consumer pressures in the Outdoor Products businesses. Organic
sales were $646 million, a decline of 17 percent.
- Gross profit declined 21 percent to $209 million and gross
profit margin decreased 270 basis points to 30.9 percent primarily
due to decreased volume and price in the Sporting Products segment
and decreased volume in the organic Outdoor Products businesses,
partially offset by acquisitions.
- Operating expenses were $133 million, up 1 percent, primarily
driven by increased selling, general, and administrative expenses
from acquired businesses, partially offset by decreased selling
costs in Sporting Products and decreased selling, general, and
administrative expenses related to the organic businesses in
Outdoor Products.
- Operating income decreased 42 percent to $76 million. Operating
income margins decreased 560 basis points to 11.2 percent.
- Net income decreased 53 percent to $44 million. Net income
margin decreased 539 basis points to 6.6 percent.
- Adjusted EBITDA decreased 28 percent to $116 million. Adjusted
EBITDA margins decreased 370 basis points to 17.2 percent.
- Diluted Earnings per Share (EPS) was $0.76, down 53 percent,
compared with $1.62. Adjusted EPS was $0.96, down 42 percent,
compared with $1.67.
- Year to date cash provided by operating activities was
$107,540, compared with $193,402. Year to date adjusted free cash
flow was $115,735, compared with $201,489.
Segment results for the three months
ended September 24, 2023 versus the three months ended September
25, 2022:
Sporting Products
- Sales declined 19 percent to $350 million, in line with our
recent earnings pre-release, driven primarily by lower shipments
across nearly all categories as channel inventory has normalized,
lower pricing, and the previously announced termination of the Lake
City contract at the beginning of the third fiscal quarter in the
prior year.
- Gross profit decreased 28 percent to $115 million primarily
caused by decreased volume and price.
- Operating income decreased 31 percent to $92 million primarily
driven by lower gross profit, partially offset by decreased selling
costs. Operating income margin decreased 446 basis points to 26.4
percent.
- Adjusted EBITDA decreased 29 percent to $99 million. Adjusted
EBITDA margins decreased 409 basis points to 28.3 percent.
Outdoor Products
- Sales decreased 6 percent to $327 million, in line with our
recent earnings pre-release, driven primarily by lower volume as
channel partners continue to be cautious with purchasing due to
inventory levels and as consumers are pressured by high interest
rates and other short-term factors affecting their purchases of
consumer durable goods. Organic sales were $296 million, down 15
percent.
- Gross profit decreased 12 percent to $94 million primarily
caused by lower volume from organic businesses, partially offset by
acquisitions.
- Operating income declined 57 percent to $13 million primarily
driven by decreased gross profit, partially offset by reduced
selling, general, and administrative costs related to organic
businesses. Operating income margin decreased 459 basis points to
3.9 percent.
- Adjusted EBITDA decreased 33 percent to $30 million. Adjusted
EBITDA margins decreased 370 basis points to 9.3 percent.
“In the second quarter of fiscal year 2024 we remained focused
on the health of our balance sheet, as we continued to prioritize
debt paydown as our primary use of capital,” said Andy Keegan, Vice
President and Interim CFO of Vista Outdoor. "Our net debt decreased
sequentially, and our net debt leverage ratio finished the quarter
at 1.8x, within our target range of 1.0x to 2.0x. We expect to
continue prioritizing debt paydown ahead of our stockholder vote
for the sale of Sporting Products, as we are unable, under
applicable securities laws, to repurchase shares while the
stockholder vote for our Sporting Products business is
pending.”
Revelyst GEAR Up Transformation Program
We are excited to launch our new GEAR Up transformation program,
a nod to Revelyst’s future stock ticker, “GEAR,” that is being
actioned immediately and will simplify the company’s business
model, deliver increased efficiency and profitability from that
simplified structure and reinvest in our highest potential brands
to accelerate their growth and transformation.
Enabled by a simplified structure and powered by the recent
engagement of a leading consulting partner, this new initiative
will maximize efficiency through consolidation of Revelyst’s
current real estate footprint as well as within the company’s
back-office technology stack, supply chain and organizational
structure.
We expect to drive growth through product innovation and
streamline our operations by unlocking cost savings, starting in
the fourth quarter of fiscal year 2024 with an estimated $100
million of realized annual cost savings by fiscal year 2027. This
is in addition to the previously announced April 2023 $50 million
cost restructuring program, of which $25 million in savings was
specifically related to Revelyst, for a total of $125 million in
expected run-rate cost savings.
In fiscal year 2025, we expect $25 to $30 million in realized
cost savings, incremental to our previously announced April 2023
$50 million cost restructuring program, to give us confidence and
momentum as we seek to double Revelyst Standalone Adjusted
EBITDA in fiscal year 2025, as compared to fiscal year
2024.
Outlook for Fiscal Year 2024
Vista Outdoor has not reconciled adjusted EBITDA margin guidance
to GAAP net income margin guidance because Vista Outdoor does not
provide guidance for net income, which is a reconciling item
between GAAP net income and non-GAAP EBITDA. Accordingly, a
reconciliation to net income is not available without unreasonable
effort. Reconciliations of adjusted EPS guidance to EPS guidance
and adjusted free cash flow guidance to cash provided by operating
activities guidance are available on page seven of this press
release.
The Company expects:
- Sales in the range of $2.725 billion to $2.825 billion
- Sporting Products sales expected to be approximately $1.450
billion to $1.500 billion
- Outdoor Products sales expected to be approximately $1.275
billion to $1.325 billion
- Adjusted EBITDA margin in the range of 15.50 percent to 16.25
percent
- Sporting Products EBITDA margin range of 26.50 percent to 27.50
percent
- Outdoor Products EBITDA margin range of 7.75 percent to 8.25
percent
- Earnings per share in the range of $3.37 to $3.77. Adjusted
Earnings per share in the range of $3.65 to $4.05
- Cash from operating activities between $284 million to $336
million; adjusted free cash flow in the range of $265 million to
$315 million
- Effective tax rate of approximately 19.5 percent
- Interest expense in the range of $55 million to $65
million
- Capital expenditures as a percent of sales of approximately
1.50 percent
“We are reaffirming our guidance for fiscal year 2024,”
continued Andy Keegan. “At Outdoor Products, the teams are hard at
work clearing high priced inventory and we expect this to lead to
Adjusted Segment EBITDA margins in the mid-single digits in the
third quarter of fiscal year 2024, with sequential improvement to
high single digits in the fourth quarter reflecting the beginning
of our cost savings taking hold. At Sporting Products, we believe
that the current increased global unrest along with a strong
hunting season in the third quarter and the start of the election
season in the fourth quarter will result in a more favorable
performance than the second quarter. This is within our recently
communicated guidance for the full year.”
Please see the tables in the press release for a reconciliation
of non-GAAP measures; organic sales, adjusted income from
operations, adjusted taxes, adjusted net income, adjusted earnings
per share, adjusted free cash flow, adjusted EBITDA, adjusted
EBITDA margins, net debt, and net debt leverage ratio to the
comparable GAAP measures.
Earnings Conference Call Webcast Information
Vista Outdoor will hold an investor conference call to discuss
its business operations, second quarter FY24 financial results, and
provide an update on its business outlook on November 2, 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 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 November 30, 2023. The
telephone number is (866) 813-9403, and the access code is
282930.
Non-GAAP Financial Measures
Non-GAAP financial measures such as adjusted EBITDA, adjusted
EBITDA margin, organic sales, adjusted operating income, adjusted
operating income margin, adjusted EPS, adjusted free cash flow, net
debt and net debt leverage ratio as included in this press release
are supplemental measures that are not calculated in accordance
with Generally Accepted Accounting Principles (“GAAP”). These
non-GAAP measures should be considered in addition to, and not as
substitutes for, GAAP measures. Please see the tables below for
reconciliations of these non-GAAP measures to the most directly
comparable GAAP measures.
Beginning with the second quarter of fiscal year 2024, we
modified our presentation of non-GAAP results and no longer exclude
from adjusted results expenses related to retention payments in
connection with our acquisitions. These specified expenses that
were previously excluded from adjusted results under the line items
of transition costs, post-acquisition compensation and planned
separation are included in “operating expenses” in our as reported
results. The Company is making these changes to its presentation of
non-GAAP financial measures following comments from, and
discussions with, staff members of the U.S. Securities and Exchange
Commission (the “SEC”). Prior period adjusted results have been
revised for comparability. Adjusted EPS includes the negative
impact of this change of approximately $0.04 per share for the
periods ending September 24, 2023. Revised adjusted EPS includes
the negative impact of this change of approximately $0.04 for the
period ending September 25, 2022. The revised presentation of the
reconciliation to previously reported adjusted EPS, and the revised
reconciliation to adjusted results for the three months ended
September 25, 2022, is reported below.
Reconciliation of previously reported adjusted EPS
(in thousands)
Three months ended September
25, 2022
(Unaudited, dollars and shares in millions
except per share data)
Transition costs previously specified
$
139
Planned separation costs previously
specified
267
Post-acquisition compensation previously
specified
2,130
Income tax impact
(322
)
Decrease in as adjusted net income
$
2,214
Decrease in adjusted EPS
$
0.04
Adjusted EPS previously reported
1.71
Revised adjusted EPS
$
1.67
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, adjusted other income/(expense), adjusted
interest expense, adjusted taxes, adjusted net income and adjusted
diluted earnings per share (EPS). Vista Outdoor defines these
measures as gross profit, operating expenses, operating income,
other income/(expense), interest expense, taxes, net income, and
EPS, excluding, where applicable, the impact of costs incurred for
transition costs, executive transition costs, planned separation
costs, restructuring, contingent consideration and post-acquisition
compensation. Vista Outdoor management is presenting these measures
so a reader may compare gross profit, operating expenses, operating
income, other income, interest expense, taxes, net income, and EPS
excluding these items, as such adjusted measures provide investors
with an important perspective on the operating results of the
Company. Vista Outdoor management uses such adjusted measures
internally to assess business performance, and Vista Outdoor’s
definitions thereof may differ from those used by other
companies.
Three months ended September 24,
2023
(in thousands except per share
amounts)
Gross Profit
Operating Expenses
Operating income
Other Expense
Interest Expense
Taxes
Net Income
EPS (1)
As reported
$
208,870
$
133,085
$
75,785
$
(1,174
)
$
(16,643
)
$
(13,546
)
$
44,422
$
0.76
Transition costs
—
(3,554
)
3,554
—
—
(854
)
2,700
Executive transition costs
—
(433
)
433
—
—
(218
)
215
Planned separation costs
—
(7,375
)
7,375
—
—
(1,770
)
5,605
Restructuring
—
(3,936
)
3,936
—
—
(945
)
2,991
Post-acquisition compensation
—
(160
)
160
—
—
—
160
As adjusted
$
208,870
$
117,627
$
91,243
$
(1,174
)
$
(16,643
)
$
(17,333
)
$
56,093
$
0.96
(1) As reported net earnings per share and
adjusted net earnings per share are both calculated based on 58,299
diluted weighted average shares of common stock.
Three months ended September 25,
2022
(in thousands except per share
amounts)
Gross Profit
Operating Expenses
Operating income
Other Expense
Interest Expense
Taxes
Net Income
EPS (1)
As reported
$
262,874
$
131,707
$
131,167
$
741
$
(13,934
)
$
(24,519
)
$
93,455
$
1.62
Inventory step-up
3,036
—
3,036
—
—
(759
)
2,277
Transaction costs
—
(5,779
)
5,779
—
—
(951
)
4,828
Contingent consideration
—
11,313
(11,313
)
—
—
—
(11,313
)
Transition costs
—
(261
)
261
—
—
(65
)
196
Post-acquisition compensation
—
(1,139
)
1,139
—
—
(266
)
873
Debt issuance
—
—
—
—
785
(196
)
589
Planned separation costs
—
(7,420
)
7,420
—
—
(1,855
)
5,565
As adjusted
$
265,910
$
128,421
$
137,489
$
741
$
(13,149
)
$
(28,611
)
$
96,470
$
1.67
(1) As reported net earnings per share and
adjusted net earnings per share are both calculated based on 57,814
diluted weighted average shares of common stock.
During the three months ended September 24, 2023, we incurred
costs that we feel are not indicative of ongoing operations as
follows:
- transition costs for prior acquisitions to integrate into the
Company such as professional fees and travel costs;
- executive transition costs for executive search fees and
related costs for the transition of our CEO and General Counsel
executives;
- costs associated with the planned separation of our Outdoor
Products and Sporting Products reportable segments into two
independent, publicly traded companies, including restructuring,
severance, advisory and legal fees;
- restructuring costs related to a $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,
and;
- post-acquisition compensation expense related to the Stone
Glacier acquisition.
As noted above, our reported tax expense of $(13,546) results in
a tax rate of 23.4 percent and our adjusted tax expense of
$(17,333) results in an adjusted tax rate of 23.6 percent.
During the three months ended September 25, 2022, we incurred
costs that we believe are not indicative of ongoing operations as
follows:
- inventory step-up costs associated with our acquisitions, which
will be expensed over their inventory cycles;
- non-cash income for the change in the estimated fair value of
the contingent consideration payable related to our QuietKat
acquisition;
- transaction costs associated with possible and actual
transactions, including advisory and legal fees;
- costs for prior acquisitions to integrate into the Company such
as professional fees and travel;
- incurred post-acquisition compensation expense in connection
with the Stone Glacier acquisition;
- costs associated with the planned separation of our Outdoor
Products and Sporting Products reportable segments into two
independent, publicly traded companies, including advisory and
legal fees; and
- we refinanced our 2021 ABL Revolving Credit Facility, and wrote
off unamortized debt issuance costs related to such Credit
Facility.
As noted above, our reported tax expense of $(24,519) results in
a tax rate of 20.8 percent and our adjusted tax expense of
$(28,611) results in an adjusted tax rate of 22.9 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. Vista Outdoor’s definition of free cash flow may
differ from those used by other companies.
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 adjusted net income: transaction costs, transition
costs, planned separation costs, post-acquisition compensation,
restructuring, and executive transition costs. 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. Beginning with the second quarter of fiscal year 2024, we
modified our presentation of non-GAAP results and no longer exclude
from adjusted free cash flow, cash payments related to retention
payments in connection with our acquisitions and planned
separation. All periods presented have been adjusted for this
modification.
Six months ended
(in thousands)
Three months ended September
24, 2023
September 24, 2023
September 25, 2022
Projected year ending March
31, 2024
Cash provided by operating activities
$
33,839
$
107,540
$
193,402
$284,255–335,755
Capital expenditures
(5,809
)
(13,425
)
(12,957
)
~(40,875-42,375)
Free cash flow
$
28,030
$
94,115
$
180,445
$243,380-293,380
Transaction costs
—
—
8,995
—
Transition costs
4,926
6,665
506
6,665
Planned separation costs
4,405
7,034
11,543
7,034
Post acquisition compensation
83
166
—
166
Restructuring
2,040
4,281
—
4,281
Executive transition
691
3,474
—
3,474
Adjusted free cash flow
$
40,175
$
115,735
$
201,489
$265,000–315,000
Current FY24 Full-Year Adjusted EPS
Guidance Reconciliation
Low
High
EPS guidance including transition costs,
executive transition costs, planned separation costs,
restructuring, and post-acquisition compensation
$
3.37
$
3.77
Transition costs
0.07
0.07
Executive transition costs
0.01
0.01
Planned separation costs
0.13
0.13
Restructuring
0.06
0.06
Post-acquisition compensation
0.01
0.01
Adjusted EPS guidance
$
3.65
$
4.05
Organic Sales Reconciliation
Organic sales is a non-GAAP measure of sales 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 on a
consistent basis. This measure is used in assessing achievement of
management goals for at-risk compensation. Vista Outdoor’s
definition of organic sales may differ from those used by other
companies.
Three months ended
(in thousands)
September 24, 2023
September 25, 2022
Sporting Products
$
349,500
$
432,489
Outdoor Products
327,308
349,189
Sales, net
$
676,808
$
781,678
Less Sporting Products acquisitions
—
—
Less Outdoor Products acquisitions
(31,263
)
—
Sporting Products organic sales, net
$
349,500
$
432,489
Outdoor Products organic sales, net
296,045
349,189
Organic sales, net
$
645,545
$
781,678
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is defined as net income before other
income/(expense), interest, taxes, and depreciation and
amortization, excluding the non-recurring and non-cash items
referenced above. We calculate “Adjusted EBITDA margins” as
Adjusted EBITDA divided by net sales. Vista Outdoor management
believes adjusted EBITDA and adjusted EBITDA margin provide
investors with an important perspective on the Company’s core
profitability and help investors analyze underlying trends in the
Company’s business and evaluate its performance on an absolute
basis and relative to its peers. Adjusted EBITDA and adjusted
EBITDA margin should be considered in addition to, and not as a
substitute for, GAAP net income and GAAP net income margin. Vista
Outdoor’s definitions may differ from those used by other
companies.
Segment Adjusted EBITDA Reconciliation
Three months ended September
24, 2023
(in thousands)
Sporting Products
Outdoor Products
Total
Segment operating income (1)
$
92,348
$
12,854
$
105,202
Depreciation and amortization
6,458
17,474
23,932
Segment adjusted EBITDA
$
98,806
$
30,328
$
129,134
Segment adjusted EBITDA margin
28.3
%
9.3
%
Three months ended September
25, 2022
(in thousands)
Sporting Products
Outdoor Products
Total
Segment operating income (1)
$
133,552
$
29,730
$
163,282
Depreciation and amortization
6,398
15,543
21,941
Segment adjusted EBITDA
$
139,950
$
45,273
$
185,223
Segment adjusted EBITDA margin
32.4
%
13.0
%
(1) We do not calculate GAAP net income at
the segment level, but have provided segment operating income 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 press
release.
Consolidated Adjusted EBITDA Reconciliation
Three months ended
(in thousands)
September 24, 2023
September 25, 2022
Net Income
$
44,422
$
93,455
Other expense, net
1,174
(741
)
Interest expense, net
16,643
13,934
Income tax provision
13,546
24,519
Depreciation and amortization
24,879
22,984
Inventory step-up
—
3,036
Transaction costs
—
5,779
Transition costs
3,554
261
Restructuring
3,936
—
Executive transition costs
433
—
Contingent consideration
—
(11,313
)
Planned separation costs
7,375
7,420
Post-acquisition compensation
160
1,139
Adjusted EBITDA
$
116,122
$
160,473
Adjusted EBITDA Margin
17.2
%
20.5
%
Segment Income to Consolidated Net Income
Reconciliation
Three months ended
(in thousands)
September 24, 2023
September 25, 2022
Segment income
$
105,202
$
163,282
Corporate costs and expenses (1)
(29,417
)
(32,115
)
Operating income
$
75,785
$
131,167
Other expense, net
(1,174
)
741
Interest expense, net
(16,643
)
(13,934
)
Income tax provision
(13,546
)
(24,519
)
Net Income
$
44,422
$
93,455
(1) Includes corporate overhead and
certain non-recurring items as described in the schedules to this
press release
Net Debt and Net Debt Leverage Ratio
Net debt is defined as total debt less cash and cash
equivalents. Net debt leverage ratio is defined as net debt as of
the balance sheet date divided by adjusted EBITDA for the twelve
months then ended. We believe that using net debt is useful to
investors in determining our leverage ratio since we could choose
to use cash and cash equivalents to retire debt. Vista Outdoor’s
definitions may differ from those used by other companies.
Net Debt and Net Debt Leverage Ratio Reconciliation
(in thousands)
As of September 24,
2023
Total Debt Outstanding
$
945,000
Less: Cash
(39,954
)
Net Debt
$
905,046
(in thousands)
Twelve months ended September
24, 2023
Net Income
$
(126,666
)
Other expense, net
332
Interest expense, net
71,934
Income tax provision
26,634
Depreciation and amortization
99,595
Transition costs
9,462
Executive transition costs
6,722
Post-acquisition compensation
(4,041
)
Planned separation costs
25,003
Restructuring
17,881
Inventory step-up
6,492
Transaction costs
240
Intangibles impairment
374,355
Contingent consideration
(16,082
)
Adjusted EBITDA
$
491,861
Net debt leverage ratio
1.8
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. For news and information, visit our
website at www.VistaOutdoor.com.
No Offer or Solicitation
This communication is neither an offer to sell, nor a
solicitation of an offer to buy any securities, the solicitation of
any vote, consent or approval in any jurisdiction pursuant to or in
connection with the proposed transaction or otherwise, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Additional Information and Where to Find It
These materials may be deemed to be solicitation material in
respect of the transaction among Vista Outdoor, Revelyst, CSG
Elevate II Inc., CSG Elevate III Inc. and CZECHOSLOVAK GROUP a.s.
(the “Transaction”). In connection with the Transaction, Revelyst,
a subsidiary of Vista Outdoor, intends to file with the SEC a
registration statement on Form S-4 in connection with the proposed
issuance of shares of common stock of Revelyst to Vista Outdoor
stockholders pursuant to the Transaction, which Form S-4 will
include a proxy statement of Vista Outdoor that also constitutes a
prospectus of Revelyst (the “proxy statement/prospectus”).
INVESTORS AND STOCKHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS
FILED WITH THE SEC, INCLUDING VISTA OUTDOOR’S PROXY
STATEMENT/PROSPECTUS (IF AND WHEN AVAILABLE), BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES
TO THE TRANSACTION. Investors and stockholders will be able to
obtain the proxy statement/prospectus and any other documents (once
available) free of charge through the SEC’s website at www.sec.gov.
Copies of the documents filed with the SEC by Vista Outdoor will be
available free of charge on Vista Outdoor’s website at
www.vistaoutdoor.com.
Participants in Solicitation
Vista Outdoor, Revelyst, CSG Elevate II Inc., CSG Elevate III
Inc. and CZECHOSLOVAK GROUP a.s. and their respective directors,
executive officers and certain other members of management and
employees, under SEC rules, may be deemed to be “participants” in
the solicitation of proxies from Vista Outdoor’s stockholders in
respect of the Transaction. Information about Vista Outdoor’s
directors and executive officers is set forth in Vista Outdoor’s
proxy statement on Schedule 14A for its 2023 Annual Meeting of
Stockholders, which was filed with the SEC on June 12, 2023 and
subsequent statements of changes in beneficial ownership on file
with the SEC. These documents are available free of charge through
the SEC’s website at www.sec.gov. Additional information regarding
the interests of potential participants in the solicitation of
proxies in connection with the Transaction, which may, in some
cases, be different than those of Vista Outdoor’s stockholders
generally, will also be included in the proxy statement/prospectus
relating to the Transaction, when it becomes available.
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 Transaction,
including (i) the failure to receive, on a timely basis or
otherwise, the required approval of the Transaction by Vista
Outdoor’s stockholders, (ii) the possibility that any or all of the
various conditions to the consummation of the Transaction may not
be satisfied or waived, including the failure to receive any
required regulatory approvals from any applicable governmental
entities (or any conditions, limitations or restrictions placed on
such approvals), (iii) the possibility that competing offers or
acquisition proposals may be made, (iv) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement relating to the Transaction,
including in circumstances which would require Vista Outdoor to pay
a termination fee, (v) the effect of the announcement or pendency
of the Transaction on Vista Outdoor’s ability to attract, motivate
or retain key executives and employees, its ability to maintain
relationships with its customers, vendors, service providers and
others with whom it does business, or its operating results and
business generally, (vi) risks related to the Transaction diverting
management’s attention from Vista Outdoor’s ongoing business
operations and (vii) that the Transaction may not achieve some or
all of any anticipated benefits with respect to either business
segment 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 2023 and in the filings
we make with 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
Six months ended
(Amounts in thousands except per share
data)
September 24, 2023
September 25, 2022
September 24, 2023
September 25, 2022
Sales, net
$
676,808
$
781,678
$
1,370,141
$
1,584,290
Cost of sales
467,938
518,804
934,514
1,027,946
Gross profit
208,870
262,874
435,627
556,344
Operating expenses:
Research and development
12,203
11,154
24,283
19,051
Selling, general, and administrative
120,882
120,553
243,373
233,701
Operating income
75,785
131,167
167,971
303,592
Other (expense) income, net
(1,174
)
741
(1,715
)
741
Interest expense, net
(16,643
)
(13,934
)
(32,861
)
(20,244
)
Income before income taxes
57,968
117,974
133,395
284,089
Income tax provision
(13,546
)
(24,519
)
(30,873
)
(64,619
)
Net income
$
44,422
$
93,455
$
102,522
$
219,470
Earnings per common share:
Basic
$
0.77
$
1.65
$
1.78
$
3.88
Diluted
$
0.76
$
1.62
$
1.75
$
3.78
Weighted-average number of common shares
outstanding:
Basic
58,041
56,553
57,757
56,520
Diluted
58,299
57,814
58,426
58,098
VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(preliminary and
unaudited)
(Amounts in thousands except share
data)
September 24, 2023
March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
39,954
$
86,208
Net receivables
397,038
339,373
Net inventories
689,989
709,897
Income tax receivable
13,084
—
Other current assets
47,824
60,636
Total current assets
1,187,889
1,196,114
Net property, plant, and equipment
213,978
228,247
Operating lease assets
98,709
106,828
Goodwill
465,709
465,709
Net intangible assets
707,857
733,176
Deferred charges and other non-current
assets, net
72,657
68,808
Total assets
$
2,746,799
$
2,798,882
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current portion of long-term debt
$
150,000
$
65,000
Accounts payable
128,951
136,556
Accrued compensation
51,726
60,719
Accrued income taxes
—
6,676
Federal excise, use, and other taxes
33,509
38,543
Other current liabilities
153,265
146,377
Total current liabilities
517,451
453,871
Long-term debt
787,538
984,658
Deferred income tax liabilities
42,771
40,749
Long-term operating lease liabilities
97,651
103,313
Accrued pension and postemployment
benefits
24,323
25,114
Other long-term liabilities
51,321
59,384
Total liabilities
1,521,055
1,667,089
Common stock — $.01 par value:
Authorized — 500,000,000 shares
Issued and outstanding — 58,062,364 shares
as of September 24, 2023 and 57,085,756 shares as of March 31,
2023
579
570
Additional paid-in capital
1,653,407
1,711,155
Accumulated deficit
(128,006
)
(230,528
)
Accumulated other comprehensive loss
(76,035
)
(80,802
)
Common stock in treasury, at cost —
5,902,075 shares held as of September 24, 2023 and 6,878,683 shares
held as of March 31, 2023
(224,201
)
(268,602
)
Total stockholders' equity
1,225,744
1,131,793
Total liabilities and stockholders'
equity
$
2,746,799
$
2,798,882
VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(preliminary and
unaudited)
Six months ended
(Amounts in thousands)
September 24, 2023
September 25, 2022
Operating Activities:
Net income
$
102,522
$
219,470
Adjustments to net income to arrive at
cash provided by operating activities:
Depreciation
24,470
23,317
Amortization of intangible assets
25,336
18,983
Amortization of deferred financing
costs
4,154
2,518
Impairment of long-lived assets
2,802
—
Change in fair value of contingent
consideration
—
(11,425
)
Deferred income taxes
514
(124
)
Gain on foreign exchange
(240
)
(741
)
Loss on disposal of property, plant, and
equipment
69
551
Share-based compensation
2,680
14,756
Changes in assets and liabilities:
Net receivables
(57,128
)
(25,601
)
Net inventories
13,541
(36,042
)
Accounts payable
(5,104
)
10,092
Accrued compensation
(8,859
)
(26,233
)
Accrued income taxes
(17,125
)
4,313
Federal excise, use, and other taxes
(5,027
)
(1,261
)
Pension and other postretirement
benefits
685
944
Other assets and liabilities
24,250
(115
)
Cash provided by operating activities
107,540
193,402
Investing Activities:
Capital expenditures
(13,425
)
(12,957
)
Acquisition of businesses, net of cash
received
—
(761,170
)
Proceeds from the disposition of property,
plant, and equipment
137
43
Cash used for investing
activities
(13,288
)
(774,084
)
Financing Activities:
Proceeds from credit facility
102,000
465,000
Repayments of credit facility
(162,000
)
(165,000
)
Proceeds from issuance of long-term
debt
—
350,000
Debt issuance costs
(60
)
(15,905
)
Payments on long-term debt
(55,000
)
—
Payments made for contingent
consideration
(8,585
)
—
Proceeds from exercise of stock
options
39
181
Payment of employee taxes related to
vested stock awards
(16,200
)
(8,889
)
Cash (used) provided by financing
activities
(139,806
)
625,387
Effect of foreign exchange rate
fluctuations on cash
(700
)
(1,224
)
Increase (decrease) in cash and cash
equivalents
(46,254
)
43,481
Cash and cash equivalents at beginning of
period
86,208
22,584
Cash and cash equivalents at end of
period
$
39,954
$
66,065
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101846313/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
Vista Outdoor (NYSE:VSTO)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Vista Outdoor (NYSE:VSTO)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024