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Section 1: 8-K (8-K)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  May 11, 2017 (May 11, 2017)
 2000530371_vistaoutdoora12.jpg
 Vista Outdoor Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-36597
 
47-1016855
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer Identification
No.)
 
262 N University Drive
Farmington, UT
 
84025
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code:  (801) 447-3000
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Item 1.01 Entry into a Material Definitive Agreement

Amendment to the Amended and Restated Credit Agreement

On May 9, 2017, Vista Outdoor Inc. (“Vista Outdoor”) entered into the First Amendment (the “Amendment”) to the Amended and Restated Credit Agreement (the “Credit Agreement”), dated as of April 1, 2016, among Vista Outdoor, the lenders party thereto and Bank of America, N.A., as administrative agent.

Pursuant to the Amendment, among other things, certain specified financial covenants (consisting of a maximum consolidated leverage ratio and a maximum consolidated senior secured leverage ratio) were amended. The Amendment provides that the Consolidated Leverage Ratio (as defined in the Credit Agreement) must not exceed the following levels on the last day of any fiscal quarter for the following periods: (i) from July 2, 2017 through December 30, 2018, 4.75 to 1.00; (ii) from March 31, 2019 through December 29, 2019, 4.25 to 1.00; and (iii) from March 31, 2020 and thereafter, 4.00 to 1.00. The Amendment also provides that the Consolidated Senior Secured Leverage Ratio (as defined in the Credit Agreement) must not exceed the following levels on the last day of any fiscal quarter for the following periods: (i) from July 2, 2017 through December 30, 2018, 3.50 to 1.00; and (ii) from March 31, 2019 and thereafter, 3.00 to 1.00.

In addition, the rate at which borrowings under the Revolving Credit Facility and Term A Facility (each as defined in the Credit Agreement) bear interest was amended. The Amendment provides that borrowings shall bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.50% to 1.50% or the sum of a Eurodollar rate plus a margin ranging from 1.50% to 2.50%, with either such margin varying according to Vista’s Consolidated Leverage Ratio. Vista Outdoor is also required to continue to pay a commitment fee in respect of unused commitments under the Revolving Credit Facility, if any, at a rate ranging from 0.25% to 0.45% per annum depending on Vista Outdoor’s Consolidated Leverage Ratio.

The foregoing description of the Amendment is qualified in its entirety by reference to the actual terms of the Amendment. A copy of the Amendment is attached hereto as Exhibit 10.1, and is incorporated by reference herein.

Amendment of the Lake City Agreement and Entry into the Ammunition Supply Agreement

On May 5, 2017, Vista Outdoor’s wholly-owned subsidiary, Federal Cartridge Company (“Federal”), reached an agreement with Alliant Techsystems Operations LLC (“Orbital ATK”) to amend their long-term ammunition supply agreement, which expires on February 9, 2018, and to enter into a new ammunition supply agreement for the period from February 10, 2018 through September 30, 2020.

The Sixth Addendum to the Ammunition Products Supply Agreement (“APSA”) between Federal and Orbital ATK immaterially increases pricing to be paid from April 1, 2017 through the remaining term of the APSA ending on February 9, 2018, while eliminating a certain profit sharing mechanism.

The new ammunition supply agreement between Federal and Orbital ATK (“New Ammunition Supply Agreement”) provides that for the period from February 10, 2018, through September 30, 2020, Orbital ATK will grant Federal a priority right on the manufacture and supply of certain 5.56mm and .223 caliber ammunition products manufactured at the Lake City Army Ammunition Plant in Independence, Missouri (the "Ammunition Products"), subject to the priority rights of the U.S. Department of Defense. The New Ammunition Supply Agreement establishes pricing and adjustment mechanisms for the term of the contract, and allows Orbital ATK the option to sell ammunition to other commercial customers under certain circumstances at a price not lower than the price offered to Federal. In addition, Federal committed to purchase a minimum amount of Ammunition Products from Orbital ATK and to not purchase Ammunition Products from anyone other than Orbital ATK until an established capacity amount is purchased.
 
In addition to the agreements described above, the relationship between Vista Outdoor and Orbital ATK includes certain agreements related to our separation from Orbital ATK in February 2015, including the Tax Matters Agreement, dated as of February 9, 2015 among Alliant Techsystems Inc. and Vista Outdoor Inc., filed as Exhibit 2.5 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2015.

Item 2.02 Results of Operations and Financial Condition
 
On May 11, 2017, Vista Outdoor issued a press release reporting its financial results for the fiscal year and fiscal quarter ended March 31, 2017. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.


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Note: Information in this report (including the exhibit) furnished pursuant to Item 2.02 of Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 7.01. Regulation FD Disclosure

Vista has posted an updated investor presentation dated as of May 11, 2017 to its website. The investor presentation contains an overview of the Company and its strategy, including information related to the Company’s financial results. The investor presentation and any future updates thereto will be available on the Company’s website at http://investors.vistaoutdoor.com. A copy of the presentation is attached as Exhibit 99.2 and incorporated by reference herein.
 
Note: Information in this report (including the exhibit) furnished pursuant to Item 7.01 of Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This report will not be deemed an admission as to the materiality of any information in the report that is required to be disclosed solely as a result of the requirements of Regulation FD. Furthermore, the information provided in this report and in Exhibit 99.2 hereto shall not be deemed to be incorporated by reference into any filings of the Company under the Securities Act of 1933.
 
Item 9.01. Financial Statements and Exhibits
 
(d)                                 Exhibits.
 
Exhibit
No.
 
Description
10.1

 
First Amendment to Credit Agreement, dated as of May 9, 2017, among Vista Outdoor Inc., the lenders party thereto and Bank of America, N.A., as administrative agent.
99.1

 
Press release, dated May 11, 2017, reporting Vista Outdoor’s financial results for the fiscal year and fiscal quarter ended March 31, 2017.
99.2

 
Investor presentation slides issued by Vista Outdoor Inc. on May 11, 2017.


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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
VISTA OUTDOOR INC.
 
 
 
 
By:
/s/ Stephen M. Nolan
 
Name:
Stephen M. Nolan
 
Title:
Senior Vice President and Chief Financial Officer
 
 
 
Date: May 11, 2017
 
 

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EXHIBIT INDEX

Exhibit
No.
 
Description
10.1

 
First Amendment to Credit Agreement, dated as of May 9, 2017, among Vista Outdoor Inc., the lenders party thereto and Bank of America, N.A., as administrative agent.
99.1

 
Press release, dated May 11, 2017, reporting Vista Outdoor’s financial results for the fiscal year and fiscal quarter ended March 31, 2017.
99.2

 
Investor presentation slides issued by Vista Outdoor Inc. on May 11, 2017.



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Section 2: EX-10.1 (EXHIBIT 10.1)

Exhibit
Exhibit 10.1

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 9, 2017 (the “Effective Date”), is entered into by and among Vista Outdoor Inc., a Delaware corporation (the “Borrower”), each Lender party hereto and Bank of America, N.A., as Administrative Agent (in such capacity, the “Administrative Agent”).
PRELIMINARY STATEMENTS
WHEREAS, the Borrower, the Lenders from time to time party thereto and the Administrative Agent entered into that certain Amended and Restated Credit Agreement, dated as of April 1, 2016 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time as of the date hereof, the “Credit Agreement;” the terms defined therein being used herein as therein defined unless otherwise defined herein);
WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders agree to amend the Credit Agreement to make certain changes as provided herein; and
WHEREAS, the Borrower, the Lenders party hereto (which constitute the Required Lenders for this Amendment) and the Administrative Agent have agreed that the Credit Agreement be amended, upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and further valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
Section 1.     Amendment to the Credit Agreement. Upon, and subject to, the satisfaction of the conditions precedent set forth in Section 5 below, the Credit Agreement is hereby amended as follows:
(a)     Section 1.01 of the Credit Agreement is amended by inserting the following new definitions in the appropriate alphabetical order:
First Amendment Effective Date” means the date on which all of the conditions contained in Section 5 of the First Amendment have been satisfied or waived.
First Amendment” means that certain First Amendment to Amended and Restated Credit Agreement, dated as of May 9, 2017, by and among the Borrower, the Lenders party thereto and the Administrative Agent.

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(b)     Section 1.01 of the Credit Agreement is further amended by restating the pricing grid set forth in the definition of “Applicable Rate” as follows:
Revolving Credit Facility and Term A Facility – Applicable Rate
Pricing Level
Consolidated Leverage Ratio
Commitment Fee
Eurodollar Percentage
Base Rate Percentage
1
> 4.25 : 1.00
0.45%
2.50%
1.50%
2
< 4.25 : 1.00 but
> 3.50 : 1.00
0.40%
2.25%
1.25%
3
< 3.50 : 1.00 but
> 3.00 : 1.00
0.35%
2.00%
1.00%
4
< 3.00 : 1.00 but
> 2.25 : 1.00
0.30%
1.75%
0.75%
5
< 2.25 : 1.00
0.25%
1.50%
0.50%

(c)     Section 1.01 of the Credit Agreement is further amended by restating the second paragraph of the definition of “Applicable Rate” as follows:
The Applicable Rate applicable to the Revolving Credit Loans, the Term A Loans and the commitment fee payable in respect of the unutilized portion of the Revolving Credit Facility shall be determined by reference to the most recent Compliance Certificate delivered pursuant to Section 6.02(b). Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio, as calculated in a Compliance Certificate delivered pursuant to Section 6.02(b), for any such calendar quarter shall become effective as of the first Business Day following delivery of such Compliance Certificate; provided, that if a Compliance Certificate is not delivered when due in accordance with Section 6.02(b), then Pricing Level 1 shall apply from the first Business Day immediately after the date such Compliance Certificate was required to be delivered to and including the date on which such Compliance Certificate is actually delivered, after which the pricing level corresponding to the Consolidated Leverage Ratio set forth in such Compliance Certificate shall apply.
(d)     Section 1.01 of the Credit Agreement is further amended by restating the definition of “Consolidated EBITDA” as follows:
Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (without duplication) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) income tax expense for such period, (iii) depreciation and amortization for such period, (iv) non‑recurring, unusual or extraordinary expenses or charges for such period (including, for the avoidance of doubt, write-off or charge related to the Gander Mountain insolvency in an amount not to exceed $17,000,000), (v) amortization or write off of deferred financing costs, (vi) non‑cash charges related to stock based employee compensation, (vii) non-cash charges associated with the mark‑to‑market of Swap Contracts, (viii) impairment charges or write offs with respect to goodwill and other intangible assets and (ix) losses due solely to fluctuations in currency values and the

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related tax effects, and minus the following to the extent included in calculating such Consolidated Net Income: (x) gains due solely to fluctuations in currency values and the related tax effects and (y) non-recurring, unusual or extraordinary gains.
(e)     Section 7.06(d) of the Credit Agreement is hereby amended by restating subclause (3)(B) thereof as follows:
(B) the aggregate amount of such Restricted Payments made pursuant to this subclause (3)(B) would be less than the sum of (w) $150,000,000 in the aggregate since the Restatement Closing Date plus (x) up to 100% of the Net Cash Proceeds from the sale or issuance by the Borrower of any of its Equity Interests since the Restatement Closing Date plus (y) if positive, 50% of the Consolidated Net Income since the First Amendment Effective Date;
(f)     Section 7.10 of the Credit Agreement is hereby amended by restating clause (b) thereof as follows:
(b)    Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio on the last day of any fiscal quarter to be greater than the applicable ratio set forth in the grid below:
Fiscal Quarter Ending
Maximum Consolidated Leverage Ratio
July 2, 2017 through December 30, 2018
4.75 : 1.00
March 31, 2019 through December 29, 2019
4.25 : 1.00
March 31, 2020 and thereafter
4.00 :1.00

(g)     Section 7.10 of the Credit Agreement is hereby amended by adding a new clause (c) at the end thereof as follows:
(c)    Consolidated Senior Secured Leverage Ratio. Permit the Consolidated Senior Secured Leverage Ratio on the last day of any fiscal quarter to be greater than the applicable ratio set forth in the grid below:
Fiscal Quarter Ending
Maximum Consolidated Senior Secured Leverage Ratio
July 2, 2017 through December 30, 2018
3.50 : 1.00
March 31, 2019 and thereafter
3.00 :1.00

Section 2.     Representations and Warranties of the Borrower. The Borrower represents to the Administrative Agent and the Lenders that:

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(a)     No Default or Event of Default has occurred and is continuing on and as of the Effective Date. The representations and warranties of the Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document are true and correct in all material respects on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2(a), the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement, respectively; provided that, to the extent such representations and warranties are qualified with “materiality” or “Material Adverse Effect” or similar terms, such representations and warranties shall be true and correct in all respects.
(b)     The execution, delivery and performance by the Borrower of this Amendment is within the Borrower’s corporate or other organizational powers, has been duly authorized by all necessary corporate or other organizational action, and does not and will not (a) contravene the terms of the Borrower’s Organization Documents; (b) conflict with or result in any breach or contravention of, or require any payment to be made under (i) any Contractual Obligation to which the Borrower is a party or affecting the Borrower or the properties of the Borrower or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject; (c) violate any Law; or (d) result in the creation of any Lien other than a Lien expressly permitted under Section 7.01 of the Credit Agreement, except with respect to any conflict, breach or contravention or payment referred to in clause (b)(i), to the extent that such conflict, breach or contravention or payment could not reasonably be expected to have a Material Adverse Effect.
(c)     The Borrower has all requisite corporate or other organization power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Amendment. This Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity.
Section 3.     Reference to and Effect on Loan Documents.
(a)     On and after the Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement and each reference in each of the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by this Amendment. This Amendment shall for all purposes constitute a Loan Document.
(b)     The Credit Agreement and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents.
(c)     Each of the parties hereto acknowledges and agrees, for the avoidance of doubt, that, from and after the Effective Date, the Applicable Rate for all purposes of the Credit Agreement shall be determined in accordance with the provisions of the Credit Agreement, as amended hereby and that for any

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day prior to the Effective Date, the Applicable Rate shall be determined in accordance with the Credit Agreement prior to giving effect to this Amendment.
Section 4.     Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.
Section 5.     Conditions to Effectiveness. This Amendment shall become effective at the time that all of the following conditions precedent have been met or waived:
(a)     Agreement. The Administrative Agent shall have received duly executed signature pages for this Amendment signed by the Administrative Agent, the Required Lenders and the Borrower.

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(b)     Consent Fee. The Administrative Agent shall have received from the Borrower, for the account of each Lender party hereto that delivers its executed signature page to this Amendment by no later than the date and time specified by the Administrative Agent, a fully earned and non-refundable consent fee in an amount equal to 0.125% of such Lender’s Term Loans and Revolving Credit Commitments as of the Effective Date.
(c)     Payment of Expenses. The Borrower shall have paid or reimbursed the Administrative Agent for all reasonable and documented or invoiced out-of-pocket expenses (including, without limitation, the reasonable and documented or invoiced fees and out-of-pocket expenses and disbursements of Shearman & Sterling LLP, counsel to the Administrative Agent), which shall have been incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment.
(d)     Representations and Warranties. The representations and warranties of the Borrower contained in Section 2 of this Amendment are true and correct on and as of the date of the Effective Date as if made on and as of such date.
Section 6.     Interpretation. Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Amendment.
Section 7.     Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 8.     Waiver of Right to Trial by Jury. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

VISTA OUTDOOR INC.,
as the Borrower


By:_/s/ Stephen M. Nolan _____________________
Name:    Stephen M. Nolan
Title:    Senior Vice President and
Chief Financial Officer



BANK OF AMERICA, N.A.,
as Administrative Agent


By:__/s/ Brenda Schriner___________________________
Name:    Brenda Schriner
Title:    Vice President



BANK OF AMERICA, N.A.,
as a Lender


By:__/s/ Matthew N. Walt_________________________
Name:    Matthew N. Walt
Title:    Vice President



U.S. BANK NATIONAL ASSOCIATION,
as a Lender


By:__/s/ Andrew Beckman_________________________
Name:    Andrew Beckman
Title:    Vice President



THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
as a Lender


By:__/s/ Thomas J. Sterr___________________________
Name:    Thomas J. Sterr
Title:    Authorized Signatory



JPMORGAN CHASE BANK, N.A.,
as a Lender


By:__/s/ Laura Woodward____________________________
Name:    Laura Woodward
Title:    Vice President



WELLS FARGO BANK, N.A.,
as a Lender


By:__/s/ Luke Harbinson_____________________________
Name:    Luke Harbinson
Title:    Director



BANK OF THE WEST,
as a Lender


By:__/s/ Brad Conley_______________________________
Name:    Brad Conley
Title:    Director



PNC BANK, NATIONAL ASSOCIATION,
as a Lender


By:__/s/ Brandon Norder ____________________________
Name:    Brandon Norder
Title:    Senior Vice President



CAPITAL ONE, N.A.,
as a Lender


By:__/s/ Sean C. Horridge ___________________________
Name:    Sean C. Horridge
Title:    Vice President



BRANCH BANKING AND TRUST COMPANY,
as a Lender


By:__/s/ Trevor H. Williams __________________________
Name:    Trevor H. Williams
Title:    Banking Officer



REGIONS BANK,
as a Lender


By:__/s/ Brand Hosford ______________________________
Name:    Brand Hosford
Title:    Vice President



BMO HARRIS BANK N.A,
as a Lender


By:__/s/ Marc Maslanka ______________________________
Name:    Marc Maslanka
Title:    Vice President



ZB, N.A. DBA ZIONS FIRST NATIONAL BANK,
as a Lender


By:__/s/ Thomas C. Etzel _____________________________
Name:    Thomas C. Etzel
Title:    Senior Vice President
Zions First National Bank Division



THE NORTHERN TRUST COMPANY,
as a Lender


By:__/s/ John Lascody _________________________________
Name:    John Lascody
Title:    Vice President



ASSOCIATED BANK, N.A.,
as a Lender


By:__/s/ Kyle A. Rabine ____________________________
Name:    Kyle A. Rabine
Title:    Vice President



PEOPLE’S UNITED BANK, NATIONAL ASSOCIATION,
as a Lender


By:__/s/ Jennie McElhone___________________________
Name:    Jennie McElhone
Title:    Vice President



WOODFOREST NATIONAL BANK,
as a Lender


By:__/s/ John Ellis ____________________________
Name:    John Ellis
Title:    Senior Vice President



STIFEL BANK & TRUST,
as a Lender


By:__/s/ Matthew L. Diehl___________________________
Name:    Matthew L. Diehl
Title:    Senior Vice President



MORGAN STANLEY BANK, N.A.,
as a Lender


By:__/s/ Dmitriy Barskiy ____________________________
Name:    Dmitriy Barskiy
Title:    Executive Director

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Section 3: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

2000530371_vistaoutdoora13.jpg  
 
News Release
Corporate Communications
262 N. University Dr.
Farmington, UT 84025
Phone:  801-447-3000

 
For Immediate Release
 
 
 
Media Contact:
Investor Contact:
 
 
Amanda Covington
Michael Pici
Phone: 801-447-3035
Phone: 801-447-3168
E-mail: media.relations@vistaoutdoor.com
E-mail: investor.relations@vistaoutdoor.com
 
Vista Outdoor Reports FY17 Fourth Quarter and Full-Year Operating Results

Vista Outdoor Establishes FY18 Financial Guidance

Vista Outdoor Announces New Lake City Long-Term Supply Agreement through September 2020

Farmington, Utah, May 11, 2017 — Vista Outdoor Inc. (NYSE: VSTO) today reported operating results for the fourth quarter and full Fiscal Year 2017 (FY17), both of which ended on March 31, 2017

"Vista Outdoor is focused on implementing initiatives that will ensure we achieve the vision and performance objectives we have established for this company, and in doing so, generate growth and returns for our shareholders," said Vista Outdoor Chairman and Chief Executive Officer Mark DeYoung.

"We are experiencing unprecedented decline in demand for ammunition and firearms following the presidential election and softness in the retail environment. These impacts have manifested themselves in our results. In order to address ongoing market headwinds, we are taking actions on several fronts. We are expanding our brands’ e-commerce presence to capitalize on the shift by consumers to online shopping. We are right-sizing our workforce, streamlining the organization and reducing inventory. We are driving cost-savings initiatives and improved efficiencies within our manufacturing, sourcing and distribution capabilities. We have also negotiated a long-term agreement with Orbital ATK for the supply of ammunition products produced at the Lake City Army Ammunition Plant through September 2020. This new agreement sustains our leadership position in providing these products to the shooting sports market.

"The Outdoor Foundation recently published its 2017 'Outdoor Recreation Participation Topline Report' illustrating that outdoor recreation remains a vibrant and expanding passion for millions of outdoor enthusiasts and casual participants. Vista Outdoor has brand presence and product offerings in six of the top 10 areas of growth in outdoor recreation participation over the past three years. This positive overall trend in outdoor recreation reaffirms our strategy to expand our outdoor products portfolio beyond shooting sports and into other outdoor recreation categories.

"We remain confident in our ability to compete and win with a broad portfolio of exciting brands and products, and in our ability to deliver growth and value over the long term," said DeYoung.

For the fourth quarter ended March 31, 2017:
Sales were $579 million, down 5 percent from the prior-year quarter and down 21 percent organically.
Gross profit was $144 million, down 12 percent from the prior-year quarter and down 27 percent organically.
Operating expenses were $130 million. Adjusted operating expenses were $129 million, compared to $93 million in the prior-year quarter. The increase includes operating expenses from acquired businesses and a $17 million write off of a receivable due to a customer's bankruptcy.
Fully diluted earnings per share (EPS) was $0.02. Adjusted EPS was $0.03, compared to $0.63 in the prior-year quarter. The decrease was caused by the items noted above, partially offset by lower share count due to share

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repurchases. Both fully diluted and adjusted EPS results include ($0.18) for the write off of the receivable mentioned above.
The company repurchased approximately 780,000 shares in the quarter for $24.5 million.

For the fiscal year ended March 31, 2017:
Sales were $2.55 billion, up 12 percent from the prior year and down 7 percent organically.
Gross profit was $669 million, up 8 percent from the prior year and down 12 percent organically.
Operating expenses were $876 million. Adjusted operating expenses were $455 million, compared to $344 million in the prior year. The increase includes operating expenses from acquired businesses and the $17 million write off mentioned above.
EPS was $(4.66). Adjusted EPS was $1.90, compared to $2.50 in the prior year. Both GAAP and adjusted EPS results include ($0.18) for the write off mentioned above.
Free cash flow was $38 million, compared to $163 million in the prior-year period.
Total year shares repurchased were approximately 3,876,000 shares for $151 million.

Please see the tables in the press release for a reconciliation of non-GAAP adjusted gross profit, operating profit, tax rate, fully diluted earnings per share, and free cash flow to the comparable GAAP measures.

Outlook for Fiscal Year 2018:

Vista Outdoor is establishing initial FY18 financial guidance. The company expects:

Sales in a range of $2.36 billion to $2.42 billion.
Interest expense of approximately $50 million.
Tax rate of approximately 37 percent.
EPS in a range of $1.10 to $1.30.
Capital expenditures of approximately $70 million.
Free cash flow in a range of $175 million to $200 million.

The guidance above does not include the impact of any future strategic acquisitions, divestitures, investments, business combinations or other significant transactions, nor the impact of transition expenses for already-completed acquisitions.

"Our FY18 financial guidance reflects a continuation of the weakness in the shooting sports market through FY18," said Vista Outdoor Chief Financial Officer Stephen Nolan. "While we still see indications that inventories in the channel will stabilize by the middle of the fiscal year, we expect the period of market correction will extend beyond that point. For FY18, we anticipate EBITDA margins of approximately 11 percent. Near term, the first quarter will reflect a continuation of the particularly weak market conditions we saw in the fourth quarter of FY17. We expect to generate approximately 22 to 24 percent of our annual revenue guidance in the first quarter. We also expect to generate approximately 10 percent of our annual EPS guidance during the first quarter, as a result of increased promotional activity, which is driven by continued weak market conditions and bankruptcy liquidations.

"Additionally, in partnership with our lenders, we amended the financial covenants in our credit agreement to give us improved financial flexibility over the current period of market softness."

Earnings Conference Call Webcast Information

Vista Outdoor will hold an investor conference call to discuss its Fiscal Year 2017 financial results on May 11, 2017, at 9 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 for one month after the call. The telephone number is 719-457-0820, and the confirmation code is 9542177.


2


Reconciliation of Non-GAAP Financial Measures
 
Gross Profit, Operating Profit, Tax Rate and Earnings Per Share
 
The adjusted gross profit, adjusted operating expenses, operating profit (adjusted EBIT), adjusted tax rate, adjusted net income, and adjusted earnings per share (adjusted EPS) presented are non-GAAP financial measures that Vista Outdoor defines as gross profit, operating expenses, operating profit (EBIT), tax rate, net income, and EPS excluding, where applicable, the impact of a non-cash goodwill and intangible asset impairment, the impact of a gain recorded on an acquisition claim settlement, changes in value of future payments of contingent consideration, costs incurred in the period for completed and potential transactions, transition costs for the Action Sports acquisition, facility rationalization costs, and acquisition inventory step-up. As these items impact a variety of financial measures Vista Outdoor management is presenting each of these measures so a reader may compare gross profit, operating expenses, EBIT, tax rate, 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 these measurements internally to assess business performance, and Vista Outdoor's definition may differ from those used by other companies.

Total Vista Outdoor for the Quarter Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
Operating Profit
 
Taxes
 
Tax Rate
 
Net Income
 
EPS
As reported
 
$
129,827

 
$
13,967

 
$
2,097

 
71.0
%
 
$
857

 
$
0.02

Transaction and transition costs
 
(490
)
 
490

 
136

 
 
 
354

 

Contingent Consideration
 
(382
)
 
382

 
(87
)
 
 
 
469

 
0.01

As adjusted
 
$
128,955

 
$
14,839

 
$
2,146

 
56.1
%
 
$
1,680

 
$
0.03

 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
Operating Profit
 
Taxes
 
Tax Rate
 
Net Income
 
EPS
As reported
 
$
95,824

 
$
67,801

 
$
23,046

 
38.2
%
 
$
37,312

 
$
0.61

Transaction costs
 
(1,331
)
 
1,331

 
506

 
 
 
825

 
0.01

Facility rationalization
 
(1,073
)
 
1,073

 
408

 
 
 
665

 
0.01

As adjusted
 
$
93,420

 
$
70,205

 
$
23,960

 
38.2
%
 
$
38,802

 
$
0.63

 
 
 
 
 
 
 
 
 
 
 
 
 

3


Total Vista Outdoor for the Year Ended
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit
 
Operating Expenses
 
Operating Profit
 
Taxes
 
Tax Rate
 
Net Income
 
EPS
As reported
$
669,186

 
$
876,210

 
$
(207,024
)
 
$
23,760

 
(9.5
)%
 
$
(274,454
)
 
$
(4.66
)
Goodwill and intangibles impairment

 
(449,199
)
 
449,199

 
35,670

 
 
 
413,529

 
7.02

Acquisition claim settlement gain, net

 
30,027

 
(30,027
)
 
143

 
 
 
(30,170
)
 
(0.51
)
Contingent consideration

 
2,171

 
(2,171
)
 
(1,045
)
 
 
 
(1,126
)
 
(0.02
)
Transaction and transition costs

 
(4,575
)
 
4,575

 
1,035

 
 
 
3,540

 
0.06

Inventory step-up
817

 

 
817

 
310

 
 
 
507

 
0.01

As adjusted
$
670,003

 
$
454,634

 
$
215,369

 
$
59,873

 
34.9
 %
 
$
111,826

 
$
1.90

 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit
 
Operating Expenses
 
Operating Profit
 
Taxes
 
Tax Rate
 
Net Income
 
EPS
As reported
$
619,445

 
$
356,687

 
$
262,758

 
$
91,370

 
38.3
 %
 
$
147,037

 
$
2.35

Transaction costs

 
(9,009
)
 
9,009

 
2,384

 
 
 
6,625

 
0.11

Facility rationalization

 
(3,258
)
 
3,258

 
1,238

 
 
 
2,020

 
0.03

Inventory step-up
1,043

 

 
1,043

 
396

 
 
 
647

 
0.01

As adjusted
$
620,488

 
$
344,420

 
$
276,068

 
$
95,388

 
37.9
 %
 
$
156,329

 
$
2.50

 
 
 

 
 
 
 
 
 
 
 
 
 
Outdoor Products
 
 
 
 
 
Year ended March 31, 2017:
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
Gross Profit
 
As reported
 
 
 
$
292,967

 
Inventory step-up
 
 
 
817

 
As adjusted
 
 
 
$
293,784

 
 
 
 
 
 
 
Year ended March 31, 2016:
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
Gross Profit
 
As reported
 
 
 
$
242,817

 
Inventory step-up
 
 
 
1,043

 
As adjusted
 
 
 
$
243,860

 
 
 
 
 
 
 

*NOTE: Adjustments to "as reported" results are items that are excluded to arrive at the "as adjusted" results for the quarters and years ended March 31, 2017 and 2016.

A challenging retail environment and other market pressures resulted in deeper discounting of Vista Outdoor’s accessories products during the second half of the year ended March 31, 2017. The deeper discounting caused a reduction in the projected cash flows of the Hunting and Shooting Accessories reporting unit. Given this drop in projected cash flows and a continued challenging retail environment, we determined a triggering event had occurred requiring an evaluation of goodwill. Upon completion of the analysis an impairment of goodwill and identifiable intangible assets was determined to be necessary. Given the non-cash and unusual and infrequent nature of this intangible asset impairment we do not believe these costs are indicative of operations of the company. The tax effect of the goodwill and intangible impairment charge was determined based on the fact that the goodwill impairment charge of $354 million is non-deductible for tax purposes and the remaining intangible asset

4


impairment of $95 million was deductible at a rate of approximately 37.5 percent.
During the year ended March 31, 2017, we finalized a settlement of claims that we brought against the previous owner of Bushnell Holdings and third-party insurance providers relating to certain disputes arising under the purchase agreement with respect to the acquisition. The significant majority of the transaction was not taxable for income tax purposes.

For the quarter and year ended March 31, 2017, as result of not achieving the first growth milestone and the likelihood of not meeting any future growth milestone for the Jimmy Styks acquisition and changes in expectations for remaining periods for the earnout related to the Bell Powersports product line, the company revalued the contingent consideration based on expected incremental profitability growth milestones and reduced the liability. In addition, Vista Outdoor recorded a portion of the $10 million of compensation for Camp Chef earn-out, which will be paid over the next three years, subject to continued Camp Chef leadership employment and the achievement of certain incremental profitability growth milestones. Given this balance is related to the purchase price of the company and is not normal compensation of the employees and will not be a continuing cost, we do not believe these costs are indicative of operations of the company. The tax effect of the transaction and transition costs was calculated based on a blended statutory rate of 38 percent.

For the years ended March 31, 2017 and 2016, as a result of the acquisitions of Action Sports, CamelBak and Jimmy Styks, Vista Outdoor recorded a step-up in the inventory balances, which is the purchase accounting fair value adjustment. The inventory step-up was expensed to the income statement over the first inventory cycle. The tax effect of the inventory step-up was calculated based on a blended statutory rate of 38 percent.

During the quarters and years ended March 31, 2017 and 2016, Vista Outdoor incurred transaction and transition costs associated with the completed acquisitions of Jimmy Styks, Camelbak, Action Sports and Camp Chef as well as other possible transactions, including advisory, legal and accounting service fees. Transition costs for the Action Sports business include one-time costs related to the integration of the business into the company including vendor change fees, insurance-related expenses, and severance costs. Given the nature of transaction and transition costs, and differences in these amounts from one acquisition to another, we feel these costs are not indicative of operations of the company. The tax effect of the transaction and transition costs was calculated based on a blended statutory rate of 38 percent.

During the year ended March 31, 2016, Vista Outdoor incurred certain facility rationalization costs associated with the closure of the Meridian, Idaho facility. The tax effect of the facility rationalization costs was calculated based on a blended statutory rate of 38 percent.

Free Cash Flow
 
Free cash flow is defined as cash provided by operating activities less capital expenditures and excluding an acquisition claim settlement, and transaction and transition costs net of taxes incurred to date. 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.
 
 
Year ended March 31, 2017
 
Year ended March 31, 2016
 
Projected Year Ending March 31, 2018
Cash provided by operating activities
 
$
154,688

 
$
198,002

 
$245,000–$270,000

Capital expenditures
 
(90,665
)
 
(41,526
)
 
~(70,000)

Acquisition claim settlement gain, net
 
(30,027
)
 

 

Transaction costs paid to date, net of tax
 
3,720

 
6,485

 

Free cash flow
 
$
37,716

 
$
162,961

 
$175,000–$200,000

 
EBITDA Margin
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.


5


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 is a leading global designer, manufacturer and marketer of consumer products in the growing outdoor sports and recreation markets. The company operates in two segments, Shooting Sports and Outdoor Products, and 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. Vista Outdoor is headquartered in Utah and has manufacturing operations and facilities in 13 U.S. States, Canada, Mexico and Puerto Rico along with international customer service, sales and sourcing operations in Asia, Australia, Canada, and Europe.

Forward-Looking Statements

Certain statements in this press release and other oral and written statements made by Vista Outdoor from time to time are forward-looking statements, including those that discuss, among other things: Vista Outdoor’s 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 Vista Outdoor’s actual results to differ materially from expectations described in such forward-looking statements, including the following: general economic and business conditions in the U.S. and Vista Outdoor’s other markets, including conditions affecting employment levels, consumer confidence and spending; Vista Outdoor’s ability to attract and retain key personnel and maintain and grow its relationships with customers, suppliers and other business partners, including Vista Outdoor’s ability to obtain acceptable third party licenses; Vista Outdoor’s ability to adapt its products to changes in technology, the marketplace and customer preferences; Vista Outdoor’s ability to maintain and enhance brand recognition and reputation; reductions, unexpected changes in or our inability to accurately forecast demand for ammunition, firearms or accessories or other outdoor sports and recreation products; risks associated with Vista Outdoor’s sales to significant retail customers, including unexpected cancellations, delays and other changes to purchase orders; supplier capacity constraints, production disruptions or quality or price issues affecting Vista Outdoor’s operating costs; Vista Outdoor’s competitive environment; risks associated with compliance and diversification into international and commercial markets; the supply, availability and costs of raw materials and components; increases in commodity, energy and production costs; changes in laws, rules and regulations relating to Vista Outdoor’s business, such as federal and state firearms and ammunition regulations; Vista Outdoor’s ability to execute its long-term growth strategy, including our ability to complete and realize expected benefits from acquisitions and integrate acquired businesses; Vista Outdoor’s ability to take advantage of growth opportunities in international and commercial markets; foreign currency exchange rates and fluctuations in those rates; 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; risks associated with cybersecurity and other industrial and physical security threats;  capital market volatility and the availability of financing; changes to accounting standards or policies; and changes in tax rules or pronouncements. Vista Outdoor undertakes no obligation to update any forward-looking statements. For further information on factors that could impact Vista Outdoor, and statements contained herein, please refer to Vista Outdoor’s filings with the Securities and Exchange Commission.
 
#          #          #

6



VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(preliminary and unaudited)
 
 
QUARTERS ENDED
 
YEARS ENDED
(Amounts in thousands except per share data)
 
March 31, 2017
 
March 31, 2016
 
March 31, 2017
 
March 31, 2016
Sales, net
 
$
578,753

 
$
612,303

 
$
2,546,892

 
$
2,270,734

Cost of sales
 
434,959

 
448,678

 
1,877,706

 
1,651,289

Gross profit
 
143,794

 
163,625

 
669,186

 
619,445

Operating expenses:
 
 

 
 

 
 

 
 

Research and development
 
8,618

 
3,660

 
32,769

 
12,512

Selling, general, and administrative
 
121,209

 
92,164

 
424,269

 
344,175

Acquisition claim settlement gain, net
 

 

 
(30,027
)
 

Goodwill and intangibles impairment
 

 

 
449,199

 

Income (loss) before interest and income taxes
 
13,967

 
67,801

 
(207,024
)
 
262,758

Interest expense, net
 
(11,013
)
 
(7,443
)
 
(43,670
)
 
(24,351
)
Income (loss) before income taxes
 
2,954

 
60,358

 
(250,694
)
 
238,407

Income tax provision
 
2,097

 
23,046

 
23,760

 
91,370

Net income (loss)
 
$
857

 
$
37,312

 
$
(274,454
)
 
$
147,037

Earnings (loss) per common share:
 
 

 
 

 
 

 
 

Basic
 
$
0.02

 
$
0.61

 
$
(4.66
)
 
$
2.36

Diluted
 
$
0.02

 
$
0.61

 
$
(4.66
)
 
$
2.35

Weighted-average number of common shares outstanding:
 
 

 
 

 
 
 
 
Basic
 
56,929

 
60,774

 
58,911

 
62,211

Diluted
 
57,021

 
61,132

 
58,911

 
62,568

 
 
 
 
 
 
 
 
 


7


VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(preliminary and unaudited)
 
(Amounts in thousands except share data)
 
March 31, 2017
 
March 31, 2016
Assets
 
 

 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
45,075

 
$
151,692

Net receivables
 
450,715

 
428,398

Net inventories
 
562,795

 
440,240

Income tax receivable
 
25,658

 

Other current assets
 
25,604

 
29,334

Total current assets
 
1,109,847

 
1,049,664

Net property, plant, and equipment
 
272,346

 
203,485

Goodwill
 
857,631

 
1,023,451

Net intangible assets
 
708,530

 
650,472

Deferred charges and other non-current assets
 
28,393

 
15,562

Total assets
 
$
2,976,747

 
$
2,942,634

LIABILITIES AND EQUITY
 
 

 
 

Current liabilities:
 
 

 
 

Current portion of long-term debt
 
$
32,000

 
$
17,500

Accounts payable
 
127,718

 
147,738

Accrued compensation
 
33,663

 
47,394

Accrued income taxes
 

 
12,171

Federal excise tax
 
30,082

 
27,701

Other accrued liabilities
 
122,926

 
116,397

Total current liabilities
 
346,389

 
368,901

Long-term debt
 
1,089,252

 
652,787

Deferred income tax liabilities
 
160,765

 
135,957

Accrued pension and postemployment liabilities
 
64,230

 
73,503

Other long-term liabilities
 
71,046

 
51,319

Total liabilities
 
1,731,682

 
1,282,467

Commitments and contingencies
 
 

 
 

Common stock—$.01 par value:
 
 

 
 

Authorized—500,000,000 shares
 
 

 
 

Issued and outstanding— 57,014,319 shares at March 31, 2017 and 60,825,914 shares at March 31, 2016
 
571

 
608

Additional paid-in-capital
 
1,752,903

 
1,743,371

(Accumulated deficit) retained earnings
 
(108,033
)
 
166,421

Accumulated other comprehensive loss
 
(112,992
)
 
(110,214
)
Common stock in treasury, at cost— 6,950,120 shares held at March 31, 2017 and 3,138,525 shares held at March 31, 2016
 
(287,384
)
 
(140,019
)
Total stockholders' equity
 
1,245,065

 
1,660,167

Total liabilities and equity
 
$
2,976,747

 
$
2,942,634


8


VISTA OUTDOOR INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(preliminary and unaudited)

 
 
Years Ended March 31
(Amounts in thousands)
 
2017
 
2016
Operating Activities
 
 

 
 

Net income (loss)
 
$
(274,454
)
 
$
147,037

Adjustments to net income to arrive at cash provided by operating activities:
 
 

 
 

Depreciation
 
54,157

 
38,953

Amortization of intangible assets
 
39,622

 
33,661

Amortization of deferred financing costs
 
4,125

 
2,501

Goodwill and intangibles impairment
 
449,199

 

Deferred income taxes
 
(22,470
)
 
(457
)
Loss (gain) on disposal of property
 
239

 
323

Share-based compensation
 
12,648

 
12,279

Changes in assets and liabilities:
 
 

 
 

Net receivables
 
63,101

 
(33,596
)
Net inventories
 
(85,680
)
 
(31,065
)
Accounts payable
 
(54,055
)
 
3,398

Accrued compensation
 
(21,641
)
 
8,006

Accrued income taxes
 
(26,689
)
 
(1,804
)
Federal excise tax
 
2,437

 
4,535

Pension and other postretirement benefits
 
1,006

 
5,076

Other assets and liabilities
 
13,143

 
9,155

Cash provided by operating activities
 
154,688

 
198,002

Investing Activities
 
 

 
 

Capital expenditures
 
(90,665
)
 
(41,526
)
Acquisitions of businesses, net of cash acquired
 
(458,149
)
 
(462,050
)
Proceeds from the disposition of property, plant, and equipment
 
135

 
372

Cash used for investing activities
 
(548,679
)
 
(503,204
)
Financing Activities
 
 
 
 

Borrowings on line of credit
 
555,000

 
360,000

Repayments of line of credit
 
(380,000
)
 
(360,000
)
Payments made on long-term debt
 
(32,000
)
 
(17,500
)
Proceeds from issuance of long-term debt
 
307,500

 
350,000

Payment from former parent
 

 
6,500

Payments made for debt issue costs
 
(3,660
)
 
(4,379
)
Purchase of treasury shares
 
(151,850
)
 
(143,194
)
Deferred payments for acquisitions
 
(7,136
)
 

Proceeds from employee stock compensation plans
 
75

 
1,173

Cash provided by financing activities
 
287,929

 
192,600

Effect of foreign currency exchange rate fluctuations on cash
 
(555
)
 
343

(Decrease) increase in cash and cash equivalents
 
(106,617
)
 
(112,259
)
Cash and cash equivalents at beginning of year
 
151,692

 
263,951

Cash and cash equivalents at end of year
 
$
45,075

 
$
151,692


9
(Back To Top)

Section 4: EX-99.2 (EXHIBIT 99.2)

a20170511investorpresent
Investor Overview MAY 2017


 
© 2017 | Vista Outdoor Presentation Certain statements in this presentation and other oral and written statements made by Vista Outdoor from time to time are forward-looking statements, including those that discuss, among other things: Vista Outdoor’s 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 Vista Outdoor’s actual results to differ materially from expectations described in such forward-looking statements, including the following: general economic and business conditions in the U.S. and Vista Outdoor’s other markets, including conditions affecting employment levels, consumer confidence and spending, and other economic conditions affecting demand for our products and the financial health of our customers; Vista Outdoor’s ability to attract and retain key personnel and maintain and grow its relationships with customers, suppliers and other business partners, including Vista Outdoor’s ability to obtain acceptable third party licenses; Vista Outdoor’s ability to adapt its products to changes in technology, the marketplace and customer preferences; Vista Outdoor’s ability to maintain and enhance brand recognition and reputation; reductions, unexpected changes in or our inability to accurately forecast demand for ammunition, firearms or accessories or other outdoor sports and recreation products; risks associated with Vista Outdoor’s sales to significant customers, including unexpected cancellations, delays and other changes to purchase orders; supplier capacity constraints, production disruptions or quality or price issues affecting Vista Outdoor’s operating costs; Vista Outdoor’s competitive environment; risks associated with compliance and diversification into international and commercial markets; the supply, availability and costs of raw materials and components; increases in commodity, energy and production costs; changes in laws, rules and regulations relating to Vista Outdoor’s business, such as federal and state firearms and ammunition regulations; Vista Outdoor’s ability to execute its long-term growth strategy, including our ability to complete and realize expected benefits from acquisitions and integrate acquired businesses; Vista Outdoor’s ability to take advantage of growth opportunities in international and commercial markets; foreign currency exchange rates and fluctuations in those rates; 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; risks associated with cybersecurity and other industrial and physical security threats; capital market volatility and the availability of financing; changes to accounting standards or policies; and changes in tax rules or pronouncements. Vista Outdoor undertakes no obligation to update any forward-looking statements. For further information on factors that could impact Vista Outdoor, and statements contained herein, please refer to Vista Outdoor’s filings with the Securities and Exchange Commission, including the company’s annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission. 2 Forward Looking Statements


 
© 2017 | Vista Outdoor Presentation Non-GAAP financial measures such as earnings before interest, tax, depreciation and amortization (“EBITDA”), Adjusted EBITDA, EBITDA Margin and Free Cash Flow as included in this Presentation are supplemental measures that are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”). Please see the Appendix to this presentation for reconciliations of these Non-GAAP financial measures to their comparable GAAP financial measures. We define Adjusted EBITDA as EBITDA adjusted for the impact of asset impairments and for the impact of transaction costs, transition costs and certain other items related to our spin-off from Alliant Techsystems Inc. and acquisition transactions. We believe that the presentation of EBITDA and Adjusted EBITDA helps investors analyze underlying trends in our business, evaluate the performance of our business both on an absolute basis and relative to our peers and the broader market, provides useful information to both management and investors by excluding certain items that may not be indicative of the core operating results and operational strength of our business and helps investors evaluate our ability to service our debt. We define EBITDA margin as EBITDA divided by net sales. We believe 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. Our definition may differ from that used by other companies. 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. We define Free Cash Flow as cash provided by operating activities less capital expenditures, allocated interest expense, and excluding transaction costs incurred to date. Vista Outdoor management uses Free Cash Flow internally to assess both business performance and overall liquidity and we believe that 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. These non-GAAP financial measures have limitations as analytical and comparative tools and you should consider EBITDA, Adjusted EBITDA, EBITDA Margin and Free Cash Flow in addition to, and not as a substitute for, operating income, cash from operating activities or any other measure of financial performance or liquidity reported in accordance with GAAP. Throughout the presentation, certain numbers will not sum to the total due to rounding. 3 Non-GAAP Financial Measures


 
© 2017 | Vista Outdoor Presentation Overview and Investment Highlights 4


 
© 2017 | Vista Outdoor Presentation 5  Vista Outdoor is a pure play, individual outdoor recreation company, focused on leveraging best-of-breed brands:  Diversified portfolio of over 50 brands, many of which have #1 or #2 share in their respective categories  Pro forma sales split balanced between Outdoor Products and Shooting Sports segments  Well-positioned in a large, growing and fragmented market  Committed to innovation and quality  Experienced, best-in-class management team executing Vista Outdoor’s strategy  Balanced capital deployment strategy of share repurchases combined with disciplined M&A Vista Outdoor Overview(1)(2) Company Overview $2.5B leading global designer of outdoor consumer products Sales by Customer U.S. Consumer, 70% Law Enforcement, Military, 10% International, 20% Sales by Segment Shooting Sports, 54% Outdoor Products, 46% Notes: 1. Financial results are as reported for the twelve month period ending March 31, 2017, unless otherwise noted 2. See financial details and reconciliation in the appendix FY 2017A FY 2018 Guidance Sales $2,547M $2,360 – $2,420M Net Income ($274M) -- Adj. EBIT % ~8% -- Adj. EBITDA $309M -- FCF $38M $175 – $200M


 
© 2017 | Vista Outdoor Presentation 6 2001 20102008 2013 20151990 2009 Spin-off from ATK Spin-off from Honeywell 2016 Company Heritage Heritage dates back to ATK’s spin-off from Honeywell in 1990


 
© 2017 | Vista Outdoor Presentation 7 Bringing the World Outside At Vista Outdoor, we are passionate about the outdoors Our Vision Be a leading provider of quality products for the outdoor enthusiast, while delivering superior long-term returns to our shareholders, value for our customers, and rewarding careers for our employees Our Mission To bring the world outside, leverage our capabilities and experience and instill passion into products that help outdoor enthusiasts achieve independence and success in the activity of their choice


 
© 2017 | Vista Outdoor Presentation 8 Steve Clark SVP, Human Resources & Corporate Services Years Experience: 20+ Prior Affiliations: Scott Chaplin SVP, General Counsel & Corporate Secretary Years Experience: 20+ Prior Affiliations: Stephen Nolan SVP, CFO Years Experience: 20+ Prior Affiliations: Amanda Covington SVP, Communications & Gov’t Relations Years Experience: 17 Prior Affiliations: Mark DeYoung Chairman & CEO Years Experience: 30+ Prior Affiliations: Jason Vanderbrink SVP, Sales Years Experience: 17 Prior Affiliations: Bob Keller President, Shooting Sports Years Experience: 25+ Prior Affiliations: Experienced Management Team Strong team with proven track record averages 20+ years experience Dave Allen President, Outdoor Products Years Experience: 20+ Prior Affiliations:


 
© 2017 | Vista Outdoor Presentation 9 Key Investment Highlights Vista Outdoor is positioned as outdoor rec’s premier investment opportunity Multiple Growth Avenues to Deploy Capital 7 Strong Customer Relationships 5 Portfolio of Authentic Brands Focused on Outdoor Sports and Recreation 1 Large, Addressable and Growing Outdoor Recreation and Shooting Sports Market 2 Commitment to Leading Innovation and Product Development Capabilities 3 Proven M&A Capabilities 6 Established Manufacturing, Global Sourcing and Distribution Platform 4


 
© 2017 | Vista Outdoor Presentation Category Market Size ($B) (1) Vista Outdoor Product Diversification Low Medium High Expansion Opportunity Vista Outdoor Selected Brand Presence Hunting / Shooting Sports(2) $20 Camping 15 Trail Sports(3) 14 Cycling / Wheel Sports(4) 10 Wildlife Viewing 8 Fishing 8 Snow Sports 8 Golf(5) 6 Water Sports(6) 4 $93 Notes: 1. 2016 estimates of annual consumer spending on non-motorized outdoor recreation-related gear and accessories based on Outdoor Industry Association research (except where noted) 2. 2015 estimate of annual consumer spending on hunting and shooting sports equipment and accessories based on Southwick & Associates research 3. 2016 edition of Outdoor Industry Association research added running 3+ miles, horseback riding and mountaineering 4. 2016 edition of Outdoor Industry Association research added skateboarding 5. 2015 estimate of annual consumer spending on golf apparel, footwear and equipment based on National Sporting Goods Association research 6. 2016 edition of Outdoor Industry Association research added surfing, scuba diving and sailing          = Expansion from acquisitions Portfolio of Authentic Brands Vista Outdoor’s portfolio of brands covers nearly all segments in outdoor rec Total Market Opportunity 10 N/A = Organic business as of spin-off


 
© 2017 | Vista Outdoor Presentation $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 11 Shooting Sports Industry Trends Strong growth in ammo and firearms sales Total Domestic Commercial Ammo and Long Guns ($B)(1) Shooting Sports Industry Trends(2) +15M(3) 45% 7% CAGR 63% Shooting Participants, 2009-2016 FBI Adjusted NICS Checks Growth, 2006-2016 New Shooters are Female(4) New Shooters Aged 18-34(4) Notes: 1. Industry wholesale dollar sales ($B). Ammo and Long Guns Source: Excise Taxes per the U.S. Department of the Treasury 2. Source: NSSF and FBI Adjusted NICS data 3. Number of participants added from 2009 to 2016. Participants are defined as a person that engaged in target shooting or sport shooting within the past 12 months 4. New shooters defined as having begun shooting in the last five years


 
© 2017 | Vista Outdoor Presentation $66.3 $71.6 $74.2 $77.3 $79.2 $81.4 $84.3 $86.0 $87.7 - $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 12 Outdoor Recreation Industry Trends Large, expanding installed base of participants drives stable growth Outdoor Recreation Industry Trends(2) +10M Outdoor Participants 2006-2016 11B Total Outdoor Outings in 2016 ~50% U.S. Population participated in Outdoor Recreation in 2016 56% Ages 25-44 participated in Outdoor Recreation in 2016 140M+ Installed base of outdoor activity participants Notes: 1. Source: Sports & Fitness Industry Association 2. Source: Outdoor Industry Association Wholesale Sports and Fitness Industry $ ($B)(1)


 
© 2017 | Vista Outdoor Presentation Bushnell Trophy Cam HD 13 Commitment to Innovation Vista Outdoor’s culture of innovation drives organic growth CamelBak’s hydration pack testing device and 3D printer in Petaluma, CA …results in superior, innovative products… …that receive award recognition and create consumer pull Commitment to investing in R&D capabilities… - Best-in-class in-house R&D teams - Rapid prototyping and 3D printing capabilities - State-of-the-art computer-aided design - World-class design facilities such as Action Sports’ “The Dome” - Acquisitions bring new expertise into the Company and provide environment for cross-pollination of ideas across brands Bell’s and Giro’s product innovations come to fruition at “The Dome”, Action Sports’ state-of-the-art design and testing facility in Scotts Valley, CA CamelBak Quick Stow CamelBak Skyline 10 LR American Eagle Syntech Bushnell Elite 1-Mile Rangefinder Giro Factor Techlace Bell Super 2R CamelBak Quick Stow CamelBak Skyline 10 LR American Eagle Syntech Bushnell Elite 1-Mile Rangefinder Giro Factor Techlace Bushnell Trophy Cam HD People’s Upgrade Choice #1 Open Face Helmet to Buy Best Enduro Helmet Best Softwear Bell Super 2R Best of the Test Editor’s Choice Editor’s Choice


 
© 2017 | Vista Outdoor Presentation Lyon, France 14 Established Global Platform Positioned across the globe to best serve customers and work with vendors Farmington, Utah, USA Company HQ Vaughan, Ontario Lakefield, Ontario Chessington, UK Mexico City, Mexico Suresnes, France Barcelona, Spain Torino, Italy Rosenheim, Germany Tokyo, Japan China, Hong Kong & Taiwan Heatherton, Victoria, Australia Papanui, New Zealand FY17 International Sales Tijuana, Mexico Newcastle West, Ireland Rolle, Switzerland High Low


 
© 2017 | Vista Outdoor Presentation 15 Broad Presence Across the United States World class supply chain and distribution = Expansion from acquisitions State-of-the-Art Manufacturing and Distribution Facilities Across the United States(1) Notes: 1. Map includes facilities with significant operations


 
© 2017 | Vista Outdoor Presentation 16 Strong Customer Relationships Highly valued partner for diverse set of retailers across multiple channels Highly Diversified Customer Base… Customer-Centric Approach to Retailers Long-Tenured Retail and Distribution Relationships Award-Winning Portfolio of Products Dedicated Teams for Top Accounts Industry-Leading Customer Service Support … Supported by Customer-Focused, Dedicated Sales Teams


 
© 2017 | Vista Outdoor Presentation 17 Proven M&A Capabilities Track record of executing accretive acquisitions of market leading brands Dedicated M&A Team Focused on Cultivating Deals  Robust Pipeline that Includes Proprietary Deal Flow Experience Executing a Diverse Range of Transactions Integration Playbook Tailored to Each Acquisition Sales Segmentation Strategy Drives Value Creation     Proven M&A Strategy Diversifying Product Portfolio Acquisition Selected New Product LinesAdded to Portfolio


 
© 2017 | Vista Outdoor Presentation 18 Disciplined Investments in Capacity Expansion Advanced Product Development Capabilities Clearly Defined Growth Strategy Balanced strategy positions Vista Outdoor to grow faster than the market Acquisitions of Market-leading Brands(2)(3) $32M $30M $24M $51M FY14 FY15 FY16 FY17 Capital Investments to Increase Output and Efficiency ($135M+ since FY14)(1) Anoka, MN Facility Lewiston, ID Facility #1 #1 #1 #1 #2 Notes: 1. Capital expenditures related to Shooting Sports. Increase in FY17 due to Factory of the Future investment to drive operational efficiency and increase capacity 2. Market position shown in select categories. Sources: 2015 The NPD Group; SportsOneSource; management estimates 3. Bell is #1 in cycling helmets; Giro is #1 in the specialty channel; Krash! and Raskullz are #1 in juvenile; CamelBak is #1 in hydration packs; Camp Chef is #2 in stoves


 
© 2017 | Vista Outdoor Presentation Sales Growth Strategy 19


 
© 2017 | Vista Outdoor Presentation Channel Selected Customers Retail Wholesale / Specialty for Hunt / Shoot Specialty for Outdoor Recreation Law Enforcement / Government International 20 Diverse Channel & Customer Mix Broad reach of consumers across an array of customers and channels International, 20% Law Enforcement, Military, 10% Other Commercial, 32% Customer 10, 2% Customer 9, 2% Customer 8, 2% Customer 7, 3% Customer 6, 3% Customer 5, 3% Customer 4, 4% Customer 3, 4% Customer 2, 4% Customer 1, 12% Top 10 Customers = 38% Regional and Independent Shops Regional and Independent Shops Long-Standing Relationships with Over 20,000 Customers Fiscal Year 2017A Sales:(1) Notes: 1. Numbers may not sum to 100% due to rounding


 
© 2017 | Vista Outdoor Presentation Develop strategic customer teams with subject matter expertise at the buyer level 3 Create efficiencies and synergies through operating company model 5 21 Leverage the portfolio of brands across customers and channels 1 Align by channel and route to market 2 Maintain scalable structure for future acquisitions 4 Sales Objectives Scalable sales structure across customers and channels


 
© 2017 | Vista Outdoor Presentation 22 Segmentation Strategy Vista Outdoor’s platform leveraged by aligning channels and route to market Supported by a trade marketing & business development organization that increases communication and collaboration between Sales and Product/Marketing to ensure plan delivery Retail - Allows for a single point of contact at key customers, increases ability to leverage the portfolio, and maintains subject matter expertise at the buyer level Specialty for Outdoor Recreation - Enables product categories to retain their unique route-to- market structures - Provides new opportunities to expand distribution across channels Law Enforcement / Government - Integrated selling organization focused on delivering solutions to LE/Govt customers Wholesale / Specialty for Hunt / Shoot - Increases focus on independent retail - Also creates unique capabilities to integrate future acquisitions International - Integrated sales team that sells consumer portfolio across regions Regional and Independent Shops Regional and Independent Shops


 
© 2017 | Vista Outdoor Presentation 23 Good, Better, Best Approach Vista Outdoor positions its brands to satisfy the demands of broad end users  Vista Outdoor implements a good, better, best marketing strategy across brands in a number of key product categories  Offering consumers a breadth of features and price points allows the Company to serve more consumers and capture a greater portion of the demand curve  Additionally, this strategy increases Vista Outdoor’s distribution channels by giving the Company access to both Mass and Specialty Optics Rifle Ammunition Protective Products Better Good Best Priced up to $2,150 Up to $320 Up to $225 Up to $2.50/round Up to $1.30/round Up to $550 Up to $100 Up to $200 (Mass) Up to $10.50/round


 
© 2017 | Vista Outdoor Presentation 24 Portfolio Growth Increased distribution and promotion across channel and customers Expansion of Vista’s Portfolio to New Customers and Markets 1 Collaboration Between Brands to Drive Innovation 2 Increased Promotion and Merchandising of Vista Outdoor’s Brands through Solution Selling 3 Leverage Relationships and Portfolio to Increase Distribution with Existing Customers 4 Keys to Driving Growth:


 
© 2017 | Vista Outdoor Presentation 25 Advertisement created specifically for the German market Photoshoot to create an image portfolio specific to the European market Ammunition catalogue created for France with updated imagery and full translation Drive distribution to new markets globally Drive distribution into new customers Portfolio Expansion Increasing distribution and market specific advertising 1 Market Specific Advertising Grow Domestic and International Distribution


 
© 2017 | Vista Outdoor Presentation 26 Brand Collaboration Collaborating across brands to drive innovation 2  Cross promoting on and in packaging  Combining accessories promotions with new firearm product launches  Collaborating new product launches with accessory and ammunition related product allocations Brand Collaboration Around Savage’s Popular A17 RifleOutdoor Products Cross-Brand Merchandising  Cross merchandising of Primos and Bushnell trail cameras along with complementary Primos attractants drives increased awareness to both brands Primos Trail Cameras Bushnell Trail Cameras Primos Attractants


 
© 2017 | Vista Outdoor Presentation 27 Promotion and Merchandising Driving Vista Outdoor’s brands through solution selling 3 Merchandising and Point-of-Purchase Advertising


 
© 2017 | Vista Outdoor Presentation 28 Customer Relationships Leveraging relationships to increase distribution 4 Case Study: Dick’s Sporting Goods Retailer Selected Brand Presence Value-Add Capabilities  Dedicated account team  Category management  Supply chain management  Consumer insights  Shopper marketing and promotion  Strategic planning  Senior relationships  Training  In-store merchandising


 
© 2017 | Vista Outdoor Presentation Outdoor Products 29


 
© 2017 | Vista Outdoor Presentation 30 - 35 brands with a diverse range of products across the $93B Outdoor Recreation market - Proven ability to add complementary brands to portfolio Outdoor Products Segment A portfolio of well-respected brands designed to bring the world outside Protective Performance Gear Performance Optics Capture & Measurement Products Tactical & Shooting Accessories Recreational Performance Products $730M $862M $1,171M FY 2015A FY 2016A FY 2017A $200M $243M $293M FY 2015A FY 2016A FY 2017A Outdoor Products Net Sales(1) Outdoor Products Gross Profit(1) Vista Outdoor’s Diverse Outdoor Products Portfolio YoY Growth 61.9% 18.0% 35.8% % of Net Sales 27.4% 28.2% 25.0% Notes: (1) Figures shown are as reported and are not Pro Forma for acquisitions Archery & Hunting Accessories


 
© 2017 | Vista Outdoor Presentation Capture Share Growth Geographic Sales Expansion Brand Extension into Adjacent Categories Realize Synergies with Acquired Brands Growth Initiative 31 Keys to Execution 1 2 3 4 Growth Strategy Multiple growth avenues exist across brands, geographies and channels • Innovative products with an “owned design” model • Drive best-in-category consumer brand building through social media, brand positioning and event sponsorships • Leverage multi-brand, multi-channel strategy for a competitive offering at all price points • Capture incremental sales through cross-brand marketing initiatives • Accelerate growth in Europe and Asia • Leverage scale and organization against broader mix of brands • Build on full line brands (e.g., Blackhawk, Primos,Giro) • Identify new strategic opportunities through consumer insights • Leverage Vista’s sales relationships across the portfolio of brands • Integrated back-end infrastructure • Warehouse and distribution optimization


 
© 2017 | Vista Outdoor Presentation 32 Vista Outdoor leverages its internal design capabilities to release innovative products to market Crux New reservoir system with improved ergonomics, water flow and valve Gun Medic Quickly fixes jamming caused by fowling; like 911 for your gun Switchblade First ASTM Downhill certified helmet with removable chinbar Omnivore Fits 230+ guns with patented level 2 retention & unique thumb driven release Capture Share Growth Innovative products that drive ability to capture market share 1 Brands Product Description Product Image


 
© 2017 | Vista Outdoor Presentation 33 Capture Share Growth (Cont.) Engaging consumers through social media, brand positioning and events 1 Bushnell: • Shifting marketing mix towards more targeted vehicles with stronger consumer engagement • Improved reach to over 1.1 million per month Primos: • 50+ new videos recently launched • Goal: Become the most viewed source for beginning hunters seeking tips and tools Event SponsorshipsSocial Media Engagement Bell Joy Ride Bringing Women Together Created with the simple goal of bringing together and enabling female mountain bikers with regular, structured, fun and social rides that appeal to all levels of riders, so women can enjoy challenge and camaraderie in a non-competitive environment.


 
© 2017 | Vista Outdoor Presentation 34 Past Merchandising New PackagingCurrent Previous merchandising had unfavorable product placement and packaging had minimal differentiation from competing products Primos has revamped its product display to draw consumers’ attention and stand out from the competition New packaging has enhanced design and clear information for which seasons the product should be used Capture Share Growth (Cont.) Enhancing merchandising and packaging 1


 
© 2017 | Vista Outdoor Presentation Geography Opportunities Europe Australia / Asia 35 Powersports Bike / Snow Bike / Powersports Binoculars Trail Cams Binoculars / Trail Cams Geographic Sales Expansion Growing through geographic sales expansion in Europe, Australia and Asia 2


 
© 2017 | Vista Outdoor Presentation 36 Foundation in Polymer Holsters Leather Holsters • Leverage core • Expand to natural product lines • Stretch beyond core to offer full suite of specialized products Holster Iterations Firearm Accessories Lifestyle Products On-gun Accessories Suppressors MSR Optics & Aiming Devices Tactical Nylon Light Armor Technical Apparel Brand Extension Leveraging brands into adjacent markets and categories 3


 
© 2017 | Vista Outdoor Presentation 37 Leverage Acquisitions Methodically integrating acquisitions to drive success 4 Post-Acquisition Integration Strategy Sourcing Finance, HR, Legal, IT Manufacturing Marketing Research and Development Sales Warehousing and Distribution Customer Service • Leverage relationships with key retailers to add incremental brands to assortment (e.g., Jimmy Styks in Dick’s Sporting Goods or Cabela’s) • Ensure manufacturing, marketing, and research and development remain intact, maintaining company DNA and culture • Where applicable, leverage creative insights from acquisition management teams across entire Vista Outdoor portfolio • Enable Vista Outdoor’s sourcing, warehousing and distribution operations to drive cost synergies due to their leverage and scale • Optimize warehousing and distribution across portfolio to best serve customers • Outsource back-office functions such as Finance, HR, Legal and IT to Vista Outdoor corporate = Functions led by Vista Outdoor post-closing = Functions led by acquisition post-closing


 
© 2017 | Vista Outdoor Presentation Cycling Helmets Cycling Footwear Snow Helmets Eye Protection Softgoods Branded Accessories Powersports Helmets - ~$450M in FY17 Net Sales - Leader within $10B Cycling and $8B Snow Sports categories - Iconic brands with multi-channel distribution #1 Top 5 #1 Top 5 Top 5 Notes: (1) Source: SportsOneSource; 2015 NPD Group; management estimates 38 = Vista Outdoor market position(1) Protective Performance Gear Innovative safety products for gravity sports enthusiasts #2


 
© 2017 | Vista Outdoor Presentation Binoculars / Monoculars Riflescopes Spotting Scopes Telescopes - ~$100M in FY17 Net Sales - Leading optics brands within the $20B Hunting / Shooting Sports and $8B Wildlife Viewing markets #1 #3 #1 Red Dot Sights#2 39Notes: (1) Source: 2016 Southwick Associates = Vista Outdoor market position(1) Performance Optics High-performance products with heritage in sports optics


 
© 2017 | Vista Outdoor Presentation Trail Cameras Laser Rangefinders GPS - ~$150M in FY17 Net Sales - Product development platform rooted in performance optics has allowed brands to enter adjacent categories #1#3 40 = Vista Outdoor market position(1) Capture & Measurement Products Products that enhance hunting, golf, nature study, and more (2) Notes: (1) Sources: 2016 Southwick Associates; Golf Datatech (2) Bushnell is #2 in the wrist-worn golf GPS device market #2


 
© 2017 | Vista Outdoor Presentation - ~$50M in FY17 Net Sales - Products complement large installed user base of optics and capture/measurement consumers Game Calls Decoys Attractants & Supplements Blinds Archery Accessories Bags & Accessories Arrows #1 #3 #3 41Notes: (1) Source: 2016 Southwick Associates = Vista Outdoor market position(1) Archery & Hunting Accessories Reliable products for Archery & Hunting enthusiasts Top 5


 
© 2017 | Vista Outdoor Presentation - ~$200M in FY17 Net Sales - Strong reputation for quality and reliability resonates with consumers and increases loyalty Holsters Targets Firearm Care Reloading Equipment Other Accessories Scope Mounts Bags, Packs, & Apparel #1#1 #1 #1#1 42 = Vista Outdoor market position(1) Notes: (1) Source: 2016 Southwick Associates (2) Champion #1 in traps and target-throwing devices; RCBS/Federal #1 in reloading tools and accessories (2) (2) Tactical & Shooting Accessories Field-proven quality for all shooters from hunting to self defense


 
© 2017 | Vista Outdoor Presentation - ~$250M in Pro Forma FY17 Net Sales - Presence in nearly all categories within the $93B Outdoor Recreation market 43 Hydration Packs Water Bottles Stand-Up Paddleboards Stoves Grills / Smokers Accessories #1 #2 #2 Notes: (1) Source: SportsOneSource (2) Excludes insulated stainless steel tumblers = Vista Outdoor market position(1) Recreational Performance Products Performance-driven, high-quality products for individual outdoor pursuits (2)


 
© 2017 | Vista Outdoor Presentation Shooting Sports 44


 
© 2017 | Vista Outdoor Presentation 45 - 11 brands with a diverse range of products across the $20B Hunting / Shooting Sports market $1,353M $1,409M $1,376M FY 2015A FY 2016A FY 2017A $331M $377M $377M FY 2015A FY 2016A FY 2017A Shooting Sports Net Sales Shooting Sports Gross Profit YoY Growth (4.9%) 4.1% (2.3%) % of Net Sales 24.4% 26.8% 27.4% Premium Ammunition Value/Target Ammunition Firearms Vista Outdoor’s Premier Shooting Sports Product Portfolio Shooting Sports Segment Unmatched performance leader to shooting sports enthusiasts


 
© 2017 | Vista Outdoor Presentation $32M $30M $24M $51M FY14 FY15 FY16 FY17 46 Innovation, Customer Loyalty and Disciplined Investments… Notes: 1. Market share based on 2016 SEC reported sales 2. Source: Southwick Associates annual survey of brands most frequently purchased 3. Capital expenditures related to Shooting Sports. Increase in FY17 due to Factory of the Future investment to drive operational efficiency and increase capacity Innovative Products Federal Premium® Personal Defense® HST® provides everything needed in a personal defense round: consistent expansion, optimum penetration, and superior terminal performance 29% 11% 10% 7% 4% 30% 13% 11% 7% 5% Brands Most Frequently Purchased(2) Handgun Ammunition Rifle Ammunition Capital Investments to Increase Output and Efficiency ($135M+ since FY14)(3) Vista Outdoor maintains a disciplined approach to Capex, only investing in projects that meet demand and provide an attractive IRR Competitor #1 Competitor #2 Competitor #3 Competitor #4 Competitor #3 Competitor #2 Competitor #1 Competitor #5 0 5 10 15 20 25 30 35 40 45 … Drive Leading Position in the Ammunition Market(1) % Share of US Ammunition Sales Imports Other Leading Market Share in Shooting Sports Strong positioning in market due to investments in innovation and capacity


 
© 2017 | Vista Outdoor Presentation 47 Capture Growth with Emerging Shooting Sports Consumers 1 Enhance Competitive Position in Marketplace 2 Expand Savage Brand to Broader Hunting and Shooting Markets 3 Keys to Driving Growth: Growth Strategy Capitalize on growing shooting sports market


 
© 2017 | Vista Outdoor Presentation 48 Engage New Consumers Gaining share by capitalizing on shifting demographics of shooters 1 • New product offerings designed with female consumers in mind • Brand ambassadors that relate well to the next generation of shooters • Support community events that encourage and foster newcomers to shooting sports Attract Female Participants • Social media engagement • Sleek and modern packaging • Sponsor brand advocates with broad reach to millennials Leverage Younger Demographic Cultivate Consumers for Life • Generate long-term brand loyalty through early consumer engagement • Sponsorship of youth programs – Boy Scouts, Scholastic Shooting Sports Foundation and National 4-H Shooting Programs • Support individual high school shooting programs • Diverse product offering catering to all user levels and interests Federal Premium: 2.8M views 253k likes 80.3k followers Savage Arms: 565k likes


 
© 2017 | Vista Outdoor Presentation 1 2 3 4 49 Vista Outdoor’s portfolio of ammunition brands is #1 in both handgun and rifle ammunition Investments in Future Growth Strategically investing to enhance market positioning 2 Major capital investment in Factory of the Future Leadership in product engineering • Capacity expansion in Anoka, MN & Lewiston, ID facilities: - Initial phase of the project enables the Company to drive capacity across the ammunition portfolio, where it is currently capacity constrained - This will allow Vista Outdoor to capitalize on upside in these key growing market segments • Greater efficiency/higher productivity • Increased flexibility between product types (pistol, small rifle, large rifle) • Expanded Ammunition and Firearms Innovation Centers • All of Vista Outdoor’s ammunition products are designed and crafted for the ultimate in shooting and hunting performance 1) Primer - subjected to more frequent inspections for dimensional tolerances and charge weight to ensure they deliver consistent ignition for every shot 2) Propellant - specially formulated to meet stringent specifications; clean-burning powders are of the highest grades in the industry 3) Case - precision-built cases feature nickel-plated brass that defeats corrosion and aids in sleek, smooth extraction in even the most extreme conditions 4) Bullet - ideal bullets for every application


 
© 2017 | Vista Outdoor Presentation Stevens released multiple new shotguns in 2017 50Notes: (1) Source: American Hunter Golden Bullseye Award - 2016 Brand Extension Leverage Savage brand to broaden presence in shooting & hunting markets 3 Bold brand built on a tradition of American ingenuity and performance Savage launched MSR line in 2017 Straight Blowback 22 LR A17 named “2016 Rifle of the Year”(1) Launched Fall, 2016 Savage Arms founded in 1895 Long history as a leader in innovation and performance: • Centerfire rifles • Rimfire rifles • Shotguns Iconic Brand in Firearms Continuous New Product Innovation Broaden and Extend Product Line Bolt-Action B22, B17 B22 Mag. Launched Fall, 2016


 
© 2017 | Vista Outdoor Presentation - ~$350M in FY17 Net Sales - Preeminent brands in the ammunition segment of the Hunting / Shooting Sports category Shotshell Ammunition #1Rifle Ammunition #1 Handgun Ammunition #1 Rimfire Centerfire Rimfire Centerfire 51Notes: (1) Source: 2016 Southwick Associates (2) Represents market position for the combined premium and value/target markets = Vista Outdoor market position(1) (2) (2) (2) Premium Ammunition Highly engineered products designed for ultimate performance


 
© 2017 | Vista Outdoor Presentation Shotshell Ammunition - ~$800M in FY17 Net Sales - Value products reinforce “Good, Better, Best” strategy, allowing profits to be captured across the demand curve 52 #1 #1#1 Rifle AmmunitionHandgun Ammunition Rimfire Centerfire Rimfire Centerfire Notes: (1) Source: 2016 Southwick Associates (2) Represents market position for the combined premium and value/target markets = Vista Outdoor market position(1) (2) (2) (2) Value/Target Ammunition Reducing cost of practice allows users to shoot more, and more often


 
© 2017 | Vista Outdoor Presentation - ~$200M in FY17 Net Sales - Positive momentum in FBI Adjusted NICS checks continues to drive sales (7% CAGR from 2006 to 2016) 53 = Vista Outdoor market position(1) Notes: (1) Source: 2016 Southwick Associates Firearms No nonsense, performance driven portfolio of firearms Shotguns #2 Rimfire Centerfire Traditional Rifles Modern Sporting Rifles


 
© 2017 | Vista Outdoor Presentation M&A Strategy 54


 
© 2017 | Vista Outdoor Presentation 55  Invest only in companies that present attractive opportunities for Vista Outdoor to leverage its sales force, operating expertise and strategic guidance to create value  Ensure all acquisition multiples can be supported by comparable market transaction(s), cash flow models and return thresholds  Utilize creative transaction structures to align incentives, while remaining disciplined on price  Opportunistically approach owners to avoid auction processes Focus on Assets Highly Aligned with Acquisition Criteria… … Combined with Disciplined Approach to Valuation Aligns with Vista Outdoor’s Strategy Product / Category Innovator Sustainable Competitive Advantage Strong Growth Fundamentals Market Leadership Position Leverageable Platform High Organic Margins Predictable / Sustainable Cash Flow Very Weak Moderate Very Strong Acquisition Strategy and Key Metrics Acquire assets highly aligned with Vista Outdoor’s strategy, at the right price


 
© 2017 | Vista Outdoor Presentation Adjacent categories that speak to rugged individualism 1 Outdoor-focused brands 2 Familiar customer 3 Opportunity to improve the brand, increase distribution and apply operational excellence 4 Right price at the right time 5 Adjacent Market Criteria           Shooting Sports Camping Trail Sports Cycling / Wheel Sports Wildlife Viewing Fishing Snow Sports Golf Water Sports Category      = FY2017 additions to Vista Outdoor’s portfolio 56 Diversification      N/A Expand Into Adjacent Markets Expansion into adjacent markets reducing volatility of Vista Outdoor’s portfolio = Expansion from acquisitions = Organic business as of spin-off


 
© 2017 | Vista Outdoor Presentation 57 FY2015(1) Notes: 1. Financial results are for the fiscal year ending March 31, 2015, as reported Shooting Sports, 65% Outdoor Products, 35% FY2017 Shooting Sports, 54% Outdoor Products, 46% M&A Driving Portfolio Transformation M&A fueling diversification of portfolio into adjacent, fast-growing markets


 
© 2017 | Vista Outdoor Presentation Financial Overview and Long-term Targets 58


 
© 2017 | Vista Outdoor Presentation Sales $2.547 billion Earnings Per Share ($4.66) Adjusted Earnings Per Share(1) $1.90 59 Sales $2.360 – $2.420 billion Interest Expense(3) ~$50 million Tax Rate ~37% Earnings per Share(4) $1.10 – $1.30 Capital Expenditures ~$70 million Free Cash Flow(5) $175 - $200 million FY2018 Guidance(2) FY2017 Results & FY18 Guidance FY2017 Results Notes: 1. Excludes impact of revaluation and recorded portion of contingent consideration related to Jimmy Styks, Bell Powersports product line and Camp Chef, transaction and transition costs, inventory step-up, intangible asset impairment and legal settlement claim 2. Guidance as of May 11, 2017 3. Includes amortization of financing costs 4. Excludes impact of transition/transaction expense 5. Non-GAAP financial measure. See reconciliation table for details FY2017 Results & FY18 Guidance


 
© 2017 | Vista Outdoor Presentation 60 $M Adjusted EBITDA (Non-GAAP)(2) Adjusted EBITDA Margin: 15.3% 15.4% 12.1% $320 $349 $309 $0 $150 $300 $450 FY2015 FY2016 FY2017 $M $2,083 $2,271 $2,547 $0 $1,000 $2,000 $3,000 FY2015 FY2016 FY2017 FY2018E Net Sales Guidance = $2,360 – $2,420(1) Historical Financial Highlights $M Net Income Net Income Margin: 3.8% 6.5% (10.8%) $80 $147 ($274)($500) ($250) $0 $250 FY2015 FY2016 FY2017 Notes: (1) Guidance as of May 11, 2017 (2) See appendix for non-GAAP reconciliation


 
© 2017 | Vista Outdoor Presentation $160 $163 $38 $0 $25 $50 $75 $100 $125 $150 $175 $200 $225 FY2015 FY2016 FY2017 FY2018E Disciplined Capital ExpendituresFree Cash Flow Generation(1) $43 $42 $91 $70 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 FY2015 FY2016 FY2017 FY2018E ($M) ($M) 2.1% 1.8% 3.6%% of Sales: 8.5% 7.2% 1.5% 61 Notes: 1. See appendix for non-GAAP reconciliation 2. Guidance as of May 11, 2017 Guidance = $175 – $200(2) 7.2% – 8.5% Increase driven by acquisitions and capacity expansion initiatives 2.9% – 3.0% (2) Historical Cash Flow & Capital Spending


 
© 2017 | Vista Outdoor Presentation 62 Long-term Financial Goals Metric 2-3 Year Goal Long-term Goal Organic Revenue Growth 2% – 4% 6% – 8% Adjusted EBITDA Margin 12% – 14% 16% – 18% Capital Expenditures (% of Sales) 2% – 3% 2% – 3% Long-term Financial Goals


 
© 2017 | Vista Outdoor Presentation 63 $200M $100M Authorization Announced: 4Q-FY2015 2Q-FY2017 Opportunistic Share Repurchase ProgramPursuit of Strategic Acquisitions = Share repurchases completed through May 11, 2017 Date Closed Purchase Price ~$1.2B Invested in M&A and Share Repurchases since Spin-off from ATK Sep-16 $74.0M Apr-16 $400.0M Aug-15 $412.5M Jul-15 $40.0M Subtotal: ~$927M Subtotal: $300M Acquisition Balanced Capital Deployment Strategy


 
© 2017 | Vista Outdoor Presentation Strong Customer Relationships Vista Outdoor is the Vendor of Choice for Customers in the Shooting Sports and Outdoor Recreation Markets 5 64 Portfolio of Authentic Brands Focused on Outdoor Sports and Recreation #1 or #2 Market Share Across a Number of Outdoor Recreation Product Categories 1 Large, Addressable and Growing Outdoor Recreation and Shooting Sports Market Diverse, Growing Presence Across Outdoor Recreation’s $93B Market 2 Commitment to Leading Innovation and Product Development Capabilities State-of-the-Art Facilities and Cross-Pollination of Brands Drive Organic Growth 3 Proven M&A Capabilities Track Record of Strategic Acquisitions, Including Jimmy Styks, CamelBak, Action Sports and Camp Chef 6 Established Manufacturing, Global Sourcing and Distribution Platform Global Presence with Modernized Facilities and Efficient Operations 4 Multiple Growth Avenues to Deploy Capital Balanced Growth Strategy with Opportunities in Multiple Avenues 7 Key Investment Highlights Vista Outdoor is positioned as outdoor rec’s premier investment opportunity


 
© 2017 | Vista Outdoor Presentation Appendix 65


 
© 2017 | Vista Outdoor Presentation Years Ended March 31, ($M) FY2015 FY2016 FY2017 Net Sales $2,083 $2,271 $2,547 Gross Profit 529 619 669 % Margin 25.4% 27.3% 26.3% Operating Income 184(2) 263 (207)(3) % Margin 8.8% 11.6% (8.1%) D&A 67 73 94 EBITDA (Non-GAAP) 251 335 (113) % Margin 12.0% 14.8% (4.4%) Adjusted EBITDA (Non-GAAP) 320 349 309 % Margin 15.3% 15.4% 12.1% Select Financials(1) Notes: 1. Numbers may not sum due to rounding 2. Includes $52M goodwill/trade name impairment 3. Includes $449M goodwill/trade name impairment 66 Historical Financial Summary


 
© 2017 | Vista Outdoor Presentation Years Ended March 31, ($000) FY2015 FY2016 FY2017 Net income $79,528 $147,037 ($274,454) Interest expense (income), net 30,108 24,351 43,670 Income tax provision 74,518 91,370 23,760 Depreciation and amortization 66,551 72,614 93,779 EBITDA 250,705 335,372 (113,245) Goodwill impairment(1) 52,220 - 449,199 Transaction costs(2) 19,461 9,009 4,575 Transition costs(2) 5,988 - - Acquisition Claim Settlement(3) - - (30,027) Contingent Consideration(4) - - (2,171) Standalone and public company costs(5) (15,000) - - Inventory step-up(6) - 1,043 817 Lake City Supply Agreement adjustment(7) 6,174 - - Facility Rationalization(8) - 3,258 - Adjusted EBITDA $319,548 $348,682 $309,148 Notes: 1. In FY17 and FY15 the Company recorded a non-cash goodwill impairment related to the Hunting and Shooting Accessories reporting unit and the Firearms reporting unit, respectively 2. Represents transaction costs, including accounting, legal and advisor fees, and transition costs, in each case incurred in connection with our spin-off transaction and the acquisitions of Bushnell, Savage Arms, Jimmy Styks, Camelbak, Action Sports and Camp Chef 3. In FY17, the Company finalized a settlement of claims that it brought against the previous owner of Bushnell Holdings and third-party insurance providers relating to certain disputes arising under the purchase agreement with respect to the acquisition 4. Revaluation and recorded portion of contingent consideration related to Jimmy Styks, Bell Powersports product line and Camp Chef 5. Represents the Company’s estimate of costs that it would have incurred in excess of the applicable corporate allocation had it operated as a standalone public company during the period 6. Represents inventory step-up recorded in connection with the acquisitions of Camelbak, Action Sports and Camp Chef as part of their respective purchase price allocations 7. Impact of reduced cost of sales as a result of the revised pricing under the Lake City Supply Agreement between Vista Outdoor and Orbital ATK 8. Represents costs associated with closure of the Meridian, Idaho and Norfolk, Virginia facilities 67 Non-GAAP Reconciliation Non-GAAP Reconciliation


 
© 2017 | Vista Outdoor Presentation Free cash flow is defined as cash provided by operating activities less capital expenditures and excluding an acquisition claim settlement, and transaction and transition costs net of taxes incurred to date. 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. Years Ended March 31, ($000) FY2015 FY2016 FY2017 FY2018 Guidance (1) Cash from Operating Activities $154,338 $198,002 $154,688 $245,000-$270,000 Capital Expenditures (43,189) (41,526) (90,665) ~(70,000) Allocated Interest expense 30,108 - - - Acquisition Claim Settlement - - (30,027) - Transaction costs paid to date, net of tax 18,547 6,485 3,720 - Free Cash Flow $159,804 $162,961 $37,716 $175,000-$200,000 Notes: 1. As of May 11, 2017 68 Non-GAAP Reconciliation: Free Cash Flow Non-GAAP Reconciliation: Free Cash Flow


 
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