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Section 1: 8-K/A (8-K/A)

Document


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

FORM 8-K/A
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 8, 2019 (July 5, 2019)
 399105613_vistaoutdoora07a07.jpg
 Vista Outdoor Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
001-36597
47-1016855
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
1 Vista Way
Anoka
MN
55303
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s telephone number, including area code:  (763) 433-1000
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:
 
        Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12
            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $.01
 
VSTO
 
New York Stock Exchange

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  

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.    

 




EXPLANATORY NOTE

This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed by Vista Outdoor Inc. (“Vista”) with the Securities and Exchange Commission on July 8, 2019 (the “Original Form 8-K”), pertaining to the sale by Vista and one of its subsidiaries, Vista Outdoor Operations LLC, of all of the issued and outstanding equity interests of Caliber Company, the legal entity operating Vista’s Savage Arms and Stevens firearms brands, to a financial buyer, Long Range Acquisition LLC, for a total purchase price of $170 million on July 5, 2019 to include the information required by Items 2.01 and 9.01 of Form 8-K. Except as specifically stated in this Explanatory Note, this Amendment No. 1 does not modify or update the Original Form 8-K or the disclosures set forth therein or otherwise reflect events occurring after the filing thereof.

Item 2.01
Completion of Acquisition or Disposition of Assets.

The information provided in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.01.
Item 9.01. Financial Statements and Exhibits

(b) Pro Forma Financial Information.

The unaudited pro forma condensed consolidated financial information of Vista required by Article 11 of Regulation S-X is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
(d)                                 Exhibits.
Exhibit
No.
 
Description
99.1
 
 



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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/ Scott D. Chaplin
 
 
Name:
Scott D. Chaplin
 
 
Title:
Senior Vice President, General Counsel and Secretary
 
 
 
 
 
 
 
 
Date:
August 8, 2019
 
 


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1

Vista Outdoor, Inc.

Unaudited Pro Forma Condensed Consolidated Financial Information

On July 5, 2019, Vista Outdoor Inc. ("Vista") and one of its subsidiaries, Vista Outdoor Operations LLC, completed the sale of all of the issued and outstanding equity interests of Caliber Company, the legal entity operating Vista’s Savage Arms and Stevens Firearms brands ("Firearms Business"), to a financial buyer, Long Range Acquisition LLC. The total purchase price of $170 million, comprised of $158 million paid at closing and $12 million to be paid upon maturity of a five-year seller note issued by the buyer to Vista Outdoor in connection with the transaction.
The sale of the Firearms Business is considered a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma condensed consolidated financial statements in accordance with Article 11 of Regulation S-X. The Company determined that the sale of the Firearms Business did not qualify for discontinued operations accounting under financial statement presentation authoritative guidance. The accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2019 assumes the sale of the Firearms Business occurred on June 30, 2019. The accompanying unaudited condensed consolidated statements of income for the three months ended June 30, 2019, and for the fiscal year ended March 31, 2019, assumes the sale had occurred on April 1, 2018. The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of the filing of this amended current report on Form 8-K.

The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. The unaudited pro forma consolidated financial statements are presented based on certain estimates and assumptions are intended for informational purposes only, which are not necessarily indicative of what our financial position or results of operations actually would have been had the sale of the Firearms Business been completed as of the dates indicated, nor are they necessarily indicative of future results.

The unaudited pro forma consolidated financial statements and accompanying notes should be read together with our historical consolidated financial statements as of and for the fiscal year ended March 31, 2019 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 23, 2019.

On September 4, 2018 we completed the divestiture of the legal entities operating our Bollé, Cébé and Serengeti brands ("Eyewear Business"). The sale of this business did not qualify for discontinued operations accounting under financial statement presentation authoritative guidance. In addition, the sale was not considered a significant disposition for purposes of Item 2.01 of Form 8-K. For additional information, we voluntarily provided an additional column in the unaudited pro forma consolidated statements of income for the fiscal year ended March 31, 2019, assuming the sale of the Eyewear Business had occurred on April 1, 2018.




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VISTA OUTDOOR INC.
UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2019
(Amounts in thousands except share data)
 
 
 
 
 
 
 
 
 
Historical
 
Pro Forma Adjustments
 
Pro Forma
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
31,595

 
$

 
$
31,595

Net receivables
 
363,364

 

 
363,364

Net inventories
 
387,676

 

 
387,676

Assets held for sale
 
195,938

 
(195,938
)
(a)

Other current assets
 
23,678

 

 
23,678

Total current assets
 
1,002,251

 
(195,938
)
 
806,313

Net property, plant, and equipment
 
207,416

 

 
207,416

Operating lease assets
 
72,349

 

 
72,349

Goodwill
 
204,496

 

 
204,496

Net intangible assets
 
355,699

 

 
355,699

Deferred charges and other non-current assets
 
19,090

 
7,451

(b)
26,541

Total assets
 
$
1,861,301

 
$
(188,487
)
 
$
1,672,814

LIABILITIES AND EQUITY
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Current portion of long-term debt
 
19,335

 
(19,335
)
(c)


Accounts payable
 
128,670

 

 
128,670

Accrued compensation
 
25,421

 

 
25,421

Accrued income taxes
 
845

 

 
845

Federal excise tax
 
20,128

 

 
20,128

Liabilities held for sale
 
38,733

 
(38,733
)
(a)

Other current liabilities
 
105,061

 

 
105,061

Total current liabilities
 
338,193

 
(58,068
)
 
280,125

Long-term debt
 
740,312

 
(133,463
)
(c)
606,849

Deferred income tax liabilities
 
17,214

 

 
17,214

Long-term operating lease liabilities
 
75,799

 

 
75,799

Accrued pension and postemployment benefits
 
45,423

 

 
45,423

Other long-term liabilities
 
49,411

 

 
49,411

Total liabilities
 
1,266,352

 
(191,531
)
 
1,074,821

Common stock — $.01 par value:
 
 
 
 
 
 
Authorized — 500,000,000 shares
 
 
 
 
 
 
Issued and outstanding — 57,745,745 shares as of June 30, 2019
 
577

 

 
577

Additional paid-in capital
 
1,752,760

 

 
1,752,760

Accumulated deficit
 
(821,584
)
 

 
(821,584
)
Accumulated other comprehensive loss
 
(82,620
)
 
3,044

(a)
(79,576
)
Common stock in treasury, at cost — 6,218,694 shares held as of June 30, 2019
 
(254,184
)
 

 
(254,184
)
Total stockholders' equity
 
594,949

 
3,044

 
597,993

Total liabilities and stockholders' equity
 
$
1,861,301

 
$
(188,487
)
 
$
1,672,814


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

2





VISTA OUTDOOR INC.
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30, 2019
(Amounts in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
Historical
 
Firearms (d)
 
Other
 
Pro Forma
Sales, net
 
$
459,774

 
$
(24,017
)
 
$

 
$
435,757

Cost of sales
 
364,696

 
(17,964
)
 

 
346,732

Gross profit
 
95,078

 
(6,053
)
 

 
89,025

Operating expenses:
 
 
 
 
 
 
 
 
Research and development
 
6,494

 
(502
)
 

 
5,992

Selling, general, and administrative
 
83,909

 
(4,320
)
 
(402
)
(e)
79,187

Impairment of held-for-sale assets
 
9,429

 

 
(9,429
)
(f)

Income (loss) before interest and income taxes
 
(4,754
)
 
(1,231
)
 
9,831

 
3,846

Interest expense, net
 
(11,124
)
 
2,321

(g)

 
(8,803
)
Income (loss) before income taxes
 
(15,878
)
 
1,090

 
9,831

 
(4,957
)
Income tax provision (benefit)
 
737

 
261

(h)
96

(h)
1,094

Net income (loss)
 
$
(16,615
)
 
$
829

 
$
9,735

 
$
(6,051
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.29
)
 
$
0.01

 
$
0.17

 
$
(0.10
)
Diluted
 
$
(0.29
)
 
$
0.01

 
$
0.17

 
$
(0.10
)
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
57,722

 
57,722

 
57,722

 
57,722

Diluted
 
57,722

 
57,722

 
57,722

 
57,722


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

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VISTA OUTDOOR INC.
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED MARCH 31, 2019
(Amounts in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
Firearms (d)
 
Eyewear (1)
 
Other
 
Pro Forma
Sales, net
 
$
2,058,528

 
$
(185,419
)
 
$
(51,859
)
 
$

 
$
1,821,250

Cost of sales
 
1,642,840

 
(137,416
)
 
(29,651
)
 
(437
)
(i)
1,475,336

Gross profit
 
415,688

 
(48,003
)
 
(22,208
)
 
437

 
345,914

Operating expenses:
 
 
 
 
 
 
 
 
 
 
Research and development
 
27,742

 
(1,928
)
 
(57
)
 

 
25,757

Selling, general, and administrative
 
377,049

 
(23,313
)
 
(15,971
)
 
(9,804
)
(j)
327,961

Impairment of goodwill and intangibles
 
456,023

 

 

 

 
456,023

Impairment of held-for-sale goodwill
 
80,604

 

 

 
(80,604
)
(k)

Impairment of held-for-sale assets
 
84,555

 

 

 
(84,555
)
(l)

Income (loss) before other expense, interest, and income taxes
 
(610,285
)
 
(22,762
)
 
(6,180
)
 
175,400

 
(463,827
)
Other expense
 
(6,796
)
 

 

 
4,925

(m)
(1,871
)
Income (loss) before interest and income taxes
 
(617,081
)
 
(22,762
)
 
(6,180
)
 
180,325

 
(465,698
)
Interest expense, net
 
(57,191
)
 
10,626

(h)
4,069

(g)

 
(42,496
)
Income (loss) before income taxes
 
(674,272
)
 
(12,136
)
 
(2,111
)
 
180,325

 
(508,194
)
Income tax provision (benefit)
 
(25,829
)
 
(2,913
)
(i)
(507
)
(h)
861

(h)
(28,388
)
Net income (loss)
 
$
(648,443
)
 
$
(9,223
)
 
$
(1,604
)
 
$
179,464

 
$
(479,806
)
Earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
 
Basic
 
$
(11.27
)
 
$
(0.16
)
 
$
(0.03
)
 
$
3.12

 
$
(8.34
)
Diluted
 
$
(11.27
)
 
$
(0.16
)
 
$
(0.03
)
 
$
3.12

 
$
(8.34
)
Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
Basic
 
57,544

 
57,544

 
57,544

 
57,544

 
57,544

Diluted
 
57,544

 
57,544

 
57,544

 
57,544

 
57,544

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements




















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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

The unaudited pro forma condensed consolidated financial statements represent the following adjustments:

(a) Represents the Company’s divestiture of assets, liabilities and currency translation adjustments related to the Firearms Business as of June 30, 2019, which was previously classified as held for sale.

(b) Reflects the current value of the $12,000 note payable due on July 5, 2024, which was part of the net proceeds received for the sale of the Firearms Business.

(c) Reflects the use of a portion of the $152,798 of net cash proceeds from the sale of the Firearms Business used to pay off the balance of our Term Loan Credit Agreement and to reduce our ABL Revolving Credit Facility.

(d) Reflects the elimination of the results of operations attributable to the Firearms Business for the three months ended June 30, 2019 and the fiscal year ended March 31, 2019, respectively.

(e) Reflects the elimination of transaction costs attributable to the sale of the Firearms Business.

(f) Reflects the elimination of $9,429 of impairment charges related to held-for-sale assets of the Firearms Business.

(g) Represents the estimated interest expense savings resulting from applying the net sales proceeds from the disposition of the Eyewear Business and the Firearms Business to reduce debt on April 1, 2018 through the period that we owned them. The estimated interest expense savings were derived using an average quarterly indebtedness of the Company during fiscal 2019 and for the 3 months ended June 30, 2019, compared to total quarterly interest expense for the same periods. The average interest rate applied was approximately 6.4% for fiscal 2019 and 6.1% for the three months ended June 30, 2019. Also included in the net interest expense is the estimated interest income that would have been recognized if we received the note described above in (b) on April 1, 2018.

(h) The tax affects of the pro-forma adjustments for the Firearms Business and Eyewear Business were calculated using the estimated blended federal and state statutory tax rate of 24%, which is the historical statutory rate in effect for the periods presented. The impairments, which are included in the other adjustments, were not tax-affected as they are not deductible for tax purposes; the remaining other adjustments were tax-affected at the statutory rate.

(i) Reflects the elimination of $437 in contract termination fees related to the sale of the Eyewear Business.

(j) Reflects the elimination of $8,826 in transaction costs attributable to the sale of both the Firearms Business and Eyewear Business and $978 in contract termination fees related to the sale of the Eyewear Business.

(k) Reflects the elimination of goodwill impairment related to the Firearms Business of $80,604.

(l) Reflects the elimination of $44,921 of impairment charges on held-for-sale assets for the Eyewear Business and $39,634 for the Firearms Business.

(m) Reflects the elimination of $4,925 related to the loss on sale of the Eyewear Business.

Additional Information

(1)On September 4, 2018 we completed the divestiture of the legal entities operating our Bollé, Cébé and Serengeti brands ("Eyewear Business"). The sale of this business did not qualify for discontinued operations accounting under financial statement presentation authoritative guidance. In addition, the sale was not considered a significant disposition for purposes of Item 2.01 of Form 8-K. For additional information, we voluntarily provided an additional column in the unaudited pro forma consolidated statements of income for the fiscal year ended March 31, 2019, assuming the sale of the Eyewear Business had occurred on April 1, 2018.




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