PR Newswire
FARMINGTON, Utah, Nov. 9, 2017
FARMINGTON, Utah, Nov. 9, 2017 /PRNewswire/ -- Vista Outdoor Inc. (NYSE: VSTO) today reported operating results for the second quarter of its Fiscal Year 2018 (FY18), which ended on October 1, 2017. The company also announced that its Board of Directors has named Michael Callahan to serve as chairman.
"I am honored to be elected chairman of Vista Outdoor," said Callahan. "I am optimistic about the future, and the board is impressed with how quickly our new CEO Chris Metz has wrapped his mind around the business. His strategic, savvy and decisive approach is exactly the right leadership the company needs to realize the full potential of our diverse portfolio of iconic brands."
"I am excited to combine my passion for these brands and this industry with my professional experience and deep background in consumer products," said Vista Outdoor Chief Executive Officer Chris Metz. "While I've only been here a short time, I realize we have much to do: we must make significant changes, act decisively, and move quickly to reposition and stabilize the company. We will take an aggressive position on profit improvement through both margin expansion and cost reductions across all areas of the core business.
"We're in the process of completing a portfolio review of our brands, and we will divest assets where we see the potential to unlock shareholder value. As a first outcome of this process, we are announcing our intention to sell the Bollé, Serengeti and Cébé brands in the Sports Protection business. These brands were acquired as part of the Bushnell transaction in 2013 and focus primarily on fashion, prescription and safety eyewear, which are areas that we have determined are not core to our business. The sale of these brands is expected to take place over the next few quarters.
"To allow our business leaders to drive changes faster and have clear line of sight to the goals at hand, I have decided to eliminate the Shooting Sports segment president position," said Metz.
With this restructuring, Shooting Sports President Bob Keller will leave the company on November 17, 2017.
"I want to thank Bob for his leadership and his many contributions to the company, and I wish him well in his future endeavors," said Metz.
Upon Keller's departure, Al Kasper, President of Firearms, and Jason Vanderbrink, President of Ammunition, will report directly to Metz, as leaders within the Shooting Sports Segment. Kasper currently leads Firearms for the company. He joined Savage Arms in 1996 as chief financial officer and became its president and chief operating officer in 2001. Vanderbrink has served as Vista Outdoor's senior vice president of sales since January 2017 and will also continue to serve in the sales role as the company evaluates its organizational structure for sales, marketing and product development. He joined Vista Outdoor in 2005 and has 17 years of extensive experience in the outdoor recreation and shooting sports industries.
"Al's tenure with the company and insights into the firearms industry make him ideal for this position. Jason has a proven history of strategic leadership at Vista Outdoor, and has strong customer relationships and market knowledge within the ammunition industry. I have confidence in both of these fine leaders and look forward to working with them as they deploy their capabilities across these critical roles."
For the second quarter ended October 1, 2017:
"During the second quarter, the competitive environment in ammunition, firearms and shooting-related accessories continued to impact our business," said Vista Outdoor Chief Financial Officer Stephen Nolan. "Ongoing promotional activity combined with high inventory trends in our wholesale channels contributed to a challenging quarter. The company remains focused on cost-savings initiatives and working capital improvements. I'm pleased with the significant reductions to company inventory levels we have made, both year over year and sequentially. We just completed another workforce reduction to better align production with demand. The company generated cash at a level that is higher than our historic average, and we continue to build out our e-commerce strategy and invest in new, innovative products."
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
"During the quarter we recorded an impairment of intangible assets of $152 million in our Outdoor Products segment, with $75 million related to our Sports Protection business and $77 million related to our Hunting and Shooting Accessories business," said Nolan. "The impairment was triggered by increased downward pressure on sales and margins as a result of challenging market conditions that have persisted longer than previously expected. These challenging market conditions have been exacerbated by additional customer bankruptcies and consolidations. We continue to see high channel inventories for our Hunting and Shooting Accessories business. We expect these inventory levels will take the remainder of the fiscal year to work through, and will continue to put pressure on sales and margins. Our Sports Protection business has been impacted by the ongoing challenges facing the cycling industry broadly and by reduced retail space for our products.
"The market contraction and competitive environment I mentioned earlier will have more of an impact in the second half of the year than it did in the first half, including the full impact of the ammunition pricing action, which we took in the first and second quarters. While we have taken actions to reduce costs, these initiatives have been more than offset by persisting market conditions. As a result, we are revising our FY18 financial guidance for the year."
Vista Outdoor revised its FY18 financial guidance. The company expects:
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.
Earnings Conference Call Webcast Information
Vista Outdoor will hold an investor conference call to discuss its second quarter FY18 financial results on November 9, 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 for the recorded call is 719-457-0820, and the confirmation code is 8570212.
Reconciliation of Non-GAAP Financial Measures
Gross Profit, Operating Profit, and Earnings Per Share
The adjusted gross profit, operating expenses, operating profit (adjusted EBIT), adjusted tax rate, and adjusted earnings per share (adjusted EPS) presented below are non-GAAP financial measures. Vista Outdoor defines these measures as gross profit, operating profit (EBIT), tax rate, and EPS excluding, where applicable, the impact of costs incurred for current and possible contingent consideration, transactions, CEO transition costs, goodwill and intangible asset impairment, pension curtailment, acquisition claim settlement gain, transition costs, and acquisition inventory step-up. Vista Outdoor management is presenting these measures so a reader may compare gross profit, EBIT, tax rate, and EPS excluding these items, as the measures provide investors with an important perspective on the operating results of the company. Vista Outdoor management uses this measurement internally to assess business performance, and Vista Outdoor's definition may differ from those used by other companies.
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Quarter ended October 1, | | | | | | | | | | | | | | | | |||||||||||||
(in thousands) | | | | | | | | | | | | | | | | |||||||||||||
| | Gross | | Operating | | Operating | | Income | | Income | | Net | | EPS | | |||||||||||||
As reported | | $ | 138,977 | | | $ | 266,153 | | | $ | (127,176) | | | $ | (25,040) | | | 17.9 | % | | $ | (114,705) | | | $ | (2.01) | | |
Contingent consideration | | — | | | 211 | | | (211) | | | 314 | | | | | (525) | | | (0.01) | | | |||||||
Transaction costs | | — | | | (316) | | | 316 | | | 118 | | | | | 198 | | | — | | | |||||||
CEO transition costs | | — | | | (8,693) | | | 8,693 | | | 3,076 | | | | | 5,617 | | | 0.10 | | | |||||||
Goodwill and intangibles | | — | | | (152,320) | | | 152,320 | | | 23,393 | | | | | 128,927 | | | 2.26 | | | |||||||
As adjusted | | $ | 138,977 | | | $ | 105,035 | | | $ | 33,942 | | | $ | 1,861 | | | 8.7 | % | | $ | 19,512 | | | $ | 0.34 | | |
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Quarter ended October 2, | | | | | | | | | | | | | | | | |||||||||||||
(in thousands) | | | | | | | | | | | | | | | | |||||||||||||
| | Gross | | Operating | | Operating | | Income | | Income | | Net Werbung Mehr Nachrichten zur Vista Outdoor Inc Aktie kostenlos abonnieren
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