Vista Outdoor Inc., the parent company of 39 renowned brands that design, manufacture, and market sporting and outdoor products to consumers around the globe, today reported financial results for the third quarter of its Fiscal Year 2022 (FY22), which ended on December 26, 2021.
“Our record third-quarter results demonstrate that we’re successfully executing on our Value Creation strategy and reflect continued high consumer demand for our products,” said Chris Metz, Chief Executive Officer.
“The power of our brands, combined with our continuous introduction of innovative new products, and lean cost structure has allowed us to offset cost increases through targeted pricing action while absorbing some costs through operational efficiencies to maintain profitable growth across our portfolio. With the acquisition of Stone Glacier, our seventh acquisition in less than 18 months, Vista Outdoor is building a resilient and diverse portfolio and expanding our total addressable market across multiple outdoor recreation categories. We are also pleased to announce a new $200 million share repurchase program, which is a testament to the confidence we have in our brands, our team, and our future. Looking ahead, we are positioned to deliver long-term, sustainable results for our shareholders, customers, employees, and other stakeholders.
“Two years into the pandemic, people continue to find enjoyment in their newly acquired and rediscovered outdoor passions. We continue to see increasing levels of activity and participation across outdoor recreation whether it be golfing, camping, hiking, biking, hunting, or recreational shooting. Whatever their chosen activity, Vista Outdoor will continue to be there with brands they trust to deliver innovative, quality products that enhance their outdoor experiences. Our team’s perseverance to deliver against our goals through unprecedented challenges is nothing short of remarkable. I have the utmost confidence that we will continue to rise to the occasion no matter what comes our way in 2022 and beyond,” concluded Metz.
During the quarter ended December 26, 2021, Vista Outdoor realigned its reportable segments to better reflect how its businesses are managed and provide greater visibility into each business’ financial performance. All of the business units that rely predominately on third-party manufacturing are captured in the Outdoor Products segment. As a result of these changes, its Hunting and Shooting operating segment is now included in its Outdoor Products reportable segment and has been renamed Outdoor Accessories. Its Ammunition operating segment is now presented in its own reportable segment, which has been renamed Sporting Products. For more information regarding this change, see below under “Changes in Segment Reporting”.
The changes in segment reporting have no impact on the company’s historical consolidated financial position, results of operations, or cash flows.
Historical segment information restated to conform to the new reporting structure is available as supplemental financial information on the company’s website at www.investors.vistaoutdoor.com.
For the three months ended December 26, 2021 versus the three months ended December 27, 2020:
- Sales increased 38 percent to $795 million driven by strong double-digit growth across both operating segments.
- Gross profit rose 72 percent to $281 million and gross profit margin improved by 702 basis points to 35 percent.
- Operating expenses were 15 percent of sales, gaining leverage of 98 basis points. Adjusted operating expenses were 15 percent of sales, gaining leverage of 107 basis points.
- Earnings before interest and taxes (EBIT) increased to $159 million, from $87 million. Adjusted EBIT increased to $166 million, up 127 percent from $73 million. Adjusted EBIT margins increased 818 basis points to 21 percent.
- Interest expense increased 19 percent to $7 million.
- Fully Diluted Earnings per Share (EPS) was $2.00, compared with $1.31. Adjusted EPS was $2.10, up 104 percent compared with $1.03.
- Cash flow provided by operating activities was $114 million, compared with $109 million. Free cash flow generation was $105 million, compared with $104 million, driven primarily by higher accounts receivable payments, partially offset by investments in inventory to meet heightened demand.
During the quarter, the Company repurchased 758,273 shares for a total of $30 million equating to an average share price of $39.41 as part of the $100 million share repurchase program approved by the Board of Directors and announced on May 6, 2021. From the inception of the program through the end of the third quarter, the Company has repurchased 2,281,956 shares for a total of $86 million. Subsequent to the third quarter, the Company repurchased an additional 337,000 shares for a total of $13.1 million.
New $200 Million Share Repurchase Program Authorization
On January 31, 2022, the Company’s Board of Directors approved a new two-year share repurchase program authorizing the Company to repurchase up to $200 million of its outstanding shares of Common Stock. The new program follows the near completion of the prior share repurchase program authorized on May 6, 2021.
Earnings Conference Call Webcast Information
Vista Outdoor will hold an investor conference call to discuss its third quarter FY22 financial results and outlook on February 3, 2022, 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 until February 25, 2022. The telephone number is 866-813-9403, and the confirmation code is 596375.
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