Press release . . .
“We are pleased to see continued stabilization of the ammunition market, alongside year over year growth for many of our brands. Notably, our Ammunition business delivered positive revenue growth for the first time in eleven quarters,” said Vista Outdoor Chief Executive Officer Chris Metz. “While the external environment remains fluid, we continue to favorably position Vista Outdoor to deliver strong, profitable growth, and increased free cash flow. I am confident in the plans we have in place, and in our team’s ability to successfully deliver on our full year expectations for Fiscal Year 2020.”
For the third quarter ended December 29, 2019:
- Sales were $425 million, down 9 percent from the prior-year quarter, and were up 0.2% on an organic basis, excluding results from of our Firearms business which was sold in the second quarter of Fiscal Year 2020.
- Gross profit was $89 million, down 6 percent from the prior year quarter, up 4 percent on an adjusted organic basis, excluding results from our Firearms business.
- Operating expenses were $70 million. This compares to $609 million of operating expenses in the prior-year quarter, which reflects significant asset impairment charges. Adjusted operating expenses were down 13 percent, at $70 million compared to $80 million in the prior year quarter.
- Fully diluted GAAP earnings per share (EPS) was $0.25, compared to $(8.94) in the prior year quarter. Adjusted EPS was $0.21, compared to $0.09 in the prior year quarter.
- Cash flow provided by operating activities year-to-date was $63 million, compared to $61 million provided by operations in the prior year period. Year-to-date free cash flow was positive $46 million, compared to free cash flow of positive $51 million in the prior year period. Free cash flow generated in the quarter was positive $70 million.
For the third quarter ended December 29, 2019 Operating Segment Results:
- The Outdoor Products segment generated $222 million in sales during the third quarter, down 2 percent from the prior-year quarter.
- Gross profit was $56 million, up 3.5 percent from the prior year quarter, and down 1 percent on an adjusted basis. The gross profit margin was 25 percent, up 128 bps from the prior year quarter, and was 25 percent on an adjusted basis, up 26 bps from the prior year quarter.
- The Shooting Sports segment generated $202 million in sales during the third quarter, down 16 percent from the prior-year quarter. On an organic basis, excluding the results from Firearms, Ammunition sales were up 2 percent over the prior year quarter.
- Gross profit was $33 million, down 18 percent from the prior year quarter, up 13 percent on an adjusted organic basis. The gross profit margin was 16 percent, down 42 bps from the prior year quarter, and was 16 percent on an adjusted organic basis, up 150 bps from the prior year quarter.
Please see the tables in this press release for a reconciliation of non-GAAP adjusted gross profit, operating expenses, operating profit, tax rate, fully diluted earnings per share, and free cash flow to the comparable GAAP measures.
Outlook for Fiscal Year 2020
“Our accelerated transformation plan is on track and is progressing very well. We delivered another consecutive quarter of gross margin improvement, demonstrated significant working capital improvement, generated strong free cash flow and repaid $55 million of our outstanding debt balance. Our focus on maintaining a strong cash and working capital position, alongside our focus on higher quality revenue and rigorous expense controls will continue to position Vista Outdoor to capitalize on organic growth opportunities going forward,” said Mick Lopez, Vista Outdoor Chief Financial Officer.
Vista Outdoor’s outlook for full year Fiscal 2020 has been updated to reflect the following:
- Sales in a range of $1.75 billion to $1.80 billion, compared to the previous expectation of $1.75 billion to $1.85 billion.
- Interest expense reported of approximately $40 million and adjusted of approximately $35 million, compared to the previous adjusted interest expense expectation of $37 million.
- GAAP Earnings per share in a range of $(0.20) to $(0.15), as compared to the previous range of $(0.23) and $(0.08), and adjusted earnings per share of $0.15 to $0.20, compared to the previous expectation of adjusted earnings per share in the range of $0.10 to $0.25.
- Capital expenditures of approximately $35 million, compared to the previous expectation of $40 million.
- Free cash flow in a range of $40 million to $50 million, compared to the previous expectation of $30 million to $40 million.
The company expects FY20 EBITDA margins of approximately 6 percent. FY20 guidance does not include the impact of any additional future strategic acquisitions, divestitures, investments, business combinations or other significant transactions.
For more detailed results, click here.