Vista Outdoor Inc. reported sales of $514 million for the first quarter ended July 5, down 9 percent from the prior-year quarter, primarily reflecting the expected sales decline from the shooting sports market correction.

Gross profit was $139 million, down 3 percent from the prior-year quarter as a result of decreased sales, largely offset by improved product mix.

Operating expenses were $80 million, compared to $69 million in the prior year. The increase reflects standalone company costs, stock-based compensation, additional selling and marketing investments, and transaction-related expenses.

Fully diluted earnings per share (EPS) were $0.53, compared to $0.64 in the prior-year quarter. Adjusted EPS was $0.54.

Free cash flow use was $52 million, compared to use of $82 million in the prior year.

The company repurchased approximately 512,000 shares in the quarter for $22.9 million. Since July 5, 2015, Vista Outdoor repurchased approximately 213,000 additional shares for $9.5 million.

“Vista Outdoor completed its first full quarter by delivering solid results and recording sequential quarterly growth in sales and gross profit of 6 percent and 13 percent, respectively,” said Vista Outdoor Chairman and Chief Executive Officer Mark DeYoung. “We also recently acquired two great companies that expand our offering and strengthen our portfolio of leading brands. Both companies hold leading market positions: CamelBak in personal hydration systems and Jimmy Styks in stand up paddle boards. The acquisition of these companies enables us to enter new outdoor recreation segments, serve new customers and reach additional consumers with top-tier brands and quality products. Our operating results and acquisitions support our strategy to position Vista Outdoor as a premier provider of individual outdoor sports and recreation products and demonstrate our commitment to delivering long-term shareholder value.”

“Our results reflect the expected and previously communicated year-over-year sales decline in the shooting sports market, which is primarily due to a decrease in sales for ammunition and reloading components, partially offset by an increase in firearms and shooting-related accessories,” said Vista Outdoor Chief Financial Officer Stephen Nolan. “The company's results were also impacted by unfavorable foreign exchange, which we also anticipated. The strength in our Outdoor Products segment helped to offset the impacts in the Shooting Sports segment. We continue to expect low, single-digit organic growth for the full year, as a result of improvements in the back half of FY16.”

Updated Outlook for Fiscal Year 2016
Vista Outdoor's updated FY16 financial guidance includes recent acquisitions and excludes transaction-related expenses. The company expects:

  • Sales in a range of $2.17 billion to $2.24 billion;
  • Adjusted EPS in a range of $2.05 to $2.30;
  • Capital expenditures of approximately $45 million;
  • Free cash flow in a range of $150 million to $180 million;
  • Tax rate of approximately 38 percent.

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF INCOME

(preliminary and unaudited)



Quarter Ended

 

(Amounts in thousands except per share data)

July 5,
2015

June 29,
2014

Sales, net

$

514,497

$

565,995

Cost of sales

375,205

422,544

Gross profit

139,292

143,451

Operating expenses:

Research and development

2,355

3,651

Selling, general, and administrative

77,954

65,140

Income before interest and income taxes

58,983

74,660

Interest expense

(2,569)

(9,041)

Interest income

–

9

Income before income taxes

56,414

65,628

Income tax provision

22,523

24,583

Net income

$

33,891

$

41,045

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