Vista Outdoor Inc. reported earnings vaulted 121 percent to $73.2 million, or $1.22 a share, topping Wall Street estimates. Revenues advanced 24 percent.

“Vista Outdoor delivered solid second quarter results, including an increase of 24 percent in both sales and gross profit over the prior-year period as a result of acquisitions and strong performance in our Shooting Sports segment,” said Vista Outdoor Chairman and Chief Executive Officer Mark DeYoung, in a statement. “Year over year, our Outdoor Products and Shooting Sports segments delivered organic sales growth for the quarter. During the quarter, we also welcomed Camp Chef to the Vista Outdoor family of brands. Camp Chef is a leading provider of outdoor cooking solutions and provides Vista Outdoor with a foothold in one of the camping market’s most attractive categories.”

For the second quarter ended October 2, 2016:

  • Sales were $684 million, up 24 percent from the prior-year quarter, including $106 million from the recent acquisitions and up 5 percent on an organic basis.
  • Gross profit was $185 million, up 24 percent from the prior-year quarter. The increase includes $32 million of gross profit from the recent acquisitions, and a 3-percent increase in organic gross profit.
  • Operating expenses were $81 million, compared to $88 million in the prior-year quarter. The decrease primarily reflects an acquisition claim settlement gain related to the Bushnell acquisition, partially offset by additional expenses generated by the acquisitions, as well as previously announced ongoing investments in selling, marketing and R&D activities.
  • The tax rate for the quarter was 22.4 percent, down from 39.7 percent in the prior-year quarter. The decrease was primarily caused by the nontaxable treatment of the legal claim settlement noted above and settlement of the IRS examination of the fiscal 2013 and 2014 tax returns in the current quarter.
  • Fully diluted earnings per share (EPS) was $1.22, compared to 52 cents in the prior-year quarter. Adjusted EPS was 74 cents, compared to 63 cents in the prior-year quarter. Wall Street’s consensus estimate had been 61 cents.
  • Cash flow provided by operating activities was $10 million compared to $17 million in the prior-year period. Year-to-date free cash flow use was $48 million, compared to free cash flow generation of $5 million in the prior-year period.
  • The company repurchased approximately 1.074 million shares for $44 million. Since October 2, 2016, Vista Outdoor repurchased approximately 724,000 additional shares for $28 million.

“We remain confident in our strategy, and we are reaffirming our fiscal year 2017 guidance,” said Vista Outdoor Chief Financial Officer Stephen Nolan. “Our second-quarter results have improved over our reported first-quarter levels. We saw increased promotional activity in the Outdoor Products segment and, due to the ongoing challenging retail environment, this will likely continue in the second half of the fiscal year. The promotional activity also resulted in some acceleration of revenue from the third quarter into the second quarter.”

Reaffirmed Outlook For Fiscal Year 2017
Vista Outdoor reaffirmed fiscal year 2017 financial guidance:

  • Sales in a range of $2.72 billion to $2.78 billion.
  • Interest expense of approximately $45 million.
  • Tax rate of approximately 37 percent.
  • Adjusted EPS in a range of $2.65 to $2.85.
  • Capital expenditures of approximately $90 million.
  • Free cash flow in a range of $130 million to $160 million.

The guidance above includes the previously announced Camp Chef acquisition but does not include the impact of any future strategic acquisitions, divestitures, investments, business combinations or other significant transactions, nor the impact of contingent consideration revaluation, transition expenses, the acquisition legal claim settlement or inventory step-ups for already-completed acquisitions.

The company’s brands include Federal Premium, CamelBak, Savage Arms, Bushnell, Primos, Blackhawk, Bollé, Bell and Giro.

Photo courtesy CamelBak