Vista Outdoor Announces FY17 Second Quarter Operating Results
"
For the second quarter ended
- 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$0.52 in the prior-year quarter. Adjusted EPS was$0.74 , compared to$0.63 in the prior-year quarter. - 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 1,074,000 shares for
$44 million . SinceOctober 2, 2016 ,Vista Outdoor repurchased approximately 724,000 additional shares for$28 million .
"We remain confident in our strategy, and we are reaffirming our FY17 guidance," said
Reaffirmed Outlook for Fiscal Year 2017
- 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
Please see the tables below for a reconciliation of non-GAAP adjusted EPS, operating profit and free cash flow to the comparable GAAP measures.
Earnings Conference Call Webcast Information
Investor Day
Reconciliation of Non-GAAP Financial Measures
Gross Profit, Operating Profit and Earnings Per Share
The adjusted cost of sales, gross profit, operating expenses, operating profit (adjusted EBIT), adjusted tax rate, and adjusted earnings per share (adjusted EPS) presented above are non-GAAP financial measures that
|
||||||||||||||||||||||||||||||||
Quarter ended |
||||||||||||||||||||||||||||||||
Cost of |
Gross |
Operating |
Operating |
Income |
Income |
Net |
EPS |
|||||||||||||||||||||||||
As reported |
$ |
498,903 |
$ |
185,409 |
$ |
80,846 |
$ |
104,563 |
$ |
21,196 |
22.4 |
% |
$ |
73,224 |
$ |
1.22 |
||||||||||||||||
Acquisition claim settlement gain, net |
— |
— |
30,027 |
(30,027) |
143 |
(30,170) |
(0.50) |
|||||||||||||||||||||||||
Transaction and transition costs |
— |
— |
(2,067) |
2,067 |
779 |
1,288 |
0.02 |
|||||||||||||||||||||||||
As adjusted |
$ |
498,903 |
$ |
185,409 |
$ |
108,806 |
$ |
76,603 |
$ |
22,118 |
33.3 |
% |
$ |
44,342 |
$ |
0.74 |
||||||||||||||||
Quarter ended |
||||||||||||||||||||||||||||||||
Cost of |
Gross |
Operating |
Operating |
Income |
Income |
Net |
EPS |
|||||||||||||||||||||||||
As reported |
$ |
402,353 |
$ |
149,024 |
$ |
88,281 |
$ |
60,743 |
$ |
21,505 |
39.7 |
% |
$ |
32,675 |
$ |
0.52 |
||||||||||||||||
Transaction costs |
— |
— |
(6,735) |
6,735 |
1,519 |
5,216 |
0.08 |
|||||||||||||||||||||||||
Facility rationalization |
— |
— |
(2,185) |
2,185 |
830 |
1,355 |
0.02 |
|||||||||||||||||||||||||
Inventory step-up |
(538) |
538 |
— |
538 |
204 |
334 |
0.01 |
|||||||||||||||||||||||||
As adjusted |
$ |
401,815 |
$ |
149,562 |
$ |
79,361 |
$ |
70,201 |
$ |
24,058 |
37.8 |
% |
$ |
39,580 |
$ |
0.63 |
||||||||||||||||
Outdoor Products |
||||||||||||||||||||||||||||||||
Quarter ended |
||||||||||||||||||||||||||||||||
Cost of |
Gross |
|||||||||||||||||||||||||||||||
As reported |
$ |
155,664 |
$ |
57,314 |
||||||||||||||||||||||||||||
Inventory step-up |
(538) |
538 |
||||||||||||||||||||||||||||||
As adjusted |
$ |
155,126 |
$ |
57,852 |
||||||||||||||||||||||||||||
*NOTE: Adjustments to "as reported" results are items that are excluded to arrive at the "as adjusted" results for the quarters ended
During the quarter ended
During the quarter ended
During the quarter ended
For the quarter ended
Free Cash Flow
Free cash flow is defined as cash provided by operating activities less capital expenditures and excluding an acquisition claim settlement, and transaction and transition costs net of taxes incurred to date.
Six months ended |
Six months ended |
Projected year ending |
|||||||||
Cash provided by operating activities |
$ |
10,183 |
$ |
17,495 |
|
||||||
Capital expenditures |
(31,117) |
(17,216) |
~(90,000) |
||||||||
Acquisition claim settlement gain, net |
(30,027) |
— |
(30,027) |
||||||||
Transaction and transition costs paid to date, net of tax |
3,123 |
4,413 |
3,123 |
||||||||
Free cash flow |
$ |
(47,838) |
$ |
4,692 |
|
Adjusted Earnings Per Share - Guidance Reconciliation Table
The projected adjusted earnings per share (EPS), excluding the impact of a gain due to an acquisition claim settlement, costs incurred for completed and potential transactions, transition costs for the
Current FY17 Full-Year Adjusted EPS Guidance |
|||||||||
Low |
High |
||||||||
EPS guidance including acquisition claim settlement, contingent consideration revaluation, transaction and transition costs, and inventory step-up incurred to date |
$ |
3.13 |
$ |
3.33 |
|||||
Acquisition claim settlement gain, net |
(0.50) |
(0.50) |
|||||||
Contingent consideration |
(0.04) |
(0.04) |
|||||||
Transaction and transition costs incurred to date |
0.05 |
0.05 |
|||||||
Inventory step-up |
0.01 |
0.01 |
|||||||
Adjusted EPS guidance |
$ |
2.65 |
$ |
2.85 |
|||||
Forward-Looking Statements
Certain statements in this press release and other oral and written statements made by
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF INCOME |
||||||||||||||||
(preliminary and unaudited) |
||||||||||||||||
Quarter ended |
Six months ended |
|||||||||||||||
(Amounts in thousands except per share data) |
|
|
|
|
||||||||||||
Sales, net |
$ |
684,312 |
$ |
551,377 |
$ |
1,314,581 |
$ |
1,065,874 |
||||||||
Cost of sales |
498,903 |
402,353 |
957,795 |
777,558 |
||||||||||||
Gross profit |
185,409 |
149,024 |
356,786 |
288,316 |
||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
8,150 |
2,815 |
15,981 |
5,170 |
||||||||||||
Selling, general, and administrative |
102,723 |
85,466 |
207,167 |
163,420 |
||||||||||||
Acquisition claim settlement gain, net |
(30,027) |
— |
(30,027) |
— |
||||||||||||
Income before interest and income taxes |
104,563 |
60,743 |
163,665 |
119,726 |
||||||||||||
Interest expense, net |
(10,143) |
(6,563) |
(22,106) |
(9,132) |
||||||||||||
Income before income taxes |
94,420 |
54,180 |
141,559 |
110,594 |
||||||||||||
Income tax provision |
21,196 |
21,505 |
39,211 |
44,029 |
||||||||||||
Net income |
$ |
73,224 |
$ |
32,675 |
$ |
102,348 |
$ |
66,565 |
||||||||
Earnings per common share: |
||||||||||||||||
Basic |
$ |
1.23 |
$ |
0.52 |
$ |
1.70 |
$ |
1.06 |
||||||||
Diluted |
$ |
1.22 |
$ |
0.52 |
$ |
1.69 |
$ |
1.05 |
||||||||
Weighted-average number of common shares outstanding: |
||||||||||||||||
Basic |
59,710 |
62,816 |
60,055 |
63,064 |
||||||||||||
Diluted |
60,055 |
63,155 |
60,400 |
63,406 |
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(preliminary and unaudited) |
||||||||
(Amounts in thousands except share data) |
|
|
||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
48,275 |
$ |
151,692 |
||||
Net receivables |
556,270 |
428,398 |
||||||
Net inventories |
575,755 |
440,240 |
||||||
Other current assets |
27,451 |
29,334 |
||||||
Total current assets |
1,207,751 |
1,049,664 |
||||||
Net property, plant, and equipment |
244,155 |
203,485 |
||||||
|
1,214,003 |
1,023,451 |
||||||
Net intangible assets |
824,046 |
650,472 |
||||||
Deferred charges and other non-current assets |
31,398 |
15,562 |
||||||
Total assets |
$ |
3,521,353 |
$ |
2,942,634 |
||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ |
192,000 |
$ |
17,500 |
||||
Accounts payable |
135,618 |
147,738 |
||||||
Accrued compensation |
41,623 |
47,394 |
||||||
Accrued income taxes |
2,451 |
12,171 |
||||||
Federal excise tax |
30,540 |
27,701 |
||||||
Other current liabilities |
167,802 |
116,397 |
||||||
Total current liabilities |
570,034 |
368,901 |
||||||
Long-term debt |
928,950 |
652,787 |
||||||
Deferred income tax liabilities |
184,102 |
135,957 |
||||||
Accrued pension and postemployment liabilities |
71,618 |
73,503 |
||||||
Other long-term liabilities |
64,747 |
51,319 |
||||||
Total liabilities |
1,819,451 |
1,282,467 |
||||||
Common stock—$.01 par value: |
||||||||
Authorized—500,000,000 shares |
||||||||
Issued and outstanding— 59,293,644 shares at |
593 |
608 |
||||||
Additional paid-in capital |
1,752,069 |
1,743,371 |
||||||
Retained earnings |
268,769 |
166,421 |
||||||
Accumulated other comprehensive loss |
(112,834) |
(110,214) |
||||||
Common stock in treasury, at cost— 4,670,795 shares held at |
(206,695) |
(140,019) |
||||||
Total stockholders' equity |
1,701,902 |
1,660,167 |
||||||
Total liabilities and stockholders' equity |
$ |
3,521,353 |
$ |
2,942,634 |
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(preliminary and unaudited) |
||||||||
Six months ended |
||||||||
(Amounts in thousands) |
|
|
||||||
Operating Activities: |
||||||||
Net income |
$ |
102,348 |
$ |
66,565 |
||||
Adjustments to net income to arrive at cash provided by operating activities: |
||||||||
Depreciation |
26,993 |
18,784 |
||||||
Amortization of intangible assets |
20,393 |
15,651 |
||||||
Amortization of deferred financing costs |
2,823 |
1,156 |
||||||
Deferred income taxes |
(11) |
695 |
||||||
Loss on disposal of property, plant, and equipment |
— |
498 |
||||||
Stock-based compensation |
6,524 |
6,137 |
||||||
Excess tax benefits from share-based plans |
— |
(206) |
||||||
Changes in assets and liabilities, net of acquisition of businesses: |
||||||||
Net receivables |
(40,122) |
(10,907) |
||||||
Net inventories |
(73,717) |
(95,550) |
||||||
Accounts payable |
(47,574) |
(8,220) |
||||||
Accrued compensation |
(15,651) |
1,134 |
||||||
Accrued income taxes |
(4,431) |
(7,015) |
||||||
Federal excise tax |
2,895 |
2,856 |
||||||
Pension and other postretirement benefits |
1,155 |
3,650 |
||||||
Other assets and liabilities |
28,558 |
22,267 |
||||||
Cash provided by operating activities |
10,183 |
17,495 |
||||||
Investing Activities: |
||||||||
Capital expenditures |
(31,117) |
(17,216) |
||||||
Acquisition of businesses, net of cash acquired |
(458,149) |
(462,182) |
||||||
Proceeds from the disposition of property, plant, and equipment |
66 |
130 |
||||||
Cash used for investing activities |
(489,200) |
(479,268) |
||||||
Financing Activities: |
||||||||
Borrowings on line of credit |
290,000 |
360,000 |
||||||
Payments on line of credit |
(130,000) |
(360,000) |
||||||
Proceeds from issuance of long-term debt |
307,500 |
350,000 |
||||||
Payments made on long-term debt |
(16,000) |
(8,750) |
||||||
Payments made for debt issuance costs |
(3,660) |
(4,379) |
||||||
Purchase of treasury shares |
(64,961) |
(53,009) |
||||||
Deferred payments for acquisitions |
(7,136) |
— |
||||||
Excess tax benefits from share-based plans |
— |
206 |
||||||
Proceeds from employee stock compensation plans |
75 |
438 |
||||||
Cash provided by financing activities |
375,818 |
284,506 |
||||||
Effect of foreign exchange rate fluctuations on cash |
(218) |
(552) |
||||||
Decrease in cash and cash equivalents |
(103,417) |
(177,819) |
||||||
Cash and cash equivalents at beginning of period |
151,692 |
263,951 |
||||||
Cash and cash equivalents at end of period |
$ |
48,275 |
$ |
86,132 |
Media Contact: |
Investor Contact: |
|
|
Phone: 801-447-3035 |
Phone: 801-447-3168 |
E-mail: [email protected] |
E-mail: [email protected] |
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