Vista Outdoor has reported operating results for the second quarter of its fiscal year 2019, which ended on September 30, 2018.
“Vista Outdoor delivered a solid quarter, exceeding our expectations for sales and EPS, despite market challenges,” said Vista Outdoor Chief Executive Officer Chris Metz. “Our ongoing efficiency and cost-reduction initiatives are beginning to bear fruit. We also completed the sale of our Eyewear Brands in the quarter which allowed us to pay down $143 million in debt. The Eyewear sale was an important step in our transformation plan, and I’m proud of our team for delivering on both our short-term financial and long-term strategy goals. We’ve also taken considerable steps in our process to divest the Savage Arms brands.”
For the second quarter ended September 30, 2018:
- Sales were $547 million, down 7 percent from the prior-year quarter.
- Gross profit was $109 million, down 22 percent from the prior-year quarter.
- Operating expenses were $128 million, compared to $266 million in the prior-year quarter. Adjusted operating expenses were $94 million compared to $105 million in the prior-year quarter.
- Fully diluted earnings per share (EPS) was $(0.57), compared to $(2.01) in the prior-year quarter. Adjusted EPS was $0.05, compared to $0.34 in the prior-year quarter.
- Cash flow provided by operating activities year to date was $58 million, compared to $112 million in the prior-year period. Year-to-date free cash flow generation was $55 million, compared to free cash flow of $80 million in the prior-year period.
- Tax rate was 19.8 percent compared to 17.9 percent in the prior-year quarter. The adjusted tax rate was 49.7 percent, compared to 8.7 percent in the prior-year quarter.
Outlook for Fiscal Year 2019
“The company exceeded expectations within challenging markets,” said Vista Outdoor Chief Financial Officer Mick Lopez. “Our Shooting Sports segment generated sequential sales growth, while our Outdoor Products segment sales remained flat adjusted for eyewear. Overall, we are pleased with these results and our continued efforts to drive profitability.”
Vista Outdoor’s current guidance for FY19 is as follows:
- Sales in a range of $2.10 billion to $2.16 billion
- Interest expense of approximately $55 million
- Tax rate reported of approximately 10 percent and an adjusted tax rate of approximately 30 percent, compared to 1 percent and adjusted rate of 30 percent
- Earnings per share in a range of $(1.32) to $(1.17) and adjusted earnings per share in a range of $0.20 to $0.35, compared to previous earnings per share in a range of $(0.76) to $(0.56), and adjusted earnings per share in a range of $0.15 to $0.35
- Capital expenditures of approximately $60 million
- Free cash flow in a range of $70 million to $100 million
The above information, the company says, does not include the impact of any future strategic acquisitions, divestitures, investments, business combinations or other significant transactions.
For a complete breakdown of Vista Outdoor’s financial results, click here.