Vista Outdoor(VSTO) - 2025 Q2 - Quarterly Results

Financial Performance - Vista Outdoor reported Q2 FY2025 sales of $666 million, with operating income of $66 million and an operating margin of 9.9%[1] - Revelyst's Q2 FY2025 sales reached $315 million, with operating income increasing 67.1% to $21 million and an operating margin of 6.6%[10] - The Kinetic Group's Q2 FY2025 sales were $351 million, with operating income of $87 million and a margin of 24.8%[14] - Adjusted EBITDA for Vista Outdoor decreased 4.4% to $111 million, with a margin of 16.7%[7] - Diluted EPS was $0.71, down 6.6% year-over-year, while adjusted EPS increased 7.3% to $1.03[8] - Gross profit for the three months ended September 24, 2023, was $208,870, with an operating income of $75,785, resulting in an operating income margin of 11.2%[23] - Adjusted net income for the same period was $56,093, with an adjusted earnings per share (EPS) of $0.96, compared to an EPS of $0.76 as reported[23] - Free cash flow for the three months ended September 30, 2024, was $19,039, down from $70,520 in the previous year[29] - Adjusted EBITDA for the three months ended September 30, 2024, was $111,377, with an adjusted EBITDA margin of 16.7%[35] - Net sales for the three months ended September 30, 2024, were $665,915,000, a decrease of 1.3% from $676,808,000 in the same period last year[52] - Gross profit for the three months ended September 30, 2024, was $211,429,000, compared to $208,870,000 for the same period last year, indicating a slight increase of 0.7%[52] - Operating income for the three months ended September 30, 2024, was $65,725,000, down from $75,785,000 in the prior year, representing a decline of approximately 13.4%[52] - Net income for the three months ended September 30, 2024, was $41,798,000, compared to $44,422,000 in the same period last year, reflecting a decrease of approximately 5.9%[52] - Basic earnings per share for the three months ended September 30, 2024, were $0.72, down from $0.77 in the prior year, a decline of about 6.5%[52] - For the twelve months ended September 30, 2024, Vista Outdoor reported a net loss of $9,109,000 compared to a net loss of $5,505,000 for the previous twelve months[40] - Adjusted EBITDA for the twelve months ended September 30, 2024, was $424,987,000, down from $444,862,000 for the previous period, reflecting a decrease of approximately 4.3%[40] Debt and Cash Flow - Total debt decreased by $45 million sequentially to $590 million, with a net debt leverage ratio of 1.3 times[1] - The company reported a net debt of $553,075 as of September 30, 2024, down from $659,729 as of March 31, 2024[38] - Long-term debt decreased significantly to $587,519 thousand from $717,238 thousand, a reduction of approximately 18.1%[54] - Total liabilities decreased to $1,121,918 thousand as of September 30, 2024, down from $1,276,083 thousand, representing a decline of 12.1%[54] - Cash provided by operating activities was $80,543 thousand, down 25.1% from $107,540 thousand in the prior year[55] - Cash and cash equivalents at the end of the period were $36,925 thousand, down from $60,271 thousand, a decrease of 38.9%[55] - Cash used for financing activities was $134,014 thousand, a slight improvement compared to $139,806 thousand in the previous year[55] Cost Management and Restructuring - The GEAR Up transformation program delivered $11.6 million in realized cost savings in the first half of FY2025, with expected total savings of $25 to $30 million for the full fiscal year[3] - The company incurred restructuring costs related to a $50 million cost reduction program announced in the fourth fiscal quarter of 2023[25] - Planned separation costs associated with the Revelyst and The Kinetic Group businesses amounted to $14,358 for the three months ended September 30, 2024[35] Inventory and Assets - Revelyst inventory decreased by $87 million year-over-year, contributing to a year-to-date cash flow from operating activities of $81 million[17] - Total current assets increased to $1,082,659 thousand as of September 30, 2024, compared to $1,075,122 thousand as of March 31, 2024, reflecting a growth of 0.35%[54] - Net inventories increased slightly to $612,847 thousand from $609,999 thousand, reflecting a growth of 0.3%[54] Strategic Transactions and Future Outlook - The company plans to withdraw its full-year FY2025 guidance due to the pending sales of The Kinetic Group and Revelyst[18] - Institutional Shareholder Services recommended stockholders vote "FOR" the sale of The Kinetic Group to CSG, with an expected total cash consideration of approximately $45.00 per share[2] - The company is currently involved in significant transactions, including the CSG Transaction and the SVP Transaction, which may impact future operations and financial performance[43] - Vista Outdoor is focused on expanding its market presence and enhancing its product offerings through strategic acquisitions and partnerships[41] Other Financial Metrics - The tax expense for the three months ended September 24, 2023, was $13,546, resulting in a tax rate of 23.4%[26] - The company experienced a loss on the divestiture of its Fiber Energy business during the reporting period[24] - The company reported a gain on the sale of business amounting to $18,787 thousand during the six months ended September 30, 2024[55] - Total stockholders' equity increased to $1,231,715 thousand from $1,126,297 thousand, an increase of 9.3%[54]