Vista Outdoor(US:VSTO)2022-02-03 17:52Financial Data and Key Metrics Changes - Q3 sales increased by 38% year-over-year, reaching a record $795 million, with gross profit up 73% to $283 million [9][42] - EPS more than doubled to $2.10 compared to $1.03 from the previous year [43] - EBIT rose 127% to $166 million, with EBITDA margin expanding to 23%, increasing more than 775 basis points [43][48] Business Line Data and Key Metrics Changes - Sporting Products segment sales rose 60% to $460 million, with EBIT margin expanding over 1,400 basis points to nearly 33% [26][47] - Outdoor Products segment sales increased 17% to a record $335 million, driven by growth in outdoor recreation and action sports [21][46] - CamelBak brand revenue grew over 30% year-over-year, marking the fourth consecutive quarter of growth above 30% [21][22] Market Data and Key Metrics Changes - The demand for ammunition remains unprecedented, with low channel inventories and a multibillion-dollar backlog [29][78] - The golf segment saw triple-digit growth, driven by the acquisition of Foresight Sports and strong results from Bushnell Golf [35][36] Company Strategy and Development Direction - The company focuses on five strategic pillars: building the right team, organic growth, e-commerce, prudent acquisitions, and capital deployment [10][18] - The acquisition of Stone Glacier aims to expand the total addressable market in the backcountry segment, reflecting the company's strategy to become the acquirer of choice in the outdoor industry [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong consumer demand and raised full fiscal year 2022 guidance to revenue between $2.97 billion to $3 billion, up approximately 35% from the previous year [49][50] - The company anticipates maintaining EBITDA margins of approximately 24% to 24.5% and expects free cash flow for fiscal year 2022 to be between $275 million to $325 million [49][50] Other Important Information - The company announced a new $200 million share repurchase program, reflecting confidence in its brands and future opportunities [19][41] - The company has maintained a low net debt leverage ratio of approximately 1 times, providing financial flexibility for value creation [18][44] Q&A Session Summary Question: Inventory status in ammunition - Management noted that while certain calibers have more stock than a few months ago, overall stocks remain low, indicating a couple of quarters of full production are needed to restock channels [59] Question: Contribution from Foresight and organic performance in Outdoor Products - Foresight exceeded expectations, contributing to overall growth, while organic growth in Outdoor Products was in the low to mid-single digits [63][64] Question: Backlog of orders in ammunition - The backlog remains in the multibillions, indicating sustained demand and high participation rates in hunting and shooting sports [78] Question: Pricing environment and future pricing actions - Pricing has been compressed in certain calibers, but overall pricing remains strong, with the last price increase announced for April [60][75] Question: Growth outlook for recent acquisitions - Recent acquisitions like QuietKat and Foresight are expected to double in size over the next couple of years, contributing significantly to overall growth [88]