VSTO - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the Vista Outdoor Inc.

Third Quarter Fiscal Year 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the call over to Kelly Reisdorf. Please go ahead.

Kelly Reisdorf

you XXXX us earnings thank quarter our and year fiscal call. morning, for for joining third Good With me and this Chief and Executive morning Vanderbrink, is Chris Sudhanshu Jason Senior Metz, Priyadarshi, Vice of President President Chief Officer; Officer; Financial Ammunition. Vista Outdoor,

encourage on I'd under begin, everyone remind Provisions Securities the the based understanding our the our and on press the have to include will you forward-looking Vista uncertainties. best industries Safe uncertainties to the comments estimates factors known to in Act. Vista we us call, vistaoutdoor.com, and of that SEC on I'll turn Chris. information which we Litigation call more that These forward-looking materials review of at also forward-looking release Private making Harbor to With said, our assumptions which measures. several these reconciliation for like statements risks financial a information today's statements reflect Reform statements you, supplements Please and website are that make posted presentation risks and face we our over filings and We today. These we Before and operate. morning during be that these subject Outdoor's today's statements of this Outdoor to note non-GAAP we and

Chris Metz

joining Thank everyone. you, morning, Kelly, us. good you for Thank and

leaders. and going men Outdoor incredibly worked results remarks, And few in through our want years a to We've I days, with so Through our you. I'm position team our start as to and a across prepared industry. through that past the with thankful leaders a delivered our I'm personal women as incredibly and the our appreciative quarter team and our hard to and enable another distinguish it people the to proud immensely business. the I to of us months, happened the grateful be rightful heartache. of has work been past of it. every team. have many contributed results times Much stand results strife its XX has to for facet to outstanding ourselves past reposition share Before part challenging has just all, Vista XX the about thank lot juggling to dedicated of the over take of and behind moment team I'm

excellence and up third marked Our quarter continued up and moves XX% strengthened was strong was future Sales XX% for gross $XXX demand, execution profit balance to million. million, consumer $XXX to by a were strength. sheet, decisive year-over-year

was million. product Our up $XXX million, Shooting XX% Sports segment and XX% to up was $XXX Outdoor year-over-year to segment our

free margin Our XXX Adjusted basis year. $XX flow year-to-date million XX.X%, last was versus EBITDA year. was $X.XX cash is We prior improvement achieved versus $XXX over $X.XX of last million EPS year. a point which the

in million are right half Like for while seasonality has biking, reactivated is whom their many camping date is Additionally, the November ratio In in and encouraging. of camping the pandemic outdoor this slower month quarter during and products. the core million new provide each new people high, hunting demand is XX% users. times. to trip, quarter. remain you, outdoor This taken new products, reactivated third X than recent hunters With which in across notable first powered third our hunters. leverage is license increased with active. shop key winter for and most services end target of golfing, are the saw working many We This due increase the sales more that Consumer capitalize country. weather demand is and experience on more XX% bikes year-over-year. first bike first month, know and social and expectations we people the fueled the now We by still campus. and our analyze able products owners, our know for in heightened distancing more by the XXXX, time were available, the teams level outperformed one practice. the were X the to time demand by that bicycles, XXXX place, to highly limitations are other to taken produced and right the more diverse generally of gun or the outdoors all as XXXX, trips is trips we time we are There bike the These consumer review at a and led in in as below equipment cooking, metrics such core data period

we The the come. return new years outdoor clearly XXXX seen for of to-date. have at have we point, industry as term to levels contributed While performing recognize base improved at to and growth will trends and rate to strongest a long support us will events the growth normalized some we've the our expanded

is or rates, cash company flow of translated and and every near hard sales performance into of work over the we high cash the free conversion. levels at Because nearly purchased now record profits. transformation our past fact, our has operating years, sales historically few profit In efforts of

is delivering on balance sheet statement balanced teams' focus results. both Our and the income

leadership great importance the understands of being stewards capital. of Our team

manufacturer to attractive and position. emphasis helps plan known synergies lead-free a revenue ammunition portfolio for category and strong in cost leverage the waterfowl Hevi-Shot us hunting, which announced Overall, acquired we to Our hunting acquisition enhance provides is a as end, high which an our We tier This volatility. Remington expect brand bullets with recently powerhouse, also iconic Hevi-Shot. results is shotshells and of brand in leading most its of mitigate performing of to acquisition their and $XX provide for an with iconic technical top certainty, high well technology. just and across Ammunition of similar million. is stability Hevi-Shot lead-free products is Hevi-Shot capabilities total will specializing shotshells, and regulatory our market our ahead the of innovation

to expect the to Hevi-Shot and ability earnings under strategy we transition. accretive our months be post to total, Remington, to profitability, XX growth execute. beating underlying given with As market to teams with deliver In in

offerings, versatile ammunition, units Within incredible we've outdoor as look has and triple you ahead, product opportunities acquisition and had digit segment our of loyalty to Chef business products, performed in our brands. bodes While the with outdoor also and in expansion multiple we double-digit the business. each activity cycling Bell should for fueled quarter, the more sidekick grill, cooking of expect and our see Chef This power Giro lifetime growth metrics, attachment. months better outdoor the value growth, and just typical of woodwind positioning growth grilling to Giro consumers as in than future platform. marketplace, well XXXX expand Camp expected in pellet to continue patio had seasonality. strong include the the migrating and to with growth trends face Camp the in for industry, a WiFi, back the Bell quarter continue of another Camp which resulting Chef's its more of customer

resorts. snow related closures business the parts COVID were reduced ski given the As at and capacity our expected down, of related

fully up. expect resorts we open back year back this However, next to as bounce

Wingman holiday nice innovation due the and enjoy what team Bushnell further a sales. expectations been product seen outperform bottom make our European a perfect continues success, and can support Bushnell product. We to case COVID restrictions by have believe bring sales new to market from Our we've continues study map The The the innovation. in was customers the than importantly, more product of golfing Wingman incentive Asian runway at profit is and resulting Wingman every boosted our markets speaker all pricing, and has constrained and phenomenal have a top And fair come Wingman United Golf have as GPS-enabled to both States. to ensuring lines. to

called will Within training front, an brands hunt/shoot than feature you and CamelBak, compared Black X Black than of will both by Cyber new enhanced Peloton demos, telethons year. a sights fantastic the doubled further more we're T-Series share with subscribers. and program This product team’s Peloton. is for a CamelBak ambassadors, hydrea, well the Peloton in powered strong build specialized cycling collaborated into to year. is spring is Bushnell results part This strength assortment leading million marketing launches this Podium were and year new week-long traffic. We've heading with Friday fitness Camelbak strategy bottle new revenue The up traffic revenue that of RXXXX educators the supporting personal custom a a and from world's shipping and excited awareness April brand Cyber brought over event and equipment time innovation one as Hunt/shoot more interactive fit a for On For season. with platform product prior dot with media great great prior companies LXC. program. red and the XXX%, RXXXX, than a partnership were to collaboration education. is Friday the industry's the efforts fitness start the of Monday with the larger brand for create new and more model, to Monday of in together and when e-commerce

quarter third more was revenue channels XX% e-commerce across total, in the For than year-over-year. our up

increases. leading businesses Chef with continued our with brands our Golf the of well performed Camp All Bushnell online, triple-digit and pack

total previously, company discussed business represents we've e-commerce our sales. roughly XX% of As our

continue mortar we traditional to and channel see distribution, no little brick with partnerships. significant cannibalization Importantly, sales this grow of to opportunities our to

of update Now given on transactions. business. time Ammunition Remington Jason and like Hevi-Shot Vanderbrink, now President recent provide Jason? join to the we'd and our about some today I've us talking business an to the spend asked Ammunition

Jason Vanderbrink

CCI, good best now women to to work we Speer, night, and have and representing X,XXX employees who morning, products everyone. our excited of customers. XXXX Federal, here the to the deliver nearly men Chris, and be and day Together Remington I'm Hevi-Shot. Thanks,

heading country are Our military, the international States citizens or partners. to range into the heading the United nation's out law woods across many our who and enforcement,

Home, out Our and practices. have workforce best we competitive the and basis. Oregon is newest on and altered Sweet we we our And other pandemic, a throughout the one promote I'm daily CDC them employees guidelines advantage, practice are honored today. represent Safety to number our including accomplish something in operate to way

haven’t operate most wear social heard we have naturally stations Our spacing. clean a our masks, proper that employees positions basis, regular distance, with all their can are and the while positions on

to recently quarter. control getting the from Target On mentioned, Innovation our innovation. company demand participation quarter consumer increases Magazine. key received Chris the year American life the for consumption. to Ammunition the of blood this the CCI of driving were, is Terminal the Touching results Choice FireStick. the trends, just keeping is We’ve Ascent Now Federal's Rifleman award earned Clean-XX and and product Editor’s in of coveted on and

excited out green and new looking products are new forward in we have scheduled, fiscal a to are many big including the bring we to box and than year. We Remington XXXX, launches better more back. within Heading come XX each brand, product the

Second, XXXX. such the from market. we fiscal XXX with our Contract to major shipments I as ammunition Federal reduced lead This beginning am in was for volumes to has in the increased win in hedged years wins our a halo creates year for this next and saw grants our service just government we sales awarded business, of that served portfolio commercial our quarter employees the for award of training experienced first effect us five FBI This this as and continued share volatility channel. the contract. brands. strength pleased the the

were contract, we in to with of our of increased other fully offset City loss Lake Third, categories. sales the the ammunition impact able

of a two distribute facility agreement call, the on reached mentioned of the City have the our XXX-XXX last portion from Chris operator with new the year of Lake plant. volumes former to As earnings we ammunition

volume. However, sales in hunting historically offset have pistol categories volatile has our than demand decrease growth City centerfire these Demand for the and for been and less XXX in more ammunitions Lake XXX. than

fiscal Remington. are than results This will the profitable total that better future. and expected optimistic of of more the of results more in sales we ammunition contract we City this now the a in integration to Lake has delivered that team excited is And are to the of our are the and leader, will be be schedule, ahead net we where executing able as business induce well expect of as accretive with earnings In and quarter talented start are first are to market early category XXXX. be the the in stable a We quarter, fourth, the loss brand. a

accelerated continued distribution since it Additionally, our last velocity has the outs brands. are commented of are to end many changing. we you backlog, ammunition also have all Since following users stock on of our channels and across demographics fall increase has ammunition last closely. of The across

Our million retain many new than of to possible. users as goal more recruit, these as and is educate X

to increasing engagement to quickly panel, that advertising new in consumer messaging presence in and shooting addition the In and speaks core market have market, hunting our sports. the entrance we added

websites campaign on outreach includes, people outside of traditional. targeting Our the

completion We content view customers has more and websites. are seeing is rate started on video than our driving all with double average, messaging fire prospective which new, proved than has is safety our storage This practices. successful social arms our getting focused are and engagement working. to we fire of the strategy XX%, personal our channels been particularly of on been cleaning on arms back protection, proper ever and stronger The and

for the service look participation pandemic, whole a XX% is ammunition which and to consumption such end strong Overall, gives the better improving and Our great a of this engagement and feedback us us demographic. participation to increase we for new users. excited consumer shooter. giving in Throughout seen team, our at trends, adventure to product are for and is exciting all stockpiling what offerings, keep panel the new in been behavior to important see insights an a our new most the demand we’ve greater us and has

source from fire one-stop consumers. brand hunting reliable vision support We promote enjoyable protection education count of learn arm and more types through use of lock more the in arms their personal gives shooters that can informative to a child all everything truly and which and lifetime safe each and journey into partnerships Our safe, so safety they our to ammunition, material to shooting for about the sports. on fire safety We on for of our hands space of marketing. be project be shop of is our a one to the and of

educational the We with and share best channels of And will media safe bring recently more have old and and social practices new with and partnered tutorials, website, promote populated platforms Education are which alike. our Association web to use for to hunters safety material branded Hunters International modernize the products. to content and the our education

paper the effective, all ranges. hunt. at is XXX% shoot now with they've This shotshell and plastic industry while loads team sustainability deserves plastic, Finally, super of complementing recognized this Federal Together, us work that adds and wad. with the the alternative support who be Federal leading sustainable which performance cut shooters shot, a A at at historical products that the sustainable more various required time business biodegradable for setting cost a new standards lives also our more product feature to to offerings, improve line line are to same our of conservation our introduced the to ethic done within target the these through while conversion wad steel of costs new that replaced materials. wad. shot, for to tungsten wad just cardboard includes business shot,

use lead line. prefer of other believe also the raw world We leads are for in ammunition industry business industry non-toxic your Thank for Outdoor. or offerings today lead broad and ammunition your our the and end required, ammunition interest Sudhanshu? you for if the to use and shooters in Our natural and good If is recycled our business Vista materials. innovation for they our for the bottom the our time user.

Sudhanshu Priyadarshi

and attributes cash. proven currently and beginning and to management of in during strength. the Thanks, levels via gain create Vista value brands, price to large term debt surge has position Outdoor enabled a reach morning, Jason, and reduce cost of new as our company and the the Outdoor Growth share, long This product further good market, to Vista such strength buying is everyone. ability the factors as initiatives. power, build is influence overlay growing such leading dynamic control, within foundational compelling and mix, of

organic fuel growth. term to long for Our provide remains continued investments our internal as, first, financial strategy focus

a strategic supportive efficient, acquisition Second, conservative and capital balance is and of approach opportunities. tuck-in sheet management, third, allocation that

Chris few but through already, I'm context like to P&L few the a the on a covered to as discuss I'd go not key whole Let's points areas. quarter. from going provide

reported prior focused across of in XX% $X My profit comments efficiencies the you improvements reflect nearly million gross both and XX% provided results from $XXX increases of slides. press and all as million on quarter nearly have in We expense in XX% release third year. mix, pricing, our today results. the adjusted adjusted quarter. to margin brands. our third overall to increased EBITDA basis with Year-over-year was points down in XXX the Interest for and

behind in adjusted a Key of the was statute of million, were expenses. of in improved EPS reflecting adjusted the non-lethal drivers income with cost quarter to compared The of difference both channel of business, prior due transaction and sale was $X.XX EPS adjusted growth benefit The $XXX,XXX tax new allowance the Adjusted in product of from the our prior the resulting quarter. tax expiration. tax compared $XX valuation and of volume, margin benefit the a training on M&A release segments, and X%, related Third adjusted uncertain e-commerce gain in EPS net was GAAP gross of with from of and million is expense saving initiatives. EPS benefits rate an our positions $X.XX $X tax year a limited year. $X.XX, between result $X.XX strength

like has million demand, driven in working and to COVID-related supply and $XXX strong by collections cash due the sheet year-to-date. free performance due been overall in quarter, somewhat an market channel, a inventory $XXX had primarily this delivering disruptions. balance demand million Our capital strengthened in We reduction chain flow offset good to by

had X.X with our presentation. ratio times. net our our loan compared in million balance outstanding of the third was year quarter. XX improved of million the the end debt, The in leverage Page approximately $XXX to in million, quarter $XXX of average we the At quarter, Turning ABL prior $XX and

to stronger, continues strength keep continue sheet get we to range our we past leverage ample fund to It two and us we term Staying roughly target our one grow prudent to room now few quarters, liquidity the two balance in can investment leaves Our derisk these that of leverage balance outside to growth. Based have on the of our believe, M&A. ratio lower to is a at to plenty one times ratio sheet. and we times. internal through long

record or also ensuring slow a through as have we points grow while demand Going that down flexibility and headwinds forward, in investments some safeguard market we at the emerge, internal should all cash the to M&A cycle.

As a sequentially. reminder, are a we step is historically seasonal quarter in now down what

comps to record high year-over-year be fueled soon will And pandemic compared quarters.

As more by compete vaccine consumer’s pandemic. that available, entertainment widely for of becomes the share been increasingly has travel we sector with the restricted and will wallet,

at the temptation this of So to hunt/shoot is it recorded results, the moderate. generation to pace up to more our growth and prior sales Of point We business our XX% up or year shootings prudent million On $XXX increase our third sales put our cash resist was from use. cash business XX% was leverage and could segments to sports believe the XX%. of ammunition quarter. aggressive this, quarter up

were accessories. for to pistol hunting see strong and rifle and ammunition. We ammunition continue The ammunition shooting categories demand strongest

in We and as also overall and participation channels, remains mortar both trends strong. saw online brick

improvement XXXX profit basis point quarter with strength the price. quarter. XX%, drove is and XXX% $XXX mix the compared prior profit more from Gross quarter when quarter. than year to the up rate gross prior was dollar Third for year million, was improvement Commercial which

efficiencies. the XXX% nothing up EBIT was more growth points. improvements XXX the outstanding. basis from again saw improved rate were year, operating of improvement prior and by and over also We quarter short than e-commerce the in resulting Dollars

other to products. Turning

year. XXX% e-commerce basis increased to up year. exceptional profit million point. were Third prior increase over rate X% by year. in resurgence XX% the The improved over We EBIT XX% to outdoor margin saw performance segment brands. from the Gross XX% activities in prior across year-over-year $XXX continued quarter all delivered Gross just EBIT the XXX and the from margin sales $XX prior the demand from was million profit up and

providing fourth Turning to for we our outlook. quarter. guidance our Today, are fiscal

as strength offset we e-commerce to by show Our charges. trends remains higher the higher in possibility influenced key prior by shooting expenditure your rate a continued of largely full Also leave winter, lower sports people from modeling be lastly, retail chain year year-on-year accelerated our reflecting for anticipate conduct ammunition, to are than purposes, of and assumptions that to shopping. tariffs, investment We less anticipate capital be we margin headwind well expect overall somewhat demand. the vaccination, prompting more annual than Remington possible year, demand risk And uninterrupted of the XX% a freight seasonally commodity and of the commercial pressures quarter supply with products, closer, home to e-commerce operations. other pricing spend to roughly as in growth continue,

be than the We expect annualized less prior to interest significantly expense year.

Our tax rate for is be expected the in fourth high-teens. the to quarter

we leverage one stay to And expect follows. last year Therefore, flow cash free flow, quarter. at quarter We is of be into includes year. fiscal fourth to as quarter which or ratio the the better expect our guidance, Hevi-Shot results Remington quarter than and cash below XXXX fourth given fourth time visibility our in fourth

fiscal strengthen earnings provide ability a intend we continues flow fiscal balance growth in in quarterly $X.XX expect sales Hevi-Shot of through a right thoughtful million mid from innovation free in plus summary, roughly to run $XX and deliver success. the pipeline, sales our million per our our to while roughly fiscal guidance to our in share enables calendar and million discipline, expect and million combined. next aligned brands range $XX We profit year of year, building of describe range We to formula the long in rate be approximately revenue May. between million and Hevi-Shot on tuck-in to and and includes term within reach Remington $XXX in and Fourth more This in generated our In accelerate $XX Remington transition. fiscal fulsome XXXX. expect XXXX in growth growth quarter post businesses to sales XXXX, accretive $XXX balance outlook invest sheet, Hevi-Shot XX positioning the of year earnings In by for to and months the excellence, centers to acquisitions. cash of $X.XX.

goals. segments share We bond bring two a recreation who of in have together these and right achieve common well-known passionate the We business outdoor model end brands, users, expanding to to belief great products, you, where and take might their no live, everyone. be. or will new policies, to ready matter users, now they we background And Thank your and what questions. open the lines

Operator

Instructions] [Operator right. All

a [Operator have Instructions] All question James take from your and ahead We'll right. We Hardiman. go question.

James Hardiman

hear you me? Can

Chris Metz

can James, hear now. Hey, we fine you just

James Hardiman

Okay. Great.

So sort just clarification. bit question a maybe of a of and little then

accelerated. that there was the mix XXXX numbers a that pandemic, growth XXXX sort the I appears been we've think off. case. unrest The of the seen social would to So in shooting and have The was like going look cool sports. lot the assumption of we contribute out get to they obviously, opposite into really Obviously, on would things of

list talk So maybe down the legislation fest of the you've a Even it seems space. for you pretty time the sort both seen for through whatever priority. of of what first democrats though with legislative it since Obviously, terms big beginning the the a far holding with of while, us the deal year. like of power can this seems in

seems a of just from When to any you've that financial way start? there impact what So through did us sort seen like And big size deal. talk a contracts FBI perspective? Is then that maybe year-to-date? the

Chris Metz

Yes, so a James, question. certainly good

think general seen. was the Previous day, with second of previous home, let's surge. get or year ammunition business events up, week, we last amendment issues. was that a through And month we saw political spring tentacle completely was pent COVID than certainly that surrounded through we've And of go starting what work looking then referencing into for activities. I Then civil fall as And for And saw you're from moved mentioned any type script, here as a hunting surges something and we of large see we our season, XXXX this different, hunting little things political of from shooting election. self-sufficiency the Then as and recent a seen at political to And, bit didn't protection. demand. contributing up record some looking folks my a licenses of were went moved lot it certainly run And in all XX%, different, maybe of the any every we And a impact the ammunition And surge legislative that that personal our when different helped every is had up saw the unrest. a we XXXX. we've remarkable calendar the numbers. outdoors what emanated from business. every for year made remarkably, on we into

only what in down think saw not in I So has it's in or we XXXX summary James, slowed evaded, actually increase demand.

effect approach year quarter. we the don't forward. we carrying here the frankly, have foreseeable highest demand look frankly But, saw we it's on ball forward products that that So calendar the future, XXXX. clear. end as crystal in momentum the continuing demand some of and levels continues to perfectly be second into that’s seen also this continue months of on of strong. a the see We've can we the quarter the And that third business, you because on we for our knock robustness outdoor see the feel the And,

rounds for our let we And relates But for FBI a know could for they how have team. upon long Jason necessarily we and securing And as contract it that exceed this. going to potential a our comment kudos add the impact they team is you the real, here, to it on whenever many him that Jason necessarily and contract? know, some term contract, size the as real as you don't the coup number, to shoot. color But depending of really, to FBI I'm fortunately, because Now this. it,

Jason Vanderbrink

in contract, one On James. quarter fiscal of Thanks, that start deliveries we Yes. to XXXX. expect

the As Chris halo there's up gives especially such effect a about we do you nice prestigious is size not with when because What's contract win bureau. certainly mentioned, this a that it us unknowns. contract lots of contract,

our So new have we for that up that some FBI, product revenue [indiscernible] to on the with we we'll size expect business sales that side. units, contract the want delivered the

James Hardiman

color, Okay. the Thanks I for appreciate guys. it.

Chris Metz

Thank Sure, you. James.

Operator

is right The Khanna question Instructions] [Operator from with next Gautam Company. All Cowen and

Daniel Flick

This on Gautam. the question. is Dan for for Thanks

curious pricing. we ammo So on were

can at level. we're capture? that So how do a works retail lot with prices of obviously work level kind pricing much Thanks. customers? benefit contracted like, be any or detail how to Is But helpful? would of some Just two? of kind you of the agreements provide is And Vista or spot your it increased that able wondering like that mixture relationship how the into of that

Chris Metz

Yes. Sure, Dan.

that answer you. me Let for

a So many increase every then have factor continually looking And of seen. has and have to over given the increase is of costs corrugated what at in is last price as seeing are the And it time flat raw need think ammo primary seeing that us we And us have is, what we an at on we And factor is input absorb. side looking the the copper, market tape is to conditions appropriate input the we increase things. we're see. be we all it in or in pricing seen out our we’re dramatic what facilities. in American we be corporation freight XX as days it running materials, be you, lead, circumstance our

And so thinking relates it pricing. that our as all goes to into

a to contributes and in pricing, of that chain value Now sharing it’s terms everybody. the

just very environment, our healthy, a our demand. just and supply this in our as are customers basic as by distributors, and well, very groups from our buying financial standpoint so dealers are healthy And evidenced

results we can what we’re relates So, how we pricing to it our we highs, And pressure we all-time continued And you as that with are we that necessarily profitability up constantly because need fair and is is. pressure. shared, the the see sure the there, posted, in be we don’t size that, that evaluating at we in but to see way see pricing marketplace. making are the is

and peoples and careful, of to passions and that we very hobbies supply a So we’re lot have self-defense know you. products we because their what their

is try to possibly that at as level fair can as keep we So it. a pricing make we

market, commercial it is is pricing but have locked-in. we base, military, do the goes not the law majority contract contracts Now, our with that with with enforcement, of

Operator

with We’ll the Scott question next Stember take Okay. CL King. from

Scott Stember

maybe guess my Thanks you levels? speaks up before success. Maybe that after of general talk usage not growth sustainability maybe how Again is James' of just maybe I guess the the demand from a on for past about, then to morning. questions. bit little could continued how Thank talk Good bit. positive field And and And your And us on up different things products these that really can rate, So going about congrats but if a how a I the taking more Peloton just the at just size little question that forward. you. for sustain CamelBak about at the surges? [ph]. following

Chris Metz

Sure, Scott.

on with conditions iconic now So super let the team. you win the typically a and one super, brands CamelBak CamelBak sustainability, address the Peloton for share the talk of Jason to have CamelBak great the a our and in what We the terms brands CamelBak that one But, contract. relationship. the it in the Peloton space don’t Peloton the me two and EMO first takes you add on can of recreational space [ph] And about as together. outdoor in It appreciate the and But confidential marries contracts. let and so it. is is

brings on have we very what it's surge that I again about probably So to we’re question, mean base James' to really, [Indiscernible], what this us. alluded just it And I seen. the fact the really very, different. is excited broadest

XXX, So fire loads, hunting calibers, rifle, hunting loads, XXX long just its it's not self-defense, center its waterfowl. X millimeter its

board, the categories mentioned they lot across You what of and are users, it which have million X first new a it enjoying have And we women you time. sports seen are every people surge. it’s shooting the call into of a has one name the for and getting

it broad anything that So see? Jason, And based. you else is very

Jason Vanderbrink

that than that that think continue. Thanks, We isn’t Chris Scott. as just a for range up whether today, is shooting. extremely base an I hope we surges. mentioned, to and it it you would would be venture busy recreational XX%. continues sales were go add Hunting previous broader it to I will

to good, the previous So years, of it’s tied we previous have for surge or good much that’s two as manufacturing which surges product. calibers seen one one because broader in is a were, some not than is

especially So everything market. a our broad performance and the of fit, on side ammunition doing that right seems categories, where have personal well we be base for to share brands now defense across nice hunting

win-win for So it's a whole for a as us and the of for industry the longevity it.

Scott Stember

Thank it. you. Got

Operator

Matt The with Capital. Roth question All next right. from Koranda is

Matt Koranda

Hey, for guys, question. thanks the taking

how it And the expected quarter this you faster be ramp? if you And of little quarter. you what accretive the could it Maybe, I mentioned, know as we on that guys year. contributed in bit cover cover to terms fiscal helpful? Remington enabled first be said if a could. Just ramp soon as than faster much a wanted Remington would Jason, revenue this may detail of coming I the quarter that then think contributed to

you accretive? understand just the So of should we about Remington And EBIT year? the middle accretive or that the next that is earnings get margin think wanted margin as to contribution year, how fully ramped

Chris Metz

Jason thing progressed is acquisitions. right We'll I have job his of address because that done and the much question. been. than in us, think let how and business Good differently we integrating he with of stages a previous what And this has remarkable our early it's have team Jason's wheelhouse, much, in for

So Jason?

Jason Vanderbrink

up the the Matt, remarks on ramp let expectations itself, accretive But is about well. integration going obviously, we exceed quarter. on talk our it. on the I'll did the Sudhanshu for the plan

in team hundreds hire challenges. a done people, imagine you But the has can schedule workforce integration we at when year our to remarkable. the and of plan above fiscal have go Lonoke, The this As to same rest and for And is expect the Arkansas ramp has people and fighting its material it hundreds 'XX. time job. outages, of plan of you our raw train fantastic in up

Sudhanshu Priyadarshi

sales We million year basically it's we Hevi-Shot. in And we $XX seeing roughly plus million on Remington that, talked we doubling did about and rate. And run $XX are million point we go after QX in think will fiscal $XX with QX, and it. Matt we the about by mid

working in team QX it. Jason's be it very earning well we So the really, this deal. us. really way for are is And it's And about leading excited will accretive

Matt Koranda

follow-up if could one Great. here. I if I ask could And

in the you're a us Just terms midpoint, carrier modeling more some you you earnings in if and headwinds quantify per guidance, in Could based expecting bit at fourth help that maybe of the guidance freight in. quarter the at guys But $X.XX a what mentioned question. all? share with you're factoring

Chris Metz

product impacted talked quarter of even going and suggest next folks to time. the something go the continue our going that anticipate big, but you And go the lot its some don't it mentioned, freight, that we all that peers we've to we abate. one-time position. point about typically EPS we're I my about costs sure rates container other quarter tariffs, got costs and on as freight It's on one we source talk is that commodities, shortages, some I we're be as a at we different increase smart certainly out and tariffs, we're expect got up. going the to itself and some we've on we a which our that a as I go into is that work But the frankly, Matt, where not that businesses water, every which suppliers forward. We've size being first will the companies thing And getting talked containers, our input that of year. into have. seen negotiating fiscal mean, But I in a stuff of to increases to has events, going in So product also factored is in may through didn't to input on model it's day, negative the couple in various of of effect the the is, about make

Matt Koranda

helpful. Okay. Great. Thanks. Very

Operator

The Capital right. All Management. with Smith Mark from question next is Street Lake

Mark Smith

Hi, guys.

up you wanted that e-commerce seen talk backlog And your to through about with about Can business. or e-com e-commerce channel? how and in that, you then quantify can e-com much of the of as is made growth how can through ask maybe Just in of or you ammo? ammunition and it the ammunition also talk that fulfill applies backlog about and that much to maybe us walk you've for even

Chris Metz

morning, good this of questions. I'll So is Mark. Chris, those a And take couple

and business. e-com, had So because of all our we previous in made retail to was quarters fair choice share. it actual our slowed their partners the got versus And down retail we that ammunition ensure

purchases boxes. have two cases And so, Jason limited and his to team in many

we'll so the to made decision forward. we that evaluate as So hard on-purpose And can the but fill we dealers in we who customers continue working support more are our our to and go to know sell demand. we e-com,

to the number influence general size prepared to of Now, time. last are a did surge of We that. alluded demand it people the and gave indication to continue Because there's backlog, just remarks And an that to do impact we time don't at last I backlog. give as that seeing. in the we a quarter, my of it factors we intend that

that, to our would all own seen e-commerce. as of demand, we've of I've but only lead say it's a to safe so to of which our a And strengthening distribution, backlog channels alluded not demand across continued, earlier, the has the including

Mark Smith

you. thank Okay,

Chris Metz

Yes. Thanks, Mark.

Operator

Sundby from William next right. question Blair. Ryan with All And is the

Ryan Sundby

for flex two questions. taking on you target Sure. a you'd your is if to then could a willing background be down? my that. way times. you it less for I'm quarter. Hey, more to fee the Maybe And deal right one And the thanks Thank little see against, the that trying just and morning. good you. if to back the work of understand on long off congrats And lower term average talk rationale about bit the ratio

Sudhanshu Priyadarshi

Sudhanshu. is this Ryan,

gives that kind it and are earning that's cash the in we company in terms prepared be to more mentioned industry. And believe that conservative balance the management. flexibility And we want internally believe to sheet in for of I the we the still We of As us we will cyclical two balance my to good flow long sheet enough to tuck-in management. acquisitions. times, term generate one invest do for remarks,

Ryan Sundby

the Would of Or two you [Indiscernible]? be times right deal is that willing a kind the if that comes well along? above

Sudhanshu Priyadarshi

to to one is do gives believe two And accretive will flexibility deals, enough right guidance we us. us to long-term our type now, right of which that times. So the be

Chris Metz

Ryan underlying that. add to points Sudhanshu nature of our business. couple cyclicality So let a me the

even a is years And run to situation risk got that so what ago. few capital back we remote want get into we a that we do into the don't leverage

So that. we're of very mindful

However, a are multiples that to of right side. now. M&A we're we're opportunities the everyone high on being knows, lot seeing seeing opportunities growth. as And said, But increasing drive organic

we you as So activity about out know, the M&A there, potential excited good to want stewards much we're capital. really as of be

that the that see what now, and we demonstrating, we are opportunities one we do. with we stay to like and everything at that need times we're our projections feel and can what within to are where we generation looking so cash feel And two do we

Ryan Sundby

color. the Thanks Perfect. for

Operator

question All the B. from Wold next right, Eric Riley. and is with

Eric Wold

you. morning. Thank Good

range million to what price or on going the an the landscape we range? questions look one of end So that Hevi-Shot bookend high the kind should that and range? the feel your and is for comfortable to of million you follow for and you of the acquisition get to is Remington Should tuck-in of would of acquisition tuck-in. above $XX moving kind kind goal Or what kind $XX last attractive at that for

Chris Metz

businesses. We So Eric, the you valued value as they're kind looking of is said, bookends. bit terms of way the we're both, a we in at different and how

and $XX to looked saw centers play of attractive excellence are way. it have the them set and at both the prices million, that make out million, $XX accretive. get once we them We So didn't great leverage independently we building, synergies to that in we to very opportunities at

size, ourselves fine a in in if meet absolutely sizes they vary we’re we boxed criteria, our to and, need not into with purposely they So, come that. because

resources. small we’re look has it and of at We going look everything to a say, Now had it's really, off at precious acquisitions. fair to opportunity as They at really look I costs. think our an lot teams it taken

take those bookends, So, we independently. everything don’t please as look at

Eric Wold

And quarter. don’t want I, on it. if any simple, backlog I comment then to Got you know just

you you the kind capacity can share on quarter have What see be MO how think gets gotten next is now of right you quarter. in capacity to improved last taking as what total to maybe you’re going get just the to And acquisition your Hevi-Shot? from company. that over initially those months you of in manufacturing manufacturing account? could now? and added integrating further Remington kind approximate do So into this What anything months XX from the XX annual And annualized what

Chris Metz

Yes.

exact certainly size. we capacity we but the the want it. Eric, look mindful within total industry, at We So to be of don’t the know

in working put as understand is We’re best outside can we adding What how capacity in, is surges previous we’re was without organization being to that with because added. where our there’s adding the doing to different sources capacity a and to smartly lot industry. capacity

Lake of One our key similar I the competitors done front. on something City think has

the where of rationale. keep capacity those and smart stronger I to manner the market smart, one adding a it's getting stronger in think things So

we of we dedicated to I sudden, all internally, better. that be in can serve more can mix the more think runs, efficient, allows reduce can us consumer get a we can we SKUs, a looking way how

Eric Wold

not talking Chris, that. I am about capacity. industry to there Sorry, just here get capacity the

Chris Metz

Yes.

flat is now, So you right doing running as what out. Eric, see us

Remington am to. that that’s you I we provides a into referring good gives now. window sit Hevi-Shot upside great more capacity, where think what us. provides I for

capacity our some we feel really got information you you’ve where a good think I So, that that gives share that, for lies.

Eric Wold

guys. Thanks, Thanks, Chris.

Chris Metz

Eric. Thanks,

Operator

next right. And from Brian All DiRubbio question Baird. with the is

Brian DiRubbio

morning. Good

on inflation Are quick that costs doing anything [Indiscernible]. raw material hedge to Chris, the inflation. over you Just year-end once

Chris Metz

and think it's XX Yes. months But XX a smart us bit. like certainly is to hedge locking the the will helped the that Hey, hedging rates I and we about the help us Brian, rates very last upon we’re bid. spot a current when look over a bit, or based to something into we talked in feel at continue past careful it the we about spots, have not

our and continue bankers Sudhanshu, them we team look jumping spot team, excited locking at with, don’t we’re we we you are smart. see do very, think work now, positions, that Sudhanshu, all about into our hedge holistically. add that? Andy rates we not that What and team his at whole know it at and the so look we with frankly in highs, to So to want and Keegan you to Jason advisors along anything who and outside very evaluate

Sudhanshu Priyadarshi

is top watching the feel This type will priority it, of the get do we keep we advice. and thing No, that right we our Chris. different as we

Brian DiRubbio

Great. Maybe just one last one.

how base ammunition the you the in the landscape, of current of consolidated talk in can can in given imports terms versus here competitive environment you the a If sort just changes U.S.? competition, the is about

Chris Metz

is -- Yes. it’s The competitive industry. a landscape competitive

is see many you see lot You that continue on too grow and you're we want different going Because landscape can't outstripping in as initially. initiatives, work this they get changing see with Jason respects good competitors have got to to we consumers surges a much, think, supply in I as of demand imports well. the the where don’t brands

Jason Vanderbrink

Yes, not us I think a shows imports customers surge when up, manufacturer. domestic that history times prefer more much of surge a there's come our

brands seat us puts recently. we've it the good that with So in acquired a

Brian DiRubbio

the Great. I appreciate thoughts.

Operator

from [Operator Instructions] Monness, another Crespi, in All just right, Jim get Hardt. we question Chartier and did with

Jim Chartier

more training so it workforce rest of the and taking in I margins function factor business volume was Remington question. wondering all talk morning. business? recently? on you for if of sales could should get to EBITDA of bottom on existing your a where of kind my there, there sales with Jason, that Can the get was you Thanks is the to. And what for think get Thanks. just just they par about could Good

Chris Metz

making now where and from in we highest take and in facility a a we're right business, Jim, herculean the at Remington at demand look the efforts produce start to that his So Jason when cold team are level. a environment

labor So but front, terrific, have they're to which sure are that trained. the wants folks, on retrain front. material us, that challenges on we've coming back and got to area furlough And we've everybody is in and got off for train come we that challenges the cross work make folks

get say the doubling in middle fiscal of as ensuing in quarters the prepared again next year. which almost we kind to the his doubling we're Sudhanshu So of remarks quarter, business this is

Federal be That's beyond look had far business, would Remington there's at out not look will and that rates no reason that. rates. and XX margin can't we've so seem it at we the look this you everything Speer we challenges at be it when way the as at CCI that, But So why Federal, next months. support

Jim Chartier

then products And order planned the retailers you spring the that of business like? book talk business about what looks how And for next can outdoor Great. of for have kind just year?

Chris Metz

what a there's the outdoor seen the exciting. but continuing. they outdoors factors products COVID we again, same Yes, surprising see people business we've think are of it, be. have I seen rates, for I as again, now, is is we not people see as equally And in We've demand from rediscovered demand, the mean, continue. right could vaccination they're some number fast surge

all trends that so, we've see And see we to the continued continuing.

areas much didn't Giro about e-bikes A see on coming of of people a but like demand we stuff stream. to in go than U.S. very that restaurants, we're we've excited struggling and outdoors, frankly, reticent brands continuing, world the are is. cooking more are that, still people our to footholds are Bushnell the into about. riding which and We United So bikes, are lot Bell their that bit people talk outside Camelback, good have States got the and factors

there. to We pent recover ski And we as also know open there. up expect that up. our demand is it's so related And businesses mountains

for prosper the have a like recreation in innovative think tend time times and I I really most those business are mean to it's good So and folks in outdoor who brands yes, good this.

Jim Chartier

Thanks, luck. best of and

Operator

there further at no appear this to right, All time. and be questions

Chris Metz

thank We your forward you in with you XX today. chatting Thank for days. another you, operator, and time to everybody look

Operator

you This participation. your for concludes today's Thank call.

disconnect. now may You

Vista Outdoor (GEAR) 4 Feb 212021 Q3 Earnings call transcript