• Revelyst Q4 Sales Up 1.4% Over Prior Year to $332 Million, Returning to Organic Growth For First Time In Nine Quarters; The Kinetic Group Q4 Sales of $362 Million for Total Q4 Sales of $694 Million

• Revelyst Q4 Operating Income Margin Increased 622 Basis Points Year Over Year and Sequentially, Increased 454 Basis Points, While Doubling Adjusted EBITDA Dollars; The Kinetic Group Q4 Operating Income Margin Decreased 422 Basis Points Year Over Year; The Kinetic Group Q4 Adjusted EBITDA of $100 Million

• Strong Q4 Cash Provided by Operating Activities of $161 Million And Adjusted Free Cash Flow of $161 Million, Driven Largely by Sequential Inventory Reduction of $45 Million, a 6.8% Decrease; Total Debt Decreased $115 Million Sequentially to $720 Million With a Net Debt Leverage Ratio of 1.5x

• Positive Fiscal Year 2025 Outlook: Expect FY25 Sales of $2.665 Billion to $2.775 Billion, Expect Adjusted EBITDA in the Range of $410 Million to $490 Million, Despite Uncertain Macroeconomic Backdrop; Remain Confident In Revelyst's Path to Double Standalone Adjusted EBITDA In FY25¹

• Revelyst Continues to Build Momentum With GEAR Up Transformation Program; Expect to Drive $100 Million of Run-Rate Cost Savings in FY27; Additional Progress Being Made on Portfolio Optimization Through Sale of RCBS to Hodgdon Powder

• We Have Made Meaningful Progress on Strategic Options: Stockholder Vote for Sale of The Kinetic Group for $1.91 Billion Scheduled for June 14, 2024; Company in Alternate Discussions with MNC on Proposal to Acquire the Company for $37.50 per Share, has Advised MNC to Increased its Offer Price

Vista Outdoor Inc. (NYSE: VSTO), the parent company of 41 renowned brands that design, manufacture and market sporting and outdoor lifestyle products to consumers around the globe, today reported operating results for the fourth quarter and Fiscal Year 2024 (FY24), which ended on March 31, 2024.

“I am proud of the work our teams at Revelyst and The Kinetic Group have accomplished and our results demonstrate that the strategic direction of Vista Outdoor is the right one,” said Eric Nyman, Co-CEO of Vista Outdoor and CEO of Revelyst. “Across Revelyst, we have undertaken a journey to transform our organization into the leading, global integrated house of brands in the Outdoor industry. Our collective efforts during the fiscal year have enabled us to work through economic uncertainties and challenges, and we have emerged stronger at each step along the way as we transform our business to unlock its full potential. Our GEAR Up transformation strategy has made tremendous progress, providing confidence that our actions will realize $25 to $30 million of run-rate cost savings in Fiscal Year 2025 supporting the potential to double standalone Adjusted EBITDA year-over-year. We are on track for our long-term goal of realizing $100 million of run-rate cost savings in Fiscal Year 2027 from the GEAR Up program.

“We continue to be confident in our ability to receive CFIUS clearance with respect to the CSG transaction, and the Board continues to recommend Vista stockholders vote in favor of the proposal to adopt the merger agreement with CSG,” concluded Nyman.

“The Kinetic Group finished the year strong, achieving our financial guidance and delivering quality EBITDA margins in the high-twenties,” said Jason Vanderbrink Co-CEO of Vista Outdoor and CEO of The Kinetic Group. “We have a strong order position going into the new fiscal year and there are backlogs in several product categories that strengthen our confidence in delivering on financial expectations. Some challenges remain related to higher commodity input costs, including for powder and copper, but pricing actions taken to offset the increased production costs have not impacted open orders,” concluded Vanderbrink.

Note that in the results below when referring to "Revelyst", it comprises three new operating and reportable segments: Revelyst Adventure Sports, Revelyst Precision Sports Technology and Revelyst Outdoor Performance. Please see Vista Outdoor's Annual Report on Form 10-K to be filed later this month for additional information.

Consolidated results for the three months ended March 31, 2024 versus the three months ended March 31, 2023:

• Sales decreased $47 million to $694 million, down 6.4 percent driven by The Kinetic Group, partially offset by an increase in the Revelyst business.
• Gross profit decreased 6.5 percent to $221 million and gross profit margin was relatively flat at 31.8 percent.
• Operating expenses were $158 million. The lower operating expense is primarily due to lower impairment, restructuring, and selling, general, and administrative expenses related to Revelyst, partially offset by increased contingent consideration and GEAR Up restructuring costs.
• Operating income increased to $63 million. Operating income margin was 9.0%. Adjusted operating income was $85 million, down 9.0 percent. Adjusted operating income margin was relatively flat at 12.2 percent.
• Net income increased to $40 million. Net income margin increased to 5.8 percent.
• Adjusted EBITDA decreased 7.5 percent to $109 million. Adjusted EBITDA margin decreased 20 basis points to 15.7 percent.
• Diluted Earnings per Share (EPS) was $0.69 compared with $(5.18) in the prior year period. Adjusted EPS decreased to $1.02, or down 2.9 percent compared with $1.05 in the prior fiscal year period.

For the three months ended March 31, 2024 versus the three months ended March 31, 2023:

Revelyst

• Sales increased 1.4 percent to $332 million driven by increased volume as a result of new product introductions in Revelyst Precision Sports Technology, partially offset by lower volume in Revelyst Outdoor Performance.
• Gross profit increased to $100 million, up 17.3 percent, driven primarily by increased efficiencies, volume, and price, partially offset by increased discounting.
• Operating income (loss) increased 242.7 percent to $12 million driven by increased gross profit and lower selling, general, and administrative costs. Operating income (loss) margin increased 622 basis points to 3.6 percent.
• Adjusted EBITDA increased 209.5 percent to $29 million. Adjusted EBITDA margin increased 590 basis points to 8.8 percent.

The Kinetic Group

• Sales decreased to $362 million, down 12.5 percent, due to lower volume across nearly all categories and lower pricing.
• Gross profit decreased to $121 million, down 20.7 percent driven by decreased volume and price, unfavorable mix, and increased input costs due to inflation.
• Operating income (loss) decreased 24.8 percent to $94 million due to lower gross profit, partially offset by lower selling, general, and administrative costs. Operating income (loss) margin decreased 422 basis points to 25.9 percent.
• Adjusted EBITDA decreased 23.3 percent to $100 million. Adjusted EBITDA margin decreased 392 basis points to 27.7 percent.

Consolidated results for the twelve months ended March 31, 2024 versus the twelve months ended March 31, 2023:

• Sales decreased 10.8 percent to $2.7 billion and organic sales were $2.6 billion, down 14.5 percent, driven primarily by lower volume at The Kinetic Group and Revelyst.
• Gross profit decreased 16.7 percent to $859 million due to lower volume and price at The Kinetic Group and lower organic volume at Revelyst. These decreases were partially offset by lower discounting at The Kinetic Group and increased volume from inorganic business and efficiencies at Revelyst.
• Operating expenses decreased 12.4 percent driven primarily by lower impairment, selling, general, and administrative expenses related to organic business, restructuring, and transaction costs, partially offset by increased selling, general, and administrative expenses related to inorganic business, contingent consideration, planned separation, and GEAR Up restructuring costs.
• Operating income (loss) declined 53.2 percent to $50 million and operating income (loss) margin decreased 166 basis points to 1.8 percent. Adjusted operating income (loss) was $343 million, down 34.1 percent. Adjusted operating income (loss) margin decreased 441 basis points to 12.5 percent.
• Net income (loss) improved to $(6) million. Net income (loss) margin increased to (0.2) percent
• Adjusted EBITDA declined 27.8 percent to $442 million. Adjusted EBITDA margin decreased 378 basis points to 16.1 percent.
• Diluted EPS was $(0.10), up 41.2 percent, compared with $(0.17) in the prior fiscal year. Adjusted EPS declined to $3.86, or down 38.3 percent, compared with $6.26 in the prior fiscal year.
• Cash provided by operating activities was $401 million, compared to $486 million in the prior fiscal year. Adjusted free cash flow was $432 million.

For the twelve months ended March 31, 2024 versus the twelve months ended March 31, 2023:

Revelyst

• Sales declined 2.2 percent to $1.3 billion and organic sales were $1.2 billion, down 10.7 percent, driven by lower volume, increased discounting, and unfavorable mix in Revelyst Adventure Sports and Revelyst Outdoor Performance.
• Gross profit decreased 3.5 percent to $373 million due largely to lower organic volume, increased discounting, and unfavorable mix, partially offset by volume from inorganic business and increased efficiencies.
• Operating income (loss) declined 54.2 percent to $29 million primarily caused by increased selling, general and administrative costs related to prior year acquisitions and lower gross profit, partially offset by lower selling, general, and administrative costs related to organic business. Operating income (loss) margin decreased 251 basis points to 2.2 percent.
• Adjusted EBITDA decreased 21.5 percent to $98 million. Adjusted EBITDA margin decreased 188 basis points to 7.6 percent.

The Kinetic Group

• Sales decreased 17.4 percent to $1.5 billion, driven by lower volume across nearly all categories as channel inventory has normalized, the termination of the Lake City contract at the beginning of the third fiscal quarter in the prior fiscal year, and lower pricing. These decreases were partially offset by increased shipments and lower discounting.
• Gross profit declined 25.7 percent to $486 million driven primarily by decreased volume and price, unfavorable mix, and increased input costs due to inflation. These decreases were partially offset by lower discounting.
• Operating income (loss) decreased 29.4 percent to $390 million, due to lower gross profit, partially offset by decreased selling costs. Operating income (loss) margin decreased 457 basis points to 26.8 percent.
• Adjusted EBITDA decreased 28.0 percent to $416 million. Adjusted EBITDA margin decreased 422 basis points to 28.6 percent.

Fiscal Year 2025 Outlook

"Fiscal Year 2024 was a transformative year for our company with the signing of a definitive agreement with CSG to sell the Kinetic Group for $1.91 Billion, the hiring of key management at Revelyst and the kick-off of the GEAR Up transformation program all while navigating an uncertain macroeconomic backdrop. Sales for Fiscal Year 2024 were $2.7 billion with Adjusted EBITDA of $442 million," said Andrew Keegan, CFO of Vista Outdoor.

"We remained disciplined during the year and prioritized the health of our balance sheet, driving a $100 million reduction in inventory. Additionally, our robust fourth quarter cash provided by operating activities of $161 million and adjusted free cash flow of $161 million allowed us to pay down $115 million of debt during the quarter and improve our net debt leverage ratio to 1.5x.

"Our Fiscal Year 2025 guidance reflects headwinds that include a global powder shortage, increasing input costs, including for copper and powder, and competitive market pricing at The Kinetic Group pressuring the bottom line during the year. At Revelyst, our guidance takes into consideration our expectation that consumers do not meaningfully change their purchasing patterns due to ongoing economic uncertainties and challenges. Sales guidance also excludes a combined approximately $30 million from the divested RCBS brand and the Fiber Energy brand, which suffered a fire at its main production facility. We expect to double our Revelyst standalone adjusted EBITDA during the year primarily driven by the GEAR Up transformation program, contributions from our previously announced April 2023 cost restructuring program, improvements in supply and freight cost and lower expected promotions as compared to Fiscal Year 2024," concluded Keegan.

Vista Outdoor Establishes Fiscal Year 2025 Financial Guidance

Vista Outdoor has not reconciled adjusted EBITDA guidance (on a segment or consolidated basis) to GAAP net income guidance because Vista Outdoor does not provide guidance for net income, which is a reconciling item between GAAP net income and non-GAAP adjusted EBITDA. Accordingly, a reconciliation to net income is not available without unreasonable effort. A reconciliation of adjusted free cash flow guidance to cash provided by operating activities guidance is available on page nine of this press release.

The Company expects:

• Sales in the range of $2.665 billion to $2.775 billion
  
  – The Kinetic Group Sales expected to be approximately $1.425 billion to $1.475 billion
  
  – Revelyst Sales expected to be approximately $1.240 billion to $1.300 billion
• Adjusted EBITDA in the range of $410 million to $490 million
  
  – The Kinetic Group adjusted EBITDA expected to be approximately $350 million to $400 million
  
  – Revelyst adjusted EBITDA expected to be approximately $130 million to $160 million
• Earnings Per Share (EPS) in the range of $3.60 to $4.50
• Cash provided by operating activities in the range of $280 million to $362 million; adjusted Free Cash Flow in the range of $240 million to $320 million
• Effective tax rate of approximately 25.0 percent
• Interest expense in the range of $30 million to $40 million
• Capital expenditures as a percent of sales of approximately 1.5 percent

Earnings Conference Call Webcast Information

Vista Outdoor will hold an investor conference call to discuss its business operations, Fourth Quarter and Fiscal Year 2024 financial results, and provide an update on its business outlook on May 9, 2024, at 9 a.m. ET. The conference call will be accessible through a live webcast. Interested investors and other individuals can access the webcast and view and/or download the earnings press release, including a reconciliation of non-GAAP financial measures, and the related earnings release presentation slides, which will also include detailed segment information, via Vista Outdoor’s website (www.vistaoutdoor.com). Choose "Investors" then "Events and Presentations". For those who cannot participate in the live webcast, a telephone recording of the conference call will be available until June 8, 2024. The telephone number is (866) 813-9403 and the access code is 695314.

Non-GAAP Financial Measures

Non-GAAP financial measures such as adjusted EBITDA, adjusted EBITDA margin, adjusted operating income, adjusted operating income margin, adjusted EPS, adjusted free cash flow, net debt and net debt leverage ratio as included in this press release are supplemental measures that are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures should be considered in addition to, and not as substitutes for, GAAP measures. Please see the tables below for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

Beginning with the second quarter of fiscal year 2024, we modified our presentation of non-GAAP results and no longer exclude from adjusted results expenses related to retention payments in connection with our acquisitions. These specified expenses that were previously excluded from adjusted results under the line items of transition costs, planned separation costs, and post-acquisition compensation are included in “operating expenses” in our as reported results. The Company made these changes to its presentation of non-GAAP financial measures following comments from, and discussions with, staff members of the U.S. Securities and Exchange Commission (the “SEC”). Prior period adjusted results have been revised for comparability. Revised adjusted EPS includes the negative impact of this change of approximately $0.03 and $0.14 for the three and twelve months ending March 31, 2023. The revised presentation of the reconciliation to previously reported adjusted EPS, and the revised reconciliation to adjusted results for the three and twelve months ended March 31, 2023, is reported below.

Reconciliation of Non-GAAP and Supplemental Financial Measures

In addition to the results prepared in accordance with GAAP, we are providing the information below on a non-GAAP basis, including, adjusted gross profit, adjusted operating expenses, adjusted operating income (loss), adjusted other operating income margin, adjusted interest expense, adjusted taxes, adjusted tax rate, adjusted net income, and adjusted diluted earnings (loss) per share (EPS). Vista Outdoor defines these measures as gross profit, operating expenses, operating income (loss), operating income margin, other income (expense), net, interest expense, taxes, tax rate, net income (loss), and EPS excluding, where applicable, the impact of costs incurred for inventory step-up, transaction and transition costs, executive transition costs, planned separation costs, impairment, restructuring, GEAR Up restructuring, post-acquisition compensation, contingent consideration, debt extinguishment and debt acquisition costs. Vista Outdoor management is presenting these measures so a reader may compare gross profit, operating expenses, operating income (loss), operating income margin, interest expense, taxes, tax rate, net income (loss), and EPS excluding these items, as the measures provide investors with an important perspective on the operating results of the Company. Vista Outdoor management uses these measurements internally to assess business performance, and Vista Outdoor’s definitions may differ from those used by other companies.

During the three months and fiscal year ended March 31, 2024, we incurred costs that we feel are not indicative of ongoing operations as follows:

• post-acquisition compensation expense related to the Stone Glacier acquisition;
• transaction costs associated with possible and actual transactions, including advisor and legal fees and other costs;
• transition costs for prior acquisitions to integrate into the Company such as professional fees and travel costs;
• executive transition costs for executive search fees and related costs for the transition of our CEO and General Counsel executives;
• costs associated with the planned separation of our Revelyst and The Kinetic Group businesses into two separate companies, including restructuring, and advisory and legal fees;
• impairment expense related to goodwill, indefinite-lived, amortizing intangibles, and long-lived assets;
• restructuring costs related to an over $50 million cost reduction and earnings improvement program, announced during our fourth fiscal quarter of 2023, which includes severance and asset impairments related to product line reassessments, office closures, and headcount reductions across our brands and corporate teams;
• restructuring costs related to our GEAR Up transformation Program, including severance costs and asset impairments related to location closures;
• change in the estimated fair value of the contingent consideration payable related to our acquisitions; and
• costs incurred to write off unamortized debt issuance costs related to our term loan that was paid off during the fourth fiscal quarter.

During the three months ended March 31, 2024, our reported tax (expense) benefit of $(7,143) results in a tax rate of 15.1 percent and our adjusted tax (expense) benefit of $(12,193) results in an adjusted tax rate of 16.9 percent.

During the full year ended March 31, 2024, our reported tax (expense) benefit of $8,979 results in a tax rate of 62.0 percent and our adjusted tax (expense) benefit of $(55,050) results in an adjusted tax rate of 19.6 percent.

During the three months and fiscal year ended March 31, 2023, we incurred costs that we feel are not indicative of ongoing operations as follows:

• inventory step-up costs associated with our acquisitions of Fox and Simms, expensed over their inventory cycles;
• transaction costs associated with possible and actual transactions, including advisor and legal fees and other costs;
• transition costs for prior acquisitions to integrate into the Company such as professional fees and travel costs;
• executive transition costs for severance, executive search fees and related costs for the transition of our CEO and General Counsel executives, who departed the Company during our fourth quarter;
• costs associated with the planned separation of our Revelyst and The Kinetic Group businesses into two separate companies, including restructuring, severance and advisory and legal fees;
• impairment expense related to goodwill and indefinite-lived intangibles;
• restructuring costs related to an over $50 million cost reduction and earnings improvement program, announced during our fourth fiscal quarter of 2023, which includes severance and asset impairments related to product line reassessments, office closures, and headcount reductions across our brands and corporate teams;
• change in the estimated fair value of the contingent consideration payable related to our acquisitions; and
• costs incurred to write off unamortized debt issuance costs related to our 2021 ABL Revolving Credit Facility refinance.

During the three months ended March 31, 2023, our reported tax (expense) benefit of $17,464 results in a tax rate of 5.6 percent and our adjusted tax (expense) benefit of $(12,409) results in an adjusted tax rate of 16.8 percent.

During the full year ended March 31, 2023, our reported tax (expense) benefit of $(60,380) results in a tax rate of 119.2 percent and our adjusted tax (expense) benefit of $(100,595) results in an adjusted tax rate of 21.7 percent.

Free Cash Flow

Free cash flow is defined as cash provided by operating activities less capital expenditures. Vista Outdoor management believes that free cash flow provides investors with an important indication of the cash generated by our business for debt repayment, share repurchases and acquisitions after making the capital investments required to support ongoing business operations. Vista Outdoor management uses free cash flow to assess overall liquidity. Vista Outdoor’s definition of free cash flow may differ from those used by other companies.

Adjusted free cash flow is defined as free cash flow eliminating the cash impact of the following items that are adjusted in our presentation of adjusted net income: transaction costs, transition costs, planned separation costs, post-acquisition compensation, restructuring, GEAR Up restructuring, and executive transition costs. Vista Outdoor management believes that adjusted free cash flow enhances investors’ understanding of the liquidity of our ongoing operations. Adjusted free cash flow is also used by Vista Outdoor to assess employees’ performance and determine their annual incentive payments. Vista Outdoor’s definition of adjusted free cash flow may differ from those used by other companies. During the fourth quarter of fiscal year 2023, we modified our definition of adjusted free cash flow to no longer adjust for applicable tax amounts. Beginning with the second quarter of fiscal year 2024, we modified our presentation of non-GAAP results and no longer exclude from adjusted free cash flow, cash payments related to retention payments in connection with our acquisitions, restructurings, and planned separation. All periods presented have been adjusted for this modification.

Organic Sales Reconciliation

Organic sales is a non-GAAP measure of sales growth excluding the material impacts of acquisitions from year-over-year comparisons. Sales are considered inorganic for the twelve months after acquisition. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. This measure is used in assessing achievement of management goals for at-risk compensation. Vista Outdoor's definition of organic sales may differ from those used by other companies. When referring to "Revelyst" in the Non-GAAP reconciliations below, we are referring to the Revelyst business which comprises three new operating and reportable segments: Revelyst Adventure Sports, Revelyst Precision Sports Technology, and Revelyst Outdoor Performance. Please see Vista Outdoor's Annual Report on Form 10-K to be filed later this month for additional information.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is defined as net income before other income (expense), interest, taxes, and depreciation and amortization, excluding the non-recurring and non-cash items referenced above. We calculate “Adjusted EBITDA margins” as Adjusted EBITDA divided by net sales. Vista Outdoor management believes adjusted EBITDA and adjusted EBITDA margin provide investors with an important perspective on the Company’s core profitability and help investors analyze underlying trends in the Company’s business and evaluate its performance on an absolute basis and relative to its peers. Adjusted EBITDA and adjusted EBITDA margin should be considered in addition to, and not as a substitute for, GAAP net income and GAAP net income margin. Vista Outdoor’s definitions may differ from those used by other companies.

Segment Adjusted EBITDA Reconciliation

Consolidated Adjusted EBITDA Reconciliation

Segment Income to Consolidated Net Income Reconciliation

Net Debt and Net Debt Leverage Ratio

Net debt is defined as total debt less cash and cash equivalents. Net debt leverage ratio is defined as net debt as of the balance sheet date divided by adjusted EBITDA for the twelve months then ended. We believe that using net debt is useful to investors in determining our leverage ratio since we could choose to use cash and cash equivalents to retire debt. Vista Outdoor’s definitions may differ from those used by other companies.

Net Debt and Net Debt Leverage Ratio Reconciliation