Vista Outdoor

Vista Outdoor Inc.
Public company
Traded as NYSE: VSTO
Industry shooting sports and outdoor products
Founded 2015, spun off from Alliant Techsystems
Headquarters Utah, United States
Key people
 Mark DeYoung, Chairman and CEO
Products firearms, ammunition, and outdoor accessories
Number of employees
 5,800
Website www.vistaoutdoor.com

Vista Outdoor Inc., is an American publicly traded "designer, manufacturer, and marketer" of outdoor sports and recreation products. The company operates in two segments, Shooting Sports and Outdoor Products. It is a "house of brands" with more than 30 well-recognized labels and subsidiaries that produce a wide range of ammunition, firearms, and outdoor accessories. The company trades under "VSTO" on the New York Stock Exchange.[1][2][3][4]

History

Alliant Techsystems (ATK), entered the ammunition and outdoor products business in 2001. ATK achieved growth through acquisitions and a surge in demand for ammunition for police, hunting, and other private uses.[5]

When asked about the spinoff of Vista Outdoor, Mark DeYoung said, "I can trace the origin of this company all the way back to 2000, when ATK won the military contract to produce small-arms ammunition. With that contract came the operation of the Lake City Arms Ammunition plant, and ATK’s 2001 acquisition of Blount. From there, I recognized that if we could build a business around shoulder-fired ammunition for the military, we could do the same thing for the consumer market, and we put a lot of energy into rebranding Federal, changing our marketing and strategy, reducing costs and increasing profits, and acquiring other brands that fit our portfolio. I don’t think anyone predicted the rate of growth that we achieved."[6]

In December 2014, regulators were informed that Vista Outdoor had signed an agreement for a $350 million secured loan with a term of five years and a $400 million revolving line of credit. Proceeds were partially used to pay down debt.[5] ATK and Orbital filed a joint proxy statement and prospectus describing the share issuance with the Securities and Exchange Commission on December 17, 2014. The same month, the Department of Justice granted approval to the merger and spinoff.[2][7]

On January 27, 2015, ATK's shareholders approved the issuance of ATK common stock to Orbital Sciences Corporation to consummate their merger. About 97 percent of the votes cast, representing 77 percent of the total outstanding shares of ATK common stock as of December 16, 2014, voted in favor of issuing the shares. Orbital shareholders held a similar vote the same day and also approved the merger.[8]

ATK spun-off Vista Outdoor upon closing its merger with Orbital Sciences and became Orbital ATK on February 9, 2015. Anyone holding ATK common stock at the end of the business day on February 2, 2015 received two shares of Vista Outdoor common stock. Eligible shareholders had their brokerage account credited or received a book-entry account statement reflecting their ownership. Vista Outdoor was thus initially 100% owned by ATK shareholders. Vista Outdoor stock traded on a "when-issued" basis from January 29, 2015 to February 9, 2015. It began "regular way" trading on the New York Stock Exchange on February 10, 2015 under the ticker symbol "VSTO." No payment or action of any kind was required of shareholders. This transaction was conducted on a tax-free basis. U.S. shareholders generally did not have to recognize a gain or loss for federal tax purposes.[1][8][9][10][11][12]

On February 25, 2015, Vista Outdoor announced that its board had approved a $200 million stock repurchase program to be conducted under SEC rule 10b5-1. The timing, number, and value of share repurchases will be determined by Vista Outdoor's management according to the company's financial health, other available investment opportunities, and legal considerations. This program will expire after two years.

In an interview with Outdoor Life, Mark DeYoung stated, "It’s impossible to talk about the merger and the spin-off separately. They’re entirely related, and they’re both a product of remarkable growth in the outdoor recreation space. Our shooting sports component along had grown to the size that it was making up about 50 percent of ATK’s entire business. I proposed to our board that in order to rationalize our portfolio, we should put the recreation businesses in a category where they belong, with their own strategies, marketing campaigns, and focused on their customers, while we strengthened the A&D [aerospace and defense] business with a merger that gives it more focus and depth."[6]

Vista Outdoor was the top seller of ammunition in the United States from 2008 to 2013. As of March 2015, it controlled about 40% of the ammunition market.[13]

In August 2015, Vista Outdoor announced its intent to offer $300 million in senior notes due in 2023. The notes will be offered on a senior unsecured basis through existing and future subsidiaries. The notes will be sold in the United States to qualified institutional buyers under an exemption from registration according to Rule 144A under the Securities Act of 1933 and to certain foreign buyers according to Regulation S under the same law.[14]

On February 25th, 2016 BRG Sports announced its acceptance of a $400-million cash and earn-out deal to sell its "Action Sports" business to Vista Outdoor. Vista gained control of the Bell Sports, Giro, Blackburn, and C-Preme brands.[15] Vista Outdoor financed this transaction with cash on-hand and borrowing.[16] The company announced the completion of this transaction on April 1st, 2016.[17]

Financial results

For fiscal year 2015, Vista Outdoor reported earnings of $79.5 million or $1.25 per share on $2.08 billion in revenue.[18]

Brands and subsidiaries

Vista Outdoor's brands and subsidiaries include those listed in detail below as well as: Alliant Powder,[19] Blackburn, Cébé, Champion Targets, C-Preme, Final Approach, Gold Tip Arrows, Hoppe's, Outers, Primos, Serengeti, Speer, Uncle Mike's, and Weaver Optics. Most of Vista's brands are associated with shooting and hunting. The company also makes gear for camping, hiking, skiing, and biking such as flashlights, headlamps, lanterns, helmets, goggles, GPS locators, etc.[2][3][4][20]

Bell Sports

Main article: Bell Sports

Bell Sports manufactures bicycle, auto racing, and motorcycle helmets.

Blackhawk

Blackhawk founder Mike Noell's pack failed while he was on a mission in a minefield in 1990, placing him in great danger. After leaving the Navy SEALs Noell started Blackhawk in order to provide higher quality gear to soldiers and other users. Blackhawk, located in Manhattan, Montana is now a subsidiary of Vista Outdoor. It has 125 employees and makes numerous injection-moulded products such as holsters, carry bags, and other gun accessories.[21]

Bollé

Bollé was founded in the village of Oyonnax, France in 1888 by Seraphim Bollé. Boll first manufactured combs and hair ornaments using local wood and horn. After World War II, Bollé started using molded nylon in its products. in 1950 Bollé began making safety eyewear. In 1956 Georges Bollé designed the famous "cat eye" nylon sunglasses. In 1960 Bollé moved into ski goggles.[22]

Bushnell

Main article: Bushnell Corporation
Bushnell scopes on display at a hunting exhibition

Bushnell specializes in optics and imaging. Its products include binoculars, spotting scopes, telescopes, night vision equipment, GPS devices, laser rangefinders, riflescopes, holographic weapon sights, game cameras, and other high-end optical equipment. It also sells Bollé Performance Eyewear ski goggles and sunglasses and Serengeti Eyewear all-purpose sunglasses. David P. Bushnell found Bushnell Corporation in 1948 during his service in the Allied-occupied Japan. In 1999, Bushnell was acquired by private equity firm Wind Point Partners. In 2007, Bushnell was acquired by MidOcean Partners, another private equity firm, which acquired it in a leveraged buyout. In 2008, Bushnell acquired the assets of Simmons Outdoor Corporation from Meade Instruments. ATK announced its acquisition of Bushnell on September 5, 2013 for $985 million in cash, subject to post-closing adjustments.[3][23][24]

CamelBak

Main article: CamelBak
A water bladder from a CamelBak pack. The large opening makes it easier to clean the inside of the reservoir.

CamelBak Products (stylized as CAMELBAK) is an outdoors equipment company based in Petaluma, California, best known for its hydration products, such as hydration packs and water bottles. CamelBak is a supplier for military and law enforcement agencies around the world. Vista Outdoor acquired CamelBak in 2015 for $412.5 million. CamelBak's 2015 sales were estimated at $160 million.[25]

CCI

Main article: CCI (ammunition)

Cascade Cartridge Inc., usually called CCI Ammunition, is based in Lewiston, Idaho. In its infancy, CCI made centerfire primers for government use. As of March 2015, it mainly manufactures rimfire ammunition but also makes centerfire handgun ammunition, primers for reloading and industrial purposes, and shotgun shells. CCI was founded in 1951 by Dick Speer, brother of Speer Bullets founder Vernon Speer. CCI was previously known as the Speer Ammunition Company.[26][27]

Federal Premium

Main article: Federal Cartridge
Hydra-Shok 9mm ammunition from Federal Premium

Federal Cartridge, usually styled Federal Premium, is located in Anoka, Minnesota. Federal Premium manufactures finished shotshell, centerfire, and rimfire ammunition, as well as powder, primer, and shell casings.[28] Federal Premium's UltraMatch Rimfire ammunition helped American shooters win gold, silver, and bronze medals at the 1992 and 1996 Olympics Games. Later in 1996, Federal was named "Ammunition of the Year" by the Shooting Industry Academy of Excellence.[29]

Giro

Main article: Giro (company)

Giro is a manufacturer of helmets, apparel, shoes, softgoods for cycling, and goggles for skiing and snowboarding.

Jimmy Styks

Kyle Reeves and Jeremy Wilkens founded Jimmy Styks in 2009 in Huntingon Beach, California. In July 2015, Vista Outdoor announced its intent to purchase Jimmy Styks for $40 million upfront with additional payments to the founders, who are staying with the company, triggered by meeting financial targets over the next three years. Jimmy Styks makes stand-up paddle boards and accessories. It will be integrated into Vista Outdoor's outdoor products division.[25] This purchase price is multiple of about 5.5 times the expected 2015 calendar year EBITDA.[30]

In January 2016, Vista Outdoor announced that it would use its relationships with retailers to expand the number of stores that offer Jimmy Styks products.[31]

Savage Arms

Main article: Savage Arms
A 1904 advertisement for Savage Arms

The Savage Arms Company is based in Westfield, Massachusetts, with a division in Canada. The company makes a variety of rimfire and centerfire rifles, as well as marketing the Stevens single-shot rifles and shotguns. Savage is best known for the Model 99 hammerless lever-action rifle, no longer in production, and the very popular .300 Savage cartridge.[3]

Savage Arms has a reputation for quality and innovation, especially in long guns. In 2003, Savage Arms introduced AccuTrigger, an adjustable trigger design that protects against accidental discharge. Many of Savage Arms' competitors soon followed suit with similar designs. As of March 2015, Savage Arms' sales outgrew the overall firearms market for two years straight. In the 2013 calendar year, sales grew 44% year-on-year, compared with a 39% increase in the overall market during the same period. In 2014, the overall market shrunk by 3% while Savage Arms expanded its sales by 1%.[13]

RCBS

Fred T. Huntington founded RCBS in 1943 in Oroville, California. The shortage of components and materials, due to the war effort, lead Huntington to design and build a set of bullet swaging dies which formed varmint bullets from spent 22LR rimfire cases. Others soon heard about these dies and due to demand, RCBS was founded in the backroom of his father's dry-cleaning and laundry business. The early swaging dies were made using old Ford axles. Fred chose the name RCBS, because Marmot (Rock Chuck) hunting was one of his favorite pastimes. Thus, Huntington named his company Rock Chuck Bullet Swage. This was later shortened to RCBS. RCBS quickly expanded into much larger facilities as it grew rapidly in the late 1940s and early 1950s. ATK acquired RCBS in 2001 and it was spun-off together with Vista Outdoor in 2015. As of 2016, it is still located in Oroville. While RCBS no longer makes swaging dies, it is a major manufacturer of reloading equipment for rifle and pistol ammunition.[32]

Leadership

Mark W. DeYoung

Mark W. DeYoung is Vista Outdoor's chairman and CEO. Before heading Vista Outdoor, DeYoung was President and CEO of Alliant Techsystems (ATK) from 2010 to 2015. Under his leadership, ATK completed acquisitions of Savage Arms and Bushnell. In 2015, DeYoung led the transaction that spun-off ATK's sporting goods business to create Vista Outdoor and merged ATK's aerospace and defense units with Orbital Sciences forming Orbital ATK. DeYoung previously headed ATK's Armament Systems group, the company's largest business. Under DeYoung this unit expanded into new markets and increased its revenue from $600 million in the fiscal year 2003 to $2.1 billion in the fiscal year 2010.[3][23][33][34]

DeYoung started his career with Hercules Aerospace in Salt Lake City, Utah in 1985. He held numerous management positions at Hercules in its solid rocket motor and composite structures businesses. After Hercules was acquired by ATK in 1995, DeYoung continued to advance and held roles in finance, operations, composite structures, human resources, and munitions. DeYoung earned an undergraduate degree in business at Weber State University, in Ogden, Utah. He holds an MBD from Westminster College in Salt Lake City, Utah where he taught management and finance and was named "Adjunct Professor of the Year." DeYoung is also a member of Orbital ATK's board of directors.[34][35]

In September 2014, DeYoung was elected chairman of the board for the Congressional Sportsmen's Foundation (CSF). DeYoung assumed his duties as chairman in January 2015. He was previously the CSF's vice chairman.[36][37]

DeYoung won EY's Entrepreneur of the Year Award for the Utah region in June 2015. A panel of judgles selected DeYoung for his "innovation, financial performance and community service."[38][39]

Operations

Vista Outdoor decided to station its headquarters in Utah after the company applied for and received targeted tax credits from the Utah state government. The company thus capitalized on Utah's goal of recruiting global brand businesses from six strategic economic clusters: outdoor products, life sciences, aerospace/defense, financial services, energy, and software/information technology. In its application, Vista Outdoor said it would invest about $10 million in a new facility where about 90 highly-paid employees would work. Counting medical benefits, these employees will be paid about $125 million over a seven-year period. Utah economic development officials expect about $6.7 million in new tax revenue from the project over this period.[40]

Although its corporate headquarters is in Utah, the leadership teams for individual brands will remain in the locations where products are designed and developed.[2][41][42] Vista Outdoor has about 5,800 employees worldwide, with 4,000 in the United States. The company has manufacturing and support facilities spread over 11 U.S. states, Puerto Rico, Mexico, and Canada. It has sales and sourcing operations in Mexico, Canada, Europe, Australia, New Zealand, and Asia.[1][42] For example, 1,200 of Vista Outdoor's employees staff an ammunition factory in Lewiston, Idaho.[43]

In June 2015, Vista announced that it would locate its new corporate headquarters at Station Park in Farmington City, Utah. As of June 2015, construction was expected to begin during the summer of the same year with completion expected in the middle of 2016. Station Park is a mixed-use development next to a commuter rail station.[42]

In January 2016, Vista opened a factory in American Fork, Utah to manufacture Gold Tip and Bee Stinger archery products.[44] The new factory is significantly larger than the facility it replaced. The additional space is being used for increased research and development, improved production processes, and better employee amenities.[45]

Marketing

In April 2015, Vista Outdoor released the first issue of Shoot 101, a magazine aimed at consumers new to shooting sports. While offering guidance to shooting novices, the magazine simultaneously promotes products from Vista Outdoor's wide range of brands. The magazine is a collaboration with Kroenke Sports & Entertainment, a sports and media empire that controls The Sportsman Channel, The Outdoor Channel, and the Denver Nuggets.[46]

References

  1. 1 2 3 Clabaugh, Jeff (9 February 2015). "Orbital, ATK complete aerospace merger". Washington Business Journal. Retrieved 10 February 2015.
  2. 1 2 3 4 Lange, Chris (5 December 2014). "Alliant Tech and Orbital Sciences Heading in the Right Direction". 24/7 Wall St. (New York, New York). Retrieved 10 February 2015.
  3. 1 2 3 4 5 Loner, Leveraged date=21 January 2015. "Alliant Techsystems Spins Off Vista Outdoors: What's It Worth?". Seeking Alpha. Retrieved 10 February 2015.
  4. 1 2 Regenold, Stephen (5 March 2014). "Hunting Gear To Snowsports... New Company (Vista Outdoor) Among World's Largest". Gear Junkie. Retrieved 6 March 2015.
  5. 1 2 DePass, Dee (26 December 2014). "Alliant Techsystems to name sporting spinoff Vista Outdoor". StarTribune (Minneapolis, Minnesota).
  6. 1 2 McKean, Andrew (11 February 2015). "Q&A with Mark DeYoung: ATK Spinoff Company Vista Outdoor Consolidates Major Sporting Brands". Outdoor Life (United States). Retrieved 7 April 2015.
  7. ↑ Wilkers, Ross (27 January 2015). "David Thompson: Orbital, ATK Set Feb. 9 Date to Close A&D Merger and Outdoor Group Spinoff". GovCon Wire (Washington, DC). Retrieved 30 January 2015.
  8. 1 2 "ATK Stockholders Approve the Issuance of Shares to Orbital Sciences Corporation Stockholders" (Press release). New York, New York: ATK. MarketWatch. 27 January 2015. Retrieved 30 January 2015.
  9. ↑ "ATK Announces Distribution Ratio for Spin-Off of its Sporting Group" (Press release). New York, New York: ATK. MarketWatch. 6 January 2015. Retrieved 30 January 2015.
  10. ↑ "ATK Announces Record Date for Previously Announced Spin-off of Sporting Group to ATK Stockholders" (Press release). New York, New York: ATK. PR Newswire. 16 January 2015. Retrieved 30 January 2015.
  11. ↑ Depass, Dee Dee (9 February 2015). "Alliant spinoff, merger completed". StarTribune (Minneapolis, Minnesota).
  12. ↑ Lee, Jackson (13 January 2015). "3 Top Defense Stocks That May Benefit From New Congress". 24/7 Wall St. (New York, New York). Retrieved 10 February 2015.
  13. 1 2 Lin, Mark (12 March 2015). "Vista Outdoor: A Classic Spin-Off Investment Opportunity". Seeking Alpha (United States). Retrieved 7 April 2015.
  14. ↑ Covington, Amanda (3 August 2015). "Vista Outdoor Inc. Announces Private Offering of $300 million of Senior Notes" (Press release). United States: Vista Outdoor. PR Newswire. Retrieved 2015-08-05.
  15. ↑ Griffin, Erin (25 February 2016). Yahoo Finance (United States) http://finance.yahoo.com/news/brg-sports-reaches-agreement-sell-120100121.html. Retrieved 8 March 2016. Missing or empty |title= (help)
  16. ↑
  17. ↑
  18. ↑ Terrill, Daniel (5 May 2015). "Vista Outdoor’s 4Q shows ups and downs". Guns.com (United States). Retrieved 5 June 2015.
  19. ↑ "Camelbak acquired for $412 million". BikeBiz. 28 July 2015. Retrieved 31 July 2015.
  20. ↑
  21. ↑
  22. ↑
  23. 1 2 Dornbrook, James (9 February 2015). "ATK spinoff affects KC workers at Bushnell, Lake City Ammo Plant". Kansas City Business Journal (Kansas City, Missouri). Retrieved 10 February 2015.
  24. ↑ Dornbrook, James (5 September 2013). "ATK acquires Bushnell for $985M". Kansas City Business Journal (Kansas City, Missouri). Retrieved 10 February 2015.
  25. 1 2 Katje, Chris (2 August 2015). "Vista Outdoor Makes 2 Wise Acquisitions To Strengthen And Diversify The Business". Seeking Alpha (United States). Retrieved 5 August 2015.
  26. ↑ "CCI’s Eric Graufffel World IPSC Champion". AmmoLand.com. 27 April 2011. Retrieved 6 March 2015.
  27. ↑ "So, Really, Where is the .22 Rimfire Ammo?". The American Rifleman (Fairfax, Virginia). 11 August 2014. Retrieved 6 March 2015.
  28. ↑ Nale, Mark (21 June 2014). "Seeking answers to why rimfire ammunition is so hard to find". Centre Daily (State College, Pennsylvania). Retrieved 6 March 2015.
  29. ↑ "RECEPTION TO CELEBRATE OLYMPIC MEDAL-WINNING PARTNERSHIP BETWEEN U.S. SHOOTING TEAM AND FEDERAL CARTRIDGE COMPANY" (Press release). PR Newswire. 2 September 1992.
  30. ↑ "Vista Outdoor Acquires Jimmy Styks". Entertainment Close-up (United States). 27 July 2015.
  31. ↑
  32. ↑
  33. ↑ "Mark Deyoung". Forbes (New York, New York). Retrieved 10 February 2015.
  34. 1 2 "Utah native Mark W. DeYoung appointed CEO of Alliant Techsystems". Deseret News (Utah). 5 February 2010. Retrieved 10 February 2015.
  35. ↑ Koritz, Alex (1 December 2008). "Mark DeYoung". Utah Business (Utah). Retrieved 10 February 2015.
  36. ↑ "Mark DeYoung Elected Chairman of Congressional Sportsmen's Foundation Board" (Press release). New York, New York: ATK. MarketWatch. 11 September 2014. Retrieved 2015-01-30.
  37. ↑ "ATK CEO Mark DeYoung Elected Congressional Sportsmen’s Foundation Board Chairman". GovCon Executive (Tysons Corner, Virginia). 15 September 2015.
  38. ↑ "Vista Outdoor CEO Mark DeYoung Named Finalist for EY Entrepreneur of the Year Award". AmmoLand (United States). 14 April 2015. Retrieved 7 May 2015.
  39. ↑
  40. ↑ "ATK SELECTS UTAH AS HOME BASE FOR PROPOSED SPIN-OFF COMPANY, VISTA OUTDOOR". Utah Governor’s Office of Economic Development. 13 November 2014. Retrieved 12 April 2015.
  41. ↑ Zent, John (11 February 2015). "Vista Outdoor Emerges as Biggest Outdoor Company". American Rifleman. Retrieved 12 April 2015.
  42. 1 2 3 Gorrell, Mike (13 November 2014). "Vista Outdoor HQ is coming to Utah". Salt Lake Tribune (Salt Lake City, Utah). Retrieved 30 January 2015.
  43. ↑ Miragilo, Sophie (12 February 2015). "Future is exciting for Vista Outdoor formerly known as ATK". KLEWTV.com (Lewiston, Idaho). Retrieved 5 March 2015.
  44. ↑ "Gold Tip/Bee Stinger Facility Opens in American Fork". Daily Herald (Provo, Utah). 13 January 2016.
  45. ↑
  46. ↑ "Guns and Ammo Launches Shoot 101". Ammoland (United States). 10 April 2015. Retrieved 10 April 2015.

External links

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