Vista Outdoor: Time To Start Pulling Band-Aids - Q4 And FY 2018 Earnings Results

May 02, 2018 2:13 PM ETVista Outdoor Inc. (VSTO)SWBI, RGR26 Comments
Maks F. S. profile picture
Maks F. S.
5.27K Followers

Summary

  • Vista Outdoor just announced their Q4 and FY 2018 earnings results.
  • The stock slid more than 13% in response.
  • Discussion of the results and the impacts on the company.

First and foremost, a quick hello to all of my regular firearms readers. I apologize it has been some time since I last wrote a regular firearms focused article as I focused on Income Idea updates after the plethora of Shot Show articles. I will be returning to our normal firearms coverage schedule soon.

On Tuesday, May 1st, Vista Outdoor (NYSE:VSTO) reported their Q4 and full year FY 2018 earnings. Along with those earnings the company announced some major, although expected business changes.

With the poor earnings results, the company's share price declined more than 13% and the national media had a field day with completely wrong conclusions. As such, let's take a look at the earnings results and what they mean for the company.

Earnings Results

For the 4th quarter 2018, the company reported net revenue of $571 million, down 1% versus prior-year quarter. On those sales, the company reported a GAAP net loss of $14.9 million or $.28 per share. This compares to a net income of $.02 per share last year.

Adjusted for certain one-time expenses the company reported a net loss of $12.343 million or $.22 per share. This compares to a net income of $.03 per share last year.

Worthy of note is that gross profit was down 24% GAAP/22% adjusted primarily caused by "unfavorable pricing in all ammunition categories, increased promotional activity, and rebates within the Shooting Sports segment." Source: Vista 8-K

Furthermore, even though the company paid down some debt, the interest expenses for the quarter increased to $12 million from $11 million a year ago.

Full Year FY2018

For the full fiscal year 2018, the company reported net sales of $2.3 billion. This was down 9% from the prior year. The primary causes were lower sales volume and prices. This was not limited to just ammunition and impacted

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VSTO Total Long-Term Liabilities (Quarterly) data by YCharts

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VSTO Total Interest Expense (TTM) data by YCharts

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VSTO Price to Free Cash Flow (TTM) data by YCharts

This article was written by

Maks F. S. profile picture
5.27K Followers
Intrepid Leader at an RIA.  My firm and I simplify the lives of busy clients by providing ongoing financial planning and asset management. this is done by providing our clients customized, ongoing comprehensive financial planning, and customized investment advisory services tailored to the clients' needs. As a fiduciary, we have a legal obligation to put the needs and interests of our clients above our own. Specialties: fee based comprehensive financial planning, retirement planning, life insurance and protection planning.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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