Vista Outdoor Inc. - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 25, 2022


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-36597

Vista Outdoor Inc.

(Exact name of Registrant as specified in its charter)


Delaware			47-1016855
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1 Vista Way	Anoka	MN	55303
(Address of Principal Executive Offices)			(Zip Code)

Registrant's telephone number, including area code: (763) 433-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01

VSTO

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2022, there were 56,573,110 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS


		Page
PART I - Financial Information
Item 1.	Unaudited Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
PART II - Other Information
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
SIGNATURES		35

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PART I— FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(Amounts in thousands except share data)	September 25, 2022		March 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	66,065	$	22,584
Net receivables	431,703		356,773
Net inventories	777,974		642,976
Income tax receivable	49,010		43,560
Other current assets	67,119		45,050
Total current assets	1,391,871		1,110,943
Net property, plant, and equipment	231,795		211,087
Operating lease assets	101,942		78,252
Goodwill	804,820		481,857
Net intangible assets	798,200		459,795
Deferred charges and other non-current assets, net	69,295		54,267
Total assets	$	3,397,923	$	2,396,201
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	140,000	$	—
Accounts payable	178,732		146,697
Accrued compensation	58,049		79,171
Federal excise, use, and other taxes	40,652		40,825
Other current liabilities	194,002		127,180
Total current liabilities	611,435		393,873
Long-term debt	1,167,262		666,114
Deferred income tax liabilities	89,140		29,304
Long-term operating lease liabilities	96,663		80,083
Accrued pension and postemployment benefits	21,748		22,634
Other long-term liabilities	62,224		79,794
Total liabilities	2,048,472		1,271,802
Commitments and contingencies (Notes 3, 13, and 16)
Common stock — $.01 par value:
Authorized — 500,000,000 shares
Issued and outstanding — 56,566,915 shares as of September 25, 2022 and 56,093,456 shares as of March 31, 2022	566		560
Additional paid-in capital	1,717,750		1,730,927
Accumulated deficit	(1,340)		(220,810)
Accumulated other comprehensive loss	(77,440)		(76,679)
Common stock in treasury, at cost — 7,397,524 shares held as of September 25, 2022 and 7,870,983 shares held as of March 31, 2022	(290,085)		(309,599)
Total stockholders' equity	1,349,451		1,124,399
Total liabilities and stockholders' equity	$	3,397,923	$	2,396,201

See Notes to the Condensed Consolidated Financial Statements.

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VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three months ended				Six months ended
(Amounts in thousands except per share data)	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Sales, net	$	781,678	$	778,460	$	1,584,290	$	1,441,372
Cost of sales	518,804		479,539		1,027,946		901,024
Gross profit	262,874		298,921		556,344		540,348
Operating expenses:
Research and development	11,154		6,440		19,051		12,308
Selling, general, and administrative	120,553		101,742		233,701		193,645
Earnings before interest, income taxes, and other	131,167		190,739		303,592		334,395
Other income, net (Note 5)	741		—		741		—
Earnings before interest and income taxes	131,908		190,739		304,333		334,395
Interest expense, net	(13,934)		(5,929)		(20,244)		(11,607)
Earnings before income taxes	117,974		184,810		284,089		322,788
Income tax provision	(24,519)		(45,270)		(64,619)		(80,523)
Net income	$	93,455	$	139,540	$	219,470	$	242,265
Earnings per common share:
Basic	$	1.65	$	2.43	$	3.88	$	4.20
Diluted	$	1.62	$	2.36	$	3.78	$	4.07
Weighted-average number of common shares outstanding:
Basic	56,553		57,353		56,520		57,732
Diluted	57,814		59,216		58,098		59,577

Net income (from above)	$	93,455	$	139,540	$	219,470	$	242,265
Other comprehensive income (loss), net of tax:
Pension and other postretirement benefit liabilities:
Reclassification of prior service credits for pension and postretirement benefit plans recorded to net income, net of tax benefit of $0 and $0 for the three and six months ended September 25, 2022, respectively, and $31 and $54 for the three and six months ended September 26, 2021, respectively	—		(95)		—		(167)
Reclassification of net actuarial loss for pension and postretirement benefit plans recorded to net income, net of tax (expense) of $(221) and $(442) for the three and six months ended September 25, 2022, respectively, and $(260) and $(519) for the three and six months ended September 26, 2021, respectively	694		801		1,388		1,599
Change in derivatives, net of tax benefit of $92 and $781 for the three and six months ended September 25, 2022, respectively, and $141 and $121 for the three and six months ended September 26, 2021, respectively	(287)		(436)		(278)		(373)
Change in cumulative translation adjustment, net of tax benefit (expense) of $0 and $(167) for the three and six months ended September 25, 2022, respectively, and $0 and $0 for the three and six months ended September 26, 2021, respectively	(1,398)		(337)		(1,871)		(131)
Total other comprehensive (loss) income	(991)		(67)		(761)		928
Comprehensive income	$	92,464	$	139,473	$	218,709	$	243,193

See Notes to the Condensed Consolidated Financial Statements.

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VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six months ended
(Amounts in thousands)	September 25, 2022		September 26, 2021
Operating Activities:
Net income	$	219,470	$	242,265
Adjustments to net income to arrive at cash provided by operating activities:
Depreciation	23,317		22,267
Amortization of intangible assets	18,983		10,417
Amortization of deferred financing costs	2,518		701
Change in fair value of contingent consideration	(11,425)		—
Deferred income taxes	(124)		269
(Gain) on Foreign Exchange	(741)		—
Loss on disposal of property, plant, and equipment	551		99
Share-based compensation	14,756		13,812
Changes in assets and liabilities:
Net receivables	(25,601)		(112,256)
Net inventories	(36,042)		(105,269)
Accounts payable	10,092		16,957
Accrued compensation	(26,233)		(8,489)
Accrued income taxes	4,313		32,250
Federal excise, use, and other taxes	(1,261)		9,494
Pension and other postretirement benefits	944		(1,299)
Other assets and liabilities	(115)		(16,038)
Cash provided by operating activities	193,402		105,180
Investing Activities:
Capital expenditures	(12,957)		(14,439)
Acquisition of businesses, net of cash received	(761,170)		(8,488)
Proceeds from the disposition of property, plant, and equipment	43		8
Cash used for investing activities	(774,084)		(22,919)
Financing Activities:
Proceeds from credit facility	465,000		—
Repayments of credit facility	(165,000)		—
Payments made for debt issuance costs	(15,905)		(1,018)
Proceeds from issuance of debt	350,000		—
Purchase of treasury shares	—		(56,239)
Proceeds from exercise of stock options	181		228
Payment of employee taxes related to vested stock awards	(8,889)		(3,039)
Cash provided by (used ) for financing activities	625,387		(60,068)
Effect of foreign exchange rate fluctuations on cash	(1,224)		(157)
Increase in cash and cash equivalents	43,481		22,036
Cash and cash equivalents at beginning of period	22,584		243,265
Cash and cash equivalents at end of period	$	66,065	$	265,301
Supplemental Cash Flow Disclosures:
Non-cash investing activity:
Capital expenditures included in accounts payable	$	2,681	$	3,085
Contingent consideration in connection with business combinations	$	11,400	$	22,400

See Notes to the Condensed Consolidated Financial Statements.

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VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)


(Amounts in thousands except share data)	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Total Equity
Balance, March 31, 2022	56,093,456	$	560	$	1,730,927	$	(220,810)	$	(76,679)	$	(309,599)	$	1,124,399
Comprehensive income	—	—		—		126,015		230		—		126,245
Exercise of stock options	9,150	—		(212)		—		—		359		147
Share-based compensation	—	—		7,257		—		—		—		7,257
Restricted stock vested, net of shares withheld	413,089	—		(25,892)		—		—		17,156		(8,736)
Other	8,387	5		(321)		—		—		316		—
Balance, June 26, 2022	56,524,082	$	565	$	1,711,759	$	(94,795)	$	(76,449)	$	(291,768)	$	1,249,312
Comprehensive income (loss)	—	—		—		93,455		(991)		—		92,464
Exercise of stock options	4,000	—		(123)		—		—		157		34
Share-based compensation	—	—		7,499		—		—		—		7,499
Restricted stock vested and shares withheld	1,276	—		(72)		—		—		55		(17)
Employee stock purchase plan	6,002	—		(76)		—		—		235		159
Other	31,555	1		(1,237)		—		—		1,236		—
Balance, September 25, 2022	56,566,915	$	566	$	1,717,750	$	(1,340)	$	(77,440)	$	(290,085)	$	1,349,451

Balance, March 31, 2021	58,561,016	$	585	$	1,731,479	$	(694,036)	$	(83,195)	$	(217,836)	$	736,997
Comprehensive income	—	—		—		102,725		995		—		103,720
Exercise of stock options	7,373	—		(94)		—		—		291		197
Share-based compensation	—	—		7,038		—		—		—		7,038
Restricted stock vested, net of shares withheld	174,885	—		(10,937)		—		—		7,896		(3,041)
Treasury shares purchased	(1,212,496)	—		—		—		—		(44,232)		(44,232)
Other	7,380	(10)		(282)		—		—		292		—
Balance, June 27, 2021	57,538,158	$	575	$	1,727,204	$	(591,311)	$	(82,200)	$	(253,589)	$	800,679
Comprehensive income	—	—		—		139,540		(67)		—		139,473
Exercise of stock options	1,928	—		(45)		—		—		76		31
Share-based compensation	—	—		6,774		—		—		—		6,774
Restricted stock vested and shares withheld	2,840	—		(167)		—		—		109		(58)
Employee stock purchase plan	2,726	—		12		—		—		108		120
Treasury shares purchased	(311,187)	—		—		—		—		(12,007)		(12,007)
Other	53,695	(2)		(2,113)		—		—		2,116		1
Balance, September 26, 2021	57,288,160	$	573	$	1,731,665	$	(451,771)	$	(82,267)	$	(263,187)	$	935,013

See Notes to the Condensed Consolidated Financial Statements.

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VISTA OUTDOOR INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Six Months Ended September 25, 2022

(Amounts in thousands except per share data and unless otherwise indicated)

1. The Company and Basis of Presentation

Nature of Operations—Vista Outdoor Inc. (together with our subsidiaries, "Vista Outdoor", "we", "our", and "us", unless the context otherwise requires) is a leading global designer, manufacturer, and marketer of outdoor recreation and shooting sports products. We operate through two reportable segments, Sporting Products and Outdoor Products. We are headquartered in Anoka, Minnesota and have manufacturing and distribution facilities in the U.S., Canada, Mexico, Spain, the Netherlands and Puerto Rico along with international customer service, sales and sourcing operations in Asia and Europe. We have a robust global distribution network serving customers in over 100 countries. Vista Outdoor was incorporated in Delaware in 2014.

Basis of Presentation—Our unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain disclosures and other financial information that normally are required by accounting principles generally accepted in the United States have been condensed or omitted. Management is responsible for the unaudited condensed consolidated financial statements included in this report, which in the opinion of management, include all adjustments necessary for a fair presentation of our financial position, results of operations, and cash flows for the periods and dates presented. These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (“fiscal year 2022”), which was filed with the SEC on May 24, 2022.

Significant Accounting Policies—Our accounting policies are described in Note 1 of the notes to the audited consolidated financial statements in our Annual Report on Form 10-K for fiscal year 2022, , which was filed with the SEC on May 24, 2022.

2. Fair Value of Financial Instruments

We measure and disclose our financial assets and liabilities at fair value on a recurring and nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability (the exit price) in the principal and most advantageous market for the asset or liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified using the three-tier hierarchy:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3—Significant inputs to the valuation model are unobservable.

The following section describes the valuation methodologies we use to measure our financial instruments at fair value on a recurring basis:

Derivatives

We periodically enter into commodity forward contracts to hedge our exposure to price fluctuations on certain commodities we use for raw material components in our manufacturing process and to reduce the variability associated with exchange rate fluctuations. When actual commodity prices or foreign exchange rates exceed the fixed price provided by these contracts, we receive this difference from the counterparty, and when actual commodity prices or foreign exchange rates are below the contractually provided fixed price, we pay this difference to the counterparty. We consider these to be Level 2 instruments. See Note 5, Derivative Financial Instruments, for additional information.

Note Receivable

In connection with the sale of our Firearms business in July 2019, we received a $12,000 interest-free, five-year pre-payable promissory note due June 2024. Based on the general market conditions and the credit quality of the buyer at the time of the sale, we discounted the Note Receivable at an effective interest rate of 10% and estimated fair value using a discounted cash flow approach. We consider this to be a Level 3 instrument. See Note 8, Receivables, for additional information.

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Contingent Consideration

In connection with some of our acquisitions, we recorded contingent consideration liabilities that can be earned by the sellers upon achievement of certain milestones. The liabilities are measured on a recurring basis and recorded at fair value, using a discounted cash flow analysis or a Monte Carlo simulation analysis in a risk-neutral framework with assumptions for volatility, market price of risk adjustment, risk-free rate, and cost of debt, utilizing revenue projections for the respective earn-out period, corresponding targets and approximate timing of payments as outlined in the purchase agreements. The inputs used to calculate the fair value of the contingent consideration liabilities are considered to be Level 3 inputs due to the lack of relevant market activity and significant management judgment. Changes in the fair value of the contingent consideration obligation results from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the performance targets. The fair value adjustments are recorded in selling, general, and administrative in the condensed consolidated statement of comprehensive income. As of September 25, 2022, the estimated fair values of contingent consideration payable related to our acquisitions of QuietKat, Fox Racing, Fiber Energy, Stone Glacier, and HEVI-Shot are $11,824, $11,400, $3,625, $9,939 and $277, respectively. See Note 4, Acquisitions, for additional information.

Contingent consideration liabilities are reported under the following captions in the condensed consolidated balance sheets:


	September 25, 2022		March 31, 2022
Other current liabilities	$	21,837	$	96
Other long-term liabilities	15,228		36,994
Total	$	37,065	$	37,090

Following is a summary of our contingent consideration liability Level 3 activity during fiscal year 2023:


Balance, March 31, 2022	$	37,090
Acquisition of Fox Racing	11,400
Decrease in fair value	(11,425)
Balance, September 25, 2022	$	37,065

Disclosures about the Fair Value of Financial Instruments

The carrying amount of our receivables, inventory, accounts payable, and accrued liabilities as of September 25, 2022 and March 31, 2022 approximates fair value because of the short maturity of these instruments. The carrying values of cash and cash equivalents as of September 25, 2022 and March 31, 2022 are categorized within Level 1 of the fair value hierarchy.

The table below discloses information about carrying values and estimated fair value relating to our financial assets and liabilities:


	September 25, 2022				March 31, 2022
	Carrying amount		Fair value		Carrying amount		Fair value
Fixed-rate debt (1)	$	500,000	$	366,500	$	500,000	$	460,000
Variable-rate debt (2)	820,000		820,000		170,000		170,000

(1) Fixed rate debt —In fiscal year 2021, we issued $500,000 aggregate principal amount of 4.5% Senior Notes which will mature on March 15, 2029. These notes are unsecured and senior obligations. The fair value of the fixed-rate debt is based on market quotes for each issuance. We consider these to be Level 2 instruments. See Note 13, Long-term Debt, for additional information on long-term debt, including certain risks and uncertainties.

(2) Variable rate debt— The carrying value of the amounts outstanding under our 2022 ABL Revolving Credit Facility and 2022 Term Loan approximates the fair value because the interest rates are variable and reflective of market rates as of September 25, 2022. The fair value of this debt is categorized within Level 2 of the fair value hierarchy based on the observable market borrowing rates. See Note 13, Long-term Debt, for additional information on our credit facilities, including certain risks and uncertainties.

We measure certain nonfinancial assets at fair value on a nonrecurring basis if certain indicators are present. These assets include long-lived assets that are written down to fair value when they are held for sale or determined to be impaired.

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3. Leases

We lease certain warehouse and distribution space, manufacturing space, office space, retail locations, equipment, and vehicles. All of these leases are classified as operating leases. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. These rates are assessed on a quarterly basis. The operating lease assets also include any lease payments made less lease incentives. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For operating leases, expense is recognized on a straight-line basis over the lease term. Variable lease payments associated with our leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. Tenant improvement allowances are recorded as leasehold improvements with an offsetting adjustment included in our calculation of its right-of-use asset.

Many leases include one or more options to renew, with renewal terms that can extend the lease term up to five years. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

The amounts of assets and liabilities related to our operating leases were as follows:


	Balance Sheet Caption	September 25, 2022		March 31, 2022
Assets:
Operating lease assets	Operating lease assets	$	101,942	$	78,252

Liabilities:
Current:
Operating lease liabilities	Other current liabilities	$	15,980	$	11,804
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	96,663		80,083
Total lease liabilities		$	112,643	$	91,887

The components of lease expense are recorded to cost of sales and selling, general, and administration expenses in the condensed consolidated statements of comprehensive income. The components of lease expense were as follows:


	Three months ended				Six months ended
	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Fixed operating lease costs (1)	$	7,089	$	5,386	$	12,894	$	10,502
Variable operating lease costs	995		914		1,458		1,583
Operating and sub-lease income	(156)		(107)		(307)		(151)
Net Lease costs	$	7,928	$	6,193	$	14,045	$	11,934

(1) Includes short-term leases


	September 25, 2022		March 31, 2022
Weighted Average Remaining Lease Term (Years):
Operating leases	8.61		8.65

Weighted Average Discount Rate:
Operating leases	8.28	%	7.99	%

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The approximate minimum lease payments under non-cancelable operating leases as of September 25, 2022 are as follows:


Remainder of fiscal year 2023	$	12,060
Fiscal year 2024	24,320
Fiscal year 2025	18,617
Fiscal year 2026	16,940
Fiscal year 2027	16,012
Thereafter	75,219
Total lease payments	163,168
Less imputed interest	(50,525)
Present value of lease liabilities	$	112,643

Supplemental cash flow information related to leases is as follows:


	Six months ended
	September 25, 2022		September 26, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	10,409	$	8,966
Operating lease assets obtained in exchange for lease liabilities:
Operating leases	30,378		5,785

4. Acquisitions

Simms Fishing

During the second quarter of fiscal year 2023, we acquired Simms Fishing Products (Simms), a premium fishing brand and leading manufacturer of waders, outerwear, footwear and technical apparel. The results of this business are reported within the Outdoor Products segment. We accounted for the acquisition as a business combination using the acquisition method of accounting, and performed a preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as post-close working capital adjustments becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acquisition-driven anticipated cost savings and synergies. Assembled workforce is not recognized separate and apart from goodwill as it is neither separable nor contractual in nature. The acquisition is not significant to our consolidated financial statements and as such we have not included disclosures of the allocation of the purchase price or any pro forma information.

Fox Racing

During the second quarter of fiscal year 2023, we acquired Fox (Parent) Holdings, Inc. (“Fox Racing”), for a base purchase price of $540,000, subject to certain customary adjustments for cash and debt, transaction expenses, and working capital. In connection with the acquisition, we refinanced our 2021 ABL Revolving Credit Facility by entering into the 2022 ABL Revolving Credit Facility, which provides for a $600,000 senior secured asset-based revolving credit facility, and a $350,000 term loan facility (the “2022 Term Loan”). The proceeds of the Term Facility, together with the proceeds of a borrowing under the ABL Credit Facility, were used to finance the acquisition and to pay related fees and expenses. See Note 13, Long-term Debt, for additional information. The agreement includes up to an additional $50,000 of contingent consideration payable to Seller and certain individuals during the second quarter of fiscal year 2024 if Fox Racing achieves certain adjusted Earnings Before Interest, Tax, Depreciation, and Amortization ("EBITDA") targets during the period beginning on January 1, 2022 and ending on December 31, 2022. The initial fair value of the contingent consideration was $11,400, and is included in the total purchase consideration below. See Note 2, Fair Value of Financial Instruments, for additional information related to the fair value calculation of contingent consideration.

The results of this business are reported within the Sports Protection operating segment and the Outdoor Products reportable segment. We accounted for the acquisition as a business combination using the acquisition method of accounting, and performed a preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities

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assumed based on their estimated fair values as of the acquisition date. The preliminary fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as post-close working capital adjustments becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acquisition-driven anticipated cost savings and synergies. Assembled workforce is not recognized separate and apart from goodwill as it is neither separable nor contractual in nature.

Fox Racing preliminary purchase price allocation:


	August 5, 2022
Cash consideration to the Seller	$	559,782
Cash held in escrow to cover purchase price adjustments	5,000
Estimated working capital true-up	6,216
Fair value of contingent consideration payable	11,400
Total estimated purchase consideration	$	582,398
Fair value of assets acquired:
Accounts receivable	$	39,140
Inventories	95,759
Intangible assets	253,600
Property, plant, and equipment	29,060
Operating lease assets	16,078
Other current assets	16,743
Other long-term assets	5,347
Total assets	455,727
Fair value of liabilities assumed:
Accounts payable	18,584
Long-term operating lease liabilities	11,971
Deferred income taxes	59,986
Other liabilities	38,998
Other long-term liabilities	41
Total liabilities	129,580
Net assets acquired	326,147
Goodwill	$	256,251

Fox Racing intangible assets above include:

Value

Useful life (years)

Tradenames

106,200

Indefinite

Customer relationships

147,400

5 to 15

Fox Racing supplemental pro forma data:

Fox's net sales of $57,379 and net income of $4,805 since the acquisition date, August 5, 2022, were included in our consolidated results for the three months ended September 25, 2022, and are reflected in the Outdoor Products reportable segment.

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The following unaudited pro forma financial information presents our results as if the Fox Racing acquisition had occurred on April 1, 2021:


	Three months ended				Six months ended
	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Sales, net	$	809,357	$	866,547	$	1,690,145	$	1,597,835
Net income	94,611		139,541		218,657		233,704

The unaudited supplemental pro forma data above includes the following significant non-recurring adjustments to net income to account for certain costs which would have been incurred if the Fox Racing acquisition had been completed on April 1, 2021:


	Three months ended				Six months ended
	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Fees for advisory, legal, and accounting services (1)	$	(4,051)	$	—	$	(5,965)	$	5,965
Inventory step-up, net (2)	(2,515)		3,772		(2,515)		$7,544
Interest (3)	3,197		7,605		10,627		15,440
Depreciation (4)	180		367		719		699
Amortization (5)	1,176		3,064		4,245		6,126
Management Fees (6)	(133)		(353)		(530)		(707)
Income tax provision (benefit) (7)	39		(3,614)		(2,142)		(8,270)

(1) During the three months and six months ended September 25, 2022, we incurred a total of $4,051 and $5,965 in acquisition related costs, including legal and other professional fees, all of which were reported in selling, general, and administrative expense in the condensed consolidated statements of comprehensive income. This adjustment is to show the results as if those fees were incurred during the first quarter of fiscal year 2022.

(2) Adjustment reflects the increased cost of goods sold expense resulting from the fair value step-up in inventory, which was expensed over inventory turns.

(3) Adjustment for the estimated interest expense and debt issuance amortization expense on $580,000 in borrowings from Vista's 2022 ABL Revolving Credit Facility and 2022 Term Loan, used to finance the acquisition of Fox Racing. The interest rate assumed for purposes of preparing this pro forma financial information is 5.58%. This rate is the weighted average interest rate for our borrowings under the 2022 ABL Revolving Credit Facility and 2022 Term Loan as of September 25, 2022.

(4) Adjustment for depreciation related to the revised fair-value basis of the acquired property, plant and equipment and change in estimated useful lives.

(5) Adjustment for amortization of acquired intangible assets.

(6) Represents an adjustment for management fees historically charged by the previous owner of Fox Racing under the terms of their management agreement.

(7) Income tax effect of the adjustments made at a blended federal, state, and international statutory rate adjusted for any non-deductible acquisition costs.

Stone Glacier

During the fourth quarter of fiscal year 2022, we acquired Stone Glacier, a premium brand focused on ultralightweight, performance hunting gear designed for backcountry use. The addition of Stone Glacier allows us to enter the packs, camping equipment, and technical apparel categories with a fast-growing brand and provide a foundation for us to leverage camping category synergies. The results of this business are reported within the Outdoor Products segment. Contingent consideration with an initial fair value of $9,939 was included in the purchase price. See Note 2, Fair Value of Financial Instruments, for additional information related to the fair value calculation. We accounted for the acquisition as a business combination using the acquisition method of accounting, and performed a preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The preliminary

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fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information, such as post-close working capital adjustments becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The acquisition is not significant to our consolidated financial statements and as such we have not included disclosures of the allocation of the purchase price or any pro forma information.

Foresight Sports

During the third quarter of fiscal year 2022, we acquired Foresight Sports ("Foresight"), a leading designer and manufacturer of golf performance analysis, entertainment, and game enhancement technologies for approximately $470,772. The purchase agreement includes $5,599 related to employee retention payments, which will be accounted for separately from the business combination as post combination compensation expense. Contingent payments of up to $25,000 if certain net sales targets are met will also be accounted for separately from the business combination as post combination compensation expense. We used cash on hand and available liquidity under our 2021 ABL Revolving Credit Facility to complete the transaction. The results of this business are reported within the Outdoor Products segment.

We accounted for the acquisition as a business combination using the acquisition method of accounting. The purchase price allocation below was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The fair values of acquired assets and liabilities assumed represent management’s estimate of fair value and are subject to change if additional information becomes available. We expect to finalize the purchase price allocation as soon as practicable within the measurement period, but not later than one year following the acquisition date. The excess of the consideration transferred over the estimated fair value of the net assets received has been recorded as goodwill. The factors that contributed to the recognition of goodwill primarily relate to acquisition-driven anticipated cost savings and synergies. Assembled workforce is not recognized separate and apart from goodwill as it is neither separable nor contractual in nature. The goodwill is deductible for tax purposes.

Foresight preliminary purchase price allocation:


	September 28, 2021
Total consideration transferred			$	470,772
Fair value of assets acquired:
Accounts receivable	$	2,806
Inventories	10,780
Intangible assets	131,500
Property, plant, and equipment	1,870
Operating lease assets	6,506
Other long-term assets	2,006
Total assets	155,468
Fair value of liabilities assumed:
Accounts payable	6,177
Customer deposits	2,084
Long-term operating lease liabilities	5,961
Contract liabilities	2,992
Other liabilities	1,729
Other long-term liabilities	9,182
Total liabilities	28,125
Net assets acquired			127,343
Goodwill			$	343,429

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Foresight intangible assets above include:


	Value		Useful life (years)
Tradenames	$	42,500	20
Patented technology	19,900		5 to 10
Customer relationships	69,100		5 to 15

5. Derivative Financial Instruments

Commodity Price Risk

We entered into various commodity forward contracts during fiscal year 2023. These contracts are used to hedge our exposure to price fluctuations on lead we purchase for raw material components in our ammunition manufacturing process and are designated and qualify as effective cash flow hedges. The effectiveness of cash flow hedge contracts is assessed quantitatively at inception and qualitatively thereafter considering the transactions critical terms and counterparty credit quality.

The gains and losses on these hedges are included in accumulated other comprehensive loss and are reclassified into earnings at the time the forecasted revenue or expense is recognized. The gains or losses on the lead forward contracts are recorded in inventory as the commodities are purchased and in cost of sales when the related inventory is sold. As of September 25, 2022, we had outstanding lead forward contracts on approximately 10.1 million pounds of lead. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the related change in fair value of the derivative instrument would be reclassified from accumulated other comprehensive loss and recognized in earnings. The liability related to the lead forward contracts is immaterial and is recorded as part of other current liabilities and other long-term liabilities.

Foreign Exchange Risk

To manage our foreign exchange risk, we entered into forward contracts to reduce the variability associated with exchange rate fluctuations. We hedge a portion of our foreign subsidiaries inventory purchases and intercompany transactions executed in U.S. dollars, which is different than their functional currency. Certain U.S. subsidiaries also hedge a portion of their future sales in Canadian Dollars. These forward contracts are not designated as hedging instruments.

All unrealized gains and losses as shown as of September 25, 2022 will be recognized in the consolidated statements of comprehensive income in other income, net within the next twelve months at then-current value. Realized gains and losses are recognized in the condensed consolidated statement of comprehensive income, and is recorded as part of other income, net. The fair value of the foreign exchange forward contracts is immaterial and is recorded as part of other current assets. As of September 25, 2022, we had outstanding foreign currency forward contracts in place to purchase U.S. Dollars and sell foreign currencies in the following amounts:


	Notional amount of currency
Foreign currency:
Euro	$	4,670
British Pounds	2,693
Canadian Dollars	6,724
Total	$	14,087

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6. Revenue Recognition

The following tables disaggregate our net sales by major product category:


	Three months ended
	September 25, 2022						September 26, 2021 (5)
	Sporting Products		Outdoor Products		Total		Sporting Products		Outdoor Products		Total
Sporting Products (1)	$	432,489	$	—	$	432,489	$	450,193	$	—	$	450,193
Outdoor Accessories (2)	—		73,995		73,995		—		116,156		116,156
Action Sports (3)	—		150,761		150,761		—		104,645		104,645
Outdoor Recreation (4)	—		124,433		124,433		—		107,466		107,466
Total	$	432,489	$	349,189	$	781,678	$	450,193	$	328,267	$	778,460

Geographic Region:
United States	$	396,302	$	229,657	$	625,959	$	431,704	$	245,502	$	677,206
Rest of the World	36,187		119,532		155,719		18,489		82,765		101,254
Total	$	432,489	$	349,189	$	781,678	$	450,193	$	328,267	$	778,460

	Six months ended
	September 25, 2022						September 26, 2021 (5)
	Sporting Products		Outdoor Products		Total		Sporting Products		Outdoor Products		Total
Sporting Products (1)	$	943,116	$	—	$	943,116	$	814,481	$	—	$	814,481
Outdoor Accessories (2)	—		142,080		142,080		—		215,187		215,187
Action Sports (3)	—		240,818		240,818		—		196,787		196,787
Outdoor Recreation (4)	—		258,276		258,276		—		214,917		214,917
Total	$	943,116	$	641,174	$	1,584,290	$	814,481	$	626,891	$	1,441,372

Geographic Region:
United States	$	877,381	$	432,112	$	1,309,493	$	761,982	$	473,178	$	1,235,160
Rest of the World	65,735		209,062		274,797		52,499		153,713		206,212
Total	$	943,116	$	641,174	$	1,584,290	$	814,481	$	626,891	$	1,441,372

(1) Sporting Products includes the Ammunition operating segment.

(2) Outdoor Accessories includes the Outdoor Accessories operating segment.

(3) Action Sports includes the operating segments: Sports Protection and Cycling.

(4) Outdoor Recreation includes the operating segments: Hydration, Outdoor Cooking, Golf, Fishing and our Stone Glacier businesses.

(5) During the third quarter of fiscal year 2022, we modified and renamed our reportable segments. Accordingly, prior comparative periods have been restated to conform to the change.

For the majority of our contracts with customers, we recognize revenue for our products at a point in time upon the transfer of control of the products to the customer, which typically occurs upon shipment and coincides with our right to payment, the transfer of legal title, and the transfer of the significant risks and rewards of ownership of the product. For our contracts that include bundled hardware and software sales, revenue related to delivered hardware and bundled software is recognized when control has transferred to the customer, which typically occurs upon shipment. Revenue allocated to unspecified software update rights is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided.

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Typically, our contracts require customers to pay within 30-60 days of product delivery with a discount available to some customers for early payment. In some cases, we offer extended payment terms to customers. However, we do not consider these extended payment terms to be a significant financing component of the contract because the payment terms are less than a year.

In limited circumstances, our contract with a customer may have shipping terms that indicate a transfer of control of the products upon their arrival at the destination rather than upon shipment. In those cases, we recognize revenue only when the product reaches the customer destination, which may require us to estimate the timing of transfer of control based on the expected delivery date. In all cases, however, we consider our costs related to shipping and handling to be a cost of fulfilling the contract with the customer.

The total amount of revenue we recognize for the sale of our products reflects various sales adjustments for discounts, returns, refunds, allowances, rebates, and other customer incentives. These sales adjustments can vary based on market conditions, customer preferences, timing of customer payments, volume of products sold, and timing of new product launches. These adjustments require management to make reasonable estimates of the amount we expect to receive from the customer. We estimate sales adjustments by customer or by product category on the basis of our historical experience with similar contracts with customers, adjusted as necessary to reflect current facts and circumstances and our expectations for the future. Sales taxes, federal excise taxes, and other similar taxes are excluded from revenue.

For the immaterial amount of our contracts that have multiple performance obligations, which represent promises within an arrangement that are distinct, we allocate revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). When available, we use observable prices to determine SSPs. When observable prices are not available, SSPs are established that reflect our best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. We allocate revenue and any related discounts to these performance obligations based on their relative SSPs.

Incentives in the form of cash paid to the customer (or a reduction of a customer cash payment to us) typically are recognized as a reduction of sales unless the incentive is for a distinct benefit that we receive from the customer, e.g., advertising or marketing.

We pay commissions to some of our employees based on agreed-upon sales targets. We recognize the incremental costs of obtaining a contract as an expense when incurred because our sales contracts with commissions are a year or less.

7. Earnings Per Share

The computation of basic earnings per share ("EPS") is based on the weighted average number of shares that were outstanding during the period. The computation of diluted EPS is based on the number of basic weighted average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common shares, such as common stock to be issued upon exercise of options, contingently issuable shares and restricted stock units, using the treasury stock method.

In computing EPS for the periods presented, earnings, as reported for each respective period, is divided by the number of shares below:


	Three months ended				Six months ended
(Amounts in thousands except per share data)	September 25, 2022		September 26, 2021		September 25, 2022		September 26, 2021
Numerator:
Net income	$	93,455	$	139,540	$	219,470	$	242,265
Denominator:
Weighted-average number of common shares outstanding basic:	56,553		57,353		56,520		57,732
Dilutive effect of share-based awards (1)	1,261		1,863		1,578		1,845
Diluted shares	57,814		59,216		58,098		59,577
Earnings per common share:
Basic	$	1.65	$	2.43	$	3.88	$	4.20
Diluted	$	1.62	$	2.36	$	3.78	$	4.07

(1) Potentially dilutive securities, which were not included in the computation of diluted earnings per share, because either the effect would have been anti-dilutive, or the options’ exercise prices were greater than the average market price of the

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common stock, were 290 and 293 for the three and six months ended September 25, 2022, respectively, and 0 and 527 for the three and six months ended September 26, 2021, respectively.

8. Receivables

Our trade account receivables are recorded at net realizable value, which includes an appropriate allowance for estimated credit losses under the expected credit loss model. We maintain an allowance for credit losses related to accounts receivable for future expected credit losses resulting from the inability or unwillingness of our customers to make required payments. We estimate the allowance based upon historical bad debts, current customer receivable balances, age of customer receivable balances and the customers' financial condition, and in relation to a representative pool of assets consisting of a large number of customers with similar risk characteristics. The allowance is adjusted as appropriate to reflect differences in current conditions as well as changes in forecasted macroeconomic conditions. Receivables that do not share risk characteristics are evaluated on an individual basis, including those associated with customers that have a higher probability of default.

Net receivables are summarized as follows:


	September 25, 2022		March 31, 2022
Trade receivables	$	441,425	$	357,584
Other receivables	9,248		13,699
Less: allowance for estimated credit losses and discounts	(18,970)		(14,510)
Net receivables	$	431,703	$	356,773

No customers represented more than 10% of our total trade receivables balance as of September 25, 2022. Walmart represented 14% of our total trade receivables balance as of March 31, 2022.

The following provides a reconciliation of the activity related to the allowance for estimated credit losses for the six months ended September 25, 2022:


Balance, March 31, 2022	$	14,510
Provision for credit losses	2,178
Write-off of uncollectible amounts, net of recoveries	(128)
Purchase accounting (Note 4)	2,410
Balance, September 25, 2022	$	18,970

Note Receivable is summarized as follows:


	September 25, 2022		March 31, 2022
Principal	$	12,000	$	12,000
Less: unamortized discount	(1,835)		(2,308)
Note receivable, net, included within Deferred charges and other non-current assets	$	10,165	$	9,692

9. Inventories

Current net inventories consist of the following:


	September 25, 2022		March 31, 2022
Raw materials	$	245,851	$	220,425
Work in process	67,067		60,390
Finished goods	465,056		362,161
Net inventories	$	777,974	$	642,976

We consider inventories to be long-term if they are not expected to be sold within one year. Long-term inventories are presented on the balance sheet net of reserves within deferred charges and other non-current assets and totaled $32,532 and $14,662 as of September 25, 2022 and March 31, 2022, respectively.

10. Accumulated Other Comprehensive Loss (AOCL)

The components of AOCL, net of income taxes, are as follows:


	September 25, 2022		March 31, 2022
Derivatives	$	(634)	$	(356)
Pension and other postretirement benefits liabilities	(69,687)		(71,075)
Cumulative translation adjustment	(7,119)		(5,248)
Total AOCL	$	(77,440)	$	(76,679)

The following tables detail the amounts reclassified from AOCL to earnings as well as the changes in derivatives, pension and other postretirement benefits, and foreign currency translation, net of income tax:


	Three months ended September 25, 2022								Six months ended September 25, 2022
	Derivatives		Pension and other postretirement benefits liabilities		Cumulative translation adjustment		Total		Derivatives		Pension and other postretirement benefits liabilities		Cumulative translation adjustment		Total
Beginning balance in AOCL	$	(347)	$	(70,381)	$	(5,721)	$	(76,449)	$	(356)	$	(71,075)	$	(5,248)	$	(76,679)
Change in fair value of derivatives	(324)		—		—		(324)		(249)		—		—		(249)
Net losses (gains) reclassified from AOCL	37		—		—		37		(29)		—		—		(29)
Net actuarial losses reclassified from AOCL (1)	—		694		—		694		—		1,388		—		1,388
Net change in cumulative translation adjustment	—		—		(1,398)		(1,398)		—		—		(1,871)		(1,871)
Ending balance in AOCL	$	(634)	$	(69,687)	$	(7,119)	$	(77,440)	$	(634)	$	(69,687)	$	(7,119)	$	(77,440)

(1) Amounts related to our pension and other postretirement benefits that were reclassified from AOCL were recorded as a component of net periodic benefit cost for each period presented.


	Three months ended September 26, 2021								Six months ended September 26, 2021
	Derivatives		Pension and other postretirement benefits liabilities		Cumulative translation adjustment		Total		Derivatives		Pension and other postretirement benefits liabilities		Cumulative translation adjustment		Total
Beginning balance in AOCL	$	224	$	(77,440)	$	(4,984)	$	(82,200)	$	161	$	(78,166)	$	(5,190)	$	(83,195)
Change in fair value of derivatives	118		—		—		118		767		—		—		767
Net (gains) reclassified from AOCL	(554)		—		—		(554)		(1,140)		—		—		(1,140)
Net actuarial losses reclassified from AOCL (1)	—		801		—		801		—		1,599		—		1,599
Prior service costs reclassified from AOCL (1)	—		(95)		—		(95)		—		(167)		—		(167)
Net change in cumulative translation adjustment	—		—		(337)		(337)		—		—		(131)		(131)
Ending balance in AOCL	$	(212)	$	(76,734)	$	(5,321)	$	(82,267)	$	(212)	$	(76,734)	$	(5,321)	$	(82,267)

(1) Amounts related to our pension and other postretirement benefits that were reclassified from AOCL were recorded as a component of net periodic benefit cost for each period presented.

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11. Goodwill and Intangible Assets

The carrying value of goodwill by reportable segment was as follows:


	Sporting Products		Outdoor Products		Total
Balance, March 31, 2022	$	86,105	$	395,752	$	481,857
Acquisitions	—		322,963		322,963

Balance, September 25, 2022	$	86,105	$	718,715	$	804,820

See Note 4, Acquisitions, for additional information on business combinations that occurred during the second fiscal quarter of fiscal year 2023.

Intangible assets by major asset class consisted of the following:


	September 25, 2022						March 31, 2022
	Gross carrying amount		Accumulated amortization		Total		Gross carrying amount		Accumulated amortization		Total
Trade names	$	113,915	$	(27,302)	$	86,613	$	113,915	$	(23,756)	$	90,159
Patented technology	36,854		(14,845)		22,009		36,854		(13,324)		23,530
Customer relationships and other	528,657		(131,282)		397,375		328,168		(117,664)		210,504
Total	679,426		(173,429)		505,997		478,937		(154,744)		324,193
Non-amortizing trade names	292,203		—		292,203		135,602		—		135,602
Net intangible assets	$	971,629	$	(173,429)	$	798,200	$	614,539	$	(154,744)	$	459,795

Amortization expense was $10,947 and $5,419 for the three months ended September 25, 2022 and September 26, 2021, respectively, and $18,983 and $10,417 for the six months ended September 25, 2022 and September 26, 2021, respectively.

As of September 25, 2022, we expect amortization expense related to these assets to be as follows:


Remainder of fiscal year 2023	$	25,242
Fiscal year 2024	50,484
Fiscal year 2025	50,466
Fiscal year 2026	47,457
Fiscal year 2027	46,007
Thereafter	286,341
Total	$	505,997

12. Other Current Liabilities

The major categories over 5% of current liabilities are as follows:


	September 25, 2022		March 31, 2022
Accrual for in-transit inventory	$	24,621	$	11,620
Other	169,381		115,560
Total other current liabilities	$	194,002	$	127,180

We provide consumer warranties against manufacturing defects on certain products with warranty periods ranging from one year to the expected lifetime of the product. The estimated costs of such product warranties are recorded at the time the sale is recorded based upon actual past experience, our current production environment as well as specific and identifiable warranties as applicable. The warranty liability recorded at each balance sheet date reflects the estimated liability for warranty coverage for products delivered based on historical information and current trends.

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The following is a reconciliation of the changes in our product warranty liability during the periods presented:


Balance, March 31, 2022	$	9,073
Payments made	(1,633)
Warranties issued	1,680
Changes related to pre-existing warranties and other adjustments	376
Balance, September 25, 2022	$	9,496

13. Long-term Debt


Long-term debt consisted of the following:	September 25, 2022		March 31, 2022
2021 ABL Revolving Credit Facility	$	—	$	170,000
2022 ABL Revolving Credit Facility	470,000		—
2022 Term Loan	350,000		—
Total Principal Amount of Credit Agreements	820,000		170,000
4.5% Senior Notes	500,000		500,000
Less: unamortized deferred financing costs	(12,738)		(3,886)
Carrying amount of long-term debt	1,307,262		666,114
Less: current portion	(140,000)		—
Carrying amount of long-term debt, excluding current portion	$	1,167,262	$	666,114

Credit Agreements—On August 5, 2022, we refinanced our 2021 ABL Revolving Credit Facility by entering into the 2022 ABL Revolving Credit Facility, which provides for a $600,000 senior secured asset-based revolving credit facility. The amount available under the 2022 ABL Revolving Credit Facility is the lesser of the total commitment of $600,000 or a borrowing base based on percentages of eligible receivables, inventory, and cash, minus certain reserves, but, in each case, subject to the excess availability financial covenant under the 2022 ABL Revolving Credit Facility described below. As of September 25, 2022, the Excess Availability, or the amount available to borrow under the 2022 ABL Revolving Credit Facility, based on the borrowing base less outstanding borrowings of $470,000 and outstanding letters of credit of $15,445, less the minimum required borrowing base of $60,000 , was $54,555. The 2022 ABL Revolving Credit Facility matures on March 31, 2026 (the “Maturity Date”), subject to a customary springing maturity in respect of the 4.5% Notes due 2029 (described below) and the 2022 Term Loan (described below). Any outstanding revolving loans under the 2022 ABL Revolving Credit Facility will be payable in full on the Maturity Date.

Concurrently with the effectiveness of the 2022 ABL Revolving Credit Facility, we also obtained a $350,000 senior secured asset-based term loan facility (the “2022 Term Loan”). The 2022 Term Loan matures on August 5, 2024 (the "Term Maturity Date") and is subject to quarterly principal payments, commencing with the fiscal quarter ending December 23, 2022, in an amount equal to (i) 12.5% of the original principal amount of the 2022 Term Loan if the aggregate outstanding principal balance of the 2022 Term Loan exceeds the Term Loan Formula Threshold described below, or (ii) 10.0% of the original principal amount of the 2022 Term Loan if the aggregate outstanding principal balance of the 2022 Term Loan is equal to or less than the Term Loan Formula Threshold described below. As of September 25, 2022, our quarterly principal payments are equal to 10.0% of the original principal amount of the 2022 Term Loan, subject to the delivery of our Formula Certificate due on October 15, 2022. The 2022 Term Loan is also subject to certain mandatory prepayment requirements, including with respect to the net cash proceeds from the sale of certain collateral, subject to our rights to reinvest such proceeds, and a percentage of our excess cash flow, to be calculated annually. The Term Loan Formula Threshold is based on a percentage of the appraisal value of eligible intellectual property, eligible machinery and equipment, and the fair market value of eligible real property minus certain reserves. Any outstanding term loans under the 2022 Term Loan will be payable in full on the Term Maturity Date.

Borrowings under the 2022 ABL Revolving Credit Facility bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.25% to 0.75% or the sum of a Term Secured Overnight Financing Rate ("Term SOFR") plus a credit spread adjustment of 0.10%, plus a margin ranging from 1.25% to 1.75%. The margins vary based on our Average Excess Availability under the 2022 ABL Revolving Credit Facility. As of September 25, 2022, the margin under the 2022 ABL Revolving Credit Facility was 0.5% for base rate loans and 1.5% for Term SOFR loans. We pay a commitment fee on the unused commitments under the 2022 ABL Revolving Credit Facility of 0.175% per annum.

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Borrowings under the 2022 Term Loan bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 2.50% to 3.00% or the sum of Term SOFR plus a credit spread adjustment of 0.10%, plus a margin ranging from 3.50% to 4.00%. The margins vary based on our Term Loan Formula Threshold under the 2022 Term Loan. As of September 25, 2022, the margin under the 2022 Term Loan was 3.00% for base rate loans and 4.00% for Term SOFR loans.

As of September 25, 2022, the weighted average interest rate for our borrowings under the 2022 ABL Revolving Credit Facility and 2022 Term Loan was 5.58%.

We incurred debt issuance costs related to the 2022 ABL Revolving Credit Facility of approximately $6,646 and unamortized debt issuance costs of $785 related to the 2021 ABL Credit Facility were written off during fiscal year 2023. This expense is included in interest expense in the condensed consolidated statements of comprehensive income. The remaining unamortized debt issuance costs of approximately $11,133, including remaining unamortized debt issuance costs related to the 2021 ABL Credit Facility, are being amortized over the term of the 2022 ABL Revolving Credit Facility. The debt issuance costs associated with the 2022 ABL Revolving Credit Facility are included within other current and non-current assets.

We incurred debt issuance costs related to the 2022 Term Loan of approximately $9,894. The debt issuance costs associated with the 2022 Term Loan are being amortized to interest expense over 2 years.

Substantially all domestic tangible and intangible assets of Vista Outdoor and our domestic subsidiaries are pledged as collateral under the 2022 ABL Revolving Credit Facility and 2022 Term Loan.

4.5% Notes—In fiscal year 2021, we issued $500,000 aggregate principal amount of 4.5% Notes that mature on March 15, 2029. These notes are unsecured and senior obligations. Interest on the notes is payable semi-annually in arrears on March 15 and September 15 of each year. We have the right to redeem some or all of these notes on or after March 15, 2024 at specified redemption prices. Prior to March 15, 2024, we may redeem some or all of these notes at a price equal to 100% of their principal amount plus accrued and unpaid interest to the date of redemption and a specified make-whole premium. In addition, prior to March 15, 2024, we may redeem up to 40% of the aggregate principal amount of these notes with the net cash proceeds of certain equity offerings, at a price equal to 104.5% of their principal amount plus accrued and unpaid interest to the date of redemption. Debt issuance costs of approximately $4,491 are being amortized to interest expense over eight years, the term of the notes.

Rank and guarantees—The 2022 ABL Revolving Credit Facility and 2022 Term Loan obligations are guaranteed on a secured basis, jointly and severally and fully and unconditionally by substantially all of our domestic subsidiaries. Vista Outdoor (the parent company issuer) has no independent assets or operations. We own 100% of all of these guarantor subsidiaries. The 4.5% Notes are senior unsecured obligations of Vista Outdoor and will rank equally in right of payment with any future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness of Vista Outdoor. The 4.5% Notes are fully and unconditionally guaranteed, jointly and severally, by our existing and future domestic subsidiaries that guarantee indebtedness under our 2022 ABL Revolving Credit Facility and 2022 Term Loan or that incur or guarantee certain of our other indebtedness, or indebtedness of any subsidiary guarantor, in an aggregate principal amount in excess of $75,000. These guarantees are senior unsecured obligations of the applicable subsidiary guarantors. The guarantee by any subsidiary guarantor of our obligations in respect of the 4.5% Notes will be released in any of the following circumstances:

•if, as a result of the sale of its capital stock, such subsidiary guarantor ceases to be a restricted subsidiary

•if such subsidiary guarantor is designated as an “Unrestricted Subsidiary”

•upon defeasance or satisfaction and discharge of the 4.5% Notes

•if such subsidiary guarantor has been released from its guarantees of indebtedness under the 2022 ABL Revolving Credit Facility and 2022 Term Loan and all capital markets debt securities

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Covenants

2022 ABL Revolving Credit Facility—Our 2022 ABL Revolving Credit Facility and 2022 Term Loan impose restrictions on us, including limitations on our ability to pay cash dividends, incur debt or liens, redeem or repurchase Vista Outdoor stock, enter into transactions with affiliates, make investments, merge or consolidate with others or dispose of assets. Each of the 2022 ABL Revolving Credit Facility and 2022 Term Loan contains a financial covenant which requires that Excess Availability under the 2022 ABL Revolving Credit Facility cannot fall below the greater of (a) 10% of the line cap or (b) $57,000. As a result of this financial covenant, we must maintain Excess Availability of at least the greater of 10% of the line cap or $57,000 at all times in order to satisfy the financial covenant. In addition, as long as the 2022 Term Loan remains outstanding, we also must maintain a maximum consolidated leverage ratio (as defined in the credit agreement) of 3.00:1.00 as of the end of each fiscal quarter. Each of the 2022 ABL Revolving Credit Facility and the 2022 Term Loan includes a covenant that prohibits the spin-off of any line of business of Vista Outdoor or certain of its subsidiaries, including the expected separation of our Outdoor Products segment (the “Planned Separation”), and amendment of each such covenant will require the consent of all lenders under the applicable credit facility in order to permit the Planned Separation. Vista Outdoor anticipates that each of the 2022 ABL Revolving Credit Facility and the 2022 Term Loan will be repaid or refinanced in full prior to or upon the consummation of the Planned Separation. If we do not comply with the covenants in the 2022 ABL Revolving Credit Facility or 2022 Term Loan, the lenders under the applicable facility may, subject to customary cure rights, require the immediate payment of all amounts outstanding under such facility. As noted above, the Excess Availability less the minimum required borrowing base under the 2022 ABL Revolving Credit Facility was $54,555 as of September 25, 2022. Vista Outdoor has the option to increase the amount of the 2022 ABL Revolving Credit Facility in an aggregate principal amount not to exceed $150,000, to the extent that any one or more lenders, whether or not currently party to the 2022 ABL Revolving Credit Facility, commits to be a lender for such amount.

4.5% Notes—The indenture governing the 4.5% Notes contains covenants that, among other things, limit our ability to incur or permit to exist certain liens, sell, transfer or otherwise dispose of assets, consolidate, amalgamate, merge or sell all or substantially all of our assets, enter into transactions with affiliates, enter into agreements restricting our subsidiaries’ ability to pay dividends, incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem our capital stock, prepay, redeem or repurchase certain debt and make loans and investments.

The 2022 ABL Revolving Credit Facility, the 2022 Term Loan, and the indenture governing the 4.5% Notes contain cross-default provisions so that noncompliance with the covenants within one debt agreement could also cause a default under the other debt agreement. As of September 25, 2022, we were in compliance with the covenants of all of our debt agreements. However, we cannot provide assurance that we will be able to comply with such financial covenants in the future due to various risks and uncertainties, some of which may be beyond our control. Any failure to comply with the restrictions in the 2022 ABL Revolving Credit Facility and 2022 Term Loan may prevent us from drawing under these loans and may result in an event of default under the 2022 ABL Revolving Credit Facility and 2022 Term Loan, which default may allow the creditors to accelerate the related indebtedness and the indebtedness under our 4.5% Notes and proceed against the collateral that secures such indebtedness. We may not have sufficient liquidity to repay the indebtedness in such circumstances.

Cash paid for interest on debt, for the three months ended September 25, 2022 and September 26, 2021 totaled $12,120 and $12,200, respectively. Cash paid for interest on debt, for the six months ended September 25, 2022 and September 26, 2021 totaled $13,211 and $12,200, respectively.

14. Employee Benefit Plans

We recognized an aggregate net loss of $381 and $3 for employee defined benefit plans during the three months ended September 25, 2022 and September 26, 2021, respectively.

We recognized an aggregate net loss of $762 and $38 for employee defined benefit plans during the six months ended September 25, 2022 and September 26, 2021, respectively.

Employer contributions and distributions—We made contributions of $0 and $1,300 to our pension trust during the six months ended September 25, 2022 and September 26, 2021, respectively. No additional contributions are required and we are not expecting to make any contributions to our pension trust for the remainder of fiscal year 2023.

For those same periods, we made no contributions to our other postretirement benefit plans, and we made no distributions to retirees under our non-qualified supplemental executive retirement plan. No additional contributions are required, and we are not expecting to make any contributions to our other postretirement benefit plans, or directly to retirees under our non-qualified supplemental executive retirement plans for the remainder of fiscal year 2023.

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15. Income Taxes

Our provision for income taxes includes federal, foreign, and state income taxes. Income tax provisions for interim periods are based on the estimated effective annual income tax rates for the current year and the prior year.

The income tax provisions for the three months ended September 25, 2022 and September 26, 2021 represent effective tax rates of 20.8% and 24.5%, respectively. The decrease in the effective tax rate from the prior year quarter is primarily driven by the non-taxable contingent consideration income in the current quarter and the impact of beneficial state tax law changes.

The income tax provisions for the six months ended September 25, 2022 and September 26, 2021 represent effective tax rates of 22.7% and 24.9%, respectively. The decrease in the effective tax rate from the prior year period is primarily driven by the non-taxable contingent consideration income in the current period and the impact of beneficial state tax law changes.

The effective tax rate for the three and six months ended September 25, 2022 and September 26, 2021 is reflective of the federal statutory rate of 21% increased by the state taxes and reserves for uncertain tax positions.

Income taxes paid, net of refunds, totaled $60,068 and $47,697 for the six months ended September 25, 2022 and September 26, 2021, respectively.

We have filed amended income tax returns requesting total refunds of $42,193, which are reflected in our income tax receivable of $49,010.

We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year. The amount of unrecognized tax benefits, including interest and penalties, amounted to $29,000 and $24,719 as of September 25, 2022 and March 31, 2022, respectively. Although the timing and outcome of income tax audit settlements are uncertain, it is expected that a $3,532 reduction of the liability for uncertain tax benefits will occur in the next 12 months. The settlement of these unrecognized tax benefits could result in earnings from $0 to $2,838.

16. Contingencies

Litigation

From time-to-time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. We do not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our operating results, financial condition, or cash flows.

Environmental liabilities

Our operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those governing the discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. We are obligated to conduct investigation and/or remediation activities at certain sites that we own or operate or formerly owned or operated.

Certain of our former subsidiaries have been identified as potentially responsible parties ("PRPs"), along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, those former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our operating results, financial condition, or cash flows. We have recorded a liability for environmental remediation of $694 and $697 as of September 25, 2022 and March 31, 2022, respectively.

We could incur substantial additional costs, including cleanup costs, resource restoration, fines, and penalties or third-party property damage or personal injury claims, as a result of violations or liabilities under environmental laws or non-compliance with environmental permits. While environmental laws and regulations have not had a material adverse effect on our operating results, financial condition, or cash flows in the past, and we have environmental management programs in place to mitigate these risks, it is difficult to predict whether they will have a material impact in the future.

17. Operating Segment Information

Our business is comprised of eight operating segments, which have been aggregated into two reportable segments, Sporting Products and Outdoor Products. This is consistent with how our chief operating decision maker (CODM), our Chief Executive Officer, allocates resources and makes decisions. Our Ammunition operating segment is in its own reportable segment which has been renamed Sporting Products. We aggregate our Outdoor Accessories, Sports Protection, Outdoor

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Cooking, Hydration, Golf, Fishing, and Cycling operating segments into the Outdoor Products reportable segment. The operating segments comprising our respective reportable segments share numerous commonalities, including similar core consumers, distribution channels, and supply chains.

Our CODM relies on internal management reporting that analyzes consolidated results to the net income level and our operating segment's EBIT, which is defined as earnings before interest and income taxes. Certain corporate-related costs and other non-recurring costs are not allocated to the segments in order to present comparable results from period to period and are not utilized by management in determining segment profitability.

Our Sporting Products and Outdoor Products reportable segments generated approximately 60% and 40%, respectively, of our external sales in the six months ended September 25, 2022.

No single customer contributed 10% or more of our sales in the six months ended September 25, 2022 and September 26, 2021.

The following tables contain information utilized by management to evaluate our operating segments for the interim periods presented:


	Three months ended September 25, 2022								Six months ended September 25, 2022
	Sporting Products		Outdoor Products		(a) Corporate and other reconciling items		Total		Sporting Products		Outdoor Products		(a) Corporate and other reconciling items		Total
Sales, net	$	432,489	$	349,189	$	—	$	781,678	$	943,116	$	641,174	$	—	$	1,584,290
Gross Profit	159,138		106,771		(3,035)		262,874		360,100		199,279		(3,035)		556,344
EBIT	133,552		30,471		(32,115)		131,908		309,638		58,157		(63,462)		304,333
Depreciation and amortization	6,398		15,543		1,043		22,984		12,780		27,350		2,170		42,300


	Three months ended September 26, 2021								Six months ended September 26, 2021
	(b) Sporting Products		(b) Outdoor Products		(a) Corporate and other reconciling items		Total		(b) Sporting Products		(b) Outdoor Products		(a) Corporate and other reconciling items		Total
Sales, net	$	450,193	$	328,267	$	—	$	778,460	$	814,481	$	626,891	$	—	$	1,441,372
Gross Profit	202,601		96,320		—		298,921		351,597		189,135		(384)		540,348
EBIT	175,519		42,724		(27,504)		190,739		300,224		85,669		(51,498)		334,395
Depreciation and amortization	6,368		9,128		943		16,439		12,874		17,896		1,914		32,684

(a) Reconciling items for the three and six months ended September 25, 2022 included post-acquisition compensation expense of $3,269 and $7,600, inventory fair value step-up expenses related to acquisitions the Fox Racing and Simms acquisitions of $3,036 and $3,036, and contingent consideration fair value adjustment of $(11,313) and $(11,425), respectively. Reconciling items for the three and six months ended September 26, 2021 included a fair value step-up in inventory allocated from the HEVI-Shot acquisition of $0 and $384 and post-acquisition compensation expense of $1,245 and $1,792, respectively.

(b) During the third quarter of fiscal year 2022, we modified and renamed our reportable segments. Accordingly, prior comparative periods have been restated to conform to the change.

Sales, net exclude all intercompany sales between Sporting Products and Outdoor Products which were not material for the three and six months ended September 25, 2022 and September 26, 2021.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Amounts in thousands except per share data and unless otherwise indicated)

Forward-Looking Information is Subject to Risk and Uncertainty

Some of the statements made and information contained in this report, excluding historical information, are "forward-looking statements," including those that discuss, among other things: our plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words "believe," "expect," "anticipate," "intend," "aim," "should" and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous risks, uncertainties and other factors could cause our actual results to differ materially from the expectations described in such forward-looking statements, including the following:

•supplier capacity constraints, production or shipping disruptions or quality or price issues affecting our operating costs;

•the supply, availability and costs of raw materials and components;

•increases in commodity, energy, and production costs;

•seasonality and weather conditions;

•our ability to complete acquisitions, realize expected benefits from acquisitions and integrate acquired businesses;

•reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, accessories, or other outdoor sports and recreation products;

•disruption in the service or significant increase in the cost of our primary delivery and shipping services for our products and components or a significant disruption at shipping ports;

•risks associated with diversification into new international and commercial markets, including regulatory compliance;

•our ability to take advantage of growth opportunities in international and commercial markets;

•our ability to obtain and maintain licenses to third-party technology;

•our ability to attract and retain key personnel;

•disruptions caused by catastrophic events;

•risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders;

•our competitive environment;

•our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail;

•our ability to maintain and enhance brand recognition and reputation;

•others' use of social media to disseminate negative commentary about us, our products, and boycotts;

•the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation;

•our ability to comply with extensive federal, state and international laws, rules and regulations;

•changes in laws, rules and regulations relating to our business, such as federal and state ammunition regulations;

•risks associated with cybersecurity and other industrial and physical security threats;

•interest rate risk;

•changes in the current tariff structures;

•changes in tax rules or pronouncements;

•capital market volatility and the availability of financing;

•foreign currency exchange rates and fluctuations in those rates;

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•general economic and business conditions in the United States and our markets outside the United States, including the war in Ukraine and the imposition of sanctions on Russia, conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers; and

•risks related to our Planned Separation.

You are cautioned not to place undue reliance on any forward-looking statements we make. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal year 2022 and in the filings we make with Securities and Exchange Commission (the "SEC") from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.

Business and Products

We serve the outdoor sports and recreation markets through a diverse portfolio of well-recognized brands that provide consumers with a wide range of performance-driven, high-quality, and innovative products. Our broad range of consumers include outdoor enthusiasts, hunters and recreational shooters, athletes, as well as law enforcement and military professionals. We sell our products through a wide variety of mass, specialty and independent retailers and distributors, such as Academy, Amazon, Bass Pro Shops/Cabela's, Dick's Sporting Goods, Kiesler Police Supply, Nations Best Sports, Sports Inc., Sports South, Sportsman's Warehouse, Target, and Walmart. Some of our products are also sold directly to consumers through the relevant brand's website. We have a scalable, integrated portfolio of brands that allows us to leverage our deep customer knowledge, product development and innovation, supply chain and distribution, and sales and marketing functions across product categories to better serve our retail partners and consumers.

Reportable Segments and Products

We operate under eight operating segments, which have been aggregated into two reportable segments, Sporting Products and Outdoor Products.

•Our Sporting Products reportable segment designs, develops, distributes and manufactures ammunition, primers, components and related equipment and accessories and serves devoted hunters, recreational shooters, federal and local law enforcement agencies and the military. Ammunition products include pistol, rifle, rimfire, shotshell ammunition and primers. Our Sporting Products reportable segment consists of our Ammunition operating segment, which includes our ammunition-related businesses, including Federal, Remington, CCI, Speer, and HEVI-Shot.

•Our Outdoor Products reportable segment designs, develops, distributes and manufactures gear and equipment to enhance the outdoor experiences of a wide variety of end users, including hunters, hikers, campers, cyclists, skiers, snowboarders, anglers and golfers. Products from the businesses included in this reportable segment include sport optics and archery and hunting accessories, e-bikes, helmets, goggles and accessories for cycling, snow sports, motocross and power sports, pellet grills, cookware, pellets and camp stoves, hydration packs, water bottles, drinkware and coolers, launch monitors, laser rangefinders, GPS devices, golf simulators and other technology products, waders, sportswear, outerwear, footwear and fishing tools and accessories. Our Outdoor Products reportable segment consists of:

•Our Outdoor Accessories operating segment, which includes our Bushnell Optics, Primos, RCBS, BlackHawk!, and Eagle businesses;

•Our Sports Protection operating segment, which includes our Bell, Giro and Fox Racing businesses;

•Our Cycling operating segment, which is comprised of our QuietKat business;

•Our Outdoor Cooking operating segment, which includes our Camp Chef and Fiber Energy businesses;

•Our Hydration operating segment, which is comprised of our CamelBak business;

•Our Golf operating segment, which includes our Bushnell Golf and Foresight businesses; and

•Our Fishing operating segment, which is comprised of our Simms Fishing business.

Planned Separation of Outdoor Products and Sporting Products

On May 5, 2022, we announced that our Board of Directors has unanimously approved preparations for the separation of our Outdoor Products and Sporting Products reportable segments into two independent, publicly-traded companies. We anticipate that the transaction will be in the form of a distribution to our shareholders of 100% of the stock of Outdoor Products, which will become a new, independent publicly traded company. The distribution is intended to be tax-free to U.S. shareholders for U.S. federal income tax purposes. We currently expect the transaction will be completed in calendar year 2023, subject to

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final approval by our Board of Directors, a Form 10 registration statement being declared effective by the U.S. Securities and Exchange Commission, our receipt of the necessary regulatory approvals and satisfaction of other conditions. There can be no assurance regarding the ultimate timing of the proposed transaction or that the transaction will be completed.

We expect that the Planned Separation will create a number of benefits for Outdoor Products and Sporting Products, including:

•Enhanced strategic focus with supporting resources: Each company will have enhanced strategic focus with resources to support its specific operational needs and growth drivers.

•Tailored capital allocation priorities: Each company will have a tailored capital allocation philosophy that is better suited to support its distinctive business model and long-term goals.

•Strengthened ability to attract and retain top talent: Each company will benefit from enhanced ability to attract and retain top talent that is ideally suited to execute its strategic and operational objectives.

•Compelling value for shareholders: Each company will present a differentiated and compelling investment opportunity based on its particular business model.

•Expanded strategic opportunities: Improved focus will allow Outdoor Products to further cement its reputation as the acquirer of choice through continued M&A in the outdoor recreation products marketplace and enable Sporting Products to secure attractive partnerships with other manufacturers.

Executive Summary

Financial highlights and notable events for the three months ended September 25, 2022 included the following:

•Net sales increased $3,218, or 0.4%, over the comparable quarter last year.

◦ Sporting Products net sales decreased $17,704, or 3.9%.

◦ Outdoor Products net sales increased $20,922, or 6.4%.

•Gross profit decreased $36,047, or 12.1%, as compared to the comparable quarter last year. Gross profit margin decreased to 33.6%, a decrease of 480 basis points over the comparable quarter last year.

◦ Sporting Products gross profit decreased $43,463, or 21.5%.

◦ Outdoor Products gross profit increased $10,451, or 10.9%.

•EBIT decreased $58,831, or 30.8%, for the three months ended September 25, 2022 as compared to the three months ended September 26, 2021. EBIT margin decreased to 16.9%, a decrease of 760 basis points over the comparable quarter last year.

•Net income decreased to $93,455, or $1.62 per diluted share, compared to net income of $139,540, or $2.36 per diluted share for the comparable quarter last year.

•On August 5, 2022, we entered into a new ABL Term Loan Facility (the “2022 ABL Revolving Credit Facility”), which replaced the 2021 ABL Revolving Credit Facility. The 2022 ABL Revolving Credit Facility is comprised of a $600,000 Revolving Credit Facility and an asset-backed Term Loan of $350,000. See Note 13, Long-term Debt, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

•We acquired Fox Racing and Simms Fishing during the second fiscal quarter of 2023. See Note 4, Acquisitions, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Outlook

Sporting Products Industry

Sales of hunting and shooting-sports related products, including ammunition, are heavily influenced by hunting and recreational shooting participation rates, civil unrest and the political environment. We believe that long-term participation trends support our expectation of continued increased demand for hunting and shooting-sports related products. Participation rates have remained strong, and we are seeing an expanded demographic of users. This broadened end consumer base has resulted in a much larger total addressable market opportunity for the industry and for our company. We believe we are well-positioned to succeed and capitalize on this demand given our scale and global operating platform, which we believe is particularly difficult to replicate in the highly regulated and capital-intensive ammunition manufacturing sector.

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Outdoor Recreation Industry

We believe that long-term outdoor participation trends combined with a larger base of participants supports our expectation of continued increased demand for the innovative outdoor recreation-related products produced by our Outdoor Products brands. Rising inflation and the absence of stimulus payments have had an impact on the opening price points of certain categories. However, outdoor participation trends and demand for premium price points remain strong across our brand portfolio. We believe that demand for our Outdoor Products is being temporarily impacted by higher inflation causing a contraction in disposable income. Our Outdoor Products brands hold a strong competitive position in the marketplace, and we intend to further differentiate our brands through focused research and development and marketing investments including increased use of social media and other digital marketing. Following significant investments in our brands’ e-commerce capabilities, both directly and through our E-Commerce Center of Excellence, we believe our brands are well-positioned to benefit from the ongoing shift in consumer shopping behavior to utilize online channels.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management on results of operations, our financial condition, liquidity, and certain other factors that may affect our future results. The following information should be read in conjunction with our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Results of Operations

Segment results for the three and six months ended September 25, 2022 compared to the three and six months ended September 26, 2021

Our net sales, gross profit, and EBIT by reportable segment and by corporate and other (where applicable) are presented below (dollars in thousands):


	Three months ended				Change				Six months ended				Change
Net Sales:	September 25, 2022		September 26, 2021 (1)		Dollars		Percent		September 25, 2022		September 26, 2021 (1)		Dollars		Percent
Sporting Products	$	432,489	$	450,193	$	(17,704)	(3.9)	%	$	943,116	$	814,481	$	128,635	15.8	%
Outdoor Products	349,189		328,267		20,922		6.4	%	641,174		626,891		14,283		2.3	%
Total net sales	$	781,678	$	778,460	$	3,218	0.4	%	$	1,584,290	$	1,441,372	$	142,918	9.9	%

Three months ended

(1) We modified the structure of our reportable segments during the third quarter of fiscal 2022. Accordingly, prior period amounts have been reclassified to conform with the current period presentation. See Note 17, Operating Segment Information, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Sporting Products— The decrease in net sales was caused by lower levels of finished goods inventory available during the quarter due to high sales in the prior fiscal quarter, partially offset by improved pricing.

Outdoor Products— The increase in net sales was driven by businesses acquired in the last twelve months and pricing, partially offset by declines in our organic businesses, primarily caused by reduced purchasing from big box retailers.

Six months ended

Sporting Products— The increase in sales was driven by higher volume in nearly all categories and improved pricing.

Outdoor Products— The increase in sales was driven by businesses acquired in the last twelve months and pricing, partially offset by declines in our organic businesses, primarily caused by reduced purchasing from big box retailers.


	Three months ended				Change				Six months ended				Change
Gross Profit:	September 25, 2022		September 26, 2021 (1)		Dollars		Percent		September 25, 2022		September 26, 2021 (1)		Dollars		Percent
Sporting Products	$	159,138	$	202,601	$	(43,463)	(21.5)	%	$	360,100	$	351,597	$	8,503	2.4	%
Outdoor Products	106,771		96,320		10,451		10.9	%	199,279		189,135		10,144		5.4	%
Corporate and other	(3,035)		—		(3,035)		—	%	(3,035)		$	(384)	(2,651)		—	%
Total gross profit	$	262,874	$	298,921	$	(36,047)	(12.1)	%	$	556,344	$	540,348	$	15,996	3.0	%
Gross profit margin	33.6%		38.4%						35.1%		37.5%

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Three months ended

Sporting Products—The decrease in gross profit was caused by increased commodity and freight costs, lower volume, and unfavorable mix. These decreases were partially offset by pricing. Gross profit margin was 36.8% compared to 45.0% in the prior year quarter.

Outdoor Products—The increase in gross profit was primarily driven by volume from businesses acquired in the last twelve months. These increases were partially offset by organic business volume declines. Gross profit margin was 30.6% compared to 29.3% in the prior year quarter.

Corporate and Other—The decrease in corporate gross profit was due to inventory step-up expenses related to acquisitions completed in the second quarter of fiscal year 2023.

Six months ended

Sporting Products—The increase in gross profit was driven by sales volume and improved pricing. These increases were partially offset by increased commodity and freight costs. Gross profit margin was 38.2% compared to 43.2% in the prior year period.

Corporate and Other—The decrease in corporate gross profit was due to inventory step-up expenses related to acquisitions completed in the second quarter of fiscal year 2023.


	Three months ended				Change				Six months ended				Change
EBIT:	September 25, 2022		September 26, 2021		Dollars		Percent		September 25, 2022		September 26, 2021		Dollars		Percent
Sporting Products	$	133,552	$	175,519	$	(41,967)	(23.9)	%	$	309,638	$	300,224	$	9,414	3.1	%
Outdoor Products	30,471		42,724		(12,253)		(28.7)	%	58,157		85,669		(27,512)		(32.1)	%
Corporate and other	(32,115)		(27,504)		(4,611)		(16.8)	%	(63,462)		(51,498)		(11,964)		(23.2)	%
Total EBIT	$	131,908	$	190,739	$	(58,831)	(30.8)	%	$	304,333	$	334,395	$	(30,062)	(9.0)	%
EBIT margin	16.9%		24.5%						19.2%		23.2%

Three months ended

Sporting Products—The decrease in EBIT was primarily caused by the decreased gross profit. EBIT margin was 30.9% compared to 39.0% in the prior year quarter.

Outdoor Products—The decrease in EBIT was primarily caused by decreased gross profit in the organic businesses, as well as increased selling, general, and administrative costs related to the businesses acquired in the past twelve months. EBIT margin was 8.7% compared to 13.0% in the prior year quarter.

Corporate and Other—The decrease in EBIT was primarily caused by increased planned separation costs, and increased transaction and transition costs, partially offset by a decrease in the fair value of the contingent consideration liability.

Six months ended

Sporting Products—The increase in EBIT was primarily driven by the increase in gross profit. EBIT margin was 32.8% compared to 36.9% in the prior year period.

Outdoor Products—The decrease in EBIT was primarily caused by decreased gross profit in the organic businesses, as well as selling, general, and administrative costs related to the businesses acquired in the past twelve months. EBIT margin was 9.1% compared to 13.7% in the prior year period.


	Three months ended				Change				Six months ended				Change
Interest expense, net:	September 25, 2022		September 26, 2021		Dollars		Percent		September 25, 2022		September 26, 2021		Dollars		Percent
Corporate and other	$	13,934	$	5,929	$	8,005	135.0	%	$	20,244	$	11,607	$	8,637	74.4	%

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For the three and six months ended September 25, 2022, the increase in interest expense is due to a higher average interest rate and debt balance, along with increased debt issuance cost associated with our debt refinancing.


	Three months ended										Six months ended
Income tax provision:	September 25, 2022		Effective Rate		September 26, 2021		Effective Rate		$ Change		September 25, 2022		Effective Rate		September 26, 2021		Effective Rate		$ Change
Corporate and other	$	(24,519)	20.8	%	$	(45,270)	24.5	%	$	20,751	$	(64,619)	22.7	%	$	(80,523)	24.9	%	$	15,904

See Note 15, Income Taxes, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details regarding income taxes.

The decrease in the effective rate for both the three and six months ended September 25, 2022 in relation to the comparable prior year periods is primarily driven by the non-taxable contingent consideration income in the current year and the impact of beneficial state tax law changes.

Financial condition

Cash increased to $66,065 at September 25, 2022 compared to $22,584 at March 31, 2022, primarily due to cash provided by operating activities and advances on the 2022 ABL Revolving Credit Facility and 2022 Term Loan, partially offset by payments for acquisitions completed in the second quarter of fiscal year 2022.

Operating Activities

Cash provided by operating activities increased by $88,222 in the six months ended September 25, 2022 compared to the prior year period. Timing of payments by customers, payments for inventory, and post-acquisition compensation payments as compared to the prior year period all contributed to the increase. These increases were partially offset by timing of payments to vendors, and timing of income tax payments.

Investing Activities

Cash used for investing activities increased by $751,165 for the six months ended September 25, 2022 compared to the prior-year period. The change was primarily driven by the acquisition of businesses during the second quarter of fiscal year 2023.

Financing Activities

Cash provided by financing activities increased by $685,455 for the six months ended September 25, 2022 compared to the prior year period. The increase relates to proceeds from the 2022 ABL Revolving Credit Facility and 2022 Term Loan, partially offset by increased payments on our credit facilities and a reduction in the repurchase of treasury shares as compared to the prior year period.

Liquidity and Capital Resources

In addition to our normal operating cash requirements, our principal future cash requirements will be to fund capital expenditures, debt repayments, employee benefit obligations, share repurchases, and any strategic acquisitions. Our short-term cash requirements for operations are expected to consist mainly of capital expenditures to maintain production facilities and working capital requirements. Our debt service requirements over the next two years consist of required interest payments due under our 4.5% Notes, 2022 Term Loan and 2022 ABL Revolving Credit Facility, and principal pre-payments due under the 2022 Term Loan. Each of the 2022 ABL Revolving Credit Facility and the 2022 Term Loan includes a covenant that prohibits the spin-off of any line of business of Vista Outdoor or certain of its subsidiaries, including the expected separation of our Outdoor Products segment (the “Planned Separation”), and amendment of each such covenant will require the consent of all lenders under the applicable credit facility in order to permit the Planned Separation. We anticipate that each of the 2022 ABL Revolving Credit Facility and the 2022 Term Loan will be repaid or refinanced in full prior to or upon the consummation of the Planned Separation.

Based on our current financial condition, management believes that our cash position, combined with anticipated generation of cash flows and the availability of funding, if needed, under our 2022 ABL Revolving Credit Facility, access to debt and equity markets, as well as other potential sources of funding including additional bank financing, will be adequate to fund future growth to service our currently anticipated long-term debt and pension obligations, make capital expenditures, and fund the 2022 Share Repurchase Program over the next 12 months. As of September 25, 2022, based on the borrowing base less outstanding borrowings of $470,000, outstanding letters of credit of $15,445, and the minimum required borrowing base of $60,000, the amount available under the 2022 ABL Revolving Credit Facility was $54,555. Our total debt as a percentage of total capitalization (total debt and stockholders' equity) was 49.4% as of September 25, 2022.

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There can be no assurance that the cost or availability of future borrowings, if any, will not be materially impacted by capital market conditions, including any disruptions to capital markets caused by COVID-19 pandemic (including the emergence and spread of vaccine resistant coronavirus variants), the war in Ukraine and imposition of sanctions on Russia, or our future financial condition and performance. Furthermore, because our 2022 ABL Revolving Credit Facility is secured in large part by receivables from our customers, a sustained deterioration in general economic conditions, including as a result of the COVID-19 pandemic (including the emergence and spread of vaccine resistant coronavirus variants) or the war in Ukraine and imposition of sanctions on Russia, that adversely affects the creditworthiness of our customers could have a negative effect on our future available liquidity under the 2022 ABL Revolving Credit Facility

Additional information about our long-term debt is presented in Note 13, Long-term Debt, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Contractual Obligations and Commitments

We leases certain warehouse, distribution and office facilities, vehicles and office equipment under operating leases. As of September 25, 2022, current and long-term operating lease liabilities of $15,980 and $96,663, respectively, were recorded in the accompanying condensed consolidated balance sheets. For further discussion on minimum lease payment obligations, see Note 3, Leases, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Except as discussed in Note 13, Long-term Debt, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, and under Liquidity and Capital Resources above, there have been no material changes with respect to the contractual obligations and commitments or off-balance sheet arrangements described in our Annual Report on Form 10-K for fiscal year 2022.

Contingencies

Litigation

From time-to-time, we are subject to various legal proceedings, including lawsuits, which arise out of and are incidental to, the conduct of our business. We do not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our operating results, financial condition, or cash flows.

Environmental Liabilities

Our operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those governing the discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. We are obligated to conduct investigations and/or remediation activities at certain sites that we own or operate or formerly owned or operated.

Certain of our former subsidiaries have been identified as potentially responsible parties ("PRPs"), along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, those former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we do not currently expect that these potential liabilities, individually or in the aggregate, will have a material adverse effect on our operating results, financial condition, or cash flows.

Critical Accounting Policies and Estimates

There have been no changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K for fiscal year 2022.

Dependence on Key Customers; Concentration of Credit

No single customer contributed 10% or more of our sales in the six months ended September 25, 2022 and September 26, 2021.

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If a key customer fails to meet payment obligations, our operating results and financial condition could be adversely affected.

Inflation and Commodity Price Risk

We are exposed to inflationary factors such as increases in labor, supplier, logistics and overhead costs that may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses, if the selling prices of our products are not able to offset these increased costs. Additionally, inflation may potentially impact demand as consumers reduce discretionary spending. We have been impacted by changes in the prices of raw materials used in production as well as changes in oil and energy costs. In particular, the prices of commodity metals, such as copper, zinc, and lead continue to be volatile. These prices generally impact our Sporting Products Segment. See Note 5, Derivative Financial Instruments, to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

We have a strategic sourcing, pricing and hedging strategy to mitigate risk from commodity price fluctuation. We will continue to evaluate the need for future price changes in light of these trends, our competitive landscape, and our financial results. If our sourcing and pricing strategy is unable to offset impacts of the commodity price fluctuations, our future results from operations and cash flows would be materially impacted.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to our operations result primarily from changes in interest rates, commodity prices, and foreign currency exchange rates. Our market risks at September 25, 2022 are similar to those disclosed in our Annual Report on Form 10-K for fiscal year 2022. The information concerning market risk set forth in Part II, Item 7A. of our Annual Report on Form 10-K for fiscal year 2022, as filed with the SEC on May 24, 2022, under the caption "Quantitative and Qualitative Disclosures About Market Risk," is hereby incorporated by reference into this Quarterly Report on Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of September 25, 2022, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) and have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended September 25, 2022, we completed the acquisition of Fox Racing. Prior to the acquisition, Fox Racing was a privately-held company and was not subject to the Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC, or other corporate governance requirements applicable to public reporting companies. As part of our ongoing integration activities, we are continuing to incorporate our controls and procedures into Fox Racing and to augment our company-wide controls to reflect the risks that may be inherent in acquisitions of privately-held companies of this magnitude.

During the six months ended September 25, 2022, there were no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. We do not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our operating results, financial condition, or cash flows.

Certain of our former subsidiaries have been identified as PRPs, along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, those former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While uncertainties exist with respect to the amounts and timing of our ultimate environmental liabilities, based on currently available information, we do not currently expect that these matters, individually or in the aggregate, will have a material adverse effect on our operating results, financial condition, or cash flows.

ITEM 1A. RISK FACTORS

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended March 31, 2022 describes the known material risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects. There have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


Exhibit Number						Description of Exhibit (and document from which incorporated by reference, if applicable)

2.1*+						Tax Matters Agreement, dated as of February 9, 2015, among Alliant Techsystems Inc. and Vista Outdoor Inc. (Exhibit 2.5 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
2.2*+						Stock Purchase Agreement, dated as of July 5, 2019, by and among Vista Outdoor Operations LLC, Caliber Company, Long Range Acquisition LLC, and Vista Outdoor Inc. (Exhibit 2.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 8, 2019).
2.3*+						Stock Purchase Agreement, dated as of September 9, 2021, by and among Vista Outdoor Inc., the Seller Guarantors named therein, the Sellers named therein, WAWGD, Inc. (d/b/a Foresight Sports, Inc.), WAWGD NEWCO, Inc., and Fortis Advisors LLC, as Seller Representative
2.4*+						Share Purchase Agreement, dated as of June 30, 2022, by and among Fox Parent Holdings, LLC, Fox (Parent) Holdings, Inc., Vista Outdoor Operations LLC and Vista Outdoor Inc. (solely in its capacity as a guarantor)(Exhibit 2.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 6, 2022)
2.5*+						Agreement and Plan of Merger, dated as of July 22, 2022, by and among Vista Outdoor Operations LLC, Trophy Merger Sub, LLC, Simms Fishing Products LLC, Shareholder Representative Services LLC, as the Equityholder Representative and Vista Outdoor Inc. (solely in its capacity as a guarantor) (Exhibit 2.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 27, 2022)
3.1*						Amended and Restated Certificate of Incorporation of Vista Outdoor Inc. (Exhibit 3.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
3.2*						Certificate of Amendment to Vista Outdoor Inc. Amended and Restated Certificate of Incorporation (Exhibit 3.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 10, 2018).
3.3*						Vista Outdoor Inc. Amended and Restated Bylaws (Exhibit 3.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 10, 2018).
4.1*						Specimen Common Stock Certificate of Vista Outdoor Inc. (Exhibit 4.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
4.2*						Description of Common Stock (Exhibit 4.7 to Vista Outdoor Inc.’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 23, 2019).
4.3*						Indenture, dated as of March 3, 2021, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 3, 2021).
4.4*						Supplemental Indenture, dated as of March 3, 2021, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (Exhibit 4.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 3, 2021).
4.5*						Form of 4.500% Senior Note due 2029 (included as Exhibit A to the Supplemental Indenture filed as Exhibit 4.2) (Exhibit 4.3 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 3, 2021).
10.1*						Asset-Based Revolving Credit Agreement dated as of August 5, 2022 among Vista Outdoor Inc., the additional borrowers from time to time party thereto, each lender from time to time party thereto, each L/C issuer from time to time party thereto and Capital One, National Association, as administrative agent. (Exhibit 10.1 to Vista Outdoor, Inc.’s Current Report on Form 8-K, filed with the Securities Exchange Commission on August 8, 2022)
10.2*						Term Loan Credit Agreement dated as of August 5, 2022, among Vista Outdoor Inc., the other borrowers from time to time party thereto, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent. (Exhibit 10.2 to Vista Outdoor, Inc.’s Current Report on Form 8-K, filed with the Securities Exchange Commission on August 8, 2022)
31.1						Certification of Principal Executive Officer.
31.2						Certification of Principal Financial Officer.
32						Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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101						The following financial statements from Vista Outdoor's Quarterly Report on Form 10-Q for the quarter ended September 25, 2022, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) /Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Stockholders’ Equity, and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104						The cover page from Vista Outdoor's Quarterly Report on Form 10-Q for the quarter ended September 25, 2022, formatted in Inline Extensible Business Reporting Language (iXBRL) (included as Exhibit 101).

* Incorporated by reference.

+ Schedules to exhibits have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Vista Outdoor agrees to furnish supplementally a copy of any omitted schedules to the SEC upon its request; provided, however, that we may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VISTA OUTDOOR INC.

Date:

November 3, 2022

By:

/s/ Sudhanshu Priyadarshi

Name:

Sudhanshu Priyadarshi

Title:

Senior Vice President and Chief Financial Officer

(On behalf of the Registrant and as Principal Financial Officer)