Vista Outdoor Inc. (NYSE:VSTO) Q3 2024 Earnings Conference Call February 1, 2024 9:00 AM ET

Company Participants

Tyler Lindwall - Vice President of Investor Relations

Jason R. Vanderbrink - co-CEO Vista Outdoor and CEO Kinetic Group

Eric C. Nyman - co-CEO of Vista Outdoor and CEO Revelyst

Andy Keegan - Chief Financial Officer, Vista Outdoor

Conference Call Participants

Matt Koranda - Roth Capital Partners

Anna Glaessgen - B. Riley

Mark Smith - Lake Street Capital Markets

Jim Chartier - Monness, Crespi and Hardt

Rommel Dionisio - Aegis Capital

Operator

Thank you all for joining. I would like to welcome you all to the third quarter fiscal year 2024 Vista Outdoor Earnings Conference Call. My name is Alex and I will be coordinating the call today. [Operator Instructions].

I would now like to pass the conference over to your host, Tyler Lindwall, Vice President of Investor Relations. Please go ahead.

Tyler Lindwall

Thank you operator and good morning to everyone joining us for our second quarter fiscal year 2024 earnings call. With me this morning is Jason R. Vanderbrink co-CEO Vista Outdoor and CEO Kinetic Group, Eric C. Nyman, co-CEO of Vista Outdoor and CEO Revelyst and Andy Keegan Chief Financial Officer, Vista Outdoor. Before we begin, I'd like to remind everyone that during today's call, we will be making several forward-looking statements, reflecting future events, and their potential effect on our operating and financial performance, and we make these statements under the safe harbor provisions of the Private Securities Litigation Reform Act. These forward-looking statements reflect our best estimates and assumptions based on our understanding of information known to us today and we are under no obligation to provide updates to these forward-looking statements. These forward-looking statements are subject to the risks and uncertainties that face Vista Outdoor and industries in which we operate and actual results may differ materially from these forward-looking statements.

We encourage you to review today's press release and Vista Outdoor's SEC filings for more information on these risk factors and uncertainties. Please also note that we have posted presentation materials on our website at investors.vistaoutdoor.com which supplement our comments this morning and include a reconciliation of non-GAAP financial measures. Andy I'll turn it over to you.

Andy Keegan

Good morning, and thank you all for joining us today as we discuss our fiscal year 2024 third quarter results. Before Jason and Eric provide you with an update on the Kinetic Group and Revelyst, I want to take a few minutes to provide an update on the status of the previously announced agreement to sell the Kinetic Group to Czechoslovak Group or CSG. I am pleased to report that the transaction process is progressing well and is on track. We have recently made large strides on the regulatory approval front, including the following: 1, HSR Act or antitrust notification was filed on November 9, 2023. On December 11, 2023, the waiting period under the HSR Act expired. 2, the United Kingdom National Security and Investment Act of 2021 Notification was filed by CSG on November 10, 2023. On November 20, 2023, the notification was accepted and on January 5, 2024, the transaction was approved and 3, CSG and Vista Outdoor filed a joint notice with the Committee on Foreign Investment in the United States, or CFIUS, with respect to the transaction, which was accepted on December 28, 2023. The transaction is currently being reviewed by CFIUS, and our team is working with CFIUS to obtain its Clearance. As a reminder, under the merger agreement, CSG has committed to take all actions necessary or advisable to obtain the necessary regulatory approvals and to pay a termination fee equal to $114.6 million if the transaction does not close due to a failure to obtain the required regulatory approvals. In addition to regulatory approvals I've noted, the transaction is subject to the approval of our stockholders and other customary closing conditions. With our S-4 proxy filed on January 16, 2024, we expect to hold our stockholder vote in the second quarter of calendar year 2024. If the regulatory approvals are complete by the time of the stockholder vote, which cannot be assured, we expect the transaction to close shortly thereafter. We reaffirm our confident belief that transaction will deliver meaningful value for our stockholders and is the best strategic alternative for maximizing value because among other reasons, the expected payment of approximately $750 million of cash consideration or $12.90 per share locks in certainty of value for our stockholders in the near term. Please reference the presentation materials for additional details regarding the tax treatment of Vista Outdoor shares at closing. Long term, we expect the separation to jump start our compelling vision for Revelyst by capitalizing its balance sheet with cash to accelerate its capital allocation strategy. We believe Revelyst will be well positioned to hit the ground running as successful independent company. Now I'll turn it over to Eric to provide an update on Revelyst for the quarter. Eric?