Q4 2024 Vista Outdoor Inc Earnings Call
Hello, and welcome to the fourth quarter fiscal year 2020 for Vista Outdoor earnings Conference call. My name is Adam and I'll be coordinating a cold spring.
Elliot: Hello, and welcome to the fourth quarter fiscal year 2024 Vista Outdoor Earnings Conference call. My name is Elliot, and I'll be coordinating your call today. If you would like to ask a question during today's event, please press star followed by one on your telephone keypad. I would now like to hand over to Tyler Lindwall, Vice President of Investor Relations. The floor is yours. Please go ahead.
Tyler Lindwall: If you would like to register a question John Schmitz event. Please press star followed by one on your telephone keypad.
Tyler Lindwall: I would now like to hand over to Tyler eventual Vice President of Investor Relations. The floor is yours. Please go ahead.
Tyler Lindwall: Thank you, operator, and good morning to everyone joining us for our fourth quarter fiscal year 2024 earnings call. With me this morning are Eric Nyman, Co-CEO of Vista Outdoor and CEO of Rebelo, Jason Vanderbrink, Co-CEO of Vista Outdoor and CEO of the Kinetic Group, and Andy Keegan, Chief Financial Officer of Vista Outdoor.
Tyler Lindwall: Thank you operator, and good morning to everyone joining us for our fourth quarter fiscal year 2024 earnings call.
Tyler Lindwall: With me. This morning are Eric Nyman co CEO of Vista, outdoor and CEO Red list.
Tyler Lindwall: Jason Vanderbeek co CEO Vista outdoor and the kinetic group and Andy Keegan, Chief Financial Officer Vista outdoor.
Tyler Lindwall: Before we begin, I'd like to remind everyone that during today's call, we'll be making several forward-looking statements reflecting future events and their potential effect on our operating and financial performance. We make these statements under the State Farmer Provisions of the Private Securities Litigation Reform Act. These four 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 this forelook and statement.
Tyler Lindwall: To 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. We make these statements are on the safe Harbor provisions of the private Securities Litigation Reform Act. These.
Tyler Lindwall: These forward looking statements reflect our best estimates and assumptions.
Tyler Lindwall: Based on our understanding of information known to US today, and we are under no obligation to provide updates to these forward looking statements.
Tyler Lindwall: These forward-looking statements are subject to the risks and uncertainties that face Vista Outdoor and the industries in which we operate, and actual results may differ materially from these forward-looking statements. We encourage you to review our quarterly earnings, 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 reconciliations of non-GAAP financial measures. Eric, I'll turn it over to you. Thanks, Tyler.
Tyler Lindwall: These forward looking statements are subject to the risks and uncertainties that face Vista outdoor and the industries in which we operate and actual results may differ materially from these forward looking statements.
Eric: We encourage you to review our quarterly earnings press release, and Vista outdoors SEC filings for more information on these risk factors and uncertainties.
Tyler Lindwall: Please also note that we have posted presentation materials on our website at investors that Vista outdoor dot com, which supplement our comments. This morning and include reconciliations of non-GAAP financial measures, Eric I'll turn it over to you.
Eric C. Nyman: Thanks, Tyler, and thank you all for joining us this morning as we discuss our fourth quarter and fiscal year 2024 results. I'm excited to be speaking with you today on behalf of the Vista Outdoor leadership team to share our confident belief in the long-term strategy and strong foundation that we continue to build on at Vista Outdoor, Revelist, and the Kinetic Group.
Eric: Thanks, Tyler and thank you all for joining us this morning, as we discuss our fourth quarter and fiscal year 2024 results IMAX.
Eric C. Nyman: I'm excited to be speaking with you today on behalf of the Vista outdoor leadership team to share our confident belief in the long term strategy and strong foundation, we continue to build on at Vista outdoor.
Eric C. Nyman: Rebel lists and the kinetic group the.
Eric C. Nyman: The company is strong, and during the fourth quarter, we achieved financial results in line with our expectations for sales and above our expectations for profitability. Total sales for the fiscal year were $2.75 billion, with adjusted EBITDA margins of 16.1%.
Eric C. Nyman: Company is strong and during the fourth quarter, we achieved financial results in line with our expectations for sales and above our expectations on profitability.
Eric C. Nyman: Total sales for the fiscal year were $2 75 billion with adjusted EBITDA margins of 16, 1% we.
Eric C. Nyman: We generated $432 million of adjusted free cash flow during the fiscal year, allowing us to pay down $340 million of debt throughout the year. In the fourth quarter, our cash flow remained strong as we generated $161 million of adjusted free cash flow and decreased our net debt by $118 million, bringing our leverage ratio to 1.5 times at year end. These strong results are a testament to our long-term strategic vision and the hard work and dedication from all of our employees.
Eric C. Nyman: We generated $432 million of adjusted free cash flow during the fiscal year, allowing us to pay down $340 million of debt throughout the year.
Eric C. Nyman: In the fourth quarter, our cash flow remains strong as we generated $161 million of adjusted free cash flow and decreased our net debt by $118 million, bringing our leverage ratio to one five times at year end.
Eric C. Nyman: These strong results are a testament to our long term strategic vision and the hard work and dedication from all of our employees.
Eric C. Nyman: As an update on the proposed transaction with CSG... We continue to be confident in our ability to receive CFIUS clearance and that all other closing conditions will be satisfied at the closing of the CSG transaction. For each Vista Outdoor share held, stockholders will receive $12.90 in cash consideration and one Revelist share. Following the closing of the CSG transaction, we intend to capitalise the Revoist balance sheet with $250 million of cash, and all cash above that, including the significant amount of cash generated in Q4 fiscal year 2024, will be distributed to shareholders in the form of a special dividend or share repurchase.
Eric C. Nyman: As an update on the proposed transaction with <unk>, we continue to be confident in our ability to receive shipments clearance and that all other closing conditions will be satisfied.
Eric C. Nyman: At the closing of the <unk> transaction for each Vista outdoor share held stockholders will receive $12 90, and cash consideration and one rebel list sure.
Eric C. Nyman: Following closing of the <unk> transaction, we intend to capitalize the rebel was balance sheet with $250 million of cash and all cash above that.
Eric C. Nyman: Including the significant amount of cash generated in Q4 fiscal year 2024 will be distributed to shareholders in the form of a special dividend or share repurchase.
Eric C. Nyman: Further on April 22nd we confirmed that we are engaging in alternative discussions with MNC capital related to its March 25, 2024, unsolicited indications of interest for.
Eric C. Nyman: Further, on April 22nd, we confirmed that we are engaging in alternative discussions with MNC Capital related to its March 25, 2024 unsolicited indication of interest, pursuant to which, MNC expressed interest in acquiring Vista Outdoor in an all-cash transaction for $3,750 per Vista share. However, the board does not consider MNC's revised proposal to be superior to the CSG transaction.
Eric C. Nyman: And the significant decrease in net debt during the quarter further reinforces the view that MNC's proposed offer price undervalues the Revoist business model. That's all. The board has determined MNC's revised proposal meets the standard under the merger agreement with CSU, permitting engagement with MNC. Given these ongoing discussions, we will adjourn the special meeting of stockholders with respect to the CSG transaction to 9 a.m. Central Time on June 14, 2024. The board continues to recommend Vista stockholders vote in favor of the proposal to adopt the existing merger agreement with CSG.
Eric C. Nyman: Pursuant to which MNC expressed interest in acquiring Vista outdoor in an all cash transaction for $37 50 per Vista share.
Eric C. Nyman: The board does not consider mnc's revised proposal to be superior to the <unk> transaction.
Eric C. Nyman: And the significant decrease in net debt during the quarter further reinforces the view that Mnc's proposed offer price undervalues, the rebel with business.
Eric C. Nyman: That said.
Eric C. Nyman: The board has determined Mnc's revised proposal meets the standard under the merger agreement with C. S G permitting engagement with MNC.
Eric C. Nyman: Given these ongoing discussions we will adjourn the special meeting of stockholders with respect to the <unk> transaction to nine a M central time on June 14th 2024.
Eric C. Nyman: The board continues to recommend Vista stockholders vote in favor of the proposal to adopt the existing merger agreement with C. S. G.
Eric C. Nyman: I am proud of the work our teams have accomplished in my time with the company, and our results demonstrate the strategic direction of Vista Outdoor is the right one. Over the past year, we have made tremendous achievements across both Revelists and the Kinetic Group, despite the ongoing macroeconomic uncertainties and challenges. I want to thank all our employees for their passion and commitment to Vista Outdoor and our stakeholders. This has been a pivotal year in our company's rich history, and your diligent efforts to separate the business while continuing to deliver high-quality products and service to our consumers and our customers have been inspiring. Now, on to Revolis.
Eric C. Nyman: I am proud of the work our teams have accomplished in my time with the company and our results demonstrate the strategic direction of Vista outdoor is the right one.
Eric C. Nyman: Over the past year, we have made tremendous achievements across both <unk> and the kinetic group despite the ongoing macroeconomic uncertainties and challenges.
Eric C. Nyman: I want to thank all our employees for their passion and commitment to Vista outdoor and our stakeholders.
Eric C. Nyman: This has been a pivotal year in our company's rich history, and your diligent efforts to separate the business, while continuing to deliver high quality products and service to our consumers and our customers has been inspiring.
Eric C. Nyman: Now onto <unk>.
Eric C. Nyman: At <unk>, we have made great progress over the last nine months.
Eric C. Nyman: At Revelist, we have made great progress over the last nine months. In partnership with our leadership team, we have formulated and driven the company strategy, and I continue to be motivated by this team's unwavering support and passion. We have undertaken a journey to transform our organization into the leading global integrated house of brands in the outdoor industry. Our collective efforts during the fiscal year have enabled us to work through ongoing macroeconomic uncertainties and challenges, and we have emerged stronger at each step along the way as we transform our business to unlock its full potential. Revalist finished the fourth quarter strong and delivered results in line with our expectations, with sales of $332 million and adjusted EBITDA of $29 million, translating to an adjusted EBITDA margin of 8.8%.
Eric C. Nyman: In partnership with our leadership team, we have formulated and driven the company's strategy and I continue to be motivated by this team's unwavering support and passion.
Eric C. Nyman: We've undertaken a journey to transform our organization into the leading global integrated house of brands in the outdoor industry.
Eric C. Nyman: Our collective efforts during the fiscal year have enabled us to work through ongoing macroeconomic uncertainties and challenges and we have emerged stronger at each step along the way as we transform our business to unlock its full potential.
Eric C. Nyman: <unk> finished the fourth quarter strong and delivered results in line with our expectations with sales of $332 million and adjusted EBITDA of $29 million.
Eric C. Nyman: Translating to an adjusted EBITDA margin of eight 8%.
Eric C. Nyman: Tripling adjusted EBITDA versus the prior year period, our teams across Revalyst continue to profitably transform the business to be brand led, consumer obsessed, and maker fueled, which results in new products, engaging content, exciting partnerships, and other opportunities to enable exceptional experiences that exceed the requirements of our passionate consumers and customers. I would like to quickly touch on some highlights across Revelus during the fiscal year.
Eric C. Nyman: Tripling adjusted EBITDA versus the prior year period.
Eric C. Nyman: Our teams across <unk> continue to profitably transform the business to be brand led consumer obsessed and maker fuels, which results in new products engaging content exciting partnerships and other opportunities to enable exceptional experiences that exceed the requirements of.
Eric C. Nyman: Our passionate consumers and customers.
Eric C. Nyman: I would like to quickly touch on some highlights across <unk> during the fiscal year.
Eric C. Nyman: At our Revolus Precision Sports Technology Platform, we announced the acquisition of PinSeeker, a leading off-course golf simulator and connectivity app that hosts real-time, virtual, closest-to-the-pin tournaments. We are excited to add PinSeeker to our collective of world-class maker brands and to bolster our digital and gaming ecosystem. Through the combination of Pensaker's digital solutions and Foresight's hardware, exciting eSports opportunities will arise, so stay tuned for details in the coming months. We believe we are poised to revolutionize off-course golf, a tremendous growth opportunity where participation reached a new all-time high in 2023, expanding to 33 million participants. In addition, at Bushnell Golf, a leading industry survey reported that over 98% of the players in the championship field used a Bushnell Laser Rangefinder in preparation for their on-course competition.
Eric C. Nyman: At our <unk> precision sports technology platform, we announced the acquisition of <unk>, a leading off course golf simulator and connectivity app that host real time virtual closest to the pin tournaments.
Eric C. Nyman: We are excited to add <unk> secret to our collective of World class makeup brands and to bolster our digital and gaming ecosystem.
Eric C. Nyman: Through the combination of <unk> digital solutions and four sites hardware exciting esports opportunities will arise so stay tuned for details in the coming months.
Eric C. Nyman: We believe we are poised to Revolutionise off course golf, a tremendous growth opportunity where participation reached a new all time high in 2023, expanding to 33 million participants.
Eric C. Nyman: In addition at Bushnell golf, a leading industry survey reported that over 98% of the players championship field use of Bushnell laser range finder and preparation for their encores competition.
Eric C. Nyman: The trust that professional golfers have in our devices speaks volumes about our team's proven ability to provide market-leading innovations for the highest-performing athletes in golf. On the Revelist Adventure Sports platform, the teams continue to make progress on building our powerful brand infrastructure for Fox, Bell, Giro, Camelback, Quiet Cat, and Blackburn. In the quarter, Fox delivered the most advanced motocross helmet in the brand's 50-year history with the new V3RS helmet. Fox has developed a compelling architecture of off-road helmets that address the needs of riders at all levels and abilities across the globe.
Eric C. Nyman: The trust that professional golfers have in our devices speaks volumes about our team's proven ability to provide market leading innovations for the highest performing athletes in golf.
Eric C. Nyman: Within our <unk> adventure sports platform. The teams continue to make progress on building our powerful brand infrastructure for Fox Bell Zero, Camelback quiet cat and Blackburn in.
Eric C. Nyman: In the quarter Fox delivered the most advanced motor Cross helmet and the brands 50 year history with the new <unk> helmet.
Eric C. Nyman: Fox has developed a compelling architecture of off road helmets that address the needs of riders on all levels and abilities across the globe.
Eric C. Nyman: In addition, Fox launched collaborations with the streetwear juggernaut Supreme and high-end specialty apparel and sneaker boutique, Livestock, to elevate its lifestyle offering. The Giro brand expanded its reach by entering into an agreement to be the official sponsor and supplier of cycling helmets for Wisma Lisa Bike, the number one pro tour road cycling team in the world for both the men's and women's teams across cyclocross, road, and cross Giro continues to increase or maintain its market share across all categories, and these leading partnerships differentiate us in the marketplace.
Eric C. Nyman: In addition, Fox launched collaborations with the Street wear juggernaut Supreme and high end specialty apparel and sneaker boutique livestock to elevate its lifestyle offerings.
Eric C. Nyman: Zero brand expanded its reach by entering into an agreement to be the official sponsor and supplier of cycling helmets for Bismarck Liza bike. The number one pro tour road cycling team in the world for both the men's and women's teams across Cyclo-cross Road and cross country disciplines.
Eric C. Nyman: Zero continues to increase or maintain its market share across all categories and these leading partnerships differentiate us in the marketplace.
Eric C. Nyman: In addition.
Eric C. Nyman: The Revelest Outdoor Performance Team continues to integrate and build out the platform, led by Sims, Bushnell, Stone Glacier, Camp Chef, Primos, Blackhawk, and Eagle. At Sims, the team received eight customer gear awards, more than any other brand, at the 2024 Fly Fishing Show, including Best Men's Wader for the newly introduced Top End G4Z Stocking Foot Wader. This is a key product for the brand that highlights its heritage and the craftsmanship, precision, and attention to detail the Bozeman-based team demonstrates day in and day out.
Eric C. Nyman: The revenue is sell through our performance team continues to integrate and build out the platform led by Sims Bushs No stone Glacier camp chef Primo's Blackhawk and Eagle.
Eric C. Nyman: It assumes the team received eight customer gear awards more than any other brand at the 2020 for fly fishing show, including best men's waiter for the newly introduced top and <unk> Z stocking foot waiter.
Eric C. Nyman: This is a key product for the brand that highlights its heritage and the craftsmanship precision and attention to detail. The Bozeman based team demonstrates day in and day out.
Eric C. Nyman: Additionally, Stone Glacier launched its new lifestyle apparel of everyday wear for the passionate hunter to a strong initial response, and our Eagle business was awarded a U.S. Air Force contract for its battle belt. In addition to supporting the U.S. government in manufacturing the MOLLE 4K rucksack, which has strict adherence to delivery requirements.
Eric C. Nyman: Additionally, stone glacier launched its new lifestyle apparel of everyday wear for the passionate hunter to a strong initial response and our ego business was awarded a U S. Air Force contract for its Battle Belt system. In addition to supporting the U S government and manufacturing the Mali for K rucksack.
Eric C. Nyman: That has strict adherence to delivery requirements.
Eric C. Nyman: I remain confident in the strategy and vision that we have developed at rebel list we.
Eric C. Nyman: I remain confident in the strategy and vision that we have developed at Revolis. We are transforming our organization into the leading global integrated house of brands in the outdoor industry to deliver truly human experiences for our consumers. Through our brand-led, consumer-obsessed, maker-fueled mission, we will drive growth through innovative product and technology offerings, an enhanced direct-to-consumer channel strategy, and an expanded digital gaming ecosystem. Our direct-to-consumer sales across platforms continue to gain further traction, growing approximately 5% year-over-year during both Q4 and the entirety of the fiscal year. Revoist Precision Sports Technology led the way in the quarter, improving D2C sales by 16%, while Revoist Adventure Sports gained 15% for the full fiscal year.
Eric C. Nyman: We are transforming our organization into the leading global integrated house of brands in the outdoor industry to deliver wildly human experiences for our consumers through.
Eric C. Nyman: Through our brand led consumer obsessed maker fueled mission, we will drive growth through innovative product and technology offerings and enhanced direct to consumer channel strategy and an expanded digital gaming ecosystem.
Eric C. Nyman: Our direct to consumer sales across platforms continues to gain further traction growing approximately 5% year over year during both Q4 and the entirety of the fiscal year.
Eric C. Nyman: Rebel is precision sports technology led the way in the quarter, improving DTC sales by 16%, while Rebalances adventure sports gained 15% for the full fiscal year.
Eric C. Nyman: We are excited about these results, which show that demand for our brands is strong, absent the inventory noise within wholesale and retail channels. Moving on, I want to touch on the ongoing gear up transformation efforts, where we made tremendous progress during the quarter. As a reminder, GEAR UP is our transformation program to simplify our business model, increase efficiency and profitability, and reinvest cost savings into our highest potential brands to accelerate top line growth and EBITDA expansion.
Eric C. Nyman: We are excited about these results, which show that demand for our brands is strong absent the inventory noise within wholesale and retail channels.
Eric C. Nyman: Moving on I want to touch on the ongoing gear up transformation efforts, while we made tremendous progress during the quarter.
Eric C. Nyman: As a reminder, gear up as our transformation program to simplify our business model increase.
Eric C. Nyman: Increased efficiency and profitability in.
Eric C. Nyman: And reinvest cost savings into our highest potential brands to accelerate top line growth and EBITDA expansion.
Eric C. Nyman: Our teams continue to drive progress across the gear up initiative through work on supply chain consolidation.
Eric C. Nyman: Our teams continue to drive progress across the GEAR UP initiative through work on supply chain consolidation. As a recent example of this effort, we closed our Reno, Nevada warehouse and distribution center to further consolidate our footprint.
Eric C. Nyman: As a recent example of this effort we closed our Reno, Nevada warehouse and distribution center to further consolidate our footprint.
Eric C. Nyman: Additionally, we announced key leadership hires, including our most recent addition of Joe Beck as Chief Supply Chain Officer. Joe's previous experience executing a supply chain strategy during a business separation and his ability to design and deploy global supply chain operations for a standalone business, including hiring talent, building effective teams, and developing processes, analytics, and technology, make him the ideal hire as Revoist's first Chief Supply Chain Officer. Through the gear-up efforts outlined here and more, we remain confident our actions will realize $25 to $30 million of run rate cost savings in fiscal year 2025, supporting the potential to double standalone adjusted EBITDA year over year, with a long-term goal of realizing $100 million of run rate cost savings by fiscal year 2027. Financially and operationally, we are on track. Well, in the short term, we do not expect consumers to meaningfully change purchasing patterns due to ongoing macroeconomic uncertainty.
Eric C. Nyman: Additionally, we announced key leadership hires including our most recent addition of Joe back as Chief supply chain Officer.
Eric C. Nyman: Joes previous experience executing our supply chain strategy during our business separation and his ability to design and deploy global supply chain operations for a standalone business, including hiring talent building effective teams in developing processes analytics and technology may.
Eric C. Nyman: The ideal higher as <unk> first chief supply chain officer.
Eric C. Nyman: Through the gear up efforts outlined here and more.
Eric C. Nyman: We remain confident our actions will realize $25 million to $30 million of run rate cost savings in fiscal year 2025, supporting the potential to double standalone adjusted EBITDA year over year with a long term goal of realizing $100 million of run rate cost savings by fiscal year 2020.
Eric C. Nyman: Kevin.
Eric C. Nyman: Financially and operationally we are on track.
Eric C. Nyman: In the short term, we do not expect consumers to meaningfully change purchasing patterns due to ongoing macroeconomic uncertainties. We are confident that rebels operational and organizational improvements will continue to positively impact profitability in both the short and the long term.
Eric C. Nyman: We are confident that Revoist's operational and organizational improvements will continue to positively impact profitability in both the short and the long term. We reaffirm our ability to double our stand-alone adjusted EBITDA in fiscal year 2025, and longer term, believe that Revalist's stand-alone adjusted EBITDA margins will be in the mid- In closing, I am confident that our future is bright. We've established a strong foundation that will help us navigate the uncertain macroeconomic climate and exceed the demands of our passionate consumers and customers.
Eric C. Nyman: We reaffirm our ability to double our standalone adjusted EBITDA in fiscal year, 2025, and longer term believe that Rebalances standalone adjusted EBITDA margins will be in the mid teens.
Eric C. Nyman: In closing I am confident that our future is bright.
Eric C. Nyman: We've established a strong foundation that will help us navigate the uncertain macroeconomic climate and exceed the demands of our passionate consumers and customers.
Eric C. Nyman: I again want to express my sincere gratitude to the team for their incredible work. [inaudible] Our team is comprised of talented individuals with extraordinary skills, knowledge, and experience, and I am excited about what we can achieve together. I'll now hand it over to Jason to provide an update on the kinetic group for the quarter. Jason, over to you.
Eric C. Nyman: Again want to express my sincere gratitude to the team for their incredible work support and commitment to <unk> success.
Jason: Our team is comprised of talented individuals with extraordinary skills.
Jason: <unk> and experience and I am excited about what we can achieve together.
Eric C. Nyman: I'll now hand, it over to Jason to provide an update on the kinetic group for the quarter Jason over to you.
Jason: Good morning, the kinetic group finished the year strong achieving our financial guidance, we provided last quarter sales in the fourth quarter were $362 million with an adjusted EBITDA margin of 27, 7% or $103 million.
Jason R. Vanderbrink: Good morning. The Kinetic Group finished the year strong, achieving the financial guidance we provided last quarter. Sales in the fourth quarter were $362 million with an adjusted EBITDA margin of 27.7%, or $100.3 million, capping off a solid performance by our team in the face of a difficult market. For the year, ammunition net sales finished at $1.45 billion with an adjusted EBITDA of $415.8 million, which equates to a margin of 28.6%. As we prepare for a potential ownership transition in 2024, we are encouraged by our quarterly and year-end results and recent sales trends.
Jason R. Vanderbrink: <unk> off a solid performance by our team in the face of a difficult market.
Jason R. Vanderbrink: For the year ammunition net sales finished at 145 billion with an adjusted EBITDA of $415 $8 million, which equates to a margin of 28, 6%.
Jason R. Vanderbrink: As we prepare for a potential ownership transition in 2024, we are encouraged by our quarterly and year end results and recent sales trends.
Jason R. Vanderbrink: We have a strong order position, and there are backlogs in several product categories that strengthen our confidence in delivering on our financial expectations. We have some challenges ahead related to higher commodity input costs, including powder and copper, but pricing actions taken to offset the increased production costs have not impacted open orders. From a select group of retail partners, POS data indicates sell-through remains strong with double-digit increases in handgun, shot shell, and rifle ammunition year over year by a number of rounds in each of the highlighted categories. Along with the positive sell-through trends, we remain encouraged by overall inventory levels, which have remained stable over the last quarter.
Jason R. Vanderbrink: We have a strong order position in there our backlogs in several product categories or strengthen our confidence in delivering on our financial expectations.
Jason R. Vanderbrink: We have some challenges ahead related to higher commodity input costs, including powder in copper.
Jason R. Vanderbrink: Pricing actions taken to offset the increased production costs have not impacted open orders.
Jason R. Vanderbrink: From a select group of retail partners.
Jason R. Vanderbrink: POS data indicates sell through remained strong with double digit increases in handgun shot shell and rifle ammunition year over year by a number of rounds in each of the highlighted categories.
Jason R. Vanderbrink: Along with the positive sell through trends, we remain encouraged by overall inventory levels, which have remained stable over the last quarter.
Jason R. Vanderbrink: For the 57th straight month, ending in April adjusted Nix checks data surpassed more than 1 million firearms checks. This continued high monthly volume supports a healthy and higher baseline of shooting and hunting participants.
Jason R. Vanderbrink: For the 57th straight month ending in April, adjusted NICS checks data surpassed more than 1 million firearms. This continued high monthly volume supports a healthy and higher baseline of shooting and hunting participants. This past quarter, our leading ammunition brands launched several new products at the annual SHOT Show to great fanfare. Federal-launched Fusion tip For the avid whitetail hunter wanting better accuracy and extended ranges from a proven bullet design, Remington added Premier Cup to its lineup of effective big game bullets.
Jason R. Vanderbrink: This past quarter, our leading ammunition brands launched several new products at the annual shot show to great fanfare.
Jason R. Vanderbrink: Federal launched fusion chip for the avid white tail Hunter wanting better accuracy and extended ranges from a proven bullet design.
Jason R. Vanderbrink: Remington added Premier Cup towards lineup of effective big game bullets. This tough copper alloy bullet delivers on hunters expectations of extreme accuracy and terminal performance from a tip bullet.
Jason R. Vanderbrink: This tough copper alloy bullet delivers on hunters' expectations of extreme accuracy and terminal performance from a tipped bullet. CCI, the leader in rimfire ammunition, released Uppercut, the first ever expanding self-defense offering in 22 long rifles. Our teams at all four manufacturing facilities remain focused on building the best ammunition in America and delivering on customer and consumer demand. There are two constants in our company history. We are unapologetic defenders of the Second Amendment as a constitutional right and will always support the men and women in law enforcement and the military who protect our homes and freedom.
Jason R. Vanderbrink: CCI the leader in rimfire ammunition released uppercut, the first ever expanding self defense offering in 22 long rifle.
Jason R. Vanderbrink: Our teams at all four manufacturing facilities, we remain focused on building the best ammunition in America, and delivering on customer and consumer demand.
Jason R. Vanderbrink: There are two constants in our company history.
Jason R. Vanderbrink: We are an apologetic defenders of the second amendment is a constitutional right and we will always support the men and women in law enforcement and the military who protect our homes and freedoms.
Jason R. Vanderbrink: We will continue to work with all of them on research and development for new products to help them in their mission. I have full confidence that with the best team in the ammunition business, we will continue to perform at the highest level, and our future is filled with great opportunities.
Jason R. Vanderbrink: We will continue to work with all of them on research and development for new products to help them in their missions.
Jason R. Vanderbrink: I have full confidence that with the best team in the ammunition business. We will continue to perform at the highest level and our future is filled with great opportunities.
Jason R. Vanderbrink: Andy.
Unknown Executive: Thank you, Jason. And hello, everyone.
Speaker Change: Thank you, Jason and Hello, everyone. My comments today will focus on adjusted results compared to the prior year period, unless otherwise noted, which I presented using non-GAAP financial measures in.
Unknown Executive: My comments today will focus on adjusted results compared to the prior year period, unless otherwise noted, which are presented using non-GAAP financial measures. In the appendix to the slide presentation, we've included reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding forward-looking statements and non-GAAP financial measures, please refer to page 4 of the slide presentation. I would also like to note that during the quarter, we updated our reporting segments to include the Kinetic Group and the three RevList segments, RevList Adventure Sports, RevList Outdoor Performance, and RevList Precision Sports Technology. I will refer to the three RevList segments in a combined manner as RevLists in my remarks that follow.
Unknown Executive: In the appendix to the slide presentation. We've included reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Unknown Executive: For additional information regarding forward looking statements and non-GAAP financial measures. Please refer to page four of the slide presentation.
Unknown Executive: I would also like to note that during the quarter, we updated our reporting segments to include the kinetic group and the three revenue segments <unk> adventure sports <unk> outdoor performance and revenue is precision sports technology.
Unknown Executive: I will reference the three revenue segments in a combined manner as Red list in my remarks step up.
Unknown Executive: Overall, we had a solid fourth quarter.
Unknown Executive: Overall, we had a solid fourth quarter. We met our expectations for revenue in both businesses, with kinetic sales meeting the lower end of our guidance range, and Revo Sales growing organically in the fourth quarter for the first time in nine quarters. On the EBITDA front, Kinetic was above our expectations, and Revolith met our fourth quarter expectations of margins in the high single digits, which was an over 400 basis point improvement over the third quarter.
Unknown Executive: We met our expectations for revenue in both businesses with kinetic sales meeting the lower end of our guidance range and <unk> sales growing organically in the fourth quarter for the first time in nine quarters.
Unknown Executive: On the EBITDA front.
Unknown Executive: <unk> was above our expectations and <unk> met our fourth quarter expectations of margins in the high single digits, which was an over 400 basis point improvement over the third quarter.
Unknown Executive: Additionally, Adjusted Free Cash Flow significantly outperformed our expectations in the fourth quarter, delivering $161 million, allowing us to reduce our net debt position by $118 million in the quarter. For the fourth quarter, total sales decreased 6.4% to $693.7 million due to lower volumes at the Kinetic Group, partially offset by an increase in the Revlis business. For the fiscal year, total sales decreased 10.8% to $2.7 billion, and organic sales were $2.6 billion, down 14.5%.
Unknown Executive: Additionally, adjusted free cash flow significantly outperformed our expectations in the fourth quarter delivering $161 million.
Unknown Executive: Low enough to reduce our net debt position by $118 million in the quarter.
Unknown Executive: For the fourth quarter total sales decreased six 4%.
Unknown Executive: $693 $7 million.
Unknown Executive: Due to lower volumes at the kinetic group, partially offset by an increase in the Revlon business.
Unknown Executive: For the fiscal year total sales decreased 10, 8% to $2 7 billion.
Unknown Executive: Organic sales were $2 6 billion DAU.
Unknown Executive: Down 14, 5%.
Unknown Executive: Gross profit in Q4 decreased 7% to $225 million due to lower gross profit at the kinetic group, partially offset by higher gross profit at <unk> <unk>.
Unknown Executive: Growth profit in Q4 decreased 7% to $220.5 million due to lower growth profit at the Kinetic Group, partially offset by higher growth profit at Rebel. Q4 growth margin was relatively flat at 31.8%. Fiscal year gross profit decreased 17.4% to $859 million, and gross margin contracted 250 basis points to 231.3.
Unknown Executive: Q4 gross margin was relatively flat at 31, 8% fiscal.
Unknown Executive: Fiscal year gross profit decreased 17, 4% to $859 million and gross margin contracted 250 basis points to 31, 3%.
Unknown Executive: EBITDA in Q4 decreased 7.5% to $109.2 million, equating to an EBITDA margin of 15.7%. This was due to lower gross profit at Kinetic Group, partially offset by higher gross profit at RevList and lower SG&A costs at both Kinetic Group and RevList. For FY24, EBITDA dropped 27.8% to $442.5 million, and EBITDA margin contracted 378 basis points to 16.1%, while organic EBITDA for the year was $430 million, a decline of 17.7%, and organic margin was 16.3%.
Unknown Executive: EBITDA in Q4 decreased seven 5% to $109 2 million.
Unknown Executive: Equating to an EBITDA margin of 15, 7%.
Unknown Executive: Due to lower gross profit at kinetic group, partially offset by higher gross profit at <unk> and lower SG&A costs at both the kinetic group Andrew Douglas.
Unknown Executive: For FY 'twenty for EBIT dropped 27, 8% to $442 $5 million and EBIT margin contracted 378 basis points to 16, 1%, while organic EBITDA for the year was $430 million of.
Unknown Executive: A decline of 17, 7% and organic margin was 16, 3%.
Unknown Executive: Q4 EPS declined 2.9% to $1.02, and full year EPS declined 38.3% to $3.86. Turning to slide 22, our bounty continues to improve, and we are optimizing our portfolio. We remain committed to prioritizing the health of our balance sheet and implementing sound financial policies.
Unknown Executive: Q4, EPS declined two 9% to $1 <unk>.
Unknown Executive: And full year EPS declined 38, 3% to $3 86.
Unknown Executive: Turning to slide 22, our balance sheet continues to improve and we are optimizing our portfolio.
Unknown Executive: We remain committed to prioritizing the health of our balance sheet and implementing sound financial policies.
Unknown Executive: These efforts continue to improve our business fundamentals through the team's hard work to lower debt levels and further optimize our inventory, which decreased approximately 14% year-over-year and about 7% sequentially during the quarter, primarily driven by Revo's year-over-year inventory reduction of 27% and sequential decrease of 9%. These efforts drove strong adjusted free cash flow of $161 million in the quarter and, as mentioned, allowed us to decrease our net debt by $118 million during Q4.
Unknown Executive: These efforts continued to improve our business fundamentals through the team's hard work to lower debt levels and further optimize our inventory, which decreased approximately 14% year over year and about 7% sequentially during the quarter, primarily driven by revenues year over year inventory reduction of 27% and sequential deep.
Unknown Executive: <unk> of 9%.
Unknown Executive: Our net debt leverage ratio is now at 1.5 times. In fiscal year 2025, we've already gotten off to a great start continuing to improve the health of our balance sheet and executing our plan to optimize our portfolio. We are pleased to report that on May 1st, we completed the divestiture of the RCVS brand to Hodgden Powder, providing the brand and its dedicated employees with the right home for the long term, as well as a highly attractive valuation for us to transact.
Unknown Executive: These efforts drove strong adjusted free cash flow of $161 million in the quarter.
Unknown Executive: And as mentioned allowed us to decrease our net debt by $118 million during Q4.
Unknown Executive: Our net debt leverage ratio is now at one five times.
Unknown Executive: In fiscal year 2025, we've already gotten off to a great start continuing to improve the health of our balance sheet and executing our plan to optimize our portfolio.
Unknown Executive: We are pleased to report that on May one we completed the divestiture of the Cvs brand to Hodgkin powder, providing the brand and its dedicated employees with the right home long term as well as a highly attractive valuation for us to transact.
Unknown Executive: This divestiture will allow us to concentrate our focus on core assets that provide significant value and growth. The capital from this transaction would be included in the excess cash that would be returned to shareholders upon the completion of the CSG transaction. Our strategic review is ongoing, and is a critical step that allows us to redefine our focus and position ourselves for long-term success to deliver synergies and leverage our expertise to accelerate growth, improve efficiencies, and drive value.
Unknown Executive: This divestiture will allow us to concentrate our focus on core assets that provide significant value and growth potential.
Unknown Executive: The capital from this transaction will be included in the excess cash that would be returned to shareholders. Upon the completion of the CSC transaction.
Unknown Executive: Our strategic review is ongoing.
Unknown Executive: And as a critical step that allows us to redefine our focus and position ourselves for long term success to deliver synergies and leverage our expertise to accelerate growth improve efficiencies and drive value.
Unknown Executive: Turning to our business results on slides 23, and 'twenty four.
Unknown Executive: Turning to our business results on slides 23 and 24, within Revelist, sales increased 1.4% in Q4 to $332.1 million, driven by an increase of 18.8% in Revit precision sports technology due to new product introductions. This was partially offset by lower volume in redless outdoor.
Unknown Executive: Within <unk> sales increased one 4% in Q4 to $332 1 million.
Unknown Executive: Driven by an increase of 18, 8% in Redwood precision sports technology due to new product introductions.
Unknown Executive: This was partially offset by lower volume in <unk> outdoor performance.
Unknown Executive: FY24 sales were $1.29 billion, a decrease of 2.2% and 10.7% on an organic basis. However, growth profit increased 17.3% in Q4 to $100 million. And Q4 growth margin increased 408 basis points to 30.1%. Due to increased deficiencies, volume, and price, partially offset by increased, FY24 Growth Profit decreased 3.5% to $373.2 million, and FY24 Growth Margin decreased to $28.9 billion. Q4 EBITDA was $29.1 million, up 209.5%, and EBITDA margin for the quarter was 8.8%, up 413 basis points sequentially, and up 590 basis points year-over-year due to increased gross profit and lower SG&A costs. FY24 EBITDA decreased 21.5% to $98.3 million, and EBITDA margin contracted to $7.6 million. Organic EBITDA for the year declined to $85.8 million, and the organic EBITDA margin was 7.3%.
Unknown Executive: FY 'twenty four sales were $1 $2 9 billion.
Unknown Executive: A decrease of two 2% and 10, 7% on an organic basis.
Unknown Executive: Gross profit increased 17, 3% in Q4 to $100 million.
Unknown Executive: In Q4 gross margin increased 408 basis points to 31% due to increased efficiencies volume and price, partially offset by increased discounting.
Unknown Executive: FY 'twenty gross profit decreased three 5% to $373 $2 million in FY 'twenty for our gross margin decreased to 28, 9%.
Unknown Executive: Q4, EBITDA was $29 $1 million.
Unknown Executive: Up 209, 5% and EBITDA margin for the quarter was eight 8% up 413 basis points sequentially and up 590 basis points year over year due.
Unknown Executive: Due to the increased gross profit and lower SG&A costs.
Unknown Executive: FY 'twenty four EBITDA decreased 21, 5% to $98 3 million.
Unknown Executive: And EBIT margin contracted to seven 6%.
Unknown Executive: <unk> EBITDA for the year declined to $85 8 million in organic EBITDA margin was seven 3%.
Unknown Executive: For the kinetic group sales decreased 12, 5% in Q4 to $361 $6 million.
Unknown Executive: For the Kinetic Group, sales decreased 12.5% in Q4 to $361.6 million due to lower volumes across nearly all categories and lower prices. FY 24 sales decreased 17.4% to $1.45 billion. Gross profit decreased 20.7% in Q4 to $120.5 million, and Q4 gross margin decreased to 33.3% due to lower volume and price, unfavorable mix, and increased input costs due to inflation. FY24 gross profit decreased 25.7% to $485.8 million, and FY24 gross margin decreased to $33.4%.
Unknown Executive: Due to lower volumes across nearly all categories and lower pricing.
Unknown Executive: FY 'twenty four sales decreased 17, 4% to 145 billion.
Unknown Executive: Gross profit decreased 27% in Q4 to $125 million in Q4 gross margin decreased to 33, 3%.
Unknown Executive: Due to lower volume and price unfavorable mix and increased input costs due to inflation.
Unknown Executive: FY 'twenty forward gross profit decreased 25, 7% to $485 $8 million in FY 'twenty for gross margin decreased to 33, 4%.
Unknown Executive: Q4, EBITDA was $103 million down 23, 3% and EBITDA margin for the quarter was 27, 7% due to lower gross profit, partially offset by lower SG&A costs.
Unknown Executive: Q4 EBITDA was $100.3 million, down 23.3%, and EBITDA margin for the quarter was 27.7% due to lower gross profit, partially offset by lower SG&A. FY24 EBITDA decreased 28% to $415.8 million, and EBITDA margin contracted to $28.6 million. Moving on to page 25.
Unknown Executive: FY 'twenty, four EBITDA decreased 28% to $415 8 million and.
Unknown Executive: And EBITDA margin contracted to 28, 6%.
Unknown Executive: Moving on to page 25, as we look to fiscal year 2025 at the kinetic group, a global powder shortage, limiting production and increasing input costs, including for copper and powder or factors.
Unknown Executive: As we look to fiscal year 2025, at the kinetic roof, a global powder shortage, limiting production, and increasing input costs, including for copper and powder, are factors expected to pressure both the top and bottom lines in the upcoming year. However, both Net Sales and EBITDA are expected to be evenly distributed from a seasonality standpoint throughout fiscal year 2025. In our robots business, our fiscal year 2025 sales guidance excludes our CVS, which has been divested, and sales related to our fiber energy products. On February 6, 2024, a fire occurred at Fiber Energy Products' main production facility in Seymour, Missouri. There were no injuries or environmental issues from the fire.
Unknown Executive: Expected to pressure, both the top and bottom line in the upcoming year.
Unknown Executive: Both net sales and EBITDA are expected to be evenly distributed from a seasonality standpoint throughout fiscal year 'twenty 'twenty five.
Unknown Executive: In our railroad business, our fiscal year 2025 sales guidance excludes our CBS, which has been divested and sales related to our fiber energy products.
Unknown Executive: On February six 2020 for a fire occurred at fiber energy products main production facility in Seymour, Missouri.
Unknown Executive: There were no injuries or environmental issues around the fire. However, as a result of the fire, we do not expect material revenue contribution from the business in our fiscal year 2025.
Unknown Executive: However, as a result of the fire, we do not expect material revenue contribution from the business in our fiscal year 2020. RCBS and Fiber Energy Products contributed approximately $30 million. Total Combined Sales in Fiscal Year 2024. As Eric mentioned in his prepared remarks, we do not expect consumers to meaningfully change purchasing patterns in our fiscal year 2025 due to the ongoing macroeconomic uncertainties and challenges. In addition, we have observed retail and wholesale channels becoming healthier in recent months in many of the categories we sell. However, inventory levels at certain channels, including the specialty channels at Revo's Adventure Sports, continue to work through an inventory burden.
Unknown Executive: Our CBS and fiber and energy products contributed approximately $30 million of.
Unknown Executive: With total combined sales in fiscal year 2024.
Unknown Executive: As Eric mentioned in his prepared remarks, we do not expect consumers to meaningfully change purchasing patterns in our fiscal year 2025.
Unknown Executive: Due to the ongoing macroeconomic uncertainties and challenges.
Unknown Executive: In addition, we have observed retail and wholesale channels, becoming healthier in recent months and many of the categories we sell.
Unknown Executive: However, inventory levels at certain channels, including the specialty channels at <unk> adventure sports continue to work through inventory burden.
Unknown Executive: Across most retailers, inventory levels have come down, but retailers are managing their inventory tightly as we see more just-in-time and smaller quantity orders. We expect this dynamic to continue as we head into fiscal year 2025 and have included it as a factor in our guidance. As we look at REVELUS EBITDA guidance, we expect meaningful improvement primarily driven by the following. One, $25 to $30 million of cost savings related to our Gear Up transformation program.
Unknown Executive: Across most retailers' inventory levels have come down, but the retailers are managing their inventories tightly as we see more just in time and smaller quantity orders.
Unknown Executive: We expect this dynamic to continue as we head into fiscal year 2025, and have included it as a factor in our guidance.
Unknown Executive: As we look at relative EBITDA guidance, we expect meaningful improvement primarily driven by the following $125 million to $30 million of cost savings related to our gear up transformation program to <unk>.
Unknown Executive: Two, Contributions from our previously announced April 2023 cost restructuring program, of which $25 million is related to Reblis, which has begun to fully run rate by the end of our fiscal year 2024. Three, improvements in supply chain and freight as our inventory with higher price freight has turned through our inventory. And four, lower expected promotions as compared to our fiscal year 2024, in which we had higher than usual promotion levels to drive inventory levels down.
Unknown Executive: <unk> from our previously announced April 2023 cost restructuring program of which $25 million is related to <unk>.
Unknown Executive: It has begun to fully run rate by the end of our fiscal year 2024.
Unknown Executive: Three improvements in supply chain and freight as our inventory with higher priced freight has turned through our inventory balance.
Unknown Executive: And for lower expected promotions as compared to our fiscal year 2024 in which we had higher than usual promotional levels to drive inventory levels down.
Unknown Executive: Based on this, for the full fiscal year 2025, we expect sales of $2.665 billion to $2.775 billion, Kinetic Group sales of $1.425 billion to $1.475 billion, and Revla sales of $1.24 billion to $1.3 billion. EBITDA between $410 million and $490 million, the Kinetic Group EBITDA range of $350 million to $400 million, and Revolus EBITDA range of $130 million to $160 million. EPS in the range of $3.60 to $4.50 and free cash flow between $240 million and $320 million.
Unknown Executive: Based on this for the full fiscal year 2025, we expect sales of $2 $6 5 billion to $2 775 billion.
Unknown Executive: The kinetic group sales of $1 45 billion to $1 four of them 5 billion and.
Unknown Executive: And <unk> sales of $1, two 4 billion to $1 3 billion.
Unknown Executive: EBITDA between $410 million and $490 million.
Unknown Executive: The kinetic group EBITDA range of 350 million to $400 million.
Unknown Executive: And <unk> EBITDA range of $130 million to $160 million.
Unknown Executive: EPS in the range of $3 60.
Unknown Executive: To $4 50.
Unknown Executive: And free cash flow between $240 million and $320 million.
Unknown Executive: As we look to Q1 at RevList, we expect sales to be down low single digits year over year, driven by the loss of sales from our CVS and Fibram. We expect EBITDA margins to be in the mid to high single digits to start the fiscal year and grow to low teens in the back half as gear up savings take full effect. Thank you, everyone. Operator, please open the line for questions.
Unknown Executive: As we look to Q1 at <unk>, we expect sales to be down low single digits year over year, driven by the loss of sales from our CBS and fiber energy.
Unknown Executive: We expect EBITDA margins to be in the mid to high single digits to start the fiscal year and grow to low teen in the back half as gear up savings take full effect.
Speaker Change: Thank you everyone. Operator, please open the line for questions.
Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask a question, please ensure your device is unmuted locally. Our first question comes from Anna Glaessgen with Be Riley. Your line is open, please go ahead.
Speaker Change: Thank you if you'd like to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: We'd like to withdraw your question. Please press star followed by check.
Anna Glaessgen: When preparing to asking the question Tyson showing its devices and muted locally.
Operator: Yes.
Operator: Our first question comes from Grace Chen with B Riley. Your line is open. Please go ahead.
Operator: Yes.
Anna Glaessgen: Alright, good morning, guys. Thanks for taking my question.
Anna Glaessgen: Hi, good morning, guys. Thanks for taking my question. I'd like to start by unpacking the Fiscal 25 Revenue Outlook for Revolist. What's being assumed by segment and any color on how you expect sales to progress through the year would be great.
Anna Glaessgen: Yes.
Anna Glaessgen: Followed by impact.
Anna Glaessgen: I'd like to start by unpacking, the fiscal 'twenty revenue outlook for <unk>.
Anna Glaessgen: And what's the net.
Anna Glaessgen: Thanks, Matt.
Anna Glaessgen: And any color on how you expect.
Anna Glaessgen: Sales to progress through the year would be great.
Anna Glaessgen: Yes.
Unknown Executive: Yeah, I appreciate the question, Anna. So as we look at, we haven't guided by segment, I would start, I think, as we look at the opportunities within The Precision Sports, as we've discussed in the past, continues to be a strong business and sees opportunities as we've introduced new products, even this past quarter, with a north of 18% growth rate. We see that as the strongest potential for growth. However, other businesses are still facing some challenges.
Speaker Change: Yeah, No I appreciate the question Anna.
Unknown Executive: As we look at we haven't guided by segment, let's start I think as we look at the opportunities within the businesses the precision sports as as we've discussed in the past continues to be strong.
Unknown Executive: Business and seize the opportunities as we've introduced new products, even this past quarter with 18 north of 18% growth rate, we see that as the strongest potential growth. Other businesses are still facing some challenges the adventure sports as we mentioned has some inventory hangover in the specialty channel that will progress through the year. So.
Unknown Executive: The adventure sports, as we mentioned, have some inventory hangover in the specialty channel that will progress through the year. So you'll start out a little bit slower on that, and then it will progress throughout the year as well.
Unknown Executive: And Youll start out.
Unknown Executive: A little bit slower on that and then it will progress throughout that year as we continue on.
Unknown Executive: Got it. And understanding that there is some inventory hangover in the adventure sports segment, likely mostly within the bike specialty channel. Could you update us on, that said, where the POS stands within those categories to get some perspective on, you know, what that underlying demand looks like, taking out that inventory issue?
Unknown Executive: Got it.
Unknown Executive: And understanding that there is.
Unknown Executive: Some inventory hangover adventure sports segment likely.
Unknown Executive: Mostly in the specialty channel could you update us on.
Unknown Executive: That said.
Unknown Executive: Pos and certain of our categories.
Unknown Executive: Some perspective on what that underlying demand looks like taking out that inventory issue.
Speaker Change: Yes on the Pls.
Unknown Executive: Yeah, I'm a POS. It's still down year over year, to be fair. But what I'd say is we are still gaining market share in those categories is a key as we are looking at and evaluating those. Though POS has been down, the inventory is clearing. It's not that we're not saying it's not clearing, it is going through that. It's just going to take probably through this spring season to really be able to push the rest of that through.
Unknown Executive: It's still down year over year to be fair.
Unknown Executive: I would say is we are still gaining market share in those categories is a key is we are looking at and evaluating those businesses as though Pos has been down the inventory is clearing it's not that we're not saying it's not clearing it is going through that it's just going to take probably through this spring season to really be able to push the rest of that through once.
Unknown Executive: Once that's cleared, given the market share that we're gaining, we are excited by the future of adventure sports and all of our platforms, but that is going to take a little time, which is why the trajectory happening throughout the rest.
Unknown Executive: Thats cleared given the market share that we're gaining we are excited by the future of the adventure sports and all of our platforms, but that is going to take a little time, which is why we see the trajectory happening throughout the rest of the year.
Unknown Executive: Yes.
Speaker Change: Got it and just one more for me.
Unknown Executive: And just one more for me, we want to think through the margin outlook for fiscal 25. Are the upside and downside cases and guidance mostly related to just where sales kind of fall in the associated leverage or deleverage, or is there a sliding scale on the underlying margin assumption as well, as we think about, you know, the opportunities for margin improvement year over year?
Speaker Change: I wanted to thank rail.
Unknown Executive: Margin outlook for fiscal 'twenty, five or the upside and downside cases in guidance, mostly related to just the <unk> sales kind of song associated <unk> deleverage.
Unknown Executive: Now the underlying.
Unknown Executive: Margin assumptions as we think.
Unknown Executive: About.
Unknown Executive: The opportunity for margin improvement year over year.
Speaker Change: So I would clarify is that specific to <unk> or for the total business.
Unknown Executive: I want to clarify, is that specific to Revelist or for the whole list?
Unknown Executive: Sorry, yes, specific to Revlin. So it's specific to Revlis, yes it is.
Unknown Executive: Sorry, yes specific traveling.
Unknown Executive: So specific to <unk> is going to be mostly our sales sales related item. We do have flow through on the sales from a guidance perspective that youre going to have a little bit more. So you will see the rates come down a little bit we are confident in the gear up savings and the other pieces that we've talked about so it's less focused on that.
Unknown Executive: So specific to Revlin, it is going to be mostly a sales-related item; we do have pull through on the sales from a guidance perspective that you're going to have a little bit more, the rate coming down a little bit. We are confident in the gear up savings and the other pieces that we've talked about. So it's less focus.
Speaker Change: Okay. Thanks.
Unknown Executive: We now turn to Matt Koranda with Roth and Ken. Your line is open. Please go ahead.
Matthew Butler Koranda: We now turn to Matt Koranda with Roth MKM. Your line is open. Please go ahead.
Matthew Butler Koranda: Hey, guys good morning.
Matthew Butler Koranda: Hey guys, good morning. One of the maybe focus my questions on morning, I just want to focus my questions, maybe on Revelist, and I'm guessing we probably can't really cover too much of the deal update. But the sales outlook for Revelist, I guess the right way to think about it, in your mind, is it basically flat if we just strip out the 30 million from fiber and RCBS? And then it inflected positive in the fourth quarter.
Matthew Butler Koranda: Just wanted to maybe focus my questions on <unk>.
Matthew Butler Koranda: Just wanted to focus my questions maybe on <unk> since I'm guessing, we probably can't really cover too much of the deal update.
Matthew Butler Koranda: But.
Matthew Butler Koranda: The sales outlook for <unk>.
Matthew Butler Koranda: I guess, the right way to think about it.
Matthew Butler Koranda: In your mind is it basically flat if we just strip out the 30 million from fiber and our CBS and then.
Matthew Butler Koranda: Was that just product launch related? Like, why shouldn't that sustain through the rest of the fiscal year in 25? Just given that the channel likely needs some restocking in certain pockets, and you just highlighted DTC growth?
Matthew Butler Koranda: It inflected positive in the fourth quarter was that just product launch related like why shouldnt that sustain through the rest of the fiscal year and 25, just given that the channel likely needs. Some restock in certain pockets and you just highlighted DTC growth.
Speaker Change: Sure Good morning, Matt good to hear from you.
Unknown Executive: Sure. Morning, Matt.
Matt: So I'll start with the first comment we continue to plan the business conservatively for this year based on a lot of the uncertain macroeconomic trends that everyone's seeing right now.
Unknown Executive: Good to hear from you. So I'll start with the first comment. You know, we continue to plan the business conservatively for this year based on a lot of the uncertain macroeconomic trends that everyone's seeing right now. We feel confident. I guess your question about being flat to midpoint, you know; we provide a range. I think we feel good about where we are in that range, and I think you'd be correct that the midpoint would be fairly stable. And that's, you know, we've built most of our assumptions on that.
Unknown Executive: We feel confident.
Unknown Executive: Your question about being flat to mid point, we provide a range I think we feel good about where we are in that range.
Unknown Executive: I think you'd be correct that the midpoint would be fairly flat.
Unknown Executive: We built most of our assumptions on that.
Unknown Executive: You know, there obviously could be variability. So we want to make sure that we provide a range around that on the margin side. And, you know, all the things that we're doing, we feel really confident that the team is doing the right things to make sure that we improve. So, that's our focus, and I think you'd be right that flat X divestitures is how we've thought about that.
Unknown Executive: There, obviously could be variability so we want to make sure that we provide a range around that on the margin side and all the things that we're doing we feel really confident that the team is doing the right things to make sure that we improve margin against that so that's our focus.
Unknown Executive: And I think you'd be right that flat ex divestitures is how we've thought about things.
Unknown Executive: Okay got it and then just in terms of.
Unknown Executive: Okay, got it. And then, just in terms of the margin improvement plan for this year. I know you have 25 million in run rate savings that you called out in 24. Maybe Andy, just how does that wrap into 25? And then the 25 to 30 in run rate? How much of that actually, I guess, gets realized in 25? Are we counting on all of that to sort of hit the mid point of the EBITDA guide for Revolist specifically?
Unknown Executive: The margin improvement plan for this year I know you have $25 million and run rate savings.
Unknown Executive: Called out in 'twenty, four maybe Andy just how does that ramp into 'twenty fives, and then the 25% 30% run rate how much of that actually I guess gets realized in 'twenty five or we are counting on all of that to sort of hit the midpoint of the EBITDA guide for <unk> specifically.
Unknown Executive: Yes.
Unknown Executive: Yeah, so thanks, Matt. The 25 to 30 is the expected amount that's going to be contributed to the FY25 guidance number. That'll then increase because some of that will, as you said, be effective throughout the year. It won't all hit all at once, which is part of why you'll see margins improve throughout the year because those cost savings will start hitting as we go forward. I mean, we've announced several things about changes that we've made to offices.
Andy: Thanks, Matt the 25% to 30 is the expected amount that's going to be contributed to the FY 'twenty five guidance number that will then increase because some of that will as you said be effective throughout the year a one off hit all at once which is part of why you will see margins improve throughout the year is that those cost savings will.
Unknown Executive: Start hitting as we go forward I mean, we've we've announced several things.
Unknown Executive: Changes that we've made two offices those will take effect here in the spring and the summer.
Unknown Executive: Those will take effect here in the spring and summer. The announcement of the Reno facility that Eric mentioned took effect this quarter here, so that'll wrap as we go forward, too, and we'll have a couple other items that happen throughout this year. So there will be 25 to 30 that actually hit in the current year, and then that'll annualize into 26 to more.
Unknown Executive: The announcement of the Reno facility that Eric mentioned took effect here in the quarter here, so that will wrap as weak as we go forward to and we will have a couple of other items that happened throughout this year or so so there will be 25% to 30 that actually hit in the current year and then that will annualize in 2006 to more than.
Unknown Executive: The 25 to 30.
Speaker Change: Okay got you and then just in terms of implied corporate expense and the guide for this year looks I guess, a little bit lower than the combined level that you've put out before or is that improvement coming from and.
Unknown Executive: Okay, gotcha. And then just in terms of the implied corporate expense in the guide for this year, it looks, I guess, a little bit lower than the combined level that you put out before. Where's that improvement coming from? And does that mean that we could see some reduction in maybe Revelist's standalone corporate costs? Maybe just update us on that, if you could.
Unknown Executive: And does that mean that we could see some reduction in maybe revelus standalone corporate costs, maybe just update us on that would be good.
Unknown Executive: for the, you mean the end of the year, how the corporate cost came through?
Unknown Executive: For the you mean, the end of the year, how the our corporate cost came through.
Unknown Executive: Well, so I guess I'm just backing into an implied level of guidance based on the consolidated Evita Guide versus the segment level Evita Guide, so it just looks a little bit lower implied, so that's what I'm alluding to.
Speaker Change: Well, so I guess I'm just backing into an implied.
Unknown Executive: Level of guidance based on the consolidated EBITDA guide versus the segment level EBITDA guide so it just looks a little bit lower.
Unknown Executive: <unk>, so that's what I'm alluding to.
Unknown Executive: Yeah, yeah, I got you. We, for the regular standalone costs, we're still in the ballpark of what we had expected previously. The, what we're looking for for the current year is we have made some cuts that we're taking from what the current run rate for Total Vista is, but as we build up the REVLIS plan, we are still expecting it to be in that kind of 55-ish.
Speaker Change: Yeah, I got you.
Unknown Executive: For the rental of stand alone costs, we are still in the ballpark of what we had expected previously.
Unknown Executive: What we're looking for for the current year as we have made some.
Unknown Executive: Some cuts that we're taking from what the current run rate for total <unk>, but as we build up the rebels plan.
Unknown Executive: We are still expecting it to be in that.
Unknown Executive: 55 ish million kind of range.
Speaker Change: Okay Gotcha, and then maybe just last one in terms of.
Unknown Executive: Okay, gotcha. And then maybe just last one in terms of how we should be thinking about the pro forma balance sheet at Revelist. I had kind of a two-parter here.
Unknown Executive: How we should be thinking about the pro forma balance sheet that rebalances I had like a two parter here.
Unknown Executive: Any thoughts, Andy, on just the seasonality of the free cash flow that you expect in fiscal 25? I noticed the midpoint is still pretty healthy. Just wondering if we should expect a relatively normal seasonal year from a cash flow perspective. And then from a divestiture standpoint, just curious, you know, RCBS, I guess, being the best near-term example of monetization. Are there other items in the pipeline that could go off, I guess, in the next? short bit here, but yeah, that'll improve the balance sheet standalone at RevList even further.
Unknown Executive: Any thoughts Andy on just the seasonality of the free cash flow that you expect in fiscal 'twenty five I noticed the midpoint.
Unknown Executive: It's still pretty healthy just wondering if we should expect like a relatively normal seasonal year from a cash flow perspective.
Unknown Executive: And then.
Unknown Executive: From a divestiture standpoint, just curious our CBS I guess being the best near term example of monetization.
Unknown Executive: Are there other items in the pipeline that could go off I guess in the next.
Unknown Executive: Sharp it here, but that will improve the balance sheet standalone are robust even further.
Andy: Sure, Matt we will take the two part question with two people.
Unknown Executive: Sure, Matt, we'll take the two-part question with two people, I think. So I'll take the divestiture part. Matt, you know, strategically, we've talked a lot about creating, you know, a great portfolio of brands. And we do feel like there's still more room, you know, to explore the right divestitures and, frankly, the right acquisitions that could create bolt-on momentum and sales growth in the right areas. So I think, you know, we're really proud of what the team was able to do on our CPS.
Unknown Executive: So I'll take the divestiture part Matt strategically we've talked a lot about creating a great portfolio of brands and we do feel like there is still more room.
Unknown Executive: To explore the right divestitures and frankly, the right acquisitions that could create bolt on momentum in sales growth in the right areas. So I think we're really proud of what the team was able to do in our Cps.
Unknown Executive: Not just for selling the company and, you know, returning, you know, some good momentum to the balance sheet, but also for finding the right company for our team to connect with at, you know, over at Hodgkin. And I'd say we are continuing discussions around a few other brands that we think could be really strong opportunities for other companies. And you'll hear from that in the months ahead. And to your question on seasonality of cash, I would look at it similar to what we did kind of this year, that it'll grow throughout the year. That's kind of how we've trended. I think we'll expect a similar kind of outlook.
Unknown Executive: Not just for selling the company and returning.
Unknown Executive: Some good momentum to the balance sheet, but also finding the right company for our team to connect with that Ed.
Unknown Executive: Over at Hodgkin and I'd say, we are continuing discussions around a few other.
Unknown Executive: Brands that we think could be.
Unknown Executive: Really strong opportunities for other companies and you'll hear from that in the months ahead.
Unknown Executive: And to your question on seasonality of cash.
Unknown Executive: I'd look at it similar to what we did kind of this year as it will grow throughout the year, that's kind of how we've trended I think we will expect similar kind of outlook.
Speaker Change: Okay I'll take the rest of mine offline guys. Thanks.
Unknown Executive: Okay, I'll take the rest of mine offline, guys. Thanks.
Unknown Executive: Sure.
James Andrew Chartier: Our next question comes from Jim Chartier, with Moness, Crespi, and Hart.
Speaker Change: Our next.
Unknown Executive: <unk> comes from Jim Chartier with <unk> Crespi Hardt.
James Andrew Chartier: Your line is open. Please go ahead.
James Andrew Chartier: Hi, Thanks for taking my questions.
James Andrew Chartier: Thanks for taking my question. Jason, how are you kind of thinking about your price increases for the year and what level of price increases are you kind of assuming in the guidance? increase you've taken so far. Do you assume that, you know, all of those are fully implemented or, Yeah, Jim, good morning.
James Andrew Chartier: Jason how are you kind of 50 about price increases for the year and what level of price increases are you kind of assuming in the guidance.
James Andrew Chartier: There'd be increased you've taken so far.
James Andrew Chartier: But all of those are fully implemented or is there some conservatism there.
Jason R. Vanderbrink: In the guide, we didn't assume any price increases. Having said that, we have just implemented one on May 1st, a pretty targeted price increase, and we're confident that the market is going to accept that. And given the momentum, if you will, of the copper pricing, I think it's safe to assume we're going to have to take another price increase, a broader price increase, in the coming months to help cover that copper.
Jim: Yes, Jim good morning.
James Andrew Chartier: In the guide we didn't we didn't assume any price increases.
Jason R. Vanderbrink: Having said that we have just implemented one on may the first.
Jason R. Vanderbrink: Pretty targeted price increase.
Jason R. Vanderbrink: And we're confident that the market is going to accept that.
Jason R. Vanderbrink: And given the.
Jason R. Vanderbrink: The momentum if you will.
Jason R. Vanderbrink: The copper pricing I think it's safe to assume we're going to have to take another price increase a broader price increase in the coming months to help cover that copper so.
Jason R. Vanderbrink: So I think we like what we see on the pricing side of the business, and I think we're going to be challenged all year with powder and copper, and we're going to offset as much as we can to come in at the high range of that EBITDA margin that we've guided to. And we're going to still be solely focused on the bottom line. I mean, to deliver 27.7% in the quarter, we would love to continue that momentum that we had in fiscal year 24 into fiscal year 25.
Jason R. Vanderbrink: I think wed.
Jason R. Vanderbrink: We like what we see in the pricing side of the business and I think we're going to be challenged all year with powder in copper and we're going to offset as much as we can to come in at the high range of that.
Jason R. Vanderbrink: EBITDA margin that we've guided to were going to still.
Jason R. Vanderbrink: B b solely focused on the bottom line.
Jason R. Vanderbrink: To deliver 27, 7% in the quarter, we would love to continue that momentum that we have in fiscal year 'twenty four and the 25.
Speaker Change: Great and then.
Speaker Change: Okay, Eric Randy what is kind of a pls trend that's assumed in the guidance for.
Unknown Executive: Unknown Speaker. Great. And then, Eric or Andy, what is the kind of POS trend that's assumed in the guidance for? Sure. Morning, Jim. Good to hear from you.
Speaker Change: FY 'twenty five.
Andy: Sure Good morning, Jim Goodyear from you.
Unknown Executive: Sure, morning, Jim. Good to hear from you. So, you know, for POS and shipments, we're feeling like this year, again, we're being modest and planning modestly and conservatively, as we talked about with both Matt and Anna. Right now, we feel like the trend will probably be slightly down in Q1. And then we'll build momentum throughout the rest of the year. You know, again, we are seeing good market share gains across the business.
Unknown Executive: So for Pos and shipments we're feeling like this year again, we're being modest in planning modestly and conservatively as we talked about with both Matt and Diana.
Unknown Executive: Right now we feel like the trend will probably be slightly down in Q1, and then we'll build momentum throughout the rest of the year.
Unknown Executive: Again, we are seeing good market share gains across the business, that's clearly really important to us.
Unknown Executive: We're really seeing positive momentum, particularly on brands like Fox and Bell and Giro and the market share front.
Unknown Executive: That's clearly really important to us. You know, we're really seeing positive momentum, particularly on brands like Fox and Bell and Giro on the market share front. And, you know, regardless of what the consumer does, winning market share is really significant when the market starts to turn. So we feel like we're at that inflection point. And I think we'll see some good back-half momentum for some of our businesses, which will allow us to achieve our targets.
Unknown Executive: And regardless of what the.
Unknown Executive: Consumer does winning market share is really significant when the market starts to turn so we feel like we're at that inflection point.
Unknown Executive: I think we'll see some good back half momentum for some of our businesses, which will allow us to achieve our range.
Speaker Change: Alright, thank you.
Unknown Executive: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad now. We now turn to Mark Smith on Lake Street. Your line is open, please go
Unknown Executive: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad now.
Unknown Executive: We now turn to Mark Smith with Lake Street. Your line is open. Please go ahead.
Mark Eric Smith: Hi, guys.
Mark Eric Smith: Hi guys. First, I just want to follow up on something, Jason, that you just said.
Mark Eric Smith: Firstly, just wanted to follow up on.
Mark Eric Smith: Some congestion that you just said.
Mark Eric Smith: This increase it sounds like that you guys took in may it sounds like thats not enough to kind of covers the inflationary pressures that youre seeing right now.
Mark Eric Smith: Yes, it wouldn't be enough to cover everything.
Mark Eric Smith: So and it was a very targeted price increase in a particular category. So we will be here.
Mark Eric Smith: Shortly coming out with a broader price increase to more categories to help cover the copper cost increase that we're seeing right now.
Mark Eric Smith: The price increase, it sounds like, that you guys took in May isn't enough to kind of cover the inflationary pressures that you're seeing right now. Yeah, it wouldn't be enough to cover everything, Mark. So, you know, and it was a very targeted price increase in a particular category. So we will be here, you know, shortly coming out with a broader price increase in more categories to help cover the copper cost increase that we're seeing right now.
Mark Eric Smith: Okay.
Jason R. Vanderbrink: And then I'm curious, you know, primarily on this.
Mark Eric Smith: And then I'm curious primarily on <unk>, but if there is anything wrong with kinetic side.
Jason R. Vanderbrink: Kind of what you guys are seeing in the promotional.
Jason R. Vanderbrink: Our environment what.
Jason R. Vanderbrink: Our competitors are doing.
Jason R. Vanderbrink: If there is anything that just gives you a little bit of pause or maybe leads to some of the conservative this primarily on the <unk> side.
Jason R. Vanderbrink: Sure.
Unknown Executive: [inaudible] Sure. Hey, Mark.
Speaker Change: Hey, Mark on the revenue side, we're seeing promotion activity certainly in our business decrease.
Unknown Executive: We had a lot of activity in our fiscal Q3 and that was purposeful I think the teams did an excellent job working through some of the inventory in our business you saw a significant decline year over year over $100 million in inventory. So we feel like we're in a pretty good position at this point.
Unknown Executive: We can always do better, but we feel pretty good about where we are and I think youll see that promotional activity decrease year over year. When you think about the revenue side of the business, albeit I'll turn it over to Jason on kinetic yes, Mark on kinetic we're not seeing much promotion at all on the analyst animal side of the business and we kind of expect that.
Unknown Executive: On the Revo side, you know, we're seeing promotion activity, certainly in our business, decrease. You know, we had a lot of activity in our fiscal Q3, and that was purposeful. I think the teams did an excellent job working through some of the inventory in our business. You saw a significant decline year over year, over $100 million in inventory. So we feel like we're in a pretty good position at this point. We can always do better, but we feel pretty good about where we are.
Unknown Executive: And I think you'll see that promotional activity decrease year over year when you think about the Revo side of the business. I'll leave, I'll turn it over to Jason on Kinetic. Yeah, Mark on Kinetic, we're not seeing
Jason R. Vanderbrink: Yeah, Mark on Kinetic, we're not seeing much promotion at all on the ammo side of the business. And we kind of expect that for the remainder of the calendar year.
Mark: For the remainder of the calendar year.
Mark: The status quo.
Speaker Change: Okay and last one for me, it's a small one.
Mark Eric Smith: Okay, and last one for me, it's a small one. But following that fire at the fiber energy plant, is there a plan to rebuild? Is that a business that you wanna continue to stay in? You know, any plans on that side? Yeah, Mark. I mean, it certainly was tough to see that that happened to the team down there.
Mark Eric Smith: But on the following that fire its fiber energy plant is there a plant.
Mark Eric Smith: To rebuild.
Mark Eric Smith: Is that a business that's going to continue to stay in any plans on that side.
Mark Eric Smith: Yes, Mark I mean, it's.
Unknown Executive: We're evaluating right now. It's a little bit early for us to be able to say what the exact outcome is going to be. We're working through the insurance claim as it's covered by our insurance group. So we have a few things that we're working through. We'll certainly have more updates in the month ahead as we come up with the final outcome. Thank you, guys.
Mark Eric Smith: Certainly it was tough to see that happen to.
Unknown Executive: The team down there, we're evaluating right now it's a little bit early for us to be able to say what the exact outcome is going to be we're working through the insurance claim is it's covered by our insurance group. So we have a few things that we're working through it we'll certainly have more updates in the months ahead as we come up with the solution down there.
Speaker Change: Excellent. Thank you guys.
Unknown Executive: Sure.
Speaker Change: Ladies and gentlemen, this concludes our Q&A and today's conference call, we'd like to thank you for your participation you may now disconnect your lines.
Operator: Ladies and gentlemen, this concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect your lines.
Operator: [music].
Operator: Yes.
Operator: Okay.
Operator: [music].