Q1 2025 Vista Outdoor Inc Earnings Call

Hello and welcome to the first quarter fiscal year 2025 Vista Outdoor Earnings Conference call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, please press star followed by 1 on your telephone keypad.

Alex: Conference Call. My name is Alex. I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, please press star followed by 1 on your telephone keypad, and I will hand it over to our host, Tyler Lindwall, Vice President of Investor Relations.

and I hand it over to our 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 first quarter fiscal year 2025 earnings call. With me this morning are Eric Nyman, co-CEO of Vista Outdoor and CEO of Revellis; 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 first quarter Fiscal Year 2025 earnings call.

Speaker Change: With me this morning are Eric Nyman, Co-CEO of Vista Outdoor and CEO of Revelist, Jason Vanderbrink, Co-CEO of Vista Outdoor and CEO of 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 will 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 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.

Speaker Change: 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. We make these statements under the safe harbor provisions of the Private Securities Litigation Reform Act.

Speaker Change: 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.

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 risks, 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: Eric, I'll turn it over to you.

Eric: Thank you, Tyler. Good morning, everyone. And thank you all for joining us this morning as we discuss our first quarter fiscal year 2025 results.

Eric Nyman: Before I dive into the quarter, I wanted to first touch on the press release issued last One, an exploration of a full range of alternatives for Revo. We look forward to evaluating all strategic alternatives that would maximize value for stockholders, and we remain as focused as ever on delivering high quality, innovative products for our consumers around the world, and the teams did find some tailwinds led by our gearing up cost saving initiatives and great product innovation. We are confident in our fiscal year 2025 financial targets and strongly believe in Revo's potential to deliver on the long-term strategy that we are executing.

Eric: Before I dive into the quarter, I wanted to first touch on the press release issued last week.

Eric: Last week, the board issued a release noting that we have commenced a review of strategic alternatives and have adjourned the special meeting for the CSG transaction to September 13th, 2024.

Eric: The board is committed to acting in the best interests of the company and its stockholders. The strategic review will be comprehensive and include the following.

Eric: One, an exploration of a full range of alternatives for Revelest, including a potential sale of Revelest.

CSG: CSG is also considering an acquisition of Revalyst with potential partners in addition to its proposed acquisition of the Kinetic Group.

Eric: 2. An engagement with MNC Capital and its private equity partner with respect to its proposal to acquire Vista Outdoor to see if it can deliver superior value for the company's stockholders.

MNC Capital: This follows MNC's recent public statement on July 26, 2024, that if there were a reason or basis to increase our offer, including Vista engaging with us in providing one, we would increase our offer price.

Speaker Change: In light of that recent statement, the board has determined that MNC's proposal would reasonably be expected to lead to a superior proposal and meets the standard for engagement under the terms of the CSG merger agreement.

Speaker Change: 3. A continued consideration of the separation of Revelest and the Kinetic Group through a spin-off.

Speaker Change: Our advisors are looking at several strategic alternatives in order to maximize stockholder value. As an update on the strategic review, we have engaged with MNC to see if they can deliver superior value for the company's stockholders.

Speaker Change: Additionally, we have reached out to several parties regarding a potential acquisition of the Revolis business.

Speaker Change: Furthermore, CSG remains steadfast in their commitment to acquiring the Kinetic Group and is exploring the acquisition of Revalyst with potential partners.

Speaker Change: The Board continues to recommend Vista Outdoor stockholders vote in favour of the proposal to adopt the merger agreement with CSG.

Speaker Change: We look forward to evaluating all strategic alternatives that would maximize value for stockholders, and we remain as focused as ever on delivering high-quality, innovative products for our consumers around the world.

Speaker Change: Moving on to RevList results. Our teams across the organization executed against our plan in the first quarter of fiscal year 2025, and we are grateful for their hard work delivering in the face of continued market headwinds in certain segments.

Speaker Change: and the continued uncertainty in the face of our planned separation.

Speaker Change: We did face some challenges in Q1 in both supply chain and new product launch timing introductions, which led to results that were not up to our expectations.

Speaker Change: That said, we understand the challenges and are already putting solutions in place to improve in the future and the teams did find some tailwinds led by our gear up cost saving initiatives and great product innovation.

Speaker Change: Sales for the quarter were $274 million, and adjusted EBITDA was $16 million with an adjusted EBITDA margin of 5.7%.

Speaker Change: We are confident in our fiscal year 2025 financial targets and strongly believe in Revo's potential to deliver on the long-term strategy that we are executing.

Speaker Change: Across the enterprise, we made progress implementing our actionable stand-alone strategy to drive value creation.

Speaker Change: Our strategy is built on our dragonfly wheel to generate momentum. The Revolus dragonfly wheel is our multi-pronged strategic flywheel, which plays upon our iconic dragonfly logo.

Speaker Change: The Dragonfly Wheel contains our key strategies to unlock growth and propel margin expansion across our integrated, international House of Brands.

Speaker Change: The Dragonfly Wheel is brand-focused and consumer-informed to unlock value through innovative product and technology offerings, enhanced direct-to-consumer and international channel strategies.

Speaker Change: a robust digital gaming ecosystem, and world-class licensing partnerships.

Eric Nyman: We continue to focus on innovation by leveraging our portfolio of category-defining power brands to win market share despite challenges related to market softness, order timing, and divestiture. Recent examples of these brand highlights, innovative offerings, and partnerships include In Revelest Adventure Sports, we are capturing market share across numerous categories, including helmets, mountain bike protection, and bike hydration in a declining market environment. In Revellist Precision Sports Technology, Foresight has had multiple consecutive quarters of growth as a result of the Quad Max and Falcon product launches. Foresight and Bushnell Golf continue to set the standard in golf technology.

Speaker Change: We continue to focus on innovation by leveraging our portfolio of category-defining power brands to win market share despite challenges related to market softness, order timing, and divestitures.

Speaker Change: We remain focused on driving growth and market share gains, no matter the market conditions.

Speaker Change: and are poised to revolutionize our future through innovative, brand-led, and consumer-obsessed product and technology offerings, as well as leading partnerships.

Speaker Change: Recent examples of these brand highlights, innovative offerings, and partnerships include In Revelest Adventure Sports, we are capturing market share across numerous categories including helmets, mountain bike protection, and bike hydration in a declining market environment.

Speaker Change: Newness is gaining traction with our customers, and many of our newly introduced products and new styles, such as the V3RS, Race Frame, and PureView are sold out. We intend to further capitalize on these trends with upcoming product launches.

Speaker Change: In Revelest Outdoor Performance, recent product launches across the platform have driven market share gains.

Speaker Change: We continue to grow market share at Sims, where we hold a dominant position in waiters and in fishing sportswear, where we recently won Best in Category awards at ICAST for the women's Latitude hoodie and the ProDry suit.

Speaker Change: The successful launch of the Camp Chef Gridiron in the spring drove 8% growth in the flat-top grill category, outpacing the market in a category that has been a bright spot within the broader outdoor cooking market.

Speaker Change: In Revelest Precision Sports Technology, Foresight has had multiple consecutive quarters of growth as a result of the Quad Max and Falcon product launches.

Speaker Change: The delayed launch of the Phantom 3 GPS drove Bushnell golf sales lower than anticipated in the quarter, but we still expect this product to capture additional sales for the rest of fiscal year 2025.

Speaker Change: Foresight and Bushnell Golf continue to set the standard in golf technology.

Speaker Change: The power of these two brands living under the same leadership and platform will really be showcased this fall with a cooperative effort between Foresight Sports and Bushnell Golf that will change the way golfers capture and utilize information from launch monitors and laser rangefinders.

Speaker Change: In licensing, our platform teams have been hard at work leveraging our brands to ink new licensing partnerships to unlock additional revenue streams, further scale our brands, and reach new customers.

Speaker Change: We are excited to announce our biggest partnership ever, a collaboration with celebrity chef and restaurateur Guy Fieri.

Speaker Change: This collaboration between Revelist, Camp Chef, and Fieri unites the mayor of Flavortown himself with the leading innovator in outdoor cooking gear.

Speaker Change: Fieri has long served as an unofficial brand ambassador while using the brand's products on screen, on stage, and at home.

Speaker Change: This multi-year partnership will include several collaborations between FIETI and Camp Chef and will include a number of co-branded cooking equipment pieces.

Eric Nyman: Be on the lookout for more news on this category-defining announcement on August 19th across Revelist social channels and CampChef.com. We are extremely excited to welcome Guy to Team Revelist. Moving on, our international expansion and transformation of our operating model is underway, and we believe that there is a significant opportunity to elevate and grow our brands through a unified and scalable approach. We had a strong quarter of successful course launches. We have also entered into an exclusive partnership with TARA-ED, the number two ranked course in the world on the Golf Digest World's 100 Greatest Golf Courses list.

Speaker Change: Be on the lookout for more news on this category-defining announcement on August 19th across Revelist social channels and CampChef.com. We are extremely excited to welcome Guy to Team Revelist.

Speaker Change: Furthermore, at Foresight, we have an exciting licensing agreement and product collaboration coming very soon through our relationship with Volition America. This custom offering will bridge the tangible and the digital worlds and will benefit the Folds of Honor Foundation.

Speaker Change: Moving on, our international expansion and transformation of our operating model is underway and we believe that there is a significant opportunity to elevate and grow our brands through a unified and scalable approach.

Speaker Change: We have made substantial progress at Revelist by leveraging the operational backbone we acquired through our acquisition of Fox. This has allowed us to expand our presence across the globe for additional brands to reach new markets.

Speaker Change: We plan to continue the strategic expansion to regions where a unified operating model can be a growth catalyst for our brands.

Speaker Change: As we look at our direct-to-consumer and digital approach, our enhanced direct-to-consumer strategy places an emphasis on our own brand channels and other e-commerce sites, including Amazon.

Speaker Change: This strategy shift is in process, and early results are promising, particularly with Amazon, where we grew low single digits year over year in Q1.

Speaker Change: We have also seen gains at certain direct brand sites, including Foresight.

Speaker Change: where the direct site revenue is up over 30% year-over-year and continues to be a leading growth contributor to the Revelest precision sports technology platform. We also had a milestone achievement in the Revelest adventure sports platform with the iPhone created campaign CamelHack.

Speaker Change: that over-indexed and received over 1 million views on TikTok and 2 million views on Instagram, becoming the highest-viewed post on Camelbak's Instagram of all time.

Speaker Change: We aim to repeat this success with other products to drive brand engagement and sales in the future.

Speaker Change: Our digital gaming and eSports initiatives are applying Revelus digital first thinking to create engaging content and gaming experiences that provide new consumer opportunities.

Speaker Change: Our acquisition of Penseeker furthered our commitment to this strategy.

Speaker Change: PennSeeker has seen explosive year-over-year growth and early results have exceeded our acquisition forecast model, further validating our digital gaming strategy and the decision to acquire that business.

Speaker Change: The Pensaker team has also jump-started our broader Foresight Studios strategy.

Speaker Change: We had a strong quarter of successful course launches, including our recent digital course launch of Pinehurst No. 2, available on our Foresight Simulators that coincided with the U.S. Open Week played at the Namesake course.

Speaker Change: We also entered into an exclusive partnership with Tara Edie, the number 2 ranked course in the world on the Golf Digest World's 100 Greatest Golf Courses list.

Speaker Change: These courses add to Foresight's list of premium course offerings that can be purchased for use in our simulators and demonstrate our commitment to providing a world-class user experience for all of our simulator owners.

Speaker Change: We are encouraged by these developments and the roadmap the team has set forth, and we expect to have more announcements to come soon.

Speaker Change: You will hear more about our excellent progress on our gear up transformation from Andy shortly, but I wanted to highlight the strong work our teams have done to optimize our portfolio to focus on our core assets with significant value and growth potential.

Eric Nyman: This strategic divestiture generated cash for Revalyst that can be reinvested in our power brands and product innovation in support of our gearing up transformation initiative. Alongside the RCBS sale announced in May, we have now completed two strategic divestitures to rebalance our portfolio. Digital First Thinking to create engaging content and gaming opportunities. I am confident in our financial targets and ability to double our standalone adjusted EBITDA in fiscal year 2025.

Andy: In July , we announced the sale of fiber energy products. This strategic divestiture generated cash for Revelest that can be reinvested in our power brands and product innovation in support of our Gear Up transformation initiative.

Andy: The new ownership provides resources and scale to the fiber energy brand, and we wish them the best of luck with this new endeavor.

Andy: Alongside the RCBS sale announced in May, we have now completed two strategic divestitures to rebalance our portfolio.

Speaker Change: Our strategic review is ongoing, and we see additional opportunities in the future.

Andy: This review is a critical step in evaluating where further rebalancing will help to best position us for long-term success.

Andy: Teams across our business are executing on our transformation through the GEAR UP program and our value-creating Dragon Flywheel to unlock growth and margin expansion through game-changing innovations.

Andy: exceptional licensing partnerships, an enhanced direct-to-consumer and international channel strategy, and digital first thinking to create engaging content and gaming opportunities.

Andy: We are relentless in our pursuit of excellence, and that drives my belief in our strategy and the future ahead of us.

Andy: I am confident in our financial targets and ability to double our stand-alone adjusted EBITDA in FY 2025. In that spirit, we will be announcing the date of our upcoming Investor Day in the weeks ahead, and look forward to sharing more details about the REVOIST story.

Andy: I'll now hand it over to Jason to provide an update on the Kinetic Group. Jason, over to you.

Jason: Thank you, Eric, and good morning, everyone.

Jason: The Kinetic Group delivered above-expected earnings for the first quarter.

Jason: Sales were $370 million with an adjusted EBITDA margin of 30% and adjusted EBITDA of $111 million. Continuing the strong performance we demonstrated at the end of FY24.

Speaker Change: Our team has stayed focused while facing economic headwinds and inflationary pressures with rising commodity prices and successfully navigating a global powder shortage.

Andy: As history has shown us several times, if the market starts to slow, we expect to gain market share due to vendor consolidation at our customers, and consumers generally will purchase the brands they trust.

Andy: As we are getting close to the important hunting seasons, our finished goods inventory in this key category is well positioned to fill consumer demand in all hunting loads in every category.

Andy: We expect Heavy Shot to continue the momentum we have built since the acquisition, and Remington-Corlockt inventory and demand is in the best shape it has been in several years.

Andy: Our seasonal build program has produced many calibers that the consumer has not been able to purchase in many years, which also brings higher margins with it.

Eric Nyman: which also brings higher margins with it. The cross collaboration between our factories has resulted in cost savings, technology sharing, and allows us to best route production by cost and expertise. With a diverse customer base and multi-brand strategy, the Kinetic Group is poised to continue to be the leader in ammunition technology. And we are planning to release the most exciting product we have ever developed in our history in our third quarter.

Andy: We continue to try to meet the demand we have seen with the CCI Uppercut product, which has exceeded our forecast when we introduced this game-changing product.

Jason: At the industry's largest consumer trade show, the National Rifle Association Annual Meetings and Exhibits, our brands were officially presented with Golden Bullseye Awards in every ammunition category. This is the first time we have swept these prestigious awards for excellence in new product technology.

Andy: The products recognized were Spear Gold Dot Carbine, Federal Premium Force X2 Shorty, and the Remington 360 Buckhammer.

Jason: Continuing our long-standing support for the United States military, Federal announced a $3.6 million contract award for the 7.62x51 long-range ammunition for the United States Special Operations Command, or SOCOM.

Jason: This trusted product is currently being produced for the United States Navy in a separate contract, demonstrating our American manufacturing expertise and proven history of supplying the United States warfighter with the best products to protect and defend.

Speaker Change: As part of our company DNA, we recently held a benefit auction at our annual sales meeting in Minnesota, and were able to donate at least $20,000 to each of our beneficiary charities.

Jason: the Anoka County Police Department, the Anoka County Sheriff's Office, the Anoka County Brotherhood Council Food Shelf, and the Vista Outdoor Employee Assistance Fund. This is a true testament to helping serve the communities that our factories are located in.

Speaker Change: For the 59th straight month in June , NICS data surpassed more than 1 million background checks. This continued high monthly volume supports a healthy and higher baseline of shooting and hunting participants.

Speaker Change: As we navigate the future and the United States presidential election, our American manufacturing facilities remain focused on building the best ammunition in America and delivering on all of our key financial metrics.

Speaker Change: The cross-collaboration between our factories has resulted in cost savings, technology sharing, and allows us to best route production by cost and expertise. This serves as a tremendous competitive advantage for us, which is reflected in our profitability.

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 are presented using non-GAAP financial measures.

Eric Nyman: 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. I will reference the three RevList segments, RevList Adventure Sports, RevList Outdoor Performance, and RevList Precision Sports Technology in a combined manner as RevList in my remarks that follow. For the first quarter, total sales decreased 7.1% to $644.2 million. Gross profit in Q1 decreased 6.9% to $211.2 million due to decreased volume and increased input costs, including for copper and powder at Kinetic.

Speaker Change: I will reference the three RevList segments, RevList Adventure Sports, RevList Outdoor Performance, and RevList Precision Sports Technology, in a combined manner as RevList, in my remarks that follow.

Speaker Change: Additionally, Adjusted Pre-Cash Flow significantly outperformed our expectations in the first quarter, delivering $70 million due to strong Adjusted Pre-Cash Flow from the Kinetic Group and a continued focus to reduce inventory at RevList.

Speaker Change: Allowing us to reduce our net debt position by $81 million in the quarter.

Speaker Change: Gross profit in Q1 decreased 6.9% to $211.2 million due to decreased volume and increased input costs, including for copper and powder at the Kinetic Group, and lower volume at Revolus, partially offset by increased price at the Kinetic Group.

Eric Nyman: Due to decreased growth profits at the Kinetic Group and Revlis, partially offset by decreased selling, general, and administrative costs related to gearing up and, Our continued inventory reduction efforts at Revolus and strong profitability at the Kinetic Group drove adjusted free cash flow of $70 million in the quarter, providing the opportunity to reduce our net debt by $81 million sequentially. Within Revolus, sales decreased 13.6% in Q1 to $273.7 million, driven by pre-order delivery timing and one-time royalty revenue in the prior year, as well as an unfavorable product mix towards lower price point channels within Revolus Ventures, lower wholesale volume, and order timing within Revo's outdoor performance.

Speaker Change: and $10 million or 4% sequentially.

Speaker Change: Our continued inventory reduction efforts at Revolus and strong profitability at the Kinetic Group drove adjusted free cash flow of $70 million in the quarter, providing the opportunity to reduce our net debt by $81 million sequentially.

Speaker Change: Our net debt ended the quarter at $579 million, equating to a net debt leverage ratio of 1.3 times.

Speaker Change: Turning to our business results on slide 20.

Speaker Change: Within Revolus, sales decreased 13.6% in Q1 to $273.7 million.

Speaker Change: driven by pre-order delivery timing and one-time royalty revenue in the prior year, as well as unfavorable product mix towards lower price point channels within Revelest Adventure Sports.

Speaker Change: Lower wholesale volume and order timing within Revolus Outdoor Performance. And lower volume as a result of strong new product introductions in the prior year for Bushnell Golf and order timing within Revolus Precision Sports Technology.

Speaker Change: The decline was partially offset by increased government sales at Revelest Outdoor Performance and growth at Foresight driven by new product introductions at Revelest Precision Sports Technology.

Speaker Change: And we will see you next time. Bye.

Speaker Change: Gross profit decreased 14.2% in Q1 to $81.4 million, and Q1 gross margin decreased 21 basis points to 29.7% due to reduction in sales,

Speaker Change: Partially offset by lower freight costs at Revellis Adventure Sports, lower discounting at Revellis Outdoor Performance, and favorable product mix at Revellis Precision Sports Technology.

Speaker Change: Q1 EBITDA was $15.6 million, down 35.2%, and EBITDA margin for the quarter was 5.7%, down 190 basis points year-over-year, due to lower gross profit at all three REVO segments.

Speaker Change: partially upset by decreased selling general administrative costs related to gear up initiatives.

Eric Nyman: The decline was partially offset by increased government sales at Revolus Outdoor Performance and growth at Foresight driven by new product introductions at Revolus Precision Sports Technology, partially upset by decreased selling general administrative costs related to the year-up. For the Kinetic Group, sales decreased 1.6% in Q1 to $370.4 million due to lower shipments across nearly all categories, partially upset by increased. We have seen channel inventory health continue to improve during the quarter relative to the prior We do expect to recoup the $13 million of orders which shifted out of Q1 into Q2 due to challenges related to shipping filled orders at the end of the quarter and delayed new product.

Speaker Change: For the Kinetic Group, sales decreased 1.6% in Q1 to $370.4 million due to lower shipments across nearly all categories, partially offset by increased price.

Speaker Change: Gross profit decreased 1.6% in Q1 to $129.8 million, and Q1 margin remained flat at 35% due to decreased volume and increased input costs primarily for copper and powder. These decreases were partially offset by increased price.

Speaker Change: Q1 EBITDA was $111.2 million, down 3.2%, and EBITDA margin for the quarter was 30% due to decreased gross profit and increased selling, general, and administrative costs.

Speaker Change: Moving on to page 22. As we look to the remainder of the fiscal year 2025, at the Kinetic Group, we continue to see headwinds from a global powder shortage limiting production and from increased input costs, including for copper and powder.

Speaker Change: We have seen channel inventory health continue to improve during the quarter relative to the prior year in both specialty and mass channels.

Speaker Change: As we look to the remainder of the year, we have included in our guidance the list of exciting product launches, cross-collaboration, and key partnership launches that we plan to announce in the coming month.

Speaker Change: We do expect to recoup the $13 million of orders which shifted out of Q1 into Q2 due to challenges related to shipping filled orders at the end of the quarter and delayed new product introduction.

Speaker Change: Further, our FY 2025 sales guidance excludes RCBS and Fiber Energy products, both of which have been divested.

Speaker Change: Our CBS and fiber energy products contributed approximately $30 million of total combined sales in fiscal year 2024.

Speaker Change: As we look at Revela's EVADUG items, we are confident in our expectations for the fiscal year and expect to see sequential margin improvement each quarter due to a number of factors, including our GEAR UP transformation program.

Speaker Change: As Eric mentioned, we are making tremendous progress with our GEAR UP program, which contributed $5 million in realized cost savings in the first quarter.

Eric: We see a clear path to reaching our goal of $25 to $30 million in cost savings in fiscal year 2025 across our key gear-up focus areas that include organizational structure, real estate,

Speaker Change: Supply Chain and Operations, Indirect Costs, and Direct Costs.

Speaker Change: Within our organizational structure, we expect cost savings of $20 million this year due to increased efficiency through the consolidation to three platform headquarters with an eye on refining our structure to promote growth and bring in new capabilities.

Speaker Change: Within real estate, we expect to save approximately $2-3 million in real estate cost savings this year by exiting leases and space, reducing our U.S. real estate footprint by a third.

Speaker Change: We are targeting savings of more than $5 million this year related to our supply chain and operations. At the center of this is our distribution network warehouse strategy.

Speaker Change: We are reducing our distribution center footprint and rebalancing the inventory in our network to reduce costs. As of today, we have closed two distribution centers and are targeting the closure of a third by the end of the second quarter.

Speaker Change: Looking at indirect costs, we are finding savings of two to three million dollars that we anticipate will flow through the P&L this year.

Speaker Change: One contributing example is a new contract that will reduce the credit card fees we pay when conducting car transactions.

Speaker Change: And as it relates to direct costs, longer term, we have a line of sight to significant cost savings in the key spend categories through cross-brand supply rationalization, consolidation, and simplification.

Eric Nyman: The positive momentum we have built provides confidence in achieving our long-term goal of realizing $100 million of run rate cost savings by FY 2027. The contributions from our previously announced April 2023 cost restructuring program will contribute approximately $10 million to RevList in fiscal year 2025.

Speaker Change: Overall, we are pleased with the GEAR UP results to date. The positive momentum we have built provides confidence in achieving our long-term goal of realizing $100 million of run rate cost savings by FY 2027.

Speaker Change: Beyond the GEAR UP initiative as outlined, we have also incorporated additional considerations into our guidance.

Speaker Change: These considerations are, the contributions from our previously announced April 2023 cost restructuring program will contribute approximately $10 million to REVLIS in fiscal year 2025.

Tyler Lindwall: Improvements in supply chain and freight as our inventory with higher-priced freight will have turned through our inventory balance. We reaffirm our expectation to double our standalone adjusted EBITDA at Revolus in fiscal year 2025, and over the long term, believe that Revolus standalone adjusted EBITDA margins will be in the mid, Kinetic Group Adjusted EBDA of $350 to $400 million, and Revo suggested EBITDA of $130 Adjusted EPS in the range of $3.60 to $4.50, and adjusted free cash flow between $240 and $320 million, as we look at the phasing for both the Kinetic Group and Revell's business.

Speaker Change: Improvements in supply chain and freight as our inventory with higher price freight will have turned through our inventory balance and lower expected promotions as compared to our fiscal year 2024 in which we had higher than usual promotional levels to drive inventory levels down.

Speaker Change: We are confident that Revelus operational and organizational improvements will continue to positively flow through to the bottom line in both the short and long term, regardless of near-term marketplace conditions.

Speaker Change: We reaffirm our expectation to double our stand-alone adjusted EBITDA at Revalist in FY 2025, and over the long term, believe that Revalist's stand-alone adjusted EBITDA margins will be in the mid-teens.

Speaker Change: Based on the factors outlined, for the full fiscal year 2025, we expect

Speaker Change: Sales of $2.665 to $2.775 billion dollars. The Connecticut Group sales of $1.425 to $1.475 billion dollars. And Revolut sales of $1.24 to $1.3 billion dollars.

Speaker Change: Adjusted EBITDA between 410 and 490 million dollars.

Speaker Change: The Kinetic Group Adjusted EBITDA of $350 to $400 million and Revolus Adjusted EBITDA of $130 to $160 million.

Speaker Change: Adjusted EPS in the range of $3.60 to $4.50, and adjusted free cash flow between $240 and $320 million.

Speaker Change: As we look at phasing for both the Connecticut and Revlis businesses.

Speaker Change: Within the Kinetic Group, both sales and EBITDA for the remaining three quarters of the fiscal year are expected to be evenly distributed each quarter.

Speaker Change: For Revolus, as we look at Q2, we expect sales to be down year over year, but improve sequentially, and we see continued sequential improvement throughout the remainder of the year.

Speaker Change: We expect EBITDA to more than double sequentially and be higher than the prior year as gear-up savings take effect.

Tyler Lindwall: Within the Kinetic Group, both sales and EVDA for the remaining three quarters of the fiscal year are expected to be evenly distributed each quarter. For Revolus, as we look at Q2, we expect sales to be down year over year but to improve sequentially. And we see continued sequential improvement throughout the remainder of. We further expect EBITDA margin to improve sequentially through the remainder of the fiscal year 2025. Thank you, everyone. Operator, please open the line for questions.

Speaker Change: We further expect EBITDA margin to improve sequentially through the remainder of the fiscal year 2025.

Speaker Change: Thank you everyone. Operator, please open the line for questions.

Speaker Change: Thank you. As a reminder, if you'd like to ask a question, you can press star 521 on your telephone keypad.

Speaker Change: Our first question for today comes from Anna Glaessgen from Be Riley. The line is now open, please go ahead.

Unknown Speaker: I guess to start off, you know, you've reaffirmed the

Anna Glayston: Hey, good morning. Thanks for taking my question.

Anna Glayston: I guess to start off, you know, you've reaffirmed the stand-alone RevList.

Speaker Change: EBIDTA guidance to double this year. Taking into account kind of the one huge shortfall, I understand that there's timing issues associated with that. And you were helpful on the call, but could you just give us a little bit more help in bridging, you know, getting there through the year?

Speaker Change: to that, for reaffirming that doubling. Thanks.

Unknown Speaker: There are probably two prongs that I look at as we look at the bridge. First is going to be the gearing up, the savings have started coming through, the $5 million that we mentioned. We do see the path to $25 million to $30 million, which would imply it has to continue to increase through the rest of the year, which we're seeing as the activities are happening throughout the year and are staged to be able to get to that number.

Speaker Change: Yeah, I appreciate the question, Ann.

Speaker Change: There's probably two prongs that I look at as we look at the bridge. First is going to be the gear up, the savings have started coming through, the five million that we mentioned. We do see the path to the 25 to 30, which would imply it has to continue to increase through the rest of the year, which we're seeing as the activities are happening.

Unknown Speaker: And on the revenue side, we have explained and given a little bit more color on how we look at the difference from last year to this year and why we're confident as we head into the future. We talked about the $13 million that is going to ship out that we didn't see go out this past quarter for a variety of reasons. The divestitures from a year-over-year standpoint are a chunk of that as well. We talked about the $30 million in total for the year, so that was clearly in Q1. It's a pretty even split between the quarters for that reason.

Speaker Change: throughout the year and are staged to be able to get to that number.

Speaker Change: And on the revenue side, we have explained and give a little bit more color on how we look at the difference from last year to this year and why we're confident as we head into the spring.

Speaker Change: future. We talked about

Anna Glayston: The $13 million that did is going to ship out.

Anna Glayston: that we didn't see go out this past quarter for a variety of reasons.

Anna Glayston: The divestitures from a year-over-year standpoint is a chunk of that as well. We talked about the $30 million of total for the year, so that was clearly in Q1.

Unknown Speaker: And then there were some one-time items that we mentioned. So between the royalties that we had mentioned on the call, the pre-orders that we had mentioned on the call, and some new products in the prior year, that accounts for about $20 million of the difference year-over-year. So we're down on what I call a normal run rate type basis, not as significantly as it would imply. And we see that as we look forward, we didn't have those in the future quarters last year.

Anna Glayston: It's a pretty even split between the quarters for that.

Anna Glayston: And then there were some one-time items that we mentioned.

Anna Glayston: So, between the royalties that we had mentioned on the call, the pre-orders that we had mentioned on the call, and some new products in the prior year, that accounts for about $20 million of the difference year over year.

Speaker Change: We're down on what I call normal run rate type A. It's not as significantly as it would imply, and we see that...

Unknown Speaker: Plus, the new products that we're introducing, the partnership we just announced with Giacchetti, and the activities that we're looking to in the future are going to be able to amplify our EBITDA because sales are going to be stronger than they were in this quarter as we see sequential improvement each quarter.

Anna Glayston: Plus the new products that we're introducing, the partnership we just announced with Guy Fieri and the activities that we're looking to in the future are going to be able to amplify our EBITDA because the sales are going to be stronger than they were in this quarter as we see sequential improvement each quarter going forward.

Andy Keegan: Got it. Thanks. And then, taking a little closer look at gross margin, would it be safe to assume that we should start to see that inflect based on the color you've provided and the fiscal year?

Speaker Change: Got it. Thanks. And then taking a little closer look at gross margin, would it be safe to assume that we should start to see that inflect based on the color you've provided in the fiscal third quarter?

Unknown Speaker: You'll start with it, Andy. Yeah, for a standalone, you'll start to see it actually improve even in the second quarter. As sales start to improve, we do have pretty good flow through on our gross margin compared to what we call the old COGS, so kind of the fixed COGS structure of the COGS sales line. That will start to, as we mentioned, we will see sequential improvement each quarter in our revenue numbers, which will help drive the margin up.

Andy: Unknown AttendeeYou'll start with Andy.

Andy: Yeah, for a stand-alone, you'll start to see it actually improve even in second quarter. As the sales start to improve, we do have pretty good flow-through on our growth margin compared to what we call old COGS, so kind of the fixed cost structure of the cost of sales line.

Unknown Speaker: Alongside that, we're implementing the gear up program, which does have some impact on our COGS sales as distribution for us goes through our COGS line. So you will see that also helping to benefit the margin line as those activities continue through the rest of the year.

Anna Glayston: That will start to, as we mentioned, we will see sequential improvement each quarter in our revenue numbers, which will help drive the margin up. Alongside that, we're implementing the Gear Up program, which does have some.

Anna Glayston: Some impact on our cotton sales as distribution for us goes through our COGS line, so you will see that also helping to benefit the margin line as those activities continue through the rest of this year.

Unknown Speaker: And just one more, you know. I think it's encouraging to hear that you're seeing market share gains in some categories and that was a good response to new product introductions. It seems like the specialty channel is getting a little bit better, but, you know, there are still some inventory overages. Can you speak to their capacity to take on or allocate space to some of these new product introductions? And that's still been a hurdle in terms of your ability to go to market.

Speaker Change: And just one more, you know, I think it's encouraging to hear that you're seeing market share gains in some categories, and that was a good response to new product introduction. It seems like the specialty channel is getting a little bit better.

Speaker Change: but there are still some inventory overages. Can you speak to their capacity to take on or allocate space to some of these new product introductions and if that's still been a hurdle in terms of their ability to go to market?

Unknown Speaker: Sure. Good morning, Anna.

Unknown Speaker: You know, on the market share front, we are encouraged by what we're seeing in terms of increases in share. You know, we've had, according to Circona, some good increases with bike helmets, with snow goggles, with bike hydration, and hard plastic bottles on the camelback side. All within our Outdoor Performance group, within Revelist, excuse me, our Adventure Sports group. Within Revelist Outdoor Performance, you know, we did highlight on the call some increases in market share. Again, according to Circona, on fishing sportswear, flat-top grills, and our waders, and we're proud of that.

Speaker Change: Sure, good morning Anna. You know, on the market share front, you know, we are encouraged by what we're seeing in terms of increases in share. You know, we've had, you know, according to Cercana, some good increases with bike helmets, with snow goggles, with bike hydration, and hard plastic bottles on the Camelback side.

Anna Glayston: All within our Outdoor Performance group, within our Adventure Sports group, within Revelist Outdoor Performance, we did highlight on the call some increases in market share, again, according to Serkana, on fishing sportswear, flat-top grills, and our waders.

Unknown Speaker: And certainly at Precision Sports, you know, we're seeing, according to Golf Data Tech, some good share increases in launch monitors. So across the board, we are seeing, regardless of market conditions, some improving shares. I think, you know, specific to your question about specialty, that is something that we continue to see as a longer-term turnaround. You know, it's a smaller portion of our business, but we do see that, you know, as we look at specialty, the bike market, for example, we're seeing some green shoots, but we see that as a kind of 12 to 18-month, you know, complete turnaround. And we think that by next spring, we are already starting to see some green shoots with regard to things like pre-orders.

Anna Glayston: and we're proud of that, and certainly at Precision Sports, you know, we're seeing, according to Golf Data Tech, some good share increases.

Anna Glayston: and Launch Monitors.

Anna Glayston: So, across the board, we are seeing, regardless of market conditions, some improving share.

Anna Glayston: I think, you know, specific to your question about specialty, you know, that is something that we continue to see as a longer term turnaround.

Anna Glayston: It's a smaller portion of our business, but we do see that, you know, as we look at specialty, the bike market, for example, we're seeing some green shoots, but we see that as a kind of 12 to 18 month.

Anna Glayston: You know, complete turnaround and we think that by next spring, you know, we are already starting to see some some green shoes with regards to things like pre-orders.

Unknown Speaker: Unknown Attendee, Eric Nyman, Unknown Attendee, Mark Smith, James Chartier, Rommel Dionisio, Jason Vanderbrink, Andrew Keegan, Tyler Lindwall, Vista Outdoor Inc.

Andy: Specialty is probably feeling across our base the most pressure still right now with a little bit of a longer-term outlook for improvement.

Unknown Speaker: Great, thanks. That was super helpful.

Speaker Change: Great, thanks. That was super helpful.

Operator: Thank you. Our next question comes from Matt Koranda from Roth Capital. Your line is now open, please go ahead.

Matt Koranda: Good morning. Just on the RevList side, I just wanted to hear a little bit more about why the delay in sales and the pushout into the second quarter. Can you just put a finer point on what the product shipment issues were, what happened? And then maybe just how much did the Bushnell launch delay and hurt revenue? Was that in addition to the $13 million that you guys called out in the release? And could you just be clear, I guess it sounds like that all benefits the second quarter. So, potentially, it just spills over.

Speaker Change: Good morning. Just on the RevList side, I just wanted to hear a little bit more about why the delay in sales and the push out into the second quarter. Can you just put a finer point on what the product shipment issues were, what happened?

Speaker Change: And then maybe just how much did the Bushnell launch delay and hurt revenue, was that in addition to the $13 million that you guys called out?

Speaker Change: in the release. And could you just be clear, I guess, it sounds like that all benefits the second quarter. So, so potentially it just spills in and, you know, we should see, I guess we're not seeing growth. Why aren't we seeing growth yet in the second quarter?

Unknown Speaker: Hey Matt, yeah, a good question. So on the delay, there are really two components, I would say, overall. One is the new product introduction. So we did have a product that we pride ourselves on the introduction of products that are quality products and are going to meet the consumer's needs. What we ran into was an issue that it wasn't going to do what we wanted it to do. So, on our Bushnell Golf platform, we had a product that, as we did our final quality inspections, as the products arrived, we noticed an issue with the software that we needed to correct.

Speaker Change: are going to meet the consumer's needs. What we ran into was an issue that it wasn't going to do what we wanted it to do. So in our Bushnell Golf platform, we had a product that, as we did our final quality inspections as the product arrived, we noticed an issue with software that we needed to correct.

Unknown Speaker: That required a delay. We, instead of launching the product into the market and then subsequently being able to fix it, chose to launch the product a little bit later. It is now being processed so that it is out there in the market. It is coming through.

Unknown Speaker: We expect that to deliver sales. Could some of those go into Q3? We'll see exactly when the timing of all those come back in, but we do expect to recoup them through the full year.

Speaker Change: Out there in the market, it is coming through.

Unknown Speaker: The other piece of it was more order processing and getting them through the warehouses. This was a process that, as we got to the end of the quarter, there were credit reviews, whether it was order entry, price deviation type activities, getting them into the warehouse, and being able to ship them out. There was some noise in our system as we moved to the platforms that we're moving to. People were shifting, and that caused a little bit of delay.

Unknown Speaker: Now, what I would say to that is Joe Beck has joined our team as the chief supply chain officer and has already addressed these issues. We had a full work out of the issues right after they occurred, and we have the fixes in place already so that as we ended the month of July, everything went out and actually went out better than we had expected. So, I think that the team has smoothly been able to transition through those issues.

Speaker Change: getting them into the warehouse, being able to ship them out. There was some noise in our system as we moved to the platforms that we're moving to. People are shifting and that caused a little bit of delay. Now what I would say to that is...

Joe Beck: Joe Beck has joined our team as the chief supply chain officer and has already addressed these issues. We had a full work out of the issues right after they occurred. And we have the fixes in place already that as we ended the month of July , everything went out and actually went out better than we had expected. So I think that.

Unknown Speaker: So, we do see that as an improvement to your question on growing for Q2. I mean, we're still down a little bit, but we're going to be much better than we were in Q1 from the percentage. Unknown Attendee, Matthew Koranda, Mark Smith, James Chartier, Rommel Dionisio, Jason Vanderbrink, Andrew Keegan, Tyler Lindwall, Vista Outdoor Inc.

Speaker Change: The team has smoothly been able to transition through those issues, so we do see that as...

Speaker Change: as improvement.

Speaker Change: Deke degrees which closing that gap that we're talking about we are

Speaker Change: The new products that we're launching through the rest of the year aren't all hitting in Q2. Those are going to come through over the next few quarters. So I wouldn't expect, we didn't expect even with the flow through of the 13 that you're going to see a larger growth quarter. You'll start seeing that as we head through the remainder of the year.

Matt Koranda: Okay, that's helpful. And then on the EBITDA progression for Revolist, maybe I'll take a crack at it this way. 5 million in realized savings in the first quarter; I think that implies probably another 20 to 25 this year from gearing up. But I guess if I just baseline off of the segment EBITDA from last year, which was just under 100 million, and we add the 25 to 30. We're still short of the 145. What else are we relying on to get there? So maybe just address that and then talk about the cadence of realization of gearing up for the rest of the year.

Speaker Change: Okay, all right, that's helpful. And then just on the EBITDA progression for Revalist, maybe I'll take a crack at it this way, $5 million in realized savings in the first quarter, I think that implies

Speaker Change: And we add the 25 to 30. We're still short of the 145. What else are we relying on to get there? So maybe just address that and then talk about the cadence of realization of gear up for the rest of the year.

Unknown Speaker: Sure, Matt, good morning. Why don't Andy and I tag team that one a little bit? I think, you know, with regard to our commentary on, you know, the 25 to 30 million in run rate cost savings for 25 and then the 100 million through fiscal year 27, we have made some great progress. And I think, you know, we'll give you a little, why don't we give you a little bit more color on where that's coming from on the operating model side.

Speaker Change: Sure. Matt, good morning. Why don't Andy and I tag-team that one a little bit?

Speaker Change: I think, you know, with regards to our commentary on, you know, the $25 to $30 million in run rate cost savings for 2025 and then the...

Unknown Speaker: The team's done an excellent job already thus far, putting in place our new operational strategy, with really an eye on refining our structure to move the move to platforms that we've talked about several times. And we've trimmed over 20 million dollars in annual operating costs already, along with bringing in new capabilities. So we feel like we've done a really good job in the early days on that part, and that gives us a lot more confidence for the balance of the year with regard to the EBITDA savings. As Andy mentioned, you know, we did have some hiccups in Q1 on the supply chain. We take full accountability for that.

Speaker Change: The team's done an excellent job already thus far putting in into into place our new operational strategy With really an eye on refining our structure to move the move to platforms that we've talked about several times And we've trimmed over 20 million dollars ahead count costs already

Speaker Change: As Andy mentioned, you know, we did have some

Unknown Speaker: We're going to get better. And we brought in a new head of supply chain, Joe Beck, to do that. He's in that evaluative phase now.

Speaker Change: Some hiccups in Q1 on supply chain. We take full accountability for that. We're going to get better, and we brought in a new head of supply chain, Joe Beck, to do that. He's in that evaluative phase now, but we are targeting $5 million this year on the way to

Unknown Speaker: But we are targeting 5 million dollars this year on the way to 10 to 15 million dollars over the next 3 years through our distribution network and our warehouse strategy. You know, we've talked about that, and so so far this year, we've already consolidated our domestic warehouses and are targeting to consolidate our domestic warehouses by over 40 percent. Going forward, we'll probably consolidate our domestic warehouses over the three-year period by over 80%.

Speaker Change: $10 to $15 million over the three years through our distribution network and our warehouse strategy, you know, we've talked about that. And, you know, so, so far this year, we've already consolidated our domestic warehouses are targeting to consolidate our domestic warehouses by over 40%.

Unknown Speaker: So again, that gives us a lot more confidence in terms of savings on the supply chain side while we improve performance. And that's going to be something that's very important for us. We also see some good EBITDA flow-through happening, and we have good targets on indirect costs. On our real estate footprint, we're reducing our USA real estate footprint this year alone by over 30%.

Speaker Change: So, again, that gives us a lot more confidence in terms of savings on the supply chain side.

Speaker Change: While we improve performance.

Speaker Change: And that's going to be something that's very important for us.

Speaker Change: On our real estate footprint, we're reducing our USA real estate footprint this year alone by over 30%.

Unknown Speaker: And that'll give us some EBITDA flow-through. So I think you'll start to see that EBITDA goal continuing to come sharper into focus now that we're through Q1, and we can start seeing that flow-through in the P&L. And we're targeting sequential improvement. I don't know, Andy, if you have any more to add on that element. The only thing, Matt, to your question on closing the gap for the rest of the school year.

Speaker Change: You know that EBITDA goal, continuing to come sharper into focus, now that we're through Q1 and we can start seeing that flow through in the P&L, and you know, we're targeting sequential improvement. I think, you know, I don't know Andy if you have any more to add on, on that element.

Andy: That's the only thing, Matt, to your question on closing the gap for the rest of the, we'll call it 20 years.

Unknown Speaker: $63 million in contributions. There are three primary drivers. The first is we have talked about the other restructuring program that we had done, which was the April 2023 restructuring program, which will contribute through this year about 10 million or so of additional savings for the overall Redwood business. We are seeing improvements in our freight freight costs for our company as we head through this year are improving compared to the prior years. Unknown Attendee.

Speaker Change: [inaudible]

Andy: of contribution. There's three primary drivers I'd point you. The first is, we have talked about the other restructuring program that we had done, which was the April 2023 restructuring program, which will contribute through this year about 10 million or so of additional savings for the overall RevWorks business.

Andy: We are seeing improvements in our freight, so freight costs for our company as we head through this year is improving compared to the prior years as we are seeing the reduction in our

Unknown Speaker: Thank you. Thank you. Next slide. Next slide. Next slide. Next slide.

Andy: [inaudible]

Unknown Speaker: So, as you recall in the third quarter, last year we were very promotional and intentionally promotional, trying to drive our inventory and our retailers' inventory down, and that has looked successful. This year we don't expect to be as promotional, still promotional, during the holiday season. But the actual promotions themselves will be less than last year. So those three are the primary drivers for the additional $20,000.

Speaker Change: And then lastly is promotions. We were in the third quarter, you may recall, last year. We were very promotional and intentionally promotional, trying to drive our inventory and our retailers' inventory.

Speaker Change: down and that it was successful. This year we don't expect to be as promotional, still promotional, the holiday season, but the the actual promotions themselves will be less than last year. So those three are the primary drivers for the additional 20-ish million of EBITDA contributions.

Matt Koranda: Okay, that makes sense. And then maybe just one last one from me, that the free cash flow looks solid in the first quarter and, seasonally, I think maybe a little bit ahead of where you guys expected it to be. You reiterated the free cash flow guide, just looking for a little help on the seasonality of free cash flow for the remainder of the year. Should we expect it to be pretty normal in terms of the year?

Speaker Change: Okay, that makes sense. And then maybe just last one for me, the cash flow looks solid in the first quarter and seasonally, I think, maybe a little bit ahead of

Speaker Change: Where you guys expected to be. You reiterated the free cash flow guide, just looking for a little help on seasonality of free cash flow for the remainder of the year.

Matt Koranda: Is there more opportunity in terms of inventory flush? You guys did call out a lot of inventory flush from where I was, so just looking for a little bit more around how to think about seasonality of free cash flow for the remainder of the fiscal year.

Speaker Change: Should we expect it to be pretty normal in terms of the year? Is there more opportunity in terms of inventory flush? You guys did call out a lot of inventory flush from Revalist, so just looking for a little bit more around how to think about the seasonality of pre-cash flow for the remainder of the fiscal year.

Unknown Speaker: Yeah, good question. I mean, we're very happy with how Cache came through in Q1. We had a very successful Reduction on both sides of the business, keep it up being strong and kinetic and be able to drive. As we look at the year, I'd expect Q2 to probably be the lightest of the quarters. We do see some inventory build as we go into the last season, the holiday season, you'll see inventory go up slightly, so I wouldn't expect as much of a drive through on that.

Unknown Speaker: They are trying to get our businesses to be able to sell through some products and have products on hand as they head into that season. So you'll see that quarter probably be the lightest, and then the back two are pretty.

Speaker Change: as we're trying to get our businesses to be able to sell through some products and have products on hand as they head into that season. So you'll see that quarter probably be the lightest. And then the back two are pretty similar.

Unknown Speaker: Got it. I'll take the rest of mine offline. Thanks, guys.

Speaker Change: Got it. I'll take the rest of mine offline. Thanks, guys.

Operator: Thank you. Our next question comes from Mark Smith of Lake Street Capital Markets. The line is now open. Please go ahead.

Speaker Change: Thank you. Our next question comes from Mark Smith of Lake Street Capital Markets. The line is now open. Please go ahead.

Mark Smith: Hey guys, I had just a couple questions on Kinetic first. Gross profit margin looked a little better than expected, but it looks like the guidance implies that coming down through the rest of the year. Can you just talk about some of the cost pressures and kind of your outlook on gross profit margin within Kinetic Group?

Speaker Change: Guidance implies that coming down through the rest of the year. Can you just talk about some of the cost pressures and kind of your outlook on gross profit margin within Kinetic Group?

Unknown Speaker: Yeah, Mark, good morning. So for the first quarter, obviously, we had a good gross margin and gross profit quarter, mainly due to and. So we did put a price increase on one category in the quarter, which obviously helped out. And for the remaining back half, we expect commodities to continue to be elevated. Along with that is powder, which is going to be, you know, year over year increases that are pretty substantial. So it'd be those categories are the biggest drivers for it.

Unknown Speaker: Okay. And then just similarly on Kinetic, Jason, if you want to talk about kind of channel inventory, what you're seeing in the industry out there, as well as pricing and availability, if needed, with commodity price increases to take additional prices, maybe later this year.

Speaker Change: And then just similarly on Kinetic, just

Speaker Change: Yeah, I don't think we're going to be able to push price into the market, Mark. I think we're going to, I think, you know, there's always a balancing act of consumption that you got to weigh into that versus commodity costs. So I don't think the market is favorable right now for price.

Speaker Change: Having said that, I think our history shows we're the first one to take price and the last one to discount it, and if we think that there's a way to push price increase in it, we will certainly try, but at the same time, we need to keep our factories open.

Speaker Change: channel inventory is good. I think you know if you look at centerfire rifle for instance, you see core locked out there that hasn't been out there in five or six years. Calibers, so the consumer has a lot better choices for calibers and we're not going to have to worry about that.

Unknown Speaker: that he or she hasn't been able to purchase. So, you know, our customers need to get some sales data on that. So the replenishment systems can pick up the sales because they haven't been there in many, many years. So I think it's going to be our inventory is as good as it's been in five or six years for replenishment orders. And now, you know, I think our customers are sitting well, and we're not really seeing anything that is what we would say overstocked in the channel. We're in good shape, and so are our customers.

Unknown Speaker: Unknown Speaker And then for both Kinetic and Revelus, I think both at some point in press releases or presentations called out kind of government sales. Curious, just kind of the outlook, you know, what you're seeing in budgets, you know, and any opportunities coming forward, maybe to pick up any additional contract business, or anything that maybe is coming off that you have to fight for to continue to keep in government business.

Speaker Change: Okay.

Speaker Change: And then for both Kinetic and Revelest, I think both at some point in press releases or presentation called out kind of government sales.

Speaker Change: Curious, just kind of the outlook, you know, what you're seeing in budgets.

Speaker Change: You know, and any opportunities coming forward, maybe to pick up any additional contract business or anything that maybe is coming off that you have to fight for to continue to keep in government businesses, again, on both Kinetic and Revelest.

Jason Vanderbrink: Yeah, for Kinetic, Mark, there are some big contracts coming. And, again, I think our history shows, you know, if you look at what we released on the SOCOM win, for instance, that's a big win for us. That's a pick-up from a competitor.

Speaker Change: Yeah, for Kinetic, Mark, there's some big contracts coming.

Speaker Change: You know, if you look at what we released on the SOCOM win, for instance, that's a big win for us. That's a pickup from our competitor. But again, I want to reiterate, we'll go chase the contracts.

Jason Vanderbrink: But again, I want to reiterate, we'll chase the contract. If it's profitable, we're not going to go out on a limb and chase a contract that we don't view as profitable long term. And that's first and foremost, you know. Generally, we will go for contracts that are performance ammunition, where we can take a little more risk, margins are a little better, and we love what we see in that business right now. There are opportunities coming. And at the same time, I think our history shows if we win contracts, we deliver, and government is the winner as well.

Speaker Change: If it's profitable, we're not going to go out on a limb and chase a contract that we don't view as profitable long-term, and that's first and foremost.

Speaker Change: Generally, we will go for contracts that are performance ammunition, where we can take a little more risk, margins are a little better.

Speaker Change: We love what we see in that business right now. There's opportunities coming, and at the same time, I think our history shows if we go win contracts, we deliver, and the government is the winner as well.

Unknown Speaker: Yeah, I'll just add to that, you know, on the RevList side, we're really proud of what the team's doing. We continue to believe it's a great opportunity for RevList and, overall, for Vista to take the best technology being created for the outdoors and apply that to the opportunity to serve our military, our first responders, and our law enforcement. And we have a great team in Virginia Beach that's working hard on that every day.

Speaker Change: Yeah, I'll just add to that, you know, on the Revo side, we're really proud of what the team's doing. You know, we continue to believe it's a great opportunity for

Speaker Change: You know, Revelist and overall for Vista.

Speaker Change: to take the best technology being created for the outdoors.

Speaker Change: and apply that to the opportunity to serve our military, our first responders, and our law enforcement.

Unknown Speaker: We did have some good wins, you know, particularly within Eagle, our PAC business, and our Blackhawk business. And we're going to continue to search for opportunities there. And we believe that over the three-year period, that's going to be an area of growth for RevList.

Speaker Change: You know, we have a great team in Virginia Beach that's working hard on that every day. We did have some good wins, you know, particularly within Eagle, our pack business, and our Blackhawk business. And we're going to continue to search for opportunity there. We believe that over the three-year period, that's going to be an area of growth for Revelus.

Eric Nyman: Perfect. And last one for me, just Eric, you guys talked a little bit about mixing within the channel for Revelest and kind of some impact that that had. I'm curious, just as we look at price, kind of ASP, you know, maybe primarily in adventure sports, but we'd love to hear it across the board, kind of any mix shift or you see consumers pull back, maybe look at lower priced helmets or anything else that you're seeing. Just want kind of to hear your view on how consumers are doing today. Sure. You know, we've been very conservative with regard to

Speaker Change: Perfect. And last one from me, just Eric.

Speaker Change: you know maybe primarily in adventure sports but we'd love to hear it across the board kind of any mixed shift or you see consumers pull back uh maybe look at lower priced helmets or or anything else that you're seeing just just want kind of to hear your view on how the consumer is doing today.

Eric Nyman: Sure. You know, we've been very conservative with regards to the consumer outlook. You know, we called for the year, you know, a range that's essentially flat, you know. Unknown Attendee, Peter Lignan, Michael Ch??ng, Vanderbink, Eric Nyman, William Reuter, Matthew Koranda, Mark Smith, James Chartier, Rommel Dionisio, Jason Vanderbrink, Eric Nyman, Unknown Attendee, Anna Glaessgen, Andrew Keegan, Tyler Lindwall, Vista Outdoor Inc. You know, I think across the businesses, with regards to, I'll start with, you know, our RevLoist Precision Sports, that's typically a direct business, you know, if you think about what we do every day at Foresight Sports, and we're seeing continued strong response, both on our, I'll call it our hardware, you know, our launch monitors and things of that nature, but also, like I mentioned in the call, our software solutions.

Speaker Change: You know, I think across the businesses, with regards to, I'll start with, you know, our RevList Precision Sports, that's typically a direct business, you know, if you think about what we do every day at Foresight Sports.

Eric Nyman: And that's an area that we're going to continue to lean into with regard to digital gaming, and I think you'll see a continued strong response. You know, I think that's going to continue to be our best area of growth, both short term and medium term. And we're really leaning into that as a team. And I'm proud of the work that the team continues to do. And there are going to be some more exciting announcements over the next several months.

Speaker Change: And that's an area that we're going to continue to lean into with regard to digital gaming.

Speaker Change: And I think you'll see continued strong response, you know, I think that's going to continue to be our best area of growth, you know, both short term and medium term. And we're really leaning into that as a team. And I'm proud of the work that the team continues to do. And there's going to be some more exciting announcements over the next several months.

Eric Nyman: With regard to adventure sports, you know, specifically on the bike, I think you asked about, again, you know, we're seeing a little bit of mix shift. I think overall, when you look at the channel performance, we're seeing some better performance across, I'll call it mass and D to C, including Amazon, and we're seeing a little bit more continued pressure, like I talked about in the first question, that specialty. We do see You know, I think 12 to 18 months from now, we are seeing some pre-order action that we're feeling a little bit more optimistic about, but I'd say that is a little bit more mix shift, you know, specifically to your question. Perfect. Thank you, guys.

Speaker Change: with regards to adventure sports, you know, specifically on bike, I think you asked about.

Speaker Change: We do see some green shoots at specialty over the longer term, you know, I think 12 to 18 months we are seeing some pre-order action that we're feeling a little bit more optimistic about, but I'd say that is a little bit more mixed shifts, you know, specifically to your question.

Operator: Our next question comes from Jim Chartier of Monash Crespi Heart. Your lines are open, please go ahead.

Speaker Change: Thank you. Our next question comes from Jim Chartier of Monash Crespi Heart. Your lines are now open, please go ahead.

Jim Chartier: Good morning. Thanks for taking my questions.

Jim Chartier: You said a number of times for RevList you're confident in doubling standalone EBITDA this year. Can you get there at the low end of your revenue guidance?

Jim Chartier: I mean, our revenue and our EBITDA guidance kind of go hand in hand, so there'd be a little bit of pressure on being able to exactly double EBITDA at the bottom end of the range, but we'd be very close to that. I think if we are, if we're seeing

Speaker Change: I mean, our revenue and our EBITDA guidance kind of go hand in hand, so there'd be a little bit of pressure on being able to exactly double EBITDA at the bottom end of the range. But we'd be very close at that. I think if we are, if we're seeing revenue at that point in time,

Speaker Change: We are looking at additional things on the gear up and potential for savings on that side, so we could still accomplish it. It would just feel a little bit more of a challenge to be able to get there.

Speaker Change: Okay, makes sense. And then for both businesses, can you give me a sense of what PLS looked like during the quarter?

Unknown Speaker: Jim, good morning. For our first quarter, POS was down some. I mean, it certainly goes different by categories. You can imagine ammunition. We see hunting rifle and shot shell are still really good, and pistol is hanging in there.

Speaker Change: Jim, good morning. For our first quarter, POS was down some. I mean, certainly goes different by category. As you can imagine, ammunition, you know, we see hunting rifle and shot shell still really good. And pistol is...

Speaker Change: Hanging in there, there's some categories that we're seeing down. So I think all in all, it's flattish to down a little bit.

Unknown Speaker: Yep, and on the Revo side, Jim, I would say it's pretty much in line with, you know, a lot of the shipments. We had some pressure in the first quarter on POS, and we expect it to start improving sequentially going forward.

Unknown Speaker: There are some categories that we're seeing down. So I think all in all, it's flattish to down a little bit. Yeah, and on the Revo side, Jim, I would say it's pretty much in line with

Speaker Change: Yep, and on the Revela side, Jim, I would say it's pretty much in line with, you know, a lot of the shipments. We had some pressure in the first quarter on POS and we expect it to start, you know, improving sequentially going forward.

Jim Chartier: Great. Thanks. The best of luck.

Operator: Thank you. At this time, we currently have no further questions for today. Therefore, that concludes today's conference call. Thank you all for joining us. You may now disconnect your lines.

Speaker Change: Thank you. At this time we currently have no further questions for today. Therefore that concludes today's conference call. Thank you all for joining. You may now disconnect your lines.

Speaker Change: [inaudible]