2020 Annual Report

Annual Report FY2020 vistaoutdoor.com Annual Report FY2020 vistaoutdoor.com Vision To be the world’s most talented and impactful outdoor recreation company by setting the standard and making a positive difference in people’s lives, through innovative products, operational excellence and advocacy. Strategic Framework How we improve our businesses and strengthen our financial position: + Optimize Our Organizational Structure + Create Leading Centers of Excellence in Operations and E-Commerce + Reduce Financial Leverage + Return to Organic Growth + Explore Tuck-in Acquisitions Impact ESG pillars reflecting framework and core values: + People + Conservation + Veterans + Community From the Chairman of the Board and Chief Executive Officer To Our Fellow Shareholders, FY2020 was an outstanding year for Vista Outdoor, and perhaps the most significant since the Company was founded in 2015. I hope you see as we reflect on our FY2020 key FY2020 HIGHLIGHTS accomplishments, Vista Outdoor has diligently addressed Our enterprise wide FY2020 priorities for the its most pressing issues in a strategic manner with past year included: determination and has successfully strengthened its + Improve our capacity to innovate and grow— foundation to enable long term sustainable and profitable create innovative new products that drive brand growth for the creation of value for our stakeholders. loyalty and expand our market share; I am proud of our team and their ability to operate + Improve the underlying profitability of our brands— effectively during the unprecedented challenges that control costs to drive efficiency and improve margins; faced our brands in the fourth quarter due to COVID-19. The result was greater than expected financial and + Invest in platforms for growth—expand our operational performance. e-commerce and direct to consumer capabilities; and The financial and operational foundation we have built + Strengthen the balance sheet—reduce financial allows us to do more for the environment, our community, leverage to improve financial flexibility and and other causes. We recently have published our first free up capital to invest in growth. annual Environment, Social and Governance Report. In this We made significant progress on these priorities, framed report, we outline our Vista 2030 Vision in which we commit through our major FY2020 achievements: to becoming more efficient, diverse and the most talented and impactful company in the outdoor recreation industry. + Reported $45 million of EBIT in fiscal year 2020, a nearly 41% improvement over fiscal year 2019, THE GREAT OUTDOORS AND COVID-19: excluding results from divested businesses. WHERE VISION MEETS NEED A 70% year over year improvement to earnings Our goal is to be the most impactful outdoor sports per share, reflecting cost savings initiatives and company and our corporate social responsibility our focus on margin improvement. program emphasizes action to help bring this vision to + Improved gross margins by more than 60 basis points life. The COVID-19 pandemic has led to a resurgence in from FY19, the direct result of our focus on driving interest in outdoor activities. We believe that resurgence efficiencies and long-term profitability improvements. provides an opportunity for our Company to further + Successfully completed the divestiture of the connect our values with our product offerings. Firearms business. The COVID-19 pandemic has led to a rapid increase in + Improved working capital which contributed to demand for our bike helmets, camp grills, drinkware, golf better-than-expected free cash flow of $66 million, accessories, shooting ammunition and more. But our excluding results from divested businesses. response to the pandemic has not been limited to meeting that demand. As stay at home orders were instituted, we + Ended the fiscal year with a leverage ratio of took swift action to ensure that we continued to further our approximately 4.3x, the lowest since early FY18. mission to bring the world outside and that our partners in + Delivered improved results in the face of major that mission have the resources they needed to survive in a challenges and headwinds, including a major challenging environment. We have expanded partnerships retailer exiting key categories, tariffs, and with nonprofits and advocacy groups whose mission COVID-19 related disruptions. aligns with our own. For example, we have expanded our commitment to Big City Mountaineers, which provides Our employees are at the very center of these under-resourced youth with opportunities to get out of accomplishments. On behalf of the Board, we would their comfort zones and into the wild, and the Outdoor like to to extend a heartfelt thank you to all of our Foundation, which connects kids and families with employees for their hard work, collaboration, and people and programs to inspire them to get outside. passion for our mission of Bringing the World Outside. From the Chairman of the Board and Chief Executive Officer INNOVATION AS THE FOUNDATION OF GROWTH FY2021 TRAJECTORY To Our Fellow Shareholders, FY2020 was Innovation is the lifeblood of our business, and our In FY2020, we improved our financial position. We meaningfully success in expanding profitability has allowed us to improved our operating fundamentals and have platforms an outstanding year for Vista Outdoor, invest in new products that will drive our success in in place that we believe will continue to generate long term FY2021 and beyond. In the past fiscal year, both our growth opportunities. We have strengthened our businesses. and perhaps the most significant since shooting sports and outdoor products teams successfully We have a strong, committed team of thought leaders launched an aggressive schedule of new products that throughout the Company that navigated unprecedented the Company was founded in 2015. are a testament to our commitment to innovation. COVID-19 pandemic disruptions and headwinds, and delivered better than expected financial and operational results. In our Shooting Sports segment, our ammunition team launched more new products in FY2020 than in the Looking ahead, we are relentlessly focused on the following five company’s history. Highlights include Federal’s Terminal strategic pillars, which drive our priorities and decision making: Ascent, the flagship hunting bullet that blends match + Optimize Our Organizational Structure Invest in talent accuracy with outstanding on-game performance, while reducing costs and building a culture of agility, HammerDown which is a new line of ammunition designed efficiency, and innovation. for lever guns, and FireStick which is the most innovative + Create Leading Centers of Excellence in Operations product introduced for the muzzleloader in decades. and E-Commerce Leverage our shared resources, Our ammunition team also capitalized on influencer expertise and scale to: partnerships to reach new audiences and launched a new - Achieve operational excellence and improve margins line of MeatEater packaging and ammunition, featuring across each of our brands; and exclusive recipes reflecting a renewed focus on sustainable - Accelerate and enhance e-commerce, direct-to-consumer hunting, conservation and the celebration of wild foods. and digital marketing capabilities across all of our brands. At Bushnell, we introduced the new Nitro 1800 laser + Reduce Financial Leverage Strengthen the Company’s rangefinder launched with built-in Bluetooth integration to balance sheet, improve financial flexibility, and pay down our Bushnell Ballistic App. Long range shooters rely on this debt through enhanced cash-flow generation and the simple, digital solution for more accurate shot placements. divestiture of non-core businesses. + Return to Organic Growth Identify and capture opportunities In our Outdoor Products segment, we are excited about for organic growth and market share expansion by: the introduction of the Bushnell Golf’s new Wingman GPS speaker, a first to market product combining practical, on the - Allocating capital to our brands to aid in the development course features, with a high-quality sound system rivaling of new and innovative products that serve the needs and top names in the speaker market. The tour V5 rangefinder preferences of our core consumers; and remains the industry standard and market share leader. - Leveraging and expanding our distribution channels to expand the commercial presence of all of our brands and Camelbak recently entered the vacuum stainless-steel efficiently deliver product to meet consumer demand and drinkware market with the launch of its Horizon Drinkware shopping behavior. Collection, which is uniquely positioned to serve the + Explore Tuck-in Acquisitions After reducing financial growing active outdoor lifestyle consumer category. leverage, deploy a stronger balance sheet to acquire Giro’s new Manifest Spherical is without question the smaller, complimentary businesses that, through the help of most advanced mountain bike helmet available. Utilizing our Centers of Excellence, we can take to the next level in Giro/Bell’s proprietary Spherical Technology, powered terms of sales and profitability. by MIPS®, this helmet uses a ball-and-socket design to The outdoors has always been a source of retreat, recovery and redirect impact forces in a crash. It’s been recognized recreation for our employees and consumers, and recent events by nearly 50 media outlets worldwide and received an have made our outdoor mission more important than ever. The Editor’s Choice

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