Vista Outdoor

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Remington Outdoor Company Bankruptcy Update

September 28, 2020 by 3 Comments

What Cerberus put together to eventually form Remington Outdoor Company aka Freedom Group, the US Bankruptcy Court for Northern Alabama is taking apart. A court filing today has the results of the auction for the various components of the company. It was first reported by Dan Zimmerman at TTAG.

Earlier in September, I reported that JJE Capital was the stalking horse bidder for Remington’s ammunition business. That was to set the floor. The final bids were released today. These will be subject to approval of the court in a hearing to be held on Tuesday, September 29th.

From the Notice filed with the Bankruptcy Court today:

• Vista Outdoor, Inc. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit A with respect to the Lonoke Ammunitions Business and certain IP assets; and SIG Sauer, Inc. as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit B with respect to the Lonoke Ammunitions Business;
• Roundhill Group, LLC as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit C with respect to the non-Marlin Firearms Business; and Huntsman Holdings, LLC and Century Arms, Inc. as the Backup Bidders thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit D with respect to certain Firearms Business IP assets and Exhibit E with respect to certain non-Marlin Firearms Business inventory, respectively;
• Sierra Bullets, L.L.C. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit F with respect to the Barnes Ammunitions Business; and Barnes Acquisition LLC as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit G with respect to the Barnes Ammunitions Business;
• Sturm, Ruger & Company, Inc. as the Successful Bidder pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit H with respect to the Marlin Firearms Business; and Long Range Acquisition LLC as the Backup Bidder thereto pursuant to the terms of the Asset Purchase Agreement attached hereto as Exhibit I with respect to the Marlin Firearms Business;
• JJE Capital Holdings, LLC as the Successful Bidder with respect to the DPMS, H&R, Stormlake, AAC, and Parker brands;
• Franklin Armory Holdings, Inc., or its designated assignee, as the Successful Bidder with respect to the Bushmaster brand and certain related assets; and
• Sportsman’s Warehouse, Inc. as the Successful Bidder with respect to the Tapco brand.

If these bids are approved, Vista Outdoor will become an even larger player in the civilian ammunition market with the addition of Remington’s ammunition factory in Arkansas.

The other big story is that Ruger will be adding the Marlin lever action lineup of rifles to its product line. It is unknown if they will keep the old name or market them under the Ruger name.

JJE Capital is the owner of Palmetto State Armory among other companies. DPMS will be a good fit for them as will H&R in the budget category. I’m not sure of their intention for Parker which makes the reproduction Parker shotguns nor what they plan to do with suppressor maker AAC or barrel maker Stormlake.

Franklin Armory getting Bushmaster will be a good fit for them. Likewise, Sierra Bullets adding Barnes Bullets to their lineup makes sense.

Roundhill Group, LLC is a property management group out of Virginia according to a story out of New York. I’m not sure if that is the correct Roundhill as there are a number of companies by that name with various spellings. Nonetheless, they will be getting the non-Marlin firearms business which would include Remington itself and presumably Dakota Arms. The story indicates a bit of unease in Ilion, NY where the Remington factory is the largest employer in Herkimer County. The backup bidder for this part of the assets includes Century Arms. I would hate to see what they would do with Remington.

Finally, Sportsman’s Warehouse is getting Tapco. I presume they intend for this to be used to provide accessories to be sold in their chain of stores.

The Wall Street Journal does bring up an interesting point in their report on the breakup of Remington into pieces. What happens now with the Connecticut lawsuit?

The Covid-19 pandemic and civil unrest have Americans stocking up on guns and ammunition, but Remington said it was short of funds, despite having erased hundreds of millions of dollars in debt in a 2018 bankruptcy.

The company is facing a lawsuit over its marketing of the Bushmaster rifle, which was used in the December 2012 killing of 20 children and six adult school staffers at Sandy Hook Elementary School in Newtown, Conn.

The 2020 bankruptcy halted a lawsuit brought by the families of some of the Sandy Hook victims, which had been preserved in the first pass through chapter 11.

Remington hasn’t said what its drive to throw its assets on the bankruptcy auction block would mean for the Sandy Hook lawsuit or for company retirees who crowded into a session with bankruptcy administrators, asking what would become of their benefits.

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Savage Arms Is An Independent Company Again

July 8, 2019 by 4 Comments

Savage Arms and their Stevens brand were bought in 2013 by ATK for $315 million in cash. After the split of ATK into ATK Orbital and Vista Outdoor, it became part of Vista Outdoor where it stayed until today. It was announced this evening that Vista Outdoor sold Savage Arms and Stevens to a management group led by CEO Al Kasper. The purchase price was $158 million now with another $12 million to be paid in five years. Vista Outdoor had planned to divest themselves of Savage and leave the firearms manufacturing industry. They will remain a significant ammo and accessory maker.

Savage Arms sent out the following by email:

“We want to thank Vista Outdoor for the support over the last six years. They invested in us and provided guidance in the transformation of the Savage brand, further developed our product portfolio allowing entry to new markets,,” said Al Kasper, Savage President and Chief Executive Officer. “Savage is an extremely strong brand and in a great position to keep charging forward. The momentum gained under Vista Outdoor will propel us for future success. It is business as usual and Savage is excited to continue building on existing relationships within the firearms industry.”

Savage, Stevens and Fox shotguns have been delivering innovative products for more than 125 years. In 1894, Savage forever changed the world of firearms with a commitment to a higher standard in quality. Savage has built a reputation for continuously improving firearm design while becoming the standard for accuracy and value in the industry.

“We are excited to build on the Savage legacy and are blasting into our next chapter. Here at Savage we are excited to show you what we have coming, because we are just getting our barrels warm! You’ll see more customizable platforms based on our incredibly versatile Accufit stock system, and a continued focus on making your firearm best fit your shooting and hunting needs.” said Beth Shimanski, Director of Marketing. “As we are transitioning, you’ll see more detailed information coming, with updated contacts and information.”

Headquarters of Savage Arms will be Westfield, Massachusetts which has been its home since their founding by Arthur Savage in 1894.

My Savage 99s and Savage Model 1921s are applauding this spinoff. They are also saying the new management group got a good deal given what ATK paid for the company during the Obama sales boom.

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Vista Outdoor Ditching Guns In “Strategic Business Transformation Plan”

May 1, 2018 by 1 Comment

Vista Outdoor announced plans today to sell off its Savage and Stevens line of firearms along with stuff like bike helmets and paddle boards. According to the announcement on their website, they are engaging in a strategic business transformation plan to emphasize products core to business. This will include their ammunition business which is their largest core business.

From their release, in part:

Vista Outdoor Inc. (NYSE: VSTO) today announced its strategic business transformation plan, designed to allow the company to focus resources on pursuing growth in its core product categories. The plan is a result of a comprehensive strategic review, which began in November 2017.


“Our review identified product categories that are core to the company’s long-term business strategy,” said Vista Outdoor Chief Executive Officer Chris Metz. “We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics, and drive shareholder value.”


In conducting the strategic review, Vista Outdoor management defined several criteria to evaluate whether individual product categories are part of the company’s core. Vista Outdoor evaluated brands within its current portfolio based on their ability to do the following:


  • Serve the company’s target consumer – the outdoor enthusiast
  • Create cross-selling and other similar synergy opportunities
  • Achieve market leading positions and leadership economics
  • Demonstrate omni-channel distribution capabilities



As a result of this evaluation, and with support from its board of directors, Vista Outdoor will focus on achieving growth through its market-leading brands in ammunition, hunting and shooting accessories, hydration bottles and packs, and outdoor cooking products.


“Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business.” said Metz. “An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years. We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position.”


The company plans to explore strategic options for assets that fall outside of these product categories, including its remaining Sports Protection brands (e.g. Bell, Giro, and Blackburn), Jimmy Styks paddle boards, and Savage and Stevens firearms. Vista Outdoor expects that the execution of this process will significantly reduce the company’s leverage, improve financial flexibility and the efficiency of its capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition.


“This transformation plan is a significant first step toward creating a portfolio of brands that is laser-focused on our target consumer and leverages the strengths of our combined platform,” said Metz. “This renewed focus will allow us to invest in these categories and their natural adjacencies. Coupled with our previously announced sales and marketing reorganization to drive a founder’s mentality back into our brands, this strategic orientation will also allow us to accelerate our efforts to expand e-commerce capabilities and increase our emphasis on market-leading product innovation. The end result will be a Vista Outdoor that lives up to the potential envisioned three years ago when the company was formed. We intend to begin the portfolio reshaping immediately, and anticipate executing any strategic alternatives by the end of Fiscal Year 2020.”

Savage had only been a part of Vista Outdoor and its predecessor ATK since May 2013 when ATK bought Caliber Company.

In comments made to the Wall Street Journal, CEO Chris Metz said:

Chief Executive Chris Metz, who joined the company in October, said brands built up through a series of acquisitions by the previous management team had failed to gel, denting sales and margins over the past two years. Vista Outdoor has seen two-thirds of its market value wiped away over the past two years as industry oversupply and bankruptcies among retailers have hit the broader shooting-sports industry…



Mr. Metz said the Savage Arms business remained “close to our core,” but Vista Outdoors wasn’t prepared to make the investment needed to make it a full-service firearms maker.

He added that they were in no hurry to sell these assets. While I don’t care what they do with paddle boards or bicycle helmets, I don’t want to see a venerable firearms company which still makes an excellent product just dumped on the market. I don’t know if they can get the $315 million they paid for Savage back in 2013 but time will tell.

UPDATE: Attached are two slides from the Vista Outdoor analyst presentation today which show the before and after of the potential spin-off of Savage and the others.

BEFORE
AFTER

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SAAMI Approves .224 Valkyrie Specs

March 28, 2018 by 1 Comment

Vista Outdoor announced yesterday that their Federal Premium developed .224 Valkyrie cartridge specifications had been approved by the Sporting Arms and Ammunition Manufacturer’s Institute aka SAAMI. Standardization of both the cartridge and chamber specifications certainly will help push greater adoption of this new cartridge.

From Vista Outdoor’s release:

Sporting Arms and Ammunition Manufacturers’ Institute Publishes Approved 224 Valkyrie Cartridge Specifications
ANOKA, Minnesota – March 27, 2018 –
The Sporting Arms and Ammunition Manufacturers’ Institute (SAAMI) voted
to approve the Federal Premium
224 Valkyrie as an official new cartridge during their committee
meeting at the 2018 SHOT Show in Las Vegas, Nevada this past January.
224 Valkyrie’s SAAMI standards documents are now published and available
to the industry as a whole, as well as to the public.
“It’s
thrilling to have brought the world’s best MSR 15 cartridge to market.
We’re proud and excited about our new cartridge, and we deeply
appreciate SAAMI’s support with this launch,” said
Federal Premium Ammunition President Jason Vanderbrink. “SAAMI’s
approval of the cartridge was a crucial step in
legitimizing it within the industry. Their work creates standards
for the cartridge, increasing safety, interchangeability, reliability
and quality for the dozens of firearm manufacturers currently building
rifles in our 224 Valkyrie.”
SAAMI
allows free access to technical data and drawings for the cartridge and
chamber designs, which are posted in the Information and Specifications
section of the organization’s website. All
cartridge and chamber drawing documents are contained within the
ANSI/SAAMI Standards and can be found on
www.saami.org. The New SAAMI Cartridge Cartridge/Chamber Designs and Revisions for 224 Valkyrie can be viewed here:
http://www.saami.org/PDF/224-Valkyrie-Introduction.pdf.
SAAMI
was founded in 1926 at the request of the federal government and tasked
with creating and publishing industry standards for safety,
interchangeability, reliability and quality, as well
as coordinating technical data. SAAMI’s Technical Committee, which
consists of firearm and ammunition industry experts, reviewed the 224
Valkyrie submission over a period of about six months. The official
cartridge name, maximum cartridge and minimum chamber
dimensions, pressure limits, test equipment, and other characteristics
are all considered and scrutinized during the process. 
Federal
Premium’s 224 Valkyrie is based on a 6.8 SPC case necked down to 22
caliber. It offers dramatically improved trajectories over all other MSR
15 cartridges, including the 22 Nosler, 223
Rem. and 6.5 Grendel—with roughly half the recoil of larger cartridges
offering comparable ballistics, such as the 6.5 Creedmoor. Shooters can
expect best-in-class ballistics, supersonic flight past 1,300 yards and
extreme long-range accuracy from this exciting
new cartridge.
The
224 Valkyrie is initially available in four loads: 90-grain Gold Medal
Sierra MatchKing, 60-grain Nosler Ballistic Tip Varmint, 90-grain Fusion
MSR and 75-grain American Eagle TMJ. These
proven Federal Premium offerings provide options for long-range
competitors, target shooters and hunters pursuing game from varmints up
to deer-sized animals.
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Head Of Vista Outdoor Exits

July 11, 2017 by

Mark DeYoung, CEO of Vista Outdoor, suddenly retired from his executive position as well as the Board of Directors yesterday. The report filed with the Securities and Exchange Commission (see below) notes that he won’t be staying on in any role with the company. DeYoung was CEO of ATK (formerly Alliant Technologies) when it split into two companies after merging with Orbital Sciences. He made the decision to go with the sporting and outdoor portion of the company rather than the aerospace and defense related portion.

Vista Outdoor is the parent holding company for Savage Arms, Stevens, Federal ammunition, Speer, RCBS, Weaver and Redfield scopes, and a large number of other well-known brands.

From their 8-K filing:

On July 10, 2017, the Board of Directors of Vista Outdoor Inc. (“Vista Outdoor” or the “Company”) announced that it has elected Michael Callahan, the Company’s current Lead Independent Director, to serve as interim Chairman and Chief Executive Officer effective July 11, 2017, replacing Mark W. DeYoung. Mr. DeYoung has elected to retire from the Company’s Board of Directors and role as Chief Executive Officer, effective July 11, 2017 (the “Retirement Date”).

Mr. Callahan, age 67, has more than 40 years of experience in the sporting goods industry, and has served as Lead Independent Director of Vista Outdoor since the Company spun off from ATK in February 2015. He has been the President and Chief Executive Officer of Aspen Partners, a Utah-based consultant to the outdoor sporting industry, since 2008. From 1990 until his retirement in 2008, Mr. Callahan served in various merchandising, marketing, management and senior executive positions with Cabela’s, Inc., most recently as Senior Vice President Business Development & International Operations where he was responsible for M&A and spearheaded Cabela’s expansion into Canada. Mr. Callahan is a member of the Board of the Midway USA Foundation and formerly served as a member of the Board of Bushnell Outdoor Products, Chairman of the Congressional Sportsmen’s Foundation and Vice Chairman of the Outdoor Business Council of the US Sportsmen’s Alliance.

In connection with Mr. DeYoung’s retirement, the Company has entered into a Waiver and General Release Agreement with Mr. DeYoung (the “Agreement”). In exchange for his waiver of claims against the Company, the Agreement provides Mr. DeYoung a lump-sum cash payment in an amount equal to his current base salary ($1,081,500); a pro-rata portion of his annual bonus (based on the Company’s actual performance for the entire fiscal year); accelerated vesting of his outstanding time-based restricted stock, restricted stock unit and stock option awards that would have vested had he remained employed by the Company for 12 months following his Retirement Date; a pro rata portion of his performance-based long-term incentive awards that would have vested on the next vesting date based on actual performance; company-paid COBRA premiums under Vista Outdoor’s health and welfare plans until 18 months following the Retirement Date; and the ability for Mr. DeYoung to participate in the Company’s Employee Purchase Program as if he remained an employee of the Company. The Employee Purchase Program allows all employees of the Company to purchase Company products at a discount. The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement filed as exhibit 10.1 hereto and incorporated by reference herein.

At the time of filing, the Company has not finalized a compensatory arrangement with Mr. Callahan in connection with his appointment to the position of interim Chairman and Chief Executive Officer. The entry of the Company of any such material compensatory or other arrangements with Mr. Callahan will be filed by the Company with the Securities and Exchange Commission.

I’m not sure why Mr. DeYoung suddenly retired as he was slated to stand for election to the Board of Directors in August. However, Vista Outdoor’s stock price is now about half what it was merely one year ago. According to the conference call today, the Board and Mr. DeYoung decided to “accelerate his retirement”.  Mr. Callahan has said he will not be a candidate for the permanent CEO position. They are denying that there is anything to read into the fact that the announcement of his retirement was very sudden. At least that is what they are saying.

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Gun Industry News – 2

May 3, 2016 by 2 Comments

Continuing to talk about the gun industry, and more specifically the ammunition component of it, Orbital ATK announced a big order today.

Orbital ATK, Inc. (OA) (NYSE (NYX): OA), a global leader in aerospace and defense technologies, announced today that it has received orders totaling $210 million to produce small caliber ammunition for the U.S. Army. Orders were placed for .50 caliber, 5.56mm and 7.62mm ammunition under Orbital ATK’s supply contract to produce a variety of small caliber ammunition for the U.S. government at the Lake City Army Ammunition Plant (Lake City) in Independence, Missouri.

Orbital ATK was formed from the merger of ATK and Orbital Sciences in February 2015. At the same time, the consumer firearms, consumer ammunition, and sporting businesses were spun off into Vista Outdoors.

The Orbital ATK Annual Meeting will be held tomorrow. They have released this presentation which goes over what will be presented at the Annual Meeting.

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ATK, Formerly Alliant Techsystems, Is No More

February 11, 2015 by
ATK, or Alliant Techsystems as it was formerly known, is no more. In its place are two new companies: Orbital ATK and Vista Outdoor. When ATK merged with Orbital Sciences Corporation, the sporting group  of ATK was spun off into Vista Outdoor while the defense contracting component remained in the new combined organization at the close of business yesterday.
If the first day of trading is any indication, shareholders have placed their bets with the sporting group or Vista Outdoor (VSTO). It was up $1.91 at the close while Orbital ATK (OA) was down $1.90.
Vista Outdoor stable of brands includes everything from Federal Premium and Savage Arms to Bolle and Serengetti sunglasses. For reloaders it includes well-known names such as RCBS, CCI, Alliant Powder, Speer Bullets, and Federal. 
Mark DeYoung, former CEO of ATK, cast his lot with Vista Outdoor instead of the defense component. The new company is headquartered in Clearfield, Utah which is halfway between Salt Lake City and Ogden. Vista Outdoor has 5,800 employees.
They released this video profiling Vista Outdoors yesterday.