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There were two significant C-Suite transitions at Vista Outdoor (VSTO) this month. The company is known for being ammunition manufacturer for brands like Remington and Federal as well as outdoor products like Camelbak, Fox and Bushnell.
General Counsel and Corporate Secretary, Dylan S. Ramsey, resigned from his position at Vista Outdoor on February 16, 2023, and will be leaving the company following a transition period.
The more notable departure however was that of Chris Metz, who on February 2, 2023 agreed to resign as CEO and director at the request of the Vista Outdoor Board based on the Board’s “loss of confidence in his leadership for reasons not involving financial reporting or internal controls”.
Welcome to edition 29 of C-Suite Transitions, a weekly series on InsideArbitrage that tracks appointments and departures at publicly traded companies during the prior week. We highlight five appointments and departures each week by picking the largest companies from the full list of management changes.
Founded in 2014 and headquartered in Anoka, Minnesota, Vista Outdoor creates, manufactures, and sells consumer goods in the outdoor sports and recreation markets in the United States as well as internationally. The company operates through two segments, Sporting Products and Outdoor Products.
The Sporting Products division designs, manufactures, and distributes ammunition parts, and related gear for military, federal, state, and local law enforcement, hunters, and recreational shooters. Ammunition products such as pistols, rifles, rimfires, and shotshell ammunition, as well as components, are included in this segment. Federal, CCI, and Remington are just a few of the company’s ammunition manufacturers.
The Outdoor Products segment provides gear and equipment to a wide range of end users, including hunters, hikers, campers, cyclists, skiers, snowboarders, and golfers, to enhance their outdoor experiences. This segment’s product line includes hunting and shooting accessories including reloading equipment, clay targets, premium gun care products, hunting arrows, game calls, hunting blinds, and decoys; optics such as binoculars, riflescopes, game cameras, and telescopes; tactical accessories such as holsters, duty gear, bags, and packs; personal hydration solutions such as hydration packs, water bottles, and drinkware; and outdoor cooking solutions such as grills. Outdoor Products brands include Bushnell, Camelbak, Foresight Sports, Camp Chef, and Giro to name a few.
Management Changes
On February 16, 2023, Vista Outdoor announced that General Counsel and Corporate Secretary, Dylan S. Ramsey, will be leaving the company following a transition period.
Mr. Ramsey had held the positions of General Counsel and Corporate Secretary since November 2019. Mr. Ramsey is also the Chairman of the Vista Outdoor Foundation’s Board of Directors. From 2017 to April 2018, he was the company’s Deputy General Counsel, and from 2015 to 2017, he was the Associate General Counsel.
Mr. Ramsey started to work in the legal department of Capital One Financial Corporation from 2012 to 2015, as well as at the law firms Gibson, Dunn & Crutcher LLP from 2010 to 2012 and Linklaters LLP from 2005 to 2010.
Jeff Ehrich, General Counsel And Corporate Secretary (Interim)
Vista Outdoor appointed Jeffrey Ehrich, who was previously the company’s Deputy General Counsel and Assistant Secretary, to the positions of General Counsel and Corporate Secretary (Interim) with effect from February 16, 2023. After the spin-off of the company’s Outdoor Products segment, which is anticipated to be completed in the calendar year 2023, Vista Outdoor expects that Mr. Ehrich will remain with the company and continue to serve as General Counsel and Corporate Secretary.
In 2011, Jeff Ehrich joined the legal departments of Vista Outdoor and its predecessor, ATK. In 2018, he was promoted to the positions of Assistant Corporate Secretary and Deputy General Counsel. He began his career as a cop, then as a commercial litigator before transitioning into commercial litigation.
Vista Outdoor Spinoff
On May 5, 2022, Vista Outdoor announced, that it would split up its Outdoor Products and Sporting Products segments into two separate, publicly traded companies. Vista Outdoor anticipates that the deal will take the form of a distribution of 100% Outdoor Products stock to its shareholders, resulting in the creation of a brand-new, independent publicly traded company. For U.S. federal income tax purposes, the distribution is meant to be tax-free for shareholders.
After the spinoff, the company will have an industry-leading platform of outdoor brands in its Outdoor Products segment, including CamelBak (water bottles, hydration packs) Bell, Giro, Camp Chef (grills, camp stoves), Bushnell, Bushnell Golf, Foresight Sports, Stone Glacier, and QuietKat (electric bicycles).
Sporting Products will remain focused on the ammunition categories through its well-known brands, including Federal, Remington, CCI, Speer, Estate Cartridge, and HEVI-Shot.
The outdoor segment will have its corporate headquarters in Montana, while the ammo business will remain based in Anoka. Following the spin-off, Vista Chief Executive Chris Metz was expected to lead the company’s outdoor products segment, and Jason Vanderbrink, President of the company’s ammunition division, was to be named CEO of Vista.
On February 2, 2023, Chris Metz, agreed to resign as CEO and director at the request of the Vista Outdoor Board based on the Board’s loss of confidence in his leadership for reasons not involving financial reporting or internal controls.
Gary McArthur, a member of the company’s Board of Directors, was appointed Interim Chief Executive Officer, effective immediately.
On October 24, 2022, Vista Outdoor (VSTO) announced that after two and a half years in his role, Sudhanshu Priyadarshi, the company’s Chief Financial Officer, had decided to pursue another opportunity and will be leaving his role in November 2022. He later joined Keurig Dr. Pepper. Andrew Keegan was named Interim CFO as the company undertakes a formal executive search.
Since both Chris Metz and Sudhanshu Priyadarshi departed the company, Vista now needs to find a CEO and CFO for their Outdoor Products segment before the spinoff.
Chris Metz – Former CEO
Mr. Metz served Vista as CEO since October 2017 and was set to take over as CEO of the spin-off outdoor company formed when Vista Outdoor splits into two companies later this year.
Mr. Metz’s departure was only briefly discussed in an SEC filing. “The Board’s request for Mr. Metz to resign was determined in the Board’s discretion to be the best path for Vista Outdoor after the consideration of a number of alternatives. Mr. Metz’s resignation as a director of the Company is not related to any disagreement on any matter relating to the Company’s operations, policies or practices.”
The board mentions reasons not involving financial reporting or internal controls which could infer differences in opinion about the company’s future trajectory. Metz “reportedly” departs amicably. “It has been an honor to lead Vista Outdoor for the last six years,” Chris Metz said in a press release. “Vista Outdoor has an excellent team of dedicated employees who will continue to drive the Company’s future success.”
Through March 31, 2023, Mr. Metz will continue to work for the business as a “full-time, non-officer employee.” and will be given a “lump sum cash payment equal to 100% of his current annual base salary” following the termination date.
Gary McArthur – Interim CEO
Gary McArthur, a member of the company’s Board of Directors, was appointed Interim Chief Executive Officer, effective immediately.
Mr. McArthur has been a member of the board of directors since February 2015. He was previously the CFO of Civil Engineering firm CH2M that was acquired by Jacobs (J) in 2017.
Third Quarter FY23 Financial Results (Investor Presentation)
Sporting Products
Sporting Products’ profitability is still significantly higher than it was before the pandemic because of the acquisition of Remington, which resulted in a wider and more lucrative product mix, and because of a strategic decision to move away from ammunition product categories that were less profitable and more volatile.
Outdoor Products
Outlook for Fiscal Year 2023
The updated fiscal outlook is as follows:
Vista Sells The Gun Company
Vista Outdoor announced in 2019 that it had sold its gun manufacturing operation to Long Range Acquisition for $170 million. The sale was prompted by an increase in gun-related violence in the United States. However, the business of manufacturing bullets, which has grown with the rise in gun ownership, remained with the company.
Acquisitions
In 2020, Remington’s ammunition and accessory division was acquired by Vista Outdoor for $81.4M.
In 2021 Vista acquired Foresight Sports, a leading designer, and manufacturer of golf performance analysis, entertainment, and game enhancement technologies, for $474 million.
In 2021 Vista Outdoor acquired e-bike manufacturer QuietKat.
In 2022 Vista acquired Irvine, Calif.-based Fox Racing, a mountain bike, and lifestyle gear company for $540 million.
In 2022 Vista acquired Simms Fishing Products for a purchase price of $192.5 million.
Despite including fewer brands, the sporting sector of Vista Outdoor continues to be the most dominant segment. Strong free cash flow allowed the company to expand its Outdoor portfolio in Q1 2023 by acquiring additional brands.
The company trades at an extremely low P/E of 3.94 and TTM EV/EBITDA of 4.09. The company has a leveraged balance sheet with $1.14 billion of net debt on the books. It will be interesting to see which of the two companies will inherit most of this debt after the spinoff. We look forward to revisiting the company as we get closer to the spinoff date.
Appointments
1. Commercial Metals (CMC): $55.59
On February 16, 2023, Commercial Metals Company announced that, as part of the company’s succession plan, the company’s board of directors appointed Peter R. Matt as President, effective April 1, 2023.
| MarketCap: $6.51B | Avg. Daily Volume (30 days): 960,139 | Revenue (TTM): $9.16B |
| Net Income Margin (TTM): 13.61% | ROE (TTM): 41.06% | Net Debt: $747.9M |
| P/E: 5.42 | Forward P/E: 9.84 | EV/EBIDTA (TTM): 4.58 |
| P/S (TTM): 0.76 | P/B (TTM): 1.87 | 52 Week Range: $$31.27 – $58.09 |
| MarketCap: $4.54B | Avg. Daily Volume (30 days): 365,859 | Revenue (TTM): $537.88M |
| Net Income Margin (TTM): -16.91% | ROE (TTM): -230.36% | Net Cash: $59.25M |
| P/E: -50.92 | Forward P/E: N/A | EV/EBIDTA (TTM): -56.99 |
| P/S (TTM): 8.73 | P/B (TTM): N/A | 52 Week Range: $59.43 – $124.76 |
| MarketCap: $22.54B | Avg. Daily Volume (30 days): 6,154,724 | Revenue (TTM): $6.58B |
| Net Income Margin (TTM): -20.74% | ROE (TTM): -23.93% | Net Cash: $3B |
| P/E: -15.75 | Forward P/E: N/A | EV/EBIDTA (TTM): -32.40 |
| P/S (TTM): 3.49 | P/B (TTM): 3.55 | 52 Week Range: $41.37 – $130.20 |
4. Procore Technologies (PCOR): $65.21
On February 15, 2023, Board approved the appointment of Howard Fu, to serve as Chief Financial Officer and Treasurer effective March 31, 2023.
| MarketCap: $8.87B | Avg. Daily Volume (30 days): 965,973 | Revenue (TTM): $720.20M |
| Net Income Margin (TTM): -39.84% | ROE (TTM): -24.88% | Net Cash: $498.54M |
| P/E: -31.03 | Forward P/E: N/A | EV/EBIDTA (TTM): -38.41 |
| P/S (TTM): 12.28 | P/B (TTM): 8.00 | 52 Week Range: $40 – $68.56 |
5. Foot Locker (FL): $42.84
On February 15, 2023, Foot Locker Board of Directors appointed Robert Higginbotham, as interim Chief Financial Officer, effective March 1, 2023, in addition to his current duties as Senior Vice President, Investor Relations, and Financial Planning & Analysis.
| MarketCap: $4.00B | Avg. Daily Volume (30 days):2,161,541 | Revenue (TTM): $8.75B |
| Net Income Margin (TTM): 4.87% | ROE (TTM): 12.85% | Net Debt: $2.84B |
| P/E: 9.74 | Forward P/E: 11.31 | EV/EBIDTA (TTM): 7.39 |
| P/S (TTM): 0.49 | P/B (TTM): 1.27 | 52 Week Range: $23.19 – $47.22 |
1. Workiva (WK): $87.59
On February 21, 2023, Martin J. Vanderploeg notified the Board of Directors of Workiva of his intent to retire as Chief Executive Officer of the company, effective March 31, 2023.
Mr. Vanderploeg will continue to serve on the Board, and commencing on April 1, 2023, will serve as the Board’s Non-Executive Chair.
| MarketCap: $4.54B | Avg. Daily Volume (30 days): 365,859 | Revenue (TTM): $537.88M |
| Net Income Margin (TTM): -16.91% | ROE (TTM): -230.36% | Net Cash: $59.25M |
| P/E: -50.92 | Forward P/E: N/A | EV/EBIDTA (TTM): -56.99 |
| P/S (TTM): 8.73 | P/B (TTM): N/A | 52 Week Range: $59.43 – $124.76 |
2. Commercial Metals (CMC): $55.59
On February 16, 2023, Commercial Metals Company announced that Barbara R. Smith steps down as President effective April 1, 2023, Barbara R. Smith will remain Chairman and Chief Executive Officer of the company.
| MarketCap: $6.51B | Avg. Daily Volume (30 days): 960,139 | Revenue (TTM): $9.16B |
| Net Income Margin (TTM): 13.61% | ROE (TTM): 41.06% | Net Debt: $747.9M |
| P/E: 5.42 | Forward P/E: 9.84 | EV/EBIDTA (TTM): 4.58 |
| P/S (TTM): 0.76 | P/B (TTM): 1.87 | 52 Week Range: $$31.27 – $58.09 |
3. Maximus (MMS): $83.04
David Francis, who has served as the General Counsel of Maximus since 1998, has announced his intention to retire at the end of 2023. The company has commenced a search for his replacement.
| MarketCap: $5.06B | Avg. Daily Volume (30 days): 415,972 | Revenue (TTM): $4.73B |
| Net Income Margin (TTM): 4.03% | ROE (TTM): 12.25% | Net Debt: $1.67B |
| P/E: 26.87 | Forward P/E: N/A | EV/EBIDTA (TTM): 15.71 |
| P/S (TTM): 1.10 | P/B (TTM): 3.23 | 52 Week Range: $54.04 – $84.97 |
4. Procore Technologies (PCOR): $65.21
On February 15, 2023, Paul E. Lyandres transitioned from his current position as Chief Financial Officer and Treasurer of the company to a newly established position as President of Fintech effective March 31, 2023.
| MarketCap: $8.87B | Avg. Daily Volume (30 days): 965,973 | Revenue (TTM): $720.20M |
| Net Income Margin (TTM): -39.84% | ROE (TTM): -24.88% | Net Cash: $498.54M |
| P/E: -31.03 | Forward P/E: N/A | EV/EBIDTA (TTM): -38.41 |
| P/S (TTM): 12.28 | P/B (TTM): 8.00 | 52 Week Range: $40 – $68.56 |
5. DoorDash (DASH): $57.89
On February 13, 2023, Christopher Payne informed DoorDash of his intention to resign as Chief Operating Officer and President of DoorDash, effective March 1, 2023.
Mr. Payne will remain with the company through a transition period and retire from the company at the end of May 2023.
| MarketCap: $22.54B | Avg. Daily Volume (30 days): 6,154,724 | Revenue (TTM): $6.58B |
| Net Income Margin (TTM): -20.74% | ROE (TTM): -23.93% | Net Cash: $3B |
| P/E: -15.75 | Forward P/E: N/A | EV/EBIDTA (TTM): -32.40 |
| P/S (TTM): 3.49 | P/B (TTM): 3.55 | 52 Week Range: $41.37 – $130.20 |
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