UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



ý☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2019

~~For the quarterly period ended September 30, 2018~~

OR

o☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For the transition period from to~~

For the transition period from to

Commission file number 1-36597

Vista Outdoor Inc.

(Exact name of Registrant as specified in its charter)



Delaware			47-1016855
(State or other jurisdiction of incorporation or organization)			~~47-1016855~~ (I.R.S. Employer Identification No.)

1 Vista Way ~~Anoka, MN~~	Anoka	MN	55303
(Address of ~~principal executive offices)~~Principal Executive Offices)			(Zip Code)

Registrant's telephone number, including area code: ~~(801) 447-3000~~(763) 433-1000

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01	VSTO	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesý☒ No o☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesý�� No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated ~~Filer~~ ýfiler	☐	~~Accelerated Filer~~ o Non-accelerated filer	☐	~~Non-Accelerated Filer~~ o ~~(Do not check if a~~ ~~smaller reporting company)~~	Smaller reporting companyo	☐	Emerging growth companyo	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No ý☒

As of October ~~29, 2018,~~28, 2019, there were ~~57,578,275~~57,826,570 shares of the registrant's voting common stock outstanding.

TABLE OF CONTENTS

PART I— FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(Amounts in thousands except share data)	September 30, 2018			March 31, 2018			September 29, 2019			March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	46,246		$	22,870		$	22,811		$	21,935
Net receivables	423,720			421,763			363,113			344,249
Net inventories	431,800			382,278			364,146			344,491
Income tax receivable	5,426			3,379
Assets held for sale	—			200,440			—			207,607
Other current assets	21,665			27,962			23,350			21,180
Total current assets	928,857			1,058,692			773,420			939,462
Net property, plant, and equipment	264,662			277,207			197,550			215,592
Operating lease assets							69,105			—
Goodwill	653,964			657,536			204,496			204,496
Net intangible assets	554,623			592,279			350,725			360,520
Deferred charges and other non-current assets	17,015			29,122
Deferred charges and other non-current assets, net							33,899			17,953
Total assets	$	2,419,121		$	2,614,836		$	1,629,195		$	1,738,023
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	32,000		$	—		$	19,335
Accounts payable	159,560			114,549			110,572			99,283
Accrued compensation	35,606			36,346			34,911			36,456
Accrued income taxes							697			436
Federal excise tax	23,748			22,701			20,597			18,482
Liabilities held for sale	—			42,177			—			46,030
Other current liabilities	126,141			97,447			110,642			97,175
Total current liabilities	345,055			345,220			277,419			317,197
Long-term debt	741,586			883,399			578,281			684,670
Deferred income tax liabilities	53,782			66,196			17,210			17,757
Long-term operating lease liabilities							74,051			—
Accrued pension and postemployment benefits	36,554			38,196			43,038			46,083
Other long-term liabilities	62,945			64,335			50,695			63,276
Total liabilities	1,239,922			1,397,346			1,040,694			1,128,983
Commitments and contingencies (Notes 12 and 15)
Commitments and contingencies (Notes 3, 13, and 16)
Common stock — $.01 par value:
Authorized — 500,000,000 shares
Issued and outstanding — 57,551,275 shares as of September 30, 2018 and 57,431,299 shares as of March 31, 2018	576			574
Issued and outstanding — 57,787,433 shares as of September 29, 2019 and 57,710,934 shares as of March 31, 2019							578			577
Additional paid-in capital	1,759,481			1,746,182			1,752,175			1,752,419
Accumulated deficit	(241,692		)	(156,526		)	(833,482		)	(804,969		)
Accumulated other comprehensive loss	(74,278		)	(104,296		)	(78,513		)	(82,967		)
Common stock in treasury, at cost — 6,413,164 shares held as of September 30, 2018 and 6,533,140 shares held as of March 31, 2018	(264,888		)	(268,444		)
Common stock in treasury, at cost — 6,177,006 shares held as of September 29, 2019 and 6,253,505 shares held as of March 31, 2019							(252,257		)	(256,020		)
Total stockholders' equity	1,179,199			1,217,490			588,501			609,040
Total liabilities and stockholders' equity	$	2,419,121		$	2,614,836		$	1,629,195		$	1,738,023

See Notes to the Condensed Consolidated Financial Statements.

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Quarter ended						Six months ended						Three months ended						Six months ended
(Amounts in thousands except per share data)	September 30, 2018			October 1, 2017			September 30, 2018			October 1, 2017			September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018
Sales, net	$	546,585		$	587,283		$	1,075,421		$	1,156,032		$	445,016		$	546,585		$	904,790		$	1,075,421
Cost of sales	437,828			448,306			853,326			870,497			354,752			437,828			719,448			853,326
Gross profit	108,757			138,977			222,095			285,535			90,264			108,757			185,342			222,095
Operating expenses:
Research and development	7,210			7,447			14,178			15,238			5,553			7,210			12,047			14,178
Selling, general, and administrative	97,282			106,386			198,336			205,812			82,971			97,282			166,880			198,336
Goodwill and intangibles impairment	23,411			152,320			23,411			152,320
Impairment of held-for-sale assets (Note 6)	—			—			44,921			—
Income (loss) before other expense, interest, and income taxes	(19,146		)	(127,176		)	(58,751		)	(87,835		)
Other income (expense), net (Note 6)	(4,925		)	—			(4,925		)	—
Intangibles impairment													—			23,411			—			23,411
Impairment of held-for-sale assets (Note 7)													—			—			9,429			44,921
Income (loss) before interest, income taxes, and other													1,740			(19,146		)	(3,014		)	(58,751		)
Other income (expense), net (Note 7)													(433		)	(4,925		)	(433		)	(4,925		)
Interest expense, net	(16,865		)	(12,569		)	(30,337		)	(24,962		)	(12,314		)	(16,865		)	(23,438		)	(30,337		)
Income (loss) before income taxes	(40,936		)	(139,745		)	(94,013		)	(112,797		)	(11,007		)	(40,936		)	(26,885		)	(94,013		)
Income tax provision (benefit)	(8,118		)	(25,040		)	(8,847		)	(14,744		)	891			(8,118		)	1,628			(8,847		)
Net income (loss)	$	(32,818	)	$	(114,705	)	$	(85,166	)	$	(98,053	)	$	(11,898	)	$	(32,818	)	$	(28,513	)	$	(85,166	)
Earnings (loss) per common share:
Basic	$	(0.57	)	$	(2.01	)	$	(1.48	)	$	(1.72	)	$	(0.21	)	$	(0.57	)	$	(0.49	)	$	(1.48	)
Diluted	$	(0.57	)	$	(2.01	)	$	(1.48	)	$	(1.72	)	$	(0.21	)	$	(0.57	)	$	(0.49	)	$	(1.48	)
Weighted-average number of common shares outstanding:
Basic	57,528			57,099			57,492			57,041			57,768			57,528			57,746			57,492
Diluted	57,528			57,099			57,492			57,041			57,768			57,528			57,746			57,492

Net income (loss) (from above)	$	(32,818	)	$	(114,705	)	$	(85,166	)	$	(98,053	)	$	(11,898	)	$	(32,818	)	$	(28,513	)	$	(85,166	)
Other comprehensive income (loss), net of tax:
Pension and other postretirement benefit liabilities:
Reclassification of prior service credits for pension and postretirement benefit plans recorded to net income, net of tax benefit of $19 and $29 for the quarter ended, respectively; and, $38 and $192 for the six months ended, respectively.	(60		)	(49		)	(120		)	(323		)
Reclassification of net actuarial loss for pension and postretirement benefit plans recorded to net income, net of tax expense of $(172) and $(293) for the quarter ended, respectively; and, $(343) and $(959) for the six months ended, respectively.	543			493			1,086			1,615
Valuation adjustment for pension and postretirement benefit plans, net of tax expense of $0 and $(2,158) for the quarter ended, respectively; and, $0 and $(4) for the six months ended, respectively.	—			3,633			—			5
Change in derivatives, net of tax expense of $210 and $0 for the quarter ended, respectively; and, $147 and $(14) for the six months ended, respectively.	(664		)	—			(464		)	23
Reclassification of prior service credits for pension and postretirement benefit plans recorded to net income, net of tax benefit of $0 and $19 for the three months ended, respectively, and $0 and $38 for the six months ended, respectively.													(78		)	(60		)	(156		)	(120		)
Reclassification of net actuarial loss for pension and postretirement benefit plans recorded to net income, net of tax expense of $0 and $(172) for the three months ended, respectively, and $0 and $(343) for the six months ended, respectively.													812			543			1,623			1,086
Change in derivatives, net of tax benefit (expense) of $0 and $210 for the three months ended, respectively, and $0 and $147 for the six months ended, respectively.													700			(664		)	(450		)	(464		)
Currency translation gains reclassified from accumulated other comprehensive loss													3,150			—			3,150			—
Change in cumulative translation adjustment.	36,662			7,101			29,516			15,672			(477		)	36,662			287			29,516
Total other comprehensive income (loss)	36,481			11,178			30,018			16,992			4,107			36,481			4,454			30,018
Comprehensive income (loss)	$	3,663		$	(103,527	)	$	(55,148	)	$	(81,061	)	$	(7,791	)	$	3,663		$	(24,059	)	$	(55,148	)

See Notes to the Condensed Consolidated Financial Statements.

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six months ended						Six months ended
(Amounts in thousands)	September 30, 2018			October 1, 2017			September 29, 2019			September 30, 2018
Operating Activities:
Net income (loss)	$	(85,166	)	$	(98,053	)	$	(28,513	)	$	(85,166	)
Adjustments to net income (loss) to arrive at cash provided by operating activities:
Adjustments to net income (loss) to arrive at cash (used for) provided by operating activities:
Depreciation	27,371			27,503			26,250			27,371
Amortization of intangible assets	13,620			18,253			9,782			13,620
Impairment of held-for-sale assets (Note 6)	44,921			—
Goodwill and intangibles impairment	23,411			152,320
Impairment of held-for-sale assets (Note 7)							9,429			44,921
Intangibles impairment							—			23,411
Amortization of deferred financing costs	5,033			1,494			3,890			5,033
Deferred income taxes	(12,770		)	(29,425		)	(200		)	(12,770		)
Loss on disposal of property, plant, and equipment	1,602			83
Loss on disposition	4,925			—
(Gain) loss on disposal of property, plant, and equipment							(57		)	1,602
Loss on divestitures (Note 7)							431			4,925
Stock-based compensation	3,880			7,325			3,574			3,880
Changes in assets and liabilities:
Net receivables	8,272			(49,967		)	(5,089		)	8,272
Net inventories	(56,511		)	52,337			(37,468		)	(56,511		)
Accounts payable	47,659			11,950			9,382			47,659
Accrued compensation	262			2,712			(2,290		)	262
Accrued income taxes	245			12,028			1,723			245
Federal excise tax	1,105			(4,335		)	(350		)	1,105
Pension and other postretirement benefits	(370		)	(3,840		)	(1,435		)	(370		)
Other assets and liabilities	30,853			11,737			2,703			30,853
Cash provided by operating activities	58,342			112,122
Cash (used for) provided by operating activities							(8,238		)	58,342
Investing Activities:
Capital expenditures	(19,232		)	(31,189		)	(17,720		)	(19,232		)
Proceeds from sale of Eyewear business	151,595			—
Proceeds from sale of our Firearms business and Eyewear brands (Note 7)							156,567			151,595
Proceeds from the disposition of property, plant, and equipment	335			58			260			335
Cash provided by (used for) investing activities	132,698			(31,131		)
Cash provided by investing activities							139,107			132,698
Financing Activities:
Borrowings on line of credit	70,000			210,000
Payments made on line of credit	(70,000		)	(270,000		)
Settlement from former parent	13,047			—
Borrowings on lines of credit							192,232			70,000
Payments on lines of credit							(197,234		)	(70,000		)
Payments made on long-term debt	(176,000		)	(16,000		)	(124,509		)	(176,000		)
Payments made for debt issuance costs	(2,845		)	(1,805		)	(103		)	(2,845		)
Settlement from former parent							—			13,047
Shares withheld for payroll taxes	(846		)	(2,958		)	(307		)	(846		)
Proceeds from employee stock compensation plans	—			4,237
Cash used for financing activities	(166,644		)	(76,526		)	(129,921		)	(166,644		)
Effect of foreign exchange rate fluctuations on cash	(1,020		)	1,458			(72		)	(1,020		)
Increase in cash and cash equivalents	23,376			5,923			876			23,376
Cash and cash equivalents at beginning of period	22,870			45,075			21,935			22,870
Cash and cash equivalents at end of period	$	46,246		$	50,998		$	22,811		$	46,246

Supplemental Cash Flow Disclosures:
Non-cash investing activity:
Capital expenditures included in accounts payable	$	4,456		$	2,386		$	1,216		$	4,456

See Notes to the Condensed Consolidated Financial Statements.

VISTA OUTDOOR INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)


	Common Stock $.01 Par Value																			Common Stock $.01 Par Value
(Amounts in thousands except share data)	Shares		Amount		Additional Paid-In Capital			(Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Equity			Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total Equity
Balance, March 31, 2017	57,014,319		$	571	$	1,752,903		$	(108,033	)	$	(112,992	)	$	(287,384	)	$	1,245,065
Balance, March 31, 2019																				57,710,934	$	577	$	1,752,419		$	(804,969	)	$	(82,967	)	$	(256,020	)	$	609,040
Comprehensive income (loss)	—		—		—			(98,053		)	16,992			—			(81,061		)	—	—		—			(16,615		)	347			—			(16,268		)
Exercise of stock options	265,160		—		(6,734		)	—			—			10,971			4,237
Restricted stock grants net of forfeitures	(63,687	)	—		251			—			—			(1,633		)	(1,382		)
Share-based compensation	—		—		7,325			—			—			—			7,325			—	—		2,190			—			—			—			2,190
Restricted stock vested and shares withheld	48,450		—		(2,200		)	—			—			1,319			(881		)	23,059	—		(1,534		)	—			—			1,428			(106		)
Employee stock purchase plan	11,109		—		(220		)	—			—			459			239			11,028	—		(358		)	—			—			451			93
Other	2,626		2		(133		)	—			—			132			1			724	—		43			—			—			(43		)	—
Balance, October 1, 2017	57,277,977		$	573	$	1,751,192		$	(206,086	)	$	(96,000	)	$	(276,136	)	$	1,173,543
Balance, June 30, 2019																				57,745,745	$	577	$	1,752,760		$	(821,584	)	$	(82,620	)	$	(254,184	)	$	594,949
Comprehensive income (loss)																				—	—		—			(11,898		)	4,107			—			(7,791		)
Share-based compensation																				—	—		1,384			—			—			—			1,384
Restricted stock vested and shares withheld																				12,666	—		(859		)	—			—			818			(41		)
Other																				29,022	1		(1,110		)	—			—			1,109			—
Balance, September 29, 2019																				57,787,433	$	578	$	1,752,175		$	(833,482	)	$	(78,513	)	$	(252,257	)	$	588,501

																				Common Stock $.01 Par Value
(Amounts in thousands except share data)																				Shares	Amount		Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Total Equity
Balance, March 31, 2018	57,431,299		$	574	$	1,746,182		$	(156,526	)	$	(104,296	)	$	(268,444	)	$	1,217,490		57,431,299	$	574	$	1,746,182		$	(156,526	)	$	(104,296	)	$	(268,444	)	$	1,217,490
Comprehensive income (loss)	—		—		—			(85,166		)	30,018			—			(55,148		)	—	—		—			(52,348		)	(6,463		)	—			(58,811		)
Share-based compensation	—		—		3,982			—			—			(102		)	3,880			—	—		2,380			—			—			(12		)	2,368
Restricted stock vested and shares withheld	47,958		—		(2,209		)	—			—			1,927			(282		)	24,430	—		(1,755		)	—			—			1,486			(269		)
Employee stock purchase plan	13,083		—		(334		)	—			—			540			206			7,241	—		(192		)	—			—			299			107
Settlement from former parent	—		—		13,047			—			—			—			13,047			—	—		13,047			—			—			—			13,047
Other	58,935		2		(1,187		)	—			—			1,191			6			58,935	1		(980		)	—			—			984			5
Balance, July 1, 2018																				57,521,905	$	575	$	1,758,682		$	(208,874	)	$	(110,759	)	$	(265,687	)	$	1,173,937
Comprehensive income (loss)																				—	—		—			(32,818		)	36,481			—			3,663
Share-based compensation																				—	—		1,601			—			—			(90		)	1,511
Restricted stock vested and shares withheld																				23,528	—		(455		)	—			—			440			(15		)
Employee stock purchase plan																				5,842	—		(142		)	—			—			241			99
Other																				—	1		(205		)	—			—			208			4
Balance, September 30, 2018	57,551,275		$	576	$	1,759,481		$	(241,692	)	$	(74,278	)	$	(264,888	)	$	1,179,199		57,551,275	$	576	$	1,759,481		$	(241,692	)	$	(74,278	)	$	(264,888	)	$	1,179,199

See Notes to the Condensed Consolidated Financial Statements.

VISTA OUTDOOR INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~Quarter~~Three and six months ended September ~~30, 2018~~29, 2019

(Amounts in thousands except share and per share data unless otherwise indicated)

1. Significant Accounting Policies

Nature of Operations—Vista Outdoor Inc. (together with our subsidiaries, "Vista Outdoor", "we", "our", and "us") is a leading global designer, manufacturer and marketer of consumer products in the ~~growing~~ outdoor sports and recreation markets. We operate in ~~two~~2 segments, Outdoor Products and Shooting Sports. Vista Outdoor is headquartered in Anoka, Minnesota and has manufacturing ~~operations~~ and distribution facilities in ~~18 locations in the United~~15 U.S. States, Canada, Mexico, and Puerto Rico along with international customer service, sales and sourcing operations in Asia ~~Australia, Canada,~~ and Europe. Vista Outdoor was incorporated in Delaware in 2014. The condensed consolidated financial statements reflect our financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles.

This Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and notes included in our ~~annual report~~Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018~~2019 (“fiscal ~~2018”~~2019”).

Basis of Presentation—Our unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the Securities and Exchange Commission ("SEC") for interim reporting. As permitted under those rules, certain disclosures and other financial information that normally are required by accounting principles generally accepted in the United States ~~can be~~have been condensed or omitted. Our accounting policies are described in the notes to the consolidated financial statements in our Annual Report on Form 10-K for fiscal ~~2018.~~2019. Management is responsible for the condensed consolidated financial statements included in this report, which are unaudited but, in the opinion of management, include all adjustments necessary for a fair presentation of our financial position as of September ~~30, 2018~~29, 2019 and March 31, ~~2018,~~2019, our results of operations for the three and six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ and our cash flows for the six months ended September 29, 2019 and September 30, ~~2018 and October 1, 2017.~~2018.

New Accounting Pronouncements~~—Effective April~~

Our accounting policies are described in Note 1 ~~2018, we adopted Accounting Standards Update ("ASU") No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(Topic 606), which supersedes existing revenue recognition requirements. We adopted this standard effective April 1, 2018 using~~of the ~~modified retrospective transition method. The~~Notes to Consolidated Financial Statements included in our fiscal year 2019 Annual Report on Form 10-K. Such significant accounting policies are applicable for periods prior to the adoption of ~~this standard did not have a material impact on our consolidated financial statements. See Note 4,~~ ~~Revenue Recognition,~~ ~~for our enhanced disclosures about revenue in accordance with~~ the following new ~~standard.~~accounting standards.

OnIn February ~~25,~~ 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards ~~Update~~update ("ASU") 2016-02, ~~Leases. The new guidance was issued~~“Leases" (Topic 842), which requires lessees to ~~increase transparency~~recognize a right-of-use asset and ~~comparability among companies by requiring most~~lease liability for all leases ~~to be included~~with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. We adopted ASU 2016-02 prospectively starting on April 1, 2019. As part of the ~~balance sheet and by expanding disclosure requirements. Based on~~adoption, we elected the ~~current effective dates,~~package of practical expedients which permits us under the new ~~guidance would first apply in the first quarter of our fiscal 2020. Although we expect adoption of the~~ standard not to ~~materially increase the assets and liabilities recorded~~reassess historical lease classification, not to recognize short-term leases on our balance sheet, and not to separate lease and non-lease components for all our leases. In addition, we ~~are still evaluating~~elected the ~~overall~~use of hindsight to determine the lease term of our leases and applied our incremental borrowing rate based on the remaining term of our leases as of the adoption date. The impact upon adoption, on April 1, 2019, resulted in the recognition of right-of-use assets of approximately $75,749, and lease liabilities of approximately $91,604 on our ~~financial statements.~~unaudited condensed consolidated balance sheet. See Note 3, Leases, for additional information.

In August ~~2017,~~2018, the FASB issued ASU ~~2017-12,~~ ~~Derivatives~~2018-15, “Intangibles – Goodwill and ~~Hedging (Topic 815)~~Other – Internal-Use Software (Subtopic 350-40): ~~Targeted Improvements to~~Customer’s Accounting for ~~Hedging Activities.~~ Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU ~~2017-12 amends existing~~2018-15 clarifies the accounting treatment for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. ASU 2018-15 is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, with early adoption permitted. ASU 2018-15 may be applied either retrospectively or prospectively to ~~better align an entity’s risk management activities and financial reporting for hedging relationships.~~all implementation costs incurred after the date of adoption. We are currently assessing the impact that adoption of ASU 2017-12 also expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The standard allows for early adoption. As of September 30, 2018, we elected to early adopt this standard, which did not2018-15 will have ~~a material impact~~ on our consolidated financial statements.

Other than the standards noted above and in our fiscal 2018 financial statements, there are no other new accounting pronouncements that are expected to have a significant impact on our condensed consolidated financial statements.

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

2. Fair Value of Financial Instruments

The current authoritative guidance on fair value clarifies the definition of fair value, prescribes a framework for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value, and ~~requires~~expands disclosures about the use of fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a

liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The valuation techniques required by the current authoritative literature are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3—Significant inputs to the valuation model are unobservable.

The following section describes the valuation methodologies we used to measure our financial instruments at fair value.

Long-term debt—The fair value of ~~our outstanding~~the variable-rate long-term debt is calculated based on current market rates for debt of the same risk and maturities. The fair value of the fixed-rate ~~long-term~~ debt is based on market quotes for ~~the outstanding notes.~~each issuance. We consider these to be Level 2 instruments.

Interest rate swaps—We periodically enter into floating-to-fixed interest rate swap agreements in order to hedge our forecasted interest payments on our outstanding variable-rate debt. The fair value of those swaps is determined using a pricing model based on observable inputs for similar instruments and other market assumptions. We consider these to be Level 2 instruments. See Note ~~12,~~ 13, Long-term Debt, for additional information.

Commodity Price Hedging Instruments—We periodically enter into commodity forward contracts to hedge our exposure to price fluctuations on certain commodities we use for raw material components in our manufacturing process. When actual commodity prices exceed the fixed price provided by these contracts, we receive this difference from the counterparty, and when actual commodity prices are below the contractually provided fixed price, we pay this difference to the counterparty. We consider these to be Level 2 instruments. See Note 3, 4, Derivative Financial Instruments,for additional information.

Note Receivable—In connection with the sale of our Firearms business we received a $12,000 interest-free, five-year pre-payable promissory note due June 2024. Based on the general market conditions and the credit quality of the buyer at the time of the sale, we discounted the Note Receivable at an effective interest rate of 10% and estimated fair value using a discounted cash flow approach. We consider this to be a Level 3 instrument. See Note 8, Receivables, for additional information.

Contingent consideration—The acquisition-related contingent consideration liability represents the estimated fair value of additional future earn-outs payable for acquisitions of businesses that included earn-out clauses. The valuation of the contingent consideration is evaluated on an ongoing basis and is based on management estimates and entity-specific assumptions which are considered Level 3 inputs. On September 1, 2016, we completed the acquisition of ~~privately owned~~privately-owned Logan Outdoor Products, LLC and Peak Trades, LLC ("Camp Chef"), a leading provider of outdoor cooking solutions. Under the terms of the transaction, approximately $10,000 of the purchase price is ~~payable~~earned over a three-year period from the closing date if certain incremental growth milestones are met and key members of Camp Chef management continue their employment with us through the respective milestone dates. The approximately $10,000 is being expensed over the three-year measurement period and is to be paid in ~~three~~3 equal installments asafter each milestone is achieved. The growth milestones for the first and second ~~year~~years have been met and therefore, we ~~will pay~~paid $3,371 during both fiscal 2019 and 2018. The third installment is expected to be paid during the third quarter ~~ended December 30, 2018.~~of fiscal 2020.

The following table presents our financial assets and liabilities that are not measured at fair value on a recurring basis. The carrying values and estimated fair values were as follows:



	September 29, 2019				March 31, 2019
	Carrying amount		Fair value		Carrying amount		Fair value
Fixed-rate debt	$	350,000	$	327,614	$	350,000	$	326,375
Variable-rate debt	235,000		235,000		364,509		364,509

September 30, 2018 March 31, 2018
Carrying
amount Fair
value Carrying
amount Fair
value
Fixed-rate debt $ 350,000
$ 345,300
$ 350,000
$ 328,248
Variable-rate debt 400,000
400,000
576,000
576,000

3. Leases

We lease certain warehouse and distribution space, manufacturing space, office space, retail locations, equipment and vehicles. All of these leases are classified as operating leases. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. These rates are assessed on a quarterly basis. The operating lease assets also include any lease payments made less lease incentives. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For operating leases, expense is recognized on a straight-line basis over the lease term. Variable lease payments associated with the Company's leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. Tenant improvement allowances were recorded as leasehold improvements with an offsetting adjustment included in the Company’s calculation of its right-of-use asset.

Many leases include one or more options to renew, with renewal terms that can extend the lease term for three years or more. The exercise of lease renewal options is at our sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

The amounts of assets and liabilities related to our operating leases follow.



	Balance Sheet Caption	September 29, 2019
Assets:
Operating lease assets	Operating lease assets	$	69,105

Liabilities:
Current:
Operating lease liabilities	Other current liabilities	$	11,190
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	74,051
Total lease liabilities		$	85,241

During the three months ended September 29, 2019, the Company recorded $1,069 of operating lease impairment charges related to the exit and sublease of certain real estate leases. The impairment charges were recorded within selling, general and administration expenses in the unaudited condensed consolidated statements of comprehensive income (loss).

The components of lease expense are recorded to cost of sales and selling, general and administration expenses in the unaudited condensed consolidated statements of comprehensive income (loss). The components of lease expense were as follows:



	Three months ended September 29, 2019			Six months ended September 29, 2019
Fixed operating lease costs (1)	$	4,686		$	9,703
Variable operating lease costs	704			1,239
Sublease income	(192		)	(473		)
Net Lease costs	$	5,198		$	10,469

(1) Includes short-term leases, which are immaterial.



	September 29, 2019
Weighted Average Remaining Lease Term (Years):
Operating leases	9.81

Weighted Average Discount Rate:
Operating leases	8.63	%

The approximate future minimum lease payments under operating leases as of September 29, 2019 are as follows:



Remainder of fiscal 2020	$	9,593
Fiscal 2021	16,590
Fiscal 2022	13,275
Fiscal 2023	11,602
Fiscal 2024	10,315
Thereafter	69,489
Total lease payments	130,864
Less imputed interest	(45,623		)
Present value of lease liabilities	$	85,241

Supplemental cash flow information related to leases is as follows:



	Six months ended September 29, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	$	10,475
Right of use assets obtained in exchange for lease liabilities:
Operating leases	1,143

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

3.4. Derivative Financial Instruments

We are exposed to market risks arising from adverse changes in:

commodity prices affecting the cost of raw materials,

interest rates, and

foreign exchange risks.

In the normal course of business, these risks are managed through a variety of strategies, including the use of derivative instruments. See Note ~~12,~~ 13, Long-term Debt, for additional information on our interest rate swaps.

We entered into various commodity forward contracts during ~~the quarter ended September 30, 2018.~~fiscal 2020 and 2019. These contracts are used to hedge our exposure to price fluctuations on lead we purchase for raw material components in our ammunition manufacturing process and are designated and qualify as effective cash flow hedges. The effectiveness of cash flow hedges is assessed at inception and quarterly thereafter. Hedge accounting would cease if it became probable that the ~~originally-forecasted~~originally forecasted hedged transaction will not occur. The related change in fair value of the ineffective portion of the derivative instrument would be reclassified from accumulated other comprehensive income (loss) and recognized in earnings.

The fair value of the lead forward contracts is recorded within other assets or liabilities, as appropriate, and the effective portion is reflected in accumulated other comprehensive ~~loss ("AOCL")~~income (loss) in our financial statements. The gains or losses on the lead forward contracts are recorded in inventory as the commodities are purchased and in cost of sales when the related inventory is sold. As of September ~~30, 2018,~~29, 2019, we had outstanding lead forward contracts on 179.4 million pounds of lead.

~~There were no~~The derivative gains or losses in the unaudited condensed consolidated statements of comprehensive income (loss) related to lead forward contracts during the ~~quarter~~six months ended September ~~30, 2018.~~29, 2019 were immaterial. The ~~liability~~assets related to the lead forward contracts is immaterial and is recorded as part of other current ~~liabilities.~~

assets.

4.5. Revenue Recognition

The following tables disaggregate our net sales by major category:



	Three months ended September 29, 2019						Three months ended September 30, 2018
	Outdoor Products		Shooting Sports		Total		Outdoor Products		Shooting Sports		Total
Ammunition	$	—	$	210,172	$	210,172	$	—	$	224,481	$	224,481
Firearms	—		560		560		—		49,638		49,638
Hunting and Shooting Accessories	105,951		—		105,951		114,486		—		114,486
Action Sports	83,961		—		83,961		84,728		—		84,728
Outdoor Recreation	44,372		—		44,372		53,916		—		53,916
Eyewear	—		—		—		19,336		—		19,336
Total	$	234,284	$	210,732	$	445,016	$	272,466	$	274,119	$	546,585

Geographic Region
United States	$	179,211	$	193,258	$	372,469	$	190,687	$	237,228	$	427,915
Rest of the World	55,073		17,474		72,547		81,779		36,891		118,670
Total	$	234,284	$	210,732	$	445,016	$	272,466	$	274,119	$	546,585

Quarter ended September 30, 2018 Quarter ended October 1, 2017
Outdoor Products Shooting Sports Total Outdoor Products Shooting Sports Total
Ammunition $ —
$ 224,481
$ 224,481
$ —
$ 253,847
$ 253,847
Firearms —
49,638
49,638
—
41,808
41,808
Hunting and Shooting Accessories 114,486
—
114,486
117,033
—
117,033
Action Sports 84,728
—
84,728
81,130
—
81,130
Outdoor Recreation 53,916
—
53,916
54,097
—
54,097
Eyewear 19,336
—
19,336
39,368
—
39,368
Total $ 272,466
$ 274,119
$ 546,585
$ 291,628
$ 295,655
$ 587,283

Geographic Region
United States $ 190,687
$ 237,228
$ 427,915
$ 203,662
$ 249,052
$ 452,714
Rest of the World 81,779
36,891
118,670
87,966
46,603
134,569
Total $ 272,466
$ 274,119
$ 546,585
$ 291,628
$ 295,655
$ 587,283



	Six months ended September 29, 2019						Six months ended September 30, 2018
	Outdoor Products		Shooting Sports		Total		Outdoor Products		Shooting Sports		Total
Ammunition	$	—	$	423,982	$	423,982	$	—	$	441,603	$	441,603
Firearms	—		24,577		24,577		—		90,573		90,573
Hunting and Shooting Accessories	201,811		—		201,811		217,886		—		217,886
Action Sports	151,869		—		151,869		156,436		—		156,436
Outdoor Recreation	102,551		—		102,551		117,064		—		117,064
Eyewear	—		—		—		51,859		—		51,859
Total	$	456,231	$	448,559	$	904,790	$	543,245	$	532,176	$	1,075,421

Geographic Region
United States	$	351,006	$	402,619	$	753,625	$	387,445	$	469,122	$	856,567
Rest of the World	105,225		45,940		151,165		155,800		63,054		218,854
Total	$	456,231	$	448,559	$	904,790	$	543,245	$	532,176	$	1,075,421

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

Six months ended September 30, 2018 Six months ended October 1, 2017
Outdoor Products Shooting Sports Total Outdoor Products Shooting Sports Total
Ammunition $ —
$ 441,603
$ 441,603
$ —
$ 494,773
$ 494,773
Firearms —
90,573
90,573
—
79,648
79,648
Hunting and Shooting Accessories 217,888
—
217,888
232,876
—
232,876
Action Sports 156,436
—
156,436
157,607
—
157,607
Outdoor Recreation 117,064
—
117,064
118,755
—
118,755
Eyewear 51,857
—
51,857
72,373
—
72,373
Total $ 543,245
$ 532,176
$ 1,075,421
$ 581,611
$ 574,421
$ 1,156,032

Geographic Region
United States $ 387,445
$ 469,122
$ 856,567
$ 410,314
$ 498,788
$ 909,102
Rest of the World 155,800
63,054
218,854
171,297
75,633
246,930
Total $ 543,245
$ 532,176
$ 1,075,421
$ 581,611
$ 574,421
$ 1,156,032

~~Effective April 1, 2018, we implemented ASU No. 2014-09~~ ~~Revenue from Contracts with Customers~~ ~~(Topic 606), using the modified retrospective method. The standard did not have a material effect on our financial statements.~~

The vast majority of our revenues are from the sale of consumer products in the outdoor recreation and shooting sports markets. Our customers consist primarily of retailers and distributors, as well as government, law enforcement, and military professionals. We also sell some of our products online directly to consumers. Our top customer is Walmart, representing 14% and 15% of our sales for the six months ended September 30, 2018 and October 1, 2017, respectively. No other single customer contributed 10% or more of our sales for the six months ended September 30, 2018 and October 1, 2017.

Typically, our contracts require customers to pay within 30-60 days of product delivery with a discount available to some customers for early payment. In some cases, we offer extended payment terms to customers. However, we do not consider these extended payment terms to be a significant financing component of the contract because the payment terms are less than a year.

We recognize revenue for our products at a point in time upon the transfer of control of the products to the customer, which typically occurs upon shipment and coincides with our right to payment, the transfer of legal title, and the transfer of the significant risks and rewards of ownership of the product.

In limited circumstances, our contract with a customer may have shipping terms that indicate a transfer of control of the products upon their arrival at the destination rather than upon shipment. In those cases, we recognize revenue only when the product reaches the customer destination, which may require us to estimate the timing of transfer of control based on the expected delivery date. In all cases, however, we consider our costs related to shipping and handling to be a cost of fulfilling the contract with the customer.

The total amount of revenue we recognize for the sale of our products reflects various sales adjustments for discounts, returns, refunds, allowances, rebates, and other customer incentives. These sales adjustments can vary based on market

conditions, customer preferences, timing of customer payments, volume of products sold, and timing of new product launches. These adjustments require management to make reasonable estimates of the amount we expect to receive from the customer. We estimate sales adjustments by customer or by product category on the basis of our historical experience with similar contracts with customers, adjusted as necessary to reflect current facts and circumstances and our expectations for the future. Sales taxes, firearms and ammunition excise tax and other similar taxes are excluded from revenue.

Incentives in the form of cash paid to the customer (or a reduction of a customer cash payment to us) typically are recognized as a reduction of sales unless the incentive is for a distinct benefit that we receive from the customer (e.g., advertising or marketing).

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

We provide consumer warranties against manufacturing defects on certain products within the Shooting Sports and Outdoor Products segments. Our warranty periods typically range from one year to the lifetime of the product. The costs of such product warranties are recognized upon delivery of the product at the time the sale is recorded and are estimated based on our past experience.

We pay commissions to some of our employees based on agreed-upon sales targets. We recognize the incremental costs of obtaining a contract as an expense when incurred because our sales contracts with commissions are a year or less.

~~We did not recognize any revenue in the reporting period from performance obligations satisfied (or partially satisfied) in previous reporting periods.~~

5.6. Earnings Per Share

The computation of earnings per share ("EPS") includes Basic EPS computed based upon the weighted average number of common shares outstanding for each period. Diluted EPS is computed based on the weighted average number of common shares and common equivalent shares. Common equivalent shares represent the effect of stock-based awards during each period presented, which, if exercised or earned, would have a dilutive effect on EPS.

In computing EPS for the three and six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ earnings, as reported for each respective period, is divided by the number of shares below:



	Three months ended						Six months ended
(Amounts in thousands except per share data unless otherwise indicated)	September 29, 2019			September 30, 2018			September 29, 2019			September 30, 2018
Net income (loss)	$	(11,898	)	$	(32,818	)	$	(28,513	)	$	(85,166	)
Weighted-average number of common shares outstanding:
Basic EPS shares outstanding	57,768			57,528			57,746			57,492
Dilutive effect of stock-based awards (1)	—			—			—			—
Diluted EPS shares outstanding	57,768			57,528			57,746			57,492
Earnings (loss) per common share:
Basic	$	(0.21	)	$	(0.57	)	$	(0.49	)	$	(1.48	)
Diluted	$	(0.21	)	$	(0.57	)	$	(0.49	)	$	(1.48	)

Quarter ended Six months ended
September 30, 2018 October 1, 2017 September 30, 2018 October 1, 2017
Net income (loss) $ (32,818 ) $ (114,705 ) $ (85,166 ) $ (98,053 )
Weighted-average number of common shares outstanding:
   Basic EPS shares outstanding 57,528
57,099
57,492
57,041
   Dilutive effect of stock-based awards (1) —
—
—
—
   Diluted EPS shares outstanding 57,528
57,099
57,492
57,041
Shares excluded from the calculation of diluted EPS because the option exercise/threshold price was greater than the average market price of the common shares 434
358
434
271
Earnings (loss) per common share:

Basic $ (0.57 ) $ (2.01 ) $ (1.48 ) $ (1.72 )
Diluted $ (0.57 ) $ (2.01 ) $ (1.48 ) $ (1.72 )

(1) Due to the loss from continuing operations in the ~~quarter~~three and six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ there are no common shares added to calculate dilutive EPS ~~for that quarter~~ because the effect would be antidilutive.

7. Divestitures and Held for Sale

~~6. Divestitures~~

On July 5, 2019, Vista Outdoor Inc. and one of its subsidiaries, Vista Outdoor Operations LLC, sold our Firearms business, which was part of our Shooting Sports segment and comprised our Firearms reporting unit, for a total purchase price of $170,000. We received cash proceeds net of transactions costs of $154,123 and $12,000 in the form of a sellers note due on July 5, 2024. See Notes 2, Fair Value of Financial Instruments and 8, Receivables for additional information. The proceeds from this sale were used to pay off the balance of our Term Loan and reduce our ABL Revolving Credit Facility.

During the three months ended September 29, 2019, we recognized a pretax loss on this divestiture of $433, which is included in other expense.

During the three months ended June 30, 2019 we recognized an impairment of $9,429 related to the expected loss on the sale of our Firearms business when it was held for sale.

On August 31, 2018, ~~the Company~~we completed the sale of ~~its Bollé, Serengeti, and Cébé brands (the "Eyewear Brands").~~our Eyewear brands. The selling price was $158,000, subject to customary working capital adjustments. As a result of the sale, during ~~the three and six months ended September 30, 2018, the Company~~fiscal 2019, we recorded a pretax loss of $4,925, which is included in other ~~income (expense), net~~expense, primarily due to the final allocation of goodwill and fixed assets for the Eyewear ~~Brands.~~

brands. During the ~~six~~three months ended September ~~30, 2018,~~29, 2019, we ~~recognized an impairment of $44,921 related to an expected loss on~~received the ~~sale of our held-for-sale assets related to~~final working capital adjustments from the ~~Eyewear Brands. The loss is attributable primarily to cumulative foreign currency translation~~buyer, and no material adjustments ~~for these entities that was reclassified to earnings upon their sale.~~were made.

~~Table of Contents~~8. Receivables

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

~~7. Receivables~~

Net receivables are summarized as follows:



	September 29, 2019			March 31, 2019
Trade receivables	$	373,425		$	356,035
Other receivables	4,809			7,106
Less: allowance for doubtful accounts and discounts	(15,121		)	(18,892		)
Net receivables	$	363,113		$	344,249

September 30, 2018 March 31, 2018
Trade receivables $ 428,780
$ 453,939
Other receivables 13,653
4,017
Less: allowance for doubtful accounts and discounts (18,713 ) (36,193 )
Net receivables $ 423,720
$ 421,763

~~As of September 30, 2018 and March 31, 2018,~~ Walmart represented ~~17%~~21% and 14%~~, respectively,~~ of the total trade receivables ~~balance.~~balance as of September 29, 2019 and March 31, 2019, respectively. No other customer represented more than 10% of our total trade receivables balance as of September ~~30, 2018~~29, 2019 and March 31, ~~2018.~~2019.

Note Receivable is summarized as follows:



	September 29, 2019			March 31, 2019
Principal	$	12,000		$	—
Less: unamortized discount	(4,363		)	—
Note receivable, net, included within Deferred charges and other non-current assets	$	7,637		$	—

8.9. Inventories

Net inventories consist of the following:



	September 29, 2019		March 31, 2019
Raw materials	$	94,916	$	65,240
Work in process	33,631		32,213
Finished goods	235,599		247,038
Net inventories	$	364,146	$	344,491

September 30, 2018 March 31, 2018
Raw materials $ 114,261
$ 88,588
Work in process 45,359
40,812
Finished goods 272,180
252,878
Net inventories $ 431,800
$ 382,278

We consider inventories to be long-term if they are not expected to be sold within one year. Long-term inventories are presented on the balance sheet net of reserves within deferred charges and other non-current assets and totaled ~~$14,556~~$25,091 and ~~$24,040~~$16,227 as of September ~~30, 2018~~29, 2019 and March 31, ~~2018,~~2019, respectively.

9.10. Accumulated Other Comprehensive Loss (AOCL)

The components of AOCL, net of income taxes, are as follows:



	September 29, 2019			March 31, 2019
Pension and other postretirement benefits	$	(73,203	)	$	(74,670	)
Derivatives	285			735
Cumulative translation adjustment	(5,595		)	(9,032		)
Total AOCL	$	(78,513	)	$	(82,967	)

September 30, 2018 March 31, 2018
Pension and other postretirement benefits $ (65,690 ) $ (66,656 )
Derivatives 1,440
1,904
Cumulative translation adjustment (10,028 ) (39,544 )
Total AOCL $ (74,278 ) $ (104,296 )

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

The following tables summarize the changes in the balance of AOCL, net of income tax:

Quarter ended September 30, 2018 Six months ended September 30, 2018
Derivatives Pension and other postretirement benefits Cumulative translation adjustment Total Derivatives Pension and other postretirement benefits Cumulative translation adjustment Total
Beginning balance in AOCL $ 2,104
$ (66,173 ) $ (46,690 ) $ (110,759 ) $ 1,904
$ (66,656 ) $ (39,544 ) $ (104,296 )
Net actuarial losses reclassified from AOCL ⁽¹⁾
—
543
—
543
—
1,086
—
1,086
Prior service costs reclassified from AOCL ⁽¹⁾
—
(60 ) —
(60 ) —
(120 ) —
(120 )
Net increase in fair value of derivatives (664 ) —
—
(664 ) (464 ) —
—
(464 )
Net change in cumulative translation adjustment —
—
36,662
36,662
—
—
29,516
29,516
Ending balance in AOCL $ 1,440
$ (65,690 ) $ (10,028 ) $ (74,278 ) $ 1,440
$ (65,690 ) $ (10,028 ) $ (74,278 )


~~(1)~~	~~Amounts related to our pension and other postretirement benefits that were reclassified from AOCL were recorded as a component of net periodic benefit cost for each period presented.~~


	Quarter ended October 1, 2017											Six months ended October 1, 2017											Three months ended September 29, 2019												Six months ended September 29, 2019
	Derivatives		Pension and other postretirement benefits			Cumulative translation adjustment			Total			Derivatives		Pension and other postretirement benefits			Cumulative translation adjustment			Total			Derivatives			Pension and other postretirement benefits			Cumulative translation adjustment			Total			Derivatives			Pension and other postretirement benefits			Cumulative translation adjustment			Total
Beginning balance in AOCL	$	23	$	(59,709	)	$	(47,492	)	$	(107,178	)	$	—	$	(56,929	)	$	(56,063	)	$	(112,992	)	$	(415	)	$	(73,937	)	$	(8,268	)	$	(82,620	)	$	735		$	(74,670	)	$	(9,032	)	$	(82,967	)
Net actuarial losses reclassified from AOCL⁽¹⁾	—		493			—			493			—		1,615			—			1,615			—			812			—			812			—			1,623			—			1,623
Prior service costs reclassified from AOCL⁽¹⁾	—		(49		)	—			(49		)	—		(323		)	—			(323		)	—			(78		)	—			(78		)	—			(156		)	—			(156		)
Valuation adjustment for pension and postretirement benefit plans⁽²⁾	—		3,633			—			3,633			—		5			—			5
Net increase in fair value of derivatives	—		—			—			—			23		—			—			23
Net change in fair value of derivatives																							700			—			—			700			(450		)	—			—			(450		)
Currency translation gains reclassified from AOCL⁽²⁾																							—			—			3,150			3,150			—			—			3,150			3,150
Net change in cumulative translation adjustment	—		—			7,101			7,101			—		—			15,672			15,672			—			—			(477		)	(477		)	—			—			287			287
Ending balance in AOCL	$	23	$	(55,632	)	$	(40,391	)	$	(96,000	)	$	23	$	(55,632	)	$	(40,391	)	$	(96,000	)	$	285		$	(73,203	)	$	(5,595	)	$	(78,513	)	$	285		$	(73,203	)	$	(5,595	)	$	(78,513	)


(1)	Amounts related to our pension and other postretirement benefits that were reclassified from AOCL were recorded as a component of net periodic benefit cost for each period presented.


(2)	~~See Note 13,~~ ~~Employee Benefit Plans,~~ ~~for a description~~Amounts related to the foreign currency translation gains realized upon the divestiture of ~~the pension curtailment gain recognized~~our Firearms business in the ~~quarter~~three months ended ~~July 2, 2017.~~ September 29, 2019.



	Three months ended September 30, 2018												Six months ended September 30, 2018
	Derivatives			Pension and other postretirement benefits			Cumulative translation adjustment			Total			Derivatives			Pension and other postretirement benefits			Cumulative translation adjustment			Total
Beginning balance in AOCL	$	2,104		$	(66,173	)	$	(46,690	)	$	(110,759	)	$	1,904		$	(66,656	)	$	(39,544	)	$	(104,296	)
Net actuarial losses reclassified from AOCL⁽¹⁾	—			543			—			543			—			1,086			—			1,086
Prior service costs reclassified from AOCL⁽¹⁾	—			(60		)	—			(60		)	—			(120		)	—			(120		)
Net change in fair value of derivatives	(664		)	—			—			(664		)	(464		)	—			—			(464		)
Net change in cumulative translation adjustment	—			—			36,662			36,662			—			—			29,516			29,516
Ending balance in AOCL	$	1,440		$	(65,690	)	$	(10,028	)	$	(74,278	)	$	1,440		$	(65,690	)	$	(10,028	)	$	(74,278	)


(1)	Amounts related to our pension and other postretirement benefits that were reclassified from AOCL were recorded as a component of net periodic benefit cost for each period presented.

~~10.~~11. Goodwill and Intangible Assets

~~The~~There were 0 changes in the carrying amount of goodwill ~~by segment were as follows:~~

Outdoor Products Shooting Sports Total
Balance, March 31, 2018 $ 452,627
$ 204,909
$ 657,536
Effect of foreign currency exchange rates —
(46 ) (46 )
Divestitures (3,526 ) —
(3,526 )
Balance, September 30, 2018 $ 449,101
$ 204,863
$ 653,964

during the six months ended September 29, 2019. The carrying amounts of goodwill ~~recorded within the~~for our Outdoor Products ~~segment is presented net of $545,106 of accumulated impairment losses, of which $401,706 was recorded prior to fiscal 2018~~ and ~~$143,400 was recorded in fiscal 2018. The goodwill recorded within the~~ Shooting Sports ~~segment is presented net~~segments as of ~~$41,020~~September 29, 2019 were $121,329 and $83,167, respectively, for a consolidated balance of ~~accumulated impairment losses, which were recorded in fiscal 2015. The remeasurement of goodwill and intangible assets is classified as a Level 3 fair value assessment as described in~~$204,496.

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

~~Note~~ 2, ~~Fair Value of Financial Instruments~~, ~~due to the significance of unobservable inputs developed using company-specific information.~~

Net intangible assets other than goodwill consisted of the following:



	September 29, 2019							March 31, 2019
	Gross carrying amount		Accumulated amortization			Total		Gross carrying amount		Accumulated amortization			Total
Trade names	$	48,360	$	(12,561	)	$	35,799	$	48,360	$	(10,694	)	$	37,666
Patented technology	16,684		(10,053		)	6,631		16,684		(9,604		)	7,080
Customer relationships and other	238,658		(75,727		)	162,931		238,595		(68,185		)	170,410
Total	303,702		(98,341		)	205,361		303,639		(88,483		)	215,156
Non-amortizing trade names	145,364		—			145,364		145,364		—			145,364
Net intangible assets	$	449,066	$	(98,341	)	$	350,725	$	449,003	$	(88,483	)	$	360,520

September 30, 2018 March 31, 2018
Gross
carrying
amount Accumulated
amortization Total Gross
carrying
amount Accumulated
amortization Total
Trade names $ 63,361
$ (14,543 ) $ 48,818
$ 62,657
$ (11,993 ) $ 50,664
Patented technology 16,612
(9,141 ) 7,471
16,466
(8,157 ) 8,309
Customer relationships and other 285,904
(93,493 ) 192,411
318,476
(91,093 ) 227,383
Total 365,877
(117,177 ) 248,700
397,599
(111,243 ) 286,356
Non-amortizing trade names 305,923
—
305,923
305,923
—
305,923
Net intangible assets $ 671,800
$ (117,177 ) $ 554,623
$ 703,522
$ (111,243 ) $ 592,279

The loss of a key customer for our stand up paddle boards business during the quarter ended September 30, 2018 resulted in a reduction of the projected cash flows for the stand up paddle boards business. Given the associated decrease in projected cash flows for the period, we determined that a triggering event had occurred. This analysis resulted in a $23,411 impairment charge related to customer relationship intangibles associated with the Jimmy Styks acquisition. The remeasurement of intangible assets is classified as a Level 3 fair value assessment as described in Note 2 due to the significance of unobservable inputs developed using company-specific information.

The amortizable assets in the table above are being amortized using a straight-line method over a weighted average remaining period of approximately 12.3 years. The amount of amortizing intangible assets for the Outdoor Products segment is presented net of a $23,411 impairment charge recorded in fiscal 2019 and a $61,054 impairment charge recorded in fiscal 2017. The amount of non-amortizing tradename intangible assets in the Outdoor Products segment is presented net of $8,920 and $34,230 of impairment losses recorded in fiscal 2018 and fiscal 2017, respectively; and, the amount of non-amortizing tradename intangible assets in the Shooting Sports segment is presented net of $11,200 of impairment losses recorded in fiscal 2015. Amortization expense for the ~~quarter~~three months ended September 29, 2019 and September 30, 2018 was $4,685 and ~~October 1, 2017 was~~ $6,778, ~~and $9,143,~~ respectively, and for the six months ended September 29, 2019 and September 30, 2018 was $9,782 and ~~October 1, 2017 was~~ $13,620, ~~and $18,253,~~ respectively.

As of September ~~30, 2018,~~29, 2019, we expect amortization expense related to these assets to be as follows:



Remainder of fiscal 2020	$	9,950
Fiscal 2021	19,886
Fiscal 2022	19,831
Fiscal 2023	19,715
Fiscal 2024	19,663
Thereafter	116,316
Total	$	205,361

Remainder of fiscal 2019 $ 11,847
Fiscal 2020 23,554
Fiscal 2021 23,529
Fiscal 2022 23,475
Fiscal 2023 23,360
Thereafter 142,935
Total $ 248,700

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

~~11.~~12. Other Current and Non-Current Liabilities

Other current and non-current liabilities consisted of the following:



	September 29, 2019		March 31, 2019
Other current liabilities:
Accrual for in-transit inventory	$	14,060	$	11,275
Rebate accrual	11,763		13,911
Other	84,819		71,989
Total other current liabilities	$	110,642	$	97,175

Other non-current liabilities:
Non-current portion of accrued income tax liability	$	35,615	$	34,118
Other	15,080		29,158
Total other non-current liabilities	$	50,695	$	63,276

September 30, 2018 March 31, 2018
Other current liabilities:
Accrual for in-transit inventory $ 30,281
$ 29,200
Rebate accrual 18,355
14,827
Other 77,505
53,420
Total other current liabilities $ 126,141
$ 97,447

Other non-current liabilities:
Non-current portion of accrued income tax liability $ 35,619
$ 34,716
Other 27,326
29,619
Total other non-current liabilities $ 62,945
$ 64,335

We provide consumer warranties against manufacturing defects on certain products within the Shooting Sports and Outdoor Products segments with warranty periods ranging from one year to the expected lifetime of the product. The estimated costs of such product warranties are recorded at the time the sale is recorded based upon actual past experience, our ~~past experience.~~current production environment as well as specific and identifiable warranties as applicable. The warranty liability recorded at each balance sheet date reflects the estimated liability for warranty coverage for products delivered based on historical information and current trends.

The following is a reconciliation of the changes in our product warranty liability during the periods presented:



Balance, March 31, 2019	$	8,144
Payments made	(1,549		)
Warranties issued	1,887
Other adjustments	(23		)
Changes related to pre-existing warranties	(85		)
Balance, September 29, 2019	$	8,374

Balance, March 31, 2018 $ 10,247
Payments made (1,762 )
Warranties issued 2,209
Other adjustments (2,474 )
Changes related to pre-existing warranties (167 )
Balance, September 30, 2018 $ 8,053

~~12.~~ 13. Long-term Debt

Long-term debt, including the current portion, consisted of the following:



	September 29, 2019			March 31, 2019
Credit Agreements:
ABL Revolving Credit Facility	$	215,000		$	220,000
Term Loan	—			104,509
Junior Term Loan	20,000			40,000
Total principal amount of Credit Agreements	235,000			364,509
5.875% Senior Notes	350,000			350,000
Principal amount of long-term debt	585,000			714,509
Less: unamortized deferred financing costs	(6,719		)	(10,504		)
Carrying amount of long-term debt	578,281			704,005
Less: current portion	—			(19,335		)
Carrying amount of long-term debt, excluding current portion	$	578,281		$	684,670

September 30, 2018 March 31, 2018
Credit Agreement:
Term Loan $ 400,000
$ 576,000
Revolving Credit Facility —
—
Total principal amount of Credit Agreement 400,000
576,000
5.875% Senior Notes 350,000
350,000
Principal amount of long-term debt 750,000
926,000
Less: unamortized deferred financing costs (8,414 ) (10,601 )
Carrying amount of long-term debt 741,586
915,399
Less: current portion —
(32,000 )
Carrying amount of long-term debt, excluding current portion $ 741,586
$ 883,399

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

Credit ~~Agreement~~Agreements—~~On April 1, 2016,~~In fiscal 2019, we ~~entered into an~~refinanced our Amended and Restated Credit Agreement dated April 1, 2016, by entering into the New Credit Facilities, which provide for (a) a $450,000 senior secured asset-based revolving credit facility (the ~~"Credit Agreement"~~“ABL Revolving Credit Facility”), ~~which replaced our 2014 Credit Agreement. The Credit Agreement was~~ comprised of $20,000 in first-in, last-out (“FILO”) revolving credit commitments and $430,000 in non-FILO revolving credit commitments, (b) a $109,343 senior secured asset-based term loan facility (the “Term Loan”) and (c) the $40,000 Junior Term ~~A Loan of $640,000 and a $400,000~~Loan. The amount available under the ABL Revolving Credit Facility ~~both~~is the lesser of ~~which~~the total commitment of $450,000 or a borrowing base based on percentages of eligible receivables, inventory, and cash, minus certain reserves. As of September 29, 2019, based on the borrowing base less outstanding borrowings of $215,000 and outstanding letters of credit of $26,144, the amount available to us under the ABL Revolving Credit Facility was $134,273.

The New Credit Facilities each mature on November 19, 2023 (the “Maturity Date”), subject to a customary springing maturity in respect of the 5.875% Notes due 2023. The Term Loan was subject to quarterly principal repayments of $4,834 on the first business day of each January, April, July, and October, with the remaining balance due on the Maturity Date. During the three months ended September 29, 2019, we used proceeds from the sale of our Firearms business to pay off the balance of the Term Loan, and have no future required principal payments. In addition, during the three months ended September 29, 2019, we paid down the principal balance of the Junior Term Loan by $20,000.

The FILO commitments under the ABL Revolving Credit Facility are subject to reductions of $1,667 on the first business day of each fiscal quarter beginning on April 1, ~~2021.~~2019. The balance of the FILO revolving credit commitment as of September 29, 2019 was $16,666. Any outstanding revolving loans under the ABL Revolving Credit Facility will be payable in full on the Maturity Date. During the ~~six~~three months ended September ~~30, 2018,~~29, 2019, we ~~prepaid $168,000~~used proceeds from the sale of our Firearms business to reduce our ABL Revolving Credit Facility.

Borrowings under the ABL Revolving Credit Facility bear interest at a rate equal to, in the case of (a) non-FILO revolving credit loans, either the sum of a base rate plus a margin ranging from 0.75% to 1.25% or the sum of a LIBO rate plus a margin ranging from 1.75% to 2.25%, and (b) FILO revolving credit loans, a rate that is 1.00% higher than the rate paid on the non-FILO revolving credit loans. All such rates vary based on our Average Excess Availability under the ABL Revolving Credit Facility. As of September 29, 2019, the margin under the (1) ABL Revolving Credit Facility was, in the case of (a) non-FILO revolving credit loans, 1.25% for base rate loans and 2.25% for LIBO rate loans and (b) FILO revolving credit loans, 2.25% for

base rate loans and 3.25% for LIBO rate loans, (2) Term Loan was 2.75% for base rate loans and 3.75% for LIBO rate loans, and (3) Junior Term Loan was 8.00% for base rate loans and 9.00% for LIBO rate loans. The weighted average interest rate for our borrowings under the New Credit Facilities as of September 29, 2019 was 5.03%, excluding the impact of the ~~Term A Loan. Due to these prepayments, we~~interest rate swaps that are ~~no longer required to make quarterly principal payments.~~ discussed below. We pay a commitment fee on the unused commitments under the ABL Revolving Credit Facility of 0.25% per annum.

Substantially all domestic tangible and intangible assets of Vista Outdoor and our domestic subsidiaries, as well as the tangible and intangible assets of Advanced Arrow S. de R.L. de C.V. and Hydrosport, S. de R.L. de C.V., are pledged as collateral under the New Credit Agreement. Borrowings under the Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a specified margin or the sum of a Eurodollar rate plus a specified margin. Each margin is based on our consolidated leverage ratio, as defined in the Credit Agreement, and based on the ratio in effect as of September 30, 2018, the base rate margin was 3.00% and the Eurodollar margin was 4.00%. The weighted average interest rate for our borrowings under the Credit Agreement as of September 30, 2018 was 6.24%, excluding the impact of the interest rate swaps that are discussed below. We pay a commitment fee on the unused portion of the Revolving Credit Facility based on our consolidated leverage ratio, and based on the current ratio, this fee is 0.50%.Facilities.

During fiscal 2018, we conducted a review of our outstanding debt instruments and initiated discussions with our banks regarding refinancing our Credit Agreement with asset-based revolving and term loan agreements. We believe that this change could provide us with additional flexibility to operate efficiently in a challenging market environment. Subject to debt market conditions, we anticipate finalizing the refinancing before the end of our third fiscal quarter. In order to allow us sufficient time to execute the refinancing, we received from our lenders a waiver of our Consolidated Leverage Ratio requirement for the quarter ended March 31, 2018 and, in May 2018, we executed an amendment to the Credit Agreement to amend, among other things, certain financial covenants during our fiscal 2019 (the "May 2018 Amendment"). The May 2018 Amendment provides for the following maximum ratios as defined in the Credit Agreement:

Maximum leverage ratios per the Credit Agreement
Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19
Consolidated Leverage Ratio 7.25
8.25
8.00
6.75
Consolidated Senior Secured Leverage Ratio 5.00
5.50
5.25
4.50

The May 2018 Amendment also provides that the Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) must be greater than 2.00 to 1.00 through the fiscal quarter ended December 31, 2018, and 2.50 to 1.00 for the quarter ended March 31, 2019. In addition, the May 2018 Amendment reduced the Revolving Credit Facility from $400,000 to $200,000, amended the borrowing rates under the Revolving Credit Facility and Term A Loan and the fee for unused commitments under the Revolving Credit Facility, all of which vary depending on our Consolidated Leverage Ratio, and further restricts our ability to enter into certain transactions. Debt issuance costs related to the May 2018 Amendment of approximately $2,800 will be amortized over the term of the amendment. In connection with the ~~reduction in our revolving credit facility and the prepayments~~repayment of the Term ALoan and the Junior Term Loan, unamortized debt issuance costs of ~~$3,203~~$2,916 were written off during the ~~quarter~~three months ended September ~~30, 2018 and were~~29, 2019. This expense is included in interest expense in the condensed consolidated statements of comprehensive income (loss). The remaining debt issuance costs of approximately ~~$8,000~~$6,900 are being amortized over the term of the New Credit Agreement. As of September 30, 2018, we had no borrowings against our $200,000 Revolving Credit Facility and had outstanding letters of credit of $22,692, which reduced amounts available on the Revolving Credit Facility to $177,308.Facilities.

5.875% Notes—In fiscal 2016, we issued $350,000 aggregate principal amount of 5.875% Senior Notes (the "5.875% Notes") that mature on October 1, 2023. These notes are unsecured and senior obligations. Interest on the notes is payable semi-annually in arrears on April 1 and October 1 of each year. We have the right to redeem some or all of these notes from time to time ~~on or after October 1, 2018,~~ at specified redemption prices. Debt issuance costs of approximately $4,300 are being amortized to interest expense over 8eight years, the term of the notes.

The Credit Agreement and the indenture governing the 5.875% Notes contain cross-default provisions so that non-compliance with the covenants within one debt agreement could also cause a default under the other debt agreement. As of September 30, 2018, we were in compliance with the covenants of both debt agreements. However, we cannot provide assurance that we will be able to comply with such financial covenants in the future, or complete a refinancing of our Credit Agreement mentioned above, because of various risks and uncertainties some of which may be beyond our control.

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

Rank and guarantees—The New Credit ~~Agreement~~Facilities' obligations are guaranteed on a secured basis, jointly and severally and fully and unconditionally by substantially all of our domestic subsidiaries and by Advanced Arrow S. de R.L. de C.V. and Hydrosport, S. de R.L. de C.V. Vista Outdoor (the parent company issuer) has no independent assets or operations. We own 100% of all of these guarantor subsidiaries. The 5.875% Notes are senior unsecured obligations of Vista Outdoor and will rank equally in right of payment with any future senior unsecured indebtedness and senior in right of payment to any future subordinated indebtedness of Vista Outdoor. The 5.875% Notes are fully and unconditionally guaranteed, jointly and severally, by our existing and future domestic subsidiaries that guarantee indebtedness under our New Credit ~~Agreement~~Facilities or that guarantee certain of our other indebtedness, or indebtedness of any subsidiary guarantor, in an aggregate principal amount in excess of $50,000. These guarantees are senior unsecured obligations of the applicable subsidiary guarantors. The guarantee by any subsidiary guarantor of our obligations in respect of the 5.875% Notes will be released in any of the following circumstances:

if, as a result of the sale of its capital stock, such subsidiary guarantor ceases to be a restricted ~~subsidiary;~~subsidiary

if such subsidiary guarantor is designated as an “Unrestricted Subsidiary”;

upon defeasance or satisfaction and discharge of the 5.875% ~~Notes; or~~Notes

if such subsidiary guarantor has been released from its guarantees of indebtedness under the New Credit ~~Agreement~~Facilities and all capital markets debt ~~securities.~~securities

Interest rate swaps—During ~~the quarter ended July 2, 2017,~~fiscal 2018, we entered into floating-to-fixed interest rate swap agreements in order to hedge our forecasted interest payments on our outstanding variable-rate debt. As of September ~~30, 2018,~~29, 2019, we had the following cash flow hedge interest rate ~~swaps~~swap in place:

Notional

Fair Value

Pay Fixed

Receive Floating

Maturity Date

Non-amortizing swap

100,000

1.629%

2.112%

June 2020

Notional Fair Value Pay Fixed Receive Floating Maturity Date
Non-amortizing swap $ 100,000
$ 751
1.519% 2.242% June 2019
Non-amortizing swap 100,000
1,997
1.629% 2.242% June 2020

The amount paid or received under these swaps is recorded as an adjustment to interest expense. The asset related to the swaps is recorded as part of other current assets.

Covenants

New Credit Facilities—Our New Credit Facilities impose restrictions on us, including limitations on our ability to pay cash dividends, incur debt or liens, redeem or repurchase Vista Outdoor stock, enter into transactions with affiliates, make investments, merge or consolidate with others or dispose of assets. In addition, the New Credit Facilities contain financial covenants requiring us to (a) maintain Excess Availability under the ABL Revolving Credit Facility of $45,000 at all times before all amounts owing under the Term Loan and the Junior Term Loan have been paid in full, (b) maintain a Consolidated Fixed Charge Coverage Ratio ("FCCR"), as defined below, of not less than 1.15:1.00 for any fiscal quarter beginning with the fiscal quarter ending on March 31, 2019 until the fiscal quarter ending immediately prior to the date the Term Loan and the Junior Term Loan have been paid in full, and (c) maintain a FCCR of not less than 1.00:1.00 for any fiscal quarter ending after the Term Loan and the Junior Term Loan have been paid in full if Excess Availability falls below certain levels. If we do not comply with the covenants in any of the New Credit Facilities, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding under each of the New Credit Facilities.

The FCCR is Covenant EBITDA (which includes adjustments for items such as non-recurring or extraordinary items, non-cash charges related to stock-based compensation, and intangible asset impairment charges, as well as adjustments for acquired or divested business units on a pro forma basis) less capital expenditures (subject to certain adjustments) for the past four fiscal quarters, divided by fixed charges (which includes debt principal and interest payments made since October 28, 2018, annualized; plus income tax payments and restricted payments over the past four fiscal quarters). As of September 29, 2019, our FCCR was 2.03.

The New Credit Facilities and the indenture governing the 5.875% Notes contain cross-default provisions so that noncompliance with the covenants within one debt agreement could also cause a default under the other debt agreements. As of September 29, 2019, we were in compliance with the covenants of all of the debt agreements. However, we cannot provide assurance that we will be able to comply with such financial covenants in the future because of various risks and uncertainties some of which may be beyond our control. Any failure to comply with the restrictions in the New Credit Facilities may prevent us from drawing under the ABL Revolving Credit Facility and may result in an event of default under the New Credit Facilities, which default may allow the creditors to accelerate the related indebtedness and the indebtedness under our 5.875% Notes and proceed against the collateral that secures the indebtedness. We may not have sufficient liquidity to repay the indebtedness in such circumstances.

Cash paid for interest on debt—Cash paid for interest on debt, including commitment fees and prepayment premium fees, for the ~~quarters~~three months ended September 29, 2019 and September 30, 2018 totaled $4,378 and ~~October 1, 2017 totaled~~ $7,465, ~~and $6,691,~~ respectively. Cash paid for interest on debt, including commitment fees, for the six months ended September 29, 2019 and September 30, 2018 totaled $20,032 and ~~October 1, 2017 totaled~~ $14,538, ~~and $22,888,~~ respectively.

~~13.~~14. Employee Benefit Plans

During the ~~quarter~~three months ended September ~~30, 2018,~~29, 2019, we recognized an aggregate net benefit for employee defined benefit plans of ~~$186~~$101 compared to ~~a net expense of $5,859~~$186 during the ~~quarter~~three months ended ~~October 1, 2017.~~September 30, 2018. The decrease in income was primarily due to ~~the pension curtailment gain recognized in the quarter ended July 2, 2017, as discussed below.~~expected return on plan assets.

~~For~~

During the six months ended September ~~30, 2018,~~29, 2019, we recognized an aggregate net benefit for employee defined benefit plans of ~~$370~~$204 compared to ~~a net expense of $1,507~~$370 during the six months ended October 1, 2017. The decrease in expense was primarily due to the pension curtailment gain recognized in the first quarter of fiscal 2018, as discussed below and lower service costs as a result of the curtailment, offset by the additional expense during the quarter ended October 1, 2017 as a result of benefits paid to retiring executives.

~~Employer contributions and distributions—During~~ the six months ended September 30, ~~2018, there were no~~2018. The decrease in income was primarily due to expected return on plan assets.

Employer contributions and distributions—We made required contributions to the pension trust during the three and six months ended September 29, 2019 and September 30, 2018 of $1,200 and $0, respectively. For those same periods, we made no0 contributions to our other postretirement benefit plans, and nowe made 0 distributions to retirees under the non-qualified supplemental executive retirement plan. During the six months ended October 1, 2017, we contributed $5,600 directly to the pension trust, made no contributions to our other postretirement benefit plans, and made no distributions to retirees under the non-qualified supplemental executive retirement plan.

During the remainder of fiscal ~~2019,~~2020, we ~~do not~~ expect to make additional contributions to the pension trust of $2,400. There are no expected contributions to our other postretirement benefit plans, or directly to retirees under our non-qualified supplemental executive retirement plans.

~~Pension curtailment~~—In June 2017, we announced changes to our qualified and non-qualified defined benefit pension plans. The benefits under the affected plans are determined by a cash balance formula that provides participating employees with an annual “pay credit” as a percentage of their eligible pay based on their age and eligible service. The curtailment was

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

effective July 31, 2017, with employees receiving a pro-rated pay credit for 2017 and no future pay credits beginning in 2018. However, a participating employee’s benefit will continue to grow based on annual interest credits applied to the employee’s cash balance account until commencement of the employee’s benefit. As a result of the changes, we recognized a one-time gain of $5,783 during the quarter ended July 2, 2017.

~~14.~~15. Income Taxes

Our provision for income taxes includes federal, foreign, and state income taxes. Income tax provisions for interim periods are based on the year-to-date effective tax rate for both the current ~~year~~ and ~~on estimated effective annual income tax rate for the~~ prior year.

The income tax provisions for the ~~quarters~~three months ended September 29, 2019 and September 30, 2018 ~~and October 1, 2017~~ represent effective tax rates of ~~19.8%~~(8.1)% and ~~17.9%~~19.8%, respectively. The ~~increase~~decrease in the rate from the prior year quarter is primarily caused by increased valuation allowance due to the ~~result of our recognition of a nondeductible goodwill impairment charge in~~operating loss incurred during the ~~prior year quarter.~~current quarter and interest expense on uncertain tax positions. The effective tax rate for the ~~quarter~~three months ended September 29, 2019 was lower than the statutory rate primarily because of the increased valuation allowance and interest expense on uncertain tax positions. The effective tax rate for the three months ended September 30, 2018 was lower than the statutory rate primarily because of the operating loss in the quarter, which caused the unfavorable tax adjustments to decrease the rate. ~~The effective tax rate for the quarter ended October 1, 2017 was lower than the statutory rate, primarily because of the nondeductible goodwill impairment in that quarter.~~

The income tax provisions for the six months ended September 29, 2019 and September 30, 2018 ~~and October 1, 2017~~ represent effective tax rates of ~~9.4%~~(6.1)% and ~~13.1%~~9.4%, respectively. The decrease in the rate from the prior year period is primarily caused by increased valuation allowance due to the ~~result of the effects of The Tax Cuts and Jobs Act ("Tax Legislation")~~operating loss incurred in the current period and ~~our recognition~~interest expense on uncertain tax positions offset by the larger prior period impairment of ~~nondeductible impairment charges in~~held-for-sale assets. The effective tax rate for the ~~current~~six months ended September 29, 2019 was lower than the statutory rate primarily because of the increased valuation allowance and ~~prior periods.~~interest expense on uncertain tax positions. The effective tax rate for the six months ended September 30, 2018 was lower than the statutory rate primarily because of the loss in the ~~current~~prior period, which caused unfavorable tax adjustments to decrease the rate. ~~The effective tax rate for the six months ended October 1, 2017 was lower than the statutory rate primarily because of the impact of the nondeductible goodwill impairment in that period.~~

On December 22, 2017, Tax Legislation was enacted in the United States. The Tax Legislation significantly revises the corporate income tax by, among other things, lowering corporate income tax rates, limiting various deductions, repealing the domestic manufacturing deduction, implementing a territorial tax system, and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries.

We estimate the impact of the Tax Legislation, based on currently available information and interpretations of the law, to be a benefit to us of approximately $49 million, the majority of which was included in our prior period tax benefit. The majority of the tax benefit was due to remeasurement of the U.S. deferred tax liabilities at lower enacted corporate tax rates, which did not have a cash impact on the prior period. The actual impact of the Tax Legislation may differ from this estimate, possibly materially, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued, and actions we may take as a result of the Tax Legislation.

On February 9, 2015, we entered into a Tax Matters Agreement with Orbital ATK that governs the respective rights, responsibilities and obligations of Vista Outdoor and Orbital ATK following the distribution of all of the shares of our common stock on a pro rata basis to the holders of Alliant Techsystems Inc. common stock (the “Spin-Off”) with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. We have joint and several liability with Orbital ATK to the IRS for the consolidated U.S. federal income taxes of the Orbital ATK consolidated group relating to the taxable periods in which we were part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which we bear responsibility, and Orbital ATK agrees to indemnify us against any amounts for which we are not responsible. The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the Spin-Off is determined not to be tax-free. Though valid between the parties, the Tax Matters Agreement is not binding on the IRS.

The allocation of tax liabilities for the period from April 1, 2014 through the date of the Spin-Off was settled on June 15, 2018. Orbital ATK paid Vista Outdoor $13,047 to settle this matter, which was reflected as an adjustment to the distribution from Vista Outdoor to Orbital ATK at the time of the Spin-Off.

Prior to the Spin-Off, Orbital ATK or one of its subsidiaries filed income tax returns in the U.S. federal and various U.S. state jurisdictions that included Vista Outdoor. In addition, certain of our subsidiaries filed income tax returns in foreign jurisdictions. Since the Spin-Off, we file income tax returns in the U.S. federal, foreign and various U.S. state jurisdictions.

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~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

With a few exceptions, Orbital ATK and its subsidiaries and Vista are no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities prior to ~~2011.~~2012. The IRS has completed the audits of Orbital ATK through fiscal 2014 and is currently auditing Orbital ATK's tax return for fiscal 2015. The IRS has also completed the audit of our tax return for the period that began after the Spin-Off (February 9, 2015) and ended on March 31, 2015. We believe appropriate provisions for all outstanding issues relating to our portion of these returns have been made for all remaining open years in all jurisdictions.

Income taxes paid, net of refunds, totaled ~~$3,026~~$(139) and ~~$2,417~~$3,026 for the six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively.

Although the timing and outcome of income tax audit settlements are uncertain, it is reasonably possible that a ~~$4,575~~$8,922 reduction of the uncertain tax benefits will occur in the next 12 months. The settlement of these unrecognized tax benefits could result in earnings from $0 to ~~$3,884.~~$7,816.

~~15.~~16. Contingencies

Litigation—From time to time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. We do not consider any of such proceedings that are currently pending, individually or in the aggregate to be material to our business or likely to result in a material adverse effect on our operating results, financial condition, or cash flows.

Environmental liabilities—Our operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those governing the discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. We are obligated to conduct investigation and/or remediation activities at certain sites that we own or operate or formerly owned or operated.

WeCertain of our former subsidiaries have been identified as a potentially responsible ~~party~~parties (“PRP”), along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, wethose former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our operating results, financial condition, or cash flows. We have recorded a liability for environmental remediation of ~~$736~~$712 and ~~$731~~$729 as of September ~~30, 2018~~29, 2019 and March 31, ~~2018,~~2019, respectively.

We could incur substantial additional costs, including cleanup costs, resource restoration, fines, and penalties or third-party property damage or personal injury claims, as a result of violations or liabilities under environmental laws or non-compliance with environmental permits. While environmental laws and regulations have not had a material adverse effect on our operating results, financial condition, or cash flows in the past, and we have environmental management programs in place to mitigate these risks, it is difficult to predict whether they will have a material impact in the future.

~~16.~~ 17. Condensed Consolidating Financial Statements

In accordance with the provisions of the 5.875% Notes, the outstanding notes are guaranteed on an unsecured basis, jointly and severally and fully and unconditionally, by substantially all of Vista Outdoor domestic subsidiaries and by Advanced Arrow S. de R.L. de C.V. and Hydrosport, S. de R.L. de C.V. The parent company has no independent assets or operations. All of these guarantor subsidiaries are 100% owned by Vista Outdoor and any subsidiaries of the parent company other than the subsidiary guarantors are minor. These guarantees are senior or senior subordinated obligations, as applicable, of the applicable subsidiary guarantors.

~~17.~~18. Operating Segment Information

We operate our business structure within ~~two~~2 operating segments, which are defined based on the reporting and review process used by the chief operating decision maker, our Chief Executive Officer. Management reviews the operating segments based on net sales and gross profit. Certain significant selling and general and administrative expenses are not allocated to the segments. ~~In addition, certain significant asset balances are not readily identifiable with individual segments and therefore cannot be allocated.~~ Each segment is described below:

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

goggles, and accessories for cycling, snow sports, action sports, and powersports. Archery/hunting accessories include high-performance hunting arrows, game calls, hunting blinds, game cameras, and ~~game cameras. Camping products include our outdoor cooking solutions.~~decoys. Golf products include laser rangefinders. Hydration products include hydration packs and water bottles. Optics products include binoculars, riflescopes, and telescopes. Shooting accessories products include reloading equipment, clay targets, and premium gun care products. Tactical products include holsters, duty gear, bags and packs. ~~Water sports products include stand up paddle boards.~~

Shooting Sports generated approximately ~~49%~~50% of our external sales in the six months ended September ~~30, 2018.~~29, 2019. Shooting Sports product lines include centerfire ammunition, rimfire ammunition, shotshell ammunition, reloading components, and firearms. Our Firearms business was divested early in the quarter.

Sales to Walmart represented ~~14%~~15% and ~~15%~~14% of our sales in the six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively. No other single customer contributed 10% or more of our sales in the six months ended September 29, 2019 and September 30, ~~2018 and October 1, 2017.~~2018.

The following summarizes our results by segment:



	Three months ended					Six months ended
	September 29, 2019		September 30, 2018			September 29, 2019		September 30, 2018
Sales to external customers:
Outdoor Products	$	234,284	$	272,466		$	456,231	$	543,245
Shooting Sports	210,732		274,119			448,559		532,176
Total sales to external customers	$	445,016	$	546,585		$	904,790	$	1,075,421

Gross Profit
Outdoor Products	$	61,489	$	61,666		$	117,155	$	132,616
Shooting Sports	28,775		47,093			68,187		89,482
Corporate	—		(2		)	—		(3		)
Total gross profit	$	90,264	$	108,757		$	185,342	$	222,095

Quarter ended Six months ended
September 30, 2018 October 1, 2017 September 30, 2018 October 1, 2017
Sales to external customers:
Outdoor Products $ 272,466
$ 291,628
$ 543,245
$ 581,611
Shooting Sports 274,119
295,655
532,176
574,421
Total sales to external customers $ 546,585
$ 587,283
$ 1,075,421
$ 1,156,032

Gross Profit
Outdoor Products $ 61,666
$ 75,608
$ 132,616
$ 152,118
Shooting Sports 47,093
63,341
89,482
133,659
Corporate (2 ) 28
(3 ) (242 )
Total gross profit $ 108,757
$ 138,977
$ 222,095
$ 285,535

The sales above exclude intercompany sales between Outdoor Products and Shooting Sports of ~~$2,158~~$211 and ~~$1,391~~$2,158 for the ~~quarters~~three months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively.

The sales above exclude intercompany sales between Outdoor Products and Shooting Sports of ~~$3,780~~$1,133 and ~~$2,252~~$3,780 for the six months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively.

~~Table of Contents~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)~~

~~(Amounts in thousands except share and per share data unless otherwise indicated)~~

~~18. Subsequent Events~~

~~There were no subsequent events for the quarter ended September 30, 2018.~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar amounts in thousands unless otherwise indicated)

Forward-Looking Information is Subject to Risk and Uncertainty

Some of the statements made and information contained in this report, excluding historical information, are "forward-looking statements," including those that discuss, among other things: our plans, objectives, expectations, intentions, strategies, goals, outlook or other non-historical matters; projections with respect to future revenues, income, earnings per share or other financial measures for Vista Outdoor; and the assumptions that underlie these matters. The words "believe," "expect," "anticipate," "intend," "aim," "should" and similar expressions are intended to identify such forward-looking statements. To the extent that any such information is forward-looking, it is intended to fit within the safe harbor for forward-looking information provided by the Private Securities Litigation Reform Act of 1995. Numerous risks, uncertainties and other factors could cause our actual results to differ materially from expectations described in such forward-looking statements, including the following:

general economic and business conditions in the United States and our markets outside the United States, including conditions affecting employment levels, consumer confidence and spending, conditions in the retail environment, and other economic conditions affecting demand for our products and the financial health of our customers;

our ability to attract and retain key personnel and maintain and grow our relationships with customers, suppliers, and other business partners, including our ability to obtain acceptable third-party licenses;

our ability to adapt our products to changes in technology, the marketplace and customer preferences, including our ability to respond to shifting preferences of the end consumer from brick and mortar retail to online retail;

our ability to maintain and enhance brand recognition and reputation;

others' use of social media to disseminate negative commentary about us and boycotts;

reductions in or unexpected changes in or our inability to accurately forecast demand for ammunition, ~~firearms or~~ accessories, or other outdoor sports and recreation products;

risks associated with our sales to significant retail customers, including unexpected cancellations, delays, and other changes to purchase orders;

supplier capacity constraints, production disruptions or quality or price issues affecting our operating costs;

our competitive environment;

risks associated with ~~compliance and~~ diversification into new international and commercial ~~markets;~~markets, including regulatory compliance;

changes in the current tariff structures;

the supply, availability and costs of raw materials and components;

increases in commodity, energy, and production costs;

changes in laws, rules and regulations relating to our business, such as federal and state ~~firearms and~~ ammunition regulations;

our ability to realize expected benefits from acquisitions and integrate acquired businesses;

our ability to execute our strategic transformation plan, including our ability to realize expected benefits from the divestiture of non-core brands and profitability improvement initiatives;

our ability to take advantage of growth opportunities in international and commercial markets;

foreign currency exchange rates and fluctuations in those rates;

the outcome of contingencies, including with respect to litigation and other proceedings relating to intellectual property, product liability, warranty liability, personal injury, and environmental remediation;

risks associated with cybersecurity and other industrial and physical security threats;

capital market volatility and the availability of financing;

changes to accounting standards or policies; and

changes in tax rules or pronouncements.

You are cautioned not to place undue reliance on any forward-looking statements we make. A more detailed description of risk factors that may affect our operating results can be found in Part 1, Item 1A, Risk Factors, of our Annual Report on Form 10-K for fiscal ~~2018~~2019 and in the filings we make with the SEC from time to time. We undertake no obligation to update any forward-looking statements, except as otherwise required by law.

~~Executive Summary~~Business Overview

We serve the outdoor sports and recreation markets through a diverse portfolio of ~~over 45~~nearly 40 well-recognized brands that provide consumers with a wide range of performance-driven, high-quality and innovative products, including sporting ammunition, ~~and firearms,~~ golf rangefinders, hydration products, outdoor accessories, outdoor cooking solutions, ~~outdoor sports optics,~~and protection for certain action ~~sports, and stand up paddle boards.~~sports. We serve a broad range of end consumers, including outdoor enthusiasts, hunters and recreational shooters, athletes, as well as law enforcement and military professionals. Our products are sold through a wide variety of mass, specialty and independent retailers and distributors, such as Academy, Amazon, Bass Pro Shops/Cabela's, Big Rock Sports, ~~Dick's Sporting Goods,~~ Sports South, Sportsman's Warehouse, Target, ~~United Sporting Companies,~~ and Walmart. We also sell certain of our products directly to consumers through the relevant brand's website. We have a scalable, integrated portfolio of brands that allows us to leverage our deep customer knowledge, product development and innovation, supply chain and distribution, and sales and marketing functions across product categories to better serve our retail partners and end ~~users.~~consumer.

~~As of September 30, 2018, we operated in~~Organizational Structure

We conduct our operations through two ~~business segments. These~~ operating segments which are defined based on the reporting and review process used by the chief operating decision maker, our Chief Executive Officer. As of September ~~30, 2018,~~29, 2019, our two operating segments ~~were:~~were Outdoor Products and Shooting Sports:

Outdoor Products generated approximately ~~51%~~50% of our external sales in the six months ended September ~~30, 2018.~~29, 2019. The Outdoor Products product lines are action sports, archery/hunting accessories, ~~camping, sport protection products,~~outdoor cooking, golf, hydration products, optics, shooting accessories, and tactical ~~products and water sports.~~products. Action sports includes helmets, goggles, and accessories for cycling, snow sports, action sports and powersports. Archery/hunting accessories include high-performance hunting arrows, game calls, hunting blinds, game cameras, and ~~game cameras. Camping products include our outdoor cooking solutions.~~decoys. Golf products include laser rangefinders. Hydration products include hydration packs and water bottles. Optics products include binoculars, riflescopes and telescopes. Shooting accessories products include reloading equipment, clay targets, and premium gun care products. Tactical products include holsters, duty gear, bags and packs. ~~Water sports products include stand up paddle boards.~~

~~On May 1, 2018, we announced our~~Business Strategy

Our current strategic business ~~transformation~~ plan is designed to allow us to focus our resources on pursuing growth in our ~~core product categories. The plan is a result of a comprehensive evaluation of the~~market-leading brands ~~within our current portfolio based on their ability to serve~~by serving our target ~~consumer; create cross-selling~~consumer with new and ~~other similar synergy opportunities; achieve market leading positions~~innovative products; leveraging our channel relationships and leadership economics; and demonstrate omni-channel distribution capabilities. As a result of this evaluation, 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.

We are exploring strategic options for assets that fall outside of these core product categories, including our Savage and Stevens firearms, Jimmy Styks paddle boards, and Sports Protection brands (e.g. Bell, Giro, and Blackburn). We expect that the ~~execution~~reputation of our ~~strategic plan will reduce~~brands with our ~~leverage, improve~~end consumers; expanding our ~~financial flexibility~~e-commerce capabilities; and the efficiency of our capital structure, and provide additional resources to reinvest in core product categories, both organically and through acquisition. On August 31, 2018, the Company completed the sale of its Bollé, Serengeti, and Cébé brands (the "Eyewear Brands").continuously improving operations.

Financial Highlights and Notable Events

Certain notable events or activities affecting our second quarter fiscal ~~2019~~2020 financial results included the following:

~~Financial highlights for the quarter ended September 30, 2018~~

Quarterly sales were ~~$546,585~~$445,016 and ~~$587,283~~$546,585 for the ~~quarters~~three months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively. The decrease was ~~driven by lower~~largely due to the sale of our Eyewear brands and Firearm business which together accounted for approximately $68,414 of the decrease. Outdoor Products sales decreased $38,182 and Shooting Sports sales ~~of $21,536 and by lower Outdoor Products sales of $19,162~~decreased $63,387 for the reasons described in the Results of Operations ~~section.~~section below.

Gross profit was ~~$108,757~~$90,264 and ~~$138,977~~$108,757 for the ~~quarters~~three months ended September 29, 2019 and September 30, 2018, ~~and October 1, 2017,~~ respectively. The decrease in gross profit was primarily due to the sale of our Eyewear brands and Firearm business which together accounted for approximately $18,955 of the ~~Eyewear Brands~~decrease and by ~~unfavorable commodity pricing~~lower sales volumes described in the Results of Operations section below. Outdoor Products gross profit decreased $177 and Shooting Sports ~~segment.~~gross profit decreased $18,318 for the reasons described in the Results of Operations section below.

Income (loss) before interest, income taxes, and other was $1,740 and $(19,146) for the three months ended September 29, 2019 and September 30, 2018, respectively. The increase was due to reductions in operating expenses for the reasons described in the Results of Operations section below.


•	On July 5, 2019, we divested our Firearms business, which was part of our Shooting Sports segment and comprised our Firearms reporting unit, for a total purchase price of $170,000,000. See Note 7. Divestitures and Held for Sale, for additional information.

During the three months ended September 29, 2019, we used proceeds from the sale of our Firearms business to pay off the balance of our Term Loan and reduce our ABL Revolving Credit Facility. In addition, during the three months ended September 29, 2019, we paid down the principal balance of our Junior Term Loan by $20,000. The ~~Eyewear Brands were sold during~~remaining principal balance on the Junior Term Loan was fully paid subsequent to the quarter ended September ~~30, 2018, for $158,000, subject to customary working capital adjustments. We used $143,000 of the proceeds to pay down long-term debt.~~29, 2019 using cash generated from operations and advances from our ABL Revolving Credit Facility.

~~A $23,411 pre-tax impairment charge to identifiable intangible assets was recorded during the quarter.~~

The increase in the current quarter's tax rate to 19.8% from 17.9% in the quarter ended October 1, 2017, was primarily the result of our recognition of a nondeductible goodwill impairment charge in the prior year quarter.

Outlook

Outdoor Recreation Industry

The outdoor recreation and accessories industry currently represents ~~a large and growing focus area~~approximately 50% of our business. During the past and current fiscal years, we have seen a challenging retail environment as evidenced by recent bankruptcies and the consolidation of certain of our customers. This challenging retail environment has been driven by a shift in consumer preferences to online platforms. We believe the fragmented naturesales. Examples of the ~~outdoor recreation industry, combined with retail~~sports and ~~consumer overlap with our existing businesses, present attractive growth opportunities. We hold a strong competitive position~~activities we target include archery, camping, cycling, golf, hiking, hunting, snow skiing, target shooting, and wildlife watching. Our consumers often participate in ~~the marketplace, and we intend to further differentiate our brands through focused R&D and marketing investments including increased use~~more than one of ~~social media and revamping our brand websites as we strive to become our customers’ brand of choice in their respective outdoor recreation~~these activities. Growing market share will continue to be a focus as we execute our strategy of market segmentation by brand and channel. We anticipate introducing new products to accomplish this goal. We are continuing to expand our e-commerce presence to capitalize on the ongoing shift by consumers to online shopping and are leveraging the experience from our acquisitions to drive growth across business-to-business, dot com, dropship, and direct-to-consumer channels.

Shooting Sports Industry

Shooting sports ~~related~~ products currently represent approximately ~~half~~50% of our sales. ~~We design, develop, manufacture,~~Examples of the shooting sports activities we target include target shooting, hunting, as well as ammunition for local law enforcement, the U.S. government and source ammunition, long guns and related equipment products. Among these categories, we derive the largest portion of our sales from ammunition, which is a consumable, repeat purchase product. During late fiscal 2015 and continuing into fiscal 2016, firearms and ammunition sales experienced an increase as more individuals entered the market and certain public and political events provided focus on the industry. During the later months of fiscal 2017 and continuing into fiscal 2019, we believe the market softened primarily due to the current political environment.international markets. The shooting sports industry historically has been a cyclical business ~~with previous market declines lasting 12–24 months. The~~and can be impacted by the current political climate, the timing of national elections, and other market factors may cause the current market downturn to last longer than prior cycles. In addition, commodity prices have risen over recent years increasing input costs of our products. Given these market conditions, we are taking actions to work with vendors to evaluate our cost structure. We believe we are well positioned to succeed in a difficult shooting sports market, given our scale and global operating platform, which we believe is difficult to replicate in the highly regulated and capital-intensive ammunition manufacturing sector.factors.

~~Critical Accounting Estimates~~

There have been no material changes to the Company's critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for fiscal 2018, except for the following:

~~The Company adopted the new accounting standard on revenue recognition, Accounting Standards Update ("ASU") No. 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(Topic 606), which became effective on April 1, 2018. The adoption of this new standard did not have a material impact on our consolidated financial statements.~~

~~In August 2017, the FASB issued Accounting Standards Update ("ASU") 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.~~ ASU 2017-12 amends existing guidance to better align an entity’s risk management activities and financial reporting for hedging relationships. ASU 2017-12 also expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The standard allows for early adoption. As of September

~~30, 2018, we elected to early adopt this standard, which did not have a material impact on our consolidated financial statements.~~

Results of Operations

The following ~~information~~is a discussion and analysis of the financial measures that management believes are the key performance indicators for managing and assessing the results of Vista Outdoor Inc.'s consolidated financial condition and results of operations. The discussion should be read in conjunction with ~~our~~the accompanying unaudited condensed consolidated financial ~~statements. The key performance indicators that our management uses in managing the business are sales, gross profit,~~statements and ~~cash flows.~~

~~Segment total net sales, cost of sales, and gross profit exclude intersegment sales and profit.~~

~~Sales~~notes thereto.

Sales to Walmart represented ~~14%~~15% and ~~15%~~14% of our sales in the six months ended September 29, 2019 and September 30, 2018, respectively. As a result of Walmart's announcement on September 3, 2019, we expect reduced ammunition and ~~October 1, 2017, respectively.~~accessories sales to Walmart in the future. No other single customer contributed 10% or more of our sales in the six months ended September 29, 2019 and September 30, ~~2018 and October 1, 2017.~~2018.

~~The following is a summary of each operating segment's sales:~~Net Sales


	Quarter ended									Six months ended									Three months ended									Six months ended
	September 30, 2018		October 1, 2017		$ Change			% Change		September 30, 2018		October 1, 2017		$ Change			% Change		September 29, 2019		September 30, 2018		$ Change			% Change		September 29, 2019		September 30, 2018		$ Change			% Change
Outdoor Products	$	272,466	$	291,628	$	(19,162	)	(6.6	)%	$	543,245	$	581,611	$	(38,366	)	(6.6	)%	$	234,284	$	272,466	$	(38,182	)	(14.0	)%	$	456,231	$	543,245	$	(87,014	)	(16.0	)%
Shooting Sports	274,119		295,655		(21,536		)	(7.3	)%	532,176		574,421		(42,245		)	(7.4	)%	210,732		274,119		(63,387		)	(23.1	)%	448,559		532,176		(83,617		)	(15.7	)%
Total external sales	$	546,585	$	587,283	$	(40,698	)	(6.9	)%	$	1,075,421	$	1,156,032	$	(80,611	)	(7.0	)%
Total net sales																			$	445,016	$	546,585	$	(101,569	)	(18.6	)%	$	904,790	$	1,075,421	$	(170,631	)	(15.9	)%

The total change in net sales was driven by the changes within the operating segments as described below.

~~Quarter Ended~~

Three months ended

Outdoor Products—The decrease in sales was primarily due to ~~lower sales from~~ the ~~Eyewear business in the current quarter compared to the prior year quarter, due to our~~ sale of our Eyewear brands, which accounted for $19,336 of the ~~Eyewear Brands in the current quarter.~~decrease. In addition, ~~our hydration solutions~~most of the businesses ~~had lower sales as a result of~~were impacted by lower demand driven by increased tariffs and ~~market softness that were~~increased competition, which was offset partially ~~offset~~ by ~~higher~~increased sales in our ~~outdoor cooking business as a result of increased demand.~~tactical products.

Shooting Sports—The decrease in sales was caused primarily by the timing of international contracts for centerfire ammunition and lower demand in the market for rimfire ammunition. The decrease was partially offset by increased firearms sales due to new product launches.

~~Six Months Ended~~

~~Outdoor Products~~—The decrease in sales was primarily due to the sale of our Firearms business which accounted for $49,078 of the decrease and lower ~~sales from the Eyewear business~~demand in the current period compared to the prior period, due to our sale of the Eyewear Brands in the current period. In addition, our hunting and shooting accessories and hydration solutions businesses had lower sales as a result of lower demand and market ~~softness. These decreases were~~rimfire ammunition, which was partially offset by ~~higher sales~~increased demand in ~~our outdoor cooking business as a result of increased customer demand.~~the market for centerfire ammunition.

~~Shooting Sports~~Six months ended

Outdoor Products—The decrease in sales was ~~caused~~ primarily due to the sale of our Eyewear brands, which accounted for $51,859 of the decrease. In addition, most of the businesses were impacted by lower demand driven by increased tariffs and increased competition, which was offset partially by increased sales in our tactical products.

Shooting Sports—The decrease in sales was primarily due to the sale of our Firearms business and lower demand in the market for firearms which together accounted for approximately $65,996 of the decrease. Additionally, there was a decrease in demand for rimfire ammunition ~~and the timing of international contracts for centerfire ammunition. The decrease~~which was partially offset by increased ~~firearms sales due to new product launches.~~demand in the market for centerfire ammunition.

~~Cost of Sales and~~ Gross Profit

~~The following is a summary of each operating segment's cost of sales and gross profit:~~

Quarter ended Six months ended
Cost of sales September 30, 2018 October 1, 2017 $ Change % Change September 30, 2018 October 1, 2017 $ Change % Change
Outdoor Products $ 210,800
$ 216,020
$ (5,220 ) (2.4 )% $ 410,629
$ 429,493
$ (18,864 ) (4.4 )%
Shooting Sports 227,026
232,314
(5,288 ) (2.3 )% 442,694
440,762
1,932
0.4 %
Corporate 2
(28 ) 30
107.1 % 3
242
(239 ) (98.8 )%
Total cost of sales $ 437,828
$ 448,306
$ (10,478 ) (2.3 )% $ 853,326
$ 870,497
$ (17,171 ) (2.0 )%


	Quarter ended										Six months ended											Three months ended										Six months ended
Gross profit	September 30, 2018			October 1, 2017		$ Change			% Change		September 30, 2018			October 1, 2017			$ Change			% Change
																						September 29, 2019		September 30, 2018			$ Change			% Change		September 29, 2019		September 30, 2018			$ Change			% Change
Outdoor Products	$	61,666		$	75,608	$	(13,942	)	(18.4	)%	$	132,616		$	152,118		$	(19,502	)	(12.8	)%	$	61,489	$	61,666		$	(177	)	(0.3	)%	$	117,155	$	132,616		$	(15,461	)	(11.7	)%
Shooting Sports	47,093			63,341		(16,248		)	(25.7	)%	89,482			133,659			(44,177		)	(33.1	)%	28,775		47,093			(18,318		)	(38.9	)%	68,187		89,482			(21,295		)	(23.8	)%
Corporate	(2		)	28		(30		)	(107.1	)%	(3		)	(242		)	239			98.8	%	—		(2		)	2			100.0	%	—		(3		)	3			100.0	%
Total gross profit	$	108,757		$	138,977	$	(30,220	)	(21.7	)%	$	222,095		$	285,535		$	(63,440	)	(22.2	)%	$	90,264	$	108,757		$	(18,493	)	(17.0	)%	$	185,342	$	222,095		$	(36,753	)	(16.5	)%

The total change in ~~cost of sales and~~ gross profit was driven by the changes within the operating segments as described below.

~~Quarter Ended~~

Three months ended

Outdoor Products—The decrease in gross profit was ~~driven~~caused primarily by the sale of our Eyewear brands which accounted for $7,426 of the ~~Eyewear Brands in~~decrease and lower sales volumes as described above. These decreases were almost entirelyoffset with savings driven by operating efficiencies, benefits from restructuring activities and improved pricing strategies compared to the ~~current quarter, as well as incremental transportation costs.~~prior year quarter.

Shooting Sports—The decrease in gross profit was primarily due to ~~unfavorable commodity costs, lower pricing, and~~the sale of our Firearms business which accounted for $11,529 of the decrease, lower sales volume as described ~~above.~~

~~Corporate—The change in corporate gross profit was not material.~~above and increased promotional activity compared to the prior year quarter.

Six ~~Months Ended~~months ended

Outdoor Products—The decrease in gross profit was ~~driven~~caused primarily by the sale of our Eyewear brands which accounted for $22,208 of the ~~Eyewear Brands in the current period~~decrease and lower sales ~~volume discussed~~volumes as described above. These decreases were partially offset by savings driven by operating efficiencies, benefits from restructuring activities, improved pricing strategies and lower business transformation consulting costs compared to the prior year to date.

Shooting Sports—The decrease in gross profit was primarily due to the sale of our Firearms business and lower ~~pricing, unfavorable commodity costs, and~~demand in the market for firearms which together accounted for $15,174 of the decrease. Additional decreases resulted from lower sales volume as described ~~above.~~

~~Corporate—The change in corporate gross profit was not material.~~above and increased promotional activity, partially offset by decreased raw material costs and lower business transformation consulting costs compared to the prior year to date.

Operating Expenses


	Quarter ended											Six months ended											Three months ended											Six months ended
	September 30, 2018		As a % of Sales		October 1, 2017		As a % of Sales		$ Change			September 30, 2018		As a % of Sales		October 1, 2017		As a % of Sales		$ Change			September 29, 2019		As a % of Sales		September 30, 2018		As a % of Sales		$ Change			September 29, 2019		As a % of Sales		September 30, 2018		As a % of Sales		$ Change
Research and development	$	7,210	1.3	%	$	7,447	1.3	%	$	(237	)	$	14,178	1.3	%	$	15,238	1.3	%	$	(1,060	)	$	5,553	1.2	%	$	7,210	1.3	%	$	(1,657	)	$	12,047	1.3	%	$	14,178	1.3	%	$	(2,131	)
Selling, general, and administrative	97,282		17.8	%	106,386		18.1	%	(9,104		)	198,336		18.4	%	205,812		17.8	%	(7,476		)	82,971		18.6	%	97,282		17.8	%	(14,311		)	166,880		18.4	%	198,336		18.4	%	(31,456		)
Goodwill and intangibles impairment	23,411		4.3	%	152,320		25.9	%	(128,909		)	23,411		2.2	%	152,320		13.2	%	(128,909		)
Impairment of held-for-sale assets																							—		—	%	—		—	%	—			9,429		1.0	%	44,921		4.2	%	(35,492		)
Intangibles impairment																							—		—	%	23,411		4.3	%	(23,411		)	$	—	—	%	23,411		2.2	%	(23,411		)
Total operating expenses	$	127,903	23.4	%	$	266,153	45.3	%	$	(138,250	)	$	235,925	21.9	%	$	373,370	32.3	%	$	(137,445	)	$	88,524	19.8	%	$	127,903	23.4	%	$	(39,379	)	$	188,356	20.7	%	$	280,846	26.1	%	$	(92,490	)

~~Quarter Ended~~

Three months ended

Operating expenses decreased ~~$138,250~~$39,379 primarily due to ~~an impairment~~a decrease of ~~goodwill~~approximately $12,143 from the sale of our Eyewear brands and ~~intangible assets~~Firearms business and a decrease of $23,411 in intangibles impairment. Also contributing to the ~~prior~~decrease were lower selling costs due to decreased sales as described above and decreased promotion costs year period and cost cutting initiatives in the current period. The decrease was partially offset by an intangible asset impairment and increased spending on professional services related to our strategic business transformation plan in the current quarter.

over year.

Six ~~Months Ended~~months ended

Operating expenses decreased ~~$137,445~~$92,490 primarily due to ~~an impairment of goodwill and intangible assets~~a decrease in ~~the prior year and cost cutting initiatives in the current period. The decrease was partially offset by an~~ impairment of held-for-sale assets of $35,492, a decrease of approximately $20,854 due to the sale of our Eyewear brands and ~~intangible assets~~Firearms business and a decrease of $23,411 in ~~the current~~intangibles impairment. Additional savings were driven by benefits from restructuring activities realized in this year, ~~as well as increased spending on professional services related to our strategic~~reduced business transformation ~~plan.~~consulting costs year over year, lower selling costs due to decreased sales as described above and decreased promotion costs year over year.

Net Interest Expense

Quarter ended Six months ended
September 30, 2018 October 1, 2017 $ Change % Change September 30, 2018 October 1, 2017 $ Change % Change
Interest Expense $ 16,865
$ 12,569
$ 4,296
34.2 % $ 30,337
$ 24,962
$ 5,375
21.5 %



	Three months ended									Six months ended
	September 29, 2019		September 30, 2018		$ Change			% Change		September 29, 2019		September 30, 2018		$ Change			% Change
Interest expense, net	$	12,314	$	16,865	$	(4,551	)	(27.0	)%	$	23,438	$	30,337	$	(6,899	)	(22.7	)%

~~Quarter Ended~~Three months ended

The ~~increase~~decrease in interest expense was due to ~~the write off of debt issuance costs and~~ a ~~higher average interest rate in the current period, partially offset by a decrease~~reduction in our average principal debt ~~balance.~~balance and decreased debt amortization costs.

Six ~~Months Ended~~months ended

Income Tax Provision

See Note 15, Income Taxes, to the unaudited condensed consolidated financial statements in Item 1 of Part I of this report for information regarding income taxes.

Quarter ended Six months ended
September 30, 2018 Effective
Rate October 1, 2017 Effective
Rate $ Change September 30, 2018 Effective
Rate October 1, 2017 Effective
Rate $ Change
Income taxes $ (8,118 ) 19.8 % $ (25,040 ) 17.9 % $ 16,922
$ (8,847 ) 9.4 % $ (14,744 ) 13.1 % $ 5,897



	Three months ended											Six months ended
	September 29, 2019		Effective Rate		September 30, 2018			Effective Rate		$ Change		September 29, 2019		Effective Rate		September 30, 2018			Effective Rate		$ Change
Income tax provision (benefit)	$	891	(8.1	)%	$	(8,118	)	19.8	%	$	9,009	$	1,628	(6.1	)%	$	(8,847	)	9.4	%	$	10,475

Our provision for income taxes includes U.S. federal, foreign, and state income taxes. Income tax provisions for interim periods are based on the year-to-date effective tax rate for the current year and on estimated effective annual income tax rate for the prior year.

~~Quarter Ended~~Three months ended

The ~~income tax provisions for the quarters ended September 30, 2018 and October 1, 2017 represent effective tax rates of 19.8% and 17.9%, respectively. The increase~~decrease in the tax rate from the prior year quarter iswas primarily caused by increased valuation allowance due to the ~~result of our recognition of a nondeductible goodwill impairment charge~~operating loss incurred during the current quarter and interest expense on uncertain tax positions.

Six months ended

The decrease in the tax rate from the prior year ~~quarter.~~

~~Six Months Ended~~

~~The income~~six months ended was primarily caused by increased valuation allowance due to the operating loss incurred during the current six months ended and interest expense on uncertain tax ~~provisions~~positions, offset by the larger prior year period impairment of held-for-sale assets for the six months ended September 30, 2018 and October 1, 2017 represent effective tax rates of 9.4% and 13.1%, respectively. The decrease in the rate from the prior year period is primarily a result of the effects of Tax Legislation in the current period and our recognition of nondeductible impairment charges in the current and prior periods.2018.

Liquidity and Capital Resources

Liquidity

We manage our business to maximize operating cash flows as the primary source of liquidity. In addition to cash on hand and cash generated by operations, sources of liquidity include a committed credit ~~facility~~facilities and access to the public debt and equity markets. We use our cash primarily to fund investments in our existing businesses and for debt ~~repayment,~~payments, acquisitions, and other activities.

~~Cash Flow Summary~~

Our cash flows from operating, investing and financing activities for the ~~three and~~ six months ended September 29, 2019 and September 30, 2018 ~~and~~ ~~October 1, 2017~~ are summarized as follows:


	September 30, 2018			October 1, 2017			September 29, 2019			September 30, 2018
Cash provided by operating activities	$	58,342		$	112,122
Cash provided by (used for) investing activities	132,698			(31,131		)
Cash (used for) provided by operating activities							$	(8,238	)	$	58,342
Cash provided by investing activities							139,107			132,698
Cash used for financing activities	(166,644		)	(76,526		)	(129,921		)	(166,644		)
Effect of foreign exchange rate fluctuations on cash	(1,020		)	1,458			(72		)	(1,020		)
Net cash flows	$	23,376		$	5,923		$	876		$	23,376

Operating Activities—Cash ~~provided by~~used for operating activities was ~~$58,342~~$8,238 in the six months ended September ~~30, 2018~~29, 2019 compared to cash provided of ~~$112,122~~$58,342 in the prior year period, a ~~change~~decrease of ~~$53,780.~~$66,580. The change from the prior-year period was primarily a result of ~~decreased gross margin and~~ unfavorable changes in net working capital ~~balances.~~balances and decreased gross margin. The change in net working capital was driven primarily by ~~increases in net inventories, partially offset by the~~ timing of supplier payments, customer receivable payments and ~~the collection of customer receivables.~~inventory purchases.

Investing Activities—Cash provided by investing activities was ~~$132,698~~$139,107 compared to ~~$31,131 used~~$132,698 in the prior-year period, a change of ~~$163,829.~~$6,409. The change iswas driven by ~~the sale of the Eyewear Brands~~a decrease in capital expenditures in the current ~~period.~~fiscal year and proceeds from our divestitures.

Financing Activities—Cash used for financing activities was ~~$166,644~~$129,921 in the current period, compared to cash used for financing activities of ~~$76,526~~$166,644 in the prior year period, a change of ~~$90,118.~~$36,723. This change was primarily driven by ~~$100,000 of additional~~lower debt ~~payments in the current period,~~repayments and debt issuance costs, partially offset by a favorable settlement with our former parent in the prior year quarter of $13,047.

~~Liquidity~~Capital Resources

In addition to our normal operating cash requirements, our principal future cash requirements will be to fund capital expenditures, debt repayments, employee benefit obligations ~~any share repurchases,~~ and any strategic acquisitions. Our short-term cash requirements for operations are expected to consist mainly of capital expenditures to maintain production facilities and working capital requirements. Our debt service requirements over the next two years consist of required interest payments due under the New Credit ~~Agreement~~Facilities and ~~the~~our 5.875% Notes, as discussed further below.

Our business experiences a certain level of seasonality, which impacts our cash flow. Due to this seasonality, we expect to use cash during the first half of our fiscal year and generate cash during the second half of the year. Based on our current financial condition, management believes that our cash position, combined with anticipated generation of cash flows and the availability of funding, if needed, under our ABL Revolving Credit ~~Agreement,~~Facility, access to debt and equity markets, as well as potential future sources of funding including additional bank financing, will be adequate to fund future growth ~~as well as~~and to service our currently anticipated long-term debt and pension obligations and make capital expenditures over the next 12 months.

~~We do not expect that our access to liquidity sources will be materially impacted in the near future.~~ There can be no assurance, however, that the cost or availability of future borrowings, if any, will not be materially impacted by capital market conditions or ~~the company's~~our financial condition and performance.

The allocation of tax liabilities for the period from April 1, 2014 through the date of the Spin-Off as required by the Tax Matters Agreement with Orbital ATK, as discussed further in Note ~~14,~~ 15, Income Taxes, was settled on June 15, 2018. Orbital ATK paid Vista Outdoor $13,047 to settle this matter, which was reflected as an adjustment to the distribution from us to Orbital ATK at the time of the Spin-off.

Long-Term Debt and Credit Agreement

As of September ~~30, 2018,~~29, 2019, our indebtedness consisted of the following:


	September 30, 2018			September 29, 2019
Credit Agreement:
Term Loan	$	400,000
Revolving Credit Facility	—
Total principal amount of Credit Agreement	400,000
Credit Agreements:
ABL Revolving Credit Facility				$	215,000
Junior Term Loan				20,000
Total principal amount of Credit Agreements				235,000
5.875% Senior Notes	350,000			350,000
Principal amount of long-term debt	750,000			585,000
Less: Unamortized deferred financing costs	(8,414		)	(6,719		)
Carrying amount of long-term debt	741,586			578,281
Less: current portion	—			—
Carrying amount of long-term debt, excluding current portion	$	741,586		$	578,281

Our total debt ~~(current portion of debt and long-term debt)~~ as a percentage of total capitalization (total debt and stockholders' equity) was ~~38.9%~~49.9% as of September ~~30, 2018.~~29, 2019.

See Note ~~12,~~ 13, Long-term Debt, to the unaudited condensed consolidated financial statements in Part I, Item 1 of this report for additional discussion of the 5.875% Notes and the New Credit ~~Agreement.~~Facilities.

During fiscal ~~2018,~~2019, we ~~conducted~~refinanced our Amended and Restated Credit Agreement dated April 1, 2016 by entering into new credit facilities (collectively, the “New Credit Facilities”) consisting of (a) a ~~review~~$450,000 senior secured asset-based revolving credit facility (the “ABL Revolving Credit Facility”), comprised of $20,000 in first-in, last-out (“FILO”) revolving credit commitments and $430,000 in non-FILO revolving credit commitments, (b) a $109,343 senior secured asset-based term loan facility (the “Term Loan”) and (c) a $40,000 junior secured term loan facility (the “Junior Term Loan”). The FILO commitments under the ABL Revolving Credit Facility are subject to reductions of $1,667 on the first business day of each fiscal quarter beginning on April 1, 2019. The balance of the FILO revolving credit commitment as of September 29, 2019 was $16,666.

During the three months ended September 29, 2019, we used proceeds from the sale of our outstanding debt instruments and initiated discussions with our banks regarding refinancing our Credit Agreement with asset-based revolving and term loan agreements. We believe that this change could provide us with additional flexibilityFirearms business to ~~operate efficiently in a challenging market environment. Subject to debt market conditions, we anticipate finalizing~~pay off the ~~refinancing before the end~~balance of our ~~third fiscal quarter.~~Term Loan and to reduce our ABL Revolving Credit Facility and paid down the principal balance of our Junior Term Loan by $20,000. The remaining principal balance on the Junior Term Loan was fully paid subsequent to the quarter ended September 29, 2019 using cash generated from operations and advances from our ABL Revolving Credit Facility.

The payoff of Term Loan and the Junior Term Loan in October 2019 reduced our interest rate on the ABL revolving Credit Facility. Subsequent to when the Term Loan and the Junior Term loan were paid in full, borrowings under the ABL Revolving Credit Facility bear interest at a rate equal to, in the case of (a) non-FILO revolving credit loans, either the sum of a base rate plus a margin ranging from 0.25% to 0.75% or the sum of a LIBO rate plus a margin ranging from 1.25% to 1.75%, and (b) FILO revolving credit loans, a rate that is 1.00% higher than the rate paid on the non-FILO revolving credit loans. All such rates vary based on our Average Excess Availability under the ABL Revolving Credit Facility.

Covenants

New Credit ~~Agreement~~Facilities—Our New Credit ~~Agreement imposes~~Facilities impose restrictions on us, including limitations on our ability to pay cash dividends, incur ~~additional~~ debt or liens, redeem or repurchase Vista Outdoor stock, enter into ~~capital leases, grant liens, pay dividends and~~transactions with affiliates, make ~~certain other payments, sell assets, make loans and~~ investments, or merge or consolidate with others or into another entity. In addition, the Credit Agreement limits our ability to enter into sale-and-leaseback transactions. The Credit Agreement does not allow us to make "restricted payments" (as defined in the Credit Agreement), including payments for future share repurchases and dividends, when our consolidated total leverage ratio exceeds 4.00 to 1.00. When such ratio is 4.00 to 1.00 or less, the Credit Agreement allows us to make unlimited "restricted payments" as long as we maintain a certain amountdispose of ~~liquidity and maintain certain debt limits. When those requirements are not met, the limit is equal to $150,000 plus proceeds of any equity issuances plus 50% of net income since April 1, 2017.~~

The Credit Agreement contains covenants that require us to maintain a minimum consolidated interest coverage ratio and not to exceed certain consolidated total leverage ratio and consolidated senior secured leverage ratio (all as defined in the Credit Agreement) thresholds. To allow sufficient time to execute the refinancing discussedassets. As noted above, ~~we executed an amendment~~subsequent to the ~~Credit Agreement~~quarter ended September 29, 2019 the Junior Term Loan was paid in ~~May 2018 to amend, among other things, certain~~full which triggered the financial covenants ~~during our fiscal 2019. This amendment provides~~of the ~~following maximum ratios:~~

Maximum leverage ratios per the Credit Agreement
Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19
Consolidated Leverage Ratio 7.25 8.25 8.00 6.75
Consolidated Senior Secured Leverage Ratio 5.00 5.50 5.25 4.50

~~The May 2018 Amendment also provides that the consolidated interest coverage ratio must~~New Credit Facilities to be ~~greater than 2.00 to 1.00 through the fiscal quarter ended December 31, 2018, and 2.50 to 1.00~~reduced. Our new requirement in effect for the quarter ~~ended March 31, 2019. In addition,~~ending December 29, 2019 is to maintain Excess Availability under the ~~May 2018 Amendment reduces the~~ABL Revolving Credit Facility ~~from $400,000~~of $42,500 at all times. If Excess Availability falls below $42,500 we must maintain a FCCR of not less than 1.00:1.00. If we do not comply with the covenants in any of the New Credit Facilities, the lenders may, subject to ~~$200,000, amends~~customary cure rights, require the ~~borrowing rates~~immediate payment of all amounts outstanding under each of the ~~Revolving~~New Credit Facility and Term A Loan and the fee for unused commitments under the Revolving Credit Facility, all of which vary depending on our consolidated leverage ratio, and further restricts our ability to enter into certain transactions.

~~Our financial covenant ratios as of September 30, 2018 were as follows:~~

Interest
Coverage
Ratio*
Total Leverage
Ratio†
Senior Leverage Ratio†
Requirement 2.00
8.25
5.50
Actual 2.58
6.77
3.54
* Not to be below the required financial ratio
† Not to exceed the required financial ratio
Facilities.

The ~~Consolidated Total Leverage Ratio~~FCCR is ~~the sum of our total debt plus financial letters of credit and surety bonds, net of up to $37,500 of cash, divided by~~ Covenant EBITDA ~~(which~~("Earnings Before Interest, Taxes, Depreciation, and Amortization," which includes adjustments for items such as non-recurring or extraordinary items, non-cash charges related to stock-based compensation, and

intangible asset impairment charges, as well as ~~inclusion of EBITDA of~~adjustments for acquired ~~companies~~or divested business units on a pro forma basis) less capital expenditures (subject to certain adjustments) for the past four fiscal quarters. The Consolidated Senior Secured Leverage Ratio is the sum of our senior secured debt plus financial letters of credit and surety bonds, in each case secured by liens on any of our or our subsidiaries’ property or assets, net of up to $37,500 of cash,quarters, divided by ~~Covenant EBITDA for~~fixed charges (which includes debt principal and interest payments paid since October 28, 2018, annualized; plus income tax payments and restricted payments over the past four fiscal ~~quarters. The Interest Coverage Ratio is Covenant EBITDA divided by pro forma interest expense (excluding amortization or write-off~~quarters). As of ~~deferred financing costs).~~September 29, 2019, our FCCR was 2.03.

5.875% Notes—The indenture governing the 5.875% Notes contains covenants that, among other things, limit our ability to incur or permit to exist certain liens, sell, transfer or otherwise dispose of assets, consolidate, amalgamate, merge or sell all or substantially all of our assets, enter into transactions with affiliates, enter into agreements restricting our subsidiaries’ ability to pay dividends, incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem our capital stock, prepay, redeem or repurchase certain debt and make loans and investments. A failure to comply with the covenants in the indenture could result in an event of default, which could allow the holders of the 5.875% Notes to accelerate the 5.875% Notes. We may not have sufficient liquidity to repay the 5.875% Notes in such circumstances.

The 2018 Credit Agreement and the indenture governing the 5.875% Notes contain cross-default provisions so that non-compliance with the covenants within one debt agreement could ~~also~~ cause a default under other the ~~other~~ debt ~~agreement.~~agreements as well. As of September ~~30, 2018,~~29, 2019, we were in compliance with the covenants of ~~both~~all the debt ~~agreements.~~agreements and expect to be in compliance for the foreseeable future. However, our business, financial position and results of operations are subject to various risks and uncertainties, including some that may be beyond our control, and we cannot provide any assurance that we will be able to comply with all such financial covenants in the ~~future,~~future. For example, during periods in which we experience declines in sales or ~~complete a refinancing~~otherwise experience the adverse impact of ~~our Credit Agreement mentioned above, because of various risks and uncertainties some of which~~seasonality, we may not be ~~beyond our control. Any failure~~able to comply with the restrictions in the Credit Agreement may prevent us from drawing under the Revolving Credit Facility and may result in an event of default under the Credit Agreement, which default may allow the creditors to accelerate the related indebtedness and the indebtedness under our 5.875% Notes and proceed against the collateral that secures the indebtedness. We may not have sufficient liquidity to repay the indebtedness in such ~~circumstances.~~financial covenants.

Contractual Obligations and Commitments

The Company leases certain warehouse, distribution and office facilities, vehicles and office equipment under operating leases. The amounts presented in this line item represent commitments for minimum lease payments under non-cancelable operating leases. As of September 29, 2019, current and long-term operating lease liabilities of $11,190 and $74,051, respectively, were recorded in the accompanying unaudited condensed consolidated balance sheets. For further discussion, see Note 3, Leases, to the unaudited condensed consolidated financial statements in Part I, Item 1 of this report.

Other than the ~~additional~~changes to debt and lease obligations noted ~~previously,~~above, there have been no material changes with respect to the contractual obligations and commitments or off-balance sheet arrangements described in our Annual Report on Form 10-K for fiscal ~~2018.~~2019.

Contingencies

Litigation—From time to time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. We do not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our operating results, financial condition, or cash flows.

Environmental Liabilities—Our operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those governing the discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. We are obligated to conduct investigation and/or remediation activities at certain sites that we own or operate or formerly owned or operated.

~~We also~~Certain of our former subsidiaries have been identified as ~~a PRP,~~potentially responsible parties (“PRP”), along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, wethose former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While

uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our operating results, financial condition, or cash flows.

New Accounting Pronouncements

See Note 1, Significant Accounting Policies, to the unaudited condensed consolidated financial statements in Item 1 of Part I of this report.

Dependence on Key Customers; Concentration of Credit

The loss of any key customer and our inability to replace revenues provided by a key customer may have a material adverse effect on our business and financial condition. Sales to Walmart represented ~~14%~~15% and ~~15%~~14% of our sales in the six months ended September 29, 2019 and September 30, 2018, respectively. As a result of Walmart's announcement on September 3, 2019, we expect reduced ammunition and ~~October 1, 2017, respectively.~~accessories sales to Walmart in the future. No other single customer contributed 10% or more of our sales in the six months ended September 29, 2019 and September 30, ~~2018 and October 1, 2017.~~2018.

If a key customer fails to meet payment obligations, our operating results and financial condition could be adversely affected.

Inflation and Commodity Price Risk

In management’s opinion, inflation has not had a significant impact upon the results of our operations. However, we have been impacted by changes in the prices of raw materials used in production as well as changes in oil and energy costs. In particular, the prices of commodity metals, such as copper, zinc, and lead continue to be volatile. These prices generally impact our Shooting Sports Segment. See Note 4, Derivative Financial Instruments, for additional information.

We have a strategic sourcing, pricing and ~~price~~hedging strategy to mitigate risk from commodity price fluctuation. We will continue to evaluate the need for future price changes in light of these trends, our competitive landscape, and our financial results. If our sourcing and pricing strategy is unable to offset impacts of the commodity price fluctuations, our future results from operations and cash flows would be materially impacted.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates, commodity prices and foreign currency exchange rates. ~~To mitigate the~~We manage these risks ~~from interest rate exposure, we may enter~~by entering into hedging transactions ~~mainly~~including interest rate swaps, commodity forward contracts and foreign currency forward contracts through derivative financial instruments that have been authorized pursuant to corporate policies. We ~~may use derivatives to hedge certain interest rate, foreign currency exchange rate, and commodity price risks, but~~ do not use derivative financial instruments for trading or other speculative purposes. Additional information regarding ~~the~~these financial instruments is ~~contained~~included in Note 2,Fair Value of Financial Instruments, to the ~~audited~~unaudited condensed consolidated financial ~~statements. Our objective~~statements in ~~managing exposure to changes in interest rates is to limit the impact~~Item 1 of ~~such changes on earnings and cash flow.~~Part I of this report.

We measure market risk related to holdings of financial instruments based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential loss in fair values, cash flows, and earnings based on a hypothetical change (increase and decrease) in interest rates. We used current market rates on the debt portfolio to perform the sensitivity analysis. Certain items such as lease contracts, insurance contracts, and obligations for pension and other postretirement benefits were not included in the analysis.

We are exposed to market risk from changes in interest rates. To mitigate the risks from interest rate exposure, we may enter into hedging transactions, mainly interest rate swaps. Our objective in managing the exposure to changes in interest rates is to limit the impact of such changes on earnings and cash flow.

Lead used for raw material components in our ammunition manufacturing process in the normal course of our operations is subject to price volatility. Depending on market conditions, we may enter into forward contracts in order to reduce the impact of commodity price fluctuations. Potential increases in our cost of inventory purchased, would be substantially offset by a corresponding increase in the value of related hedging instruments.

We conduct business through our subsidiaries in many different countries, and fluctuations in currency exchange rates could have a significant impact on the reported results of operations, which are presented in U.S. dollars. Cross-border transactions, both with external parties and intercompany relationships, result in increased exposure to foreign exchange effects. Accordingly, significant changes in currency exchange rates, particularly the Euro, the British pound, the Chinese renminbi (yuan), ~~the Canadian dollar,~~ and the ~~Australian~~Canadian dollar, could cause fluctuations in the reported results of our businesses’ operations that could negatively affect our results of operations. To mitigate the risks from foreign currency exposure, we may enter into hedging transactions, mainly foreign currency forward contracts, through derivative financial instruments that have been authorized pursuant to corporate policies.

In addition, sales and expenses of our non-U.S. businesses are also translated into U.S. dollars for reporting purposes and the strengthening or weakening of the U.S. dollar could result in unfavorable translation effects. There have been no material changes to the market risks disclosed in our Annual Report on Form 10-K for fiscal 2019.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of September ~~30, 2018,~~29, 2019, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) and have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the ~~quarter~~three months ended September ~~30, 2018,~~29, 2019, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of our business. ~~Notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings in any particular quarter, we~~We do not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our ~~future~~ operating results, financial condition, or cash flows.

WeCertain of our former subsidiaries have been identified as ~~a PRP,~~potentially responsible parties (“PRP”), along with other parties, in regulatory agency actions associated with hazardous waste sites. As a PRP, wethose former subsidiaries may be required to pay a share of the costs of the investigation and clean-up of these sites. In that event, we would be obligated to indemnify those subsidiaries for those costs. While uncertainties exist with respect to the amounts and timing of ~~the~~our ultimate environmental liabilities, based on currently available information, we do not currently expect that these matters, individually or in the aggregate, will have a material adverse effect on our operating results, financial condition, or cash flows.

ITEM 1A. RISK FACTORS

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018~~2019 describes the known material risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects. There have been no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2018.~~2019.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit Number		Description of Exhibit (and document from which incorporated by reference, if applicable)
2.1*		Transaction Agreement, dated as of April 28, 2014, among Alliant Techsystems Inc., Vista SpinCo Inc., Vista Merger Sub Inc. and Orbital Sciences Corporation (Exhibit 2.1 to Vista Outdoor Inc.’s Registration Statement on Form 10, filed with the Securities and Exchange Commission on August 13, 2014).
2.22.5+		Transition Services Agreement, dated as of February 9, 2015, among Alliant Techsystems Inc. and Vista Outdoor Inc. (Exhibit 2.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
~~2.3*+~~		Ammunition Products Supply Agreement, dated as of February 9, 2015, among Alliant Techsystems Operations LLC and Federal Cartridge Company (Exhibit 2.3 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
~~2.4*+~~		Powder Products Supply Agreement, dated as of February 9, 2015, among Alliant Techsystems Operations LLC and Federal Cartridge Company (Exhibit 2.4 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
~~2.5*+~~		Tax Matters Agreement, dated as of February 9, 2015, among Alliant Techsystems Inc. and Vista Outdoor Inc. (Exhibit 2.5 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
2.6*+		Stock Purchase Agreement, dated as of July ~~2, 2018,~~5, 2019, by and among ~~Bushnell Inc., Bushnell Performance Optics Asia Limited, Bolle Inc., Serengeti Eyewear, Inc., Bushnell Outdoor Products Japan Limited, Antelope Brands Bidco Inc., and~~ Vista Outdoor ~~Inc. (solely for purposes of Section 11.18 thereof) (Exhibit 2.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 9, 2018).~~
~~2.7*+~~		Letter Agreement, dated as of August 31, 2018, by and among Bushnell Inc., Bushnell Performance Optics Asia Limited, Bolle Inc., Serengeti Eyewear, Inc., Bushnell Outdoor Products Japan Limited, Antelope Brands Bidco Inc.,Operations LLC, Caliber Company, Long Range Acquisition LLC, and Vista Outdoor Inc. (Exhibit 2.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on ~~September 4, 2018)~~July 8, 2019).
3.1*		Amended and Restated Certificate of Incorporation of Vista Outdoor Inc. (Exhibit 3.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
3.2*		Certificate of Amendment to Vista Outdoor Inc. Amended and Restated Certificate of Incorporation (Exhibit 3.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 10, 2018).
3.3*		Vista Outdoor Inc. Amended and Restated Bylaws (Exhibit 3.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 10, 2018).
4.1*		Specimen Common Stock Certificate of Vista Outdoor Inc. (Exhibit 4.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 10, 2014).
4.2*		Indenture, dated as of August 11, 2015, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and U.S. Bank National Association, as trustee (Exhibit 4.1 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 11, 2015).
4.3*		Supplemental Indenture, dated as of August 11, 2015, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and U.S. Bank National Association, as trustee (Exhibit 4.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 11, 2015).
4.4*		Form of 5.875% Senior Note due 2023 (included as Exhibit A to the Supplemental Indenture filed as Exhibit 4.2 to Vista Outdoor Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 11, 2015).
4.5*		Second Supplemental Indenture, dated as of August 9, 2016, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and U.S. Bank National Association, as trustee (Exhibit 4.3 to Vista Outdoor Inc.’s Registration Statement on Form S-4, filed with the Securities and Exchange Commission on August 11, 2016).
4.6*		Third Supplemental Indenture, dated as of December 2, 2016, among Vista Outdoor Inc., the subsidiaries of Vista Outdoor Inc. party thereto and U.S. Bank National Association, as trustee (Exhibit 4.6 to Vista Outdoor Inc.’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on February 9, 2017).
~~31.1~~10.1*		Amended and Restated Vista Outdoor Inc. 2014 Stock Incentive Plan (Exhibit 10.1 to Vista Outdoor Inc.'s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 9, 2019.
31.1		Certification of Principal Executive Officer.

31.2		Certification of Principal Financial Officer.

32		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance ~~Document.~~Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.



101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB		XBRL Taxonomy Extension Labels Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in Inline XBRL.

* Incorporated by reference.

+ Schedules to exhibits have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. Vista Outdoor agrees to furnish supplementally a copy of any omitted schedules to the SEC upon its request; provided, however, that we may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished.

# Indicates a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



			VISTA OUTDOOR INC.
Date:	November ~~8, 2018~~7, 2019	By:	/s/ ~~Miguel A. Lopez~~Mark R. Kowalski
		Name:	~~Miguel A. Lopez~~Mark R. Kowalski
		Title:	~~Senior Vice President~~ Controller and Chief ~~Financial~~Accounting Officer
			(On behalf of the Registrant and as principal ~~financial~~accounting officer)

3534



		Page
PART I - Financial Information
Item 1.	Unaudited Financial Statements	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	30
PART II - Other Information
Item 4.1.	~~Controls and Procedures~~Legal Proceedings	31
~~PART II~~ ~~- Other Information~~
Item 1.1A.	~~Legal Proceedings~~Risk Factors	3231
Item ~~1A.~~2.	~~Risk Factors~~	32
~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
~~Item 3.~~SIGNATURES		~~Defaults Upon Senior Securities~~	32
~~Item 4.~~	~~Mine Safety Disclosures~~	32
~~Item 5.~~	~~Other Information~~	32
~~Item 6.~~	~~Exhibits~~	33
~~SIGNATURES~~		3534



	Quarter ended September 30, 2018						Quarter ended October 1, 2017
	Outdoor Products		Shooting Sports		Total		Outdoor Products		Shooting Sports		Total
Ammunition	$	—	$	224,481	$	224,481	$	—	$	253,847	$	253,847
Firearms	—		49,638		49,638		—		41,808		41,808
Hunting and Shooting Accessories	114,486		—		114,486		117,033		—		117,033
Action Sports	84,728		—		84,728		81,130		—		81,130
Outdoor Recreation	53,916		—		53,916		54,097		—		54,097
Eyewear	19,336		—		19,336		39,368		—		39,368
Total	$	272,466	$	274,119	$	546,585	$	291,628	$	295,655	$	587,283

Geographic Region
United States	$	190,687	$	237,228	$	427,915	$	203,662	$	249,052	$	452,714
Rest of the World	81,779		36,891		118,670		87,966		46,603		134,569
Total	$	272,466	$	274,119	$	546,585	$	291,628	$	295,655	$	587,283



Remainder of fiscal 2019	$	11,847
Fiscal 2020	23,554
Fiscal 2021	23,529
Fiscal 2022	23,475
Fiscal 2023	23,360
Thereafter	142,935
Total	$	248,700



Balance, March 31, 2018	$	10,247
Payments made	(1,762		)
Warranties issued	2,209
Other adjustments	(2,474		)
Changes related to pre-existing warranties	(167		)
Balance, September 30, 2018	$	8,053



	Maximum leverage ratios per the Credit Agreement
	Q1 FY19	Q2 FY19	Q3 FY19	Q4 FY19
Consolidated Leverage Ratio	7.25	8.25	8.00	6.75
Consolidated Senior Secured Leverage Ratio	5.00	5.50	5.25	4.50



	Interest Coverage Ratio*	Total Leverage Ratio†	Senior Leverage Ratio†
Requirement	2.00	8.25	5.50
Actual	2.58	6.77	3.54
* Not to be below the required financial ratio
† Not to exceed the required financial ratio