Vista Outdoor, the company that recently bought the Remington ammunition plant in Lonoke, reported strong fourth quarter and year-end results Thursday and said the mingling of the Remington brand into its overall business is ahead of schedule.
The Lonoke facility now employs 875 and is still hiring and training more workers, according to a company spokesman. That's up more than 75 workers since February and more than double from November's count of around 400. The plant is still operating under all local and state covid-19 safety protocols, the spokesman said, adding it has hosted vaccination events for its employees.
In mid-October, Vista Outdoor, based in Minnesota, closed on its acquisition of Remington's ammunition production facility, along with the Remington brand and trademarks. Vista Outdoor paid $81.4 million for the assets as part of Remington's bankruptcy proceedings.
Vista Outdoor formed in 2015 and is made of a variety of outdoor brands including optics and ammunition makers. It has 14 other manufacturing operations in the U.S. and Puerto Rico.
In July Remington Outdoor Co., the nation's oldest gun-maker, declared bankruptcy in U.S. Bankruptcy Court for the Northern District of Alabama, its second bankruptcy in two years. The private company was founded in 1816. Remington began production at the Lonoke facility in 1969. The operation includes 750,000 square feet of manufacturing space on 1,200 acres.
During a conference call with analysts Thursday, Vista Outdoor Chief Executive Officer Chris Metz said ammo demand was still red hot around the country. During the call he didn't give an exact figure on the company's current ammunition order backlog but said it grows each quarter. In November, Metz said the company had a year's worth of orders valued at $1 billion on the books.
In a recent YouTube video, Jason Vanderbrink, president of ammunition for Vista Outdoor, said the company's ammo operations, including Remington's plant, have been running 24-hours, seven days a week to try to meet demand.
Previously Metz had said ammunition demand in March of 2020 and throughout the past year seemed to be initially stirred by people at home in a pandemic lockdown wanting to get outdoors, quickly followed by concerns of civil unrest, an unexpected hunting demand and then, most recently, political and legislative concerns with a new administration in the White House.
Background checks of firearms buyers for 2021 stood at about 15.97 million through April, compared with about 9.2 million for the same period last year. In 2020 old records were shattered, with 39.69 million total background checks, a 40% increase over 2019's previous record. While the FBI background-check figures don't represent the number of guns sold, they are generally used as indicators of firearms demand.
In response to analyst's questions, Metz said they weren't seeing much hoarding behavior by ammunition buyers -- unlike during the 2016 ammo shortage -- simply because there really wasn't enough ammunition available for individuals to stockpile. He said that because of increased production costs, from copper to higher wages, ammunition prices to Vista Outdoor's customers and the consumer have increased.
For Vista Outdoors' fourth quarter, the company posted record revenue of $597 million, up 40% when compared with the same quarter last year. A consensus of 9 analysts had predicted revenue of $532 million, according to Yahoo Finance. Revenue for the quarter in the shooting sports segment, which includes ammunition, was $403 million, up 37% from the fourth quarter of 2019.
Profit was $1.11 per share up from 11 cents per share for the year ago quarter. A consensus of 10 analysts had called for profit of 65 cents per share, according to Yahoo Finance.
Shares of Vista Outdoor closed at $34.15, down 97 cents or 2.7% in trading Thursday on the New York Stock Exchange. Shares have traded as low as $6.52 and as high as $38.36 over the past year.
The fourth quarter was the first full quarter Vista Outdoor owned Remington and HEVI Shot, which accounted for about $30 million in revenue for the fourth quarter period and $45 million for the year, according to Chief Financial Officer Sudhanshu Priyadarshi during a conference call. He projected Remington sales would be in the $50 million range in the first quarter of 2021. He noted at its peak Remington generated $400 million in revenue so there's still a lot of room for increased capacity and growth.
For 2020, total sales were $2.2 billion up from $1.75 billion for the year earlier. Metz said the Remington and HEVI-Shot acquisitions contributed to the higher sales growth. The company is predicting revenue between $600 million and $620 million for the first quarter of 2021 compared with $479 million for the same quarter a year ago.
Vista Outdoor also said Thursday it's beginning a $100 million, two-year stock repurchase program.