Vista Outdoor, the new parent of Remington Ammunition with its factory in Lonoke, said surging ammo demand seen during the covid-19 pandemic is different and more sustainable than in years past.
The comments came during an online investor conference Wednesday morning.
In an interview after the conference, Chris Metz, chief executive officer of Vista Outdoor, said Remington's Lonoke facility now employs about 900 and is still looking for hundreds more workers. That's up more than 100 workers since February and double from November's count of around 450.
He said the plant is producing as much 9mm and shot shell ammunition as possible to meet the unprecedented demand that has left retail shelves around the nation bare for nearly a year as shooters and hunters scramble to find ammo. He said the integration of Remington is ahead of schedule and progressing without a hitch.
"The plant is humming," Metz said.
During the investor presentation, Vista Outdoor executives said the company's ammunition backlog on orders amounts to billions of dollars.
Metz said during the investor conference that in years past, surges in ammo demand were attributed primarily to concerns about firearms and ammunition restrictions. While that is still a factor, the covid-19 pandemic brought millions of new gun buyers along with a resurgence in interest in hunting as people sought outdoor activities.
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.
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.
Vista Outdoor formed in 2015 and is made up of more than 35 outdoor brands including, bicycles, camping gear, golf and skiing equipment, optics and ammunition makers. It has 14 other manufacturing operations in the U.S. and Puerto Rico.
Shares of Vista Outdoor closed at $39.99, up $2.49 or 6.4% in trading Wednesday on the Nasdaq. Shares have traded as low as $8.27 and as high as $40 over the past year.
During the investor conference, Metz said growth the company has seen in the last fiscal year across all its brands, including ammunition, is at record levels. He said there was structural change in the company's core customers compared with years past that makes him confident the sales gains will stay with the company for the long term. He noted new, younger and more diverse customers are buying into the company's many brands, establishing a strong, sustainable base for growth and profit.
The company also touted its most recent acquisitions, e-Bike QuietKat and apparel brand Venor.
Vista Outdoor predicts 10% annual sales growth or more annually over the next three years. Company executives said the company will grow organically and will seek acquisitions going forward. Plans are for continued focus on e-commerce and the company recently began a $200 million stock buy-back plan.
Earlier this month, Vista Outdoor reported fourth quarter revenue of $597 million, a new record and up 40% when compared with the same quarter last year. 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. For 2020, total sales were $2.2 billion up from $1.75 billion for the year earlier.
Jason Vanderbrink, president of ammunition for Vista Outdoors, which includes Federal, Speer, CCI and HEVI-Shot, as well as Remington, told investors demand was still red hot. He said this surge was different than in years past where some shooters and hunters hoarded ammunition. Instead, customers are hunting and target shooting when they can get ammunition, keeping ranges and gun clubs hopping.
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.
Vanderbrink said ammunition demand in 2020 was driven primarily by 8 million first-time gun buyers in 2020 and the 2 million so far in 2021 -- many of whom are women and people of color -- who entered the market place. He said if each of those people purchased just two boxes of 9mm pistol ammunition, a highly popular caliber, the estimated 800 million rounds would fill more than 570 semi-trailers.
Vanderbrink said because of its bankruptcy, Remington's research and development had lagged significantly, something Vista Outdoors is remedying. He said shooters could expect to see new products in the near term.
He also said the company plans to focus even more on direct-to-consumer ammunition sales and said the company will start a subscription ammunition service. In the interview, Metz said Remington ammunition will eventually be part of these services.
Visa Outdoor is also seeking licensing opportunities for the Remington name, Metz said, at first in the cooler and apparel segments but later in other areas.