Michael Pici - Vice President, Investor Relations Mark DeYoung - Chairman and CEO Steve Nolan - Senior Vice President and CFO.

Greg Konrad - Jefferies Steve Cahall - Royal Bank of Canada Jay Sole - Morgan Stanley Gautam Khanna - Cowen and Company Brian Ruttenbur - BB&T Jim Chartier - Monness, Crespi & Hardt Robert Sassoon - R.F. Lafferty Rommel Dionisio - Wunderlich.

Good day. And welcome to the Vista Outdoor Second Quarter Fiscal Year 2016 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Pici, Vice President of Investor Relations. Please go ahead, sir..

Thank you. Good morning. And thank you for joining us for our second quarter fiscal year 2016 earnings call. With me this morning are Mark DeYoung, Vista Outdoor’s Chairman and Chief Executive Officer; and Steve Nolan, Senior Vice President and Chief Financial Officer.

Before we begin, I’d like to remind everyone that during today’s call we will be making several forward-looking statements and we make these statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act.

These forward-looking statements reflect our best estimates and assumptions, based on our understanding of the information known to us today. These forward-looking statements are subject to the risks and uncertainties that faced Vista Outdoor and the industries in which we operate.

We encourage you to review today’s press release and Vista Outdoor’s SEC filings for more information on these risk factors and uncertainties. Please also note that we have posted presentation materials on our website at vistaoutdoor.com, which supplement our comments this morning and include a reconciliation of non-GAAP financial measures.

With that said, I’ll turn the call over to you Mark..

Okay, Michael. Thank you. Good morning, everyone. It’s pleasure to welcome you to Vista’s second quarter earnings call. We are about half way through the first fiscal year as a standalone company and I am pleased to report on the strong performance and be able to discuss our outlook with you for the rest of this first fiscal year of the new company.

Vista Outdoor reported solid results in the quarter and we achieved organic growth in sales and gross profit, both sequentially and year-over-year. During the quarter we saw higher year-over-year sales in optics, golf, shooting accessories and firearms, and we are experiencing continued demand for our rimfire ammunition.

With our strong sales in firearms we continue to ramp up manufacturing in Savage. We are seeing markets stabilization in the shooting sports and Stephen Nolan will elaborate on the market conditions in a just few momentums when he provides some additional detail on the financial results from the quarter.

During this past second quarter we acquired two companies, Jimmy Styks and CamelBak. As a reminder, Jimmy Styks is a leading designer and marketer of standup paddleboards. The company provides platforms for water sport enthusiasts to engage in a range of activities, including personal fitness, wave riding and even fishing.

As we highlighted in our last earnings call, the acquisition provides us access into the water sports market, which helps to further diversify the company’s outdoor products portfolio and we can expand Jimmy Styks product distribution using our current sales channels.

CamelBak as you are aware is a leading provider of personal hydration solutions that are used by all manner of outdoor enthusiasts and all kinds of recreational activities.

The acquisition gives us an even broader product offering and aligns with our strategy to grow in the complementary and adjacent markets, and also opens up new distribution channels for many of our current products. The integration of both Jimmy Styks and CamelBak, they are ongoing and they are on track.

Both companies are performing in line with our expectations. As we told you when we announced the acquisitions, Jimmy Styks headquartered in Huntington Beach, California, and CamelBak’s main headquartered in Petaluma, California.

Both of these acquisitions strengthened our overall leadership position as an outdoor sports and recreation company, and I am pleased with our progress. We have developed a strong pipeline of additional M&A candidates and we continue to seek out opportunities to grow both organically and through continued acquisition.

Our new product launches this year continued to be well received, Bushnell legend binoculars and our elite riflescopes are getting rave reviews in the field.

Optics Planet has now named Bushnell, BLACKHAWK! And Federal Premium ammunition as finalist for its 2015 Brilliance Awards, which are the best of the best in various categories, including optics, tactical accessories and ammunition. During the second quarter, CamelBak launched several new products, including the low ride collection.

This is hydration packs which are specifically designed for mountain biking and the shoot and forge divide which are both designed to contain hot and cold beverages. Bollé introduced new innovative bike helmets, The Messenger and The One. These represent new categories for us and these helmets have already received excellent reviews.

Bollé also recently partnered with popular outdoor channel TV host, Michael Waddell to offer the first ever line of Camouflage Framed Sunglasses for hunters and outdoor enthusiasts. The Savage Arms A17 Rifle and its accompanying CCI Ammunition remain top sellers for us.

We continue to see strong reviews and cover story articles about the rifles innovative approach to performance. Our investments in innovation continue across all product areas and we look forward to launching many new and exciting products during the show season in early 2016.

The company is delivering outstanding performance on safety and environmental stewardship, and we recently earned the Idaho Department of Environmental Quality Award for being a Pollution Prevention Champions in our efforts to reduce waste in our manufacturer and processors at our Lewiston, Idaho facility.

We are committed to being a strong community partner and responsible environmental steward. We recently partnered with Tread Lightly! and our leading efforts to help outdoor enthusiasts sharing our focus to preserve access to public and private lands. As you may know, Vista Outdoor is deeply committed to wildlife conservation.

Federal Premium recently expanded their commitment with Delta Waterfowl and you'll soon see their logos on our boxes of ammunition to help raise awareness and funding for waterfowl habitat and conservation. CamelBak recently hit a milestone in their Ditch Disposable Campaign which aims to reduce disposable beverage containers at music festivals.

Between 2011 and 2014 CamelBak helped for the equivalent of 5 million disposal bottles of water for festival goers through water stations that incorporate UV filtration for the freshest water. In 2015 we have already poured the equivalent of 2.3 million disposable bottles.

We continue to build on our worldwide organization and establish our reputation as a premier outdoor sports and recreation company. We are attracting top talent with experience from leading consumer products companies.

We are also well underway in our external search for the leader of the Outdoor Products segment and have assembled a very strong candidate pool. We plan to select the finalists for this role within this quarter.

We are on track to complete all of our milestones out of the transition services agreement with Orbital ATK and we anticipate completing all transition efforts on or ahead of schedule.

Our ability to execute our strategy and to deliver on our mission of bringing the world outside has positioned Vista Outdoor as the leader in outdoor sports and recreation products. I couldn’t be more pleased that the team we have assembled, the innovation we are delivering and the financial performance of the company.

I am very energized by the opportunities ahead of us, I'm confident in the company’s strategy and I am confident in our ability to execute that strategy. Stephen will now provide some additional details and insights on the financial results of the second quarter and then following Stephen’s remarks we will be happy to jump in the Q&A.

Stephen?.

Thanks, Mark. Good morning, everyone. Thanks for joining the call. So we have discussed -- disclosed both as reported and adjusted results in our press release to assist you in your understanding of the underlying numbers and to assist in comparisons to prior period.

You will find the more detailed financial presentation of our second quarter fiscal ’16 results on our website. Today, I will discuss the adjusted results, first, for Vista Outdoor overall and then for the segments. The company achieved second quarter sales of $551 million, up 5% from the prior year quarter.

The year-over-year increase is due primarily to $24 million of sales from our recent Jimmy Styks and CamelBak acquisitions, and also includes an organic year-over-year increase of approximately $2 million.

Second quarter gross profit was $149 million, up 16%, compared to $129 million in the prior year quarter, including $9 million of gross profit from the recent acquisitions, as well as increased organic gross profit. Our operating expense for the second quarter was $79 million, compared to $62 million in the prior year quarter.

The increase reflects additionally expenses as a result of acquisitions, standalone company costs, stock-based compensations and additional R&D, selling and marketing investments. We reported operating profit of $70 million in the second quarter, an increase of approximately $4 million or 6% from the prior year period.

The increase was driven by the increase gross profit, partially offset by the increase operating expense that I just discussed. Interest expense for the quarter was $7 million, compared to $8 million in the prior year period.

The interest expense in the prior year period was an allocation to Vista Outdoor from Orbital ATK, while our current period interest expense reflects interest on our actual debt. You may recall that last quarter we discussed the borrowing against our revolver related to acquisitions. That was paid off fully during the second quarter.

The tax rate for the quarter was 37.8%, compared to 34.9% in the prior year quarter. The higher tax rate is primarily caused by the absence of the favorable true-up of prior year taxes recorded last year.

For the second quarter, we recorded net income of $40 million, up 4% from $38 million in the prior year quarter, resulting in EPS of $0.63, compared to $0.60 in the prior year quarter. Year-to-date, free cash flow was $5 million, compared to a use of $36 million in the prior year quarter.

The year-over-year improvement in free cash flow was largely driven by improvements in working capital and accounting for inter-company activity with Orbital ATK prior to the spin-off. Pre-spin item such as inter-company purchases was settled with Orbital ATK immediately.

While as a standalone company, our results reflect a more normal timing for these types of payments. As you know, in February our Board of Directors authorized a $200 million share repurchase program. The company repurchased approximately 690,000 shares for $31 million in the second quarter.

During the third quarter to-date, we purchased approximately 538,000 more shares for $23.5 million. Since the program's inception, we repurchased approximately 1.9 million shares for $84.4 million. The company will continue to opportunistically repurchase shares under this program.

Now turning to our business segment, where we will report sales and gross profit. Shooting Sports recorded second quarter sales of $338 million, down 1% from $343 million in the prior-year quarter.

This segment delivered very strong performance in the first and second quarter of fiscal ‘15 resulting in the top year-over-year comparison for the first half of this year. With our second quarter results, we have now delivered four quarters of sequential growth in the segment in line with our expectation for market stabilization.

The year-over-year decrease was primarily a result of reduced volume in centerfire and shotshell ammunition, partially offset by an increase in firearms and rimfire ammunition. Second quarter gross profit in Shooting Sports was $92 million, up 16% from $79 million in the prior-year quarter. Gross profit grew sequentially by 6%.

The year-over-year increase was driven by product mix, raw material procurement favorability and previously announced rimfire ammunition price increase partially offset by previously disclosed lower sales volume.

Second quarter sales in outdoor products were $213 million, up 17% from $182 million in the prior-year quarter including approximately $24 million sales from acquisitions. Organically, the segment was up approximately 3%, both sequentially and from the prior-year period.

The organic increase of $6 million was driven by higher sales in optics, golf and shooting accessories, partially offset by lower sales in tactical products and archery and hunting accessories and an unfavorable foreign exchange impact.

Gross profit in the second quarter of outdoor products was $57 million, an increase of 17% from $49 million in the prior-year quarter. The increase includes $9 million of gross profit from recent acquisitions.

Organic gross profit in Outdoor Products was down 2% as a result of inventory-related charges from the closure of the Meridian facility and a slightly lower margin product mix partially offset by the increased sales volume.

Turning back to the overall company level, our performance in the first half of the year benefited from timing of operating expenses, including the previously announced one-time investment. We anticipate completion of those investments in the second half of fiscal ‘16.

Additionally, selling expenses typically trend higher in the second half of the year. As Mark discussed, we do see market stabilization in the shooting sports and hunting market. And this has also contributed to the strong performance year-to-year or year-to-date.

That said both the warmer weather and its impact on the poor hunting season, the overall trends in retail and the backended nature of operating expense discussed a moment ago, we expect full year results in line with previous guidance.

Therefore, we maintain our expectations of low single-digit revenue growth and low double-digit margins, with EBITDA margins on the low end of 14% to 16% range. We are reaffirming our fiscal ‘16 guidance with sales in the range of $2.17 billion to $2.24 billion and EPS in the range of $2.05 to $2.30 per share.

As mentioned last quarter, EPS guidance excludes transaction costs incurred to date. We continue to expect capital expenditures of approximately $45 million and free cash flow in the range of $150 million to $180 million. The effective tax rate for the year is expected to be approximately 38%. With that, we will open up for questions..

[Operator Instructions] Thank you. We'll take our first question from Greg Konrad with Jefferies. Your line is now open..

Good morning..

Morning..

Just wanted to start around ammunition. You had mentioned on the previous call and we saw it in the results, the step-up in rimfire ammunition pricing and knowing your competitors had flagged pricing in the quarter.

Sequentially, has there been any change to what you're seeing just in terms of promotional activity or pricing?.

There has not been any broad pricing changes which have been instituted in the market that we've seen either by competitors and certainly not led by ourselves. There have been some pockets here and there of additional promotional activities. So I think that's true.

That is also typical this time of the year as you go into the holidays and you go into the fall season. Lot of smaller ammunition companies are feeling the pinch of the normalization within the Shooting Sports market. And so they are heavily trying to promote and place their products.

And so large brands and competitors like ourselves will compete with them. So we think some of that -- we've seen some pricing pressures by particular calibers or particular uses-type of ammunition.

So general promotional activity, some challenges are on pricing that we have seen in the market but I would say no wholesale price reductions in the market.

And as I mentioned in past our approach toward dealing with this is to create incentives with our retailers and with our wholesalers and special programs to allow them to reap the benefits in selling our brands without happening to take permanent kind of pricing reductions in the market. And we continue to execute that strategy on the price front..

Thank you. That’s helpful.

And then just to follow-up on CamelBak, can you maybe help us understand some of the accomplishments you’ve completed just on integration and maybe some of the larger items that you have moving forward?.

Sure. So on the CamelBak front, in terms of integration, we were able -- very quickly to integrate and align our financial reporting with CamelBak, a well run company. As you know they have publicly available financials which strengthen their systems and their practices.

So that has allowed us to quickly align ourselves from a financial reporting and budgeting process with CamelBak. So that’s gone very well.

In terms of the sales channel, we were able to work very quickly with their sales team and with the Vista Outdoor sales team and find opportunities to discuss CamelBak products and expanding their distribution with some of our key retailers. So that went very quickly and is definitely on track.

In terms of product innovation, we had some very good reviews with their innovative team looked at their new product introductions. And we’re quickly able to make some good management decisions about investments in the future and in the innovative solution the CamelBak is working. So I think generally it’s gone very smoothly.

And I’m very, very pleased with not only the CamelBak acquisition in terms of its strategic benefits to Vista Outdoor, but I'm very, very pleased with how quickly we've been able to align their culture with our culture, their systems with our systems, their disciplines with our disciplines and it’s going very well..

Our next question comes from the Steve Cahall with Royal Bank of Canada. Your line is now open..

Yes. Thank you very much. Maybe just a follow-up on some of the ammunition questions.

I was wondering if you can give us a sense of within Shooting Sports, did you have sequential growth in revenue on the ammo side or did you have sequential growth in volume?.

Steve, I think as we reported we mentioned that in terms of the growth we are off 1% in terms of the ammunition year-over-year results. Sequentially in ammunition, we're pretty much flat. It was couple million dollars, Steve, difference between the quarter. So it was relatively flat. Rimfire was strong. Promotional shotshell was in demand.

Centerfire was a little softer and slightly down. So it was a little bit of mixed bag in ammunition but generally we’re quite pleased with their performance, considering as Steven mentioned.

The warm weather which is impacting the hunting season and the lackluster performance by retail across the country, including as you had reported then at the outdoor recreation retailer. So in light of that, we were pretty happy with our outcome..

And as we discussed, firearm has been working very well. Mark thought that we are ramping our productions at our firearm facilities. And this strong performance certainly on a sequential basis on the firearm side..

Okay. And I know you are not guiding to the next fiscal year yet but as we just think about where we are in sort of the recovery cycle, if firearms sort of continue on pace and we’ll get to different easier comps as we get in to the next year and possibly years after.

So how should we think about sort of medium-term growth rate for the Shooting Sports segment, ones who are kind of through the ups and downs of this recovery cycle?.

I hate to say you’ve answered your own question in the first half. We’re not at this point going to give fiscal ‘17 guidance. That said, we’ve given our long-term expectation of organic growth. And we've discussed that before which is mid-to-high single growth. You’ve disclosed that previously.

And we did talk about that to take as few ears to get back to that level after reaching the cost in the market correction, we believe that profit is behind as we discussed before.

We’re delivering the sequential year-over-year growth and as we get close to fiscal ‘17, we’ll give you additional insight on as to how much of that growth we expect to see in fiscal ‘17. But it will be premature for us to disclose that at this point in time..

Yeah. So more clarification to the sequential was off about 1% but year-over-year we were mid single-digit op. I just want to make sure I clarified that in terms of ammo but again in lighter market in light of our competition and light of the top year-over-year comparisons we had Steven mentioned in our Q1 and Q2.

We’re pretty happy with those results..

Our next question comes from Jay Sole with Morgan Stanley. Your line is now open..

Thanks. Good morning..

Good morning Jay..

Just wanted to know if we can dig into our just strategic gross margin a little bit. It will be possible to kind of list which of the drivers you called out in terms of product mix raw materials and price increase as the biggest driver of the gross margin.

And then it did on the mix, what about the product mix help gross margin in the quarter?.

Okay. So the order in which I listed them, which was product mix, raw material, procurement, favorability and rimfire ammunition price increase was the order of importance. When we list those drivers, we list them large. Smaller is the product mix with each one and then more materials in the pricing.

In terms of the product mix, part best was driven in fact we were just discussing. The improved performance in firearm ammunition typically we see higher gross margin from firearms.

If you certainly go back to when we completed the Savage acquisition and we’re disclosing data at that point in time, you can see those number in fact then because we have not broken the mat lately but you can certainly go back and do it directionally similar in terms of the relative gross margin between the two. So it was one of the other drivers.

And then within ammunition, as we discussed before, we have a whole host of different ammunition products, catering to different parts of markets, premium ammunition for the hunter, right down to promo ammunition for target shooters and there is always going to be shift back and forth between those within any given quarter and there was some of that occurring but the primary driver is probably the firearms in terms of product mix..

Okay. Understood. Got it. And then maybe if we can just talk about just the sales in shooting sports.

Mark, you mentioned that some of the retailers have said -- how much of the sequential improvement in sales is due to market stabilization and how much do you think is due to share gains, if you could talk about that it would be helpful?.

Yes. I have mentioned in the past, I think as we go through this correction and come out and begin to stabilize in the market, a lot of the smaller brands, smaller manufacturers will find themselves being squeezed out. I think that’s going on right now. I think you see inventory liquidity in some of those smaller brands and reconsolidating.

So that helps us in terms of market share. So, I believe that is occurring and we will be very aggressive in the market as we always are with our brands and with our offering and with our programs for key wholesalers and retailers to capture some of that share.

I also think when you just look at new participants in the shooting sports since 2010 through ’15 there has been about 17 million new shooters in the shooters participating in the shooting sports. So that’s a pretty good number. About half of those have been female. Two-thirds of them are between the ages of 18 and 34.

So all of those metrics, I think are also a part of what you are seeing. You are seeing more participation. You are seeing a different mix, which we think is very healthy for the industry in terms of demographics. So, I think it’s a combination, Jay of some consolidation, allowing us to recapture some share, which was lost when demand outpaced supply.

But I also think that the overall growth of participation and activity in the shooting sports is going to contribute to this stability going forward and should allow us to achieve organic growth..

Our next question comes from Gautam Khanna with Cowen and Company. Your line is now open..

Yes. Good morning, Mark..

Good morning..

Had a couple quick questions. In terms of the gross profit margins at Outdoor Products, it sounds like if you just take the $9 million of contribution and the $24 million of inorganic, it would be acquisitions, perhaps something like a 37% margin.

Is that the right number and is that excluding the step up or how should we think about that one?.

I think it’s directionally. I mean, I think it’s directional, correct. One of the things we told you, Gautam, when we did acquisitions on one of our strategies with acquisitions was to look at companies, which could bolster the profitability and performance of just Outdoor.

And so those companies have strong gross margins and I think as we mentioned with both of them, we were pleased when we acquired them that they would help lift the overall margins of the company. So, directionally, I think you are generally correct.

And in terms of the part -- your question about the inventory step up, you will recall that the numbers we disclosed and I discussed were adjusted results, which had taken out the impact of a transaction-related expenses including inventory step up.

So with the calculation, we did was directional correct and excluded the impact of inventory step up, which is listed in adjustment and in the table, which is relatively small. But just to make sure you understand those are adjusted out when we do that calculation..

Got it. And there was nothing -- so the general mix of these new acquisitions is just better. I mean, there is a higher margin contribution and that doesn’t change. There is nothing unusual..

There was nothing unusual in the quarter about our sales. There was nothing unusual in the quarter when reporting about something that happened in their markets with their products or anything like that, Gautam. There was general product sales of their offering within the quarter to their consumers and outlet.

And so as I said, these are great companies. We think they are going to bolster our strategy. We actually think we can improve their performance as we go forward..

Your next question comes from Brian Ruttenbur with BB&T. Your line is now open..

Yes. Thank you very much. It’s an A and B question, got to get two questions done quickly. Interest expense moving forward, is there any other charges that will be related to the whole ATK situation, so that's part a.

Part b, which is totally different, is the Shooting Sports -- the quarter was -- it’s been asked over again but I'm asking it from a different angle.

Is it because of the mix of business, was it the more expensive rifle selling or was it that you didn't discount, because a lot of your competitors were discounting? So, interest expense and then discounting and mix..

Yes. On the first one, specific to interest expense, there will be no additional charges related to the split from Orbital ATK. We are now working our own interest expense. The interest expense for 4Q obviously includes some amortization of the upfront costs of the deck we took on. So that’s very clean.

But more broadly in terms of charge of Orbital ATK, Mark mentioned were large yields of the Transition Services Agreement, there were some minor additional expenses sitting in there at an immaterial level.

And then the only remaining item that will really affect is before we do the true-up of taxes with Orbital ATK under its transition service -- under Tax Matters Agreement, which were signed as part of that -- where we do a synthetic tax return as if we’ve seen together and determine our respective tax burden.

But there is no additional operating charges or interest charges, which are going to hit us from Orbital ATK..

And on part b, Brian, of your question, in terms of the quarter in Shooting Sports and particular in firearms, we did not do any broad kind of discounting across our Savage firearm lines. We did offer some rebates this year, as we've gone through the season.

We have seasonal promotions, which we offer because we are in the hunting season and so some of our hunting rifles are offered through promotions with few retailers who will advertise through co-op advertising and promoting some of those Savage firearms.

But there was not a broad reduction across the line where we are really taking price out, trying to sell. That’s not our strategy and we didn’t employ that this fall. I think the A17 solution has been very well-received. It’s created a halo effect, I think recently around the Savage brand.

We will look more closely at the innovation we’ve delivered in the Savage brand with things like our AccuStock and our AccuTrigger or out of the box accuracy for the value of the price of that firearm.

And we simply are having a really terrific season and the guys who are in the factory doing a great job managing costs, which is bolstering and supporting these higher margins Steven talked about in our Savage lines and that’s really what’s driving the business..

Our next question comes from Jim Chartier with Monness, Crespi & Hardt. Your line is now open..

Thanks for taking my question.

Can you just give us a sense how much of your ammunition you believe is used for haunting versus target shooting? And how do you feel the weather impacts the target shooting part of the business?.

Okay. So, let me talk first with that back piece. In terms of the weather, weather is an interesting element in outdoor recreation. Obviously, if it doesn’t snow you don’t have great ski seasons.

And if you don’t have -- if you have overly wet winters, you lose some of the wildlife populations and in our case what involves, one of the things that contribute to a delay or a slow start in the hunting season, which sometimes can never materialize.

So, I know if you listen to some of the key retailers you talked about this and I think even some of the manufacturers in the shooting sports have had their earnings call prior to this call, Jim. You’ve heard this reference to weather broadly discussed. So, we would never look to blame an external force on company performance.

We're really pleased with the company’s performance. We think we are doing great. We are very excited about our strategy and our future and this quarter’s results are very solid.

But that said, we have to tell you that weather does contribute and did contribute to a slow back half of our second quarter and it could slowdown the third quarter, which we are in right now depending on how people respond and how the hunting season picks up.

Hunting season and bird migrations and things do augur around weather and so we are impacted by it and it has not been a favorable fall. And in terms of the split of our ammunition, unfortunately, we haven’t disclosed that for competitive reasons and don’t disclose.

But typically, we had different brands, which catered to those market and our relative size of our brands is closely held for competitive reasons..

Our next question comes from Robert Sassoon with R.F. Lafferty. Your line is now open..

Good morning. Thanks for taking my questions. I have a question on the two acquisitions.

Can you give us a sense of their underlying performance in terms of how the quarter’s results compared with that and I know they weren’t part of the group but their performances in the year ago quarter? And could you just maybe quantify what sort of synergies, integration synergies, you expect to get out of those acquisitions in the back half of the year, targets? Mark, the final question I have is could you give us a some sort of sense of your acquisition pipeline whether if there is certain acquisition down the road and maybe in this calendar year or the next financial year comes to conclude?.

Okay. So, starting with the questions about the two acquisitions we completed. So, I will take the second part of the first part of your question first. In terms of synergies, we expect to derive from both of those acquisitions.

As we discussed on our last call, when we really announced those acquisitions and discussed the likely impact on it, both of the acquisitions are more focused on revenue synergies than cost synergies. These are not acquisitions where we expect to take out a lot of costs. On the one hand in Jimmy Styks, it’s a very small operation right now.

There are not a lot of costs to take out. We are really augmenting the current operation with additional sales and marketing resources to improve their performance in the end market.

And in the case of CamelBak, very strong, well run company where a lot of the infrastructural, where maintenance plays and what we will really bring to bear there is additional selling capability to introduce CamelBak products into our existing sales channel.

So it’s not going to be a cost synergy play, really revenue synergy plays where we can get cross-selling of CamelBak’s products, taking both product into our current customer sets and increased sales of our current products into their customer set. So, I think you will see those develop over time.

Revenue synergies unlike cost synergies take a little longer to develop because you have to get to a new buying season with your customers and those will develop over the next 12 to 18 months. There will be some cases near-term that we will see in the next 6 months but it’s really a long-term sales synergy development effort where we have underway.

In terms of our year-over-year performance, I’m going to slightly hedge here that we are not breaking out separate results for Jimmy Styks and CamelBak with price of the acquisitions overall. The CamelBak’s external results, our previous year results are available as part of the Compass Diversified, which was a public company.

You can certainly get those from Compass’ previous 10-Qs and 10-Ks and you can compare it to our current results, obviously Jimmy Styks, this time of the year -- current year as a paddle board company where you largely have a season for them. So, a significant portion of our current quarter results come from CamelBak.

So if you want, you can certainly do a comparison of our current quarter results, for the previous quarter but we’re not going to do that specific breakdown for you. And I’ll let Mark talk about the acquisition pipeline..

Yeah. The only think I would add to Steven’s comments in terms of performance is their performance is in line with our expectations. The performance in the quarter of both of those M&A activities are aligned with the model we put together when we -- our analysis of these companies and we’re very happy with their performance.

Nothing in their performance in the quarter is disappointing, nothing is surprising. So, they’re performing pretty much exactly as we expected them to in hitting, seeing the expectations we set for them, so we’re happy with that. In terms of the acquisition pipeline, we do continue to work that pipeline.

As I’ve used some word in the past that it is robust. I would use that word again right now that even after completing the Jimmy Styks and CamelBak acquisitions, the pipeline is robust. There are lots of opportunities in the $63 billion outdoor recreation market and we are pursuing those and we have lots of irons in the fire.

And it’s unlikely we will be announcing acquisition every quarter for Vista’s existence.

But we are confident that our strategy to find the right kind of companies that will bolster our portfolio and allow us to continue to drive this leadership position and outdoor rec is going to pay off for us and we’re very much engaged in that process every day..

And just as one go back, obviously on both Jimmy Styks and CamelBak even more so. We are somewhat less than the fourth quarter of results in our numbers right now, which all makes the year-over-year comparison challenging because I think the relative part we’d like to look at it is since we’ve acquired them rather than just the results before hand.

But as Mark said, it’s completely on line with our expectations. So, we are very happy with the results today done with the projected performance of both businesses..

[Operator Instructions] We’ll take our next question, the follow-up question from Gautam Khanna with Cowen and Company. Your line is now open..

Yes. Thank you. I was wondering if you could just elaborate on the type of acquisitions you’re looking at in the pipeline really relative size, maybe some characteristics on whether you’re looking at things in the Shooting Sports market as well.

And any sort of color you can give there?.

Sure, sure. Gautam, the benefit of asking the second question is you get your name pronounced right.

Did you know that?.

Well, thank you..

Well, that was great. So Gautam, yeah, I think that’s obviously a question on everybody mind so we flush that out as best I can and give you an update and some color. So when we launch this step or recreated what I think is a very compelling strategy for the company. And that was to look at individual outdoor recreation.

Look at those areas where we’re not chasing team sports and we’re not involved in schools and distribution networks, we don’t understand. But we are pursuing and involved in distribution network so we have extreme expertise.

We understand the consumers of individual outdoor recreation products and we have a portfolio of companies which has proven that they can deliver value to those outdoor recreation consumers pursuing those individual activities. So our strategy going forward is to stay focused on those key lanes.

So for us that includes things like biking and camping and hunting and shooting sports and water sports. It might include fishing. It could include trail sports, snow sports. Anywhere you find individual outdoor recreation pursuits with high performance gear being a requirement. So we’re very much still focused on that strategy.

The companies we’re looking at range in size as you would expect this is a very fragmented market, $63 billion revenue market in the United States and yet the step door is probably the largest pure play in that space. So that could give some idea of how fragmented it is. So the companies we look at range anywhere from $20 million to $200 million.

A lot of companies in that space, the larger the company, the smaller the options are available in terms of targets but that is the range what we’re typically going to find companies in this spaced. We've assembled an M&A team. Steven Nolan is leading that team.

We have bolstered that team and added a couple of other key talents to it in the last quarter. So we have a team which is solely focused on finding the right kind of value creating M&A opportunities in this space as we have defined it. And as I mentioned there are a lot of those companies in our pipeline that we’re looking at.

But we are not going to just go by whatever is for sale at whatever price is demanded. We are going to scrutinize those in terms of our strategy, in terms of value creation and in terms of not only cultural fit but business and financial fit with our objective.

And as I mentioned I’m confident that this process will result in additional fruits from our labor and we’ll be able to announce in the future, other key strategic acquisitions. So we’re happy with the process. We’ve got a dedicated team doing it. The market is right. We’re just making sure that we find the right opportunities and we land them..

Thanks a lot, guys..

You bet..

We’ll take another follow-up question from Steve Cahall with Royal Bank of Canada. Your line is now open..

Thank you.

Just a housekeeping question for you Stephen, so the adjusted guidance has the $0.08 transaction cost, and if you took $0.11 in the quarter for the adjustments between your reported and adjusted number? So is it correct to assume that the guidance includes the $0.08 of transaction, but not the $0.03 of other stuff in the adjusted number?.

The guidance is consistent with our as adjusted number so to include the full $0.11 not the $0.08..

Okay..

So apologies if we confused you there and I can fully understand confusion, because there -- in my remarks I did just referenced transaction costs. I should have said transaction and other adjustments that we typically make..

Okay.

So the difference between reported and adjusted EPS for the year we should assume around $0.11 that we heard about right?.

There is -- the $0.11 plus the small amount we had that we recognized as a charge in the prior quarter. I don’t have that number directly in front of me here, but we did have the small amount we recognized in the first quarter and I -- yeah, I have press release and look at it, but there was a small charge there.

So you would add those together, but turns for the difference between the two..

Okay. I appreciate that. Thank you..

And we’ll take our next question from Rommel Dionisio with Wunderlich. Your line is now open..

Thanks very much.

Just a question on the Shooting Sports segment, circle data would indicate that election years, Presidential Election years, there has been some modest pickup or acceleration in firearms sales trends? And I wonder if you are starting to see as this question might be a little premature, but are you starting to see some preclude on behalf of major retail customers to take a little more inventory with that expectation in mind?.

Yes. It’s really interesting because you're correct in the past, past election periods going back to 2008 we saw pretty significant increases in demand for both firearms and subsequently following that ammunition.

We are not seeing significant uptick yet, even though we have the Primaries near hand and we have the Republican and Democratic debates on prime time. It has not yet seem to have spurred any real peak in firearms or ammunition buying.

And so whether that is because people previously have purchased firearms and ammunition are comfortable with what they have, whether that is because they have built inventory at home. We’re not sure exactly, but it has not driven a significant spike in demand yet. Could that happen next year around the Presidential Election, it’s possible.

Certainly, it would be consistent with past election trends if it does pickup next year in the spring, summer season, so we’ll keep our eye on that. So far it’s been quite muted..

Okay. Thanks very much, Mark..

And it appears we have no further questions at this time. I'll turn the call back to the speakers for closing remarks..

Okay. Well, thank you. Thank you everyone for joining us. We’re please to be able to report another solid quarter for Vista Outdoor.

I'm really thrilled that the management team we put together, the execution excellence we’re demonstrating, the performance we delivered in the last two quarters of the year and looking forward to significant execution of our strategy going forward and excited about what that’s going to bring to us. Appreciate you joining us. Have a good day..

This does conclude today's teleconference. You may now disconnect. Thank you and have a great day..