Vista CEO admits "capacity management"

[Gatorgrizz27]

It’s a mess for sure. Inevitably what happens is the winning companies are able to buy out the others, remove all competition, and do whatever they want, especially with high barriers to entry.

The prices NEEDED to go up in order to have some of it return to the shelves. Otherwise it was a mix of people that probably don’t even own guns buying it up to resell on gunbroker for $1/rd, and guys buying more than they will shoot in their lifetime since “it’s never going to be this cheap again.”

As a business owner, I also get that things have to make financial sense, they can’t just build another factory and run it 24/7 at the same prices they have been selling ammo at with equipment that was paid off 20 years ago.

They also do have to monitor the environment, here the shelves are stacked full of 5.56 and it’s just sitting there, with very little else next to it. Running off another half a billion rounds to sit there in case the next race riot happens in a week isn’t a great move either.

However, I don’t agree with their primary goal being increasing dividends for shareholders (not just being profitable in general). I know it’s altruistic, and I feel the same about the music industry, etc, that you have to care about making a good product and meeting your customers needs.

It doesn’t sit well with me to artificially limit supply in order to keep prices as high as possible. I want to take on the most profitable jobs, but also want to grow as long as it’s sustainable.

What this will probably lead to is them dropping many ammo and even cartridge choices to remain leaner and more easily adaptable. You’ll be able to get a couple .30-06 deer loads and 1-2 elk loads, rather than the 40 or so available now. Of course they will brand, market, and package them differently so it appears like there are still a bunch of choices. Older stuff like .250-3000 Savage and maybe even slightly more common stuff like .220 Swift might get dropped entirely.

 

[tdhanses]

You CAN'T convince me that the COGS has gone up 100% in 5 (or 10) years in the ammo market. You CAN convince me that there are fewer BIG players in said market.

Companies like RMR bullets are selling bullets made in house for about 25% over a few years ago. Yep, copper went up some as did wages... but not 100% (what a box of ammo is today compared to a few years back).

Let producers from China/Europe come in and ammo would cost 1/2 of what it does today. This is "protectionism" at it's best (worst). Free enterprise practiced correctly, would put pricing AT market. But when you OWN the market (in the US)... we pay $50 a box for 20 shells. And the small guys "follow the leader" in that pricing. Econ: 101 folks.

But what about buying made in the US, it cost more then free labor markets.

 

[QuackAttack]

I foresee small and mid size makers doing big things. Hornady, Black Hills, Sig, and others.


The sad thing is Winchester….they are in MS and could be doing great things. Instead, their ammo is mediocre, old tech on bullets, stupid coating, very limited projectile selection for anything outside deer hunting, and horrid steel shot that is a laughing stock.

Win could own this…and they don’t. Typical Winchester.

 

[TheTone]

I wonder what ammo availability would be like if people weren’t panic buying, stockpiling, hoarding or buying just to resell at a profit? Most of my local stores have purchase limits, it’s common to overhear people talking about buying stuff just to resell, and I certainly haven’t seen a massive increase in people out shooting all the ammo they’ve been buying up

 

[Mtnboy]

Is this the same company that bought Stone Glacier that so many here were praising for being awesome and super supportive of the 2A ?

 

[Forestryguy]

Is this the same company that bought Stone Glacier that so many here were praising for being awesome and super supportive of the 2A ?

Sure is. They were all happy when stock price went up. This country has become about earning everything with as little to no input, individually.

 

[Forestryguy]

However, I don’t agree with their primary goal being increasing dividends for shareholders (not just being profitable in general). I know it’s altruistic, and I feel the same about the music industry, etc, that you have to care about making a good product and meeting your customers needs.

Most if not all major companies and conglomerates are only about increasing dividends for share holders anymore, and giving CEOs multi-million dollar bonuses. John Deere, Kellogs and several others are some that where in the news this year. They got push back and had to cave to their employees demands due to not being able to hire skilled labor. Even the railroad industry is getting bought up or controlled by outside investment groups that are forcing long standing CEOs out. That entire industry, at least the Class 1 RRs, have been shitting on their customers that they service for years. They do not want to put the man hours into switching at industries. They only want to run trains on the main lines and charge premium fees when they do have to switch industries out. They hire on a glut and let people go at a drop of a hat to not pay guaranteed contract wages. It is so bad in that industry that most people pay for wage insurance to make sure they will get a pay check when they are suspended without pay for the smallest things. But mid and upper management can screw the crews over, at the instruction of the higher ups and majority share holders that just want profits.

 

[commandoNate]

Or start reloading and buy your components from brands not owned by ADG.

Please don’t suggest that people start reloading. It’s already impossible to find primers!

 

[sneaky]

Here’s some pretty solid proof of vista limiting supply to keep prices high. This ammo has been out of stock on the federal website for over a year. The price has increased twice in that time. I received notification via email a couple weeks ago that it was available and ordered 3 boxes. In the package was 1 new meat eater branded box and two old stock boxes. Sure looks like they’ve been sitting on these rounds while showing out of stock and increasing the price.

308 stuff is everywhere around here

Sent from my SM-G955U using Tapatalk

 

[tdhanses]

I was just waiting for someone to catch it. Funny how some of the same sycophants that praised SG and chastised negative comments are now on this thread condemning Vista. Keyboard posers with no real values.

If people don’t like how companies run their business they should start their own, Vista is a business that supports the 2A but it also is a corporation under SEC guidelines and it’s owners want to see returns on their investments especially as prices increase for materials to create goods. Do you want a return on your dollars you invest?

It would be silly for a business to invest 100’s of millions in what will probably be a short term supply/demand issue and they have to look to their future. Most people are selfish and only care about their immediate selves, wants and desires, companies also have wants, desires and needs.

 

[QuackAttack]

The issue, for me, is that there is no ammo shortage at this point. There is a surplus of 9, 5.56, 7.62, and buck. Literally pallets at local shops.

This says that they have capacity…they are using it for the above and intentionally creating shortages of common hunting calibers and shotgun shells.

that is wilful and intentional….and wrong. Combine it with the allegation that they are abusing suppliers and threatening them if they supply smaller makers…


Thats a monopoly asking for gov intervention.

 

[cuerro viejo]

Vista is publicly traded you can lookup individual division revenues,


Example Alliant Powder has gone from 16 mil in revenue to 6mil many from a lack of ability to produce caused by lack of raw materials.

Some times it's easier to just do the research your self instead of relying on opinionated articles.

Every one should tune into the earnings call if you want to have an opinionated but....actually informed opinion

 

[260madman]

3yrs ago Vista low stock price was $4.29. A month ago it was $52.69. At close today it’s $45.36.

The issue, for me, is that there is no ammo shortage at this point. There is a surplus of 9, 5.56, 7.62, and buck. Literally pallets at local shops.

This says that they have capacity…they are using it for the above and intentionally creating shortages of common hunting calibers and shotgun shells.

that is wilful and intentional….and wrong. Combine it with the allegation that they are abusing suppliers and threatening them if they supply smaller makers…


Thats a monopoly asking for gov intervention.

Pics? I’d love to see it and the price.

 

[tdhanses]

The issue, for me, is that there is no ammo shortage at this point. There is a surplus of 9, 5.56, 7.62, and buck. Literally pallets at local shops.

This says that they have capacity…they are using it for the above and intentionally creating shortages of common hunting calibers and shotgun shells.

that is wilful and intentional….and wrong. Combine it with the allegation that they are abusing suppliers and threatening them if they supply smaller makers…


Thats a monopoly asking for gov intervention.

If only allegations were proof.

 

[MattB]

Vista is publicly traded you can lookup individual division revenues,


Example Alliant Powder has gone from 16 mil in revenue to 6mil many from a lack of ability to produce caused by lack of raw materials.

Some times it's easier to just do the research your self instead of relying on opinionated articles.

Every one should tune into the earnings call if you want to have an opinionated but....actually informed opinion

This place wouldn't be any fun if posters actually knew what they were talking about. ;-)

But to your point, this is the link to Vista Outdoors' 10-K (annual report) for its fiscal year ending 3/31/21.

Inline XBRL Viewer

I thought this excerpt might be particularly interesting to many:

"Shooting Sports Industry
Hunting and shooting-sports related products currently represent a majority of our sales. We design, source, manufacture, and sell ammunition and hunting and shooting related optics and accessories through our Federal, Remington, CCI, Speer, Bushnell and Primos brands, among others. Among these categories, we derive the largest portion of our sales from ammunition, which is a consumable, repeat purchase product.

Sales of hunting and shooting-sports related products, including ammunition, are heavily influenced by hunting and recreational shooting participation rates, civil unrest and the political environment. The market for shooting sports products softened dramatically following the 2016 U.S. presidential election but began to recover in the fourth quarter of our fiscal year 2020. During our fiscal year 2021, we saw a continuance of these participation trends in the industry and in our business with our end users seeking empowerment and personal protection. The extent and duration of this increase in demand for hunting and shooting-sports related products is uncertain. We expect that during our fiscal year 2022 demand for hunting and shooting-sports related products will be influenced by the continued participation trends, nationwide civil unrest, the COVID-19 pandemic, and their associated impacts on general economic and retail conditions.

We believe that these long-term participation trends support our expectation of continued increased demand for hunting and shooting-sports related products. Participation rates have remained strong despite the COVID-19 pandemic and nationwide civil unrest, and we are seeing an expanded demographic of users. This broadened end consumer base has resulted in a much larger total addressable market opportunity for the industry and for our company. We expect to see continued increases in participation as consumers look to local outdoor activities as a substitute for travel and other competing pursuits impacted by the COVID-19 pandemic. We believe we are well-positioned to succeed and capitalize on this demand given our scale and global operating platform, which we believe is particularly difficult to replicate in the highly regulated and capital-intensive ammunition manufacturing sector."

 

[tdhanses]

This place wouldn't be any fun if posters actually knew what they were talking about. ;-)

But to your point, this is the link to Vista Outdoors' 10-K (annual report) for its fiscal year ending 3/31/21.

Inline XBRL Viewer

I thought this excerpt might be particularly interesting to many:

"Shooting Sports Industry
Hunting and shooting-sports related products currently represent a majority of our sales. We design, source, manufacture, and sell ammunition and hunting and shooting related optics and accessories through our Federal, Remington, CCI, Speer, Bushnell and Primos brands, among others. Among these categories, we derive the largest portion of our sales from ammunition, which is a consumable, repeat purchase product.

Sales of hunting and shooting-sports related products, including ammunition, are heavily influenced by hunting and recreational shooting participation rates, civil unrest and the political environment. The market for shooting sports products softened dramatically following the 2016 U.S. presidential election but began to recover in the fourth quarter of our fiscal year 2020. During our fiscal year 2021, we saw a continuance of these participation trends in the industry and in our business with our end users seeking empowerment and personal protection. The extent and duration of this increase in demand for hunting and shooting-sports related products is uncertain. We expect that during our fiscal year 2022 demand for hunting and shooting-sports related products will be influenced by the continued participation trends, nationwide civil unrest, the COVID-19 pandemic, and their associated impacts on general economic and retail conditions.

We believe that these long-term participation trends support our expectation of continued increased demand for hunting and shooting-sports related products. Participation rates have remained strong despite the COVID-19 pandemic and nationwide civil unrest, and we are seeing an expanded demographic of users. This broadened end consumer base has resulted in a much larger total addressable market opportunity for the industry and for our company. We expect to see continued increases in participation as consumers look to local outdoor activities as a substitute for travel and other competing pursuits impacted by the COVID-19 pandemic. We believe we are well-positioned to succeed and capitalize on this demand given our scale and global operating platform, which we believe is particularly difficult to replicate in the highly regulated and capital-intensive ammunition manufacturing sector."

And it makes perfect sense as they are only providing an outlook for this year and even state how expensive it is to manufacture ammo, sounds very capital intensive to even expand. Business looks like it’ll be good for the next year.

 

[cuerro viejo]

This place wouldn't be any fun if posters actually knew what they were talking about. ;-)

But to your point, this is the link to Vista Outdoors' 10-K (annual report) for its fiscal year ending 3/31/21.

Inline XBRL Viewer

I thought this excerpt might be particularly interesting to many:

"Shooting Sports Industry
Hunting and shooting-sports related products currently represent a majority of our sales. We design, source, manufacture, and sell ammunition and hunting and shooting related optics and accessories through our Federal, Remington, CCI, Speer, Bushnell and Primos brands, among others. Among these categories, we derive the largest portion of our sales from ammunition, which is a consumable, repeat purchase product.

Sales of hunting and shooting-sports related products, including ammunition, are heavily influenced by hunting and recreational shooting participation rates, civil unrest and the political environment. The market for shooting sports products softened dramatically following the 2016 U.S. presidential election but began to recover in the fourth quarter of our fiscal year 2020. During our fiscal year 2021, we saw a continuance of these participation trends in the industry and in our business with our end users seeking empowerment and personal protection. The extent and duration of this increase in demand for hunting and shooting-sports related products is uncertain. We expect that during our fiscal year 2022 demand for hunting and shooting-sports related products will be influenced by the continued participation trends, nationwide civil unrest, the COVID-19 pandemic, and their associated impacts on general economic and retail conditions.

We believe that these long-term participation trends support our expectation of continued increased demand for hunting and shooting-sports related products. Participation rates have remained strong despite the COVID-19 pandemic and nationwide civil unrest, and we are seeing an expanded demographic of users. This broadened end consumer base has resulted in a much larger total addressable market opportunity for the industry and for our company. We expect to see continued increases in participation as consumers look to local outdoor activities as a substitute for travel and other competing pursuits impacted by the COVID-19 pandemic. We believe we are well-positioned to succeed and capitalize on this demand given our scale and global operating platform, which we believe is particularly difficult to replicate in the highly regulated and capital-intensive ammunition manufacturing sector."

Same report also states that as a percentage their outdoor products outgrew their shooting sports products Year over year by a significant margin. Think outdoor products was up 47%

I get frustrations with shortages, I been waiting on a clutch bearing for a Polaris for two months. My 28 nosler load work up and 200 rds, probably cost me 5x more then it would of in 19.

No.matter what business is out there, they are regulated by supply and demand, from components to consumers

 

[cuerro viejo]

And it makes perfect sense as they are only providing an outlook for this year and even state how expensive it is to manufacture ammo, sounds very capital intensive to even expand. Business looks like it’ll be good for the next year.

Their year end us coming up in March. Will be interesting to see 2021 numbers

 

[Zappaman]

If people don’t like how companies run their business they should start their own, Vista is a business that supports the 2A but it also is a corporation under SEC guidelines and it’s owners want to see returns on their investments especially as prices increase for materials to create goods. Do you want a return on your dollars you invest?

It would be silly for a business to invest 100’s of millions in what will probably be a short term supply/demand issue and they have to look to their future. Most people are selfish and only care about their immediate selves, wants and desires, companies also have wants, desires and needs.

And when it's a fair market... I agree 100% here (but it's not).

Yes, lets start a company (starting down a few hundred million in factories, tools, materials, etc.). IF you can find 200 million (or so) and also find some risky investors, you could "break in". But otherwise, a few KEY items (primers, powder) are locked into the control of a few producers (and importers)... who again are making (in some cases) 2-3 times what they were in a HEALTHY market with competition otherwise keeping prices in check.

"Oligopoly"... the new form of American "capitalism" and of you can afford the stock... well then you can hedge you position... while the average American pays twice the margin WE used to for 70 years prior.

Again... it's politics and big money MAKING al LOT more money off a prime market fueled by high demand. Remington must have been "inbred" to lose in such a healthy market-- and they got "swooped" up fast here by the same company we are chatting about here >

 

[260madman]

If you were to start your own company primers would be a huge issue as Vista owns 3 out of 4 American companies that produce them and Olin is the other. Olin is holding hands with Vista these days. I’m not counting Remington in this. Hornady make their own as does Sig. Good luck getting imported primers because they’re taking care of their own. Fiocchi makes some but they also have an ammo plant in the US to feed.

Brass? Good luck. Vista is beating up their supplier and not playing nice at all because this company needs primers to load ammo of their own. ”We want it cheaper because we are going to raise our prices”. Lower your margins so we can raise ours.

We won’t touch on powder because that’s a big mess also.