VISTA OUTDOOR INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (type 10-Ok)

The following discussion and analysis should be read in conjunction with our

Consolidated Financial Statements and related notes appearing elsewhere in this

Annual Report. This section and other sections of this Annual Report contains

forward-looking statements within the meaning of the Private Securities

Litigation Reform Act of 1995. See “Forward-Looking Statements” and Part I, Item

1A. “Risk Factors” included in this Annual Report.

(Dollar amounts in thousands except share and per share data or unless otherwise

indicated)

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations

are based on our consolidated financial statements, which have been prepared in

accordance with accounting principles generally accepted in the U.S. In

preparing the consolidated financial statements, we make estimates and judgments

that affect the reported amounts of assets, liabilities, sales, expenses, and

related disclosure of contingent assets and liabilities. We re-evaluate our

estimates on an on-going basis. Our estimates are based on historical experience

and on various other assumptions that we believe to be reasonable under the

circumstances. Actual results may differ from these estimates under different

assumptions or conditions. We review our estimates on an ongoing basis to ensure

the estimates appropriately reflect changes in our business and the most recent

information available.

We believe the critical accounting policies discussed below affect our most

significant estimates and judgments used in the preparation of our consolidated

financial statements. For a complete discussion of all our significant

accounting policies, see Note 1, Significant Accounting Policies, to the

consolidated financial statements in Part II, Item 8 of this Annual Report.

Revenue Recognition

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.

Allowance for Estimated Credit Losses

We maintain an allowance for credit losses related to accounts receivable for

future expected credit losses resulting from the inability or unwillingness of

our customers to make required payments. We estimate the allowance based upon

historical bad debts, current customer receivable balances, age of customer

receivable balances, and the customers’ financial condition and in relation to a

representative pool of assets consisting of a large number of customers with

similar risk characteristics. The allowance is adjusted as appropriate to

reflect differences in current conditions as well as changes in forecasted

macroeconomic conditions.

Inventories

Our inventories are valued at the lower of cost or net realizable value. We

evaluate the quantities of inventory held against past and future demand and

market conditions to determine excess or slow-moving inventory. For each product

category, we estimate the market value of the inventory comprising that category

based on current and projected selling prices. If the projected market value is

less than cost, we provide an allowance to reflect the lower value of the

inventory. This methodology recognizes projected inventory losses at the time

such losses are evident rather than at the time goods are actually sold. The

projected market value of the inventory may decrease due to consumer

preferences, legislative changes, or loss of key contracts among other events.

Income Taxes

Provisions for federal, state, and foreign income taxes are calculated based on

reported pre-tax earnings and current tax law. Such provisions differ from the

amounts currently receivable or payable because certain items of income and

expense are recognized in different time periods for financial reporting

purposes than for income tax purposes. Significant judgment is required in

determining income tax provisions and evaluating tax positions. We periodically

assess our liabilities and contingencies for all periods that are currently open

to examination or have not been effectively settled based on the most current

available information. Where it is not more likely than not that our tax

position will be sustained, we record the entire resulting tax liability and

when it is more likely than not of being sustained, we record our best estimate

of the resulting tax

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liability. As per our policy, any applicable interest and penalties related to

these positions are also recorded in the consolidated financial statements. To

the extent our assessment of the tax outcome of these matters changes, such

change in estimate will impact the income tax provision in the period of the

change.

Deferred tax assets are assessed to determine whether it is more likely than not

that some portion or all of the deferred tax assets will be realized.

Significant estimates are required for this analysis. If we determine it is not

more likely than not that all of the deferred tax assets will be realized, a

valuation allowance will be recorded. Changes in the amounts of valuation

allowance are recorded in the tax provision in the period when the change

occurs.

Accounting for goodwill and indefinite-lived intangibles

We test goodwill and indefinite lived intangible assets annually or upon the

occurrence of events or changes in circumstances that indicate that the asset

might be impaired.

We estimate fair value to assess the recoverability of our goodwill and

indefinite lived intangible assets using a discounted cash flow model. Our

assumptions used to develop the discounted cash flow analysis require us to make

significant estimates regarding future revenues and expenses, projected capital

expenditures, changes in working capital, and appropriate discount rates. The

projections also take into account several factors including current and

estimated economic trends and outlook, costs of raw materials and other factors

that are beyond our control. If the current economic conditions were to

deteriorate, or if we were to lose significant business, causing a reduction in

estimated discounted cash flows, it is possible that the estimated fair value of

certain reporting units or indefinite lived intangible assets could fall below

their carrying value resulting in the necessity to conduct additional impairment

tests in future periods. We continually monitor the reporting units and

indefinite lived intangible assets for impairment indicators.

Business Combinations

We allocate the purchase price, including contingent consideration, of our

acquisitions to the assets and liabilities acquired, including identifiable

intangible assets, based on their fair values at the date of acquisition. The

fair values are primarily based on third-party valuations using our management

assumptions that require significant judgments and estimates. The purchase price

allocated to intangibles is based on unobservable factors, including but not

limited to, projected revenues, expenses, customer attrition rates, royalty

rates, a weighted average cost of capital, among others. The weighted average

cost of capital uses a market participant’s cost of equity and after-tax cost of

debt and reflects the risks inherent in the cash flows. The unobservable factors

we use are based upon assumptions believed to be reasonable, but are also

uncertain and unpredictable, as a result these estimates, and assumptions may

require adjustment in the future if actual results differ from our estimates.

Contingent Consideration

Our approach to valuing the initial contingent consideration associated with the

purchase price uses unobservable factors such as projected revenues and expenses

over the term of the contingent earn-out period, discounted for the period over

which the contingent consideration is measured, and volatility rates. Based upon

these assumptions, the initial contingent consideration is then valued using a

Monte Carlo simulation analysis in a risk-neutral framework. As of March 31,

2022, the contingent consideration liability consists of the estimated amounts

due for earn-out payments from fiscal year 2023 through 2026. On a recurring

basis, we adjust the contingent consideration liability to fair value based on

the estimated probability of achieving the earn out targets and changes in any

of the other Level 3 inputs above. To the extent our estimates change in the

future regarding the likelihood of achieving these targets, we may need to

record material adjustments to our contingent consideration liabilities.

See Note 1, Significant Accounting Policies, to the consolidated financial

statements in Part II, Item 8 of this Annual Report, for discussion of new

accounting pronouncements.

Executive Summary

Fiscal year 2022 record results and significant growth were supported by strong

demand in the market for our portfolio of iconic brands, including the seven new

brands acquired during the last two fiscal years.

Financial Highlights and Notable Events of fiscal year 2022

•Net sales increased $819,099 or 36.8%, over the prior fiscal year.

•Sporting Products net sales increased $618,137, or 55.2%.

•Outdoor Products net sales increased $200,962, or 18.2%.

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•Gross profit increased $476,272, or 75.2%, as compared to the prior fiscal

year. Gross profit as a percentage of sales, increased to 36.4%, an increase of

799 basis points over the prior fiscal year.

•Sporting Products gross profit increased $399,930, or 128.1%.

•Outdoor Products gross profit increased $78,024, or 24.3%

•EBIT increased $361,264, or 126.8%, as compared to the prior fiscal year. EBIT

as a percentage of sales increased to 21.2%, an increase of 842 basis points

over the prior fiscal year.

•Fiscal year 2022 income was $473,226, or $8.00 per diluted share, an increase

of $207,214, or $3.56 per diluted share over the prior fiscal year.

•We acquired QuietKat Inc. (QuietKat) during the first fiscal quarter of 2022,

Foresight Sports (Foresight) and Fiber Energy Products (Fiber) during the third

fiscal quarter of 2022, and Stone Glacier during the fourth fiscal quarter of

2022. See Note 7, Acquisitions and Divestitures, of the consolidated financial

statements in Part II, Item 8 of this Annual Report, for a discussion of our

acquisitions during fiscal year 2022.

•We repurchased 2,981 shares for a total of $113,165 during fiscal year 2022

under our 2021 Share Repurchase Program and our 2022 Share Repurchase Program.

See Part II, Item 5 of this Annual Report, for details on our share repurchase

programs.

•On May 5, 2022, we announced that our Board of Directors has unanimously

approved preparations for the separation of our Outdoor Products and Sporting

Products reportable segments into two independent, publicly-traded companies

(the “Planned Separation”). We anticipate that the transaction will be in the

form of a distribution to our shareholders of 100% of the stock of Outdoor

Products, which will become a new, independent publicly traded company. The

distribution is intended to be tax-free to U.S. shareholders for U.S. federal

income tax purposes. We currently expect the transaction will be completed in

calendar year 2023, subject to final approval by our Board of Directors, a Form

10 registration statement being declared effective by the U.S. Securities and

Exchange Commission, regulatory approvals and satisfaction of other conditions.

There can be no assurance regarding the ultimate timing of the proposed

transaction or that the transaction will be completed.

Outlook

Sporting Products Industry

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. We believe that long-term

participation trends support our expectation of continued increased demand for

hunting and shooting-sports related products. Participation rates have remained

strong, 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 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.

Outdoor Recreation Industry

We believe that long-term outdoor participation trends combined with a larger

base of participants supports our expectation of continued increased demand for

the innovative outdoor recreation-related products produced by our Outdoor

Products brands. Participation rates have remained strong and we are seeing an

expanded demographic within our end users. Our Outdoor Products brands hold a

strong competitive position in the marketplace, and we intend to further

differentiate our brands through focused research and development and marketing

investments including increased use of social media and other digital marketing.

Following significant investments in our brands’ e-commerce capabilities, both

directly and through our E-Commerce Center of Excellence, we believe our brands

are well-positioned to benefit from the ongoing shift in consumer shopping

behavior to utilize online channels.

Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of

Operations (MD&A) is intended to provide a reader of our financial statements

with a narrative from the perspective of our management on our financial

condition, results of operations, liquidity, and certain other factors that may

affect our future results. The following information should be read in

conjunction with our consolidated financial statements included in this Annual

Report.

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Fiscal Year 2022 Compared to Fiscal Year 2021

Our net sales, gross profit, gross profit as a percentage of net sales (gross

profit margin), EBIT, EBIT as a percentage of net sales (EBIT margin), interest

expense, and tax provision by reporting segment and by corporate and other

(where applicable) are presented below (dollars in thousands):

Years ended March 31, Change

Net Sales: 2022 2021(1) Dollars Percent

Sporting Products $ 1,737,891 $ 1,119,754 $ 618,137 55.2 %

Outdoor Products 1,306,730 1,105,768 200,962 18.2 %

Total $ 3,044,621 $ 2,225,522 $ 819,099 36.8 %

(1) We modified the structure of our reportable segments during the third

quarter of fiscal year 2022. Accordingly, prior period amounts have been

reclassified to conform with the current period presentation. See Note 18,

Operating Segment Information, to the consolidated financial statements in Part

II, Item 8 of this Annual Report.

Sporting Products-The fiscal year 2022 period includes sales from Remington and

HEVI-Shot, which we acquired in the third and fourth quarters, respectively, of

the prior fiscal year. The increase also reflects improved pricing and strong

demand in the market across our Sporting Products line, and production increases

over the prior year at all of our facilities. These increases were partially

offset by a reduction of sales from small rifle ammunition produced at the Lake

City Army Ammunition Plant.

Outdoor Products-The increase in sales was driven by continued demand in the

market for most of our categories, and was not restricted by retail store

closures that impacted the prior year. The increase also reflects sales from

businesses acquired in the current fiscal year. This was partially offset by a

decline in our Outdoor Cooking business caused primarily by declining e-commerce

sales as foot traffic returned to brick and mortar stores.

Years ended March 31, Change

Gross Profit: 2022 2021(1) Dollars Percent

Sporting Products $ 712,160 $ 312,230 $ 399,930 128.1 %

Outdoor Products 399,447 321,423 78,024 24.3 %

Corporate and other (2,375) (693) (1,682) (242.7) %

Total $ 1,109,232 $ 632,960 $ 476,272 75.2 %

Gross profit margin 36.4% 28.4%

Sporting Products-The fiscal year 2022 period gross profit includes profits from

Remington and HEVI-Shot, which we acquired in the third and fourth quarters,

respectively, of the prior fiscal year. The increase also reflects improved

pricing, sales volume and operating efficiencies. These increases were partially

offset by increased commodity and input costs. Gross profit margin was 41.0%

compared to 27.9% in the prior year.

Outdoor Products-The increase in gross profit was primarily driven by sales

volume and operating efficiencies, partially offset by higher logistics costs,

input costs, and sales channel mix. The increase also reflects gross profit from

acquisitions that occurred during the current fiscal year. Gross profit margin

was 30.6% compared to 29.1% in the prior year.

Corporate and Other-The decrease in corporate gross profit was due to inventory

step-up expenses from acquisitions during the current year.

Years ended March 31, Change

EBIT: 2022 2021(1) Dollars Percent

Sporting Products $ 600,415 $ 222,713 $ 377,702 169.6 %

Outdoor Products 164,494 137,942 26,552 19.2 %

Corporate and other (118,687) (75,697) (42,990) (56.8) %

Total $ 646,222 $ 284,958 $ 361,264 126.8 %

EBIT margin 21.2% 12.8%

Sporting Products-The increase in EBIT was primarily driven by the gross profit

increase, partially offset by higher selling, general, and administrative

expenses from the acquisitions of Remington and HEVI-Shot and higher selling and

marketing expenses to support increased sales. EBIT margin was 34.5% compared to

19.9% in the prior year.

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Outdoor Products-The increase in EBIT was primarily driven by the gross profit

increase, partially offset by increased selling, general, and administrative

expenses from the current year acquisitions and investments in selling and

marketing expenses to support increased sales and industry events, such as trade

shows that returned this fiscal year. EBIT margin was 12.6% compared to 12.5% in

the prior year.

Corporate and Other-The decrease in EBIT was primarily driven by the prior

fiscal year pretax gain related to the divestiture of a non-strategic business

in our Sporting Products segment. Additionally, the current fiscal year has

higher share-based and incentive compensation expense, higher post-acquisition

compensation, and investments in human capital which support our centers of

excellence.

Years ended March 31, Change

Interest expense, net: 2022 2021 Dollars Percent

Corporate and other $ 25,264 $ 25,574 $ (310) (1.2) %

The decrease in interest expense was due to a decrease in debt issuance cost

write-offs and a reduction in our interest rate on the 4.5% Notes, offset by an

increase in our average debt balance.

Years ended March 31,

Effective Effective

Income tax provision: 2022 Rate 2021 Rate Change

Corporate and other $ (147,732) 23.8 % $ 6,628 (2.6) % $ (154,360)

See Note 15, Income Taxes, to the consolidated financial statements in Part II,

Item 8 of this Annual Report, for information regarding income taxes.

The increase in the current period tax rate is primarily due to the impact of

the prior year decrease in the valuation allowance driven by earnings, the

benefit of the loss carrybacks to prior profitable years as permitted under IRS

regulations under the CAREs Act which permitted us to realize previously valued

assets, and the release of the reserves for uncertain tax positions due to

statute expiration in the prior year.

Our provision for income taxes includes federal, state and foreign income taxes.

The effective tax rate for fiscal year 2022 of 23.8% differs from the federal

statutory rate of 21% primarily due to the impact of state taxes and is

partially offset by changes in tax contingency.

The effective tax rate for fiscal year 2021 of (2.6)% differs from the federal

statutory rate of 21% primarily due to the impact of the decrease in the

valuation allowance, the release of uncertain tax positions, and the impact of

the CAREs Act.

As of March 31, 2022 and 2021, the total amount of unrecognized tax benefits was

$24,719 and $23,000, respectively, of which $21,139 and $20,283, respectively,

would affect the effective tax rate, if recognized. The remaining balance is

related to deferred tax items which only impact the timing of tax payments.

Although the timing and outcome of audit settlements are uncertain, it is

reasonably possible that a $3,419 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 $2,753. See Note 15, Income Taxes, to the

consolidated financial statements included in this Annual Report for further

details.

Fiscal Year 2021 Compared to Fiscal Year 2020

Our net sales, gross profit, gross profit as a percentage of net sales (gross

profit margin), EBIT, EBIT as a percentage of net sales (EBIT margin), interest

expense, and tax provision by reporting segment and by corporate and other

(where applicable) are presented below (dollars in thousands):

Years ended March 31, Change

Net Sales: 2021(1) 2020(1) Dollars Percent

Sporting Products $ 1,119,754 $ 871,550 $ 248,204 28.5 %

Outdoor Products 1,105,768 884,321 221,447 25.0 %

Total $ 2,225,522 $ 1,755,871 $ 469,651 26.7 %

(1) We modified the structure of our reportable segments during the third

quarter of fiscal year 2022. Accordingly, prior period amounts have been

reclassified to conform with the current period presentation. See Note 18,

Operating Segment Information, to the consolidated financial statements in Part

II, Item 8 of this Annual Report.

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Sporting Products-The increase in sales was primarily driven by strong demand in

the market across nearly all categories, and improved pricing. Acquisitions

accounted for $44,583 of net sales in fiscal year 2021. These increases were

partially offset by the sale of our Firearms Business in fiscal year 2020, which

accounted for approximately $25,000 of net sales.

Outdoor Products-The increase in sales was driven by strong demand in our

Outdoor Accessories, Action Sports, Outdoor Cooking, and Golf businesses. This

strong demand was partially offset by retail store closures in our first quarter

of fiscal year 2021 and continued supply chain interruptions.

Years ended March 31, Change

Gross Profit: 2021(1) 2020(1) Dollars Percent

Sporting Products $ 312,230 $ 137,914 $ 174,316 126.4 %

Outdoor Products 321,423 222,372 99,051 44.5 %

Corporate and other (693) (1,520) 827 54.4 %

Total $ 632,960 $ 358,766 $ 274,194 76.4 %

Gross profit margin 28.4% 20.4%

Sporting Products-The increase in gross profit was primarily driven by sales

volume and pricing as described above and operating efficiencies. These

increases were partially offset by the sale of our Firearms Business in fiscal

year 2020. Gross profit margin was 27.9% in fiscal year 2021, compared to 15.8%

in the previous year.

Outdoor Products-The increase in our gross profit was primarily driven by sales

volume as described above and strong direct-to-consumer sales, partially offset

by increased shipping, tariff, and product costs. Gross profit margin was 29.1%

in fiscal year 2021, compared to 25.1% in the previous year.

Corporate and Other-The increase in corporate gross profit was due to fiscal

year 2020 business restructuring costs, partially offset by inventory step-up

expenses during fiscal year 2021.

Years ended March 31, Change

EBIT: 2021(1) 2020(1) Dollars Percent

Sporting Products $ 222,713 $ 66,898 $ 155,815 232.9 %

Outdoor Products 137,942 43,125 94,817 219.9 %

Corporate and other (75,697) (242,259) 166,562 68.8 %

Total $ 284,958 $ (132,236) $ 417,194 315.5 %

EBIT margin 12.8% (7.5)%

Sporting Products-The increase in EBIT was primarily driven by the gross profit

increase as described above, decreased travel and trade show expenses due to the

COVID-19 pandemic, benefits from fiscal year 2020 cost savings initiatives,

partially offset by losses attributable to initial marketing and start-up costs

at Remington, increased incentive compensation accruals and the sale of our

Firearms Business in fiscal year 2020. EBIT margin was 19.9% in fiscal year

2021, compared to 7.7% in the previous year.

Outdoor Products-The increase in EBIT was primarily driven by the gross profit

increase as described above, partially offset by increased incentive

compensation accruals and higher selling and marketing costs. EBIT margin was

12.5% in fiscal year 2021, compared to 4.9% in the previous year.

Corporate and Other-The increase in EBIT was primarily driven by fiscal year

2020 goodwill and intangible impairment expenses of $155,588, pretax gain on

divestiture of $18,467 in fiscal year 2021, fiscal year 2020 held for sale asset

impairment of $9,429 in our Firearms business, and a reduction of fiscal year

2020 restructuring expenses. These were partially offset by higher incentive

compensation accrual, the loss on extinguishment of debt and higher transaction

and transition costs in the fiscal year 2021.

Liquidity and Capital Resources

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, our

sources of liquidity include committed credit 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 payments, acquisitions, share repurchases,

and other activities.

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Financial Condition

Cash decreased to $22,584 at March 31, 2022 from $243,265 at March 31, 2021,

primarily due to cash paid for acquisitions and the repurchase of shares,

partially offset by cash provided from our operating activities and proceeds

from our ABL Revolving Credit Facility during the last twelve months.

Operating Activities

Net cash provided by operating activities decreased $27,063 from the prior

fiscal year. The decrease was primarily driven by inventory purchases in the

current fiscal year to position ourselves for future growth and to mitigate

supply chain disruption risks caused by the COVID-19 pandemic, timing of

accounts payable, and higher accounts receivable balances due to higher sales

volume. These decreases were partially offset by net income.

Investing Activities

Cash used for investing activities increased $485,820 from the prior fiscal

year. The current fiscal year cash usage was driven by the acquisition of

businesses.

Financing Activities

Net cash provided by financing activities was $48,967 compared to a use of cash

of $31,640 during the prior fiscal year. The increase was primarily driven by

net proceeds from our ABL Revolving Credit Facility, partially offset by the

decrease in the net cash received from the issuance of our 4.5% Notes and

redemption of our 5.875% Notes in fiscal year 2021, and cash used for the

repurchase of shares of $113,195 during fiscal year 2022.

Liquidity

In addition to our normal operating cash requirements, our principal future cash

requirements will be to fund capital expenditures, debt repayments, employee

benefit obligations, 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 our 4.5% Notes and 2021 ABL Revolving

Credit Facility.

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 2021 ABL Revolving Credit

Facility, access to debt and equity markets, as well as other potential sources

of funding including additional bank financing, will be adequate to fund future

growth, to service our currently anticipated long-term debt obligations, make

capital expenditures over the next 12 months and fund the 2022 Share Repurchase

Program. As of March 31, 2022, based on the borrowing base less outstanding

borrowings of $170,000, outstanding letters of credit of $16,791, less the

minimum required borrowing base of $45,000, the amount available under the 2021

ABL Revolving Credit Facility was $218,209.

There can be no assurance that the cost or availability of future borrowings, if

any, will not be materially impacted by capital market conditions, including any

disruptions to capital markets as a result of the COVID-19 pandemic (including

the emergence and spread of vaccine resistant coronavirus variants), the

military conflict in Ukraine and imposition of sanctions on Russia, or our

future financial condition and performance. Furthermore, because our 2021 ABL

Revolving Credit Facility is secured in large part by receivables from our

customers, a sustained deterioration in general economic conditions, including

as a result of the COVID-19 pandemic (including the emergence and spread of

vaccine resistant coronavirus variants) or the military conflict in Ukraine and

imposition of sanctions on Russia, that adversely affects the creditworthiness

of our customers could have a negative effect on our future available liquidity

under the 2021 ABL Revolving Credit Facility.

Share Repurchases

As of March 31, 2022, there is $186,105 remaining under our $200,000 2022 Share

Repurchase Program, which we intend to fund through the fourth fiscal quarter of

2024. Additional information regarding our share repurchases during fiscal year

2022 is presented in Part II, Item 5 of this Annual Report.

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Long-Term Debt and Credit Agreements

As of March 31, 2022, we had actual total indebtedness of $670,000, which

consisted of the following:

March 31, 2022

Credit Agreements:

2021 ABL Revolving Credit Facility $ 170,000

4.5% Senior Notes 500,000

Less: unamortized deferred financing costs (3,886)

Carrying amount of long-term debt $ 666,114

Our total debt as a percentage of total capitalization (total debt and

stockholders’ equity) was 37% as of March 31, 2022.

See Note 13, Long-term Debt, to the consolidated financial statements in

Part II, Item 8 of this Annual Report, for a detailed discussion of our

indebtedness.

Material Cash Requirements

The following tables summarize our material cash requirements as of March 31,

2022:

Material cash requirements by period

Less than More than

Total 1 year Years 2 – 3 Years 4 – 5 5 years

Long-term debt $ 670,000 $ – $ – $ 170,000 $ 500,000

Interest on debt 172,517 26,255 52,508 48,754 45,000

Operating leases 130,630 18,484 31,051 25,519 55,576

Purchase commitments and other 259,108 106,220 152,888 – –

Total $ 1,232,255 $ 150,959 $ 236,447 $ 244,273 $ 600,576

Payments for interest is based on outstanding debt as of March 31, 2022.

Pension benefit obligation has been excluded from the Contractual Obligations

table (see Note 14, Employee Benefit Plans), to the consolidated financial

statements in Part II, Item 8 of this Annual Report, for details on our required

contributions to our pension trust.

The total liability for uncertain tax positions as of March 31, 2022 was

approximately $24,719 (see Note 15, Income Taxes, to the consolidated financial

statements in Part II, Item 8, of this Annual Report), none of which is expected

to be paid within 12 months. We are unable to provide a reasonably reliable

estimate of the timing of future payments relating to the non-current uncertain

tax position obligations.

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.

Certain of our former subsidiaries have been identified as PRPs, along with

other parties, in regulatory agency actions associated with hazardous waste

sites. As a PRP, those 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 such costs. While uncertainties

exist with respect to the amounts and timing of the ultimate environmental

liabilities, based on currently

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available information, we do not currently expect that these potential

liabilities, individually or in the aggregate, will have a material adverse

effect on our operating results, financial condition, or cash flows.

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.

See Note 16, Commitments and Contingencies, to the consolidated financial

statements included in this Annual Report for additional information.

Dependence on Key Customers; Concentration of Credit

No customer contributed more than 10% of sales during fiscal years 2022 and

2021; however, Walmart accounted for approximately 13% of our total fiscal year

2020 sales. If a key customer fails to meet payment obligations, our operating

results and financial condition could be adversely affected.

Inflation and Commodity Price Risk

We are exposed to inflationary factors such as increases in labor, supplier,

logistics and overhead costs that may adversely affect our operating results.

Although we do not believe that inflation has had a material impact on our

financial position or results of operations to date, a high rate of inflation in

the future may have an adverse effect on our ability to maintain current levels

of gross margin and operating expenses, if the selling prices of our products

are not able to offset these increased costs. Additionally, inflation may

potentially impact demand as consumers reduce discretionary spending. 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 Sporting Products Segment. See Note 4, Derivative Financial

Instruments, to the consolidated financial statements included in this Annual

Report for additional information.

We have a strategic sourcing, pricing and 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.

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