EX-99.1 13 a2222406zex-99_1.htm EX-99.1

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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS


Exhibit 99.1

GRAPHIC

                        , 2015

Dear Stockholder of Alliant Techsystems Inc.:

        We are pleased to inform you that Alliant Techsystems Inc. ("ATK") will spin off its Sporting Group reporting segment (the "Spin-Off"). The Sporting Group will operate as an independent, publicly traded company, Vista Outdoor Inc., whose common stock will be distributed to ATK stockholders by way of a pro rata dividend. We believe the separation of the Sporting Group into an independent, publicly traded company is in the best interests of ATK and its stockholders.

        As a current stockholder of ATK, you will be entitled to receive [        ] share[s] of Vista Outdoor Inc. for each share of ATK you own and hold as of the close of business on [        ], 2015, the record date for the Spin-Off.

        Immediately following the Spin-Off, a subsidiary of ATK will be merged with and into Orbital Sciences Corporation (the "Merger"), with Orbital Sciences Corporation surviving the Merger as a wholly owned subsidiary of ATK. The combined company's name will be Orbital ATK, Inc. Following the Spin-Off and Merger, we expect Orbital ATK, Inc. to trade on the New York Stock Exchange under the symbol "OA." We expect that Vista Outdoor Inc. shares will trade on the New York Stock Exchange under the symbol "VSTO."

        The Spin-Off is subject to a number of conditions described in the enclosed Information Statement. We encourage you to learn more about Vista Outdoor Inc. by reviewing the enclosed Information Statement, which describes the Spin-Off and contains important information about Vista Outdoor Inc., including historical combined financial statements.

        For additional information about the Merger, we encourage you to read ATK's separate registration statement on Form S-4 (Reg. No. 333-198460).

        Thank you for your continued support of ATK and your future support of Vista Outdoor Inc.

    Sincerely,

 

 

[Signature]
Mark W. DeYoung
President and Chief Executive Officer

GRAPHIC

                        , 2015

Dear Future Vista Outdoor Inc. Stockholder:

        On behalf of our company, it is my pleasure to welcome you as a stockholder of Vista Outdoor Inc. We are a premier developer and manufacturer of outdoor sporting products, including sporting ammunition and firearms, outdoor accessories, outdoor sports optics, golf rangefinders and performance eyewear. Our category-leading brand portfolio includes Bushnell, Federal Premium, BLACKHAWK! and Savage Arms, among many others.

        As an independent, publicly traded company, we believe we can better drive growth and efficiently allocate capital to broaden and deepen our leading market position. We anticipate that our focused corporate management team, operating with strategic clarity and flexibility, will play an important role in the expansion of our business.

        In connection with the distribution of our common stock by ATK, we intend to list our common stock on the New York Stock Exchange under the symbol "VSTO."

        I encourage you to learn more about Vista Outdoor Inc. by reviewing the enclosed Information Statement. We look forward to your support as a holder of our common stock.

    Sincerely,

 

 

[Signature]
Mark W. DeYoung
Chairman and Chief Executive Officer

SUBJECT TO COMPLETION, DATED DECEMBER 22, 2014

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

INFORMATION STATEMENT

Vista Outdoor Inc.

938 University Park Boulevard, Suite 200
Clearfield, UT 84015

Common Stock
(par value $0.01)

         We are providing you this Information Statement in connection with the spin-off by Alliant Techsystems Inc. ("ATK") of its wholly owned subsidiary, Vista Outdoor Inc. To effect the spin-off, ATK will distribute all of the shares of Vista Outdoor Inc. common stock on a pro rata basis to the record holders of ATK common stock (the "Distribution"). Immediately following the Distribution, Vista Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of ATK, will merge (the "Merger") with and into Orbital Sciences Corporation, a Delaware corporation ("Orbital"). We expect that the Distribution of Vista Outdoor Inc. common stock will be tax-free to ATK stockholders for U.S. federal income tax purposes, except for cash that stockholders receive in lieu of fractional shares.

         If you are a record holder of ATK common stock as of the close of business on [        ], 2015, which is the record date for the Distribution, you will be entitled to receive [        ] share[s] of Vista Outdoor Inc. common stock for each share of ATK common stock you hold on that date (the "Distribution Ratio"). ATK will distribute the shares of Vista Outdoor Inc. common stock in book-entry form, which means that we will not issue physical stock certificates. The distribution agent will not distribute any fractional shares of Vista Outdoor Inc. common stock. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to each holder (net of any required withholding for taxes applicable to such holder) who would otherwise have been entitled to receive a fractional share in the Distribution.

         Approval by ATK stockholders of the issuance of ATK common stock to Orbital stockholders in connection with the Merger and approval by the Orbital stockholders of the Merger are conditions to ATK's obligation to effect the Distribution. ATK is seeking such approval from the holders of ATK common stock at a special meeting of ATK's stockholders to be held on January 27, 2015. In connection with and prior to the special meeting, ATK will distribute a proxy statement, which we refer to as the "Proxy Statement," to all holders of its common stock. The Proxy Statement will contain a proxy and will describe the procedures for voting shares of ATK common stock and other details regarding the special meeting. As a result, the registration statement of which this Information Statement is a part does not contain a proxy and is not intended to constitute solicitation material under U.S. federal securities law.

         The Distribution will be effective as of 11:59 p.m., New York City time, on [        ], 2015 (the "Distribution Date"). Immediately after the Distribution becomes effective, we will be an independent, publicly traded company.

         Other than stockholder approval of the issuance of ATK common stock to Orbital stockholders in connection with the Merger, no action will be required of you to receive common shares of Vista Outdoor Inc., which means that:

    you will not be required to pay for our common shares that you receive in the Distribution; and

    you do not need to surrender or exchange any of your ATK shares in order to receive our common shares, or take any other action in connection with the spin-off.

         ATK currently owns all of the outstanding shares of Vista Outdoor Inc. common stock. Accordingly, no trading market for Vista Outdoor Inc. common stock currently exists. We expect, however, that a limited trading market for Vista Outdoor Inc. common stock, commonly known as a "when-issued" trading market, may develop as early as two trading days prior to the record date for the Distribution, and we expect "regular-way" trading of Vista Outdoor Inc. common stock will begin on the first trading day after the Distribution Date. We intend to list Vista Outdoor Inc. common stock on the NYSE under the symbol "VSTO."

         In reviewing this Information Statement, you should carefully consider the matters described in the section titled "Risk Factors" beginning on page 18 of this Information Statement.

         NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS INFORMATION STATEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

         This Information Statement is not an offer to sell, or a solicitation of an offer to buy, any securities.

The date of this Information Statement is                        , 2015.



TABLE OF CONTENTS

TRADEMARKS AND COPYRIGHTS

    ii  

MARKET AND INDUSTRY DATA

    ii  

PRESENTATION OF FINANCIAL INFORMATION

    ii  

CERTAIN TERMS

    iii  

SUMMARY

    1  

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

    15  

RISK FACTORS

    18  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

    38  

THE SPIN-OFF

    39  

DIVIDEND POLICY

    50  

CAPITALIZATION

    51  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

    52  

SELECTED HISTORICAL FINANCIAL DATA

    58  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    60  

BUSINESS

    81  

MANAGEMENT

    92  

EXECUTIVE COMPENSATION

    98  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    111  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    113  

DESCRIPTION OF OUR CAPITAL STOCK

    124  

WHERE YOU CAN FIND MORE INFORMATION

    128  

INDEX TO FINANCIAL STATEMENTS

    F-1  

i



TRADEMARKS AND COPYRIGHTS

        We own or have rights to various trademarks, logos, service marks and trade names that we use in connection with the operation of our business. We also own or have the rights to copyrights that protect the content of our products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Information Statement are listed without the ™, ® and © symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, trade names and copyrights included or referred to in this Information Statement.


MARKET AND INDUSTRY DATA

        Unless otherwise indicated, information contained in this Information Statement concerning our industry and the markets in which we operate is based on information from independent industry and research organizations, other third party sources and management estimates. Management estimates are derived from publicly available information released by independent industry analysts and third party sources, as well as data from our internal research, and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets, which we believe to be reasonable.

        Although we believe the data from these third party sources are reliable, we have not independently verified this information. In addition, projections, assumptions and estimates of the future performance of the industry in which we operate and our future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under "Risk Factors." These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.


PRESENTATION OF FINANCIAL INFORMATION

        We refer to the terms "EBITDA" and "Adjusted EBITDA" in this Information Statement. EBITDA and Adjusted EBITDA are supplemental financial measures that are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). As a result, these financial measures have limitations as analytical and comparative tools and you should consider EBITDA and Adjusted EBITDA in conjunction with, and not as a substitute for, results presented in accordance with GAAP. Please see "Summary—Summary Historical and Pro Forma Financial Information" for the definitions of, and a more thorough discussion of the use of, EBITDA and Adjusted EBITDA in this Information Statement, including the reasons that we believe this information is useful to management and why it may be useful to investors, and a reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure.

        EBITDA and Adjusted EBITDA have important limitations as analytical tools. Some of these limitations include the fact that EBITDA and Adjusted EBITDA:

    do not reflect significant interest expense on indebtedness;

    exclude certain tax expenses;

    do not reflect any expenses for assets being depreciated and amortized that are necessary to operate our business;

    do not reflect certain charges that affect the operating results of business;

    involve judgment as to whether items affect fundamental operating performance; and

    other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

ii


        Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as measures of financial performance, and the items excluded therefrom are significant components in understanding and assessing our financial performance. We use these financial measures only as a supplement to our GAAP results.


CERTAIN TERMS

        In this Information Statement, unless the context otherwise requires:

    references to a particular fiscal year refer to the fiscal year ended March 31 of that calendar year;

    "Aerospace and Defense Group" refers to, collectively, ATK's current "Aerospace Group" reporting segment and "Defense Group" reporting segment, each of which will not be part of the Distribution and therefore will continue to be owned by Orbital ATK following the Transaction;

    "ATK" refers to Alliant Techsystems Inc. and its consolidated subsidiaries other than, for all periods following the Spin-Off, Vista Outdoor (and its subsidiaries);

    "Bushnell" refers to Bushnell Group Holdings, Inc., which was acquired by ATK on November 1, 2013;

    "Credit Agreement" refers to the credit agreement, dated December 19, 2014, among Vista Outdoor, Bank of America, N.A., as administrative agent, and the lenders and agents party thereto, which governs the Senior Credit Facilities;

    "Distribution" refers to the distribution of all of the shares of Vista Outdoor common stock on a pro rata basis to the holders of ATK common stock;

    "distribution agent," "transfer agent" and "registrar" refer to Computershare Trust Company, N.A.;

    "Distribution Date" refers to 11:59 p.m., New York City time, on [        ], 2015;

    "Merger" refers to the merger of Merger Sub with and into Orbital, with Orbital surviving the Merger as a wholly owned subsidiary of ATK;

    "Merger Sub" refers to Vista Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of ATK;

    "NYSE" refers to the New York Stock Exchange;

    "Orbital" refers to Orbital Sciences Corporation, a Delaware corporation;

    "Orbital ATK" refers to Orbital ATK, Inc., the combined ATK and Orbital company following completion of the Transaction;

    "Record Date" refers to [        ], 2015;

    "Revolving Credit Facility" refers to Vista Outdoor's $400 million senior secured revolving credit facility with a five year maturity dated December 19, 2014;

    "Savage Arms" refers to Savage Sports Corporation, whose parent, Caliber Company, was acquired by ATK on June 21, 2013;

    "SEC" refers to the Securities and Exchange Commission;

    "Senior Credit Facilities" refer to, collectively, the Term Loan and the Revolving Credit Facility;

    "Spin-Off" refers to, collectively, the Sporting Transfers and the Distribution;

iii


    "Sporting Group" refers to ATK's current "Sporting Group" reporting segment, consisting of the development and production of outdoor sporting products, including sporting ammunition and firearms, outdoor accessories, outdoor sports optics, golf rangefinders and performance eyewear;

    "Sporting Transfers" refers to the series of internal transactions, following which Vista Outdoor will hold the business that constitutes the Sporting Group;

    "Term Loan" refers to Vista Outdoor's $350 million senior secured term loan with a five year maturity dated December 19, 2014;

    "Transaction" refers to, collectively, the Merger and the Spin-Off;

    "Transaction Agreement" refers to the Transaction Agreement, dated as of April 28, 2014, by and among Vista Outdoor, Merger Sub and Orbital, providing for the Spin-Off, the Merger and the related transactions; and

    "Vista Outdoor," "we," "our" and "us" refer, prior to giving effect to the Spin-Off, to the wholly owned Sporting Group business of ATK and, after giving effect to the Spin-Off, to Vista Outdoor Inc. and its consolidated subsidiaries.

iv


 


SUMMARY

        This summary highlights selected information from this Information Statement and provides an overview of our company, our separation from ATK and ATK's distribution of our common stock to its stockholders. For a more complete understanding of our business and the spin-off, you should read this entire Information Statement carefully, particularly the discussion under "Risk Factors," and our historical combined financial statements and the notes to those financial statements appearing elsewhere in this Information Statement.

        Prior to ATK's distribution of the shares of our common stock to its stockholders, ATK is undertaking a series of internal transactions, following which Vista Outdoor Inc. will hold the businesses constituting ATK's current "Sporting Group" reporting segment, which consists of the development and production of outdoor sporting products, including sporting ammunition and firearms, outdoor accessories, outdoor sports optics, golf rangefinders and performance eyewear, which we refer to as the "Sporting Group." This series of internal transactions is described in more detail under "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement—Sporting Transfers."

        We refer to ATK's distribution of the shares of our common stock to its stockholders as the "Distribution" and to the Sporting Transfers and the Distribution collectively, as the "Spin-Off." "Pro forma basis" refers to adjustments made to give effect to the acquisitions of Bushnell and Savage Arms, the Spin-Off and transactions related to the Spin-Off.

Our Company

        We are a leading global designer, manufacturer and marketer of consumer products in the growing outdoor sports and recreation markets. We serve these markets through our diverse portfolio of over 30 well-recognized brands that provide consumers with a range of affordable, performance-driven, high-quality and innovative products, including sporting ammunition and firearms, outdoor accessories, outdoor sports optics, golf rangefinders and performance eyewear. We serve a broad range of end consumers, including outdoor enthusiasts, hunters and recreational shooters, professional athletes, as well as law enforcement and military professionals. Our products are sold through a wide variety of mass, specialty and independent retailers, such as Walmart, Cabela's, Gander Mountain, Bass Pro Shops, Dick's Sporting Goods, Sportsman's Warehouse and Recreational Equipment, Inc. We have a scalable, integrated portfolio of brands that allows us to leverage our deep customer knowledge, product development and innovation, supply chain and distribution, and sales and marketing functions across product categories to better serve our retail partners and end users.

        Many of our brands have a rich, long-standing heritage, such as Federal Premium, founded in 1922, and Bushnell, founded in 1948. We believe this brand heritage supports our leading market share positions in multiple categories. For example, we believe we hold the No. 1 sales position in the U.S. markets for ammunition, riflescopes and golf rangefinders. To maintain the strength of our brands and drive revenue growth, we invest in product innovation to improve performance, quality and affordability while providing world-class customer support to our major retail partners and end users. We have received numerous awards for product innovation by respected industry publications and for service by our retail customers. Additionally, high-profile professional sportsmen and athletes use and endorse our products, which we believe influences the purchasing behavior of recreational consumers.

        Our brands in the shooting sports and outdoor products markets include the following:

Shooting Sports   Outdoor Products
Federal Premium   Bushnell   BLACKHAWK!
Savage Arms   Alliant Powder   Millett
American Eagle   Bee Stinger   Night Optics
Blazer   Butler Creek   Outers

 

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Shooting Sports   Outdoor Products
CCI   Bollé   Primos
Estate Cartridge   Cébé   RCBS
Fusion   Champion Target   Serengeti
Speer   Eagle   Simmons
Stevens   Final Approach   Stoney Point
    Gold Tip   Tasco
    GunMate   Uncle Mike's
    Gunslick Pro   Weaver Optics
    Hoppe's    

        In recent years, we have delivered strong revenue and profit growth while maintaining strong free cash flow. In fiscal year 2014, we generated $2.3 billion in pro forma sales. From fiscal year 2003 to fiscal year 2014, we grew revenue at a compound annual rate of approximately 20%, which included organic growth in our ammunition business at a compound annual rate of approximately 17% as well as growth through our acquisitions of BLACKHAWK!, Savage Arms and Bushnell. In fiscal year 2014, we achieved an operating margin of approximately 12% and an Adjusted EBITDA margin of approximately 16%. Our strong free cash flow is driven by our profitability and modest capital expenditure requirements. We believe these financial results are superior to many of our sports equipment peers.

Market Opportunity

        We participate in the global market for consumer goods geared toward outdoor recreation and shooting sports. Spending on outdoor recreation products in the U.S., including the purchase of gear for bicycling, camping, fishing, hunting, motorcycling, off-roading, snow sports, trail sports, water sports and wildlife viewing, totaled $48 billion in 2011, according to the 2012 Outdoor Recreation Economy National Report issued by the Outdoor Industry Association, which publishes data every five years. Examples of the sports and activities we target include hunting, archery, target shooting, hiking, camping, bird watching, golf and snow skiing. We believe the sporting goods and outdoor recreation sectors are lucrative global markets with the potential for sustained future growth. According to the Sports and Fitness Industry Association (the "SFIA"), 41% of the U.S. population plans to spend money on outdoor recreation activities in 2014, and 55% of those planning to spend money on such activities intend to spend more money in 2014 than they did in 2013. We believe a greater awareness of, and participation in, outdoor sports and recreation has been a principal driver of this growth. We believe growth will continue, driven by positive shifts in consumer demographics utilizing our products, including increases in new, female and younger participants, and expanding interest in outdoor sports and shooting activities.

Outdoor Recreation and Accessories Industry

        The outdoor recreation and accessories industry represents a large and growing focus area of our business. Examples of products in this industry include wildlife watching, archery equipment, winter sports, water sports, fishing equipment, camping and hiking equipment, golf products and rock climbing equipment. The brands we currently own in this category are Bushnell, Primos, Bollé, Serengeti, Cébé, Gold Tip, Weaver and Tasco. Our consumers often participate in multiple outdoor activities, including fishing, camping, cycling, kayaking and winter sports. We believe the fragmented nature of the outdoor recreation industry, combined with retail and consumer overlap with our existing businesses, presents attractive growth opportunities, both organically and through strategic acquisitions.

Shooting Sports Industry

        Shooting sports products currently represent the largest proportion of our sales. We design, develop and manufacture ammunition, long guns and related equipment products. Among these

 

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categories, we derive the largest portion of our sales from ammunition, which is a consumable, repeat purchase product. From 2009 to 2012 the percentage of the U.S. population participating in target or sport shooting increased from 15% to 17% according to the National Shooting Sports Foundation (NSSF). Two thirds of these new participants were between the ages of 18 and 34 and 37% of the new shooters were female. We believe this younger segment also represents the demographic with the greatest per capita spend. In response, we have developed products tailored to new shooters, such as reduced-recoil ammunition, interactive targets, and fashionable and attractive personal safety equipment such as shooting glasses and hearing protection. Firearms sales as measured by the National Instant Criminal Background Check System (NICS) grew at a compound annual rate of 8% from 2003 to 2012, leading to a substantial installed base of potential ammunition and accessories consumers. More recently, firearms sales have experienced a decline, which may indicate decreased demand for long-guns and related accessory categories, which could impact our future Shooting Sports revenue. We believe we are well-positioned to succeed in the shooting sports market, given our scale and global operating platform, which we believe is difficult to replicate in the highly regulated and capital intensive ammunition manufacturing sector.

Competitive Strengths

Portfolio of Authentic Brands Focused on Outdoor Sports and Recreation

        We have a diverse portfolio of outdoor sports and recreation and shooting sports brands, many with long-standing, market leading positions. We seek to maintain our brand strength by developing performance-enhancing innovations, introducing new products, engaging in product and brand marketing campaigns, and providing marketing support to our strategic channel partners. We target selling prices that balance our premium positioning with our focus on affordability to capture a large consumer base. Our brand strength and product innovations allow us to drive sales growth and deliver robust profit margins.

        We employ a segmented brand strategy that leverages over 30 brands that are leaders in niche categories. This approach provides us with several competitive advantages:

    Strong brand recognition, with the ability to command a leading market share position across several categories.

    Better insight into consumer preferences and market dynamics through information sharing across our portfolio.

    "Good, better, best" strategy using multiple brands.

    Increased presence and shelf space in our core retail channels.

        Savage Arms, acquired in 2013, is a nationally recognized long gun brand among hunters and recreational shooters who desire quality at an affordable price. Our Bushnell brand holds the leading U.S. market position in riflescopes, binoculars and golf rangefinders. BLACKHAWK! is an industry leader in tactical accessories with a customer base that ranges from individual shooting enthusiasts to government customers who depend on its performance and durability.

        We believe our strong brand recognition and customer loyalty is a result of our ability to deliver innovative, high-quality products at an affordable price. This is reinforced by the numerous product awards we have won across our brand portfolio. For example, we have received awards from Field & Stream Magazine, Outdoor Life Magazine, Golf Digest Magazine and Telly Awards.

Leading Innovation and Product Development Competencies

        We believe our product development capabilities and intellectual property portfolio provide us with a strong competitive advantage. By applying our engineering and manufacturing expertise, we have

 

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been able to bring to market new and innovative products that maintain product differentiation while targeting affordability for our end consumers.

        We have continuously invested in research and development ("R&D") and made disciplined investments in new technology to deliver sustainable growth and satisfy the evolving needs of our customers. We have leveraged our scale to develop a sophisticated R&D business process that we believe is difficult to replicate. Our current intellectual property portfolio includes over 500 patents, providing us with valuable proprietary trade secrets and technological know-how that we share across our platform. We employ approximately 80 dedicated design and product development professionals across the organization. Recent examples of our innovative, market-leading products include:

    Wireless Trail Cam—Images are sent directly to a user's phone, tablet or computer for up-to-the-minute scouting information from wherever he or she places this camera.

    V3 Golf Laser Rangefinders—Pinseeker with JOLT technology provides the user with positive feedback when he or she has locked on the pin for exact yardage.

    Gold Dot G2—Bonded bullet that was designed for superior barrier performance through the FBI test protocol. Preprogrammed internal skives plus an engineered elastomer filled hollowpoint results in one of the most consistent, best performing, highest FBI scoring rounds available.

Proven Manufacturing, Global Sourcing and Distribution Platform

        We believe our state-of-the-art manufacturing expertise, leading sourcing and distribution capabilities, and high-quality retail, wholesale and distributor networks allow us to produce, deliver and replenish products in a more efficient and faster manner than our competitors. We believe this allows us to better meet the needs of our customers and end users. We operate 15 manufacturing facilities in the United States, Puerto Rico, Mexico and Canada. A large portion of our manufacturing requires rigorous adherence to regulatory standards and certification. These regulations provide high barriers to entry as they require significant capital investments and lengthy government approval processes to manufacture many of our high-volume products.

        Integrated supply chain management is core to our company. We procure large quantities of raw materials for our manufacturing operations and we use effective negotiating disciplines and production methods, with the objective of obtaining the best price and delivery available as well as low-cost conversion of raw materials into finished product. We also source finished product both domestically and internationally for global distribution. We believe the scope and scale of our sourcing network is not easily replicated. We have a global presence, selling goods through our distribution network in North America, South America, Europe, Asia and Australia. To increase efficiencies, we have consolidated our North American distribution centers and continue to implement automated processes in key locations.

        We maintain positive relationships with our retail partners based on trust and professionalism. Our long-standing commitment to our customers, diverse product offering and focus on profitability for both our company and our retail partners have enabled us to gain shelf space and secure premium placement of our products at many major retailers. Our top retail and distributor partners include Walmart, Cabela's, Bass Pro Shops, Gander Mountain, AcuSport, United Sporting Group and Dick's Sporting Goods. Furthermore, we believe our scale is a unique competitive advantage that allows us to leverage our platform to efficiently and profitably service our largest retail customers through marketing and advertising campaigns and inventory replenishment support. These capabilities give us an advantage as we believe few competitors offer this level of retail support or a more comprehensive product portfolio. The strength of these programs is illustrated by the numerous retail awards we have received. For example, Walmart named ATK its 2013 Sporting Goods Supplier of the Year and Cabela's named ATK its 2013 Hunting Vendor of the Year.

 

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Proven M&A Capabilities

        We have a history of successfully identifying, acquiring, integrating and growing complementary businesses. For example, in fiscal year 2011 we expanded our tactical accessories capabilities through the acquisition of BLACKHAWK!. In fiscal year 2014, we acquired two more companies, Savage Arms and Bushnell, both of which grew our presence in the outdoor recreation and shooting sports markets and enhanced our manufacturing, product development and distribution platform for future acquisitions. We have also maintained the discipline to forgo certain acquisition opportunities that did not meet our specific operating and return on investment criteria. We believe our integrated outdoor sports and recreation platforms, leading brands and scale enable us to enhance the cost synergy potential and success of an acquisition by leveraging our customer relationships, sales and marketing resources, low-cost manufacturing and distribution network. We also believe our broad distribution network and retail partnerships can accelerate revenue growth in acquired companies.

Long-Tenured and Highly Experienced Management Team

        We have an experienced and committed management team with a proven track record of implementing successful growth strategies. Under our management team's leadership, we have continued to expand our market share to become one of the largest players in the outdoor sports and recreation industry.

        Our management team is led by Mark DeYoung, Chairman and Chief Executive Officer, who has been with ATK since 1985. Mr. DeYoung pivoted ATK's presence in the aerospace and defense industry into the consumer products industry, leveraging the company's experience and capabilities in high-rate manufacturing, engineering and sourcing. Through the acquisition of Blount International, Inc.'s Sporting Equipment Group business in 2001, ATK successfully secured a position in the commercial shooting sports market. Mr. DeYoung led the Blount integration, enabling ATK to streamline costs, improve operating profit, strengthen product development and marketing, develop strategic relationships with key retailers, and significantly grow sales and market share for the aquired commercial brands. In addition, Mr. DeYoung developed the company's successful strategy to grow the accessories and firearms portfolio through the BLACKHAWK!, Savage Arms and, most recently, Bushnell acquisitions. Mr. DeYoung also initiated and led the effort for a successful separation of Vista Outdoor from ATK's Aerospace and Defense Group business.

        Stephen Nolan, Senior Vice President and Chief Financial Officer, has been with ATK for eight years. Mr. Nolan led the execution of ATK's strategy to diversify its shooting sports portfolio and gain market share in the outdoor recreation industry. He led the recent acquisitions of Savage Arms and Bushnell, and was a strategic leader in the current separation of Vista Outdoor from ATK. He has almost 20 years of experience in growing businesses, as a general manager, a corporate strategist and a management consultant.

        The management team has an average of over 15 years of experience in the outdoor recreation, shooting sports and consumer products industries. Our management team has worked at other companies such as Olin's Winchester Division, Danaher Corporation, The Conair Group, KaVo Equipment Group, United Technologies, McKinsey and Company, Honeywell, Kroll, Ecolab, Magnum Research, Bausch & Lomb and Michael's of Oregon Company. Furthermore, many members of our management team and overall employee base are active outdoor enthusiasts. Our company culture benefits from having employees who are users of, and passionate about, the products they create and market.

 

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Our Strategy

Capitalize on a Fragmented and Growing Market

        We seek to capitalize on the fragmented and growing market opportunities in the outdoor sports and recreation markets. We believe our scalable business platform, strong retail and wholesale relationships and product development capabilities position us to capture additional market share. We believe continued industry and retail store expansions will provide growth opportunities in our primary operating segments. For instance, a number of our key customers have announced new store openings that will amount to over 50 new stores in calendar year 2014. The same customers opened 96 stores in calendar year 2013. We intend to utilize our existing infrastructure and manufacturing capabilities to support the growth of our retail customers, and we will continue to leverage our economies of scale and distribution capabilities to efficiently capture the upside potential related to increases in consumer demand.

Develop New and Innovative Products to Drive Organic Growth and Customer Loyalty

        We intend to continue to drive organic growth and customer loyalty through the development of new and innovative products. We believe our outdoor enthusiast consumers demand the latest technologies and performance enhancements, which drives new consumer purchases or replacement purchases for older products. We expect that our product development strategy will enable us to grow sales, maintain or increase profit margins and preserve the strength of our brands.

Expand into Complementary or Adjacent Categories Through M&A

        Given the highly fragmented nature of our industry and our financial flexibility, we believe we have the opportunity to supplement our organic growth with acquisitions. We intend to maintain our highly disciplined approach to acquisitions, focusing on transactions that we believe will deliver significant shareholder value, create synergies and enable us to penetrate new markets, enter new product categories or service new channels. We intend to leverage the strength of our current brands and our knowledge of the end consumer to enter adjacent markets that target customers within the outdoor sports and recreation markets. We believe our free cash flow profile and strong balance sheet position provide us the financial flexibility to aggressively pursue strategic M&A.

Leverage Relationships with Our Wholesale and Retail Channels

        We have strong relationships with a number of leading wholesalers as well as mass and specialty retailers. We continuously strive to strengthen our relationships by working closely with each of our channel partners. This may include providing marketing support, supporting joint merchandising programs and managing inventory on our partners' behalf. We will continue to leverage these relationships to secure increased shelf space and premium product placement and to increase retailer sell-through of our products. As a result, we expect to continue to grow our market share.

Continuously Improve Operations

        We have a strong focus on continuous improvement in all facets of our business, including engineering, product development, manufacturing, sourcing, sales, distribution and administrative functions. We use our business model, the Performance Enterprise System ("PES"), to align functional execution to the goals of the enterprise and to implement these goals throughout the organization. We also use PES to identify opportunities for process improvement and to implement and monitor quality and efficiency-focused refinements to our processes. We expect to continue to use PES to drive operational improvements in our legacy business areas, our recent acquisitions and in future acquired businesses to deliver improved competitive positions and margin improvement.

 

6


 

Risk Factors

        Our business, financial condition and results of operations are subject to numerous risks, including risks related to the following factors:

    competition in the outdoor sporting market;

    change in demand and manufacturing costs of our products;

    supply, availability, and costs of raw materials and components, including commodity price fluctuations;

    risks associated with expansion into new and adjacent commercial markets;

    government laws and other rules and regulations applicable to Vista Outdoor, including procurement and import-export control;

    exposure to potential product liability, warranty liability or personal injury claims and litigation;

    our products, including ammunition and firearms, are subject to extensive regulation;

    environmental laws that govern past, current and future practices and rules and regulations; and

    changes in the regulation of the manufacture, sale and purchase of firearms and ammunition.

        This list of factors is not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that would impact our business, financial condition and results of operations. You should read carefully the information set forth in the sections entitled "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements".


Other Information

        We are a Delaware corporation. Our principal executive offices will be located at 938 University Park Boulevard, Suite 200, Clearfield, UT 84015. Our telephone number is (806) 779-4600. Our website address is www.vistaoutdoor.com. Information contained on, or connected to, our website or ATK's website does not and will not constitute part of this Information Statement or the Registration Statement on Form 10 of which this Information Statement is a part.

 

7


      

 


The Spin-Off

Overview

        On April 28, 2014, ATK entered into a Transaction Agreement (the "Transaction Agreement") with Vista Outdoor, Vista Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of ATK ("Merger Sub"), and Orbital Sciences Corporation, a Delaware corporation ("Orbital"), providing for the Spin-Off of ATK's Sporting Group to ATK's stockholders, which will be immediately followed by the merger of Merger Sub with and into Orbital (the "Merger" and together with the Spin-Off, the "Transaction"), with Orbital surviving the Merger as a wholly owned subsidiary of ATK. The combined company, after the Merger, will be named Orbital ATK Inc., which we refer to as "Orbital ATK." To effect the separation, first, ATK is undertaking a series of internal transactions (the "Sporting Transfers"), described under "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement—Sporting Transfers," following which Vista Outdoor, ATK's wholly-owned subsidiary, will hold all of the entities that constitute the Sporting Group. Then, ATK will distribute all of Vista Outdoor's common stock to ATK's stockholders, and Vista Outdoor, holding the Sporting Group, will become an independent, publicly traded company.

        Completion of the Spin-Off is subject to the satisfaction or waiver of a number of conditions. Under certain circumstances, each of ATK and/or Orbital has the right to terminate the Transaction Agreement, in which case ATK would not complete the Spin-Off. In certain circumstances, if the Transaction Agreement is terminated or the Spin-Off is not completed on the terms specified in the Transaction Agreement, ATK may be obligated to pay Orbital a termination fee of $50 million and reimburse certain expenses of Orbital in connection with the Transaction. See "The Spin-Off—Conditions to the Spin-Off" for more detail.

Questions and Answers about the Spin-Off

        The following provides only a summary of the terms of the Spin-Off. You should read the section titled "The Spin-Off" elsewhere in this Information Statement for a more detailed description of the matters described below.

Q:
What is the Spin-Off?

A:
The Spin-Off is the method by which we will separate from ATK. In the Spin-Off, ATK will, first, effect the Sporting Transfers, after which we will hold all of the entities that constitute the Sporting Group. Then, ATK will distribute to its stockholders all the outstanding shares of our common stock. Following the Spin-Off, we will be an independent, publicly traded company, and ATK will not retain any ownership interest in us.

Q:
Will the number of ATK shares I own change as a result of the Spin-Off?

A:
No. However, while the number of outstanding shares of ATK common stock will not change as a result of the Spin-Off, additional shares of ATK common stock will be issued to Orbital's stockholders in connection with the Merger. As a result, current ATK stockholders will own approximately 53.8% of Orbital ATK after the completion of the Merger.

Q:
What are the reasons for the Spin-Off?

A:
The ATK board of directors considered the following potential benefits in deciding to pursue the Spin-Off:

Strategic Clarity and Focus.  Following the Spin-Off, Orbital ATK and Vista Outdoor will each have a more focused business and customer base and be better able to dedicate financial resources to pursue appropriate growth opportunities and execute strategic plans best suited to its respective business and customer base. In particular, the Spin-Off will allow Vista Outdoor to further expand the range of its outdoor sporting products and enter new, adjacent markets. The

 

8


 

      Spin-Off will also allow each of Orbital ATK and Vista Outdoor to enhance their respective strategic flexibility to respond to industry dynamics.

    Efficient Capital Allocation.  The Spin-Off will permit each of Orbital ATK and Vista Outdoor to concentrate their respective financial resources solely on their own operations without having to compete with each other for investment capital. This will provide each company with greater flexibility to invest capital in its business in a time and manner appropriate for its distinct strategy and business needs and will facilitate a more efficient allocation of capital. Investors will be able to value appropriately each of Orbital ATK and Vista Outdoor based on its own characteristics and merits.

    Focused Management.  The Spin-Off will allow the management of each of Orbital ATK and Vista Outdoor to devote their respective time and attention to the development and implementation of corporate strategies and policies that are based primarily on the specific business characteristics of their respective companies.

    Management Alignment.  The Spin-Off will enable Vista Outdoor to create incentives for its management and employees that are more closely tied to its business performance and stockholder expectations. Vista Outdoor's equity-based compensation arrangements will more closely align the interests of Vista Outdoor's management and employees with the interests of its stockholders, which we expect to increase Vista Outdoor's ability to attract and retain personnel. In addition, the Spin-Off will allow Vista Outdoor to attract talented management and employees interested in working in the outdoor recreation industry.

    Stockholder Flexibility.  The Spin-Off will allow investors to make independent investment decisions with respect to Orbital ATK and Vista Outdoor and will enable Orbital ATK and Vista Outdoor to align with a more natural stockholder base. Investments in Orbital ATK or Vista Outdoor may appeal to investors with different goals, interests and concerns. In addition, the Spin-Off will allow Vista Outdoor to raise equity capital in the future, if needed, among investors most interested in the outdoor recreation industry.

In addition, the Spin-Off is a condition to the Merger. The ATK board of directors believes that the Merger will provide a number of significant benefits, including the following:

    the Merger will create a more focused aerospace and defense business, which will provide its customers with advanced capabilities and a commitment to continuous innovation in support of the U.S. military and allied military requirements, space missions and aerospace capabilities;

    with a significant increase in scale and potential to achieve substantial synergies, Orbital ATK will have greater growth potential than either ATK or Orbital would on a standalone basis;

    the Merger is expected to generate meaningful synergies, including through the consolidation of corporate functions and increased operational efficiencies through the adoption of the best practices and capabilities from ATK and Orbital;

    the Merger will enable Orbital ATK to provide customers with additional value through a collective workforce of approximately 13,000 highly skilled employees with a shared commitment to provide the best products, systems, services and solutions and with benefits from greater career and professional development opportunities generated by the Merger; and

    positions Orbital ATK to have, as a combined company, a stronger financial position.

Q:
Why is the separation of Vista Outdoor structured as a spin-off?

A:
ATK believes that a tax-free distribution of our shares is the most efficient way to separate our business from ATK in a manner that will achieve the above benefits.

Q:
What will I receive in the Spin-Off?

A:
As a holder of ATK common stock, you will receive a dividend of [        ] share[s] of our common stock for each share of ATK common stock you hold on the Record Date. The distribution agent

 

9


 

    will distribute only whole shares of our common stock in the Spin-Off and will distribute cash in lie of fractional shares. See "—How will fractional shares be treated in the Distribution?" for more information on the treatment of the fractional share you may be entitled to receive in the Distribution.

Q:
What is being distributed in the Spin-Off?

A:
ATK will distribute approximately [        ] million shares of our common stock in the Spin-Off, based on the approximately [        ] million shares of ATK common stock outstanding as of [        ], 2015. The actual number of shares of our common stock that ATK will distribute will depend on the number of shares of ATK common stock outstanding on the Record Date. The shares of our common stock that ATK distributes will constitute all of the issued and outstanding shares of our common stock immediately prior to the Spin-Off. For more information on the shares being distributed in the Spin-Off, see "Description of Our Capital Stock—Common Stock."

Q:
What is the record date for the Distribution?

A:
ATK will determine record ownership as of the close of business on [        ], 2015, which we refer to as the "Record Date."

Q:
When will the Distribution occur?

A:
The Distribution will be effective as of 11:59 p.m., New York City time, on [        ], 2015, which we refer to as the "Distribution Date." On or shortly after the Distribution Date, the whole shares of our common stock will be credited in book-entry accounts for stockholders entitled to receive the shares in the Distribution. See "—How will ATK distribute shares of our common stock?" for more information on how to access your book-entry account or your bank, brokerage or other account holding the Vista Outdoor common stock you receive in the Distribution on and following the Distribution Date.

Q:
What do I have to do to participate in the Distribution?

A:
Pursuant to the terms of the Transaction Agreement, the approval by ATK stockholders of the issuance of ATK common stock to Orbital stockholders is a condition to ATK's obligation to effect the Distribution. ATK is seeking such approval from the holders of ATK common shares at a special meeting of ATK's stockholders to be held on January 27, 2015. In connection with and prior to the special meeting, ATK will distribute a proxy statement (the "Proxy Statement") to all record holders of its common shares. The Proxy Statement will contain a proxy and will describe the procedures for voting your ATK common shares and other details regarding the special meeting.

Holders of ATK common stock on the Record Date will not need to pay any cash or deliver any other consideration, including any shares of ATK common stock, in order to receive shares of our common stock in the Distribution.

Q:
If I sell my shares of ATK common stock on or before the Distribution Date, will I still be entitled to receive shares of Vista Outdoor common stock in the Distribution?

A:
If you hold shares of ATK common stock on the Record Date and decide to sell them on or before the Distribution Date, you may choose to sell your ATK common stock with or without your entitlement to our common stock. You should discuss these alternatives with your bank, broker or other nominee. See "The Spin-Off—Trading Prior to the Distribution Date" for more information.

Q:
How will ATK distribute shares of our common stock?

A:
Registered stockholders: If you are a registered stockholder (meaning you own your shares of ATK common stock directly through our transfer agent), our distribution agent will credit the whole

 

10


 

    shares of our common stock you receive in the Distribution to a new book-entry account with our transfer agent on or shortly after the Distribution Date. Our distribution agent will mail you a book-entry account statement that reflects the number of whole shares of our common stock you own. You will be able to access information regarding the book-entry account holding your Vista Outdoor shares at www.computershare.com/investor or by calling 866-865-6322.

    "Street name" or beneficial stockholders: If you own your shares of ATK common stock beneficially through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our common stock you receive in the Distribution on or shortly after the Distribution Date. Please contact your bank, broker or other nominee for further information about your account.

    We will not issue any physical stock certificates to any stockholders, even if requested. See "The Spin-Off—When and How You Will Receive Vista Outdoor Shares" for more details.

Q:
How will fractional shares be treated in the Distribution?

A:
The distribution agent will not distribute any fractional shares of our common stock in connection with the Spin-Off. Instead, the distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices on behalf of ATK stockholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to such holder). We anticipate that the distribution agent will make these sales in the "when-issued" market, and "when-issued" trades will generally settle within four trading days following the Distribution Date. See "—How will Vista Outdoor common stock trade?" for additional information regarding "when-issued" trading and "The Spin-Off—Treatment of Fractional Shares" for a more detailed explanation of the treatment of fractional shares. The distribution agent will, in its sole discretion, without any influence by ATK or us, determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent is not, and any broker-dealer used by the distribution agent will not be, an affiliate of either ATK or us.

Q:
What are the U.S. federal income tax consequences to me of the Distribution?

A:
For U.S. federal income tax purposes, no gain or loss should be recognized by, or be includible in the income of, a U.S. Holder (as defined in "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off") as a result of the Distribution, except with respect to any cash received by ATK stockholders in lieu of fractional shares. In addition, the aggregate tax basis of the ATK common stock and our common stock held by each U.S. Holder immediately after the Distribution will be the same as the aggregate tax basis of the ATK common stock held by the U.S. Holder immediately before the Distribution, allocated between the ATK common stock and our common stock in proportion to their relative fair market values on the date of the Distribution (subject to certain adjustments).

See "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Spin-Off" for more information regarding the potential tax consequences to you of the Spin-Off.

Q:
Does Vista Outdoor intend to pay cash dividends?

A:
Following the Spin-Off, we do not currently expect to pay dividends on our common stock. Instead, we intend to utilize future earnings to finance the growth and development of our business and for working capital and general corporate purposes. See "Dividend Policy" for more information.

 

11


 

Q:
How will Vista Outdoor common stock trade?

A:
Currently, there is no public market for our common stock. We intend to list our common stock on the NYSE under the symbol "VSTO."

We anticipate that trading in our common stock may begin on a "when-issued" basis as early as two trading days prior to the Record Date for the Distribution and will continue up to and including the Distribution Date. "When-issued" trading in the context of a spin-off refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. "When-issued" trades generally settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, any "when-issued" trading of our common stock will end and "regular-way" trading will begin. "Regular-way trading" refers to trading after the security has been distributed and typically involves a trade that settles on the third full trading day following the date of the trade. See "The Spin-Off—Trading Prior to the Distribution Date" for more information. We cannot predict the trading prices for our common stock before, on or after the Distribution Date.

Q:
Will the Spin-Off and Merger affect the trading price of my ATK common stock?

A:
As a result of the Spin-Off and Merger, we expect the trading price of shares of Orbital ATK common stock to be lower than the trading price of shares of ATK common stock prior to the Spin-Off and Merger because the trading price will no longer include the value of the Sporting Group. Furthermore, until the market has fully analyzed the value of Orbital ATK and Vista Outdoor, the trading price of shares of Orbital ATK common stock may fluctuate. We cannot assure you that, following the Spin-Off and the Merger, the combined trading prices of the Orbital ATK common stock and the Vista Outdoor common stock will equal or exceed what the combined trading price of Orbital common stock and ATK common stock would have been in the absence of the Spin-Off and the Merger.

It is possible that after the Spin-Off and Merger, the combined equity value of Orbital ATK and Vista Outdoor will be less than the combined equity value of Orbital and ATK before the Spin-Off and the Merger.

Q:
What will happen to outstanding ATK equity awards in the Distribution?

A:
Upon consummation of the Distribution, each outstanding stock option, restricted share, deferred stock unit or phantom stock unit with respect to ATK common stock will convert into corresponding equity-based awards with respect to both Vista Outdoor common stock and Orbital ATK common stock, on generally the same terms as were applicable prior to the Distribution, and with an adjusted exercise price, if applicable, after giving effect to the Distribution Ratio. For more information regarding the treatment of outstanding ATK equity awards in the Distribution, see the section entitled "The Spin-Off—Treatment of Equity-Based Compensation."

Q:
Do I have appraisal rights in connection with the Spin-Off?

A:
No. Holders of ATK common stock are not entitled to appraisal rights in connection with the Spin-Off.

Q:
Who is the distribution agent, transfer agent and registrar for Vista Outdoor common stock?

A:
Computershare Trust Company, N.A.

Q:
Are there risks associated with owning shares of Vista Outdoor common stock?

A:
Yes. Our business faces both general and specific risks and uncertainties. Our business also faces risks relating to the Spin-Off. Following the Spin-Off, we will also face risks associated with being an independent, publicly traded company. Accordingly, you should read carefully the information set forth in the section titled "Risk Factors" in this Information Statement.

 

12


 

Q:
Who will serve as the executive officers and directors of Vista Outdoor following the Spin-Off?

A:
Following the Spin-Off, none of our executive officers will be executive officers or employees of ATK. Mark DeYoung, the current President and Chief Executive Officer of ATK, is expected to serve as Chairman and Chief Executive Officer of Vista Outdoor. Stephen Nolan, the current Senior Vice President of Strategy and Business Development of ATK, is expected to serve as Senior Vice President and Chief Financial Officer of Vista Outdoor. Scott Chaplin, the current Senior Vice President, General Counsel and Corporate Secretary of ATK, is expected to serve as Senior Vice President, General Counsel and Corporate Secretary of Vista Outdoor. For additional information, see the section entitled "Management—Executive Officers Following the Spin-Off."

We currently expect that, upon completion of the Spin-Off, our board of directors will consist of seven members: Mr. DeYoung, Michael Callahan, April Foley, Tig Krekel, Mark Gottfredson, Gary McArthur and Robert Tarola. Messrs. DeYoung, Callahan and Krekel and Ms. Foley currently serve as directors of ATK, and Messrs. DeYoung and Krekel will continue to serve as directors of ATK following the Spin-Off. We currently expect that all of the above-named directors other than Mr. DeYoung will satisfy the independence standards under the applicable rules of the SEC and the NYSE. For additional information, see the section entitled "Management—Board of Directors Following the Distribution."

Q:
What are the principal terms of the Transaction Agreement?

A:
Pursuant to the terms of the Transaction Agreement, prior to the Distribution, ATK will cause (1) certain subsidiaries, assets and employees relating to ATK's Sporting Group business to be transferred to, and certain liabilities relating thereto to be assumed by, Vista Outdoor and (2) certain assets and employees of Vista Outdoor or its subsidiaries relating to ATK's Aerospace Group or Defense Group to be transferred to, and certain liabilities relating thereto to be assumed by, ATK. Following such transfers and assumptions and immediately prior to the closing of the Merger, ATK will effect the Distribution by distributing all the shares of common stock of Vista Outdoor (which at such time will hold ATK's Sporting Group business) to ATK's stockholders on a pro rata basis, with ATK stockholders holding 100% of Vista Outdoor following the Distribution. Immediately following completion of the Distribution, the parties will consummate the Merger, pursuant to which each share of Orbital common stock issued and outstanding immediately prior to the closing of the Merger will be converted into the right to receive 0.449 shares of ATK common stock. At the closing of the Merger, ATK stockholders will own approximately 53.8% of the combined company on a fully diluted basis, and Orbital stockholders will own the remaining approximately 46.2% of the combined company on a fully diluted basis. Consummation of the Transaction is subject to customary closing conditions. For additional information, please see "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement."

 

13


 

Q:
Where can I get more information?

A:
If you have any questions relating to the mechanics of the Distribution, you should contact the distribution agent at:

      Computershare Trust Company, N.A.
      250 Royall Street
      Canton, MA 02021
      Phone: 866-865-6322

Before the Spin-Off, if you have any questions relating to the Spin-Off, you should contact ATK at:

      Investor Relations
      Alliant Techsystems Inc.
      1300 Wilson Boulevard, Suit 400
      Arlington, Virginia 22209-2307
      Phone: 703-412-3216
      Email: michael.pici@atk.com

After the Spin-Off, if you have any questions relating to Vista Outdoor, you should contact us at:

      Investor Relations
      Vista Outdoor
      938 University Park Boulevard, Suite 200
      Clearfield, UT 84015

 

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

        The following table sets forth summary historical combined financial information and unaudited pro forma condensed combined financial information for Vista Outdoor. The historical combined financial information as of March 31, 2014 and 2013 and for the fiscal years ended March 31, 2014, 2013 and 2012 is derived from Vista Outdoor's audited combined financial statements included elsewhere in this Information Statement. The condensed combined statement of income information for the six months ended September 28, 2014 and September 29, 2013 and the condensed combined balance sheet information as of September 28, 2014 is derived from the unaudited condensed combined financial statements for Vista Outdoor included elsewhere in this Information Statement. The historical combined financial information as of March 31, 2012 is derived from Vista Outdoor's unaudited condensed combined financial statements that are not included in this Information Statement. The unaudited pro forma condensed combined financial information is based upon (a) the historical combined financial information of Vista Outdoor included elsewhere in this Information Statement, (b) the historical financial information of Bushnell included elsewhere in this Information Statement and (c) the historical financial information of Savage Arms, which has not been included in this Information Statement, and has been prepared to reflect the spin-off of Vista Outdoor from ATK as well as the Bushnell and Savage Arms acquisitions based on the acquisition method of accounting. In Vista Outdoor management's opinion, the unaudited condensed combined financial statements for the periods presented have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of normal recurring adjustments and allocations, necessary for a fair statement of the information for the periods presented.

        You should review the summary historical financial and unaudited pro forma information presented below in conjunction with our combined financial statements and the accompanying notes thereto, as well as the information set forth under "Unaudited Pro Forma Condensed Combined Financial Information" and the accompanying notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations," each included elsewhere in this Information Statement. The financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial position, results of operations and cash flows would have been had we been an independent, publicly traded company during the periods presented. In addition, our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from ATK, including changes in the financing, operations, cost structure and personnel needs of our business. Further, the historical financial information includes allocations of certain ATK corporate expenses. We believe the assumptions and methodologies underlying the allocation of these expenses are reasonable. Such expenses may not, however, be indicative of the expenses that we would have incurred if we had operated as an independent, publicly traded company during the period presented or of the costs expected to be incurred in the future.

        We acquired Savage Arms and Bushnell in fiscal year 2014. See Note 4 to our audited combined financial statements and Note 4 to our unaudited condensed combined financial statements for a further description of these acquisitions. We acquired Blackhawk Industries Products Group Unlimited, LLC in fiscal year 2011. Our financial statements for fiscal year 2011 have not been included in this Information Statement.

 

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  Six Months Ended   Year Ended March 31  
 
  Pro Forma   Historical   Pro Forma   Historical  
(Amounts in thousands,
except percentages)
  September 28,
2014
  September 28,
2014
  September 29,
2013
  2014   2014   2013   2012  

Results of Operations:

                                           

Net Sales

  $ 1,091,144   $ 1,091,144   $ 784,526   $ 2,279,674   $ 1,873,919   $ 1,196,031   $ 1,042,914  

Cost of sales

    814,418     819,098     607,862     1,630,221     1,406,616     953,593     850,506  
                               

Gross profit

    276,726     272,046     176,664     649,453     467,303     242,438     192,408  

Operating expenses:

                                           

Research and development

    4,725     4,725     4,432     13,984     13,984     8,720     7,497  

Selling

    75,424     75,424     44,093     201,780     111,682     72,140     63,920  

General and administrative

    50,892     57,870     42,582     140,909     107,830     60,123     42,896  

Goodwill impairment(1)

                            47,791  
                               

Income before interest and income taxes

    145,685     134,027     85,557     292,780     233,807     101,455     30,304  

Interest (expense) income, net

    (3,363 )   (16,924 )   (1,255 )   (6,744 )   (15,469 )   7     3  
                               

Income before income taxes

    142,322     117,103     84,302     286,036     218,338     101,462     30,307  

Income tax provision

    51,644     42,313     32,435     110,129     85,081     36,770     19,647  
                               

Net income

  $ 90,678   $ 74,790   $ 51,867   $ 175,907   $ 133,257   $ 64,692   $ 10,660  
                               
                               

Cash Flow Data:

                                           

Cash flow from operating activities

        $ (36,638 ) $ (18,643 )       $ 172,310   $ 75,363   $ 78,730  

Cash flow from investing activities

          (20,337 )   (325,899 )         (1,341,747 )   (23,395 )   (23,600 )

Cash flow from financing activities

          51,748     355,125           1,209,316     (52,417 )   (54,976 )

Financial Position:

                                           

Cash and cash equivalents

  $ 134,149   $ 34,149               $ 40,004   $ 67   $ 516  

Net current assets

    752,889     652,889                 517,047     200,952     180,860  

Net property, plant and equipment

    185,710     185,710                 189,096     123,604     118,225  

Total assets

    2,611,449     2,512,428                 2,457,658     797,812     745,882  

Long-term debt (including current portion)

    350,000     1,008,547                 1,014,911          

Total Parent company equity / total pro forma equity

    1,745,664     996,179                 870,731     531,900     520,305  

Other Data:

                                           

Depreciation and amortization of intangible assets

  $ 30,926   $ 30,926   $ 14,946   $ 66,550   $ 44,902   $ 25,128   $ 24,490  

Capital expenditures(2)

    20,353     20,353     12,075     43,149     40,234     23,395     23,611  

Operating margin(3)

    13.4 %   12.3 %   10.9 %   12.8 %   12.5 %   8.5 %   2.9 %

EBITDA(4)

  $ 176,611   $ 164,953   $ 100,503   $ 359,330   $ 278,709   $ 126,583   $ 54,794  

Adjusted EBITDA(4)

  $ 172,711   $ 167,851   $ 104,015   $ 370,258   $ 301,689   $ 111,583   $ 87,585  

(1)
In fiscal year 2012, we recorded an impairment to the goodwill associated with our fiscal year 2009 acquisition of the Eagle military accessories business. The impairment resulted from an anticipated decline in deployed military forces. See Note 8 to our audited combined financial statements.

(2)
Capital expenditures are shown net of capital expenditures included in accounts payable and financed through operating leases. Pro forma capital expenditures for the year ended March 31, 2014 reflects Bushnell's capital expenditures for the seven months ended October 31, 2013 (the date prior to the acquisition) and Savage Arms' capital expenditures for the period from April 1, 2013 through June 20, 2013 (the date prior to the acquisition); after such dates, capital expenditures of Bushnell and Savage Arms' were included in the historical combined financial information of Vista Outdoor.

 

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(3)
Represents income before interest and income taxes expressed as a percentage of sales.

(4)
We calculate Earnings before Interest, Income Taxes, Depreciation and Amortization ("EBITDA") as net income before net interest expense (income), income tax provision, depreciation and amortization of intangible assets, and we calculate Adjusted EBITDA as EBITDA adjusted for goodwill impairment, transaction costs, transition costs, standalone and public company costs, Bushnell adjustments and inventory step-up. EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP. Accordingly, neither measure should be considered as a substitute for net income or other income data prepared in accordance with GAAP. Our management uses EBITDA and Adjusted EBITDA to evaluate the operating performance of our business, to aid in period-to-period comparability, for planning and forecasting purposes and to measure results against forecasts. Our management believes that EBITDA and Adjusted EBITDA may provide useful information to investors regarding our results of operations for the foregoing reasons and because securities analysts, investors and other interested parties frequently use EBITDA and Adjusted EBITDA as performance measures. Because EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income and may vary among companies, our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

        The table below reconciles net income to EBITDA and Adjusted EBITDA for the periods presented.

 
  Six Months Ended   Year Ended March 31  
 
  Pro Forma   Historical   Pro Forma   Historical  
(Amounts in thousands)
  September 28,
2014
  September 28,
2014
  September 29,
2013
  2014   2014   2013   2012  

Net income

  $ 90,678   $ 74,790   $ 51,867   $ 175,907   $ 133,257   $ 64,692   $ 10,660  

Interest expense (income), net

    3,363     16,924     1,255     6,744     15,469     (7 )   (3 )

Income tax provision

    51,644     42,313     32,435     110,129     85,081     36,770     19,647  

Depreciation and amortization of intangible assets

    30,926     30,926     14,946     66,550     44,902     25,128     24,490  
                               

EBITDA

    176,611     164,953     100,503     359,330     278,709     126,583     54,794  
                               

Goodwill impairment(a)

                            47,791  

Transaction costs(b)

        6,798     2,012         16,780          

Transition costs(b)

    3,600     3,600         5,700     5,700          

Standalone and public company costs(c)

    (7,500 )   (7,500 )   (7,500 )   (15,000 )   (15,000 )   (15,000 )   (15,000 )

Inventory step-up(d)

            9,000     15,500     15,500          

Bushnell adjustments(e)

                4,728              
                               

Adjusted EBITDA

  $ 172,711   $ 167,851   $ 104,015   $ 370,258   $ 301,689   $ 111,583   $ 87,585  
                               
                               

(a)
Refer to note 1 to the above table for a description of goodwill impairment.

(b)
Represents transaction costs, including accounting, legal and advisor fees, and transition costs, in each case incurred in connection with our acquisitions of Bushnell and Savage Arms.

(c)
Represents our estimate of costs that we would have incurred in excess of the applicable corporate allocation had we operated as a standalone public company during the period.

(d)
Represents inventory step-up recorded in connection with our acquisitions of Bushnell and Savage Arms as part of their respective purchase price allocations.

(e)
Represents (1) elimination of management fees of approximately $1.6 million paid by Bushnell, which will not be paid in the future, (2) compensation and fees paid by Bushnell to its board of directors and with respect to certain professional services of approximately $0.2 million, which will not be paid in the future and (3) transaction costs of approximately $3.0 million incurred by Bushnell in connection with its acquisition, including accounting, legal, advisor fees and management bonuses.

 

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RISK FACTORS

        You should carefully consider all of the information in this Information Statement and each of the risks described below, which we believe are the principal risks that we face. Some of these risks relate principally to our business, while others relate principally to the Spin-Off or to the securities markets and ownership of our common stock.

        Any of the following risks could materially and adversely affect our business, financial condition or results of operations.

Risks Relating to Our Business

Competition in our industry may hinder our ability to execute our business strategy, achieve profitability or maintain relationships with existing customers.

        We operate in a highly competitive industry and we compete against manufacturers that have well-established brand names and strong market positions. Significant accessories competitors include major optics companies Leupold and Nikon, as well as Vortex Optics and Arnette, Oakley, OTIS, Revo, Safariland and others. Significant ammunition competitors include Remington Arms, Winchester Ammunition (a division of Olin Corporation) and various smaller manufacturers and importers, including Black Hills Ammunition, Fiocchi Ammunition, Hornady, PMC, Rio Ammunition, Selliers & Bellott and Wolf. Significant firearms competitors include Mossberg, Marlin, Ruger, Remington and Winchester.

        Competition in the markets in which we operate is based on a number of factors, including price, quality, product innovation, performance, reliability, styling, product features and warranties, as well as sales and marketing programs. Competition could cause price reductions, reduced profits or losses or loss of market share, any of which could have a material adverse effect on our business, financial condition or results of operations. Certain of our competitors may be more diversified than us or may have financial and marketing resources that are substantially greater than ours, which may allow these competitors to invest more heavily in intellectual property, product development and advertising. Since many of our competitors also source their products from third parties, our ability to obtain a cost advantage through sourcing is reduced. Certain of our competitors may be willing to reduce prices and accept lower profit margins to compete with us. Further, retailers often demand that suppliers reduce their prices on mature products, which could lead to lower margins.

        Internationally, our products typically face more competition where foreign competitors manufacture and market products in their respective countries. This allows those competitors to sell products at lower prices, which could adversely affect our competitiveness. In addition, our products compete with many other sporting and recreational products for the discretionary spending of consumers. Failure to effectively compete with these other competitors or alternative products could have a material adverse effect on our performance.

Our results of operations could be materially harmed if we are unable to forecast demand accurately for our products.

        We often schedule internal production and place orders for products with third party suppliers before receiving firm orders from our customers. For example, the ammunition products supply agreement with Orbital ATK offers an incentive for us to place a large advance order. Under such agreement, if we place a sizeable order for certain ammunition products prior to the start of the fiscal year in which they are to be delivered, during such fiscal year, subject to certain exceptions, Orbital ATK will only sell small-caliber ammunition products manufactured at its Lake City plant to us and the U.S. Department of Defense. Therefore, if we fail to accurately forecast customer demand, we may

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experience excess inventory levels or a shortage of products to deliver to our customers. Factors that could affect our ability to accurately forecast demand for our products include:

    an increase or decrease in consumer demand for our products or for the products of our competitors;

    our failure to accurately forecast customer acceptance of new products;

    new product introductions by competitors;

    changes in our relationships with customers;

    changes in general market conditions or other factors, which may result in cancellations of orders or a reduction or increase in the rate of reorders placed by retailers;

    changes in laws and regulations governing the activities for which we sell products, such as hunting and shooting sports; and

    weak economic conditions or consumer confidence, which could reduce demand for discretionary items such as our products.

        On the one hand, inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory at discounted prices, which could have an adverse effect on our business, financial condition or results of operations. On the other hand, if we underestimate demand for our products, our manufacturing facilities or third party suppliers may not be able to create products that meet customer demand, and this could result in delays in the shipment of products and lost revenues, as well as damage to our reputation and customer relationships. We cannot assure you that we will be able to manage inventory levels successfully to meet future order and reorder requirements.

We could experience a decrease in demand for ammunition.

        In recent years, we have seen a significant increase in demand for ammunition. Although we service a broad base of customers, we cannot assure you that the recent growth rate or overall sales levels for ammunition will be sustained, which could have an impact on our results of operations. A decrease in demand for ammunition may result in excess capacity and increased overhead, and could have an adverse effect on our results of operations.

Our sales are highly dependent on purchases by several large retail customers, and we may be adversely affected by the loss of, or any significant decline in sales to, one or more of these customers.

        Due to consolidation in the U.S. retail industry, our retail store customer base has become relatively concentrated. Sales to the top ten retail customers accounted for approximately 28% of our consolidated net sales in the fiscal year ended March 31, 2014 and approximately 42% of our consolidated net sales in the six months ended September 28, 2014.

        Although we have long-established relationships with many of our retail store customers, as is typical in the markets in which we compete, we do not have long-term purchase agreements with our customers. As such, we are dependent on individual purchase orders. As a result, these retail store customers would be able to cancel their orders, change purchase quantities from forecast volumes, delay purchases, change other terms of our business relationship or cease to purchase our products entirely. The loss of any one or more of our retail store customers or significant or numerous cancellations, reductions, delays in purchases or changes in business practices by our retail store customers could have an adverse effect on our business, financial condition or results of operations.

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We have historically relied on ATK for certain of our ammunition and gun powder products. After the Spin-Off, our relationship with Orbital ATK will change and may adversely affect our supply of these products.

        We rely on ATK for certain of our ammunition and gun powder products. Concurrently with the Spin-Off, we will enter into a Supply Agreement with Orbital ATK pursuant to which the Lake City plant operated by Orbital ATK will manufacture and supply certain of our requirements for 5.56mm (including .223 caliber), 7.62mm and .50 caliber ammunition products, subject to certain exceptions. We will also enter into an additional Supply Agreement pursuant to which Orbital ATK will manufacture and supply certain of our gun powder products. The Supply Agreements will provide that, following the Distribution, (1) Orbital ATK will manufacture and supply all of Vista Outdoor's requirements for 5.56mm (including .223 caliber), 7.62mm and .50 caliber cartridge ammunition products, in each case excluding any frangible ammunition products (referred to as the "ammunition products") and certain Alliant canister gun powder products (referred to as the "gun powder products"), subject to capacity limitations and, in the case of ammunition products, the priority rights of the U.S. Department of Defense and (2) Vista Outdoor will purchase all of its requirements for such products from Orbital ATK (and will not purchase such products from another party or manufacture such products itself), subject to the right to "cure" if Orbital ATK fails to perform. Notwithstanding the foregoing, Vista Outdoor generally may continue to manufacture certain ammunition currently manufactured by the ATK Sporting Group.

        If Vista Outdoor's ammunition products order for a given fiscal year meets or exceeds an agreed amount, during such fiscal year, subject to certain exceptions, Orbital ATK will only be permitted to sell small caliber ammunition products produced at its Lake City plant to Vista Outdoor and the U.S. Department of Defense. If Vista Outdoor's ammunition products order for a given fiscal year is less than such amount, then Orbital ATK may sell those small caliber ammunition products to any other party during such fiscal year. Orbital ATK will only be permitted to sell gun powder products to Vista Outdoor, irrespective of the amount of gun powder products ordered by Vista Outdoor. The ammunition products Supply Agreement will also prohibit Vista Outdoor from reselling 5.56mm (including .223 caliber), 7.62mm and .50 caliber ammunition products (excluding any frangible ammunition products) to the U.S. Department of Defense, although Vista Outdoor generally may continue to sell to the U.S. Department of Defense certain ammunition that the ATK Sporting Group currently sells to the U.S. Department of Defense.

        The initial terms of the Supply Agreements will be for approximately three years. The ammunition products Supply Agreement will be renewable for an additional three-year term and one further term thereafter ending on September 30, 2023, while the gun powder products Supply Agreement will be renewable for additional one-year terms. After the Spin-Off, our relationship with Orbital ATK will change and such change may affect our supply of ammunition products and gun powder products. We cannot assure you that we will be able to renew the Supply Agreements or that we will be able to source ammunition products or gun powder products from another supplier on favorable terms or at all. If we fail to maintain an adequate supply of ammunition products and gun powder products, our business, financial condition or results of operations could be adversely affected. For addition information regarding these Supply Agreements, see "Certain Relationships and Related Party Transactions—Agreements with ATK—Supply Agreements."

Significant supplier capacity constraints, supplier production disruptions, supplier quality issues or price increases could increase our operating costs and adversely impact the competitive positions of our products.

        Our reliance on third party suppliers for various product components and finished goods exposes us to volatility in the availability, quality and price of these product components and finished goods. A disruption in deliveries from our third party suppliers, capacity constraints, production disruptions, price increases or decreased availability of raw materials or commodities could have an adverse effect on our

20


ability to meet our commitments to customers or increase our operating costs. Quality issues experienced by third party suppliers can also adversely affect the quality and effectiveness of our products and result in liability and reputational harm.

        After the Spin-Off, we will rely on Orbital ATK for certain of our ammunition and gun powder products. If the production capabilities of Orbital ATK's Lake City plant or Radford plant change such that we fail to maintain an adequate supply of ammunition and gun powder products, our operating costs could increase and the competitive positions of our ammunition and gun powder products could be adversely impacted.

We face risks relating to our international business that could adversely affect our business, financial condition or results of operations.

        Our ability to maintain the current level of operations in our existing international markets and to capitalize on growth in existing and new international markets is subject to risks associated with doing business internationally, including:

    issues related to managing international operations;

    potentially adverse tax developments;

    lack of sufficient protection for intellectual property in some countries;

    currency exchange and import and export controls;

    local labor laws and regulations; and

    limitations on our ability to efficiently repatriate cash from our foreign operations.

        Any one or more of these risks could adversely affect our business, financial condition or results of operations.

Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, as well as export controls and trade sanctions, could result in fines or criminal penalties.

        The international nature of our business exposes us to trade and economic sanctions and other restrictions imposed by the U.S. and other governments. The U.S. Departments of Justice, Commerce, Treasury and other agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, the Foreign Corrupt Practices Act, and other federal statutes, sanctions and regulations, including those established by the Office of Foreign Assets Control and, increasingly, similar or more restrictive foreign laws, rules and regulations, which may also apply to us. By virtue of these laws and regulations, and under laws and regulations in other jurisdictions, we may be obliged to limit our business activities, we may incur costs for compliance programs and we may be subject to enforcement actions or penalties for noncompliance. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws and we expect the relevant agencies to continue to increase these activities. A violation of these laws, sanctions or regulations could result in fines or criminal penalties and adversely impact our business, financial condition or results of operations.

Our revenues and results of operations may fluctuate unexpectedly from quarter-to-quarter, which may cause our stock price to decline.

        Our revenues and results of operations have varied significantly in the past and may vary significantly in the future due to various factors, including, but not limited to:

    market acceptance of our products and services;

    the timing of large domestic and international orders;

    future cancellation of existing orders;

    the outcome of any existing or future litigation;

    adverse publicity surrounding our products, the safety of our products or the use of our products;

    changes in our sales mix;

    new product introduction costs;

    complexity in our integrated supply chain;

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    increased raw material expenses;

    changes in amount and/or timing of our operating expenses; and

    regulatory changes that may affect the marketability of our products.

        As a result of these and other factors, we believe that period-to-period comparisons of our results of operations may not be meaningful in the short term, and our performance in a particular period may not be indicative of our performance in any future period.

Seasonality and weather conditions may cause our results of operations to vary from quarter to quarter.

        Because many of the products we sell are used for seasonal outdoor sporting activities, our results of operations may be significantly impacted by unseasonable weather conditions in our markets. For example, our winter sport accessories sales are dependent on cold winter weather and snowfall in our markets, and can be negatively impacted by unseasonably warm or dry weather in our markets. Conversely, sales of our spring products and summer products, such as golf accessories, can be adversely impacted by unseasonably cold or wet weather in those periods. Accordingly, our sales results and financial condition will typically suffer when weather patterns do not conform to seasonal norms.

        Sales of our hunting accessories are highest during the months of August though December due to shipments around the fall hunting season and holidays. In addition, sales of our ammunition have historically been lower in our first fiscal quarter. We cannot assure you that the seasonality of our sales will not increase in the future. Seasonal variations in our results of operations may reduce our cash on hand, increase our inventory levels and extend our accounts receivable collection periods. This in turn may cause us to increase our debt levels and interest expense to fund our working capital requirements.

Our success depends upon our ability to introduce new products into the market that meet our high standards and match customer preferences.

        Our efforts to introduce new products into the market may not be successful, and any new products that we introduce may not result in customer or market acceptance. We both develop and source new products that we believe will match customer preferences. The development of new products is a lengthy and costly process and may not result in the development of a successful product. In addition, the sourcing of our products is dependent, in part, on our relationships with our third party suppliers. If we are unable to maintain these relationships, we may not be able to continue to source products at competitive prices that both meet our standards and appeal to our customers. Failure to develop or source and introduce new products that consumers want to buy could decrease our sales, operating margins and market share and could adversely affect our business, financial condition or results of operations.

        Even if we are able to develop or source new products, our efforts to introduce new products may be costly and ineffective. When introducing a new product, we incur expenses and expend resources to market, promote and sell the new product. New products that we introduce into the marketplace may be unsuccessful or may achieve success that does not meet our expectations for a variety of reasons, including failure to predict market demand, delays in introduction, unfavorable cost comparisons with alternative products and unfavorable performance. Significant expenses related to new products that prove to be unsuccessful for any reason will adversely affect our results of operations.

Some of our products contain licensed, third party technology that provides important product functionality and features. The loss or inability to obtain any such license could have a material adverse effect on our business.

        Our products may contain technology licensed from third parties that provides important product functionality and features. We cannot assure you that we will have continued access to this technology.

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For example, if the licensing company ceases to exist, either from bankruptcy, dissolution or purchase by a competitor, we may lose access to important third party technology and may not be able to obtain replacement technology on favorable terms or at all. In addition, legal actions, such as intellectual property actions, brought against the licensing company could impact our future access to the technology. Any of these actions could negatively impact our technology licensing, thereby reducing the functionality and features of our products, and adversely affect our business, financial condition or results of operations.

We manufacture and sell products that create exposure to potential product liability, warranty liability or personal injury claims and litigation.

        Our products expose us to potential product liability, warranty liability or personal injury claims and litigation relating to the use or misuse of our products. If successful, such claims could have a material adverse effect on our business. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

        Defects in our products could reduce demand for our products and result in a decrease in sales, delays in market acceptance and damage to our reputation.

        Complex components and assemblies used in our products may contain undetected defects that are subsequently discovered at any point in the life of the product. In addition, we obtain many of our products and component parts from third party suppliers and may not be able to detect defects in such products or component parts until after they are sold. Defects in our products may result in a loss of sales, delay in market acceptance and damage to our reputation and increased warranty costs, which could have a material adverse effect on our business, financial condition or results of operations.

We are subject to extensive regulation and could incur fines, penalties and other costs and liabilities under such requirements.

        Like many other manufacturers and distributors of consumer products, we are required to comply with the Fair Labor Standards Act, the Occupational Safety and Health Act and many other regulations surrounding employment law, environmental law, taxation and consumer products generally.

        Our operations are subject to a variety of laws and regulations relating to environmental protection, including those governing the discharge, treatment, storage, remediation and disposal of certain materials and wastes, and restoration of damages to the environment, as well as health and safety matters. We could incur substantial costs, including remediation costs, resource restoration costs, fines, penalties and third party property damage or personal injury claims as a result of liabilities under or violations of such laws and regulations or the permits required thereunder. While environmental laws and regulations have not had a material adverse effect on our business, financial condition or results of operations, the ultimate cost of environmental liabilities is difficult to accurately predict and we could incur material additional costs as a result of requirements or obligations imposed or liabilities identified in the future.

        As a manufacturer and distributor of consumer products, we are subject to the Consumer Products Safety Act, which empowers the Consumer Products Safety Commission to exclude from the market products that are found to be unsafe or hazardous. Under certain circumstances, the Consumer Products Safety Commission could require us to repurchase or recall one or more of our products. In addition, laws regulating certain consumer products exist in some cities and states, as well as in other countries in which we sell our products, and more restrictive laws and regulations may be adopted in the future. Any repurchase or recall of our products could be costly to us and could damage our reputation. If we were required to remove, or we voluntarily removed, our products from the market, our reputation could be tarnished and we could have large quantities of finished products that we are unable to sell.

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        We are also subject to the rules and regulations of the Bureau of Alcohol, Tobacco, Firearms and Explosives ("ATF"). If we fail to comply with ATF rules and regulations, the ATF may limit our growth or business activities, levy fines against us or, ultimately, revoke our license to do business. Our business, as well as the business of all producers and marketers of ammunition and firearms, is also subject to numerous federal, state, local and foreign laws, regulations and protocols. Applicable laws:

    require the licensing of all persons manufacturing, importing or selling firearms as a business;

    require background checks for purchasers of firearms;

    impose waiting periods between the purchase of a firearm and the delivery of a firearm;

    prohibit the sale of firearms to certain persons, such as those below a certain age and persons with criminal records;

    regulate the use and storage of gun powder or other energetic materials;

    regulate the interstate sale of certain firearms;

    prohibit the interstate mail-order sale of firearms;

    regulate our employment of personnel with criminal convictions; and

    restrict access to firearm manufacturing facilities for individuals from other countries or with criminal convictions.

        Also, the export of our products is controlled by the International Traffic in Arms Regulations ("ITAR"). ITAR implements the provisions of the Arms Export Control Act and is enforced by the U.S. Department of State. Among its many provisions, ITAR requires a license application for the export of firearms and congressional approval for any application with a total value of $1 million or higher. Further, because our manufacturing process includes certain toxic, flammable and explosive chemicals, we are subject to the Chemical Facility Anti-Terrorism Standards, as administered by the U.S. Department of Homeland Security, which require that we take additional reporting and security measures related to our manufacturing process.

        Several states currently have laws in effect that are similar to, and in certain cases, more restrictive than, these federal laws.

        Compliance with all of these regulations is costly and time-consuming. Inadvertent violation of any of these regulations could cause us to incur fines and penalties and may also lead to restrictions on our ability to manufacture and sell our products and services and to import or export the products we sell.

Changes in government policies and firearms legislation could adversely affect our financial results.

        The sale, purchase, ownership and use of firearms are subject to thousands of federal, state and local governmental regulations. The basic federal laws governing firearms are the National Firearms Act, the Federal Firearms Act and the Gun Control Act of 1968. These laws generally prohibit the private ownership of fully automatic weapons and place certain restrictions on the interstate sale of firearms unless certain licenses are obtained. We do not manufacture fully automatic weapons. The ammunition industry is also regulated. For example, current federal regulations include licensing requirements for the manufacture or sale of ammunition. We hold all necessary licenses to legally sell firearms and ammunition in the United States.

        Currently, the federal legislature and several state legislatures are considering additional legislation relating to the regulation of firearms. These proposed bills are extremely varied. If enacted, such legislation could effectively ban or severely limit the sale of affected firearms. In addition, if such restrictions are enacted and are incongruent, we could find it difficult, expensive or even practically impossible to comply with them, impeding new product development and the distribution of existing

24


products. We cannot assure you that the regulation of our business activities will not become more restrictive in the future and that any such restriction will not have a material adverse effect on our business.

A significant disruption in our computer systems or a cyber security breach could adversely affect our operations.

        We rely extensively on our computer systems to manage our ordering, pricing, inventory replenishment and other processes. Our systems could be subject to damage or interruption from various sources, including power outages, computer and telecommunications failures, computer viruses, cyber security breaches, vandalism, severe weather conditions, catastrophic events and human error, and our disaster recovery planning cannot account for all eventualities. If our systems are damaged, fail to function properly or otherwise become unavailable, we may incur substantial costs to repair or replace them, and we may experience loss of critical data and interruptions or delays in our ability to perform critical functions, which could adversely affect our business, financial condition or results of operations. Any compromise of our data security could also result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our data security measures, which could harm our business.

We are exposed to risks associated with ATK's recent acquisitions of Bushnell and Savage Arms, which could adversely affect our future financial results.

        In the 2014 fiscal year, ATK acquired Bushnell, a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and performance eyewear, and also acquired Caliber Company, the parent company of Savage Arms, a leading manufacturer of sporting long guns. After the completion of the Spin-Off, Bushnell and Savage Arms will be part of Vista Outdoor. The acquisitions of Bushnell and Savage Arms involve a number of risks, including the risk that the anticipated benefits and cost synergies from the acquisitions may not be fully realized or may take longer than expected to realize, costs and difficulties related to the integration of the two acquired companies with our operations and unanticipated liabilities or contingencies. For example, we are currently involved in litigation in connection with the Bushnell acquisition, pursuant to which we have sued the seller of Bushnell in connection with the working capital purchase price adjustment. In addition, while we have not yet concluded our analysis, we believe that it is more likely than not that an impairment associated with the acquisition of Savage Arms has occurred in the range of $40 - $50 million, which potential impairment relates to the current market correction impacting demand for firearms. These and other risks relating to the Bushnell and Savage Arms acquisitions could have an adverse effect on our business, financial condition or results of operations.

We may pursue or complete acquisitions, or other transactions, that represent additional risk and could impact future financial results.

        Our business strategy includes the potential for future acquisitions or other transactions. Acquisitions involve a number of risks including integration of the acquired company with our operations and unanticipated liabilities or contingencies related to the acquired company. We cannot assure you that the expected benefits of any future acquisitions or other transactions will be realized. Costs could be incurred on pursuits or proposed acquisitions that have not yet or may not close which could significantly impact our business, financial condition or results of operations. Additionally, after any acquisition, unforeseen issues could arise which adversely affect our anticipated returns or which are otherwise not recoverable as an adjustment to the purchase price. Even after careful integration efforts, actual results of operations may vary significantly from initial estimates. For example, in fiscal year 2012 we recorded an impairment to the goodwill associated with our acquisition of the Eagle business, which impairment related to an anticipated decline in deployed military forces. Furthermore,

25


we may engage in other strategic business transactions. Such transactions could cause unanticipated costs and difficulties, may not achieve intended results and may require significant time and attention from management, which could have an adverse impact on our business, financial condition or results of operations.

Our business is highly dependent upon our brand recognition and reputation, and the failure to maintain or enhance our brand recognition or reputation would likely have an adverse effect on our business.

        Our brand recognition and reputation are critical aspects of our business. We believe that maintaining and enhancing our brands as well as our reputation are critical to retaining existing customers and attracting new customers. We also believe that the importance of our brand recognition and reputation will continue to increase as competition in the markets in which we compete continues to develop.

        Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our advertising, promotion, public relations and marketing programs. These brand promotion activities may not yield increased revenue and the effectiveness of these activities will depend on a number of factors, including our ability to:

    determine the appropriate creative message, media mix and markets for advertising, marketing and promotional initiatives and expenditures;

    identify the most effective and efficient level of spending in each market, medium and specific media vehicle; and

    effectively manage marketing costs, including creative and media expenses, in order to maintain acceptable customer acquisition costs.

        If we implement new marketing and advertising strategies, we may utilize marketing and advertising channels with significantly higher costs than our current channels, which could adversely affect our results of operations. Implementing new marketing and advertising strategies could also increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective. We also may incur marketing and advertising expenses significantly in advance of the time we anticipate recognizing revenue associated with such expenses, and our marketing and advertising expenditures may not generate sufficient levels of brand awareness or result in increased revenue. Even if our marketing and advertising expenses result in increased revenue, the increase in revenue might not offset our related marketing and advertising expenditures. If we are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more cost-effective channels, our marketing and advertising expenses could increase substantially, our customer base could be adversely affected and our business, financial condition or results of operations could be adversely impacted.

We may incur substantial litigation costs to protect our intellectual property, and if we are unable to protect our intellectual property, we may lose our competitive advantage. We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

        Our future success depends in part upon our ability to protect our intellectual property. Our protective measures, including patents, trademarks, copyrights, trade secret protection and internet identity registrations, may prove inadequate to protect our proprietary rights and market advantage. The right to stop others from misusing our trademarks and service marks in commerce depends, to some extent, on our ability to show evidence of enforcement of our rights against such misuse in commerce. Our efforts to stop improper use, if insufficient, may lead to loss of trademark and service mark rights, brand loyalty and notoriety among our customers and prospective customers. The scope of

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any patent to which we have or may obtain rights may not prevent others from developing and selling competing products. In addition, our patents may be held invalid upon challenge, or others may claim rights in, or ownership of, our patents. Moreover, we may become subject to litigation with parties that claim, among other matters, that we infringed their patents or other intellectual property rights. The defense and prosecution of patent and other intellectual property claims are both costly and time-consuming, and could result in a material adverse effect on our business and financial position.

        Also, any intellectual property infringement claims against us, with or without merit, could be costly and time-consuming to defend and divert our management's attention from our business. If our products were found to infringe a third party's proprietary rights, we could be forced to enter into costly royalty or licensing agreements in order to be able to sell our products or discontinue use of the protected technology. Such royalty and licensing agreements may not be available on terms acceptable to us or at all. Rights holders may demand payment for past infringements or force us to accept costly license terms or discontinue use of protected technology or works of authorship.

        We may become involved in litigation regarding patents and other intellectual property rights. Other companies, including our competitors, may develop intellectual property that is similar or superior to our intellectual property, duplicate our intellectual property or design around our patents, and may have or obtain patents or other proprietary rights that would prevent, limit or interfere with our ability to make, use or sell our products. Effective intellectual property protection may be unavailable or limited in some foreign countries in which we sell products or from which competing products may be sold. Unauthorized parties may attempt to copy or otherwise use aspects of our intellectual property and products that we regard as proprietary. Our means of protecting our proprietary rights in the United States or abroad may prove to be inadequate, and competitors may be able to develop similar intellectual property independently. If our intellectual property protection is insufficient to protect our intellectual property rights, we could face increased competition in the markets for our products.

        Should any of our competitors file patent applications or obtain patents that claim inventions also claimed by us, we may choose to participate in an interference proceeding to determine the right to a patent for these inventions because our business would be harmed if we fail to enforce and protect our intellectual property rights. Even if the outcome is favorable, this proceeding could result in substantial costs to us and disrupt our business.

        In the future, we also may need to file lawsuits to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation, whether successful or unsuccessful, could result in substantial costs and diversion of resources, which could have a material adverse affect on our business, financial condition or results of operations.

Shortages of, and price increases for, components, parts, raw materials and other supplies may delay or reduce our sales and increase our costs, thereby harming our results of operations.

        Although we manufacture many of the components for our products, we purchase from third parties some important components and parts, including but not limited to bolt carriers, rifle receivers, magazines, barrels, rifle stocks and bulk gun powder. The costs of these components and parts are affected by commodity prices and are, therefore, subject to price volatility caused by weather, market conditions and other factors that are not predictable or within our control. We also use numerous commodity materials in producing and testing our products, including steel, wood, lead, copper, zinc and plastics. We cannot assure you that commodity prices will not increase, and any such increase in commodity prices may harm our results of operations.

        Our inability to obtain sufficient quantities of components, parts, raw materials and other supplies from independent sources necessary for the production of our products could result in reduced or

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delayed sales or lost orders. Any delay in or loss of sales or orders could adversely impact our results of operations. Many of the components, parts, raw materials and other supplies used in the production of our products are available only from a limited number of suppliers. We do not have long-term supply contracts with some of these suppliers. As a result, we could be subject to increased costs, supply interruptions or orders and difficulties in obtaining materials. Our suppliers also may encounter difficulties or increased costs in obtaining the materials necessary to produce their products that we use in our products. The time lost in seeking and acquiring new sources could have an adverse effect on our business, financial condition or results of operations.

Increases in energy costs would increase our operating costs and could have an adverse effect on our earnings.

        Higher prices for electricity, natural gas and fuel increase our production and shipping costs. A significant shortage, increased prices or interruptions in the availability of these energy sources would increase the costs of producing and delivering products to our customers, and would be likely to negatively affect our earnings. Energy costs have varied significantly during recent fiscal years and remain a volatile element of our costs.

Catastrophic events may disrupt our business.

        A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack or other catastrophic event could cause delays in completing sales, providing services or performing other mission-critical functions. A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations and our results of operations.

        In addition, damage or disruption to manufacturing and distribution capabilities of our suppliers because of a major earthquake, weather event, cyber-attack, terrorist attack or other catastrophic event could impair our ability to manufacture or sell our products. In addition, failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could have a material adverse effect on our business, financial condition or results of operations, as well as require additional resources to restore our supply chain.

        Some of our products involve the manufacture or handling of a variety of explosive and flammable materials. From time to time, these activities have resulted in incidents that have temporarily shut down or otherwise disrupted some manufacturing processes, causing production delays and resulting in liability for workplace injuries and fatalities. We have safety and loss prevention programs that require detailed pre-construction reviews of process changes and new operations, along with routine safety audits of operations involving explosive materials, to mitigate such incidents, as well as a variety of insurance policies. We cannot assure you, however, that we will not experience similar incidents in the future or that any similar incidents will not result in production delays or otherwise have a material adverse effect on our business, financial condition or results of operations.

General economic conditions affect our results of operations.

        Our revenues are affected by economic conditions and consumer confidence worldwide, but especially in the United States. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which affects demand for our products. Moreover, our businesses are cyclical in nature, and their success is impacted by general economic conditions and specific economic conditions affecting the regions and markets we serve, the overall level of consumer confidence in the economy and discretionary income levels. Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our financial results. Moreover, declining economic conditions create the potential for future impairments of goodwill and other intangible and long-lived assets that may negatively impact our financial

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condition or results of operations. While we have not yet concluded our analysis, we believe that it is more likely than not that an impairment associated with the acquisition of Savage Arms has occurred in the range of $40 - $50 million, which potential impairment relates to the current market correction impacting demand for firearms. The impact of weak consumer credit markets, corporate restructurings, layoffs, high unemployment rates, declines in the value of investments and residential real estate, higher fuel prices and increases in federal and state taxation all can negatively affect our results of operations.

The loss of our Chief Executive Officer, other members of our senior management or certain other key executives could significantly harm our business.

        Our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior management team, including Mark DeYoung, our Chairman and Chief Executive Officer, and Stephen Nolan, our Senior Vice President and Chief Financial Officer. The loss of Mr. DeYoung, Mr. Nolan or one or more members of our senior management may significantly impair our business. In addition, many of our senior executives have strong industry reputations, which aid us in identifying commercial, financing and strategic acquisition opportunities, and having such opportunities brought to us. The loss of the services of one or more of these key personnel could materially and adversely affect our operations because of diminished relationships with customers, lenders and industry participants.

Our results of operations could be impacted by unanticipated changes in tax provisions or exposure to additional income tax liabilities.

        Our business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting our income tax expense and profitability. In addition, audits by income tax authorities could result in unanticipated increases in our income tax expense.

We may need to raise additional capital, and we cannot be sure that additional financing will be available.

        Subsequent to the Spin-Off, we will need to fund our ongoing working capital, capital expenditure and financing requirements through cash flows from operations and new sources of financing. Our ability to obtain future financing will depend, among other things, on our financial condition or results of operations as well as on the condition of the capital markets or other credit markets at the time we seek financing. Increased volatility and disruptions in the financial markets could make it more difficult and more expensive for us to obtain financing. We cannot assure you that, as a new public company, we will have access to the capital markets on terms we find acceptable or at all.

        The terms of the Credit Agreement that governs the Senior Credit Facilities restricts our current and future operations, particularly our ability to incur debt that we may need to fund initiatives in response to changes in our business, the industries in which we operate, the economy and governmental regulations.

        The Credit Agreement that governs the Senior Credit Facilities contains a number of restrictive covenants that impose significant operating and financial restrictions on us and our subsidiaries and limits our ability to engage in actions that may be in our long-term best interests, including restrictions on our and our subsidiaries' ability to:

    incur or guarantee additional indebtedness or sell disqualified or preferred stock;

    pay dividends on, make distributions in respect of, repurchase or redeem, capital stock;

    make investments or acquisitions;

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    sell, transfer or otherwise dispose of certain assets;

    create liens;

    enter into sale/leaseback transactions;

    enter into agreements restricting the ability to pay dividends or make other intercompany transfers;

    consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries' assets;

    enter into transactions with affiliates;

    prepay, repurchase or redeem certain kinds of indebtedness;

    issue or sell stock of our subsidiaries; and

    significantly change the nature of our business.

        In addition, the Credit Agreement that governs the Senior Credit Facilities has financial covenants that require us to maintain a consolidated interest coverage ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a consolidated leverage ratio (as defined in the Credit Agreement) of 3.50 to 1.00 or less. Our ability to meet these financial covenants may be affected by events beyond our control.

        As a result of all of these restrictions, we may be:

    limited in how we conduct our business and pursue our strategy;

    unable to raise additional debt or equity financing that we may require to operate during general economic or business downturns; or

    unable to compete effectively or to take advantage of new business opportunities.

        If we were unable to repay the amounts due and payable under the Senior Credit Facilities, the lenders under the Senior Credit Facilities could proceed against the collateral that secures the indebtedness. In the event our creditors accelerate the repayment of our borrowings, we may not have sufficient assets to repay such indebtedness.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

        Substantially all of our long-term indebtedness will consist of term loans or revolving credit facility borrowings with variable rates of interest that expose us to interest rate risk. If interest rates increase, our debt service obligations on our variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and cash flows will correspondingly decrease. At our expected level of indebtedness of $350 million after giving effect to the incurrence of the Term Loan under the Senior Credit Facilities, a change of 1/8 of one percent in interest rates on our variable rate indebtedness would result in a $0.4 million change in annual estimated interest expense. Even if we enter into interest rate swaps in the future in order to reduce future interest rate volatility, we may not elect to maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

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The level of returns on pension and postretirement plan assets, changes in interest rates and other factors could affect our earnings and cash flows.

        Our earnings may be positively or negatively impacted by the amount of expense or income recorded for employee benefit plans, primarily pension plans and other postretirement plans. Generally accepted accounting principles in the United States require us to calculate income or expense for the plans using actuarial valuations. These valuations are based on assumptions made relating to financial market and other economic conditions. Changes in key economic indicators can result in changes in these assumptions. The key fiscal year-end assumptions used to estimate pension and postretirement benefit expense or income for the following fiscal year are the discount rate, the expected long-term rate of return on plan assets, the rate of increase in future compensation levels, mortality rates and the health care cost trend rate. We are required to remeasure our plan assets and benefit obligations annually, which may result in a significant change to equity through other comprehensive income (loss). Our pension and other postretirement benefit income or expense can also be affected by legislation or other regulatory actions. Additional information on how our financial statements can be affected by pension plan accounting policies can be found under "Management's Discussion and Analysis of Financial Condition or Results of Operations—Contractual Obligations and Commercial Commitments."

New regulations related to conflict minerals may force us to incur additional expenses.

        The SEC has adopted additional disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo and surrounding countries, or "conflict minerals," that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. The minerals that the final rules cover are commonly referred to as "3TG" and include tin, tantalum, tungsten and gold. Implementation of the new disclosure requirements could affect the sourcing and availability of some of the minerals that we use in the manufacture of our products. Our supply chain is complex, and we may not be able to conclusively verify whether conflict minerals are used in our products or whether our products are "conflict free." We could incur significant costs related to the compliance process, including potential difficulty or added costs in satisfying the disclosure requirements.

A portion of our workforce belongs to a union. Failure to successfully negotiate or renew the collective bargaining agreement, or any strikes, slow-downs or other labor-related disruptions, could adversely affect our operations and could result in increased costs that impair our financial performance.

        Approximately 4.1% of our employees are covered by a collective bargaining agreement, which expires on June 30, 2017. Strikes, slow-downs or other labor-related disruptions could occur if we are unable to either negotiate or renew our collective bargaining agreement on satisfactory terms, which could adversely impact our results of operations. The terms and conditions of new or renegotiated agreements could also increase our costs or otherwise affect our ability to fully implement future operational changes to enhance our efficiency.

Risks Relating to the Spin-Off

We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Off.

        We believe that, as an independent, publicly traded company, we will be able to, among other things, better focus our financial and operational resources on our specific business, implement and maintain a capital structure designed to meet our specific needs, design and implement corporate strategies and policies that are targeted to our business, more effectively respond to industry dynamics and create effective incentives for our management and employees that are more closely tied to our business performance. By separating from ATK, however, we may be more susceptible to market fluctuations and other adverse events. In addition, we may be unable to achieve some or all of the

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benefits that we expect to achieve as an independent company in the time we expect, if at all. The completion of the Spin-Off will also require significant amounts of our management's time and effort, which may divert management's attention from operating and growing our business. If we fail to achieve some or all of the benefits that we expect to achieve as an independent company, or do not achieve them in the time we expect, our business, financial condition or results of operations could be adversely affected.

We may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent, publicly traded company, and we may experience increased costs after the Spin-Off.

        We have historically operated as part of ATK's broader corporate organization, and ATK provided various corporate services for us, including information technology, tax administration, treasury activities, accounting, benefits administration, legal and ethics and compliance program administration. Following the Spin-Off, ATK will have no obligation to provide us with assistance other than the transition services to be provided under the Transition Services Agreement, which is described under "Certain Relationships and Related Party Transactions—Agreements with ATK." The term of the Transition Services Agreement will be for 12 months (except in the case of tax services, which will generally be for 18 months). Once the Transition Services Agreement terminates, we will need to provide the covered services internally or obtain them from unaffiliated third parties. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from Orbital ATK. In addition, the services to be provided under the Transition Services Agreement do not include every service that we have received from ATK in the past. Accordingly, immediately following the Spin-Off, we will need to provide internally or obtain from unaffiliated third parties such other services. Because our business has historically operated as part of the wider ATK organization, we may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently, or may incur additional costs that could adversely affect our business. If we fail to obtain the quality of services necessary to operate effectively or incur greater costs in obtaining these services, our business, financial condition or results of operations may be adversely affected.

        We have no recent operating history as an independent, publicly traded company, and our historical financial information is not necessarily representative of the results we would have achieved as an independent, publicly traded company and may not be a reliable indicator of our future results.

        We derived the historical financial information included in this Information Statement from ATK's consolidated financial statements, and this information does not necessarily reflect the results of operations and financial position we would have achieved as an independent, publicly traded company during the periods presented, or those that we will achieve in the future. This is primarily because of the following factors:

    Prior to the Spin-Off, we operated as part of ATK's broader corporate organization, and ATK provided various corporate services for us, including information technology, tax administration, treasury activities, accounting, benefits administration, legal and ethics and compliance program administration. Our historical financial information reflects allocations of corporate expenses from ATK for these and similar services. These allocations may not reflect the costs we will incur for similar services in the future as an independent, publicly traded company.

    We will enter into transactions with ATK that did not exist prior to the Spin-Off, including Orbital ATK's provision of transition services, which will cause us to incur new costs. For addition information regarding these transitional services, see "Certain Relationships and Related Party Transactions—Agreements with ATK—Transition Services Agreement."

    Our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from ATK, including changes in our cost structure, personnel

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      needs, tax structure, financing and business operations. As part of ATK, we enjoyed certain benefits from ATK's operating diversity, size, purchasing power, borrowing leverage and available capital for investments, and we will lose these benefits after the Spin-Off. As an independent entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses, or access capital markets on terms as favorable to us as those that were available to us as part of ATK prior to the Spin-Off. In addition, subject to the discretion of our board of directors and other factors, we may make dividend payments to our stockholders, and our historical financial information does not reflect the payment of dividends.

        In addition, we may incur increased costs after the Spin-Off as a result of the loss of synergies we currently enjoy from operating as part of ATK. Following the Spin-Off, we will be responsible for the additional costs associated with being an independent, publicly traded company, including costs related to corporate governance, investor and public relations and public reporting. If the Spin-Off had occurred on April 1, 2013, we estimate that for the year ended March 31, 2014, we would have incurred approximately $15.0 million of such corporate costs. Our actual additional costs associated with being an independent, publicly traded company may vary materially from this estimate. We also may face reduced purchasing power with respect to certain enterprise-wide purchases, such as certain third-party services, certain off-the-shelf software licenses and other information technology hardware and software. Further, as a standalone, publicly traded company, our ability to borrow money in the capital markets will be measured based upon our standalone financial position and performance and conditions of the outdoor sports and recreation markets, without any consideration of ATK's Aerospace and Defense Group. Therefore, we may experience higher borrowing costs following the Spin-Off. Relatedly, our historical financial data does not include an allocation of interest expense comparable to the interest expense we will incur as a result of the Transaction, including interest expense in connection with the Senior Credit Facilities. If the Spin-Off had occurred on April 1, 2013, we estimate that for the year ended March 31, 2014, our pro forma net interest expense would have been $6.7 million, exclusive of fees and discounts.

        Our financial statements may not be indicative of our future performance as an independent, publicly traded company. While we have historically been profitable as part of ATK, we cannot assure you that our profits will continue at a similar level when we are an independent, publicly traded company. For additional information about our past financial performance and the basis of presentation of our financial statements, see "Selected Historical Financial Data," "Management's Discussion and Analysis of Financial Condition or Results of Operations" and our historical financial statements and the notes thereto included elsewhere in this Information Statement.

We may have been able to receive better terms from unaffiliated third parties than the terms we receive in our agreements with ATK.

        We have entered or will enter into, as applicable, certain agreements with ATK related to our separation from ATK, including the Transaction Agreement, Transition Services Agreement, Tax Matters Agreement and the Supply Agreements, while we are still part of ATK. Accordingly, these agreements may not reflect terms that would have resulted from arm's-length negotiations among unaffiliated third parties. The terms of these agreements will relate to, among other things, allocations of assets, liabilities, rights, indemnifications and other obligations between ATK and us. We may have received better terms from third parties because third parties may have competed with each other to win our business. See "Certain Relationships and Related Party Transactions."

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We may be unable to take certain actions after the Merger because such actions could jeopardize the tax-free status of the Spin-Off or the Merger, and such restrictions could be significant.

        Under the Tax Matters Agreement to be entered into by ATK and Vista Outdoor on or prior to the Distribution Date, Vista Outdoor is prohibited from taking actions or omissions that could reasonably be expected to cause the Spin-Off to be taxable or to jeopardize the conclusions of the opinions of counsel received by ATK or Orbital.

        In particular, for two years after the Spin-Off, Vista Outdoor may not:

    liquidate, whether by merger, consolidation or otherwise;

    redeem or otherwise repurchase its capital stock, subject to certain exceptions provided by the Tax Matters Agreement;

    cease to be engaged in the active conduct of, or sell or transfer more than 30% of the gross assets or gross consolidated assets of, the sporting business; or

    enter into any agreement, understanding or arrangement or engage in any substantial negotiations with respect to any transaction involving the acquisition, issuance, repurchase or change of ownership of 30% or more of the Vista Outdoor capital stock, in each case together with options or other rights in respect of that capital stock, subject to certain exceptions relating to employee compensation arrangements, open market stock repurchases and stockholder rights plans.

        Vista Outdoor is permitted to take any of the actions described above if it obtains an opinion of counsel that is reasonably acceptable to ATK (or an IRS private letter ruling) to the effect that the action will not affect the tax-free status of the Spin-Off, the Merger or certain related transactions. Such a ruling or opinion may not be obtainable, however. In addition, the receipt of any such opinion or IRS ruling in respect of an action Vista Outdoor proposes to take will not relieve Vista Outdoor of any obligation it has to indemnify ATK if such action causes the Spin-Off, Merger or certain related transactions to be taxable to ATK.

        Because of these restrictions, for two years after the Spin-Off, Vista Outdoor may be limited in the amount of capital stock it can issue to make acquisitions or to raise additional capital. Also, Vista Outdoor's indemnity obligation to ATK may discourage, delay or prevent a third party from acquiring control of Vista Outdoor during this two-year period in a transaction that stockholders of Vista Outdoor might consider favorable. For additional information, see the section entitled "Certain Relationships and Related Party Transactions-Agreements with ATK—Tax Matters Agreement."

        If the Spin-Off does not qualify as a tax-free spin-off under Section 355 of the Internal Revenue Code (the "Code"), including as a result of subsequent acquisitions of our stock, then we may be obligated to indemnify ATK for such taxes imposed on the combined company.

        The Spin-Off and the Merger are conditioned upon ATK's receipt of an opinion of counsel to the effect that the Spin-Off, Merger and certain related transactions will qualify as tax-free to ATK, Vista Outdoor, Orbital and the stockholders of ATK and Orbital for U.S. federal income tax purposes, except with respect to any cash received by such stockholder in lieu of fractional shares, and except for any gain or loss from any intercompany transactions (within the meaning of Treasury Regulations Section 1.1502-13) taken into account upon the Spin-Off. The Spin-Off and the Merger are also conditioned upon Orbital's receipt of an opinion of counsel to the effect that the Merger will qualify as tax-free to Orbital and the Orbital stockholders for U.S. federal income tax purposes, except with respect to cash received by such stockholders in lieu of fractional shares. The parties will not, however, seek a private letter ruling from the IRS with respect to the tax-free treatment of the Spin-Off, the Merger or any related transactions. An opinion of counsel represents counsel's best legal judgment but is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. The

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opinions of counsel are based on, among other things, certain representations and assumptions as to factual matters made by ATK, Vista Outdoor and Orbital. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the opinions. In addition, the opinions will be based on current law and cannot be relied upon if current law changes with retroactive effect. If the Spin-Off or certain related transactions were taxable, ATK stockholders would recognize income on their receipt of Vista Outdoor stock in the Spin-Off and ATK would be considered to have made a taxable sale of certain of its assets to Vista Outdoor, and could recognize a substantial amount of taxable gain.

        The Spin-Off will be taxable to ATK pursuant to Section 355(e) of the Code if there is a 50% or more change in ownership of either ATK or Vista Outdoor, directly or indirectly, as part of a plan or series of related transactions that include the Spin-Off. Because ATK stockholders will collectively own more than 50% of the ATK common stock following the Merger, the Merger alone will not cause the Spin-Off to be taxable to ATK under Section 355(e). However, Section 355(e) could apply if other acquisitions of stock of ATK before or after the Merger, or of Vista Outdoor after the Merger, are considered to be part of a plan or series of related transactions that include the Spin-Off. If Section 355(e) applied, ATK would be considered to have made a taxable sale of certain of its assets to Vista Outdoor and could recognize a substantial amount of taxable gain.

        Under the Tax Matters Agreement, in certain circumstances, and subject to certain limitations, Vista Outdoor will be required to indemnify ATK against any taxes incurred by ATK on the Spin-Off that arise as a result of actions or failures to act by Vista Outdoor, or as a result of Section 355(e) applying due to acquisitions of Vista Outdoor stock after the Spin-Off. Any such indemnification obligation could materially adversely affect Vista Outdoor's financial condition. Additionally, Vista Outdoor's indemnity obligation to ATK may discourage, delay or prevent a third party from acquiring control of Vista Outdoor during this two-year period in a transaction that stockholders of Vista Outdoor might consider favorable. For additional information, see the section entitled "The Spin-Off-Material U.S. Federal Income Tax Consequences of the Spin-Off."

Risks Relating to the Securities Market and Ownership of Our Common Stock

No market for our common stock currently exists and an active trading market may not develop or be sustained after the Spin-Off. Following the Spin-Off our stock price may fluctuate significantly.

        There is currently no public market for our common stock. We intend to apply to list our common stock on the NYSE. We anticipate that before the Distribution Date, trading of shares of our common stock may begin on a "when-issued" basis and this trading will continue up to and including the Distribution Date. However, an active trading market for our common stock may not develop as a result of the Spin-Off or may not be sustained in the future. The lack of an active market may make it more difficult for stockholders to sell our shares and could lead to our share price being depressed or volatile.

        We cannot predict the prices at which our common stock may trade after the Spin-Off. The market price of our common stock may fluctuate widely, depending on many factors, some of which may be beyond our control, including:

    actual or anticipated fluctuations in our results of operations due to factors related to our business;

    success or failure of our business strategies;

    our quarterly or annual earnings, or those of other companies in our industry;

    our ability to obtain financing as needed;

    announcements by us or our competitors of significant acquisitions or dispositions;

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    changes in accounting standards, policies, guidance, interpretations or principles;

    the failure of securities analysts to cover our common stock after the Spin-Off;

    changes in earnings estimates by securities analysts or our ability to meet those estimates;

    the operating and stock price performance of other comparable companies;

    investor perception of our company and the shooting and outdoor recreational industry;

    overall market fluctuations;

    results from any material litigation or government investigation;

    changes in laws and regulations (including tax laws and regulations) affecting our business;

    changes in capital gains taxes and taxes on dividends affecting stockholders; and

    general economic conditions and other external factors.

        Furthermore, our business profile and market capitalization may not fit the investment objectives of some ATK stockholders and, as a result, these ATK stockholders may sell their shares of our common stock after the Distribution. See "—Substantial sales of our common stock may occur in connection with the Spin-Off, which could cause our stock price to decline." Low trading volume for our stock, which may occur if an active trading market does not develop, among other reasons, would amplify the effect of the above factors on our stock price volatility.

        Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations could adversely affect the trading price of our common stock.

Substantial sales of our common stock may occur in connection with the Spin-Off, which could cause our stock price to decline.

        ATK stockholders receiving shares of our common stock in the Distribution generally may sell those shares immediately in the public market. Although we have no actual knowledge of any plan or intention of any significant stockholder to sell our common stock following the Spin-Off, it is likely that some ATK stockholders, possibly including some of its larger stockholders, will sell their shares of our common stock received in the Distribution if, for reasons such as our business profile or market capitalization as an independent company, we do not fit their investment objectives, or, in the case of index funds, we are not a participant in the index in which they are investing. The sales of significant amounts of our common stock or the perception in the market that such sales may occur may decrease the market price of our common stock.

We cannot assure you that we will pay dividends on our common stock, and our indebtedness will limit our ability to pay dividends on our common stock.

        Following the Spin-Off, we do not currently expect to pay dividends on our common stock. Instead, we intend to retain our future earnings to finance the growth and development of our business and for working capital and general corporate purposes. Any future payment of dividends will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with debt obligations, legal requirements, regulatory constraints, industry practice and other factors that our board of directors deems relevant. For more information, see "Dividend Policy." We cannot assure you that we will pay a dividend in the future or continue to pay any dividend if we do commence paying dividends, and we cannot assure you that, in the future, the combined annual dividends paid on ATK common stock, if any, and our common stock, if any, after the Spin-Off will equal the annual dividends on ATK common stock prior to the Spin-Off.

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Your percentage ownership in Vista Outdoor may be diluted in the future.

        Your percentage ownership in Vista Outdoor may be diluted in the future because of equity awards that we expect to grant to our directors, officers and other employees. Prior to completion of the Spin-Off, we expect to approve an incentive plan that will provide for the grant of common stock-based equity awards to our directors, officers and other employees. In addition, we may issue equity as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future or as necessary to finance our ongoing operations.

Provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws, the Tax Matters Agreement and Delaware law may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.

        Several provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and Delaware law may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable. These include provisions that:

    permit us to issue preferred stock as more fully described under "Description of Our Capital Stock—Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws";

    forbid our stockholders to act by written consent and require that stockholder action must take place at a duly called annual or special meeting of our stockholders;

    establish how stockholders may present proposals or nominate directors for election at meetings of our stockholders;

    divide our board of directors into three classes, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult;

    mandate that stockholders may only remove directors for cause;

    grant exclusive privilege (subject to certain limited exceptions) to our directors, and not our stockholders, to fill vacancies on our board of directors;

    provide that only our board of directors, Chairman of our board of directors, our Chief Executive Officer or the President (in the absence of the Chief Executive Officer) are entitled to call a special meeting of our stockholders; and

    limit our ability to enter into business combination transactions with certain stockholders.

        These and other provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws and Delaware law may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control of us, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their shares of our common stock at a price above the prevailing market price. See "Description of Our Capital Stock—Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws" for more information.

        In addition, under the Tax Matters Agreement to be entered into by ATK and Vista Outdoor on or prior to the Distribution Date, Vista Outdoor's indemnity obligation to ATK may discourage, delay or prevent a third party from acquiring control of Vista Outdoor during the two-year period following the Spin-Off in a transaction that stockholders of Vista Outdoor might consider favorable. See "—Risks Relating to the Spin-Off—We may be unable to take certain actions after the Merger because such actions could jeopardize the tax-free status of the Spin-Off or the Merger, and such restrictions could be significant."

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

        This Information Statement contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events. Words such as "may," "will," "expected," "intend," "estimate," "anticipate," "believe," "project," or "continue," and similar expressions are used to identify forward-looking statements. These forward-looking statements are based on management's current expectations and assumptions regarding our business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. Consequently, no forward-looking statements can be guaranteed. Actual results may vary materially. We caution you not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and you should not consider the following list to be a complete statement of all potential risks and uncertainties. Any change in the following factors may impact the achievement of results:

    competition in the outdoor sporting market;

    change in demand and manufacturing costs of our products;

    supply, availability, and costs of raw materials and components, including commodity price fluctuations;

    risks associated with expansion into new and adjacent commercial markets;

    government laws and other rules and regulations applicable to Vista Outdoor, including procurement and import-export control;

    exposure to potential product liability, warranty liability or personal injury claims and litigation;

    our products, including ammunition and firearms, are subject to extensive regulation;

    environmental laws that govern past, current and future practices and rules and regulations;

    changes in the regulation of the manufacture, sale and purchase of firearms and ammunition;

    security threats, including cybersecurity and other industrial and physical security threats;

    the costs and ultimate outcome of litigation matters and other legal proceedings;

    major earthquakes, weather events, cyber-attacks, terrorist attacks or other catastrophic events at any of our facilities;

    financial market disruptions or volatility to our customers and vendors;

    unanticipated changes in the tax provision or exposure to additional tax liabilities;

    costs of servicing our debt, including cash requirements and interest rate fluctuations;

    actual pension and other postretirement plan asset returns and assumptions regarding future returns, discount rates, service costs, mortality rates and health care cost trend rates;

    performance of our subcontractors; and

    development of key technologies and retention of a qualified workforce.

        This list of factors is not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that would impact our business, financial condition and results of operations. Any forward-looking statements made by us in this Information Statement speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

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THE SPIN-OFF

Background

        On April 28, 2014, ATK entered into a Transaction Agreement (the "Transaction Agreement") with Vista Outdoor, Vista Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of ATK ("Merger Sub"), and Orbital Sciences Corporation, a Delaware corporation ("Orbital"), providing for the Spin-Off of ATK's Sporting Group to ATK's stockholders, which will be immediately followed by the merger of Merger Sub with and into Orbital (the "Merger" and together with the Spin-Off, the "Transaction"), with Orbital surviving the Merger as a wholly owned subsidiary of ATK. The combined company's name will be Orbital ATK Inc., which we refer to as "Orbital ATK." The Merger is described in greater detail under a separate registration statement on Form S-4 filed by ATK (Reg. No. 333-198460).

        To effect the Spin-Off, ATK is undertaking the Sporting Transfers described under "Certain Relationships and Related Party Transactions—ATK—Transaction Agreement—Sporting Transfers." Following the Sporting Transfers, ATK will distribute all the shares of our common stock to its stockholders on a pro rata basis. Following the Spin-Off, ATK will cease to own any equity interest in us, and we will operate as an independent, publicly traded company.

        Pursuant to the terms of the Transaction Agreement, ATK will be obligated to effect the Distribution after the satisfaction or waiver, in its sole discretion, of certain conditions. The approval by holders of a majority of ATK's common stock of the issuance of ATK common stock to Orbital stockholders in connection with the Merger is a condition to ATK's obligation to effect the Distribution. ATK is seeking such approval from the holders of ATK common shares at a special meeting of ATK's stockholders to be held on January 27, 2015. We are not asking you to take any other action, make any payment or surrender or exchange any of your shares of ATK common stock for shares of our common stock in connection with the Spin-Off. For a more detailed description, see "—Conditions to the Spin-Off."

Reasons for the Spin-Off

        The ATK board of directors believes that the separation of ATK's Sporting Group business from its Aerospace and Defense Group would be in the best interests of ATK and its stockholders and approved the plan of separation. A wide variety of factors were considered by the ATK board of directors in evaluating the separation. Among other things, the ATK board of directors considered the following potential benefits of the separation:

    Strategic Clarity and Focus.  Following the Spin-Off, Orbital ATK and Vista Outdoor will each have a more focused business and customer base and be better able to dedicate financial resources to pursue appropriate growth opportunities and execute strategic plans best suited to its respective business and customer base. In particular, the Spin-Off will allow Vista Outdoor to further expand the range of its outdoor sporting products and enter new, adjacent markets. The Spin-Off will also allow each of Orbital ATK and Vista Outdoor to enhance their respective strategic flexibility to respond to industry dynamics.

    Efficient Capital Allocation.  The Spin-Off will permit each of Orbital ATK and Vista Outdoor to concentrate their respective financial resources solely on their own operations without having to compete with each other for investment capital. This will provide each company with greater flexibility to invest capital in their respective businesses in a time and manner appropriate for their distinct strategies and business needs and will facilitate a more efficient allocation of capital. Investors will be able to value appropriately each of Orbital ATK and Vista Outdoor based on its own characteristics and merits.

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    Focused Management.  The Spin-Off will allow the management of each of Orbital ATK and Vista Outdoor to devote their respective time and attention to the development and implementation of corporate strategies and policies that are based primarily on the specific business characteristics of their respective companies.

    Management Alignment.  The Spin-Off will enable Vista Outdoor to create incentives for its management and employees that are more closely tied to its business performance and stockholder expectations. Vista Outdoor's equity-based compensation arrangements will more closely align the interests of Vista Outdoor's management and employees with the interests of its stockholders, which we expect to increase Vista Outdoor's ability to attract and retain personnel. In addition, the Spin-Off will allow Vista Outdoor to attract talented management and employees interested in working in the outdoor recreation industry.

    Stockholder Flexibility.  The Spin-Off will allow investors to make independent investment decisions with respect to Orbital ATK and Vista Outdoor and will enable Orbital ATK and Vista Outdoor to align with a more natural stockholder base. Investments in Orbital ATK or Vista Outdoor may appeal to investors with different goals, interests and concerns. In addition, the Spin-Off will allow Vista Outdoor to raise equity capital in the future, if needed, among investors most interested in the outdoor recreation industry.

        In addition, the Spin-Off is a condition to the Merger. The ATK board of directors believes that the Merger will provide a number of significant benefits, including the following:

    the Merger will create a more focused aerospace and defense business, which will provide its customers with advanced capabilities and a commitment to continuous innovation in support of the U.S. military and allied military requirements, space missions and aerospace capabilities;

    with a significant increase in scale and potential to achieve substantial synergies, Orbital ATK will have greater growth potential than either ATK or Orbital would on a standalone basis;

    the Merger is expected to generate meaningful synergies, including through the consolidation of corporate functions and increased operational efficiencies through the adoption of the best practices and capabilities from ATK and Orbital;

    the Merger will enable Orbital ATK to provide customers with additional value through a collective workforce of approximately 13,000 highly skilled employees with a shared commitment to provide the best products, systems, services and solutions and with benefits from greater career and professional development opportunities generated by the Merger; and

    positions Orbital ATK to have, as a combined company, a stronger financial position.

        The ATK board of directors also considered a number of potentially negative factors in evaluating the Spin-Off, including the loss of synergies and joint purchasing power and increased costs resulting from operating as a separate public entity, one-time costs of the Spin-Off, the risk of not realizing the anticipated benefits of the Spin-Off and limitations placed upon Vista Outdoor as a result of any tax-sharing agreement. The ATK board of directors concluded that the potential benefits of the Spin-Off outweighed these factors.

When and How You Will Receive Vista Outdoor Shares

        ATK will distribute to its stockholders, as a pro rata dividend, [        ] share[s] of our common stock for each share of ATK common stock outstanding as of [        ], 2015, which is the Record Date.

        Prior to the Distribution, ATK will deliver all of the issued and outstanding shares of our common stock to the distribution agent. Computershare Trust Company, N.A. will serve as distribution agent in connection with the Distribution and as transfer agent and registrar for our common stock.

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        If you own ATK common stock as of the close of business on the Record Date, the shares of our common stock that you are entitled to receive in the Distribution will be issued to your account as follows:

    Registered stockholders.  If you own your shares of ATK common stock directly through ATK's transfer agent, Computershare Trust Company, N.A., you are a registered stockholder. In this case, the distribution agent will credit the whole shares of our common stock you receive in the Distribution by way of direct registration in book-entry form to a new account with our transfer agent. Registration in book-entry form refers to a method of recording share ownership where no physical stock certificates are issued to stockholders, as is the case in the Distribution. You will be able to access information regarding your book-entry account holding the Vista Outdoor shares at www.computershare.com/investor or by calling 866-865-6322.

      Commencing on or shortly after the Distribution Date, the distribution agent will mail to you an account statement that indicates the number of whole shares of our common stock that have been registered in book-entry form in your name. We expect it will take the distribution agent up to two weeks after the Distribution Date to complete the distribution of the shares of our common stock and mail statements of holding to all registered stockholders.

    "Street name" or beneficial stockholders.  Most ATK stockholders own their shares of ATK common stock beneficially through a bank, broker or other nominee. In these cases, the bank, broker or other nominee holds the shares in "street name" and records your ownership on its books. If you own your shares of ATK common stock through a bank, broker or other nominee, your bank, broker or other nominee will credit your account with the whole shares of our common stock that you receive in the Distribution on or shortly after the Distribution Date. We encourage you to contact your bank, broker or other nominee if you have any questions concerning the mechanics of having shares held in "street name."

        If you sell any of your shares of ATK common stock on or before the Distribution Date, the buyer of those shares may in some circumstances be entitled to receive the shares of our common stock to be distributed in respect of the ATK shares you sold. See "—Trading Prior to the Distribution Date" for more information.

        While the number of outstanding shares of ATK common stock will not change as a result of the Spin-Off, additional shares of ATK common stock will be issued in connection with the Merger. As a result of the Transaction, current ATK stockholders will own approximately 53.8% of Orbital ATK on a fully-diluted basis after the completion of the Merger.

Number of Shares You Will Receive

        On the Distribution Date, you will receive [        ] share[s] of our common stock for each share of ATK common stock you owned as of the Record Date.

Treatment of Fractional Shares

        The distribution agent will not distribute any fractional shares of our common stock in connection with the Spin-Off. Instead, the distribution agent will aggregate all fractional shares into whole shares and sell the whole shares in the open market at prevailing market prices on behalf of ATK stockholders entitled to receive a fractional share. The distribution agent will then distribute the aggregate cash proceeds of the sales, net of brokerage fees and other costs, pro rata to these holders (net of any required withholding for taxes applicable to each holder). We anticipate that the distribution agent will make these sales in the "when-issued" market, and "when-issued" trades will generally settle within four trading days following the Distribution Date. See "—Trading Prior to the Distribution Date" for additional information regarding "when-issued" trading. The distribution agent will, in its sole

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discretion, without any influence by ATK, Orbital or us, determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent is not, and any broker-dealer used by the distribution agent will not be, an affiliate of ATK, Orbital or us.

        The distribution agent will distribute to each registered holder of ATK common stock entitled to a fractional share the amount deliverable in lieu of that holder's fractional share as soon as practicable following the Distribution Date. We expect the distribution agent to take about two weeks after the Distribution Date to complete the distribution of cash in lieu of fractional shares to ATK stockholders. If you hold your shares through a bank, broker or other nominee, your bank, broker or nominee will receive, on your behalf, your pro rata share of the aggregate net cash proceeds of the sales. No interest will be paid on any cash you receive in lieu of a fractional share. The cash you receive in lieu of a fractional share will generally be taxable to you for U.S. federal income tax purposes. See "—Material U.S. Federal Income Tax Consequences of the Spin-Off" below for more information.

Material U.S. Federal Income Tax Consequences of the Spin-Off

        The following discusses the material U.S. federal income tax consequences of the Spin-Off. The discussion that follows is based on the opinions of counsel, as discussed more fully below, the Code, U.S. Treasury regulations promulgated under the Code, and judicial and administrative interpretations thereof, all as in effect as of the date of this document, all of which are subject to change at any time, possibly with retroactive effect.

        This is not a complete description of all of the tax consequences of the Spin-Off and, in particular, may not address U.S. federal income tax considerations applicable to ATK stockholders subject to special treatment under the U.S. federal income tax law, such as financial institutions, dealers in securities, traders in securities who elect to apply a mark-to-market method of accounting, insurance companies, tax-exempt entities, partnerships and other pass-through entities, holders who acquired their ATK common stock as compensation, and holders who hold ATK common stock as part of a "hedge," "straddle," "conversion" or "constructive sale" transaction. This discussion does not address the tax consequences to any person who actually or constructively owns more than 5% of ATK common stock. In addition, this discussion does not address the U.S. federal income tax consequences to ATK stockholders who do not hold common stock of ATK as a capital asset for U.S. federal income tax purposes. No information is provided in this document with respect to the tax consequences of the Spin-Off under any applicable foreign, state, local or other laws.

        This discussion is limited to ATK stockholders that are "U.S. holders". For purposes of this document, a "U.S. holder" means a stockholder of ATK other than an entity or arrangement classified as a partnership for U.S. federal income tax purposes, that for U.S. federal income tax purposes is:

    an individual who is a citizen or resident of the United States;

    a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or of any political subdivision thereof;

    an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

    a trust if it (i) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) was in existence on August 20, 1996, and has properly elected under applicable U.S. Treasury regulations to be treated as a U.S. person.

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        If an entity or arrangement classified as a partnership for U.S. federal income tax purposes beneficially owns ATK common stock, the tax treatment of a partner in such entity or arrangement generally will depend on the status of the partner and the activities of the entity or arrangement. If you are a partner in a partnership (or an entity classified as a partnership for U.S. federal income tax purposes) that beneficially owns ATK common stock, please consult your tax advisor.

        ATK stockholders are urged to consult with their own tax advisors regarding the tax consequences of the Spin-Off to them, as applicable, including the effects of U.S. federal, state, local, foreign and other tax laws.

Consequences to U.S. Holders

        General.    The obligations of ATK and Vista Outdoor to consummate the transaction, including the Spin-Off, are conditioned upon the receipt by ATK of the Cravath tax opinion. Subject to qualifications and limitations set forth herein (including the discussion below under the heading "—Cash in Lieu of Fractional Shares"), Cravath, Swaine & Moore LLP, counsel to ATK, is of the opinion that for U.S. Federal income tax purposes:

    the Spin-Off will qualify as a distribution described in Section 355 of the Code;

    no gain or loss will be recognized by, and no amount will be includible in the income of, a U.S. holder solely as a result of the receipt of Vista Outdoor common stock in the Spin-Off;

    the holding period for Vista Outdoor common stock received in the Spin-Off will include the holding period for ATK common stock with respect to which the Vista Outdoor stock is distributed; and

    the tax basis of ATK common stock with respect to which Vista Outdoor common stock is distributed in the Spin-Off will be apportioned between such ATK common stock and the shares of Vista Outdoor common stock received in respect thereof, including any fractional shares of Vista Outdoor common stock deemed received in respect thereof, based upon the relative fair market values of ATK and Vista Outdoor at the time of the Spin-Off.

        Cravath's tax opinion does not address any state, local or foreign tax consequences of the Spin-Off. It is based on certain assumptions and representations as to factual matters from ATK and Vista Outdoor, as well as certain covenants by ATK and Vista Outdoor. The opinion cannot be relied upon if any of the assumptions, representations or covenants is incorrect, incomplete or inaccurate or is violated in any material respect. In addition, the opinion is based on current law and cannot be relied upon if current law changes with retroactive effect.

        The opinion of counsel is not binding upon the IRS or the courts, and there is no assurance that the IRS or a court will not take a contrary position. ATK does not intend to request a ruling from the IRS regarding any aspects of the U.S. federal income tax consequences of the transaction. If the Spin-Off were determined not to qualify for non-recognition of gain and loss under Section 355 of the Code, the above consequences would not apply and U.S. holders would be subject to tax. In general, if the Spin-Off does not qualify as a tax-free distribution described in Section 355 of the Code, the Spin-Off would be treated as a taxable dividend to each U.S. holder that receives Vista Outdoor common stock in the Spin-Off in an amount equal to the fair market value of the Vista Outdoor common stock received, to the extent of such U.S. holder's ratable share of ATK's earnings and profits.

        Following the Spin-Off, ATK will timely post a completed IRS Form 8937 ("Report of Organizational Actions Affecting Basis of Securities") on its website. This form, which will also be filed with the IRS, will provide U.S. holders with a description of the effects of the Spin-Off on the tax basis that such U.S. holders have in the ATK common stock, along with additional required information.

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        Cash in Lieu of Fractional Shares.    No fractional shares of Vista Outdoor common stock will be distributed to ATK stockholders of record in connection with the Spin-Off. All such fractional shares of Vista Outdoor common stock will be aggregated and sold by the agent, and the proceeds, if any, less any brokers' charges, commissions or transfer taxes, will be distributed to the record owners of such fractional shares in accordance with their fractional interest in the aggregate number of shares sold.

        A U.S. holder that receives cash in lieu of a fractional share as a part of the Spin-Off will generally recognize capital gain or loss measured by the difference between the cash received for such fractional share and such U.S. holder's tax basis in the fractional share, as described above under "—General". If an individual U.S. holder had held all of its relevant common stock for more than one year, such U.S. holder would generally be subject to U.S. federal income tax at the long-term capital gains rate.

Consequences to ATK

        Subject to qualifications and limitations set forth herein, Cravath, Swaine & Moore LLP, counsel to ATK, is of the opinion that for U.S. Federal income tax purposes:

    the Spin-Off will qualify as a distribution described in Section 355 of the Code; and

    no gain or loss will be recognized to ATK as a result of the Spin-Off (other than any gain or loss from any intercompany transactions within the meaning of Treasury Regulations Section 1.1502-13).

        This opinion of counsel is subject to the same qualifications and limitations as are set forth above under "-Consequences to U.S. Holders".

        If the Spin-Off does not qualify as a tax-free distribution described in Section 355, ATK would be considered to have made a taxable sale of certain of its assets to Vista Outdoor and would recognize a substantial amount of taxable gain. In addition, even if the Spin-Off were otherwise to qualify as a tax-free distribution described in Section 355 of the Code, the Spin-Off will become taxable to ATK (but not to ATK stockholders) pursuant to Section 355(e) of the Code if there is a 50% or greater change in ownership of either ATK or Vista Outdoor, directly or indirectly, as part of a plan or series of related transactions that include the Spin-Off. For this purpose, any acquisitions of ATK common stock or Vista Outdoor common stock within the period beginning two years before the Spin-Off and ending two years after the Spin-Off are presumed to be part of such a plan, although ATK or Vista Outdoor may be able to rebut that presumption. Further, for purposes of this test, the merger will be treated as part of such a plan, but the merger standing alone will not cause the Spin-Off to be taxable to ATK under Section 355(e) of the Code because ATK stockholders will own more than 50% of ATK common stock following the effective time. However, if the IRS were to determine that other acquisitions of ATK common stock or Vista Outdoor common stock, directly or indirectly, either before or after the Spin-Off, were part of a plan or series of related transactions that included the Spin-Off, such determination would result in the recognition of a very substantial amount of gain by ATK under Section 355(e) of the Code, which would result in significant tax to ATK. In connection with the Cravath tax opinion, ATK, Vista Outdoor and Orbital have represented or will represent that the Spin-Off is not part of any such plan or series of related transactions.

        Under the Tax Matters Agreement, in certain circumstances and subject to certain limitations, Vista Outdoor will be required to indemnify ATK against any taxes incurred by ATK on the Spin-Off. If Vista Outdoor were required to indemnify ATK, this indemnification obligation would be substantial and would materially and adversely affect Vista Outdoor, its business, liquidity, financial condition and results of operations. In other cases, however, ATK might recognize gain on the Spin-Off without being entitled to an indemnification payment under the Tax Matters Agreement. Similarly, in certain circumstances and subject to certain limitations, ATK will be required under the Tax Matters

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Agreement to indemnify Vista Outdoor against taxes incurred by Vista Outdoor on the Spin-Off. If ATK were required to indemnify Vista Outdoor, this indemnification obligation would also be substantial and would materially and adversely affect ATK, its business, liquidity, financial condition and results of operations. See "Other Agreements—Tax Matters Agreement" for a summary of the Tax Matters Agreement, including the circumstances under which Vista Outdoor is required to indemnify the combined company or ATK is required to indemnify Vista Outdoor.

Information Reporting and Backup Withholding

        U.S. Treasury regulations generally require each U.S. holder that is a "significant distributee" and that receives Vista Outdoor stock in the Spin-Off to attach to his, her or its U.S. federal income tax return for the year in which the Spin-Off occurs a detailed statement setting forth certain information relating to the tax-free nature of the Spin-Off. For these purposes, a significant distributee is generally a U.S. holder that, immediately before the Spin-Off, owns 5% or more of the ATK common stock or owns ATK securities with a basis of $1 million or more. ATK and Vista Outdoor will provide the appropriate information to each such U.S. holder upon request and each such U.S. holder is required to retain permanent records of this information.

        In addition, payments of cash to a U.S. holder in lieu of fractional shares of Vista Outdoor common stock in the Spin-Off may be subject to information reporting, unless the U.S. holder provides proof of an applicable exemption. Payments that are subject to information reporting may also be subject to backup withholding (currently at a rate of 28%), unless such U.S. holder provides a correct taxpayer identification number and otherwise complies with the requirements of the backup withholding rules. Backup withholding is not an additional tax, but rather an advance payment that may be refunded or credited against a U.S. holder's U.S. federal income tax liability, provided the required information is timely supplied to the IRS.

        THE FOREGOING IS A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION UNDER CURRENT LAW AND FOR GENERAL INFORMATION ONLY. THE FOREGOING DOES NOT PURPORT TO ADDRESS ALL U.S. FEDERAL INCOME TAX CONSEQUENCES OR TAX CONSEQUENCES THAT MAY ARISE UNDER THE TAX LAWS OR THAT MAY APPLY TO PARTICULAR CATEGORIES OF STOCKHOLDERS. EACH ATK STOCKHOLDER SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS, AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.

Results of the Spin-Off

        After the Spin-Off, we will be an independent publicly traded company. Immediately following the Spin-Off, we expect to have approximately [        ] beneficial holders of shares of our common stock and approximately [        ] million shares of our common stock outstanding, based on the number of ATK stockholders and shares of ATK common stock outstanding on [        ], 2015. The actual number of shares of our common stock ATK will distribute in the Spin-Off will depend on the actual number of shares of ATK common stock outstanding on the Record Date, which will reflect any issuance of new shares or exercises of outstanding options pursuant to ATK's equity plans on or prior to the Record Date.

        The Spin-Off will not affect the number of outstanding shares of ATK common stock or any rights of ATK stockholders. Immediately following the Spin-Off, however, additional shares of ATK common stock will be issued in connection with the Merger. We expect the trading price of shares of Orbital ATK common stock immediately following the Distribution and Merger to be lower than immediately

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prior to the Distribution and Merger because of the issuance of addition shares of ATK common stock in connection with the Merger and because the trading price of Orbital ATK common stock will no longer reflect the value of the Sporting Group. As a result of the Transaction, current ATK stockholders will own approximately 53.8% of Orbital ATK on a fully-diluted basis after the completion of the Merger. Furthermore, until the market has fully analyzed the value of the combined Orbital ATK without the Sporting Group, the trading price of shares of Orbital ATK common stock may fluctuate.

        Pursuant to the Transaction Agreement, before our separation from ATK, we intend to enter into several agreements with ATK related to the Spin-Off. These agreements will govern the relationship between Vista Outdoor and ATK up to and after completion of the Spin-Off and allocate between Vista Outdoor and ATK various assets, liabilities, rights and obligations, including employee benefits, intellectual property and tax-related assets and liabilities. We describe these arrangements in greater detail under "Certain Relationships and Related Party Transactions—Agreements with ATK."

Listing and Trading of Our Common Stock

        There is currently no public market for our common stock. We have applied to list our common stock on the New York Stock Exchange (the "NYSE") under the symbol "VSTO." We have not and will not set the initial price of our common stock. The initial price will be established by the public market.

Treatment of Equity-Based Compensation

        As of the Distribution Date, each outstanding stock option with respect to ATK common stock will convert into both an option to acquire Vista Outdoor common stock and an option to acquire Orbital ATK common stock on generally the same terms as were applicable prior to the Distribution, with respect to a corresponding number of shares of common stock of Orbital ATK and Vista Outdoor common stock and with an adjusted exercise price, in each case according to the Distribution Ratio. As of the Distribution Date, each award of restricted shares of ATK common stock will convert into both an award of restricted shares of common stock of Orbital ATK and an award of restricted shares of Vista Outdoor common stock, according to the Distribution Ratio, provided that:

    for current and former employees of ATK (excluding employees of Vista Outdoor immediately following the Distribution), converted Vista Outdoor restricted shares related to ATK restricted shares granted more than one year prior to the Distribution will fully vest immediately following the Distribution, and all other Vista Outdoor restricted shares, as converted from ATK restricted shares, will vest on the first anniversary of the date grant by ATK; and

    for current and former employees of Vista Outdoor immediately following the Distribution, converted Orbital ATK restricted shares granted more than one year prior to the Distribution will fully vest, and all other Orbital ATK restricted shares will vest on the first anniversary of the date granted by ATK;

        As of the Distribution Date, ATK performance share units ("PSUs") will convert into time-vesting restricted stock units ("RSUs") based on the level of achievement of performance goals determined by the ATK compensation committee for FY13-15 ATK PSUs (as defined below) and based on target performance for FY14-16 and FY15-17 ATK PSUs (as defined below), and will otherwise be treated as follows:

    converted PSUs with performance goals related to ATK's 2013-2015 fiscal years ("FY13-15 ATK PSUs") and all PSUs held by ATK corporate senior vice presidents and above immediately prior to the Distribution will convert into equivalent RSUs of both Orbital ATK and Vista Outdoor, according to the Distribution Ratio;

46


    for group presidents and vice presidents employed by ATK after the Distribution, PSUs with performance goals related to ATK's 2014-2016 and 2015-2017 fiscal years ("FY14-16 and FY15-17 ATK PSUs") will convert into RSUs with respect to Orbital ATK common stock, adjusting the number of shares to retain the aggregate value of such awards;

    for group presidents and vice presidents employed by Vista Outdoor after the Distribution, FY14-16 and FY15-17 ATK PSUs will convert into RSUs with respect to Vista Outdoor common stock, adjusting the number of shares to retain the aggregate value of such awards;

    subject to limited exceptions, all RSUs with respect to Vista Outdoor common stock and Orbital ATK common stock will maintain the same terms and conditions as the ATK PSUs to which they relate, provided that the vesting criteria will be adjusted to provide for solely service-based vesting.

        ATK deferred share units and ATK phantom stock units will convert into both restricted shares of Orbital ATK and Vista Outdoor according to the Distribution Ratio.

Treatment of 401(k) Shares

        ATK common shares held in ATK's 401(k) plans will be treated in the same manner in the Spin-Off as outstanding ATK common shares.

Incurrence of Debt

        As part of the Transaction, we have entered into the Credit Agreement providing for the Senior Credit Facilities, consisting of the $350 million Term Loan and the $400 million Revolving Credit Facility. We intend to use part of the proceeds of the Senior Credit Facilities to pay the Vista Outdoor Dividend to ATK. We intend to use any remaining proceeds of the Senior Credit Facilities for general corporate purposes.

Trading Prior to the Distribution Date

        We expect that a "when-issued" market in our common stock may develop as early as two trading days prior to the Record Date and continue up to and including the Distribution Date. "When-issued" trading refers to a sale or purchase made conditionally on or before the Distribution Date because the securities of the spun-off entity have not yet been distributed. If you own shares of ATK common stock at the close of business on the Record Date, you will be entitled to receive shares of our common stock in the Distribution. You may trade this entitlement to receive shares of our common stock, without the shares of ATK common stock you own, on the "when-issued" market. We expect "when-issued" trades of our common stock to settle within four trading days after the Distribution Date. On the first trading day following the Distribution Date, we expect that "when-issued" trading of our common stock will end and "regular-way" trading will begin.

        We also anticipate that, as early as two trading days prior to the Record Date and continuing up to and including the Distribution Date, there will be two markets in ATK common stock: a "regular-way" market and an "ex-distribution" market. Shares of ATK common stock that trade on the regular-way market will trade with an entitlement to receive shares of our common stock in the Distribution. Shares that trade on the ex-distribution market will trade without an entitlement to receive shares of our common stock in the Distribution. Therefore, if you sell shares of ATK common stock in the regular-way market up to and including the Distribution Date, you will be selling your right to receive shares of our common stock in the Distribution. However, if you own shares of ATK common stock at the close of business on the Record Date and sell those shares on the ex-distribution market up to and including the Distribution Date, you will still receive the shares of our common stock that you would otherwise be entitled to receive in the Distribution.

47


        Following the Distribution Date, we expect shares of our common stock to trade on NYSE under the trading symbol "VSTO." If "when-issued" trading occurs, the listing for our common stock is expected to be under a trading symbol different from our regular-way trading symbol. We will announce our "when-issued" trading symbol when and if it becomes available. If the Spin-Off does not occur, all "when-issued" trading will be null and void.

Conditions to the Spin-Off

        The Spin-Off requires ATK to have sufficient surplus, as determined in accordance with Section 170 of the Delaware General Corporation Law, to effect the distribution of Vista Outdoor shares. In addition, ATK does not intend to consummate the Spin-Off unless the Merger and the other transactions contemplated by the Transaction Agreement are consummated substantially concurrently. Accordingly, subject to compliance with federal, foreign or state regulatory requirements, other SEC rules and regulations and NYSE rules, ATK will, pursuant to the Transaction Agreement, effect the Spin-Off as promptly as reasonably practicable after the satisfaction of the following conditions to the Merger and the other transactions contemplated by the Transaction Agreement:

    the approval by Orbital stockholders of the Merger;

    the approval by ATK stockholders of the issuance of ATK common stock to Orbital stockholders;

    the termination or expiration of any applicable waiting period under the HSR Act and the receipt of governmental approval under any other material review law;

    the absence of any judgment or law issued or enacted by any governmental authority of competent jurisdiction being in effect that prohibits, enjoins or makes illegal the consummation of the transactions;

    the SEC having declared effective the registration statement of which this Information Statement is a part and ATK's registration statement on Form S-4 (Reg. No. 333-198460), and the absence of any stop order or proceedings seeking a stop order;

    the approval for listing by the NYSE, subject to official notice of issuance, of the ATK common stock issuable to Orbital stockholders in the Merger;

    the representations and warranties of Orbital relating to organization, standing and corporate power, capital structure, absence of anti-takeover agreements and brokers' fees being true and correct in all material respects as of the date of the Transaction Agreement and as of the date of the closing of the Transaction (except to the extent expressly made as of an earlier date, in which case, as of such earlier date);

    each other representation and warranty under the Transaction Agreement of Orbital being true and correct as of the date of the Transaction Agreement and as of the date of the closing of the Transaction (except to the extent expressly made as of an earlier date, in which case, as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually and in the aggregate, has not had and would not reasonably be expected to have a material adverse effect;

    Orbital having performed in all material respects all obligations required to be performed by it under the Transaction Agreement;

    the absence of a material adverse effect on Orbital since the date of the Transaction Agreement;

    the receipt of an officer's certificate executed by an executive officer of the Orbital certifying that the four preceding conditions have been satisfied; and

48


    the receipt of a written opinion from Cravath, Swaine & Moore LLP confirming the tax-free status of the Distribution and the Merger for U.S. federal income tax purposes.

        For additional information, please see the section entitled "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement—Conditions to the Distribution". We expect the Distribution to be effective on [        ], 2015, the Distribution Date.

        Completion of the Spin-Off is one of the conditions to the Transaction. If the Spin-Off is not completed on the terms specified in the Transaction Agreement, ATK may, in certain circumstances, be obligated to pay Orbital a termination fee of $50 million and reimburse certain expenses of Orbital in connection with the Transaction.

Reasons for Furnishing This Information Statement

        We are furnishing this Information Statement solely to provide information to ATK's stockholders who will receive shares of our common stock in the Distribution. You should not construe this Information Statement as an inducement or encouragement to buy, hold or sell any of our securities or any securities of ATK, nor is it to be construed as a solicitation of proxies in respect of the proposed Distribution, the Merger, the issuance of ATK common stock to Orbital stockholders or any other matter. A separate ATK Proxy Statement is being distributed to ATK stockholders in connection with the special meeting scheduled for January 27, 2015. We believe that the information contained in this Information Statement is accurate as of the date set forth on the cover. Changes to the information contained in this Information Statement may occur after that date, and neither we nor ATK undertake any obligation to update the information except in the normal course of our and ATK's public disclosure obligations and practices.

49



DIVIDEND POLICY

        Following the Spin-Off, we do not currently expect to pay dividends on our common stock. Instead, we intend to utilize our future earnings to finance the growth and development of our business and for working capital and general corporate purposes. Any future payment of dividends will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with debt obligations, legal requirements, regulatory constraints, industry practice and other factors that our board of directors deems relevant. We cannot assure you that we will commence paying dividends in the future or, if we do commence paying dividends, that we will continue to pay dividends in the future. See "Risk Factors—Risks Relating to the Securities Market and Ownership of Our Common Stock—We cannot assure you that we will pay dividends on our common stock, and our indebtedness will limit our ability to pay dividends on our common stock."

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CAPITALIZATION

        The following table sets forth the cash and capitalization of the Sporting Group as of September 28, 2014, on a historical basis and on an as adjusted basis to give effect to the Spin-Off and the transactions related to the Spin-Off, including the incurrence of debt and the payment of the Vista Outdoor Dividend to ATK as described elsewhere in this Information Statement, as if they occurred on September 28, 2014. You should review the following table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our combined financial statements and accompanying notes included elsewhere in this Information Statement.

 
  September 28, 2014  
(amounts in millions)
  Actual   As Adjusted  
 
  (unaudited)
 

Cash and cash equivalents

  $ 34.1   $ 134.1  
           
           

Indebtedness

             

Long-term debt payable to parent

    1,008.5        

Senior Credit Facilities:

             

Revolving Credit Facility(a)

           

Term Loan(b)

          350.0  
           

Total indebtedness

  $ 1,008.5   $ 350.0  
           
           

Equity:

             

Common stock

        $ 0.3  

Additional paid-in capital

          1,791.0  

Parent's equity

  $ 1,004.9        

Accumulated other comprehensive loss

    (8.8 )   (45.7 )
           

Total equity

    996.1     1,745.6  
           

Total capitalization

  $ 2,004.6   $ 2,095.6  
           
           

(a)
We have obtained commitments for the $400 million Revolving Credit Facility, maturing five years after the closing date of the Spin-Off, of which a sublimit will be available for the issuance of letters of credit and a sublimit will be available for swingline loans. Other than undrawn letters of credit, we do not expect to have any borrowings outstanding under the Revolving Credit Facility immediately following the Spin-Off.

(b)
We expect to borrow the Term Loan in an aggregate principal amount of $350 million, maturing five years after the closing date of the Spin-Off.

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

        The following unaudited pro forma condensed combined financial information is based upon the historical combined financial information of Vista Outdoor, Bushnell and Savage Arms. The unaudited pro forma condensed combined financial information of Vista Outdoor has been prepared to reflect the Bushnell and Savage Arms acquisitions based on the acquisition method of accounting as well as the spin-off of Vista Outdoor from ATK.

        The pro forma balance sheet assumes that Vista Outdoor's separation from ATK occurred as of September 28, 2014. The pro forma condensed combined statement of income for the six months ended September 28, 2014 and the fiscal year ended March 31, 2014 assumes that the separation from ATK and the acquisitions of Bushnell and Savage Arms occurred as of April 1, 2013. The pro forma condensed combined statement of income for the fiscal year ended March 31, 2014 reflects Bushnell's financial results for the seven months ended October 31, 2013 (the date prior to the acquisition) and Savage Arms' financial results for the period from April 1, 2013 through June 20, 2013 (the date prior to the acquisition); after such dates, the respective financial results of Bushnell and Savage Arms were included in the historical combined financial information of Vista Outdoor. The purchase price allocation for the Bushnell and Savage Arms acquisitions are preliminary and are subject to further refinement. The information contained herein related to pro forma earnings per share assumes that there were [            ] shares of Vista Outdoor common stock outstanding immediately following the Spin-Off, which amount has been determined based on the Distribution Ratio.

        The unaudited pro forma condensed combined financial statements give effect to the following:

    the expected transfer to Vista Outdoor, immediately prior to the Spin-Off, of pension and post-retirement benefit liabilities and associated accumulated other comprehensive income that were not included in Vista Outdoor's historical combined financial statements;

    the incurrence of $350 million in new term debt at the committed annual interest rate of 1.75% plus one-month LIBOR, the elimination of $1,015 million of long-term debt that was allocated to Vista Outdoor by ATK and associated interest expense, and an assumed $250 million dividend payment to ATK to reflect the Vista Outdoor Dividend; and

    the elimination of ATK's equity investment in Vista Outdoor.

        The historical financial information has been adjusted to give effect to events that are directly attributable to the transactions and factually supportable and, in the case of the statement of income data, that are expected to have a continuing impact. Vista Outdoor's historical combined financial statements include expense allocations by ATK to reflect certain support functions that were provided on a centralized basis by ATK during the historical periods, such as expenses for corporate overhead functions and other expenses. After giving effect to the Transaction, Vista Outdoor will incur these expenses, and incur additional costs related to being a standalone public company, independently. As a standalone public company, Vista Outdoor's total costs related to such support functions will differ from the costs that were historically allocated to it by ATK. Vista Outdoor expects that these costs will exceed the allocated amounts for fiscal year 2014. Vista Outdoor has not adjusted the accompanying unaudited pro forma condensed combined statement of income for any of these estimated costs.

        It should be noted that the Savage Arms acquisition was completed on June 21, 2013 and the Bushnell acquisition was completed on November 1, 2013. As such, the Bushnell historical financial information presented herein for the period from April 1, 2013 through October 31, 2013 has been derived by subtracting Bushnell's unaudited financial results for the period from January 1, 2013 to March 31, 2013 from Bushnell's audited financial results for the 10-month period ended October 31, 2013 included elsewhere in this Information Statement. In addition, the Savage Arms historical financial information presented herein for the period from April 1, 2013 through June 20, 2013 has been derived from Savage Arms' unaudited internal financial records for the period from April 1, 2013 through June 20, 2013.

52



Vista Outdoor
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
September 28, 2014
(Dollars in thousands, except per share amounts)

 
  Historical   Transaction
Pro Forma
Adjustments
  Pro Forma
Combined
 

ASSETS

                   

Current assets:

                   

Cash and cash equivalents

  $ 34,149   $ 100,000   (a) $ 134,149  

Net receivables

    399,673         399,673  

Net inventories

    432,633         432,633  

Deferred income tax assets

    51,071         51,071  

Other current assets

    18,025         18,025  
               

Total current assets

    935,551     100,000     1,035,551  

Net property, plant, and equipment

    185,710         185,710  

Goodwill

    823,964         823,964  

Net intangible assets

    549,976         549,976  

Deferred charges and other non-current assets

    17,227     (979 )(b)   16,248  
               

Total assets

  $ 2,512,428   $ 99,021   $ 2,611,449  
               
               

LIABILITIES

                   

Current liabilities:

                   

Accounts payable

  $ 131,850   $   $ 131,850  

Accrued compensation

    22,490         22,490  

Accrued income taxes

    1,530         1,530  

Federal excise tax

    27,226         27,226  

Other accrued liabilities

    99,566         99,566  
               

Total current liabilities

    282,662         282,662  

Long-term debt

        350,000   (b)   350,000  

Long-term debt payable to parent

    1,008,547     (1,008,547 )(b)    

Noncurrent deferred income tax liability

    202,942     (23,100 )(c)   179,842  

Postretirement and employment benefit liabilities

        1,883   (c)   1,883  

Accrued pension liability

        29,300   (c)   29,300  

Other long-term liabilities

    22,098         22,098  
               

Total liabilities

    1,516,249     (650,464 )   865,785  

Commitments and contingencies

                   

EQUITY

                   

Common stock-$0.01 par value:

        318   (d)   318  

Additional paid-in-capital

        1,791,011   (d)   1,791,011  

Parent's equity

    1,004,944     (1,004,944 )(d)    

Accumulated other comprehensive loss

    (8,765 )   (36,900 )(c)   (45,665 )
               

Total liabilities and equity

  $ 2,512,428   $ 99,021   $ 2,611,449  
               
               

   

See accompanying notes to pro forma condensed combined financial statements.

53



Vista Outdoor
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Six Months Ended September 28, 2014
(Amounts in thousands, except per share amounts)

 
  Historical   Transaction
Pro Forma
Adjustments
  Pro Forma
Combined
 

Net sales

  $ 1,091,144   $   $ 1,091,144  

Cost of sales

    819,098     (4,680) (e)   814,418  
               

Gross profit

    272,046     4,680     276,726  

Operating expenses:

                   

Research and development

    4,725         4,725  

Selling

    75,424         75,424  

General and administrative

    57,870     (6,978) (f)   50,892  
               

Income before interest, and income taxes

    134,027     11,658     145,685  

Interest expense

    (16,933 )   13,561 (g)   (3,372 )

Interest income

    9         9  
               

Income before income taxes

    117,103     25,219     142,322  

Income tax provision

    42,313     9,331 (h)   51,644  
               

Net income

  $ 74,790   $ 15,888   $ 90,678  
               
               

Pro forma earnings per common share:

                   

Basic

                   

Diluted

                   

Pro forma weighted-average number of common shares outstanding:

                   

Basic

                   

Diluted

                   

   

See accompanying notes to pro forma condensed combined financial statements.

54



Vista Outdoor
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended March 31, 2014
(Amounts in thousands, except per share amounts)

 
  Historical
March 31,
2014
  Bushnell
(April 1, 2013 -
October 31, 2013)
  Savage Arms
(April 1, 2013 -
June 20, 2013)
  Bushnell and
Savage Arms
Pro Forma
Adjustments
  Transaction
Pro Forma
Adjustments
  Pro Forma
Combined
 

Net sales

  $ 1,873,919   $ 349,579   $ 56,176   $   $   $ 2,279,674  

Cost of sales

    1,406,616     201,592     32,755         (10,742) (e)   1,630,221  
                           

Gross profit

    467,303     147,987     23,421         10,742     649,453  

Operating expenses:

                                     

Research and development

    13,984                     13,984  

Selling

    111,682     85,413     4,685             201,780  

General and administrative

    107,830     47,714     5,499     (20,134) (f)       140,909  
                           

Income before interest and income taxes

    233,807     14,860     13,237     20,134     10,742     292,780  

Interest income (expense)

    (15,469 )   (30,786 )   (1,565 )   32,351 (g)   8,725 (g)   (6,744 )
                           

Income (loss) before income taxes

    218,338     (15,926 )   11,672     52,485     19,467     286,036  

Income tax provision

    85,081     (4,013 )   5,262     16,596 (h)   7,203 (h)   110,129  
                           

Net income (loss)

  $ 133,257   $ (11,913 ) $ 6,410   $ 35,889   $ 12,264   $ 175,907  
                           
                           

Pro forma earnings per common share:

                                     

Basic

                                     

Diluted

                                     

Pro forma weighted-average number of common shares outstanding:

                                     

Basic

                                     

Diluted

                                     

   

See accompanying notes to pro forma condensed combined financial statements.

55



NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Amounts in thousands except share and per share data and unless otherwise indicated)

Pro Forma Adjustments

        The unaudited pro forma condensed combined financial statements reflect the effect of the following pro forma adjustments:

    (a)
    The adjustment represents additional cash on hand as result of the issuance of $350,000 of long term debt as noted in note (b) offset by the payment of the estimated Vista Outdoor Dividend of $250,000.

    (b)
    The adjustments to deferred charges and other non-current assets, and long-term debt and long-term debt payable to parent, reflect the elimination of the long-term debt of $1,008,547 and the associated deferred financing costs of $9,979 allocated to Vista Outdoor by ATK, which will remain with ATK subsequent to the Transaction, and the incurrence of $350,000 of new term debt at the committed annual interest rate of 1.75% plus one-month LIBOR and the associated deferred financing costs of $9,000.

    (c)
    The adjustment to noncurrent deferred income tax liability, postretirement and employment benefit liabilities and accrued pension liability reflects the contribution of Vista Outdoor's portion of ATK's consolidated pension liabilities, postretirement employment benefits and associated accumulated other comprehensive income (AOCI) and deferred tax assets as of the closing date of the Transaction.

    (d)
    The adjustment to common stock, additional paid-in-capital and parent's equity reflects the elimination of ATK's equity investment in Vista Outdoor. The adjustment to additional paid-in-capital also reflects the equity value of the other pro forma adjustments, which includes the payment of the Vista Outdoor Dividend to ATK. The Vista Outdoor Dividend has been estimated at $250,000. The adjustment to common stock reflects the outstanding share amount at a par value of $0.01 per share. The total adjustments to additional paid-in-capital are set forth below:

 
  September 28, 2014  

Eliminate ATK's equity investment

  $ 1,004,944  

Eliminate Debt allocated to Vista Outdoor

    1,008,547  

Vista Outdoor Dividend to ATK

    (250,000 )

Net pension liabilities and AOCI assumed

    28,817  

Deferred financing costs eliminated

    (9,979 )

Deferred financing costs incurred

    9,000  

Transfer to common stock

    (318 )
       

  $ 1,791,011  
       
       
    (e)
    Adjustments to cost of sales reflects the revised pricing under the supply agreement that will be between Vista Outdoor and Orbital ATK and will be effective upon the transaction closing.

    (f)
    Adjustments to general and administrative expense have been made to eliminate Bushnell and Savage Arms' pre-acquisition amortization expense and transaction costs, to record the amortization expense based on the fair value and useful lives of identifiable intangible assets identified as part of the purchase price allocation, and to eliminate the allocated transaction

56


      costs associated with the Transaction. The purchase price allocations for the Bushnell and Savage Arms acquisitions are preliminary and are subject to further refinement.

 
  Six Months Ended
September 28, 2014
  Year Ended
March 31, 2014
 

Bushnell amortization elimination

  $   $ (12,253 )

Savage Arms amortization elimination

        (3,387 )

Bushnell amortization of intangible assets

        10,561  

Savage Arms amortization of intangible assets

        1,725  

Transaction costs

    (6,978 )   (16,780 )
           

  $ (6,978 ) $ (20,134 )
           
           
    (g)
    Adjustments to interest expense have been made to eliminate Bushnell and Savage Arms' pre-acquisition interest expense, as well as the interest expense and amortization of deferred financing charges with respect to the debt allocated to Vista Outdoor by ATK, and to record the interest expense with respect to the $350,000 of debt issued as described in Note (a) at one-month LIBOR (0.177%) plus a margin of 1.75% per annum. A change of 1/8 of a percent would change the interest expense by $438 for the year ended March 31, 2014 and $219 for the six months ended September 28, 2014.

    (h)
    We have reflected the applicable tax provision related to the Bushnell, Savage Arms and transaction pro-forma adjustments and historical Bushnell and Savage Arms results. The pro forma adjustments pertain primarily to the U.S. tax jurisdiction, and reflect a 35% federal tax rate, plus applicable state taxes.

57



SELECTED HISTORICAL FINANCIAL DATA

        The following table presents Vista Outdoor's selected historical combined financial data. Vista Outdoor derived the selected historical combined financial data as of March 31, 2014 and 2013 and for the fiscal years ended March 31, 2014, 2013 and 2012 from Vista Outdoor's audited combined financial statements included elsewhere in this Information Statement. The condensed combined statement of income data for the six months ended September 28, 2014 and September 29, 2013 and the condensed combined balance sheet data as of September 28, 2014 are derived from the unaudited condensed combined financial statements for Vista Outdoor included elsewhere in this Information Statement. Vista Outdoor derived the selected historical combined financial data as of March 31, 2012, 2011 and 2010, and for the fiscal years ended March 31, 2011 and 2010 from Vista Outdoor's unaudited condensed combined financial statements that are not included in this Information Statement. In Vista Outdoor management's opinion, the unaudited condensed combined financial statements for the periods presented have been prepared on the same basis as the audited combined financial statements and include all adjustments, consisting only of normal recurring adjustments and allocations, necessary for a fair statement of the information for the periods presented.

        You should review the selected historical combined financial data presented below in conjunction with our combined financial statements and the accompanying notes thereto, as well as the information set forth under "Unaudited Pro Forma Condensed Combined Financial Information" and the accompanying notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations," each included elsewhere in this Information Statement.

        The financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in the future or what our financial position, results of operations and cash flows would have been had we been an independent, publicly traded company during the periods presented. In addition, our historical financial information does not reflect changes that we expect to experience in the future as a result of our separation from ATK, including changes in the financing, operations, cost structure and personnel needs of our business. Further, the historical financial information includes allocations of certain ATK corporate expenses. We believe the assumptions and methodologies underlying the allocation of these expenses are reasonable. Such expenses may not, however, be indicative of the expenses that we would have incurred if we had operated as an independent, publicly traded company during the period presented or of the costs expected to be incurred in the future.

        We acquired Savage Arms and Bushnell in fiscal year 2014. See Note 4 to our audited combined financial statements and Note 4 to our unaudited condensed combined financial statements for a further description of these acquisitions. We acquired Blackhawk Industries Products Group

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Unlimited, LLC in fiscal year 2011. Our financial statements for fiscal year 2011 have not been included in this Information Statement.

 
  Six Months Ended    
   
   
   
   
 
 
  Years Ended March 31  
(Amounts in thousands except percentages)
  September 28,
2014
  September 29,
2013
 
  2014   2013   2012   2011   2010  

Results of Operations

                                           

Net Sales

  $ 1,091,144   $ 784,526   $ 1,873,919   $ 1,196,031   $ 1,042,914   $ 956,499   $ 778,083  

Cost of sales

    819,098     607,862     1,406,616     953,593     850,506     727,271     581,975  
                               

Gross profit

    272,046     176,664     467,303     242,438     192,408     229,228     196,108  

Operating expenses:

                                           

Research and development

    4,725     4,432     13,984     8,720     7,497     7,175     6,358  

Selling

    75,424     44,093     111,682     72,140     63,920     58,266     46,223  

General and administrative

    57,870     42,582     107,830     60,123     42,896     43,215     35,896  

Goodwill impairment(1)

                    47,791          
                               

Income before interest and income taxes

    134,027     85,557     233,807     101,455     30,304     120,572     107,631  

Interest (expense) income, net

    (16,924 )   (1,255 )   (15,469 )   7     3     7      
                               

Income before income taxes

    117,103     84,302     218,338     101,462     30,307     120,579     107,631  

Income tax provision

    42,313     32,435     85,081     36,770     19,647     42,979     40,043  
                               

Net Income

  $ 74,790   $ 51,867   $ 133,257   $ 64,692   $ 10,660   $ 77,600   $ 67,588  
                               
                               

Financial Position

                                           

Net current assets

  $ 935,551         $ 517,047   $ 200,952   $ 180,860   $ 173,187   $ 129,289  

Net property, plant, and equipment

    185,710           189,096     123,604     118,225     113,322     96,927  

Total assets

    2,512,428           2,457,658     797,812     745,882     774,044     538,992  

Long-term debt payable to parent (including current portion)

    1,008,547           1,014,911                  

Total equity

    996,179           870,731     531,900     520,305     564,342     374,673  

Other Data

                                           

Depreciation and amortization of intangible assets

  $ 30,926   $ 14,946   $ 44,902   $ 25,128   $ 24,490   $ 21,471   $ 12,124  

Capital expenditures(2)

    20,353     12,075     40,234     23,395     23,611     25,896     33,108  

Operating margin(3)

    12.3 %   10.9 %   12.5 %   8.5 %   2.9 %   12.6 %   13.8 %

(1)
In fiscal year 2012, we recorded an impairment to the goodwill associated with our fiscal year 2009 acquisition of the Eagle military accessories business. The impairment resulted from an anticipated decline in deployed military forces. See Note 8 to our audited combined financial statements.

(2)
Capital expenditures are shown net of capital expenditures included in accounts payable and financed through operating leases.

(3)
Represents income before interest and income taxes expressed as a percentage of sales.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Business Overview

        We are a leading global designer, manufacturer and marketer of consumer products in the growing outdoor sports and recreation markets. We serve these markets through our diverse portfolio of over 30 well-recognized brands that provide consumers with a range of affordable, performance-driven, high-quality and innovative products, including sporting ammunition and firearms, outdoor accessories, outdoor sports optics, golf rangefinders and performance eyewear. We serve a broad range of end consumers, including outdoor enthusiasts, hunters and recreational shooters, professional athletes, as well as law enforcement and military professionals. Our products are sold through a wide variety of mass, specialty and independent retailers, such as Walmart, Cabela's, Gander Mountain, Bass Pro Shops, Dick's Sporting Goods, Sportsman's Warehouse and Recreational Equipment, Inc. We have a scalable, integrated portfolio of brands that allows us to leverage our deep customer knowledge, product development and innovation, supply chain and distribution, and sales and marketing functions across product categories to better serve our retail partners and end users.

Transaction Summary

        On April 28, 2014, ATK entered into the Transaction Agreement with Vista Outdoor, Merger Sub and Orbital, providing for the Spin-Off of ATK's Sporting Group, which will be immediately followed by the merger of Merger Sub with and into Orbital, with Orbital surviving the Merger as a wholly owned subsidiary of ATK. To effect the Spin-Off, ATK is undertaking a series of internal reorganizations described under "Certain Relationships and Related Party Transactions—ATK—Transaction Agreement." Following this series of internal reorganizations, ATK will distribute all the shares of Vista Outdoor common stock to its stockholders on a pro rata basis. Following the Spin-Off, ATK will cease to own any equity interest in Vista Outdoor, and Vista Outdoor will operate as an independent, publicly traded company.

        Following the Spin-Off, our results of operations and cash flows may be subject to greater variability as a result of becoming a standalone, publicly traded company. For example, we expect to incur one-time expenditures consisting primarily of employee-related costs, costs to start up certain standalone functions and information technology systems, and other one-time transaction-related costs. Recurring standalone costs include establishing the internal audit, treasury, investor relations, tax and corporate secretary functions as well as the annual expenses associated with running an independent publicly traded company. As a standalone public company, Vista Outdoor expects the recurring standalone corporate costs to be higher than the expenses historically allocated by ATK. For example, if the Spin-Off had occurred on April 1, 2013, we estimate that for the year ended March 31, 2014, we would have incurred approximately $15.0 million of such corporate costs. We believe that our cash flow from operations will be sufficient to fund these corporate expenses. In addition, following the Spin-Off, we will procure certain products on arm's length commercial terms rather than the internal transfer pricing we experienced as part of ATK. For example, after the Spin-Off, we will rely on Orbital ATK for certain of our ammunition and gun powder products pursuant to arm's length supply agreements, and if the production capabilities of Orbital ATK (including its Lake City ammunition plant or Radford gun powder plant) change such that we fail to maintain an adequate supply of ammunition and gun powder products, we may need to procure such products from a third party, either of which would likely result in higher operating costs than we faced as part of ATK. These and other factors may lead to greater volatility in our results of operations and cash flows following the Spin-Off. For additional information, please see the section entitled "Risk Factors—Risks Relating to the Spin-Off."

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Operating Segments

        As of September 28, 2014, Vista Outdoor operated through two business segments. These operating segments are defined based on the reporting and review process used by the chief operating decision maker, Vista Outdoor's chief executive officer. As of September 28, 2014, Vista Outdoor's two operating segments were:

            Shooting Sports, which generated 67% and 76% of Vista Outdoor's external sales in the six months ended September 28, 2014 and fiscal year ended March 31, 2014, respectively. Shooting Sports products include pistol, rifle, rimfire and shotshell ammunition and primers, centerfire rifles, rimfire rifles, shotguns and range systems.

            Outdoor Products, which generated 33% and 24% of Vista Outdoor's external sales in the six months ended September 28, 2014 and fiscal year ended March 31, 2014, respectively. The Outdoor Products product lines are optics, accessories and eyewear. Optics products include binoculars, laser range finders, riflescopes and trail cameras. Accessories products include archery accessories, blinds, decoys, game calls, gun care products, mounts, powder, reloading equipment, targets and target systems. Eyewear products include safety and protective eyewear, as well as fashion and sports eyewear.

Financial Highlights and Notable Events

        Financial highlights and certain notable events or activities affecting our fiscal year 2014 financial results included the following:

Financial highlights for the six months ended September 28, 2014

        Sales of $1.1 billion for the six months ended September 28, 2014.

        Gross Profit as a percentage of sales was 24.9% compared to 22.5% for the six months ended September 29, 2013.

Financial highlights for fiscal year 2014

    Sales of $1.87 billion for the fiscal year ended March 31, 2014.

    Gross Profit as a percentage of sales was 24.9%, compared to 20.3% in fiscal year 2013.

Notable events

    On April 28, 2014, Vista Outdoor entered into the Transaction Agreement with ATK, Merger Sub and Orbital, providing for the Spin-Off and Merger. The Transaction is subject to a number of closing conditions as described under "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement—Conditions to the Distribution."

    On April 28, 2014, Vista Outdoor, ATK, Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliate executed a commitment letter pursuant to which the affiliate committed to provide the Senior Credit Facilities to Vista Outdoor in an aggregate principal amount of $750 million, comprised of the $350 million Term Loan and the $400 million Revolving Credit Facility. Vista Outdoor will use a portion of the proceeds of the Senior Credit Facilities to pay the Vista Outdoor Dividend to ATK in an amount equal to the amount by which ATK's gross indebtedness for borrowed money, as of the closing date of the Transaction, exceeds $1,740 million, subject to certain adjustments.

    On November 1, 2013, ATK acquired Bushnell Group Holdings, Inc., a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and eyewear, for

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      $985 million in cash, net of cash acquired, and subject to a customary working capital adjustment. Bushnell is included in the Vista Outdoor combined financial results from the acquisition date.

    On June 21, 2013, ATK acquired Caliber Company, the parent company of Savage Sports Corporation, for $315 million in cash, net of cash acquired, and subject to a customary working capital adjustment. Caliber Company is included in the Vista Outdoor combined financial results from the acquisition date.

Market Outlook

        In calendar year 2014 there was a decline in the number of new long-gun registrations as evidenced by the NICS. This decline indicates there may be decreased demand for long-guns and related accessory categories, which could impact our future Shooting Sports revenue. As a result of this, lower market valuations of other firearms market participants, and a decline in our near-term projected cash flows in the Shooting Sports Segment, we currently expect to record a non-cash, goodwill/trade name impairment charge with only partial tax benefits in the third quarter of fiscal 2015. See "—Critical Accounting Policies—Accounting for Goodwill". Previous market declines have lasted 12-24 months, but it is difficult to predict the significance or length of the current market situation.

Results of Operations

        All dollar amounts presented in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are in thousands, except share and per share data or unless otherwise indicated.

        The following information should be read in conjunction with Vista Outdoor's combined financial statements included elsewhere in this Information Statement. The key performance indicators that Vista Outdoor's management uses in managing the business are sales, gross profit and cash flows. Additional operating segment information, including total assets, is presented in Note 16 to our audited combined financial statements and Note 18 to our unaudited condensed combined financial statements.

        Segment total net sales, cost of sales and gross profit include intergroup sales and profit. Corporate and Eliminations includes intergroup sales and profit eliminations and corporate expenses.

Six Months Ended September 28, 2014

Net Sales

        The following is a summary of each operating segment's sales:

 
  Six Months Ended    
   
 
 
  September 28,
2014
  September 29,
2013
  $ Change   % Change  

Shooting Sports

  $ 730,511   $ 661,364   $ 69,147     10.5 %

Outdoor Products

    360,633     123,162     237,471     192.8 %
                   

Total net sales

  $ 1,091,144   $ 784,526   $ 306,618     39.1 %
                   
                   

        The overall fluctuation in net sales was driven by the changes within the operating segments as described below.

        Shooting Sports.    The increase in Shooting Sports net sales was primarily driven by an increase of $15,100 as result of the Savage Arms acquisition during fiscal 2014 and increases of $47,800 in centerfire ammunition sales. The increase in centerfire ammunition sales was caused by increased

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volume as a result of greater supply from the Lake City plant and continued strong market demand for ammunition.

        Outdoor Products.    The increase in Outdoor Products net sales was driven by an increase of $262,200 as result of the acquisition of Bushnell during fiscal 2014, partially offset by a decrease in sales of reloading equipment.

Cost of Sales and Gross Profit

        The following is a summary of each operating segment's cost of sales and gross profit:

 
  Six Months Ended    
   
 
Cost of Sales
  September 28,
2014
  September 29,
2013
  $ Change   % Change  

Shooting Sports

  $ 557,361   $ 497,083   $ 60,278     12.1 %

Outdoor Products

    261,933     107,730     154,203     143.1 %

Corporate

    (196 )   3,049     (3,245 )           
                   

Total cost of sales

  $ 819,098   $ 607,862   $ 211,236     34.8 %
                   
                   

 

 
  Six Months Ended    
   
 
Gross Profit
  September 28,
2014
  September 29,
2013
  $ Change   % Change  

Shooting Sports

  $ 173,150   $ 164,281   $ 8,869     5.4 %

Outdoor Products

    98,700     15,432     83,268     539.6 %

Corporate

    196     (3,049 )   3,245             
                   

Total

  $ 272,046   $ 176,664   $ 95,382     54.0 %
                   
                   

        The overall fluctuation in cost of sales and gross profit was driven by the changes within the operating segments as described below.

        Shooting Sports.    The increase in Shooting Sports gross profit was driven by a $5,700 increase due to the Savage Arms acquisition in fiscal 2014, and increases of $2,200 in centerfire ammunition gross profit. Centerfire ammunition gross profit was driven by the increase in net sales resulting from increased volumes as described above, offset by promotions.

        Outdoor Products.    The increase in Outdoor Products gross profit was driven by a $74,000 increase attributable to the acquisition of Bushnell during fiscal 2014 and the absence of facility rationalization costs from the prior year period, which costs related to termination benefits offered to employees, asset impairment charges and costs associated with the closure of certain facilities.

        Corporate.    Corporate gross profit primarily reflects expenses incurred for pension and postretirement benefit expense, derivative instruments, and self insurance results. The increase in Corporate gross profit was due to an ineffectiveness charge for outstanding derivative instruments that was recorded only in the prior year period.

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Operating Expenses

 
  Six Months Ended    
 
 
  September 28,
2014
  As a %
of Sales
  September 29,
2013
  As a %
of Sales
  $ Change  

Research and development

  $ 4,725     0.4 % $ 4,432     0.6 % $ 293  

Selling

    75,424     6.9 %   44,093     5.6 %   31,331  

General and administrative

    57,870     5.3 %   42,582     5.4 %   15,288  
                       

Total

  $ 138,019     12.6 % $ 91,107     11.6 % $ 46,912  
                       
                       

        Operating expenses increased by $46,912 from the prior-year period. Research and development, selling expenses, and general and administrative costs increased from the prior-year period due to the acquisition of Bushnell and Savage Arms and allocated transaction costs associated with the Transaction.

Net Interest Expense

        Net interest expense for the six months ended September 28, 2014 was $16,924, an increase of $15,669 compared to $1,255 in the six months ended September 29, 2013. The increase was due to the allocation of debt and interest expense to Vista Outdoor from ATK due to the acquisition of Bushnell and Savage Arms.

Income Tax Provision

 
  Six Months Ended    
 
 
  September 28,
2014
  Effective
Rate
  September 29,
2013
  Effective
Rate
  $ Change  

Income tax provision

  $ 42,313     36.1 % $ 32,435     38.5 % $ 9,878  

        Vista Outdoor's provision for income taxes includes federal, foreign, and state income taxes. Income tax provisions for interim periods are based on estimated effective annual income tax rates.

        The decrease in the rate from the prior year six month period is primarily due to the true-up of prior year taxes and lower state taxes partially offset by lower domestic manufacturing deduction (DMD) and nondeductible acquisition-related costs in the prior year.

        The effective tax rate for the six months ended September 28, 2014 of 36.1% differs from the federal statutory rate of 35.0% due to state income taxes partially offset by DMD and the true-up of prior year taxes which decreased the rate.

        The effective tax rate for the six months ended September 29, 2013 of 38.5% differs from the federal statutory rate of 35.0% due to state income taxes, nondeductible acquisition-related costs, and unfavorable foreign earnings mix, partially offset by DMD which decreased the rate.

        ATK or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state, and foreign jurisdictions on behalf of Vista Outdoor. With few exceptions and recent acquisitions, ATK is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2008. The IRS has completed the audits of ATK's returns for fiscal years 2011 and 2012. We believe appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions.

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        Although the timing and outcome of audit settlements are uncertain, it is reasonably possible that a $1,254 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 $1,195. See Note 11 to the combined financial statements for further details.

        The IRS released final regulations relating to the capitalization of tangible personal property on September 13, 2013. Vista Outdoor is currently analyzing the impact of these new regulations. We do not believe they will have a material impact on our financial statements.

Fiscal Year 2014

Net Sales

        The following is a summary of each operating segment's sales:

 
  Years Ended
March 31,
   
   
 
 
  2014   2013   $ Change   % Change  

Shooting Sports

  $ 1,422,442   $ 867,227   $ 555,215     64.0 %

Outdoor Products

    453,231     328,857     124,374     37.8 %

Eliminations

    (1,754 )   (53 )   (1,701 )           
                   

Total net sales

  $ 1,873,919   $ 1,196,031   $ 677,888     56.7 %

        The overall fluctuation in net sales was driven by the changes within the operating segments as described below.

        Shooting Sports.    The increase in Shooting Sports net sales in fiscal year 2014 compared to fiscal year 2013 was driven primarily by increased ammunition sales, including increases of $300,800 in centerfire ammunition sales, $35,400 in rimfire ammunition sales, $23,900 in shotshell ammunition sales and $20,900 in primer product sales. Increased centerfire ammunition sales were due to increased volumes resulting from greater supply from the Lake City plant. All ammunition sales were driven by strong market demand for ammunition and a previously announced price increase. The increase in Shooting Sports net sales was also driven by an increase of $178,687 attributable to the Savage Arms acquisition.

        Outdoor Products.    The increase in Outdoor Products net sales in fiscal year 2014 compared to fiscal year 2013 was driven by an increase of $222,589 attributable to the acquisition of Bushnell during fiscal year 2014, partially offset by a reduction in military accessories due to the completion of certain programs associated with a decline in military deployments.

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Cost of Sales and Gross Profit

        The following is a summary of each operating segment's cost of sales and gross profit:

 
  Years Ended
March 31,
   
   
 
Cost of Sales
  2014   2013   $ Change   % Change  

Shooting Sports

  $ 1,039,471   $ 686,969   $ 352,502     51.3 %

Outdoor Products

    369,444     263,942     105,502     40.0 %

Corporate

    (2,299 )   2,682     (4,981 )   (185.7 )%
                   

Total cost of sales

  $ 1,406,616   $ 953,593   $ 453,023     47.5 %

 

 
  Years Ended
March 31,
   
   
 
Gross Profit
  2014   2013   $ Change   % Change  

Shooting Sports

  $ 382,971   $ 180,258   $ 202,713     112.5 %

Outdoor Products

    83,787     64,915     18,872     29.1 %

Corporate

    545     (2,735 )   3,280     (119.9 )%
                   

Total

  $ 467,303   $ 242,438   $ 224,865     92.8 %

        The overall fluctuation in cost of sales and gross profit was driven by the changes within the operating segments as described below.

        Shooting Sports.    The increase in Shooting Sports gross profit in fiscal year 2014 compared to fiscal year 2013 was driven primarily by increased ammunition sales due to increased volumes resulting from greater supply from the Lake City plant, a previously announced price increase across all product lines and favorable sales mix in centerfire ammunition. The increase in Shooting Sports gross profit was also driven by a $50,852 increase attributable to the acquisition of Savage Arms.

        Outdoor Products.    The increase in Outdoor Products gross profit in fiscal year 2014 compared to fiscal year 2013 was driven by a $59,357 increase attributable to the acquisition of Bushnell during fiscal year 2014, partially offset by a reduction in military accessories due to completion of certain programs associated with a decline in military deployments.

        Corporate.    Corporate gross profit primarily reflects expenses incurred for pension and postretirement benefit and self insurance results. The increase in Corporate gross profit in fiscal year 2014 compared to fiscal year 2013 was due to a reduction in pension expense of approximately $2,889.

Operating Expenses

 
  Years Ended March 31,    
 
 
  2014   As a %
of Sales
  2013   As a %
of Sales
  Change  

Research and development

  $ 13,984     0.7 % $ 8,720     0.7 % $ 5,264  

Selling

    111,682     6.0 %   72,140     6.0 %   39,542  

General and administrative

    107,830     5.8 %   60,123     5.0 %   47,707  
                       

Total

  $ 233,496     12.5 % $ 140,983     11.7 % $ 92,513  

        Operating expenses increased by $92,513 year-over-year. Research and development costs increased year-over-year due to the acquisition of Bushnell and Savage Arms. Selling expenses increased primarily due to increased commissions and other selling costs within the Bushnell and Savage Arms businesses.

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General and administrative costs increased due to transaction costs of $16,780 related to the Bushnell and Savage Arms acquisitions and the addition of general and administrative costs associated with the Bushnell and Savage Arms businesses.

Net Interest Expense

        Net interest expense for fiscal year 2014 was $15,469, an increase of $15,476 compared to $7 of interest income in fiscal year 2013. The increase was due to the allocation of debt and interest expense to Vista Outdoor from ATK due to debt incurred in connection with the acquisitions of Bushnell and Savage Arms in fiscal year 2014.

Income Tax Provision

 
  Years Ended March 31    
 
 
  2014   Effective
Rate
  2013   Effective
Rate
  Change  

Income tax provision

  $ 85,081     39.0 % $ 36,770     36.2 % $ 48,311  

        The increase in the effective tax rate in fiscal year 2014 compared to fiscal year 2013 is primarily due to unfavorable mix of foreign earnings and nondeductible acquisition costs.

        Vista Outdoor's provision for income taxes includes both federal and state income taxes. The effective tax rate for fiscal year 2014 of 39.0% differs from the federal statutory rate of 35.0% due to state income taxes, unfavorable foreign earnings mix and nondeductible acquisition costs, partially offset by the domestic manufacturing deduction (DMD) which decreased the rate.

        The effective tax rate for fiscal year 2013 of 36.2% differs from the federal statutory rate of 35.0% due to state income taxes, partially offset by DMD and favorable foreign earnings mix, which decreased the rate.

        As of March 31, 2014 and 2013, the total amount of unrecognized tax benefits was $25,693 and $5,925, respectively, of which $21,650 and $4,251, 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 $1,241 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 $1,188. See Note 11 to our audited combined financial statements for further details.

        Vista Outdoor believes it is more likely than not that the recorded deferred benefits will be realized through the reduction of future taxable income. Vista Outdoor's recorded valuation allowance of $10,208 at March 31, 2014 relates to certain capital loss, tax credits and net operating losses that are not expected to be realized before their expiration. The valuation allowance increased during fiscal year 2014 due to the acquisitions that occurred in fiscal year 2014, generation of certain net operating losses and capital losses partially offset by carryover expirations.

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Fiscal Year 2013

Net Sales

        The following is a summary of each operating segment's sales:

 
  Years Ended
March 31,
   
   
 
 
  2013   2012   $ Change   % Change  

Shooting Sports

  $ 867,227   $ 761,126   $ 106,101     13.9 %

Outdoor Products

    328,857     281,788     46,775     16.6 %

Eliminations

    (53 )   (294 )   241     (82.0 )%
                   

Total net sales

  $ 1,196,031   $ 1,042,914   $ 153,117     14.7 %

        The overall fluctuation in net sales was driven by the changes within the operating segments as described below.

        Shooting Sports.    The increase in Shooting Sports net sales in fiscal year 2013 compared to fiscal year 2012 was driven by increases of $81,400 in centerfire ammunition due to increased volume and a previously announced price increase. The increase in Shooting Sports net sales was also driven by increases of $18,200 in rimfire ammunition sales, $7,400 in shotshell ammunition sales and $10,300 in primer product sales, which grew due to increased volumes as result of strong market demand and a price increase.

        Outdoor Products.    The increase in Outdoor Products net sales in fiscal year 2013 compared to fiscal year 2012 was driven by increases of $28,900 in accessories and $11,100 in military accessories due to market demand.

Cost of Sales and Gross Profit

        The following is a summary of each operating segment's cost of sales and gross profit:

 
  Years Ended
March 31,
   
   
 
 
  2013   2012   $ Change   % Change  

Shooting Sports

  $ 686,969   $ 634,731   $ 52,238     8.2 %

Outdoor Products

    263,942     215,990     47,952     22.2 %

Corporate

    2,682     (215 )   2,897             
                   

Total cost of sales

  $ 953,593   $ 850,506   $ 103,087     12.1 %

 

 
  Years Ended
March 31,
   
   
 
 
  2013   2012   $ Change   % Change  

Shooting Sports

  $ 180,258   $ 126,395   $ 53,863     42.6 %

Outdoor Products

    64,915     66,092     (1,177 )   (1.8 )%

Corporate

    (2,735 )   (79 )   (2,656 )           
                   

Total

  $ 242,438   $ 192,408   $ 50,030     26.0 %

        The overall fluctuation in cost of sales and gross profit was driven by the changes within the operating segments as described below.

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        Shooting Sports.    The increase in Shooting Sports gross profit in fiscal year 2013 compared to fiscal year 2012 was driven by an increase in centerfire ammunition of $37,500 due to increased volume and a previously announced price increase, favorable sales mix and decreased commodity prices. In addition, rimfire, shotshell and primer product sales increased $15,900 due to increased volume and a previously announced price increase, as well as decreased commodity prices.

        Outdoor Products.    The increase in Outdoor Products gross profit in fiscal year 2013 compared to fiscal year 2012 was driven by increase in sales volume partially offset by $9,000 of charges for potentially obsolete inventory balances and facility rationalization costs associated with the military accessories programs.

        Corporate.    Corporate gross profit primarily reflects expenses incurred for pension and postretirement benefit and self insurance results. The change in fiscal year 2013 compared to fiscal year 2012 was driven by the change in pension expense.

Operating Expenses

 
  Years Ended March 31,    
 
 
  2013   As a %
of Sales
  2012   As a %
of Sales
  Change  

Research and development

  $ 8,720     0.7 % $ 7,497     0.7 % $ 1,223  

Selling

    72,140     6.0 %   63,920     6.1 %   8,220  

General and administrative

    60,123     5.0 %   42,896     4.1 %   17,227  
                       

Total

  $ 140,983     11.7 % $ 114,313     10.9 % $ 26,670  

        The increase in operating expenses in fiscal year 2013 compared to fiscal year 2012 was largely attributable to increases in selling expenses due to increased commissions on increased sales, and increases in general and administrative costs increased due to increased incentive awards due to increased sales and margins.

Income Tax Provision

 
  Years Ended March 31    
 
 
  2013   Effective
Rate
  2012   Effective
Rate
  Change  

Income tax provision

  $ 36,770     36.2 % $ 19,647     64.8 % $ 17,123  

        The decrease in the effective tax rate in fiscal year 2013 compared to fiscal year 2012 is primarily due to absence of the nondeductible goodwill impairment that occurred in the prior year.

        Vista Outdoor's provision for income taxes includes both federal and state income taxes. The effective tax rate for fiscal year 2013 of 36.2% differs from the federal statutory rate of 35.0% due to state income taxes, partially offset by domestic manufacturing deduction (DMD) and favorable foreign earnings mix, which decreased the rate.

        The effective tax rate for fiscal year 2012 of 64.8% differs from the federal statutory rate of 35.0% due to nondeductible goodwill impairment and state income taxes, partially offset by DMD and favorable earnings mix which decreased the rate.

        As of March 31, 2013 and 2012, the total amount of unrecognized tax benefits was $5,925 and $4,567, respectively, of which $4,251 and $3,326, 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

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that a $160 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 $108. See Note 11 to our audited combined financial statements for further details.

        Vista Outdoor believes it is more likely than not that the recorded deferred benefits will be realized through the reduction of future taxable income. Vista Outdoor's recorded valuation allowance of $452 at March 31, 2013 relates to certain state net operating loss carryforwards that are not expected to be realized before their expiration. The valuation allowance decreased during fiscal year 2013 due to a combination of the generation and revaluation of certain net operating losses.

Liquidity and Capital Resources

        Historically, Vista Outdoor has generated and expects to continue to generate positive cash flow from operations. In addition to Vista Outdoor's normal operating cash requirements, the Company's principal future cash requirements will be to fund capital expenditures, debt service, employee benefit obligations and strategic acquisitions. Vista Outdoor's short-term cash requirements for operations are expected to consist mainly of capital expenditures to maintain and expand production facilities and working capital requirements.

        Vista Outdoor's ability to fund its operations and make payments on its indebtedness, including debt incurred to finance the Vista Outdoor Dividend due to ATK as well as any future debt that Vista Outdoor may incur, will be funded from cash from operations and drawings under its Revolving Credit Facility. Vista Outdoor believes that its future cash from operations and availability under the Revolving Credit Facility will provide adequate resources to fund these needs. If Vista Outdoor's future cash flows from operations and other capital resources are insufficient, however, it may be forced to obtain additional debt or equity financing or sell assets.

        Due to the global nature of Vista Outdoor's operations, a significant portion of its cash is held outside the United States. As of September 28, 2014, $15.4 million of cash and cash equivalents were held by foreign subsidiaries, compared to Vista Outdoor's total amount of cash and cash equivalents of $34.1 million as of such date. All cash held by Vista Outdoor's foreign subsidiaries is readily convertible into other foreign currencies (including U.S. dollars). Accordingly we believe that our foreign holdings of cash will not have an adverse impact on our liquidity. Vista Outdoor does not currently expect to repatriate cash earnings from its foreign subsidiaries in order to fund U.S. operations. If these earnings were distributed, such amounts would be subject to U.S. federal income tax at the statutory rate less the available foreign tax credits, if any, and potentially subject to withholding taxes in the various jurisdictions.

Cash Flow Summary

Six Months ended September 28, 2014

        Vista Outdoor's cash flows from operating, investing and financing activities, as reflected in the Combined Statement of Cash Flows are summarized as follows:

 
  Six Months Ended  
 
  September 28, 2014   September 29, 2013  

Cash flows used for operating activities

  $ (36,638 ) $ (18,643 )

Cash flows used for investing activities

    (20,337 )   (325,899 )

Cash flows provided by financing activities

    51,749     355,125  
           

Net cash flows

  $ (5,226 ) $ 10,583  
           
           

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Operating Activities.

        Net cash used for operating activities during the six months ended September 28, 2014 increased $17,995 compared to the prior year period due to an increase in accounts receivable as a result of increased sales, partially offset by an increase in net income.

Investing Activities.

        Net cash used for investing activities decreased $305,562 during the six months ended September 28, 2014 compared to the six months ended September 29, 2013 primarily due to the acquisition of Savage Arms in the prior year period.

Financing Activities.

        Cash flows related to financing activities reflect changes in ATK's investment in Vista Outdoor and the allocation of debt to Vista Outdoor from ATK. Subsequent to the Spin-Off, Vista Outdoor will no longer participate in cash management and funding arrangements with ATK. Historically, Vista Outdoor has utilized these arrangements to fund significant expenditures, such as manufacturing capacity expansion and acquisitions.

        Net cash provided by financing activities decreased $303,376 in the six months ended September 28, 2014 compared to the six months ended September 29, 2013 as result of the prior year allocation of debt to finance the Savage Arms acquisition and the cash paid to ATK, which represents the net cash excess resulting from operating and investing activities as discussed above.

Fiscal Year 2014

        Vista Outdoor's cash flows from operating, investing and financing activities, as reflected in the Combined Statement of Cash Flows for the years ended March 31, 2014, 2013 and 2012 are summarized as follows:

 
  2014   2013   2012  

Cash flows provided by operating activities

  $ 172,310   $ 75,363   $ 78,730  

Cash flows used for investing activities

    (1,341,747 )   (23,395 )   (23,600 )

Cash flows provided by (used for) financing activities

    1,209,316     (52,417 )   (54,976 )
               

Net cash flows

  $ 39,879   $ (449 ) $ 154  

Operating Activities

        Net cash provided by operating activities increased $96,947 in fiscal year 2014 compared to fiscal year 2013. This increase was driven by an increase in net income and a decrease in the cash required to fund working capital primarily driven by changes in inventory due to increased shipments and reduced inventory levels through improved inventory management in Outdoor Products. The increase was partially offset by a decrease in accounts payable due to the timing of payments.

        Net cash provided by operating activities decreased $3,367 in fiscal year 2013 compared to fiscal year 2012. This increase was driven by an increase in net income and an increase in accounts payable due to timing of payments. The increase was partially offset by an increase in inventory due to inventory purchases required to support increased sales.

        Cash used for working capital is defined as net receivables plus net inventories, less accounts payable. Seasonal variations in our results of operations may reduce our cash on hand, increase our inventory levels and extend our accounts receivable collection periods. This in turn may cause us to

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increase our debt levels and interest expense to fund our working capital requirements. Sales of our hunting accessories are highest during the months of August though December due to shipments around the fall hunting season and holidays. In addition, sales of our ammunition have historically been lower in our first fiscal quarter.

Investing Activities

        Net cash used for investing activities increased by $1,318,352 in fiscal year 2014 compared to fiscal year 2013, primarily due to the acquisition of Savage Arms and Bushnell and an increase of cash used for capital expenditures of $16,839.

        Net cash used for investing activities remained essentially flat in fiscal year 2013 compared to fiscal year 2012.

Financing Activities

        Cash flows related to financing activities reflect changes in ATK's investment in Vista Outdoor and the allocation of debt to Vista Outdoor from ATK. Subsequent to the spin-off, Vista Outdoor will no longer participate in cash management and funding arrangements with ATK. Historically, Vista Outdoor has utilized these arrangements to fund significant expenditures, such as manufacturing capacity expansion and acquisitions.

        Net cash provided by financing activities was $1,209,316 in fiscal year 2014 compared to a use of cash of $52,417 in fiscal year 2013. This change of $1,261,733 was due to the allocated debt ATK issued to finance the acquisition of Bushnell, and the cash provided by ATK which represents the net cash deficit resulting from operating and investing activities as discussed above.

        Net cash used for financing activities decreased $2,559 in fiscal year 2013 compared to fiscal year 2012 as result of the cash paid to ATK, which represents the net cash excess resulting from operating and investing activities as discussed above.

Credit Facilities

        On December 19, 2014, Vista Outdoor and certain financial institutions executed the Credit Agreement pursuant to which the financial institutions party thereto agreed to provide debt financing to Vista Outdoor in an aggregate principal amount of $750 million, comprised of a $350 million Term Loan and a $400 million Revolving Credit Facility, in each case on the terms and conditions set forth therein. Both the Term Loan and Revolving Credit Facility mature five years from the date the Term Loan is drawn.

        In connection with the Spin-Off, Vista Outdoor expects to incur approximately $350 million of aggregate debt, consisting of the Term Loan. If the Spin-Off had occurred on April 1, 2013, Vista Outdoor estimates that for the six months ended September 28, 2014 and the year ended March 31, 2014, interest expense would have been approximately $3,372 and $6,744, respectively on a pro forma basis, exclusive of fees and discounts. Vista Outdoor expects to use $250 million of the net proceeds of the Term Loan to fund the Vista Outdoor Dividend due to ATK. Pursuant to the Transaction Agreement, the amount of the Vista Outdoor Dividend will be equal to the amount by which ATK's gross indebtedness for borrowed money as of the closing date exceeds $1,740,000, as described in more detail under "Certain Relationships and Related Party Transactions—Agreements with ATK—Transaction Agreement."

        The Term Loan will be subject to quarterly principal payments of $4.375 million with the remaining balance due upon the maturity date. Substantially all domestic tangible and intangible assets of Vista Outdoor and its domestic subsidiaries will be pledged as collateral under the Senior Credit Facilities. Borrowings under the Senior Credit Facilities will bear interest at a rate equal to either a

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base rate plus a margin or a Eurodollar rate plus a margin. The Eurodollar margin will be initially 1.75% and the base rate margin will initially be 0.75%. After the end of the first fiscal quarter following the closing date, the margin will be based on Vista Outdoor's consolidated leverage ratio. In addition, Vista Outdoor will pay an annual commitment fee on the unused portion of the Revolving Credit Facility based on its consolidated leverage ratio. Immediately following the closing date, the Revolving Credit Facility will be available for borrowing for working capital and for other general corporate purposes, including the issuance of letters of credit in the ordinary course of Vista Outdoor's business.

        The Revolving Credit Facility will not be available for borrowing prior to the Spin-Off, and other than undrawn letters of credit, Vista Outdoor does not expect to have any borrowings under the Revolving Credit Facility immediately following the Spin-Off. Vista Outdoor expects to use the Revolving Credit Facility to meet any ongoing cash needs in excess of internally generated or available cash flows and to issue letters of credit in the ordinary course of our business. Borrowings under the Revolving Credit Facility will be subject to customary borrowing conditions.

        The Credit Agreement contains financial covenants that require us to maintain a consolidated interest coverage ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 and to maintain a consolidated leverage ratio (as defined in the Credit Agreement) of 3.50 to 1.00 or less. We expect that we will be in compliance with all such financial covenants. However, our business, financial position and results of operations are subject to various risks and uncertainties, and we cannot assure you that we will be able to comply with all such financial covenants in the future. For example, during periods in which we experience declines in sales or otherwise experience the adverse impact of seasonality, we may not be able to comply with such financial covenants. Any failure to comply with the restrictions in the Credit Agreement may prevent us from drawing under the Revolving Credit Facility and may result in an event of default under the Credit Agreement, which default may allow the lenders to accelerate the related indebtedness and may result in an acceleration of the repayment of any other indebtedness to which a cross-default or cross-acceleration provision applies. In addition, an event of default under the Credit Agreement also permits the lenders under the Revolving Credit Facility to terminate all other commitments to extend additional credit under the Revolving Credit Facility. Furthermore, if we are unable to repay the amounts due and payable under the Senior Credit Facilities, the lenders under the Senior Credit Facilities could proceed against the collateral that secures the indebtedness.

Off-Balance Sheet Arrangements

        ATK provides a defined benefit pension plan for its eligible U.S. employees and retirees. In Vista Outdoor's financial statements, these plans are accounted for as multiemployer benefit plans and the portion of Vista Outdoor's liability associated with this U.S. plan is not reflected on Vista Outdoor's combined balance sheets. Other than these benefit obligations, there are no off-balance sheet arrangements. On the distribution date, Vista Outdoor will assume the benefit obligation attributed to Vista Outdoor's employees for this plan, and it will be reflected in Vista Outdoor's combined balance sheet as of the distribution date. See "Unaudited Pro Forma Condensed Combined Financial Statements" and the notes thereto for additional information.

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Contractual Obligations and Commercial Commitments

        The following table summarizes Vista Outdoor's contractual obligations and commercial commitments as of March 31, 2014 and does not give effect to the indebtedness we will incur in connection with the Spin-Off:

 
   
  Payments due by period  
 
  Total   Less than
1 year
  1—3 years   3—5 years   More than
5 years
 

Contractual obligations:

                               

Long-term debt

  $ 1,014,911   $ 25,448   $ 50,896   $ 401,692   $ 536,875  

Interest on debt(1)

    112,700     31,335     30,780     29,671     20,914  

Operating leases

    42,937     10,510     20,873     11,554      

Purchase Obligations

    57,090     54,090     3,000              

Environmental remediation costs, net

    567     37     70     70     390  

Pension and other PRB plan contributions

    37,124     6,242     16,956     8,148     5,778  
                       

Total contractual obligations

  $ 1,265,329   $ 127,662   $ 122,575   $ 451,135   $ 563,957  

 

 
   
  Commitment Expiration by period  
 
  Total   Within 1 year   1—3 years   3—5 years  

Other commercial commitments:

                         

Letters of credit

  $ 11,130   $ 6,020   $ 5,110   $  

(1)
Includes interest on variable rate debt calculated based on interest rates at March 31, 2014. Variable rate debt was 100% of ATK's total debt at March 31, 2014.

        As of September 28, 2014, there have been no material changes with respect to the contractual obligations and commercial commitments compared to those as of March 31, 2014.

        We expect to incur additional indebtedness in connection with the Spin-Off, namely our $350 million Term Loan, a portion of which will be used to pay the Vista Outdoor Dividend to ATK. Accordingly, our long-term indebtedness and interest payment obligations as described in the table above will be impacted. For information regarding the pro forma effect of this new indebtedness on our capital structure, see "Capitalization" and "Unaudited Pro Forma Condensed Combined Financial Statements" and the notes related thereto.

        The total liability for uncertain tax positions at March 31, 2014 was approximately $23,237 (see Note 11 to our audited combined financial statements), $0 of which could be paid within 12 months and therefore none of which is classified within current taxes payable. We are not able to provide a reasonably reliable estimate of the timing of future payments relating to the non-current uncertain tax position obligations.

        Pension plan contributions are an estimate of Vista Outdoor's minimum funding requirements through fiscal year 2024 to provide pension benefits for employees based on expected actuarial estimated service accruals through fiscal year 2024 pursuant to the Employee Retirement Income Security Act, although Vista Outdoor may make additional discretionary contributions. These estimates may change significantly depending on the actual rate of return on plan assets, discount rates, discretionary pension contributions and regulations.

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Contingencies

        Litigation.    From time to time, Vista Outdoor is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of Vista Outdoor's business. Vista Outdoor does not consider any of such proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material adverse effect on its future operating results, financial condition or cash flows.

        Environmental Liabilities.    Vista Outdoor's operations and ownership or use of real property are subject to a variety of laws and regulations relating to the protection of the environment, including those governing the discharge of hazardous materials, remediation of contaminated sites and restoration of damage to the environment. Vista Outdoor is obligated to conduct investigation and/or remediation activities at certain sites that it owns or operates or formerly owned or operated.

        Vista Outdoor also has been identified as a potentially responsible party ("PRP"), along with other parties, in several regulatory agency actions associated with hazardous waste sites. As a PRP, we may be required to pay a share of the costs of the investigation and clean-up of these sites. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we do not currently expect that these matters, individually or in the aggregate, will have a material adverse effect on our operating results, financial condition or cash flows.

        While environmental laws and regulations have not had a material adverse effect on Vista Outdoor's operating results, financial condition or cash flows in the past, and Vista Outdoor has environmental management programs in place to mitigate these risks, Vista Outdoor could incur material 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 in the future.

Dependence on Key Customers; Concentration of Credit

        The loss of any key customer and Vista Outdoor's inability to replace revenues provided by a key customer may have a material adverse effect on Vista Outdoor's business and financial condition. For the six months ended September 28, 2014 and September 29, 2013, no single customer accounted for more than 10% of total revenues. For the years ended March 31, 2014, 2013 and 2012, one customer, Walmart, accounted for approximately 12%, 14% and 13%, respectively, of total revenues. No other customers accounted for more than 10% of total revenues during these periods. If a key customer fails to meet payment obligations, Vista Outdoor's operating results and financial condition could be adversely affected.

New Accounting Pronouncements

        See Note 1 to our audited combined financial statements and Note 1 to our unaudited condensed combined financial statements for a discussion of recently issued accounting pronouncements that may affect our financial results and disclosures in future periods.

Quantitative and Qualitative Disclosures about Market Risk

        Vista Outdoor is exposed to market risk from changes in interest rates. To mitigate the risks from interest rate exposure, Vista Outdoor occasionally may enter into hedging transactions, mainly interest rate swaps, through derivative financial instruments that have been authorized pursuant to corporate policies. Vista Outdoor uses derivatives to hedge certain interest rate, foreign currency exchange rate and commodity price risks, but does not use derivative financial instruments for trading or other speculative purposes, and Vista Outdoor is not a party to leveraged financial instruments. Additional information regarding the financial instruments is contained in Notes 1 and 3 to the combined financial

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statements. Vista Outdoor's objective in managing exposure to changes in interest rates is to limit the impact of such changes on earnings and cash flow and to lower the overall borrowing costs.

        Vista Outdoor measures market risk related to holdings of financial instruments based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential loss in fair values, cash flows and earnings based on a hypothetical change (increase and decrease) in interest rates. Vista Outdoor used current market rates on the debt portfolio to perform the sensitivity analysis. Certain items such as lease contracts, insurance contracts and obligations for pension and other postretirement benefits were not included in the analysis.

        Vista Outdoor conducts business through its subsidiaries in many different countries, and fluctuations in currency exchange rates could have a significant impact on the reported results of operations, which are presented in U.S. dollars. Cross-border transactions, both with external parties and intercompany relationships, result in increased exposure to foreign exchange effects. Accordingly, significant changes in currency exchange rates, particularly the Euro, the British Pound, the Chinese Renminbi (Yuan), the Canadian Dollar and/or the Australian dollar, could cause fluctuations in the reported results of Vista Outdoor's businesses' operations that could negatively affect Vista Outdoor's results of operations.

        In addition, sales and expenses of Vista Outdoor's non-U.S. businesses are also translated into U.S. dollars for reporting purposes and the strengthening or weakening of the U.S. dollar could result in unfavorable translation effects.

Inflation

        In management's opinion, inflation has not had a significant impact upon the results of Vista Outdoor's operations.

Critical Accounting Policies

        Vista Outdoor's discussion and analysis of its financial condition and results of operations are based upon Vista Outdoor's combined financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. In preparing our combined 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. Vista Outdoor reevaluates its estimates on an ongoing basis. Vista Outdoor's estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

        Vista Outdoor believes the following are its critical accounting policies that affect its more significant judgments and estimates used in the preparation of its combined financial statements.

Revenue Recognition

        Sales, net of estimates for discounts, returns, rebates, allowances and excise taxes are recognized when persuasive evidence of an arrangement exists, the price is fixed and determinable all risks of ownership have been transferred and payment is reasonably assured.

Allowance for Doubtful Accounts

        Vista Outdoor maintains an allowance for doubtful receivables for estimated losses resulting from the inability of its trade customers to make required payments. Vista Outdoor provides an allowance for specific customer accounts where collection is doubtful and also provides an allowance for customer deductions based on historical collection and write-off experience. Additional allowances would be required if the financial conditions of Vista Outdoor's customers deteriorated.

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Inventories

        Vista Outdoor's inventories are valued at the lower of cost or market. Vista Outdoor evaluates the quantities of inventory held against past and future demand and market conditions to determine excess or slow moving inventory. For those product classes of inventory identified, Vista Outdoor estimates their market value based on current and projected selling prices. If the projected market value is less than cost, Vista Outdoor provides an allowance to reflect the lower value of that 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 can decrease due to consumer preferences, legislation, or loss of key contracts among other events.

Employee Benefit Plans

        ATK provides a defined benefit pension plan for its eligible U.S. employees and retirees. In Vista Outdoor's financial statements, these plans are accounted for as multiemployer benefit plans and the portion of Vista Outdoor's liability associated with this U.S. plan is not reflected on Vista Outdoor's consolidated balance sheets. On the distribution date, Vista Outdoor will assume the benefit obligation attributed to Vista Outdoor's employees for this plan, and it will be reflected in Vista Outdoor's combined balance sheet as of the distribution date. See "Unaudited Pro Forma Condensed Combined Financial Statements" and the notes thereto for additional information. Vista Outdoor's combined statements of comprehensive income include expense allocations for these benefits. These expenses were funded through intercompany transactions with ATK which are reflected within Parent's Equity.

Income Taxes

        ATK or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state and foreign jurisdictions on behalf of Vista Outdoor. With few exceptions and recent acquisitions, ATK is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2007. The IRS has completed the audits of ATK's tax returns for fiscal years 2011 and 2012. We believe appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions.

        Vista Outdoor's domestic operations have historically been included in ATK's U.S. federal and state income tax returns and all income taxes have been paid by ATK. Vista Outdoor's foreign operations have been included in its own tax filings and have been paid by Vista Outdoor. Income tax expense and other income tax related information contained in our combined financial statements are presented on a separate tax return basis as if Vista Outdoor filed its own tax returns. 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. Vista Outdoor periodically assesses its 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 Vista Outdoor's tax position will be sustained, Vista Outdoor records the entire resulting tax liability and when it is more likely than not of being sustained, Vista Outdoor records its best estimate of the resulting tax liability. Any applicable interest and penalties related to these positions are also recorded in our combined financial statements. To the extent Vista Outdoor's 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. It is Vista Outdoor's policy to record any interest and penalties related to income taxes as part of the income tax expense for financial reporting purposes. Deferred tax assets related to carryforwards are reduced by a valuation allowance when it is not more likely than not that the amount will be realized before expiration of the carryforward period. As part of this analysis Vista Outdoor takes into account the

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amount and character to determine if the carryforwards will be realized. Significant estimates are required for this analysis. Changes in the amounts of valuation allowance are recorded in the tax provision in the period when the change occurs.

        The IRS released final regulations relating to the capitalization of tangible personal property on September 13, 2013. Vista Outdoor is currently analyzing the impact of these new regulations. We do not believe they will have a material impact on our financial statements.

Acquisitions

        The results of acquired businesses are included in Vista Outdoor's combined financial statements from the date of acquisition. Vista Outdoor allocates the purchase price of an acquired business to the underlying tangible and intangible acquired assets and liabilities assumed based on their fair value. Estimates are used in determining the fair value and estimated remaining lives of intangible assets until the final purchase price allocation is completed. Actual fair values and remaining lives of intangible assets may vary from those estimates. The excess purchase price over the estimated fair value of the net assets acquired is recorded as goodwill.

        On June 21, 2013, ATK acquired Caliber Company, parent company of Savage Arms, a leading manufacturer of sporting long guns. Operating under the brand names of Savage Arms, Stevens and Savage Range Systems, the company designs, manufactures and markets centerfire and rimfire rifles, shotguns and shooting range systems used for hunting, as well as competitive and recreational target shooting. Savage Arms is included in the Vista Outdoor combined financial results from the acquisition date. The purchase price was $315,000 net of cash acquired. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. These adjustments will primarily relate to certain contingent liabilities and income tax-related items. None of the goodwill generated in this acquisition will be deductible for tax purposes.

        Vista Outdoor used the acquisition method of accounting to account for this acquisition and, accordingly, the results of Savage Arms are included in Vista Outdoor's combined financial statements at the date of acquisition. The purchase price for the acquisition has been allocated to the acquired assets and liabilities based on estimated fair value. Pro forma financial statement information has been included within Note 4 to our audited combined financial statements and Note 4 to our unaudited condensed combined financial statements.

        On November 1, 2013, ATK acquired Bushnell. Bushnell is included in the Vista Outdoor combined financial results from the acquisition date. Bushnell is a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and eyewear. The purchase price was $985,000 net of cash acquired, subject to purchase price adjustments. The purchase price has been preliminarily allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the acquisition. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. These adjustments will primarily relate to working capital adjustments, certain contingent liabilities and income tax-related items. We expect the purchase price allocation to be completed within 12 months of the acquisition date. A portion of the goodwill generated in this acquisition will be deductible for tax purposes.

Accounting for Goodwill

        Vista Outdoor tests goodwill for impairment on the first day of its fourth fiscal quarter or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired. Vista Outdoor has determined that the reporting units on a standalone basis for its goodwill impairment review are its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available, and for which segment management

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regularly reviews the operating results. Vista Outdoor then evaluates these components to determine if they are similar and should be aggregated into one reporting unit for testing purposes. Based on this analysis, Vista Outdoor has identified four reporting units as of the fiscal year 2014 testing date, which resulted in the identification of one additional reporting unit at Vista Outdoor compared to the Sporting Group of ATK.

        The goodwill impairment test is performed using a two-step process. In the first step, Vista Outdoor determines the estimated fair value of each reporting unit and compares it to the carrying value of the reporting unit, including goodwill. If the carrying amount of a reporting unit is higher than its estimated fair value, an indication of impairment exists and the second step must be performed in order to determine the amount of the impairment. In the second step, Vista Outdoor must determine the implied fair value of the reporting unit's goodwill, which is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The implied fair value is compared to the carrying amount and if the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss must be recognized for the excess.

        The fair value of each reporting unit is determined using both an income and market approach. The value estimated using a discounted cash flow model is weighted against the estimated value derived from two separate market approaches: the guideline company and transaction methods. These market approach methods estimate the price reasonably expected to be realized from the sale of the company based on comparable companies and recent tran