Big 5 estimates that the redemption will result in annualized interest expense savings of approximately $900,000, on an after tax basis, based on current interest rates. The notes will be redeemed at 105.475% of their face value, and accordingly the company will recognize an extraordinary after tax charge of approximately $600,000 in its 2003 first fiscal quarter.
"As a result of this transaction, we will significantly lower our annual interest expense, which will positively add to earnings and enhance shareholder value," said Steven G. Miller, chief executive officer.
Big 5 also announced that Moody's Investors Service upgraded the debt ratings of its wholly-owned subsidiary, Big 5 Corp. In its report raising the ratings of Big 5 Corp.'s revolving credit facility to Ba2 from Ba3 and 10.875% senior notes due 2007 to Ba3 from B1, Moody's noted the company's "continued improvements to operating metrics."
About Big 5 Sporting Goods Corporation
Big 5 is the leading sporting goods retailer in the western United States, operating 275 stores in 10 states under the "Big 5 Sporting Goods" name. Big 5 provides a full-line product offering of over 25,000 stock keeping units in a traditional sporting goods store format that averages 11,000 square feet. Big 5's product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding and in-line skating.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Big 5's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties include, among other things, the competitive environment in the sporting goods industry in general and in Big 5's specific market areas, inflation, product availability and growth opportunities, seasonal fluctuations, changes in costs of goods and economic conditions in general. Those and other risks are more fully described in Big 5's filings with the Securities and Exchange Commission, including the registration statement on Form S-1 originally filed on August 21, 2001 and in its Quarterly Report on Form 10-Q for the quarter ending September 29, 2002. Big 5 disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.