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Fourth Quarter Highlights
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Diluted EPS Rises to $0.39
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28th Consecutive Quarterly Increase of Same Store Sales
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Full Year Highlights
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Revenues Grow 7% to $667.5 Million
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Diluted EPS Increases to $0.57, or to $1.09 on a Pro Forma Basis
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Same Store Sales Up 4.0%
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Conference Call Scheduled Today at 2:00 p.m. (Pacific); Simultaneous Webcast at www.firstcallevents.com/service/ajwz374181501gf12.html
EL SEGUNDO, Calif., Feb. 12 /PRNewswire-FirstCall/ -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV), the leading sporting goods retailer in the western United States, today reported financial results for the fiscal 2002 fourth quarter and full year ended December 29, 2002.
(Photo: http://www.newscom.com/cgi-bin/prnh/20020715/BIG5LOGO )
For the 2002 fourth quarter, net sales increased by $6.9 million, or 4.1%, to $176.7 million from $169.8 million in the fourth quarter of 2001. Same store sales increased 0.4% versus the fourth quarter last year, representing the twenty-eighth consecutive quarterly increase in same store sales over comparable prior periods. Gross profit margin increased 0.5% during the fourth quarter to 36.1% from gross profit margin of 35.6% for the same period last year. Selling and administration expenses were 24.0% of net sales, compared with selling and administration expenses of 23.8% for the same period last year.
Net income available to common stockholders for the 2002 fourth quarter calculated in accordance with generally accepted accounting principles (GAAP) increased to $8.8 million, or $0.39 per diluted share, compared to GAAP net income available to common stockholders of $4.2 million, or $0.26 per diluted share and pro forma net income of $6.7 million or $0.29 per diluted share, for the same period last year. Financial results for 2001 include $2.5 million of after tax non-recurring expenses and others items including preferred stock dividends related to the company's initial public offering (IPO) for which the company makes pro forma adjustments.
Big 5 reports net income and earnings per diluted share in accordance with GAAP and additionally on a pro forma basis to exclude certain effects of the company's IPO, including the exercise of the underwriters' over-allotment option. The company raised a total of $86.4 million of net proceeds from the IPO, which occurred in June 2002, during the company's second fiscal quarter, and the exercise of the underwriters' over-allotment option, which occurred in July 2002, during the company's third fiscal quarter. During the company's third fiscal quarter, the company utilized IPO proceeds and borrowings under its credit facility to redeem all of Big 5's outstanding senior discount notes and preferred stock and to repurchase approximately 500,000 shares of common stock from non-executive employees. The pro forma figures assume that the IPO took place at the beginning of the periods presented and exclude the effects of certain one-time IPO-related and over-allotment expenses, use of funds generated from the reduction of the redemption premium otherwise applicable to the redemption of preferred stock to pay bonuses in connection with the IPO, interest payments and premiums payable on debt redeemed in connection with the IPO, dividends and premiums payable on preferred stock redeemed in connection with the IPO and related income tax effects. Big 5 uses this pro forma reporting internally to evaluate its operating performance without regard to certain non-recurring financial effects of the IPO and believes this presentation will provide investors with additional insight into its operating results. A reconciliation of the pro forma adjustments to GAAP appears in the financial statements portion of this release.
For fiscal year 2002, net sales increased by $45.0 million, or 7.2%, to $667.5 million from $622.5 million for fiscal year 2001. Same store sales increased 4.0% over the prior fiscal year. Gross profit margin increased 1.1% to 35.6% from 34.5% for fiscal year 2001. Selling and administration expenses were 26.2% of net sales, compared with 25.7% for the last fiscal year. Pro forma selling and administration expenses, which excludes certain effects related to the IPO and over-allotment option, were 25.7% of net sales, compared with 25.7% for fiscal 2001.
Net income available to common stockholders for fiscal 2002 calculated in accordance with GAAP increased to $11.1 million, or $0.57 per diluted share, and includes $13.5 million of after tax non-recurring expenses and other items including preferred stock dividends related to the IPO for which the company makes pro forma adjustments. This compares to GAAP net income available to common stockholders for fiscal 2001 of $7.7 million, or $0.48 per diluted share, which includes $7.7 million of similar pro forma adjustments.
Pro forma net income available to common stockholders for fiscal 2002 grew to $24.6 million, or $1.09 per diluted share, from pro forma net income available to common stockholders of $15.4 million, or $0.68 per diluted share, in fiscal 2001.
"We are pleased that we were able to achieve our twenty-eighth consecutive quarter of increased same store sales and meaningfully improve net income despite the challenging retail environment and unseasonably warm weather conditions in our operating regions during the fourth quarter of 2002," said Steven G. Miller, Big 5's chairman, president and chief executive officer. "Our full year earnings per share results are comfortably within the range that we provided as guidance when marketing our IPO in June of last year. More importantly, our proven formula continues to work very well and we feel confident that this formula will lead to another strong performance in 2003."
EPS Guidance
Big 5 expects to realize same store sales results in the low single-digit negative to slightly positive range during the first quarter of fiscal 2003 and in the low positive single-digit range during the last three quarters of fiscal 2003. This guidance reflects the impact of record warm weather on winter related merchandise categories throughout the company's operating regions during the first quarter to date period, combined with the assumption of normalized weather patterns for the remainder of the quarter and year. The company currently expects earnings per diluted share to be in the range of $0.15 to $0.18 for the first quarter of fiscal 2003 and $1.18 to $1.23 for the fiscal year ending December 28, 2003. These estimates exclude approximately $0.03 per diluted share related to the charge associated with the partial redemption of the company's senior notes. The company previously announced the partial redemption on December 31, 2002 and will record the charge in the 2003 first quarter.
Conference Call Information
Big 5 will host a conference call and audio webcast today at 2:00 p.m. (Pacific) to discuss financial results for the quarter and fiscal year ended December 29, 2002. The webcast will be available at www.firstcallevents.com/service/ajwz368710382gf12.html and archived until February 28, 2002.
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, weather conditions, 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. 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.
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
13 Weeks Ended 13 Weeks Ended (1)
December 29, December 30, December 29, December 30,
2002 2001 2002 2001
Net sales $176,720 $169,760 $176,720 $169,760
Cost of goods sold,
buying and occupancy 112,856 109,357 112,856 109,357
Gross profit 63,864 60,403 63,864 60,403
Selling and
administrative 42,498 40,368 42,498 40,283
Litigation Settlement -- 2,515 -- 2,515
Depreciation and
amortization 2,809 2,524 2,809 2,524
Operating income 18,557 14,996 18,557 15,081
Interest expense, net 3,527 4,736 3,527 3,914
Income before
income taxes 15,030 10,260 15,030 11,167
Income tax 6,203 4,139 6,203 4,511
Net income 8,827 6,121 8,827 6,656
Redeemable preferred
stock dividends
and redemption premium -- 1,940 -- --
Net income available
to common
stockholders $ 8,827 $ 4,181 $ 8,827 $ 6,656
Earnings per share:
Basic $ 0.40 $ 0.27 $ 0.40 $ 0.30
Diluted $ 0.39 $ 0.26 $ 0.39 $ 0.29
Shares used to
calculate earnings
per share:
Basic 22,178 15,604 22,178 22,183
Diluted 22,664 16,090 22,664 22,669
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
52 Weeks Ended 52 Weeks Ended (1)
December 29, December 30, December 29, December 30,
2002 2001 2002 2001
Net sales $667,469 $622,481 $667,469 $622,481
Cost of goods sold,
buying and
occupancy 429,858 407,679 429,858 407,679
Gross profit 237,611 214,802 237,611 214,802
Selling and
administrative 174,868 160,044 171,862 159,700
Litigation settlement -- 2,515 -- 2,515
Depreciation and
amortization 9,966 10,031 9,966 10,031
Operating income 52,777 42,212 55,783 42,556
Interest expense, net 15,825 19,629 14,050 16,565
Income before income
taxes and
extraordinary gain
(loss) 36,952 22,583 41,733 25,991
Income tax 15,175 9,218 17,135 10,589
Income before
extraordinary
gain (loss) 21,777 13,365 24,598 15,402
Extraordinary gain
(loss) from early
extinguishments
debt, net of
income tax (2,695) 1,600 -- --
Net income 19,082 14,965 24,598 15,402
Redeemable preferred
stock dividends
and redemption
premium 7,999 7,284 -- --
Net income available
to common
stockholders $11,083 $7,681 $24,598 $15,402
Earnings per share:
Basic $ 0.58 $ 0.49 $ 1.11 $ 0.69
Diluted $ 0.57 $ 0.48 $ 1.09 $ 0.68
Shares used to
calculate earnings
per share:
Basic 18,990 15,604 22,178 22,183
Diluted 19,476 16,090 22,664 22,669
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(1) The above pro forma statements are based upon the company's unaudited
consolidated financial statements, with certain adjustments.
This presentation is not in accordance with, or an alternative for,
generally accepted accounting principles (GAAP) and may not be
consistent with the presentation used by other companies. However,
Big 5 believes this presentation will provide investors with
additional insight into its operating results. The following table
reconciles the pro forma data to that reported in the financial
statements by making certain adjustments as if the initial public
offering, including the exercise of the underwriters' over-allotment
option, were completed at the beginning of the periods presented.
(in thousands except earnings per share data)
13 Weeks Ended 52 Weeks Ended
December 29, December 30, December 29,December 30,
2002 2001 2002 2001
Reported net
income available
to common
stockholders $8,827 $4,181 $11,083 $7,681
Redeemable preferred
stock dividends (a) -- 1,940 7,999 7,284
Reported net income 8,827 6,121 19,082 14,965
Bonus expense (b) -- -- 1,962 --
Management fees (c) -- 85 1,044 344
Interest expense (d) -- 822 1,775 3,064
Extraordinary (gain)
loss (e) -- -- 2,695 (1,600)
Income taxes (f) -- (372) (1,960) (1,371)
Pro forma net income
available to common
stockholders $8,827 $6,656 $24,598 $15,402
Pro forma earnings
per share - diluted $0.39 $0.29 $1.09 $0.68
Pro forma weighted
average shares
outstanding - diluted 22,664 22,669 22,664 22,669
Reported operating
income $18,557 $14,996 $52,777 $42,212
Bonus expense (b) -- -- 1,962 --
Management fees (c) -- 85 1,044 344
Pro forma operating
income $18,557 $15,081 $55,783 $42,556
(a) To eliminate dividends and redemption premium on preferred stock
redeemed in connection with the initial public offering.
(b) To eliminate the payment of bonuses that was funded through a
reduction of the redemption price that would otherwise have
been applicable to redemption of the company's outstanding preferred
stock.
(c) To eliminate management services agreement fees and the management
services agreement termination cost incurred in connection with the
initial public offering.
(d) To eliminate interest expense and amortization of debt issue costs
associated with the senior discount notes redeemed in connection
with the initial public offering and to reflect interest expense on
incremental borrowings under the credit facility.
(e) To eliminate the extraordinary (gain) loss, net of taxes, associated
with the redemption of the senior discount notes.
(f) To reflect tax expense (benefit) for items (b) through (d) noted
above at the effective tax rate
BIG 5 SPORTING GOODS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
December 29, December 30,
2002 2001
Assets
Current Assets
Cash $9,441 $7,865
Merchandise inventory 169,529 163,680
Other current assets 11,442 9,698
Total current assets 190,412 181,243
Property and equipment, net 45,104 42,650
Other long-term assets 22,459 29,990(1)
Total assets $257,975 $253,883
Liabilities and Stockholders' Equity (Deficit)
Current liabilities $117,645 $114,951
Deferred rent 11,525 11,096(1)
Long-term debt 125,131 153,351
Total liabilities 254,301 279,398
Preferred stock -- 58,911
Net stockholders' equity(deficit) 3,674 (84,426)(1)
Total liabilities, preferred stock
and stockholders' equity (deficit) $257,975 $253,883
(1) The 2001 amounts for stockholders' equity (deficit), deferred rent and
deferred tax assets have been restated to reflect the corrected
balance of deferred rent and its related impact. This restatement has
no material impact on reported results of operations or cash flows for
the periods presented.
SOURCE Big 5 Sporting Goods Corporation
-0- 02/12/2003
/CONTACT: Charles Kirk, Sr. Vice President and Chief Financial Officer of Big 5 Sporting Goods Corporation, +1-310-536-0611; or Robert Jaffe of PondelWilkinson MS&L, +1-323-866-6060, for Big 5 Sporting Goods Corporation/
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