* Fourth Quarter 2003 Diluted EPS Increases to $0.43, or $0.49 Before
Debt Redemption Charges, Versus $0.39 in Fourth Quarter 2002
* Full Year 2003 Diluted EPS Increases to $1.16, or $1.25 Before Debt
Redemption Charges, Versus Pro Forma $1.09 in 2002
* Conference Call Scheduled for Today at 2:00 p.m. (Pacific);
Simultaneous Webcast at www.big5sportinggoods.com
EL SEGUNDO, Calif., Feb. 11 /PRNewswire-FirstCall/ -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV) today reported financial results for the fiscal 2003 fourth quarter and full year that ended on December 28, 2003.
For the 2003 fourth quarter, net sales increased by $15.1 million, or 8.5%, to $191.8 million from $176.7 million in the fourth quarter of 2002. Same store sales increased 3.6% versus the fourth quarter last year, representing the company's thirty-second consecutive quarterly increase in same store sales over comparable prior periods. Net income available to common stockholders for the 2003 fourth quarter, calculated in accordance with generally accepted accounting principles ("GAAP"), increased to $9.9 million, or $0.43 per diluted share, compared with net income available to common stockholders of $8.8 million, or $0.39 per diluted share, in the same period last year. Net income available to stockholders for the 2003 fourth quarter includes a charge of $1.2 million, net of taxes, associated with the redemption of $35.0 million principal amount of the company's 10.875% senior notes. Excluding this charge, net income available to stockholders for the 2003 fourth quarter was $11.1 million, or $0.49 per diluted share.
For fiscal 2003, net sales increased by $42.2 million, or 6.3%, to $709.7 million from $667.5 million for fiscal year 2002. Same store sales for fiscal 2003 increased 2.2% versus fiscal 2002. Net income available to common stockholders for fiscal 2003, reported in accordance with GAAP, increased to $26.3 million, or $1.16 per diluted share, compared with GAAP net income available to common stockholders of $11.1 million, or $0.57 per diluted share in the same period last year. Net income available to stockholders for fiscal 2003 includes a charge of $2.1 million, net of taxes, associated with the redemption of $55.0 million principal amount of the company's 10.875% senior notes. Excluding this charge, net income available to stockholders for fiscal 2003 was $28.3 million, or $1.25 per diluted share. This compares with pro forma net income available to common stockholders for fiscal 2002 of $24.6 million, or $1.09 per diluted share, which excludes certain effects related to the company's initial public offering.
Steven G. Miller, Big 5's Chairman, President and Chief Executive Officer, said, "We are pleased to report another outstanding quarter and full year for Big 5 Sporting Goods. The fourth quarter was our strongest comp store quarterly performance of the year and represented our 32nd consecutive quarterly increase in same store sales. Our comp store performance was solid in each of our five geographic regions and for each of our three major merchandise categories -- footwear, apparel and hard goods. Our positive sales results, combined with higher profit margins, sound expense controls and lower interests costs enabled us to deliver excellent bottom-line results for the fourth quarter and full year of fiscal 2003. We believe we are well positioned to continue this strong performance in 2004."
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 senior note redemption (as described above) and to exclude certain effects of the company's fiscal 2002 IPO. The company raised a total of $84.0 million of net proceeds from the IPO, which were used along with borrowings under its credit facility to redeem all of Big 5's then 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 for fiscal 2002 assume that the IPO took place at the beginning of 2002 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 certain financial effects of the 2003 partial senior note redemptions and believes this presentation will provide investors with additional insight into its operating results. A reconciliation of the senior note redemptions and IPO-related pro forma adjustments to GAAP appears in the financial statements portion of this release.
Store Openings
During the fiscal 2003 fourth quarter, Big 5 opened 11 new stores, including three in Arizona, two each in California, Idaho, and Colorado, and one each in Nevada and Washington. These openings brought the company's year-end store count to 293 versus 275 at the end of fiscal 2002. The company anticipates opening between 15 and 20 stores in fiscal 2004.
EPS Guidance
Big 5 expects to realize same store sales growth in the mid-single-digit range for the first fiscal quarter of 2004, resulting in earnings per diluted share in the range of $0.23 to $0.25. For the 2004 fiscal year, the company currently expects to realize same store sales growth in the low to mid-single-digit range, resulting in earnings per diluted share of $1.47 to $1.53. Fiscal 2004 will include 53 weeks for accounting purposes, with the extra week being included in the company's fourth quarter results. This additional week should add approximately 1.75% to fiscal 2004 sales versus fiscal 2003, but should not have a material impact on earnings results for the fourth quarter or year.
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 full year ended December 28, 2003. The webcast will be available at www.big5sportinggoods.com and archived for three months.
About Big 5 Sporting Goods Corporation
Big 5 is the leading sporting goods retailer in the western United States, operating 293 stores in 10 states under the "Big 5 Sporting Goods" name. Big 5 provides a full-line product offering 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 Annual Report on Form 10-K filed on March 31, 2003 and its Quarterly Report on Form 10-Q for the quarter ended September 28, 2003. 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 CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
13 Weeks Ended 13 Weeks Ended (1)
December December December
28, 2003 29, 2002 28, 2003
Net sales $191,823 $176,720 $191,823
Cost of goods sold, buying and
occupancy 121,554 112,856 121,554
Gross profit 70,269 63,864 70,269
Selling and administrative 46,807 42,498 46,807
Depreciation and amortization 2,784 2,809 2,784
Operating income 20,678 18,557 20,678
Premium and unamortized financing
fees related to redemption of debt 1,901 -- --
Interest expense, net 2,661 3,527 2,661
Income before income taxes 16,116 15,030 18,017
Income tax 6,189 6,203 6,921
Net income available to common
stockholders $9,927 $8,827 $11,096
Earnings per share:
Basic $0.44 $0.40 $0.49
Diluted $0.43 $0.39 $0.49
Shares used to calculate earnings
per share:
Basic 22,664 21,915 22,664
Diluted 22,832 22,664 22,832
BIG 5 SPORTING GOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
52 Weeks Ended 52 Weeks Ended (1)
December December December December
28, 2003 29, 2002 28, 2003 29, 2002
Net sales $709,740 $667,469 $709,740 $667,469
Cost of goods sold, buying and
occupancy 453,814 429,858 453,814 429,858
Gross profit 255,926 237,611 255,926 237,611
Selling and administrative 186,798 174,868 186,798 171,862
Depreciation and amortization 10,412 9,966 10,412 9,966
Operating income 58,716 52,777 58,716 55,783
Premium and unamortized
financing fees related to
redemption of debt 3,434 4,557 -- --
Interest expense, net 11,405 15,825 11,405 14,050
Income before income taxes 43,877 32,395 47,311 41,733
Income tax 17,587 13,313 18,963 17,135
Net income 26,290 19,082 28,348 24,598
Redeemable preferred stock
dividends and redemption
premium -- 7,999 -- --
Net income available to common
stockholders $26,290 $11,083 $28,348 $24,598
Earnings per share:
Basic $1.16 $0.60 $1.25 $1.14
Diluted $1.16 $0.57 $1.25 $1.09
Shares used to calculate earnings
per share:
Basic 22,651 18,358 22,651 21,546
Diluted 22,753 19,476 22,753 22,664
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 uses this pro forma reporting internally to evaluate its
operating performance without regard to certain non-recurring
financial effects of its initial public offering in 2002 or certain
financial effects of the 2003 partial senior note redemptions and
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 for the 2003 partial senior note
redemptions and by treating the 2002 initial public offering,
including the exercise of the underwriters' over-allotment option, as
if it were completed at the beginning of the period presented.
(in thousands except earnings
per share data) 13 Weeks Ended 52 Weeks Ended
December 28, December 28, December 29,
2003 2003 2002
Reported net income available to
common stockholders $9,927 $26,290 $11,083
Redeemable preferred stock
dividends (a) -- -- 7,999
Reported net income 9,927 26,290 19,082
Bonus expense (b) -- -- 1,962
Management fees (c) -- -- 1,044
Interest expense (d) -- -- 1,775
Premium and unamortized financing
fees related to redemption of
debt (e) 1,901 3,434 4,557
Income taxes (f) (732) (1,376) (3,822)
Pro forma net income available to
common stockholders $11,096 $28,348 $24,598
Pro forma earnings per share -
diluted $0.49 $1.25 $1.09
Pro forma weighted average shares
outstanding - diluted 22,832 22,753 22,664
(a) To eliminate dividends and redemption premium on preferred stock
redeemed in connection with the initial public offering.
(b) To eliminate from selling and administrative expenses, 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 from selling and administrative expenses, 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 premium and unamortized financing fees associated
with the 2003 partial redemptions of senior notes (2003 adjustment
only) and the redemption of the senior discount notes in connection
with the initial public offering (2002 adjustment only).
(f) To reflect tax benefit for items (b) through (e) noted above at the
company's effective tax rate.
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
December 28, December 29,
2003 2002
Assets
Current assets
Cash $9,030 $9,441
Merchandise inventory 179,555 169,529
Other current assets 16,539 11,442
Total current assets 205,124 190,412
Property and equipment, net 46,952 45,104
Other long-term assets 19,769 22,459
Total assets $271,845 $257,975
Liabilities and Stockholders' Equity
Current liabilities $130,541 $117,645
Deferred rent 11,654 11,525
Long-term debt 99,686 125,131
Total liabilities 241,881 254,301
Net stockholders' equity 29,964 3,674
Total liabilities and stockholders' equity $271,845 $257,975
SOURCE Big 5 Sporting Goods Corporation
-0- 02/11/2004
/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, +1-323-866-6007, for Big 5 Sporting Goods Corporation/
/Web site: http://www.big5sportinggoods.com /
(BGFV)
CO: Big 5 Sporting Goods Corporation
ST: California
IN: REA SPT FAS
SU: ERN CCA MAV OFR ERP
AC-JC
-- LAW108 --
3370 02/11/2004 16:15 EST http://www.prnewswire.com