- Third Quarter Highlights
* Diluted EPS Increases 25% to $0.30 Versus Pro Forma $0.24
* 3.3% Same Store Sales Increase Represents 31st Consecutive
Quarterly Increase
* Revenues Grow to $183.3 Million
- Conference Call Scheduled Today at 2:00 p.m. (Pacific);
Simultaneous Webcast at www.big5sportinggoods.com
EL SEGUNDO, Calif., Oct. 29 /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 2003 third quarter that ended on September 28, 2003.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020715/BIG5LOGO )
For the 2003 third quarter, net sales increased by $12.4 million, or 7.2%, to $183.3 million from $170.9 million in the third quarter of 2002. Same store sales increased 3.3% versus the third quarter last year, representing the company's thirty-first consecutive quarterly increase in same store sales over comparable prior periods. Gross profit margin increased 1.0% during the third quarter to 35.6% from gross profit margin of 34.6% for the same period last year. Selling and administrative expenses were 26.4% of net sales for the 2003 third quarter. This compares to 2002 third quarter selling and administrative expense calculated in accordance with generally accepted accounting principles (GAAP) of 26.0% of net sales and 2002 third quarter pro forma selling and administrative expenses of 25.7% of net sales after excluding certain effects related to the company's initial public offering (IPO) and exercise of the underwriters' overallotment option in mid-2002.
Net income available to common stockholders for the 2003 third quarter, calculated in accordance with GAAP, was $6.7 million, or $0.30 per diluted share, compared to GAAP net loss to common stockholders of $1.4 million, or $0.07 per diluted share, in the same period last year. Third quarter 2002 pro forma net income available to common stockholders was $5.5 million, or $0.24 per diluted share.
For the nine months ended September 28, 2003, net sales increased by $27.2 million, or 5.5%, to $517.9 million from $490.7 million in the first nine months of 2002. Same store sales increased 1.6% versus the same period last year. Gross profit margin increased 0.4% during the first nine months of 2003 to 35.8% from gross profit margin of 35.4% for the comparable period last year. Selling and administrative expenses were 27.0% of net sales for the first nine months of 2003. This compares to selling and administrative expenses calculated in accordance with GAAP of 27.0% of net sales for the first nine months of 2002 and pro forma selling and administrative expenses of 26.4% of net sales for the first nine months of 2002.
Net income available to common stockholders for the first nine months of 2003, calculated in accordance with GAAP, increased to $16.4 million, or $0.72 per diluted share, compared to GAAP net income available to common stockholders of $2.3 million, or $0.12 per diluted share in the same period last year. Results for the nine months ended September 28, 2003 include $875,000, net of taxes, or $0.04 per diluted share, related to a charge associated with the redemption of $20.0 million face value of the company's 10.875% senior notes. Excluding this charge, net income available to stockholders for the first nine months of 2003 was $17.3 million, or $0.76 per diluted share. This compares to pro forma net income available to common stockholders for the first nine months of 2002 of $15.8 million, or $0.70 per diluted share.
"We are pleased to report an outstanding quarter. Staying true to our proven business formula, we achieved stronger sales and gross profit margins that enabled us to produce bottom line results that exceeded both our guidance and analysts' estimates," said Steven G. Miller, Big 5's Chairman, President and Chief Executive Officer. "We feel that our 3.3% same store sales increase represents a very solid performance by our company, particularly given that we were up against a strong 2002 third quarter, when we posted a 5.3% same store sales gain over the third quarter in the prior year. Our sales trends improved during the 2003 third quarter over the first half of the year, benefiting from the return of more normal weather patterns as well as indications of a healthier consumer environment. This positive momentum bodes well for our business as we move toward the holiday season. We believe we are well positioned for continued strong performance throughout the remainder of this year and into 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 IPO, including the exercise of the underwriters' over-allotment option. The company raised a total of $84.0 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 2002 third 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 for fiscal 2002 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 the 2003 partial senior note redemption 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.
Store Openings
Big 5 opened seven new stores during the 2003 third quarter and three additional stores subsequent to the end of the quarter, bringing its current total store count to 285. Big 5 plans to complete its fiscal 2003 store openings with the addition of eight more stores before year-end, resulting in a year-end store count of 293 stores.
EPS Guidance
Big 5 expects to realize same store sales growth in the low to mid single- digit range for the fourth fiscal quarter of 2003, resulting in earnings per diluted share in the range of $0.44 to $0.48. For the fiscal year ending December 28, 2003, the company's guidance has been increased from the prior quarter. The company currently expects to realize same store sales growth for the fiscal year in the low single-digit range, resulting in earnings per diluted share of $1.21 to $1.25. The quarterly estimate of earnings per diluted share is calculated in accordance with GAAP. The full-year estimate of earnings per diluted share excludes $0.04 per diluted share, recorded in the fiscal 2003 first quarter, related to the charge associated with the partial redemption of the company's senior notes.
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 ended September 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 285 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 Annual Report on Form 10-K filed on March 31, 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
13 Weeks Ended 13 Weeks Ended (1)
September 28, September 29, September 29,
2003 2002 2002
Net sales $183,275 $170,913 $170,913
Cost of goods sold,
buying and occupancy 118,065 111,806 111,806
Gross profit 65,210 59,107 59,107
Selling and administrative 48,348 44,450 43,979
Depreciation and
amortization 2,585 2,335 2,335
Operating income 14,277 12,322 12,793
Premium and unamortized
financing fees related
to redemption of debt -- 4,498 --
Interest expense, net 2,848 3,487 3,485
Income before income taxes 11,429 4,337 9,308
Income tax 4,685 1,741 3,777
Net income 6,744 2,596 5,531
Redeemable preferred
stock dividends and
redemption premium -- 4,010 --
Net income available
to common stockholders $6,744 $(1,414) $5,531
Earnings per share:
Basic $0.30 $(0.07) $0.25
Diluted $0.30 $(0.07) $0.24
Shares used to calculate
earnings per share:
Basic 22,664 21,430 22,178
Diluted 22,781 21,430 22,664
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
39 Weeks Ended 39 Weeks Ended (1)
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
Net sales $517,917 $490,749 $517,917 $490,749
Cost of goods sold,
buying and occupancy 332,260 317,002 332,260 317,002
Gross profit 185,657 173,747 185,657 173,747
Selling and
administrative 139,991 132,370 139,991 129,364
Depreciation and
amortization 7,628 7,157 7,628 7,157
Operating income 38,038 34,220 38,038 37,226
Premium and unamortized
financing fees related
to redemption of debt 1,483 4,564 -- --
Interest expense, net 8,744 12,298 8,744 10,523
Income before
income taxes 27,811 17,358 29,294 26,703
Income tax 11,402 7,103 12,010 10,932
Net income 16,409 10,255 17,284 15,771
Redeemable preferred
stock dividends and
redemption premium -- 7,999 -- --
Net income available
to common stockholders $16,409 $2,256 $17,284 $15,771
Earnings per share:
Basic $0.72 $0.13 $0.76 $0.71
Diluted $0.72 $0.12 $0.76 $0.70
Shares used to calculate
earnings per share:
Basic 22,646 17,202 22,646 22,178
Diluted 22,720 18,414 22,720 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 redemption 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
redemption and 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 39 Weeks Ended
September 29, September 28, September 29,
2002 2003 2002
Reported net income
available to
common stockholders $(1,414) $16,409 $2,256
Redeemable preferred
stock dividends (a) 4,010 -- 7,999
Reported net income 2,596 16,409 10,255
Bonus expense (b) 471 -- 1,962
Management fees (c) -- -- 1,044
Interest expense (d) 2 -- 1,775
Premium and unamortized
financing fees related
to redemption of debt (e) 4,498 1,483 4,564
Income taxes (f) (2,036) (608) (3,829)
Pro forma net income
available to
common stockholders $5,531 $17,284 $15,771
Pro forma earnings
per share - diluted $0.24 $0.76 $0.70
Pro forma weighted
average shares
outstanding - diluted 22,664 22,720 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 redemption 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 expense (benefit) for items (b) through (e) noted
above at the effective tax rate.
BIG 5 SPORTING GOODS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
September 28, December 29,
2003 2002
Assets
Current assets
Cash $5,950 $9,441
Merchandise inventory 178,381 169,529
Other current assets 6,245 11,442
Total current assets 190,576 190,412
Property and equipment, net 43,554 45,104
Other long-term assets 20,896 22,459
Total assets $255,026 $257,975
Liabilities and Stockholders' Equity
Current liabilities $107,057 $117,645
Deferred rent 11,590 11,525
Long-term debt 116,296 125,131
Total liabilities 234,943 254,301
Net stockholders' equity 20,083 3,674
Total liabilities and stockholders' equity $255,026 $257,975
SOURCE Big 5 Sporting Goods Corporation
-0- 10/29/2003
/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, +1-323-866-6007, for Big 5 Sporting Goods Corporation/
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/Web site: http://www.big5sportinggoods.com /
(BGFV)
CO: Big 5 Sporting Goods Corporation
ST: California
IN: REA
SU: ERN ERP CCA
CM
-- LAW096 --
9876 10/29/2003 16:02 EST http://www.prnewswire.com