EL SEGUNDO, Calif., Apr 29, 2004 /PRNewswire-FirstCall via COMTEX/ -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV), a leading sporting goods retailer, today reported financial results for the fiscal 2004 first quarter that ended on March 28, 2004.
For the 2004 first quarter, net sales increased by $16.5 million, or 10.0%, to $181.0 million from $164.5 million in the first quarter of 2003. Same store sales increased 5.2% versus the first quarter last year, representing the company's 33rd consecutive quarterly increase in same store sales over comparable prior periods. Net income, calculated in accordance with generally accepted accounting principles ("GAAP"), increased to $6.8 million, or $0.30 per diluted share for the 2004 first quarter, compared with net income of $3.4 million, or $0.15 per diluted share, in the same period last year. Net income for the 2003 first quarter included a charge of $875,000, net of taxes, associated with the redemption of $20.0 million principal amount of the company's 10.875% senior notes. Excluding this charge, net income for the 2003 first quarter was $4.3 million, or $0.19 per diluted share.
"We are pleased to report outstanding first quarter earnings results which meaningfully exceeded both our guidance and analysts' estimates," said Steven G. Miller, Big 5's Chairman, President and Chief Executive Officer. "Our performance was driven by a 5.2% same store sales increase versus the first quarter of 2003, which represented our 33rd consecutive quarterly increase in same store sales. Once again, our same store performance was positive in each of our five geographic regions and for each of our three major merchandise categories -- footwear, apparel and hard goods. The company also benefited from improved operating profit margins and significantly reduced interest costs during the quarter versus the first quarter of 2003. We believe we are well positioned to continue this strong performance into the second quarter and throughout the remainder of 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 partial senior note redemption (as described above). Big 5 uses this pro forma reporting internally to evaluate its operating performance without regard to certain financial effects of the 2003 partial senior note redemption and believes this presentation will provide investors with additional insight into its operating results. A reconciliation of the senior note redemption pro forma adjustments to GAAP appears in the financial statements portion of this release.
Store Openings
The company ended the fiscal 2004 first quarter operating 294 stores, opening three new stores since year-end, two of which were relocations. The company anticipates opening between 15 and 20 net new stores in fiscal 2004.
EPS Guidance
Big 5 expects to realize same store sales growth in the low to mid-single- digit range for the second fiscal quarter of 2004, resulting in earnings per diluted share in the range of $0.34 to $0.36. For the 2004 fiscal year, the company expects same store sales growth in the low to mid-single-digit range, resulting in earnings per diluted share of $1.55 to $1.61 which compares to previous guidance of $1.47 to $1.53 per diluted share. Both the second quarter and full year estimate of earnings per diluted share exclude $0.02 per diluted share, which will be recorded in the second quarter, related to a charge associated with a redemption of $15.0 million principal amount of the company's 10.875% senior notes. 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 ended March 28, 2004. 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 294 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, changes in interest rates 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 12, 2004. 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)
March 28, 2004 March 30, 2003 March 30, 2003
Net sales $181,005 $164,517 $164,517
Cost of goods sold,
buying and occupancy 115,366 106,665 106,665
Gross profit 65,639 57,852 57,852
Selling and
administrative 49,580 45,122 45,122
Depreciation and
amortization 2,791 2,516 2,516
Operating income 13,268 10,214 10,214
Premium and unamortized
financing fees related
to redemption of debt -- 1,483 --
Interest expense, net 1,936 2,974 2,974
Income before
income taxes 11,332 5,757 7,240
Income tax 4,533 2,360 2,968
Net income available
to common stockholders $6,799 $3,397 $4,272
Earnings per share:
Basic $0.30 $0.15 $0.19
Diluted $0.30 $0.15 $0.19
Shares used to calculate
earnings per share:
Basic 22,664 22,605 22,605
Diluted 22,873 22,664 22,664
BIG 5 SPORTING GOODS CORPORATION
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 financial effects of
the 2003 first quarter 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.
(in thousands except earnings per share data) 13 Weeks Ended
March 30, 2003
Reported net income available to common stockholders $3,397
Premium and unamortized financing fees related
to redemption of debt (a) 1,483
Income taxes (b) (608)
Pro forma net income available to common stockholders $4,272
Pro forma earnings per share - diluted $0.19
Pro forma weighted average shares outstanding - diluted 22,664
(a) To eliminate the premium and unamortized financing fees associated
with the 2003 partial redemption of senior notes.
(b) To reflect tax benefit for item (a) noted above at the company's
effective tax rate.
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
March 28, December 28,
2004 2003
Assets
Current assets
Cash $11,958 $9,030
Merchandise inventory 188,691 179,555
Other current assets 10,373 16,539
Total current assets 211,022 205,124
Property and equipment, net 46,069 46,952
Other long-term assets 18,906 19,949
Total assets $275,997 $272,025
Liabilities and Stockholders' Equity
Accounts payable $70,462 $76,004
Other current liabilities 48,200 54,717
Deferred rent 11,639 11,654
Long-term debt 108,914 99,686
Total liabilities 239,215 242,061
Net stockholders' equity 36,782 29,964
Total liabilities and stockholders' equity $275,997 $272,025
SOURCE Big 5 Sporting Goods Corporation
Charles Kirk, Sr. Vice President and Chief Financial Officer of Big 5 Sporting Goods Corporation, +1-310-536-0611; or John Mills of Integrated Corporate Relations, Inc., +1-310-395-0259
http://www.big5sportinggoods.com