EL SEGUNDO, Calif., Aug 4, 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 second quarter and six months ended June 27, 2004.
For the 2004 second quarter, net sales increased 8.5% to $184.5 million from $170.1 million in the second quarter of fiscal 2003. Same store sales increased 3.9% versus the same quarter last year, representing the company's 34th consecutive quarter of same store sales growth over comparable prior periods. Net income for the 2004 second quarter increased to $8.0 million, or $0.35 per diluted share excluding a charge of $0.5 million, or $0.02 per diluted share, net of taxes, associated with the redemption of $15.0 million principal amount of the company's 10.875% senior notes. These figures compare to net income of $6.3 million, or $0.28 per diluted share, in the same period last year. Net income, calculated in accordance with generally accepted accounting principles ("GAAP"), was $7.5 million, or $0.33 per diluted share, for the 2004 second quarter.
For the six-month period ended June 27, 2004, net sales increased 9.2% to $365.5 million from $334.6 million in the same period last year and same store sales increased 4.5% versus the same six months of 2003. Net income in the first half of fiscal 2004 was $14.8 million, or $0.65 per diluted share excluding the aforementioned second quarter debt redemption charge, compared to $10.5 million, or $0.46 per diluted share excluding a similar debt redemption charge of $0.9 million, or $0.04 per diluted share, net of taxes, for the same period in fiscal 2003. Net income, calculated in accordance with GAAP, increased to $14.3 million, or $0.63 per diluted share, for the first six months of fiscal 2004, compared to net income of $9.7 million, or $0.43 per diluted share, in the same period last year.
"We are pleased to have achieved another very solid performance for Big 5 Sporting Goods," said Steven G. Miller, Big 5's Chairman, President and Chief Executive Officer. "Our focused approach to drive top-line sales allowed us to realize comp store gains in each of our five geographic regions and for each of our three major merchandise categories -- footwear, apparel and hard goods. Our proven business model continues to perform well and we feel we are positioned to continue our strong performance going forward."
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 redemptions (as described above). Big 5 uses this pro forma reporting internally to evaluate its operating performance without regard to certain financial effects of its 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 pro forma adjustments to GAAP appears in the financial statements portion of this release.
Store Openings
The company ended the fiscal 2004 second quarter operating 295 stores, opening one new store during the quarter. The company anticipates opening between 13 and 16 additional new stores by the end of fiscal 2004.
EPS Guidance
Big 5 expects to realize same store sales growth in the low single-digit range for the third 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 to realize same store sales growth in the low to mid-single-digit range and expects pro forma earnings to be in the range of $1.55 to $1.61 per diluted share, which is unchanged from previous guidance. The full year estimate of earnings per diluted share excludes the $0.02 per diluted share charge recorded in the second quarter 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 fiscal 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 June 27, 2004. The webcast will be available at www.big5sportinggoods.com and archived for 30 days.
About Big 5 Sporting Goods Corporation
Big 5 is the leading sporting goods retailer in the western United States, operating 295 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 sold, 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.
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
Pro Forma
As Reported 13 Weeks
13 Weeks Ended Ended (1)
June 27, June 29, June 27,
2004 2003 2004
Net sales $184,487 $170,125 $184,487
Cost of goods sold, buying and
occupancy 116,806 107,530 116,806
Gross profit 67,681 62,595 67,681
Selling and administrative 50,035 46,521 50,035
Depreciation and amortization 2,711 2,527 2,711
Operating income 14,935 13,547 14,935
Premium and unamortized financing
fees related to redemption of debt 792 -- --
Interest expense, net 1,638 2,922 1,638
Income before income taxes 12,505 10,625 13,297
Income taxes 5,001 4,357 5,318
Net income available to common
stockholders $7,504 $6,268 $7,979
Earnings per share:
Basic $0.33 $0.28 $0.35
Diluted $0.33 $0.28 $0.35
Shares used to calculate earnings per
share:
Basic 22,668 22,664 22,668
Diluted 22,794 22,730 22,794
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
26 Weeks Ended 26 Weeks Ended (1)
June 27, June 29, June 27, June 29,
2004 2003 2004 2003
Net sales $365,492 $334,642 $365,492 $334,642
Cost of goods sold, buying and
occupancy 232,172 214,195 232,172 214,195
Gross profit 133,320 120,447 133,320 120,447
Selling and administrative 99,615 91,643 99,615 91,643
Depreciation and amortization 5,502 5,043 5,502 5,043
Operating income 28,203 23,761 28,203 23,761
Premium and unamortized financing
fees related to redemption of debt 792 1,483 -- --
Interest expense, net 3,574 5,896 3,574 5,896
Income before income taxes 23,837 16,382 24,629 17,865
Income taxes 9,534 6,717 9,851 7,325
Net income $14,303 $9,665 $14,778 $10,540
Earnings per share:
Basic $0.63 $0.43 $0.65 $0.47
Diluted $0.63 $0.43 $0.65 $0.46
Shares used to calculate earnings
per share:
Basic 22,666 22,637 22,666 22,637
Diluted 22,792 22,691 22,792 22,691
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 financial effects of
the 2004 second quarter and 2003 first quarter 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 2004 and 2003
partial senior note redemptions.
(in thousands except
earnings per share data)
13 Weeks Ended 26 Weeks Ended
June 27, June 27, June 27,
2004 2004 2003
Reported net income $7,504 $14,303 $9,665
Premium and unamortized financing
fees related to redemption of
debt (a) 792 792 1,483
Income taxes (b) (317) (317) (608)
Pro forma net income $7,979 $14,778 $10,540
Pro forma earnings per share -
diluted $0.35 $0.65 $0.46
Pro forma weighted average shares
outstanding - diluted 22,794 22,792 22,691
(a) To eliminate the premium and unamortized financing fees associated
with the 2004 and 2003 partial redemptions of senior notes.
(b) To reflect tax benefit for item (a) noted above at the company's
effective tax rate.
BIG 5 SPORTING GOODS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
June 27, December 28,
2004 2003
Assets
Current assets
Cash $6,435 $9,030
Merchandise inventory 199,383 179,555
Other current assets 9,852 16,539
Total current assets 215,670 205,124
Property and equipment, net 45,665 46,952
Other long-term assets 18,568 19,949
Total assets $279,903 $272,025
Liabilities and Stockholders' Equity
Accounts payable $73,204 $76,004
Other current liabilities 41,246 54,717
Deferred rent 11,613 11,654
Long-term debt 109,517 99,686
Total liabilities 235,580 242,061
Net stockholders' equity 44,323 29,964
Total liabilities and stockholders'
equity $279,903 $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., +1-310-395-2215, for Big 5 Sporting Goods Corporation
http://www.big5sportinggoods.com