* First Quarter Diluted Earnings Per Share Increase 27% to $0.33
* Same Store Sales Increase Represents 45th Consecutive Quarter of Same
Store Sales Growth
* Declares Regular Quarterly Cash Dividend
EL SEGUNDO, Calif., May 3 /PRNewswire-FirstCall/ -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV), a leading sporting goods retailer, today reported financial results for the fiscal 2007 first quarter ended April 1, 2007.
For the fiscal 2007 first quarter, net sales increased $9.8 million, or 4.7%, to $217.0 million from net sales of $207.2 million for the first quarter of fiscal 2006. Same store sales increased 1.0% for the first quarter, representing the Company's 45th consecutive quarter of positive same store sales comparisons.
Gross profit for the fiscal 2007 first quarter increased 6.3% to $78.0 million from $73.4 million in the first quarter of the prior year. The Company's gross profit margin improved to 36.0% in the fiscal 2007 first quarter from 35.4% in the first quarter of the prior year. The margin improvement was driven by an increase of approximately 80 basis points in product selling margins, which benefited from sales of winter-related products earlier in the quarter at higher margins than the prior year, and a $2.2 million decrease in distribution center costs due to facility transition costs incurred in the prior year. These improvements were partially offset by a $2.4 million reduction in inventory cost capitalization from the first quarter of the prior year.
Selling and administrative expense as a percentage of net sales improved to 27.6% in the fiscal 2007 first quarter from 27.7% in the first quarter of last year. This improvement was driven primarily by a $1.3 million decrease in audit and legal fees due to additional expenses incurred in the prior year to complete the Company's financial statement and internal control audits, and the Company's leveraging of store-related expenses. These benefits were partially offset by a $1.1 million increase in advertising expense primarily to support the Company's sales and store growth.
Net income for the first quarter of fiscal 2007 increased to $7.6 million, or $0.33 per diluted share, from net income of $5.9 million, or $0.26 per diluted share, for the first quarter of fiscal 2006.
Quarterly Cash Dividend
The Company's Board of Directors has declared a quarterly cash dividend of $0.09 per share of outstanding common stock, which will be paid on June 15, 2007 to stockholders of record as of June 1, 2007.
Guidance
For the second quarter of fiscal 2007, the Company expects to realize same store sales growth in the flat to low single-digit range and earnings per diluted share in the range of $0.25 to $0.33. Second quarter earnings guidance reflects lower than anticipated sales beginning in the second half of April and, compared to the prior year, reflects lower distribution center expenses offset by a reduction in inventory cost capitalization and higher administrative expenses to support the Company's financial reporting initiatives. The Company continues to expect full-year same store sales growth in the low single-digit range and full-year earnings per diluted share in the range of $1.47 to $1.57.
Store Openings
During the fiscal 2007 first quarter, the Company opened three new stores, including one relocation, and closed an additional store in preparation for its relocation during the second quarter. The Company operated 344 stores at the end of the first quarter and anticipates opening four new stores during the fiscal 2007 second quarter. The Company anticipates opening approximately 20 new stores, net of relocations, during fiscal 2007.
"We are pleased to have begun the year with a very strong earnings performance," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. "We achieved sales and product margin gains in each of our three major merchandise categories of footwear, hard goods and apparel, while comping against our strongest quarterly same store sales performance of last year. Product margins benefited from strong sales of winter-related products early in the quarter, when margins are highest, compared to last year, when we realized very strong winter product sales late in the quarter."
Commenting on second quarter sales trends, Mr. Miller added, "While sales over the first two weeks of the second quarter were positive, they began to soften in the second half of April. We are continuing to evaluate the factors that may be contributing to these lower than anticipated sales levels. The back half of the second quarter, which includes Memorial Day, Father's Day and pre-Fourth of July sales, is by far the most important part of the quarter. We believe we are well positioned with a strong merchandise and promotional plan for this period."
Conference Call Information
The Company will host a conference call and audio webcast today at 2:00 p.m. Pacific (5:00 p.m. EDT) to discuss financial results for the fiscal 2007 first quarter. The webcast will be available at www.big5sportinggoods.com and archived for 30 days. Visitors to the website should select the "Investor Relations" link to access the webcast.
About Big 5 Sporting Goods Corporation
Big 5 is a leading sporting goods retailer in the United States, operating 344 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 current or 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, operating expense fluctuations, disruption in product flow or increased costs related to distribution center operations, 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 its Annual Report on Form 10-K for the fiscal year ended December 31, 2006. Big 5 conducts its business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. It is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on Big 5's business or the extent to which any individual risk factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Big 5 disclaims any obligation to update such factors or to publicly announce results of revisions to any of the forward-looking statements contained herein to reflect future events or developments.
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
April 1, December 31,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $6,836 $5,145
Trade and other receivables, net
of allowances of $254 and $314,
respectively 8,867 13,146
Merchandise inventories 233,524 228,692
Prepaid expenses 8,003 9,857
Deferred income taxes 8,775 9,345
Total current assets 266,005 266,185
Property and equipment, net 87,529 88,159
Deferred income taxes 8,156 7,795
Other assets, net of accumulated
amortization of $204 and $590,
respectively 1,095 1,107
Goodwill 4,433 4,433
Total assets $367,218 $367,679
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $109,006 $96,128
Accrued expenses 56,646 66,513
Current portion of capital lease
obligations 2,035 1,995
Total current liabilities 167,687 164,636
Deferred rent, less current portion 19,397 19,735
Capital lease obligations, less
current portion 3,081 2,992
Long-term debt 67,457 77,086
Other long-term liabilities 2,833 2,770
Total liabilities 260,455 267,219
Commitments and contingencies and
subsequent events
Stockholders' equity:
Common stock, $0.01 par value,
authorized 50,000,000 shares;
issued 22,868,387 and 22,848,887
shares, respectively;
outstanding 22,689,167 and
22,670,367 shares, respectively 228 228
Additional paid-in capital 88,730 87,956
Retained earnings 19,672 14,126
Less: Treasury stock, at cost;
179,220 and 178,520 shares,
respectively (1,867) (1,850)
Total stockholders' equity 106,763 100,460
Total liabilities and
stockholders' equity $367,218 $367,679
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
13 Weeks Ended
April 1, 2007 April 2, 2006
Net sales $217,007 $207,181
Cost of goods sold, buying and
occupancy, excluding depreciation
and amortization shown separately below 138,963 133,754
Gross profit 78,044 73,427
Operating expenses:
Selling and administrative 59,872 57,392
Depreciation and amortization 4,206 4,400
Total operating expenses 64,078 61,792
Operating income 13,966 11,635
Interest expense 1,449 1,829
Income before income taxes 12,517 9,806
Income taxes 4,930 3,863
Net income $7,587 $5,943
Dividends per share declared $0.09 $0.07
Earnings per share:
Basic $0.33 $0.26
Diluted $0.33 $0.26
Weighted-average shares of common
stock outstanding:
Basic 22,675 22,702
Diluted 22,785 22,787
SOURCE Big 5 Sporting Goods Corporation
-0- 05/03/2007
/CONTACT: Barry Emerson, Sr. Vice President and Chief Financial Officer
of Big 5 Sporting Goods Corporation, +1-310-536-0611; or John Mills, Senior
Managing Director, Integrated Corporate Relations, Inc., +1-310-954-1105, for
Big 5 Sporting Goods Corporation/
/Web site: http://www.big5sportinggoods.com /
(BGFV)
CO: Big 5 Sporting Goods Corporation
ST: California
IN: REA SPT
SU: ERN ERP DIV CCA
AF-KA
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2032 05/03/2007 16:01 EDT http://www.prnewswire.com