- Fourth Quarter Diluted Earnings Per Share of $0.28
- Full-Year Diluted Earnings Per Share of $1.25
- Declares Quarterly Cash Dividend of $0.09
EL SEGUNDO, Calif., Feb. 28 /PRNewswire-FirstCall/ -- Big 5 Sporting Goods Corporation (Nasdaq: BGFV), a leading sporting goods retailer, today reported financial results for the fiscal 2007 fourth quarter and full year ended December 30, 2007.
As the Company previously reported, for the fiscal 2007 fourth quarter, net sales were $232.1 million, compared to net sales of $234.5 million for the fourth quarter of fiscal 2006. Same store sales declined 4.7% for the fourth quarter. The decrease in sales is primarily attributable to weakened customer traffic as a result of the challenging consumer environment. Additionally, sales results were impacted by a significant deterioration in the performance of the roller shoe product category over the prior year, which accounted for approximately 45% of the same store sales decline.
Gross profit for the fiscal 2007 fourth quarter was $79.2 million, compared to $80.4 million in the fourth quarter of the prior year. The Company's gross profit margin was 34.1% in the fiscal 2007 fourth quarter versus 34.3% in the fourth quarter of the prior year. The slight decrease in gross profit margin was driven primarily by a 35 basis point decline in product selling margins and higher store occupancy costs, partially offset by a decrease in distribution center expenses resulting from operational efficiencies realized in the Company's new distribution center.
Selling and administrative expense as a percentage of net sales was 28.8% in the fiscal 2007 fourth quarter versus 26.6% in the fourth quarter of the prior year, primarily due to the lower than anticipated sales levels, higher store-related expenses reflecting an increased store count and higher advertising expenses resulting in part from the timing of co-op advertising programs.
Net income for the fourth quarter of fiscal 2007 was $6.2 million, or $0.28 per diluted share, compared to net income of $9.6 million, or $0.42 per diluted share, for the fourth quarter of fiscal 2006.
For the fiscal 2007 full year ended December 30, 2007, net sales increased $21.5 million, or 2.5%, to $898.3 million from net sales of $876.8 million for fiscal 2006. Same store sales decreased 1.0% in the fiscal 2007 full year versus the prior year. Net income was $28.1 million, or $1.25 per diluted share, for the fiscal 2007 full year, compared to net income of $30.8 million, or $1.35 per diluted share, in the fiscal 2006 full year.
"Our fourth quarter and full-year earnings are in line with our revised guidance and reflect the continued challenging macro-economic environment," said Steven G. Miller, the Company's Chairman, President and Chief Executive Officer. "Like many other retailers, we experienced weak consumer spending during the holiday selling season. This softness in the retail environment has continued into the first quarter of fiscal 2008. Although weather conditions have benefited sales of winter-related products, we have not experienced strength in many of our other product categories. Additionally, we expect product selling margins to be impacted in the first quarter, given continued weakness in the roller shoe product category, inflationary pressures and the fact that we have been slightly more aggressive in our promotional pricing efforts to drive sales and reduce inventory in this difficult environment.
Mr. Miller continued, "We remain confident in the effectiveness of our overall business model and continue to focus on long-term strategies, including augmenting areas of our business that we can influence, such as opportunistically buying merchandise, enhancing our merchandise offering and promotional plan, securing new store locations and controlling expenses. We believe these efforts will strengthen our market position and enable us to achieve higher levels of earnings when the consumer spending environment improves."
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 March 14, 2008 to stockholders of record as of February 29, 2008.
Share Repurchases
During the fiscal 2007 fourth quarter and fiscal 2008 first quarter through February 27, 2008, the Company repurchased 216,551 shares of its common stock for a total expenditure of $3.3 million. In making these repurchases, the Company utilized the remaining availability under its initial $15.0 million share repurchase program and approximately $1.7 million of the $20.0 million available under the share repurchase program authorized in the fiscal 2007 fourth quarter. Since the inception of the Company's initial share repurchase program in the second quarter of fiscal 2006, the Company has repurchased a total of 858,086 shares, for a total expenditure of $16.7 million.
Guidance
The Company's guidance for the fiscal 2008 first quarter and full year assumes that sales will continue to be impacted by a challenging consumer environment throughout the year. Based on that assumption, the Company is providing the following guidance:
-- For the fiscal 2008 first quarter, a decline in same store sales in the
low to mid-single digit range and earnings per diluted share in the
range of $0.17 to $0.23; and
-- For the fiscal 2008 full year, a decline in same store sales in the low
to mid-single digit range and earnings per diluted share in the range
of $0.75 to $1.00.
A material improvement or decline in the overall consumer environment during the year could materially impact the Company's performance relative to this guidance.
Store Openings
The Company opened ten new stores during the fourth quarter of fiscal 2007, bringing its store count at the end of fiscal 2007 to 363 stores, from 343 at the end of fiscal 2006. The Company anticipates opening approximately 20 new stores, net of relocations and closures, during fiscal 2008.
Conference Call Information
The Company will host a conference call and audio webcast today at 2:00 p.m. Pacific (5:00 p.m. EST) to discuss financial results for the fiscal 2007 fourth quarter and full year. The webcast will be available at http://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 western United States, operating 363 stores in 11 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, continued or worsening weakness in the consumer spending environment, 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 cost 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 and uncertainties 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 and its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007. 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 undertakes no obligation to revise or update any forward- looking statement that may be made from time to time by it or on its behalf.
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
December 30, December 31,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $9,741 $5,145
Accounts receivable, net of
allowances of $405 and $314,
respectively 14,927 13,146
Merchandise inventories, net 252,634 228,692
Prepaid expenses 7,069 9,857
Deferred income taxes 10,070 9,345
Total current assets 294,441 266,185
Property and equipment, net 93,244 88,159
Deferred income taxes 10,761 7,795
Other assets, net of accumulated
amortization of $241 and $590,
respectively 1,044 1,107
Goodwill 4,433 4,433
Total assets $403,923 $367,679
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $95,310 $96,128
Accrued expenses 67,525 66,513
Current portion of capital lease
obligations 1,649 1,995
Total current liabilities 164,484 164,636
Deferred rent, less current portion 22,075 19,735
Capital lease obligations, less
current portion 2,279 2,992
Long-term debt 103,369 77,086
Other long-term liabilities 2,561 2,770
Total liabilities 294,768 267,219
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value,
authorized 50,000,000 shares;
issued 22,894,987 and 22,848,887
shares, respectively; outstanding
22,012,691 and 22,670,367 shares,
respectively 228 228
Additional paid-in capital 90,851 87,956
Retained earnings 34,137 14,126
Less: Treasury stock, at cost;
882,296 and 178,520 shares,
respectively (16,061) (1,850)
Total stockholders' equity 109,155 100,460
Total liabilities and
stockholders' equity $403,923 $367,679
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended 52 Weeks Ended
December 30, December 31, December 30, December 31,
2007 2006 2007 2006
Net sales $232,131 $234,542 $898,292 $876,805
Cost of sales (1) 152,911 154,148 589,150 575,577
Gross profit (1) 79,220 80,394 309,142 301,228
Selling and
administrative
expense (1) 66,918 62,361 256,180 242,769
Operating income 12,302 18,033 52,962 58,459
Interest expense 2,110 2,109 6,614 7,516
Income before
income taxes 10,192 15,924 46,348 50,943
Income taxes 4,010 6,288 18,257 20,108
Net income $6,182 $9,636 $28,091 $30,835
Dividends per share $0.09 $0.09 $0.36 $0.34
Earnings per share:
Basic $0.28 $0.43 $1.25 $1.36
Diluted $0.28 $0.42 $1.25 $1.35
Weighted-average
shares of common
stock outstanding:
Basic 22,087 22,661 22,465 22,691
Diluted 22,160 22,772 22,559 22,795
(1) The Company reclassified its previously reported condensed
consolidated statements of operations for fiscal 2006 periods to
conform to the current year presentation, which increased cost of
sales and decreased gross profit by $2.7 million and $9.7 million for
the fiscal 2006 fourth quarter and full year, respectively, and
increased selling and administrative expense for the fourth quarter
and full year by $1.9 million and $7.4 million, respectively, from
amounts previously reported. Historically, the Company has presented
total depreciation and amortization expense separately on the face of
its condensed consolidated statement of operations and corporate
headquarters' occupancy costs within cost of sales. In the fourth
quarter of fiscal 2007, the Company changed its classification of
distribution center and store occupancy depreciation and amortization
expense to cost of sales and store equipment and corporate
headquarters' depreciation and amortization expense to selling and
administrative expense. Depreciation and amortization expense is no
longer presented separately in the condensed consolidated statement
of operations. The corporate headquarters' occupancy costs are now
included in selling and administrative expense. This reclassification
had no effect on the Company's previously reported operating or net
income.
SOURCE Big 5 Sporting Goods Corporation
-0- 02/28/2008
/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 of ICR, 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 CCA DIV
CW-CD
-- LATH079 --
3387 02/28/2008 16:01 EST http://www.prnewswire.com