- Reports First Quarter Loss per Share of
$(0.05) , Including Charges of$0.03 per Share
- Declares Quarterly Cash Dividend of
$0.125 per Share
For the fiscal 2016 first quarter, net sales were
Gross profit for the fiscal 2016 first quarter was
Selling and administrative expense as a percentage of net sales was 30.4% in the fiscal 2016 first quarter versus 29.8% in the first quarter of the prior year. Overall selling and administrative expense for the quarter decreased
Net loss for the first quarter of fiscal 2016 was
“After a very strong start to the first quarter as sales benefited from favorable winter weather in our markets, our winter product business decelerated when weather conditions turned warm and our non-winter product categories did not improve in the manner that we would have expected,” said
Mr. Miller continued, “Sales have remained soft for the start of the second quarter, as the increased promotional activity associated with the ongoing competitor liquidation sales has continued. Although our business likely will continue to be challenged in this respect over the near term, we intend to remain focused on sound expense control and inventory management so that we can maintain a healthy financial condition and be well positioned to benefit from the competitive rationalization that is occurring in our sector. We believe that as conditions in the sporting goods space normalize, our proven business model, which focuses on providing customers with the optimal mix of value, selection, service and convenience, will enable us to resume positive sales growth and create value for our shareholders.”
Quarterly Cash Dividend
The Company’s Board of Directors has declared a quarterly cash dividend of
Guidance
For the fiscal 2016 second quarter, the Company expects same store sales to be in the negative low single-digit to flat range and earnings to be in the range of
Store Openings
During the first quarter of fiscal 2016, the Company closed four stores, one of which was part of a relocation, ending the quarter with 434 stores in operation. During the fiscal 2016 second quarter, the Company anticipates opening two new stores and closing one store. For the fiscal 2016 full year, the Company currently anticipates opening approximately five to eight new stores and closing approximately ten stores.
Conference Call Information
The Company will host a conference call and audio webcast today,
About
Big 5 is a leading sporting goods retailer in the western
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 and other factors that 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 and the U.S. financial and credit markets, fluctuations in consumer holiday spending patterns, breach of data security or other unauthorized disclosure of sensitive personal or confidential information, the competitive environment in the sporting goods industry in general and in Big 5’s specific market areas, inflation, product availability and growth opportunities, changes in the current market for (or regulation of) firearm-related products, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, lower than expected profitability of Big 5’s e-commerce platform or cannibalization of sales from Big 5’s existing store base which could occur as a result of operating the e-commerce platform, litigation risks, stockholder campaigns and proxy contests, disruption in product flow, changes in interest rates, credit availability, higher expense associated with sources of credit resulting from uncertainty in financial markets and economic conditions in general. Those and other risks and uncertainties are more fully described in Big 5’s filings with the
FINANCIAL TABLES FOLLOW
| BIG 5 SPORTING GOODS CORPORATION | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands, except share amounts) | ||||||||||
| April 3, 2016 |
January 3, 2016 |
|||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash | $ | 6,446 | $ | 7,119 | ||||||
| Accounts receivable, net of allowances of $53 and $61, respectively | 12,271 | 14,180 | ||||||||
| Merchandise inventories, net | 286,431 | 299,446 | ||||||||
| Prepaid expenses | 12,924 | 12,185 | ||||||||
| Total current assets | 318,072 | 332,930 | ||||||||
| Property and equipment, net | 80,765 | 82,036 | ||||||||
| Deferred income taxes (1) | 20,839 | 23,402 | ||||||||
| Other assets, net of accumulated amortization of $1,288 and $1,244, respectively | 2,304 | 2,228 | ||||||||
| Goodwill | 4,433 | 4,433 | ||||||||
| Total assets | $ | 426,413 | $ | 445,029 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 85,475 | $ | 89,961 | ||||||
| Accrued expenses | 58,649 | 69,524 | ||||||||
| Current portion of capital lease obligations | 1,342 | 1,435 | ||||||||
| Total current liabilities | 145,466 | 160,920 | ||||||||
| Deferred rent, less current portion | 18,815 | 19,516 | ||||||||
| Capital lease obligations, less current portion | 2,095 | 2,392 | ||||||||
| Long-term debt | 56,569 | 54,846 | ||||||||
| Other long-term liabilities | 8,721 | 8,524 | ||||||||
| Total liabilities | 231,666 | 246,198 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity: | ||||||||||
| Common stock, $0.01 par value, authorized 50,000,000 shares; issued 24,671,787 and 24,562,799 shares, respectively; outstanding 22,023,070 and 21,917,982 shares, respectively | 247 | 246 | ||||||||
| Additional paid-in capital | 112,046 | 112,236 | ||||||||
| Retained earnings | 115,140 | 118,998 | ||||||||
| Less: Treasury stock, at cost; 2,648,717 and 2,644,817 shares, respectively | (32,686 | ) | (32,649 | ) | ||||||
| Total stockholders' equity | 194,747 | 198,831 | ||||||||
| Total liabilities and stockholders' equity | $ | 426,413 | $ | 445,029 | ||||||
| (1) In the first quarter of fiscal 2016, the Company elected to retrospectively early adopt ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires that deferred tax liabilities and assets be classified as non-current in a classified balance sheet. Accordingly, deferred tax assets in the amount of $11.1 million, which were previously classified as current assets as of January 3, 2016, were reclassified to non-current deferred income tax assets to conform to current year presentation. | ||||||||||
| BIG 5 SPORTING GOODS CORPORATION | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (Unaudited) | |||||||
| (In thousands, except per share data) | |||||||
| 13 Weeks Ended | |||||||
| April 3, 2016 |
March 29, 2015 |
||||||
| Net sales | $ | 234,528 | $ | 243,555 | |||
| Cost of sales | 163,563 | 166,871 | |||||
| Gross profit | 70,965 | 76,684 | |||||
| Selling and administrative expense (1) | 71,219 | 72,462 | |||||
| Operating (loss) income | (254 | ) | 4,222 | ||||
| Interest expense | 452 | 403 | |||||
| (Loss) income before income taxes | (706 | ) | 3,819 | ||||
| Income taxes (2) | 413 | 1,505 | |||||
| Net (loss) income (1) (2) | $ | (1,119 | ) | $ | 2,314 | ||
| Earnings per share: | |||||||
| Basic | $ | (0.05 | ) | $ | 0.11 | ||
| Diluted (1) (2) | $ | (0.05 | ) | $ | 0.11 | ||
| Dividends per share | $ | 0.125 | $ | 0.10 | |||
| Weighted-average shares of common stock outstanding: | |||||||
| Basic | 21,583 | 21,809 | |||||
| Diluted | 21,583 | 21,999 | |||||
| (1) In the first quarter of fiscal 2015, the Company recorded pre-tax charges of $0.4 million and $0.5 million related to a legal settlement and a publicly-disclosed proxy contest, respectively. These charges reduced net income by $0.6 million, or $0.03 per diluted share. | |||||||
| (2) In the first quarter of fiscal 2016, the Company recorded a charge of $0.7 million to write-off deferred tax assets related to share-based compensation. This charge increased net loss by $0.03 per share. | |||||||
Contact:Big 5 Sporting Goods Corporation Barry Emerson Sr. Vice President and Chief Financial Officer (310) 536-0611ICR, Inc. John Mills Partner (646) 277-1254