- EPS of
$0.29 for FY 2022 Third Quarter - Declares Quarterly Cash Dividend of
$0.25 per Share
“Although we anticipate conditions will continue to be challenging, we feel very well positioned for the holiday period. We have a great product assortment with healthy inventory levels, particularly compared to last year when supply chain issues impacted our ability to maximize sales, and we believe we are well-equipped to navigate the current environment.”
Net sales for the fiscal 2022 third quarter were
Gross profit for the fiscal 2022 third quarter was
Overall selling and administrative expense for the quarter increased by
Net income for the third quarter of fiscal 2022 was
For the 39-week period ended
Adjusted EBITDA was
Balance Sheet
The Company ended the fiscal 2022 third quarter with no borrowings under its credit facility and with cash and cash equivalents of
Quarterly Cash Dividend
The Company’s Board of Directors has declared a quarterly cash dividend of
Fourth Quarter Guidance
For the fiscal 2022 fourth quarter, the Company expects same store sales to decrease in the high single-digit to low double-digit range compared to the fiscal 2021 fourth quarter and to increase in the low single-digit range versus the pre-pandemic fiscal 2019 fourth quarter, on a comparable day basis. The Company’s same store sales guidance reflects an expectation that macroeconomic headwinds will continue to impact consumer discretionary spending over the balance of the fourth quarter. Fiscal 2022 fourth quarter earnings per diluted share is expected in the range of
Store Openings
The Company currently has 431 stores in operation, which reflects one store relocation and one store closure in the third quarter and one store opening in the fourth quarter to date. During the remainder of fiscal 2022, the Company expects to open one additional store.
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. These risks and uncertainties include, among other things, the economic impacts of COVID-19, including any potential variants, on Big 5’s business operations, including as a result of regulations that may be issued in response to COVID-19, changes in the consumer spending environment, fluctuations in consumer holiday spending patterns, increased competition from e-commerce retailers, 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, a reduction or loss of product from a key supplier, disruption in product flow, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, increases in labor and benefit-related expense, changes in laws or regulations, including those related to tariffs and duties, public health issues (including those caused by COVID-19 or any potential variants), impacts from civil unrest or widespread vandalism, 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, risks related to Big 5’s historically leveraged financial condition, 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
Non-GAAP Financial Measures
In addition to reporting our financial results in accordance with generally accepted accounting principles ("GAAP"), we are providing non-GAAP adjusted earnings before interest, income tax expense, depreciation and amortization (“EBITDA”) and other adjustments (“Adjusted EBITDA”). EBITDA and Adjusted EBITDA are not prepared in accordance with GAAP and exclude certain items presented below. We use EBITDA and Adjusted EBITDA internally for forecasting purposes and as factors to evaluate our operating performance. We believe that Adjusted EBITDA provides useful information to both management and investors by excluding certain expenses, gains and losses that may not be indicative of core operating results and business outlook. While we believe that EBITDA and Adjusted EBITDA can be useful to investors in evaluating our period-to-period operating results, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP. In addition, our definition or calculation of these non-GAAP measures may differ from similarly titled measures used by other companies, limiting the usefulness of this financial measure for comparison to other companies. We believe the GAAP measure that is most comparable to non-GAAP EBITDA and Adjusted EBITDA is net income, and a reconciliation of our non-GAAP EBITDA and Adjusted EBITDA to GAAP net income is provided below.
| 13 Weeks Ended | 39 Weeks Ended | |||||||||
2022 |
2021 |
2022 |
2021 |
|||||||
| (In thousands) | ||||||||||
| GAAP net income (as reported) | $ | 6,369 | $ | 24,131 | $ | 24,406 | $ | 82,480 | ||
| + Interest (as reported) | 69 | 175 | 389 | 701 | ||||||
| + Income tax expense (as reported) | 1,940 | 8,524 | 6,437 | 25,942 | ||||||
| + Depreciation and amortization (as reported) | 4,594 | 4,473 | 13,424 | 13,121 | ||||||
| EBITDA | $ | 12,972 | $ | 37,303 | $ | 44,656 | $ | 122,244 | ||
| + Revaluation of workers’ compensation reserves due to change in claims assessment methodology | — | — | 1,039 |
— |
||||||
| - Elimination of liability for an employment agreement | — | — | — | (995 | ) | |||||
| - Gain on recovery of insurance settlement related to civil unrest | — | — | — | (709 | ) | |||||
| Adjusted EBITDA | $ | 12,972 | $ | 37,303 | $ | 45,695 | $ | 120,540 | ||
FINANCIAL TABLES FOLLOW
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| (In thousands, except share amounts) | ||||||
2022 |
2022 |
|||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 34,439 | $ | 97,420 | ||
| Accounts receivable, net of allowances of |
9,333 | 13,654 | ||||
| Merchandise inventories, net | 316,464 | 279,981 | ||||
| Prepaid expenses | 16,140 | 16,293 | ||||
| Total current assets | 376,376 | 407,348 | ||||
| Operating lease right-of-use assets, net | 285,481 | 270,110 | ||||
| Property and equipment, net | 57,778 | 60,401 | ||||
| Deferred income taxes | 10,452 | 12,097 | ||||
| Other assets, net of accumulated amortization of |
5,193 | 3,997 | ||||
| Total assets | $ | 735,280 | $ | 753,953 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 84,626 | $ | 104,359 | ||
| Accrued expenses | 67,765 | 85,041 | ||||
| Current portion of operating lease liabilities | 78,589 | 76,882 | ||||
| Current portion of finance lease liabilities | 3,446 | 3,518 | ||||
| Total current liabilities | 234,426 | 269,800 | ||||
| Operating lease liabilities, less current portion | 216,445 | 204,134 | ||||
| Finance lease liabilities, less current portion | 5,449 | 6,456 | ||||
| Other long-term liabilities | 7,020 | 6,254 | ||||
| Total liabilities | 463,340 | 486,644 | ||||
| Commitments and contingencies | ||||||
| Stockholders' equity: | ||||||
| Common stock, |
264 | 260 | ||||
| Additional paid-in capital | 125,854 | 124,909 | ||||
| Retained earnings | 200,079 | 192,261 | ||||
| Less: |
(54,257 | ) | (50,121 | ) | ||
| Total stockholders' equity | 271,940 | 267,309 | ||||
| Total liabilities and stockholders' equity | $ | 735,280 | $ | 753,953 | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
| (Unaudited) | |||||||||
| (In thousands, except per share data) | |||||||||
| 13 Weeks Ended | 39 Weeks Ended | ||||||||
2022 |
2021 |
2022 |
2021 |
||||||
| Net sales | $ | 261,445 | $ | 289,637 | $ | 757,226 | $ | 888,463 | |
| Cost of sales | 174,862 | 181,660 | 495,844 | 555,670 | |||||
| Gross profit | 86,583 | 107,977 | 261,382 | 332,793 | |||||
| Selling and administrative expense | 78,205 | 75,147 | 230,150 | 223,670 | |||||
| Operating income | 8,378 | 32,830 | 31,232 | 109,123 | |||||
| Interest expense | 69 | 175 | 389 | 701 | |||||
| Income before income taxes | 8,309 | 32,655 | 30,843 | 108,422 | |||||
| Income tax expense | 1,940 | 8,524 | 6,437 | 25,942 | |||||
| Net income | $ | 6,369 | $ | 24,131 | $ | 24,406 | $ | 82,480 | |
| Earnings per share: | |||||||||
| Basic | $ | 0.30 | $ | 1.11 | $ | 1.13 | $ | 3.81 | |
| Diluted | $ | 0.29 | $ | 1.07 | $ | 1.10 | $ | 3.66 | |
| Weighted-average shares of common stock outstanding: | |||||||||
| Basic | 21,586 | 21,798 | 21,647 | 21,654 | |||||
| Diluted | 21,930 | 22,534 | 22,121 | 22,525 | |||||
Contact:
Executive Vice President and Chief Financial Officer
(310) 536-0611
Managing Director
(646) 277-1263
Source: Big 5 Sporting Goods Corporation