e8vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 10, 2005
BIG 5 SPORTING GOODS CORPORATION
(Exact name of registrant as specified in charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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000-49850
(Commission File Number)
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95-4388794
(IRS Employer
Identification No.) |
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2525 East El Segundo Boulevard,
El Segundo California
(Address of principal executive offices)
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90245
(Zip Code) |
Registrants telephone number, including area code: (310) 536-0611
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (7 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
The
information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is
furnished pursuant to Item 2.02, Results of Operations and Financial Condition and shall not be
deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the Exchange Act) or otherwise subject to liability under that Section, except as specifically
incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act.
On November 10, 2005, Big 5 Sporting Goods Corporation issued a press release in which it
reported financial results for its fiscal 2005 third quarter and the fiscal year-to-date period
ended October 2, 2005 and certain other matters. The press release is furnished as Exhibit 99.1 to
this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
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Exhibit No. |
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Description |
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99.1 |
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Press release, dated November 10, 2005, issued by Big 5 Sporting Goods Corporation. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BIG 5 SPORTING GOODS CORPORATION
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(Registrant) |
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Date: November 10, 2005 |
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/s/ Barry D. Emerson
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Barry D. Emerson |
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Senior Vice President, Chief Financial Officer and
Treasurer |
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exv99w1
Contact:
John Mills
Integrated Corporate Relations, Inc.
(310) 395-2215
BIG 5 SPORTING GOODS CORPORATION ANNOUNCES FISCAL 2005 THIRD
QUARTER RESULTS
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39th Consecutive Quarter of Same Store Sales Growth |
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Declares Quarterly Cash Dividend |
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Conference Call Scheduled for Today at 2:00 p.m. (Pacific); Simultaneous Webcast at
www.big5sportinggoods.com |
EL SEGUNDO, Calif. November 10, 2005 Big 5 Sporting Goods Corporation (NASDAQ: BGFV), a
leading sporting goods retailer, today reported financial results for the fiscal 2005 third quarter
ended October 2, 2005.
For the fiscal 2005 third quarter, net sales increased by $8.8 million, or 4.5%, to $206.8 million
from net sales, as previously restated, of $198.0 million in the third quarter of 2004. Same store
sales increased 3.8% during the third fiscal quarter versus the same 13-week calendar period last
year, representing the Companys 39th consecutive quarterly increase in same store sales
over comparable prior periods. On a fiscal quarter basis, same store sales increased 1.2% during
the third quarter versus the third quarter of fiscal 2004. The difference in same store sales
comparisons was due to fiscal 2005 being a 52-week year and fiscal 2004 being a 53-week year and
the resulting calendar shift of pre-Fourth of July holiday business out of the fiscal 2005 third
quarter. Net income for the fiscal 2005 third quarter was $7.2 million, or $0.32 per diluted
share, compared with previously restated net income of $8.5 million, or $0.37 per diluted share,
for the fiscal 2004 third quarter.
Third quarter fiscal 2005 results included charges totaling approximately $1.9 million (pretax), or
$0.05 per diluted share, associated with legal, audit and other fees related to the Companys
restatement of prior reported financial statements. Third quarter expenses also reflected an
increase of approximately $2.3 million in distribution center expenses, of which approximately $1.5
million (pretax), or $0.04 per diluted share, was directly attributable to the Companys transition
to its new distribution center. The increase related to the transition to the new distribution
center was generally in line with the Companys expectations for the third quarter.
Net income comparisons for the third quarter were affected by the application of revised
inventory cost capitalization methodologies adopted as part of the prior restatement. This
increased fiscal 2005 third quarter pretax profit by $1.4 million, or $0.04 per diluted share,
compared to the same period
last year. Additionally, third quarter results benefited from the Companys recording of $1.8
million
Big 5 Sporting Goods
2-2-2
in proceeds from the settlement of a claim related to the required relocation of one of the
Companys stores following an eminent domain action by a city redevelopment agency, which increased
the Companys net income by $0.05 per diluted share.
For the thirty-nine week period ended October 2, 2005, net sales increased by $30.5 million, or
5.4%, to $595.1 million from restated net sales of $564.6 million in the same period last year.
Same store sales increased 2.8% versus the same thirty-nine week calendar period in fiscal 2004.
On a fiscal quarter basis, same store sales increased 2.2% during the first three quarters of
fiscal 2005 versus the first three quarters of fiscal 2004. Net income was $19.8 million, or $0.87
per diluted share, for the first thirty-nine weeks of fiscal 2005, compared to restated net income
of $24.1 million, or $1.06 per diluted share, in the same period last year. Results for the first
nine months of fiscal 2005 include an increase of approximately $4.3 million in distribution center
expenses, of which approximately $2.2 million (pretax), or $0.06 per diluted share, was directly
attributable to the Companys transition to its new distribution center, and costs of approximately
$3.8 million, or $0.10 per diluted share, associated with legal, audit and other expenses for the
Companys restatement. Results for the first nine months of fiscal 2004 include a second quarter
pretax charge of $0.8 million, or $0.02 per diluted share, associated with the redemption of $15.0
million principal amount of the Companys 10.875% senior notes.
We are pleased with our sales performance during the third quarter, said Steven G. Miller, the
Companys Chairman, President and Chief Executive Officer. The shift of our pre-Fourth of July
holiday business out of our third fiscal quarter this year, when it had been in the third quarter
last year, significantly affected comparability between our fiscal periods. Earnings results also
continued to be impacted by unusual items, including the costs of the restatement and the
transition to our new distribution center, as well as the revision and refinement of our accounting
methodologies. We are very encouraged that sales trends for the year have improved over each
quarter and this momentum has continued into the fourth quarter. Our October period comp store
sales performance was our strongest monthly comparison of 2005, measured on a calendar-day to
calendar-day basis. We believe that we are well positioned for the holiday season.
EPS
Guidance
Fiscal 2004 was a 53-week year, with the fourth quarter having fourteen weeks, while fiscal 2005 is
a 52-week year, with the fourth quarter having thirteen weeks. The fourth quarter sales guidance
discussed below is provided on a thirteen-week calendar-day to calendar-day basis, and the
full-year sales guidance discussed below is provided on a 52-week calendar-day to calendar-day
basis. The Company expects to realize same store sales growth in the low to mid-single digit range
for the fourth quarter of fiscal 2005, resulting in earnings per diluted share in the range of
$0.40 to $0.44. This includes anticipated charges of approximately
$0.06 to $0.07 per diluted share for
expenses directly attributable to the Companys transition to its new distribution center. For the
2005 fiscal year, the Company expects to realize same store sales growth in the low single digit
range, resulting in earnings per diluted share in the range of $1.27 to $1.31, including charges of
approximately $0.12 to
$0.13 per diluted share for expenses directly attributable to the Companys
transition to its new distribution center and approximately $0.10 per diluted share associated with legal, audit and other expenses
related to the restatement. The Company expects 2005 fiscal year earnings per diluted share of
$1.49 to $1.54, excluding expenses directly attributable to the Companys transition to its new
distribution center and expenses related to the restatement.
Big 5 Sporting Goods
3-3-3
Declaration
of Quarterly Cash Dividend
The Company also announced that its Board of Directors has again declared a quarterly cash
dividend of $0.07 per share of outstanding common stock, which will be paid on December 15, 2005 to
stockholders of record as of December 1, 2005. The Board of Directors of the Company initiated a
quarterly cash dividend, at an annual rate of $0.28 per share, in the fourth quarter of fiscal
2004.
Store
Openings
The Company opened 4 new stores and closed one store during the fiscal 2005 third quarter. During
the fourth quarter to date, the Company has opened 4 new stores, bringing its current total store
count to 318. The Company expects to open a total of 15 net new stores during fiscal 2005,
bringing its expected total year-end store count to 324 stores.
New
Distribution Center
Construction has been substantially completed on the Companys new distribution center located in
Riverside, California, and the Companys transition to this facility has been proceeding on
schedule. The Company has been receiving product at its new distribution center for two months and
in early October 2005, the Company began shipping product from the new distribution center and
moving product from its existing distribution center to the new facility. The Company expects to
complete the transition to its new distribution center during the first quarter of fiscal 2006.
Conference
Call Information
Big 5 will host a conference call and audio webcast today at 2:00 p.m. (Pacific) to discuss its
financial results for the third quarter of fiscal 2005. The webcast will be available at
www.big5sportinggoods.com and archived for three months. 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 318 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 5s 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 5s 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 5s specific market areas, inflation, product availability and
growth opportunities, seasonal fluctuations, weather conditions, changes in costs of goods, changes
in interest rates and economic conditions in general. Those and other risks are more fully
described in Big 5s filings with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for the fiscal year ended January 2, 2005 and its Quarterly Report on Form 10-Q
for the quarter ended July 3, 2005. 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 CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
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Restated |
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13 Weeks Ended |
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13 Weeks Ended |
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October 2, 2005 |
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September 26, 2004 |
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Net sales |
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$ |
206,834 |
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$ |
197,997 |
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Cost of goods sold, buying and occupancy, excluding
depreciation and amortization, shown separately below |
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133,297 |
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127,236 |
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Gross profit |
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73,537 |
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70,761 |
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Selling and administrative |
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57,774 |
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52,089 |
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Depreciation and amortization |
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3,784 |
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3,059 |
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Operating income |
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11,979 |
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15,613 |
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Other expense (income) |
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(1,409 |
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Interest expense, net |
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1,425 |
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1,628 |
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Income before income taxes |
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11,963 |
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13,985 |
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Income tax |
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4,721 |
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5,508 |
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Net income |
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$ |
7,242 |
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$ |
8,477 |
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Earnings per share: |
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Basic |
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$ |
0.32 |
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$ |
0.37 |
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Diluted |
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$ |
0.32 |
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$ |
0.37 |
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Shares used to calculate earnings per share: |
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Basic |
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22,678 |
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22,670 |
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Diluted |
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22,809 |
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22,781 |
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BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
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Restated |
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39 Weeks Ended |
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39 Weeks Ended |
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October 2, 2005 |
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September 26, 2004 |
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Net sales |
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$ |
595,065 |
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$ |
564,619 |
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Cost of goods sold, buying and occupancy, excluding
depreciation and amortization, shown separately below |
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381,251 |
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357,567 |
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Gross profit |
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213,814 |
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207,052 |
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Selling and administrative |
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167,954 |
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152,440 |
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Depreciation and amortization |
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10,718 |
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8,918 |
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Operating income |
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35,142 |
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45,694 |
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Premium and unamortized financing fees
related to redemption of debt |
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792 |
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Other expense (income) |
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(1,409 |
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Interest expense, net |
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3,849 |
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5,202 |
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Income before income taxes |
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32,702 |
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39,700 |
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Income tax |
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12,900 |
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15,636 |
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Net income |
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$ |
19,802 |
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$ |
24,064 |
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Earnings per share: |
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Basic |
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$ |
0.87 |
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$ |
1.06 |
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Diluted |
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$ |
0.87 |
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$ |
1.06 |
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Shares used to calculate earnings per share: |
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Basic |
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22,678 |
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22,667 |
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Diluted |
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22,808 |
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22,788 |
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BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
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October 2, |
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January 2, |
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2005 |
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2005 |
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Assets |
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Current assets
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Cash |
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$ |
5,242 |
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$ |
6,746 |
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Merchandise inventory |
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229,190 |
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206,213 |
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Other current assets |
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23,461 |
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24,125 |
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Total current assets |
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257,893 |
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237,084 |
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Property and equipment, net |
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83,852 |
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63,837 |
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Other long-term assets |
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12,880 |
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11,756 |
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Total assets |
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$ |
354,625 |
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$ |
312,677 |
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Liabilities and Stockholders Equity |
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Accounts payable |
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$ |
102,154 |
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$ |
98,298 |
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Other current liabilities |
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65,869 |
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66,610 |
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Deferred rent and other long-term liabilities |
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23,846 |
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18,825 |
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Long-term debt |
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93,439 |
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74,668 |
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Total liabilities |
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285,308 |
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258,401 |
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Net stockholders equity |
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69,317 |
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54,276 |
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Total liabilities and stockholders equity |
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$ |
354,625 |
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$ |
312,677 |
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BIG 5 SPORTING GOODS CORPORATION
Regulation G Reconciliation
(Unaudited)
The Companys earnings per diluted share (EPS) guidance for fiscal 2005 excludes expenses
related to the Companys transition to its new distribution center and legal, audit and other
expenses related to the Companys restatement of prior period financial statements. The Company
believes the use of adjusted EPS for guidance for fiscal 2005 will provide additional insight into
the Companys operating results as compared to estimated earnings per diluted share for fiscal 2005
due to the expenses the Company expects to incur related to the Companys transition to its new
distribution center and legal, audit and other expenses related to the Companys restatement of
prior period financial statements. The Company will also use this adjusted reporting internally to
evaluate its operating performance on that same basis. The following table sets forth a
reconciliation of guidance net income per diluted share (calculated in accordance with GAAP) to
adjusted net income per diluted share excluding expenses related to the Companys transition to its
new distribution center and legal, audit and other expenses related to the Companys restatement of
prior period financial statements:
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52 Weeks Ended |
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January 1, 2006 |
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Guidance earnings per diluted share in accordance with GAAP |
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$ |
1.27 - 1.31 |
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Guidance distribution center transition expenses per diluted share |
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0.12 - 0.13 |
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Guidance legal, audit and other expenses related to restatement per diluted share |
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0.10 - 0.10 |
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Guidance adjusted earnings per diluted share excluding distribution center transition
expenses and legal, audit and other expenses related to restatement |
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$ |
1.49 - 1.54 |
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