Table of Contents
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
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
August 1, 2007
BIG 5 SPORTING GOODS CORPORATION
(Exact name of registrant as specified in charter)
| Delaware (State or Other Jurisdiction of Incorporation) |
000-49850 (Commission File Number) |
95-4388794 (IRS Employer Identification No.) |
||
| 2525 East El Segundo Boulevard, El Segundo, California (Address of principal executive offices) |
90245 (Zip Code) |
Registrant’s 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):
o Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (7 CFR 240.13e-4(c))
TABLE OF CONTENTS
| Item 2.02. Results of Operations and Financial Condition | ||||||||
| Item 9.01. Financial Statements and Exhibits | ||||||||
| SIGNATURES | ||||||||
| EXHIBIT 99.1 | ||||||||
Table of Contents
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
August 1, 2007, Big 5 Sporting Goods Corporation issued a press release in which, among
other things, it reported financial results for its fiscal 2007 second quarter. The press release
is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
| Exhibit No. | Description | |
99.1
|
Press release, dated August 1, 2007, issued by Big 5 Sporting Goods Corporation. |
Table of Contents
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.
| BIG 5 SPORTING GOODS CORPORATION | ||||||
Date:
August 1, 2007 |
||||||
| /s/ Steven G. Miller | ||||||
| Steven G. Miller | ||||||
| President and Chief Executive Officer | ||||||
Exhibit 99.1
Contact:
Big 5 Sporting Goods Corporation
Barry Emerson
Sr. Vice President and Chief Financial Officer
(310) 536-0611
Big 5 Sporting Goods Corporation
Barry Emerson
Sr. Vice President and Chief Financial Officer
(310) 536-0611
Integrated Corporate Relations, Inc.
John Mills
Senior Managing Director
(310) 954-1105
John Mills
Senior Managing Director
(310) 954-1105
BIG 5 SPORTING GOODS CORPORATION ANNOUNCES FISCAL 2007 SECOND QUARTER RESULTS
| • | Second Quarter Diluted Earnings Per Share of $0.26 | |
| • | Declares Regular Quarterly Cash Dividend |
EL SEGUNDO, Calif., August 1, 2007 — Big 5 Sporting Goods Corporation (NASDAQ: BGFV), a leading
sporting goods retailer, today reported financial results for the fiscal 2007 second quarter ended
July 1, 2007.
For the fiscal 2007 second quarter, net sales increased $6.0 million, or 2.9%, to $217.8 million
from net sales of $211.8 million for the second quarter of fiscal 2006. Same store sales declined
0.2% for the second quarter, representing the Company’s first quarterly decrease in same store
sales in over eleven years.
Gross profit for the fiscal 2007 second quarter increased to $77.1 million from $76.7 million in
the second quarter of the prior year. The Company’s gross profit margin was 35.4% in the fiscal
2007 second quarter versus 36.2% in the second quarter of the prior year. The gross margin
performance reflected product margins generally in-line with the prior year and a $0.4 million
decrease in distribution center costs as a result of operational efficiencies realized in the
Company’s new distribution center, offset by a $0.9 million reduction in inventory cost
capitalization from the second quarter of last year.
Selling and administrative expenses as a percentage of net sales were 28.3% in the fiscal 2007
second quarter compared to 27.7% in the second quarter of last year, primarily reflecting softness
in the Company’s sales and an increase in administrative expenses to support the Company’s overall
growth and financial reporting initiatives.
Net income for the second quarter of fiscal 2007 was $5.9 million, or $0.26 per diluted share,
versus net income of $7.4 million, or $0.33 per diluted share, for the second quarter of fiscal
2006.
For the twenty-six week period ended July 1, 2007, net sales increased $15.9 million, or 3.8%, to
$434.9 million from net sales of $419.0 million in the same period last year. Same store sales
increased 0.3% in the first 26 weeks of fiscal 2007 versus the same period last year. Net income
was $13.5 million, or $0.59 per diluted share, for the first 26 weeks of fiscal 2007, compared to
net income of $13.4 million, or $0.59 per diluted share, in the same period last year.
“As we previously announced, a general softness in the macro-economic environment impacted our
sales throughout the second quarter,” said Steven G. Miller, the Company’s Chairman, President and
Chief Executive Officer. “While we increased our promotional activity slightly and generated
positive same store sales in May and June, those increases were not enough to offset weakness
earlier in the quarter. From a product standpoint, our hardgoods category comped slightly positive
during the second quarter, our footwear category was slightly down and apparel was our softest
category, comping down in the low single digits.
“The start of the third quarter continues to be affected by the challenging consumer environment as
well as soft sales comparisons of product categories that perform best in warmer weather due
largely to significantly cooler weather than last year in many of our west coast markets,”
continued Mr. Miller. “We are cautiously optimistic about our opportunities for the remainder of
the quarter. We have a strong promotional plan and believe we are well-positioned from a product
offering and inventory perspective, and we are encouraged by the strength we are seeing in a number
of product categories not impacted by the cooler temperatures. We remain confident in the
effectiveness of our overall business model and continue to look for ways to enhance our top and
bottom line performance in the current environment.”
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 September 14, 2007 to stockholders of record as of August 31, 2007.
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 September 14, 2007 to stockholders of record as of August 31, 2007.
Share Repurchases
During the 2007 second fiscal quarter and third fiscal quarter through July 31, 2007, the Company repurchased 215,100 shares of its common stock for a total expenditure of $5.0 million. Since the inception of the Company’s share repurchase program, which had an initial authorization of $15.0 million, the Company has repurchased a total of 280,110 shares, for a total expenditure of $6.3 million.
During the 2007 second fiscal quarter and third fiscal quarter through July 31, 2007, the Company repurchased 215,100 shares of its common stock for a total expenditure of $5.0 million. Since the inception of the Company’s share repurchase program, which had an initial authorization of $15.0 million, the Company has repurchased a total of 280,110 shares, for a total expenditure of $6.3 million.
Guidance
For the third quarter of fiscal 2007, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of $0.27 to $0.35. Third quarter guidance assumes that sales will continue to be challenged by macro-economic issues affecting the consumer environment and, compared to the prior year, reflects higher administrative expenses to support the Company’s overall growth and financial reporting initiatives. For the fiscal 2007 full year, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of $1.22 to $1.42. Full year guidance assumes that sales will continue to be challenged by macro-economic issues affecting the consumer environment 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 overall growth and financial reporting initiatives.
For the third quarter of fiscal 2007, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of $0.27 to $0.35. Third quarter guidance assumes that sales will continue to be challenged by macro-economic issues affecting the consumer environment and, compared to the prior year, reflects higher administrative expenses to support the Company’s overall growth and financial reporting initiatives. For the fiscal 2007 full year, the Company expects to realize same store sales growth in the low single-digit negative to low single-digit positive range and earnings per diluted share in the range of $1.22 to $1.42. Full year guidance assumes that sales will continue to be challenged by macro-economic issues affecting the consumer environment 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 overall growth and financial reporting initiatives.
Store Openings
During the fiscal 2007 second quarter, the Company opened four new stores, including a relocation of a store that the Company had closed during the first quarter, bringing its total store count as of the end of the second quarter to 348 stores. The Company anticipates opening five new stores, including one relocation, during the fiscal 2007 third quarter. The Company anticipates opening approximately 20 new stores, net of relocations, during fiscal 2007.
During the fiscal 2007 second quarter, the Company opened four new stores, including a relocation of a store that the Company had closed during the first quarter, bringing its total store count as of the end of the second quarter to 348 stores. The Company anticipates opening five new stores, including one relocation, during the fiscal 2007 third quarter. The Company anticipates opening approximately 20 new stores, net of relocations, during fiscal 2007.
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 second 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.
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 second 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 348 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.
Big 5 is a leading sporting goods retailer in the United States, operating 348 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 and its Quarterly Report on Form 10-Q for the
fiscal quarter ended April 1, 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
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)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
| July 1, | December 31, | |||||||
| 2007 | 2006 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 8,102 | $ | 5,145 | ||||
Trade and other receivables, net of allowances of $255 and $314, respectively |
12,862 | 13,146 | ||||||
Merchandise inventories |
252,082 | 228,692 | ||||||
Prepaid expenses |
11,225 | 9,857 | ||||||
Deferred income taxes |
9,390 | 9,345 | ||||||
Total current assets |
293,661 | 266,185 | ||||||
Property and equipment, net of accumulated depreciation of $99,811
and $92,236, respectively |
88,058 | 88,159 | ||||||
Deferred income taxes |
8,868 | 7,795 | ||||||
Other assets, net of accumulated amortization of $216 and $590, respectively |
1,082 | 1,107 | ||||||
Goodwill |
4,433 | 4,433 | ||||||
Total assets |
$ | 396,102 | $ | 367,679 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 113,136 | $ | 96,128 | ||||
Accrued expenses |
55,479 | 66,513 | ||||||
Current portion of capital lease obligations |
1,916 | 1,995 | ||||||
Total current liabilities |
170,531 | 164,636 | ||||||
Deferred rent, less current portion |
19,939 | 19,735 | ||||||
Capital lease obligations, less current portion |
2,725 | 2,992 | ||||||
Long-term debt |
88,830 | 77,086 | ||||||
Other long-term liabilities |
2,896 | 2,770 | ||||||
Total liabilities |
284,921 | 267,219 | ||||||
Commitments and contingencies |
||||||||
Stockholders’ equity: |
||||||||
Common stock, $0.01 par value, authorized 50,000,000 shares;
issued 22,887,887 and 22,848,887 shares, respectively;
outstanding 22,693,567 and 22,670,367 shares, respectively |
228 | 228 | ||||||
Additional paid-in capital |
89,610 | 87,956 | ||||||
Retained earnings |
23,572 | 14,126 | ||||||
Less: Treasury stock, at cost; 194,320 and 178,520 shares, respectively |
(2,229 | ) | (1,850 | ) | ||||
Total stockholders’ equity |
111,181 | 100,460 | ||||||
Total liabilities and stockholders’ equity |
$ | 396,102 | $ | 367,679 | ||||
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| 13 Weeks Ended | 26 Weeks Ended | |||||||||||||||
| July 1, 2007 | July 2, 2006 | July 1, 2007 | July 2, 2006 | |||||||||||||
Net sales |
$ | 217,846 | $ | 211,806 | $ | 434,853 | $ | 418,987 | ||||||||
Cost of goods sold, buying and occupancy, excluding
depreciation and amortization shown separately
below |
140,784 | 135,094 | 279,747 | 268,848 | ||||||||||||
Gross profit |
77,062 | 76,712 | 155,106 | 150,139 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling and administrative |
61,601 | 58,571 | 121,473 | 115,963 | ||||||||||||
Depreciation and amortization |
4,166 | 4,004 | 8,372 | 8,404 | ||||||||||||
Total operating expenses |
65,767 | 62,575 | 129,845 | 124,367 | ||||||||||||
Operating income |
11,295 | 14,137 | 25,261 | 25,772 | ||||||||||||
Interest expense |
1,473 | 1,869 | 2,922 | 3,698 | ||||||||||||
Income before income taxes |
9,822 | 12,268 | 22,339 | 22,074 | ||||||||||||
Income taxes |
3,879 | 4,837 | 8,809 | 8,700 | ||||||||||||
Net income |
$ | 5,943 | $ | 7,431 | $ | 13,530 | $ | 13,374 | ||||||||
Dividends per share declared |
$ | 0.09 | $ | 0.09 | $ | 0.18 | $ | 0.16 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.26 | $ | 0.33 | $ | 0.60 | $ | 0.59 | ||||||||
Diluted |
$ | 0.26 | $ | 0.33 | $ | 0.59 | $ | 0.59 | ||||||||
Weighted-average shares of common stock outstanding: |
||||||||||||||||
Basic |
22,691 | 22,707 | 22,683 | 22,705 | ||||||||||||
Diluted |
22,847 | 22,807 | 22,825 | 22,805 | ||||||||||||