Golfsmith International, Inc. reported net revenue for the year ended January 3, 2004 increased 18% to $257.7 million, added 12 stores and began a series of specialty service programs designed to capture and retain customers.
“This past year was quite an accomplishment as we strengthened our national multi-channel retail presence,” said Jim Thompson, president and chief executive officer of Golfsmith, a portfolio company of First Atlantic Capital, Ltd. “We are pursuing a disciplined approach to growth, and our results indicate our strategy is working.”
For fourth quarter 2003, Golfsmith reported that net revenue of $61.5 million, operating income of $1.2 million and a net loss of $1.0 million. This compares with net revenue of $44.5 million, an operating loss of $6.2 million (including a $6.0 million non-recurring and non-cash stock compensation expense related to the October 2002 sale of the company to First Atlantic Capital) and a net loss of $12.2 million for the fourth quarter of fiscal 2002 (including an $8.0 million non-recurring loss on debt extinguishment related to the October 2002 sale of the company to First Atlantic Capital).
Same-store sales, defined as sales from stores opened for more than 13 months, increased by 8.1 percent and were driven by the cross-marketing benefits of Golfsmith's multi-channel retail model, its new retail store design, a golf equipment mix of pro-line brands and proprietary brands, and specialty retail services.
For fiscal 2003, Golfsmith reported net revenue of $257.7 million, operating income of $12.7 million and net income of $1.1 million. This compares with net revenue of $218.1 million, operating income of $7.7 million and a net loss of $2.2 million in fiscal 2002.
Same-store sales rose 7.4 percent, primarily as a result of the cross-marketing benefits of Golfsmith's multi-channel retail model, reconfigured and redesigned retail stores, better product selection, and specialty retail services.
During 2003, Golfsmith opened six new stores and added six stores through its July 2003 acquisition of San Francisco-based Don Sherwood Golf and Tennis World, bringing the number of retail outlets throughout the country to 38. Golfsmith superstores range in size from 8,000 – 30,000 square feet and are located in the following 14 markets: Atlanta (3); Austin (2); Chicago (4); Columbus, Ohio; Dallas (3); Denver (2); Detroit (3); Houston (2); Los Angeles (5); Minneapolis; Morristown, New Jersey; New York (3); Phoenix (2); and the San Francisco Bay Area (6).
“Our goal is to help customers get more out of the game of golf by delivering a superior shopping experience in our stores, our catalogs and through our website,” said Thompson. “We plan to increase market share by continuing to add stores in existing or new markets and by providing customers with value, specialty services and the best selection of pro-line and proprietary golf equipment and merchandise.”
Golfsmith International Holdings, Inc.
Consolidated Income Statement
Successor Predecessor
-------------------------- -------------
For the For the
Period from Period from
October 16, December 30,
Fiscal Year 2002 2001
Ended through through
January 3, December 28, October 15,
2004 2002 2002
------------- ------------ -------------
Net revenues $257,744,780 $37,830,540 $180,315,163
Cost of products sold 171,083,110 25,146,178 117,206,594
------------- ------------ -------------
Gross profit 86,661,670 12,684,362 63,108,569
Selling, general and
administrative 73,400,271 13,580,912 48,308,301
Store pre-opening expenses 599,603 92,792 121,686
Amortization of deferred
compensation - - 6,033,273
------------- ------------ -------------
Total operating expenses 73,999,874 13,673,704 54,463,260
------------- ------------ -------------
Operating income 12,661,796 (989,342) 8,645,309
Interest expense (11,156,792) (2,210,304) (5,205,859)
Interest income 39,776 7,119 330,587
Other income 210,707 13,725 2,365,551
Other expense (46,270) (133)
Minority interest - - (844,378)
Loss on debt extinguishment - - (8,046,552)
------------- ------------ -------------
Income (loss) from continuing
operations before income
taxes 1,709,217 (3,178,935) (2,755,342)
Income tax (expense) benefit (644,953) 632,934 (708,374)
------------- ------------ -------------
Income (loss) from
continuing operations 1,064,264 (2,546,001) (3,463,716)
Loss from discontinued
operations, including loss
on disposal of $285,886 for
the year ended December 28,
2002 - (39,920) (229,880)
------------- ------------ -------------
Income (loss) before
extraordinary item 1,064,264 (2,585,921) (3,693,596)
Extraordinary gain- negative
goodwill arising from
purchase of minority
interest - - 4,121,927
------------- ------------ -------------
Net income (loss) $1,064,264 $(2,585,921) $428,331
============= ============ =============
Golfsmith International, Inc.
Fourth Quarter Consolidated Income Statement
Successor Predecessor
------------ ------------
Three Months Period from Period from
Ended October 16, September
January 3, 2002 29, 2002
2004 through through
December 28, October 15,
2002 2002
------------ ------------ ------------
Net revenues $61,517,862 $37,830,540 $6,736,871
Cost of products sold 38,877,928 25,146,178 4,717,770
------------ ------------ ------------
Gross profit 22,639,934 12,684,362 2,019,101
Selling, general and
administrative 21,287,694 13,580,909 2,555,124
Store pre-opening expenses 111,187 92,793 -
Amortization of deferred
compensation - - 4,720,934
------------ ------------ ------------
Total operating expenses 21,398,881 13,673,702 7,276,058
============ ============ ============
Operating income 1,241,053 (989,340) (5,256,957)
Interest expense (2,985,331) (2,210,304) (527,488)
Interest income 1,764 7,119 20,496
Other income 95,869 13,725 1,235
Other expense (42,270) (133) -
Minority interest - - 76,036
Loss on debt extinguishment - - (8,046,552)
------------ ------------ ------------
Income (loss) from continuing
operations before income taxes (1,688,915) (3,178,933) (13,733,230)
Income tax (expense) benefit 737,562 632,934 200
------------ ------------ ------------
Income (loss) from continuing
operations (951,353) (2,545,999) (13,733,030)
Loss from discontinued
operations, including loss on
disposal of $285,886 for the
year ended December 28, 2002 - (39,922) -
------------ ------------ ------------
Income (loss) before
extraordinary item (951,353) (2,585,921) (13,733,030)
Extraordinary gain- negative
goodwill arising from purchase
of minority interest - - 4,121,927
------------ ------------ ------------
------------ ------------ ------------
Net income (loss) $(951,353) $(2,585,921) $(9,611,103)
============ ============ ============
