Big 5 Sporting Goods reported financial results for the fiscal 2003 fourth quarter and full year. For the 2003 Q4, net sales increased by $15.1 million, or 8.5%, to $191.8 million from $176.7 million in 2002. Same store sales increased 3.6% versus the fourth quarter last year,
representing the company's thirty-second consecutive quarterly increase in same store sales over comparable prior periods. Net income available to
common stockholders for the 2003 fourth quarter, calculated in accordance with
generally accepted accounting principles (“GAAP”), increased to $9.9 million,
or $0.43 per diluted share, compared with net income available to common
stockholders of $8.8 million, or $0.39 per diluted share, in the same period
last year. Net income available to stockholders for the 2003 fourth quarter
includes a charge of $1.2 million, net of taxes, associated with the
redemption of $35.0 million principal amount of the company's 10.875% senior
notes. Excluding this charge, net income available to stockholders for the
2003 fourth quarter was $11.1 million, or $0.49 per diluted share.
For fiscal 2003, net sales increased by $42.2 million, or 6.3%, to
$709.7 million from $667.5 million for fiscal year 2002. Same store sales for
fiscal 2003 increased 2.2% versus fiscal 2002. Net income available to common
stockholders for fiscal 2003, reported in accordance with GAAP, increased to
$26.3 million, or $1.16 per diluted share, compared with GAAP net income
available to common stockholders of $11.1 million, or $0.57 per diluted share
in the same period last year. Net income available to stockholders for fiscal
2003 includes a charge of $2.1 million, net of taxes, associated with the
redemption of $55.0 million principal amount of the company's 10.875% senior
notes. Excluding this charge, net income available to stockholders for fiscal
2003 was $28.3 million, or $1.25 per diluted share. This compares with pro
forma net income available to common stockholders for fiscal 2002 of
$24.6 million, or $1.09 per diluted share, which excludes certain effects
related to the company's initial public offering.
Steven G. Miller, Big 5's Chairman, President and Chief Executive Officer,
said, “We are pleased to report another outstanding quarter and full year for
Big 5 Sporting Goods. The fourth quarter was our strongest comp store
quarterly performance of the year and represented our 32nd consecutive
quarterly increase in same store sales. Our comp store performance was solid
in each of our five geographic regions and for each of our three major
merchandise categories — footwear apparel and hard goods. Our positive
sales results, combined with higher profit margins, sound expense controls
and lower interests costs enabled us to deliver excellent bottom-line results
for the fourth quarter and full year of fiscal 2003. We believe we are well
positioned to continue this strong performance in 2004.”
Big 5 reports net income and earnings per diluted share in accordance with
GAAP and additionally on a pro forma basis to exclude certain effects of the
company's senior note redemption (as described above) and to exclude certain
effects of the company's fiscal 2002 IPO. The company raised a total of
$84.0 million of net proceeds from the IPO, which were used along with
borrowings under its credit facility to redeem all of Big 5's then outstanding
senior discount notes and preferred stock and to repurchase approximately
500,000 shares of common stock from non-executive employees. The pro forma
figures for fiscal 2002 assume that the IPO took place at the beginning of
2002 and exclude the effects of certain one-time IPO-related and
over-allotment expenses, use of funds generated from the reduction of the
redemption premium otherwise applicable to the redemption of preferred stock
to pay bonuses in connection with the IPO, interest payments and premiums
payable on debt redeemed in connection with the IPO, dividends and premiums
payable on preferred stock redeemed in connection with the IPO and related
income tax effects. Big 5 uses this pro forma reporting internally to
evaluate its operating performance without regard to certain non-recurring
financial effects of the IPO and certain financial effects of the 2003 partial
senior note redemptions and believes this presentation will provide investors
with additional insight into its operating results. A reconciliation of the
senior note redemptions and IPO-related pro forma adjustments to GAAP appears
in the financial statements portion of this release.
During the fiscal 2003 fourth quarter, Big 5 opened 11 new stores,
including three in Arizona, two each in California, Idaho, and Colorado, and
one each in Nevada and Washington. These openings brought the company's
year-end store count to 293 versus 275 at the end of fiscal 2002. The company
anticipates opening between 15 and 20 stores in fiscal 2004.
Big 5 expects to realize same store sales growth in the mid-single-digit
range for the first fiscal quarter of 2004, resulting in earnings per diluted
share in the range of $0.23 to $0.25. For the 2004 fiscal year, the company
currently expects to realize same store sales growth in the low to
mid-single-digit range, resulting in earnings per diluted share of $1.47 to
$1.53. Fiscal 2004 will include 53 weeks for accounting purposes, with the
extra week being included in the company's fourth quarter results. This
additional week should add approximately 1.75% to fiscal 2004 sales versus
fiscal 2003, but should not have a material impact on earnings results for the
fourth quarter or year.
BIG 5 SPORTING GOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)As Reported Pro Forma
13 Weeks Ended 13 Weeks Ended (1)
December December December
28, 2003 29, 2002 28, 2003Net sales $191,823 $176,720 $191,823
Cost of goods sold, buying and
occupancy 121,554 112,856 121,554
Gross profit 70,269 63,864 70,269Selling and administrative 46,807 42,498 46,807
Depreciation and amortization 2,784 2,809 2,784Operating income 20,678 18,557 20,678
Premium and unamortized financing
fees related to redemption of debt 1,901 -- --
Interest expense, net 2,661 3,527 2,661Income before income taxes 16,116 15,030 18,017
Income tax 6,189 6,203 6,921Net income available to common
stockholders $9,927 $8,827 $11,096Earnings per share:
Basic $0.44 $0.40 $0.49Diluted $0.43 $0.39 $0.49
Shares used to calculate earnings
per share:
Basic 22,664 21,915 22,664Diluted 22,832 22,664 22,832
BIG 5 SPORTING GOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)As Reported Pro Forma
52 Weeks Ended 52 Weeks Ended (1)
December December December December
28, 2003 29, 2002 28, 2003 29, 2002Net sales $709,740 $667,469 $709,740 $667,469
Cost of goods sold, buying and
occupancy 453,814 429,858 453,814 429,858
Gross profit 255,926 237,611 255,926 237,611Selling and administrative 186,798 174,868 186,798 171,862
Depreciation and amortization 10,412 9,966 10,412 9,966Operating income 58,716 52,777 58,716 55,783
Premium and unamortized
financing fees related to
redemption of debt 3,434 4,557 -- --
Interest expense, net 11,405 15,825 11,405 14,050Income before income taxes 43,877 32,395 47,311 41,733
Income tax 17,587 13,313 18,963 17,135Net income 26,290 19,082 28,348 24,598
Redeemable preferred stock
dividends and redemption
premium -- 7,999 -- --Net income available to common
stockholders $26,290 $11,083 $28,348 $24,598Earnings per share:
Basic $1.16 $0.60 $1.25 $1.14Diluted $1.16 $0.57 $1.25 $1.09
Shares used to calculate earnings
per share:
Basic 22,651 18,358 22,651 21,546Diluted 22,753 19,476 22,753 22,664
