Big 5 Sporting Goods Corporation reported net sales for the fiscal 2003 third quarter ended on September 28, 2003 increased 7.2% to $183.3 million from $170.9 million in the third quarter of 2002. Same store sales increased 3.3% versus the third quarter last year, representing
the company's thirty-first consecutive quarterly increase in same store sales over comparable prior periods.
Gross profit margin increased 1.0% during the
third quarter to 35.6% from gross profit margin of 34.6% for the same period last year. Selling and administrative expenses were 26.4% of net sales for the 2003 third quarter. This compares to 2002 third quarter selling and
administrative expense calculated in accordance with generally accepted accounting principles (GAAP) of 26.0% of net sales and 2002 third quarter pro forma selling and administrative expenses of 25.7% of net sales after
excluding certain effects related to the company's initial public offering (IPO) and exercise of the underwriters' overallotment option in mid-2002.
Net income available to common stockholders for the 2003 third quarter, calculated in accordance with GAAP, was $6.7 million, or $0.30 per diluted share, compared to GAAP net loss to common stockholders of $1.4 million, or
$0.07 per diluted share, in the same period last year. Third quarter 2002 pro forma net income available to common stockholders was $5.5 million, or $0.24
per diluted share.
For the nine months ended September 28, 2003, net sales increased by $27.2 million, or 5.5%, to $517.9 million from $490.7 million in the first nine months of 2002. Same store sales increased 1.6% versus the same period last
year. Gross profit margin increased 0.4% during the first nine months of 2003 to 35.8% from gross profit margin of 35.4% for the comparable period last year. Selling and administrative expenses were 27.0% of net sales for the
first nine months of 2003. This compares to selling and administrative expenses calculated in accordance with GAAP of 27.0% of net sales for the first nine months of 2002 and pro forma selling and administrative expenses of
26.4% of net sales for the first nine months of 2002.
Net income available to common stockholders for the first nine months of
2003, calculated in accordance with GAAP, increased to $16.4 million, or $0.72
per diluted share, compared to GAAP net income available to common
stockholders of $2.3 million, or $0.12 per diluted share in the same period
last year. Results for the nine months ended September 28, 2003 include
$875,000, net of taxes, or $0.04 per diluted share, related to a charge
associated with the redemption of $20.0 million face value of the company's
10.875% senior notes. Excluding this charge, net income available to
stockholders for the first nine months of 2003 was $17.3 million, or $0.76 per
diluted share. This compares to pro forma net income available to common
stockholders for the first nine months of 2002 of $15.8 million, or $0.70 per
diluted share.
“We are pleased to report an outstanding quarter. Staying true to our
proven business formula, we achieved stronger sales and gross profit margins
that enabled us to produce bottom line results that exceeded both our guidance
and analysts' estimates,” said Steven G. Miller, Big 5's Chairman, President
and Chief Executive Officer. “We feel that our 3.3% same store sales increase
represents a very solid performance by our company, particularly given that we
were up against a strong 2002 third quarter, when we posted a 5.3% same store
sales gain over the third quarter in the prior year. Our sales trends
improved during the 2003 third quarter over the first half of the year,
benefiting from the return of more normal weather patterns as well as
indications of a healthier consumer environment. This positive momentum bodes
well for our business as we move toward the holiday season. We believe we are
well positioned for continued strong performance throughout the remainder of
this year and into 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 IPO, including the exercise of the underwriters'
over-allotment option. The company raised a total of $84.0 million of net
proceeds from the IPO, which occurred in June 2002, during the company's
second fiscal quarter, and the exercise of the underwriters' over-allotment
option, which occurred in July 2002, during the company's third fiscal
quarter. During the company's 2002 third quarter, the company utilized IPO
proceeds and borrowings under its credit facility to redeem all of Big 5's
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 the periods presented 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 the 2003 partial senior note
redemption and believes this presentation will provide investors with
additional insight into its operating results. A reconciliation of the pro
forma adjustments to GAAP appears in the financial statements portion of this
release.
Big 5 opened seven new stores during the 2003 third quarter and three
additional stores subsequent to the end of the quarter, bringing its current
total store count to 285. Big 5 plans to complete its fiscal 2003 store
openings with the addition of eight more stores before year-end, resulting in
a year-end store count of 293 stores.
Big 5 expects to realize same store sales growth in the low to mid single-digit range for the fourth fiscal quarter of 2003, resulting in earnings per diluted share in the range of $0.44 to $0.48.
For the fiscal year ending December 28, 2003, the company's guidance has been increased from the prior quarter. The company currently expects to realize same store sales growth for the fiscal year in the low single-digit range, resulting in earnings per diluted share of $1.21 to $1.25. The quarterly estimate of earnings per diluted share is calculated in accordance with GAAP. The full-year estimate of earnings per diluted share excludes $0.04 per diluted share, recorded in the fiscal 2003 first quarter, related to the charge associated with the partial redemption of the company's senior notes.
BIG 5 SPORTING GOODS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except earnings per share data)
As Reported Pro Forma
13 Weeks Ended 13 Weeks Ended (1)
September 28, September 29, September 29,
2003 2002 2002
Net sales $183,275 $170,913 $170,913
Cost of goods sold,
buying and occupancy 118,065 111,806 111,806
Gross profit 65,210 59,107 59,107
Selling and administrative 48,348 44,450 43,979
Depreciation and
amortization 2,585 2,335 2,335
Operating income 14,277 12,322 12,793
Premium and unamortized
financing fees related
to redemption of debt -- 4,498 --
Interest expense, net 2,848 3,487 3,485
Income before income taxes 11,429 4,337 9,308
Income tax 4,685 1,741 3,777
Net income 6,744 2,596 5,531
Redeemable preferred
stock dividends and
redemption premium -- 4,010 --
Net income available
to common stockholders $6,744 $(1,414) $5,531
Earnings per share:
Basic $0.30 $(0.07) $0.25
Diluted $0.30 $(0.07) $0.24
