Gander Mountain, second quarter fiscal 2005 sales increased to $173.6 million, an increase of 35.5% over the second quarter of fiscal 2004. Comparable store sales decreased 4.2% after an increase of 1.8% in the second quarter of fiscal 2004. The net loss for the second quarter of fiscal 2005 was $10.4 million, compared to a $3.9 million restated loss for the second quarter of fiscal 2004.
For the 26 weeks ended July 30, 2005, sales increased $81.9 million, or 36.1 percent, to $308.7 million. Comparable store sales decreased 2.7 percent. The net loss for the 26 weeks ended July 30, 2005, was $27.9 million, compared with a restated net loss of $17.7 million for the 26 weeks ended July 31, 2004.
“We have now reported sales growth of over 30 percent for eight of the past nine quarters,” said Mark Baker, President and CEO. “Given the success of our ten new stores opened so far in 2005, we have confidence in our ability to continue to enter new markets and gain scale.
“While we were disappointed in our comparable store sales performance and loss, we had anticipated incurring a loss in the second quarter because of the seasonality of our business. With nearly two-thirds of our business for the year still ahead of us as we enter the important fall hunting and holiday seasons, we believe that our broad assortment of goods and services and the knowledge and experience of our store associates position us well to meet the needs of outdoor enthusiasts.”
In the second quarter of fiscal 2005, Gander Mountain opened four new stores, bringing the total store count to 91 at the end of the quarter. One of the new stores marked the company's entrance into its fifteenth state, Arkansas, and another was the sixth store in Texas, a market the company entered in 2004. In fiscal 2005, the company anticipates opening a total of 19 stores, including three store relocations or consolidations, for a total of 98 stores at year-end. The nine new stores opening in the fall will include stores in three new states — Maryland, Kansas and North Carolina — as well as additional stores in existing markets.
On a GAAP basis, basic and diluted net loss per share for the second quarter of fiscal 2005 were $0.73, compared with basic and diluted net loss per share for the second quarter of fiscal 2004 of $0.27. For the six months ended July 30, 2005, on a GAAP basis, basic and diluted net loss per share were $1.96, compared with basic and diluted net loss per share of $2.76 a year ago.
On April 26, 2004, Gander Mountain closed its initial public offering of 6,583,750 shares of its common stock and converted existing preferred stock to common stock. Giving effect to the conversion of preferred shares and the application of the net proceeds of the offering as of the beginning of each period presented, pro-forma basic and diluted net loss per share for the six months ended July 30, 2005, were $1.96, compared with pro-forma basic and diluted net loss per share for the six months ended July 31, 2004, of $1.18.
The company updated its outlook for fiscal 2005. The company's outlook is based on current expectations and includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act as described later in this release. The company's current outlook for the full year of fiscal 2005 is as follows:
- Sales are expected to exceed $850 million, an increase of at least
32 percent over fiscal 2004. - Comparable store sales are expected to be flat with last year, down
from the company's previous guidance of an increase of at least
two percent. - Income before income taxes is expected to be more than $16 million,
compared with $1.6 million in fiscal 2004. - The company expects to open 19 stores during the year, including
three store relocations and consolidations.
Gander Mountain Company
Condensed Statements of Operations - Unaudited
(In thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
July 31, July 31,
July 30, 2004 July 30, 2004
2005 (restated) 2005 (restated)
Sales $173,617 $128,096 $308,745 $226,815
Cost of goods sold 132,931 96,395 242,880 175,721
Gross profit 40,686 31,701 65,865 51,094
Operating expenses:
Store operating expenses 38,133 27,231 70,703 51,056
General and administrative
expenses 9,568 6,115 15,321 12,613
Pre-opening expenses 1,017 1,320 3,776 2,693
Loss from operations (8,032) (2,965) (23,935) (15,268)
Interest expense, net 2,349 895 4,014 2,397
Loss before income taxes (10,381) (3,860) (27,949) (17,665)
Income tax provision - - - -
Net loss (10,381) (3,860) (27,949) (17,665)
Less preferred stock dividends - - - 4,305
Loss applicable to common
shareholders $(10,381) $(3,860) $(27,949) $(21,970)
Basic and diluted loss applicable
to common shareholders per share $(0.73) $(0.27) $(1.96) $(2.76)
Weighted average common shares
outstanding 14,258 14,222 14,247 7,962
