Golfsmith International Holdings, Inc. saw fourth quarter net revenues increase 5.3% to $79.0 million from $75.0 million for the fourth quarter of fiscal 2006. The increase includes net revenues from 13 non-comparable retail stores opened after December 30, 2006, partially offset by a 6.7% decrease in net revenues from its direct channel and a 4.6% decrease in comparable store sales.
Net loss totaled $46.7 million or a loss per share of $2.95, based on 15.8 million fully diluted weighted average shares outstanding. Excluding the $43.0 million of impairment charges, the companys non-GAAP net loss was $3.7 million or 23 cents per share. This compares with a net loss of $1.6 million, or 10 cents per share, based on 15.7 million fully diluted weighted average shares outstanding in the three months ended December 30, 2006.
“While our results were reflective of overall softness in the golf industry in the fourth quarter and particularly in December, we were not satisfied with our execution or overall performance during this period,” said Martin Hanaka, chairman and interim chief executive officer of Golfsmith. “We remain committed to our multi-channel business strategy and plan to focus on bottom line results in fiscal 2008 by streamlining our expense structure, driving gross margins, enhancing our marketing strategy and improving inventory management.”
Fiscal 2007 Highlights
Net revenues increased 8.5% to $388.2 million compared with net revenues of $357.9 million for the full-year ended December 30, 2006. This increase was attributable to net revenues from 13 non-comparable retail stores opened after December 30, 2006, but was partially offset by a 6.2% decrease in net revenues from the direct channel and a 3.7% decrease in comparable store sales.
The company reported a net loss for fiscal 2007 of $40.8 million, or a loss per share of $2.58, based on 15.8 million fully diluted weighted average shares outstanding. This compares with a net loss of $8.1 million, or 62 cents per share, based on 13.0 million fully diluted weighted average shares outstanding in fiscal 2006. Excluding the impairment charges, non-GAAP net income was $2.2 million or 14 cents per diluted share in fiscal 2007. This compares with non-GAAP net income of $8.1 million in fiscal 2006. The companys net loss in fiscal 2006 included charges of $12.8 million related to the early extinguishment of debt and $3.4 million related to the termination of our management agreement with First Atlantic Capital and other one-time IPO related costs.
As of December 29, 2007, total inventory was $98.5 million as compared to $88.2 million on December 30, 2006 and average inventory per store was flat.
For fiscal 2008 Golfsmith expects overall sales growth to be slightly positive with slightly negative comparable store sales and a decrease in direct sales. Earnings growth will be driven by gross margin expansion and cost containment as well as reduced store openings.
|Golfsmith International Holdings, Inc.|
|Consolidated Statements of Operations|
|Fiscal Year||Three Months Ended|
|December 29, 2007||December 30, 2006||December 29, 2007||December 30, 2006|
|Cost of products sold||252,254,943||232,073,044||51,413,713||49,019,416|
|Selling, general and administrative||127,420,598||112,456,208||29,850,870||26,206,960|
|Store pre-opening expenses||2,361,324||1,799,836||311,758||379,953|
|Impairment of goodwill||41,634,525||–||41,634,525||–|
|Impairment of fixed assets||1,359,140||–||1,359,140||–|
|Total operating expenses||172,775,587||114,256,044||73,156,293||26,586,913|
|Operating income (loss)||(36,873,272||)||11,561,107||(45,600,851||)||(644,820||)|
|Loss on debt extinguishment||–||(12,775,270||)||–||–|
|Loss before income taxes||(40,159,017||)||(7,922,613||)||(46,390,171||)||(1,418,479||)|
|Income tax expense||(661,033||)||(186,725||)||(305,245||)||(155,609||)|