Sportsman’s Warehouse Holdings, Inc. reported net sales increased by 4.3 percent to $182.5 million for the 13 weeks ended Nov. 1, from $175.1 million in the third quarter of fiscal 2013. Same store sales decreased by 6.2 percent, primarily as a result of the decline in demand for firearms and ammunition.

“Our third quarter earnings came in above our guidance range driven by solid results from our non-hunting and shooting product categories combined with positive new store performance and margin expansion,” said President and CEO John Schaefer. “Our third quarter earnings came in above our guidance range driven by solid results from our non-hunting and shooting product categories combined with positive new store performance and margin expansion.”

Income from operations increased to $18.6 million from $17.0 million in the third quarter of fiscal 2013.

The company opened one new store in the third quarter of fiscal 2014 and ended the quarter with 55 stores in 18 states, a unit increase of 17.0 percent from the end of the third quarter of fiscal 2013.

Interest expense decreased to $4.1 million from $13.3 million in the third quarter of fiscal 2013.

Net income was $8.9 million compared to $2.2 million in the third quarter of fiscal 2013. Adjusted net income, which excludes expenses related to refinancing our term loan in the third quarter of fiscal 2013, net of taxes, was $8.9 million compared to adjusted net income of $7.1 million for the third quarter of fiscal 2013.

Diluted earnings per share was $0.21 compared to diluted earnings per share of $0.07 in the third quarter of fiscal 2013. Adjusted diluted earnings per share, was $0.21 compared to adjusted diluted earnings per share of $0.17 in the third quarter of fiscal 2013.

Adjusted EBITDA was $21.8 million compared to $19.2 million in the third quarter of fiscal 2013.
Balance sheet highlights as of Nov. 1, 2014:

  • Cash: $1.7 million
  • Total debt: $219.3 million, consisting of $62.9 million outstanding under our revolving credit facility and $156.4 million outstanding under our term loans, net of unamortized discount.
  • Total liquidity (cash plus $24.0 million of availability on revolving credit facility): $25.7 million


Fourth Quarter and Fiscal 2014 Outlook:

For the fourth quarter of fiscal 2014, net sales are expected to be in the range of $185.0 million to $190.0 million based on a decrease in same store sales from the fourth quarter of fiscal year 2013 in the range of 3.0 percent to 6.0 percent. Net income is expected to be in the range of $4.9 million to $5.6 million, with diluted earnings per share of $0.12 to $0.13 on a weighted average of approximately 42.0 million estimated common shares outstanding. Adjusted net income, which excludes $5.7 million in pre-tax charges, or $3.4 million in after-tax charges, related to the refinancing of our term loan in the fourth quarter, is expected to be in the range of $8.4 million to $9.1 million, or $0.20 to $0.22 per diluted share, on a weighted average of approximately 42.0 million estimated common shares outstanding.

For fiscal 2014, net sales are expected to be in the range of $660.0 million to $665.0 million based on opening eight new stores for the full year and a decrease in same store sales from fiscal year 2013 in the range of 7.0 percent to 8.0 percent. Net income is expected to be in the range of $15.5 million to $16.3 million, with diluted earnings per share of $0.37 to $0.39 (which includes the impact of $1.4 million in expenses related to IPO bonuses and the $3.5 million of term loan refinance expenses, net of taxes) on approximately 42.0 million estimated weighted average common shares outstanding. Excluding $4.9 million, or $0.11 per adjusted diluted share, in expenses related to the IPO bonuses and term loan refinance costs, adjusted net income for fiscal 2014 is expected to be in the range of $20.4 million to $21.1 million, or $0.48 to $0.50 per diluted share, based on a weighted average diluted share count of 42.0 million.

SPORTSMAN’s WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)










For the Thirteen Weeks Ended
For the Thirty Nine Weeks Ended










November 1,
2014
% of net
sales
November 2,
2013
% of net
sales
November 1,
2014
% of net
sales
November 2,
2013
% of net
sales










Net sales

$ 182,532
100.0%
$ 175,059
100.0%
$ 474,425
100.0%
$ 467,436
100.0%

Cost of goods sold

121,881
66.8%
119,836
68.5%
320,819
67.6%
317,090
67.8%

Gross profit

60,651
33.2%
55,223
31.5%
153,606
32.4%
150,346
32.2%










Operating expenses:









Selling, general and administrative expenses

42,026
23.0%
38,240
21.8%
122,859
25.9%
106,642
22.8%

Bankruptcy related expenses

0.0%
0.0%
0.0%
55
0.0%


42,026
23.0%
38,240
21.8%
122,859
25.9%
106,697
22.8%

Income from operations

18,625
10.2%
16,983
9.7%
30,747
6.5%
43,649
9.3%

Interest expense

(4,122)
(2.3%)
(13,302)
(7.6%)
(13,487)
(2.8%)
(19,895)
(4.3%)

Income before income tax expense

14,503
7.9%
3,681
2.1%
17,260
3.6%
23,754
5.1%

Income tax expense

(5,587)
(3.1%)
(1,459)
(0.8%)
(6,649)
(1.4%)
(9,417)
(2.0%)

Net income

$ 8,916
4.9%
$ 2,222
1.3%
$ 10,611
2.2%
$ 14,337
3.1%










Earnings per share









Basic

$ 0.21


$ 0.07


$ 0.27


$ 0.43


Diluted

$ 0.21


$ 0.07


$ 0.27


$ 0.43