Exhibit 99.1
Contact:
Big 5 Sporting Goods Corporation
Barry Emerson
Sr. Vice President and Chief Financial Officer
(310) 536-0611
ICR, Inc.
John Mills
Senior Managing Director
(310) 954-1105
BIG 5 SPORTING GOODS CORPORATION ANNOUNCES FISCAL 2008 FIRST QUARTER RESULTS
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First Quarter Diluted Earnings Per Share of $0.19 |
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Declares Quarterly Cash Dividend |
EL SEGUNDO, Calif., April 30, 2008 — Big 5 Sporting Goods Corporation (NASDAQ: BGFV), a leading
sporting goods retailer, today reported financial results for the fiscal 2008 first quarter ended
March 30, 2008.
For the fiscal 2008 first quarter, net sales were $212.9 million, compared to net sales of $217.0
million for the first quarter of fiscal 2007. Same store sales declined 5.1% for the first
quarter. Sales results reflect weakness in the consumer environment, which contributed to a
decrease in customer traffic, as well as the continued deterioration in the performance of the
roller shoe product category over the prior year, partially offset by strong sales of
winter-related products due to favorable weather conditions in many of the Company’s markets. The
decline in roller shoe performance accounted for approximately 40% of the same store sales decline
during the first quarter. Additionally, sales results were negatively impacted by the shift of the
Easter holiday, when the Company’s stores were closed, from the second quarter of 2007 to the first
quarter of 2008.
Gross profit for the fiscal 2008 first quarter was $71.6 million, compared to $75.8 million in the
first quarter of the prior year. The Company’s gross profit margin was 33.6% in the fiscal 2008
first quarter versus 34.9% in the first quarter of the prior year. The decrease in gross profit
margin was driven primarily by an 83 basis-point decline in product selling margins and higher
store occupancy costs. Product selling margins were impacted primarily by higher sales of
winter-related products at lower margins versus the prior year, lower sales and margins in roller
shoes and slightly more aggressive promotional pricing in an effort to drive sales and reduce
merchandise inventory.
Selling and administrative expense as a percentage of net sales was 29.7% in the fiscal 2008 first
quarter versus 28.4% in the first quarter of the prior year, primarily due to lower sales levels
and higher store-related expenses reflecting an increased store count.
Net income for the first quarter of fiscal 2008 was $4.1 million, or $0.19 per diluted share,
compared to net income of $7.6 million, or $0.33 per diluted share, for the first quarter of fiscal
2007.
“Despite a strong first quarter performance by our winter-related product categories, which
benefited in part from favorable weather conditions in many of our markets, we were unable to fully
offset the general softness in the overall consumer environment and the substantial impact of very
negative sales comparisons in our roller shoe category,” said Steven G. Miller, the Company’s
Chairman, President and Chief Executive Officer. “Given the difficult consumer climate, we have
worked very hard to strengthen the aspects of our business that are within our control, including
our inventory position. We improved our total inventory comparisons versus the prior year by
approximately $24 million from the end of the fourth quarter of fiscal 2007 to the end of the first
quarter of fiscal 2008. These efforts resulted in our inventories being down 5.3% on a per-store
basis at the end of the first quarter this year compared to the end of the first quarter last
year.”
Mr. Miller continued, “Although first quarter results were in line with our expectations, the
continuing softness in the consumer environment and the resulting unpredictability of customer
traffic and sales make our ability to forecast the remainder of the year challenging. Based on
this uncertain economic environment and recent sales trends, we are maintaining a cautious outlook.
While the retail environment has remained weak during the second quarter, we believe that our
continued focus on improving the execution of our overall business model, including refining our
merchandise mix and promotional plans, securing quality new store locations and controlling
expenses, will position us well when the consumer climate improves.”
Quarterly Cash Dividend
The Company’s Board of Directors has declared a quarterly cash dividend of $0.09 per share of
outstanding common stock, which will be paid on June 13, 2008 to stockholders of record as of May
30, 2008. Based on the current price of the Company’s stock, this dividend equates to an annualized dividend yield of approximately 4%.
Share Repurchases
During the fiscal 2008 first quarter, the Company repurchased 279,768 shares of its common stock
for a total expenditure of $2.8 million. The Company has $16.7 million available under its $20.0
million share repurchase program authorized in the fiscal 2007 fourth quarter.
Guidance
The
Company’s guidance for the fiscal 2008 second quarter and full year assumes that sales will
continue to be impacted by a challenging consumer environment throughout the year. Based on that
assumption, the Company is providing the following guidance:
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For the fiscal 2008 second quarter, a decline in same store sales in the mid-single
digit range and earnings per diluted share in the range of $0.06 to $0.12; and |
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For the fiscal 2008 full year, a decline in same store sales in the low to mid-single
digit range. Based on the Company’s first quarter results and second quarter guidance, the
Company now expects earnings per diluted share for the fiscal 2008 full year in the range
of $0.60 to $0.85. |
A material improvement or decline in the overall consumer environment during the remainder of the
year could materially impact the Company’s performance relative to this guidance.
Store Openings
The Company opened one new store during the first quarter of fiscal 2008. The Company operated 364
stores at the end of the first quarter and anticipates opening three net new stores during the
fiscal 2008 second quarter. The Company anticipates opening approximately 20 new stores, net of
relocations and closures, during fiscal 2008.
Conference Call Information
The Company will host a conference call and audio webcast today at 2:00 p.m. Pacific (5:00 p.m.
EDT) to discuss financial results for the fiscal 2008 first quarter. The webcast will be available
at www.big5sportinggoods.com and archived for 30 days. Visitors to the website should select the
“Investor Relations” link to access the webcast.
About Big 5 Sporting Goods Corporation
Big 5 is a leading sporting goods retailer in the western United States, operating 364 stores in 11
states under the “Big 5 Sporting Goods” name. Big 5 provides a full-line product offering in a
traditional sporting goods store format that averages 11,000 square feet. Big 5’s product mix
includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and
athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding
and in-line skating.
Except for historical information contained herein, the statements in this release are
forward-looking and made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and
uncertainties, which may cause Big 5’s actual results in current or future periods to differ
materially from forecasted results. Those risks and uncertainties include, among other things,
continued or worsening weakness in the consumer spending environment, the
competitive environment in the sporting goods industry in general and in Big 5’s specific market
areas, inflation, product availability and growth opportunities, seasonal fluctuations, weather
conditions, changes in cost of goods, operating expense fluctuations, disruption in product flow or
increased costs related to distribution center operations, changes in interest rates, credit
availability and economic conditions in general. Those and other risks and uncertainties are more
fully described in Big 5’s filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the fiscal year ended December 30, 2007. Big 5 conducts its
business in a highly competitive and rapidly changing environment. Accordingly, new risk factors
may arise. It is not possible for management to predict all such risk factors, nor to assess the
impact of all such risk factors on Big 5’s business or the extent to which any individual risk
factor, or combination of factors, may cause results to differ materially from those contained in
any forward-looking statement. Big 5 undertakes no obligation to revise or update any
forward-looking statement that may be made from time to time by it or on its behalf.
# # #
FINANCIAL TABLES FOLLOW
BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts)
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March 30, |
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December 30, |
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2008 |
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2007 |
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ASSETS
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Current assets: |
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Cash and cash equivalents |
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$ |
7,501 |
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$ |
9,741 |
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Accounts receivable, net of allowances of $388 and $405, respectively |
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10,770 |
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14,927 |
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Merchandise inventories, net |
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233,184 |
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252,634 |
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Prepaid expenses |
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6,962 |
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7,069 |
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Deferred income taxes |
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9,190 |
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10,070 |
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Total current assets |
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267,607 |
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294,441 |
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Property and equipment, net |
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90,948 |
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93,244 |
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Deferred income taxes |
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11,391 |
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10,761 |
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Other assets, net of accumulated amortization of $254 and $241, respectively |
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1,041 |
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1,044 |
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Goodwill |
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4,433 |
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4,433 |
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Total assets |
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$ |
375,420 |
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$ |
403,923 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities: |
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Accounts payable |
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$ |
85,048 |
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$ |
95,310 |
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Accrued expenses |
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56,519 |
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67,525 |
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Current portion of capital lease obligations |
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1,472 |
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1,649 |
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Total current liabilities |
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143,039 |
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164,484 |
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Deferred rent, less current portion |
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21,631 |
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22,075 |
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Capital lease obligations, less current portion |
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1,999 |
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2,279 |
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Long-term debt |
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97,252 |
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103,369 |
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Other long-term liabilities |
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2,540 |
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2,561 |
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Total liabilities |
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266,461 |
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294,768 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock, $0.01 par value, authorized 50,000,000 shares;
issued 22,992,087 and 22,894,987 shares, respectively;
outstanding 21,830,023 and 22,012,691 shares, respectively |
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229 |
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228 |
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Additional paid-in capital |
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91,310 |
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90,851 |
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Retained earnings |
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36,284 |
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34,137 |
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Less: Treasury stock, at cost; 1,162,064 and 882,296 shares, respectively |
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(18,864 |
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(16,061 |
) |
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Total stockholders’ equity |
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108,959 |
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109,155 |
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Total liabilities and stockholders’ equity |
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$ |
375,420 |
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$ |
403,923 |
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BIG 5 SPORTING GOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
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13 Weeks Ended |
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March 30, |
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April 1, |
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2008 |
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2007 |
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Net sales |
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$ |
212,866 |
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$ |
217,007 |
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Cost of sales (1) |
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141,283 |
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141,252 |
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Gross profit (1) |
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71,583 |
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75,755 |
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Selling and administrative expense (1) |
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63,230 |
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61,789 |
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Operating income |
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8,353 |
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13,966 |
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Interest expense |
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1,589 |
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1,449 |
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Income before income taxes |
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6,764 |
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12,517 |
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Income taxes |
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2,644 |
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4,930 |
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Net income |
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$ |
4,120 |
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$ |
7,587 |
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Earnings per share: |
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Basic |
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$ |
0.19 |
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$ |
0.33 |
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Diluted |
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$ |
0.19 |
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$ |
0.33 |
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Dividends per share |
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$ |
0.09 |
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$ |
0.09 |
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Weighted-average shares of common stock
outstanding: |
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Basic |
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21,886 |
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22,675 |
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Diluted |
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21,926 |
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22,785 |
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| (1) |
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Historically, the Company has presented total depreciation and amortization expense separately
on the face of the unaudited condensed consolidated statement of operations and corporate
headquarters’ occupancy costs within cost of sales. In the fourth quarter of fiscal 2007, as
presented in the Annual Report on Form 10-K for the year ended December 30, 2007, the Company
retrospectively changed the classification of distribution center and store occupancy depreciation
and amortization expense to cost of sales and store equipment and corporate headquarters’
depreciation and amortization expense to selling and administrative expense. Depreciation and
amortization expense is no longer presented separately in the unaudited condensed consolidated
statement of operations. The corporate headquarters’ occupancy costs are now included in selling
and administrative expense. The Company reclassified its prior period unaudited condensed
consolidated statement of operations and related discussion and analysis to conform to the new
presentation, which increased cost of sales and decreased gross profit by $2.3 million and
increased selling and administrative expense by $1.9 million for the first quarter of fiscal 2007
from amounts previously reported. This reclassification had no effect on the Company’s previously
reported operating or net income, consolidated balance sheets, consolidated statements of
stockholders’ equity and consolidated statements of cash flows. |
