PITTSBURGH, May 22 PA-Dick's-Q1-earnings
PITTSBURGH, May 22 /PRNewswire-FirstCall/ -- Dick's Sporting Goods, Inc.
(NYSE: DKS) today reported sales and earnings results for the first quarter
ended May 3, 2008. The results include the operating results of Golf Galaxy
and Chick's Sporting Goods from their respective acquisition dates of February
13, 2007 and November 30, 2007.
First Quarter Results
Net income decreased 4% to $20.8 million and earnings per diluted share
decreased 5% to $0.18, compared to prior year net income of $21.7 million, or
$0.19 per diluted share. First quarter 2008 results include a pretax gain on
sale of a corporate aircraft totaling $2.4 million, or $0.01 per diluted
share. Earnings guidance provided on March 11, 2008 was for earnings per
diluted share of $0.16 - 0.19.
Net sales for the quarter increased 11% to $912.1 million primarily due to
new store sales, partially offset by a comparable store sales decrease of 3.8%
for Dick's Sporting Goods stores, compared to the first quarter of 2007.
Comparable store sales for Golf Galaxy on a pro-forma basis decreased 7.4%.
"Throughout this difficult environment, we will continue to focus on the
core athlete and outdoor enthusiast, while managing our business with our
consistent focus on financial discipline and operational execution," said
Edward W. Stack, Chairman, CEO and President.
New Stores
In the first quarter, the Company opened eight Dick's Sporting Goods
stores and four Golf Galaxy stores. The stores that opened in the first
quarter are listed in a table later in the release under the heading "Store
Count and Square Footage."
2008 Outlook
The Company's current outlook for 2008 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. Although the Company believes that comments reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct.
"In 2008 we are continuing to grow our business and build our brand.
However, we are being cautious about our outlook for the remainder of the
year, due to the overall uncertainty of the current economic environment,"
said Mr. Stack. "We will constantly monitor business trends and are positioned
to take appropriate actions should the economic environment change."
-- Full Year 2008
-- Based on an estimated 118.3 million diluted shares outstanding, the
Company currently anticipates reporting consolidated earnings per
diluted share of approximately $1.22 - 1.36, as compared to earnings
per diluted share for the full year 2007 of $1.33.
-- Comparable store sales, which include Dick's Sporting Goods stores
only, are expected to decrease approximately 3 - 5%. The comparable
store sales calculation excludes the Golf Galaxy and Chick's
Sporting Goods stores.
-- The Company expects to open approximately 44 new Dick's Sporting
Goods stores, ten new Golf Galaxy stores and relocate one Dick's
store in 2008.
-- Second Quarter 2008
-- Based on an estimated 117.5 million diluted shares outstanding, the
Company anticipates reporting consolidated earnings per diluted
share of approximately $0.34 - 0.38, as compared to earnings per
diluted share for the second quarter 2007 of $0.41.
-- Comparable store sales, which include Dick's and Golf Galaxy stores,
are expected to decrease approximately 4 - 7%. The comparable store
sales calculation excludes the Chick's Sporting Goods stores.
-- The Company expects to open approximately ten new Dick's stores and
one new Golf Galaxy store in the second quarter.
Conference Call Info
The Company will be hosting a conference call today at 10:00 am eastern
time to discuss the first quarter results. Investors will have the
opportunity to listen to the earnings conference call over the internet
through the Company's web site located at
http://www.dickssportinggoods.com/investors. To listen to the live call,
please go to the web site at least fifteen minutes early to register, download
and install any necessary audio software.
For those who cannot listen to the live broadcast, the webcast will be
archived on the Company's web site for approximately 30 days. In addition, a
dial-in replay will be available shortly after the call. To listen, investors
should dial (888) 286-8010 (domestic callers) or (617) 801-6888 (international
callers) and enter confirmation code 17110385. The dial-in replay will be
available for 30 days following the live call.
Forward-Looking Statements Involving Known and Unknown Risks and
Uncertainties
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. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "guidance," "estimate," "intend," "predict," and
"continue" or similar words. Forward-looking statements involve known and
unknown risks and uncertainties, which may cause the Company's actual results
in future periods to differ materially from forecasted results. Those risks
and uncertainties include, without limitation, changes in economic and market
conditions that affect consumer spending, changes in consumer demand,
competitive pressures, currency exchange rate fluctuations, weather
conditions, litigation and our ability to manage our operations and growth.
Known and unknown risks and uncertainties are more fully described in the
Company's Annual Report on Form 10-K for the year ended February 2, 2008 as
filed with the Securities and Exchange Commission on March 27, 2008, and other
reports filed with the Securities and Exchange Commission. The Company
disclaims any obligation and does not intend to update any forward-looking
statements except as may be required by the securities laws.
The prior period EPS numbers presented in this press release have been
adjusted to give effect to the two-for-one stock split, in the form of a stock
dividend, which became effective on October 19, 2007 to our stockholders of
record on September 28, 2007.
About Dick's Sporting Goods, Inc.
Dick's Sporting Goods, Inc. is an authentic full-line sporting goods
retailer offering a broad assortment of brand name sporting goods equipment,
apparel, and footwear in a specialty store environment. As of May 3, 2008, the
Company operated 348 Dick's Sporting Goods stores in 38 states primarily
throughout the eastern half of the U.S. The Company also owns Golf Galaxy,
Inc., a multi-channel golf specialty retailer, with 83 stores in 30 states,
ecommerce websites and catalog operations and Chick's Sporting Goods, Inc.,
which operates 15 specialty sporting goods stores in Southern California.
Dick's Sporting Goods, Inc. news releases are available at
http://www.dickssportinggoods.com/ (click on the Investor Relations link at
the bottom of the home page).
Contact:
Timothy E. Kullman, EVP - Finance, Administration &
Chief Financial Officer or
Anne-Marie Megela, Director, Investor Relations
724-273-3400
investors@dcsg.com
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
13 Weeks Ended
-------------------------------------
May 3,% of May 5, % of
2008 Sales 2007 Sales (1)
-------- ------- -------- --------
Net sales$912,112 100.00% $823,553 100.00%
-------- ------- -------- --------
Cost of goods sold, including
occupancy and distribution costs 653,00671.59 579,13470.32
-------- ------- -------- --------
GROSS PROFIT 259,10628.41 244,41929.68
Selling, general and administrative
expenses 219,96424.12 198,00724.04
Pre-opening expenses4,924 0.54 7,121 0.86
-------- ------- -------- --------
INCOME FROM OPERATIONS 34,218 3.7539,291 4.77
Gain on sale of asset (2,356) (0.26)--
Interest expense, net 1,658 0.18 3,207 0.39
-------- ------- -------- --------
INCOME BEFORE INCOME TAXES 34,916 3.8336,084 4.38
Provision for income taxes 14,141 1.5514,383 1.75
-------- ------- -------- --------
NET INCOME$20,7752.28% $21,7012.64%
======== ======= ======== ========
EARNINGS PER COMMON SHARE:
Basic $0.19 $0.20
Diluted $0.18 $0.19
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 111,216107,098
Diluted 117,295114,442
(1) Column does not add due to rounding
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
May 3, May 5, February 2,
200820072008
----------- ----------- -----------
(unaudited) (unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $46,997 $41,424 $50,307
Accounts receivable, net 75,780 61,474 62,035
Income taxes receivable - 11,674 -
Inventories, net970,543 818,432 887,364
Prepaid expenses and other current
assets 53,227 40,771 50,274
Deferred income taxes20,131 1,294 19,714
----------- ----------- -----------
Total current assets1,166,678 975,069 1,069,694
Property and equipment, net 547,024 489,726 531,779
Construction in progress - leased
facilities 31,149 14,930 23,744
Intangible assets, net 97,837 9,323 80,038
Goodwill304,386 320,045 304,366
Other assets 43,487 53,943 26,014
----------- ----------- -----------
TOTAL ASSETS $2,190,561 $1,863,036 $2,035,635
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $401,962$386,444$365,750
Accrued expenses231,510 180,736 228,816
Deferred revenue and other
liabilities 86,797 74,420 104,549
Income taxes payable 13,442 - 62,583
Current portion of other long-term
debt and capital leases251 152 250
----------- ----------- -----------
Total current liabilities 733,962 641,752 761,948
----------- ----------- -----------
LONG-TERM LIABILITIES:
Senior convertible notes172,500 172,500 172,500
Revolving credit borrowings 121,485 158,557 -
Other long-term debt and capital
leases 8,622 8,362 8,685
Non-cash obligations for
construction in progress -
leased facilities 31,149 14,930 23,744
Deferred revenue and other
liabilities204,553 181,404 180,238
----------- ----------- -----------
Total long-term liabilities 538,309 535,753 385,167
----------- ----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock851 814 848
Class B common stock262 266 263
Additional paid-in capital 425,957 346,266 416,423
Retained earnings 489,749 335,639 468,974
Accumulated other comprehensive
income 1,471 2,546 2,012
----------- ----------- -----------
Total stockholders' equity918,290 685,531 888,520
----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY$2,190,561 $1,863,036 $2,035,635
=========== =========== ===========
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands)
13 Weeks Ended
----------------------------
May 3, May 5,
2008 2007
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $20,775$21,701
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 20,400 16,402
Deferred income taxes(10,950)(4,696)
Stock-based compensation 5,370 6,902
Excess tax benefit from stock-based
compensation (848)(8,957)
Tax benefit from exercise of stock
options 159 2,484
Tax benefit from convertible bond hedge 744680
Gain on sale of asset (2,356) -
Changes in assets and liabilities:
Accounts receivable 7,922 (2,496)
Inventories(83,179) (105,995)
Prepaid expenses and other assets (16,371) (777)
Accounts payable38,456 71,021
Accrued expenses (20,147) (17,039)
Income taxes receivable / payable (48,292)12,426
Deferred construction allowances 7,324 9,136
Deferred revenue and other liabilities (5,127)(7,805)
--------- ---------
Net cash used in operating activities (86,120)(7,013)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (49,393) (45,410)
Purchase of corporate aircraft (25,107) -
Proceeds from sale of corporate
aircraft 27,463 -
Proceeds from sale-leaseback
transactions-165
Payment for purchase of Golf Galaxy,
net of $4,859 cash acquired - (221,449)
--------- ---------
Net cash used in investing activities(47,037) (266,694)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving credit borrowings, net 121,485158,557
Payments on other long-term debt and
capital leases(59) (57)
Construction allowance receipts 7,454 -
Proceeds from exercise of stock options 2,456 17,396
Excess tax benefit from stock-based
compensation 848 8,957
Decrease in bank overdraft (2,244)(5,701)
--------- ---------
Net cash provided by financing activities129,940179,152
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (93)37
NET DECREASE IN CASH AND CASH
EQUIVALENTS(3,310) (94,518)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 50,307135,942
--------- ---------
CASH AND CASH EQUIVALENTS, END OF
PERIOD$46,997$41,424
========= =========
Supplemental disclosure of cash flow
information:
Construction in progress - leased
facilities $7,405 $1,843
Accrued property and equipment $16,948$(7,647)
Cash paid for interest$2,841 $3,340
Cash paid for income taxes $72,537 $3,318
Stock options issued for acquisition
(net of tax benefit upon exercise) $7,266 $7,630
Store Count and Square Footage
The stores that opened during the first quarter of 2008 are as follows:
DICK'S GOLF GALAXY
----------------------------------------------------------------------
StoreMarket Store Market
----------------- ---------------------------------- ------------
Tempe, AZ Phoenix Towson, MDBaltimore
Huber Heights, OH DaytonPembroke Pines, FLMiami
Portland, OR Portland Fairview Heights, IL St. Louis
Williamsburg, VA Virginia BeachMontgomeryville, PA Philadelphia
Ocala, FL Ocala
Montgomery, ALMontgomery
Tupelo, MSTupelo
Noblesville, IN Indianapolis
The following represents a reconciliation of beginning and ending stores
and square footage for the periods indicated:
Fiscal 2008Fiscal 2007
------------------------------- -----------------------
Dick's Chick's Dick's
Sporting Golf Sporting Sporting Golf
Goods Galaxy GoodsTotal GoodsGalaxy Total
-------- ------ -------- ----- -------- ------ ------
Beginning stores 340 79 15 434 294 65 359
Q1 New8 4 - 1215 1025
-------- ------ -------- ----- -------- ------ ------
Ending stores 348 83 15 446 309 75 384
======== ====== ======== ===== ======== ====== ======
Relocated stores- - -- - - -
======== ====== ======== ===== ======== ====== ======
Square Footage:
(in millions)
Dick's Chick's
Sporting Golf Sporting
Goods Galaxy GoodsTotal
-------- ------ -------- -----
Q1 2007 17.41.1 - 18.5
Q2 2007 17.81.1 - 18.9
Q3 2007 19.01.2 - 20.2
Q4 2007 19.01.30.8 21.1
-------- ------ -------- -----
Q1 2008 19.51.30.8 21.6
Non-GAAP Financial Measures
In addition to reporting the Company's financial results in accordance
with generally accepted accounting principles ("GAAP"), the Company provides
information regarding net income and earnings per diluted share adjusted for
the gain on sale of asset, pro-forma comparable store sales, earnings before
interest, taxes and depreciation ("EBITDA") as well as a reconciliation from
the Company's gross capital expenditures, net of tenant allowances. The
following measures are considered non-GAAP and are not preferable to GAAP
financial information; however, the Company believes this information provides
additional measures of performance that the Company's management, analysts and
investors can use to compare core, operating results between reporting
periods. These non-GAAP measures are provided below and on the Company's
website at http://www.dickssportinggoods.com/ (click on the Investor Relations
link at the top of the home page). The Company's website is not part of this
press release.
Pro-forma Net Income and Proforma Earnings Per Share Reconciliation
(in thousands, except per share data):
13 Weeks Ended
May 3, 2008
-----------------------
Per
Amounts Share
---------------
Net income and earnings per diluted share (GAAP) $20,775 $0.18
Less: Gain on sale of asset, after tax (1,402) (0.01)
---------------
Pro-forma net income and earnings per share $19,373 $0.17
===============
Pro-forma Comparable Store Sales
The following pro-forma comparable store sales present information as if
Golf Galaxy had been acquired at the beginning of the periods presented. The
sales have been adjusted to conform to the Company's reporting calendar and
method of reporting comparable sales. Golf Galaxy will be included in the
quarterly comparable store base beginning in Q2 2008, which will be the first
full quarter following the anniversary of the date of acquisition.
Dick's
Sporting Golf
Goods Galaxy Consolidated
--------- -------- ------------
13 weeks ended May 5, 2007 2.0%5.5%2.3%
13 weeks ended May 5, 2007 - shifted(1)0.1%0.8%0.1%
13 weeks ended May 3, 2008-3.8% -7.4% -4.1%
(1) Adjusted for the shifted retail calendar
EBITDA
EBITDA should not be considered as an alternative to net income or any
other generally accepted accounting principles measure of performance or
liquidity. EBITDA, as the Company has calculated it, may not be comparable to
similarly titled measures reported by other companies. EBITDA is a key metric
used by the Company that provides a measurement of profitability that
eliminates the effect of changes resulting from financing decisions, tax
regulations, and capital investments.
13 Weeks Ended
-------------------------
May 3,May 5,
EBITDA 2008 2007
---------------------------------------- -------- --------
(dollars in thousands)
Net income $20,775 $21,701
Provision for income taxes 14,14114,383
Interest expense, net1,658 3,207
Depreciation and amortization 20,40016,402
Less: Gain on sale of asset 2,356 -
------- -------
EBITDA $54,618 $55,693
======= =======
% decrease in EBITDA -2%
Reconciliation of Gross Capital Expenditures to Capital Expenditures
The following table represents a reconciliation of the Company's gross
capital expenditures to its capital expenditures, net of tenant allowances.
13 Weeks Ended
-------------------------
May 3,May 5,
2008 2007
--------- ---------
(dollars in thousands)
Gross capital expenditures$(49,393) $(45,410)
Proceeds from sale-leaseback
transactions - 165
Changes in deferred construction
allowances 7,324 9,136
Construction allowance receipts 7,454 -
--------- ---------
Net capital expenditures $(34,615) $(36,109)
========= =========
SOURCE Dick's Sporting Goods, Inc.
