LOS ANGELES, July 30 CA-SPCHA-Q1-09-earns
LOS ANGELES, July 30 /PRNewswire-FirstCall/ -- Sport Chalet, Inc.
(Nasdaq: SPCHA, SPCHB) today announced financial results for its first fiscal
quarter ended June 29, 2008.
First Quarter Results
Sales decreased 4.8% to $87.1 million for the first quarter of fiscal 2009
from $91.6 million for the first quarter of fiscal 2008. Eight new stores not
included in same store sales contributed $5.5 million in sales for the quarter
while same store sales decreased 11.1%. Same store sales were negatively
impacted primarily by soft macroeconomic conditions and to a lesser extent,
new store openings by the Company and competitors in certain markets.
Gross profit as a percent of sales was 26.1% compared to 28.6% for the
first quarter of last year. The decline was primarily due to increased rent
as a percent of sales in newer stores. Selling, general and administrative
expenses as a percent of sales increased to 29.8% from 25.9% in the same
period last year, reflecting the decrease in comparable store sales and the
expenses associated with new stores which take time to ramp up.
Net loss for the first quarter of 2009 was $4.5 million, or $0.32 per
diluted share, compared to a net loss of $664,000, or $0.05 per diluted share,
for the first quarter last year.
Craig Levra, Chairman and CEO, stated, "We continue to confront a
difficult macroeconomic environment, which has more heavily affected the
western states where we operate. Through the team's hard work and our systems
enhancements, we are closely managing the operational areas of the business
within our control. We were deliberate with our markdown strategy to help
drive our top line while also preserving gross margin where possible.
Further, by more aggressively managing inventory we ended the quarter with
average store inventory levels 7% below the same period last year and, at the
same time, maintained fresh and relevant merchandise in our stores. Our
efforts to control certain expenses across different areas of our business
also gained traction during the quarter. Importantly, our commitment to
offering "expert" advice and a great experience for our customers remains
unchanged. We are confident that we are taking the right steps in the
near-term to not only help us navigate the current environment but also more
strongly position our company for growth when the economy improves."
Conference Call and Webcast
Sport Chalet will host a conference call and audio webcast today at
2:00 p.m. (Pacific) to discuss the financial results for the first quarter.
The conference call may be accessed by dialing (706) 634-4840 and also via
audio webcast at: http://www.sportchalet.com or http://www.earnings.com. A
replay of the conference call will be available through Wednesday, August 13,
2008 by dialing (706) 645-9291 (conference ID 57311905) and an archive of the
webcast will be available for 90 days following the conclusion of the
conference call at http://www.sportchalet.com.
About Sport Chalet, Inc.
Sport Chalet, founded in 1959 by Norbert Olberz, is a leading operator of
full service specialty sporting goods stores in California, Nevada, Arizona
and Utah. The Company offers over 50 services for the serious sports
enthusiast, including backpacking, canyoneering, and kayaking instruction,
custom golf club fitting and repair, snowboard and ski rental and repair,
SCUBA training and certification, SCUBA boat charters, team sales, racquet
stringing, and bicycle tune-up and repair throughout its 52 locations. The
address for Sport Chalet's web site is http://www.actionpass.com and
http://www.sportchalet.com.
Disclosure Regarding Forward-Looking Statements
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 that may cause
the Company's actual results in future periods to differ materially from
forecasted results. Those risks include, among other things, the competitive
environment in the sporting goods industry in general and in the Company's
specific market areas, inflation, the challenge of implementing the Company's
expansion plans and maintaining its competitive position, changes in costs of
goods and services, the weather and economic conditions in general and in
specific market areas. These and other risks are more fully described in the
Company's filings with the Securities and Exchange Commission.
SPORT CHALET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
First fiscal quarter
2009 2008
(in thousands, except per share amounts)
Net sales $87,120 $91,554
Cost of goods sold, buying and
occupancy costs64,41265,401
Gross profit22,70826,153
Selling, general and administrative
expenses 25,96923,746
Depreciation and amortization3,611 3,163
Loss from operations(6,872) (756)
Interest expense 657 359
Loss before taxes (7,529) (1,115)
Income tax benefit (3,003) (451)
Net loss $(4,526)$(664)
Loss per share:
Basic $(0.32) $(0.05)
Diluted $(0.32) $(0.05)
Weighted average number of common shares
outstanding:
Basic 14,12314,016
Diluted 14,12314,016
SPORT CHALET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 29, March 30,
2008 2008
(Unaudited)
Assets(in thousands, except share amounts)
Current assets:
Cash and cash equivalents $3,442$3,894
Accounts receivable, net 2,508 1,359
Merchandise inventories 93,58686,145
Prepaid expenses and other current assets 5,042 6,170
Prepaid income taxes - 1,405
Deferred income taxes 7,510 3,349
Total current assets 112,088 102,322
Fixed assets, net 68,75666,619
Deferred income taxes2,631 2,374
Total assets$183,475 $171,315
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $37,098 $28,035
Loan payable to bank 21,86517,216
Salaries and wages payable 3,190 4,620
Other accrued expenses17,76413,254
Total current liabilities 79,91763,125
Deferred rent 24,03324,221
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 2,000,000
Issued and outstanding shares - none- -
Class A Common Stock, $.01 par value:
Authorized shares - 46,000,000
Issued and outstanding shares
- 12,359,990 at June 29, 2008 and
March 30, 2008 124 124
Class B Common Stock, $.01 par value:
Authorized shares - 2,000,000
Issued and outstanding shares
- 1,763,321 at June 29, 2008 and
March 30, 2008 1818
Additional paid-in capital34,17634,094
Retained earnings 45,20749,733
Total stockholders' equity 79,52583,969
Total liabilities and stockholders'
equity $183,475 $171,315
SPORT CHALET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
First fiscal quarter
2009 2008
(in thousands)
Operating activities
Net loss $(4,526)$(664)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization3,611 3,163
Loss on disposal of equipment - 6
Share-based compensation7244
Deferred income taxes (4,418) (220)
Changes in operating assets and
liabilities:
Accounts receivable(1,149) (208)
Merchandise inventories(7,441) (3,732)
Prepaid expenses and other
current assets 1,128 (29)
Prepaid income taxes1,405 (498)
Accounts payable9,063 6,005
Salaries and wages payable (1,430) (1,630)
Other accrued expenses 4,510(2,344)
Deferred rent(188) 631
Net cash provided by operating activities 637 524
Investing activities
Purchase of fixed assets(5,748) (5,823)
Net cash used in investing activities (5,748) (5,823)
Financing activities
Proceeds from bank borrowing30,12129,337
Repayments of bank borrowing (25,472) (23,454)
Proceeds from exercise of stock options- 192
Tax benefit on employee stock options 10 267
Net cash provided by financing activities4,659 6,342
Increase (decrease) in cash and cash
equivalents (452)1,043
Cash and cash equivalents at beginning of
period 3,894 3,841
Cash and cash equivalents at end of period $3,442$4,884
Supplemental Disclosure of Cash Flow
Information
Cash paid during the period for:
Income taxes$ - $ -
Interest 318 318
SOURCE Sport Chalet, Inc.
