EL SEGUNDO, Calif., May 1 /PRNewswire-FirstCall/ — Big 5 Sporting Goods Corporation (Nasdaq: BGFV – News), the leading sporting goods retailer in the western United States, today reported financial results for the fiscal 2003 first quarter that ended on March 30, 2003.
For the 2003 first quarter, net sales increased by $7.4 million, or 4.7%, to $164.5 million from $157.1 million in the first quarter of 2002. Same store sales increased 0.6% versus the first quarter last year, representing the company’s twenty-ninth consecutive quarterly increase in same store sales over comparable prior periods. Gross profit margin increased 0.2% during the first quarter to 35.2% from gross profit margin of 35.0% for the same period last year. Selling and administration expenses were 27.4% of net sales, compared with 26.8% of net sales for the same period last year.
Net income available to common stockholders for the 2003 first quarter, calculated in accordance with generally accepted accounting principles (GAAP), increased to $3.4 million, or $0.15 per diluted share, compared to GAAP net income available to common stockholders of $1.6 million, or $0.10 per diluted share in the same period last year. Results for the fiscal 2003 first quarter include $875,000, net of taxes, or $0.04 per diluted share, related to a charge associated with the redemption of $20.0 million face value of the company’s 10.875% senior notes. Excluding this charge, net income available to stockholders for the 2003 first quarter was $4.3 million, or $0.19 per diluted share. This compares to 2002 first quarter pro forma net income available to stockholders of $4.2 million, or $0.18 per diluted share, which excludes certain effects related to the company’s initial public offering (IPO) and exercise of the underwriters’ over-allotment option in mid-2002.
“We are delighted to have achieved our twenty-ninth consecutive quarter of positive same store sales performance and to have provided earnings that exceeded our guidance, despite a significantly challenging business environment,” said Steven G. Miller, Big 5’s chairman, president and chief executive officer. “We faced a generally lackluster retail climate, diverted consumer interest caused by the war in Iraq and, during the first half of the quarter, record warm weather conditions in our primary markets that adversely affected sales of winter-related products. We overcame these challenging circumstances and produced solid results on the strength of positive performances in our footwear, hardgoods and non-winter-related apparel categories. The fact that we performed so well during this difficult quarter is a real credit to the strength of our experienced team and proven merchandising formula.”
Big 5 also announced that during the first quarter, the company had completed the previously-announced redemption of $20.0 million face value of its 10.875% senior notes and had finalized a new three-year $140.0 million non-amortizing revolving credit facility with a group of banks led by The CIT Group.
Big 5 reports net income and earnings per diluted share in accordance with GAAP and additionally on a pro forma basis to exclude certain effects of the company’s IPO, including the exercise of the underwriters’ over-allotment option. The company raised a total of $84.0 million of net proceeds from the IPO, which occurred in June 2002, during the company’s second fiscal quarter, and the exercise of the underwriters’ over-allotment option, which occurred in July 2002, during the company’s third fiscal quarter. During the company’s third fiscal quarter, the company utilized IPO proceeds and borrowings under its credit facility to redeem all of Big 5’s outstanding senior discount notes and preferred stock and to repurchase approximately 500,000 shares of common stock from non-executive employees. The pro forma figures assume that the IPO took place at the beginning of the periods presented and exclude the effeects of certain one-time IPO-related and over-allotment expenses, use of funds generated from the reduction of the redemption premium otherwise applicable to the redemption of preferred stock to pay bonuses in connection with the IPO, interest payments and premiums payable on debt redeemed in connection with the IPO, dividends and premiums payable on preferred stock redeemed in connection with the IPO and related income tax effects. Big 5 uses this pro forma reporting internally to evaluate its operating performance without regard to certain non-recurring financial effects of the IPO and believes this presentation will provide investors with additional insight into its operating results. A reconciliation of the pro forma adjustments to GAAP appears in the financial statements portion of this release.
EPS Guidance Big 5 expects to realize same store sales in the slightly negative to low single-digit positive range for the second fiscal quarter of 2003, resulting in earnings per diluted share in the range of $0.28 to $0.31. For the fiscal year ending December 28, 2003, the company currently expects to realize same store sales in the low single-digit positive range, resulting in earnings per diluted share of $1.18 to $1.23. The quarterly estimate of earnings per diluted share is calculated in accordance with GAAP. The full-year estimate of earnings per diluted share excludes $0.04 per diluted share, recorded in the fiscal 2003 first quarter, related to the charge associated with the partial redemption of the company’s senior notes.
About Big 5 Sporting Goods Corporation
Big 5 is the leading sporting goods retailer in the western United States, operating 275 stores in 10 states under the “Big 5 Sporting Goods” name. Big 5 provides a full-line product offering of over 25,000 stock keeping units 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 future periods to differ materially from forecasted results. Those risks and uncertainties include, among other things, 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 costs of goods and economic conditions in general. Those and other risks are more fully described in Big 5’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K filed on March 31, 2003. Big 5 disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.