EL SEGUNDO, Calif., Feb. — Big 5 Sporting Goods Corporation (Nasdaq:BGFV), the leading sporting goods retailer in the western United States, today reported financial results for the fiscal 2002 fourth quarter and full year ended December 29, 2002.
For the 2002 fourth quarter, net sales increased by $6.9 million, or 4.1%, to $176.7 million from $169.8 million in the fourth quarter of 2001. Same store sales increased 0.4% versus the fourth quarter last year, representing the twenty-eighth consecutive quarterly increase in same store sales over comparable prior periods. Gross profit margin increased 0.5% during the fourth quarter to 36.1% from gross profit margin of 35.6% for the same period last year. Selling and administration expenses were 24.0% of net sales, compared with selling and administration expenses of 23.8% for the same period last year.
Net income available to common stockholders for the 2002 fourth quarter calculated in accordance with generally accepted accounting principles (GAAP) increased to $8.8 million, or $0.39 per diluted share, compared to GAAP net income available to common stockholders of $4.2 million, or $0.26 per diluted share and pro forma net income of $6.7 million or $0.29 per diluted share, for the same period last year. Financial results for 2001 include $2.5 million of after tax non-recurring expenses and others items including preferred stock dividends related to the company’s initial public offering (IPO) for which the company makes pro forma adjustments.
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 $86.4 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 effects 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.
For fiscal year 2002, net sales increased by $45.0 million, or 7.2%, to $667.5 million from $622.5 million for fiscal year 2001. Same store sales increased 4.0% over the prior fiscal year. Gross profit margin increased 1.1% to 35.6% from 34.5% for fiscal year 2001. Selling and administration expenses were 26.2% of net sales, compared with 25.7% for the last fiscal year. Pro forma selling and administration expenses, which excludes certain effects related to the IPO and over-allotment option, were 25.7% of net sales, compared with 25.7% for fiscal 2001.
Net income available to common stockholders for fiscal 2002 calculated in accordance with GAAP increased to $11.1 million, or $0.57 per diluted share, and includes $13.55 million of after tax non-recurring expenses and other items including preferred stock dividends related to the IPO for which the company makes pro forma adjustments. This compares to GAAP net income available to common stockholders for fiscal 2001 of $7.7 million, or $0.48 per diluted share, which includes $7.7 million of similar pro forma adjustments.
Pro forma net income available to common stockholders for fiscal 2002 grew to $24.6 million, or $1.09 per diluted share, from pro forma net income available to common stockholders of $15.4 million, or $0.68 per diluted share, in fiscal 2001.
“We are pleased that we were able to achieve our twenty-eighth consecutive quarter of increased same store sales and meaningfully improve net income despite the challenging retail environment and unseasonably warm weather conditions in our operating regions during the fourth quarter of 2002,” said Steven G. Miller, Big 5’s chairman, president and chief executive officer. “Our full year earnings per share results are comfortably within the range that we provided as guidance when marketing our IPO in June of last year. More importantly, our proven formula continues to work very well and we feel confident that this formula will lead to another strong performance in 2003.”
Big 5 expects to realize same store sales results in the low single-digit negative to slightly positive range during the first quarter of fiscal 2003 and in the low positive single-digit range during the last three quarters of fiscal 2003. This guidance reflects the impact of record warm weather on winter related merchandise categories throughout the company’s operating regions during the first quarter to date period, combined with the assumption of normalized weather patterns for the remainder of the quarter and year. The company currently expects earnings per diluted share to be in the range of $0.15 to $0.18 for the first quarter of fiscal 2003 and $1.18 to $1.23 for the fiscal year ending December 28, 2003. These estimates exclude approximately $0.03 per diluted share related to the charge associated with the partial redemption of the company’s senior notes. The company previously announced the partial redemption on December 31, 2002 and will record the charge in the 2003 first quarter.
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.