Big 5 Sporting Goods Corporation Announces Preliminary Fiscal 2005
First Quarter Results - First Quarter Fiscal 2005 Diluted EPS
Increases to $0.32 Versus Preliminarily Restated Diluted EPS of
$0.29 EL SEGUNDO, Calif., May 4 /PRNewswire-FirstCall/ -- Big 5
Sporting Goods Corporation (NASDAQ:BGFVE), a leading sporting goods
retailer, today reported preliminary financial results for the
fiscal 2005 first quarter that ended on April 3, 2005. For the
fiscal 2005 first quarter, net sales increased by $8.1 million, or
4.5%, to $189.9 million from net sales, as preliminarily restated
to include adjustments relating to the previously announced
establishment of a sales return reserve, of $181.8 million in the
first quarter of 2004. Same store sales increased 1.7% during the
first fiscal quarter versus the comparable 13-week period last
year, representing the Company's 37th consecutive quarterly
increase in same store sales over comparable prior periods. Net
income increased to $7.2 million, or $0.32 per diluted share, for
the fiscal 2005 first quarter, compared with net income, as
preliminarily restated, of $6.6 million, or $0.29 per diluted
share, in the fiscal 2004 first quarter. "We are pleased to report
a strong start to our fiscal 2005," said Steven G. Miller, Big 5's
Chairman, President and Chief Executive Officer. "We operated with
one less business day during the quarter due to the shift in the
timing of the Easter holiday and overcame unfavorable weather
conditions in a majority of our markets to achieve our 37th
consecutive quarterly increase in same store sales. We were up in
each of our three major merchandise categories for the quarter,
with footwear being our strongest performing category, followed by
apparel and hardgoods. We believe that we are well positioned to
continue our consistently solid performance in the second quarter
and throughout the year." Accounting Restatements The Company
previously announced that it would restate its prior reported
financial statements for fiscal years 2002 and 2003, and the
quarterly periods of fiscal years 2002, 2003 and 2004, in order to
correct an accounting error and to make adjustments relating to the
previously disclosed establishment of a sales return allowance as
well as the Company's accounting treatment for leases. Due to the
focused but time-consuming review being conducted by the Company
and its independent professional advisors, the Company's financial
statements and the associated audit by KPMG LLP, the Company's
independent registered public accounting firm, have not been able
to be completed in order to permit the filing of the Company's
Annual Report on Form 10-K for fiscal 2004. Accordingly, results
for the fiscal 2005 first quarter as well as the comparative
results from prior periods that are provided herein are provided on
a preliminary basis. Management does not believe that the ongoing
review of its prior reported financial statements will identify any
other material errors or adjustments than those the Company has
already reported or result in any material change to the Company's
financial information contained herein. The Company is working
diligently to complete the review process and file its Annual
Report on Form 10-K as quickly as possible. Declaration of
Quarterly Cash Dividend Big 5 also announced that its Board of
Directors has voted to declare a cash dividend, at an annual rate
of $0.28 per share of outstanding common stock. The next quarterly
dividend, of $0.07 per share, will be paid on June 15, 2005, to
stockholders of record as of June 1, 2005. Store Openings The
Company ended the fiscal 2005 first quarter operating 309 stores,
opening one new store during the quarter, which was a relocation.
Subsequent to the end of the quarter, the Company opened one new
store, in the Denver, Colorado market, and is currently operating
310 stores. The Company anticipates opening between 16 and 20 net
new stores in fiscal 2005. EPS Guidance Big 5 expects to realize
same store sales growth in the low single-digit range for the
second fiscal quarter of 2005, resulting in earnings per diluted
share in the range of $0.34 to $0.37. It should be noted that the
impact of the restatements on previously reported fiscal 2004
second quarter earnings is preliminarily estimated to be a
reduction of $0.02 per diluted share, to $0.31 per diluted share,
including a $0.02 debt redemption charge. For the 2005 fiscal year,
the Company expects same store sales growth in the low single-digit
range, resulting in earnings per diluted share of $1.70 to $1.80,
excluding a charge of $0.09 per diluted share associated with
anticipated expenses related to the Company's transition to its new
distribution center. The Company expects 2005 fiscal year earnings
per diluted share of $1.61 to $1.71, including expenses related to
the Company's transition to its new distribution center. The second
quarter and fiscal year guidance, both as adjusted and as
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"), also do not include charges that will be
incurred after the first fiscal quarter for expenses relating to
the restatements because the Company is unable to adequately
estimate those expenses at this time. Conference Call Information
Big 5 will host a conference call and audio webcast today at 2:00
p.m. (Pacific) to discuss financial results for the quarter ended
April 3, 2005. The webcast will be available at
http://www.big5sportinggoods.com/ and archived for three months.
About Big 5 Sporting Goods Corporation Big 5 is a leading sporting
goods retailer in the United States, operating 310 stores in 10
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 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,
changes in interest rates 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/A filed on October 25, 2004 and its Quarterly Report
on Form 10-Q for the quarter ended September 26, 2004. 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. BIG 5 SPORTING GOODS CORPORATION CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited and Preliminary) (in thousands,
except earnings per share data) As Preliminarily Restated(1) 13
Weeks Ended 13 Weeks Ended April 3, 2005 March 28, 2004 Net sales
$189,931 $181,767 Cost of goods sold, buying and occupancy 121,643
115,679 Gross profit 68,288 66,088 Selling and administrative
52,134 50,167 Depreciation and amortization 3,095 2,982 Operating
income 13,059 12,939 Interest expense, net 1,175 1,936 Income
before income taxes 11,884 11,003 Income tax 4,680 4,401 Net income
available to common stockholders $7,204 $6,602 Earnings per share:
Basic $0.32 $0.29 Diluted $0.32 $0.29 Shares used to calculate
earnings per share: Basic 22,678 22,664 Diluted 22,811 22,873 (1)
Reflects the Company's current estimate of the Company's operating
results after taking into account the impact of the proposed
restatement discussed above to correct an accounting error and to
make adjustments relating to the previously disclosed establishment
of a sales return allowance as well as the Company's accounting
treatment for leases BIG 5 SPORTING GOODS CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited and Preliminary) (in
thousands) April 3, January 2, 2005 2005 Assets Current assets Cash
$8,079 $6,746 Merchandise inventory 203,251 192,564 Other current
assets 11,589 13,323 Total current assets 222,919 212,633 Property
and equipment, net 62,752 59,732 Other long-term assets 18,672
19,290 Total assets $304,343 $291,655 Liabilities and Stockholders'
Equity Accounts payable $87,771 $83,043 Other current liabilities
45,798 54,740 Deferred rent 16,356 16,393 Long-term debt 95,377
81,335 Total liabilities 245,302 235,511 Net stockholders' equity
59,041 56,144 Total liabilities and stockholders' equity $304,343
$291,655 BIG 5 SPORTING GOODS CORPORATION Regulation G
Reconciliation (Unaudited and Preliminary) The Company's earnings
per diluted share (EPS) guidance for fiscal 2005 excludes
anticipated expenses related to the Company's transition to its new
distribution center. The Company believes the use of adjusted EPS
for guidance for fiscal 2005 will provide additional insight into
the Company's operating results as compared to estimated earnings
per diluted share for fiscal 2005 due to the expenses the Company
expects to incur related to the Company's transition to its new
distribution center. The Company will also use this adjusted
reporting internally to evaluate its operating performance on that
same basis. The following table sets forth a reconciliation of
guidance net income per diluted share (calculated in accordance
with GAAP) to adjusted net income per diluted share excluding
anticipated expenses related to the Company's transition to its new
distribution center after tax: 52 Weeks Ended January 1, 2006
Guidance earnings per diluted share $1.61 - 1.71 Guidance
distribution center transition expenses per diluted share 0.09 -
0.09 Guidance adjusted earnings per diluted share excluding
distribution center transition expenses $1.70 - 1.80 As described
above, the Company's EPS guidance does not include charges that are
incurred after the first fiscal quarter for expenses relating to
the restatements, because the Company is unable to estimate those
expenses at this time. DATASOURCE: Big 5 Sporting Goods Corporation
CONTACT: Charles Kirk, Sr. Vice President and Chief Financial
Officer of Big 5 Sporting Goods Corporation, +1-310-536-0611; or
John Mills of Integrated Corporate Relations, Inc.,
+1-310-395-2215, for Big 5 Sporting Goods Corporation Web site:
http://www.big5sportinggoods.com/
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