Here’s the full press statement and PRL:
PITTSBURGH, Nov. 18: Dick’s Sporting Goods, Inc. (NYSE:DKS) today reported sales and earnings results for the third quarter ended November 1, 2003.
Net income for the third quarter ended November 1, 2003 increased 68% to $4.7
million and earnings per share increased 29% to $0.18 per diluted share as compared
to net income of $2.8 million and earnings per share of $0.14 per diluted share for
the quarter ended November 2, 2002. Total sales for the quarter increased 16% to
$338.2 million. Comparable store sales increased 2.5% compared to a 5.1% comparable
store sales increase in the prior year. Net income increased 62% and earnings per share increased 38% compared to pro-forma
net income of $2.9 million or $0.13 per diluted share in the third quarter of last
year. Prior period pro-forma results include a reduction of interest expense and an
increase in diluted shares as if the Company had consummated its initial public
offering at the beginning of the third quarter last year rather than on the October
15, 2002 effective date. No pro-forma adjustments have been made to the current
quarter earnings. The Company noted that the following were included in this year’s third quarter
results: – Net income included $1.3 million of non-cash, after-tax expense related
to the closing of two women’s apparel concept test stores.
– Net income also included an after-tax gain of $1.4 million resulting
from the sale of a portion of the Company’s non-cash investment in its
third party internet commerce provider. Excluding these items, net income for the third quarter would have been $4.6
million, while earnings per share would have remained unchanged at the reported
$0.18 per diluted share. "The associates at Dick’s continued to execute in the third quarter as evidenced by
delivering a 2.5% comp sales gain despite a difficult comparison while opening 11
new stores during the quarter," said Edward W. Stack, Chairman and CEO.
"Additionally we’re building for the future by adding to an already strong
management team. Joining us are Bill Newlin, EVP & Chief Administrative Officer,
Jerel Hollens, SVP – Supply Chain and Denny Feldman, VP – GMM Lodge & Bikes." Third Quarter Store Openings During the third quarter, the Company opened 11 new stores. Five of these stores
were in new markets: Watertown, NY; Plattsburgh, NY; Waterford, CT; Roanoke, VA;
and Charlottesville, VA. Six of the stores opened were in existing markets:
Garner, NC (the fifth store in the Raleigh/Durham market); Short Pump, VA (the third
store in the Richmond market); Manassas, VA and Waldorf, MD (the second and third
stores in the Washington, D.C. market); Millbury, MA (the second store in the
Worcester market); and Smithfield, RI (the third store in the Providence market).
As of November 1, 2003, the Company operated 162 stores in 27 states. Year-to-date Results Net income for the 39 weeks ended November 1, 2003 increased 40% to $26.8 million
and earnings per share increased 10% to $1.08 per diluted share as compared to net
income of $19.2 million and earnings per share of $0.98 per diluted share for the 39
weeks ended November 2, 2002. Total sales for the 39 weeks ended November 1, 2003
increased 14% to $996.4 million. Comparable store sales increased 1.0%. Net income increased 37% and earnings per share increased 23% compared to pro-forma
net income of $19.6 million or $0.88 per diluted share for the 39 weeks ended
November 2, 2002. Prior period pro-forma results include a reduction of interest
expense and an increase in diluted shares as if the Company had consummated its
initial public offering at the beginning of the first quarter last year rather than
on the October 15, 2002 effective date. Fourth Quarter and Full Year Outlook The Company’s current outlook for the full year and fourth quarter of 2003 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. Fourth Quarter 2003 – Based on an estimated 25.8 million fully-diluted shares outstanding,
EPS for the fourth quarter is expected to be $0.91 – 0.92 per diluted
share, an 11 – 12% increase over the prior year’s fourth quarter EPS of
$0.82. The prior year’s fourth quarter included a non-cash after-tax
charge of $1.4 million, or $0.06 per diluted share. Excluding last
year’s charge, EPS is expected to increase 3 – 5%. – Net income is expected to be $23.5 – 23.7 million, compared to last
year’s net income of $19.1 million in the fourth quarter, an increase
of 23 – 24%. Excluding the charge in the prior year’s fourth quarter,
net income is expected to increase 15 – 16%. – The Company opened its last store for the year in November (Allentown,
PA), bringing the total for the year to 22 stores. – Comparable store sales are expected to increase 1-2%. Full Year 2003 The Company increased guidance for the full year. – Based on an estimated 25.2 million fully-diluted shares outstanding,
the Company is raising its earlier guidance from $1.95 and now expects
to report EPS for the full year of $1.99 – 2.00 per diluted share,
compared to pro-forma EPS of $1.72 in the prior year (or $1.87 on a
GAAP basis) and $1.78 excluding the non-cash charge taken in last
year’s fourth quarter. – Net income is expected to be $50.2 – $50.4 million, compared to last
year’s pro-forma net income of $38.6 million (or $38.3 million on a
GAAP basis) and $40.0 million excluding the non-cash charge taken in
the fourth quarter. – Comparable store sales are expected to increase approximately 1-2%. Conference Call Info
The Company will be hosting a conference call today at 10:00 am Eastern time to
discuss the third 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 44287556. The dial-in replay will be available for 7 days
following the live call. 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. 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 are more fully described in the
Company’s Annual Report on Form 10-K as filed with the Securities and Exchange
Commission on April 29, 2003. The Company 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. About Dick’s Sporting Goods, Inc. Pittsburgh-based 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 November 1, 2003, the
Company operated 162 stores in 27 states throughout the Eastern half of the U.S. http://www.dickssportinggoods.com DICK’S SPORTING GOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
(in thousands, except per share data) GAAP Pro-Forma
13 Weeks Ended 13 Weeks Ended
———————— ————–
November 1, November 2, November 2,
2003 2002 2002
———– ———– ———–
Net sales $338,164 $290,616 $290,616 Cost of goods sold, including
occupancy and distribution costs 249,325 218,487 218,487
———– ———– ———– GROSS PROFIT 88,839 72,129 72,129 Selling, general and
administrative expenses 80,210 64,984 64,984 Pre-opening expenses 2,594 1,649 1,649
———– ———– ———– INCOME FROM OPERATIONS 6,035 5,496 5,496 Gain on sale of investment 2,324 – –
Interest expense, net 504 907 724
———– ———– ———– INCOME BEFORE INCOME 7,855 4,589 4,772
TAXES Provision for income taxes 3,142 1,835 1,909
———– ———– ———– NET INCOME $4,713 $2,754 $2,863
=========== =========== ===========
EARNINGS PER COMMON SHARE:
Basic $0.20 $0.16 $0.15
Diluted $0.18 $0.14 $0.13 WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 23,215 17,365 19,619
Diluted 25,584 19,992 22,243
DICK’S SPORTING GOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – UNAUDITED
(in thousands, except per share data) GAAP Pro-Forma
39 Weeks Ended 39 Weeks Ended
———————— ————–
November 1, November 2, November 2,
2003 2002 2002
———– ———– ———– Net sales $996,413 $877,375 $877,375 Cost of goods sold, including
occupancy and distribution costs 728,179 654,853 654,853
———– ———– ———– GROSS PROFIT 268,234 222,522 222,522 Selling, general and
administrative expenses 219,295 183,007 183,007 Pre-opening expenses 6,212 4,861 4,861
———– ———– ———– INCOME FROM OPERATIONS 42,727 34,654 34,654 Gain on sale of investment 3,536 – –
Interest expense, net 1,545 2,647 2,026
———– ———– ———–
INCOME BEFORE INCOME 44,718 32,007 32,628
TAXES Provision for income taxes 17,887 12,803 13,051
———– ———– ———– NET INCOME $26,831 $19,204 $19,577
=========== =========== =========== EARNINGS PER COMMON SHARE:
Basic $1.22 $1.13 $1.00
Diluted $1.08 $0.98 $0.88 WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 22,031 17,006 19,606
Diluted 24,927 19,512 22,198
DICK’S SPORTING GOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS – UNAUDITED
(Dollars in thousands) November 1, November 2, February 1,
2003 2002 2003
———– ———– ———–
ASSETS
CURRENT ASSETS:
Cash $14,694 $16,001 $11,120
Accounts receivable, net 25,826 16,997 16,391
Inventories, net 370,356 296,909 233,497
Prepaid expenses and other current
assets 6,306 6,483 5,572
Deferred income taxes 12,836 5,331 8,697
———– ———– ———– Total current assets 430,018 341,721 275,277 Property and equipment, net 86,340 76,853 80,109
Construction in progress – leased
facilities 10,767 – –
Other assets 22,177 15,439 20,840
———– ———– ———– TOTAL ASSETS $549,302 $434,013 $376,226
=========== =========== =========== LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable $175,561 $140,258 $125,208
Accrued expenses 62,200 56,451 59,239
Deferred revenue and other
liabilities 25,434 13,173 22,752
Income taxes payable – – 12,763
Current portion of long-term debt and
capital leases 479 211 213
———– ———– ———–
Total current liabilities 263,674 210,093 220,175
———– ———– ———– LONG-TERM LIABILITIES:
Revolving credit borrowings 50,141 98,542 –
Long-term debt and capital leases 3,561 3,416 3,364
Non-cash obligations for construction
in progress – leased facilities 10,767 – –
Deferred revenue and other liabilities 13,019 12,127 12,188
———– ———– ———–
Total long-term liabilities 77,488 114,085 15,552
———– ———– ———–
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Preferred Stock – – –
Common stock 162 113 126
Class B common stock 71 83 77
Additional paid-in capital 167,544 124,479 130,071
Retained earnings (accumulated
deficit) (A) 37,056 (8,835) 10,225
Note receivable for common stock – (6,196) –
Accumulated other comprehensive
income 3,307 191 –
———– ———– ———–
Total stockholders’ equity 208,140 109,835 140,499
———– ———– ———–
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $549,302 $434,013 $376,226
=========== =========== =========== (A) Includes $63,897 of accretion on previously outstanding redeemable
preferred stock to its redemption value through a charge to accumulated
deficit.
DICK’S SPORTING GOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED
(Dollars in thousands)
39 Weeks Ended
————————–
November 1, November 2,
2003 2002
———— ————
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $26,831 $19,204
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation and amortization 12,993 10,077
Deferred income taxes (4,053) (112)
Tax benefit from exercise of stock
options 23,594 –
Gain on sale of investment (3,536) –
Other non-cash items 2,067 –
Changes in assets and liabilities:
Accounts receivable (7,472) (2,581)
Inventories (136,859) (94,502)
Prepaid expenses and other assets 538 (2,634)
Accounts payable 43,530 41,106
Accrued expenses 2,961 8,618
Income taxes payable (12,763) (5,728)
Deferred revenue and other
liabilities 2,681 (4,508)
———— ————
Net cash used in operating activities (49,488) (31,060)
———— ———— CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale-leaseback
transactions 12,100 5,497
Capital expenditures (32,562) (20,528)
Increase in recoverable costs from
developed properties (1,963) –
Proceeds from sale of investment 4,150 –
———— ————
Net cash used in investing activities (18,275) (15,031)
———— ———— CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving credit borrowings, net 50,141 21,468
Borrowings (payments) on long-term
debt and capital leases 463 (158)
Proceeds from sale of common stock in
initial public offering – 30,935
Proceeds from sale of common stock
under employee stock purchase plan 1,342 –
Proceeds from exercise of stock
options 12,385 292
Increase in bank overdraft 6,823 3,579
Other 183 (3,000)
———— ————
Net cash provided by financing activities 71,337 53,116
———— ———— NET INCREASE IN CASH 3,574 7,025 CASH, BEGINNING OF PERIOD 11,120 8,976
———— ————
CASH, END OF PERIOD $14,694 $16,001
============ ============
Supplemental non-cash investing and
financing activities:
Construction in progress – leased
facilities $10,767 $-
Regulation G Reconciliations The Company believes the use of pro-forma results for prior periods
provides a more meaningful comparison to the current period results due to
the significant increase in share count since October 15, 2002 when the
Company completed its initial public offering, and the related reduction
in interest expense due to the application of the net proceeds thereof.
The reconciliations of the pro-forma financial information to the most
directly comparable GAAP financial information is presented below
(in millions, except per share data): 13 Weeks 39 Weeks
Ended Ended Year Ended
November 2 November 2 February 1,
2002 2002 2003
———- ———- ———–
Net income $2.8 $19.2 $38.3
Interest expense
reduction (after tax) 0.1 0.4 0.3
———- ———- ———–
Pro-forma net income $2.9 $19.6 $38.6
========== ========== =========== Diluted shares 20.0 19.5 20.5
Public offering adjustment 2.2 2.7 2.0
———- ———- ———–
Pro-forma diluted shares 22.2 22.2 22.5
========== ========== ===========
Pro-forma diluted earnings per share $0.13 $0.88 $1.72
The Company believes the use of adjusted net income for the current period
provides a further understanding as compared to the prior period results
due to the current period containing non-cash expenses related to the
closing of two concept stores associated with a women’s apparel store
test, and also containing a gain from the sale of a portion of the
Company’s non-cash investment in its third party internet commerce
provider. The reconciliation of adjusted net income and adjusted diluted
earnings per share to the most directly comparable GAAP financial
information is presented below (in millions, except per share data): 13 Weeks Ended
November 1,
2003
————–
Net income $4.7
Closing of two concept stores (after tax) 1.3
Gain on sale of investment (after tax) (1.4)
————–
Adjusted net income $4.6
==============
Diluted shares 25.6 Adjusted diluted earnings per share $0.18
The Company believes the use of adjusted net income and adjusted EPS for
the prior year’s fourth quarter and full year provides a more meaningful
comparison as compared to the current year forecasted fourth quarter and
full year results due to the prior year’s fourth quarter and full year
containing a non-cash charge against the Company’s non-cash investment in
its third party internet commerce provider. The reconciliation of adjusted net income and adjusted diluted earnings
per share to the most directly comparable GAAP financial information is
presented below (in millions, except per share data): 13 Weeks Ended Year Ended
February 1, February 1,
2003 2003
————- ————
Net income $19.1 $38.3
Loss on write-down of non-cash
investment (after tax) 1.4 1.4
Interest expense reduction (after
tax) – 0.3
————- ————
Adjusted net income $20.5 $40.0
============= ============ Diluted shares 23.3 22.5
Adjusted diluted earnings per share $0.88 $1.78