DICK'S Sporting Goods Reports Second Quarter Results

- Consolidated non-GAAP earnings per diluted share increased to $0.71 in the second quarter of 2013 from $0.65 per diluted share in the second quarter of 2012

- Board authorizes quarterly dividend of $0.125 per share

Aug 20, 2013, 07:30 ET from DICK's Sporting Goods, Inc.

PITTSBURGH, Aug. 20, 2013 /PRNewswire/ -- DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S.-based full-line sporting goods retailer, today reported sales and earnings results for the second quarter ended August 3, 2013.

Second Quarter Results

The Company reported consolidated non-GAAP net income for the second quarter ended August 3, 2013 of $88.9 million, or $0.71 per diluted share, excluding an asset impairment charge, compared to the Company's expectations provided on May 21, 2013 of $0.75 to 0.77 per diluted share.  For the second quarter ended July 28, 2012, the Company reported consolidated non-GAAP net income of $81.3 million, or $0.65 per diluted share, excluding an impairment charge related to the Company's investment in JJB Sports. 

On a GAAP basis, the Company reported consolidated net income for the second quarter ended August 3, 2013 of $84.2 million, or $0.67 per diluted share.  For the second quarter ended July 28, 2012, the Company reported consolidated net income of $53.7 million, or $0.43 per diluted share.  The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."

Net sales for the second quarter of 2013 increased 6.6% to $1.5 billion.  Adjusted for the shifted calendar due to the 53rd week in 2012, consolidated same store sales decreased 0.4%, compared to the Company's guidance of an approximate 2 to 3% increase.  Second quarter 2012 consolidated same store sales increased 3.8%.  Shifted same store sales in the second quarter of 2013 for DICK'S Sporting Goods increased 0.1% while Golf Galaxy decreased 6.1%. 

Unshifted consolidated same store sales increased 1.2%, compared to the Company's guidance of an approximate 3.5 to 4.5% increase. Unshifted same store sales in the second quarter of 2013 for DICK'S Sporting Goods increased 1.9% while Golf Galaxy decreased 7.2%.  eCommerce penetration was 5.6% of total sales.

"Our second quarter results were below our guidance as a sluggish consumer environment along with higher levels of precipitation and cooler temperatures contributed to a decrease in traffic, resulting in lower than expected same store sales," said Edward W. Stack, Chairman and CEO. "Despite these challenges in the second quarter, we were able to generate record non-GAAP earnings per share."

Mr. Stack continued, "We are revising our full year guidance to a range of $2.60 to $2.65 per share, primarily due to lower sales expectations for the second half of the year, which are a result of our belief that consumers will remain relatively cautious. In order to drive traffic and respond to the consumer environment we are increasing our advertising levels, enhancing the customer experience, and investing in growth categories."

Mr. Stack concluded, "The current challenges we are facing are short-term in nature and we are actively pursuing strategies to address them. This does not change our view of the profitable long-term growth opportunities for our business."

New Stores

In the second quarter, the Company opened seven new DICK'S Sporting Goods stores. These stores are listed in a table later in the release under the heading "Store Count and Square Footage."

As of August 3, 2013, the Company operated 527 DICK'S Sporting Goods stores in 44 states, with approximately 28.7 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.4 million square feet.

Balance Sheet

The Company ended the second quarter of 2013 with approximately $135 million in cash and cash equivalents as compared to $350 million at the end of the second quarter of 2012.  As of the end of the second quarter of 2013, the Company did not have any outstanding borrowings under its $500 million revolving credit facility.  Over the course of the past twelve months, the Company utilized capital to invest in omni-channel growth, remodel stores, build a distribution center, fund shares purchased pursuant to share repurchase programs, pay a special dividend and quarterly dividends, and acquire intellectual property rights to the Field & Stream brand.

Inventory per square foot was 5.0% higher at the end of the second quarter of 2013 as compared to the end of the second quarter of 2012, while clearance inventory per square foot decreased 4.1% during the same period.

Year-to-Date Results

The Company reported consolidated non-GAAP net income for the 26 weeks ended August 3, 2013 of $149.4 million, or $1.19 per diluted share. For the 26 weeks ended July 28, 2012, the Company reported consolidated non-GAAP net income of $138.5 million, or $1.10 per diluted share.

On a GAAP basis, the Company reported consolidated net income for the 26 weeks ended August 3, 2013 of $149.0 million, or $1.18 per diluted share. For the 26 weeks ended July 28, 2012, the Company reported consolidated net income of $110.8 million, or $0.88 per diluted share.

Net sales for the first half of 2013 increased 5.4% from the first half of 2012 to $2.9 billion primarily due to the opening of new stores, partially offset by a consolidated same store sales decrease of 0.2% on an unshifted basis.

Dividend

On August 14, 2013, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.125 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on September 27, 2013 to stockholders of record at the close of business on September 6, 2013.

Current 2013 Outlook

The Company's current outlook for 2013 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as described later in this release.  Although the Company believes that the expectations and other comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations or comments will prove to be correct.

* Full Year 2013 – (52 Week Year) Comparisons to Fiscal 2012 – (53 Week Year)

  • Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated non-GAAP earnings per diluted share of approximately $2.60 to 2.65, excluding an asset impairment charge and the partial recovery of a previously impaired asset.  For the 53 weeks ended February 2, 2013, the Company reported consolidated non-GAAP earnings per diluted share of $2.53, excluding an impairment charge.  The 53rd week in fiscal 2012 contributed approximately $0.03 to earnings per diluted share.
  • Consolidated same store sales are currently expected to be approximately flat to an increase of 1% on a 52-week to 52-week comparative basis, compared to a 4.3% increase in fiscal 2012.
  • The Company expects to open approximately 40 new DICK'S Sporting Goods stores, relocate one DICK'S Sporting Goods store and complete four full and 75 partial remodels of DICK'S Sporting Goods stores in 2013. The Company also expects to open one new Golf Galaxy store and relocate one Golf Galaxy store in 2013, both of which will be in the new, larger format.
  • The Company expects to open approximately one new True Runner store and approximately two new Field & Stream stores in 2013.

* Third Quarter 2013      

  • Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $0.37 to 0.39 in the third quarter of 2013, compared to third quarter 2012 consolidated earnings per diluted share of $0.40
  • Consolidated same store sales adjusted for the shifted calendar, due to the 53rd week in 2012, are currently expected to be approximately flat to an increase of 1% in the third quarter of 2013, or decrease approximately 2 to 3% on an unshifted basis, as compared to a 5.1% increase in the third quarter of 2012.
  • The Company expects to open approximately 20 new DICK'S Sporting Goods stores, relocate one DICK'S Sporting Goods store and remodel three DICK'S Sporting Goods stores in the third quarter of 2013.
  • The Company expects to open one new True Runner store and one new Field & Stream store in the third quarter of 2013.

* Fourth Quarter 2013     

  • Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.04 to 1.07 in the fourth quarter of 2013, compared to fourth quarter 2012 consolidated earnings per diluted share of $1.03.  The 14th week in fiscal 2012 contributed approximately $0.03 to earnings per diluted share.
  • Consolidated same store sales adjusted for the shifted calendar, due to the 53rd week in 2012, are currently expected to increase approximately 3 to 4% in the fourth quarter of 2013, or  approximately negative 2 to negative 1% on an unshifted basis, as compared to a 1.2% increase in the fourth quarter of 2012.
  • The Company expects to open approximately eleven new DICK'S Sporting Goods stores and remodel one DICK'S Sporting Goods store in the fourth quarter of 2013.
  • The Company expects to open approximately one new Field & Stream store in the fourth quarter of 2013.

* Capital Expenditures

  • In 2013, the Company anticipates capital expenditures to be approximately $299 million on a gross basis and approximately $258 million on a net basis.

Conference Call Info

The Company will host a conference call today at 10:00 a.m. Eastern Time to discuss the second quarter results.  Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's website located at http://www.dickssportinggoods.com/investors.  To listen to the live call, please go to the website at least fifteen minutes early to register and download and install any necessary audio software.

In addition to the webcast, the call can be accessed by dialing (866) 652-5200 (domestic callers) or (412) 317-6060 (international callers) and requesting the "DICK'S Sporting Goods Earnings Call."

For those who cannot listen to the live webcast, it will be archived on the Company's website for 30 days. In addition, a dial-in replay of the call will be available. To listen to the replay, investors should dial (877) 344-7529 (domestic callers) or (412) 317-0088 (international callers) and enter confirmation code 10031652. The dial-in replay will be available for 30 days following the live call.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

Except for historical information contained herein, the statements in this release or otherwise made by our management in connection with the subject matter of this release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Our future performance and financial results may differ materially from those included in any such forward-looking statements and such forward-looking statements should not be relied upon by investors as a prediction of actual results. You can identify these statements as those that may predict, forecast, indicate or imply future results, performance or advancements and by forward-looking words such as "believe", "anticipate", "expect", "estimate", "predict", "intend", "plan", "project", "goal", "will", "will be", "will continue", "will result", "could", "may", "might" or other words with similar meanings. Forward-looking statements include statements regarding, among other things, our expectations for future performance, our efforts to drive traffic, our belief that current challenges are short-term and will not impact profitable long-term growth, investing in new, relocated or remodeled stores and expectations on capital expenditures.

The following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results, and could cause actual results for fiscal 2013 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by our management: ongoing economic and financial uncertainties may cause a decline in consumer spending; changes in the general economic and business conditions and in the specialty retail or sporting goods industry in particular; competition in the sporting goods industry; changes in consumer demand; limitations on the availability of attractive store locations; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings; access to adequate capital; changing laws and regulations affecting our business including the regulation of firearms and ammunition; factors affecting our vendors; litigation risks; foreign trade issues and currency exchange rate fluctuations; the loss of our key executives, especially Edward W. Stack, our Chairman and Chief Executive Officer; protection of our intellectual property; disruptions with our eCommerce services provider or of our information systems; disruption at our distribution facilities; developments with sports leagues, professional athletes or sports superstars; weather and seasonality of our business; regional risks; risks associated with strategic investments or acquisitions; labor needs; risks associated with being a controlled company; our anti-takeover provisions; our current intention to issue quarterly cash dividends; and our share repurchase activity, if any.

Known and unknown risks and uncertainties are more fully described in the Company's Annual Report on Form 10-K for the year ended February 2, 2013 as filed with the Securities and Exchange Commission ("SEC") on March 22, 2013 and in other reports filed with the SEC.  In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict or assess the impact of all such risk factors. Forward-looking statements included in this release are made as of the date of this release. We do not assume any obligation and do not intend to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the securities laws.

About DICK'S Sporting Goods, Inc.

DICK'S Sporting Goods, Inc. is an authentic full-line sports and fitness specialty omni-channel retailer offering a broad assortment of high quality, competitively-priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer.

As of August 3, 2013, the Company operated 527 DICK'S Sporting Goods stores in 44 states, 81 Golf Galaxy stores in 30 states and eCommerce websites and catalog operations for DICK'S Sporting Goods and Golf Galaxy. DICK'S Sporting Goods, Inc. news releases are available at http://www.dickssportinggoods.com/investors.  The Company's website is not part of this release.

Contact:

Andre J. Hawaux, EVP – Finance, Administration and Chief Financial Officer or Anne-Marie Megela, VP – Treasury Services and Investor Relations DICK'S Sporting Goods, Inc. investors@dcsg.com (724) 273-3400

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

13 Weeks Ended

August 3, 2013

% of

Sales (1)

July 28, 2012

% of

Sales (1)

Net sales

$

1,531,431

100.00

%

$

1,437,041

100.00

%

Cost of goods sold, including occupancy and distribution costs

1,052,101

68.70

989,261

68.84

GROSS PROFIT

479,330

31.30

447,780

31.16

Selling, general and administrative expenses

336,950

22.00

310,864

21.63

Pre-opening expenses

5,285

0.35

2,276

0.16

INCOME FROM OPERATIONS

137,095

8.95

134,640

9.37

Impairment of available-for-sale investments

32,370

2.25

Interest expense

716

0.05

1,000

0.07

Other (income) expense

(1,735)

(0.11)

54

INCOME BEFORE INCOME TAXES

138,114

9.02

101,216

7.04

Provision for income taxes

53,951

3.52

47,553

3.31

NET INCOME

$

84,163

5.50

%

$

53,663

3.73

%

EARNINGS PER COMMON SHARE:

Basic

$

0.68

$

0.45

Diluted

$

0.67

$

0.43

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

122,901

119,928

Diluted

125,593

124,533

Cash dividend declared per share

$

0.125

$

0.125

(1) Column does not add due to rounding

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

26 Weeks Ended

August 3, 2013

% of

Sales (1)

July 28, 2012

% of

Sales

Net sales

$

2,865,132

100.00

%

$

2,718,745

100.00

%

Cost of goods sold, including occupancy and distribution costs

1,974,149

68.90

1,876,358

69.02

GROSS PROFIT

890,983

31.10

842,387

30.98

Selling, general and administrative expenses

649,658

22.67

606,995

22.33

Pre-opening expenses

6,614

0.23

5,017

0.18

INCOME FROM OPERATIONS

234,711

8.19

230,375

8.47

Impairment of available-for-sale investments

32,370

1.19

Interest expense

1,385

0.05

4,449

0.16

Other income

(7,940)

(0.28)

(1,811)

(0.07)

INCOME BEFORE INCOME TAXES

241,266

8.42

195,367

7.19

Provision for income taxes

92,282

3.22

84,547

3.11

NET INCOME

$

148,984

5.20

%

$

110,820

4.08

%

EARNINGS PER COMMON SHARE:

Basic

$

1.21

$

0.92

Diluted

$

1.18

$

0.88

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

122,802

120,721

Diluted

125,728

125,768

Cash dividends declared per share

$

0.250

$

0.250

(1) Column does not add due to rounding

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(Dollars in thousands)

August 3, 2013

July 28, 2012

February 2, 2013

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

134,765

$

350,404

$

345,214

Accounts receivable, net

84,956

53,704

34,625

Income taxes receivable

2,455

7,845

15,737

Inventories, net

1,275,215

1,134,594

1,096,186

Prepaid expenses and other current assets

109,146

67,071

73,838

Deferred income taxes

46,138

27,689

30,289

   Total current assets

1,652,675

1,641,307

1,595,889

Property and equipment, net

937,310

817,427

840,135

Construction in progress - leased facilities

10,207

Intangible assets, net

97,858

75,061

98,903

Goodwill

200,594

200,594

200,594

Other assets:

   Deferred income taxes

4,114

8,196

4,382

   Other

126,920

110,148

147,904

   Total other assets

131,034

118,344

152,286

TOTAL ASSETS

$

3,019,471

$

2,862,940

$

2,887,807

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

598,263

$

561,161

$

507,247

Accrued expenses

295,010

275,158

269,900

Deferred revenue and other liabilities

111,101

101,437

146,362

Income taxes payable

12,777

68,746

Current portion of other long-term debt and leasing obligations

8,300

8,579

8,513

   Total current liabilities

1,025,451

946,335

1,000,768

LONG-TERM LIABILITIES:

Other long-term debt and leasing obligations

6,360

14,407

7,762

Non-cash obligations for construction in progress - leased facilities

10,207

Deferred income taxes

8,449

7,413

Deferred revenue and other liabilities

314,756

279,927

284,540

   Total long-term liabilities

329,565

304,541

299,715

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock

981

959

981

Class B common stock

249

250

249

Additional paid-in capital

913,580

797,620

874,236

Retained earnings

1,030,108

1,013,087

911,704

Accumulated other comprehensive income

81

106

112

Treasury stock

(280,544)

(199,958)

(199,958)

   Total stockholders' equity

1,664,455

1,612,064

1,587,324

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

3,019,471

$

2,862,940

$

2,887,807

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(Dollars in thousands)

26 Weeks Ended

August 3, 2013

July 28, 2012

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

148,984

$

110,820

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

76,314

58,100

Impairment of available-for-sale investments

32,370

Deferred income taxes

(14,545)

(10,989)

Stock-based compensation

13,925

15,207

Excess tax benefit from exercise of stock options

(15,475)

(39,863)

Tax benefit from exercise of stock options

102

3,141

Other non-cash items

290

(84)

Changes in assets and liabilities:

    Accounts receivable

(21,690)

(13,228)

    Inventories

(179,029)

(119,597)

    Prepaid expenses and other assets

(12,738)

(688)

    Accounts payable

83,458

41,925

    Accrued expenses

(15,561)

1,369

    Income taxes payable / receivable

(27,212)

6,623

    Deferred construction allowances

12,756

12,191

    Deferred revenue and other liabilities

(44,173)

(30,317)

Net cash provided by operating activities

5,406

66,980

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(95,479)

(95,158)

Purchase of JJB Sports convertible notes and equity securities

(31,986)

Proceeds from sale of other assets

11,000

Deposits and purchases of other assets

(48,469)

(44,408)

Net cash used in investing activities

(132,948)

(171,552)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on other long-term debt and leasing obligations

(1,615)

(138,611)

Construction allowance receipts

Proceeds from exercise of stock options

22,736

44,939

Excess tax benefit from exercise of stock options

15,475

39,863

Minimum tax withholding requirements

(12,877)

(5,237)

Cash paid for treasury stock

(80,603)

(198,774)

Cash dividend paid to stockholders

(33,550)

(30,417)

Increase in bank overdraft

7,558

8,823

Net cash used in financing activities

(82,876)

(279,414)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(31)

(12)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(210,449)

(383,998)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

345,214

734,402

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

134,765

$

350,404

Supplemental disclosure of cash flow information:

Construction in progress - leased facilities

$

$

10,207

Accrued property and equipment

$

77,409

$

35,213

Cash paid for interest

$

1,091

$

851

Cash paid for income taxes

$

140,712

$

92,375

Store Count and Square Footage

The stores that opened during the second quarter of 2013 are as follows:

DICK'S

Store

Market

Alliance, TX

Dallas

Dublin, CA

San Francisco

Petaluma, CA

Santa Rosa

Pensacola, FL

Pensacola

Chico, CA

Chico

Colonial Heights, VA

Richmond

Portage, MI

Kalamazoo

The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated (1):

 

Fiscal 2013

Fiscal 2012

DICK'S Sporting Goods

Golf Galaxy

Total

DICK'S Sporting Goods

Golf Galaxy

Total

Beginning stores

518

81

599

480

81

561

Q1 New stores

2

2

6

6

Q2 New stores

7

7

4

4

Ending stores

527

81

608

490

81

571

Remodeled stores

Relocated stores

1

1

 

Square Footage:

(in millions)

DICK'S Sporting Goods

Golf Galaxy

Total

Q1 2012

26.5

1.3

27.8

Q2 2012

26.7

1.3

28.0

Q3 2012

27.9

1.3

29.2

Q4 2012

28.2

1.4

29.6

Q1 2013

28.3

1.4

29.7

Q2 2013

28.7

1.4

30.1

 (1) Store count and square footage amounts do not include the Company's True Runner stores.

 

Non-GAAP Financial Measures

In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company provides information regarding net income and earnings per diluted share adjusted for certain non-recurring, infrequent or unusual items; earnings before interest, taxes and depreciation, adjusted to exclude certain significant gains and losses ("adjusted EBITDA") and a reconciliation from the Company's gross capital expenditures, net of tenant allowances. These measures are considered non-GAAP and are not preferable to GAAP financial information; however, the Company believes this information provides additional measures of performance that the Company's management, analysts and investors can use to compare core operating results between reporting periods. These non-GAAP measures are provided below and on the Company's website at http://www.dickssportinggoods.com/investors.

 

Non-GAAP Net Income and Earnings Per Share Reconciliations:

(in thousands, except per share data):

Fiscal 2013

13 Weeks Ended August 3, 2013

As Reported

Asset Impairment Charge

Non-GAAP Total

Net sales

$

1,531,431

$

$

1,531,431

Cost of goods sold, including occupancy and distribution costs

1,052,101

1,052,101

GROSS PROFIT

479,330

479,330

Selling, general and administrative expenses

336,950

(7,881)

329,069

Pre-opening expenses

5,285

5,285

INCOME FROM OPERATIONS

137,095

7,881

144,976

Interest expense

716

716

Other income

(1,735)

(1,735)

INCOME BEFORE INCOME TAXES

138,114

7,881

145,995

Provision for income taxes

53,951

3,152

57,103

NET INCOME

$

84,163

$

4,729

$

88,892

EARNINGS PER COMMON SHARE:

Basic

$

0.68

$

0.72

Diluted

$

0.67

$

0.71

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

122,901

122,901

Diluted

125,593

125,593

 

During the second quarter of 2013, the Company recorded a pre-tax $7.9 million non-cash impairment charge to reduce the carrying value of a corporate aircraft held for sale to fair market value.  The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.

 

Fiscal 2013

26 Weeks Ended August 3, 2013

As Reported

Recovery of Previously Impaired Asset

Asset Impairment Charge

Non-GAAP Total

Net sales

$

2,865,132

$

$

$

2,865,132

Cost of goods sold, including occupancy and distribution costs

1,974,149

1,974,149

GROSS PROFIT

890,983

890,983

Selling, general and administrative expenses

649,658

(7,881)

641,777

Pre-opening expenses

6,614

6,614

INCOME FROM OPERATIONS

234,711

7,881

242,592

Interest expense

1,385

1,385

Other income

(7,940)

4,342

(3,598)

INCOME BEFORE INCOME TAXES

241,266

(4,342)

7,881

244,805

Provision for income taxes

92,282

3,152

95,434

NET INCOME

$

148,984

$

(4,342)

$

4,729

$

149,371

EARNINGS PER COMMON SHARE:

Basic

$

1.21

$

1.22

Diluted

$

1.18

$

1.19

WEIGHTED AVERAGE COMMON

SHARES OUTSTANDING:

Basic

122,802

122,802

Diluted

125,728

125,728

 

During the first quarter of 2013, the Company determined that it would recover $4.3 million of its investment in JJB Sports, which it had previously fully impaired.  There is no related tax expense as the Company reversed a portion of the deferred tax valuation allowance it had previously recorded for net capital loss carryforwards it did not expect to realize at the time its investment in JJB Sports was fully impaired.  During the second quarter of 2013, the Company recorded a pre-tax $7.9 million non-cash impairment charge to reduce the carrying value of a corporate aircraft held for sale to fair market value.  The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.

 

Fiscal 2012

13 Weeks Ended July 28, 2012

As Reported

Impairment of Investments

Non-GAAP Total

Net sales

$

1,437,041

$

$

1,437,041

Cost of goods sold, including occupancy and distribution costs

989,261

989,261

GROSS PROFIT

447,780

447,780

Selling, general and administrative expenses

310,864

310,864

Pre-opening expenses

2,276

2,276

INCOME FROM OPERATIONS

134,640

134,640

Impairment of available-for-sale investments

32,370

(32,370)

Interest expense

1,000

1,000

Other expense

54

54

INCOME BEFORE INCOME TAXES

101,216

32,370

133,586

Provision for income taxes

47,553

4,734

52,287

NET INCOME

$

53,663

$

27,636

$

81,299

EARNINGS PER COMMON SHARE:

Basic

$

0.45

$

0.68

Diluted

$

0.43

$

0.65

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

119,928

119,928

Diluted

124,533

124,533

 

During the second quarter of 2012, the Company fully impaired its investment in JJB Sports and recorded a pre-tax charge of $32.4 million.  The Company recorded a deferred tax asset valuation allowance of approximately $7.9 million for a portion of the $32.4 million net capital loss carryforward that it expects not to realize as a result of the impairment of its investment in JJB Sports.

 

Fiscal 2012

26 Weeks Ended July 28, 2012

As Reported

Impairment of Investments

Non-GAAP Total

Net sales

$

2,718,745

$

$

2,718,745

Cost of goods sold, including occupancy and distribution costs

1,876,358

1,876,358

GROSS PROFIT

842,387

842,387

Selling, general and administrative expenses

606,995

606,995

Pre-opening expenses

5,017

5,017

INCOME FROM OPERATIONS

230,375

230,375

Impairment of available-for-sale investments

32,370

(32,370)

Interest expense

4,449

4,449

Other income

(1,811)

(1,811)

INCOME BEFORE INCOME TAXES

195,367

32,370

227,737

Provision for income taxes

84,547

4,734

89,281

NET INCOME

$

110,820

$

27,636

$

138,456

EARNINGS PER COMMON SHARE:

Basic

$

0.92

$

1.15

Diluted

$

0.88

$

1.10

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

120,721

120,721

Diluted

125,768

125,768

 

During the second quarter of 2012, the Company fully impaired its investment in JJB Sports and recorded a pre-tax charge of $32.4 million.  The Company recorded a deferred tax asset valuation allowance of approximately $7.9 million for a portion of the $32.4 million net capital loss carryforward that it expects not to realize as a result of the impairment of its investment in JJB Sports.

Adjusted EBITDA

Adjusted EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity.  Adjusted EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies.  Adjusted EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the effect of changes resulting from financing decisions, tax regulations and capital investments.

 

13 Weeks Ended

August 3, 2013

July 28, 2012

(dollars in thousands)

Net income

$

84,163

$

53,663

Provision for income taxes

53,951

47,553

Interest expense

716

1,000

Depreciation and amortization

43,506

30,444

EBITDA

$

182,336

$

132,660

Add: Impairment of available-for-sale investments

32,370

Adjusted EBITDA, as defined

$

182,336

$

165,030

% increase in adjusted EBITDA

10

%

 

26 Weeks Ended

August 3, 2013

July 28, 2012

(dollars in thousands)

Net income

$

148,984

$

110,820

Provision for income taxes

92,282

84,547

Interest expense

1,385

4,449

Depreciation and amortization

76,314

58,100

EBITDA

$

318,965

$

257,916

Add: Impairment of available-for-sale investments

32,370

Less: Recovery of previously impaired asset

(4,342)

Adjusted EBITDA, as defined

$

314,623

$

290,286

% increase in adjusted EBITDA

8

%

 

Reconciliation of Gross Capital Expenditures to Net Capital Expenditures

The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of tenant allowances.

 

26 Weeks Ended

August 3, 2013

July 28, 2012

(dollars in thousands)

Gross capital expenditures

$

(95,479)

$

(95,158)

Proceeds from sale-leaseback transactions

Deferred construction allowances

12,756

12,191

Construction allowance receipts

Net capital expenditures

$

(82,723)

$

(82,967)

SOURCE DICK's Sporting Goods, Inc.



RELATED LINKS

http://www.dickssportinggoods.com