DICK'S Sporting Goods Reports Third Quarter Results

- Consolidated non-GAAP earnings per diluted share increased 10% to $0.45, up from $0.41 last year

- Consolidated same store sales for the third quarter increased 0.4%

- Company repurchased $150 million of common stock and also declared a $0.1375 per share quarterly dividend

Nov 17, 2015, 07:30 ET from DICK'S Sporting Goods, Inc.

PITTSBURGH, Nov. 17, 2015 /PRNewswire/ -- DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line omni-channel sporting goods retailer, today reported sales and earnings results for the third quarter ended October 31, 2015.

Third Quarter Results

The Company reported consolidated net income for the third quarter ended October 31, 2015 of $47.2 million, or $0.41 per diluted share. The Company reported consolidated net income for the third quarter ended November 1, 2014 of $49.2 million, or $0.41 per diluted share. Excluding a litigation settlement charge in the current year, net income was $51.9 million, or $0.45 per diluted share compared to the Company's expectations provided on August 18, 2015 of $0.45 to 0.48 per diluted share. The GAAP to non-GAAP reconciliation is included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."

Net sales for the third quarter of 2015 increased 7.6% to approximately $1.6 billion. Consolidated same store sales increased 0.4%, compared to the Company's guidance of an increase of 1 to 3%. Same store sales for DICK'S Sporting Goods increased 0.7%, while Golf Galaxy decreased 2.9%. Third quarter 2014 consolidated same store sales increased 1.1%.

"Our positive same store sales for the quarter reflected a strong back-to-school selling season tempered by slowing trends later in the quarter. Strength in athletic footwear, accessories and athletic apparel was moderated by the impact of record warm weather in more seasonal categories," said Edward W. Stack, Chairman and CEO. "With strong operational discipline, we generated earnings per share within our guided range." 

Mr. Stack continued, "As we look to the fourth quarter, we anticipate a more promotional environment. Our focus will be to actively manage our inventory levels, while continuing to take the appropriate actions to win share and strengthen our business for the long term." 

Omni-channel Development

eCommerce penetration for the third quarter of 2015 was 8.0% of total net sales, compared to 7.3% during the third quarter of 2014.

In the third quarter, the Company opened 27 new DICK'S Sporting Goods stores and seven new Field & Stream stores.  The Company also relocated five DICK'S Sporting Goods stores and remodeled two DICK'S Sporting Goods stores. Additionally, the Company closed one DICK'S Sporting Goods store. As of October 31, 2015, the Company operated 645 DICK'S Sporting Goods stores in 47 states, with approximately 34.4 million square feet, 75 Golf Galaxy stores in 29 states, with approximately 1.4 million square feet, and 19 Field & Stream stores in nine states, with approximately 1.0 million square feet.

Store count, square footage and new stores are listed in a table later in the release under the heading "Store Count and Square Footage."

In the beginning of the fourth quarter, the Company opened one new DICK'S Sporting Goods store and relocated one DICK'S Sporting Goods store, completing its 2015 store development program.

During fiscal 2015, the Company opened a total of 44 new DICK'S Sporting Goods stores and nine new Field & Stream stores. The Company also relocated seven DICK'S Sporting Goods stores and one Golf Galaxy store and remodeled two DICK'S Sporting Goods stores. Additionally, the Company closed one DICK'S Sporting Goods store and three Golf Galaxy stores.

Balance Sheet

The Company ended the third quarter of 2015 with approximately $74 million in cash and cash equivalents and approximately $342 million in outstanding borrowings under its revolving credit facility. Over the course of the last 12 months, the Company continued to invest in omni-channel growth, while returning over $360 million to shareholders through share repurchases and quarterly dividends. The Company expects to end fiscal 2015 with no outstanding borrowings under the revolving credit facility.

Total inventory increased 13.1% at the end of the third quarter of 2015 as compared to the end of the third quarter of 2014. The Company is working with its vendors to reduce its exposure to slow-selling merchandise by returning product, canceling orders and securing markdown allowances. 

Year-to-Date Results

The Company reported consolidated net income for the 39 weeks ended October 31, 2015 of $201.4 million, or $1.71 per diluted share. For the 39 weeks ended November 1, 2014, the Company reported consolidated net income of $188.7 million, or $1.55 per diluted share.

The Company reported consolidated non-GAAP net income for the 39 weeks ended October 31, 2015 of $206.1 million, or $1.75 per diluted share. For the 39 weeks ended November 1, 2014, the Company reported consolidated non-GAAP net income of $192.2 million, or a $1.58 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 39 weeks ended October 31, 2015 increased 8.1% from last year's period to approximately $5.0 billion, reflecting the opening of new stores and a 0.9% increase in consolidated same store sales.

Capital Allocation

During the third quarter of 2015, the Company repurchased approximately 3.2 million shares of its common stock at an average cost of $46.93 per share, for a total cost of $150 million. During the current fiscal year, the Company has repurchased approximately 5.8 million shares of its common stock at an average cost of $51.51 per share, for a total cost of $300 million. Since starting its $1 billion share repurchase authorization at the beginning of fiscal 2013, the Company has repurchased over $755 million of common stock, and has approximately $245 million remaining under the authorization.

On November 12, 2015, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.1375 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on December 31, 2015 to stockholders of record at the close of business on December 11, 2015.

Current 2015 Outlook

The Company's current outlook for 2015 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 2015        
    • Based on an estimated 117 million diluted shares outstanding, the Company currently anticipates reporting consolidated non-GAAP earnings per diluted share in the range of $2.85 to 3.00, excluding a litigation settlement charge. The Company's consolidated earnings per diluted share guidance contemplates the $300 million of share repurchases executed in 2015. For the 52 weeks ended January 31, 2015, the Company reported consolidated earnings per diluted share of $2.84. Consolidated non-GAAP earnings per diluted share for the 52 weeks ended January 31, 2015 were $2.87, excluding a gain on the sale of an asset and golf restructuring charges.      
    • Consolidated same store sales are currently expected to be approximately flat to an increase of 1%, compared to a 2.4% increase in fiscal 2014.      
  • Fourth Quarter 2015        
    • Based on an estimated 115 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share in the range of $1.10 to 1.25 in the fourth quarter of 2015, compared to consolidated earnings per diluted share of $1.30 in the fourth quarter of 2014.        
    • Consolidated same store sales are currently expected to be in the range of negative 2.0% to positive 1.0% in the fourth quarter of 2015, as compared to a 3.4% increase in the fourth quarter of 2014.        
  • Capital Expenditures        
    • In 2015, the Company anticipates capital expenditures to be approximately $245 million on a net basis and approximately $365 million on a gross basis. In 2014, capital expenditures were $247 million on a net basis and $349 million on a gross basis.

Conference Call Info

The Company will host a conference call today at 10:00 a.m. 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 website located at investors.DICKS.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software.

In addition to the webcast, the call can be accessed by dialing (877) 443-5743 (domestic callers) or (412) 902-6617 (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 approximately 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 10075009. The dial-in replay will be available for approximately 30 days following the live call.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains forward-looking statements within the meaning of the securities laws. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond our control. Our future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors as a prediction of actual results. Forward-looking statements include statements regarding, among other things, the Company's future performance, control of our inventory, making the right strategic investments, capital expenditures and outstanding borrowings in future periods.

Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: the weather; the promotional holiday retail environment; changes in consumer discretionary spending; competition amongst retailers in the categories we sell; changes in consumer demand or shopping patterns and our ability to identify new trends; limitations on the availability of attractive retail store sites; omni-channel growth and our development of an eCommerce platform; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings and new retail concepts; disruptions with our eCommerce service provider or our information systems; factors affecting our vendors, including supply chain and currency risks; talent needs and the loss of Edward W. Stack, our Chairman and Chief Executive Officer; disruptions of our information systems; developments with sports leagues, professional athletes or sports superstars; weather-related disruptions and seasonality of our business; and risks associated with being a controlled company.

For additional information on these and other factors that could affect our actual results, see our risk factors, which may be amended from time to time, set forth in our filings with the SEC, including our most recent Annual Report filed with the Securities and Exchange Commission on March 27, 2015. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation. Forward-looking statements included in this release are made as of the date of this release.

About DICK'S Sporting Goods, Inc.

Founded in 1948, DICK'S Sporting Goods, Inc. is a leading omni-channel sporting goods retailer offering an extensive assortment of authentic, high-quality sports equipment, apparel, footwear and accessories. As of October 31, 2015, the Company operated 645 DICK'S Sporting Goods locations across the United States, serving and inspiring athletes and outdoor enthusiasts to achieve their personal best through a blend of dedicated associates, in-store services and unique specialty shop-in-shops dedicated to Team Sports, Athletic Apparel, Golf, Lodge/Outdoor, Fitness and Footwear.

Headquartered in Pittsburgh, PA, DICK'S also owns and operates Golf Galaxy, Field & Stream, True Runner and Chelsea Collective specialty stores. DICK'S offers its products through a content-rich eCommerce platform that is integrated with its store network and provides customers with the convenience and expertise of a 24-hour storefront. For more information, visit the Press Room or Investor Relations pages at DICKS.com.

Contacts: Investor Relations: Anne-Marie Megela, Vice President – Treasury Services and Investor Relations, or Nathaniel A. Gilch, Director of Investor Relations DICK'S Sporting Goods, Inc. investors@dcsg.com (724) 273-3400

Media Relations: (724) 273-5552 or press@dcsg.com

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED

(In thousands, except per share data)

13 Weeks Ended

October 31, 2015

% of Sales

November 1, 2014

% of Sales(1)

Net sales

$

1,642,627

100.00

%

$

1,526,675

100.00

%

Cost of goods sold, including occupancy and       distribution costs

1,154,251

70.27

1,074,703

70.40

GROSS PROFIT

488,376

29.73

451,972

29.60

Selling, general and administrative expenses

395,015

24.05

357,708

23.43

Pre-opening expenses

16,280

0.99

14,334

0.94

INCOME FROM OPERATIONS

77,081

4.69

79,930

5.24

Interest expense

1,076

0.07

858

0.06

Other expense (income)

1,185

0.07

(486)

(0.03)

INCOME BEFORE INCOME TAXES

74,820

4.55

79,558

5.21

Provision for income taxes

27,605

1.68

30,347

1.99

NET INCOME

$

47,215

2.87

%

$

49,211

3.22

%

EARNINGS PER COMMON SHARE:

Basic

$

0.41

$

0.42

Diluted

$

0.41

$

0.41

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

114,978

118,142

Diluted

116,506

120,002

Cash dividend declared per share

$

0.1375

$

0.1250

(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)

39 Weeks Ended

October 31, 2015

% of Sales(1)

November 1, 2014

% of Sales(1)

Net sales

$

5,030,914

100.00

%

$

4,654,473

100.00

%

Cost of goods sold, including occupancy and       distribution costs

3,519,993

69.97

3,259,063

70.02

GROSS PROFIT

1,510,921

30.03

1,395,410

29.98

Selling, general and administrative expenses

1,151,686

22.89

1,063,351

22.85

Pre-opening expenses

31,836

0.63

28,480

0.61

INCOME FROM OPERATIONS

327,399

6.51

303,579

6.52

Interest expense

2,550

0.05

2,230

0.05

Other income

(812)

(0.02)

(4,863)

(0.10)

INCOME BEFORE INCOME TAXES

325,661

6.47

306,212

6.58

Provision for income taxes

124,262

2.47

117,550

2.53

NET INCOME

$

201,399

4.00

%

$

188,662

4.05

%

EARNINGS PER COMMON SHARE:

Basic

$

1.73

$

1.58

Diluted

$

1.71

$

1.55

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

116,101

119,743

Diluted

117,739

121,734

Cash dividends declared per share

$

0.4125

$

0.3750

(1) Column does not add due to rounding

 

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(Dollars in thousands)

October 31, 2015

November 1, 2014

January 31, 2015

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

73,799

$

77,933

$

221,679

Accounts receivable, net

96,406

87,944

80,292

Income taxes receivable

8,719

10,361

14,293

Inventories, net

1,997,105

1,765,119

1,390,767

Prepaid expenses and other current assets

107,755

92,375

91,767

Deferred income taxes

47,789

42,133

51,586

Total current assets

2,331,573

2,075,865

1,850,384

Property and equipment, net

1,341,166

1,195,274

1,203,382

Intangible assets, net

109,827

111,195

110,162

Goodwill

200,594

200,594

200,594

Other assets:

Deferred income taxes

1,355

2,209

1,862

Other

73,912

70,395

69,814

Total other assets

75,267

72,604

71,676

TOTAL ASSETS

$

4,058,427

$

3,655,532

$

3,436,198

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

941,973

$

826,945

$

614,511

Accrued expenses

345,052

307,708

283,828

Deferred revenue and other liabilities

133,593

123,665

172,259

Income taxes payable

47,698

Current portion of other long-term debt and leasing      obligations

575

461

537

Total current liabilities

1,421,193

1,258,779

1,118,833

LONG-TERM LIABILITIES:

Revolving credit borrowings

342,400

280,500

Other long-term debt and leasing obligations

5,477

6,108

5,913

Deferred income taxes

29,078

23,584

44,494

Deferred revenue and other liabilities

536,973

422,407

434,733

Total long-term liabilities

913,928

732,599

485,140

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock

883

925

932

Class B common stock

249

249

249

Additional paid-in capital

1,053,748

987,892

1,015,404

Retained earnings

1,623,962

1,330,542

1,471,182

Accumulated other comprehensive (loss) income

(125)

15

(73)

Treasury stock, at cost

(955,411)

(655,469)

(655,469)

Total stockholders' equity

1,723,306

1,664,154

1,832,225

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

4,058,427

$

3,655,532

$

3,436,198

 

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(Dollars in thousands)

39 Weeks Ended

October 31, 2015

November 1, 2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

201,399

$

188,662

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

Depreciation and amortization

136,683

131,000

Deferred income taxes

(11,112)

(18,063)

Stock-based compensation

21,687

19,430

Excess tax benefit from exercise of stock options

(6,308)

(6,560)

Gain on sale of asset

(14,428)

Other non-cash items

442

435

Changes in assets and liabilities:

Accounts receivable

(22,556)

(14,146)

Inventories

(606,338)

(533,054)

Prepaid expenses and other assets

(18,685)

(12,870)

Accounts payable

324,832

290,216

Accrued expenses

38,817

25,532

Income taxes payable / receivable

(36,424)

(16,362)

Deferred construction allowances

118,647

87,898

Deferred revenue and other liabilities

(25,215)

(24,933)

Net cash provided by operating activities

115,869

102,757

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(273,962)

(271,257)

Proceeds from sale of other assets

74,534

Deposits and purchases of other assets

(2,406)

(26,780)

Net cash used in investing activities

(276,368)

(223,503)

CASH FLOWS FROM FINANCING ACTIVITIES:

Revolving credit borrowings

1,019,100

1,057,600

Revolving credit repayments

(676,700)

(777,100)

Payments on other long-term debt and leasing obligations

(398)

(806)

Construction allowance receipts

Proceeds from exercise of stock options

18,668

10,671

Excess tax benefit from exercise of stock options

6,309

6,588

Minimum tax withholding requirements

(7,703)

(7,722)

Cash paid for treasury stock

(300,000)

(200,000)

Cash dividends paid to stockholders

(49,235)

(46,564)

Increase (decrease) in bank overdraft

2,630

(25,710)

Net cash provided by financing activities

12,671

16,957

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

(52)

(9)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(147,880)

(103,798)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

221,679

181,731

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

73,799

$

77,933

 

 

Store Count and Square Footage

The stores that opened during the third quarter of 2015 are as follows:

Store

Market

Concept

Valparaiso, IN

Valparaiso

DICK'S Sporting Goods

Bismarck, ND

Bismarck

DICK'S Sporting Goods

Uniontown, PA

Uniontown

DICK'S Sporting Goods

Chambersburg, PA

Hagerstown

DICK'S Sporting Goods

Euless, TX

Dallas

DICK'S Sporting Goods

Chicago (Lincoln Park), IL

Chicago

DICK'S Sporting Goods

Tuscaloosa, AL

Tuscaloosa

DICK'S Sporting Goods

Tucson, AZ

Tucson

DICK'S Sporting Goods

Cullman, AL

Cullman

DICK'S Sporting Goods

Chillicothe, OH

Columbus

DICK'S Sporting Goods

Wooster, OH

Wooster

DICK'S Sporting Goods

Janesville, WI

Janesville

DICK'S Sporting Goods

Grand Island, NE

Grand Island

DICK'S Sporting Goods

Salisbury, NC

Charlotte

DICK'S Sporting Goods

Leesburg, VA

Washington, DC

DICK'S Sporting Goods

Salem, NH

Nashua

DICK'S Sporting Goods

Brownsville, TX

Brownsville

DICK'S Sporting Goods

North Haven, CT

New Haven

DICK'S Sporting Goods

Joliet, IL

Chicago

DICK'S Sporting Goods

Council Bluffs, IA

Omaha

DICK'S Sporting Goods

Oshkosh, WI

Green Bay

DICK'S Sporting Goods

Marysville, WA

Burlington

DICK'S Sporting Goods

Muskogee, OK

Muskogee

DICK'S Sporting Goods

Sevierville, TN

Knoxville

DICK'S Sporting Goods

Cerritos, CA

Huntington Beach

DICK'S Sporting Goods

Las Vegas, NV

Las Vegas

DICK'S Sporting Goods

Glendale, CA

Huntington Beach

DICK'S Sporting Goods

Hoover, AL

Birmingham

Field & Stream

North Charleston, SC

Charleston

Field & Stream

Polaris, OH

Columbus

Field & Stream (1)

Greensboro, NC

Greensboro

Field & Stream

Asheville, NC

Asheville

Field & Stream

Champaign, IL

Champaign

Field & Stream (1)

West Harrisburg, PA

Harrisburg

Field & Stream

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

Store Count:

Fiscal 2015

Fiscal 2014

DICK'S Sporting Goods (1)

Specialty Store Concepts (1) (2)

Total

DICK'S Sporting Goods

Specialty Store Concepts (2)

Total

Beginning stores

603

91

694

558

84

642

Q1 New stores

9

1

10

8

8

Q2 New stores

7

1

8

8

1

9

Q3 New stores

27

9

36

24

8

32

Ending stores

646

102

748

598

93

691

Closed stores

1

3

4

1

1

Ending stores

645

99

744

597

93

690

Remodeled stores

2

2

5

5

Relocated stores

6

1

7

5

2

7

Square Footage:

(in millions)

DICK'S Sporting Goods (1)

Specialty Store Concepts (1) (2)

Total

Q1 2014     

30.6

1.5

32.1

Q2 2014

30.9

1.6

32.5

Q3 2014

32.0

2.0

34.0

Q4 2014

32.3

1.9

34.2

Q1 2015

32.7

2.0

34.7

Q2 2015

33.1

2.0

35.1

Q3 2015

34.4

2.4

36.8

(1)

All-American Sports Centers, which include both a DICK'S Sporting Goods store and a Field & Stream store at one location, are reflected in both the DICK'S Sporting Goods and Specialty Store Concepts reconciliation. As of October 31, 2015, the Company operated four All-American Sports Centers.

(2)

Includes the Company's Golf Galaxy, Field & Stream, and other specialty store concepts.

 

Non-GAAP Financial Measures

In addition to reporting the Company's financial results in accordance with generally accepted accounting principles ("GAAP"), the Company believes that certain non-GAAP financial information provides users of the Company's financial information with additional useful information in evaluating operating performance between reporting periods. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. A reconciliation of the Company's non-GAAP measures to the most directly comparable GAAP financial measures are provided below and on the Company's website at investors.DICKS.com.

Non-GAAP Net Income and Earnings Per Share Reconciliations:

(in thousands, except per share data):

Fiscal 2015

13 Weeks Ended October 31, 2015

As Reported

Litigation Settlement Charge

Non-GAAP Total

Net sales

$

1,642,627

$

$

1,642,627

Cost of goods sold, including occupancy and       distribution costs

1,154,251

1,154,251

GROSS PROFIT

488,376

488,376

Selling, general and administrative expenses

395,015

(7,884)

387,131

Pre-opening expenses

16,280

16,280

INCOME FROM OPERATIONS

77,081

7,884

84,965

Interest expense

1,076

1,076

Other expense

1,185

1,185

INCOME BEFORE INCOME TAXES

74,820

7,884

82,704

Provision for income taxes

27,605

3,154

30,759

NET INCOME

$

47,215

$

4,730

$

51,945

EARNINGS PER COMMON SHARE:

Basic

$

0.41

$

0.45

Diluted

$

0.41

$

0.45

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

114,978

114,978

Diluted

116,506

116,506

During the third quarter of 2015, the Company recorded a pre-tax litigation settlement charge of $7.9 million. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.

 

 

Fiscal 2015

39 Weeks Ended October 31, 2015

As Reported

Litigation Settlement Charge

Non-GAAP Total

Net sales

$

5,030,914

$

$

5,030,914

Cost of goods sold, including occupancy and       distribution costs

3,519,993

3,519,993

GROSS PROFIT

1,510,921

1,510,921

Selling, general and administrative expenses

1,151,686

(7,884)

1,143,802

Pre-opening expenses

31,836

31,836

INCOME FROM OPERATIONS

327,399

7,884

335,283

Interest expense

2,550

2,550

Other income

(812)

(812)

INCOME BEFORE INCOME TAXES

325,661

7,884

333,545

Provision for income taxes

124,262

3,154

127,416

NET INCOME

$

201,399

$

4,730

$

206,129

EARNINGS PER COMMON SHARE:

Basic

$

1.73

$

1.78

Diluted

$

1.71

$

1.75

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

116,101

116,101

Diluted

117,739

117,739

During the third quarter of 2015, the Company recorded a pre-tax litigation settlement charge of $7.9 million. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.

 

 

Fiscal 2014

39 Weeks Ended November 1, 2014

As Reported

Gain on Sale of Asset

Golf Restructuring Charges

Non-GAAP Total

Net sales

$

4,654,473

$

$

$

4,654,473

Cost of goods sold, including occupancy and       distribution costs

3,259,063

(2,405)

3,256,658

GROSS PROFIT

1,395,410

2,405

1,397,815

Selling, general and administrative expenses

1,063,351

14,428

(17,960)

1,059,819

Pre-opening expenses

28,480

28,480

INCOME FROM OPERATIONS

303,579

(14,428)

20,365

309,516

Interest expense

2,230

2,230

Other income

(4,863)

(4,863)

INCOME BEFORE INCOME TAXES

306,212

(14,428)

20,365

312,149

Provision for income taxes

117,550

(5,771)

8,146

119,925

NET INCOME

$

188,662

$

(8,657)

$

12,219

$

192,224

EARNINGS PER COMMON SHARE:

Basic

$

1.58

$

1.61

Diluted

$

1.55

$

1.58

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

119,743

119,743

Diluted

121,734

121,734

During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company's blended tax rate.

 

 

Fiscal 2014

52 Weeks Ended January 31, 2015

As Reported

Gain on Sale of Asset

Golf Restructuring Charges

Non-GAAP Total

Net sales

$

6,814,479

$

$

$

6,814,479

Cost of goods sold, including occupancy and       distribution costs

4,727,813

(2,405)

4,725,408

GROSS PROFIT

2,086,666

2,405

2,089,071

Selling, general and administrative expenses

1,502,089

14,428

(17,960)

1,498,557

Pre-opening expenses

30,518

30,518

INCOME FROM OPERATIONS

554,059

(14,428)

20,365

559,996

Interest expense

3,215

3,215

Other income

(5,170)

(5,170)

INCOME BEFORE INCOME TAXES

556,014

(14,428)

20,365

561,951

Provision for income taxes

211,816

(5,771)

8,146

214,191

NET INCOME

$

344,198

$

(8,657)

$

12,219

$

347,760

EARNINGS PER COMMON SHARE:

Basic

$

2.89

$

2.92

Diluted

$

2.84

$

2.87

WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING:

Basic

119,244

119,244

Diluted

121,238

121,238

During the first quarter of 2014, the Company recorded a pre-tax $14.4 million gain on sale of a Gulfstream G650 corporate aircraft. During the second quarter of 2014, the Company recorded pre-tax restructuring charges of $20.4 million including a $14.3 million non-cash impairment of trademarks and store assets, severance charges of $3.7 million resulting from the elimination of specific staff in the golf area of its DICK'S stores and consolidation of DICK'S golf and Golf Galaxy corporate and administrative functions, and a $2.4 million write-down of excess golf inventories. The provision for income taxes for the aforementioned adjustments were calculated at 40%, which approximates the Company's blended tax rate.

 

 

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, capital investments and certain non-recurring, infrequent or unusual items.

13 Weeks Ended

October 31, 2015

November 1, 2014

(dollars in thousands)

Net income

$

47,215

$

49,211

Provision for income taxes

27,605

30,347

Interest expense

1,076

858

Depreciation and amortization

46,087

41,229

EBITDA

$

121,983

$

121,645

Add: Litigation settlement charge

7,884

Adjusted EBITDA, as defined

$

129,867

$

121,645

% increase in adjusted EBITDA

7

%

39 Weeks Ended

October 31, 2015

November 1, 2014

(dollars in thousands)

Net income

$

201,399

$

188,662

Provision for income taxes

124,262

117,550

Interest expense

2,550

2,230

Depreciation and amortization

136,683

131,000

EBITDA

$

464,894

$

439,442

Add: Litigation settlement charge

7,884

Less: Gain on sale of asset

(14,428)

Add: Golf restructuring charges

6,043

Adjusted EBITDA, as defined

$

472,778

$

431,057

% increase in adjusted EBITDA

10

%

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.

39 Weeks Ended

October 31, 2015

November 1, 2014

(dollars in thousands)

Gross capital expenditures

$

(273,962)

$

(271,257)

Proceeds from sale-leaseback transactions

Deferred construction allowances

118,647

87,898

Construction allowance receipts

Net capital expenditures

$

(155,315)

$

(183,359)

 

 

 

SOURCE DICK'S Sporting Goods, Inc.



RELATED LINKS

http://www.dickssportinggoods.com