Dick's Sporting Goods Reports Third Quarter Results; Exceeds Expectations

- Consolidated earnings per diluted share increased 25% to $0.40 per diluted share in the third quarter of 2012 compared to non-GAAP earnings per diluted share of $0.32 in the third quarter of 2011

- Consolidated same store sales increased 5.1% in the third quarter of 2012

- Company raises full year estimated consolidated non-GAAP earnings range from $2.47 to 2.51 per diluted share to $2.53 to 2.55 per diluted share

- Board authorizes quarterly dividend of $0.125 per share

13 Nov, 2012, 07:30 ET from Dick's Sporting Goods, Inc.

PITTSBURGH, Nov. 13, 2012 /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 third quarter ended October 27, 2012.

Third Quarter Results

The Company reported consolidated net income for the third quarter ended October 27, 2012 of $50.1 million, or $0.40 per diluted share, exceeding the Company's earnings expectations provided on August 14, 2012 of $0.36 per diluted share. For the third quarter ended October 29, 2011, the Company reported consolidated non-GAAP net income of $40.2 million, or $0.32 per diluted share, excluding the favorable impact of lower litigation settlement costs. On a GAAP basis, the Company reported consolidated net income for the third quarter ended October 29, 2011 of $41.5 million, or $0.33 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 third quarter of 2012 increased by 11.2% to $1.3 billion due primarily to a 5.1% increase in consolidated same store sales and the growth of the Company's store network. The 5.1% consolidated same store sales increase consisted of a 3.9% increase at Dick's Sporting Goods stores, a 2.3% increase at Golf Galaxy and a 46.7% increase in the eCommerce business.

"We generated record results in the third quarter, exceeding our original sales and earnings expectations," said Edward W. Stack, Chairman and CEO. "By growing our store base, partnering with our brands, aggressively building out our omni-channel capabilities and executing our strategic marketing plan, we are driving continued profitable growth."

New Stores

In the third quarter, the Company opened 21 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 the end of the third quarter, the Company operated 511 Dick's Sporting Goods stores in 44 states, with approximately 27.9 million square feet and 81 Golf Galaxy stores in 30 states, with approximately 1.3 million square feet.

In the beginning of the fourth quarter, the Company opened seven new Dick's Sporting Goods stores, relocated one Dick's Sporting Goods store and repositioned one Golf Galaxy store.

The Company has now completed its 2012 store development program, opening a total of 38 new Dick's Sporting Goods stores, relocating five Dick's Sporting Goods stores and repositioning one Golf Galaxy store. 

Balance Sheet

The Company ended the third quarter of 2012 with $294 million in cash and cash equivalents and did not have any outstanding borrowings under its $500 million revolving credit facility. At the end of the third quarter of 2011, the Company had $483 million in cash and cash equivalents and did not have any outstanding borrowings under its credit facility. Over the course of the past twelve months, the Company has utilized capital to fund its share repurchase program, pay quarterly dividends, purchase its store support center, invest in JJB Sports, acquire intellectual property rights to the Top-Flite and Field & Stream brands, and build a distribution center.

The inventory per square foot was 4.0% higher at the end of the third quarter of 2012 as compared to the end of the third quarter of 2011.

Year-to-Date Results

The Company reported consolidated non-GAAP net income for the 39 weeks ended October 27, 2012 of $188.6 million, or $1.50 per diluted share.  For the 39 weeks ended October 29, 2011, the Company reported consolidated non-GAAP net income of $142.8 million, or $1.14 per diluted share.

On a GAAP basis, the Company reported consolidated net income for the 39 weeks ended October 27, 2012 of $161.0 million, or $1.28 per diluted share. For the 39 weeks ended October 29, 2011, the Company reported consolidated net income of $152.8 million, or $1.22 per diluted share. 

Net sales for the 39 weeks ended October 27, 2012 increased 12.0% from last year's period to $4.0 billion primarily due to a 5.6% increase in consolidated same store sales and the growth of the Company's store network.

Dividend

On November 7, 2012, 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 December 28, 2012 to stockholders of record at the close of business on November 30, 2012. 

Current 2012 Outlook

The Company's current outlook for 2012 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 2012 – (53 Week Year) Comparisons to Fiscal 2011 – (52 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 $2.53 to 2.55, excluding an impairment charge and including approximately $0.03 per diluted share for the 53rd week.  On a 52-week basis, non-GAAP earnings per diluted share are expected to be $2.50 to 2.52.  For the 52 weeks ended January 28, 2012, the Company reported consolidated non-GAAP earnings per diluted share of $2.02, excluding a gain on sale of investment and the favorable impact of lower litigation settlement costs. On a GAAP basis, the Company reported consolidated earnings per diluted share of $2.10 in 2011.
    • Consolidated same store sales are currently expected to increase approximately 5% on a 52-week to 52-week comparative basis, compared to a 2.0% increase in fiscal 2011.
  • Fourth Quarter 2012 – (14 Week Quarter) Comparisons to Fourth Quarter 2011 – (13 Week Quarter)
    • Based on an estimated 127 million diluted shares outstanding,the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.03 to 1.05 in the fourth quarter of 2012 compared to our prior expectation of $1.01 to 1.05.  The fourth quarter guidance includes approximately $0.03 per diluted share for the 14th week.  On a 13-week basis, earnings per diluted share are expected to be $1.00 to 1.02.  In the fourth quarter of 2011, the Company reported consolidated earnings per diluted share of $0.88.
    • Consolidated same store sales are currently expected to increase approximately 4% compared to a 0.1% increase in the fourth quarter last year.
  • Capital Expenditures
    • In 2012, the Company anticipates capital expenditures to be approximately $235 million on a gross basis and approximately $190 million on a net basis.

Conference Call Info

The Company will be hosting 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 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 10019854. 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 includes statements regarding, among other things, our continued profitable growth. 

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 2012 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: continuation of the ongoing economic and financial downturn that may cause a continued decline in consumer spending and other changes in macroeconomic factors or market conditions that impact consumer spending or shopping patterns, particularly for the types of merchandise that we sell; changes in the general economic and business conditions and in the specialty retail or sporting goods industry in particular; fluctuations in our quarterly operating results or same store sales; volatility in our stock price; our ability to access adequate capital; competition in the sporting goods industry; limitations on the availability of attractive store locations; inability to manage our growth, open new stores on a timely basis or expand successfully in new and existing markets; changes in consumer demand; unauthorized disclosure of sensitive, personal or confidential information; disruptions in our or our vendors' supply chains; our relationships with our vendors; factors affecting our vendors, including potential increases in the costs of products, their ability to maintain their inventory and production levels and their ability or willingness to provide us with sufficient quantities of products at acceptable prices; factors that could negatively affect our private brand offerings; risks and costs relating to the products we sell, including product liability claims, and the availability of recourse to third parties, including our insurance policies, product recalls and the regulation of and other hazards associated with certain products we sell, such as hunting rifles and ammunition; the loss of our key executives, especially Edward W. Stack, our Chairman and Chief Executive Officer; costs and risks associated with increased or changing laws and regulations affecting our business; our ability to secure and protect our trademarks, patents and other intellectual property; risks relating to operating as an omni-channel retailer, including the impact of rapid technological change, internet security and privacy issues and the threat of systems failure or inadequacy; problems with our current management information systems or software; disruption at our distribution facilities; the seasonality of our business; regional risks because our stores are generally concentrated in the eastern half of the United States; costs and risks related to litigation or other claims against us; costs and uncertainties associated with pursuing strategic investments or acquisitions; our ability to meet our labor needs; currency exchange rate fluctuations; risks associated with our Chief Executive Officer and his relatives' controlling interest in the Company; the impact of foreign instability and conflict; our anti-takeover provisions, which could prevent or delay a change in control of the Company; impairment in the carrying value of goodwill or other acquired intangibles; and our current intention to issue quarterly cash dividends.

Known and unknown risks and uncertainties are more fully described in the Company's Annual Report on Form 10-K for the year ended January 28, 2012 as filed with the Securities and Exchange Commission ("SEC") on March 16, 2012 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 all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. We do not assume any obligation and do not intend to update any forward-looking statements 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 sporting goods retailer offering a broad assortment of 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 October 27, 2012, the Company operated 511 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:

Timothy E. Kullman, EVP – Finance, Administration, and Chief Financial Officer or Anne-Marie Megela, Director, Investor Relations Dick's Sporting Goods    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

October 27,

% of Sales (1)

October 29,

% of Sales (1)

2012

2011

Net sales

$   1,312,072

100.00%

$    1,179,702

100.00%

Cost of goods sold, including occupancy

and distribution costs

905,948

69.05

829,111

70.28

GROSS PROFIT

406,124

30.95

350,591

29.72

Selling, general and administrative expenses

314,637

23.98

272,233

23.08

Pre-opening expenses

9,294

0.71

6,796

0.58

INCOME FROM OPERATIONS

82,193

6.26

71,562

6.07

Interest expense

860

0.07

3,540

0.30

Other (income) expense

(1,113)

(0.08)

1,568

0.13

INCOME BEFORE INCOME TAXES

82,446

6.28

66,454

5.63

Provision for income taxes

32,307

2.46

24,970

2.12

NET INCOME

$       50,139

3.82%

$        41,484

3.52%

EARNINGS PER COMMON SHARE:

Basic

$           0.41

$            0.34

Diluted

$           0.40

$            0.33

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

122,103

120,432

Diluted

125,938

125,552

Cash dividend declared per share

$         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)

39 Weeks Ended

October 27,

% of Sales

October 29,

% of Sales (1)

2012

2011

Net sales

$  4,030,818

100.00%

$   3,600,246

100.00%

Cost of goods sold, including occupancy

and distribution costs

2,782,306

69.03

2,518,137

69.94

GROSS PROFIT

1,248,512

30.97

1,082,109

30.06

Selling, general and administrative expenses

921,631

22.86

821,698

22.82

Pre-opening expenses

14,311

0.36

12,717

0.35

INCOME FROM OPERATIONS

312,570

7.75

247,694

6.88

Impairment of available-for-sale investments

32,370

0.80

-

-

Gain on sale of investment

-

-

(13,900)

(0.39)

Interest expense

5,309

0.13

10,504

0.29

Other (income) expense

(2,923)

(0.07)

977

0.03

INCOME BEFORE INCOME TAXES

277,814

6.89

250,113

6.95

Provision for income taxes

116,855

2.90

97,283

2.70

NET INCOME

$     160,959

3.99%

$      152,830

4.24%

EARNINGS PER COMMON SHARE:

Basic

$           1.33

$            1.27

Diluted

$           1.28

$            1.22

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

121,181

120,000

Diluted

125,825

125,585

Cash dividend declared per share 

$         0.375

$                 -

(1)Column does not add due to rounding

 

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - UNAUDITED

(Dollars in thousands)

October 27,

October 29,

January 28,

2012

2011

2012

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$      294,493

$      483,372

$      734,402

Accounts receivable, net

57,212

63,568

38,338

Income taxes receivable

2,779

35,180

4,113

Inventories, net

1,382,684

1,243,152

1,014,997

Prepaid expenses and other current assets

35,367

63,542

64,213

Deferred income taxes

26,755

14,028

12,330

Total current assets

1,799,290

1,902,842

1,868,393

Property and equipment, net

851,302

745,129

775,896

Construction in progress - leased facilities

-

-

2,138

Intangible assets, net

99,033

50,755

50,490

Goodwill

200,594

200,594

200,594

Other assets:

Deferred income taxes

8,269

8,225

12,566

Other

111,093

67,087

86,375

            Total other assets

119,362

75,312

98,941

TOTAL ASSETS

$    3,069,581

$    2,974,632

$    2,996,452

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$      665,608

$      663,091

$      510,398

Accrued expenses

296,232

266,162

264,073

Deferred revenue and other liabilities

96,233

86,286

128,765

Income taxes payable

-

-

29,484

Current portion of other long-term debt and

leasing obligations

8,584

995

7,426

Total current liabilities

1,066,657

1,016,534

940,146

LONG-TERM LIABILITIES:

Other long-term debt and leasing obligations

14,157

139,108

151,596

Non-cash obligations for construction 

   in progress - leased facilities

-

-

2,138

Deferred revenue and other liabilities

283,835

256,644

269,827

Total long-term liabilities

297,992

395,752

423,561

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock

977

957

964

Class B common stock

250

250

250

Additional paid-in capital

855,881

677,716

699,766

Retained earnings

1,047,668

883,298

932,871

Accumulated other comprehensive income

114

125

118

Treasury stock 

(199,958)

-

(1,224)

Total stockholders' equity

1,704,932

1,562,346

1,632,745

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$    3,069,581

$    2,974,632

$    2,996,452

DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(Dollars in thousands)

39 Weeks Ended

October 27,

October 29,

2012

2011

CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income

$  160,959

$  152,830

  Adjustments to reconcile net income   

   to net cash provided by operating activities:

Depreciation and amortization

88,627

83,616

Impairment of available-for-sale investments

32,370

-

Deferred income taxes

(10,128)

27,795

Stock-based compensation

23,643

19,075

Excess tax benefit from exercise of stock options

(61,461)

(15,320)

Tax benefit from exercise of stock options

4,761

421

Other non-cash items

227

1,154

Gain on sale of investment

-

(13,900)

Changes in assets and liabilities:

Accounts receivable

(17,374)

(17,908)

Inventories

(367,687)

(346,257)

Prepaid expenses and other assets

31,599

(5,858)

Accounts payable

178,700

204,999

Accrued expenses

18

(22,821)

Income taxes payable / receivable

33,260

(10,944)

Deferred construction allowances

21,744

21,203

Deferred revenue and other liabilities

(35,922)

(41,921)

Net cash provided by operating activities

83,336

36,164

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(157,448)

(148,038)

Purchase of JJB Sports convertible notes and equity securities

(31,986)

-

Proceeds from sale of investment

-

14,140

Proceeds from sale-leaseback transactions

-

9,071

Deposits and purchases of other assets

(54,819)

(18,052)

Net cash used in investing activities

(244,253)

(142,879)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on other long-term debt and leasing obligations

(138,856)

(738)

Construction allowance receipts

-

-

Proceeds from exercise of stock options

71,683

21,428

Excess tax benefit from exercise of stock options

61,461

15,320

Minimum tax withholding requirements

(5,329)

(3,559)

Cash paid for treasury stock 

(198,774)

-

Cash dividend paid to stockholders

(45,668)

-

(Decrease) increase in bank overdraft

(23,505)

11,581

Net cash (used in) provided by financing activities

(278,988)

44,032

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH

   EQUIVALENTS

(4)

3

NET DECREASE IN CASH AND CASH EQUIVALENTS

(439,909)

(62,680)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

734,402

546,052

CASH AND CASH EQUIVALENTS, END OF PERIOD

$  294,493

$  483,372

Supplemental disclosure of cash flow information:

Accrued property and equipment

$    44,568

$      9,699

Accrued deposits and purchases of other assets

$    14,500

$              -

Cash paid for interest

$      1,402

$      9,351

Cash paid for income taxes

$  100,939

$    79,204

 

Store Count and Square Footage

The stores that opened during the third quarter of 2012 are as follows:

DICK'S

Store

Market

NE Columbia, SC

Columbia, SC

Bluffton, SC

Hilton Head, SC

Commack, NY

Long Island, NY

Oxnard, CA

Los Angeles, CA

Clovis, CA

Fresno, CA

Greenville, NC

Greenville, NC

Midvale, UT

Salt Lake City, UT

Orem, UT

Salt Lake City, UT

Visalia, CA

Fresno, CA

West Nyack, NY

New York, NY

Las Cruces, NM

Las Cruces, NM

Huntington Beach, CA                 

Los Angeles, CA

San Diego, CA

San Diego, CA

Harrisonburg, VA

Harrisonburg, VA            

Hanover, MA

Boston, MA

Oneonta, NY

Oneonta, NY

Waterford Lakes, FL

Orlando, FL

Sanford, FL

Orlando, FL

Aberdeen, NC

Southern Pines, NC

Wheaton, MD

Washington, DC

Salinas, CA

Salinas, CA

 

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

Fiscal 2012

Fiscal 2011

Dick's Sporting Goods

Golf Galaxy

 Total 

Dick's Sporting Goods

Golf Galaxy

Total

Beginning stores

480

81

561

444

81

525

 Q1 New 

6

-

6

3

-

3

 Q2 New 

4

-

4

8

-

8

 Q3 New 

21

-

21

19

-

19

Ending stores

511

81

592

474

81

555

Remodeled stores

-

-

-

14

-

14

Relocated stores

4

-

4

-

1

1

Square Footage:

(in millions)

Dick's Sporting Goods

Golf Galaxy

Total

 Q1 2011 

24.7

1.3

26.0

 Q2 2011 

25.1

1.3

26.4

 Q3 2011 

26.0

1.3

27.3

 Q4 2011 

26.3

1.3

27.6

 Q1 2012 

26.5

1.3

27.8

 Q2 2012 

26.7

1.3

28.0

 Q3 2012 

27.9

1.3

29.2

 

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"); a reconciliation from the Company's gross capital expenditures, net of tenant allowances; and calculations of consolidated and Dick's Sporting Goods new store productivity.  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 for per share data):

Fiscal 2012

39 Weeks Ended October 27, 2012

As

Impairment of

Non-GAAP

Reported

Investments

Total

Net sales

$     4,030,818

$                  -

$     4,030,818

Cost of goods sold, including occupancy

and distribution costs

2,782,306

-

2,782,306

GROSS PROFIT

1,248,512

-

1,248,512

Selling, general and administrative expenses

921,631

-

921,631

Pre-opening expenses

14,311

-

14,311

INCOME FROM OPERATIONS

312,570

-

312,570

Impairment of available-for-sale investments

32,370

(32,370)

-

Interest expense

5,309

-

5,309

Other income

(2,923)

-

(2,923)

INCOME BEFORE INCOME TAXES

277,814

32,370

310,184

Provision for income taxes

116,855

4,734

121,589

NET INCOME 

$       160,959

$         27,636

$       188,595

EARNINGS PER COMMON SHARE:

Basic

$             1.33

$             1.56

Diluted 

$             1.28

$             1.50

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

121,181

121,181

Diluted

125,825

125,825

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 to incur as a result of the impairment of its investment in JJB Sports.

 

Fiscal 2011

13 Weeks Ended October 29, 2011

As

Litigation

Non-GAAP

Reported

Settlement

Total

Net sales

$     1,179,702

$                -

$     1,179,702

Cost of goods sold, including occupancy

and distribution costs

829,111

-

829,111

GROSS PROFIT

350,591

-

350,591

Selling, general and administrative expenses

272,233

2,148

274,381

Pre-opening expenses

6,796

-

6,796

INCOME FROM OPERATIONS

71,562

(2,148)

69,414

Interest expense

3,540

-

3,540

Other expense

1,568

-

1,568

INCOME BEFORE INCOME TAXES

66,454

(2,148)

64,306

Provision for income taxes

24,970

(859)

24,111

NET INCOME 

$         41,484

$         (1,289)

$         40,195

EARNINGS PER COMMON SHARE:

Basic

$             0.34

$             0.33

Diluted 

$             0.33

$             0.32

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

120,432

120,432

Diluted

125,552

125,552

During the third quarter of 2011, the Company funded claims submitted by class members of wage and hour class action lawsuits as part of a court approved settlement.  The settlement funding was $2.1 million lower than the previous estimate of $10.8 million, recognized in the fourth quarter of 2010.  The provision for income taxes for the litigation settlement was calculated at 40%, which approximates the Company's blended tax rate.  

 

Fiscal 2011

39 Weeks Ended October 29, 2011

As

Gain on Sale

Litigation

Non-GAAP

Reported

of Investment

Settlement

Total

Net sales

$     3,600,246

$                 -

$                 -

$     3,600,246

Cost of goods sold, including occupancy

and distribution costs

2,518,137

-

-

2,518,137

GROSS PROFIT

1,082,109

-

-

1,082,109

Selling, general and administrative expenses

821,698

-

2,148

823,846

Pre-opening expenses

12,717

-

-

12,717

INCOME FROM OPERATIONS

247,694

-

(2,148)

245,546

Gain on sale of investment

(13,900)

13,900

-

-

Interest expense

10,504

-

-

10,504

Other expense

977

-

-

977

INCOME BEFORE INCOME TAXES

250,113

(13,900)

(2,148)

234,065

Provision for income taxes

97,283

(5,162)

(859)

91,262

NET INCOME 

$       152,830

$         (8,738)

$         (1,289)

$       142,803

EARNINGS PER COMMON SHARE:

Basic

$             1.27

$             1.19

Diluted 

$             1.22

$             1.14

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

120,000

120,000

Diluted

125,585

125,585

During the second quarter of 2011, the Company recorded a pre-tax gain of $13.9 million relating to the sale of available-for-sale securities.  During the third quarter of 2011, the Company funded claims submitted by class members of wage and hour class action lawsuits as part of a court approved settlement.  The settlement funding was $2.1 million lower than the previous estimate of $10.8 million, recognized in the fourth quarter of 2010.  The provision for income taxes for the aforementioned adjustments was calculated at 40%, which approximates the Company's blended tax rate.  

 

Fiscal 2011

52 Weeks Ended January 28, 2012

As

Gain on Sale

Litigation

Non-GAAP

Reported

of Investment

Settlement

Total

Net sales

$     5,211,802

$                -

$                -

$     5,211,802

Cost of goods sold, including occupancy

and distribution costs

3,616,921

-

-

3,616,921

GROSS PROFIT

1,594,881

-

-

1,594,881

Selling, general and administrative expenses

1,148,268

-

2,148

1,150,416

Pre-opening expenses

14,593

-

-

14,593

INCOME FROM OPERATIONS

432,020

-

(2,148)

429,872

Gain on sale of investment

(13,900)

13,900

-

-

Interest expense

13,868

-

-

13,868

Other expense

26

-

-

26

INCOME BEFORE INCOME TAXES

432,026

(13,900)

(2,148)

415,978

Provision for income taxes

168,120

(5,162)

(859)

162,099

NET INCOME 

$       263,906

$         (8,738)

$         (1,289)

$       253,879

EARNINGS PER COMMON SHARE:

Basic

$             2.19

$             2.11

Diluted 

$             2.10

$             2.02

WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

Basic

120,232

120,232

Diluted

125,768

125,768

During the second quarter of 2011, the Company recorded a pre-tax gain of $13.9 million relating to the sale of available-for-sale securities.  During the third quarter of 2011, the Company funded claims submitted by class members of a wage and hour class action lawsuit as part of a court approved settlement.  The settlement funding was $2.1 million lower than the previous estimate of $10.8 million, recognized in the fourth quarter of 2010. The provision for income taxes for the aforementioned adjustments was 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 and capital investments.

 

13 Weeks Ended

October 27,

October 29,

2012

2011

(dollars in thousands)

Net income 

$          50,139

$        41,484

Provision for income taxes

32,307

24,970

Interest expense

860

3,540

Depreciation and amortization

30,527

28,300

EBITDA

$        113,833

$        98,294

Less: Litigation settlement

-

(2,148)

Adjusted EBITDA, as defined

$        113,833

$        96,146

% increase in Adjusted EBITDA

18%

39 Weeks Ended

October 27,

October 29,

2012

2011

(dollars in thousands)

Net income 

$        160,959

$      152,830

Provision for income taxes

116,855

97,283

Interest expense

5,309

10,504

Depreciation and amortization

88,627

83,616

EBITDA

$        371,750

$      344,233

Add:   Impairment of available-for-sale investments

32,370

-

Less:  Gain on sale of investment

-

(13,900)

Less:  Litigation settlement

-

(2,148)

Adjusted EBITDA, as defined

$        404,120

$      328,185

% increase in Adjusted EBITDA

23%

 

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 27,

October 29,

2012

2011

(dollars in thousands)

Gross capital expenditures

$   (157,448)

$   (148,038)

Proceeds from sale-leaseback transactions

-

9,071

Deferred construction allowances

21,744

21,203

Construction allowance receipts

-

-

Net capital expenditures

$   (135,704)

$   (117,764)

New Store Productivity Calculation

The following calculations represent: (1) the new store productivity calculation on a consolidated basis; and (2) the new store productivity calculation for Dick's Sporting Goods only, in each case for the periods shown.  Golf Galaxy stores and the Company's eCommerce business are excluded from the Dick's Sporting Goods only calculation.  New store productivity compares the sales increase for all stores not included in the same store sales calculation with the increase in store square footage.

 

Consolidated

Dick's Sporting Goods Only

13 Weeks Ended

13 Weeks Ended

October 27,

October 29,

October 27,

October 29,

2012

2011

2012

2011

Sales % increase for the period

11.2%

10.7%

Same store sales % increase for    the period

5.1%

3.9%

New store sales % increase (A)(1)

6.1%

6.7%

Store square footage (000's):

Beginning of period

28,054

26,462

26,714

25,122

End of period

29,202

27,315

27,853

25,975

Average for the period

28,628

26,889

27,283

25,549

Average square footage % increase    for the period (B)

6.5%

6.8%

New store productivity (A)/(B)(1)

94.1%

98.9%

(1)- Amounts do not recalculate due to rounding.

SOURCE Dick's Sporting Goods, Inc.



RELATED LINKS

http://www.dickssportinggoods.com