UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
|
|
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2017March 31, 2024
OR
|
|
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from _____________________ to ____________________
Commission file number: 000-49850
BIG 5 SPORTING GOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 95-4388794 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
2525 East El Segundo Boulevard El Segundo, California | 90245 | |
(Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s telephone number, including area code: |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | BGFV | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☒ | ||||
Non-accelerated filer | ☐ |
| Smaller reporting company |
| |||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were 21,426,86322,624,232 shares of common stock, with a par value of $0.01 per share, outstanding as of October 24, 2017.April 23, 2024.
BIG 5 SPORTING GOODS CORPORATION
INDEX
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1 | 3 | |
3 | ||
4 | ||
5 | ||
6 | ||
Notes to Unaudited Condensed Consolidated Financial Statements | 7 | |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) |
| |
Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
Item 3 |
| |
Item 4 |
| |
PART II – OTHER INFORMATION | ||
Item 1 |
| |
Item 1A |
| |
Item 2 | 29 | |
Item 3 | 29 | |
Item 4 | 29 | |
Item 5 |
| |
Item 6 |
| |
|
PART I. FINANCIALFINANCIAL INFORMATION
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
|
| October 1, 2017 |
|
| January 1, 2017 |
|
| March 31, |
|
| December 31, |
| ||||
ASSETS | ASSETS |
| ASSETS |
| ||||||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash |
| $ | 5,344 |
|
| $ | 7,895 |
|
| $ | 12,621 |
|
| $ | 9,201 |
|
Accounts receivable, net of allowances of $53 and $42, respectively |
|
| 8,601 |
|
|
| 12,200 |
| ||||||||
Accounts receivable, net of allowances of $63 and $48, respectively |
|
| 8,778 |
|
|
| 9,163 |
| ||||||||
Merchandise inventories, net |
|
| 309,331 |
|
|
| 294,319 |
|
|
| 275,839 |
|
|
| 275,759 |
|
Prepaid expenses |
|
| 11,513 |
|
|
| 10,085 |
|
|
| 12,631 |
|
|
| 16,052 |
|
Total current assets |
|
| 334,789 |
|
|
| 324,499 |
|
|
| 309,869 |
|
|
| 310,175 |
|
Operating lease right-of-use assets, net |
|
| 258,014 |
|
|
| 253,615 |
| ||||||||
Property and equipment, net |
|
| 77,694 |
|
|
| 78,420 |
|
|
| 56,653 |
|
|
| 58,595 |
|
Deferred income taxes |
|
| 21,559 |
|
|
| 23,699 |
|
|
| 16,196 |
|
|
| 13,427 |
|
Other assets, net of accumulated amortization of $1,551 and $1,420, respectively |
|
| 2,919 |
|
|
| 2,528 |
| ||||||||
Goodwill |
|
| 4,433 |
|
|
| 4,433 |
| ||||||||
Other assets, net of accumulated amortization of $2,137 and $1,954, respectively |
|
| 8,828 |
|
|
| 8,871 |
| ||||||||
Total assets |
| $ | 441,394 |
|
| $ | 433,579 |
|
| $ | 649,560 |
|
| $ | 644,683 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY | LIABILITIES AND STOCKHOLDERS' EQUITY |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| ||||||||||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
| |||||
Accounts payable |
| $ | 93,585 |
|
| $ | 109,314 |
|
| $ | 69,818 |
|
| $ | 55,201 |
|
Accrued expenses |
|
| 66,035 |
|
|
| 76,887 |
|
|
| 57,306 |
|
|
| 61,283 |
|
Current portion of capital lease obligations |
|
| 1,782 |
|
|
| 1,326 |
| ||||||||
Current portion of operating lease liabilities |
|
| 67,805 |
|
|
| 70,372 |
| ||||||||
Current portion of finance lease liabilities |
|
| 3,984 |
|
|
| 3,843 |
| ||||||||
Total current liabilities |
|
| 161,402 |
|
|
| 187,527 |
|
|
| 198,913 |
|
|
| 190,699 |
|
Deferred rent, less current portion |
|
| 15,983 |
|
|
| 17,028 |
| ||||||||
Capital lease obligations, less current portion |
|
| 3,007 |
|
|
| 1,999 |
| ||||||||
Long-term debt |
|
| 46,427 |
|
|
| 10,000 |
| ||||||||
Operating lease liabilities, less current portion |
|
| 197,612 |
|
|
| 191,178 |
| ||||||||
Finance lease liabilities, less current portion |
|
| 11,293 |
|
|
| 11,856 |
| ||||||||
Other long-term liabilities |
|
| 11,089 |
|
|
| 11,988 |
|
|
| 6,305 |
|
|
| 6,536 |
|
Total liabilities |
|
| 237,908 |
|
|
| 228,542 |
|
|
| 414,123 |
|
|
| 400,269 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Common stock, $0.01 par value, authorized 50,000,000 shares; issued 24,922,998 and 24,784,367 shares, respectively; outstanding 21,474,173 and 22,012,651 shares, respectively |
|
| 249 |
|
|
| 248 |
| ||||||||
Common stock, $0.01 par value, authorized 50,000,000 shares; issued 26,932,297 and |
|
| 269 |
|
|
| 267 |
| ||||||||
Additional paid-in capital |
|
| 115,944 |
|
|
| 114,797 |
|
|
| 129,150 |
|
|
| 128,737 |
|
Retained earnings |
|
| 128,568 |
|
|
| 124,363 |
|
|
| 160,275 |
|
|
| 169,667 |
|
Less: Treasury stock, at cost; 3,448,825 and 2,771,716 shares, respectively |
|
| (41,275 | ) |
|
| (34,371 | ) | ||||||||
Less: Treasury stock, at cost; 4,307,255 shares |
|
| (54,257 | ) |
|
| (54,257 | ) | ||||||||
Total stockholders' equity |
|
| 203,486 |
|
|
| 205,037 |
|
|
| 235,437 |
|
|
| 244,414 |
|
Total liabilities and stockholders' equity |
| $ | 441,394 |
|
| $ | 433,579 |
|
| $ | 649,560 |
|
| $ | 644,683 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
- 3 -
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|
| 13 Weeks Ended |
|
| 39 Weeks Ended |
|
| 13 Weeks Ended |
| |||||||||||||||
|
| October 1, 2017 |
|
| October 2, 2016 |
|
| October 1, 2017 |
|
| October 2, 2016 |
|
| March 31, |
|
| April 2, |
| ||||||
Net sales |
| $ | 270,471 |
|
| $ | 279,015 |
|
| $ | 766,746 |
|
| $ | 754,952 |
|
| $ | 193,427 |
|
| $ | 224,939 |
|
Cost of sales |
|
| 182,923 |
|
|
| 189,126 |
|
|
| 516,268 |
|
|
| 517,841 |
|
|
| 133,029 |
|
|
| 149,795 |
|
Gross profit |
|
| 87,548 |
|
|
| 89,889 |
|
|
| 250,478 |
|
|
| 237,111 |
|
|
| 60,398 |
|
|
| 75,144 |
|
Selling and administrative expense |
|
| 77,358 |
|
|
| 76,296 |
|
|
| 226,190 |
|
|
| 219,774 |
|
|
| 71,379 |
|
|
| 75,173 |
|
Operating income |
|
| 10,190 |
|
|
| 13,593 |
|
|
| 24,288 |
|
|
| 17,337 |
| ||||||||
Interest expense |
|
| 447 |
|
|
| 323 |
|
|
| 1,095 |
|
|
| 1,204 |
| ||||||||
Income before income taxes |
|
| 9,743 |
|
|
| 13,270 |
|
|
| 23,193 |
|
|
| 16,133 |
| ||||||||
Income taxes |
|
| 3,793 |
|
|
| 5,083 |
|
|
| 9,139 |
|
|
| 6,941 |
| ||||||||
Net income |
| $ | 5,950 |
|
| $ | 8,187 |
|
| $ | 14,054 |
|
| $ | 9,192 |
| ||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Operating loss |
|
| (10,981 | ) |
|
| (29 | ) | ||||||||||||||||
Interest expense (income) |
|
| 123 |
|
|
| (115 | ) | ||||||||||||||||
(Loss) income before income taxes |
|
| (11,104 | ) |
|
| 86 |
| ||||||||||||||||
Income tax benefit |
|
| (2,818 | ) |
|
| (107 | ) | ||||||||||||||||
Net (loss) income |
| $ | (8,286 | ) |
| $ | 193 |
| ||||||||||||||||
(Loss) earnings per share: |
|
|
|
|
| |||||||||||||||||||
Basic |
| $ | 0.28 |
|
| $ | 0.38 |
|
| $ | 0.65 |
|
| $ | 0.43 |
|
| $ | (0.38 | ) |
| $ | 0.01 |
|
Diluted |
| $ | 0.28 |
|
| $ | 0.38 |
|
| $ | 0.65 |
|
| $ | 0.42 |
|
| $ | (0.38 | ) |
| $ | 0.01 |
|
Dividends per share |
| $ | 0.15 |
|
| $ | 0.125 |
|
| $ | 0.45 |
|
| $ | 0.375 |
| ||||||||
Weighted-average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Basic |
|
| 21,324 |
|
|
| 21,593 |
|
|
| 21,584 |
|
|
| 21,607 |
|
|
| 21,832 |
|
|
| 21,629 |
|
Diluted |
|
| 21,355 |
|
|
| 21,732 |
|
|
| 21,752 |
|
|
| 21,790 |
|
|
| 21,832 |
|
|
| 21,949 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
- 4 -
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
|
| 13 Weeks Ended March 31, 2024 |
| |||||||||||||||||||||
|
|
|
|
|
|
|
| Additional |
|
|
|
|
| Treasury |
|
|
|
| ||||||
|
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Stock, |
|
|
|
| |||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Earnings |
|
| At Cost |
|
| Total |
| ||||||
Balance as of December 31, 2023 |
|
| 22,440,362 |
|
| $ | 267 |
|
| $ | 128,737 |
|
| $ | 169,667 |
|
| $ | (54,257 | ) |
| $ | 244,414 |
|
Net loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (8,286 | ) |
|
| — |
|
|
| (8,286 | ) |
Dividends on common stock ($0.05 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,106 | ) |
|
| — |
|
|
| (1,106 | ) |
Issuance of nonvested share awards |
|
| 276,660 |
|
|
| 3 |
|
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Exercise of share option awards |
|
| 2,425 |
|
|
| — |
|
|
| 5 |
|
|
| — |
|
|
| — |
|
|
| 5 |
|
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 718 |
|
|
| — |
|
|
| — |
|
|
| 718 |
|
Forfeiture of nonvested share awards |
|
| (8,400 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retirement of common stock for payment |
|
| (86,005 | ) |
|
| (1 | ) |
|
| (307 | ) |
|
| — |
|
|
| — |
|
|
| (308 | ) |
Balance as of March 31, 2024 |
|
| 22,625,042 |
|
| $ | 269 |
|
| $ | 129,150 |
|
| $ | 160,275 |
|
| $ | (54,257 | ) |
| $ | 235,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| 13 Weeks Ended April 2, 2023 |
| |||||||||||||||||||||
|
|
|
|
|
|
|
| Additional |
|
|
|
|
| Treasury |
|
|
|
| ||||||
|
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Stock, |
|
|
|
| |||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Earnings |
|
| At Cost |
|
| Total |
| ||||||
Balance as of January 1, 2023 |
|
| 22,184,495 |
|
| $ | 264 |
|
| $ | 126,512 |
|
| $ | 196,265 |
|
| $ | (54,257 | ) |
| $ | 268,784 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 193 |
|
|
| — |
|
|
| 193 |
|
Dividends on common stock ($0.25 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (5,540 | ) |
|
| — |
|
|
| (5,540 | ) |
Issuance of nonvested share awards |
|
| 273,160 |
|
|
| 3 |
|
|
| (3 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Exercise of share option awards |
|
| 18,800 |
|
|
| — |
|
|
| 57 |
|
|
| — |
|
|
| — |
|
|
| 57 |
|
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 679 |
|
|
| — |
|
|
| — |
|
|
| 679 |
|
Forfeiture of nonvested share awards |
|
| (3,080 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retirement of common stock for payment |
|
| (79,204 | ) |
|
| (1 | ) |
|
| (618 | ) |
|
| — |
|
|
| — |
|
|
| (619 | ) |
Balance as of April 2, 2023 |
|
| 22,394,171 |
|
| $ | 266 |
|
| $ | 126,627 |
|
| $ | 190,918 |
|
| $ | (54,257 | ) |
| $ | 263,554 |
|
|
|
|
|
|
|
|
|
|
| Additional |
|
|
|
|
|
| Treasury |
|
|
|
|
| ||
|
| Common Stock |
|
| Paid-In |
|
| Retained |
|
| Stock, |
|
|
|
|
| ||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Earnings |
|
| At Cost |
|
| Total |
| ||||||
Balance as of January 3, 2016 |
|
| 21,917,982 |
|
| $ | 246 |
|
| $ | 112,236 |
|
| $ | 118,998 |
|
| $ | (32,649 | ) |
| $ | 198,831 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 9,192 |
|
|
| — |
|
|
| 9,192 |
|
Dividends on common stock ($0.375 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (8,223 | ) |
|
| — |
|
|
| (8,223 | ) |
Issuance of nonvested share awards |
|
| 166,980 |
|
|
| 2 |
|
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Exercise of share option awards |
|
| 6,225 |
|
|
| — |
|
|
| 47 |
|
|
| — |
|
|
| — |
|
|
| 47 |
|
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 1,790 |
|
|
| — |
|
|
| — |
|
|
| 1,790 |
|
Tax deficiency from share-based awards activity |
|
| — |
|
|
| — |
|
|
| (222 | ) |
|
| — |
|
|
| — |
|
|
| (222 | ) |
Forfeiture of nonvested share awards |
|
| (15,770 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retirement of common stock for payment of withholding tax |
|
| (53,682 | ) |
|
| (1 | ) |
|
| (612 | ) |
|
| — |
|
|
| — |
|
|
| (613 | ) |
Purchases of treasury stock |
|
| (126,899 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,610 | ) |
|
| (1,610 | ) |
Balance as of October 2, 2016 |
|
| 21,894,836 |
|
| $ | 247 |
|
| $ | 113,237 |
|
| $ | 119,967 |
|
| $ | (34,259 | ) |
| $ | 199,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2017 |
|
| 22,012,651 |
|
| $ | 248 |
|
| $ | 114,797 |
|
| $ | 124,363 |
|
| $ | (34,371 | ) |
| $ | 205,037 |
|
Net income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 14,054 |
|
|
| — |
|
|
| 14,054 |
|
Dividends on common stock ($0.45 per share) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (9,849 | ) |
|
| — |
|
|
| (9,849 | ) |
Issuance of nonvested share awards |
|
| 203,112 |
|
|
| 2 |
|
|
| (2 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
Exercise of share option awards |
|
| 11,086 |
|
|
| — |
|
|
| 67 |
|
|
| — |
|
|
| — |
|
|
| 67 |
|
Share-based compensation |
|
| — |
|
|
| — |
|
|
| 1,750 |
|
|
| — |
|
|
| — |
|
|
| 1,750 |
|
Forfeiture of nonvested share awards |
|
| (21,555 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Retirement of common stock for payment of withholding tax |
|
| (54,012 | ) |
|
| (1 | ) |
|
| (804 | ) |
|
| — |
|
|
| — |
|
|
| (805 | ) |
Net disgorgement of stockholder's short-swing profits |
|
| — |
|
|
| — |
|
|
| 136 |
|
|
| — |
|
|
| — |
|
|
| 136 |
|
Purchases of treasury stock |
|
| (677,109 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (6,904 | ) |
|
| (6,904 | ) |
Balance as of October 1, 2017 |
|
| 21,474,173 |
|
| $ | 249 |
|
| $ | 115,944 |
|
| $ | 128,568 |
|
| $ | (41,275 | ) |
| $ | 203,486 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
- 5 -
BIG 5 SPORTING GOODS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
| 39 Weeks Ended |
|
| 13 Weeks Ended |
| ||||||||||
|
| October 1, 2017 |
|
| October 2, 2016 |
|
| March 31, |
|
| April 2, |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Net income | $ |
| 14,054 |
| $ |
| 9,192 |
| ||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Net (loss) income |
| $ | (8,286 | ) |
| $ | 193 |
| ||||||||
Adjustments to reconcile net (loss) income to net cash |
|
|
|
|
| |||||||||||
provided by operating activities: |
|
|
|
|
| |||||||||||
Depreciation and amortization |
|
| 14,324 |
|
|
| 14,289 |
|
|
| 4,375 |
|
|
| 4,510 |
|
Share-based compensation |
|
| 1,750 |
|
|
| 1,790 |
|
|
| 718 |
|
|
| 679 |
|
Excess tax benefit related to share-based awards |
|
| — |
|
|
| (57 | ) | ||||||||
Amortization of debt issuance costs |
|
| 130 |
|
|
| 132 |
| ||||||||
Amortization of other assets |
|
| 183 |
|
|
| 115 |
| ||||||||
Noncash lease expense |
|
| 17,353 |
|
|
| 17,451 |
| ||||||||
Deferred income taxes |
|
| 2,140 |
|
|
| 1,726 |
|
|
| (2,769 | ) |
|
| (107 | ) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accounts receivable, net |
|
| 3,599 |
|
|
| 5,246 |
|
|
| 385 |
|
|
| 1,036 |
|
Merchandise inventories, net |
|
| (15,012 | ) |
|
| 9,608 |
|
|
| (80 | ) |
|
| (11,922 | ) |
Prepaid expenses and other assets |
|
| (1,701 | ) |
|
| 2,127 |
|
|
| 3,281 |
|
|
| 771 |
|
Accounts payable |
|
| (12,033 | ) |
|
| 17,772 |
|
|
| 14,612 |
|
|
| 25,364 |
|
Operating lease liabilities |
|
| (17,885 | ) |
|
| (17,970 | ) | ||||||||
Accrued expenses and other long-term liabilities |
|
| (12,802 | ) |
|
| (6,788 | ) |
|
| (3,674 | ) |
|
| (7,828 | ) |
Net cash (used in) provided by operating activities |
|
| (5,551 | ) |
|
| 55,037 |
| ||||||||
Net cash provided by operating activities |
|
| 8,213 |
|
|
| 12,292 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Purchases of property and equipment |
|
| (11,374 | ) |
|
| (10,215 | ) |
|
| (1,810 | ) |
|
| (2,529 | ) |
Net cash used in investing activities |
|
| (11,374 | ) |
|
| (10,215 | ) |
|
| (1,810 | ) |
|
| (2,529 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Principal borrowings under revolving credit facility |
|
| 177,785 |
|
|
| 142,678 |
| ||||||||
Principal payments under revolving credit facility |
|
| (141,358 | ) |
|
| (174,649 | ) | ||||||||
Changes in book overdraft |
|
| (3,671 | ) |
|
| (3,018 | ) |
|
| (86 | ) |
|
| (383 | ) |
Debt issuance costs |
|
| (140 | ) |
|
| — |
| ||||||||
Principal payments under capital lease obligations |
|
| (1,181 | ) |
|
| (1,125 | ) | ||||||||
Principal payments under finance lease liabilities |
|
| (899 | ) |
|
| (818 | ) | ||||||||
Proceeds from exercise of share option awards |
|
| 67 |
|
|
| 47 |
|
|
| 5 |
|
|
| 57 |
|
Proceeds from disgorgement of stockholder's short-swing profits |
|
| 346 |
|
|
| — |
| ||||||||
Excess tax benefit related to share-based awards |
|
| — |
|
|
| 57 |
| ||||||||
Purchases of treasury stock |
|
| (6,829 | ) |
|
| (1,610 | ) | ||||||||
Tax withholding payments for share-based compensation |
|
| (805 | ) |
|
| (613 | ) |
|
| (308 | ) |
|
| (619 | ) |
Dividends paid |
|
| (9,840 | ) |
|
| (8,229 | ) |
|
| (1,695 | ) |
|
| (6,106 | ) |
Net cash provided by (used in) financing activities |
|
| 14,374 |
|
|
| (46,462 | ) | ||||||||
Net cash used in financing activities |
|
| (2,983 | ) |
|
| (7,869 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Net decrease in cash |
|
| (2,551 | ) |
|
| (1,640 | ) | ||||||||
Net increase in cash and cash equivalents |
|
| 3,420 |
|
|
| 1,894 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash at beginning of period |
|
| 7,895 |
|
|
| 7,119 |
| ||||||||
Cash and cash equivalents at beginning of period |
|
| 9,201 |
|
|
| 25,565 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Cash at end of period | $ |
| 5,344 |
| $ |
| 5,479 |
| ||||||||
Cash and cash equivalents at end of period |
| $ | 12,621 |
|
| $ | 27,459 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Property and equipment acquired under capital leases | $ |
| 2,666 |
| $ |
| 1,014 |
| ||||||||
Property and equipment acquired under finance leases |
| $ | 477 |
|
| $ | 30 |
| ||||||||
Property and equipment additions unpaid | $ |
| 1,734 |
| $ |
| 2,211 |
|
| $ | 857 |
|
| $ | 946 |
|
|
|
|
|
|
|
|
|
| ||||||||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Interest paid | $ |
| 972 |
| $ |
| 1,069 |
|
| $ | 303 |
|
| $ | 154 |
|
Income taxes paid | $ |
| 10,003 |
| $ |
| 555 |
|
| $ | — |
|
| $ | 12 |
|
See accompanying notes to unaudited condensed consolidated financial statements.
- 6 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Big 5 Sporting Goods Corporation (the “Company”) is a leading sporting goods retailer in the western United States, operating 432424 stores and an e-commerce platform as of October 1, 2017.March 31, 2024. The Company provides a full-line product offering in a traditional sporting goods store format that averages approximately 11,00012,000 square feet. The Company’s product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, home recreation, tennis, golf, and winter and summer recreation and roller sports.recreation. The Company is a holding company that operates as one reportable segment through Big 5 Corp., its 100%100%-owned subsidiary, and Big 5 Services Corp., which is a 100%100%-owned subsidiary of Big 5 Corp. Big 5 Services Corp. provides a centralized operation for the issuance and administration of gift cards.cards and returned merchandise credits (collectively, “stored-value cards”).
The accompanying interim unaudited condensed consolidated financial statements (“Interim Financial Statements”) of the Company and its 100%-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, these Interim Financial Statements do not include all of the information and notes required by GAAP for complete financial statements. These Interim Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 1, 2017December 31, 2023 included in the Company’s Annual Report on Form 10-K. In the opinion of management, the Interim Financial Statements included herein contain all adjustments, including normal recurring adjustments, considered necessary to present fairly the Company’s financial position, the results of operations and cash flows for the periods presented.
The operating results and cash flows of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year.
Consolidation
|
|
Consolidation
The accompanying Interim Financial Statements include the accounts of Big 5 Sporting Goods Corporation, Big 5 Corp. and Big 5 Services Corp. Intercompany balances and transactions have been eliminated in consolidation.
Reporting Period
The Company follows the concept of a 52-5352-53 week fiscal year, which ends on the Sunday nearest December 31. Fiscal year 20172024 is comprised of 52 weeks and ends on December 31, 2017.29, 2024. Fiscal year 20162023 was comprised of 52 weeks and ended on January 1, 2017.December 31, 2023. The fiscal interim periods in fiscal 20172024 and 20162023 are each comprised of 13 weeks.
Recently AdoptedIssued Accounting Updates
In March 2016,October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation2023-06, Disclosure Improvements—Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which incorporates into the Accounting Standards Codification (“ASC”) certain incremental disclosure requirements introduced by the Securities and Exchange Commission (“SEC”) as part of its disclosure update and simplification initiative. The amendments in this update are intended to clarify or improve presentation and disclosure requirements around a variety of ASC Topics, improve entity comparability for users, and align ASC requirements with SEC regulations. For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the ASC and not become effective. Early adoption is prohibited. The Company does not expect the issuance of this ASU to have a material impact on its consolidated financial statements.
- 7 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 718): 280)—Improvements to Employee Share-Based Payment AccountingReportable Segment Disclosures, which includesaims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments in the ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple provisions intended to simplify various aspectssegment measures of the accountingprofit or loss, provide new segment disclosure requirements for share-based payments, including treatment of excess tax benefitsentities with a single reportable segment, and forfeitures, as well as consideration of minimum statutory tax withholdingcontain other disclosure requirements. The ASU took effectapplies to all public entities that are required to report segment information in accordance with ASC 280, and is effective for public companies for fiscal years, and interim periods within those fiscal years beginning after December 15, 2016, with early application permitted as of the beginning of an interim or annual reporting period. The Company adopted this standard in the first quarter of fiscal 2017, coinciding with the standard’s effective date, and has applied the effects of the adoption from the beginning of fiscal 2017, as follows:
Excess tax benefits or deficiencies are applied prospectively and recorded as a component of the income tax provision in the fiscal 2017 interim unaudited condensed consolidated statement of operations. Such amounts were previously recognized in additional paid-in capital, to the extent that there was a sufficient additional paid-in capital pool related to previously-recognized tax benefits, on the Company’s consolidated balance sheets. No prior periods have been adjusted.
The Company had no unrecognized tax benefits related to its share-based payment awards at the adoption date. Therefore, no cumulative-effect adjustment to retained earnings was required as of the adoption date.
- 7 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Earnings per share amounts presented in the fiscal 2017 interim unaudited condensed consolidated statement of operations have been adjusted prospectively, and exclude the impact of assumed proceeds from tax benefits under the treasury stock method, since such amounts are now included as a component of the income tax provision and are no longer recognized in additional paid-in capital on the Company’s consolidated balance sheet. No prior periods have been adjusted.
Excess tax benefits no longer represent financing activities since they are recognized in the fiscal 2017 interim unaudited condensed consolidated statement of operations; therefore, excess tax benefits have been classified as operating activities in the fiscal 2017 interim unaudited condensed consolidated statement of cash flows. The ASU eliminated the requirement to reclassify excess tax benefits from operating activities to financing activities. The Company elected to apply the change in presentation prospectively, and no prior periods have been adjusted.
The Company elected to continue to estimate the total number of awards for which the service period will not be rendered, which resulted in no change to the Company’s Interim Financial Statements.
The Company currently presents cash payments to taxing authorities in connection with shares withheld to meet statutory tax withholding requirements as a financing activity, which resulted in no change to the Company’s Interim Financial Statements.
The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Updates
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was further clarified and amended in 2015 and 2016, and supersedes most preexisting revenue recognition guidance with a comprehensive new revenue recognition model. The core principle is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU No. 2014-09 will become effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017, with early application permitted. The Company plans to adopt this standard retrospectively with the cumulative effect of initially applying this ASU recognized in the first quarter of fiscal 2018, coinciding with the standard’s effective date. While the Company is still evaluating this ASU, the Company has determined that the new standard will primarily impact the following areas: gift card breakage will be recognized based on actual customer redemptions, rather than when redemption is considered remote; estimated costs of sales returns will be recorded as a current asset rather than netted with the sales return reserve; and, revenues related to online sales will be recognized upon shipment rather than customer receipt. The Company continues to analyze its revenue streams for the areas discussed above, along with all required disclosures, and currently does not expect that this standard will have a material impact on the Company’s consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize on the balance sheet assets and liabilities for leases with lease terms of more than 12 months. Consistent with GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet—the new ASU will require both types of leases to be recognized on the balance sheet. The ASU will take effect for public companies for fiscal years,2023 and interim periods within those fiscal years beginning after December 15, 2018. This ASU shall be applied at the beginning of the earliest period presented using the modified retrospective approach, which includes a number of practical expedients that an entity may elect to apply. Early application of ASU No. 2016-02 is2024, with early adoption permitted. The Company plans tohas not early adopted the ASU for interim periods. The Company will adopt this standard in the first quarter of fiscal 2019, coinciding with the standard’s effective date. WhileASU for its annual period ending December 29, 2024, and the Company is still evaluating this ASU, the Company has determined that the primary impact will be to recognize on the balance sheet all leases with remaining lease terms greater than 12 months. It is expected that this standard will have a material impact on the Company’s consolidated financial statements. The Company continues to evaluate the fullfuture impact of the new standard, as well as the effectissuance of this ASU on business processes, systems and internal controls.its consolidated financial statements.
- 8 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
In January 2017,December 2023, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other2023-09, Income Taxes (Topic 350): Simplifying the Test for Goodwill Impairment740)—Improvements to Income Tax Disclosures, which eliminatesinclude improvements to income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the second step of the goodwill impairment test. The newrate reconciliation and (2) income taxes paid disaggregated by jurisdiction. This ASU requires application of a one-step quantitative test,also includes certain other amendments to better align disclosures with Regulation S-X and recognition of the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. Theremove disclosures no longer considered cost beneficial or relevant. This ASU will take effectis effective for public companiesentities for fiscal years, and interimannual periods within those fiscal years, beginning after December 15, 2019, and shall2024, with earlier or retrospective application permitted. The amendments in this ASU should be applied prospectively. Early adoption of ASU No. 2017-04 is permittedprospectively for interimannual financial statements not yet issued or annual goodwill impairment tests performed on testing dates after January 1, 2017.made available for issuance. The Company is considering early adoptionevaluating the future impact of the issuance of this new standard, to be appliedASU on a prospective basis, and currently does not expect that this standard will have a material impact on the Company’sits consolidated financial statements.
Other recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements.Interim Financial Statements.
General Concentration of Risk
The Company purchases merchandise from over 600 suppliers, and the Company’s 20 largest suppliers accounted for 39.3% of total purchases in fiscal 2023. One vendor represented greater than 5% of total purchases in fiscal 2023, at 5.1%.
A substantial amount of the Company’s inventory is manufactured abroad and, from time to time, shipping ports may experience capacity constraints (such as delays associated with the novel coronavirus “COVID-19”), labor strikes, work stoppages or other disruptions that may delay the delivery of imported products. A contract dispute may lead to protracted delays in the movement of the Company’s products, which could further delay the delivery of products to the Company’s stores and impact net sales and profitability. In addition, other conditions outside of the Company’s control, such as adverse weather conditions or acts of terrorism or war, such as the current conflicts in Ukraine and the Middle East, could significantly disrupt operations at shipping ports or otherwise impact transportation of the imported merchandise we sell, either through supply chain disruptions, or rising freight and fuel costs.
Use of Estimates
Management has mademakes a number of estimates and assumptions relating to the reporting of assets, liabilities and stockholders’ equity and the disclosure of contingent assets and liabilities as ofat the date of the Interim Financial Statements and reported amounts of revenue and expense during the reporting period to prepare these Interim Financial Statements in conformity with GAAP. Certain items subject to such estimates and assumptions include the carrying amount of merchandise inventories, property and equipment, lease assets and goodwill;lease liabilities; valuation allowances for receivables, sales returns and deferred income tax assets; estimates related to gift card breakagestored-value cards and the valuation of share-based compensation awards; and obligations related to litigation, self-insurance liabilities and employee benefits. Actual results could differ significantly from these estimates under differentDue to the inherent uncertainty involved in making assumptions and conditions.estimates, events and changes in circumstances arising after March 31, 2024 may result in actual outcomes that differ from those contemplated by management’s assumptions and estimates.
- 8 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Revenue Recognition
The Company recognizesoperates solely as a sporting goods retailer, which includes both retail stores and an e-commerce platform, that offers a broad range of products in the western United States and online. Generally, all revenue from retail salesis recognized when control of the promised goods is transferred to customers, for an amount that reflects the consideration in exchange for those goods. Accordingly, the Company implicitly enters into a contract with customers to deliver merchandise inventory at the point of sale through itssale. Collectability is probable since the Company only extends immaterial credit purchases to certain municipalities and local school districts.
In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company disaggregates net sales into the following major merchandise categories to depict the nature and amount of revenue and related cash flows:
|
| 13 Weeks Ended |
| |||||
|
| March 31, |
|
| April 2, |
| ||
|
| (In thousands) |
| |||||
Hardgoods |
| $ | 87,792 |
|
| $ | 102,764 |
|
Athletic and sport footwear |
|
| 52,617 |
|
|
| 58,982 |
|
Athletic and sport apparel |
|
| 51,455 |
|
|
| 61,308 |
|
Other sales |
|
| 1,563 |
|
|
| 1,885 |
|
Net sales |
| $ | 193,427 |
|
| $ | 224,939 |
|
Substantially all of the Company’s revenue is for single performance obligations for the following distinct items:
For performance obligations related to retail stores. Forstore and e-commerce sales revenue is recognizedcontracts, the Company typically transfers control, for retail stores, upon consummation of the sale when the merchandiseproduct is delivered topaid for and taken by the customer. Shippingcustomer and, handling fees, when billed to customers for e-commerce sales, are included in netwhen the product is tendered for delivery to the common carrier. For performance obligations related to stored-value cards, the Company typically transfers control upon redemption of the stored-value card through consummation of a future sales and the relatedtransaction. The Company accounts for shipping and handling costs are included in cost of sales. An allowancerelative to e-commerce sales as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for sales returns is estimated based upon historical experience and recorded as a reduction in sales in the relevant period.
Cash received fromonly one performance obligation, the sale of gift cards is recorded as a liability,the product, at shipping point (when the customer gains control). Revenue associated with e-commerce sales was not material for the 13 weeks ended March 31, 2024 and revenue is recognized upon the redemption of the gift card or when it is determined that the likelihood of redemption is remote (“gift card breakage”) and no liability to relevant jurisdictions exists. The Company does not sell gift cards that carry expiration dates. The Company determines the gift card breakage rate based upon historical redemption patterns and recognizes gift card breakage on a straight-line basis over the estimated gift card redemption period (20 quarters as of the end of the third quarter of fiscal 2017). April 2, 2023.
The Company recognized approximately $111,000$1.4 million and $334,000$1.7 million in giftstored-value card redemption revenue for the 13 weeks ended March 31, 2024 and April 2, 2023, respectively. The Company also recognized $0.1 million in stored-value card breakage revenue for each of the 1313-week periods ended March 31, 2024 and 39 weeks ended October 1, 2017, respectively, compared to approximately $112,000 and $337,000 in gift card breakage revenue for the 13 and 39 weeks ended OctoberApril 2, 2016, respectively.2023. The Company had outstanding giftstored-value card liabilities of $4.1$8.7 million and $5.39.2 million as of October 1, 2017March 31, 2024 and January 1, 2017,December 31, 2023, respectively, which are included in accrued expenses.expenses in the accompanying interim unaudited condensed consolidated balance sheets. Based upon historical experience, stored-value cards are predominantly redeemed in the first two years following their issuance date.
TheIn the accompanying interim unaudited condensed consolidated balance sheets, the Company recordsrecorded, as prepaid expense, estimated right-of-return merchandise cost of $0.6 million and $0.9 million related to estimated sales tax collected from its customers on a net basis,returns as of March 31, 2024 and therefore excludes it from revenueDecember 31, 2023, respectively, and recorded, in accrued expenses, an allowance for sales returns reserve of $1.2 million and $1.7 million as defined in Accounting Standards Codification (“ASC”) 605, Revenue Recognition.of March 31, 2024 and December 31, 2023, respectively.
Share-Based Compensation
The Company accounts for its share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. The Company recognizes compensation expense on a straight-line basis over the requisite service period using the fair-value method for share option awards, nonvested share awards and nonvested share unit awards granted with service-only conditions. See Note 11 to the Interim Financial Statements for a further discussion on share-based compensation.
- 9 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and highly-liquid investments of excess cash into U.S. Treasury bills, which have original maturities of three months or less. See Note 4 to the Interim Financial Statements for a further discussion on the fair value of U.S. Treasury bills. Book overdrafts are classified as current liabilities in the Company’s interim unaudited condensed consolidated balance sheets.
Valuation of Merchandise Inventories, Net
The Company’s merchandise inventories are made up of finished goods and are valued at the lower of cost or net realizable value using the weighted-average cost method whichthat approximates the first-in, first-out (“FIFO”) method. Average cost includes the direct purchase price of merchandise inventory, net of certain vendor allowances and cash discounts, in-bound freight-related expense and allocated overhead expense associated with the Company’s distribution center.
- 9 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Management regularly reviews inventories and records valuation reserves for damaged and defective merchandise, merchandise items with slow-moving or obsolescence exposure and merchandise that has a carrying value that exceeds net realizable value. Because of its merchandise mix, the Company has not historically experienced significant occurrences of obsolescence.
Inventory shrinkage is accrued as a percentage of merchandise sales based on historical inventory shrinkage trends. The Company performs physical inventories of its stores at least once per year and cycle counts inventories at its distribution center throughout the year. The reserve for inventory shrinkage primarily represents an estimate for inventory shrinkage for each store since the last physical inventory date through the reporting date.
These reserves are estimates, which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from expectations.
Valuation of Long-Lived Assets
TheIn accordance with ASC 360, Property, Plant, and Equipment, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows (“asset group”), usually at the store level. Each store typically requires net investments of approximately $0.5 million in long-lived assets to be held and used, subject to recoverability testing. The carrying amount of ana store asset group includes stores’ property and equipment, primarily leasehold improvements, and operating lease right-of-use (“ROU”) assets. The carrying amount of a store asset group is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the store asset group. Factors that could trigger an impairment review include a current-period operating or cash flow loss combined with a history of operating and cash flow losses, and a projection that demonstrates continuing losses or insufficient income over the remaining reasonably certain lease term associated with the use of a store asset group. Other factors may include an adverse change in the business climate or an adverse action or assessment by a regulator in the market of a store asset group. When stores are identified as having an indicator of impairment, the Company forecasts undiscounted cash flows over the store asset group’s remaining reasonably certain lease term and compares the undiscounted cash flows to the carrying amount of the store asset group. If the store asset group is determined not to be recoverable, then an impairment charge will be recognized in the amount by which the carrying amount of the store asset group exceeds its fair value, determined using discounted cash flow valuation techniques, as definedcontemplated in ASC 360, Property, Plant, and Equipment820, Fair Value Measurements.
The Company determines the sum of the undiscounted cash flows expected to result from the store asset group by projecting future revenue, gross margin and operating expense for each store asset group under evaluation for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. Assumptions used in these forecasts are consistent with internal planning, and include assumptions about sales growth rates, gross margins and operating expense in relation to the current economic environment and the Company’s future expectations, competitive factors in theits various markets, inflation, sales trends and inflation.other relevant environmental factors that may impact the store under evaluation. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions. If economic conditions deteriorate in the markets in which the Company conducts business, or if other negative market conditions develop, the Company may experience additional impairment charges in the future for underperforming stores.
- 10 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The resulting impairment charge, if any, is allocated to the property and equipment, primarily leasehold improvements, and operating lease ROU assets on a pro-rata basis using the relative carrying amounts of those assets. The allocated impairment charge to a long-lived asset is limited to the extent that the impairment charge does not reduce the carrying amount of the individual long-lived asset below its individual fair value. The estimation of the fair value of an ROU asset involves the evaluation of current market value rental amounts for leases associated with ROU assets. The estimates of current market value rental amounts are primarily based on recent observable market rental data of other comparable retail store locations. The fair value of an ROU asset is measured using a discounted cash flow valuation technique by discounting the estimated current and future market rental values using a property-specific discount rate.
The Company recognized did not recognize any impairment charges in the first 39 weeksquarter of fiscal 20172024 or 2016.2023.
Leases
In accordance with ASC 842, Leases and Deferred Rent
, the Company determines if an arrangement is a lease at inception. The Company accounts for its leases under the provisions of ASC 840, Leases.
The Company evaluateshas operating and classifies its leases as either operating or capital leases for financial reporting purposes. Operating lease commitments consist principally offinance leases for the Company’s retail store facilities, distribution center, corporate office, IToffices, information technology (“IT”) systems hardware, and distribution center delivery tractors. Capitaltractors and equipment. Operating leases are included in operating lease obligations consist principallyROU assets and operating lease liabilities, current and noncurrent, on the interim unaudited condensed consolidated balance sheets. Finance leases are included in property and equipment and finance lease liabilities, current and noncurrent, on the interim unaudited condensed consolidated balance sheets. Lease liabilities are calculated using the effective interest method, regardless of leases for someclassification, while the amortization of ROU assets varies depending upon classification. Finance lease classification results in a front-loaded expense recognition pattern over the lease term which amortizes the ROU asset by recognizing interest expense and amortization expense as separate components of lease expense and calculates the amortization expense component on a straight-line basis. Conversely, operating lease classification results in a straight-line expense recognition pattern over the lease term and recognizes lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Lease expense for finance and operating leases are included in cost of sales or selling and administrative expense, based on the use of the leased asset, on the interim unaudited condensed consolidated statements of operations. Variable payments such as property taxes, insurance and common area maintenance related to triple net leases, as well as certain equipment sales taxes, licenses, fees and repairs, are expensed as incurred, and leases with an initial term of 12 months or less are excluded from minimum lease payments and are not recorded on the interim unaudited condensed consolidated balance sheets. The Company recognizes variable lease expense for these short-term leases on a straight-line basis over the remaining lease term.
ROU assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. As the Company’s IT systems hardware.leases generally do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate (“IBR”) to determine the present value of lease payments. The collateralized IBR is based on a synthetic credit rating that is externally prepared on an annual basis. This analysis considers qualitative and quantitative factors based on guidance provided by a rating agency for the consumer durables industry. The Company adjusts the selected IBR quarterly with a company-specific unsecured yield curve that approximates the Company’s market risk profile. The collateralized IBR is also based upon the estimated impact that the collateral has on the IBR. To account for the collateralized nature of the IBR, the Company utilized a notching method based on notching guidance provided by a rating agency whereby the Company’s base credit rating is notched upward as the yield curve on a secured loan is expected to be lower versus an unsecured loan.
The operating lease ROU asset also includes any prepaid lease payments made and is reduced by lease incentives such as tenant improvement allowances. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term.
Certain of the leases for the Company’s retail store facilities provide for payments based on future sales volumes at the leased location, which are not measurable at the inception of the lease. TheseUnder ASC 842, these contingent rents are expensed as they accrue.
Deferred rent representsSee Note 6 to the difference between rent paid and the amounts expensedInterim Financial Statements for operatinga further discussion on leases. Certain leases have scheduled rent increases, and certain leases include an initial period of free or reduced rent as an inducement to enter into the lease agreement (“rent holidays”). The Company recognizes rent expense for rent increases and rent holidays on a straight-line basis over the term of the underlying leases, without regard to when rent payments are made. The calculation of straight-line rent is based on the “reasonably assured” lease term as defined in ASC 840 and may exceed the initial non-cancelable lease term.
Landlord allowances for tenant improvements, or lease incentives, are recorded as deferred rent and amortized on a straight-line basis over the “reasonably assured” lease term as a component of rent expense.
- 1011 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
|
|
Store closing costs primarily include lease termination costsLong-lived assets are reviewed for leasesimpairment whenever events or changes in circumstances indicate that expire in January 2018. The following table summarizes the activity forcarrying amount of an asset may not be recoverable. No long-lived assets were subject to impairment and no impairment charges were recognized as of March 31, 2024. Assets subject to the Company’s store closing reserves:
| Lease Termination Costs |
| |
| (In thousands) |
| |
Balance at January 1, 2017 | $ | 788 |
|
Store closing costs |
| (137 | ) |
Payments |
| (600 | ) |
Balance at October 1, 2017 | $ | 51 |
|
Store closing cost activity inevaluation totaled $253.6 million and $58.6 million for ROU assets and property and equipment, respectively, as of December 31, 2023. In the first 39 weeksfourth quarter of fiscal 2017 reflects2023, the early terminationCompany recognized non-cash impairment charges of two store leases that resulted$0.6 million related to certain underperforming stores. These impairment charges represented property, equipment and leasehold improvements of $0.5 million and ROU assets of $0.1 million, and were included in settlement of their lease obligations for less than the amounts originally recorded.
Accrued store closing costs is recorded in accruedselling and administrative expense in the accompanying interim unaudited condensed consolidated balance sheet.statements of operations in fiscal 2023. The lower-than-expected sales performance, coupled with future unfavorable undiscounted cash flow projections, indicated that the carrying value of these stores’ assets exceeded their estimated fair values as determined by their future discounted cash flow projections.
|
|
The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate the fair values of these instruments due to their short-term nature. Cash equivalents consist of highly-liquid investments of excess cash into U.S. Treasury bills, which have original maturities of three months or less. As of March 31, 2024 and December 31, 2023, the Company had no cash equivalents. As of April 2, 2023, the Company recorded $15.0 million in cash equivalents and classified these assets as Level 1 inputs, which are quoted prices (unadjusted) in active markets for identical assets that the Company can access at the measurement date. The Company records these cash equivalents monthly, based on the prevailing market interest rate as of the measurement date. Book overdrafts for checks outstanding are classified as current liabilities in the Company’s interim unaudited condensed consolidated balance sheets. The carrying amount for borrowings, if any, under the revolvingCompany’s credit facility approximates fair value because of the variable market interest rate charged to the Company for these borrowings. When the Company recognizes impairment on certain of its underperforming stores, the carrying values of these stores’ assetsstores are reduced to their estimated fair values.
The Company’s only significant assets or liabilities measured at fair value on a nonrecurring basis subsequent to their initial recognition were assets subject to long-lived asset impairment related to certain underperforming stores. The Company estimates the fair values of these long-lived assets based on the Company’s own judgments about the assumptions that market participants would use in pricing the asset and on observable real estate market data of underperforming stores’ specific comparable markets, when available. The Company classifies these fair value measurements as Level 3 inputs, which are unobservable inputs for which market data are not available and that are developed using the best information available about pricing assumptions used by market participants in accordance with ASC 820. As of March 31, 2024, there were no long-lived assets subject to impairment and as of December 31, 2023, there were $0.6 million of long-lived assets subject to impairment.
|
|
The major components of accrued expenses are as follows:
|
| March 31, |
|
| December 31, |
| ||
|
| (In thousands) |
| |||||
Payroll and related expense |
| $ | 21,355 |
|
| $ | 22,331 |
|
Occupancy expense |
|
| 8,803 |
|
|
| 8,655 |
|
Sales tax |
|
| 6,234 |
|
|
| 7,581 |
|
Other |
|
| 20,914 |
|
|
| 22,716 |
|
Accrued expenses |
| $ | 57,306 |
|
| $ | 61,283 |
|
|
| October 1, 2017 |
|
| January 1, 2017 |
| ||
|
| (In thousands) |
| |||||
Payroll and related expense |
| $ | 22,528 |
|
| $ | 24,224 |
|
Occupancy expense |
|
| 10,886 |
|
|
| 10,981 |
|
Sales tax |
|
| 8,022 |
|
|
| 11,376 |
|
Other |
|
| 24,599 |
|
|
| 30,306 |
|
Accrued expenses |
| $ | 66,035 |
|
| $ | 76,887 |
|
- 12 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The Company has operating and finance leases for the Company’s retail store facilities, distribution center, corporate offices, IT systems hardware, and distribution center delivery tractors and equipment, and accounts for these leases in accordance with ASC 842.
Certain of the leases for the Company’s retail store facilities provide for variable payments for property taxes, insurance, common area maintenance payments related to triple net leases, rental payments based on future sales volumes at the leased location, as well as certain equipment sales taxes, licenses, fees and repairs, which are not measurable at the inception of the lease, or rental payments that are adjusted periodically for inflation. The Company recognizes variable lease expense for these leases in the period incurred which, for contingent rent, begins in the period in which it becomes probable that the specified target that triggers the variable lease payments will be achieved. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
|
|
The components of lease expense were as follows:
|
| 13 Weeks Ended |
| |||||
|
| March 31, |
|
| April 2, |
| ||
|
| (In thousands) |
| |||||
Lease expense: |
|
|
|
|
|
| ||
Operating lease expense |
| $ | 21,039 |
|
| $ | 21,038 |
|
Variable lease expense |
|
| 4,682 |
|
|
| 4,813 |
|
Operating lease expense |
|
| 25,721 |
|
|
| 25,851 |
|
|
|
|
|
|
|
| ||
Amortization of right-of-use assets |
|
| 1,142 |
|
|
| 950 |
|
Interest on lease liabilities |
|
| 228 |
|
|
| 79 |
|
Finance lease expense |
|
| 1,370 |
|
|
| 1,029 |
|
Total lease expense |
| $ | 27,091 |
|
| $ | 26,880 |
|
Other information related to leases was as follows:
|
| 13 Weeks Ended |
| |||||
|
| March 31, |
|
| April 2, |
| ||
|
| (In thousands) |
| |||||
Operating cash flows from operating leases |
| $ | 22,213 |
|
| $ | 22,211 |
|
Financing cash flows from finance leases |
|
| 899 |
|
|
| 818 |
|
Operating cash flows from finance leases |
|
| 261 |
|
|
| 85 |
|
Cash paid for amounts included in the measurement of lease liabilities |
| $ | 23,373 |
|
| $ | 23,114 |
|
|
|
|
|
|
|
| ||
Right-of-use assets obtained in exchange for new finance lease liabilities |
| $ | 517 |
|
| $ | 30 |
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
| $ | 21,674 |
|
| $ | 11,183 |
|
Weighted-average remaining lease term—finance leases |
| 4.1 years |
|
| 3.7 years |
| ||
Weighted-average remaining lease term—operating leases |
| 4.9 years |
|
| 5.0 years |
| ||
Weighted-average discount rate—finance leases |
|
| 6.2 | % |
|
| 3.9 | % |
Weighted-average discount rate—operating leases |
|
| 5.5 | % |
|
| 5.1 | % |
- 13 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Maturities of finance and operating lease liabilities as of March 31, 2024 were as follows:
Fiscal Year Ending: |
| Finance |
|
| Operating |
| ||
|
| (In thousands) |
| |||||
2024 (remaining nine months) |
| $ | 3,749 |
|
| $ | 61,091 |
|
2025 |
|
| 4,372 |
|
|
| 72,583 |
|
2026 |
|
| 4,057 |
|
|
| 56,475 |
|
2027 |
|
| 2,824 |
|
|
| 39,897 |
|
2028 |
|
| 4,620 |
|
|
| 28,472 |
|
Thereafter |
|
| 594 |
|
|
| 45,683 |
|
Undiscounted cash flows |
| $ | 20,216 |
|
| $ | 304,201 |
|
Reconciliation of lease liabilities: |
|
|
|
|
|
| ||
Weighted-average remaining lease term |
| 4.1 years |
|
| 4.9 years |
| ||
Weighted-average discount rate |
|
| 6.2 | % |
|
| 5.5 | % |
Present values |
| $ | 15,277 |
|
| $ | 265,417 |
|
Lease liabilities - current |
|
| 3,984 |
|
|
| 67,805 |
|
Lease liabilities - long-term |
|
| 11,293 |
|
|
| 197,612 |
|
Lease liabilities - total |
| $ | 15,277 |
|
| $ | 265,417 |
|
Difference between undiscounted and discounted cash flows |
| $ | 4,939 |
|
| $ | 38,784 |
|
On October 18, 2010, the
The Company, Big 5 Corp. and Big 5 Services Corp. entered intoare parties to a credit agreementLoan, Guaranty and Security Agreement with Wells Fargo Bank National Associationof America, N.A. (“Wells Fargo”BofA”), as administrative agent and a syndicate of other lenders,lender, which was amended on November 22, 2021, October 31, 201119, 2022 and December 19, 2013May 16, 2023 (as so amended, the “Credit“Loan Agreement”). On September 29, 2017, the parties amended certain provisions The Loan Agreement has a maturity date of the Credit Agreement (such amendment, the “Third Amendment”), as further discussed below.
- 11 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The Credit AgreementFebruary 24, 2026 and provides for a revolving credit facility (the “Credit Facility”) with an aggregate committed availability of up to $140.0 million, which amount may be increased at the Company’s option up to a maximum of $165.0$150.0 million. The Company may also request additional increases in aggregate availability, up to a maximum of $200.0$200.0 million, in which case the existing lenderslender under the CreditLoan Agreement will have the option to increase their commitmentsthe commitment to accommodate the requested increase. If such existing lenders dolender does not exercise that option, the Company may (with the consent of Wells Fargo,BofA in its role as the administrative agent, not to be unreasonably withheld) seek other lenders willing to provide such commitments. The Third AmendmentThe credit facility includes a provision which permits the Company to elect to reduce the aggregate committed availability under the Credit Agreement to $100.0 million for a three-month period each calendar year. Prior to the Third Amendment, the Credit Facility included a $50.0$50.0 million sublimit for issuances of letters of credit. The Third Amendment reduced the letter of credit sublimit to $25.0 million. The Credit Facility includes a $20.0 million sublimit for swingline loans.
The Company may borrow under the Credit FacilityLoan Agreement from time to time, provided the amounts outstanding will not exceed the lesser of the then aggregate committed availability (as discussed above) and the Borrowing Base (such lesser amount being referred to as the “Loan“Line Cap”). TheAs defined in the Loan Agreement, the “Borrowing Base” generally is comprised of the sum, at the time of calculation, of (a) 90.00%90.00% of eligible credit card receivables; plus (b) the cost of eligible inventory (other than eligible in-transit inventory), net of inventory reserves, multiplied by 90.00%90.00% of the appraised net orderly liquidation value of eligible inventory (expressed as a percentage of the cost of eligible inventory); plus (c) the lesser of (i) the cost of eligible in-transit inventory, net of inventory reserves, multiplied by 90.00%90.00% of the appraised net orderly liquidation value of eligible in-transit inventory (expressed as a percentage of the cost of eligible in-transit inventory), or (ii) $10.0 million, minus (d) certain agreed-upon reserves as well as other reserves established by Wells FargoBofA in its role as the Administrative Agentadministrative agent in its reasonable discretion.
Generally, the Company may designate specific borrowings under the Credit FacilityLoan Agreement as either base rate loans or LIBOTerm SOFR rate loans. The applicable interest rate on the Company’s borrowings is a function of the daily average, over the preceding fiscal quarter, of the excess of the LoanLine Cap over amounts borrowed (such amount being referred to as the “Average Daily Availability”). Prior to the Third Amendment, thoseThose loans designated as LIBOTerm SOFR rate loans borebear interest at a rate equal to the then applicable LIBOsecured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) rate plus a 0.10% “SOFR adjustment” spread, plus an applicable margin as shown in the table below. Those loans designated as base rate loans borebear interest at a rate equal to the applicable margin for base rate loans (as shown below) plus the highest of (a) the Federal funds rate, as in effect from time to time, plus one-half of one percent (0.50%(0.50%), (b) the LIBO rate, as adjusted to account for statutory reserves, plus one percent (1.00%), or (c) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate.” Prior to the Third Amendment, the applicable margin for all loans under the existing Credit Agreement was as set forth below as a function of Average Daily Availability for the preceding fiscal quarter.
Level |
| Average Daily Availability |
| LIBO Rate Applicable Margin |
|
| Base Rate Applicable Margin |
| ||
I |
| Greater than or equal to $100,000,000 |
|
| 1.25% |
|
|
| 0.25% |
|
II |
| Less than $100,000,000 but greater than or equal to $40,000,000 |
|
| 1.50% |
|
|
| 0.50% |
|
III |
| Less than $40,000,000 |
|
| 1.75% |
|
|
| 0.75% |
|
Prior to the Third Amendment, the commitment fee assessed on the unused portion of the Credit Facility was 0.25% per annum.
After giving effect to the Third Amendment, those loans designated as LIBO rate loans will bear interest at a rate equal to the then applicable adjusted LIBO rate plus an applicable margin as shown in the table below. Those loans designated as base rate loans bear interest at a rate equal to the applicable margin for base rate loans (as shown below) plus the highest of (a) the Federal funds rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the LIBOone-month SOFR rate, plus one percentage point (1.00%(1.00%), or (c) the rate of interest in effect for such day as announced from time to time within Wells FargoBofA as its “prime rate.” The applicable margin for all loans will beis a function of Average Daily Availability for the preceding fiscal quarter as set forth below.in the following table.
- 14 -
Level |
| Average Daily Availability |
| LIBO Rate Applicable Margin |
|
| Base Rate Applicable Margin |
| ||
I |
| Greater than or equal to $70,000,000 |
|
| 1.25% |
|
|
| 0.25% |
|
II |
| Less than $70,000,000 |
|
| 1.375% |
|
|
| 0.50% |
|
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Level |
| Average Daily Availability |
| SOFR Rate |
| Base Rate |
I |
| Greater than or equal to $70,000,000 |
| 1.375% |
| 0.375% |
II |
| Less than $70,000,000 |
| 1.500% |
| 0.500% |
After giving effect to the Third Amendment, theThe commitment fee assessed on the unused portion of the Credit Facilitycredit facility is 0.20%0.20% per annum.
- 12 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Obligations under the Credit FacilityLoan Agreement are secured by a general lien on and perfected security interest in substantially all of the Company’s assets. The CreditLoan Agreement contains covenants that require the Company to maintain a fixed charge coverage ratio of not less than 1.0:1.0:1.0 in certain circumstances, and limitlimits the ability to, among other things, incur liens, incur additional indebtedness, transfer or dispose of assets, change the nature of the business, guarantee obligations, pay dividends or make other distributions or repurchase stock, and make advances, loans or investments. The Company may generally declare or pay cash dividends or repurchase stock only if, among other things, no default or event of default then exists or would arise from such dividend or repurchase of stock and, after giving effect to such dividend or repurchase, certain availability and/or fixed charge coverage ratio requirements are satisfied. satisfied, although the Company is permitted to make up to $5.0 million of dividend payments or stock repurchases per year without satisfaction of the availability or fixed charge coverage ratio requirements, but dividends or stock repurchases made without satisfying the availability and/or fixed charge coverage ratio requirements will require the establishment of an additional reserve that will reduce borrowing availability under the Loan Agreement for 75 days. The CreditLoan Agreement contains customary events of default, including, without limitation, failure to pay when due principal amounts with respect to the Credit Facility,credit facility, failure to pay any interest or other amounts under the Credit Facility for five days after becoming due,credit facility, failure to comply with certain agreements or covenants contained in the CreditLoan Agreement, failure to satisfy certain judgments against the Company, failure to pay when due (or any other default which does or may lead topermits the acceleration of) certain other material indebtedness in principal amount in excess of $5.0$5.0 million, and certain insolvency and bankruptcy events.
The Third Amendment extended the maturity date of the Credit Agreement from December 19, 2018 to September 29, 2022. As of October 1, 2017,March 31, 2024 and December 31, 2023, the Company hadno long-term revolving credit borrowings outstanding. As of $46.4 millionMarch 31, 2024 and December 31, 2023, the Company had outstanding letter of credit commitments of $0.5 million outstanding, compared with borrowings of $10.0 million and letter of credit commitments of $0.5 million as of January 1, 2017.$2.0 million. Total remaining borrowing availability, after subtracting letters of credit, was $93.1 million and $129.5$148.0 million as of October 1, 2017March 31, 2024 and January 1, 2017, respectively.December 31, 2023.
|
|
Under the asset and liability method prescribed under ASC 740, Income Taxes, the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The realizability of deferred tax assets is assessed throughout the year and a valuation allowance is recorded, if necessary, to reduce net deferred tax assets to the amount more likely than not to be realized. As of October 1, 2017March 31, 2024 and January 1, 2017,December 31, 2023, there was no valuation allowance for deferred income tax assets.
The Company files a consolidated federal income tax return and files tax returns in various state and local jurisdictions. The statutes of limitations for consolidated federal income tax returns are open for fiscal years 20142020 and after, and state and local income tax returns are open for fiscal years 20122019 and after.
The provision for income taxes for the 39 weeks ended October 2, 2016 reflects the write-off of deferred tax assets related to share-based compensation of $0.8 million.
As of October 1, 2017March 31, 2024 and January 1, 2017,December 31, 2023, the Company had no unrecognized tax benefits including those that, if recognized, would affect the Company’s effective income tax rate over the next 12 months.months. The Company’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expense. As of October 1, 2017March 31, 2024 and January 1, 2017,December 31, 2023, the Company had no accrued interest or penalties.
- 15 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
|
|
The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share is calculated by dividing net income by the weighted-average shares of common stock outstanding, reduced by shares repurchased and held in treasury, during the period. Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding share option awards, nonvested share awards and nonvested share unit awards. During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded.
- 13 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
The following table sets forth the computation of basic and diluted earnings per common share:
|
| 13 Weeks Ended |
|
| 39 Weeks Ended |
| ||||||||||
|
| October 1, 2017 |
|
| October 2, 2016 |
|
| October 1, 2017 |
|
| October 2, 2016 |
| ||||
|
| (In thousands, except per share data) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ | 5,950 |
|
| $ | 8,187 |
|
| $ | 14,054 |
|
| $ | 9,192 |
|
Weighted-average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 21,324 |
|
|
| 21,593 |
|
|
| 21,584 |
|
|
| 21,607 |
|
Dilutive effect of common stock equivalents arising from share option, nonvested share and nonvested share unit awards |
|
| 31 |
|
|
| 139 |
|
|
| 168 |
|
|
| 183 |
|
Diluted |
|
| 21,355 |
|
|
| 21,732 |
|
|
| 21,752 |
|
|
| 21,790 |
|
Basic earnings per share |
| $ | 0.28 |
|
| $ | 0.38 |
|
| $ | 0.65 |
|
| $ | 0.43 |
|
Diluted earnings per share |
| $ | 0.28 |
|
| $ | 0.38 |
|
| $ | 0.65 |
|
| $ | 0.42 |
|
Antidilutive share option awards excluded from diluted calculation |
|
| 64 |
|
|
| 154 |
|
|
| 90 |
|
|
| 239 |
|
Antidilutive nonvested share and nonvested share unit awards excluded from diluted calculation |
|
| 381 |
|
|
| 2 |
|
|
| 135 |
|
|
| — |
|
|
| 13 Weeks Ended |
| |||||
|
| March 31, |
|
| April 2, |
| ||
|
| (In thousands, except per share data) |
| |||||
Net (loss) income |
| $ | (8,286 | ) |
| $ | 193 |
|
Weighted-average shares of common stock |
|
|
|
|
|
| ||
Basic |
|
| 21,832 |
|
|
| 21,629 |
|
Dilutive effect of common stock equivalents |
|
| — |
|
|
| 320 |
|
Diluted |
|
| 21,832 |
|
|
| 21,949 |
|
Basic (loss) earnings per share |
| $ | (0.38 | ) |
| $ | 0.01 |
|
Diluted (loss) earnings per share |
| $ | (0.38 | ) |
| $ | 0.01 |
|
Antidilutive share option awards excluded from |
|
| 227 |
|
|
| 20 |
|
Antidilutive nonvested share awards excluded |
|
| 573 |
|
|
| 371 |
|
The computation of diluted earnings per share for the 13 and 39 weeks ended October 1, 2017 and October 2, 2016first quarter of fiscal 2024 excludes all potential share option awards that were outstandingsince the Company reported a net loss, and the effect of their inclusion would have been antidilutive (i.e., including such share option awards would result in higher earnings per share),. The computation of diluted earnings per share for the first quarter of fiscal 2023 excludes certain share option awards since the exercise prices of these share option awards exceeded the average market price of the Company’s common shares. Additionally,shares, and the effect of their inclusion would have been antidilutive.
The computation of diluted earnings per share for the periods presentedfirst quarter of fiscal 2024 excludes all potential nonvested share awards since the Company reported a net loss, and the effect of their inclusion would have been antidilutive. The computation of diluted earnings per share for the first quarter of fiscal 2023 excludes certain nonvested share unit awards that were outstanding and antidilutive since the grant date fair values of these nonvested share awards and nonvested share unit awards exceeded the average market price of the Company’s common shares.
|
|
In the third quarter of fiscal 2017, the Company recorded approximately $0.1 million related to the net recovery of short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company recognized these related party proceeds, net of $0.2 million of related legal fees and taxes, as an increase to additional paid-in capital in the accompanying interim unaudited condensed consolidated balance sheet as of October 1, 2017, as well as cash proceeds of approximately $0.3 million as cash provided by financing activities in the accompanying interim unaudited condensed consolidated statement of cash flows for the 39 weeks ended October 1, 2017.
|
|
In February 2008, the Company entered into a lease for a parcel of land with an existing building adjacent to its corporate headquarters location, including a parking lot currently used by the Company (the “premises”). The lease term commenced in 2009 and the primary term was originally scheduled to expire on February 28, 2019, subject to renewal for six successive periods of five years each. In accordance with terms of the lease agreement, the Company is committed to the construction of a new retail building on the premises before the primary term expires, regardless of whether or not any renewal options are exercised. In May 2017, the Company entered into an amendment to the lease to, among other things, extend the primary lease term, and consequently the construction deadline, to a date between February 29, 2020 and June 30, 2020, the exact date to be determined as described in more detail below. Such extension required a non-refundable payment of $40,000, which the Company made concurrently with execution of the amendment. The amendment further sets forth the Company’s intent to enter into a purchase and sale agreement, whereby the Company would have the right to purchase the premises for $4.5 million, subject to a 120-day due diligence period. If consummation of the sale fails to occur by June 30, 2018, then the Company’s lease would remain in full force and effect, including the construction deadline, which would be the later of (a) February 29, 2020, or (b) the earlier of (i) two (2) years after the date that the purchase and sale agreement is terminated, or (ii) June 30, 2020. The Company is currently in the process of negotiating the purchase and sale agreement with the owner of the premises.
- 1416 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Recovery of Insurance Proceeds
In the fourth quarter of fiscal 2022, one of the Company’s stores qualified for loss recovery claims due to property damage sustained as a result of a roof collapse, and the Company disposed of assets of approximately $0.4 million related to lost inventory and property and equipment. In the third quarter of fiscal 2023, the Company reached an agreement with its insurance carrier and, after application of a deductible of $0.5 million, the Company received, as part of the insurance recovery, a cash advance of $0.7 million in total, of which $0.6 million related to the reimbursement of lost inventory and profit margin and $0.1 million related to the reimbursement of property and equipment. Accordingly, the Company recognized a gain of $0.3 million related to the recovery of lost inventory and profit margin and a gain of $25,000 related to the recovery of property and equipment. The gain related to the recovery of lost inventory and profit margin was included in the consolidated statement of operations as a reduction to cost of goods sold and the gain related to the recovery of lost property and equipment was included in the consolidated statement of operations as a reduction to selling and administrative expense for fiscal 2023. While further recovery is expected in fiscal 2024, no recoveries were received in the first quarter of fiscal 2024.
Legal Proceedings
On March 13, 2023, a complaint was filed in the Superior Court of the State of California, County of Santa Clara, entitled Zareyah Thompson v. Big 5 Corp., et. al., Case No. 23CV412334 (“Thompson Complaint”). The Thompson Complaint was brought as a purported California Private Attorneys General Act (“PAGA”) action on behalf of “current and former employees who worked for the Company or its operating subsidiary in California as a non-exempt, hourly paid employee and received at least one wage statement.” The Thompson Complaint alleges, among other things, that Big 5 failed to (i) provide minimum wages, (ii) provide compliant meal or rest periods, (iii) maintain and provide accurate itemized wage statements, (iv) properly compensate for all time worked, including overtime, premium, vacation and final wages, (v) properly maintain payroll records, and (vi) provide suitable seating. On March 21, 2023, a second complaint was filed in the Superior Court of the State of California, County of Santa Clara, entitled Christopher Puga v. Big 5 Corp., et. al., Case No. 23CV412953 (“Puga Complaint”). The Puga Complaint was brought as a purported PAGA action on behalf of “all current and former non-exempt employees that worked either directly or via a staffing agency for the Company or its operating subsidiary at any location in California” (“Putative Covered Employees”). The Puga Complaint alleges, among other things, that Big 5 (i) unlawfully required Putative Covered Employees to agree to unlawful criminal background checks, (ii) conducted unlawful financial and criminal background checks, and did not (iii) provide minimum wages, (iv) provide accurate itemized wage statements, (v) maintain accurate records pertaining to the Putative Covered Employees’ employment, (vi) produce or make available Putative Covered Employees’ personnel records and/or payroll records, (vii) provide compliant meal or rest periods, (viii) properly compensate for all time worked, including overtime, premium, vacation, and final wages, (ix) reimburse necessary business expenses; (x) provide suitable seating; (xi) provide sick leave pay to Putative Covered Employees, (xii) accurately calculate sick leave accrual and rate of pay, (xiii) put the Putative Covered Employees on notice of their paid sick leave rights, and (xiv) provide supplemental paid sick leave. The Thompson and Puga complaints have many overlapping causes of action. Accordingly, on or about April 12, 2023, a notice of related cases was filed with the Court regarding the Thompson Complaint and Puga Complaint. The Court subsequently conducted a case management conference on June 29, 2023 for both complaints, and jointly coordinated the complaints. The Company’s counsel held a mediation with opposing counsel on September 27, 2023. The Company has reached a tentative settlement in both cases and established a cumulative indemnity reserve of $1.5 million. Any settlement finalized will be subject to Court approval.
The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s results of operations, financial condition or financial condition.cash flows.
In June 2022, the Company amended and restated its 2019 Equity Incentive Plan (the “2019 Plan”), primarily authorizing an additional 3,300,000 shares available for future grant. As of March 31, 2024, 2,613,650 shares remained registered and available for future grant under the 2019 Plan.
|
|
At its discretion, the Company grants share option awards, nonvested share awards and nonvested share unit awards to certain employees, as defined by ASC 718, Compensation—Stock Compensation, under the Company’s 2007 Equity and Performance Incentive2019 Plan, as amended and restated in April 2011 and April 2016 (the “Amended 2007 Plan”), and accounts for its share-based compensation in accordance with ASC 718. The Company recognized $0.6 million and $1.8$0.7 million in share-based compensation expense for each of the 1313-week periods ended March 31, 2024 and 39 weeks ended October 1, 2017, respectively, compared to $0.5 million and $1.8 million in share-based compensation expense for the 13 and 39 weeks ended OctoberApril 2, 2016, respectively.2023.
- 17 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Share Option Awards
Share option awards granted by the Company generally vest and become exercisable in four equal annual installments of 25%25% per year with a maximum life of ten years.years. The exercise price of share option awards is equal to the quoted market price of the Company’s common stock on the date of grant. The Company granted 272,000 share option awards in the first quarter of fiscal 2024 with a weighted-average grant-date fair value of $2.52 per share option award. No share option awards were granted in the first 39 weeksquarter of fiscal 20172023.
A summary of the status of the Company’s share option awards is presented below:
|
| Shares |
|
| Weighted- |
|
| Weighted- |
|
| Aggregate |
| ||||
Outstanding at December 31, 2023 |
|
| 253,385 |
|
| $ | 4.47 |
|
|
|
|
|
|
| ||
Granted |
|
| 272,000 |
|
|
| 4.80 |
|
|
|
|
|
|
| ||
Exercised |
|
| (2,425 | ) |
|
| 2.23 |
|
|
|
|
|
|
| ||
Outstanding at March 31, 2024 |
|
| 522,960 |
|
| $ | 4.65 |
|
|
| 7.75 |
|
| $ | 177,731 |
|
Exercisable at March 31, 2024 |
|
| 238,460 |
|
| $ | 3.79 |
|
|
| 5.28 |
|
| $ | 177,731 |
|
Vested and Expected to Vest at March 31, 2024 |
|
| 517,569 |
|
| $ | 4.65 |
|
|
| 7.73 |
|
| $ | 177,731 |
|
The aggregate intrinsic value represents the total pretax intrinsic value, based upon the Company’s most recent closing stock price of $3.52 as of March 31, 2024, which would have been received by the share option award holders had all share option award holders exercised their share option awards as of that date.
The total intrinsic value of share option awards exercised, the total cash received from employees as a result of employee share option award exercises and 2016.the actual tax benefit realized for the tax deduction from share option award exercises in the first quarter of fiscal 2024 were not material.
The fair value of each share option award on the date of grant was estimated using the Black-Scholes method based on the following weighted-average assumptions:
13 Weeks Ended | ||||||||
March 31, | April 2, | |||||||
Risk-free interest rate | 4.2 | % | — | |||||
Expected term | 7.5 years | — | ||||||
Expected volatility | 77.6 | % | — | |||||
Expected dividend yield | 4.1 | % | — |
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based upon the Company’s dividend rate at the time fair value is measured and future expectations.
As of October 1, 2017,March 31, 2024, there was $0.1$0.7 million of total unrecognized compensation expense related to nonvested share option awards granted. That expense is expected to be recognized over a weighted-average period of 1.53.9 years.
Nonvested Share Awards and Nonvested Share Unit Awards
Nonvested share awards and nonvested share unit awards granted by the Company have historically vestedvest for employees from the date of grant in four equal annual installments of 25%25% per year. In accordance with the Company’s Director Compensation Program, nonvestedNonvested share awards and nonvested share unit awards granted by the Company to non-employee directors for their service as directors, as defined by ASC 718, generally vest 100%100% on the earlier of (a) the date of the Company’s next annual stockholders meeting following the grant date, or (b) the first anniversary of the grant date.
- 18 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Nonvested share awards become outstanding when granted and are delivered to the recipient upon their vesting. With respect to nonvestedVested share unit awards, vested shares will beincluding any dividend reinvestments, are delivered to the recipient on the tenth business day of January following the year in which the recipient’s service to the Company is terminated.terminated, at which time the units convert to shares and become outstanding. The total fair value of nonvested share awards which vested during the first 39 weeksquarter of fiscal 20172024 and 20162023 was $2.0$0.8 million and $1.6$1.6 million, respectively. The total fair value ofNo nonvested share unit awards which vested during the first 39 weeksquarter of fiscal 20172024 and 2016 was $0.2 million and $0.5 million, respectively.2023.
The Company granted 191,000276,660 and 166,980273,160 nonvested share awards in the first 39 weeksquarter of fiscal 20172024 and 2016,2023, respectively. The weighted-average grant-date fair value per share of the Company’s nonvested share awards granted in the first 39 weeksquarter of fiscal 20172024 and 20162023 was $14.88$3.58 and $11.35,$7.82, respectively.
The Company granted 21,000 and 25,200No nonvested share unit awards inwere granted during the first 39 weeksperiods presented.
A summary of fiscal 2017 and 2016, respectively. The weighted-average grant-date fair value per sharethe status of the Company’s nonvested share unit awards granted in the first 39 weeks of fiscal 2017 and 2016 was $13.90 and $8.87, respectively.is presented below:
The following table details the Company’s nonvested share awards activity for the 39 weeks ended October 1, 2017:
|
| Shares |
|
| Weighted- Average Grant- Date Fair Value |
| ||||||||||
Balance at January 1, 2017 |
|
| 355,130 |
|
| $ | 12.86 |
| ||||||||
|
| Shares |
|
| Weighted- |
| ||||||||||
Balance at December 31, 2023 |
|
| 634,227 |
|
| $ | 10.56 |
| ||||||||
Granted |
|
| 191,000 |
|
|
| 14.88 |
|
|
| 276,660 |
|
|
| 3.58 |
|
Vested |
|
| (137,135 | ) |
|
| 13.46 |
|
|
| (218,410 | ) |
|
| 9.97 |
|
Forfeited |
|
| (21,555 | ) |
|
| 13.47 |
|
|
| (8,400 | ) |
|
| 11.01 |
|
Balance at October 1, 2017 |
|
| 387,440 |
|
| $ | 13.61 |
| ||||||||
Balance at March 31, 2024 |
|
| 684,077 |
|
| $ | 7.92 |
|
- 15 -
BIG 5 SPORTING GOODS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
To satisfy employee minimum statutory tax withholding requirements for nonvested share awards that vest, the Company withholds and retires a portion of the vesting common shares, unless an employee elects to pay cash. In the first 39 weeksquarter of fiscal 2017,2024, the Company withheld 54,01286,005 common shares with a total value of $0.8$0.3 million. This amount is presented as a cash outflow from financing activities in the accompanying interim unaudited condensed consolidated statement of cash flows.
As of October 1, 2017,March 31, 2024, there was $4.0 million and $0.2$4.8 million of total unrecognized compensation expense related to nonvested share awards, and nonvested share unit awards, respectively. That expensewhich is expected to be recognized over a weighted-average period of 2.6 years and 0.7 years for nonvested share awards and2.8 years. As of March 31, 2024, there was no remaining unrecognized compensation expense related to nonvested share unit awards, respectively.awards.
|
|
In the fourth quarter of fiscal 2017,On April 25, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.15$0.05 per share of outstanding common stock, which will be paid on December 15, 2017June 14, 2024 to stockholders of record as of December 1, 2017.May 31, 2024.
- 1619 -
REPORT OF INDEPENDENT REGISTEREDREGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors and Stockholders of
Big 5 Sporting Goods Corporation
El Segundo, California
Results of Review of Interim Financial Information
We have reviewed the accompanying condensed consolidated balance sheet of Big 5 Sporting Goods Corporation and subsidiaries (the “Company”) as of October 1, 2017, andMarch 31, 2024, the related condensed consolidated statements of operations, for the 13 and 39 weeks ended October 1, 2017 and October 2, 2016, and of stockholders’ equity, and cash flows for the 39 weeksfiscal 13-week periods ended October 1, 2017March 31, 2024 and OctoberApril 2, 2016. These2023, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements areinformation for it to be in conformity with accounting principles generally accepted in the responsibilityUnited States of the Company’s management.America.
We conducted our reviewshave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated February 28, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Big 5 Sporting Goods Corporation and subsidiaries as of January 1, 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 1, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 1, 2017 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
/s/ Deloitte & Touche LLP
Los Angeles, California
NovemberMay 1, 20172024
- 1720 -
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the Big 5 Sporting Goods Corporation (“we,” “our,” “us”) financial condition and results of operations includes information with respect to our plans and strategies for our business and should be read in conjunction with our interim unaudited condensed consolidated financial statements and related notes (“Interim Financial Statements”) included herein, the Risk Factors included herein and in our other filings with the Securities and Exchange Commission (“SEC”), and our consolidated financial statements, related notes, Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended January 1, 2017.December 31, 2023.
Our fiscal year ends on the Sunday nearest December 31. Fiscal 2017 includes2024 is comprised of 52 weeks and ends on December 31, 2017.29, 2024. Fiscal 2016 included2023 was comprised of 52 weeks and ended on January 1, 2017.December 31, 2023. The fiscal interim periods in fiscal 20172024 and 20162023 are each comprised of 13 weeks.
Overview
We are a leading sporting goods retailer in the western United States, operating 432with 424 stores and an e-commerce platform under the name “Big 5 Sporting Goods” as of October 1, 2017.March 31, 2024. We provide a full-line product offering in a traditional sporting goods store format that averages approximately 11,00012,000 square feet. Our product mix includes athletic shoes, apparel and accessories, as well as a broad selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, home recreation, tennis, golf, and winter and summer recreation and roller sports.recreation.
Executive Summary
Our earnings forIn the thirdfirst quarter of fiscal 2017 decreased compared to2024 we closed six stores and in the thirdfirst quarter of fiscal 20162023 we closed two stores. For fiscal 2024, we anticipate opening approximately five new stores and closing approximately ten stores.
Executive Summary
Our net loss in the first quarter of fiscal 2024 compared with net income in the first quarter of fiscal 2023 primarily due toreflected the unfavorable impact of lowerreduced net sales, which was partially offset by the favorable effect of higher merchandise margins and higherlower selling and administrative expense partially offset by improved merchandise marginsyear over year. The decrease in net sales in the first quarter of fiscal 2024 in part reflected significant and lower distribution expense. Same storepersistent inflationary pressures which continued to dampen consumer sentiment and reduce demand for discretionary products.
|
|
Net incomeGross profit for the thirdfirst quarter of fiscal 2017 was $6.02024 represented 31.2% of net sales, compared with 33.4% in the first quarter of the prior year. Higher store occupancy expense and distribution expense, including costs capitalized into inventory, as a percentage of net sales were partially offset by the favorable impact of higher merchandise margins.
Gross profit for the third quarter of fiscal 2017 represented 32.4% of net sales, compared with 32.2% in the third quarter of the prior year. The increase in gross profit margin resulted mainly from higher merchandise margins as well as lower distribution expense as a percentage of net sales.
Selling and administrative expense for the third quarter of fiscal 2017 increased 1.4% to $77.4 million, or 28.6% of net sales, compared to $76.3 million, or 27.3% of net sales, for the third quarter of fiscal 2016. The increase in selling and administrative expense was primarily attributable to higher employee labor and benefit-related expense and expense associated with various IT-related systems and services.
Operating cash flow for the first 39 weeksquarter of fiscal 20172024 was a negative $5.6positive $8.2 million compared to operating cash flow in the first 39 weeksquarter of fiscal 20162023 of a positive $55.0 million,$12.3 million. The decreased operating cash flow was due primarily to increased funding of merchandise inventory.
Capital expenditures for the first 39 weeksquarter of fiscal 2017 increased2024 decreased to $11.4$1.8 million from $10.2$2.5 million for the first 39 weeksquarter of fiscal 2016.
- 21 -
The balance under our revolving credit facility was $46.4
We paid cash dividends in the first 39 weeksquarter of fiscal 20172024 of $9.8$1.7 million, or $0.45$0.05 per share, compared with $8.2$6.1 million, or $0.3750.25 per share, in the first 39 weeksquarter of fiscal 2016.
- 18 -
Results of Operations
The results of the interim periods are not necessarily indicative of results for the entire fiscal year.
13 Weeks Ended October 1, 2017March 31, 2024 Compared to 13 Weeks Ended OctoberApril 2, 20162023
The following table sets forth selected items from our interim unaudited condensed consolidated statements of operations by dollar and as a percentage of our net sales for the periods indicated:
|
| 13 Weeks Ended |
| |||||||||||||
|
| March 31, |
|
| April 2, |
| ||||||||||
|
| (Dollars in thousands) |
| |||||||||||||
Net sales |
| $ | 193,427 |
|
|
| 100.0 | % |
| $ | 224,939 |
|
|
| 100.0 | % |
Cost of sales (1) |
|
| 133,029 |
|
|
| 68.8 |
|
|
| 149,795 |
|
|
| 66.6 |
|
Gross profit |
|
| 60,398 |
|
|
| 31.2 |
|
|
| 75,144 |
|
|
| 33.4 |
|
Selling and administrative expense (2) |
|
| 71,379 |
|
|
| 36.9 |
|
|
| 75,173 |
|
|
| 33.4 |
|
Operating loss |
|
| (10,981 | ) |
|
| (5.7 | ) |
|
| (29 | ) |
|
| 0.0 |
|
Interest expense (income) |
|
| 123 |
|
|
| 0.1 |
|
|
| (115 | ) |
|
| (0.1 | ) |
(Loss) income before income taxes |
|
| (11,104 | ) |
|
| (5.8 | ) |
|
| 86 |
|
|
| 0.1 |
|
Income tax benefit |
|
| (2,818 | ) |
|
| (1.5 | ) |
|
| (107 | ) |
|
| 0.0 |
|
Net (loss) income |
| $ | (8,286 | ) |
|
| (4.3 | )% |
| $ | 193 |
|
|
| 0.1 | % |
|
| 13 Weeks Ended |
| |||||||||||||
|
| October 1, 2017 |
|
| October 2, 2016 |
| ||||||||||
|
| (Dollars in thousands) |
| |||||||||||||
Net sales |
| $ | 270,471 |
|
|
| 100.0 | % |
| $ | 279,015 |
|
|
| 100.0 | % |
Cost of sales (1) |
|
| 182,923 |
|
|
| 67.6 |
|
|
| 189,126 |
|
|
| 67.8 |
|
Gross profit |
|
| 87,548 |
|
|
| 32.4 |
|
|
| 89,889 |
|
|
| 32.2 |
|
Selling and administrative expense (2) |
|
| 77,358 |
|
|
| 28.6 |
|
|
| 76,296 |
|
|
| 27.3 |
|
Operating income |
|
| 10,190 |
|
|
| 3.8 |
|
|
| 13,593 |
|
|
| 4.9 |
|
Interest expense |
|
| 447 |
|
|
| 0.2 |
|
|
| 323 |
|
|
| 0.1 |
|
Income before income taxes |
|
| 9,743 |
|
|
| 3.6 |
|
|
| 13,270 |
|
|
| 4.8 |
|
Income taxes |
|
| 3,793 |
|
|
| 1.4 |
|
|
| 5,083 |
|
|
| 1.8 |
|
Net income |
| $ | 5,950 |
|
|
| 2.2 | % |
| $ | 8,187 |
|
|
| 3.0 | % |
|
|
|
|
Net Sales. Net sales decreased by $8.5$31.5 million, or 3.0%14.0%, to $270.5$193.4 million in the thirdfirst quarter ended October 1, 2017of fiscal 2024 from $279.0$224.9 million in the thirdfirst quarter last year. The change in net sales reflected the following:
Same store sales decreased by $7.9$29.9 million, or 2.9%13.5%, for the 13 weeks ended October 1, 2017,March 31, 2024, versus the comparable 13-week period in the prior year. ThisThe decline in same store sales was attributed to the following:
A reduction in sales from closed stores was partially offset by added sales from new stores opened since July 3, 2016.
We experienced decreased customer transactions of 13.8% and a higher average sale per transaction of 0.3% in the thirdfirst quarter of fiscal 20172024 compared to the same period lastprior year.
• The decrease in net sales also reflected the unfavorable impact from a calendar shift related to the Easter holiday, during which our stores are closed, from the second quarter in fiscal 2023 to the first quarter in fiscal 2024. - 22 - |
|
|
Store count was 432 as of October 1, 2017, which was unchanged from October 2, 2016. We closed one store in the 13 weeks ended October 1, 2017. We opened two new stores and closed five stores in the 13 weeks ended October 2, 2016. For fiscal 2017, we anticipate opening six new stores and closing three stores.
Gross Profit. Gross profit decreased by $2.4$14.7 million to $60.4 million, or 2.7%, to $87.5 million, or 32.4%31.2% of net sales, in the 13 weeks ended October 1, 2017, from $89.9March 31, 2024, compared with $75.1 million, or 32.2%33.4% of net sales, in the 13 weeks ended OctoberApril 2, 2016.2023. The change in gross profit was primarily attributable to the following:
Net sales decreased by $8.5$31.5 million, or 3.0%14.0%, compared with the thirdfirst quarter of last year.
- 19 -
Store occupancy expense increased by $0.5$0.2 million, or an unfavorable 43194 basis points year over year inas a percentage of net sales, compared with the thirdfirst quarter of fiscal 2017 due primarily to leases for new stores and lease renewals for existing stores.
Merchandise margins, which exclude buying, occupancy and distribution expense, increased by a favorable 5148 basis points compared with the thirdfirst quarter of last year. This increaseyear, primarily reflected a shiftreflecting shifts in sales mix towards higher-margin products and away from lower-margin products such as firearms.
Distribution expense, including costs capitalized into inventory, decreased by $0.5$0.6 million, or a favorable 3but increased by an unfavorable 59 basis points as a percentage of net sales, in the thirdfirst quarter of fiscal 20172024 compared to the prior year. The favorable impact fromdecrease primarily reflected increased costs capitalized into inventory was partially offset by higher expense primarily related to employee labor and benefit-related expense, as well as increased freight costs.
Selling and Administrative Expense. Selling and administrative expense increaseddecreased by $1.1$3.8 million to $77.4$71.4 million, or 28.6%36.9% of net sales, in the 13 weeks ended October 1, 2017 from $76.3March 31, 2024, compared to $75.2 million, or 27.3% of net sales, in the third quarter last year. The change in selling and administrative expense was primarily attributable to the following:
Store-related expense, excluding occupancy, increased by $0.9 million due primarily to higher employee labor and benefit-related expense.Our labor expense continues to reflect the incremental impact of legislated minimum wage rate increases primarily in California, where over fifty percent of our store operations are located. In April 2016, California passed legislation to enact minimum wage rate increases from $10.00 to $15.00 per hour to be implemented in annual increments through fiscal 2022, with annual increases of $0.50 per hour effective in fiscal 2017 and fiscal 2018, and annual increases of $1.00 per hour effective in fiscal 2019 through fiscal 2022.We estimate that the impact of the California minimum wage rate increase of $0.50 per hour effective in January 2017 caused our labor expense to increase by approximately $0.3 million for the third quarter of fiscal 2017.
Administrative expense increased by $0.2 million, primarily attributable to higher employee labor and benefit-related expense and higher expense associated with various IT-related systems and services, partially offset by a pre-tax charge of $1.1 million related to store closing costs in the third quarter of fiscal 2016.
Interest Expense. Interest expense increased by $0.1 million in the third quarter of fiscal 2017 compared to the third quarter of fiscal 2016.
Income Taxes. The provision for income taxes declined to $3.8 million for the 13 weeks ended October 1, 2017 from $5.1 million for the 13 weeks ended October 2, 2016, primarily as a result of lower pre-tax income in the third quarter of fiscal 2017 compared to the third quarter of fiscal 2016. Our effective tax rate was 38.9% for the third quarter of fiscal 2017 and 38.3% for the third quarter of fiscal 2016.
- 20 -
39 Weeks Ended October 1, 2017 Compared to 39 Weeks Ended October 2, 2016
The following table sets forth selected items from our interim unaudited condensed consolidated statements of operations by dollar and as a percentage of our net sales for the periods indicated:
|
| 39 Weeks Ended |
| |||||||||||||
|
| October 1, 2017 |
|
| October 2, 2016 |
| ||||||||||
|
| (Dollars in thousands) |
| |||||||||||||
Net sales |
| $ | 766,746 |
|
|
| 100.0 | % |
| $ | 754,952 |
|
|
| 100.0 | % |
Cost of sales (1) |
|
| 516,268 |
|
|
| 67.3 |
|
|
| 517,841 |
|
|
| 68.6 |
|
Gross profit |
|
| 250,478 |
|
|
| 32.7 |
|
|
| 237,111 |
|
|
| 31.4 |
|
Selling and administrative expense (2) |
|
| 226,190 |
|
|
| 29.5 |
|
|
| 219,774 |
|
|
| 29.1 |
|
Operating income |
|
| 24,288 |
|
|
| 3.2 |
|
|
| 17,337 |
|
|
| 2.3 |
|
Interest expense |
|
| 1,095 |
|
|
| 0.1 |
|
|
| 1,204 |
|
|
| 0.2 |
|
Income before income taxes |
|
| 23,193 |
|
|
| 3.1 |
|
|
| 16,133 |
|
|
| 2.1 |
|
Income taxes |
|
| 9,139 |
|
|
| 1.2 |
|
|
| 6,941 |
|
|
| 0.9 |
|
Net income |
| $ | 14,054 |
|
|
| 1.9 | % |
| $ | 9,192 |
|
|
| 1.2 | % |
|
|
|
|
Net Sales. Net sales increased by $11.7 million, or 1.5%, to $766.7 million in the 39 weeks ended October 1, 2017 from $755.0 million in the first 39 weeks last year. The change in net sales reflected the following:
Same store sales increased by $12.2 million, or 1.6%, for the 39 weeks ended October 1, 2017, versus the comparable 39-week period in the prior year. Our higher same store sales for the 39 weeks ended October 1, 2017 reflected increases in our major merchandise categories of apparel and footwear and a decrease in sales for hardgoods, which reflected lower demand for certain hardgoods categories such as firearms and related products. Our higher same store sales reflected the benefit experienced during the first and second fiscal quarters of this year from the liquidation and closure of certain major competitors that concluded in the third quarter of fiscal 2016, along with more favorable weather conditions in the first fiscal quarter of this year. We cycled the benefit of the competitive rationalization in the third quarter of fiscal 2017, which, along with the current challenging and competitive retail environment, contributed to negative sales comparisons for the third fiscal quarter. We expect unfavorable year-over-year sales comparisons to continue for the remainder of fiscal 2017. Same store sales for a period reflect net sales from stores that operated throughout the period as well as the full corresponding prior year period, and same store sales comparisons exclude sales from stores closed during the comparable periods.
A reduction in sales from closed stores was partially offset by added sales from new stores opened since January 3, 2016.
We experienced increased customer transactions that reflected the liquidation and closure of certain major competitors that concluded in the third quarter of fiscal 2016. We also achieved a higher average sale per transaction in the first 39 weeks of fiscal 2017 compared to the same period last year.
Store count was 432 as of October 1, 2017, which was unchanged from October 2, 2016. We opened three new stores, one of which was a relocation, and closed three stores, one of which was a relocation, in the 39 weeks ended October 1, 2017. We opened four new stores and closed ten stores, one of which was a relocation, in the 39 weeks ended October 2, 2016. For fiscal 2017, we anticipate opening six new stores and closing three stores.
Gross Profit. Gross profit increased by $13.4 million, or 5.7%, to $250.5 million, or 32.7% of net sales, in the 39 weeks ended October 1, 2017, from $237.1 million, or 31.4% of net sales, in the 39 weeks ended October 2, 2016. The change in gross profit was primarily attributable to the following:
Net sales increased by $11.7 million, or 1.5%, compared with the first 39 weeks of last year.
- 21 -
Merchandise margins, which exclude buying, occupancy and distribution expense, increased by a favorable 103 basis points compared with the first 39 weeks of last year. This increase reflected a shift in sales mix driven primarily by strong demand for winter products as a result of favorable weather conditions and reduced demand for lower-margin products such as firearms, combined with the positive impact of lower clearance activity and reduced promotional activities that resulted from competitive store closures in our markets in fiscal 2016.
Distribution expense, including costs capitalized into inventory, decreased by $2.2 million, or a favorable 35 basis points, in the first 39 weeks of fiscal 2017 compared to the prior year. Increased costs capitalized into inventory were partially offset by higher employee labor and benefit-related expense.
Store occupancy expense increased by $1.4 million, or an unfavorable 4 basis points, year over year in the first 39 weeks of fiscal 2017, due primarily to lease renewals for existing stores.
Selling and Administrative Expense. Selling and administrative expense increased by $6.4 million to $226.2 million, or 29.5% of net sales, in the 39 weeks ended October 1, 2017, from $219.8 million, or 29.1%33.4% of net sales, in the first 39 weeksquarter of last year. The change in selling and administrative expense was primarily attributable to the following:
Store-related expense, excluding occupancy, increaseddecreased by $3.7$3.0 million due primarilylargely to higherdecreases in employee labor, and benefit-related expense, as well as expense for IT-related systems and services and credit card fees.Our While employee labor expense continues to reflectdecreased by $2.7 million mainly as a result of managing employee labor hours in light of reduced sales, this reduction was partially offset by continuing wage rate pressures that included the incremental impact of legislated minimum wage rate increases primarily in California, where over fifty percenthalf of our store operationsstores are located. In April 2016, California passed legislationlocated, as well as higher demand for labor in certain markets resulting in higher wage rates. Our lower year-over-year store-related expense also reflected reduced stores in operation, which declined to enact minimum wage rate increases from $10.00 to $15.00 per hour to be implemented in annual increments through fiscal 2022, with annual increases of $0.50 per hour effective in fiscal 2017 and fiscal 2018, and annual increases of $1.00 per hour effective in fiscal 2019 through fiscal 2022.We estimate that424 stores at the impactend of the California minimum wage rate increasefirst quarter of $0.50 per hour effective in January 2017 caused our labor expense to increase by approximately $0.9 million forfiscal 2024 from 430 stores at the end of the first 39 weeksquarter of fiscal 2017.
Administrative expense increaseddecreased by $3.3$0.6 million, primarily attributable to higherdecreases in company performance-based incentive accruals, legal expense associated with various IT-related systems and services of $2.6 million and higher employee labor and benefit-related expense of $1.5 million, partially offset by a pre-tax charge of $1.2 million related to store closingtemporary staffing costs in the priorcurrent year.
AdvertisingOur advertising expense fordecreased by $0.2 million in the first 39 weeksquarter of fiscal 2017 decreased by $0.6 million.
Interest Expense (Income). Interest expense decreasedincreased by $0.1$0.2 million in the 39 weeks ended October 1, 2017first quarter of fiscal 2024 compared to the 39 weeks ended October 2, 2016.first quarter of fiscal 2023 as a result of generating interest income in the prior fiscal year that reflected higher interest earned on cash investments.
Income TaxesTax Benefit. The provision for income taxes was $9.1a benefit of $2.8 million and a benefit of $0.1 million for the 39 weeks ended October 1, 2017first quarter of fiscal 2024 and $6.9 million for the 39 weeks ended October 2, 2016. The increase was2023, respectively, primarily due to higherreflecting a pre-tax incomeloss in the first 39 weeks of fiscal 2017. Our effectivecurrent year and an increased tax rate was 39.4% for the 39 weeks ended October 1, 2017 and 43.0% for the 39 weeks ended October 2, 2016. The provision for income taxes for the 39 weeks ended October 2, 2016 reflected the write-off of deferred tax assetsbenefit related to share-basedstock compensation of $0.8 million.in the prior year.
- 22 -
Liquidity and Capital Resources
Our principal liquidity requirements are for working capital, capital expenditures and cash dividends. We fund our liquidity requirements primarily through cash on hand, cash flows from operations and borrowings from our revolving credit facility. We believe our cash on hand, future cash flows from operations and borrowings from our revolving credit facility will be sufficient to fund our cash requirements for at least the next 12 months.
As of October 1, 2017,March 31, 2024, we had $5.3$12.6 million of cash compared with $5.5to $27.5 million of cash and cash equivalents as of OctoberApril 2, 2016.2023. Our cash flows from operating, investing and financing activities are summarized as follows:
|
| 13 Weeks Ended |
| |||||
|
| March 31, |
|
| April 2, |
| ||
|
| (In thousands) |
| |||||
Total cash provided by (used in): |
|
|
|
|
|
| ||
Operating activities |
| $ | 8,213 |
|
| $ | 12,292 |
|
Investing activities |
|
| (1,810 | ) |
|
| (2,529 | ) |
Financing activities |
|
| (2,983 | ) |
|
| (7,869 | ) |
Net increase in cash and cash equivalents |
| $ | 3,420 |
|
| $ | 1,894 |
|
|
| 39 Weeks Ended |
| |||||
|
| October 1, 2017 |
|
| October 2, 2016 |
| ||
|
| (In thousands) |
| |||||
Net cash (used in) provided by: |
|
|
|
|
|
|
|
|
Operating activities |
| $ | (5,551 | ) |
| $ | 55,037 |
|
Investing activities |
|
| (11,374 | ) |
|
| (10,215 | ) |
Financing activities |
|
| 14,374 |
|
|
| (46,462 | ) |
Net decrease in cash |
| $ | (2,551 | ) |
| $ | (1,640 | ) |
- 23 -
Operating Activities. NetOperating cash used in operating activitiesflows for the 39 weeks ended October 1, 2017 was $5.6first quarter of fiscal 2024 and 2023 were a positive $8.2 million and neta positive $12.3 million, respectively. The decreased cash flow provided by operating activities for the 39 weeks ended October 2, 2016 was $55.0 million. The decrease in cash flow from operating activities for the 39 weeks ended October 1, 2017first quarter of fiscal 2024 compared to the same period lastprior year primarily reflects an increase in merchandise inventory for the first 39 weeks of fiscal 2017 compared withreflected lower net income, partially offset by a smaller decrease in the prior year, combined with the timing of payments for purchases of merchandise inventory resulting in a decrease in accounts payable balances during the first 39 weeks of fiscal 2017 compared with an increase in the prior year, as well as reductions in accrued expense primarilyexpenses mainly related to income taxes.company performance-based incentive awards.
Investing Activities. Net cash used in investing activities for the 39 weeks ended October 1, 2017first quarter of fiscal 2024 and October 2, 20162023 was $11.4$1.8 million and $10.2$2.5 million, respectively. Capital expenditures, excluding non-cash acquisitions, represented all of the cash used in investing activities for each period. Capital expenditures for both periods primarily reflect new store investments, store-related remodeling, distribution center investments and computer hardware and software purchases.
Financing Activities. NetFinancing cash provided by financing activitiesflows for the 39 weeks ended October 1, 2017 was $14.4first quarter of fiscal 2024 and 2023 were a negative $3.0 million and net cash used in financing activities for the 39 weeks ended October 2, 2016 was $46.5 million.a negative $7.9 million, respectively. For the 39 weeks ended October 1, 2017, net cash was provided primarily from increased borrowings under our revolving credit facility, partially offset by dividend payments and treasury stock purchases. For the 39 weeks ended October 2, 2016, netfirst quarter of both periods, cash was used primarily to fund debtdividend payments and make principal payments on finance lease liabilities. Dividend payments in the current year were lower than the prior year, which reflected a reduction of dividends and treasurydeclared from $0.25 per share of outstanding common stock purchases.in the first quarter of fiscal 2023 to $0.05 per share of outstanding common stock in the first quarter of fiscal 2024, respectively.
As of October 1, 2017,March 31, 2024 and April 2, 2023, we had no revolving credit borrowings, of $46.4and $2.0 million and $1.4 million, respectively, of letter of credit commitments of $0.5 million outstanding. These balances compare to revolving credit borrowings of $10.0 million and letter of credit commitments of $0.5 million outstanding as of January 1, 2017 and revolving credit borrowings of $22.9 million and letter of credit commitments of $0.5 million outstanding as of October 2, 2016. We have increased our purchases of merchandise inventory in fiscal 2017 compared with the prior year to support anticipated customer demand resulting from competitive closures in our markets. Such increased purchases resulted in increased borrowings under our revolving credit facility in the 39 weeks ended October 1, 2017.
In the first nine months of fiscal 20162023, we paid quarterly cash dividends of $0.125$0.25 per share of outstanding common stock, and in the fourth quarter of fiscal 20162023, we paid a quarterly cash dividend of $0.15$0.125 per share of outstanding common stock. In the first quarter of fiscal 2024, we paid a quarterly cash dividend of $0.05 per share of outstanding common stock, for an annual rate of $0.525 per share. Inand in the first nine months of fiscal 2017 we paid quarterly cash dividends of $0.15 per share of outstanding common stock, for an annual rate of $0.60 per share. In the fourthsecond quarter of fiscal 2017,2024, our Board of Directors declared a quarterly cash dividend of $0.15$0.05 per share of outstanding common stock, which will be paid on December 15, 2017June 14, 2024 to stockholders of record as of December 1, 2017.May 31, 2024.
Periodically, we repurchase our common stock in the open market pursuant to programs approved by our Board of Directors. We may repurchase our common stock for a variety of reasons, including, among other things, our alternative cash requirements, existing business conditions and the current market price of our stock. In the third quarter of fiscal 2016, our Board of Directors authorized a newOur current share repurchase program forauthorizes the purchase of up to $25.0 million of our common stock. ThisUnder this program, replaced the previous share repurchase program, under which $2.9 million remained available for repurchases. Under the current authorization, we may purchase shares from time to time in the open market or in privately negotiated transactions in compliance with the applicable
- 23 -
rules and regulations of the Securities and Exchange Commission (“SEC”).SEC. However, the timing and amount of such purchases, if any, would be at the discretion of our management and Board of Directors, and would depend on market conditions and other considerations. InWe did not repurchase any shares of our common stock in fiscal 2023 or the first nine monthsquarter of fiscal 2017, we repurchased 677,109 shares of common stock for $6.9 million. In the first nine months of fiscal 2016, we repurchased 126,899 shares of common stock for $1.6 million.2024. Since the inception of our initial share repurchase program in May 2006 through October 1, 2017,March 31, 2024, we have repurchased a total of 3,334,6154,186,014 shares for $40.6$53.6 million. As of October 1, 2017,
Loan Agreement. We are party to a total of $16.5 million remained available for share repurchases under our current share repurchase program.
Credit Agreement. On October 18, 2010, we entered into a creditLoan, Guaranty and Security agreement with Wells Fargo Bank National Associationof America, N.A. (“Wells Fargo”BofA”), as administrative agent and a syndicate of other lenders,lender, which was amended on November 22, 2021, October 31, 201119, 2022 and December 19, 2013May 16, 2023 (as so amended, the “Credit“Loan Agreement”). On September 29, 2017, the parties amended certain provisionsThe Loan Agreement has a maturity date of the Credit Agreement (such amendment, the “Third Amendment”), as further discussed below.
The Credit AgreementFebruary 24, 2026 and provides for a revolving credit facility (the “Credit Facility”) with an aggregate committed availability of up to $140.0 million, which amount may be increased at our option up to a maximum of $165.0$150.0 million. We may also request additional increases in aggregate availability, up to a maximum of $200.0 million, in which case the existing lenderslender under the CreditLoan Agreement will have the option to increase their commitmentscommitment to accommodate the requested increase. If such existing lenders dothe lender does not exercise that option, we may (with the consent of Wells Fargo,BofA in its role as the administrative agent, not to be unreasonably withheld) seek other lenders willing to provide such commitments. The Third AmendmentThe credit facility includes a provision which permits us to elect to reduce the aggregate committed availability under the Credit Agreement to $100.0 million for a three-month period each calendar year. Prior to the Third Amendment, the Credit Facility included a $50.0 million sublimit for issuances of letters of credit. The Third Amendment reduced the letter of credit sublimit to $25.0 million. The Credit Facility includes a $20.0 million sublimit for swingline loans. The Third Amendment extended the maturity date of the Credit Agreement from December 19, 2018 to September 29, 2022. Total remaining borrowing availability under the Credit Agreement, after subtracting letters of credit, was $93.1 million and $129.5 million as of October 1, 2017 and January 1, 2017, respectively.
We may borrow under the Credit FacilityLoan Agreement from time to time, provided the amounts outstanding will not exceed the lesser of the then aggregate committed availability (as discussed above) and the Borrowing Base (such lesser amount being referred to as the “Loan“Line Cap”). TheAs defined in the Loan Agreement, the “Borrowing Base” generally is comprised of the sum, at the time of calculation, of (a) 90.00% of our eligible credit card receivables; plus (b) the cost of our eligible inventory (other than our eligible in-transit inventory), net of inventory reserves, multiplied by 90.00% of the appraised net orderly liquidation value of eligible inventory (expressed as a percentage of the cost of eligible inventory); plus (c) the lesser of (i) the cost of our eligible in-transit inventory, net of inventory reserves, multiplied by 90.00% of the appraised net orderly liquidation value of our eligible in-transit inventory (expressed as a percentage of the cost of eligible in-transit inventory), or (ii) $10.0 million, minus (d) certain agreed-upon reserves as well as other reserves established by Wells FargoBofA in its role as the Administrative Agentadministrative agent in its reasonable discretion.
- 24 -
Generally, we may designate specific borrowings under the Credit FacilityLoan Agreement as either base rate loans or LIBOTerm SOFR rate loans. The applicable interest rate on our borrowings is a function of the daily average, over the preceding fiscal quarter, of the excess of the LoanLine Cap over amounts borrowed (such amount being referred to as the “Average Daily Availability”). Prior to the Third Amendment, those loans designated as LIBO rate loans bore interest at a rate equal to the then applicable LIBO rate plus an applicable margin as shown in the table below. Those loans designated as baseTerm SOFR rate loans bore interest at a rate equal to the applicable margin for base rate loans (as shown below) plus the highest of (a) the Federal funds rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the LIBO rate, as adjusted to account for statutory reserves, plus one percent (1.00%), or (c) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate.” Prior to the Third Amendment, the applicable margin for all loans under the existing Credit Agreement was as set forth below as a function of Average Daily Availability for the preceding fiscal quarter.
Level |
| Average Daily Availability |
| LIBO Rate Applicable Margin |
|
| Base Rate Applicable Margin |
| ||
I |
| Greater than or equal to $100,000,000 |
|
| 1.25% |
|
|
| 0.25% |
|
II |
| Less than $100,000,000 but greater than or equal to $40,000,000 |
|
| 1.50% |
|
|
| 0.50% |
|
III |
| Less than $40,000,000 |
|
| 1.75% |
|
|
| 0.75% |
|
Prior to the Third Amendment, the commitment fee assessed on the unused portion of the Credit Facility was 0.25% per annum.
- 24 -
After giving effect to the Third Amendment, those loans designated as LIBO rate loans will bear interest at a rate equal to the then applicable adjusted LIBOsecured overnight financing rate as administered by the Federal Reserve Bank of New York (“SOFR”) rate plus a 0.10% “SOFR adjustment” spread, plus an applicable margin as shown in the table below. Those loans designated as base rate loans bear interest at a rate equal to the applicable margin for base rate loans (as shown below) plus the highest of (a) the Federal funds rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the LIBOone-month SOFR rate, plus one percentage point (1.00%), or (c) the rate of interest in effect for such day as announced from time to time within Wells FargoBofA as its “prime rate.” The applicable margin for all loans will be a function of Average Daily Availability for the preceding fiscal quarter as set forth below.
Level |
| Average Daily Availability |
| LIBO Rate Applicable Margin |
|
| Base Rate Applicable Margin |
| ||
I |
| Greater than or equal to $70,000,000 |
|
| 1.25% |
|
|
| 0.25% |
|
II |
| Less than $70,000,000 |
|
| 1.375% |
|
|
| 0.50% |
|
After giving effect toin the Third Amendment, thefollowing table.
Level |
| Average Daily Availability |
| SOFR Rate |
| Base Rate |
I |
| Greater than or equal to $70,000,000 |
| 1.375% |
| 0.375% |
II |
| Less than $70,000,000 |
| 1.500% |
| 0.500% |
The commitment fee assessed on the unused portion of the Credit Facilitycredit facility is 0.20% per annum.
Obligations under the Credit FacilityLoan Agreement are secured by a general lien on and perfected security interest in substantially all of our assets. Our CreditThe Loan Agreement contains covenants that require us to maintain a fixed charge coverage ratio of not less than 1.0:1.0 in certain circumstances, and limit ourlimits the ability to, among other things, incur liens, incur additional indebtedness, transfer or dispose of assets, change the nature of the business, guarantee obligations, pay dividends or make other distributions or repurchase stock, and make advances, loans or investments. We may generally declare or pay cash dividends or repurchase stock only if, among other things, no default or event of default then exists or would arise from such dividend or repurchase of stock and, after giving effect to such dividend or repurchase, certain availability and/or fixed charge coverage ratio requirements are satisfied.satisfied, although we are permitted to make up to $5.0 million of dividend payments or stock repurchases per year without satisfaction of the availability or fixed charge coverage ratio requirements, but dividends or stock repurchases made without satisfying the availability and/or fixed charge coverage ratio requirements will require the establishment of an additional reserve that will reduce borrowing availability under the Loan Agreement for 75 days. The CreditLoan Agreement contains customary events of default, including, without limitation, failure to pay when due principal amounts with respect to the Credit Facility,credit facility, failure to pay any interest or other amounts under the Credit Facility for five days after becoming due,credit facility, failure to comply with certain agreements or covenants contained in the CreditLoan Agreement, failure to satisfy certain judgments against us, failure to pay when due (or any other default which does or may lead topermits the acceleration of) certain other material indebtedness in principal amount in excess of $5.0 million, and certain insolvency and bankruptcy events.
Future Capital Requirements. We had cash on hand of $5.3$12.6 million as of October 1, 2017.March 31, 2024. We expect capital expenditures for fiscal 2017,2024, excluding non-cash acquisitions, to range from approximately $16.0$13.0 million to $20.0$18.0 million primarily to fund store-related remodeling, the opening of new stores, store-related remodeling, distribution center investments and computer hardware and software purchases, including amounts related to the development of a new point-of-sale system. As more fully described in Note 10 to the Interim Financial Statements included in Part 1, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, we may also acquire for $4.5 million a parcel of land that we currently lease. This parcel of land with an existing building is adjacent to our corporate headquarters location and includes a parking lot currently used by us.purchases. For fiscal 2017,2024, we anticipate opening sixapproximately five new stores and closing threeapproximately ten stores.
We currently pay quarterly dividends, subject to declaration byDividends are paid at the discretion of our Board of Directors. In the fourthfirst quarter of fiscal 2017,2024, we paid a quarterly cash dividend of $0.05 per share of outstanding common stock, and in the second quarter of fiscal 2024, our Board of Directors declared a quarterly cash dividend of $0.15$0.05 per share of outstanding common stock, which will be paid on December 15, 2017June 14, 2024 to stockholders of record as of December 1, 2017.May 31, 2024.
In the third quarterAs of fiscal 2016,March 31, 2024, a total of $20.9 million remained available for share repurchases under our Board of Directors authorized a new share repurchase program of up to $25.0 millionprogram. We did not repurchase any shares of our common stock which replacedin the previous share repurchase program.first quarter of fiscal 2024. We consider several factors in determining when and if we make share repurchases including, among other things, our alternative cash requirements, existing business conditions and the market price of our stock. As of October 1, 2017, a total of $16.5 million remained available under the current share repurchase program.
We believe we will be able to fund our cash requirements from cash on hand,and cash equivalents, operating cash flows and borrowings from our revolving credit facility, for at least the next 12 months. However, our ability to satisfy our cash requirements depends upon our future performance, which in turn is subject to general economic conditions and regional risks, as well as financial, competitive, business and other factors affecting our operations, including factors beyond our control.
Off-Balance Sheet Arrangements and - 25 -
Contractual Obligations. Our material off-balance sheet arrangements arecontractual obligations include operating lease obligations. We excluded these items fromcommitments associated with our leased properties and other occupancy expense, finance lease obligations, borrowings under the balance sheet in accordance with accounting principles generally accepted in the United States of America.
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credit facility, if any, and other liabilities. Operating lease commitments consist principally of leases for our retail store facilities, distribution center and corporate office.offices. These leases frequently include options which permit us to extend the terms beyond the initial fixed lease term. Weterm, and we intend to renegotiate most of these leases as they expire. Operating lease commitments also consist of ITinformation technology (“IT”) systems hardware, and distribution center delivery tractors.tractors and equipment. Additional information regarding our operating and finance leases is available in Notes 2 and 6 to the Interim Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.
Our material contractual obligations include operating lease commitments associated with our leased propertiesIn the first quarter of fiscal 2024 and other occupancy expense, capital lease obligations,2023, we had zero borrowings under our Credit Facility and other liabilities.
Issued and outstanding letters of credit were $0.5 million as of October 1, 2017, and were related to securing insurance program liabilities.
Included in the Liquidity and Capital Resources section of Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 1, 2017, is a discussion of our future obligations and commitments as of January 1, 2017. In the first nine months of fiscal 2017, our revolving credit borrowings increased by $36.4 million from the end of fiscal 2016. We entered into new operating lease agreements in relation to our business operations during the first nine months of fiscal 2017. We do not believe that these operating leases or the changes to our revolving credit borrowings materially impact our contractual obligations or commitments presented as of January 1, 2017.facility.
In the ordinary course of business, we enter into arrangements with vendors to purchase merchandise in advance of expected delivery. Because most of these purchase orders do not contain any termination payments or other penalties if cancelled, they are not included as outstanding contractual obligations.
Critical Accounting Estimates
As discussed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 1, 2017,December 31, 2023, we consider our estimates on valuation of merchandise inventory and valuation of long-lived assets and self-insurance liabilities to be among the most critical in understanding the judgments that are involved in preparing our consolidated financial statements. There have been no significant changes to these estimates in the 3913 weeks ended October 1, 2017.March 31, 2024.
Seasonality and Impact of Inflation
We experience seasonal fluctuations in our net sales and operating results.results, which can suffer when weather does not conform to seasonal norms. Seasonality in our net sales influences our buying patterns which directly impacts our merchandise and accounts payable levels and cash flows. We purchase merchandise for seasonal activities in advance of a season and supplement our merchandise assortment as necessary and when possible during the season. Our efforts to replenish products during a season are not always successful. In the fourth fiscal quarter, which includes the holiday selling season and the start of the winter selling season, we normally experience higher inventory purchase volumes and increased expense for staffing and advertising. If we miscalculate the consumer demand for our products generally or for our product mix in advance of a season, particularly the fourth quarter, our net sales can decline, which can harm our financial performance. A significant shortfall from expected net sales, particularly during the fourth quarter, can negatively impact our annual operating results.
In fiscal 2016, and during the first nine monthsThroughout most of fiscal 2017,2023, we experienced greater inflation in the impactcost of inflation was minimal. We have evolved our product mix to include more branded merchandiseproducts that we believe gives us added flexibilitypurchase for resale than in previous years, although product cost inflation moderated later in the year and into fiscal 2024. While our merchandise inventory costs have been impacted by inflationary pressures, we have generally been able to adjust our selling prices forin response to these higher product purchase cost increases. Ifcosts. However, if we are unable to adjust our selling prices for product purchase cost increases that might occur in the future, then our merchandise margins willcould decline, which willwould adversely impact our operating results. We do not believe that inflation hadIn fiscal 2023 and the first quarter of fiscal 2024, we also experienced increased wage rate pressure as a materialresult of competition for labor in certain markets and we expect these dynamics to continue throughout fiscal 2024. Broad-based inflationary pressures adversely impacted many categories of costs and expenses during fiscal 2023 and the first quarter of fiscal 2024. This impact on our operating results foris expected to continue during the reporting periods.remainder of fiscal 2024.
Recently Issued Accounting Updates
See Note 2 to the Interim Financial Statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.
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Forward-Looking Statements
This document includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, our financial condition, our results of operations, our growth strategy and the business of our company generally. In some cases, you can identify such statements by terminology such as “may,” “could,” “project,” “estimate,” “potential,” “continue,” “should,” “expects,” “plans,” “anticipates,” “believes,” “intends” or other such terminology. These forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause our actual results in current or future periods to change significantly and differ materially from forecasted results. These forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause our actual results in current or future periods to change significantly and differ materially from forecasted results. These risks and uncertainties include, among other things, worseningthe impacts of COVID-19 on our business operations, global supply chain disruptions resulting from the ongoing conflicts in Ukraine and the Middle East, changes in the consumer spending environment, fluctuations in consumer holiday spending patterns, increased competition from e-commerce retailers, breach of data security or other unauthorized disclosure of sensitive personal or confidential information, the competitive environment in the sporting goods industry in general and in our specific market areas, inflation, product availability and growth opportunities, changes in the current market for (or regulation of) firearm-related products, a reduction or loss of product from a key supplier, disruption in product flow, seasonal fluctuations, weather conditions, changes in cost of goods, operating expense fluctuations, increases in labor and benefit-related expense, changes in laws or regulations, including those related to tariffs and duties lower-than-expectedas well as environmental, social and governance issues, public health issues (including those caused by COVID-19 or any potential variants), impacts from civil unrest or widespread vandalism, lower than expected profitability of our e-commerce platform or cannibalization of sales from our existing store base which could occur as a result of operating ourthe e-commerce platform, litigation risks, stockholder campaigns and proxy contests, disruption in product flow,risks related to our historically leveraged financial condition, changes in interest rates, credit availability, higher expense associated with sources of credit resulting from uncertainty in financial markets and economic conditions in general. Those and other risks and uncertainties are more fully described in Part II, Item 1A, Risk Factors, in this report and in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K and other filings with the SEC. We caution that the risk factors set forth in this report and the other reports that we file with the SEC are not exclusive. In addition, we conduct our business in a highly competitive and rapidly changing environment. Accordingly, new risk factors may arise. 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 factors, may cause results to differ materially from those contained in any forward-looking statement. We undertake no obligation to revise or update any forward-looking statement that may be made from time to time by us or on our behalf.
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Item 3. Quantitative and QualitativeQualitative Disclosures About Market Risk
We are subject to risks resulting from interest rate fluctuations since interest on borrowings under our Credit Facility is based on variable rates. We enter into borrowings under our Credit Facility principally for working capital, capital expenditures and general corporate purposes. We routinely evaluate the best use of our cash on hand and manage financial statement exposure to interest rate fluctuations by managing our level of indebtedness and the interest base rate options on such indebtedness. We do not utilize derivative instruments and do not engage in foreign currency transactions or hedging activities to manage our interest rate risk. If the interest rate on our debt was to change 1.0% as compared to the rate as of October 1, 2017, our interest expense would change approximately $0.5 million on an annual basis based on the outstanding balance of borrowings under our Credit Facility as of October 1, 2017.
Inflationary factors and changes in foreign currency rates can increase the purchase cost of our products. We have evolved our product mix to include more branded merchandise, which we believe gives us added flexibility to adjust selling prices for purchase cost increases. IfBecause we are unablea smaller reporting company as defined by Rule 12b-2 of the Exchange Act, we are not required to adjust our selling prices for purchase cost increases that might occur then our merchandise margins will decline, which will adversely impact our operating results. All of our stores are located inprovide the United States, and all imported merchandise is purchased in U.S. dollars. We do not believe that inflation had a material impact on our operating results for the reporting periods.information under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have concluded that, as of the end of such period, our disclosure controls and procedures are effective, at a reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
During the fiscal quarter ended October 1, 2017,March 31, 2024, no changes occurred with respect to our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
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PART II. OTHEROTHER INFORMATION
On March 13, 2023, a complaint was filed in the Superior Court of the State of California, County of Santa Clara, entitled Zareyah Thompson v. Big 5 Corp., et. al., Case No. 23CV412334 (“Thompson Complaint”). The Thompson Complaint was brought as a purported California Private Attorneys General Act (“PAGA”) action on behalf of “current and former employees who worked for the Company or its operating subsidiary in California as a non-exempt, hourly paid employee and received at least one wage statement.” The Thompson Complaint alleges, among other things, that Big 5 failed to (i) provide minimum wages, (ii) provide compliant meal or rest periods, (iii) maintain and provide accurate itemized wage statements, (iv) properly compensate for all time worked, including overtime, premium, vacation and final wages, (v) properly maintain payroll records, and (vi) provide suitable seating. On March 21, 2023, a second complaint was filed in the Superior Court of the State of California, County of Santa Clara, entitled Christopher Puga v. Big 5 Corp., et. al., Case No. 23CV412953 (“Puga Complaint”). The Puga Complaint was brought as a purported PAGA action on behalf of “all current and former non-exempt employees that worked either directly or via a staffing agency for the Company or its operating subsidiary at any location in California” (“Putative Covered Employees”). The Puga Complaint alleges, among other things, that Big 5 (i) unlawfully required Putative Covered Employees to agree to unlawful criminal background checks, (ii) conducted unlawful financial and criminal background checks, and did not (iii) provide minimum wages, (iv) provide accurate itemized wage statements, (v) maintain accurate records pertaining to the Putative Covered Employees’ employment, (vi) produce or make available Putative Covered Employees’ personnel records and/or payroll records, (vii) provide compliant meal or rest periods, (viii) properly compensate for all time worked, including overtime, premium, vacation, and final wages, (ix) reimburse necessary business expenses; (x) provide suitable seating; (xi) provide sick leave pay to Putative Covered Employees, (xii) accurately calculate sick leave accrual and rate of pay, (xiii) put the Putative Covered Employees on notice of their paid sick leave rights, and (xiv) provide supplemental paid sick leave. The Thompson and Puga complaints have many overlapping causes of action. Accordingly, on or about April 12, 2023, a notice of related cases was filed with the Court regarding the Thompson Complaint and Puga Complaint. The Court subsequently conducted a case management conference on June 29, 2023 for both complaints, and jointly coordinated the complaints. The Company’s counsel held a mediation with opposing counsel on September 27, 2023. The Company has reached a tentative settlement in both cases and established a cumulative indemnity reserve of $1.5 million. Any settlement finalized will be subject to Court approval.
The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s results of operations or financial condition.
There have been no material changes to the risk factors identified in Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2017.December 31, 2023.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following tabular summary reflects the Company’s share repurchase activity during the quarter ended October 1, 2017:March 31, 2024:
ISSUER PURCHASES OF EQUITY SECURITIES |
| |||||||||||||||
Period |
| Total Number |
|
| Average |
|
| Total Number of |
|
| Maximum Number (or |
| ||||
January 1 – January 28 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | 20,864,000 |
|
January 29 – February 25 |
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | 20,864,000 |
|
February 26 – March 31 |
|
| 86,005 |
|
| $ | — |
|
|
| — |
|
| $ | 20,864,000 |
|
Total |
|
| 86,005 |
|
|
|
|
|
| — |
|
| $ | 20,864,000 |
|
ISSUER PURCHASES OF EQUITY SECURITIES
Period |
| Total Number of Shares Purchased |
|
| Average Price Paid per Share |
|
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2) |
|
| Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)(2)(3) |
| ||||
July 3 – July 30 |
|
| 343,847 |
|
| $ | 11.54 |
|
|
| 343,847 |
|
| $ | 19,324,000 |
|
July 31 – August 27 |
|
| 201,700 |
|
| $ | 9.29 |
|
|
| 201,700 |
|
| $ | 17,449,000 |
|
August 28 – October 1 |
|
| 121,062 |
|
| $ | 7.65 |
|
|
| 121,062 |
|
| $ | 16,523,000 |
|
Total |
|
| 666,609 |
|
|
|
|
|
|
| 666,609 |
|
| $ | 16,523,000 |
|
|
|
|
|
|
|
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. OtherOther Information
During the thirdfiscal quarter ended March 31, 2024, none of fiscal 2017, the Company commenced negotiations on new collective bargaining agreements with General Teamsters, Aerospace and Allied Employees, Warehousemen, Drivers, Construction, Rock and Sand; Airline Employees, Local Union No. 986, affiliated with the International Brotherhood of Teamsters (“Local 986”), representing certain hourly employees in the Company’s distribution center and select stores. The current collective bargaining agreements expired on August 31, 2017. Pending negotiations,directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company has agreed with Local 986securities that was intended to extendsatisfy the existing agreements, subject to termination by either party on ten (10) days’ written notice. The Company has not had a strikeaffirmative defense conditions of Rule 10b5-1(c) or work stoppage in over 30 years, although such a disruption could have a significant negative impact on our business operations and financial results.any “non-Rule 10b5-1 trading arrangement.”
Exhibit Number |
|
|
| Description of Document | |
| ||
| Independent Auditors’ Awareness Letter Regarding Interim Financial Statements. | |
31.1 | Rule 13a-14(a) Certification of Chief Executive Officer. | |
31.2 | Rule 13a-14(a) Certification of Chief Financial Officer. | |
32.1 | Section 1350 Certification of Chief Executive Officer. | |
32.2 | Section 1350 Certification of Chief Financial Officer. | |
101.INS | Inline XBRL Instance | |
101.SCH | Inline XBRL Taxonomy Extension Schema | |
| Cover Page Interactive Data File (embedded within the Inline XBRL | |
|
| |
|
| |
|
|
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|
|
|
|
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BIG 5 SPORTING GOODS CORPORATION, | ||
a Delaware corporation | ||
Date: | By: | /s/ Steven G. Miller |
Steven G. Miller | ||
Chairman of the Board of Directors, President and Chief Executive Officer | ||
Date: | By: | /s/ Barry D. Emerson |
Barry D. Emerson | ||
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
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