Exhibit 99.1
DICK'S Sporting Goods Reports Third Quarter Results; Exceeds Expectations
| |
| • | Consolidated earnings per diluted share totaled $0.40 and consolidated same store sales increased 3.3% (adjusted for the shifted calendar), in both cases exceeding prior guidance |
| |
| • | Company narrows full year non-GAAP guidance range to $2.62 to 2.65 per diluted share |
| |
| • | Capital allocation strategy on track, with additional share repurchases totaling approximately $25.0 million and declaration of $0.125 per share quarterly dividend |
PITTSBURGH, November 19, 2013 - DICK'S Sporting Goods, Inc. (NYSE: DKS), the largest U.S. based full-line sporting goods retailer, today reported sales and earnings results for the third quarter ended November 2, 2013.
Third Quarter Results
The Company reported consolidated net income for the third quarter ended November 2, 2013 of $50.0 million, or $0.40 per diluted share, compared to the Company's expectations provided on August 20, 2013 of $0.37 to 0.39 per diluted share. For the third quarter ended October 27, 2012, the Company reported consolidated net income of $50.1 million, or $0.40 per diluted share.
Net sales for the third quarter of 2013 increased 6.7% to $1.4 billion. Adjusted for the shifted calendar, due to the 53rd week in 2012, consolidated same store sales increased 3.3%, compared to the Company's guidance of approximately flat to an increase of 1%. Third quarter 2012 consolidated same store sales increased 5.1%. Shifted same store sales in the third quarter of 2013 for DICK'S Sporting Goods increased 3.4% while Golf Galaxy increased 2.2%.
Unshifted consolidated same store sales for the third quarter increased 0.3%, compared to the Company's guidance of an approximate 2 to 3% decrease. Unshifted same store sales in the third quarter of 2013 for DICK'S Sporting Goods increased 0.6% while Golf Galaxy decreased 4.7%. eCommerce penetration for the quarter was 6.5% of total sales.
"Despite the continued challenging consumer environment, we delivered better than expected results in the third quarter, exceeding both our sales and earnings expectations. The marketing efforts, improved customer experience and selective pricing initiatives we began in the third quarter were successful in driving traffic and sales, but at slightly lower than anticipated margins," said Edward W. Stack, Chairman and CEO. "We remain excited about the long-term opportunities in our business that we presented at our analyst day in September, and we will continue to drive towards those goals."
Store Development
In the third quarter, the Company opened 25 new DICK'S Sporting Goods stores, one new Golf Galaxy store and two new Field & Stream stores. The Company also relocated one DICK'S Sporting Goods store, repositioned one Golf Galaxy store and completed three full and 22 apparel remodels of DICK'S Sporting Goods stores. As of November 2, 2013, the Company operated 552 DICK'S Sporting Goods stores in 45 states, with approximately 29.9 million square feet and 82 Golf Galaxy stores in 30 states, with approximately 1.4 million square feet.
Store count, square footage and new stores are listed in a table later in the release under the heading "Store Count and Square Footage."
In the beginning of the fourth quarter, the Company opened six new DICK'S Sporting Goods stores and remodeled one DICK'S Sporting Goods store. The Company also opened one new True Runner store.
The Company has now completed its 2013 store development program, opening a total of 40 new DICK'S Sporting Goods stores, one new Golf Galaxy store, two new Field & Stream stores and one new True Runner store. The Company also relocated one DICK'S Sporting Goods store, repositioned one Golf Galaxy store and completed four full and 75 apparel remodels of DICK'S Sporting Goods stores in 2013.
Balance Sheet
The Company ended the third quarter of 2013 with approximately $66 million in cash and cash equivalents as compared to $294 million at the end of the third quarter of 2012. Due to seasonality and capital utilization over the last 12 months, which included investments in omni-channel growth, store remodels, share repurchases, and special and quarterly dividends, the Company ended the quarter with approximately $116 million in outstanding borrowings under its $500 million line of credit. The Company expects to end fiscal 2013 with no outstanding borrowings under the revolving credit facility.
Inventory per square foot was 5.6% higher at the end of the third quarter of 2013 as compared to the end of the third quarter of 2012.
Year-to-Date Results
The Company reported consolidated non-GAAP net income for the 39 weeks ended November 2, 2013 of $199.3 million, or $1.59 per diluted share. For the 39 weeks ended October 27, 2012, the Company reported consolidated non-GAAP net income of $188.6 million, or $1.50 per diluted share.
On a GAAP basis, the Company reported consolidated net income for the 39 weeks ended November 2, 2013 of $199.0 million, or $1.58 per diluted share. For the 39 weeks ended October 27, 2012, on a GAAP basis, the Company reported consolidated net income of $161.0 million, or $1.28 per diluted share. The GAAP to non-GAAP reconciliations are included in a table later in the release under the heading "Non-GAAP Net Income and Earnings Per Share Reconciliations."
Net sales for the 39 weeks ended November 2, 2013 increased 5.8% from last year's period to $4.3 billion primarily due to the opening of new stores. Unshifted consolidated same store sales were flat year-to-date.
Dividend
On November 14, 2013, the Company's Board of Directors authorized and declared a quarterly dividend in the amount of $0.125 per share on the Company's Common Stock and Class B Common Stock. The dividend is payable in cash on December 27, 2013 to stockholders of record at the close of business on December 6, 2013.
Share Repurchase Program
In the third quarter of 2013, the Company repurchased approximately 0.5 million shares of its common stock at an average cost of $52.09 per share, for a total cost of $25.0 million.
Current 2013 Outlook
The Company's current outlook for 2013 is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as described later in this release. Although the Company believes that the expectations and other comments reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations or comments will prove to be correct.
| |
• | Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated earnings per diluted share of approximately $1.04 to 1.07 in the fourth quarter |
of 2013, compared to fourth quarter 2012 consolidated earnings per diluted share of $1.03. The 14th week in fiscal 2012 contributed approximately $0.03 to earnings per diluted share.
| |
• | Consolidated same store sales adjusted for the shifted calendar, due to the 53rd week in 2012, are currently expected to increase 3 to 4% in the fourth quarter of 2013, or increase 2 to 3% on an unshifted basis, as compared to a 1.2% increase in the fourth quarter of 2012. |
| |
| v | Full Year 2013 – (52 Week Year) Comparisons to Fiscal 2012 – (53 Week Year) |
| |
| • | Based on an estimated 126 million diluted shares outstanding, the Company currently anticipates reporting consolidated non-GAAP earnings per diluted share of approximately $2.62 to 2.65, excluding an asset impairment charge and the partial recovery of a previously impaired asset. For the 53 weeks ended February 2, 2013, the Company reported consolidated non-GAAP earnings per diluted share of $2.53, excluding an impairment charge. The 53rd week in fiscal 2012 contributed approximately $0.03 to earnings per diluted share. |
| |
| • | Consolidated same store sales are currently expected to be approximately flat to an increase of 1% on a 52-week to 52-week comparative basis, compared to a 4.3% increase in fiscal 2012. |
| |
| • | In 2013, the Company anticipates capital expenditures to be approximately $299 million on a gross basis and approximately $258 million on a net basis. |
Conference Call Info
The Company will host a conference call today at 10:00 a.m. Eastern Time to discuss the third quarter results. Investors will have the opportunity to listen to the earnings conference call over the internet through the Company's website located at http://www.DicksSportingGoods.com/Investors. To listen to the live call, please go to the website at least fifteen minutes early to register and download and install any necessary audio software.
In addition to the webcast, the call can be accessed by dialing (866) 652-5200 (domestic callers) or (412) 317-6060 (international callers) and requesting the "DICK'S Sporting Goods Earnings Call."
For those who cannot listen to the live webcast, it will be archived on the Company's website for approximately 30 days. In addition, a dial-in replay of the call will be available. To listen to the replay, investors should dial (877) 344-7529 (domestic callers) or (412) 317-0088 (international callers) and enter confirmation code 10035658. The dial-in replay will be available for approximately 30 days following the live call.
Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties
Except for historical information contained herein, the statements in this release or otherwise made by our management in connection with the subject matter of this release are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond our control. Our future performance and financial results may differ materially from those included in any such forward-looking statements and such forward-looking statements should not be relied upon by investors as a prediction of actual results. You can identify these statements as those that may predict, forecast, indicate or imply future results, performance or advancements and by forward-looking words such as "believe", "anticipate", "expect", "estimate", "predict", "intend", "plan", "project", "goal", "will", "will be", "will continue", "will result", "could", "may", "might" or other words with similar meanings. Forward-looking statements include statements regarding, among other things, our expectations for future performance, long-term opportunities, the Company’s future goals, the amounts outstanding under the Company’s credit facility in future periods and expectations on capital expenditures.
The following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results, and could cause actual results for fiscal 2013 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this release or otherwise made by our management: ongoing economic and financial uncertainties may cause a decline in consumer spending; changes in the general economic
and business conditions and in the specialty retail or sporting goods industry in particular; competition in the sporting goods industry; changes in consumer demand; limitations on the availability of attractive store locations; unauthorized disclosure of sensitive or confidential customer information; risks relating to our private brand offerings; access to adequate capital; changing laws and regulations affecting our business including the regulation of firearms and ammunition; factors affecting our vendors; litigation risks; foreign trade issues and currency exchange rate fluctuations; the loss of our key executives, especially Edward W. Stack, our Chairman and Chief Executive Officer; protection of our intellectual property; disruptions with our eCommerce services provider or of our information systems; disruption at our distribution facilities; developments with sports leagues, professional athletes or sports superstars; weather and seasonality of our business; regional risks; risks associated with strategic investments or acquisitions; labor needs; risks associated with being a controlled company; our anti-takeover provisions; our current intention to issue quarterly cash dividends; and our share repurchase activity, if any.
Known and unknown risks and uncertainties are more fully described in the Company's Annual Report on Form 10-K for the year ended February 2, 2013 as filed with the Securities and Exchange Commission ("SEC") on March 22, 2013 and in other reports filed with the SEC. In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict or assess the impact of all such risk factors. Forward-looking statements included in this release are made as of the date of this release. We do not assume any obligation and do not intend to update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by the securities laws.
About DICK'S Sporting Goods, Inc.
DICK'S Sporting Goods, Inc. is an authentic full-line sports and fitness specialty omni-channel retailer offering a broad assortment of high quality, competitively-priced brand name sporting goods equipment, apparel and footwear in a specialty store environment. The Company also owns and operates Golf Galaxy, LLC, a golf specialty retailer.
As of November 19, 2013, the Company operated 558 DICK'S Sporting Goods stores in 46 states, 82 Golf Galaxy stores in 30 states and eCommerce websites and catalog operations for DICK'S Sporting Goods and Golf Galaxy. DICK'S Sporting Goods, Inc. news releases are available at http://www.DicksSportingGoods.com/Investors. The Company's website is not part of this release.
Contact:
Anne-Marie Megela, VP – Treasury Services and Investor Relations or
Scott W. McKinney, Director of Investor Relations
DICK'S Sporting Goods, Inc.
investors@dcsg.com
(724) 273-3400
###
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
|
| | | | | | | | | | | | | | |
| | | 13 Weeks Ended |
| | | November 2,
2013 | | % of Sales | | October 27,
2012 | | % of Sales (1) |
| | | | | | | | | |
| Net sales | | $ | 1,400,623 |
| | 100.00 | % | | $ | 1,312,072 |
| | 100.00 | % |
| Cost of goods sold, including occupancy and distribution costs | | 975,724 |
| | 69.66 |
| | 905,948 |
| | 69.05 |
|
| | | | | | | | | |
| GROSS PROFIT | | 424,899 |
| | 30.34 |
| | 406,124 |
| | 30.95 |
|
| | | | | | | | | |
| Selling, general and administrative expenses | | 333,724 |
| | 23.83 |
| | 314,637 |
| | 23.98 |
|
| Pre-opening expenses | | 12,122 |
| | 0.87 |
| | 9,294 |
| | 0.71 |
|
| | | | | | | | | |
| INCOME FROM OPERATIONS | | 79,053 |
| | 5.64 |
| | 82,193 |
| | 6.26 |
|
| | | | | | | | | |
| Interest expense | | 696 |
| | 0.05 |
| | 860 |
| | 0.07 |
|
| Other income | | (2,735 | ) | | (0.20 | ) | | (1,113 | ) | | (0.08 | ) |
| | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | 81,092 |
| | 5.79 |
| | 82,446 |
| | 6.28 |
|
| | | | | | | | | |
| Provision for income taxes | | 31,115 |
| | 2.22 |
| | 32,307 |
| | 2.46 |
|
| | | | | | | | | |
| NET INCOME | | $ | 49,977 |
| | 3.57 | % | | $ | 50,139 |
| | 3.82 | % |
| | | | | | | | | |
| EARNINGS PER COMMON SHARE: | | |
| | |
| | |
| | |
|
| Basic | | $ | 0.41 |
| | | | $ | 0.41 |
| | |
|
| Diluted | | $ | 0.40 |
| | | | $ | 0.40 |
| | |
|
| | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | |
| | | | |
| | |
|
| Basic | | 123,221 |
| | | | 122,103 |
| | |
|
| Diluted | | 125,842 |
| | | | 125,938 |
| | |
|
| | | | | | | | | |
| Cash dividend declared per share | | $ | 0.125 |
| | | | $ | 0.125 |
| | |
|
| | | | | | | | | |
(1) Column does not add due to rounding |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share data)
|
| | | | | | | | | | | | | | |
| | | 39 Weeks Ended |
| | | November 2,
2013 | | % of Sales (1) | | October 27,
2012 | | % of Sales |
| | | | | | | | | |
| Net sales | | $ | 4,265,755 |
| | 100.00 | % | | $ | 4,030,818 |
| | 100.00 | % |
| Cost of goods sold, including occupancy and distribution costs | | 2,949,872 |
| | 69.15 |
| | 2,782,306 |
| | 69.03 |
|
| | | | | | | | | |
| GROSS PROFIT | | 1,315,883 |
| | 30.85 |
| | 1,248,512 |
| | 30.97 |
|
| | | | | | | | | |
| Selling, general and administrative expenses | | 983,382 |
| | 23.05 |
| | 921,631 |
| | 22.86 |
|
| Pre-opening expenses | | 18,736 |
| | 0.44 |
| | 14,311 |
| | 0.36 |
|
| | | | | | | | | |
| INCOME FROM OPERATIONS | | 313,765 |
| | 7.36 |
| | 312,570 |
| | 7.75 |
|
| | | | | | | | | |
| Impairment of available-for-sale investments | | — |
| | — |
| | 32,370 |
| | 0.80 |
|
| Interest expense | | 2,081 |
| | 0.05 |
| | 5,309 |
| | 0.13 |
|
| Other income | | (10,675 | ) | | (0.25 | ) | | (2,923 | ) | | (0.07 | ) |
| | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | 322,359 |
| | 7.56 |
| | 277,814 |
| | 6.89 |
|
| | | | | | | | | |
| Provision for income taxes | | 123,398 |
| | 2.89 |
| | 116,855 |
| | 2.90 |
|
| | | | | | | | | |
| NET INCOME | | $ | 198,961 |
| | 4.66 | % | | $ | 160,959 |
| | 3.99 | % |
| | | | | | | | | |
| EARNINGS PER COMMON SHARE: | | |
| | |
| | |
| | |
|
| Basic | | $ | 1.62 |
| | | | $ | 1.33 |
| | |
|
| Diluted | | $ | 1.58 |
| | | | $ | 1.28 |
| | |
|
| | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | |
| | | | |
| | |
|
| Basic | | 122,942 |
| | | | 121,181 |
| | |
|
| Diluted | | 125,766 |
| | | | 125,825 |
| | |
|
| | | | | | | | | |
| Cash dividends declared per share | | $ | 0.375 |
| | | | $ | 0.375 |
| | |
|
| | | | | | | | | |
(1) Column does not add due to rounding |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(Dollars in thousands) |
| | | | | | | | | | | | |
| | | November 2,
2013 | | October 27,
2012 | | February 2,
2013 |
| ASSETS | | |
| | |
| | |
|
| CURRENT ASSETS: | | |
| | |
| | |
|
| Cash and cash equivalents | | $ | 65,647 |
| | $ | 294,493 |
| | $ | 345,214 |
|
| Accounts receivable, net | | 81,389 |
| | 57,212 |
| | 34,625 |
|
| Income taxes receivable | | 34,635 |
| | 2,779 |
| | 15,737 |
|
| Inventories, net | | 1,570,034 |
| | 1,382,684 |
| | 1,096,186 |
|
| Prepaid expenses and other current assets | | 104,806 |
| | 35,367 |
| | 73,838 |
|
| Deferred income taxes | | 48,414 |
| | 26,755 |
| | 30,289 |
|
| Total current assets | | 1,904,925 |
| | 1,799,290 |
| | 1,595,889 |
|
| | | | | | | |
| Property and equipment, net | | 1,059,865 |
| | 851,302 |
| | 840,135 |
|
| Intangible assets, net | | 98,792 |
| | 99,033 |
| | 98,903 |
|
| Goodwill | | 200,594 |
| | 200,594 |
| | 200,594 |
|
| Other assets: | | |
| | | | |
|
| Deferred income taxes | | 3,286 |
| | 8,269 |
| | 4,382 |
|
| Other | | 80,433 |
| | 111,093 |
| | 147,904 |
|
| Total other assets | | 83,719 |
| | 119,362 |
| | 152,286 |
|
| TOTAL ASSETS | | $ | 3,347,895 |
| | $ | 3,069,581 |
| | $ | 2,887,807 |
|
| | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| | |
| | |
|
| CURRENT LIABILITIES: | | |
| | |
| | |
|
| Accounts payable | | $ | 738,196 |
| | $ | 665,608 |
| | $ | 507,247 |
|
| Accrued expenses | | 316,421 |
| | 296,232 |
| | 269,900 |
|
| Deferred revenue and other liabilities | | 106,847 |
| | 96,233 |
| | 146,362 |
|
| Income taxes payable | | — |
| | — |
| | 68,746 |
|
| Current portion of other long-term debt and leasing obligations | | 7,540 |
| | 8,584 |
| | 8,513 |
|
| Total current liabilities | | 1,169,004 |
| | 1,066,657 |
| | 1,000,768 |
|
| LONG-TERM LIABILITIES: | | |
| | |
| | |
|
| Revolving credit borrowings | | 116,400 |
| | — |
| | — |
|
| Other long-term debt and leasing obligations | | 6,596 |
| | 14,157 |
| | 7,762 |
|
| Deferred income taxes | | 29,160 |
| | — |
| | 7,413 |
|
| Deferred revenue and other liabilities | | 328,712 |
| | 283,835 |
| | 284,540 |
|
| Total long-term liabilities | | 480,868 |
| | 297,992 |
| | 299,715 |
|
| COMMITMENTS AND CONTINGENCIES | | |
| | |
| | |
|
| STOCKHOLDERS' EQUITY: | | |
| | |
| | |
|
| Common stock | | 982 |
| | 977 |
| | 981 |
|
| Class B common stock | | 249 |
| | 250 |
| | 249 |
|
| Additional paid-in capital | | 937,742 |
| | 855,881 |
| | 874,236 |
|
| Retained earnings | | 1,064,511 |
| | 1,047,668 |
| | 911,704 |
|
| Accumulated other comprehensive income | | 78 |
| | 114 |
| | 112 |
|
| Treasury stock | | (305,539 | ) | | (199,958 | ) | | (199,958 | ) |
| Total stockholders' equity | | 1,698,023 |
| | 1,704,932 |
| | 1,587,324 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 3,347,895 |
| | $ | 3,069,581 |
| | $ | 2,887,807 |
|
| | | | | | | |
DICK'S SPORTING GOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(Dollars in thousands) |
| | | | | | | | |
| | | 39 Weeks Ended |
| | | November 2,
2013 | | October 27,
2012 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | |
| | |
|
| Net income | | $ | 198,961 |
| | $ | 160,959 |
|
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | | |
| | |
|
| Depreciation and amortization | | 113,437 |
| | 88,627 |
|
| Impairment of available-for-sale investments | | — |
| | 32,370 |
|
| Deferred income taxes | | 4,718 |
| | (10,128 | ) |
| Stock-based compensation | | 20,610 |
| | 23,643 |
|
| Excess tax benefit from exercise of stock options | | (20,966 | ) | | (61,461 | ) |
| Tax benefit from exercise of stock options | | 125 |
| | 4,761 |
|
| Other non-cash items | | 435 |
| | 227 |
|
| Changes in assets and liabilities: | | |
| | |
|
| Accounts receivable | | (28,850 | ) | | (17,374 | ) |
| Inventories | | (473,848 | ) | | (367,687 | ) |
| Prepaid expenses and other assets | | (9,752 | ) | | 31,599 |
|
| Accounts payable | | 209,346 |
| | 178,700 |
|
| Accrued expenses | | 3,440 |
| | 18 |
|
| Income taxes payable / receivable | | (66,680 | ) | | 33,260 |
|
| Deferred construction allowances | | 37,125 |
| | 21,744 |
|
| Deferred revenue and other liabilities | | (45,804 | ) | | (35,922 | ) |
| Net cash (used in) provided by operating activities | | (57,703 | ) | | 83,336 |
|
| CASH FLOWS FROM INVESTING ACTIVITIES: | | |
| | |
|
| Capital expenditures | | (196,862 | ) | | (157,448 | ) |
| Purchase of JJB Sports convertible notes and equity securities | | — |
| | (31,986 | ) |
| Proceeds from sale of other assets | | 11,000 |
| | — |
|
| Deposits and purchases of other assets | | (60,048 | ) | | (54,819 | ) |
| Net cash used in investing activities | | (245,910 | ) | | (244,253 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | |
| | |
| Revolving credit borrowings, net | | 116,400 |
| | — |
|
| Payments on other long-term debt and leasing obligations | | (2,139 | ) | | (138,856 | ) |
| Construction allowance receipts | | — |
| | — |
|
| Proceeds from exercise of stock options | | 34,920 |
| | 71,683 |
|
| Excess tax benefit from exercise of stock options | | 20,966 |
| | 61,461 |
|
| Minimum tax withholding requirements | | (13,090 | ) | | (5,329 | ) |
| Cash paid for treasury stock | | (105,603 | ) | | (198,774 | ) |
| Cash dividends paid to stockholders | | (48,977 | ) | | (45,668 | ) |
| Increase (decrease) in bank overdraft | | 21,603 |
| | (23,505 | ) |
| Net cash provided by (used in) financing activities | | 24,080 |
| | (278,988 | ) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | (34 | ) | | (4 | ) |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | | (279,567 | ) | | (439,909 | ) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | 345,214 |
| | 734,402 |
|
| CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 65,647 |
| | $ | 294,493 |
|
Store Count and Square Footage
The stores that opened during the third quarter of 2013 are as follows:
|
| | | | |
| Store | | Market | | Concept |
| Tallahassee, FL | | Tallahassee | | DICK'S Sporting Goods |
| Duluth, MN | | Duluth | | DICK'S Sporting Goods |
| Gretna, LA | | New Orleans | | DICK'S Sporting Goods |
| South Plainfield, NJ | | New Jersey North | | DICK'S Sporting Goods |
| El Paso, TX | | El Paso | | DICK'S Sporting Goods |
| Gainesville, GA | | Gainesville | | DICK'S Sporting Goods |
| Athens, GA | | Athens | | DICK'S Sporting Goods |
| Lake Charles, LA | | Lake Charles | | DICK'S Sporting Goods |
| Albuquerque, NM | | Albuquerque | | DICK'S Sporting Goods |
| Prescott Valley, AZ | | Prescott | | DICK'S Sporting Goods |
| Issaquah, WA | | Seattle | | DICK'S Sporting Goods |
| Salina, KS | | Salina | | DICK'S Sporting Goods |
| Redding, CA | | Redding | | DICK'S Sporting Goods |
| Victorville, CA | | Victorville | | DICK'S Sporting Goods |
| Ashland, KY | | Huntington | | DICK'S Sporting Goods |
| Kendall, FL | | Miami | | DICK'S Sporting Goods |
| Bowling Green, KY | | Bowling Green | | DICK'S Sporting Goods |
| Riverhead, NY | | Long Island | | DICK'S Sporting Goods |
| Morganton, NC | | Charlotte | | DICK'S Sporting Goods |
| Casper, WY | | Casper | | DICK'S Sporting Goods |
| Batavia, NY | | Rochester | | DICK'S Sporting Goods |
| Corpus Christi, TX | | Corpus Christi | | DICK'S Sporting Goods |
| Newport, KY | | Cincinnati | | DICK'S Sporting Goods |
| Osage Beach, MO | | Osage Beach | | DICK'S Sporting Goods |
| Dover, DE | | Dover | | DICK'S Sporting Goods |
| Henderson, NV | | Las Vegas | | Golf Galaxy |
| Cranberry, PA | | Pittsburgh | | Field & Stream |
| Crescent Springs, KY | | Cincinnati | | Field & Stream |
The following represents a reconciliation of beginning and ending stores and square footage for the periods indicated:
Store Count: |
| | | | | | | | | | | | | | | | | | |
| | | Fiscal 2013 | | Fiscal 2012 |
| | | DICK'S Sporting Goods | | Golf Galaxy / Specialty Store Concepts (1) | | Total | | DICK'S Sporting Goods | | Golf Galaxy / Specialty Store Concepts (1) | | Total |
| Beginning stores | | 518 |
| | 83 |
| | 601 |
| | 480 |
| | 81 |
| | 561 |
|
| Q1 New stores | | 2 |
| | — |
| | 2 |
| | 6 |
| | — |
| | 6 |
|
| Q2 New stores | | 7 |
| | — |
| | 7 |
| | 4 |
| | — |
| | 4 |
|
| Q3 New stores | | 25 |
| | 3 |
| | 28 |
| | 21 |
| | 2 |
| | 23 |
|
| Ending stores | | 552 |
| | 86 |
| | 638 |
| | 511 |
| | 83 |
| | 594 |
|
| | | | | | | | | | | | | |
| Remodeled stores | | 3 |
| | — |
| | 3 |
| | — |
| | — |
| | — |
|
| Relocated stores | | 1 |
| | 1 |
| | 2 |
| | 4 |
| | — |
| | 4 |
|
| | | | | | | | | | | | | |
Square Footage:
(in millions)
|
| | | | | | | | | |
| | | DICK'S Sporting
Goods | | Golf Galaxy / Specialty Store Concepts (1) | | Total (2) |
| Q1 2012 | | 26.5 |
| | 1.3 |
| | 27.8 |
|
| Q2 2012 | | 26.7 |
| | 1.3 |
| | 28.0 |
|
| Q3 2012 | | 27.9 |
| | 1.3 |
| | 29.2 |
|
| Q4 2012 | | 28.2 |
| | 1.4 |
| | 29.6 |
|
| Q1 2013 | | 28.3 |
| | 1.4 |
| | 29.7 |
|
| Q2 2013 | | 28.7 |
| | 1.4 |
| | 30.0 |
|
| Q3 2013 | | 29.9 |
| | 1.5 |
| | 31.4 |
|
| |
(1) | Includes the Company's Field & Stream and True Runner stores. |
| |
(2) | Column may not add due to rounding. |
Non-GAAP Financial Measures
In addition to reporting the Company's financial results in accordance with generally accepted accounting principles (“GAAP”), the Company provides information regarding net income and earnings per diluted share adjusted for certain non-recurring, infrequent or unusual items; earnings before interest, taxes and depreciation, adjusted to exclude certain significant gains and losses (“adjusted EBITDA”) and a reconciliation from the Company's gross capital expenditures, net of tenant allowances. These measures are considered non-GAAP and are not preferable to GAAP financial information; however, the Company believes this information provides additional measures of performance that the Company's management, analysts and investors can use to compare core operating results between reporting periods. These non-GAAP measures are provided below and on the Company's website at http://www.DicksSportingGoods.com/Investors.
Non-GAAP Net Income and Earnings Per Share Reconciliations:
(in thousands, except per share data):
|
| | | | | | | | | | | | | | | | | |
| | | | Fiscal 2013 |
| | | | 39 Weeks Ended November 2, 2013 |
| | | | | | | | | | |
| | | | As
Reported | | Recovery of Previously Impaired Asset | | Asset Impairment Charge | | Non-GAAP
Total |
| Net sales | | | $ | 4,265,755 |
| | $ | — |
| | $ | — |
| | $ | 4,265,755 |
|
| Cost of goods sold, including occupancy and distribution costs | | | 2,949,872 |
| | — |
| | — |
| | 2,949,872 |
|
| | | | | | | | | | |
| GROSS PROFIT | | | 1,315,883 |
| | — |
| | — |
| | 1,315,883 |
|
| | | | | | | | | | |
| Selling, general and administrative expenses | | | 983,382 |
| | — |
| | (7,881 | ) | | 975,501 |
|
| Pre-opening expenses | | | 18,736 |
| | — |
| | — |
| | 18,736 |
|
| | | | | | | | | | |
| INCOME FROM OPERATIONS | | | 313,765 |
| | — |
| | 7,881 |
| | 321,646 |
|
| | | | | | | | | | |
| Interest expense | | | 2,081 |
| | — |
| | — |
| | 2,081 |
|
| Other income | | | (10,675 | ) | | 4,342 |
| | — |
| | (6,333 | ) |
| | | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | 322,359 |
| | (4,342 | ) | | 7,881 |
| | 325,898 |
|
| | | | | | | | | | |
| Provision for income taxes | | | 123,398 |
| | — |
| | 3,152 |
| | 126,550 |
|
| | | | | | | | | | |
| NET INCOME | | | $ | 198,961 |
| | $ | (4,342 | ) | | $ | 4,729 |
| | $ | 199,348 |
|
| | | | | | | | | | |
| EARNINGS PER COMMON SHARE: | | | | | | | | | |
| Basic | | | $ | 1.62 |
| | | | | | $ | 1.62 |
|
| Diluted | | | $ | 1.58 |
| | | | | | $ | 1.59 |
|
| | | | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | | | |
| Basic | | | 122,942 |
| | | | | | 122,942 |
|
| Diluted | | | 125,766 |
| | | | | | 125,766 |
|
During the first quarter of 2013, the Company determined that it would recover $4.3 million of its investment in JJB Sports, which it had previously fully impaired. There is no related tax expense as the Company reversed a portion of the deferred tax valuation allowance it had previously recorded for net capital loss carryforwards it did not expect to realize at the time its investment in JJB Sports was fully impaired. During the second quarter of 2013, the Company recorded a pre-tax $7.9 million non-cash impairment charge to reduce the carrying value of a corporate aircraft held for sale to fair market value. The provision for income taxes was calculated at 40%, which approximates the Company's blended tax rate.
|
| | | | | | | | | | | | | |
| | | | Fiscal 2012 |
| | | | 39 Weeks Ended October 27, 2012 |
| | | | | | | | |
| | | | As Reported | | Impairment of Investments | | Non-GAAP Total |
| Net sales | | | $ | 4,030,818 |
| | $ | — |
| | $ | 4,030,818 |
|
| Cost of goods sold, including occupancy and distribution costs | | | 2,782,306 |
| | — |
| | 2,782,306 |
|
| | | | | | | | |
| GROSS PROFIT | | | 1,248,512 |
| | — |
| | 1,248,512 |
|
| | | | | | | | |
| Selling, general and administrative expenses | | | 921,631 |
| | — |
| | 921,631 |
|
| Pre-opening expenses | | | 14,311 |
| | — |
| | 14,311 |
|
| | | | | | | | |
| INCOME FROM OPERATIONS | | | 312,570 |
| | — |
| | 312,570 |
|
| | | | | | | | |
| Impairment of available-for-sale investments | | | 32,370 |
| | (32,370 | ) | | — |
|
| Interest expense | | | 5,309 |
| | — |
| | 5,309 |
|
| Other income | | | (2,923 | ) | | — |
| | (2,923 | ) |
| | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | 277,814 |
| | 32,370 |
| | 310,184 |
|
| | | | | | | | |
| Provision for income taxes | | | 116,855 |
| | 4,734 |
| | 121,589 |
|
| | | | | | | | |
| NET INCOME | | | $ | 160,959 |
| | $ | 27,636 |
| | $ | 188,595 |
|
| | | | | | | | |
| EARNINGS PER COMMON SHARE: | | | | | | | |
| Basic | | | $ | 1.33 |
| | | | $ | 1.56 |
|
| Diluted | | | $ | 1.28 |
| | | | $ | 1.50 |
|
| | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | |
| Basic | | | 121,181 |
| | | | 121,181 |
|
| Diluted | | | 125,825 |
| | | | 125,825 |
|
During the second quarter of 2012, the Company fully impaired its investment in JJB Sports and recorded a pre-tax charge of $32.4 million. The Company recorded a deferred tax asset valuation allowance of approximately $7.9 million for a portion of the $32.4 million net capital loss carryforward that it expects not to realize as a result of the impairment of its investment in JJB Sports.
Adjusted EBITDA
Adjusted EBITDA should not be considered as an alternative to net income or any other generally accepted accounting principles measure of performance or liquidity. Adjusted EBITDA, as the Company has calculated it, may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA is a key metric used by the Company that provides a measurement of profitability that eliminates the effect of changes resulting from financing decisions, tax regulations and capital investments.
|
| | | | | | | | |
| | | 13 Weeks Ended |
| | | November 2,
2013 | | October 27,
2012 |
| | | (dollars in thousands) |
| Net income | | $ | 49,977 |
| | $ | 50,139 |
|
| Provision for income taxes | | 31,115 |
| | 32,307 |
|
| Interest expense | | 696 |
| | 860 |
|
| Depreciation and amortization | | 37,123 |
| | 30,527 |
|
| EBITDA | | $ | 118,911 |
| | $ | 113,833 |
|
| | | | | |
| % increase in EBITDA | | 4 | % | | |
|
|
| | | | | | | | |
| | | 39 Weeks Ended |
| | | November 2,
2013 | | October 27,
2012 |
| | | (dollars in thousands) |
| Net income | | $ | 198,961 |
| | $ | 160,959 |
|
| Provision for income taxes | | 123,398 |
| | 116,855 |
|
| Interest expense | | 2,081 |
| | 5,309 |
|
| Depreciation and amortization | | 113,437 |
| | 88,627 |
|
| EBITDA | | $ | 437,877 |
| | $ | 371,750 |
|
| Add: Impairment of available-for-sale investments | | — |
| | 32,370 |
|
| Less: Recovery of previously impaired asset | | (4,342 | ) | | — |
|
| Adjusted EBITDA, as defined | | $ | 433,535 |
| | $ | 404,120 |
|
| | | | | |
| % increase in adjusted EBITDA | | 7 | % | | |
Reconciliation of Gross Capital Expenditures to Net Capital Expenditures
The following table represents a reconciliation of the Company's gross capital expenditures to its capital expenditures, net of tenant allowances.
|
| | | | | | | | |
| | | 39 Weeks Ended |
| | | November 2,
2013 | | October 27,
2012 |
| | | (dollars in thousands) |
| Gross capital expenditures | | $ | (196,862 | ) | | $ | (157,448 | ) |
| Proceeds from sale-leaseback transactions | | — |
| | — |
|
| Deferred construction allowances | | 37,125 |
| | 21,744 |
|
| Construction allowance receipts | | — |
| | — |
|
| Net capital expenditures | | $ | (159,737 | ) | | $ | (135,704 | ) |
