Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 29, 2015 | Apr. 23, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 29-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | BGFV | |
Entity Registrant Name | BIG 5 SPORTING GOODS CORP | |
Entity Central Index Key | 1156388 | |
Current Fiscal Year End Date | -2 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 22,279,874 |
Unaudited_Condensed_Consolidat
Unaudited Condensed Consolidated Balance Sheets (USD $) | Mar. 29, 2015 | Dec. 28, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash | $6,299 | $11,503 |
Accounts receivable, net of allowances of $36 and $110, respectively | 10,787 | 15,680 |
Merchandise inventories, net | 305,083 | 310,088 |
Prepaid expenses | 8,341 | 9,358 |
Deferred income taxes | 10,439 | 11,025 |
Total current assets | 340,949 | 357,654 |
Property and equipment, net | 78,063 | 78,440 |
Deferred income taxes | 13,266 | 12,792 |
Other assets, net of accumulated amortization of $1,111 and $1,067, respectively | 2,312 | 2,257 |
Goodwill | 4,433 | 4,433 |
Total assets | 439,023 | 455,576 |
Current liabilities: | ||
Accounts payable | 96,616 | 92,369 |
Accrued expenses | 61,921 | 70,399 |
Current portion of capital lease obligations | 1,113 | 1,197 |
Total current liabilities | 159,650 | 163,965 |
Deferred rent, less current portion | 20,379 | 20,736 |
Capital lease obligations, less current portion | 1,039 | 1,155 |
Long-term debt | 55,412 | 66,312 |
Other long-term liabilities | 8,463 | 8,404 |
Total liabilities | 244,943 | 260,572 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, authorized 50,000,000 shares; issued 24,541,844 and 24,445,345 shares, respectively; outstanding 22,200,884 and 22,180,458 shares, respectively | 245 | 245 |
Additional paid-in capital | 110,621 | 110,707 |
Retained earnings | 112,625 | 112,521 |
Less: Treasury stock, at cost; 2,340,960 and 2,264,887 shares, respectively | -29,411 | -28,469 |
Total stockholders' equity | 194,080 | 195,004 |
Total liabilities and stockholders' equity | $439,023 | $455,576 |
Unaudited_Condensed_Consolidat1
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 29, 2015 | Dec. 28, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $36 | $110 |
Accumulated amortization on other assets | $1,111 | $1,067 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 24,541,844 | 24,445,345 |
Common stock, shares outstanding | 22,200,884 | 22,180,458 |
Treasury stock, shares | 2,340,960 | 2,264,887 |
Unaudited_Condensed_Consolidat2
Unaudited Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 29, 2015 | Mar. 30, 2014 |
Income Statement [Abstract] | ||
Net sales | $243,555 | $231,263 |
Cost of sales | 166,871 | 158,585 |
Gross profit | 76,684 | 72,678 |
Selling and administrative expense | 72,462 | 68,904 |
Operating income | 4,222 | 3,774 |
Interest expense | 403 | 434 |
Income before income taxes | 3,819 | 3,340 |
Income taxes | 1,505 | 1,280 |
Net income | $2,314 | $2,060 |
Earnings per share: | ||
Basic | $0.11 | $0.09 |
Diluted | $0.11 | $0.09 |
Dividends per share | $0.10 | $0.10 |
Weighted-average shares of common stock outstanding: | ||
Basic | 21,809 | 21,980 |
Diluted | 21,999 | 22,231 |
Unaudited_Condensed_Consolidat3
Unaudited Condensed Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock, At Cost [Member] |
In Thousands, except Share data | |||||
Beginning Balance at Dec. 29, 2013 | $190,770 | $244 | $109,901 | $106,565 | ($25,940) |
Beginning Balance, Shares at Dec. 29, 2013 | 22,297,701 | ||||
Net income | 2,060 | 2,060 | |||
Dividends on common stock ($0.10 per share) | -2,230 | -2,230 | |||
Issuance of nonvested share awards | 1 | -1 | |||
Issuance of nonvested share awards, Shares | 146,920 | ||||
Exercise of share option awards | 48 | 48 | |||
Exercise of share option awards, Shares | 7,900 | ||||
Share-based compensation | 512 | 512 | |||
Tax benefit from share-based awards activity | -367 | -367 | |||
Forfeiture of nonvested share awards, Shares | -280 | ||||
Retirement of common stock for payment of withholding tax | -809 | -1 | -808 | ||
Retirement of common stock for payment of withholding tax, Shares | -52,927 | ||||
Purchases of treasury stock | -425 | -425 | |||
Purchases of treasury stock, Shares | -28,512 | ||||
Ending Balance at Mar. 30, 2014 | 189,559 | 244 | 109,285 | 106,395 | -26,365 |
Ending Balance, shares at Mar. 30, 2014 | 22,370,802 | ||||
Beginning Balance at Dec. 28, 2014 | 195,004 | 245 | 110,707 | 112,521 | -28,469 |
Beginning Balance, Shares at Dec. 28, 2014 | 22,180,458 | ||||
Net income | 2,314 | 2,314 | |||
Dividends on common stock ($0.10 per share) | -2,210 | -2,210 | |||
Issuance of nonvested share awards | 1 | -1 | |||
Issuance of nonvested share awards, Shares | 147,940 | ||||
Exercise of share option awards | 16 | 16 | |||
Exercise of share option awards, Shares | 2,700 | ||||
Share-based compensation | 508 | 508 | |||
Tax benefit from share-based awards activity | 75 | 75 | |||
Forfeiture of nonvested share awards, Shares | -1,520 | ||||
Retirement of common stock for payment of withholding tax | -685 | -1 | -684 | ||
Retirement of common stock for payment of withholding tax, Shares | -52,621 | -52,621 | |||
Purchases of treasury stock | -942 | -942 | |||
Purchases of treasury stock, Shares | -76,073 | ||||
Ending Balance at Mar. 29, 2015 | $194,080 | $245 | $110,621 | $112,625 | ($29,411) |
Ending Balance, shares at Mar. 29, 2015 | 22,200,884 |
Unaudited_Condensed_Consolidat4
Unaudited Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) | 3 Months Ended | |
Mar. 29, 2015 | Mar. 30, 2014 | |
Dividends per share | $0.10 | $0.10 |
Retained Earnings [Member] | ||
Dividends per share | $0.10 | $0.10 |
Unaudited_Condensed_Consolidat5
Unaudited Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 29, 2015 | Mar. 30, 2014 |
Cash flows from operating activities: | ||
Net income | $2,314 | $2,060 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,426 | 5,226 |
Share-based compensation | 508 | 512 |
Excess tax benefit related to share-based awards | -87 | -177 |
Amortization of debt issuance costs | 44 | 44 |
Deferred income taxes | 112 | 2,063 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 4,893 | 6,541 |
Merchandise inventories, net | 5,005 | 6,881 |
Prepaid expenses and other assets | 993 | -8,663 |
Accounts payable | 8,420 | 934 |
Accrued expenses and other long-term liabilities | -8,119 | -12,020 |
Net cash provided by operating activities | 19,509 | 3,401 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -7,004 | -3,810 |
Net cash used in investing activities | -7,004 | -3,810 |
Cash flows from financing activities: | ||
Principal borrowings under revolving credit facility | 37,999 | 58,534 |
Principal payments under revolving credit facility | -48,899 | -47,333 |
Changes in book overdraft | -2,650 | -10,689 |
Principal payments under capital lease obligations | -339 | -407 |
Proceeds from exercise of share option awards | 16 | 48 |
Excess tax benefit related to share-based awards | 87 | 177 |
Purchases of treasury stock | -942 | -299 |
Tax withholding payments for share-based compensation | -685 | -809 |
Dividends paid | -2,296 | -2,311 |
Net cash used in financing activities | -17,709 | -3,089 |
Net decrease in cash | -5,204 | -3,498 |
Cash at beginning of period | 11,503 | 9,400 |
Cash at end of period | 6,299 | 5,902 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Property and equipment acquired under capital leases | 139 | 60 |
Property and equipment additions unpaid | 3,012 | 2,289 |
Treasury stock purchases accrued but unpaid | 126 | |
Solar energy rebate receivable | 100 | |
Supplemental disclosures of cash flow information: | ||
Interest paid | 395 | 397 |
Income taxes paid | $314 | $4,330 |
Description_of_Business
Description of Business | 3 Months Ended |
Mar. 29, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | (1) Description of Business |
Business | |
Big 5 Sporting Goods Corporation (the “Company”) is a leading sporting goods retailer in the western United States, operating 437 stores as of March 29, 2015. The Company provides a full-line product offering in a traditional sporting goods store format that averages approximately 11,000 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, tennis, golf, winter and summer recreation and roller sports. The Company is a holding company that operates as one reportable segment through Big 5 Corp., its 100% owned subsidiary, and Big 5 Services Corp., which is a 100% owned subsidiary of Big 5 Corp. Big 5 Services Corp. provides a centralized operation for the issuance and administration of gift 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 December 28, 2014 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. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 29, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies |
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 52-53 week fiscal year, which ends on the Sunday nearest December 31. Fiscal year 2015 is comprised of 53 weeks and ends on January 3, 2016. Fiscal year 2014 was comprised of 52 weeks and ended on December 28, 2014. The first three quarters in fiscal 2015 are each comprised of 13 weeks, and the fourth quarter of fiscal 2015 is comprised of 14 weeks. The four quarters of fiscal 2014 were each comprised of 13 weeks. | |
Recently Issued Accounting Updates | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which includes amendments that create Topic 606 and supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 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 amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. On April 1, 2015, the FASB tentatively decided to defer for one year the effective date of ASU No. 2014-09, while also tentatively deciding to permit early application. If these changes are adopted, then 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 as of the original effective date in ASU 2014-09 (i.e., annual reporting periods beginning after December 15, 2016). The Company is evaluating the future impact of the issuance of ASU No. 2014-09, as well as the tentative decisions reached by the FASB. | |
In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. When adopted, ASU No. 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. | |
There have been no other recently issued accounting updates that had a material impact on the Company’s Interim Financial Statements. | |
Use of Estimates | |
Management has made 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 of 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, and goodwill; valuation allowances for receivables, sales returns and deferred income tax assets; estimates related to gift card breakage and the valuation of share-based compensation awards; and obligations related to asset retirements, litigation, self-insurance liabilities and employee benefits. Actual results could differ significantly from these estimates under different assumptions and conditions. | |
Revenue Recognition | |
The Company recognizes revenue from retail sales at the point of sale through its retail stores. For e-commerce sales, revenue is recognized when the merchandise is delivered to the customer. Shipping and handling fees, when billed to customers for e-commerce sales, are included in net sales. An allowance for sales returns is estimated based upon historical experience and recorded as a reduction in sales in the relevant period. | |
Cash received from the sale of gift cards is recorded as a liability, 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 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 first quarter of fiscal 2015). The Company recognized approximately $111,000 and $108,000 in gift card breakage revenue for the first quarter of fiscal 2015 and 2014, respectively. | |
The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenue as defined in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. | |
Share-Based Compensation | |
The Company accounts for 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 9 to the Interim Financial Statements for a further discussion on share-based compensation. | |
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 market using the weighted-average cost method that 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. | |
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 market value. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. 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 | |
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 investments of approximately $0.5 million in long-lived assets to be held and used, subject to recoverability testing. The carrying amount of an 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 asset group. If the 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 asset group exceeds its fair value, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment. | |
The Company determines the sum of the undiscounted cash flows expected to result from the asset group by projecting future revenue, gross margin and operating expense for each store 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 future expectations, competitive factors in various markets and inflation. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions. | |
Leases and Deferred Rent | |
The Company accounts for its leases under the provisions of ASC 840, Leases. | |
The Company evaluates and classifies its leases as either operating or capital leases for financial reporting purposes. Operating lease commitments consist principally of leases for the Company’s retail store facilities, distribution center and corporate office. Capital lease obligations consist principally of leases for some of the Company’s distribution center delivery tractors, management information systems hardware and point-of-sale equipment for the Company’s stores. | |
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. These contingent rents are expensed as they accrue. | |
Deferred rent represents the difference between rent paid and the amounts expensed for operating 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. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 29, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (3) Fair Value Measurements |
The carrying values of cash, accounts receivable, accounts payable and accrued expenses approximate the fair values of these instruments due to their short-term nature. The carrying amount for borrowings under the revolving 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’ assets are reduced to their estimated fair values. |
Accrued_Expenses
Accrued Expenses | 3 Months Ended | ||||||||||||||||
Mar. 29, 2015 | |||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||
Accrued Expenses | (4) Accrued Expenses | ||||||||||||||||
The major components of accrued expenses are as follows: | |||||||||||||||||
March 29, | December 28, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Payroll and related expense | $ | 20,749 | $ | 22,568 | |||||||||||||
Occupancy expense | 10,185 | 9,412 | |||||||||||||||
Sales tax | 7,730 | 10,432 | |||||||||||||||
Other | 23,257 | 27,987 | |||||||||||||||
Accrued expenses | $ | 61,921 | $ | 70,399 | |||||||||||||
LongTerm_Debt
Long-Term Debt | 3 Months Ended | ||||||||||
Mar. 29, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Long-Term Debt | (5) Long-Term Debt | ||||||||||
On October 18, 2010, the Company entered into a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and a syndicate of other lenders, which was amended on October 31, 2011 and December 19, 2013 (as so amended, the “Credit Agreement”). The maturity date of the Credit Agreement is December 19, 2018. | |||||||||||
The Credit Agreement 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 million. The Company may also request additional increases in aggregate availability, up to a maximum of $200.0 million, in which case the existing lenders under the Credit Agreement will have the option to increase their commitments to accommodate the requested increase. If such existing lenders do not exercise that option, the Company may (with the consent of Wells Fargo, not to be unreasonably withheld) seek other lenders willing to provide such commitments. The Credit Facility includes a $50.0 million sublimit for issuances of letters of credit and a $20.0 million sublimit for swingline loans. | |||||||||||
The Company may borrow under the Credit Facility from time to time, provided the amounts outstanding will not exceed the lesser of the then aggregate availability (as discussed above) and the Borrowing Base (such lesser amount being referred to as the “Loan Cap”). The “Borrowing Base” generally is comprised of the sum, at the time of calculation, of (a) 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% 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% 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 reserves established by Wells Fargo in its role as the Administrative Agent in its reasonable discretion. | |||||||||||
Generally, the Company may designate specific borrowings under the Credit Facility as either base rate loans or LIBO 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 Loan Cap over amounts borrowed (such amount being referred to as the “Average Daily Excess Availability”). Those loans designated as LIBO rate loans bear 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 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 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.” The applicable margin for all loans is as set forth below as a function of Average Daily Excess Availability for the preceding fiscal quarter. | |||||||||||
Level | Average Daily Excess Availability | LIBO Rate | Base Rate | ||||||||
Applicable | Applicable | ||||||||||
Margin | Margin | ||||||||||
I | Greater than or equal to $100,000,000 | 1.25% | 0.25% | ||||||||
II | Less than $100,000,000 but greater than or | 1.50% | 0.50% | ||||||||
equal to $40,000,000 | |||||||||||
III | Less than $40,000,000 | 1.75% | 0.75% | ||||||||
The commitment fee assessed on the unused portion of the Credit Facility is 0.25% per annum. | |||||||||||
Obligations under the Credit Facility are secured by a general lien and perfected security interest in substantially all of the Company’s assets. The Credit Agreement contains covenants that require the Company to maintain a fixed charge coverage ratio of not less than 1.0:1.0 in certain circumstances, and limit 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 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. The Credit Agreement contains customary events of default, including, without limitation, failure to pay when due principal amounts with respect to the Credit Facility, failure to pay any interest or other amounts under the Credit Facility for five days after becoming due, failure to comply with certain agreements or covenants contained in the Credit Agreement, failure to satisfy certain judgments against the Company, failure to pay when due (or any other default which does or may lead to the acceleration of) certain other material indebtedness in principal amount in excess of $5.0 million, and certain insolvency and bankruptcy events. | |||||||||||
As of March 29, 2015, the Company had long-term revolving credit borrowings of $55.4 million and letter of credit commitments of $0.5 million outstanding, compared with borrowings of $66.3 million and letter of credit commitments of $0.5 million as of December 28, 2014, respectively. Total remaining borrowing availability, after subtracting letters of credit, was $84.1 million and $73.2 million as of March 29, 2015 and December 28, 2014, respectively. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (6) Income Taxes |
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 March 29, 2015 and December 28, 2014, there was no valuation allowance as the deferred income tax assets were more likely than not to be realized. | |
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 2011 and after, and state and local income tax returns are open for fiscal years 2010 and after. | |
As of March 29, 2015 and December 28, 2014, the Company had no unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate over the next 12 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 March 29, 2015 and December 28, 2014, the Company had no accrued interest or penalties. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||||||||||
Mar. 29, 2015 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Earnings Per Share | (7) Earnings Per Share | ||||||||||||||||
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. | |||||||||||||||||
The following table sets forth the computation of basic and diluted earnings per common share: | |||||||||||||||||
13 Weeks Ended | |||||||||||||||||
March 29, | March 30, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Net income | $ | 2,314 | $ | 2,060 | |||||||||||||
Weighted-average shares of common stock outstanding: | |||||||||||||||||
Basic | 21,809 | 21,980 | |||||||||||||||
Dilutive effect of common stock equivalents arising from share option, nonvested share and nonvested share unit awards | 190 | 251 | |||||||||||||||
Diluted | 21,999 | 22,231 | |||||||||||||||
Basic earnings per share | $ | 0.11 | $ | 0.09 | |||||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.09 | |||||||||||||
The computation of diluted earnings per share for the first quarter of fiscal 2015 and 2014 does not include share option awards in the amounts of 487,169 and 601,308, respectively, that were outstanding and antidilutive (i.e., including such share option awards would result in higher earnings per share), since the exercise prices of these share option awards exceeded the average market price of the Company’s common shares. | |||||||||||||||||
Additionally, the computation of diluted earnings per share for the first quarter of fiscal 2015 does not include nonvested share awards and nonvested share unit awards in the amount of 791 shares 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. No nonvested share awards and nonvested share unit awards were antidilutive for the first quarter of fiscal 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (8) Commitments and Contingencies |
The Company was served on the following dates with the following nine complaints, each of which was brought as a purported class action on behalf of persons who made purchases at the Company’s stores in California using credit cards and were requested or required to provide personal identification information at the time of the transaction: (1) on February 22, 2011, a complaint filed in the California Superior Court in the County of Los Angeles, entitled Maria Eugenia Saenz Valiente v. Big 5 Sporting Goods Corporation, et al., Case No. BC455049; (2) on February 22, 2011, a complaint filed in the California Superior Court in the County of Los Angeles, entitled Scott Mossler v. Big 5 Sporting Goods Corporation, et al., Case No. BC455477; (3) on February 28, 2011, a complaint filed in the California Superior Court in the County of Los Angeles, entitled Yelena Matatova v. Big 5 Sporting Goods Corporation, et al., Case No. BC455459; (4) on March 8, 2011, a complaint filed in the California Superior Court in the County of Los Angeles, entitled Neal T. Wiener v. Big 5 Sporting Goods Corporation, et al., Case No. BC456300; (5) on March 22, 2011, a complaint filed in the California Superior Court in the County of San Francisco, entitled Donna Motta v. Big 5 Sporting Goods Corporation, et al., Case No. CGC-11-509228; (6) on March 30, 2011, a complaint filed in the California Superior Court in the County of Alameda, entitled Steve Holmes v. Big 5 Sporting Goods Corporation, et al., Case No. RG11563123; (7) on March 30, 2011, a complaint filed in the California Superior Court in the County of San Francisco, entitled Robin Nelson v. Big 5 Sporting Goods Corporation, et al., Case No. CGC-11-508829; (8) on April 8, 2011, a complaint filed in the California Superior Court in the County of San Joaquin, entitled Pamela B. Smith v. Big 5 Sporting Goods Corporation, et al., Case No. 39-2011-00261014-CU-BT-STK; and (9) on May 31, 2011, a complaint filed in the California Superior Court in the County of Los Angeles, entitled Deena Gabriel v. Big 5 Sporting Goods Corporation, et al., Case No. BC462213. On June 16, 2011, the Judicial Council of California issued an Order Assigning Coordination Trial Judge designating the California Superior Court in the County of Los Angeles as having jurisdiction to coordinate and to hear all nine of the cases as Case No. JCCP4667. On October 21, 2011, the plaintiffs collectively filed a Consolidated Amended Complaint, alleging violations of the California Civil Code, negligence, invasion of privacy and unlawful intrusion. The plaintiffs allege, among other things, that customers making purchases with credit cards at the Company’s stores in California were improperly requested to provide their zip code at the time of such purchases. The plaintiffs seek, on behalf of the class members, the following: statutory penalties; attorneys’ fees; expenses; restitution of property; disgorgement of profits; and injunctive relief. In an effort to negotiate a settlement of this litigation, the Company and plaintiffs engaged in Mandatory Settlement Conferences conducted by the court on February 6, 2013, February 19, 2013, April 2, 2013, September 12, 2013, and September 20, 2013, and also engaged in mediation conducted by a third party mediator on July 15, 2013. As a result of the foregoing, the parties agreed to settle the lawsuit. On March 23, 2014, the court granted preliminary approval of the settlement. On December 5, 2014, the court granted final approval of the settlement and on January 2, 2015, entered judgment on the settlement. On February 2, 2015, a Notice of Appeal was filed by an objector, which was withdrawn on April 17, 2015. Under the terms of the settlement, the Company distributed to class members who submitted valid and timely claim forms either a $25 gift card (with proof of purchase) or a $10 merchandise voucher (without proof of purchase). Additionally, the Company paid plaintiff’s attorneys’ fees and costs awarded by the court, enhancement payments to the class representatives and claims administrator’s fees. Furthermore, to the extent that if the total amount paid by the Company for the class payout, class representative enhancement payments and claims administrator’s fees was less than $1.0 million, the Company issued merchandise vouchers to a charity for the balance of the deficiency in the manner provided in the settlement agreement. The Company’s estimated total cost pursuant to this settlement is reflected in a legal settlement accrual initially recorded in the third quarter of fiscal 2013, and subsequently adjusted in fiscal 2014 to reflect the settlement. The Company admitted no liability or wrongdoing with respect to the claims set forth in the lawsuit. The settlement constitutes a full and complete settlement and release of all claims related to the lawsuit. | |
On September 10, 2014, a complaint was filed in the California Superior Court for the County of Los Angeles, entitled Pedro Duran v. Big 5 Corp., et al., Case No. BC557154. On October 7, 2014, an amended complaint was filed. As amended, the complaint alleges the Company violated the California Labor Code and the California Business and Professions Code. The complaint was brought as a purported class action on behalf of certain of the Company’s hourly employees who worked as “warehousemen” in the Company’s distribution center in California for the four years prior to the filing of the complaint. The plaintiff alleges, among other things, that the Company failed to pay such employees for all time worked, failed to provide such employees with compliant meal and rest periods, failed to properly itemize wage statements, and failed to pay wages within required time periods during employment and upon termination of employment. The plaintiff seeks, on behalf of the purported class members, an award of statutory and civil damages and penalties, including restitution and recovery of unpaid wages; pre-judgment interest; an award of attorneys’ fees and costs; and injunctive and declaratory relief. The Company believes that the complaint is without merit. The Company has not yet been served with the complaint or the amended complaint. In an effort to negotiate a settlement of this litigation, the Company and plaintiff engaged in mediation on January 28, 2015. On April 1, 2015, the parties agreed to settle the lawsuit. The court has scheduled a hearing for June 8, 2015, to consider the parties’ request to preliminarily approve the proposed settlement. Under the terms of the proposed settlement, the Company agreed to pay approximately $1.4 million, which includes payments to class members, plaintiff’s attorneys’ fees and expenses, an enhancement payment to the class representative, claims administration fees and payment to the California Labor and Workforce Development Agency. The Company’s anticipated total payments pursuant to this settlement have been reflected in a legal settlement accrual initially recorded in the fourth quarter of fiscal 2014 prior to the settlement and subsequently adjusted in the first quarter of fiscal 2015 to reflect the settlement. The Company admitted no liability or wrongdoing with respect to the claims set forth in the lawsuit. Once final approval is granted, the settlement will constitute a full and complete settlement and release of all claims related to the lawsuit. If the court does not grant preliminary or final approval of the settlement, the Company intends to defend the lawsuit vigorously. If the settlement is not finally approved by the court and the lawsuit is resolved unfavorably to the Company, this litigation could have a material negative impact on the Company’s financial condition, and costs associated with any judgment, defense of this litigation as well as any required change in the Company’s labor practices, could have a material negative impact on the Company’s results of operations. | |
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 negative impact on the Company’s results of operations or financial condition. |
Sharebased_Compensation
Share-based Compensation | 3 Months Ended | ||||||||||||
Mar. 29, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Share-based Compensation | (9) Share-based Compensation | ||||||||||||
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 Incentive Plan, as amended and restated on June 14, 2011 (the “Plan”), and accounts for its share-based compensation in accordance with ASC 718. The Company recognized $0.5 million and $0.5 million in share-based compensation expense for the first quarter of fiscal 2015 and 2014, respectively. | |||||||||||||
Share Option Awards | |||||||||||||
Share option awards granted by the Company generally vest and become exercisable in four equal annual installments of 25% per year with a maximum life of ten 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. No share option awards were granted in the first quarter of fiscal 2015 and 2014. | |||||||||||||
As of March 29, 2015, there was $0.2 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 2.0 years. | |||||||||||||
Nonvested Share Awards and Nonvested Share Unit Awards | |||||||||||||
Nonvested share awards and nonvested share unit awards granted by the Company have historically vested from the date of grant in four equal annual installments of 25% per year. In accordance with the Company’s Director Compensation Program, as amended on July 24, 2014, nonvested share awards and nonvested share unit awards granted by the Company to non-employee directors vest 100% on the first anniversary of the grant date. This one-year vesting for non-employee directors shall become effective for nonvested share awards and nonvested share unit awards granted in fiscal 2015. | |||||||||||||
Nonvested share awards are delivered to the recipient upon their vesting. With respect to nonvested share unit awards, vested shares will be 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. The total fair value of nonvested share awards which vested during the first quarter of fiscal 2015 and 2014 was $1.7 million and $2.0 million, respectively. No nonvested share unit awards vested during the first quarter of fiscal 2015 and 2014. | |||||||||||||
The Company granted 147,940 and 146,920 nonvested share awards in the first quarter of fiscal 2015 and 2014, respectively. The weighted-average grant-date fair value per share of the Company’s nonvested share awards granted in the first quarter of fiscal 2015 and 2014 was $13.01 and $15.27, respectively. In the first quarter of fiscal 2015 and 2014, the Company granted no nonvested share unit awards. | |||||||||||||
The following table details the Company’s nonvested share awards activity for the 13 weeks ended March 29, 2015: | |||||||||||||
Shares | Weighted- | ||||||||||||
Average | |||||||||||||
Grant-Date | |||||||||||||
Fair Value | |||||||||||||
Balance as of December 28, 2014 | 336,765 | $ | 13.47 | ||||||||||
Granted | 147,940 | 13.01 | |||||||||||
Vested | -127,975 | 12.55 | |||||||||||
Forfeited | -1,520 | 13.84 | |||||||||||
Balance as of March 29, 2015 | 355,210 | $ | 13.61 | ||||||||||
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 quarter of fiscal 2015, the Company withheld 52,621 common shares with a total value of $0.7 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 March 29, 2015, there was $4.5 million and $0.3 million of total unrecognized compensation expense related to nonvested share awards and nonvested share unit awards, respectively. That expense is expected to be recognized over a weighted-average period of 3.0 years and 2.3 years for nonvested share awards and nonvested share unit awards, respectively. | |||||||||||||
The weighted-average grant-date fair value of nonvested share awards and nonvested share unit awards is the quoted market price of the Company’s common stock on the date of grant. |
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 29, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | (10) Subsequent Event |
In the second quarter of fiscal 2015, the Company’s Board of Directors declared a quarterly cash dividend of $0.10 per share of outstanding common stock, which will be paid on June 15, 2015 to stockholders of record as of June 1, 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 29, 2015 | |
Accounting Policies [Abstract] | |
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 | Reporting Period |
The Company follows the concept of a 52-53 week fiscal year, which ends on the Sunday nearest December 31. Fiscal year 2015 is comprised of 53 weeks and ends on January 3, 2016. Fiscal year 2014 was comprised of 52 weeks and ended on December 28, 2014. The first three quarters in fiscal 2015 are each comprised of 13 weeks, and the fourth quarter of fiscal 2015 is comprised of 14 weeks. The four quarters of fiscal 2014 were each comprised of 13 weeks. | |
Recently Issued Accounting Updates | Recently Issued Accounting Updates |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which includes amendments that create Topic 606 and supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 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 amendments in ASU No. 2014-09 are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. On April 1, 2015, the FASB tentatively decided to defer for one year the effective date of ASU No. 2014-09, while also tentatively deciding to permit early application. If these changes are adopted, then 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 as of the original effective date in ASU 2014-09 (i.e., annual reporting periods beginning after December 15, 2016). The Company is evaluating the future impact of the issuance of ASU No. 2014-09, as well as the tentative decisions reached by the FASB. | |
In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30) – Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. When adopted, ASU No. 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements. | |
There have been no other recently issued accounting updates that had a material impact on the Company’s Interim Financial Statements. | |
Use of Estimates | Use of Estimates |
Management has made 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 of 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, and goodwill; valuation allowances for receivables, sales returns and deferred income tax assets; estimates related to gift card breakage and the valuation of share-based compensation awards; and obligations related to asset retirements, litigation, self-insurance liabilities and employee benefits. Actual results could differ significantly from these estimates under different assumptions and conditions. | |
Revenue Recognition | Revenue Recognition |
The Company recognizes revenue from retail sales at the point of sale through its retail stores. For e-commerce sales, revenue is recognized when the merchandise is delivered to the customer. Shipping and handling fees, when billed to customers for e-commerce sales, are included in net sales. An allowance for sales returns is estimated based upon historical experience and recorded as a reduction in sales in the relevant period. | |
Cash received from the sale of gift cards is recorded as a liability, 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 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 first quarter of fiscal 2015). The Company recognized approximately $111,000 and $108,000 in gift card breakage revenue for the first quarter of fiscal 2015 and 2014, respectively. | |
The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenue as defined in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. | |
Share-Based Compensation | Share-Based Compensation |
The Company accounts for 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 9 to the Interim Financial Statements for a further discussion on share-based compensation. | |
Valuation of Merchandise Inventories, Net | 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 market using the weighted-average cost method that 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. | |
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 market value. These reserves are estimates of a reduction in value to reflect inventory valuation at the lower of cost or market. 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 | Valuation of Long-Lived Assets |
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 investments of approximately $0.5 million in long-lived assets to be held and used, subject to recoverability testing. The carrying amount of an 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 asset group. If the 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 asset group exceeds its fair value, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment. | |
The Company determines the sum of the undiscounted cash flows expected to result from the asset group by projecting future revenue, gross margin and operating expense for each store 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 future expectations, competitive factors in various markets and inflation. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions. | |
Leases and Deferred Rent | Leases and Deferred Rent |
The Company accounts for its leases under the provisions of ASC 840, Leases. | |
The Company evaluates and classifies its leases as either operating or capital leases for financial reporting purposes. Operating lease commitments consist principally of leases for the Company’s retail store facilities, distribution center and corporate office. Capital lease obligations consist principally of leases for some of the Company’s distribution center delivery tractors, management information systems hardware and point-of-sale equipment for the Company’s stores. | |
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. These contingent rents are expensed as they accrue. | |
Deferred rent represents the difference between rent paid and the amounts expensed for operating 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. |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 29, 2015 | |||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||
Summary of Accrued Expenses | The major components of accrued expenses are as follows: | ||||||||||||||||
March 29, | December 28, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Payroll and related expense | $ | 20,749 | $ | 22,568 | |||||||||||||
Occupancy expense | 10,185 | 9,412 | |||||||||||||||
Sales tax | 7,730 | 10,432 | |||||||||||||||
Other | 23,257 | 27,987 | |||||||||||||||
Accrued expenses | $ | 61,921 | $ | 70,399 | |||||||||||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | ||||||||||
Mar. 29, 2015 | |||||||||||
Debt Disclosure [Abstract] | |||||||||||
Average Daily Excess Availability for Preceding Fiscal Quarter | The applicable margin for all loans is as set forth below as a function of Average Daily Excess Availability for the preceding fiscal quarter. | ||||||||||
Level | Average Daily Excess Availability | LIBO Rate | Base Rate | ||||||||
Applicable | Applicable | ||||||||||
Margin | Margin | ||||||||||
I | Greater than or equal to $100,000,000 | 1.25% | 0.25% | ||||||||
II | Less than $100,000,000 but greater than or | 1.50% | 0.50% | ||||||||
equal to $40,000,000 | |||||||||||
III | Less than $40,000,000 | 1.75% | 0.75% | ||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 29, 2015 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share: | ||||||||||||||||
13 Weeks Ended | |||||||||||||||||
March 29, | March 30, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Net income | $ | 2,314 | $ | 2,060 | |||||||||||||
Weighted-average shares of common stock outstanding: | |||||||||||||||||
Basic | 21,809 | 21,980 | |||||||||||||||
Dilutive effect of common stock equivalents arising from share option, nonvested share and nonvested share unit awards | 190 | 251 | |||||||||||||||
Diluted | 21,999 | 22,231 | |||||||||||||||
Basic earnings per share | $ | 0.11 | $ | 0.09 | |||||||||||||
Diluted earnings per share | $ | 0.11 | $ | 0.09 | |||||||||||||
Sharebased_Compensation_Tables
Share-based Compensation (Tables) | 3 Months Ended | ||||||||||||
Mar. 29, 2015 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Summary of Nonvested Share Awards Activity | The following table details the Company’s nonvested share awards activity for the 13 weeks ended March 29, 2015: | ||||||||||||
Shares | Weighted- | ||||||||||||
Average | |||||||||||||
Grant-Date | |||||||||||||
Fair Value | |||||||||||||
Balance as of December 28, 2014 | 336,765 | $ | 13.47 | ||||||||||
Granted | 147,940 | 13.01 | |||||||||||
Vested | -127,975 | 12.55 | |||||||||||
Forfeited | -1,520 | 13.84 | |||||||||||
Balance as of March 29, 2015 | 355,210 | $ | 13.61 | ||||||||||
Description_of_Business_Additi
Description of Business - Additional Information (Detail) | 3 Months Ended |
Mar. 29, 2015 | |
Segment | |
Store | |
sqft | |
Description Of Business [Line Items] | |
Number of operating stores | 437 |
Area of traditional sporting goods store | 11,000 |
Number of reportable segment | 1 |
Big 5 Corp [Member] | |
Description Of Business [Line Items] | |
Subsidiary interest ownership percentage | 100.00% |
Big 5 Service Corp [Member] | |
Description Of Business [Line Items] | |
Subsidiary interest ownership percentage | 100.00% |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2015 | Mar. 30, 2014 | Dec. 28, 2014 | |
Accounting Policies [Line Items] | |||
Reporting period, minimum | 364 days | ||
Reporting period, maximum | 371 days | ||
Recognized gift card breakage revenue | $111,000 | $108,000 | |
Estimated gift card redemption period | 20 quarters | ||
Long-lived assets to be held and used | $500,000 | ||
First Quarter [Member] | |||
Accounting Policies [Line Items] | |||
Interim reporting periods | 91 days | 91 days | |
Second Quarter [Member] | |||
Accounting Policies [Line Items] | |||
Interim reporting periods | 91 days | 91 days | |
Third Quarter [Member] | |||
Accounting Policies [Line Items] | |||
Interim reporting periods | 91 days | 91 days | |
Fourth Quarter [Member] | |||
Accounting Policies [Line Items] | |||
Interim reporting periods | 98 days | 91 days |
Accrued_Expenses_Summary_of_Ac
Accrued Expenses - Summary of Accrued Expenses (Detail) (USD $) | Mar. 29, 2015 | Dec. 28, 2014 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Payroll and related expense | $20,749 | $22,568 |
Occupancy expense | 10,185 | 9,412 |
Sales tax | 7,730 | 10,432 |
Other | 23,257 | 27,987 |
Accrued expenses | $61,921 | $70,399 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 29, 2015 | Dec. 28, 2014 | |
Debt Instrument [Line Items] | ||
Credit Agreement description | On October 18, 2010, the Company entered into a credit agreement with Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, and a syndicate of other lenders, which was amended on October 31, 2011 and December 19, 2013 (as so amended, the "Credit Agreement"). | |
Revolving credit facility | $140,000,000 | |
First tier of increase to the borrowing capacity | 165,000,000 | |
Maximum limit of credit facility | 200,000,000 | |
Sublimit for issuances of letters of credit | 50,000,000 | |
Sublimit for swingline loans | 20,000,000 | |
Percentage of eligible credit card accounts receivables | 90.00% | |
Percentage of the value of eligible inventory | 90.00% | |
Percentage of the value of eligible in-transit inventory | 90.00% | |
Eligible in-transit inventory threshold | 10,000,000 | |
Interest rate, description | 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." | |
Commitment fee assessed | 0.25% | |
Debt instrument, covenant description | Obligations under the Credit Facility are secured by a general lien and perfected security interest in substantially all of the Company's assets. The Credit Agreement contains covenants that require the Company to maintain a fixed charge coverage ratio of not less than 1.01.0 in certain circumstances, and limit the ability | |
Events of default, description | The Credit Agreement contains customary events of default, including, without limitation, failure to pay when due principal amounts with respect to the Credit Facility, failure to pay any interest or other amounts under the Credit Facility for five days after becoming due, failure to comply with certain agreements or covenants contained in the Credit Agreement, failure to satisfy certain judgments against the Company, failure to pay when due (or any other default which does or may lead to the acceleration of) certain other material indebtedness in principal amount in excess of $5.0 million, and certain insolvency and bankruptcy events. | |
Line of Credit Facility default debt minimum amount | 5,000,000 | |
Long-term borrowings | 55,412,000 | 66,312,000 |
Letter of credit commitments | 500,000 | 500,000 |
Remaining borrowing availability | 84,100,000 | 73,200,000 |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Fixed charge coverage ratio | 1.00% | |
Revolving Credit Borrowings [Member] | ||
Debt Instrument [Line Items] | ||
Long-term borrowings | $55,400,000 | $66,300,000 |
Federal Funds Rate [Member] | ||
Debt Instrument [Line Items] | ||
Applicable margin in addition to variable rate | 0.50% | |
LIBO Rate [Member] | ||
Debt Instrument [Line Items] | ||
Applicable margin in addition to variable rate | 1.00% | |
First Amendment to Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Credit agreement amendment date | 31-Oct-11 | |
Second Amendment to Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Credit agreement amendment date | 19-Dec-13 | |
Maturity date of Credit Agreement | 19-Dec-18 |
LongTerm_Debt_Average_Daily_Ex
Long-Term Debt - Average Daily Excess Availability for Preceding Fiscal Quarter (Detail) (Second Amendment to Credit Agreement [Member]) | 3 Months Ended |
Mar. 29, 2015 | |
Level I [Member] | |
Line of Credit Facility [Line Items] | |
Average Daily Excess Availability | Greater than or equal to $100,000,000 |
LIBO Rate Applicable Margin | 1.25% |
Base Rate Applicable Margin | 0.25% |
Level II [Member] | |
Line of Credit Facility [Line Items] | |
Average Daily Excess Availability | Less than $100,000,000 but greater than or equal to $40,000,000 |
LIBO Rate Applicable Margin | 1.50% |
Base Rate Applicable Margin | 0.50% |
Level III [Member] | |
Line of Credit Facility [Line Items] | |
Average Daily Excess Availability | Less than $40,000,000 |
LIBO Rate Applicable Margin | 1.75% |
Base Rate Applicable Margin | 0.75% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 29, 2015 | Dec. 28, 2014 | |
Income Tax Contingency [Line Items] | ||
Deferred tax assets valuation allowance | $0 | $0 |
Unrecognized tax benefits | 0 | 0 |
Unrecognized tax benefits, period | Over the next 12 months | |
Accrued interest or penalties | $0 | $0 |
Earliest Tax Year [Member] | Federal [Member] | ||
Income Tax Contingency [Line Items] | ||
Income tax returns in period | 2011 | |
Earliest Tax Year [Member] | State and Local [Member] | ||
Income Tax Contingency [Line Items] | ||
Income tax returns in period | 2010 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 29, 2015 | Mar. 30, 2014 |
Earnings Per Share [Abstract] | ||
Net income | $2,314 | $2,060 |
Weighted-average shares of common stock outstanding: | ||
Basic | 21,809 | 21,980 |
Dilutive effect of common stock equivalents arising from share option, nonvested share and nonvested share unit awards | 190 | 251 |
Diluted | 21,999 | 22,231 |
Basic earnings per share | $0.11 | $0.09 |
Diluted earnings per share | $0.11 | $0.09 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended | |
Mar. 29, 2015 | Mar. 30, 2014 | |
Nonvested Share Awards and Nonvested Share Unit Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding and antidilutive awards | 791 | 0 |
Share Option Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding and antidilutive awards | 487,169 | 601,308 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended |
Mar. 29, 2015 | Apr. 01, 2015 | |
Complaints | ||
Loss Contingencies [Line Items] | ||
Number of complaints | 9 | |
Gift card value | $25 | |
Merchandise voucher value | 10 | |
Settlement amount | 1,000,000 | |
Settled Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Settlement amount | $1,400,000 |
ShareBased_Compensation_Plans_
Share-Based Compensation Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 29, 2015 | Mar. 30, 2014 | Jul. 24, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $500,000 | $500,000 | |
Shares withheld for tax requirements | 52,621 | ||
Tax withholding payments for share-based compensation | 685,000 | 809,000 | |
Share Option Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as percentage) | 25.00% | ||
Maximum expiration period of share based payment awards granted | 10 years | ||
Granted shares | 0 | 0 | |
Unrecognized compensation expense | 200,000 | ||
Weighted-average period of recognition | 2 years | ||
Nonvested Share Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period of recognition | 3 years | ||
Fair value of nonvested share awards | 1,700,000 | 2,000,000 | |
Granted shares | 147,940 | 146,920 | |
Weighted-Average Grant-Date Fair Value, Granted | $13.01 | $15.27 | |
Unrecognized compensation expenses | 4,500,000 | ||
Nonvested Share Unit Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average period of recognition | 2 years 3 months 18 days | ||
Fair value of nonvested share awards | 0 | 0 | |
Unrecognized compensation expenses | $300,000 | ||
Performance Shares [Member] | Share-based Compensation Award, Tranche One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as percentage) | 25.00% | ||
Performance Shares [Member] | Non-Employee Directors [Member] | Share-based Compensation Award, Tranche One [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as percentage) | 100.00% | ||
Vesting period | 1 year |
ShareBased_Compensation_Plans_1
Share-Based Compensation Plans - Summary of Nonvested Share Awards Activity (Detail) (Nonvested Share Awards [Member], USD $) | 3 Months Ended | |
Mar. 29, 2015 | Mar. 30, 2014 | |
Nonvested Share Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Nonvested Shares, Beginning Balance | 336,765 | |
Granted, Shares | 147,940 | 146,920 |
Vested, Shares | -127,975 | |
Forfeited, Shares | -1,520 | |
Nonvested Shares, Ending Balance | 355,210 | |
Weighted-Average Grant-Date Fair Value, Beginning Balance | $13.47 | |
Weighted-Average Grant-Date Fair Value, Granted | $13.01 | $15.27 |
Weighted-Average Grant-Date Fair Value, Vested | $12.55 | |
Weighted-Average Grant-Date Fair Value, Forfeited | $13.84 | |
Weighted-Average Grant-Date Fair Value, Ending Balance | $13.61 |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 29, 2015 | |
Subsequent Event [Line Items] | |
Dividend declared per share, payable date | 15-Jun-15 |
Dividend declared per share, record date | 1-Jun-15 |
Second Quarter of Fiscal 2015 [Member] | |
Subsequent Event [Line Items] | |
Dividend per share | 0.1 |