UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934.
For the quarterly period ended: November 1, 2003
----------------
- OR -
________ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transaction period from _________ to ________
COMMISSION FILE NUMBER 000-20969
HIBBETT SPORTING GOODS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 63-1074067
--------- ----------
(State or other jurisdiction of (IRS Employee Identification No.)
incorporation or organization)
451 Industrial Lane, Birmingham, Alabama 35211
- ----------------------------------------- -----
(Address of principal executive offices) (Zip code)
(205)942-4292
(Registrant's telephone number including area code)
NONE
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ______
-------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act)
Yes X No______
-------
Indicate the number of shares outstanding of each of the issuer's common
stock, as of the latest practicable date: Shares of common stock, par value $.01
per share, outstanding as of December 12, 2003 were 15,484,908 shares.
HIBBETT SPORTING GOODS, INC.
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets at
November 1, 2003 and February 1, 2003 2
Unaudited Condensed Consolidated Statements of
Operations for the Thirteen and Thirty-Nine Week
Periods Ended November 1, 2003 and November 2, 2002 3
Unaudited Condensed Consolidated Statements of
Cash Flows for the Thirty-Nine Week Periods Ended
November 1, 2003 and November 2, 2002 4
Notes to Unaudited Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 15
Item 4. Controls and Procedures 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to Vote of Security-Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 17
1
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
----------- -----------
November 1, February 1,
2003 2003
----------- -----------
Assets
Current Assets:
Cash and cash equivalents $ 25,875 $ 12,016
Accounts receivable, net 3,494 3,371
Inventories 102,033 86,246
Prepaid expenses and other 3,233 760
Refundable income tax 319 -
Deferred income taxes 753 798
----------- -----------
Total current assets 135,707 103,191
----------- -----------
Property and equipment, net 25,621 26,205
----------- -----------
Noncurrent Assets:
Deferred income taxes 143 60
Other, net 137 124
----------- -----------
Total noncurrent assets 280 184
----------- -----------
Total Assets $161,608 $129,580
=========== ===========
Liabilities and Stockholders' Investment
Current Liabilities:
Accounts payable $ 38,443 $ 24,869
Accrued income taxes - 1,338
Accrued expenses:
Payroll-related 4,287 3,520
Other 2,994 2,503
----------- -----------
Total current liabilities 45,724 32,230
Long-Term Debt - -
Stockholders' Investment:
Preferred stock, $.01 par value 1,000,000 shares
authorized, no shares outstanding - -
Common stock, $.01 par value, 50,000,000 shares
authorized, 15,458,168 shares issued and
outstanding at November 1, 2003 and
15,121,750 shares issued and outstanding at
February 1, 2003 155 151
Paid-in capital 64,901 60,245
Retained earnings 50,828 36,954
----------- -----------
Total stockholders' investment 115,884 97,350
----------- -----------
Total Liabilities and Stockholders' Investment $161,608 $129,580
=========== ===========
See notes to condensed consolidated financial statements.
2
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------------- --------------------------
November 1, November 2, November 1, November 2,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $ 78,418 $ 67,004 $ 229,742 $ 203,714
----------- ----------- ----------- -----------
Cost of goods sold,
including warehouse, distribution
and store occupancy costs 51,971 46,404 156,349 141,014
----------- ----------- ----------- -----------
Gross profit 26,447 20,600 73,393 62,700
Store operating, selling, and
administrative expenses 16,194 13,715 46,251 41,452
Depreciation and amortization 1,820 1,733 5,370 5,113
----------- ----------- ----------- -----------
Operating income 8,433 5,152 21,772 16,135
Interest (income) expense, net (33) 21 (75) 172
----------- ----------- ----------- -----------
Income before provision for income taxes 8,466 5,131 21,847 15,963
Provision for income taxes 3,090 1,873 7,974 5,827
----------- ----------- ----------- -----------
Net income $ 5,376 $ 3,258 $ 13,873 $ 10,136
=========== =========== =========== ===========
Basic earnings per common share $ 0.35 $ 0.22 $ 0.91 $ 0.67
=========== =========== =========== ===========
Diluted earnings per common share $ 0.34 $ 0.21 $ 0.89 $ 0.66
=========== =========== =========== ===========
Weighted average shares outstanding:
Basic 15,396,545 15,084,495 15,298,534 15,034,564
=========== =========== =========== ===========
Diluted 15,792,786 15,307,419 15,651,836 15,337,063
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
3
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
Thirty-Nine Weeks Ended
-------------------------
November 1, November 2,
2003 2002
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,873 $ 10,136
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,370 5,113
Deferred income taxes 207 (34)
Loss on disposal of assets 236 14
Change in assets and liabilities (4,177) (12,384)
Total adjustments 1,636 (7,291)
Net cash provided by operating activities 15,509 2,845
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (5,011) (4,463)
Proceeds from sale of property 7 117
----------- -----------
Net cash (used in) investing activities (5,004) (4,346)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving loan activity, net - (1,777)
Proceeds from options exercised and purchase
of shares under employee stock purchase plan 3,354 1,594
----------- -----------
Net cash provided by (used in)financing
activities 3,354 (183)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,859 (1,684)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 12,016 1,972
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 25,875 $ 288
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 40 $ 143
----------- -----------
Income taxes, net of refunds $ 8,363 $ 6,776
----------- -----------
See notes to condensed consolidated financial statements.
4
HIBBETT SPORTING GOODS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation & Accounting Policies
The accompanying unaudited condensed consolidated financial statements of
Hibbett Sporting Goods, Inc. and its wholly-owned subsidiaries (the "Company")
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and are
presented in accordance with the requirements of Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. These financial statements should be read in conjunction
with the consolidated financial statements and notes thereto for the fiscal year
ended February 1, 2003. In the opinion of management, the unaudited condensed
consolidated financial statements included herein contain all adjustments
(consisting only of normal recurring adjustments) considered necessary for a
fair presentation of the Company's financial position as of November 1, 2003,
and February 1, 2003, and the results of its operations and cash flows for the
periods presented.
The Company has experienced and expects to continue to experience seasonal
fluctuations in its net sales and operating income. Therefore, the results 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.
Interest
Interest income for the thirteen and thirty-nine-week-periods ended
November 1, 2003, was $46,044 and $115,590, respectively, shown net of interest
expense of $13,453 and $40,340, respectively. Interest expense for the thirteen
and thirty-nine-week-periods ended November 2, 2002, was $40,572 and $192,677,
respectively, shown net of interest income of $19,035 and $20,797, respectively.
Advertising
Hibbett participates in various advertising and marketing cooperative
programs with its vendors, who, under these programs, reimburse Hibbett for
certain costs incurred. A receivable for cooperative advertising to be
reimbursed is recorded as a decrease to expense as the reimbursements are
earned. Hibbett's gross advertising costs for the thirteen weeks ended November
1, 2003, and November 2, 2002, were $629,685 and $504,535, respectively. The
Company's gross advertising costs for the thirty-nine weeks ended November 1,
2003, and November 2, 2002, were $2,084,550 and $1,983,636, respectively.
Reportable Segments
Hibbett is an operator of full-line sporting good stores in small to
mid-sized markets predominately in the southeast, mid-Atlantic and midwest.
Given the economic characteristics of the store formats, the similar nature of
the products sold, the type of customers and methods of distribution, the
operations of Hibbett constitute only one reportable segment.
Customers
No customer accounted for more than 5% of the Company's sales during the
thirteen and thirty-nine-week periods ended November 1, 2003, or November 2,
2002.
Vendors
For the thirteen-week-period ended November 1, 2003, Nike, our largest
vendor, represented approximately 32.4% of our purchases, Reebok represented
approximately 13.9% of our purchases and Adidas represented approximately 5.1%
of our purchases. For the thirty-nine-week-period ended November 1, 2003, Nike,
our largest vendor, represented approximately 35.6% of our purchases, Reebok
represented approximately 10.8% of our purchases and New Balance represented
approximately 9.1% of our purchases.
5
Store Closing Costs
Hibbett considers individual store closings to be a normal part of
operations and expenses all related costs at the time of closing.
Revenue Recognition
All merchandise sales occur on-site in the Company's retail stores, and the
customers have the option of paying the full purchase price of the merchandise
upon sale or paying a down payment and placing the merchandise on layaway. The
customer may make further payments in installments, but the entire purchase
price for merchandise placed on layaway must be received by Hibbett within 30
days. Hibbett records the down payment and any installments as deferred revenue
until the customer pays the entire purchase price for the merchandise and takes
possession of such merchandise. Hibbett recognizes merchandise revenues at the
time the customer takes possession of the merchandise.
The cost of coupon sales incentives are recognized at the time the related
revenue is recognized by Hibbett. Proceeds received from the issuance of gift
cards are initially recorded as deferred revenue, and such proceeds are
subsequently recognized as revenue at the time the customer redeems such gift
cards and takes possession of the merchandise.
Stock-Based Compensation
Stock-based compensation cost is measured under the intrinsic value method
in accordance with Accounting Principles Bulletin No. 25. If the Company had
recorded compensation costs in accordance with SFAS No. 123 under the fair value
based method (using the Black-Scholes option pricing model), the Company's net
income and earnings per share would have been reduced to the pro forma amounts
indicated below:
Thirteen Week Period Thirty-Nine Week Period
Ended Ended
-------------------- -----------------------
Nov. 1, Nov. 2, Nov. 1, Nov. 2,
2003 2002 2003 2002
--------- --------- ---------- ----------
Net income--as reported $ 5,376 $ 3,258 $ 13,873 $ 10,136
Stock-Based Compensation Expense (244) (246) (728) (737)
--------- --------- --------- ----------
Net income--pro forma $ 5,132 $ 3,012 $ 13,145 $ 9,399
Diluted earnings per share--as reported .34 .21 .89 .66
Diluted earnings per share--pro forma .32 .20 .84 .61
The weighted average assumptions for determining compensation costs for the
thirteen-week-period ended November 1, 2003, under the fair value method include
(i) a risk-free interest rate based on zero-coupon governmental issues on each
grant date with the maturity equal to the expected term of the options (2.8% and
5.0% for fiscal 2004 and 2003, respectively), (ii) an expected stock volatility
of 55% and 58% for fiscal 2004 and 2003, respectively, and (iii) no expected
dividend yield. The weighted average assumptions for determining compensation
costs for the thirty-nine-week-period week period ended November 1, 2003, under
the fair value method include (i) a risk-free interest rate based on zero-coupon
governmental issues on each grant date with the maturity equal to the expected
term of the options (2.7% and 5.1% for fiscal 2004 and 2003, respectively), (ii)
an expected stock volatility of 55% and 58% for fiscal 2004 and 2003,
respectively, and (iii) no expected dividend yield.
6
2. Properties
We currently lease all of our existing 404 store locations and expect that
our policy of leasing rather than owning will continue as we continue to expand.
Our leases typically provide for terms of five to seven years with options on
the part of Hibbett to extend. Most leases also contain a three-year early
termination option if projected sales levels are not met and a kickout clause if
co-tenancy provisions are violated. We believe that this lease strategy enhances
our flexibility to pursue various expansion opportunities resulting from
changing market conditions and to periodically re-evaluate store locations. Our
ability to open new stores is contingent upon locating satisfactory sites,
negotiating favorable leases and recruiting and training additional qualified
management personnel.
As current leases expire, we believe that we will be able either to obtain
lease renewals for present store locations or to obtain leases for equivalent or
better locations in the same general area. For the most part, we have not
experienced any significant difficulty in either renewing leases for existing
locations or securing leases for suitable locations for new stores.
Based on our belief that we maintain good relations with our landlords and
that generally we have been able to secure leases for suitable locations, we
believe that our lease strategy will not be detrimental to our business,
financial condition, or results of operations.
Our offices and our distribution center are leased under an operating lease
expiring in 2014. We own the Team division's warehousing and distribution center
located in Birmingham, Alabama.
3. Earnings Per Share
Basic earnings per share ("EPS") excludes dilution and is computed by
dividing net income by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock are exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in earnings. Diluted EPS has been computed based on the weighted average number
of shares outstanding, including the effect of outstanding stock options, if
dilutive, in each respective period.
A reconciliation of the weighted average shares for basic and diluted EPS
is as follows:
Thirteen Week Periods Ended Thirty-Nine Week Periods Ended
--------------------------- ------------------------------
November 1, November 2, November 1, November 2,
2003 2002 2003 2002
----------- ----------- ------------ ------------
Weighted average shares outstanding
Basic 15,396,545 15,084,495 15,298,534 15,034,564
Dilutive effect of stock options 396,241 222,924 353,302 324,499
----------- ----------- ------------ ------------
Diluted 15,792,786 15,307,419 15,651,836 15,337,063
=========== =========== ============ ============
For the thirteen and thirty-nine-week periods ended November 1, 2003, there
were no anti-dilutive options. For the thirteen and thirty-nine-week periods
ended November 2, 2002, there were 233,962 and 28,125 anti-dilutive options
excluded from the computation, respectively.
4. Stockholders' Investment
The Company offers participation in stock option plans to certain employees
and individuals. Awards typically vest and become exercisable in incremental
installments over a period of five years after the date of grant and expire on
the tenth anniversary of the date of grant. For the thirty-nine-week period
ended November 1, 2003, 330,044 shares were issued upon exercise of options,
resulting in an increase in Stockholders' Investment of $4,556,000, which
includes an increase in Paid in Capital of $1,306,000 attributable to the tax
benefit received from the exercise of these options. For the thirty-nine weeks
ended November 1, 2003, 6,769 shares were purchased under the Employee Stock
Purchase Plan resulting in an increase in Stockholders' Investment of $105,000.
7
5. Stock Split
On June 9, 2003, the Company announced that its Board of Directors approved
a 3-for-2 stock split. The stock split was effected in the form of a 50% stock
dividend, and the new shares were distributed on July 15, 2003, to stockholders
of record on June 27, 2003. The effect of this split has been retroactively
reflected in the accompanying financial statements.
6. Contingencies
The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal counsel,
the ultimate liability, if any, with respect to those proceedings is not
presently expected to materially affect the financial position or results of
operations of the Company.
7. Recent Accounting Pronouncements
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity." This
Statement requires certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity to be classified
as liabilities. SFAS No. 150 is effective for financial instruments entered into
or modified after May 31, 2003, and otherwise is effective at the beginning of
the first interim period beginning after June 15, 2003. We expect the adoption
of SFAS No. 150 to have no material impact on our financial position, results of
operations or cash flows.
In November 2002, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 45 (Interpretation 45), "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." This interpretation elaborates on the disclosures to be
made by a guarantor in interim and annual financial statements about the
obligations under certain guarantees. Interpretation 45 also clarifies that a
guarantor is required to recognize, at the inception of a guarantee, a liability
for the fair value of the obligation undertaken in issuing the guarantee. The
initial recognition and initial measurement provisions of this interpretation
are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. The provisions of this disclosure became effective December
31, 2002, and the adoption of this provision did not have a material impact on
our financial condition, results of operations or cash flows.
In January 2003, the FASB issued Interpretation No. 46 (Interpretation 46),
"Consolidation of Variable Interest Entities." This interpretation addresses the
consolidation of business enterprises (variable interest entities) to which the
usual condition (ownership of a majority voting interest) of consolidation does
not apply. This interpretation focuses on financial interests that indicate
control. It concludes that in the absence of clear control through voting
interests, a company's exposure (variable interest) to the economic risks and
potential rewards from the variable interest entity's assets and activities are
the best evidence of control. Variable interests are rights and obligations that
convey economic gains or losses from changes in the values of the variable
interest entity's assets and liabilities. Variable interests may arise from
financial instruments, service contracts, nonvoting ownership interests and
other arrangements. If an enterprise holds a majority of the variable interests
of an entity, it would be considered the primary beneficiary. The primary
beneficiary would be required to include assets, liabilities and the results of
operations of the variable interest entity in its financial statements.
Interpretation 46 applies immediately to variable interest entities that are
created after or for which control is obtained after January 31, 2003.
8
FASB Staff Position No. FIN 46-6, "Effective Date of FASB Interpretation
No. 46, Consolidation of Variable Interest Entities," was issued with an
effective date of October 9, 2003. This FASB Staff Position deferred the
effective date for applying the provisions of Interpretation 46 for interests
held by public entities in variable interest entities or potential variable
interest entities created before February 1, 2003.
We will implement the provisions of Interpretation 46 for our financial
statements for the year ending January 31, 2004, and we expect the
implementation to have no material impact on our financial condition, results of
operations or cash flows.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Hibbett Sporting Goods, Inc. ("we" or "Hibbett" or the "Company") is a
rapidly-growing operator of full-line athletic sporting goods stores in small to
mid-sized markets predominantly in the southeast, mid-Atlantic and midwest. The
Company's stores offer a broad assortment of quality athletic equipment,
footwear and apparel at competitive prices with a high level of customer
service. Hibbett's merchandise assortment features a broad selection of brand
name merchandise emphasizing team and individual sports complemented by a
selection of localized apparel and accessories designed to appeal to a wide
range of customers within each market. The Company's management team believes
that its stores are among the primary retail distribution avenues for brand name
vendors that seek to penetrate our target markets.
As of November 1, 2003, we operated 384 Hibbett Sports stores, as well as
16 smaller-format Sports Additions athletic shoe stores and four larger-format
Sports & Co. superstores, in 21 states. The Company's primary retail format and
growth vehicle is Hibbett Sports, an approximately 5,000 square foot store
located in enclosed malls or in strip shopping centers which are generally the
center of commerce within the area and which are generally anchored by a
Wal-Mart store. We target markets with county populations that range from 30,000
to 100,000. By targeting smaller markets, we believe that we achieve significant
strategic advantages, including numerous expansion opportunities, comparatively
low operating costs and a more limited competitive environment than generally
faced in larger markets. In addition, we establish greater customer and vendor
recognition as the leading full-line sporting goods retailer in these local
communities. Although competitors in some markets may carry similar product
lines and national brands, we believe that the Hibbett Sports stores are
typically the primary, full-line sporting goods retailers in their markets due
to the extensive selection of traditional team and individual sports merchandise
offered and a high level of customer service.
Hibbett operates on a 52 or 53 week fiscal year ending on the Saturday
nearest to January 31 of each year. Hibbett has been incorporated under the laws
of the State of Delaware since October 6, 1996.
Store Locations
As of November 1, 2003, we operated 404 stores in 21 contiguous states. Of
these stores, 148 are located in malls and 256 are located in strip shopping
centers which are generally the center of commerce within the area and which are
generally anchored by a Wal-Mart store. The following table shows the locations
in which we operated stores as of November 1, 2003:
10
ALABAMA - 57 Conway (2) McDonough Bowling Green Corinth Washington Dyersburg (2)
Adamsville El Dorado Milledgeville (2) Campbellsville Flowood Whiteville Fayetteville
Arab Forrest City Moultrie Corbin Greenville (2) Wilson Franklin
Athens Harrison Newnan Danville Grenada OHIO - 3 Gallatin
Auburn Hope Rome Elizabethtown (2) Hattiesburg (2) Mt. Vernon Greeneville
Bay Minnette Hot Springs Snellville Frankfort Jackson New Boston Jackson (3)
Bessemer Jonesboro St. Marys Georgetown Laurel Steubenville Jefferson City
Brewton Little Rock Statesboro (2) Glasgow Magee OKLAHOMA - 18 Kimball
Birmingham (2) Magnolia Thomaston Hazard McComb Ada Kingsport
Calera Monticello Thomasville Henderson Meridian Altus Knoxville
Clanton Paragould Thomson Hopkinsville Natchez Ardmore Lebanon
Cullman Pine Bluff Tifton Madisonville New Albany Bartlesville Lenoir City
Daphne Rogers Toccoa Mayfield Ocean Springs Chickasha Martin
Decatur Russellville Valdosta (3) Morehead Oxford Duncan Maryville
Dothan Searcy Vidalia Murray Pascagoula Enid McMinnville
Enterprise Van Buren Villa Rica Owensboro Pearl McAlester Memphis
Eufaula FLORIDA - 15 Warner Robbins Paducah Picayune Muskogee Morristown
Fairfield (2) Chiefland Waycross Richmond Richland Miami Murfreesboro (2)
Florence (2) Clewiston IOWA - 3 Somerset Senatobia Okmulgee Nashville
Ft. Payne Destin Debuque South Williamson Starkville Owasso Paris
Gadsden Ft. Walton Beach Muscatine Winchester Tupelo (2) Ponca City Springfield
Gardendale Gainesville West Burlington LOUISIANA - 12 Vicksburg (2) Stillwater Tullahoma
Guntersville Gulf Breeze ILLINOIS - 10 Abbeville Waynesboro Shawnee Union City
Hartselle Lake City Carbondale Bastrop NEBRASKA - 2 Tahlequah Winchester
Hoover Lake Wales Centralia Crowley Grand Island Woodward TEXAS - 14
Huntsville (2) Leesburg Charleston Deridder Hastings Yukon Cleburne
Jacksonville Live Oak Danville Hammond N. CAROLINA - 34 S. CAROLINA - 21 College Station
Jasper Okeechobee Galesburg Monroe Albemarle Aiken Early
Leeds Palatka Harrisburg Natchitoches Asheboro Anderson Greenville
Madison Panama City Moline New Iberia Boone Camden Killeen
Montgomery (2) Santa Rosa Mt. Vernon Ruston Burlington Chester Longview
Muscle Shoals Sebring Quincy Thibodaux Clinton Columbia Lufkin
Northport GEORGIA - 51 Sterling West Monroe Dunn Conway Midland
Oneonta Acworth INDIANA - 12 Winnsboro Elizabeth City Greenville Mt. Pleasant
Opelika Albany Bedford MISSOURI - 14 Elkin Greenwood Palestine
Oxford Americus Columbus Cape Girardeau Forest City Hartsville Paris
Parkway City Athens (2) Corydon Florissant Greenville Lancaster Sherman
Pelham Bainbridge Crawfordsville Fulton Hendersonville Laurens Victoria
Pell City Brunswick Greencastle Hannibal Jacksonville Lexington Waco
Phenix City Canton Greenfield Jefferson City Kinston Marion VIRGINIA - 12
Prattville Carrollton Greensburg Kennett Lexington Murrells Inlet Bristol
Roebuck Cedartown Jasper Kirksville Lincolnton Myrtle Beach Cedar Bluff
Scottsboro Centerville Madison Moberly Lumberton Newberry Christianburg
Selma Columbus (3) Princeton Poplar Bluff Monroe (2) Orangeburg Covington
Talladega Cordele Seymour Rolla Morehead City Rockhill Franklin
Thomasville Cornelia Vincennes Sedalia Morganton Seneca Galax
Tillmans Corner Covington KANSAS - 8 Sikeston New Bern Sumter Martinsville
Troy Dalton Coffeyville St. Roberts Reidsville York Norton
Trussville Douglasville Dodge City Warrensburg Roanoke Rapids TENNESSEE - 36 Petersburg
Tuscaloosa (3) Ft. Olgethrope Emporia MISSISSIPPI - 34 Rockingham Athens South Boston
Valley Gainesville Hays Batesville Salisbury Chattanooga Staunton
ARKANSAS - 22 Griffin Liberal Clarksdale Sanford Cleveland Wythville
Arkadelphia Hinesville Manhattan Cleveland Shallotte Columbia W. VIRGINIA -3
Batesville Hiram (2) Pittsburg Clinton Shelby (2) Cookeville (2) Beckley
Benton Jessup Salina Columbia Southern Pines Crossville Martinsburg
Blytheville La Grange (2) KENTUCKY - 23 Columbus (2) Statesville Dickson Morgantown
Cabot Macon Ashland
11
Results of Operations
The following table sets forth consolidated statement of operations items
expressed as a percentage of net sales for the periods indicated:
Thirteen Week Thirty-Nine Week
Period Ended Period Ended
----------------- ------------------
Nov. 1, Nov. 2, Nov. 1, Nov. 2,
2003 2002 2003 2002
------- ------- ------- -------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold, including warehouse,
distribution and store occupancy costs 66.3 69.3 68.1 69.2
------- ------- ------- -------
Gross profit 33.7 30.7 31.9 30.8
Store operating, selling, and administrative
Expenses 20.6 20.4 20.1 20.4
Depreciation and amortization 2.3 2.6 2.3 2.5
------- ------- ------- -------
Operating income 10.8 7.7 9.5 7.9
Interest expense, net 0.0 0.0 0.0 0.1
------- ------- ------- -------
Income before provision for income taxes 10.8 7.7 9.5 7.8
Provision for income taxes 3.9 2.8 3.5 2.8
------- ------- ------- -------
Net income 6.9% 4.9% 6.0% 5.0%
======= ======= ======= =======
Thirteen Weeks Ended November 1, 2003 Compared to Thirteen Weeks Ended
November 2, 2002
Net sales. Net sales increased $11.4 million, or 17.0%, to $78.4 million
for the thirteen weeks ended November 1, 2003, from $67.0 million for the
comparable period in the prior year. This increase is attributed to the opening
of forty-six Hibbett Sports stores and two Sports Additions, net of store
closings, in the 52 week period ended November 1, 2003, and a 6.9% increase in
comparable store net sales for the thirteen week period ended November 1, 2003.
The increase in comparable store net sales was primarily due to increased sales
in apparel. Apparel sales, mainly college and pro-licensed products and active
wear, were driven by retro college, NBA, NFL and MLB jerseys, Under Armour
performance wear, and ladies college apparel. Footwear sales, driven by
retro-basketball, New Balance running shoes, Converse, Nike Shox, Reebok
classics and Kswiss athletic shoes, were up low single digits compared to last
year's numbers. Strength equipment, boxing and football accessories and
inflatables drove equipment sales, which were up low single digits from last
year's numbers. New stores and stores not in the comparable store net sales
calculation accounted for $7.1 million of the increase in net sales, and
increases in comparable store net sales contributed $4.3 million. Comparable
store net sales data for the period reflect sales for our traditional format
Hibbett Sports stores open throughout the period and the corresponding period of
the prior fiscal year. During the thirteen weeks ended November 1, 2003, we
opened seventeen Hibbett Sports stores and closed one Hibbett Sports store and
two Sports Addition stores.
Gross profit. Cost of goods sold includes the cost of inventory, occupancy
costs for stores and occupancy and operating costs for our distribution center.
Gross profit was $26.4 million, or 33.7% of net sales, in the thirteen weeks
ended November 1, 2003, as compared to $20.6 million, or 30.7% of net sales, in
the same period of the prior fiscal year. The increase in rate was primarily
driven by improvements in retail shrinkage of 146 basis points, reductions in
net markdowns of 71 basis points, higher initial mark-up of 30 basis points due
to increased vendor discounts and the favorable leveraging of warehouse and
occupancy costs of 34 basis points.
12
Store operating, selling and administrative expenses. Store operating,
selling and administrative expenses were $16.2 million, or 20.6% of net sales,
for the thirteen weeks ended November 1, 2003, as compared to $13.7 million, or
20.4% of net sales, for the comparable period a year ago. The increase in store
operating, selling and administrative expenses as a percentage of net sales in
the thirteen weeks ended November 1, 2003, is primarily attributed to increases
in inventory counting expense and store opening and closing cost. Inventory
counting expense increased 12 basis points as a percentage of net sales for the
thirteen-week-period ended November 1, 2003, compared to the same period last
year as a result of taking more inventories in the third quarter this year
compared to last year. Last year, all stores were inventoried during the second
quarter due to the implementation of a new warehouse system leaving fewer stores
to be inventoried during the third quarter of last year. New store costs
increased 21 basis points as a percentage of net sales due to the opening of
seven more stores this period compared to the same thirteen-week period last
year. Store closing cost accounted for an increase of 28 basis points as a
percentage of net sales due to the cost associated with the closing of three
stores during the thirteen week period ended November 1, 2003, and the $100,000
gain recorded last year for the disposition of a store. These expenses were
somewhat offset by the leveraging of labor expenses, a 17 basis point reduction
as a percentage of net sales this period compared to the same period last year,
and a 25 basis point reduction in store supply expense.
Depreciation and amortization. Depreciation and amortization as a
percentage of net sales decreased to 2.3% of net sales for the
thirteen-week-period ended November 1, 2003, compared with 2.6% of net sales for
same thirteen-week- period last year. The reduction in depreciation and
amortization expense as a percentage of net sales is due to an increase in sales
this quarter compared to the same thirteen-week-period last year and an increase
in landlord contributions on leasehold improvements.
Interest (income) expense. Net interest income for the thirteen weeks ended
November 1, 2003, was $33,000 compared to $21,000 of interest expense in the
prior year period. The increase in interest income is due to a higher cash
position this year versus last year and lower borrowing levels due to a
reduction in working capital needs.
Thirty-Nine Weeks Ended November 1, 2003 Compared to Thirty-Nine Weeks Ended
November 2, 2002
Net sales. Net sales increased $26.0 million, or 12.8%, to $229.7 million
for the thirty-nine weeks ended November 1, 2003, from $203.7 million for the
comparable period in the prior year. This increase is attributed to the opening
of forty-six Hibbett Sports stores and two Sports Additions, net of store
closings, in the 52 week period ended November 1, 2003 and a 4.2% increase in
comparable store net sales for the thirty-nine-week-period ended November 1,
2003. The increase in comparable store net sales was primarily due to increased
sales in apparel. Apparel sales, mainly college and pro-licensed products and
active wear, were driven by retro NBA and MLB jerseys, Under Armour and Nike
Dri-Fit performance wear, and ladies college apparel and cheerleading shorts.
Basketball, New Balance running shoes, Nike Shox, Kswiss athletic shoes and the
retro-classic look drove footwear sales. Equipment sales were down from last
year's numbers, but there were positive trends in basketball, football, exercise
equipment and boxing in the third quarter of this year. New stores and stores
not in the comparable store net sales calculation accounted for $18.3 million of
the increase in net sales, and increases in comparable store net sales
contributed $7.7 million. Comparable store net sales data for the period reflect
sales for our traditional format Hibbett Sports stores open throughout the
period and the corresponding period of the prior fiscal year. During the
thirty-nine weeks ended November 1, 2003, we opened thirty-nine Hibbett Sports
stores and two Sports Additions and closed six Hibbett Sports stores and two
Sports Additions stores.
Gross profit. Cost of goods sold includes the cost of inventory, occupancy
costs for stores and occupancy and operating costs for the distribution center.
Gross profit was $73.4 million, or 31.9% of net sales, in the thirty-nine weeks
ended November 1, 2003, as compared to $62.7 million, or 30.8% of net sales, in
the same period of the prior fiscal year. A 106 basis point decrease in retail
reductions (net markdowns and inventory shortages) plus favorable leveraging of
warehouse expenses was somewhat offset by small increases in inbound freight and
occupancy costs.
13
Store operating, selling and administrative expenses. Store
operating, selling and administrative expenses were $46.3 million, or 20.1% of
net sales, for the thirty-nine weeks ended November 1, 2003, as compared to
$41.5 million, or 20.4% of net sales, for the comparable period a year ago. The
decrease in store operating, selling and administrative expenses as a percentage
of net sales in the thirty-nine weeks ended November 1, 2003, is primarily
attributed to a reduction in advertising expense and the leveraging of labor
expense. Advertising costs decreased as a percentage of net sales by 14 basis
points this period compared to the same thirty-nine-week-period last year due to
less promotional advertising. Labor expenses decreased as a percentage of net
sales by 15 basis points this thirty-nine-week-period compared with the same
period last year due to higher than expected comparable store sales and improved
labor controls.
Depreciation and amortization. Depreciation and amortization as a
percentage of net sales decreased to 2.3% of net sales for the
thirty-nine-week-period ended November 1, 2003, compared with 2.5% of net sales
for same thirty-nine-week-period last year. The reduction in depreciation and
amortization expense as a percentage of net sales is due to an increase in sales
this quarter compared to the same thirteen-week-period last year and an increase
in landlord contributions on leasehold improvements.
Interest (income) expense. Net interest income for the thirty-nine weeks
ended November 1, 2003, was $75,000 compared to $172,000 of interest expense in
the prior year period. The increase in interest income is due to a higher cash
position this year versus last year and lower borrowing levels due to a
reduction in working capital needs.
Liquidity and Capital Resources
Our capital requirements relate primarily to new store openings and working
capital requirements. Our working capital needs are somewhat seasonal in nature
and typically reach their peak near the end of the third and the beginning of
the fourth quarter of our fiscal year. Historically, we have funded our cash
requirements primarily through cash flows from operations and borrowings under
our revolving credit facilities.
Net cash provided by operating activities has historically been driven by
net income levels combined with fluctuations in inventory and accounts payable
balances. Inventory levels per store decreased during the
thirty-nine-week-period ended November 1, 2003, compared to inventory levels for
same thirty-nine-week-period last year due to enhanced merchandise flow through
the distribution center, consolidation of vendors and SKUs, and the reduction of
aged merchandise. Accordingly, net cash provided by operating activities was
$15.5 million for the thirty-nine-week-period ended November 1, 2003, compared
with net cash provided by operating activities of $2.8 million for the
thirty-nine-week-period ended November 2, 2002.
With respect to cash flows used in investing activities, capital
expenditures were $5.0 million in the thirty-nine- week-period ended November 1,
2003, compared with $4.5 million for the prior year period. Capital expenditures
in the thirty-nine weeks ended November 1, 2003, were primarily related to the
opening of forty-one new stores, the refurbishing of existing stores and various
corporate additions, including automobiles and warehouse equipment.
Net cash provided by financing activities was $3.4 million in the
thirty-nine-week-period ended November 1, 2003, compared with net cash used in
financing activities of $183,000 in the prior year period. Financing activities
primarily relate to the proceeds from stock options exercised.
We estimate capital expenditures in fiscal 2004 to be approximately $7.5
million, which includes resources budgeted to (i) fund the opening of
approximately 60 to 65 Hibbett Sports stores (ii) remodel selected existing
stores and (iii) fund corporate headquarters and distribution center related
capital expenditures.
14
Hibbett maintains an unsecured revolving credit facility that allows
borrowings up to $35 million and which is subject to renewal on November 5,
2003. We also maintain an unsecured working capital line of credit for $7.0
million, which is subject to annual renewal each November. As of November 1,
2003, we had no debt outstanding under these facilities, compared with no debt
outstanding under the revolving credit facility and $2.1 million outstanding
under the working capital facility, on November 2, 2002. As of November 5, 2003,
the unsecured revolving credit facility allowing borrowings up to $35 million
expired. However, the Company has extended the $7.0 million line until January
5, 2004. We are also in the process of finalizing a new $25 million, two-year
unsecured credit facility and expect to have this completed by the end of
December 2003. Based on our current operating and store opening plans,
management believes that we can fund our cash needs for the foreseeable future
through borrowings under the revolving credit facility, the working capital
facility and cash generated from operations.
Quarterly Fluctuations
We have historically experienced and expect to continue to experience
seasonal fluctuations in its net sales and operating income. Our net sales and
operating income are typically higher in the fourth quarter due to sales
increases during the holiday selling season. However, the seasonal fluctuations
are reduced to some extent by the strong product demand in the spring, summer
and back-to-school sales periods. Our quarterly results of operations may also
fluctuate significantly as a result of a variety of factors, including the
timing of new store openings, the amount and timing of net sales contributed by
new stores, the level of pre-opening expenses associated with new stores, the
relative proportion of new stores to mature stores, merchandise mix, the
relative proportion of stores represented by each of our three store concepts
and demand for apparel and accessories driven by local interest in sporting
events.
Special Note Regarding Forward Looking Statements
The statements contained in this report that are not purely historical or
which might be considered an opinion or projection concerning the Company or its
business, whether express or implied, are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements may include statements regarding the Company's expectations,
intentions, plans or strategies regarding the future. All forward-looking
statements included in this document are based upon information available to the
Company on the date hereof, and the Company assumes no obligation to update any
such forward-looking statements. It is important to note that the Company's
actual results could differ materially from those described or implied in such
forward-looking statements because of, among other factors, the ability of the
Company to execute its expansion plans, a shift in demand for the merchandise
offered by the Company, the Company's ability to obtain brand name merchandise
at competitive prices, the effect of regional or national economic conditions,
the effect of competitive pressures from other retailers and the ability to
attract and retain qualified personnel. In addition, the reader should consider
the risk factors described from time to time in the Company's other documents
and reports, including the factors described under "Risk Factors" in the
Company's Form 10-K/A dated May 1, 2003.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's financial condition, results of operations and cash flows are
subject to market risk from interest rate fluctuations on its revolving credit
facility and working capital facility, each of which bears interest at rates
that vary with LIBOR, prime or quoted cost of funds rates. As of November 1,
2003, we had no debt outstanding under our credit facility. The average amount
of borrowings outstanding under these agreements during the thirteen-week-period
ended November 1, 2003 was $35,343 and the maximum amount outstanding was
$2,943,143. The average amount of borrowings outstanding under these agreements
during the thirty-nine-week-period ended November 1, 2003 was $36,443 and the
maximum amount outstanding was $2,943,143. The total amount of interest paid
during the thirty-nine week period ended November 1, 2003 was less than $500. A
10% increase or decrease in market interest rates would not have a material
impact on the Company's financial condition, results of operations or cash
flows.
15
CONTROLS AND PROCEDURES
Hibbett maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the Company's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission, and
that such information is accumulated and communicated to the Company's
management, including its Chief Executive Office and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating the disclosure controls and procedures, management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), Hibbett carried out an evaluation, under
the supervision and with the participation of Hibbett's management, including
the Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of the design and operation of Hibbett's disclosure controls and
procedures as of the end of the fiscal quarter covered by this report. Based on
the foregoing, Hibbett's Chief Executive Officer and Chief Financial Officer
concluded that Hibbett's disclosure controls and procedures were effective at
the reasonable assurance level.
There have been no changes in Hibbett's internal controls over financial
reporting during the most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, Hibbett's internal control over
financial reporting.
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings
The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal counsel,
the ultimate liability, if any, with respect to those proceedings is not
presently expected to materially affect the financial position or results of
operations of the Company.
ITEM 2: Changes in Securities and Use of Proceeds
None
ITEM 3: Defaults Upon Senior Securities
None
ITEM 4: Submission of Matters to Vote of Security-Holders
None
ITEM 5: Other Information
None
16
ITEM 6: Exhibits and Reports on Form 8-K
(A) Exhibits
Exhibit No.
10.2.8 Seventh Amendment to Credit Agreement dated as of November 05, 2003,
between Hibbett Sporting Goods, Inc., Hibbett Team Sales, Inc., Sports
Wholesale, Inc. and AmSouth Bank
31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1 Section 1350 Certification of Chief Executive Officer
32.2 Section 1350 Certification of Chief Financial Officer
(B) Reports on Form 8-K
The Company filed with the Commission a Current Report on Form 8-K dated
November 20, 2003, to report, under Item 12, a copy of its press release
announcing its financial results for the third fiscal quarter ended November 1,
2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
HIBBETT SPORTING GOODS, INC.
Date: December 15, 2003 By: /s/ Gary A. Smith
----------------- -----------------------------------
Gary A. Smith
President & Chief Financial Officer
17
Exhibit 10.2.8
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT ("this Amendment") dated as of
November 5, 2003 is entered into by HIBBETT SPORTING GOODS, INC., a Delaware
corporation, HIBBETT TEAM SALES, INC., an Alabama corporation, and SPORTS
WHOLESALE, INC., an Alabama corporation (together referred to as the
"Borrowers"), and AMSOUTH BANK, an Alabama banking corporation (the "Lender").
Recitals
A. The Borrowers and the Lender have previously entered into that
certain Credit Agreement dated as of November 5, 1998 as amended by a First
Amendment thereto dated as of November 19, 1999, a Second Amendment thereto
dated as of April 17, 2000, a Third Amendment thereto dated as of November 30,
2000, a Fourth Amendment thereto dated as of June 15, 2001, a Fifth Amendment
thereto dated as of November 30, 2001 and a Sixth Amendment thereto dated as of
November 1, 2002 (as amended, the "Credit Agreement"). Capitalized terms not
otherwise herein defined shall have the meanings given them in the Credit
Agreement.
B. The Borrowers have requested and the Lender has agreed to enter into
certain amendments to the Credit Agreement, as set forth herein.
Agreement
NOW, THEREFORE, in consideration of the foregoing recitals and in
further consideration of the mutual agreements set forth herein, the Borrowers
and the Lender hereby agree as follows:
1. Recitals. The recitals herein above are hereby incorporated by this
reference as if fully set forth herein.
2. Rules of Construction. This Amendment is subject to the rules of
construction set forth in Section 1.1 of the Credit Agreement.
3. Representations and Warranties of Borrowers. Each of the Borrowers
represents and warrants to the Lender as follows:
(a) Representations and Warranties in Loan Documents. All of the
representations and warranties set forth in the Loan Documents are true and
correct in all material respects on and as of the date hereof, except to the
extent that such representations and warranties expressly relate to an earlier
date.
(b) No Default. Each of the Borrowers is in compliance in all material
respects with all the terms and provisions set forth in the Loan Documents on
its part to be observed or performed, and, no Event of Default, nor any event
that upon notice or lapse of time or both would constitute such an Event of
Default, has occurred and is continuing.
18
4. Amendments to Credit Agreement. The Credit Agreement is hereby amended
as follows:
Extension of Termination Date. The defined term "Termination Date"
is hereby further amended to read, in its entirety, as follows:
"Termination Date means January 5, 2004."
5. Loan Documents to Remain in Effect. Except expressly amended herein, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms.
6. No Novation, etc. Nothing contained in this Amendment shall be deemed to
constitute a novation of the terms of the Loan Documents, nor impair any Liens
granted to the Lender thereunder, nor release any person from liability for any
of the Credit Obligations, nor affect any of the rights, powers or remedies of
the Lender under the Loan Documents, nor constitute a waiver of any provision
thereof.
7. Governing Law, Successors and Assigns, etc. This Amendment shall be
governed by and construed in accordance with the laws of the State of Alabama
and shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
8. Headings. The descriptive headings of the sections of this Amendment are
for convenient reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
9. Entire Agreement. This Amendment constitutes the entire understanding to
date of the parties hereto regarding the subject matter hereof and supersedes
all prior and contemporaneous oral and written agreements of the parties thereto
with respect to the subject matter hereof.
10. Severability. If any provision of this Amendment shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which so executed shall be deemed an original, but all
such counterparts shall together constitute but one and the same instrument.
12. No Waiver. Nothing contained in this Amendment shall be construed as a
waiver or acknowledgment of, or consent to any breach of or Event of Default
under the Credit Agreement or the other Loan Documents.
13. Effect of this Amendment. This Amendment amends and supplements the
Credit Agreement and shall be construed as if it is a part thereof for all
purposes. Any representation or warranty contained herein that is determined by
the Lender to have been misleading or untrue in any material respect at the time
made shall constitute an Event of Default under the Credit Agreement and the
other Loan Documents in accordance with Section 8.1 of the Credit Agreement as
if such representation or warranty had been contained in the Credit Agreement,
and any default by the Borrowers in the performance or observance of any
provision of this Amendment that continues unremedied after the grace period
described in Section 8.1 of the Credit Agreement shall constitute an Event of
Default under that section as if such provision had been contained in the Credit
Agreement.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
19
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this Amendment
to be executed and delivered by their duly authorized representatives on the
date set forth above.
HIBBETT SPORTING GOODS, INC., a Delaware corporation
By: /s/ Gary A. Smith
----------------------------------------------------
Its: Vice President & Chief Financial Officer
HIBBETT TEAM SALES, INC., an Alabama corporation
By: /s/ Gary A. Smith
----------------------------------------------------
Its: Vice President & Chief Financial Officer
SPORTS WHOLESALE, INC., an Alabama corporation
By: /s/ Gary A. Smith
----------------------------------------------------
Its: Vice President & Chief Financial Officer
AMSOUTH BANK, an Alabama banking corporation
By: /s/ David A. Simmons
----------------------------------------------------
Its: Senior Vice President
----------------------------------------------------
20
Exhibit 31.1
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
I, Michael J. Newsome, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Hibbett Sporting
Goods, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report.
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report.
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: December 15, 2003 /s/ Michael J. Newsome
-----------------------
Michael J. Newsome
Chief Executive Officer
21
Exhibit 31.2
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
I, Gary A. Smith, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Hibbett Sporting
Goods, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report.
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report.
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
c. Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: December 15, 2003 /s/ Gary A. Smith
----------------------------
Gary A. Smith
Chief Financial Officer
22
Exhibit 32.1
Section 1350 Certification of Chief Executive Officer
Pursuant to 18 U.S.C. ss. 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002, the undersigned officer of Hibbett Sporting Goods,
Inc. (the "Company") hereby certifies, to the best of such officer's knowledge,
that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the
period ended November 1, 2003 (the "Report") fully complies with the
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Dated: December 15, 2003 /s/ Michael J. Newsome
--------------------------
Michael J. Newsome
Chief Executive Officer
23
Exhibit 32.2
Section 1350 Certification of Chief Financial Officer
Pursuant to 18 U.S.C. ss. 1350, as created by Section 906 of the
Sarbanes-Oxley Act of 2002, the undersigned officer of Hibbett Sporting Goods,
Inc. (the "Company") hereby certifies, to the best of such officer's knowledge,
that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the
period ended November 1, 2003 (the "Report") fully complies with the
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities
Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Dated: December 15, 2003 /s/ Gary A. Smith
------------------------------
Gary A. Smith
Chief Financial Officer
24