Sportsman's Warehouse Holdings, Inc. Announces First Quarter 2020 Financial Results
“We are excited with our first quarter results. I could not be more proud of the Sportsman’s Warehouse team as we navigated both a global health pandemic and surging demand in our business,” said
“However, there is significant uncertainty and variability in the current economic environment. Therefore, we will not be providing forward guidance today. We will continue to be financially disciplined as we limit discretionary expenses, pay down debt and preserve our liquidity to effectively navigate these uncertain times. In the long-term, we believe we are uniquely positioned to capitalize on market share opportunities and changing consumer behavior to become a larger and more profitable company.”
For the thirteen weeks ended
- Net sales were
$246.8 million , an increase of$72.8 million , or 41.8%, as compared to the first quarter of fiscal year 2019. The net sales increase was primarily due to a surge in demand for firearms, ammunition and to a lesser extent, other essential products, including water filtration, food preparation and dehydrated food, as well as strong growth in our eCommerce platform compared to the prior year period.
- Same store sales increased 28.6% during the first quarter of 2020 compared to the first quarter of 2019.
- Net loss was
$1.1 million compared to a net loss of$5.5 million in the first quarter of 2019. Adjusted net income was$0.4 million compared to an adjusted net loss of$5.2 million in the first quarter of 2019 (see “GAAP and Non-GAAP Measures”).
- Adjusted EBITDA was
$8.2 million compared to$0.4 million in the prior year (see "GAAP and Non-GAAP Measures").
- Gross profit was
$74.8 million or 30.3% of net sales, as compared to$54.2 million or 31.1% of net sales in the prior year period, a year-over-year increase of$20.6 million in gross profit and an 80-basis point decrease in gross profit margin.
- Diluted loss per share was
$0.03 compared to a diluted loss per share of$0.13 in the prior year. Adjusted diluted earnings per share were$0.01 compared to adjusted diluted loss per share of$0.13 for the comparable period in prior year (see "GAAP and Non-GAAP Measures").
Balance sheet highlights as of
- Total debt was
$144.2 million , consisting of$118.4 million outstanding under the Company’s revolving credit facility and$25.7 million outstanding under the term loan, net of unamortized debt issuance costs. This is a reduction of$31.1 million of debt year-over-year.
- Total liquidity was
$82.4 million as of the end of the first quarter of 2020, comprised of$60.3 million of availability on the revolving credit facility and$22.1 million of cash, as compared to$41.0 million in total liquidity at the end of the first quarter of 2019.
Second Quarter and Fiscal Year 2020 Outlook:
We will not be issuing forward guidance at this time.
Conference Call Information:
A conference call to discuss first quarter 2020 financial results is scheduled for today,
Non-GAAP Information
This press release includes the following financial measures defined as non-GAAP financial measures by the
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this release include, but are not limited to, statements regarding the expected impact of the upcoming election cycles, our market share opportunities and competitive positioning, and the impact of COVID-19. Investors can identify these statements by the fact that they use words such as "continue", "expect", "may", “opportunity”, "plan", "future", “ahead” and similar terms and phrases. The Company cannot assure investors that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to many factors including, but not limited to: the potential effects of COVID-19, including a decrease in store traffic and interruptions or delays in our supply chain; our ability to integrate the ten recently acquired
About
Sportsman’s
For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmans.com.
Investor Contacts:
(801) 566-6681
investors@sportsmans.com
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | |||||||||||||||
| Condensed Consolidated Statements of Loss (Unaudited) | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| For the Thirteen Weeks Ended | |||||||||||||||
| % of net sales |
% of net sales |
||||||||||||||
| Net sales | $ | 246,835 | 100.0 | % | $ | 174,017 | 100.0 | % | |||||||
| Cost of goods sold | 172,061 | 69.7 | % | 119,844 | 68.9 | % | |||||||||
| Gross profit | 74,774 | 30.3 | % | 54,173 | 31.1 | % | |||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative expenses | 75,219 | 30.5 | % | 59,530 | 34.2 | % | |||||||||
| Loss from operations | (445 | ) | (0.2 | %) | (5,357 | ) | (3.1 | %) | |||||||
| Interest expense | 1,534 | 0.6 | % | 2,105 | 1.2 | % | |||||||||
| Loss before income tax expense | (1,979 | ) | (0.8 | %) | (7,462 | ) | (4.3 | %) | |||||||
| Income tax benefit | (849 | ) | (0.3 | %) | (2,003 | ) | (1.2 | %) | |||||||
| Net loss | $ | (1,130 | ) | (0.5 | %) | $ | (5,459 | ) | (3.1 | %) | |||||
| Loss per share | |||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.13 | ) | |||||||||
| Diluted | $ | (0.03 | ) | $ | (0.13 | ) | |||||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 43,327 | 43,003 | |||||||||||||
| Diluted | 43,327 | 43,003 | |||||||||||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | ||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||
| (in thousands) | ||||||
| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 22,090 | $ | 1,685 | ||
| Accounts receivable, net | 581 | 904 | ||||
| Merchandise inventories | 300,851 | 275,505 | ||||
| Income tax receivable | 4,564 | 812 | ||||
| Prepaid expenses and other | 14,939 | 12,732 | ||||
| Total current assets | 343,025 | 291,638 | ||||
| Operating lease right of use asset | 221,671 | 224,520 | ||||
| Property and equipment, net | 95,924 | 98,767 | ||||
| |
1,496 | 1,496 | ||||
| Definite lived intangible assets, net | 213 | 220 | ||||
| Total assets | $ | 662,329 | $ | 616,641 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 86,111 | $ | 38,157 | ||
| Accrued expenses | 72,797 | 70,118 | ||||
| Operating lease liability, current | 35,081 | 34,487 | ||||
| Revolving line of credit | 118,423 | 116,078 | ||||
| Current portion of long-term debt, net of discount and debt issuance costs | 1,979 | 5,936 | ||||
| Total current liabilities | 314,391 | 264,776 | ||||
| Long-term liabilities: | ||||||
| Long-term debt, net of discount, debt issuance costs, and current portion | 23,760 | 23,781 | ||||
| Deferred income taxes | 3,524 | 562 | ||||
| Operating lease liability, noncurrent | 211,469 | 217,254 | ||||
| Total long-term liabilities | 238,753 | 241,597 | ||||
| Total liabilities | 553,144 | 506,373 | ||||
| Stockholders’ equity: | ||||||
| Common stock | 436 | 433 | ||||
| Additional paid-in capital | 86,850 | 86,806 | ||||
| Accumulated earnings | 21,899 | 23,029 | ||||
| Total stockholders’ equity | 109,185 | 110,268 | ||||
| Total liabilities and stockholders' equity | $ | 662,329 | $ | 616,641 | ||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | |||||||||
| Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||||
| (in thousands) | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net loss | $ | (1,130 | ) | $ | (5,459 | ) | |||
| Adjustments to reconcile net loss to net | |||||||||
| cash provided by operating activities: | |||||||||
| Depreciation and amortization | 5,326 | 4,606 | |||||||
| Amortization of discount on debt and deferred financing fees | 84 | 84 | |||||||
| Amortization of Intangible assets | 7 | 7 | |||||||
| Loss (gain) on asset dispositions | 803 | (311 | ) | ||||||
| Noncash operating lease expense | 6,076 | 7,610 | |||||||
| Deferred income taxes | 2,962 | 431 | |||||||
| Stock based compensation | 736 | 453 | |||||||
| Change in assets and liabilities, net of amounts acquired: | |||||||||
| Accounts receivable, net | 323 | (40 | ) | ||||||
| Operating lease liabilities | (7,321 | ) | (8,513 | ) | |||||
| Merchandise inventory | (23,298 | ) | (14,862 | ) | |||||
| Prepaid expenses and other | (2,270 | ) | 1,786 | ||||||
| Accounts payable | 46,645 | 25,340 | |||||||
| Accrued expenses | 6,090 | (5,254 | ) | ||||||
| Income taxes payable and receivable | (3,752 | ) | (2,435 | ) | |||||
| Net cash provided by operating activities | 31,281 | 3,443 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Purchase of property and equipment, net of amounts acquired | (4,833 | ) | (3,402 | ) | |||||
| Acquisition of |
(1,024 | ) | - | ||||||
| Proceeds from sale of property and equipment | - | 311 | |||||||
| Net cash used in investing activities | (5,857 | ) | (3,091 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Net (payments) borrowings on line of credit | 2,345 | (2,734 | ) | ||||||
| (Decrease) Increase in book overdraft | (2,675 | ) | 4,919 | ||||||
| Payment of withholdings on restricted stock units | (689 | ) | (369 | ) | |||||
| Principal payments on long-term debt | (4,000 | ) | (2,000 | ) | |||||
| Net cash used in financing activities | (5,019 | ) | (184 | ) | |||||
| Net change in cash | 20,405 | 168 | |||||||
| Cash at beginning of year | 1,685 | 1,547 | |||||||
| Cash at end of period | $ | 22,090 | $ | 1,715 | |||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | |||||||||||
| GAAP and Non-GAAP Measures (Unaudited) | |||||||||||
| (in thousands, except per share data) | |||||||||||
| Reconciliation of GAAP loss from operations to adjusted income (loss) from operations: | |||||||||||
| For the Thirteen Weeks Ended | |||||||||||
| Loss from operations | $ | (445 | ) | $ | (5,357 | ) | |||||
| Acquisition costs (1) | 29 | - | |||||||||
| Hazard pay (2) | 1,100 | - | |||||||||
| Store closing write-off (3) | 1,039 | - | |||||||||
| Executive transition costs (4) | - | 350 | |||||||||
| Adjusted income (loss) from operations | $ | 1,723 | $ | (5,007 | ) | ||||||
| Reconciliation of GAAP net loss and GAAP dilutive loss per share | |||||||||||
| to adjusted net income (loss) and adjusted diluted earnings (loss) per share: | |||||||||||
| Numerator: | |||||||||||
| Net loss | $ | (1,130 | ) | $ | (5,459 | ) | |||||
| Acquisition costs (1) | 29 | - | |||||||||
| Hazard pay (2) | 1,100 | - | |||||||||
| Store Closing Write-off (3) | 1,039 | - | |||||||||
| Executive Transition Costs (4) | - | 350 | |||||||||
| Less tax benefit | (588 | ) | (90 | ) | |||||||
| Adjusted net income (loss) | $ | 450 | $ | (5,199 | ) | ||||||
| Denominator: | |||||||||||
| Diluted weighted average shares outstanding | 43,686 | 43,003 | |||||||||
| Reconciliation of earnings per share: | |||||||||||
| Dilutive loss per share | $ | (0.03 | ) | $ | (0.13 | ) | |||||
| Impact of adjustments to numerator and denominator | 0.04 | 0.01 | |||||||||
| Adjusted diluted earnings (loss) per share | $ | 0.01 | $ | (0.12 | ) | ||||||
| Reconciliation of net loss to adjusted EBITDA: | |||||||||||
| Net loss | $ | (1,130 | ) | $ | (5,459 | ) | |||||
| Interest expense | 1,534 | 2,105 | |||||||||
| Income tax benefit | (849 | ) | (2,003 | ) | |||||||
| Depreciation and amortization | 5,365 | 4,613 | |||||||||
| Stock-based compensation expense (5) | 736 | 453 | |||||||||
| Pre-opening expenses (6) | 387 | 328 | |||||||||
| Acquisition costs (1) | 29 | - | |||||||||
| Hazard pay (2) | 1,100 | - | |||||||||
| Store closing write-off (3) | 1,039 | - | |||||||||
| Executive transition costs (4) | - | 350 | |||||||||
| Adjusted EBITDA | $ | 8,211 | $ | 387 | |||||||
| (1) Expenses incurred relating to the acquisition of |
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| (2) Expense incurred relating to bonuses and increased wages paid to front-line associates due to COVID-19. | |||||||||||
| (3) Costs and impairments recorded relating to the closure of one store during the first quarter of 2020. | |||||||||||
| (4) Costs incurred for the recruitment and hiring of key members of management. | |||||||||||
| (5) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2019 Performance | |||||||||||
| Incentive Plan and employee stock purchase plan. | |||||||||||
| (6) Pre-opening expenses include expenses incurred in the preparation and opening of a new store location, such as payroll, travel and supplies, but do | |||||||||||
| not include the cost of the initial inventory or capital expenditures required to open a location. | |||||||||||
Source: Sportsman's Warehouse Holdings, Inc.