Sportsman's Warehouse Holdings, Inc. Announces Second Quarter 2015 Financial Results
For the thirteen weeks ended
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Net sales increased by 8.5% to
$173.0 million from$159.5 million in the second quarter of fiscal 2014. Same store sales increased by 0.5%. -
Income from operations increased to
$16.8 million from$12.3 million in the second quarter of fiscal 2014. Adjusted income from operations, which excludes the reversal of an accrual related to a litigation in the second quarter of 2015 (see "GAAP and Non-GAAP Measures"), was$12.8 million as compared to$12.3 million in the second quarter of fiscal 2014. - The Company opened four new stores in the second quarter of fiscal 2015 and ended the quarter with 61 stores in 19 states, a unit increase of 13.0% from the end of the second quarter of fiscal 2014.
-
Interest expense decreased to
$3.4 million from$4.1 million in the second quarter of fiscal 2014. -
Net income was
$8.2 million compared to$5.1 million in the second quarter of fiscal 2014. Adjusted net income, which excludes the reversal of an accrual related to a litigation matter, net of taxes (see "GAAP and Non-GAAP Measures"), was$5.7 million during the second quarter of fiscal 2015 as compared to$5.1 million in the corresponding period of fiscal 2014. -
Diluted earnings per share were
$0.19 compared to diluted earnings per share of$0.12 in the second quarter of fiscal 2014. Adjusted diluted earnings per share (see "GAAP and Non-GAAP Measures"), were$0.14 compared to adjusted diluted earnings per share of$0.12 in the second quarter of fiscal 2014. -
Adjusted EBITDA was
$17.3 million compared to$16.0 million in the second quarter of fiscal 2014.
For the twenty-six weeks ended
-
Net sales increased by 8.8% to
$317.5 million from$291.9 million in the first half of fiscal 2014. Same store sales remained relatively flat in the first half of fiscal year 2015 compared to the first half of fiscal year 2014. -
Income from operations increased to
$18.0 million from$12.1 million in the first half of fiscal 2014. Adjusted income from operations, which excludes the reversal of an accrual related to a litigation in the second quarter of 2015 and expenses related to bonuses paid as a result of the successful completion of our initial public offering ("IPO") in the first quarter of fiscal 2014 (see "GAAP and Non-GAAP Measures"), was$14.0 million as compared to$14.3 million in the first half of fiscal 2014. - The Company opened six new stores in the first half of fiscal 2015.
-
Interest expense decreased to
$6.9 million from$9.4 million in the first half of fiscal 2014. -
Net income was
$6.8 million compared to$1.7 million in the first half of fiscal 2014. Adjusted net income, which excludes the reversal of an accrual related to a litigation matter in the second quarter of 2015, and expenses related to the IPO bonuses in the first quarter of 2014, net of taxes (see "GAAP and Non-GAAP Measures"), was$4.4 million during the first half of fiscal 2015 compared to adjusted net income of$3.0 million in the corresponding period of fiscal 2014. -
Diluted earnings per share were
$0.16 compared to diluted earnings per share of$0.04 in the first half of fiscal 2014. Adjusted diluted earnings per share (see "GAAP and Non-GAAP Measures"), were$0.10 compared to adjusted diluted earnings per share of$0.07 in the first half of fiscal 2014. -
Adjusted EBITDA was
$22.7 million compared to$22.8 million in the first half of fiscal 2014.
Balance sheet highlights as of
-
Total debt:
$205.7 million , consisting of$48.4 million outstanding under the revolving credit facility and$157.3 million outstanding under the term loans, net of unamortized discount. -
Total liquidity (cash plus
$64.0 million of availability on a$135.0 million revolving credit facility):$64.6 million
Third Quarter and Fiscal 2015 Outlook:
For the third quarter of fiscal 2015, net sales are expected to be in the range of
For fiscal 2015, net sales are expected to be in the range of
Conference Call Information:
A conference call to discuss second quarter 2015 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 our outlook for the third quarter of fiscal year 2015 and for the full fiscal year 2015. 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 risks relating to the Company's retail-based business model, general economic conditions and consumer spending, the Company's concentration of
stores in the
About
For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmanswarehouse.com.
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Condensed Consolidated Statements of Income (Unaudited) | ||||||||
(in thousands, except share and per share data) | ||||||||
For the Thirteen Weeks Ended | For the Twenty Six Weeks Ended | |||||||
2015 |
% of net sales |
2014 |
% of net sales |
2015 |
% of net sales |
2014 |
% of net sales |
|
Net sales | $ 172,985 | 100.0% | $ 159,468 | 100.0% | $ 317,478 | 100.0% | $ 291,893 | 100.0% |
Cost of goods sold | 114,983 | 66.5% | 106,641 | 66.9% | 216,325 | 68.1% | 198,938 | 68.2% |
Gross profit | 58,002 | 33.5% | 52,827 | 33.1% | 101,153 | 31.9% | 92,955 | 31.8% |
Operating expenses: | ||||||||
Selling, general and administrative expenses | 41,216 | 23.8% | 40,484 | 25.3% | 83,119 | 26.2% | 80,833 | 27.6% |
Income from operations | 16,786 | 9.7% | 12,343 | 7.8% | 18,034 | 5.7% | 12,122 | 4.2% |
Interest expense | (3,448) | (2.0%) | (4,107) | (2.6%) | (6,908) | (2.2%) | (9,365) | (3.2%) |
Income before income tax expense | 13,338 | 7.7% | 8,236 | 5.2% | 11,126 | 3.5% | 2,757 | 1.0% |
Income tax expense | (5,138) | (3.0%) | (3,173) | (2.0%) | (4,286) | (1.4%) | (1,062) | (0.4%) |
Net income | $ 8,200 | 4.7% | $ 5,063 | 3.2% | $ 6,840 | 2.1% | $ 1,695 | 0.6% |
Earnings per share | ||||||||
Basic | $ 0.20 | $ 0.12 | $ 0.16 | $ 0.04 | ||||
Diluted | $ 0.19 | $ 0.12 | $ 0.16 | $ 0.04 | ||||
Weighted average shares outstanding | ||||||||
Basic | 42,004 | 41,768 | 41,927 | 38,105 | ||||
Diluted | 42,336 | 41,966 | 42,242 | 38,315 |
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Condensed Consolidated Balance Sheets (Unaudited) | ||
(in thousands) | ||
Assets | ||
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|
|
Current assets: | ||
Cash and cash equivalents | $ 583 | $ 1,751 |
Accounts receivable, net | 419 | 425 |
Merchandise inventories | 235,446 | 185,909 |
Prepaid expenses and other | 4,071 | 7,468 |
Income taxes receivable | 3,663 | 5,190 |
Deferred income taxes | 2,514 | 2,928 |
Total current assets | 246,696 | 203,671 |
Property and equipment, net | 69,102 | 54,317 |
Deferred income taxes | 3,858 | 5,398 |
Definite lived intangible assets, net | 4,827 | 5,729 |
Other long-term assets, net | 1,442 | 1,608 |
$ 325,925 | $ 270,723 | |
. | . | |
Liabilities and Stockholders' Deficit | ||
Current liabilities: | ||
Accounts payable | $ 60,212 | $ 28,500 |
Accrued expenses | 52,448 | 42,620 |
Revolving line of credit | 48,359 | 41,899 |
Current portion of long-term debt, net of discount | 1,333 | 1,333 |
Current portion of deferred rent | 2,966 | 2,873 |
Total current liabilities | 165,318 | 117,225 |
Long-term liabilities: | ||
Long-term debt, net of discount and current portion | 156,046 | 156,713 |
Deferred rent credit, net of current portion | 28,729 | 28,117 |
Total long-term liabilities | 184,775 | 184,830 |
Total liabilities | 350,093 | 302,055 |
Stockholders' deficit: | ||
Common stock | 420 | 418 |
Additional paid-in capital | 76,579 | 76,257 |
Accumulated deficit | (101,167) | (108,007) |
Total stockholders' deficit | (24,168) | (31,332) |
$ 325,925 | $ 270,723 |
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Condensed Consolidated Statements of Cash Flows (Unaudited) | ||
(in thousands) | ||
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CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 6,840 | $ 1,695 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 4,629 | 3,167 |
Amortization of discount on debt and deferred financing fees | 362 | 674 |
Amortization of Intangible | 902 | 903 |
Change in deferred rent | 705 | 5,561 |
Deferred taxes | 1,954 | (202) |
Stock based compensation | 1,077 | 2,258 |
Change in assets and liabilities: | ||
Accounts receivable | 6 | 41 |
Merchandise inventory | (49,537) | (46,047) |
Prepaid expenses and other | 3,334 | (1,191) |
Accounts payable | 31,712 | 22,023 |
Accrued expenses | (4,245) | (1,685) |
Income taxes | 1,527 | (5,315) |
Net cash used in operating activities | (734) | (18,118) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (19,414) | (19,590) |
Net cash used in investing activities | (19,414) | (19,590) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net borrowings on LOC | 6,460 | 33,863 |
Issuance of common stock | -- | 73,393 |
Increase in book overdraft | 14,073 | 5,931 |
Excess tax benefits from stock-based compensation | 283 | 287 |
Payment of withholdings on restricted stock units | (1,036) | (993) |
Principal payments on long-term debt | (800) | (74,475) |
Net cash provided by financing activities | 18,980 | 38,006 |
Net change in cash and cash equivalents | (1,168) | 298 |
Cash and cash equivalents at beginning of year | 1,751 | 1,354 |
Cash and cash equivalents at end of period | $ 583 | $ 1,652 |
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GAAP and Non-GAAP Measures (Unaudited) | ||||
(in thousands, except per share data) | ||||
Reconciliation of GAAP income from operations to adjusted income from operations: | ||||
For the Thirteen Weeks Ended | For the Twenty Six Weeks Ended | |||
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Income from operations | $ 16,786 | $ 12,343 | $ 18,034 | $ 12,122 |
IPO bonus (1) | -- | -- | -- | 2,200 |
Litigation accrual reversal (2) | (4,000) | -- | (4,000) | -- |
Adjusted income from operations | $ 12,786 | $ 12,343 | $ 14,034 | $ 14,322 |
Reconciliation of GAAP net income and GAAP diluted weighted average shares outstanding to adjusted net income and adjusted weighted average shares outstanding: | ||||
Numerator: | ||||
Net income | $ 8,200 | $ 5,063 | $ 6,840 | $ 1,695 |
IPO bonus (1) | -- | -- | -- | 2,200 |
Less tax benefit related to IPO bonus | -- | -- | -- | (847) |
Litigation accrual reversal (2) | (4,000) | -- | (4,000) | -- |
Less tax benefit related to litigation accrual reversal | 1,540 | -- | 1,540 | -- |
Adjusted net income | $ 5,740 | $ 5,063 | $ 4,380 | $ 3,048 |
Denominator: | ||||
Diluted weighted average shares outstanding | 42,336 | 41,966 | 42,242 | 38,315 |
Initial public offering shares issuance (3) | -- | 50 | -- | 3,714 |
Adjusted diluted weighted average shares outstanding | 42,336 | 42,016 | 42,242 | 42,029 |
Reconciliation of earnings per share: | ||||
Dilutive earnings per share | $ 0.19 | $ 0.12 | $ 0.16 | $ 0.04 |
Impact of adjustments to numerator and denominator | (0.05) | -- | (0.06) | 0.03 |
Adjusted earnings per share | $ 0.14 | $ 0.12 | $ 0.10 | $ 0.07 |
Reconciliation of net income to adjusted EBITDA: | ||||
Net income | $ 8,200 | $ 5,063 | $ 6,840 | $ 1,695 |
Interest expense | 3,448 | 4,107 | 6,908 | 9,365 |
Income tax expense | 5,138 | 3,173 | 4,286 | 1,062 |
Depreciation and amortization | 2,909 | 2,218 | 5,531 | 4,070 |
Stock-based compensation expense (4) | 480 | 524 | 1,077 | 2,258 |
Pre-opening expenses (5) | 1,164 | 904 | 2,091 | 2,129 |
IPO bonus (1) | -- | -- | -- | 2,200 |
Litigation accrual reversal (2) | (4,000) | -- | (4,000) | -- |
Adjusted EBITDA | $ 17,339 | $ 15,989 | $ 22,733 | $ 22,779 |
(1) As a result of the completion of our initial public offering and pursuant to the terms of the employment agreements with our executive officers, we paid |
(2) On |
(3) Assumes our initial public offering was effective as of |
(4) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2013 Performance Incentive Plan. |
(5) 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. |
CONTACT: Investor Contact:Source:ICR, Inc. Farah Soi /Rachel Schacter (203) 682-8200 investors@sportsmanswarehouse.com
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