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Form 8-K Filing
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 4, 2014 

SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)

  DELAWARE  
  (State or Other Jurisdiction of Incorporation)  

001-36401 39-1975614
(Commission File Number) (I.R.S. Employer Identification No.)

7035 South High Tech Drive,
Midvale, Utah		 84047
(Address of Principal Executive Offices) (Zip Code)

(801) 566-6681
(Registrant's Telephone Number, Including Area Code)

  (Not Applicable)  
  (Former Name or Former Address, if Changed Since Last Report)  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

    [   ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    [   ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    [   ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    [   ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

Item 2.02. Results of Operations and Financial Condition.

On December 4, 2014, Sportsman's Warehouse Holdings, Inc. (the "Company") issued a press release reporting its results of operations for the fiscal quarter ended November 1, 2014. The press release is furnished herewith as Exhibit 99.1 and is specifically incorporated by reference herein.

The information in this Form 8-K and the related information in the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01. Financial Statements and Exhibits.

(d)

Exhibits.

99.1

Press release of Sportsman's Warehouse Holdings, Inc., dated December 4, 2014.

SIGNATURE

    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 hereunto duly authorized.

       SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
       
       
By: /s/   KEVAN P. TALBOT
Date: December 4, 2014 Kevan P. Talbot
Chief Financial Officer and Secretary

Sportsman's Warehouse Holdings, Inc. Announces Third Quarter 2014 Financial Results

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Third Quarter 2014 Financial Results

MIDVALE, Utah, Dec. 4, 2014 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's" or the "Company") (Nasdaq:SPWH) today announced financial results for the thirteen weeks ended November 1, 2014.

For the thirteen weeks ended November 1, 2014:

John Schaefer, President and Chief Executive Officer, stated: "Our third quarter earnings came in above our guidance range driven by solid results from our non-hunting and shooting product categories combined with positive new store performance and margin expansion. We remain focused on our strategic growth initiatives and continue to see significant opportunities to capture additional share of the outdoor sporting goods market given the abundant white space opportunity and our unique positioning. We believe our everyday value, high service levels and local shopping convenience continue to be important distinguishing factors that drive our customer value proposition."

For the thirty-nine weeks ended November 1, 2014:

Balance sheet highlights as of November 1, 2014:

Fourth Quarter and Fiscal 2014 Outlook:

For the fourth quarter of fiscal 2014, net sales are expected to be in the range of $185.0 million to $190.0 million based on a decrease in same store sales from the fourth quarter of fiscal year 2013 in the range of 3.0% to 6.0%. Net income is expected to be in the range of $4.9 million to $5.6 million, with diluted earnings per share of $0.12 to $0.13 on a weighted average of approximately 42.0 million estimated common shares outstanding. Adjusted net income, which excludes $5.7 million in pre-tax charges, or $3.4 million in after-tax charges, related to the refinancing of our term loan in the fourth quarter, is expected to be in the range of $8.4 million to $9.1 million, or $0.20 to $0.22 per diluted share, on a weighted average of approximately 42.0 million estimated common shares outstanding.

For fiscal 2014, net sales are expected to be in the range of $660.0 million to $665.0 million based on opening eight new stores for the full year and a decrease in same store sales from fiscal year 2013 in the range of 7.0% to 8.0%. Net income is expected to be in the range of $15.5 million to $16.3 million, with diluted earnings per share of $0.37 to $0.39 (which includes the impact of $1.4 million in expenses related to IPO bonuses and the $3.5 million of term loan refinance expenses, net of taxes) on approximately 42.0 million estimated weighted average common shares outstanding. Excluding $4.9 million, or $0.11 per adjusted diluted share, in expenses related to the IPO bonuses and term loan refinance costs, adjusted net income for fiscal 2014 is expected to be in the range of $20.4 million to $21.1 million, or $0.48 to $0.50 per diluted share, based on a weighted average diluted share count of 42.0 million.

Conference Call Information:

A conference call to discuss third quarter fiscal 2014 financial results is scheduled for today, December 4, 2014, at 4:30 PM Eastern Time. The conference call will be webcast and may be accessed via the Investor Relations section of the Company's website at www.sportsmanswarehouse.com.

Non-GAAP Information

This press release includes the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission (the "SEC"): adjusted income from operations, adjusted net income, adjusted diluted weighted average shares outstanding, adjusted diluted earnings per share and adjusted EBITDA. The Company has reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures under "GAAP and Non-GAAP Measures" in this release. The Company believes that these non-GAAP financial measures not only provide its management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of the Company's business and facilitate a more meaningful comparison of its diluted income per share and actual results on a period-over-period basis. The Company has provided this information as a means to evaluate the results of its ongoing operations. Other companies in the Company's industry may calculate these items differently than it does. Each of these measures is not a measure of performance under GAAP and should not be considered as a substitute for the most directly comparable financial measures prepared in accordance with GAAP. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results as reported under GAAP.

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 fourth quarter and full fiscal year 2014. 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 Western United States, competition in the outdoor activities and sporting goods market, changes in consumer demands, the company's expansion into new markets and planned growth, current and future government regulations, risks related to the Company's continued retention of its key management, the Company's distribution center, quality or safety concerns about the Company's merchandise, events that may affect the Company's vendors, trade restrictions, and other factors that are set forth in the Company's filings with the SEC, including under the caption "Risk Factors" in our Form 10-Q for the fiscal quarter ended May 3, 2014 filed with the SEC on June 11, 2014 and our other public filings made with the SEC and available at www.sec.gov. If one or more of these risks or uncertainties materialize, or if any of the Company's assumptions prove incorrect, the Company's actual results may vary in material respects from those projected in these forward-looking statements. Any forward-looking statement made by the Company in this release speaks only as of the date on which the Company makes it. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About Sportsman's Warehouse Holdings, Inc.

Sportsman's Warehouse is a high-growth outdoor sporting goods retailer focused on meeting the everyday needs of the seasoned outdoor veteran, the first-time participant and every enthusiast in between. Our mission is to provide a one-stop shopping experience that equips our customers with the right hunting, shooting, fishing and camping gear to maximize their enjoyment of the outdoors.

For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmanswarehouse.com.

SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)
                 
  For the Thirteen Weeks Ended   For the Thirty Nine Weeks Ended  
                 
  November 1,
2014		 % of net
sales		 November 2,
2013		 % of net
sales		 November 1,
2014		 % of net
sales		 November 2,
2013		 % of net
sales
                 
Net sales  $ 182,532 100.0%  $ 175,059 100.0%  $ 474,425 100.0%  $ 467,436 100.0%
Cost of goods sold  121,881 66.8%  119,836 68.5%  320,819 67.6%  317,090 67.8%
Gross profit  60,651 33.2%  55,223 31.5%  153,606 32.4%  150,346 32.2%
                 
Operating expenses:                
Selling, general and administrative expenses  42,026 23.0%  38,240 21.8%  122,859 25.9%  106,642 22.8%
Bankruptcy related expenses  --  0.0%  --  0.0%  --  0.0%  55 0.0%
   42,026 23.0%  38,240 21.8%  122,859 25.9%  106,697 22.8%
Income from operations  18,625 10.2%  16,983 9.7%  30,747 6.5%  43,649 9.3%
Interest expense  (4,122) (2.3%)  (13,302) (7.6%)  (13,487) (2.8%)  (19,895) (4.3%)
Income before income tax expense  14,503 7.9%  3,681 2.1%  17,260 3.6%  23,754 5.1%
Income tax expense  (5,587) (3.1%)  (1,459) (0.8%)  (6,649) (1.4%)  (9,417) (2.0%)
Net income  $ 8,916 4.9%  $ 2,222 1.3%  $ 10,611 2.2%  $ 14,337 3.1%
                 
Earnings per share                
Basic  $ 0.21    $ 0.07    $ 0.27    $ 0.43  
Diluted  $ 0.21    $ 0.07    $ 0.27    $ 0.43  
                 
Weighted average shares outstanding                
Basic  41,818    33,229    39,342    33,229  
Diluted  41,931    33,229    39,553    33,229  
 
 
SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
     
Assets    
  November 1, 2014 February 1, 2014
Current assets:    
Cash and cash equivalents  $ 1,738  $ 1,354
Accounts receivable, net  470  413
Merchandise inventories, net  230,602  161,334
Prepaid expenses and other  8,944  7,753
Income taxes receivable  6,828  2,229
Deferred income taxes  2,632  3,233
Total current assets  251,214  176,316
 Property and equipment, net  49,849  31,494
 Deferred income taxes  6,051  6,051
 Definite lived intangible assets, net   6,181  7,535
 Other long-term assets, net  2,371  2,833
   $ 315,666  $ 224,229
  . .
Liabilities and Stockholders' Deficit    
Current liabilities:    
Accounts payable  $ 62,112  $ 27,664
Accrued expenses  38,396  31,884
Revolving line of credit  62,894  29,052
Current portion of long-term debt, net of discount  1,860  1,860
Current portion of deferred rent  2,674  2,640
Total current liabilities  167,936  93,100
     
Long-term liabilities:    
Long-term debt, net of discount and current portion  154,577  229,272
Deferred rent credit, net of current portion  28,171  22,953
Total long-term liabilities  182,748  252,225
Total liabilities  350,684  345,325
     
Stockholders' deficit:    
Common stock  418  273
Restricted stock  --   57
Additional paid-in capital  75,744  365
Accumulated deficit  (111,180)  (121,791)
Total stockholders' deficit  (35,018)  (121,096)
   $ 315,666  $ 224,229
 
 
SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
     
  November 1, 2014 November 2, 2013
 CASH FLOWS FROM OPERATING ACTIVITIES     
 Net income   $ 10,611  $ 14,337
 Adjustments to reconcile net income to net cash used in operating activities:     
 Depreciation of property and equipment   5,183  3,290
 Amortization of discount on debt and deferred financing fees   977  6,607
 Amortization of definite lived intangible   1,354  1,065
 Net increase (decrease) in deferred rent credit   5,252  (65)
 Gain on asset dispositions   --  (112)
 Deferred income taxes   (403)  (1,038)
 Stock-based compensation   2,780  --
 Change in assets and liabilities, net of acquisition:     
 Accounts receivable, net   (57)  1,266
 Merchandise inventories   (69,268)  (75,499)
 Prepaid expenses and other   (1,338)  1,824
 Other long-term assets   --  49
 Accounts payable   34,448  17,051
 Accrued expenses   303  1,194
 Income taxes receivable and payable   (3,595)  (10,079)
 Net cash used in operating activities   (13,753)  (40,110)
     
 CASH FLOWS FROM INVESTING ACTIVITIES:     
 Purchase of property and equipment   (23,538)  (15,518)
 Purchase of business   --  (47,767)
 Proceeds from sale of fixed assets   --  124
 Net cash used in investing activities   (23,538)  (63,161)
     
 CASH FLOWS FROM FINANCING ACTIVITIES:     
 Net borrowings on line of credit   33,842  57,313
 Borrowings on term loan   --  235,000
 Issuance of common stock, net   73,393  --
 Dividends paid   --  (101,065)
 Increase in book overdraft   6,209  11,733
 Excess tax benefits from stock-based compensation arrangements   287  --
 Payment of withholdings on restricted stock units   (993)  --
 Payment of deferred financing costs   --  (3,960)
 Principal payments on unsecured note payable   --  (2,756)
 Principal payments on long-term debt   (75,063)  (125,275)
 Discount on term loan   --  (2,938)
 Net cash provided by financing activities   37,675  68,052
     
 Net change in cash and cash equivalents   384  (35,219)
 Cash and cash equivalents at beginning of year   1,354  36,515
 Cash and cash equivalents at end of year   $ 1,738  $ 1,296
 
 
SPORTSMAN'S WAREHOUSE HOLDINGS, INC.
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 Thirty Nine Weeks Ended
  November 1,
2014		 November 2,
2013		 November 1, 2014 November 2, 2013
Income from operations  $ 18,625  $ 16,983  $ 30,747  $ 43,649
IPO bonus (1)  --   --   2,200  -- 
Adjusted income from operations  $ 18,625  $ 16,983  $ 32,947  $ 43,649
         
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  $ 8,916  $ 2,222  $ 10,611  $ 14,337
IPO bonus (1)  --   --   2,200  -- 
Less tax benefit related to IPO bonus  --   --   (847)  -- 
Refinance related costs (2)  --   8,080  --   8,080
Less tax benefit related to refinance related costs  --   (3,200)  --   (3,200)
Adjusted net income   $ 8,916  $ 7,102  $ 11,964  $ 19,217
         
Denominator:        
Diluted weighted average shares outstanding  41,931  33,229  39,553  33,229
Initial public offering shares issuance (3)  --   8,683  2,476  8,683
Adjusted diluted weighted average shares outstanding  41,931  41,912  42,029  41,912
         
Earnings per share:        
Earnings per share  $ 0.21  $ 0.07  $ 0.27  $ 0.43
Impact of adjustments to numerator and denominator  --   0.10  0.01  0.03
Adjusted earnings per common share  $ 0.21  $ 0.17  $ 0.28  $ 0.46
         
Reconciliation of net income to adjusted EBITDA:        
Net income  $ 8,916  $ 2,222  $ 10,611  $ 14,337
Interest expense  4,122  13,302  13,487  19,895
Income tax expense  5,587  1,459  6,649  9,417
Depreciation and amortization  2,468  1,929  6,538  4,355
Stock-based compensation expense (4)  522  --   2,780  -- 
Pre-opening expenses (5)  230  234  2,359  1,071
IPO bonus (1)  --   --   2,200  -- 
Bankruptcy-related expenses (6)  --   --   --   55
Acquisition expenses (7)  --   7  --   2,331
Adjusted EBITDA  $ 21,845  $ 19,153  $ 44,624  $ 51,461
 
(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 $2.2 million in bonuses to our executive officers.
(2) Refinance related costs are one time expenses associated with the prepayment penalty and write off of the issuance discount and other deferred financing costs associated with the August 20, 2013 refinance of the Company's term loan.
(3) Assumes our IPO was effective as of February 3, 2013, the first day of our fiscal year 2013.
(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.
(6) On March 21, 2009, Sportsman's Warehouse Holdings, Inc. and its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, seeking to reorganize the business under the provisions of the Bankruptcy Code. The plan of reorganization under the Bankruptcy Code was confirmed by the United States Bankruptcy Court for the District of Delaware on July 30, 2009 and became effective when all material conditions of the plan of reorganization were satisfied on August 14, 2009. We incurred certain costs related to our restructuring and emergence from Chapter 11 bankruptcy and included a liability as part of the reorganization value at August 14, 2009, the date of emergence from bankruptcy. Bankruptcy-related expenses are those amounts that are greater than the initial estimated restructuring costs, whereas bankruptcy-related benefits are those amounts that are less than the initial estimated costs. They are expensed as incurred.
(7) Acquisition expenses for the 39 and 13 weeks ended November 2, 2013 relate to the costs associated with the acquisition in March 2013 of our ten previously operated stores in Montana, Oregon and Washington. 
CONTACT: Investor Contact:
         ICR, Inc.
         Farah Soi/Rachel Schacter
         (203) 682-8200
         investors@sportsmanswarehouse.com