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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): November 16, 2017

 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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ X ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ X ]

 

Item 2.02. Results of Operations and Financial Condition.

     On November 16, 2017, Sportsman’s Warehouse Holdings, Inc. (the “Company”) issued a press release reporting its results of operations for the financial results for the thirteen and thirty-nine weeks ended October 28, 2017.  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.
  
99.1Press release of Sportsman’s Warehouse Holdings, Inc., dated November 16, 2017.

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: November 16, 2017 Kevan P. Talbot
   Chief Financial Officer and Secretary
     

EdgarFiling

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Third Quarter 2017 Financial Results

MIDVALE, Utah, Nov. 16, 2017 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's" or the “Company”) (Nasdaq:SPWH) today announced financial results for the thirteen and thirty-nine weeks ended October 28, 2017.

For the thirteen weeks ended October 28, 2017:

John Schaefer, Chief Executive Officer, stated, “Our third quarter results were largely in line with our expectations and reflected continued softness in firearms and ammunition as well as a shift in the timing of a planned third quarter new store opening into the fourth quarter. We again navigated a difficult operating environment but were pleased to deliver gross margin expansion of 110 basis points, pay down debt for a quarter-ending leverage ratio of 2.78x, reduce inventory by 8.7% on a per store basis and make continued progress against our key strategic priorities as we focus on driving further market share gains.”

Mr. Schaefer added, “As we look to the remainder of the year, we are modifying our fourth quarter outlook. While the difficult firearm comparisons that we anniversaried through the first three quarters of fiscal year 2017 will be behind us, we expect a heightened promotional environment which we are reflecting in our sales and margin outlook. Our differentiating attributes of everyday low pricing, unparalleled breadth of product offering and knowledgeable customer service position us well as we continue to navigate these headwinds and remain focused on delivering sustainable long-term growth.”

For the thirty-nine weeks ended October 28, 2017:

Balance sheet highlights as of October 28, 2017:                                                               

Fourth Quarter and Fiscal Year 2017 Outlook:

For the fourth quarter of fiscal year 2017, net sales are expected to be in the range of $240.0 million to $245.0 million based on a same store sales decline in the range of 4.0% to 6.0% compared to the corresponding period of fiscal year 2016. Net income is expected to be in the range of $11.0 million to $12.4 million with diluted earnings per share of $0.26 to $0.29 on a weighted average of approximately 42.6 million estimated common shares outstanding.

For fiscal year 2017, net sales are expected to be in the range of $807.0 million to $812.0 million based on a same store sales decline in the range of 6.0% to 7.0% compared to fiscal year 2016. Adjusted net income is expected to be in the range of $23.9 million to $25.3 million with adjusted earnings per diluted share of $0.56 to $0.59 on a weighted average of approximately 42.6 million estimated common shares outstanding, when adjusted for the professional fees and other fees incurred in connection with the evaluation of a strategic acquisition in the first quarter of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).

The Company's fiscal year 2017 will include 53 weeks, while fiscal year 2016 included 52 weeks. The estimated fiscal year 2017 impact of the additional week is roughly $9.0 to $11.0 million in revenue and approximately $0.01 on earnings per share. There is no impact on expected same store sales as those are presented on a 52 week comparative basis.

Conference Call Information:

A conference call to discuss third quarter 2017 financial results is scheduled for today, November 16, 2017, 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 earnings per share and adjusted EBITDA. We defined adjusted income from operations and adjusted net income as income from operations and net income, respectively, in each case, plus professional and other fees incurred in connection with the evaluation of a strategic acquisition, secondary offering expenses, and prior year tax credits.  Adjusted diluted earnings per share is diluted earnings per share excluding the impact of professional and other fees incurred in connection with the evaluation of a strategic acquisition, secondary offering expenses and prior year tax credits. We define Adjusted EBITDA as net income plus interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, pre-opening expenses, secondary offering expenses, professional fees, and other gains, losses and expenses that we do not believe are indicative of our ongoing expenses. 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 the Company 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, but are not limited to, our outlook for the fourth quarter and full fiscal year 2017.  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 the Company’s Form 10-K for the fiscal year ended January 28, 2017 which was filed with the SEC on March 24, 2017 and the Company’s 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 quality, brand name 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.

Investor Contact:
ICR, Inc.
Farah Soi/Rachel Schacter
(203) 682-8200
investors@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   
                 
 October 28, 2017 % of net
sales		 October 29, 2016 % of net
sales		 October 28, 2017 % of net
sales		 October 29, 2016 % of net
sales		 
                 
Net sales$218,115  100.0 % $217,161  100.0 % $566,506  100.0 % $558,580  100.0 % 
Cost of goods sold 141,152  64.7 %  142,896  65.8 %  372,310  65.7 %  369,658  66.2 % 
Gross profit 76,963  35.3 %  74,265  34.2 %  194,196  34.3 %  188,922  33.8 % 
                 
Operating expenses:                
Selling, general and administrative expenses 57,443  26.3 %  53,719  24.7 %  164,207  29.0 %  149,348  26.7 % 
Income from operations 19,520  9.0 %  20,546  9.5 %  29,989  5.3 %  39,574  7.1 % 
Interest expense (3,494)  (1.5%)  (3,402)  (1.5%)  (10,081)  (1.8%)  (10,132)  (1.8%) 
Income before income tax expense 16,026  7.5 %  17,144  8.0 %  19,908  3.5 %  29,442  5.3 % 
Income tax expense (6,218)  (2.9%)  (6,630)  (3.1%)  (8,053)  (1.4%)  (10,313)  (1.8%) 
Net income$9,808  4.6 % $10,514  4.9 % $11,855  2.1 % $19,129  3.5 % 
                 
Earnings per share                
Basic$0.23    $0.25    $0.28    $0.45    
Diluted$0.23    $0.25    $0.28    $0.45    
                 
Weighted average shares outstanding                
Basic 42,576     42,245     42,464     42,165    
Diluted 42,611     42,558     42,501     42,465    
                 

 

     
SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Balance Sheets (Unaudited) 
(in thousands) 
     
     
Assets    
 October 28, 2017 January 28, 2017 
Current assets:    
Cash and cash equivalents$2,155  $1,911  
Accounts receivable, net 404   411  
Merchandise inventories 318,323   246,289  
Prepaid expenses and other 4,005   7,313  
Total current assets 324,887   255,924  
Property and equipment, net 98,890   83,109  
Deferred income taxes 4,485   5,097  
Definite lived intangible assets, net 763   2,118  
Total assets$429,025  $346,248  
     
Liabilities and Stockholders’ Equity    
Current liabilities:    
Accounts payable$69,453  $31,549  
Accrued expenses 54,641   49,586  
Income taxes payable 3,210   979  
Revolving line of credit 78,454   60,972  
Current portion of long-term debt, net of discount and debt issuance costs 935   983  
Current portion of deferred rent 3,949   3,150  
Total current liabilities 210,642   147,219  
     
Long-term liabilities:    
Long-term debt, net of discount, debt issuance costs, and current portion 132,656   133,721  
Deferred rent credit, net of current portion 42,793   35,307  
Total long-term liabilities 175,449   169,028  
Total liabilities 386,091   316,247  
     
Stockholders’ equity:    
Common stock 426   422  
Additional paid-in capital 81,224   80,146  
Accumulated deficit (38,716)   (50,567)  
Total stockholders’ equity 42,934   30,001  
Total liabilites and stockholders' equity$429,025  $346,248  
     

 

     
SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Statements of Cash Flows (Unaudited) 
(in thousands) 
     
  October 28, 2017 October 29, 2016
CASH FLOWS FROM OPERATING ACTIVITIES     
Net income $11,855  $19,129 
Adjustments to reconcile net income to net     
cash provided by (used in) operating activities:     
Depreciation and amortization  11,551   8,808 
(Gain) on asset disposition  (14)  - 
Amortization of discount on debt and deferred financing fees  534   932 
Amortization of Intangible  1,355   1,354 
Change in deferred rent  8,284   5,015 
Deferred taxes  612   362 
Excess tax benefits from stock-based compensation arrangements  -   (449)
Stock based compensation  1,437   2,463 
Change in assets and liabilities:     
Accounts receivable, net  7   - 
Merchandise inventory  (72,037)  (86,250)
Prepaid expenses and other  3,202   4,492 
Accounts payable  40,638   24,709 
Accrued expenses  (2,078)  4,346 
Income taxes  2,231   (54)
Net cash (used in) provided by operating activities   7,577   (15,143)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment  (39,220)  (30,757)
Proceeds from sale of property and equipment  14   - 
Proceeds from sale-leaseback transactions  6,130   2,741 
Net cash used in investing activities   (33,076)  (28,016)
     
CASH FLOWS FROM FINANCING ACTIVITIES:     
Net borrowings on line of credit  17,482   60,050 
Increase in book overdraft  10,157   5,535 
Payments of deferred financing fees  (341)  - 
Payment of withholdings on restricted stock units  (638)  (1,228)
Principal payments on long-term debt  (1,200)  (20,874)
Issuance of common stock per employee stock purchase plan  283   258 
Net cash provided by financing activities   25,743   43,741 
     
Net change in cash and cash equivalents  244   582 
Cash and cash equivalents at beginning of year  1,911   2,109 
Cash and cash equivalents at end of period $2,155  $2,691 
     

 

          
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 
          
  October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 
Income from operations$19,520 $20,546 $29,989  $39,574  
Secondary offering expenses (1) -  -  -   143  
Professional fees (2) -  -  1,744   -  
Adjusted income from operations$19,520 $20,546 $31,733  $39,717  
          
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$9,808 $10,514 $11,855  $19,129  
 Secondary offering expenses (1) -  -  -   143  
 Prior year tax credits (3) -  -  -   (602) 
 Professional fees (2) -  -  1,744   -  
 Less tax benefit related to professional fees -  -  (677)  -  
 Adjusted net income$9,808 $10,514 $12,922  $18,670  
          
Denominator:        
 Diluted weighted average shares outstanding 42,611  42,558  42,501   42,465  
          
Reconciliation of earnings per share:        
Dilutive earnings per share$0.23 $0.25 $0.28  $0.45  
Impact of adjustments to numerator and denominator -  -  0.02   (0.01) 
Adjusted diluted earnings per share$0.23 $0.25 $0.30  $0.44  
          
Reconciliation of net income to adjusted EBITDA:        
Net income$9,808 $10,514 $11,855  $19,129  
Interest expense 3,494  3,402  10,081   10,132  
Income tax expense 6,218  6,630  8,053   10,313  
Depreciation and amortization 4,572  3,696  12,906   10,162  
Stock-based compensation expense (4) 388  906  1,437   2,463  
Pre-opening expenses (5) 667  985  3,691   3,509  
Secondary offering expenses (1) -  -  -   143  
Professional Fees (2) -  -  1,744   -  
Adjusted EBITDA$25,147 $26,133 $49,767  $55,851  
          
(1) Expenses paid by us in connection with a secondary offering of our common stock by affiliates of Seidler Equity Partners III, L.P. 
(2) Professional and other fees incurred in connection with the evaluation of a strategic acquisition.
 
(3) Tax credits recognized in the year that were not previously taken in prior years.
 
(4) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2013 Performance
Incentive Plan and Employee Stock Purchase 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.
 
          

 

         
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
GAAP and Non-GAAP Measures (Unaudited)
(in thousands, except per share data)
         
Reconciliation of fourth quarter and 2017 full year guidance:       
         
  Estimated Q4 '17 Estimated FY '17
         
  Low High Low High
         
Numerator:       
 Net income$11,000 $12,400 $22,850 $24,250
 Professional Fees (1) -  -  1,067  1,067
 Adjusted net income$11,000 $12,400 $23,917 $25,317
         
Denominator:       
 Diluted weighted average shares outstanding 42,600  42,600  42,600  42,600
         
Reconciliation of earnings per share:       
Diluted earnings per share$0.26 $0.29 $0.54 $0.57
Impact of adjustments to numerator and denominator -  -  0.03  0.03
Adjusted diluted earnings per share$0.26 $0.29 $0.56 $0.59
         
(1) Professional and other fees incurred in connection with the evaluation of a strategic acquisition.