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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): August 23, 2018  

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

DELAWARE001-3640139-1975614
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

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 August 23, 2018, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated August 23, 2018

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.
   
  
Date: August 23, 2018By: /s/ Kevan P. Talbot        
  Kevan P. Talbot
  Chief Financial Officer and Secretary
  

EdgarFiling

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Second Quarter 2018 Financial Results

MIDVALE, Utah, Aug. 23, 2018 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's" or the “Company”) (Nasdaq:SPWH) today announced financial results for the thirteen and twenty-six weeks ended August 4, 2018.

Jon Barker, Chief Executive Officer, stated, “We are pleased with our second quarter performance as our top line results were in line with expectations, including a comparable sales increase of 0.2%, and bottom line results were a penny above our outlook driven by our better than expected gross margins. We made good progress on the priorities we set at the start of the year including our omni-channel strategy of store growth and e-commerce investment, customer acquisition and engagement and merchandising assortment. These strategic growth initiatives combined with our convenient shopping experience, breadth of assortment and category expertise are fueling continued market share gains as we focus on enhancing our competitive positioning.”

For the thirteen weeks ended August 4, 2018:

For the twenty-six weeks ended August 4, 2018:

Balance sheet highlights as of August 4, 2018:

Third Quarter and Fiscal Year 2018 Outlook:

For the third quarter of fiscal year 2018, net sales are expected to be in the range of $220.0 million to $228.0 million based on a same store sales increase in the range of (3.0)% to 0.0% compared to the corresponding period of fiscal year 2017. Adjusted net income is expected to be in the range of $10.2 million to $11.5 million with adjusted diluted earnings per share of $0.24 to $0.27 on a weighted average of approximately 43.0 million estimated common shares outstanding.

For fiscal year 2018, net sales are expected to be in the range of $841.0 million to $857.0 million based on same store sales in the range of (1.0%) to 2.0% compared to fiscal year 2017. Adjusted net income is expected to be in the range of $24.4 million to $27.0 million with adjusted earnings per diluted share of $0.57 to $0.63 on a weighted average of approximately 43.0 million estimated common shares outstanding, when adjusted for the one-time expense incurred in connection with the announcement of the retirement of the Company’s former Chief Executive Officer, John Schaefer, in the first quarter of fiscal 2018 and the write-off of the debt discount and deferred financing fees relating to the Company’s old term loan incurred in the second quarter of fiscal 2018. (see “GAAP and Non-GAAP Measures”).

Conference Call Information:

A conference call to discuss second quarter and fiscal 2018 financial results is scheduled for today, August 23, 2018, at 8:30 AM 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, charges incurred in conjunction with the retirement of the Company’s former CEO, and deferred financing fees and debt discount associated with the Company’s prior term loan, as applicable. 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, charges incurred in conjunction with the retirement of the Company’s former CEO and deferred financing fees and debt discount associated with the Company’s prior term loan. We define Adjusted EBITDA as net income plus interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, 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, statements regarding our strategic initiatives and our outlook for the third quarter and full fiscal year 2018.  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 February 3, 2018 which was filed with the SEC on March 29, 2018 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.
Rachel Schacter
(203) 682-8200
investors@sportsmanswarehouse.com

 
 
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)
        
        
 For the Thirteen Weeks Ended  
        
 August 4, 2018 % of net
sales		 July 29, 2017 % of net
sales
        
Net sales$203,288  100.0 % $191,493  100.0 %
Cost of goods sold 131,011  64.4 %  122,875  64.2 %
Gross profit 72,277  35.6 %  68,618  35.8 %
        
Operating expenses:       
Selling, general and administrative expenses 59,088  29.1 %  54,383  28.4 %
Income from operations 13,189  6.5 %  14,235  7.4 %
Interest expense (4,334) (2.1%)  (3,436) (1.8%)
Income before income tax expense 8,855  4.4 %  10,799  5.6 %
Income tax expense (2,304) (1.1%)  (4,245) (2.2%)
Net Income$6,551  3.3 % $6,554  3.4 %
        
Earnings per share       
Basic$0.15    $0.15   
Diluted$0.15    $0.15   
        
Weighted average shares outstanding       
Basic 42,896     42,536   
Diluted 42,921     42,587   
 


 
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)
        
        
 For the Twenty-six Weeks Ended  
        
 August 4, 2018 % of net
sales		 July 29, 2017 % of net
sales
        
Net sales$383,347  100.0 % $348,391  100.0 %
Cost of goods sold 255,504  66.7 %  231,158  66.4 %
Gross profit 127,843  33.3 %  117,233  33.6 %
        
Operating expenses:       
Selling, general and administrative expenses 118,305  30.9 %  106,766  30.6 %
Income from operations 9,538  2.4 %  10,467  3.0 %
Interest expense (7,891) (2.1%)  (6,586) (1.9%)
Income before income tax expense 1,647  0.3 %  3,881  1.1 %
Income tax expense (925) (0.2%)  (1,835) (0.5%)
Net Income$722  0.1 % $2,046  0.6 %
        
Earnings per share       
Basic$0.02    $0.05   
Diluted$0.02    $0.05   
        
Weighted average shares outstanding       
Basic 42,812     42,406   
Diluted 42,837     42,457   
 


 
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.   
Consolidated Balance Sheets (Unaudited)   
(in thousands)   
    
    
Assets   
 August 4, 2018 February 3, 2018
Current assets:   
Cash$2,734  $1,769 
Accounts receivable, net 388   319 
Merchandise inventories 329,068   270,594 
Prepaid expenses and other 13,462   8,073 
Income tax receivable 1,090   - 
Total current assets 346,742   280,755 
Property and equipment, net 95,849   94,035 
Deferred income taxes 3,591   4,595 
Definite lived intangible assets, net -   276 
Total assets$446,182  $379,661 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$74,271  $36,788 
Accrued expenses 58,098   50,602 
Income taxes payable -   2,586 
Revolving line of credit 173,821   59,992 
Current portion of long-term debt, net of discount and debt issuance costs 7,915   990 
Current portion of deferred rent 4,750   4,593 
Total current liabilities 318,855   155,551 
    
Long-term liabilities:   
Long-term debt, net of discount, debt issuance costs, and current portion 31,675   132,349 
Deferred rent, noncurrent 40,942   41,963 
Total long-term liabilities 72,617   174,312 
Total liabilities 391,472   329,863 
    
Stockholders’ equity:   
Common stock 429   426 
Additional paid-in capital 83,750   82,197 
Accumulated deficit (29,469)  (32,825)
Total stockholders’ equity 54,710   49,798 
Total liabilites and stockholders' equity$446,182  $379,661 
 


    
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.   
Consolidated Statements of Cash Flows (Unaudited)   
(in thousands)   
    
 August 4, 2018 July 29, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net Income$722  $2,046 
Adjustments to reconcile net income to net    
cash used in operating activities:    
Depreciation and amortization 8,887   7,431 
Amortization and write-off of discount on debt and deferred financing fees 1,893   344 
Amortization of Intangible 276   903 
Change in deferred rent (865)  1,538 
Loss on asset dispositions -   (14)
Deferred income taxes 120   747 
Stock based compensation 2,054   1,052 
Change in assets and liabilities:    
Accounts receivable, net (69)  (30)
Merchandise inventory (58,474)  (55,940)
Prepaid expenses and other (1,804)  132 
Accounts payable 36,332   31,365 
Accrued expenses 3,420   (6,001)
Income taxes payable and receivable (3,676)  (1,696)
Net cash used in operating activities  (11,184)  (18,123)
    
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (10,585)  (31,864)
Proceeds from deemed sale-leaseback transactions -   503 
Proceeds from sale of property and equipment -   14 
Net cash used in investing activities  (10,585)  (31,347)
    
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net borrowings on line of credit 113,829   40,772 
Increase in book overdraft 5,860   10,105 
Proceeds from issuance of common stock per employee stock purchase plan 202   283 
Payment of withholdings on restricted stock units (699)  (639)
Borrowings on term loan 40,000   - 
Payment of deferred financing costs (1,331)  (341)
Principal payments on long-term debt (135,127)  (800)
Net cash provided by financing activities  22,734   49,380 
    
Net change in cash 965   (90)
Cash at beginning of year 1,769   1,911 
Cash at end of period$2,734  $1,821 
 


 
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 Twenty-Six Weeks Ended
 August 4, 2018 July 29, 2017 August 4, 2018 July 29, 2017
Income from operations$  13,189  $  14,235 $  9,538  $  10,467 
Professional fees (1)   -      -     -      1,744 
CEO Retirement (2)   -      -     2,647     -  
Adjusted income from operations$  13,189  $  14,235 $  12,185  $  12,211 
        
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$  6,551  $  6,554 $  722  $  2,046 
Professional fees (1)   -      -     -      1,744 
CEO Retirement (2)   -      -     2,647     -  
Deferred Financing Fee Write-off (3)   1,617     -     1,617     -  
Less tax benefit   (414)    -     (813)    (677)
Adjusted net income $  7,754  $  6,554 $  4,173  $  3,113 
        
Denominator:       
Diluted weighted average shares outstanding   42,921     42,587    42,837     42,457 
        
Reconciliation of income per share:       
Dilutive income per share$  0.15  $  0.15 $  0.02  $  0.05 
Impact of adjustments to numerator and denominator   0.03     -     0.08     0.02 
Adjusted diluted income per share$  0.18  $  0.15 $  0.10  $  0.07 
        
Reconciliation of net income to adjusted EBITDA:       
Net income$  6,551  $  6,554 $  722  $  2,046 
Interest expense   4,334     3,436    7,891     6,586 
Income tax expense   2,304     4,245    925     1,835 
Depreciation and amortization   4,500     4,393    9,163     8,334 
Stock-based compensation expense (4)   482     399    967     1,052 
Pre-opening expenses (5)   795     1,395    1,511     3,023 
Professional fees (1)   -      -     -      1,744 
CEO Retirement (2)   -      -     2,647     -  
Adjusted EBITDA$  18,966  $  20,422 $  23,826  $  24,620 
        
(1) Professional and other fees incurred in connection with the evaluation of a strategic acquisition.    
(2) Expenses incurred in conjunction with the retirement of our former CEO during Q1 2018.    
(3) Write-off of deferred financing fees and debt discount relating to our old term loan.    
(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 third quarter and 2018 full year guidance:       
        
 Estimated Q3 '18 Estimated FY '18
        
 Low High Low High
        
Numerator:       
Net income$10,200 $11,500 $20,949 $23,549
CEO Retirement(1) -  -  2,248  2,248
Deferred Finance Cost Write-off(2) -  -  1,203  1,203
Adjusted net income$10,200 $11,500 $24,400 $27,000
        
Denominator:       
Diluted weighted average shares outstanding 43,000  43,000  43,000  43,000
        
Reconciliation of earnings per share:       
Diluted earnings per share$0.24 $0.27 $0.49 $0.55
Impact of adjustments to numerator and denominator -  -  0.08  0.08
Adjusted diluted earnings per share$0.24 $0.27 $0.57 $0.63
        
(1) Expenses incurred in conjunction with the retirement of our former CEO during Q1 2018, net of tax
(2) Write-off of deferred financing fees associated with the amendment and restatement of our revolving line of credit and payoff of our term loan, net of tax