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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): March 25, 2019  

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 March 28, 2019, Sportsman’s Warehouse Holdings, Inc. (the “Company”) issued a press release reporting its results of operations for the fourth quarter and full year ended February 2, 2019, a copy of which is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02 and the related information in Exhibit 99.1 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 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 25, 2019, Kevan P. Talbot notified the Company that he would be stepping down in the coming months as Chief Financial Officer and from all other positions with the Company to spend more time with his family before pursuing other interests. The Company has initiated a search to identify and recruit a new Chief Financial Officer. Mr. Talbot is expected to continue to serve as Chief Financial Officer to assist in the search for a replacement and to ensure a smooth transition of his duties. 

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated March 28, 2019.

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: March 28, 2019By: /s/ Kevan P. Talbot        
  Kevan P. Talbot
  Secretary and Chief Financial Officer
  

EdgarFiling

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Fourth Quarter and Fiscal Year 2018 Financial Results

MIDVALE, Utah, March 28, 2019 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's" or the “Company”) (Nasdaq:SPWH) today announced financial results for the thirteen and fifty-two weeks ended February 2, 2019.

Jon Barker, Chief Executive Officer, stated, “We are pleased with our solid end to the year as our fourth quarter results were in-line with expectations on the top and bottom line. Our fourth quarter same store sales increase of 3.1% compared to the fourth quarter of fiscal 2017 exceeded our expectations and was driven by strong performance from our existing stores and e-commerce platform. We believe these results are a testament that the investments we’ve made throughout the year are gaining traction, including the enhancements to our omni-channel capabilities, increasing customer acquisition and engagement and offering a differentiated merchandising assortment in fiscal 2018.”

Mr. Barker continued, “As we look to fiscal 2019, we will continue to invest in key areas across the business to further differentiate Sportsman’s Warehouse and better enable us to both strengthen our relationship with our existing customers as well as capitalize on market share opportunities to draw new customers into the fold. Similar to 2018, we will continue to take a disciplined approach as we focus on further strengthening our market position in 2019 and beyond.”

Fiscal Year

Fiscal year 2018 contained 52 weeks of operations and ended on February 2, 2019. Fiscal year 2017 contained 53 weeks of operations ended on February 3, 2018. We refer to the extra week of operations as the “53rd week.” Due to the 53rd week in fiscal year 2017, all references to same store sales for the fourth quarter and fiscal year 2018 are compared to the shifted period for the comparable period for fiscal year 2017.

For the thirteen weeks ended February 2, 2019:

For the fifty-two weeks ended February 2, 2019:

Balance sheet highlights as of February 2, 2019:

First Quarter and Fiscal Year 2019 Outlook:

For the first quarter of fiscal year 2019, net sales are expected to be in the range of $174.0 million to $180.0 million based on a change in same store sales in the range of (2.0%) to (5.0%) compared to the corresponding period of fiscal year 2018. Net loss is expected to be in the range of ($3.5) million to ($4.8) million with diluted loss per share of ($0.08) to ($0.11) on a weighted average of approximately 43.0 million estimated common shares outstanding.

For fiscal year 2019, net sales are expected to be in the range of $860.0 million to $890.0 million based on a change in same store sales in the range of (1.0%) to 2.0% compared to fiscal year 2018. Net income is expected to be in the range of $22.5 million to $27.5 million with earnings per diluted share of $0.52 to $0.64 on a weighted average of approximately 43.2 million estimated common shares outstanding.

CFO Transition:

The Company also today announced that Kevan Talbot, the Company’s Chief Financial Officer, will be leaving the Company in the coming months to spend more time with his family before pursuing other interests. The Company has launched a search to identify and recruit a new CFO, and Mr. Talbot is expected to continue to serve as Chief Financial Officer to assist in the search for a replacement and to ensure a smooth transition of his duties.

“On behalf of the Sportsman’s Warehouse Board of Directors and management team, I want to express my gratitude for Kevan’s significant contributions during his 17 year tenure with the company,” said Jon Barker, Chief Executive Officer. “In his ten years as CFO, not only did he help take the company public, but he has been instrumental in our relationships with the investment community, has driven improvements in our capital structure and has built a strong and capable finance team. We wish him well in his future endeavors.”

Conference Call Information:

A conference call to discuss fourth quarter and fiscal 2018 financial results is scheduled for today, March 28, 2019, 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.sportsmans.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, write-off of an IT-related asset, write-off of deferred financing fees and debt discount associated with the Company’s prior term loan, and non-recurring tax benefit adjustments, 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, write-off of an IT-related asset, write-off of deferred financing fees and debt discount associated with the Company’s prior term loan, and non-recurring tax benefit adjustments. 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 first quarter and full fiscal year 2019.  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 ability to attract and integrate a new Chief Financial Officer; 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 2, 2019 which was filed with the SEC on March 29, 2019 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 an 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.sportsmans.com.

        
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)
        
        
 For the Thirteen/Fourteen Weeks Ended
        
 February 2, 2019 % of net
sales		 February 3, 2018 % of net
sales
        
Net sales$242,683  100.0 % $243,165  100.0 %
Cost of goods sold 163,177  67.2 %  163,501  67.2 %
Gross profit 79,506  32.8 %  79,664  32.8 %
        
Operating expenses:       
Selling, general and administrative expenses 62,538  25.8 %  63,083  25.9 %
Income from operations 16,968  7.0 %  16,581  6.9 %
Interest expense (2,682) (1.1%)  (3,658) (1.5%)
Income before income tax expense 14,286  5.9 %  12,923  5.4 %
Income tax expense (3,657) (1.5%)  (7,035) (2.9%)
Net Income$10,629  4.4 % $5,888  2.5 %
        
Earnings per share       
Basic$0.25    $0.14   
Diluted$0.25    $0.14   
        
Weighted average shares outstanding       
Basic 42,953     42,592   
Diluted 43,079     42,699   
            

 

        
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except share and per share data)
        
        
 For the Fifty-two/Fifty-three Weeks Ended 
        
 February 2, 2019 % of net
sales		 February 3, 2018 % of net
sales
        
Net sales$849,129  100.0 % $809,671  100.0 %
Cost of goods sold 564,199  66.4 %  535,811  66.2 %
Gross profit 284,930  33.6 %  273,860  33.8 %
        
Operating expenses:       
Selling, general and administrative expenses 240,911  28.4 %  227,292  28.1 %
Income from operations 44,019  5.2 %  46,568  5.7 %
Interest expense (13,206) (1.6%)  (13,738) (1.7%)
Income before income tax expense 30,813  3.6 %  32,830  4.0 %
Income tax expense (7,063) (0.8%)  (15,088) (1.9%)
Net Income$23,750  2.8 % $17,742  2.1 %
        
Earnings per share       
Basic$0.55    $0.42   
Diluted$0.55    $0.42   
        
Weighted average shares outstanding       
Basic 42,878     42,496   
Diluted 42,979     42,522   
            

 

    
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)
    
    
Assets   
 February 2, 2019 February 3, 2018
Current assets:   
Cash$1,547  $1,769 
Accounts receivable, net 249   319 
Merchandise inventories 276,600   270,594 
Prepaid expenses and other 15,174   8,073 
Total current assets 293,570   280,755 
Property and equipment, net 92,084   94,035 
Deferred income taxes 2,997   4,595 
Definite lived intangible assets, net 246   276 
Total assets$388,897  $379,661 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$24,953  $36,788 
Accrued expenses 56,384   50,602 
Income taxes payable 1,838   2,586 
Revolving line of credit 144,306   59,992 
Current portion of long-term debt, net of discount and debt issuance costs 7,915   990 
Current portion of deferred rent 5,270   4,593 
Total current liabilities 240,666   155,551 
    
Long-term liabilities:   
Long-term debt, net of discount, debt issuance costs, and current portion 27,717   132,349 
Deferred rent, noncurrent 41,854   41,963 
Total long-term liabilities 69,571   174,312 
Total liabilities 310,237   329,863 
    
Stockholders’ equity:   
Common stock 430   426 
Additional paid-in capital 84,671   82,197 
Accumulated deficit (6,441)  (32,825)
Total stockholders’ equity 78,660   49,798 
Total liabilities and stockholders' equity$388,897  $379,661 
    

 

     
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
     
  February 2, 2019 February 3, 2018
CASH FLOWS FROM OPERATING ACTIVITIES     
Net Income $23,750  $17,742 
Adjustments to reconcile net income to net     
cash provided by operating activities:     
Depreciation and amortization  17,961   15,864 
Amortization and write-off of discount on debt and deferred financing fees 2,043   708 
Amortization of Intangible  289   1,842 
Change in deferred rent  568   8,098 
Loss (gain) on asset dispositions  30   516 
Deferred income taxes  714   502 
Stock based compensation  2,829   2,294 
Change in assets and liabilities:     
Accounts receivable, net  70   92 
Merchandise inventory  (6,006)  (24,305)
Prepaid expenses and other  (5,339)  (681)
Accounts payable  (11,726)  7,536 
Accrued expenses  7,739   (1,040)
Income taxes payable and receivable  (749)  1,607 
Net cash provided by operating activities   32,173   30,775 
     
CASH FLOWS FROM INVESTING ACTIVITIES:     
Purchase of property and equipment  (17,936)  (41,172)
Acquisition of intangible asset  (259)  - 
Proceeds from deemed sale-leaseback transactions  1,717   9,022 
Proceeds from sale of property and equipment  226   14 
Net cash used in investing activities   (16,252)  (32,136)
     
CASH FLOWS FROM FINANCING ACTIVITIES:     
Net borrowings on line of credit  84,314   (980)
Increase in book overdraft  353   4,589 
Proceeds from issuance of common stock per employee stock purchase plan 351   396 
Payment of withholdings on restricted stock units  (703)  (635)
Borrowings on term loan  40,000   - 
Payment of deferred financing costs  (1,331)  (551)
Principal payments on long-term debt  (139,127)  (1,600)
Net cash (used in) provided by financing activities   (16,143)  1,219 
     
Net change in cash  (222)  (142)
Cash at beginning of year  1,769   1,911 
Cash at end of period $1,547  $1,769 
     

 

         
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/Fourteen Weeks Ended For the Fifty-two/Fifty-three Weeks Ended
  February 2, 2019 February 3, 2018 February 2, 2019 February 3, 2018
Income from operations$16,968  $16,581  $44,019  $46,568 
Professional fees (1) -   -   -   1,744 
CEO retirement (2) -   -   2,647   - 
Asset Write-off (3) -   516   -   516 
Adjusted income from operations$16,968  $17,097  $46,666  $48,828 
         
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$10,629  $5,888  $23,750  $17,742 
 Professional fees (1) -   -   -   1,744 
 CEO retirement (2) -   -   2,647   - 
 Deferred financing fee write-off (4) -   -   1,617   - 
 Non-recurring tax benefit (5) -   -   (1,322)  - 
 Asset Write-Off (3) -   516   -   516 
 Impact of Tax Reform (6) -   2,153   -   2,153 
 Less tax benefit -   (194)  (813)  (850)
 Adjusted net income$10,629  $8,363  $25,879  $21,305 
         
Denominator:       
 Diluted weighted average shares outstanding 43,079   42,699   42,979   42,522 
         
Reconciliation of income per share:       
Dilutive income per share$0.25  $0.14  $0.55  $0.42 
Impact of adjustments to numerator -   0.06   0.05   0.08 
Adjusted diluted income per share$0.25  $0.20  $0.60  $0.50 
         
Reconciliation of net income to adjusted EBITDA:       
Net income$10,629  $5,888  $23,750  $17,742 
Interest expense 2,682   3,658   13,206   13,738 
Income tax expense 3,657   7,035   7,063   15,088 
Depreciation and amortization 4,650   4,800   18,250   17,707 
Stock-based compensation expense (7) 391   854   1,742   2,294 
Pre-opening expenses (8) 7   279   1,838   3,970 
Professional fees (1) -   -   -   1,744 
CEO retirement (2) -   -   2,647   - 
Asset Write-off (3) -   516     516 
Adjusted EBITDA$22,016  $23,030  $68,496  $72,799 
         
(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 IT related asset not yet placed in-service and deemed to be abandoned
(4) Write-off of deferred financing fees and debt discount relating to our old term loan.
(5) Non-recurring tax benefit recognized due to our return to provision adjustments recorded in conjunction with the filing of our 2017 tax return.
(6) Write-down of deferred tax assets in relation to the Tax Cuts and Jobs Act passed on December 22, 2017.
(7) 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.
(8) 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.
 

Investor Contact:
ICR, Inc.
Rachel Schacter
(203) 682-8200
investors@sportsmanswarehouse.com