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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 28, 2019

 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) 

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $.01 par valueSPWHThe Nasdaq Stock Market LLC

 

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 28, 2019, Sportsman’s Warehouse Holdings, Inc. (the “Company”) issued a press release reporting its results of operations for the second quarter of fiscal year 2019 ended August 3, 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 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated August 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.
    
    
  By:/s/ Robert K. Julian
 Date: August 28, 2019 Robert K. Julian
   Secretary and Chief Financial Officer
     

EdgarFiling

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Second Quarter 2019 Financial Results

MIDVALE, Utah, Aug. 28, 2019 (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 3, 2019.

Jon Barker, Chief Executive Officer, stated, “We are pleased with our second quarter results, which were above our expectations on the top line, including a comparable store sales increase of 1.7%, and towards the high end of our outlook on the bottom line. This performance is a testament to our strong competitive positioning, as we remain one of few national retailers dedicated to outdoor sports, including hunting, with an expansive breadth of assortment at everyday low prices and a high level of customer service. This, combined with the ongoing success of our merchandising initiatives, customer acquisition and engagement focus, and omni-channel strategy, is driving our outperformance relative to the industry.”

Mr. Barker continued, “We will continue to focus on our strategic growth priorities in the second half of the year with an increased focus on innovation through various initiatives including a small format concept test shop, expansion of our partnerships with select licensed firearms dealers across the country, and the continued roll out of our used firearm program. We expect continued progress against these strategic priorities which, combined with our omni-channel focus, will reinforce our competitive positioning and drive market share gains.”

For the thirteen weeks ended August 3, 2019:

For the twenty-six weeks ended August 3, 2019:

Balance sheet highlights as of August 3, 2019:                                                             

Third Quarter and Fiscal Year 2019 Outlook:

For the third quarter of fiscal year 2019, net sales are expected to be in the range of $231.0 million to $239.0 million based on a change in same store sales in the range of 1.5% to 4.5% compared to the corresponding period of fiscal year 2018. Net income is expected to be in the range of $9.0 million to $11.7 million with diluted earnings per share of $0.21 to $0.27 on a weighted average of approximately 43.2 million estimated common shares outstanding.

For fiscal year 2019, net sales are expected to be in the range of $866.0 million to $884.0 million based on a change in same store sales in the range of 0.0% to 2.0% compared to fiscal year 2018. Adjusted net income is expected to be in the range of $20.8 million to $26.0 million with adjusted earnings per diluted share of $0.48 to $0.60 on a weighted average of approximately 43.2 million estimated common shares outstanding, when adjusted for the executive transition costs incurred in the first half of fiscal 2019 relating to the transition of the Company’s CFO and the recruitment and hiring of various key members of the senior management team (see “GAAP and Non-GAAP Measures”).

Conference Call Information:

A conference call to discuss second quarter fiscal 2019 financial results is scheduled for today, August 28, 2019, 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.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 define adjusted income from operations and adjusted net income as income from operations and net income, respectively, in each case, plus expenses incurred relating to the transition of our CFO and the recruitment and hiring of various other key members of management, charges incurred in conjunction with the retirement of the Company’s former CEO and the write-off of deferred financing fees and debt discount associated with the Company’s prior term loan refinanced in the second fiscal quarter of 2018, as applicable. Adjusted diluted earnings per share is diluted earnings per share excluding the impact of expenses incurred relating to the transition of our CFO and the recruitment and hiring of  other key members of management, charges incurred in conjunction with the retirement of the Company’s former CEO and the write-off of deferred financing fees and debt discount associated with the Company’s prior term loan refinanced in the second fiscal quarter of 2018, as applicable. We define Adjusted EBITDA as net income plus interest expense, income tax (benefit) expense, depreciation and amortization, stock-based compensation expense, pre-opening expenses, 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, except for adjusted interest expense which is reconciled above. 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 earnings 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 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 integrate its 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 outstanding gear and exceptional service to inspire outdoor memories.

For press releases and certain additional information about the Company, visit the Investor Relations section of the Company's website at www.sportsmans.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 per share data)
        
        
 For the Thirteen Weeks Ended
        
 August 3, 2019 % of net
sales		 August 4, 2018 % of net
sales
        
Net sales$211,766 100.0 % $203,288 100.0 %
Cost of goods sold 138,544 65.4 %  131,011 64.4 %
Gross profit 73,222 34.6 %  72,277 35.6 %
        
Operating expenses:       
Selling, general and administrative expenses 63,460 30.0 %  59,088 29.1 %
Income from operations 9,762 4.6 %  13,189 6.5 %
Interest expense 2,353 1.1 %  4,334 2.1 %
Income before income tax expense 7,409 3.5 %  8,855 4.4 %
Income tax expense 1,911 0.9 %  2,304 1.1 %
Net income$5,498 2.6 % $6,551 3.3 %
        
Earnings per share       
Basic$0.13   $0.15  
Diluted$0.13   $0.15  
        
Weighted average shares outstanding       
Basic 43,130    42,896  
Diluted 43,155    42,921  
        


SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
        
        
 For the Twenty-six Weeks Ended
        
 August 3, 2019 % of net
sales		 August 4, 2018 % of net
sales
        
Net sales$385,783  100.0 % $383,347 100.0 %
Cost of goods sold 258,388  67.0 %  255,504 66.7 %
Gross profit 127,395  33.0 %  127,843 33.3 %
        
Operating expenses:       
Selling, general and administrative expenses 122,990  31.9 %  118,305 30.9 %
Income from operations 4,405  1.1 %  9,538 2.4 %
Interest expense 4,458  1.2 %  7,891 2.1 %
(Loss) income before income tax expense (53) (0.1%)  1,647 0.3 %
Income tax (benefit) expense (92) 0.0 %  925 0.2 %
Net Income$39  (0.1%) $722 0.1 %
        
Earnings per share       
Basic$0.00    $0.02  
Diluted$0.00    $0.02  
        
Weighted average shares outstanding       
Basic 43,065     42,812  
Diluted 43,090     42,837  
        


SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Consolidated Balance Sheets (Unaudited)
(in thousands)
    
    
Assets   
 August 3, 2019 February 2, 2019
Current assets:   
Cash$1,475 $1,547 
Accounts receivable, net 239  249 
Merchandise inventories 289,311  276,600 
Income tax receivable 1,080  - 
Prepaid expenses and other 10,653  15,174 
Total current assets 302,758  293,570 
Operating lease right of use asset 183,486  - 
Property and equipment, net 97,984  92,084 
Deferred income taxes -  2,997 
Definite lived intangible assets, net 233  246 
Total assets$584,461 $388,897 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$64,890 $24,953 
Accrued expenses 58,051  56,384 
Operating lease liability, current 32,483  - 
Income taxes payable -  1,838 
Revolving line of credit 127,126  144,306 
Current portion of long-term debt, net of discount and debt issuance costs 7,915  7,915 
Current portion of deferred rent -  5,270 
Total current liabilities 290,465  240,666 
    
Long-term liabilities:   
Long-term debt, net of discount, debt issuance costs, and current portion 23,760  27,717 
Deferred income taxes 412  - 
Operating lease liability, noncurrent 181,117  - 
Deferred rent, noncurrent -  41,854 
Total long-term liabilities 205,289  69,571 
Total liabilities 495,754  310,237 
    
Stockholders’ equity:   
Common stock 432  430 
Additional paid-in capital 85,422  84,671 
Accumulated earnings (deficit) 2,853  (6,441)
Total stockholders’ equity 88,707  78,660 
Total liabilities and stockholders' equity$584,461 $388,897 
    


SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
     
  August 3, 2019 August 4, 2018
CASH FLOWS FROM OPERATING ACTIVITIES     
Net Income $39  $722 
Adjustments to reconcile net income to net     
cash provided by (used in) operating activities:     
Depreciation and amortization  9,245   8,887 
Amortization and write-off of discount on debt and deferred financing fees 170   1,893 
Amortization of Intangible  13   276 
Change in deferred rent  -   (865)
Gain on asset dispositions  (311)  - 
Noncash lease expense  14,895   - 
Deferred income taxes  307   120 
Stock based compensation  948   2,054 
Change in assets and liabilities:     
Accounts receivable, net  10   (69)
Operating lease liabilities  (15,788)  - 
Merchandise inventory  (12,710)  (58,474)
Prepaid expenses and other  634   (1,804)
Accounts payable  39,040   36,332 
Accrued expenses  1,860   3,420 
Income taxes payable and receivable  (2,918)  (3,676)
Net cash provided by (used in) operating activities   35,434   (11,184)
     
CASH FLOWS FROM INVESTING ACTIVITIES:     
Purchase of property and equipment  (14,761)  (10,585)
Proceeds from sale of property and equipment  311   - 
Net cash used in investing activities   (14,450)  (10,585)
     
CASH FLOWS FROM FINANCING ACTIVITIES:     
Net (payments) borrowings on line of credit  (17,180)  113,829 
Increase in book overdraft  319   5,860 
Proceeds from issuance of common stock per employee stock purchase plan 174   202 
Payment of withholdings on restricted stock units  (369)  (699)
Borrowings on term loan  -   40,000 
Payment of deferred financing costs  -   (1,331)
Principal payments on long-term debt  (4,000)  (135,127)
Net cash (used in) provided by financing activities   (21,056)  22,734 
     
Net change in cash  (72)  965 
Cash at beginning of year  1,547   1,769 
Cash at end of period $1,475  $2,734 
     


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 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018
Income from operations$  9,762  $  13,189  $  4,405  $  9,538 
Executive transition costs (1)   266     -      623     -  
CEO retirement (2)   -      -      -      2,647 
Adjusted income from operations$  10,028  $  13,189  $  5,028  $  12,185 
         
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$  5,498  $  6,551  $  39  $  722 
 Executive transition costs (1)   266     -      623     -  
 CEO retirement (2)   -      -      -      2,647 
 Deferred financing fee write-off (3)   -      1,617     -      1,617 
 Less tax benefit   (69)    (414)    (161)    (813)
 Adjusted net income$  5,695  $  7,754  $  501  $  4,173 
         
Denominator:       
 Diluted weighted average shares outstanding   43,155     42,921     43,090     42,837 
         
Reconciliation of earnings per share:       
Dilutive earnings per share$  0.13  $  0.15  $  -   $  0.02 
Impact of adjustments to numerator and denominator   -      0.03     0.01     0.08 
Adjusted diluted earnings per share$  0.13  $  0.18  $  0.01  $  0.10 
         
Reconciliation of net income to adjusted EBITDA:       
Net income$  5,498  $  6,551  $  39  $  722 
Interest expense   2,353     4,334     4,458     7,891 
Income tax expense (benefit)   1,911     2,304     (92)    925 
Depreciation and amortization   4,645     4,500     9,258     9,163 
Stock-based compensation expense (4)   494     482     947     967 
Pre-opening expenses (5)   672     795     1,001     1,511 
Executive transition costs (1)   266     -      623     -  
CEO retirement (2)   -      -      -      2,647 
Adjusted EBITDA$  15,839  $  18,966  $  16,234  $  23,826 
         
(1) Expenses incurred relating to the transition of our CFO (incurred only in Q1 2019) and the recruitment and hiring of various key members of our senior management team. These events are not expected to be recurring.
(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 prior term loan. 
(4) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees under our 2019 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 2019 full year guidance:       
         
  Estimated Q3 '19 Estimated FY '19
  Low High Low High
Numerator:       
 Net income$9,000 $11,700 $20,300 $25,500
 Executive transition costs (1)-  -  462  462
 Adjusted net income$9,000 $11,700 $20,762 $25,962
Denominator:       
 Diluted weighted average shares outstanding 43,200  43,200  43,200  43,200
         
Reconciliation of earnings per share:       
Diluted earnings per share$0.21 $0.27 $0.47 $0.59
Impact of adjustments to numerator and denominator -  -  0.01  0.01
Adjusted diluted earnings per share$0.21 $0.27 $0.48 $0.60
         
(1) Expenses incurred relating to the transition of our CFO and the recruitment and hiring of various key members of our senior management team, net of tax. These events are not expected to be recurring.