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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): December 4, 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 December 4, 2019, Sportsman’s Warehouse Holdings, Inc. (the “Company”) issued a press release reporting its results of operations for the third quarter of fiscal year 2019 ended November 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 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated December 4, 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: December 4, 2019 Robert K. Julian
   Secretary and Chief Financial Officer
     

EdgarFiling

EXHIBIT 99.1

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

MIDVALE, Utah, Dec. 04, 2019 (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 November 2, 2019.

Jon Barker, Chief Executive Officer, stated, “We are very pleased with our third quarter results, which were at the high end of our guidance on the top and bottom line excluding the eight recently acquired stores that were not included in our original outlook. These strong results are reflective of our differentiated positioning within a consolidating industry and the team’s disciplined execution of our growth strategies around merchandising, customer acquisition and engagement, and our omni-channel platform.”

Mr. Barker continued, “As we look to the final quarter of the year, we feel very good about our competitive positioning and the underlying strength of our business. That said, multiple competitors are making assortment changes that are creating some short term sales headwinds which we have incorporated in our fourth quarter outlook. We believe these competitive changes bode well for Sportsman’s Warehouse longer term, and, combined with the investments we have made across our business, we are well positioned to capitalize on the increased market share opportunities moving forward.”

For the thirteen weeks ended November 2, 2019:

For the thirty-nine weeks ended November 2, 2019:

Balance sheet highlights as of November 2, 2019:                                                 

Fourth Quarter and Fiscal Year 2019 Outlook:

For the fourth quarter of fiscal year 2019, net sales are expected to be in the range of $263.0 million to $273.0 million based on a change in same store sales in the range of down 1.5% to up 1.5% compared to the corresponding period of fiscal year 2018. Adjusted net income is expected to be in the range of $12.6 million to $15.3 million with adjusted diluted earnings per share of $0.29 to $0.35 on a weighted average of approximately 43.5 million estimated common shares outstanding.

For fiscal year 2019, net sales are expected to be in the range of $891.0 million to $901.0 million based on a change in same store sales in the range of flat to up 1.0% compared to fiscal year 2018. Adjusted net income is expected to be in the range of $24.0 million to $26.6 million with adjusted earnings per diluted share of $0.55 to $0.61 on a weighted average of approximately 43.5 million estimated common shares outstanding, when adjusted for the executive transition costs and acquisition costs incurred (see “GAAP and Non-GAAP Measures”).

Conference Call Information:

A conference call to discuss third quarter fiscal 2019 financial results is scheduled for today, December 4, 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, certain expenses incurred relating to the acquisition of eight Field and Stream stores, charges incurred in connection 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 third fiscal quarter of 2018 and less a non-recurring tax benefit related to our 2017 tax return, 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, certain expenses incurred relating to the acquisition of eight Field and Stream stores, charges incurred in connection 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 third fiscal quarter of 2018 and less a non-recurring tax benefit related to our 2017 tax return, 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. 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 market share opportunities and competitive positioning and our outlook for the fourth 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 our ability to integrate the eight recently acquired stores; 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 provides 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.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
        
        
 For the Thirteen Weeks Ended
        
 November 2, 2019 % of net
sales		 November 3, 2018 % of net
sales
        
Net sales$242,466 100.0% $223,099 100.0%
Cost of goods sold 158,256 65.3%  145,518 65.2%
Gross profit 84,210 34.7%  77,581 34.8%
        
Operating expenses:       
Selling, general and administrative expenses 68,336 28.2%  60,070 26.9%
Income from operations 15,874 6.5%  17,511 7.9%
Interest expense 2,094 0.9%  2,633 1.2%
Income before income tax expense 13,780 5.6%  14,878 6.7%
Income tax expense 3,287 1.4%  2,480 1.1%
Net income$10,493 4.2% $12,398 5.6%
        
Earnings per share       
Basic$0.24   $0.29  
Diluted$0.24   $0.29  
        
Weighted average shares outstanding       
Basic 43,230    42,938  
Diluted 43,559    43,094  



        
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
        
        
 For the Thirty-nine Weeks Ended
        
 November 2, 2019 % of net
sales		 November 3, 2018 % of net
sales
        
Net sales$628,249 100.0% $606,447 100.0%
Cost of goods sold 416,644 66.3%  401,022 66.1%
Gross profit 211,605 33.7%  205,425 33.9%
        
Operating expenses:       
Selling, general and administrative expenses 191,326 30.5%  178,374 29.4%
Income from operations 20,279 3.2%  27,051 4.5%
Interest expense 6,552 1.0%  10,524 1.7%
Income before income tax expense 13,727 2.2%  16,527 2.8%
Income tax expense 3,195 0.5%  3,406 0.6%
Net Income$10,532 1.7% $13,121 2.2%
        
Earnings per share       
Basic$0.24   $0.31  
Diluted$0.24   $0.31  
        
Weighted average shares outstanding       
Basic 43,126    42,854  
Diluted 43,316    42,937  



    
SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Balance Sheets (Unaudited) 
(in thousands) 
    
    
Assets   
 November 2, 2019 February 2, 2019
Current assets:   
Cash$1,737 $1,547 
Accounts receivable, net 620  249 
Merchandise inventories 337,894  276,600 
Prepaid expenses and other 11,062  15,174 
Total current assets 351,313  293,570 
  Operating lease right of use asset 211,957  - 
  Property and equipment, net 107,627  92,084 
  Deferred income taxes 140  2,997 
  Goodwill 1,749  - 
  Definite lived intangible assets, net 226  246 
Total assets$673,012 $388,897 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$105,527 $24,953 
Accrued expenses 64,198  56,384 
Operating lease liability, current 35,451  - 
Income taxes payable 2,868  1,838 
Revolving line of credit 130,765  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 346,724  240,666 
    
Long-term liabilities:   
Long-term debt, net of discount, debt issuance costs, and current portion 21,781  27,717 
Operating lease liability, noncurrent 204,688  - 
Deferred rent, noncurrent -  41,854 
Total long-term liabilities 226,469  69,571 
Total liabilities 573,193  310,237 
    
Stockholders’ equity:   
Common stock 432  430 
Additional paid-in capital 86,041  84,671 
Accumulated earnings (deficit) 13,346  (6,441)
Total stockholders’ equity 99,819  78,660 
Total liabilities and stockholders' equity$673,012 $388,897 
    



SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands) 
     
  November 2, 2019 November 3, 2018
CASH FLOWS FROM OPERATING ACTIVITIES    
  Net Income $10,532  $13,121 
  Adjustments to reconcile net income to net    
  cash provided by (used in) operating activities:    
  Depreciation and amortization  14,070   13,317 
  Amortization and write-off of discount on debt and deferred financing fees  252   1,959 
  Amortization of Intangible  20   283 
  Change in deferred rent  -   (280)
  Gain on asset dispositions  (311)  30 
  Noncash lease expense  22,132   - 
  Deferred income taxes  (245)  2,194 
  Stock based compensation  1,567   2,435 
  Change in assets and liabilities:    
  Accounts receivable, net  (371)  (100)
  Operating lease liabilities  (22,571)  - 
  Merchandise inventory  (42,142)  (98,463)
  Prepaid expenses and other  165   (2,195)
  Accounts payable  70,270   55,204 
  Accrued expenses  3,449   2,277 
  Income taxes payable and receivable  1,030   (4,203)
  Net cash provided by (used in) operating activities  57,847   (14,421)
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
  Purchase of property and equipment  (22,914)  (15,183)
  Acquisition of intangible asset  -   (259)
  Acquisition of Field and Stream stores, net of cash acquired  (19,074)  - 
  Proceeds from deemed sales-leaseback transactions  -   1,717 
  Proceeds from sale of property and equipment  311   226 
  Net cash used in investing activities  (41,677)  (13,499)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
  Net (payments) borrowings on line of credit  (13,541)  121,574 
  Increase in book overdraft  3,756   5,424 
  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  (6,000)  (137,127)
  Net cash (used in) provided by financing activities  (15,980)  28,043 
     
Net change in cash  190   123 
Cash at beginning of year  1,547   1,769 
Cash at end of period $1,737  $1,892 
     


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 2, 2019 November 3, 2018 November 2, 2019 November 3, 2018
Income from operations$15,874  $17,511  $20,279  $27,051 
Acquisition costs (1)$387  $-  $387  $- 
Executive transition costs (2) -   -   623   - 
CEO retirement (3) -   -   -   2,647 
Adjusted income from operations$16,261  $17,511  $21,289  $29,698 
         
Reconciliation of GAAP net income and GAAP dilutive earnings per share    
to adjusted net income and adjusted diluted earnings per share:      
         
Numerator:       
 Net income$10,493  $12,398  $10,532  $13,121 
 Acquisition costs (1) 387   -   387   - 
 Executive transition costs (2) -   -   623   - 
 CEO retirement (3) -   -   -   2,647 
 Deferred financing fee write-off (4) -   -   -   1,617 
 Non-recurring tax benefit (5) -   (1,322)    (1,322)
 Less tax benefit (100)  -   (262)  (813)
 Adjusted net income$10,780  $11,076  $11,280  $15,250 
         
Denominator:       
 Diluted weighted average shares outstanding 43,559   43,094   43,316   42,937 
         
Reconciliation of earnings per share:       
Dilutive earnings per share$0.24  $0.29  $0.24  $0.31 
Impact of adjustments to numerator and denominator 0.01   (0.03)  0.02   0.05 
Adjusted diluted earnings per share$0.25  $0.26  $0.26  $0.36 
         
Reconciliation of net income to adjusted EBITDA:       
Net income$10,493  $12,398  $10,532  $13,121 
Interest expense 2,094   2,633   6,552   10,524 
Income tax expense 3,287   2,480   3,195   3,406 
Depreciation and amortization 4,832   4,438   14,090   13,600 
Stock-based compensation expense (6) 619   366   1,567   1,348 
Pre-opening expenses (7) 1,482   320   2,483   1,832 
Acquisition costs (1) 387   -   387   - 
Executive transition costs (2) -   -   623   - 
CEO retirement (3) -   -   -   2,647 
Adjusted EBITDA$23,194  $22,635  $39,429  $46,478 
         
(1) Expenses incurred relating to the acquisition of eight stores.
(2) 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. 
(3) Expenses incurred in conjunction with the retirement of our former CEO during Q1 2018.    
(4) Write-off of deferred financing fees and debt discount relating to our prior 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) 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.
(7) 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 2019 full year guidance:        
          
  Estimated Q4 '19
 Estimated FY '19 
  Low High Low High 
Numerator:        
 Net income$12,374 $15,100 $22,982 $25,632 
 Executive transition costs (1)$- $- $462 $462 
 Acquisition costs (2)$223 $223 $510 $510 
 Adjusted net income$12,597 $15,323 $23,954 $26,604 
Denominator:        
 Diluted weighted average shares outstanding 43,500  43,500  43,500  43,500 
          
Reconciliation of earnings per share:        
Diluted earnings per share$0.28 $0.35 $0.53 $0.59 
Impact of adjustments to numerator and denominator 0.01
  -  0.02  0.02 
Adjusted diluted earnings per share$0.29 $0.35 $0.55 $0.61 
          
(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.
(2) Expenses incurred relating to the acquisition of eight stores.