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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 26, 2020

 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 March 26, 2020, Sportsman’s Warehouse Holdings, Inc. (the “Company”) issued a press release reporting its results of operations for the fourth quarter and fiscal year 2019 ended February 1, 2020, 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 March 26, 2020

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: March 26, 2020 Robert K. Julian
   Secretary and Chief Financial Officer
     

EdgarFiling

EXHIBIT 99.1

Sportsman's Warehouse Holdings, Inc. Announces Fourth Quarter and Fiscal Year 2019 Financial Results

WEST JORDAN, Utah, March 26, 2020 (GLOBE NEWSWIRE) -- Sportsman's Warehouse Holdings, Inc. ("Sportsman's Warehouse" or the “Company”) (Nasdaq: SPWH) today announced financial results for the thirteen and fifty-two weeks ended February 1, 2020.

“We are pleased with our fourth quarter and fiscal year 2019 results. Despite some competitive challenges in December, we exceeded the high-end of our updated outlook on net sales, and met the high-end of our updated outlook on earnings per share,” said Jon Barker, Sportsman’s Warehouse CEO. “We made great progress in 2019 executing on our growth initiatives, which included enhancing our omni-channel platform, improving our loyalty program, and broadening our firearms products and services offering. In 2019, we grew to 103 stores through our acquisition of eight Field & Stream stores in October and three additional store openings earlier in the year.”

Mr. Barker continued, “Looking forward to 2020, we feel very good about our competitive positioning and the underlying strength of our business. Today, we are announcing two additional new stores for 2020, which increases our new store announcements to seven for the year so far. These seven new stores include two previous Gander locations, two additional Field & Stream locations, and our first small-format concept store.”

“We have gained significant momentum both online and in stores to date in Q1. We believe this is driven by fewer competitors, the current election cycle, and increased demand from COVID-19 uncertainty. However, there is significant uncertainty in the current environment and therefore, we will not be issuing forward guidance at this time.”

“We remain optimistic about the long-term opportunities for our business. As competitors continue to de-emphasize and/or exit the firearm and ammunition categories, we see significant opportunity to capture market share,” Mr. Barker commented. “Our differentiated positioning within a consolidating industry, our dedication to the specialty outdoor retail space, and our talented team are combining to create a competitive advantage for Sportsman’s Warehouse. We look forward to a strong 2020 and beyond.”

For the thirteen weeks ended February 1, 2020:

For the fifty-two weeks ended February 1, 2020:

Balance sheet highlights as of February 1, 2020:

First Quarter and Fiscal Year 2020 Outlook:

We will not be issuing forward guidance at this time.

Conference Call Information:

A conference call to discuss fourth quarter and fiscal year 2019 financial results is scheduled for today, March 26, 2020, 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 and 2019 tax provision, 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 and 2019 tax provision, 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 the impact of the coronavirus.  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 many factors including, but not limited to: the potential effects of the coronavirus (COVID-19), including a decrease in store traffic, interruptions or delays in our supply chain and the potential closure of all or substantially all of our stores; our ability to integrate the eight recently acquired stores; the Company’s retail-based business model; general economic, market and other 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.

We 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. 

        
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
        
        
 For the Thirteen Weeks Ended
        
 February 1, 2020 % of net sales February 2, 2019 % of net sales
        
Net sales$258,152 100.0% $242,683 100.0%
Cost of goods sold 173,125 67.1%  163,177 67.2%
Gross profit 85,027 32.9%  79,506 32.8%
        
Operating expenses:       
Selling, general and administrative expenses 71,842 27.8%  62,538 25.8%
Income from operations 13,185 5.1%  16,968 7.0%
Interest expense 1,443 0.6%  2,682 1.1%
Income before income tax expense 11,742 4.5%  14,286 5.9%
Income tax expense 2,059 0.8%  3,657 1.5%
Net income$9,683 3.7% $10,629 4.4%
        
Earnings per share       
Basic$0.22   $0.25  
Diluted$0.22   $0.25  
        
Weighted average shares outstanding       
Basic 43,253    42,953  
Diluted 43,796    43,079  


        
SPORTSMAN’S WAREHOUSE HOLDINGS, INC.
Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)
        
        
 For the Fifty-two Weeks Ended
        
 February 1, 2020 % of net sales February 2, 2019 % of net sales
        
Net sales$886,401 100.0% $849,129 100.0%
Cost of goods sold 589,768 66.5%  564,199 66.4%
Gross profit 296,633 33.5%  284,930 33.6%
        
Operating expenses:       
Selling, general and administrative expenses 263,169 29.7%  240,911 28.4%
Income from operations 33,464 3.8%  44,019 5.2%
Interest expense 7,995 0.9%  13,206 1.6%
Income before income tax expense 25,469 2.9%  30,813 3.6%
Income tax expense 5,254 0.6%  7,063 0.8%
Net Income$20,215 2.3% $23,750 2.8%
        
Earnings per share       
Basic$0.47   $0.55  
Diluted$0.46   $0.55  
        
Weighted average shares outstanding       
Basic 43,166    42,878  
Diluted 43,588    42,979  


    
SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Balance Sheets (Unaudited) 
(in thousands) 
    
    
Assets   
 February 1, 2020 February 2, 2019
Current assets:   
Cash$1,685 $1,547 
Accounts receivable, net 904  249 
Merchandise inventories 275,505  276,600 
Income tax receivable 812  - 
Prepaid expenses and other 12,732  15,174 
Total current assets 291,638  293,570 
  Operating lease right of use asset 224,520  - 
  Property and equipment, net 98,767  92,084 
  Deferred income taxes -  2,997 
  Goodwill 1,496  - 
  Definite lived intangible assets, net 220  246 
Total assets$616,641 $388,897 
    
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable$38,157 $24,953 
Accrued expenses 70,118  56,384 
Operating lease liability, current 34,487  - 
Income taxes payable -  1,838 
Revolving line of credit 116,078  144,306 
Current portion of long-term debt, net of discount and debt issuance costs 5,936  7,915 
Current portion of deferred rent -  5,270 
Total current liabilities 264,776  240,666 
    
Long-term liabilities:   
Long-term debt, net of discount, debt issuance costs, and current portion 23,781  27,717 
Deferred income taxes 562  - 
Operating lease liability, noncurrent 217,254  - 
Deferred rent, noncurrent -  41,854 
Total long-term liabilities 241,597  69,571 
Total liabilities 506,373  310,237 
    
Stockholders’ equity:   
Common stock 433  430 
Additional paid-in capital 86,806  84,671 
Accumulated earnings (deficit) 23,029  (6,441)
Total stockholders’ equity 110,268  78,660 
Total liabilities and stockholders' equity$616,641 $388,897 
    


     
     
SPORTSMAN’S WAREHOUSE HOLDINGS, INC. 
Condensed Consolidated Statements of Cash Flows (Unaudited) 
(in thousands) 
     
  February 1, 2020 February 2, 2019
CASH FLOWS FROM OPERATING ACTIVITIES    
  Net Income $20,215  $23,750 
  Adjustments to reconcile net income to net    
  cash provided by operating activities:    
  Depreciation and amortization  19,294   17,961 
  Amortization and write-off of discount on debt and deferred financing fees  339   2,043 
  Amortization of Intangible assets  26   289 
  Change in deferred rent  -   568 
  Gain on asset dispositions  (311)  30 
  Noncash operating lease expense  27,009   - 
  Deferred income taxes  710   714 
  Stock based compensation  2,104   2,829 
  Change in assets and liabilities, net of amounts acquired:    
  Accounts receivable, net  (655)  70 
  Operating lease liabilities  (28,374)  - 
  Merchandise inventory  20,247   (6,006)
  Prepaid expenses and other  (1,571)  (5,339)
  Accounts payable  12,709   (11,726)
  Accrued expenses  8,774   7,739 
  Income taxes payable and receivable  (2,650)  (749)
  Net cash provided by operating activities  77,866   32,173 
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
  Purchase of property and equipment  (30,372)  (17,936)
  Acquisition of intangible asset  -   (259)
  Acquisition of Field and Stream stores, net of cash acquired  (28,536)  - 
  Proceeds from deemed sales-leaseback transactions  9,533   1,717 
  Proceeds from sale of property and equipment  311   226 
  Net cash used in investing activities  (49,064)  (16,252)
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
  Net (payments) borrowings on line of credit  (28,228)  84,314 
  Increase in book overdraft  5,530   353 
  Proceeds from issuance of common stock per employee stock purchase plan  403   351 
  Payment of withholdings on restricted stock units  (369)  (703)
  Borrowings on term loan  -   40,000 
  Payment of deferred financing costs  -   (1,331)
  Principal payments on long-term debt  (6,000)  (139,127)
  Net cash used in financing activities  (28,664)  (16,143)
     
Net change in cash  138   (222)
Cash at beginning of year  1,547   1,769 
Cash at end of period $1,685  $1,547 
     


         
         
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 Fifty-two Weeks Ended
         
  February 1, 2020 February 2, 2019 February 1, 2020 February 2, 2019
Income from operations$13,185  $16,968 $33,464  $44,019 
Acquisition costs (1)$275  $- $662  $- 
Executive transition costs (2) 147   -  770   - 
CEO retirement (3) -   -  -   2,647 
Adjusted income from operations$13,607  $16,968 $34,896  $46,666 
         
Reconciliation of GAAP net income and GAAP dilutive earnings per share    
to adjusted net income and adjusted diluted earnings per share:      
         
Numerator:       
 Net income$9,683  $10,629 $20,215  $23,750 
 Acquisition costs (1) 275   -  662   - 
 Executive transition costs (2) 147   -  770   - 
 CEO retirement (3) -   -  -   2,647 
 Deferred financing fee write-off (4) -   -  -   1,617 
 Non-recurring tax benefit (5) (686)  -  (686)  (1,322)
 Less tax benefit (109)  -  (370)  (813)
 Adjusted net income$9,310  $10,629 $20,591  $25,879 
         
Denominator:       
 Diluted weighted average shares outstanding 43,796   43,079  43,588   42,979 
         
Reconciliation of earnings per share:       
Dilutive earnings per share$0.22  $0.25 $0.46  $0.55 
Impact of adjustments to numerator and denominator (0.01)  -  0.01   0.05 
Adjusted diluted earnings per share$0.21  $0.25 $0.47  $0.60 
         
Reconciliation of net income to adjusted EBITDA:       
Net income$9,683  $10,629 $20,215  $23,750 
Interest expense 1,443   2,682  7,995   13,206 
Income tax expense 2,059   3,657  5,254   7,063 
Depreciation and amortization 5,230   4,650  19,321   18,250 
Stock-based compensation expense (6) 538   391  2,104   1,742 
Pre-opening expenses (7) 211   7  2,694   1,838 
Acquisition costs (1) 275   -  662   - 
Executive transition costs (2) 147   -  770   - 
CEO retirement (3) -   -  -   2,647 
Adjusted EBITDA$19,586  $22,016 $59,015  $68,496 
         
(1) Expenses incurred relating to the acquisition of Field & Stream 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 and estimates used in the preparation of our 2019 provision
(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. 

Investor Contacts:
Robert Julian, Chief Financial Officer
Caitlin Howe, Vice President, Corporate Development & Investor Relations
(801) 566-6681
investors@sportsmans.com