Sportsman's Warehouse Holdings, Inc. Announces Third Quarter 2018 Financial Results
Mr. Barker continued “Given our year-to-date performance, we are narrowing our full year guidance. As we look to fiscal 2019, we will continue to maintain our strategy of moderated store growth and we expect to open between four and five stores, which will allow us to further invest in our e-commerce capabilities and allocate free cash flow towards debt reduction.”
For the thirteen weeks ended
- Net sales increased by 2.3% to
$223.1 million from$218.1 million in the third quarter of fiscal year 2017. Same store sales decreased by 0.5% from the comparable prior year period.
- Income from operations was
$17.5 million compared to$19.5 million in the third quarter of fiscal year 2017.
- The Company opened one new store in the third quarter of fiscal 2018 and ended the quarter with 92 stores in 23 states, or square footage growth of 4.4% from the end of the third quarter of fiscal year 2017.
- Interest expense decreased to
$2.6 million from$3.5 million in the third quarter of fiscal year 2017.
- Net income was
$12.4 million compared to net income of$9.8 million in the third quarter of fiscal year 2017. Adjusted net income, which excludes a non-recurring tax benefit, was$11.1 million compared to net income of$9.8 million for the third quarter of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).
- Diluted earnings per share was
$0.29 compared to diluted earnings per share of$0.23 for the third quarter of fiscal year 2017. Adjusted diluted earnings per share was$0.26 compared to diluted earnings per share of$0.23 in the third quarter of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).
- Adjusted EBITDA was
$22.6 million compared to$25.1 million in the third quarter of fiscal year 2017 (see "GAAP and Non-GAAP Measures").
For the thirty-nine weeks ended
- Net sales increased by 7.1% to
$606.4 million from$566.5 million in the first three quarters of fiscal year 2017. Same store sales increased by 0.8% from the comparable prior year period.
- Income from operations was
$27.1 million compared to$30.0 million in the first three quarters of fiscal year 2017. Adjusted income from operations, which excludes charges incurred in conjunction with the retirement of the Company’s former CEO, was$29.7 million , compared to adjusted income from operations of$31.7 million , which excludes professional and other fees incurred in connection with evaluation of a strategic acquisition for the first three quarters of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).
- Interest expense increased to
$10.5 million from$10.1 million in the first three quarters of fiscal year 2017. Excluding a$1.6 million write off in debt discount and deferred financing fees associated with the Company’s old term loan, interest expense was$8.9 million in the first three quarters of fiscal 2018.
- Net income was
$13.1 million compared to net income of$11.9 million in the first three quarters of fiscal year 2017. Adjusted net income, which excludes charges incurred in conjunction with the retirement of the Company’s former CEO, the write-off of deferred financing fees and debt discount associated with the Company’s old term loan, and a non-recurring tax benefit, was$15.3 million compared to adjusted net income, which excludes professional and other fees incurred in connection with evaluation of a strategic acquisition, of$12.9 million for the first three quarters of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).
- Diluted earnings per share was
$0.31 compared to$0.28 in the first three quarters of fiscal year 2017. Adjusted diluted earnings per share was$0.36 compared to$0.30 in the first three quarters of fiscal year 2017 (see “GAAP and Non-GAAP Measures”).
- Adjusted EBITDA was
$46.5 million compared to$49.8 million in the first three quarters of fiscal year 2017 (see "GAAP and Non-GAAP Measures").
Balance sheet highlights as of
- Total debt:
$219.2 million consisting of$181.6 million outstanding under the Company’s revolving credit facility and$37.6 million outstanding under the term loan, net of unamortized debt issuance costs. - Total liquidity (cash plus
$28.8 million of availability on revolving credit facility):$30.7 million
Fourth Quarter and Fiscal Year 2018 Outlook:
For the fourth quarter of fiscal year 2018, net sales are expected to be in the range of
For fiscal year 2018, net sales are expected to be in the range of
Fiscal Year
We operate on a fiscal calendar that, in a given fiscal year, consists of the 52- or 53-week period ending on the Saturday closest to January 31st. Our fiscal third quarters ended
Conference Call Information:
A conference call to discuss third quarter and fiscal 2018 financial results is scheduled for today,
Non-GAAP Information
This press release includes the following financial measures defined as non-GAAP financial measures by the
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 fourth 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
About
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:
(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 | ||||||||||||||
| November 3, 2018 | % of net sales |
October 28, 2017 | % of net sales |
|||||||||||
| Net sales | $ | 223,099 | 100.0 | % | $ | 218,115 | 100.0 | % | ||||||
| Cost of goods sold | 145,518 | 65.2 | % | 141,152 | 64.7 | % | ||||||||
| Gross profit | 77,581 | 34.8 | % | 76,963 | 35.3 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative expenses | 60,070 | 26.9 | % | 57,443 | 26.3 | % | ||||||||
| Income from operations | 17,511 | 7.9 | % | 19,520 | 9.0 | % | ||||||||
| Interest expense | (2,633 | ) | (1.2 | %) | (3,494 | ) | (1.6 | %) | ||||||
| Income before income tax expense | 14,878 | 6.7 | % | 16,026 | 7.4 | % | ||||||||
| Income tax expense | (2,480 | ) | (1.1 | %) | (6,218 | ) | (2.9 | %) | ||||||
| Net Income | $ | 12,398 | 5.6 | % | $ | 9,808 | 4.5 | % | ||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.29 | $ | 0.23 | ||||||||||
| Diluted | $ | 0.29 | $ | 0.23 | ||||||||||
| Weighted average shares outstanding | ||||||||||||||
| Basic | 42,938 | 42,576 | ||||||||||||
| Diluted | 43,094 | 42,611 | ||||||||||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | ||||||||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||
| For the Thirty-nine Weeks Ended | ||||||||||||||
| November 3, 2018 | % of net sales |
October 28, 2017 | % of net sales |
|||||||||||
| Net sales | $ | 606,447 | 100.0 | % | $ | 566,506 | 100.0 | % | ||||||
| Cost of goods sold | 401,022 | 66.1 | % | 372,310 | 65.7 | % | ||||||||
| Gross profit | 205,425 | 33.9 | % | 194,196 | 34.3 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative expenses | 178,374 | 29.4 | % | 164,207 | 29.0 | % | ||||||||
| Income from operations | 27,051 | 4.5 | % | 29,989 | 5.3 | % | ||||||||
| Interest expense | (10,524 | ) | (1.7 | %) | (10,081 | ) | (1.8 | %) | ||||||
| Income before income tax expense | 16,527 | 2.8 | % | 19,908 | 3.5 | % | ||||||||
| Income tax expense | (3,406 | ) | (0.6 | %) | (8,053 | ) | (1.4 | %) | ||||||
| Net Income | $ | 13,121 | 2.2 | % | $ | 11,855 | 2.1 | % | ||||||
| Earnings per share | ||||||||||||||
| Basic | $ | 0.31 | $ | 0.28 | ||||||||||
| Diluted | $ | 0.31 | $ | 0.28 | ||||||||||
| Weighted average shares outstanding | ||||||||||||||
| Basic | 42,854 | 42,464 | ||||||||||||
| Diluted | 42,937 | 42,501 | ||||||||||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | ||||||||
| Consolidated Balance Sheets (Unaudited) | ||||||||
| (in thousands) | ||||||||
| Assets | ||||||||
| November 3, 2018 | February 3, 2018 | |||||||
| Current assets: | ||||||||
| Cash | $ | 1,892 | $ | 1,769 | ||||
| Accounts receivable, net | 419 | 319 | ||||||
| Merchandise inventories | 369,057 | 270,594 | ||||||
| Prepaid expenses and other | 12,092 | 8,073 | ||||||
| Income tax receivable | 1,617 | - | ||||||
| Total current assets | 385,077 | 280,755 | ||||||
| Property and equipment, net | 93,273 | 94,035 | ||||||
| Deferred income taxes | 1,517 | 4,595 | ||||||
| Definite lived intangible assets, net | 252 | 276 | ||||||
| Total assets | $ | 480,119 | $ | 379,661 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 91,511 | $ | 36,788 | ||||
| Accrued expenses | 55,664 | 50,602 | ||||||
| Income taxes payable | - | 2,586 | ||||||
| Revolving line of credit | 181,566 | 59,992 | ||||||
| Current portion of long-term debt, net of discount and debt issuance costs | 7,915 | 990 | ||||||
| Current portion of deferred rent | 5,033 | 4,593 | ||||||
| Total current liabilities | 341,689 | 155,551 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, net of discount, debt issuance costs, and current portion | 29,696 | 132,349 | ||||||
| Deferred rent, noncurrent | 41,244 | 41,963 | ||||||
| Total long-term liabilities | 70,940 | 174,312 | ||||||
| Total liabilities | 412,629 | 329,863 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 429 | 426 | ||||||
| Additional paid-in capital | 84,131 | 82,197 | ||||||
| Accumulated deficit | (17,070 | ) | (32,825 | ) | ||||
| Total stockholders’ equity | 67,490 | 49,798 | ||||||
| Total liabilities and stockholders' equity | $ | 480,119 | $ | 379,661 | ||||
| SPORTSMAN’S WAREHOUSE HOLDINGS, INC. | ||||||||
| Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (in thousands) | ||||||||
| November 3, 2018 | October 28, 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | 13,121 | $ | 11,855 | ||||
| Adjustments to reconcile net income to net | ||||||||
| cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | 13,317 | 11,551 | ||||||
| Amortization and write-off of discount on debt and deferred financing fees | 1,959 | 534 | ||||||
| Amortization of Intangible | 283 | 1,355 | ||||||
| Change in deferred rent | (280 | ) | 8,284 | |||||
| Loss (gain) on asset dispositions | 30 | (14 | ) | |||||
| Deferred income taxes | 2,194 | 612 | ||||||
| Stock based compensation | 2,435 | 1,437 | ||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable, net | (100 | ) | 7 | |||||
| Merchandise inventory | (98,463 | ) | (72,037 | ) | ||||
| Prepaid expenses and other | (2,195 | ) | 3,202 | |||||
| Accounts payable | 55,204 | 40,638 | ||||||
| Accrued expenses | 2,277 | (2,078 | ) | |||||
| Income taxes payable and receivable | (4,203 | ) | 2,231 | |||||
| Net cash (used in) provided by operating activities | (14,421 | ) | 7,577 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (15,183 | ) | (39,220 | ) | ||||
| Acquisition of intangible asset | (259 | ) | - | |||||
| Proceeds from deemed sale-leaseback transactions | 1,717 | 6,130 | ||||||
| Proceeds from sale of property and equipment | 226 | 14 | ||||||
| Net cash used in investing activities | (13,499 | ) | (33,076 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net borrowings on line of credit | 121,574 | 17,482 | ||||||
| Increase in book overdraft | 5,424 | 10,157 | ||||||
| Proceeds from issuance of common stock per employee stock purchase plan | 202 | 283 | ||||||
| Payment of withholdings on restricted stock units | (699 | ) | (638 | ) | ||||
| Borrowings on term loan | 40,000 | - | ||||||
| Payment of deferred financing costs | (1,331 | ) | (341 | ) | ||||
| Principal payments on long-term debt | (137,127 | ) | (1,200 | ) | ||||
| Net cash provided by financing activities | 28,043 | 25,743 | ||||||
| Net change in cash | 123 | 244 | ||||||
| Cash at beginning of year | 1,769 | 1,911 | ||||||
| Cash at end of period | $ | 1,892 | $ | 2,155 | ||||
| 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 3, 2018 | October 28, 2017 | November 3, 2018 | October 28, 2017 | ||||||||||||||
| Income from operations | $ | 17,511 | $ | 19,520 | $ | 27,051 | $ | 29,989 | |||||||||
| Professional fees (1) | - | - | - | 1,744 | |||||||||||||
| CEO retirement (2) | - | - | 2,647 | - | |||||||||||||
| Adjusted income from operations | $ | 17,511 | $ | 19,520 | $ | 29,698 | $ | 31,733 | |||||||||
| 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 | $ | 12,398 | $ | 9,808 | $ | 13,121 | $ | 11,855 | |||||||||
| Professional fees (1) | - | - | - | 1,744 | |||||||||||||
| CEO retirement (2) | - | - | 2,647 | - | |||||||||||||
| Deferred financing fee write-off (3) | - | - | 1,617 | - | |||||||||||||
| Non-recurring tax benefit (4) | (1,322 | ) | - | (1,322 | ) | - | |||||||||||
| Less tax benefit | - | - | (813 | ) | (677 | ) | |||||||||||
| Adjusted net income | $ | 11,076 | $ | 9,808 | $ | 15,250 | $ | 12,922 | |||||||||
| Denominator: | |||||||||||||||||
| Diluted weighted average shares outstanding | 43,094 | 42,611 | 42,937 | 42,501 | |||||||||||||
| Reconciliation of income per share: | |||||||||||||||||
| Dilutive income per share | $ | 0.29 | $ | 0.23 | $ | 0.31 | $ | 0.28 | |||||||||
| Impact of adjustments to numerator and denominator | (0.03 | ) | - | 0.05 | 0.02 | ||||||||||||
| Adjusted diluted income per share | $ | 0.26 | $ | 0.23 | $ | 0.36 | $ | 0.30 | |||||||||
| Reconciliation of net income to adjusted EBITDA: | |||||||||||||||||
| Net income | $ | 12,398 | $ | 9,808 | $ | 13,121 | $ | 11,855 | |||||||||
| Interest expense | 2,633 | 3,494 | 10,524 | 10,081 | |||||||||||||
| Income tax expense | 2,480 | 6,218 | 3,406 | 8,053 | |||||||||||||
| Depreciation and amortization | 4,438 | 4,572 | 13,600 | 12,906 | |||||||||||||
| Stock-based compensation expense (5) | 366 | 388 | 1,349 | 1,437 | |||||||||||||
| Pre-opening expenses (6) | 320 | 667 | 1,831 | 3,691 | |||||||||||||
| Professional fees (1) | - | - | - | 1,744 | |||||||||||||
| CEO retirement (2) | - | - | 2,647 | - | |||||||||||||
| Adjusted EBITDA | $ | 22,635 | $ | 25,147 | $ | 46,478 | $ | 49,767 | |||||||||
| (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) Non-recurring tax benefit recognized due to our return to provision adjustments recorded in conjunction with the filing of our 2017 tax return. | |||||||||||||||||
| (5) 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. | |||||||||||||||||
| (6) 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 2018 full year guidance: | |||||||||||||||
| Estimated Q4 '18 | Estimated FY '18 | ||||||||||||||
| Low | High | Low | High | ||||||||||||
| Numerator: | |||||||||||||||
| Net income | $ | 9,970 | $ | 11,300 | $ | 23,100 | $ | 24,440 | |||||||
| CEO retirement (1) | - | - | 2,248 | 2,248 | |||||||||||
| Deferred finance cost write-off (2) | - | - | 1,203 | 1,203 | |||||||||||
| Non-recurring tax benefit (3) | - | - | (1,322 | ) | (1,322 | ) | |||||||||
| Adjusted net income | $ | 9,970 | $ | 11,300 | $ | 25,229 | $ | 26,569 | |||||||
| Denominator: | |||||||||||||||
| Diluted weighted average shares outstanding | 43,000 | 43,000 | 43,000 | 43,000 | |||||||||||
| Reconciliation of earnings per share: | |||||||||||||||
| Diluted earnings per share | $ | 0.23 | $ | 0.26 | $ | 0.54 | $ | 0.57 | |||||||
| Impact of adjustments to numerator and denominator | - | - | 0.05 | 0.05 | |||||||||||
| Adjusted diluted earnings per share | $ | 0.23 | $ | 0.26 | $ | 0.59 | $ | 0.62 | |||||||
| (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. | |||||||||||||||
| (3) Non-recurring tax benefit recognized due to our return to provision adjustments recorded in conjunction with the filing of our 2017 tax return. | |||||||||||||||
Source: Sportsman's Warehouse Holdings, Inc.